Dufry kicks off 2023 with 51.5% organic first quarter growth

By Kristiane Sherry |

Xavier Rossinyol has hailed the Q1 results, the first since the Dufry-Autogrill merger, as ‘momentous’.

Leading travel retailer Dufry Group has reported year-on-year organic turnover growth of 51.5% for its first trading quarter of 2023, excluding sales from recent acquisition Autogrill.

When sales from the food and drink operator are included, turnover for the quarter reached CHF 2,359.3 million/US$2,639 million (all conversions at today’s exchange rate), an increase of 113.4% versus 2022.

Dufry began the process of fully consolidating the Autogrill business in February 2023.

EBITDA stood at CHF 134.1m/US$149.93m for the period, “strongly above prior years’ levels” in the seasonally lowest quarter, the business said in its trading update.

Both S&P Global Ratings and Moody’s have upgraded Dufry’s credit rating to BB- CreditWatch Positive and Ba3 Outlook Positive respectively.

Net debt stood at CHF 3,029.0m/US$3,388.05m as of the end of March 2023.

A ‘more diversified’ portfolio

New concessions contributed net 3.3% gains, while currency effects took a -2.5% hit for the quarter, mainly due to both the euro and British pound.

Duty free account for 38% of turnover, duty paid and convenience stood a 26% share, with food and beverage weighing in at 36%.

Dufry hailed its “more diversified portfolio”, with airport retail making an 84% contribution. The remaining turnover came from motorway, railway, cruise ships, ferries, ports and other operations. 

Dufry has hailed its more diverse portfolio.

The business has confirmed its “confidence” in its near-term outlook, buoyed by a continued “strong demand” for travel retail and travel F&B into the second quarter.

However it says it is maintaining a “prudent” approach, citing potential macroeconomic changes, operational challenges, and potential impacts on consumer sentiment and travel spend.

Performance by region

With the acquisition of Autogrill, Dufry has revised its segment reporting to four regions: Europe, Middle East and Africa (EMEA), North America (NA), Latin America (LATAM) and Asia Pacific (APAC). 

EMEA turnover saw 58% organic growth for the quarter to CHF 1,045.6m/US$1,169.29m, driven by leisure demand. Top-performing destinations included Turkey, Greece and Morocco. 

Over the quarter, Dufry won or extended contracts at a number of airports including Helsinki, Brussels, the UK’s East Midlands and Stansted, Düsseldorf and across The Netherlands.

In North America, turnover reached CHF 781.6m/US$ 874.09m, representing organic growth of 33.8%.

Growth came from the domestic US market, with Canada impacted by lower numbers of Chinese travellers.

Dufry opened its eighth Hudson Nonstop, powered by Amazon’s Just Walk Out technology, at Charleston International Airport.

It also opened five stores at the new Newark Liberty International Airport Terminal A, and won a long-term contract at Boston Logan International. 

Dufry 2023 Q1 turnover by region

Across LATAM, turnover stood at CHF 376.3m/US$ 420.83m for the quarter, up 47.8% year-on-year. Argentina, Mexico and the Caribbean were the top performing markets.

Dufry noted that the cruise sector continued to recover in the region, and it won a new contract at Brazil’s Vitória Airport.

APAC saw a “significant” improvement as pandemic-related restrictions continued to ease. Turnover surged 276.9% to CHF 131.1m/US$146.58m.

New, newly opened and extended concessions include Bangalore, Bali and Kuala Lumpur. 

‘Destination 2027’

Dufry also pointed to its Destination 2027 strategy, which it says will “revolutionise” the travel experience.

To deliver its vision, the company formed a new Global Executive Committee with representatives from across the business.

Shareholders voted for Alessandro Benetton, Chairman of Edizione and former Board member of Autogrill; Enrico Laghi, CEO of Edizione; and Sami Kahale to represent Edizione on Dufry’s Board of Directors.

Dufry added that it would focus on strengthening its sustainability engagement. Diversity and inclusion training is rolling out, and its ESG score from Moody’s now stands above industry sector average.

‘Momentous’ results

“Today is momentous for Dufry, for our people and our investors,” said Xavier Rossinyol, CEO of Dufry Group, in a statement. 

“This is our first report as a combined Group; Dufry and Autogrill are now one united company, creating value for all stakeholders together.”

He described the quarter as a “solid performance” that was “supported by the business combination”. He added that April sales were already tracking ahead of 2019 levels at constraint exchange rates. 

“We are well positioned for quarter two while we maintain our discipline, both in new business development and in cost and cash management. 

“On an external level, our teams closely monitor any potential geo-political, macroeconomic, inflation, operational and airport capacity changes, as well as changes in consumer sentiment, adjusting our course to mitigate risk and take advantage of opportunities. 

“With leadership representative of both companies, our teams are on track to generate synergies and new commercial concepts, with initial benefits as early as this year. 

“We are committed to realising our business integration while continuing to deliver outstanding service experiences for our customers. This traveller-centric approach benefits more than just our customers, flowing on to our concession, brand and business partners alike.”

Dufry and Autogrill combined perfomance

He said that the new combined group was in a stronger financial position with more flexibility, and a new shareholder structure to benefit the integrated company.

“Above all, I want to thank our employees for their extraordinary motivation and hard work. We remain convinced that by revolutionising the travel experience globally, we will continue our growth trajectory and track record of delivery.” 

 In its full-year 2022 results released in March, Dufry reported a 57% jump in core EBITDA to CHF 606.2m/US$650.5m, with Group turnover standing at CHF 6,878.4m/US$7,380.5m.

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