In calendar year 2008, Dufry's sales turnover rose by an impressive 9.5% to Swf.2.113.5m ($1.85bn) from Swf.1.930.3m ($1.7bn) in 2007, although the increase would have been 18% on constant FX rates. EBITDA (before other operational

result) increased by 23% on constant FX rates and 13% after translation to Swiss Francs to Swf.293.4m ($257.8m) in 2008. The Basle-based retailer added this morning that organic growth for the full year was 4.5% and this was driven by passenger growth and productivity improvements.

Growth from Dufry's Hudson acquisition, which was consolidated as from October 2008, contributed nine percentage points and new concessions and expansions contributed 3.7 percentage points. The foreign exchange impact of translating into Swiss Franc was a negative 7.7%. Net sales amounted to Swf.2.057.3m ($1.8bn) in 2008.

In terms of regional development, European sales turnover fell by 7.4% to Swf.394m ($346m) in 2008 against Swf.425.5m ($374.1m) in 2007. Italy experienced a double-digit decrease, mainly due to Alitalia's de-hubbing from Milan airports as a consequence of its financial problems, which affected Dufry's operations in Milan for the majority of the year. Dufry's new operations in the Czech Republic also contributed to the result as from March, 2008.

Further afield, Africa increased its turnover by 11.9% which reached Swf.205.4m ($180.5m) in 2008, with Morocco performing exceptionally well for another consecutive year due to strong organic growth, the ramp up of the previous year's new operations as well as the opening of new stores.

Tunisia also posted an increase compared to the previous year. The growth of the region was further driven by the to the full year contribution of the Egyptian operations, which were started in the second half of 2007.

Eurasia grew its turnover by 16.7% to Swf.267.1m ($234.8m) in 2008. Dufry said that in Russia, the build up of its operations in Sheremetyevo, which started in the second half of 2007, resulted in a double-digit growth, followed by Sharjah, where recent refurbishments supported strong organic growth. In Singapore, the company also opened new shops at Changi Airport in 2008 and Dufry said that this more than compensated for the expiry of some other concessions. Also, the continued development of Serbia contributed positively to the region's performance.

Following the acquisition of Hudson, Dufry says it has proceeded with a reshuffling of the operations in North America and Caribbean in order to reflect the geographical presence of the group more accurately. It says that the new regions that have been formed have been compared with the like-for-like figures of operations in this regions last year.

Breaking this down, Dufry said that Central America and the Caribbean, which comprises all the business of the former Region North America & Caribbean except the US business, posted a pro forma turnover of Swf.370.5m ($325.6m) in 2008, a decrease of 13.7%.

Apart from the negative foreign exchange impact, which accounted for roughly half of the decrease, the sales reduction was mainly due to the weaker performance of several operations in the British Caribbean, as well as the Puerto Rican and Mexican operations – the latter said to be due to the reorganization of the airport in Mexico City. Dufry says that the rest of the operations performed very well, with some of them achieving double-digit growth.

At the same time, South America also performed well with turnover reaching Swf.656.6m ($577.8m) in 2008, corresponding to an increase of 6.8%. Excluding the FX impact, South America grew by 15.7%. All operations had double-digit sales growth when measured in USD. Whereas most of Brazil's growth was organic, growth in the cruise lines' business was mainly driven by new shops.

Dufry says that its North America division comprises Hudson, as well as Dufry's original US business. Turnover in this region increased by 358.7% to Swf.219.8m ($193.4m) in 2008 versus just Swf.47.9m ($42.1m) in the previous year. This increase was obviously due to the Swf.173.8m ($152.9m) contribution from the consolidation of Hudson since October 2008.

In terms of gross profit, this number increased by 12% to Swf.1.151.9m ($1bn). Gross margin increased by 1.2 percentage points to 54.5% in 2008 from 53.3% in 2007. Dufry says that the improvement in gross margin is mainly based on the centralized negotiations with suppliers, as well as the targeted selection of the product mix in the shops towards higher margin products.

In 2008, EBITDA (before other operational income/expenses) increased by 23% on constant FX rates and by 13.2% after translation into Swiss Francs. In absolute terms, EBITDA amounted to Swf.293.4m ($258m) in 2008 compared to Swf.259.3m ($228m) in 2007. EBITDA margin increased by 0.5 percentage points to 13.9% in 2008 from 13.4% in 2007. Without the effect of the Hudson, EBITDA margin reached 14.1%.

EBIT normalized for expenses of unrealized transactions in 2008 and the gain related to the IPO in Brazil of Swf.18.3m ($16m) in 2007 increased by 15.1% and reached Swf.200.3m ($176.1m) in 2008 versus Swf.174m ($153m) in the previous year. EBIT increased by 1.5% and reached Swf.195.1m ($171.5m) in 2008 versus Swf.192.3m ($169.1m) in the previous year.

Net earnings before minorities increased by 14.2% to Swf.123m ($108.2m) when excluding the capital gain related to the IPO in Brazil in 2007 and the expenses of the unrealized transactions in 2008. Net earnings before minorities in 2008 decreased by 6.6% to Swf.117.8m ($103.6m) from Swf.126m ($110.8m) in the previous year.

As of December 31, 2008, Dufry's net debt amounted to Swf.824.2m ($725.1m) compared to Swf.370.4m ($325.8m) by the end of 2007. Dufry says that the increase is mainly due to the refinancing of Hudson's debt at the time of the transaction. Equity increased to Swf.950.9m ($836.9m) as of December 31, 2008, from Swf.737.8m ($649.1m) on the respective date of the previous year.

Dufry CEO Juli?n D?az said: ‘2008 was an excellent year for Dufry as the 2008 figures illustrate – we achieved for the first time in our history a 14% EBITDA margin. Even in the challenging fourth quarter, the comparable margin was above 15%. Furthermore, the acquisition of Hudson has broadened Dufry's travel retail expertise and provides more opportunities on the development of commercial areas at airports. By combining Dufry's global duty free expertise with Hudson's duty paid concepts, Dufry can now target all passengers at airports, irrespective of whether they are domestic or international travellers.

‘As for 2009, we expect it to be a challenging year for Dufry – passenger numbers in the first months of 2009 have decreased and current forecasts expect a negative number also for the full year. With the implementation of our Efficiency Plan, we minimise the negative effects of the current economic environment and retain our operational flexibility, focusing on cash management, debt reduction and maintaining past profitability levels.

‘As the economic slowdown goes on, we are certain that it will create opportunities for further consolidation in the industry, most likely towards 2010. This means on one hand that in 2009, Dufry's focus will be clearly on efficiency improvements, and on the other hand that once the global economic situation has stabilized, Dufry will emphasize its strategy of profitable growth again.’

A full presentation of the results will be made later today at Zurich's SIX Convention Point, where CEO Juli?n D?az and Xavier Rossinyol, Chief Financial Officer will address attendees.

According to The Travel Retail Business' exclusive 'World's Top 10 Operators Report 2007' Dufry is the world's third-largest duty free and travel retailer (after DFS with $2.7bn and Autogrill with $2.4bn in 2007), generating sales of $1.7bn in 2007 and accounting for a 6.5% share of global sales. Last year it increased its sales turnover by a further 9.5% to $1.8bn.

The company currently operates more than 1,000 duty free and duty paid shops in airports, cruise lines, seaports, railway stations and downtown tourist areas. It also employs around 11,000 people and operates in 40 countries in Europe, North America, Central America & Caribbean, South America, Asia and Africa.

[The exchange rate used in this story is: 1 Swiss Franc = 0.880119 USD-Ed].