Dufry: Gross margin improves after supplier negotiations
By Charlotte Turner |
Dufry’s gross margin improved 30 basis points in the first quarter of 2-18 which was “mainly driven by negotiations with suppliers and additional promotion activities,” according to Dufry CFO, Andreas Schneiter.
Schneiter also revealed during a press conference call with analysts and journalists earlier this week that the retailer’s concession fees had improved by almost 20 basis points. The main drivers being shop mix changes as well as an improvement in some of the concession contracts.
“For the full year we continue to expect a small increase in concession fees as a percentage year-on-year, but even so, those numbers illustrate concession fees can improve in certain situations,” reiterated Schneiter.
Schneiter was also tasked with answering numerous questions on both currency exchange rate impacts and cash flow. Addressing currency impacts formerly he said: “The FX translation effect in the first quarter was -0.5%.
“The strong US dollar against the Swiss franc resulted in a negative FX effect, which could not be fully compensated by the positive FX effect on the Euro and the British pound vs the Swiss Franc. Based on the current exchange rate, translation FX will turn positive in the second quarter.”
Staying with currency, the company’s CEO, Julián Diaz added that the devaluation of the Russian rouble, along with the prices on the domestic market – which have risen significantly – contributed to a healthy performance in Russia in Q1.
Moving on to the topic of cash flow, Schneiter confirmed that free cash flow was -CHF 45m ($44.8m) in the first quarter, which is actually an improvement of CHF 32m ($31.9m) compared to last year.
“As in 2017 we invested a substantial amount in networking capital in the first quarter of 2018,” added Schneiter. “This year in 2018 it was CHF 131m compared to the CHF 137m last year. “
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