[UPDATED] Growth in Mainland China as Lagardère TR sales down 60% in FY20

By Luke Barras-hill |

Lagardère Travel Retail suffered a 60.4% decline in revenue on a like-for-like basis (59.7% consolidated) to €1,720 million/$1,960 million in 2020.

The duty free segment was impacted by a lack of passenger traffic (-67% versus 2019 like-for-like), but the travel essentials sector benefitted from diversified distribution channels (-53% versus 2019 like-for-like).

Announcing its full-year results today (25 February), parent Lagardère Group revealed a 38% like-for-like decline in revenue to €4,439m/$5,060m.

Fourth quarter sales for Lagardère Travel Retail were down by 64.9% like-for-like to €380m, on par with the decline in the third quarter, as the Paris-headquartered travel retailer felt the continued reverberation of global air traffic losses.

Travel restrictions in several countries impacted performance in Europe and North America during the fourth quarter. Revenue in North America remained at the same level as Q3 2020 (-66% year-on-year).

The multi-location firm’s France division contracted by 64.5% due to the French government’s restrictions on movement, including international air travel.


Railway concession sales declined by 54%, although this was reportedly smaller than the undisclosed ‘marked fall’ in business at the company’s airport locations.

A 59.3% downturn across EMEA (excluding France) echoed the travel restrictions and tightened border controls in place in several countries in Europe such as Italy and Belgium, plus the UK.

Lagardère Travel Retail full-year 2020 revenue totalled €1,720 million, down 59.7% on a consolidated basis. A positive €51 million scope effect was mainly attributable to the acquisition of Belgium’s International Duty Free (IDF). The currency impact reduced revenue by €20 million. Click to enlarge. Source: Lagardère Group.

Asia Pacific revenue fell by 56.2%, with varied performances across the region.

However, Lagardère Travel Retail’s operations in Mainland China returned growth of +18.2% over the year.

This was tied to ‘a significant rally in domestic traffic and strong online sales momentum’, read the announcement.


As reported, Lagardère Travel Retail opened a new 30,000sq m store in December on Hainan island with Hainan Tourism Investment Development Co. This followed an agreement between the parties [click here for more].

“Trading at Lagardère Travel Retail closely mirrors trends in air passenger traffic,” the statement read. “As of 3 February 2021, forecasts published by various organisations including IATA indicate growth in air passenger traffic in 2021 at between 13% and 50% versus 2020.

Group losses before finance costs and tax totalled €549m, against a profit of €411m in 2019. Click to enlarge. Source: Lagardère Group.

“In 2021, Lagardère Travel Retail will press ahead with the earnings protection initiatives launched in 2020, which resulted in a very favourable flow-through ratio of 19.9% in 2020, a benchmark in its industry.

“These cost-cutting actions will allow Lagardère Travel Retail to minimise flow through in 2021 versus 2019 , depending on the pace of the recovery. Lagardère Travel Retail is also actively continuing efforts to control cash, especially as regards working capital and capital expenditure in 2021.”

Speaking during an analyst call yesterday (25 February) on the group’s 2020 results, Arnaud Lagardère, Managing Partner, Lagardère Group said: “Most of the analysts have indicated we were really top of the class in terms of travel retail flow-through in 2020.

“There are a number of reasons for this including the talent of our team, but we also have to acknowledge that the reason we have been so quick to respond to the crisis is because we are a decentralised unit.

“The people in place locally were able to move quicker and negotiate with landlords on the various conditions. Obviously this carried some cost, but we saw the benefit.”

Dag Rasmussen, Chairman and Chief Executive Officer, Lagardère Travel Retail, who is expecting a flow-through ratio of between 20% and 25% in 2021 says the retailer is aiming to recoup lost working capital from last year. “Part of this will be dependent on sales, but I want to make it as less dependent on sales as possible.

“We have a huge amount of work to do on inventory, receivables, payables and on all kinds of elements of the working capital to get back most of what we lost last year.”

Speaking about the pandemic’s impact on business in a recent LinkedIn post, Rasmussen remarked: “Nothing could have prepared us for the upheaval of the global pandemic and its dramatic consequences for our business, but I am grateful for it.

“This is because it has given me the chance to measure the excellence and commitment of my colleagues. It has been a great honour to work alongside them and see them go that extra mile to protect our business.”

He added: “I am also grateful because we have been able to leverage the long-lasting relationships we have with our business partners. There have been difficult conversations, but I feel we have managed to collectively build greater resilience and forge deeper ties.”

Fourth quarter sales for Lagardère Travel Retail were down by 64.9% like-for-like to €380m.

The post concluded: ‘The pandemic has also taught us many valuable lessons which I know will enable us to build a stronger future. As a leader, my role is to keep my team’s eyes fixed beyond the horizon and share my confidence.

“Strong headwinds will continue, but we are prepared and are taking action to place ourselves in the best possible position to benefit from the recovery. The vaccine is starting to bring the relief we were so desperate for. Travel will resume and so will growth for our industry.”

Group losses before finance costs and tax totalled €549m, versus a profit of €411m in 2019.

Luc Mansion, Chief Financial Officer & Regional COO – Pacific, Lagardère Travel Retail. Source: Lagardère Travel Retail.


In an outlook statement, Lagardère acknowledged the uncertain environment against the backdrop of ‘a gradual easing of the intensity of the pandemic’.

Lagardère Travel Retail, which generated 39% of total group revenue in 2020 (compared to 59% in 2019) did not comment directly on the results, but offered TRBusiness some written commentary via an insights document.

Within this, Luc Mansion, Chief Financial Officer & Regional COO – Pacific, Lagardère Travel Retail praised a ‘best-in-class’ *flow through of 19.9% and efforts undertaken to mitigate against the impact of revenue decline on profitability.

He said continued headwinds will result in a short-term strain on operations, but Lagardère Travel Retail is prepared to face a slow recovery in 2021.

“We took the opportunity of the crisis to launch an ambitious business transformation program focused on efficiency and performance which will ensure we emerge from the crisis quicker & stronger, to then accelerate our profitable growth,” said Mansion. Turning to 2021, we see cause for optimism.

“There is still a long way to full recovery, but Lagardère Travel Retail is well equipped to face the future by capitalising on its biggest assets: long-term focus supported by a sound strategic vision, exceptional and empowered teams, agility, innovation and long-lasting partnerships with our landlords and brand partners.”

*Flow through is calculated by dividing the change in recurring operating profit of fully- consolidated companies (recurring EBIT) by the change in revenue.


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