Heinemann retail at €3.1bn; Group turnover up 81%

By Luke Barras-hill |

Gebr. Heinemann’s headquarters in Hamburg, Germany.

Gebr. Heinemann has reported turnover of €3.8 billion/$4.1 billion in full-year 2022 backed by a commanding performance from its retail division, which is in the process of folding its operations with joint venture partners in Russia.

In a display that outshines what it had previously admitted was an ambitious target to claw back 75% of 2019 turnover in 2022, the Hamburg-headquartered travel retailer surpassed expectations by hitting 79% of pre-crisis earnings (2019: €4.8 billion).

The result marks an 81% increase year-on-year (2021: €2.1bn), lifting profitability back to the its 2019 level.

Turnover from the retail segment at €3,068 million accounted for 80% of the Group’s result and a four percentage-point jump on 2021 (76%).

TRBusiness and other representatives from the trade press joined senior Heinemann executives in Hamburg yesterday (27 April) for a press briefing, where the travel retailer presented its key financials, performance analysis and annual report while extending its typical generosity and warmth to guests.

Cruise consolidation in Americas

The media address, the first-in person since 2019, captured the type of convivial yet frank open-book discussion so missed – and needed ­– from events such as these since the onset of the pandemic.

Airports remain Heinemann’s most lucrative sales channel (77%), followed by border shops (9%).

Other channels including the diplomatic business, free trade zones or military bases mirrored the latter’s share (9%), followed by cruise ships and ferries (5%) and airlines (3%).

The press briefing twinning with the release of Gebr. Heinemann’s annual report marked the first in-person gathering between management and the trade media since 2019.

As has been the case historically, Europe is Heinemann’s stronghold region with a return of €2,224 million (+71% yoy) in 2022, representing a 58% share of turnover, followed by the Middle East & Africa at MEA at €1,387m (+98% yoy), accounting for a 36% share of turnover.

Meanwhile, the Asia Pacific and Americas registered smaller shares (4% and 2%, respectively), with the cruise business bouncing back strongly in the case of the latter region.

Broken down by category, liquor, tobacco and confectionery made up more than half (52%) of Heinemann’s turnover.

In second position was perfume & cosmetics (34%), followed by fashion, accessories & watches and jewellery (9%).

Setting the backdrop for a wide-ranging exchange with journalists, Co-CEO Max Heinemann opened proceedings by paying thanks to the occasion itself.

He noted that compiling its annual report was not easy, particularly within the context of a pandemic, as he reminded guests that human centricity informs the discourses of evolution at the family owned company.

“In 2022, our business model proved resilient even though it was forced through a difficult time. What we are faced with now is the speed of the recovery of the industry. We are coming from a painful period to speaking about growing pains.”

‘Turning travel time into valuable time as the most human-centric company in global travel retail’. Left to right: Nina Semprecht, Director Corporate Communications & External Affairs; Dr Kai Deneke, Chief Financial Officer; Raoul Spanger, Co-CEO; and Max Heinemann, Co-CEO.

A busy 2022 characterised by the reopening and scaling up of travel routes aligned with the further relaxation of Covid-19 restrictions across many countries yielded important concession renewals and new business opportunities.

“After a difficult start, the global travel retail market recovered during the year,” explained Raoul Spanger, Co-CEO. “We have seen once again that when people are allowed to travel, they travel. China’s strict travel restrictions have led to a further absence of Asian shoppers.

“At the same time, more people have flown on other continents and in many places we are still seeing above-average spending per passenger. Asian travellers will also return in greater numbers during the second half of 2023, according to our estimates.

“In Asia, the traffic is 15 months delayed; Chinese are travelling to Malaysia but we’re expecting more Chinese in the second half. That is a situation we have to face.”

On the international markets outside Europe, Spanger confirmed that Heinemann would concentrate on consolidating and prioritising its cruise business out of Miami for a three-year period.

Russia: Cutting retail ties

Elsewhere, Spanger revealed that Heinemann is ceasing its retail operations in Russia where it operates via joint ventures at the likes of Sheremetyevo International Airport, though it will continue to have some business in the country.

Commenced last year, the process remains ongoing and is yet to be concluded.

“The Heinemann brand name is no longer on the door in Moscow’s Sheremetyevo and Domodedovo and other places,” confirmed Spanger. “This is a legal issue that has to be signed but all our shareholding has been sold [to Russian airport partners].

“We are withdrawing retail, selling our shares in the JVs and will refocus our business towards wholesale,” added Spanger. “We will still do wholesale, but no retail anymore.”

In total, 27 shops at airports, border crossings, and onboard cruise ships and ferries were opened or renovated in 2022.

“We had a strong summer; the airports sector was over 100% of 2019 levels in some months,” confirmed Dr. Kai Deneke, Chief Financial Officer, Gebr. Heinemann. “The SPPs [spend per passenger] were relatively high versus pre-crisis level. We see that levelling out, but we still see positive effects at SPP level.”

In March 2022, Royal Caribbean’s (RCL) ‘Wonder of the Seas’ made her maiden voyage with Heinemann, running seven shops onboard the vessel capable of handling 6,680 passengers and around 2,400 crew members.

Heinemann has been awarded the concession for RCL newbuild the ‘Icon of the Seas’, which is scheduled for sailings in 2024.

In June, the company won the tender for four duty free and travel value shops at Düsseldorf Airport, marking a return to the location after almost ten years.

An official opening of the shops is planned for later in the year after refurbishments complete.

Elsewhere, several shops were inaugurated or upgraded across Heinemann’s border shops business.

“Even during the [Russia-Ukraine] war, 10 out of 13 border shops are doing business so there is still demand but not comparable to pre-crisis levels,” explained Deneke.

Above and below: Gebr. Heinemann hosted a guided press tour of its logistics warehouse situated in nearby Allermöhe.

While airline retail has been hit particularly hard by the pandemic, the channel is gaining new momentum with tenders won for the Polish airline LOT and Uzbekistan Airways.

This year, the travel retailer has made sizeable gains in Sydney where it opened its new luxury assortment at the International Terminal 1 feeding into the upgraded SYD X renovations.

In May, it is due to reopen its confectionery concession at Hong Kong Airport where it operates under the fascia ‘Sweet Dreams’.

Over the next two years, Heinemann has earmarked 15 airport concessions with a projected turnover of €2 billion.

“We will participate in tenders where we see appropriate,” explained Spanger.

Six promises to customers

With regards to Heinemann’s corporate responsibility focuses, in 2018, the company joined the United Nations Global Compact (UNGC) and has continued to embed its sustainable development goals within its corporate strategy.

By 2030, the company has committed to achieving these through several important lenses: Energy & Emissions, Waste & Packaging, Product Portfolio and People.

“In each of our four fields of action, we were able to take important steps in 2022 to implement our targets as planned,” commented Spanger.

After switching to green electricity means in 2021, the proportion of energy from renewable sources reached 94% last year.

The firm opened its first regional warehouse in Oslo, Norway in November, which is designed to save around 300,000 transport kilometres per year in travel between Germany and Norway – equating to approximately 570 tons of carbon dioxide.

It has also replaced 25% of consumables at its Hamburg base and logistics centres with sustainable alternatives.

In 2021, Heinemann offered the sustainable category ‘Future Friendly’ concept to travellers and this was expanded in 2022 to locations outside of Germany with an extended range.

In the same year, it formulated a new mission statement: ‘The Heinemann Family: We Turn travel time into valuable time as the most human-centric company in global travel retail’.

Underpinning its vision for growth and in a bid to bolster its mission statement, Heinemann has announced six promises to its customers and consumers: A spectacular product assortment and unforgettable experiences, activating price advantages, being a valuable travel companion with impressive employees and delivering a sustainable impact.

Max Heinemann added: “The promises set out our priorities for the coming years. Everything we did last year and will do this year is aimed at implementing them. The task now is to transfer the promises into our shops and make them visible and tangible for our customers and the travellers. In 2022, we started this process very successfully and in 2023, we will consistently continue along this path.”

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