In light of the Covid-19 pandemic, Lagardère Travel Retail parent company, Lagardère Group, has reported that is suspending its 2020 market guidance previously issued within its 2019 full-year results (published on 27 February) and has announced a change in the dividend it was due to officially propose at a General Meeting on 5 May 2020.
The Lagardère Group says in a statement that at the time it published its full-year 2019 results the impacts of Covid-19 were mainly being felt by its Lagardère Travel Retail division, and more specifically, in the Asia Pacific region and at international hub airports.
In February, the Group issued a 2020 recurring EBIT growth target of between 4% and 6% at constant exchange rates, excluding the acquisition of IDF and the effect of the Covid-19 pandemic, estimating the adverse impact on recurring EBIT in the first quarter of 2020 (before the impact of action plans) to be in the region of €20m.
“The effects of the epidemic have since extended to Lagardère Travel Retail’s other operations and, to a lesser extent, to the rest of the Group’s activities, [as a direct result of] both the rapid spread of the virus and the government lockdowns and closures that have been ordered in many of the countries in which the Group has operations,” said Lagardère Group.
The Group said continues to work tirelessly to protect employees, customers and partners, whilst implementing measures to mitigate the financial impacts in four areas: adapting sales and prices where possible; reducing overheads; reviewing investments, and reducing working capital.‘UNABLE TO ASSESS IMPACTS PRECISELY AND RELIABLY’
“In view of the uncertainty over the duration and scale of the epidemic and the government lockdowns and closures, the Group is unable to assess its impacts precisely and reliably,” it added.
“Accordingly, it is suspending the market guidance announced on 27 February 2020, and will provide an update as and when it is able to.”
The Group says it has decided to modify the proposed ordinary dividend to be submitted to shareholders at a General Meeting to be held on 5 May 2020, in order to reduce the amount of the dividend to from €1.30 to €1 per share, and withdraw the stock dividend option.
‘BOLDNESS, INDEPENDENCE AND CREATIVITY’ STILL INGRAINED
“The Group’s strategy of refocusing around Lagardère Publishing and Lagardère Travel Retail, two divisions that are highly complementary in terms of growth and profitability, produced positive results in 2019 with sharp increases in revenue, recurring EBIT and free cash flow within the Group’s target scope,” added the group.
“While rigorously managing the current situation and its impacts, the Group remains fully engaged on executing its strategic plan, in the interest of all stakeholders, as ever.”
Lagardère adds that it will draw on its ‘historical strengths of boldness, independence and creativity’ to adapt to a world that is constantly changing, ‘sometimes brutally’.