Lagardère Travel Retail first-half revenue falls to €831m; US air traffic recovery

By Andrew Pentol |

Lagardère Travel Retail revenue fell from €947 million in the first half of 2020 to €831 million in H1 2021.

Lagardère Travel Retail revenue dropped 12.3% (reported) and 9.2% (like-for-like) in the first half of 2021 to €831 million/US$980 million, according to a first-half 2021 results statement released yesterday (26 July 2021).

According to the company, the difference between reported and like-for-like revenue was attributable to a €29 million/US$34 million negative currency effect.

Following a 56.1% like-for-like revenue decrease in the first quarter of 2021, Lagardère Travel Retail posted growth of 253% in the second quarter. This was due to the favourable comparison basis following the strict lockdowns in the second quarter of 2020.

In France, Lagardère Travel Retail recorded a -22.0% decline in activity, due to travel restrictions that remained in place in H1 2021 and lacklustre international air traffic.

The EMEA region (excluding France) was down -28.5%, due to travel restrictions. As a result, countries with strong domestic networks, especially rail stations (Romania, Czech Republic, Bulgaria) were less affected by the decline in activity.


North America recorded revenue growth of 14.9% for the first half of the year. Performance was driven by the sustained recovery of domestic flights in the United States starting in the second quarter of 2021.

Total Lagardère Group revenue amounted to €2,076 million in the first half of 2021, compared to €2,088 million in H1 2020.

Asia Pacific revenue was up 24.8%. The Pacific region, however, experienced a sharp sales decline due to border closures, while China (Mainland China and Hong Kong) recorded revenue growth of 90%. This was driven by network expansion and the favourable comparison basis with the first quarter of 2020.

During the six-month period, Lagardère Travel Retail reported a negative €96 million in recurring EBIT, an improvement of €113 million on the first-half of 2020. This represents a flow-through ratio (impact of the decrease in revenue on recurring EBIT) of 12.2% compared to 2019 as reported, reflecting strong cost discipline over the period, according to the company.

Lagardère Travel Retail reported a negative €96 million in recurring EBIT in H1 2021, an improvement of €113 million on the first-half of 2020.

Costs were slashed by €999 million in the first half of 2021 compared to the first half of 2019, including a €320 million decrease in fixed costs. This was mainly achieved through renegotiating concession terms, adapting point-of-sale operations in line with air traffic levels, adjusting payroll costs and cutting other general overhead costs.

With trading at Lagardère Travel Retail closely mirroring trends in air passenger traffic in the different regions, predicting the future is anything but easy.

A Lagardère Group statement said: “Given the division’s diverse locations and segments, it is able to benefit from the gradual recovery in air traffic in the United States in particular, in a context that remains uncertain.

“In 2021, the division will press ahead with its earnings protection initiatives launched in 2020, enabling Lagardère Travel Retail to minimise flow through in 2021 to within a range of 15% to 20% (negative impact on recurring EBIT of the decrease in 2021 revenue versus 2019).

“Lagardère Travel Retail is also actively continuing efforts to control cash, especially as regards working capital and capital expenditure in 2021.”

Lagardère Travel Retail recorded a -22.0% decline in activity in France in H1 2021.

Meanwhile, total Lagardère Group revenue rose 5% to €2,076 million on a like-for-like basis in the first half of 2021.

Group recurring EBIT in the first half of the year totalled €3 million, up sharply by €221 million compared to a negative €218 million in first-half of 2020.

The Group reported a loss before finance costs and tax of €117 million in first half of 2021 (loss of €397 million in first-half 2020), including non-recurring/non-operating items for a net negative amount of €61 million.

The purpose of Lagardère Travel Retail’s LEAP Forward transformation plan launched last year was to help ensure the company is ‘fit to succeed’ in the post coronavirus world.

Its liquidity position remains solid, with €1,970 million in available liquidity (available cash and short-term investments reported on the balance sheet totalling €868 million and an undrawn amount on the revolving credit facility of €1,102 million).

Lagardère Group said: “The Group considers that it has sufficient liquidity to cover its financing requirements over the next 12 months, both as regards funding operations and reimbursing the €522 million in debt falling due (including €372 million in commercial paper as of 30 June 2021).”

Lagardère Travel Retail’s China (Mainland China and Hong Kong) operations recorded revenue growth of 90% in the first half of 2021.

The Group’s liquidity prediction is based on an IATA forecast (26 May 2021) that passenger traffic this year will reach 52% of what it was in 2019.

IATA is confident things will further improve in 2022 with passenger traffic expected to reach 88% of 2019 levels.


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