Lagardère Travel Retail’s Future is Local concept at Prague Václav Havel Airport.

Lagardère Travel Retail has reported a ‘historic year’ for business performance in 2023, with year-on-year revenue up 23.4% like for like (27.8% as reported) at €5,018 million.

The Full-Year 2023 results highlight the sharp rebound in traffic in EMEA as a key driver that has  helped the division to achieve ‘record-high’ recurring EBIT of €245 million – a €109m uplift versus 2022.

Furthermore, the results mark a record profitability of 4.9%, which is credited to ‘improved activity across all geographies’, among other factors.

Dynamic mergers and acquisitions (M&A) activity was also cited as a key contributor, with Lagardère TR’s acquisition of Marché International, Costa Coffee Polska (Poland) and Costa Nation (Latvia) in February 2023.

This is in addition to the acquisition of North American foodservice operator Tastes on the Fly in November 2023.

Duty free and fashion came out on top, however, with the year’s revenue breakdown by activity split as follows: duty free & fashion (38%), travel essentials (35%) and foodservice (27%).

Source: Lagardère Full-Year 2023 Results, released 27 February 2024.

“I am thrilled to share that 2023 has been a great year for Lagardère Travel Retail, with a remarkable 28% sales increase vs 2022, and all KPIs at all-time record levels. I’d like to warmly thank our fantastic teams for this exceptional achievement,” commented Lagardère TR Chairman & CEO of Dag Rasmussen, in a LinkedIn post.

“Our magic sauce? Being all aligned on our strategy, a strong focus on innovation for enhanced passenger experiences, a reinforced commitment to PEPS – our CSR program – continued investments in our people and communities and a strong focus on operational excellence and efficiency.”

Rasmussen also revealed a positive outlook for 2024, referencing his confidence in the success of the travel retail industry in general, and the company’s continued commitment to “sustainable growth, innovation, and delivering unparalleled experiences for travellers worldwide”.

Dag Rasmussen, Chairman and Chief Executive Officer, Lagardère Travel Retail.

Along with Lagardère Publishing, the travel retail division’s achievements were flagged as driving robust growth for the overall Group, which saw record high revenue growth totalling €8,081 million – up 14% yoy on a like-for-like basis.

The group also posted higher recurring EBIT, totalling €520 million – a sharp €82 million improvement on the €438 million achieved in 2022.

Strong traffic rebound in EMEA drives record revenue in 2023

Zooming in further on Lagardère Travel Retail’s slice of the results shows that all the division’s key business indicators exceeded 2019 levels across the majority of geographical regions.

On a like-for-like basis, in France, trading for the division continued to recover, with revenue up 15.9% on the back of robust sales at regional airports.

The EMEA region (excluding France) reported a sharp 26.6% growth, driven by the increase in international tourist traffic, as well as by impressive performances in Italy and Poland and network expansion.

The Americas region continued to grow, with revenue advancing 16.3% against an already high comparison basis, benefiting from a favourable local economic environment (particularly in the United States), and the strong rebound in international traffic in Canada.

Asia-Pacific revenue jumped 52.1% from a low 2022 comparison basis in the region following the delayed reopening of borders in China.

Source: Lagardère Full-Year 2023 Results, released 27 February 2024.

“Lagardère Travel Retail took full advantage of the growth in domestic, regional and international air traffic across its various locations, particularly in the EMEA region,” commented Arnaud Lagardère, Chairman and Chief Executive Officer of Lagardère SA.

“All of the division’s key performance indicators improved, with revenue exceeding €5 billion and recurring EBIT up by €109 million year on year.”

Source: Lagardère Full-Year 2023 Results, released 27 February 2024.

The difference between reported and like-for-like data was attributable to a €42 million negative currency effect, which Lagardère says is mainly resulting from the depreciation of the US dollar (€28 million negative impact) and Chinese yuan (€15 million negative impact).

There was also a €183 million positive scope effect relating to the acquisition of Costa Coffee Poland (€36 million), Marché International (€149 million) and Tastes on the Fly (€27 million).

Source: Lagardère Full-Year 2023 Results, released 27 February 2024.

This performance was attributable to revenue growth combined with disciplined margin control amid high inflation, government aid in the US and the efficiency gains brought about by the ramp-up of the LEaP operational efficiency plan.

Commenting on the FY2023 results, Arnaud Lagardère, Chairman and Chief Executive Officer of Lagardère SA said: “In 2023, we achieved performance levels not seen for 15 years, thanks to the talent and commitment of the Lagardère group’s teams.

“Our two main locomotives are running at full speed and our growth validates the development strategy that we have patiently and meticulously built over these past few years.”

Looking ahead to the rest of 2024, the Group forecasts that with the robust momentum in global air traffic, despite ongoing geopolitical tensions and uncertainties regarding the revival of international Chinese tourism, Lagardère Travel Retail has potential for futher revenue and profitability growth, thanks ‘in particular’ to its optimisation initiatives.

*Alternative performance measure.

Note: On 27 February 2024, the Board of Directors met to approve the 2023 parent company and consolidated financial statements. The Group’s consolidated financial statements have been audited. The audit report will be signed off once the specific verifications have been completed.

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