Lagardère Travel Retail has reported full-year 2016 revenue up 5% to €3,695m ($3,938m) on a like-for-like basis and plus-5.3% on a consolidated basis, due mainly to a minus €21m ($22m) foreign exchange hit from pound sterling depreciation, the Polish zloty and Canadian dollar, plus a €50m ($53m) positive scope impact.

 

LTR said this was due to a €395m ($421m) ‘negative impact of disposals and changes’ in the consolidation method relating mainly to the disposal of Press Distribution activities in Spain, Switzerland, Canada and Belgium.

 

It also included the €445m ($474m) ’positive impact from acquisitions’ – primarily the consolidation of Paradies’ in North America and fashion and confectionery stores at JFK airport (New York).

 

FOURTH QUARTER: +5’5%

Meanwhile, in the fourth quarter, LTR’s revenue totalled €911m ($971m), equivalent to a 5.5% like-for-like rise, although down 2.8% on a consolidated basis. This difference chiefly results from a €71m ($76m) ‘negative scope impact’ following disposals of Press Distribution activities.

 

On a like-for-like basis the travel retail business grew by 7.2% with a welcome return to growth in France, gaining 2.3% on the back of a favourable comparison effect, following obviously weak fourth-quarter results in 2015 caused directly by the Paris terrorist attacks.

 

EMEA REGION INCREASE OF +9.1%

Turning to the regions, the company reported that EMEA (excluding France) posted a vigorous 9.1% increase, with the UK in particular enjoying a strong 27.9% rise thanks to traffic increases stimulated by foreign exchange effects in the wake of the Brexit decision. Sales also benefited from the pull-through effect from the modernisation of Luton Airport’s duty free offering.

 

The company adds that Poland was also up 18.9%) and the Netherlands by 14.4% – boosted by network development and ‘the resounding success of new concepts’. Romania also posted robust 11.3% growth, helped by the development of the Foodservice business and the impact of a rise in tobacco prices.

 

By contrast, sales revenue also grew 14.3% in North America, boosted by network extensions, the impact of sales synergies arising from the consolidation of Paradies, and a favourable calendar impact (53rd week).

 

 

In addition, the Asia-Pacific region continued to trade positively, rising by 1.8% thanks to the ‘good performance of fashion stores in China and of Duty Free activities in New Zealand, which offset the loss of Travel Essentials concessions at Sydney airport (Terminal 1).’

 

GOOD CONTRIBUTION TO PARENT COMPANY

There was also further good news for the parent company as a whole in the fourth quarter thanks to ’strong growth in travel retail’ and a busy sporting calendar for Lagardère Sports and Entertainment.

 

The company stated: “Revenue for the Group came in at €1,984m ($2,114m), up 2.4% like-for-like (-2.9% on a consolidated basis).

 

“The difference between like-for-like and consolidated figures is due to a €77m ($82m) negative scope effect, mainly resulting from disposals of Press Distribution activities, and to a €28m ($30m) negative foreign exchange impact, mainly attributable to the depreciation of the pound sterling.”

 

During this period, revenues at Lagardère Publishing (-1.4%) and Lagardère Active (-2.4%) fell, while the Lagardère Sports and Entertainment division saw revenue grow 11.6%.

 

For its part, Lagardère Travel Retail was also positive with revenue up 7.2% thanks to ‘robust momentum in North America and a slight rally towards the end of the year with a favourable comparison effect in Europe’.

 

The group as whole also benefited from organic growth in travel retail and a ‘very strong performance’ from Lagardère Publishing in the full year reporting period.

 

FULL YEAR RESULTS

All divisions reported total revenues of €7,391m ($7,877m) representing an increase of 2.5% on a like-for-like basis and up 2.7% on a consolidated basis.

 

In its appraisal of key events amongst subsidiary companies since 30 September 2016 there were also plenty of mentions for the Lagardère Travel Retail division, as shown below:

 

These included the award of three duty free concessions in Saudi Arabia in partnership with the Saudi Airlines Catering Company (SACC) and Arabian Ground Handling Logistic Company.

 

These comprise a 2,040sq m concession in Riyad’s King Khaled International Airport (Terminals 1 and 2) on 19 October 2016, plus a 1,834sq m concession in Dammam’s King Fahd International Airport on 14 November 2016; and a 3,900sq m concession in Djeddah’s King Abdulaziz International Airport on 28 November 2016.

 

Lagardère Travel Retail also withdrew ‘definitively’ from the Distribution business, confirming its future status as a pure travel retail on 1 December 2016, LTR completed the disposal of its Belgian business to bpost SA/NV of Lagardère Services Distribution Benelux, including AMP’s Press Distribution business, plus the integrated retail network operating in particular the Press Shop and Relay brands in Belgium (218 stores).

 

In addition, 7 February 2017 saw LTR complete the sale of holding company LS Distribution SAS, including the operating activities in Hungary (Press Distribution and an integrated retail network of 374 stores). As part of this transaction, LTR also signed a franchise agreement allowing it to continue to develop the division’s travel retail concepts in Belgium and Hungary.