Rossinyol aiming for ‘new cycle of success’ at Dufry

By Luke Barras-hill |

Xavier Rossinyol, who takes the reins at Dufry Group in June, has identified some early priorities for the global travel retailer.

Dufry Group’s newly appointed Chief Executive Officer Xavier Rossinyol hopes to ‘define a new cycle of success’ for the global travel retailer in the coming years.

In an early hint of his growth plans since being announced last month as the successor to Julián Díaz, the Basel-headquartered company’s much-admired chief, Rossinyol has identified three priority axes: value creation for shareholders, customers and the communities served by Dufry.

He shared his thoughts during a results presentation and analysts call today (8 March) following the release of Dufry’s FY21 results earlier in the day, as the company charts its next phase of development amid a fragile macroeconomic and geopolitical environment with the recent Ukraine invasion being the flashpoint.

“Everything we are going to do going forward, we are going to do together, as a team,” declared Rossinyol during the results presentation, held in a physical format for the first time in several years in Zurich, Switzerland.

“We are hopefully going to define a new cycle of success. We will work for the long term. Of course, any modern company needs to focus on the short term to have a long term, but our focus, at least, will be on a cycle of five years. We will build on the strengths the company has, but we will not be shy to change what needs to be changed to address the challenges we have as a company and in the industry.”

‘BUILDING ON A LEGACY’

Elaborating on comments he shared at the time his appointment was made public in February, the former gategroup CEO shared his pleasure at returning to Dufry – where he served in various roles from 2004-2015 – while thanking the Board of Directors and Díaz.

Addressing Díaz directly, Rossinyol said: “Thank you Julián for the transition we’ve already started. I know it is going to be very smooth. I can assure you I feel a strong responsibility to follow on your amazing legacy. We will work on the new phase always based on that.

Click to enlarge. Source: Dufry.

 

“I’m looking forward to working with the entire Dufry team, not only the Board and senior management but every single team member. I truly believe the people in Dufry are the true strength of the company. I’m looking forward to engaging and re-engaging with the investors community and analyst community.”

During the call led by Díaz and CFO Yves Gerster, the former updated that Dufry has renegotiated minimum annual guarantees (MAG) with its landlords accumulated over the past two years (2020/2021) worth CHF1.6 billion/US$1.7 billion.

In 2021, Dufry benefitted from MAG relief of CHF 1,077.8 million related to the period affected by the pandemic. Of that total, CHF 847.1m was accounted as ‘MAG relief’ under ‘lease expenses’ in the 2021 P&L.

Thereof, CHF 27.3m had already been considered in MAG waivers communicated to the market in 2020.

Click to enlarge. Source: Dufry.

Dufry says the remaining part refers to lease modifications, leading to lower Depreciation of Right of Use Assets of CHF 91.3m, lower lease interest of CHF 47.9m and lower variable concessions of CHF 33.7m in 2021. An amount of CHF 85.1m is designed to benefit future years.

Dufry’s full-year results were characterised by the rebound of travel across many markets, evident by the healthy organic growth performance and accompanied by a strong appetite for shopping, which Dufry views as an integral part of the travel experience.

UKRAINE: TOO EARLY TO JUDGE BUSINESS IMPACT

Turnover grew by 52.9% year-on-year on a reported basis (+39% like-for-like) to CHF 3,915.4m, with organic growth up 53.2% and adjusted operating profit at CHF 374.9m.

Díaz reminded that the Group is on track to reach 93% of its 2019 sales capacity this month.

Around 1,900 of Dufry’s shops were open worldwide at the end of December, representing around 88% of its sales capacity compared with 2019.

As reported, Dufry ended 2021 at around 88% of its sales capacity with regions such as the Middle East outperforming that result.

Commenting on the situation in Ukraine, where Dufry operates two duty free and duty paid shops in Odessa and counts a total of 35 employees, Díaz explained: “For now, it is too early to assess the full impact of the current turmoil in Ukraine [on the business], but the impact has been very limited so far and during the last two weeks, the situation has not been significantly different than before.

“We have provided them with resources before the attack. It is very complex today to support them from the financial point of view. If there is interest in leaving – that is not everybody – we will try to facilitate them leaving.”

Elsewhere, the outgoing CEO responded to an analyst’s question regarding Dufry’s intentions to defend its Spain concessions as operator AENA considers the launch of a duty free tender later this year.

Diaz added: “We are interested in participating depending on the conditions of the tender and depending on how it will be implemented. In principle, we are the incumbent and have a lot of experience and a significant competitive advantage for participating and preparing one of the best offers.”

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