Strong organic growth anchors Dufry FY17 turnover

By Luke Barras-hill |


Dufry Group’s ‘New Generation’ store at Mexico Cancun International Airport.

The Dufry Group today announced revenue growth of +7% to CHF8,377.4m in a strong full-year 2017 performance, as synergies from its World Duty Free acquisition bore significant results.


Organic activity increased by 7.4% as EBITDA broke the CHF1bn mark (CHF1,007.1m) in a year denoted by new contract gains and extensions and an increase in its gross retail concession space to 30,000sq m.


In a statement, Dufry confirms North and Latin America as accounting for the largest share of that space, followed by Asia, Middle East, Australia, Southern Europe and Africa, with deals inked in 2018 and 2019 to increase that footprint by a further 15,500sq m.


Synergies from the World Duty Free acquisition totalled CHF125m, ‘considerably exceeding the original estimates of CHF105m’, travel retail’s largest operator said in the statement.


EBITA margin increased to 12%, versus 11.9% in 2016, while net debt reduced to CHF3,686.9m as of 31 December.


Gross profit shot up by 8.6% to reach CHF4,978.6m, free cash flow totalled CHF467m and would have hit CHF571m if not for the ‘extraordinary cash outs that Dufry had in the beginning of the year’.


Julian Diaz 2016 pic

Julián Díaz, CEO of Dufry Group singled out organic growth momentum, increased cash generation and reduced net debt.


Julián Díaz, CEO of Dufry Group, praised the results and the year’s positive market momentum as carrying over into early 2018 across all divisions, with similar organic growth levels providing a solid foundation to begin the new reporting year.


He also attributed progress in 2017 to three key areas: increased cash generation, reduced debt and accelerating organic growth levels, as mentioned.


“We have also achieved our goal to fully reflect the CHF125m of WDF synergies, 20% higher than originally announced,” he stated.


“Early in 2018, we had two important changes in the Group. First, in January we announced the new simplified Group organisation with a smaller Global Executive Committee, which will further improve the speed of decision making and thus allowing us to be closer to the market.


“Secondly, on February 1st, we successfully listed a 42.6% stake our North American division as Hudson Ltd. at the New York Stock Exchange. Besides further expanding our duty paid convenience business, the listing aims at evolving the business by expanding into additional opportunity streams such as food and beverage operations and master concessions.”




On a regional basis, organic sales from Dufry’s UK, Central and Eastern Europe segment increased by 6.3% to CHF2,147.4m, with the UK seizing on the positive impact linked to the British Pound’s devaluation following the country’s Brexit decision.


Turnover in Southern Europe and Africa reached CHF1,857.8m, with operations in Turkey driven strongly by the return of Russian travellers.


Meanwhile, France, Greece, Malta and Spain also registered positive metrics, due to new openings, expansions and refurbishments.

Dufry financials

Dufry smashed the CHF1bn EBITDA mark for the first time in 2017. Click to enlarge. Source: Dufry Annual Report 2017.


In Asia, revenue rose by 5% to reach CHF809.1m despite the challenging situation in South Korea impacting reducing Chinese pax volumes.


This was most notably reflected in comebacks from Hong Kong and Macau, which grew double-digit in the second semester, while Cambodi and Bali turned in good showings.


Meanwhile, the refurbishment of Melbourne Airport’s commercial area and new generation store implementation kickstarted its recovery in the second semester.


Operations in the Middle East, Sharjah, Kuwait and Jordan also performed positively.


In Dufry’s dominant Latin America stomping ground, turnover was CHF1,694m as organic growth hit +10.8%, largely due to the revival of regional giant Brazil, Uruguay, Chile and Peru, alongside its Caribbean operations and the boost from the Group’s new cruise services division based out of Miami.


North American sales jumped +7% to CHF1,771.5m ‘supported by the resilient duty paid business on one hand and a good performance of the duty free operations on the other’.



Dufry upgraded the main departure shops at Vinci-owned Lisbon International Airport last year, where it operates over 3,500sq m of space.



The launch of the Group’s new Business Operating Model (BOM) gathered pace in 2017, with 10 of 19 countries already passing internal certification, confirms Díaz.

Aside the additional 30,000sq m of additional gross retail area, Dufry continues to push its shop renovation plans across 32,000sq m.

This is being supported by an expanded digital footprint across its new generation units in Madrid, Melbourne, Cancun, Zurich and the rollout of Dufry Red.


“For 2018, our priorities are to complete the BOM process and generate the respective efficiencies, further drive the implementation of our digital strategy, and to accelerate the strategic initiatives to expand outside the airport channels,” adds Díaz.


“All these activities will contribute to continue driving organic growth and spend per passenger, which remains a cornerstone in our operational focus. The same applies to cash generation and further deleveraging of our balance sheet. Dufry’s Board of Directors has put a high priority on returning cash to shareholders and as such, intends to submit a proposal to the upcoming general meeting.”



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