World Duty Free targets €2,400m in 2014

By Kevin Rozario |

World Duty Free expects revenues to reach between €2,375m and €2,425m ($3,191-3,248m) by the year-end based on strong first half sales and taking into account the full-year consolidation of its US Retail business (see below) and new operations in Helsinki Airport. While H1 sales were up, profits were in sharp decline, down -34.1%.


The UK business was solid in the first half even with the rise in sterling. Sales in Spanish airports also grew despite a poor performance at Madrid Airport.


Overall, the Milan-listed duty free and travel retailer, saw consolidated revenue in the six months to the end of June top €1bn (€1,046.9m/$1,402m) a very healthy rise of +13.4% (+13.8% at constant exchange rates).


Excluding the contribution of US Retail [the HMSHost business acquired on 6 September 2013 for $105m] sales were €981.8m, up +6.4% (+6.4% at constant rates). The US business had an impact on total revenue of €65m in the period.



Profitability took a knock (see chart below) with Ebitda dropping -3.2% (-3.4% at constant rates) to €106.3m ($142.4m) in the first half with net profit in a steep decline of -34.1% (-34.1% at constant rates) to €28.0m ($37.5m).


WDF blames the Ebitda downturn on higher rents paid in new contracts in its ‘Rest of Europe’ region (ie Spain and Germany) and for the dilutive contribution of the HMSHost business.


WDF’s cash Ebitda (which includes the recovery of annual concession fees paid in advance to Aena) rose by +6.2% (+6.1% at constant rates) to €120.8m and the group managed to reduce its net financial position by €49.3m to €977.4m. By the end of the year, the company expects the figure to fall further to €885-935m.




The airport channel generated almost all (98.1%) of WDF’s revenue. The rest came from commercial and operational services in certain cultural institutions in Panama and Spain, and logistic and wholesale commercial services for different categories of customers; this amounted to €20.3m.


The product category sales mix was impacted by the inclusion of the HMSHost business. Excluding this effect, above average growth was seen in the beauty, tobacco and food categories. Airport beauty sales reached €431.2m (+7.8% versus 2013) and they now account for 42.0% of the business. Wine & Spirits sales grew in line with the average.



In the UK revenues reached €461.0m, a +6.6% rise versus the first half of 2013. A weak performance at London Heathrow was offset by other main airports. At constant exchange rates the growth was +2.9%.


Rest of Europe sales grew faster at +10.5% to €302.7m. Of this, €19.4m came from WDF’s Wholesale and Palacios y Museos business, which was down -7.2% versus 2013.


Rest of Europe airport sales hit €283.3m, up +12.0%. The €30.3m sales increase includes €8.0m from the new Helsinki business in Finland which started trading in March.


Spain, Germany and Italy combined grew by +8.8% adding €22.2m to the coffers. Spanish airport sales alone reached €247.6m, up a strong +9.2%, more than double the traffic trend of +4.2% (source: AENA, January-June 2014).


In the Americas revenues amounted to €200.7m, up +56.8% on constant exchange rates with the acquisition of the US Retail business contributed €65.0m. Without the acquired business at constant exchange growth was +7.5%.


Asia and Middle East revenues amounted to €82.5m, up +9.7% at constant rates.


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