Autogrill results endorse strategy

Nicole Mezzasalma

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The acquisition of World Duty Free and the remaining 49.95% stake in Aldeasa raises the company’s revenue

Italian retail group Autogrill has announced its half-year results and highlighted the strategic importance of acquisitions in the airport retail and duty-free sector to becoming the leading travel-retail operator in the world. Consolidated revenue was up by 25.1% to €2.54bn ($3.74bn), led by airport revenue, which increased by 32% to €1.33bn ($1.96bn) compared with the previous corresponding period. Inflight activities contributed €208.2m ($306.3m) in the first half of 2008 and revenue from the retail and duty-free sector jumped by 52.5% to €971.7m ($1.43bn) following the acquisitions.

The company said in a statement: “An important contribution came from the consolidation of Alpha Group for the period [consolidated only for the month of June in the first half of 2007] and the acquisition of the remaining stake in Aldeasa and of World Duty Free [consolidated from April and May 2008 respectively] for a total of €513.7m [$755.9m]”.

Revenue from the US division of HMSHost grew by 9.6% to $1.26bn in the first six months of 2008 compared with the previous year owing to “the introduction of new commercial concepts and the focus on service quality which produced results that broadly offset the negative traffic trend”, according to Autogrill. A number of contract wins and renewals at US airports, including new retail concessions at Indianapolis International, Atlanta Hartsfield-Jackson and San José International, are expected to bring cumulative sales of more than $2bn over the lifetime of the contracts.

Spanish retailer Aldeasa recorded a 4.5% rise in revenue to €390.9m ($574.3m), with international activities in Chile, Mexico, the US and Kuwait contributing €110.6m ($162.5m). Spanish revenue fell by 1.6% to €273.4m ($401.8m) due to the “tough comparable macroeconomic context and currency effects”.

Alpha Group recorded a marginal increase in revenue in the first half of the year compared with the same period in 2007 to €284.3m ($417.8m), with the expansion of international activities both in flight and on the ground compensating for the reduction of activities in the UK to focus on “more profitable initiatives”.

Revenue from UK retailer World Duty Free was up by 7.8% to £205.9m ($376.9m) in the first six months of 2008 due to “constant improvement of the commercial offer, the aim of which is to grow the number of contacts and average spend”. Revenue from London Heathrow airport operations rose by 9.7% to £113m ($206.8m) thanks to the positive effects of the opening of terminal five, with the company’s stores at other UK airports also recording increases in revenue.

In Italy, Autogrill’s airport division benefited from the inclusion of the retail activities of Alpha—now under Italian management following the integration process initiated by the company—and recorded a 21.2% rise in revenue to £37.3m ($54.8m) in the first half of the year. Autogrill’s airport division in the rest of Europe registered revenue growth of 19.3% to €65.9m ($96.8m) due to the “positive trend of existing activities at airports such as Zürich and Brussels, and the contribution of other sites opened at Copenhagen [Kastrup] and Shannon”.

Autogrill added that the company is focusing on operational efficiency because of the “extremely difficult [macroeconomic] context”. To this end, it has begun to integrate its acquisitions in the travel-retail and duty-free sector and to reorganise central and local corporate structures in order to generate synergies of €45m ($66m) a year from 2010.