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Dufry reports turnover growth in first quarter

Dufry Group has reported turnover growth of 1.7% in the first quarter of 2013 to SFr736.4m ($782.8m). EBITDA was SFr85.3m ($90.7m) for the period and net cash flow was SFr94.5m ($100.3m) for the three months to the end of March. Gross profit in the period was SFr432.7m ($459.)

The retailer recorded “good turnover growth” in the Middle East, Asia/Pacific, the UK and Canada. Performance in Brazil, Uruguay and Argentina remained similar to the previous quarter.

The Greek duty-free operation acquired by Dufry, which completed last month, is undergoing full consolidation and will be an important contributor to growth in the remainder of the year, according to the retailer. It also said the increase of 2,600sq m in retail space at Guarulhos International Airport in São Paulo is expected to be completed in the second semester. The growth in retail space of 60% will lessen capacity constraints and enable the retailer to generate higher revenues.

Region EMEA & Asia turnover grew by 6.9% in quarter to SFr182.5m ($193.6m) compared with SFr170.8m ($181.2m) in the same quarter the previous year. Turnover in region America I was SFr190.5m ($202m) in the period compared with SFr197m ($208.8m) in the same period in 2012. Region US & Canada turnover rose 7.4% to SFr189.8m and turnover in region America II fell by 8.2% to SFr158.6m ($168m) in the quarter, affected by the economic slowdown, a softening of the Brazilian real against the dollar and capacity constraints in some airports.

Dufry Group CEO Julian Diaz said: “The performance of the first quarter 2013 follows the trends seen in the second half of 2012. The results in most of the locations are very positive. We continue to be impacted mainly in Brazil, Uruguay, Argentina and to a lesser extent in the British Caribbean operation due to external factors, but we are confident that this adverse environment will gradually start to normalise.

“As we successfully concluded the acquisition of the travel retail division of Folli Follie Group last April, the focus will be to fully integrate the business into Dufry´s structure. The consolidation from April onwards will be an important contributor to profitability and top-line growth and will compensate for the effects seen in the first quarter 2013. Other priorities in the year are to increase our commercial area in Guarulhos airport in Brazil, and we will also work to deleverage our company using our strong cash generation.

“The internal reorganisation announced last year has been in place and is already delivering results,” he continued. “Also, the new logistic structure has started and our objective is to maximise synergies and know-how of our Company through the consolidation and development of Dufry’s commercial model, while strengthening our relationship with suppliers. The model aims to centralise our logistic operations in two main platforms: one in the Americas, for that region and another in Europe for Europe, Africa and Asia. Our goal is to complete this project by mid 2014 and it will be an important driver to continue growing the Company’s productivity and gross profit margin in the near future.

“Regarding our operations, we believe that the second semester will show a better performance. As for the operation in Uruguay the effect of the Pluna bankruptcy may fade, as in our previous experience in other locations indicates. In Brazil, the new commercial space will open and with that bring an important step forward in terms of expand our operations and presence in this very important market. As far as other operations is concerned, such as US & Canada and EMEA & Asia, we are confident that the same performance presented so far will be replicated going forward as many opportunities in terms of expansion will come as well,” Diaz concluded.