Reopening Trend and Business Acceleration Confirmed

During the third quarter and along October and November we have seen the fundamental recovery trend continuing, even if in some countries fire-pockets of the pandemic persist. Our third quarter results have shown that we are well managing the ongoing reopening phase while successfully keeping our costs under control. Combined with the sales acceleration this resulted in an Equity Free Cash Flow of CHF 253.7 million in Q3, which is very close to the CHF 266.2 million of the record year 2019, and where our sales for the third quarter were almost twice as high – this is a remarkable achievement.

Reopening of shops ongoing with more and more colleagues returning to work

In line with the global easing of travel restrictions, we see the trend for the ongoing recovery of travel patterns continuing, thus allowing us to reopen our shops accordingly. By the end of November, we had 81% of shops open at group level, representing a sales capacity of 87% with respect to 2019 levels. Looking at the single clusters, we can see the different levels of this positive evolution with Southern Europe already reaching 95% of shops open, followed by North America (87%), South America (83%), Central Europe and Middle East (77%) and even in Asia-Pacific we are at 56%, despite the still higher travel restrictions levels applied by these countries. Further stores were already opened or scheduled for opening in December so that by the end of the year we expect to have around 82% of shops open at Group level.

In parallel with the shop openings and the increasing number of customers we can serve, since the beginning of the year we have also been welcoming back several thousands of colleagues to resume their work at the shops floor, in our warehouses and within the office-based functions at Group and country levels. I am very pleased that after the difficult months behind us, we are moving in the right direction, to physically meet and increasingly normalize our working environment. These are for all of us important steps, which will further simplify daily collaboration, drive confidence and allow us the best serve our customers.

Implementing ESG initiatives in many areas

As you know, we have strongly committed to increase our ESG (environment, social and governance) engagement, which more and more shows that it is an important and inherent element of the company strategy and of how we do business. Many initiatives planned at the beginning of the year are now materializing with tangible realities, which we are successfully implementing at internal and external levels.

To mention just the most important ones, we have above all defined a proposal for the goals and actions on how we want to reduce our CO₂ emissions to make our contribution to protect the environment in line with the so-called Paris Agreement to limit global warming to 1.5 degrees Celsius. To further evolve Dufry as a great place to work we increased our Diversity & Inclusion engagement and recently launched the D&I survey to learn more about all of you and to identify how we can progress and make sure that all our employees are treated with respect and have the same opportunities to evolve without any type of discrimination. And equally important, we have both continued to expand our plastic bags substitution initiative as well as globally implemented our sustainable product identification initiative across 33 countries and 117 shops to help our customers to shop considerately and highlight for them products classified as particularly sustainable under different aspects. We will keep you informed on all these activities in more detail in the coming Dufry World editions.

Wishing you all a happy holiday season

While the overall situation remains uncertain, I am however fully convinced about one thing – we will all of us have a better and more enjoyable turn-of-the-year, than the last one. I therefore wish all of you and your families all the best for the coming year. Let us all enjoy some relaxed moments during the forthcoming seasonal holidays, clearing our minds and gaining a positive spirit to tackle the New Year with renewed confidence.

Kind regards,