Important Steps of Progress during the Summer Months

During these recent summer months, we have together achieved important milestones and made progress within many different aspects of our business. We have seen the business performance of the company and the overall recovery of the industry accelerating, allowing us to report excellent half-year results 2022; we have finalized and publically disclosed our new company strategy “Destination 2027” and we are progressing well with the process for the planned combination with Autogrill. These achievements were made possible by the extraordinary dedication and intensive work from all you and for which I thank you very much.

Solid performance in the first half-year 2022

Our turnover in the first half-year 2022 reached CHF 2,922.5 million coming from CHF 1,187.2 million in the previous year. All regions contributed to this improvement and some of them, such as North and Central America, the Caribbean Islands and the Mediterranean countries even performed in line or above 2019 levels. We also saw upward trends in South America and even in Asia as some countries started to re-open. This acceleration of the business further continued in July and August.

Moreover, the two new KPI’s introduced this year to better assess the operational performance of the business, have both shown significant improvements as compared to the previous year: “CORE EBITDA” (Earnings before Interest, Taxes, Depreciation and Amortisation) reached CHF 227.0 million, while “Cash Flow before Financing” amounted to CHF 256.7 million.

Most importantly, we have continued strengthening the resilience of our business by winning several attractive new concessions and extending important contracts. From amongst the many such successes globally, I would particularly like to highlight the extension of our Heathrow concession contract for three years until 2029, which is the largest single location we operate and serves 80.9 million passengers annually (2019 level).

“Destination 2027” – Let’s execute on it together

On September 5^th, together with the members of the Group Executive Committee, I presented to you in a dedicated Townhall Meeting our new company strategy “Destination 2027”, which we had jointly developed in a collaborative approach with you, airports, suppliers, business partners and industry experts.

The next day, we went on to introduce Destination 2027 to the financial market and the public in general at our Capital Markets Day held in London. The goal of our new strategy is to build on our legacy, to strengthen our core business and to reinvent ourselves by identifying new opportunities in adjacent channels, such as travel food & beverage, ultimately providing customers with a unique and reinvented travel experience.

While we have received positive feedback for the new strategy from across our stakeholders, we have to be aware that we are only at the beginning of this journey. The success of Destination 2027 depends on how we implement and put into practice all the initiatives we have outlined and how we adapt our offers and services to make the new travel experience come alive for our customers. In the coming weeks and months, we will therefore continue further refining the specific work streams and initiatives and accelerate their execution. The key success factor in this process is our strong collaboration and working closely together to execute each step and initiative with high focus. Jointly implementing changes and making adaptations where needed, will allow us to reach the necessary milestones, which contribute as a whole to the successful coming to live of our new strategy.

In this edition of Dufry World we have included a summary of the four key pillars of the strategy, while the detailed presentation of Destination 2027 is available here.

Prospective combination with Autogrill progressing as planned

With respect to the business combination with Autogrill we are currently working with the relevant antitrust authorities in several regions around the world, to receive the needed approvals and fulfill the conditions to complete the first step of the transaction. In the Extraordinary General Meeting held on August 31^st, our shareholders gave us their approval to issue the necessary new shares, which we will exchange for the 50.3 % participation in Autogrill held by the Benetton family, through their holding company Edizione. We still expect to complete this first step by the end of Q1 2023.

Immediately after completion, we plan to launch the Mandatory Tender Offer to buy the remaining outstanding 49.7 % of Autogrill shares and we expect to complete this second step and finalize the full transaction during Q2 2023. In parallel, we will then also be able to start the operational combination of the two businesses to create the new joint entity.

The management team and I will continue to keep you fully informed about any important steps and developments on the evolution of the planned business combination.

Katrin Volery joined as new Chief People Officer

I would like to officially welcome Katrin Volery, Chief People Officer, who joined the Dufry family on September 21^st, and is based at the Basel headquarters office. Please join me in wishing Katrin lots of success in her new role and please provide her with any needed support.

In this edition of Dufry World, you will see – amongst other stories – some first articles showing how we already renovate customer experience with attractive new offers. In this context, we present the launch of the new Mind. Body. Soul. shop-in-shop concept first piloted at our Amman operation in Jordan. Moreover, Philippe Moryl introduces to us the Private Label initiative to drive sales within the souvenirs & food category. Launched initially in Mexico and Canada this initiative aims to increase conversion by addressing, in particular, a younger demographic customer group and has shown very encouraging results.

Thank you again for your ongoing strong engagement and motivation for our company. Let’s continue to work closely together as a strong team and reach our goals by having fun with what we do!

Sincerely,
Xavier Rossinyol