A Successful Year with Many Important Accomplishments

The positive momentum we have seen accelerating during the whole of 2022 continued into the last months of the year. Despite some persisting geopolitical and economic challenges, the current trading environment remains positive and our customers maintain their propensity to travel. This has allowed us to make good progress with the many initiatives we have ongoing, which ultimately all focus on taking the company to the next evolution level.

Strong third quarter results 2022

In the first nine months 2022, our turnover almost doubled and reached CHF 5,037.7 million coming from CHF 2,922.2 million in the previous year. Whilst all our operations contributed to the positive performance, the holiday destinations in the Mediterranean region, Southern Europe, Middle East, Central America and the Caribbean led in terms of driving our performance. The USA remained strong and South American countries having traded upwards. Even in the APAC region, we saw an increase in activity, specifically in Australia and parts of South-East Asia. We also achieved strong improvements at CORE EBITDA level reaching CHF 463.7 million and a margin of 9.2% as well as for the Equity Free Cash Flow (EFCF), which came in at CHF 337.4 million.

In the third quarter, we won two important contracts, which will contribute to the resilience of our business going forward. One is the duty-paid contract at Chongqing International Airport in Western China, where we won the tender for the 5-year contract to operate five duty-paid boutique stores in the airport’s Terminal 3A. The second is the 15-year joint-venture contract to operate and manage duty-free outlets in the Kempegowda International Airport Bengaluru (KIAB) new Terminal 2, the third-biggest airport in India handling over 33 million passengers each year.

“Destination 2027” – Implementation started

I am very pleased to confirm that following the presentation of our new strategy “Destination 2027” in September, we have immediately started working together on its implementation. On the one hand, we are currently defining the detailed action plans for each of the four pillars – Travel Retail Revolution, Geographic Diversification, Operational Improvement Culture and ESG – to develop dedicated specific initiatives. On the other hand, we also have good and positive examples of initiatives already implemented successfully.

Besides the launch of the MIND.BODY.SOUL shop-in-shop concept in Jordan, Brazil and Bali as well as the Private Label initiative piloted in Canada and Mexico, we have also implemented Emotion+. This initiative allows our brand partners to access our in store and online channels to better engage with our customers and provide them with a full immersive experience that presents and showcases their products to best effect. A full description of Emotion+, which we have already sold in 200 packages to the largest brands in 2022, is available in this Dufry World issue. 

Important steps for prospective combination with Autogrill

With respect to the planned business combination with Autogrill, we have made several important steps in the third quarter. First, we received the approval of our shareholders at the end of August to issue the necessary new shares, which we will exchange for the 50.3 % participation in Autogrill held by the Benetton family. Second, we have also received first regulatory and antitrust approvals in important jurisdictions such as the United States of America and the United Kingdom. We therefore still expect to close this first step of the transaction by the end Q1 2023 as planned.

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

Thank you for participating in the Diversity & Inclusion Survey

I would like to thank the 15,999 colleagues who have participated in this year’s Diversity & Inclusion Survey and have taken their time to share their views and suggestions with us. Overall, we have reached a response rate of 63% with feedback from 63 countries. These are important contributions, which we will now carefully analyze, to help us develop the right initiatives to improve where needed and foster our strengths. Sarah Branquinho Chief Diversity & Inclusion Officer provides you with more information on the D&I initiatives and achievements implemented in 2022 in her article in Dufry World.

Finally, as well as highlighting contracts won and new experiences we offer to our customers worldwide, this edition of Dufry World also features an interesting interview with Katrin Volery, our Chief People Officer, who has been part of the Dufry family since September and who will join the Global Executive Committee (GEC) as of January 1, 2023.

I wish you and your families an enjoyable and happy holiday season and I thank you again for your ongoing motivation and support for our company. We have a strong team and I am looking forward to continuing to work closely with all of you in 2023.

Sincerely,
Xavier Rossinyol