Avolta Ag · SIX:AVOL
Avolta — Dufry — FY2016 Earnings Presentation
36 slides from Avolta's earnings presentation, Mar 15, 2017
Slide 1: FY 2016 Results
FY 2016 Results Customer Focused, Digitally Driven March 15, 2017
Slide 2: Legal Disclaimer
Legal Disclaimer Information in this presentation may involve guidance, expectations, beliefs, plans, intentions or strategies regarding the future. These forward-looking statements involve risks and uncertainties. All forward-looking statements included in this release are based on information avai
Slide 3: Agenda
AGENDA 1. FY 2016 Results • Highlights FY 2016 • Positive organic growth • New contracts and significant extensions • Update on World Duty Free integration 2. Financials FY 2016 3. Conclusion 3_ 2016 Full Year Results Presentation
Slide 4: Full Year Results 2016
1 Full Year Results 2016 4_ 2016 Full Year Results Presentation
Slide 5: 2016 Goals set and Achievements
2016 Goals set: • Acceleration of organic growth • Improve EBITDA • Increase free cash flow generation and deleveraging • Integration of WDF and definition of business model • Extension of key contracts (Melbourne, Zurich, São Paulo, Cancun, Cozumel, Marrakech and many others) Achievements: • Dufry
Slide 6: Highlights FY 2016
Highlights FY 2016 • Turnover of CHF 7,829.1 million in 2016; growth of 27.5% Positive organic • Organic growth of +5.6% in Q4 including WDF growth of +1.0% in 2016 incl. • Organic growth of +1.0% in FY 2016 including WDF WDF • Gross profit margin improves to 58.6% from 58.2% in 2015 • EBITDA grows
Slide 7: Turnover analysis
Turnover analysis • Challenging first semester in 2016: Turnover evolution Turnover grows 9,000 • Currency devaluation in key emerging by 27.5% 8,000 +28% 7,829.1 markets (e.g. Russia, Brazil, Argentina) 7,000 6,139.3 • Ban of Russian flights to Turkey, resulting in (CHF million) 6,000 Distinct sale
Slide 8: Organic growth evolution by division
Organic growth evolution by division All divisions with positive organic growth in Q4 Pro-forma organic growth back to positive Southern Europe and Africa Central and Eastern Europe Asia, Middle East and Australia Latin America North America for FY 2016 11% 8.7% 7.2% 6% 3.7% 3.8% 1.6% 1.5% 0.8% Impr
Slide 9: Close to 20% of portfolio extended in 2016
Close to 20% of portfolio extended in 2016 Close to 80,000 m2 of contract extensions signed in 2016 Close to 80,000 m2 of • 84 of contracts extended in 2016 representing: contracts renewed • 340 shops • 80,000 m2 of retail space • Approx. CHF 1.2 billion of sales • Concessions renewed at similar ter
Slide 10: Dufry has opened 41,800 m2 of gross retail space in 2016
Dufry has opened 41,800 m2 of gross retail space in 2016 Openings 2016 41,800 m2 Southern of gross retail North America 27% Europe and Africa • Dufry opened a total of over 220 new space opened 12% shops in 2016 UK, Central in 2016 and Eastern Europe 6% • Openings represent close to 10% of total ret
Slide 11: 22,000 m2 additional retail space already signed for 17/18
22,000 m2 additional retail space already signed for 17/18 Over 22,000 m2 signed space • Contract renewals and pursue of new 22,000 m2 concession is an important part of our Southern Europe and Africa 5,000 additional retail activities space already UK, Central and Eastern 100 Europe signed for 17/1
Slide 12: International PAX Forecast
Organic growth: Positive forecasts for ongoing passenger growth Healthy International PAX Forecast international 2017 2018 2019 PAX growth Europe 7.0% 5.4% 5.2% Africa 0.8% 2.2% 2.1% Asia/Pacific 8.5% 7.7% 7.1% Middle East 7.1% 7.3% 6.8% LatAm/Caribbean 7.5% 7.0% 6.5% North America 6.2% 5.5% 5.2% Wo
Slide 13: Dufry's Segmentation (1/2)
Dufry’s Segmentation (1/2) Balanced Dufry by Division 2015 Dufry by Division 2016 UK, Central concession UK, Central and Eastern and Eastern Southern Southern portfolio across Europe and Europe Europe and Europe 27% 23% Africa divisions Africa 21% 22% Asia, Middle East and Global Australia Global As
Slide 14: Dufry's Segmentation (2/2)
Dufry’s Segmentation (2/2) Dufry by Channel 2015 Dufry by Channel 2016 Airports remain major channel Airports Airports 89% 91% Border, Border, downtown downtown and hotels and hotels shops shops 5% 3% Railway Railway Stations & Stations & Opportunities in Other Other 4% 4% additional Cruise Liners C
Slide 15: World Duty Free integration completed
World Duty Free integration completed Implementation of synergies completed by FY ‘16 Integration of World Duty Free EUR 50-60 million cost synergies EUR 40-50m gross margin synergies completed ahead of plan 100% 100% Total of over CHF 125 million of WDF synergies Implemented Not implemented expecte
Slide 16: New Business Operating Model (BOM) defined
New Business Operating Model (BOM) defined • Following the integration of the transformational acquisitions, the New Dufry New Business has revised and newly defined its Business Operation Model Operating Model defined and implementation • Goals of the BOM are: launched • Increase competitiveness in
Slide 17: Strengths and unique positioning of travel retail
Strengths and unique positioning of travel retail offer sustainable growth opportunities • Digital technologies are important tools for increasing penetration, spend per Unique travel ticket and spend per passenger retail positioning offers sustain- • Travel retail benefits from a unique environment
Slide 18: Driving Customer Experience in a 360° perspective
Driving Customer Experience in a 360° perspective, enhanced through Digital innovations 2. Training our Staff and providing them with the latest selling tools • Disney Institute staff training • Sales Applications for staff on interactive tablets 3. Omnichannel: Digital experience 1. Understanding o
Slide 19: Communicate with customers along whole journey
Communicate with customers along whole journey • Be present in each one of the phases of the Customer Journey Increase customer touch • Improve their shopping experience to increase penetration and spend per points passenger Channels Home Airport Inflight Airport Post Depart Arrive arrival Improve c
Slide 20: Strategic priorities for 2017 and beyond (1)
Strategic priorities for 2017 and beyond (1) • Continue to drive organic growth Drive sales through higher • Long-term PAX growth of 5% annual average and digital opportunities penetration and acting as growth drivers spend per ticket • Drive penetration and increase spend per ticket through ongoing
Slide 21: Strategic priorities for 2017 and beyond (2)
Strategic priorities for 2017 an beyond (2) • Drive organic growth EBITDA margin • 22,000 m2 of already singed space to be opened in 2017 and beyond levels of 13-13.5% • 38,000 m2 of projects in pipeline providing sound base for further growth confirmed • 50,000 m2 to be refurbished in 2017 Focus on
Slide 22: Financials Full Year 2016
2 FINANCIALS Full Year 2016 22_ 2016 Full Year Results Presentation
Slide 23: Growth performance by division
Growth performance by division Reported Growth Components Accelerating like-for-like and Q1 '16 Q2 '16 Q3 '16 Q4 '16 2016 Like for Like -6.2% -7.7% -0.6% 5.0% -1.2% organic growth New concessions, net 1.0% 0.4% 0.9% 0.6% 0.7% in Q4 Organic growth -5.2% -7.3% 0.3% 5.6% -0.5% Changes in scope 63.0% 68
Slide 24: Organic growth: reduction of currency volatility impact
Organic growth: Ongoing reduction of currency volatility impact Local currencies vs USD • Currency volatility continuing with Reduced stabilizing trends in most markets volatility in most 16' Q1 36% markets USD x BRL 16' Q2 14% • Brazilian Real and Russian Ruble 16' Q3 -8% devaluation annualized in
Slide 25: Aggregated FX development
Aggregated FX development Translational FX impact in 2016 Translational FX 4.0% impact turned 2.2% 2.5% negative in Q3 (YoY variation) 2.0% due to GBP 0.0% -0.6% -2.0% -1.4% -4.0% -3.3% GBP impact to Q1 '16 Q2 '16 Q3 '16 Q4 '16 2016 continue in the next quarters Main Currencies Development Turnover
Slide 26: Income statement FY
Income statement FY Income statement FY WDF (CHF million) 2016 % 2015 % consolidation Turnover 7,829.1 100.0% 6,139.3 100.0% effect has Gross profit 4,584.1 58.6% 3,574.7 58.2% annualized in Q3 Concession fees (2,125.9) -27.2% (1,582.6) -25.8% 2016 (August) Personnel expenses (1,054.5) -13.5% (856.2
Slide 27: Income statement Quarter
Income statement Quarter • Q4 2016 is the first comparable quarter Gross margin Q4 year on year after the recent acquisitions Q4 ‘16 has the 59.0% same comparison 58.9% 58.9% base since the • Gross margin improvement from Nuance recent 58.8% (as % of Turnover) and WDF synergies acquisitions 58.7% +4
Slide 28: Cash earnings – strong growth in 2016
Cash earnings – strong growth in 2016 Cash EPS by quarter Cash EPS analysis Cash EPS 2016 2015 3.50 increases by 2.86 3.00 Cash EPS 6.00 3.99 50.4% in 2016 2.50 2.00 1.77 Deffered taxes on acquisition- 1.74 -1.22 -1.32 (CHF) 1.61 1.45 related amortization 1.50 1.17 1.04 0.96 0.90 0.87 1.00 0.91 Line
Slide 29: Cash flow statement
Cash flow statement Cash flow statement Strong free cash (CHF million) FY 2016 FY 2015 flow generation EBITDA before other operational result 935.1 723.8 increasing by Changes in net working capital (39.6) (83.9) Taxes paid (98.0) (95.2) 43% Other operational items (81.8) (57.9) Dividends from assoc
Slide 30: Capex & Net Working Capital
Capex & Net Working Capital Core Net Working Capital Quarter (1) Core Net Working Capital Year (1) Core Net 900 10.0% 900 10.0% Working Capital 800 8.3% 7.9% 800 8.3% NWC (as % of Turnover) NWC (as % of Turnover) 8.0% 8.0% continues at NWC (CHF million) 700 700 NWC (CHF million) 6.3% 6.3% 600 5.9% 6
Slide 31: Balance sheet
Balance sheet Balance sheet as per 31.12.2016 (CHF million) Intangible assets mainly PP&E (7%) 629 996 Other current liabilities (11%) 528 generated by Other current assets (6%) 422 336 340 346 84 acquisitions Net Working Capital (5%) Deferred tax liabilities, net (4%) 2,923 3,750 Other non current
Slide 32: Financing & Covenants
Financing & Covenants Net Debt Evolution • Net debt reduced Net debt 4,500 by CHF 205.6 million in 2016 reduction of CHF 4,000 3,500 • Projects in LatAm and Greece (regional 206 million in 3,000 airports) require overall investments of (CHF million) 2016 2,500 more than CHF 100 million 2,000 3,956 1
Slide 33: Debt structuring
Debt structuring Debt maturity profile • Repayment of 2020 USD bond (500 No debt maturity 3500 million) on December 2, 2016 until 2019 3000 (CHF million) 2500 900 • Savings until maturity in excess of 2000 546 CHF 80 million 1500 874 • One-off costs of CHF 19.6 million 1000 charged in Q4 2016 500 98
Slide 34: Conclusion
3 CONCLUSION 34_ 2016 Full Year Results Presentation
Slide 35: Conclusion
Conclusion • Continue to drive organic growth by: Continue • Growing spend per passenger organic growth acceleration • Accelerating commercial initiatives • Digitalization of business • Increasing retail space • Refurbishing existing operations Drive cash generation and • Execute implementation of n
Slide 36: Thank you
Thank you © DUFRY