Avolta Ag · SIX:AVOL
Avolta — Dufry — 9M 2016 Earnings Presentation
31 slides from Avolta's earnings presentation, Nov 3, 2016
Slide 1: 9M 2016 Results
9M 2016 Results Organic growth, strong cash generation and deleveraging November 3, 2016
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. 9M 2016 Results • Highlights 9M 2016 • Positive Organic growth with World Duty Free • New contracts and significant extensions • Update on World Duty Free Integration 2. Financials 9M 2016 3. Conclusion 3_ 9M 2016 Results Presentation
Slide 4: 9M 2016 Results
1 9M 2016 Results 4_ 9M 2016 Results Presentation
Slide 5: Focus on key initiatives
Focus on key initiatives • Acceleration of organic growth • Integration of WDF and implementation of business model • Increased free cash flow generation and deleveraging Dufry returns to positive organic growth in Q3 2016: +1.3% High number of extensions and new contracts won Considerable amount of
Slide 6: Highlights 9M 2016
Highlights 9M 2016 • Turnover of CHF 5,877.2 million in 9M 2016; growth of 39.4% Organic growth • Organic growth including WDF in Q3 2016 of +1.3% with WDF of 1.3% in Q3 • Gross profit margin improves to 58.4% from 58.1% in 9M 2015 • EBITDA grows by 34.9% and reaches CHF 685.4 million • EBITDA margi
Slide 7: Turnover analysis
Turnover analysis • Turnover grows by 39% Turnover evolution Turnover 7,000 • Pro-forma organic growth incl. World growths by 39% +39% 5,877.2 6,000 Duty Free back to positive in Q3 with 5,000 +1.3 % (CHF million) 4,216.3 4,000 • Ongoing strong performance in Spain 3,000 2,000 • UK with strong organ
Slide 8: Organic growth evolution by division
Organic growth evolution by division Organic growth evolution Pro-forma organic growth Southern Europe and Central and Eastern Asia, Middle East and Africa Europe Australia Latin America North America back to positive 6% 4.7% in Q3 4% 3.2% 2.3% 2.1% 2% 0.8% 0% -0.3% -0.3% -0.3% -2% Improvement -4% s
Slide 9: Considerable amount of contract extensions and shop refurbishments
Considerable amount of contract extensions and shop refurbishments 66,500 m2 of extensions signed YTD 66,500 m2 of Southern North America Region Selected Locations contracts 12% Europe and Africa renewed 12% Southern Europe and Africa Guadalupe, Casablanca Zurich, Basel, Birmingham, UK, Central UK,
Slide 10: International PAX Forecast
Organic growth: Positive forecasts for ongoing passenger growth Healthy International PAX Forecast international 2016 2017 2018 PAX growth Europe 4.8% 6.0% 4.4% Africa -3.4% 1.0% 2.2% Asia/Pacific 10.6% 9.5% 8.1% Middle East 9.9% 9.8% 8.3% LatAm/Caribbean 8.5% 6.9% 6.6% North America 6.3% 5.3% 3.3%
Slide 11: Update on BREXIT
Update on BREXIT Sales evolution in the UK GBP devaluation drives business 15.0% performance in the UK 10.0% (growth YoY) 5.0% 0.0% Before Brexit 3 weeks after 4th week post-Brexit onwards • Business in the UK continues to benefit from the GBP devaluation • Increase in spending seen since Brexit vot
Slide 12: Dufry has opened 27,100 m2 in the first 9M 2016
Dufry has opened 27,100 m2 in the first 9M 2016 Openings 9M 2016 • Dufry opened a total of 153 new 27,100 m2 Southern shops in 9M 2016 of gross retail North America Europe and Africa • Openings represent close to 7% of total space opened 25% 10% retail space UK, Central in 9M 2016 and Eastern Europe
Slide 13: World Duty Free integration well on track
World Duty Free integration well on track Expected implementation of synergies by FY ‘16 Integration of World Duty Free EUR 50-60 million cost synergies EUR 40-50m gross margin synergies on track 100% 97% WDF synergy 3% potential of Implemented Not implemented EUR 100 million confirmed Synergies ref
Slide 14: Dufry's Segmentation (1/2)
Dufry’s Segmentation (1/2) Balanced Dufry by Region 9M 2015 Dufry by Region 9M 2016 UK, Central concession and Eastern UK, Central Europe Southern and Eastern portfolio across Southern Europe and 21% Europe and Europe Africa regions Africa 23% 27% 21% Asia, Middle East and Australia Asia, Middle 10%
Slide 15: Dufry's Segmentation (2/2)
Dufry’s Segmentation (2/2) Dufry by Channel 9M 2015 Dufry by Channel 9M 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 Li
Slide 16: Financials 9M 2016
2 FINANCIALS 9M 2016 16_ 9M 2016 Results Presentation
Slide 17: Growth performance by division
Growth performance by division Q3 2016 including WDF Reported Growth Components Positive like-for- Q1 '16 Q2 '16 Q3 '16 9M '16 like and organic Like-for-like 0.7% Like for Like -6.2% -7.7% -0.6% -4.0% growth in Q3, New concessions, net 1.3% 0.5% 0.5% 0.6% incl. WDF Wholesale -0.3% -0.1% 0.4% 0.2% Or
Slide 18: Organic growth: Ongoing reduction of currency volatility impact
Organic growth: Ongoing reduction of currency volatility impact Local currencies vs USD • Currency volatility slightly improved Volatility and showing stabilizing trends in continues to most markets reduce in most 15' Q4 51% USD x BRL 16' Q1 36% markets 16' Q2 14% • Brazilian Real and Russian Ruble
Slide 19: Aggregated FX development
Aggregated FX development Translational FX impact in 2016 Translational FX 4.0% impact turned 3.0% 2.2% 2.5% negative in Q3 (YoY variation) 2.0% due to the GBP 1.0% 0.6% 0.0% -1.0% -2.0% -1.4% -3.0% GBP impact to Q1 '16 Q2 '16 Q3 '16 9M '16 continue in the next quarters Main Currencies Development T
Slide 20: Income statement
Income statement Income statement WDF (CHF million) 9M '16 % 9M '15 % consolidation Turnover 5,877.2 100.0% 4,216.3 100.0% effect has Gross profit 3,434.7 58.4% 2,449.5 58.1% annualized in Q3 Concession fees (1,601.2) -27.2% (1,074.4) -25.5% 2016 (August) Personnel expenses (792.8) -13.5% (585.9) -1
Slide 21: Cash earnings – strong growth in Q3
Cash earnings – strong growth in Q3 Cash EPS by quarter Cash EPS analysis Cash EPS 9M '16 9M '15 3.50 increases by 2.86 3.00 Cash EPS 4.55 3.08 47.5% in 9M 2016 2.50 2.00 1.77 Deffered taxes on acquisition- 1.74 -1.06 -0.65 (CHF) 1.61 related amortization 1.50 1.17 1.04 0.96 0.90 0.87 1.00 0.91 Line
Slide 22: Cash flow statement
Cash flow statement Cash flow statement Strong free cash (CHF million) 9M 2016 9M 2015 flow generation EBITDA before other operational result 685.4 508.0 increasing by Changes in net working capital 143.2 (21.2) Taxes paid (65.2) (52.7) 64% Other operational items (53.3) (10.0) Dividends from associ
Slide 23: Capex & Net Working Capital
Capex & Net Working Capital Core Net Working Capital Evolution (1) • Improvement in net working capital Core Net 900 10.0% management key for cash generation Working Capital 800 8.3% 7.9% • Core Net Working Capital behaves NWC (as % of Turnover) 8.0% continues at NWC (CHF million) 700 6.3% reduced l
Slide 24: Balance sheet
Balance sheet Balance sheet as per 30.09.2016 (CHF million) Intangible assets mainly PP&E (7%) 599 Other current liabilities (13%) 1,144 generated by Other current assets (6%) 326 470 358 368 83 297 acquisitions Net Working Capital (4%) Deferred tax liabilities, net (4%) 2,886 3,566 Other non curren
Slide 25: Financing & Covenants
Financing & Covenants Net Debt Evolution • Net debt further reduced Net debt by CHF 222.2 million in Q3 2016 4,000 reduction of CHF 390 million since • Covenants reduced to 3.72x below 3,750 -390 beginning of the long-term threshold (CHF million) year incl. CHF 3,500 3,956 3,871 221 million in the 3
Slide 26: Debt structuring
Debt structuring Debt maturity profile • High cash position of CHF 816.6 No debt maturity 3500 million, which is only partly required until 2019 3000 operationally 900 2500 (CHF million) 2000 874 • Repayment of 2020 USD bond (500 1500 million) on December 2, 2016 546 1000 • 5.5% coupon: annual inter
Slide 27: Conclusion
3 CONCLUSION 27_ 9M 2016 Results Presentation
Slide 28: Conclusion
Conclusion • Continue to accelerate organic growth by: Accelerate • Driving sales organic growth • Increasing retail space • Refurbishing existing operations • Accelerating commercial initiatives • Focus on cash generation and deleveraging Drive cash generation and • World Duty Free integration dele
Slide 29: Thank you
Thank you © DUFRY
Slide 30: Appendix
4 Appendix 30_ 9M 2016 Results Presentation
Slide 31: Travel Industry Forecasts – Trends expect positive growth going forward
Travel Industry Forecasts – Trends expect positive growth going forward • Travel and tourism demand is expected to grow 4% by 2020 Positive • Spain, Portugal and Croatia benefited from the shift of tourists flow from prospects for the Middle East and Africa to the Mediterranean Euro travel industry