In the first nine months, Dufry recorded organic sales growth of 3.3 percent to CHF 6.56 billion. However, the pace dropped during the year. After an increase of 7.1% in the first quarter and 4.2% in the second quarter, the most important third season caused a drop by 0.7%.
Despite the difficult environment in some markets, overall results were still good, he said on Monday at the Dufry CEO Julian Diàz. Established numbers and strong cash generation show resistance to markets affected by external factors.
Heading forward from different directions
In terms of regions, Dufry in Latin America particularly affected currency weaknesses in the main markets of Brazil and Argentina. The strong devaluation of individual currencies against the US dollar seriously limited the purchasing power of local passengers. In general, sales in the region decreased organically by 11 percent in the third quarter.
Organic development in Southern Europe and Africa also decreased. A decline of 5.1 percent in this Dufra region is attributed to weak development in Spain. At the height of the season, tourists' crossings actually moved to other regions, such as Turkey and Greece, but this did not fully compensate for this decline. However, the comparative base from the previous year was also very high in Spain, noted Dufry's CEO.
However, in the regions of Eastern Europe, the Middle East, Asia and Australia (+ 4.4%) and North America (+ 7.5%), positive growth rates were recorded in the third quarter. Excluding concession losses at the Geneva airport, organic growth in Central and United Kingdom also organic increased by 3.6 percent.
Profitability has been improved
Meanwhile, the performance program in the entire Group was able to achieve the expected effect. "We managed to implement the Business Operating Model (BOM) faster than we originally expected," Diaz continued. Thus, after nine months, 33 million francs have been realized by 40 million for the whole year. As a result, the EBITDA margin increased by 40 basis points to 12.3 percent. In total, the net income was 87.5 million, 84.7 million in the same period last year.
Duffy also took a step forward in reducing debt. Net debt has fallen by almost 600 million CHF to CHF 3.09 billion since the beginning of the year, partly thanks to the debut of the American subsidiary Hudson. At the end of October, an early buyout of shares of over 400 million francs, announced in April, ended.
Dives in the warehouse
Looking ahead, Dufry is cautiously optimistic. Although the situation is tense in various key markets, signs of stabilization appeared in October, the head of Dufra continued. In general, the company expects organic growth of between 2 to 3 percent throughout the year, with an EBITDA margin of 12 to 12.3 percent. For the year 2018, the dividend is to be paid at least at the level of the previous year, Diaz confirmed earlier information.
On the stock exchange, the numbers and specific guidelines were badly received. Shares closed by 4.6 percent. It's cheaper by 109.05 francs, and the SPI index for the entire market has not changed. Since the beginning of the year, it has dropped by over 20 percent. Analysts commented on their comments on organic growth in the third quarter and a bleak outlook.