Autogrill: growth in net profits and cash flow generation

Milan , 13 November 2014 - Meeting today, the board of directors of Autogrill S.p.A. (Milan: AGL IM) examined and approved the consolidated results as of 30 September 2014.
Consolidated revenues in 3rd quarter 2014 amounted to €1,081.3m. Net of the contribution of the airport retail business in North America (the “US Retail Division”) which HMSHost transferred to World Duty Free Group in 2013, there was growth of 1.2%  on 3rd quarter 2013.
Consolidated Ebitda reached €144.1m. Excluding net non-recurring income posted in 2013, the effects of the transfer of the US Retail Division and re-organization costs incurred in 3rd quarter 2014, Ebitda was up 8% .

The consolidated Ebitda margin also improved (net of the afore-mentioned non-recurring items), rising from 12.8% to 13.6%.

The Net result for the quarter moved from €63.9m to €65.4m, up 3.3% (2.3% at current rates).
Cash flow generation rose to €172.4m against €138.6m in the reference period 2013, mainly due to the improvement in working capital.

In terms of sales per channel, 3rd quarter 2014 revenues in the airport channel – where the Group produces nearly 50% of its revenues – were up 6.7% overall (up 6.4% at current rates). HMSHost posted an increase in airport sales of 6.8% (up 6.4% at current rates ) due to 5% growth in like-for-like sales in US airports (against 3.5% growth in traffic), strong performance in the Amsterdam Schiphol hub (revenues up 7.6%) and the openings in new geographical regions: the points of sale opened in Russia, Finland, Turkey, Vietnam, Indonesia and United Arab Emirates between 2012 and 2014 contributed $13.6m to 3rd quarter revenues. There was also excellent performance by the Group in airports in the Other European countries, where revenues were up 11.1% (up 11.3% at current rates). In Italian airports, on the other hand, the shrinking of the boundary in favour of concentrating the offering on the more profitable airports caused a 1.3% drop in sales.

Total revenues in the motorway channel were down 2.2% (down 2.6% at current rates) due to exits from a number of less strategically important points of sale following renewals on the Italian network. HMSHost’s motorway revenues in the quarter grew 3.3% overall (up 2.1% at current rates), while results in Other European countries were in line with the reference period in 2013. In Italy the Group continued to pursue its strategy of focusing on service areas with higher potential, which brought about a reduction in revenues of 5.1%. Even though like-for-like sales were stable (up 0.2%) compared to 2013, the economic situation, traffic trends and consumers’ propensity to spend remain weak, also with respect to the other countries where the Group operates.

Revenues in the railway station channel were up 12.7% (12.6% at current rates) on the same period the previous year. Positive performance by the railway station business was driven largely by the opening of new concepts in the main stations in both Italy, where revenues in the channel grew 3%, and in the Other European countries, where revenues in the channel were up 15.8% (up 15.8% at current rates).

Subsequent events and outlook

In the first 44 weeks  Group sales  were up 2.9%  (up 1.6% at current rates) excluding revenues by the US Retail Division from the figure for the reference period. In October, US airports continued to see a positive trend in the average spend and recorded an increase in the number of transactions. Performance on Italian motorways, on a comparable basis, was better than in the summer quarter, while business in railway stations and airports in Other European countries continued to show good growth.

Autogrill expects revenues for full-year 2014 to be in the order €3,915m, with Ebitda  of around €314m and Ebitda over expected revenues of 8%, and capital expenditure of around €203m.

Guidance is based on an average euro/dollar rate of 1.33, which was the average rate over the first ten months of the year, and on projections for the euro/dollar rates in November and December. The previous guidance was based on an average euro/dollar rate of 1.37.

Autogrill has continued to expand in Europe and Asia in the 4th quarter 2014 by winning new contracts in the airport and railway station channels.
The Group won a new 5-year concession at Bali-Ngurah Rai Airport in Indonesia, where five new locations will be built, and continued development in Vietnam by following up an agreement entered in April 2013 with Imex Pan Pacific Group leading to the opening of 27 points of sale in the international airports of Ho Chi Minh, Hanoi and Nha Trang.
In the UK the Group secured a new 7-year contract at Manchester Airport entailing the opening of new points of sale and the renovation of spaces in which it was already operating. There were two other new contracts, respectively for 7 and 9 years, at London-Stansted Airport and at London-Euston railway station.Released at: 12:43