Autogrill driven by overseas business: revenues top 6 billion euros
Net capital expenditure rises 34.1% to reach €280.9m
- Consolidated revenues: €6,077.6m vs €5,844.6m in 2011 (up 4% at current exchange rates; down 0.1% at constant exchange rates)
- Consolidated Ebitda: €589.9m vs €617m in 2011 (down 4.4% at current exchange rates, down 8.4% at constant exchange rates)
- Net profits for Group: €96.8m vs €126.3m in 2011 (which included €8m of non-recurring income from the disposal of the Flight business)
- Net cash generation: €139.8m, up 32% vs 2011
- Net financial position: €1,494.7m, an improvement of €58.1m on 2011
In the first eight weeks of 2013, Group sales were up 1.1%, with growth in both sectors. Italian motorway business continues to be weak.
Milan , 07 March 2013 - The Board of Directors of Autogrill S.p.A. (Milan: AGL IM) met today and examined and approved the consolidated financial statements and the Company’s draft financial statements for 2012 .
The Group’s internationalization strategy, embarked on years ago, has made it increasingly competitive at a global level and widened its vision beyond local situations and contingencies. If on one hand the crisis in Italy and the rest of the eurozone impacted negatively on the Company’s accounts, on the other the results obtained in the United States, the UK, Latin America and the Middle East enabled the Group in 2012 to top €6 billion in revenues for the first time in its history.
Two distinct trends were seen in the channels in which the Group operates. There was growth in airport sales, driven by good performance by Travel Retail in all countries and by f&b in North America. But there was weakness in the motorway channel in Europe. In Italy in particular, the recession led to a record reduction in lightweight traffic, a heavier than expected fall in heavy traffic and caused a drastic contraction in traveller spending.
Travel Retail revenues were up 10% at current exchange rates (up 5.2% at constant exchange rates), a trend that the sector had already seen throughout 2011. While Food & Beverage sales, rose slightly on 2011 (1.3%) at current exchange rates but were down (2.4%) at constant exchange rates.
Over the year, the Group expanded its international operations at airports by developing Travel Retail in new markets like Brazil and Germany and developing f&b in emerging markets like Turkey and the United Arab Emirates. 2012 saw the Group’s securing the concessions in the “core categories” sectors within Travel Retail across all Spanish airports that were up for tender. Also noteworthy was the early renewal of contracts at Amsterdam and Atlanta airports.
“Our strategy is based on strengthening our airport business, developing new business in emerging economies and restructuring operations in the motorway channel,” said Autogrill CEO Gianmario Tondato Da Ruos. “Regarding Travel Retail, winning the Spanish airport tenders, has given the Group one of the longest contract portfolios in the sector, and marked the further strengthening of this business and a vital step that allowed us to launch a feasibility study on the separation of the two business areas. The transaction would enable both businesses to pursuit their own strategies in order to realise their intrinsic value. Food & Beverage could pursue growth opportunities in new markets and steer itself more rapidly towards the airport and railway station channels; Travel Retail, on the other hand, will be able to concentrate on new business development to gain greater critical mass.
Mr Tondato concluded by stressing that “as far international growth is concerned, we will be focusing on new markets with high development potential. On the other hand, the structural changes seen on European motorways are leading us to rethink these operations, especially in Italy where the impact on Group sales is destined to diminish even further”.
Events after 31 December 2012
Following the adjudication in December 2012 of the Travel Retail concessions in Spanish airports, on 14 February WDFG and AENA signed the contract for the management of business in the 26 airports in the country till 2020. The Company then paid both the contractually agreed advance amount of around €280m covering part of the concession fees and the €26m caution money. The advance payment will be detracted from the instalments scheduled over the duration of the contract.
On 17 January, the American subsidiary HMSHost Corporation contracted a new bond loan in the total amount of $150m, maturing January 2023, with a six-month coupon at a fixed 5.12%. The proceeds of this loan were used to partially repay the bond loan issued in 2003.
In the food & beverage sector, the new Autogrill Villoresi Est, on the A8 Milano-Laghi motorway, was opened on 28 January. This is a significant development for the Company’s international network on account of its avant-garde architecture and because it was built to standards of excellence (LEED Protocol for energy efficiency and Design For All for universal accessibility).
On 1 February, Autogrill announced that it had begun to study the feasibility of a possible industrial and corporate re-organization designed to separate its two business sectors, Food & Beverage and Travel Retail & Duty Free.
The first two months of 2013 saw a continuation of the previous year’s trend, characterized by an airport channel more dynamic than motorways in an extremely weak economic scenario in most countries in the euro zone.
Group sales in the first eight weeks of 2013 were up 1.1%, with both sectors showing growth. There was a slight increase (0.5%) in Food & Bevarage sales thanks to good performance in North American airports that offset the persistent weakness of the Italian motorway channel, where the recession is continuing to cause a structural reduction in traffic and travellers’ spending. There was a more marked improvement in Travel Retail sales (up 2.6%), which outperformed traffic.
With this scenario, the strategic guidelines for 2013 must be based on cash flow generation and the implementation of the new business development activities mentioned above. Objectives in the two sectors will be specific to the differing dynamics that characterize them: in Food & Beverage, the drive to improve operating efficiency and review the business model will continue, while in Travel Retail there will be a strong focus on projects under the contract renewals in Spain.
The Company will issue a more detailed outlook for the current year when it announces its results for 1st quarter 2013.