New business activities continue in the quarter: 21 food&beverage areas awarded in Italy
Results 1st quarter 2014
Consolidated revenues: €813m, down 1% on €841.9m in 1st quarter 2013
Revenues net of retail business transferred in 2013: up 2.6% on 1st quarter 2013
Consolidated Ebitda: €15.1m vs €21.6m in 1st quarter 2013
Net result from continuing operations: €-36.6m vs €-40.9m in 1st quarter 2013
Cash flow generation: €-10.9m vs €-41.2m in 1st quarter 2013
Net financial position: €723.6m at 31 March 2014 against €672.7m at 31 December 2013
Milan, 13 May 2014 - Meeting today, the Board of Directors of Autogrill S.p.A. (Milan: AGL IM) examined and approved the consolidated results at 31 March 2014.
1st quarter 2014 closed with sales of €813m against €841.9m in the same period the previous year. It should be remembered that in 2013 Autogrill completed the demerger of the Travel Retail business from Food & Beverage and that under that operation, in September, the US subsidiary HMSHost sold its airport retail business in North America (the “US Retail Division”) to WDF Group. In the 1st quarter of 2013 such business had contributed around $40m (€30.4m) to the Group’s consolidated sales.
Net of the effect of the transfer of the US Retail Division, Autogrill Group’s consolidated revenues in 1st quarter 2014 were up 2.6% on the same period the previous year (up 0.2% at current rates).
The 1st quarter showed sustained growth in sales in airports, the Group’s main channel, being up 4.4% on the same period 2013. Results were also positive in the motorway channel, where revenues were up 2% thanks to new openings in Other European countries.
These results were achieved despite adverse weather conditions in North America for much of the quarter and the negative impact of the late Easter holiday, the first occurrence of large tourist flows in the year, especially on European motorways.
In North America, in particular, the growth in sales is even more appreciable in light of the fact that performance in the quarter was still being penalized by the consequences of fracturing, the fragmentation of certain major US airports between different operators.
The impact of fracturing, the less profitable sales mix in Italy, the transfer of the US Retail Division and higher re-organization costs affected Ebitda for the quarter, which was €15.1m against €21.6m in the same period the previous year.
Lower amortization and depreciation charges, reflecting lower investments in the previous year, and lower financial charges enabled the Group to record a loss for the period from continuing operations (€36.6m) smaller than that in 1st quarter 2013 (€40.9m).
The improved result in working capital management in 1st quarter 2014 made it possible to limit the cash absorption typical of the 1st quarter of the year to €53.2m, a distinct improvement on €99.6m in the same period the previous year.
Business development and new contracts
A number of major new contracts were secured in 1st quarter 2014: in January the Group announced its entry to Fort Lauderdale International Airport in Florida, where it will operate 25 F&B points of sale till 2032; in the same month it entered an agreement with Russian partner Rosneft to develop the proprietary brand Acafè under franchising in seven service areas around Sochi. In February, Autogrill extended its concession for a number of locations at Copenhagen Airport till 2020, and at the beginning of March it entered Abu Dhabi International Airport on winning a contract to operate six points of sale till 2019.
Regarding motorway concession renewals in Italy, Autogrill was given notice in the quarter that it had been assigned 21 F&B sub-concessions on the Autostrade per l’Italia network worth a total of €2.1 billion with a weighted average duration of 14.3 years. The outcome of the tenders proved in line with the strategic objectives of focusing more higher potential locations and developing innovative concepts.
Outlook for 2014
Sales performance in the weeks following the close of the 1st quarter was positive: sales at week 18 were in line with the same period the previous year or up 3.7% (down 0.8% at current rates) if the sales of the US Retail Division transferred in 2013 are excluded from the figure for 1st quarter 2013.
Sales in North America and the Pacific Area were in line with the 1st quarter trend, while sales in Italy and the Other European countries, especially in the motorway channel, picked up at the end of this first holiday period of the year.
The Group’s guidance for 2014 results is based on an average €/$ rate of 1.37 which, compared to the average rate in 2013 (1.3281), causes an appreciable compression of the Group’s results originating in such currency. Separate indications are therefore given of the effect of the different €/$ rate on the main economic indicators of the performance expected of the Group.
The Group expects 2014 revenues of around €3,860m against €3,985m in 2013. The effect of the different exchange rate used is a reduction in sales of around €60m. It should be noted that the 2013 figure included sales for the first nine months by the US Retail Division transferred in September, amounting to $135m (€101.5m).
Ebitda (including Corporate costs) for full-year 2014 is expected to be around €310m, with a ratio to expected revenues of 8%. In 2013 the Group posted Ebitda of €314m (with an Ebitda margin of 7.9%). The effect of the different exchange rate used is a reduction in Ebitda of around €7m. It should be remembered that the 2013 figure included net non-recurring items of around €9m and the result of the US Retail Division, $8.9m$ (€6.7m) , for the first nine months of 2013.
Lastly, the Group foresees investments of around €210m against around €165m in 2013. The effect of the different exchange rate used is a reduction in investments of €3m.