Gérard Adsuar: “The Asia Pacific region – thanks to the Hong Kong concession – grew by over 20%.”

FRANCE. The Asia Pacific region was a strong growth driver for the Lagardère Travel Retail division in 2018 according to parent company Lagardère SCA Chief Financial Officer Gérard Adsuar. [His comments below were translated from French to English at an investors meeting last week].

Half of Lagardère Travel Retail’s 2018 growth of 8.8% like-for-like, as reported previously, was due to the existing network, increases in passenger travel and retail initiatives, he said. The rest came from new shops at newly-won concessions such as those in Dakar, Geneva and Hong Kong.

Adsuar added: “Europe, Middle East and Africa showed a lovely growth of close to 10%; France grew by 4% despite the strikes in Q2; North America also saw nice growth of 5% while the Asia Pacific region – thanks to the Hong Kong concession – grew by over 20%.”

New concessions bring sales growth – but also higher set-up and development costs at the start of contracts, he noted. However, Lagardère Travel Retail managed to maintain its operating margin at 3.3% last year by offsetting these costs thanks to margin improvements at existing concessions, Adsuar explained.

Lagardère Travel Retail increased its operational income (recurring EBIT) by €7 million to €119 million in 2018. The higher EBIT was mainly due to organic growth and network expansion in EMEA. “North America also had strong sales momentum thanks to commercial initiatives and new concepts,” noted Adsuar.

Lagardère Travel Retail’s revenue jump of 8.8% like-for-like (see above) was helped by new concessions while stable profit margins (see below) were maintained despite higher set-up and development costs.