INTERNATIONAL. Autogrill Group has revised earlier estimates of the impact of the COVID-19 crisis on business amid the escalation of travel restrictions and airport and outlet closures.
As of 29 March, the negative impact on group revenue caused by the pandemic was estimated to be €190 million. This compares to €25-30 million by the end of the first week in March, as reported. In the last week of March alone, revenue was down by 80-90% year-on-year.
In February, the company launched a range of measures to protect staff, customers and the communities in which it operates, alongside a contingency plan to mitigate the financial and operational effects.
In the critical area of rents, Autogrill said it is in “ongoing discussions with landlords” and has had early “positive feedback for a review of minimum guaranteed amounts”. It said its target was to obtain “fully variable rents” from its partners to protect the business.
Labour costs are also being managed, with reduction of working hours in line with reduced traffic. In North America for example, when traffic fell by 90%, Autogrill reduced the cost of direct labour by the same percentage. Other action includes a hiring freeze and use of relevant government initiatives in relation to social welfare. All non-essential expenditure has also been suspended.
Autogrill said: “Given the lack of predictability of the duration and the impacts of the pandemic, no reliable forecast on FY2020 can be given, therefore Autogrill Group FY2020 guidance will be released once the situation is more stable.
“However, as of the end of March the group has adequate liquidity – amounting to approximately €600 million – to deal with a protracted period of emergency. To preserve cash, all capex is suspended or reduced to the bare minimum.
“Over the past years, Autogrill Group posted solid results and laid the foundations to build value for the long term. Now it is in a position to manage the impact on revenue and profitability of this emergency.”
