Groupe ADP: Duty free spend per passenger down -5.3% as traffic climbs +10.9%

FRANCE. Groupe ADP has reported a -5.3% year-on-year decrease in duty free spend per passenger at its airports in the first half of 2018, to €32.2. This compares to a +10.9% increase in passenger traffic, to 130.4 million.

Revenue from retail activities lagged behind traffic growth, increasing +3%, to €225 million. Bars and restaurants drove gains, with revenue from F&B operations surging +14.6% to €22 million.

Airside and landside shops posted +2.9% and +7.6% increases respectively, to €149 million and €9 million.

Source (all charts): Groupe ADP.
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Groupe ADP owns and manages three Paris airports – Charles de Gaulle, Orly and Le Bourget – and operates 34 international airports in total.

Overall retail spend per passenger dropped -1.3% in the first half, to €17.9. When releasing its 2017 financial results in February, Groupe ADP noted its ambition to reach €23 in retail spend per passenger by 2020, aided by a series of big investments. In March, with joint venture partner Lagardère Travel Retail, the company opened a 600sq m Buy Paris Duty Free Beauty concept at Charles de Gaulle Terminal 2E, Hall K.

The Buy Paris Duty Free concept opened at Charles de Gaulle in March and added a new dimension to beauty retailing in Paris.

In 2019, it will deliver a new retail zone in the heart of Orly as well as new luxury boutiques at Charles de Gaulle T2E, Hall L. By 2020 the major investments in both airports will be complete, with further development in Paris Orly South and the T1 connector building at Charles de Gaulle.

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Société de Distribution Aéroportuaire, the joint venture between Paris Aéroport and Lagardère Travel Retail, recorded a small +0.5% revenue increase in the first half, to €339 million. Its performance was impacted by the modernising works in Terminal 2E, Groupe ADP said.

Groupe ADP’s total first half consolidated revenue was up +43.9% to €2.1 billion, but this figure takes into account the positive impact of the full consolidation in the company’s financial statements of TAV Airports results (since the second half of 2017) and Airport International Group’s (AIG) results since April 2018. Excluding the full consolidation of both entities’ results, revenue rose +3%, to €1,502 million.

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EBITDA increased +33.6% to €815 million, but the result also includes the consolidation of the TAV and AIG results. When excluded, EBITDA fell -6.3 %, if the capital gain linked to the cargo hub buildings accounted for during the first half of 2017 is considered. EBITDA rose +4.5% if that too is excluded.

As noted, Groupe ADP traffic was up +10.9%. Traffic at its Paris airports was impacted by strikes but still rose +3% to 49.9 million. Excluding the strikes, a +4.6% increase was reported.

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“The half-year results are solid for all our activities,” said Aéroports de Paris SA – Groupe ADP Chairman and CEO Augustin de Romanet. “Infrastructure works are on track, in particular the commissioning, during the second quarter of 2018, of the luggage sorting system under Hall L in Terminal 2E.

“Abroad, a new step has been passed in April, with the takeover of Airport International Group, concessionaire of Amman International Airport in Jordan. Results of the firm are now fully consolidated. Over the first half, TAV Airports posted very good results thanks notably to the acquisition of Antalya since May 2018 and the traffic growth of +17.7%.

“Groupe ADP is following its long-term development strategy by preparing the future terminal T4 – an infrastructure allowing Paris Charles de Gaulle’s capacity to increase from 35 to 40 million passengers by 2037. This ambitious project will be built in several phases and its global cost is estimated at between €7-9 billion.”

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