INTERNATIONAL. “We can tender at any airport in the world. And this agreement allows us to offer unparalleled levels of financial security to airports.” That’s how ChangeGroup Co-Founder and CEO Sacha Zackariya frames the recently announced deal in which global cash management service company Prosegur Cash has acquired a controlling stake in his company.
The agreement will combine ChangeGroup’s portfolio of 95 foreign exchange branches and 300 ATMs across 37 cities with the international cash handling expertise of Prosegur Cash.
Prosegur Cash certainly brings heft to the new partnership, with its 140,000 group employees across 26 countries, €3.5 billion in revenues and EBITDA of €386 million in 2021.
Zackariya says: “Like many in the travel market we were hit by COVID. As a family company, of which I have been CEO since 2008, we were looking to strengthen our balance sheet. We had an approach from Prosegur, which initially led to a partnership at Gatwick, and that blossomed into a full investment. That gives us access to world-class, world-leading financial and people resources and skills, with incredibly talented management and staff.”
That will allow ChangeGroup to build on its track record in foreign exchange markets since it was founded by Zackariya and his parents in 1991. With investment at the time from 3i Group, the company grew to become the third largest bureau de change group in the world, built on business in the UK, the Nordic states, the US and Australia.
In the past decade it also entered the market for ATMs, which offer dynamic currency conversion, multi-currency dispensing and other services. Key recent contract gains include London Gatwick and Luton airports in the UK, Toulouse Airport in France, and last year, Basel-Mulhouse Airport and Eurostar St. Pancras Station.
“The blend of bureaux de change and ATMs gives us a 360-degree view of the currency market,” says Zackariya. “At Gatwick for example we operate around 70 ATMs in addition to 15 branches. We can offer a spread of services to airports. It’s very exciting.”
Foreign exchange has been a channel that has faced challenges both on the High Street and at airports, not least with the digitalisation of consumer transactions, a trend accelerated by the pandemic. But Zackariya says that the business opportunity in travel remains strong, noting that talk of a shift away from cash worldwide is overblown.
“We have not gone cashless. We see cash use among travellers as still very strong. Our data shows, as does that of Prosegur, that cash for travellers remains important. It offers safety and anonymity. If systems go down or there are exchange rate fluctuations, people want money in their pockets. Everyone wants to know that they don’t need to rely on a piece of plastic or that they might be hit by cybercrime or identity theft. So we actually are seeing increases in ATVs.”
Today the consumer wants cash delivered in different ways that suit their lifestyles, Zackariya adds.
“It’s about offering choice. We can deliver to your home, through ATMs, with prepaid cards. It can be at the airport departure, or on arrival. And it’s about customers feeling safe and secure about money. They have saved up, their trip is an important visit for them.
“The majority of customers, around 90%, are leisure customers. And that’s super important. Many businesspeople don’t have the time to shop, but if you travel for leisure, it’s a totally different game.”
For ChangeGroup, the business model must also be sustainable, and here he sees airports rethinking the balance of risk and reward.
Zackariya says: “It’s important that the industry moves away from Minimum Annual Guarantees (MAGs), and we want to strike long-term deals with airports. We will be here for the long term, and can offer performance and stability. If airports can deliver the passengers we can deliver the best possible customer satisfaction.
“MAG per passenger makes sense for many reasons. It allows potentially higher returns per passenger. It’s in the interests of everyone and airports should get the highest possible rent under this model.”
Another channel that ChangeGroup covers is tax refunds, a lucrative source of revenue in many markets, but on which the UK government has made several u-turns in recent months. Most recently, the industry has been disappointed by the decision not to reintroduce this service for international visitors.
Zackariya says: “We have supported the industry moves in the UK to reinstate tax free shopping and tax refunds as a service. Having cash refunds as part of the mix is really important for long-haul travel.”
With Prosegur’s investment, Zackariya is now looking ahead with confidence at ChangeGroup’s prospects.
“We are on a journey to develop new business led by experienced travel retail executives Louis de Bourgoing and Alex McCann. We are willing to grow all over the world, led by our strong footprint in Europe. The territorial reach and management of Prosegur is very complementary. And it’s not only in airports, we have a strong High Street business too, which offers access to new countries, whether it’s through bureaux de change or ATMs.
“We were forecasting EBITDA going into pandemic of over £10 million. We are aiming to exceed our 2019 EBITDA already in 2022.
“We have big ambitions. We aim to triple in size as soon as possible in terms of our branch network and ATM footprint. There is a tremendous need for our services. With COVID many airports don‘t have them any more and we want to address this need as quickly as possible.”
