FRANCE. Lagardère Group has reported revenue from its travel retail arm of €4,264 million (US$4,629 million) for 2019, up year-on-year +6.3% like-for-like and +16.1% on a consolidated basis. Recurring EBIT for the year from the division was up +25.6% to €152 million (US$164 million).

Italian operations, including Venice, helped drive overall performance

Lagardère Travel Retail has reported a year-on-year rise in revenue in all regional divisions.

France reported a +7.6% rise in revenue despite a slowdown towards the end of the year. The retailer said the growth was thanks to good performance by its duty free trading at regional airports in Nice, Marseille and Nantes.

The EMEA region (excluding France) was up +6.9% thanks to duty free operations in Rome and Venice. The retailer also benefitted from its ongoing expansion in Africa and the opening of the new food court at Dubai International Airport (DXB).

Business grew by +2.9% in North America thanks to a dynamic performance in travel essentials.

Asia-Pacific advanced +7.2% spurred by growth in both Mainland China and Hong Kong. Business contracted in the Pacific region due to the economic slowdown in Australia and an unfavourable network impact.

Lagardère Travel Retail Chairman & CEO Dag Rasmussen said: “2019 has been another strong year for us, driven by the good performance of our existing operations, the addition of four new markets to our global network and the successful integration of our two latest acquisitions: Hojeij Branded Foods (HBF) in the US in 2018, and International Duty Free (IDF), the leading travel retailer in Belgium, in 2019. The acquisition of IDF has consolidated our position as a leading travel retailer.”

Lagardère Travel Retail Chairman & CEO Dag Rasmussen: “Undeniably, the COVID-19 health crisis is creating headwinds for all players in our industry.”

The travel retail revenue came from 40% Duty Dree & Fashion, 38% Travel Essentials and 22% Foodservice.

Rasmussen added: “We consolidated our number one position in Travel Essentials with strong sales dynamic on existing stores, thanks to our constant anticipation and adaptation to customers’ needs, and the successful expansion of our network in Gabon and Turkey.

“In Duty Free & Fashion, we have continued to work on improving both retail concepts and product offering in key categories to adapt to different profiles of travellers. This has generated positive trends in both the stop ratio and average spend per passenger.

“Our Foodservice division has passed the €1 billion mark in managed sales, doubling its revenues in just three years. This is testament to our efforts to build our leadership position in this activity. Our expertise and solutions have been widely recognised by the industry with eight FAB awards won this year, making us the most-awarded food service company in travel retail.”

Despite the positive performance for 2019, Lagardère Travel Retail has acknowledged the COVID-19 outbreak will impact its performance for 2020, with the retailer operating 43 points of sale in Hong Kong and 279 in Mainland China.

The retailer has estimated its exposure to Chinese passenger spend is around 12%. This means it expects the impact on its EBIT for the first quarter of the year to be around €20 million (US$21.6 million). Corrective actions, such as the optimisation of opening hours and rent, have already been taken, Lagardère added.

“Undeniably, the COVID-19 health crisis is creating headwinds for all players in our industry, but our three business lines strategy and global footprint ensure the resilience of our model in the face of such events,” Rasmussen said.

“We are also confident that the long-term fundamentals underpinning future growth are still in place. More individuals are hungry for international mobility and this leads to a steady growth in both air and rail traffic.

“With a culture of innovation and local empowerment, a commitment to deliver operational excellence and the close partnerships we have with landlords and brands, Lagardère Travel Retail is uniquely placed to continue its growth in 2020 and beyond.”

Revenue for the overall Lagardère Group, which also includes its Publishing division, was up +5% year-on-year at €7,211 million (US$7,836 million). Group recurring EBIT was down -1.8% at €378 million (US$408 million).