INTERNATIONAL. Lagardère Travel Retail has posted a +6.3% year-on-year rise in like-for-like revenue to €1.15 billion (US$1.26 billion) for the three months to the end of September, with growth across all regions.
Overall in the nine months to the end of September, revenue for the duty free retailer was €3.15 billion (US$3.45 billion). This represents +6.4% growth like-for-like and +15.5% consolidated; the difference between like-for-like and consolidated is due to the acquisitions of Hojeij Branded Foods (HBF) and Smullers, Lagardère said. 
The retailer reported like-for-like growth across each of its regional divisions for the third quarter. France posted robust growth of +7.6%, in part thanks to the strong regional duty free offer.
In the EMEA region (excluding France), revenue was +7.4%, thanks to strong sales in Italy, network growth in Central Europe and the Iberian Peninsula, the opening of the DXB food court and the new concessions in Gabon and Senegal.
North America was flat at +0.9% as growth in the retailer’s foodservice business offset the negative impacts of Hurricane Dorian and the China-US trade war.
Organic expansion in China helped the Asia Pacific region to an increase of +8.8%. The retailer said that Hong Kong operations were affected by the ongoing protests, but were countered by network growth at the airport. 
The overall business for Lagardère, which includes other avenues such as publishing and media, saw revenue for the quarter increase +4.1% like-for-like to €2 billion (US$2.19 billion). Revenue for the full nine months was up +5.7% like-for-like and ahead +6.7% consolidated at €5.61 billion (US$6.16 billion). 
The company confirmed its 2019 recurring EBIT growth target of between +4% and +6% at constant exchange rates and excluding the acquisitions of HBF and International Duty Free.
Staying solid Assessing today’s results, Morgan Stanley Research noted “another solid growth performance in travel retail”. “Travel Retail had Q3 organic revenue growth of +6.3% bringing the 9m rate to +6.4%. France grew by +7.6% with a strong performance in duty free. EMEA grew +7.4% with good growth in Italy and Spain and with a new opening in Dubai. North America at +0.9% was impacted by Hurricane Dorian. Asia Pacific grew +8.8% with organic expansion in China,” the analyst noted. On the International Duty Free acquisition, Morgan Stanley Research commented: “Lagardère acquired IDF (International Duty Free), Belgium’s leading Travel Retail (Brussels and Charleroi , Luxembourg, Kenya) for €250m with the deal closing in late September. “Sales in 2018 were €183m and are predicted by Lagardère to be c€190m-€200m in 2020. Including €7m of anticipated synergies (out to 2022) Lagardère estimates it is paying c8x 2020 EBITDA for IDF. Ex the synergies it implies a multiple of c10.4x EBITDA. Over time Lagardère targets a recurring EBIT margin of c9%.” |
