FRANCE/INTERNATIONAL. Lagardère Travel Retail has revealed full-year revenue of €3,412 million, down by -7.7% but up by +9.1% on a like-for-like basis.
The difference between the figures reflects a €9 million negative foreign exchange effect and in particular a €556 million negative scope effect, as follows:
- a €576 million negative impact from deconsolidations, essentially relating to the divestment of Press Distribution activities in Belgium, Hungary, Canada and Spain;
- a €20 million positive impact from acquisitions, relating mainly to the acquisition of duty free businesses in Poland and Estonia.
Importantly, if the Distribution division is stripped out, travel retail revenues rose by +8.6% on a consolidated basis.
In Q4 2017, revenue for the division totalled €866 million, up +10.3% like-for-like (down -4.9% on a consolidated basis). The difference between these two figures reflects a €107 million negative scope effect and a €20 million negative foreign exchange effect. As above, with Distribution stripped out, core travel retail revenues performed well, rising by +7.9% year-on-year.
In France, the business posted brisk +7.3% growth in Q4 on a like-for-like basis, led by the expansion of food service activities, the new concept for Relay and a good performance from duty free, spurred mainly by the modernisation of stores at Nice Airport.
EMEA (excluding France) posted a +17.2% increase like-for-like, buoyed chiefly by network expansion in Switzerland – with store openings at Geneva Airport – as well as in Poland and Czech Republic (duty free). Growth was also driven by the launch of duty free operations at Dakar Airport (Senegal) in early December.
In North America, revenue was down -3.6% on a like-for-like basis in Q4, essentially reflecting an unfavourable calendar impact (53rd week in 2016). Adjusted for this impact, revenue for this region advanced +3.1% in the quarter.
Asia Pacific delivered +22.7% revenue growth, with strong momentum in Asia (up +52.7%) led primarily by the new Hong Kong concession and China, but also by a +7.2% upturn in the Pacific region. This was driven by a favourable network impact in Australia and the modernisation and expansion of the duty free business at Auckland Airport.
Lagardère Group revenue totalled €7,069 million, up 4.0% like-for-like (down -4.4% on a consolidated basis) in the full year. The difference between like-for-like and consolidated figures is related to the divestment, noted above, of Press Distribution operations by Lagardère Travel Retail, partly offset by acquisitions at Lagardère Publishing. The negative foreign exchange effect resulted primarily from the depreciation of the Pound Sterling and the US Dollar.
Speaking to investors today, Lagardère Group General & Managing Partner Arnaud Lagardère said: “We had a solid sales year boosted by Lagardère Travel Retail and Lagardère Publishing. We are very satisfied with this.”
Chief Financial Officer Gérard Adsuar highlighted the healthy Q4 performance, noting the +10.3% increase in like-for-like sales.
“We had a good expansion of activity in France, from food service at Paris Gare du Nord station to Nice Airport,” he said. “We had a strong performance in Hong Kong and China and benefited from the opening of the new duty free at Auckland Airport.”
Asked about the outlook for travel retail in 2018, Lagardère Travel Retail Chairman & CEO Dag Rasmussen said: “The fundamentals of the business are good. We have had some good results in business development. We don’t see any specific head winds coming.”
On forthcoming concessions, Rasmussen added: “We benefit right now from the full-year effect of modernisations in Rome, Nice and other locations. In 2018 we will have the full-year impact of openings at Geneva, Dakar and hopefully others to come.”