FRANCE. Lagardère Group today revealed its 2020 results, with Lagardère Travel Retail revenue reaching €1,720 million, down by -59.7% on a consolidated basis and -60.4% like for like. Within this, the duty free segment saw sales fall by -67%, with travel essentials at -53%, the latter aided by a presence in diverse channels such as rail.
On a like-for-like basis, in France the division reported a -64.5% contraction in revenue, reflecting the impact of the government’s measures restricting mobility, and in particular air traffic and international travel. The marked fall in sales at airports was partly countered by a smaller decline in sales at railway stations (down -54%). Revenue in the EMEA region (excluding France) fell by -59.3%, affected by travel restrictions and border closures introduced in several countries including Italy, Belgium and the UK.
North America also reported lower revenue (-60.4%), with fewer people travelling due to the lockdown measures introduced by various states. Asia Pacific revenue was down -56.2%.
The company said: “Revenue trends varied widely across the region, with the Pacific countries starkly affected by the full, prolonged closure of their borders. In contrast, mainland China posted +18.2% revenue growth over the year, led by a significant rally in domestic traffic and strong online sales momentum.”
Fourth-quarter 2020 revenue for the Travel Retail division fell -64.9% like-for-like to €380 million, on a par with the decline in the third quarter.
Rent decreases were aligned with revenue decrease (through renegotiations), said the company.
The division reported negative recurring EBIT of €353 million, down €505 million on 2019. Cost-cutting moves led to a €605 million reduction in overheads, mainly related to:
- renegotiation of contractual terms, essentially for concession agreements (decrease in fixed rental payments, reduction in the rate of variable payments);
- reduction in the number of points of sale opened and adjusted opening times in line with traffic flows and the health situation;
- adjustments to payroll costs, with the introduction of furlough in countries where these were available, or failing this, redundancies;
- reduction in incidental overheads as a result of either cost savings or negotiations (as appropriate), including marketing costs, travel expenses, consulting fees, maintenance and cleaning costs, and royalties paid.
The company said that swift implementation of cost-saving measures in travel retail helped limit the impact on profitability, with a 19.9% flow-through* exceeding the 2020 target. [*This measure is calculated by dividing the change in recurring operating profit of fully-consolidated companies (recurring EBIT) by the change in revenue -Ed].
The Lagardère group reported revenue of €4,439 million in 2020, down -38% like for like. Lagardère posted a net loss (group share) of €660 million, versus €15 million in 2019.
