MILAN – Meeting yesterday, the board of directors of Autogrill S.p.A. examined and approved the consolidated results as of 30 September 2013. Income performance in the 3rd quarter was good despite a contraction in sales reflecting the prolonged sluggishness of the motorway channel in Italy and, to a lesser extent, a slower rate of growth in airport traffic in the United States.
Group revenues in the quarter were slightly down (0.6%) at constant exchange rates and down 3.4% at current exchange rates due to the relative weakness of the dollar against the euro.
The sales trend was also penalized by the discontinuation of a number of contracts, especially in North America, where for the aforesaid reason sales were substantially stable in the quarter (up 0.3%), even though rising 4.9% on a like-for-like basis.
In the United States, as mentioned above, growth in airport traffic in the 3rd quarter (the most important in the year by volumes) slowed down from 1.4% in January-June to 0.9%.
Despite this, the North American business continued to improve its margins in the 3rd quarter with respect to the reference period (as in the previous two quarters), mainly due to the offering mix and efficiency measures in the management of central costs and general expenses.
In Italy, traffic volumes showed signs of stabilizing with respect to the negative trend in the 1st half of the year, falling 0.8% in July-August compared to 2.8%6 in the 1st half of 2013.
Though improving, the sign is still negative compared to summer 2012, already down 6.4%6 on the previous year.
Falling traffic volumes and lower propensity to spend caused Italian motorway sales to drop 5.6% on the same period in 2012. As a result of the persistently negative situation the impact of falling sales on margins was particularly high because the costs structure at this stage allows hardly compression.
Consolidated Ebitda, in part due to €13.8m of non-recurring income, was stable in absolute term and up 1.8%, with the consolidated Ebitda margin rising to 13.5% from 13.1% in 3rd quarter 2012.
The above stated operating results produced an improvement in the net result of the Food & Beverage business of over 20% to reach €63.9m.
The proportional partial demerger of Autogrill S.p.A. in favour of WDF S.p.A., involving the transfer of the Group’s Travel Retail & Duty Free operations, came into effect on 1 October 2013. The net result of this business in the 3rd quarter was €48.5m, up 24.1% on the reference period.
As a result of the foregoing, the 3rd quarter net consolidated result attributable to shareholders of the parent company was €108.8m, up 24.3% (20.8% at current exchange rates) on 3rd quarter 2012.
Business development continued during the period with investments of €28.4m and the adjudication of new contracts.
In September, the Group announced its entry to the Russian market, where it will provide Food & Beverage services at St. Petersburg International Airport, and in October and November it won concessions at airports in Helsinki in Finland, East Midlands in the UK and Düsseldorf in Germany, and at the Eurotunnel railway stations.
Subsequent events and outlook
Group sales in the first 44 weeks were down 0.9% (down 2.4% at current exchange rates) on the same period in 2012.
The business trend in the summer period and the weeks following it indicates that the revenues target of around €4 billion for full year 2013 announced in July together with the 1st half results may be confirmed.
It is likely, however, that growing North America’s contribution to revenues will be lower than forecast and that this will be offset by higher growth in Europe.
Given that margins on sales in North America are higher than the Group average, the different geographical sourcing of profit is expected to produce Ebitda of around €315m, at the lower end of the range indicated in July (€315m-€325m). The Group expects its capital expenditure for full-year 2013 to be in the order of €170m, slightly lower than previously forecast (€180m).
The figures in the July guidance and those given above include, for full-year 2013, the retail airport business managed by HMSHost in North America, most of which was transferred to World Duty Free Group in September.
