WDF S.P.A. H RESULTS PRESENTATION

Transcription

1 WDF S.P.A. H RESULTS PRESENTATION 30 th July 2015 WORLD DUTY FREE GROUP AFRICA AMERICAS ASIA EUROPE

2 Forward looking statements This presentation is of a purely informative nature and does not constitute an offer or solicitation to sell, exchange or buy securities issued by World Duty Free S.p.A. or its subsidiaries or any advice or recommendation with respect to such securities or other financial instruments, nor shall it or any part of it nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision in relation thereto. the statements contained herein have not been independently verified. This presentation shall mean and include the slides that follow, the oral presentation of the slides by World Duty Free S.p.A. and any question-and-answer session that follows that oral presentation and hard copies of this document. This presentation is not for distribution in, nor does it or any other statement (oral or otherwise) made at any time in connection herewith constitute an offer of securities for sale in Canada, Australia, Japan or in any jurisdiction where such distribution or offer is prohibited. Neither the presentation nor any copy of it may be taken or transmitted into the United States of America, its territories or possessions, or distributed, directly or indirectly, in the United States of America, its territories or possessions or to any U.S. person as defined in Regulation S under the US Securities Act Any forward looking statements, projections, objectives and estimates in this presentation are based upon information available on the date of this presentation and are subject to change without notice. Any forward looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward looking statements. Actual results or performance may differ significantly from the from those expressed in or implied by these statements for a number of reasons and factors, many of which are beyond the ability of World Duty Free S.p.A. to control or estimate precisely including by way of example: traffic trends in the countries and business channels where the Group operates; the outcome of negotiations on renewals of existing concession contracts and future tenders; changes in the competitive scenario; exchange rates between the main currencies and the euro, esp. the US dollar and UK sterling; interest rate movements; future developments in demand; changing oil prices; general global economic conditions; geopolitical factors and new legislation in the countries where the Group operates; other changes in business conditions. Statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. World Duty Free S.p.A. makes no representation or warranty, whether expressed or implied, and no reliance should be placed on, the fairness, accuracy, completeness, correctness or reliability of the information contained herein and/or discussed verbally. Neither the Company nor any of its representatives shall assume any responsibility or accept any liability whatsoever (whether arising in tort, contract or otherwise) arising in any way in relation to such Information or in relation to any loss arising from its use or otherwise arising in connection with this presentation. World Duty Free S.p.A. undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on forward looking statements contained herein, which are made only as of the date of this presentation. This presentation has to be accompanied by a verbal explanation. A simple reading of this presentation without the appropriate verbal explanation could give rise to a partial or incorrect understanding. 2

3 Definitions GROSS MARGIN EBIT EBITDA ADJUSTED EBITDA ADJUSTED RENTS WORKING CAPITAL CASH FLOW FROM OPERATIONS NET CASH FLOW FROM OPERATIONS CAPEX FREE OPERATING CASH FLOW (FOCF) PROFIT / NET LOSS FOR THE PERIOD NET FINANCIAL POSITION (NFP) NET INVESTED CAPITAL EARNINGS PER SHARE CHANGE CONSTANT EXCHANGE RATES COMPARABLE GROWTH Revenue less cost of supplies and goods Operating profit EBIT excluding provision for risk and charges, restructuring costs, linearization of fixed concession fees and depreciation, amortization and imapirment losses on property, plant and equipment and intangible assets EBITDA plus the recovery of annual concession fees paid in advance to AENA Contractual concession fees minus the recovery of concession fees paid in advance to AENA Inventories plus trade receivables, other assets and income tax assets, less trade payable (current portion), other liabilities, income tax liabilities, employee benefits (current portion) and provisions for risk and charges (current portion) Adjusted EBITDA plus change in working capital plus change in non-current non-financial assets and liabilities and other non cash items Cash flow from operations less net interests and taxes paid Capital expenditure excluding Investments in financial non-current assets and equity investments Net cash flow from operations less Capex paid, plus/minus net Investments proceeds/paid Profit / Net Loss for the period Bank loans and borrowings and other financial liabilities current and non-current minus cash & cash equivalents and non-current financail assets. Should the NFP be negative, and it can be also be referred as Net Debt Non-current assets plus working capital plus other non-current non-financial assets and liabilities plus assets held for sale Net result for the period attributable to owners of the parent divided by the average number of outstanding shares The variation that would have been reported had the comparative figures of consolidated companies with functional currencies other than Euro been converted at the same exchange rates of the current period Revenue generated only by those stores which have been up and running for periods reported with the same offer Some figures may have been rounded to the nearest million. Changes and ratios have been calculated using figures in thousands and not the figures rounded to the nearest million as shown. 3

4 GLOBAL TRAVEL RETAIL EXCELLENCE H Business review Eugenio Andrades CEO WORLD DUTY FREE GROUP AFRICA AMERICAS ASIA EUROPE

5 Strong revenue growth continues Revenues 1,294.9m +23.7% vs (+12.9% in local currency) New openings include Eurotunnel France & LAX Adjusted EBITDA: 128.2m +6.0% vs Includes 18.7m AENA advance payment recovery ( 14.7m in 2014) Adjusted EBITDA margin dilution from 11.6% to 9.9% Increase in rents accounts for 1.0pps vs 2014 Net Loss ( 52.8m) vs 28m in 2014 Dusseldorf : onerous contract provision 17m, impairment losses 9.2m Restructuring costs 10.8m MAG linearisation impact 39.9m Positive cash flow generation FOCF of 86.5m (vs. 75.7m in 2014) Net Debt 936.6m Affected by FX conversion 37.6m 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Revenue Growth 23.4% 23.8% 19.3% 15.9% 15.8% 16.2% 15.8% 13.1% 13.0% 10.2% 11.1% 11.2% Q Q Q Q Q Q Reported growth Growth at constant FX 5

6 Business priority targets remain on track Completing integration process Headcount reduction savings ahead of plan Opex savings in line with plan Recurring annual EBITDA impact at full potential ( m) from integration process One-off costs in line with guidance 3 +5 By Enhancing performance in Spain +12 By 2016 H1 traffic above expectations +5.3% (budget assumption +3%) All commercial activities launched increasing SPH By 2015 Value campaigns targeting British travellers Organization Supply chain & logistics IT Systems integration Total impact and phasing Pursuing the US opportunity US Retail business +34.8% in local currency Transfer completed - Atlanta, Oakland & Empire State, sales 19.5m (Mar June) New store Los Angeles LAX T6 0.5m in first month opening (June) IT systems integration completed 6

7 UK sales growth remains positive despite Sterling strength MAN 10% Sales H Rest of UK 21% LHR 44% Change in Sales Pax* TOTAL UK +2.3% +5.1% LHR -2.5% +1.3% LGW +0.7% +5.4% STD 7% LGW 18% STD +23.6% +17.2% MAN +6.4% +5.2% Heathrow impacted by: Strength of : EU travellers SPH -9.9% VLY (Euro 3 month ave 0.73) World events: Non-EU travellers SPH -1.7% VLY (Russian crisis, oil price) Annualisation of T2 impact Sept 2015 T5 development completes end of summer 2015 Outside Heathrow sales were +6.5% from increased traffic volumes with marginally lower SPH UK Sales +2.3% in = +14.7% in * Source: Heathrow Airport, Manchester & Stansted Airports, Gatwick Airport, Glasgow & Aberdeen Airports WORLD DUTY FREE GROUP AFRICA AMERICAS ASIA EUROPE 7

8 Spanish airport sales continue to outperform traffic Evolution of pax Traffic vs. WDFG sales Y-o-Y Quarterly growth rates 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% Change in traffic Spain Spain LFL sales Q Q Q Q Q Q Q Q Q H1 sales in Spain up +19.4% vs 2014 LFL sales +12.6% compared to traffic +5.3% Tenerife Sur annualised April 2015 MAD +17.5% driven mainly from increased traffic +11.4% with SPH +5.5% BCN +12.1% coming from SPH +6.9% with traffic +4.8% Source: AENA LFL excludes Tenerife South & new shops 8

9 Other regions maintain positive contribution to growth Y-o-Y growth % Euro Local currency UK 14.7% 2.3% % of Total Sales 7.5% RoEUROPE 26.4% 26.4% AMERICAS 42.4% 22.9% ASIA&ME 18.3% (1.1%) 22.1% 4.2% 40.8% TOTAL 23.7% 12.9% 25.3% RoEurope includes 6 months sales at Helsinki (opened march 2014), without Helsinki sales were up +21.6% Americas transfer of ATL, OAK & Empire State completed end of Feb: additional sales of 19.5m in H1. Excluding these locations growth +14.9% in local currency Asia & ME Jordan -7.3% due to Ramadan phasing and airport refurbishment impacting both departures and arrivals 9

10 GLOBAL TRAVEL RETAIL EXCELLENCE Financial highlights David Jiménez-Blanco CFO WORLD DUTY FREE GROUP AFRICA AMERICAS ASIA EUROPE

11 Strong cash flow generation and continued debt reduction H st Half Million Eur Change Change at constant FX REVENUES 1, , % 12.9% GROSS MARGIN % 12.2% % On Sales 59.1% 59.3% ADJUSTED EBITDA % (3.0%) % On Sales 9.9% 11.6% NET PROFIT / LOSS (52.8) 28.0 n.a. n.a. % On Sales (4.1%) 2.7% CAPEX (0.3%) % On Sales 2.7% 3.4% FOCF % % On Sales 6.7% 7.2% NFP (*) (3.4%) (*) Info relating to 2014 refers to the corresponding balance as of December 31 11

12 Net Profit affected by non-cash, non recurring items H st Half ( m) Change Change at constant FX ADJUSTED EBITDA % (3.0%) EBITDA % (7.2%) Provisions for risk and charges, net of releases (17.0) - n.a. n.a. Restructuring costs (10.8) - n.a. n.a. Linearization of concession fees (39.9) - n.a. n.a. Depreciation, amortisation and impairment losses (70.6) (47.6) 48.3% 38.9% EBIT (28.8) 58.7 n.a. n.a. Net financial costs (9.0) (20.6) (56.3%) (58.7%) Other financial results (100.0%) (100.0%) Pre tax profit (37.8) 38.2 n.a. n.a. Income tax (15.0) (10.2) 47.1% 38.2% Profit / (loss) for the period (52.8) 28.0 n.a. n.a. 12

13 Sales up 23.7% driven by actions in Spain and Americas H In million Euro (0.9) 1, , Revenues H Forex effect United Kingdom Rest of Europe Americas Asia & Middle East Revenues H

14 Adjusted EBITDA margin diluted by higher rents H % 11.6% (0.2%) (0.5%) 11.0% (1.0%) 10.0% 9.9% 9.0% 8.0% 7.0% 6.0% Adjusted EBITDA margin 6M 2014 Gross margin Personnel Adjusted rents Adjusted EBITDA margin 6M

15 Cash flow generation remains strong H st Half Million EUR Adjusted EBITDA Change in net working capital and net change in non-current non-financial assets and liabilities Restructuring costs payments (10.7) - Other non-cash items 0.2 (0.2) CASH FLOW FROM OPERATIONS Tax paid (17.5) (15.2) Net interest paid (11.2) (22.8) NET CASH FLOW FROM OPERATIONS Net CAPEX outflow (43.4) (30.4) Net investments (paid) / proceeds (16.8) - FREE OPERATING CASH FLOW

16 Net Debt reduced by 120m before non-recurring effects H ,100 In million Euro 1,050 1, (192.8) NFP Deleverage without non-recurring effects Euro m CF from operations before nonrecurring effects Net tax/interest paid Net CAPEX outflow Other movements NFP before nonrecurring effects Bank covenant now 2.87x Forex effect Extraord. effects in CF from operations Net Other non investments recurring movements NFP

17 Current trading 2015 First 30 weeks (to July 26th) Y-o-Y sales growth % Euro Local currency UK 15.1% 2.4% RoEUROPE 23.6% 23.6% AMERICAS 39.6% 21.4% ASIA&ME 21.3% (0.9%) TOTAL 22.8% 11.8% Spain +17.9% continued traffic growth and spends maintained (LFL +11.9%) Airport Sales only LFL excludes Tenerife South & new shops 17

18 Update on 2015 guidance FY 2015 adjusted to exchange rates Q1 guidance Revised guidance Sales m 2,705 2,745 2,800 2,850 Adjusted EBITDA m Net Debt Based on Euro/US Dollar 1.13 (formerly 1.18) and Euro/GBP 0.73 (formerly 0.76) 18

19 GLOBAL TRAVEL RETAIL EXCELLENCE Q&A WORLD DUTY FREE GROUP AFRICA AMERICAS ASIA EUROPE

20 GLOBAL TRAVEL RETAIL EXCELLENCE APPENDIX Quarterly Financial Information WORLD DUTY FREE GROUP AFRICA AMERICAS ASIA EUROPE

21 Financial highlights Q nd QUARTER Million Eur Change Change at constant FX REVENUES % 13.0% GROSS MARGIN % 11.6% % On Sales 58.8% 59.4% ADJUSTED EBITDA % (0.5%) % On Sales 11.3% 12.9% NET PROFIT / LOSS (6.0) 25.6 n.a. n.a. % On Sales (0.8%) 4.2% CAPEX (15.5%) % On Sales 3.3% 4.9% FOCF (30.4%) % On Sales 9.4% 16.7% 21

22 Q Regional breakdown of sales Y-o-Y Growth % Euro Local currency UK 15.2% 2.2% % to Total Sales 6.9% RoEUROPE 23.8% 23.8% AMERICAS 48.7% 27.7% 20.7% 4.1% 41.1% ASIA&ME 18.1% (1.8%) 27.2% TOTAL 23.8% 13.0% 22

23 Regional breakdown of sales Q nd Quarter Million Eur Change Change at constant FX UNITED KINGDOM % 2.2% Airports % 2.2% Non-airports - - n.a. n.a. REST OF EUROPE % 23.8% Airports % 19.3% Non-airports % 113.2% AMERICAS % 27.7% Airports % 25.6% Non-airports % 152.9% ASIA & MIDDLE EAST % (1.8%) Airports % (1.8%) Non-airports % 0.0% TOTAL SALES % 13.0% Airports % 11.1% Non-airports % 118.3% Spanish airports % 17.3% 23

24 Sales bridge Q , (0.8) Revenues Q Forex effect United Kingdom Rest of Europe Americas Asia & Middle East Revenues Q

25 Adjusted EBITDA margin bridge Q % 13% 12.9% (0.5%) 12% (0.3%) (0.8%) 11.3% 11% 10% 9% 8% Adjusted EBITDA margin Q Gross margin Other operating income Personnel Adjusted EBITDA margin Q

26 Condensed cash flow statement Q nd QUARTER Million EUR Adjusted EBITDA Change in net working capital and net change in non-current nonfinancial assets and liabilities Restructuring costs payments (6.6) - Other non-cash items 0.2 (0.2) CASH FLOW FROM OPERATIONS Tax (paid) / refund (12.2) (8.5) Net interest paid (5.6) (11.7) NET CASH FLOW FROM OPERATIONS Net CAPEX outflow (22.6) (16.1) FREE OPERATING CASH FLOW

27 Net debt evolution Q ,100 1,050 1, (141.9) (5.5) Deleverage without non-recurring effects Euro 107.0m 700 NFP CF from operations before nonrecurring effects Net tax/interest paid Net CAPEX outflow Other movements NFP before nonrecurring effects Forex effect Extraord. effects in CF from operations Other non recurring movements NFP

28 Condensed Consolidated P&L Q nd Quarter Change ( m) 2015 % of Revenue 2014 % of Revenue 2015 constant exchange rates Revenue % % 23.8% 13.2% Other Operating Income % % (7.5%) (12.5%) TOTAL REVENUE AND OTHER OPERATING INCOME % % 23.4% 12.8% Supplies and goods (310.4) (41.2%) (247.3) (40.6%) 25.5% 15.2% Personnel expense (88.3) (11.7%) (66.8) (11.0%) 32.2% 20.5% Contractual concession fees (238.5) (31.6%) (190.9) (31.4%) 24.9% 15.0% Other operating expense (48.1) (6.4%) (40.5) (6.7%) 18.8% 4.7% EBITDA % % 6.6% (4.1%) Provisions for risk and charges, net of releases (18.9) (2.5%) - 0.0% n.a. n.a. Restructuring costs (1.5) (0.2%) - 0.0% n.a. n.a. Linearization of concession fees (7.5) (1.0%) - 0.0% n.a. n.a. Depreciation, amortisation and impairment losses (41.1) (5.5%) (24.9) (4.1%) 65.1% 54.2% EBIT % % (85.5%) (96.1%) Net financial costs (4.2) (0.6%) (9.9) (1.6%) (57.6%) (60.6%) Other financial results - 0.0% % (100.0%) (100.0%) Pre tax profit / loss % % (93.1%) n.a. Income tax (8.5) (1.1%) (10.7) (1.8%) (20.6%) (25.2%) Profit / (loss) for the period (6.0) (0.8%) % n.a. n.a. - Attributable to owners of the parent (8.3) (1.1%) % n.a. n.a. - Attributable to non-controlling interest % % 43.8% 37.5% Adjusted EBITDA % % 9.2% (0.5%) 28

29 Condensed consolidated P&L - Net financial expense Q Million Eur Q Million Eur 2Q 2014 (5.6) Interest Expense on Debt (5.6) Bank Debt - Interest Income 2.6 Other (3.0) Interest Expense, net (1.2) Charges (0.2) Fees (1.0) Other Charges (4.2) Net Financial Expense (10.8) Interest Expense on Debt (10.8) Bank Debt 0.1 Interest Income 3.0 Other (7.7) Interest Expense, net (2.2) Charges (1.3) Fees (0.9) Other Charges (9.9) Net Financial Expense 29

30 GLOBAL TRAVEL RETAIL EXCELLENCE APPENDIX First Half Financial Information WORLD DUTY FREE GROUP AFRICA AMERICAS ASIA EUROPE

31 Regional breakdown of sales H st Half Million Eur Change Change at constant FX UNITED KINGDOM % 2.3% Airports % 2.3% Non-airports - - n.a. n.a. REST OF EUROPE % 26.4% Airports % 23.7% Non-airports % 65.5% AMERICAS % 22.9% Airports % 21.6% Non-airports % 100.0% ASIA & MIDDLE EAST % (1.1%) Airports % (1.0%) Non-airports % (50.0%) TOTAL SALES 1, , % 12.9% Airports 1, , % 11.7% Non-airports % 69.3% Spanish airports % 19.4% 31

32 Sales breakdown by category & fiscal regime H SALES BY CATEGORY H1 YTD 2015 H1 YTD % total % total Growth YoY FOOD & CONF % 11.0% 18.9% WINE & SPIRITS % 17.4% 20.5% TOBACCO % 12.3% 23.6% BEAUTY % 42.1% 18.9% SOUVENIRS % 2.4% 14.5% US RETAIL % 6.1% 59.5% OTHERS % 8.7% 23.1% TOTAL AIRPORT SALES 1, , % 100% 22.5% SALES BY FISCAL REGIME H1 YTD 2015 H1 YTD % total % total Growth YoY DUTY FREE % 57% 19.0% DUTY PAID % 43% 27.1% TOTAL AIRPORT SALES 1, , % 100% 22.5% 32

33 Business segments H Revenue and EBITDA REVENUE 6 MONTHS 2015 ( m) Asia & ME 97.6 REVENUE 6 MONTHS 2014 ( m) Asia & ME 82.5 AMER UK AMER UK AMER 21.0 RoE ADJUSTED EBITDA H ( m) Asia & ME 12.7 RoE ADJUSTED EBITDA H ( m) AMER 13.9 Asia & ME 13.1 UK 63.9 UK 63.0 RoE 30.6 RoE

34 Linearisation effect is seasonal within the year m 75 FY Q Q Q Q MAG on Lot 1 and Lot 2 (*) MAG + linearisation provision Contractual MAG 2015 Lots 1 and 2 Linearisation provision Linearised MAG Lots 1 and 2 P&L non cash impact ( m) TOTAL Adjustment (32) (8) 11 (21) (*) Quarterly phasing of MAG for indicative purposes only 34

35 Condensed consolidated P&L H st Half Change ( m) 2015 % on Revenue 2014 % on Revenue 2015 constant exchange rates Revenue 1, % 1, % 23.7% 12.9% Other Operating Income % % 21.0% 14.7% TOTAL REVENUE AND OTHER OPERATING INCOME 1, % 1, % 23.7% 13.0% Supplies and goods (530.2) (40.9%) (426.2) (40.7%) 24.4% 14.1% Personnel expense (162.4) (12.5%) (126.3) (12.1%) 28.6% 17.4% Contractual concession fees (416.5) (32.2%) (326.6) (31.2%) 27.5% 17.2% Other operating expense (93.6) (7.2%) (75.8) (7.2%) 23.5% 9.6% EBITDA % % 3.0% (7.2%) Provisions for risk and charges, net of releases (17.0) (1.3%) - 0.0% n.a. n.a. Restructuring costs (10.8) (0.8%) - 0.0% n.a. n.a. Linearization of concession fees (39.9) (3.1%) - 0.0% n.a. n.a. Depreciation, amortisation and impairment losses (70.6) (5.5%) (47.6) (4.5%) 48.3% 38.9% EBIT (28.8) (2.2%) % n.a. n.a. Net financial costs (9.0) (0.7%) (20.6) (2.0%) (56.3%) (58.7%) Other financial results - 0.0% % (100.0%) (100.0%) Pre tax profit (37.8) (2.9%) % n.a. n.a. Income tax (15.0) (1.2%) (10.2) (1.0%) 47.1% 38.2% Profit / (loss) for the period (52.8) (4.1%) % n.a. n.a. - Attributable to owners of the parent (56.7) (4.4%) % n.a. n.a. - Attributable to non-controlling interest % % 44.4% 37.0% Adjusted EBITDA % % 6.0% (3.0%) 35

36 Condensed consolidated P&L - Net financial expense H Million Eur 1H 2015 Million Eur 1H 2014 (11.2) Interest Expense on Debt (11.2) Bank Debt 0.1 Interest Income 4.2 Other (6.9) Interest Expense, net (2.1) Charges (0.5) Fees (1.6) Other Charges (9.0) Net Financial Expense (21.7) Interest Expense on Debt (21.7) Bank Debt 0.1 Interest Income 4.9 Other (16.7) Interest Expense, net (3.9) Charges (2.5) Fees (1.4) Other Charges (20.6) Net Financial Expense 36

37 Leverage ratio performance Contractual covenants old loan Contractual covenants new loan Actual proxy * Jun 2013 Dec 2013 Jun 2014 Dec 2014 Jun 2015 Dec 2015 Jun 2016 Dec 2016 Jun 2017 Dec 2017 Dec 2018 * Actual proxy is calculated using the definitions set in loan agreement (Net Debt/Cash EBITDA) 37

38 Net invested capital As of and ( m) 30/06/ /12/2014 Change Goodwill Other intangible assets (3.7) Property, plants and equipment Financial assets (1.6) Non-current assets 1, , Working capital (152.8) (99.9) (52.9) Other non-current non-financial assets and liabilities (72.8) Net invested capital 1, ,455.7 (56.9) Net Financial Position (32.9) 38

39 WORLD DUTY FREE GROUP AFRICA AMERICAS ASIA EUROPE