Participating in the Growth of Travel Retail
Since its listing in 2005, Dufry has executed a consistent strategy focusing on profitable growth and cash generation to create sustainable value for shareholders and bondholders alike. In the first phase, the company accelerated growth through acquisitions, and more recently shifted towards a more organic growth profile.
Pure-player in the fast-growing travel retail channel
The strong fundamentals of the travel retail industry–fueled by a resilient long-term global passenger growth – are a cornerstone of Dufry’s investment case. This, combined with our track record of growth as well as an attractive risk profile based on our geographical diversification, makes Dufry a compelling investment opportunity. For a detailed view on Dufry’s investment case please click here.
Over CHF 600 million returned to shareholders.
Capital allocation and dividend strategy
In 2018, Dufry revised its capital allocation and dividend strategy. In this context, the company paid a dividend of CHF 3.75 per share for the 2017 business year, equal to a total of CHF 198.7 million. Going forward, Dufry intends to pay out a dividend of at least the same amount as in the previous year and target 40% of cash earnings. Moreover, in 2018 the company executed a share buyback program, early completed end of October, in which 3,304,541 Dufry shares were bought in the market for an amount of CHF 401.9 million in total. In 2018, Dufry has thus returned CHF 600.6 million to its shareholders.
Member of the Swiss Leaders Index
With a market capitalization of CHF 5.0 billion as per December 31, 2018, Dufry is part of the Swiss Leader Index (SLI) on the SIX Swiss Exchange, which includes the 30 biggest publicly listed companies in Switzerland.
Dufry’s share price started the year at CHF 145.15 and after reaching a high of CHF 153.00 in January, closed 2018 at CHF 93.12.
Dufry’s trading volume continued to be very healthy in 2018. Considering all major trading platforms, Dufry’s average daily trading volume was approximately CHF 101.4 million. The SIX Swiss Exchange remains our most important trading platform, where the average daily volume of Dufry shares reached CHF 37.2 million in 2018.
Our long-term shareholders, in particular Travel Retail Investments, Qatar Investment Authority and Richemont, represented 38% of our share capital and continue to support Dufry. We also saw former investors renewing their participation during 2018, such as GIC Singapore, and we welcomed new large shareholders, such as Franklin Mutual, both disclosing above 5 %.
Dufry’s free-float is well balanced, with shares being held by institutional investors in the most important investor countries such as the United Kingdom, the United States, and Switzerland.
Termination of the Company’s secondary listing in Brazil
Dufry has had a secondary listing on the Brazilian stock exchange B3 (former Bovespa) since 2010. Through Brazilian Depositary Receipts (BDRs), Dufry was an attractive equity opportunity in the local Brazilian market, as it provided South American investors a convenient alternative to invest in a global company such as Dufry. At its highest levels, the BDRs represented close to 27% of Dufry’s share capital.
Due to the reduced number of BDRs and low trading volumes, Dufry decided to cancel its listing on B3. The process, which was executed in the second half of 2018, was successfully concluded in December.
Strong fundamentals – solid investment for bondholders
Since the issuance of its first senior note in 2012, Dufry has been a well-established investment opportunity in the bond market, and this represents an important source of financing for the company. Our low operating leverage and the strong and resilient cash flow generation are characteristics welcomed by the fixed income market.
Long-term financing in place.
Dufry has bank credit facilities in place totaling CHF 1,250 million maturing in 2022 and CHF 1,500 million maturing in 2023 (denominated in multiple currencies); as well as senior notes, EUR 700 million 4.5 % maturing in 2023, and EUR 800 million 2.5% maturing in 2024. With this solid long-term financing structure, Dufry has no debt maturity before 2022.
Dufry’s Senior Notes are currently rated by Standard & Poors (BB) and Moody’s (Ba2).
Committed to fair and comprehensive market communication
We are committed to open and transparent communications with the financial market to present our investment story and opportunities. We pursue a constant, open dialogue with investors, analysts and the media through direct phone and email exchanges, regular roadshows and one-to-one meetings.
Senior management presents and discusses financial performance on a quarterly basis and we provide the financial community and media with in-depth reports and information through press and analyst conferences, conference calls and webcasts.
As part of our 2018 Investor Relations activities, senior management and the Investor Relations team devoted 36 days to meeting investors directly through roadshows and conferences in Europe as well as in North and South America, during which we met more than 520 investors in one-to-one or group meetings and many more in presentations. Apart from meetings, the Investor Relations team answered around 650 calls and emails in 2018. This results in a total of about 1,200 contacts with investors and analysts, an increase of 33 % compared to the previous year. For contact details for our Investor Relations team, located in Switzerland and Brazil, please go to the contacts section in the right hand corner of this webpage.
IFRS16 and its impact on Dufry’s financials
Starting in 2019, Dufry will adopt the new International Financial Reporting Standard IFRS 16 (effective as of January 1, 2019), which will substantially affect the accounting of concession and rental agreements.
Given Dufry’s retail nature and the fact that it does not own the real state where it operates, IFRS 16 will therefore result in significant changes to Dufry’s financial statements.
The topic was presented at Dufry’s Capital Markets Day in May 2018. Since then, the company has been updating the market on new developments and indications regarding the expected impacts on the financial statements. Dufry intends to host a further Capital Markets Day in the second quarter of 2019 to keep the market updated on the different reporting implications and on the KPIs that the company will use going forward.
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More about Dufry
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Dufry will attend and be represented at the conferences and exhibitions related to the travel retail industry listed below. We are looking forward to meet you there.
Third Quarter 2019 Results
ZKB Conference - Zurich
Credit Suisse Small & Midcap Conference - Zurich
Bank of America Conference - Paris
Retail Brands Our Retail Brands
You may know of Dufry through one of our many other retail brands. If you would like to connect directly with one of these, please see the below links to our entire portfolio.