Benefiting From Travel Retail's Growth Trends
Dufry has a solid equity story which focusses on returns and cash generation, while following a long-term profitable growth strategy to create sustainable value for shareholders and bondholders.
Raising interest to participate 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 for investing in Dufry. This, combined with our track record of growth and attractive risk profile based on our geographical diversification, makes Dufry an attractive investment opportunity.
With a market capitalization of CHF 6.8 billion as per December 31, 2016, Dufry is part of the Swiss Leader Index (SLI) on the Swiss Exchange, which includes the 30 biggest publicly listed companies in Switzerland. Throughout the year Dufry’s share price fluctuated between a high of CHF 135.10 and a low of CHF 93.05.
Dufry’s trading volume continued to be very healthy in 2016. Considering all major trading platforms, Dufry’s average daily trading volume was about CHF 56.2 million, which represents a daily trading of 1.0 % on free float. Of the different trading platforms, the most relevant one was SIX Swiss Exchange. The average daily volume of Dufry shares traded at SIX reached CHF 20.1 million in 2016.
Our long-term anchor shareholders group continued its commitment to the company and held 19.5 % of our share capital at year-end 2016, only slightly changed as compared to 31 December, 2015. Consequently, at the end of the reporting period 2016, the free float of our shares amounted to 80.5 %, translating into a free float of CHF 5.4 billion (over CHF 5.1 billion at year-end 2015). Key institutional shareholders in Dufry include GIC, QIA, and Temasek, all of which became shareholders in 2015. In 2016 again, we experienced a further diversification of our shareholder base and a large part of our institutional shareholder base is located in the United Kingdom, United States, Switzerland, Singapore, Qatar and Brazil.
Delivering the synergies from the Nuance and World Duty Free acquisitions
The value creation from mergers and acquisitions is based on our ability to deliver synergies when integrating the target companies. With the last two transformational acquisitions, Nuance, acquired in 2014, and World Duty Free, in 2015, we expect to deliver a total of CHF 175 million of additional EBITDA.
Delivery of synergies is fully on track.
As to the Nuance synergies, these were fully reflected in the 2016 financials, and include efficiencies at both cost and gross profit margin level to an amount of CHF 70 million as previously announced.
The integration of World Duty Free, which had already started at the beginning of 2016 resulted in the delivery of more than half of the planned World Duty Free synergies, of which CHF 49 million were cost synergies, in the 2016 financials. The remaining synergies, which will complete the announced and confirmed synergies to a total of CHF 105 million, will build up quarter by quarter and be reflected in the full-year financials of the 2017 business year.
Reducing debt and lowering financing costs
Our capability to generate sustainable free cash flows has allowed us to reduce our net debt by CHF 205.6 million in 2016.
Net debt reduced by CHF 206 million.
As a result, as per December 2, 2016, we exercised the early call option to repay the USD 500 million Senior Notes with maturity in 2020. The early repayment has been financed through a combination of available cash and a drawdown on the existing revolving credit facility. Dufry will thus save in excess of CHF 80.0 million in interest costs, which would have accrued during the remaining life-time of the bond.
Strong fundamentals – solid investment for bondholders
Ever since the first issuance of a bond in 2012, Dufry has been a well-established investment opportunity in the senior notes market, which still represents an important source of financing for the company. Our low operating leverage and the strong cash flow generation are characteristics welcomed by the fixed income market.
With bank credit facilities totaling CHF 2,430 million maturing in 2019 (denominated in USD, EUR, CHF and GBP); the EUR 500 million 4.5 % Senior Notes maturing in July 2022 and the EUR 700 million 4.5 % Senior Notes maturing in August 2023, Dufry has a well-balanced financing structure. All maturity dates of the financial debt are spread across a time horizon between 2019 and 2023.
Dufry’s Senior Notes are currently rated by Standard & Poors (BB), Fitch (BB-) and Moody’s (Ba3).
Committed to a fair and comprehensive market communication
As the world’s only “pure play” opportunity to invest in travel retail as well as being the undisputed industry leader, we strive to present our investment story and market opportunities by providing transparent and consistent up-to-date information to all our stakeholders. 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 2016 Investor Relations activities, senior management and the Investor Relations team devoted 29 days to meeting investors directly through roadshows and conferences in Europe and Asia as well as North and South America, during which we met over 500 investors in one-to-one or group meetings. Apart from meetings, the Investor Relations team answered over 600 calls and emails in 2016.
For contact details of our Investor Relations team, located in Switzerland and Brazil, please go to the contacts section in the right hand corner of this webpage.
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More about Dufry
Learn more about the Dufry group in more depth:
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.
2017 Annual Results
2018 Ordinary General Meeting
First Quarter 2018 Results
Second Quarter 2018 Results
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.