Benefiting From Travel Retail's Growth Trends
Since its listing in 2005, Dufry has been a solid equity story, focusing on achieving its target returns and cash generation. Dufry’s long-term profitable growth strategy aims 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 of Dufry’s investment case. This, combined with our track record of growth as well as attractive risk profile based on our geographical diversification, makes Dufry an attractive investment opportunity.
With a market capitalization of CHF 7.8 billion as per December 31, 2017, 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 127.00 and after reaching a high of CHF 171.40 in May, closed 2017 at CHF 144.90, representing a 14.1% performance in 2017.
Dufry’s trading volume continued to be very healthy in 2017. Considering all major trading platforms, Dufry’s average daily trading volume was about CHF 86.7 million. The SIX Swiss Exchange remains our most important trading platform, where Dufry shares’ average daily volume reached CHF 35.6 million in 2017.
Our long-term shareholders, such as Travel Retail Investments and Qatar Investment Authority, as well as Richemont and Norges Bank who joined in 2017, represented around 35% of our share capital and continue to support Dufry. With respect to the participation of HNA, they fully hedged their investment through a derivatives structure (collar) according to official disclosures. It is our interpretation that as a result HNA have – at the time of their latest public disclosure on February 14, 2018 – no material economic exposure to Dufry anymore.
Dufry’s free-float is balanced, with shares being held by institutional investors in the most important countries such as the United Kingdom, United States, Switzerland and Brazil.
Synergies of the World Duty Free acquisition delivered
In the context of the integration of World Duty Free, which we had successfully completed in 2016, we saw the full synergies of CHF 125 million reflected in the 2017 financials. This is a considerable achievement and exceeds our original expectation by 20%.
Synergies fully delivered.
This positive result has been achieved through the indepth knowhow of our integration teams and their focused approach to thoroughly and continuously analyze the potential during the integration process.
Refinancing of main credit lines
Dufry has refinanced all its main credit lines, in the period from December 2016 to December 2017.
Dufry early repaid two Senior Notes: in December 2016, its USD 500 million Senior Notes expiring in 2020 and in November 2017, the EUR 500 million Senior Notes expiring in 2022. While the repayment of the first bond was done with cash generated, the second was re-financed through the issuance of new EUR 800 million Senior Notes in October 2017.
Dufry also successfully refinanced its main bank credit facilities of CHF 3.4 billion. The new structure provides for an extended maturity profile, with both the term loans and RCF expiring in 2022 compared to the old facility expiring in 2019. The new bank financing structure also comes with better conditions when compared to the former and the main covenant (net debt / adjusted EBITDA) is 4.00x throughout the lifetime of the facility, compared to 3.75x in the previous facility.
These re-financing transactions put together generate an interest cost reduction of around CHF 50 million per annum, of which half has been accrued in 2017 and the other half will be accrued in 2018.
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.
Long-term financing in place.
With bank credit facilities totaling CHF 3.4 billion maturing in 2022 (denominated in multiple currencies); the EUR 700 million 4.5% Senior Notes maturing in 2023 and the EUR 800 million 2.5% Senior Notes maturing in 2024, Dufry has a long-term financing structure in place.
Dufry’s Senior Notes are currently rated by Standard & Poors (BB) and Moody’s (Ba2).
Committed to a fair and comprehensive market communication
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 2017 Investor Relations activities, senior management and the Investor Relations team devoted 28 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 400 investors in one-to-one or group meetings. Apart from meetings, the Investor Relations team answered over 400 calls and emails in 2017. 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.
Baader Bank Investment Conference - Munich
Bernstein Strategic Decisions Conference - London
Third Quarter 2018 Results
2018 Annual 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.