Dufry operates in an industry that has shown solid and resilient growth in the last decades – and which is expected to continue to grow going forward. According to Generation Research, a travel retail market research specialist, the travel retail industry had a market value of USD 79 billion dollars in 2018, a 13 % increase on 2017, and it is expected to reach USD 116 billion in 2023.

Within this prospective business environment, Dufry follows a strategy of sustainable and profitable growth – see also our focus story – in order to secure a sustainable development for the company and all its stakeholders.

Creating the best shopping experience

2019 has been a key year for Dufry for establishing solid foundations for the future business. The two main programs that Dufry rolled-out and adopted during 2018 and 2019 – our unified way of operating the business (Business Operating Model) and the cultural transformation program ONEDUFRY – together with the digitalization of our operations and refurbishment of over 41,600 m2 of our retail space in 2019 alone, has enabled Dufry to start a new growth phase rooted in the core of our business: retailing.

In renewing its stores Dufry pays special attention to creating a strong sense of place, linking the shopping environment to the country’s cultural heritage, where they are located. The powerful combination of stateof- the-art store designs with local motifs, together with a curated selection of local products on offer that are acquired from local suppliers, results in unique shopping spaces that enable customers to experience a full cultural immersion in the destination.

As the leading travel retailer and as reflected in our corporate brand statement, WorldClass.WorldWide, our ambition is to create the best possible shopping environments to capture the interest of travelers and to generate selling opportunities. That’s what has to be the main pillar of our future growth. We closely cooperate with airport authorities and brand suppliers for store design, passenger flows and allocation of commercial space. This collaborative work results in improved passenger services, as well as more visibility and opportunities for brands. Testament to this collaboration, and just as a remarkable example, is Heathrow Airport in London, where Dufry operates a large proportion of the stores. In 2019 again, Dufry’s retail offer in Heathrow has been recognized by Skytrax, winning the accolade for Best Airport Shopping in the world for the tenth consecutive year. Milan Malpensa, where Dufry has operated stores for years, was also in the Top 10 of this award, which began in 1999 and the 2017 – 2018 edition of the Skytrax award survey gathered the opinion of over 13.73 million airport users. For the more detailed aspects related to our customer services and approach, please refer to the Customer Section.

Excellence in retailing

In 2019, we have consolidated our commitment towards digitalizing our shopping experience. We continued increasing the number of “New Generation Stores” – a digitalized shopping environment that enables Dufry to showcase its 360˚ Digital Strategy by making extensive use of digital technology – to elevate customer engagement to the next level. This facilitates the communication with the most relevant nationalities of passengers in their own language and addressing the individual preferences of the different profiles. In 2019, Dufry inaugurated New Generation Stores in Buenos Aires, Amman, Alicante and Malaga, taking the total number to 13.

The digitalization process within the stores however is not restricted to New Generation Stores and in 2019 we have seen a significant increase in the use of in-store digital tools, with the adoption of Sales Tablets in many of our operations (111 locations in 30 countries, mainly in duty-free and larger departure walk through stores). Sales tablets enable staff to give our customers a more personalized shopping experience, adjusting the offering to their specific preferences and needs. They also provide our staff with additional product information and details of additional products to complement or enhance the purchase of our customers. A further level of customization of our service is achieved when tablets are used in conjunction with other Dufry digital services, like RED by Dufry. This is the company’s loyalty program (available in 236 locations across 46 countries) that allows Dufry to understand customer’s preferences and engage in a conversation with them before they even get to the airport, by providing information relevant to the customer – connected to their airport of departure and featuring a curated selection of offers adjusted to that customer’s profile. Reserve & Collect is another component of Dufry’s digital marketing strategy. It’s a service available in 170 locations in 44 countries, which allows our customers to plan their shopping ahead of their trips.

Superior customer service however is not only achieved through the use of the latest technologies and engaging in-store communication. In 2019, Dufry started a comprehensive program – called Retail Excellence – which involves revisiting what we do in store, with the sole objective of enhancing our customer service through a more effective interaction with our customers. This program includes a number of operational initiatives including empowerment of teams through strong leadership, staff planning and improvement of our salesforce capabilities.

Industry recognition

Our ongoing goal to develop state-of-the-art shopping environments and new services is also being recognized by the industry and sets new standards. Today, Dufry has a proven track record in delivering successful shopping concepts, specialized stores and marketing activations and some of the latest awards gained by Dufry include the 2018 and 2019 Moodie Davitt Report’s Dreamstore Award for both our Collection and Sunglasses stores in Heathrow Terminal 5. The coveted Dreamstore award is based on ratings of the world’s travel retailers by the world’s brand owners.

Also this year, our Zurich Airport team was awarded the “Best Dedicated Sunglasses Sales Team” in the Sunglasses Vision 2020 & Awards. This category initiative is co-sponsored and judged by leading sunglasses suppliers and it aims to “reward excellence in sunglasses retail, shining the spotlight on the most progressive travel retailers in one of the channel’s consistently fastest- growing categories”. Also in Zurich, Lindt & Sprüngli Travel Retail and Dufry’s new Chocolate Boutique was awarded in the 2019 DFNI Awards in the category “Best New Store”.


A detailed list of the awards won during 2019 is available under www.dufry.com/en/company/our-awards

Stakeholder Value Allocation by Dufry in 2019

 The stakeholder value allocation corresponds to corporate output less third-party inputs. The calculation is based on Dufry’s EBIT plus personnel costs. It does not comprise of values allocated to business stakeholders, such as suppliers and landlords.

The value allocated reached CHF 1,676.1 million in 2019 (CHF 1,544.4 million in 2018). Out of this amount, CHF 1,243.3 million was accrued to our employees in form of remuneration and social security payments. CHF 348.7 million were interest expenses as payments to our bondholders and lending banks. Income taxes to public authorities and communities in which the group companies are located amounted to CHF 78.2 million. In 2019, the Board of Directors proposed to the Annual General Meeting 2019 the payment of a CHF 4.00 dividend per registered share for the 2018 business year, resulting in a total amount of CHF 199.8 million returned to shareholders. Further details of the dividend strategy can be found here.

Anti-corruption and anti-competitive behavior

Corruption is a worldwide phenomenon, which is considered to be the cause of many negative economic, social and environmental impacts. From a business perspective, corruption distorts the functioning of the market and undermines governance institutions and in general, the rule of law.

The subject of corruption is of considerable importance to Dufry as the Company expands its operations to many countries with elevated corruption levels and participates in many public procurement processes to bid for airport, seaport and other concessions around the globe each year.

Dufry prohibits bribery and corruption at all times and in any form. We believe that in order to remain a solid business leader, all business must be conducted ethically and in full accordance with all applicable laws, rules, and regulations. Dufry requires all of its employees, officers and directors to behave at all times with honesty, ethics and within the confines of applicable law and in full compliance with Dufry’s Code of Ethics, Sustainability and Integrity in Business Transactions Policy (“Code of Ethics”). Where laws, rules or customs exist that are different from the principles set out in the Code of Ethics, Dufry employees, officers and directors are required to follow whichever sets the higher standard in this regard.

Dufry also wants its employees, officers and directors to fully respect the safeguarding of integrity and fair dealing when performing their activities on behalf of Dufry and to promote the sustainability, diversity, decent work, human rights, zero tolerance to harassment and discrimination standards adopted by the Dufry Group as set out in the Code of Ethics.

Dufry’s Code of Ethics, outlines the types of conduct which are not permissible and imposes strict rules in relation to charitable contributions and sponsorships, as well as gifts, hospitality and entertainment expenses,and facilitation payments to minimize the risk of corruption. In addition, the rules require careful due diligence to be conducted on external partners Dufry is working with, including a procedure that must be followed to vet all new joint venture partners, consultants for business development projects, counterparties to M&A transactions and other similar counterparties.

Dufry also conducts compliance training of employees, officers and directors, as applicable on an ongoing basis. These training sessions reflect the ongoing changes introduced in our Code of Ethics, Sustainability and Integrity in Business Transaction Policy. Dufry’s Compliance Department regularly evaluates the content of Dufry’s training on Compliance and Corporate Policies. The efforts of the Compliance Department are fully coordinated with, and supported by, the CEOs of each Division and the respective HR departments, who help identify the individuals, including new hires, who should receive the training.

Dufry properly investigates all complaints and prohibits retaliation or discrimination against any employees, officers and directors who report a concern made in good faith. Since 2018, two new Group-wide reporting channels have been initiated to go alongside the email reporting channel compliance@dufry.com: (1) a worldwide, toll-free hotline in 9 languages (English, Spanish, Portuguese, French, Italian, Mandarin, Russian, Greek and German) also accessible via local dial-in numbers for all countries in which Dufry operates; and (2) the online reporting website www.dufry-compliance.com. These reporting channels, run by an independent third party, ensure the integrity of such investigations by acting as a centralized contact point through which any wrongdoing or corruption concern can be reported directly to the Compliance Department for further investigation. Unless the report is made anonymously, the identity of any employees, officers and directors reporting such concerns or possible violations of Dufry’s Code of Ethics is kept strictly confidential, unless the disclosure of the identity is required by law.

Approximately 5,000 managers have been trained in total since the training started in 2012, most of them more than once. These individuals have been selected based on the following criteria:

  1. Community heads at Headquarters (Finance, Treasury, Procurement, Business Development, Internal Audit, HR, IT, Commercial, Marketing, Customer Service);
  2. Heads of all Divisions;
  3. Local managers with exposure to business development, external partners and third-party contractors;
  4. Managers with exposure to procurement negotiations;
  5. Managers with exposure to government officials such as airport authorities, customs or other public authorities;
  6. Managers with signatory power or appointed as directors or officers of a Dufry Group subsidiary;
  7. Investor Relations managers;
  8. Members of the Legal and Governance Department;
  9. Members of the Internal Audit Department, Loss Prevention and ERM department;
  10. HR managers worldwide.

During 2019, over 900 managers at Headquarters and across all Divisions have completed this training.

Dufry employees, who are not included in the list above, are familiarized with Dufry’s governance and corporate policies via a series of videos available through  various internal channels, including the Group’s intranet – Dufry Gate, the learning management system; Dufry Connect and its in-house television channel Dufry TV, among others. New employees, officers and directors are provided with a copy of the Code of Ethics when they join Dufry and are required to acknowledge acceptance of its terms in writing. Additionally, Dufry employees, officers and directors have access to all of Dufry’s compliance and corporate policies, including its Code of Ethics on Dufry Gate for their reference.

Monitoring and control

Dufry adopts a risk management model based on three levels. This model is applicable to all subsidiaries of the Group. The company is supported by an Enterprise Risk Management software tool called GRC (Governance, Risk and Compliance) that allows a comprehensive identification and management of potential risks that may affect the business.

First level – The commitment of Dufry and all its subsidiaries with integrity and transparency begins with its own staff. Dufry requires all its employees, officers and directors to act at all times in accordance with the provisions of the Code of Ethics. The latter describes the types of behavior that are not allowed and imposes strict rules regarding the operation of the business.

In addition, the rules require each employee, officer and director to perform due diligence and carefully assess new external partners with whom Dufry is working, including a procedure to be followed to examine all new minority partners, consultants for business development projects, partners for transactions & M&As and similar counterparts.

Second level – There are different governance functions across the organization including the Compliance, Legal, Finance and Human Resources departments in charge of monitoring the main risks and establishing the most appropriate controls to mitigate, as well as ensuring compliance with the policies and procedures of the group. The scope of the Compliance and Corporate Governance function is based on the following pillars:

  • Review and compliance with the set of global company policies
  • Establishment of the overall framework of approvals of the group and establishing a policy of “four eyes” for validations
  • Training, both for the members of the staff identified with greater exposure to risk and for the rest of the employees
  • Global corporate risk management
  • Creating internal communication channels to ensure the integrity of the compliance program

Third level – The Group’s Internal Audit provides independent and objective monitoring and consulting services designed to add value and improve the operations of Dufry. This function covers all subsidiaries and applies a systematic and disciplined approach to evaluate and improve the effectiveness of governance processes, risk management and control, including the possible commission of fraud and how the organization manages fraud risk. The main risks identified in the course of internal audits are reported to senior management and the Audit Committee of the Board of Directors, and its status is updated periodically until resolution or acceptance by the governing bodies.

Economic Dimension

Economic-Dimension
  • Create a sustainable and profitable company.
  • Foster customer satisfaction and shopping experience to trigger their recognition.
  • Support local economies by buying local goods and services, paying local taxes and employing local staff.

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Environmental Dimension

Environmental Dimension
  • Minimize our environmental impact by operating an integrated and efficient logistics chain to transport products.
  • Reduce our waste and energy consumption.
  • Support our landlords in their initiatives to protect the environment.

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Social Dimension

Social Dimension
  • Maintain quality work environments for our employees.
  • Responsible procurement practices.
  • Support the communities in which we live and work.

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Social Dimension

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