AUTOGRILLGROUP TRAVEL RETAIL & DUTY FREE · 2019. 2. 2. · Not for release publication or...
Transcript of AUTOGRILLGROUP TRAVEL RETAIL & DUTY FREE · 2019. 2. 2. · Not for release publication or...
Not for release publication or distribution directly or indirectly in or into the United States, Canada, Australia or Japan
AUTOGRILL GROUP
TRAVEL RETAIL & DUTY FREE
INVESTOR DAY
Tuesday
10th September 2013
Sofitel London Heathrow
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contained in the Documento Equivalente (or similar disclosure document) produced in connection with the offering of the Securities. Prospective investors are required to make their own independent investigations and appraisalsof the business and financial condition of the Company and the nature of the Securities before taking any investment decision with respect to the Securities. The Documento Equivalente (or similar disclosure document) maycontain information different from the Information.
The Information has been prepared by and is the sole responsibility of Autogrill and the Company. Banca IMI S.p.A., Merrill Lynch International Milan Branch and Banco Santander, S.A. (the “Managers”) acting in connection withthe listing of the Securities are acting exclusively for the Company and no one else, and will not be responsible for providing advice in connection with the Information to any other party. Subject to applicable law, none of theManagers accepts any responsibility whatsoever and makes no representation or warranty, express or implied, for the contents of the Information, including its accuracy, completeness or verification or for any other statementmade or purported to be made in connection with the Company and nothing in this document or at this presentation shall be relied upon as a promise or representation in this respect, whether as to the past or the future. TheManagers accordingly disclaim all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred above) which any of them might otherwise have in respect of the Information or any such statement.
Forward-Looking Statements
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All forward-looking statements included herein are based on information available to the Company as of the date hereof. The Company undertakes no obligation to update publicly or revise any forward-looking statement, whetheras a result of new information, future events or otherwise, except as may be required by applicable law. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf areexpressly qualified in their entirety by these cautionary statements.
WDFG IS READY TO TAKE OFF
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Jose María Palencia Saucedo
CEO
THE WDFG TEAM WITH YOU TODAY
Jose María Palencia Saucedo CEO
Sarah BranquinhoBusiness Relations & External Affairs Director
Isabel ZarzaStrategy & Corporate Development Director
Fernando NadalCorporate Infrastructure Director
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Eugenio AndradesChief Commercial Officer
Daniel MonteroOperations Director, Spain
Fred CreightonOperations Director, UK/NA
Pedro CastroOperations Director, International
David Jiménez-BlancoGroup CFO
Pablo BasFinance Director
WDFG: A GLOBAL TRAVEL RETAIL LEADER
CANADAUNITED KINGDOM
GERMANY
20 Countries
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Source: WDFG, H1 2013 data(1) Not including 53 stores in Turkey at historical and cultural sites. Including HMS Host Retail (US). Defined as the sum of 519 shops at the 101 airport locations and 42 shops at historical and cultural sites.
JAMAICA
MEXICO
PANAMACURAÇAO
PERUBRAZIL
CHILE
ITALYSPAIN
CAPE VERDE
SAUDI ARABIA
JORDANKUWAIT
INDIA
SRI LANKA
UNITED STATES
TURKEY101 Airports
561 Shops(1)
ENVIABLE PORTFOLIO LENGTH
<5 Years 6% High historical retention rate (96%
(2))
UK(3) airports “safe” until 2023 (2020+3 year extension)
Average Length: 8+ Years(1)
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5-10 Years 34%>10 Years
60%Successfully renewed Spanish concessions until 2020
Source: WDFG(1) Pro-forma: 2012 average FX – Cumulated sales over the contract length - 2012 actual sales - 2010 as Spanish contract expiration and 2023 as WDFE Ltd. contracts. Including HMS Host Retail (US)(2) Average 2009-2012(3) WDFE Ltd. airports
Revenue (€m)
1,675
1,821
2,002
2010 2011 2012
A SOLID FINANCIAL BUSINESS MODEL
88% 89% 89%
Cash Generation and Conversion(1) (€m)
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194
228
262
11.6%12.5%
13.1%
2010 2011 2012
7
EBITDA (€m)
Source: WDFG(1) Cash generation defined as EBITDA - CapEx. Cash conversion defined as (EBITDA - CapEx) / EBITDA(2) Growth in sales, adjusted for new or divested businesses (i.e. assuming a constant perimeter)
170203
234
2010 2011 2012Cash ConversionEBITDA - CapExEBITDA Margin
A GLOBAL LEADER WITH PROVEN TRACK RECORD
Leading Global Travel Retailer
2Experienced Management
Team
6
Attractive Industry Dynamics
1
An Exciting Path Ahead
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Proven, Highly Efficient Business Model
4
Enviable Portfolio Length
3A Solid Financial Business Model
5
A PROVEN BUSINESS MODEL IN AN ATTRACTIVE INDUSTRY
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Sarah Branquinho
Business Relations & External Affairs Director
Eugenio Andrades
Chief Commercial Officer
TRAVEL RETAIL IS A SIZABLE AND NICHE MARKET
Travel Retail Market Evolution (1)
$49.4bnStructural • Concession awarded business
•
Different from Traditional RetailA ca. $50bn Market in 2012
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(1) Source: Generation AB 2013
$29.0bn
$34.5bn
2006 2009 2012
Motivational
• Travel is the primary purpose
• Travellers need to be instantly "captured" in short
dwell-time and converted into “customers”Customer
Profile
Operational• 24/7, 365, international customer base
• Operational expertise is key
TRAVEL RETAIL IS RESILIENT
40
50
60
Foot & Mouth 9/11
EU Expansion
Abolition of Intra EU Duty Free
2nd Gulf War
SARS
New rules on Liquids,
Aerosols,and Gels Swine Flu
$bn
EyjafjallajökullAsh Cloud
Global Economic Crisis & Downturn
+6% p.a.
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0
10
20
30
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Asian Economic Crisis
Source: Generation, IATA
Annual Sales
TRAVEL RETAIL IS DOMINATED BY THE AIRPORT CHANNEL
Ferries & Sea Shops
Airlines & Inflight
5%5%
Airport Revenue
Other(2)
Non Aeronautical Revenue (48%)
Aeronautical Revenue (52%)
Travel Retail is an Important Source of Revenue for Airports Airports are the Most Important Travel Retail Channel
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Airports
Other Shops & Sales 61%
29%Retail + F&B
Car Services
~25%
~20%
~55%
100% = $56bn(1)
Source: Generation AB 2013, WDFG(1) 2009 WDFG estimate, excluding Middle East(2) Includes property real-estate (14%), subsidies and advertising (9%), other revenues from asset divestment, fuel concessions, interest, security, utility charges, service provisions and ground transport (30%)
2012 BREAKDOWN ($32.6BN)(1) DRIVERS WDFG POSITION
● Europe: target region for
Asia/Americas high spenders
● Asia: increasing intra-regional
● WDFG generates 25% of total
Europe Airport Retail sales
Asia Americas
MEA
37%
9%
EUROPE AND ASIA ARE THE MAIN REGIONS IN AIRPORT RETAIL
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● Asia: increasing intra-regional
travel and disposable income
● Americas: increasing pax flows
between North America and
LatAm
● 78% of WDFG sales from Europe
● Of the 78% of sales generated in
Europe by WDFG, over 50% are
made to non-EU destinations
Asia
Europe
Americas21%
33%
37%
13
Source: Verdict, Airport Retail Note: MEA includes Middle East and Africa(1) Airport Retail
Top 3 Airport Retailers by Region and by Revenue (2011)
#1 in Europe
WDFG ENJOYS A LEADING POSITION IN TRAVEL RETAIL (1/2)
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Europe
Asia Pacific
Americas
Middle East & Africa
1. WDFG2. Heinemann3. LS Travel Retail
1. Lotte2. Aer Rianta3. DFS1. Dufry
2. The Nuance Group3. DFS
1. Dubai DF2. Heinemann3. Dufry
Source: Verdict, Global Airport Retailing, December 2012.
2.5
3.0
#2 Worldwide
Top 10 Airport Retailers by Revenue (2011)
WDFG ENJOYS A LEADING POSITION IN TRAVEL RETAIL (2/2)
$bn
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0.0
0.5
1.0
1.5
2.0
15
Source: Verdict, Global Airport Retailing, December 2012. 2011 Data. EUR/USD = 1.3924
#1 #3 #4 #5 #6 #7 #8 #9 #10
INCREASING SPEND PER HEAD
AIRPORT RETAIL HAS DELIVERED SOUND GROWTH
$25.6bn
$29.6bn
$32.6bn
Airport Retail Sales
$5.7
4.9bn5.2bn
5.4bn 5.7bn
2009 2010 2011 2012
POSITIVE EVOLUTION OF GLOBAL PASSENGERS
x
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$22.9bn
2009 2010 2011 2012
Source: ACI, Verdict
$4.8$5.0
$5.5$5.7
2009 2010 2011 2012
TRAVEL RETAILER EXPERTISE, CAPITALISING ON
� Consumer mindset (traveller vs. shopper)
� Increasing disposable income
� Desire for new and exclusive
� Appetite for authentic brands
x
AIRPORT RETAIL IS SET TO CONTINUE GROWING
$36.1bn
$40.0bn
$44.5bn
$49.7bn
Number ofPassengers
CAGR 12-16+4.8%
Airport Retail Sales
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$32.6bn
2012 2013 2014 2015 2016
Spendper Passenger
CAGR 12-16+6.0%
Source: ACI, Verdict
TRAVEL RETAIL SECTOR OFFERS SIGNIFICANT OPPORTUNITIES TO BE EXPLOITED
Clear Objectives
● Drive growth
● Maximise returns from current portfolio
A
WDFG has the Right Business and Commercial Model to Capture these Opportunities
Growth�
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● Maximise returns from current portfolio
Best-in-Class CapabilitiesB
A Business Model That Delivers
Resilience�
Profitability�
Source: WDFG
DRIVE GROWTH THROUGH 3 KEY LEVERS
Airports Brands
A
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Customers
Provide the Best Brands in a Great Accessible Environment
WDFG STRONG CURRENT ASSET PORTFOLIO
(1)101€2bn 9.3%Sales in 2012 2010-2012 CAGR Airports
A
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600mEstimated customer base
Source: WDFG
MAXIMISE RETURNS FROM CURRENT PORTFOLIO
Sizable Opportunity
1 Additional Customer for Every 100
+ c.€125mSales p.a.
A
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Source: WDFG(1) Basket refers to average WDFG customer’s purchase(2) ATV: Average Ticket Value
5% Increase ATV(2) + c.€100mSales p.a.
1 Additional Unit for Every 10 Baskets(1)
+ c.€80mSales p.a.
TRAVEL RETAIL SECTOR OFFERS SIGNIFICANT OPPORTUNITIES TO BE EXPLOITED
Clear ObjectivesA
WDFG has the Right Business and Commercial Model to Capture these Opportunities
Growth�
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Best-in-Class Capabilities
● Commercial excellence
● Customer engagement
● Partnership model
B
A Business Model That Delivers
Resilience�
Profitability�
Source: WDFG
COMMERCIAL EXCELLENCE
● Ability to develop and expand top
performing commercial concepts
(e.g. walk-through)
CategoryManagement
Retail Environment
Transformation
Global & Regional Commercial Structure
B
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● Global category management to
roll-out commercial best practice
● Effective supply chain and logistics
to optimise stock managementSupply Chain & Logistics
Global vs. Local Marketing
Weekly Trading
Source: WDFG
2012 BREAKDOWN ($32.6BN)(1) DRIVERS WDFG POSITION
● Airport retail is an important channel
for global brands
● 43% of WDFG sales from Beauty
● WDFG awarded “best-in-class” in 36%
9%
BEAUTY IS THE MAIN PRODUCT CATEGORY IN AIRPORT RETAIL
Beauty
Fashion & Luxury(3)
Other(2)
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● Showcase to cosmopolitan audience
● Beauty is the most important product
category
● WDFG awarded “best-in-class” in
Beauty segment at Heathrow(4)
● WDFG generates 11.5% of
global Beauty Airport Retail sales
36%
24%
31%
24
Alcohol & Tobacco
Source: Verdict, Airport Retail(1) Airport Retail (2) Including confectionary and fine foods (3) Includes the following categories as defined by Verdict: Jewellery & watches, Fashion & accessories, Other luxury (4) Including cosmetics, fragrances, suncare, skincare and other beauty essentials
48%
28%
PASSENGER TRAFFIC TRENDS IDENTIFY DIFFERENT CLIENTELE PROFILES
International Passenger Traffic by Destination
APAC and North America are Characterized by Domestic Flows
Europe Captures the Highest Share of International Passengers
38%
26%
Other(2)Other(1)
Europe
AsiaPacific
Domestic Passenger Traffic by Destination
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48%
24%
25
Source: ACI(1) Other includes North America, Middle East, LatAm / Caribbean and Africa (2) Other includes Europe, Middle East, LatAm / Caribbean and Africa
36%Asia Pacific
NorthAmerica
2016: 4.1bn
Total ‘12-‘16 CAGR: +4.8%
2016: 2.8bn
Total ‘12-‘16 CAGR: +5.1%
2016: 6.9bn
Total ‘12-‘16 CAGR: +4.9%
Total Global PassengersInternational Domestic
CUSTOMER ENGAGEMENT AT WDFG
Allowing for Customised Marketing
“Destination Targeting” for a Tailor-Made Commercial Offer and Communication
Experiential Marketing and Contentainment
B
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All Underpinned by Unparalleled Customer Service
A PARTNERSHIP BASED MODEL
Cooperation Transparency
Longer Term Agreements
Action Oriented Relationships
B
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Managing Shared Expectations
Alignment of Objectives
Data SharingPeople
Involvement
PROVEN TRACK RECORD
Spend per Passenger (WDFG) Gross Margin Evolution (WDFG)
6.7
6.97.0
€/pax
56.2%
58.0%
59.0%
%
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6.7
2010 2011 2012
A Business and Commercial Model that Delivers
2010 2011 2012
Source: WDFG
A PROVEN BUSINESS MODEL IN AN ATTRACTIVE INDUSTRY
In Travel Retail ...
Airports are the MostImportant Channel
Europe and Asia arethe Main Regions
Beauty is the Core Product Category! ! !
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Source: WDFG
WDFG is Very Well Positioned in This Sizable, Growing and Resilient Market
WDFG is Ready to Exploit Market Opportunities Leveraging its Proven Business Model, defined by:
Clear ObjectivesBest-in-class Capabilities� �
MAXIMISING PORTFOLIO GROWTH THROUGH OPERATIONAL EXCELLENCE
Fred Creighton
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Fred Creighton
Operations Director, UK/NA
Daniel Montero
Operations Director, Spain
Pedro Castro
Operations Director, International
KEY DRIVERS MAXIMISING PORTFOLIO GROWTH THROUGH OPERATIONAL EXCELLENCE
Focused on Driving Customer Service, Experience and SalesA
Delivering Consistent Profit Growth through Great Partnerships and Customer FocusB
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Delivers a Great Place to Shop and Work, Makes WDFG Partner of Choice and Maximises Returns
Continuous Improvement and Best PracticeC
Engaging People, to Ensure Great DeliveryD
WDFG OPTIMISES CURRENT SPACESA
Location Based on Customer Profile
Pioneers in Managing Walkthroughs� �
1 2
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Creating a Fantastic Retail Environment
Delivering Best Customer Service� �
3 4
LOCATION BASED ON CUSTOMER PROFILEA.1
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Barcelona, Spain
PIONEERS IN MANAGING WALKTHROUGHSA.2
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Cancun, Mexico
Palma de Mallorca, Spain
PIONEERS IN MANAGING WALKTHROUGHS
Jordan – Opened on 21st March ‘13
A.2
�PI: +8% vs prior year
�SPH: +23% vs prior year
�Drinks: +33% vs prior year
�Beauty: +26% vs prior year
Barcelona – Opened on 14th May ‘13
Examples Results
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�PI: +2% vs prior year
�SPH:+14% vs prior year
Gatwick – Opened on 21st July ‘12
�PI: +23% vs prior year
�SPH: +22% vs prior year
Jordan – Opened on 21 March ‘13
PI:Penetration Index SPH:Spend per Head
CREATING A FANTASTIC RETAIL ENVIRONMENTA.3
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DELIVERING BEST CUSTOMER SERVICEA.4
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CUSTOMER EXPERIENCE IS MAXIMISED AT WDFG
Destination Targeting ● Extensive Communication Capabilities
A.4
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Offer Based on Customer Profile
Seasonal Activities
Ramadan in UK 2013Louis XIII Cognac for Russian Passengers
Targeted Promotional
Activities
Examples Results
CUSTOMER EXPERIENCE TRANSLATES INTO RESULTS
UK – 2013 Chinese New Year
Chinese Passengers departing from UK
�Penetration: avg. YTD 74.2%
A.4
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Spain – 2013 Russian Passengers
Source: WDFG
Future Opportunities Will Increasingly Focus on Digital Communication and Brand Partners Participation
Russian Passengers departing from Spain
�Penetration: avg. YTD 49.6%
NEXT STEPS (1/2)
Stores in Airline Lounges�
A
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�
NEXT STEPS (2/2)
New Heathrow Terminal 2�On-line Technology�
A
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You have
entered a
virtual area.
Check our
special offers
and
promotions
High Level of Satisfaction from 34 Airport Partners
A PARTNERSHIP BASED MODEL
2.54.9 In-store Service
2.54.8 Understanding Pax Profile
We Excel in What Matters
B
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2.5
2.54.8 Delivering Consistent Growth
Source: WDFG
2.54.6WDFG Overall Rating
by UK Airports
Note: Ranking system based on a 1-5 scale, with 5 being the highest score
� Great retail spaces which enhance the airport
environment
� Highly regarded retailing capabilities which
effectively maximize return on space
� Optimal location of stores to access
passenger flow
� Ability to target passengers together
What Airports Offer to UsWhat We Offer to Airports
WDFG IS A PARTNER OF CHOICE FOR AIRPORTSB
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effectively maximize return on space
� Strong track record in delivering retail sales,
meaning higher concession fees for airports
� Highly flexible and adaptable organization
� Working together to develop the optimal
future lay-out
43
Future Opportunities Moving from Concessionaire to Partnership Model
96%
BENEFITS OF A PARTNERSHIP
Key Measures Examples The Future
● Spend per Head (SPH)
● Income per Passenger (IPP)
● Best practice and a consistent
approach
● Optimise joint planning and
targets
Concessions Renewal Rate(1)
B
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96%
44
● Partnership Survey
● Concession Renewal Rate
targets
● Trinity events driving sales /
innovation
Source: WDFG(1) Average 2009-2012
Retailer
Airports Brands
Customer
COMPELLING OPPORTUNITY DELIVERED THROUGH OUR PEOPLE
1 Additional Customer for Every 100
+ c.€125mSales p.a.
1 Additional Unit for + c.€80m
C
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Source: WDFG(1) Basket refers to average WDFG customer’s purchase(2) ATV: Average Ticket Value
5% Increase ATV(2) + c.€100mSales p.a.
1 Additional Unit for Every 10 Baskets(1)
+ c.€80mSales p.a.
OPTIMISING INVESTMENTS DRIVING SALES
● Right people, right place, right skills, right time�
● Manpower Planning Model delivers a proactive way to provide effective staff service
to match customer demand �
C
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Future Opportunities: Best Practice Across Group and Brand Partners
to match customer demand �
● Model supports Destination Targeting�
Source: WDFG
EFFECTIVE STAFF SERVICE TO MATCH CUSTOMER DEMAND
Manpower Allocation – Shop Level
Adjusted – Post-shift OptimisationOriginal – Pre-shift Optimisation
C
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1 2 3 4 5 6 7 8 9 10 11 1213 1415 1617 18 1920 2122 23 24
47
Source: WDFG
Staffing Customer Demand
Manpower Planning Models Resulting in Improved Service Level and Efficiency
1 2 3 4 5 6 7 8 9 10 11 1213 1415 1617 18 1920 2122 23 24
MANAGING SERVICE AT OUR TILLSC
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CSA’s / ConsultantsCustomer Service Leaders
Operations TeamReplen Manager / Admin Manager
Store Operations ManagerCategory ManagersStore Managers
CREATING A GREAT PLACE TO WORK
● Engaged colleagues
produce better financial
result�
CUSTOMERS
D
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Store Managers
Regional Manager
49
Future Opportunities: Best Practice Across Group on Tailored Policies / Processes
● We invest in developing
highly engaged
individuals and teams�
Source: WDFG
Customer ServiceTeam
Customer Support Team
BusinessPerformance
Team
Business Planning
KEY DRIVERS MAXIMISING PORTFOLIO GROWTH THROUGH OPERATIONAL EXCELLENCE
Focused on Driving Customer Service, Experience and SalesA
Delivering Consistent Profit Growth through Great Partnerships and Customer FocusB
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Delivers a Great Place to Shop and Work, Makes WDFG Partner of Choice and Maximises Returns
Continuous Improvement and Best PracticeC
Engaging People, to Ensure Great DeliveryD
AN EXCITING PATH AHEADIsabel Zarza - Strategy & Corporate Development Director
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Isabel Zarza - Strategy & Corporate Development Director
Fernando Nadal - Corporate Infrastructure Director
Pedro Castro – International Operations Director
CAPTURING FUTURE GROWTH
Organic Extensions
New Contracts
Like-for-Like Growth
Significant Untapped Potential
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Non-organic
New Contracts
Business Combinations
JVs
ENVIABLE RENEWAL TRACK RECORD
96%
Concessions Renewal Rate(1) Selected Examples
Vancouver, Canada
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Source: WDFG(1) Average 2009-2012
Jordan
Barcelona, Spain
Birmingham, UK
● Large regions
● Promising Growth Prospects17.4
3.9
23.2
12.4
12.2
10.6
Asia Pacific
Europe
FOCUS ON APAC AND EUROPE
Airport Retail Sales
$Bn 2012
CAGR
%
Airport Retail Sales
$Bn 2016
.Not for release, publication or distribution directly or indirectly in or into the United States, Canada, Australia or Japan. All unauthorised copying, dissemination or distribution of this presentation or part of it is strictly forbidden
11.1
10.2
9.5
49.7
4.1
10.1
32.6
2.8
7.0
Total
MEA
Americas
54
.Source: VerdictNote: APAC identifies Asia Pacific region. MEA includes Middle East and Africa.Airport Retail Sales bars for Total and APAC (the latter only in 2016) have been “cut” in scale for comparability purposes
Concessions Sales Breakdown by Region
$bn
TARGETING $8BN OF NEW CONTRACTS
1.01.5
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Source: Generation; WDFG; Moodie; Verdict.
~ $8bn of New Concessions, with Priority on Europe and Asia Pacific
$1.0bn Contract Value
4.0
0.5
1.0
1.0
Asia PacificMiddle East
Europe
LatAm
North America
0.0 1.0 2.0 3.0 4.0
#4
#3
WDFG
#1
SIGNIFICANT EXTERNAL GROWTH OPPORTUNITIES IN A FRAGMENTED SECTOR
Airport Retail Market Share Evolution%
Top Airport Retail Players$bn, 2011
Top 5 Players
19%Top 5
Players 35%
70%
80%
90%
100%
16.0
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Others
#10
#9
#8
#7
#6
#5
56
Source: VerdictNote: Market share evolution not pro-forma for M&A
Smaller Players
81%Smaller Players
65%
0%
10%
20%
30%
40%
50%
60%
2005 2011
Significant targetable market,
including mid-size opportunities
$16bn
WE UNDERSTAND AIRPORT RETAILING INSIDE-OUT
WHERE
� Renovation of our shops
� Working in phases
� New spaces
Commercial2
Legal1
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� New spaces
� In locations where we are already
� New locations
� Taking over space from other operators
� Eg. Vancouver and Düsseldorf
Infrastructure4
Operations / HR5
Logistics3
IN-HOUSE TEAM IS THE WAY TO MAKE IT HAPPEN
Dealing with Airports Complexity
Delivering with Maximum Flexibility
�
�
�
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Speed is of the Essence
Focusing on Innovation
Controlling Capex Effectively
�
�
�
SPEED IS OF THE ESSENCE: NEW SHOPS IMPLEMENTATION
• Santiago de Chile Arrivals
• Gatwick South WOW
• Heathrow T3 Luxury
• Colombo Departures
• Kuwait Express
• Madrid T4, T4S,
• Madrid T1 Schengen and no Schengen, Beauty Store
• Madrid T2
• Heathrow T2 Main, T2 Arrivals,
• T2 Express
• Glasgow
• East Midlands
• Gatwick South Victoria’s Secret
• Manchester T1 Luxury
• Santiago de Chile Main WT, Express, Cava del Vino
• Santiago de Chile Domestic Dep &
Mar. 2013 Aug. 2013 Jan. 2014 Jun. 2014
• Amman main WT, North & South, Arrivals, Gold, Electronics
• Belem Departures & Arrivals
• Victoria’s Secret (Luton & Stansted)
• Barcelona M3, Men & Thinking relocation
• Palma N
• Murcia
• Granada
•
• Düsseldorf pier C, pier B1, pier B2, pier A Boutique, pier A Hugo Boss
• Düsseldorf landside Fashion
• Vancouver Burberry
• Cancun T3 Mac
• Malaga T3
• Madrid T4 Express, Arrivals
• Madrid T3 Milenium, Express
•
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• Madrid La Paloma
• Barcelona T1, T2 M4
• Gran Canaria
• Valencia
• Alicante Arrivals
• Santiago WT transformation
Arrivals
• Montego Bay WT
• Cancun T2 WT, T2 Express
• Sevilla
• Almeria
• Ibiza The Shop, Express
• Menorca WT, Express
15 MONTHSMORE THAN 110
STORESMORE THAN 64.000 SQM
MORE THAN25 NEW
COMMERCIAL SQM/HOUR
Source: WDFG
• Santander
• La Coruña
• Asturias
• WT transformation (Malaga, Menorca, Alicante)
• Palma Collection & Traveller
• Tenerife South Shoes
• Barcelona No Schengen North
• Barcelona No Schengen South
• Barcelona M0, M1, M5
• Palma C, Palma D
• Tenerife Sur
• Santiago
• Gerona
Palma de Mallorca,Spain
SOME EXAMPLES
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Barcelona T2, Spain
Barcelona T1, Spain Madrid, Spain
Palma de Mallorca,Spain
60
A SOLID FINANCIAL BUSINESS MODEL
David Jiménez-Blanco
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David Jiménez-Blanco
Group CFO
Pablo Bas
Finance Director
STRONG, RESILIENT TOP-LINE ORGANIC GROWTH
12%
9%
8%
13%
1,675
1,821
14%
8%
2,002
Net Sales by Geography€m
+19%
+1%
CAGR2010-12
Y-o-YH1 2012-13
1,538
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2009 2010 2011 2012 H1 2012 H1 2013
UK RoE Americas Asia & ME
47%
32%
12%
47%
31%
48%
30%
+11%
+6%
(1%)
+2%
+4%
(1%)
47%
29%
15%9%905
47%
30%
15%8%923
Source: WDFG. Note: ME defines Middle East
UK
(5.0%)
0.0%
5.0%
10.0%
15.0%
SIGNIFICANT OUTPERFORMANCE OF WDFG VS. PASSENGER TRAFFIC
Average WDFG Sales Growth +6.9%
Average Traffic Growth +1.5%
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SPAIN
(10.0%)
(5.0%)
0.0%
5.0%
10.0%
2010 2011 2012 H1 2013
Traffic GrowthWDFG Sales Growth
Source: WDFG, B.A.A. and Manchester airport for U.K. airports and A.E.N.A. for Spanish airports. Note: Reported YoY sales growth rates on the basis of constant exchange ratesNote: WDFG H1 2013 sales growth in Spain excludes luxury stores closed in Madrid
Average WDFG Sales Growth +2.1%
Average Traffic Growth +0.5%
Net Sales by Product Category€m
1,6751,821
2,002
12%10%11%
11%16%16%
16%
CAGR2010-12
Y-o-YH1 2012-13
SUPERIOR GROWTH IN THE RIGHT CATEGORIES
+2%
+12%
+10%
1,538
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2009 2010 2011 2012 H1 2012 H1 2013
Beauty Drinks Tobacco Food Other
42% 43%43%
18%17%
17%14%13%
12%10%
64
Source: WDFG (1) “Other” category include Souvenirs, Luxury, Fashion and Accessories and Non-airport Sales
(2%)
+4%
+4%
+8%
42%
905
18%13%11%16%
43%
18%
11%
923
12%
15%
+2%
+11%
+8%
(5%)
(1)
2010A 2011A 2012A
CAGR
10 -12 H1 2012A H1 2013A
Y-o-Y
H1 12A-13A
Net Sales 1,675.3 1,820.6 2,002.0 +9.3% 905.1 922.9 +2.0%
Gross Margin 941.7 1,055.6 1,182.0 +12.0% 534.4 548.3 +2.6%
EBITDAR 699.1 779.5 877.8 +12.1% 393.8 401.8 +2.0%
Profit & Loss€m
SCALABLE, EFFICIENT COST STRUCTURE (1/2)
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Concessions and Rents (505.5) (551.2) (615.5) +10.3% (280.5) (292.0) +4.1%
EBITDA 193.6 228.3 262.3 +16.4% 113.3 109.8 (3.1%)
Net profit 33.7 63.9 103.0 +74.7% 42.9 42.6 (0.7%)
Group Net profit 32.2 61.4 100.7 +76.9% 41.7 41.4 (0.7%)
65
Source: WDFG
As a % of sales
SCALABLE, EFFICIENT COST STRUCTURE (2/2)
43.8 42.0 41.0 41.0 40.6
60%
70%
80%
90%
100%
COGS
Other Operating
Gross Margin (%)
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Source: WDFG
30.2 30.3 30.7 31.0 31.6
14.4 15.2 15.2 15.5 15.9
0%
10%
20%
30%
40%
50%
Net Profit Interest & Taxes D&A Concession / Rents Other operating costs COGS
2010 2011 2012 H1 2012 H1 2013
11.6 12.5 13.1 12.5 11.9
Other Operating Costs
Concession / Rents
EBITDA %
Margin (%)
EBITDAR (%)
CONFIRMED GUIDANCE FOR FY 2013
Adjustment for AENA Advance Payment
HMS HOST Retail (US) Acquisition (€189m Sales, €11.3 m EBITDA in 2012
(1))
Sales: €2,050m
EBITDA: €250-260m
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Adjustment for AENA Advance Payment (€279m, 7.5 years
(2))
From Now on, Cash EBITDA Will be the Key Measure
CapEx: €70m
Source: WDFG(1) Pro forma, net of estimated €6.5m arising from cost of services to be provided by HMS Host to WDFG. First closing occurred on September 6th, 2013(2) New contract starting from May 2013
UNDERSTANDING OUR BUSINESS MODEL
Solid EBITDA Margin
Limited CapEx NeedsSubstantial
� Ability to De-lever Fast
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Limited CapEx Needs
Negative Net Working Capital
Cash Generation � Ability to Capture Growth
Opportunities
1,056
1,182
GROSS MARGIN €m
228
262
SUSTAINED IMPROVEMENT IN MARGINS
EBITDA €m
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942
1,056
56.2%
58.0%
59.0%
2010 2011 2012
69
Source: WDFG
194
228
11.6%
12.5%13.1%
2010 2011 2012
EBITDA MarginGross Margin
24 25 28
8
70
2010 2011 2012 H1 2013 Guidance FY2013
CapEx Evolution€m
1.4% 1.4% 1.4% 0.8% 3.4%
CAPEX-LIGHT BUSINESS MODEL...
(1)
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... AND NEGATIVE NWC FINANCING NEEDS
70
Source: WDFG (1) Excluding HMS Host Retail (US)
% of Net SalesCapEx
Net Working Capital€m
(81) (55) (68) (32)
(201) (217) (204) (276)
121 144 143 14233 27 27 29
2010 2011 2012 H1 2013
(127) (101) (102) (138)
Trade Payables (-)Other current ass./(liab.) Trade ReceivablesInventory
Cash Conversion(1)
€m
A CASH GENERATING MACHINE
88% 89% 89% 93%
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170203
234
102
2010 2011 2012 H1 2013
Cash Conversion(1)EBITDA – CapEx
Source: WDFG(1) Cash generation defined as EBITDA - CapEx. Cash conversion defined as (EBITDA - CapEx) / EBITDA. H1 2013 Cash Conversion defined on Cash EBITDA
PROVEN ABILITY TO DE-LEVER FAST FROM CURRENT LEVELS
Net Debt€m
725635
561
936
3.7x 2.8x 2.1x 3.6x
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Contractual Covenants
2010 2011 2012 H1 2013
2013 2014 2015
Net Debt/Cash EBITDA(1) 4.35x 3.75x 3.50x
Interest Coverage Ratio 4.00x 4.00x 4.50x
Source: WDFG(1) Cash EBITDA calculated as EBITDA adjusted for the annual portion of the advance payment for AENA concessions’ renewal
Net Debt / Cash EBITDA(1)Net Debt
ALL IN ALL, A PROVEN FINANCIAL PLATFORM TO SUPPORT VALUE CREATION
Organic:
� Like-for-like
� New concessions
No / Limited
2009 - 2013
Proven WDFG Experience
Cash Needs?
�
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WDFG Future Growth
Potential Value Enhancing
Acquisitions and/or Combinations
?
2007 - 2008
�
MAXIMISING LONG TERM SHAREHOLDER VALUE...
Preserve flexibility to accelerate growth through capturing opportunities
New concessions
Selected non-organic opportunities
(including potential business
combinations)
Existing context
Sector in consolidation
WDFG’s high initial leverage
WDFG’s high cash flow generation
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... DETERMINES OUR SHORT TERM FINANCIAL PRIORITIES
Focus on deleveraging
Create headroom for value-creating non-organic growth opportunities
1
2
THANK YOU
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