AUTOGRILLGROUP TRAVEL RETAIL & DUTY FREE · 2019. 2. 2. · Not for release publication or distribution directly or indirectly in or into the United States, Canada, Australia or Japan

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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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


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


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)


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)


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


Proven, Highly Efficient Business Model

4

Enviable Portfolio Length

3A Solid Financial Business Model

5

A PROVEN BUSINESS MODEL IN AN ATTRACTIVE INDUSTRY


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


(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.


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


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


● 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)


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


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


$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%



$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�


● 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


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


600mEstimated customer base

Source: WDFG

MAXIMISE RETURNS FROM CURRENT PORTFOLIO

Sizable Opportunity

1 Additional Customer for Every 100

+ c.€125mSales p.a.

A


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)


TRAVEL RETAIL SECTOR OFFERS SIGNIFICANT OPPORTUNITIES TO BE EXPLOITED

Clear ObjectivesA

WDFG has the Right Business and Commercial Model to Capture these Opportunities

Growth�


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


● 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)


● 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


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


All Underpinned by Unparalleled Customer Service

A PARTNERSHIP BASED MODEL

Cooperation Transparency

Longer Term Agreements

Action Oriented Relationships

B


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%

%


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! ! !


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


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


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


Creating a Fantastic Retail Environment

Delivering Best Customer Service� �

3 4

LOCATION BASED ON CUSTOMER PROFILEA.1


Barcelona, Spain

PIONEERS IN MANAGING WALKTHROUGHSA.2


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



�SPH:+14% vs prior year

Gatwick – Opened on 21st July ‘12


�SPH: +22% vs prior year

Jordan – Opened on 21 March ‘13

PI:Penetration Index SPH:Spend per Head

CREATING A FANTASTIC RETAIL ENVIRONMENTA.3


DELIVERING BEST CUSTOMER SERVICEA.4


CUSTOMER EXPERIENCE IS MAXIMISED AT WDFG

Destination Targeting ● Extensive Communication Capabilities

A.4


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


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


�

NEXT STEPS (2/2)

New Heathrow Terminal 2�On-line Technology�

A


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


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


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


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


1 Additional Unit for + c.€80m

C


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)


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


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


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


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


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


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


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


Non-organic

New Contracts

Business Combinations

JVs

ENVIABLE RENEWAL TRACK RECORD

96%

Concessions Renewal Rate(1) Selected Examples

Vancouver, Canada


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


$Bn 2012

CAGR

%


$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


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


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


� 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

�

�

�


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

•


• 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


Barcelona T2, Spain

Barcelona T1, Spain Madrid, Spain

Palma de Mallorca,Spain

60

A SOLID FINANCIAL BUSINESS MODEL

David Jiménez-Blanco


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


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%


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


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)


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 (%)


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


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


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


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)


... 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%


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


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?

�


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


... 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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AUTOGRILLGROUP TRAVEL RETAIL & DUTY FREE · 2019. 2. 2. · Not for release publication or distribution directly or indirectly in or into the United States, Canada, Australia or Japan