Dufry, global leader in Travel Retail, and Autogrill, global leader in Travel Food & Beverage (F&B), are combining to create a new, integrated global Travel Experience player.
The combined Group will be able to serve over 2.3 billion passengers across all continents in around 5,500 outlets at around 1,200 airport and other locations generating CHF 13.6 billion revenues (2019 pro-forma) and CHF 1.4 billion of EBITDA (2019 pro-forma, pre-IFRS 16). The Group’s global footprint and presence in more than 75 countries will provide an exceptional experience and knowledge within the industry and enable strong, mutual value-creating relationships with landlords, airport partners and suppliers. The Group will employ around 60,000 people from over 150 nationalities globally, united as one team.
The enlarged Group redefines the boundaries of the industry and will focus on enriching the passenger journey based on experience and innovation.
Dufry significantly strengthens its presence in the highly attractive and resilient US market, while adding opportunities in other key geographies including APAC, Latin America, the Middle East and Africa.
The combination brings together two groups of highly experienced and strongly engaged professionals with complementary skill sets, led by Xavier Rossinyol as CEO of the combined Group.
Edizione, through a wholly owned subsidiary, will transfer its entire stake of 50.3% in Autogrill to Dufry at an exchange ratio of 0.158 new Dufry shares for each Autogrill share.
Following the closing of the Transfer, Dufry will launch a mandatory tender offer for the remaining Autogrill shares, offering Autogrill shareholders the ability to participate in the future of the combined entity by receiving 0.158 new Dufry shares for each Autogrill share (same exchange ratio as offered to Edizione). Alternatively, Autogrill shareholders are offered a cash alternative equivalent to of EUR 6.33 per Autogrill share.
Xavier Rossinyol, CEO of Dufry, commented: “I am very happy to lead this transformative combination, which I am sure will reinforce the new Group strategy and will create sustainable long-term value for our customers and shareholders.
We are transforming our industry and redefining its boundaries, and we will create a new corporate identity to reflect this fundamental move. By executing on this unique opportunity, we will accelerate growth by fully focusing on consumers and the digital revolution, by offering additional value to landlords and airport partners with an expanded service portfolio, while further diversifying the Group and increasing our resilience.
With a culture of prioritizing serving customers while relentlessly driving operational efficiencies and actively managing our portfolio of concessions, we will be able to drive growth and innovation as well as profitability.
We remain committed to our ESG principles and contributing to the communities and environments we work in.
I am impressed by the know-how, skills and – above all – the passion of the teams, both at Dufry and Autogrill. I am sure that together we will build the next generation of travel experience.
I want to express my admiration for what Gianmario Tondato da Ruos has achieved over the last two decades at Autogrill and his passion for the business. I thank him for continuing to support the company and me going forward.
I thank Edizione and its Chairman Alessandro Benetton for their trust, full alignment on the strategy and long-term commitment to the new combined company, with great vision and precise execution.”
Gianmario Tondato da Ruos, CEO Autogrill, added: “A new cycle opens that will allow us to unleash a whole array of options centered around the needs of travelers worldwide. The business combination will enable a flurry of innovations in its offerings, which will translate into more enjoyable travel experiences across various geographies and channels. It represents an outstanding value creation opportunity for our stakeholders.”
COMPELLING STRATEGIC RATIONALE
Enhanced travel experience including F&B and digital engagement to serve passengers: The combined entity is well positioned to provide travelers with a redefined, holistic travel experience that reflects evolving consumer trends. Complementing Dufry’s portfolio with F&B broadens our offering and gives us more contact points with travelers. In addition, the integrated Group will have greater resource to grow its digital capabilities, focused on delivering tailored passenger experiences. Dufry’s strategy has always been to serve the traveler along its journey, adapting our offers and concepts to accommodate its changing needs.
Holistic service portfolio for landlords and brands: The integration of Travel Retail, Convenience and F&B allows the combined entity to improve the commercial setup and revenue generation for landlords. This also includes bidding to act as Master Concessionaire/Terminal Manager, guaranteeing the best commercial setup and efficient handling to landlords and airport partners.
Business diversification and expansion in the highly attractive and resilient US market: The combined entity will benefit from an increased level of diversification by geography, business type and channel, driven by Autogrill’s strong position in the highly attractive and resilient US F&B market, as well as its current exposure to the duty paid market and multi-channel approach. In particular, the US has proven to recover quicker and to be less volatile than the rest of the world due to the high share of domestic passengers. The combined Group will be present in more than 100 airports in the US, and with a shared presence in 17 of the country’s top 20 largest airports.
Increased business development opportunities: Moreover, the transaction will expand Dufry’s growth opportunities in other attractive international markets including Asia-Pacific, the Middle East, Latin America and Africa. F&B is expected to be supported by future industry dynamics that can further drive growth, e.g. limited offerings on board, increasing travelers’ propensity to grab drinks and foods before boarding, rising interest in regional food, and demand for new experiences and concepts.
Supportive for deleveraging: The combined entity is expected to benefit from a materially strengthened balance sheet and lower financial leverage compared to Dufry as a stand-alone business. Dufry agreed to reduce its leverage to below 3x between 2024 and 2025, depending on the timing of the completion of the overall transaction.
Compelling cost synergies potential: Dufry and Autogrill will integrate into one organization and expect to generate cost synergies with an annual run-rate of approx. CHF 85 million5, comprising both cost reductions and gross profit improvements. First, Dufry expects to realize optimization measures at cost of goods sold level in F&B and convenience with focus on the US. Secondly, Dufry expects to optimize support function costs and reduce business related operating expenses. Synergies are planned to be fully realized in the first two years post-transaction. A dedicated team will focus on the delivery on a zero-based budgeting approach.
Value enhancing transaction for shareholders: As a consequence of all the above, the transaction is expected to create sustainable value to shareholders. Despite the significantly lower leverage level, Dufry expects to achieve an EFCF per share accretion in the first year-post-closing6. The EFCF conversion from the targeted cost synergies amounts to approx. 65%. In addition, the business combination is expected to generate new revenue opportunities going forward through diversification and innovation. The combined entity will continue to foster its ESG commitments and engagement for all stakeholders.
