Duty free retailer Dufry expects cash inflow to pick up in 2022
Reuters
Published Oct 28, 2021 03:16AM ET
Updated Oct 28, 2021 12:41PM ET
By Aida Pelaez-Fernandez
(Reuters) - Swiss duty free retailer Dufry raised its 2021 free cash flow guidance for the second time this year and said it expects a further pick-up in 2022, citing a recovery in travel from the pandemic-related slump.
The retailer, which operates more than 2,300 shops at airports, on cruise liners, in seaports, and other tourist locations, is seeing signs of recovery after being severely hit over the last year and a half by the travel restrictions imposed to tackle the coronavirus pandemic.
That has been chiefly driven by its main sector, the Americas, which made for 499 million Swiss francs ($543.2 million) of its 1.3 billion Swiss franc third-quarter turnover. The total was down nearly 45% from the third quarter of 2019.
"We have seen continued progress in the U.S. and Central America, including the Caribbean Islands," Chief Executive Julian Diaz said in a statement.
The Basel-based company notched up its free cash flow targets for 2021, now expecting a monthly cash inflow of 13 million Swiss francs if turnover is 40% below 2019 levels, versus previous expectations to break even.
With turnover 55% below 2019 levels, it sees a 13 million Swiss franc cash burn, against a 30 million franc burn previously forecast.
Next year it sees a cash inflow of almost 100 million Swiss francs in a conservative sales scenario, Chief Financial Officer Yves Gerster said on a conference call, with sales 25% below 2019 levels.
The group also expects to achieve up to 1.87 billion Swiss francs in savings in personnel and other expenses this year versus pre-pandemic levels, up from 1.2 billion Swiss francs forecast in August and the 1.3 billion Swiss francs recorded in 2020.
Looking at current global supply chain issues, which have affected products from pallets to electrical components, the company said there had been issues securing some supplies, mainly of tobacco and spirits, but that it is coping.
"The out-of-stock situation is not relevant enough to justify any kind of disruption in sales. We are protected so far," Diaz said.
($1 = 0.9134 Swiss francs)
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Written By: Reuters
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