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Travel retail Dufry analysis s With the acquisition of WDF (left) and Nuance (right), Dufry has a 24% share of the global airport retail market Dufry factfle n n n North America with 18% and Asia/ WDF has started integrating EU platforms Middle East with 12%. With this in mind, [new organization, IT, supply chain].” Sales: CHF5.20bn ($5.52bn) (pro forma the latter regions may be the locations in Brands are also nervous about how the 2014)—new group pro forma FY2014 with WDF CHF7.76bn ($8.24bn) which Dufry looks to gain ground the most, integration will proceed. “I hope that the going head-to-head with local competitors. integration will not take too long because Net proft 2014: CHF50.8m ($52.8m) The group’s size also means that it will be the process of listing new products is well positioned to secure new contracts complex, so Dufry should not make the Market share: 20% (airport retailing and renew existing agreements. industry suffer during the integration. market share: 24%) They need to keep their agility as in travel Integration and culture retail you need to be very agile in terms of Sales share by region: Europe: close The take-over of The Nuance Group assortment. Travel retail is a global market, to 50%; Latin America: 20%; North and WDF has been described as but is local at the same time; each airport America:18%; Asia/Middle East: 12% transformational for Dufry and indeed the is different depending on the passenger industry, many times. However, although profle, so they need to maintain fexibility Sales share by category: Perfumes and the deals boost Dufry’s market share, to avoid losing opportunities” one brand cosmetics: 28.3%; confectionery/food: there are some question marks over the executive tells BW Confdential. He adds 17.5%; luxury goods: 17.2%; wine and integration process. While the integration that there is also the issue of the type of spirits: 15.1%; tobacco: 9.1%; literature/ of Nuance is said to be on track, it isn’t culture that the combined company will publications: 4.6%; other: 8.2% (2015 set for completion until the end of 2015. have—Dufry and WDF’s culture are seen estimate) On top of this, Dufry began to consolidate as being very different—and the structure Key strengths: A number of long- WDF from August, and said that it would they will come up with. term concession contracts, geographical integrate the company shortly afterwards. However, industry observers point out scale with a presence in developed and Analysts say that this is a lot to digest. A that Dufry has made around six acquisitions emerging markets across 62 countries and report by Vontobel states: “Although we since 2011 (although on a much smaller close to 400 locations; strong record of fully understand the long-term industrial scale) and that the integration of these acquisitions and integration logic behind the WDF transaction (being companies has gone more or less smoothly. the clear global market leader), we see Dufry’s real strength will stem from its Market share data sourced from Vontobel Equity Research several risks in the short term as Dufry is in sheer scale with improved purchasing the midst of the integration of Nuance and power triggering higher gross margins. 98 November-December 2015 - N°24 - BW Confidential