Lagardère Travel Retail (Lagardère) has posted a 15.8% rise in revenue to €1.995bn ($2.22bn) for the first half of 2019, as the company announces it has signed an agreement to acquire Belgian travel retailer International Duty Free (IDF).

The consolidation of IDF’s businesses would bring Lagardère Travel Retail’s annual revenue to €5.3bn⁽¹⁾ ($5.9bn) and allows the retailer to extend its presence to another major European platform, Brussels, strengthen its positions in Luxembourg and in Africa with an entry into Kenya.

Lagardère’s revenue was up 15.8% on a consolidated basis and up 6.5% organic. Recurring EBIT amounted to €46m, up €12m vs. 2018. The retailer attributed the difference between the two growth figures mainly to the acquisition of HBF in North America and to a positive foreign exchange effect, mainly the appreciation of the US Dollar.

Parent company, Lagardère Group, overall maintained solid growth momentum in first-half 2019, up 6.7% like-for-like to revenue of €3.61bn, which was mainly “powered” by solid performance at Lagardère Travel Retail”, the Group stated.

Lagardère TR reported it has maintained healthy organic growth in H1 notably thanks to “dynamic commercial performance and openings of new points of sale”.

Regional highlights

Strong growth in France, EMEA, America and Asia Pacific was lifted by good sales momentum, network expansion and store openings, as well as robust passenger traffic.

The strong growth in France (+11%) was propelled by the dynamism of the duty-free segment, in particular in regional platforms, and the growth of the network in Foodservice and Travel Essentials (including Toulouse Airport). Last year’s 2018 figures were also impacted by transport strikes.

In EMEA region (excluding France), Lagardère posted solid growth (+5.1%) in a context of rising air traffic and good sales performances in Italy and Eastern Europe, especially Romania, as well as the development of the Foodservice activity in the Netherlands with the opening of Smullers, and in the Middle East with openings like The Daily DXB food hall in Dubai.

Growth in North America (+4.4%) was aided by an expansion of the network in Foodservice and Travel Essentials.

In Asia-Pacific, growth of6.5% was powered by an enhanced network and organic expansion in China. The Pacific region is slightly behind, as recent openings in Christchurch were not able to offset the unfavourable network effect in Australia.

Market expansion and H2 outlook

During the first half of 2019, Lagardère Travel Retail expanded into three new markets – Slovakia in Foodservice, Gabon in Duty Free & Foodservice (after a launch in Senegal), and Turkey in Franchise. Lagardère Travel Retail is now operating in 38 countries.

During the second half of 2019, Lagardère Travel Retail will continue to see a strong development in Fashion, with openings in Vienna (an 800sqm multi-fashion store to open early August), Beijing Daxing and Shanghai Pudong (to open in the Fall), along with an expanded 500sqm concession in Geneva. In Foodservice the pipeline is also dynamic, with several openings planned in Q2, in the US (Bourbon Pub with Chef Michael Mina) and in Hong Kong (The Kitchen with Chef Wolfgang Puck), as well as in Beijing Daxing and Shanghai Pudong.

The dynamic in terms of business development is very positive. The retailer secured the renewal and expansion of several Duty-Free concessions: Adelaide in Australia (1,700sqm) in March, and more recently in Prague (4,300sqm). In addition, Lagardère Travel Retail acquired the Foodservice concession at Prague main station (effective since June 1st), which will further strengthen its position as the #1 travel retail operator in the Czech Republic.

Dag Rasmussen, Chairman and CEO of Lagardère Travel Retail commented: “I am pleased with the superior growth we were able to generate throughout our network and confident for the months to come as the business dynamic continues to come fueled by increasing pax and our ability to adapt our offer to their evolving needs.

“It is also satisfying to see that our three-business line [Travel Essentials, Duty Free & Fashion and Foodservice] strategy is paying off and that our investments on concepts, innovation, and customer services are being increasingly recognised by the industry and customers”.