Chairman’s message

Gilberto Benetton

Dear Shareholders,

2011 was characterised by ongoing economic difficulties: recession in OECD countries, slower growth in emerging economies and a weakening of global demand.

In this context, Autogrill posted income and financial results that improved on the previous year, despite a marked contraction in traffic and inflationary pressure on energy and raw material costs of food. The Group’s geographical spread and diversified businesses limited the effects of the crisis and made it possible to achieve satisfactory growth in consolidated revenues.

Travel Retail recorded excellent performance in terms of both sales and, even more so, margins. The airport channel posted  positive results in Food & Beverage as well, where revenues grew at a faster rate than traffic. The situation was more complicated on motorways, where falling traffic levels also reflected rising fuel costs.

Over the year a number of measures were taken to improve operating efficiency and our capacity to adapt to a rapidly changing economic scenario. A process was launched to redefine operations in Europe by prioritizing profitability over market growth. The Group also continued to invest in product and process innovation.

Renewal of our agreement with Starbucks was a development of considerable importance: Autogrill will maintain its exclusive operation of the brand in airports and on toll motorways in North America for a further ten years. The partnership in Europe was also extended.

2012 is looking no less complex. The conditions that would justify predicting a more than marginal economic recovery simply do not apply or even seem foreseeable. The start of the year was characterised by continuing recession and stagnation in consumer spending. The difficulties already seen on motorways in Italy and Spain persist, but will have a limited effect on sales and margins given that the Italian business, for example, accounts for 23% of total sales.

Opportunities for growth will continue to be concentrated in the Travel Retail & Duty-Free business, where we can envisage further satisfactory results, albeit not quite up to 2011 levels, given the slowness of the recovery and new rises in oil prices.

Mobility infrastructure and people’s experience of travel are changing: high-speed trains, low-cost airlines, the global demographics of travel itself, with increasing percentages of Asian and female travellers in general and higher average traveller age in Europe. The Group will therefore continue to step up its business development activities, especially in emerging countries, and search for new opportunities.

Our business in the airport channel will gradually become more independent of GDP trends in individual countries and more in step with overall worldwide trends as a whole. To prepare for change it is necessary, first of all, to perfect our organisation, simplify processes, improve efficiency, and further develop our capacity to create synergy and alliances.

 

Gilberto Benetton