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ItalianoFood & Beverage e Corporate
Unlike in previous editions, since the fourth quarter of 2011 the Food & Beverage segment has been shown together with “Corporate,” which covers the centralized functions operating almost exclusively for the Food & Beverage business in the areas of Administration, Finance and Control, Strategic Planning, Legal Affairs, Human Resources and Organization, Marketing, Purchasing and Engineering, and Information and Communication Technology.
Food & Beverage e Corporate
| Change | ||||||
|---|---|---|---|---|---|---|
| (€m) | 2011 | % of revenue | 2010 | % of revenue | 2010 | At constant exchange rates |
| Revenue | 4,023.8 | 100.0% | 4,027.8 | 100.0% | (0.1%) | 1.5% |
| Other operating income | 114.0 | 2.8% | 96.9 | 2.4% | 17.6% | 12.6% |
| Total revenue and other operating income | 4,137.9 | 102.8% | 4,124.8 | 102.4% | 0.3% | 1.8% |
| Raw materials, supplies and goods | (1,374.5) | 34.2% | (1,356.1) | 33.7% | 1.4% | 2.8% |
| Personnel expense | (1,256.6) | 31.2% | (1,240.4) | 30.8% | 1.3% | 3.2% |
| Leases, rentals, concessions and royalties | (642.0) | 16.0% | (644.2) | 16.0% | (0.3%) | 2.0% |
| Other operating costs | (450.9) | 11.2% | (445.2) | 11.1% | 1.3% | 2.6% |
| EBITDA before corporate costs | 413.9 | 10.3% | 438.9 | 10.9% | (5.7%) | (3.5%) |
| Corporate costs | (25.3) | 0.6% | (27.2) | 0.7% | (7.0%) | (7.0%) |
| EBITDA | 388.6 | 9.7% | 411.7 | 10.2% | (5.6%) | (3.3%) |
| Depreciation, amortization and impairment losses | (192.7) | 4.8% | (212.7) | 5.3% | (9.4%) | (7.7%) |
| Impairment losses on goodwill | – | 0.0% | (22.2) | 0.6% | n.s. | n.s. |
| EBIT | 196.0 | 4.9% | 176.9 | 4.4% | 10.8% | 14.6% |
| Net financial expense | (54.7) | 1.4% | (30.9) | 0.8% | 76.9% | 81.8% |
| Impairment losses on financial assets | (2.1) | 0.1% | (1.7) | – | 23.7% | 29.9% |
| Pre-tax profit | 139.2 | 3.5% | 144.3 | 3.6% | (3.5%) | (0.1%) |
| Income tax | (64.0) | 1.6% | (82.3) | 2.0% | (22.3%) | (20.7%) |
| Profit from continuing operations | 75.2 | 1.9% | 62.0 | 1.5% | 21.3% | 28.2% |
| Profit from discontinued operations | – | 0.0% | 25.0 | 0.6% | n.s. | n.s. |
| Profit attributable to: | 75.2 | 1.9% | 87.0 | 2.2% | (13.5%) | (9.6%) |
| – owners of the parent | 64.8 | 1.6% | 76.6 | 1.9% | (15.3%) | (11.4%) |
| – non-controlling interests | 10.4 | 0.3% | 10.4 | 0.3% | (0.4%) | 3.8% |
Revenue
In 2011 Food & Beverage sales came to € 4,023.8m, compared with € 4,027.8m in 2010 (+1.5%, –0.1% at current exchange rates). Sales were boosted by the growth of traffic in the airport channel, but penalized in the motorway channel by the decline in traffic and the closure of some European locations.
Food & Beverage revenue by channel (€m)
EBITDA
In 2011 EBITDA for the Food & Beverage segment (excluding Corporate costs) amounted to € 413.9m, down 3.5% (–5.7% at current exchange rates) compared to € 438.9m in 2010. The EBITDA margin went from 10.9% to 10.3%. The main reasons for the decrease in EBITDA as a percentage of revenue is the rise in food raw material prices and personnel expense, including reorganization costs of around € 8.2m, which were only partially offset by the intake of € 5m from the sale of locations in Belgium.
Change in Food & Beverage EBITDA margin
Corporate costs
Corporate costs in 2011 decreased slightly, from € 27.2m in 2010 to € 25.3m, thanks to € 8m in non- recurring income from the early settlement of some contractual provisions relating to the sale of the Flight segment.
Depreciation, amortization and impairment losses
Depreciation, amortization and impairment losses of € 192.7m decreased by 7.7% on the previous year’s € 212.7m, due to a € 16.0m reduction in impairment losses on property, plant, equipment and intangible assets.
Net financial expense
The significant change in net financial expense reflects the increase in average Corporate bank debt, due to the capitalization of the Travel Retail & Duty-Free segment by € 400m at the end of 2010.
Income tax
The reduction in the tax charge since the previous year reflects substantially tax-exempt income of € 8m in 2011 relating to the sale of the Flight segment, as well as the non-deductibility of the 2010 impairment loss on goodwill for the Dutch motorway operations. Tax in the Food & Beverage and Corporate segment includes IRAP (Italian regional business tax), charged on the results of operations in Italy.
Profit
The profit for the Food & Beverage segment (including Corporate costs) came to € 64.8m, a decrease of 11.4% with respect to the previous year. The 2010 profit included € 25m for the Flight segment, now sold, whose residual contribution in 2011 came to € 8m. Non-controlling interests in profit amount to € 10.4m, in line with the previous year.
Net invested capital
| (€m) | 31.12.2011 | 31.12.2010 | Change |
|---|---|---|---|
| Goodwill | 812.8 | 795.0 | 17.8 |
| Other intangible assets | 53.5 | 56.2 | (2.7) |
| Property, plants and equipment | 826.7 | 810.2 | 16.6 |
| Financial assets | 16.9 | 18.5 | (1.6) |
| Non-current assets | 1,709.9 | 1,679.9 | 30.0 |
| Assets held for sale | – | 1.0 | (1.0) |
| Net working capital | (397.5) | (459.6) | 62.1 |
| Other non-current non-financial assets and liabilities | (177.9) | (157.6) | (20.3) |
| Net invested capital | 1,134.6 | 1,063.8 | 70.9 |
| Net financial indebtedness | 913.7 | 850.8 | 62.9 |
Net cash generation
| (€m) | 2011 | 2010 |
|---|---|---|
| EBITDA | 388.6 | 411.7 |
| Change in net working capital | (62.7) | 19.3 |
| Other items | (4.0) | (0.3) |
| Cash flow from operating activities | 321.9 | 430.7 |
| Tax paid | (53.3) | (56.3) |
| Net interest paid | (83.4) | (28.3) |
| – Of which IRS unwinding fees * | (39.2) | – |
| Net cash flow from operating activities | 185.3 | 346.2 |
| Net Capex | (190.8) | (191.6) |
| Free operating cash flow | (5.5) | 154.6 |
| Free operating cash flow w/o IRS unwinding fees | 33.7 | 154.6 |
* “Interest Rate Swap”: agreements for interest rate risk hedging
Net cash generation in the Food & Beverage and Corporate segment was held back by the reduction in cash flow from operating activities and the rise in net interest paid. More specifically, for equal amounts of revenue, results were negatively influenced by the increase in raw material prices and personnel expense and by a significant decrease in amounts due to suppliers in Europe.
The increase in net interest paid results from higher Corporate bank debt due to the capitalization of the Travel Retail business, and the early termination of interest rate swaps concurrently with the Group refinancing concluded in July 2011.
Net capital expenditure amounts to € 190.8m (€ 191.6m in 2010) or 4.7% of revenue (4.8% the previous year), and mostly concerns some ser vice areas along Italian and US motor ways (particularly the Pennsylvania Turnpike), the North American airports of Santa Ana, Edmonton and Sacramento, the European airports of Amsterdam and Zurich, and the opening of new railway station outlets in France, Belgium and Spain.
HMSHost (North America and Pacific area)16
To eliminate interference from fluctuations in the euro/dollar exchange rate and make it easier to interpret performance, figures are reported in millions of US dollars ($m).
| ($m) | 2011 | 2010 | Change |
|---|---|---|---|
| Revenue | 2,679.0 | 2,546.4 | 5.2% |
| Airports | 2,203.3 | 2,097.2 | 5.1% |
| Motorways | 409.5 | 375.0 | 9.2% |
| Shopping malls | 66.2 | 74.3 | (11.0%) |
| EBITDA | 312.5 | 314.5 | (0.6%) |
| EBITDA margin | 11.7% | 12.3% |
Revenue
In 2011 this area grossed $ 2,679.0m, compared with $ 2,546.5m the previous year (+5.2%).
Airport sales were up 5.1% on 2010, with especially notable performances by the airports of Los Angeles, Chicago and Las Vegas. On a comparable basis17, revenue at US airports18 increased by 5.1% with respect to a 1.5% rise in traffic19, confirming the ability to outperform traffic trends.
Revenue in the motorway channel increased by 9.2% thanks to the reopening of the important service area on the Delaware Turnpike, new locations on the Ontario Highway in Canada, and an upturn in sales during the second half of the year. On the US motorways served by the Group,20 the decrease in revenue on a comparable basis came to 0.9%, in line with the trend in traffic (–1.0%21).
Sales in other channels went down due to the Group’s exit from certain locations.
EBITDA
In 2011 EBITDA came to $ 312.5m, down 0.6% compared with the previous year’s $ 314.5m, after non- recurring charges of $ 3.6m for reorganization programs. As a percentage of revenue EBITDA came to 11.7%, down from 12.3% in 2010. Good labor productivity in the spring and summer only partially mitigated the increase in the cost of products (caused by raw material inflation throughout the year) and personnel expense, which was influenced particularly in the first half of the year by higher social security costs for healthcare and contributions to the state unemployment system.
16 Under the trade name HMSHost, Autogrill Group Inc. (USA) manages mostly food & beverage services in North America, at Amsterdam’s Schiphol Airport and at other airports in Asia and Australasia
17 Same locations and offerings
18 Accounting for 82% of the channel’s revenue
19 Source: ATA, number of passengers, January-December 2011
20 Because of renovations under way at locations along Canadian motor ways, the contract for which was renewed during the year, the US locations generated practically all revenue in this channel
21 Source: Federal Highway Administration, January-December 2011 (stretches of road served by the Group)
Italy
| (€m) | 2011 | 2010 | Change |
|---|---|---|---|
| Revenue | 1,356.1 | 1,347.1 | 0.7% |
| Sales to end consumer | 1,333.7 | 1,319.8 | 1.1% |
| Motorways | 1,034.8 | 1,021.6 | 1.3% |
| Airports | 97.6 | 93.3 | 4.6% |
| Other | 201.4 | 204.8 | (1.7%) |
| Other sales * | 22.4 | 27.3 | (18.2%) |
| EBITDA | 132.7 | 147.5 | (10.1%) |
| EBITDA margin | 9.8% | 10.9% |
* Including sales to franchisees
Revenue
Revenue generated in Italy in 2011 came to € 1,356.1m, an increase of 0.7% on the previous year’s € 1,347.1m.
Revenue in the motorway channel increased by 1.3%, thanks entirely to the operations taken over from Esso in the second quarter of 2010. From January to December, with traffic down by 1.1%22 on the motorway network, sales decreased by 2.5% on a like-for-like basis. In general, especially during the second half of the year, consumers were even more inclined than usual to make smaller overall purchases, leading to a decline in restaurant patronage. Adjusting for the number of locations, the main forms of sale (Food & Beverage and market) fell by 2.5% on the previous year, with market items showing the greatest decline, while sales of complementary goods decreased by 2.4%.
Airport revenue increased by 4.6%, thanks to new openings at Naples and Rome Fiumicino and the launch of operations at Palermo airport. On a like-for-like basis, and net of the impact of closures due to renovations, sales were up by 0.3% versus a 3.4% rise in traffic23.
In other channels, revenue was down by 1.7% on the previous year: the opening of new outlets at the train stations in Bologna and Naples and the full-year contribution of the locations at Milan Central Station and Turin Porta Nuova offset the steep decline in shipboard catering and the closure of some shopping center locations.
EBITDA
In 2011 EBITDA came to € 132.7m, down from € 147.5m the previous year (–10.1%), and the EBITDA margin fell from 10.9% to 9.8%. The reduction was caused by the rise in personnel expense (higher average hourly cost) and by initiatives to boost demand and customer service. In addition, the decrease in motor way traffic — most evident during the second half of the year — had a negative impact on labor productivit y and the incidence of fixed location costs. EBITDA was fur ther penalized by € 2.1m in reorganization costs.
22 Fonte: AISCAT, gennaio-dicembre 2011
23 Fonte: stime del Gruppo su dati Assoaeroporti, gennaio-dicembre 2011 aeroporti di presenza del Gruppo
Other countries
| Change | ||||
|---|---|---|---|---|
| (€m) | 2011 | 2010 | 2010 | At constant exchange rates |
| Revenue | 743.7 | 760.1 | (2.2%) | (4.1%) |
| Motorways | 411.7 | 442.3 | (6.9%) | (8.5%) |
| Airports | 183.6 | 170.6 | 7.7% | 5.1% |
| Other | 148.4 | 147.2 | 0.8% | (2.0%) |
| EBITDA | 56.8 | 54.2 | 4.8% | 1.9% |
| EBITDA margin | 7.6% | 7.1% | ||
Revenue
Revenue from other countries in 2011 came to € 743.7m, a decrease of 4.1% on the previous year’s € 760.1m (–2.2% at current exchange rates). Good performance at airports made up for part of the decline in the motorway channel, where more than 20 locations were closed according to plan.
Motorway revenue was down by 8.5% (–6.9% at current exchange rates), the combined effect of lackluster traffic and the planned closure of various non-performing locations, mainly in France and Belgium.
In the airport channel, revenue grew by 5.1% (+7.7% at current exchange rates), but slowed in the second half of the year.
Revenue in other channels decreased due to the downward trend at shopping center locations and the disposal of some of these outlets, which was partially offset by new openings at railway stations in Spain and Belgium.
EBITDA
EBITDA for the year came to € 56.8m, up from € 54.2m in 2010 (+1.9%, +4.8% at current exchange rates), thanks in part to net non-recurring income of € 1.4m (€ 5m for the sale of locations in Belgium less reorganization costs of € 3.6m). The EBITDA margin rose from 7.1% to 7.6%, rewarding efforts to boost profitability and limit investments with respect to growth, including through the closure of unprofitable locations.