Dufry Ag Lse ((CH:AVOL)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Dufry AG LSE’s recent earnings call painted a picture of robust performance despite facing geopolitical challenges and regional weaknesses, particularly in North America and the Middle East. The company showcased strong growth and margin improvements, driven by the expansion of its loyalty program and successful capital management. However, concerns were raised due to regional challenges and flat growth in North America.
Strong Organic Growth
Dufry AG LSE reported a commendable growth at constant exchange rates of 7.1% for the first half of 2025, with organic growth reaching 5.7%. This performance is notable given the global challenges faced, highlighting the company’s resilience and effective strategies.
EBITDA Margin Expansion
The company achieved an EBITDA margin improvement of 30 basis points, bringing it to 9.3%. This expansion falls within the midpoint of their guidance, demonstrating effective cost management and operational efficiency.
Equity Free Cash Flow
The equity free cash flow exceeded expectations, coming in at CHF 216 million. This positive cash flow performance underscores the company’s strong financial health and ability to generate cash.
Club of Bolta Growth
Dufry’s loyalty program, the Club of Bolta, continues to grow, reaching 13 million members. The program is adding approximately 0.5 million new members each month, significantly contributing to the company’s sales and customer retention efforts.
Deleveraging Progress
The company made significant progress in deleveraging, with the net debt to EBITDA ratio reduced to 2.15x from 2.35x. This brings the company closer to its medium-term target of 1.5 to 2x, reflecting prudent financial management.
North America Performance
Organic growth in North America remained flat, primarily due to a lower number of domestic passengers. This stagnation impacted the overall results, highlighting a regional challenge that needs addressing.
Middle East Crisis Impact
The geopolitical crisis in the Middle East had a negative impact on growth, reducing it by approximately 0.2% to 0.3%. This underscores the external challenges the company faces in maintaining its growth trajectory.
Challenges in Asia Pacific
Dufry faced challenges in the Asia Pacific region, leading to negotiated early terminations. While specifics were not disclosed, this indicates a need for strategic adjustments in the region.
Forward-Looking Guidance
Looking ahead, Dufry AG LSE remains optimistic, projecting 5% to 7% organic growth and an EBITDA margin expansion of 20 to 40 basis points. The company plans to continue its focus on diversification, innovation, and strategic capital allocation, with an emphasis on customer satisfaction and shareholder value through dividends and share buybacks.
In summary, Dufry AG LSE’s earnings call highlighted a strong performance amid global challenges, with significant growth and margin improvements. While regional challenges persist, the company’s strategic initiatives and financial management position it well for future growth. The expansion of the loyalty program and focus on shareholder value are key takeaways from this earnings call.