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EurASIA
SOuTH AMErICA
Italy : Milan, Rome, Bergamo,
Florence, Genoa, Naples, Turin,
Venice, Verona
France : Nice, Martinique,
Guadeloupe
Spain : Tenerife
Switzerland : Basel-Mulhouse,
Samnaun
Netherlands : Amsterdam
Greece : Diagoras, Eptanisos,
on-board of ferries of Blue-Star
or Superfast
Czech republic : Prague
AFrICA
Tunisia : Tunis, Djerba, Monastir,
Sfax, Tabarka, Tozeur
Egypt : Sharm-el-Sheikh, Assyud,
Borg El Arab
Algeria : Algiers
Morocco : Casablanca, Marrakech,
Agadir, Dakhla, Essaouira, Fez,
Oujda, Rabat, Tanger
Ghana : Accra
Ivory Coast : Abidjan
russian Federation : Moscow
united Arab Emirates : Sharjah
Singapore : Singapore
China: Shanghai
Cambodia : Phnom Penh, Siem Reap
Serbia : Belgrade
Armenia: Yerevan
CENTrAL AMErICA & CArIbbEAN
Mexico: Mexico City, Acapulco,
Algodones, Cancun, Cozumel,
Guadalajara, Ixtapa, Laredo, Leon,
Los Cabos, Mahahual, Mazatlan,
Monterrey, Nogales, Progreso,
Puerto Vallarta, Reynosa
Caribbean Islands:
Dominican Republic, Puerto Rico,
Aruba, Antigua, Bahamas, Barbados,
Bonaire, Grand Turk, Grenada,
Jamaica, St Kitts, St Lucia, St Maarten,
Trinidad
Nicaragua: Managua, El Espino,
Guasaule, Las Manos, Peñas Blancas
Honduras: Roatan
Cruise Lines: on-board of ships of
Norwegian Cruise Lines
brazil: Rio de Janeiro, São Paulo,
Brasilia, Belém, Belo Horizonte,
Campinas, Curitiba, Fortaleza, Natal,
Porto Alegre, Recife, Rio Grande,
Salvador
Argentina: Buenos Aires, Cordoba,
Mendoza, Bariloche
bolivia: La Paz, Santa Cruz
Ecuador: Guayaquil
uruguay: Montevideo, Punta del Este
NOrTH AMErICA
Canada: Vancouver, Calgary,
Edmonton, Halifax
united States: Over 60 cities including
Albuquerque, Anchorage, Baltimore,
Birmingham, Boston, Charleston,
Chicago, Cleveland, Dallas, Denver,
Ft Lauderdale, Houston, Las Vegas,
Los Angeles, Manchester, Memphis,
Miami, Nashville, New Orleans,
New York, Newark, Norfolk, Omaha,
Orlando, Philadelphia, Phoenix,
Pittsburgh, Portland, Raleigh,
Richmond, Rochester, San Francisco,
San José, Seattle, Washington
Dufry’s Performance 2011
At constant exchange rates (CER2)
Turnover
in millions of CHF
Gross profit
in millions of CHF
In 2011, Dufry achieved 16.5% turnover growth and an EBITDA1 of 14.3% of turnover.
IN MILLIONS OF CHF
Turnover
Gross Profit
Selling expenses
Personnel expenses
General expenses
EbITDA1
ACTuAL
2011
% OF
TurNOvEr
ACTuAL
AT CEr2 2011
% OF
TurNOvEr
ACTuAL
2010
% OF
TurNOvEr
GrOwTH
AT CEr2
2,637.7
1,535.3
(579.7)
(402.6)
(182.1)
370.9
58.2%
(22.0)%
(15.3)%
(6.9)%
14.1%
3,040.8
1,769.2
(668.5)
(459.1)
(206.1)
435.5
58.2%
(22.0)%
(15.1)%
(6.8)%
14.3%
2,610.2
1,501.9
(584.8)
(398.9)
(175.1)
343.1
57.5%
(22.4)%
(15.3)%
(6.7)%
13.1%
16.5%
17.8%
26.9%
2700
2400
2100
1800
1500
1200
900
600
300
0
1800
1600
1400
1200
1000
800
600
400
200
0
Margin
64 %
62 %
60 %
58 %
56 %
54 %
52 %
50 %
48 %
46 %
Turnover and EBITDA1 growth
in millions of CHF
Actual
Actual at CEr 2
3600
3200
2800
2400
2000
1600
1200
800
400
0
2610
2638
2610
3041
343
371
343
436
Turnover growth bridge
in %
22.5%
20.0%
17.5%
15.0%
12.5%
10.0%
7.5%
5.0%
2.5%
0.0%
6.7%
(2.5)%
16.5%
(15.4)%
4.8%
7.5%
1.1%
2007
2008
2009
2010
2011
2007
2008
2009
2010
2011
EBITDA¹
in millions of CHF
+62 %
+13%
+3%
+14%
+8%
Net earnings
in millions of CHF
360
320
280
240
200
160
120
80
40
0
180
160
140
120
100
80
60
40
20
0
2010
Turnover
2011
EBITDA1
2010
2011
Like-for-like growth
Closed shops
Exchange rate effect
1 EBITDA before other operational result
Adjusted net earnings without other operational result
2007
2008
2009
2010
2011
2007
2008
2009
2010
2011
New shops
Acquisitions
Growth at CER
Reported growth
Turnover and EBITDA1 per region
at CER 2
Net sales by region 2011
Net sales by product categories 2011
IN MILLIONS OF CHF
Europe
Africa
Eurasia
Central America & Caribbean
South America
North America
Distribution Centers
Eliminations
Dufry Group
2011
336.8
156.7
249.0
431.5
1,015.3
825.8
818.4
(792.7)
3,040.8
TurNOvEr
2010
310.8
184.1
229.1
400.0
713.3
755.8
532.2
(515.1)
2,610.2
2011
13.9
21.3
20.9
33.5
164.7
92.3
88.9
435.5
EbITDA1
2010
7.4
29.3
11.2
23.6
136.5
78.9
56.2
343.1
1 EBITDA before other operational result
2 At exchange rates of same periods 2010 (acquisitions considered at actual rates)
Europe 12 %
Africa 5 %
Eurasia 8 %
Central America &
Caribbean 14 %
South America 34 %
North America 27 %
Perfumes and Cosmetics 26 %
Confectionery, Food and Catering 17 %
Wine and Spirits 16 %
Watches, Jewelry and Accessories 10 %
Literature and Publications 9%
Fashion, Leather and Baggage 8 %
Tobacco goods 7 %
Electronics 3 %
Other 4 %
Net sales by channel 2011
Net sales by market sector 2011
Airports 88 %
Cruise liners and seaports 4 %
Downtown, hotels and resorts 3 %
Railway stations and other 5 %
Duty Free 66 %
Duty Paid 34 %
Dufry AnnuAl report 2011
1
Company report
02 Message from the Chairman of the Board of Directors
04 Statement of the Chief executive officer
08 Group executive Committee
10 Board of Directors
24 Dufry business model
30 Dufry retail concepts
42 report of the Chief financial officer
49 Corporate Governance
FinanCial report
81 Consolidated financial statements
88 notes to the consolidated financial statements
156 report of the auditors
158 financial statements Dufry AG
160 notes to the financial statements
165 Appropriation of available earnings
166 report of the auditors
other inFormation
Information for investors and media
168
169 Address details of headquarters
2
Dufry AnnuAl report 2011
meSSaGe From the Chairman
oF the BoarD oF DireCtorS
Dear Shareholders
2011 was a remarkable year for Dufry: We once more achieved a very positive performance.
We grew turnover by 16.5% and eBItDA by 26.9% in constant currencies. the year was
marked by a number of events and developments which impacted our business. Despite
events like the heavy snow storms in the uSA at the beginning of the year or the political
turmoil in northern Africa and its collateral impact on our russian operations, Dufry
generated yet again strong like-for-like growth of 7.5%, thanks mainly to its strong position
in emerging Markets, especially latin America.
2011 was also marked by extreme volatility in foreign exchange markets. the uS Dollar
and the euro, which represent nearly 90% of our sales, softened significantly when com-
pared to our reporting currency, the Swiss franc. As a result, we faced a translational
foreign exchange impact of 15.4% in 2011, in Swiss francs terms. However thanks to the
natural hedging of our business, our profitability remained intact.
We took another important step toward consolidating our leadership position in the
fragmented retail travel industry. In August, we announced the acquisition of duty free
operations in Argentina, uruguay, ecuador, Armenia, and Martinique for a total consider-
ation of uSD 957 million. this series of transactions is yet another milestone in the history
of our company and we are now the market leader in emerging countries, particularly
latin America.
the year marked new activity in the strategically significant region of eurasia. We signed
two important contracts in that region, first in China, where we signed a contract to operate
26 duty-paid stores in the airport of Chengdu; and second in India, where together with our
local partner we signed a contract to open 48 stores under the Hudson news concept in
the Delhi Metro stations. even more recently, we expanded our presence in russia through
an acquisition in early 2012, consolidating and strengthening our position in the Moscow
airport retail.
As a result of our continuous growth in recent years as well as our efforts to expand our
shareholder base, trading volumes for both our shares and BDrs have increased. Compared
to 2010, when we multiplied trading volumes by 5 times, overall daily trading volume
increased by CHf 2.0 million to CHf 11.3 million in 2011. thanks to this development, in 2011
Dufry was included in the SMIM® index of SIX Swiss exchange. the index comprises the
30 largest publicly held mid-cap companies in Switzerland and positions Dufry among
the top 50 Swiss companies.
2011 showed again that our strategy of profitable growth is successful and viable with the
focus on emerging Markets and tourist destinations on one hand, and on risk diversification
through a global footprint on the other hand. our strategy will remain unchanged and we
Dufry AnnuAl report 2011
3
expect to continue gaining market share and consolidating our position in the industry in
the medium term. We therefore propose to carry forward the retained earnings of the Group
to finance the further growth of Dufry.
In 2012, the issues related to sovereign debt both in europe and the uSA will remain an
important topic and there is a wide range of possible outcomes with corresponding impli-
cations on the global economy. Based on the current forecasts of passenger numbers, we
expect that the travel retail market will continue developing positively, with emerging
Markets performing above average. Due to short term uncertainties, we remain alert and
are confident that we are well positioned and prepared for the challenges and opportunities
that may arise.
Dufry is aware of its importance in the communities surrounding its operations. With that in
mind, we have developed social responsibility actions that have become part of our corporate
culture. In Brazil, we mainly support two such programs. We fund a community center in
Igarassu (pernambuco State), operated by SoS Children’s Villages Institution, which provides
shelter, day-care services, classrooms and other services for over 600 people, as well as
basic healthcare and a small drug store. We have also funded a social development program
in rio de Janeiro for over 16 years. each year, it offers vocational training to thirty under-
privileged young people between ages 16 and 18 and includes classes in english, computer
literacy, professional guidance, makeup, team work, leadership skills, ethics and citizenship
skills. Additionally, the Company also contributed to the red Cross Disaster relief fund, and
organized donations to assist victims of Japan’s earthquake and tsunami, and for people
displaced by flooding and other natural disasters across the united States.
on behalf of all the members of Dufry’s Board of Directors, I would like to thank our execu-
tive officers and management, who have successfully implemented our strategy, as well
as our employees for their commitment and contribution. We would also like to thank our
shareholders for trusting us. We will remain committed to create value for the Company
and our shareholders.
Sincerely,
Juan Carlos torres Carretero
4
Dufry AnnuAl report 2011
Statement oF the ChieF
exeCutive oFFiCer
Dear all
Dufry is able to present once more a strong set of results for the financial year 2011.
turnover increased by 16.5% and eBItDA rose by 26.9%, both on constant exchange rates.
Just these two key performance indicators illustrate the resilience of our business to
unexpected changes, such as the political instability that happened in 2011 in the north
of Africa and validate once more our strategy of profitable growth.
In Swiss francs terms, Group turnover reached CHf 2,637.7 million for full year 2011.
the increase in our top-line results was led by 7.5% like-for-like growth, a very strong
performance considering the negative impacts of the political turmoil in north Africa,
the snowstorms in the uSA in January 2011, as well as the effect of the bankruptcy of
Mexicana in Mexico. new concessions and expansions accounted for a net 2.3% turn-
over growth. We added 10,000 square meters to our sales area (net) through new
concessions, expanding our presence in all regions we operate. Among the main de-
velopments in this area, we added 2,500 square meters in Mexico, 700 square meters
in various locations in Brazil, 450 square meters on roatan Island in Honduras and
around 6,000 square meters in 25 locations in the uSA, including Chicago, new york
JfK and Seattle.
Acquisitions contributed 6.7% to the turnover increase in 2011. In August 2011, we ac-
quired airport duty free operations in several emerging Markets. they comprise of the
leading airport duty free retailer in Argentina, with shops at five of the most important
airports in the country, airport retail operations in uruguay, ecuador, Armenia and
Martinique, as well as a logistics platform in South America. overall, these businesses
add more than 13,000 square meters to our operations. All of them have very attractive
long-term concession contracts, complement our existing business in latin America
and strengthen our leading position in this region. We expect to fully integrate these
operations within 24 months and to generate synergies totaling uSD 25 million.
exchange rate swings generated a negative impact when converting figures from local
currencies to Swiss francs of 15.4%, which was minimized by the appreciation of the
uS Dollar and the euro in relation to the Swiss franc in the last quarter.
We further improved the operational performance of our business based on our initiatives
“Dufry plus one” and “one Dufry”. Gross margin climbed further by 70 basis points year-
over-year and reached the Company’s record level of 58.2%. eBItDA margin grew even
stronger by 100 basis points and achieved a new all-time high at 14.1%.
We are pleased with the results we achieved so far with the “Dufry plus one” and “one
Dufry” initiatives. launched in early 2010, they are geared to systematically analyze,
identify and implement operational optimization in our business. As part of the initiatives,
Dufry AnnuAl report 2011
5
we have trained close to half of our sales people at the end of 2011, with the goal that
100% of our sales force will benefit from the same Dufry Sales training by mid 2012. We
also have fine-tuned the product assortment by location, unified promotions planning
and intensified the information exchange with suppliers, e.g. through the supplier ex-
tranet or the brand plans. We have also continued to develop our tools to have a better
understanding of our clients, such as profile studies. on the resources side, we were
able to integrate the financial reporting of the newly acquired companies in less than
two months and it also allowed us to manage foreign exchange fluctuations despite the
high volatility seen in the markets.
Dufry is going to continue with the same focus of increasing its operational capabilities
and delivering a significant organic growth again in 2012.
2012 – another year of growth: russia, China, india, and more …
for 2012, we already laid the groundwork to expand our footprint in region eurasia, in
locations in line with our strategy. Among the most important, I would highlight our entry
into the Indian market through a partnership with InterGlobe. together we will develop
an innovative retail concept named Hudson news Café. Starting at Metro stations in new
Delhi, we plan to open 48 shops with a total retail space of 2,000 square meters.
Another important development in Asia was the signing of a five-year concession agree-
ment in Chengdu, China, to operate 15 brand boutique shops with a total sales area of
1,600 square meters in the new terminal of Shuangliu International Airport. Shuangliu is
the sixth largest airport in China and grew by 16% in 2011, with a total of nearly 29 million
passengers in the period.
furthermore, in January 2012, we expanded in russia acquiring 51% of a local travel
retail operator at Sheremetyevo Airport in Moscow. By adding this business with an annual
turnover of about uSD 50 million, we consolidate our leading position in the fast growing
russian travel retail market. the transaction also includes a commercial and purchasing
agreement for travel retail operations at Vnukovo Airport in Moscow.
We will continue with our strategy of profitable growth also in 2012, based on the current
business: increasing sales on our current shops and adding new spaces. Additionally,
acquisitions will be in due time a key element of growth.
… and strong deleveraging
the integration and ramp up of the new businesses will be a priority for the year to gen-
erate synergies and to maximize cash generation. Both will contribute to a significant
deleveraging, which in turn will provide room for further growth.
6
Dufry AnnuAl report 2011
As for growing organically, prospects remain healthy with around 5% international global
passengers growth expected for 2012. Having said this, on a regional level the deviation
from this number can be significant. We expect emerging Markets in eurasia and latin
America to perform well, and north America has proven to be very resilient over the past
years. europe is in a much more fragile situation and performance will depend on the
measures taken to contain the sovereign debt crisis. In northern Africa, the transition to
new political structures that started a year ago will continue and if this can be managed in
an orderly fashion, growth prospects for this region are intact.
Given the global economic and political situation, this assessment has a degree of uncertainty
and we remain alert to act quickly if this is required. We have prepared an action plan for 2012
that considers the possibility either of a global downturn or a regional one that could happen.
the plan is ready to be implemented in case we need to accelerate the generation of cash,
the control on our investment budget and the efficiency of our cost structure.
Apart from the general resilience of our industry, the low operational leverage and Dufry’s
geographic diversification have proven to be important mitigations in past downturns and
we are confident that Dufry is well prepared to continue on its successful course. Dufry’s
achievements over the last eight years encourage us to tackle challenges and to seek new
opportunities on a daily basis to become the most innovative and successful company in
the travel retail world.
… and delivering
the results obtained in 2011 would not be true without the hard working and commitment
of our employees, including those that joined that year, and on behalf of the management
team I would like to thank everyone. I would also like to thank our customers, for the trust
they put in Dufry and we will continue our efforts to provide customers with the very best
shopping experience. We would also thank our suppliers and landlords, as well as our
shareholders because without their support and trust, we undoubtedly could not achieve
Dufry’s success.
finally I would like also to thank the members of our Board for their continued support and
understanding and the contribution they have done to our success in 2011.
Julián Díaz González
our orGaniZational StruCture
Dufry AnnuAl report 2011
7
Chief
executive officer
Julián Díaz González
Chief
Financial officer
Global Chief
operating officer
Xavier rossinyol
José Antonio Gea
Chief
legal officer
pascal C. Duclos
Chief operating officer
region europe
Chief operating officer
region africa
Chief operating officer
region eurasia
Chief operating officer
region Central
america & Caribbean
Chief operating officer
region South america
Chief operating officer
region north america
Dante Marro
Miguel Ángel Martínez
rené riedi
José H. González
José Carlos rosa
Joseph DiDomizio
8
Dufry AnnuAl report 2011
Group exeCutive Committee
Julián Díaz González, Xavier rossinyol, Miguel Ángel Martínez, Joseph DiDomizio, José Carlos rosa,
José Antonio Gea, pascal C. Duclos, Dante Marro, José H. González, rené riedi
Group exeCutive Committee
Dufry AnnuAl report 2011
9
10
Dufry AnnuAl report 2011
BoarD oF DireCtorS
Juan Carlos torres Carretero, ernest George Bachrach, Joaquín Moya-Angeler Cabrera, Steve tadler, José lucas ferreira de Melo,
Maurizio Mauro, Andrés Holzer neuman, Jorge Born, Xavier Bouton, James Cohen, Mario fontana
Dufry AnnuAl report 2011
11
Juan Carlos torres Carretero, ernest George Bachrach, Joaquín Moya-Angeler Cabrera, Steve tadler, José lucas ferreira de Melo,
Maurizio Mauro, Andrés Holzer neuman, Jorge Born, Xavier Bouton, James Cohen, Mario fontana
europe
Czech republic, france, Greece, Italy,
netherlands, Spain, Switzerland
prague
ruzyne International Airport
new launches of Maybelline
and Body Shop
Basel-mulhouse
International Airport
new Additional brands
in watch section of the main shop
location Departure area
Sales area 855 m2
Brands on offer over 300 brands,
best cigars selection in a cigar room
Guadeloupe
pointe-à-pitre International Airport
new opening of walk-through shop
location Departure area
Sales area 500 m2
Brands on offer over 220 brands,
special spirits selection
of over 100 different rums
martinique
Aimé Césaire International Airport
new operations acquired in 2011,
refurbishment planned in 2012
nice
Aéroport nice Côte d’Azur
tenerife
International Airport
new new Smirnoff
shop-in-shop concept and
tobacco, watch corner
new 2011 lancel collections
location Departure area, terminal 2
Sales area 80 m2
Brands on offer Vast selection
of lancel products
europe
Czech republic, france, Greece, Italy,
netherlands, Spain, Switzerland
13
milan
Malpensa Airport
Shop type Brand boutique location Schengen area, terminal 1
established 2011 Sales area 60 m2 employees 4
offer range Vast selection of Burberry products including clothes, leather
and fashion, accessories, perfumes, watches, and much more
africa
Algeria, egypt, Ghana, Ivory Coast,
Morocco, tunisia
algiers
Houari Boumediene International Airport
new Concessions renewed in 2011
oujda
Angad International Airport
tunis
Carthage International Airport
new Corner opened in 2010
location Departure area, terminal 1
Sales area 20 m2
Brands on offer Maison des Senteurs,
natural cosmetics
new Shop opened in 2011
location Departure area, Main terminal
Sales area 111 m2
Brands on offer perfumes and cosmetics,
spirits, tobacco, food
abidjan
International Airport
new Concessions renewed in 2011
accra
Kotoka International Airport
new Concessions renewed in 2012
location Departure area, Main terminal
Sales area 374 m2
Brands on offer perfumes and cosmetics,
spirits, tobacco, food, local handicrafts
africa
Algeria, egypt, Ghana, Ivory Coast,
Morocco, tunisia
15
alexandria
Borg el Arab Airport
Shop type Duty free store location Departure area, Main terminal
established 2009 Sales area 694 m2 employees 32
offer range Wide selection of perfumes and cosmetics, food, beverages,
spirits, chocolate and confectionery products, textile, leather goods, and many more
eurasia
Armenia, Cambodia, China, russian federation,
Serbia, Singapore, united Arab emirates
moscow
Sheremetyevo International Airport
new Adding nine duty free shops
through regStaer acquisition in 2012
Shanghai
Hong Qiao International Airport
new one of several brand boutiques opened in 2010
location Wing 5, Departure area, terminal 2
Sales area 2,500 m2 shopping mall of different
brand boutiques
Brands on offer Vast selection of Boss accessories
Cambodia
phnom penh International Airport
new new shop opened in 2011
location Departure area, terminal 1
Sales area 677 m2
Brands on offer perfumes and cosmetics,
chocolate and confectionery products, souvenirs, watches,
jewelry, Artisan D’Angkor local craft
Sharjah
International Airport
new opened Hudson
news & Convenience stores in
departure and arrival areas
Singapore
Changi International Airport
new Hudson news & Convenience store opened in 2011
location Departure area, terminal 2
Sales area 724 m2
Brands on offer Magazines, books, travel accessories, premium pens,
electronics, stationary notebooks, gifts
eurasia
Armenia, Cambodia, China, russian federation,
Serbia, Singapore, united Arab emirates
17
yerevan
Zvarnots International Airport
Shop type Duty free walk-through store location Departure area, terminal 1
established 2011 Sales area 1,200 m2 employees 68
offer range over 500 different brands with wide range of local and international spirits,
tobacco, food, fragrances, luxury accessories and many more
Central america & Caribbean
Caribbean Islands, Honduras, Mexico,
nicaragua, Cruise lines
mexico City
Benito Juárez International Airport
new Introducing new brands in
Boulevard I shops, including new MAC corner
and corners for Breitling and Bulgari
location Departure area, terminal 1, Boulevard I
Sales area 242 m2
Brands on offer over 240 different brands
managua
Augusto C. Sandino International Airport
Dominican republic
Santo Domingo International Airport
new refurbished in 2011
location Departure area, north terminal
Sales area 587 m2
Brands on offer Walk-in humidor inside duty free store
with large selection of premium cigars
puerto rico
San Juan International Airport
new refurbishments in different
shops for fashion and jewelry, adding a
Swarovski corner
location Departure area
Sales area 112 m2
Brands on offer over 100 different brands
Barbados
Grantley Adams International Airport
new Adding new assortment of wines in 2011
Central america & Caribbean
Caribbean Islands, Honduras, Mexico,
nicaragua, Cruise lines
19
Cozumel
puerta Maya Cruise terminal
Shop type Duty free Cruise terminal store location Seashore Cozumel Mexico
established 2011 Sales area 941 m2 employees 54
offer range over 200 different brands of perfumes and cosmetics, watches and jewelry,
food, beverages, spirits, chocolate, electronics, travel accessories and many more
South america
Argentina, Bolivia, Brazil, ecuador, uruguay
rio de Janeiro
Galeão International Airport
new Shops restyled in 2011
location Arrival area, terminal 2
Sales area 1,100 m2
Brands on offer over 600 different brands
São paulo
Guarulhos International Airport
new Arrival stores restyled in 2011
Guayaquil
International Airport
new Stores restyled in 2011
Santa Cruz de la Sierra
International Airport
new Departure store opened in 2011
location Departure area
Sales area 437 m2
Brands on offer over 200 different brands
Buenos aires
ezeiza International Airport
new opened Hugo Boss
shop-in-shop in 2011
location Departure area, terminal A
Sales area 2,800 m2
Brands on offer over 1,350 different brands
South america
Argentina, Bolivia, Brazil, ecuador, uruguay
21
montevideo
Carrasco Airport
Shop type Duty free walk-through store location Departure area
established 2004 Sales area 1,200 m2 employees 119
offer range over 500 different brands of perfumes and cosmetics, sunglasses, watches,
food, beverages, spirits, chocolate, textile, leather goods, electronics, tobacco
north america
Canada, united States
houston
Houston Bush Intercontinental Airport
Chicago
o’Hare International Airport
new three duty free shops opened
in 2012 with 656 m2
new two shops opened in 2010–11
location terminal e
Sales area 764 m2
Brands on offer over 300 different brands
albuquerque
Albuquerque Sunport
new four new stores opening in 2012
San Francisco
International Airport
new three new stores opening in 2012
San Diego
International Airport
new nine new stores coming in 2012–2013
new york
Grand Central Station
new restyled in 2010
newark
newark liberty International Airport
new Duty free shops opened in 2010
location terminal C
Sales area 1,022 m2
Brands on offer perfumes, cosmetics,
tobacco, wine, spirits, watches,
jewelry, food, confectionery, fashion, leather,
luggage, sunglasses
23
new york
JfK International Airport
Shop type newsstand & Convenience store location American Airlines terminal 8
established 2007 Sales area 140 m2 employees 6
offer range Magazines, books, souvenirs, candy, snacks, beverages, travel accessories,
health and beauty products, convenience items,
technology products including Sony electronics, and many more
24
Dufry AnnuAl report 2011
our BuSineSS moDel
CreAtInG VAlue
landlords
Customers
Strategy
• 155 airport authorities and
landlords
• over 176,000 m2 of sales area
with high quality concessions
• tailored retail concepts
• top ranked customer services
• Global reach
• Dufry plus one, one Dufry
employees
Suppliers
• Cultural diversity
• Attractive and long-term
employment
• 1,500 suppliers
• Window display for inter-
national brands
Shareholders
Social responsibility
• 23% p.a. of top-line growth
(2003–2011)
• Sustainable returns
• reaching out with a
helping hand
• Support for children
Dufry AnnuAl report 2011
25
Strong fundamentals
Specialty retail in an attractive segment
• Worldwide passenger numbers expected to grow around 4% p.a. in the next 10 years
• Convenience is an important business driver
• no substitution threats
Growth strategy
• Strategy of profitable growth
• focus on emerging Markets and tourist destinations
• Average yearly growth of 23% from 2003 to 2011 (before fX impacts)
Global footprint
• Dufry is the leading travel retailer in the industry
• More than 1,200 shops in 45 countries
expertise in travel retail
• over 60 years of travel retail experience
• Different shop concepts to capture full potential of each location
• Combines local aspects of operations with global best practices
Strong concession portfolio and suppliers relationships
• Broadly diversified concession portfolio with above average duration
• longstanding relationships with suppliers
• full range of top international brands
26
Dufry AnnuAl report 2011
Dufry’s strategy – focused on profitable growth
Dufry defined its corporate strategy of profitable growth with a focus on emerging Markets
and tourist destinations in 2004 and has continuously grown the group ever since. today,
we are the world’s leading travel retailer with more than 1,200 shops in 45 countries on five
continents. With our regional organisation, we combine our global in-depth travel retail
know-how with local expertise, allowing us to expand our business wherever there are
interesting opportunities.
our growth strategy is based on three pillars, namely organic (like-for-like) growth, space
expansion in new and existing concessions, and acquisitions.
like-for-like growth
one of the key drivers in the travel retail industry is passenger numbers as passengers are
our potential customers. Globally, there are some 5 billion people flying every year. More
importantly, this number has been consistently growing in the last ten years at more than
4% p.a. and it is expected that this number will continue to grow in the coming decade and
may reach almost 10 billion air passengers by 2029. for Dufry, this means that the number
of potential customers will continue to grow on average by around 4–5% every year and a
substantial part of that growth will take place in emerging Markets, where Dufry already
generates more than 60% of its turnover today. At the same time, we plan to further grow
our productivity, i.e. sales per passenger. We plan to achieve this through the full range of
retail activities, including an assortment customized to the specific passenger profiles,
fine tuning shop layouts and specific marketing activities.
expand retail space
Space expansion is another important element in our strategy and this can be done through
expanding space in existing locations or adding new locations to our concession portfolio.
the increase of retail space in existing locations can generate interesting economies of
scale and often also optimizes the sales potential as the new space complements the exist-
ing offering. new locations are a great possibility to diversify the already broad concession
portfolio and allow addressing new markets, locations and customers. thanks to Dufry’s
global reach, we have a distinct advantage for evaluating and adding new concessions as
our strong regional organisation established in all parts of the world can support any ex-
pansion projects and successfully integrate the new business into the group.
mergers & acquisitions
last but not least, acquisitions have been another feature of our growth strategy. the global
travel retail market is very fragmented and Dufry as a global leader represents about 8%
of the market. Around half of the market is operated by dozens of small and medium-sized
local and regional operators. Due to the dynamic development of the travel and airport
retailing in the past years, the globalisation of major brands and the challenges to profitably
organize global logistics and procurement, travel retail has become more sophisticated
and standards have increased significantly. As a result, we expect consolidation in the
Dufry AnnuAl report 2011
27
industry to continue and we intend to remain an active consolidator in the market. our
long-standing mergers & acquisitions track record combined with our local and regional
teams, allows us to identify, structure, execute and integrate acquisitions quickly. As a
result, we can capture synergies within a short time frame and hence add sustainable value
for our shareholders and stakeholders.
our strategic initiatives “Dufry plus one” and “one Dufry”
In early 2010, Dufry launched the “Dufry plus one” and “one Dufry” initiatives. the two
initiatives are designed as a 360 degree view on our business and aim to systematically
analyse and exploit untapped potential in the organisation with a goal of higher returns
and lower risk.
“Dufry plus one” is targeted to the operational side and consists of a set of projects with
the aim to better analyze and understand customer needs, and to identify new opportunities
in retailing. these projects include review of product assortment, promotion plans, sales
training, new bonus incentive, shop layout and a new website, just to name a few.
We also launched special initiatives, like customer profile evolution and trend studies,
mystery shopper programs, market price perception analysis or market research studies
to constantly refine our commercial concepts. We use such information to set up and ex-
ecute specific commercial plans in the individual markets and to focus on promotional
activities, pricing policies, shop layouts and customer services.
the “one Dufry” Initiative is focused on the resouces and back office part of our business,
and includes all support functions, like finance, legal, tax, risk Management, Hr and It.
the key target there is to increase the effectiveness of the existing resources, to manage
and reduce risks effectively and to generate additional returns by improving the organiza-
tion and workflows. projects include a renewed tax planning, further development of the
international cash pooling solutions, global insurance management, re-organization in
certain regions and new It platforms.
28
Dufry AnnuAl report 2011
unrivalled customer service
net sales by product
categories 2011
More than 1.7 billion international and domestic passengers travel each year through the
airports and other locations where Dufry operates. every day, our sales teams greet
people with different nationalities, interests and styles and make them feel most welcome
in our “Dufry world”.
perfumes and Cosmetics 26%
Confectionery, food and
Catering 17%
Wine and Spirits 16%
Watches, Jewelry and
Accessories 10%
literature and publications 9%
fashion, leather and
Baggage 8%
tobacco goods 7%
electronics 3%
other 4%
Customized shops complemented with a local touch
Dufry designs and builds highly attractive commercial areas to provide its customers with
the best assortment of products and services possible. We use four distinct retail concepts
and customize them to the particular requirements in each specific location. our extensive
local expertise and in-depth travel retail know-how enable us to create a memorable
shopping experience for our customers.
to set up the right combination of general travel retail shops, news and convenience stores,
boutiques or specialized shops within any given space, and to select the right brands and
products from the broad range of over 50,000 items available in our portfolio, we analyse
the customers’ profile and the specific setup of the location. In this context, important pa-
rameters include the type of passengers (departure/arrival), their nationality, and whether
sales are under a duty free regime or duty paid.
a unique customer service covering the whole shopping cycle
the shopping behaviour of people differs significantly as to their preferences of brands and
products, marketing instruments and display in the shops. As we serve customers from
around the globe, it is critical to understand these differences and to accommodate for
customized solutions. We have therefore introduced a unique Global Customer Service
that spans across the entire shopping cycle and supports and covers our customers before,
during and after their purchasing.
Start your journey online
even before traveling and visiting our shops, customers can prepare themselves for their
visit at our shops. our website is available in Chinese, english, french, German, portuguese
and Spanish, and reflects our worldwide presence and activities. It also offers information
on custom allowance regulations for every country in the world and travel tips for some of
the most charming or most exotic places.
furthermore, Dufry’s website in Brazil includes a pre-order service concept that has
been available to Brazilian customers for the last 15 years and is planned to be expanded
and developed internationally. ultimately, it is our goal to allow international customers
to purchase products online by visiting our website at home, in their office or via mobile
internet and to even offer a home delivery service.
Dufry AnnuAl report 2011
29
Dufry Customer Service
enjoy the retail experience when traveling
Shopping when traveling is exciting and combines the thrill of seeing new things with the
comfort of things we know well. Also, the time available to shop can vary substantially. this
is where our sales teams make the difference: our competent sales people assist our
customers during their visit in the shops by answering questions, providing advice and
supporting the decision making process – helping them to get their favorite products quickly
or spending the time to try something new.
At every Dufry location, we operate promotional calendars to enhance the shopping expe-
rience and to attract potential customers. promotions also ensure that our customers can
benefit from new launches, special offers, discounts and gifts, loyalty programs or seasonal
campaigns throughout the year.
a truly global guarantee – 24/7
unique within the travel retail industry is our customer guarantee, in case a product is not
satisfactory: Irrespective of a location where a customer purchased a product, we guarantee
to replace or refund any product within a 30 days period. this guarantee gives comfort to our
customers, even if they buy products at a location where they may not return to again.
A 24 / 7 call center is also available to support our customers on any aspect of the shop-
ping cycle.
After all, our definition of customer service is simple: We want to provide our customers a
good shopping experience, give them the comfort that they make the right buying decision
and that they can rely on Dufry and its global organisation as a trusted retailer, regardless
which Dufry shop they are visiting anywhere in the world.
major awards confirming our strong customer relations
Dufry has won several major awards in 2011: Hudson news was recognized as the “Best
Concessions Winner” in three separate categories – Best news & Gift operator, Best new
Specialty retail Concept and Best Store Design. the awards were the result of an annual
industry-wide poll of north American airport executives conducted by Airport revenue
news (Arn) magazine. furthermore, Dufry Group was rated “Best Airport retailer in the
Americas” in the Duty free news International (DfnI) Awards 2011. these prestigious
awards all confirm the reliable and superior quality of our customer services.
30
Dufry AnnuAl report 2011
our retail ConCeptS
tAIloreD to CuStoMerS’ neeDS
General travel retail shops
Selection of brands:
these shops are either duty free or duty paid shops and can be located in arrival or departure
areas in airports. our offer includes the largest selection of different products and covers
a range of product categories, such as perfumes & cosmetics, food & confectionery, wine &
spirits, tobacco goods, souvenirs, fashion & leather, watches & jewelry, electronics and
other accessories.
In each location, the shop-layout, product assortment and operations are customized to
ensure the highest attractiveness to the respective customer profiles and spending patterns.
As an example, in 16 locations, we operate “walk-through” shops, a particular design where
the entire passenger flow goes directly through the shop on its way to the departure or from
the arrival gate.
one of the main developments in 2011 was the expansion of retail space by about 13,500
square meters through acquisitions in Argentina, ecuador, uruguay, Armenia and Martinique.
Dufry AnnuAl report 2011
31
General travel retail shops
Brand boutiques
Selection of brands:
We operate brand boutiques of some of the most prestigious brands like Armani, Bally,
Bulgari, Burberry, Dunhill, etro, ferragamo, Hermès, lacoste, tumi, Versace, Victoria’s
Secret or Zegna. they can either be found as stand-alone boutiques or integrated as a
shop-in-shop concept within general travel stores. the boutiques carry a single, global
brand and mirror the look-and-feel of the high street shops of the respective brand. thus
we increase recognition and positioning of the brand and allow the customers to shop in
an entirely familiar ambience.
In 2011, we won a contract to operate a total retail space of 2,400 square meters at Shuangliu
International Airport in Chengdu, China. the commercial area which Dufry will start oper-
ating in 2012 comprises 26 duty paid shops and will include a range of brand boutiques
ranging from A like Armani to Z like Zegna. the overall retail space will be structured into
a shopping mall design to create a strong shopping experience for our customers.
32
Dufry AnnuAl report 2011
news and convenience stores
Selection of brands:
the news and convenience stores offer a core assortment of newspapers, magazines and
books, complemented by a broad range of convenience products, such as soft drinks,
confectionery, travel accessories and electronics, or personal care items and souvenirs.
this duty paid concept can be applied at airports at the departure or arrival side or in other
travel spots, such as train stations.
the shops are designed in such a way that consumers can buy quickly their preferred
reading and get something to eat on the go, or cruise with leisure through the shop, if time
allows them to do so. the needs of our customers always come first. When traveling, time
is often of high importance and clear presentation and a strong visualisation of the products
give the traveler a strong incentive to buy.
We operate these stores under the brand name “Hudson news”, which was initially present
in the united States and Canada only. In 2009, Dufry started to roll-out the Hudson news
concept to other parts of the world and by the end of 2011 we operated more than 530 Hudson
news stores in 11 countries.
A major step in 2011 was the association with InterGlobe to establish and operate 48 new
retail outlets under the Hudson news brand at 48 Delhi Metro stations in India. these shops
will all be opened throughout 2012.
Dufry AnnuAl report 2011
33
Specialized shops
Selection of brands:
In particular markets, we aim to capture the full passenger potential by operating specialized
shop concepts. these are boutiques that offer a variety of different brands on one specific
product category. one of our main concepts is Colombian emeralds International (CeI), which
is a dedicated watches & jewelry format focused on the Caribbean market.
each store is adapted to reflect the specific location at airports, seaports, hotels or downtown
locations. Shopping at one of these specialized stores leaves a unique and unforgettable
experience with our customers. regardless of the product being a new watch, jewelry, some
bottles of premium wine, a pair of fancy sunglasses, a box of the finest cigars or the smell
and assortment of chocolate.
34
Dufry AnnuAl report 2011
employees
6
2
5
,
6
:
6
0
0
2
4
9
0
,
7
:
7
0
0
2
7
9
2
,
1
1
:
8
0
0
2
9
0
2
,
1
1
:
9
0
0
2
2
9
8
,
1
1
:
0
1
0
2
4
7
8
,
3
1
:
1
1
0
2
europe 7%
Africa 7%
eurasia 8%
Central America &
Caribbean 18%
South America 25%
north America 35%
employees
our employees are at the heart of our group. It is their strong motivation and dedication to
service our customers, to help them in their decision-making process and support them in
finding the right products every day that make our group the most innovative and successful
travel retail company.
unique cultural diversity
Dufry’s staff is as diversified as its clientele. Dufry employed 13, 874 people at December 31,
2011, an increase of 17% compared to year end of 2010. our workforce comprises people
from more than 70 nationalities across all functions. We view this broad cultural diversity
as a strong competitive advantage that, together with our global customer base, continued
expansion and solid strategy, creates an engaging and truly international working environ-
ment and career opportunity for our employees.
As part of our Human resources strategy, we focus on the key pillars of training and Devel-
opment, reward and recognition. We constantly and systematically invest in our people’s
development and support a broad range of in-house and external training and development
opportunities. our training and development strategy is based on:
Sales and customer care trainings
one of our major programs is the “Dufry plus one” Sales Academy, providing quality training
for our sales people with regards to customer service, sales techniques, product knowledge
and retail processes and procedures. this particular training program is delivered by Dufry
personnel, who go through specific training themselves to qualify as Dufry Certified trainers.
In 2010, when we launched the program, 119 Certified trainers were trained, followed by
another 89 trainers in 2011. During 2011, they trained 3,216 additional Dufry sales profes-
sionals in 38 countries. It is our aim, that by 2012, all our sales professionals will have gone
through the extensive training programs and be certified as Dufry sales professionals.
Development of management skills
A second key element of our long-term Human resources strategy is to develop and grow
the management potential that exists within our own group. Dufry is putting an increased
focus on development of management potential among our teams of shop managers and
supervisors on the shop floor in order to support them with the skills, tools and culture to
manage their operations and teams effectively. Consistently, we have developed and are in
the course of piloting our new “out In front” program. the objective is that by 2014 all our
retail managers have gone through this program. We expect that in the process we will also
create a large pool of retail professionals from which we can fill new or vacant management
positions with internal talents.
Additionally, we actively identify high potential talents in all areas of the business and continue
to grow our offering for such employees. our objective is to increase the percentage of new
and vacant managerial positions filled by internal candidates.
Dufry AnnuAl report 2011
35
international assignments
We also support international assignments, exchange programs and conferences for
qualifying internal candidates. through these opportunities, participants can leverage
their existing know-how, gain exposure to responsibilities outside their core functions and
accumulate a broad and international working experience. this constant exchange of know-
how creates a dynamic and worldwide network of managers, who spread their personal
expertise across the entire Dufry group and enables them to build and intensify a global
network of relationships within our organization.
employees by profession
equal opportunities
We take pride in being an equal opportunities employer and offer career opportunities
without discrimination. Dufry promotes a work environment where everyone, regardless
of gender, color, ethnic or national origins, disability, age, marital status, sexual orientation
or religion, receives equal treatment.
retail operations 83%
other operations 11%
executives, finance, It, Hr 6%
36
Dufry AnnuAl report 2011
Suppliers
Dufry works with more than 1,500 well-known suppliers in the travel retail sector. We follow
a “best brand policy” and have developed the strongest portfolio of brands per product
category and customer segmentation in our industry over the past years.
Close ties with our suppliers
A key tool in our retail activity is the promotional calendar, which lists the marketing
activities for each location throughout the year. It is equally important to our suppliers
and us as the goals are the same: to attract a maximum of potential customers, strengthen
the brand awareness, maximize overall sales, convert non-shoppers to customers and
enhance spend per passenger.
Dufry has a selected pool of suppliers, with which we jointly develop specific marketing
plans and promotional activities for their particular brands. We thereby offer the suppliers
the opportunity to fully leverage Dufry’s retail network globally by combining their regional
and local marketing activities with the window display opportunities at our airports on a
longer-term basis. for the suppliers, this facilitates the planning and can also give a sub-
stantial competitive edge as the brands can target their customers at different locations
in the domestic market and at airports and thus create additional exposure.
Shared extranet to enhance product positioning
Dufry has introduced a suppliers’ extranet in 2010, which allows suppliers to get access to
specific sales data in relation to their products on a location-by-location basis, such as
their market share and ranking of their products. providing specific data across the entire
group through one platform is a very strong proposition and gives the suppliers additional
valuable insights as to their product positioning. At the same time, it allows both suppliers
and Dufry, to work out innovative marketing concepts.
We also share sales forecasting and inventory projections with our major suppliers, in order
for them to plan our replenishment orders in advance. this allows improvements on their
production and manufacturing cycles, and reduces lead times, which gives both business
partners higher productivity at shorter notice.
Complex logistics
Dufry ships more than 20 containers each day and moves over 70 million product items per
year to all our locations in 45 countries. As legislations are different in each country, logistics
is therefore complex. We have developed a strong logistics platform, which allows us to
centralize the orders through our purchasing companies from our locations and together
with our external logistics partners distribute the goods worldwide. overall, six major ware-
housing and distribution centers are operated by us or our logistics partners that allow to
efficiently procure, consolidate and distribute goods to each of our locations.
Dufry AnnuAl report 2011
37
Airport authorities & landlords
Strong relationships with airport authorities and other landlords are key to the success of
our business, as operating at major travel locations means to share the infrastructure with
other service providers.
Broadly diversified concession portfolio
over the years, Dufry has successfully built a portfolio of concession contracts that is highly
diversified and of outstanding quality. During fiscal year 2011, Dufry added more than 22,000
square meters of net retail space to its existing portfolio through the opening of new shops,
additional new concessions and the acquisition of operations in five emerging Markets
(Argentina, uruguay, ecuador, Armenia and Martinique). Altogether at the end of 2011, our
concessions spread across 45 countries and include a retail space of over 176,000 square
meters in airports, seaports, train stations and other locations.
Concessions can be won through tenders or negotiated directly with airport authorities,
be structured as joint ventures with the airport operator or be bought through acquisitions.
Dufry follows a clear policy whenever looking at expanding the concession portfolio. We
will analyse the concession fee levels and the duration of the contract, and also assess the
development potential of the location from retail as well as travel perspectives. We also
take into consideration any execution or operational complexities. through a strict evalu-
ation of these criteria, we ensure that our concession portfolio remains of the highest
quality and that each concession offers attractive returns for our group.
Duration
our concession portfolio also has an above average duration in the industry. Based on net
sales in 2011, about 45% of our sales was generated based on concession contracts with a
remaining lifetime of more than 5 years. 31% of our revenues was even achieved in locations
with concession contracts of more than 10 years.
38
Dufry AnnuAl report 2011
Sustainable returns for shareholders
our corporate strategy of profitable growth is designed to create sustainable shareholder
value. Since 2003, Dufry has achieved a compound annual growth rate of over 23% on
turnover and multiplied eBItDA by more than ten times. over the last eight years, gross
margins have also been improved by 11.8 percentage points to 58.2% and the eBItDA
margin increased by 6.9 percentage points to 14.1%.
Dufry enters the Smim index
over the last years, we have always enjoyed a broad international shareholder base. In
order to increase interest in our company and liquidity in our share trading, we undertake
regular roadshows to institutional investors and place highest importance to an open dia-
logue and communication with the financial community.
In September 2011, our shares became part of the SMIM® index in Switzerland, which
comprises the largest 30 mid-cap stocks in the Swiss equity market. our strong operat-
ing performance, the continuous investor relations activities and our separately listed
Brazilian Depository receipts at the BM & fBoVeSpA in São paulo, Brazil, have all con-
tributed to increase the daily average volume of our shares by 21% to approximately
CHf 11 million per day.
our approach to risk management
Correctly assessing the risks of our group is key to a successful management process.
We mitigate risks wherever possible and actively manage those risks that are unavoidable
as part of our business operations.
Dufry operates a systematic risk management and continuously improves its risk manage-
ment tools. We measure our operational performance with clearly defined indicators, such
as spend per passenger, gross margins, net working capital ratios and operating profits
on the day-to-day management. When assessing new projects and operations, we also
place high importance on additional cash flow models, return on investment and internal
rates of return.
Another important component of our risk management is that we identify and quantify the
risks related to our activities, whenever possible. If ever possible, we seek to mitigate risks
by implementing structures that minimize the risks. If this is not possible, we will seek to
cover those through instruments, insurances, or contractual arrangement. the remaining
business risks are mitigated through our corporate strategy of diversification. Being active
in a large number of countries, and working with different suppliers and landlords, reduces
the concentration risk in operations and sourcing.
Dufry AnnuAl report 2011
39
Dufry AG share price and trading volume
Share price
in CHf
trading volume
millions of CHf
Daily average volume
millions of CHf
165
150
135
120
105
90
75
60
45
30
15
0
11.3
9.3
70
60
50
40
30
20
10
0
11
10
9
8
7
6
5
4
3
2
1
0
3.1
2.7
1.7
Q1/10
Q2/10
Q3/10
Q4/10
Q1/11
Q2/11
Q3/11
Q4/11
2007
2008
2009
2010
2011
Dufry
SpI
Volume
Source: Bloomberg
note: SpI Index has been rebased to Dufry’s share price
note: Since April 2011 including trading volumes of
Dufry AG BDr
Shareholder structure
January 31, 2012
Market capitalization and free float
billions of CHf, December 31
Advent funds 14.4%
travel retail Investments SCA 8.2%
Hudson Media 4.3%
free float 73.1%
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
1.8
1.1
1.3
0.6
0.6
0.3
3.4
2.5
2.3
1.7
2007
2008
2009
2010
2011
Market Capitalization
free float
40
Dufry AnnuAl report 2011
Social responsibility
At Dufry, we are all proud to help those most in need – disadvantaged children. We have
been concentrating our children support activities on two important projects in Brazil for
many years. In addition, we sponsor a range of cultural events and contribute to charitable
organizations to help the victims of natural disasters.
Support for children in Brazil
In 2009, Dufry funded the construction of a social center in Igarassu. the company has been
financing & supporting the running and training of classes ever since. the center, which is
operated by the SoS Children’s Villages institution, provides shelter and services to more
than 600 people including infants, younger children & teenagers, as well as their mothers.
the center offers day-care and class room facilities, counsel and training for these adults
and children, as well as basic medical care and a small pharmacy.
furthermore, Dufry’s South America operations have been supporting another important
project in Brazil for over 16 years. It is a social promotion program in rio de Janeiro that
offers free professional education to thirty disadvantaged young people every year. the
program can be attended by 16 to 18 year-old teenagers (girls and boys) and covers various
subjects, such as english, computer classes, retail operations, professional orientation,
makeup, teamwork, leadership, ethics and citizenship modules. Complementary, these
students receive free meals, medical and dental care, life insurance, uniform, educational
material and transportation assistance. our employees also participate in the program as
volunteers, serving as mentors to those young people. one of the major objectives of the
program is to increase their chances to find employment in the local labour market. the
average employment rate of young people having completed this program is about 90%,
with some of them also having joined Dufry’s operations in Brazil over the past few years.
for the next years our goal is to expand this project to other cities of Brazil reinforcing our
social commitment with the youngers, future of the society and of the country.
other donations and cultural events
Dufry has also donated to the red Cross Disaster relief fund in 2011, including donations
organized to assist victims of Japan’s earthquake and tsunami, and to people suffering
from flooding and other natural disasters across the united States. Major cultural sponsor-
ships were made to the annual AVo Session (music festival) and Swiss Indoors (tennis
tournament) in Basel, the Arabian Horse festival in Sharjah and sponsoring of the orchestra
of Copacabana fort (guitar orchestra of 10 to 21 year-old musicians) in Brazil.
Dufry AnnuAl report 2011
41
Social Center Igarassu, Brazil
42
Dufry AnnuAl report 2011
report oF the ChieF
FinanCial oFFiCer
Dear all,
Dufry’s operational and financial performance in 2011 was, once again, proof that our
business model is robust. We generated a top line growth of 16.5% on constant fX rates,
which is even more remarkable in light of a series of external factors affecting our
businesses in some regions, such as the snowstorms in the united States early in the
year, or the political crisis in north Africa. Dufry’s business today is geared towards
emerging Markets, which account for over 60% of our turnover and more than 70% of
our eBItDA.
fiscal year 2011 was also the year when we signed important contracts to acquire several
businesses in latin America and eurasia for a total consideration of uSD 957 million.
furthermore, we made our debut in India, a promising market, and we expanded our footprint
in China. last but not least, we also signed a contract to grow our business in the attractive
russian market in early 2012. By following our strategy of diversifying our operations, we
have managed to record continued organic growth and improve our profitability. We have
also grown faster than international passenger numbers and achieved unprecedented
profitability levels.
In 2011 we further improved our profitability: Gross Margin went up for the eighth consecutive
year to 58.2% and our eBItDA increased by 26.9% on constant fX rates and eBItDA margin
reached 14.1%. net earnings reached CHf 134.9 million for the year.
evolution Dufry Group 2003–2011:
turnover (CHf millions)
eBItDA1 (CHf millions)
retail surface (m2)
Airports
¹ eBItDA before other operational result
2 CAGr 2003–2011
2003
686
49
36,750
47
2011
2,638
371
176,462
155
CaGr2
18%
29%
22%
16%
Strong turnover growth of 17% in 2011 and 23% p.a. since 2003 …
turnover
turnover increased by 16.5% in 2011 based on constant fX rates with like-for-like growth
contributing 7.5 percentage points. We furthermore expanded our operations through
winning new concessions, which generated a net increase of 2.3% in turnover. finally, we
continued to consolidate the fragmented travel retail industry by acquiring operations in
Dufry AnnuAl report 2011
43
Argentina, uruguay, ecuador, Armenia and Martinique, which together added 6.7% to our
turnover growth. the fX accounting effect of translating our results into Swiss francs was
negative by 15.4%, due to its appreciation of 15% against the uS Dollar and 11% against the
euro. In absolute terms and on constant fX rates, turnover reached CHf 3,040.8 million,
up from CHf 2,610.2 million in the previous year.
Managing the fX aspect is important for our business as we report in Swiss franc but
generate 80% of our turnover in uS Dollars. Across our group, we have a very strong natu-
ral hedging in place as we price and purchase in the same currency in each country and
thus minimize the fX transaction risk. for the same reason, we also finance ourselves
largely in uS Dollars to match the currency of our liabilities with the ones of our cash flows.
the remaining impact is purely a translation accounting effect that has no impact on the
profitability or cash generation of our business overall.
turnover of region europe increased 8.4% on constant fX rates. After the translation into
Swiss francs, turnover fell 2.1% to CHf 304.3 million. All major operations contributed to
the growth, notably france, which counted on the expansion of the pointe-à-pitre opera-
tions and the addition of Martinique. Spain also performed well as some of the tourist flows
shifted to europe due to the political turmoil in northern Africa.
region africa’s turnover was negative by 14.9% on constant fX rates. After the translation
into Swiss francs, turnover reached CHf 138.1 million. the political turmoil that hit north
Africa in early 2011 was the key reason for this weak performance; whereas egypt and Ivory
Coast saw a mild recovery throughout the year, tunisia was affected during most of the
year. Morocco on the other hand proved to be stable.
In region eurasia turnover increased 8.7% on constant fX rates. After the translation into
Swiss francs, turnover fell 6.0% to CHf 215.4 million. our russian operations recorded
double-digit growth after a weak first quarter when most flights to north Africa were
canceled due to political crisis in the region. the other operations in the region also per-
formed well, most notably Sharjah and Cambodia. our duty paid business in China also
saw a solid growth.
turnover in region Central america and Caribbean rose 7.9% on constant fX rates. When
translated into Swiss francs, turnover fell 7.9% to CHf 368.3 million. the expansion of our
activities in Mexico contributed to this result, as did the recovery of our business in the
country in the fourth quarter, when the filing of the Mexican equivalent of a Chapter 11
process by Mexicana, one of the incumbent airlines, one year earlier started to impact our
performance. Most Caribbean operations also performed well and especially our operations
in Dominican republic continued to thrive.
44
Dufry AnnuAl report 2011
region South america reported a growth rate of 42.3% in constant fX rates. translated
into Swiss francs, turnover increased 24.1% to CHf 885.9 million. our recent acquisitions
in Argentina, uruguay and ecuador contributed 23 percentage points to growth since the
consolidation in August 2011. the existing business in the region also performed very well
with double-digit growth on the back of higher passenger numbers and further improve-
ments in productivity. towards the end of the year, the capacity constraints in some of the
Brazilian airport started to limit the growth in those operations.
region north america reported an increase in turnover of 9.3% to CHf 700.5 million on
constant fX rates. translated into Swiss francs, turnover fell 7.3% in the period. the good
result was supported by a moderate improvement in the region’s macroeconomic scenario
and the constant growth in the passenger numbers, after a mixed performance early in
the year, due to the snowstorms at the east Coast. We continued to expand our Hudson
news concept as well as our duty free operations and this expansion also contributed to
this good performance.
Growth at constant fX rates:
in millionS oF ChF
turnover at constant fX rates
turnover translated into CHf
eBItDA at constant fX rates
eBItDA translated into CHf
2011
3,040.8
2,637.7
435.5
370.9
Growth rate
2011 in %
16.5%
1.1%
26.9%
8.1%
2010
2,610.2
2,610.2
343.1
343.1
…with further improvement of operating performance…
Gross profit: from 46.2% in 2003 to 58.2% in 2011
Gross profit in 2011 amounted to CHf 1,535.3 million, with gross margin improving by 0.7
percentage points to 58.2% versus 57.5% in 2010. the global negotiations with suppliers,
branding actions and promotions designed under the “Dufry plus one” initiative were the
key factors to lead us to the eighth consecutive year of gross margin increase.
Selling expenses contained
Selling expenses dropped by 0.9% in absolute terms, reaching CHf 579.7 million in 2011
versus CHf 584.8 million in 2010. As a percentage of turnover, selling expenses improved
to 22.0% from 22.4% in the period.
Dufry AnnuAl report 2011
45
personnel and general expenses remain stable
personnel expenses stayed practically stable at CHf 402.6 million in 2011 compared
to CHf 398.9 million in 2010. As a percentage of turnover, personnel expenses was flat
at 15.3%.
General expenses reached 6.9% of turnover in 2011, compared to 6.7% in the previous year.
expressed in Swiss francs, general expenses increased to CHf 182.1 million in 2011 from
CHf 175.1 million in 2010.
eBItDA reaching CHf 436 million on constant fX from CHf 49 million in 2003
As a result of the gross margin improvement and reduced expenses, eBItDA1 on constant
fX increased by 26.9% and reached CHf 435.5 million. After translation effects, the in-
crease was 8.1% to CHf 370.9 million in 2011 from CHf 343.1 million in 2010. the eBItDA
margin improved by 1.0 percentage point, and reached the record level of 14.1%.
Depreciation and Amortization
Depreciation and Amortization remained practically unchanged at CHf 131.5 million in
2011 from CHf 129.5 million in 2010. Depreciation was lower at CHf 58.8 million in 2011
compared to CHf 63.7 million in 2010. Amortization increased by CHf 6.9 million to
CHf 72.7 million in 2011 due to the acquisitions performed last August and consolidated
into the Group’s financials since that date.
eBIt
eBIt increased to CHf 212.5 million in 2011 versus CHf 197.9 million in 2010. other operational
result (net) was minus CHf 26.9 million in the year. Among this amount, CHf 15.1 million are
transaction cost related to acquisitions as well as certain startup costs.
financial result and taxes
net financial expenses stood at CHf 49.4 million in 2011 compared to CHf 32.2 million one
year earlier. the main reason for the increase was the add-on facility of uSD 1,000 million
that was structured to finance the acquisitions in August.
Income taxes reached CHf 28.2 million, up from CHf 20.9 million in 2010. the tax rate as
a percentage of eBt was 17.3% in the period.
net earnings: further improvements and accretive acquisitions
net earnings attributable to equity holders were CHf 111.9 million in 2011 compared to
CHf 116.6 million in the previous year. excluding the non-recurring acquisition related
cost, net earnings in 2011 were CHf 123.4 million.
¹ before other operational result
46
Dufry AnnuAl report 2011
Consoldiated income statement:
in millionS oF ChF
in %
in millionS oF ChF
2011
net sales
Advertising income
turnover
Cost of sales
Gross profit
Selling expenses
personnel expenses
General expenses
eBitDa (before other operational result)
Depreciation, amortization and impairment
other operational result
earnings before interest and taxes (eBit)
financial expenses, net
earnings before taxes (eBt)
Income taxes
net earnings
AttrIButABle to:
net earnings attribut. to equity holders
non-controlling interest
net earnings to equity holders adjusted for
amortization in respect of acquisitions
Basic earnings per share (in CHf)
Cash earnings per share1 (in CHf)
Weighted average number of outstanding shares
(in thousands)
¹ adjusted for amortization of acquisitions
100.0%
41.8%
58.2%
22.0%
15.3%
6.9%
14.1%
5.0%
8.1%
1.9%
6.2%
1.1%
5.1%
2,560.9
76.8
2,637.7
(1,102.4)
1,535.3
(579.7)
(402.6)
(182.1)
370.9
(131.5)
(26.9)
212.5
(49.4)
163.1
(28.2)
134.9
111.9
23.0
169.2
4.16
6.30
26,873
2,533.5
76.7
2,610.2
(1,108.3)
1,501.9
(584.8)
(398.9)
(175.1)
343.1
(129.5)
(15.7)
(197.9)
(32.2)
165.7
(20.9)
144.8
116.6
28.2
164.5
4.63
6.54
25,166
2010
in %
100.0%
42.5%
57.5%
22.4%
15.3%
6.7%
13.1%
5.0%
7.6%
1.2%
6.3%
0.8%
5.5%
Dufry AnnuAl report 2011
47
Core epS were CHf 6.30 for the year and excluding the acquisition related transaction
cost, pro forma core epS for 2011 was CHf 6.72 versus a core epS in 2010 of CHf 6.54.
the acquisitions were already accretive at core epS level when excluding non-recurring
transaction cost and will start to be accretive on basic epS in 2012.
… and strong cash flow generation…
Cash flow and debt
our business is characterized by robust cash generation. In 2011, Dufry continued this
trajectory with a free cash flow generation of CHf 248.9 million. the average free cash
flow in the last 5 years has been around CHf 213 million, which illustrates the strong
cash flow generation of our group as well as the resilience of our business.
net debt decreased to CHf 1,361.4 million at the end of December 2011, compared to
CHf 1,399.9 million at September 30, 2011. the main covenant, net Debt/adjusted eBItDA
was 3.60x as per December 31, 2011.
the acquisitions done in 2011 were also important in terms of Dufry’s financing structure.
We were able to fully finance the transactions through a new committed 5-year syndi-
cated add-on facility of uSD 1 billion, which illustrates the important backing Dufry gets
from its core group of banks. We will use the strong cash generation of our business to
reduce debt, in line with the deleveraging profile in previous transactions.
… providing scope for further development
With the acquisitions made in 2011, Dufry further strengthened its leading position in
the travel retail market and further diversified its operations into emerging countries.
the new operations in Argentina, uruguay, ecuador, Armenia, and Martinique, do provide
substantial synergy potential and the realization of these synergies will contribute to
eBItDA in the next years.
Dufry also made an important step on the equity market side. Since 2010, average daily
trading volumes increased considerably and in 2011 reached CHf 11.3 million on average.
this together with our increase in free float in 2010, resulted in the inclusion of Dufry in
the SMIM® index of the SIX Swiss exchange in 2011, which has made the Company one
of the 50 largest publicly held companies in Switzerland.
48
Dufry AnnuAl report 2011
the year 2011 was an important milestone in our history of growth and value creation,
becoming our basis for even greater challenges in the years to come. We count on a
well designed strategy and on the commitment of a motivated team to face these
challenges.
I would like to thank our partner banks, shareholders, investors, analysts and key
advisors for their support and contribution in 2011. I specially thank the whole Dufry
team for their commitment and the excellent work done in another challenging year,
and we are looking forward to an exciting 2012.
Xavier rossinyol
Dufry AnnuAl report 2011
49
Corporate GovernanCe
Dufry IS CoMMItteD to GooD
CorporAte GoVernAnCe
1. Group structure and shareholders
1.1 Group structure
for an overview of the management organizational chart and operational Group structure,
please refer to page 7 of this Annual report.
listed companies
Company
listing
Dufry aG, hardstrasse 95, 4052 Basel, Switzerland
(hereinafter “Dufry aG” or the “Company”)
registered shares:
SIX Swiss exchange
Brazilian Depositary receipts (BDrs):
São paulo Stock exchange
(BM&fBoVeSpA – Bolsa de Valores de São paulo), Brazil
Market capitalization
CHf 2,332,092,749 as of December 31, 2011
percentage of shares
held by Dufry AG
Security numbers
0.4% of Dufry AG share capital as of December 31, 2011
registered shares:
ISIn-Code CH0023405456, Swiss Security-no. 2340545
ticker Symbol Dufn
Brazilian Depositary receipts (BDrs):
ISIn-Code BrDAGBBDr008
ticker Symbol DAGB11
non-listed companies
for a table of the operational non-listed consolidated entities please refer to page 154 in
section financial Statements of this Annual report1.
1 Including the company names, locations, percentage of shares held, share capital.
50
Dufry AnnuAl report 2011
1.2 Significant shareholders
pursuant to the information provided to the Company by its shareholders in compliance
with the Swiss Stock exchange Act during 2011, the following significant shareholders held
more than 3% of the share capital as of December 31, 20112:
ShareholDer
perCentaGe
Group of shareholders consisting of:
1. Global retail Group S.à r.l. (1), controlled by funds managed by
Advent International Corporation (2)
2. travel retail Investment SCA (3), controlled by funds managed by
Advent International Corporation (2); other shareholders
are petrus pte ltd (4) and Witherspoon Investments llC (5)
Artio Global Management llC (6)
Credit Suisse Group AG (7)
Group of funds jointly controlled by:
Skopos Administradora de recursos ltda (8) and
Skopos Invest Administradora de recursos Internacionais ltda (9)
Hudson Media Inc. (10)
22.62%
7.07%
6.81%
4.43%
4.28%
(1) 76 Grand rue, l-1660 luxembourg City, Grand Duchy of luxembourg.
(2) 75 State Street, Boston, MA 02109, uSA.
(3) 76 Grand rue, l-1660 luxembourg City, Grand Duchy of luxembourg.
(4) 8 Cross Street, #11-00 pWC Building, Singapore 048424.
(5) 1209 orange Street, Wilmington, De 19801, uSA.
(6) 330 Madison Avenue, new york, ny 10017, uSA.
(7) paradeplatz 8, postfach, 8070 Zurich, Switzerland. Shareholding held indirectly through various subsidiaries and in-
vestment funds controlled by Credit Suisse Group AG.
(8) Alemada tocantins, 75 1st floor, room 101-Alphaville, Barueri, Sp, 06455-020, Brazil.
(9) rua Viradouro, 63, Conjunto 42, São paulo, Sp, 04538-110, Brazil.
(10) one Meadowlands plaza, Suite 902, east rutherford, nJ 07073, uSA. Hudson Media Inc. is controlled by James Co-
hen, c/o Hudson Media Inc., one Meadowlands plaza, Suite 902, east rutherford, nJ 07073, uSA.
Global retail Group S.à r.l., travel retail Investment SCA, petrus pte ltd, Witherspoon
Investments llC and funds managed by Advent International Corporation constituted a
group for purposes of the disclosure obligation pursuant to Art. 20 of the federal Act on
Stock exchange and Securities trading (SeStA) as of December 31, 2011. travel retail
Investment SCA and Global retail Group S.à r.l. were direct shareholders of Dufry AG,
holding 14.38% and 8.24% respectively of Dufry on December 31, 2011. Both travel retail
Investment SCA and Global retail Group S.à r.l. were controlled by funds managed by
Advent International Corporation; other shareholders of travel retail Investment SCA
are petrus pte ltd, who is an affiliate of Mr. Andrés Holzer neumann and his family, and
Witherspoon Investments llC, holding on December 31, 2011, 41.74% and 2.08% respectively
of travel retail Investment SCA.
2 the actual shareholdings may differ from the figures indicated in the table, as the Company must only be notified by its
shareholders, if one of the thresholds defined in Art. 20 of the Swiss Stock exchange Act is crossed.
Dufry AnnuAl report 2011
51
funds managed by Advent International Corporation, petrus pte ltd and Witherspoon
Investments llC, entered into a shareholders’ agreement to govern their relationship as
shareholders of travel retail Investment SCA. this agreement provided that the funds
managed by Advent International Corporation would have a right of first refusal should
either petrus pte ltd or Witherspoon Investments llC wish to transfer their holdings in
travel retail Investment SCA. In addition, if a third party offered to acquire all the interests
in travel retail Investment SCA and the funds managed by Advent International Corporation
decided to transfer their entire interest in travel retail Investment SCA to that third party,
then the funds managed by Advent International Corporation had the right to compel the
other shareholders to transfer their entire holding in travel retail Investment SCA to that
third party by exercising their drag-along rights.
on february 3, 2012, Dufry received disclosure notices that the above mentioned group of
shareholders had changed in its composition as of January 31, 2012. Global retail Group
S.à r.l., controlled by funds managed by Advent International Corporation, left the above
mentioned group of shareholders. Global retail Group S.à r.l. held 14.38% of Dufry as of
January 31, 2012. travel retail Investment SCA, controlled by petrus pte ltd and Wither-
spoon Investments llC held 8.24% of Dufry as of January 31, 2012.
Accordingly, as of January 31, 2012, the following significant shareholders held more than
3% of the share capital:
ShareholDer
perCentaGe
Global retail Group S.à r.l., controlled by funds managed by
Advent International Corporation
travel retail Investment SCA, controlled by petrus pte ltd
and Witherspoon Investments llC
Credit Suisse Group AG
Artio Global Management llC (disclosure notice as of January 24, 2012)
Group of funds jointly controlled by Skopos Administradora de recursos ltda
and Skopos Invest Administradora de recursos Internacionais ltda.
Hudson Media Inc.
14.38%
8.24%
6.81%
4.81%
4.43%
4.28%
Changes of significant shareholders in connection with Art. 20 of SeStA during fiscal year
2011 can be summarized as follows:
Blackrock, Inc., 40 east 52nd Street, new york, 10022 uSA, informed the Company that its
shareholding (held indirectly as a group of companies through various subsidiaries and
investment funds controlled by Blackrock, Inc.) had gone below the threshold of 3% on
March 30, 2011, due to a sale transaction. previous disclosures in fiscal year 2011: Gone
above the threshold of 3% to 3.01% on January 4, 2011 (3.01% purchase positions and 0.001%
sale positions), due to a purchase transaction.
52
Dufry AnnuAl report 2011
Credit Suisse Group AG, paradeplatz 8, postfach, 8070 Zurich, Switzerland, informed the
Company that its shareholding (held indirectly as a group of companies through various
subsidiaries and investment funds controlled by Credit Suisse Group AG) had reached
6.813% on June 6, 2011, due to a change in the group of shareholders’ composition. previ-
ous disclosures in fiscal year 2011: participation changed to 6.947% on April 14, 2011, due
to a change in the group of shareholders’ composition. participation changed to 7.096%
on April 7, 2011, due to a change in the group of shareholders’ composition. participation
changed to 6.5% on february 25, 2011, due to a change in the group of shareholders’
composition. Gone above the threshold of 5% to 5.49% on february 7, 2011, due to a purchase
transaction. Gone below the threshold of 5% to 4.66% on January 26, 2011, due to a sale
transaction. Gone above the threshold of 5% to 5.11% on January 20, 2011, due to a purchase
transaction. Credit Suisse Group AG held 4.99% of the share capital of Dufry AG as of
December 31, 2010.
the Capital Group Companies, Inc., 333 South Hope Street, los Angeles, CA, uSA, informed
the Company that its shareholding (held indirectly as a group of companies through various
subsidiaries and investment funds controlled by the Capital Group Companies, Inc.) had
gone below the threshold of 3% on february 11, 2011, due to a sale transaction. previous
disclosures in fiscal year 2011: participation changed to 3.8252% on february 7, 2011, due
to an exercise of financial instruments, as the investor converted BDrs into registered
shares. the Capital Group Companies, Inc., held 4.21% of the share capital of Dufry AG as
of December 31, 2010.
Wellington Management Company, llp, 280 Congress Street, Boston, MA 02210, uSA,
informed the Company that its shareholding had gone below the 3% threshold on December 6,
2011, as a result of a sale transaction. previous disclosure in fiscal year 2011: Gone above
the threshold of 3% to 3.04% on August 9, 2011, due to a purchase transaction.
further details to the above mentioned disclosures are available on the website of SIX Swiss
exchange on http://www.six-swiss-exchange.wcom/shares/companies/major_shareholders_en.html
1.3 Cross-shareholdings
Dufry AG has not entered into cross-shareholdings with other companies in terms of
capital shareholdings or voting rights in excess of 5%.
Dufry AnnuAl report 2011
53
2. Capital structure
2.1 Share capital
ordinary share capital
As of December 31, 2011:
CHf 134,881,015 (nominal value) divided in 26,976,203 fully
paid registered shares with nominal value of CHf 5 each
Conditional share capital
CHf 2,836,480 (nominal value) divided in 567,296 fully
paid registered shares with nominal value of CHf 5 each
Authorized share capital
none
2.2 Details to conditional and authorized share capital
Conditional share capital
Art. 3bis of the Articles of Incorporation reads as follows:
1. the share capital may be increased in an amount not to exceed CHf 2,836,480 by the
issuance of up to 567,296 fully paid registered shares with a nominal value of CHf 5 each
through the exercise of conversion and/or option rights granted in connection with the
issuance of newly or already issued convertible debentures, debentures with option
rights or other financing instruments by the Company or one of its group companies.
2. the preferential subscription rights of the shareholders shall be excluded in connection
with the issuance of convertible debentures, debentures with option rights or other fi-
nancing instruments. the then current owners of conversion and/or option rights shall
be entitled to subscribe for the new shares.
3. the acquisition of shares through the exercise of conversion and/or option rights and
each subsequent transfer of the shares shall be subject to the restrictions set forth in
Article 5 of these Articles of Incorporation.
4. the Board of Directors may limit or withdraw the right of the shareholders to subscribe
in priority to convertible debentures, debentures with option rights or similar financing
instruments when they are issued, if
a) an issue by firm underwriting by a consortium of banks with subsequent offering to
the public without preferential subscription rights seems to be the most appropriate
form of issue at the time, particularly in terms of the conditions or the time plan of the
issue; or
b) the financing instruments with conversion or option rights are issued in connection
with the financing or refinancing of the acquisition of an enterprise or parts of an
enterprise or with participations or new investments of the Company.
5. If advance subscription rights are denied by the Board of Directors, the following shall
apply:
a) Conversion rights may be exercised only for up to 15 years; and option rights only for
up to 7 years from the date of the respective issuance.
b) the respective financing instruments must be issued at the relevant market conditions.
54
Dufry AnnuAl report 2011
Authorized share capital
As of December 31, 2011, the Company has no authorized share capital.
2.3 Changes in capital of Dufry aG
nominal share capital
Conditional share capital
Authorized share capital
December 31, 2009
December 31, 2010
December 31, 2011
December 31, 2009
December 31, 2010
December 31, 2011
December 31, 2009
December 31, 2010
December 31, 2011
96,069,770
CHf
CHf 134,881,015
CHf 134,881,015
CHf
CHf
CHf
2,836,480
2,836,480
2,836,480
none
none
none
Changes in capital in 2009
the capital of Dufry AG remained unchanged during fiscal year 2009.
Changes in capital in 2010
on february 11, 2010, Dufry AG, Dufry South America ltd (“DSA”) and Dufry Holdings &
Investments AG (“DHIAG”) entered into a merger and amalgamation agreement, pursuant
to which DSA was merged and amalgamated with and into DHIAG (the “Merger”) by way of
absorption in accordance with Art. 3 et seq. of the Swiss federal Act on Merger, Demerger,
Conversion and transfer of liabilities (the “Merger Act”) and Section 104B of the Bermuda
Companies Act. In connection with the Merger, the trading of the shares of DSA on the
luxembourg Stock exchange and of the Brazilian Depositary receipt (“BDrs”) of DSA on
the BM&fBovespa was discontinued. the Company registered with the Comissão de Valores
Mobiliários (“CVM”) and listed its shares in the form of BDrs on the BM&fBovespa.
the General Meeting of Shareholders of the Company approved the Merger and the
necessary capital increase on March 22, 2010. the share capital was increased from
CHf 96,069,770 to CHf 134,881,015 by the issuance of 7,762,249 new registered shares
with a nominal value of CHf 5 each. the pre-emptive rights were withdrawn for valid
reasons in accordance with Art. 652b para. 2 of the Swiss Code of obligations, i.e. the
absorption of DSA by DHIAG, a wholly-owned subsidiary of the Company.
As a result of the Merger, Dufry’s share capital as of December 31, 2010, amounted to
26,976,203 shares with a nominal value of CHf 5 each, and Dufry holds 100% of the com-
bined entity DHIAG – DSA.
Dufry AnnuAl report 2011
55
Changes in capital in 2011
the capital of Dufry AG remained unchanged during fiscal year 2011.
2.4 Shares
As of December 31, 2011, the share capital of Dufry AG is divided into 26,976,203 fully paid
in registered shares with a nominal value of CHf 5 each.
the Company has only one category of shares. the shares are issued in registered form.
All shares are entitled to dividends if declared. each share entitles to one vote. the Company
maintains a share register showing the name and address of the shareholders or usufruc-
tuaries. only persons registered as shareholders or usufructuaries of registered shares
in the share register shall be recognized as such by the Company.
2.5 participation certificates and profit sharing certificates
the Company has not issued any non-voting equity securities, such as participation cer-
tificates (“partizipationsscheine”) or profit sharing certificates (“Genussscheine”).
2.6 limitation on transferability and nominee registration of registered shares
– only persons registered as shareholders or usufructuaries of registered shares in the
share register shall be recognized as such by the Company. In the share register the
name and address of the shareholders or usufructuaries is recorded. Changes must be
reported to the Company.
– Acquirers of registered shares shall be registered as shareholders with the right to vote,
provided that they expressly declare that they acquired the registered shares in their
own name and for their own account.
– the Board of Directors may register nominees with the right to vote in the share register
to the extent of up to 0.2% of the registered share capital as set forth in the commercial
register. registered shares held by a nominee that exceed this limit may be registered
in the share register with the right to vote if the nominee discloses the names, addresses
and number of shares of the persons for whose account it holds 0.2% or more of the
registered share capital as set forth in the commercial register. nominees within the
meaning of this provision are persons who do not explicitly declare in the request for
registration to hold the shares for their own account and with whom the Board of Directors
has entered into a corresponding agreement (see also Art. 5 of the Articles of Incor-
poration). nominees are only entitled to represent registered shares held by them at
a meeting of shareholders provided that they are registered in the share register and
56
Dufry AnnuAl report 2011
they hold a valid written proxy granted by the beneficial owner of the registered shares
instructing the nominee how to vote at the meeting of shareholders. Shares held by a
nominee for which it is not able to produce such a proxy count as not represented at
the meeting of shareholders.
– Corporate bodies and partnerships or other groups of persons or joint owners who are
interrelated to one another through capital ownership, voting rights, uniform manage-
ment or otherwise linked as well as individuals or corporate bodies and partnerships
who act in concert to circumvent the regulations concerning the nominees (esp. as
syndicates), shall be treated as one single nominee within the meaning of the above
mentioned regulation in terms of nominees.
– the Board of Directors may cancel the registration, with retroactive effect if appropriate,
if the registration was effected based on false information or in case of breach of the
agreement between the nominee and the Board of Directors.
– After consulting the party involved, the Company may delete entries in the share register
if such entries occurred in consequence of false statements by the purchaser. the
purchaser must be informed immediately of the deletion.
exceptions granted in the year under review
the Company has registered with the CVM and listed its shares in the form of BDrs on the
BM&fBovespa. each BDr issued by Itaú Corretora de Valores S.A. (“Depositary Institution”)
of the BDr program represents one share issued by the Company and held in custody by
the Bank of new york, in london (“Custodian”).
BDr holders do not own, from a legal point of view, the Dufry AG shares underlying their
BDrs. As a consequence, BDr holders are prevented to exercise directly any of the share-
holders rights provided for by the Company’s Articles of Incorporation and by the Swiss
corporate law. for example, BDr holders are not entitled to personally participate in the
ordinary General Meetings of the Company. However, BDr holders are entitled to instruct
the Depositary Institution to vote the Company’s shares underlying their BDrs, according
to the instructions sent to them by the Depositary Institution.
to facilitate voting by BDr holders, the Company entered into arrangements with the De-
positary Institution and the Custodian to enable, by way of exception, registration of the
Bank of new york in the share register as nominee with voting rights for the number of
registered shares corresponding to the total number of outstanding BDrs. otherwise, no
exceptions have been granted during the year under review.
BDr holders who wish to be in a position to directly exercise any of the shareholders rights
granted by Swiss corporate law or the Company’s Articles of Incorporation must convert
its BDrs into shares of Dufry AG and ask to be registered in the shares register of the
company, pursuant to Art. 5 of the Company’s Articles of Incorporation.
Dufry AnnuAl report 2011
57
required quorums for a change on the limitations of transferability
A change of the limitations on the transfer of registered shares or the removal of such
limitations requires a resolution of the Meeting of Shareholders passed by at least two
thirds of the votes represented and the absolute majority of the nominal value of shares
represented.
2.7 Convertible bonds and options
As of December 31, 2011, there are no outstanding bonds that are convertible into, or warrants
or options to acquire, shares issued by or on behalf of the Company. Dufry has a restricted
Stock unit (rSu) plan, the essentials of which are disclosed under “Compensation, share-
holdings and loans” on page 71.
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Dufry AnnuAl report 2011
3. Board of Directors
3.1 members of the Board of Directors
name
proFeSSion
nationality
poSition
with DuFry
Date oF FirSt
eleCtion
term oF
oFFiCe
other poSitionS
with DuFry 1
Juan Carlos torres Carretero
executive at Advent International
Spanish
Chairman
ernest George Bachrach
executive at Advent International
American
Vice Chairman
Jorge Born
Xavier Bouton
James Cohen
Ceo of Bomagra S.A.
Consultant
Ceo of
Hudson Media Inc.
José lucas ferreira de Melo
Consultant
Mario fontana
Andrés Holzer neumann
Consultant
president of Grupo
Industrial omega
Argentinian
french
American
Brazilian
Swiss
Mexican
Director
Director
Director
Director
Director
Director
Maurizio Mauro
Consultant
Brazilian /Italian
Director
Joaquin Moya-Angeler Cabrera
Consultant
Spanish
Steve tadler
executive at Advent International
American
Director
Director
1 AC: Audit Committee /nrC: nomination and remuneration Committee
2003
2004
2010
2005
2009
2010
2005
2004
2010
2005
2010
2016
2014
2013
2014
2014
2013
2013
2013
2013
2013
2013
AC | nrC
nrC
none
none
none
none
AC
nrC
none
AC
none
Juan Carlos
torres Carretero
Chairman
born 1949
ernest George
Bachrach
Vice Chairman
born 1952
3.2 education, professional background, other activities and functions
education MS in physics from universidad Complutense de Madrid and MS in management
from MIt’s Sloan School of Management.
professional Background Many years of private equity and senior management operating
experience. 1988 Joined Advent International, a private equity firm, in Boston as a partner.
1991–1995 partner at Advent International in Madrid. Since 1995 Managing Director and Senior
partner in charge of Advent International Corporation’s investment activities in latin America.
Current Board Mandates Dufry AG, Inmobiliaria fumisa SA de CV, Controladora Milano
S.A. de C.V., latin American Airport Holding ltd., Aeropuertos Dominicanos Siglo XXI,
S.A., International Meal Company Holdings S.A., Grupo Gayosso S.A. de C.V.
education BS in chemical engineering from lehigh university and MBA from Harvard
Business School.
professional Background More than 22 years of experience in international private equity
investing. 1990 Joined Advent International (Advent) in london as a partner. Since 1995
Managing Advent’s latin American investment activity. Senior partner and member of
the executive Committee of Advent International Corporation.
Current Board Mandates Dufry AG, Advent International Corp., Bunge Group ltd., Grupo
Gayosso S.A. de C.V., Controladora Milano, S.A. de C.V., latin American Airport Holding
ltd., International Meal Company Holdings S.A., Board of Governors of the lauder Institute
at Wharton Business School, and Business Board for regional Development IAe Business
School – universidad Austral.
Dufry AnnuAl report 2011
59
Jorge Born
Director
born 1962
xavier Bouton
Director
born 1950
James Cohen
Director
born 1958
José lucas
Ferreira de melo
Director
born 1956
education B.S. in economics from the Wharton School of the university of pennsylvania.
professional Background 1992–1997 Head of Bunge’s european operations. Before 1997
Various capacities in the commodities trading, oilseeding processing and food products
areas in Argentina, Brazil, the united States and europe for Bunge limited. 2004–2005
Board member of Dufry AG. Since 1997 president and Chief executive officer of Bomgra
S.A., Argentina.
Current Board Mandates Dufry AG, Bunge limited, Hochschild Mining ltd., member of the
Wharton’s latin American executive Board at Wharton Business School, member of the
Board of Governors of the lauder Institute at Wharton Business School, member of the
Board of Georgetown university and fundación Bunge y Born (Chairman).
Mr. Born served as a member of the Board of Directors of Dufry South America ltd. until
its merger with Dufry Holdings & Investments AG in March 2010.
education Diploma in economics and finance from l’Institut d’etudes politiques de Bor-
deaux and doctorate in economics and business administration from the university of
Bordeaux.
professional Background 1978–1984 Director of C.n.I.l. (Commission nationale de
l’Informatique et des libertés). 1985–1994 General Secretary of reader’s Digest founda-
tion. 1990–2005 Board member of laboratoires Chemineau. Since 1999 Chairman of the
Supervisory Board of fSDV (fayenceries de Sarreguemines Digoin & Vitry le françois)
based in paris, france.
Current Board Mandates Dufry AG, ADl partners and f.S.D.V. (fayenceries de Sarreg-
uemines Digoin & Vitry le françois) (Chairman of the Supervisory Board).
education Bachelor’s degree in economics from the Wharton School of the university of
pennsylvania.
professional Background Since 1980 Various positions at Hudson Media Inc (president
and Ceo since 1994).
Current Board Mandates Dufry AG and Hudson Media Inc.
education Bachelor’s degree in Accounting from Associação de ensino unificado do Distrito
federal, Brazil.
professional Background 1979–1991 Various positions at pricewaterhouseCoopers Au-
ditores Independentes. 1992 Director of Brazilian exchange Commission (CVM). 1993 –1997
partner at pricewaterhouseCoopers Auditores Independentes. 1998 partner at Global
Control Consultoria. 1999–2009 executive Director and later Vice-president at uni-
banco – união de Bancos Brasileiros S.A., and unibanco Holdings S.A.
Current Board Mandates Dufry AG, Diagnósticos da América S.A., International Meal
Company Holdings S.A., and Banco Bradesco, S.A.
Mr. ferreira de Melo served as a member of the Board of Directors of Dufry South America
ltd. until its merger with Dufry Holdings & Investments AG in March 2010.
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Dufry AnnuAl report 2011
mario Fontana
Director
born 1946
andrés
holzer neumann
Director
born 1950
maurizio mauro
Director
born 1949
education engineering studies at etH Zurich and Georgia Institute of technology, Master
of Science Degree.
professional Background 1970–1977 IBM Switzerland, sales representative and interna-
tional account manager. 1977–1980 Brown Boveri Brazil, Chief of staff and CIo. 1981–1983
Storage technology Switzerland, General Manager. 1984–1993 Hewlett-packard Switzerland,
General Manager. 1993–1995 Hewlett-packard Germany, General Manager. 1995–1997
Hewlett-packard europe, General Manager. 1997–1999 Hewlett-packard uSA, General
Manager. Since 1998 independent Board member at various public companies. Served
on the Board of Directors of AC-Service, Amazys, Bon appétit Group, Büro fürrer, Inficon,
leica Geosystems, SBB Swiss railways, Sulzer and X-rite.
Current Board Mandates Dufry AG, Swissquote Bank (Chairman), Hexagon AB and regent
lighting (Chairman).
education Graduate of Boston university, holds an MBA from Columbia university.
professional Background Since 1973 president of Grupo Industrial omega, S.A. de C.V.,
the holding company of Holzer y CÌA, S.A. de C.V., Industria nacional de relojes Suizos, S.A.
de C.V., Consorcio Metropolitano Inmobiliario, S.A. de C.V., Inmobiliara Coapa larca, S.A. de
C.V., Inmobiliara Castellanos, S.A. de C.V., and negocios Creativos, S.A. de C.V.
Current Board Mandates Dufry AG, Inmobiliaria fumisa, S.A. de C.V. (Chairman), latin
American Airport Holding ltd., opequimar, S.A. de C.V., and Grupo Domit.
education Bachelor’s in Business Administration from escola de Admionistração de
empresas de São paulo da fundação Getulio Vargas and specialization in Corporate
finance from faculdade de economia e Administração da universidade de São paulo.
professional Background 1986–1988 executive officer of Banco noroeste. 1988–2001
Several managing and consultant positions in Booz Allen Hamilton. left the company
as Senior partner and General Manager for Brazil. 2001–2006 Ceo of the Abril Group.
Current Board Mandates Dufry AG, tecnisa S.A., Banco pine S.A., t4f (time for fun),
and topSport S.A.
Academic activities teaching the discipline of leadership at Insper Instituto de ensino
e pesquisa.
Mr. Mauro served as a member of the Board of Directors of Dufry South America ltd. until
its merger with Dufry Holdings & Investments AG in March 2010.
Dufry AnnuAl report 2011
61
Joaquín
moya-angeler
Cabrera
Director
born 1949
Steve tadler
Director
born 1959
education Master’s degree in mathematics from the university of Madrid, diploma in
economics and forecasting from the london School of economics and political Science
and MBA from MIt’s Sloan School of Management.
professional Background Mr. Moya-Angeler has focused his career on the technology
and real estate industries, including having founded a number of companies. 1994–1997
Chairman of IBM Spain. 1994–1997 Chairman of leche pascual. 1997–2002 Chairman of
Meta4 and tIASA (1996–1998). to date Chairman of redsa since 1997, Hildebrando since
2003, as well as presenzia and pulsar technologies since 2002, la Quinta real estate since
2003, Inmoan since 1989, Avalon private equity since 1999 and Corporación tecnológica
Andalucía since 2005.
Current Board Mandates Dufry AG, Corporación teype, la Quinta Group, palamon
Capital partners, MCH private equity, Industrias Hidráulicas pardo S.l., redsa S.A.
(Chairman), Hildebrando S.A. de C.V., Corporación tecnológica Andalucia (Chairman),
Inmoan S.l. (Chairman), Board of trustees university of Almeria (Chairman), fundación
Mediterránea (Chairman), Avalon private equity (Chairman) and Spanish Association of
universities Governing Bodies (Chairman).
education BS, with distinction, from the university of Virginia and MBA from Harvard
Business School.
professional Background 1981–1984 loan officer at Manufacturers Hanover trust Co.,
providing financing for a number of leveraged buyouts, technology-oriented firms and
special situations. 1985 Joined Advent International’s Boston office, becoming managing
director of the north American buyouts group in 1994. 1997 Moved to Advent’s london
office to head the firm’s european operations and returned to Boston in 2006. Since 2002,
member of Advent’s executive Committee (Chairman). Managing partner of Advent In-
ternational. Serves on each of Advent’s Western europe, Central europe and north
America Investment Advisory Committees.
Current Board Mandates Dufry AG, Advent International Corporation, wte Corporation,
SkillSoft, plC and Bojangles.
Messrs Juan Carlos torres Carretero (Chairman), ernest George Bachrach (Vice Chairman),
and Steve tadler are related to Global retail Group S.à r.l., controlled by funds managed by
Advent International Corporation, which held 14.38% of Dufry’s share capital as of Janu-
ary 31, 2012. Mr. Andrés Holzer neumann is related to a group of shareholders consisting
of travel retail Investment SCA, petrus pte ltd and Witherspoon Investments llC, which
held 8.24% of Dufry’s share capital as of January 31, 2012. See for details the disclosure
under “1.2 Significant Shareholders” on page 50 of this Annual report. All members of the
Board of Directors are non-executive members and they have never been in a management
position at Dufry AG or any of its subsidiaries. for information on related parties and related
party transactions please refer to note 36 on page 139 of this Annual report.
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Dufry AnnuAl report 2011
3.3 election and terms of office
In accordance with Art. 13 of the Articles of Incorporation of the Company:
– the Board of Directors shall consist of at least three and at most eleven members.
– Members of the Board of Directors shall be elected for a maximum term of five years.
A year shall mean the period running between one ordinary Meeting of Shareholders
and the next. previous resignation and dismissal may change the terms of office. new
members elected during the year shall continue in office until the end of their pre-
decessor’s term.
– the Board of Directors shall be renewed by rotation in such manner that, after a period
of five years, all members will have been subject to re-election.
– the members of the Board of Directors may be re-elected without limitation.
At the ordinary General Meeting held on May 11, 2011, Mr. Juan Carlos torres Carretero
was re-elected for a term of office of five years. Mr. ernest George Bachrach was re-elected
for a term of office of three years. Both members of the Board of Directors were elected in
individual elections.
3.4 internal organizational structure
the Board of Directors determines its own organization. It shall elect its Chairman and one
or two Vice Chairmen. It shall appoint a Secretary who does not need to be a member of
the Board of Directors.
the Board of Directors has established an Audit Committee and a nomination and remu-
neration Committee. Both Committees are assisting the Board of Directors in fulfilling its
duties and have also decision authority to the extent described below.
Audit Committee
Members: Joaquín Moya-Angeler Cabrera (Chairman Audit Committee), Juan Carlos torres
Carretero, Mario fontana.
the members of the Audit Committee are non-executive and independent members of
the Board of Directors. An independent member is a non-executive member, has not been
an executive member of the Dufry Group in the last three years and does not have major
business relations with the Company. the members shall be appointed, as a rule, for the
entire duration of their mandate as Board members and be re-eligible.
the Audit Committee assists the Board of Directors in fulfilling its duties of supervision of
management. It is responsible for the review of the performance and independence of the
Auditors, the review of and the decision on the audit plan and the audit results and the
Dufry AnnuAl report 2011
63
monitoring of the implementation of the findings by management, the review of the internal
audit plan, the assessment of the risk management and the decision on proposed measures
to reduce risks, the review of the compliance levels and risk management, as well as the
review to propose whether the Board of Directors should accept the Company’s accounts.
the Audit Committee regularly reports to the Board of Directors on its decisions, assess-
ments, findings and proposes appropriate actions. the Audit Committee generally meets
at the same dates the Board of Directors meetings take place, although the Chairman may
call meetings as often as business requires. the length of the meetings lasted usually for
about 2 to 3 hours in fiscal year 2011, during which the Audit Committee held 5 meetings.
the auditors attended 3 meetings of the Audit Committee in 2011.
nomination and remuneration Committee
Members: ernest George Bachrach (Chairman nomination and remuneration Committee),
Andrés Holzer neumann, Juan Carlos torres Carretero.
the nomination and remuneration Committee assists the Board of Directors in fulfilling
its nomination and remuneration related matters. It is responsible for assuring the long-
term planning of appropriate appointments to the positions of the Chief executive officer
and the Board of Directors, as well as for the review of the remuneration system of the
Company and for proposals in relation thereto to the Board of Directors. the nomination
and remuneration Committee makes proposals in relation to the remuneration of the
Chief executive officer and of the members of the Board of Directors. the Board of Directors
has the ultimate authority to approve such proposals. the nomination and remuneration
Committee decides on possible amendments to the rSu plan and the overall size of the
rSus to be granted under the Company’s restricted Stock unit plan, if any, and makes
proposals on the grant of options or other securities under any other management incentive
plan of the Company, if any. the nomination and remuneration Committee meets as
often as business requires. the length of the one meeting held in the fiscal year 2011
lasted about 3 hours.
Work method of the Board of Directors
As a rule, the Board of Directors meets about five to six times a year (usually at least once
per quarter). Additional meetings or conference calls are held as and when necessary.
the Board of Directors held 7 meetings during fiscal year 2011. the meetings of the Board
of Directors usually lasted half a day. the Chairman determines the agenda and items to
be discussed at the Board meetings. All members of the Board of Directors can request
to add further items on the agenda.
the Chief executive officer, the Chief financial officer, the Global Chief operating officer
and the Chief legal officer, also acting as Secretary to the Board, attend the meetings
of the Board of Directors. other members of the Group executive Committee may attend
meetings of the Board of Directors as and when required. the Board of Directors also
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Dufry AnnuAl report 2011
engages specific advisors to address specific matters when required. Dufry does not
publish further detailed information as to the engagement and/or participation of ex-
ternal advisors in Board meetings (other than information regarding the external audi-
tors) during a fiscal year under review for reasons of competition, as doing so would give
indications to strategic steps and intentions or specific projects that the Company might
actively pursue. the external Auditors attended 3 meetings of the Audit Committee in
fiscal year 2011.
3.5 Definition of areas of responsibility
the Board of Directors is the ultimate corporate body of Dufry AG. It further represents the
Company towards third parties and shall manage all matters which by law, Articles of In-
corporation or Board regulations have not been delegated to another body of the Company.
In accordance with the Board regulations (“organisationsreglement”), the Board of Directors
has delegated the operational management of the Company to the Chief executive officer
who is responsible for overall management of the Dufry Group. the following responsibilities
remain with the Board of Directors:
– ultimate direction of the business of the Company and the power to give the necessary
directives;
– Determination of the organization of the Company;
– Administration of the accounting system, financial control and financial planning;
– Appointment and removal of the persons entrusted with the management and represen-
tation of the Company, as well as the determination of their signatory power;
– ultimate supervision of the persons entrusted with the management of the Company, in
particular with respect to their compliance with the law, the Articles of Incorporation,
regulations and directives;
– preparation of the business report and the Meetings of Shareholders and to carry out
the resolutions adopted by the Meeting of Shareholders;
– notification of the judge if liabilities exceed assets;
– passing of resolutions regarding the subsequent payment of capital with respect to
non-fully paid in shares;
– passing of resolutions confirming increases in share capital and the amendments of the
Articles of Incorporation entailed thereby;
– non-delegable and inalienable duties and powers of the Board of Directors pursuant to
the Swiss Merger Act;
– examination of the professional qualifications of the Auditors;
– to approve any non-operational or non-recurring transaction not included in the annual
budget and exceeding the amount of CHf 4,000,000;
– to issue convertible debentures, debentures with option rights or other financial market
instruments;
Dufry AnnuAl report 2011
65
– to approve the annual investment and operating budgets of the Company and the Dufry
Group; and
– to approve the executive regulations promulgated in accordance with the board regulation.
except for the Chairman of the Board of Directors, who has single signature authority, the
members of the Board have joint signature authority, if any.
3.6 information and control instruments vis-à-vis the Senior management
the Board of Directors ensures that it receives sufficient information from the management
to perform its supervisory duty and to make the decisions that are reserved to the Board
through several means.
– Dufry Group has an internal management information system that consists of financial
statements, performance indicators and risk management. Information to management
is provided on a regular basis according to the cycles of the business: sales on a weekly
basis; income statement, cash management and key performance indicator (KpI) includ-
ing customer, margins and investment information, balance sheet and other financial
statements on a monthly basis. the management information is prepared on a consoli-
dated basis as well as per business unit. financial statements and key financial indicators/
ratios are submitted to the entire Board of Directors on a quarterly basis.
– During Board meetings, each member of the Board may request information from the
other members of the Board, as well as from the members of the management present
on all affairs of the Company and the Group.
– outside of Board meetings, each member of the Board may request from the Chief ex-
ecutive officer information concerning the course of business of the Company and the
Group and, with the authorization of the Chairman, about specific matters.
– the Chief executive officer reports at each meeting of the Board of Directors on the
course of business of the Company and the Group in a manner agreed upon from time
to time between the Board and the Chief executive officer. Apart from the meetings, the
Chief executive officer reports immediately any extraordinary event and any change
within the Company and within the Dufry Group to the Chairman.
– the Audit Committee met 5 times in 2011 with management to review the business,
better understand laws, regulations and policies impacting the Dufry Group and its
business and support the management in meeting the requirement and expectations
of stakeholders. In meetings of the Audit Committee, the Chief financial officer acts as
Secretary to the Committee. the Auditors are invited to the meetings of the Audit Com-
mittee and attended 3 meetings of the Audit Committee in 2011. Among these meetings
some or part of them are also held without management.
– the Internal Audit provides independent and objective assessments of the effectiveness
of the internal control and risk management systems. the selection of Internal Audit
projects is based on risk assessment, with a focus on operational processes, throughout
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Dufry AnnuAl report 2011
the Dufry Group. In fiscal year 2011, the Internal Audit conducted 67 audits, examining
operations in 26 countries. A written report is compiled for every audit by Internal Audit
and includes a defined schedule of concrete steps for implementing the measures that
have been determined. In 2011, a particular focus was, amongst others, on inventory
controls, cash collection and compliance with the rules on capital expenditures. the
results of the Internal Audit report are communicated to management in charge and the
Company’s senior management on an on-going basis and to the Audit Committee on a
quarterly basis. regular follow-up is performed to ensure that risk mitigation and con-
trol improvement measures are implemented on a timely basis.
– the Board of Directors and the Group executive Committee regularly carry out risk
assessments. the objective is to make the principal risks to which Dufry is exposed
more transparent and to improve the quality of the risk dialogue. the principal risks
identified in 2011 are, amongst others, in the areas of valuation of intangible assets,
supply chain expertise, alternative forms of retail distributions, relations with the
airport authorities, product and service quality, acquisition methodology and related
integration capabilities, inventory valuation and management, compliance with debt
covenants and tax accounting.
– Detailed information on the financial risk management is provided in note 38 in the
financial Statements of this Annual report.
Dufry AnnuAl report 2011
67
4. Group executive Committee
4.1 members of the Group executive Committee
As of December 31, 2011, the Group executive Committee comprised ten executives. the
Group executive Committee, under the control of the Chief executive officer, conducts the
operational management of the Company pursuant to the Company’s board regulations.
the Chief executive officer reports to the Board of Directors on a regular basis.
the following table sets forth the name and year of appointment of the current ten members
of the Group executive Committee, followed by a short description of each member’s busi-
ness experience, education and activities:
name
nationality
poSition
appointeD
in year
Julián Díaz González
Xavier rossinyol
José Antonio Gea
pascal C. Duclos
Dante Marro
Spanish
Spanish
Spanish
Swiss
Italian
Miguel Ángel Martínez
Spanish
rené riedi
Swiss
Chief executive officer
Chief financial officer
Global Chief operating officer
Chief legal officer
Chief operating officer
region europe
Chief operating officer
region Africa
Chief operating officer
region eurasia
José H. González
American
Chief operating officer
region Central America & Caribbean
José Carlos Costa da Silva rosa
portuguese
Joseph DiDomizio
American
Chief operating officer
region South America
Chief operating officer
region north America
2004
2004
2004
2005
2002
2005
2000
2002
2006
2008
All employment agreements entered into with the members of the Group executive Com-
mittee are entered for an undefinite period of time.
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Dufry AnnuAl report 2011
Julián Díaz González
Chief executive officer
born 1958
xavier rossinyol
Chief financial officer
born 1970
José antonio Gea
Global Chief
operating officer
born 1963
pascal C. Duclos
Chief legal officer
born 1967
Dante marro
Chief operating officer
region europe
born 1944
4.2 education, professional background, other activities and vested interests
education Degree in business administration from universidad pontificia Comillas
I.C.A.D.e., de Madrid.
professional Background 1989–1993 General Manager at tnt leisure SA. 1993–1997
Division Director at Aldeasa. 1997–2000 Various managerial and business positions at
Aeroboutiques de Mexico SA de CV and Deor SA de CV. 2000–2003 General Manager of
latinoamericana Duty-free, SA de CV. Since 2004 Chief executive officer at Dufry AG.
Current Board Mandates Distribuidora Internacional de Alimentacion (DIA) S.A.
education Bachelor’s degree in Business Administration at eSADe (Spain), MBA at eSADe
and at the university of British Columbia (Canada and Hong Kong), Master’s degree in
business law from universidad pompeu fabra (Spain).
professional Background 1995–2003 Various positions at Areas (member of the french
group elior) with responsibility for finance, controlling, strategic planning. left Areas as
its Corporate Development Director. Since 2004 Chief financial officer at Dufry AG.
education Degree in economics and business sciences from Colegio universitario de
estudios financieros.
professional Background 1989–1995 Various positions at tnt express espana, SA.
Director of its Blue Cow Division (1993–1995). 1995–2003 Various managerial positions at
Aldeasa. left Aldeasa as its Director of operations. Since 2004 Global Chief operating
officer at Dufry AG.
education licence en droit from Geneva university School of law, ll.M. from Duke univer-
sity School of law. licensed to practice law in Switzerland and admitted to the new york Bar.
professional Background 1991–1997 Senior attorney at law at Geneva law firm Davidoff &
partners. Also academic assistant at the university of Geneva School of law (1994–1996).
1999–2001 Attorney at law at new york law firm Kreindler & Kreindler. 2001–2002 financial
planner at uBS AG in new york. 2003–2004 Senior foreign attorney at law at the Buenos
Aires law firm Beretta Kahale Godoy. Since 2005 Chief legal officer and Secretary to the
Board of Directors at Dufry AG.
education Graduate degrees in architecture from Milan’s technical university and business
administration from Kensington university, Glendale, California.
professional Background prior to 1981 Served as public administrator and as an adminis-
trator of the Airport Milano and the Association Airports Italia. 1981 Joined Dufry. He held
various managerial positions at Dufrital SpA as General Manager and Chairman of the
Board (1987 –1992) and acted as General Manager and Board Delegate of all Italian
companies belonging to the Group from 1992–2002. Since 2002 Chief operating officer
region europe at Dufry AG.
Dufry AnnuAl report 2011
69
miguel Ángel
martínez
Chief operating officer
region Africa
born 1961
rené riedi
Chief operating officer
region eurasia
born 1960
José h. González
Chief operating officer
region Central
America & Caribbean
born 1946
José Carlos
Costa da Silva rosa
Chief operating officer
region South America
born 1955
Joseph DiDomizio
Chief operating officer
region north America
born 1970
education Bachelor’s of science degree in economics and business administration from
the universidad de león.
professional Background 1986–1991 Store Manager at C&A Valencia and Mallorca.
1991–1998 Various managerial positions at Aldeasa SA. 1998–2003 General Manager at
Select Service partner’s subsidiary Madrid trade fair Center. Joined Dufry in 2004 as
General Manager Dufry tunisia and acted as Deputy Chief operating officer region Africa.
Since March 2005 Chief operating officer region Africa at Dufry AG.
education Degree in business administration from the School of economy and Business
Administration Zurich.
professional Background prior to 1993 Worked in product marketing and international
sales of the multinational fMCG (fast Moving Consumer Goods) company unilever.
1993–2000 Joined Dufry in 1993 as Sales Manager eastern europe. product Category
Manager Spirits & tobacco (1995–1996). Head of product Marketing (1996–1997). Director
Division Spirits & tobacco (Weitnauer Distribution ltd. 1998–2000). Since 2000 Chief
operating officer region eurasia at Dufry AG.
education Bachelor’s of arts degree from prieto university, Cuba.
professional Background prior to 1992 Active in retail and wholesale industry in north,
Central and South America for more than 25 years. 1992–2002 Joined Dufry in 1992 and
held various managerial and business positions. Since 2002 Chief operating officer
region Central America & Caribbean at Dufry AG.
education Military and Civil engineer’s degree from the Academia Militar of portugal.
professional Background 1993–1994 Director of property Management of richard ellis
portugal. 1994–2000 General Director of AmoreirasGest. 2000–2006 retail Director at
AnA-Aeropuertos de portugal AS. Since 2006 Chief operating officer region South
America at Dufry AG.
education Bachelor’s of arts degree in Marketing and Business Administration from the
university of Bridgeport.
professional Background 1992–2008 Several managerial positions in Hudson Group (April–
September 2008: president and Ceo). Since october 2008 Chief operating officer region
north America at Dufry AG.
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Dufry AnnuAl report 2011
other activities and vested interests
none of the members of the Group executive Committee of Dufry AG has had other activities
in governing and supervisory bodies of important Swiss or foreign organizations, institu-
tions or foundations under private and public law with the exception of Mr. Julián Díaz who
serves as member of the Board of Distribuidora Internacional de Alimentacion (DIA) S.A.
no member of the Group executive Committee has permanent management or consultancy
functions for important Swiss or foreign interest groups, nor holds any official functions
and political posts.
In addition to his employment relationship with the Dufry Group, Mr. Dante Marro, Chief
operating officer for region europe and member of the Group executive Committee,
controls GSA Srl Gestione Spazi Attrezzati (GSA); GSA keeps the usufruct right on 6% of
the shares of Dufrital SpA, which are held by Dufry Shop finance Srl. upon expiration of
these rights in May 2041 GSA shall be entitled to receive 6% of the undistributed retained
earnings of Dufrital SpA.
In addition to his employment relationship with the Group, Mr. José González, Chief oper-
ating officer for region Central America & Caribbean and member of the Group executive
Committee, owns 26.3% of the share capital of the subsidiary puerto libre International
SA (plISA). plISA operates duty free shops at the international airport of Managua as well
as border shops in nicaragua.
4.3 management contracts
Dufry AG does not have management contracts with companies or natural persons not
belonging to the Group.
Dufry AnnuAl report 2011
71
5. Compensation, shareholdings and loans
5.1 Content and method of determining the compensation and the shareholding programs
Board of Directors
the Board of Directors determines the amount of the fixed remuneration of its members,
taking into account their responsibilities, experience, and the time they invest in their
activity as members of the Board of Directors. the compensation for the members of the
Board of Directors is not tied to particular targets of the Company and the weighting of
the criteria mentioned above is determined on a discretionary basis. the nomination and
remuneration Committee makes proposals in relation to the compensation of the members
of the Board of Directors. the Board of Directors ultimately decides on the compensation
to its members, upon proposal of the nomination and remuneration Committee, once per
year and at its own discretion. extraordinary assignments or work which a member of the
Board of Directors accomplishes outside of his activity as a Board member is specifically
remunerated and is approved by the Board of Directors. In addition, the members of the
Board of Directors are reimbursed all reasonable cash expenses incurred by them in the
discharge of their duties.
Juan Carlos torres Carretero (Chairman), ernest George Bachrach (Vice Chairman) and
Steve tadler (Board member) do not receive compensation as members of the Board of
Directors of Dufry AG, as they are representing the interests of Advent International
Corporation and its funds in the group of shareholders described on section “1.2 Significant
shareholders” on page 50.
Group executive Committee
Members of the Group executive Committee receive compensation packages, which
consist of a fixed basic salary in cash that reflects competitive compensation, the experi-
ence and the area of responsibility of each individual member, and a performance related
cash bonus. the weighting of the criteria relevant for the determination of the fixed basic
salary in cash is defined on a discretionary basis. the bonus is defined once per year and
depends on the overall financial results of the Group and of specific sub-divisions thereof,
as well as on achieving defined goals by each individual person. each member of the
Group executive Committee has its own bonus. the main part of the bonus is related to
measures regarding financial results, in fiscal year 2011 mainly eBItDA, both of the Group
and of the region in the case of the regional Chief operating officers. Such financial
measures are weighted with up to 100%. non-results oriented targets are also taken into
account and are reflected with a weighting of up to approx. 30%. the bonus component
can be between a minimum of zero and no maximum.
the bonus part of the compensation for the members of the Group executive Committee
represented in 2011 between zero and 110% of their fixed basic salary and amounted to
CHf 3.65 million in the aggregate (2010: between zero and 113% of fixed basic salary and
an amount of CHf 2.24 million in the aggregate). In addition, fringe benefits such as health
72
Dufry AnnuAl report 2011
insurance in an amount of CHf 0.56 million in the aggregate have been granted to certain
members (2010: CHf 0.50 million). the bonus compensation for each of the members of the
Group executive Committee is approved by the Chief executive officer at his own discretion.
the total amount of the bonus pool available for the members of the Group executive Com-
mittee (other than the Ceo bonus) is approved by the Ceo following guidelines given by the
nomination and remuneration Committee.
the Ceo’s own compensation is proposed by the nomination and remuneration Com-
mittee and decided upon by the Board of Directors at their own discretion. the Chief
executive officer does not participate during the time of the meeting that the nomination
and remuneration Committee and the Board of Directors discuss his compensation. the
Board of Directors receives the proposal for the compensation of the Chief executive
officer from the nomination and remuneration Committee once per year. the nomination
and remuneration Committee and the Board of Directors review yearly the compensation
of the Chief executive officer, Chief financial officer, Global Chief operating officer and
the Chief legal officer.
the Company also has restricted Stock unit (rSu) plans in place for the members of the
Group executive Committee and certain members of the Dufry Group Management, in
the aggregate 86 persons (rSu plan participants). the participants of Dufry’s rSu plan
have been granted the right to receive on January 1, 2013, free of charge, 349,322 rSu’s
on aggregate, based on the market value of the Company’s shares on the Swiss Stock
exchange (SIX) on December 14, 2011 (i.e. CHf 85.65 per share) (“the rSu Awards 2011”).
the rSu Awards 2011 contain two vesting conditions to be met: a) the participants must
be employed by the Company from January 1, 2011 (or, if later, from the individual employ-
ment entry date) until January 1, 2013 and b) the average price of the Company’s shares on
the SIX for the ten previous trading days to January 1, 2013 must be equal or higher than
101% of the company’s share price on December 14, 2011.
from an economic point of view, the rSus are stock options with an exercise price of nil.
the vesting of the rSu awards is conditioned upon the price of the Dufry share at the vest-
ing date being superior to the price of the Dufry share at the grant date. the total number
of rSus to be granted yearly is set forth in the rSu plans and related documents. the rSu
plans have been approved by the nomination and remuneration Committee and the Board
of Directors. pursuant to the rSu plans, the Chief executive officer, in its own and sole
discretion, decides the amount of each specific grant to each individual plan participant.
the grants made to the Chief executive officer are decided by the Chairman.
for information on individual grants please refer to note “Compensation, participations
and loans” on page 162 of this Annual report. the fair value calculation and the individual
vesting conditions of the granted rSus are described in note 30 of this Annual report.
Dufry AnnuAl report 2011
73
In 2011, 281,362 rSus vested to the participants of the rSu award 2010, on the total grant of
291,102 rSus. this represents 1.04% of the outstanding share capital at December 31, 2011.
In addition to legal and tax advices, Dufry consulted external advisors for a general review
of the conditions and the structure of the compensation of the Senior Management and
the employee share ownership plan. Confidential studies were done by two international
firms, one based in Switzerland and the other in the uK. the peer group contained mainly
listed companies in Switzerland, europe and uSA with broad international reach, mostly
in the areas of retail, travel but also other selective other sectors, and with comparable
size of Dufry. one of the advising companies also acted as tax advisor (different division
of that company), while the other has not been awarded additional mandates.
the employment contracts of the Chief executive officer, the Chief financial officer, the
Global Chief operating officer and the Chief legal officer provide for a termination notice
of 3 months and a severance payment corresponding to the salary of 24 months unless
the employment agreement is terminated for cause.
5.2 Compensation, shareholdings and loans of acting as well as former members of
governing bodies
for detailed information on remuneration, shareholdings and loans please refer to the
financial Statements, Statutory notes on page 162 of this Annual report.
74
Dufry AnnuAl report 2011
6. Shareholders’ participation rights
6.1 voting rights and representation
each share recorded as share with voting rights in the share register confers one vote on
its registered holder. each shareholder duly registered in the share register on the record
date may be represented at the Meeting of Shareholders by any person who is authorized
to do so by a written proxy. A proxy does not need to be a shareholder. Shareholders entered
in the share register as shareholders with voting rights on a specific qualifying date (record
date) designated by the Board of Directors shall be entitled to vote at the Meeting of Share-
holders and to exercise their votes at the Meeting of Shareholders. See section 6.5 below.
nominees are only entitled to represent registered shares held by them at a Meeting of
Shareholders, if they are registered in the share register in accordance with Art. 5 para. 4
of the Articles of Incorporation and if they hold a valid written proxy granted by the benefi-
cial owner of the registered shares instructing the nominee how to vote at the Meeting of
Shareholders. Shares held by a nominee for which it is not able to produce such a proxy
count as not be represented at the Meeting of Shareholders.
As explained under section 2.6 above, BDr holders do not own the Dufry AG shares under-
lying their BDrs. As a consequence, BDr holders are prevented from exercising directly
any of the shareholders rights provided for by the Company’s Articles of Incorporation and
by Swiss corporate law. for example, BDr holders are not entitled to personally participate
in the ordinary General Meetings of the Company. However, BDr holders are entitled to
instruct the Depositary Institution to vote the Company’s shares underlying their BDrs,
according to the instructions sent to them by the Depositary Institution.
See section 2.6 before or the Articles of Incorporation on our website
http://www.dufry.com/en/Investors/Articlesofincorporation/index.htm
6.2 Quorums
the Meeting of Shareholders shall be duly constituted irrespective of the number of share-
holders present or of shares represented. unless the law or Articles of Incorporation
provide for a qualified majority, an absolute majority of the votes represented at a Meeting
of Shareholders is required for the adoption of resolutions or for elections, with abstentions,
blank and invalid votes having the effect of “no” votes. the Chairman of the Meeting shall
have a casting vote.
Dufry AnnuAl report 2011
75
A resolution of the Meeting of Shareholders passed by at least two thirds of the votes
represented and the absolute majority of the nominal value of shares represented shall be
required for:
1. a modification of the purpose of the Company
2. the creation of shares with increased voting powers
3. restrictions on the transfer of registered shares and the removal of such restrictions
4. restrictions on the exercise of the right to vote and the removal of such restrictions
5. an authorized or conditional increase in share capital
6. an increase in share capital through the conversion of capital surplus, through a contri-
bution in kind or in exchange for an acquisition of assets, or a grant of special benefits
upon a capital increase
7. the restriction or denial of pre-emptive rights
8. the change of the place of incorporation of the Company
9. the dismissal of a member of the Board of Directors
10. an increase in the maximum number of members of the Board of Directors
11. the dissolution of the Company
12. other matters where statutory law provides for a corresponding quorum
6.3 Convocation of the meeting of Shareholders
the Meeting of Shareholders shall be called by the Board of Directors or, if necessary, by
the Auditors. one or more shareholders with voting rights representing in aggregate not
less than 10% of the share capital can request, in writing, that a Meeting of Shareholders
shall be convened. Such request must be submitted to the Board of Directors, specifying
the items and proposals to appear on the agenda.
the Meeting of Shareholders shall be convened by notice in the Swiss official Gazette of
Commerce (SoGC) not less than 20 days before the date fixed for the Meeting. registered
shareholders will also be informed by ordinary mail.
6.4 agenda
the invitation for the Meeting of Shareholders shall state the day, time and place of the
Meeting, and the items and proposals of the Board of Directors and, if any, the proposals
of the shareholders, who demand that the Meeting of Shareholders be called or that items
be included in the agenda.
76
Dufry AnnuAl report 2011
one or more shareholders with voting rights whose combined holdings represent an ag-
gregate nominal value of at least CHf 1,000,000 may request that an item be included in the
agenda of a Meeting of Shareholders. Such a request must be made in writing to the Board
of Directors at the latest 60 days before the Meeting and shall specify the agenda items and
the proposals made.
6.5 registration into the share register
the record date for the inscription of registered shareholders into the share register in view
of their participation in the Meeting of Shareholders is defined by the Board of Directors. It
is usually 14 days before the Meeting. Shareholders who dispose of their shares before the
Meeting of Shareholders are no longer entitled to vote.
Dufry AnnuAl report 2011
77
7. Change of control and defence measures
7.1 Duty to make an offer
An investor who acquires more than 33 ¹/³% of all voting rights (directly, indirectly or in
concert with third parties) whether they are exercisable or not, is required to submit a
takeover offer for all shares outstanding (Art. 32 SeStA). the Articles of Incorporation of
the Company contain neither an opting-out nor an opting-up provision (Art. 22 SeStA).
7.2 Clauses on change of control
In case of change of control or in any event which would trigger a mandatory offer pursuant
to the SeStA with respect to the Company, the restricted Stock units awarded to the rSu
plan participants shall vest immediately. In case of change of control, all amounts drawn
under the CHf 602,800,000 and uSD 435,000,000 multicurrency term and revolving credit
facility agreements and the uSD 1,000,000,000 multicurrency term credit facility agree-
ment shall become immediately due and payable.
78
Dufry AnnuAl report 2011
8. Auditors
8.1 auditors, duration of mandate and term of office of the lead auditor
pursuant to the Articles of Incorporation, the Auditors shall be elected every year and may
be re-elected. ernst & young ltd acted as Auditors and has held the mandate as Auditor
since 2004. patrick fawer has been the lead Auditor in charge for the consolidated financial
statements of the Company and the statutory financial statements as of December 31, 2011.
Mr. fawer took the existing auditing mandate in 2011.
8.2 auditing fee
During fiscal year 2011, Dufry agreed with ernst & young ltd to pay a fee of CHf 2.6 million
for services in connection with auditing the statutory annual financial statements of Dufry AG
(including quarterly reviews) and its subsidiaries, as well as the consolidated financial state-
ments of Dufry Group and a fee of CHf 0.3 million for audit related services.
8.3 additional fees
Additional fees amounting to CHf 1.6 million were paid to ernst & young ltd for transaction
services and CHf 0.2 million for tax services.
8.4 Supervisory and control instruments pertaining to the audit
the Audit Committee as a committee of the Board of Directors reviews and evaluates the
performance and independence of the Auditors at least once each year. Based on its review,
the Audit Committee recommends to the Board of Directors, which external Auditor should
be proposed for election at the General Meeting of Shareholders. the decision regarding
this agenda item is then taken by the Board of Directors.
When evaluating the performance and independence of the Auditors, the Audit Committee
puts special emphasis on the following criteria: Global network of the audit firm, profes-
sional competence of the lead audit team, understanding of Dufry’s specific business risks,
personal independence of the lead auditor and independence of the audit firm as a com-
pany, co-ordination of the Auditors with the Audit Committee and the Senior Management/
finance Department of Dufry Group, practical recommendations with respect to the
application of IfrS regulations. Within the yearly approved budget, there is also an amount
permissible for non-audit services that the Auditors may perform. Within the scope of the
approved and budgeted amount, the Chief financial officer can delegate non-audit related
mandates to the Auditors.
Dufry AnnuAl report 2011
79
the Audit Committee determines the scope of the external audit and the relevant method-
ology to be applied to the external audit with the Auditors and discusses the results of the
respective audits with the Auditors. the Auditors prepare a management letter addressed
to the Senior Management, the Board of Directors and the Audit Committee once per year,
informing them in detail on the result of their audit. In fiscal year 2011, the Auditors also
performed a review of the interim consolidated financial statements each quarter.
representatives of the Auditors are regularly invited to meetings of the Audit Committee,
namely to attend during those agenda points that dealt with accounting, financial reporting
or auditing matters.
In addition, the Audit Committee reviews regularly the internal audit plan.
During the fiscal year 2011, the Audit Committee held 5 meetings. the Auditors were present
at 3 of those meetings. the Board of Directors has determined the rotation interval for the
lead Auditor to be seven years, as defined by the Swiss Code of obligation; such rotation
occurred in 2011.
80
Dufry AnnuAl report 2011
9. Information policy
Dufry is committed to an open and transparent communication with its shareholders, financial
analysts, potential investors, the media, customers, suppliers and other interested parties.
Dufry AG publishes its financial reports on a quarterly basis, both in english and portuguese.
the financial reports and media releases containing financial information are available on
the Company website.
In addition, Dufry AG organizes presentations and conference calls with the financial
community and media to further discuss details of the reported earnings or on any other
matters of importance. the Company undertakes roadshows for institutional investors
on a regular basis.
Details and information on the business activities, Company structure, financial reports,
media releases and investor relations are available on the Company’s website:
www.dufry.com
the official means of publication of the Company is the Swiss official Gazette of Commerce:
https://www.shab.ch
Web-links regarding the SIX Swiss exchange push-/pull-regulations concerning ad-hoc
publicity issues are:
http://www.dufry.com/en/ourCompany/newsandMedia/latestnews/index.htm
http://www.dufry.com/en/ourCompany/newsandMedia/Mediareleasesubscription/index.htm
Web-links regarding the filings made by the Company with the CVM or BM&fBoVeSpA are:
http://www.dufry.com/en/Investors/CVMfilings/QuarterlyfinancialStatementsItr/index.htm
http://www.cvm.gov.br
http://www.bovespa.com.br
the current Articles of Incorporation are available on Dufry’s website under:
http://www.dufry.com/en/Investors/Articlesofincorporation/index.htm
the financial reports are available under:
http://www.dufry.com/en/Investors/financialreports/index.htm
for the Investor relations and Corporate Communications contacts as well as a summary
of anticipated key dates in 2012 please refer to page 168 of this Annual report.
Dufry AnnuAl report 2011
81
financial report
consolidated financial statements
as of December 31, 2011
82 Consolidated income statement
83 Consolidated statement of comprehensive income
84 Consolidated statement of financial position
85 Consolidated statement of changes in equity
87 Consolidated statement of cash flows
88 notes to the consolidated financial statements
154 Most important affiliated companies
156 report of the auditors
financial statements Dufry aG
as of December 31, 2011
Income statement
158
159 Statement of financial position
160 notes to the financial statements
165 Appropriation of available earnings
166 report of the auditors
other information
Information for investors and media
168
169 Address details of headquarters
82
Dufry AnnuAl report 2011
consoliDateD financial statements
Consolidated income statement
for the year ended December 31, 2011
in millions of cHf
net sales
Advertising income
turnover
Cost of sales
Gross profit
Selling expenses
personnel expenses
General expenses
eBitDa1
Depreciation, amortization and impairment
other operational result
earnings before interest and taxes (eBit)
Interest expenses
Interest income
foreign exchange gain / (loss)
earnings before taxes (eBt)
Income taxes
net earnings
AttrIbutAble to:
equity holders of the parent
non-controlling interests
eArnInGS per ShAre AttrIbutAble to equIty holDerS
of the pArent
basic earnings per share
Diluted earnings per share
epS adjusted for amortization (cash epS)
Weighted average number of outstanding shares in thousands
1 ebItDA before other operational result
note
7
8
9
11
12
13
14
15
15
16
17
17
17
17
2011
2010
2,560.9
76.8
2,637.7
(1,102.4)
1,535.3
(579.7)
(402.6)
(182.1)
370.9
(131.5)
(26.9)
212.5
(55.2)
4.1
1.7
163.1
(28.2)
134.9
111.9
23.0
4.16
4.16
6.30
26,873
2,533.5
76.7
2,610.2
(1,108.3)
1,501.9
(584.8)
(398.9)
(175.1)
343.1
(129.5)
(15.7)
197.9
(37.0)
4.8
–
165.7
(20.9)
144.8
116.6
28.2
4.63
4.58
6.54
25,166
Dufry AnnuAl report 2011
83
Consolidated statement of comprehensive income
for the year ended December 31, 2011
in millions of cHf
net earnings
other CoMprehenSIve InCoMe
exchange differences on translating foreign operations
net gain / (loss) on hedge of net investment in foreign operations
Changes in the fair value of interest rate swaps held as cash flow hedges
other comprehensive income before taxes
Income tax relating to net gain / (loss) on hedge of net investment
Income tax on cash flow hedges
income tax relating to components of other comprehensive income
total other comprehensive income for the year, net of tax
total comprehensive income for the year, net of tax
AttrIbutAble to:
equity holders of the parent
non-controlling interests
2011
134.9
98.2
(82.7)
1.1
16.6
9.9
(0.1)
9.8
26.4
161.3
135.3
26.0
2010
144.8
(105.9)
20.9
(2.2)
(87.2)
(6.3)
0.3
(6.0)
(93.2)
51.6
2.9
48.7
84
Dufry AnnuAl report 2011
Consolidated statement of financial position
at December 31, 2011
in millions of cHf
ASSetS
property, plant and equipment
Intangible assets
Deferred tax assets
other non-current assets
non-current assets
Inventories
trade and credit card receivables
other accounts receivable
Income tax receivables
Cash and cash equivalents
current assets
total assets
lIAbIlItIeS AnD ShAreholDerS’ equIty
equity attributable to equity holders of the parent
non-controlling interests
total equity
financial debt
Deferred tax liabilities
provisions
post-employment benefit obligations
other non-current liabilities
non-current liabilities
trade payables
financial debt
Income tax payables
provisions
other liabilities
current liabilities
total liabilities
total liabilities and shareholders' equity
note
31. 12. 2011
31.12.2010
19
21
23
24
25
26
27
28
32
23
33
34
35
32
33
35
246.1
2,078.6
146.5
37.8
2,509.0
432.0
47.0
127.3
3.4
199.1
808.8
3,317.8
870.0
84.1
954.1
1,529.8
168.5
39.5
6.0
11.3
225.9
1,188.6
137.8
38.4
1,590.7
306.1
50.8
104.9
6.1
80.6
548.5
2,139.2
733.7
81.1
814.8
683.1
146.3
3.1
6.4
9.6
1,755.1
848.5
301.1
30.6
14.2
7.1
255.6
608.6
2,363.7
3,317.8
203.9
35.3
11.7
2.4
222.6
475.9
1,324.4
2,139.2
Dufry AnnuAl report 2011
85
Consolidated statement of changes in equity
for the year ended December 31, 2011
in millions of cHf
note
share
capital
share
premium
treasury
shares
Hedging
and re-
valuation
reserves
trans-
lation
reserves
retained
ear nings
non-
controllinG
interests
total
total
equity
attriButaBle to equity HolDers of tHe parent
Balance at January 1, 2011
134.9
934.2
(28.7)
(1.9)
(199.0)
(105.8)
733.7
81.1
814.8
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2.6
–
–
–
–
(2.3)
–
–
–
–
–
(12.5)
–
27.7
–
–
0.3
15.2
–
–
111.9
111.9
1.0
22.4
–
23.4
23.0
3.0
134.9
26.4
1.0
22.4
111.9
135.3
26.0
161.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2.6
(12.5)
1.3
(27.7)
9.6
2.3
1.3
–
9.6
–
(25.0)
(25.0)
–
–
–
–
–
–
2.6
(12.5)
1.3
–
9.6
–
–
(14.5)
1.0
(25.0)
(24.0)
29.1
30.2
16
30.2
30
30
net earnings
other comprehensive income (loss)
18
total comprehensive income
for the period
ContrIbutIonS by AnD
DIStrIbutIonS to oWnerS:
Dividends to non-controlling
interests
release of share issuance costs
purchase of treasury shares
tax effect on equity transactions
Distribution of treasury shares
Share-based payment
reclassification
total contributions by and
distributions to owners
ChAnGeS In oWnerShIp
IntereStS In SubSIDIArIeS:
Changes in participation of
non-controlling interests
Balance at December 31, 2011
134.9
934.5
(13.5)
(0.9)
(176.6)
(8.4)
870.0
84.1
954.1
31
–
–
–
–
–
–
–
2.0
2.0
86
Dufry AnnuAl report 2011
Consolidated statement of changes in equity
for the year ended December 31, 2011
in millions of cHf
note
share
capital
share
premium
treasury
shares
Hedging
and re-
valuation
reserves
trans-
lation
reserves
retained
ear nings
total
non-
controllinG
interests
total
equity
attriButaBle to equity HolDers of tHe parent
Balance at January 1, 2010
96.1
391.4
(18.2)
–
(87.2)
292.4
674.5
323.1
997.6
–
116.6
116.6
(1.9)
(111.8)
–
(113.7)
28.2
20.5
144.8
(93.2)
(1.9)
(111.8)
116.6
2.9
48.7
51.6
net earnings
other comprehensive income (loss)
18
total comprehensive income
for the period
ContrIbutIonS by AnD
DIStrIbutIonS to oWnerS:
–
–
–
–
–
–
Issue of share capital
29
38.8
565.2
–
–
–
–
–
–
Dividends to non-controlling
interests 1
transaction costs of share issuance
purchase of treasury shares
tax effect on equity transactions
Distribution of treasury shares
Share-based payment
total contributions by and
distributions to owners
ChAnGeS In oWnerShIp
IntereStS In SubSIDIArIeS:
Changes in participation of
non-controlling interests
6.4
29.1
30.2
16
30.2
30
–
–
–
–
–
–
–
(22.4)
–
–
–
–
(28.5)
–
18.0
–
–
604.0
–
604.0
–
(175.2)
(175.2)
–
–
–
–
–
–
–
–
–
–
4.4
(18.0)
(22.4)
(28.5)
4.4
–
12.0
12.0
–
–
–
–
–
(22.4)
(28.5)
4.4
–
12.0
–
–
–
–
–
–
–
–
38.8
542.8
(10.5)
–
(1.6)
569.5
(175.2)
394.3
31
–
–
–
–
–
(513.2)
(513.2)
(115.5)
(628.7)
Balance at December 31, 2010
134.9
934.2
(28.7)
(1.9)
(199.0)
(105.8)
733.7
81.1
814.8
1 Dividends to non-controlling interests for the year ended December 31, 2010 include Chf 158.0 million in respect of the Dufry South America ltd Merger
(see note 6.4)
Dufry AnnuAl report 2011
87
Consolidated statement of cash flows
for the year ended December 31, 2011
in millions of cHf
earnings before taxes (ebt)
ADjuStMentS for
Depreciation, amortization and impairment
Increase / (decrease) in allowances and provisions
loss / (gain) on unrealized foreign exchange differences
other non-cash items
Interest net
cash flow before working capital changes
Decrease / (increase) in trade and other accounts receivable
Decrease / (increase) in inventories
Increase / (decrease) in trade and other accounts payable
cash flow from changes in working capital
cash flow generated from operations
Income tax paid
net cash flows from operating activities
CASh floW froM InveStInG ACtIvItIeS
purchase of property, plant and equipment
purchase of intangible assets
projects development in progress
proceeds from sale of fixed assets
Interest received
cash flows from ordinary investing activities
free cash flow
business combinations, net of cash
proceed from sale of interest in subsidiaries, net of cash
cash flows from other investing activities
net cash flows used in investing activities
CASh floW froM fInAnCInG ACtIvItIeS
proceeds from borrowings
repayment of borrowings
proceeds from / (repayment of) loans
Dividends paid to non-controlling interest
purchase of treasury shares
Share capital contributions by non-controlling interests
Share issuance costs paid
bank arrangement fees paid
Interest paid
net cash flows (used in) / from financing activities
Currency translation in cash
(Decrease) / increase in cash and cash equivalents
CASh AnD CASh equIvAlentS
at the beginning of the period
at the end of the period
note
13
15
25
20
22
6.3
31.1
2011
163.1
131.5
15.8
(2.7)
9.5
51.1
368.3
9.8
(69.9)
68.4
8.3
376.6
(39.8)
336.8
(65.0)
(30.0)
–
3.2
3.9
(87.9)
248.9
(743.2)
0.6
(742.6)
(830.5)
773.4
(87.9)
3.8
(25.0)
(12.5)
0.7
(0.9)
(15.0)
(41.1)
595.5
16.7
118.5
80.6
199.1
2010
165.7
129.5
3.6
28.7
13.1
32.2
372.8
(23.6)
(32.7)
46.0
(10.3)
362.5
(35.5)
327.0
(76.4)
(22.4)
(1.7)
2.6
4.7
(93.2)
233.8
(24.9)
0.7
(24.2)
(117.4)
115.2
(344.8)
3.5
(175.2)
(28.5)
–
(18.8)
(3.0)
(37.7)
(489.3)
(45.0)
(324.7)
405.3
80.6
88
Dufry AnnuAl report 2011
notes to tHe consoliDateD
financial statements
for the yeAr enDeD DeCeMber 31, 2011
1. Corporate information
Dufry AG (“Dufry” or “the Company”) is a publicly listed company with headquarters in basel, Switzerland. the
Company is the world’s leading travel retail company. It operates over 1,200 shops worldwide. the shares of the
Company are listed on the Swiss Stock exchange (SIX) and its brazilian Depository receipts on the bM & fboveSpA
in Sao paulo.
the consolidated financial statements of Dufry AG and its subsidiaries (“the Group”) for the year ended Decem-
ber 31, 2011 were authorized for public disclosure in accordance with a resolution of the board of Directors of
the Company dated March 6, 2012.
2. Accounting policies
2.1 Basis of preparation
the consolidated financial statements of Dufry AG and its subsidiaries (“the Group”) have been prepared in accordance
with International financial reporting Standards (IfrS).
Dufry AG’s consolidated financial statements have been prepared on the historical cost basis except for financial
instruments that are measured at fair values, as explained in the accounting policies below. historical cost is
generally based on the fair value of the consideration given in exchange for assets. the carrying values of recog-
nized assets and liabilities that are hedged items in fair value hedges, and are otherwise carried at amortized cost,
are adjusted to record changes in the fair values attributable to the risks that are being hedged.
the consolidated financial statements are presented in Swiss francs and all values are rounded to the nearest
one hundred thousand except when otherwise indicated.
2.2 Basis of consolidation
the consolidated financial statements incorporate the financial statements of Dufry AG and entities controlled by
Dufry (its subsidiaries) as at December 31, 2011 and the respective comparative information.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains
control, and continue to be consolidated until the date when such control is lost. the financial statements of the
subsidiaries are prepared for the same reporting period as the parent company, using uniform accounting
policies. All intra-group balances, transactions, unrealized gains and losses resulting from intra-group trans-
actions and dividends are eliminated in full.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it
(i) derecognizes the assets (including goodwill) and liabilities of the subsidiary, derecognizes the carrying
amount of any non-controlling interest as well as derecognizes the cumulative translation differences
recorded in equity
Dufry AnnuAl report 2011
89
(ii) recognizes the fair value of the consideration received, recognizes the fair value of any investment retained
as well as recognizes any surplus or deficit in the income statement and
(iii) reclassifies the parent’s share of components previously recognized in other comprehensive income to the
income statement or retained earnings, as appropriate.
2.3 summary of significant accounting policies
a) business combinations and goodwill
business combinations are accounted for using the acquisition method. the cost of an acquisition is measured as
the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-
controlling interest in the acquiree. for each business combination, the Group elects whether it measures the
non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable
net assets. Acquisition costs incurred are expensed and included in the “other operational result”.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date.
If a business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value at the acquisition date through the income statement.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition
date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liabil-
ity will be recognized either in the income statement or as a change to other comprehensive income. If the contin-
gent consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within
equity. In instances where the contingent consideration is not a financial instrument, it is measured in accordance
with the appropriate IfrS.
the Group measures goodwill at the acquisition date as:
– the fair value of the consideration transferred; plus
– the recognized amount of any non-controlling interests in the acquiree; plus
– if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree; less
– the net recognized amount of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognized immediately in the income statement.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. for the purpose
of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each
of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether
other assets or liabilities of the acquiree are assigned to those units.
Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the
goodwill associated with the operation disposed of is included in the carrying amount of the operation when deter-
mining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based
on the relative values of the operation disposed of and the portion of the cash-generating unit retained.
90
Dufry AnnuAl report 2011
b) Investments in associates and jointly controlled entities (equity-accounted investees)
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an
interest in a joint venture. Significant influence is the power to participate in the financial and operating policy
decisions of the investee but the Group does not have control or joint control over those policies.
A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity
that is subject to joint control (i.e. when the strategic financial and operating policy decisions relating to the activities
of the joint venture require the unanimous consent of the parties sharing control).
During the year ended December 31, 2011 and December 31, 2010 the Company did not hold any equity accounted
investments.
c) revenue recognition
revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. revenue is measured at the fair value of the consideration received, excluding
discounts, rebates, sales taxes or duties.
net sales
Sales are recognized when significant risks and rewards of ownership of the products have been transferred
to the customer. retail sales are settled in cash or by credit card.
Advertising income
Advertising income is recognized when the services have been rendered.
d) foreign currency translation
the consolidated financial statements are expressed in Swiss francs (Chf). each company in the Group uses its
corresponding functional currency and items included in the financial statements of each entity are measured
using that functional currency. transactions in foreign currencies are initially recorded in the functional currency
using the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are translated in the functional currency using the exchange rate at the reporting date.
exchange differences arising on the settlement or on the translation of derivative financial instruments are
recognized through income statement, except where the hedges on net investments allow the recognition in the
other comprehensive income, until the respective investments are disposed of. In this case any related deferred
taxes are also accounted for in the other comprehensive income. non-monetary items that are measured at
historical cost in the respective functional currency are translated using the exchange rates as at the dates of
the initial transactions.
non-monetary items (held for sale or discontinued operations) measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was determined.
At the reporting date, the assets and liabilities of all subsidiaries reporting in foreign currency are translated
into the presentation currency of Dufry (Swiss francs) using the exchange rate at the reporting date. the income
statement is translated using the average exchange rates of the respective month in which the transactions
occurred. the net translation differences are recognized in the other comprehensive income. on disposal of a
foreign entity or when control is lost, the deferred cumulative translation difference recognized within equity
relating to that particular operation is recognized in the consolidated income statement as gain or loss on sale
of subsidiaries.
Intangible assets and fair value adjustments identified on the acquisition of a new business (purchase price allocation)
are treated as assets and liabilities of such operation in the respective functional currency.
Dufry AnnuAl report 2011
91
principal foreign exchange rates applied for valuation and translation:
in cHf
1 uSD – uS Dollar
1 eur – euro
1. 1. – 31. 12. 2011
averaGe rates
1. 1. – 31. 12. 2010
averaGe rates
31. 12. 2011
31. 12. 2010
closinG rates
closinG rates
0.8868
1.2329
1.0427
1.3821
0.9387
1.2167
0.9352
1.2518
e) borrowing costs
borrowing costs are recognized as an expense when incurred, except for the initial arrangement fees, which are
set-off from the bank loans and amortized over the period of the credit facility.
borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to
the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. the
Group did not hold any qualifying assets during the periods disclosed.
f) pension and other post-employment benefit obligations
pension obligations
the employees of the subsidiaries are eligible for retirement, invalidity and death benefits under local social
security schemes prevailing in the countries concerned and defined benefit and defined contribution plans
provided through separate funds, insurance plans, or unfunded arrangements. the pension plans are generally
funded through regular contributions made by the employer and the employee and through the income generated
by their capital investments.
In the case of defined contribution plans, the net periodic pension cost to be recognized in the income statement
equals the contributions made by the employer.
In the case of defined benefit plans, the net periodic pension cost is determined using the projected unit credit
method. the defined benefit obligation is measured as the present value of expected future payments required
to settle the obligation resulting from employee service in the current and prior periods. the net periodic pen-
sion cost less employee contributions is included in the personnel expenses. plan assets are recorded at their
fair value. Actuarial gains or losses beyond a corridor of 10% of the greater of the present value of the defined
benefit obligation and the fair value of plan assets arising from adjustments posted and changes in actuarial
assumptions are recognized in the income statement over the average remaining service lives of the related
plan participants.
termination benefits
termination benefits are payable when employment is terminated before the normal retirement date, or whenever
an employee accepts voluntary redundancy in exchange for the benefits. the Group recognizes termination ben-
efits when it is demonstrably committed to either, terminating the employment of current employees according
to a detailed formal plan without the possibility of withdrawal; or providing termination benefits as a result of an
offer made to encourage voluntary redundancy. benefits falling due more than 12 months after reporting date are
discounted to present value.
g) Share-based payments
equity-settled share-based payments to employees and others providing similar services are measured at the
fair value of the equity instruments at the grant date. the fair value determined at the grant date of the equity-
settled share-based payments is expensed on a straight-line basis over the vesting period, based on the estimated
number of equity instruments that will eventually vest. At the end of each reporting period, the Group revises its
estimate of the number of equity instruments expected to vest. the impact of the revision of the original estimates,
92
Dufry AnnuAl report 2011
if any, is recognized in the consolidated income statement such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to retained earnings.
Where the terms of an equity-settled award are modified, the minimum expense recognized is the expense if the
terms had not been modified. An additional expense is recognized for any modification, which increases the total
fair value of the share based payment arrangement, or is otherwise beneficial to the employee as measured at
the date of modification.
for cash-settled share-based payments, a liability is recognized for the goods or services acquired, measured
initially at the fair value of the liability. At the end of each reporting period until the liability is settled, and at the
date of settlement, the fair value of the liability is re-measured, with any changes in fair value recognized in the
consolidated income statement for the year.
h) taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
tax authorities. the tax rates and tax laws used to compute the amount are those that are enacted or substantially
enacted, at the reporting date in the countries where the Group operates and generates taxable income.
Current income tax relating to items recognized in other comprehensive income is recognized in the same state-
ment. Management periodically evaluates positions taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
– When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss
– In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests
in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is prob-
able that the temporary differences will not reverse in the foreseeable future
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences, and the carry forward of unused tax
credits and unused tax losses can be utilized, except:
– When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss
– In respect of deductible temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available against which
the temporary differences can be utilized
the carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow the deferred tax asset to be utilized.
Dufry AnnuAl report 2011
93
unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it
has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantially
enacted at the reporting date.
Deferred tax positions not relating to items recognized in the income statement, are recognized in correlation to
the underlying transaction either as other comprehensive income or equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax
assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.
tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at
that date, would be recognized subsequently if new information about facts and circumstances changed. the
adjustment would either be treated as a reduction of goodwill (as long as it does not exceed goodwill) if it was noted
during the measurement period or afterwards in the income statement.
i) property, plant and equipment
these are stated at cost less accumulated depreciation and any impairment in fair value. Depreciation is computed
on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term.
the useful lives applied are as follows:
– buildings 15 to 20 years
– leasehold improvements 5 to 10 years
– furniture, fixture and vehicles 4 to 10 years
– Computer hardware 5 years
the asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
land is recognized at acquisition cost and not depreciated as it is deemed to have an indefinite life. Additional
costs, which extend the useful life of tangible assets, are capitalized. there are no borrowing costs recognized
that are associated with the construction of tangible assets.
the carrying amount of tangible assets is reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable. the recoverable amount is the higher of an
asset’s fair value less cost to sell or its value in use.
j) Intangible assets
Intangible assets acquired (separately or from a business combination)
these assets mainly comprise of concession rights and brands. Intangible assets acquired separately are
capitalized at cost and those from a business acquisition are capitalized at fair value as at the date of acquisition.
following initial recognition, the cost model is applied to intangible assets. the useful lives of these intangible
assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortized over the
useful economic life and assessed for impairment whenever there is an indication that the intangible asset may
be impaired. Intangible assets with indefinite useful lives are not amortized but are tested for impairment an-
nually at the asset or cash generating unit level. the useful life of an intangible asset with an indefinite life is
reviewed annually to determine whether indefinite life assessment continues to be supportable. If not, any
changes are made on a prospective basis. brands have been assessed to have indefinite useful lives and are
therefore not amortized.
94
Dufry AnnuAl report 2011
Certain concession rights are granted for periods ranging from 10 to 30 years by the relevant airport authorities.
based on Dufry’s experience, these concession rights have been renewed in the past at little or no cost for the
Group. As a result these concession rights are assessed as having an indefinite useful life.
k) Impairment of non-financial assets
Intangible assets with indefinite useful life are not subject to amortization and are tested annually for impairment.
Assets that are subject to depreciation and amortization are reviewed for impairment whenever events or circum-
stances indicate that the carrying amount may not be recoverable. An impairment loss is recognized when the
carrying amount of an asset or cash generating unit exceeds its recoverable amount. the recoverable amount is the
higher of an asset’s fair value less costs to sell and its value in use. for the purpose of assessing impairment, assets
are grouped at the lowest levels for which there are separately identifiable cash inflows (cash generating units).
l) Inventories
Inventories are valued at the lower of historical cost or net realizable value. the historical costs are determined
using the fIfo method. historical cost includes all expenses incurred in bringing the inventories to their present
location and condition. this includes import duties, transport and handling costs and any other directly attribut-
able costs of acquisition. purchase discounts and rebates are deducted in determining the cost of inventories. the
net realizable value is the estimated selling price in the ordinary course of business less the estimated costs
necessary to make the sale. Inventory allowances are set up in the case of slow-moving and obsolete stock. expired
items are fully written off.
m) provisions
provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation.
the amount recognized as a provision is the best estimate of the consideration required to settle the present
obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the
obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its
carrying amount is the present value of those cash flows (where the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third
party, a receivable is recognized as an asset if it is virtually certain that the reimbursement will be received and
the amount of the receivable can be measured reliably.
onerous contracts
present obligations arising under onerous contracts are recognized and measured as provisions. An onerous
contract is considered to exist if the Group has a contract under which the unavoidable costs of meeting the obli-
gations under the contract exceed the economic benefits expected to be received from the contract.
restructurings
A restructuring provision is recognized when the Group has developed a detailed formal plan for the restructuring
and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement
the plan or announcing its main features to those affected by it. the measurement of a restructuring provision
includes only the direct expenditures arising from the restructuring, which are those amounts that are both
necessarily entailed by the restructuring and not associated with the ongoing activities of the entity.
Contingent liabilities acquired in a business combination
Contingent liabilities acquired in a business combination are initially measured at fair value at the acquisition date.
At the end of subsequent reporting periods, such contingent liabilities are measured at the higher of the amount
that would be recognized in accordance with IAS 37 provisions, Contingent liabilities and Contingent Assets and
the amount initially recognized less cumulative amortization recognized in accordance with IAS 18 revenue.
Dufry AnnuAl report 2011
95
n) financial instruments
financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions
of the instrument.
financial assets and financial liabilities are initially measured at fair value. transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets
and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the
financial assets or financial liabilities on initial recognition. transaction costs directly attributable to the ac-
quisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately
in the income statement.
effective interest method
the effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating
interest income over the relevant period. the effective interest rate is the rate that exactly discounts estimated
future cash flows (including all fees and points paid or received that form an integral part of the effective interest
rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or,
where appropriate, a shorter period, to the net carrying amount on initial recognition.
Income is recognized on an effective interest basis for debt instruments other than those financial assets classi-
fied as at fvtpl and AfS.
o) financial assets
financial assets are classified into the following categories: financial assets “at fair value through profit or loss”
(fvtpl), “held-to-maturity” investments, “available-for-sale” (AfS) financial assets and “loans and receivables”.
the categorization depends on the nature and purpose of the financial assets and is determined at the time of
initial recognition. All regular way purchases or sales of financial assets are recognized and derecognized on a
trade date basis. regular way purchases or sales are purchases or sales of financial assets that require delivery
of assets within the time frame established by regulation or convention in the marketplace.
financial assets at fvtpl (fair value thought profit & loss)
financial assets are classified as at fvtpl when the financial asset is either held for trading or it is designated
as at fvtpl.
A financial asset is classified as held for trading if:
– it has been acquired principally for the purpose of selling it in the near term; or
– on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together
and has a recent actual pattern of short-term profit-taking; or
– it is a derivative that is not designated and effective as a hedging instrument.
A financial asset other than a financial asset held for trading may be designated as at fvtpl upon initial recognition if:
– such designation eliminates or significantly reduces a measurement or recognition inconsistency that would
otherwise arise; or
– the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and
its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management
or investment strategy, and information about the grouping is provided internally on that basis; or
– it forms part of a contract containing one or more embedded derivatives, and IAS 39 financial Instruments: rec-
ognition and Measurement permits the entire combined contract (asset or liability) to be designated as at fvtpl.
financial assets at fvtpl are stated at fair value, with any gains or losses arising on remeasurement recognized
in the income statement. the net gain or loss recognized in the income statement incorporates any dividend or
interest earned on the financial asset and is included in the “other operating result” line item in the consolidated
income statement. fair value is determined in the manner described in note 38.
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held-to-maturity investments
held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and
fixed maturity dates that the Group has the positive intent and ability to hold to maturity. Subsequent to initial
recognition, held-to-maturity investments are measured at amortized cost using the effective interest method
less any impairment.
Available-for-sale financial assets (AfS financial assets)
AfS financial assets are non-derivatives that are either designated as AfS or are not classified as
a) loans and receivables,
b) held-to-maturity investments or
c) financial assets at fair value through profit or loss.
AfS financial assets are stated at fair value at the end of each reporting period. fair value is determined in the
manner described in note 38. Changes in the carrying amount of AfS monetary financial assets relating to
changes in foreign currency rates (see below), interest income calculated using the effective interest method
and dividends on AfS equity investments are recognized in the income statement. other changes in the carrying
amount of available-for-sale financial assets are recognized in other comprehensive income and accumulated
in the hedging and revaluation reserves. Where the investment is disposed of or is determined to be impaired,
the cumulative gain or loss previously accumulated in the hedging and revaluation reserves is reclassified to
the income statement.
Dividends on AfS equity instruments are recognized in the income statement when the Group’s right to receive
the dividends is established.
loans and receivables
loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. loans and receivables (including trade and credit cards receivables, other accounts
receivable, cash and cash equivalents) are measured at amortized cost using the effective interest method,
less any impairment.
Interest income is recognized by applying the effective interest rate, except for short-term receivables when the
recognition of interest would be immaterial.
Impairment of financial assets
financial assets, other than those at fvtpl, are assessed for indicators of impairment at the end of each report-
ing period. financial assets are considered to be impaired when there is objective evidence that, as a result of one
or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of
the investment have been affected.
for AfS equity investments, a significant or prolonged decline in the fair value of the security below its cost is
considered to be objective evidence of impairment.
for all other financial assets, objective evidence of impairment could include:
– significant financial difficulty of the issuer or counterparty; or
– breach of contract, such as a default or delinquency in interest or principal payments; or
– it becoming probable that the borrower will enter bankruptcy or financial re-organization; or
– the disappearance of an active market for that financial asset because of financial difficulties.
Certain categories of financial assets, such as trade receivables, are assessed for impairment individually. for
financial assets carried at amortized cost, the amount of the impairment loss recognized is the difference between
the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial
asset’s original effective interest rate.
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97
the carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with
the exception of trade receivables, loans and other receivables, where the carrying amount is reduced through
the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the
allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance
account. Changes in the carrying amount of the allowance account are recognized in the income statement. When
an AfS financial asset is considered to be impaired, cumulative gains or losses previously recognized in other
comprehensive income are reclassified to the income statement in the period.
for financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event occurring after the impairment was recognized,
the previously recognized impairment loss is reversed through the income statement to the extent that the car-
rying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost
would have been had the impairment not been recognized.
In respect of AfS equity securities, impairment losses previously recognized in the income statement are not reversed
through the income statement. Any increase in fair value subsequent to an impairment loss is recognized in other
comprehensive income and accumulated in the hedging and revaluation reserves. In respect of AfS debt securities,
impairment losses are subsequently reversed through the income statement if an increase in the fair value of the
investment can be objectively related to an event occurring after the recognition of the impairment loss.
Derecognition of financial assets
the Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire,
or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to
another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and
continues to control the transferred asset, the Group recognizes its retained interest in the asset and an associated
liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership
of a transferred financial asset, the Group continues to recognize the financial asset and also recognizes a col-
lateralized borrowing for the proceeds received.
on derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the
sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other
comprehensive income and accumulated in equity is recognized in the income statement.
on derecognition of a financial asset other than in its entirety (e.g. when the Group retains an option to repurchase
part of a transferred asset or retains a residual interest that does not result in the retention of substantially all
the risks and rewards of ownership and the Group retains control), the Group allocates the previous carrying
amount of the financial asset between the part it continues to recognize under continuing involvement, and the
part it no longer recognizes on the basis of the relative fair values of those parts on the date of the transfer. the
difference between the carrying amount allocated to the part that is no longer recognized and the sum of the
consideration received for the part no longer recognized and any cumulative gain or loss allocated to it that had
been recognized in other comprehensive income is recognized in the income statement. A cumulative gain or loss
that had been recognized in other comprehensive income is allocated between the part that continues to be rec-
ognized and the part that is no longer recognized on the basis of the relative fair values of those parts.
p) financial liabilities and equity instruments
Classification as debt or equity
Debt and equity instruments issued by the Group are classified as either financial liabilities or as equity in accordance
with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities. equity instruments issued by the Group are recognized at the proceeds received, net of direct
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issue costs. repurchase of the Company’s own equity instruments is recognized and deducted directly in equity.
no gain or loss is recognized in the income statement on the purchase, sale, issue or cancellation of the Com-
pany’s own equity instruments.
q) financial liabilities
financial liabilities are classified as either financial liabilities “at fvtpl” or “other financial liabilities”.
financial liabilities at fvtpl
financial liabilities are classified as at fvtpl when the financial liability is either held for trading or it is designated
as at fvtpl.
A financial liability is classified as held for trading if:
– it has been acquired principally for the purpose of repurchasing it in the near term; or
– on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together
and has a recent actual pattern of short-term profit-taking; or
– it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading may be designated as at fvtpl upon initial
recognition if:
– such designation eliminates or significantly reduces a measurement or recognition inconsistency that would
otherwise arise; or
– the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and
its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management
or investment strategy, and information about the grouping is provided internally on that basis; or
– it forms part of a contract containing one or more embedded derivatives, and IAS 39 financial Instruments: rec-
ognition and Measurement permits the entire combined contract (asset or liability) to be designated as at fvtpl.
financial liabilities at fvtpl are stated at fair value, with any gains or losses arising on remeasurement recognized
in the income statement. the net gain or loss recognized in the income statement incorporates any interest paid on
the financial liability and is included in the “other operational result” line item in the consolidated income statement.
fair value is determined in the manner described in note 38.
other financial liabilities
other financial liabilities (including borrowings) are subsequently measured at amortized cost using the effective
interest method.
the effective interest method is a method of calculating the amortized cost of a financial liability and of allocating
interest expense over the relevant period. the effective interest rate is the rate that exactly discounts estimated
future cash payments (including all fees and points paid or received that form an integral part of the effective inter-
est rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or
(where appropriate) a shorter period, to the net carrying amount on initial recognition.
financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the
terms of a debt instrument.
financial guarantee contracts issued by the Group are initially measured at their fair values and, if not designated
as at fvtpl, are subsequently measured at the higher of:
– the amount of the obligation under the contract, as determined in accordance with IAS 37 provisions, Contingent
liabilities and Contingent Assets; and
– the amount initially recognized less, where appropriate, cumulative amortization recognized in accordance with
the revenue recognition policies.
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99
Derecognition of financial liabilities
the Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged, cancelled
or they expire. the difference between the carrying amount of the financial liability derecognized and the consid-
eration paid and payable is recognized in the income statement.
r) Derivative financial instruments
the Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and
foreign exchange rate risks, including foreign exchange forward contracts, interest rate swaps and cross currency
swaps. further details of derivative financial instruments are disclosed in note 38.
Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are
subsequently remeasured to their fair value at the end of each reporting period. the resulting gain or loss is
recognized in the income statement immediately unless the derivative is designated and effective as a hedging
instrument, in which event the timing of the recognition in the income statement depends on the nature of the
hedge relationship.
s) embedded derivatives
Derivatives embedded in non-derivative host contracts are treated as separate derivatives when their risks and
characteristics are not closely related to those of the host contracts and the host contracts are not measured
at fvtpl.
t) hedge accounting
the Group designates certain hedging instruments, which include derivatives, embedded derivatives and non-
derivatives in respect of foreign currency risk, as either fair value hedges, cash flow hedges, or hedges of net
investments in foreign operations. hedges of foreign exchange risk on firm commitments are accounted for as
cash flow hedges.
At the inception of the hedge relationship, the entity documents the relationship between the hedging instrument
and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge
transactions. furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether
the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item
attributable to the hedged risk.
note 38 sets out details of the fair values of the derivative instruments used for hedging purposes.
fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognized in the
income statement immediately, together with any changes in the fair value of the hedged asset or liability that are
attributable to the hedged risk. the change in the fair value of the hedging instrument and the change in the hedged
item attributable to the hedged risk are recognized in the line of the consolidated income statement relating to
the hedged item.
hedge accounting is discontinued when the Group revokes the hedging relationship, when the hedging instrument
expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. the fair value
adjustment to the carrying amount of the hedged item arising from the hedged risk is amortized to profit or loss
from that date.
Cash flow hedges
the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges
is recognized in other comprehensive income and accumulated in the hedging and revaluation reserves. the gain
or loss relating to the ineffective portion is recognized immediately in the income statement, and is included in the
“interest expenses / income” line item.
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Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to the
income statement in the periods when the hedged item is recognized in the income statement, in the same line of
the consolidated income statement as the recognized hedged item. however, when the hedged forecast transac-
tion results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously
recognized in other comprehensive income and accumulated in equity are transferred from equity and included
in the initial measurement of the cost of the non-financial asset or non-financial liability.
hedge accounting is discontinued when the Group revokes the hedging relationship, when the hedging instru-
ment expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain
or loss recognized in other comprehensive income and accumulated in equity at that time remains in equity and
is recognized when the forecast transaction is ultimately recognized in the income statement. When a forecast
transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in
the income statement.
hedges of net investments in foreign operations
hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or
loss on the hedging instrument relating to the effective portion of the hedge is recognized in other comprehen-
sive income and accumulated under the heading of translation reserves. the gain or loss relating to the inef-
fective portion is recognized immediately in the income statement, and is included in the “foreign exchange
gains / loss” line item.
2.4 changes in accounting policy and disclosures
new and amended standards and interpretations
the accounting policies adopted are consistent with those of the previous financial year, except for the following
new and amended IfrS and IfrIC interpretations:
– IAS 24 related party Disclosures (amendment) – effective 1 january 2011
the IASb issued an amendment to IAS 24 that clarifies the definitions of a related party. the new definitions
emphasize a symmetrical view of related party relationships and clarify the circumstances in which persons
and key management personnel affect related party relationships of an entity. In addition, the amendment
introduces an exemption from the general related party disclosure requirements for transactions with
government and entities that are controlled, jointly controlled or significantly influenced by the same govern-
ment as the reporting entity. the adoption of the amendment did not have any impact on the financial position
or performance of the Group.
– IAS 32 financial Instruments: presentation (amendment) – effective 1 february 2010
the IASb issued an amendment that alters the definition of a financial liability in IAS 32 to enable entities to
classify rights issues and certain options or warrants as equity instruments. the amendment is applicable
if the rights are given pro rata to all of the existing owners of the same class of an entity’s non-derivative
equity instruments, to acquire a fixed number of the entity’s own equity instruments for a fixed amount in any
currency. the amendment has had no effect on the financial position or performance of the Group because
the Group does not have this type of instruments.
– IfrIC 14 prepayments of a Minimum funding requirement (amendment) – effective 1 january 2011
the amendment removes an unintended consequence when an entity is subject to minimum funding requirements
and makes an early payment of contributions to cover such requirements. the amendment permits a prepayment
of future service cost by the entity to be recognized as a pension asset. the Group is not subject to minimum
funding requirements, therefore the amendment of the interpretation has neither affected the financial position
nor the performance of the Group.
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101
– IfrIC 19 extinguishing financial liabilities with equity Instruments – effective july 1, 2010
Dufry has not entered into this type of agreements.
Improvements to IfrSs (May 2010)
In May 2010, the IASb issued its third omnibus of amendments to its standards, primarily with a view to removing
inconsistencies and clarifying wording. there are separate transitional provisions for each standard. the adoption
of the following amendments resulted in changes to accounting policies, but no impact on the financial position
or performance of the Group.
– IAS 1 presentation of financial Statements
the amendment clarifies that an entity may present an analysis of each component of other comprehensive
income either in the statement of changes in equity or in the notes to the financial statements. the Group provides
this analysis in note 18.
– IfrIC 13 Customer loyalty programs – effective january 1, 2011
fair value of award credit: the amendment clarifies that when the fair value of awards credits is measured
based on the value of the awards for which they could be redeemed, the amount of discounts or incentives
otherwise granted to customers not participating in the awards credit scheme, is to be taken into account.
other amendments resulting from improvements to IfrSs to the following standards did not have any significant
impact on the accounting policies, financial position or performance of the Group:
– IfrS 3 business Combinations
– the measurement options available for non-controlling interest (nCI) were amended.
– Contingent consideration arising from business combination prior to adoption of IfrS 3 (as revised in 2008).
– un-replaced and voluntarily replaced share-based payment awards.
– IfrS 7 financial Instruments – Disclosures
the amendment was intended to simplify the disclosures provided by reducing the volume of disclosures around
collateral held and improving disclosures by requiring qualitative information to put the quantitative information
in context.
– IAS 27 Consolidated and Separate financial Statements
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Dufry AnnuAl report 2011
3. Critical accounting judgments and key sources of
estimation uncertainty
the preparation of the Group’s financial statements requires management to make judgments, estimates and
assumptions that affect the reported amounts of income, expenses, assets and liabilities, and the disclosure
of contingent liabilities, at the reporting date. however, uncertainty about these assumptions and estimates could
result in outcomes that could require a material adjustment to the carrying amount of the asset or liability in
the future.
Key sources of estimation uncertainty
the key assumptions concerning the future and other key sources of estimation include uncertainties at the re-
porting date, which may have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial periods, are discussed below.
Concession rights
Concession rights acquired in a business combination are measured at fair value as at the date of acquisition. the
useful lives of operating concessions are assessed to be either finite or indefinite based on individual circumstances.
the useful lives of operating concessions are reviewed annually to determine whether the indefinite useful life as-
sessment for those concessions continues to be sustainable. the Group annually tests the operating concessions
with indefinite useful lives for impairment. the underlying calculation requires the use of estimates. the comments
and assumptions used are disclosed in note 21.
brands and Goodwill
the Group tests these items annually for impairment. the underlying calculation requires the use of estimates.
the comments and assumptions used are disclosed in note 21.
Income taxes
the Group is subject to income taxes in numerous jurisdictions. Significant judgment is required in determining
the worldwide provision for income taxes. there are many transactions and calculations for which the ultimate
tax assessment is uncertain. the Group recognizes liabilities for tax audit issues based on estimates of whether
additional taxes will be payable. Where the final tax outcome is different from the amounts that were initially
recorded, such differences will impact the income tax or deferred tax provisions in the period in which such
assessment is made. further details are given in note 16.
Deferred tax assets
Deferred tax assets are recognized for all unused tax losses and deductible temporary differences to the extent
that it is probable that taxable profit will be available against which the losses can be utilized. Management
judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the
likely timing and level of future taxable profits together with future tax planning strategies. further details are
given in note 23.
provisions
Management makes assumptions in relation to the expected outcome and cash outflows based on the development
of each individual case. further details are given in note 33.
Share-based payments
the Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the grant date. estimating fair value requires determining the most appropriate valuation model for a
grant of equity instruments, which depends on the terms and conditions of the grant. this also requires determining
Dufry AnnuAl report 2011
103
the most appropriate inputs to the valuation model including the expected life of the option, volatility and dividend
yield and making assumptions about them. the assumptions and models used are disclosed in note 30.
pension and other post-employment benefit obligations
the cost of defined benefit pension plans is determined using actuarial valuations. the actuarial valuation involves
assumptions about discount rates, expected rates of return on assets, future salary increases, mortality rates
and future pension increases. Due to the long-term nature of these plans, such estimates are subject to significant
uncertainty. further details are given in note 34.
purchase price allocation
the determination of the fair values of the identifiable assets (especially the concession rights) and the assumed
liabilities (especially the contingent liabilities recognized as provisions), resulting from business combinations, is
based on valuation techniques such as the discounted cash flow model. Some of the inputs to this model are partially
based on assumptions and judgments and any changes thereof would affect the reported values (see note 6).
4. new and revised standards and interpretations in issue
but not yet adopted / effective
the Group will apply the following standards or changes to standards for the first time following the dates stated
in the respective standard.
standards and interpretations that are relevant for the Group and whose effects are currently being evaluated
– IAS 1 financial Statement presentation (presentation of Items of other Comprehensive Income) – effective
july 1, 2012
the amendments to IAS 1 change the grouping of items presented in other comprehensive income. Items that
could be reclassified (or “recycled”) to the income statement at a future point in time (for example, upon derecog-
nition or settlement) would be presented separately from items that will never be reclassified. the amendment
affects presentation only and has no impact on the Group’s financial position or performance.
– IAS 19 employee benefits (Amendment) – effective january 1, 2013
the IASb has issued numerous amendments to IAS 19. these range from fundamental changes such as removing
the corridor mechanism and the concept of expected returns on plan assets to simple clarifications and re-
wording. If the amendments would have been adopted in 2011 the equity in the consolidated financial statements
would have been lower by approximately Chf 8.3 million representing the unrealized actuarial losses whereas
the income statement would have been impacted by additional expenses of Chf 0.7 million.
– IfrS 7 financial Instruments: Disclosures (enhanced Derecognition Disclosure requirements) – effective
july 1, 2011
the amendment requires additional disclosure about financial assets that have been transferred but not derec-
ognized to enable the user of the Group’s financial statements to understand the relationship with those assets
that have not been derecognized and their associated liabilities. In addition, the amendment requires disclosures
about continuing involvement in derecognized assets to enable the user to evaluate the nature of, and risks
associated with, the entity’s continuing involvement in those derecognized assets. the amendment affects
disclosure only and has no impact on the Group’s financial position or performance.
– IfrS 9 financial instruments – effective january 1, 2015
IfrS 9 as issued reflects the first phase of the IASbs work on the replacement of IAS 39 and applies to classi-
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Dufry AnnuAl report 2011
fication and measurement of financial assets and financial liabilities as defined in IAS 39. In subsequent phases,
the IASb will address hedge accounting and impairment of financial assets. the adoption of the first phase of
IfrS 9 will have an effect on the classification and measurement of the Group’s financial assets, but will poten-
tially have no impact on classification and measurements of financial liabilities. the Group will quantify the
effect in conjunction with the other phases, when issued, to present a comprehensive picture.
– IfrS 10 Consolidated financial Statements – effective january 1, 2013
IfrS 10 replaces the portion of IAS 27 Consolidated and Separate financial Statements that addresses the
accounting for consolidated financial statements. IfrS 10 establishes a single control model that applies to all
entities including special purpose entities. the changes introduced by IfrS 10 will require management to
exercise significant judgment to determine which entities are controlled, and therefore, are required to be
consolidated by a parent, compared with the requirements that were in IAS 27.
– IfrS 12 Disclosure of Involvement with other entities – effective january 1, 2013
IfrS 12 includes all of the disclosures that were previously in IAS 27 related to consolidated financial statements,
as well as all of the disclosures that were previously included in IAS 31 and IAS 28. these disclosures relate to
an entity’s interests in subsidiaries, joint arrangements, associates and structured entities. A number of new
disclosures are also required.
– IfrS 13 fair value Measurement – effective january 1, 2013
IfrS 13 establishes a single source of guidance under IfrS for all fair value measurements. IfrS 13 does not
change when an entity is required to use fair value, but rather provides guidance on how to measure fair value
under IfrS when fair value is required or permitted. the Group is currently assessing the impact that this
standard will have on the financial position and performance.
further new and revised standards and interpretations of no practical relevance:
– IAS 12 Deferred tax: recovery of underlying assets amendments to IAS 12 – effective january 1, 2012
IAS 12 has been updated to include a presumption that deferred tax on investment property measured using
the fair value model in IAS 40 and on non-depreciable assets measured using the revaluation model in IAS 16,
should always be measured on a sale basis.
– IAS 27 Separate financial Statements (as revised in 2011) – effective january 1, 2013
As a consequence of the new IfrS 10 and IfrS 12, what remains of IAS 27 is limited to accounting for subsidiaries,
jointly controlled entities, and associates in separate financial statements. the Group does not present separate
financial statements.
– IAS 28 Investments in Associates and joint ventures (as revised in 2011) – effective january 1, 2013
As a consequence of the new IfrS 11 and IfrS 12, IAS 28 has been renamed IAS 28 Investments in Associates
and joint ventures, and describes the application of the equity method to investments in joint ventures in
addition to associates.
– IAS 32 (amendments) offsetting financial Assets and financial liabilities – effective january 1, 2014
the amendments address inconsistencies in current practice when applying the offsetting criteria in IAS 32
financial Instruments: presentation. the amendments clarify: a) the meaning of “currently has a legally
enforceable right of set-off”; and b) that some gross settlement systems may be considered equivalent to
net settlement.
– IfrS 7 financial instruments: Disclosures (amendment) offsetting financial Assets and financial liabilities –
effective january 1, 2013
these disclosures will provide users with information that is useful in (a) evaluating the effect or potential
effect of netting arrangements on an entity’s financial position and (b) analyzing and comparing financial
statements prepared in accordance with IfrSs and uS GAAp.
Dufry AnnuAl report 2011
105
– IfrS 11 joint Arrangements – effective january 1, 2013
IfrS 11 replaces IAS 31 Interests in joint ventures and SIC-13 jointly-controlled entities – non-monetary
Contributions by venturers. IfrS 11 removes the option to account for jointly controlled entities (jCes) using
proportionate consolidation. Instead, jCes that meet the definition of a joint venture must be accounted for
using the equity method.
– IfrIC 20 the Interpretation clarifies when production stripping of a surface mine should lead to the recogni-
tion of an asset and how that asset should be measured, both initially and in subsequent periods – effective
january 1, 2013
5. Segment information
An operating segment is a group of assets and operations engaged in providing products or services that are
subject to risks and returns different from those of other operating segments. transfer prices between operations
and segments are set on an arm’s length basis. Where sales, expenses or the result include transfers between
segments, those transfers are eliminated in the consolidation.
the Group’s risks and returns are predominantly affected by the fact that it operates in different countries. there-
fore, the Group reports segmental information as it does internally to the group executive committee, using
geographical segments. the activities of the distribution centers are reported as a separate segment.
2011
in millions of cHf
europe
Africa
eurasia
Central America & Caribbean
South America
north America
Distribution Centers
eliminations
Dufry Group
2010
in millions of cHf
europe
Africa
eurasia
Central America & Caribbean
South America
north America
Distribution Centers
eliminations
Dufry Group
1 ebItDA before other operational result.
net sales
tHirD party
aDvertisinG
income
net sales –
intercompany
turnover
eBitDa1
299.8
136.9
212.4
364.2
864.7
677.1
5.8
–
2,560.9
4.5
1.2
3.0
4.1
21.2
23.4
19.4
–
76.8
–
–
–
–
–
–
690.2
(690.2)
–
304.3
138.1
215.4
368.3
885.9
700.5
715.4
(690.2)
2,637.7
12.3
18.6
17.3
28.9
139.2
77.0
77.6
–
370.9
net sales
tHirD party
aDvertisinG
income
net sales –
intercompany
turnover
eBitDa1
306.0
182.3
225.1
395.5
693.3
730.7
0.6
–
2,533.5
4.8
1.8
4.0
4.5
20.0
25.1
16.5
–
76.7
–
–
–
–
–
–
515.1
(515.1)
–
310.8
184.1
229.1
400.0
713.3
755.8
532.2
(515.1)
2,610.2
7.4
29.3
11.2
23.6
136.5
78.9
56.2
–
343.1
the share in net sales to third parties of the Group generated in Switzerland (domicile) represents about 1.2%
(2010: 1.3%) of the total.
106
Dufry AnnuAl report 2011
2011
in millions of cHf
europe
Africa
eurasia
Central America & Caribbean
South America
north America
Distribution Centers
unallocated positions
Dufry Group
2010
in millions of cHf
europe
Africa
eurasia
Central America & Caribbean
South America
north America
Distribution Centers
unallocated positions
Dufry Group
total
assets
203.2
66.8
108.3
429.3
1,097.0
553.9
351.5
507.8
3,317.8
total
assets
213.4
72.1
86.6
402.9
535.6
545.0
194.0
89.6
total
liaBilities
income tax
expense
capital
expenDiture
paiD
Depreciation
anD amor-
tization ¹
otHer
non-casH
items
96.7
37.8
52.8
83.8
273.7
103.4
182.7
1,532.8
2,363.7
1.8
(1.4)
2.2
0.6
(29.3)
(0.5)
(1.2)
(0.4)
(28.2)
(14.2)
(1.4)
(4.6)
(15.8)
(27.0)
(19.9)
(0.5)
(11.6)
(95.0)
14.2
4.9
8.2
23.9
34.7
40.3
1.0
4.3
3.5
1.9
(0.5)
3.0
4.7
0.4
4.9
4.6
131.5
22.5
total
liaBilities
income tax
expense
capital
expenDiture
paiD
Depreciation
anD amor-
tization ²
otHer
non-casH
items
104.8
49.1
40.5
72.4
229.4
93.3
118.3
616.6
(1.0)
(1.8)
0.2
(3.1)
(19.4)
8.3
(1.7)
(2.4)
(20.9)
(21.3)
(2.3)
(9.4)
(14.4)
(11.5)
(36.4)
(1.0)
(2.5)
(98.8)
12.7
6.0
10.0
28.3
20.1
46.8
1.8
3.8
129.5
2.1
0.8
2.3
1.2
3.0
0.4
(0.9)
36.6
45.5
2,139.2
1,324.4
1 2011 includes impairments of Chf 1.3 million in region europe.
2 2010 includes impairments of Chf 0.1 million in region europe.
the unallocated liabilities correspond mainly to long-term financial debt whereas the unallocated assets comprise
those of headquarter companies.
Dufry AnnuAl report 2011
107
6. business combinations
2011 transactions
6.1 acquisition of interbaires and other companies in armenia, ecuador and uruguay
on August 4, 2011, continuing with its strategy of investing in emerging markets, the Group acquired 100% of the shares
and obtained control of several companies in South America and in Armenia, for a total consideration of Chf 753.9 mil-
lion (uSD 987.2 million). the main companies incorporated into the group are:
– Interbaires SA: the exclusive retailer operating duty free shops at both international airports of buenos Aires plus
the airports of Cordoba, Mendoza and other smaller destinations in Argentina,
– navinten SA and blaicor SA: two uruguayan retailers operating duty free shops at the international airports of
Montevideo and punta del este respectively,
– ADf Shops CjSC: An Armenian retailer operating exclusively the duty free shops at the international airport of
yerevan,
– ecuador Duty free SA: A retailer in ecuador operating duty free shops at the international airport of Guayaquil, and
– International operation & Services Corp, an uruguayan distribution platform delivering duty free products to the
above mentioned retailers.
As a result of the acquisition the Group achieved a leading position in the Duty free market in South America. the
Group is integrating the new businesses into its existing organization and in this way generating considerable
synergies. the acquisitions have been accounted for using the acquisition method. the financial statements of the
Group include the results of all the above mentioned companies as well as some intermediate holding entities as
from the acquisition date. the fair value of the identifiable assets and liabilities of the acquired companies at the
date of acquisition and the resulting goodwill were determined preliminary as follows:
recognized amounts of identifiable assets acquired and liabilities assumed:
in millions of usD
Inventories
other assets
property, plant and equipment
Intangible assets, mainly concession rights
net deferred tax liability
provisions and contingent liabilities
liabilities
identifiable net assets
Goodwill
total consideration
Cash flow on the acquisition:
in millions of usD
total consideration
Cash acquired with the transaction
subtotal
payables for this acqusition at the end of the period
net cash outflow
auGust 4, 2011
preliminary fair value
71.8
62.4
20.3
596.3
(40.6)
(41.2)
(82.0)
587.0
400.2
987.2
2011
(987.2)
24.7
(962.5)
–
(962.5)
108
Dufry AnnuAl report 2011
Acquisition related expenses, included in the other operational result in the income statement for the period ended
December 31, 2011 amounted to Chf 11.1 million (uSD 12.5 million).
In the period ended December 31, 2011 these operations contributed Chf 171.4 million (uSD 195.6 million) in
turnover and Chf 34.4 million (uSD 39.2 million) in ebItDA1 to the consolidated income statement of the Group.
6.2 acquisition of sovenex sas, martinique
on September 14, 2011, the Group acquired through a share deal 100% of the shares of Sovenex SAS, a retailer
operating the duty free shops at the international airport of Martinique (france) for a total consideration of
Chf 7.0 million (eur 6.1 million). As a result of the acquisition, the Group expects to increase its presence in the
french Caribbean and to improve profitability through economies of scale. the goodwill will not be deductible
for tax purposes.
the acquisition has been accounted for using the acquisition method. these financial statements include the
results of Sovenex SAS as of September, 2011. the fair value of the identifiable assets and liabilities of the acquired
company at the date of acquisition and the resulting goodwill were determined preliminary as follows:
in millions of eur
Cash
Contingent consideration
total consideration
recognized amounts of identifiable assets acquired and liabilities assumed:
in millions of eur
Inventories
other assets
property, plant and equipment
Concession rights
net deferred tax liability
Current liabilities
identifiable net assets
Goodwill
total consideration
Cash flow on the acquisition:
in millions of eur
total consideration
Cash acquired with the transaction
subtotal
payables for this acqusition at the end of the period
net cash outflow
septemBer 14, 2011
5.4
0.7
6.1
preliminary fair value
0.6
2.3
0.1
5.2
(1.7)
(1.1)
5.4
0.7
6.1
2011
(6.1)
2.0
(4.1)
1.9
(2.2)
Dufry AnnuAl report 2011
109
Acquisition related expenses, included in the other operational result in the income statement for the period ended
December 31, 2011 amounted to Chf 0.2 million (eur 0.2 million).
In the period ended December 31, 2011 this operation contributed Chf 2.8 million (eur 2.3 million) in net sales
and Chf 0.4 million (eur 0.4 million) in ebItDA1 to the consolidated income statement of the Group.
If all business combinations of 2011 would have occurred as of the beginning of the current reporting year, the
Group would have generated a turnover of Chf 2,855.8 million and an operative result of Chf 413.0 million
6.3 reconciliation of cash flows (used for) / from business combinations (Bc), net of cash
2011
in millions of cHf
cost of tHe
acquisition
net casH
acquireD
Interbaires and other companies
Sovenex SAS, Martinique (france)
network Italia edicole
puerto rico
other
total
(753.9)
(7.0)
–
–
(0.4)
(761.3)
18.9
2.3
–
–
–
21.2
suBtotal
(735.0)
(4.7)
–
–
(0.4)
(740.1)
cHanGes
in accounts
payaBles
–
2.2
(4.4)
(0.9)
–
(3.1)
net casH
flow
(735.0)
(2.5)
(4.4)
(0.9)
(0.4)
(743.2)
2010 transactions
6.4 merger with Dufry south america ltd
on December 31, 2009, Dufry AG owned 51% of the shares of Dufry South America ltd. (“DSA”) which operates
duty free shops in South America. on february 11, 2010, Dufry South America ltd., bermuda; Dufry AG (“DAG”)
and Dufry holdings & Investments AG, basel (“DhI”), a wholly-owned Swiss subsidiary of DAG, entered into a
Merger and Amalgamation Agreement, providing for an amalgamation under the bermuda Companies Act 1981
and a merger under applicable Swiss law. Simultaneously with the completion of the Merger, the capital of DhI
has increased by a contribution in kind consisting of 49% of the net assets of DSA.
pursuant to the Merger Agreement negotiated between the Special Committee of board Members of DSA
(“SCbM”) and the board of Directors of DAG, DSA shareholders and DSA brazilian Depositary receipt holders
(“bDr”) received one DAG share (or DAG bDr) in exchange for 4.10 DSA shares / bDrs (“exchange ratio”).
furthermore, DSA shareholders and bDr holders received an extraordinary dividend of uSD 4.71 per DSA
share / bDr on April 12, 2010.
the new shares of DhI created in course of the Merger were contributed into DAG in exchange for 7,762,249 shares
newly issued and bDrs of DAG (“Merger Shares”). Such Merger shares were then allocated and given to the
shareholders of DSA and to the holders of DSA bDrs, respectively. DAG listed its shares through a bDr program
in brazil with the bDrs being traded on bM&fboveSpA.
the Special General Meeting of the members of DSA (“SGM”) held on March 19, 2010 and an extraordinary
Shareholders Meeting of Dufry AG (“eGM”) held on March 22, 2010, discussed, evaluated and approved the rel-
evant aspects of the Merger Agreement.
110
Dufry AnnuAl report 2011
overview of merGer transactions
equity DSA as of March 22, 2010
less dividend approved in relation with the merger
equity of DSA as per March 22, 2010
portion acquired (48.96%)
book value of non-controlling interests at historical cost
Currency translation adjustments
Carrying amount of these non-controlling interests
Goodwill attributable to the non-controlling interests
not recognized in the books of the parent
Contribution in kind
recognized directly in reserves for transactions
with non-controlling interest
6.5 Dufry (shanghai) commercial co. ltd., china
in tHousanDs
of usD
in tHousanDs
of cHf
792,187
(306,150)
486,037
237,964
117,615
(25,419)
87,481
92,196
150,482
603,981
511,785
Dufry founded in february 2010 Dufry (Shanghai) Commercial Co. ltd. thereafter Dufry signed a 7-year contract
with Shanghai hongqiao International Airport to operate 20 duty paid stores, distributed over an area of 1,500 m2,
in the new West terminal. Serving mainly domestic destinations, hongqiao International Airport handles more than
23 million passengers per year and is considered one of the two main gates for travelers arriving to and departing
from Shanghai. the West terminal, and thus our 20 shops, became operational end of March 2010, just ahead of
the opening of the Shanghai 2010 World expo.
Since the start of operations Dufry (Shanghai) Commercial Co. ltd contributed in 2010 Chf 16.1 million to the net
sales, and reduced Chf 2.0 million the earnings before interest and taxes, of the Group.
6.6 Global service retail Group
As of May 19, 2010, Dufry acquired the remaining 49% of the voting shares of Global Service retail Group (GSrl)
for a price of Chf 2.8 million from the minority shareholder. the difference of Chf 1.2 million between the book
value of the additional interest acquired and the respective consideration has been recognized in the reserve for
transactions with non-controlling interest.
6.7 reconciliation of cash flows (used for) / from business combinations (Bc), net of cash
2010
in millions of cHf
cost of tHe
acquisition
net casH
acquireD
Global retail Services
operadora Aero-boutiques (lDf)
network Italia edicole
puerto rico
other
total
(2.8)
–
–
–
–
(2.8)
–
–
–
–
–
–
suBtotal
(2.8)
–
–
–
–
(2.8)
cHanGes
in accounts
payaBles
–
(18.2)
(2.6)
(1.1)
(0.2)
(22.1)
net casH
flow
(2.8)
(18.2)
(2.6)
(1.1)
(0.2)
(24.9)
7. net sales
Different breakdowns of net sales are as follows:
net sales by product categories:
in millions of cHf
perfumes and Cosmetics
Confectionery, food and Catering
Wine and Spirits
literature and publications
Watches, jewelry and Accessories
fashion, leather and baggage
tobacco goods
electronics
toys, Souvenirs and other goods
total
net sales by market sector:
in millions of cHf
Duty free
Duty paid
total
net sales by channel:
in millions of cHf
Airports
Cruise liners and seaports
railway stations and other
Downtown hotels and resorts
total
Dufry AnnuAl report 2011
111
2011
656.6
426.7
416.3
236.0
242.9
213.2
180.4
81.7
107.1
2010
588.9
441.2
383.4
291.2
249.4
199.0
192.1
85.4
102.9
2,560.9
2,533.5
2011
2010
1,690.3
870.6
2,560.9
1,604.5
929.0
2,533.5
2011
2010
2,258.2
2,213.5
98.0
118.0
86.7
113.0
118.4
88.6
2,560.9
2,533.5
112
Dufry AnnuAl report 2011
8. Cost of sales
Cost of sales are recognized when the Company sells a product and comprise the purchase price and the cost incurred
until the product arrives at the warehouse, i.e. import duties, transport and third parties handling cost as well as
inventory valuation adjustments and inventory differences.
9. Selling expenses
in millions of cHf
Concession fees and rents
Credit card commissions
Advertising and commission expenses
packaging materials
other selling expenses
selling expenses
Concession and rental income
Commission income
Commercial services and other selling income
selling income
total
2011
2010
(558.8)
(31.2)
(13.9)
(8.6)
(10.9)
(623.4)
14.6
2.0
27.1
43.7
(572.8)
(29.5)
(12.9)
(8.4)
(6.4)
(630.0)
19.7
2.5
23.0
45.2
(579.7)
(584.8)
10. number of retail shop concessions
Dufry Group operates around 1,200 retail shops in 45 countries at the reporting date. Dufry has entered into conces-
sion arrangements with operators of airports, seaports, railway stations etc. to operate these retail shops.
the concession providers grant the right to sell a pre-defined assortment of products to travelers during the
concession period as defined in the respective arrangements.
the arrangements typically define among other aspects:
– duration
– nature of remuneration
– assortment of products to be sold
– location
they may comprise one or several shops and are awarded in a public or private tender or in a negotiated transaction.
the leasehold improvements and installations of these operations are depreciated over the shorter of the useful
life of the assets or the duration of the arrangements.
Dufry AnnuAl report 2011
113
11. personnel expenses
in millions of cHf
Salaries and wages
Social security expenses
retirement benefits (defined contribution plans)
retirement benefits (defined benefit plans)
other personnel expenses
total
2011
2010
(302.5)
(56.6)
(3.2)
(1.8)
(38.5)
(402.6)
(303.2)
(54.4)
(3.4)
(1.3)
(36.6)
(398.9)
number of full time equivalents at year-end
13,874
11,892
12. General expenses
in millions of cHf
repairs, maintenance and utilities
legal, consulting and audit fees
premises
office and administration
travel, car, entertainment and representation
eDp and It expenses
franchise fees and commercial services
taxes, other than income taxes
pr and advertising
Insurances
bank expenses
total
2011
(33.6)
(35.1)
(20.8)
(16.3)
(16.1)
(18.0)
(10.7)
(12.1)
(9.4)
(5.4)
(4.6)
2010
(32.9)
(31.2)
(22.2)
(17.1)
(16.1)
(14.9)
(11.3)
(9.3)
(9.7)
(6.6)
(3.8)
(182.1)
(175.1)
13. Depreciation, amortization and impairment
in millions of cHf
Depreciation
Impairment
total property plant and equipment
Amortization
Impairment
total intangible assets
total
note
19
21
2011
(55.2)
(3.6)
(58.8)
(72.4)
(0.3)
(72.7)
2010
(63.6)
(0.1)
(63.7)
(65.8)
–
(65.8)
(131.5)
(129.5)
114
Dufry AnnuAl report 2011
14. other operational result
other operational expenses and other operational income include non-recurring transactions, impairments of
financial assets and provisions.
in millions of cHf
transaction costs
Consulting fees and expenses related to projects, as well as start-up expenses
Closing or rebranding of shops
expenses for provisions
Impairment of financial assets
losses on sale of non-current assets
other expenses
subtotal other operational expenses
in millions of cHf
Gain on sale of non-current assets
recovery of write offs / release of allowances
release of project costs
other income
subtotal other operational income
in millions of cHf
other operational expenses
other operational income
other operational result
15. Interest
in millions of cHf
Interest income on short-term deposits
other interest and finance income
total interest income
Interest on bank debt
Amortization of credit arrangement fees
Discounted interest on financial liabilities
other finance expenses
interest expense on financial liabilities
Interest on non-financial instruments
total interest expense
2011
(11.3)
(6.3)
(3.2)
(2.2)
(1.2)
(0.3)
(4.6)
(29.1)
2011
1.7
–
–
0.5
2.2
2010
–
(7.3)
(4.1)
(0.8)
(1.1)
(0.6)
(4.3)
(18.2)
2010
0.6
0.5
0.1
1.3
2.5
2011
2010
(29.1)
2.2
(26.9)
(18.2)
2.5
(15.7)
2011
4.1
–
4.1
(42.2)
(6.9)
(0.2)
(5.9)
(55.2)
–
(55.2)
2010
4.3
0.5
4.8
(31.3)
(4.8)
(0.3)
(0.5)
(36.9)
(0.1)
(37.0)
Dufry AnnuAl report 2011
115
16. Income taxes
Consolidated income statement:
in millions of cHf
Current income taxes
of which corresponding to the current period
of which adjustments recognized in relation to prior years
Deferred income taxes
of which related to the origination or reversal of temporary differences
of which adjustments recognized in relation to prior years
of which adjustments due to change in tax rates
total
in millions of cHf
Consolidated earnings before income tax (ebt)
expected tax rate in %
tax at the expected rate
effeCt of:
Income not subject to income tax
Different tax rates of subsidiaries in other jurisdictions
Different tax regime for sale of subsidiaries
non deductible expenses
unused tax loss carry-forwards not recognized
non recoverable withholding taxes
Adjustments recognized in relation to prior year
other items
total
2011
(41.7)
(43.1)
1.4
13.5
13.5
0.3
(0.3)
(28.2)
2011
163.1
29.5%
(48.1)
14.4
26.3
0.4
(14.6)
(0.7)
(6.7)
1.4
(0.7)
(28.2)
2010
(41.9)
(41.3)
(0.6)
21.0
16.0
5.2
(0.2)
(20.9)
2010
165.7
28.0%
(46.4)
14.9
26.5
0.2
(6.1)
(8.3)
(1.9)
4.6
(4.4)
(20.9)
the expected tax rate used for 2011 is 29.5% (2010: 28.0%). the tax rate approximates the weighted average based
on net sales of the countries where Dufry is active. the increase in the expected tax rate comes from Ghana +8%,
bolivia +9% and the mix effect from the newly incorporated companies, i.e. Argentina 35%, uruguay 25%, ecua-
dor 25% and Armenia 20%.
Current tax assets and liabilities:
in millions of cHf
Income tax refunds receivable
Income tax payable
total
31. 12. 2011
31. 12. 2010
3.4
14.2
(10.8)
6.1
11.7
(5.6)
Income tax receivables or payables for the current and prior period are measured at the amount expected to be
recovered from or paid to the tax authorities. the tax rates and tax laws used to compute the amounts are those
that are enacted at the reporting date.
116
Dufry AnnuAl report 2011
Income tax recognized directly in equity:
in millions of cHf
Current tAX
Current tax effect on share based payments
subtotal
DeferreD tAX
tax effect on share based payments
tax effect on treasury shares
subtotal
total
2011
2010
3.5
3.5
(3.8)
1.5
(2.3)
1.3
2.4
2.4
1.4
0.6
2.0
4.4
Deferred income tax recognized in other comprehensive income:
in millions of cHf
2011
2010
ArISInG on InCoMe AnD eXpenSeS reCoGnIzeD
In other CoMprehenSIve InCoMe
net gain / (loss) on hedge of net investment
Cash flow hedges
total
17. earnings per share
9.9
(0.1)
9.8
(6.3)
0.3
(6.0)
basic
basic earnings per share are calculated by dividing the net earnings attributable to equity holders of the parent
by the weighted average number of shares outstanding during the year.
in millions of cHf / quantity
net earnings attributable to equity holders of the parent
Weighted average number of ordinary shares outstanding
Basic earnings per share in cHf
2011
2010
111.9
26,873
4.16
116.6
25,166
4.63
Diluted
Diluted earnings per share are calculated by dividing the net earnings attributable to equity holders of the parent
by the weighted average number of ordinary shares outstanding during the year plus the weighted average num-
ber of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into
ordinary shares.
in millions of cHf / quantity
net earnings attributable to equity holders of the parent
Weighted average number of ordinary shares outstanding adjusted for
the effect of dilution
Diluted earnings per share in cHf
2011
111.9
26,873
4.16
2010
116.6
25,447
4.58
Dufry AnnuAl report 2011
117
earnings per share adjusted for amortization (cash epS)
Dufry is presenting an adjusted epS, so called Cash epS, where the net earnings attributable to equity holders of
the parent are adjusted by the amortization effect generated by the intangible assets identified during the purchase
price allocations of past acquisitions. With this Cash epS, Dufry aims to facilitate the comparison at epS level with
other companies not having performed such acquisition activities.
in millions of cHf / quantity
net earnings attributable to equity holders of the parent
ADjuSteD for:
Dufry’s share of the amortization in respect of acquisitions
Adjusted net earnings
Weighted average number of ordinary shares outstanding
eps adjusted for amortization (cash eps) in cHf
Weighted average number of ordinary shares:
in tHousanDs
outstanding shares
less treasury shares
used for calculation of basic earnings per share
effeCt of DIlutIon:
Share options
used for calculation of earning per share adjusted for the effect of dilution
2011
111.9
57.3
169.2
26,873
6.30
2010
116.6
47.9
164.5
25,166
6.54
2011
2010
26,976
(103.4)
26,873
–
26,873
25,254
(88.0)
25,166
281.4
25,447
for movements in shares see note 29.1 equity, 30.1 Share-based payment and 30.3 treasury shares.
18. Components of other comprehensive income
2011
in millions of cHf
exchange differences on translating foreign operations
net gain / (loss) on hedge of net investment in foreign
operations
Income tax effect
subtotal
Changes in the fair value of interest rate swaps held as
cash flow hedges
Income tax effect
subtotal
other comprehensive income (loss)
attriButaBle to equity HolDers of tHe parent
Hedging &
revaluation
reserves
translation
reserves
non-
controllinG
interests
total
–
–
–
–
1.1
(0.1)
1.0
1.0
95.2
95.2
3.0
(82.7)
9.9
(82.7)
9.9
(72.8)
(72.8)
–
–
–
22.4
1.1
(0.1)
1.0
23.4
–
–
–
–
–
–
3.0
total
equity
98.2
(82.7)
9.9
(72.8)
1.1
(0.1)
1.0
26.4
118
Dufry AnnuAl report 2011
2010
in millions of cHf
attriButaBle to equity HolDers of tHe parent
Hedging &
revaluation
reserves
translation
reserves
non-
controllinG
interests
total
total
equity
exchange differences on translating foreign operations
–
(126.4)
(126.4)
20.5
(105.9)
net gain / (loss) on hedge of net investment in foreign
operations
Income tax effect
subtotal
Changes in the fair value of interest rate swaps held as
cash flow hedges
Income tax effect
subtotal
other comprehensive income (loss)
–
–
–
(2.2)
0.3
(1.9)
(1.9)
20.9
(6.3)
14.6
–
–
–
20.9
(6.3)
14.6
(2.2)
0.3
(1.9)
–
–
–
–
–
–
20.9
(6.3)
14.6
(2.2)
0.3
(1.9)
(111.8)
(113.7)
20.5
(93.2)
19. property, plant and equipment
2011
in millions of cHf
At CoSt
balance at january 1, 2011
business combinations
Additions (note 20)
Disposals
reclassification within classes
reclassification to intangible assets
Currency translation adjustment
Balance at December 31, 2011
ACCuMulAteD DepreCIAtIon
balance at january 1, 2011
Additions (note 13)
Disposals
Currency translation adjustment
Balance at December 31, 2011
IMpAIrMent
balance at january 1, 2011
Impairment (note 13)
Currency translation adjustments
Balance at December 31, 2011
leaseHolD
improvements
furniture
fixture
computer
HarDware
veHicles
worK in
proGress
total
205.2
156.9
6.6
17.6
(7.7)
11.5
–
0.4
0.8
12.4
(6.1)
8.1
–
0.6
233.6
172.7
(83.7)
(25.3)
7.2
–
(83.5)
(23.0)
5.5
(0.3)
43.4
0.8
6.8
(0.5)
0.6
–
0.3
51.4
(29.3)
(6.0)
0.4
–
(101.8)
(101.3)
(34.9)
(1.1)
(2.0)
0.1
(3.0)
(0.1)
(0.8)
(0.3)
(1.2)
(0.2)
(0.4)
–
(0.6)
7.0
0.1
0.9
(0.6)
–
–
–
7.4
(4.7)
(0.9)
0.6
(0.1)
(5.1)
–
–
–
–
16.0
7.2
25.5
(0.4)
(20.2)
(0.1)
1.3
29.3
–
–
–
–
–
–
(0.4)
–
(0.4)
428.5
15.5
63.2
(15.3)
–
(0.1)
2.6
494.4
(201.2)
(55.2)
13.7
(0.4)
(243.1)
(1.4)
(3.6)
(0.2)
(5.2)
Dufry AnnuAl report 2011
119
2010
in millions of cHf
At CoSt
balance at january 1, 2010
Additions (note 20)
Disposals
reclassification within classes
reclassification to intangible assets
Currency translation adjustment
Balance at December 31, 2010
ACCuMulAteD DepreCIAtIon
balance at january 1, 2010
Additions (note 13)
Disposals
Currency translation adjustment
Balance at December 31, 2010
IMpAIrMent
balance at january 1, 2010
Impairment (note 13)
Currency translation adjustment
Balance at December 31, 2010
CArryInG AMount
at December 31, 2011
at December 31, 2010
19.1 impairment
leaseHolD
improvements
furniture
fixture
computer
HarDware
veHicles
worK in
proGress
total
199.1
22.7
(10.1)
12.8
–
(19.3)
205.2
(68.5)
(28.6)
8.7
4.7
174.1
11.0
(16.7)
11.7
–
(23.2)
156.9
(86.9)
(27.9)
16.0
15.3
43.1
7.0
(3.0)
0.8
–
(4.5)
43.4
(29.7)
(5.9)
2.9
3.4
(83.7)
(83.5)
(29.3)
(1.2)
(0.1)
0.2
(1.1)
(0.1)
(0.2)
–
–
–
–
(0.1)
(0.2)
7.9
0.8
(0.8)
–
–
(0.9)
7.0
(4.9)
(1.2)
0.7
0.7
(4.7)
–
–
–
–
8.9
35.2
(0.1)
(25.3)
(0.3)
(2.4)
16.0
–
–
–
–
–
–
–
–
–
433.1
76.7
(30.7)
–
(0.3)
(50.3)
428.5
(190.0)
(63.6)
28.3
24.1
(201.2)
(1.5)
(0.1)
0.2
(1.4)
128.8
120.4
70.2
73.3
15.9
13.9
2.3
2.3
28.9
16.0
246.1
225.9
the impairment loss in 2011 relates to certain shops in europe (Chf 1.3 million) and uSA (Chf 1.7 million).
20. Cash flow used for purchase of property, plant
and equipment
in millions of cHf
2011
2010
payables for capital expenditure at the beginning of the period
business combinations
Additions of property, plant and equipment (note 19)
payables for capital expenditure at the end of the period
Currency translation adjustment
total cash flow
(14.0)
(2.9)
(63.2)
15.0
0.1
(65.0)
(15.8)
–
(76.7)
14.0
2.1
(76.4)
120
Dufry AnnuAl report 2011
21. Intangible assets
2011
in millions of cHf
At CoSt
balance at january 1, 2011
business combinations
Additions (see note 22)
Disposals
reclassifications from property, plant
and equipment
Currency translation adjustment
Balance at December 31, 2011
ACCuMulAteD AMortIzAtIon
balance at january 1, 2011
Additions (note 13)
Disposals
Currency translation adjustment
Balance at December 31, 2011
IMpAIrMent
balance at january 1, 2011
Additions (note 13)
Disposals
Currency translation adjustment
Balance at December 31, 2011
2010
in millions of cHf
At CoSt
balance at january 1, 2010
Additions (see note 22)
Disposals
reclassification
Currency translation adjustment
Balance at December 31, 2010
ACCuMulAteD AMortIzAtIon
balance at january 1, 2010
Additions (note 13)
Disposals
Currency translation adjustment
Balance at December 31, 2010
IMpAIrMent
balance at january 1, 2010
reclassification
Currency translation adjustment
Balance at December 31, 2010
concession riGHts
indefinite
lives
finite
lives
BranDs
GooDwill
otHer
total
62.5
–
–
–
–
769.2
460.7
1.2
(0.8)
–
(1.3)
106.9
158.9
–
–
–
–
–
61.2
1,337.2
158.9
–
–
–
–
–
–
–
–
–
–
(168.4)
(61.5)
0.3
(5.0)
(234.6)
(0.3)
–
–
(0.1)
(0.4)
–
–
–
–
–
–
–
–
–
–
338.5
306.3
–
–
–
70.5
715.3
–
–
–
–
–
(0.8)
–
–
–
(0.8)
58.1
0.7
22.7
(1.3)
0.1
1.2
1,387.2
767.7
23.9
(2.1)
0.1
177.3
81.5
2,354.1
(29.1)
(10.9)
1.0
(0.7)
(39.7)
–
(0.3)
0.2
0.1
–
(197.5)
(72.4)
1.3
(5.7)
(274.3)
(1.1)
(0.3)
0.2
–
(1.2)
concession riGHts
indefinite
lives
finite
lives
BranDs
GooDwill
otHer
total
132.1
787.5
–
–
(54.7)
(14.9)
62.5
17.2
0.4
54.7
(90.6)
769.2
149.9
6.6
–
–
2.4
158.9
–
–
–
–
–
(139.2)
(54.1)
(0.4)
25.3
(168.4)
(0.2)
0.2
–
–
(0.1)
(0.2)
–
(0.3)
–
–
–
–
–
–
–
–
–
389.8
–
–
–
(51.3)
338.5
–
–
–
–
–
(0.9)
–
0.1
(0.8)
52.7
11.6
(1.9)
0.3
(4.6)
58.1
(21.1)
(11.7)
1.6
2.1
1,512.0
35.4
(1.5)
0.3
(159.0)
1,387.2
(160.3)
(65.8)
1.2
27.4
(29.1)
(197.5)
–
–
–
–
(1.2)
–
0.1
(1.1)
Dufry AnnuAl report 2011
121
in millions of cHf
CArryInG AMount
at December 31, 2011
at December 31, 2010
concession riGHts
indefinite
lives
finite
lives
BranDs
GooDwill
otHer
total
61.2
62.5
1,102.2
600.5
158.9
158.9
714.5
337.7
41.8
29.0
2,078.6
1,188.6
21.1 Goodwill recognized from business combinations in 2011
Interbaires and other companies in Armenia, ecuador and uruguay:
on August 4, 2011, continuing with its strategy of investing in emerging markets, the Group acquired 100% of the
shares and obtained control of several companies in South and Central America and Asia, for a total consideration
of Chf 753.9 million (uSD 987.2 million). the goodwill resulting from the purchase price allocation was Chf 305.4 mil-
lion (uSD 400.2 million).
Sovenex SAS:
on September 14, 2011, the Group acquired through a share deal 100% of the shares of Sovenex SAS, a retailer oper-
ating the duty free shops at the international airport of Martinique (france) for a total consideration of Chf 7.0 million
(eur 6.1 million). the goodwill resulting from the purchase price allocation was Chf 0.9 million (eur 0.7 million).
21.2 Goodwill recognized from business combinations in 2010
network Italia edicole:
on September 14, 2009, the Group acquired all shares of network Italia edicole S.r.l. for a total consideration of
eur 12 million. the fair value of the identifiable assets and liabilities of the acquired company has been determined
during 2010. Dufry recognized in 2009 additional concession rights of Chf 25.9 million, which will be amortized
along the 18 years contract duration and an associated deferred tax liability of Chf 8.1 million. no goodwill was
recognized in relation with this transaction.
21.3 impairment test
Concession rights with indefinite useful lives, as well as brands and goodwill are subject to impairment tests each
year. Concession rights with finite useful lives are tested for impairment whenever events or circumstances indi-
cate that the carrying amount may not be recoverable.
21.3.1 Impairment test of goodwill
for the purpose of impairment testing, goodwill recognized from business combinations has been allocated to
the following six cash generating units (CGu’s). these groups also reflect the reportable segments that are ex-
pected to benefit from the synergies of the business combinations:
in millions of cHf
europe
Africa
eurasia
Central America & Caribbean
South America
north America
total carrying amount of goodwill
31. 12. 2011
31. 12. 2010
15.3
24.1
25.8
55.9
517.0
76.4
714.5
13.8
23.5
26.3
56.6
141.1
76.4
337.7
122
Dufry AnnuAl report 2011
the recoverable amounts of goodwill for each of the above group of CGu’s have been determined based on value-
in-use calculations. Such calculations are based on business plans approved by senior management and use
cash flow projections covering a five-year period as well as a discount rate, which represents the weighted aver-
age cost of capital (WACC) adjusted for regional specific risks.
Cash flows beyond that five-year period have been extrapolated using a steady growth rate that does not exceed
the long-term average growth rate for the respective markets in which these CGu’s operate. the discounted
cash flow model uses net sales as a basis to determine the free cash flow and the value assigned. net sales
projections are based on actual net sales achieved in the year 2011 and latest estimations for the projected years.
GooDwill
europe
Africa
eurasia
Central America & Caribbean
South America
north America
post tax
Discount rates
pre-tax
Discount rates
GrowtH rates
for net sales
2011
2010
2011
2010
2011
2010
6.30%
8.10%
6.22%
7.21%
7.60%
5.03%
6.34%
8.63%
7.65%
7.78%
8.31%
6.00%
8.48%
9.15%
6.78%
8.21%
9.12%
6.83%
8.80%
9.00%
8.85%
8.70%
12.68%
7.67%
4.5–9.3%
6.0–11.7%
8.0–22.0%
5.2–9.0%
6.3–7.0%
7.9–9.0%
4.5–12.0%
5.0–11.4%
5.2–38.1%
2.4–10.9%
5.9–11.1%
2.9–5.0%
As basis for the calculation of these discount rates, the following risk free interest rates have been used (derived
from prime 10-year bonds rates): Chf 0.73%, eur 1.87%, uSD 1.97% (2010: Chf 1.72%, eur 2.96%, uSD 3.30%).
Sensitivity to changes in assumptions
Management believes that any reasonably possible change in the key assumptions, on which the recoverable
amounts are based, would not cause the respective carrying amount to exceed its recoverable amount. the key
assumptions used for the determination of the value-in-use are the same as the ones described below for con-
cession rights.
21.3.2 Impairment test of concession rights with indefinite useful lives
for the purpose of impairment testing, concession rights with indefinite useful lives are allocated to the respec-
tive CGu’s to which they relate. the following table indicates the allocation of the concession rights with indefinite
useful lives to the group of CGu’s that are also the Company’s applicable reportable segments:
in millions of cHf
europe
Africa
eurasia
total carrying amount of concession rights
31. 12. 2011
31. 12. 2010
48.8
0.1
12.3
61.2
50.2
0.1
12.2
62.5
each of the above reportable segments represents a group of CGu’s, for example, region europe includes op-
erating concessions in the european region, which have been allocated and valued for the purpose of testing
the concession rights with indefinite lives. for impairment purposes, each company represents a cash gener-
ating unit.
from the reassessment performed in 2010 of the useful lives of the concession rights estimated as indefinite in
past periods, the management concluded that due to changes in the organization of the commercial area and
relationships with the landlords, the ones assigned to Dufry Mexico SA de Cv and Dufry free Shop SpA, Italia
should be considered as concession rights with a definite useful life as of 2010. Consequently, management
estimated based on the lease agreements and extensions that the concession rights regarding Dufry Mexico SA
Dufry AnnuAl report 2011
123
de Cv has a remaining useful life of 10 years and the concession rights regarding Dufry free Shop SpA, Italia has
a remaining useful life of 17 years. the yearly amortization of concession rights increased in 2010 by Chf 3.9 mil-
lion due to this change. In both cases the impairment test showed that the carrying amount at the reporting date
was lower as the fair value.
the recoverable amounts for each of the CGu’s have been determined based on value-in-use calculations. Such
calculations are based on business plans approved by senior management and use cash flow projections cover-
ing a five-year period as well as a discount rate, which represents the weighted average cost of capital (WACC)
adjusted for local specific risks.
Cash flows beyond that five-year period have been extrapolated using a steady growth rate that does not exceed
the long-term average growth rate for the respective markets in which these CGu’s operate. the discounted
cash flow model uses net sales as a basis to determine the free cash flow and subsequently the value assigned.
net sales projections are based on actual net sales achieved in year 2011 and latest estimations for the years
thereafter.
the following are the key assumptions used for determining the recoverable amounts for each of the above group
of CGu’s:
post tax
Discount rates 1
pre-tax
Discount rates 1
GrowtH rates
for net sales
concession riGHts
2011
2010
2011
2010
2011
2010
europe
Africa
eurasia
6.19%
7.71%
6.09%
6.34%
8.82%
7.10%
7.40%
8.36%
6.09%
7.59%
9.75%
7.10%
1.9–5.9%
5.0–7.6%
8.9–9.7%
4.2–5.8%
9.0–14.5%
9.3–13.8%
1 Depending on the country in which the concession is operated.
Sensitivity to changes in assumptions
the actual recoverable amount for the CGu’s subject to impairment testing exceeds its carrying amount by
Chf 434.0 million (2010: Chf 458.3 million). With regard to the assessment of value-in-use of these CGu’s,
management believes that no reasonably possible change in any of the above key assumptions would cause the
carrying value of the concession rights to materially exceed its recoverable amount.
21.3.3 Key assumptions used for value-in-use calculations
the calculation of value-in-use is most sensitive to the following assumptions:
– Sales growth
– Gross margin and suppliers prices
– Concession fee levels
– Discount rates
Sales growth:
Sales growth is estimated based on several factors. first Management takes into consideration statistics published
by Airforecast or ACI (Airports Council International) to estimate the development of international passenger
transit per airport or country where Dufry is active. then Management takes into consideration specific price
inflation factors of the country, cross currency effect from origin of main passenger groups and the expected
increase in attractively to capture clients (penetration) per business segment.
Gross margins:
the expected gross margins are based on average product assortment values estimated by the management for
the budget 2012. these values are maintained over the planning period or where specific actions are planned,
these values have been increased or decreased by up to 1% over the 5 planned years compared to the historical
precedents. the gross margin is also affected by supplier’s prices. estimates are obtained from global negotiations
124
Dufry AnnuAl report 2011
held with the main suppliers for the products and countries for which products are sourced, as well as data relating
to specific commodities during the months before the reporting date.
Concession fee levels:
these assumptions are important because, as well as using specific economic sector data for growth rates (as
noted below), management assesses how the position of the CGu, relative to its competitors, might change over
the projected period. for the CGu’s subject to a value-in-use calculation, management expects the competitive
position to remain stable over the budget period.
Discount rates:
Several factors affect the discount rates.
– for the financial debt part the rate is based on the yield of the respective currency for a ten-year government
bond increased by the company’s effective bank margin and adjusted by the effective blended tax rate of the
respective CGu.
– for the equity part, a 5% equity risk premium was added to the rate commented above and adjusted by the beta
of Dufry’s peer group.
the same methodology is used by management to determine the discount rate used in discounted cash flow (DCf)
valuations, which are a key instrument to assess business potential of new or additional investment proposals.
21.3.4 brands
the brand name Dufry is not allocated to any specific CGu for impairment testing purpose, but to a group of CGu’s.
the brand name hudson is allocated only to the CGu’s of hudson. Management believes that the synergies from
the brands reflecting the economic reality are in accordance with these two groupings.
the recoverable amount is determined based on the relief from the royalty method that considers a steady
royalty stream of 0.3% post tax of the net sales projected of Dufry (without hudson) and a steady royalty stream
of 0.9% post tax of the net sales projected of hudson. the net sales projections cover a period of five years
(2012–2016) with a year on year growth rate between 4.7% and 21.0% (budget). this growth rate does not exceed
the long-term average growth rate for Dufry Group. the discount rate of 5.0% (2010: 6.0%) represents the
weighted average cost of capital (WACC) at Group level. the recoverable amount exceeds the carrying amount
by Chf 221.6 million (2010: Chf 202.1 million).
22. Cash flows used for purchase of intangible assets
in millions of cHf
2011
2010
payables for capital expenditure at january 1
Additions of intangible assets (note 21) 1
payables for capital expenditure at December 31
Currency translation adjustment
total cash flow
(12.8)
(23.9)
6.9
(0.2)
(30.0)
(0.8)
(35.4)
12.8
1.0
(22.4)
1 the additions in 2011 are mainly comprised of Chf 8.7 million for usufruct Italy and software purchases for Dufry do brasil of Chf 5.3 million, Italy
Chf 3.7 million, hudson Group Chf 2.1 million and Dufry Management Chf 2.0 million.
23. Deferred tax assets and liabilities
temporary differences arise from the following positions:
in millions of cHf
DeferreD tAX ASSetS
property plant and equipment
Intangible assets
provisions and other payables
tax loss carryforward
other
total
DeferreD tAX lIAbIlItIeS
property plant and equipment
Intangible assets
provisions and other payables
other
total
Dufry AnnuAl report 2011
125
31. 12. 2011
31. 12. 2010
8.5
79.0
19.9
38.6
16.3
162.3
(1.3)
(160.7)
(16.6)
(5.7)
(184.3)
8.5
81.2
15.8
24.3
20.7
150.5
(0.5)
(127.8)
(26.0)
(4.7)
(159.0)
Deferred tax liabilities net
(22.0)
(8.5)
there are no temporary differences associated with investments in subsidiaries, for which deferred tax liabilities
need to be recognized.
Deferred tax balances are presented in the consolidated statement of financial position as follows:
in millions of cHf
Deferred tax assets
Deferred tax liabilities
Balance at the end of the period
31. 12. 2011
31. 12. 2010
146.5
(168.5)
(22.0)
137.8
(146.3)
(8.5)
reconciliation of movements to the deferred taxes:
in millions of cHf
31. 12. 2011
31. 12. 2010
Changes in deferred tax assets
Changes in deferred tax liabilities
business combinations
Currency translation adjustment
Deferred tax income (expense) at the end of the period
8.7
(22.2)
33.1
(6.1)
13.5
(3.1)
17.2
–
6.9
21.0
126
Dufry AnnuAl report 2011
tax loss carry-forwards
Certain subsidiaries incurred tax losses, which according to the local tax legislation gives rise to a tax credit usable
in future tax periods. however, the use of this tax benefit can be limited in time (expiration) and by the ability of the
respective subsidiary to generate enough taxable profits in future.
Deferred tax assets relating to tax loss carry-forwards or temporary differences are recognized when it is
probable that such tax credits can be utilized in the future in accordance with the budget 2012 approved by the
board of Directors and the projections prepared by management for these entities.
the unrecognized tax loss carry-forwards by expiry date are as follows:
in millions of cHf
expiring within 1 to 3 years
expiring within 4 to 7 years
expiring after 7 years
With no expiration limit
total
24. other non-current assets
in millions of cHf
Guarantee deposits
loans and contractual receivables
other
subtotal
Allowances
total
other non-current assets have maturities exceeding 12 months from initial recognition.
Movement in allowances:
in millions of cHf
balance at the beginning of the period
Creation
unused amounts reversed
Currency translation adjustment
Balance at the end of the period
2011
4.0
42.6
82.3
15.0
143.9
2010
2.9
32.2
77.9
27.2
140.2
31. 12. 2011
31. 12. 2010
12.9
18.3
8.5
39.7
(1.9)
37.8
2011
(2.0)
–
0.1
–
(1.9)
12.9
20.3
7.2
40.4
(2.0)
38.4
2010
(1.4)
(0.7)
–
0.1
(2.0)
Dufry AnnuAl report 2011
127
25. Inventories
in millions of cHf
purchased inventories at cost
Inventory allowances
total
31. 12. 2011
31. 12. 2010
453.8
(21.8)
432.0
314.9
(8.8)
306.1
Cash flow used for / from increase / decrease in inventories:
in millions of cHf
2011
2010
balance at the beginning of the period
balance at the end of the period
Gross change
business combinations
Currency translation adjustment
cash flow – (increase) / decrease in inventories
(314.9)
(453.8)
(138.9)
63.9
5.1
(69.9)
(315.7)
(314.9)
0.8
–
(33.5)
(32.7)
Cost of sales includes inventories written down to net realizable value and inventory differences of Chf 17.0 million
(2010: Chf 13.6 million).
26. trade and credit card receivables
in millions of cHf
trade receivables
Credit card receivables
Gross
Allowances
net
31. 12. 2011
31. 12. 2010
23.7
24.1
47.8
(0.8)
47.0
12.7
38.5
51.2
(0.4)
50.8
trade receivables and credit card receivables are stated at their nominal value less allowances for doubtful
amounts. these allowances are established based on an individual evaluation when collection appears to be no
longer probable.
Aging analysis of trade receivables:
in millions of cHf
not due
overdue:
up to 30 days
31 to 60 days
61 to 90 days
More than 90 days
total overdue
trade receivables, gross
31. 12. 2011
31. 12. 2010
12.8
6.5
5.8
1.7
1.6
1.8
10.9
23.7
5.5
0.1
0.1
0.5
6.2
12.7
128
Dufry AnnuAl report 2011
Movement in allowances:
in millions of cHf
balance at the beginning of the period
Creation
Balance at the end of the period
27. other accounts receivable
in millions of cHf
Sales tax and other taxes
refund from suppliers and concessionaires
receivables from subtenants and local business partners
prepayments
Accrued concession fees and rents
personnel receivables
Guarantee deposits
Accrued income
Derivative financial assets 1
loans receivable
other
total
Allowances
total
1 See note 38 “financial instruments”.
Movement in allowances:
in millions of cHf
balance at the beginning of the period
Creation
release
utilized
Currency translation adjustment
Balance at the end of the period
2011
(0.4)
(0.4)
(0.8)
2010
(0.4)
–
(0.4)
31. 12. 2011
31. 12. 2010
41.7
30.8
14.5
13.4
13.3
1.9
1.7
1.1
0.4
0.2
12.2
131.2
(3.9)
127.3
2011
(1.6)
(2.0)
–
(0.4)
0.1
(3.9)
41.6
24.6
7.6
10.4
9.4
2.8
1.5
1.0
0.4
2.3
4.9
106.5
(1.6)
104.9
2010
(1.7)
(0.3)
0.2
0.1
0.1
(1.6)
Dufry AnnuAl report 2011
129
28. Cash and Cash equivalents
Cash and cash equivalents consist of cash on hand and banks as well as short-term deposits at banks with maturity
of 90 days or less.
Cash and cash equivalents at the end of the reporting period include Chf 6.1 million (2010: Chf 6.4 million) held
by subsidiaries operating in countries with exchange controls or other legal restrictions on money transfer.
29. equity
29.1 issued capital
in millions of cHf
Share capital
Share premium
total
29.1.1 fully paid ordinary shares
31. 12. 2011
31. 12. 2010
134.9
934.5
1,069.4
134.9
934.2
1,069.1
in millions of cHf
numBer of sHares
sHare capital
sHare premium
balance at january 1, 2010
Issue of shares
Share issuance costs
Balance at December 31, 2010
release of accrued share issuance costs
reclassification to reserves
Balance at December 31, 2011
19,213,954
7,762,249
–
26,976,203
–
–
96.1
38.8
–
134.9
–
–
26,976,203
134.9
391.4
565.2
(22.4)
934.2
2.6
(2.3)
934.5
the extraordinary General Shareholders’ meeting of Dufry AG of March 22, 2010 approved the increase of registered
share capital by Chf 38,811,245 from Chf 96,069,770 to Chf 134,881,015 by the issuance of 7,762,249 registered
shares, each with a par value of Chf 5. the share capital of Chf 38,811,245 was settled by a contribution in kind
consisting of 4,896 registered shares of Dufry holdings & Investments AG, basel with a nominal value of Chf 100
each. the contribution in kind amounted to Chf 604.0 million.
for share options granted under the Company's specific restricted stock unit (“rSu”) plans see note 30.
29.2 reserves
in millions of cHf
hedging and revaluation reserves
translation reserves
retained earnings
total
31. 12. 2011
31. 12. 2010
(0.9)
(176.6)
(8.4)
(185.9)
(1.9)
(199.0)
(105.8)
(306.7)
130
Dufry AnnuAl report 2011
29.2.1 hedging and revaluation reserves
in millions of cHf
31. 12. 2011
31. 12. 2010
balance at the beginning of the year
Gain / (loss) arising on changes in fair value of financial instruments:
Interest rate swaps entered for as cash flow hedges
Income tax related to gains / losses on changes in fair value of interest rate swaps
Balance at the end of the year
(1.9)
1.1
(0.1)
(0.9)
–
(2.2)
0.3
(1.9)
the cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in
fair value of hedging instruments entered into for cash flow hedges. the cumulative gain or loss arising on changes
in fair value of the hedging instruments that are recognized and accumulated under the heading of cash flow hedging
reserve will be reclassified to the income statement only when the hedged transaction affects the income statement,
or included as a basis adjustment to the non-financial hedged item, consistent with the relevant accounting policy.
there were no gains or losses arising on changes in fair value of hedging instruments reclassified from equity
into income statement during the year.
29.2.2 translation reserves
in millions of cHf
31. 12. 2011
31. 12. 2010
balance at the beginning of the year
exchange differences arising on translating the foreign operations
loss on hedging instruments designated in hedges of the net assets of foreign operations
Income tax related to loss on hedge of the net assets of foreign operations
Balance at the end of the year
(199.0)
95.2
(82.7)
9.9
(176.6)
(87.2)
(126.4)
20.9
(6.3)
(199.0)
exchange differences arising on the translation of the results and net assets of the Group’s foreign operations
from their functional currencies to the Group’s presentation currency (i.e. Chf) are recognized directly in other
comprehensive income and accumulated in the translation reserves. exchange differences previously accumulated
in the translation reserves (in respect of translating the net assets of foreign operations) are reclassified to the
income statement on the disposal of the foreign operation.
foreign exchange gains and losses on financing instruments that are designated as hedging instruments for net
investments in foreign operations are included in the translation reserves.
29.2.3 retained earnings
in millions of cHf
31. 12. 2011
31. 12. 2010
balance at the beginning of the year
net earnings attributable to equity holders of the parent
Distribution of treasury shares
Share-base payment
tax effect on equity transactions
transactions with non-controlling interests
reclassification from share premium
Balance at the end of the year
(105.8)
111.9
(27.7)
9.6
1.3
–
2.3
(8.4)
292.4
116.6
(18.0)
12.0
4.4
(513.2)
–
(105.8)
on May 11, 2011, the ordinary General Assembly has approved not to distribute dividends for 2011 (same as for 2010).
Dufry AnnuAl report 2011
131
30. Share-based payment
restricted Stock unit plan (rSu)
Dufry has implemented specific restricted stock unit (“rSu”) plans for certain members of the Group management.
these rSu Awards are from economic point of view stock options with an exercise price of nil. each rSu represents
the right to receive one share if the vesting conditions are met.
30.1 rsu plans of Dufry aG
on january 1, 2010, the participants of Dufry’s rSu plan were granted the right to receive on january 1, 2011, free
of charge, up to 291,102 rSu’s on aggregate, based on the price of Chf 68.76 per share (“the rSu Awards 2010”).
under this rSu Awards 2010 281,362 rSus vested on january 1, 2011 as the average price of the Company’s shares
on the SIX for the ten previous trading days reached Chf 125.80 and consequently the market condition was met.
All restrictions on the rSu Award 2010 lapsed on january 1, 2011, and the rSu Awards 2010 were converted into
shares of the Company and given to the rSu plan participants free of restrictions.
the 86 participants of Dufry’s rSu award 2011 have been granted the right to receive on january 1, 2013, free of
charge, 349,200 rSu’s on aggregate, based on the market value of the Company’s shares on the Swiss Stock
exchange (SIX) on December 14, 2011 (i.e. Chf 85.65 per share) (“the rSu Awards 2011”). the rSu Awards 2011
contain two vesting conditions to be met:
a) the participants must be employed by the Company from january 1, 2011 until january 1, 2013 and
b) the average price of the Company’s shares on the SIX for the ten previous trading days to january 1, 2013 must
be at least 1% higher than at grant date.
the fair value of the rSu Awards 2011 has been estimated at the grant date using a binominal pricing model, taking
into account the terms and conditions (risk free interest rate of 0.7% and a volatility of 42%) upon which the awards
were granted. the contractual life of the awards 2011 is two years. the expected volatility reflects assumptions,
that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.
there are no cash settlement alternatives. In 2011, the accrued cost based on a fair value of Chf 55.11 per rSu
(2010: Chf 41.26 per rSu) is Chf 9.6 million (2010: Chf 12.0 million) and has been recorded in the income state-
ment against a reserve in equity.
30.2 treasury shares
At the beginning of 2011 Dufry hold 289,059 treasury shares with a book value of Chf 28.7 million (2010: 269,134 shares
at Chf 18.2 million). During the period the Company distributed to rSu holders 281,362 shares with a value of
Chf 27.7 million (2010: 266,810 shares with a value of Chf 18.0 million) and purchased 100,419 shares to
Chf 12.5 million (2010: 286,735 to Chf 28.5 million). At the end of the year Dufry hold 108,116 treasury shares with
a book value of Chf 13.5 million.
132
Dufry AnnuAl report 2011
31. breakdown of transactions with non-controlling interests
31.1 changes in participations of non-controlling interests
recognized in equity attributable to non-controlling interests:
in millions of cHf
founding of Shanghai huaihai Dufry trading Co. ltd with 50% non-controlling interest
Increase in the non-controlling interests of several subsidiaries of the hudson Group
Merger with Dufry South America limited
Acquisition of 49% interest in the Global retail Services Group
other
total
31.2 equity reserve for transactions with non-controlling interests
recognized in equity attributable to holders of the parent:
in millions of cHf
balance at the beginning of the year
Changes from transactions with non-controlling interests:
Merger with Dufry South America ltd
Acquisition of 49% interest in the Global retail Services Group
other
Balance at the end of the year
32. financial debt
in millions of cHf
bank debt
loans
financial debt, short-term
bank debt
loans
financial debt, long-term
total
of which are:
bank debt
loans payable
2011
0.7
1.7
–
–
(0.4)
2.0
2011
(513.2)
–
–
–
(513.2)
2010
–
5.6
(117.6)
(1.6)
(1.9)
(115.5)
2010
–
(511.8)
(1.2)
(0.2)
(513.2)
31. 12. 2011
31. 12. 2010
28.5
2.1
30.6
1,525.5
4.3
1,529.8
1,560.4
1,554.0
6.4
34.3
1.0
35.3
678.8
4.3
683.1
718.4
713.1
5.3
During q3 2011, Dufry acquired several companies in South and Central America and Armenia and financed these
transactions with an additional syndicated credit facility of Chf 763.7 million (uSD 1,000.0 million).
bank debt:
in millions of cHf
loans denominated in:
uS Dollar
Swiss franc
euro
other currencies
subtotal
Deferred bank arrangement fees
total
Dufry AnnuAl report 2011
133
31. 12. 2011
31. 12. 2010
1,475.6
30.4
56.7
12.2
1,574.9
(20.9)
1,554.0
456.5
172.5
88.6
11.9
729.5
(16.4)
713.1
the Group centrally negotiates and manages its key credit facilities. Minor credit lines at local level are kept for
practical reasons.
At December 31, 2011 the Group’s main credit facilities amounted to Chf 602.8 million and uSD 1,435.0 million
(2010: Chf 687 million and uSD 435 million).
the main credit facilities are granted by two bank syndicates with the london branch of InG n.v. acting as agent
for both bank syndicates.
the facilities consist of three term loans and one revolving credit facility.
– the first term loan includes an amortization schedule and was reduced by Chf 87.9 million during 2011
(Chf 82.3 million in 2010) in accordance with the credit agreement. the term loan is scheduled to be fully repaid
in August 2013.
– the second term loan as well as the revolving credit facility is structured with a bullet repayment at the expiry
of the contract in August 2013.
– finally the new term loan entered into in August 2011 includes an amortization schedule with repayments
scheduled between August 2014 and August 2016.
During 2010 and 2011, Dufry complied with the financial covenants and conditions contained in the bank credit
agreements. the agreements contain covenants and conditions customary to this type of financing.
the borrowings under these credit facilities bear interest at a floating rate (eurIbor or lIbor) plus spread. At
December 31, 2011 the overall weighted average interest rate was 2.5% (2010: 2.0%), consisting of uSD borrowings
at 2.5% (2010: 2.0%), eur borrowings at 3.2% (2010: there was no draw down in eur) and Chf borrowings at 1.9%
(2010: 1.7%).
In addition the operations in the Caribbean (Duty free Caribbean ltd, emeralds Distributors ltd, young Caribbean
jewelers Distributors ltd and CeI barbados ltd) maintain credit facilities from the first Caribbean International
bank for an amount of uSD 23.3 million (2010: uSD 14.8 million) which are guaranteed with their respective fixed
and floating assets.
134
Dufry AnnuAl report 2011
hedge of net investments in foreign operations
At December 31, 2011 an amount of uSD 707.3 million (December 31, 2010: uSD 243.0 million) included in the
financial debt has been designated as hedge in net investment held in Dufry do brasil, Alliance Inc., Interbaires
SA, navinten SA, blaicor SA, International operation & Services Corp. and Duty free ecuador SA.
Additionally, Dufry granted the following long-term loans to subsidiaries, which have been designated as hedge
in net investment:
in millions
Subsidiary:
Dufry America holding Inc. (uSD)
Dufry Mexico SA de Cv
Dufry hispanosuiza Sl
currency
31. 12. 2011
31. 12. 2010
uSD
uSD
eur
20.4
52.5
5.1
21.5
–
–
the Group uses the above hedges to reduce the translation risk.
At December 31, 2011, a loss in the amount of Chf 82.7 million (2010: gain of Chf 20.9 million) was recognized in
other comprehensive income to compensate corresponding movements in the translation reserve.
33. provisions
in millions of cHf
Balance at January 1, 2011
business combinations
Charge for the year
utilized
unused amounts reversed
Currency translation adjustment
Balance at December 31, 2011
thereof:
current
non-current
Balance at January 1, 2010
Charge for the year
utilized
unused amounts reversed
Currency translation adjustment
Balance at December 31, 2010
thereof:
current
non-current
continGent
liaBilities
law suits
anD Duties
Dispute on
contracts
laBor
Disputes
otHer
total
–
30.0
–
–
–
6.7
36.7
–
36.7
–
–
–
–
–
–
–
–
1.8
–
3.2
–
–
(0.1)
4.9
4.9
–
1.8
0.3
–
–
(0.3)
1.8
1.8
–
0.4
–
–
(0.4)
–
–
–
–
–
–
0.4
–
–
–
0.4
0.4
–
3.2
0.1
0.1
(0.3)
(0.1)
–
3.0
0.2
2.8
3.5
0.2
(0.2)
–
(0.3)
3.2
0.1
3.1
0.1
1.4
2.8
(0.1)
(2.7)
0.5
2.0
2.0
–
0.3
0.1
(0.2)
–
(0.1)
0.1
0.1
–
5.5
31.5
6.1
(0.8)
(2.8)
7.1
46.6
7.1
39.5
5.6
1.0
(0.4)
–
(0.7)
5.5
2.4
3.1
Dufry AnnuAl report 2011
135
Management believes that its total provisions are adequate based upon currently available information. however,
given the inherent difficulties in estimating liabilities in the below described areas, it cannot be guaranteed that
additional or lesser costs will be incurred above or below the amounts provisioned.
Contingent liabilities
Different contingent liabilities with a fair value of Chf 30 million at the date of acquisition were determined
during the due diligence process made for the acquisition of the companies in South and Central America and
Asia. IfrS 3 business combinations requires to reflect these liabilities with uncertain amount in the statement
of financial position although the risk exposure for some of these positions has been regarded as medium or
low. the identified risks include a variety of potential liabilities from past periods, mainly related to the import
and sale of merchandise by entities under common control or regarding contributions owed based on the
contractual situation of employees. As the identified risks implied in these contingent liabilities is subject to
interpretations and uncertainties in the respective regulations the management made an estimation of the
fair value.
labor disputes
the provision of Chf 3.0 million (2010: Chf 3.2 million) relates mainly to claims presented by sales staff due to
the termination of temporary labor contracts in brazil.
law suits and duties
the Chf 4.9 million (2010: Chf 1.8 million) provision covers uncertainties related to the outcome of several law
suits in relation to taxes, duties or other claims in several countries. In 2011 the increase relates to cases in
brazil, tunisia and Côte d’Ivoire. these claims are subject to arbitration where the final outcome can take
several years. no cases were settled in 2011.
the expected timing of the related cash outflows of non-current provisions as of December 31, 2011 is currently
projected as follows:
in millions of cHf
expecteD casH outflows
2013
2014
2015
2016+
total non-current
0.1
15.0
0.1
24.3
39.5
136
Dufry AnnuAl report 2011
34. post-employment benefit obligations
the employees of Dufry Group are insured against the risk of old age and disablement in accordance with the
local laws and regulations. A description of the significant retirement benefit plans is as follows:
34.1 switzerland
Dufry has a defined benefit pension plan, which is based on the actual salary of the employee, covers substantially
all of Dufry’s employees in Switzerland. the plan requires contributions to be made to a separate legal entity, the
administrative fund. the pension fund is a separate entity from the Dufry Group and does not hold assets related
to the Group.
the following table summarizes the components of pension expenses recognized in the income statement:
net pension costs:
in millions of cHf
Current service costs
past service costs
Interest costs
net actuarial loss recognized in year under §92 ff.
expected return on plan assets
pension expenses
2011
(1.8)
–
(0.9)
(0.1)
1.0
(1.8)
2010
(1.5)
–
(0.7)
–
0.9
(1.3)
the total of the pension expenses of the Group is included in personnel expenses (retirement benefits). the actual
return of plan assets in 2011 was a gain of Chf 0.29 million (2010: Chf 0.71 million).
In 2012, Dufry expects to contribute Chf 2.0 million to this defined benefit pension plan.
the overall expected rate of return on assets is determined based on the market prices prevailing on that date
applicable to the period over which the obligation is to be settled.
the principal assumptions for the actuarial computation are as follows:
in %
Discount rates
expected return on plan assets
future salary increases
future pension increases
Average retirement age (in years)
2011
2.25%
3.00%
1.50%
1.00%
64
2010
2.50%
3.25%
1.50%
1.00%
64
the following table summarizes the components of the funded status and amounts recognized in the consolidated
statement of financial position for the plan:
funded status:
in millions of cHf
fair value of plan assets at beginning of period
expected return
Contributions paid by employer
Contributions paid by employees
benefits paid
expected fair value of plan assets at end of period
Actuarial gains / (losses)
fair value of plan assets at end of period
Defined benefit obligation (pbo) at beginning of period
Current service costs
Contributions paid by employees
Interest costs
benefits paid
expected defined benefit obligation at end of period
Actuarial loss (gain) on obligation
Defined benefit obligation (pBo) at end of period
funded status
unrecognized actuarial loss (gain)
net asset in balance sheet
Dufry AnnuAl report 2011
137
2011
31.7
0.9
2.0
1.2
1.0
36.8
(0.7)
36.1
35.2
1.8
1.2
0.9
1.0
40.1
3.4
43.5
(7.4)
8.3
0.9
2010
22.5
0.9
1.7
1.0
5.8
31.9
(0.2)
31.7
24.2
1.5
1.0
0.7
5.8
33.2
2.0
35.2
(3.5)
4.2
0.7
reconciliation to the consolidated statement of financial position
the movement in the pension liability is recognized in other non-current assets of the consolidated statement of
financial position as follows:
in millions of cHf
net asset at beginning of period
pension expenses
Contributions paid by employer
net asset at end of period
Amounts for the current and previous periods are as follows:
in millions of cHf
Defined benefit obligation (pbo)
plan assets
(Deficit) surplus
experience adjustments on plan liabilities
effect of changes in actuarial assumptions
on plan liabilities
experience adjustments on plan assets
2011
43.5
36.1
(7.4)
1.3
2.1
(0.7)
2010
35.2
31.7
(3.5)
(1.6)
(3.5)
(0.2)
2009
24.2
22.5
(1.7)
(0.1)
–
1.4
2011
0.7
(1.8)
2.0
0.9
2008
22.2
19.1
(3.1)
(0.1)
1.9
(2.7)
2010
0.3
(1.3)
1.7
0.7
2007
18.3
19.2
0.9
0.2
0.8
(0.5)
138
Dufry AnnuAl report 2011
the major categories of plan assets as percentages of the fair value of the total plan assets are as follows:
in %
Shares
bonds
rented properties
other
total
2011
24%
44%
26%
6%
2010
25%
44%
25%
6%
2009
24%
46%
26%
4%
2008
19%
50%
26%
5%
2007
27%
45%
23%
5%
100%
100%
100%
100%
100%
34.2 italy and other countries
post-employment benefit obligations:
in millions of cHf
Italy
other countries
total
31. 12. 2011
31. 12. 2010
4.6
1.4
6.0
5.2
1.2
6.4
In Italy, an unfunded defined benefit plan exists. the pension contributions owed by the employer are based on the
number of years the respective employee worked with the respective Italian subsidiary. the principal assumptions
for actuarial computation are as follows:
in %
Discount rate
expected salary increase
Inflation rate
35. other liabilities
in millions of cHf
Concession fee payables
personnel payables
other service related vendors
Sales tax and other taxes
payables for capital expenditure (see note 20 / 22)
Interest payables
payables for acquisitions
payables to local business partners
Accrued liabilities
financial derivative liabilities
other payables
total
thereof :
non-current liabilities
current liabilities
total
31. 12. 2011
31. 12. 2010
4.5%
3.0%
2.0%
4.5%
3.0%
2.0%
31. 12. 2011
31. 12. 2010
71.5
62.0
54.3
23.3
23.3
11.2
5.4
5.2
4.2
1.8
4.7
266.9
11.3
255.6
266.9
67.2
50.7
34.5
14.6
26.8
4.2
8.5
6.2
7.1
2.3
10.1
232.2
9.6
222.6
232.2
Dufry AnnuAl report 2011
139
other current liabilities comprise of current or renewable liabilities due within one year.
36. related parties and related party transactions
A party is related to the Group if the party directly or indirectly controls, is controlled by, or is under common
control with Dufry, has an interest in the Group that gives it significant influence over the Group, has joint control
over the Group or is an associate or a joint venture of the Group. In addition, members of the key management
personnel of Dufry or close members of the family are also considered related parties as well as post-employment
benefit plans for the benefit of employees of the Group. transactions with related parties are conducted on an
at-arm’s-length basis.
the related party transactions and relationships for the Dufry Group are the following:
Dufry Group purchased during 2011, goods from the following related parties: hudson Wholesale for Chf 23.2 mil-
lion (2010: Chf 37.4 million), from hudson rpM Chf 4.6 million (2010: Chf 5.4 million) and finished his relationship
with MDI (2010: Chf 2.2 million). the purchase prices used in these transactions were at arm’s length. At Decem-
ber 31, 2011, the Dufry Group had open invoices with the following related parties: hudson Wholesale Chf 2.4 million
(2010: Chf 2.2 million) and with hudson rpM Chf 0.5 million (2010: Chf 0.5 million).
latin American Airport holding ltd is the holding company of Inmobiliaria fumisa SA de Cv (“fumisa”) and
Aeropuertos Dominicanos Siglo XXI, SA (“Aerodom”). three members of the Group’s board of Directors are also
members of the board of Directors of latin American Airport holding ltd. Advent International Corporation
manage funds that control among others, the Group, fumisa and Aerodom.
In 2011, the Company operates shops at the international airport in Mexico City under concession agreement with
fumisa. During 2011 fumisa charged Chf 16.2 million (2010: Chf 22.5 million) to the Company in concept of rent,
and Dufry has advanced to fumisa Chf 4.2 million (2010: Chf 4.2 million) as prepaid rent.
Inversiones tunc SA operates shops at several airports in the Dominican republic under concession agreements
with Aerodom. According to these agreements, Inversiones tunc SA compensated through monthly rental fees
the right to use the commercial areas leased to them by Aerodom. In 2011, the total sales based rent for Inversiones
tunc SA amounted to Chf 5.1 million (2010: Chf 4.5 million).
on january 15, 2010 transportes Aereos de Xalapa SA de Cv, a subsidiary of Aerodom agreed to provide during
two years air transport services to Dufry for at least uSD 2.1 million per year. During 2011 Dufry received services
for Chf 2.6 million (2010: Chf 1.9 million).
on june 14, 2011 Dufry International AG purchased back the usufruct right granted to Gestione Spazi Attrezzati
Srl (GSA) which permitted the benefits of share ownership, including the receipt of dividends on 10% of the
shares of Dufry Shop finance Srl, which otherwise would have expired in May 4, 2041 for eur 4.5 million. After
this transaction GSA keeps the usufruct right acquired in 2002, on 6% of the shares of Dufrital SpA, which are
held by Dufry Shop finance Srl. upon expiration of these rights in May-41 GSA shall be entitled to receive 6% of
the undistributed retained earnings of Dufrital SpA. GSA is a company controlled by Mr. Dante Marro, Chief
operating officer of region europe and member of the Group executive Committee of the Company. In 2011, no
charge (2010: Chf 0.5 million) was recognized as usufruct in the income statement.
Mr. josé González, Chief operating officer of region Central America & Caribbean and member of the Group
executive Committee, owns 26.3% of the share capital of the subsidiary puerto libre International SA
(“plISA”). plISA operates duty free shops at the international airport of Managua as well as three border
shops in nicaragua.
140
Dufry AnnuAl report 2011
In 2011 the remuneration for the board members was Chf 1.4 million (2010: Chf 0.9 million). In addition Mr.
Xavier bouton (member) received Chf 0.3 million (2010: Chf 0.3 million) for strategic consulting services provided
to the Group.
In 2011 the total compensation to members of the Group executive Committee recognized in personnel expenses
and including all short-term employee benefits was Chf 15.7 million (2010: Chf 14.6 million). this amount includes:
a) 181,541 stock options (rSu’s) of the biannual award 2011 (2010: 142,750 rSu’s of the annual award 2010) of Dufry AG,
b) a cash compensation of Chf 8.8 million (2010: Chf 7.3 million), c) employer’s contribution to the pension and
other post-employment benefits of Chf 2.0 million (2010: Chf 1.5 million). the expenses accrued in relation to
the restricted stock unit plan 2011 (biannual) was Chf 5.0 million (2010: Chf 5.9 million) and is included in the
short-term employee benefits mentioned above.
the legally required disclosure of the participations and compensations of the members of the board of Directors
and key management of Dufry are explained in the respective notes to the stand alone financial statements of
Dufry AG.
37. Commitments and Contigencies
Guarantee commitments
the Group enters into long-term agreements with airport authorities, seaport authorities and other landlords.
the concessionaires use to require a minimum annual guarantee, which can be based on sales, number of
passengers or other indicators of operational activity to guarantee the performance of Dufry’s obligations. In
case of an early termination, the operation can be required to compensate the concessionaire for lost earnings.
the Group or their subsidiaries have granted these guaranties regarding the performance of the above mentioned
long-term contracts directly or through third parties. As per December 31, 2011 and December 31, 2010, no request
for fulfillment of such contingent liabilities was pending.
Some of these long-term concession agreements Dufry has entered into include clauses to prevent the early
termination, such as obligations to fulfill guaranteed minimal payments during the full term of the agreement.
the conditions for an onerous contract will be met, when such operation presents a non-profitable outlook. In this
event a provision based on the present value of the future net cash flows needs to be created. At the reporting date
of 2011 and 2010 no such onerous concession exists.
Contingent liabilities
the group has recognized a provision for a contingent liability of Chf 36.7 million as of December 31, 2011 in the
course of the acquisition of the companies in South and Central America and Asia. refer to note 6 business com-
binations for additional information.
Dufry AnnuAl report 2011
141
38. financial instruments
38.1 capital risk management
Capital comprises equity attributable to the equity holders of the parent less hedging and revaluation reserves for
unrealized gain on net investment plus other equity-linked or equity-like instruments attributable to the parent.
the primary objective of the Group’s capital management is to ensure that it maintains an adequate credit rating
and sustainable capital ratios in order to support its business and maximize shareholder value.
the Group manages its capital structure and makes adjustments to it in light of its strategy and the long-term
opportunities and costs of each capital source. to maintain or adjust the capital structure, the Group evaluates to
adjust dividend payments to shareholders; return capital to shareholders, issue new shares, issue equity-linked
instruments or equity-like instruments.
no changes were made in the objectives, policies or processes during 2011 or 2010.
the Group monitors capital using a combination of ratios; including a gearing ratio, cash flow considerations and
profitability ratios. As for the gearing the Group includes within net debt, interest bearing loans and borrowings,
less cash and cash equivalents, excluding discontinued operations. Capital includes ordinary shares, equity
attributable to the equity holders of the parent less hedge reserve for unrealized gain on net investment and other
equity-linked or equity-like instruments.
38.1.1 Gearing ratio
the following ratio compares owner’s equity to borrowed funds:
in millions of cHf
Cash and cash equivalents
financial debt, short-term
financial debt, long-term
net debt
equity attributable to equity holders of the parent
translation reserve, hedging and revaluation reserves1
total capital
Gearing ratio
31. 12. 2011
31. 12. 2010
(199.1)
30.6
1,529.8
1,361.3
870.0
(26.5)
843.5
61.7%
(80.6)
35.3
683.1
637.8
733.7
(98.2)
635.5
50.1%
1 this position is included in the translation reserves (Chf 27.4 million) as well as in the hedging and revaluation reserves (–Chf 0.9 million) in the statement of changes in equity
the Group did not hold collateral of any sort at the reporting date.
Significant accounting policies:
Details of the significant accounting policies and methods adopted (including the criteria for recognition, the bases
of measurement, and the bases for recognition of income and expenses) for each class of financial asset, financial
liability and equity instrument are disclosed in note 2.
142
Dufry AnnuAl report 2011
38.2 categories of financial instruments
At December 31, 2011
financial assets
loans and
receivables
at fvtpl1
Held-to-
maturity
investments
in millions of cHf
Cash and cash equivalents
trade and credit card receivables
other accounts receivable
other non-current assets
total
in millions of cHf
trade payables
financial debt, short-term
other liabilities
financial debt, long-term
other non-current liabilities
total
At December 31, 2010
in millions of cHf
Cash and cash equivalents
trade and credit card receivables
other accounts receivable
other non-current assets
total
in millions of cHf
trade payables
financial debt, short-term
other liabilities
financial debt, long-term
other non-current liabilities
total
–
–
0.4
–
0.4
–
–
–
–
–
subtotal
199.1
47.0
52.4
33.3
331.8
financial liaBilities
at fvtoci 2
at fvtpl1
subtotal
–
–
1.0
–
–
1.0
–
–
0.8
–
–
301.1
30.6
227.5
1,529.9
11.3
0.8
2,100.4
financial assets
–
–
0.4
–
0.4
–
–
–
–
–
subtotal
80.6
50.8
40.4
36.2
208.0
financial liaBilities
at fvtoci 2
at fvtpl1
subtotal
–
–
2.2
–
–
2.2
–
–
0.1
–
–
203.9
35.3
200.9
683.1
9.4
0.1
1,132.6
199.1
47.0
52.0
33.3
331.4
at
amortized
cost
301.1
30.6
225.7
1,529.9
11.3
2,098.6
80.6
50.8
40.0
36.2
207.6
at
amortized
cost
203.9
35.3
198.6
683.1
9.4
1,130.3
loans and
receivables
at fvtpl1
Held-to-
maturity
investments
non-
financial
assets2
–
–
74.9
4.5
non-
financial
liaBilities 3
–
–
28.1
(0.1)
–
non-
financial
assets2
–
–
64.5
2.2
non-
financial
liaBilities 3
–
–
21.7
–
0.2
total
199.1
47.0
127.3
37.8
total
301.1
30.6
255.6
1,529.8
11.3
total
80.6
50.8
104.9
38.4
total
203.9
35.3
222.6
683.1
9.6
1 financial assets and liabilities at fair value through income statement;
2 financial liabilities at fair value through other comprehensive income
3 non-financial assets and liabilities comprise prepaid expenses and deferred income, which will not generate a cash outflow or inflow as well as sales tax and
other tax positions
Dufry AnnuAl report 2011
143
total
4.1
–
4.1
0.4
163.9
(3.7)
160.6
164.7
loans anD
receivaBles
at fvtpl
HelD-to-
maturity
investments
–
–
–
0.4
–
–
0.4
0.4
–
–
–
–
–
–
–
4.1
–
4.1
–
163.9
(3.7)
160.2
164.3
at
amortizeD
costs
(49.3)
(5.9)
(55.2)
–
(161.8)
–
(161.8)
(217.0)
at fvtoci
at fvtpl
total
–
–
–
–
–
–
–
–
–
–
–
(0.8)
–
–
(0.8)
(0.8)
financial
assets
financial
liaBilities
4.1
–
4.1
0.4
163.9
(3.7)
160.6
164.7
(49.3)
(5.9)
(55.2)
(0.8)
(161.8)
–
(162.6)
(217.8)
(49.3)
(5.9)
(55.2)
(0.8)
(161.8)
–
(162.6)
(217.8)
net
(45.2)
(5.9)
(51.1)
(0.4)
2.1
(3.7)
(2.0)
(53.1)
38.2.1 net income by IAS 39 valuation category
financial Assets at December 31, 2011
in millions of cHf
Interest income (expenses)
other finance income (expenses)
from interest
fair values gain (loss)
foreign exchange gain (loss) 1
Impairments / allowances 2
total – from subsequent valuation
net income
financial liabilities at December 31, 2011
in millions of cHf
Interest income (expenses)
other finance income (expenses)
from interest
fair values gain (loss)
foreign exchange gain (loss) 1
Impairments / allowances 2
total – from subsequent valuation
net income
net financial assets and liabilities at December 31, 2011
in millions of cHf
Interest income (expenses)
other finance income (expenses)
from interest
fair values gain (loss)
foreign exchange gain (loss) 1
Impairments / allowances 2
total – from subsequent valuation
net income
1 this position includes the foreign exchange gain (loss) recognized on third party and intercompany financial assets liabilities through income statement
2 this position includes the income from the release of impairments and allowances and recoveries during the period less the increase of impairments
and allowances and write-offs
144
Dufry AnnuAl report 2011
financial Assets at December 31, 2010
in millions of cHf
Interest income (expenses)
other finance income (expenses)
from interest
fair values gain (loss)
foreign exchange gain (loss) 1
Impairments / allowances 2
total – from subsequent valuation
net income
financial liabilities at December 31, 2010
in millions of cHf
Interest income (expenses)
other finance income (expenses)
from interest
fair values gain (loss)
foreign exchange gain (loss) 1
Impairments / allowances 2
total – from subsequent valuation
net income
net financial assets and liabilities at December 31, 2010
in millions of cHf
Interest income (expenses)
other finance income (expenses)
from interest
fair values gain (loss)
foreign exchange gain (loss) 1
Impairments / allowances 2
total – from subsequent valuation
net income
loans anD
receivaBles
at fvtpl
HelD-to-
maturity
investments
–
–
–
0.4
–
–
0.4
0.4
–
–
–
–
–
–
–
total
4.3
0.5
4.8
0.4
(67.5)
(1.9)
(69.0)
(64.2)
4.3
0.5
4.8
–
(67.5)
(1.9)
(69.4)
(64.6)
at
amortizeD
costs
(36.4)
(0.5)
(36.9)
–
67.5
–
67.5
30.6
at fvtoci
at fvtpl
total
–
–
–
–
–
–
–
–
–
–
–
(0.1)
–
–
(0.1)
(0.1)
financial
assets
financial
liaBilities
4.3
0.5
4.8
0.4
(67.5)
(1.9)
(69.0)
(64.2)
(36.4)
(0.5)
(36.9)
(0.1)
67.5
–
67.4
30.5
(36.4)
(0.5)
(36.9)
(0.1)
67.5
–
67.4
30.5
net
(32.1)
–
(32.1)
0.3
–
(1.9)
(1.6)
(33.7)
1 this position includes the foreign exchange gain (loss) recognized on third party and intercompany financial assets liabilities through income statement
2 this position includes the income from the release of impairments and allowances and recoveries during the period less the increase of impairments
and allowances and write-offs
Dufry AnnuAl report 2011
145
38.3 financial risk management objectives
As a global player, Dufry has worldwide activities which need to be financed in different currencies and are conse-
quently affected by fluctuations of foreign exchange and interest rates. the Group treasury manages the financing
of the operations through centralized credit facilities as to ensure an adequate allocation of these resources and
simultaneously minimize the potential financial risk impacts.
Dufry continuously monitors the market risk, such as foreign currency risk, interest rate risk, credit risk, liquidity
risk and capital risk. the Group seeks to minimize the currency exposure and interest rates risk using appropriate
transaction structures or alternatively, using derivative financial instruments to hedge the exposure to these risks.
the treasury policy forbids to enter or trade financial instruments for speculative purposes.
38.4 market risk
Dufry’s financial assets and liabilities are mainly exposed to market risk in foreign currency exchange and interest
rates. the Group’s objective is to minimize the income statement impact and to reduce fluctuations in cash flows
through structuring the respective transactions to minimize market risks. In cases, where the associated risk
cannot be hedged appropriately through a transaction structure and the evaluation of market risks indicates a
material exposure, the Group may use financial instruments to hedge the respective exposure.
the Group may enter into a variety of financial instruments to manage its exposure to foreign currency risk,
including forward foreign exchange contracts, currency swaps and over the counter plain vanilla options.
During the current financial year the Group utilized interest rate swaps and foreign currency forward contracts
for hedging purposes.
38.5 interest rate risk management
the following table shows the contracts or underlying principal amounts and fair values of derivative financial
instruments. Contracts or underlying principal amounts indicate the volume of business outstanding at the balance
sheet date. the fair values are determined by reference to market prices or standard pricing models that used
observable market inputs at December 31, 2011.
At December 31, 2011
in millions of cHf
contract or unDerlyinG
principal amount
positive
fair values
neGative
fair values
foreign exchange forward contracts and options
Interest rate related instruments 1
67.5
280.6
total
At December 31, 2010
0.5
–
0.5
0.8
1.0
1.8
in millions of cHf
contract or unDerlyinG
principal amount
positive
fair values
neGative
fair values
foreign exchange forward contracts and options
Interest rate related instruments 1
12.2
280.6
total
0.4
–
0.4
0.1
2.2
2.3
1 these instruments are designated as cash flow hedges. the changes in fair value are recognized through other comprehensive income.
146
Dufry AnnuAl report 2011
38.6 foreign currency risk management
Dufry manages the cash flow surplus or deficits in foreign currency of the operations through fX-transactions in
the respective local currency. Major imbalances in foreign currencies at Group level are hedged through foreign
exchange forwards contracts. the terms of the foreign currency forward contracts have been negotiated to match
the terms of the forecasted transactions.
38.6.1 foreign currency sensitivity analysis
Among various methodologies to analyze and manage risk, Dufry utilizes a system based on sensitivity analyses.
this tool enables Group treasury to identify the level of risk of each entity. Sensitivity analysis provides an ap-
proximate quantification of the exposure in the event that certain specified parameters were to be met under a
specific set of assumptions.
foreign currency exposure at December 31, 2011:
in millions of cHf
Monetary assets
Monetary liabilities
net exposure before hedging
hedging
net exposure after hedging
usD
euro
Brl
otHer
total
983.5
1,591.3
(607.8)
634.4
26.6
121.7
143.7
(22.0)
(5.1)
(27.1)
15.7
53.5
(37.8)
–
(37.8)
43.1
65.2
(22.1)
–
(22.1)
1,164.0
1,853.7
(689.7)
629.3
(60.4)
foreign currency exposure at December 31, 2010:
in millions of cHf
Monetary assets
Monetary liabilities
net exposure before hedging
hedging
net exposure after hedging
usD
euro
Brl
otHer
total
494.2
683.9
(189.7)
222.1
32.4
115.0
142.8
(27.8)
–
(27.8)
38.2
43.8
(5.6)
–
(5.6)
39.9
17.8
22.1
–
22.1
687.3
888.3
(201.0)
222.1
21.1
the sensitivity analysis includes all monetary assets and liabilities irrespective of whether the positions are third
party or intercompany. Dufry has considered some intercompany long-term loans, which are not likely to be settled
in the foreseeable future as being part of the net investment in such subsidiary. Consequently, the related exchange
differences are recognized in other comprehensive income and presented within translation reserve in equity.
the foreign exchange rate sensitivity is calculated by aggregation of the net foreign exchange rate exposure of
the Group entities. the values and risk disclosed here are the hedged and not hedged positions assuming a 5%
appreciation of the Chf against all other currencies.
A positive result indicates a profit in the income statement or in the hedging and revaluation reserves when the
Chf strengthens against the relevant currency.
in millions of cHf
31. 12. 2011
31. 12. 2010
net earnings – profit (loss) of uSD
other comprehensive income – profit (loss) of uSD
net earnings – profit (loss) of euro
other comprehensive income – profit (loss) of eur
0.5
29.8
1.4
(0.3)
(5.2)
14.7
1.4
–
Dufry AnnuAl report 2011
147
reconciliation to categories of financial instruments:
in millions of cHf
fInAnCIAl ASSetS
total financial assets held in foreign currencies (see above)
less intercompany financial assets in foreign currencies
third party financial assets held in foreign currencies
third party financial assets held in reporting currencies
total third party financial assets 1
fInAnCIAl lIAbIlItIeS
total financial liabilities held in foreign currencies (see above)
less intercompany financial liabilities in foreign currencies
third party financial liabilities held in foreign currencies
third party financial liabilities held in reporting currencies
total third party financial liabilities 1
1 see note 38.2 “categories of financial instruments”
31. 12. 2011
31. 12. 2010
1,164.0
(1,097.0)
67.0
264.8
331.8
1,853.7
(113.0)
1,740.7
359.7
2,100.4
687.3
(626.6)
60.7
147.3
208.0
888.3
(115.2)
773.1
359.5
1,132.6
38.6.2 forward foreign exchange contracts at fair value
As the management of the company actively pursues to naturally hedge the positions of each operation, the policy
of the Group is to enter into forward foreign exchange contracts only where needed.
As at December, 2011 the Group had open contracts with a notional value of Chf 67.5 million (2010: Chf 12.2 million).
the loss of Chf 0.3 million (2010: Chf 0.3 million) resulting from the subsequent valuation at fair values is included
as foreign exchange gain / (loss) in the income statement to compensate corresponding foreign exchange positions
in the opposite direction.
38.7 interest rate risk management
the Group manages the interest rate risk through interest rate swaps and options to the extent that the hedging
cannot be implemented through managing the duration of the debt drawings. the levels of the hedging activities
are evaluated regularly and may be adjusted in order to reflect the development of the various parameters.
38.7.1 Interest rate sensitivity analysis
the sensitivity analyses below have been determined based on the exposure to interest rates derivatives and
non-derivative instruments at the reporting date. the risk analysis provided here assumes a simultaneous increase
of 100 basis points of the interest rate of all interest bearing financial positions.
If interest rates had been 100 basis points higher whereas all other variables were held constant, the Group’s net
earnings for the year 2011 would decrease by Chf 7.4 million (2010: decrease by Chf 6.5 million).
38.7.2 Interest rate swap contracts
under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate
interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate
the risk of changing interest rates on the fair value of issued fixed rate debt and the cash flow exposures on the
issued variable rate debt. the fair value of interest rate swaps at the end of the reporting period is determined by
discounting the future cash flows using the interest rate curves at the end of the reporting period and the credit
risk inherent in the contract, and is disclosed below. the average interest rate is based on the outstanding balances
at the end of the reporting period.
148
Dufry AnnuAl report 2011
During the second quarter of 2010 the Group entered into a payer swap agreement with a notional value of uSD
300 million which was designated as a cash flow hedge. the net loss of Chf 1.0 million per December 31, 2011
(2010: Chf 2.2 million) resulting from the subsequent valuation at fair value was recorded in other comprehensive
income and does not affect the income statement.
the following tables detail the notional principal amounts and remaining terms of interest rate swap contracts
outstanding at the end of the reporting period.
At December 31, 2011
in millions of cHf
less than 1 year
1 to 2 years
total
At December 31, 2010
in millions of cHf
less than 1 year
1 to 2 years
total
averaGe contracteD fixeD
interest rate
notional
principal value
fair value assets
(liaBilities)
0.9982%
–
280.6
–
280.6
1.0
–
1.0
averaGe contracteD fixeD
interest rate
notional
principal value
fair value assets
(liaBilities)
–
0.9982%
–
280.6
280.6
–
2.2
2.2
the interest rate swaps settle on a monthly basis. the floating rate on the interest rate swaps is the one month
uSD lIbor rate. the Group will settle the difference between the fixed and floating interest rate on a net basis.
All interest rate swap contracts exchanging floating rate interest amounts for fixed rate interest amounts are
designated as cash flow hedges in order to reduce the Group’s cash flow exposure resulting from variable interest
rates on borrowings. the interest rate swaps and the interest payments on the loan occur simultaneously and the
amount accumulated in equity is reclassified to the income statement over the period that the floating rate interest
payments on debt affect the income statement.
38.7.3 Allocation of financial assets and liabilities to interest classes
At December 31, 2011
Cash and cash equivalents
trade and credit card receivables
other accounts receivable
other non-current assets
financial assets
trade payables
financial debt, short-term
other liabilities
financial debt, long-term
other non-current liabilities
financial liabilities
net financial liability
in %
average
variable
interest rate
average
fixed
interest rate
variable
interest rate
fixed
interest rate
total interest
bearing
non-interest
bearing
1.1%
2.6%
139.6
0.1%
11.7%
4.5%
2.0%
–
(0.1)
3.4
142.9
–
27.9
0.1
2.2
–
0.1
1.7
4.0
–
2.7
–
in millions of cHf
141.8
–
–
5.1
57.3
47.0
52.4
28.2
total
199.1
47.0
52.4
33.3
146.9
184.9
331.8
–
301.1
30.6
0.1
–
227.4
301.1
30.6
227.5
2.5%
4.2%
1,525.6
4.2
1,529.8
0.1
1,529.9
–
1,553.6
1,410.7
–
6.9
2.9
–
11.3
11.3
1,560.5
539.9
2,100.4
1,413.6
355.0
1,768.6
Dufry AnnuAl report 2011
149
in millions of cHf
in %
average
variable
interest rate
average
fixed
interest rate
variable
interest rate
fixed
interest rate
total interest
bearing
non-interest
bearing
0.7%
2.4%
49.0
0.2%
2.1%
3.0%
5.8%
7.2%
5.0%
6.8%
4.4%
7.3%
–
–
2.2
51.2
–
33.0
–
678.7
–
711.7
660.5
total
80.6
50.8
40.4
36.2
203.9
35.3
200.9
683.1
9.4
3.2
–
0.8
6.4
52.2
–
0.8
8.6
28.4
50.8
39.6
27.6
10.4
61.6
146.4
208.0
–
2.3
3.3
4.4
6.1
16.1
5.7
–
203.9
–
197.6
–
3.3
35.3
3.3
683.1
6.1
727.8
666.2
404.8
1,132.6
258.4
924.6
At December 31, 2010
Cash and cash equivalents
trade and credit card receivables
other accounts receivable
other non-current assets
financial assets
trade payables
financial debt, short-term
other liabilities
financial debt, long-term
other non-current liabilities
financial liabilities
net financial liabilities
38.8 credit risk management
Credit risk refers to the risk that counterparty may default on its contractual obligations resulting in financial loss
to the Group.
Almost all Groups’ sales are retail sales made against cash or internationally recognized credit/debit cards.
Dufry has policies in place to ensure that other sales are only made to customers with an appropriate credit history
or that the credit risk is insured adequately. the remaining credit risk is in relation to subtenants of concessions
or holders of minority interests.
the credit risk on liquid funds and derivative financial instruments relates to financial institutions with high credit-
ratings. the Group does not expect defaults from non-performance of these counterparties.
38.8.1 Maximum credit risk
the carrying amount of financial assets recorded in the financial statements, after deduction of any allowances
for losses, represents the Group’s maximum exposure to credit risk.
150
Dufry AnnuAl report 2011
38.9 liquidity risk management
the group evaluates this risk as the ability to settle its financial liabilities on time and at a reasonable price. beside
its capability to generate cash through its operations, Dufry mitigates liquidity risk by keeping credit facilities with
highly rated financial institutions. (See note 32).
38.9.1 remaining Maturities for non-derivative financial assets and liabilities
the following tables have been drawn up based on the undiscounted cash flows of financial assets and liabilities
(based on the earliest date on which the Group can be required to pay). the tables include principal and interest
cash flows.
At December 31, 2011
in millions of cHf
1–6 montHs
6–12 montHs
1–2 years
Cash and cash equivalents
trade and credit card receivables
other accounts receivable
other non-current assets
total cash inflows
trade payables
financial debt, short-term
other liabilities
financial debt, long-term
other non-current liabilities
total cash outflows
At December 31, 2010
199.9
47.0
51.9
–
298.8
301.1
39.6
223.2
64.4
–
628.3
0.5
–
0.5
–
1.0
–
9.0
2.6
64.3
–
75.9
–
–
–
0.1
0.1
–
–
–
844.5
–
844.5
in millions of cHf
1–6 montHs
6–12 montHs
1–2 years
Cash and cash equivalents
trade and credit card receivables
other accounts receivable
other non-current assets
total cash inflows
trade payables
financial debt, short-term
other liabilities
financial debt, long-term
other non-current liabilities
total cash outflows
80.6
50.8
39.1
–
170.5
203.9
35.3
192.3
44.4
–
475.9
–
–
0.8
–
0.8
–
–
4.0
44.4
–
48.4
–
–
0.1
0.4
0.5
–
–
1.9
177.8
–
179.7
more tHan
2 years
–
–
0.1
33.4
33.5
–
–
–
709.2
11.3
720.5
more tHan
2 years
–
–
–
38.3
38.3
–
–
0.9
433.0
9.4
443.3
total
200.4
47.0
52.5
33.5
333.4
301.1
48.6
225.8
1,682.4
11.3
2,269.2
total
80.6
50.8
40.0
38.7
210.1
203.9
35.3
199.1
699.6
9.4
1,147.3
Dufry AnnuAl report 2011
151
38.9.2 remaining maturities for derivative financial instruments
the following table details the Group's liquidity analysis for its derivative financial instruments. the table has been
drawn up based on the undiscounted contractual net cash inflows and outflows on derivative instruments that
settle on a net basis and those derivatives that require gross settlement. When the amount payable or receivable
is not fixed, the amount disclosed has been determined by reference to the projected interest rates as illustrated
by the yield curves at the end of the reporting period.
At December 31, 2011
in millions of cHf
net settled:
interest rate swaps
foreign exchange forward contracts
Gross settled:
foreign exchange forward contracts
total
At December 31, 2010
in millions of cHf
net settled:
interest rate swaps
foreign exchange forward contracts
Gross settled:
foreign exchange forward contracts
total
less tHan
3 montHs
3–6 montH
6 montHs
to 1 year
1 year +
(0.5)
0.3
0.3
0.1
(0.6)
–
0.1
(0.5)
–
–
0.1
0.1
–
–
–
–
less tHan
3 montHs
3–6 montH
6 montHs
to 1 year
1 year +
(0.5)
–
0.3
(0.2)
–
–
0.1
0.1
(1.3)
–
–
(1.3)
(0.3)
–
–
(0.3)
38.10 fair value of financial instruments
38.10.1 fair value of financial instruments carried at amortized cost
except as detailed in the following table, the Group considers that the carrying amounts of financial assets and
financial liabilities recognized in the consolidated financial statements approximate their fair values.
in millions of cHf
carrying amount
fair value
carrying amount
31. 12. 2011
31. 12. 2010
fair value
fInAnCIAl ASSetS
loans and receivables:
credit card receivables
24.1
23.8
38.5
38.0
152
Dufry AnnuAl report 2011
38.10.2 valuation techniques and assumptions applied for the purposes of measuring fair value
the fair values of financial assets and financial liabilities are determined as follows:
– the fair values of financial assets and financial liabilities with standard terms and conditions and traded on
active liquid markets are determined with reference to quoted market prices (includes listed redeemable notes,
bills of exchange, debentures and perpetual notes).
– the fair values of derivative instruments are calculated using quoted prices. Where such prices are not available,
a discounted cash flow analysis is performed using the applicable yield curve for the duration of the instruments
for non-optional derivatives, and option pricing models for optional derivatives. foreign currency forward
contracts are measured using quoted forward exchange rates and yield curves derived from quoted interest
rates matching maturities of the contracts. Interest rate swaps are measured at the present value of future
cash flows estimated and discounted based on the applicable yield curves derived from quoted interest rates.
– the fair values of other financial assets and financial liabilities (excluding those described above) are determined
in accordance with generally accepted pricing models based on discounted cash flow analysis.
38.10.3 fair value measurements recognized in the consolidated statement of financial position
the following table provides an analysis of financial instruments that are measured subsequent to initial recogni-
tion at fair value, grouped into levels 1 to 3 based on the degree to which the fair value is observable:
– level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities.
– level 2: fair value measurements are those derived from inputs other than quoted prices included within
level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices).
– level 3: fair value measurements are those derived from valuation techniques that include inputs for the asset
or liability that are not based on observable market data (unobservable inputs).
the Group held the following financial instruments measured at fair value at the reporting date:
At December 31, 2011
in tHousanDs of cHf
level 1
level 2
level 3
total
ASSetS MeASureD At fAIr vAlue 1
foreign exchange related derivative financial instruments
Interest rate related derivative financial instruments
total
lIAbIlItIeS MeASureD At fAIr vAlue 2
foreign exchange related derivative financial instruments
Interest rate related derivative financial instruments
total
–
–
–
–
–
–
0.5
–
0.5
0.8
1.0
1.8
–
–
–
–
–
–
0.5
–
0.5
0.8
1.0
1.8
Dufry AnnuAl report 2011
153
At December 31, 2010
in tHousanDs of cHf
level 1
level 2
level 3
total
ASSetS MeASureD At fAIr vAlue 1
foreign exchange related derivative financial instruments
Interest rate related derivative financial instruments
total
lIAbIlItIeS MeASureD At fAIr vAlue 2
foreign exchange related derivative financial instruments
Interest rate related derivative financial instruments
total
–
–
–
–
–
–
0.4
–
0.4
0.1
2.2
2.3
–
–
–
–
–
–
0.4
–
0.4
0.1
2.2
2.3
1 Included in the position “other accounts receivable” in the statement of financial position
2 Included in the position “other liabilities” in the statement of financial position
During the years ended December 31, 2011 and 2010, there were no transfers between level 1 and level 2 fair
value measurements, and no transfers into and out of level 3 fair value measurements.
39. events after reporting date
on january 10, 2012 Dufry expanded its presence at Sheremetyevo Airport in Moscow, russia by taking control
(51% of the issued shares) of regstaer Sheremetjevo Duty free, a local travel retail operator for a total consid-
eration of Chf 46.9 million. In 2011 this operation generated a turnover of about uSD 60 million. the Group is in
the process of preparing a purchase price allocation as to determine the fair values involved in this transaction.
the estimated transaction costs are Chf 0.9 million.
the acquired business complements the existing operations at site and adds 1,200 square meters in nine duty
free shops across several terminals of the airport. Synergies are expected to be achieved among others when
Dufry integrates the 200 regstaer employees into its local organization, introduces the standard corporate
procedures and incorporates these shops to its global supply chain. In 2011 Sheremetyevo International Airport
was the second busiest airport in russia with 14 million international passengers. It is also one of the fastest
growing airports in europe and recorded a passenger growth of close to 20% in the last twelve months.
154
Dufry AnnuAl report 2011
40. MoSt IMportAnt AffIlIAteD CoMpAnIeS
h = holding r = retail D = Distribution Center
as of DecemBer 31, 2011
location
country
type
ownersHip
in %
sHare capital
in tHousanDs
currency
europe
Dufry International ltd
Dufry holdings & Investments ltd
Dufry basel-Mulhouse ltd
Dufry Samnaun ltd
Dufrital SpA
Cid Italia SpA
Dufry Italia SpA
network Italia edicole
Dufry Islas Canarias Sl
Dufry france SA
Dufry hellas ltd
AfrICA
Dufry tunisie SA
Dufry Maroc Sarl
Dufry egypt llC
basel
basel
basel
Samnaun
Milan
Milan
Milan
Milan
tenerife
nice
Athens
tunis
Casablanca
Sharm-el-Sheikh
Dufry & G.t.D.C. ltd
Dufry Aeroport d’Alger Sarl
Dufry Côte d’Ivoire SA
Accra
Alger
Abidjan
Moscow
Moscow
Singapore
phnom pen
Shanghai
yerevan
Sharjah
belgrade
eurASIA
Dufry east ooo
Dufry Moscow Sheremetyevo
Dufry Singapore pte. ltd.
Dufry Cambodia ltd
Dufry (Shanghai)
Commercial Co. ltd.
ADf Shops CjSC
Dufry Sharjah fzc
Dufry d.o.o.
CentrAl AMerICA & CArIbbeAn
Dufry Mexico SA de Cv
Alliance Duty free, Inc.
Dufry Aruba n.v.
Inversiones tunc, SA
Duty free Caribbean ltd
flagship retail Services Inc.
Colombian emeralds
International ltd
Switzerland
Switzerland
Switzerland
Switzerland
Italy
Italy
Italy
Italy
Spain
france
Greece
tunisia
Morocco
egypt
Ghana
Algeria
Ivory Coast
russia
russia
Singapore
Cambodia
China
Armenia
u. Arab
emirates
Serbia
h
h
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
r
100
100
100
100
60
60
100
100
100
100
99
100
80
80
63
80
100
100
69
100
80
100
100
51
100
100
100
80
100
60
100
60
1,000
1,000
100
100
258
208
251
20
333
3,491
147
2,300
2,500
450
413
20,000
2,810
712
420
13,300
1,231
19,497
553,834
2,054
693,078
27,429
2,213
1,000
0
5,000
0
0
Chf
Chf
Chf
Chf
eur
eur
eur
eur
eur
eur
eur
eur
MAD
uSD
uSD
DzD
eur
uSD
uSD
SGD
uSD
Cny
AMD
AeD
rSD
uSD
uSD
uSD
uSD
uSD
uSD
uSD
Mexico City
San juan
oranjestad
Santo Domingo
bridgetown
Charlestown
Castries
Mexico
puerto rico
Aruba
Dominican
republic
barbados
St. Kitts & nevis
St. lucia
Dufry AnnuAl report 2011
155
h = holding r = retail D = Distribution Center
as of DecemBer 31. 2011
location
country
type
ownersHip
in %
sHare capital
in tHousanDs
currency
South AMerICA
Interbaires S.A.
navinten S.A.
Duty free ecuador S.A.
buenos Aires
Montevideo
Guayaquil
Dufry do brasil Duty free Shop ltda.
rio de janeiro
eMAC Comercio Importaçao ltda
rio de janeiro
north AMerICA
Dufry America, Inc.
Miami
hudson news Company Inc.
east rutherford
Dufry newark, Inc.
Dufry houston Duty free and
retail partnership
AMS-Cv newark, jv
Airport Management Services, llC
AMS-olympic nashville, jv
hudson news o’hare, jv
hudson retail-neu news jv
jfK Air ventures
national Air ventures
Seattle Air ventures
AMS-teI Miami, jv
AMS hudson las vegas, jv
hudson Group Canada, Inc.
DIStrIbutIon CenterS
Dufry travel retail ltd
Dufry America Services, Inc.
International operations and
Services Corp.
newark
houston
newark
new york
nashville
Springfield
new york
new york
Dallas
olympia
Miami
las vegas
vancouver
basel
Miami
Montevideo
Argentina
uruguay
ecuador
brazil
brazil
uSA
uSA
uSA
uSA
uSA
uSA
uSA
uSA
uSA
uSA
uSA
uSA
uSA
uSA
Canada
Switzerland
uSA
uruguay
eurotrade Corporation (II) limited
nassau
bahamas
r
r
r
r
r
h
h /r
r
r
r
h /r
r
r
r
r
r
r
r
r
r
D
D
D
D
100
100
100
100
100
100
100
100
75
80
100
83
70
80
80
70
75
70
73
100
100
100
100
100
293
126
401
4,146
0
5
0
1,501
1
0
0
0
0
0
0
0
0
0
0
0
5,000
398
50
5,580
uSD
uSD
uSD
uSD
brl
uSD
uSD
uSD
uSD
uSD
uSD
uSD
uSD
uSD
uSD
uSD
uSD
uSD
uSD
CAD
Chf
uSD
uSD
uSD
156
Dufry AnnuAl report 2011
Dufry AnnuAl report 2011
157
158
Dufry AnnuAl report 2011
financial statements Dufry aG
Income statement
for the year ended December 31, 2011
in tHousanDs of cHf
Dividend income
financial income
Management and franchise fee income
total income
personnel expenses
General and administrative expenses
Management and franchise fee expenses
Amortization of intangibles
transaction and project costs
financial expenses
taxes
total expenses
net earnings (loss)
2011
–
3,216
12,000
15,216
12,664
3,731
11,851
5,755
(2,638)
8,450
612
40,425
(25,209)
2010
91,000
17,622
11,380
120,002
24,004
3,484
9,096
–
22,424
5,865
632
65,505
54,497
Dufry AnnuAl report 2011
159
Statement of financial position
at December 31, 2011
Assets
in tHousanDs of cHf
Cash and cash equivalents
Marketable securities
receivables intercompany
receivables – related party
receivables – third party
other current assets
current assets
Investments
Intangible assets
non-current assets
total assets
liabilities and shareholders’ equity
in tHousanDs of cHf
payables – intercompany
payables – related party
payables – third party
bank debt
other current liabilities
current liabilities
total liabilities
Share capital
legal reserves
Share premium (capital contribution reserves)
General reserves
reserve for treasury shares
Available earnings
shareholders’ equity
total liabilities and shareholders' equity
note
31. 12. 2011
31. 12. 2010
4
1
9
9,494
84,504
2
49
1
39
36,948
267,135
–
77
26
94,059
304,225
1,074,449
105,025
1,179,474
1,185,228
–
1,185,228
1,273,533
1,489,453
note
31. 12. 2011
31. 12. 2010
51,291
367
340
29,134
13,147
94,279
94,279
243,311
280
1,082
–
40,317
284,990
284,990
3
134,881
134,881
10
972,734
5,927
13,485
52,227
975,061
3,600
28,704
62,217
1,179,254
1,204,463
1,273,533
1,489,453
160
Dufry AnnuAl report 2011
notes to tHe financial statements
Amounts are expressed in thousands of Chf, except where otherwise indicated.
1. Significant Investments
All investments of Dufry AG are in Switzerland and consist of:
suBsiDiary
in tHousanDs of cHf
Dufry International AG
Dufry Management AG
Dufry Corporate AG
Dufry holdings & Investments AG
total
participation
2011
2010
2011
2010
BooK value
sHare capital
100%
100%
100%
100%
344,673
455,453
100
100
100
100
729,575
729,575
1,074,449
1,185,228
1,000
100
100
1,000
1,000
100
100
1,000
A dividend of Chf 91,000 approved at the Shareholders’ Meeting of Dufry holdings & Investments AG held on
february 11, 2011, has been recognized as financial income of the 2010.
2. Significant shareholders’ participation
in %
31. 12. 2011
31. 12. 2010
Group of shareholders consisting of:
1. travel retail Investment SCA, luxembourg
2. Global retail Group S.àr.l., luxembourg
Artio Global Management llC
Credit Suisse Group AG
Skopos Administradora de recursos ltda and
SkoposInvest Administradora de recursos International ltda.
the Capital Group Companies, Inc. 1
hudson Media Inc., east rutherford, uSA
1 this participation fell below the reporting threshold
22.62%
7.07%
6.81%
4.43%
–
4.28%
22.62%
7.07%
4.99%
4.43%
4.21%
4.28%
Dufry AnnuAl report 2011
161
3. Authorized and conditional share capital
As of December 31, 2011 and December 31, 2010 Dufry AG had a conditional share capital of 567,296 shares or
Chf 2,836, and there was no authorized share capital.
on March 22, 2010 the extraordinary General Shareholders’ meeting of Dufry AG approved the increase of registered
share capital by Chf 38,811 from Chf 96,070 to Chf 134,881 by the issuance of 7,762,249 registered shares, each
with a par value of five Swiss francs. the share capital of Chf 38,811 was settled by a contribution in kind consisting
of 4,896 registered shares of Dufry holdings & Investments AG, basel with a nominal value of hundred Swiss francs
each. the value of the contribution in kind amounted to Chf 604,000.
4. treasury shares
at January 1, 2010
Assigned to holders of rSu-awards 2009
Share purchases
revaluation
at December 31, 2010
Assigned to holders of rSu-awards 2010 (see note 3.2)
Share purchases
revaluation
at December 31, 2011
numBer of
sHares
in tHousanDs
of cHf
269,134
18,662
(266,810)
286,735
–
289,059
(281,362)
100,419
–
108,116
(18,501)
28,539
8,248
36,948
(35,452)
12,503
(4,505)
9,494
5. enterprise risk management
In accordance with the article 663b of the Swiss Code of obligations the board of Directors of Dufry AG reviewed
and assessed the risk areas of the Group and where necessary, updated the key controls performed to ensure an
adequate risk monitoring.
162
Dufry AnnuAl report 2011
6. pledged assets
In 2011, Dufry AG had no pledged assets. In 2010, Dufry AG presented the shares of Dufry holdings & Investments
AG with a book value of Chf 729,575 as a pledge for the bank facilities of its subsidiary Dufry International AG.
7. Guarantee commitment regarding
Swiss value Added tax (vAt)
the following companies constitute a group for the Swiss federal tax Administration:
Main division vAt:
– Dufry International AG
– Dufry travel retail AG
– Dufry Samnaun AG
– Dufry participations AG
– Dufry russia holding AG
– Dufry basel Mulhouse AG
– Dufry Management AG
– Dufry Corporate AG
– Dufry holdings & Investments AG
– Dufry AG
Dufry AG is jointly and severally liable for the value Added tax owed by this specific group.
8. Compensation, participations and loans to the members
of the board of Directors and the Group executive Committee
(Disclosure according to Swiss Code of obligations 663b)
participations in Dufry AG
the members of the board of Directors of Dufry AG juan Carlos torres Carretero (Chairman), ernst George bachrach
(vice Chairman) and Steve tadler (member) representing the interest of Advent International Corporation and its
funds do not hold any shares or share options on December 31, 2011 or December 31, 2010.
on December 31, 2011, the following members of the board of Directors and Group executive Committee (including
closely related parties) held the following number of shares / number of share options (restricted stock units) /
percentage participation in Dufry AG: Mr. james Cohen, Member 1,257,687 / 0 / 4.66% (which includes
1,154,677 shares held by hudson Media, Inc.); Mr. Mario fontana, Member 10,000 / 0 / 0.04%; Mr. Andrés holzer
neumann, Member 2,262,125 / 0 / 8.39% (which includes 2,151,913 shares held by petrus pte ltd); Mr. joaquin
Moya-Angeler Cabrera, Member 13,390 / 0 / 0.05%; Mr. julián Díaz González, Chief executive officer 60,100 /
39,941/ 0.37%; Mr. Xavier rossinyol, Chief financial officer 45,000 / 26,400 / 0.26%; Mr. josé Antonio Gea, Global
Chief operating officer 37,000 / 26,400 / 0.24%; Mr. pascal C. Duclos, General Counsel 0 / 21,000 / 0.08%; Mr. Dante
Marro, Coo region europe 0 / 10,200 / 0.04%; Mr. Miguel Ángel Martínez, Coo region Africa 8,500 / 10,200 / 0.07%;
Mr. rené riedi, Coo region eurasia 1,500 / 10,200 / 0.04%; Mr. josé h. González, Coo region Central America &
Caribbean 0 / 10,200 / 0.04%; Mr. josé Carlos Costa da Silva rosa, Coo region South America 2,000 / 10,200 / 0.05%
and Mr. joseph DiDomizio, Coo region north America 13,500 / 16,800 / 0.11%.
Dufry AnnuAl report 2011
163
on December 31, 2010, the following members of the board of Directors and Group executive Committee (including
closely related parties) held the following number of shares / number of share options (restricted stock units) /
percentage participation in Dufry AG: Mr. Mario fontana, Member 3,893 / 0 / 0.01%; Mr. Andrés holzer neumann,
Member 2,259,125 / 0 / 8.37% (which includes 2,151,913 shares held by petrus pte ltd); Mr. joaquin Moya-Angeler
Cabrera, Member 15,390 / 0 / 0.06%; Mr. james Cohen, Member 1,154,677 / 0 / 4.28% hold through hudson Media,
Inc.; Mr. julián Díaz González, Chief executive officer 39,350 / 33,250 / 0.27%; Mr. Xavier rossinyol, Chief financial
officer 23,000 / 22,000 / 0.17%; Mr. josé Antonio Gea, Global Chief operating officer 35,200 / 22,000 / 0.21%; Mr.
pascal C. Duclos, General Counsel 0 / 17,500 / 0.06%; Mr. Miguel Ángel Martínez, Coo region Africa 5,000 / 8,500 / 0.05%;
Mr. rené riedi, Coo region eurasia 1,500 / 8,500 / 0.04%; Mr. josé h. González, Coo region Central America &
Caribbean 6,550 / 8,500 / 0.06%; Mr. josé Carlos Costa da Silva rosa, Coo region South America 0 / 8,500 / 0.03% and
Mr. joseph DiDomizio, Coo region north America 9,520 / 14,000 / 0.09%. the remaining members of the board of
Directors or the Group executive Committee had no participation on December 31, 2010.
All these participations are reported in accordance with the regulations of the federal Act on Stock exchanges and
Securities trading (SeStA), in force since December 1, 2007, showing the participation (including restricted stock
units) as a percentage of the number of outstanding registered shares on December 31, 2011 and December 31,
2010, respectively.
9. Compensation of members of the board of Directors
and Group executive Committee
the members of the board of Directors of Dufry AG juan Carlos torres Carretero (Chairman), ernst George bachrach
(vice Chairman) and Steve tadler (member) representing the interest of Advent International Corporation and its
funds do not receive any compensation for the years 2011 or 2010.
In 2011 Dufry paid to its non-executive members of the board of Directors fees in total amount of Chf 1,350.0
(to Mr. jorge born, member Chf 150.0; to Mr. Xavier bouton, member Chf 150.0; to Mr. james Cohen, member
Chf 150.0; to Mr. josé lucas ferreira de Melo, member Chf 150.0; to Mr. Mario fontana, member Chf 200.0; to
Mr. Andrés holzer neumann, member Chf 200.0; to Mr. Maurizio Mauro, member Chf 150.0; to Mr. joaquin
Moya-Angeler Cabrera, member Chf 200.0). In addition to these fees Mr. Xavier bouton received Chf 250.0 for
strategic consulting services provided to the Group during the year. the social charges related to these fees are
calculated in accordance with the local regulations amounted to Chf 81.8 in total (to Mr. jorge born, member
Chf 9.1; to Mr. Xavier bouton, member Chf 9.1, to Mr. james Cohen, member Chf 9.1; to Mr. josé lucas ferreira
de Melo, member Chf 9.1; to Mr. Mario fontana, member Chf 12.1; to Mr. Andrés holzer neumann, member
Chf 12.1; to Mr. Maurizio Mauro, member Chf 9.1; to Mr. joaquin Moya-Angeler Cabrera, member Chf 12.1).
finally, the total compensation to the non-executive members of the board of Directors amounted to Chf 1,681.8
in total (to Mr. jorge born, member Chf 159.1; to Mr. Xavier bouton, member Chf 409.1; to Mr. james Cohen,
member Chf 159.1; to Mr. josé lucas ferreira de Melo, member Chf 159.1; to Mr. Mario fontana, member
Chf 212.1; to Mr. Andrés holzer neumann, member Chf 212.1; to Mr. Maurizio Mauro, member Chf 159.1; to
Mr. joaquin Moya-Angeler Cabrera, member Chf 212.1).
In 2010 Dufry paid to its non-executive members of the board of Directors fees in total amount of Chf 914 (to
Mr. jorge born, member Chf 63; to Mr. Xavier bouton, member Chf 100; to Mr. james Cohen, member Chf 100;
to Mr. josé lucas ferreira de Melo, member Chf 63; to Mr. Mario fontana, member Chf 175; to Mr. Andrés
holzer neumann, member Chf 175; to Mr. Maurizio Mauro, member Chf 63; to Mr. joaquín Moya-Angeler Cabrera,
member Chf 175). In addition to these fees Mr. Xavier bouton received Chf 250 for strategic consulting services
provided to the Group during the year. the social charges related to these fees are calculated in accordance with
the local regulations amounted to Chf 55 in total (to Mr. jorge born, member Chf 3.8; to Mr. Xavier bouton,
member Chf 6; to Mr. james Cohen, member Chf 6; to Mr. josé lucas ferreira de Melo, member Chf 3.8; to
164
Dufry AnnuAl report 2011
Mr. Mario fontana, member Chf 10.6; to Mr. Andrés holzer neumann, member Chf 10.6; to Mr. Maurizio Mauro,
member Chf 3.8; to Mr. joaquín Moya-Angeler Cabrera, member Chf 10.6). finally, the total compensation to
the non-executive members of the board of Directors amounted to Chf 1,219 in total (to Mr. jorge born, mem-
ber Chf 67.1; to Mr. Xavier bouton, member Chf 356.0; to Mr. james Cohen, member Chf 106.0; to Mr. josé
lucas ferreira de Melo, member Chf 67.1; to Mr. Mario fontana, member Chf 185.6; to Mr. Andrés holzer
neumann, member Chf 185.6; to Mr. Maurizio Mauro, member Chf 67.1; to Mr. joaquín Moya-Angeler Cabrera,
member Chf 185.6).
In the years 2011 and 2010 there were no other compensations paid directly or indirectly to active or former
members of the board of Directors and there are also no loans or guarantees received or provided to these
board members, nor to their related parties.
In 2011 the ten members of the Group executive Committee received the following compensation: i) in cash
Chf 8,765 (basic salary Chf 4,336, bonus Chf 3,647, allowances in kind Chf 782) and ii) as employer’s social
charges Chf 1,978 and iii) in form of unvested stock options for the biannual award 2011, i.e. for the years 2011 and
2012 181,541 rSu’s of Dufry AG (for this purposes fully considered as a compensation 2011), adding up to a total
compensation of Chf 20,748. these figures include the compensation to Mr. julián Díaz González, Chief executive
officer of Dufry AG, who received a compensation: i) in cash Chf 1,789 (basic salary Chf 912, bonus Chf 844,
allowances in kind Chf 33) and ii) as employer’s social charges Chf 513 and iii) in form of unvested stock options
for the biannual award 2011, i.e. for the years 2011 and 2012 39,941 rSu’s of Dufry AG (for this purposes fully
considered as a compensation 2011), adding up to a total compensation of Chf 4,504.
In 2010 the ten members of the Group executive Committee received the following compensation: i) in cash
Chf 7,286 (basic salary Chf 4,551, bonus Chf 2,237, allowances in kind Chf 498) and ii) as employer’s social
charges Chf 1,454 and iii) in form of unvested stock options for the annual award 2010, 142,750 rSu’s of Dufry AG,
adding up to a total compensation of Chf 14,630. these figures Includes the compensation to Mr. julián Díaz
González, Chief executive officer of Dufry AG, who received a compensation: i) in cash Chf 1,265 (basic salary
Chf 941, bonus Chf 293, allowances in kind Chf 32) and ii) as employer’s social charges Chf 342 and iii) in form
of unvested stock options for the annual award 2010 33,250 rSu’s of Dufry AG, adding up to a total compensation
of Chf 2,979.
In the years 2011 and 2010 there were no other compensations paid directly or indirectly to active or former
members of the Group executive Committee, nor to their related parties and there are also no loans or guar-
antees received or provided to these members, nor to their related parties.
for details regarding conditions of restricted Stock unit (rSu) plan refer to note 30 of the consolidated financial
statements.
Dufry AnnuAl report 2011
165
10. Appropriation of available earnings
in tHousanDs of cHf
retained earnings
Movement in legal reserves
net earnings (loss) for the year
available earnings at December 31
to be carried forward
2011
2010
62,217
15,220
(25,209)
52,227
52,227
18,272
(10,552)
54,497
62,217
62,217
166
Dufry AnnuAl report 2011
Dufry AnnuAl report 2011
167
168
Dufry AnnuAl report 2011
otHer information
Information for investors and media
ticker details Dufry shares
listing
type of security
ticker symbol
ISIn-no.
Swiss Security-no. 2 340 545
reuters
bloomberg
Dufn.S
Dufn SW
SIX Swiss exchange
registered shares
Dufn
Ch 0 023 405 456
ticker details Dufry BDr
listing
type of security
ticker symbol
ISIn-no.
reuters
bloomberg
bM&fboveSpA
brazilian Depositary
receipts (bDrs)
DAGb11
brDAGbbDr008
Dufb11.SA
Dufb11 bz
corporate communications
lubna haj Issa
Corporate Communications
Dufry Group
phone +41 61 266 44 46
lubna.haj-issa@dufry.com
Mario rolla
Corporate Communications
Dufry Group
phone +55 21 2157 9611
mario.rolla@br.dufry.com
investor relations
Andreas Schneiter
Director of treasury & Investor relations
Dufry Group
phone +41 61 266 42 38
andreas.schneiter@dufry.com
Sara lizi
Manager Investor relations
Dufry Group
phone +55 21 2157 9901
sara.lizi@br.dufry.com
rafael Duarte
Investor relations
Dufry Group
phone +41 61 266 45 77
rafael.duarte@dufry.com
victor bento
Investor relations
Dufry Group
phone +55 21 2157 9610
victor.bento@br.dufry.com
Key dates in 2012
May 2, 2012
May 3, 2012
july 30, 2012
november 5, 2012 results first nine Months 2012
Annual General Meeting
results first quarter 2012
results first half year 2012
Dufry AnnuAl report 2011
169
Address details of headquarters
corporate Headquarters
Dufry AG
hardstrasse 95
4020 basel
Switzerland
phone +41 61 266 44 44
region europe
Dufry Shop finance ltd Srl
viale lancetti, 43
20158 Milan
Italy
phone + 39 02 698 151
region africa
Dufry tunisie S.A.
Angle de la rue du lac victoria
rue des lacs de Mazurie
les berges du lac
tunis 1053
tunisia
phone + 216 71 137 800
region eurasia
Dufry eurasia fze
Cargo terminal building 1
Sharjah International Airport
p. o. box 9011
Sharjah
united Arab emirates
phone + 971 6 558 11 46
region central america & caribbean
Dufry America, Inc.
10300 n. W. 19th Street Suite 114
Miami / fl 33172
Mailing Address: p.o. box 226170,
Miami / fl 33222
uSA
phone + 1 305 591 1763
region south america
Dufry do brasil Duty free Shop ltda
rua da Assembléia, 51
Centro, rio de janeiro – rj
brazil – 20011-001
phone + 55 21 2157 9695
region north america
hudson Group
one Meadowlands plaza
east rutherford, nj 07073
uSA
phone + 1 201 939 5050
170
Dufry AnnuAl report 2011
this Annual report contains certain forward-looking statements, which can be identified by
terms like “believe”, “assume”, “expect” or similar expressions, or implied discussions
regarding potential new projects or potential future revenues, or discussions of strategy,
plans or intentions. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to be materially different from
any future results, performance or achievements expressed or implied by such statements.
All forward-looking statements are based only on data available to Dufry at the time of
preparation of this Annual report. Dufry does not undertake any obligation to update any
forward-looking statements contained in this Annual report as a result of new information,
future events or otherwise.
publisher Dufry AG, basel
concept, production tolxdorff & eicher Consulting, horgen
Design MetaDesign, zurich
print druckmanufaktur.com ag, urdorf
© Dufry ltd 2012