DUFRY GROUP – A LEADING
GLOBAL TRAVEL RETAILER
DUFRY AG (SIX: DUFN)
IS A LEADING GLOBAL
TRAVEL RETAILER OPERATING
OVER 2,300 DUTY-FREE
AND DUTY-PAID SHOPS
IN AIRPORTS, CRUISE
LINES, SEAPORTS, RAILWAY
STATIONS AND DOWNTOWN
TOURIST AREAS.
THE COMPANY, HEADQUARTERED
IN BASEL, SWITZERLAND,
OPERATES IN 64 COUNTRIES
ON ALL SIX CONTINENTS.
ANNUAL
REPORT
2020
CONTENT
1 MANAGEMENT REPORT
Dufry at a Glance 4 – 5
Highlights 2020 6 – 7
Message from the Chairman of the Board of Directors 8 – 11
Statement from the Chief Executive Officer 12 – 15
Organizational Structure 17
Board of Directors 18 – 19
Global Executive Committee 20 – 21
Dufry Investment Case 22 – 23
Dufry Strategy 24 – 69
Dufry Regions 40 – 55
ESG Strategy 70 – 78
ESG Report 80 – 108
Community Engagement 110 – 116
2 SUSTAINABILITY STRATEGY & REPORT
3 FINANCIAL REPORT
Report from the Chief Financial Officer 118 – 123
Financial Statements 125 – 238
Consolidated Financial Statements 126 – 224
Financial Statements Dufry AG 225 – 238
Alternative Performance Measures 239 – 241
ESG STRATEGY
4 GOVERNANCE REPORT
Corporate Governance 243 – 267
Remuneration Report 268 – 287
Information for Investors and Media 288 – 289
Address Details of Headquarters 289
ONGOING
EVOLUTION
OF DUFRY’S
SUSTAINABILITY
ENGAGEMENT
Read the full focus story on the ESG Strategy
and the ESG Report on pages 70 – 108
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DUFRY ANNUAL REPORT 2020
DUFRY
AT A GLANCE
TURNOVER
IN MILLIONS OF CHF
9,000
8,400
7,800
7,200
6,600
6,000
5,400
4,800
4,200
3,600
3,000
2,400
1,800
1,200
600
0
2016
2017
2018
2019
2020
GROSS PROFIT
IN MILLIONS OF CHF
2016
2017
2018
2019
2020
5,200
4,800
4,400
4,000
3,600
3,200
2,800
2,400
2,000
1,600
1,200
800
400
0
4
MARGIN
EQUITY FREE CASH FLOW
IN MILLIONS OF CHF
65 %
500
64 %
63 %
62 %
61 %
60 %
59 %
58 %
57 %
56 %
55 %
54 %
53 %
52 %
250
0
– 200
– 300
– 1,000
2016
2017
2018
2019
2020
5 % BORDER, DOWNTOWN
AND HOTEL SHOPS
3 % CRUISE LINERS
AND SEAPORTS
NET SALES BY PRODUCT CATEGORY 2020
2 % LITERATURE AND PUBLICATIONS
2 % ELECTRONICS
5 % OTHER
31 % PERFUMES
AND COSMETICS
11 % LUXURY
GOODS
12 % TOBACCO
GOODS
17 % WINE
AND SPIRITS
19 % FOOD,
CONFECTIONERY
AND CATERING
46 % EUROPE,
MIDDLE EAST AND
AFRICA (EMEA)
NET SALES BY REGION 2020
3 % GLOBAL DISTRIBUTION
CENTERS
25 % NORTH
AMERICA
20 % CENTRAL
AND SOUTH
AMERICA
6 % ASIA PACIFIC
NET SALES BY CHANNEL 2020
NET SALES BY MARKET SECTOR 2020
6 % RAILWAY STATIONS AND OTHER
5 % BORDER, DOWNTOWN
AND HOTEL SHOPS
3 % CRUISE LINERS
AND SEAPORTS
44 % DUTY-PAID
86 % AIRPORT
56 % DUTY-FREE
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DUFRY ANNUAL REPORT 2020
HIGHLIGHTS
2020
CONCESSION
PORTFOLIO
FURTHER
EXPANDED
Dufry has successfully strengthened its
concession portfolio with important new
contracts such as the twelve-year concession
at Sabiha Gökçen International Airport
in Turkey and the seven-year extension at
St. Petersburg Pulkovo Airport in Russia.
CHF 1,993
MILLION
SUCCESSFULLY
SECURED IN 2020
The company’s financial position has been substantially
improved through a series of financial initiatives including
a share placement, convertible bond issuances, access
to additional bank loans and a rights issue.
6
CO-OPERATION
WITH ALIBABA TO
DEVELOP TRAVEL
RETAIL IN CHINA
AND DIGITALIZATION
Dufry and Alibaba have agreed to set up a
joint-venture to partner in the development of
travel retail in mainland China and enhance
Dufry’s digital transformation.
CHF 1,906
MILLION
LIQUIDITY
POSITION
As of December 31, 2020, Dufry
had a reassuring liquidity position
of CHF 1,905.7 million.
NEW
ALTERNATIVE
CHANNELS
Dufry opened its new concept
store ANECDOTE at THE CIRCLE
at Zurich airport, offering a wide
brand selection at attractive
prices to travelers and customers
of the Greater Zurich Area.
FULL REINTEGRATION
OF HUDSON
In the context of the Group reorganization aimed at
simplifying its corporate structure, adapting the company
to the new business environment and increasing efficiency,
Dufry has fully reintegrated its Hudson subsidiary.
CHF 1,312
MILLION
OF TOTAL SAVINGS
REACHED
In 2020, Dufry generated CHF 1,312.1 million of total
savings through its cost-cutting initiatives at all levels
aiming at protecting the resilience of the company.
SHAREHOLDER
STRUCTURE
STRENGTHENED
WITH IMPORTANT
PARTICIPATIONS
Dufry has successfully strengthened its shareholder
structure with new important participations such as
Advent International and Alibaba Group, as well as with
the ongoing support of long-standing shareholders
such as GIC Asset Management, Fidelity, FMR LLC, Qatar
Investment Authority, Richemont, Norges Bank as well
as Travel Retail Investments.
ESG
STRATEGY
EVOLVED
AND
ENGAGEMENT
INCREASED
Dufry has evolved its ESG
strategy by defining four
key focus areas fully aligned
with the company business
model. Implementation of ESG
engagement is being driven
by a dedicated ESG Committee
and supervised at the Board
of Directors level.
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DUFRY ANNUAL REPORT 2020
MESSAGE FROM
THE CHAIRMAN
OF THE BOARD
OF DIRECTORS
DEAR SHARE-
HOLDERS
The year 2020 was the most challenging year in the
history of our company and the whole travel retail and
tourism industry. After a promising start with positive
performance in the first weeks of the year, our full
attention turned to the persistent spread of the
COVID-19 pandemic and its impact on the industry
and our business. The Board of Directors worked
closely with the Group Executive Committee to define
and implement measures to protect the business and
strengthen the company’s resilience. Firstly, we created
a dedicated subcommittee at the Global Executive
Committee level focused on implementing measures to
protect the health and safety of employees and cus-
tomers through the Dufry Health & Safety Protocol.
Secondly, we immediately applied comprehensive cost
cutting initiatives at all levels and launched a series of
financing transactions to strengthen the financial
position of the company. Adapting the structure of our
organization to the new business reality was the next
important step, for which we made difficult and tough
decisions. The new organization structure allowed us
to simplify and shorten the decision-making process
and react faster to market conditions. This included
fully reintegrating our North American business, with
the delisting of our Hudson subsidiary completed in
the fourth quarter 2020.
Whilst implementing all necessary changes to protect
the current business, we seized several opportunities
to further develop the company, signing important
partnerships, and increasing our retail footprint in dif-
ferent regions across the world. These actions created
new revenue streams and growth perspectives for the
future. In particular, I would like to highlight the joint-
venture agreement signed with Alibaba Group to de-
velop travel retail in China and accelerate Dufry’s digi-
¹ For a glossary of financial terms and key performance indicators
please see page 239 of this Annual Report.
talization worldwide. The related collaboration with
Hainan Development Holding includes the opening of
the Global Duty Free Plaza shop at the Mova Mall in
Haikou. Equally important are, among others, the new
concession won in Turkey at the Sabiha Gökçen air-
port and the contract extension in Russia at the
Pulkovo airport in St. Petersburg.
From a results perspective, the pandemic and related
travel restrictions heavily impacted our performance,
with turnover decreasing by 71.1 % to CHF 2,561.1 mil-
lion, and organic growth coming in at – 69.8 %. Adjusted
net profit reached CHF – 1,658.4 million, resulting in an
Adjusted EPS of CHF – 28.4¹. In this context, implement-
ing cost-cutting initiatives at all levels of the organiza-
tion generated costs savings of CHF 1,312.1 million and
played a key role in the company’s resilience.
In 2020, our focus on protecting liquidity impacted our
dividend payment for the year. Originally, we had
planned to propose a dividend payment of CHF 4.00
per share, as published in the annual report 2019. How-
ever, the Board of Directors finally proposed to the
2020 General Meeting of Shareholders not to pay any
dividend in 2020, in order to protect liquidity amid the
limited visibility on the evolution of the crisis. This pro-
posal was accepted by 99.6 % of the votes represented
at the General Meeting of Shareholders, thus contrib-
uting over CHF 190 million in savings.
With respect to the 2021 General Meeting of Share-
holders, the Board of Directors has already resolved
on two proposals to be submitted to our shareholders.
Firstly, we will propose to keep the dividend payment
for the business year 2020 suspended, thus continuing
to focus on protecting our liquidity. Secondly, we will
propose the election of Deloitte as new Auditors for
the financial year 2021. In this context, I would like to
thank Ernst & Young for their longstanding collabora-
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DUFRY ANNUAL REPORT 2020
tion and the services they have provided to us over the
past seventeen years.
Strong support
by long-term and
new shareholders.
As of the second quarter 2020, we have also been
implementing several initiatives to strengthen the
financial position of the company, allowing Dufry
to endure the pandemic, even if the recovery
takes longer than expected. Following the ap-
proval of our shareholders with a large majority
of 99.57 %, in April and May, we executed a capi-
tal increase through the placement of 5.5 million
shares and by issuing a convertible bond which
generated CHF 151 million and CHF 350 million
respectively. In addition, we also agreed with our
bank consortium on a new twelve-months com-
mitted credit facility of CHF 390 million, with
two six-month extensions. Despite the chal-
lenging environment, these transactions – un-
derpinned by the remarkable support of our
lending banks, as well as existing and new share-
holders – allowed us to strengthen our balance
sheet and to create a solid liquidity position to
mitigate the revenue impact of the Covid-19
pandemic.
In October and as approved at the Extraordi-
nary General Meeting, we executed a second
rights offering to acquire the remaining out-
standing shares of our North American sub-
sidiary Hudson, which as part of the overall
streamlining of our company structure was
fully reintegrated into our organization. In
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DUFRY ANNUAL REPORT 2020
470,000 m2
Dufry operates close to
470,000 m2 of retail space.
this transaction, we generated gross proceeds of
CHF 820 million and an additional CHF 70 million
through the launch of a mandatory convertible bond
thus exceeding expectations. Here we experienced
once again the strong support of our existing share-
holders and succeeded in winning new and important
long-term investors such as Advent International and
Alibaba Group.
The combined financial initiatives in the second and
third quarters generated total proceeds of CHF 1,992.9
million allowing us to strengthen our balance sheet, to
delist Hudson and to establish a solid liquidity position,
which at year end stood at CHF 1,905.7 million. In this
context, I thank our existing and new shareholders, as
well as our bondholders and lending banks for the ex-
traordinary support we have received in this most
challenging phase of our long-standing collaboration.
Our long-term shareholders, Advent International,
Alibaba Group, GIC Asset Management, Fidelity, FMR
LLC, Qatar Investment Authority, Richemont, Norges
Bank, as well as Travel Retail Investments held partici-
pations above 3 % and represented 48.7 % of our share
capital.
Our market capitalization stood at CHF 4,461 million
as per December 31, 2020 after it had strongly re-
bounded throughout the year from the initial pan-
demic impact in the Spring, With this recovery our
market capitalization and enterprise value have almost
closed the gap to pre-Covid levels. This is a remark-
able evolution, particularly if compared to peers in the
travel and tourism industry, and underlines the trust
of investors and the market in the resilience of our
company. The average daily trading volume on all plat-
forms was CHF 64.0 million, thus confirming the good
liquidity of our shares. The SIX Swiss Exchange remains
our most important trading platform, where the aver-
age daily volume of Dufry shares reached CHF 38.8 mil-
lion in 2020. Dufry’s trading volumes are mainly con-
centrated at the SIX 61 % and BATS Chi-X OTC 39 %
platforms. As is our tradition, we have maintained a
continuous dialogue with our shareholders and the
financial community through about 1,620 roadshow or
conference meetings, calls and emails – unfortunately,
mostly virtually – in 2020, but we are looking forward
to engaging again in person as soon as possible.
During the year under review, we welcomed two new
members to the Board of Directors team. Mrs. Mary J.
Steele Guilfoile was elected by our shareholders at the
2020 AGM, succeeding Andrés Holzer Neumann and
contributing with her wealth of experience in the travel
industry, logistics services and marketing and finance
sectors. In the name of the Board of Directors, I would
like to thank Andrés Holzer for his long-standing sup-
port as a Dufry Board member. We wish him all the
best for the future and thank him for remaining an im-
portant shareholder in our Group. We equally welcome
to our Board of Directors Mr. Ranjan Sen, who was
elected by our shareholders at the EGM in October
2020. His experience in international finance and the
Asian markets will provide an additional and valuable
contribution to our company. At the same EGM, our
shareholders had previously approved the increase of
the maximum size of the Board of Directors from nine
to eleven members.
Evolution of Dufry’s
ESG program.
Our environmental, social and governance (ESG) en-
gagement has continued to be a focus in 2020 and we
made considerable progress with several important
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DUFRY ANNUAL REPORT 2020
achievements. Above all, we have revised Dufry’s ESG
Strategy by defining four key focus areas, which re-
flect our business model, build on our stakeholder
eco-system, and clearly define where we can make
positive contributions to maintain a high standard of
environmental stewardship. Our ESG strategy, which
is an integral element of our company strategy and
governance structure, is described in detail on pages
70 – 78 of this report.
In 2020, we have also set the base upon which to mea-
sure our greenhouse gas (GHG) emissions, by install-
ing the necessary processes and starting to collect
the respective energy consumption data, to determine
our carbon footprint and identify improvement oppor-
tunities going forward. Furthermore, we have success-
fully completed the re-certification process of the
Equal Salary Certification in Switzerland, which we
first achieved in 2019, and which includes all functions
and operations based in Switzerland.
With respect to our ESG reporting, we have enhanced
the reporting structure by mapping the KPI’s not only
according to the Global Reporting Initiative (GRI)
standards, but also in line with the UN Sustainable
Development Goals (UN SDGs) and by also adding the
progress report of the UN Global Compact, of which
we became a signatory member in early 2020. A com-
plete overview of our achievements and ESG goals is
available in our ESG Report on pages 80 – 108.
cautiously optimistic that in 2021 we will see tangible
improvements with respect to the overall health situ-
ation and the economic recovery. Rest assured that
we remain vigilant regarding any developments to pro-
vide even safer working and shopping environments
for our employees and customers. From a company
perspective, we are well prepared and ready to accel-
erate growth as soon as travel restrictions are lifted.
This year, a very special “Thank You” is due to all our
employees and management teams, as the work, ded-
ication and support given to the company has been im-
mense and exceptional in so many ways. We also want
to pay our respects to all the colleagues we have sadly
lost and to their families, all of whom are very much in
our thoughts. And we wish our colleagues who have
suffered from the virus a swift and full recovery.
Throughout this challenging year, we also experienced
extraordinary support from our landlords and suppli-
ers, who engaged in close collaboration and allowed us
to find mutually viable solutions and for which we owe
them a debt of gratitude.
We are equally grateful for the ongoing trust received
from our various business partners and sharehold-
ers, thereby invigorating our long-standing relation-
ships and allowing us to continuously foster our com-
mon vision to further develop Dufry as a WorldClass.
WorldWide company.
Ongoing community
engagement.
Sincerely,
It is in difficult times such as these, that support for
disadvantaged children and families is most needed.
Our engagement programs around the world contin-
ued to support and assist communities in markets in
which we operate. It is now the 11th year that we have
supported the funding of SOS Children’s Villages ini-
tiatives in Brazil, Mexico and Kenya. In 2020, we were
also involved in community projects in many other
parts of the world such as Haiti, Greece, Korea, Turkey,
the United Kingdom, Switzerland, the United States,
Canada and Spain.
When writing my letter to you for last year’s report,
we could not have imagined the considerable changes
we would experience with respect to our lives, working
environment and the overall business performance.
Today, one year later, we have learned many important
lessons on how to best handle and cope with the cri-
sis and, despite the still limited visibility, we can be
Juan Carlos Torres Carretero
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DUFRY ANNUAL REPORT 2020
STATEMENT
OF THE CHIEF
EXECUTIVE
OFFICER
DEAR ALL
While Dufry has evidently been impacted by the
Covid-19 pandemic as have many other companies in
the travel and tourism industry, I have seen a deep
emotional engagement and a strong determination by
all our employees to overcome this challenging situa-
tion. From the Board of Directors, to our management
teams and throughout all levels of our organization,
we have worked in close alignment to find, plan and
implement the right solutions to mitigate the impact
of this crisis and lay the foundations upon which we
will emerge as a stronger company. This positive atti-
tude and dedication has allowed us to adapt the com-
pany to the new market environment very quickly and
to prepare our organization for the recovery and
beyond. In parallel, we have succeeded in putting the
company on solid financial ground and seized oppor-
tunities, which provide remarkable growth potential
and contribute to the future development of Dufry.
As a result of the considerable travel restrictions
and the consequent drop in passenger numbers our
turnover reached CHF 2,561.1 million in 2020 versus
CHF 8,848.6 million in 2019, equal to a decrease of
71.1 %, while organic growth came in at – 69.8 %. On the
positive side however, Dufry reported a reassuring
liquidity position of CHF 1,905.7 million at year-end
2020¹.
Strong company values supporting transformation
Dufry’s values, which have characterized the develop-
ment of the company in the past, have again proven
to be of great support and key success factors. Our
management teams and employees have built on their
strengths of determination, execution, delivery and re-
silience to drive the restructuring and successfully im-
plement the new organization, which became effective
¹ For a glossary of financial terms and key performance indicators
please see page 239 of this Annual Report.
on September 1, 2020. The total cost savings imple-
mented through the reorganization of the company
amounted to CHF 1,312.1 million in the full-year 2020,
including reductions in concession fees, personnel ex-
penses and general expenses. Through the new orga-
nization, cost cuttings and the increased efficiency,
Dufry is well prepared for the recovery phase and
emerging as a powerful player within the travel retail
industry.
Company successfully
adapted to the
new environment.
In this context, I want to express our gratitude to all
our employees, who have contributed to Dufry’s growth
in the past, and I hope that the colleagues who have
had to leave the company can soon seize new, reward-
ing opportunities and continue their careers success-
fully.
Important investors supporting financial position
and liquidity levels
In the second and the fourth quarters, we succeeded
in closing significant financial transactions aimed at
strengthening Dufry’s financial position and securing
enough liquidity to allow the company to endure a pro-
longed period of disruption, even if the pandemic and
travel industry recovery takes longer than expected.
Through the capital increase in October, as well as the
issuance of the convertible bonds and the share place-
ment in the second quarter, the company generated
total gross proceeds of CHF 1,992.9 million. Existing
and new shareholders as well as bondholders have
confirmed with their participations their trust and
confidence in Dufry and have provided remarkable
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DUFRY ANNUAL REPORT 2020
2,300
Dufry is a real global player
operating over 2,300 shops
throughout all six continents.
support for the positive perception of our company’s
resilience.
Promising new partnerships
The joint-venture established with Alibaba Group to
jointly seek opportunities to drive travel retail in
China, as well as to accelerate Dufry’s digital trans-
formation on a global scale, provides a considerable
growth potential in Asia and with Chinese customers
worldwide. The partnership combines Alibaba’s eco-
system of 800 million consumers and their digital ex-
perience with our extensive travel retail expertise.
Relevant new
partnerships.
As a first result of this joint-venture, in early January
2021 we signed an important agreement with Hainan
Development Holdings to develop the Mova Mall duty-
free operation in Haikou. Dufry will support the
newly opened Global Duty Free Plaza shop with its
global experience in travel retail including its
proven knowhow in procurement, supply chain,
marketing and shop-design. The new downtown
duty-free shop, spans over 38,920 m2 across two
buildings of the Mova Mall, Aquarius and Capri-
corn, and saw the first phase open right on
time for the 2021 Chinese Spring Festival at
the end of January.
Footprint extensions
and ongoing refurbishments
Despite the difficult business environment
in 2020, we have also continued to increase
our diversified footprint with promising new
concessions such as the new twelve year con-
tract won at the Sabiha Gökçen Airport in Turkey,
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DUFRY ANNUAL REPORT 2020
operational from November 2020, as well as the seven
year extension of the Pulkovo airport operation in
St. Petersburg, Russia.
Dufry opened in total gross new retail space of 9,600
m2 or 2.0 % of overall retail space distributed across
39 shops such as Sabiha Gökçen, Istanbul (TUR),
Florianopolis (BRA), Macao (MO), Odessa (UKR), Singa-
pore (SG), Phoenix, Boston (US). This includes the new
ANECDOTE conceptual store at The Circle at Zurich
Airport (CH), which serves both travelers and custom-
ers from the Greater Zurich Area with a selection of
core category products, fashion & accessories and an
appealing convenience assortment.
Generation Stores also include sales tablets, which
help staff better serving our customers with more de-
tailed product and other sales related information.
Sales tablets are currently in operation across 111
shops in 35 countries.
Red By Dufry, our customer loyalty program, is now
accessible to an increased customer community in 239
locations across 48 countries. In addition, we have
expanded the number of services and benefits for cus-
tomers by engaging with airport and brand partners
around the world. At the end of 2020, Dufry’s CRM
database included over 5 million customers – a data-
base we intend to expand further in 2021 and beyond.
Ongoing
footprint expansion.
Furthermore, shops in Stansted (UK), Corfu, Mykonos,
Thessaloniki (GR), Antalya (TUR), Belgrade (SRB), Nash-
ville (US), Macao (MO) and Fortaleza (BRA) among
others, have seen refurbishments as a proven method
to sustainably drive sales in existing locations. Total re-
furbishments in 2020 amounted to 12,800 m² or close
to 3 % of overall retail space operated by Dufry.
With respect to future growth opportunities, Dufry
had at year-end already signed contracts for an addi-
tional 8,000 m2 of retail space to be opened in 2021
and was considering a project pipeline of 31,500 m2.
Digital strategy to drive sales further expanded
The deployment of the digital strategy contributes to
attract more customers to the shops, increases sales,
and ideally complements the physical shops and tra-
ditional strong impulse buying behavior of our affluent
and captive audiences. Dufry’s digital strategy builds
on a multichannel approach to increase customer
touch-points and includes four key elements: the New
Generation Store concept, the Red By Dufry customer
loyalty program, the Reserve & Collect online order-
ing platform, and Dufry’s proprietary social media
channel, Forum by Dufry.
Within the expansion of the New Generation Store
concept, in 2020 we have further increased the num-
ber of highly digitalized shops to 50 locations, which
complement the existing 13 full-blown New Genera-
tion Stores already in operation. These shops commu-
nicate with customers in different languages and
adapt promotions and marketing campaigns to the
customer profiles and nationalities present at the spe-
cific airports at any given time of the day, The New
Our Reserve & Collect service, allowing customers to
order online and pick-up their purchases when depart-
ing or upon arrival, is increasingly used and is now
available in 175 airports in 44 countries worldwide.
Customers using Reserve & Collect tend to generate
higher ticket sales as compared to traditional average
in-shop sales.
Digital strategy
further accelerated.
In 2020, we have also evolved our social media channel
Forum by Dufry, which is now available in 4 languages,
connects all of our digital dots and adds emotion and
experience with content provided by brands, bloggers
and influencers, highlighting the attractiveness of the
travel retail channel.
Valuable marketing intelligence
and customer insights
In previous years, Dufry has considerably extended its
market research and has done even more so in 2020,
as the anticipation of customer behavior and expecta-
tions are key. This year’s surveys have provided valu-
able and reassuring insights confirming the resilience
of the business.
Reassuring
customer insights.
With respect to the short-term behavior and the con-
fidence of customers to travel, we have received clear
indications in the fourth quarter that 48 % of custom-
ers already had a flight booked for the next 6 months,
coupled with an increasing confidence that the trip will
happen – this includes increasing confidence among
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DUFRY ANNUAL REPORT 2020
business travelers as well. With respect to shopping
habits, we have seen the fundamental trends towards
exclusive items, novelties, gifts and local products re-
inforced, alongside customers’ ongoing interest in
finding great deals through attractive discounts.
Confident outlook for the resilience of our business
With the successful financing measures implemented
in 2020, the support of Dufry’s existing and important
new shareholders, the finalization of its reorganization
and restructuring and the financial and managerial
flexibility to engage in strategically relevant initiatives
and growth opportunities, Dufry is well positioned to
drive recovery and growth acceleration beyond the
current crisis. Moreover, marketing research, con-
ducted by the company in the second and fourth quar-
ters, confirms the propensity of customers to travel
and their confidence and willingness to shop in duty-
free locations. Combined with the secular passenger
growth, these are reassuring indications for the fun-
damental resilience of the travel retail industry and
the company.
Thank you
First of all, I want to thank our customers, who despite
the challenging travel conditions experienced this year
have continued to visit our shops, appreciating our of-
ferings and generating sales and thus directly support-
ing the company. The trust we have received from over
150 nationalities we serve every day is very encourag-
ing and we will continue to refine our product assort-
ments and services, to ensure that any visit made to
one of our stores is a memorable experience.
More than ever, my immense gratitude for ongoing
motivation and dedication goes to our employees and
management teams for their extraordinary efforts, in
supporting the restructuring, negotiating with our
business partners and securing the financial strength
of the company, which ultimately has created the solid
and resilient base on which we can build going forward.
This impressively demonstrates the strong level of em-
ployee engagement and commitment to Dufry.
On behalf of the whole company, we also want to re-
member the colleagues we have sadly lost and their
families, while wishing any colleagues who suffered
with the virus a swift and full recovery.
I also want to thank our suppliers, landlords and busi-
ness partners for their renewed support and their will-
ingness to find mutually beneficial solutions to jointly
overcome the current crisis in a spirit of true partner-
ship. We have clearly seen that the common success
of all industry players in travel retail is highly depen-
dent on strong collaboration, which I look forward to
fostering even more going forward.
Last, but not least, I thank our Board of Directors and
our shareholders for their ongoing support, trust and
contributions in making Dufry even more WorldClass.
WorldWide.
Best regards,
Julián Díaz González
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16
OUR ORGANIZATIONAL STRUCTURE – GLOBAL EXECUTIVE COMMITTEE
AS OF JANUARY 1, 2021
Group Chief Executive Officer
Julián Díaz González
Chief Executive Officer Operations
Eugenio Andrades
Chief Financial Officer
Yves Gerster
Global Chief Corporate Officer
Luis Marin
Group General Counsel
Pascal Duclos
Chief Commercial Officer
Andrea Belardini
Chief Organization & Transformation Officer
Salvatore Aricò
Chief Executive Officer North America
Roger Fordyce
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BOARD OF
DIRECTORS
MEMBERS
Julián Díaz
González
Juan Carlos
Torres Carretero
Claire
Chiang
Jorge
Born
Heekyung
Jo Min
Lynda
Tyler-Cagni
Ranjan
Sen
Steven
Tadler
Mary J.
Steele Guilfoile
Luis Maroto
Camino
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1 Management Report
DUFRY ANNUAL REPORT 2020
Julián Díaz
González
GLOBAL
EXECUTIVE
COMMITTEE
MEMBERS
Yves
Gerster
Eugenio
Andrades
Luis
Marin
20
José Antonio
Gea
Until December 31, 2020
Salvatore
Aricò
As of January 1, 2021
Andrea
Belardini
Pascal C.
Duclos
Roger
Fordyce
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DUFRY ANNUAL REPORT 2020
DUFRY’S
INVESTMENT
CASE
GLOBAL
MARKET
LEADER
GLOBALLY
DIVERSIFIED
CONCESSION
PORTFOLIO
Most diversified travel retailer
with operations on all six continents,
covering 64 countries and over
430 locations.
Geographic diversification allows
Dufry to capture global growth trends
of the travel retail industry, which in
most cases help mitigate potential
local events.
430 Over
UNIQUE CUSTOMER
ACCESS FOR
GLOBAL BRANDS
430 locations
operated
by Dufry
worldwide
Global player, with over 2,300 shops operated in
64 countries on six continents.
Offering global brands a unique market access
and window display.
Close to 20 % market share in airport retail and
11 % market share in travel retail across all channels
pre-COVID. Increasing market power, even in a
COVID-19 battered market environment.
STRONG
RELATIONSHIPS
WITH LANDLORDS
AND AIRPORT
AUTHORITIES
Dufry is a reliable partner delivering
outstanding results for landlords
through a vast offering of unique shop
concepts and commercial initiatives.
22
6 YEARS
6 years of remaining
average concession
lifetime, across a highly
diversified portfolio.
CAPTIVE AND
AFFLUENT CUSTOMER
BASE ENHANCED
THROUGH
DIGITALIZATION
Travel retail and Dufry benefit from a growing
captive customer base with above average
spending power.
The ongoing digitalization of the business allows
to considerably increase customer touchpoints
and engagement, thus benefitting customer
conversion and spending.
STRONG EQUITY
FREE CASH FLOW
GENERATION
CAPABILITY
The company’s track record
clearly underlines, how the low
capital intensity of the business
allows for strong cash genera-
tion and fast deleveraging under
normal operating conditions.
Strong cash conversion further
supported by re-organization
and successful implementation
of significant structural savings.
LONG-TERM
CONCESSION
PORTFOLIO
Long-term concession portfolio
further enhanced through new important
concessions, such as in Turkey and Russia.
GROWTH
ACCELERATION
IN ASIA
Important JV with Alibaba Group
formed to operate travel retail in China.
Further expanding footprint in fastest
growing market globally, with first
projects already started in Hainan in
Q1 2021.
GLOBAL
“PURE PLAY”
IN A LONG-TERM
GROWING
INDUSTRY
Company growth driven by both
M & A opportunities and organic
growth fueled by fundamentally
increasing passenger numbers
and net new concessions.
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OUR
STRATEGY
LONG-TERM
SUSTAINABLE AND
PROFITABLE GROWTH
For a glossary of financial terms and
key performance indicators please see
page 239 of this Annual Report.
Dufry is the leading global player in travel retail and,
despite the short-term and COVID-related operational
challenges, will continue to develop the company fol-
lowing its long-term successful strategy of sustainable
and profitable growth and building on its track-record
of rapid expansion through organic growth and acqui-
sitions. The same is true for travel retail in general,
which is seen as a resilient industry despite the current
turbulence generated by the pandemic. In 2019, under
previous normal market conditions, Dufry had a mar-
ket share of 11 % in travel retail overall, and close to
20 % in airport travel retail, which accounted for 88 %
of our business.
Fostering retail excellence
to create stakeholder value
Travel retail is the connecting and central element of
three very important industries: retail, travel and lei-
sure locations, as well as consumer goods brands. Link-
ing and aligning the different expectations of our stake-
holders is critical in order to generate value for all. Our
strategy to achieve this goal: we focus on offering the
best services to our customers to create profitable and
sustainable growth for all our stakeholders.
Our clear travel retail focus, where we mostly concen-
trate on locations with captive audiences, creates a
winning formula for all stakeholders of the Dufry eco-
system. For customers, by providing an unrivalled
shopping experience; for suppliers, by showcasing their
brands to a fast-growing group of affluent customers;
for landlords, by fully exploring the commercial poten-
tial of a travel or leisure location; for shareholders, by
creating long-term value through generating cash and
profits and for employees and local communities, by
creating job opportunities and wealth. For an overview
of the Dufry stakeholder eco-system please refer to
page 72.
For our customers, we create memorable shopping
experiences by constantly improving our shops and
developing best-in-class retail formats, as well as by
implementing innovative cross-channel marketing ini-
tiatives and extending our online services, allowing us
to increase customer engagement. Our sales repre-
sentatives will always receive travelers with a friendly
smile, introducing them to the world of travel retail
and providing them with detailed product information
– increasingly supported by digital technology.
Unique experiences
to exceed customer
expectations.
Besides offering customers great promotions, novel-
ties and the exclusive products they are always look-
ing for, an unparalleled sense of place is, for Dufry, a
key element of an attractive customer shopping expe-
rience. This includes local product offerings, as cus-
tomers also increasingly want to complete their travel
experience by bringing home memories, as well as in-
ternationally recognized brands that are well known
and much liked. Our shops combine the famous assort-
ments of global brands and high-quality products with
a special local touch, which differentiates our shops
worldwide and wherever they may be – at airports, sea-
ports, ships, railway stations and also in downtown or
border locations – and irrespective of whether they are
duty-free or duty-paid. For a selection of our main re-
tail concepts please refer to pages 30 through 39 of
this report.
Demographics play a big role in our business and
changes in customer profiles and preferences can oc-
cur rapidly. For this reason, Dufry sets high priority on
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DUFRY ANNUAL REPORT 2020
consumer intelligence, extrapolated from internal op-
erational information, regular customer field surveys
and external research. This permanent tracking of
customer behavior is the base against which to con-
tinuously fine-tune our offering, not only matching,
but exceeding expectations of our clients.
For suppliers we offer access to the largest footprint
in the ever more attractive travel retail channel,
through more than 2,300 of our shops in over 430 lo-
cations in 64 countries, further supported by our
growing digital footprint. Our shops offer suppliers an
unrivalled worldwide opportunity to promote their
brands and products, reaching an affluent consumer
segment and allowing them to purchase their prod-
ucts at our various locations.
In recent years, we have seen an increasing impor-
tance in novelties, exclusive products and limited edi-
tions to attract customers to our shops. Despite some
short-term shift and the growing importance of food
and convenience products related to the faster accel-
eration of domestic travel during the COVID-19 pan-
demic recovery, the long-term interest to find new and
unique products and experiences is maintained. Dufry
works closely with brands to offer customers a unique
product selection and brand experiences, which make
the channel even more attractive.
Novelties and
exclusive products
confirmed as
important trend.
Landlords get the highest productivity from their re-
tail areas, maximizing their revenues when working
with Dufry. We offer a full range of retail concepts
adapted and customized to any specific location, com-
plemented by the most comprehensive portfolio of
global and local brands. We enable landlords to offer
their travelers attractive commercial spaces, thus in-
creasing revenues from non-aeronautical sources and
further optimizing their overall business performance.
For shareholders, Dufry is the world’s leading global
travel retailer, offering an attractive investment op-
portunity to participate in a growing industry and a
company that focuses on profitable growth and strong
GLOBAL PRESENCE
A full list of locations is available
on pages 56 and 57.
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DUFRY ANNUAL REPORT 2020
cash generation. Despite the current challenging busi-
ness environment, travel retail is a structurally resil-
ient growth industry with a proven track-record. For
further information on our equity story, please refer
to section Investors on page 66.
Business diversification maximizes opportunities
and mitigates risks
Diversification has always been a fundamental element
of our strategy for a number of reasons, which con-
tribute considerably to minimizing risks and providing
consistent growth opportunities. In our understanding,
diversification includes aspects such as geographies,
market sectors, channels as well as, ever increasingly,
also digitalization.
Geographic diversification is the best way to benefit
from the ever-growing number of travelers worldwide,
as we can leverage the captive audiences in our loca-
tions. Our global presence also allows us to evaluate
thoroughly the opportunities of new projects in any
location by capitalizing on the expertise of our local
teams. Their clear understanding of the local market
characteristics forms the foundation for a close col-
laboration with landlords and other local business
partners, to effectively develop new businesses.
Our wide geographic footprint in 64 countries and the
fine-meshed network of locations and shops is also a
unique marketing asset we can offer our brand part-
ners. It allows them to engage directly with a growing
number of customers through a window display in and
access to any given mature or emerging market.
Today, Dufry is not only the global market leader in
travel retail, but also by far the most diversified player
in the industry.
Furthermore, geographic diversification considerably
mitigates risks generated by external impacts in sin-
gle markets or regions. This has been widely proven in
2020, when our global footprint mitigated the impacts
of geographically differing restrictions and contain-
ment measures associated with the pandemic. Fur-
thermore, Dufry has limited exposure to single con-
tracts as best illustrated by the share of individual
concessions in the Group. With the largest concession
accounting for around 6 % of our business, and with
the ten biggest representing less than 25 % of 2020
sales.
Diversification by channel and sector widens the
scope of the company providing access to additional
customer groups and behaviors. In this context, the
cruise and ferry businesses, train stations, and also
border shops and downtown locations such as hotels,
casinos and leisure resorts are gaining in importance.
Diversification:
by geography,
by channel, by sector
– and digitally.
On the duty-free side, the airport channel is expected
to continue to be the largest and fastest growing part
of our business. We continue to see additional poten-
tial in further developing the cruise ship and ferry
business, duty-free border shops – currently mostly
in South America – and downtown duty-free shopping
in selected markets, mainly in Asia, where this type of
operation is particularly popular, due to specific local
regulations.
Cruise lines offer an attractive channel to engage with
customers during a longer time period, and ferries
have been quite resilient even throughout the current
crisis. Despite the momentary challenges the cruise
business is experiencing, we are convinced that this
type of vacation will continue to be “en vogue” in the
long-term.
The duty-paid sector also has considerable develop-
ment potential in airports, since the expected growth
of domestic passengers – including intra-EU travel –
is similar to that for international travelers. In the
2020 recovery phase of the pandemic, this sector has
temporarily gained over-proportional importance as
domestic travel and flying – due to less travel restric-
tions – has picked up faster than international travel.
Furthermore, this sector is fragmented even more
than duty-free, thus offering attractive new expansion
opportunities.
The newest development within duty-paid is the new
concept store ANECDOTE opened at The Circle at
Zurich Airport in November 2020, which offers travel-
ers and residents of the Greater Zurich area a vast va-
riety of global brands and local premium labels at fan-
tastic prices. The assortment covers all core categories
such as perfume and cosmetics, food and confection-
ery, wines and spirits, sunglasses as well as fashion,
accessories and convenience. We also continue fos-
tering the expansion of our successful duty-paid re-
tail concepts, Hudson and Dufry Shopping which are
already implemented in several markets and have po-
tential for further deployment. Hudson is a well-estab-
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DUFRY ANNUAL REPORT 2020
lished convenience store concept that has been very
successful in North America over the past 30 years
and which, since 2009, we have deployed in 17 coun-
tries world-wide such as Italy, Switzerland, Brazil, UK
and China among others. Dufry Shopping is a duty-
paid concept that offers a high-quality assortment of
international brands in an exclusive setting, similar to
a duty-free travel retail store, but targeting domestic
passengers.
We originally piloted Dufry Shopping in Brazil in 2014,
expanding to 7 locations across the country and the
immediate success has led us to a strategic decision
to roll out this concept into other countries. The first
Dufry Shopping store outside Brazil opened in 2017 at
Las Vegas McCarran International Airport. This was
followed by the Malta Dufry Shopping in 2018 and by
the contract signed in 2019 with Newark Liberty Inter-
national Airport for a new Dufry Shopping, and the
newest shop in Salt Lake City, which both opened in
2020. Also in 2020, we further opened Dufry Shopping
stores at the Fortaleza airport in Brazil and at Odessa
airport in Russia. Based on the positive results with 13
Dufry Shopping locations in 4 countries so far, we are
convinced that this concept can be successfully rolled
out to other markets globally.
Accelerating digitalization
Digitalization is the newest form of diversification and
it will change the way business is done in travel retail.
Its characteristics, which allow to considerably in-
crease customer engagement cross-channel, cross-
geographies and cross-sector, and to serve customers
from when they plan their trip to the moment when
they return home, are a great asset. Implementing dig-
italization not only means at the shop front, but also
with respect to the whole back-office and support
area of the company, where digitalization opens new
opportunities to simplify processes and increase
efficiency. The recently announced joint-venture with
Alibaba will further accelerate our digital initiatives
and shows how these types of partnerships will shape
the future of travel retail.
Growing opportunities
of digitalization.
sales. For Dufry, digitalization is and remains a key
element of our strategy, which supports and evolves
a strong business model to the next level and contin-
uously improves our offer to the travelers we welcome
in our shops.
Normally customers come to our stores while they are
waiting to board their plane or train, or while they
enjoy their stay on a ferry, cruise liner, in a casino or
hotel. They enjoy strolling through the attractive retail
spaces and take away memorable shopping experi-
ences. Sales are often generated by impulse decisions
and/or immediate needs, which protect travel retail
from the direct competition of online platforms. To at-
tract more customers to our stores we want to provide
a superior customer experience and in addition, create
further value through a more efficient business. Thus,
the use of digital and online technology is changing our
business in three major areas: how we engage with our
customers, how we sell products, and how we organize
our processes internally and in the value chain.
Specifically, this means that we will be further increas-
ing personalized digital communication with custom-
ers at home, during their whole journey, and in partic-
ular when they are at the airports close to our shops.
We are also digitalizing the shops to increase conver-
sion rates and to simplify in-store processes, focus-
ing on areas such as product consultations, payments,
locations-specific promotions etc. Finally, we will fur-
ther improve customer service and individualize prod-
uct offers for specific customer profiles, based on
advanced research and data analytics facilitated by
digital tools.
Financial discipline focusing on returns
At Dufry, we have a disciplined financial approach to
all our projects, be they organic or acquisitions. We
carefully analyze every project or significant invest-
ment with detailed projections and with a focus on
minimum return requirements. This includes a careful
assessment of the initial investment needed to build
and set up the stores as well as the cost structure,
profitability and cash flow generation of the business
once it is operational and over time. This culture of
giving importance to returns and cost control has
allowed us to grow our business profitably and capture
opportunities in many different markets.
At Dufry, we are excited about the possibilities and op-
portunities these new technologies offer. In the past
three years, we have successfully built and deployed
our digital platforms, which allow us to engage more
frequently with customers and to provide them with
additional services, with the ultimate goal of driving
As part of our financial risk management, we minimize
business risks by implementing a highly variable cost
structure. These defensive characteristics help to pro-
tect the business in case of downturns, which are
usually local and temporary, thus providing a solid and
resilient profile. The outbreak and spread of the
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DUFRY ANNUAL REPORT 2020
COVID-19 pandemic in 2020 and the company’s abil-
ity to react fast with the adaptation of the company
and cost structure to the new market challenges, is an
impactful example of the highly variable degree of our
cost structure.
Resilient cash
flow generation.
Dufry’s typically strong cash generation capacity is a
combination of the company’s usually solid profitabil-
ity and the low capital intensity of our business. Pre-
pandemic and based on the 2019 business perfor-
mance, Dufry would expect to further improve its cash
generation capacity in line with top-line growth. Post
full recovery and going forward, we are confident that
cash generation capacity will continue to be one of the
key drivers of our strategy implementation, and will
even accelerate based on the structural measures
taken.
Organic growth complemented by acquisitions
Dufry’s fundamental growth strategy continues to be
characterized by a combination of organic growth as
well as M&A opportunities with increased visibility on
the pace of recovery. Although, the current COVID-19
pandemic might slightly delay some expansion proj-
ects from a landlords’ perspective in the short-term,
travel retail remains a resilient industry on a mid- to
long-term horizon, and we expect to see further growth
and partnership opportunities going forward.
With respect to organic growth, the travel retail indus-
try has the unique advantage of benefitting from a
secular increase of travelers around the world and of-
fering the great opportunity to directly engage with
them. This characteristic clearly differentiates travel
retail from any other retail channel. Consequently,
organic growth will continue to be an important driver
of Dufry’s development going forward. We will focus
on driving sales through implementing best-in-class
shop concepts in duty-free and duty-paid, by further
deploying our digital strategy and by evolving the
proven marketing and promotional activities we have
used and fine-tuned over the years. Besides benefit-
ting from additional passengers in line with regional
developments, we expect to further increase our retail
space, be it through expansion in existing locations or
by winning new contracts in airports and alternative
channels. A specific focus will be on growth acceler-
ation in Asia, with first projects being implemented in
Hainan in 2021 already, based on the JV with Alibaba
Group and the collaboration agreements with Hainan
28
Development Holdings. Specific to the US market, the
scope of alternative channels also includes F & B shops,
as this segment is of great importance for North
America and represents a synergy potential for our
existing travel retail footprint. At Dufry, we tradition-
ally maintain a sizeable project pipeline, allowing us to
grow our retail space in different channels, regions and
sectors.
Offering the best retail experience for international
and domestic travelers in multiple channels, Dufry
currently generates about 56 % of its revenues in duty-
free and 44 % in duty-paid operations, with both sec-
tors continuing to offer further, substantial growth
opportunities.
Long-term passenger
growth remains a key
driver in travel retail.
Despite the consolidation seen in travel retail over the
last years, the industry remains relatively fragmented,
with the top 10 players controlling just over half of the
market and the remaining market consisting of small
and medium-sized operators. We expect to be able to
capitalize on M&A, with a focus on Asia and on F&B or
by complementing our presence in other existing mar-
kets. Furthermore, the joint-venture with Alibaba
Group to partner in the Chinese travel retail market is
promising to drive our growth in Asia and with Chinese
customers worldwide, while also accelerating our dig-
italization through the extensive know-how in this
area, which Alibaba can contribute.
The full reintegration of our Hudson subsidiary, previ-
ously listed at the NYSE and completed in the fourth
quarter 2020, will not change the overall group strat-
egy from an operational perspective. With respect to
North America we will continue to expand our foot-
print with duty-free and duty-paid operations comple-
mented by airport F&B. You can find out more about
the North American region on page 52.
Long-term industry fundamentals remain strong
despite short-term challenges
While in 2020 tourism and travel were heavily impacted
by the spread of the pandemic, we have also seen
encouraging behaviors from passengers around the
world, who have resumed travelling as soon as restric-
tions were lifted. This is an important indication that
the fundamental resilience of travel retail is unchal-
lenged and that the industry will confirm its attrac-
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DUFRY ANNUAL REPORT 2020
tiveness as a growing retail channel featuring its own
growth dynamics, which are not comparable with high
street retail.
While visibility on the travel pattern recovery remains
low, pre-pandemic, external industry specialists such
as Air4Cast estimated global passenger numbers to
grow by around 4 % per annum, which translates to a
potential of over 300 million new customers for the
industry every year. This underlying growth potential
is further increased by the development of innovative
commercial concepts with landlords and brands, as
well as Dufry’s acceleration of its digitalization to drive
change in the way travel retail evolves. We believe that
being the global market leader also means being at the
forefront of this development.
29
GENERAL
TRAVEL
RETAIL
SHOPS
The general travel retail shop is the most
commonly used concept at Dufry, covering
the full range of categories, such as per-
fumes & cosmetics, food & confectionery,
wines & spirits, watches & jewelry, fashion &
leather, tobacco goods, souvenirs and elec-
tronics and others.
General travel retail shops carry a large
product assortment and are typically
located in central areas with high passenger
flow, mostly in airports, but can also be
in seaports and other locations. In airports,
both departure and arrival areas can be
fitted with this shop concept. In the duty-
free segment, these shops can be identi-
fied by carrying the name of several retail
brands in our portfolio, including Dufry,
Nuance, World Duty Free, and Hellenic Duty
Free among others, or a name combina-
tion linking to the specific location, such as
Zurich Duty-Free or Stockholm Duty-Free.
As of December 31, 2020, Dufry operated
over 945 general travel retail shops.
In 2017, Dufry introduced the new genera-
tion store concept, increasing customer
communication through digital technology,
with the first three stores opened in
Madrid (Spain), Melbourne (Australia), and
Cancun (Mexico), followed by four in Zurich
(Switzerland), a second one in Cancun
and one in Heathrow T3 (UK) in 2018. In 2019,
Dufry added 4 new generation stores: in
Buenos Aires (Argentina), Amman (Jordan),
Malaga and Alicante (Spain). In 2020, the
number of highly digitalized shops which
included specific elements of the new gen-
eration store, was increased to 50.
30
31
DUFRY
SHOPPING
Dufry shopping offers domestic passengers
a similar shopping experience to the one
offered to international travelers in a classic
general travel retail duty-free shop, but
in a duty-paid environment instead, with a
wide assortment of different product cate-
gories and including a similar brand variety.
In this context, Dufry Shopping fulfills
more of a convenience aspect as there are
a number of countries where domestic
travelers account for the majority of pas-
sengers, specifically in large countries
such as China, the United States and Brazil,
where this concept can offer additional
potential.
The concept was first introduced in Brazil
in 2014 and was quickly expanded to 7
other locations in the country. The concept
is also present in the United States with
a Dufry Shopping store at Las Vegas
McCarran International Airport and at
Malta International Airport. The newest
Dufry Shopping stores were opened
in 2020 at Newark Liberty International
and the Salt Lake City airports in the
U.S. as well as at the Fortaleza and Odessa
airports in Brazil and Russia respectively.
32
33
BRAND
BOUTIQUES
Dufry is a partner of choice for global
brands to showcase their products in dedi-
cated retail spaces and to mirror their high
street image. To best meet each location’s
traveler profile, we design these shops as
standalone boutiques or integrate them as
a shop-in-shop in our general travel retail
stores. Brand boutiques exist in both duty-
free and duty-paid areas and enhance the
traveler’s experience, allowing the creation
of an exciting shopping mall environment.
As of December 31, 2020, Dufry operated
close to 216 brand boutiques, such as:
Armani, Burberry, Bally, Bottega Veneta,
Bvlgari, Cartier, Clarins, Chloe, Coach,
Ermenegildo Zegna, Etro, Gucci, Hermès,
Hugo Boss, Jimmy Choo, Jo Malone
London, Lacoste, LaPrairie, Lindt, Loewe,
Longchamp, MAC, Mango, MaxMara,
MCM, Michael Kors, Montblanc, Omega,
Polo Ralph Lauren, Salvatore Ferragamo,
Swatch, Swarovski, Tod’s, Tory Burch,
Tumi, Versace, Victorinox, Victoria’s Secret
and others. See also a selection of brands
on page 63.
34
35
CONVENIENCE
STORES
Our convenience stores offer a wide product
assortment that passengers may want
or need when traveling. The range includes
soft drinks, confectionery, packaged food,
travel accessories, electronics, personal
items, souvenirs, newspapers, magazines
and books. Within this concept, we use
different brands according to the passenger
profile and the location. North America
is home to most of our convenience stores,
with more than 583 shops. In addition, we
operate 94 convenience stores outside
North America.
“Hudson” is our most important brand in the
convenience segment with strong customer
recognition and it is highly valued by pas-
sengers. As “The Traveler’s Best Friend”, our
goal with Hudson is to provide passengers
with anything they may need during their
journey.
Hudson is a successful, very flexible concept
operated at airports within international
and domestic areas, as well as in other
channels such as railway stations and other
transit locations. Hudson shops are care-
fully designed and facilitate orientation
through whimsical, color-coded signage to
attract customers’ attention to four distinct
selling areas: Media, Marketplace, Essen-
tials and Destination.
36
37
SPECIALIZED
SHOPS
Specialized shops and theme stores are
shop concepts that offer products from a
variety of different brands, belonging to
one specific product category or which
convey a sense of place. We often use this
concept for products such as watches &
jewelry, sunglasses, electronics, spirits, food
and destination products, in locations
where we see potential for a shop to carry
a broad product range relating to one
specific theme. These shops can be located
in airports, seaports and on-board cruise
liners, as well as in hotels or downtown
locations.
Examples of the shop concept names
include “Colombian Emeralds International”,
a dedicated watches & jewelry format
used in the Caribbean market; “Kids Works”
with its wide selection of toys, dolls, games,
books and apparel for children and “Tech
on the Go”, focusing on the needs of the
tech-oriented traveler offering electronics
and accessories. Further examples are
“Sun Catcher” for sunglasses; “World of
Whiskies” and “Tequileria” for a selection
of finest single malt or blend whiskies
and tequilas; “Master of Time” for luxury
watches and jewelries; “Temptation” and
“Timebox” for fashion watches and acces-
sories; “Sound & Vision” for multi-brand
electronics; “Travel Star” for luggage
and travel essential products and finally
“Atelier”, a women’s leather accessories
store.
As of December 31, 2020, Dufry operated
close to 520 shops under the Specialized
Shops / Theme Stores concept.
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EUROPE,
MIDDLE EAST
AND AFRICA
UK & GERMANY
GERMANY
UNITED KINGDOM
SOUTHERN EUROPE
ITALY / MALTA
PORTUGAL / SPAIN
MEDITERRANEAN, EASTERN EUROPE & MIDDLE EAST
ARMENIA / BULGARIA / GREECE
INDIA / JORDAN / KUWAIT
SERBIA / SRI LANKA / TURKEY
UNITED ARAB EMIRATES
CENTRAL & NORTH EUROPE, RUSSIA & AFRICA
CAPE VERDE / COTE D’IVOIRE / EGYPT
FINLAND / FRANCE / GHANA
KAZAKHSTAN / KENYA / MOROCCO
MOZAMBIQUE / NIGERIA
RUSSIA / SWEDEN / SWITZERLAND
40
1 Management Report
DUFRY ANNUAL REPORT 2020
Dufry’s largest region expands country line-up
Following the reorganization announced in June 2020,
aimed at aligning the company to the new business
environment and to increase efficiencies, several
countries were regrouped within the former divisions*.
The largest Dufry region, which continues to be head-
quartered in Madrid, saw its scope increasing further,
now reaching 31 countries with the transfer of the
Eastern European and Middle Eastern locations, as well
as India and Sri Lanka operations.
In 2020, turnover in the region reached CHF 1,144.5 mil-
lion as compared to CHF 4,434.2 million in the previous
year, equal to an organic growth performance of
– 73.2 %. The region was impacted by the COVID-19
pandemic since the beginning of the spread from mid-
February onwards. Performance improved only as of
July and August across most locations in Europe, and
especially in Southern Europe at the beginning of
August with the peak of the summer holidays and sup-
ported by the lifting of travel restrictions. From end
of August onwards, some countries like Spain, France,
Italy and the UK saw increasing COVID-19 cases and
renewed travel limitations put in place more broadly
across Europe starting end of September. Parts of the
Mediterranean area as well as Eastern Europe, Russia
* Note: 2019 division-related historical data allowing comparison of
the performance of the former and current organizational setups is
available on the Dufry website: https://www.dufry.com/en/media/
download-center?field_download_categories_target_id=106
and the Middle East remained less impacted by renewed
travel restrictions and performed above average for the
region.
The major business development events in the region
were the new twelve-year concession won at Istan-
bul’s Sabiah Gökçen airport in Turkey which started
operation in November 2020 covering a retail space of
3,900 m2, as well as the successful seven-year exten-
sion of the Pulkovo airport contract in St. Petersburg,
Russia. Both the new concession in Turkey and the ex-
tension in Russia further consolidate Dufry’s position
in these two important tourist destinations.
In the region, Dufry opened gross new retail space of
6,296 m2 such as in Helsinki (FIN), Odessa (UKR) and
Zurich (CH), where the new ANECDOTE conceptual
store at The Circle at Zurich airport was inaugurated
in November.
With respect to refurbishments, the region saw impor-
tant shop renovations in Greece at the Athens, Corfu,
Mykonos and Thessaloniki airports, as well as at our op-
erations in London (UK), Belgrade (SRB) and Antalya
(TUR). The total refurbished retail space in the region
amounted to 7,241 m2.
PORTION OF TURNOVER 2020
KEY REPORTED DATA 2020
GLOBAL
DISTRIBUTION
CENTERS
NORTH
AMERICA
Number of shops
Sales area in m²
Employees in FTE
787
215,373
9,924
45 % EUROPE,
MIDDLE EAST
AND AFRICA
CENTRAL
AND SOUTH
AMERICA
ASIA PACIFIC
TURNOVER
1,145
IN MILLIONS
OF CHF
41
1
1
1
ZURICH | THE CIRCLE AT ZURICH AIRPORT
Dufry opened ANECDOTE conceptual store to serve both
travelers and customers from the Greater Zurich Area.
ZURICH | ZURICH AIRPORT
Dufry updated its Zurich Airport´s T2 arrival store of
over 660 m2.
42
3
2
ISTANBUL | SABIHA GÖKÇEN INTERNATIONAL AIRPORT
Dufry started operating 3,900 m2 of duty-free and specialty
shops in Istanbul´s city center´s closest hub.
3
LONDON | LONDON HEATHROW TERMINAL 5
Dufry is home to world famous makeup artist Char lotte
Tilbury´s first counter in air port trav el re tail world wide.
2
43
1 Management Report
DUFRY ANNUAL REPORT 2020
ASIA
PACIFIC
44
AUSTRALIA CAMBODIA CHINA INDONESIA MALAYSIA SINGAPORE SOUTH KOREA
1 Management Report
DUFRY ANNUAL REPORT 2020
Focusing on the important strategic growth region
Asia Pacific remains Dufry’s most important strategic
growth region. With the company reorganization, the
Middle Eastern countries, formerly included in this
division, were re-allocated to the Europe, Middle East
and Africa region*. Asia Pacific continues to account
for the highest prospective passenger growth globally,
while also offering considerable cooperation and M&A
opportunities, created by the high industry fragmen-
tation that continues in local markets. Dufry is already
one of the most international travel retailers in this in-
teresting region and features a large number of oper-
ations in individual countries. Headquartered in Hong
Kong, the region manages 15 locations in 7 countries,
with a total sales area of 22,874 m2.
Turnover in the region reached CHF 160.0 million in
2020 as compared to CHF 691.6 million in the previous
year, equal to an organic growth of – 75.4 % as Dufry’s
footprint is geared towards international travel, which
has been highly impacted by travel restrictions in
2020. The majority of shops in Dufry’s Asia Pacific lo-
cations were closed during most of the year, including
Australia, Cambodia, Indonesia, Singapore and South
Korea. On the positive side, China recovered more
strongly driven by a significantly increasing demand in
* Note: 2019 division-related historical data allowing comparison of
the performance of the former and current organizational setups is
available on the Dufry website: https://www.dufry.com/en/media/
download-center?field_download_categories_target_id=106
domestic travel since the second quarter, thus bene-
fitting Dufry and its portfolio of duty-paid operations.
Among its business development initiatives, the region
signed important joint-ventures, which open new
opportunities for the travel retail channel as well as
the acceleration of Dufry’s digital transformation. The
highlight is the joint-venture with Alibaba to further
develop travel retail in China, as well as to accelerate
business digitalization with online services across the
Dufry Group. In this context, the collaboration with
Hainan Development Holdings for the opening of the
Global Duty Free Plaza shop at the Mova Mall in Haikou
is an important first step. The new downtown duty-
free shop will span over 38,920 m2 across two build-
ings of the Mova Mall, Aquarius and Capricorn, will be
completed in 3 phases and the first phase was opened
right on time for the Chinese Spring Festival in 2021.
In 2020, Dufry inaugurated new shops in Perth (AUS)
as well as the new confectionery concession at Singa-
pore’s Changi airport – won in late 2019 – to operate
four new shops in the Terminal 2 departure hall with a
total sales area of 563 m2. The refurbishment of the
Macau operation completed the business development
scope of the region.
PORTION OF TURNOVER 2020
KEY REPORTED DATA 2020
GLOBAL
DISTRIBUTION
CENTERS
NORTH
AMERICA
CENTRAL
AND SOUTH
AMERICA
6 % ASIA PACIFIC
Number of shops
Sales area in m²
Employees in FTE
60
22,874
644
EUROPE,
MIDDLE EAST
AND AFRICA
TURNOVER
160
IN MILLIONS
OF CHF
45
1
1
1
HAINAN | GLOBAL DUTY FREE PLAZA AT MOVA MALL
The new Global Duty Free Plaza shop at Mova Mall in Haikou
was opened on 31 January 2021 and will cover 38,920 m2
of retail space once fully operational in Q1 2022.
46
3
2
2
MACAU | THE PARISIAN MACAO HOTEL
Temptation, the renovated 537 m2 beauty store inspired
by Parisian nights and the lights of the icon ic Eif fel tow er.
3
BUSAN | GIMHAE INTERNATIONAL AIRPORT
Dufry completed the refurbishment of its 640 m2 retail space
in Gimhae covering all main product categories.
47
1 Management Report
DUFRY ANNUAL REPORT 2020
CENTRAL
AND SOUTH
AMERICA
CENTRAL AMERICA & CARIBBEAN
CARIBBEAN
HONDURAS
MEXICO
SOUTH AMERICA
ARGENTINA
BOLIVIA / BRAZIL
CHILE / COLOMBIA
ECUADOR
PERU / URUGUAY
48
tion was the cruise line business, which remained heav-
ily impacted in the region. South America saw demand
pick up amid border shop openings and the increase
of domestic travel with duty-paid businesses perform-
ing better than duty-free operations.
From a business development perspective, new retail
space was added at the Florianópolis airport (BRA)
by opening a new 280 m2 shop, while the Guayaquil air-
port (ECU) operation saw a full refurbishment of its
retail space covering 1,100 m2.
1 Management Report
DUFRY ANNUAL REPORT 2020
Impacted by the pandemic only as of
the second quarter
Central and South America did not see any changes
within its scope of activities following the company re-
organization, as the number of countries remained the
same. This region comprises all operations in Central
and South America including the Caribbean, and while
Dufry has had for years a very strong market position
in some of the most dynamic travel retail markets in
the world, it continues to offer expansion opportuni-
ties across various channels. The region is headquar-
tered in Miami (USA) and runs operations in 106 loca-
tions across 24 countries covering a retail space of
130,527 m2.
In 2020, turnover came in at CHF 497.3 million as com-
pared to CHF 1,536.1 million one year earlier, with
organic growth reaching – 65.8 %. Overall, the region
was impacted with a slight delay, as the spread of the
COVID-19 pandemic reached this part of the world
only in the second quarter. Central America, including
Mexico, Dominican Republic and the Caribbean Islands
performed more robustly supported by intra-regional
travel from the USA and South America, especially
during the summer months, as well as continued de-
mand due to more flexible travel conditions. The excep-
PORTION OF TURNOVER 2020
KEY REPORTED DATA 2020
GLOBAL
DISTRIBUTION
CENTERS
NORTH
AMERICA
19 % CENTRAL
AND SOUTH
AMERICA
ASIA PACIFIC
Number of shops
Sales area in m²
Employees in FTE
497
130,527
3,933
EUROPE,
MIDDLE EAST
AND AFRICA
TURNOVER
497 IN MILLIONS
OF CHF
49
1
2
1
DOMINICAN REPUBLIC | GREGORIO LUPERÓN INT. AIRPORT
Dufry opened the expanded and refurbished store of
Puerto Plata with a total space of 1,140 m2.
2 FLORIANOPOLIS | FLORIANÓPOLIS INT. AIRPORT
Dufry expanded its presence in Florianopolis with the
opening of 280 m2 of additional duty-free spaces in both
departures and arrivals.
50
3
3 GUAYAQUIL | JOSÉ JOAQUIN DE OLMEDO INT. AIRPORT
Dufry innaugurated 930 m2 of refurbished duty-free space
in Guayaqyuil, Ecuador.
3
51
1 Management Report
DUFRY ANNUAL REPORT 2020
NORTH
AMERICA
52
CANADAUSA 1 Management Report
DUFRY ANNUAL REPORT 2020
Full re-integration of the subsidiary
While the North American business has not seen any
changes from its geographic scope, the major change
implemented in the context of the company reor-
ganization was the full reintegration of Hudson into the
Dufry Group, following the delisting of Hudson Ltd
from the New York Stock Exchange, completed in the
fourth quarter 2020. Strategically, Dufry will continue
to focus on duty-paid and duty-free travel retail as
well as airport food & beverage opportunities, as this
traditional core market of the company still offers
substantial additional avenues of growth. Moreover,
the full reintegration of Hudson is an important ele-
ment in Dufry’s goal to considerably reduce the com-
pany’s complexity through process simplification, and
ultimately generate sustainable efficiencies.
Turnover in North America amounted to CHF 644.4 mil-
lion as compared to the previous year’s CHF 1,935.8 mil-
lion, resulting in an organic growth of – 65.3 %. Through
the year, the region, especially the US, performed above
Group average due to the higher exposure to domestic
travel and steadily increasing passenger numbers fol-
lowing the first wave of the pandemic in Spring, as well
as the supportive intra-regional travel from the US to
Central America. Overall performance was driven by
Hudson convenience stores, food & beverage and
other duty-paid offerings. Canada, characterized by
its duty-free business, remained negatively impacted
due to a higher exposure to international flights and
ongoing restrictive measures. Headquartered in East
Rutherford, New Jersey, the region manages 1,014
shops across 101 locations in the United States and
Canada with a total sales area of 100,269 m2.
In 2020, the North America region saw its footprint
further expanding with shop openings in Indianapolis,
Boston, Phoenix and Calgary among others, adding
some 1,061 m2 of retail space across 11 shops. Moreover,
the region also further invested in its sales locations by
refurbishing 31 shops in important concessions such as
Los Angeles, New York and Nashville covering a retail
space of 3,478 m2.
PORTION OF TURNOVER 2020
KEY REPORTED DATA 2020
GLOBAL
DISTRIBUTION
CENTERS
Number of shops
Sales area in m²
Employees in FTE
1,014
100,269
2,866
25 % NORTH
AMERICA
EUROPE,
MIDDLE EAST
AND AFRICA
TURNOVER
CENTRAL
AND SOUTH
AMERICA
ASIA PACIFIC
644 IN MILLIONS
OF CHF
53
1
2
1
LOS ANGELES | LOS ANGELES INT. AIRPORT
Dufry completed the refurbishment of its iconic
100 m2 F.A.O. Schwarz toy shop in Terminal 5
of Los Angeles Int. Airport.
54
2 FLORIDA | FORT LAUDERDALE–HOLLYWOOD INT. AIRPORT
Fort Lauderdale saw the opening of the new 110 m2
Newslink store.
4
3
3
SAN FRANCISCO | SAN FRANCISCO INT. AIRPORT
Located in Terminal 2, Dufry completed the refurbishment of
its 185 m2 49 Mile Market store in San Francisco Airport.
4
NEW YORK | LA GUARDIA AIR PORT
Inspired by the New York City build ing sky lines, Dufry´s
new 110 m2 shop NYC Aglow wel comes trav el ers in with its
beck on ing store front, pro vid ing a sleek and mod ern
shop ping ex pe ri ence.
55
1 Management Report
DUFRY ANNUAL REPORT 2020
OVER 430 LOCATIONS WORLDWIDE
EUROPE, MIDDLE EAST
AND AFRICA
Armenia
Gyumri
Yerevan
Bulgaria
Burgas
Varna
Cape Verde
Boa Vista
Sal
Santiago
Cote d’Ivoire
Abidjan
Egypt
Cairo
Finland
Helsinki
France
Calais
Fort-de-France
Nice
Pointe-à-Pitre
Toulouse
Germany
Dusseldorf
Ghana
Accra
Greece
Aktio
Alexandroupoli
Anchialos
Araxos
Athens
Chania
Corfu
Doirani
Evzonoi
Heraklion
Igoumenitsa
Kafalonia
Kakavia
Kalamata
Karlovasi
Karpathos
Kastanies
Kastelorizo
Katakolo
Kavala
Kipoi
Kos
Krystallopigi
Limnos
Mertziani
Mykonos
Mytilini
Niki
Ormenio
Patras
Piraeus
Promachonas
Rhodes
Sagiada
Samos
Santorini
Skiathos
56
Symi
Thessaloniki
Zante
India
Bangalore
Ireland
Center Parks
Italy
Bergamo
Florence
Genoa
Milan Central
Milan Linate
Milan Malpensa
Naples
Piza
Verona
Jersey
Saint Peter
Jordan
Amman
Aqaba
Marka
Kazakhstan
Astana
Kenya
Nairobi
Kuwait
Kuwait City
Malta
Malta
Morocco
Agadir
Casablanca
Fez
Marrakech
Nador
Oujda
Rabat
Tanger
Mozambique
Maputo
Nigeria
Lagos
Russia
Moscow Domodedovo
Moscow Sheremetyevo
Moscow Vnukovo
St. Petersburg Pulkovo
Serbia
Belgrade
Nis
Spain
Alicante
Almeria
Asturias
Barcelona
Bilbao
Fuerteventura
Gerona
Granada
Ibiza
Jerez
La Coruna
La Palma (SPC)
Lanzarote
Las Palmas de
Gran Canaria (LPA)
Madrid
Mahon
Malaga
Murcia
Palma de Mallorca (PMI)
Reus
Santander
Santiago de Compostela
Sevilla
Tenerife Norte
Tenerife Sur
Valencia
Sri Lanka
Colombo
Sweden
Jönköping
Kalmar
Karlstad
Landvetter
Luleå
Norrköping
Östersund
Stockholm Arlanda
Stockholm Bromma
Sturup
Sundsvall
Umeå
Visby
Switzerland
Basel-Mulhouse
Zurich
Turkey
Antalya
Kayseri
Kutahya
United Arab Emirates
Sharjah
United Kingdom
Aberdeen
Belfast
Birmingham
Bournemouth
Bristol
Cardiff
Doncaster
East Midlands
Edinburgh
Exeter
Folkestone
Glasgow Airport
Glasgow Prestwick
Humberside Airport
Leeds
Liverpool
London Gatwick
London Heathrow
London Luton
London Southend
London St. Pancras
Manchester
Newcastle
Norwich
Robin Hood Doncaster
Sheffield Airport
Sherwood Forest
Center Parks
Southampton
Stansted
Windsor
Cruise and Ferry ships
Asterion
Blue Galaxy
Blue Horizon
Blue Star I, II
Blue Star Delos
Blue Star Diagoras
Blue Star Naxos
Blue Star Paros
El Venezielos
Elyros
Hellenic Spirit
Highspeed 4
Kriti Ship
Nisos Chios
Nisos Mykonos
Nisos Rhodes
Nisos Samos
Olympic Champion
Patmos
P&O Arcadia
P&O Aurora
P&O Ventura
P&O Queen Elizabeth
P&O European Highlander
P&O European Causeway
P&O Norbay
P&O Norbank
P&O Pride of Rotterdam
P&O Pride of Hull
P&O Pride of Burges
P&O Pride of York
P&O Spirit of Britain
P&O Spirit of France
P&O Pride of Canterbury
P&O Pride of Kent
P&O Pride of Burgundy
Prevelis
Superfast I
Superfast II
Superfast XI
ASIA PACIFIC
Australia
Canberra
Melbourne
Perth
Cambodia
Phnom Penh
Siem Reap
Sihanoukville
China
Chengdu
Hong Kong
Macau
Shanghai
Indonesia
Bali
1 Management Report
DUFRY ANNUAL REPORT 2020
Malaysia
Kuala Lumpur
Singapore
Changi
South Korea
Busan
CENTRAL AND
SOUTH AMERICA
Antigua
Antigua
Saint Philip
Argentina
Bariloche
Buenos Aires Aeroparque
Buenos Aires Ezeiza
Cordoba
Mendoza
Aruba
Oranjestad
Bahamas
Bahamas
Great Exuma
Lynden Pindling
International Airport
Barbados
Barbados
Christ Church
St. Michael
Bolivia
La Paz
Santa Cruz
Brazil
Belém
Belo Horizonte
Brasília
Campinas
Curitiba
Florianopolis
Fortaleza
Goiânia
Natal
Porto Alegre
Recife
Rio de Janeiro
Rio de Janeiro Galeão
Rio de Janeiro
Santos Dumont
Salvador
São Paulo Congonhas
São Paulo Guarulhos
Uruguaiana
Chile
Santiago de Chile
Colombia
Bogota
Dominican Republic
Puerto Plata
Samana
Santiago
Santo Domingo
Equador
Santiago de Guayaquil
Grenada
Grenada
Honduras
Roatan
Jamaica
Jamaica
Mexico
Acapulco
Cancun
Cozumel
Guadalajara
Guanajuato
Ixtapa
Los Cabos
Mazatlan
Mexico City
Monterrey
Puerto Vallarta
San José del Cabo
Netherlands
Bonaire
Nicaragua
Costa Esmeralda Airport
El Espino
Guasaule
Managua
Peñas Blancas
Peru
Lima
Puerto Rico
Ponce
San Juan
St Kitts & Nevis
St Kitts
St Kitts Bradshaw Airport
St Lucia
St Lucia
St Maarten
St Maarten
Trinidad & Tobago
Port of Spain
Turks & Caicos Islands
Grand Turk
Turks & Caicos Islands
Uruguay
Montevideo
Punta del Este
Cruise and Ferry ships
Carnival Panorama
Carnival Sensation
Carnival Valor
Holland of America
Eurodam
Holland of America
Koningsdam
Holland of America
Nieuw Amsterdam
Holland of America
Nieuw Statendam
Holland of America
Noordam
Holland of America
Oosterdam
Holland of America
Rotterdam
Holland of America
Volendam
Holland of America
Westerdam
Holland of America
Zaandam
Holland of America
Zuiderdam
NCL Bliss
NCL Dawn
NCL Escape
NCL Gem
NCL Jade
NCL Jewel
NCL Joy
NCL Pearl
NCL Sky
NCL Spirit
NCL Sun
NORTH AMERICA
Canada
Calgary
Edmonton
Halifax
Toronto
Vancouver
USA
Albuquerque
Anchorage
Arkansas Clinton
International Airport
Atlanta
Atlantic City
Baltimore-Washington
Birmingham
Boston
Burbank
Burlington
Charleston
Chicago
Chicago Midway
Chicago O’Hare
Cleveland
Corpus Christi
Dallas Fort Worth
Dallas Love Field
Denver
Des Moines
Detroit
Fort Lauderdale Hollywood
Fresno
Grand Rapids
Greater Rochester
Greenville-Spartanburg
Harrisburg
Houston
Houston George Bush
Houston William P. Hobby
Indianapolis
Jackson
Las Vegas Hard Rock Cafe
Las Vegas Mc Carran
Las Vegas Palazzo
Little Rock
Los Angeles
Lubbock
Manchester Boston
Miami
Minneapolis
Mobile Bates Field
Myrtle Beach
Nashville
New Orleans
New York Empire State
New York Grand Central
New York JFK
New York LaGuardia
New York Penn Station
New York Port Authority
New York UN Gift Center
Newark
Newark Liberty
Newport News Williamsburg
Norfolk
Oakland
Omaha
Ontario
Orlando
Orlando Sanford
Philadelphia
Phoenix Sky Harbour Airport
Pittsburgh
Portland
Raleigh
Richmond
Roanoke
Santa Ana
Salt Lake City
San Antonio
San Diego
San Francisco
San José
Seattle
St Louis
St Pete-Clearwater
Stewart Newburgh
Tampa
Tucson International Airport
Tulsa Airport
Washington DC
Washington Dulles
Washington Ronald
Reagan Airport
CHANNELS
Airports
Border, Downtown &
Hotel Shops
Railway Stations & Other
Cruise Liners & Ferries
Seaports
57
1 Management Report
DUFRY ANNUAL REPORT 2020
CUSTOMERS
LOOKING
FOR GREAT
EXPERIENCES
In travel retail, customers continue to seek great
shopping experiences, exclusive products and novel-
ties. Obviously nobody rejects a “good deal and an
attractive promotion” but besides the monetary incen-
tives, the search for something special, unique and
individual is the strongest reason for customers to buy
in duty-free. Customers gave us valuable insights in
the interviews we performed in the summer and late
autumn months of 2020. This intelligence confirms
that trends identified in recent years continue un-
changed, despite the challenging market environment.
Providing a safe shopping and working environment
When the COVID-19 pandemic emerged in 2020, Dufry
implemented throughout all locations its Health &
Safety Protocol, to provide both customers and em-
ployees with a safe shopping and working environment.
The protocol contains the basic health and safety
measures defined by the company, but also allows to
be enhanced and adapted to the location specific gov-
ernment or airport health and safety regulations.
Exclusive memories
for family & friends.
who can also trust us when it comes to product and
store safety and comprehensive after sales services.
Every year, we welcome customers of more than 150
nationalities to our shops every day. Addressing these
customers in the right language and presenting them
with the right products and promotions is key to driv-
ing sales. As part of our shopping experience, the New
Generation Store is a cornerstone of our latest ap-
proach to retail. We currently have 13 New Generation
Stores and the shopping environment within each of
them changes its appearance depending on which na-
tionalities are present at the airport at any given time
of the day, based on flight schedules. Displays appear
in different languages and show the brands that best
fit the respective customer profile.
Providing the right information and helping custom-
ers understand the product characteristics in differ-
ent languages is a considerable challenge as well.
Therefore, in 2020 we have further accelerated our ini-
tiative to equip our shop staff with tablet computers
to provide customers with extensive information in
several languages, ranging from product specific data
or allowances at their destination. Going forward, we
also plan to offer payment services through the tab-
lets and eliminate the need to go to the tills.
Fostering experiences and offering unique products
By assessing customers’ expectations, we keep fine-
tuning our product assortments and service portfolio
to suit the latest needs. We fulfill the current focus on
experiences with an array of initiatives, such as airport
activations, tastings, beauty treatments, an attractive
assortment of novelties and exclusive products, as
well as a comprehensive service portfolio. Our well-
trained and motivated sales representatives help trav-
elers navigate through a large variety of prestigious
brands while providing them with valuable advice and
information. For us, a satisfied customer is a customer
Comfortably pre-order at home
Convenience is always a key sales proposition, and
thus also a priority for Dufry. We believe that engag-
ing with our customers before they enter our shops
and well before they reach the airport, provides them
with a great opportunity to pre-order products online
before they even start their trip, and collect them con-
veniently once at the airport. Dufry’s “Reserve & Col-
lect” service is already available in 175 locations in 44
countries around the world and new locations are be-
ing added constantly – the full list is available on our
website under: www.shopdutyfree.com
58
1 Management Report
DUFRY ANNUAL REPORT 2020
430 Dufry operates
in over 430 locations
in 64 countries
worldwide.
Red By Dufry
“Red By Dufry” is Dufry’s loyalty program which takes
the concept one step further for travelers. Red By
Dufry works primarily through a mobile application
(app) and via the traditional earning of points, the pro-
gram offers exclusive advantages such as discounts
at Dufry stores and specific airport benefits. More-
over, members of the program are identifiable through
the app’s beacon technology once they approach the
airport and receive personalized notifications on pro-
motions and offers tailored to their preferences. This
allows Dufry to increase conversion of travelers into
customers and to attract them to the shops. Red By
Dufry is already live in 239 locations in 48 countries
and is being continually expanded to further opera-
tions worldwide. A full list of the locations where
Red By Dufry is implemented can be found here:
www.redbydufry.com
Forum – Social media for brands and travelers
Forum is Dufry’s social media platform that provides
stories from bloggers and influencers, as well as back-
ground information from brands in an exclusive and
aspirational environment. Moreover, Forum by Dufry
connects with all our other digital initiatives such as
Red By Dufry and Reserve & Collect, while initiating
the engagement with our potential customers when
they are planning their journey or even before that.
Forum is designed to support the inclination to shop
with us, to change customer perception and to posi-
tion Dufry shops as the place to find the latest trends
and novelties for the main product categories – visit
Forum by Dufry at: https://forum.shopdutyfree.com/en
elsewhere in any other of our shops in the world: if
there is a problem with any product that you pur-
chased at a Dufry store, we will replace, refund or ex-
change your product within 60 days of purchase. In
2020, Dufry’s customer service representatives, who
can be reached in several languages by phone, email
or online chat, attended around 68,900 customers
from 107 countries. Dufry’s customer service team
and policies guarantee full customer satisfaction and
are the best example of our commitment to an out-
standing customer experience day-by-day.
Constantly enhancing
customer service.
Customer Satisfaction & Product Safety
Customer satisfaction and safety is our first priority.
As a prority, we ensure that all products comply with
legislation and health and safety requirements. Dufry
complies with legal requirements at every location in
which we operate and takes a proactive approach,
working with governments and regulators to clarify
any concerns. Through active membership in the in-
dustry’s trade associations, Dufry helped shaping ro-
bust Codes of Conduct (e.g. UK Code of Conduct on
disruptive passengers, UK Code of Conduct on VAT,
ETRC Code of Conduct on Sale of Alcohol, DFWC Code
of Conduct on Sale of Alcohol). Moreover, Dufry has
defined its own Supplier Code of Conduct and shared
it with its supplier community. More details are avail-
able in the ESG Report on page 80.
True global return guarantee
Dufry is the only global travel retailer in the industry
to offer a true global return guarantee. No matter
whether you purchase something in Melbourne, Bali,
St. Petersburg, Barcelona, São Paulo, Las Vegas or
Responsible Marketing &
Customer Communications
In its advertising and marketing initiatives, Dufry
shows the same responsible stance that it shows in all
its other activities. We commit to comply with all reg-
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239Dufry’s loyalty program
Red By Dufry is already available
in 239 locations.
ulations and rules in every advertisement and pub-
lished communication in the countries where we op-
erate. We also expect the same behavior from our
suppliers when using the space that we make available
in our stores for advertising and promotions. When it
comes to product labeling, we ask our suppliers to
comply with the regulations of all the locations where
the product is sold. Given that our stores operate in
an environment where we serve many nationalities
speaking different languages every day, we are proac-
tively engaging with our industry trade associations to
find off-the-label solutions. As much as possible, and
in locations where we have our shop tablets in use, we
can provide product specification translations in 10
languages.
Customer privacy & data protection
Management and protection of customers’ private
data in the processes involving the handling of client
information is another area of importance for Dufry –
particularly in the context of the further expansion of
our digital strategy and the respective customer ser-
vices it contains. Moreover, as a requirement of cus-
toms authorities, airport authorities and also for con-
tractual reasons, the customer’s personal data is
collected, processed and retained in accordance with
the privacy statement listed on the Dufry website.
Additionally, the company’s Reserve & Collect and Red
By Dufry services, require additional personal cus-
tomer information to provide them with newsletters
and marketing & advertising materials. To protect and
ensure customer data is handled correctly, Dufry ap-
plies high security standards thus ensuring compli-
ance with different legal frameworks. The company
has a number of systems and security processes in
place, including a robust cyber security system, a data
protection policy and specific training for employees
dealing with personal information, as well as internal
60
procedures and policies, which follow relevant laws
and regulations.
In this context, in 2018, Dufry had already completed
a number of processes to secure the alignment of our
operations in accordance to the EU General Data Pro-
tection Regulation (GDPR). Specifically, this work in-
volved expanded documentation and information re-
quirements, privacy impact assessments and the right
of individuals (mainly customers, employees, partners
and suppliers) to request access to, or to correct, de-
lete, object to processing of their own personal data
and to request data portability. All of this was com-
pleted ahead of the GDPR implementation deadline of
May 2018, and Dufry keeps monitoring new develop-
ments of data protection regulations and will adapt
accordingly where required.
Moreover, the Group also undertakes internal Data
Protection Audits and intrusion tests, on top of per-
manently discussing and improving the protection of
customers’ personal data in dedicated meetings held
quarterly. For any customer, employee or third party
who wishes to report a grievance or who has questions
regarding Dufry’s data privacy, there is a specific email
address to contact the company, with respective in-
quiries being coordinated by the Internal Audit, Loss
Prevention and Enterprise Risk Management (ERM) de-
partment.
Dufry’s expertise recognized by the industry
In 2020, Dufry’s customer focus and retail excellence
has been recognized by different industry partners
again. A complete list of the 2020 awards is available
on our website: www.dufry.com/en/company/our-award
MORE THAN
50,000
items are available
in our portfolio
for our customers
to choose from.
NET SALES BY PRODUCT CATEGORY 2020
2 % LITERATURE AND PUBLICATIONS
2 % ELECTRONICS
5 % OTHER
31 % PERFUMES
AND COSMETICS
11 % LUXURY
GOODS
12 % TOBACCO
GOODS
17 % WINE
AND SPIRITS
19 % FOOD,
CONFECTIONERY
AND CATERING
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SUPPLIERS
ENJOYING A UNIQUE
OPPORTUNITY
FOR GLOBAL BRAND
POSITIONING
Dufry is the largest global travel retailer and offers
suppliers a unique opportunity to position their brands
worldwide across a variety of shop concepts. This in-
cludes a network of over 2,300 shops across more
than 430 locations in 64 countries on 6 continents. As
Dufry operates duty-paid and duty-free areas alike,
the company can serve both domestic and international
travelers equally interested in convenience products
and luxury shopping experiences. In a normal, pre-pan-
demic environment, over one billion passengers regu-
larly passed through locations where Dufry operates
shops, making us the perfect partner and ambassador
for global brands.
Personally engaging with customers
in a fast growing channel
Travel retail is a growing channel with a captive, afflu-
ent audience, which allows brands to personally engage
with customers in an exclusive setting. This makes
travel retail a highly attractive and Dufry a preferred
partner for global and regional brands. A tight collab-
oration, leveraging our global network, our superior
execution and our strong customer service forms a
comprehensive offer for our brand partners.
We increasingly partner with global brands on strate-
gic initiatives, marketing campaigns, global promo-
tions or product launches, that contribute to increase
income for us and the brands. In this context, we of-
fer each brand a customized approach to create com-
mon goals for the supplier and for Dufry on specific
actions and distinctive campaigns to be implemented
on an individual basis. Both parties establish clear tar-
gets and evaluate the effectiveness of their joint ini-
tiatives. In 2020, various initiatives were implemented
to support re-openings and bring attractive offerings
to customers. The attractiveness of our joint offerings
became prevalent in a higher spend per passenger in
the second half 2020 once travel resumed. It also shows
that customers feel comfortable in our stores, which
fulfill the new safety measures and security protocols,
while still providing a unique experience.
Taking customer experience to the next level
In recent years, a growing number of brand partners
have developed Dufry-exclusive products, which to-
gether with novelties, limited editions and travel ex-
clusives, considerably augment and differentiate the
customers’ shopping experience. Internal research
also shows that personally engaging with customers
in the shop substantially increases spend per ticket –
and what could be a better topic on which to base that
more personal engagement, than an exclusive or a
newly launched product?
Centralized procurement and logistics
With a focus on generating efficiencies, Dufry is per-
manently streamlining its key processes. Through our
centralized procurement and logistic functions, we
have considerably simplified the entire supply chain.
Our Global Category Managers act as key relationship
managers for brands and coordinate activities with
suppliers. They define brand plans with suppliers and
negotiate all contractual parameters. Dufry has also
centralized and simplified the ordering process, by in-
ternally aggregating the orders from the different re-
tail operations and sending a consolidated order to
suppliers. Accordingly, we have adapted our logistics
organization with three distribution centers in Uruguay,
Switzerland and Hong Kong, which operate additional
warehouses in Hong Kong, Runnymede (UK), Barcelona
(Spain) and Miami (USA) and provide the timely shipping
of goods to our operations. The process benefits both
Dufry and suppliers, as it allows us to order and ship
larger volumes to the distribution centers, thus in-
creasing flexibility in product allocation by shop and
maximize product availability.
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BRAND UNIVERSE
1,000Dufry works with over
1,000 of the most renowned
global and local brands.
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AIRPORT
AUTHORITIES &
LANDLORDS
LEVERAGING
PROFITABLE RETAIL
CONCEPTS FOR
VALUE CREATION
Dufry strives to create value for landlords through our
ability to deliver best-in-class retail concepts, along-
side our deep understanding of customers including
their expectations and shopping behaviors. The trust
our landlords have placed in Dufry has allowed our
company to become the market leader in travel retail,
currently operating over 2,300 shops in 64 countries
located in airports, seaports, railway stations, down-
town areas, border crossings, cruise liners & ferries,
hotels and other locations with captive audiences.
Benefitting from the widest industry experience
Maximizing returns on the available retail space, by
creating highly innovative and attractive shopping ex-
periences for customers is a common goal that Dufry
shares with its landlords. Combining extensive exper-
tise in all technical and regulatory aspects in the mar-
kets in which we operate, along with a comprehensive
portfolio of attractive retail concepts tailored to the
individual needs of both duty-free and duty-paid en-
vironments are our key competencies. Moreover, first
hand customer insights, collected through detailed
regular research in our key locations and online en-
gagement, allow us to develop successful marketing
initiatives tailored to meet the requirements of every
single airport or any other shop environment. Our
worldwide presence and the extensive intelligence by
traveler profile are core competitive advantages and
key drivers to increase sales and profitability, com-
bined with our ongoing evolution of shop design and
customer services.
a high level of trust and shared objectives, which have
been key characteristics of travel retail in the past, but
have become essential in 2020. Our many years of ex-
perience in the business show that the closer both
parties work together and align their common goals,
the greater the opportunity to generate value – and
this will be true even more going forward. By joining
forces, we can create inviting and attractive commer-
cial spaces that maximize spend from the passengers’
arrival at the airport until their boarding – and if leg-
islation allows for arrival duty-free after landing.
Strong partnerships
drive success and
profitability.
Recent examples of refurbishments and expansions of
our shops confirm the value of coordinated and tar-
geted strategies. Projects developed in 2020 at the
airports of Odessa (UKR) and Singapore as well as in
Salt Lake City and Boston (US), and the refurbishments
completed at the operations in Corfu, Mykonos and
Thessaloniki (GR), Antalya (TUR), Belgrade (SRB) or
Nashville (US) are a few examples of how Dufry and
landlords can work together to optimally structure
passenger flows, improve the appearance of commer-
cial spaces and expand retail offerings to considerably
increase sales.
Real Partnership is key for value creation
The 2020 business year and the highly challenging
environment created by the global spread of the
COVID-19 pandemic has significantly highlighted the
importance of real partnerships to drive success.
Finding highly flexible solutions and short-term alter-
natives for cooperation could only be achieved through
Dufry’s New Generation Store –
tailored customer communication
With four New Generation stores opened in 2019 in
Buenos Aires (ARG), Amman (JOR), Malaga and
Alicante (ESP), we complemented the nine earlier ones
in Madrid (ESP), Cancun T3 and T4 (MEX), Melbourne
(AUS) and Zurich (CH), as well as at London Heathrow
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DUFRY ANNUAL REPORT 2020
T3 (UK). In 2020, Dufry continued to expand its digital
technology by implementing digital elements as part
of the refurbishments done throughout the year in
over 50 shops.
Dufry’s New Generation Store concept makes exten-
sive use of digital technology to increase communica-
tion with passengers at the airport. The digital route
allows Dufry to approach potential customers in an
even more personalized way than ever before and to
flexibly adapt in-store communication during the day
to the changing nationalities and customer profiles,
thus significantly enhancing the communication’s im-
pact. The sense of place of our shop designs, an im-
portant aspect for landlords, is also secured in the
new concept, as the format provides for a high degree
of customization. Dufry knows how to perfectly match
these requirements with efficient retail concepts, to
best serve travelers’ needs and to generate value for
landlords and Dufry alike.
Long-term
concession portfolio.
Deployment of our digital strategy improves
conversion and boosts the visibility of operations
In 2020, Dufry further accelerated the deployment of
its digital strategy elements. Besides the New Gener-
ation Stores, services such as Reserve & Collect and
above all the loyalty program Red By Dufry have a
global span and are therefore able to promote our op-
erations online and reach travelers across the world.
This gives airports and their retail offer additional vis-
ibility and exposure, thus promoting them as attrac-
tive shopping locations. For a more detailed descrip-
tion of our digital strategy, please also refer to the
strategy chapter on page 24.
Successful contract extensions secure
future business
In travel retail, concession contracts are a key busi-
ness driver for retail operators, as they provide the
right to sell their products at a given operation. In
2020, Dufry continued to win new contracts and to re-
new existing concession contracts, thus successfully
strengthening the remaining average lifetime of its
portfolio, which is currently 6 years. Within our con-
cession portfolio, 27 % of our contracts have a remain-
ing life-time of one to two years; 29 % of three to five
years; another 29 % of between six and nine years, and
the final 15 % have a remaining duration of ten years or
more. In average, Dufry renews existing contracts that
generate between 10 % and 15 % of our sales every
year, while at the same time adding new contracts.
39 new shops added to our first-class
concession portfolio
In 2020, Dufry opened and expanded 39 new shops
adding over 9,600 m² of retail space across all divi-
sions. At December 31, 2020, the entire concession
portfolio of the group included retail space of close to
470,000 m² thus strengthening our portfolio, despite
some crisis-related closures we had to perform.
Dufry’s concession portfolio is highly diversified and
well balanced across emerging and mature markets on
all six continents. This considerably reduces risks of
being exposed to single markets and operations; the
largest concession only accounts for approximately
6 % of turnover; while the 10 biggest concessions rep-
resent less than 25 %.
Focusing on investment returns
In 2020, our organization has followed its approach of
financial discipline even more closely when evaluating
new projects and opportunities – a methodology suc-
cessfully developed in the past, which has proven its
value during the present challenging environment.
Projects are analyzed individually on a commercial and
financial basis. The many aspects of a project being
put together include development potential and ana-
lyzing initial investment requirements, as well as the
expected development of passenger numbers and
profile perspectives. Through a strict evaluation of
these criteria and our disciplined approach to returns,
we ensure that our concession portfolio remains of
the highest quality and that each concession offers
attractive returns for the Group. This methodology is
applied for all project types, irrespective of whether
we participate in a tender process, engage in direct
negotiations with landlords or perform acquisitions.
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INVESTORS
STRONG
LONG-TERM
INVESTMENT
OPPORTUNITY
Since its listing in 2005, Dufry has pursued and suc-
cessfully executed a consistent strategy focusing on
profitable growth and cash generation to create value
for shareholders and bondholders alike. In the first
phase, the company accelerated growth mainly through
acquisitions, and more recently shifted towards a more
balanced growth profile including both organic growth
and acquisitions.
sified footprint supported the company even in 2020
when facing a global pandemic, by balancing region-
specific travel restrictions. Moreover, the company’s
strong cash generation capability will be further sup-
ported by the successful implementation of its re-
organization and the expected structural savings from
2021 onwards. For a detailed view on Dufry’s invest-
ment case please refer to page 22.
Despite the temporary challenges that our industry
and the company are facing due to COVID-19, we
strongly believe that travel retail is a resilient industry,
which will continue to benefit from the secular passen-
ger growth trend. Industry associations expect a re-
turn to pre-Covid passenger numbers in 2023 / 24. The
willingness of people to travel was also confirmed by
online research done by Dufry in June and November
2020 as well as in January 2021 showing clear indica-
tions of our customers’ propensity to continue travel-
ling as soon as the respective restrictions are lifted.
Only pure-play
to invest in travel
retail.
Pure-player in the resilient travel retail channel
The strong underlying fundamentals of travel retail –
secular long-term global passenger growth fueled by
a growing, more affluent population in many countries,
as well as the still high fragmentation of the industry
– are cornerstones of Dufry’s investment case. Dufry
has a track record of organic growth in line with re-
gional passenger developments; growth acceleration
through M&A; strong cash generation on the back of
an attractive risk profile based on our diversification
by geographies, channels and sectors. Dufry’s diver-
66
Capital allocation
Dufry’s capital allocation policy has been adapted to
the current environment with the objective to protect
liquidity amid a limited visibility on the recovery tra-
jectory. Dufry targets deleveraging in line with the re-
covery trajectory, reaching below 4.5x Net Debt / Ad-
justed Operating Cash Flow by 2022, and a mid-term
leverage level in line with pre-crisis. We expect attrac-
tive, shareholder value generating opportunities for
profitable growth to arise in the short- and medium-
term and we will thoroughly assess any investment
from a value accretion point of view once the business
has started to recover sustainably.
In the context of the evolution of the COVID-19 pan-
demic, the Board of Directors has therefore proposed
to the General Meeting of Shareholders 2020 not to
pay a dividend in order to safeguard the short-term li-
quidity of the company. Under consideration of the still
low visibility and the speed of the recovery, the Board
of Directors has decided to propose to the 2021 Gen-
eral Meeting of shareholders to suspend the dividend
payment for the 2020 business year as well.
Member of the SMI MID (SMIM) Index
With a market capitalization of CHF 4.461 billion as per
December 31, 2020, Dufry is part of the SMI MID (SMIM)
Index on the SIX Swiss Exchange, which includes the
30 biggest publicly listed companies in Switzerland not
already represented in the Swiss Market Index (SLI).
SHAREHOLDER STRUCTURE
AT DECEMBER 31, 2020
51.3 % OTHER
SHAREHOLDERS
17.55 % GROUP OF SHARE HOLDERS CONSISTING OF LEGAL ENTITIES
AI LOUVRE (LUXEMBOURG) S.À.R.L. AND TAOBAO CHINA HOLDING LIMITED,
SUCH GROUP REPRESENTING THE INTERESTS OF ADVENT INTERNATIONAL
CORPORATION AND ALIBABA GROUP HOLDING LIMITED
6.91 % STATE OF QATAR
5.00 % COMPAGNIE
FINANCIERE RUPERT
4.89 % NORGES BANK
4.25 % GROUP OF SHAREHOLDERS LED
BY TRAVEL RETAIL INVESTMENTS SCA
3.92 % GOVERNMENT OF SINGAPORE
3.19 % FMR LLC
3.02 % FIDELITY INVESTMENT TRUST
Note: Based on shares. For a complete overview of Shareholder
disclosures please refer to page 244.
DAILY AVERAGE VOLUME
MILLIONS OF CHF
101.1
86.7
54.8
66.5
64.0
110
100
90
80
70
60
50
40
30
20
10
0
2016
2017
2018
2019
2020
Note: Decrease in volume in 2019 due to the termination of the EU stock
market equivalence to Switzerland since July 2019, where the trading of
Swiss shares on EU exchanges has been prohibited as of July.
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DUFRY AG SHARE PRICE AND TRADING VOLUME
SHARE PRICE
IN CHF
TRADING VOLUME
MILLIONS OF CHF
140
120
100
80
60
40
20
0
350
300
250
200
150
100
50
0
1/19
2/19
3/19
4/19
5/19
6/19
7/19
8/19
9/19 10/19 11/19 12/19 1/20 2/20 3/20 4/20 5/20 6/20 7/20 8/20 9/20 10/20 11/20 12/20
Dufry
SPI
Volume (all exchanges)
Source: Bloomberg
Note: SPI Index has been rebased to Dufry’s share price
MARKET CAPITALIZATION AND FREE FLOAT
BILLIONS OF CHF
6.8
4.0
9
8
7
6
5
4
3
2
1
0
7.8
5.0
4.9
4.5
3.2
2.9
3.0
2.8
2016
2017
2018
2019
2020
Free Float
Average Market Capitalization
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DUFRY ANNUAL REPORT 2020
Dufry’s share price started the year at CHF 96.88,
reached a high of CHF 97.36 in early January, saw a de-
cline accentuating in line with the spread of the pan-
demic, and reached a low of CHF 20.10 in mid-March.
Consequently the share price steadily recovered to
CHF 55.58 at the end of December 2020 supported by
internal initiatives to restructure the organization, im-
plement sustainable cost saving initiatives, strengthen
the financial position and enhance the liquidity, as well
as favorable external news flows regarding vaccine de-
velopments, international alignment of travel-related
recommendations and recovery expectations.
Dufry’s trading volume continued to be healthy in
2020. Dufry’s average daily trading volume was ap-
proximately CHF 64.0 million. The SIX Swiss Exchange
remains our most important trading platform, where
the average daily volume of Dufry shares reached
CHF 38.8 million in 2020. Dufry’s trading volumes are
mainly concentrated at the SIX 61 % and BATS Chi-X
OTC 39 % platforms.
Our long-term shareholders, in particular Advent In-
ternational, Alibaba Group, Qatar Investment Author-
ity, Travel Retail Investments, Richemont, GIC Asset
Management, as well as Norges Bank, FMR LLC and
Fidelity Investment Trust represented 48.7 % of our
share capital and strongly support Dufry.
Dufry has a free float of around 71 %, which is well bal-
anced, with shares being held by institutional investors
in the most important investor regions such as the
United States, the United Kingdom, APAC, Switzerland
and also across Europe.
Strong investment track-record for bondholders
Dufry has been a well-established investment oppor-
tunity in the bond market ever since the issuance of
its first Senior Notes in 2012. On the one hand, the
bond market represents an important source of fi-
nancing for the company, while on the other hand, our
low operating leverage, as well as the strong and re-
silient cash flow generation capabilities, are charac-
teristics welcomed by the fixed income market.
The company’s healthy reputation as an attractive bond
market opportunity was well confirmed in April 2020,
when the company issued CHF 350 million senior con-
vertible bonds due in 2023, conditionally convertible
into company shares and carrying a coupon of 1 %.
Dufry’s Senior Notes are currently rated (B+) by Stan-
dard & Poors and (B1) by Moody’s.
In April 2020, Dufry also placed in total 5.5 million new
shares, 5,000,000 of which were sourced from exist-
ing authorized capital excluding pre-emptive rights
and 500,000 coming from existing treasury shares.
The placement was successfully executed through an
accelerated book-building.
Long-term financing
strengthened.
In April 2020, Dufry also secured a new twelve-months
committed credit facility of CHF 397 million with two
six-months extensions. Additionally, Dufry has bank
credit facilities in place totaling close to CHF 1,161 mil-
lion maturing in 2022, and around CHF 2,271 million
maturing in 2024 (denominated in multiple currencies).
Moreover, as per end of December 2020, Dufry had
CHF 205.0 million of COVID-19 related government-
backed loans.
Fair and comprehensive market communication
Dufry is committed to open and transparent commu-
nications with the financial market to present our eq-
uity story and investment opportunities. We pursue a
constant, open dialogue with investors, analysts and
the media through direct phone and email exchanges,
regular roadshows and conference attendance, one-
to-one meetings and dedicated investor days, either
in person or virtually.
Senior management presents and discusses financial
performance on a regular basis and we provide the
financial community and media with in-depth reports
and information through press and analyst confer-
ences, conference calls and webcasts. In this context,
and as already disclosed in its third quarter results
publication 2019, Dufry releases quarterly trading up-
date statements for Q1 and Q3 and publishes full
financial results for the half-year and full-year periods.
As part of our 2020 Investor Relations activities,
senior management and the Investor Relations team
invested 42 days to meeting investors directly or vir-
tually through roadshows and conferences in Europe,
North America and Asia, during which we met around
660 investors in one-to-one or group meetings and
many more in presentations. Apart from meetings, the
Investor Relations team answered more than 960 calls
and emails in 2020. This results in a total of close to
1,620 contacts with investors and analysts. For con-
tact details of our Investor Relations team located in
Switzerland and Brazil, please see page 289 of this
Annual Report.
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2 ESG Strategy
DUFRY ANNUAL REPORT 2020
ESG
STRATEGY
ONGOING EVOLUTION OF DUFRY’S
SUSTAINABILITY ENGAGEMENT
Every day our employees serve close to 800,000 customers in our over
2,300 shops in 64 countries around the world. We closely cooperate with
our landlords in more than 430 locations; regularly engage with our brand
supplier community on customer expectations, and maintain an open
dialogue with our shareholders and other interest groups. This continuous
interaction with our main stakeholder groups informs our sustainability
journey. We recognize that the impact of our operations goes beyond
generating financial returns and we are fully committed to contributing
to the travel retail industry, society and the environment, through the
advancement of our sustainability goals.
Dufry’s ESG strategy defines the scope of our sustainability commitment.
It focusses on four key areas, in which we can actively contribute to
fostering high standards of environmental stewardship and social equity,
while still delivering financial returns to our investors.
Customer Focus, Employee Experience, Protecting Environment and
Trusted Partner frame our initiatives and build on the intelligence gained
through stakeholder engagement and the material topics identified in
our materiality matrix.
We first reported our sustainability goals and achievements in accordance
with the Global Reporting Initiative guidelines in 2017 as part of our annual
report. The formalization and implementation of our ESG strategy builds on
our sustainability initiatives to date and its implementation will be steered
by the Dufry ESG Committee and supervised by our Lead Independent
Director at the Board of Director level, thus fully integrating sustainability
in the overall company strategy to deliver sustainable and profitable
growth.
Julián Díaz González
Chief Executive Officer
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DUFRY ANNUAL REPORT 2020
DUFRY ESG STATEMENT
“Sustainability is an inherent
element of Dufry’s business
strategy aiming for sustainable
and profitable growth of the
company. Our ESG engagement
is focused on four key areas,
where we want to have a positive
impact within the scope of our
stakeholder eco-system and
beyond: customer experience;
employee wellbeing and advance-
ment; protecting the environment
through the responsible use of
our planet’s resources and being
a trusted partner for all our
stakeholders.”
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2 ESG Strategy
DUFRY ANNUAL REPORT 2020
ALIGNING OUR BUSINESS ECO-SYSTEM ...
Our ESG focus areas build on and reflect the sustainability expectations of the main
stakeholder groups in our business eco-system. The clear classification simplifies
the identification of material topics and the development of the related ESG initiatives
to achieve the defined goals.
EMPLOYEES
(see detailed description
on page 95
of this report)
SUPPLIERS
(see detailed description
on page 62
of this report)
– Supply
assortment
– Jointly develop
marketing
initiatives
– Develop new
and exclusive
products
– Good place to
work and grow
– Fair and compet-
itive wages
– Support families
and communities
– Generate revenues
for suppliers
– Give access to
global window
display & market
– Contribute to
global brand
awareness
– Drive company
success
– Talents and skills
CUSTOMERS
(see detailed
description on page 58
of this report)
– Generate
revenues
for Dufry
– Insights &
trends
– Availability
of global and
local brands
– Create
opportunity
for savings
– Provide unique
shopping
experiences
& services
– Award
concession
contracts
– Provide Dufry
with retail space
– Secure passenger
& customer flow
– Generate long-term
value
– Provide investment
opportunity
– Give access
to growth
industry
– Provide financing
– Provide feedback
on ESG priorities
– Generate
revenues for
landlords
– Provide access
to global brands
– Secure retail
expertise
AIRPORT
AUTHORITIES
& LANDLORDS
(see detailed description
on page 64
of this report)
INVESTORS
(see detailed description
on page 66
of this report)
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2 ESG Strategy
DUFRY ANNUAL REPORT 2020
... WITH OUR ESG FOCUS AREAS
CUSTOMER
FOCUS
– Product Safety
– Sustainable Products
– Responsible Marketing
– Digital Tools
– Customer Service & Guarantee Service
– Customer Safety
– Customer Privacy & Data Protection
EMPLOYEE
EXPERIENCE
– Attractive working Environment,
Conditions & Incentives
– Training & Development
– Career Progression and Recruitment
– Non-discrimination, Diversity, Inclusion
– Health & Safety
– Internal Communication
DUFRY’S
FOCUS AREAS
AND RELATED
TOPICS
– Respectful use of Natural Resources
– CO2 Footprint and Energy Consumption
– Waste Management
– Sustainable Logistics & Supply Chain
PROTECTING
ENVIRONMENT
– Corporate & Sustainability Governance
– Dufry Code of Conduct & other policies
– Supplier Code of Conduct
– Stakeholder Dialogue
– Partnerships with Landlords and Suppliers
– Sustainable Growth for Investors
– Community Engagement
TRUSTED
PARTNER
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GLOBAL APPROACH AND BOUNDARIES
OF FOCUS AREAS
Dufry is a global travel retail operator with over 2,300 shops across 64 countries.
As a pure retailer, the company focusses on selling products from global and regional
renowned brands and neither produces its own products nor does it use private labels.
Some brand partners supply Dufry with exclusive products or travel retail exclusive
products and formats, which are produced by the respective brands and are selectively
distributed through these channels.
CUSTOMER
FOCUS
PROTECTING
ENVIRONMENT
Customers are one of Dufry´s most valuable assets.
Under this area of focus, Dufry monitors all interac-
tions of the customer journey, from the sourcing
of products from our brand partners until these are
handed over to the customer at the shops or at home
in case of home-delivery for some duty-paid products
and the post-sale services. The scope includes in
particular:
Ensuring that products on Dufry shelves adhere to
the product safety principles stipulated in the Dufry
Supplier Code of Conduct, which is regularly updated
and re-certified with suppliers.
Responsible marketing communications, both
in-store and through our pre- and post-sale points of
contact with customers, as well as product warranties
and refund policies.
Data protection and security of customer and
company information.
Customer feedback, concerns and suggestions are
regularly gathered through own field research and
interviews conducted across the 50 major airports
where Dufry operates as well as through the Customer
Service department, which offers direct email or
phone access to the company.
Dufry operates shops in highly regulated, third party-
owned premises, such as airports, train stations,
cruise ships, seaports and downtown resorts, and
does not operate production sites. Hence, within our
sphere of influence, Dufry focuses on the following
opportunities to positively influence the environmen-
tal impact of its business:
Closely aligning with the landlords’ ESG strategies
and reducing as much as possible its own impact. To this
purpose, Dufry is member of several landlords’ ESG
committees and of the ACI Europe Climate Task Force.
Monitoring the CO2 footprint of stores, main offices,
warehouses and transportation of goods. Here Dufry is
tracking emissions starting from product delivery to the
distribution centers or local operations until these are
handed over to customers. Shipment of goods from the
supplier’s site to Dufry’s premises lies within the ESG
scope of suppliers.
Collaborating with global and regional service
providers for logistics, selected, among other criteria,
based on their waste management, recycling and
circular economy capabilities.
Operating a central Shop Design department, which
defines sustainable shop design strategies including
the selection of materials with respective guidelines and
regulations. Dufry collaborates with a limited number
of regional material shop equipment and furniture sup-
pliers, who have to comply with the relevant specifica-
tions.
Responsible use of natural resources and optimizing
waste management, including among others the reduc-
tion of plastic use.
Engaging with brand partners for good ESG
stewardship.
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DUFRY ANNUAL REPORT 2020
GLOBAL APPROACH AND BOUNDARIES OF FOCUS AREAS
This business model approach is a point of consideration and reflects in Dufry’s
boundary setting for some of the Focus Areas as described below. These Focus Areas
are the foundation stones of our sustainability strategy and reflect the structure
around which Dufry pursues its long-term goal of being a sustainable and leading
travel retailer.
EMPLOYEE
EXPERIENCE
TRUSTED
PARTNER
Dufry employees are ambassadors of the company
and first point of interaction with our stakeholders.
Operating in 64 countries, cultural and gender
diversity is an inherent element of Dufry, who strongly
believes in the value of having local people in local
operations – Dufry counts more than 130 nationalities
among its workforce. Under this premise, Dufry
focuses on:
Continuously evolving all employee interaction:
recruiting, training & career development as well as
retention & retirement schemes.
Developing and rewarding staff through global
programs including induction, product & service as
well as development and inclusion trainings.
Fostering a culture of equal opportunity, offering
attractive employment conditions, where everyone
receives equal treatment regardless of gender, color,
ethnic or national origins, disability, age, marital status
as well as sexual orientation, religion or any other
non-merit factor.
Preparing the next generation of Dufry leaders.
Maintaining a global talent pipeline and management
system complemented by hiring external talent thus
securing Dufry’s ability to evolve staff’s skills in line
with the market and business model requirements.
Guaranteeing full compliance with local and re-
gional labor regulations and the ILO conventions.
Complying with all applicable health and safety
regulations. This is a fundamental element considering
that most of our staff render their services in highly
regulated premises governed by landlords’ and country
legislation.
Actively communicating and promote dialogue with
employees and their representatives, including legally
recognized unions and internal forums representing
employees’ interests.
The long-term sustainability of our business relies on
our capacity to build trustful relations with all our
stakeholders. Therefore, Dufry has identified specific
priorities to focus on. In particular:
Permanently evolve its robust Corporate Gover-
nance, including the adaptation of Dufry’s Code of
Conduct & other polices, to reflect the needs of the
business model, the company strategy and the
expectations of stakeholders.
Continuously assess and monitor Dufry´s business
environment and related risks thus permitting to
secure sustainable long-term growth and to establish
respective audits and controls where needed.
Align the composition and the skills of its Board of
Directors to reflect the company’s global presence, its
business model as well as the consideration of cultural,
gender and ethnic diversification aspects.
Supervise our ESG / Sustainability strategy at the
highest governance body as part of the overall com-
pany strategy evolution based on an ongoing stake-
holder dialogue.
Support wealth creation of the local communities.
Continue to foster the well-established dialogue
with key stakeholders such as landlords and suppliers.
Comply with rules and regulations, including
internationally accepted human rights standards and
zero tolerance policy in respect of bribery and corrup-
tion by any of its employees, directors and officers
in this regard. The company’s Compliance Office and
Internal Audit departments perform regular compli-
ance trainings and control adherence to the respective
policies.
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DUFRY ANNUAL REPORT 2020
ESG ENGAGEMENT FULLY INTEGRATED
IN COMPANY STRATEGY
In order to achieve the overall goal of generating a sustainable & profitable growth
with positive contributions for all stakeholders, the full integration of the ESG
strategy is a key element. Building on the underlying business model, the four ESG
Focus Areas contribute to the implementation of business initiatives and procedures.
IMPACT
SUSTAINABLE & PROFITABLE GROWTH
GENERATING POSITIVE CONTRIBUTION
FOR STAKEHOLDERS
IMPLEMENTATION
BUSINESS INITIATIVES &
PROCEDURES
ESG FOCUS AREAS GOVERNED BY DEDICATED,
INTERDISCIPLINARY ESG COMMITTEE
CUSTOMER
FOCUS
EMPLOYEE
EXPERIENCE
PROTECTING
ENVIRONMENT
TRUSTED
PARTNER
FOUNDATION
UNDERLYING BUSINESS MODEL
AND COMPANY STRATEGY
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DUFRY ANNUAL REPORT 2020
IMPLEMENTATION OF SUSTAINABILITY STRATEGY
SUPERVISED BY HIGHEST GOVERNANCE BODY
The implementation of Dufry’s ESG strategy is supervised by the Lead Independent
Director and driven by the interdisciplinary ESG Committee, which includes all the key
operational functions.
1. At the level of the Board of
Directors the implementation of
the ESG strategy is supervised
by the Lead Independent Direc-
tor. The Board of Directors is
regularly informed on the ESG
strategy implementation.
2. The interdisciplinary ESG
Committee defines and drives
the implementation of the ESG
strategy. It meets every two
months and is attended by:
CEO, CFO, Chief Corporate
Officer, Chief Commercial
Officer, CEO Operations, Chief
Compliance Officer, General
Counsel, Global Internal Audit
Director, Chief Organization &
Transformation Officer, Global
Head of Corporate Communica-
tions & Public Affairs.
3. Day-to-day implementation
of Dufry’s ESG strategy is
executed by the ESG Depart-
ment as part of the Corporate
Communications & Public
Affairs department.
1.
2.
BOARD
OF DIRECTORS
ESG
COMMITTEE
3.
CORPORATE
COMMUNICATIONS &
PUBLIC AFFAIRS
77
77
2 ESG Strategy
DUFRY ANNUAL REPORT 2020
DUFRY’S ESG
REPORTING STANDARDS
Regular ESG Reporting
Dufry reports on the ongoing evolution and achievements of its ESG engagement
on an annual basis, with a dedicated ESG Report presented in accordance with the
Global Reporting Initiative (GRI) and forming an integral part of the Group Annual
Report. The ESG Report also includes the Progress Report of the UN Global Compact.
The annual ESG Report provides detailed insights on the implementation of the strat-
egy and includes Dufry’s Materiality Matrix reviewed on an annual basis to assess any
potential changes in the scope of the company’s material topics. Moreover, the report
includes the specific goals and their achievement level.
While following the GRI Reporting Initiative (GRI) guidelines as a basic approach,
the reported indicators are also mapped and aligned with the covered UN Sustainable
Development Goals for better comparison.
Signatory Member of the UN Global Compact
Dufry is a signatory member of the United Nations Global Compact, the world’s largest
corporate citizenship and sustainability initiative, and supports the Global Compact’s
10 principles in the areas of human rights, labor, environment and anticorruption,
reinforcing the company’s commitment to responsible business practices on a global
basis. The respective UN Global Compact Progress Report is also part of and in-
cluded in Dufry’s ESG Report.
As part of this commitment Dufry engages in collaborative projects, which advance
the broader development goals of the United Nations, particularly the Sustainable
Development Goals, for which Dufry has been actively supporting the UN SDG
#YouNeedToKnow Awareness Campaign since 2016.
Sustainable Development Goals
In the spirit of the SDG Target 12.6, that encourages companies to adopt sustainable
practices and integrate sustainability information into their reporting as a way to
understand, communicate, and better manage their contributions to the SDGs, Dufry
maps and links the SDG targets with the existing GRI indicators. This additional step
facilitates the understanding of Dufry´s efforts towards sustainability while clearly
showing the progress in the the company’s commitment to support this global UN
initiative.
78
78
Dufry store at Arlanda-Stockholm airport,
fully refurbished following sustainability-
friendly design and construction.
7979
2 ESG ReportDUFRY ANNUAL REPORT 2020 ENVIRONMENT,
SOCIAL AND
GOVERNANCE (ESG)
REPORT
OUR COMMITMENT
TO SUSTAINABLE
GROWTH
Dufry is a global travel retail operator with over 2,300
duty-free and duty-paid shops in airports, cruise
lines, seaports, railway stations and downtown tour-
ist areas. We employ 17,795 employees (FTEs) across
64 countries and we represent over 1,000 different
global and local brands in our stores. Dufry is part of
the Swiss Market Index MID (SMIM) on the SIX Swiss
Exchange and has a balanced share of large and small
shareholders.
pared and is available, together with the GRI Index
and the Sustainability Report Annex, included at the
end of this publication. These documents supplement
the information disclosed in Dufry´s Annual Report
(including the Corporate Governance and Remuner-
ation Reports embedded in the Annual Report). All
these reports are also available online as individual
files in the sustainability section of our corporate
website: www.dufry.com/en/sustainability-dufry
This sustainability report has been prepared follow-
ing the guidelines of the Global Reporting Initiative
(GRI) Standards, Core Option, and covers our envi-
ronmental, social and governance (ESG) activities,
performance and approach for the year 2020 focus-
ing on the topics we have determined to be of great-
est importance for Dufry and its stakeholders. Com-
pared to our 2019 report, in 2020 we are voluntarily
reporting information related to three additional GRI
indicators: Emissions, Environmental Compliance and
Public Policy. The decision to start reporting on these
indicators was in response to Dufry´s commitment
for greater transparency and gives stakeholders a
better understanding of our ESG strategy, despite
the fact that these topics have not been defined as
material for Dufry.
As we continue evolving our ESG reporting, in this
year’s report we have also embedded the UN Sustain-
ability Development Goals (SDGs) and included infor-
mation on the respective GRI and SDG indicators in
the corresponding sections, where Dufry plays a role
in progressing towards specific goals, thus enabling
the reader to obtain a better and more transparent
understanding of our report.
Dufry´s materiality assessment
Dufry launched its sustainability reporting in 2016
with the publication of its first materiality assess-
ment supported by Ernst & Young. This resulted in the
publication of our first Materiality Matrix, outlining
the topics considered most relevant to both our
stakeholders and our business. This first step to-
wards establishing a solid sustainability reporting
framework continued with the publication in 2017 of
Dufry´s first Environment, Social and Governance
(ESG) Report, prepared in accordance with the Global
Reporting Initiative (GRI) Standards.
The initial Materiality Matrix was created through a
scaled process, which began with the assessment of
a number of internal and external sources such as our
existing policies and regulations, publicly available
materiality assessments of peers, the SASB require-
ments (Sustainability Accounting Standard Board)
and the report of the Governance & Accountability
Institute. As a next step, we gathered stakeholder
feedback, mainly through various internal sources,
but also through our role in trade conferences and
associations, one-on-one discussions and the ongo-
ing dialogue with stakeholders.
In early 2020, Dufry became a signatory member of
the UN Global Compact. As part of this additional
commitment, a progress report has also been pre-
Our vision of sustainability however is not a static
one, and Dufry conducts periodic and comprehensive
materiality assessments to identify our most relevant
80
2 ESG ReportDUFRY ANNUAL REPORT 2020
2 ESG Report
DUFRY ANNUAL REPORT 2020
MATERIALITY
MATRIX
– Corporate governance /
– Products /
– Customer satisfaction /
– Financial performance /
– Services /
– Talent management /
h
g
h
i
i
m
u
d
e
m
S
R
E
D
L
O
H
E
K
A
T
S
R
O
F
E
C
N
A
T
R
O
P
M
I
– Brand and reputation /
– Digitalization /
– Growth strategy /
– Diversity and inclusion /
– Operations and security /
– Partnerships /
– Risk management and
compliance /
– Dialogue for stakeholder and
social engagement /
– Supply chain management /
– Cyber security and
Data Protection /
medium
high
IMPORTANCE FOR DUFRY
= CUSTOMER FOCUS
= EMPLOYEE EXPERIENCE
= PROTECTING ENVIRONMENT
= TRUSTED PARTNER
Note: Within boxes topics are listed in alphabetical order
81
reporting topics from an ESG perspective. During the
reporting year 2020, we re-assessed the accuracy of
our matrix with formal and informal feedback from
both internal and external sources, including finan-
cial and ESG analysts, business partners and indus-
try associations. As a result of the assessment and
compared to 2019, when we added Data Protection
and Cyber Security as an additional topic, no changes
were introduced to our materiality matrix in 2020. As
previously mentioned however, we voluntarily agreed
to report on additional indicators, even though not
considered material to our business, to provide a
wider understanding of Dufry´s ESG impact.
Articulating Dufry´s ESG vision and strategy
In 2020, Dufry significantly enhanced its sustainabil-
ity engagement across the Group by building on ma-
jor milestones reached at the end of 2019 and the be-
ginning of 2020. Firstly, Dufry revised its Sustainability
Strategy to present four focus areas – “Customer Fo-
cus”, “Protecting Environment”, “Employee Experience”
and “Trusted Partner”, which reflect the business
model and build on the company’s stakeholder eco-
system. This enables Dufry to define clear focus areas
where the company can make relevant ESG contribu-
tions. Dufry’s Sustainability Strategy and the four fo-
cus areas are described comprehensively in this 2020
Annual Report on pages 70 – 78.
Secondly, Dufry strengthened its ESG governance
structure with two new developments: the implemen-
tation of the Lead Independent Director function (ap-
pointed in July 2019), supervising the Group´s ESG en-
gagement at the Board of Director level, as well as
the setup of a dedicated ESG Committee (in Septem-
ber 2020), led by the CEO and representing all key
functions of the company. These initiatives contrib-
ute to both formalizing Dufry´s UN Global Compact
commitment and strengthening the ESG integration
within the overall company strategy.
IMPROVEMENTS CARRIED OUT DURING 2020
CUSTOMER FOCUS
•
•
Set up a comprehensive program to educate all members of our staff involved in the sale of alcohol
products based on principles and guidelines set by the DFWC
Continued to enhance our shopping environments with the opening of 9,600 m2 of additional retail space
and refurbishment of stores representing 12,800 m2 – equal to 3 % of Dufry´s total retail space
PROTECTING ENVIRONMENT
•
•
•
•
Strengthened corporate Environmental Management System to support
environmental strategy development
Implemented plastic bags decommissioning plan with expected completion in 2021 – 2022
Mapped Dufry´s GHG emissions including data from operations representing 64 %
of our global sales as well as the vast majority of the logistics network
Increased stakeholder dialogue on environmental issues, especially with logistics partners
EMPLOYEE EXPERIENCE
•
•
•
•
•
Successfully completed re-certification of Equal Salary Certification in Switzerland
Realigned training and development program for employees
Expanded internal communication channels to improve reach to non-desktop employees
Adapted health & safety store and office protocols to protect employees and
customers in the context of the COVID-19 pandemic
Initiated evolution process of our women@dufry initiative to extend its scope to diversity and inclusion
TRUSTED PARTNER
Implementation of strong ESG Governance structure
Development of Dufry Sustainability Strategy
Update of Dufry’s Code of Conduct and public disclosure of the Supplier Code of Conduct
•
•
•
82
2 ESG ReportDUFRY ANNUAL REPORT 2020 OBJECTIVES
Dufry’s success goes beyond commercial and financial performance and we un-
derstand that our business activities also have an impact on the communities in
the countries in which we operate. Since 2019, Dufry has supported the Ten Prin-
ciples of the United Nations Global Compact on human rights, labor, environment
and anti-corruption. We regularly align our overall sustainability strategy with
these ten principles and develop relevant initiatives geared to achieving a more
sustainable business, including:
CUSTOMER FOCUS
•
•
As the leading global travel retailer, we aim to further improve the overall traveler experience – in our shops
we welcome customers from over 150 nationalities every day – and initiate growth opportunities that
benefit brands, airports and travelers alike, by developing attractive shopping environments.
We are committed to providing responsible retailer training for the sale of alcohol products to store and
office staff involved in the sale of alcohol.
PROTECTING ENVIRONMENT
•
•
While in 2020 we have fully revised Dufry’s Sustainability Strategy, the ongoing verification of the strategy
and alignment with any new requirements remains a central focus.
During 2021, we will continue the assessment of our environmental impact with the aim of establishing
measurable objectives and a robust reporting structure, which will enable Dufry and its stakeholders
to have an even better understanding of the environmental footprint of its operations.
EMPLOYEE EXPERIENCE
•
•
•
Diversity and inclusion remain an area of focus for Dufry. Our corporate global initiative, launched in 2016
to bring together female leaders across the business from a variety of functions and geographies, continued
in 2020 with the mission of ensuring women’s advancement at Dufry. It supports talented women to rise to
leadership positions within the company, and helps employees better manage work, family and life-balance
topics. The goal of this initiative is especially important to give visibility to women that are progressing in the
company, as it gives inspiration to others. Other corporate initiatives, such as the talent program (more
details available in the “Employee Experience” section of this report) strive to incentivize women’s
progression within Dufry.
The ongoing development of fair compensation and of gender-pay gap reduction programs remained an
important part of our efforts in 2020. Through different initiatives across locations such as the UK (one of
Dufry’s largest operations) and Switzerland, compensation schemes were analyzed and remediation plans
established if needed.
Fostering dialogue with employees is a vital part of our strategy, based on the understanding that our staff
are our most valuable asset. In 2019, we conducted a new wave of the Engagement Survey with the
participation of 25,213 Dufry employees – representing 73 % of our workforce at that time. Follow up
meetings and plans to improve engagement have been put in place and will continue in 2021 and beyond.
TRUSTED PARTNER
•
•
•
Through our shop network, we directly and indirectly support the local economies of the countries in which
we operate: either by employing local staff, sourcing local products, or by paying taxes. Providing jobs and
quality working conditions and opportunities, including our training and development programs, are
important contributors to developing local wealth.
Continuing our plan to monitor our supply chain sustainability and include additional suppliers who have
accepted the terms of our Supplier Code of Conduct. In 2021, we will launch the re-engagement process
with our key suppliers to agree to the terms of the updated Dufry Supplier Code of Conduct.
While in 2020 we have fully revised Dufry’s Sustainability Strategy, the ongoing verification of the strategy
and alignment with any new requirement remains a central focus.
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2 ESG ReportDUFRY ANNUAL REPORT 2020 2 ESG Report
DUFRY ANNUAL REPORT 2020
CUSTOMER
FOCUS
EMPLOYEE
EXPERIENCE
– Product Safety
– Sustainable Products
– Responsible Marketing
– Digital Tools
– Customer Service &
Guarantee Service
– Customer Safety
– Customer Privacy &
Data Protection
– Attractive working Environment,
Conditions & Incentives
– Training & Development
– Career Progression and
Recruitment
– Non-discrimination, Diversity,
Inclusion
– Health & Safety
– Internal Communication
PROTECTING
ENVIRONMENT
TRUSTED
PARTNER
– Respectful use of
Natural Resources
– CO2 Footprint and
Energy Consumption
– Waste Management
– Sustainable Logistics &
Supply Chain
84
– Corporate & Sustainability
Governance
– Dufry Code of Conduct &
other policies
– Supplier Code of Conduct
– Stakeholder Dialogue
– Partnerships with Landlords
and Suppliers
– Sustainable Growth for Investors
– Community Engagement
CUSTOMER
FOCUS
GRI INDICATORS:
401-1, 403-1, 404-1, 405-1, 406-1
SDGs:
5.2
8.8
12.8
16.1, 16.3, 16.10
To succeed as a company, Dufry must put the cus-
tomer at the center of every decision we make. This
has been the philosophy of the company since its
foundation, and it’s what has brought Dufry to its
current leadership position in the travel retail indus-
try. Our main mission is to meet and exceed customer
expectations, which we achieve through the combi-
nation of sourcing unique product choices, providing
attractive shopping environments and offering spe-
cial shopping experiences. Our customers’ expecta-
tions however have evolved in recent years and have
become more sophisticated. The traditional price-
value proposition has been enhanced with additional
elements, as consumers today demand higher stan-
dards of sustainability from retailers. From privacy
and data protection, to responsible marketing and
communication practices, or product and supply
chain stewardship, there are many elements of our
offer that receive special attention from Dufry and
that enable us to be a more sustainable travel retailer.
Creating the best shopping experience
Our corporate brand statement, WorldClass.World-
Wide, reflects our ambition to create the best possi-
ble shopping environments to capture the interest of
travelers and to generate attractive buying opportu-
nities. That is the main pillar of our future growth. This
best shopping experience is based on three main el-
ements: store, product and service.
When Dufry develops or refurbishes its stores, special
attention is paid to creating a strong sense of place,
thus linking the shopping environment to the individ-
ual country’s cultural heritage, where the stores are
located. The powerful combination of state-of-the-art
store designs with local motifs and references, along-
side a carefully curated selection of local products ac-
quired from local suppliers, results in unique shopping
spaces that enable customers to experience a full cul-
tural immersion in the destination with a true “sense
of place”. Dufry cooperates closely with airport au-
thorities and brand suppliers on elements including
store design, passenger flows and allocation of com-
mercial space.
This collaborative work results in improved passen-
ger services, as well as more visibility and opportu-
nities for brands. Testament to this collaboration is
the remarkable example of Heathrow Airport in Lon-
don, where Dufry operates a large proportion of the
stores in all its terminals. In 2020, Dufry’s retail of-
fer in Heathrow was once more recognized by Sky-
trax winning the accolade of Best Airport Shopping
in the world for the eleventh consecutive year. This
recognition is of special interest for Dufry, as the
Skytrax award survey gathers the opinion of over 13
million airport users, from 100 different nationalities,
across over 550 airports.
Delivering consistent outstanding customer service
is Dufry´s main aspiration. No matter where our stores
are located, the ultimate objective of Dufry´s Cus-
tomer Retail Excellence program – which we contin-
ued to rollout during 2020 – is to give our customers
the best possible shopping experience. This program
focuses on:
– Reinforcing customer service through ideal staffing
levels according to store traffic and sales
– Providing employees with a clear focus and target
for each shift
– Empowering teams through strong leadership
– Enhancing selling capabilities around our products,
promotions and special lines/offers
In supporting this rollout, 13 Academy Stores spread
across the four main regions have been rolled out
globally. Located in Stockholm, Zurich, Athens, Madrid,
Marrakesh, Jordan, Toronto, New York (Newark), Can-
85
2 ESG ReportDUFRY ANNUAL REPORT 2020 cun, São Paulo, Buenos Aires (Ezeiza), Melbourne and
Bali, these stores served to test concepts and best
practices, and function as a reference for stores in
other airports and geographies. Much of the training
and development associated with the rollout of this
program was postponed in 2020 due to lockdowns and
airport restrictions caused by COVID-19. There is
however a strong commitment to continue with the
program as we gradually return to normality.
In 2020, Dufry also continued equipping its staff with
digital tools such as the Sales Tablets (now available
in 111 locations in 35 countries, mainly in duty-free and
larger departure walk-through stores) for improved
customer service. Sales tablets enable staff to give
our customers a more personalized shopping experi-
ence, adjusting the offering to their specific prefer-
ences and needs. They also provide our staff with ad-
ditional product information and details of other
products to complement or enhance the customer’s
purchase. A further level of service customization is
achieved when tablets are used in conjunction with
other Dufry digital services, such as Red By Dufry.
The digitalization of our stores and services including
Reserve & Collect or Red By Dufry, are covered in
more detail in the Customer section of the annual re-
port (pages 58 – 61). They constitute an important part
of our customer value proposition and are critical to
drive customer engagement and loyalty, hence, clos-
ing the virtual circle of the perfect customer journey.
Engaging with responsible suppliers
Dufry does not produce any goods nor sell any white-
label products. As a pure retailer, all products avail-
able on our shelves are produced by third party com-
panies. As explained in the Trusted Partner section of
this ESG report, Dufry expects all of its suppliers to
comply with the law, stipulated contract conditions
and international best practices in respect of human
rights and the environment, as well as health and
safety and labor standards. To ensure this, Dufry has
updated its Supplier Code of Conduct, available on
the company´s website, which stipulates the provi-
sions required to be a supplier to Dufry. As an addi-
tional step, in 2018 Dufry approached its main prod-
uct suppliers – covering over 40 % of Dufry´s sales
volume – to secure their acknowledgement of and
agreement with the Supplier Code, and hence ensure
the provisions included were accepted, establishing a
3-year cycle for reassessment. In 2021, Dufry will
again approach the suppliers who previously acknowl-
edged the terms of the Supplier Code to recertify, as
well as approaching additional suppliers to acknowl-
edge and agree to the terms of the Supplier Code.
86
Responsible marketing
Dufry’s responsibility goes beyond the products sold
and includes its marketing practices (see Customer
section of the Annual Report). Traditionally, Dufry has
played an active role in the main travel retail associ-
ations and in the self-regulation of marketing prac-
tices, especially for the sale of alcohol. Dufry has
contributed to the development of the Duty Free
World Council´s (DFWC) Self-Regulatory Code of
Conduct for the Sale of Alcohol Products in Duty
Free & Travel Retail – called Responsible Retailer of
Alcohol Products. This Code of Conduct, which com-
plements existing codes and guidelines followed by
individual alcohol manufacturing companies and
other bodies, is widely accepted by most travel retail-
ers worldwide and was signed and implemented by
Dufry in late 2017.
The DFWC’s Code of Conduct provides a unique
standard for promoting responsible retailing of alcohol
products in the duty-free and travel retail channels,
establishing clear guidelines for commercial com-
munications, sales of product in the travel retail
and duty-free environments and for product sam-
pling and tasting at the point of sale. The Code of
Conduct is publicly available from the DFWC website
www.dfworldcouncil.com.
In 2020, we took an additional step forward and made
inroads towards obtaining the DFWC Responsible
Retailer accreditation. This accreditation is granted
after all members of our staff involved in the sale of
alcohol products – both at store and office levels –
are trained on the above-mentioned code through a
DFWC developed training module. We have planned
the execution of this training in 2020 and will launch
it during 2021.
2 ESG ReportDUFRY ANNUAL REPORT 2020 Understanding our responsibility, we have made sig-
nificant progress in:
– Ensuring that products on Dufry shelves adhere
to the product safety principles stipulated in the
Dufry Supplier Code of Conduct
– Responsible marketing communications, both in-
store and through our pre- and post-sale points of
contact with customers, as well as in product war-
ranties and refund policies
– Data protection and security of customer and com-
pany information
– Regularly gathering customer feedback, concerns
and suggestions through our own field research and
interviews conducted either online, or across the 50
major airports where Dufry operates, as well as
through the Customer Service department, which
offers direct email or phone access to the company
Customer privacy and data protection
Dufry is committed to safeguarding the privacy of its
customers and their personal information, Dufry may
have access to. Dufry has implemented the neces-
sary management and Cyber Security systems to
treat any customer’s personal information as confi-
dential, securely store such personal information to
prevent unauthorized access to it, and ensure that
such personal information is only collected, used and
otherwise processed for legitimate business pur-
poses in accordance with the privacy statement
listed on its website and applicable laws.
Dufry offers two website applications that collect
some personal information from customers – the Re-
serve & Collect service and a loyalty program called
Red By Dufry. These customer engagement channels
have experienced a significant increase in registered
users. Some personal information and preferences
of these customers are collected during the registra-
tion process so that Dufry can provide more person-
alized communication and in-store experience.
Online transactions
While Dufry is undergoing a digital transformation of
its business and embracing digital technology across
multiple customer touchpoints, the company still
doesn’t handle online transactions that include pay-
ment for duty-free goods – exceptions are made for
some locations, where respective customs regula-
tions allow for this kind of service. The above-men-
tioned Reserve & Collect service only allows custom-
ers to reserve products and collect them at their
preferred airport location at the time the customer
flies. Normally however, it is not until customers col-
lect the products and show their boarding passes as
required, that the payment is processed. This is due
to customs regulations that only permit Dufry to sell
duty-free products at the airport location itself.
Data protection
Dufry’s Group Data Protection Policy sets out strict
requirements for the processing of personal data of
customers, business partners, employees and other
third parties whose personal information Dufry may
have access to. It meets the requirements of the Eu-
ropean General Data Protection Regulation (GDPR)
and globally ensures compliance with the principles
of national and international data protection laws in
force all over the world, including, amongst others,
the Payment Card Industry Data Security Standard
(PCI DSS) and the Sarbanes-Oxley Act (SOX). The
policy sets a globally applicable data protection and
security standard for our company and regulates the
sharing of information between our Group compa-
nies.
Our employees, as well as third-parties who provide
services on Dufry’s behalf, are required by policy and
process, as well as by contract, if applicable, to treat
customer information with care. Our processes are
designed to preclude unnecessary access to confi-
dential information and Dufry has administrative,
technical and physical safeguards that reflect this
obligation. Dufry regularly reviews and enhances re-
lated procedures and policies.
The Group also undertakes internal Data Protection
Audits and intrusion tests on a regular basis, while
quarterly meetings are held to discuss and improve
the protection of customers’ personal data. Anyone
wishing to report a grievance or ask a question re-
garding Dufry’s data privacy policy, or to access, de-
lete, correct or transfer his or her personal informa-
tion, can address such subject data requests to
privacy@dufry.com.
87
2 ESG ReportDUFRY ANNUAL REPORT 2020 Security Awareness Program
As part of the Security Awareness Program, Dufry
conducts regular internal communications campaigns
and training of all employees regardless of function
and location. The content of this communication and
training program includes relevant and individual
steps towards achieving a secure IT environment, in-
cluding:
– Email and messaging management
– Internet browsing
– Mobile device security management
– Password safety
– Social engineering awareness
– Social networks awareness
– Safe remote work
– International travel
– Physical IT security
– Protection of personal computer and home network
In 2020, Dufry did not report any incident regarding
a breach of customer privacy.
Cyber Security
Dufry is continuously monitoring, reviewing and up-
grading its processes to protect its business from
potential cybersecurity threats that ultimately could
end with theft of data. At a global level, Dufry has a
Global IT Security Team that is responsible for keep-
ing IT threats away from Dufry’s business, under-
standing emerging threats and investing in the nec-
essary technology to mitigate potential new risks.
In this regard, Dufry has a number of systems and se-
curity processes in place, including a robust IT secu-
rity system and a number of internal policies and pro-
cedures complying with applicable laws and regulations
and included in the company’s Global Information
Security Policies.
Dufry performs regular tests of its systems and
takes several measures to improve cyber security,
prevent malware infections and avoid data breaches.
Amongst others, Dufry:
– Encrypts customer, payment and any sensitive data
and limits access to it
– Keeps software up-to-date by installing updates
and security patches implemented as a result of
newly discovered vulnerabilities
– Secures point of sale (POS) devices and applications
– Performs regular vulnerability testing to identify
weaknesses
– Monitors all activity in Dufry’s systems and data for
any anomalous activity and indications of threats
– Uses (and promotes amongst its employees) secure
passwords and two-factor authentication
– Runs antivirus software continuously, periodically
scanning systems for malicious files
88
2 ESG ReportDUFRY ANNUAL REPORT 2020 PROTECTING
ENVIRONMENT
GRI INDICATORS:
201-2
301-3; 302-1,3; 305-1, 2, 4; 307-1
SDGs:
3.9
7.2, 7.3
8.4
12.2, 12.4
13.1
14.3
15.2
16.3
Roadmap towards environmental sustainability
2020 was a milestone year in Dufry´s environmental
footprint, as specific efforts carried out in the past
by individual operations are now orchestrated sys-
tematically and aggregated at Group level. Striving
towards improving our environmental footprint, we
have taken the necessary first steps to build our en-
vironmental sustainability strategy on these solid
foundations.
The established environmental management system
permits Dufry to assess and understand its impact on
the environment with a systematic and consistent ap-
proach, subsequently enabling the company to define
the main lines of our goals and actions. In some ar-
eas, where we have direct and stronger possibilities
to influence our footprint, we have already actioned
specific initiatives to reduce our footprint, such as the
replacement of plastic bags (see page 93). In other
circumstances, where our business model provides
less potential of directly influencing our footprint,
Dufry significantly increases its stakeholder dialogue
– mainly with the airports and supply chain – to ex-
plore opportunities to reduce the impact further.
As previously indicated in this report, Dufry operates
shops in highly regulated, third-party owned prem-
ises such as airports, train stations, cruise ships &
ferries, as well as seaports and downtown resorts.
This means that for most of the stores, a large pro-
portion of the utilities consumption, such as water or
energy usage and sourcing in the shops, cannot be
directly changed or influenced by Dufry, as these fac-
tors are predetermined by the landlords and the
given building construction. Likewise, as a pure re-
tailer, Dufry does not develop own product labels,
does not operate any own manufacturing sites, and
only sells third-party products directly sourced from
its brand partners.
The company therefore concentrates its energy-sav-
ing and emission reduction efforts mainly in the ar-
eas of supply chain & logistics, its own office prem-
ises and in the planning of new stores or in the
refurbishment efforts of existing shops. With respect
to shop-design, the focus is on the related construc-
tion materials, fitting equipment and lighting in ac-
cordance with several sustainability criteria. Addi-
tionally, Dufry takes part in industry-wide initiatives
such as the ACI Europe Climate Task Force, geared
to reducing greenhouse gas emissions, and it closely
collaborates with local airport departments in their
efforts to reduce and offset emissions.
Dufry´s environmental management
As a signatory member of the UN Global Compact,
Dufry has formally adopted the precautionary ap-
proach principle to its operations. The company fol-
lows a consistent process to assess its operations
from an environmental perspective, to identify cur-
rent or future environmental impacts of its activities
and to promote initiatives that respect the environ-
mental balance and comply with existing environmen-
tal laws and regulations.
In this regard, in 2020 we have conducted construc-
tive dialogue with stakeholders in the areas in which
we can actively influence the environmental footprint,
89
2 ESG ReportDUFRY ANNUAL REPORT 2020 to assess the impact and eventually implement mea-
sures to minimize or even to offset the impact. As a
first step, we have mapped our C02 emissions across
our supply chain and set up the structure to gather
emission-related information in a consistent manner.
The boundary for Dufry’s area of responsibility for
emissions and its related CO2 footprint, covers im-
pacts generated from the moment our suppliers de-
liver their products to our distribution centers and
warehouses, until the point at which we sell the prod-
ucts in the stores. The delivery of the products to our
distribution centers, or in some areas directly to the
shops, is within the responsibility of the suppliers.
Our scope also includes the stores and the respec-
tive office and management buildings.
Whilst the current scope of the data gathering does
not yet cover all locations, it provides first valuable
insights towards building a robust environmental
management system and strategy. The data gather-
ing scope will be further extended in 2021 – additional
information is provided in the emissions section.
Resource consumption and CO2 footprint
To better assess and understand the environmental
impact of Dufry´s activity when it comes to resource
consumption and emissions, we have identified four
different areas of our business that permit the com-
pany to track and, in a second stage, implement the
necessary measures and goals to minimize the im-
pact. These include shops, supply chain and ware-
houses, and office environments.
With respect to the types of resources used and the
information collected, electricity and fuel consump-
tion are the most material aspects of our footprint;
water consumption is marginal and restricted to nor-
mal use by our employees and cleaning services
within our premises.
TRANSPORTATION CYCLE
SUPPLIERS
DISTRIBUTION CENTERS
The delivery of
products to Dufry´s
premises is handled
by the suppliers
DUFRY STORES
LOCAL WAREHOUSES
90
2 ESG ReportDUFRY ANNUAL REPORT 2020 Stores
Most of the electric energy consumption of Dufry´s
activity happens in the store environment. Lighting,
refrigeration and air conditioning of over 2,300 stores
are the largest contributors to our energy consump-
tion and, consequently, to our CO2 footprint. The di-
rect influence of Dufry on these is however limited
due to the nature of our business. Dufry stores are
mostly located in third-party owned premises and in
highly regulated environments, where Dufry has lit-
tle or no choice when selecting power sources.
Based on the utility invoices issued by landlords for
the year 2020, we have identified emissions and re-
source consumption for operations covering 64 % of
our global sales, including some of Dufry´s largest op-
erations (the UK, Spain, Brazil or Mexico). This scope
will be further extended in 2021 by adding more gran-
ularity and additional locations, where possible. In
this context it is important to understand that in sev-
eral locations, the utility invoices from landlords pro-
vide a combined charge by square-meter, which does
not allow identification of specific amounts of single
resources used and more specifically to isolate elec-
tricity consumption, thus this part of the business is
currently not covered.
Distribution centers and warehouses
The second-largest contributor to Dufry´s environ-
mental footprint is the transportation of goods.
Dufry operates four major warehouses located in
Barcelona (SP), serving Europe, Africa, the Middle
East and Russia; Runnymede (UK) for the UK market;
Hong Kong, serving Asia and Australia, and a fourth
one in Miami (US) for our operations in the US and
Canada, as well as in Central and South America.
These main logistics centers receive major shipments
from the suppliers and further distribute products to
our respective operations. Whenever possible, freight
is carried by sea and we aim to consistently select the
most efficient means of transport in terms of CO2
emissions. Furthermore, the vast majority of our
long-haul logistic partners are either ISO 14001 ac-
credited and / or have strong environmental manage-
ment procedures in place.
Additionally, we have over 25 local warehouses, which
redistribute goods received from the central ware-
houses to the operations. These are located where
Dufry holds several significant operations within the
same country in terms of volumes transported. In
general, distribution to individual stores is done by
road. These road transports are mostly outsourced
to national and international specialized partners,
some of which have implemented their own environ-
mental strategies. Only a minimal part of the compa-
ny’s transportation – mostly in the UK – is done with
a Dufry-managed transportation fleet. Through the
high efficiency in our logistics chain, we ensure that
the environmental impact of transporting goods is
kept to a minimum.
The vast majority of shipments of goods from the
supplier’s site to Dufry’s Distribution Centers is ex-
cluded from the assessment, as these emissions lie
within the ESG responsibility of the suppliers.
Office environment
Beyond stores and warehouses, Dufry has office
premises in a number of operations across the world.
Main ones include the Group´s Headquarter offices in
Basel (CH), Bedfont Lakes in Feltham (UK), Madrid
(ESP), East Rutherford (US), Miami (US) and Rio de
Janeiro (BR). Within these premises, energy con-
sumption is mostly related to lighting and heating. A
number of individual measures, such as automatic
switch off for lighting and heating systems, presence
detector activators and staff awareness campaigns,
have been implemented in Dufry offices to reduce
utility consumption. Additionally, we advise our em-
ployees to assess the overall necessity of any travel
and consider using alternatives to travel, such as vir-
tual meeting systems (videoconferences, teleconfer-
ences, computer live meetings, etc.) and we promote
more environmental alternatives for our employees
daily commuting, such as public transport offers.
Greenhouse Gas Protocol
Dufry follows the Greenhouse Gas Protocol (GHGP)
standards to report CO2 emissions. This protocol is the
most widely used international accounting tool for
governments and businesses to understand, quantify
and manage greenhouse gas emissions and classifies
emissions into three scopes.
– Scope 1: Direct greenhouse gas emissions from
sources owned by the company. For Dufry, Scope 1
emissions are limited to those from the fuel used by
Dufry-managed transportation fleets and fossil fu-
els used mainly for heating purposes.
– Scope 2: Indirect greenhouse gas emissions from
electricity use. In the case of Dufry these include
electricity consumption in stores, offices and ware-
houses.
– Scope 3: These are the emissions released by third
parties when they provide their services to Dufry.
For Dufry, these include mainly logistics.
91
2 ESG ReportDUFRY ANNUAL REPORT 2020
DUFRY EMISSIONS MAPPING
DUFRY OFFICES
DISTRIBUTION CENTERS
DUFRY STORES
LOCAL WAREHOUSES
ENVIRONMENTAL INDICATORS
AND CONSUMPTION DATA
GREENHOUSE GAS EMISSIONS
Energy Consumption
2020
2019
In tons of CO2 Eq.
Electricity1
kW / h
92,147,772
120,857,266
Scope 12
Diesel2
Tons of CO2 Eq.
Litres
Tons of CO2 Eq.
21,290
185,439
466
27,923
Scope 2
691,362
Scope 33
1,736
Total
2020
466
21,290
1.451
23,206
2019
1,736
27,923
5,117
34,776
Carbon Intensity
20204
2019
Tons of CO2 Eq, by m2 of comm. space
0.0495
0.0740
1 The scope of the 2019 data represents 57 % of sales, whilst the 2020 data represents 64 % of sales, due to a larger number
of Dufry entities reporting emissions data.
2 Includes consumption of Dufry-managed goods transportation in the UK, Jordan and Morocco.
3 Includes emissions data from Dufry’s logistics partners, accounting for over 55 % of the total volume transported globally.
4 Carbon Intensity calculated over the total square meters of commercial surface operated by Dufry
(469,990 m2 in 2019 & 469,041 m2 in 2020).
92
2 ESG ReportDUFRY ANNUAL REPORT 2020 Moving to non-plastic shopping bags
Starting in the last quarter of 2020, Dufry gradually
began replacing plastic carrier bags at all its duty-
free operations globally, with more environmentally
friendly ones made of compostable and recyclable
materials. The only exception for the time being is
that of STEBs (Secure Tamper Evident Bags). These
are necessary for certain airport purchases such as
liquor or tobacco, as per the requirements of the In-
ternational Civil Aviation Organization (ICAO) and
regulations of certain airports. For this type of bag,
Dufry is also exploring recyclable or degradable al-
ternatives that will meet ICAO´s and airports´ regu-
lations. Once the substitution of the single-use plas-
tic bags is fully completed, the company will reduce
plastic usage by 7.3 tons per annum.
The single-use plastic bag phase-out is coupled with
point-of-sale communication campaigns to raise
awareness and encourage customers to reduce sin-
gle-use plastic consumption and replace it with more
sustainable alternatives. The company has also agreed
to adopt a global price scheme for carrier bags as an
additional way of raising awareness and reducing
plastic consumption overall.
This formal decommissioning of single-use plastic
carrier bags follows other measures adopted in pre-
vious years, geared at reducing plastic consump-
tion across our operations, such as offering more
sustainable alternatives, including re-usable or jute
bags.
Waste and recycling
Avoiding any waste in the first place or recycling it,
is an effective way to save valuable resources. In our
warehouses, packaging materials, which mainly con-
sist of cardboard, paper, plastic film and wood, as well
as electronic and plastic consumables such as neon
lamps and PET, are sorted into different containers
and sent for recycling. The recycling process is out-
sourced to specialized service providers.
In the shops, waste produced by our operations is
mostly packing material handled through the land-
lord’s waste disposal system and recycled accord-
ingly where possible. In many of our locations, we are
taking measures to reduce single-use plastics film,
such as replacing roll containers used to move prod-
ucts from warehouses to the stores. The new mod-
els, which include closures on four sides and at the
top, drastically reduce consumption of the plastic
film needed for the covering and the plastic shrink
wrapping used with the old system.
With regard to cartons and pallets used to transport
and protect products, Dufry reuses the same units
as much as possible, thus consistently reducing con-
sumption of new resources.
Lastly, in our offices, the reduction of paper con-
sumption is one of our ongoing challenges. Dufry has
put in place local initiatives to reduce paper and other
office material consumption, including tips to reduce
paper usage, such as printing double sided, avoiding
printing of the legal text at the bottom of emails, and
encouraging people only to print when necessary. The
adoption of IT solutions, such as the electronic in-
voice management system, is also helping to reduce
the amount of paper used in the day-to-day work of
our staff and contributing to the protection of re-
sources.
Store development and sustainable construction
Dufry takes a sustainability approach when design-
ing, constructing and refurbishing stores. In the de-
sign phase and the selection of materials, we choose
the most environmentally friendly options and use lo-
cally sourced furniture and materials whenever pos-
sible, to reduce environmental impact. The shop de-
sign department is centrally organized at the Group
level. It develops guidelines and defines several indus-
try standards enabling us to create attractive shop-
ping environments, while at the same time reducing
energy consumption by using renewable or recycled
materials. To this end, specific policies are in place to
manage the use of materials: timber policy, cement
and virgin aggregates policy, hazardous chemicals
93
2 ESG ReportDUFRY ANNUAL REPORT 2020 policy, guidelines and energy targets for brand part-
ners for the supply of branded display devices. These
guidelines have to be followed by local construction
teams and their respective sourcing of materials.
specific Scope 3 emissions and the formulation of a
Stakeholder Engagement Plan to promote wider air-
port-based emission reductions. In many cases, these
plans also involve Dufry as the operator of airport
stores.
In 2020, according to information from Airport Car-
bon Accreditation, 61 airports reached the optimiza-
tion level (level 3) and 64 airports achieved carbon
neutrality (level 4) and superior accreditations. Con-
sidering both of these groups, Dufry operates stores
in 44 of these 125 airports, including Dallas Fort
Worth, Athens, Helsinki, Stockholm Arlanda, Zurich,
London Heathrow, London Gatwick, Abidjan and
Queen Alia Airport in Amman, Jordan.
ACI Europe Climate Task Force
In 2019, Dufry joined the ACI Europe Climate Task
Force as the representative of the travel retail indus-
try. The mission of the Climate Change Task Force is
to follow up on the implementation of ACI Europe’s
Climate Resolution from June 2019, which includes
the preparation of guidance material for members, to
support them in achieving the Net Zero 2050 com-
mitment. Net Zero aims to reduce emissions under
the airport´s control down to zero. This is achieved by
reducing energy and fuel consumption through the
design of new energy-efficient infrastructure amongst
other recommendations. Retailers play an important
role in the airport ecosystem and Dufry, as the larg-
est global travel retailer, contributes to the work of the
task force with its vision, experience and recommen-
dations in the regular meetings held.
Dufry´s biggest impact on the environment when it
comes to shop development, is in relation to its en-
ergy consumption. Being a public space, airports have
to provide well-lit facilities and naturally, this is a sub-
stantial part of their energy consumption. The main
focus therefore is on substituting traditional lighting
for more energy-efficient lighting systems (e.g. LED)
on ceiling and furniture displays, and on using A-rated
electronic devices (e.g. air conditioning, refrigerators)
in our stores, resulting in a significant drop in the
overall energy consumption.
The sustainability approach to store construction
however goes beyond the environmental dimension.
Besides complying with the provisions of the Dufry
Supplier Code of Conduct when selecting local con-
struction partners, we ensure that they also comply
with social and environmental regulations, hence, en-
suring the efforts initiated in our design studio result
in truly sustainable spaces for our customers.
Partnership and engagement at operations level
Dufry engages with its stakeholders to promote en-
vironmental protection practices wherever this is
possible. We actively participate in sustainability
committees with our airport partners, with the aim
of identifying areas where we can collectively reduce
the environmental footprint of our operations. For
some of our operations, Dufry has a designated sus-
tainability manager in charge of liaising with landlords
and other airport stakeholders to drive sustainable
practices. Either through innovative technologies, ad-
aptation of passenger flows or rethinking the recy-
cling processes in place, we are contributing to the
common goal of making airports a more sustainable
space.
Airport Carbon Accreditation
The Airport Carbon Accreditation is an Airport Coun-
cil International (ACI) Europe certification program
that independently assesses and recognizes the ef-
forts of airports to manage and reduce their carbon
emissions. It defines six different levels of certifica-
tion: ‘Mapping’, ‘Reduction’, ‘Optimization’, ‘Neutral-
ity’, ‘Transformation’ and ‘Transition’.
In order to achieve the Optimization accreditation
(level 3 of 6) and above, airports need to actively en-
gage with airport stakeholders, as they need to de-
velop a more extensive carbon footprint to include
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2 ESG ReportDUFRY ANNUAL REPORT 2020 EMPLOYEE
EXPERIENCE
GRI INDICATORS:
401-1, 403-1, 404-1, 405-1, 406-1
407-1, 410-1, 415-1, 419-1
SDGs:
3.3, 3.5, 3.7, 3.8
4.3, 4.4, 4.5
5.1, 5.5
8.2 8.5, 8.6, 8.8
10.3
16.7
Every Dufry employee is an ambassador of the com-
pany. Whether in stores, offices or warehouses, all
members of our staff contribute with their day-to-
day work to shape the company and evolve our brand.
For this reason, Dufry places great importance in
building a great and unique place of work for its staff,
ensuring it delivers the best in terms of fair and equal
conditions, healthy and safe working environments,
attractive salaries, promotion and retention strate-
gies, avant-garde training programs and anything
that contributes to generate high engagement levels
amongst our staff.
Building on our core brand values – Global, Focus, De-
livery and Solid – Dufry has developed a number of
policies and procedures that ensure a consistent ex-
perience across the 64 countries in which it operates,
and which represent the foundation of the future of
Dufry. The rollout of the Business Operating Model
(BOM) completed in 2018, that served to standardize
processes and procedures, and ONEDUFRY, to har-
monize values and principles as well as streamline the
cultural transformation of the Group, have fostered
the setup of a true global company with the highest
employee standards.
Dufry had 17,795 people (FTE) working for the Group
at December 31, 2020, compared to 31,336 at year-
end 2019. The decrease in the number of employees
is related to the extraordinary trading conditions of
2020, resulting from the COVID-19 pandemic, and the
need to secure the resilience of the company. Due to
the pandemic, some airports remained closed or
maintained only very low levels of traffic compared
to previous years. In order to adapt the company to
the business environment, Dufry had to reduce per-
sonnel expenses and adjust the company structure.
This reduction included early retirement schemes,
holding off on seasonal staff employments, govern-
ment support programs and the reduction of posi-
tions across Dufry’s global operations at all levels of
the organization. Dufry has progressively re-incor-
porated staff members on furlough when and where
possible and in line with the partial and temporary re-
covery of the travel activities. Uncertainty and lack
of visibility regarding the speed of recovery of air
traffic, does, however, currently not allow to define
possible future staff re-integration scenarios.
Across the 64 countries where the company is pres-
ent, Dufry generates an additional contribution to the
wealth of local communities and society by offering
working opportunities to third party employees and
the respective generation of additional salaries and
tax payments. In this context, our 2,300 plus stores
are not just sales locations for our brand partners to
sell their products, but also labor opportunities for
over 2,200 people that work in our stores represent-
ing these brands and other service providers. From
beauty advisors to IT developers, they all contribute
OVERVIEW EMPLOYEE STRUCTURE 2020
HQ
Europe, ME & Africa
Asia Pacific
North America
Central & South America
FTEs
Headcounts
408
442
9,924
11,712
664
1,502
2,866
4,334
3,933
4,163
Total
17,795
22,153
95
2 ESG ReportDUFRY ANNUAL REPORT 2020 EMPLOYEES BY REGIONS
NORTH
AMERICA
19 %
19 %
CENTRAL &
SOUTH
AMERICA
53 %
2 %
HEADQUARTER &
DISTRIBUTION
CENTERS
EMPLOYEES BY GENDER
EUROPE,
MIDDLE EAST
& AFRICA
ASIA
PACIFIC
7 %
FEMALE
65 %
35 %
MALE
to create a World Class shopping experience and
benefit from accessing a dynamic market and work
opportunities. As described above, the collaboration
with these third-party employees was also impacted
in 2020 by the spread of the COVID-19 pandemic.
Creating a great place to work
Making Dufry the place where our employees want to
continue working involves investing time and re-
sources to continuously assess and identify oppor-
tunities where Dufry can improve its culture, thus
contributing to retaining talent and helping staff
achieve their highest potential. Dufry is working re-
lentlessly towards providing the best working condi-
tions for our staff and gathering their feedback with
regular employee surveys (see corresponding section
on page 101 within this report).
96
Compensation and benefits
Dufry offers its employees competitive salaries and
incentives as a way of attracting and retaining tal-
ented staff. Dufry´s standard compensation includes
a fixed and a variable performance-based compensa-
tion that rewards the individual efforts of staff mem-
bers. Variable pay is linked to individual and company
objectives.
We regularly review and discuss professional devel-
opment with employees and link their performance
to incentives. Performance reviews are an important
aspect to a long-term, successful employer-em-
ployee relationship. Therefore, it is important for us
to build a constructive dialogue between each indi-
vidual employee and manager regarding goals, prior-
ities and personal development. All our staff mem-
bers receive an annual performance review aimed at
evaluating their performance and identifying further
personal development potential for next career steps.
Our staff also enjoy additional benefits that vary
from one location to another, and which include med-
ical insurance or transport allowances. The company
is working on the rollout of a global online staff shop
– Emporium – that will give staff (including family and
friends) access to a curated selection of goods and
products sold in our stores at competitive prices. Em-
porium is currently available in key locations – such
as the UK, Spain and Switzerland – and will be further
deployed throughout 2021.
Cultural diversity and inclusion
Developing a diversified workforce is a core value for
Dufry and something that our company is very pas-
sionate about. Unlike traditional retailing, our industry
operates in multinational and multicultural environ-
ments. Being present in 64 countries, Dufry engages
on a daily basis with customers, suppliers and col-
2 ESG ReportDUFRY ANNUAL REPORT 2020 leagues from more than 150 different nationalities.
To succeed in this industry, it is paramount to under-
stand cultural differences as a way of engaging and
better serving our customers.
Diversity is an essential asset to – and integral part
of – our company and Dufry promotes an inclusive
corporate culture that understands and celebrates
diversity in all its forms, be it in gender, age, race, cul-
ture, beliefs or creed. Our workforce comprises col-
leagues from more than 130 nationalities across all
functions and levels of the organization. This has been
a consistent situation for many years and we continue
to believe that this broad cultural diversity repre-
sents a unique competitive advantage. We also view
it as a key element in the successful development of
our Group and in the implementation of our long-
term growth strategy.
For our employees, our company represents a truly
international working environment, with colleagues
from around the world and interesting career oppor-
tunities and tasks. The staff in Dufry’s shops in each
country are predominantly local. Our presence in 64
countries around the world makes us an important
employer in many locations, with many of our opera-
tions being located in emerging markets. This, in ad-
dition to bringing expertise and experience on how to
operate an international business, contributes to lo-
cal development and wealth.
Equal employment
We offer and promote working environments where
everyone receives equal treatment, regardless of
gender, color, ethnicity or national origins, disability,
age, marital status, sexual orientation or religion. In
addition, we adhere to local legislation and regula-
tions in all the countries in which we operate. Any
form of child labor or forced labor is strictly forbid-
den and clear recruitment procedures and regular
workplace controls ensure that this never happens
at any location.
Anti-discrimination, diversity and ensuring equal op-
portunities are and have always been important so-
cial and corporate issues for Dufry across all loca-
tions, especially (but not exclusively) in developing
countries. Many locations in which the Group oper-
ates still pose challenges to the guaranteeing of
equality. We monitor these countries closely to en-
sure we provide equal opportunities to all our staff.
As explained on page 104 of this report, the company
has in place whistleblower mechanisms to denounce
discrimination cases if they happen.
We provide our employees with fair and competitive
wages based on each individual’s background and ex-
perience, their particular job within our organization,
the appropriate market benchmark in the respective
countries and locations, as well as her/his perfor-
mance. The remuneration structure of our employ-
ees is assessed on a regular basis to make sure there
is no discrimination related to any kind of diversity.
Equal salary certification in Switzerland
Dufry became equal salary certified in Switzerland at
the beginning of 2019 and has been re-certified in
2020. This certification underscores the commitment
to a fair and unbiased reward structure, which en-
ables employees to develop and thrive in their ca-
reers. The certification process took place in three
stages through statistical evaluation, on-site audits
and interviews with individuals and panel groups. All
phases of the certification and re-certification pro-
cesses were performed at the Basel Headquarters
and the Zurich airport operation and gave proof on
how management systems, HR policies and processes
integrate the dimensions of equal remuneration.
Diversity promotion forums
In order to preserve gender diversity and stimulate
the dialogue about gender-related issues and con-
cerns, Dufry developed an internal forum – called
Women@Dufry – that addresses today’s challenges
for women in their work place, in order to ensure that
our female employees can fully develop their poten-
tial and career opportunities within the company. This
initiative is sponsored by the Group CEO, is strongly
supported by the members of the Board of Directors,
and is represented by selected female executives of
the company. It enables the company to understand
and recognize the challenges that everyone, both
male and female, faces and to ensure we put in place
the necessary resources to address any issues. In
2021, the company plans to further enhance and de-
velop the reach of this initiative by broadening its
scope to cover additional diversity and inclusion mat-
ters other than gender equality.
In the United States, Dufry´s subsidiary Hudson
formed the Hudson Diversity & Inclusion Task force in
97
2 ESG ReportDUFRY ANNUAL REPORT 2020 September 2019. Made up of 18 members across func-
tional and geographical locations in Canada and the
U.S., this initiative has the mission of identifying, un-
derstanding and eliminating barriers to ensure we de-
liver a truly diverse workplace for our employees. Dis-
cussions and the work of this committee are focused
on recruitment practices, career roadmap & develop-
ment, succession planning, compensation & benefits,
work-life balance and organizational culture.
Health & safety
Workplace safety is a priority and an essential com-
mitment for the company in our stores, offices and
warehouses. The company ensures that all activities
are carried out safely by taking all possible measures
to eliminate (or at least reduce) the risks to health,
safety and welfare of employees, contractors, cus-
tomers, visitors and any other person who can be im-
pacted by our operations.
The majority of our workforce operates in airports,
seaports, cruise ships and similar environments. As
a basic pre-requisite employees have to comply and
follow the respective airport’s, seaport’s or vessel’s
safety rules as these environments are highly regu-
lated. On top of this, Dufry has specific health &
safety regulations for its employees, including inter-
nal policies and guidelines – both global and local –,
which may go beyond the legal health and safety re-
quirements.
Dufry generally strives to achieve high occupational
health & safety standards and actively encourages
compliance across the whole Group beyond the spe-
cific 2020 pandemic-related initiatives. As a result,
Dufry has a number of different Health & Safety Pol-
icies throughout the organization. Regardless of the
specific requirements of each local legislation, there
are certain principles that all these policies adhere
to, including:
– Adherence to country, state and local health &
safety legislation and any other requirements.
– Workplaces operated as safe and hazard-free
spaces.
– Employees having the necessary skills and training
to perform their duties.
– Employees having been informed of the contents of
the policy.
– All the elements and protective equipment required
for employees to carry out their job safely having
been provided.
– The Group also has procedures in place in case of
emergencies.
Management of occupational health and safety man-
agement processes change from one location to an-
other, with a number of common guidelines that ap-
ply to all our operations, including the following:
– All Dufry operations provide information to employ-
ees on topical issues and health and safety initia-
tives, including workers who are not members of our
staff but work on our premises.
– Health and safety activities are regularly reviewed
to ensure issues are effectively managed and im-
provements are made where necessary. In some of
our locations, reviews include employee represen-
tation consultations (where appropriate).
– Responsibility for the governance and review of
health and safety sits with local operations and HR
teams.
– At airport and seaport environments, close collab-
oration with landlord teams is maintained to ensure
compliance with their own H&S regulations and
management process.
COVID-19
The outbreak of COVID-19 posed an additional health
and safety risk for Dufry, as well as for the whole re-
tail industry. In response to this challenge, Dufry de-
veloped a global coronavirus in-store Health & Safety
Protocol, which provided guidelines and recommen-
dations to protect the health and safety of employ-
ees and their families, as well as customers, business
partners and other stakeholders. This protocol es-
tablished the main guidelines and allowed flexibility
to adapt them on a location-by-location basis to ad-
here to the landlord´s and local authorities´ requests.
Similar protocols were developed and deployed
across all Dufry offices and warehouses. Across all
locations, the company also guaranteed the provision
of signaling elements and protective elements – such
as facemasks and alcoholic gels – as requested by lo-
cal health and safety protocols.
Promoting a healthy working environment
Ensuring a safe workplace is a duty of all members of
our staff. Whilst the joint work of local Health &
Safety Committees and HR teams is crucial in iden-
tifying potential risks and hazards, workers are also
encouraged to report to these teams any work-re-
lated hazards or hazardous situations. The same pro-
cess is used for workers to remove themselves from
work situations that they believe could cause injury
or ill health. Work-related incidents are investigated
and reported to management to ensure remediation
plans (where needed) are designed and implemented
ensuring that processes are duly updated in cooper-
ation with the Health & Safety committees.
98
2 ESG ReportDUFRY ANNUAL REPORT 2020 Additionally, Health & Safety Committees undertake
regular worksite analysis to identify potential risks
and hazards. This analysis aims to identify existing
hazards, as well as conditions and operations in which
changes might occur to create hazards. Results of
these assessments are shared with the local HR
teams and management.
The highest incidence of occupational accidents is, of
course, among store and warehouse staff. The great-
est risks to which Dufry workers are affected include:
– Risks related to material elements, objects, products
and constituent elements of machines or vehicles
– Falls at the same level
– Incidents with transport and transfer devices.
Training on health and safety is critical to promote a
safe work environment. We therefore conduct induc-
tion sessions with new members of our staff and hold
regular training sessions with all of our staff, both in
stores and offices, ensuring understanding of the
policies and procedures. If needed, this training is ex-
tended to workers who are not members of our staff
but do work on our premises on behalf of third-party
service providers.
Airport security practices
Due to the nature of our business, most of our staff
are located in airport environments, either working
in stores, in airport offices and/or in airport ware-
houses. As part of the airport eco-system, our staff
have to adhere to and follow the security principles
and processes established at the specific airports
where our stores are located. Most of these regula-
tions and policies are harmonized across the world to
ensure consistent levels of safety and consumer pro-
tection. Worldwide safety regulations are set by the
International Civil Aviation Organization and within
Europe by the European Aviation Safety Agency.
In order to work in our stores, members of our staff
need to obtain the corresponding airport authoriza-
tion, which in most cases involves training courses on
security measures and procedures in the airport en-
vironment.
The Dufry employee journey
Dufry has comprehensively mapped all stages of an
employee career in our company, starting from when
an employee applies to a position until the moment
an employee leaves the organization. All the steps in
between these two points and the experiences that
the employee has is what Dufry calls “the employee
journey”, and it is the company´s systematic approach
to identify all opportunities Dufry has to feature a
great place to work in our organization.
To simplify the assessment, Dufry establishes four
critical stages on this employee journey: recruitment,
training, career progression and recognition.
Recruitment
To ensure “Fair Play” in everyone’s professional ca-
reer development, Dufry’s recruitment process en-
sures that all applicants are treated fairly, and each
applicant is given the same opportunity to be consid-
ered, so that the most suitable person can fill the po-
sition. The selection is based on the applicant’s com-
petencies, skills, results delivered and the decisions
taken regardless of: race, color, religion, sex, sexual
orientation, age, gender identity or gender expres-
sion, national origin, political orientation, disability or
other discriminating factor.
Available positions are first published internally to
ensure opportunity and growth of internal talent. Du-
fry’s recruiters review the skill pipeline of internal
employees ahead of engaging with external hiring
professionals. Referrals and recommended potential
internal candidates are encouraged and evaluated in
the same process against other potential candidates.
Job offers are typically also posted on the Group´s
website, www.dufry.com/careers.
To ensure fair play in the selection process, all inter-
view evaluations by Dufry recruiters and hiring man-
agers are reported in the Dufry HR portal Dufry Con-
nect. If any gap or personal development need of the
selected candidate are identified, recruiters are in-
structed to incorporate that information into the new
employee onboarding and development plan.
99
2 ESG ReportDUFRY ANNUAL REPORT 2020 and 27 store leaders, have benefited from this pro-
gram (interrupted during business closure).
– Future Store Leaders program – A development pro-
gram aimed at developing the next generation of
store leaders by providing hard and soft skills re-
quired for their promotion, which in 2020 had 89
participants from Dufry´s seven largest operations.
Training and education
Dufry’s training methodology follows the “Four E’s
model”: Educate (Formal education), Experiences (De-
velopment), Environment (Culture of learning), and
Exposure (Connections with other colleagues and
professionals).
Dufry employees benefit from an extensive learning
catalogue that covers programs to improve their per-
formance in their current positions and also profes-
sional development programs to support career pro-
gression. Training is offered through several formats,
including face-to-face as well as virtual and online
training sessions on soft and hard skills. Training is
open to all employees and managers at all levels and
across the entire organization and all geographical
locations. During 2020, and despite some training
programs being interrupted as a consequence of the
pandemic, 27,393 formal training hours were provided
by Dufry.
Some of Dufry´s global learning programs include the
following:
– Global Welcome – Designed for office and retail
staff alike, the Global Welcome is a comprehensive
on-boarding program for newcomers aimed at
shortening the learning curve. In 2020, over 980
new joiners were trained on this program.
– Dufry Growth and Dufry Leaders Growth – This pro-
gram for our office staff aims at developing knowl-
edge and skills around functions and departments
and preparing mid-level managers to take the next
step in their career progression. During 2020, we
had 187 new enrolments to this program.
– Retail Champions program – The cornerstone of our
Learning and Development strategy for retail staff,
this program has been designed to provide our pro-
fessionals with the tools, knowledge and capabili-
ties they need to perform well in their jobs and de-
velop to their full potential at Dufry. 544 employees,
100
This set of training programs is complemented with
product training programs for our store teams, typ-
ically delivered by the brands and local teams.
During 2020, we have accelerated the deployment of
our online training capabilities sustained over:
– Dufry Connect – Dufry´s HR portal, which permits
establishing personalized learning programs for ev-
ery employee based on their role, position and pro-
fessional category.
– Elucidat – Simplifying the creation of training and
learning courses by our learning & development
teams to reach 100 % of our staff.
– Coursera – An online based training platform for
management roles.
The introduction of these platforms, together with
the continuous rollout of sales tablets and commu-
nications tools for our non-desktop employees (fur-
ther explained in the Connecting with our Employees
section on page 102) is increasing the reach of both
product and skills training and benefiting a higher
number of employees. These tools have been instru-
mental over the lock-down periods, enabling our staff
to remain engaged and up to date in readiness for the
gradual re-opening of the business.
Career Progression
Dufry ensures that future and long-term manage-
ment needs are being addressed by an optimal bal-
ance of promoting internal high-level personnel and
hiring external talent (for example in new countries
2 ESG ReportDUFRY ANNUAL REPORT 2020 where we start operations). Dufry operates a global,
systematic process to identify high-potential talent
in the organization and to develop them toward key
roles in our business model.
We strongly believe that talent management and suc-
cession planning are key activities for a sustainable
business. Accordingly, we develop new and existing
candidates for more senior management roles and we
carry out yearly reviews of the quality of our talent
pipeline at two levels:
– The first level concentrates on a limited number of
candidates who already have management experi-
ence and would be able to take over one of the se-
nior positions in our organization. At year-end 2020,
this pool of talented individuals included 70 high-
potential managers. With these managers, we ad-
dress and safeguard succession in specific key man-
agement positions.
– The second level focuses on our stores. Amongst
the top-performing store personnel and supervi-
sors, we have identified over 200 “Retail Talent” em-
ployees as of year-end 2020, on whose development
we will focus in order to ensure a quality store-man-
agement succession pipeline.
Dufry also established a mentoring program to sup-
port employees in taking ownership of their develop-
ment and helping them maximize their potential and
accelerate their leadership development. The men-
toring program pairs Dufry leaders (mentors) and tal-
ented staff (mentees). Mentors use their experience
and professional background to provide guidance and
support to mentees on their learning journey. The
first edition of this program started in 2018 and 30
mentoring peers were formed. This program is ex-
pected to be resumed during 2021 with additional
mentors and mentees.
Awards and staff recognition
Employee recognition is an important way to value
employee and team achievements. Every year, Dufry
celebrates the One Dufry Awards, which recognize
excellence and celebrate the success of our people
worldwide who are dedicated to delivering.
The awards are divided in five categories:
– Best Leader Story Award recognizes individuals who
have demonstrated the right behaviors and charac-
ter and shown exceptional performance in Driving
Employee Experience.
– Best Customer Experience Award, recognizes the
highest scores measured by our Mystery Shopper
Survey.
– Best Partnership Initiative Award, which recognizes
an outstanding initiative with a supplier, business
partner, landlord, inter-company or other party,
that was innovative, well designed, well executed
and impactful.
– Best Business Growth Story Award recognizing the
greatest business growth stories, including – but not
limited to – a new store opening, a new airport / sea-
port / border / or other development, growth of a
product category, a business channel, or an exist-
ing store that has delivered exceptional growth.
– Best Organic Growth Award, which recognizes the
country with the strongest year-on-year organic
growth.
Engaging with our employees
Understanding our staff concerns and needs is crit-
ical for Dufry. For this reason, Dufry fosters a dia-
logue with its employees and invests in developing the
necessary tools to promote communication across
all levels of the organization.
Engagement survey
To better gauge our performance both within our
company and relative to our competitors, we conduct
regular employee engagement surveys that serve to
gain understanding of employee perception of the
company and identifying areas of improvement. We
ensure that the surveys always involve a substantial
proportion of our employees, and that they reach out
across the world. The last wave of our employee en-
gagement survey was done in 2019 with very positive
results: 75 % of our staff responded that they were
satisfied working for Dufry (vs. the retail industry av-
erage of 63 %), and 78 % would recommend Dufry as
a place to work. The next survey is expected to be
carried out during 2021.
Freedom of association and collective bargaining
Dufry respects legally recognized unions and inter-
nal forums created to represent their employees’ in-
terests. The company’s policy on collective agree-
ments is tailored to each location in which it operates,
as each location is subject to its own specific laws
and regulations. As an example, the current practice
in some of the main Group operations is described
below:
– In Brazil, there is a collective agreement in place
which covers core employee related topics such as
salary reviews, general allowances (meal, transport,
benefits, etc.), work contract restrictions / special
conditions, work shifts, vacations, health and safety,
contributions, benefits, awards and requirements
related to employee’s guarantees.
101
2 ESG ReportDUFRY ANNUAL REPORT 2020 Finally, Dufry also utilizes a number of other internal
communication vehicles to facilitate the dissemina-
tion of corporate news and to keep our staff updated
and engaged. These include the company´s corporate
magazine Dufry World – published in five languages
four times a year – the company´s intranet Dufry
Gate, and regular e-newsletters that serve to com-
municate with our staff globally.
– Greece has a collective agreement in place ruling
the main employee topics.
– In Spain, Dufry has a collective agreement in place
that covers all employees, except senior manage-
ment. The agreement, negotiated between the com-
pany and a committee made up of employee repre-
sentatives and labor union members, outlines
conditions such as salary, holiday days and health
and safety in the workplace, along with other HR re-
lated matters.
– In the UK, Dufry has an employee forum – “Voice” –
made up of staff representatives. This forum is as a
partnership between the company’s management
and its employees to influence and communicate
business changes.
– In the US, there are a number of recognized trade
unions that Dufry engages with, including Unite
Here, Workers United, United Food and Commercial
Workers, Teamsters, Newspaper Guild and Culinary
Workers.
As mentioned at the beginning of the Employee Ex-
perience section, during 2020 Dufry had to undertake
changes in the organization to adapt the company to
the new business environment. The role of staff rep-
resentation to support the company in adopting
these measures has been critical in both, supporting
management as well as communicating with and sup-
porting our staff.
Connecting with our employees
During 2020, we have continued with the rollout of
technologies and tools to reduce the information gap
between desktop and non-desktop staff. Sales tab-
lets, available in a growing number of our operations,
are permitting a more fluid communication, espe-
cially with our sales staff and, as indicated before, ex-
panding the learning possibilities.
Over the year, we have also progressed with the roll-
out of Beekeeper. This app-based solution enables
employee connection, facilitates workplace engage-
ment and increases productivity through unified
communications. Through Beekeeper, we are sharing
with the more unconnected members of our staff in-
formation related to our company, as well as infor-
mation related to their day-to-day work environment
(such as shifts, product information, events in store,
etc.). The app also features tools for internal chats
and communications and the sharing of information
in a very similar environment to that of the most rec-
ognized social networks. Currently, Dufry has 11,300
live users on the Beekeeper platform, reaching more
than 50% of its workforce and expects to fully roll-
out the app globally during 2021.
102
2 ESG ReportDUFRY ANNUAL REPORT 2020 TRUSTED
PARTNER
GRI INDICATORS:
102-12, 13, 16, 17, 18, 20, 22, 23, 24, 26, 28, 30, 31, 32
201-1, 4, 204-1, 205-2, 206-1,
407-1, 410-1, 415-1, 419-1
SDGs:
5.2, 5.3, 5.5, 5.7
8.1, 8.2, 8.3, 8.8
9.1, 9.4, 9.5
16.1, 16.3, 16.5, 16.6, 16.7
Dufry is aware that the long-term sustainability of its
business relies on the capacity to build, establish and
maintain trusted relationships with all our stakehold-
ers as described on page 106 of this report. That
means going beyond the strict compliance of legal
frameworks and leading the way in terms of sustain-
ability. For doing so, Dufry has set up main lines of ac-
tion, which include the following:
– Corporate Governance – Continuous assessment
of our corporate governance structure and policies
to ensure compliance with the applicable legal
framework, as well as the Dufry Code of Conduct
to reflect stakeholder’s needs and expectations.
– Alignment of ESG and business strategies – Ensur-
ing that critical business decisions made to drive
Dufry’s sustainable and profitable growth also con-
sider potential ESG impacts. Dufry´s ESG strategy
is supervised by its highest governance body and
ensures alignment of business and sustainability
strategies, as well as sustainable value creation for
our stakeholders.
– Compliance and control – Setting up robust inter-
nal bodies and structures that ensure education and
control over compliance of codes and regulations,
including internationally accepted human rights
standards and a zero tolerance policy in respect of
bribery and corruption.
– Stakeholder dialogue and engagement – Under-
standing the needs, concerns and expectations of
all our stakeholders and participating in discussions
about topics impacting our industry.
– Wealth creation – Delivering value to our sharehold-
ers remains a key priority for Dufry. Furthermore,
Dufry is aware that the impact of its operations goes
beyond that of revenue generation and its activity
can generate a positive impact where it operates its
stores. Favoring local economies, ensuring a fair sal-
ary and working conditions, sharing of expertise and
partnering with local companies is part of this area
of focus.
ESG governance
Dufry’s top-management oversees the development
and implementation of Dufry’s ESG Strategy. Since
2019, the highest responsibility over ESG-related de-
cisions relies on the Board of Directors´ Lead Inde-
pendent Director who, among others, oversees the
Group’s ESG strategy development and execution,
ensuring alignment with the business strategy.
Execution of the sustainability strategy is led by the
Group CEO. He presides over the interdisciplinary
ESG Committee, which meets every two months and
is attended by several members of Dufry´s Global Ex-
ecutive Committee team (GEC), as well as Global
Heads of other relevant functions. This committee
meets at least six times a year and is supported by
Dufry´s ESG department for the day-to-day execu-
tion of the strategy.
Socio-economic compliance
Having operations in 64 countries means complying
with different national laws and regulations, as well
as maintaining an active dialogue to foster ongoing
stakeholder and social engagement. For this reason,
from a global perspective, Dufry’s position towards
compliance necessarily needs to have a more holis-
tic and broader approach by also taking into account
103
2 ESG ReportDUFRY ANNUAL REPORT 2020 international norms and best practices, including the
10 Principles of the UN Global Compact. In this re-
gard, Dufry has a number of initiatives and control
mechanisms in place that permit the company to
monitor and ensure compliance with national and in-
ternational laws and follow respective ethical stan-
dards.
Governance & corporate policies
Dufry believes that active corporate governance is
important to the development of the company and
also as a way to ensure the sustainable provision of
long-term benefits for shareholders, employees and
society.
Dufry´s Governance system serves as a control
mechanism in relation to a number of elements, in-
cluding bribery and corruption, tax, executive remu-
neration, shareholders’ voting possibilities and inter-
nal control. Most of these topics are covered in the
Corporate Governance Section.
Especially relevant for the sustainability of our indus-
try is the corruption and bribery phenomena, which
can be the cause of negative economic, social and en-
vironmental impacts. From a business perspective,
corruption distorts the functioning of the market and
undermines governance institutions and in general,
the rule of law.
In the case of Dufry, the subject of corruption is of
considerable importance, as the company expands
its operations to many countries with elevated cor-
ruption levels and participates in many public pro-
curement processes to bid for airport, seaport and
other concessions around the globe each year.
DUFRY GROUP
CODE OF CONDUCT
Dufry prohibits bribery and corruption at all times
and in any form. We believe that in order to remain a
solid business leader, all business must be conducted
ethically and in full accordance with all applicable
laws, rules, and regulations. Dufry requires all of its
employees, officers and directors to behave at all
times with honesty, ethics and within the confines of
applicable law and in full compliance with Dufry’s
Code of Conduct. Where laws, rules or customs ex-
ist that are different from the principles set out in
the Code of Conduct, Dufry employees, officers and
directors are required to follow whichever sets the
higher standard in this regard.
Dufry also wants its employees, officers and direc-
tors to fully respect the safeguarding of integrity and
fair dealing when carrying out their activities on be-
half of Dufry and to promote the sustainability, di-
versity, decent work, human rights, zero tolerance to
harassment and discrimination standards adopted by
the Dufry Group as set out in the Code of Conduct.
Dufry’s Code of Conduct outlines the types of con-
duct, which are not permissible, and imposes strict
rules in relation to charitable contributions and
sponsorships, as well as gifts, hospitality and enter-
tainment expenses and facilitation payments, to min-
imize the risk of corruption. In addition, the rules re-
quire careful due diligence to be conducted on any
external partner Dufry is working with, including a
procedure that must be followed to vet all new joint
venture partners, consultants for business develop-
ment projects, counterparts to M&A transactions
and other similar counterparts.
Dufry also conducts compliance training of employ-
ees, officers and directors, as applicable on an ongo-
ing basis. These training sessions reflect the ongoing
changes introduced in our Code Conduct. Dufry’s
Compliance Department regularly evaluates the con-
tent of Dufry’s training on Compliance and Corpo-
rate Policies. The efforts of the Compliance Depart-
ment are fully coordinated with, and supported by,
the COOs of each Region and the respective HR de-
partments, who help identify the individuals, includ-
ing new hires, who should receive the training.
Dufry properly investigates all complaints and pro-
hibits retaliation or discrimination against any em-
ployees, officers and directors who report a concern
made in good faith. Since 2018, two new Group-wide
reporting channels have been initiated to sit along-
side the email reporting channel compliance@dufry.
com: (1) a world-wide, toll-free hotline in 9 languages
(English, Spanish, Portuguese, French, Italian, Man-
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2 ESG ReportDUFRY ANNUAL REPORT 2020 darin, Russian, Greek and German) also accessible via
local dial-in numbers for all countries in which Dufry
operates; and (2) the online reporting website www.
dufry-compliance.com. These reporting channels,
run by an independent third party, ensure the integ-
rity of such investigations by acting as a centralized
contact point, through which any wrongdoing or cor-
ruption concern are reported directly to the Compli-
ance Department for further investigation.
Individuals who receive training have been selected
based on the following criteria:
1. Community heads at Headquarters (Finance, Trea-
sury, Procurement, Business Development, Inter-
nal Audit, HR, IT, Commercial, Marketing, Customer
Service)
2. Local managers with exposure to business develop-
ment, external partners and third-party contrac-
tors
3. Managers with exposure to procurement negotia-
tions
4. Managers with exposure to government officials
such as airport authorities, customs or other pub-
lic authorities
5. Managers with signatory power or appointed as di-
rectors or officers of a Dufry Group subsidiary
6. Investor Relations managers
7. Members of the Legal and Governance Department
8. Members of the Internal Audit Department, Loss
Prevention and ERM department
9. HR managers worldwide.
GOVERNANCE & CORPORATE POLICIES TRAINING
DIVISION
HQ
Europe & Africa & Middle East
Asia Pacific
North America
Central and South America
Total
Managers trained /
retrained in 2020
235
327
108
122
127
919
As reflected in the table, during 2020, over 900 man-
agers at all levels of the organization have completed
this training. Dufry employees, who are not included
in the list above, are familiarized with Dufry’s gover-
nance and corporate policies via a series of videos
available through various internal channels, including
the Group’s intranet Dufry Gate, or the learning man-
agement system Dufry Connect, among others. New
employees, officers and directors are provided with a
copy of the Dufry Code of Conduct when they join the
company and are required to acknowledge accep-
tance of its terms in writing. Additionally, Dufry em-
ployees, officers and directors have access to all of
Dufry’s compliance and corporate policies, including
its Code of Conduct on Dufry Gate for their refer-
ence.
Risk management and control
Dufry adopts a risk management model based on
three levels. This model is applicable to all subsidiar-
ies of the Group. The company is supported by an
Enterprise Risk Management software called GRC
(Governance, Risk and Compliance), which allows a
comprehensive identification and management of po-
tential risks that may affect the business.
First level – The commitment of Dufry and all its sub-
sidiaries with integrity and transparency begins with
its own staff. Dufry requires all its employees, offi-
cers and directors to act at all times in accordance
with the provisions of the Code of Conduct. The lat-
ter describes the types of behavior not allowed, and
imposes strict rules regarding the operation of the
business.
In addition, the rules require each employee, officer
and director to perform due diligence and carefully
assess new external partners with whom Dufry plans
to work, including a procedure to be followed to ex-
amine all new minority partners, consultants for busi-
ness development projects, partners for transactions
& M&As and similar counterparts.
Second level – There are different governance func-
tions across the organization including the Compli-
ance, Legal, Finance and Human Resources depart-
ments in charge of monitoring the main risks and
establishing the most appropriate controls to miti-
gate, as well as ensuring compliance with the policies
and procedures of the Group. The scope of the Com-
pliance and Corporate Governance function is based
on the following pillars:
– Review and compliance with the set of global com-
pany policies
– Establishment of the overall framework of approv-
als of the Group and establishing a policy of “four
eyes” for validations
– Training, both for the members of the staff identi-
fied with greater exposure to risk and for the rest
of the employees
– Global corporate risk management
– Creating internal communication channels to en-
sure the integrity of the compliance program.
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2 ESG ReportDUFRY ANNUAL REPORT 2020 ever, holds relationships with a larger group of stake-
holders, which include:
– Travel Retail Associations and Industry Bodies:
Dufry is an active member of each of the relevant
regional and national industry associations in the
geographies in which it operates (see pages 56 / 57).
We are proud to have senior staff members on the
Board of some of the most respected industry bod-
ies – ETRC, MEADFA, IAADFS, ASUTIL, UKTRF or the
Duty Free World Council. This gives Dufry a voice
in industry debates, ensuring that it plays a proac-
tive role in shaping the industry’s future.
– Government & Public Institutions – The relation-
ship with this group is of major importance, as they
are the generators and guardians of laws and reg-
ulations that circumscribe Dufry’s operating envi-
ronment. New laws and regulations can have a sig-
nificant impact on the business and Dufry needs to
be aware of any changes and be prepared to influ-
ence draft regulations and react to comply as
needed.
– Service Providers – Understanding the relationship
of Dufry with key service providers – mainly with IT,
and logistics suppliers among others – is funda-
mental for Dufry to have a more holistic view of its
ESG impact and to assess and eventually address
improvement areas.
– Media – Is an important group for Dufry as it per-
mits the company to communicate with some of our
main stakeholders. Dufry strives to build strong
and close collaborative relationships with media
and our communications teams maintain direct and
long-term relations with media representatives and
influencers and provide them with timely informa-
tion on a wide range of global, regional and local
topics.
– ESG Community – Comprised of ESG rating agen-
cies and the ESG community of the travel retail and
airport industry, the relationship with this group of
stakeholders permits our company to have a bet-
ter understanding of the main topics of concern on
a global basis and identify areas of improvement
within our ESG reporting and communication.
– Communities and Charities – As part of its social
commitment, Dufry supports many activities in
communities in which it operates. Dufry has a par-
ticular focus on education, youth development and
charities for children and encourages its employ-
ees to work as active members at a local level. For
detailed information, please see our Community
Engagement section on pages 110 – 116.
Compliance
Third level – The Group’s Internal Audit provides in-
dependent and objective monitoring and consulting
services designed to add value and improve Dufry’s
operations. This function covers all subsidiaries and
applies a systematic and disciplined approach to
evaluate and improve the effectiveness of gover-
nance processes as well as risk management and
control, including assessing risk management proce-
dures and the potential committing of fraud. The
main risks identified in the course of internal audits
are reported to senior management and the Audit
Committee of the Board of Directors, and its status
is updated periodically until resolution or acceptance
are given by the governing bodies.
Stakeholder interaction and dialogue
Engaging with our stakeholders on a regular basis to
understand their expectations, needs and concerns
is part of our ongoing commitment to sustainability.
We interact with our stakeholders in a number of dif-
ferent ways, both formal and informal. For 2020, the
group of relevant stakeholders included in our mate-
riality assessment remains valid, and includes air-
ports and other landlords, customers, employees, in-
vestors (incl. shareholders, bondholders and lending
banks), public authorities, suppliers, media and com-
munities.
The eco-system illustration included in the ESG Strat-
egy on page 72 graphically describes the close inter-
action of Dufry with its core stakeholders. Especially
remarkable is the interaction with both suppliers and
landlords, which permits Dufry to provide a superior
service to customers. Known in the industry as the
Trinity (airport authorities & other landlords, retailers
and suppliers), the tight lines and collaboration be-
tween these three groups allow for an improved dia-
logue and mutual understanding between landlords,
retailers and suppliers, to the ultimate benefit of our
customers. This interaction has been especially criti-
cal and valuable during 2020 in helping us to find com-
mon solutions to mitigate the impact of the COVID-19
pandemic and its effects over travel.
Beyond the Trinity described above, our employees
and investors are the other two key stakeholders
contributing to our company’s success. Dufry how-
106
2 ESG ReportDUFRY ANNUAL REPORT 2020 DUFRY GROUP
SUPPLIER
CODE OF CONDUCT
Partnerships with landlords and suppliers
The Trinity approach mentioned above is of special in-
terest for Dufry as a way of achieving the company’s
ultimate objective of delivering a superior shopping
experience for our customers. The pursuit of this ob-
jective however requires both joint collaboration – in
the way the offer is presented to customers – and in
ensuring that the responsibility towards society and
the environment expected from Dufry, is also dem-
onstrated by our partners.
Supplier Code of Conduct
As stipulated in its Supplier Code of Conduct, Dufry
expects suppliers and business partners to comply
with the law, stipulated contract conditions and in-
ternational best practices in respect of human rights,
the environment, health and safety and labor stan-
dards. As a further step towards achieving a more
sustainable supply chain, in 2017 Dufry developed its
Supplier’s Code of Conduct, with the purpose of en-
suring that our suppliers across all product catego-
ries, have in place and apply accepted business stan-
dards, as described by the UN Global Compact,
regarding:
– Ethics and integrity
– Labor and employment practices and working con-
ditions
– Environmental compliance and sustainability
– Product safety and security.
Combined with the Corporate Governance and the
Remuneration Reports, both the Supplier Code of
Conduct and the Dufry Code of Conduct provide de-
tailed insights on how Dufry assumes its responsibil-
ity concerning social, ethical and environmental
standards and how we put into practice the princi-
ples of sustainable development in our day-to-day
work. Both Codes were updated in 2020 to reflect de-
velopments in law, regulation and professional ethics
and are available in the sustainability section of our
website: www.dufry.com/sustainability-dufry
We expect all of our suppliers and business partners
to comply with the principles included in Dufry Sup-
plier’s Code of Conduct, and ultimately to replicate
these standards further down their supply chain. In
2020, we continued our effort, to proactively share
the Code with additional suppliers from all product
categories, and have planned a complete re-engage-
ment process with all key suppliers for 2021.
Industry recognition
Dufry has a proven track-record in delivering suc-
cessful shopping concepts, specialized stores and
marketing activations, some of them in close collab-
oration with airport and brand partners. Testament
to this successful collaboration is the Frontier Award
granted to Dufry´s UK subsidiary, World Duty Free,
and Heathrow Airport for a joint marketing campaign.
These awards, known as the “Oscars” of the duty free
and travel retail industries, celebrate the very best of
innovation and creativity within the travel retail sec-
tor. Under the name of “Destination Beauty”, a cam-
paign that spanned five weeks and consisted of a se-
ries of beauty events covering London Fashion Week
and Chinese Golden Week was implemented. The
event highlighted five exclusive destination-themed
make up styles, created by five leading global beauty
107
2 ESG ReportDUFRY ANNUAL REPORT 2020 houses specific to this campaign and went live across
all four terminals at London Heathrow Airport. This
is a true example of an outstanding Trinity collabora-
tion between brand partners, airport landlord and
Dufry that served to gain international recognition.
This is just one example of industry recognition
granted. For a detailed list of other awards won by
Dufry, please visit our website at www.dufry.com/en/
company/our-awards
Corporate citizenship
Dufry is aware of its responsibilities towards soci-
ety. As a corporate citizen, Dufry is expected to con-
tribute to the production of higher standards of liv-
ing, wealth and quality of life wherever the company
operates, whilst maintaining profitability for share-
holders. Dufry showcases its strong corporate cit-
izenship foundations through its undeniable com-
mitment to ethical behavior when doing business, as
described in the Community Engagement section of
the annual report.
This is paired with Dufry´s participation in several in-
dustry initiatives geared towards safeguarding the
consumer and to environmental protection. Amongst
others, Dufry has contributed to the development of
several Codes of Conduct for the travel retail indus-
try (such as the UK Code of Conduct on Disruptive
Passengers and the ETRC and DFWC Codes of Con-
duct on Sale of Alcohol), and is a member of the ACI
Climate Change Task Force. Dufry is also a signatory
member of the UN Global Compact since January
2020 and has actively promoted the adoption of the
UN Sustainable Development Goals (SDG) through
awareness campaigns organized in cooperation of
airport landlords and the UN.
Stakeholder Value Allocation
As part of its corporate citizenship, Dufry contrib-
utes to the economic development of the economies
in countries where it operates through the payment
of fair and competitive salaries, taxes and the pur-
chase of local products and services. As a way of as-
sessing the economic impact of our business, Dufry
annually discloses its stakeholder value allocation,
which reflects the direct monetary impact of its op-
eration over its main stakeholders.
Accrued value allocated to our employees in form of
remuneration and social security payments amounted
to CHF 716.0 million in fiscal year 2020. CHF 325.5 mil-
lion were interest expenses as payments to our bond-
holders and lending banks. Due to the loss before
tax recognized in 2020 as a consequence of the
COVID-19 pandemic, Dufry recorded an income in
current income tax, mainly based on tax losses in cer-
tain jurisdictions. In addition, the Company generated
tax losses which can be carried forward and used
against future taxable profits. The total income on in-
come taxes recognized in the income statement 2020
amounted to CHF 130.7 million. As described on page
8 in the Chairman letter, the Board of Directors had
originally planned to propose a dividend payment of
CHF 4.00 per share to the General Meeting of Share-
holders held in May 2020. However, due to the
COVID-19 pandemic and the impacts on the industry
and on Dufry’s business, the final proposal to the
General Meeting was not to pay any dividend in 2020,
in order to protect the liquidity of the Company. With
respect to the 2021 General Meeting of Shareholders,
the Board of Directors will propose to keep the divi-
dend payment suspended, thus continuing the strong
focus on protecting the liquidity.
Additionally, Dufry contributes every year to a com-
prehensive number of social initiatives, which are de-
scribed in the Community Engagement section of this
report in page 110.
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2 ESG ReportDUFRY ANNUAL REPORT 2020 109
2 ESG ReportDUFRY ANNUAL REPORT 2020 2 Community Engagement
DUFRY ANNUAL REPORT 2020
COMMUNITY
ENGAGEMENT
The support of charitable institutions and causes, as
a way of giving back to society, has been inherent in
the growth and evolution of Dufry since its early years.
During 2020, either at global, country or location level,
Dufry has lent support – either financially, or by rais-
ing awareness, or through the volunteer work of our
staff – to a number of nonprofit organizations and so-
cial or humanitarian initiatives, as well as supporting
cultural events and entities.
2020 will be a year marked by the COVID-19 pandemic
and its impact over all aspects of our lives. That has
also been reflected in our interactions with the com-
munities in the many locations in which we operate.
Aware of the extreme pressure that health and assis-
tance services experienced during the toughest
months of the pandemic, we made contributions by
donating food, confectionery and sanitary products
to hospitals and care homes at the time they were
most needed.
Nevertheless, the sponsoring and support of disad-
vantaged children, young people and their families, to-
gether with enabling them access to education, has
remained the main line of action in our corporate com-
munity initiatives. At country level, similar projects
have been supported and, in some of these operations,
our employees have actively participated in the pro-
cess of selecting the projects we support, reinforcing
the engagement and motivation to collaborate with
the initiatives.
Dufry´s support to these causes is sustained in direct
monetary contributions complemented by the para-
mount role of our customers, who help us raising ad-
ditional funds by buying charitable products in our
stores in support of different NGOs, as well as by mak-
ing donations in the boxes available in some of our air-
port locations. The pandemic and its impact in terms
of the reduction of passenger numbers, has inevitably
reduced the amounts raised through the sale of prod-
ucts in our stores. However, it has not stopped Dufry
from giving the much needed support, despite the
challenging conditions of this year.
Towards the end of 2020, we celebrated the soft
launch of Captain Dufry, our first global charitable ini-
tiative. Captain Dufry is a soft toy dog and the profits
from the sale of Captain Dufry toys will be donated to
the SOS Children’s Villages. Dufry has supported this
charity for over ten years and benefits from this global
initiative will serve to improve the living conditions of
many children and their families. Beyond the financial
objective pursued with Captain Dufry, this initiative will
also serve to increase awareness around SOS Chil-
dren’s Villages and their activities. Captain Dufry has
already made his debut in many of our airport stores,
and we will continue with his rollout throughout 2021.
We are also very proud of the activities carried out by
our staff to support disadvantaged communities and
charitable initiatives, often during their own free time.
The pandemic has brought new needs that went be-
yond the material dimension, and these new needs
have been addressed by many of our employees, who
have gone “above and beyond” in terms of the help they
have given to colleagues, neighbors and anyone in need
around them. Where and when possible, we have sup-
ported and funded them and made the individuals and
their great work visible to the rest of their colleagues,
by using our internal communication channels. This
serves a two-fold purpose, helping them to obtain vi-
tal, additional support and also providing a way of rec-
ognizing and thanking them for their philanthropic ef-
forts.
The initiatives and projects described in the next few
pages represent some of the most prominent projects
110
2 Community Engagement
DUFRY ANNUAL REPORT 2020
we support. The progress made and the encouraging
results of our on-going support to these initiatives –
the earliest Dufry supported project started in 1995 –
make us feel very proud and is an incentive to
strengthen our ties with them. Despite the COVID-19
related negative impacts on the travel and travel re-
tail industries, and on our business results in 2020, we
strongly believe that the most vulnerable in our com-
munities need the continuous support of Dufry and
companies like us.
SOS Children’s Villages supported programs
in Brazil, Mexico and Kenya
Dufry and SOS Children’s Villages have been working
together for more than ten years, supporting families
worldwide with the aim that no child should grow up
alone. Back in 2009, Dufry began sponsorship of an ini-
tial project focused on preventive care in Igarassu, in
the northeast of Brazil. The construction of a social
center was a tangible example of investing in the care
of children and young people. Dufry has been continu-
ing to support the running costs and training classes
of the center ever since. In 2020, our donation bene-
fited nearly 400 infants, young children and teenagers
with their mothers and enabled them to join family
strengthening programs focused on building self-
esteem, improving gender relations and preventing do-
mestic violence. Mothers were given the opportunity
to leave their children in the child-care center during
the day so that they could go to work and earn a living
for themselves and their children. In addition to sup-
porting this center, Dufry finances the annual family-
budgets, medical costs and school fees for children in
the SOS Children’s Village of Igarassu.
In Mexico, Dufry supports SOS Children Villages Fam-
ily strengthening programs in Comitán. Located in
southern Mexico in the state of Chiapas, historically
one of the poorest in Mexico, this city is known for its
high rates of poverty and social exclusion. The pro-
grams of SOS Children’s Villages in the social center
in Comitán ensure that children are included in early
childhood development programs. The program aims
to alleviate hardship in the community in a holistic and
sustainable manner, provide childminding and day-
care programs, which enable working parents or sin-
gle mothers to leave their children in safe hands. Moth-
ers hence have better opportunities to go to work and
earn their own income, as they can count on day-care
solutions for their children. Fathers on the other hand
receive awareness raising support in connection with
educational matters and are helped and encouraged
to become more constructively involved in family re-
sponsibility, thus improving the overall quality of life
for these families. The financial support covers ex-
penses for food, school expenditures, medical assis-
tance and educational staff. Dufry’s contribution in
2020 supported more than 1,000 beneficiaries.
In 2020, Dufry started supporting a family strength-
ening program in Nairobi, Kenya. This program seeks
sustainable and innovative ways to prevent family sep-
aration and address the situation of those children
who are at risk of losing care from their biological fam-
ily. The pillars of this program are family empowerment
and community empowerment to achieve the ultimate
development of children through provision of quality
care and protection. Community-based partners are
strategically identified, assessed and engaged to help
create a strong safety net around the vulnerable chil-
dren and youth in the community. Diverse partners are
actively sought and resources mobilized to increase
impact through the provision of proper nutrition, qual-
ity education and healthcare, decent housing, training
and development for young people, capacity develop-
ment for caregivers and community-based partners,
as well as emergency response when necessary.
Beyond Dufry´s global contribution to SOS Children’s
Villages, a number of our operations – including those
in Italy, Sweden and Finland – also support the local
SOS Children’s Villages projects in their correspond-
ing countries. Their contributions, big and small, help
this organization in their objective of keeping families
together, providing alternative care when needed, sup-
porting young people on their path to independence,
and advocating for the rights of children.
Captain Dufry –Dufry´s first truly
global charity initiative
Supporting charities and contributing to the commu-
nities where it operates has always been at the core of
Dufry’s way of doing business. Over the years this has
crystallized in a long list of charitable initiatives sup-
ported at local level by our operations. The last quar-
ter of 2020 however saw the kick-off of Dufry´s first
global charity initiative with the launch of Captain
Dufry.
Captain Dufry is a soft toy dog wearing a Dufry scarf
and aviator hat with goggles, which is gradually being
made available across Dufry stores in 23 countries.
However, the most important part of this toy is not
that visible: benefits obtained from the sale of Captain
Dufry will be donated to charities and, for the next
couple of years, Dufry has collaborated with SOS
Children´s Villages to receive the proceeds of this ini-
tiative.
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2 Community Engagement
DUFRY ANNUAL REPORT 2020
Captain Dufry is available at an accessible price and
designed to be an irresistible “feel-good” impulse pur-
chase. This item gives Dufry’s customers the perfect
opportunity to buy a gift that truly makes children feel
special – both their loved ones and those in need of
support around the world.
The availability of Captain Dufry in stores is supported
with in-store communication and signage to build
awareness. Dufry is identifying high visibility spaces
across the stores where Captain Dufry is to be made
available – including dedicated sales displays and gon-
dolas. On top of this, Dufry customers are offered ad-
ditional options to donate using the Red By Dufry App,
hence, increasing the possibilities of helping this char-
ity initiative even more.
One Water – selling bottles
to provide sustainable clean water
World Duty Free continues to be one of The One Foun-
dation’s main commercial supporters, a role it has held
almost since the beginning of the partnership in 2016.
World Duty Free sells the charity’s bottled “One Wa-
ter” and branded jute bags in all of its UK airport
stores. To date, World Duty Free has raised £ 2.3 mil-
lion for clean water and sanitation projects, changing
in the process over 417,000 lives.
In 2020, World Duty Free helped continued to help im-
proving water services in low-income areas in Nairobi
through the promotion of household connections and
pre-paid water dispensers. World Duty Free’s support
has also helped to repair broken water points in rural
communities in Malawi, to train community members
to manage and maintain their water points for future
sustainability, and to help deliver piped water systems
in Rwanda.
Over the years, World Duty Free employees have been
selected to go on trips to Malawi as part of a staff in-
centive to recognize stores that have shown the most
growth in terms of One Water related sales. Employ-
ees who were nominated to go on the trip, are real ad-
vocates for the brand and the experience provides
them with a chance to see for themselves the life
changing work that One Water is doing. In 2020, six
employees from our UK operation traveled to Rwanda
to see the impact of The One Foundation’s work on the
ground and see how this life-changing program is
working with key stakeholders such as local govern-
ment, communities and utility companies to deliver
piped water into the districts of Rulindo, Kicukiro and
Gicumbi.
112
These journeys to Africa are a great way to inspire our
staff to get involved and keep supporting the One Wa-
ter projects, taking back to the stores and our custom-
ers all that they have learnt.
Awareness campaign of the United Nations’
Sustainable Development Goals
The #YouNeedToKnow campaign to raise awareness of
United Nation´s Agenda 2030 and its 17 Sustainable
Development Goals returned for the fourth year in a
row to Zurich and Basel airports in January 2020, in
time to grab the attention of people heading to the
World Economic Forum Annual Meeting in Davos.
The campaign was first launched in Geneva in Novem-
ber 2016. It has since travelled around the world’s larg-
est airports, including Zurich, Madrid, London Heath-
row, Malpensa in Milano, Mexico and Moscow. Between
January 15 and February 14, 2020 the around 80,000
daily travelers transiting through Zurich airport were
greeted at a 50 m2 pop-up stand showcasing commu-
nication material related to the UN Sustainable Devel-
opment Goals (SDGs), including videos, publications
and games, urging them to rally around the Global
Goals and think about how to rid the world of poverty,
provide quality education, guarantee gender equality
and foster economic growth, among the many chal-
lenges the world must tackle swiftly.
Charity Water Project in Zurich and Basel Airports
The Charity Water project launched in 2014 as a joint
project between Flughafen Zurich AG and Dufry, con-
tinued in 2020. With the sale of bottles of mineral wa-
ter in our airport stores, Dufry has been able to sup-
port several charity organizations, which are usually
updated every year.
In 2020, Dufry has continued its cooperation with the
Children’s Hospital (Kinderspital Zurich, locally known
as “Kispi”). The Children’s Hospital is a non-profit pri-
2 Community Engagement
DUFRY ANNUAL REPORT 2020
CAPTAIN DUFRY
Benefits of the sale are donated
to SOS Children’s Villages.
1
2
1
1
1
NAIROBI | KENYA
Dufry supports SOS Children’s Village´s family
strengthening programs in Nairobi, Kenya.
2
IGARASSU | BRAZIL
Dufry continued to sponsor SOS Children’s Village
preventive care in Igarassu, Brazil.
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2 Community Engagement
DUFRY ANNUAL REPORT 2020
vate institution serving all children and adolescents.
It is the largest university children’s hospital in Swit-
zerland and one of the leading centers for pediatric and
adolescent medicine in Europe. Each year, approxi-
mately 2,300 dedicated employees are committed to
care for the wellbeing of more than 100,000 young pa-
tients, from the first day of life to the age of 18. At the
same time, with the sale of bottled water in our stores
at Basel Airport we continued to support the NGO
Krebskranke Kinder Basel, an NGO supporting children
with cancer being treated in the University Children’s
Hospital of Basel. This foundation plays an important
role in helping families financially with uncovered costs
related to childhood cancer, as well as providing pro-
fessional support for families in this difficult phase of
their life.
Sponsoring children’s education in Haiti
As corporate sponsor since 2014, Dufry continued its
support to the Hand in Hand for Haiti Foundation, sup-
porting the NGO´s Student Sponsoring Program. Hand
in Hand for Haiti runs the “Lycee Jean-Baptiste Pointe
du Sable”, which was built as part of the collective re-
sponse to the humanitarian crisis in Haiti, following the
catastrophic earthquake of January 12, 2010. Through
Dufry’s sponsorship, children receive trilingual educa-
tion in French, English and Creole, as well as meals,
health services, uniforms and school supplies and free
bus transportation to and from school.
Rio de Janeiro, Brazil – Helping to build the future
of young teenagers
Since 1995, Dufry has been sponsoring a social pro-
motion program in Rio de Janeiro aimed at improving
the skills of young people and, hence, increasing their
employability. This program features free professional
education to young people from communities around
Galeão Airport, including various classes and educa-
tion modules such as English, computer classes, retail
operations, professional orientation, teamwork, lead-
ership, rules of etiquette, ethics and citizenship. The
daily classes are attended by 16 to 20 year-old female
and male students, who receive free meals, medical
and dental care, uniforms, school and educational ma-
terials as well as transportation assistance. The com-
mitment of Dufry with this program goes a stage fur-
ther by supporting attendees in their first steps into
professional life. Dufry coaches students on their ca-
reer progression, alerting them to any job opportuni-
ties within Dufry’s organization or with external part-
ners and giving support on how to successfully face a
recruitment process. This program is also an institu-
tion amongst Dufry employees and one of the initia-
tives Dufry Brazil staff feel very proud of. Our staff in
Brazil act as mentors to the program´s students and
every year, more than 60 volunteers from both Dufry
and its Brazilian partners get involved.
Over the 25 years that this program has run, it has
proved to be a great success. Employability rates usu-
ally reach high levels for participating students and
since Dufry started its collaboration, over 730 teen-
agers have benefited. And, whilst during 2020 the ed-
ucation activity was canceled due to the pandemic,
Dufry is determined to keep supporting this program.
Hudson supports communities in need
In 2020, Hudson continued its long-term partnership
with Communities in Schools (CIS), raising funds
through its in-store donation program. CIS is the larg-
est and leading school dropout prevention group in the
United States, serving nearly 1.6 million at-risk stu-
dents. With COVID-19 disrupting in-school learning,
Hudson’s partnership with CIS was more important
than ever this year. Hudson’s funds have helped CIS in
providing technology for remote learning as well as
access to mental health resources, social services and
regular meals that students relied on from schools
prior to COVID-19. Over the past 10 years, Hudson has
raised more than USD 4 million for Communities in
Schools, serving more than 15 million students during
the duration of the partnership.
In late 2019 and into the beginning of 2020, Hudson
also raised funds for Habitat for Humanity of Greater
Los Angeles to rebuild areas devastated by wildfires in
Southern California. Raising more than USD 136,000
through in-store fundraising, the donations supported
the Disaster Relief Program, which serves low-income
families whose homes were damaged or destroyed in
wildfires. Combined with funds raised previously for
Habitat for Humanity wildfire relief, Hudson has do-
nated over USD 336,000 to-date.
Manchester HOME project
Opened in 2015, HOME is Manchester’s cultural orga-
nization founded by the merger of two of the city’s
long-standing arts venues – Cornerhouse, established
in 1985 and the Library Theatre Company, founded in
1952. World Duty Free’s partnership with the Greater
Manchester Arts Centre (HomeMcr) supports work
with local schools, youth centers and community cen-
ters in the Wythenshawe area (south of Manchester).
Since 2016, World Duty Free has funded workshops at
The Wythenshawe Community Workshop and projects
at the Wythenshawe Primary & Secondary School.
These projects provide opportunities to young people
and pupils to expand their horizons, develop new skills
and increase their confidence. The opportunity for
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2 Community Engagement
DUFRY ANNUAL REPORT 2020
children and young people to take part in creative
workshops that help to develop a range of skills are
fun, but most importantly, the projects give the group
a chance to maximize their potential for future train-
ing and employment.
Mind – for better mental health
On its second year of a three-year partnership, World
Duty Free in the UK continued collaboration with Mind,
the mental health charity supporting individuals who
suffer from mental health problems. Mind empowers
people through advice, support and clear information.
They campaign to improve services, battle stigma and
end discrimination. In addition to its support of Mind,
World Duty Free UK staff in Scotland and Northern
Ireland continued supporting the Scottish Associa-
tion for Mental Health (SAMH) and Inspire respectively.
All three charities work towards the shared goal of
supporting people with mental health problems and
promoting awareness and understanding of mental
health.
Mental health was one of the side effects of the 2020
COVID-19 pandemic. The months of lockdown and the
anxiety and uncertainty generated by the sickness,
have had a huge impact on mental health, with new
mental health problems developing and existing ones
getting worse. The importance of the work of this NGO
hence became even more relevant, and the raising of
awareness about mental problems, as well as how to
get help and tackle them, became more urgent. The
most remarkable event of the year coincided with the
celebration of World Mental Health Day, when World
Duty Free colleagues in the UK supported Mind through
a number of activities organized to raise awareness,
connect with colleagues and raise funds.
Fundación Aladina – supporting children
with Cancer
Fundación Aladina is a Spanish NGO that provides
comprehensive support to many cancer-diagnosed
children and teenagers and their families. The support
given include psychological andemotional support, as
well as material and financial assistance. With its do-
3
4
3
COMITÁN | MEXICO
SOS Children Village in Comitán, Mexico, improves
education and quality of life.
4
THE ONE FOUNDATION | RWANDA
In Rwanda, One Foundation trains community
members to manage and maintain water points.
115
other local causes in real need during these challeng-
ing times.
In Spain, over 9,000 facemasks and hydro-gels were
donated by Dufry to Spanish hospitals in response to
the lack of self-protection materials suffered at the
beginning of the pandemic, providing much needed
support to medical professionals.
And a long list of other local contributions
There is a long list of yet more causes our staff con-
tribute to and this has continued to grow in 2020. The
high school scholarships program initiated a few years
ago in Korea; the supply of school furniture in Argen-
tina; and countless numbers of charity runs, bike rides,
bake sales and more to support the many deserving
projects. All these initiatives are often initiated by
members of our staff and backed by Dufry, both with
financial contributions and creating internal aware-
ness to increase participation amongst our employ-
ees. We are very proud of our staff and the response
given over the year, including a long list of individuals
who have cared for those around them and lent sup-
port to local communities and colleagues in need, dur-
ing this very challenging year.
2 Community Engagement
DUFRY ANNUAL REPORT 2020
nations, Dufry supported Aladina´s Extraordinary Spe-
cial, which finances the purchase of prosthesis, wigs,
wheelchairs, hearing aids, physical therapy sessions,
funerals, and any other expenses incurred as a result
of the child’s illness. The support during 2020 was es-
pecially needed due to the growing needs that emerged
as a consequence of the pandemic.
Support to multiple projects in Greece
Hellenic Duty Free Shops supplied fuel to heat up
schools in the Northern areas of Greece. It also spon-
sors a variety of annual events that take place in ar-
eas where the company operates and supports a num-
ber of organizations through fund raising activities and
direct donations. Amongst others, Hellenic Duty Free
Shops have supported Make a Wish Hellas, SOS Chil-
dren’s Villages Greece, Galilee Palliative Care Center
and the Skytali Hellenic Heart-Lung Transplant Asso-
ciation.
Ongoing support to Richmond Hospital
Foundation in Vancouver
For the fourth consecutive year, World Duty Free Van-
couver continued its support to the Richmond Hospi-
tal and its community of care, by raising over
USD 38,000 towards the Acute Care Tower for Rich-
mond Hospital. Realizing the need for a new tower and
understanding the impact it will have for health care in
the community, World Duty Free Vancouver has com-
mitted to raising USD 100,000 towards the ACT (Acute
Care Tower) NOW campaign within three years. Rich-
mond Hospital urgently needs a new Acute Care Tower
to replace the original hospital tower, which is more
than 50 years old, seismically unstable and obsolete
with a severely deficient infrastructure and unable to
meet the needs of Richmond’s dramatically growing
and ageing population.
Supporting healthcare workers on the front line
Dufry and especially our staff were aware of the ex-
treme pressure that the national medical and health
services were going through during 2020, especially in
the first few months of the COVID-19 pandemic and
the latter months of the year. And as Dufry had to
start closing down stores due to travel restrictions,
there was an opportunity to make donations to hospi-
tals and care homes of the food and confectionery
products that would otherwise expire in warehouses
across many locations. In the case of the UK, a num-
ber of members of our staff volunteered to make mul-
tiple product deliveries to selected hospitals and care
homes located near the airports where Dufry oper-
ates. This was coupled with lots of fundraising activi-
ties to support the UK´s National Health Service and
116
FINANCIAL
REPORT
2020
3 Financial Report
DUFRY ANNUAL REPORT 2020
MOST
CHALLENGING
YEAR ENDS WITH
STRONG LIQUIDITY
DEAR ALL
2020 was a challenging year for the travel retail indus-
try. Dufry’s results were heavily impacted by CO-
VID-19, with turnover reaching CHF 2,561.1 million and
organic growth of –69.8%. Our company had to deal
with temporary and alternating closures of the major-
ity of its operations in the second quarter 2020, with
re-openings having started gradually from June on-
wards. Due to both, the closures forced by govern-
mental travel restrictions and the low visibility on the
pandemic’s extent and duration, we had to react
quickly and decisively across all levels of the organi-
zation and in close collaboration with our stakehold-
ers such as landlords, global brands and suppliers, em-
ployees, banks, and our bond- and shareholders.
Despite these challenges, we succeeded in signifi-
cantly reducing our recurring cost base, organizational
complexity and average monthly cash consumption
and built a strong financial position of CHF 1,905.7 mil-
lion in liquidity as of end-December 2020.
Dufry’s capital struc-
ture strengthened.
year 2020, and provided guidance on concession fees,
personnel and other expenses accordingly. At the ear-
liest point, we were able to reduce our average monthly
cash consumption to CHF 70-75 million in a zero-sales
worst-case scenario. Average monthly cash outflow
has been better throughout the second half of 2020.
initiatives to
In April 2020, Dufry announced
strengthen its capital structure and liquidity position.
Dufry successfully placed CHF 350 million in senior
bonds due 2023, conditionally convertible into shares,
with maturity on May 4, 2023, and 5,000,000 new
shares out of existing authorized capital as well as
500,000 treasury shares, generating gross proceeds
of CHF 151.3 million.
The company also secured commitments from some
of its lending banks based on a term sheet for an
approx. CHF 397.0 million 12-months facility with two
6-months extensions, which allowed Dufry to convert
current uncommitted into committed facilities. Dufry
also secured access to a total of CHF 205.0 million of
COVID-19-related government-backed loans in differ-
ent jurisdictions.
Throughout 2020, Dufry worked on several strategic
and financial initiatives. In March, we immediately im-
plemented an action plan which included initiatives to
accelerate sales volumes, stop inventory build, reduce
personnel and other expenses as well as renegotiat-
ing rents to safeguard profitability, secure cash flow
generation and protect liquidity.
Dufry entered into an agreement with its bank consor-
tium to waive the existing financial covenants of 4.5x
net debt/adjusted operating cash flow (LTM/constant
FX) until end of June 2021 and assign a higher lever-
age covenant of 5x net debt/adjusted operating cash
flow (LTM/constant FX) for the September and Decem-
ber 2021 testing periods.
Based on forecasts of industry associations and inde-
pendent data providers, Dufry applied a -40%, -55%
and -70% turnover scenario versus 2019 to the full-
Dufry also recommended to shareholders to cancel
the 2020 dividend payment to reduce short-term cash
outflows in this unprecedented situation; the Annual
General Meeting granted the motion in May 2020.
¹
For a glossary of financial terms and key performance indicators
please see page 239 of this Annual Report.
118
3 Financial Report
DUFRY ANNUAL REPORT 2020
1,906
CHF 1,905.7 million
liquidity as of
end December 2020.
During Q2 2020, the COVID-19 pandemic had spread
globally and it became clear that short-term disrup-
tions were ongoing, while mid-term impacts were
unpredictable. Based on preparations for a Group-
wide efficiency program initiated in 2019 and with
implementation planned from 2020 onwards, we
decided to accelerate the reorganization of the com-
pany to adapt it to the new business environment.
Our cash consumption, defined as EFCF, during the
first half 2020 was mainly attributable to conces-
sion fee payments, inventory build and tax,
whereas during the rest of the year, cash con-
sumption, was significantly reduced to a monthly
average of CHF 45.7 million in the second half of
2020. For the full year 2020 we achieved savings
of CHF 1,312.1 million consisting of MAG reliefs
of CHF 551.4 million, personnel and other ex-
pense savings of CHF 527.3 million and
CHF 233.4 million respectively, significantly
overachieving the previously communicated
target of around CHF 1 billion.
Significant struc-
tural cost savings.
We expect to generate structural savings of
around CHF 400 million, with around CHF 280
million from personnel costs and around
CHF 120 million from other expense savings,
not including some inflation in the mid-/lon-
ger-term.
As part of our reorganization to further sim-
plify our corporate structure, we acquired all
remaining equity interest in Hudson for ap-
proximately CHF 280 million, and delisted the
company from the New York Stock Exchange.
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DUFRY ANNUAL REPORT 2020
Dufry’s shareholders approved the financing of the
transaction through a capital increase by way of
a rights offering at Dufry’s Extraordinary General
Meeting (EGM) in October, and the transaction was
closed in December 2020. The North-American busi-
ness was already fully consolidated by Dufry before
the transaction and delisting; the reintegration con-
tributes materially to the anticipated cost savings.
Sufficient liquidity to
navigate crisis.
As part of the capital increase in October, Dufry had
secured participation commitments from two new
important shareholders Advent International and
Alibaba Group. Immediately following the closing of
the offering, Advent International owned a stake of
11.4% in Dufry and Alibaba Group of 6.1%. Dufry en-
tered into an additional agreement, under which Alib-
aba Group invested CHF 69.5 million in Dufry via man-
datory convertible notes, generating total gross
proceeds of CHF 890 million through the capital
increase. The liquidity position of Dufry at the end of
December 2020 amounted to CHF 1,905.7 million, giv-
ing us enough stability to navigate the crisis and finan-
cial flexibility to act on selected growth opportunities
during and beyond the recovery.
Turnover in Europe, Middle East and Africa was
CHF 1,144.5 million in 2020 from CHF 4,434.2 million
one year ago. Organic growth in the division reached
-73.2%.
Performance improved in July and August across
Europe, especially in Southern Europe with the peak of
the summer holidays and supported by the lifting of
travel restrictions. From end-August onwards, some
countries such as Spain, France, and the UK saw in-
creased COVID-19 cases, resulting in renewed travel
limitations put in place more broadly from end of
September onwards. The Mediterranean region, but
also Eastern Europe, Russia, the Middle East and Africa
performed above average for the region, driven by less
restrictions and available travel corridors, e.g. between
Russia and Turkey.
Asia-Pacific’s turnover reached CHF 160.0 million in
2020 from CHF 691.6 million in 2019 and organic
growth for the year stood at –75.4 %, as Dufry’s foot-
print in the region is geared towards international
travel, which is still highly impacted. The APAC region
was the first impacted and closing borders for inbound
and outbound travel as the pandemic appeared in the
region. The majority of the shops in Dufry’s Asia-
Pacific locations were closed, including Australia,
Hong Kong, Indonesia, Malaysia, South Korea, as con-
ditions were not beneficial for international travel.
Financial performance
impacted.
Central and South America’s turnover stood at
CHF 497.3 million in 2020 versus CHF 1,536.1 million in
2019, with organic growth in the region reaching
–65.8% in the year.
Turnover
In 2020, turnover reached -69.8% versus 2019 in con-
stant currency, mainly impacted by the pandemic-
related travel restrictions. Organic growth for the year
stood at -69.8% with like-for-like at -67.2% due to
reduced passenger traffic across most airports and
other travel-related channels globally. Net new con-
cessions represented -2.6%. The translational FX
effect in the period was -1.3% mainly as a result of the
USD weakness.
Despite the shift in travel behavior due to restrictive
measures – more domestic and intra-regional travel,
strongest decline in international and business – the
category mix remained nearly unchanged compared
to FY 2019 with highest demand for perfumes & cos-
metics, followed by food & confectionary. Duty-paid
gained in demand driven by domestic and intra-
regional travel, with no significant channel shift
despite travel restrictions.
Central America and Caribbean, including Mexico,
Dominican Republic and the Caribbean Islands, were
performing more robustly compared to all other
regions, driven by intra-regional travel from the US
and South America as well as international travel as
more flexible travel conditions met continued demand.
The cruise business located in the region, was heavily
impacted. South America saw demand pick-up in the
fourth quarter amid border shop openings and
increase of domestic and intra-regional travel, with
re-openings in Argentina, Brazil, Peru, among others.
Turnover in North America amounted to CHF 644.4
million compared to CHF 1,935.8 million in 2019 and
organic growth came in at -65.3 % in the year. The
region, especially the US, performed above group
average due to the higher exposure to domestic
travel. Intra-regional travel from the US to Central
America was also supportive. Our operations in Canada
remained negatively impacted due to a higher expo-
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3 Financial Report
DUFRY ANNUAL REPORT 2020
sure to international flights and ongoing restrictive
measures. The performance was driven by Hudson
convenience stores, food and beverage and other
duty-paid offerings.
government support schemes whenever possible, as
well as the implementation of voluntary salary reduc-
tion schemes. Personnel expenses include CHF 73.3
million for restructuring accrued in 2020.
FINANCIAL RESULTS
Gross profit
Gross Profit reached CHF 1,377.3 million in 2020 com-
pared to CHF 5,323.2 million in the previous year,
reaching a Gross Profit margin of 53.8%. Our Margin
was affected by the turnover mix from the retail versus
the wholesale business, short-term inventory manage-
ment through wholesale and promotions, and a higher
duties and freight ratio. One-time inventory write-offs
related to the heavily impacted cruise business
and liquidation programs performed during 2020
accounted for 350 base points. Purchasing prices have
not been affected by the pandemic and we expect a
normalization of our Gross Profit margin throughout
2021 and 2022.
Adjusted Operating Profit (Adjusted EBIT)
Adjusted Operating Profit (adjusted EBIT) was at CHF
–1,561.6 million in 2020 versus CHF 767.7 million the
same period of 2019.
Lease expenses reflected an income of CHF 8.0 mil-
lion in 2020 compared to CHF –1,372.9 million in 2019.
Expenses decreased due to lower level of sales and
COVID-19 related reliefs of minimal guaranteed
amounts (MAG) negotiated with airport authorities and
landlords. MAG reliefs refer to waiving of fixed rent
components and implementing variable concession
schemes instead, or to adjusting fixed MAGs to lower
passenger numbers as well as reduced flights and
operating hours. Up to December 31, 2020 we were
able to close several lease obligation agreements
releasing about CHF 551.4 million of MAGs, thereof
CHF 380.3 million recognized in the 2020 P&L state-
ment as MAG reliefs, with the remainder subject to
different IFRS-16 accounting treatments and recog-
nition over time. In our pursuit of the best result for
Dufry, many concession negotiations included changes
in terms not covered by the IFRS 16 expedient, thus
resulting in a lease modification, i.e. reduced right-of-
use assets and lease obligations generating lower
depreciations in future periods rather than the recog-
nition of the MAG relief in 2020.
Personnel expenses amounted to CHF -716.0 million in
2020, from CHF -1,243.3 million one year earlier, thus
representing a decrease of -42.4% compared to 2019.
Savings were driven by our efficiency program, which
included reducing costs at all levels, making use of
Other expenses net reached CHF –328.2 million in
2020 versus CHF –561.6 million in the same period last
year. The decrease of –41.6% compared to 2019 reflects
our initiatives to reduce as much as possible all oper-
ating expenses and other cost items, as well as the
effect of implementing the centralized OPEX manage-
ment as part of the our Group re-organization.
Total savings
2020 amounted
to CHF 1.3 billion.
Depreciation, amortization and impairment amounted
to CHF -2,841.9 million in 2020 versus CHF –1,777.0 mil-
lion last year. The increase is related to the recogni-
tion of impairments of CHF –1,193.2 million in 2020 as
a consequence of the pandemic, whereof CHF –443.1
million are impairments on right-of-use assets and
CHF –712.8 million refer to impairments on acquisition-
related intangible assets. Nearly all our shops world-
wide were required to close to help curb the spread of
COVID-19 or have been subject to very low passenger
traffic, all these affecting severally the actual turn-
over, as well as projections. An overall amount of
CHF 1,024.8 million of impairments is related to depre-
ciable and amortizable asset, and represent a timing
shift in this regard. Only CHF 131.1 million are related
to goodwill impairments, which were already disclosed
with half-year 2020. As we have grown heavily in the
past through acquisitions, future cash flow inherent
to the corresponding concessions are capitalized on
our balance sheet based on the purchase acquisition
accounting. In a unprecedented year like this, these
cash flows have not crystalized, leading almost
mechanically to impairments.
Net Profit
Net Profit to Equity Holders reached CHF -2,513.7 mil-
lion in 2020 versus CHF -26.5 million in the same period
last year. Financial results (excluding Lease Interest
and FX) amounted to CHF –191.8 million versus CHF
–127.6 million in the previous period, due to one-off
expenses related to financing measures, as well as
lower interest income.
Income tax reached CHF 130.7 million versus CHF
–78.2 million last year, driven by the loss situation of
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DUFRY ANNUAL REPORT 2020
most of operations. Minorities were CHF –226.8 million
for 2020 versus CHF 56.6 million last year.
Adjusted Net Profit reached CHF –1,658.4 million in
2020 versus CHF 349.3 million last year. The respec-
tive adjusted Earnings per Share (EPS) based on 58.5
million of weighted average shares outstanding was
CHF –28.4 in the period versus CHF 7.00 in the previ-
ous year.
Cash flow
Cash flow metrics proved relatively resilient consid-
ering the significant drop in sales caused by the pan-
demic-related shop closures. Adjusted operating cash
flow reached CHF –405.9 million in 2020 compared to
CHF 960.0 million in 2019. Equity Free Cash Flow stood
at CHF –1,027.3 million in 2020 compared to CHF 383.3
million in the previous year.
Net lease payments in full-year 2020 amounted to CHF
–401.8 to million versus CHF –1,263.7 million last year.
The reduction was driven by reliefs received from
landlords.
Changes in working capital reached CHF –313.9 million
in 2020, compared to CHF –24.4 million in 2019; changes
in core working capital amounted to CHF –155.2 mil-
lion compared to CHF 22.4 million in 2019. The main
drivers for the variation were the decrease in trade
payables of CHF –462.4 million with full payments to
suppliers in Q4 2020 as well as other accounts payable
due to a decrease in accrued concession fee payables
of CHF –98.4 million. Inventories decreased by CHF
–296.3 million due to inventory restructuring and effi-
ciencies in liquidations. We expect a working capital
inflow in 2021, with a full reversal with sales normal-
ization.
Capex was significantly reduced from CHF –245.3 mil-
lion in 2019 to CHF –106.0 million in 2020, as we put
Capex investments on hold as much as possible since
March 2020 and by adapting our overall Capex deploy-
ment approach. Therefore, Dufry expects no catch-up
in Capex in the short- or mid-term.
Net Debt and Liquidity Position
Net Debt amounted to CHF 3,344.2 million at the end
of December 2020 compared to CHF 3,102.0 million
in December 2019. Our liquidity position stood at
CHF 1,905.7 million as of December 31, 2020, includ-
ing:
– Cash and cash equivalents of CHF 360.3 million
– Available credit lines of CHF 1,441.3 million
– Available uncommitted lines of CHF 104.1 million
122
Considering all measures taken throughout 2020, we
expect to be well positioned for the re-opening and
growth acceleration beyond the current crisis. For
2021, we provide again, as for Full-Year 2020, turnover
scenarios to the market, which are in line with esti-
mates of leading industry associations. Scenarios and
respective sensitivities for concession fees, person-
nel expenses, other expenses, Capex as well Equity
Free Cash Flow are provided in our Full-Year 2020 on
Dufry’s Investor Relations website.
Managing costs and
cash flow in 2021.
We expect a stabilization of the business in 2021 while
we engage in opportunities ahead of us: growth oppor-
tunities in Asia, through digitalization, further channel
diversification, and new or renewed concessions in
established channels. Visibility regarding a full recov-
ery to 2019 turnover levels is still limited, with industry
associations estimating a full recovery of passenger
numbers to a 2019 level between the end of 2022 and
2024. However, based on the efficiencies created
through our reorganization, our cost saving targets
and tight cash management, we expects a return to
2019 profitability and cash generation levels even
before full turnover recovery.
I would like to thank our customers, shareholders,
bondholders, banks, analysts and key advisors for their
continued trust in Dufry and their support through-
out this difficult year, to initiate and execute the right
measures to help us emerge stronger and be in the
best position to be able to take advantage of the
opportunities we see on the way ahead.
Kind regards,
Kind regards,
Yves Gerster
3 Financial Report
DUFRY ANNUAL REPORT 2020
CONSOLIDATED CASHFLOW
IN MILLIONS OF CHF
Net cash flow from operating activities
Lease payments, net
Capex
Interest received
Free cash flow
Interest paid
Cash flow related to minorities
Proceeds from other financial assets
Equity free cash flow
Acquisition of Hudson shares / Business combinations
Financing activities, net
FX adjustments and other
Decrease / (Increase) in net debt
CONSOLIDATED INCOME STATEMENT
CONTINUING OPERATIONS
Turnover
Cost of sales
Gross profit
Lease expenses
Personnel expenses
Depreciation, amortization and impairment
Other expenses and other income, net*
Operating profit / (loss)
Finance income, finance expenses and foreign exchange gain / (loss),
net
Profit / (loss) before taxes
Income tax
Net profit / (loss)
ATTRIBUTABLE TO
Non-controlling interests
Equity holders of the parent
EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS
OF THE PARENT
Basic earnings per share in CHF
OTHER DUFRY KPI'S
Adjusted operating profit
Adjusted net profit
Adjusted earnings per share in CHF
* Includes CHF 64.4 million non-recurring income in 2019
2020
(345.3)
(401.8)
(106.0)
23.3
(829.8)
(168.8)
(34.7)
6.0
(1,027.3)
(275.4)
1,020.5
39.9
(242.3)
2019
2,107.7
(1,263.7)
(245.3)
31.2
629.9
(181.2)
(68.7)
3.3
383.3
(48.7)
(220.3)
69.9
184.2
IN MILLIONS
OF CHF
2020
IN %
IN MILLIONS
OF CHF
2019
IN %
2,561.1
100.0%
8,848.6
100.0%
46.2%
53.8%
(0.3% )
28.0%
111.0%
12.8%
(97.6% )
14.5%
(112.1% )
(5.1% )
(107.0% )
(1,183.8)
1,377.3
8.0
(716.0)
(2,841.9)
(328.1)
(2,500.8)
(370.4)
(2,871.2)
130.7
(2,740.5)
(226.8)
(2,513.7)
(43.01)
(1,561.6)
(1,658.4)
(28.37)
(3,525.4)
5,323.2
(1,372.9)
(1,243.3)
(1,777.0)
(497.2)
432.8
(324.5)
108.3
(78.2)
30.1
56.6
(26.5)
(0.53)
767.7
349.3
7.00
39.8%
60.2%
15.5%
14.1%
20.1%
5.6%
4.9%
3.7%
1.2%
0.9%
0.3%
123
3 Financial Report
DUFRY ANNUAL REPORT 2020
124
3 Financial Report
DUFRY ANNUAL REPORT 2020
FINANCIAL
STATEMENTS
2020
CONTENT
Consolidated Financial Statements
Consolidated statement of profit or loss
126
Consolidated statement of other comprehensive income 127
128
Consolidated statement of financial position
129 – 130
Consolidated statement of changes in equity
131– 132
Consolidated statement of cash flows
133 – 220
Notes to the consolidated financial statements
221 – 224
Report of the statutory auditor
Financial Statements Dufry AG
Statement of profit or loss
Statement of financial position
Notes to the financial statements
Report of the statutory auditor
225
226
227 – 236
237 – 238
125
125 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
126CONSOLIDATED STATEMENT OF PROFIT OR LOSSFOR THE YEAR ENDED DECEMBER 31, 2020 IN MILLIONS OF CHFNOTE20202019Net sales7 2,477.6 8,609.8 Advertising income 83.5 238.8 Turnover 2,561.1 8,848.6 Cost of sales (1,183.8) (3,525.4)Gross profit 1,377.3 5,323.2 Lease expenses8 8.0 (1,372.9)Personnel expenses9 (716.0) (1,243.3)Depreciation, amortization and impairment10 (2,841.9) (1,777.0)Other expenses11 (361.6) (618.8)Other income12 33.4 121.6 Operating profit / (loss) (2,500.8) 432.8 Finance expenses13 (385.4) (387.0)Finance income13 14.9 71.7 Foreign exchange gain / (loss)13 0.1 (9.2)Profit / (loss) before taxes (2,871.2) 108.3 Income tax14 130.7 (78.2)Net profit / (loss) (2,740.5) 30.1 ATTRIBUTABLE TONon-controlling interests (226.8) 56.6 Equity holders of the parent (2,513.7) (26.5)EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENTBasic earnings per share in CHF25.4 (43.01) (0.53)Diluted earnings per share in CHF25.4 (43.01) (0.53) 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
127IN MILLIONS OF CHFNOTE20202019Net profit / (loss) (2,740.5) 30.1 OTHER COMPREHENSIVE INCOMEChanges in the fair value of equity investments at FVOCI15– 0.3 Remeasurements of post-employment benefit plans15 1.0 (16.0)Income tax14, 15 0.6 1.7 Items not being reclassified to net income in subsequent periods, net of tax 1.6 (14.0)Exchange differences on translating foreign operations15 (237.1) (10.5)Net gain / (loss) on hedge of net investment in foreign operations 24.2 1.8 Share of other comprehensive income of associates15, 19 0.2 (0.4)Items to be reclassified to net income in subsequent periods, net of tax (212.7) (9.1)Total other comprehensive income, net of tax (211.1) (23.1)Total comprehensive income, net of tax (2,951.6) 7.0 ATTRIBUTABLE TONon-controlling interests (244.5) 53.4 Equity holders of the parent (2,707.1) (46.4)CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED DECEMBER 31, 2020 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
128CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAT DECEMBER 31, 2020IN MILLIONS OF CHFNOTE31.12.202031.12.2019ASSETSProperty, plant and equipment16 453.3 627.1 Right-of-use assets17 4,438.7 4,328.1 Intangible assets18 2,196.9 3,236.1 Goodwill18 2,369.3 2,611.3 Investments in associates19 7.1 31.9 Deferred tax assets31 145.5 122.1 Net defined benefit assets33– 3.4 Other non-current assets20 257.2 303.1 Non-current assets 9,868.0 11,263.1 Inventories21 659.6 1,050.0 Trade and credit card receivables22 17.1 44.2 Other accounts receivable23 315.0 422.0 Income tax assets 35.0 26.1 Cash and cash equivalents 360.3 553.5 Current assets 1,387.0 2,095.8 Total assets 11,255.0 13,358.9 LIABILITIES AND SHAREHOLDERS’ EQUITYEquity attributable to equity holders of the parent24 839.3 2,645.3 Non-controlling interests24, 26 78.7 462.7 Total equity 918.0 3,108.0 Borrowings27 3,650.6 3,602.2 Lease obligations28 4,022.9 3,319.0 Deferred tax liabilities31 321.9 396.8 Provisions32 42.5 41.1 Employee benefit obligations33 32.6 47.4 Other non-current liabilities30 43.5 88.3 Non-current liabilities 8,114.0 7,494.8 Trade payables 154.9 645.6 Borrowings27 53.9 53.2 Lease obligations28 1,397.5 1,085.7 Income tax payables 34.2 87.9 Provisions32 49.5 56.6 Other liabilities30 533.0 827.1 Current liabilities 2,223.0 2,756.1Total liabilities 10,337.0 10,250.9 Total liabilities and shareholders’ equity 11,255.0 13,358.9 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
129CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED DECEMBER 31, 2020ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENTIN MILLIONS OF CHFNOTEShare capital Share premium Treasury sharesCapital reserve for convertible notesEmployee benefit reserveTrans- lation reservesRetained earningsTOTALNON-CON-TROLLING INTERESTSTOTAL EQUITYBalance at January 1, 2020 252.8 3,475.5 (92.5)– (32.5) (329.9) (628.1) 2,645.3 462.7 3,108.0 Net Profit / (loss) of the period–––––– (2,513.7) (2,513.7) (226.8) (2,740.5)Other comprehensive income / (loss)15–––– 1.6 (195.0)– (193.4) (17.7) (211.1)Total comprehensive income / (loss) for the period–––– 1.6 (195.0) (2,513.7) (2,707.1) (244.5) (2,951.6)TRANSACTIONS WITH OR DISTRIBUTIONS TO SHAREHOLDERSDividends to non-controlling interests–––––––– (33.5) (33.5)Issuance of shares24 148.5 809.4 ––––– 957.9 – 957.9 Related transaction costs24– (35.0)––––– (35.0)– (35.0)Issuance of mandatory convertible notes24.3––– 69.5 ––– 69.5 –69.5Related transaction costs24.3––– (1.1)––– (1.1)–(1.1)Sale of treasury shares25.3–– 68.8 –––– 68.8 – 68.8 Share-based payments–– 22.4 –– (27.3) (4.9) (1.7) (6.6)Loss on sale of treasury shares–––––– (55.1) (55.1)– (55.1)Equity component of convertible bond–––––– 28.9 28.9 – 28.9 Tax effect on equity transactions14–––––– (0.2) (0.2) (0.1) (0.3)Total transactions with or distributions to owners 148.5 774.4 91.2 68.4–– (53.7) 1,028.8 (35.3) 993.5 CHANGES IN OWNERSHIP INTERESTS IN SUBSIDIARIESPut-option held by non-controlling interests–––––– 8.0 8.0 24.3 32.3 Other changes in participation of non-controlling interests–––––– (135.7) (135.7) (128.5) (264.2)Total changes in ownerships interests in subsidiaries26–––––– (127.7) (127.7) (104.2) (231.9)Balance at December 31, 2020 401.3 4,249.9 (1.3) 68.4 (30.9) (524.9) (3,323.2) 839.3 78.7 918.0 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
130CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED DECEMBER 31, 2020ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENTIN MILLIONS OF CHFNOTEShare capital Share premium Treasury sharesEmployee benefit reserveHedging & revalu-ation reservesTrans- lation reservesRetained earningsTOTALNON-CON-TROLLING INTERESTSTOTAL EQUITYBalance at January 1, 2019 269.4 4,060.6 (520.8) (18.1) (0.3) (324.1) (567.9) 2,898.8 442.9 3,341.7 Net Profit / (loss) of the period–––––– (26.5) (26.5) 56.6 30.1 Other comprehensive income / (loss)15––– (14.4) 0.3 (5.8)– (19.9) (3.2) (23.1)Total comprehensive income / (loss) for the period––– (14.4) 0.3 (5.8) (26.5) (46.4) 53.4 7.0 TRANSACTIONS WITH OR DISTRIBUTIONS TO SHAREHOLDERSDividends to shareholders24.1– (199.8)––––– (199.8)– (199.8)Dividends to non-controlling interests–––––––– (73.8) (73.8)Share capital reduction24 (16.6) (385.3) 401.9 –––––––Assignment of treasury shares–– 26.4 ––– (27.8) (1.4) (2.0) (3.4)Share-based payments–––––– 13.3 13.3 0.4 13.7 Income tax on equity transactions14–––––– 1.6 1.6 1.2 2.8 Total transactions with or distributions to owners (16.6) (585.1) 428.3 ––– (12.9) (186.3) (74.2) (260.5)CHANGES IN OWNERSHIP INTERESTS IN SUBSIDIARIESPut option held by non-controlling interests26–––––––– (55.7) (55.7)Other changes in participation of non-controlling interests26–––––– (20.8) (20.8) 96.3 75.5 Changes in participation of non-controlling interests26–––––– (20.8) (20.8) 40.6 19.8 Balance at December 31, 2019 252.8 3,475.5 (92.5) (32.5)– (329.9) (628.1) 2,645.3 462.7 3,108.0 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
1 In 2019, Income tax paid includes a refund of CHF 17.7 (EUR 15.1) million from Spanish tax authorities.
131CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE YEAR ENDED DECEMBER 31, 2020IN MILLIONS OF CHFNOTE20202019CASH FLOWS FROM OPERATING ACTIVITIESProfit / (loss) before taxes (2,871.2) 108.3 ADJUSTMENTS FOR:Depreciation, amortization and impairment10 2,841.9 1,777.0 Increase / (decrease) in allowances and provisions 32.2 0.6 Early termination of lease contracts 1.2 –Other non-cash items (3.6) 9.7 Relief of lease obligations (380.3)–Loss / (gain) on sale of non-current assets 5.2 3.0 Loss / (gain) on foreign exchange differences– 9.6 Finance expense13 385.4 387.0 Finance income13 (14.9) (71.7)Cash flow before working capital changes (4.1) 2,223.5 Decrease / (increase) in trade and other accounts receivable 75.8 (98.4)Decrease / (increase) in inventories 296.3 2.8 Increase / (decrease) in trade and other accounts payable (686.0) 71.2 Dividends received from associates19– 5.6 Cash generated from operations (318.0) 2,204.7 Income tax paid 1 (27.3) (97.0)Net cash flows from operating activities (345.3) 2,107.7 CASH FLOW USED IN INVESTING ACTIVITIESPurchase of property, plant and equipment 16 (101.1) (199.3)Purchase of intangible assets18 (17.9) (54.1)Purchase of financial assets (0.4) (0.1)Purchase of interest in associates19 (0.4) (2.5)Proceeds from lease income 3.9 5.9 Payment of loans receivable granted 1.4 –Proceeds from loans receivable repaid 0.1 3.2 Proceeds from sale of property, plant and equipment 12.5 8.7 Proceeds from sale of financial assets 4.9 0.2 Other investing activities (1.1) (0.6)Interest received 23.2 31.2 Business combinations, net of cash– (48.1)Net cash flows used in investing activities (74.9) (255.5) 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
132IN MILLIONS OF CHFNOTE20202019CASH FLOW FROM FINANCING ACTIVITIESTransaction costs for financial instruments 229 (13.4) (2.5)Transaction costs for equity instruments (36.1)–Repayment of 3 rd party loans payable (1.0)–Proceeds from convertible bonds30 350.0 823.3 Proceeds from bank debt29 557.2 90.7 Repayment of bank debt29 (756.5) (976.7)Issuance of shares 957.9 –Dividends paid to shareholders of the parent24– (199.8)Dividends paid to non-controlling interests26.1 (33.3) (70.5)Proceeds from mandatory convertible notes24 69.5 –Proceeds from sale of treasury shares25.3 13.7 –Acquisition of non-controlling interests in Hudson Ltd (275.4)–Contributions (paid to) / from non-controlling interests (1.0) 4.3 Lease payments (405.7) (1,269.5)Interest paid 3 (168.8) (199.3)Net cash flows used in financing activities 257.0 (1,800.0)Currency translation on cash29 (30.0) (36.9)Decrease / Increase in cash and cash equivalents (193.2) 15.3 CASH AND CASH EQUIVALENTS AT THE– beginning of the period 553.5 538.2 – end of the period 360.3 553.5 2 Transaction costs for financial instruments includes fees paid for the issuance of financing instruments (2020: Convertible bonds; 2019: Senior Notes).3 In 2019, Interest paid includes CHF 18.0 million call premium and other fees paid for the cancellation and amendment of financing arrangements.CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)FOR THE YEAR ENDED DECEMBER 31, 2020 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
133NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 20201. CORPORATE INFORMATIONDufry AG (the “Company”) is a publicly listed company with headquarters in Basel, Switzerland. The Company is the world’s leading global travel retail company. It operates over 2.300 shops worldwide. The shares of the Company are listed on the Swiss Stock Exchange (SIX) in Zurich.The consolidated financial statements of Dufry AG and its subsidiaries (Dufry or the “Group”) for the year ended December 31, 2020 and the respective compara-tive information were authorized for public disclosure in accordance with a reso-lution of the Board of Directors of the Company dated March 4, 2021, and are sub-ject to the approval of the Annual General meeting to be held on May 18, 2021.2. ACCOUNTING POLICIES2.1 BASIS OF PREPARATIONThe consolidated financial statements of Dufry AG and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).The consolidated financial statements have been prepared on the historical cost basis, except for certain financial assets, liabilities (including derivative instruments) and defined benefit plan assets, that are measured at fair value, 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 recognized 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 state-ments are presented in millions of Swiss Francs “CHF”. All values are rounded to the nearest one hundred thousand, except when indicated otherwise. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
1342.2 THE ENTITY’S ABILITY TO CONTINUE AS A GOING CONCERN – COVID-19On March 11, 2020, the World Health Organization declared COVID-19 a pandemic.Governmental organizations have taken various actions to combat the spread of COVID-19, including imposing stay-at-home orders and closing “non-essential” businesses and their operations for certain periods of time.The Group mainly operates travel retail businesses, which are significantly ad-versely impacted by COVID-19-related concerns, event cancellations, and busi-ness and government-imposed restrictions. These concerns and restrictions have led to a significant decrease in passenger travel and resulted in sharply reduced customer traffic and sales across our businesses. Consequently, the Group’s rev-enues declined during 2020 compared with the same period in 2019 by approxi-mately 71%.In response to the COVID-19 pandemic, the Group most recently has taken the following measures: –the Group is renegotiating almost all of its concession agreements to better align payment commitments to the current business environment and in particular to reduce fixed payments; –as of September 2020, the Group has implemented a re-organization and restructuring program to adapt its organization to the new business environment and to accelerate growth and support profitability during the recovery phase of the economic and public health crisis resulting from COVID-19; –in October 2020 and in connection with the Group’s plan to acquire the remaining equity interest in Hudson Ltd. for USD 311 million and to delist Hudson Ltd. from the New York Stock Exchange, Dufry AG has conducted an equity increase through the issuance of 24,696,516 fully paid-in registered shares in the amount of CHF 820.3 million; –on November 18, 2020, Dufry placed CHF 69.5 million in bonds due 2023, mandatory convertible into shares of the Company; –in December 2020, Dufry successfully closed the merger with its subsidiary Hudson Ltd (“Hudson”) which will improve the cost structure of the company going forward; –the Group did not pay a dividend for the 2019 financial year and Dufry currently does not plan to propose to pay a dividend for the 2020 financial year.In addition, in May 2020, we have entered into an amendment of certain borrowing instruments which, among other things, waived compliance with certain financial covenants until June 30, 2021 and which prevented a covenant breach that would have otherwise occurred as a result of the deterioration in adjusted operating cash flows due to COVID-19. Currently, financial covenants included in our borrowing instruments require the Group to comply with:(i) a maximum ratio of total drawn debt to adjusted operating cash flow of 5.0:1.0 for the test periods ending September 30, 2021 and December 31, 2021 (and a max-imum ratio of 4.5:1.0 for the test periods ending March 31, 2022 and thereafter),(ii) a minimum ratio of adjusted operating cash flow to total interest expense (ex-cluding lease interest) of 3.0:1.0 for the test periods ending September 30, 2021 and thereafter, and 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
135(iii) a minimum liquidity available of CHF 300 million on a monthly basis until and including June 30, 2021.Dufry cannot predict extent or duration of the on-going COVID-19 pandemic and its impact on the Group and its financial position, results of operations and cash flows. This includes that the Group, as a result of the deterioration in adjusted operating cash flows, may breach financial covenants included in the Group’s bor-rowing instruments after the covenant waiver period and our borrowings might become due on demand. There can be no assurance that we would be able to suc-cessfully negotiate further covenant waivers with our lenders in such an event. It may also be necessary to raise additional capital from investors or financing from lenders.As a result of these matters caused by the COVID-19 pandemic, there is a mate-rial uncertainty that may cast significant doubt upon the Group’s ability to con-tinue as a going concern and therefore, whether the Group will be able to realize its assets and settle its liabilities in the ordinary course of business at the amounts recorded in the consolidated financial statements.We are closely monitoring developments related to the ongoing pandemic and have taken and continue to take steps intended to mitigate the potential risks to us. Although it is not certain that these efforts will be successful, management believes that the actions that it has taken to date are sufficient to currently mitigate the material uncertainty and has therefore prepared the consolidated financial statements on a going concern basis.2.3 BASIS OF CONSOLIDATIONThe consolidated financial statements of Dufry comprise all entities directly or indirectly controlled by Dufry (its subsidiaries) as at December 31, 2020 and December 31, 2019 respectively for the comparative information.Subsidiaries are fully consolidated from the date of acquisition, being the date on which Dufry obtains control, and continue to be consolidated until the date when such control is lost. The Group controls an entity when Dufry is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. All intra group balances, transactions, unrealized gains or losses or 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 Dufry loses control over a subsidiary, it: –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, –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 statement of profit or loss, –recognizes any receivable from / payable to this former subsidiary. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
1362.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa) Goodwill and Business combinationsBusiness 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, Dufry selects 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 related transaction costs are expensed and presented in other expenses. When Dufry 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.Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Thereafter any change in the fair value of the contingent consideration not classified as equity will be recognized through the statement of profit or loss.Dufry 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 statement of profit or loss.After initial recognition, goodwill is measured at cost less any accumulated impair-ment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of Dufry’s group of cash-generating units that are expected to benefit from the combination.Where goodwill forms part of a cash-generating unit and an operation within is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining 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, unless there are specific allocations identifiable.b) Foreign currency translationEach subsidiary in Dufry uses its corresponding functional currency. Items included in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are recorded at the date of the trans-action in the functional currency using the exchange rate of such date.Monetary assets and liabilities denominated in foreign currencies are re-measured using the functional currency exchange rate at the reporting date and the differ-ence is recorded as unrealized foreign exchange gains / losses. Exchange differences arising on the settlement or on the translation of derivative financial instruments are recognized through the statement of profit or loss, except where the hedges on net investments allow the recognition through other comprehensive income, until the respective investments are disposed of. Deferred tax related to unreal- 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
137ized exchange differences is accounted for accordingly. Non-monetary items are measured at historical cost in the respective functional currency.At the reporting date, the assets and liabilities of all subsidiaries reporting in foreign currency are translated into the presentation currency of Dufry (CHF), using the exchange rate at the reporting date. The statements of profit or loss of the sub-sidiaries are translated using the average exchange rates of the respective month in which the transactions occurred. The net translation differences are recognized in 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 statement of profit or loss as gain or loss on sale of subsidiaries.Goodwill, intangible assets and fair value adjustments identified during a business combination (purchase price allocation) are treated as assets and liabilities in the functional currency of such operation.Principal foreign exchange rates applied for valuation and translation:AVERAGE RATECLOSING RATEIN CHF2020201931.12.202031.12.20191 USD0.93850.99350.88510.96781 EUR1.07031.11241.08141.08531 GBP1.20411.26911.21061.2844c) Net salesTurnover is comprised of net sales and advertising income and is recognized from contracts with customers. The Group recognizes revenue from retail sales and the related cost of goods sold at the point in time, when it sells and hands over directly at the stores to the traveler consumables or fashion products manufactured by third parties. These transactions have to be settled by cash or credit card on delivery. Net sales are measured at fair value of the consideration received for the goods sold, excluding discounts or sales taxes.d) Advertising incomeThe Group’s advertising income is resulting from several distinctive marketing support activities, not affecting the retail price, performed by Dufry after having been developed and coordinated together with our suppliers. The income is recognized in the period the advertising is performed. The compensation will be received on contractual terms. Usually Dufry is not entitled to offset the income with trade payables related with the same supplier. An allowance on these adver-tising receivables is recognized to reflect the risks and uncertainties in relation with the final achievements of incentives based on thresholds, to be confirmed after the end of the respective program.e) Cost of salesCost of sales are recognized when the Company sells the products and comprise the purchase price and the cost incurred until the products arrive at the warehouse, i. e. import duties, transport, purchase discounts (price-offs) as well as inventory valuation adjustments and inventory losses. f) Lease expensesDufry adopted the new temporary amendment to IFRS 16 for the full year 2020 (note 2.5). Basically the amendment allows to consider that renegotiations related to COVID-19 are not modifications, and can be recognized directly as lease expense. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
138g) Equity instrumentsAn 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 Dufry are recognized at the proceeds received, net of direct issue costs. Repurchase of Dufry’s own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in the statement of profit or loss on the purchase, sale, issue or cancellation of Dufry’s own equity instruments.h) Share capitalOrdinary shares are classified as equity. Costs directly attributable to the issuance of shares or options are shown in the statement of changes in equity as transaction costs for equity instruments, net of tax.For Dufry shares purchased by Dufry AG or any subsidiary, the consideration paid, including any directly attributable expenses, net of income taxes, is deducted from equity until the shares are cancelled, assigned or sold. Where such ordinary shares are subsequently sold, any consideration received, net of any direct transaction expenses and income tax, is included in equity.i) Pension and other post-employment benefit obligationsThe 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 or defined contribution plans provided through separate funds, insurance plans, or unfunded arrangements. The pension plans are either funded through regular contributions made by the employer or the employee or unfunded. The cost of providing benefits under defined benefit plans is determined using the projected unit credit method. The plan assets are valued at fair value.Re-measurements, the effect of the asset ceiling (excluding net interest) and the return on plan assets (excluding net interest), are recognized in the statement of financial position with a corresponding debit or credit to other comprehensive income in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.Past service costs are recognized in profit or loss on the earlier of: –The date of the plan amendment or curtailment, and –the date that Dufry recognizes restructuring related costsNet interest is calculated by applying the discount rate to the net defined benefit obligation (asset). Dufry recognizes the following changes in the net defined benefit obligation in the statement of profit or loss: –Service costs comprising current service costs are disclosed under “personnel expenses”. Past service costs, gains and losses on curtailments and non-routine settlements are shown under “other expenses” –Net interest expense or income under “finance expenses” or “finance income”Based on pension legislation of certain countries the employer and/or the employees have the obligation to remedy any default situation of the pension foun-dation, which usually would result in higher periodic contributions. At the state-ment of financial position date, there was no such default situation. The actuarial calculations based on IAS 19 resulted in a defined benefit obligation/asset as pre-sented in note 33. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
139j) Share-based paymentsEquity settled share-based payments to employees and other third parties provid-ing services are measured at the fair value of the equity instruments at grant date. The fair value determined at grant date of the equity-settled share-based payments is expensed on a pro rata basis over the vesting period, based on the estimated number of equity instruments that will eventually vest. At the end of each reporting period, Dufry revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in the statement of profit or loss such that the cumulative expense reflects the revised estimate.Where the terms of an equity settled award are modified, the minimum expense recognized is the expense as 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 holder of the option as measured at the date of modification.k) TaxationIncome tax expense represents the sum of the current income tax and deferred tax. Where the functional currency is not the local currency, the position includes the effects of foreign exchange translation on deferred tax assets or deferred tax liabilities.Income tax positions not relating to items recognized in the statement of profit or loss, are recognized in correlation to the underlying transaction, either in other comprehensive income or equity.Current income taxIncome tax receivables or payables 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 Dufry operates and generates taxable income.Income tax relating to items recognized in other comprehensive income is recog-nized in the same statement.Deferred taxDeferred tax is provided using the liability method on temporary differences between the tax basis of assets or liabilities and their carrying amounts for finan-cial 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, when the timing of the reversal of the temporary differences can be controlled and it is probable 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 or tax losses. Deferred tax assets are recog-nized to the extent that it is probable that taxable profit will be available, against 3 Financial Report
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140which 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, 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. 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 applicable for each respective company.l) Property, plant and equipmentThese 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: –Real estate (buildings) 20 to 40 years –Leasehold improvements the shorter of the lease term or 10 years –Furniture and fixtures the shorter of the lease term or 5 years –Motor vehicles the shorter of the lease term or 5 years –Computer hardware the shorter of the lease term or 5 yearsm) Right-of-use assetsThe Group recognizes right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease obligations. The cost of right-of-use assets includes the amount of lease obligations recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain owner-ship of the leased asset at the end of the lease term, the recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life or the lease term. Right-of-use assets are subject to impairment. The contractual term of our assets is up to 40 years.To contain a lease, an agreement has to convey the right to control the use of an identified asset throughout the period of use in exchange for consideration, so that the lessee has the right to obtain substantially all of the economic benefits from the use of the identified asset and direct the use of the identified asset (i. e. direct how and for what purpose the asset is used). The lease term corresponds to the non-cancellable period of each contract and where the Group is reasonably cer-tain of exercising renewal options contractually foreseen. Right-of-use assets are 3 Financial Report
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141capitalized at a value equivalent to the lease obligation at inception and depreciated over the useful life of the asset, except for leases with a lease term (or remaining upon adoption) of less than 12 months or leases of low value assets.Initial direct costs for contracts signed in the past were not recognized as part of the right-of-use asset at the date of initial adoption.Short-term leases with a duration of less than 12 months and low value leases, as well as those lease elements, not complying with the principles of recognition defined by IFRS 16 are recognized in Profit or Loss when incurred.The standard affects the accounting of:a) ShopsDufry enters into lease agreements with operators of airports, seaports, railway stations etc. to operate retail shops which in substance are considered leases. These lease agreements contain complex features, which include variable payment based on sales, which cannot be lower than a minimal threshold (MAG). The MAG can be fixed or variable depending on certain parameters. The MAG amounts may: a) be fixed by the lease agreement or b) be calculated based on a percentage of fees paid in the previous year, or c) adjusted based on an index. In these cases, the unavoidable portions of the fees are considered as in substance fixed payments, despite having a variable component. Management signs and renews on average more than 50 agreements every year with a typical duration of 5 to 10 years.These agreements do not contain a residual value guarantee. In some cases, the current parts of the lease obligations are secured with bank guarantees in case the Group would not fulfill its contractual commitments. Dufry has capitalized all elements of the lease contracts in accordance with IFRS 16 when at the com-mencement of the agreement such commitments are in substance fixed. Payment obligations that do not have a fixed or in substance fixed commitment, will continue to be presented as variable lease expense. Dufry has identified a number of agree-ments in its portfolio which are not fulfilling the principles of recognition defined by IFRS 16, i. e. they have minimal guaranteed payments based on non-predictable parameters or variables, such as actual number of passengers, which will continue to be presented as variable lease expense.b) Other buildingsLease agreements for offices or warehouse buildings will usually qualify for capi-talization under IFRS 16.c) Vehicles and otherDufry has also entered into many other lease agreements for e. g. vehicles, hard or software, and other assets, which in accordance with IFRS 16 will qualify for capitalization of leases. n) Short-term leases and leases of low-value assetsThe Group applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the com-mencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered of low value (i.e., below CHF 5,000, division North America below USD 25.000). Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term. 3 Financial Report
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142o) Intangible assetsThese assets mainly comprise of concession rights and brands. Usually these assets are capitalized at cost, but when identified as part of a business combina-tion, these assets are capitalized at fair value as at the date of acquisition. The useful lives of these intangible assets are assessed to be either finite or indefinite. Following initial recognition, the cost model is applied to intangible assets. Intan-gible assets with finite lives are amortized over the useful economic life. Intangi-ble assets with an indefinite useful life are reviewed annually to determine whether the indefinite life assessment continues to be supportable. If not, any changes are made on a prospective basis. The brand assets have indefinite useful life, whereas the concession rights have a useful life based on the lease term, which can be up to 40 years.p) SoftwareSoftware is valued at amortized historical cost, or in case of internal developments by the sum of costs incurred less amortization.q) Impairment of non-financial assetsGoodwill and 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 circumstances 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 cost of disposal or 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).r) AssociatesAssociates are all entities over which Dufry has significant influence but not control, generally accompanying a shareholding interest of more than 20 % of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognized at cost. The carrying amount is increased or decreased to recognize changes in the Group’s share of net assets of the associate after the date of acquisition and decreased by dividends declared. Dufry’s investment in associates includes good-will identified on acquisition.Dufry’s share of post-acquisition net profit/(loss) is recognized in the statement of profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in the statement of comprehensive income with a corre-sponding adjustment to the carrying amount of the investment. When Dufry’s share of losses in an associate equals or exceeds its interest in the associate, Dufry does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate. If the ownership interest in an asso-ciate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognized in other comprehensive income is reclassified to net profit/(loss) where appropriate.Dufry determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, Dufry calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the amount within the finance expense in the statement of profit or loss. 3 Financial Report
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143Profits and losses resulting from upstream and downstream transactions between Dufry and its associate are recognized in the Group’s financial statements only to the extent of unrelated investor’s interests in the associates. Unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by Dufry.Dilution gains and losses arising in investments in associates are recognized in the statement of profit or loss.s) InventoriesInventories are valued at the lower of historical cost or net realizable value. The historical costs are determined according to the weighted average cost method. Historical cost includes all expenses incurred in bringing the inventories to their present location and condition. Beside the purchase price of the goods less the discounts or rebates obtained, the historical cost includes import duties and transport cost. Dufry purchases most of the inventory centrally and provides the subsidiaries the goods in their reporting currency, i.e. free of currency risk for them.The net realizable value is the estimated selling price in the ordinary course of busi-ness less the estimated costs necessary to make the sale. Inventory allowances are set up for slow-moving and obsolete stock. Expired items are fully written off.t) Trade and credit card receivables These accounts include receivables related to the sale of merchandise.u) Cash and cash equivalentsCash and cash equivalents consist of cash on hand or current bank accounts as well as current deposits at banks with initial maturity below 91 days. Credit card receivables with a maturity of up to 4 working days are included as cash in transit. Current investments are included in this position if they are highly liquid, readily convertible into known amounts of cash and subject to insignificant risk of changes in value.v) Lease obligationsAt the commencement date of the lease, the Group recognizes lease obligations measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognized as expense in the period on which the event or condition that triggers the payment occurs. Amounts resulting from a remeasurement of the lease obligation due to an index or a rate are recognized against right-of-use assets. 3 Financial Report
Consolidated Financial Statements
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144In calculating the present value of lease payments, the Group uses the incremen-tal borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease obligations is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease obligations is re-measured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.Dufry uses a discount rate which is the aggregation of the risk free rate for the respective currency and lease duration, increased by individual company risk factors.The lease obligation represents the net present value of fixed or in substance fixed lease payments over the lease term. The implied interest charge is presented as interest expenses on lease obligation. Where a lease agreement does not specify a discount rate and as the subsidiaries are financed internally, Dufry uses a discount rate which is the aggregation of the risk free rate for the respective currency and lease duration, increased by individual company risk factors.Usually our lease contract do not specify interest, so that the accrued interest are considered a part of the minimal in substance fix commitments, which are pre-sented in the cash flow from financing. In case the lease payments are higher due to variable fee clauses, these amounts are presented as cash outflow from oper-ations.w) ProvisionsProvisions are recognized when Dufry has a present obligation (legal or construc-tive) as a result of a past event, it is probable that Dufry 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 at the end of the report-ing period of the consideration required to settle the present obligation, 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.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 contin-gent assets and the amount initially recognized less cumulative income recognized in accordance with IFRS 15 Revenue from contracts with customers.Onerous contractsPresent obligations arising under onerous contracts are measured and recognized as provisions. An onerous contract is considered to exist if Dufry has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract. 3 Financial Report
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145RestructuringsA restructuring provision is recognized when Dufry 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 pro-vision 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. Amounts of restructuring are shown in other provisions.Lawsuits and dutiesA lawsuits and duties provision is recognized to cover uncertainties dependent on the outcome of ongoing lawsuits in relation with taxes or “contractual commit-ments”, other than income taxes and duties.x) Investments and other financial assets (i) ClassificationThe Group classifies its financial assets in the following measurement categories: –Those to be measured subsequently at fair value (either through OCI or through profit or loss), and –those to be measured at amortized cost.The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).(ii) Recognition and derecognitionRegular purchases and sales of financial assets are recognized on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.(iii) MeasurementAt initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), trans-action costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.Debt instrumentsSubsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Group classifies its debt instruments: –Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in profit or loss. Impairment losses are presented in the other operational result. 3 Financial Report
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146 –FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the asset’s cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss. Interest income from these financial assets is included in finance income using the effective interest rate method. Impairment expenses are presented in the other operational result. –FVPL: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognized in profit or loss and presented as net in the period in which it arises.Equity instrumentsThe Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognized in profit or loss as other income when the Group’s right to receive payments is established. Changes in the fair value of financial assets at FVPL are recognized in the finance income or finance expenses in the statement of profit or loss as applicable.(iv) Impairment of financial assetsThe Group assesses on a forward looking basis the expected credit losses associ-ated with its debt instruments carried at amortized cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, receivables for refund from suppliers and related services the Group applies the simplified approach which requires expected life-time losses to be recognized from initial recognition of the receivables, see note 39 for further details.y) Trade, other accounts receivable and cash and cash equivalentsTrade and other receivables (including credit cards receivables, other accounts receivable, cash and cash equivalents) are measured at amortized cost using the effective interest.z) Financial liabilitiesi) Financial liabilities at FVPLThese are stated at fair value, with any gains or losses arising on re-measurement recognized in the statement of profit or loss. The net gain or loss recognized in the consolidated statement of profit or loss incorporates any interest paid on the financial liability and is included in the finance income or finance expenses in the statement of profit or loss. Fair value is determined in the manner described in note 35. 3 Financial Report
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147ii) Other financial liabilitiesOther financial liabilities (including borrowings) are subsequently measured at amortized cost using the effective interest method.iii) Derecognition of financial liabilitiesDufry derecognizes financial liabilities only when the obligations are discharged, cancelled or expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid or payable is recognized in the statement of profit or loss.iv) Offsetting of financial instrumentsFinancial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously (see note 29.1).ab) Derivatives and hedging activitiesDerivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either: –hedges of the fair value of recognized assets or liabilities or a firm commitment (fair value hedges) –hedges of a particular risk associated with the cash flows of recognized assets and liabilities and highly probable forecast transactions (cash flow hedges), or –hedges of a net investment in a foreign operation (net investment hedges).At inception of the hedge relationship, the Group documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. The Group documents its risk manage-ment objective and strategy for undertaking its hedge transactions. The fair values of derivative financial instruments designated in hedge relationships are disclosed in note 34. Movements in the hedging reserve in shareholders’ equity are shown in note 24.5. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability.Cash flow hedges that qualify for hedge accountingThe effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in the cash flow hedge reserve within OCI. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss, within other gains/(losses).When option contracts are used to hedge forecast transactions, the Group des-ignates only the intrinsic value of the options as the hedging instrument. 3 Financial Report
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148Gains or losses relating to the effective portion of the change in intrinsic value of the options are recognized in the cash flow hedge reserve within OCI. The changes in the time value of the options that relate to the hedged item (‘aligned time value’) are recognized within OCI. When forward contracts are used to hedge forecast transactions, the Group generally designates only the change in fair value of the forward contract related to the spot component as the hedging instrument. Gains or losses relating to the effective portion of the change in the spot component of the forward contracts are recognized in the cash flow hedge reserve within equity. The change in the forward element of the contract that relates to the hedged item (‘aligned forward element’) is recognized within OCI. In some cases, the entity may designate the full change in fair value of the forward contract (including forward points) as the hedging instrument. In such cases, the gains or losses relating to the effective portion of the change in fair value of the entire forward contract are recognized in the cash flow hedge reserve.Amounts accumulated in equity are reclassified in the periods when the hedged item affects profit or loss, as follows: –Where the hedged item subsequently results in the recognition of a non-financial asset (such as inventory), both the deferred hedging gains and losses and the deferred time value of the option contracts or deferred forward points, if any, are included within the initial cost of the asset. The deferred amounts are ultimately recognised in profit or loss as the hedged item affects profit or loss (for example through cost of sales). –The gain or loss relating to the effective portion of the interest rate swaps hedging variable rate borrowings is recognised in profit or loss within finance cost at the same time as the interest expense on the hedged borrowings. When a hedging instrument expires, or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative deferred gain or loss and deferred costs of hedging in equity at that time remains in equity until the forecast transaction occurs, resulting in the recognition of a non-financial asset such as inventory. When the forecast transaction is no longer expected to occur, the cumulative gain or loss and deferred costs of hedging that were reported in equity are immediately reclassified to profit or loss.Net investment hedgesHedges 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 recognised in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is recognised immediately in the statement of profit or loss within other finance income or finance expense. Gains and losses accumulated in equity are reclassified to profit or loss when the foreign operation is partially disposed of or sold. See notes 27.1 and 27.2 for further details.Derivatives that do not qualify for hedge accountingCertain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge account-ing are recognized immediately in the statement of profit or loss and are included in other finance income or finance expense. Further details of derivative financial instruments are disclosed in note 35. 3 Financial Report
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2.5 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 or revised Standards and Interpretations adopted
in these consolidated financial statements (effective January 1, 2020).
New and amended standards adopted by the Group
A number of new or amended standards became applicable for the current
reporting period:
– Definition of Material – amendments to IAS 1 and IAS 8
– Definition of a Business – amendments to IFRS 3
– Revised Conceptual Framework for Financial Reporting
– Interest Rate Benchmark Reform – amendments to IFRS 9, IAS 39 and IFRS 7
– COVID-19 Related Rent Concessions – amendment to IFRS 16
The Group did not have to change its accounting policies or make retrospective
adjustments as a result of adopting these standards, except for the COVID-19
related rent concessions:
COVID-19 related rent concessions – Amendment to IFRS 16
On May 28, 2020, the IAS-Board issued an amendment to IFRS 16 providing lessees
with an exemption from assessing whether a COVID-19 related relief of lease ob-
ligations is a lease modification, requiring lessees that apply the exemption to
account for COVID-19 related rent concessions as if they were not lease modifi-
cations. Dufry adopted this amendment, applying it for the full year 2020. The
exemption applies only to rent concessions occurring as a direct consequence of
the COVID-19 pandemic and subject to certain conditions. Dufry recognized in
2020 a net relief of lease obligations of CHF 380.3 million presented as lease
(expenses)/ income (see note 8).
Other amendments and interpretations
These apply for the first time in 2020, but do not have an impact on consolidated
financial statements of the Group.
149 3 Financial Report
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1503. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTYThe preparation of Dufry’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.KEY SOURCES OF ESTIMATION UNCERTAINTYThe key assumptions concerning the future and other key sources of estimation include uncertainties at the reporting 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.Impairment testsDufry annually tests goodwill and intangible assets with indefinite useful lives and assesses other non-financial assets for impairment indications. Where required, the company performs impairment tests which are based on the discounted value models of future cash flows. The underlying calculation requires the use of esti-mates. The estimates and assumptions used are disclosed in note 18.1.1 and 18.1.3.Onerous contractsSome of the long-term lease agreements include clauses to prevent early termi-nation, 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 the business behind such a contract presents a non-profitable outlook. In this event, an impairment of the tangible, intangible and Right-of-Use assets may be required, or even a provision based on the present value of the unavoidable future negative cash flows expected is established. The unavoidable costs are the lower of the costs of fulfilling the contract and any compensation or penalties arising from failure to fulfil it. Further details are given in note 32.Income taxesDufry is active in numerous jurisdictions which makes it subject to local income tax. Significant judgment is required in determining the taxability of certain trans-actions based on the local tax regulations. In case of uncertainties for some trans-actions in relation with the correct tax treatment, Dufry recognizes a tax expense and a liability for the amounts required to settle the estimated tax obligations. Where the final tax outcome is different from the carrying amounts, such difference will impact the net profit in the period in which the obligations become certain. Further details are given in notes 14 and 31.Deferred tax assetsDeferred tax assets are recognized for unused tax losses and deductible temporary differences to the extent that it is probable that taxable profit will be available against which the credits can be utilized. Management judgment is required to determine the amount of future taxable profits that can be generated in each jurisdiction, and the limitations in use of the respective tax credits to calculate the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits. Further details are given in note 31. 3 Financial Report
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151ProvisionsManagement makes assumptions in relation to the expected outcome and required cash outflows based on the development of each individual case. Further details are given in note 32.Share-based paymentsDufry measures the cost of equity settled transactions with employees by refer-ence to the fair value of the equity instruments at the grant date. Estimating such fair values depends on the terms and conditions of the grant, as well as, the most appropriate inputs to the valuation model including the expected probability that the triggering clauses will be met. The result will be the expected quantity of shares to be assigned. The assumptions and models used are disclosed in note 25.Pension and other post-employment benefit obligationsThe cost of defined benefit pension plans is determined using actuarial valuations. The actuarial valuation involves assumptions about discount rates, future salary and pension increases as well as mortality rates. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty. Further details are given in note 33.Purchase price allocationThe 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 carrying values.Consolidation of entities where Dufry has control, but holds minority voting rightsDufry considers controlling certain entities indirectly, even when it holds less than the majority of the voting rights, when it is exposed to or has the rights to variable returns from the involvements with the investee and has the ability to affect those returns through its power over the entity. These indicators are evaluated at the time of first consolidation and reviewed when there are changes in the statutes or composition of the executive board of these entities. Further details on non- controlling interests are disclosed in notes 26 and the list “Material indirect sub-sidiaries” in the financial statements of Dufry AG.4. NEW AND REVISED STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET ADOPTED/EFFECTIVECertain new accounting standards and interpretations were issued that are not effective for 2020. Dufry will adopt these when they become mandatory. From the current point of view they are not expected to have a material impact in future reporting periods. 3 Financial Report
Consolidated Financial Statements
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1525. SEGMENT INFORMATIONDufry’s risks and returns are predominantly affected by the fact that Dufry oper-ates in different countries. Therefore, Dufry presents the segment information as it does internally to the Global Executive Committee, using geographical segments and the distribution centers as an additional segment.The Group implemented a new company organization which became effective on September 1, 2020. The comparative figures have been presented accordingly to reflect these changes.The list of most important subsidiaries indicates the entities consolidated in each segment in the financial statements of Dufry AG.The Group is presenting as alternative performance indicator an Adjusted Oper-ating Profit to its chief operating decision maker. This indicator is calculated from operating profit before amortizations and impairments of intangible assets or goodwill related to acquisitions.TURNOVER2020 IN MILLIONS OF CHFwith external customerswith other divisionsTOTALADJUSTED OPER-ATING PROFIT (unaudited)EMPLOYEES (FTE) (unaudited)Europe, Middle East and Africa (EMEA) 1,144.5 – 1,144.5 (1,069.3) 9,924 Asia Pacific 160.0 – 160.0 (73.3) 664 Central & South America 497.3 – 497.3 (205.2) 3,933 North America 644.4 – 644.4 (212.5) 2,866 Global Distribution Centers 114.9 376.3 491.2 (1.3) 408 Total divisions 2,561.1 376.3 2,937.4 (1,561.6) 17,795 Eliminations– (376.3) (376.3)––Dufry 2,561.1 – 2,561.1 (1,561.6) 17,795 TURNOVER2019 IN MILLIONS OF CHFwith external customerswith other divisionsTOTALADJUSTED OPER-ATING PROFIT (unaudited)EMPLOYEES (FTE) (unaudited)Europe, Middle East and Africa (EMEA) 4,434.2 – 4,434.2 408.4 12,999 Asia Pacific 691.6 – 691.6 21.7 1,629 Central & South America 1,536.1 – 1,536.1 171.5 7,269 North America 1,935.8 – 1,935.8 149.5 8,776 Global Distribution Centers 250.9 1,595.1 1,846.0 16.5 663 Total divisions 8,848.6 1,595.1 10,443.7 767.7 31,336 Eliminations– (1,595.1) (1,595.1)––Dufry 8,848.6 – 8,848.6 767.7 31,336 Dufry generated 6.6 % (2019: 5.4 %) of its turnover with external customers in Switzerland (domicile). 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
153Adjusted Operating ProfitIN MILLIONS OF CHFNOTE20202019Operating profit / (loss) (2,500.8) 432.8 Adjusted for:Amortization of concession rights*18 251.1 308.9 Impairment of concession rights*18 556.8 26.0 Impairment of goodwill*18 131.1 –Adjusted operating profit (1,561.6) 767.7 * Related to acquisitions.Financial Position and other disclosures31.12.2020 IN MILLIONS OF CHFTOTAL ASSETSTOTAL LIABILITIESINCOME TAX (EXPENSE) / INCOMECAPITAL EXPENDITURE PAIDDEPRECIATION AMORTIZATION AND IMPAIRMENTEurope, Middle East and Africa (EMEA) 6,154.9 4,144.9 79.6 (55.3) (1,646.2)Asia Pacific 567.7 541.1 (6.3) (4.0) (141.6)Central & South America 1,386.5 779.5 1.1 (9.1) (637.2)North America 2,004.0 1,223.9 66.3 (42.3) (379.7)Global Distribution Centers 847.7 128.6 (0.1) (4.1) (20.7)Total divisions 10,960.8 6,818.0 140.6 (114.8) (2,825.4)Unallocated positions 294.2 3,519.0 (9.9) (4.2) (16.5)Dufry 11,255.0 10,337.0 130.7 (119.0) (2,841.9)31.12.2019 IN MILLIONS OF CHFTOTAL ASSETSTOTAL LIABILITIESINCOME TAX (EXPENSE) / INCOMECAPITAL EXPENDITURE PAIDDEPRECIATION AMORTIZATION AND IMPAIRMENTEurope, Middle East and Africa (EMEA) 6,398.7 3,038.0 (31.5) (95.8) (939.6)Asia Pacific 740.8 646.8 (1.4) (20.5) (133.2)Central & South America 2,126.1 913.4 (18.3) (35.0) (316.3)North America 2,558.4 1,533.7 (14.4) (72.5) (361.1)Global Distribution Centers 947.9 390.9 (4.8) (3.1) (5.8)Total divisions 12,771.9 6,522.8 (70.4) (226.9) (1,756.0)Unallocated positions 587.0 3,728.1 (7.8) (26.5) (21.0)Dufry 13,358.9 10,250.9 (78.2) (253.4) (1,777.0)Reconciliation of assets IN MILLIONS OF CHF31.12.202031.12.2019Operating assets 10,960.8 12,771.9 Current assets of corporate and holding companies 1 30.3 254.4 Non-current assets of corporate and holding companies 263.9 332.6 Total assets 11,255.0 13,358.9 1 Includes notional Cash Pool overdrafts at Headquarters. 3 Financial Report
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154Reconciliation of liabilities IN MILLIONS OF CHF31.12.202031.12.2019Operating liabilities 6,818.0 6,522.8 Borrowings of corporate and holding companies, current 0.6 1.2 Borrowings of corporate and holding companies, non-current 3,510.5 3,592.9 Other non-segment liabilities 7.9 134.0 Total liabilities 10,337.0 10,250.9 6. ACQUISITIONS OF BUSINESSES2020 TRANSACTIONSThere were no transactions during 2020.2019 TRANSACTIONS6.1 ACQUISITION OF REGSTAER M LLC, RUSSIARegStaer M Ltd. operates at the Vnukovo airport in Moscow a retail concession running for 15 years consisting of 6,800 square meters of duty-free and duty-paid shops offering a broad assortment of core duty free products, complemented with a selection of fashion and accessories. In 2019, the company generated net sales of CHF 83.7 (EUR 76.3) million, both unaudited figures, and an operating profit of CHF 9.0 (EUR 8.2) million. With this acquisition, Dufry is present in all the airports of Moscow.On November 6, 2019, the Group acquired 60 % of RegStaer M LLC (“Vnukovo”) through its majority owned (51 %) subsidiary Dufry Staer Holding Ltd for a total consideration partially contributed in shares, equivalent to CHF 80.2 (EUR 73.7) millions. The transaction was closed in November 2019, when the Group obtained control and the required regulatory approvals. The acquisition was accounted for using the acquisition method. The transaction costs in relation to this acquisition amounted to CHF 0.3 (EUR 0.3) million. The non-controlling interests, resulting from the transaction was measured at the proportionate share in the identifiable net assets.Dufry has integrated this company with its remaining operations in Russia into a subdivision which will generate synergies, which are reflected in the value of the goodwill besides other intangibles that are not recognized individually. The resulting goodwill is not amortized, is not tax deductible and is subject to annual impairment testing. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
155The fair value of the identifiable assets and liabilities of RegStaer M, LLC at the date of the acquisition are determined as follows:FINAL FAIR VALUE AT NOVEMBER 6, 2019IN MILLIONS OFCHFEURInventories 16.7 15.4 Other current assets 1.5 0.5 Property, plant and equipment 10.9 10.1 Right-of-use assets 7.7 7.1 Concession rights 95.4 87.7 Trade payables (3.3) (3.0)Lease obligations (7.7) (7.1)Provisions (2.0) (1.8)Other liabilities (4.9) (3.9)Deferred tax liabilities (19.2) (17.6)Identifiable net assets 95.1 87.4 Non-controlling interests (40.0%) 38.0 35.0 Dufry’s share in the net assets (60.0%) 57.0 52.4 Goodwill 23.1 21.3 Consideration in cash 41.3 38.0 Consideration in shares 1 38.9 35.7 Total consideration 80.2 73.7 1 The fair value of the shares contributed by the partner of Dufry Staer Holding are derived from Dufry's transaction.From the date when Dufry took control of RegStaer M, LLC operations in November 2019 until December 2019 these operations contributed CHF 12.4 (EUR 11.3) million in turnover and CHF 1.6 (EUR 1.4) million, in operating profit to the consolidated statement of profit or loss (both unaudited figures).As part of the transaction, the Group entered into put and call options with the non-controlling interest holder Dufry Staer Holding Ltd which mainly provide to our partner after a holding period of three years the option to sell its non-control-ling interest (49 %) subject to the completion of certain contractual conditions for a fair value of the entity to be determined upon exercise of the option.The put option was accounted for as a liability in these financial statements and valued to the respective portion of the fair value of Dufry Staer Holding. The difference between this value and the eliminated non-controlling interest was booked against the reserve for transactions with non-controlling interest in the Group’s equity. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
1566.2 BROOKSTONEOn October 10, 2019, the Group acquired the business and assets related to the operations in Brookstone airport stores in the U.S.. Hudson obtained the license to use the Brookstone brand and trademarks. Brookstone sells a unique selection of innovative products in the categories travel, wellness, home and entertainment for a net consideration of CHF 7.4 million. Brookstone has been integrated into the Hudson Group. Through this acquisition, Hudson Group expects to expand the busi-ness and to generate cost synergies through the integration of Brookstone into its marketing and supply chain as well as support functions, which are reflected in the value of the goodwill CHF 2.7 million besides other intangibles like concession rights (CHF 5.5 million) that are recognized individually and the acquired non-controlling interests (CHF 2.4 million). The resulting goodwill is not amortized but is tax deductible and will be subject to annual impairment testing. The Group incurred in transaction costs in relation to this acquisition of CHF 0.5 million in 2019. 7. NET SALESNet sales by product categories:IN MILLIONS OF CHF20202019Perfumes and Cosmetics 774.8 2,744.4 Food, Confectionery and Catering 480.0 1,566.2 Wine and Spirits 413.8 1,427.0 Luxury goods 283.8 1,074.9 Tobacco goods 286.2 988.4 Electronics 61.3 194.7 Literature and Publications 46.5 171.0 Other 131.2 443.2 Total 2,477.6 8,609.8 Net sales by market sector:IN MILLIONS OF CHF20202019Duty-free 1,379.1 5,260.4 Duty-paid 1,098.5 3,349.4 Total 2,477.6 8,609.8 Net sales by channel:IN MILLIONS OF CHF20202019Airports 2,132.2 7,587.9 Border, downtown and hotel shops 114.4 295.3 Cruise liners and seaports 75.5 306.1 Railway stations and other 155.5 420.5 Total 2,477.6 8,609.8 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
1578. LEASE (EXPENSES)/INCOME IN MILLIONS OF CHF20202019Lease expenses 1 (391.8) (1,380.1)Lease expenses short-term contracts (3.0) (5.2)Lease expenses low value contracts (0.9) (1.4)Sublease income from right-of-use assets 15.9 13.8 Relief of lease obligations 2 380.3 –Change in provision for onerous contract 7.5 –Total 8.0 (1,372.9)1 Lease expenses include only variable Lease expenses. Fixed and in substance fixed committments are recognized in accordance with lease accounting as amortization of right-of-use assets or interest on lease obligations.2 See note 2.5 COVID-19 related rent concessions - Amendment to IFRS 16.Most lease contracts require as compensation the higher of two amounts: a) a per-centage of sales or b) a fixed minimal guaranteed amount (MAG). The fair value of these MAG commitments over the contractual term are presented usually as right-of-use assets and expensed as depreciation. Lease payments exceeding the MAG are presented as lease expenses and are normally calculated as a percentage of sales. Other lease contracts require only variable payments, which are fully pre-sented as lease expense. For the following year, the Group estimates that the lease expenses may be between 17 % and 21 % of net sales.Variable lease expense approximates the related cash flows due to the short payment term characteristic of these contracts.9. PERSONNEL EXPENSES IN MILLIONS OF CHF20202019Salaries and wages (552.9) (980.0)Social security expenses (100.8) (147.6)Retirement benefits (11.3) (22.0)Other personnel expenses (51.0) (93.7)Total (716.0) (1,243.3)During 2020, some governments initiated actions to reduce the financial impli-cations to companies affected by the COVID-19 pandemic. Certain Dufry subsidiaries have been granted government support in order to reduce the burden of personnel expenses during the lock-down periods. In this respect, Dufry has accrued CHF 73.3 million.Additionally, Dufry took the initiative to adapt the Company to the current busi-ness environment by reducing personnel expenses based on the expected decline in sales of the respective subsidiaries. The reduction in personnel expenses includes early retirements, hold-backs of seasonal staff employment as well as the reduction of positions across the Group. In June 2020, the Company has decided on and announced the respective plans to implement these measures during the second half of 2020. The Company has incurred in total CHF 73.3 million in severance cost, of which CHF 37.6 million have been paid out during 2020 and CHF 35.7 million are accrued under personnel payables and short term provisions depending on the status of the restructuring measures. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
15810. DEPRECIATION, AMORTIZATION AND IMPAIRMENT IN MILLIONS OF CHF20202019Depreciation of Property, Plant and Equipment (166.2) (184.2)Impairment of Property, Plant and Equipment (37.3) (19.7)Subtotal (note 16 Property, Plant and Equipment) (203.5) (203.9)Depreciation of RoU (1,178.1) (1,170.3)Impairment of RoU (443.1)–Subtotal (note 17 Right-of-use Assets) (1,621.2) (1,170.3)Amortization of Intangibles (304.4) (368.2)Impairment of Intangibles (712.8) (34.6)Subtotal (note 18 Intangible Assets and Goodwill) (1,017.2) (402.8)Total (2,841.9) (1,777.0)Aggregated information of impairments per division (segment)20202019 2IN MILLIONS OF CHFProperty, Plant and EquipmentRight-of-use AssetsIntangible Assets 1Property, Plant and EquipmentRight-of-use Assets Intangible AssetsEurope, Middle East and Africa (EMEA) (31.1) (417.4) (269.6) (8.6)– (9.6)Asia Pacific (0.4) (8.5)––– (1.0)Central & South America– (13.7) (384.2) (7.0)– (24.0)North America (5.7) (3.5) (52.1) (4.1)––Global Distribution Centers (0.1)– (6.9)–––Total (37.3) (443.1) (712.8) (19.7)– (34.6)1 Includes impairment of goodwill: CHF 50.1 million for division North America and CHF 81.0 million for division Central & South America.2 Refer to note 5 for changes in the segment information.There have been no reversals of impairments during 2020 or 2019.As a consequence of the pandemic, nearly all Dufry shops worldwide were required to temporary close to help curb the spread of COVID-19 or have been subject to very low passenger traffic, all these affecting severely the actual turnover, as well as our projections. Due to this, the Company recognized impairments of depreciable and amortizable assets as well as of goodwill (see also note 18.1 IMPAIRMENT TEST OF INTANGIBLE ASSETS). 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
15911. OTHER EXPENSES IN MILLIONS OF CHF20202019Repairs, maintenance and utilities (56.9) (91.4)Credit card expenses (38.3) (115.2)Professional advisor expenses (51.6) (59.7)IT expenses (47.9) (51.0)Freight & packaging material (18.0) (46.7)Acquisition related transaction costs 1 (12.6) (2.9)Other operational expenses (32.0) (50.3)Advertising expenses (10.2) (31.8)Office and admin expenses (20.8) (31.2)Travel, car, entertainment and representation (11.0) (29.8)Franchise fees and commercial services (7.1) (27.1)Public relations expenses (11.3) (24.3)Taxes, other than income tax expense (17.6) (21.9)Ancillary premises expenses (8.4) (16.4)Insurances (14.0) (13.6)Bank expenses (3.9) (5.5)Total (361.6) (618.8)1 Transaction costs in 2020 include costs in relation to aborted business combination transactions mainly in the USA.12. OTHER INCOME IN MILLIONS OF CHF20202019Sales tax recovery 1 6.6 64.4 Selling income 9.6 24.0 Other operating income 17.2 33.2 Total 33.4 121.6 1 In September 2019, a decision of the Federal Court in Rio de Janeiro in a lawsuit between one of our Brazilian subsidiaries and the Brazilian federal tax authority became final and non-appealable, consequently Dufry assessed the recovery of these amounts as virtually certain and will claim back certain indirect tax payments made since 2009. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
16013. FINANCE INCOME AND FINANCE EXPENSESFINANCE INCOME IN MILLIONS OF CHF20202019INCOME ON FINANCIAL ASSETSInterest income on current deposits 22.5 28.5 Deferred gain on modification of financing arrangements– 16.3 Other finance income 13.0 26.0 Interest income on financial assets 35.5 70.8 INCOME ON NON-FINANCIAL ASSETSInterest income 0.1 0.3 INCOME FROM FINANCIAL INVESTMENTS AND ASSOCIATESShare of result in associates (25.4) 0.4 Gain on disposal of financial investments 4.7 0.2 Income from financial investments and associates (20.7) 0.6 Total finance income 14.9 71.7 FINANCE EXPENSESIN MILLIONS OF CHF20202019EXPENSES ON FINANCIAL LIABILITIESInterest expense (325.5) (348.7)of which lease interest (178.7) (187.7)of which bank interest (134.0) (144.8)of which bank commitment fees (1.4) (4.6)of which bank guarantees commission expense (4.0) (3.6)of which related to other financial liabilities (7.4) (8.0)Amortization / write off of arrangement fees (13.1) (10.2)Other finance costs (40.7) (25.7)Interest expense on financial liabilities (379.3) (384.6)EXPENSES ON NON-FINANCIAL LIABILITIESInterest expense (6.1) (2.4)Interest and other finance expenses (6.1) (2.4)Total finance expenses (385.4) (387.0) 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
16114. INCOME TAXESINCOME TAX RECOGNIZED IN THE CONSOLIDATED STATEMENT OF PROFIT OR LOSSIN MILLIONS OF CHF20202019Current Income tax income / (expense) 35.1 (108.7)of which corresponding to the current period 9.9 (110.3)of which adjustments recognized in relation to prior years 25.2 1.6 Deferred Income tax income / (expense) 95.6 30.5 of which related to the origination or reversal of temporary differences 136.9 30.2 of which adjustments recognized in relation to prior years (30.9) 9.0 of which relates to foreign exchange movements 1 (11.5) (10.7)of which adjustments due to change in tax rates 1.1 2.0 Total 130.7 (78.2)1 In countries where Dufry pays taxes in another currency than the functional currency, deferred tax assets and liabilites are impacted by foreign exchange fluctuations. These changes are presented as income tax.Due to the profit/(loss) before tax recognized in 2020 as a consequence of the COVID-19 pandemic, Dufry records a current income tax income mainly based on tax losses carried back in certain jurisdictions. Deferred tax income increased for the year, as a direct consequence of the impairment of acquisition related intan-gibles, where corresponding deferred tax liabilities were released through the profit or loss. In addition, Dufry generated tax losses which can be carried forward and used against future taxable profits.IN MILLIONS OF CHF20202019Consolidated profit / (loss) before taxes (2,871.2) 108.3 Expected tax rate in %20.8% 20.7% Income tax at the expected rate 598.1 (22.4)EFFECT OFIncome not subject to income tax 0.1 0.4 Different tax rates for subsidiaries in other jurisdictions 1.6 12.3 Effect of changes in tax rates on previously recognized deferred tax assets and liabilities 1.2 2.0 Non-deductible expenses (15.9) (7.5)Change of unrecognized tax loss carry-forwards (268.1) (32.5)Net change of revision of estimates on the taxability / deductibility of temporary differences (152.5) (25.5)Non recoverable withholding taxes (3.8) (8.6)Income taxes in non-controlling interest holders 4.6 8.6 Adjustments recognized in relation to prior year (5.7) 10.8 Foreign exchange movements on deferred tax balances 1 (11.5) (10.7)Other items (17.4) (5.1)Total 130.7 (78.2)1 In countries where Dufry pays taxes in a currency other than the functional currency, deferred tax assets and liabilities are impacted by foreign exchange fluctuations between the functional and local currencies. These changes are included in the group's tax expense line. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
162The expected tax rate in % approximates the average income tax rate of the countries where the Group is active, weighted by the profit before taxes of the respective operations adjusted for impairments. For 2020, there were no major changes in tax rates noted for countries in which Dufry is operating.DEFERRED INCOME TAX RECOGNIZED IN OTHER COMPREHENSIVE INCOME OR IN EQUITYIN MILLIONS OF CHF20202019RECOGNIZED IN OTHER COMPREHENSIVE INCOMEActuarial gains / (losses) on defined benefit plans 0.6 1.7 Total 0.6 1.7 RECOGNIZED IN EQUITYTax effect on share-based payments 1 (0.3) 2.8 Total (0.3) 2.8 1 Includes CHF -0.1 (2019: 1.2) million as equity attributable to non-controlling interests. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
16315. COMPONENTS OF OTHER COMPREHENSIVE INCOMEATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT2020 IN MILLIONS OF CHFEmployee benefit reserveHedging & revaluation reservesTranslation reservesRetained earningsTOTALNON-CON-TROLLING INTERESTSTOTAL EQUITYRemeasurement of post-employment benefits plans 1.0 ––– 1.0 – 1.0 Income tax effect 0.6 ––– 0.6 – 0.6 Subtotal 1.6 ––– 1.6 – 1.6 Exchange differences on translating foreign operations–– (219.4)– (219.4) (17.7) (237.1)Subtotal–– (219.4)– (219.4) (17.7) (237.1)Net gain / (loss) on hedge of net investment in foreign operations–– 24.2 – 24.2 – 24.2 Subtotal–– 24.2 – 24.2 – 24.2 Share of other comprehensive income of associates–– 0.2 – 0.2 – 0.2 Subtotal–– 0.2 – 0.2 – 0.2 Other comprehensive income 1.6 – (195.0)– (193.4) (17.7) (211.1)ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT2019 IN MILLIONS OF CHFEmployee benefit reserveHedging & revaluation reservesTranslation reservesRetained earningsTOTALNON-CON-TROLLING INTERESTSTOTAL EQUITYRemeasurement of post-employment benefits plans (16.1)––– (16.1) 0.1 (16.0)Income tax effect 1.7 ––– 1.7 – 1.7 Subtotal (14.4)––– (14.4) 0.1 (14.3)Exchange differences on translating foreign operations–– (7.2)– (7.2) (3.3) (10.5)Subtotal–– (7.2)– (7.2) (3.3) (10.5)Net gain / (loss) on hedge of net investment in foreign operations–– 1.8 – 1.8 – 1.8 Subtotal–– 1.8 – 1.8 – 1.8 Changes in the fair value of equity investments at FVOCI– 0.3 –– 0.3 – 0.3 Subtotal– 0.3 –– 0.3 – 0.3 Share of other comprehensive income of associates–– (0.4)– (0.4)– (0.4)Subtotal–– (0.4)– (0.4)– (0.4)Other comprehensive income (14.4) 0.3 (5.8)– (19.9) (3.2) (23.1) 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
16416. PROPERTY, PLANT AND EQUIPMENT 2020 IN MILLIONS OF CHFLEASEHOLD IMPROVE-MENTSBUILDINGS FURNITURE FIXTURESCOMPUTER HARDWAREVEHICLESWORK IN PROGRESSTOTALAT COSTBalance at January 1 633.9 52.9 491.3 55.6 8.1 55.8 1,297.6 Decrease in scope of consolidation (0.2)– (0.2) (0.1) (0.2)– (0.7)Additions 17.4 0.7 11.9 3.9 – 51.1 85.0 Disposals (26.7) (1.0) (18.0) (3.4) (0.8) (6.6) (56.5)Reclassification within classes 46.5 (36.5) 26.8 2.1 – (38.9)–Reclassification to right-of-use (1.0)––––– (1.0)Reclassification to intangible assets––––– (3.7) (3.7)Currency translation adjustments (51.5) (0.8) (39.4) (8.9) (0.7) (3.8) (105.1)Balance at December 31 618.4 15.3 472.4 49.2 6.4 53.9 1,215.6 ACCUMULATED DEPRECIATIONBalance at January 1 (301.6) (21.8) (282.5) (20.9) (4.9)– (631.7)Decrease in scope of consolidation 0.2 – 0.2 0.1 0.1 – 0.6 Additions (note 10) (83.9) (0.9) (67.1) (13.3) (1.0)– (166.2)Disposals 21.1 1.0 14.1 3.1 0.8 – 40.1 Reclassification within classes (10.6) 13.7 (3.1)––––Currency translation adjustments 32.0 0.5 28.8 6.7 0.6 – 68.6 Balance at December 31 (342.8) (7.5) (309.6) (24.3) (4.4)– (688.6)IMPAIRMENTBalance at January 1 (27.5) (0.2) (10.3) (0.8)–– (38.8)Impairment (note 10) (5.8)– (20.9) (0.5)– (10.1) (37.3)Reclassification within classes (1.5)– 1.5 ––––Currency translation adjustments 1.7 – 0.7 0.1 – (0.1) 2.4 Balance at December 31 (33.1) (0.2) (29.0) (1.2)– (10.2) (73.7)CARRYING AMOUNTAt December 31, 2020 242.5 7.6 133.8 23.7 2.0 43.7 453.3 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
1652019 IN MILLIONS OF CHFLEASEHOLD IMPROVE-MENTSBUILDINGS FURNITURE FIXTURESCOMPUTER HARDWAREVEHICLESWORK IN PROGRESSTOTALAT COSTBalance at January 1 627.7 49.7 396.0 47.0 7.6 62.9 1,190.9 Business combinations 11.4 –––– 1.1 12.5 Additions 69.9 2.1 40.0 11.2 1.3 70.4 194.9 Disposals (46.2) (0.3) (32.7) (5.5) (0.8) (3.6) (89.1)Reclassification within classes (17.7) 3.1 85.5 3.7 0.1 (74.7)–Reclassification to intangible assets––– (1.4)–– (1.4)Currency translation adjustments (11.2) (1.7) 2.5 0.6 (0.1) (0.3) (10.2)Balance at December 31 633.9 52.9 491.3 55.6 8.1 55.8 1,297.6 ACCUMULATED DEPRECIATIONBalance at January 1 (291.0) (17.4) (189.7) (11.8) (4.4)– (514.3)Additions (note 10) (86.9) (5.2) (76.8) (14.1) (1.2)– (184.2)Disposals 35.1 0.2 24.5 5.0 0.7 – 65.5 Reclassification within classes 35.3 – (36.3) 1.0 –––Reclassification to intangible assets––– (0.1)–– (0.1)Currency translation adjustments 5.9 0.6 (4.2) (0.9)–– 1.4 Balance at December 31 (301.6) (21.8) (282.5) (20.9) (4.9)– (631.7)IMPAIRMENTBalance at January 1 (17.6) (0.2) (13.7) (0.8)–– (32.3)Impairment (note 10) (17.1)– (2.4) (0.2)–– (19.7)Disposals 6.5 – 5.5 0.2 –– 12.2 Currency translation adjustments 0.7 – 0.3 ––– 1.0 Balance at December 31 (27.5) (0.2) (10.3) (0.8)–– (38.8)CARRYING AMOUNTAt December 31, 2019 304.8 30.9 198.5 33.9 3.2 55.8 627.1 Cash flow used for purchase of property, plant and equipmentIN MILLIONS OF CHF20202019Payables for capital expenditure at the beginning of the period (28.2) (32.7)Additions of property, plant and equipment (85.0) (194.9)Payables for capital expenditure at the end of the period 10.7 28.2 Currency translation adjustments 1.4 0.1 Total Cash Flow (101.1) (199.3) 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
16617. RIGHT-OF-USE ASSETS 2020 IN MILLIONS OF CHFSHOPSOTHER BUILDINGS VEHICLESOTHERTOTALAT COSTBalance at January 1 5,251.9 212.6 4.6 1.4 5,470.5 Decrease in scope of consolidation (0.8)––– (0.8)Additions1,840.3 38.9 2.0 0.8 1,882.0 Disposals 1 (95.8) (4.7) (0.1)– (100.6)Reclassification within classes 2 (1.5)––– (1.5)Reclassification from property, plant & equipment 1.0 ––– 1.0 Reclassification from intangible assets 3 94.3 ––– 94.3 Currency translation adjustments (218.3) (11.9) (0.3) (0.1) (230.6)Balance at December 31 6,871.1 234.9 6.2 2.1 7,114.3 ACCUMULATED DEPRECIATIONBalance at January 1 (1,108.1) (32.5) (1.2) (0.6) (1,142.4)Decrease in scope of consolidation 0.2 ––– 0.2 Additions (note 10) (1,143.2) (32.9) (1.4) (0.6) (1,178.1)Disposals 1 53.9 1.5 0.1 – 55.5 Reclassification from intangible assets 3 (34.3)––– (34.3)Currency translation adjustments 64.5 2.2 0.1 0.1 66.9 Balance at December 31 (2,167.0) (61.7) (2.4) (1.1) (2,232.2)IMPAIRMENTBalance at January 1–––––Impairment (439.5) (3.6)–– (443.1)Currency translation adjustments (0.3)––– (0.3)Balance at December 31 (439.8) (3.6)–– (443.4)CARRYING AMOUNTAt December 31, 2020 4,264.3 169.6 3.8 1.0 4,438.7 1 Disposals mainly relate to contractual term changes which led to derecognition of right-of-use assets.2 CHF 1.5 m is reclassified to other non-current asset as part of a lease contract re-negociation in division Central & South America.3 Transfers from concession right to right-of-use assets opening balances in Central & South America. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
167 2019 IN MILLIONS OF CHFSHOPSOTHER BUILDINGS VEHICLESOTHERTOTALAT COSTBalance at January 1 at inception of IFRS 16 4,620.9 171.2 3.8 1.0 4,796.9 Business combinations (note 6) 3.3 7.7 –– 11.0 Additions790.0 37.0 0.9 0.5 828.4 Disposals 1 (79.3) (0.6)–– (79.9)Currency translation adjustments (83.0) (2.7) (0.1) (0.1) (85.9)Balance at December 31 5,251.9 212.6 4.6 1.4 5,470.5 ACCUMULATED DEPRECIATIONBalance at January 1 at inception of IFRS 16–––––Additions (note 10) (1,135.1) (33.3) (1.3) (0.6) (1,170.3)Disposals 1 2.6 0.1 –– 2.7 Currency translation adjustments 24.4 0.7 0.1 – 25.2 Balance at December 31 (1,108.1) (32.5) (1.2) (0.6) (1,142.4)CARRYING AMOUNTAt December 31, 2019 4,143.8 180.1 3.4 0.8 4,328.1 1 Early termination of leases. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
16818. INTANGIBLE ASSETS AND GOODWILL CONCESSION RIGHTS2020 IN MILLIONS OF CHFAcquisition relatedPlainBRANDSOTHERTOTALGOODWILLAT COSTBalance at January 1 4,764.5 211.2 270.7 324.0 5,570.4 2,612.9 Business combinations (note 6)––––– 2.7 Additions (note 18.1.4)– 0.3 – 17.3 17.6 –Disposals– (0.7)– (59.9) (60.6)–Reclassification within classes (0.3)–– 0.3 ––Reclassification from property, plant and equipment––– 3.7 3.7 –Reclassification to right-of-use 1– (94.3)–– (94.3)–Currency translation adjustments (237.7) (12.8) (0.8) (12.4) (263.7) (118.0)Balance at December 31 4,526.5 103.7 269.9 273.0 5,173.1 2,497.6 ACCUMULATED AMORTIZATIONBalance at January 1 (1,930.4) (85.3) (3.3) (206.2) (2,225.2)–Additions (note 10) (251.1) (14.9)– (38.4) (304.4)–Disposals– 0.8 – 45.6 46.4 –Reclassification to right-of-use 1– 34.3 –– 34.3 –Currency translation adjustments 112.8 8.3 – 9.3 130.4 –Balance at December 31 (2,068.7) (56.8) (3.3) (189.7) (2,318.5)–IMPAIRMENTBalance at January 1 (100.7)–– (8.4) (109.1) (1.6)Impairment (note 10) (556.8) (8.0) (5.5) (11.4) (581.7) (131.1)Disposals ––– 13.5 13.5 –Reclassification within classes– (3.9)– 3.9 ––Currency translation adjustments 18.7 0.7 – 0.2 19.6 4.4 Balance at December 31 (638.8) (11.2) (5.5) (2.2) (657.7) (128.3)CARRYING AMOUNTAt December 31, 2020 1,819.0 35.7 261.1 81.1 2,196.9 2,369.3 1 Transfers from concession right to right-of-use assets opening balances in Central & South America. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
169 CONCESSION RIGHTS2019 IN MILLIONS OF CHFAcquisition relatedPlainBRANDSOTHERTOTALGOODWILLAT COSTBalance at January 1 4,716.9 205.3 274.4 289.3 5,485.9 2,603.1 Adjustment on IFRS 16 implementation– (6.8)–– (6.8)–Adjusted Balance at January 1 4,716.9 198.5 274.4 289.3 5,479.1 2,603.1 Business combinations (note 6) 100.8 –– 0.1 100.9 23.1 Additions (note 18.1.4)– 9.6 – 40.1 49.7 –Disposals– (0.8)– (4.5) (5.3)–Reclassification from property, plant & equipment––– 1.4 1.4 –Currency translation adjustments (53.2) 3.9 (3.7) (2.4) (55.4) (13.3)Balance at December 31 4,764.5 211.2 270.7 324.0 5,570.4 2,612.9 ACCUMULATED DEPRECIATIONBalance at January 1 (1,648.5) (66.4) (3.3) (174.0) (1,892.2)–Adjustment on IFRS 16 implementation– 3.2 –– 3.2 –Adjusted Balance at January 1 (1,648.5) (63.2) (3.3) (174.0) (1,889.0)–Additions (note 10) (308.9) (21.5)– (37.8) (368.2)–Disposals– 0.8 – 4.1 4.9 –Reclassification from property, plant and equipment––– 0.1 0.1 –Currency translation adjustments 27.0 (1.4)– 1.4 27.0 –Balance at December 31 (1,930.4) (85.3) (3.3) (206.2) (2,225.2)–IMPAIRMENTBalance at January 1 (76.9)––– (76.9) (1.6)Impairment (note 10) (26.0)–– (8.6) (34.6)–Disposals (0.1)––– (0.1)–Currency translation adjustments 2.3 –– 0.2 2.5 –Balance at December 31 (100.7)–– (8.4) (109.1) (1.6)CARRYING AMOUNTAt December 31, 2019 2,733.4 125.9 267.4 109.4 3,236.1 2,611.3 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
17018.1 IMPAIRMENT TEST OF INTANGIBLE ASSETSBrands and goodwill are subject to impairment testing on annual basis or when in-dicators of impairment exist. Concession rights and other amortizable intangible assets are tested for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable.In March 2020, practically all our operations have suffered significant operational restrictions as well as a significant drop of passengers as a direct consequence of measures against the spread of COVID-19. At present, we foresee a recovery starting as soon as the vaccinations progress noticeably. However, there is no assurance when and how far these restrictions will be released.The management performed impairment tests as of March 31, 2020 for selected operations presenting an indication of impairment. Triggered by the ongoing pan-demic, as of September 30, 2020 the management performed impairment tests on all material assets of the group. Although the company has only indicative orien-tations on how to estimate the duration of the lock-downs required by most coun-tries, as well as how the business performance will recover thereafter, management assumed for these impairment tests, that sales will still be impacted in the first part of 2021 and the international air traffic will start recovering stepwise as of the second half of 2021. We have assumed that most sales locations will achieve sales levels close to those of 2019 in 2023. However, the developments for each country will be affected by local circumstances and politics which cannot be predicted precisely.18.1.1 Impairment test of goodwillFor the purpose of impairment testing, goodwill recognized from business combi-nations has been allocated to the following groups of cash generating units (CGU’s). These groups also reflect the reportable segments that are expected to benefit from the synergies of the business combinations:IN MILLIONS OF CHF31.12.202031.12.2019Europe, Middle East and Africa (EMEA) 1,544.3 1,527.9 Asia Pacific 32.7 86.8 Central & South America 511.0 643.7 North America 239.3 311.2 Global Distribution Centers 42.0 41.7 Total carrying amount of goodwill 2,369.3 2,611.3 The recoverable amounts of each group of cash generating unit (GCGU) is deter-mined based on value-in-use calculations which require the use of assumptions (see table with key assumptions below). The calculations use cash flow projections based on financial forecasts approved by the management covering a five-year period. Cash flows beyond the five-year period are extrapolated using a constant terminal growth rate that does not exceed the long-term average growth rate for the respective market and is consistent with forecasted growth included in the travel retail industry reports. The financial results of the global distribution centers have been broken down by GCGU and allocated accordingly. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
171The key assumptions used for determining the recoverable amounts of goodwill are:POST TAX DISCOUNT RATESPRE TAX DISCOUNT RATESGROWTH RATES FOR NET SALESCASH GENERATING UNITS IN PERCENTAGE (%)20202019202020192020*2019Europe, Middle East and Africa (EMEA) 6.90 6.95 7.86 8.06 2.5-121.2 3.3-5.4 Asia Pacific 7.62 8.27 9.05 9.35 3.0-161.5 4.9-7.3 Central & South America 9.40 8.66 11.38 10.33 3.4-64.3 4.4-5.9 North America 6.67 7.39 9.14 10.32 1.8-104.4 1.9-7.4 * The forecasted high growth rates are due to the low base in 2020 due to the COVID-19 pandemic.As basis for the calculation of these discount rates, the Group uses the weighted average cost of capital, based on the following risk free interest rates (derived from the past 5 year average of prime 10-year bonds rates): CHF –0.34 %, EUR 0.05 %, USD 1.88 % (2019: CHF – 0.32 %, EUR 0.25 %, USD 2.17 %). In 2020, the Group used for certain WACC components (e.g. equity ratio and beta) weighting factors from the year 2019, as Management considered these more representative for long term projections.For the calculation of the discount rates and WACC (weighted average cost of capital), the Company used the following re-levered beta:20202019Beta factor1.011.01Sensitivity analysis to changes in assumptionsWith regard to the assessment of value-in-use, Dufry believes that no reasonablypossible change (+/– 1 %) in any of the above key assumptions would cause the recoverable amount of the CGU to materially fall below the carrying amount, except for the goodwill allocated to the division Central and South America, where the carrying amount would exceed the value in use by CHF 77.9 (2019: CHF 206.8) million, if the interest rate increases by 1 %, or by CHF 10.9 (2019: CHF 151.2) million if the sales drop 1 %, or by CHF 106.6 (2019: CHF 183.1) million if the operating profit margin is 1 % lower. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
17218.1.2 Key assumptions used for value-in-use calculationsThe calculation of value-in-use is most sensitive to the following assumptions: –Sales growth –Growth rate used to extrapolate –Gross margin and suppliers prices –Lease expense and lease payments –Discount ratesSales growth Recovery of sales and the respective growth rates depend on the further devel-opment of the COVID 19 pandemic and speed of vaccinations. Management based its assumptions on information available at the time of the preparation of the financial statements and assumes that sales will still be severally impacted in 2021 and the international air traffic will start recovering stepwise during the second half of 2021. Our sales growth assumptions include most locations reaching 2019 sales levels by 2023.Growth rates used to extrapolateFor the periods after 5 years, Dufry has used growth rates between 0.8 % – 1.5 % (2019: 0.0 % – 2.0 %) to extrapolate the cash flow projections.Gross marginsThe expected gross margins are based on average product assortment values es-timated by the management for the budget 2021. These values are maintained over the planning period or where specific actions are planned and have been increased or decreased in accordance with these planned actions. The gross margin is also affected by supplier’s prices. Estimates are obtained from global negotiations held with the main suppliers for the products and countries for which products are sourced.Lease expense and lease paymentsThe company applied the future fixed payments based on its contracts and esti-mated variable lease payments based on expected sales developments. For 2021 we have assumed based on offers and ongoing negotiations that lessors will provide us with certain reliefs of lease payments for a period of up to 12 months. Where the contractual terms of certain operations come to an end during the projected periods, the company has analyzed the renewal conditions and the market situation and assumed renewals where the situation and conditions are favorable.Discount ratesThe discount rates, which include third party debt and equity components, are affected by the following factors: –For the liability component, the rate is based on the average interest of the past 5 years of the respective ten-year government bond and is increased by the company’s effective bank spread and adjusted by the effective blended tax rate and country risk of the respective group of GCGU. –For the equity component, a 5 % equity risk premium is added to the base rate commented above and adjusted by the Beta factor 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. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
17318.1.3 BrandsWhile at corporate level the Group is recognized under the name of Dufry, for retail purposes, it is applying several brands including, among others, Dufry, Hudson, World Duty Free or Nuance. The book values of these brand names remain at fair value recognized at acquisition and are subject to annual impairment testing. In 2020, Dufry fully impaired the brand Colombian Emeralds amounting to CHF 5.5 million. With regard to the assessment of value-in-use for the remaining brands, Dufry believes that no reasonably possible change (+ / – 1 %) in any of the below key assumptions would cause that the recoverable amount falls materially below the carrying value of the respective brand name. The recoverable amount is determined using the Relief of Royalty method that con-siders a steady cash flow income from the royalty income after tax on projected sales for each brand. The following table indicates the key assumptions used for the valuation of the main brands:ROYALTY INCOME RATE AFTER TAXPOST TAX DISCOUNT RATESGROWTH RATES FOR NET SALESBRAND NAMES IN PERCENTAGE (%)202020192020201920202019Dufry 0.31 0.30 6.50 6.88 3.1-78.9 2.1-9.8 Hudson News 1.10 1.10 6.47 7.39 2.1-101.0 1.9-8.4 Nuance 0.32 0.32 5.59 6.23 2.6-129.6 2.5-3.8 World Duty Free 0.31 0.33 5.61 6.25 2.6-128.2 2.5-3.8 These sales growth rates are in line with the assumptions used for the impairment test of goodwill. The post tax discount rates represent the weighted average cost of capital (WACC) of the markets where the brands are generating sales.18.1.4 Cash flows used for purchase of intangible assetsIN MILLIONS OF CHF20202019Payables for capital expenditure at January 1 (0.2) (4.7)Additions of intangible assets (17.6) (49.7)Payables for capital expenditure at December 31– 0.2 Currency translation adjustments (0.1) 0.1 Total Cash Flow (17.9) (54.1) 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
17419. INVESTMENTS IN ASSOCIATESThis includes mainly Lojas Francas de Portugal SA which operates duty-paid and duty-free shops in the airport of Lisbon, as well as other airports in Portugal.These investments are accounted for using the equity method.Summarized statement of financial positionIN MILLIONS OF CHFLOJAS FRANCAS DE PORTUGAL SAOTHER ASSOCIATES31.12.2020Cash and cash equivalents 1.1 8.2 9.3 Other current assets 11.4 15.0 26.4 Non-current assets 7.8 17.1 24.9 Financial debt (4.6) 0.3 (4.3)Other current liabilities (10.4) (17.9) (28.3)Non-current liabilities (4.9) (14.1) (19.0)Net assets 0.4 8.6 9.0 Proportion of Dufry’s ownership49% Dufry’s share of the equity 0.2 6.9 7.1 IN MILLIONS OF CHFLOJAS FRANCAS DE PORTUGAL SAOTHER ASSOCIATES31.12.2019Cash and cash equivalents 4.3 11.4 15.7 Other current assets 27.7 13.8 41.5 Non-current assets 61.3 10.3 71.6 Other current liabilities (28.5) (20.0) (48.5)Non-current liabilities (12.3) (5.9) (18.2)Net assets 52.5 9.6 62.1 Proportion of Dufry’s ownership49% Dufry’s share of the equity 25.7 6.2 31.9 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
175Summarized statement of comprehensive incomeIN MILLIONS OF CHFLOJAS FRANCAS DE PORTUGAL SAOTHER ASSOCIATES2020Turnover 108.5 29.3 137.8 Depreciation, amortization and impairment (53.5) (1.5) (55.0)Financial expenses (0.2) (0.1) (0.3)Income tax–––Net profit / (loss) (52.0) (2.6) (54.6)OTHER COMPREHENSIVE INCOMEItems to be reclassified to net income in subsequent periods (0.2)0.50.3Total other comprehensive income (0.2)0.50.3Total comprehensive income (52.2) (2.1) (54.3)DUFRY'S SHARE49% Net profit / (loss) (25.4)– (25.4)Total other comprehensive income (0.1) 0.3 0.2 Total comprehensive income (25.5) 0.3 (25.2)IN MILLIONS OF CHFLOJAS FRANCAS DE PORTUGAL SAOTHER ASSOCIATES2019Turnover 302.2 44.3 346.5 Depreciation, amortization and impairment (17.6) (0.8) (18.4)Financial expenses (0.3)– (0.3)Income tax (3.1) (0.2) (3.3)Net profit / (loss) 5.1 (0.8) 4.3 OTHER COMPREHENSIVE INCOMEItems to be reclassified to net income in subsequent periods (0.5) (0.1) (0.6)Total other comprehensive income (0.5) (0.1) (0.6)Total comprehensive income 4.6 (0.9) 3.7 DUFRY'S SHARE49% Net profit / (loss) 2.5 (2.1) 0.4 Total other comprehensive income (0.3) (0.1) (0.4)Total comprehensive income 2.2 (2.2)–The information above reflects the amounts presented in the financial statements of the associates (and not Dufry’s share of those amounts) adjusted for differences in accounting policies between the associates and Dufry. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
176Reconciliation of the carrying amount of its investmentsIN MILLIONS OF CHFLOJAS FRANCAS DE PORTUGAL SAOTHER ASSOCIATES TOTALCarrying value at January 1, 2019 29.1 6.5 35.6 Additions– 2.5 2.5 Net profit / (loss) 2.5 (2.1) 0.4 Dividends received (5.6)– (5.6)Other comprehensive income (0.3) (0.1) (0.4)Currency translation adjustments– (0.6) (0.6)Carrying value at December 31, 2019 25.7 6.2 31.9 Additions– 0.4 0.4 Net profit / (loss) (25.4) 0.1 (25.3)Dividends received–––Other comprehensive income (0.1) 0.3 0.2 Currency translation adjustments– (0.1) (0.1)Carrying value at December 31, 2020 0.2 6.9 7.1 20. OTHER NON-CURRENT ASSETS IN MILLIONS OF CHF31.12.202031.12.2019Guarantee deposits 104.1 108.1 Loans and contractual receivables 27.0 34.3 Lease receivables 4.1 7.5 Prepayment for leases 47.3 56.5 Tax receivable 80.3 94.6 Other 0.5 7.4 Subtotal 263.3 308.4 Allowances (6.1) (5.3)Total 257.2 303.1 MOVEMENT IN ALLOWANCESIN MILLIONS OF CHF20202019Balance at January 1 (5.3) (3.0)Creation (1.4) (2.8)Utilized– 0.4 Currency translation adjustments0.6 0.1 Balance at December 31 (6.1) (5.3) 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
17721. INVENTORIES IN MILLIONS OF CHF31.12.202031.12.2019Inventories at cost 771.3 1,123.1 Inventory allowance (111.7) (73.1)Total 659.6 1,050.0 Cost of sales includes inventories written down to net realizable value and inventory losses of CHF 98.8 (2019: 39.5) million.22. TRADE AND CREDIT CARD RECEIVABLES IN MILLIONS OF CHF31.12.202031.12.2019Trade receivables 15.4 37.9 Credit card receivables9.6 12.0 Gross 25.0 49.9 Allowances (7.9) (5.7)Net 17.1 44.2 AGING ANALYSIS OF TRADE RECEIVABLES IN MILLIONS OF CHF31.12.202031.12.2019Not due 5.0 14.7 OVERDUEUp to 30 days 1.0 3.0 31 to 60 days 0.4 1.9 61 to 90 days 0.4 1.7 More than 90 days 0.7 10.9 Total overdue 2.5 17.5 Trade receivables, net 7.5 32.2 MOVEMENT IN ALLOWANCES IN MILLIONS OF CHF20202019Balance at January 1 (5.7) (3.3)Creation (1.4) (3.1)Utilized– 0.1 Reclassification (0.9) 0.5 Currency translation adjustments 0.1 0.1 Balance at December 31 (7.9) (5.7) 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
17823. OTHER ACCOUNTS RECEIVABLE IN MILLIONS OF CHF31.12.202031.12.2019Advertising receivables 92.6 168.5 Services provided to suppliers 9.9 20.0 Loans receivable 3.0 2.4 Receivables from subtenants and business partners 2.0 3.8 Personnel receivables 3.1 3.4 Accounts receivables 110.6 198.1 Prepayments of lease expenses and rents 41.9 47.3 Prepayments of sales and other taxes 113.1 108.3 Prepayments to suppliers 9.7 15.6 Prepayments, other 9.0 14.5 Prepayments 173.7 185.7 Receivables from subleases 2.2 4.7 Guarantee deposits 7.8 5.7 Derivative financial assets 11.5 8.5 Accrued income 0.1 0.1 Other 40.5 36.8 Other receivables 62.1 55.8 Total 346.4 439.6 Allowances (31.4) (17.6)Total 315.0 422.0 MOVEMENT IN ALLOWANCESIN MILLIONS OF CHF20202019Balance at January 1 (17.6) (18.2)Creation* (17.0) (0.6)Released 0.7 0.8 Utilized 0.3 0.6 Reclassification 0.9 (0.5)Currency translation adjustments 1.3 0.3 Balance at December 31 (31.4) (17.6)* The increase in the allowance is triggered by the current COVID-19 crises as many of our suppliers and business partners are impacted and therefore the recoverability of our receivables. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
17924. EQUITY IN MILLIONS OF CHFNOTE31.12.202031.12.2019Attributable to equity holders of the parentShare capital24.1 401.3 252.8 Share premium24.1 4,249.9 3,475.5 Treasury shares25.3 (1.3) (92.5)Mandatory convertible notes24.3 68.4 –Employee benefit reserve24.4 (30.9) (32.5)Translation reserves24.6 (524.9) (329.9)Retained earnings24.7 (3,323.2) (628.1)Total 839.3 2,645.3 Non-controlling interests 78.7 462.7 Total Equity 918.0 3,108.0 24.1 FULLY PAID ORDINARY SHARESIN MILLIONS OF CHFNUMBER OF SHARESSHARE CAPITALSHARE PREMIUMBalance at January 1, 2019 53,871,707 269.44,060.6Redeemed shares (3,304,541) (16.6) (385.3)Distribution to shareholders–– (199.8)Balance at December 31, 2019 50,567,166 252.83,475.5Share capital increases 29,696,516 148.5 809.4 Share issuance costs–– (35.0)Balance at December 31, 2020 80,263,682 401.34,249.9On April 20, 2020, Dufry has issued and placed 5,000,000 new shares out of the authorized capital at CHF 27.50 per share and the gross proceeds from the place-ment are CHF 137.5 million.On October 6, 2020, the Extraordinary General Meeting of Dufry approved the issuance and offering of an ordinary share capital increase of up to 24,696,516 shares with a nominal value of CHF 5 each.On October 20, 2020, the offering period closed and finally 24,696,516 new shares have been placed resulting in an increase of the share capital of CHF 123.5 million and a gross proceeds of CHF 820.4 million. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
18024.2 AUTHORIZED AND CONDITIONAL SHARE CAPITALAUTHORIZED SHARE CAPITALNUMBER OF SHARESIN THOUSANDS OF CHFBalance at January 1, 2019––Shareholders' resolution as of May 9, 2019 5,000,000 25,000 Balance at December 31, 2019 5,000,000 25,000 Share capital increase from authorized capital (5,000,000) (25,000)Balance at December 31, 2020––CONDITIONAL SHARE CAPITALNUMBER OF SHARESIN THOUSANDS OF CHFBalance at January 1, 2019 888,432 4,442 Balance at December 31, 2019 888,432 4,442 Increase of conditional share capital 11,811,568 59,058 Balance at December 31, 2020 12,700,000 63,500 24.3 MANDATORY CONVERTIBLE NOTESNUMBER OF NOTESIN THOUSANDS OF CHFBalance at December 31, 2019––Issue of mandatory convertible notes 695 69,500 Mandatory covertible notes issuance costs(1,100)Balance at December 31, 2020 695 68,400 On November 18, 2020 Dufry, via its subsidiary Dufry One B. V., placed CHF 69.5 million in bonds due 2023, which are mandatory convertible into shares of the Company. The convertible bonds have been issued at par with a denomination of CHF 100,000 per note and carry a coupon of 4.1 %, payable semi-annually in arrears. At maturity on November 18, 2023 the bonds will convert to shares at a price of CHF 33.22 per share. Such shares will be sourced from conditional capital or from existing shares. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
18124.4 EMPLOYEE BENEFITS RESERVEATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENTNON-CONTROLLING INTERESTSTOTAL EQUITYIN MILLIONS OF CHFIN MILLIONS OF CHFIN MILLIONS OF CHFBalance at January 1, 2019 (18.1)Remeasurement of post-employment benefit plans (16.1) 0.1 (16.0)Income tax 1.7 – 1.7 Balance at December 31, 2019 (32.5)Remeasurement of post-employment benefit plans 1.0 – 1.0 Income tax 0.6 – 0.6 Balance at December 31, 2020 (30.9)24.5 HEDGING AND REVALUATION RESERVESATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENTNON-CONTROLLING INTERESTSTOTAL EQUITYIN MILLIONS OF CHFIN MILLIONS OF CHFIN MILLIONS OF CHFBalance at January 1, 2019 (0.3)– (0.3)Gain / (loss) arising on changes in fair value of financial instruments: – Fair value changes of equity investments 0.3 – 0.3 Balance at December 31, 2019–Balance at December 31, 2020–––24.6 TRANSLATION RESERVESATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENTNON-CONTROLLING INTERESTSTOTAL IN MILLIONS OF CHFIN MILLIONS OF CHFIN MILLIONS OF CHFBalance at January 1, 2019 (324.1)Exchange differences arising on translating the foreign operations (7.2) (3.3) (10.5)Net gain / (loss) on hedge of net investments in foreign operations 1 (note 27.2) 1.8 – 1.8 Share of other comprehensive income of associates (0.4)– (0.4)Balance at December 31, 2019 (329.9)Exchange differences arising on translating the foreign operations (219.4) (17.7) (237.1)Net gain / (loss) on hedge of net investments in foreign operations (note 27.2) 24.2 – 24.2 Share of other comprehensive income of associates 0.2 – 0.2 Balance at December 31, 2020 (524.9)1 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. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
18224.7 RETAINED EARNINGSATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENTNON-CONTROLLING INTERESTSTOTAL EQUITYIN MILLIONS OF CHFIN MILLIONS OF CHFIN MILLIONS OF CHFBalance at January 1, 2019 (567.9)Net profit / (loss) (26.5) 56.6 30.1 Dividends to non-controlling interests– (73.8) (73.8)Assignment of treasury shares (27.8) (2.0) (29.8)Share-based plan expenses 13.3 0.4 13.7 Income tax on equity transactions 1.6 1.2 2.8 Share capital increase Dufry Colombia (21.3)– (21.3)Put option held by non-controlling interests– (55.7) (55.7)Other changes in participation of non-controlling interests 0.5 96.3 96.8 Balance at December 31, 2019 (628.1)Net profit / (loss) (2,513.7) (226.8) (2,740.5)Loss on disposal of treasury shares (55.1)– (55.1)Share-based payments (27.3) (1.7) (29.0)Put option held by non-controlling interests 8.0 24.3 32.3 Income tax on equity transactions (0.2) (0.1) (0.3)Dividends to non-controlling interests– (33.5) (33.5)Equity component of convertible bond 28.9 – 28.9 Other changes in participation of non-controlling interests* (135.7) (128.5) (264.2)Balance at December 31, 2020 (3,323.2)* Mainly relates to the acquisition of the non-controlling interests of Hudson Ltd CHF (148.9) million – see note 26.25. SHARE-BASED PAYMENT PLANS25.1 SHARE PLAN OF DUFRY AGDuring 2020, Dufry did not grant any awards.On December 12, 2019, Dufry granted to selected members of the senior manage-ment the award 2019 consisting of 81,334 performance share units (PSU). The PSU award 2019 has a contractual life of 29 months and will vest on May 2, 2022. At grant date the fair value of one PSU award 2019 represented the market value for one Dufry share at that date, i. e. CHF 97.36. As of December 31, 2020, none of the PSU award 2019 forfeited and 81,334 PSU award 2019 remain outstanding.On December 12, 2018, Dufry granted to the members of the senior management the award 2018 consisting of 136,443 PSU units. The PSU award 2018 has a con-tractual life of 29 months and will vest on May 1, 2021. At grant date the fair value of one PSU award 2018 represented the market value for one Dufry share at that date, i. e. CHF 91.48, adjusted by the probability that participants comply with the ongoing contractual relationship clause. As of December 31, 2020, 6,897 of the PSU award 2018 forfeited, so that 129,546 PSU award 2018 remain outstanding. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
183Holders of one PSU award 2019 or 2018 will have the right to receive free of charge up to two Dufry shares depending on the effective cumulative amount of cash earnings per share (Cash EPS) reached by Dufry during the grant year of award and the following two years compared with the target (2019: CHF 23.82, 2018: CHF 24.27). The Cash EPS equals the basic earnings per share adjusted for amortization of intangible assets identified during business combinations and acquisition transaction expenses. As of 2019, the plan administrator adjusted the cash EPS targets for 2019 and onwards by adjusting it also regarding the interest expense on lease obligation. If at vesting the cumulative adjusted EPS is at target level, each PSU grants one share. If the cumulative adjusted EPS is at 150 % of the target ( maximum threshold) or above, each PSU grants 2 shares at vesting, and if the adjusted EPS is at 50 % of the target (minimum threshold) or below, no share will be granted at vesting. If the adjusted EPS is between 50 % and 150 % of the target, the number of shares granted for each PSU will be allocated on a linear basis. Additionally, the allocation of shares is subject to an ongoing contractual relationship of the participant with Dufry throughout the vesting period. Holders of PSU are not entitled to vote or receive dividends like shareholders do.On May 4, 2020, the PSUaward 2017 vested and the company assigned and delivered, free of charge 118,800 Dufry shares to the holders of these certificates. The performance of the PSU award 2017 was measured against the target Cash EPS of CHF 24.98 and achieved a payout ratio of 0.945 Dufry shares per PSU award 2017.On May 4, 2021, the PSUaward 2018 will vest and the company estimates that it will not assign and deliver any Dufry shares to the holders of these certificates as the minimum performance required by the PSU award 2018 was not achieved.25.2 SHARE PLAN OF HUDSON LTD.During 2020, Hudson did not grant any awards.On September 10, 2019, Hudson Ltd granted to selected members of its senior management the Hudsonaward 2019 consisting of 405,674 PSU’s units and 135,243 RSU’s units. Both plans have a contractual life of 32 months and will vest on May 2, 2022. At grant date the fair value of one PSU or RSU award 2019 represents the market value for one Hudson share at that date, i. e. CHF 12.23 (USD 12.64), adjusted by the probability that participants comply with the ongoing contractual relationship clauses. As of December 31, 2020, all PSU ‘s and all RSU’s Hudsonaward 2019 have been converted into cashsettled plans.On November 1, 2018, Hudson Ltd granted to selected members of its senior management the Hudsonaward 2018 consisting of 435,449 PSU’s units and 145,150 RSU’s units. Both plans have a contractual life of 30 months and will vest on May 1, 2021. At grant date the fair value of one PSU or RSU award 2018 represented the market value for one Hudson share at that date, i. e. CHF 20.85 (USD 21.06), adjusted by the probability that participants comply with the ongoing contractual relationship clauses. As of December 31, 2020, all PSU and all RSU Hudsonaward 2018 have been converted into cash settled plans. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
184Originally, the holders of one PSU Hudson-award 2019 or 2018 would have had the right to receive free of charge up to two Hudson Ltd Class A common shares based on the cumulative results achieved by Hudson over a three year period on three performance metrics (PM) against the respective targets measured in USD and thus as follows: 30 % based on Sales of CHF 5.937 (USD 6,135) (2018: CHF 5,719 or USD 5,828) million, 30 % based on EBITDA of CHF 731 (USD 755) (2018: CHF 694.8 or USD 708) million and 40 % based on Cash EPS of CHF 2.21 (USD 2.28) (2018: CHF 2.17 or USD 2.22). Whereby the Cash EPS equals the basic Earnings per Share adjusted for amortization and impairment of intangible assets identified during business combinations and non-recurring effects. As of 2019, the plan administrator adjusted the cash EPS targets for 2019 and onwards by adjusting it also regarding the interest expense on lease payments. If at vesting the effective cumulative PM are at target level, each PSU grants one share. If a cumulative PM is at 150 % of the target (maximum threshold) or above, each PSU will grant at vesting the specific PM weight of two shares, and if a PM is at 50 % of the PM target (minimum threshold) or below, no share will be granted at vesting. If a PM is between 50 % and 150 % of the target, the payout ratio will be allocated on a linear basis. Finally, the number of shares granted for each PSU will be the sum of the three payout ratios. Additionally, the allocation of shares is subject to an ongoing contractual relationship of the participant with Hudson throughout the vesting period. Holders of PSU are not entitled to vote or receive dividends, like shareholders do. The plans consider different rights in case of early termination.On November 12, 2020, and as a consequence of the delisting of Hudson Ltd, the administrator modified the plan to cancel all unvested RSUs and PSUs, effective as of the delisting date, and convert them into the right to receive a cash payment, equal to the product of CHF 6.90 (USD 7.70) and the number of shares underlying the RSU and PSU awards, respectively. The number of shares underlying each PSU will be calculated based on the achieved results against the Performance Targets as commented in the paragraph above for the period through the delisting date. All other conditions and service vesting terms remain unchanged. On February 5, 2020, the last part of the IPO-award became due and the company assigned and delivered, free of charge 263,136 Hudson Ltd Class A common shares to the holders of these awards.In 2020, Dufry recognized through profit and loss for all these share-based plans expenses for a total of CHF 0.3 (2019: 18.1) million.25.3 TREASURY SHARESTreasury shares are valued at historical cost.NUMBER OF SHARESIN MILLIONS OF CHFBalance at January 1, 2019 4,169,089 (520.8)Redeemed shares (3,304,541) 401.9 Assigned to holders of PSU / RSU-Awards (234,467) 26.4 Balance at December 31, 2019 630,081 (92.5)Disposal of shares (500,000) 68.8 Assigned to holders of PSU-Awards (118,800) 22.4 Balance at December 31, 2020 11,281 (1.3) 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
18525.4 EARNINGS PER SHARE25.4.1 Earnings per share attributable to equity holders of the parentBasicBasic earnings per share are calculated by dividing the net profits / (loss) attribut-able to equity holders of the parent by the weighted average number of shares outstanding during the year.IN MILLIONS OF CHF / QUANTITY20202019Net profit / (loss) attributable to equity holders of the parent (2,513.7) (26.5)Weighted average number of ordinary shares outstanding 58,450,437 49,885,624 Basic earnings per share in CHF (43.01) (0.53)DilutedDiluted earnings per share are calculated by dividing the net profits/(loss) attrib-utable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.IN MILLIONS OF CHF / QUANTITY20202019Net profit / (loss) attributable to equity holders of the parent (2,513.7) (26.5)Weighted average number of ordinary shares outstanding 58,450,437 49,885,624 Diluted earnings per share in CHF (43.01) (0.53)25.4.2 Adjusted EPSDufry uses the adjusted EPS as an alternative performance indicator (non-IFRS figure). The table below shows how this indicator has been derived from:IN MILLIONS OF CHF / QUANTITYNOTE20202019Net profit / (loss) attributable to equity holders of the parent (2,513.7) (26.5)ADJUSTED FOR Amortization of concession rights*18 251.1 308.9 Impairment of concession rights*18 556.8 26.0 Impairment of goodwill*18 131.1 – Interest on lease obligation13 178.7 187.7 Transactions expenses*6– 2.9 Deferred income tax on above lines (172.6) (90.6)Minority interst on above lines (89.8) (59.1)Adjusted net profit (1,658.4) 349.3 Weighted average number of ordinary shares outstanding 58,450,437 49,885,624 Adjusted EPS (28.37) 7.00 * related to acquisitions. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
18625.4.3 Weighted average number of ordinary sharesIN THOUSANDS20202019Outstanding shares 58,664,860 52,441,248 Less treasury shares (214,423) (2,555,624)Used for calculation of basic earnings per share 58,450,437 49,885,624 EFFECT OF DILUTIONPSU / RSU Awards––Used for calculation of earnings per share adjusted for the effect of dilution 58,450,437 49,885,624 For movements in shares see note 24 Equity and note 25.3 Treasury shares.26. BREAKDOWN OF TRANSACTIONS WITH NON-CONTROLLING INTERESTS HOLDERSThe following transactions have been recognized in equity attributable to non- controlling interests holders:IN MILLIONS OF CHFNOTE20202019Hudson Ltd 42.6% acquired26.1 (126.5)–Put Option held by NCI to sell 49% of Dufry Staer Holding Ltd 1 24.3 (55.7)Dufry DFASS Colombia SAS 49% acquired– 12.1 Other non-controlling interests disposed (5.3) (0.7)Change in Dufry's interest (107.5) (44.3)Brookstone acquisition - final purchase price allocation 1 6.2 2.3 0.1 RegStaer M Ltd (Vnukovo acqusition) 40% 6.1 – 38.0 Dufry Staer Holding Ltd share capital increase– 39.7 Business combinations (see note 6) 2.3 77.8 Division North America, changes in share capital of several subsidiaries 3.5 4.1 Duty Free Carribean (Bahamas) Ltd 40%– 1.4 Dufry DFASS Colombia SAS share capital increase– 1.5 Dufry Thomas Julie Korea Co. Ltd share capital increase– 0.2 Other (2.5) (0.1)Share capital changes 1.0 7.1 Total (104.2) 40.6 1 No cash flow effects in current financial period.26.1 TRANSACTION WITH NON–CONTROLLING INTERESTS IN HUDSON LTDOn December 1, 2020, Dufry acquired the remaining 42.6 % (CHF 126.5 million) of the voting equity interest of Hudson Ltd for a total consideration of CHF 275.4 (USD 302.9) million. Dufry offered to the shareholders of Hudson Class A shares a price of USD 7.70 per share. After the completion of this transaction, the trading of the Hudson shares on the New York Stock Exchange has been suspended. The Company has financed this transaction with a capital increase (note 24).As the Group already controlled this entity before the partial acquisition, there is no change in the sales or operating profit of the Group. This transaction was accounted for as a transaction between equity holders for the Group. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
18726.2 RECONCILIATION OF CASH FLOWS 2020Cash flows used for the acquisition of non-controlling interestsIN MILLIONS OF CHF2020Total consideration paid in cash (275.4)Carrying value of the non-controlling interest in Hudson Ltd. 126.5 Difference recognized in retained earnings within equity (note 24.7) (148.9)26.3 INFORMATION ON COMPANIES WITH NON-CONTROLLING INTERESTSIn 2020, Dufry allocated CHF (226.8) (2019: 56.6) million of net loss to non- cont-rolling interests (NCI). Within the Dufry Group, the net earnings allocated to non-controlling interests is predominantly related to the Hudson sub-group, totaling CHF (112.3) (2019: 38.7) million. On December 1, 2020, Dufry acquired the remaining 42.6 % of Hudson. Hudson has many subsidiaries, most of them with non-controlling interests. Details about the name of these subsidiaries, location of primary operations, Hudson’s share in ownership and share capital of these subsidiaries, sorted by state of incorporation, have been disclosed in the list of most important subsidiaries at the end of these financial statements.Airport authorities in the United States frequently require companies to partner with local business partners based on Airport Concession Disadvantaged Business Enterprise (“ACDBE”) regulation. Dufry may partner with third parties to win new business opportunities and maintain existing ones. Consequently, Dufry’s business model contemplates the involvement of local partners. Net profits from these operating subsidiaries attributed to Dufry and to non-controlling interests holders reflect the applicable ownership structure. The net profits and dividend payments attributable to non-controlling interests exclude expenses incurred by Dufry at the acquisition of these businesses, which are not attributable to the local partners, such as acquisition related interest expenses, income taxes and amortization of intangible assets from acquisitions.FINANCIAL POSITION OF COMPANIES WITH NCI 31.12.2020 IN MILLIONS OF CHFHUDSON LTD.OTHER 1TOTALDividends paid to NCI– (33.3) (33.3)Current assets– 174.9 174.9 of which cash and cash equivalents– 41.4 41.4 Non-current assets– 1,171.7 1,171.7 Current liabilities– 490.1 490.1 of which financial liabilities– 435.2 435.2 Non-current liabilities– 802.2 802.2 of which financial liabilities– 742.8 742.8 Net assets– 54.3 54.3 Equity attributable to NCI– 78.7 78.7 1 Other subsidiaries with non-controlling interests. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
18831.12.2019 IN MILLIONS OF CHFHUDSON LTD.OTHER 1TOTALDividends paid to NCI 2 (39.8) (30.7) (70.5)Current assets 537.0 527.2 1,064.2 of which cash and cash equivalents 307.8 71.4 379.2 Non-current assets 2,203.6 1,146.1 3,349.7 Current liabilities 523.2 520.3 1,043.5 of which financial liabilities 282.3 500.8 783.1 Non-current liabilities 1,589.0 417.5 2,006.5 of which financial liabilities 1,549.7 368.3 1,918.0 Net assets 628.4 735.5 1,363.9 Equity attributable to NCI 310.4 152.3 462.7 2 NCI's of Hudson.FINANCIAL RESULT OF COMPANIES WITH NCI 2020 IN MILLIONS OF CHFHUDSON LTD.OTHER 1TOTALTurnover 644.4 391.5 1,035.9 Depreciation, amortization and impairment (379.7) (395.0) (774.7)Finance income 1.2 0.2 1.4 Finance expense (78.8) (43.8) (122.6)Income tax 66.3 11.9 78.2 Net profit / (loss) (251.4) (328.2) (579.6)of which attributable to NCI 2 (112.3) (114.5) (226.8)Other comprehensive income 24.2 28.6 52.8 Total comprehensive income (227.2) (299.6) (526.8)of which attributable to NCI (128.5) (116.0) (244.5)2019 IN MILLIONS OF CHFHUDSON LTD.OTHER 1TOTALTurnover 1,935.8 996.5 2,932.3 Depreciation, amortization and impairment (361.1) (165.6) (526.7)Finance income 4.7 1.7 6.4 Finance expense (88.5) (22.5) (111.0)Income tax (14.4) (10.1) (24.5)Net profit / (loss) 46.0 52.0 98.0 of which attributable to NCI 2 38.7 17.9 56.6 Other comprehensive income 22.2 (12.2) 10.0 Total comprehensive income 68.2 39.8 108.0 of which attributable to NCI 40.5 12.9 53.4 1 Other subsidiaries with non-controlling interests.2 The net earnings attributable to NCI represent the share the NCI have in the result of the respective subsidiaries prepared on local GAAP's. The net earnings attributable to the Group for these operations represent the remaining part of the net earnings adjusted to comply with IFRS as well as adjusted with the fair value adjustments made at the time of acquisitions. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
18927. BORROWINGS IN MILLIONS OF CHF31.12.202031.12.2019Bank debt overdrafts 15.1 8.7 Bank debt loans 34.7 40.5 Third party loans 4.1 4.0 Borrowings, current 53.9 53.2 Bank debt loans 1,672.3 1,931.9 Senior Notes 1,975.5 1,658.4 Third party loans 2.8 11.9 Borrowings, non-current 3,650.6 3,602.2 Total 3,704.5 3,655.4 OF WHICH AREBank debt 1,722.1 1,981.1 Senior Notes 1,975.5 1,658.4 Third party loans 6.9 15.9 BANK DEBTIN MILLIONS OF CHF31.12.202031.12.2019BANK DEBTS ARE DENOMINATED INUS Dollar 1,017.9 677.5 British Pound– 1,220.20 Swiss Franc 527.6 50.4 Subtotal 1,545.5 1,948.1 BANK DEBTS AT SUBSIDIARIES INEuro* 124.3 –Swiss Franc* 20.0 –Various currencies 46.6 49.3 Deferred arrangement fees (14.3) (16.3)Total 1,722.1 1,981.1 * Government backed COVID-19 loans.NOTESIN MILLIONS OF CHF31.12.202031.12.2019Senior Notes denominated in Euro 1,676.2 1,682.2 Convertible Notes denominated in CHF 326.7 –Deferred gain on modification of financing arrangements (13.8) (15.9)Deferred arrangement fees (13.6) (7.9)Total 1,975.5 1,658.4 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
190DETAILED CREDIT FACILITIESDufry negotiates and manages its main credit facilities centrally.The bank credit agreements and the bank guarantee facilities contain covenants and conditions customary to this type of financing. In 2020 and 2019, Dufry complied with the financial covenants and conditions contained in the bank credit agreements.Bank credit facilitiesDRAWN AMOUNT IN CHFIN MILLIONS OFMATURITYCURRENCYCREDIT LIMIT IN FOREIGN CURRENCY31.12.202031.12.2019Committed 5-year term loan (multi-currency)03.11.2022 USD 700.0 619.6 677.5 Committed 5-year term loan (multi-currency)03.11.2022 EUR 500.0 527.6 564.2 5+1+1-year revolving credit facility (multi-currency)03.11.2024 EUR 1,300.0 398.3 706.4 Committed 12+6+6 month term and revolving facility 29.05.2021 EUR 367.0 ––Uncommited current facilitiesn.a. EUR 50.0 ––Uncommited current facilitiesn.a. CHF 50.0 –– Total 1,545.5 1,948.1 NotesAMOUNT IN CHFIN MILLIONS OFMATURITYCOUPON RATECURRENCYNOMINAL IN FOREIGN CURRENCY31.12.202031.12.2019Convertible notes 104.05.20231.00% CHF 350.0 320.2 –Senior notes15.10.20242.50% EUR 800.0 860.1 864.1 Senior notes15.02.20272.00% EUR 750.0 795.2 794.3 Total 1,975.5 1,658.4 1 Equity component CHF 28.9 million.WEIGHTED AVERAGE INTEREST RATEThe borrowings under these credit facilities bear interest at a floating rate (EURIBOR or LIBOR) plus spread. Below are the overall weighted average notional interest rates on the main currencies for the respective years:INTEREST RATE IN PERCENTAGE (%)20202019Average on USD 3.41 4.03 Average on CHF 1.94 0.63 Average on EUR 2.26 3.30 Average on GBP 2.04 2.12 Weighted Average Total 2.44 2.97 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
19127.1 HEDGE OF NET INVESTMENTS IN FOREIGN OPERATIONSThe company has designated USD 292.9 million bank loans in relation to the following investments in subsidiaries:AMOUNT IN HEDGING CURRENCYAMOUNT IN CHFIN MILLIONS OFCURRENCY31.12.202031.12.201931.12.202031.12.2019Alliance Inc., Interbaires SA, Navinten SA, Blaicor SA, International Operation & Services SA, Duty Free Ecuador SA 1 USD 292.9 292.9 259.2 283.4 1 Dufry had a hedge relationship with Dufry do Brasil and WDFG UK Holdings Limited in the past, which are no longer designated, but for which the originally hedged foreign operation is still part of the Group. The related hedge gain accumulated in the CTA are amounted respectively to CHF 109.1 and CHF 75.5 millions.There is no ineffectiveness for these hedges and the effect of hedging is presented in line item Net gain/(loss) on hedge of net investment in foreign operations in OCI.27.2 EQUITY-LIKE LOANSDufry granted to below mentioned foreign subsidiaries long-term loans. These loans are considered as part of Dufry’s net investment in foreign operations, as settlement is neither planned nor likely to occur in the foreseeable future.AMOUNT IN FOREIGN CURRENCYEQUIVALENT AMOUNT IN CHFIN MILLIONS OFCURRENCY31.12.202031.12.201931.12.202031.12.2019Dufry International AG EUR 1,087.1 – 1,175.6 –Nuance Group (Australia) Pty Ltd. AUD 196.6 121.8 133.9 82.8 Dufry Americas y Caribe Corp. USD 10.2 10.2 9.0 9.9 Nuance Group (Sverige) AB SEK 110.0 110.0 11.9 11.4 Dufry Duty Free (Nigeria) Ltd. USD 6.1 6.1 5.4 5.9 Total 1,335.8 110.0 Any translation difference arising on these loans are accounted for in equity in the line item Exchange difference on translating foreign operations.28. LEASE OBLIGATIONS IN MILLIONS OF CHF31.12.202031.12.2019Lease obligations, current 1,397.5 1,085.7 Lease obligations, non-current 4,022.9 3,319.0 Total 5,420.4 4,404.7 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
19229. BORROWINGS AND LEASE OBLIGATIONS, NET IN MILLIONS OF CHFCASH AND CASH EQUIVALENTSLEASE OBLIGA-TIONSBORROWINGS NET DEBTBalance at January 1, 2020 553.5 4,404.7 3,655.4 7,506.6 Cash flows from operating, financing and investing activities (163.2)–– 163.2 Repayment of 3 rd party loans payable–– (1.0) (1.0)Transaction costs for financial instruments–– (13.4) (13.4)Proceeds from convertible bonds–– 350.0 350.0 Proceeds from bank debt–– 557.2 557.2 Repayment of bank debt–– (756.5) (756.5)Lease payments– (405.7)– (405.7)Cash flow (163.2) (405.7) 136.4 (106.2)Additions and lease modifications– 1,880.4 – 1,880.4 Interest on lease obligations– 178.7 – 178.7 Relief on lease obligations– (380.3)– (380.3)Early termination of lease obligations– (43.8)– (43.8)Equity component of convertible bonds–– (28.9) (28.9)Discounted interests –– 5.7 5.7 Arrangement fees amortization–– 11.9 11.9 Other non-cash movements– (3.9) (33.2) (37.1)Currency translation adjustments (30.0) (154.8) 121.2 (3.6)Unrealized exchange differences on the translation of net debt in foreign currencies– (54.9) (164.0) (218.9)Other non-cash movements (30.0) 1,421.4 (87.3) 1,364.1 Balance at December 31, 2020 360.3 5,420.4 3,704.5 8,764.6 IN MILLIONS OF CHFCASH AND CASH EQUIVALENTSLEASE OBLIGA-TIONSBORROWINGS NET DEBTBalance at January 1, 2019 538.2 – 3,824.3 3,286.1Lease obligation at January 1, 2019– 4,784.3 – 4,784.3 Balance at January 1, 2019 538.2 4,784.3 3,824.3 8,070.4 Cash flows from operating, financing and investing activities 51.9 –– (51.9)Transaction costs for financial instruments–– (2.5) (2.5)Proceeds from convertible bonds–– 823.3 823.3 Proceeds from bank debt–– 90.7 90.7 Repayment of bank debt–– (976.7) (976.7)Lease payments– (1,269.5)– (1,269.5)Cash flow 51.9 (1,269.5) (65.2) (1,386.6)Business combinations (note 6) 0.3 11.0 0.6 11.3 Additions to lease obligations– 838.5 – 838.5 Interest on lease obligations– 187.7 – 187.7 Early termination of lease obligations– (78.1)– (78.1)Arrangement fees amortization–– (13.7) (13.7)Foreign exchange adjustments (36.9) (69.2) (90.6) (122.9)Other non-cash movements (36.6) 889.9 (103.7) 822.8 Balance at December 31, 2019 553.5 4,404.7 3,655.4 7,506.6 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
193On May 4, 2020 Dufry, via its subsidiary Dufry One B. V., placed CHF 350 million in convertible bonds due 2023, conditionally convertible into shares of the Company. The convertible bonds have been issued at par with a denomination of CHF 200,000 and carry a coupon of 1.0 %, payable semi-annually in arrears. At maturity on May 4, 2023 the bonds will be redeemed at par. During such time bondholders can opt to convert the bonds at a price of CHF 33.00 per share. Such shares will be sourced from conditional capital or from existing shares. On May 18, 2020, the General As-sembly approved the respective increase of the conditional share capital to 12.7 million shares (at nominal value of CHF 5.00 each, CHF 63.5 million).29.1 OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIESDufry’s notional cash pool is operated by a major finance institute. Based on enforceable master netting agreement, the respective balances at the end of the period have been set-off as follows:IN MILLIONS OF CHFBALANCE BEFORE GLOBAL POOLINGSET-OFF NET BALANCE 31.12.2020Cash and cash equivalents 1,089.7 (729.4) 360.3 Borrowings, current 783.3 (729.4) 53.9 31.12.2019Cash and cash equivalents 1,922.7 (1,369.2) 553.5 Borrowings, current 1,422.4 (1,369.2) 53.2 29.2 LEGAL RESTRICTIONS ON MONEY TRANSFERCash and cash equivalents at the end of the reporting period include CHF 36.3 (2019: 67.5) million held by subsidiaries operating in countries with exchange controls or other legal restrictions on money transfer.30. OTHER LIABILITIES IN MILLIONS OF CHF31.12.202031.12.2019Concession fee payables 95.5 200.3 Other service related vendors 181.1 201.0 Personnel payables 150.9 144.9 Deferred lease expense 0.7 108.7 Sales and other tax liabilities 39.9 49.4 Put option Dufry Staer Holding Ltd (note 6.1) 23.4 55.7 Financial derivative liabilities - current– 24.4 Lease obligation due to tax refund (further comments on note 12) 17.4 30.0 Payables for capital expenditure 10.7 28.4 Interest payables 16.1 14.4 Payables to local business partners 1.4 1.8 Other payables 39.4 56.39Total 576.5 915.4 THEREOFCurrent liabilities 533.0 827.1 Non-current liabilities 43.5 88.3 Total 576.5 915.4 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
19431. DEFERRED TAX ASSETS AND LIABILITIESDeferred tax assest and liabilities arise from the following positions:IN MILLIONS OF CHF31.12.202031.12.2019DEFERRED TAX ASSETSInventories 4.8 18.2 Property, plant and equipment 38.2 32.1 Intangible assets 29.8 35.1 Lease obligations 459.2 688.6 Provisions and other payables 52.3 40.5 Tax loss carry-forward 116.9 95.5 Other 8.7 5.4 Total 709.9 915.4 DEFERRED TAX LIABILITIESProperty, plant and equipment (10.9) (14.7)Right-of-use assets (493.6) (687.8)Intangible assets (363.9) (454.1)Provisions and other payables (7.6) (4.3)Other (10.3) (29.2)Total (886.3) (1,190.1)Deferred tax liabilities net (176.4) (274.7)Deferred tax balances are presented in the consolidated statement of financial position as follows:IN MILLIONS OF CHF20202019Deferred tax assets 145.5 122.1 Deferred tax liabilities (321.9) (396.8)Balance at December 31 (176.4) (274.7)Reconciliation of movements to the deferred taxes:IN MILLIONS OF CHF20202019Changes in deferred tax assets 23.4 (16.3)Changes in deferred tax liabilities 74.9 29.1 Business combinations (note 6)– 19.3 Currency translation adjustments (2.4) 2.9 Deferred tax movements (expense) at December 31 95.9 35.0 THEREOFRecognized in the statement of profit or loss 95.6 30.5 Recognized in equity 1 (0.3) 2.8 Recognized in OCI 0.6 1.7 3 Financial Report
Consolidated Financial Statements
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195Tax loss carryforwardCertain 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 may be limited by local law in time (expiration) or in quantity or limited by the ability of the respective subsidiary to generate enough taxable profits in the future. Deferred tax assets relating to unused tax losses carryforwards or temporary differences are recognized when it is probable that such tax credits can be utilized in future periods by the respective entity in accordance with the approved budget 2020 and the management projections thereafter.The unrecognized tax losses carryforwards by expiry date are as follows:IN MILLIONS OF CHF31.12.202031.12.2019Expiring within 1 to 3 years 266.1 103.1 Expiring within 4 to 7 years 733.3 340.5 Expiring after 7 years 54.7 65.0 With no expiration limit 1,136.2 640.5 Total 2,190.3 1,149.1 Unrecognized deferred tax liabilitiesDufry has not recognized deferred tax liabilities associated with investments in subsidiaries where Dufry can control the reversal of the timing differences and where it is not probable that the temporary differences will reverse in the foresee-able future. Dufry does not expect that these differences result in taxable amounts in determining taxable profit (tax loss) of future periods when the carrying amount of the investment is recovered. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
19632. PROVISIONS IN MILLIONS OF CHFCONTIN-GENT LIABILITIESONEROUS CONTRACTSCLOSEDOWNLAWSUITS AND DUTIESLABOR DISPUTESOTHERTOTALBalance at January 1, 2020 11.3 38.6 2.3 23.4 3.6 18.5 97.7 Charge for the year– 9.0 0.8 0.2 0.4 8.7 19.1 Utilized (0.9) (8.3) (0.2) (0.1) (0.5) (1.7) (11.7)Unused amounts reversed– (8.2)– (1.3)– (2.0) (11.5)Interest discounted– 2.0 –––– 2.0 Reclassification within classes–– (0.4)–– 0.4 –Reclassification from / to other accounts––––– 0.1 0.1 Currency translation adjustments (0.6) 0.2 (0.1) (1.7) (0.3) (1.2) (3.7)Balance at December 31, 2020 9.8 33.3 2.4 20.5 3.2 22.8 92.0 THEREOF Current – 11.1 2.4 20.5 0.7 14.8 49.5 Non-current 9.8 22.2 –– 2.5 8.0 42.5 Management believes that its provisions are adequate based upon currently available information. However, given the inherent difficulties in estimating liabilities in the areas described below, future expenses may be different from the amounts provisioned.CONTINGENT LIABILITIESContingent liabilities are recognized in connection with business combinations, usually in relation with legal claims, from which the final outcome is difficult to assess.ONEROUS CONTRACTSDufry enters in certain non-cancellable long term lease agreements for shops. If the economic condition to operate such business deteriorates materially, it can happen that the present value of the unavoidable future cash flows is not enough to cover the carrying amount of the tangible or intangible assets, or even become negative so that the company would need to present a provision for onerous contracts. Estimating these future cash flows requires management to project future sales and operating profits. At balance sheet date, an amount of CHF 33.3 (2019: 38.6) million has been provided mainly in relation to two operations in the region Europe, Middle East and Africa (EMEA) and one operation in Central & South America. 3 Financial Report
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DUFRY ANNUAL REPORT 2020
197CLOSE DOWNThe provision of CHF 2.4 (2019: 2.3) million relates mainly to two operations in Asia and Europe. LAWSUITS AND DUTIESThe provision for lawsuits and duties of CHF 20.5 (2019: 23.4) million covers uncer-tainties related to the outcome of law suits in relation to taxes-other than income, duties or other claims in connection with our subsidiaries in India. The major cases relate to two subsidiaries in India which still keep open claims (CHF 11.1 million) in relation with customs duties and service taxes. Dufry expects that both cases won’t be finally judged in the next year. During 2020, Dufry released the provision in Brazil. LABOR DISPUTESThe provision of CHF 3.2 (2019: 3.6) million relates mainly to claims presented by sales staff in Brazil based on disputes due to the termination of temporary labor contracts.OTHEROther provisions comprise mainly potential liabilities to cover the cost for resto-ration of leased shops to their original condition at the end of the lease agreement and restructuring costs. The charges for the year relate to restructuring costs in Argentina.CASH OUTFLOWS OF NON-CURRENT PROVISIONSThe cash outflows of non-current provisions as of December 31, 2020 are expected to occur in:IN MILLIONS OF CHFEXPECTED CASH OUTFLOW2022 23.4 2023 1.6 2024 0.9 2025 1.8 2026+ 14.8 Total non-current 42.5 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
19833. POST-EMPLOYMENT BENEFIT OBLIGATIONSDufry provides retirement benefits through a variety of arrangements comprised principally of stand-alone defined benefit or defined contribution plans, or state administered plans that cover a substantial portion of employees in accordance with local regulations and practices. The most significant plans in terms of the benefits accrued to date by participants are cash balance and final salary plans. Around 95.2% (2019: 99.5% ) of the total defined benefit obligation and 95.3% (2019: 99.5% ) of the plan assets correspond to pension funds in Switzerland (CH) and the United Kingdom (UK). 20202019IN MILLIONS OF CHFFundedUnfundedTOTALFundedUnfundedTOTALSWITZERLANDFair value of plan assets 205.8 – 205.8 207.5 – 207.5 Present value of defined benefit obligation 217.7 – 217.7 236.1 – 236.1 Financial (liability) asset (11.9)– (11.9) (28.6)– (28.6)UKFair value of plan assets 217.5 – 217.5 209.5 – 209.5 Present value of defined benefit obligation 223.1 – 223.1 206.5 – 206.5 Financial (liability) asset (5.6)– (5.6) 3.0 – 3.0 OTHER PLANSFair value of plan assets 20.8 – 20.8 2.1 0.2 2.3 Present value of defined benefit obligation 22.4 13.5 35.9 1.9 18.8 20.7 Financial (liability) asset (1.6) (13.5) (15.1) 0.2 (18.6) (18.4)CARRYING AMOUNTNet defined benefit assets––– 3.2 0.2 3.4 Employee benefit obligations (19.1) (13.5) (32.6) (28.6) (18.8) (47.4)A description of the significant retirement benefit plans is as follows:Reconciliation to the funded plans20202019IN MILLIONS OF CHFSwitzerlandUKSwitzerlandUK Net defined (obligation) / asset at January 1 (28.6) 3.0 (15.3) 4.6 Pension income / (expense) through statement of profit or loss 0.2 0.1 (7.4) 0.1 Remeasurements through other comprehensive income 11.3 (10.1) (12.0) (4.1)Transfer payment (0.3) (0.6)––Contributions paid by employer 5.5 2.0 6.1 2.1 Currency translation– 0.0 – 0.3 Net defined (obligation) / asset at December 31 (11.9) (5.6) (28.6) 3.0 3 Financial Report
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DUFRY ANNUAL REPORT 2020
19933.1 SWITZERLANDIn Switzerland Dufry’s pension plan is a cash balance plan where contributions are made by employees and employer based on a percentage of the pensionable salary. The pension plan guarantees the amount accrued on the members saving account, as well as interest on those savings amounts. At retirement date, the savings account are converted into pensions, or optionally part of the savings can be paid out as a lump sum. The board of trustees on a discretional basis, based on the annual performance and financial situation of the fund can grant increases in pension payment.LEGAL FRAMEWORKPension plans in Switzerland are governed by the Federal Law on Occupational Retirement, Survivors’ and Disability Pension Plans (BVG), which stipulates that pension plans are to be managed as independent, legally autonomous units, a pension fund. Pension plans are overseen by a regulator as well as by a state supervisory body. A pension plan’s most senior governing body (Board of Trustees) must be composed of equal numbers of employee and employer representatives. The various insurance benefits are governed in regulations, with the BVG law specifying the minimum benefits that are to be provided. In case of an underfunding, various measures can be taken such as: a) increasing future contributions, b) revising the investment strategy or c) revising the benefits granted above the legally minimal benefits. The BVG law prescribes how the employer and employees have to jointly fund potential restructurings. Under Swiss pension law the employer cannot recover any surplus from the pension foundation. MAIN RISKSThe main risks to which the pension fund is exposed are: a) mortality risk as if the effective average life result to be longer than the assumptions used based on the official demographic statistics, then pension payments would need to be done for longer periods, b) Market and liquidity risk as if the future rate of return on plan assets is lower to the actual discount rate used to calculate the conversion factor, then additional funds will be needed and c) Death and disability risk as if the amounts or number of effective cases are higher than the indications provided by the demographic statistics this can result in a mismatch of assetliabilities relation of the pension fund. These risks are regularly monitored by an actuary and the Board of Trustees. The financial situation of the pension fund is presented annually in two reports, in accordance with the requirements of the BVG and IFRS respectively.ASSETLIABILITY MANAGEMENT The Swiss pension fund currently invests in a diverse portfolio of asset classes including equities, bonds, property and alternative investments but do not currently use any more explicit assetliability matching strategy instruments such as annuity purchase products or longevity swaps. With the investment strategy the board of trustees defines the allocation of asset classes, currencies and other risks, which takes into account requirements from BVG, and the objective of achieving an investment return which together with the contributions paid, is sufficient to maintain reasonable control over the various funding risks of the plan. The board of trustees is responsible for the investment of the assets and reviews the investment portfolio from time to time at least once a year. The plan assets are deposited in a global custody bank account, whereby the investments in real estate funds are directly managed by a specialized 3rd party administration. 3 Financial Report
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20033.2 UNITED KINGDOM (UK)Dufry participates in another defined benefit pension plan in the UK under specific regulatory frameworks. The Plan has been closed to new members for many years and as well as to existing members. Under the Plan, members are entitled to annual pensions on retirement at age 65 of one sixtieth of revalued pensionable salary for each year of service. Pensionable salary is defined as basic salary less the statutory Lower Earnings limit. The Plan is administered by a separate board of trustees which is legally separate from the Company. The Trustees are comprised of representa-tives of employer, employees and independent trustees. The trustees are required by law to act in the interest of all relevant beneficiaries and are responsible for the investment policy with regards to assets plus the day to day administration of the scheme. The pension payments are made from the trustee-administered funds; however, where plans are underfunded, the company meets the benefit payment obligation as it falls due.Cost of defined benefit plans20202019IN MILLIONS OF CHFSwitzerlandUKSwitzerlandUK SERVICE COSTSCurrent service costs (7.6)– (7.1)–Past service costs 7.8 –––Fund administration–– (0.3)–Net interest – 0.1 (0.1) 0.1 Total pension expenses recognized in the statement of profit or loss 0.2 0.1 (7.5) 0.1 The current and past service costs are included in personnel expenses, whereas fund administration expenses are included in the other expenses. The past service costs in 2020 are a consequence of the reduction of staff. Refer to comments in Note 9.Remeasurements employee benefits20202019IN MILLIONS OF CHFSwitzerlandUKSwitzerlandUK Actuarial gains (losses) - experience 1.1 – (4.3) 4.0 Actuarial gains (losses) - demographic assumptions– (0.9) 1.6 (0.4)Actuarial gains (losses) - financial assumptions 3.9 (29.3) (24.4) (28.9)Return on plan assets exceeding expected interest 6.3 20.4 15.1 21.3 Total remeasurements recorded in other comprehensive income 11.3 (9.8) (12.0) (4.0) 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
201The following tables summarize the components of the funded status and amounts recognized in the statement of financial position for the plan:Change in the fair value of plan assets20202019IN MILLIONS OF CHFSwitzerlandUKSwitzerlandUK Balance at January 1 207.5 209.5 189.7 182.5 Interest income 1 0.5 4.1 1.7 5.5 Return on plan assets, above interest income 6.4 20.4 15.2 21.3 Contributions paid by employer 5.7 2.0 6.2 2.1 Contributions paid by employees 3.4 – 3.6 –Benefits paid (17.1) (5.8) (8.9) (6.6)Administration costs (0.3) (0.6)––Currency translation (0.3) (12.1)– 4.7 Balance at December 31 205.8 217.5 207.5 209.5 1 Expected interest income on plan assets based on discount rate. See actuarial assumptions.Change in present value of defined benefit obligation20202019IN MILLIONS OF CHFSwitzerlandUKSwitzerlandUK Balance at January 1 236.1 206.5 205.0 177.9 Current service costs 7.6 – 7.1 –Interest costs 0.6 4.0 1.8 5.4 Contributions paid by employees 3.4 – 3.6 –Accrual of expected future administration costs–– 0.3 –Actuarial losses / (gains) - experience (1.0) 0.1 4.4 (3.9)Actuarial losses / (gains) - demographic assumptions– 0.9 (1.6) 0.4 Actuarial losses / (gains) - financial assumptions (3.9) 29.3 24.4 28.9 Benefits paid (17.1) (5.8) (8.9) (6.6)Past service cost - plan amendments (7.8)–––Currency translation (0.2) (11.9)– 4.4 Balance at December 31 217.7 223.1 236.1 206.5 Net defined benefit (obligation) / asset at December 31 (11.9) (5.6) (28.6) 3.0 3 Financial Report
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DUFRY ANNUAL REPORT 2020
202Actuarial assumptionsThe present value of the defined benefit obligation is determined annually by independent actuaries using the projected unit credit method. The main actuarial assumptions used are:20202019IN PERCENTAGE (%)SwitzerlandUKSwitzerlandUK Discount rates 0.10 1.45 0.25 2.10 Future salary increases 1.25 – 1.50 –Future pension increases– 1.80 0.25 1.80 Average retirement age (in years) 64 65 64 65 Mortality table (generational tables)2015201920152018The mortality table takes into account changes in the life expectancy. Plan asset structure The structure of categories of plan assets is as follows:20202019IN PERCENTAGE (%)SwitzerlandUKSwitzerlandUKShares 33.4 99.1 37.433.4Bonds 20.2 –20.20.0Real estates 38.0 –38.0–Other 1 8.4 0.9 4.466.6Total100.0 100.0 100.0100.01 Includes liquid positions and alternative investments.All assets held by the Pension fund in Switzerland and UK are fair-value-level 1 (quoted prices in active markets), except certain real estate and alternative invest-ments in Switzerland which are fair-value-level 3 (significant unobservable inputs) representing 39.3% (2019: 27.7% ) of the total assets.The net outflow of funds due to pension payments can be planned reliably. Con-tributions are paid regularly to the funded pension plans in Switzerland and UK. Furthermore, the respective investment strategies take account of the need to guarantee the liquidity of the plan at all times. Dufry does not make use of any assets held by these pension plans. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
203Plan participants20202019IN THOUSAND OF CHFSwitzerlandUKSwitzerlandUKACTIVE PARTICIPANTSNumber at December 31 (participants) 554 – 751 –Average annual plan salary 86.0 – 84.0 –Average age (years) 43.4 – 42.0 –Average account balance 139.0 – 117.0 –DEFERRED PARTICIPANTSNumber at December 31 (participants)– 1,114 – 1,114 Average annual plan pension– 5.0 – 5.0 BENEFIT RECEIVING PARTICIPANTSNumber at December 31 (participants) 158 1,095 150 1,095 Average annual plan pension 24.0 3.4 25.0 4.3 20212020IN MILLIONS OF CHFSwitzerlandUKSwitzerlandUKEXPECTED CASH FLOW FORContribution Employer 4.1 2.0 5.6 2.2 Contribution Employees 2.5 – 3.2 –Weighted average duration of defined benefit obligation (years) 20.1 19.0 20.2 19.0 20202019IN MILLIONS OF CHFSwitzerlandUKSwitzerlandUKMATURITY PROFILE OF DEFINED BENEFIT OBLIGATIONExpected payments within 1 year 6.4 5.0 7.1 5.0 Expected payments in year 2 6.3 5.1 6.9 5.9 Expected payments in year 3 7.2 5.4 6.7 6.0 Expected payments in year 4 6.4 5.7 7.6 6.3 Expected payments in year 5 6.0 6.0 7.0 6.7 Expected payments in year 6 and beyond 29.1 31.2 32.1 32.2 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
204Sensitivities of significant actuarial assumptionsThe discount rate and the future salary increase were identified as significant actuarial assumptions.The following impacts on the defined benefit obligation are to be expected:SWITZERLANDUK2020 IN MILLIONS OF CHFIncreaseDecreaseIncreaseDecreaseA CHANGE OF 0.5% IN THE FOLLOWING ASSUMPTIONS WOULD IMPLYDiscount rate (17.0) 22.7 (21.9) 21.9 Salary rate 4.0 (3.6)––The sensitivity analysis is based on realistically possible changes as of the end of the reporting year. Each change in a significant actuarial assumption was analyzed separately as part of the test. Interdependencies were not taken into account.Expected costs2021IN MILLIONS OF CHFSwitzerlandUK*Current service cost 5.6 –Fund administration expenses 0.2 –Net interest expenses––Costs to be recognized in the statement of profit or loss 5.8 –* The UK defined benefit plan is closed.34. FAIR VALUE MEASUREMENTFAIR VALUE OF FINANCIAL INSTRUMENTS CARRIED AT AMORTIZED COSTExcept as detailed in the table Quantitative disclosures fair value measurement hierarchy for assets below, Dufry considers that the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values.The following tables provide the fair value measurement hierarchy of Dufry’s assets and liabilities, that are measured subsequent to initial recognition 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). 3 Financial Report
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DUFRY ANNUAL REPORT 2020
205Quantitative disclosures fair value measurement hierarchy for assetsFAIR VALUE MEASUREMENT AT DECEMBER 31, 2020 USINGDECEMBER 31, 2020 IN MILLIONS OF CHFTOTALQuoted prices in active markets (Level 1)Significant observable inputs (Level 2)Significant unobservable inputs (Level 3)CARRYING AMOUNTSASSETS MEASURED AT FAIR VALUEDerivative financial assetsForeign exchange forward contracts - OTHER–––––Foreign exchange swaps contracts - EUR 8.8 – 8.8 – 8.8 Foreign exchange swaps contracts - OTHER 0.8 – 0.8 – 0.8 Options - USD 1.9 – 1.9 – 1.9 Total (Note 37.3) 11.5 – 11.5 – 11.5 ASSETS FOR WHICH FAIR VALUES ARE DISCLOSEDLoans and receivablesCredit card receivables 9.4 – 9.4 – 9.6 FAIR VALUE MEASUREMENT AT DECEMBER 31, 2019 USINGDECEMBER 31, 2019 IN MILLIONS OF CHFTOTALQuoted prices in active markets (Level 1)Significant observable inputs (Level 2)Significant unobservable inputs (Level 3)CARRYING AMOUNTSASSETS MEASURED AT FAIR VALUEDerivative financial assetsForeign exchange forward contracts - USD 0.2 – 0.2 – 0.2 Foreign exchange swaps contracts - EUR 3.5 – 3.5 – 3.5 Foreign exchange swaps contracts - OTHER 0.1 – 0.1 – 0.1 Cross currency swaps contracts - GBP 1.2 – 1.2 – 1.2 Options - USD 3.4 – 3.4 – 3.4 Total (Note 37.3) 8.4 – 8.4 – 8.4 Financial assets valued at FVOCIASSETS FOR WHICH FAIR VALUES ARE DISCLOSEDLoans and receivablesCredit card receivables 11.7 – 11.7 – 12.0 There were no transfers between Level 1 and 2 during the period. 3 Financial Report
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DUFRY ANNUAL REPORT 2020
206Quantitative disclosures fair value measurement hierarchy for liabilities FAIR VALUE MEASUREMENT AT DECEMBER 31, 2020 USINGDECEMBER 31, 2020 IN MILLIONS OF CHFTOTALQuoted prices in active markets (Level 1)Significant observable inputs (Level 2)Significant unobservable inputs (Level 3)CARRYING AMOUNTSLIABILITIES MEASURED AT FAIR VALUEDerivative financial liabilitiesForeign exchange forward contracts - OTHER–––––Foreign exchange swaps contracts - EUR–––––Foreign exchange swaps contracts - OTHER–––––Put option Dufry Staer Holding Ltd 23.4 –– 23.4 23.4 Other options–––––Total (Note 37.3 and note 6.1) 23.4 –– 23.4 23.4 LIABILITIES FOR WHICH FAIR VALUES ARE DISCLOSEDAt amortized costSenior Notes CHF 350 610.7 610.7 –– 320.2 Senior Notes EUR 800 827.4 827.4 –– 860.1 Senior Notes EUR 750 757.8 757.8 –– 795.2 Total 2,195.9 2,195.9 –– 1,975.5 Floating rate borrowings USD 1,056.2 – 1,056.2 – 1,008.5 Floating rate borrowings CHF 561.7 – 561.7 – 522.7 Total 1,617.9 – 1,617.9 – 1,531.2 There were no transfers between Level 1 and 2 during the period. 3 Financial Report
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207FAIR VALUE MEASUREMENT AT DECEMBER 31, 2019 USINGDECEMBER 31, 2019 IN MILLIONS OF CHFTOTALQuoted prices in active markets (Level 1)Significant observable inputs (Level 2)Significant unobservable inputs (Level 3)CARRYING AMOUNTSLIABILITIES MEASURED AT FAIR VALUEDerivative financial liabilitiesForeign exchange forward contracts - USD–––––Foreign exchange forward contracts - OTHER 0.1 – 0.1 – 0.1 Foreign exchange swaps contracts - EUR 2.9 – 2.9 – 2.9 Cross currency swaps contracts - GBP 15.7 – 15.7 – 15.7 Put option Dufry Staer Holding Ltd 55.7 –– 55.7 55.7 Other options 3.7 – 3.7 – 3.7 Total (Note 37.3) 78.1 – 22.4 55.7 78.1 Financial liabilities valued at FVPL Interest rate swaps 2.0 – 2.0 – 2.0 Total (Note 38.1) 2.0 – 2.0 – 2.0 LIABILITIES FOR WHICH FAIR VALUES ARE DISCLOSEDAt amortized costSenior Notes EUR 800 892.6 892.6 ––864.1Senior Notes EUR 750 823.2 823.2 ––794.3Total 1,715.8 1,715.8 –– 1,658.4 Floating rate borrowings USD 716.8 – 716.8 –671.8Floating rate borrowings CHF 53.4 – 53.4 –50.0Floating rate borrowings GBP 1,068.1 – 1,068.1 –1,210.0Total 1,838.3 – 1,838.3 – 1,931.8 There were no transfers between Level 1 and 2 during the period. 3 Financial Report
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DUFRY ANNUAL REPORT 2020
20835. CAPITAL RISK MANAGEMENTCapital comprises equity attributable to the equity holders of the parent less hedging and revaluation reserves for unrealized gains or losses on net investments, plus other equity-linked or equity-like instruments attributable to the parent.The primary objective of Dufry’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.Dufry manages its financing structure and makes adjustments to it in light of its strategy and the long-term opportunities and costs of each financing source. To maintain or adjust the financing structure, Dufry may adjust dividend payments to shareholders, return capital to shareholders, issue new shares or issue equity-linked instruments or equity-like instruments.Furthermore, Dufry monitors the financing structure using a combination of ratios, including a gearing ratio, cash flow considerations and profitability ratios. As for the gearing ratio Dufry includes within net debt, interest bearing loans and borrow-ings, less cash and cash equivalents. 35.1 GEARING RATIOThe following ratio compares owner’s equity to borrowed funds:IN MILLIONS OF CHF31.12.202031.12.2019Cash and cash equivalents (360.3) (553.5)Borrowings, current 53.9 53.2 Borrowings, non-current 3,650.6 3,602.2 Borrowings, net 3,344.2 3,101.9 Equity attributable to equity holders of the parent 839.3 2,645.3 ADJUSTED FORAccumulated hedged gains / (losses) (91.0) (64.1)Effects from transactions with non-controlling interests 1 1,503.4 1,375.7 Total capital 2 2,251.7 3,956.9 Total net debt and capital 5,595.9 7,058.8 Gearing ratio 59.8% 43.9% 1 Represents the excess paid / (received) above fair value on shares acquired / (sold) from non-controlling interests as long as there is no change in control (IFRS 10.23).2 Includes all capital and reserves of Dufry that are managed as capital.Dufry did not hold collateral of any kind at the reporting dates. 3 Financial Report
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DUFRY ANNUAL REPORT 2020
20935.2 CATEGORIES OF FINANCIAL INSTRUMENTSAT DECEMBER 31, 2020FINANCIAL ASSETSIN MILLIONS OF CHFat amortized costat FVPLSUBTOTALNON-FINANCIAL ASSETS 1TOTALCash and cash equivalents 360.3 – 360.3 – 360.3 Trade and credit card receivables 17.1 – 17.1 – 17.1 Other accounts receivable 126.6 11.5 138.1 176.9 315.0 Other non-current assets 211.5 0.4 211.9 44.9 256.8 Total 715.5 11.9 727.4 FINANCIAL LIABILITIESIN MILLIONS OF CHFat amortized costat FVPLSUBTOTALNON-FINANCIAL LIABILITIES 1TOTALTrade payables 154.9 – 154.9 – 154.9 Borrowings, current 53.9 – 53.9 – 53.9 Lease obligations, current 1,397.5 – 1,397.5 – 1,397.5 Other liabilities 489.4 – 489.4 43.6 533.0 Borrowings, non-current 3,692.1 – 3,692.1 (41.5) 3,650.6 Lease obligations, non-current 4,022.9 – 4,022.9 – 4,022.9 Other non-current liabilities 43.5 – 43.5 – 43.5 Total 9,854.2 – 9,854.2 1 Non-financial assets or non-financial liabilities comprise prepaid expenses (Incl. deferred bank fees set off from borrowings) and deferred income, which will not generate a cash outflow or inflow as well as other tax positions.AT DECEMBER 31, 2019FINANCIAL ASSETSIN MILLIONS OF CHFLoans and receivablesat FVPLSUBTOTALNON-FINANCIAL ASSETSTOTALCash and cash equivalents 553.5 – 553.5 – 553.5 Trade and credit card receivables 44.2 – 44.2 – 44.2 Other accounts receivable 226.7 8.5 235.2 186.8 422.0 Other non-current assets 238.2 0.2 238.4 64.5 302.9 Total 1,062.6 8.7 1,071.3 FINANCIAL LIABILITIESIN MILLIONS OF CHFat amortized costat FVPLSUBTOTALNON-FINANCIAL LIABILITIESTOTALTrade payables 645.6 – 645.6 – 645.6 Borrowings, current 53.2 – 53.2 – 53.2 Lease obligations, current 1,085.7 – 1,085.7 – 1,085.7 Other liabilities 749.2 24.4 773.6 53.5 827.1 Borrowings, non-current 3,642.3 – 3,642.3 (40.1) 3,602.2 Lease obligations, non-current 3,319.0 – 3,319.0 – 3,319.0 Other non-current liabilities 88.3 – 88.3 – 88.3 Total 9,583.3 24.4 9,607.7 3 Financial Report
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21035.3 NET INCOME BY IFRS 9 VALUATION CATEGORYFinancial Assets at December 31, 2020IN MILLIONS OF CHFAT AMORTIZED COSTAT FVPLTOTALInterest income 22.5 – 22.5 Other finance income 0.8 12.2 13.0 From interest 23.3 12.2 35.5 Foreign exchange gain / (loss) 1 (225.0) (4.1) (229.1)Impairments / allowances 2 (23.8)– (23.8)Total – from subsequent valuation (248.8) (4.1) (252.8)Net (expense) / income (225.5) 8.1 (217.3)Financial Liabilities at December 31, 2020IN MILLIONS OF CHFAT AMORTIZED COSTAT FVPLTOTALInterest expenses and arrangement fees (325.8)– (325.8)Other finance expenses (10.2) (6.4) (16.6)From interest (336.0) (6.4) (342.4)Foreign exchange gain / (loss) 1 212.1 16.9 229.0 Total – from subsequent valuation 212.1 16.9 229.0 Net (expense) / income (123.9) 10.5 (113.4)1 This position includes the foreign exchange gain / (loss) recognized on third party and intercompany financial assets and liabilities through consolidated statement of profit or loss.2 This position includes net income / (expense) from released impairments, allowances or recoveries during the period less the increase of impairments or allowances. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
211Financial Assets at December 31, 2019IN MILLIONS OF CHFLOANS AND RECEIVABLESAT FVOCI (NON-RECYCLABLE)AT FVPLTOTALInterest income 28.4 – 0.1 28.5 Other finance income 2.1 – 40.2 42.3 From interest 30.5 – 40.3 70.8 Foreign exchange gain / (loss) 1 (59.6)– 32.5 (27.1)Impairments / allowances 2 (6.7)–– (6.7)Total – from subsequent valuation (66.3)– 32.5 (33.8)Net (expense) / income (35.8)– 72.8 37.0 Financial Liabilities at December 31, 2019IN MILLIONS OF CHFAT AMORTIZED COSTAT FVPLTOTALInterest expenses and arrangement fees (352.1)– (352.1)Other finance expenses (0.7) (18.2) (18.9)From interest (352.8) (18.2) (371.0)Foreign exchange gain (loss) 1 70.4 (53.8) 16.6 Total – from subsequent valuation 70.4 (53.8) 16.6 Net (expense) / income (282.4) (72.0) (354.4)1 This position includes the foreign exchange gain (loss) recognized on third party and intercompany financial assets and liabilities through consolidated statement of profit or loss.2 This position includes net income / expense from released impairments, allowances or recoveries during the period less the increase of impairments or allowances.36. FINANCIAL RISK MANAGEMENT OBJECTIVESAs a global retailer, Dufry has worldwide activities which are financed in different currencies and are consequently affected by fluctuations of foreign exchange and interest rates. Dufry’s treasury manages the financing of the operations through centralized credit facilities to ensure an adequate allocation of these resources and simultaneously minimize the potential currency and financial risk impacts.Dufry continuously monitors the market risk, such as risks related to foreign currency, interest rate, credit, liquidity and capital. Dufry 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 entering or trading financial instruments for speculative purposes. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
21237. MARKET RISKDufry’s financial assets and liabilities are mainly exposed to market risk in foreign currency exchange and interest rates. Dufry’s objective is to minimize the impact on statement of profit or loss 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, Dufry may use financial instruments to hedge the respective exposure.Dufry 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, Dufry utilized foreign currency forward contracts and options for hedging purposes.37.1 FOREIGN CURRENCY RISK MANAGEMENTDufry manages the cash flow surplus or deficits in foreign currency of the opera-tions 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 nego-tiated to match the terms of the forecasted transactions.37.2 FOREIGN CURRENCY SENSITIVITY ANALYSISAmong various methodologies to analyze and manage risk, Dufry utilizes a system based on sensitivity analysis. This tool enables Group treasury to identify the level of risk of each entity. Sensitivity analysis provides an approximate quantification of the exposure in the event that certain specified parameters were to be met under a specific set of assumptions. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
213Foreign Currency ExposureIN MILLIONS OF CHFUSDEURGBPBRLOTHERTOTALDECEMBER 31, 2020Monetary assets 1,824.1 216.1 400.1 92.3 1,257.5 3,790.1 Monetary liabilities 1,742.1 2,093.7 211.9 172.2 1,237.9 5,457.8 Net currency exposure before foreign currency contracts and hedging 82.0 (1,877.6) 188.2 (79.9) 19.6 (1,667.7)Foreign currency contracts (454.0) 704.0 (195.0) 92.0 60.9 207.9 Hedging 244.8 1,175.6 –– (94.8) 1,325.6 Net currency exposure (127.2) 2.0 (6.8) 12.1 (14.3) (134.2)DECEMBER 31, 2019Monetary assets 2,072.6 336.2 297.9 122.2 513.0 3,341.9 Monetary liabilities 2,067.7 1,050.7 1,425.3 289.8 451.7 5,285.2 Net currency exposure before hedging 4.9 (714.5) (1,127.4) (167.6) 61.3 (1,943.3)Foreign currency contracts (329.4) 696.9 1,111.0 219.1 (74.2) 1,623.4 Hedging 267.7 ––– (94.2) 173.5 Net currency exposure (56.8) (17.6) (16.4) 51.5 (107.1) (146.4)The sensitivity analysis includes all monetary assets and liabilities irrespective of whether the positions are third party or intercompany. Dufry has considered someintercompany long-term loans as equity like loans. Consequently, the related ex-change differences are presented in other comprehensive income and thereafter as translation reserve in equity. In addition, Dufry has entered into cross currency swaps to reduce the currency exposure.The foreign exchange rate sensitivity is calculated by aggregation of the net cur-rency exposure of Dufry entities at December 31 of the respective year. The values and risk disclosed here are the hedged and remaining net currency exposure assuming a 5 % appreciation of the CHF against all other currencies. A positive result indicates a profit, before tax in the statement of profit or loss or in the hedging and revaluation reserves when the CHF strengthens against the relevant currency.IN MILLIONS OF CHF31.12.202031.12.2019Effect on profit or loss based on USD 6.4 2.8 Other comprehensive income based on USD 12.2 13.4 Effect on profit or loss based on EUR (0.1) 0.9 Other comprehensive income based on EUR 58.8 –Effect on profit or loss based on GBP 0.3 0.8 Effect on profit or loss based on BRL (0.6) (2.6) 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
214Reconciliation to categories of financial instruments:IN MILLIONS OF CHF31.12.202031.12.2019FINANCIAL ASSETSTotal financial assets held in foreign currencies (see above) 3,790.1 3,341.9 Less intercompany financial assets in foreign currencies (3,331.4) (2,847.4)Third party financial assets held in foreign currencies 458.7 494.5 Third party financial assets held in reporting currencies 268.7 576.8 Total third party financial assets 1 727.4 1,071.3 FINANCIAL LIABILITIESTotal financial liabilities held in foreign currencies (see above) 5,457.8 5,285.2 Less intercompany financial liabilities in foreign currencies (3,160.5) (1,607.0)Third party financial liabilities held in foreign currencies 2,297.3 3,678.2 Third party financial liabilities held in reporting currencies 7,556.9 5,929.5 Total third party financial liabilities 1 9,854.2 9,607.7 1 See note 35.2 Categories of financial instruments.37.3 FOREIGN EXCHANGE FORWARD CONTRACTS AND FOREIGN EXCHANGE OPTIONS AT FAIR VALUEAs the management of the company actively pursues to naturally hedge the positions in each operation, the policy of Dufry is to enter into foreign exchange forwards and options contracts only where needed.The following table shows the contracts or underlying principal amounts and fair values of derivative financial instruments, including foreign exchange forwards and foreign exchange swaps as well as cross currency swaps. 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 of each year. IN MILLIONS OF CHFCONTRACT OR UNDER-LYING PRINCIPAL AMOUNTPOSITIVE FAIR VALUENEGATIVE FAIR VALUEDecember 31, 20201,424.4 11.5 –December 31, 2019 2,893.9 8.4 22.4 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
21538. INTEREST RATE RISK MANAGEMENTDufry 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.38.1 INTEREST RATE SWAP CONTRACTSThe 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. The fair values are determined by reference to market prices or standard pricing models that used observable market inputs. IN MILLIONS OF CHFCONTRACT OR UNDER-LYING PRINCIPAL AMOUNTPOSITIVE FAIR VALUENEGATIVE FAIR VALUEDecember 31, 2020–––December 31, 2019 677.5 – 2.0 38.2 INTEREST RATE SENSITIVITY ANALYSISThe sensitivity analysis below has 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, Dufry’s net earnings for the year 2020 would increase by CHF 40.0 (2019: decrease by CHF 39.0) million. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
21638.3 ALLOCATION OF FINANCIAL ASSETS AND LIABILITIES TO INTEREST CLASSESIN %IN MILLIONS OF CHFAT DECEMBER 31, 2020Average variable interest rateAverage fixed interest rateVariable interest rateFixed interest rateTotal interest bearingNon-interest bearing TOTAL Cash and cash equivalents0.7% 2.7% 14.0 23.4 37.4 322.9 360.3 Trade and credit card receivables––– 17.1 17.1 Other accounts receivable1.1% 0.3 – 0.3 137.8 138.1 Other non-current assets2.5% 3.8% 5.6 2.0 7.6 204.3 211.9 Financial assets 19.9 25.4 45.3 682.1 727.4 Trade payables––– 154.9 154.9 Borrowings, current5.0% 4.2% 49.0 4.9 53.9 – 53.9 Other liabilities––– 489.4 489.4 Borrowings, non-current2.7% 2.1% 1,686.4 2,005.7 3,692.1 – 3,692.1 Lease obligations1.6% 3.6% 0.5 5,419.9 5,420.4 – 5,420.4 Other non-current liabilities––– 43.5 43.5 Financial liabilities 1,735.9 7,430.5 9,166.4 687.8 9,854.2 Net financial liabilities 1,716.0 7,405.1 9,121.1 5.7 9,126.8 IN %IN MILLIONS OF CHFAT DECEMBER 31, 2019Average variable interest rateAverage fixed interest rateVariable interest rateFixed interest rateTotal interest bearingNon-interest bearing TOTAL Cash and cash equivalents0.5% 1.5% 71.6 39.5 111.1 442.4 553.5 Trade and credit card receivables––– 44.2 44.2 Other accounts receivable1.1% 6.3% 0.4 0.2 0.6 234.6 235.2 Other non-current assets6.1% 2.0% 27.9 2.6 30.5 207.9 238.4 Financial assets 99.9 42.3 142.2 929.1 1,071.3 Trade payables––– 645.5 645.5 Borrowings, current2.6% 4.3% 48.3 4.3 52.6 0.6 53.2 Other liabilities––– 773.6 773.6 Borrowings, non-current2.9% 2.3% 1,948.1 1,694.2 3,642.3 – 3,642.3 Lease obligations1.6% 4.2% 2.6 4,402.2 4,404.8 – 4,404.8 Other non-current liabilities––– 88.3 88.3 Financial liabilities 1,999.0 6,100.7 8,099.7 1,508.0 9,607.7 Net financial liabilities 1,899.1 6,058.4 7,957.5 578.9 8,536.4 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
21739. CREDIT RISK MANAGEMENTCredit risk refers to the risk that counterparty may default on its contractual obligations resulting in financial loss to Dufry. Almost all Dufry sales are retail sales made against cash or internationally recog-nized 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 taxes, refunds from suppliers and guarantee deposits.The credit risk on cash deposits or derivative financial instruments relates to banks or financial institutions. Dufry monitors the credit ranking of these institutions and does not expect defaults from non-performance of these counterparties.The main banks where the Group keeps net assets positions hold a credit rating of A – or higher.39.1 MAXIMUM CREDIT RISKThe carrying amount of financial assets recorded in the financial statements, after deduction of any allowances for losses, represents Dufry’s maximum exposure to credit risk. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
21840. LIQUIDITY RISK MANAGEMENTDufry 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 unused credit facilities with financial institutions (see note 2.2 and 27).40.1 REMAINING MATURITIES FOR NON-DERIVATIVE FINANCIAL ASSETS AND LIABILITIESThe following tables have been drawn up based on the undiscounted cash flows of financial assets and liabilities (based on the earliest date on which Dufry can receive or be required to pay). The tables include principal and interest cash flows.AT DECEMBER 31, 2020 IN MILLIONS OF CHF1–6 MONTHS6–12 MONTHS1–2 YEARSMORE THAN 2 YEARS TOTAL Cash and cash equivalents 368.4 3.6 –– 372.0 Trade and credit card receivables 17.1 ––– 17.1 Other accounts receivable 124.4 2.3 –– 126.7 Other non-current assets 0.8 2.2 29.6 200.5 233.1 Total cash inflows 510.7 8.1 29.6 200.5 748.9 Trade payables 154.9 ––– 154.9 Borrowings, current 39.6 31.5 –– 71.1 Other liabilities 489.4 ––– 489.4 Borrowings, non-current 24.1 30.0 144.6 3,752.7 3,951.4 Lease obligations 816.6 580.9 1,169.9 3,435.0 6,002.4 Other non-current liabilities–– 43.5 – 43.5 Total cash outflows 1,524.6 642.4 1,358.0 7,187.7 10,712.7 AT DECEMBER 31, 2019 IN MILLIONS OF CHF1–6 MONTHS6–12 MONTHS1–2 YEARSMORE THAN 2 YEARS TOTAL Cash and cash equivalents 570.1 19.6 –– 589.7 Trade and credit card receivables 44.1 0.1 –– 44.2 Other accounts receivable 214.2 12.5 –– 226.7 Other non-current assets 2.6 3.1 16.5 241.5 263.7 Total cash inflows 831.0 35.3 16.5 241.5 1,124.3 Trade payables 644.9 0.7 –– 645.6 Borrowings, current 48.0 39.0 –– 87.0 Other liabilities 748.0 1.2 –– 749.2 Borrowings, non-current 37.1 39.3 144.6 3,762.8 3,983.8 Lease obligations 517.4 568.3 796.3 3,146.1 5,028.1 Other non-current liabilities–– 88.3 – 88.3 Total cash outflows 1,995.4 648.5 1,029.2 6,908.9 10,582.0 40.2 REMAINING MATURITIES FOR DERIVATIVE FINANCIAL INSTRUMENTSDufry holds derivative financial instruments at year-end of net CHF 11.5 millions of which CHF 10.0 million has a maturity below 6 months and CHF 1.5 million more than one year. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
21941. RELATED PARTIES AND RELATED PARTY TRANSACTIONSA party is related to Dufry if the party directly or indirectly controls, is controlled by, or is under common control with Dufry, has an interest in Dufry that gives it significant influence over Dufry, has joint control over Dufry or is an associate or a joint venture of Dufry. 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 Dufry.The related party transactions and relationships for Dufry are the following:IN MILLIONS OF CHF20202019PURCHASE OF GOODS FROMHudson RPM, literature and publications 1.4 16.5 PURCHASE OF SERVICES FROMPension Fund Dufry, post-employment benefits 5.6 6.1 ACCOUNTS PAYABLES/(RECEIVABLES) AT DECEMBER 31Hudson RPM (1.7) 0.1 Pension Fund Dufry 0.3 0.8 The transactions with associates are the following:IN MILLIONS OF CHF20202019PURCHASE OF SERVICES FROMLojas Francas de Portugal S.A. (3.4) (2.7)Nuance Basel LLC (Sochi) (0.2)–Nuance Group (Chicago) LLC– (0.2)SALES OF SERVICES TOLojas Francas de Portugal S.A. 1.5 1.5 Nuance Basel LLC (Sochi) 0.2 0.4 Nuance Group (Chicago) LLC 0.1 0.7 SALES OF GOODS TOLojas Francas de Portugal S.A. 8.1 41.9 Nuance Basel LLC (Sochi) 1.6 3.6 Puerto Libre Int. SA 0.4 –Nuance Group (Chicago) LLC– 1.7 ACCOUNTS RECEIVABLES AT DECEMBER 31Lojas Francas de Portugal S.A. 1.4 1.6 Nuance Basel LLC (Sochi) 9.0 10.9 Nuance Group (Chicago) LLC 0.6 1.2 NCM Brookstone Stores Georiga, LLC 0.5 0.4 ACCOUNTS PAYABLES AT DECEMBER 31Lojas Francas de Portugal S.A.– 0.1 Nuance Group (Chicago) LLC– 0.2 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
220The compensation to members of the Board of Directors and the Global Executive Committee for the services provided during the respective years includes all forms of consideration paid, payable or provided by Dufry, including compensation in company shares as follows: IN MILLIONS OF CHF20202019BOARD OF DIRECTORSNumber of directors109Current employee benefits 6.8 6.2 Post-employment benefits 0.2 0.3 Total compensation 7.0 6.5 GLOBAL EXECUTIVE COMMITTEENumber of members810Current employee benefits 26.0 16.9 Post-employment benefits 1.8 1.8 Share-based payments (income) / expense 1 (1.1) 5.1 Total compensation 26.7 23.8 1 Expenses accrued during the year for members of the Global Executive Committee.For further information regarding participations and compensation to members of the Board of Directors or Global Executive Committee, please refer to the re-muneration report at the end of the annual report.42. EVENTS AFTER REPORTING DATE42.1 CHANGES IN LEASE CONTRACTS IN 2021In February 2021, Dufry renegotiated two existing lease contracts, removing fixed payments (fixed MAG), which will result in a de-recognition of CHF 114.9 million current and CHF 587.9 million non-current lease obligations, repectively CHF 636.4 million in right-of-use assets. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
221To the General Meeting of Dufry AG, BaselBasel, March 8, 2021Statutory auditor’s report on the audit of the consolidated financial statementsOpinionWe have audited the consolidated financial statements of Dufry AG and its subsidiaries (the “Group”), which comprise the consolidated statement of financial position as at December 31, 2020 and the consolidated statement of profit or loss, and the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.In our opinion, the consolidated financial statements (pages 126 to 220) give a true and fair view of the consolidated financial position of the Group as at December 31, 2020, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) and comply with Swiss law.Basis for opinionWe conducted our audit in accordance with Swiss law, International Standards on Auditing (ISAs) and Swiss Auditing Standards. Our responsibilities under those provisions and standards are further described in the Auditor’s Responsi-bilities for the Audit of the Consolidated Financial Statements section of our report.We are independent of the Group in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, as well as the International Code of Ethics for Professional Accountants (including International Independence Standards) of the International Ethics Standards Board for Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.Material uncertainty related to going concernWe draw attention to note 2.2 of the consolidated financial statements, which indicates that the Group’s financial position, results of operations and cash flows have been significantly adversely impacted by the COVID-19 pandemic. This fact together with other matters disclosed in note 2.2 indicates that a material uncertainty exists that may cast significant doubt about the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.Key audit mattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. In addition to the matter described in the “Material uncertainty related to going concern” section, we have determined the matters described below to be the key audit matters to be communicated in our report. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the consolidated financial statements. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
222Valuation of goodwillArea of FocusAs of December 31, 2020, the Group has recorded goodwill of CHF 2,369 million. The carrying value of goodwill is tested annually for impairment or when indicators of impairment are present. The impairment assessment for goodwill is dependent on the estimation of future cash flows and the weighted average cost of capital applied.Due to the significance of the carrying values of goodwill and the judgment involved in performing the impairment tests, this matter was considered significant to our audit.The accounting policies regarding goodwill applied by the Group are explained in the notes to the consolidated financial statements in sections 2.4a and 2.4q. Further details on goodwill and the annual impairment test are disclosed in notes 3, 10, 18 and 18.1 to the consolidated financial statements.Our audit responseWe performed audit procedures to assess the appropriateness of the Group’s impairment test valuation model and evaluated the Group’s key assumptions, with the support of our valuation specialists. We performed analyses over the projected sales growth rates used in the cash flow projections during the forecast period and the terminal growth rate assumptions. In addition, we performed lookback analyses assessing historical expense and profit ratios against the Group’s assumptions. Further, we independently determined the appropriate weighted average costs of capital and compared them against the rates used by the Group. Our work included an evaluation of the Group’s sensitivity analysis on changes to the key assumptions, to quantify the downside changes that could result in an impairment and the respective disclosures in the consolidated financial statements.Our audit procedures did not lead to any reservations concerning the valuation of goodwill.Valuation of concession right intangibles and right-of-use assetsArea of FocusAs of December 31, 2020, the Group has recorded concession right intangibles and right-of-use assets with definite useful lives of CHF 1,855 million and CHF 4,439 million, respectively. Concession right intangibles and right-of-use assets are measured at historical cost less amortization/depreciation and impairment. The Group assesses at each reporting date whether there are indicators of impairment. Whenever such indicators are identified, the carrying value of the respective cash generating unit, to which the respective concession right intangibles and right-of-use assets belong to, are tested for impairment. Due to the significance of the carrying values of concession right intangibles and right-of-use assets and the judgment involved in performing impairment tests or in assessing future economic benefits, this matter was considered significant to our audit.The accounting policies regarding concession right intangibles and right-of-use assets applied by the Group are explained in the notes to the consolidated financial statements in sections 2.4o and 2.4m. Further details on concession right intangibles, right-of-use assets and the impairment test are disclosed in notes 3, 17 and 18 to the consolidated financial statements. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
223Our audit responseWe assessed the Group’s process for identifying indicators of potential impairment. For those cash generating units for which there were impairment indicators identified, we performed audit procedures to assess the appropriateness of the Group’s impairment test valuation model and evaluated the Group’s key assumptions, with the support of our valuation specialists. We performed analyses over the projected sales growth rates used in the cash flow projections during the forecast period. In addition, we performed lookback analyses assessing historical expense and profit ratios against the Group’s assumptions and corroborated fixed lease payments against contractual agreements on a sample basis. Further, we independently determined the appropriate weighted average costs of capital and compared them against the rates used by the Group.Our audit procedures did not lead to any reservations concerning the valuation of concession right intangibles and right-of-use assets.Accounting for lease contractsArea of FocusAs of December 31, 2020, the Group has right-of-use assets of CHF 4,439 million and lease obligations of CHF 5,420 mil-lion (current and non-current). These represent 39% and 52% of the Group’s total assets and total liabilities, respectively. Key assumptions regarding lease accounting are disclosed in the notes (note 8, 17, 28, and 29). Due to the risk of incom-pleteness of lease contracts recognized, inaccurate consideration and inappropriate accounting assessment of contractual information, and risk of misapplication of the COVID-19 related rent concession practical expedient, this matter was considered significant to our audit.Our audit responseWe obtained an understanding of the Group’s accounting policies and processes implemented including the process to identify changes to contractual information of lease contracts, to assess the right-of-use assets and lease obligations. We tested a sample of additions or changes to lease contracts and analyzed whether these represented lease modifications or should be accounted for as separate leases. We evaluated the Group’s analysis of the application of the COVID-19 related rent concession practical expedient by selecting a sample of the underlying contract amendments and analyzing the Group’s assessment. Our audit procedures did not lead to any reservations concerning the accounting for lease contracts.Other information in the annual reportThe Board of Directors is responsible for the other information in the annual report. The other information comprises all information included in the annual report, but does not include the consolidated financial statements, the statutory financial statements and the remuneration report and our auditor’s reports thereon.Our opinion on the consolidated financial statements does not cover the other information in the annual report and we do not express any form of assurance conclusion thereon.In connection with our audit of the consolidated financial statements, our responsibility is to read the other information in the annual report and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 3 Financial Report
Consolidated Financial Statements
DUFRY ANNUAL REPORT 2020
224Responsibility of the Board of Directors for the consolidated financial statementsThe Board of Directors is responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with IFRS and the provisions of Swiss law, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.Auditor’s responsibilities for the audit of the consolidated financial statementsOur objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law, ISAs and Swiss Auditing Standards will always detect a material misstatement when it exists. Misstate-ments can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.A further description of our responsibilities for the audit of the consolidated financial statements is located at the website of EXPERTsuisse: http://www.expertsuisse.ch/en/audit-report-for-public-companies. This description forms part of our auditor’s report.Report on other legal and regulatory requirementsIn accordance with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the Board of Directors.We recommend that the consolidated financial statements submitted to you be approved.Ernst & Young Ltd/s/ Jolanda Dolente /s/ Siro BonettiLicensed audit expert Licensed audit expert(Auditor in charge) 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
225STATEMENT OFPROFIT OR LOSSFOR THE YEAR ENDED DECEMBER 31, 2020 IN THOUSANDS OF CHFNOTE20202019Financial income 2,938 15 Franchise fee income– 3,091 Other income 20 –Total income 2,958 3,106 Personnel expenses8 11,092 (17,536)General and administrative expenses (3,875) (4,973)Management fee expenses (12,570) (5,437)Impairment of investments in subsidiaries7 (844,725) (390,000)Financial expenses (8,634) (9,035)Expenses related with capital increase (8,019)–Taxes (981) (2,195)Total expenses (867,713) (429,176)(Loss) / profit for the year (864,755) (426,070) 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
226STATEMENT OF FINANCIAL POSITIONAT DECEMBER 31, 2020IN THOUSANDS OF CHF NOTE31.12.202031.12.2019ASSETSCash and cash equivalents 10,625 17 Current receivables third parties 88 12,954 Current receivables subsidiaries 1,387 415 Current receivables other group companies 1,341 371 Loan to subsidiaries 475,000 –Prepaid expenses and accrued income 54 13 Current assets 488,495 13,770 Investments in subsidiaries3 3,003,690 3,848,415 Non-current assets 3,003,690 3,848,415 Total assets 3,492,185 3,862,185 LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent interest bearing liabilities 2,537 17,831 Current liabilities third parties 7,891 3,373 Current liabilities participants and bodies 1,036 1,034 Current liabilities subsidiaries 8,717 4,424 Current liabilities other group companies– 36 Deferred income and accrued expenses 6,228 27,791 Current liabilities 26,409 54,489 Non-current interest-bearing liabilities subsidiaries– 408,050 Non-current liabilities– 408,050 Total liabilities 26,409 462,539 Share capital5.1 401,318 252,836 Legal capital reservesReserve from capital contribution5.1 4,287,731 3,420,326 Reserve from capital contribution for own shares held at subsidiaries5.1 1,698 86,700 Legal retained earningsOther legal reserves 5,927 5,927 Voluntary retained earningsResults carried forward12 (366,143) 59,927 (Loss) / profit for the year12 (864,755) (426,070)Treasury shares6––Shareholders’ equity 3,465,776 3,399,646 Total liabilities and shareholders' equity 3,492,185 3,862,185 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
227NOTES TO THE FINANCIAL STATEMENTS 1. CORPORATE INFORMATIONDufry AG (the “Company”) is a publicly listed company. The shares of the Company are listed on the Swiss Stock Exchange (SIX) in Zurich.Dufry AG was incorporated in 1865 and is registered with the commercial register in the canton of Basel Stadt, Switzerland. The Company has registered offices in Basel, Brunngässlein 12.2. ACCOUNTING POLICIES2.1 BASIS OF PREPARATIONWe have prepared the statutory financial statements in accordance with the accounting principles as set out in Art. 957 to Art. 963b of the Swiss Code of Obligations (“CO”). Since we have prepared our consolidated financial statements in accordance with the International Financial Reporting Standards (“IFRS”), a recognized accounting standard, we have, in accordance with the CO, elected to forego presenting the statement of cash flows, the additional disclosures and the management report otherwise required by the CO. Our financial statements may be influenced by the creation and release of excess reserves.All amounts are presented in Swiss francs (“CHF”), unless otherwise indicated.Where not prescribed by law, the significant accounting and valuation principles applied are described below.2.2 THE ENTITY’S ABILITY TO CONTINUE AS A GOING CONCERN – COVID-19On March 11, 2020, the World Health Organization declared COVID-19 a pandemic.Governmental organizations have taken various actions to combat the spread of COVID-19, including imposing stay-at-home orders and closing “non-essential” businesses and their operations for certain periods of time. 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
228The company mainly invests in travel retail businesses, which are significantly adversely impacted by COVID-19-related concerns, event cancellations, and business and government-imposed restrictions. These concerns and restrictions have led to a significant decrease in passenger travel and resulted in sharply reduced customer traffic and sales across the businesses we are invested in. Consequently, the Dufry Group’s (“Group”) revenues declined during 2020 compared with the same period in 2019 by approximately 71%.In response to the COVID-19 pandemic, the Group most recently has taken the following measures: –the Group is renegotiating almost all of its concession agreements to better align payment commitments to the current business environment and in particular to reduce fixed payments; –as of September 2020, the Group has implemented a re-organization and restructuring program to adapt its organization to the new business environment and to accelerate growth and support profitability during the recovery phase of the economic and public health crisis resulting from COVID-19; –in October 2020 and in connection with the Group’s plan to acquire the remaining equity interest in Hudson Ltd. for USD 311 million and to delist Hudson Ltd. from the New York Stock Exchange, Dufry AG has conducted an equity increase through the issuance of 24,696,516 fully paid-in registered shares in the amount of CHF 820.3 million; –on November 18, 2020, Dufry placed CHF 69.5 million in bonds due in 2023, mandatory convertible into shares of the Company; –in December 2020, Dufry successfully closed the merger with its subsidiary Hudson Ltd (“Hudson”) which will further improve the cost structure of the company going forward; –the Group did not pay a dividend for the 2019 financial year and we currently do not plan to propose to pay a dividend for the 2020 financial year.In addition, in May 2020, the company and some of its subsidiaries have entered into an amendment of certain borrowing instruments which, among other things, waived compliance with certain financial covenants until June 30, 2021 and which prevented a covenant breach that would have otherwise occurred as a result of the deterioration in adjusted operating cash flows due to COVID-19. Currently, financial covenants included in our borrowing instruments require the Group to comply with(i) a maximum ratio of total drawn debt to adjusted operating cash flow of 5.0:1.0 for the test periods ending September 30, 2021 and December 31, 2021 (and a maximum ratio of 4.5:1.0 for the test periods ending March 31, 2022 and thereafter),(ii) a minimum ratio of adjusted operating cash flow to total interest expense of 3.0:1.0 for the test periods ending September 31, 2021 and thereafter, and (iii) a minimum liquidity available of CHF 300 million on a monthly basis until and including June 30, 2021. 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
229We cannot predict extent or duration of the on-going COVID-19 pandemic and itsimpact on the Group and consequently the Company and its financial position, results of operations and cash flows. This includes that the Group, as a result of the deterioration in adjusted operating cash flows, may breach financial covenants included in the Group’s borrowing instruments after the covenant waiver period and our borrowings might become due on demand. There can be no assurance that we would be able to successfully negotiate further covenant waivers with our lenders in such an event. It may also be necessary to raise additional capital from investors or financing from lenders.As a result of these matters caused by the COVID-19 pandemic, there is a material uncertainty that may cast significant doubt upon the Group’s and therefore the Company’s ability to continue as a going concern and therefore, whether the Company will be able to realize its assets and settle its liabilities in the ordinary course of business at the amounts recorded in the financial statements.We are closely monitoring developments related to the ongoing pandemic and have taken and continue to take steps intended to mitigate the potential risks to us. Although it is not certain that these efforts will be successful, management believes that the actions that it has taken to date are sufficient to currently mitigate the material uncertainty and has therefore prepared the financial statements on a going concern basis.2.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESInvestments in subsidiariesInvestments are held at historical cost. The Company reviews the carrying amount of these investments annually, and if events and circumstances suggest that this amount may not be recoverable, an impairment is recognized in the statement of profit or loss.Treasury sharesTreasury shares are recognized at acquisition cost and deducted from shareholders’ equity. Gains or losses arising out of transactions with treasury shares are recorded in the statement of profit or loss.Share-based paymentsThe Company accrues personnel expenses related to share-based payment plans for the respective period in deferred income and accrued liabilities. Any difference between the acquisition costs of treasury shares and the accrual created for the plan will be recognized in the statement of profit or loss, when the shares are assigned to the member of the share-based payment plans. Current and non-current interest-bearing liabilitiesInterest-bearing liabilities are recognized at their nominal value in the statement of financial position.Exchange rate differencesAll assets and liabilities denominated in foreign currencies are translated into CHF using year-end exchange rates, except investments in subsidiaries, which are rec-ognized at historical values. Net unrealized exchange losses are recognized in the statement of profit or loss and net unrealized gains are deferred within accrued expenses. Realized exchange gains or losses arising from business transactions denominated in foreign currencies are recognized in the statement of profit or loss. 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
2303. DIRECT SUBSIDIARIESSHARE IN CAPITAL AND VOTING RIGHTSSHARE CAPITALCURRENCYIN THOUSANDS31.12.202031.12.201931.12.202031.12.2019Dufry International AG, Switzerland100% 100% 1,000 1,000 CHF Dufry Corporate AG, Switzerland100% 100% 100 100 CHF Dufry Holdings & Investments AG, Switzerland100% 100% 1,000 1,000 CHF 4. SIGNIFICANT SHAREHOLDERS’ PARTICIPATION IN PERCENTAGE (%) OF OUTSTANDING REGISTERED SHARES31.12.202031.12.2019Group of shareholders consisting of legal entities AI Louvre (Luxembourg) S.à.r.l. and Taobao China Holding Limited, such group representing the interests of Advent International Corporation and Alibaba Group Holding Limited 17.55% –State of Qatar6.91% 6.92% Compagnie Financiere Rupert5.00% 5.00% Norges Bank (the Central Bank of Norway)4.89% 2.78% Group of shareholders consisting of various companies and legal entities representing the interests of: Andrés Holzer Neumann, Julián Díaz González, Juan Carlos Torres Carretero, James S. Cohen, James S. Cohen Family Dynasty Trust4.25% 15.53% Government of Singapore3.92% 5.05% FMR LLC3.19% –Fidelity Investment Trust3.02% –Franklin Resources, Inc.2.03% 4.95% Black Rock, Inc.1.74% 4.34% 5. SHARE CAPITAL5.1 ORDINARY SHARESIN THOUSANDS OF CHFNUMBER OF SHARESSHARE CAPITALRESERVE FROM CAPITAL CONTRIBUTIONBalance at January 1, 2019 53,871,707 269,359 3,983,404 Redeemed shares (3,304,541) (16,523) (385,330)Distribution to shareholders–– (199,748)Reclass from reserve from capital contribution for own shares held at subsidiaries–– 22,000 Balance at December 31, 2019 50,567,166 252,836 3,420,326 Share capital increases 29,696,516 148,483 782,403 Reclass from reserve from capital contribution for own shares held at subsidiaries–– 85,002 Balance at December 31, 2020 80,263,682 401,318 4,287,731 On April 20, 2020, Dufry has issued and placed 5,000,000 new shares out of the authorized capital at CHF 27.50 per share and the gross proceeds from the placement are CHF 137.5 million. 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
231On October 6, 2020, the Extraordinary General Meeting of Dufry approved the issuance and offering of an ordinary share capital increase of up to 24,696,516 shares with a nominal value of CHF 5 each.On October 20, 2020, the offering period closed and finally 24,696,516 new shares have been placed resulting in an increase of the share capital of CHF 123.5 million and a gross proceeds of CHF 820.4 million.5.2 CONDITIONAL SHARE CAPITAL IN SHARESCHFBalance at January 1, 2019 888,432 4,442,160 Balance at December 31, 2019 888,432 4,442,160 Increase of conditional share capital 11,811,568 59,057,840 Balance at December 31, 2020 12,700,000 63,500,000 5.3 AUTHORIZED SHARE CAPITAL IN SHARESNOMINAL VALUE IN CHFBalance at January 1, 2019––Balance at December 31, 2019 5,000,000 25,000,000 Share capital increase (5,000,000) (25,000,000)Balance at December 31, 2020––6. TREASURY SHARES IN THOUSANDS OFSHARESCHFBalance at January 1, 2019 3,379.1 412,116 Assigned to holders of PSU & RSU Awards (234.5) (26,480)Share capital reduction (3,304.5) (401,853)Share purchases 159.9 16,217 Balance at December 31, 2019––Share purchases 618.8 16,892 Assigned to holders of PSU Awards (118.8) (3,142)Disposal of shares (500.0) (13,750)Balance at December 31, 2020––7. IMPAIRMENTS OF INVESTMENTS IN SUBSIDIARIESDufry AG has reviewed the valuation of its investments in Dufry International AG and Dufry Holdings & Investments AG, since its subsidiaries have been adversely affected by the COVID-19 pandemic. Based on the assessment performed, the Company recognized an impairment of CHF 844.7 million. 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
2328. PERSONNEL EXPENSESThe Company recorded a reversal of a provision for share-based payment as the underlying performance conditions are not likely to be met. No new share-based payment plan was granted during the period. Dufry AG employed less than 10 employees in 2020 and 2019.9. GUARANTEE COMMITMENT REGARDING SWISS VALUE ADDED TAX (VAT)The Company belongs to the Swiss value added tax (VAT) group of Dufry Inter-national AG, and thus carries joint liability to the Swiss federal tax administration for VAT. Members of the VAT group as of December 31, 2020, are:DUFRY International AGDUFRY Corporate AGDUFRY Samnaun AGDUFRY Holdings & Investments AGDUFRY Participations AGDUFRY AGDUFRY Russia Holding AGDUFRY Altay AGDUFRY Trading AGThe Nuance Group AGDUFRY Basel Mulhouse AG10. CONTINGENT LIABILITIESThe Company jointly and severally with Dufry International AG and Dufry Financial Services B. V. guaranteed the following credit facilities:GUARANTEED AMOUNT IN CHFIN MILLIONS OFMATURITYCOUPON RATECURRENCYNOMINAL AMOUNT IN LOCAL CURRENCY31.12.202031.12.2019MAIN BANK CREDIT FACILITIESCommitted 5-years term loan03.11.2022 USD 700.0 619.6 677.5 Committed 5-years term loan (multi-currency)03.11.2022 EUR 500.0 527.6 564.2 5+1+1 - years revolving credit facility (multi-currency)03.11.2024 EUR 1,300.0 421.0 706.4 12+6+6-months term loan29.05.2021 EUR 367.0 ––Subtotal 1,568.2 1,948.1 SENIOR NOTESSenior notes15.10.20242.50% EUR 800.0 865.1 868.2 Senior notes15.02.20272.00% EUR 750.0 811.1 814.0 Convertible notes04.05.20231.00% CHF 350.0 350.0 –Mandatory Convertible Note18.11.20234.10% CHF 69.5 69.5 –Subtotal 2,095.7 1,682.2 GUARANTEE FACILITYUncommitted guarantee facilityn.a. EUR 49.0 53.0 28.8 Subtotal 53.0 28.8 Total 3,716.9 3,659.1 There were no assets pledged as of December 31, 2020 and 2019. 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
23311. PARTICIPATIONS OF THE MEMBERS OF THE BOARD OF DIRECTORS AND THE GLOBAL EXECUTIVE COMMITTEE IN DUFRY AGThe following members of the Board of Directors or of the Global Executive Committee of Dufry AG (including related parties) held directly or indirectly shares or share options of the Company as at December 31, 2020 and December 31, 2019 (members not listed do not hold any shares or options):31.12.202031.12.2019IN THOUSANDSSHARESFINANCIAL INSTRUMENTS 1PARTICIPATIONSHARESFINANCIAL INSTRUMENTS 1,2PARTICIPA-TION(2)MEMBERS OF BOARD OF DIRECTORSJuan Carlos Torres Carretero, Chairman 758.3 –0.94% 966.0 23.71.96% H. Jo Min, Independent Lead Director 0.7 –0.00% 0.5 –0.00% Jorge Born, Director 31.7 –0.04% 22.0 –0.04% Julián Diáz Gonzalez, Director and Group CEO 230.3 28.9 0.32% 233.0 63.30.59% Steven Tadler, Director 19.0 –0.02% 13.0 –0.03% Lynda Tyler-Cagni, Director 3.6 –0.00% –––ADDITIONAL FORMER MEMBERS OF THE BOARD OF DIRECTORS (IN 2019)Andrés Holzer Neumann, Director n / a n / a n / a 3,991.0 0.07.89% Total Board of Directors 1,043.6 28.9 1.34% 5,225.5 87.0 10.51% MEMBERS OF GLOBAL EXECUTIVE COMMITTEEJulián Diáz Gonzalez, Director and Group CEO 230.3 28.9 0.32% 233.0 63.30.59% José Antonio Gea, Deputy Group CEO 41.7 17.1 0.07% 33.0 26.8 0.12% Yves Gerster, CFO 3.7 5.3 0.01% 2.2 7.0 0.02% Eugenio Andrades, CEO Operations 5.3 12.6 0.02% 1.0 17.1 0.04% Roger Fordyce, CEO North America 4.5 –0.01% 3.6 1.4 0.01% Andrea Belardini, Chief Commercial Officer 13.7 10.3 0.03% 18.7 16.2 0.07% Luis Marin, Global Chief Corporate Officer 10.8 9.0 0.02% 7.8 13.5 0.04% Pascal C. Duclos, Group General Counsel– 12.6 0.02% – 20.7 0.04% ADDITIONAL FORMER MEMBERS OF GLOBAL EXECUTIVE COMMITTEE (IN 2019)Javier Gonzalez n / a n / a n / a 3.3 7.4 0.02% René Riedi n / a n / a n / a 1.1 14.0 0.03% Total Global Executive Committee 310.0 95.8 0.51% 303.7 187.4 0.97% 1 The financial instruments for the members of the Global Executive Committee (and J. Díaz González also in the table of the Board of Directors) refer to their holdings of PSU (granted). 2 The 2019 financial instruments held by J. Díaz González include the equivalent of 17.5 thousands of shares and for J. C. Torres Carretero 23.7 thousands of shares held through various financial instruments, the detailed terms of which are as disclosed to the SIX Exchange Regulation and published on August 3, 2019. 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
234In addition to the above, the shareholders’ group consisting, among others, of different legal entities controlled by Juan Carlos Torres and Julián Díaz González holds sale positions of 0.97 % through options (778,160 voting rights) as of December 31, 2020 (as of December 31, 2019: the shareholders’ group consisting, among others, of different entities controlled by Andrés Holzer Neumann, Juan Carlos Torres and Julián Díaz González holds sale positions of 3.62% through options 1,829,190 voting rights). The detailed terms of these financial instruments are as disclosed to SIX Exchange Regulation and published on January 9, 2021 (for positions as of December 31, 2020; for sale position as of December 31, 2019: publication of disclosure notice on August 3, 2019). Disclosure notices are available on the SIX Exchange Regulation website:www.ser-ag.com/en/resources/notifications-market-participants/significant-shareholders.html#/12. PROPOSED APPROPRIATION OF RETAINED EARNINGS AND CAPITAL DISTRIBUTION IN THOUSANDS OF CHF20202019Proposed appropriation of retained earningsResult carried forward (366,143) 59,927 Loss for the year (864,755) (426,070)Retained earnings at December 31 (1,230,898) (366,143)Proposed distribution out of retained earnings Balance at beginning of the year 3,420,326 3,983,404 Distribution out of reserve from capital contribution– (199,748)Share capital increase 782,403 –Share capital reduction– (385,330)Reclass from reserve from capital contribution for own shares held at subsidiaries 85,002 22,000 Reserve from capital contribution at December 31 4,287,731 3,420,326 13. EVENTS AFTER REPORTING DATENo significant events occurred after December 31, 2020 up to March 4, 2021 that would have a material impact on these financial statements. 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
23514. MATERIAL INDIRECT SUBSIDIARIESH = Holding R = Retail D = Distribution CenterAS OF DECEMBER 31, 2020LOCATIONCOUNTRYTYPEOWNERSHIP IN %SHARE CAPITAL IN THOUSANDSCURRENCYEUROPE, MIDDLE EAST AND AFRICA (EMEA)ADF Shops CJSCYerevanArmeniaR100 553,834 AMDWorld Duty Free Group Helsinki LtdVantaaFinlandR100 2,500 EURDufry France SANiceFranceR100 8,291 EURWorld Duty Free Group Germany GmbHDüsseldorfGermanyR100 250 EURHellenic Duty Free Shops S.A.AthensGreeceR100 397,535 EURHellenic Distributions S.A.AthensGreeceD100 6,296 EURNuance Group (India) Pvt. LtdBangaloreIndiaR100 1,035,250 INRDufrital SpAMilanItalyR60 466 EURAldeasa Jordan Airports Duty Free Shops LtdAmmanJordanR100 705 USDWDFG SA, Kuwait BranchKuwait CityKuwaitR100 2,383 KWDNuance Group (Malta) LtdLuqaMaltaR52 2,796 EURDufry Maroc SARLCasablancaMoroccoR80 2,500 MADRegStaer M LtdMoscowRussiaR60 142 EURLenrianta CSJCSt. PetersburgRussiaR100 315 EURDufry EastMoscowRussiaR100 712 USDD. d.o.o. BelgradeBelgradeSerbiaR100 693,078 RSDWorld Duty Free Group SAMadridSpainH/R100 19,831 EURSociedad de Distribucion Comercial Aeroportuaria de Canarias, S.L.TeldeSpainR60 667 EURDufry Shops Colombo LimitedColomboSri LankaR100 30,000 LKRNuance Group (Sverige) ABStockholmSwedenR100 100 SEKThe Nuance Group AGZurichSwitzerlandR100 82,100 CHFDufry Basel-Mulhouse AGBaselSwitzerlandR100 100 CHFUrart Gumr. Magaza Isletm. ve Ticaret A.S.AntalyaTurkeyR100 1,161 EURDufry Sharjah FZCSharjahU. Arab. EmiratesR50 2,054 AEDWDFG UK LimitedLondonUKR100 360 GBPNuance Group (UK) LtdLondonUKR100 50 GBPWDFG Ferries LimitedLondonUKR100 50 GBPASIA PACIFICNuance Group (Australia) Pty LtdMelbourneAustraliaR100 210,000 AUDDufry Cambodia LtdPhnom PenCambodiaR80 1,231 USDThe Nuance Group (HK) LtdHong KongChinaR100–HKDThe Nuance Group (Macau) LtdMacauChinaR100 49 HKDDufry (Shanghai) Commercial Co., LtdShanghaiChinaR100 123,547 CNYDufry Thomas Julie Korea Co. LtdBusanSouth KoreaR85 1,100,000 KRWCENTRAL & SOUTH AMERICADufry Jamaica Ltd. St. JamesJamaicaR100–USDInterbaires SABuenos AiresArgentinaR100 47,536 USDDFC Ltd - BarbadosSt. MichaelBarbadosR100 5,000 USDDufry Lojas Francas LtdaSao PauloBrazilR87 99,745 USDDufry do Brasil DF Shop LtdaRio de JaneiroBrazilR87 98,175 USDAldeasa Chile, LtdSantiago de ChileChileR100 2,517 USDDufry Colombia SASBogotaColombiaR100 3,120 USDInversiones Tunc, SASanto DomingoDominican RepublicR100–USDDufry Mexico SA de CVMexico CityMexicoR100 268 USD 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
236AS OF DECEMBER 31, 2020LOCATIONCOUNTRYTYPEOWNERSHIP IN %SHARE CAPITAL IN THOUSANDSCURRENCYWDFG, Peru S.A.C.LimaPeruR100 1,010 USDAlliance Duty Free, LLCSan JuanPuerto RicoR100 2,213 USDNavinten SAMontevideoUruguayR100 126 USDDufry Cruise Services, Inc.MiamiUSAR100–USDNORTH AMERICAWDFG Vancouver LPVancouverCanadaR100 9,500 CADThe Nuance Group (Canada) Inc.TorontoCanadaR100 13,260 CADHudson Group Canada IncVancouverCanadaR100–CADHudson Group (HG) Retail, LLCNew JerseyUSAH/R100–USDSeattle Air VenturesOlympiaUSAR75–USDWDFG North America LLCDelawareUSAH/R100–USDHudson Las Vegas JV Hudson News O'Hare JVLas VegasUSAR73–USDHudson News O'Hare JVChicagoUSAR70–USDHG Logan Retailers JVBostonUSAR80–USDAirport Management Services LLCLos AngelesUSAH/R100–USDJFK Air Ventures II JVNew YorkUSAR80–USDHG Magic Concourse TBITLos AngelesUSAR68–USDAMS of South Florida JVFort LauderdaleUSAR31–USDHG Midway JVChicagoUSAR65–USDHG St Louis JVSt. LouisUSAR70–USDHG-Multiplex-Regali Dallas JVDallasUSAR75–USDHG National JVVirginiaUSAR70–USDHG PHL Retailers JVPhiladelphiaUSAR65–USDWDFG TAC ATL Retail LLC, AtlantaDelawareUSAR86–USDAMS-SJC JVSan JoseUSAR100–USDHudson-Magic Johnson Ent. CV LLCLos AngelesUSAR91–USDHG-CV-Epicure-Martinez San Diego, JVSan DiegoUSAR71–USDDufry Newark IncNewarkUSAR100–USDHG Denver JVDenverUSAR76–USDWDFG LTL ATL JV LLC, AtlantaDelawareUSAR70–USDDufry O'Hare T5 JVChicagoUSAR80–USDHudson-NIA JFK T1 JVNew YorkUSAR90–USDLAX Retail Magic 2 JVLos AngelesUSAR73–USDHG-KCGI-TEI JFK T8 JVNew YorkUSAR85–USDLAX Retail Magic 3-4 JVLos AngelesUSAR75–USDGLOBAL DISTRIBUTION CENTERSInternational Operations & Services (HK) LtdHong KongHong KongD100 109,000 HKDInternational Operations & Services (UY) S.A.MontevideoUruguayD100 50 USDInternational Operations & Services (USA) LLCMiamiUSAD100 398 USDOTHER COMPANIESDufry Financial Services B.V.EindhovenNetherlandsH100–EURDufry One BVEindhovenNetherlandsH100–EUR 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
237To the General Meeting of Dufry AG, BaselBasel, March 8, 2021Report of the statutory auditor on the financial statementsAs statutory auditor, we have audited the financial statements of Dufry AG (the “Company”), which comprise the statement of financial position, statement of profit or loss, and notes (pages 225 to 236), for the year ended December 31, 2020.Board of Directors’ responsibilityThe Board of Directors is responsible for the preparation of the financial statements in accordance with the requirements of Swiss law and the Company’s articles of incorporation. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is further responsible for selecting and applying appropriate accounting policies and making accounting estimates that are reasonable in the circumstances.Auditor’s responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control system relevant to the entity’s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appro-priate to provide a basis for our audit opinion.OpinionIn our opinion, the financial statements for the year ended December 31, 2020 comply with Swiss law and the Company’s articles of incorporation. Emphasis of MatterWe draw attention to note 2.2 of the financial statements, which indicates that the Company’s financial position, results of operations and cash flows have been significantly adversely impacted by the COVID-19 pandemic. This fact together with other matters disclosed in note 2.2 indicates that a material uncertainty exists that may cast significant doubt about the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.Report on key audit matters based on the circular 1 / 2015 of the Federal Audit Oversight AuthorityKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. In addition to the matter described in the “Emphasis of matter” section, we have determined the matters described below to be the key audit matters to be communicated in our report. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.We have fulfilled the responsibilities described in the Auditor’s responsibility section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the financial statements. 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
238Valuation of investments in subsidiariesArea of focusAs of December 31, 2020, investments in subsidiaries amounted to CHF 3,004 million and accounted for 86% of the Company’s total assets. Investments in subsidiaries are held at historical cost less impairments. The Company reviews the carrying amount of the investments in subsidiaries annually, and if events and circumstances suggest that this amount may not be recoverable, an impairment is recognized in the statement of profit or loss. Due to the significance of the carrying values of the investments in subsidiaries and the judgment involved in performing the impairment tests, this matter was considered significant to our audit. Further details on the Company’s investments in subsidiaries are disclosed in notes 2.3, 3 and 7 to the financial statements.Our audit responseWe tested, with the support of our valuation specialists, the appropriateness of the valuation approach and evaluated the Company’s key assumptions, including growth rates used in the cash flow projections during the forecast period, the weighted average cost of capital applied and the valuation of the Dufry Group. We assessed the difference between the carrying amounts of the investments in subsidiaries and their recoverable amount.Our audit procedures did not lead to any reservations concerning the valuation of investments in subsidiaries.Report on other legal requirementsWe confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) and inde-pendence (article 728 CO and article 11 AOA) and that there are no circumstances incompatible with our independence.In accordance with article 728a para. 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the instructions of the Board of Directors.We recommend that the financial statements submitted to you be approved.Ernst & Young Ltd/s/ Jolanda Dolente /s/ Siro BonettiLicensed audit expert Licensed audit expert(Auditor in charge) 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
239DUFRY’S ALTERNATIVE PERFORMANCE MEASURESDufry believes that disclosing adjusted results of the Group’s performance enhances the financial markets’ understanding of the company because the adjusted results enable better comparison across years. Adjusted results exclude exceptional expenses and income such as acquisitions, divestitures, impairments and amortization of acquisition-related intangible assets, which can differ signifi-cantly from year to year, as well as recurring solely IFRS 16 accounting-related items such as interest on lease obligations. For this same reason, Dufry uses these adjusted results in addition to IFRS as important factors in internally assessing the Group’s performance.Organic growthIN MILLIONS OF CHF20202019Like-for-like 1(67.2% )0.6% Net new concessions 2(2.6% )2.4% Organic Growth(69.8% )3.0% Adjusted operating profit(see note 6. Segment information in financial report)Adjusted net profitIN MILLIONS OF CHF20202019Net profit / (loss) attributable to equity holders of the parent (2,513.7) (26.5)Amortization of concession rights 3 251.1 308.9 Impairment of concession rights 3 556.8 26.0 Impairment of goodwill 131.1 –Interest on lease obligations 178.7 187.7 Transaction expenses 3– 2.9 Deferred income tax on above lines (172.6) (90.6)Minority interests on above lines (89.8) (59.1)Adjusted net profit (1,658.4) 349.3 Weighted average number of ordinary shares outstanding58,450,437 49,885,624 Adjusted EPS in CHF(28.37)7.00 1 Sales on same space as previous comparable period.2 Store openings minus store closings in the period under review.3 Related to acquisitions. 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
240Net debtIN MILLIONS OF CHF20202019Borrowings (current and non-current) 3,704.5 3,655.4 Less cash and cash equivalents (360.3) (553.5)Net debt 3,344.2 3,101.9 Core net working capitalIN MILLIONS OF CHF20202019Inventories 659.6 1,050.0 Trade and credit card receivables 17.1 44.2 Less trade payables 154.9 645.6 Core net working capital 521.8 448.6 CapexIN MILLIONS OF CHF20202019Purchase of property, plant and equipment (101.1) (199.3)Purchase of intangible assets (17.9) (54.1)Other investing activities 0.5 (0.6)Proceeds from sale of property, plant and equipment 12.5 8.7 Capex (106.0) (245.3)Adjusted operating cash flowIN MILLIONS OF CHF20202019Cash flow before working capital changes (4.1) 2,223.7 Lease payments (405.7) (1,269.6)Proceeds from lease income 3.9 5.9 Adjusted operating cash flow (405.9) 960.0 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
241Equity free cash flowIN MILLIONS OF CHF20202019Net cash flow from operating activities (345.3) 2,107.7 Lease payments (405.7) (1,269.6)Proceeds from lease income 3.9 5.9 Capex (106.0) (245.3)Interest received 23.3 31.2 Free cash flow (829.8) 629.9 Interest paid (168.8) (181.2)Cash flow related to minorities (34.7) (68.7) of which purchase of interest in associates (0.4) (2.5) of which dividends paid to non-controlling interests (33.3) (70.5) of which contributions (paid to) / from non-controlling interests* (1.0) 4.3 Other financial assets 6.0 3.3 of which purchase of financial assets (0.4) (0.1) of which proceeds from sale of financial assets 4.9 0.2 of which proceeds from loans receivable repaid 1.5 3.2 Equity free cash flow (1,027.3) 383.3 * excluding acquisition of non-controlling interests in Hudson Ltd in 2020. 3 Financial Report
Financial Statements of Dufry AG
DUFRY ANNUAL REPORT 2020
242The financial reports are available under:https://www.dufry.com/en/investors/ir-reports-presentations-and-publications Page section “Presentation of results and other publications” – select Financial ReportsFor the Investor Relations and Corporate Communications contacts as well as a summary of anticipated key dates in 2021 please refer to pages 288 / 289 of this Annual Report. 4 Governance Report
DUFRY ANNUAL REPORT 2020
CORPORATE
GOVERNANCE
INTRODUCTION
This Report is prepared in accordance with the
Corporate Governance Directive (DCG) of SIX Ex-
change Regulation. All information within this Corpo-
rate Governance Report and within the Remuneration
Report (see page 268) refers to the Company Organi-
zation, Internal Regulations and Articles of Incor-
poration that were in effect as of December 31, 2020
(if not specifically mentioned otherwise).
The Articles of Incorporation are available on the
Company website, www.dufry.com, section Investors –
Corporate Governance – Articles of Incorporation:
www.dufry.com/en/investors/corporate-governance
page section “Featured downloads – Articles of In-
corporation”
Dufry engages with shareholders, analysts and inves-
tors on a regular basis to better understand their ex-
pectations, needs and concerns as part of the com-
pany’s stakeholder dialogue strategy and its ESG
engagement. Such feedback received is taken into
consideration when evolving the company strategy as
well as corporate governance and remuneration mat-
ters. In this context, management and the investor re-
lations team had 1,620 contacts with shareholders and
investors combining personal meetings, video confer-
ences, calls and emails in 2020.
In 2020, the COVID-19 pandemic had an impact on the
organization and conduct of the Ordinary General
Meeting and the Extraordinary General Meeting of
Shareholders, as well as on the physical attendance of
members of the Board of Directors during their meet-
ings and during meetings of the different Committees.
The specific details of the impact that this extraordi-
nary pandemic situation in 2020 had on the usual or-
ganization are explained in detail in the respective sec-
tions.
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 17 of this Annual Report.
Listed company as of December 31, 2020
COMPANY
Dufry AG, Brunngässlein 12, 4052 Basel, Switzerland
(hereinafter “Dufry AG” or the “Company”)
LISTING
Registered shares: SIX Swiss Exchange
MARKET CAPITALIZATION BASED ON SHARES ISSUED
CHF 4,461,055,446 as of December 31, 2020
PERCENTAGE OF SHARES HELD BY DUFRY AG
0.014 % of Dufry AG share capital as of December 31, 2020
SECURITY NUMBERS
Registered shares:
ISIN-Code CH0023405456, Swiss Security-No. 2340545,
Ticker Symbol DUFN
Non-listed consolidated entities as
of December 31, 2020
For a table of the operational non-listed consolidated
entities please refer to page 235 in the section Finan-
cial Statements of this Annual Report*.
The previously listed North American subsidiary Hud-
son Ltd., which was separately listed on the New York
Stock Exchange (as of February 1, 2018), was fully re-
integrated into Dufry AG by a merger transaction,
which successfully closed on December 1, 2020. Hud-
son Ltd. was delisted from the New York Stock Ex-
change on December 11, 2020.
*
Including the company names, locations, percentage of shares
held, share capital. The list of consolidated entities does not include
all subsidiaries of the Company, but the most important subsidiaries
in terms of sales for Retail and Distribution Center companies and
in terms of total assets for holding companies.
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4 Governance Report
DUFRY ANNUAL REPORT 2020
1.2 SIGNIFICANT SHAREHOLDERS
Pursuant to the information provided to the Company
by its shareholders in compliance with the Financial
Market Infrastructure Act during 2020, the following
shareholders disclosed significant positions as of
December 31, 2020 1.
Further details regarding these shareholders and
shareholder groups as well as additional information
regarding the individual disclosure notices in 2020 are
available on the website of SIX Exchange Regulation at:
www.ser-ag.com/en/resources/notifications-market-
participants/significant-shareholders.html#/
SHAREHOLDER
Through shares
Long position
through
financial
instruments 2
Short positions 3
Net long position
Group of shareholders consisting of legal entities AI Louvre
(Luxembourg) S.à.r.l. and Taobao China Holding Limited, such group
representing the interests of Advent International Corporation
and Alibaba Group Holding Limited 4
State of Qatar 5
Compagnie Financiere Rupert 6
Norges Bank (the Central Bank of Norway) 7
Group of shareholders consisting of various companies and legal
entities including Travel Retail Investment S.C.A., and Hudson Retail
Partners, LLC, such group representing the interests of Andrés Holzer
Neumann, Julián Díaz González, Juan Carlos Torres Carretero,
James S. Cohen, James S. Cohen Family Dynasty Trust 8
Government of Singapore 9
FMR LLC 10
Fidelity Investment Trust 11
JP Morgan Chase & Co. 12
The percentage of voting rights has to be read in context with
the relevant and applicable stock exchange and disclosure rules.
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 Article 120 of the Financial Market
Infrastructure Act is crossed.
7
8
Financial instruments such as convertible bonds, conversion and
share purchase rights, granted (written) share sale rights.
Share sale rights (especially put options) and granted (written)
conversion and /or share purchase rights as well as financial
instruments that provide for or permit cash settlement as well
as other differential transactions (e.g. contracts for difference
and /or financial futures).
Beneficial owners of these shares are: Advent International Corporation,
Boston, MA/USA, and Alibaba Group Holding Limited, Grand Cayman,
Cayman Islands. Shares are directly held by the following legal enti-
ties: AI Louvre (Luxembourg) S.à.r.l., Luxembourg/Grand Duchy of
Luxembourg (for Advent International Corporation) and Taobao China
Holding Limited, Hong Kong S.A.R./China (for Alibaba Group Holding
Limited).
Shares and financial instruments directly held by Qatar Holding LLC,
Doha/Qatar. The beneficial holder of the shares is the Qatar Invest-
ment Authority, Doha/Qatar, which was established and is controlled
by the State of Qatar.
Shares directly held by Richemont Luxury Group Ltd, St Helier/
Jersey. The beneficial holder of the shares is Compagnie Financiere
Rupert, Geneva/Switzerland.
17.55 %
6.91 %
5.00 %
4.89 %
4.25%
3.92 %
3.19 %
3.02%
0.03 %
2.61 %
1.13 %
–
–
–
–
–
–
–
–
–
–
– 0.97 %
–
–
–
3.46 %
– 3.46 %
20.16 %
8.04 %
5.00 %
4.89 %
3.28 %
3.92 %
3.19 %
3.02 %
0.03 %
Norges Bank (the Central Bank of Norway), Oslo, Norway. Of the total
share position of 4.89 %, 1.62 % relate to securities lending positions
and similar transactions.
Beneficial owners of these shares are: Andrés Holzer Neumann, Wilen
(Sarnen)/Switzerland, Julián Díaz González, Altendorf/Switzerland,
Juan Carlos Torres Carretero, Meggen/Switzerland, James S. Cohen,
Alpine NJ/USA, James S. Cohen Family Dynasty Trust, Teaneck,
NJ/USA. Shares are directly held by the following companies and
legal entities: Travel Retail Investment S.C.A., Luxembourg/Grand
Duchy of Luxembourg, Petrus PTE Ltd, Singapore/Singapore, Wither-
spoon Investments LLC, Wilmington, DE/USA, Petrus AG, Basel/Swit-
zerland, Laguna Partners AG, Luzern/Switzerland, JDG Partners AG,
Luzern/Switzerland, JLC Investments, LLC, Teaneck, NJ/USA and
Hudson Retail Partners, LLC, Teaneck, NJ/USA. Of the total share
position of 4.25 %, 0.48 % relate to delegated voting rights.
9
Shares directly held by GIC Private Limited (“GIC”), Singapore/
Singapore. The beneficial holder of the shares is the Government
of Singapore, Singapore/Singapore. GIC is wholly owned by the
Government of Singapore (“GOS”). GIC acts as the fund manager for
GoS and the Monetary Authority of Singapore.
10 FMR LLC, Boston, MA/USA.
11 Fidelity Investment Trust, Boston, MA/USA
12 Shares and financial instruments directly held by JPMorgan Chase
Bank, N.A., Ohio/USA. The indirect holder of the shares and financial
instruments is JPMorgan Chase & Co., New York, NY/USA.
1
2
3
4
5
6
244
4 Governance Report
DUFRY ANNUAL REPORT 2020
In addition, Dufry AG disclosed a purchase position of
0.02 % of the voting rights and a sale position of 16.37 %
of the voting rights as of October 20, 2020. The sale
position mainly relates to the CHF 350.0 million 1.0 %
Guaranteed Senior Convertible Bonds 2023 and
CHF 69.5 million 4.1 % Mandatory Convertible Notes
2023 (both convertibles together represent an under-
lying 12,698,174 shares, corresponding to 15.82 % of the
voting rights registered in the commercial register as
of December 31, 2020 – see also section 2.7 on page
248). The remaining sale position of 0.54 % relates to
the Dufry participation plan (PSU plan).
Understandings among shareholders
The type of understanding among the members of the
group of shareholders consisting of the legal entities
AI Louvre (Luxembourg) S.à.r.l. and Taobao China Hold-
ing Limited, representing the interests of Advent
International Corporation and Alibaba Group Holding
Limited, respectively, is a lock-up agreement expiring
on April 22, 2021 (see Disclosure Notice published on
October 27, 2020).
The type of understanding among the members of the
group of shareholders consisting of various compa-
nies and legal entities representing the interests of
Andrés Holzer Neumann, Julián Díaz González, Juan
Carlos Torres Carretero, James S. Cohen and James
S. Cohen Family Dynasty Trust is one or more share-
holder agreements (see Disclosure Notice published
on January 9, 2021).
1.3 CROSS-SHAREHOLDINGS
Dufry AG has not entered into cross-shareholdings
with other companies in terms of capital sharehold-
ings or voting rights in excess of 5 %.
2. CAPITAL STRUCTURE
2.1 SHARE CAPITAL
As of December 31, 2020, the Company’s capital struc-
ture is as follows:
ORDINARY SHARE CAPITAL
CHF 401,318,410 (nominal value) divided in 80,263,682 fully paid
registered shares with nominal value of CHF 5 each
CONDITIONAL CAPITAL
CHF 63,500,000 (nominal value) divided in 12,700,000 to be fully paid
registered shares with nominal value of CHF 5 each
AUTHORIZED CAPITAL
None
For the website link regarding the Articles of Incorpo-
ration referred to in the following chapters please see
page 267 of this Corporate Governance Report.
2.2 DETAILS ON CONDITIONAL AND AUTHORIZED
CAPITAL
Conditional capital
Article 3bis of the Articles of Incorporation, dated
October 21, 2020, reads as follows:
1. The share capital may be increased in an amount not
to exceed CHF 63,500,000 by the issuance of up to
12,700,000 fully paid registered shares with a nom-
inal value of CHF 5 each through the exercise of
conversion and /or option rights granted in connec-
tion with the issuance of newly or already issued
convertible debentures, debentures with option
rights or other financing instruments by the Com-
pany or one of its group companies.
2. The preferential subscription rights of the share-
holders shall be excluded in connection with the is-
suance of convertible debentures, debentures with
option rights or other financing 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 subse-
quent 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:
245
4 Governance Report
DUFRY ANNUAL REPORT 2020
a) an issue by firm underwriting by a consortium of
banks with subsequent offering to the public with-
out 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 issuance occurs in domestic or international
capital markets or through a private placement;
or
c) the instruments are issued in connection with the
financing or refinancing of the acquisition of an
enterprise or parts of an enterprise or with par-
ticipations or new investments of the Company
or one of its group companies.
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 is-
sued at the relevant market conditions.
The conditional share capital of CHF 63,500,000 rep-
resents 15.82 % of the issued ordinary share capital of
the Company registered in the commercial register as
of December 31, 2020.
Authorized capital
As of December 31, 2020, the Company has no autho-
rized capital.
2.3 CHANGES IN CAPITAL OF DUFRY AG
in capital was registered in the commercial register on
April 24, 2020.
At the Ordinary General Meeting of Shareholders on
May 18, 2020, shareholders approved the Board of Di-
rectors’ proposal to increase the previously existing
conditional capital from CHF 4,442,160 (888,432
shares) to CHF 63,500,000 (12,700,000 shares). The
change of the conditional capital was registered in the
commercial register on May 19, 2020.
At the Extraordinary General Meeting of Shareholders
on October 6, 2020, shareholders approved the Board
of Directors’ proposal for an ordinary increase of the
share capital by a maximum of up to CHF 123,482,580
(24,696,516 shares). On October 20, 2020, Dufry suc-
cessfully completed the capital increase in an amount
of CHF 123,482,580 (24,696,516 shares). After the cap-
ital increase, the ordinary share capital amounts to
CHF 401,318,410 (80,263,682 shares). The change in
capital was registered in the commercial register on
October 21, 2020.
Changes in capital in 2019
At the Ordinary General Meeting of Shareholders
on May 9, 2019, shareholders approved the Board of
Directors’ proposal to cancel the 3,304,541 registered
shares purchased under the share buyback program
completed on October 31, 2018. As a result, the share
capital decreased from CHF 269,358,535 (53,871,707
shares) to CHF 252,835,830 (50,567,166 shares). The
change in capital was registered in the commercial
register on July 22, 2019.
The same Ordinary General Meeting of Shareholders
also approved the Board of Directors’ proposal to cre-
ate authorized capital in the amount of CHF 25,000,000
(5,000,000 shares).
Changes in capital in 2018
The capital of Dufry AG remained unchanged in fiscal
year 2018.
NOMINAL SHARE CAPITAL
December 31, 2018
December 31, 2019
December 31, 2020
CONDITIONAL CAPITAL
December 31, 2018
December 31, 2019
December 31, 2020
AUTHORIZED CAPITAL
December 31, 2018
December 31, 2019
December 31, 2020
CHF 269,358,535
CHF 252,835,830
CHF 401,318,410
4,442,160
CHF
CHF
4,442,160
CHF 63,500,000
None
CHF 25,000,000
None
2.4 SHARES
Changes in capital in 2020
On April 23, 2020, Dufry successfully completed the
placement of 5,000,000 new shares and 500,000
treasury shares, by way of an accelerated bookbuild-
ing. The 5,000,000 new shares were issued from the
existing authorized capital. Thereafter the ordinary
share capital amounted to CHF 277,835,830 (55,567,166
shares) and the authorized capital to zero. The change
As of December 31, 2020, the share capital of
Dufry AG is divided into 80,263,682 fully paid in regis-
tered 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 en-
titled to dividends if declared. Each share entitles its
holder to one vote. The Company maintains a share
register showing the name and address of the share-
holders or usufructuaries. Only persons registered as
246
4 Governance Report
DUFRY ANNUAL REPORT 2020
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 certificates (“Par-
tizipationsscheine”) or profit sharing certificates
(“Genussscheine”).
2.6 LIMITATION ON TRANSFERABILITY AND
NOMINEE REGISTRATION OF REGISTERED SHARES
– Only persons registered as shareholders or usu-
fructuaries of registered shares in the share regis-
ter 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 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 reg-
istered 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 capi-
tal 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 registra-
tion to hold the shares for their own account and
with whom the Board of Directors has entered into
a corresponding agreement (see also Article 5 of the
Articles of Incorporation). Nominees are only enti-
tled to represent registered shares held by them at
a General Meeting of Shareholders provided that
they are registered in the share register and they
hold a valid written proxy granted by the beneficial
owner of the registered shares instructing the nom-
inee how to vote at the General Meeting of Share-
holders. Shares held by a nominee for which it is not
able to produce such a proxy count as not repre-
sented at the General 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 management or otherwise linked as
well as individuals or corporate bodies and partner-
ships who act in concert to circumvent the regula-
tions concerning the nominees (esp. as syndicates),
shall be treated as one single nominee within the
meaning of the above mentioned regulation.
– The Board of Directors may cancel the registration,
with retroactive effect if appropriate, if the regis-
tration 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 en-
tries occurred in consequence of false statements
by the purchaser. The purchaser must be informed
immediately of the deletion.
– The limitations for registration in the share register
described above also apply for shares acquired or
subscribed by the exercise of subscription, option
or conversion rights.
Exceptions granted in the year under review
The Company has not granted any exceptions during
the year under review.
Required quorums for a change
of the limitations of transferability
A change of the limitations on the transfer of regis-
tered shares or the removal of such limitations re-
quires a resolution of the General Meeting of Share-
holders passed by at least two thirds of the votes
represented and the absolute majority of the nominal
value of shares represented.
247
4 Governance Report
DUFRY ANNUAL REPORT 2020
2.7 CONVERTIBLE BONDS AND OPTIONS
3. BOARD OF DIRECTORS
Convertible bonds
As of December 31, 2020, the Company had the fol-
lowing convertible bonds/notes outstanding:
GUARANTEED SENIOR CONVERTIBLE BONDS
Dufry One B.V., Eindhoven/NL
Issuer
SIX Swiss Exchange
Listing
Size of issue
CHF 350,000,000
Outstanding amount as of Dec 31, 2020 CHF 350,000,000
Principal amount
Interest rate
3.1 MEMBERS OF THE BOARD OF DIRECTORS
As of December 31, 2020, the Board of Directors com-
prised ten Board members compared with nine mem-
bers as of December 31, 2019.
The members of the Board of Directors are elected
individually and for a term of office extending until
completion of the next Ordinary General Meeting of
Shareholders. The Chairman of the Board of Directors
and the members of the Remuneration Committee are
directly elected by the General Meeting of Shareholders.
The table on page 249 sets forth the name and year of
first election as a member of the Board of Directors
for each respective member, followed by their Curri-
cula Vitae with a short description of each member’s
business experience, education and activities.
Changes in the Board of Directors in fiscal year
2020
Andrés Holzer Neumann, member of the Board of Di-
rectors of Dufry AG since 2004, did not stand for re-
election at the Ordinary General Meeting of Share-
holders on May 18, 2020. For details of his Curriculum
Vitae please refer to page 236 of the Annual Report
2019, which can be downloaded from the Company
website under the following link:
www.dufry.com/en/investors/ir-reports-presenta-
tions-and-publications
page section “Presentation of results and other pub-
lications – select Financial Reports”
The Ordinary General Meeting of Shareholders, held
on May 18, 2020, elected Mary J. Steele Guilfoile as a
new member of the Board of Directors, replacing Mr.
Holzer Neumann.
In addition, the Extraordinary General Meeting of
Shareholders, held on October 6, 2020, elected Ranjan
Sen as a new member of the Board of Directors. Fol-
lowing this Extraordinary General Meeting of Share-
holders, the Board of Directors consists of ten mem-
bers.
CHF 200,000 per bond
1.0% per annum,
payable semi-annually
(May 4 and November 4)
May 4, 2023
Registered shares of
Dufry AG (10,606,061 shares)
CHF 33.00 (subject to
adjustments)
May 4, 2020 up to and includ-
ing April 19, 2023
Conditional capital and/or
issued and outstanding shares
CH0540633051
54063305
DUF20
The underlying 10,606,061
registered shares to be
potentially issued as a result
of the conversion of the se-
nior convertible bonds repre-
sent 13.21% of the issued and
listed registered shares as of
December 31, 2020.
CHF 100,000 per note
4.1 % per annum,
payable semi-annually
(May 18 and November 18)
November 18, 2023
Registered shares of
Dufry AG (2,092,113 shares)
CHF 33.22 (subject to
adjustments)
November 18, 2020 up to and
including November 6, 2023
Conditional capital and/or
issued and outstanding shares
CH0576402173
57640217
n/a
The underlying 2,092,113
registered shares to be
potentially issued as a result
of the conversion of the man-
datory convertible notes
represent 2.61 % of the issued
and listed registered shares
as of December 31, 2020.
Maturity
Convertible into
Conversion price
Conversion period
Source of shares
ISIN-No.
Swiss Security-No.
Ticker symbol
Potential dilution
MANDATORY CONVERTIBLE NOTES
Maturity
Convertible into
Conversion price
Conversion period
Source of shares
ISIN-No.
Swiss Security-No.
Ticker symbol
Potential dilution
Dufry One B.V., Eindhoven/NL
Issuer
No listing
Listing
Size of issue
CHF 69,500,000
Outstanding amount as of Dec 31, 2020 CHF 69,500,000
Principal amount
Interest rate
Options
As of December 31, 2020, the Company had no out-
standing warrants or options to acquire shares issued
by or on behalf of the Company. Dufry has certain
share-based payments, the essentials of which are dis-
closed in the “Remuneration Report” on page 268 ff.
248
4 Governance Report
DUFRY ANNUAL REPORT 2020
BOARD OF DIRECTORS AS OF DECEMBER 31, 2020
NAME
PROFESSION
NATIONALITY
POSITION
WITH DUFRY
DATE OF
FIRST ELECTION
Juan Carlos Torres Carretero
Chairman of Dufry AG
Spanish
Chairman
Heekyung Jo Min
Jorge Born
Claire Chiang
Executive Vice President of
CJ Cheiljedang
CEO of Bomagra S.A.
Senior Vice President of
Banyan Tree Holdings Limited
Julián Díaz González
Group CEO of Dufry AG
Mary J. Steele Guilfoile
Partner of The Beacon Group, LP
Luis Maroto Camino
Ranjan Sen
Steven Tadler
Lynda Tyler-Cagni
CEO and President of
Amadeus IT Group
Managing Partner of
Advent International
Managing Director of
Exeter Capital
American
Argentinian
Lead Independent
Director
Director
Singaporean
Director
Spanish
American
Director, Group CEO
Director
Spanish
Director
German
Director
2003
2016
2010
2016
2013
2020
2019
2020
2018
2018
CEO of Only the Best Agency
British and Italian
American
Director
Director
DIVERSITY OF THE BOARD OF DIRECTORS
10 % BRITISH/ITALIAN
30 % SPANISH
10 % GERMAN
40 % FEMALE
30 % AMERICAN
10 % ARGENTINIAN
10 % SINGAPOREAN
60 % MALE
The Chairman of the Board of Directors is male, the In-
dependent Lead Director is female. Over the past years,
the Board of Directors was consistently renewed and
currently, 70 % of the Board members have a tenure of
5 years or less.
249
4 Governance Report
DUFRY ANNUAL REPORT 2020
3.2 EDUCATION, PROFESSIONAL BACKGROUND, OTHER ACTIVITIES AND FUNCTIONS
JUAN CARLOS TORRES
CARRETERO
Executive Chairman, born 1949,
Spanish
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. 1995 – 2016
Managing Director and Senior
Partner in charge of Advent Inter-
national Corporation’s investment
activities in Latin America.
Current Board Mandates
Dufry AG and Chairman of Acamar
Partners Acquisition Corp.
HEEKYUNG JO MIN
Lead Independent Director,
born 1958, American
JORGE BORN
Director, born 1962,
Argentinian
CLAIRE CHIANG
Director, born 1951,
Singaporean
Education
B.S. in economics from the
Wharton School of the University
of Pennsylvania.
Professional Background
2001 – 2010 Deputy Chairman
of Bunge Ltd. 1992 – 1997 Head
of Bunge’s European operations.
Before 1997 various capacities in
the commodities trading, oil seed-
ing processing and food products
areas in Argentina, Brazil, the
United States and Europe for
Bunge Ltd. 2004 – 2005 Board
member of Dufry AG. Since 1997
President and Chief Executive
Officer of Bomagra S.A., Argentina.
Current Board Mandates
Dufry AG, Hochschild Mining, Ltd.
and Fundación Bunge y Born
(Chairman).
Education
Masters in Philosophy from the
University of Hong Kong and an
Undergraduate Degree from the
University of Singapore.
Professional Background
Founder and Managing Director
of Banyan Tree Gallery, and Co-
founder and Senior Vice President
of Singapore listed Banyan Tree
Holdings Limited since 1994.
Member of Parliament for the
Government of Singapore from
1997 to 2001.
Current Board Mandates
Dufry AG, ISS A/S, Banyan Tree
Holdings Limited, Banyan Tree
Gallery (Singapore) Pte. Ltd.
and Mandai Safari Park Holdings
Pte. Ltd.
Education
Ph. D in Business Administration
from Seoul Business School
(aSSIST), MBA from Columbia
University Graduate School of
Business in New York, and a BA
from Seoul National University.
Professional Background
2004 – 2005 Executive Vice
President at Prudential Invest-
ments and Securities Co. in Korea.
2006 Country Advisor, Global
Resolutions in Korea. 2007 – 2010
Director General of the Invest-
ment Promotion Bureau at the
Incheon Free Economic Zone
(IFEZ) in Korea. Since 2011, Senior
Executive Vice President and Head
of Corporate Social Responsibility
of CJ Cheiljedang Corporation
in Korea. Ms. Min speaks regularly
on the subject of sustainability
and ESG (Environment, Social,
Governance).
Current Board Mandates
Dufry AG, Asia New Zealand
Foundation (Honorary Advisor)
and CJ Welfare Foundation.
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JULIÁN DÍAZ GONZÁLEZ
Director, Group Chief Executive
Officer, born 1958, Spanish
MARY J. STEELE GUILFOILE
Director, born 1954,
American
LUIS MAROTO CAMINO
Director, born 1964,
Spanish
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, S.A. 1993 – 1997
Division Director at Aldeasa.
1997 – 2000 various managerial
and business positions at
Aeroboutiques de Mexico, S.A.
de C.V. and Deor, S.A. de C.V.
2000 – 2003 General Manager
of Latinoamericana Duty-Free,
S.A. de C.V. Since 2004 Chief
Executive Officer at Dufry AG.
Current Board Mandates
Dufry AG.
Education
Bachelor’s degree in Law from
the Universidad Complutense
Madrid, MBA from the Instituto
de Estudios Superiores de la
Empresa, Madrid (IESE), further
qualifications from Stanford,
Harvard Business School, INSEAD
and IMD.
Professional Background
2000 Joined Amadeus IT Group,
a leading player in the travel and
tourism industry, where he served
as Deputy CEO, CFO and Director
Marketing Finance. Prior to joining
Amadeus, he held several manage-
rial positions at the Bertelsmann
Group. Since 2011, CEO and
President of Amadeus IT Group.
Current Board Mandates
Dufry AG and Amadeus IT Group.
Education
Bachelor of Science from
Boston College Carroll School
of Management, MBA from
Columbia Business School,
Licensed, certified public
accountant.
Professional Background
1996 – 2000 Partner, CFO and
COO of The Beacon Group, LLC,
a private equity, strategic advisory
and wealth management partner-
ship. 2000 – 2002 Several man-
agement positions such as Execu-
tive Vice President and Corporate
Treasurer at JPMorgan Chase &
Co. and Chief Administrative Offi-
cer of its investment bank. Serves
as a member of the Boards of
Directors of C.H. Robinson World-
wide, Inc. (since 2012), The Inter-
public Group of Companies, Inc.
(since 2007) and Pitney Bowes,
Inc. (since 2018). Since 2002 serves
as a Chairwoman of MG Advisors,
Inc. and has been a Partner of
The Beacon Group, LP since 1998.
Current Board Mandates
Dufry AG, C.H. Robinson World-
wide, Inc., The Interpublic Group
of Companies, Inc., Pitney Bowes,
Inc., Chair of MG Advisors, Inc.
Ms. Steele Guilfoile served as a
member of the Board of Directors
of Hudson Ltd. from 2018 until her
election to the Board of Directors
of Dufry AG on May 18, 2020. As
of that date, she stepped down
from the Hudson Board of Direc-
tors.
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RANJAN SEN
Director, born 1969,
German
STEVEN TADLER
Director, born 1959,
American
LYNDA TYLER-CAGNI
Director, born 1956,
British and Italian
Education
Degree in Business Administra-
tion from Richmond University
in London.
Professional Background
Many years of private equity and
banking experience. 2003 Joined
Advent International as Director.
Since 2016 Managing Partner at
Advent International. Member of
the European and Asian Invest-
ment Advisory Committee and
Head of the German office in
Frankfurt of Advent International.
Current Board Mandates
Dufry AG, Inpost S.A.
Education
Master in Business Administration
from Harvard Business School.
B.S., with distinction, from the
University of Virginia.
Professional Background
1985 joined Advent International
as Managing Partner and held that
position until 2019. Since 2020
Managing Director at Exeter Capi-
tal, a private equity firm focused
on investing in consumer-facing
businesses. Serves as a Director
of Advent International Corp
(since 2002) and wTe Corporation
(since 1989).
Previous board mandates include
Dufry AG (2010 – 2013),
Skill-soft (2020 – 2014),
Transunion (2012 – 2017),
Bojangles’ (2011 – 2019)
Current Board Mandates
Dufry AG, Advent International
Corp (non-executive) and wTe
Corporation.
Education
B.A. (Hons) in Languages,
Economics & Politics from the
University of Kingston, London.
Professional Background
Lynda Tyler-Cagni is the founder
and CEO at Only the Best Agency
Ltd, a consulting company advising
and representing talent primarily
in the fashion, retail and FMCG
sectors since 2015. She also served
as a Director at Atlantia SpA, an
Italian listed global oper ator in the
motorway and airport infrastruc-
ture sector until November 2018.
Ms. Tyler-Cagni previously served
on the Board of World Duty Free
Group as a non-executive and inde-
pendent member and chair of
the HR & Remuneration Committee
(from 2013 until the acquisition
of World Duty Free Group by
Dufry AG in 2015). She was also an
advisor to the management Board
of Bonpoint and held various
management positions with Fast
Retailing Group, Uniqlo and
Ermenegildo Zegna.
Current Board Mandates
Dufry AG and EDHEC Paris.
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Messrs. Juan Carlos Torres Carretero (Chairman),
Andrés Holzer Neumann (member of the Board of Di-
rectors until May 18, 2020) and Julián Díaz González
(Director) are members of a group of shareholders,
which held a 4.25 % purchase position of Dufry AG as
of December 31, 2020. See for details the disclosure
under “1.2 Significant Shareholders” on page 244 of
this Annual Report.
Due to his intense involvement with the Company’s
management, the Chairman of the Board of Directors,
Mr. Juan Carlos Torres Carretero is considered an ex-
ecutive Chairman. Mr. Julián Díaz González acts as
Group Chief Executive Officer. All other current mem-
bers of the Board of Directors are non-executive mem-
bers and are also considered as independent members.
None of the current members of the Board of Directors
(except Julián Díaz González as Group CEO) have ever
been in a managerial position at Dufry AG or any of its
subsidiaries. For information on related parties and re-
lated party transactions please refer to Note 41 on page
219 and to the information provided in the Remunera-
tion Report on page 268 ff. of this Annual Report.
3.3 RULES IN THE ARTICLES OF INCORPORATION
REGARDING THE NUMBER OF PERMITTED
MANDATES OUTSIDE THE COMPANY
For the website link regarding the Articles of Incorpo-
ration referred to in the following chapters please see
page 267 of this Corporate Governance Report.
In accordance with Article 24 para. 2 of the Articles of
Incorporation, dated October 21, 2020, no member of
the Board of Directors may hold more than four addi-
tional mandates in listed companies and ten additional
mandates in non-listed companies. The following man-
dates are not subject to the limitations under para. 2
of this Article:
a) mandates in companies which are controlled by the
Company or which control the Company;
b) mandates held at the request of the Company or any
company controlled by it. No member of the Board
of Directors may hold more than ten such mandates;
and
c) mandates in associations, charitable organizations,
foundations, trusts and employee welfare founda-
tions. No member of the Board of Directors may
hold more than ten such mandates.
Mandates shall mean mandates in the supreme gov-
erning body of a legal entity which is required to be
registered in the commercial register or a comparable
foreign register. Mandates in different legal entities
that are under joint control or the same beneficial
ownership are deemed one mandate.
3.4 ELECTION AND TERMS OF OFFICE
In accordance with Article 13 of the Articles of Incor-
poration, dated October 21, 2020:
– The Board of Directors shall consist of at least three
and at most eleven members. At the Extraordinary
General Meeting of Shareholders on October 6,
2020, the shareholders approved the Board of Di-
rectors’ proposal to amend Article 13 para. 1 of the
Articles of Incorporation and to increase the max-
imum size of the Board of Directors from previously
nine members to eleven members.
– Members of the Board of Directors and the Chair-
man of the Board of Directors shall be elected for
a term of office extending until completion of the
next Ordinary General Meeting of Shareholders.
– The members of the Board of Directors and the
Chairman of the Board of Directors may be re-elected
without limitation.
– If the office of the Chairman of the Board of Direc-
tors is vacant, the Board of Directors shall appoint
a Chairman from among its members for a term of
office extending until completion of the next Ordi-
nary General Meeting of Shareholders.
– Except for the election of the Chairman of the Board
of Directors and the members of the Remuneration
Committee by the General Meeting of Sharehold-
ers, the Board of Directors determines its own
organization. The Board of Directors shall elect a
Vice-Chairman. It shall appoint a Secretary who does
not need to be a member of the Board of Directors.
All members of the Board of Directors, with exception
of Mr. Ranjan Sen, were elected in individual elections
at the Ordinary General Meeting of Shareholders held
on May 18, 2020. Mr. Sen was elected as a new mem-
ber of the Board of Directors at the Extradordinary
General Meeting of Shareholders held on October 6,
2020. The Ordinary General Meeting of Shareholders
re-elected Juan Carlos Torres Carretero as Chairman
of the Board of Directors. Ms. Heekyung Jo Min,
Ms. Claire Chiang as well as Mr. Jorge Born were
elected in individual elections as members of the Re-
muneration Committee at this Ordinary General Meet-
ing of Shareholders.
3.5 INTERNAL ORGANIZATIONAL STRUCTURE
Except for the election of the Chairman of the Board
of Directors and the members of the Remuneration
Committee (which are to be elected by the General
Meeting of Shareholders), the Board of Directors
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THE BOARD COMMITTEES AS OF DECEMBER 31, 2020
MEMBER OF THE BOARD
OF DIRECTORS
BOARD OF DIRECTORS
AUDIT COMMITTEE
NOMINATION COMMITTEE
REMUNERATION COMMITTEE
Juan Carlos Torres Carretero
Chairman
Heekyung Jo Min
Jorge Born
Claire Chiang
Julián Díaz González
Mary J. Steele Guilfoile 1
Luis Maroto Camino
Ranjan Sen 2
Steven Tadler
Lynda Tyler-Cagni
Number of meetings
in fiscal year 2020
Average attendance ratio 3
Lead Independent
Director
Director
Director
Director / Group CEO
Director
Director
Director
Director
Director
15
98 %
–
–
–
–
–
Committee Chairwoman
Committee Chairman
Committee Chairman
Committee Member
Committee Member
Committee Member
–
–
Committee Member
Committee Member
–
–
–
–
–
Committee Member
Committee Member
–
4
100 %
Committee Member
3
83 %
–
–
–
–
–
–
4
92 %
1 Member of the Board of Directors since the Ordinary General Meeting of Shareholders held on May 18, 2020.
2 Member of the Board of Directors since the Extraordinary General Meeting of Shareholders held on October 6, 2020.
3 The average attendance ratio regarding the Committees refers directly to the members of the respective Committee.
Additional participants who participate as guests in Committee meetings are not included in the percentage calculations.
For the newly elected Board members, their attendance ratio is calculated as of the date of election at the General
Meeting of Shareholders.
determines its own organization. It shall elect the
Lead Independent Director or a Vice-Chairman, the
members of the Audit Committee and of the Nomina-
tion Committee, and appoint a Secretary who does
not need to be a member of the Board of Directors.
As of December 31, 2020, Dufry AG has three com-
mittees: the Audit Committee, the Nomination Com-
mittee and the Remuneration Committee. All three
Committees are assisting the Board of Directors in
fulfilling its duties and have also decision authority to
the extent described below.
Audit Committee
Members as of December 31, 2020: Jorge Born (Chair-
man Audit Committee), Mary J. Steele Guilfoile, Luis
Maroto Camino, Steven Tadler.
The members of the Audit Committee are all non-
executive and independent members of the Board of
Directors. Pursuant to item 14 of the Swiss Code of Best
Practice for Corporate Governance (SCBP), an inde-
pendent member is a non-executive member, who has
not been an executive member of the Dufry Group in
the last three years and has no or comparatively mi-
nor business relations with the Company. The mem-
bers shall be appointed, as a rule, for the entire dura-
tion 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
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 Direc-
tors should accept the Company’s accounts. The
Audit Committee regularly reports to the Board of
Directors on its decisions, assessments, findings and
proposes appropriate actions. The Audit Committee
generally meets at the same dates the Board of Direc-
tors meetings take place (usually 4 – 5 times per year),
although the Chairman may call meetings as often as
business requires.
In fiscal year 2020, the Audit Committee held 4 meet-
ings (Q1: 1 meeting, Q3: 2 meetings, and Q4: 1 meeting).
Due to the COVID-19 pandemic and related travel re-
strictions, 2 of these meetings were held as physical
meetings and 2 as video conference meetings. The
length of the physical meetings and video conferences
was approximately 2 to 3 hours in 2020. The auditors
attended 2 meetings via video conference. The Chair-
man of the Board of Directors usually participates as
a guest in the Audit Committee meetings. Members of
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the Global Executive Committee attended the meet-
ings or video conferences of the Audit Committee as
follows: Group CEO 4 meetings and the CFO (who acts
as Secretary of the Audit Committee) 4 meetings,
Global Chief Corporate Officer 1 meeting.
Nomination Committee
Members as of December 31, 2020: Jorge Born (Chair-
man Nomination Committee), Claire Chiang, Steven
Tadler, Lynda Tyler-Cagni.
The members of the Nomination Committee are all
non-executive and independent members of the
Board of Directors. Pursuant to item 14 of the Swiss
Code of Best Practice for Corporate Governance
(SCBP), an independent member is a non-executive
member, who has not been an executive member of
the Dufry Group in the last three years and has no or
comparatively minor 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 Nomination Committee assists the Board of
Directors in fulfilling its nomination related matters. It
is responsible for assuring the long-term planning of
appropriate appointments to the positions of the Group
CEO and the Board of Directors, reviewing the curric-
ulum vitae, credentials and experience of the candi-
dates proposed by the Board of Directors to fill vacan-
cies on the Board of Directors or for the position of the
Group CEO, making recommendations on Board com-
position and balance, presenting to the Board a pro-
posal of succession plan for the position of the Group
CEO at least once a year, and reviewing the adequacy
of the selection system and criteria used for the ap-
pointment of the members of the Global Executive
Committee. The Nomination Committee meets as of-
ten as business requires (usually 2 – 4 meetings per
year).
The Nomination Committee held 3 meetings (1 of which
by video conference) in the fiscal year 2020 that lasted
about 2 to 3 hours (Q1: 1 meeting, Q2: 1 meeting and Q3:
1 meeting). Members of the Global Executive Commit-
tee attended these meetings as follows: Group CEO 3
meetings.
Remuneration Committee
Members as of December 31, 2020: Heekyung Jo Min
(Chairwoman Remuneration Committee), Jorge Born,
Claire Chiang.
The members of the Remuneration Committee are all
non-executive and independent members of the Board
of Directors. Pursuant to item 14 of the Swiss Code of
Best Practice for Corporate Governance (SCBP), an
independent member is a non-executive member, who
has not been an executive member of the Dufry Group
in the last three years and has no or comparatively
minor business relations with the Company. The mem-
bers shall be appointed by the General Meeting of
Shareholders until the next Ordinary General Meeting
of Shareholders and be re-eligible.
The Remuneration Committee assists the Board of
Directors in fulfilling its remuneration related matters.
It is responsible for the review of the remuneration
system of the Company and for proposals in relation
thereto to the Board of Directors. The Remuneration
Committee makes recommendations regarding the
proposals of the Board of Directors in relation to the
maximum aggregate amount of compensation of the
Board and of the Global Executive Committee to be
submitted to the General Meeting of Shareholders of
the Company for approval, as well as in relation to the
remuneration package of the Group CEO and the
members of the Board. The Remuneration Committee
makes proposals on the grant of options or other se-
curities under any management incentive plan of the
Company, if any. The Remuneration Committee re-
views and recommends to the Board of Directors the
Remuneration Report. The Remuneration Committee
meets as often as business requires
(usually
4 meetings per year).
The Remuneration Committee held 4 meetings (2 of
which by video conferences) in the fiscal year 2020
that lasted about 2 to 3 hours (Q1: 1 meeting, Q3: 1
meeting, Q4: 2 meetings). The Chairman of the Board
of Directors usually participates as a guest in the
Remuneration Committee meetings. Members of the
Global Executive Committee attended these meetings
as follows: Group CEO 4 meetings.
Work method of the Board of Directors
As a rule, the Board of Directors meets about six to
seven 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 15 meet-
ings during fiscal year 2020. Due to the COVID-19 pan-
demic and related travel restrictions in fiscal year 2020,
the Board of Directors held 2 of these meetings as
physical meetings and 13 as video conference meetings.
These meetings of the Board of Directors lasted about
4 hours. The Chairman determines the agenda and
items to be discussed at the Board meetings. All mem-
bers of the Board of Directors can request to add fur-
ther items on the agenda.
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The Group CEO, the CFO, the Deputy Group CEO and
the Group General Counsel, also acting as Secretary
to the Board, usually attend the meetings of the Board
of Directors. Other members of the Global Executive
Committee may attend meetings of the Board of
Directors as and when required. Members of the Global
Executive Committee attended these meetings of the
Board of Directors in 2020 as follows: Group CEO 15
meetings, CFO 13 meetings, Deputy Group CEO 6
meetings, Group General Counsel 14 meetings and
Global Chief Corporate Officer 2 meetings.
The Board of Directors also engages specific advisors
to address specific matters when required. External
financial advisors attended pertinent portions of
4 meetings of the Board of Directors in 2020. The ex-
ternal Auditors attended 2 meetings of the Audit
Committee in 2020.
3.6 DEFINITION OF AREAS OF RESPONSIBILITY
The Board of Directors is the ultimate corporate body
of Dufry AG. It further represents the Company to-
wards third parties and shall manage all matters
which by law, the Articles of Incorporation or the
Board regulations have not been delegated to an-
other body of the Company.
In accordance with the Board regulations (“Organisa-
tionsreglement”), the Board of Directors has delegated
the operational management of the Company to the
Group CEO who is responsible for overall management
of the Dufry Group. The following responsibilities re-
main 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 members of the
committees installed by itself as well as the persons
entrusted with the management and representation
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 Arti-
cles of Incorporation, regulations and directives;
– Preparation of the business report, the remunera-
tion report and the General Meetings of Sharehold-
ers and to carry out the resolutions adopted by the
General 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 In-
corporation entailed thereby;
– Non-delegable and inalienable duties and powers of
the Board of Directors pursuant to the Swiss Merger
Act;
– To approve any non-operational or non-recurring
transaction not included in the annual budget and
exceeding the amount of CHF 10,000,000;
– To issue convertible debentures, debentures with
option rights or other financial market instruments;
– To approve the annual investment and operating
budgets of the Company and the Dufry Group;
– To approve the executive regulations promulgated
in accordance with the board regulations; and
– To propose an independent voting rights represen-
tative for election to the General Meeting of Share-
holders, and to appoint an independent voting rights
representative in the event of a vacancy.
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.
3.7 INFORMATION AND CONTROL INSTRUMENTS
VIS-À-VIS THE SENIOR MANAGEMENT
The Board of Directors ensures that it receives suffi-
cient 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 informa-
tion system that consists of financial statements,
performance indicators and risk management. In-
formation to management is provided on a regular
basis according to the cycles of the business: sales
on a weekly basis; income statement, cash manage-
ment and key performance indicators (KPI) includ-
ing customer, margins and investment informa-
tion, balance sheet and other financial statements
on a monthly basis. The management information
is prepared on a consolidated basis as well as on a
regional basis. Financial statements and key finan-
cial 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 Group CEO information
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concerning the course of business of the Company
and the Group and, with the authorization of the
Chairman, about specific matters.
– The Group CEO 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 Group
CEO. Apart from the meetings, the Group CEO
reports immediately any extraordinary event and
any change within the Company and within the
Dufry Group to the Chairman.
– For attendance of the members of the Global Exec-
utive Committee at meetings of the Board of Direc-
tors or meetings of the Board Committees please
refer to section “3.5 Internal organizational struc-
ture” above.
– The Audit Committee met 4 times in 2020 with man-
agement to review the business, better understand
laws, regulations and policies impacting the Dufry
Group and its business and support the manage-
ment in meeting the requirement and expectations
of stakeholders. In meetings of the Audit Committee,
the CFO acts as Secretary to the Committee. The
Auditors are invited to the meetings of the Audit
Committee and attended 2 meetings of the Audit
Committee in 2020. Among these meetings some or
part of them are also held without management.
– The Global Internal Audit department provides
independent risk-based and objective assurance
reviews, loss prevention advice, and risk exposure
analysis to group companies through three differ-
ent activities streams: Internal Audit, Investigations
and Enterprise Risk Management.
– Internal auditing is an independent function that pro-
vides objective assurance and consulting activity,
aiming to improve the organization’s operations. The
selection of Internal Audit reviews to be executed
during the year is based on specific methodology
throughout the Dufry Group and includes the
consideration of internal and external factors.
In fiscal year 2020, the Global Internal Audit had to
adjust to the circumstances created by the CO-
VID-19 pandemic and conducted over 20 reviews,
examining Headquarters activities, regional func-
tions and Distribution Centers. Regular follow-up is
performed to ensure that risk mitigation and con-
trol improvement measures are implemented on a
timely basis.
– The Global Investigations activity was created to
prevent losses and misappropriations within the
group. The day-to-day work is designed to leverage
profitability using advanced data mining and anti-
fraud techniques. Currently, validations are per-
formed monthly or bi-monthly for all group com-
panies and results are proven to provide valuable
information for loss prevention purposes. Addition-
ally, Dufry is continuously trying to use new data
mining techniques to establish validations that can
enhance the coverage and create a higher assur-
ance level over the key retail risks.
– Dufry has in place an Enterprise Risk Management
program which sets out the approach for assessing
compliance with: relevant laws, corporate policies
and procedures, tax regulations, agreements or
contracts and integrity policy, anticipating exter-
nally imposed guidelines and preventing losses.
The program is sponsored by the Global Executive
Committee and based on the concept of direct
stakeholder assurance feedback, and is distributed
among all operations and areas.
– All the results of these Global Internal Audit activi-
ties are communicated to key management in charge
and to the Group’s senior management, including all
the members of the Global Executive Committee on
an on-going basis, and also to the Audit Committee.
– Detailed information on the financial risk manage-
ment is provided in Notes 36 to 40 in the consoli-
dated financial statements of this Annual Report.
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4. GLOBAL EXECUTIVE COMMITTEE
4.1 MEMBERS OF THE GLOBAL
EXECUTIVE COMMITTEE
The following table sets forth the name and year of ap-
pointment of the respective members, followed by their
Curricula Vitae with a short description of each mem-
ber’s business experience, education and activities.
As of December 31, 2020, the Global Executive Com-
mittee comprised eight executives compared to ten
members as of December 31, 2019.
All agreements entered into with the members of the
Global Executive Committee are entered for an indefi-
nite period of time.
The Global Executive Committee under the control of
the Group CEO, conducts the operational management
of the Company pursuant to the Company’s board reg-
ulations. The Group CEO reports to the Board of Direc-
tors on a regular basis.
GLOBAL EXECUTIVE COMMITTEE AS OF DECEMBER 31, 2020
NAME
NATIONALITY
POSITION
Julián Díaz González
Yves Gerster
José Antonio Gea 1
Eugenio Andrades
Luis Marin
Pascal C. Duclos
Andrea Belardini
Roger Fordyce
Spanish
Swiss
Spanish
Spanish
Spanish
Swiss
Italian
Group Chief Executive Officer (Group CEO)
Chief Financial Officer (CFO)
Deputy Group Chief Executive Officer (Deputy Group CEO)
Chief Executive Officer Operations (CEOO)
Global Chief Corporate Officer (GCCO)
Group General Counsel (GGC)
Chief Commercial Officer (CCO)
American
Chief Executive Officer North America
1 J. A. Gea stepped down from his position of Deputy Group CEO and member
of the Global Executive Committee as per December 31, 2020.
ADDITIONAL GLOBAL EXECUTIVE COMMITTEE MEMBER AS OF JANUARY 1, 2021
NAME
NATIONALITY
POSITION
Salvatore Aricò
Italian
Chief Organization & Transformation Officer
GEC MEMBER
SINCE YEAR
2004
2019
2004
2016
2014
2005
2019
2019
GEC MEMBER
SINCE YEAR
2021
DIVERSITY OF THE GLOBAL EXECUTIVE COMMITTEE
AS OF JANUARY 1, 2021
12 % AMERICAN
38 % SPANISH
25 % ITALIAN
25 % SWISS
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4.2 EDUCATION, PROFESSIONAL BACKGROUND, OTHER ACTIVITIES AND VESTED INTERESTS
JULIÁN DÍAZ GONZÁLEZ
Group Chief Executive Officer,
born 1958, Spanish
YVES GERSTER
Chief Financial Officer, born 1978,
Swiss
JOSÉ ANTONIO GEA
Deputy Group Chief Executive
Officer, born 1963, Spanish
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, S.A. 1993 – 1997
Division Director at Aldeasa.
1997 – 2000 various managerial
and business positions at
Aeroboutiques de Mexico, S.A.
de C.V. and Deor, S.A. de C.V.
2000 – 2003 General Manager
of Latinoamericana Duty-Free,
S.A. de C.V. Since 2004 Chief
Executive Officer at Dufry AG.
Current Board Mandates
Dufry AG.
Education
Degree in Business Administration
& Finance, University of Basel.
Professional Background
1999 – 2003 Assistant Group
Treasurer at Danzas Management
AG. 2003 – 2006 Assistant Group
Treasurer at Bucher Industries AG.
November 2006 – 2019 Global
Head Group Treasury at Dufry
International AG. Since April
2019 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, S.A. Director
of Blue Cow Division (1993 – 1995).
1995 – 2003 various managerial
positions at Aldeasa. Left Aldeasa
as Director of Operations.
2004 – 2017 Global Chief Operating
Officer at Dufry AG. Since 2018
Deputy Group Chief Executive
Officer at Dufry AG until December
31, 2020.
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DUFRY ANNUAL REPORT 2020
260
EUGENIO ANDRADES
Chief Executive Officer Opera-
tions, born 1968, Spanish
LUIS MARIN
Global Chief Corporate Officer,
born 1971, Spanish
PASCAL C. DUCLOS
Group General Counsel,
born 1967, Swiss
Education
Degree in Economic Sciences
and Business Administration from
Universidad de Barcelona.
Professional Background
1995 – 1998 Auditor at Coopers &
Lybrand. 1998 – 2001 Financial
Controller at Derbi Motocicletas –
Nacional Motor S.A. 2001 – 2004
Head of Finance and Administra-
tion of Spanish subsidiaries of
Areas (member of the French
group Elior). Joined Dufry in 2004,
as Business Controlling Director
and since 2012 also responsible
for mergers and acquisitions. 2014
Appointed Chief Corporate
Officer. Since 2018 Global Chief
Corporate Officer at Dufry AG.
Education
Licence en droit from Geneva
University School of Law, L.L.M.
from Duke University 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 General
Counsel and Secretary to the
Board of Directors at Dufry AG.
Education
Degree in Mining Engineering at
Politécnica University of Madrid.
MS of Economics and Strategy
of Colorado School of Mines,
Colorado/USA.
Professional Background
Prior to 1996 Consultant at
McKinsey & Co and Carboex,
a subsidiary of Endesa. 1996 – 2001
Director of Strategy & Develop-
ment and Investor Relations at
Aldeasa. 2001 Chief Executive
Officer Jordan and Middle East
region at Aldeasa. 2002 – 2007
Director of Strategy & Develop-
ment and Investor Relations at
Aldeasa. 2007 – 2010 Commercial
Director and Operations Coordi-
nator at Aldeasa. 2011 – 2014 Chief
Commercial Officer at World Duty
Free Group. 2014 – 2015 Chief
Executive Officer at World Duty
Free Group. 2016 – 2017 Chief
Executive Officer Division UK,
Central and Eastern Europe at
Dufry AG. 2018 Chief Executive
Officer Operations and Strategy
at Dufry AG. January 2019 –
August 2020 Chief Executive
Officer Europe, Africa and Strategy
at Dufry AG. Since September
2020 Chief Executive Officer
Operations at Dufry AG.
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DUFRY ANNUAL REPORT 2020
ANDREA BELARDINI
Chief Commercial Officer,
born 1968, Italian
ROGER FORDYCE
Chief Executive Officer
North America, born 1955,
American
SALVATORE ARICÒ
Chief Organization & Transforma-
tion Officer, born 1971, Italian
Education
Bachelor of Arts in Psychology
from SUNY Stony Brook.
Education
Degree in Business and
Economics, University of Turin.
Professional Background
Prior to 1988 positions as Manager
at Dobbs /Aeroplex, WH Smith,
and Greenman Bros. 1988 Joined
Hudson Group as a District
Manager. 1992 – 1996 Vice President
of Operations at Hudson Group.
1996 – 2008 Senior Vice President
of Operations at Hudson Group.
2008 – 2018 Executive Vice Presi-
dent and Chief Operating Officer
at Hudson Group. Since January
2019 Chief Executive Officer
North America (Hudson Group)
at Dufry AG.
Professional Background
Prior to 2001 various managerial
positions at ING and Burgo Group.
2001 – 2005 Head of Organization
& Human Resources at Unilever
Italia. 2006 – 2009 Human Re-
sources Director at L’Oreal Italia.
2010 – 2014 Executive Vice Presi-
dent Human Resources at Nuance
Group. 2014 – 2020 Global Organi-
zation & Human Resources Direc-
tor at Dufry AG. Since January
2021 Chief Organization & Trans-
formation Officer at Dufry AG.
Education
Degree in Business and
Economics, University of Rome
(La Sapienza).
Professional Background
1991 – 1996 various positions
as Controller and Project Manager
at Carlson Wagonlit Travel.
1997 – 1999 Director of Operations
Italy at Carlson Wagonlit Travel.
1999 – 2000 Vice President
Operations South Europe at
Carlson Wagonlit Travel.
2000 – 2004 Executive Vice
President Strategy & Development
at Aeroporti di Roma. 2004 –
2009 Executive Vice President
Commercial Business Manage-
ment & Development at Aeroporti
di Roma. 2009 – 2015 Chief
Executive Officer Europe at
Nuance Group (since 2013 also
Global Chief Commercial Officer
at Nuance Group). 2016 – August
2020, Chief Executive Officer
Division Asia Pacific and Middle
East at Dufry AG. Since September
2020 Chief Commercial Officer
at Dufry AG.
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Other activities and vested interests
As of December 31, 2020, none of the members of the Global Executive Committee of Dufry AG has had other activities in governing and
supervisory bodies of, or advisory functions to, important Swiss or foreign organizations, institutions or foundations under private and
public law outside Dufry Group, or held any public or political office. The business Division North America was separately listed on the New
York Stock Exchange under the name of Hudson Ltd. until December 11, 2020. Roger Fordyce, the Chief Executive Officer North America
is also Chief Executive Officer and used to be a member of the Board of Directors of the now delisted Hudson Ltd. Julián Díaz González
is a member of the Board of Directors of the listed Dufry AG and used to be a member of the Board of Directors of the delisted Hudson
Ltd. too.
4.3 RULES IN THE ARTICLES OF INCORPORATION
REGARDING THE NUMBER OF PERMITTED
MANDATES OUTSIDE THE COMPANY
In accordance with Article 25 para. 1 of the Articles of
Incorporation, dated October 21, 2020, no member of
the Global Executive Committee may hold more than
two additional mandates in listed companies and four
additional mandates in non-listed companies. The fol-
lowing mandates are not subject to the limitations un-
der para. 1 of this Article:
a) mandates in companies which are controlled by the
Company or which control the Company;
b) mandates held at the request of the Company or any
company controlled by it. No member of the Global
Executive Committee may hold more than ten such
mandates; and
c) mandates in associations, charitable organizations,
foundations, trusts and employee welfare founda-
tions. No member of the Global Executive Commit-
tee may hold more than ten such mandates.
For definition of “mandate” please refer to section 3.3
above. For the website link regarding the Articles of
Incorporation please see page 267 of this Corporate
Governance Report.
4.4 MANAGEMENT CONTRACTS
Dufry AG does not have management contracts with
companies or natural persons not belonging to the
Group.
Changes in the Global Executive Committee
in fiscal year 2020 and as of January 1, 2021
On June 9, 2020, Dufry announced that it is adapting
its organization to the new business environment to
accelerate growth and support profitability during the
recovery phase of the economic crisis and beyond. The
new organizational structure, which became effective
September 1, 2020, included integration of Headquar-
ters and Divisions as well as re-grouping countries
within certain Divisions. The changes also involved a
new structure of the Global Executive Committee. The
number of Global Executive Committee members was
reduced from ten to eight members. As part of the or-
ganizational changes, Eugenio Andrades became Chief
Executive Officer Operations (previously CEO Division
Europe, Africa and Strategy) and Andrea Belardini was
appointed Chief Commercial Officer (previously CEO
Division Asia Pacific and Middle East). René Riedi (pre-
viously CEO Division Central and South America) and
Javier González (previously Chief Marketing and Digi-
tal Innovation Officer) left the Global Executive Com-
mittee as of September 1, 2020, but continue to sup-
port the Company in management capacities.
On December 31, 2020, José Antonio Gea (Deputy
Group CEO) stepped down from his position and from
the Global Executive Committee. As of January 1, 2021,
Salvatore Aricò joined the Global Executive Commit-
tee as Chief Organization & Transformation Officer. As
of January 1, 2021, the Global Executive Committee
continues to have eight members.
Details regarding the Curricula Vitae of Javier
González and René Riedi are available on pages 245/246
in the Annual Report 2019. The Annual Report 2019 can
be downloaded from the Company website under the
following link:
www.dufry.com/en/investors/ir-reports-presenta-
tions-and-publications
page section “Presentation of results and other pub-
lications – select Financial Reports”
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5. COMPENSATION, SHAREHOLDINGS
AND LOANS
5.1 CONTENT AND METHOD
OF DETERMINING THE COMPENSATION
AND SHAREHOLDING PROGRAMS
Detailed information of compensation, shareholdings
and loans to active and former members of the Board
of Directors and of the Global Executive Committee
in fiscal year 2020 is included in the Remuneration
Report on pages 268 to 286 of this Annual Report.
5.2 DISCLOSURE OF RULES IN THE ARTICLES
OF INCORPORATION REGARDING COMPENSATION
OF THE BOARD OF DIRECTORS AND OF THE
EXECUTIVE MANAGEMENT
For rules in the Articles of Incorporation regarding the
approval of compensation by the General Meeting of
Shareholders, the supplementary amount for changes
in the executive management as well as the general
compensation principles please refer to Articles
20 – 22 of the Articles of Incorporation. The Articles of
Incorporation do not contain any rules regarding
loans, credit facilities or post-employment benefits
for the members of the Board of Directors and exec-
utive management. The rules regarding agreements
with members of the Board of Directors and of the ex-
ecutive management in terms of duration and termi-
nation are stipulated in Article 23.
Dufry’s Articles of Incorporation are available on the
Company website www.dufry.com – section Investors –
Corporate Governance – Articles of Incorporation.
For the website link regarding the Articles of Incorpo-
ration please see page 267 of this Corporate Gover-
nance Report.
6. SHAREHOLDERS’ PARTICIPATION RIGHTS
For the website link regarding the Articles of Incorpo-
ration referred to in the following chapters please see
page 267 of this Corporate Governance Report.
6.1 GENERAL MEETINGS OF SHAREHOLDERS IN
2020 UNDER THE COVID-19 SITUATION
Due to the COVID-19 pandemic, both the Ordinary
General Meeting of Shareholders held on May 18, 2020,
as well as the Extraordinary General Meeting of Share-
holders held on October 6, 2020, were held without the
presence of shareholders. This was based on Article
6a of the Ordinance 2 and Article 27 of the Ordinance
3 issued by the Swiss Federal Council on measures to
prevent the spread of COVID-19. The shareholders
were able to exercise their rights at both General
Meetings of Shareholders through the Independent
Voting Rights Representative. The proxy and voting in-
struction forms could either be sent by mail or via
email in a scanned form, or shareholders were also
able to use the electronic voting platform (www.net-
vote.ch/dufry) for their voting instructions.
6.2 VOTING RIGHTS AND REPRESENTATION
Each share recorded as a 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
General Meeting of Shareholders by the independent
voting rights representative or any person who is au-
thorized 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
General Meeting of Shareholders and to exercise their
votes at the General Meeting of Shareholders. See
section 6.5 below.
Nominees are only entitled to represent registered
shares held by them at a General Meeting of Share-
holders if they are registered in the share register
in accordance with Article 5 para. 4 of the Articles of
Incorporation and if they hold a valid written proxy
granted by the beneficial owner of the registered
shares instructing the nominee how to vote at the
General Meeting of Shareholders. Shares held by a
nominee for which it is not able to produce such a
proxy count as not being represented at the General
Meeting of Shareholders.
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DUFRY ANNUAL REPORT 2020
6.3 THE INDEPENDENT VOTING RIGHTS
REPRESENTATIVE
In accordance with Article 10 para. 3 of the Articles of
Incorporation, dated October 21, 2020, the indepen-
dent voting rights representative shall be elected by
the General Meeting of Shareholders for a term of of-
fice extending until completion of the next Ordinary
General Meeting of Shareholders. Re-election is possi-
ble. If the Company does not have an independent vot-
ing rights representative, the Board of Directors shall
appoint the independent voting rights representative
for the next General Meeting of Shareholders.
The Company may also make arrangements for elec-
tronic voting (Article 11 para. 5). Resolutions passed by
electronic voting shall have the same effect as votes
by ballot.
The Ordinary General Meeting of Shareholders held on
May 18, 2020, re-elected Altenburger Ltd legal + tax,
Kuesnacht-Zurich, as the independent voting rights
representative until the completion of the Ordinary
General Meeting of Shareholders in 2021. Altenburger
Ltd legal + tax is independent from the Company and
has no further mandates for Dufry AG.
For the upcoming Ordinary General Meeting of Share-
holders on May 18, 2021, the Company will once more
enable its shareholders to send their voting instruc-
tions electronically to the independent voting rights
representative Altenburger Ltd legal + tax through the
platform: www.netvote.ch/dufry
The corresponding instructions regarding registration
and voting procedures on this electronic platform will
be sent to the shareholders together with the invitation
to the General Meeting of Shareholders.
6.4 QUORUMS
The General Meeting of Shareholders shall be duly
constituted irrespective of the number of sharehold-
ers present or of shares represented. Unless the law
or Articles of Incorporation provide for a qualified
majority, an absolute majority of the votes repre-
sented at a General Meeting of Shareholders is
required for the adoption of resolutions or for elec-
tions, with abstentions, blank and invalid votes hav-
ing the effect of “no” votes. The Chairman of the
Meeting shall have a casting vote.
A resolution of the General Meeting of Shareholders
passed by at least two thirds of the votes repre-
264
sented 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.
3.
the creation of shares with increased voting powers;
restrictions on the transfer of registered shares
and the removal of such restrictions;
restrictions on the exercise of the right to vote and
the removal of such restrictions;
4.
5. an authorized or conditional increase in share
6.
capital;
an increase in share capital through the conversion
of capital surplus, through a contribution 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. a modification of the eligibility requirements of the
members of the Board of Directors (Article 24 para. 1
of the Articles of Incorporation);
12. the dissolution of the Company;
13. other matters where statutory law provides for
a corresponding quorum.
6.5 CONVOCATION OF THE GENERAL MEETING
OF SHAREHOLDERS
The General 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 the aggregate not less than 10 % of the
share capital can request, in writing, that a General
Meeting of Shareholders be convened. Such request
must be submitted to the Board of Directors, specify-
ing the items and proposals to appear on the agenda.
The General Meeting of Shareholders shall be con-
vened 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.
6.6 AGENDA
The invitation for the General Meeting of Sharehold-
ers 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 de-
mand that the General Meeting of Shareholders be
called or that items be included in the agenda.
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DUFRY ANNUAL REPORT 2020
One or more shareholders with voting rights whose
combined holdings represent an aggregate nominal
value of at least CHF 1,000,000 may request that an
item be included in the agenda of a General Meeting of
Shareholders. Such a request must be made in writing
to the Board of Directors at the latest 60 days be-
fore the Meeting and shall specify the agenda items
and the proposals made.
6.7 REGISTRATION INTO THE SHARE REGISTER
The record date for the inscription of registered share-
holders into the share register in view of their partici-
pation in the General Meeting of Shareholders is de-
fined by the Board of Directors. It is usually around
2 weeks before the Meeting. Shareholders who dispose
of their registered shares before the General Meeting
of Shareholders are no longer entitled to vote with such
disposed shares.
7. CHANGE OF CONTROL
AND DEFENSE MEASURES
For the website link regarding the Articles of Incorpo-
ration referred to in the following chapters please see
page 267 of this Corporate Governance Report.
7.1 DUTY TO MAKE AN OFFER
An investor who acquires more than 33 ¹⁄³ % of all vot-
ing rights (directly, indirectly or in concert with third
parties) whether they are exercisable or not, is re-
quired to submit a takeover offer for all shares out-
standing (Article 135 Financial Market Infrastructure
Act, FMIA). The Articles of Incorporation of the Com-
pany contain neither an opting-out nor an opting-up
provision (Article 125 para. 4 FMIA).
7.2 CLAUSES ON CHANGE OF CONTROL
In case of change of control, the share-based payments
as disclosed in the Remuneration Report shall vest
immediately.
In case of change of control, all amounts drawn
under the USD 700,000,000, EUR 500,000,000 and
EUR 1,300,000,000 multicurrency term and revolving
credit facilities agreements shall become immediately
due and payable. Furthermore, upon the occurrence
of a change of control, Dufry may be required to repur-
chase the EUR 800,000,000 Senior Notes due 2024
and the EUR 750,000,000 Senior Notes due 2027 at a
purchase price equal to 101 % of their principal amount,
plus accrued and unpaid interest.
In addition, upon the occurrence of a change of con-
trol, under the CHF 350,000,000 Senior Convertible
Bonds due 2023 and the CHF 69,500,000 Mandatory
Convertible Notes, Dufry may be required, at the op-
tion of the holders, to redeem the bonds at 100 % of
the principal amount plus accrued and unpaid inter-
est.
According to Article 23 of the Articles of Incorporation,
employment and other agreements with the members
of the Global Executive Committee may be concluded
for a fixed term or for an indefinite term. Agreements
for a fixed term may have a maximum duration of one
year. Renewal is possible. Agreements for an indefinite
term may have a notice period of maximum twelve
months. The current contracts with the members of
the Global Executive Committee contain termination
periods of twelve months or less.
265
special emphasis on the following criteria: Global net-
work of the audit firm, professional competence of the
lead audit team, understanding of Dufry’s specific
business risks, personal independence of the lead au-
ditor and independence of the audit firm as a company,
coordination of the Statutory Auditors with the Audit
Committee and the Senior Management / Finance De-
partment 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
Statutory Auditors may perform. Within the scope
of the approved and budgeted amount, the Chief
Financial Officer can delegate non-audit related man-
dates to the Auditors.
The Audit Committee agrees the scope of and dis-
cusses the results of the external audit with the Stat-
utory Auditors. The Statutory Auditors prepare a com-
prehensive report addressed to the Board of Directors
once per year, informing them in detail on the results
of their audit. The Statutory Auditors also review the
interim consolidated financial statements before they
are released.
Representatives of the Statutory Auditors are regu-
larly invited to meetings of the Audit Committee,
namely to attend during those agenda points that
deal with accounting, financial reporting or auditing
matters.
In addition, the Audit Committee reviews regularly
the internal audit plan. Internal Audit reports are com-
municated to management in charge and the Com-
pany’s senior management on an on-going basis and
5 briefings were done to the Audit Committee in 2020.
During the fiscal year 2020, the Audit Committee held
4 meetings (2 of which by video conferences). The Stat-
utory Auditors were present at 2 of those meetings.
The Board of Directors has determined the rotation
interval for the Lead Auditor to be seven years, as de-
fined by the Swiss Code of Obligation; such rotation
occurred the last time in 2019.
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DUFRY ANNUAL REPORT 2020
8. AUDITORS
8.1 AUDITORS, DURATION OF MANDATE
AND TERM OF OFFICE OF THE LEAD AUDITOR
Pursuant to the Articles of Incorporation, the Stat-
utory Auditors shall be elected each year and may be
re-elected. Ernst & Young Ltd have been the Statutory
Auditors since 2004. Jolanda Dolente has been the
Lead Auditor since 2019.
For governance reasons, the Board of Directors has
decided in fiscal year 2020 to re-tender the audit man-
date, since Ernst & Young Ltd has acted as Statutory
Auditors of the Company for a period of 17 years. Af-
ter careful examination of several audit offers, the
Board of Directors, based on a recommendation by the
Audit Committee, has decided to propose to the Or-
dinary General Meeting of Shareholders on May 18,
2021, Deloitte as the new Statutory Auditors. The
Board of Directors would like to thank Ernst & Young
Ltd for the very long and good cooperation.
8.2 AUDITING FEE
The auditing fees for 2020 for the audit of the consol-
idated and statutory financial statements of Dufry AG
and its subsidiaries are CHF 6.0 million.
8.3 ADDITIONAL FEES
During 2020, Ernst & Young billed additional fees for au-
dit-related services (quarterly reviews and comfort let-
ters), agreed-upon procedures and tax services in the
amount of CHF 1.4 million, CHF 0.3 million and CHF 0.1 mil-
lion, respectively.
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 Statutory Auditors at least once
each year. Based on its review, the Audit Committee
recommends to the Board of Directors which exter-
nal Auditor should be proposed for election at the Gen-
eral Meeting of Shareholders. The decision regarding
this agenda item is then taken by the Board of Direc-
tors. As explained under section 8.1, the Board of Di-
rectors will propose to the Ordinary General Meeting
of Shareholders on May 18, 2021, to elect Deloitte as
new Statutory Auditors.
When evaluating the performance and independence
of the Statutory Auditors, the Audit Committee puts
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DUFRY ANNUAL REPORT 2020
9. INFORMATION POLICY
The official means of publication of the Company
is the Swiss Official Gazette of Commerce:
Dufry is committed to an open and transparent com-
munication with its shareholders, financial analysts,
potential investors, the media, customers, suppliers
and other interested parties.
Dufry AG used to publish its financial reports on a
quarterly basis in English. As of the 2020 financial
year, Dufry releases a quarterly trading statement
for Q1 and Q3 instead of publishing full financial re-
sults. Dufry will continue to publish full financial re-
sults for the half-year and full year periods. This
change was made to focus on a more meaningful
time period of six months, thus allowing to assess
the detailed performance of the Company with a re-
duced influence by quarterly volatility and by the
more pronounced seasonality caused by the IFRS 16
implementation. All financial reports and media re-
leases containing financial information continue to
be available on the Company website.
In addition, Dufry AG organizes presentations and con-
ference 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
www.shab.ch
Web-links regarding the SIX Exchange Regulation
push-/ pull-regulations concerning ad-hoc publicity
issues are:
www.dufry.com/en/media/press-releases
www.dufry.com/en/media/press-release-
registration-form
The current Articles of Incorporation are available
on Dufry’s website under:
www.dufry.com/en/investors/corporate-governance
page section “Featured downloads – Articles
of Incorporation”
The financial reports are available under:
www.dufry.com/en/investors/ir-reports-
presentations-and-publications
page section “Presentation of results and other
publications – select Financial Reports”
For the Investor Relations and Corporate Communi-
cations contacts, the Corporate Headquarter address
and a summary of anticipated key dates in 2021 please
refer to pages 288 / 289 of this Annual Report.
267
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DUFRY ANNUAL REPORT 2020
REMUNERATION
REPORT
DEAR SHARE-
HOLDERS
2020 turned out to be a most difficult year for many
companies and industries – and especially so for the
travel retail and tourism industry. As reported in detail
by our CEO and CFO in their respective letters, Dufry
suffered from the persistent spread of the COVID-19
pandemic and the related travel restrictions and lim-
itations. Despite these challenges, we were able to
quickly adapt our company to the new business envi-
ronment and to prepare ourselves for the recovery
phase. As I write this letter to you, we still face sub-
stantial restrictive measures across many countries
worldwide, but remain hopeful that COVID-19 will ebb
away during the course of 2021 and we will be able to
see a significant upturn in traveling and travel retail
again.
Remuneration Report and compensation approvals
at the Shareholders’ Meeting on May 18, 2020
In a consultative, non-binding vote during our ordinary
Shareholders’ Meeting 2020, the Remuneration Report
2019 was approved by 88.53 % of the votes repre-
sented. The Board of Directors’ proposal for the max-
imum aggregate amount of compensation for the
Board of CHF 8.5 million covering the period from the
AGM 2020 to the AGM 2021 was accepted with a ma-
jority of 89.39 %. The proposal for the maximum aggre-
gate amount of compensation for the Global Execu-
tive Committee of CHF 34.0 million for the financial
year 2021 was approved with 91.46 %.
As in previous years, Dufry will submit the current Re-
muneration Report 2020 to a consultative vote at our
ordinary Shareholders’ Meeting on May 18, 2021.
on May 18, 2020, the current three members, Jorge
Born, Claire Chiang and myself were elected individu-
ally with high approval rates of above 92 % for each
member.
The Remuneration Committee reviews the remunera-
tion system, including the bonus scheme and long-
term incentive plan (Performance Share Unit plan), on
an annual basis to ensure alignment with sharehold-
ers’ interests and best practices and to provide fair
and transparent management compensation. We use
competitive benchmarking including peer group com-
parisons and the service of external consultants.
In fiscal year 2020, the Remuneration Committee held
4 meetings, with an attendance ratio of 92 %.
Remuneration changes in 2020
The following changes were made in fiscal year 2020,
impacting the remuneration of the Board of Directors
and of the Global Executive Committee:
Board of Directors:
– 30 % reduction in Board and Committee fees for the
three-month period from April to June 2020. All
members of the Board of Directors agreed to and
participated in this voluntary fee reduction initia-
tive.
– The Board of Directors was expanded from nine to
ten members as of the Extraordinary Shareholders’
Meeting on October 6, 2020. Mr. Ranjan Sen was
elected as a new member to our Board of Directors
as of that date.
Remuneration Committee in 2020
Our Remuneration Committee consists of three non-
executive and independent members of the Board of
Directors, who are elected annually by the General
Meeting of Shareholders. At the General Meeting held
Global Executive Committee:
– New Global Executive Committee structure with
eight members (ten members previously) was imple-
mented in the context of the company reorganiza-
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DUFRY ANNUAL REPORT 2020
tion announced on June 9, 2020, and effective Sep-
tember 1, 2020.
– 30% salary reduction for the three-month period
from April to June 2020. This was also on a volun-
tary basis, and all members of the Global Executive
Committee agreed to and participated in this salary
reduction.
– For the annual bonus (short-term incentive), the key
performance indicators used in 2019 were replaced
with new targets to address the COVID-19 related
market environment and the respective restructur-
ing efforts of the company. The new key perfor-
mance indicators for the annual bonus in 2020 were
(i) Turnover and (ii) Agreements with airport author-
ities to get relief of the fixed minimal guaranteed
amount on sales (“MAG” Relief). Further, a special
bonus was approved to additionally reward excep-
tional individual performances by members of the
Global Executive Committee in 2020, as they have
been instrumental in rescuing the company and ini-
tiating innovative, forward-looking steps to set up
the company for emerging stronger post-COVID
and beyond.
– The long-term Performance Share Units (PSU) plan
for fiscal year 2020 was suspended and no PSU were
granted in the year under review. The existing PSU
plan will remain effective as such and resume as
soon as business performance recovery allows.
– With the delisting of Hudson Ltd. from the NY Stock
Exchange and the full re-integration of Hudson
Group into Dufry, adjustments were necessary to
the previous long-term incentive plans for Hudson
employees. Within the Global Executive Committee,
this only concerned the CEO North America and his
Hudson LTI plan holdings.
Shareholder dialogue and interactions during 2020
Dufry has a consistent and open dialogue with share-
holders, analysts, potential investors as well as with
the media through direct phone calls, emails, road-
shows, participation at brokers’ investor seminars,
dedicated Dufry investor days and one-to-one meet-
ings. Feedback received during these contacts is ana-
lyzed in detail and the results are taken into consider-
ation when evolving the Company strategy, ESG
engagement, corporate governance or remuneration
matters. In 2020, management and the investor rela-
tions team were in regular contact with shareholders
and investors through personal meetings, calls and
emails. Discussions with these stakeholders mainly in-
volved questions and explanations on the company re-
structuring efforts, our strategic initiatives and above
all the challenges that we face in the current business
environment.
The business year 2020 will be remembered as the
most challenging period in our company history so far.
We are proud that we have weathered this storm and
are prepared to take full advantage of the travel and
travel retail recovery with a leaner corporate struc-
ture and a strong balance sheet.
On behalf of the Remuneration Committee and the en-
tire Board of Directors, I would like to thank you, our
esteemed shareholders, for your continued contribu-
tions and trust in Dufry and in our long-term strategy.
Yours sincerely,
Heekyung Jo Min
Chairwoman of the Remuneration Committee
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INTRODUCTION
The worldwide COVID-19 pandemic and the related
travel restrictions brought the overall tourism, air
travel and travel retail industries to a near standstill
in March and April 2020. The negative impact contin-
ued with changing intensity throughout the business
year 2020 as well as the first months of 2021. Due to
the ongoing high dynamic of the pandemic and the low
visibility on the overall improvement of travel condi-
tions such as the lifting of travel restrictions, it is still
very difficult to provide an outlook for the 2021 evo-
lution of passenger flows. Therefore, a hopefully im-
proving, but still very challenging market environment
for the travel retail industry and for Dufry has to be
expected for 2021.
But, as challenging as the business environment might
be today, our long-term success depends on our abil-
ity to motivate, attract and retain outstanding individ-
uals who will ensure that Dufry remains a strong com-
pany, a reliable employer and a good working place for
our staff. In order to achieve these goals, we continue
to provide appropriate and competitive remuneration
to all our employees and to support their development
and working careers.
(Art. 24) as well as the maximum number of mandates
outside the company that a member of the Board of
Directors or of the Global Executive Committee may
hold (Art. 24 and 25). For the website link regarding the
Articles of Incorporation please see page 267 of the
Corporate Governance Report.
Based on Dufry’s Articles of Incorporation and in line
with the OaEC, the Board of Directors has the overall
responsibility for defining the personnel and remuner-
ation policy used for the entire Group, as well as the
general terms and conditions of employment for
members of the Global Executive Committee. It ap-
proves the individual compensation of the members of
the Board of Directors and the Global Executive Com-
mittee. As an exception, the individual compensation
of the Chief Executive Officer North America – until
December 11, 2020 separately listed as Hudson Ltd. –
was approved directly by the Board of Directors of
Hudson Ltd. In 2020, the Hudson Board of Directors
included Juan Carlos Torres Carretero as Chairman,
Julián Díaz González as Vice-Chairman, Andrés Hol-
zer Neumann as Member and Mary J. Steele Guilfoile
as Member (January 1 to May 18, 2020). The total size
of the Hudson Board was 8 Directors in fiscal year
2020 (2019: 9 Directors).
This Remuneration Report provides information on the
remuneration system and compensation paid to the
members of the Board of Directors and the Global
Executive Committee for fiscal year 2020. The Report
is prepared in accordance with Articles 13 – 17 of the
Ordinance against excessive Compensation (OaeC)
and item 5 of the Annex to the Corporate Governance
Directive (DCG) of SIX Exchange Regulation, govern-
ing disclosure of remuneration systems and compen-
sation paid to members of the Board of Directors and
the Global Executive Committee.
The Remuneration Report will be presented to the
General Meeting of Shareholders on May 18, 2021, for
a consultative vote.
Since January 1, 2015, the General Meeting of Share-
holders has to approve the proposal of the Board of
Directors in relation to the maximum aggregate
amounts of compensation of the Board of Directors
for the period until the next Ordinary General Meet-
ing of Shareholders and of the Global Executive Com-
mittee for the following fiscal year. The vote at the Or-
dinary General Meeting of Shareholders has binding
effect for these maximum aggregate amounts of com-
pensation. Thereafter, the approval of the individual
compensation to the members of the Board of Direc-
tors and of the Global Executive Committee (within the
limits approved by the General Meeting of Sharehold-
ers) is with the Board of Directors (for the CEO of Hud-
son Ltd. with the Board of Directors of Hudson Ltd.).
GOVERNANCE
Dufry’s Articles of Incorporation contain specific
rules concerning the election; the constitution and the
powers of the Remuneration Committee (Art. 17 and
18); the approval of compensation by the Meeting of
Shareholders (Art. 20); the supplementary amount in
case of changes in the Global Executive Committee
(Art. 21); the general compensation principles (Art. 22);
the agreements with members of the Board of Direc-
tors and of the Global Executive Committee (Art. 23);
the eligibility of members of the Board of Directors
The Remuneration Committee, which consists of three
non-executive independent members of the Board of
Directors, supports the Board of Directors in fulfilling
all remuneration related duties. The General Meeting
of Shareholders held on May 18, 2020, elected Ms.
Heekyung Jo Min and re-elected Ms. Claire Chiang and
Mr. Jorge Born (all individually elected) as members
of the Remuneration Committee for a term of office
until completion of the next Ordinary General Meeting
of Shareholders in 2021. Heekyung Jo Min has been
appointed as Chairwoman of the Remuneration Com-
mittee.
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COMMITTEES AND COMMITTEE MEMBERSHIPS
AS OF DECEMBER 31, 2020
MEMBER OF THE BOARD OF DIRECTORS
REMUNERATION COMMITTEE
AUDIT COMMITTEE
NOMINATION COMMITTEE
Juan Carlos Torres Carretero, Chairman
–
Heekyung Jo Min, Lead Independent Director
Committee Chairwoman
–
–
–
–
Jorge Born, Director
Claire Chiang, Director
Julián Díaz González, Director / Group CEO
Mary J. Steele Guilfoile, Director
Luis Maroto Camino, Director
Ranjan Sen, Director
Steven Tadler, Director
Lynda Tyler-Cagni, Director
Committee Member
Committee Chairman
Committee Chairman
Committee Member
–
–
–
–
–
–
–
–
Committee Member
Committee Member
–
Committee Member
–
–
–
–
Committee Member
Committee Member
–
Committee Member
For further details regarding the responsibilities of
the Remuneration Committee and the meetings held
in fiscal year 2020 please refer to section 3.5 Internal
Organizational Structure of the Corporate Governance
Report.
COMPENSATION COMPARISONS
Dufry reviews remuneration of the Global Executive
Committee through a competitive benchmarking to
ensure that total compensation levels remain compet-
itive to attract and retain talent. During the course of
2020, the Board of Directors consulted Pricewater-
house-Coopers AG (PwC) for its annual review on the
structure and level of executive compensation ar-
rangements, including short- and long-term compo-
nents. As part of this annual review process, the Com-
pany conducted a benchmark ana ly sis on compensation
levels for members of the Global Executive Commit-
tee using third party compensation survey data and
disclosed information from various companies. The
peer group for compensation benchmarking has been
selected considering Swiss listed companies and also
factoring in geographic spread, demographic size of
employee base and complexity of the industry. The
Company continually reviews its approach to market
benchmarks to ensure they remain relevant. The list
of companies in 2020 included ABB, Adecco, Barry
Callebaut, Clariant, Ems-Chemie, Geberit, Georg
Fischer, Lafarge Holcim, Lindt, Lonza, Nestlé, Novartis,
Richemont, Roche, Sika, Sonova, Straumann, Swatch
and Swisscom. The peers are the same as in 2019 and
have not been changed as Dufry considers the se-
lected comparison criteria still valid, independently
from the temporary impact of the COVID-19 pan-
demic.
Other divisions of PwC provided services as Tax and HR
Advisors for other internal projects.
ADJUSTMENTS TO THE REMUNERATION SYSTEM
IN 2020, MAINLY DUE TO THE COVID-19 RELATED
MARKET CONDITIONS
The following changes were made, impacting remu-
neration of the Board of Directors and of the Global
Executive Committee in fiscal year 2020:
Board of Directors:
– Board fee reduction initiative: A 30 % reduction in the
Board and Committee fees was implemented for the
three month period from April to June 2020. This was
on a voluntary basis and all members of the Board of
Directors agreed to and participated in this fee re-
duction.
– Expansion of the Board of Directors from nine to ten
members, in order to reflect appropriate represen-
tation of Advent International Corp., which is among
the company’s largest shareholders with a holding of
11.4 % in voting rights. The election of Mr. Ranjan Sen
as new member of the Board of Directors was effec-
tive as of the date of the Extraordinary General Meet-
ing on October 6, 2020.
Global Executive Committee:
– New Global Executive Committee structure with
reduced number of members (eight vs. ten mem-
bers previously), implemented in the context of
the company reorganization and effective Sep-
tember 1, 2020.
– Basic salary reduction initiative: A 30 % salary re-
duction was implemented for the three month pe-
riod from April to June 2020. This was on a volun-
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DUFRY ANNUAL REPORT 2020
tary basis and all members of the Global Executive
Committee agreed to and participated in this sal-
ary reduction.
– Short-term incentive: For the annual bonus, Du-
fry has replaced the previous key performance in-
dicators (Organic Growth, Adjusted Operating
Profit and Equity Free Cash Flow), which were used
in the financial year 2019 with entirely changed
targets to address the new, COVID-19 related
market environment and the respective necessary
measures to safeguard the resilience of the com-
pany and secure a setup for recovery. The new key
performance indicators for the annual bonus in fi-
nancial year 2020 were (i) Turnover and (ii) Agree-
ments with airport authorities to get relief of the
fixed minimal guaranteed amount on sales (“MAG”
Relief - Minimum Agreed Guarantee Relief). Fur-
ther, a special bonus was approved to additionally
reward exceptional individual performances by
members of the Global Executive Committee in
2020, as they have been instrumental in rescuing
the company and initiating innovative, forward-
looking steps to set up the company for emerging
stronger post-COVID and beyond. For more details
on the short-term incentive see corresponding sec-
tion on page 277.
– Long-term incentive: Suspension of the long-term
Performance Share Units (PSU) plan for the fiscal
year 2020. No PSU were granted in fiscal year
2020. The existing PSU plan will remain effective
as such and be resumed as soon as the recovery
of the business performance allows.
– Remuneration of the CEO North America (Hudson
Ltd.), who is a member of the Global Executive
Committee: Upon the closing of the merger trans-
action whereby Dufry acquired all remaining eq-
uity interests in Hudson Ltd. which it did not al-
ready own for USD 7.70 in cash per Hudson Class
A share (transaction closed on December 1, 2020)
and the subsequent delisting of Hudson Ltd. from
the New York Stock Exchange, the Hudson long-
term incentive plan ceased to exist. Consequently,
the plan participants receive a fixed price of
USD 7.70 per share for their Restricted Share
Units (RSU) and Performance Share Units (PSU).
The number of shares underlying each PSU was
calculated based on the achieved results against
the performance targets of the Hudson PSU. For
further information see Note 25.2 in the consoli-
dated financial statements. Within the Global Ex-
ecutive Committee, this only concerned the CEO
North America and his Hudson LTI plan holdings.
REMUNERATION OF THE MEMBERS
OF THE BOARD OF DIRECTORS
REMUNERATION SYSTEM
The remuneration of the members of the Board of
Directors is set to attract and retain highly qualified
individuals to serve on the Board of Directors. The Board
of Directors determines the amount of remuneration
of its members, taking into account their responsibil-
ities, experience and the time they invest in their ac-
tivity as members of the Board of Directors.
The total compensation of the members of the Board
of Directors, except for the Group Chief Executive Of-
ficer who does not receive any compensation in rela-
tion to his position as member of the Board, included
the following elements in fiscal year 2020:
– Fixed fee in cash as members of the Board of Direc-
tors and members of Board Committees;
– For one member (H. J. Min) the fixed fees for her re-
sponsibilities as Lead Independent Director and her
responsibilities to oversee Dufry’s ESG (environ-
mental, social, governance) initiatives;
– For one member (A. Holzer Neumann) the fixed fee
in cash as member of the Board of Directors of Hud-
son Ltd. (listed subsidiary) for the period January 1
POSITION / RESPONSIBILITY
Chairman
Lead Independent Director 2
Member of the Board of Directors 3
Member responsible for the oversight on Dufry’s ESG initiatives 2
Member of the Remuneration Committee
Member of the Audit Committee
Member of the Nomination Committee
REDUCED ANNUAL FEE 2020 1
IN THOUSANDS OF CHF
ANNUAL FEE 2020
IN THOUSANDS OF CHF
ANNUAL FEE 2019
IN THOUSANDS OF CHF
1,859.7
2,010.5
92.5
231.3
92.5
46.3
46.3
46.3
100.0
250.0
100.0
50.0
50.0
50.0
2,010.5
100.0
250.0
100.0
50.0
50.0
50.0
1 Reduced annual fee 2020 reflects the voluntary 30 % fee reduction for the second quarter period April to June 2020.
2 The fees mentioned for the position of Lead Independent Director and Supervision of ESG strategy are in addition to the usual fee as member of
the Board of Directors (same as fees as a member of a Committee).
3 The Group CEO does not receive additional compensation as a Board member.
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DUFRY ANNUAL REPORT 2020
to May 18, 2020. Mr. Holzer Neumann stepped down
from the Board of Directors of Dufry AG on May 18,
2020, but remained a member of the Board of Direc-
tors at Hudson Ltd. until the merger;
– Mandatory social security contributions.
paid in cash). With the exception of the variable com-
pensation of the Chairman and of the Group CEO (each
in their capacity as Chairman and Group Chief Execu-
tive Officer), the compensation of the members of the
Board of Directors is not tied to particular targets.
In addition, the Chairman of the Board of Directors, who
is traditionally intensely involved with the Company’s
management under normal circumstances, and even
more so in the COVID-year 2020, and is considered an
executive Chairman, may also receive a performance
bonus. In 2020, the Chairman had a pivotal role in Du-
fry’s efforts to raise over CHF 1.9 billion in liquidity, to
broaden its shareholder base and in executing the suc-
cessful Hudson merger. Consequently, his 2020 bonus
was based on three metrics: Liquidity improvement, in-
corporation of additional long-term shareholders and
merger of Hudson Ltd. (2019: bonus based on the bud-
geted Adjusted EPS for fiscal year 2019, which was a
target of CHF 7.67 based on the new calculation of Ad-
justed EPS due to the adoption of IFRS 16 in 2019). The
achievements regarding these three targets are: (i) A
substantial improvement of Dufry’s financial position
by more than CHF 1.9 billion in 2020 through a series
of capital market transactions including the place-
ment of shares, a capital increase through rights is-
sues, the launch of two convertible bonds and newly
agreed credit facilities and government-backed loans.
(ii) Two new strategic and long-term shareholders with
very significant participations, Advent International
with 11.4 % and Alibaba Group with 8.7 % (including
mandatory convertible bonds) of outstanding shares.
(iii) The successful closing of the merger transaction
with Hudson Ltd. and the subsequent delisting of Hud-
son in the fourth quarter of 2020, only four months af-
ter the announcement. The Hudson merger reduces
organizational complexity and strengthens synergies
with the important North America business and con-
tributes to material structural savings of CHF 400 mil-
lion for the Dufry Group.
The bonus for the Chairman has a minimum threshold
of 75 % of the target that must be achieved otherwise
no bonus will be paid and a maximum threshold of
130 % of the target. The bonus for fiscal year 2020 is
capped at 130 % of the target bonus. The amount of
the target bonus for fiscal year 2020 was set at 100 %
of the Chairman’s annual board fee (2019: target bo-
nus was also set at 100 % of Chairman’s board fee; with
the cap at 130 %). Since fiscal year 2019, the Chairman’s
bonus can be paid either in cash or in an equivalent
number of shares allocated to him or as a mix between
the two compensation instruments. The Board of Di-
rectors decided that the bonus for the Chairman for
fiscal year 2020 will be paid in cash (2019: bonus also
Extraordinary assignments or work which a member
of the Board of Directors performs for the Company
outside of his / her activity as a Board member can be
specifically remunerated and has to be approved by
the Board of Directors. No extraordinary assignments
outside Board activities have taken place in fiscal year
2020 (2019: Mr. Andrés Holzer Neumann received an
additional fee of TCHF 150 as compensation for signif-
icant additional time spent on further developing the
Company’s retail concepts and new activities).
The Remuneration Committee discusses the annual
compensation (board fees, committee fees, target bo-
nus for Chairman) in separate meetings. The Chairman
and the Group CEO usually participate as guests in
these meetings without any voting rights. They leave
the room, when their own compensation is discussed
by the Remuneration Committee. The Remuneration
Committee then makes proposals in relation to the
compensation of each Board member to the entire
Board of Directors. Thereafter, the Board of Directors
decides collectively on the compensation of its mem-
bers once per year, with all Board members being pres-
ent during such meeting (Group CEO compensation
reviewed and decided separately as described in the
section “Remuneration of the members of the Global
Executive Committee”).
CHANGES IN THE REMUNERATION SYSTEM
IN 2020 – BOARD OF DIRECTORS
– Board fee reduction initiative: A 30 % reduction in
the Board and Committee fees was implemented for
the three month period from April to June 2020.
This was on a voluntary basis and all members of the
Board of Directors agreed to and participated in this
fee reduction. The Board fees in general, prior to this
specific reduction initiative were left unchanged
compared to fiscal year 2019.
SUMMARY OF REMUNERATION IN
FISCAL YEARS 2020 AND 2019
For 2020, the members of the Board of Directors (ex-
cept the Chairman and the Group CEO) received a
Board membership fee of TCHF 231.3 in cash and an
additional TCHF 46.3 in cash for each membership in a
Board Committee. The level of the Board fees (prior to
the previously mentioned 30 % voluntary fee reduc-
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COMPENSATION OF THE BOARD OF DIRECTORS (AUDITED)
NAME, FUNCTION
IN THOUSANDS OF CHF
REMUNERATION
POST-
EMPLOYMENT
BENEFITS 9
Juan Carlos Torres Carretero, Chairman 1, 4
Heekyung Jo Min, Independent Lead Director 2, 4
Jorge Born, Director
Claire Chiang, Director
Julián Díaz González, Director and CEO 3, 4
Mary J. Steele Guilfoile, Director 4, 5
Luis Maroto Camino, Director 6
Ranjan Sen, Director 7
Steven Tadler, Director
Lynda Tyler-Cagni, Director
4,382.9
473.1
370.0
323.8
–
167.7
277.5
59.1
323.8
295.2
97,3
–
22.3
16.2
–
–
16.9
–
–
5.3
2020
TOTAL
REMUNERATION
4,480.2
3,845.4
473.1
392.3
340.0
–
167.7
294.4
59.1
323.8
300.5
497.9
400.0
321.7
–
–
182.8
–
321.7
308.5
Subtotal for active members as at Dec 31
6,673.1
158.0
6,831.1
5,878.0
Andrés Holzer Neumann, Director 4, 8
Total
172.0
6,845.1
4.2
162.2
176.2
7,007.3
400.0
6,278.0
POST-
EMPLOYMENT
BENEFITS 9
196.1
–
23.4
15.6
–
–
10.8
–
–
18.2
264.1
19.6
283.7
2019
TOTAL
4,041.5
497.9
423.4
337.3
–
–
193.6
–
321.7
326.7
6,142.1
419.6
6,561.7
1 The remuneration for Mr. Torres Carretero includes Board fee of CHF 1.86 million and bonus of CHF 2.52 million
(2019: CHF 2.01 million Board fee and CHF 1.83 million bonus).
2 Ms. Heekyung Jo Min was appointed as Lead Independent Director on July 25, 2019. In addition, she is responsible
for the oversight of Dufry’s ESG initiatives. The fees for these two responsibilities started to get paid as of November 2019.
3 Mr. Díaz González (Group CEO) does not receive any additional compensation as Board member.
4 In fiscal year 2020, the following Dufry Board members also served as members of the Board of Directors of Hudson Ltd.:
Juan Carlos Torres Carretero, Julián Díaz González, Andrés Holzer Neumann, and Mary J. Steele Guilfoile (prior to her election as
member of the Dufry Board of Directors on May 18, 2020. With her election to the Dufry Board of Directors, she stepped down
from the Hudson Board of Directors). Andrés Holzer Neumann received a Board fee of USD 0.09 million in 2020 as a member of the
Board of Directors of Hudson Ltd. for the period January 1 to May 18, 2020 (May 18 is the date when he stepped down from the Board
of Directors of Dufry AG). In fiscal year 2019, the Dufry Board members also serving on the Board of Directors of Hudson Ltd. included
Juan Carlos Torres Carretero, Julián Díaz González, Heekyung Jo Min (January to October 2019) and Andrés Holzer Neumann (as of
December 18, 2019). Heekyung Jo Min received a Board fee of USD 0.17 million in 2019 for the period January to October for her services
as member of the Board of Hudson Ltd. Juan Carlos Torres Carretero, Julián Díaz González and Andrés Holzer Neumann did not receive
additional fees for their services as Hudson Board members in fiscal year 2019.
5 Director since AGM on May 18, 2020.
6 Director since AGM on May 9, 2019.
7 Director since EGM on October 6, 2020.
8 Director until AGM on May 18, 2020.
9 Amount includes mandatory employer social security contributions.
tion in the period April to June 2020) remained un-
changed for the last six years, i.e. since the Ordinary
General Meeting of Shareholders in April 2015 (see
also table with normal and reduced annual fee 2020
on page 272). For the responsibilities of Lead Indepen-
dent Director and for the oversight on Dufry’s ESG
strategy, both in place since fiscal year 2019, the Board
of Directors set those fees at TCHF 100 each in 2019,
and these fees remained unchanged in fiscal year
2020. The pay-out of these fees in 2020 (reflecting the
30 % voluntary reduction for the period April to June
2020) was TCHF 92.5 for each of the fees.
The Board fee for the Chairman position was last in-
creased in 2017 and remained unchanged since then.
The pay-out of the reduced fee (reflecting the 30 %
voluntary reduction for the period April to June 2020)
amounted to TCHF 1,859.7 in 2020. The Chairman of
the Board of Directors will receive a bonus of
TCHF 2,523.2 for fiscal year 2020, to be paid in cash
(2019: bonus in cash of TCHF 1,834.9). The bonus
amounts to 126 % of the Chairman’s annual board fee
(2019: 91 % of board fee). For further details please re-
fer to the remuneration table on this page.
On December 31, 2020, the Board of Directors com-
prised 10 members (December 31, 2019: 9 Board mem-
bers). For fiscal years 2020 and 2019, covering the
period between January 1 and December 31, the remu-
neration for the members of the Board of Directors is
shown in the remuneration table on this page.
The remuneration difference compared with the previ-
ous year is mainly due to the changes in the total num-
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DUFRY ANNUAL REPORT 2020
RECONCILIATION BETWEEN REPORTED BOARD COMPENSATION AND
AMOUNT APPROVED BY SHAREHOLDERS AT AGM
BOARD
COMPENSATION
FOR FISCAL YEAR
2020 AS
REPORTED
LESS BOARD
COMPENSATION
TO BE ACCRUED
FOR THE PERIOD
JANUARY 1, 2020
TO THE AGM
ON MAY 18, 2020
(4.5 MONTHS)
PLUS BOARD
COMPENSATION
TO BE ACCRUED
FOR THE PERIOD
JANUARY 1, 2021
TO THE AGM
ON MAY 18, 2021
(4.5 MONTHS)
TOTAL BOARD
COMPENSATION
FOR THE PERIOD
FROM AGM 2020
TO AGM 2021
TOTAL
MAXIMUM
AMOUNT AS
APPROVED BY
SHAREHOLDERS
AT THE AGM 2020
FOR PERIOD OF
AGM 2020 TO
AGM 2021
COMPEN-
SATION
RATIO
IN THOUSANDS OF CHF
Total Board of Directors
7,007.3
(1,674.6)
1,847.1
7,179.8
8,500.0
84.5 %
ber of Board members and the composition of the Board
of Directors and of its Committees, the reduction of the
Board and Committee fees due to the fee reduction ini-
tiative in 2020 as well as the different amount of bonus
for the Chairman.
REMUNERATION OF THE MEMBERS
OF THE GLOBAL EXECUTIVE COMMITTEE
NEW COMPOSITION OF THE GLOBAL
EXECUTIVE COMMITTEE WITH 8 MEMBERS
AS OF SEPTEMBER 1, 2020
OTHER COMPENSATION, LOANS
OR GUARANTEES (AUDITED)
For the years 2020 and 2019, no other compensation
(other than mentioned in the table on page 274) was
paid directly or indirectly to current or former mem-
bers of the Board of Directors, or to their related par-
ties. There are also no loans or guarantees received
or provided to these Board members, nor to their re-
lated parties.
RECONCILIATION BETWEEN REPORTED BOARD
COMPENSATION FOR FISCAL YEAR 2020 AND THE
AMOUNT APPROVED BY THE SHAREHOLDERS AT
THE AGM 2020 UNTIL THE AGM 2021
The Ordinary General Meeting of Shareholders held on
May 18, 2020 approved a maximum aggregate amount
of compensation of the Board of Directors for the
term of office from the AGM 2020 to the AGM 2021 of
CHF 8.5 million (CHF 8.5 million from AGM 2019 to AGM
2020). The table on this page shows the reconciliation
between the reported Board compensation for fiscal
year 2020 and the amount approved by the sharehold-
ers at the AGM 2020.
On June 9, 2020, Dufry announced a new organiza-
tional structure, effective as of September 1, 2020,
that allowed the company to adapt to the new busi-
ness environment, adding flexibility, agility and accel-
erating decision-making processes. The main changes
were:
– Integration of headquarters and divisions and elim-
inating divisional management levels
– Simplifying first management level by grouping re-
lated functions
– Introducing new, reduced Global Executive Com-
mittee with 8 members (compared to 10 members
prior to September 1, 2020)
As of September 1, 2020, and until December 31, 2020,
the Global Executive Committee consisted of eight
members (previously ten members). These members
were the Group Chief Executive Officer, Deputy Group
Chief Executive Officer, Chief Financial Officer, Chief
Executive Officer Operations, Chief Executive Officer
North America, Chief Commercial Officer, Chief Cor-
porate Officer and the Group General Counsel. The
table showing the remuneration to the Global Execu-
tive Committee on page 281 also includes the former
two positions of Chief Executive Officer Central and
South America and Chief Marketing and Innovation
Officer (remuneration for these two members reflects
period January 1 to August 31, 2020).
REMUNERATION SYSTEM
Dufry aims to provide internationally competitive
compensation to the members of its Global Executive
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DUFRY ANNUAL REPORT 2020
Committee (GEC) that reflects the experience and the
area of responsibility of each individual member. The
members of the Global Executive Committee receive
compensation packages which consist of a fixed basic
salary in cash, social benefits, allowances in kind, a
performance related bonus and share-based incentive
plans (as an exception, the share-based incentive plan
(grant of Performance Share Units) was suspended for
the fiscal year 2020 period).
The CEO of the Division North America, Hudson Ltd.,
which was separately listed on the New York Stock Ex-
change (merger transaction with Dufry closed on De-
cember 1, 2020, with delisting of Hudson Ltd. on De-
cember 11, 2020), is a member of the Global Executive
Committee, but participated in terms of his compen-
sation packages (including the performance related
bonus and long-term incentive plans) in a separate re-
muneration system and incentive plan for members of
the Hudson Ltd. management.
All other members of the Global Executive Committee
participate in the Dufry remuneration system and in-
centive plans.
BASIC SALARY
The annual basic salary is the fixed compensation re-
flecting the scope and key areas of responsibilities of
the position, the skills required to perform the role and
the experience and competencies of the individual
person. The basic salary is reviewed annually.
Generally, salary increases for members of the Global
Executive Committee are usually done in line with in-
creases for the broader workforce. In case of promo-
tions, typically a more substantial salary increase may
be warranted. Nevertheless, a newly promoted GEC
member would get a base salary at the lower end of
the expected range with a view to get above-average
increases alongside his growing experience and with a
view to get between the median and the upper half of
REMUNERATION COMPONENTS
Basic salary
Bonus 1
INSTRUMENT
PURPOSE
INFLUENCED BY
– Basic compensation
– Paid in cash on monthly basis
– To attract and retain
management
– Position
– Competitive market
environment
– Experience of the person
– Annual bonus
– Usually paid in cash
– Pay for performance
– Achievement of financial
Share-based incentives
PSU 1
– Performance Share Units (PSU)
if any, vesting conditional on
performance
– Rewarding long-term
performance
– Aligning compensation
to shareholder interests
results of the Group
– Fiscal year 2020: The long-term
PSU plan was suspended for
the fiscal year 2020 period.
No PSU were granted in 2020.
– Fiscal year 2019: PSU Award
2019 with Cumulative Adjusted
EPS in CHF over 3 years (2019,
2020 and 2021). Vesting in
2022, if vesting conditions are
reached.
– Fiscal year 2018: PSU Award
2018 with Cumulation of Cash
EPS in CHF for 2018 and
Adjusted EPS in CHF for the
years 2019 and 2020. Will not
vest in 2021, as vesting
conditions were not reached.
Other indirect benefits,
post-employment benefits
– Allowances in kind
– Social pension and insurance
– To attract and retain
management
– Market practice and position
– Legal requirements of social
prerequisites
benefits
1 For the CEO North America (Hudson Ltd.) the bonus and share-based incentives were based on targets of Hudson Ltd.
The previously existing share-based incentive scheme of Hudson included Restricted Share Units (RSU) and Performance Share Units (PSU).
With Dufry acquiring all remaining equity interests in Hudson Ltd. (transaction closed on December 1, 2020) and the subsequent delisting of
Hudson Ltd. (on December 11, 2020), the Hudson long-term incentive plan ceased to exist.
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DUFRY ANNUAL REPORT 2020
the target range within 3 – 5 years. Also, higher salary
increases may be warranted when there is an increase
in responsibilities.
ANNUAL BONUS
The annual bonus is usually defined once per year and
is based on a bonus target expressed as a percentage
of the annual basic salary. The target bonus corre-
sponds to the bonus award at 100 % achievement of
the pre-defined objectives. Each member of the Global
Executive Committee has its own bonus. In the event
that an executive reaches the objectives in full, the bo-
nus pay-out will correspond to the targeted level. If
one or more objectives are not reached, the bonus will
be reduced. The minimum pay-out achievement thres-
hold is 75 % of the target, with the maximum pay-out
cap at 130 %. The effective bonus pay-out can be be-
tween a minimum of zero and the maximum capped
amount of 130 % of the target bonus for all members
of the Global Executive Committee, including the
Group CEO.
The targets for the annual bonus are set to be stretch-
ing but achievable and focus on key operational met-
rics and metrics related to key strategic initiatives. The
Remuneration Committee considers the financial tar-
gets for the annual bonus to be commercially sensi-
tive and that it would be detrimental to disclose de-
tails. The annual bonus is usually paid out in cash in the
second quarter of the following year.
In fiscal year 2020, travel and travel retail were among
the most damaged sectors worldwide due to COVID-19,
with especially international travel practically non-ex-
istent throughout the year. The company had been in
survival mode at the beginning of the crisis and the
Board of Directors had to ensure that the members of
the Global Executive Committee who were instrumen-
tal for rescuing and transforming Dufry will remain
with the company and are fully committed. As a result,
the Board of Directors, upon proposal by the Remu-
neration Committee, decided in Q2, 2020, to set the
targets for the Global Executive Committee mainly on
two major components to ensure focus on securing
the company’s resilience and driving performance for
recovery. These two elements include in detail:
– Turnover with 50 % weighting;
– MAG relief (Agreements with airport authorities to
get relief of the fixed minimal guaranteed amount
on sales) with 50 % weighting;
– The market and pandemic scenarios used to set the
targets for these two elements considered external
factors such as pace of recovery from the pan-
demic, travel and quarantine restrictions, and the
potential agreements on MAG relief with airports;
– For the CEO North America, similar objectives were
based on Hudson results only.
In the previous year 2019, the bonus was mainly related
to measures regarding financial performance with the
relevant weightings for the members of the Global Ex-
ecutive Committee being:
– 40 % Organic Growth (Like-for-like growth + Net
new concessions);
– 20 % Adjusted Operating Profit (Operating profit +
amortization of concession rights + impairment of
concession rights + transaction expenses); and
– 40 % Equity Free Cash Flow (Free Cash Flow - Inter-
est paid - Cash Flow related to minorities +/- Other
financing items) of the Dufry Group results.
– For the Division CEOs it was 40 % Organic Growth
and 20 % Adjusted Operating Profit of their respec-
tive Division and 40 % Equity Free Cash Flow of Dufry
Group. For the CEO North America, the objectives
were based on Hudson results only, with objectives
PERFORMANCE OBJECTIVES FOR ANNUAL BONUS 1
FISCAL YEAR 2020
FISCAL YEAR 2019
OBJECTIVES FOR THE GLOBAL EXECUTIVE COMMITTEE 2
OBJECTIVES FOR THE GLOBAL EXECUTIVE COMMITTEE
50 % Turnover
50 % MAG Relief
40 % Organic Growth
20 % Adjusted Operating Profit
Special bonus for exceptional, individual performance
40 % Equity Free Cash Flow
THRESHOLD LEVELS
THRESHOLD LEVELS
75 % Minimum pay-out achievement level
75 % Minimum pay-out achievement level
130 % Maximum pay-out cap
130 % Maximum pay-out cap
1 For a glossary of the key performance indicators and other performance measures please refer to page 239 of this Annual Report.
2 The two objectives in 2020 were relevant for all members of the Global Executive Committee, except the CEO North America
(HudsonLtd.). For him, the metrics in 2020 were specific targets on Turnover and MAG relief of Hudson Ltd.
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DUFRY ANNUAL REPORT 2020
being 40 % Organic Growth, 35 % Adjusted EBITDA
and 25 % Adjusted EPS.
For fiscal year 2020, the initial target bonus amounted
to 110 % of the target basic salary (basic salary prior
to the 30 % voluntary salary reduction in the period
April to June 2020) for the Group CEO and to between
70 % and 105 % of the target basic salary for the other
members of the Global Executive Committee (fiscal
year 2019: 100 % for the Group CEO and between 50 %
and 105 % for the other members of the Global Exec-
utive Committee). The achievement ratio regarding the
Group results’ targets of the two elements Turnover
and MAG relief combined was 113.5 % for fiscal year
2020 (2019: achievement ratio for the elements Organic
Growth, Adjusted Operating Profit and Equity Free
Cash Flow combined was 53 %). The threshold limits
were 75 % and 130 % for each metric.
Additionally, the Board of Directors, upon proposal of
the Remuneration Committee, approved a special bo-
nus payment in 2020 to reward exceptional, individual
performance and to also guarantee the continuity and
commitment of relevant members of the Global Exec-
utive Committee who are essential to overcome the cri-
sis, manage re-openings and implement future oriented
projects to drive recovery and growth in 2021 and be-
yond. Dufry ended the most challenging year ever with
exceptional strong liquidity and an improved strategic
growth setup compared to before the COVID-19 crisis.
The company achieved savings of CHF 1,312.1 million in
2020, thereby significantly over-achieving its previously
communicated target of CHF 1 billion. The decisive ac-
tions taken during the year also resulted in a lower than
targeted cash consumption in the second half of 2020
of CHF 45.7 million versus a previously expected CHF 60
million monthly average. Furthermore, our successful
execution of various financial initiatives, including a
share placement, the issuance of convertible bonds and
re-negotiation of bank loans, as well as a share rights
issue led to CHF 1,992.9 million of gross proceeds to the
company in 2020. Dufry engaged in more than 1,600
meetings with shareholders and investors, 86% more
compared to 2019, thus bringing new important share-
holders on board. Additionally, Dufry entered into an
agreement with its bank consortium to waive the exist-
ing financial covenants of 4.5x net debt/adjusted oper-
ating cash flow (LTM/constant FX) until end of June 2021
and assign a higher leverage covenant of 5x net debt/
adjusted operating cash flow (LTM/constant FX) for the
September and December 2021 testing periods. Dufry
closed the financial year 2020 with a strong liquidity po-
sition of CHF 1,905.7 million, which provides it with suf-
ficient liquidity for driving re-openings and growth ac-
celeration along 2021 and beyond. The company also
succeeded to already initiate strategic initiatives for
2021, especially by forming a JV with Alibaba Group to
develop travel retail in China and to drive its global dig-
ital transformation, as well as by partnering with Hainan
Development Holdings (HDH) to collaborate in duty-
free operations in Hainan from 2021 onwards. Moreover,
based on the re-organization, including the Hudson re-
integration and successful delisting, and decisive re-
structuring measures implemented, Dufry expects sus-
tainable recurring fixed cost savings of around CHF 400
million going forward.
In fiscal year 2020, the total bonuses accrued as part
of the compensation for the members of the Global Ex-
ecutive Committee represented between 121 % and
333 % of their target basic salary (100 % basic salaries
before the 30 % voluntary salary reduction during three
months) and amounted in aggregate to CHF 7.98 million
for the two initial targets Turnover and MAG Relief and
to CHF 10.03 million for the special bonus on individual,
exceptional performances (2019: between 26 % and 97 %
of their basic salary and an amount of CHF 4.63 million
in the aggregate).
The bonus compensation for the members of the Global
Executive Committee, other than the bonuses for the
Group CEO and for the CEO North America, is approved
by Dufry’s Remuneration Committee in coordination
with the Group CEO. The Group CEO’s bonus is deter-
mined based on achieved targets and proposed by the
Remuneration Committee and decided by the Board of
Directors usually once per year. The Remuneration
Committee as well as the Board of Directors review the
compensation of the members of the Global Executive
Committee usually on a yearly basis. In fiscal year 2020,
due to the special situations created by the COVID-19
pandemic, the details of the compensation scheme for
the members of the Global Executive Committee was
discussed and reviewed in the 4 meetings held by the
Remuneration Committee and in 4 meetings of the
Board of Directors. The bonus for the CEO North Amer-
ica was approved by Hudson’s Remuneration Commit-
tee in consultation with the Group CEO who is also
Vice-Chairman of the Board of Directors at Hudson Ltd.
SHARE-BASED INCENTIVES (PSU )
In 2013, Dufry introduced a Performance Share Unit
(PSU) plan for the members of the Global Executive
Committee. The purpose of the plan is to provide the
members of the Global Executive Committee (and since
fiscal year 2015 also selected members of the Senior
Management team) with an incentive to make significant
and extraordinary contributions to the long-term per-
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DUFRY ANNUAL REPORT 2020
TIMING OF THE PSU PLANS
YEAR 2017
YEAR 2018
YEAR 2019
YEAR 2020
YEAR 2021
YEAR 2022
YEAR 2023
PSU Award 2017
Grant date
Vesting period PSU Award 2017
Vesting condition
reached
PSU Award 2017
Vesting
PSU Award 2018
Grant date
Vesting period PSU Award 2018
Vesting condition
not reached
PSU Award 2018
Not Vesting
PSU Award 2019
Grant date
Vesting period PSU Award 2019
Vesting condition
reached
(Yes / No?)
PSU Award 2019
No PSU granted in fiscal year 2020
formance and growth of Dufry Group, enhancing the
value of the shares for the benefit of the shareholders
of the Company. The share-based incentive is also in-
creasing the ability of Dufry Group to attract and retain
persons of exceptional skills.
In 2020, the Board of Directors, upon proposal of the
Remuneration Committee, decided to suspend the
long-term PSU plan for the one-year period of fiscal
year 2020. No PSU were awarded to the members of
the Global Executive Committee or members of the Se-
nior Management team in 2020. The PSU Award 2018,
which was granted in fiscal year 2018 did not reach the
vesting conditions set at the time of the grant and will
therefore not vest in May 2021.
During the time of its separate listing on the New York
Stock Exchange, Dufry’s subsidiary Hudson Ltd. had its
own long-term incentive (LTI) plan for members of the
management of Hudson Ltd. Details of Hudson’s LTI
plan awards are available in Note 25.2 of the consoli-
dated financial statements in this Annual Report. The
LTI plan awards granted by Hudson were directly vest-
ing into Hudson shares and were therefore not part of
the Dufry AG PSU plan. The CEO North America (Hud-
son Ltd.) was participating in the Hudson LTI plan which
consisted of Restricted Share Units (RSU) and Perfor-
mance Share Units (PSU), instead of the Dufry AG PSU
plan. He was the only member of the Global Executive
Committee that did not participate in the Dufry AG
PSU plan. With Dufry acquiring all remaining equity in-
terests in Hudson Ltd. which it did not already own for
USD 7.70 in cash per Hudson Class A share (transac-
tion closed on December 1, 2020) and the subsequent
delisting of Hudson Ltd. from the New York Stock Ex-
change, the Hudson long-term incentive plan ceased
to exist. The plan participants received a fixed price of
USD 7.70 per share for their Restricted Share Units
(RSU) and Performance Share Units (PSU). The number
of shares underlying each PSU was calculated based
on the achieved results against the performance tar-
gets of the Hudson PSU. For further information see
Note 25.2 in the consolidated financial statements.
Within the Global Executive Committee, this only con-
cerned the CEO North America and his 2019 LTI plan
holdings in Hudson.
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DUFRY ANNUAL REPORT 2020
DUFRY AG PSU VESTING
METRIC
N/A
DUFRY AG PSU GRANTS 2020
DUFRY AG PSU GRANTS 2019
PSU VESTING
METRIC
PSU VESTING
No PSU granted in fiscal year
2020 period
EPS basis
< minimum threshold
(50 % of target)
at target
> maximum threshold
(150 % of target)
Between minimum
threshold and maximum
threshold
Based on Cumulative
Adjusted EPS (three-year
period 2019 – 2021)
No vesting
100 % vesting
(1 share per PSU)
Maximum vesting
(2 shares per PSU)
Linear calculation
(between 0 and maximum
2 shares per PSU)
From an economic point of view, Dufry’s PSU are stock
options with an exercise price of nil (the same applied
for Hudson’s RSU and PSU). However, they are ex-
pected to have no dilutive effect, as the shares for
share-based incentives historically have been sourced
from treasury shares held by the Company (or by Hud-
son in case of the Hudson RSU / PSU).
Details of the Performance Share Units (PSU)
The number of PSU allocated to each member of the
Global Executive Committee in any given year takes into
account the basic salary as well as the prevailing share
price and assumes that the target will be achieved, i.e.
that one share vests for each PSU. No PSU were
awarded in fiscal year 2020, and the PSU Award 2018
will not vest in 2021, as vesting conditions were not
reached. The share-based payments accrued, shown in
the compensation table on page 281, does not reflect
any accrued value for PSU in fiscal year 2020 (PSU
Awards usually have a vesting period of three years; in
2019 the accrued value of the PSU awards represented
about 61 % of the basic salary for the Group CEO and
between 41 % and 92 % of the basic salary for the other
members of the Global Executive Committee). The PSU
awards (which were granted in fiscal years 2018 and
2019) will only vest in the third year of the award period
and are linked to specific performance criteria (see be-
low). Once PSU are vesting, the shares will become im-
mediately unrestricted and available to the plan partic-
ipants. The structure of the PSU was identical in the
case of the Hudson PSU, however with different perfor-
mance metrics for Hudson.
Vesting conditions of the PSU 2019 and 2018 Awards,
granted in fiscal year 2019 and 2018, respectively, are:
– The participant’s ongoing contractual relationship
on the vesting date; and
– The achievement of the performance target as de-
scribed below.
As stated before, no PSU were granted in 2020.
Performance targets for the Dufry 2019 and 2018
PSU grants
The previously set performance targets of the Dufry
2019 and 2018 PSU grants (performance targets set at
the time of the grant) remain unchanged. They are as
follows:
2019 grant: The number of shares allocated for each
PSU directly depends on the Company’s Cumulative
Adjusted EPS as a nominal amount in Swiss Francs of
the three-year period preceding the vesting. In fiscal
year 2019, the Target Cumulative Adjusted EPS (period
2019-2021) was set at CHF 23.82, based on the 2019
budgeted Adjusted EPS (of CHF 7.67) and applying a
growth rate of 3.5 % per annum. This annual growth
rate was considered to be challenging in the Compa-
ny’s view and was in line with the target top line growth
rate of 3 - 4 % for the Group, at the time of the PSU grant
in 2019.
Depending on the Cumulative Adjusted EPS achieved,
each PSU will convert according to the following grid:
– Minimum threshold of 50 % of target must be
achieved; otherwise the PSU shall not vest and
will become nil and void. The participant will not be
allocated any shares from the PSU.
– For a Cumulative Adjusted EPS at target, the par-
ticipant shall be allocated one share for every PSU
that has vested.
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DUFRY ANNUAL REPORT 2020
COMPENSATION OF THE MEMBERS OF THE GLOBAL EXECUTIVE COMMITTEE (AUDITED)
REMUNERATION COMPONENT
IN THOUSANDS OF CHF
Basic salary
Bonus on targets Turnover and MAG Relief
Special bonus on individual, exceptional performance
Post-employment benefits 3
Other indirect benefits
Share-based payments accrued (3 years vesting period) 4
Total compensation accrued
2020
2019
GEC 1
CEO 2
GEC 1
CEO 2
7,315.6
7,981.0
10,027.3
1,777.3
688.5
-
27,789.7
1,732.8
2,337.3
1,079.8
504.7
23.1
-
5,677.7
8,759.8
4,627.7
-
1,775.5
373.3
5,704.2
21,240.5
1,924.0
1,121.2
-
571.5
23.1
1,180.2
4,820.0
Total compensation pay -out
29,234.6
6,093.3
27,038.7
7,281.2
Number of performance share units awarded (in thousands) 4
-
-
126.8
12.1
1 The remuneration of the Global Executive Committee in fiscal year 2020 includes 8 members as of September 1, 2020
(previously 10 members in period January to August 2020 and in fiscal year 2019).
2 The Group CEO is the highest paid member.
3 Amount includes employer social security contributions and pension contributions.
4 For valuation details of the Dufry performance share units see Note 25.1 of the consolidated financial statements.
The accrued values in the table reflect the different valuations of the PSU in the different reporting years. PSU
are calculated at target. In fiscal year 2020, no PSU were granted. Fiscal year 2019 also includes the Hudson RSU
and PSU granted to the CEO North America (see Note 25.2 of the consolidated financial statements).
– For a Cumulative Adjusted EPS of 150 % of target
or above, which represents the maximum thresh-
old, the participant shall be allocated two shares
for every PSU that has vested.
– For a Cumulative Adjusted EPS higher than the min-
imum threshold but lower than the maximum thresh-
old, the number of shares allocated from vested
PSU is calculated on a linear basis.
– The maximum number of shares allocated is capped
at two shares per vested PSU.
2018 grant: With the implementation of IFRS 16 (in fis-
cal year 2019) and the previously used Normalized
Cash EPS metric no longer being continued as of Jan-
uary 1, 2019, the 2018 grant had been amended in fis-
cal year 2019 as follows: For the calculation of the cu-
mulative achievement, the number of shares allocated
for each PSU depended on a cumulation (period
2018 - 2020) of the formerly used Cash EPS for the
year 2018 and the Adjusted EPS for the years 2019 and
2020. As the minimum threshold of 50 % of target was
not achieved – mainly as a result of the special market
conditions due to the COVID-19 pandemic and the re-
spective influence on Dufry’s Annual Results 2020 –
the PSU Award 2018 will not vest in May 2021 and will
become nil and void. The plan participants will not be
allocated any shares from the PSU Award 2018.
The Board of Directors (upon proposal by the Remu-
neration Committee) decided to suspend the long-
term PSU plan for fiscal year 2020. Therefore, no (zero)
PSU were granted to the members of the Global Exec-
utive Committee in fiscal year 2020 (2019: in aggregate
50,134 PSU granted to nine members of the Global Ex-
ecutive Committee; excluding the CEO North America
who participated in the Hudson LTI plan). Out of these
amounts, no PSU were granted to the Group CEO in
2020 (2019: 12,122 PSU). The total number of shares
that can be allocated to the eight members of the
Global Executive Committee (GEC members as of De-
cember 31, 2020) would amount to the following: At
target, 42,134 shares for the PSU Award 2019 and zero
shares for the PSU Award 2018, as the Award 2018 will
not vest in May 2021. At maximum (i.e. at a maximum
of 2 shares per vested PSU from the 2019 and 2018
grants) it would amount to 84,268 shares for the PSU
Award 2019 and zero shares for the PSU Award 2018.
Overall, the number of persons usually qualified to re-
ceive PSU awards includes (since fiscal year 2015) not
only the members of the Global Executive Committee,
but also further selected members of the Senior Man-
agement team of Dufry (28 senior managers in 2020).
In addition to the PSU awarded to the members of the
Global Executive Committee, this further group of Se-
nior Managers received in aggregate zero PSU in 2020
(2019: 26 managers and 31,200 PSU from the Award
2019; about 60 managers and 68,486 PSU from the
PSU Award 2018, which will not vest in May 2021). The
conditions of the Dufry PSU plans are identical for all
plan participants (whether members of the Global Ex-
ecutive Committee or Senior Managers). The total
number of shares that can be allocated to the Senior
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DUFRY ANNUAL REPORT 2020
REMUNERATION STRUCTURE GLOBAL EXECUTIVE COMMITTEE IN 2020
BASIC SALARY
BONUS
SHARE-BASED PAYMENTS
POST-EMPLOYMENT
BENEFITS,
OTHER INDIRECT BENEFITS
9 % POST-EMPLOYMENT BENEFITS,
OTHER INDIRECT BENEFITS
26 % BASIC SALARY
IN THOUSANDS OF CHF
35.000
30.000
20.000
GEC
2.306
5.500
10.000
7.032
7.953
0
CEO
504
1.180
2.059
1.872
GEC
2.641
11.000
9.142
7.953
CEO
561
2.360
2.677
1.872
GEC
2.465
10.027
7.981
7.316
CEO
528
1.080
2.337
1.733
36 % BONUS
INDIVIDUAL
EXCEPTIONAL
PERFORMANCE
Target (100%)
as of Jan 1, 2020
Maximum potential
based on Target
as of Jan 1, 2020
Accrued compensation
2020
29 % BONUS
TURNOVER,
MAG RELIEF
Management team members (team members as of De-
cember 31, 2020) would amount to the following: At
target, 39,200 shares for the PSU Award 2019, zero
shares for the PSU Award 2018, as the Award 2018 will
not vest in May 2021. At maximum, 78,400 shares for
the PSU Award 2019 and zero shares for the PSU
Award 2018.
For the PSU plan 2016 that vested in May 2019, 104.0 %
of the target number of shares were allocated to the plan
participants. For the PSU plan 2017 that vested in
May 2020, 94.5 % of the target number of shares were al-
located to the plan participants. For the PSU plan 2018,
no shares will be allocated, as the PSU 2018 Award will
not vest.
The total number of shares that can be allocated to all
participants of the Dufry PSU Award 2019 (no PSU
Award in 2020 and the PSU Award 2018 will not vest)
would amount to the following: At target 81,334 shares,
representing a total of 0.10 % of the outstanding
shares as at December 31, 2020. At maximum (i.e. at 2
shares per vested PSU from the PSU Award 2019)
162,668 shares, representing a total of 0.20 % of the
outstanding shares as at December 31, 2020. Histori-
cally, Dufry has always sourced its share-based com-
pensation from treasury shares, so that no dilutive ef-
fect is expected from the PSU.
For a description of the performance targets of the
PSU Award 2017 (which vested in May 2020) and the
Award 2018 (which will not vest in May 2021), please re-
fer to the details in the Remuneration Report 2019 on
pages 263 to 265 of the Annual Report 2019.
Link to the Annual Report 2019:
www.dufry.com/en/investors/ir-reports-
presentations-and-publications
Categories selection “Financial Reports”
The Dufry PSU plans have been approved by the Re-
muneration Committee and the Board of Directors.
The Remuneration Committee reviews achievement
of the respective performance target at a specific
vesting date, upon proposal of the Group CEO, who as
plan administrator will usually analyze and adjust po-
tential exceptional and non-recurring events to nor-
malize Adjusted EPS in relation to the PSU plan. No
such adjustments were made in fiscal year 2020, as
no PSU were granted in 2020. The Group CEO acts
as Plan Administrator and therefore usually proposes
the amount of each specific grant to each individual
plan participant, which is reviewed by the Remunera-
tion Committee. The grants made to the Group CEO
are decided by the Remuneration Committee.
Hudson LTI plan ceased
The CEO North America (Hudson Ltd.) is the only mem-
ber of the Global Executive Committee who participated
in the previously existing Hudson long-term incentive
plans. He was appointed to the Global Executive Com-
mittee as of January 18, 2019, and therefore also par-
ticipated in the Hudson 2019 LTI plan (no LTI plan in
2020). Upon the closing of the merger transaction
whereby Dufry acquired all remaining equity inter-
ests in Hudson Ltd. which it did not already own for
282
4 Governance Report
DUFRY ANNUAL REPORT 2020
USD 7.70 in cash per Hudson Class A share (transac-
tion closed on December 1, 2020) and the subsequent
delisting of Hudson Ltd. from the New York Stock Ex-
change, the Hudson long-term incentive plan ceased
to exist. The plan participants receive a fixed price of
USD 7.70 per share for their Restricted Share Units
(RSU) and Performance Share Units (PSU). The num-
ber of shares underlying each PSU was calculated
based on the achieved results against the perfor-
mance targets of the Hudson PSU.
Details of the previous Hudson LTI plan awards are
available in the Notes to the consolidated financial
statements (Note 25.2 share-based payments) of this
Annual Report. The table with the compensation of the
members of the Global Executive Committee on page
281 also includes the value of the Hudson RSU / PSU
2019 grants to the CEO North America (in “share-
based payments accrued”).
OTHER INDIRECT BENEFITS
The Company limits further benefits to a minimum.
Fringe benefits such as health insurance, company car,
or housing allowances have been granted to certain
members of the Global Executive Committee. The total
amounted to CHF 0.7 million in the aggregate in fiscal
year 2020 (2019: CHF 0.4 million in aggregate for cer-
tain members of the Global Executive Committee).
CHANGES IN THE REMUNERATION SYSTEM
IN 2020 – GLOBAL EXECUTIVE COMMITTEE
The Board of Directors, upon proposal by the Remu-
neration Committee, has decided on the following
change to the remuneration system in fiscal year 2020:
– New Global Executive Committee structure with re-
duced number of members (eight members vs. ten
members previously), effective September 1, 2020.
– Basic salary reduction initiative: A 30 % salary re-
duction was implemented in the three month period
from April to June 2020. This was on a voluntary ba-
sis and all members of the Global Executive Com-
mittee agreed to and participated in this salary re-
duction.
– Short-term incentive: For the annual bonus, Dufry
has replaced the previous key performance indica-
tors (Organic Growth, Adjusted Operating Profit
and Equity Free Cash Flow), which were used in the
financial year 2019 with entirely changed targets to
address the new, COVID-19 related market environ-
ment and the respective necessary measures to
safeguard the resilience of the company and secure
a setup for recovery. The new key performance in-
dicators for financial year 2020 were (i) Turnover and
(ii) Agreements with airport authorities to get relief
of the fixed minimal guaranteed amount on sales
(“MAG” Relief - Minimum Agreed Guarantee Relief),
Further, a special bonus was approved to addition-
ally reward exceptional individual performances by
members of the Global Executive Committee in
2020, as they have been instrumental in rescuing the
company and initiating innovative, forward-looking
steps to set up the company for emerging stronger
post-COVID and beyond.
– Long-term incentive: Suspension of the long-term
Performance Share Units (PSU) plan for the fiscal
year 2020. No PSU were granted in fiscal year 2020.
– Remuneration of the CEO North America (Hudson
Ltd.), who is a member of the Global Executive Com-
mittee: Upon the closing of the merger transaction
whereby Dufry acquired all remaining equity inter-
ests in Hudson Ltd. which it did not already own for
USD 7.70 in cash per Hudson Class A share (trans-
action closed on December 1, 2020) and the subse-
quent delisting of Hudson Ltd. from the New York
Stock Exchange, the Hudson long-term incentive
plan ceased to exist. The plan participants receive a
fixed price of USD 7.70 per share for their Restricted
Share Units (RSU) and Performance Share Units
(PSU). The number of shares underlying each PSU
was calculated based on the achieved results
against the performance targets of the Hudson
PSU. See also Note 25.2 in the consolidated finan-
cial statements. Within the Global Executive Com-
mittee, this only concerned the CEO North Amer-
ica and his 2019 LTI plan holdings in Hudson.
COMPENSATION RATIO FOR REMUNERATION OF GLOBAL EXECUTIVE COMMITTEE (TEN MEMBERS) FOR 2020
IN THOUSANDS OF CHF
Total Global Executive
Committee
GEC COMPENSATION
FOR FISCAL YEAR 2020
AS REPORTED
TOTAL MAXIMUM AMOUNT FOR GEC
COMPENSATION AS APPROVED BY
SHAREHOLDERS AT THE AGM 2019 FOR
FISCAL YEAR 2020
COMPENSATION RATIO
27,789.7
42,530.0
65.3 %
283
4 Governance Report
DUFRY ANNUAL REPORT 2020
SUMMARY OF REMUNERATION
FOR FISCAL YEAR 2020
For fiscal year 2020, the remuneration of the Global
Executive Committee includes the compensation
of ten GEC members active in 2020 (eight members
active January 1 to December 31; two members active
January 1 to August 31). The remuneration for fiscal
years 2020 and 2019, mentioned in the table on page
281 covers the period between January 1 and Decem-
ber 31.
The remuneration difference compared with the pre-
vious year is mainly due to the change in the number
of members of the Global Executive Committee (8
members as of September 1, 2020 vs. 10 members pre-
viously), the 30 % voluntary basic salary reduction in
the period April to June 2020, the different individual
bonus payments based on achievement of objectives
and individual performances, as well as the fact that
no PSU were granted in 2020.
COMPARISON AND COMPOSITION OF
REMUNERATION OF THE GLOBAL EXECUTIVE
COMMITTEE FOR FISCAL YEAR 2020
The charts on page 282 reflect the composition of the
different remuneration components as well as the ac-
tual remuneration of the members of the Global Ex-
ecutive Committee for fiscal year 2020. In the chart,
the actual remuneration is also compared to the com-
pensation structure at target at the beginning of the
year (as of January 1, 2020) and the maximum poten-
tial of compensation.
PAY-OUT COMPONENTS FOR FISCAL YEAR 2020
The pay-out of the bonus component for the Group
CEO amounts to CHF 3.42 million, which represents
183 % of the Group CEO’s basic salary (at target 100 %).
As mentioned before, the Dufry PSU Award 2018 will
not vest in May 2021 and there will be no pay-out for the
CEO or any other members of the Global Executive
Committee from the Dufry PSU Awards 2018.
The pay-out for the entire Global Executive Commit-
tee for fiscal year 2020 amounts to a total of CHF 29.23
million, of which CHF 6.09 million is the pay-out to the
Group CEO.
RECONCILIATION BETWEEN REPORTED GLOBAL
EXECUTIVE COMMITTEE COMPENSATION FOR
FISCAL YEAR 2020 AND THE AMOUNT APPROVED
BY THE SHAREHOLDERS AT THE AGM 2019 FOR
FISCAL YEAR 2020
The Ordinary General Meeting of Shareholders held
on May 9, 2019, approved a maximum aggregate
amount of compensation for the members of the
Global Executive Committee for the fiscal year 2020
of CHF 42.53 million. The approved maximum aggre-
gate amount reflects the maximum possible pay-out
calculated for each compensation element and took
into account the ten members of the Global Executive
Committee in office at the time the proposal to the
AGM 2019 was made. The actual compensation ratio
(accrued compensation) for the members of the
Global Executive Committee compared with the
amount approved by the General Meeting of Share-
holders was 65.3 %.
For fiscal year 2021, the Ordinary General Meeting
of Shareholders held on May 18, 2020, approved a
maximum aggregate amount of compensation for the
members of the Global Executive Committee of
CHF 34.0 million. The compensation ratio for 2021 will
again be disclosed in the Remuneration Report 2021.
RESTATEMENT OF REMUNERATION COMPONENT
FOR FISCAL YEAR 2018 (AUDITED)
In the process of preparing the Remuneration Report
2020, the Company identified a required correction of
the reported amount of bonus component presented
in the Remuneration Report of the fiscal year 2018. It
did not disclose and include in the description and cal-
culation of the accrued bonus that the objectives for
the bonus component carried a multiplier factor, if the
achievement ratio of one of the three objectives
(EBITDA, Business Operating Model Efficiency, Free
Cash Flow) was above 101 %. The correctly stated
amounts for the bonus for the fiscal year 2018 should
have been the following (in CHF thousands): Bonus GEC
6,219.7; CEO 2,327.3 (instead of the reported: GEC
4,966.0, CEO 1,775.6). As a result, the total compensa-
tion accrued should have been stated as (in CHF thou-
sands): GEC 20,227.8, CEO 6,411.2 (instead of the re-
ported: GEC 18,974.1, CEO 5,859.6). The bonus amounts
were paid out in 2019 and the restatement will not en-
tail any further payments or actions.
284
4 Governance Report
DUFRY ANNUAL REPORT 2020
OTHER COMPENSATION, LOANS
OR GUARANTEES (AUDITED)
For the years 2020 and 2019, no other compensation
was paid directly or indirectly to current or former
members of the Global Executive Committee, or to their
related parties. There are also no loans or guarantees
received or provided to the Global Executive Commit-
tee members, or to related parties.
CONTRACTS OF EMPLOYMENT TERMS
According to Article 23 of the Articles of Incorporation,
employment and other agreements with the members
of the Global Executive Committee may be concluded
for a fixed term or for an indefinite term. Agreements
for a fixed term may have a maximum duration of one
year. Renewal is possible. Agreements for an indefinite
term may have a notice period of maximum twelve
months. The current contracts with the members of
the Global Executive Committee contain termination
periods of twelve months or less.
285
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DUFRY ANNUAL REPORT 2020
PARTICIPATIONS IN DUFRY AG
The following members of the Board of Directors or of
the Global Executive Committee of Dufry AG (includ-
ing related parties) directly or indirectly hold shares
or share options (including PSU) of the Company as at
December 31, 2020. Members not listed in the tables
do not hold any shares or options.
IN THOUSANDS
MEMBERS OF BOARD OF DIRECTORS
J. C. Torres Carretero, Chairman
H. Jo Min, Independent Lead Director
J. Born, Director
J. Díaz González, Director and Group CEO
S. Tadler, Director
L. Tyler-Cagni, Director
ADDITIONAL FORMER MEMBERS OF THE BOARD OF
DIRECTORS
A. Holzer Neumann, Director
Total Board of Directors
MEMBERS OF GLOBAL EXECUTIVE COMMITTEE
J. Díaz González, Director and Group CEO
J. A. Gea, Deputy Group CEO
Y. Gerster, CFO
E. Andrades, CEO Operations
R. Fordyce, CEO North America
A. Belardini, Chief Commercial Officer
L. Marin, Global Chief Corporate Officer
P. Duclos, Group General Counsel
ADDITIONAL FORMER MEMBERS OF GLOBAL EXECUTIVE
COMMITTEE
J. Gonzalez, Chief Marketing and Digital Innovation Officer
R. Riedi, Division CEO Central and South America
DECEMBER 31, 2020
DECEMBER 31, 2019
SHARES
FINANCIAL
INSTRUMENTS 1
PARTICIP.
SHARES
FINANCIAL
INSTRUMENTS 1, 2
PARTICIP.
758.3
0.7
31.7
230.3
19.0
3.6
n/a
1,043.6
230.3
41.7
3.7
5.3
4.5
13.7
10.8
–
n/a
n/a
–
–
–
28.9
–
–
n/a
28.9
28.9
17.1
5.3
12.6
–
10.3
9.0
12.6
n/a
n/a
0.94 %
0.00 %
0.04 %
0.32 %
0.02 %
0.00 %
966.0
0.5
22.0
233.0
13.0
–
n/a
1.34 %
3,991.0
5,225.5
0.32 %
0.07 %
0.01 %
0.02 %
0.01 %
0.03 %
0.02 %
0.02 %
233.0
33.0
2.2
1.0
3.6
18.7
7.8
–
23.7
–
–
63.3
–
–
–
1.96 %
0.00 %
0.04 %
0.59 %
0.03 %
–
7.89 %
87.0
10.51 %
63.3
26.8
7.0
17.1
1.4
16.2
13.5
20.7
0.59 %
0.12 %
0.02 %
0.04 %
0.01 %
0.07 %
0.04 %
0.04 %
n/a
n/a
3.3
1.1
7.4
14.0
0.02 %
0.03 %
Total Global Executive Committee
310.0
95.8
0.51 %
303.7
187.4
0.97 %
1 The financial instruments for the members of the Global Executive Committee (and J. Díaz González also in the table
of the Board of Directors) refer to their holdings of PSU (granted).
2 The 2019 financial instruments held by J. Díaz González include the equivalent of 17.5 thousands of shares
and for J. C. Torres Carretero 23.7 thousands of shares held through various financial instruments, the
detailed terms of which are as disclosed to the SIX Exchange Regulation and published on August 3, 2019.
In addition to the above, the shareholders’ group con-
sisting, among others, of different legal entities con-
trolled by Juan Carlos Torres and Julián Díaz González
holds sale positions of 0.97 % through options (778,160
voting rights) as of December 31, 2020 (as of De-
cember 31, 2019: the shareholders’ group consisting,
among others, of different entities controlled by Andrés
Holzer Neumann, Juan Carlos Torres and Julián Díaz
González holds sale positions of 3.62 % through options
(1,829,190 voting rights)).
The detailed terms of these financial instruments are as
disclosed to SIX Exchange Regulation and published on
January 9, 2021 (for positions as of December 31, 2020;
for sale position as of December 31, 2019: publication of
disclosure notice on August 3, 2019). Disclosure notices
are available on the SIX Exchange Regulation website:
www.ser-ag.com/en/resources/notifications-market-
participants/significant-shareholders.html#/
286
4 Governance Report
DUFRY ANNUAL REPORT 2020
To the General Meeting of
Dufry AG, Basel
Basel, March 8, 2021
Report of the statutory auditor on the remuneration report
We have audited the remuneration report of Dufry AG for the year ended December 31, 2020. The audit
was limited to the information according to articles 14 – 16 of the Ordinance against Excessive
Compensation in Stock Exchange Listed Companies (Ordinance) contained in the tables and sections
labeled “audited” on pages 268 to 286 of the remuneration report.
Board of Directors’ responsibility
The Board of Directors is responsible for the preparation and overall fair presentation of the remuner-
ation report in accordance with Swiss law and the Ordinance. The Board of Directors is also responsible
for designing the remuneration system and defining individual remuneration packages.
Auditor’s responsibility
Our responsibility is to express an opinion on the remuneration report. We conducted our audit in
accordance with Swiss Auditing Standards. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the
remuneration report complies with Swiss law and articles 14–16 of the Ordinance.
An audit involves performing procedures to obtain audit evidence on the disclosures made in the
remuneration report with regard to compensation, loans and credits in accordance with articles 14 – 16
of the Ordinance. The procedures selected depend on the auditor’s judgment, including the assessment
of the risks of material misstatements in the remuneration report, whether due to fraud or error. This
audit also includes evaluating the reasonableness of the methods applied to value components of
remuneration, as well as assessing the overall presentation of the remuneration report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Opinion
In our opinion, the remuneration report for the year ended December 31, 2020 of Dufry AG complies
with Swiss law and articles 14 – 16 of the Ordinance.
Ernst & Young Ltd
/s/ Jolanda Dolente
Licensed audit expert
(Auditor in charge)
/s/ Siro Bonetti
Licensed audit expert
287
4 Governance Report
DUFRY ANNUAL REPORT 2020
INFORMATION
FOR INVESTORS
AND MEDIA
REGISTERED SHARES
SENIOR NOTES
Dufry AG
SIX Swiss Exchange
Registered shares
DUFN
CH0023405456
Issuer
Listing
Type of security
Ticker symbol
ISIN-No.
Swiss Security-No. 2340545
Reuters
Bloomberg
DUFN.S
DUFN:SW
KEY DATES IN 2021
March 9, 2021
May 18, 2021
May 20, 2021
August 10, 2021
October 28, 2021
Results Fiscal Year 2020,
Publication of Annual Report
Annual General Meeting
Trading Statement
First Quarter 2021
Results First Half Year 2021
Trading Statement
Third Quarter 2021
288
Issuer
Listing
Type of security
Size of issue
Interest rate
Maturity
ISIN-No.
Bloomberg
Issuer
Listing
Type of security
Size of issue
Interest rate
Maturity
ISIN-No.
Bloomberg
Dufry One B.V.
The International Stock
Exchange (“TISE”)
Senior Notes
EUR 800 million
2.5 % p.a., paid semi-annually
October 15, 2024
XS1699848914 (Serie REG S)
DUFNSW
Dufry One B.V.
The International Stock
Exchange (“TISE”)
Senior Notes
EUR 750 million
2.0 % p.a., paid semi-annually
February 15, 2027
XS2079388828 (Serie REG S)
DUFNSW
SENIOR CONVERTIBLE BONDS
Issuer
Listing
Type of security
Size of issue
Interest rate
Maturity
Convertible into
Conversion price
ISIN-No.
Ticker symbol
Dufry One B.V.
SIX Swiss Exchange)
Guaranteed Senior
Convertible bonds
CHF 350 million
1.0 % p.a., paid semi-annually
May 4, 2023
Registered shares Dufry AG
CHF 33.00
CH0540633051
DUF 20
4 Governance Report
DUFRY ANNUAL REPORT 2020
MEDIA CONTACTS
Renzo Radice
Global Head Corporate Communications &
Public Affairs
Phone + 41 61 266 44 19
renzo.radice@dufry.com
Karen Sharpes
Global Media & Events Manager
Phone + 44 208 624 43 26
karen.sharpes@dufry.com
INVESTOR RELATIONS CONTACTS
Dr. Kristin Köhler
Global Head Investor Relations
Phone + 41 61 266 44 22
kristin.koehler@dufry.com
Eduardo Ganino
Investor Relations
Phone + 55 21 2157 9927
eduardo.ganino@br.dufry.com
Natália Barcellos
Investor Relations
Phone + 55 21 2157 9927
natalia.barcellos@br.dufry.com
ADDRESS
CORPORATE
HEADQUARTERS
DUFRY AG
Brunngässlein 12
P.O. Box
4010 Basel
Switzerland
Phone +41 61 266 44 44
DUFRY.COM
Company’s website:
Latest news:
Articles of incorporation:
Financial reports:
289
SUSTAINABILITY
REPORT 2020
ANNEX
Sustainability Report 2020 Annex
SUSTAINABILITY
REPORT
ANNEX
About the Report
Following its commitment to providing more visibility
into its annual non-financial performance, and build-
ing on the steps taken in 2016 with the commissioning
of its first Materiality Assessment to identify the sus-
tainability topics and in 2017 with the preparation of
the first Sustainability Report following international
standards, Dufry has again aligned its Sustainability
Report with the guidelines of the Global Reporting Ini-
tiative (GRI) Standards on its Core Option. Reporting
in accordance with this international standard permits
a more transparent and comparable approach to in-
formation and facilitates the tracking of sustainabil-
ity performance indicators.
As indicated on page 80 of the 2020 Annual Report,
Dufry has decided to voluntarily report information
related to three additional GRI indicators: Emissions,
Environmental Compliance and Public Policy. The rest
of the GRI indicators remain unchanged compared to
previous years. The Dufry 2020 Sustainability Report
applies the 2016 version of the GRI Standards for most
of the indicators; where noted “2016*” and “2018*” in
this annex and in the GRI Index, it refers to the Stan-
dards issue date, not the date of the information pre-
sented. Additionally, for the 2020 report Dufry has
aligned the GRI indicators with the United Nations’
Sustainability Development Goals (SDG), thus enabling
the reader of the report to have a better and more
transparent understanding of Dufry’s sustainability
initiatives.
Dufry’s ESG report is divided into two main sections.
The main one – included in the annual report – gives the
reader a wider view of Dufry, its relationship with its
main stakeholders and its vision on sustainability. The
second part of the report - which is annexed to the An-
nual Report and also available in the sustainability sec-
tion of the corporate website, www.dufry.com, is this
document which contains information presented in
several tables with quantitative indicators as per the
GRI Standard indications. Both documents present
data as of December 31, 2020
For easier tracking, a complete list of the indicators in
the GRI Index is available on the website. That Index
cross references indicators (GRI and SDG indicators)
and page numbers, serving as a comprehensive guide
to where the information on each topic may be found
– either in the annual report, on the Group website or
in this annex.
Scope
Dufry’s 2020 Sustainability Report maintains the same
scope of the 2019 report and includes information
from all the 64 countries where Dufry operates. For
the general profile and most of the GRI indicators, the
information reported is global (i.e.: relevant to the
whole group). For staff-related indicators – GRI 102-
8, GRI 102-41. GRI 202 and GRI 400 series, informa-
tion is broken down by five geographical divisions, fol-
lowing a similar structure to the one used in Dufry’s
financial report:
— HQ - Group Headquarters in Basel, Switzerland
— Europe, Middle East & Africa
— Asia Pacific
— North America
— Central and South America
More information about each of the countries included
may be found on pages 40 – 57 of the annual report.
Should you have any comments about the content of
the report or want to know more about Dufry’s efforts
towards sustainability, please email us to
sustainability@dufry.com
2/8
Sustainability Report 2020 Annex
INFORMATION ON EMPLOYEES AND OTHER WORKERS
(USING GRI CODING)
102-8 INFORMATION ON EMPLOYEES AND OTHER WORKERS
EUROPE,
MIDDLE EAST &
AFRICA
HQ
ASIA
PACIFIC
NORTH
AMERICA
CENTRAL &
SOUTH
AMERICA
TOTAL
Headcounts
153
11,787
1,547
4,448
4,218
22,153
Number of Nationalities
36
115
29
45
43
Male
83
Female
70
4,302
7,485
422
1,338
1,698
1,125
3,110
2,520
7,843
14,310
133
3/8
HQEUROPE, MIDDLE EAST & AFRICAASIA PACIFICNORTH AMERICACENTRAL & SOUTH AMERICABREAKDOWN BY EMPLOYEE TYPEHeadcounts 153 11,787 1,547 4,448 4,218 Male 83 4,302 422 1,338 1,698 Full time 71 3,658 348 1,217 1,557 Part time 12 644 74 121 141 Female 70 7,485 1,125 3,110 2,520 Full time 43 4,818 816 2,707 2,322 Part time 27 2,667 309 403 198 BREAKDOWN BY CONTRACT TYPEHeadcounts153 11,787 1,5474,4484,218Male83 4,302 4221,3381,698Permanent83 4,046 3531,3351,689Temporary– 256 6939Female70 7,485 1,1253,1102,520Permanent70 7,049 9343,0562,516Temporary– 436 191544BREAKDOWN BY AGE GROUPHeadcounts153 11,787 1,5474,4484,218Male83 4,302 4221,3381,698< 30 years3 750 15824838630 – 50 years61 2,603 2186131,078> 50 years19 949 46477234Female70 7,485 1,1253,1102,520< 30 years5 1,186 36945859230 – 50 years48 4,376 6101,3781,642> 50 years17 1,923 1461,274286BREAKDOWN BY PROFESSIONAL LEVEL Headcounts153 11,787 1,5474,4484,218Male83 4,302 4221,3381,698Director / Top management16 14 4236Admin & Professional67 872 100206456Sales & Ops Managers - 240 41289100Sales & Ops Staff - 3,176 2778201,127Female70 7,485 1,1253,1102,520Director / Top management2 7 34131Admin & Professional68 838 94292309Sales & Ops Managers - 247 18467114Sales & Ops Staff - 6,393 9792,3382,096Note: These tables provide additional information to that available in the Annual Report, page 95, including: breakdown of headcounts of relevant operations by gender, employee type, employee contract, age and professional level. For more consistent tracking, headcounts from the Distribution Centres have been reassigned to the divisions where these are located. Sustainability Report 2020 Annex
4/8
102-41 PERCENTAGE OF EMPLOYEES COVERED BY A COLLECTIVE BARGAINING AGREEMENTHQEUROPE, MIDDLE EAST & AFRICAASIA PACIFICNORTH AMERICACENTRAL & SOUTH AMERICATOTALHeadcounts 153 4,666 0 1,286 2,870 8,975 % over total100 %40 %0 %29 %68 %41 %201-2 FINANCIAL IMPLICATIONS AND OTHER RISKS AND OPPORTUNITIES DUE TO CLIMATE CHANGEIt is not possible to determine if the changes in existing rules initiated by climate change will involve changes to business processes, with significant costs associated. Global regulation that could massively affect the predicted growth of international air traffic is rather unlikely due to the fact that it would necessarily need to be ac-companied by restrictions for individual countries.Stricter regulatory requirements due to climate change could eventually be an opportunity for some of our operations. As indicted on page 94 of the 2020 Annual Report, Dufry has retail shops in 44 of the 125 of the airports that have achieved either the optimization or carbon neutrality accreditations.202-1 RATIOS OF STANDARD ENTRY LEVEL WAGE BY GENDER COMPARED TO LOCAL MINIMUM WAGE HQEUROPE, MIDDLE EAST & AFRICAASIA PACIFICNORTH AMERICACENTRAL & SOUTH AMERICARATIO (1.00 = MINIMUM WAGE)Male1.001.081.001.131.33Female1.001.061.001.131.32Note: In the Canton of Basel (Switzerland) where Dufry’s HQ is located, there are different levels of mini-mum wage that depend on skills and experience. Likewise, we have not identified a benchmark for the UAE and Ireland and hence, these operations have been omitted from the Europe. Middle East & Africa calculation.202-2 PROPORTION OF SENIOR MANAGEMENT HIRED FROM THE LOCAL COMMUNITYAt Dufry, we believe talent has no nationality. Our operations and offices are very much linked to where they are based and this is reflected in the composition of our staff at all professional levels. As a general practice, and where possible, Dufry in-corporates members of the local communities to its management team as this gives a better understanding and, as a result, a better running of the operations.HQEUROPE, MIDDLE EAST & AFRICAASIA PACIFICNORTH AMERICACENTRAL & SOUTH AMERICAIN %Locally hired66 %95 %98 %96 %98 %204-1 PROPORTION OF SPENDING ON LOCAL SUPPLIERSThe food, confectionery and catering category (which represents 19 % of Dufry’s 2020 global sales) spent by far the largest proportion of its global procurement budget on local providers; approximately 60 %. This is followed by the Wine & Spirits category (17 % of the 2020 global sales), with 20 % of its budget spent on local brands, and the Luxury category (11 % of 2020 global sales), with 19 % of its budget spent on local pro-viders. Tobacco goods (12 % of the 2020 global sales) allocated 2.5 % of its budget, while Perfume and Cosmetics (31 % of the 2020 global sales) spent approximately 1.5 % on local providers. Sustainability Report 2020 Annex
5/8
401-1 NEW EMPLOYEE HIRES AND EMPLOYEE TURNOVERNote that Dufry operates in airports that have a very marked seasonal pattern and traffic, especially in the Europe, Africa & Middle East region and Central & South America regions. Over the summer season – from April until October – these airports concentrate over 80 % of the annual traffic. Staff is hence reinforced over each sum-mer period. Wherever possible, Dufry employs the same staff year after year. How-ever, these seasonal employment contracts are accounted as new hires in the table below and therefore also impact the turnover figures.Further to this seasonal pattern, turnover figures in 2020 have been impacted by lay-off and furlough measures adopted as a consequence of the closing of certain air-port operations and the reduction of air connections, which in many cases led to the temporary closing of stores. HQEUROPE, MIDDLE EAST & AFRICAASIA PACIFICNORTH AMERICACENTRAL & SOUTH AMERICAHEADCOUNTSNew Hires (absolute)31,303551,284343Male–47815420 129 < 30 years–18761956130 – 50 years–248715663> 50 years–432695Female382540864214< 30 years12661438710730 – 50 years144625284100> 50 years111311937HEADCOUNTSEmployee turnover (absolute)843,5054466.8312,191Male331,2521482,308922< 30 years54377790945230 – 50 years2061863849423> 50 years8197855047Female512,2532984,5231,269< 30 years137381321,74361530 – 50 years301,0601441,694591> 50 years8455221,08663Following the Global Sustainability Standards Board (GSSB) interpretation of the Standard, which states that “An organization is not required to comply with clause 2.1 in GRI 401: Employment 2016” Dufry has opted to disclose absolute hires and turn-over absolute figures only and not ratios. 402-1 MINIMUM NOTICE PERIODS REGARDING OPERATIONAL CHANGESHQEUROPE, MIDDLE EAST & AFRICAASIA PACIFICNORTH AMERICACENTRAL & SOUTH AMERICAIN WEEKSMinimum notice period1245 42 For certain countries the minimum notice period may change depending the scope of the operational changes: Cambodia (4 – 8 weeks), Hong-Kong (4 – 12 weeks), Singapore (4 – 12 weeks), UAE (4 – 12 weeks). For calculating the information for the indicator we have adopted average periods in these four locations. Argentina, Chile, Colombia, Dominican Republic, Equador, Trinidad & Tobago and Uruguay (for the Central & Southern America Region) and Ukraine (Europe, Middle East & Africa) did not report notice periods and they have been ommitted from the calculation. Sustainability Report 2020 Annex
6/8
403-1 WORKERS REPRESENTATION IN FORMAL JOINT MANAGEMENT– WORKER HEALTH AND SAFETY COMMITTEESHQEUROPE, MIDDLE EAST & AFRICAASIA PACIFICNORTH AMERICACENTRAL & SOUTH AMERICAIN %Staff represented in H&S committees100 %100 %100 %17 %87 %Health & Safety applicable legislation changes from one country to another. And while in operations like Spain or the UK, 100 % of the staff is covered by a joint manage-ment-worker committee, in others, like Greece or Brazil, the work done by this com-mittee is outsourced and covered by a third-party company. There is not such a com-mittee in our North America operation.403-8 WORKERS COVERED BY AN OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT SYSTEM BASED ON LEGAL OR RECOGNIZED STANDARDS HQEUROPE, MIDDLE EAST & AFRICAASIA PACIFICNORTH AMERICACENTRAL & SOUTH AMERICAABSOLUTE / IN %employees and workers who are not employees, covered by the H&S system153100 %11,787 100 %1,547 100 % 4,448 100 %3,675 87 %employees and workers who are not employees, covered by the H&S system that has been INTERNALLY audited–n/a3,589 31 %–0 %–0 %1,077 26 %employees and workers who are not employees, covered by the H&S system that has been EXTERNALLY audited–n/a3,589 31 %–0 %–0 %–0 %404-1 AVERAGE HOURS OF TRAINING PER YEAR PER EMPLOYEEHQEUROPE, MIDDLE EAST & AFRICAASIA PACIFICNORTH AMERICACENTRAL & SOUTH AMERICAHOURS OF TRAININGTotal average6.11.00.73.00.2Male5.70.60.23.30.2Director / Top management07.93.517.03.3Admin & Professional7.10.90.30.70.2Sales & Ops Managers-1.50.27.71.2Sales & Ops Staff0.40.12.10.1Female6.71.20.82.80.2Director / Top management07.30.386.277.0Admin & Professional6.91.28.73.40.6Sales & Ops Managers-2.50.96.10.4Sales & Ops Staff-1.10.11.60.1Training hours in general have been reduced as a large proportion of our staff saw contracts suspended as a consequence of closing of airports during the pandemic. North America has a different system and criteria for tracking training hours have been applied, resulting in lower training hours recorded. Sustainability Report 2020 Annex
7/8
404-3 PERCENTAGE OF EMPLOYEES RECEIVING REGULAR PERFORMANCE AND CAREER DEVELOPMENT REVIEWS HQEUROPE, MIDDLE EAST & AFRICAASIA PACIFICNORTH AMERICACENTRAL & SOUTH AMERICAIN %Total100 %100 %100 %100 %100 %Male100 %100 %100 %100 %100 %Director / Top management100 %100 %100 %100 %100 %Admin & Professional100 %100 %100 %100 %100 %Sales & Ops Managers-100 %100 %100 %100 %Sales & Ops Staff-100 %100 %100 %100 %Female100 %100 %100 %100 %100 %Director / Top management100 %100 %100 %100 %100 %Admin & Professional100 %100 %100 %100 %100 %Sales & Ops Managers-100 %100 %100 %100 %Sales & Ops Staff-100 %100 %100 %100 %405-1 DIVERSITY OF GOVERNANCE BODIES AND EMPLOYEESHQEUROPE, MIDDLE EAST & AFRICAASIA PACIFICNORTH AMERICACENTRAL & SOUTH AMERICAIN %Director / Top management% male88.9 %66.7 %10.5 %63.9 %85.7 %% female11.1 %33.3 %89.5 %36.1 %14.3 %% minority groupsn/an/an/an/an/a% < 30 years0.0 %0.0 %0.0 %0.0 %0.0 %% 30 – 50 years32.0 %33.3 %0.0 %0.0 %0.0 %% > 50 years68.0 %66.7 %100.0 %100.0 %100.0 %Admin & Professional% male49.6 %51.0 %51.5 %41.4 %60.1 %% female50.4 %49.0 %48.5 %58.6 %39.9 %% minority groupsn/an/an/an/an/a% < 30 years3.6 %11.3 %19.5 %9.9 %10.1 %% 30 – 50 years75.9 %67.4 %69.5 %53.4 %64.1 %% > 50 years20.5 %21.3 %11.0 %36.6 %25.8 %Sales & Ops Managers% male-49.3 %69.5 %38.2 %46.7 %% female-50.7 %30.5 %61.8 %53.3 %% minority groupsn/an/an/an/an/a% < 30 years-1.9 %2.2 %7.6 %6.8 %% 30 – 50 years-53.9 %60.0 %59.1 %76.0 %% > 50 years-44.2 %37.8 %33.3 %17.2 %Sales & Ops Managers% male-33.2 %22.1 %26.0 %35.0 %% female-66.8 %77.9 %74.0 %65.0 %% minority groupsn/an/an/an/an/a% < 30 years-18.7 %37.5 %17.0 %25.0 %% 30 – 50 years-57.7 %50.7 %43.1 %64.8 %% > 50 years-23.6 %11.8 %39.9 %10.2 % Sustainability Report 2020 Annex
406-1 INCIDENTS OF DISCRIMINATION AND CORRECTIVE
ACTIONS TAKEN
# OF INCIDENTS
Total number
Remediation plans implemented
Remediation plan implemented
and under supervision
Incidents no longer subject to action
EUROPE,
MIDDLE EAST &
AFRICA
HQ
ASIA
PACIFIC
NORTH
AMERICA
CENTRAL &
SOUTH
AMERICA
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
410-1 SECURITY PERSONNEL TRAINED IN HUMAN RIGHTS
POLICIES OR PROCEDURES
Dufry does not employ in-house security personnel of its own. This is largely due to
the fact that its retail stores are overwhelmingly located in airports, railway stations
and on cruise ships (96 % of 2020 global sales), where security is already strict and
generally provided by the airport authority or cruise line itself. Where security per-
sonnel are required and contracted, Dufry expects its security service contractors
to act in a manner consistent with local and national laws as well as with applicable
human rights standards. Dufry outsources this service to trustworthy providers, reg-
ulated by local governments and with a reputable track-record of services, includ-
ing the respect for human rights. We have not recorded for the period any case of
human rights or any other type of abuse by the security personnel hired by Dufry.
PUBLIC POLICY
415
Dufry considers important to engage in discussions with various stakeholders – from
policymakers, legislators and regulators to representatives of the business commu-
nity and society – to understand the issues that are important and to help find con-
structive solutions to current challenges.
When it comes to political and charitable contributions, as established in the Dufry
Code of Conduct, Dufry requires strict adherence to applicable laws and disclosure
requirements in relation to political and charitable contributions and sponsorships.
A Donation should be avoided where it would create the impression that it is made in
exchange for a business advantage for Dufry.
Dufry does not make direct or indirect contributions to political causes that can pres-
ent corruption risks, because they can be used to exert undue influence on the po-
litical process.
415-1 POLITICAL CONTRIBUTIONS
IN CHF
Total number
EUROPE,
MIDDLE EAST &
AFRICA
ASIA
PACIFIC
NORTH
AMERICA
CENTRAL &
SOUTH
AMERICA
0
0
0
0
HQ
0
416-1
ASSESSMENT OF THE HEALTH AND SAFETY IMPACTS OF PRODUCT
AND SERVICE CATEGORIES
We are committed to ensuring that every product we sell is safe. Our procurement
teams focus on preventing issues occurring by sourcing products from a reliable sup-
ply base. Dufry does not sell own-brand products.
Some of the products that Dufry sells are heavily regulated – especially alcohol and
tobacco but also beauty and food. Dufry complies with all regulations and rules re-
lated to the products sold in the countries where it operates.
8/8
GRI
CONTENT
INDEX
2020
GRI CONTENT INDEX 2020
DUFRY SUSTAINABILITY REPORT 2020
GRI
CONTENT
INDEX
2020
Page indications in this Index refer to the 2020 Dufry Annual Report unless otherwise noted.
* Dufry 2020 Sustainability Report applies the 2016 & 2018 version of the Global Reporting Initiative (GRI) Standards;
2016* and 2018* refer to the Standards issue date, not the date of the information presented in this report.
DISCLOSURE DESCRIPTION
SDG
PAGE NUMBER(S) AND/OR URL(S)
REASONS FOR OMISSIONS/COMMENTS
2/8
GRI 102: GENERAL DISCLOSURES 2016*ORGANIZATIONAL PROFILE102-1Name of the organizationDufry AG.102-2Activities, brands, products and servicesPages 30 – 39; 58 – 61; 62 – 63; 85 – 88102-3Location of headquartersBrunngässlein 12, 4052 Basel, Switzerland.102-4Location of operationsPages 56 – 57102-5Ownership and legal formPages 231 – 232102-6Markets servedPages 40 – 57102-7Scale of the organizationPages 4; 231102-8Information on employees and other workers10.3Pages 95 – 102, Sustainability Report Annex and https://www.dufry.com/en/sustainability-dufry102-9Supply chainPages 62 – 63; 90 – 92102-10Significant changes to the organization and its supply chain.102-11Precautionary Principle or approachPage 89102-12External initiativesDufry is a signatory member of the UN Global Compact. Page 78102-13Membership of associations Page 107 and www.dufry.com/en/company/our-stakeholdersSTRATEGY 102-14Statement from senior decision-makerPages 8 – 15102-15Key impacts, risks, and opportunitiesPages 74 – 75; 80 – 82; 189; 201 – 209; 245ETHICS AND INTEGRITY102-16Values, principles, standards, and norms of behavior16.3Pages 104 – 105; Dufry Code of Conduct; www.dufry.com (Sustainability, Careers and Company sections)102-17Mechanisms for advice and concerns about ethics16.3Page 105; Dufry Code of Conduct; www.dufry-compliance.com & www.dufry.com/en/sustainability-dufryGOVERNANCE102-18Governance structurePages 231 – 245102-20Executive-level responsibility for economic, environmental, and social topicsPage 77102-22Composition of the highest governance body and its committees5.5, 16.7Pages 231 – 245102-23Chair of the highest governance body16.6Page 237102-24Nominating and selecting the highest governance body5.5, 16.7Page 241102-26Role of highest governance body in setting purpose, values, and strategyPage 77102-30Effectiveness of risk management processes Page 244 – 245102-35Remuneration policiesPage 256 – 258102-36Process for determining remuneration Page 256 – 258 GRI CONTENT INDEX 2020
DUFRY SUSTAINABILITY REPORT 2020
DISCLOSURE DESCRIPTION
SDG
PAGE NUMBER(S) AND/OR URL(S)
REASONS FOR OMISSIONS / COMMENTS
3/8
GRI 102: GENERAL DISCLOSURES 2016* (CONT.)STAKEHOLDER ENGAGEMENT102-40List of stakeholder groupsPages 72; 106 – 107; www.dufry.com/en/sustainability-dufry.102-41Collective bargaining agreements8.8Pages 101 – 102; Sustainability Report Annex and www.dufry.com/en/careers102-42Identifying and selecting stakeholdersPages 72; 80 – 82102-43Approach to stakeholder engagementPages 58 – 60; 62 – 64; 69, 85 – 88; 101 – 102; 106 – 108; Media & Investor Releations sections at www.dufry.com102-44Key topics and concerns raisedPage 80 – 82; 84REPORTING PRACTICE102-45Entities included in the consolidated financial statementsPages 226 – 227102-46Defining report content and topic BoundariesSustainability Report Annex102-47List of material topicsPages 81; 84102-48Restatements of informationNone.102-49Changes in reportingNone.102-50Reporting period2020.102-51Date of most recent reportSustainability Report Annex and www.dufry.com/en/sustainability-dufry102-52Reporting cycleSustainability Report Annex and www.dufry.com/en/sustainability-dufry102-53Contact point for questions regarding the reportSustainability Report Annex and www.dufry.com/en/sustainability-dufry102-54Claims of reporting in accordance with the GRI StandardsSustainability Report Annex and www.dufry.com/en/sustainability-dufry102-55GRI content indexSustainability Report Annex and www.dufry.com/en/sustainability-dufry102-56External assuranceNo.GRI 201: ECONOMIC PERFORMANCE 2016* GRI 103: MANAGEMENT APPROACH 103-1Explanation of the material topic and its boundaryPages 4; 8 – 15; 22 – 23; 108103-2The management approach and its components Pages 4; 8 – 15; 22 – 23; 108.103-3Evaluation of the management approachPages 4; 8 – 15; 22 – 23; 108.201-1Direct economic value generated and distributed8.1, 8.2, 9.1, 9.4, 9.5Page 108201-2Financial implications and other risks and opportunities due to climate change13.1Sustainability Report Annex 201-3Defined benefit plan obligations and other retirement plansPages 138 – 139; 151; 198 – 204201-4Financial assistance received from governmentNone.GRI 202: MARKET PRESENCE 2016* GRI 103: MANAGEMENT APPROACH 103-1Explanation of the material topic and its boundaryPages 40 – 57103-2The management approach and its components Pages 40 – 57 103-3Evaluation of the management approachPages 40 – 57202-1Ratios of standard entry level wage by gender compared to local minimum wage1.2, 5.1, 8.5Sustainability Report Annex 202-2Proportion of senior management hired from the local communitySustainability Report Annex GRI CONTENT INDEX 2020
DUFRY SUSTAINABILITY REPORT 2020
DISCLOSURE DESCRIPTION
SDG
PAGE NUMBER(S) AND/OR URL(S)
REASONS FOR OMISSIONS / COMMENTS
4/8
GRI 204: PROCUREMENT PRACTICES 2016* GRI 103: MANAGEMENT APPROACH 103-1Explanation of the material topic and its boundaryPage 62103-2The management approach and its components Page 62103-3Evaluation of the management approachPage 62204-1Proportion of spending on local suppliers8.3Sustainability Report Annex GRI 205: ANTI-CORRUPTION 2016* GRI 103: MANAGEMENT APPROACH 103-1Explanation of the material topic and its boundaryPages 104 – 106; Dufry Code of Conduct; www.dufry.com/en/sustainability-dufry103-2The management approach and its components Pages 104 – 106; Dufry Code of Conduct; www.dufry.com/en/sustainability-dufry103-3Evaluation of the management approachPages 104 – 106; Dufry Code of Conduct; www.dufry.com/en/sustainability-dufry205-2Communication and training about anti-corruption policies and procedures16.5Page 105GRI 206: ANTI-COMPETITIVE BEHAVIOR 2016* GRI 103: MANAGEMENT APPROACH 103-1Explanation of the material topic and its boundaryPages 104 – 106; Dufry Code of Conduct; www.dufry.com/en/sustainability-dufry103-2The management approach and its components Pages 104 – 106; Dufry Code of Conduct; www.dufry.com/en/sustainability-dufry103-3Evaluation of the management approachPages 104 – 106; Dufry Code of Conduct; www.dufry.com/en/sustainability-dufry206-1Legal actions for anti-competitive behavior, anti-trust, and monopoly practices16.3During 2020, Dufry didn´t have any legal action for competitive behavior, anti-trust and monopoly practice.GRI 301: MATERIALS 2016* GRI 103: MANAGEMENT APPROACH 103-1Explanation of the material topic and its boundaryPages 89; 93 – 94103-2The management approach and its components Pages 89; 93 – 94103-3Evaluation of the management approachPages 89; 93 – 94301-3Reclaimed products and their packaging materials8.4, 12.2N/A.Due to the nature of our business, we don´t reclaim products.GRI 302: ENERGY 2016* GRI 103: MANAGEMENT APPROACH 103-1Explanation of the material topic and its boundaryPages 89; 90 – 91; 94103-2The management approach and its components Pages 89; 90 – 91; 94103-3Evaluation of the management approachPages 89; 90 – 91; 94302-1Energy consumption within the organization7.2, 7.3, 8.4, 12.2. 13.1Page 92. 92,333 MWh in 2020; 128,435 MWh in 2019The scope of the 2019 data represents 57 % of sales, whilst the 2020 data represents 64 % of sales, due to a larger number of Dufry entities reporting emissions data. Conversion rate: 10.96 kWh per liter of diesel302-3 Energy intensity8.4, 12.2, 13.1196.86 kWh/m2 in 2020273.27 kWh/m2 in 2019Energy Intensity calculated over the total square meters of commercial surface operated by Dufry (469,990 m2 in 2019 & 469,041 m2 in 2020) GRI CONTENT INDEX 2020
DUFRY SUSTAINABILITY REPORT 2020
DISCLOSURE DESCRIPTION
SDG
PAGE NUMBER(S) AND/OR URL(S)
REASONS FOR OMISSIONS / COMMENTS
GRI 305: EMISSIONS 2016
GRI 103: MANAGEMENT APPROACH
103-1
103-2
103-3
305-1
Explanation of the material topic and its
boundary
The management approach and its
components
Pages 89; 90 – 91
Pages 89; 90 – 91
Evaluation of the management approach
Pages 89; 90 – 91
Direct (Scope 1) GHG emissions
305-2
Energy indirect (Scope 2) GHG emissions
305-3
Other indirect (Scope 3) GHG emissions
305-4
GHG emissions intensity
Pages 92
Pages 92
Pages 92
Pages 92
3.9,
12.4,
13.1,
14.3,
15.2
3.9,
12.4,
13.1,
14.3,
15.2
3.9,
12.4,
13.1,
14.3,
15.2
3.9,
13.1,
14.3,
15.2
The scope of the 2019 data
represents 57 % of sales, whilst
the 2020 data represents 64 % of
sales, due to a larger number of
Dufry entities reporting emissions
data.
The scope of the 2019 data
represents 57 % of sales, whilst
the 2020 data represents 64 % of
sales, due to a larger number of
Dufry entities reporting emissions
data.
Scope limited to emissions from
logistic partners accounting for
55 % of Dufry´s total volume of
goods transported. Emissions are
calculated using Well-to-Wheel
methodology.
Carbon Intensity calculated over
the total square meters of
commercial surface operated by
Dufry (469,990 m2 in 2019 &
469,041 m2 in 2020)
GRI 307: ENVIRONMENTAL COMPLIANCE 2016
GRI 103: MANAGEMENT APPROACH
103-1
103-2
103-3
307-1
Explanation of the material topic and its
boundary
The management approach and its
components
Evaluation of the management approach
Page 89
Page 89
Page 89
Non-compliance with environmental laws
and regulations
16.3
During 2020, Dufry has not received
significant fines and non-monetary sanctions
for non-compliance with environmental
lawsand/or regulations.
GRI 401: EMPLOYMENT 2016*
GRI 103: MANAGEMENT APPROACH
103-1
103-2
103-3
401-1
Explanation of the material topic and its
Boundary
The management approach and its
components
Pages 95 – 96
Pages 95 – 96
Evaluation of the management approach
Pages 95 – 96
New employee hires and employee turnover 5.1, 8.5,
Sustainability Report Annex
8.6,
10.3
5/8
GRI CONTENT INDEX 2020
DUFRY SUSTAINABILITY REPORT 2020
DISCLOSURE DESCRIPTION
SDG
PAGE NUMBER(S) AND/OR URL(S)
REASONS FOR OMISSIONS / COMMENTS
GRI 402: LABOR/MANAGEMENT RELATIONS 2016*
GRI 103: MANAGEMENT APPROACH
103-1
103-2
103-3
402-1
Explanation of the material topic and its
boundary
The management approach and its
components
Pages 96 – 99
Pages 96 – 99
Evaluation of the management approach
Pages 96 – 99
Minimum notice periods regarding
operational changes
8.8
Sustainability Report Annex
GRI 403: OCCUPATIONAL HEALTH & SAFETY 2018*
MANAGEMENT APPROACH
403-1
403-2
403-3
403-4
403-5
Occupational health and safety
management system
Hazard identification, risk assessment,
and incident investigation
Occupational health services
Worker participation, consultation, and
communication on occupational health and
safety
Worker training on occupational health and
safety
403-6
Promotion of worker health
403-7
403-8
Prevention and mitigation of occupational
health and safety impacts directly linked by
business relationships
Workers covered by an occupational health
and safety management system
GRI 404: TRAINING & EDUCATION 2016*
GRI 103: MANAGEMENT APPROACH
8.8
8.8
8.8
8.8,
16.7
Pages 98 – 99
Pages 98 – 99
Pages 98 – 99
Pages 98 – 99
8.8
Pages 98 – 99
3.3, 3.5,
3.7, 3.8
Pages 98 – 99
8.8
Pages 98 – 99
8.8
Sustainability Report Annex
103-1
103-2
103-3
404-1
Explanation of the material topic and its
boundary
The management approach and its
components
Page 100; www.dufry.com/en/careers
Page 100; www.dufry.com/en/careers
Evaluation of the management approach
Page 100; www.dufry.com/en/careers
Average hours of training per year per
employee
4.3, 4.4,
4.5, 5.1,
8.2, 8.5
Sustainability Report Annex
GRI 405: DIVERSITY AND EQUAL OPPORTUNITY 2016*
GRI 103: MANAGEMENT APPROACH
103-1
103-2
Explanation of the material topic and its
boundary
The management approach and its
components
103-3
Evaluation of the management approach
405-1
Diversity of governance bodies and
employees
5.1, 5.5,
8.5
Pages 96 – 98; Dufry Code of Conduct;
www.dufry.com/en/careers
Pages 96 – 98; Dufry Code of Conduct;
www.dufry.com/en/careers
Pages 96 – 98; Dufry Code of Conduct;
www.dufry.com/en/careers
Sustainability Report Annex
Dufry´s HR system does not
currently track Minority Groups
data
6/8
GRI CONTENT INDEX 2020
DUFRY SUSTAINABILITY REPORT 2020
DISCLOSURE DESCRIPTION
SDG
PAGE NUMBER(S) AND/OR URL(S)
REASONS FOR OMISSIONS / COMMENTS
GRI 406: NON-DISCRIMINATION 2016*
GRI 103: MANAGEMENT APPROACH
103-1
103-2
Explanation of the material topic and its
boundary
The management approach and its
components
103-3
Evaluation of the management approach
Pages 96 – 98; Dufry Code of Conduct;
www.dufry.com/en/careers
Pages 96 – 98; Dufry Code of Conduct;
www.dufry.com/en/careers
Pages 96 – 98; Dufry Code of Conduct;
www.dufry.com/en/careers
406-1
Incidents of discrimination and corrective
actions taken
5.1, 8.8 Sustainability Report Annex
GRI 407: FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING 2016*
GRI 103: MANAGEMENT APPROACH
103-1
103-2
Explanation of the material topic and its
boundary
The management approach and its
components
103-3
Evaluation of the management approach
407-1
Operations and suppliers in which the right
to freedom of association and collective
bargaining may be at risk
8.8
GRI 410: SECURITY PRACTICES 2016*
GRI 103: MANAGEMENT APPROACH
Pages 101 – 102; Sustainability Report Annex
and www.dufry.com/en/careers
Pages 101 – 102; Sustainability Report Annex
and www.dufry.com/en/careers
Pages 101 – 102; Sustainability Report Annex
and www.dufry.com/en/careers
Dufry does not report any operation where
freedom of association and collective
bargaining is at risk. As per the suppliers, see
page of 107 Dufry Annual Report.
103-1
103-2
103-3
410-1
Explanation of the material topic and its
boundary
The management approach and its
components
Sustainability Report Annex
Sustainability Report Annex
Evaluation of the management approach
Sustainability Report Annex
Security personnel trained in human rights
policies or procedures
16.1
Sustainability Report Annex
GRI 414: SUPPLIER SOCIAL ASSESSMENT 2016*
GRI 103: MANAGEMENT APPROACH
103-1
103-2
103-3
414-1
Explanation of the material topic and its
boundary
The management approach and its
components
Page 107 and Dufry Supplier Code of Conduct
Page 107 and Dufry Supplier Code of Conduct
Evaluation of the management approach
Page 107 and Dufry Supplier Code of Conduct
New suppliers that were screened using
social criteria.
N/A
5.2,
8.8,
16.1
GRI 415: PUBLIC POLICY 2016*
GRI 103: MANAGEMENT APPROACH
103-1
103-2
103-3
415-1
Explanation of the material topic and its
boundary
The management approach and its
components
Sustainability Report Annex
Sustainability Report Annex
Evaluation of the management approach
Sustainability Report Annex
Political contributions
16.5
Sustainability Report Annex
Dufry does not report specific
numbers or percentages
related to screening or impact
assessments, as this information
is subject to confidentiality
constraints.
7/8
GRI CONTENT INDEX 2020
DUFRY SUSTAINABILITY REPORT 2020
DISCLOSURE DESCRIPTION
SDG
PAGE NUMBER(S) AND/OR URL(S)
REASONS FOR OMISSIONS / COMMENTS
GRI 416: CUSTOMER HEALTH AND SAFETY 2016*
GRI 103: MANAGEMENT APPROACH
103-1
103-2
103-3
416-1
Explanation of the material topic and its
boundary
The management approach and its
components
Evaluation of the management approach
Assessment of the health and safety
impacts of product and service categories
GRI 417: MARKETING AND LABELING 2016*
GRI 103: MANAGEMENT APPROACH
Page 59
Page 59
Page 59
Sustainability Report Annex
103-1
103-2
103-3
417-1
417-2
Explanation of the material topic and its
boundary
The management approach and its
components
Pages 59 – 60
Pages 59 – 60
Evaluation of the management approach
Pages 59 – 60
Requirements for product and service
information and labeling
12.8
Pages 59 – 60
Incidents of non-compliance concerning
product and service information and
labeling
16.3
417-3
Incidents of non-compliance concerning
marketing communications
16.3
During 2020, Dufry has not been notified
through the available channels of any
significant sanction for non-compliance
concerning product and service information
and labeling.
During 2020, Dufry has not been notified
through the available channels of any
significant sanction for non-compliance
concerning marketng communications.
GRI 418: CUSTOMER PRIVACY 2016*
GRI 103: MANAGEMENT APPROACH
103-1
103-2
103-3
418-1
Explanation of the material topic and its
boundary
The management approach and its
components
Evaluation of the management approach
Page 60
Page 60
Page 60
Substantiated complaints concerning
breaches of customer privacy and losses of
customer data
16.3,
16.10
During 2020, Dufry has not been notified
through the available channels of any
significant sanction for the breach of the
customer´s privacy and personal data
protection rules.
GRI 419: SOCIO-ECONOMIC COMPLIANCE 2016*
GRI 103: MANAGEMENT APPROACH
103-1
103-2
103-3
419-1
Explanation of the material topic and its
boundary
The management approach and its
components
Page 103
Page 103
Evaluation of the management approach
Page 103
Non-compliance with laws and regulations
in the social and economic area
16.3
During 2020, Dufry has not been notified
through the available channels of any
significant sanction for non-compliance with
applicable laws and regulations.
8/8
UN GLOBAL COMPACT
COMMUNICATION
ON PROGRESS
2020
The Dufry Group UN Global Compact – Communication on Progress 2020
STATEMENT
OF THE CHIEF
EXECUTIVE
OFFICER
2020 has been a challenging year for Dufry. With our
business considerably impacted by the COVID-19 pan-
demic, our efforts have been focused on safeguarding
the resilience of the company by implementing the
necessary financial initiatives, adapting the company
structure to the new trading environment and, hence,
preparing the business for recovery and secure future
development.
The pandemic however, has not stopped our determi-
nation to keep evolving our Environmental, Social and
Governance (ESG) engagement and continue along the
path initiated years ago. This is our first year as a sig-
natory member of the UN Global Compact principles
and we feel proud of the progress made towards build-
ing a more sustainable company.
Amongst other achievements, we have revised Dufry’s
ESG Strategy by defining four key focus areas. These
areas are a reflection of our business model, build on
our stakeholder eco-system and clearly define the
scope where we can make positive contribution to
maintain a high standard of environmental steward-
ship. Our ESG strategy, which is a cornerstone of our
company strategy and governance structure, is de-
scribed in detail in Dufry´s Annual Report 2020 avail-
able at www.dufry.com.
In 2020, we have also set the base to measure our
greenhouse gas (GHG) emissions, by establishing the
relevant processes and collecting the respective en-
ergy consumption data. This has allowed us to start
determining our carbon footprint and identify im-
provement opportunities going forward. Moreover, we
have successfully completed the re-certification pro-
cess of the Equal Salary Certification in Switzerland,
which we first achieved in 2019, and which includes all
functions and operations based in Switzerland.
There are a number of ongoing initiatives that will con-
tinue over the coming years, including our continuous
fight against bribery and corruption, collaboration
with our partners to protect human rights and labor
standards as well as initiatives to reduce our environ-
mental impact, such as the replacement of plastic car-
rier bags with more environmentally-friendly options
which we will implement over the next few months. As
a signatory to the United Nations Global Compact,
Dufry remains committed to the Ten Principles and will
keep working towards integrating them into the day-
to-day operations of our company.
Julián Díaz González
Group CEO, Dufry
PrincipleOur visionSpecific MeasuresHUMAN RIGHTS & LABORPrinciple 1: Businesses should support and respect the protection of international human rights.Principle 2: Business should make sure that they are not complicit in human rights abuses.Dufry´s commitment to Human Rights is addressed in the Dufry Code of Conduct and the Dufry Supplier Code of Conduct. Both of these codes are built on the basis of globally recognized principles – like those established by the International Labor Organization (ILO) and the United Nations – and set the expected behavior of both Dufry employees and its suppliers when it comes to the protection of Human Rights and Labor Practices. Both of the codes are publicly available at the company´s website www.dufry.comDufry also has strong internal compliance bodies and mechanisms to ensure that its employees are educated in the matter and to control the existing codes and policies regarding the protection of Human Rights. More details are available in the Trusted Partner chapter of Dufry´s 2020 ESG Report.✔ During 2020, we have updated the Dufry’s Code of Conduct and the Dufry Supplier Code of Conduct to strengthen our commitment to the protection of Human Rights, both internally and externally with our suppliers. Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.Dufry respects legally recognized unions and internal forums created to represent its employees’ interests as well as the right of its employees to collective bargaining. In this regard, the company has a policy tailored to each location, subject to the specific laws and regulations. More information is available under the Freedom of Association section of the Employee Experience chapter of Dufry´s 2020 ESG Report.Principle 4: Businesses should uphold the elimination of all forms of forced and compulsory labor.Principle 5: Businesses should uphold the effective abolition of child labor.Principle 6: Businesses should uphold the elimination of discrimination with respect to employment and occupational activities.We offer and promote working environments where everyone receives equal treatment, regardless of gender, color, ethnic or national origins, disability, age, marital status, sexual orientation or religion. In addition, we adhere to local legislation and regulations in all the countries where we operate. Any kind of child labor or forced labor is strictly forbidden and clear recruitment procedures and regular workplace controls ensure that this never occurs at any location.Additional information is available in Dufry´s Code of Conduct, Dufry´s Supplier Code of Conduct and the Employee Experience chapter of Dufry´s 2020 ESG Report.✔ Recertification of Equal Salary Certification in Switzerland successfully completed.✔ Initiation of evolution process of our women@dufry initiative, extending its scope to diversity and inclusion.✔ Realignment of training and development program for employees.✔ Expansion of internal communication channels to improve reach to non-desktop employees.ENVIRONMENTAL PROTECTIONPrinciple 7: Businesses should support a precautionary approach to environmental challenges.Principle 8: Businesses should under-take initiatives to promote greater environmental responsibility.Principle 9: Businesses should encourage the development and diffusion of environmentally friendly technologies.Dufry follows a consistent process to assess its operations from an environmental perspective, to identify the current and future environmental impacts of its activities and to promote initiatives that respect the environmental balance.Additionally, the company undertakes initiatives geared to reduce the environmental impact of its operations and engages with other stakeholders – such as suppliers and airport partners – to collaborate in achieving this goal. More information is available in the Protecting Environment chapter of Dufry´s 2020 ESG Report.✔ During 2020, Dufry has adopted the precautionary approach.✔ Actively engaging with our logistics partners to assess our environmental footprint and eventually implement measures to minimize impact.✔ We have created the plan to replace plastic carrier bags with more sustainable options, starting in 2021.✔ Mapping of Dufry´s GHG emissions including data from operations representing 64% of our global sales as well as the vast majority of the logistics network.✔ More information available in the Environmental Management Section in the Protecting the Environment chapter of Dufry’s ESG Report. ANTI-CORRUPTIONPrinciple 10: Businesses should work against corruption in all its forms, including extortion and bribery.As stipulated in Dufry’s Code of Conduct and Supplier Code of Conduct, Dufry has a zero tolerance policy towards bribery and corruption. In this regard, the company has established strong control and education bodies to ensure all of its employees understand the company´s position and guarantee compliance with the principles established in the Dufry Code of Conduct. More information is available in the Trusted Partner chapter of Dufry´s 2020 ESG Report.✔ Over 900 managers at all levels of the organization have completed this training. Dufry employees who are not included in the list above, are familiarized with Dufry’s governance and corporate policies . 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, Horgen
Design, Production hilda design matters, Zurich
Print Neidhart + Schön Group AG, Zurich
© Dufry AG 2021
Dufry – Leading Global Travel Retailer