Dufry AG
Annual Report 2023

Plain-text annual report

l a u n n A t r o p e R 3 2 0 2 UG2 with flap inside You have You have reached reached your your destination. destination. s s e n i s u B w e i v e R 3 2 0 2 s s e n s u B i i w e v e R 3 2 0 2 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 6/336 Annual Report 2023 Content Management Report 5 – 96 16 – 20 Statement from the Chief Executive Officer 8 – 9 Avolta at a Glance 10 – 11 Highlights 2023 12 – 15 Message from the Chairman of the Board of Directors 21 Organizational Structure 22 – 23 Avolta Investment Case 24 – 25 Board of Directors 26 – 27 Global Executive Committee 28 – 55 Avolta Vision & Strategy (see also Brand Poster in front cover) 56 – 75 Avolta Regions & Locations 76 – 96 Customers, Concession Partners, Investors, Suppliers ESG Report 97 – 148 337 ff 97 – 148 ESG Report 2023 337 ff ESG Report 2023 Annex 337 ff GRI Content Index 2023 337 ff TCFD Report Financial Report 149 – 278 150 – 154 Report from the Chief Financial Officer 155 – 255 Financial Statements 156 – 255 Consolidated Financial Statements 256 – 270 Financial Statements Avolta AG 271 – 277 Alternative Performance Measures Governance Report 279 – 333 279 – 309 Corporate Governance 311 – 333 Remuneration Report 334 Information for Investors and Media 335 Address Details of Headquarters Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 7/336 Annual Report 2023 Content Management Report 5 – 96 8 – 9 Avolta at a Glance 10 – 11 Highlights 2023 12 – 15 Message from the Chairman of the Board of Directors Statement from the Chief Executive Officer 16 – 20 21 Organizational Structure 22 – 23 Avolta Investment Case 24 – 25 Board of Directors 26 – 27 Global Executive Committee 28 – 55 Avolta Vision & Strategy (see also Brand Poster in front cover) Avolta Regions & Locations 56 – 75 76 – 96 Customers, Concession Partners, Investors, ESG Report 97 – 148 337 ff Suppliers 97 – 148 ESG Report 2023 337 ff ESG Report 2023 Annex 337 ff GRI Content Index 2023 337 ff TCFD Report Financial Report 149 – 278 150 – 154 Report from the Chief Financial Officer 155 – 255 Financial Statements 156 – 255 Consolidated Financial Statements 256 – 270 Financial Statements Avolta AG 271 – 277 Alternative Performance Measures Governance Report 279 – 333 279 – 309 Corporate Governance 311 – 333 Remuneration Report Information for Investors and Media 334 335 Address Details of Headquarters Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 8/336 Avolta at a glance CORE Turnover in millions of CHF CORE EBITDA in millions of CHF 12,535 CORE Net Profit Equity Holders Equity Free Cash Flow in millions of CHF in millions of CHF 8,849 6,878 1,130 885 236 308 Net Sales by Region Net Sales by Product Category 8 % Other 1 % Literature & Publications 2 % Electronics 6 % Luxury Goods 30 % F&B 4 % Asia Pacific 13 % Latin America 32 % North America 10 % Wine & Spirits 11 % Tobacco Goods 51 % Europe, Middle East and Africa EMEA 13 % Food & Confectionary 19 % Perfumes & Cosmetics 3,915 606 2,561 386 106 314 323 305 2 % Cruise Liners 4 % Railway Stations and Seaports and Other 2 % Borders, Downtown and Hotel Shops 10 % Motorways 31 % Duty-Paid 37 % Duty-Free Net Sales by Channel Net Sales by Market Sector 20 20 21 20 21 19 20 21 22 23 19 21 22 23 19 22 23 19 22 23 – 877 – 236 – 1,323 –33 – 1,027 82 % Airports 32 % F&B Avolta at a glance CORE Turnover in millions of CHF CORE EBITDA in millions of CHF 12,535 CORE Net Profit Equity Free Equity Holders Cash Flow in millions of CHF in millions of CHF 8,849 6,878 1,130 885 236 308 3,915 606 2,561 386 106 19 20 21 22 23 19 21 22 23 19 22 23 19 22 23 20 – 877 20 21 20 21 – 236 – 1,323 –33 – 1,027 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 9/336 Net Sales by Region Net Sales by Product Category 4 % Asia Pacific 13 % Latin America 32 % North America 8 % Other 1 % Literature & Publications 2 % Electronics 6 % Luxury Goods 30 % F&B 10 % Wine & Spirits 11 % Tobacco Goods 51 % Europe, Middle East and Africa EMEA 13 % Food & Confectionary 19 % Perfumes & Cosmetics Net Sales by Channel Net Sales by Market Sector 314 323 305 2 % Cruise Liners and Seaports 4 % Railway Stations and Other 2 % Borders, Downtown and Hotel Shops 10 % Motorways 31 % Duty-Paid 37 % Duty-Free 82 % Airports 32 % F&B Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 10/336 Highlights 2023 Avolta – new company name launched and business combination completed. On November 3, 2023, Dufry’s shareholders approved the name change to Avolta, with an overwhelming majority of 99.77 % of the votes represented. The business combination – now under the new common name Avolta – has been successfully completed. CHF 12,534.6 million CORE Turnover, 21.6 % CORE organic growth and 9.0 % CORE EBITDA margin. Resilient travel demand with spend-per-passenger above pre-pandemic levels, resulted in strong CORE organic growth of 21.6 % YoY. Target CORE EBITDA margin was reached ahead of time. Full CHF 85 million synergies expected in 2024, one year ahead of plan. In 2023 CHF 30 million business combination syner- gies were realized, setting the base to deliver the full CHF 85 million in 2024, one year ahead of plan. Integration costs were cut by half with respect to the former estimated CHF 100 million and amount to CHF 25 million in each of the business years 2023 and 2024. Net debt position further decreased to lowest level since 2015. Avolta’s net debt further decreased ahead of plan and reached CHF 2,696.1 million as of December 31, 2023, meeting covenant thresholds ahead of the required timing. Strong cash flow generation confirmed. Avolta confirmed its strong cash flow generation capability with Equity Free Cash Flow (EFCF) reaching above target CHF 323.0 million in FY 2023. 40 % Electricity consumption replaced with renewable energy. In line with its target to eleminate emissions for Scopes 1 & 2 by 2025 for its retail business (Dufry scope base 2019), Avolta has increased the replacement of elec- tric energy consumption with renewable energy sources from 20 % in 2022 to 40 % in 2023. Joint ESG Strategy and Materiality Matrix implemented. Avolta’s TCFD report extended to cover full company scope. As one of the key business combination steps in 2023, In 2023, Avolta has further extended the scope of its Avolta has developed and implemented a fully inte- TFCD Report – first published in early 2023 – to now grated ESG Strategy and defined the new double mate- cover the full scope of the combined company. riality matrix for the combined company. Successful extension of the Spanish conces- sion contracts. In 2023, Avolta successfully renewed the vast majority of its Spanish airport operation concession contracts for twelve years. The new contract encapsulates 21 air- ports with 120 outlets covering around 60,000 m2 and serving approximately 132 million travellers annually (base 2019). Highlights 2023 Avolta – new company name launched and business combination CHF 12,534.6 million CORE Turnover, 21.6 % CORE organic growth completed. On November 3, 2023, Dufry’s shareholders approved the name change to Avolta, with an overwhelming majority of 99.77 % of the votes represented. The business combination – now under the new common name Avolta – has been successfully completed. and 9.0 % CORE EBITDA margin. Resilient travel demand with spend-per-passenger above pre-pandemic levels, resulted in strong CORE organic growth of 21.6 % YoY. Target CORE EBITDA margin was reached ahead of time. Full CHF 85 million synergies expected in 2024, one year ahead of plan. In 2023 CHF 30 million business combination syner- gies were realized, setting the base to deliver the full CHF 85 million in 2024, one year ahead of plan. Integration costs were cut by half with respect to the former estimated CHF 100 million and amount to CHF 25 million in each of the business years 2023 and 2024. Net debt position further decreased to lowest level since 2015. Avolta’s net debt further decreased ahead of plan and reached CHF 2,696.1 million as of December 31, 2023, meeting covenant thresholds ahead of the required timing. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 11/336 Strong cash flow generation confirmed. Avolta confirmed its strong cash flow generation capability with Equity Free Cash Flow (EFCF) reaching above target CHF 323.0 million in FY 2023. 40 % Electricity consumption replaced with renewable energy. In line with its target to eleminate emissions for Scopes 1 & 2 by 2025 for its retail business (Dufry scope base 2019), Avolta has increased the replacement of elec- tric energy consumption with renewable energy sources from 20 % in 2022 to 40 % in 2023. Joint ESG Strategy and Materiality Matrix implemented. Avolta’s TCFD report extended to cover full company scope. As one of the key business combination steps in 2023, Avolta has developed and implemented a fully inte- grated ESG Strategy and defined the new double mate- riality matrix for the combined company. In 2023, Avolta has further extended the scope of its TCFD Report – first published in early 2023 – to now cover the full scope of the combined company. Successful extension of the Spanish conces- sion contracts. In 2023, Avolta successfully renewed the vast majority of its Spanish airport operation concession contracts for twelve years. The new contract encapsulates 21 air- ports with 120 outlets covering around 60,000 m2 and serving approximately 132 million travellers annually (base 2019). Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 12/336 Message from the Chairman of the Board of Directors Dear Shareholders, Throughout 2023 the travel retail and F&B industry saw a strong momen- tum in demand and an ongoing resil- ient recovery. Airlines, airports, and The emergence of the new global travel experience player is now a reality. improved CORE EBITDA margin of 9.0 % despite ongoing geopolitical and macroeconomic challenges. Equity Free Cash Flow (EFCF) reached CHF 323.0 million (Dufry FY reported other travel channel operators contin- Third – the culminating and unifying 2022: CHF 305.2 million) thus exceed- ued to build up capacities to manage element in our transformation – we ing our expectations at the beginning the steadily increasing number of renamed our company from Dufry to of the year. The overall positive trend travelers. Avolta. The new name reflects our ex- in results is evident in our CORE Net panded scope and offers an enriched Profit, which rose to CHF 456.8 million This was a welcome evolution, con- set of opportunities for all our stake- (compared to CHF 244.1 million pro- firming the historic resilience of the holders, in particular, for you as our forma in 2022). travel retail and F&B industry. Despite valued shareholders. temporary disruptions, society’s will- Upon antitrust authority approval of ingness to travel remained unbroken, From a performance standpoint, we the Dufry-Autogrill business combina- and we expect this momentum to benefitted from a global increase in tion and the transfer of Edizione’s continue into 2024. demand, bolstered by our customers’ 50.3 % stake in Autogrill on February unwavering propensity to travel and 3, 2023, the integration process for the In addition to the favourable environ- to spend. These positive trends are re- combined company commenced, with ment, three key developments shaped flected in our operational results. the immediate announcement of the Avolta’s evolution: long-term growth, new high-level organization. We made sustainable profits and robust cash- Our Consolidated CORE Turnover rose substantial progress in the integration flow in the 2023 business year. significantly, reaching CHF 12,534.6 process, including early realization of First, we sustained consistently high million), with CORE Organic growth of pleted the business combination with operational performance, building on 21.6 % on the previous year proforma. Autogrill, achieving 100 % ownership the acceleration seen in 2022. of Autogrill shares and subsequently million (2022 proforma: CHF 10,804.8 synergies. On July 24, 2023, we com- Our full-year 2023 CORE EBITDA, delisting Autogrill from the Milan stock Second, we completed critical mile- relying on strong commercial perfor- exchange. stones in the business combination mance, increased productivity, and with Autogrill, a pivotal component of early synergy effects, amounted to The transition from Dufry AG to Avolta our «Destination 2027» strategy. CHF 1,129.6 million (2022 proforma: AG, marked by the change in our CHF 941.4 million), equal to a further company name, represents the final For a glossary of financial terms and Alternative Performance Measures please see page 271 of this Annual Report. Avolta is a global travel experience player operating over 5,100 travel retail shops and restaurants across six continents. Juan Carlos Torres Carretero Chairman of the Board of Directors Message from the Chairman of the Board of Directors Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 13/336 Dear Shareholders, Throughout 2023 the travel retail and F&B industry saw a strong momen- tum in demand and an ongoing resil- ient recovery. Airlines, airports, and other travel channel operators contin- ued to build up capacities to manage the steadily increasing number of travelers. This was a welcome evolution, con- firming the historic resilience of the travel retail and F&B industry. Despite temporary disruptions, society’s will- ingness to travel remained unbroken, and we expect this momentum to continue into 2024. In addition to the favourable environ- ment, three key developments shaped Avolta’s evolution: long-term growth, sustainable profits and robust cash- flow in the 2023 business year. First, we sustained consistently high operational performance, building on the acceleration seen in 2022. Second, we completed critical mile- stones in the business combination with Autogrill, a pivotal component of our «Destination 2027» strategy. For a glossary of financial terms and Alternative Performance Measures please see page 271 of this Annual Report. The emergence of the new global travel experience player is now a reality. Third – the culminating and unifying element in our transformation – we renamed our company from Dufry to Avolta. The new name reflects our ex- panded scope and offers an enriched set of opportunities for all our stake- holders, in particular, for you as our valued shareholders. From a performance standpoint, we benefitted from a global increase in demand, bolstered by our customers’ unwavering propensity to travel and to spend. These positive trends are re- flected in our operational results. Our Consolidated CORE Turnover rose significantly, reaching CHF 12,534.6 million (2022 proforma: CHF 10,804.8 million), with CORE Organic growth of 21.6 % on the previous year proforma. Our full-year 2023 CORE EBITDA, relying on strong commercial perfor- mance, increased productivity, and early synergy effects, amounted to CHF 1,129.6 million (2022 proforma: CHF 941.4 million), equal to a further improved CORE EBITDA margin of 9.0 % despite ongoing geopolitical and macroeconomic challenges. Equity Free Cash Flow (EFCF) reached CHF 323.0 million (Dufry FY reported 2022: CHF 305.2 million) thus exceed- ing our expectations at the beginning of the year. The overall positive trend in results is evident in our CORE Net Profit, which rose to CHF 456.8 million (compared to CHF 244.1 million pro- forma in 2022). Upon antitrust authority approval of the Dufry-Autogrill business combina- tion and the transfer of Edizione’s 50.3 % stake in Autogrill on February 3, 2023, the integration process for the combined company commenced, with the immediate announcement of the new high-level organization. We made substantial progress in the integration process, including early realization of synergies. On July 24, 2023, we com- pleted the business combination with Autogrill, achieving 100 % ownership of Autogrill shares and subsequently delisting Autogrill from the Milan stock exchange. The transition from Dufry AG to Avolta AG, marked by the change in our company name, represents the final Avolta is a global travel experience player operating over 5,100 travel retail shops and restaurants across six continents. Juan Carlos Torres Carretero Chairman of the Board of Directors Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 14/336 step in our transformative business combination. With a majority of 99.77 %, shareholders overwhelmingly endorsed the name change to Avolta at the Extraordinary General Meeting of Shareholders on November 3, 2023. This new name serves as a visual sym- bol, communicating the expanded scope of our combined entity. With its robust commercial foundation, diversified portfolio, and unwavering commitment to customer-centricity, Avolta opens new avenues of growth and further elevates our commitment to sustainability. Avolta represents a new home for our 76,962 team members worldwide, fostering a sense of belonging and unity throughout the entire team. In conjunction with the name change to Avolta, the ticker symbol for our shares on the SIX Swiss Exchange was updated to «AVOL» on November 9, 2023. As of December 31, 2023, Avolta’s market capitalization stood at CHF 5,048.5 million. Our shares commenced the 2023 business year at CHF 38.51, reaching a peak at the end of July at CHF 44.91 and then trended lower in a volatile stock market environment that was influenced by geopolitical and macro- economic effects. The year concluded with our shares closing at CHF 33.08. The average daily trading volume across all platforms was CHF 60.2 million, affirming the liquidity of our shares. The SIX Swiss Exchange re- mained a significant trading platform, where the average daily volume of Avolta shares reached CHF 19.2 mil- lion in 2023. Avolta’s trading volumes are mainly concentrated on the SIX 31.8 % and BATS Chi-X OTC 51.5 % platforms. As is our tradition, we maintained an ongoing dialogue with our shareholders and the financial community, engaging in over 1,190 interactions through roadshow or con- ference meetings, calls and emails. Continued support from shareholders, bondholders and lending banks. Reflecting the positive company per- formance, 2023 saw Avolta achieve several improvements in credit rat- ings. S & P Global Ratings upgraded Avolta’s credit ratings to BB, Outlook Stable in July, building upon an earlier upgrade in March. Moody’s Investor Service also revised Avolta’s credit rating to Ba3 with Outlook Positive in April, further affirming our financial health and promising outlook. At the General Meeting of Sharehold- ers in May 2023, shareholders had the opportunity to vote on several amendments to our Articles of Incor- poration – driven by the new Swiss Corporate Law enacted on January 1, 2023. All proposed agenda items were approved. At this AGM, we welcomed Mr. Sami Kahale as a new non-executive mem- ber of the Board of Directors. After his election, Sami Kahale joined as a member of the Audit Committee, the ESG Committee, and the Strategy & Integration Committee. On behalf of the entire Board of Directors, I extend our gratitude to our shareholders for their ongoing commitment and sup- port. Following the successful transfer of Edizione’s stake in Autogrill in Feb- ruary 2023, the Board of Directors created additional board committees, aligning with the new scope of the company. In this context, the former combined Nomination and ESG Committee was divided into two committees: the Nomination Committee and the ESG Committee. Additionally, the Board established the new Strategy & Inte- gration Committee. The existing Audit and Remuneration Committees con- tinue. In preparation for the 2024 General Meeting of Shareholders, the Board of Directors resolved to propose pay- ment of a dividend for the business year 2023. This marks a significant step as we resume dividend payments following pandemic-related suspen- sion. The Board of Directors will pro- pose the payment of an initial divi- dend of CHF 0.70 per Avolta share. Dividend payment for business year 2023 proposed. Aligned with our Destination 2027 strategy, our new capital allocation policy is designed to achieve profit- able growth, sustainable cash flow generation and value creation for our shareholders. To strike a balanced ap- proach encompassing deleveraging, growth, and returns to our sharehold- ers, we have earmarked two thirds of our Equity Free Cash Flow (EFCF) for purposes such as deleveraging, rele- vant business development and small bolt-on M & A activities, while one third of the company’s EFCF shall be allocated to dividends. Dufry sources 40 % of its electricity con- sumption from renew- able energy. In 2023, we initiated a full integration of the ESG engagement from the two legacy entities into a combined Avolta ESG Strategy, while expanding our ESG initiatives and progressing with existing programs. We have included ESG targets in the long-term incentive plan for manage- ment compensation, a practice we had started in 2022. Our newly formulated ESG strategy is based on a combined materiality matrix, which considers the expanded company scope and diverse stake- With respect to ongoing engage- they have come together, forming holder communities. ments, it is now the 14th year of our new teams, embracing new ways of contribution to SOS Children’s Vil- working and laying the foundation for This materiality matrix was developed lages initiatives in Brazil, Mexico, and the realization of our vision to revolu- through direct interactions with our Kenya. In a year where children and tionize the travel experience. stakeholders, complemented by families needed extra support, our thorough desk research, and adheres customers joined our efforts by pur- My gratitude extends to our conces- to the principle of double materiality. chasing our Captain Dufry plush bear, sion partners and brand suppliers for The revised focus areas are: Create dren’s Villages. In 2023, our commit- butions in strengthening our partner- the profits being donated to SOS Chil- their close collaboration and contri- Sustainable Travel Experiences, ment extended to community projects ships. Respect Our Planet, Empower Our in different parts of the world includ- People and Engage Local Communi- ing Switzerland, Greece, the United I look forward with confidence and ties. While laying the foundation for Kingdom, the United States, Canada, optimism to future journeys together, our future ESG engagement, we have Italy, Türkiye, Syria, Morocco. thanks to the long-standing rela- tionships and the ongoing trust of our business partners, shareholders, bondholders, and lending banks. expanded our existing initiatives – for example by augmenting the share of renewable energy in our electricity consumption (base year 2019) from We can't do it alone. 20 % to 40 %. I encourage you to ex- Our team members and manage- Sincerely, plore pages 97 – 148 for a detailed ment teams played an integral role, overview of our ESG Report and prog- generously contributing to the posi- ress in 2023. tive developments and achievements described above. We surpassed our targets for the year thanks to their un- wavering dedication, continued com- mitment, and collaborative teamwork. Ongoing strong engagement for our communities. I extend my heartfelt gratitude and Juan Carlos Torres Carretero offer a sincere thank you to every Our global community engagement single one of our team members for initiatives have continued to provide their support and continued motiva- support to communities in the mar- tion. kets where we operate. In 2023, we assisted team members and the com- I would like to express my apprecia- munities in Türkiye and Morocco fol- tion to our Avolta teams around the lowing the devastating earthquakes world for their exceptional dedication and provided support to the local in providing our customers with out- population in the areas most affected. standing service. At the same time, I look forward with confidence and optimism to future journeys together. step in our transformative business combination. With a majority of 99.77 %, shareholders overwhelmingly endorsed the name change to Avolta at the Extraordinary General Meeting of Shareholders on November 3, 2023. Continued support from shareholders, bondholders and lending banks. In preparation for the 2024 General Meeting of Shareholders, the Board of Directors resolved to propose pay- ment of a dividend for the business year 2023. This marks a significant step as we resume dividend payments This new name serves as a visual sym- formance, 2023 saw Avolta achieve sion. The Board of Directors will pro- bol, communicating the expanded several improvements in credit rat- pose the payment of an initial divi- scope of our combined entity. With ings. S & P Global Ratings upgraded dend of CHF 0.70 per Avolta share. Reflecting the positive company per- following pandemic-related suspen- its robust commercial foundation, Avolta’s credit ratings to BB, Outlook diversified portfolio, and unwavering Stable in July, building upon an earlier commitment to customer-centricity, upgrade in March. Moody’s Investor Avolta opens new avenues of growth Service also revised Avolta’s credit and further elevates our commitment rating to Ba3 with Outlook Positive in to sustainability. April, further affirming our financial health and promising outlook. Dividend payment for business year 2023 proposed. Avolta represents a new home for Aligned with our Destination 2027 our 76,962 team members worldwide, At the General Meeting of Sharehold- strategy, our new capital allocation fostering a sense of belonging and ers in May 2023, shareholders had policy is designed to achieve profit- unity throughout the entire team. the opportunity to vote on several able growth, sustainable cash flow amendments to our Articles of Incor- generation and value creation for our In conjunction with the name change poration – driven by the new Swiss shareholders. To strike a balanced ap- to Avolta, the ticker symbol for our Corporate Law enacted on January 1, proach encompassing deleveraging, shares on the SIX Swiss Exchange was 2023. All proposed agenda items growth, and returns to our sharehold- updated to «AVOL» on November 9, were approved. 2023. As of December 31, 2023, ers, we have earmarked two thirds of our Equity Free Cash Flow (EFCF) for Avolta’s market capitalization stood At this AGM, we welcomed Mr. Sami purposes such as deleveraging, rele- at CHF 5,048.5 million. Kahale as a new non-executive mem- vant business development and small Our shares commenced the 2023 election, Sami Kahale joined as a third of the company’s EFCF shall be business year at CHF 38.51, reaching member of the Audit Committee, the allocated to dividends. ber of the Board of Directors. After his bolt-on M & A activities, while one a peak at the end of July at CHF 44.91 ESG Committee, and the Strategy & and then trended lower in a volatile Integration Committee. On behalf of stock market environment that was the entire Board of Directors, I extend influenced by geopolitical and macro- our gratitude to our shareholders for economic effects. The year concluded their ongoing commitment and sup- with our shares closing at CHF 33.08. port. Dufry sources 40 % of its electricity con- sumption from renew- able energy. The average daily trading volume Following the successful transfer of across all platforms was CHF 60.2 Edizione’s stake in Autogrill in Feb- In 2023, we initiated a full integration million, affirming the liquidity of our ruary 2023, the Board of Directors of the ESG engagement from the two shares. The SIX Swiss Exchange re- created additional board committees, legacy entities into a combined Avolta mained a significant trading platform, aligning with the new scope of the ESG Strategy, while expanding our where the average daily volume of company. Avolta shares reached CHF 19.2 mil- ESG initiatives and progressing with existing programs. lion in 2023. Avolta’s trading volumes In this context, the former combined are mainly concentrated on the SIX Nomination and ESG Committee was We have included ESG targets in the 31.8 % and BATS Chi-X OTC 51.5 % divided into two committees: the long-term incentive plan for manage- platforms. As is our tradition, we Nomination Committee and the ESG ment compensation, a practice we maintained an ongoing dialogue with Committee. Additionally, the Board had started in 2022. our shareholders and the financial established the new Strategy & Inte- community, engaging in over 1,190 gration Committee. The existing Audit Our newly formulated ESG strategy interactions through roadshow or con- and Remuneration Committees con- is based on a combined materiality ference meetings, calls and emails. tinue. matrix, which considers the expanded Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 15/336 they have come together, forming new teams, embracing new ways of working and laying the foundation for the realization of our vision to revolu- tionize the travel experience. My gratitude extends to our conces- sion partners and brand suppliers for their close collaboration and contri- butions in strengthening our partner- ships. I look forward with confidence and optimism to future journeys together, thanks to the long-standing rela- tionships and the ongoing trust of our business partners, shareholders, bondholders, and lending banks. Sincerely, Juan Carlos Torres Carretero company scope and diverse stake- holder communities. This materiality matrix was developed through direct interactions with our stakeholders, complemented by thorough desk research, and adheres to the principle of double materiality. The revised focus areas are: Create Sustainable Travel Experiences, Respect Our Planet, Empower Our People and Engage Local Communi- ties. While laying the foundation for our future ESG engagement, we have expanded our existing initiatives – for example by augmenting the share of renewable energy in our electricity consumption (base year 2019) from 20 % to 40 %. I encourage you to ex- plore pages 97 – 148 for a detailed overview of our ESG Report and prog- ress in 2023. Ongoing strong engagement for our communities. Our global community engagement initiatives have continued to provide support to communities in the mar- kets where we operate. In 2023, we assisted team members and the com- munities in Türkiye and Morocco fol- lowing the devastating earthquakes and provided support to the local population in the areas most affected. With respect to ongoing engage- ments, it is now the 14th year of our contribution to SOS Children’s Vil- lages initiatives in Brazil, Mexico, and Kenya. In a year where children and families needed extra support, our customers joined our efforts by pur- chasing our Captain Dufry plush bear, the profits being donated to SOS Chil- dren’s Villages. In 2023, our commit- ment extended to community projects in different parts of the world includ- ing Switzerland, Greece, the United Kingdom, the United States, Canada, Italy, Türkiye, Syria, Morocco. We can't do it alone. Our team members and manage- ment teams played an integral role, generously contributing to the posi- tive developments and achievements described above. We surpassed our targets for the year thanks to their un- wavering dedication, continued com- mitment, and collaborative teamwork. I extend my heartfelt gratitude and offer a sincere thank you to every single one of our team members for their support and continued motiva- tion. I would like to express my apprecia- tion to our Avolta teams around the world for their exceptional dedication in providing our customers with out- standing service. At the same time, I look forward with confidence and optimism to future journeys together. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 16/336 CEO´s Statement Xavier Rossinyol Chief Executive Officer Dear all, I am delighted to be reporting to you for the first time under our new com- pany name, Avolta, and I am proud to share the remarkable achievements that our united team has accom- plished together. 2023 was an extraor- dinary year. Together we successfully 2023 was an extraor- dinary year, in which we successfully deliv- ered the business combination of Dufry and Autogrill. tomers with holistic and engaging ex- periences. The power of the newly combined entity multiplies the poten- tial for innovation and yields benefits for travelers, concession partners and brand suppliers alike, granting access to hybrid offerings and expanded ser- vice opportunities. executed the Dufry-Autogrill busi- Key focus on delivery We are already leading the transfor- ness combination, realizing the early Following the successful completion mation of travel experiences around delivery of substantial synergies, and of the Dufry-Autogrill business combi- the world. Notably, at Stockholm’s made strong improvements to our nation, the official name change of Arlanda Airport (Sweden), our new financial KPIs. our company in November 2023 cued Store of the Future, combines the the emergence of Avolta as a fully uni- value-rich store-in-store retail con- Our transformation to Avolta is a mile- fied company. Aligned with our trav- cepts with a hybrid twist. Similarly, at stone in our Destination 2027 strategy, eler-centric Destination 2027 strategy, Milan’s Malpensa Airport where we and marks the emergence of a new where we seek to make travelers hap- unveiled our Hudson Café with Baci, and united company, now a tangible pier by creating a holistic travel expe- mixing travel retail with a sophisticated reality standing as a distinctive coun- rience revolution, we are now operat- menu, both of these examples opened terpart for our business partners and ing as One Team and One Company, during the second half of 2023. a new home for all our team members harnessing our collective expertise around the world. We describe Avolta across travel retail and F&B, and pav- as being more than the sum of its ing the way to deliver innovative value parts and we see this illustrated in our propositions. daily interactions with customers, suppliers, concession partners and, Introducing smart-stores and incor- particularly, when we participate in porating advanced digital technology concession tenders. We are unique in with live-data-collection will enhance our set up, we are more diversified our intelligence thus further optimiz- and resilient, and our point of differ- ing efficiency and profitability of com- entiation is appealing to the market. mercial areas, whilst also contributing Delivering on our way to Destination 2027 – Full customer centric- ity, digital engagement and travel experience revolution. to expand online engagement with ex- Reporting on such a momentous year, A full overview of our new name, isting and potential customers. Newly it is only fitting that I extend my grati- Avolta, including our identity and our designed retail and F&B concepts with tude to the Avolta Board of Directors values, which foster our One Com- a strong sense of place, flexible and and Management Team for their un- pany spirit, can be found in the dedi- changing assortments, including on- wavering support throughout the cated poster at the beginning of this site entertainment, activations and successful completion of the business annual report. digital gamification will provide cus- combination and the establishment of For a glossary of financial terms and Alternative Performance Measures please see page 271 of this Annual Report. Avolta is now operating as One Team, One Company, harnessing its collective expertise across travel retail and F&B. CEO´s Statement Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 17/336 Dear all, I am delighted to be reporting to you for the first time under our new com- pany name, Avolta, and I am proud to share the remarkable achievements that our united team has accom- plished together. 2023 was an extraor- dinary year. Together we successfully executed the Dufry-Autogrill busi- ness combination, realizing the early delivery of substantial synergies, and made strong improvements to our financial KPIs. Our transformation to Avolta is a mile- stone in our Destination 2027 strategy, and marks the emergence of a new and united company, now a tangible reality standing as a distinctive coun- terpart for our business partners and a new home for all our team members around the world. We describe Avolta as being more than the sum of its parts and we see this illustrated in our daily interactions with customers, suppliers, concession partners and, particularly, when we participate in concession tenders. We are unique in our set up, we are more diversified and resilient, and our point of differ- entiation is appealing to the market. A full overview of our new name, Avolta, including our identity and our values, which foster our One Com- pany spirit, can be found in the dedi- cated poster at the beginning of this annual report. For a glossary of financial terms and Alternative Performance Measures please see page 271 of this Annual Report. 2023 was an extraor- dinary year, in which we successfully deliv- ered the business combination of Dufry and Autogrill. Key focus on delivery Following the successful completion of the Dufry-Autogrill business combi- nation, the official name change of our company in November 2023 cued the emergence of Avolta as a fully uni- fied company. Aligned with our trav- eler-centric Destination 2027 strategy, where we seek to make travelers hap- pier by creating a holistic travel expe- rience revolution, we are now operat- ing as One Team and One Company, harnessing our collective expertise across travel retail and F&B, and pav- ing the way to deliver innovative value propositions. Introducing smart-stores and incor- porating advanced digital technology with live-data-collection will enhance our intelligence thus further optimiz- ing efficiency and profitability of com- mercial areas, whilst also contributing to expand online engagement with ex- isting and potential customers. Newly designed retail and F&B concepts with a strong sense of place, flexible and changing assortments, including on- site entertainment, activations and digital gamification will provide cus- tomers with holistic and engaging ex- periences. The power of the newly combined entity multiplies the poten- tial for innovation and yields benefits for travelers, concession partners and brand suppliers alike, granting access to hybrid offerings and expanded ser- vice opportunities. We are already leading the transfor- mation of travel experiences around the world. Notably, at Stockholm’s Arlanda Airport (Sweden), our new Store of the Future, combines the value-rich store-in-store retail con- cepts with a hybrid twist. Similarly, at Milan’s Malpensa Airport where we unveiled our Hudson Café with Baci, mixing travel retail with a sophisticated menu, both of these examples opened during the second half of 2023. Delivering on our way to Destination 2027 – Full customer centric- ity, digital engagement and travel experience revolution. Reporting on such a momentous year, it is only fitting that I extend my grati- tude to the Avolta Board of Directors and Management Team for their un- wavering support throughout the successful completion of the business combination and the establishment of Avolta is now operating as One Team, One Company, harnessing its collective expertise across travel retail and F&B. Xavier Rossinyol Chief Executive Officer Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 18/336 our new unified entity. Sharing a com- mon vision on our journey to imple- menting Avolta’s Destination 2027 strategy is of paramount significance, and your dedication and collaboration are invaluable assets in achieving our goals. Avolta – Growing more diversified and resilient than ever. Operationally, the 2023 business year was characterized by consistent growth in demand across all regions, whether they were further along in their recovery or just beginning to re- open and experience the acceleration of regional and international travel. Both leisure and business travelers confirmed their commitment to travel and to spend, demonstrating remark- able resilience in the face of ongoing disruptions and uncertainties stem- ming from geopolitical and macroeco- nomic factors. Throughout this period, the Avolta team remained dedicated to executing with excellence and pru- dent cost management. Further improvements to all major KPIs Driven by these favorable trends and boosted by positive momentum across all its regions, Avolta’s 2023 Consolidated Turnover reached CHF 12,789.5 million (2022 proforma: CHF 10,804.8 million), while CORE Turnover (excluding fuel net sales) amounted to CHF 12,534.6 million. This translates into a CORE Organic Growth of 21.6 % for the combined company against FY 2022 (proforma). New concessions (net) contributed positively with 1.4 % on a proforma basis, while translational currency effects on Turnover were – 5.6 %, pri- marily due to fluctuations in USD, EUR and GBP. CORE EBITDA also saw sig- nificant growth, reaching CHF 1,129.6 million (2022 proforma: CHF 941.4 million) resulting in a margin of 9.0 %. This impressive outcome was driven by our commercial performance, in- creased productivity and the timely implementation of synergies. In 2023, we achieved CHF 30 million of our to- tal synergies target of CHF 85 million, with the remainder set to be realized in 2024, a full year earlier than we ex- pected at the time of announcing the Dufry-Autogrill combination. Our Equity Free Cash Flow (EFCF) was also well above projections and stood at CHF 323.0 million, as compared to CHF 305.2 million (Dufry reported FY 2022). This remarkable acceleration highlights the company’s strong cash flow generation capability and effec- tive cost control. Relevant KPIs deliver further improvement. We continued to reduce our Net Debt, which stood at CHF 2,696.1 million, down from CHF 2,810.7 million in 2022, meeting covenants ahead of schedule and providing comfortable headroom. As of December 31, 2023, Avolta’s available liquidity amounted to CHF 2,637.9 million compared to CHF 2,343.0 million at the end of 2022 (Dufry standalone balance sheet). In the first half of 2023, Avolta used the RCF’s «Accordion» feature to en- hance flexibility and onboard some of Autogrill’s lending banks alongside Dufry’s existing providers. In this way, Avolta increased the facility by an overall CHF 648.9 million (EUR 665 million) by the end of December 2023. The same terms and conditions as the initial RCF amount applied. Our focus on deleveraging continues, as we tar- get a leverage of 1.5-2.0x net debt / CORE EBITDA. In the event of relevant business developments or small bolt- on M & A projects, we allow a maxi- mum of 2.5x, with the intention of promptly returning to target as we progress towards our strategic goals. Further enhancing our geographical diversification, Avolta achieved partic- ular success this year in strengthening our footprint around the world with important contract extensions and new wins. Extensions played a key role here, with the significant renewal of the vast majority of Avolta’s Spanish airport operation contracts for twelve years – a highlight. Including 21 air- ports with 120 outlets covering around 60,000 m2 of retail space, this contract represents the service of approxi- mately 132 million travelers annually (base 2019). The awarded commercial space, both retail and F&B, represent a 30 % increase compared to the previ- ous setup as well as a considerable ex- pansion of sales categories. Also worth mentioning include the renewed seven-year concession contract at Belgrade to operate a total of eight duty-free shops; the seven-year exten- sion in Kuala Lumpur International Airport (Malaysia) for F&B, and the fifteen-year extension at Harry Reid International Airport (Las Vegas, USA). Delivering on the part- nership with our con- cession partners – Success in contract extensions and foot- print expansion. When we look at the new contracts won, of particular interest is our stra- tegic joint venture with Hubei Airport Group to oversee the operations of Wuhan Tianhe Airport’s Terminal 2 as master concessionaire for retail, F&B, convenience and hybrid concepts, managing a total of 77 outlets. Our scale in the APAC region, particularly in the People’s Republic of China, also saw Avolta entering into a new five- year contract at Chongqing Jiangbei International Airport for four duty- paid stores. In North America, we were awarded a long-term duty-free contract for Boston Logan Interna- tional Airport, alongside an extension for our duty-paid business. We also and Governance) activities. In 2023, purchasing volume. For a detailed and won long-term contracts for both we took significant strides forward comprehensive overview of our ESG retail and F&B areas at Oakland Inter- through the formulation of an up- strategy, engagement, and the prog- national Airport, and signed a new dated, integrated ESG strategy for the ress we have achieved in 2023 please fifteen-year duty-paid contract at combined entity. We have redefined refer to our ESG Report on pages Fresno Yosemite International Airport the scope of our materiality matrix 97 – 148. (all located in the USA). In Latin Amer- and adapted our four focus areas – ica, Avolta signed a ten-year contract Create Sustainable Travel Experi- Encouraging outlook continues at Vitória Airport (Brazil) as well as a ences, Respect Our Planet, Empower The 2023 business year closed with a twenty-year contract to operate a Our People and Engage Local Com- buoyant travel momentum and resil- duty-free store at the international munities – to encompass our ex- ient customer demand. While we ac- bridge «General San Martin», the pri- tended stakeholder community. knowledge the persistent geopolitical mary crossing point between Argen- and macro-economic challenges, we tina and Uruguay. In the EMEA region, While defining the groundwork for remain optimistic on the overall out- we achieved success by winning new our ongoing ESG journey, we re- look for our business. Key indicators retail and F&B concessions at several mained committed to building on ex- underpinning these assumptions in- airports including Helsinki Airport isting initiatives and broadening our clude the robust willingness of travel- (Finland), and Hamad International activities to include the newly inte- ers to explore and make purchases Airport in Doha (Qatar) in joint venture grated F&B business. In this context, through our channels, with spending with Qatar Airways. Representing a we made significant advancements, levels consistently exceeding pre- selection of our developed partner- including the revision of the Avolta pandemic levels. As a company, ships, these examples underscore our Code of Conduct and the expansion Avolta plays a significant role in con- commitment to growth and excel- of the Diversity, Equity and Inclusion tributing to this positive outlook. Our lence across our regions, and position (DE & I) training programs for our team resolute and well-defined traveler- Avolta as a global leader in the airport members. To ensure comprehensive centric strategy is finely tuned to the concessions industry. coverage of our ESG efforts, we have current and evolving needs of the Planet, People and Communities – ESG Strategy fully inte- grated. extended the scope of our TCFD Re- travelers, with our solid financial posi- port (Task Force on Climate-related tion further reinforcing our ability to Financial Disclosures) to cover the en- navigate challenges and capitalize on tirety of Avolta. We have also formu- opportunities. lated a joint Community Engagement Strategy, designed to enhance our TEAM MEMBERS: THANK YOU FOR support for the local communities in DRIVING OUR SUCCESS which we operate. Finally, we updated The shared and united spirit among A cornerstone in our long-term strat- our Avolta Supplier Code of Conduct our team members is a joy to observe, egy, we remain committed to enhanc- to the new company reality and and I am deeply grateful to be a part ing our sustainability engagement as launched a recertification process of this. The sense of unity has been part of our ESG (Environmental, Social that now covers 49 % of our global clearly demonstrated across our in- Avolta is well equipped to redefine Travel Experience globally through its customer centric strategy and solid financial position. our new unified entity. Sharing a com- This impressive outcome was driven Further enhancing our geographical mon vision on our journey to imple- by our commercial performance, in- diversification, Avolta achieved partic- menting Avolta’s Destination 2027 creased productivity and the timely ular success this year in strengthening strategy is of paramount significance, implementation of synergies. In 2023, our footprint around the world with and your dedication and collaboration we achieved CHF 30 million of our to- important contract extensions and are invaluable assets in achieving our tal synergies target of CHF 85 million, new wins. Extensions played a key role goals. Avolta – Growing more diversified and resilient than ever. with the remainder set to be realized here, with the significant renewal of in 2024, a full year earlier than we ex- the vast majority of Avolta’s Spanish pected at the time of announcing the airport operation contracts for twelve Dufry-Autogrill combination. years – a highlight. Including 21 air- Our Equity Free Cash Flow (EFCF) was 60,000 m2 of retail space, this contract also well above projections and stood represents the service of approxi- at CHF 323.0 million, as compared to mately 132 million travelers annually ports with 120 outlets covering around Operationally, the 2023 business CHF 305.2 million (Dufry reported FY (base 2019). The awarded commercial year was characterized by consistent 2022). This remarkable acceleration space, both retail and F&B, represent a growth in demand across all regions, highlights the company’s strong cash 30 % increase compared to the previ- whether they were further along in flow generation capability and effec- ous setup as well as a considerable ex- their recovery or just beginning to re- tive cost control. open and experience the acceleration of regional and international travel. Both leisure and business travelers confirmed their commitment to travel and to spend, demonstrating remark- able resilience in the face of ongoing Relevant KPIs deliver further improvement. pansion of sales categories. Also worth mentioning include the renewed seven-year concession contract at Belgrade to operate a total of eight duty-free shops; the seven-year exten- sion in Kuala Lumpur International Airport (Malaysia) for F&B, and the disruptions and uncertainties stem- We continued to reduce our Net Debt, fifteen-year extension at Harry Reid ming from geopolitical and macroeco- which stood at CHF 2,696.1 million, International Airport (Las Vegas, USA). nomic factors. Throughout this period, down from CHF 2,810.7 million in 2022, the Avolta team remained dedicated meeting covenants ahead of schedule to executing with excellence and pru- and providing comfortable headroom. dent cost management. Further improvements to all major KPIs As of December 31, 2023, Avolta’s available liquidity amounted to CHF 2,637.9 million compared to CHF 2,343.0 million at the end of 2022 Driven by these favorable trends (Dufry standalone balance sheet). In and boosted by positive momentum the first half of 2023, Avolta used the across all its regions, Avolta’s 2023 RCF’s «Accordion» feature to en- Consolidated Turnover reached hance flexibility and onboard some of Delivering on the part- nership with our con- cession partners – Success in contract extensions and foot- print expansion. CHF 12,789.5 million (2022 proforma: Autogrill’s lending banks alongside When we look at the new contracts CHF 10,804.8 million), while CORE Dufry’s existing providers. In this way, won, of particular interest is our stra- Turnover (excluding fuel net sales) Avolta increased the facility by an tegic joint venture with Hubei Airport amounted to CHF 12,534.6 million. overall CHF 648.9 million (EUR 665 Group to oversee the operations of This translates into a CORE Organic million) by the end of December 2023. Wuhan Tianhe Airport’s Terminal 2 as Growth of 21.6 % for the combined The same terms and conditions as the master concessionaire for retail, F&B, company against FY 2022 (proforma). initial RCF amount applied. Our focus convenience and hybrid concepts, New concessions (net) contributed on deleveraging continues, as we tar- managing a total of 77 outlets. Our positively with 1.4 % on a proforma get a leverage of 1.5-2.0x net debt / scale in the APAC region, particularly basis, while translational currency CORE EBITDA. In the event of relevant in the People’s Republic of China, also effects on Turnover were – 5.6 %, pri- business developments or small bolt- saw Avolta entering into a new five- marily due to fluctuations in USD, EUR on M & A projects, we allow a maxi- year contract at Chongqing Jiangbei and GBP. CORE EBITDA also saw sig- mum of 2.5x, with the intention of International Airport for four duty- nificant growth, reaching CHF 1,129.6 promptly returning to target as we paid stores. In North America, we million (2022 proforma: CHF 941.4 progress towards our strategic goals. were awarded a long-term duty-free million) resulting in a margin of 9.0 %. contract for Boston Logan Interna- tional Airport, alongside an extension Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 19/336 for our duty-paid business. We also won long-term contracts for both retail and F&B areas at Oakland Inter- national Airport, and signed a new fifteen-year duty-paid contract at Fresno Yosemite International Airport (all located in the USA). In Latin Amer- ica, Avolta signed a ten-year contract at Vitória Airport (Brazil) as well as a twenty-year contract to operate a duty-free store at the international bridge «General San Martin», the pri- mary crossing point between Argen- tina and Uruguay. In the EMEA region, we achieved success by winning new retail and F&B concessions at several airports including Helsinki Airport (Finland), and Hamad International Airport in Doha (Qatar) in joint venture with Qatar Airways. Representing a selection of our developed partner- ships, these examples underscore our commitment to growth and excel- lence across our regions, and position Avolta as a global leader in the airport concessions industry. Planet, People and Communities – ESG Strategy fully inte- grated. A cornerstone in our long-term strat- egy, we remain committed to enhanc- ing our sustainability engagement as part of our ESG (Environmental, Social and Governance) activities. In 2023, we took significant strides forward through the formulation of an up- dated, integrated ESG strategy for the combined entity. We have redefined the scope of our materiality matrix and adapted our four focus areas – Create Sustainable Travel Experi- ences, Respect Our Planet, Empower Our People and Engage Local Com- munities – to encompass our ex- tended stakeholder community. While defining the groundwork for our ongoing ESG journey, we re- mained committed to building on ex- isting initiatives and broadening our activities to include the newly inte- grated F&B business. In this context, we made significant advancements, including the revision of the Avolta Code of Conduct and the expansion of the Diversity, Equity and Inclusion (DE & I) training programs for our team members. To ensure comprehensive coverage of our ESG efforts, we have extended the scope of our TCFD Re- port (Task Force on Climate-related Financial Disclosures) to cover the en- tirety of Avolta. We have also formu- lated a joint Community Engagement Strategy, designed to enhance our support for the local communities in which we operate. Finally, we updated our Avolta Supplier Code of Conduct to the new company reality and launched a recertification process that now covers 49 % of our global purchasing volume. For a detailed and comprehensive overview of our ESG strategy, engagement, and the prog- ress we have achieved in 2023 please refer to our ESG Report on pages 97 – 148. Encouraging outlook continues The 2023 business year closed with a buoyant travel momentum and resil- ient customer demand. While we ac- knowledge the persistent geopolitical and macro-economic challenges, we remain optimistic on the overall out- look for our business. Key indicators underpinning these assumptions in- clude the robust willingness of travel- ers to explore and make purchases through our channels, with spending levels consistently exceeding pre- pandemic levels. As a company, Avolta plays a significant role in con- tributing to this positive outlook. Our resolute and well-defined traveler- centric strategy is finely tuned to the current and evolving needs of the travelers, with our solid financial posi- tion further reinforcing our ability to navigate challenges and capitalize on opportunities. TEAM MEMBERS: THANK YOU FOR DRIVING OUR SUCCESS The shared and united spirit among our team members is a joy to observe, and I am deeply grateful to be a part of this. The sense of unity has been clearly demonstrated across our in- Avolta is well equipped to redefine Travel Experience globally through its customer centric strategy and solid financial position. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 20/336 ternal celebrations as we marked our transition to Avolta. To our dedicated colleagues: thank you all for your commitment and for the tireless ef- forts you have contributed to our company. Your perseverance, espe- cially during this demanding period of simultaneous sales growth and busi- ness integration, more than earns the sincere respect and gratitude from the Global Executive Committee and myself. Your extraordinary motivation reflects a remarkable level of dedica- tion that inspires us all. To our external business partners: thank you for each contributing in your unique ways to support Avolta. Our collaboration with concession partners, brand suppliers and the fi- nancial community remains a stead- fast and essential component of our continued success. On behalf of the Global Executive Committee and myself, we look forward to continuing this shared journey of partnership with you all. On a more personal note, I extend my gratitude to our Chairman, Juan Carlos Torres, and the esteemed members of the Board of Directors for their trust and support in shaping Avolta’s evolution. Thanks to all key shareholders, particularly to Alessandro Benetton with Edizione and our long-term strategic investors Finally, and with meaning, I thank our shareholders and bondholders for their enduring support, trust and con- tributions in propelling Avolta’s mis- sion to revolutionize the travel experi- ence. Your partnership is invaluable as we continue to innovate and inspire this ever-evolving landscape. Our first year together as One Com- pany has been a success, now on- wards to Destination 2027. Journey on, Xavier Rossinyol Group General Counsel President & CEO North America Our Organizational Structure – Global Executive Committee As of December 31, 2023 Chief Executive Officer Xavier Rossinyol Chief Financial Officer President & CEO Asia-Pacific Freda Cheung Steve Johnson President & CEO Europe, Middle East & Africa Luis Marin Enrique Urioste Yves Gerster Pascal C. Duclos Chief Public Affairs & ESG Officer Camillo Rossotto Vijay Talwar Chief People & Culture Officer Katrin Volery Chief Commercial & Digital Officer President & CEO Latin America ternal celebrations as we marked our Thanks to all key shareholders, transition to Avolta. To our dedicated particularly to Alessandro Benetton colleagues: thank you all for your with Edizione and our long-term commitment and for the tireless ef- strategic investors forts you have contributed to our Finally, and with meaning, I thank our company. Your perseverance, espe- shareholders and bondholders for cially during this demanding period of their enduring support, trust and con- simultaneous sales growth and busi- tributions in propelling Avolta’s mis- ness integration, more than earns the sion to revolutionize the travel experi- sincere respect and gratitude from ence. Your partnership is invaluable the Global Executive Committee and as we continue to innovate and inspire myself. Your extraordinary motivation this ever-evolving landscape. reflects a remarkable level of dedica- tion that inspires us all. Our first year together as One Com- pany has been a success, now on- To our external business partners: wards to Destination 2027. thank you for each contributing in your unique ways to support Avolta. Journey on, myself, we look forward to continuing Xavier Rossinyol Our collaboration with concession partners, brand suppliers and the fi- nancial community remains a stead- fast and essential component of our continued success. On behalf of the Global Executive Committee and this shared journey of partnership with you all. On a more personal note, I extend my gratitude to our Chairman, Juan Carlos Torres, and the esteemed members of the Board of Directors for their trust and support in shaping Avolta’s evolution. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 21/336 Our Organizational Structure – Global Executive Committee As of December 31, 2023 Chief Executive Officer Xavier Rossinyol Chief Financial Officer Yves Gerster Group General Counsel Pascal C. Duclos Chief Public Affairs & ESG Officer Camillo Rossotto President & CEO Asia-Pacific Freda Cheung President & CEO North America Steve Johnson President & CEO Europe, Middle East & Africa Luis Marin Chief Commercial & Digital Officer Vijay Talwar President & CEO Latin America Enrique Urioste Chief People & Culture Officer Katrin Volery Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 22/336 Avolta’s Investment Case Global market leader in airport travel retail and F&B. Approximately 20 % market share in airport retail with 11 % market share of the broader travel retail market as well as the leader in travel F&B. Long-term growing industry offering new 5 – 7 % CAGR mid-term turnover opportunities. growth. Mid-term global PAX CAGR of 3.5 % – 4 %, with Mid-term turnover growth driven by underlying pas- growth opportunities especially in Asia and in F&B. senger growth and increases in spend per passenger thanks to the Travel Experience Revolution and organic business development, as well as potential M & A opportunities. 2.3 billion potential customers globally. Avolta – Unique access to Travel Retail and F&B. Access to 2.3 billion travelers across a truly global net- work. We constantly re-define the value proposition to customers, in close collaboration with concession partners and brands, based on a unique global data- base of traveler insights providing first-hand intelli- gence to drive growth. Clearly defined Destination 2027 strategy predicated on longer-term growth in USD 86 billion travel retail market and resilience of USD 28 billion global travel F&B concession market. Over 7 Years average remaining concession life. Sustainable profits and highly variable cost structure. Remaining average concession life of over 7 years, Operational improvement culture, highly variable cost across a highly diversified portfolio with top 10 con- structure and continuous efficiencies drive mid-term cessions accounting for less than 18 % of sales. profitability improvements. Vast array of retail concepts and F&B for- mats for concession partners. Avolta has strong relationships with its concession partners and airport authorities and is a reliable part- ner delivering outstanding results through a vast offering of unique shop and F&B concepts. Travel Experience Revolution benefitting customer conversion. Unique value proposition for travelers with new strategy focusing on enhanced store concepts, data-driven customer insights and digitalization, thus benefitting customer conversion and spending with increase of 1.5 % – 2 % annually. Strong risk- adjusted cash flow generation. Long-term track-record of low capital intensity, strong cash generation and fast deleveraging. Resilient business driven by high level of diversification. Proven resilience of travel retail and F&B further sup- ported by Avolta´s diversification across geographies, channels, formats and concepts, and its strong stake- holder relations. Avolta’s Investment Case Global market leader in airport travel retail and F&B. Approximately 20 % market share in airport retail with 11 % market share of the broader travel retail market as well as the leader in travel F&B. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 23/336 Long-term growing industry offering new opportunities. 5 – 7 % CAGR mid-term turnover growth. Mid-term global PAX CAGR of 3.5 % – 4 %, with growth opportunities especially in Asia and in F&B. Mid-term turnover growth driven by underlying pas- senger growth and increases in spend per passenger thanks to the Travel Experience Revolution and organic business development, as well as potential M & A opportunities. 2.3 billion potential customers globally. Avolta – Unique access to Travel Retail and F&B. Access to 2.3 billion travelers across a truly global net- Clearly defined Destination 2027 strategy predicated work. We constantly re-define the value proposition to on longer-term growth in USD 86 billion travel retail customers, in close collaboration with concession market and resilience of USD 28 billion global travel partners and brands, based on a unique global data- F&B concession market. base of traveler insights providing first-hand intelli- gence to drive growth. Over 7 Years average remaining concession life. Sustainable profits and highly variable cost structure. Remaining average concession life of over 7 years, across a highly diversified portfolio with top 10 con- cessions accounting for less than 18 % of sales. Operational improvement culture, highly variable cost structure and continuous efficiencies drive mid-term profitability improvements. Vast array of retail concepts and F&B for- mats for concession Travel Experience Revolution benefitting customer conversion. partners. Avolta has strong relationships with its concession partners and airport authorities and is a reliable part- ner delivering outstanding results through a vast offering of unique shop and F&B concepts. Unique value proposition for travelers with new strategy focusing on enhanced store concepts, data-driven customer insights and digitalization, thus benefitting customer conversion and spending with increase of 1.5 % – 2 % annually. Strong risk- adjusted cash flow generation. Long-term track-record of low capital intensity, strong cash generation and fast deleveraging. Resilient business driven by high level of diversification. Proven resilience of travel retail and F&B further sup- ported by Avolta´s diversification across geographies, channels, formats and concepts, and its strong stake- holder relations. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 24/336 Board of Directors Members As of December 31, 2023 Juan Carlos Torres Carretero Xavier Xavier Bouton Bouton Mary J. Steele Guilfoile Luis Maroto Camino Alessandro Benetton Heekyung Jo Min Sami Kahale Ranjan Sen Joaquín Moya-Angeler Cabrera Enrico Laghi Eugenia M. Ulasewicz Lynda Tyler-Cagni Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 25/336 Juan Carlos Torres Carretero Xavier Xavier Bouton Bouton Mary J. Steele Guilfoile Luis Maroto Camino Board of Directors Members As of December 31, 2023 Alessandro Benetton Heekyung Jo Min Sami Kahale Ranjan Sen Joaquín Moya-Angeler Cabrera Enrico Laghi Eugenia M. Ulasewicz Lynda Tyler-Cagni 1 Management Report Avolta Annual Report 2023 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 26/336 Global Executive Committee Members As of December 31, 2023 Steve Johnson Pascal C. Duclos Yves Gerster Camillo Rossotto Freda Cheung Xavier Rossinyol Enrique Urioste Vijay Talwar Luis Marin Katrin Volery 1 Management Report Avolta Annual Report 2023 Global Executive Committee Members As of December 31, 2023 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 27/336 Steve Johnson Pascal C. Duclos Yves Gerster Camillo Rossotto Freda Cheung Xavier Rossinyol Enrique Urioste Vijay Talwar Luis Marin Katrin Volery Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 28/336 1 Management Report Avolta Annual Report 2023 Vision & Strategy Destination 2027 Avolta’s vision, mission and strategy was crafted based on a deep research, analysis and understanding of the evolu- tion of the current market trends, customer insights and our stakeholders’ needs. The vision of «Destination 2027» is to make travelers happier through a holistic travel expe- rience including retail and F&B propositions. Diversified and resilient as One Team, we are in a position to generate sustainable long-term value for all our stakeholders, in- cluding team members, travel concession partners, brand suppliers, and, finally, our shareholders. Destination 2027 builds on four key pillars, each of them powered by our people: Travel Experience Revolution, Geographical Diversification, Operational Improvement Culture and ESG. Travel Experience Revolution Avolta creates unrivalled and holistic travel experiences by continuously adapting and evolving its value proposition with a full customer-centric approach based on data in- sights. The environments where we define, plan and oper- ate travel retail and F&B concepts provide options for stand-alone retail and F&B solutions, as well as combined offerings – including flexible, local, entertaining and hybrid formats – to customize to the traveler’s needs in every sin- gle location. State of the art digital engagement initiatives further enhance the overall customer experience along their whole journey. Traveler profiles and expectations are constantly moni- tored across our global footprint to identify new behaviors and requirements. Demographics and data analysis play a fundamental role in our business as changes in customer customer insights and help to create a sense of place. We profiles and preferences can occur rapidly. For this rea- share those with brands, allowing them to further innovate son, Avolta sets a high priority on consumer intelligence, their products and experiences. In parallel, concession extrapolated from internal operational information, regu- partners contribute by optimizing space allocation and lar customer field surveys, monitoring of social media passenger flows, supporting the setup of flexible and hy- channels and external research. This constant process of brid concepts. Avolta seeks a permanent and close collab- listening closely to customers allows us to continuously oration with concession partners and suppliers through fine-tune our offerings, not only matching, but exceeding the ongoing monitoring of airport, location and outlet per- expectations of our clients. formance, flexibly adapting retail and F&B concepts in or- der to maximize passenger satisfaction, sales, and spend- per-passenger. Traveler insights and intelligence play a key role in identifying new customer profiles and expecta- tions. Close cooperation with brand suppliers and concession partners. Maximizing the travel experience can only be achieved The key element in making customers happier and provid- through the strong and close collaboration of travel retail ing a flawless holistic travel experience is the unique com- and F&B operators with concession partners and brand bination of travel retail and F&B under one roof, generating suppliers. Each one of these partners has a key role to play benefits for customers and concession operators alike. – operators can create attractive experiential environ- Advantages materialize through the creation of sense-of- ments, tailoring offerings and services based on refined place shop and restaurant designs reflecting local cultures Destination 2027 Global Presence al Diversific n a ti o 1. Tra v e l E 3. Operatio x p e r ience Revolu ti o n hic p a r g o e G . 2 Reimagined Travel Retail Food & Beverage Traveler Digital Point of Sale E n d-to-End En g a g e m e nt n a l I m p r o v e m e n t C u l t u r e 4. ESG Avolta presence A full list of locations is available on pages 72 – 75. 29 Vision & Strategy Destination 2027 Avolta’s vision, mission and strategy was crafted based on Travel Experience Revolution a deep research, analysis and understanding of the evolu- Avolta creates unrivalled and holistic travel experiences by tion of the current market trends, customer insights and continuously adapting and evolving its value proposition our stakeholders’ needs. The vision of «Destination 2027» with a full customer-centric approach based on data in- is to make travelers happier through a holistic travel expe- sights. The environments where we define, plan and oper- rience including retail and F&B propositions. Diversified ate travel retail and F&B concepts provide options for and resilient as One Team, we are in a position to generate stand-alone retail and F&B solutions, as well as combined sustainable long-term value for all our stakeholders, in- offerings – including flexible, local, entertaining and hybrid cluding team members, travel concession partners, brand formats – to customize to the traveler’s needs in every sin- suppliers, and, finally, our shareholders. gle location. State of the art digital engagement initiatives further enhance the overall customer experience along Destination 2027 builds on four key pillars, each of them their whole journey. powered by our people: Travel Experience Revolution, Geographical Diversification, Operational Improvement Traveler profiles and expectations are constantly moni- Culture and ESG. tored across our global footprint to identify new behaviors and requirements. Demographics and data analysis play a 1 Management Report Avolta Annual Report 2023 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 29/336 fundamental role in our business as changes in customer profiles and preferences can occur rapidly. For this rea- son, Avolta sets a high priority on consumer intelligence, extrapolated from internal operational information, regu- lar customer field surveys, monitoring of social media channels and external research. This constant process of listening closely to customers allows us to continuously fine-tune our offerings, not only matching, but exceeding expectations of our clients. Traveler insights and intelligence play a key role in identifying new customer profiles and expecta- tions. customer insights and help to create a sense of place. We share those with brands, allowing them to further innovate their products and experiences. In parallel, concession partners contribute by optimizing space allocation and passenger flows, supporting the setup of flexible and hy- brid concepts. Avolta seeks a permanent and close collab- oration with concession partners and suppliers through the ongoing monitoring of airport, location and outlet per- formance, flexibly adapting retail and F&B concepts in or- der to maximize passenger satisfaction, sales, and spend- per-passenger. Close cooperation with brand suppliers and concession partners. Maximizing the travel experience can only be achieved through the strong and close collaboration of travel retail and F&B operators with concession partners and brand suppliers. Each one of these partners has a key role to play – operators can create attractive experiential environ- ments, tailoring offerings and services based on refined The key element in making customers happier and provid- ing a flawless holistic travel experience is the unique com- bination of travel retail and F&B under one roof, generating benefits for customers and concession operators alike. Advantages materialize through the creation of sense-of- place shop and restaurant designs reflecting local cultures Destination 2027 Global Presence al Diversific n a ti o 1. Tra v e l E 3. Operatio x p e r ience Revolu n a l I m ti o n Reimagined Travel Retail Food & Beverage hic p a r g o e G . 2 p r o v e m e n t C u l t u r e Traveler Digital Point of Sale E n d-to-End En g a g e m e nt 4. ESG Avolta presence A full list of locations is available on pages 72 – 75. 29 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 30/336 Making customers happier and providing a flawless holistic travel experience through the unique combination of travel retail and F&B. and traditions as well as through hybrid and mixed store formats, which immediately expand and mutually enhance the value proposition and the relevance for customers. This generates additional cross selling and promotion opportunities offered to customers digitally or through vouchers, encouraging travelers to visit and browse several outlets. The same applies to the relevance and the reach of loyalty programs, which result in a higher attractiveness for customers and an increased number of touch-points and engagement opportunities for the operators. Our people deliver customized services at top levels. Our front-line team members play a key role in delivering a transformational shopping and dining experience to our customers. We will continue to further customize engage- ment with shop and restaurant concepts and service levels adapted to specific needs by geography and passenger profile in order to create memorable experiences and the best possible added-value. These advanced engagement initiatives will be supported by comprehensive training, dedicated incentive schemes and technology support. Self-learning smart stores and data-driven offering. ment management, while driving performance by initiat- ing concept innovation. Enhanced digital engagement pre-, post- and in-store. Avolta’s digital strategy is all about closely engaging with existing and potential customers throughout their travel journey and is focused on achieving three main goals: – Further engage with frequent travelers and establish deeper connections. Increase their loyalty by leveraging CRM initiatives, offer and service personalization as well as new mobile apps and partnerships – Excel in sales influenced by new digital touchpoints cre- ated with partners across the whole travel journey, by ex- panding the reach of Reserve & Collect, and evolving the omni-channel engagement and sales approach – Transform the shopping and dining experience in-store. Intensify the use of technology for enhanced engage- ment and experience. Develop new services for targeted customer audiences, e.g. the Avolta Employee App. All these initiatives are driven by social media and CRM communication to keep travelers informed about surpris- ing initiatives, activations and in-store experiences. Part- nering with suppliers to feature brand-specific content throughout the complete journey is key. Highly focused use of technology allows Avolta to learn from customer behavior within the shops on an anony- mized basis. This provides valuable insights on where to enhance and adapt assortments or allocate additional team members to increase customer service. Data in- sights optimize both store or F&B concepts and assort- Geographical Diversification Diversification is a recurrent theme in Avolta’s overall strat- egy, as diversification enhances resilience and supports growth. Geographic and channel diversification reduces exposure to single contracts or local and regional external impacts as shown by the share in sales: the largest con- cession accounts for less than 4 % of our business, while Until 2019, Asia-Pacific was the fastest growing travel re- the ten biggest represent less than 18 % of 2023 sales. tail market and is expected to resume this leading position in the coming years. Equally, Chinese travelers contributed With respect to the geographic diversification the focus is to close to 40 % of Asia-Pacific’s passenger volume – and on further developing North America’s footprint, develop- this is expected to grow further over the medium-term. ing a dedicated strategy for the top Asia-Pacific countries and the Chinese travelers in particular, as well as to foster and grow the company’s position in the rest of the world. In all geographies the aim is to optimize the combination of duty-free, duty-paid and F&B offers by either growing organically through new contract wins or joint-ventures, Focus on key Asia-Pacific markets and Chinese travelers. as well as by benefitting from bolt-on M&A opportunities Based on this insight, the key success factor in Asia-Pa- where strategically feasible. cific is to strongly engage with Chinese passengers do- mestically as well as when they travel internationally to With respect to North America, Avolta has a presence in neighboring countries such as Vietnam and Indonesia, approximately 100 airports – with a significant overlap of amongst others, given that 80 % of Chinese international retail and F&B – and sees potential incremental organic travel is within the Asia-Pacific region. A strong local pres- growth opportunities in what is typically a very resilient ence and a dedicated strategy focused on this geographic market. For our existing concession partners, our new hy- area is therefore key to harnessing the high spending brid concepts, including F&B and travel retail, enhances power of the Chinese customer. our offer, consequently boosting customer experience while allowing airports to optimize retail space, passenger Avolta already has a solid footprint in the Asia-Pacific re- flows and ultimately spend-per-passenger and revenue gion with operations in 11 countries and featuring a wide generation. Extend North American footprint further. variety of retail formats and F&B concepts, and is well po- sitioned for further expansion in existing and new loca- tions. Channels cover duty-paid, duty-free and F&B. Simi- lar to other geographies, the opportunity of offering airport operators hybrid and combined retail and F&B concepts through one single partner creates additional potential to grow organically in this important region. As Moreover, the unique sets of expertise in both the travel an example, in 2023 Avolta entered into a joint-venture retail and F&B sectors increase Avolta’s attractiveness with Hubei Airport Group, to act as master concessionaire when participating in tenders in new locations where we at Wuhan Tianhe Airport’s newly built Terminal 2 in central are not yet present. The comprehensive know-how on China. passenger shopping and dining behaviors and insights covering both domestic and international profiles across Another important asset in Asia-Pacific and China is the North America – as well as rest of the world – is an impor- partnership with Alibaba, established in 2020. This also in- tant competitive advantage put at the service of each air- cludes an equity participation by Alibaba in Avolta. On the port operator. In cases where the airport wants only one one hand, it secures a strong onsite presence in Hainan, partner to manage all its commercial spaces, Avolta can through the joint presence of Alibaba and Avolta in a joint- provide extensive master concessionaire services. venture in the Global Duty Free Plaza of the Mova Hall Avolta operates in 73 countries in over 1,000 airports, motorways and other locations worldwide. Making customers happier and providing a flawless holistic travel experience through the unique combination of travel retail and F&B. and traditions as well as through hybrid and mixed store ment management, while driving performance by initiat- formats, which immediately expand and mutually enhance ing concept innovation. the value proposition and the relevance for customers. This generates additional cross selling and promotion opportunities offered to customers digitally or through vouchers, encouraging travelers to visit and browse several outlets. The same applies to the relevance and the reach of loyalty programs, which result in a higher attractiveness for Enhanced digital engagement pre-, post- and in-store. customers and an increased number of touch-points and Avolta’s digital strategy is all about closely engaging with engagement opportunities for the operators. existing and potential customers throughout their travel Our people deliver customized services at top levels. journey and is focused on achieving three main goals: – Further engage with frequent travelers and establish deeper connections. Increase their loyalty by leveraging CRM initiatives, offer and service personalization as well as new mobile apps and partnerships Our front-line team members play a key role in delivering a – Excel in sales influenced by new digital touchpoints cre- transformational shopping and dining experience to our ated with partners across the whole travel journey, by ex- customers. We will continue to further customize engage- panding the reach of Reserve & Collect, and evolving the ment with shop and restaurant concepts and service levels omni-channel engagement and sales approach adapted to specific needs by geography and passenger – Transform the shopping and dining experience in-store. profile in order to create memorable experiences and the Intensify the use of technology for enhanced engage- best possible added-value. These advanced engagement ment and experience. Develop new services for targeted initiatives will be supported by comprehensive training, customer audiences, e.g. the Avolta Employee App. dedicated incentive schemes and technology support. Self-learning smart stores and data-driven offering. All these initiatives are driven by social media and CRM communication to keep travelers informed about surpris- ing initiatives, activations and in-store experiences. Part- nering with suppliers to feature brand-specific content throughout the complete journey is key. Highly focused use of technology allows Avolta to learn Geographical Diversification from customer behavior within the shops on an anony- Diversification is a recurrent theme in Avolta’s overall strat- mized basis. This provides valuable insights on where to egy, as diversification enhances resilience and supports enhance and adapt assortments or allocate additional growth. Geographic and channel diversification reduces team members to increase customer service. Data in- exposure to single contracts or local and regional external sights optimize both store or F&B concepts and assort- impacts as shown by the share in sales: the largest con- Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 31/336 cession accounts for less than 4 % of our business, while the ten biggest represent less than 18 % of 2023 sales. With respect to the geographic diversification the focus is on further developing North America’s footprint, develop- ing a dedicated strategy for the top Asia-Pacific countries and the Chinese travelers in particular, as well as to foster and grow the company’s position in the rest of the world. In all geographies the aim is to optimize the combination of duty-free, duty-paid and F&B offers by either growing organically through new contract wins or joint-ventures, as well as by benefitting from bolt-on M&A opportunities where strategically feasible. With respect to North America, Avolta has a presence in approximately 100 airports – with a significant overlap of retail and F&B – and sees potential incremental organic growth opportunities in what is typically a very resilient market. For our existing concession partners, our new hy- brid concepts, including F&B and travel retail, enhances our offer, consequently boosting customer experience while allowing airports to optimize retail space, passenger flows and ultimately spend-per-passenger and revenue generation. Extend North American footprint further. Moreover, the unique sets of expertise in both the travel retail and F&B sectors increase Avolta’s attractiveness when participating in tenders in new locations where we are not yet present. The comprehensive know-how on passenger shopping and dining behaviors and insights covering both domestic and international profiles across North America – as well as rest of the world – is an impor- tant competitive advantage put at the service of each air- port operator. In cases where the airport wants only one partner to manage all its commercial spaces, Avolta can provide extensive master concessionaire services. Until 2019, Asia-Pacific was the fastest growing travel re- tail market and is expected to resume this leading position in the coming years. Equally, Chinese travelers contributed to close to 40 % of Asia-Pacific’s passenger volume – and this is expected to grow further over the medium-term. Focus on key Asia-Pacific markets and Chinese travelers. Based on this insight, the key success factor in Asia-Pa- cific is to strongly engage with Chinese passengers do- mestically as well as when they travel internationally to neighboring countries such as Vietnam and Indonesia, amongst others, given that 80 % of Chinese international travel is within the Asia-Pacific region. A strong local pres- ence and a dedicated strategy focused on this geographic area is therefore key to harnessing the high spending power of the Chinese customer. Avolta already has a solid footprint in the Asia-Pacific re- gion with operations in 11 countries and featuring a wide variety of retail formats and F&B concepts, and is well po- sitioned for further expansion in existing and new loca- tions. Channels cover duty-paid, duty-free and F&B. Simi- lar to other geographies, the opportunity of offering airport operators hybrid and combined retail and F&B concepts through one single partner creates additional potential to grow organically in this important region. As an example, in 2023 Avolta entered into a joint-venture with Hubei Airport Group, to act as master concessionaire at Wuhan Tianhe Airport’s newly built Terminal 2 in central China. Another important asset in Asia-Pacific and China is the partnership with Alibaba, established in 2020. This also in- cludes an equity participation by Alibaba in Avolta. On the one hand, it secures a strong onsite presence in Hainan, through the joint presence of Alibaba and Avolta in a joint- venture in the Global Duty Free Plaza of the Mova Hall Avolta operates in 73 countries in over 1,000 airports, motorways and other locations worldwide. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 32/336 Avolta supports communities by sourcing local products, providing job opportunities and engaging in community projects. Shopping Center in Haikou, with a retail area of close to 39,000 m2 and featuring several hundred international brands. On the other hand, it extends Alibaba’s ecosystem into travel retail, allowing to engage more closely with Chi- nese travelers worldwide through different online-chan- nels and services thus fostering Avolta’s omni-channel ap- proach. These include customer services covering the whole travel journey i.e. from pre-ordering and buying be- fore the trip, buying and collecting during the trip to repur- chasing after the trip. By leveraging Alibaba’s presence and access to all relevant online-platforms in the region, the joint-venture secures a strong digital customer en- gagement and wide-spread presence in the market. Avolta is currently present in 73 countries covering six continents. Avolta has some of its largest footprints and strongest positions in North America, Europe, the Middle East and Central & South America. Some of these geo- graphies feature a dense network of operations in single countries as in North America, Europe or regionally as in Central & South America. Expected growth in passenger numbers over the next five years coupled with expanded offerings creates attractive scale prospects. Grow our already robust position in the Rest of the World. In many of these markets Avolta’s combined expertise of travel retail and F&B is seen as an additional asset by con- cession operators wanting to offer their passengers an enhanced customer experience, while at the same time simplifying space management and improving perfor- mance of their overall retail area. Leveraging existing part- nerships in these markets and providing attractive alterna- tives in new locations, including airports, train stations and motorways, will permit Avolta to strengthen its footprint in some of the world’s most important tourist destinations. In all these markets, further growth can be driven organi- cally, through joint-ventures or by bolt-on M&A transac- tions alike. Operational Improvement Culture The most important element in successfully implement- ing our Destination 2027 strategy will be on how we – as One Team and One Company – approach its implementa- tion and execution. In all we do, we will establish an ongo- ing culture of operational improvement to jointly drive growth, profitability and cash flow generation. For us, this means identifying operational savings by actively manag- ing our business and customer portfolio. Zero-base-budgeting methodology. Key trends and methodologies to actively drive costs as well as reset and improve efficiency require focusing on what is critical and needed to run the business. Identifying new technologies to implement new ways of working, le- veraging the power of digital data, as well as increasing flexibility and agility are key to this. We understand the concept of zero-based-budgeting in the wider sense, as- sessing every single activity, how it contributes to the busi- ness, and how it can be improved. Active portfolio management driving profitability. the traveler at its core and unifying the travel retail and F&B businesses under one strong entity. While the new brand will provide an inclusive new home for all team members and lead all internal and external communica- We will regularly screen and assess our concession port- tion, the former consumer-facing brands, including Dufry, folio with respect to its profitability to react in a timely Autogrill, Hudson and World Duty Free, to name a few, will manner with respect to renegotiating or exiting contracts continue to operate as previously. which do not fulfil our concession specific objectives and expectations. Over time this will allow us to consistently Detailed information on Avolta’s new brand name and improve portfolio quality and performance. architecture is available in the dedicated poster at the beginning of the Annual Report 2023. In this context, we will also engage in an ongoing evalua- tion, analysis and discussion with some of the most critical Destination 2027 Strengthens Avolta’s airports to jointly identify and develop possible growth Investment Case and efficiency levers. The key prerequisite being a perma- Building on the four key pillars of our Destination 2027 nent and cyclical performance review and re-evaluation of strategy, solid financial planning teamed with a strong the portfolio, starting with the pre-contractual due-dili- cash flow generation capability and risk management are gence and extended throughout the duration of each key features of Avolta’s clear and focused strategy, which concession. ESG – inherent part of all we do is powered by our people. Together they secure value cre- ation for investors and shareholders. The company has al- ways fostered a disciplined financial approach to all its Avolta’s ESG engagement is based on four key pillars: Cre- projects, whether organic or acquisitions. We carefully an- ate Sustainable Travel Experiences, Respect Our Planet, alyze every project or significant investment with detailed Empower Our People, Engage Local Communities. For projections and with a focus on minimum return require- each focus area Avolta develops targeted initiatives to ments. This culture of giving importance to returns and make its ESG engagement tangible and to focus on topics cost control has allowed us to grow our business profit- where the company can make a real impact. ably and capture opportunities in many different markets and in our recent history contributed to safeguard the re- Implementation and development of the comprehensive silience of the company. ESG strategy is managed through strong governance, making sure it is at the center of the company’s activities As part of our financial risk management, we minimize and securing sustainable growth for our stakeholders. business risks by implementing a highly variable cost structure. These defensive characteristics help protect the Through its presence in 73 countries and across over business in the case of downturns, which under normal 1,000 locations Avolta is an important employer – in 2023 conditions tend to be local and temporary, and thus pro- we employed 68,459 people (FTE) – thus providing job op- vide a solid and resilient profile. For further information on portunities for communities around the world. Addition- our equity story as the world’s leading global travel expe- ally, Avolta has traditionally supported local communities rience player, please refer to the section Investors on page by sourcing local products & services and engaging in 86 of the Annual Report 2023. dedicated community projects, implemented at compa- nyp level, by our local teams and / or in collaboration with our concession partners. This allows us to provide specific and tangible support where it is most needed. Detailed information on Avolta’s ESG strategy and imple- mentation progress is available in the ESG Report 2023 on pages 97 – 148. Avolta – New unified brand reflecting the company’s long-term vision At the Extraordinary General Meeting held on November 3, 2023, Dufry shareholders approved by an overwhelming majority of 99.77 % the change of the company name to Avolta. This new branding encapsulates our long-term vi- sion of creating the travel experience revolution by putting Avolta supports communities by sourcing local products, providing job opportunities and engaging in community projects. Shopping Center in Haikou, with a retail area of close to motorways, will permit Avolta to strengthen its footprint in 39,000 m2 and featuring several hundred international some of the world’s most important tourist destinations. brands. On the other hand, it extends Alibaba’s ecosystem into travel retail, allowing to engage more closely with Chi- In all these markets, further growth can be driven organi- nese travelers worldwide through different online-chan- cally, through joint-ventures or by bolt-on M&A transac- nels and services thus fostering Avolta’s omni-channel ap- tions alike. proach. These include customer services covering the whole travel journey i.e. from pre-ordering and buying be- Operational Improvement Culture fore the trip, buying and collecting during the trip to repur- The most important element in successfully implement- chasing after the trip. By leveraging Alibaba’s presence ing our Destination 2027 strategy will be on how we – as and access to all relevant online-platforms in the region, One Team and One Company – approach its implementa- the joint-venture secures a strong digital customer en- tion and execution. In all we do, we will establish an ongo- gagement and wide-spread presence in the market. ing culture of operational improvement to jointly drive growth, profitability and cash flow generation. For us, this Avolta is currently present in 73 countries covering six means identifying operational savings by actively manag- continents. Avolta has some of its largest footprints and ing our business and customer portfolio. strongest positions in North America, Europe, the Middle East and Central & South America. Some of these geo- graphies feature a dense network of operations in single countries as in North America, Europe or regionally as in Central & South America. Expected growth in passenger numbers over the next five years coupled with expanded offerings creates attractive scale prospects. Grow our already robust position in the Rest of the World. cession operators wanting to offer their passengers an enhanced customer experience, while at the same time simplifying space management and improving perfor- mance of their overall retail area. Leveraging existing part- nerships in these markets and providing attractive alterna- tives in new locations, including airports, train stations and Zero-base-budgeting methodology. Key trends and methodologies to actively drive costs as well as reset and improve efficiency require focusing on what is critical and needed to run the business. Identifying new technologies to implement new ways of working, le- veraging the power of digital data, as well as increasing flexibility and agility are key to this. We understand the concept of zero-based-budgeting in the wider sense, as- In many of these markets Avolta’s combined expertise of sessing every single activity, how it contributes to the busi- travel retail and F&B is seen as an additional asset by con- ness, and how it can be improved. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 33/336 the traveler at its core and unifying the travel retail and F&B businesses under one strong entity. While the new brand will provide an inclusive new home for all team members and lead all internal and external communica- tion, the former consumer-facing brands, including Dufry, Autogrill, Hudson and World Duty Free, to name a few, will continue to operate as previously. Detailed information on Avolta’s new brand name and architecture is available in the dedicated poster at the beginning of the Annual Report 2023. Destination 2027 Strengthens Avolta’s Investment Case Building on the four key pillars of our Destination 2027 strategy, solid financial planning teamed with a strong cash flow generation capability and risk management are key features of Avolta’s clear and focused strategy, which is powered by our people. Together they secure value cre- ation for investors and shareholders. The company has al- ways fostered a disciplined financial approach to all its projects, whether organic or acquisitions. We carefully an- alyze every project or significant investment with detailed projections and with a focus on minimum return require- ments. This culture of giving importance to returns and cost control has allowed us to grow our business profit- ably and capture opportunities in many different markets and in our recent history contributed to safeguard the re- silience of the company. As part of our financial risk management, we minimize business risks by implementing a highly variable cost structure. These defensive characteristics help protect the business in the case of downturns, which under normal conditions tend to be local and temporary, and thus pro- vide a solid and resilient profile. For further information on our equity story as the world’s leading global travel expe- rience player, please refer to the section Investors on page 86 of the Annual Report 2023. Active portfolio management driving profitability. We will regularly screen and assess our concession port- folio with respect to its profitability to react in a timely manner with respect to renegotiating or exiting contracts which do not fulfil our concession specific objectives and expectations. Over time this will allow us to consistently improve portfolio quality and performance. In this context, we will also engage in an ongoing evalua- tion, analysis and discussion with some of the most critical airports to jointly identify and develop possible growth and efficiency levers. The key prerequisite being a perma- nent and cyclical performance review and re-evaluation of the portfolio, starting with the pre-contractual due-dili- gence and extended throughout the duration of each concession. ESG – inherent part of all we do Avolta’s ESG engagement is based on four key pillars: Cre- ate Sustainable Travel Experiences, Respect Our Planet, Empower Our People, Engage Local Communities. For each focus area Avolta develops targeted initiatives to make its ESG engagement tangible and to focus on topics where the company can make a real impact. Implementation and development of the comprehensive ESG strategy is managed through strong governance, making sure it is at the center of the company’s activities and securing sustainable growth for our stakeholders. Through its presence in 73 countries and across over 1,000 locations Avolta is an important employer – in 2023 we employed 68,459 people (FTE) – thus providing job op- portunities for communities around the world. Addition- ally, Avolta has traditionally supported local communities by sourcing local products & services and engaging in dedicated community projects, implemented at compa- nyp level, by our local teams and / or in collaboration with our concession partners. This allows us to provide specific and tangible support where it is most needed. Detailed information on Avolta’s ESG strategy and imple- mentation progress is available in the ESG Report 2023 on pages 97 – 148. Avolta – New unified brand reflecting the company’s long-term vision At the Extraordinary General Meeting held on November 3, 2023, Dufry shareholders approved by an overwhelming majority of 99.77 % the change of the company name to Avolta. This new branding encapsulates our long-term vi- sion of creating the travel experience revolution by putting Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 34/336 Avolta’s quest to create unri- valled and holistic travel expe- riences builds on putting cus- tomer-centricity at the core of all its initiatives and on con- tinuously evolving its value proposition and offerings. To increase customer attrac- tion, we continually analyze customer insights and data gained from different sources to identify new customer trends and behaviours. Intelli- gence gained is then trans- lated into a variety of shop and restaurant characteristics – flexible, local, entertaining, smart, hybrid – which allow us to fulfil the new customer ex- pectations, while at the same time continuing to learn and to adapt our concepts. Evidently, this evolution is only possible through a tight collaboration with our conces- sion partners and brand suppliers, who provide the respective area allocation, passenger flows and product innovation. t n a r u a t s e R d n a p o h S c i r t n e C - r e m o t s u C s t p e c n o C Flexible Flexible store and restaurant formats allow Avolta to react quickly to new trends and / or to create seasonal hot-spots and pop-up offerings, thus constantly driving spend-per-passenger and optimizing profitability of commercial spaces. Local Providing shops and F&B environments with a strong sense of place drives the attrac- tiveness of the commercial areas and creates more relevance and authenticity for each individual location resulting in higher spending. Customers are attracted by cultural themes and traditions, leading them to browse the shops or to enjoy a local dining specialty, all contributing to delivering a unique travel experience. Entertaining Getting the customer's attention and attracting them into the stores or to sit down in a restaurant is one of the main challenges in travel retail and F&B. Entertaining elements appealing to the customer’s curiosity or attention helps them rest, relax and enjoy the commercial spaces and piques their interest to try new experiences. Smart Hybrid Collecting data and studying the customer’s shopping behaviour is key to evolving assort- ments and services. Learning directly from the customers on how they browse the shops, where they stop and what attracts them provides constant valuable insight for each specific commercial area and is the base to best allocating the right assortments or re- sources. The shop becomes a self-learning entity, constantly improving its performance. Mixed and hybrid store formats expand and mutually enhance the value proposition and the relevance for customers. The more holistic experience combining shopping, F&B, treatments and entertainment allows Avolta to drive cross-selling and promotion opportunities and to connect physical presence with digital engagement before, during and after travelling. Avolta’s quest to create unri- valled and holistic travel expe- riences builds on putting cus- tomer-centricity at the core of all its initiatives and on con- tinuously evolving its value proposition and offerings. To increase customer attrac- tion, we continually analyze customer insights and data gained from different sources to identify new customer trends and behaviours. Intelli- gence gained is then trans- lated into a variety of shop and restaurant characteristics – flexible, local, entertaining, smart, hybrid – which allow us to fulfil the new customer ex- pectations, while at the same time continuing to learn and to adapt our concepts. Evidently, this evolution is only possible through a tight collaboration with our conces- sion partners and brand suppliers, who provide the respective area allocation, passenger flows and product innovation. t n a r u a t s e R d n a p o h S c i r t n e C - r e m o t s u C s t p e c n o C Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 35/336 Flexible Flexible store and restaurant formats allow Avolta to react quickly to new trends and / or to create seasonal hot-spots and pop-up offerings, thus constantly driving spend-per-passenger and optimizing profitability of commercial spaces. Local Providing shops and F&B environments with a strong sense of place drives the attrac- tiveness of the commercial areas and creates more relevance and authenticity for each individual location resulting in higher spending. Customers are attracted by cultural themes and traditions, leading them to browse the shops or to enjoy a local dining specialty, all contributing to delivering a unique travel experience. Entertaining Getting the customer's attention and attracting them into the stores or to sit down in a restaurant is one of the main challenges in travel retail and F&B. Entertaining elements appealing to the customer’s curiosity or attention helps them rest, relax and enjoy the commercial spaces and piques their interest to try new experiences. Smart Collecting data and studying the customer’s shopping behaviour is key to evolving assort- ments and services. Learning directly from the customers on how they browse the shops, where they stop and what attracts them provides constant valuable insight for each specific commercial area and is the base to best allocating the right assortments or re- sources. The shop becomes a self-learning entity, constantly improving its performance. Hybrid Mixed and hybrid store formats expand and mutually enhance the value proposition and the relevance for customers. The more holistic experience combining shopping, F&B, treatments and entertainment allows Avolta to drive cross-selling and promotion opportunities and to connect physical presence with digital engagement before, during and after travelling. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 36/336 R L B l e v a r T s p o h S l i a t e R l a r e n e G Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 37/336 l e v a r T s p o h S R L B l i a t e R l a r e n e G Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 36/336 General Travel Retail Shops The general travel retail shop is the most commonly used retail concept at Avolta, covering the full range of categories, such as perfumes & cosmetics, food & confectionary, wines & spirits, watches & jewelry, fashion & leather, tobacco goods, souvenirs & electronics and others. General travel retail shops carry a large product as- sortment 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. The shops are also characterized by a high level of digitalization allowing a close in-store customer communication and engagement with the different nationalities visit- ing the stores during the course of the day. 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 combination linking to the specific location, such as Zurich Duty-Free or Stockholm Duty-Free. In the duty-paid segment, the general travel retail shops are known as Dufry- Shopping and provide a similar assortment range and brand variety to do- mestic passengers offering them a similar shopping ex- perience to the one offered to international travelers. As of December 31, 2023, Avolta operated 786 gen- eral travel retail shops. Perfumes Cosmetics Food Confectionary Wines Spirits Watches Jewelry R L B Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 37/336 General Travel Retail Shops The general travel retail In the duty-free segment, shop is the most commonly these shops can be identi- used retail concept at fied by carrying the name Avolta, covering the full of several retail brands in range of categories, such our portfolio, including as perfumes & cosmetics, Dufry, Nuance, World Duty food & confectionary, Free, and Hellenic Duty wines & spirits, watches & Free among others, or a jewelry, fashion & leather, name combination linking tobacco goods, souvenirs to the specific location, & electronics and others. such as Zurich Duty-Free or Stockholm Duty-Free. General travel retail shops carry a large product as- In the duty-paid segment, sortment and are typically the general travel retail located in central areas shops are known as Dufry- with high passenger flow, Shopping and provide a mostly in airports, but can similar assortment range also be in seaports and and brand variety to do- other locations. In airports, mestic passengers offering both departure and arrival them a similar shopping ex- areas can be fitted with this perience to the one offered shop concept. The shops to international travelers. are also characterized by As of December 31, 2023, a high level of digitalization Avolta operated 786 gen- allowing a close in-store eral travel retail shops. customer communication and engagement with the different nationalities visit- ing the stores during the course of the day. Perfumes Cosmetics Food Confectionary Wines Spirits Watches Jewelry R L B Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 38/336 K A H s e r o t S e c n e i n e v n o C Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 39/336 s e r o t S i e c n e n e v n o C K A H Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 38/336 Convenience Stores Our convenience stores offer a wide product assort- ment that passengers may need when traveling. The range includes soft drinks, confectionary, packaged food, travel accessories, electronics, personal items, souvenirs, newspapers, magazines and books. Within this concept, we use different brands according to each locations's passen- ger profile. North America is home to most of our con- venience stores, with more than 752 shops. In addition, we operate Hudson stores in 15 countries outside North America. “Hudson” is our most im- portant brand in the conve- nience segment, it is highly valued and has strong cus- tomer recognition. As “The Traveler’s Best Friend”, Hudson's goal is to provide passengers with anything they need during their jour- ney. Hudson is a successful, very flexible concept oper- ated at airports within inter- national and domestic ar- eas, as well as in other channels such as railway stations and other transit locations. Hudson shops are carefully designed and facilitate orientation through whimsical, color- coded signage to attract customers’ attention to four distinct selling areas: Media, Marketplace, Essen- tials and Destination. The innovative Hudson Nonstop shop leverages Amazon’s just-walk-out and Amazon One technologies, allowing travelers to enter the store with their credit card or through palm recognition, pick up their travel items, and eliminating the need to wait in checkout lines or stopping to pay in-store. In line with our goal to cre- ate hybrid shop concepts Hudson has most recently been successfully com- bined with F&B concepts offering travelers a com- plete new experience. Recent examples are the Hudson Café with Baci at Milan Malpensa Airport in Italy and the Hudson Decanted at Dallas Fort Worth International Airport (USA) combining Hudson’s Nonstop concept with a wine bar. Soft drinks Confectionary Packaged food Travel accessories Electronics Personal items Books & Souvenirs Newspapers & Magazines K A H Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 39/336 Convenience Stores Our convenience stores locations. Hudson shops offer a wide product assort- are carefully designed and ment that passengers may facilitate orientation need when traveling. The through whimsical, color- range includes soft drinks, coded signage to attract confectionary, packaged customers’ attention to food, travel accessories, four distinct selling areas: electronics, personal items, Media, Marketplace, Essen- souvenirs, newspapers, tials and Destination. The magazines and books. innovative Hudson Nonstop Within this concept, we use shop leverages Amazon’s different brands according just-walk-out and Amazon to each locations's passen- One technologies, allowing ger profile. North America travelers to enter the store is home to most of our con- with their credit card or venience stores, with more through palm recognition, than 752 shops. In addition, pick up their travel items, we operate Hudson stores and eliminating the need to in 15 countries outside North America. wait in checkout lines or stopping to pay in-store. “Hudson” is our most im- In line with our goal to cre- portant brand in the conve- ate hybrid shop concepts nience segment, it is highly Hudson has most recently valued and has strong cus- been successfully com- tomer recognition. As “The bined with F&B concepts Traveler’s Best Friend”, offering travelers a com- Hudson's goal is to provide plete new experience. passengers with anything Recent examples are the they need during their jour- Hudson Café with Baci ney. Hudson is a successful, at Milan Malpensa Airport very flexible concept oper- in Italy and the Hudson ated at airports within inter- Decanted at Dallas Fort national and domestic ar- Worth International Airport eas, as well as in other (USA) combining Hudson’s channels such as railway Nonstop concept with a stations and other transit wine bar. Soft drinks Confectionary Packaged food Travel accessories Electronics Personal items Books & Souvenirs Newspapers & Magazines K A H d n a r B s e u q i t u o B Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 40/336 H R Z Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 41/336 d n a r B s e u q i t u o B H R Z Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 40/336 Brand Boutiques Avolta is a partner of choice for global and local brands to showcase their products in dedicated retail spaces and to mirror their high-street image. To best meet each location’s trav- eler 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 en- hance the traveler’s experi- ence, allowing the creation of an exciting shopping mall environment. As of December 31, 2023, Avolta operated 248 brand boutiques, such as: Armani, Burberry, Bally, Bvlgari, Cartier, Chloe, Coach, Ermenegildo Zegna, Hermès, Hugo Boss, Jo Malone London, Lacoste, LaPrairie, Lindt, MAC, MCM, Michael Kors, Montblanc, Omega, Polo Ralph Lauren, Salvatore Ferragamo, Swarovski, Swatch, Tod’s, Tumi, Versace, Victoria’s Secret and others. See also a selection of brands on pages 94 – 95. H R Z We design these shops as standalone boutiques or integrate them as a shop-in-shop in our general travel retail stores. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 41/336 Brand Boutiques Avolta is a partner of As of December 31, 2023, choice for global and local Avolta operated 248 brand brands to showcase their boutiques, such as: products in dedicated retail Armani, Burberry, Bally, spaces and to mirror their Bvlgari, Cartier, Chloe, high-street image. To best Coach, Ermenegildo meet each location’s trav- Zegna, Hermès, Hugo eler profile, we design Boss, Jo Malone London, these shops as standalone Lacoste, LaPrairie, Lindt, boutiques or integrate MAC, MCM, Michael Kors, them as a shop-in-shop in Montblanc, Omega, Polo our general travel retail Ralph Lauren, Salvatore stores. Brand boutiques Ferragamo, Swarovski, exist in both duty-free and Swatch, Tod’s, Tumi, duty-paid areas and en- Versace, Victoria’s Secret hance the traveler’s experi- and others. See also a ence, allowing the creation selection of brands on of an exciting shopping pages 94 – 95. mall environment. We design these shops as standalone boutiques or integrate them as a shop-in-shop in our general travel retail stores. H R Z Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 42/336 S O B s p o h S d e z i l a i c e p S Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 43/336 s p o h S d e z i l i a c e p S S O B Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 42/336 Specialized Shops Specialized shops and theme stores are shop concepts that offer prod- ucts from a variety of dif- ferent brands, belonging to one specific product category or which convey a sense of place. We often use this concept for prod- ucts such as watches & jewelry, sunglasses, elec- tronics, 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, sea- ports 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; “Gifts & Toys” with its wide selection of toys, and gifting items; “Tech on the Go”, focusing on the needs of the tech-oriented traveler offering electron- ics and accessories. Further examples are “Sun Catcher” for sunglasses; “World of Whiskies” and for a selection of finest single malt or blend whiskies; “Master of Time” for luxury watches and jewelry; “Temptation” and “Time- box” for fashion watches and accessories; “Travel Star” for luggage and travel essential products and “Atelier”, a women’s leather accessories store as well as the “mind.body. soul.” shop-in-shop con- cept featuring a selection of health and well-being products. The most recent special- ized shop concept launched in 2023 is “Haute Parfumerie” featuring high- level and innovative per- fumes. As of December 31, 2023, Avolta operated 449 shops under the Special- ized Shops /Theme Stores concept. Watches & Jewelry Sunglasses Electronics Spirits Food Destination products S O B Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 43/336 Specialized Shops Specialized shops and theme stores are shop Further examples are “Sun Catcher” for sunglasses; concepts that offer prod- “World of Whiskies” and for ucts from a variety of dif- a selection of finest single ferent brands, belonging malt or blend whiskies; to one specific product “Master of Time” for luxury category or which convey watches and jewelry; a sense of place. We often “Temptation” and “Time- use this concept for prod- box” for fashion watches ucts such as watches & and accessories; “Travel jewelry, sunglasses, elec- Star” for luggage and tronics, spirits, food and travel essential products destination products, in and “Atelier”, a women’s locations where we see leather accessories store potential for a shop to carry as well as the “mind.body. a broad product range soul.” shop-in-shop con- relating to one specific cept featuring a selection theme. These shops can of health and well-being be located in airports, sea- products. ports and on-board cruise liners, as well as in hotels The most recent special- or downtown locations. ized shop concept Examples of the shop launched in 2023 is “Haute Parfumerie” featuring high- concept names include level and innovative per- “Colombian Emeralds fumes. As of December 31, International”, a dedicated 2023, Avolta operated 449 watches & jewelry format shops under the Special- used in the Caribbean ized Shops /Theme Stores market; “Gifts & Toys” with concept. its wide selection of toys, and gifting items; “Tech on the Go”, focusing on the needs of the tech-oriented traveler offering electron- ics and accessories. Watches & Jewelry Sunglasses Electronics Spirits Food Destination products S O B é f a C s t p e c n o C Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 44/336 P X M Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 45/336 é f a C s t p e c n o C P X M Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 44/336 Café Concepts Cafés are an ubiquitous presence in travel loca- tions, embodying comfort and convenience. They are a place for travelers to relax in a cozy atmosphere or swiftly grab a quality coffee. Our Café Concepts inte- grate a casual service style with a range of beverages and light bites. Leveraging our Italian heritage, we offer a variety of options from coffee and tea to soft drinks and cold beverages, maintaining relevance in the local market. Their role in enhancing the traveler's experience is both funda- mental and multifaceted, catering to the need for re- laxation and the demands of a busy itinerary. Our expert team of con- cept developers, special- ized in geographic areas and categories, ensures that these cafes adapt to local flavors and themes, enhancing the sense of place. The evolving brand portfolio, managed by our F&B centers of excellence, meets travelers' diverse tastes and contributes to immersive customer experiences. Our Café Concepts create a unique sense of place, enhancing the overall travel experi- ence. This year we have opened a variety of Café Concepts around the world; in North America we brought in popular local concepts, “Southern Grounds” and “Beatrix Market” to Jack- sonville International Air- port and Charlotte Douglas International Airport re- spectively. In Italy we opened our own “Motta Milano 1928” in Rome Fiumicino Airport, as well as our “Wascoffee Lab” in Palermo Borsellino Airport. We took our Italian “Puro Gusto” brand to Chongq- ing Airport in China, while in Finland we opened an “Espresso House” in Hel- sinki Airport. A cornerstone in our offering, rich in Italian heritage, essential in the traveler’s journey. P X M Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 45/336 Café Concepts Cafés are an ubiquitous F&B centers of excellence, presence in travel loca- meets travelers' diverse tions, embodying comfort tastes and contributes and convenience. They are to immersive customer a place for travelers to relax experiences. Our Café in a cozy atmosphere or Concepts create a unique swiftly grab a quality coffee. sense of place, enhancing the overall travel experi- Our Café Concepts inte- ence. grate a casual service style with a range of beverages This year we have opened and light bites. Leveraging a variety of Café Concepts our Italian heritage, we around the world; in offer a variety of options North America we brought from coffee and tea to soft in popular local concepts, drinks and cold beverages, “Southern Grounds” and maintaining relevance in “Beatrix Market” to Jack- the local market. Their role sonville International Air- in enhancing the traveler's port and Charlotte Douglas experience is both funda- International Airport re- mental and multifaceted, spectively. In Italy we catering to the need for re- opened our own “Motta laxation and the demands Milano 1928” in Rome of a busy itinerary. Fiumicino Airport, as well as our “Wascoffee Lab” in Our expert team of con- Palermo Borsellino Airport. cept developers, special- We took our Italian “Puro ized in geographic areas Gusto” brand to Chongq- and categories, ensures ing Airport in China, while that these cafes adapt to in Finland we opened an local flavors and themes, “Espresso House” in Hel- enhancing the sense of sinki Airport. place. The evolving brand portfolio, managed by our A cornerstone in our offering, rich in Italian heritage, essential in the traveler’s journey. P X M Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 46/336 S U D s t p e c n o C t n a r u a t s e R Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 47/336 s t p e c n o C t n a r u a t s e R S U D Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 46/336 2023 saw some exciting Restaurant Concept open- ings across cuisines and service formats globally; in India we opened our “Car- luccio’s” in Kempegowda International Airport, while in the UAE we opened the well-known “Jones the Gro- cer” concept. We brought popular Brazilian-Japanese fusion concept, “Temak- inho”, and our own “Sophia Loren” to Rome Fiumicino Airport, Italy. Our “Amore Do Eat Better” concept was opened in both Düsseldorf Airport, Germany, and Athens International Air- port, Greece. In North America we opened our “Manuka Market” at Daniel K. Inouye International Air- port, and took local brand “The Pharmacy Burger Parlor” to Nashville Interna- tional Airport. Restaurant Concepts Our Restaurant Concepts transform travel hubs into culinary destinations. From fast-casual to full-service, through to quick service and counter service or self- service, these restaurants cater to all schedules and preferences, featuring col- laborations with renowned chefs and successful global brands. Our diverse brand portfolio includes both franchised and proprietary brands, de- veloped in-house to cater to the varied needs of our global network. This differ- entiation allows us to lever- age brand success and, when relevant, develop bespoke, one-off formats, enhancing customer expe- rience and maximizing appreciation and sales. These restaurants not only embody local and interna- tional flavors but also inte- grate the latest innovations in food development, ser- vice technology, and de- sign. They can align with specific themes or passen- ger preferences, enriching the ambiance of the loca- tion and offering travelers a taste of the destination’s essence. Diverse, innovative, catering to every imagin- able culinary desire. S U D Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 47/336 Restaurant Concepts Our Restaurant Concepts 2023 saw some exciting transform travel hubs into Restaurant Concept open- culinary destinations. From ings across cuisines and fast-casual to full-service, service formats globally; in through to quick service India we opened our “Car- and counter service or self- luccio’s” in Kempegowda service, these restaurants International Airport, while cater to all schedules and in the UAE we opened the preferences, featuring col- well-known “Jones the Gro- laborations with renowned cer” concept. We brought chefs and successful popular Brazilian-Japanese global brands. fusion concept, “Temak- inho”, and our own “Sophia Our diverse brand portfolio Loren” to Rome Fiumicino includes both franchised Airport, Italy. Our “Amore and proprietary brands, de- Do Eat Better” concept was veloped in-house to cater opened in both Düsseldorf to the varied needs of our Airport, Germany, and global network. This differ- Athens International Air- entiation allows us to lever- port, Greece. In North age brand success and, America we opened our when relevant, develop “Manuka Market” at Daniel bespoke, one-off formats, K. Inouye International Air- enhancing customer expe- port, and took local brand rience and maximizing appreciation and sales. “The Pharmacy Burger Parlor” to Nashville Interna- tional Airport. These restaurants not only embody local and interna- tional flavors but also inte- grate the latest innovations in food development, ser- vice technology, and de- sign. They can align with specific themes or passen- ger preferences, enriching the ambiance of the loca- tion and offering travelers a taste of the destination’s essence. Diverse, innovative, catering to every imagin- able culinary desire. S U D r a B s t p e c n o C Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 48/336 M A H Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 49/336 r a B s t p e c n o C M A H Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 48/336 The trends in Bar Concepts were clearly visible in our 2023 openings, with a taste for indulgence seeing the successful opening of our visually stunning “Bubbles Wine and Seafood Bar” in Schiphol International Air- port in the Netherlands, as well as the “Berlucchi Fran- ciacorta Sparkling Bar” in Italy’s Rome Fiumicino Airport and recently in our opening of “Bottega Pro- secco Bar and Craft Beer” in Abu Dhabi International Airport’s newest terminal in the UAE. In Indonesia, we brought to life a large Bar- Restaurant in I Gusti Ngu- rah Rai Airport with “Wolf- gang Puck Kitchen + Bar”. While in North America we teamed up with a local craft beer brand to open our “Hudson Brewing” bar at Toronto Pearson Interna- tional Airport, and our own “The Wise Omega Bodega” is off to a solid start at Memphis International Air- port. Bar Concepts Serving as social hubs at airports, train stations, and other transport locations, Bars offer travelers a space to unwind and connect, adding a lively dimension to their transit experience. Our Bar Concepts create vibrant social spaces in transit locations, offering a spectrum of beverages and light fare. From casual pubs to upscale venues, they are responsive to cultural nuances and trends, en- hancing the sense of place and meeting diverse trav- eler preferences. These bars are not just for refresh- ment but are destinations in their own right. Bar Concepts typically fea- ture a variety of beverages, from cocktails to craft beers, coupled with small bites or appetizers. These concepts can easily incor- porate local beverage tradi- tions or theme-specific elements, creating an im- mersive experience that resonates with the loca- tion’s character. This flexi- bility not only meets the diverse preferences of trav- elers but also enhances the sense of place within the transit environment. Versatile social hubs for celebrating, unwinding, and connecting. M A H Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 49/336 Bar Concepts Serving as social hubs at The trends in Bar Concepts airports, train stations, and were clearly visible in our other transport locations, 2023 openings, with a taste Bars offer travelers a space for indulgence seeing the to unwind and connect, successful opening of our adding a lively dimension to visually stunning “Bubbles their transit experience. Wine and Seafood Bar” in Schiphol International Air- Our Bar Concepts create port in the Netherlands, as vibrant social spaces in well as the “Berlucchi Fran- transit locations, offering a ciacorta Sparkling Bar” spectrum of beverages and in Italy’s Rome Fiumicino light fare. From casual pubs Airport and recently in our to upscale venues, they opening of “Bottega Pro- are responsive to cultural secco Bar and Craft Beer” nuances and trends, en- in Abu Dhabi International hancing the sense of place Airport’s newest terminal and meeting diverse trav- in the UAE. In Indonesia, we eler preferences. These brought to life a large Bar- bars are not just for refresh- Restaurant in I Gusti Ngu- ment but are destinations rah Rai Airport with “Wolf- in their own right. gang Puck Kitchen + Bar”. While in North America we Bar Concepts typically fea- teamed up with a local craft ture a variety of beverages, beer brand to open our from cocktails to craft “Hudson Brewing” bar at beers, coupled with small Toronto Pearson Interna- bites or appetizers. These tional Airport, and our own concepts can easily incor- “The Wise Omega Bodega” porate local beverage tradi- is off to a solid start at tions or theme-specific Memphis International Air- elements, creating an im- port. mersive experience that resonates with the loca- tion’s character. This flexi- bility not only meets the diverse preferences of trav- elers but also enhances the sense of place within the transit environment. Versatile social hubs for celebrating, unwinding, and connecting. M A H Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 50/336 l a r t n e C n i l r e B o G & b a r G s t p e c n o C Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 51/336 o G & b a r G s t p e c n o C l a r t n e n i l r e B C Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 50/336 2023 saw the notable openings of Grab & Go concept “Viva” at Italy’s Rome Fiumicino Airport, while in the UAE we opened a Grab & Go iteration of our “Urban Food Market” con- cept at Abu Dhabi Interna- tional Airport’s newest terminal. Grab & Go Concepts Our Grab & Go concepts prioritize speed and conve- nience without compro- mising on quality, ensuring travelers have access to quick, quality food options without interrupting their journey. Offering pre-packaged meals, snacks, and bever- ages, they cater to a variety of dietary preferences and provide a glimpse into local culinary delights. Strategi- cally placed, these outlets ensure travelers have easy access to essential F&B options, providing a variety of options to suit different tastes and dietary needs. Grab & Go concepts can be tailored to showcase local specialties or themed assortments, adding a unique flair to the standard quick-service model. This approach not only meets the practical needs of trav- elers but also gives them a quick taste of the local culture or the thematic essence of the location. Quick, quality, convenient – ideal for the traveler on the move. l a r t n e C n i l r e B Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 51/336 Grab & Go Concepts Our Grab & Go concepts 2023 saw the notable prioritize speed and conve- openings of Grab & Go nience without compro- concept “Viva” at Italy’s mising on quality, ensuring Rome Fiumicino Airport, travelers have access to while in the UAE we opened quick, quality food options a Grab & Go iteration of our without interrupting their “Urban Food Market” con- journey. cept at Abu Dhabi Interna- tional Airport’s newest Offering pre-packaged terminal. meals, snacks, and bever- ages, they cater to a variety of dietary preferences and provide a glimpse into local culinary delights. Strategi- cally placed, these outlets ensure travelers have easy access to essential F&B options, providing a variety of options to suit different tastes and dietary needs. Grab & Go concepts can be tailored to showcase local specialties or themed assortments, adding a unique flair to the standard quick-service model. This approach not only meets the practical needs of trav- elers but also gives them a quick taste of the local culture or the thematic essence of the location. l a r t n e n i l r e B C Quick, quality, convenient – ideal for the traveler on the move. d i r b y H s t p e c n o C Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 52/336 P X M Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 53/336 d i r b y H s t p e c n o C P X M Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 52/336 Hudson, integrating with Italian favorite chocolate, Baci, to create a memora- ble hybrid experience in Milan’s Malpensa airport, alongside important tender wins in 2023, including our Spanish tender, showcas- ing our ability to blend retail appeal with F&B allure in a single, cohesive setting. Hybrid Concepts Now, under Avolta, we have the unique opportunity to pioneer the integration of retail and F&B as we define a new category: Hybrid Concepts. Beyond just co-locating products, they offer an enhanced, integrated cus- tomer experience and a value-add for our conces- sionaires and travelers alike. As demand grows, we’re proud of our successful Hybrid Concept launches, like the “Hudson Café Milano” which sees our very own convenience store, A seamless fusion of retail and food & beverage, defining a new category in travel. P X M Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 53/336 Hybrid Concepts Now, under Avolta, we have Hudson, integrating with the unique opportunity to Italian favorite chocolate, pioneer the integration of Baci, to create a memora- retail and F&B as we define ble hybrid experience in a new category: Hybrid Milan’s Malpensa airport, Concepts. alongside important tender wins in 2023, including our Beyond just co-locating Spanish tender, showcas- products, they offer an ing our ability to blend retail enhanced, integrated cus- appeal with F&B allure in tomer experience and a a single, cohesive setting. value-add for our conces- sionaires and travelers alike. As demand grows, we’re proud of our successful Hybrid Concept launches, like the “Hudson Café Milano” which sees our very own convenience store, A seamless fusion of retail and food & beverage, defining a new category in travel. P X M Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 54/336 Red By Dufry The company's customer retention program Red By Dufry is imple- mented in 51 countries across 316 locations. A complete overview and the respective information is available here: www.redbydufry.com My Autogrill My Autogrill is the loyalty program of Autogrill that includes a rewards catalog, discounts, and services dedicated to members. My Autogrill also has an app and is valid at Autogrill Italy and Nuova Sidap stores. myautogrill.it Mini Apps Along with the Mini-Apps currently in use at the Global Duty Free Plaza in Hainan for the Chinese customers, Avolta will de- velop similar applications going forward to support customers in other geog- raphies, offering them easy to use digital and on- line shopping experiences and customer engage- ment features. Reserve & Collect Reserve & Collect is available globally in 233 locations across 45 countries and can be accessed through the dedicated website: www.shop- dutyfree.com e n i l n O s e c i v r e S & s l e n n a h C Forum by Dufry Forum by Dufry can be visited at https://forum.shopdu- tyfree.com/en and con- nects brand partners and customers in an aspira- tional environment and gives access to all Avolta online services. Red By Dufry The company's customer retention program Red By Dufry is imple- mented in 51 countries across 316 locations. A complete overview and the respective information is available here: www.redbydufry.com My Autogrill My Autogrill is the loyalty program of Autogrill that includes a rewards catalog, discounts, and services dedicated to members. My Autogrill also has an app and is valid at Autogrill Italy and Nuova Sidap stores. myautogrill.it Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 55/336 Reserve & Collect Reserve & Collect is available globally in 233 locations across 45 countries and can be accessed through the dedicated website: www.shop- dutyfree.com e n i l n O i s e c v r e S l & s e n n a h C Mini Apps Along with the Mini-Apps currently in use at the Global Duty Free Plaza in Hainan for the Chinese customers, Avolta will de- velop similar applications going forward to support customers in other geog- raphies, offering them easy to use digital and on- line shopping experiences and customer engage- ment features. Forum by Dufry Forum by Dufry can be visited at https://forum.shopdu- tyfree.com/en and con- nects brand partners and customers in an aspira- tional environment and gives access to all Avolta online services. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 54/336 Online Channels & Services Red by Dufry The Group’s customer retention program Red By Dufry is imple- mented in 51 countries across 260 locations. A complete overview and the respective information is available here: www.redbydufry.com Avolta has been connect- ing its physical stores with digital applications and customer services for many years and continues to develop new digital touch- points to engage with cus- tomers along the whole travel journey. Starting from when a trip is planned, customers can reserve their most wanted products through Reserve & Collect and just collect their goods and pay at de- parture or arrival. Our highly digitalized stores, welcome travelers in different lan- guages during the day, which are aligned with the flight schedules to suit the respective nationalities, and clearly highlight the latest travel retail exclusives or novelties. Avolta customers benefit globally from attractive and unique airport-specific services through our Red By Dufry customer loyalty program. When approach- ing airports or other loca- tions where Avolta oper- ates shops, Red By Dufry identifies the customer and sends them the latest updates on the locally available promotions – an easy and convenient way to earn and redeem benefits globally in the Avolta shops or through our partners. Mini Apps Along with the Mini-Apps currently in use at the Global Duty Free Plaza in Hainan for the Chinese customers, Dufry will de- velop similar applications going forward to support customers in other geog- raphies, offering them easy to use digital and on- line shopping experiences and customer engage- ment features. Reserve & Collect Reserve & Collect is available globally in 223 locations across 45 countries and can be accessed through the dedicated website: www.shop- dutyfree.com Forum by Dufry is the com- pany’s own social media channel, where our brand partners can feature their novelties, special editions and stories related to their products, thus having direct access to their cus- tomers. My Autogrill Increased digital customer experience services and mini-Apps are in use in sev- eral operations in South East Asia and in selected operations in Hainan, where Avolta participates in the Global Duty Free Plaza Stores. They support local shopping behaviors and are integrated in popular Apps such as Alipay and My Autogrill is the loyalty WeChat. Functionality and program of Autogrill that services offered are in line includes a rewards catalog, with local duty-free sales discounts, and services regulations; e.g. the possi- dedicated to members. bility of home-delivery, thus My Autogrill also has an offering a comprehensive app and is valid at Autogrill shopping, payment and Italy and Nuova Sidap service experience for on- stores. line and offline use. myautogrill.it Forum by Dufry Forum by Dufry can be visited at https://forum.shopdu- tyfree.com/en and con- nects brand partners and customers in an aspira- tional environment and gives access to all Avolta online services. Red Online Channels & Services by Dufry Avolta has been connect- digital applications and ing its physical stores with pany’s own social media Forum by Dufry is the com- channel, where our brand customer services for many partners can feature their years and continues to novelties, special editions develop new digital touch- and stories related to their points to engage with cus- products, thus having tomers along the whole direct access to their cus- travel journey. tomers. Starting from when a trip is Increased digital customer planned, customers can experience services and reserve their most wanted mini-Apps are in use in sev- www.redbydufry.com products through Reserve eral operations in South & Collect and just collect East Asia and in selected The Group’s customer retention program Red By Dufry is imple- mented in 51 countries across 260 locations. A complete overview and the respective information is available here: My their goods and pay at de- operations in Hainan, where parture or arrival. Our highly Avolta participates in the digitalized stores, welcome travelers in different lan- guages during the day, Global Duty Free Plaza Autogrill Stores. They support local shopping behaviors and which are aligned with the are integrated in popular flight schedules to suit the Apps such as Alipay and respective nationalities, and clearly highlight the latest travel retail exclusives or novelties. Avolta customers benefit globally from attractive and unique airport-specific My Autogrill is the loyalty WeChat. Functionality and program of Autogrill that services offered are in line includes a rewards catalog, with local duty-free sales discounts, and services regulations; e.g. the possi- dedicated to members. bility of home-delivery, thus My Autogrill also has an offering a comprehensive app and is valid at Autogrill shopping, payment and Italy and Nuova Sidap service experience for on- services through our Red stores. line and offline use. By Dufry customer loyalty myautogrill.it program. When approach- ing airports or other loca- tions where Avolta oper- ates shops, Red By Dufry identifies the customer and sends them the latest updates on the locally available promotions – an easy and convenient way to earn and redeem benefits globally in the Avolta shops or through our partners. Mini Apps Along with the Mini-Apps currently in use at the Global Duty Free Plaza in Hainan for the Chinese customers, Dufry will de- velop similar applications going forward to support customers in other geog- raphies, offering them easy to use digital and on- line shopping experiences and customer engage- ment features. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 55/336 Reserve & Collect Reserve & Collect is available globally in 223 locations across 45 countries and can be accessed through the dedicated website: www.shop- dutyfree.com Forum by Dufry Forum by Dufry can be visited at https://forum.shopdu- tyfree.com/en and con- nects brand partners and customers in an aspira- tional environment and gives access to all Avolta online services. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 56/336 t s a E e d d M i l a c i r f A d n a , e p o r u E Strong business performance crowned by important lion travelers annually (2019). The company also won new Spain concession renewal travel retail and F&B concessions at several other airports including Helsinki Airport (Finland) and Hamad Interna- Europe, Middle East & Africa (EMEA), Avolta’s largest re- tional Airport (Doha; F&B joint venture with Qatar Airways). gion covering 35 countries, enjoyed continued healthy performance, thanks, in particular, to buoyant leisure de- A number of openings or significant upgrades and digital mand in the major holiday destinations in Southern innovations in several relevant locations were made across Europe, the Middle East and Africa, across both travel re- the region. These included, in particular, the openings of tail and F&B. In addition, the UK, the Nordics and Central the unique phygital Haute Perfumery concept in Zurich Europe benefitted from increased international inbound (Switzerland) and the Debonair Food Hall in Palermo’s travel – including the long-awaited returning travelers Falcone Borsellino International Airport (Italy). from Asia-Pacific. In 2023, EMEA CORE turnover reached CHF 6,265.4 mil- Next Generation store in the Stockholm Arlanda Airport lion versus proforma CHF 5,387.8 million in 2022 with pro- (Sweden), combining Swedish hospitality and a sense of Significant refurbishments included the opening of the forma organic growth up 20.0 % YoY. place with digital innovation, as well as those undertaken at the Glasgow and Manchester Airports (UK). Amongst EMEA won a number of new contracts and extended im- one of the first new hybrid concepts, the Hudson Café portant concessions. The highlight of the year was the re- with Baci, was opened at Milan Malpensa Airport (Italy). newal of the vast majority of Avolta’s Spanish airport oper- ations concession contracts for twelve years. The new In 2023, a total 1,514 m2 of retail space was opened, in contract encapsulates 21 airports with 120 outlets cover- countries such as Spain and Türkiye, and 17,949 m2 refur- ing around 60,000 m2 and serving approximately 132 mil- bished. Portion of turnover 2023 Global Distribution Centers Latin America Turnover (in millions of CHF) 6,265 51 % Europe, Middle East and Africa 6,265 5,388 Key reported data 2023 Number of outlets 2,329 Retail sales area in m² 212,323 Employees in FTE 26,107 6,000 5,000 4,000 3,000 2,000 1,000 0 1,724 1,145 * Proforma. ** CORE Turnover. North America Asia Pacific 20 21 22* 23** Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 57/336 Strong business performance crowned by important Spain concession renewal Europe, Middle East & Africa (EMEA), Avolta’s largest re- gion covering 35 countries, enjoyed continued healthy performance, thanks, in particular, to buoyant leisure de- mand in the major holiday destinations in Southern Europe, the Middle East and Africa, across both travel re- tail and F&B. In addition, the UK, the Nordics and Central Europe benefitted from increased international inbound travel – including the long-awaited returning travelers from Asia-Pacific. In 2023, EMEA CORE turnover reached CHF 6,265.4 mil- lion versus proforma CHF 5,387.8 million in 2022 with pro- forma organic growth up 20.0 % YoY. EMEA won a number of new contracts and extended im- portant concessions. The highlight of the year was the re- newal of the vast majority of Avolta’s Spanish airport oper- ations concession contracts for twelve years. The new contract encapsulates 21 airports with 120 outlets cover- ing around 60,000 m2 and serving approximately 132 mil- lion travelers annually (2019). The company also won new travel retail and F&B concessions at several other airports including Helsinki Airport (Finland) and Hamad Interna- tional Airport (Doha; F&B joint venture with Qatar Airways). A number of openings or significant upgrades and digital innovations in several relevant locations were made across the region. These included, in particular, the openings of the unique phygital Haute Perfumery concept in Zurich (Switzerland) and the Debonair Food Hall in Palermo’s Falcone Borsellino International Airport (Italy). Significant refurbishments included the opening of the Next Generation store in the Stockholm Arlanda Airport (Sweden), combining Swedish hospitality and a sense of place with digital innovation, as well as those undertaken at the Glasgow and Manchester Airports (UK). Amongst one of the first new hybrid concepts, the Hudson Café with Baci, was opened at Milan Malpensa Airport (Italy). In 2023, a total 1,514 m2 of retail space was opened, in countries such as Spain and Türkiye, and 17,949 m2 refur- bished. Portion of turnover 2023 Global Distribution Centers Latin America 51 % Europe, Middle East and Africa North America Turnover (in millions of CHF) 6,265 6,265 5,388 6,000 5,000 4,000 3,000 2,000 1,000 0 1,724 1,145 Key reported data 2023 Number of outlets 2,329 Retail sales area in m² 212,323 Employees in FTE 26,107 Asia Pacific 20 21 22* 23** * Proforma. ** CORE Turnover. t s a E , e p o r u E e l d d i M a c i r f A d n a Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 58/336 Europe, Middle East and Africa AUH FCO ZRH Rome – Fiumicino Airport Zurich – Zurich Air port With a quality offering that includes a fresh oyster bar, Sophia Loren The Gallery is a place to linger and dream while embarking on a journey restaurant offers travelers the flavors of authentic Italian cuisine. into the world of Asian cuisine. AMS EDI Abu Dhabi – Abu Dhabi Airport Shawa Lebanese Grill offers fresh authentic Lebanese street food in vibrant and rustic surroundings. Amsterdam – Schiphol Airport Edinburgh – Edinburgh Airport Bubbles Seafood & Wine Bar is a modern, sophisticated bar, offering With more than 300 different whiskies to choose from, the refurbished quality seafood, wine and other beverages to travelers. World of Whiskies space at Edinburgh Airport is a must visit. STN MXP ARN HEL London – London Stansted Airport Avolta inaugurated the mind.body.soul. concept at London Stansted in a shop-in-shop format. Milan – Milan Malpensa Airport Avolta hosts the world’s first permanent Prada Beauty airport counter, located in Terminal 1 of Malpensa Airport. Stockholm – Arlanda Airport Helsinki – Helsinki Air port With more than 2,500 m2 of walk-through space, Stockholm Duty-Free Located in the heart of the airport’s gate area, Avolta’s new Helsinki store doubles the size of Avolta’s previous store at Arlanda. is highly visible to passengers. Europe, Middle East and Africa AUH FCO ZRH Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 59/336 Rome – Fiumicino Airport With a quality offering that includes a fresh oyster bar, Sophia Loren restaurant offers travelers the flavors of authentic Italian cuisine. Zurich – Zurich Air port The Gallery is a place to linger and dream while embarking on a journey into the world of Asian cuisine. AMS EDI Abu Dhabi – Abu Dhabi Airport Shawa Lebanese Grill offers fresh authentic Lebanese street food in vibrant and rustic surroundings. Amsterdam – Schiphol Airport Bubbles Seafood & Wine Bar is a modern, sophisticated bar, offering quality seafood, wine and other beverages to travelers. Edinburgh – Edinburgh Airport With more than 300 different whiskies to choose from, the refurbished World of Whiskies space at Edinburgh Airport is a must visit. STN MXP ARN HEL London – London Stansted Airport Milan – Milan Malpensa Airport Avolta inaugurated the mind.body.soul. concept at London Stansted Avolta hosts the world’s first permanent Prada Beauty airport counter, in a shop-in-shop format. located in Terminal 1 of Malpensa Airport. Stockholm – Arlanda Airport With more than 2,500 m2 of walk-through space, Stockholm Duty-Free doubles the size of Avolta’s previous store at Arlanda. Helsinki – Helsinki Air port Located in the heart of the airport’s gate area, Avolta’s new Helsinki store is highly visible to passengers. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 60/336 c i f i c a P i a s A Significant acceleration against 2022 port’s Terminal 2 as master concessionaire for travel retail, F&B, convenience and entertainment, serving 27 million Avolta’s footprint in the Asia-Pacific (APAC) region has in- passengers annually (base 2019). Equally, we extended our creased considerably on the back of the business combi- footprint in the People’s Republic of China thanks to a new nation, executed in 2023. The company now has a pres- five-year contract for four duty-paid stores at Chongqing ence in 11 countries. The performance in APAC improved Jiangbei International Airport. significantly from the 2022 low base, driven by domestic and intra-regional traffic and thanks to a gradual recovery Elsewhere, newly opened or extended concessions within in inbound and outbound international travel. In total, re- the region included the seven-year extension of our F&B gional proforma organic growth totalled 84.4 % YoY. contract in Kuala Lumpur International Airport (Malaysia) In 2023, turnover reached CHF 557.8 million versus pro- tions at Bali’s Gusti Ngurah Rai International Airport (Indo- forma CHF 314.9 million in 2022. While Chinese outbound nesia). Avolta also opened new retail stores and F&B out- traffic was hampered by capacity constraints, other na- lets at Bangalore International Airport (India), where the tionalities’ propensity to travel domestically, intra-region, company has a fifteen-year joint venture to operate duty- and internationally, became increasingly evident. free shops. and the opening of additional travel retail and F&B opera- During 2023, Avolta secured some attractive new contracts In the year under review, Avolta opened a total of 3,835m2 and successfully extended important existing concessions and refurbished 3,636m2 of retail space across the APAC within the region. Of note is the joint venture agreement region. with Hubei Airport Group to operate the Wuhan Tianhe Air- Portion of turnover 2023 Turnover (in millions of CHF) Key reported data 2023 Global Distribution Centers Latin America Europe, Middle East and Africa Number of shops 334 Retail sales area in m² 21,826 Employees in FTE 5,804 558 315 558 600 500 400 300 200 100 0 160 99 * Proforma. ** CORE Turnover. North America 4 % Asia Pacific 20 21 22* 23** Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 61/336 Significant acceleration against 2022 Avolta’s footprint in the Asia-Pacific (APAC) region has in- creased considerably on the back of the business combi- nation, executed in 2023. The company now has a pres- ence in 11 countries. The performance in APAC improved significantly from the 2022 low base, driven by domestic and intra-regional traffic and thanks to a gradual recovery in inbound and outbound international travel. In total, re- gional proforma organic growth totalled 84.4 % YoY. In 2023, turnover reached CHF 557.8 million versus pro- forma CHF 314.9 million in 2022. While Chinese outbound traffic was hampered by capacity constraints, other na- tionalities’ propensity to travel domestically, intra-region, and internationally, became increasingly evident. During 2023, Avolta secured some attractive new contracts and successfully extended important existing concessions within the region. Of note is the joint venture agreement with Hubei Airport Group to operate the Wuhan Tianhe Air- port’s Terminal 2 as master concessionaire for travel retail, F&B, convenience and entertainment, serving 27 million passengers annually (base 2019). Equally, we extended our footprint in the People’s Republic of China thanks to a new five-year contract for four duty-paid stores at Chongqing Jiangbei International Airport. Elsewhere, newly opened or extended concessions within the region included the seven-year extension of our F&B contract in Kuala Lumpur International Airport (Malaysia) and the opening of additional travel retail and F&B opera- tions at Bali’s Gusti Ngurah Rai International Airport (Indo- nesia). Avolta also opened new retail stores and F&B out- lets at Bangalore International Airport (India), where the company has a fifteen-year joint venture to operate duty- free shops. In the year under review, Avolta opened a total of 3,835m2 and refurbished 3,636m2 of retail space across the APAC region. Portion of turnover 2023 Turnover (in millions of CHF) Key reported data 2023 Global Distribution Centers Latin America Europe, Middle East and Africa North America 558 558 315 160 99 600 500 400 300 200 100 0 Number of shops 334 Retail sales area in m² 21,826 Employees in FTE 5,804 4 % Asia Pacific 20 21 22* 23** * Proforma. ** CORE Turnover. c i f i c a i s A a P Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 62/336 Asia Pacific BLR DPS Bangalore – Kempegowda Int. Airport Duty-Free store in the departures area of the newly opened Terminal 2, boasting over 3,600 m2 of retail space across departures and arrivals. Bali – I Gusti Ngurah Rai Int. Airport A polished casual, full service restaurant and bar, Wolfgang Puck Kitchen + Bar offers distinctly unique F&B with attentive service. KUL SHA CKG CKG Malaysia – Kuala Lumpur Airport Catering to health-conscious travelers, FRESH serves healthy food and drinks, preparing them on the spot or for immediate takeaway. Shanghai – Shanghai Hongqiao Int. Airport This 54 m2 dedicated boutique is La Mer’s first standalone store in China’s Duty-Paid travel retail channel. Chongqing – Chongqing Jiangbei Int. Airport Chongqing – Chongqing Jiangbei Int. Airport Avolta inaugurated five standalone luxury beauty boutiques at Crystal Jade is a Singapore-based culinary brand with multiple Michelin Chongqing Jiangbei. Bib Gourmand awards regarded for its authentic Shanghainese cuisine. Asia Pacific BLR DPS Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 63/336 Bangalore – Kempegowda Int. Airport Duty-Free store in the departures area of the newly opened Terminal 2, boasting over 3,600 m2 of retail space across departures and arrivals. Bali – I Gusti Ngurah Rai Int. Airport A polished casual, full service restaurant and bar, Wolfgang Puck Kitchen + Bar offers distinctly unique F&B with attentive service. KUL SHA CKG CKG Malaysia – Kuala Lumpur Airport Shanghai – Shanghai Hongqiao Int. Airport Catering to health-conscious travelers, FRESH serves healthy food and This 54 m2 dedicated boutique is La Mer’s first standalone store in drinks, preparing them on the spot or for immediate takeaway. China’s Duty-Paid travel retail channel. Chongqing – Chongqing Jiangbei Int. Airport Avolta inaugurated five standalone luxury beauty boutiques at Chongqing Jiangbei. Chongqing – Chongqing Jiangbei Int. Airport Crystal Jade is a Singapore-based culinary brand with multiple Michelin Bib Gourmand awards regarded for its authentic Shanghainese cuisine. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 64/336 a c i r e m A h t r o N Robust growth underpinned by strong traffic trends our F&B, specialty retail and travel convenience portfolio and solid demand through a combination of digital innovation, brand part- nerships and reimagined stores. Furthermore, having Avolta’s new North America region was defined in the con- been awarded a twelve-year duty-free contract in Boston text of the business combination. The magnitude of the Logan International Airport’s International Terminal E business generated across the US and Canada, through modernized in early 2023, we have opened several duty- 113 locations, underlines the importance of these opera- free stores. New specialty retail stores were also opened tions for Avolta – a market that also features a motorway at John F. Kennedy International Airport in New York, while business potential. the company was awarded a new fifteen-year travel con- venience contract for Fresno Yosemite International Air- While in the US, both F&B and travel retail experienced ro- port (California). Avolta also opened new dining venues in bust growth, underpinned by strong traffic trends and Jacksonville International Airport, Fort Lauderdale-Holly- solid demand from both domestic and international trav- wood International Airport, Birmingham-Shuttlesworth In- elers, Canada benefitted from the progressive return of ternational Airport, Charlotte Douglas International Air- Asian travelers during this period. In 2023, turnover port, Hartsfield-Jackson Atlanta International Airport, Salt reached CHF 3,971.4 million versus proforma CHF 3,683.0 Lake City International Airport, San José Mineta Interna- million in 2022; representing proforma organic growth of tional Airport, Orlando International Airport and Chicago 14.3 % YoY. O’Hare International Airport (all USA). Avolta signed a contract extension at the Harry Reid Inter- Overall, Avolta opened a total of 5,498m2 of travel retail national Airport in Las Vegas (USA) through to 2038. We space and refurbished 6,775 m2 in its North America re- have already opened a number of stores and transformed gion. Portion of turnover 2023 Global Distribution Centers Latin America 32 % North America Europe, Middle East and Africa 3,971 3,683 Key reported data 2023 Number of shops 2,092 Retail sales area in m² 114,881 Employees in FTE 29,851 Turnover (in millions of CHF) 3,971 4,000 3,000 2,000 0 1,044 1,000 644 * Proforma. ** CORE Turnover. Asia Pacific 20 21 22* 23** Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 65/336 Robust growth underpinned by strong traffic trends and solid demand Avolta’s new North America region was defined in the con- text of the business combination. The magnitude of the business generated across the US and Canada, through 113 locations, underlines the importance of these opera- tions for Avolta – a market that also features a motorway business potential. While in the US, both F&B and travel retail experienced ro- bust growth, underpinned by strong traffic trends and solid demand from both domestic and international trav- elers, Canada benefitted from the progressive return of Asian travelers during this period. In 2023, turnover reached CHF 3,971.4 million versus proforma CHF 3,683.0 million in 2022; representing proforma organic growth of 14.3 % YoY. our F&B, specialty retail and travel convenience portfolio through a combination of digital innovation, brand part- nerships and reimagined stores. Furthermore, having been awarded a twelve-year duty-free contract in Boston Logan International Airport’s International Terminal E modernized in early 2023, we have opened several duty- free stores. New specialty retail stores were also opened at John F. Kennedy International Airport in New York, while the company was awarded a new fifteen-year travel con- venience contract for Fresno Yosemite International Air- port (California). Avolta also opened new dining venues in Jacksonville International Airport, Fort Lauderdale-Holly- wood International Airport, Birmingham-Shuttlesworth In- ternational Airport, Charlotte Douglas International Air- port, Hartsfield-Jackson Atlanta International Airport, Salt Lake City International Airport, San José Mineta Interna- tional Airport, Orlando International Airport and Chicago O’Hare International Airport (all USA). Avolta signed a contract extension at the Harry Reid Inter- national Airport in Las Vegas (USA) through to 2038. We have already opened a number of stores and transformed Overall, Avolta opened a total of 5,498m2 of travel retail space and refurbished 6,775 m2 in its North America re- gion. Portion of turnover 2023 Global Distribution Centers Latin America Europe, Middle East and Africa 32 % North America Asia Pacific Key reported data 2023 Number of shops 2,092 Retail sales area in m² 114,881 Employees in FTE 29,851 Turnover (in millions of CHF) 3,971 3,971 3,683 4,000 3,000 2,000 1,044 1,000 644 0 20 21 22* 23** * Proforma. ** CORE Turnover. a c i r e m A h t r o N Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 66/336 North America BOS EWR BHM Newark – Newark Liberty Int. Airport Birmingham – Birmingham-Shuttlesworth Int. Airport Boardwalk General Store is one of Avolta’s newest convenience stores Tacos Locos is a celebration of the bold flavors of Mexican cuisine in Newark. in the heart of BHM, offering chef-driven dishes and craft cocktails. BNA BNA Boston – Boston Logan Int. Airport The Connoisseur Collection is inspired by Boston’s rich heritage of whisky clubs and the vibrant history of the Rowes Wharf trading port. Nashville – Nashville Int. Airport Nashville – Nashville Int. Airport The Pharmacy Burger Parlor at BNA is an airport outpost of a popular Parnassus Books is the airport outpost of Nashville´s must visit local restaurant, offering travelers a delicious taste of Nashville. independent bookstore. MDW LAS CLT YUL Chicago – Chicago Midway Int. Airport The Atrium, a one-stop-shop for top global and local brands, diverse gift options and luxury items. Las Vegas – Harry Reid Int. Airport The Hudson Nonstop store, powered by Amazon’s Just Walk Out technology, is part of Avolta´s innovative retail transformation. Charlotte – Charlotte Douglas Int. Airport Montréal – Montréal-Pierre Elliot Trudeau Int. Airport Born in Chicago, Beatrix Market offers travelers an all-day bakery and A tribute to Montréal’s Griffintown neighborhood, Brasseur de Montréal coffee counter, along with quick, grab-and-go bites and snacks. restaurant features local craft beers, poutine and chef-inspired dishes. North America BOS EWR BHM Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 67/336 Newark – Newark Liberty Int. Airport Boardwalk General Store is one of Avolta’s newest convenience stores in Newark. Birmingham – Birmingham-Shuttlesworth Int. Airport Tacos Locos is a celebration of the bold flavors of Mexican cuisine in the heart of BHM, offering chef-driven dishes and craft cocktails. BNA BNA Boston – Boston Logan Int. Airport The Connoisseur Collection is inspired by Boston’s rich heritage of whisky clubs and the vibrant history of the Rowes Wharf trading port. Nashville – Nashville Int. Airport The Pharmacy Burger Parlor at BNA is an airport outpost of a popular local restaurant, offering travelers a delicious taste of Nashville. Nashville – Nashville Int. Airport Parnassus Books is the airport outpost of Nashville´s must visit independent bookstore. MDW LAS CLT YUL Chicago – Chicago Midway Int. Airport Las Vegas – Harry Reid Int. Airport The Atrium, a one-stop-shop for top global and local brands, diverse gift The Hudson Nonstop store, powered by Amazon’s Just Walk Out options and luxury items. technology, is part of Avolta´s innovative retail transformation. Charlotte – Charlotte Douglas Int. Airport Born in Chicago, Beatrix Market offers travelers an all-day bakery and coffee counter, along with quick, grab-and-go bites and snacks. Montréal – Montréal-Pierre Elliot Trudeau Int. Airport A tribute to Montréal’s Griffintown neighborhood, Brasseur de Montréal restaurant features local craft beers, poutine and chef-inspired dishes. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 68/336 a c i r e m A n i t a L Considerable recovery across the whole region signed a twenty-year contract to operate a duty-free store at the international bridge «General San Martin», the main The Latin America region (LATAM) experienced an impor- crossing point between Argentina and Uruguay. tant performance acceleration over the course of the year. Main drivers of this included increased demand in Argen- Finally, Avolta proudly announced the opening of a stun- tina, positively impacted by local currency developments, ning new luxury Swarovski boutique onboard the Norwe- as well as in Mexico and the Caribbean, thanks to strong gian Cruise Line (NCL) “Norwegian Escape” cruise ship. momentum in leisure travelers. Brazil continued to im- The 56 m² bespoke boutique is the first at sea and will of- prove as international traffic returned while demand also fer the full product range including jewelry, watches and rose across the cruise line channel, one of the traditional writing instruments. businesses in the Caribbean. In 2023, turnover reached CHF 1,653.7 million versus pro- tail space and refurbished 6,884 m2 in the LATAM region. In all, over 2023, Avolta opened a total 896 m2 of new re- forma CHF 1,310.5 million in 2022; with proforma organic growth up by a remarkable 32.5 % versus 2022. During 2023, successful concession wins or extensions in- cluded a ten-year contract for a newly opened duty-paid store at Vitória Airport (Brazil). Avolta also inaugurated a 1,586 m² main duty-free store at Sangster International Airport (SIA) in Montego Bay (Jamaica). Moreover, Avolta Portion of turnover 2023 Turnover (in millions of CHF) Key reported data 2023 Global Distribution Centers 13 % Latin America Europe, Middle East and Africa 1,654 Number of shops 400 1,654 1,311 Retail sales area in m² 128,436 699 497 Employees in FTE 5,991 2,000 1,500 1,000 500 0 North America Asia Pacific 20 21 22* 23** * Proforma. ** CORE Turnover. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 69/336 signed a twenty-year contract to operate a duty-free store at the international bridge «General San Martin», the main crossing point between Argentina and Uruguay. Finally, Avolta proudly announced the opening of a stun- ning new luxury Swarovski boutique onboard the Norwe- gian Cruise Line (NCL) “Norwegian Escape” cruise ship. The 56 m² bespoke boutique is the first at sea and will of- fer the full product range including jewelry, watches and writing instruments. In all, over 2023, Avolta opened a total 896 m2 of new re- tail space and refurbished 6,884 m2 in the LATAM region. Considerable recovery across the whole region The Latin America region (LATAM) experienced an impor- tant performance acceleration over the course of the year. Main drivers of this included increased demand in Argen- tina, positively impacted by local currency developments, as well as in Mexico and the Caribbean, thanks to strong momentum in leisure travelers. Brazil continued to im- prove as international traffic returned while demand also rose across the cruise line channel, one of the traditional businesses in the Caribbean. In 2023, turnover reached CHF 1,653.7 million versus pro- forma CHF 1,310.5 million in 2022; with proforma organic growth up by a remarkable 32.5 % versus 2022. During 2023, successful concession wins or extensions in- cluded a ten-year contract for a newly opened duty-paid store at Vitória Airport (Brazil). Avolta also inaugurated a 1,586 m² main duty-free store at Sangster International Airport (SIA) in Montego Bay (Jamaica). Moreover, Avolta Portion of turnover 2023 Turnover (in millions of CHF) Key reported data 2023 Global Distribution Centers 13 % Latin America Europe, Middle East and Africa North America 1,654 Number of shops 400 2,000 1,500 1,000 500 0 1,654 1,311 Retail sales area in m² 128,436 699 497 Employees in FTE 5,991 Asia Pacific 20 21 22* 23** * Proforma. ** CORE Turnover. a c i r e m A n i t a L Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 70/336 Latin America MEX REC Mexico City – Benito Juárez Int. Airport A striking tequila tasting area welcomes customers and invites them to sample the many exceptional tequila brands available. Recife – Recife Int. Airport Recife’s 268 m2 Dufry Shopping store is located airside and features a Hudson convenience shop-in-shop concept. MEX SDQ CNF SIA Mexico City – Benito Juárez Int. Airport The souvenir store in Terminal 2 embodies a robust sense of place, deeply intertwined with Mexican tradition and folklore. Dominican Republic – Las Américas Int. Airport Las Americas Collection store is a multi-brand concept offering an array of products including watches, jewelry, sunglasses, fashion and accessories. Belo Horizonte – Confins Int. Airport Montego Bay – Sangster Int. Airport The Dufry Shopping mega store in Belo Horizonte is one of Avolta’s Strong sense of place with “Rum Vibes” showcasing local spirits, largest stores of this duty-paid concept. including many Jamaican rums. Latin America MEX REC Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 71/336 Mexico City – Benito Juárez Int. Airport A striking tequila tasting area welcomes customers and invites them to sample the many exceptional tequila brands available. Recife – Recife Int. Airport Recife’s 268 m2 Dufry Shopping store is located airside and features a Hudson convenience shop-in-shop concept. MEX SDQ CNF SIA Mexico City – Benito Juárez Int. Airport Dominican Republic – Las Américas Int. Airport The souvenir store in Terminal 2 embodies a robust sense of place, Las Americas Collection store is a multi-brand concept offering deeply intertwined with Mexican tradition and folklore. an array of products including watches, jewelry, sunglasses, fashion Belo Horizonte – Confins Int. Airport The Dufry Shopping mega store in Belo Horizonte is one of Avolta’s largest stores of this duty-paid concept. Montego Bay – Sangster Int. Airport Strong sense of place with “Rum Vibes” showcasing local spirits, including many Jamaican rums. and accessories. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 72/336 Over 1,000 locations worldwide Europe, Middle East and Africa Armenia ● ● ● Gyumri ● ● ● Yerevan Austria ● ● ● Arnwiesen ● ● ● Feistritz ● ● ● Göttlesbrunn ● ● ● Hinterbrühl ● ● ● Innsbruck ● ● ● Lanschütz ● ● ● Lindach ● ● ● Linz ● ● ● Matrei ● ● ● Pandorf ● ● ● Salzburg ● ● ● Weer ● ● ● Wien ● ● ● Wien Westbahnhof ● ● ● Ybbs Belgium ● ● ● Aishe-en-Refail ● ● ● Antwerp ● ● ● Bruges ● ● ● Brussels ● ● ● Brussels Central ● ● ● Brussels Noord ● ● ● Froyennes ● ● ● Ghent ● ● ● Hasselt ● ● ● Mannekensvere ● ● ● Namur ● ● ● Ranst ● ● ● Ruisbroek ● ● ● Sprimont ● ● ● Thieu ● ● ● Verlaine ● ● ● Wanlin ● ● ● Zaventem Bulgaria ● ● ● Burgas ● ● ● Sofia● ● ● ● Varna Cape Verde ● ● ● Boa Vista ● ● ● Praia ● ● ● Sal Côte d’Ivoire ● ● ● Abidjan Denmark ● ● ● Copenhagen Egypt ● ● ● Cairo Finland ● ● ● Helsinki France ● ● ● Ambrussum ● ● ● Beaune ● ● ● Beziers Montblanc Nord ● ● ● Blois-Villerbon ● ● ● Brou ● ● ● Chartres - Gasvilel - Bois Paris ● ● ● Calais ● ● ● Cambarette Centre ● ● ● Cambarette Sud ● ● ● Canaver ● ● ● Carrousel du Louvre ● ● ● Centre France ● ● ● Chien Blanc - Lochères ● ● ● Corbières ● ● ● Corbières Nord ● ● ● Dijon - Brognon ● ● ● Disney Hotels ● ● ● Dracé Plus ● ● ● Eurotunnel France ● ● ● Fort-de-France ● ● ● Granier Chambéry ● ● ● Jardin des Arbres ● ● ● Jura ● ● ● L'Isle-d'Abeau ● ● ● L'Isle-d'Abeau Sud ● ● ● Lafayette ● ● ● Matoury ● ● ● Metz - St. Privat ● ● ● Miramas ● ● ● Montélimar Est ● ● ● Montélimar Ouest ● ● ● Morainvilliers ● ● ● Morainvilliers Nord ● ● ● Morières ● ● ● Nemours - Darvault ● ● ● Nice ● ● ● Perrogney - Noidant ● ● ● Plaines de Beauce ● ● ● Pointe-à-Pitre ● ● ● Porte de la Drôme ● ● ● Ressons Est ● ● ● Sommesous ● ● ● Taponas-Boitray ● ● ● The Village ● ● ● Toulouse ● ● ● Troyes ● ● ● Villeroy ● ● ● Volcans d'Auvergne ● ● ● Wancourt Est Germany ● ● ● Berlin ● ● ● Bochum ● ● ● Bonn ● ● ● Bremen ● ● ● Darmstadt ● ● ● Dessau ● ● ● Dresden ● ● ● Duisburg ● ● ● Düsseldorf ● ● ● Eisenach ● ● ● Erfurt ● ● ● Essen ● ● ● Frankfurt ● ● ● Fribourg ● ● ● Göttingen ● ● ● Halle ● ● ● Hamburg ● ● ● Hannover ● ● ● Heidelberg ● ● ● Jungfernstieg ● ● ● Karlsruhe ● ● ● Kiel ● ● ● Köln ● ● ● Leipzig ● ● ● Magdeburg ● ● ● Mainz ● ● ● Mannheim ● ● ● München ● ● ● Münster ● ● ● Neumünster ● ● ● Nurenburg ● ● ● Ohlsdorf ● ● ● Postdam ● ● ● Rosenheim ● ● ● Rostock ● ● ● Saarbrücken ● ● ● Siegburg ● ● ● Sternschanze ● ● ● Stuttgart ● ● ● Wiesbaden ● ● ● Wurzburg Ghana ● ● ● Accra Greece ● ● ● Akrata ● ● ● Alexandroupolis ● ● ● Athens ● ● ● Athens Leptokaria ● ● ● Chania ● ● ● Corfu ● ● ● Doirani ● ● ● Evzonoi ● ● ● Heraklion ● ● ● Igoumenista ● ● ● Ioannina ● ● ● Kakavia ● ● ● Kalamata ● ● ● Karpathos ● ● ● Kastanies ● ●● Kastellorizo ● ● ● Katakolo ● ● ● Kavala ● ● ● Kefalonia ● ● ● Kipoi ● ● ● Kos ● ● ● Krystallopigi ● ● ● Limnos ● ● ● Mertziani ● ● ● Mykonos ● ● ● Mytilene ● ● ● Nea Anchialos ● ● ● Niki ● ● ● Ormenio ● ● ● Patras ● ● ● Piraeus ● ● ● Preveza ● ● ● Promachonas ● ● ● Rhodes ● ● ● Sagiada ● ● ● Samos ● ● ● Santorini ● ● ● Skiathos ● ● ● Spathovouni ● ● ● Symi ● ● ● Thessaloniki ● ● ● Zakynthos Ireland ● ● ● Ballymahon Italy ● ● ● Aci Sant'Antonio Ovest ● ● ● Acquasparta ● ● ● Acquedoldi Sud ● ● ● Adda Sud ● ● ● Adige Brennero Est ● ● ● Adige Brennero Ovest ● ● ● Adige Est ● ● ● Adige Ovest Oil ● ● ● Affi ● ● ● Alento Est Oil ● ● ● Alfaterna Est ● ● ● Alfaterna Ovest ● ● ● Arda ● ● ● Arno Est ● ● ● Arrone Ovest Oil ● ● ● Assago Carrefour ● ● ● Assago Forum ● ● ● Assago Ovest ● ● ● Asti Est ● ● ● Aurelia Sud ● ● ● Autoparco Brescia Est ● ● ● Badia al Pino Est ● ● ● Badia al Pino Ovest ● ● ● Bagali Est ● ● ● Bari ● ● ● Baronissi Est ● ● ● Baronissi Ovest ● ● ● Bazzera Nord Oil ● ● ● Bazzera Sud ● ● ● Bentivoglio Ovest ● ● ● Bergamo ● ● ● Bettole di Novi Est ● ● ● Bettole di Novi Ovest ● ● ● Bevano Est ● ● ● Bevano Ovest ● ● ● Bologna ● ● ● Bolzano ● ● ● Bordighera Nord Oil ● ● ● Bordighera Sud ● ● ● Bormida Est Oil ● ● ● Braccagni ● ● ● Brembo ● ● ● Brembo Oil ● ● ● Brembo Sud Oil ● ● ● Brianza Nord ● ● ● Brianza Sud ● ● ● Brindisi ● ● ● Brughiera Est Oil ● ● ● Brughiera Ovest ● ● ● Brugnato Est ● ● ● Brugnato Ovest Oil ● ● ● Calaggio Nord Oil ● ● ● Calatabiano Ovest Oil ● ● ● Calstorta Nord ● ● ● Campagna Nord ● ● ● Campagna Ovest ● ● ● Campiglia Marittima ● ● ● Campiglia Marittima Ovest ● ● ● Campiolo Ovest ● ● ● Campora Est ● ● ● Cantagallo ● ● ● Cantagallo Est Oil ● ● ● Capalbio ● ● ● Cologno Monzese Est ● ● ● Mercato Saraceno ● ● ● Mercato Saraceno Est ● ● ● Rio Ghidone Ovest ● ● ● Caracoli Nord ● ● ● Carate Brianza Ovest ● ● ● Carcare Est ● ● ● Cascina ● ● ● Cascina Bar ● ● ● Casilina Est ● ● ● Casilina Esterna ● ● ● Casilina Ovest ● ● ● Castagnolo Ovest ● ● ● Castel Guelfo ● ● ● Castelbentivoglio Est ● ● ● Irpinia Sud ● ● ● Isola Rizza ● ● ● La Macchia Est ● ● ● La Macchia Est Oil ● ● ● La Macchia Ovest ● ● ● Laimburg Est ● ● ● Laimburg Ovest ● ● ● Lambro Sud ● ● ● Lambro Sud Oil ● ● ● Lario Est ● ● ● Lario Ovest ● ● ● Castelbentivoglio Ovest ● ● ● Latina Pontina ● ● ● Castelfranco ● ● ● Castellaro Nord Oil ● ● ● Lazise ● ● ● Ledra Est Oil ● ● ● Castelnuovo del Garda ● ● ● Limena ● ● ● Cecina Ovest ● ● ● Ceriale Nord ● ● ● Ceriale Sud ● ● ● Chianti ● ● ● Cigliano Nord Oil ● ● ● Cinisello Nord ● ● ● Civita Nord ● ● ● Civita Sud ● ● ● Civitanova Nord Oil ● ● ● Civitanova Sud ● ● ● Colle Tasso Sud ● ● ● Collesalvetti Sud ● ● ● Conero Est ● ● ● Conero Ovest ● ● ● Conioli Sud Oil ● ● ● Coppetella Est ● ● ● Cremona Nord ● ● ● Cremona Sud ● ● ● Crocetta Sud ● ● ● Dorno ● ● ● Dorno Oil ● ● ● Drove Est ● ● ● Drove Ovest ● ● ● Duino Sud ● ● ● Esino Ovest ● ● ● Esino Ovest Oil ● ● ● Fella Est Oil ● ● ● Feronia Est Oil ● ● ● Fine Est ● ● ● Flaminia Est ● ● ● Flaminia Ovest ● ● ● Florence ● ● ● Foglia Ovest ● ● ● Follonica ● ● ● Francavilla Fontana ● ● ● Frascati Est ● ● ● Frascineto Est ● ● ● Frascineto Ovest ● ● ● Gallarate ● ● ● Gargallo Ovest ● ● ● Genoa ● ● ● Ghedi Est ● ● ● Ghedi Est Oil ● ● ● Ghedi Ovest ● ● ● Giovi Est ● ● ● Giovi Ovest ● ● ● Giovinazzo Nord ● ● ● Giovinazzo Sud ● ● ● Golfo Aranci ● ● ● Gran Bosco Est Oil ● ● ● Grosseto Banditella ● ● ● Limenella Sud Oil ● ● ● Livorno ● ● ● Lucignano Ovest Oil ● ● ● Magra Est ● ● ● Magra Ovest ● ● ● Mantova ● ● ● Mascherone Est Oil ● ● ● Medesano Est ● ● ● Medesano Est Oil ● ● ● Medesano Ovest ● ● ● Melara Est ● ● ● Melfi ● ● ● Metauro Est ● ● ● Milan ● ● ● Milan Cadorna ● ● ● Milan Centrale ● ● ● Milan Famagosta ● ● ● Milan Garibaldi ● ● ● Milan Linate ● ● ● Milan Malpensa ● ● ● Milan Pertini Oil ● ● ● Modugno ● ● ● Molteno ● ● ● Monferrato Est Oil ● ● ● Monte Baldo Ovest ● ● ● Montealto Nord ● ● ● Montealto Sud ● ● ● Montefeltro Ovest ● ● ● Montepulciano Est ● ● ● Montepulciano Ovest ● ● ● Montequiesa Nord ● ● ● Montriggioni Est ● ● ● Montevarchi ● ● ● Montevelino Nord ● ● ● Naples ● ● ● Nettuno ● ● ● Nichelino Nord ● ● ● Nichelino Sud ● ● ● Nogaredo Est Oil ● ● ● Nogaredo Ovest ● ● ● Novate Milanese Nord ● ● ● Novate Nord ● ● ● Noventa di Piave ● ● ● Nure Nord ● ● ● Nure Sud ● ● ● Ofanto Nord ● ● ● Olbia Monti ● ● ● Olivarella Sud ● Orio al Serio ● ● ● Pieve S. Stefano Est ● ● ● Serravalle ● ● ● Pieve S. Stefano Ovest ● ● ● Serravalle Pistoiese ● ● ● Serravalle Pistoiese Nord ● ● ● Settimo Torinese Sud ● ● ● Paganella Ovest Oil ● ● ● Palermo ● ● ● Parma Colorno ● ● ● Paretola Sud ● ● ● Pero Nord ● ● ● Piani d'Ivrea Nord ● ● ● Piani d'Ivrea Sud ● ● ● Piceno Est ● ● ● Piombino Oil ● ● ● Pisa ● ● ● Pisa Uberti ● ● ● Po Brennero Est Oil ● ● ● Po Est ● ● ● Po Ovest ● ● ● Pomezia ● ● ● Pontedera Sud ● ● ● Pontevalleceppi ● ● ● Porto di Piombino ● ● ● Porto Torres ● ● ● Postumia Nord ● ● ● Postumia Sud ● ● ● Potenza ● ● ● Povegliano Ovest ● ● ● Prenestina Est ● ● ● Prenestina Ovest ● ● ● Rinovo Nord Oil ● ● ● Rio Vivo Est ● ● ● Ripa Sud ● ● ● Riviera Sud ● ● ● Rivoli Nord ● ● ● Rogliano Est ● ● ● Rogliano Ovest ● ● ● Rome ● ● ● Rosarno Ovest ● ● ● Rozzano Nord ● ● ● Rubicone Est ● ● ● Rubicone Ovest ● ● ● S. Liberato ● ● ● S. Teresa di Riva Est Oil ● ● ● S. Vincenzo ● ● ● Sacchitello Nord ● ● ● Sacchitello Sud ● ● ● Sala Consilina Est ● ● ● Sala Consilina Ovest ● ● ● Salerno Est ● ● ● Salerno S. Leonardo ● ● ● San Benedetto Ovest ● ● ● San Casciano Est Oil ● ● ● San Casciano Ovest Oil ● ● ● San Cristoforo Nord ● ● ● San Demetrio Ovest Oil ● ● ● San Giuliano Est ● ● ● San Giuliano Ovest ● ● ● San Lorenzo Ovest ● ● ● San Pelagio Ovest ● ● ● San Rocco ● ● ● San Zenone Ovest ● ● ● Santerno Est ● ● ● Scaligera ● ● ● Scaligera Sud ● ● ● Scarmagno Est ● ● ● Scarmagno Ovest Oil ● ● ● Sebino ● ● ● Sebino Sud ● ● ● Secchia Est ● ● ● Secchia Ovest ● ● ● Secchia Ovest Oil ● ● ● Selargius ● ● ● Seriate ● ● ● Serramendola Est ● ● ● Siena ● ● ● Sile Ovest Oil ● ● ● Sillaro Ovest ● ● ● Somaglia Est ● ● ● Somaglia Ovest ● ● ● Spello ● ● ● Spoleto Oil ● ● ● Stradella Nord ● ● ● Stradella Sud ● ● ● Stura Est ● ● ● Stura Ovest ● ● ● Teano Est ● ● ● Terni Nord ● ● ● Terni Sud ● ● ● Tesina Sud ● ● ● Tesina Sud Oil ● ● ● Tevere Ovest ● ● ● Tiburtina Sud Oil ● ● ● Tindari Sud ● ● ● Tirreno Est ● ● ● Todi ● ● ● Tolentino ● ● ● Termini Imerese Sud ● ● ● Tor Bell Monaca ● ● ● Torre Annunziata Ovest ● ● ● Torre Cerrano Est ● ● ● Tortona Nord ● ● ● Tortona Sud ● ● ● Tortoreto Ovest ● ● ● Tramatza Est ● ● ● Tramatza Ovest ● ● ● Trebbia Nord ● ● ● Tremestieri Ovest ● ● ● Turchino Est ● ● ● Turin ● ● ● Val di Sona Est ● ● ● Valle Aterno Ovest Oil ● ● ● Valleggia ● ● ● Valtrompia Nord ● ● ● Valtrompia Sud ● ● ● Verbano Est ● ● ● Verbano Ovest ● ● ● Vercelli ● ● ● Venezia Mestra ● ● ● Venezia S.Lucia ● ● ● Verghereto ● ● ● Verona ● ● ● Verona Tagenziale ● ● ● Versilia Ovest ● ● ● Vicolungo ● ● ● Villa Morosini Ovest ● ● ● Villabona Nord Rotatoria ● ● ● Villabona Sud ● ● ● Villanova Sud ● ● ● Saint Vincent Ovest Oil ● ● ● Trieste ● ● ● Padova Australia Oil ● ● ● Scillato Sud Over 1,000 locations worldwide Europe, Middle East and Africa Armenia ● ● ● Gyumri ● ● ● Yerevan Austria ● ● ● Arnwiesen ● ● ● Feistritz ● ● ● Göttlesbrunn ● ● ● Hinterbrühl ● ● ● Innsbruck ● ● ● Lanschütz ● ● ● Lindach ● ● ● Linz ● ● ● Matrei ● ● ● Pandorf ● ● ● Salzburg ● ● ● Weer ● ● ● Wien ● ● ● Wien Westbahnhof ● ● ● Ybbs Belgium ● ● ● Aishe-en-Refail ● ● ● Antwerp ● ● ● Bruges ● ● ● Brussels ● ● ● Brussels Central ● ● ● Brussels Noord ● ● ● Froyennes ● ● ● Ghent ● ● ● Hasselt ● ● ● Mannekensvere ● ● ● Namur ● ● ● Ranst ● ● ● Ruisbroek ● ● ● Sprimont ● ● ● Thieu ● ● ● Verlaine ● ● ● Wanlin ● ● ● Zaventem Bulgaria ● ● ● Burgas ● ● ● Sofia● ● ● ● Varna Cape Verde ● ● ● Boa Vista ● ● ● Praia ● ● ● Sal Côte d’Ivoire ● ● ● Abidjan Denmark ● ● ● Copenhagen Egypt ● ● ● Cairo Finland ● ● ● Helsinki France ● ● ● Ambrussum ● ● ● Beaune ● ● ● Chartres - Gasvilel - Bois Paris ● ● ● Calais ● ● ● Cambarette Centre ● ● ● Cambarette Sud ● ● ● Canaver ● ● ● Carrousel du Louvre ● ● ● Centre France ● ● ● Chien Blanc - Lochères ● ● ● Corbières ● ● ● Corbières Nord ● ● ● Dijon - Brognon ● ● ● Disney Hotels ● ● ● Dracé Plus ● ● ● Eurotunnel France ● ● ● Fort-de-France ● ● ● Granier Chambéry ● ● ● Jardin des Arbres ● ● ● Jura ● ● ● L'Isle-d'Abeau ● ● ● L'Isle-d'Abeau Sud ● ● ● Lafayette ● ● ● Matoury ● ● ● Metz - St. Privat ● ● ● Miramas ● ● ● Montélimar Est ● ● ● Montélimar Ouest ● ● ● Morainvilliers ● ● ● Morainvilliers Nord ● ● ● Morières ● ● ● Nemours - Darvault ● ● ● Nice ● ● ● Perrogney - Noidant ● ● ● Plaines de Beauce ● ● ● Pointe-à-Pitre ● ● ● Porte de la Drôme ● ● ● Ressons Est ● ● ● Sommesous ● ● ● Taponas-Boitray ● ● ● The Village ● ● ● Toulouse ● ● ● Troyes ● ● ● Villeroy ● ● ● Volcans d'Auvergne ● ● ● Wancourt Est Germany ● ● ● Berlin ● ● ● Bochum ● ● ● Bonn ● ● ● Bremen ● ● ● Darmstadt ● ● ● Dessau ● ● ● Dresden ● ● ● Duisburg ● ● ● Düsseldorf ● ● ● Eisenach ● ● ● Erfurt ● ● ● Essen ● ● ● Frankfurt ● ● ● Fribourg ● ● ● Göttingen ● ● ● Halle ● ● ● Hamburg ● ● ● Hannover ● ● ● Heidelberg ● ● ● Alexandroupolis ● ● ● Athens ● ● ● Athens Leptokaria ● ● ● Kiel ● ● ● Köln ● ● ● Leipzig ● ● ● Magdeburg ● ● ● Mainz ● ● ● Mannheim ● ● ● München ● ● ● Münster ● ● ● Neumünster ● ● ● Nurenburg ● ● ● Ohlsdorf ● ● ● Postdam ● ● ● Rosenheim ● ● ● Rostock ● ● ● Saarbrücken ● ● ● Siegburg ● ● ● Sternschanze ● ● ● Stuttgart ● ● ● Wiesbaden ● ● ● Wurzburg Ghana ● ● ● Accra Greece ● ● ● Akrata ● ● ● Chania ● ● ● Corfu ● ● ● Doirani ● ● ● Evzonoi ● ● ● Heraklion ● ● ● Igoumenista ● ● ● Ioannina ● ● ● Kakavia ● ● ● Kalamata ● ● ● Karpathos ● ● ● Kastanies ● ●● Kastellorizo ● ● ● Katakolo ● ● ● Kavala ● ● ● Kefalonia ● ● ● Kipoi ● ● ● Kos ● ● ● Krystallopigi ● ● ● Limnos ● ● ● Mertziani ● ● ● Mykonos ● ● ● Mytilene ● ● ● Nea Anchialos ● ● ● Niki ● ● ● Ormenio ● ● ● Patras ● ● ● Piraeus ● ● ● Preveza ● ● ● Rhodes ● ● ● Sagiada ● ● ● Samos ● ● ● Santorini ● ● ● Skiathos ● ● ● Promachonas ● ● ● Spathovouni ● ● ● Symi ● ● ● Thessaloniki ● ● ● Zakynthos ● ● ● Beziers Montblanc Nord ● ● ● Blois-Villerbon ● ● ● Brou ● ● ● Jungfernstieg ● ● ● Karlsruhe ● ● ● Ballymahon Ireland Italy ● ● ● Aci Sant'Antonio Ovest ● ● ● Acquasparta ● ● ● Acquedoldi Sud ● ● ● Adda Sud ● ● ● Adige Brennero Est ● ● ● Adige Brennero Ovest ● ● ● Adige Est ● ● ● Adige Ovest Oil ● ● ● Affi ● ● ● Alento Est Oil ● ● ● Alfaterna Est ● ● ● Alfaterna Ovest ● ● ● Arda ● ● ● Arno Est ● ● ● Arrone Ovest Oil ● ● ● Assago Carrefour ● ● ● Assago Forum ● ● ● Assago Ovest ● ● ● Asti Est ● ● ● Aurelia Sud ● ● ● Autoparco Brescia Est ● ● ● Badia al Pino Est ● ● ● Badia al Pino Ovest ● ● ● Bagali Est ● ● ● Bari ● ● ● Baronissi Est ● ● ● Baronissi Ovest ● ● ● Bazzera Nord Oil ● ● ● Bazzera Sud ● ● ● Bentivoglio Ovest ● ● ● Bergamo ● ● ● Bettole di Novi Est ● ● ● Bettole di Novi Ovest ● ● ● Bevano Est ● ● ● Bevano Ovest ● ● ● Bologna ● ● ● Bolzano ● ● ● Bordighera Nord Oil ● ● ● Bordighera Sud ● ● ● Bormida Est Oil ● ● ● Braccagni ● ● ● Brembo ● ● ● Brembo Oil ● ● ● Brembo Sud Oil ● ● ● Brianza Nord ● ● ● Brianza Sud ● ● ● Brindisi ● ● ● Brughiera Est Oil ● ● ● Brughiera Ovest ● ● ● Brugnato Est ● ● ● Brugnato Ovest Oil ● ● ● Calaggio Nord Oil ● ● ● Calatabiano Ovest Oil ● ● ● Calstorta Nord ● ● ● Campagna Nord ● ● ● Campagna Ovest ● ● ● Campiglia Marittima ● ● ● Campiglia Marittima Ovest ● ● ● Campiolo Ovest ● ● ● Campora Est ● ● ● Cantagallo ● ● ● Cantagallo Est Oil ● ● ● Capalbio Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 73/336 ● ● ● Caracoli Nord ● ● ● Carate Brianza Ovest ● ● ● Carcare Est ● ● ● Cascina ● ● ● Cascina Bar ● ● ● Casilina Est ● ● ● Casilina Esterna ● ● ● Casilina Ovest ● ● ● Castagnolo Ovest ● ● ● Castel Guelfo ● ● ● Castelbentivoglio Est ● ● ● Castelbentivoglio Ovest ● ● ● Castelfranco ● ● ● Castellaro Nord Oil ● ● ● Castelnuovo del Garda ● ● ● Cecina Ovest ● ● ● Ceriale Nord ● ● ● Ceriale Sud ● ● ● Chianti ● ● ● Cigliano Nord Oil ● ● ● Cinisello Nord ● ● ● Civita Nord ● ● ● Civita Sud ● ● ● Civitanova Nord Oil ● ● ● Civitanova Sud ● ● ● Colle Tasso Sud ● ● ● Collesalvetti Sud ● ● ● Cologno Monzese Est ● ● ● Conero Est ● ● ● Conero Ovest ● ● ● Conioli Sud Oil ● ● ● Coppetella Est ● ● ● Cremona Nord ● ● ● Cremona Sud ● ● ● Crocetta Sud ● ● ● Dorno ● ● ● Dorno Oil ● ● ● Drove Est ● ● ● Drove Ovest ● ● ● Duino Sud ● ● ● Esino Ovest ● ● ● Esino Ovest Oil ● ● ● Fella Est Oil ● ● ● Feronia Est Oil ● ● ● Fine Est ● ● ● Flaminia Est ● ● ● Flaminia Ovest ● ● ● Florence ● ● ● Foglia Ovest ● ● ● Follonica ● ● ● Francavilla Fontana ● ● ● Frascati Est ● ● ● Frascineto Est ● ● ● Frascineto Ovest ● ● ● Gallarate ● ● ● Gargallo Ovest ● ● ● Genoa ● ● ● Ghedi Est ● ● ● Ghedi Est Oil ● ● ● Ghedi Ovest ● ● ● Giovi Est ● ● ● Giovi Ovest ● ● ● Giovinazzo Nord ● ● ● Giovinazzo Sud ● ● ● Golfo Aranci ● ● ● Gran Bosco Est Oil ● ● ● Grosseto Banditella ● ● ● Irpinia Sud ● ● ● Isola Rizza ● ● ● La Macchia Est ● ● ● La Macchia Est Oil ● ● ● La Macchia Ovest ● ● ● Laimburg Est ● ● ● Laimburg Ovest ● ● ● Lambro Sud ● ● ● Lambro Sud Oil ● ● ● Lario Est ● ● ● Lario Ovest ● ● ● Latina Pontina ● ● ● Lazise ● ● ● Ledra Est Oil ● ● ● Limena ● ● ● Limenella Sud Oil ● ● ● Livorno ● ● ● Lucignano Ovest Oil ● ● ● Magra Est ● ● ● Magra Ovest ● ● ● Mantova ● ● ● Mascherone Est Oil ● ● ● Medesano Est ● ● ● Medesano Est Oil ● ● ● Medesano Ovest ● ● ● Melara Est ● ● ● Melfi ● ● ● Mercato Saraceno ● ● ● Mercato Saraceno Est ● ● ● Metauro Est ● ● ● Milan ● ● ● Milan Cadorna ● ● ● Milan Centrale ● ● ● Milan Famagosta ● ● ● Milan Garibaldi ● ● ● Milan Linate ● ● ● Milan Malpensa ● ● ● Milan Pertini Oil ● ● ● Modugno ● ● ● Molteno ● ● ● Monferrato Est Oil ● ● ● Monte Baldo Ovest ● ● ● Montealto Nord ● ● ● Montealto Sud ● ● ● Montefeltro Ovest ● ● ● Montepulciano Est ● ● ● Montepulciano Ovest ● ● ● Montequiesa Nord ● ● ● Montriggioni Est ● ● ● Montevarchi ● ● ● Montevelino Nord ● ● ● Naples ● ● ● Nettuno ● ● ● Nichelino Nord ● ● ● Nichelino Sud ● ● ● Nogaredo Est Oil ● ● ● Nogaredo Ovest ● ● ● Novate Milanese Nord ● ● ● Novate Nord ● ● ● Noventa di Piave ● ● ● Nure Nord ● ● ● Nure Sud ● ● ● Ofanto Nord ● ● ● Olbia Monti ● ● ● Olivarella Sud ● Orio al Serio ● ● ● Padova Australia Oil ● ● ● Paganella Ovest Oil ● ● ● Palermo ● ● ● Parma Colorno ● ● ● Paretola Sud ● ● ● Pero Nord ● ● ● Piani d'Ivrea Nord ● ● ● Piani d'Ivrea Sud ● ● ● Piceno Est ● ● ● Pieve S. Stefano Est ● ● ● Pieve S. Stefano Ovest ● ● ● Piombino Oil ● ● ● Pisa ● ● ● Pisa Uberti ● ● ● Po Brennero Est Oil ● ● ● Po Est ● ● ● Po Ovest ● ● ● Pomezia ● ● ● Pontedera Sud ● ● ● Pontevalleceppi ● ● ● Porto di Piombino ● ● ● Porto Torres ● ● ● Postumia Nord ● ● ● Postumia Sud ● ● ● Potenza ● ● ● Povegliano Ovest ● ● ● Prenestina Est ● ● ● Prenestina Ovest ● ● ● Rinovo Nord Oil ● ● ● Rio Ghidone Ovest ● ● ● Rio Vivo Est ● ● ● Ripa Sud ● ● ● Riviera Sud ● ● ● Rivoli Nord ● ● ● Rogliano Est ● ● ● Rogliano Ovest ● ● ● Rome ● ● ● Rosarno Ovest ● ● ● Rozzano Nord ● ● ● Rubicone Est ● ● ● Rubicone Ovest ● ● ● S. Liberato ● ● ● S. Teresa di Riva Est Oil ● ● ● S. Vincenzo ● ● ● Sacchitello Nord ● ● ● Sacchitello Sud ● ● ● Saint Vincent Ovest Oil ● ● ● Sala Consilina Est ● ● ● Sala Consilina Ovest ● ● ● Salerno Est ● ● ● Salerno S. Leonardo ● ● ● San Benedetto Ovest ● ● ● San Casciano Est Oil ● ● ● San Casciano Ovest Oil ● ● ● San Cristoforo Nord ● ● ● San Demetrio Ovest Oil ● ● ● San Giuliano Est ● ● ● San Giuliano Ovest ● ● ● San Lorenzo Ovest ● ● ● San Pelagio Ovest ● ● ● San Rocco ● ● ● San Zenone Ovest ● ● ● Santerno Est ● ● ● Scaligera ● ● ● Scaligera Sud ● ● ● Scarmagno Est ● ● ● Scarmagno Ovest Oil ● ● ● Scillato Sud ● ● ● Sebino ● ● ● Sebino Sud ● ● ● Secchia Est ● ● ● Secchia Ovest ● ● ● Secchia Ovest Oil ● ● ● Selargius ● ● ● Seriate ● ● ● Serramendola Est ● ● ● Serravalle ● ● ● Serravalle Pistoiese ● ● ● Serravalle Pistoiese Nord ● ● ● Settimo Torinese Sud ● ● ● Siena ● ● ● Sile Ovest Oil ● ● ● Sillaro Ovest ● ● ● Somaglia Est ● ● ● Somaglia Ovest ● ● ● Spello ● ● ● Spoleto Oil ● ● ● Stradella Nord ● ● ● Stradella Sud ● ● ● Stura Est ● ● ● Stura Ovest ● ● ● Teano Est ● ● ● Termini Imerese Sud ● ● ● Terni Nord ● ● ● Terni Sud ● ● ● Tesina Sud ● ● ● Tesina Sud Oil ● ● ● Tevere Ovest ● ● ● Tiburtina Sud Oil ● ● ● Tindari Sud ● ● ● Tirreno Est ● ● ● Todi ● ● ● Tolentino ● ● ● Tor Bell Monaca ● ● ● Torre Annunziata Ovest ● ● ● Torre Cerrano Est ● ● ● Tortona Nord ● ● ● Tortona Sud ● ● ● Tortoreto Ovest ● ● ● Tramatza Est ● ● ● Tramatza Ovest ● ● ● Trebbia Nord ● ● ● Tremestieri Ovest ● ● ● Trieste ● ● ● Turchino Est ● ● ● Turin ● ● ● Val di Sona Est ● ● ● Valle Aterno Ovest Oil ● ● ● Valleggia ● ● ● Valtrompia Nord ● ● ● Valtrompia Sud ● ● ● Verbano Est ● ● ● Verbano Ovest ● ● ● Vercelli ● ● ● Venezia Mestra ● ● ● Venezia S.Lucia ● ● ● Verghereto ● ● ● Verona ● ● ● Verona Tagenziale ● ● ● Versilia Ovest ● ● ● Vicolungo ● ● ● Villa Morosini Ovest ● ● ● Villabona Nord Rotatoria ● ● ● Villabona Sud ● ● ● Villanova Sud Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 74/336 ● ● ● Villarboit Nord ● ● ● Villoresi Est ● ● ● Villoresi Est Oil ● ● ● Villoresi Ovest ● ● ● Viverone Nord ● ● ● Viverone Sud ● ● ● Vomano Est ● ● ● Zevio Jordan ● ● ● Amman Marka ● ● ● Amman Queen Alia ● ● ● Aqaba Kazakhstan ● ● ● Astana Kenya ● ● ● Nairobi Kuwait ● ● ● Kuwait City Malta ● ● ● Luqa Morocco ● ● ● Agadir ● ● ● Casablanca ● ● ● Fes ● ● ● Marrakech ● ● ● Nador ● ● ● Oujda ● ● ● Rabat ● ● ● Tanger The Netherlands ● ● ● Alkmaar ● ● ● Amersfoort ● ● ● Amsterdam ● ● ● Amsterdam Amstel ● ● ● Amsterdam Bijlmer Arena ● ● ● Amsterdam Centraal ● ● ● Arnhem ● ● ● Backwerk ● ● ● Broodzaak ● ● ● Den Bosch ● ● ● Den Haag ● ● ● Eindhoven ● ● ● Enschede ● ● ● Groningen ● ● ● Haarlem ● ● ● Hoorn ● ● ● Lelystad ● ● ● Roermond ● ● ● Rotterdam ● ● ● Stadskamer ● ● ● Sugar City ● ● ● Utrecht Nigeria ● ● ● Abuja ● ● ● Lagos Norway ● ● ● Oslo ● ● ● Stavanger Qatar ● ● ● Hamad Russia ● ● ● Moscow Domodedovo ● ● ● Moscow Mineralnye Vody ● ● ● Moscow Sheremetyevo ● ● ● Moscow Vnukovo ● ● ● Rostov ● ● ● St. Petersburg Pulkovo Ukraine ● ● ● Odessa United Arab Emirates Serbia ● ● ● Belgrade ● ● ● Kraljevo ● ● ● Nis Slovenia ● ● ● Lukovica ● ● ● Mokrice ● ● ● Sempas Spain ● ● ● Alicante ● ● ● Almeria ● ● ● Barcelona ● ● ● Fuerteventura ● ● ● Girona ● ● ● Gran Canaria ● ● ● Granada ● ● ● Ibiza ● ● ● Jerez ● ● ● La Palma (SPC) ● ● ● Lanzarote ● ● ● Madrid ● ● ● Malaga ● ● ● Menorca ● ● ● Murcia Corvera ● ● ● Palma de Mallorca (PMI) ● ● ● Reus ● ● ● Sevilla ● ● ● Tenerife Norte ● ● ● Tenerife Sur ● ● ● Valencia Sweden ● ● ● Gothenburg ● ● ● Kalmar ● ● ● Karlstad ● ● ● Luleå ● ● ● Malmö ● ● ● Östersund ● ● ● Stockholm Arlanda ● ● ● Sundsvall ● ● ● Umeå ● ● ● Visby Switzerland ● ● ● Basel ● ● ● Basel-Mulhouse ● ● ● Bavois ● ● ● Cornavin ● ● ● Forrenberg ● ● ● Fribourg ● ● ● Genève ● ● ● Gruyère ● ● ● Lavaux ● ● ● Lully ● ● ● Münsingen ● ● ● Olten ● ● ● Pieterlen ● ● ● Pratteln ● ● ● St. Margarethen ● ● ● Zurich Türkiye ● ● ● Antalya ● ● ● Istanbul ● ● ● Kayseri ● ● ● Kutahya ● ● ● Abu Dhabi ● ● ● Dubai ● ● ● Sharjah United Kingdom ● ● ● Aberdeen ● ● ● Ashford ● ● ● Bedfordshire ● ● ● Belfast ● ● ● Birmingham ● ● ● Bournemouth ● ● ● Bristol ● ● ● Cardiff ● ● ● Cheshire Oaks ● ● ● Cumbria ● ● ● East Midlands ● ● ● Edinburgh ● ● ● Exeter ● ● ● Eurotunnel ● ● ● Euston ● ● ● Glasgow ● ● ● Humberside ● ● ● Inverness ● ● ● Jersey ● ● ● Leeds ● ● ● Liverpool ● ● ● London King's Cross ● ● ● London Gatwick ● ● ● London Heathrow ● ● ● London Luton ● ● ● London Stansted ● ● ● London St. Pancras ● ● ● Manchester ● ● ● Newcastle ● ● ● Norwich ● ● ● Nottinghamshire ● ● ● Prestwick ● ● ● Southampton ● ● ● Southend ● ● ● Suffolk ● ● ● Teesside ● ● ● Wiltshire ● ● ● Windsor Cruise and Ferry ships ● ● ● Ariadne ● ● ● Asterion ● ● ● Blue Star I, II ● ● ● Blue Star Delos ● ● ● Blue Star Diagoras ● ● ● Blue Star Naxos ● ● ● Blue Star Paros ● ● ● El. Venezielos ● ● ● Elyros ● ● ● Hellenic Spirit ● ● ● Highspeed 4 ● Kissamos ● Kriti Ship (Kriti I, II) ● Lefka Ori ● ● ● Nisos Chios ● ● ● Nisos Mykonos ● ● ● Nisos Rhodes ● ● ● Nisos Samos ● ● ● Patmos ● ● ● P&O European Causeway ● ● ● P&O European Highlander ● ● ● P&O Norbank ● ● ● P&O Pride of Hull ● ● ● P&O Pride of Rotterdam ● ● ● P&O Spirit of Britain ● ● ● P&O Spirit of France ● ● ● P&O The Pioneer ● ● ● Prevelis ● ● ● Superfast I ● ● ● Superfast II ● Superfast III ● ● ● Superfast XI Asia Pacific Australia ● ● ● Cairns ● ● ● Canberra ● ● ● Gold Coast ● ● ● Perth Cambodia ● ● ● Phnom Penh ● ● ● Sihanoukville China ● ● ● Beijing ● ● ● Chongqing ● ● ● Hong Kong ● ● ● Macau ● ● ● Shanghai Hongqiao ● ● ● Shanghai Pudong ● ● ● Xiamen India ● ● ● Bangalore ● ● ● Delhi ● ● ● Hyderabad ● ● ● Prestige Shopping Mall ● ● ● Secunderabad ● ● ● Sujana Mall Indonesia ● ● ● Bali ● ● ● Jakarta Malaysia ● ● ● Kuala Lumpur ● ● ● Langkawi Maldives ● ● ● Maldives New Zealand ● ● ● Christchurch 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● ● Santo Domingo Punta Cana Ecuador ● ● ● Santiago de Guayaquil Grenada ● ● ● St. Georges's Honduras ● ● ● Roatan Jamaica ● ● ● Falmouth ● ● ● Montego Bay Mexico ● ● ● Acapulco ● ● ● Cancun ● ● ● Cozumel ● ● ● Guadalajara ● ● ● Leon ● ● ● Mazatlan ● ● ● Mexico City ● ● ● Mexico State ● ● ● Monterrey ● ● ● Puerto Vallarta ● ● ● San José del Cabo ● ● ● Zihuatanejo Puerto Rico ● ● ● Ponce ● ● ● San Juan St Kitts & Nevis ● ● ● Basseterre St Lucia ● ● ● Castries St Maarten ● ● ● Philipsburg Trinidad & Tobago ● ● ● Port of Spain Turks & Caicos Islands ● ● ● Cockburn Town ● ● ● Providenciales Uruguay ● ● ● Montevideo ● ● ● Punta del Este Cruise and Ferry ships ● ● ● Carnival Panorama ● ● ● Carnival Valor ● ● ● NCL Bliss ● ● ● NCL Breakaway ● ● ● NCL Dawn ● ● ● NCL Escape ● ● ● NCL Epic ● ● ● NCL Gem ● ● ● NCL Getaway ● ● ● NCL Jade ● ● ● NCL Jewel ● ● ● NCL Joy ● ● ● NCL Pearl ● ● ● NCL Sky ● ● ● NCL Spirit ● ● ● NCL Sun Channels Airports Border, Downtown & Hotel Shops Railway Stations & Other Cruise Liners & Ferries Seaports Motorways ● ● ● Moscow Vnukovo ● ● ● Rostov ● ● ● St. Petersburg Pulkovo Ukraine ● ● ● Odessa ● ● ● Abu Dhabi ● ● ● Dubai ● ● ● Sharjah United Arab Emirates United Kingdom ● ● ● P&O European Highlander ● ● ● P&O Norbank ● ● ● P&O Pride of Hull ● ● ● P&O Pride of Rotterdam ● ● ● P&O Spirit of Britain ● ● ● P&O Spirit of France ● ● ● P&O The Pioneer ● ● ● Villarboit Nord ● ● ● Villoresi Est ● ● ● Villoresi Est Oil ● ● ● Villoresi Ovest ● ● ● Viverone Nord ● ● ● Viverone Sud ● ● ● Vomano Est ● ● ● Zevio Jordan ● ● ● Amman Marka ● ● ● Amman Queen Alia ● ● ● Aqaba Kazakhstan ● ● ● Astana Kenya ● ● ● Nairobi Kuwait ● ● ● Kuwait City Malta ● ● ● Luqa Morocco ● ● ● Agadir ● ● ● Casablanca ● ● ● Fes ● ● ● Marrakech ● ● ● Nador ● ● ● Oujda ● ● ● Rabat ● ● ● Tanger ● ● ● Arnhem ● ● ● Backwerk ● ● ● Broodzaak ● ● ● Den Bosch ● ● ● Den Haag ● ● ● Eindhoven ● ● ● Enschede ● ● ● Groningen ● ● ● Haarlem ● ● ● Hoorn ● ● ● Lelystad ● ● ● Roermond ● ● ● Rotterdam ● ● ● Stadskamer ● ● ● Sugar City ● ● ● Utrecht Nigeria ● ● ● Abuja ● ● ● Lagos Norway ● ● ● Oslo ● ● ● Stavanger Qatar ● ● ● Hamad Russia The Netherlands ● ● ● Alkmaar ● ● ● Amersfoort ● ● ● Amsterdam ● ● ● Amsterdam Amstel ● ● ● Amsterdam Bijlmer Arena ● ● ● Amsterdam Centraal ● ● ● Moscow Domodedovo ● ● ● Moscow Mineralnye Vody ● ● ● Moscow Sheremetyevo ● ● ● Murcia Corvera ● ● ● Palma de Mallorca (PMI) Serbia ● ● ● Belgrade ● ● ● Kraljevo ● ● ● Nis Slovenia ● ● ● Lukovica ● ● ● Mokrice ● ● ● Sempas Spain ● ● ● Alicante ● ● ● Almeria ● ● ● Barcelona ● ● ● Fuerteventura ● ● ● Girona ● ● ● Gran Canaria ● ● ● Granada ● ● ● Ibiza ● ● ● Jerez ● ● ● La Palma (SPC) ● ● ● Lanzarote ● ● ● Madrid ● ● ● Malaga ● ● ● Menorca ● ● ● Reus ● ● ● Sevilla ● ● ● Tenerife Norte ● ● ● Tenerife Sur ● ● ● Valencia Sweden ● ● ● Gothenburg ● ● ● Kalmar ● ● ● Karlstad ● ● ● Luleå ● ● ● Malmö ● ● ● Östersund ● ● ● Stockholm Arlanda ● ● ● Sundsvall ● ● ● Umeå ● ● ● Visby Switzerland ● ● ● Basel ● ● ● Basel-Mulhouse ● ● ● Bavois ● ● ● Cornavin ● ● ● Forrenberg ● ● ● Fribourg ● ● ● Genève ● ● ● Gruyère ● ● ● Lavaux ● ● ● Lully ● ● ● Münsingen ● ● ● Olten ● ● ● Pieterlen ● ● ● Pratteln ● ● ● Zurich Türkiye ● ● ● Antalya ● ● ● Istanbul ● ● ● Kayseri ● ● ● Kutahya ● ● ● St. Margarethen ● ● ● Prevelis ● ● ● Superfast I ● ● ● Superfast II ● Superfast III ● ● ● Superfast XI Asia Pacific Australia ● ● ● Cairns ● ● ● Canberra ● ● ● Gold Coast ● ● ● Perth Cambodia ● ● ● Phnom Penh ● ● ● Sihanoukville China ● ● ● Beijing ● ● ● Chongqing ● ● ● Hong Kong ● ● ● Macau ● ● ● Shanghai Hongqiao ● ● ● Shanghai Pudong ● ● ● Xiamen India ● ● ● Bangalore ● ● ● Delhi ● ● ● Hyderabad ● ● ● Prestige Shopping Mall ● ● ● Secunderabad ● ● ● Sujana Mall Indonesia ● ● ● Bali ● ● ● Jakarta Malaysia ● ● ● Kuala Lumpur ● ● ● Langkawi Maldives ● ● ● Maldives New Zealand ● ● ● Christchurch Singapore ● ● ● Changi Sri Lanka ● ● ● Colombo Vietnam ● ● ● Cam Rahn ● ● ● Da Nang ● ● ● Hanoi ● ● ● Ho Chi Minh City ● ● ● Phu Quoc ● ● ● Aberdeen ● ● ● Ashford ● ● ● Bedfordshire ● ● ● Belfast ● ● ● Birmingham ● ● ● Bournemouth ● ● ● Bristol ● ● ● Cardiff ● ● ● Cheshire Oaks ● ● ● Cumbria ● ● ● East Midlands ● ● ● Edinburgh ● ● ● Exeter ● ● ● Eurotunnel ● ● ● Euston ● ● ● Glasgow ● ● ● Humberside ● ● ● Inverness ● ● ● Jersey ● ● ● Leeds ● ● ● Liverpool ● ● ● London King's Cross ● ● ● London Gatwick ● ● ● London Heathrow ● ● ● London Luton ● ● ● London Stansted ● ● ● London St. Pancras ● ● ● Manchester ● ● ● Newcastle ● ● ● Norwich ● ● ● Nottinghamshire ● ● ● Prestwick ● ● ● Southampton ● ● ● Southend ● ● ● Suffolk ● ● ● Teesside ● ● ● Wiltshire ● ● ● Windsor Cruise and Ferry ships ● ● ● Ariadne ● ● ● Asterion ● ● ● Blue Star I, II ● ● ● Blue Star Delos ● ● ● Blue Star Diagoras ● ● ● Blue Star Naxos ● ● ● Blue Star Paros ● ● ● El. Venezielos ● ● ● Elyros ● ● ● Hellenic Spirit ● ● ● Highspeed 4 ● Kissamos ● Kriti Ship (Kriti I, II) ● Lefka Ori ● ● ● Nisos Chios ● ● ● Nisos Mykonos ● ● ● Nisos Rhodes ● ● ● Nisos Samos ● ● ● Patmos ● ● ● P&O European Causeway Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 75/336 North America USA ● ● ● Albany ● ● ● Albuquerque ● ● ● Anchorage ● ● ● Atlanta ● ● ● Atlantic City ● ● ● Austin ● ● ● Baltimore/Washington ● ● ● Birmingham ● ● ● Boston ● ● ● Burbank ● ● ● Burlington ● ● ● Charleston ● ● ● Charlotte ● ● ● Chicago O’Hare ● ● ● Cincinnati ● Clearwater ● ● ● Cleveland ● ● ● Colorado Springs ● ● ● Columbus ● ● ● Dallas Fort Worth ● ● ● Dallas Love Field ● ● ● Dayton ● ● ● Denver ● ● ● Des Moines ● ● ● Detroit ● ● ● El Paso ● ● ● Fairbanks ● ● ● Fort Lauderdale Hollywood ● ● ● Fort Myers ● ● ● Fresno ● ● ● Grand Rapids ● ● ● Greensboro ● ● ● Greenville ● ● ● Harrisburg ● ● ● Honolulu ● ● ● Houston George Bush ● ● ● Houston Hobby ● ● ● Houston Space Center ● ● ● Indianapolis ● ● ● Islip MacArthur ● ● ● Jackson ● ● ● Jacksonville ● ● ● Jersey Gardens Mall ● ● ● Knoxville ● ● ● Las Vegas McCarran ● ● ● Lihue ● ● ● Little Rock ● ● ● Los Angeles ● ● ● Louisville ● ● ● Lubbock ● ● ● Manchester Boston ● ● ● Maui ● ● ● Memphis ● ● ● Miami ● ● ● Milwaukee ● ● ● Minneapolis ● Mobile ● ● ● Myrtle Beach ● ● ● Nashville ● ● ● New Orleans ● ● ● New York ● ● ● New York Empire State ● ● ● New York Grand Central ● ● ● New York JFK ● ● ● New York LaGuardia ● ● ● New York Penn Station ● ● ● New York Port Authority ● ● ● New York Union Station ● ● ● Newark ● ● ● Newburg ● ● ● Norfolk ● ● ● Oakland ● ● ● Omaha ● ● ● Ontario ● ● ● Orange County ● ● ● Orlando ● ● ● Orlando Sanford ● ● ● Philadelphia ● ● ● Phoenix Sky Harbor Airport ● ● ● Pittsburgh ● ● ● Portland ● ● ● Portland International ● ● ● Raleigh ● ● ● Richmond ● ● ● Roanoke ● ● ● Rochester ● ● ● Sacramento ● ● ● Salt Lake City ● ● ● San Antonio ● ● ● San Diego ● ● ● San Francisco ● ● ● San Jose ● ● ● Santa Ana ● ● ● Sarasota ● ● ● Savannah ● ● ● Seattle Tacoma ● ● ● Spokane ● ● ● St Louis ● ● ● Tampa ● ● ● Tucson ● ● ● Tulsa ● ● ● West Palm Beach ● ● ● Washington DC ● ● ● Washington Dulles ● ● ● Washington Ronald Reagan Airport Canada ● ● ● Calgary ● ● ● Edmonton ● ● ● Halifax ● ● ● Montréal ● ● ● Toronto Billy Bishop ● ● ● Toronto Pearson ● ● ● Vancouver Latin America Antigua & Barbuda ● ● ● Antigua Argentina ● ● ● Bariloche ● ● ● Buenos Aires Ezeiza ● ● ● Buenos Aires Jorge Newbery ● ● ● Cordoba ● ● ● Mendoza ● ● ● Rosario Aruba ● ● ● Oranjestad Bahamas ● ● ● Freeport ● ● ● Nassau Barbados ● ● ● Bridgetown Bonaire ● ● ● Kralendijk Brazil ● ● ● Belém ● ● ● Belo Horizonte ● ● ● Brasília ● ● ● Campinas ● ● ● Curitiba ● ● ● Florianopolis ● ● ● Fortaleza ● ● ● Goiânia ● ● ● Natal ● ● ● Porto Alegre ● ● ● Recife ● ● ● Rio de Janeiro ● ● ● Rio de Janeiro Galeão ● ● ● Rio de Jainero Santos Dumont ● ● ● Salvador ● ● ● São Paulo Congonhas ● ● ● São Paulo Guarulhos ● ● ● Uruguaiana ● ● ● Vitoria Chile ● ● ● Santiago de Chile Colombia ● ● ● Bogota Dominican Republic ● ● ● La Romana ● ● ● Puerto Plata ● ● ● Samana ● ● ● Santiago ● ● ● Santo Domingo (SDQ) ● ● ● Santo Domingo Punta Cana Ecuador ● ● ● Santiago de Guayaquil Grenada ● ● ● St. Georges's Honduras ● ● ● Roatan Jamaica ● ● ● Falmouth ● ● ● Montego Bay Mexico ● ● ● Acapulco ● ● ● Cancun ● ● ● Cozumel ● ● ● Guadalajara ● ● ● Leon ● ● ● Mazatlan ● ● ● Mexico City ● ● ● Mexico State ● ● ● Monterrey ● ● ● Puerto Vallarta ● ● ● San José del Cabo ● ● ● Zihuatanejo Puerto Rico ● ● ● Ponce ● ● ● San Juan St Kitts & Nevis ● ● ● Basseterre St Lucia ● ● ● Castries St Maarten ● ● ● Philipsburg Trinidad & Tobago ● ● ● Port of Spain Turks & Caicos Islands ● ● ● Cockburn Town ● ● ● Providenciales Uruguay ● ● ● Montevideo ● ● ● Punta del Este Cruise and Ferry ships ● ● ● Carnival Panorama ● ● ● Carnival Valor ● ● ● NCL Bliss ● ● ● NCL Breakaway ● ● ● NCL Dawn ● ● ● NCL Escape ● ● ● NCL Epic ● ● ● NCL Gem ● ● ● NCL Getaway ● ● ● NCL Jade ● ● ● NCL Jewel ● ● ● NCL Joy ● ● ● NCL Pearl ● ● ● NCL Sky ● ● ● NCL Spirit ● ● ● NCL Sun Channels Airports Border, Downtown & Hotel Shops Railway Stations & Other Cruise Liners & Ferries Seaports Motorways Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 76/336 Avolta combines inno- vative travel retail and F&B offers into new hybrid commercial concepts. e c n e i r e p x e l e v a r t s s e l m a e s a g n i y o j n E – s r e m o t s u C 8 % Other 1 % Literature & Publications 2 % Electronics 6 % Luxury Goods 30 % F&B More than 50,000 items are available in our portfolio for our customers to choose from 10 % Wine & Spirits 11 % Tobacco Goods 13 % Food & Confectionary 19 % Perfumes & Cosmetics Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 77/336 Avolta combines inno- vative travel retail and F&B offers into new hybrid commercial concepts. e c n e i r e p x e l e v a r t l s s e m a e s a g n y o n E j i – s r e m o t s u C 8 % Other 1 % Literature & Publications 2 % Electronics 6 % Luxury Goods 30 % F&B More than 50,000 items are available in our portfolio for our customers to choose from 10 % Wine & Spirits 11 % Tobacco Goods 13 % Food & Confectionary 19 % Perfumes & Cosmetics Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 78/336 In 2023, Avolta further intensified its commitment to care- fully listen to customers, achieving full alignment with our customer-centric strategy. Close customer and traveler engagement through our regular in-shop and online sur- veys continued to provide valuable insights on evolving customer expectations. While the global trends for sus- tainable, healthy and eco-friendly products and food were confirmed along with premium and innovative offers, we also identified some additional changes in shopping and dining behaviors. These are currently being analyzed for future implementation. Travel experience revolution coming to life. Several recent new openings and refurbishments confirm Avolta’s ability to revolutionize the traveler’s experience through the introduction of innovative hybrid and highly experiential shopping and dining concepts. Showcases in- clude the innovative “Haute Perfumery” concept, opened at Zurich Airport (Switzerland), the opening of the new “Debonair Food Hall” in Palermo’s Falcone Borsellino Inter- national Airport (Italy), the significant refurbishments and Next Generation store at Stockholm Arlanda Airport (Swe- den) as well as the new hybrid concepts, “Hudson Cafè” with Baci, opened at Milan Malpensa Airport (Italy). Expanding healthy, wellbeing and sustainable offers In 2023, Avolta continued fine-tuning its offers and service portfolio to increase the curated selection of healthy, well- being and sustainable products and menus. In this context we introduced 12 new retail brands to our portfolio across several categories. From an F&B perspective 46 new brands including vegetarian and vegan options have been presented to travelers on a global scale. Finally, we have again extended our premium offering in wine & spirits with low and zero alcohol options. For a detailed overview please refer to page 117 of the ESG Report 2023. The innovative mind.body.soul. shop-in-shop concept of- fers a range of nutritious, energy-focused foods for health- conscious customers, alongside sustainable products for a better environment, and relaxation-focused products that help promote a sense of well-being. First launched in Amman (Jordan), the highly flexible concept can be cus- tomized to the specific wants and needs of different loca- tions and customer profiles. The concept has already been expanded into new locations and is currently deployed in São Paulo (Brazil), Zurich (Switzerland), Helsinki (Finland), Toulouse (France), London-Stansted (UK), and most recently, Stockholm (Sweden) and Mexico City (Mexico). Further openings are planned in 2024 in Bali (Indonesia), Toronto and Vancouver (Canada) as well as in Siem Reap and Phnom Penh (Cambodia). 46 new F&B and 12 new retail brands introduced in our portfolio. In close collaboration with our brand partners, we have further expanded our sustainable product identification initiative for the retail assortments to new locations and adding additional products from new brands. The selec- tion features products that are sustainable under different aspects such as being Sustainable, Plastic Free, Recycla- ble or Refillable, Vegan, Palm Oil-Free or Supporting Com- munities. To help customers shop considerately, these products get marked with dedicated tags and are easily identifiable in our shops and on our online platforms. Currently, the sus- tainable product selection includes over 1,964 products from 23 global suppliers covering the main categories – Close customer and traveller engagement through regular online and in-shop surveys. food, liquor, perfumes & cosmetics – and is available in 167 their journey, and collect them conveniently once they are shops across 126 airports, worldwide. A detailed descrip- at the airport. Avolta’s «Reserve & Collect» service is al- tion of this ESG initiative is available in the ESG Report on ready available in 223 locations in 45 countries around the page 115. world and new locations are being added – the full list is available on our website: www.shopdutyfree.com. Helping customers to shop and eat considerately. Global loyalty program. Similarly, Avolta helps consumers make conscious, re- Avolta’s loyalty program is a mobile application (App), sponsible nutrition choices, for example by opting for cer- which besides awarding points, offers exclusive advan- tified-sustainable food, focusing on products prepared tages, discounts and airport benefits at Avolta retail shops. with a limited amount of ingredients or natural-origin Members receive promotion notifications tailored to their ones, and items free from artificial colors or preservatives. preferences when approaching the airport. This allows In North America, for example, the selection of takeaway Avolta to attract them to the shops and increase traveler food includes items that respect animal welfare and are conversion. Red By Dufry is live in 316 locations in 51 coun- fair trade certified, supplied by B-Corp companies, or la- tries and is being continually expanded to further opera- belled as gluten free or BPA free. tions worldwide. For a full list of the locations offering Red By Dufry visit: www.redbydufry.com. In Italy, Avolta also offers the «My Autogrill» loyalty pro- gram, working as an App and featuring a reward catalogue, For a more detailed description of these ESG initiatives please refer to the ESG Report on page 115. Customer engagement along the whole journey Every single day, Avolta welcomes customers represent- ing more than 150 nationalities and we increasingly en- gage with them along their whole journey. Addressing travelers in the right language and presenting them with tasty meals, product novelties and attractive promotions is key to turn them into customers and driving sales. Digi- tal services and tools are key elements to engage with customers along their whole journey from the moment they leave home until they reach their destination. Pre-order online, pick-up at the airport. Currently the sustainable product selection includes 1,964 products from 23 global suppliers covering the main categories and is available in 167 shops across 126 airports, worldwide. Our New Generation Stores and the other more than 50 highly digitalized shops are cornerstones of this end-to- end shopping experience, changing their appearance de- Red by Dufry Red By Dufry is live and available pending on which nationalities are present at the airport in 316 locations across 51 countries. at any given time of the day, based on flight schedules, and presenting the brands that best fit the respective cus- tomer profile. Similarly, digital online menus, touchscreen kiosks, QR codes, apps, and digital payment systems sim- Reserve & Collect The service is already available in 223 locations plify customer’s ordering process in our restaurants and in 45 countries around the world. F&B outlets. Convenience is always a key sales proposition, and thus also a priority for Avolta. We believe that engaging with our My Autogrill is the loyalty programm of Autogrill customers before they enter our shops and well before valid at Autogrill and Nuova Sidap stores in Italy. My Autogrill they reach the airport, provides them with a great oppor- www.myautogrill.it. tunity to pre-order products online before they even start In 2023, Avolta further intensified its commitment to care- low and zero alcohol options. For a detailed overview fully listen to customers, achieving full alignment with our please refer to page 117 of the ESG Report 2023. customer-centric strategy. Close customer and traveler engagement through our regular in-shop and online sur- The innovative mind.body.soul. shop-in-shop concept of- veys continued to provide valuable insights on evolving fers a range of nutritious, energy-focused foods for health- customer expectations. While the global trends for sus- conscious customers, alongside sustainable products for tainable, healthy and eco-friendly products and food were a better environment, and relaxation-focused products confirmed along with premium and innovative offers, we that help promote a sense of well-being. First launched in also identified some additional changes in shopping and Amman (Jordan), the highly flexible concept can be cus- dining behaviors. These are currently being analyzed for tomized to the specific wants and needs of different loca- future implementation. Travel experience revolution coming to life. tions and customer profiles. The concept has already been expanded into new locations and is currently deployed in São Paulo (Brazil), Zurich (Switzerland), Helsinki (Finland), Toulouse (France), London-Stansted (UK), and most recently, Stockholm (Sweden) and Mexico City (Mexico). Further openings are planned in 2024 in Bali (Indonesia), Toronto and Vancouver (Canada) as well as in Siem Reap Several recent new openings and refurbishments confirm and Phnom Penh (Cambodia). Avolta’s ability to revolutionize the traveler’s experience through the introduction of innovative hybrid and highly experiential shopping and dining concepts. Showcases in- clude the innovative “Haute Perfumery” concept, opened at Zurich Airport (Switzerland), the opening of the new “Debonair Food Hall” in Palermo’s Falcone Borsellino Inter- national Airport (Italy), the significant refurbishments and 46 new F&B and 12 new retail brands introduced in our portfolio. Next Generation store at Stockholm Arlanda Airport (Swe- In close collaboration with our brand partners, we have den) as well as the new hybrid concepts, “Hudson Cafè” further expanded our sustainable product identification with Baci, opened at Milan Malpensa Airport (Italy). initiative for the retail assortments to new locations and Expanding healthy, wellbeing and sustainable offers tion features products that are sustainable under different In 2023, Avolta continued fine-tuning its offers and service aspects such as being Sustainable, Plastic Free, Recycla- portfolio to increase the curated selection of healthy, well- ble or Refillable, Vegan, Palm Oil-Free or Supporting Com- adding additional products from new brands. The selec- being and sustainable products and menus. In this context munities. we introduced 12 new retail brands to our portfolio across several categories. From an F&B perspective 46 new To help customers shop considerately, these products get brands including vegetarian and vegan options have been marked with dedicated tags and are easily identifiable in presented to travelers on a global scale. Finally, we have our shops and on our online platforms. Currently, the sus- again extended our premium offering in wine & spirits with tainable product selection includes over 1,964 products from 23 global suppliers covering the main categories – Close customer and traveller engagement through regular online and in-shop surveys. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 79/336 food, liquor, perfumes & cosmetics – and is available in 167 shops across 126 airports, worldwide. A detailed descrip- tion of this ESG initiative is available in the ESG Report on page 115. their journey, and collect them conveniently once they are at the airport. Avolta’s «Reserve & Collect» service is al- ready available in 223 locations in 45 countries around the world and new locations are being added – the full list is available on our website: www.shopdutyfree.com. Helping customers to shop and eat considerately. Global loyalty program. Similarly, Avolta helps consumers make conscious, re- sponsible nutrition choices, for example by opting for cer- tified-sustainable food, focusing on products prepared with a limited amount of ingredients or natural-origin ones, and items free from artificial colors or preservatives. In North America, for example, the selection of takeaway food includes items that respect animal welfare and are fair trade certified, supplied by B-Corp companies, or la- belled as gluten free or BPA free. For a more detailed description of these ESG initiatives please refer to the ESG Report on page 115. Customer engagement along the whole journey Every single day, Avolta welcomes customers represent- ing more than 150 nationalities and we increasingly en- gage with them along their whole journey. Addressing travelers in the right language and presenting them with tasty meals, product novelties and attractive promotions is key to turn them into customers and driving sales. Digi- tal services and tools are key elements to engage with customers along their whole journey from the moment they leave home until they reach their destination. Pre-order online, pick-up at the airport. Our New Generation Stores and the other more than 50 highly digitalized shops are cornerstones of this end-to- end shopping experience, changing their appearance de- pending on which nationalities are present at the airport at any given time of the day, based on flight schedules, and presenting the brands that best fit the respective cus- tomer profile. Similarly, digital online menus, touchscreen kiosks, QR codes, apps, and digital payment systems sim- plify customer’s ordering process in our restaurants and F&B outlets. Convenience is always a key sales proposition, and thus also a priority for Avolta. We believe that engaging with our customers before they enter our shops and well before they reach the airport, provides them with a great oppor- tunity to pre-order products online before they even start Avolta’s loyalty program is a mobile application (App), which besides awarding points, offers exclusive advan- tages, discounts and airport benefits at Avolta retail shops. Members receive promotion notifications tailored to their preferences when approaching the airport. This allows Avolta to attract them to the shops and increase traveler conversion. Red By Dufry is live in 316 locations in 51 coun- tries and is being continually expanded to further opera- tions worldwide. For a full list of the locations offering Red By Dufry visit: www.redbydufry.com. In Italy, Avolta also offers the «My Autogrill» loyalty pro- gram, working as an App and featuring a reward catalogue, Currently the sustainable product selection includes 1,964 products from 23 global suppliers covering the main categories and is available in 167 shops across 126 airports, worldwide. Red by Dufry Red By Dufry is live and available in 316 locations across 51 countries. Reserve & Collect The service is already available in 223 locations in 45 countries around the world. My Autogrill My Autogrill is the loyalty programm of Autogrill valid at Autogrill and Nuova Sidap stores in Italy. www.myautogrill.it. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 80/336 New combined Avolta Supplier Code of Conduct recertified with retail and F&B suppliers. discounts and dedicated customer services. My Autogrill is valid in all Autogrill and Nova Sidap Stores in Italy: www. myautogrill.it. Forum is Avolta’s social media platform that provides sto- ries from bloggers and influencers, as well as background information from brands, in an exclusive and inspirational environment. Moreover, Forum connects all our other dig- ital initiatives such as Red By Dufry and Reserve & Collect. Forum is designed to position Avolta’s travel retail shops as the place to find the latest trends and novelties for the main product categories – https://forum.shopdutyfree. com/en. Connecting brands and customers. While we foster experiences with an array of initiatives, such as activations, tastings, beauty treatments, novelties and delicious meals, we strongly focus on a comprehen- sive service portfolio for our customers. Our well-trained and highly motivated sales representatives and food & beverage servers help travelers navigate through a large variety of prestigious brands and advise them on attrac- tive menu selections while providing them with valuable advice and information. For us, a satisfied customer is a customer who can trust us beyond the mere process of shopping or eating, but also just as equally when it comes to product, food and outlet safety as well as comprehen- sive after-sales services. Seamless customer service. Avolta is the only global operator in the industry to offer a true global return guarantee for products purchased in the company’s travel retail stores. Whether you purchase something in Zurich, Rio de Janeiro, Amman, Casablanca, Hong Kong, Toronto, Mexico City, Bali or in any other of our locations in the world: if there is a problem with any product that you purchased at an Avolta network store, we will replace, refund or exchange your product within 60 days of purchase. True global return guarantee for travel retail purchases. In 2023, Avolta’s customer service representatives, who can be reached in several languages by phone, email or online chat, attended 250,047 customers (see further de- tails also on page 120). Our customer service team pro- vides worldwide support through our dedicated and sim- ple to use online platform: Customer Service | Avolta. Customer satisfaction, responsible marketing & product safety Customer satisfaction, responsible marketing and prod- uct safety is our first priority. We ensure that all products as well as food offerings reflect the respective health and safety regulations. Avolta complies with legal require- ments at every location in which we operate and takes a proactive approach, working with governments and regu- lators to clarify any concerns. Moreover, through active membership or close collabora- tion with industry and trade associations Avolta has helped to shape robust Codes of Conduct (e.g. UK Code of Conduct on disruptive passengers, UK Code of Con- duct on VAT, ETRC Code of Conduct on Sale of Alcohol, DFWC Code of Conduct on Sale of Alcohol as well as the Serve Safe Alcohol program in North America, in collabo- ration with the National Restaurant Association) and con- tinues to emphasize its «We ID» campaign, to raise con- sumers’ awareness about safe drinking by asking all customers to present identification when they purchase alcohol in our US stores. Avolta has also defined its own Supplier Code of Conduct tem, a data protection policy and internal procedures and and in 2023 has shared it for recertification with an in- policies, which follow relevant laws and regulations. Dedi- creased number of suppliers across the globe including cated trainings are also carried out on a regular basis for suppliers of retail products as well as F&B). More details team members dealing with personal information. are available in the ESG Report on page 116. When it comes to marketing and advertising initiatives, secure the alignment of our operations in accordance to Avolta applies the same responsible stance that it shows the EU General Data Protection Regulation (GDPR) and the in all its other activities. We commit to comply with mar- new Swiss Data Protection Law. This involves maintaining keting and advertising regulations in customer-oriented expanded documentation and information requirements, communication in the countries where we operate. privacy risk assessments and ensuring the right of individ- Avolta continuously reviews and adjusts its processes to Fostering responsible marketing and retailing. uals (customers, team members, partners and suppliers) to request access to, or to correct, delete, or object to pro- cessing of their own personal data, and to request data portability. Avolta keeps monitoring new developments in data protection regulations and adapts accordingly where required. We expect the same behavior from our suppliers when us- ing the space that we make available in our stores, F&B Moreover, Avolta also undertakes internal Data Protection outlets and online channels for advertising and promo- Audits and intrusion tests, on top of continuously discuss- tions. This also applies to product labelling, where we ask ing and improving the protection of customers’ personal our suppliers to comply with the regulations of all the data through quarterly dedicated meetings. For any cus- Avolta locations where their products are sold. Given that tomer, team member or third party who wishes to report we operate in an environment where we serve many na- a grievance or who has questions regarding Avolta’s data tionalities speaking different languages every day, we are privacy, there is a specific compliance address to contact proactively engaging with our industry trade associations the company, with respective inquiries being coordinated and suppliers to find off-the-label solutions. by the Compliance and the Global Internal Audit & Investi- gations Department Avolta Helpline. Customer privacy & data protection In line with the expansion of its online activities and the in- creased use of digital applications involving customer data, the management and protection of customer pri- vacy in the processes involving the handling of client infor- mation is an area of growing importance for Avolta. As a Industry recognition for retail expertise. requirement of customs authorities as well as for contrac- Avolta’s expertise recognized by the industry tual reasons – particularly when operating in airports or In 2023, Avolta’s customer focus, retail and F&B excel- similar custom regime environments – the customer’s lence was once again recognized by different industry personal data is collected, processed and retained in ac- partners. A complete list of our awards is available here: cordance with the privacy statement listed on the Avolta Avolta Awards. website: Privacy & Cookie Statement | Avolta (avoltaworld. com). Growing importance of customer privacy and data protection. The company’s Reserve & Collect and Red By Dufry ser- vices require additional personal customer information to provide them with newsletters as well as marketing & ad- vertising materials. To protect customer data and ensure it is handled correctly, Avolta applies the highest security standards securing compliance with different legal frame- works. The company operates a number of systems and security processes, including a robust cyber security sys- New combined Avolta Supplier Code of Conduct recertified with retail and F&B suppliers. discounts and dedicated customer services. My Autogrill Hong Kong, Toronto, Mexico City, Bali or in any other of is valid in all Autogrill and Nova Sidap Stores in Italy: www. our locations in the world: if there is a problem with any myautogrill.it. product that you purchased at an Avolta network store, we will replace, refund or exchange your product within Forum is Avolta’s social media platform that provides sto- 60 days of purchase. main product categories – https://forum.shopdutyfree. In 2023, Avolta’s customer service representatives, who ries from bloggers and influencers, as well as background information from brands, in an exclusive and inspirational environment. Moreover, Forum connects all our other dig- ital initiatives such as Red By Dufry and Reserve & Collect. Forum is designed to position Avolta’s travel retail shops as the place to find the latest trends and novelties for the com/en. Connecting brands and customers. True global return guarantee for travel retail purchases. can be reached in several languages by phone, email or online chat, attended 250,047 customers (see further de- tails also on page 120). Our customer service team pro- vides worldwide support through our dedicated and sim- ple to use online platform: Customer Service | Avolta. Customer satisfaction, responsible marketing & While we foster experiences with an array of initiatives, product safety such as activations, tastings, beauty treatments, novelties Customer satisfaction, responsible marketing and prod- and delicious meals, we strongly focus on a comprehen- uct safety is our first priority. We ensure that all products sive service portfolio for our customers. Our well-trained as well as food offerings reflect the respective health and and highly motivated sales representatives and food & safety regulations. Avolta complies with legal require- beverage servers help travelers navigate through a large ments at every location in which we operate and takes a variety of prestigious brands and advise them on attrac- proactive approach, working with governments and regu- tive menu selections while providing them with valuable lators to clarify any concerns. advice and information. For us, a satisfied customer is a customer who can trust us beyond the mere process of Moreover, through active membership or close collabora- shopping or eating, but also just as equally when it comes tion with industry and trade associations Avolta has to product, food and outlet safety as well as comprehen- helped to shape robust Codes of Conduct (e.g. UK Code sive after-sales services. of Conduct on disruptive passengers, UK Code of Con- duct on VAT, ETRC Code of Conduct on Sale of Alcohol, DFWC Code of Conduct on Sale of Alcohol as well as the Serve Safe Alcohol program in North America, in collabo- ration with the National Restaurant Association) and con- tinues to emphasize its «We ID» campaign, to raise con- Seamless customer service. Avolta is the only global operator in the industry to offer a sumers’ awareness about safe drinking by asking all true global return guarantee for products purchased in customers to present identification when they purchase the company’s travel retail stores. Whether you purchase alcohol in our US stores. something in Zurich, Rio de Janeiro, Amman, Casablanca, Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 81/336 tem, a data protection policy and internal procedures and policies, which follow relevant laws and regulations. Dedi- cated trainings are also carried out on a regular basis for team members dealing with personal information. Avolta continuously reviews and adjusts its processes to secure the alignment of our operations in accordance to the EU General Data Protection Regulation (GDPR) and the new Swiss Data Protection Law. This involves maintaining expanded documentation and information requirements, privacy risk assessments and ensuring the right of individ- uals (customers, team members, partners and suppliers) to request access to, or to correct, delete, or object to pro- cessing of their own personal data, and to request data portability. Avolta keeps monitoring new developments in data protection regulations and adapts accordingly where required. Moreover, Avolta also undertakes internal Data Protection Audits and intrusion tests, on top of continuously discuss- ing and improving the protection of customers’ personal data through quarterly dedicated meetings. For any cus- tomer, team member or third party who wishes to report a grievance or who has questions regarding Avolta’s data privacy, there is a specific compliance address to contact the company, with respective inquiries being coordinated by the Compliance and the Global Internal Audit & Investi- gations Department Avolta Helpline. Industry recognition for retail expertise. Avolta’s expertise recognized by the industry In 2023, Avolta’s customer focus, retail and F&B excel- lence was once again recognized by different industry partners. A complete list of our awards is available here: Avolta Awards. Avolta has also defined its own Supplier Code of Conduct and in 2023 has shared it for recertification with an in- creased number of suppliers across the globe including suppliers of retail products as well as F&B). More details are available in the ESG Report on page 116. When it comes to marketing and advertising initiatives, Avolta applies the same responsible stance that it shows in all its other activities. We commit to comply with mar- keting and advertising regulations in customer-oriented communication in the countries where we operate. Fostering responsible marketing and retailing. We expect the same behavior from our suppliers when us- ing the space that we make available in our stores, F&B outlets and online channels for advertising and promo- tions. This also applies to product labelling, where we ask our suppliers to comply with the regulations of all the Avolta locations where their products are sold. Given that we operate in an environment where we serve many na- tionalities speaking different languages every day, we are proactively engaging with our industry trade associations and suppliers to find off-the-label solutions. Customer privacy & data protection In line with the expansion of its online activities and the in- creased use of digital applications involving customer data, the management and protection of customer pri- vacy in the processes involving the handling of client infor- mation is an area of growing importance for Avolta. As a requirement of customs authorities as well as for contrac- tual reasons – particularly when operating in airports or similar custom regime environments – the customer’s personal data is collected, processed and retained in ac- cordance with the privacy statement listed on the Avolta website: Privacy & Cookie Statement | Avolta (avoltaworld. com). Growing importance of customer privacy and data protection. The company’s Reserve & Collect and Red By Dufry ser- vices require additional personal customer information to provide them with newsletters as well as marketing & ad- vertising materials. To protect customer data and ensure it is handled correctly, Avolta applies the highest security standards securing compliance with different legal frame- works. The company operates a number of systems and security processes, including a robust cyber security sys- Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 82/336 Avolta provides con- cession partners with an unrivalled selection of shopping, dining and hybrid concepts, allow- ing them to best lever- age their commercial areas to create more and more of a sense of place. e s i t r e p x e l i a t e R n – d n s r e n t r a P o i s s e c n o C a B & F e u q i n u e g a r e v e L 5,100 Avolta’s travel retail and F&B expertise comes from operating over 5,100 outlets in 73 countries across all continents. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 83/336 Avolta provides con- cession partners with an unrivalled selection of shopping, dining and hybrid concepts, allow- ing them to best lever- age their commercial areas to create more and more of a sense of place. e s i t r e p x e l i a t e R – s r e n t r a P i n o s s e c n o C d n a B & F e u q n u e g a r e v e L i 5,100 Avolta’s travel retail and F&B expertise comes from operating over 5,100 outlets in 73 countries across all continents. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 84/336 Avolta has substantially expanded its expertise to operate all types of commercial spaces including both travel retail and F&B formats – and now even further to include oper- ating as master concessionaire partner. Best-in-class con- cepts are developed based on detailed understanding of customer expectations as well as shopping and eating be- haviors, creating value and maximizing revenue genera- tion. The portfolio includes both dedicated and highly spe- cialized concepts as well as hybrid formats allowing to completely revolutionize customer experience. The trust our concession partners place in Avolta allows our com- pany to become the leading travel experience player, cur- rently operating over 5,100 outlets in 73 countries located in airports, motorways, seaports, railway stations, down- town areas, border crossings, cruise liners & ferries, hotels and other locations with captive audiences. Benefitting from the widest industry experience Traditionally featuring a comprehensive portfolio of at- tractive concepts tailored to the individual needs of duty- free, duty-paid and F&B environments, serving domestic and international passengers, Avolta constantly renews and updates its formats to meet expectations of existing, and newly emerging customer profiles. Intelligence on changing profiles and other customer in- sights is regularly collected through dedicated surveys, in- store technologies and by analyzing online engagement of our customers and social media channels. This forms the basis of successful marketing initiatives tailored to the requirements of every single airport or any other type of location. Our worldwide presence and the extensive intel- ligence of customer profiles are core competitive advan- tages and key drivers to increase sales and profitability, combined with our ongoing evolution of shop design and customer services. Additionally, all these physical travel retail and F&B con- cepts are supported by a comprehensive array of online services and platforms, which considerably increase the number of touch-points along the traveler’s journey. Com- plemented with the extensive expertise in all operational and regulatory aspects as well as the sustainability man- agement systems provided by Avolta, concession part- ners receive a complete package to best operate their spaces in a profitable and sustainable way. Smart stores, highly digitalized and with a great sense of place In line with its strategy, Avolta continues to drive its shop and restaurant digitalization. This creates the ability to of- fer customers new services, increasing the level of direct interaction independently from nationalities and lan- guages, while at the same time continuing to implement location-specific formats with highly attractive sense-of- place designs. Most recent examples include the newly refurbished duty-free shop at Arlanda Airport in Stock- holm (Sweden) as well as “Haute Perfumery”, opened at Zurich Airport (Switzerland), featuring phygital experi- ences helping the customer to identify the right fragrance. Highly digitalized shops and F&B outlets – which include pre-order applications, loyalty program integration, phy- gital experiences as well as contactless shopping and palm recognition technologies – continue to evolve and are typically implemented during refurbishments or when building new outlets. For a more detailed description of our digital strategy, please also refer to pages 54 and 55. Avolta’s concepts provide for a high degree of customiza- tion, including sense-of-place designs, which remains an important aspect for our concession partners. Avolta knows how to perfectly match local requirements and specific customer profiles with efficient commercial for- mats, to best serve travelers’ needs and to generate value for concession partners and Avolta alike. Real Partnership for mutual value creation Over the many years we have been in the business, we have advocated the importance of close collaboration be- tween concession partners and operators of retail and F&B formats as a base for optimizing customer satisfac- Highly digitalized shop and F&B concepts continue to evolve with hybrid offers and sense of place design. tion and sales. By joining forces with our concession part- First-class concession portfolio further expanded ners, we can, for example, in airports, create attractive with 84 new outlets commercial spaces that maximize spend from the travel- In 2023, Avolta further increased its portfolio by opening er’s arrival at the airport until boarding – and if legislation and expanding 84 new retail shops and adding over 35,244 allows – also for arrivals duty-free. Important contract wins and extensions m² of retail space across all regions. At December 31, 2023, retail commercial space totaled 477,464 m², representing a solid footprint for our travel retail operations – and all the In 2023, Avolta successfully secured new concessions and more impressive if counting also the commercial F&B areas. contract extensions, thereby fostering the company’s re- silience with the necessary «operating licenses» to serve Within our total concession portfolio, 25 % have a remain- meals as well as selling products and services. In this con- ing life-time of ten years or more, 26 % have between six text the remaining lifetime of its portfolio increased to cur- and nine years, another 28 % have three to five years and rently over seven years from around six years in 2022. the final 21 % of our contracts have a remaining duration of Highlights – amongst others – of the 2023 contract wins over six years, is testimony to the strong resilience of the include the joint venture with Hubei Airport Group to run, Avolta business. On average, Avolta renews existing con- as master concessionaire, the Wuhan Tianhe Airport’s tracts, representing between 10 % and 15 % of our sales, Terminal 2 retail and F&B operations. Wuhan’s Terminal 2 each year, over and above new contract additions. one to two years. That 51 % of contracts have a life-time of serves 27 million passengers (base 2019) through 77 out- lets. The APAC business region also saw an expansion of The company’s concession portfolio is highly diversified its operations in the People’s Republic of China by enter- and well balanced across emerging and mature markets ing into a new five-year contract at Chongqing Jiangbei in all six continents. The largest concession accounts for International Airport for four stores. less than 4 % of sales, while the 10 biggest concessions represent less than 18 %, thus reducing cluster risk and ex- In North America, Avolta was awarded a new long-term posure to impacts in any single market or operation. duty-free contract, along with an extension for its duty- paid business, for Boston Logan International Airport, was Financial discipline to focus on investment returns awarded long-term contracts for both retail and F&B areas Avolta has tight financial discipline when evaluating new at Oakland International Airport and signed a new fifteen- projects and opportunities. This has repeatedly proven its year duty-paid contract at Fresno Yosemite International value during challenging business environments as it al- Airport (California). lows Avolta to optimize costs and flexible investments. Projects are analyzed individually on a commercial and fi- In Latin America, Avolta signed a ten-year contract at nancial basis. The many aspects of a project being as- Vitória Airport (Brazil) as well as a twenty-year contract to sessed include development potential and analyzing initial operate a duty-free store at the international bridge «Gen- investment requirements, as well as the expected devel- eral San Martin«, the main crossing point between Argen- opment of traveler numbers and profile perspectives. tina and Uruguay. In EMEA, Avolta won new retail and F&B Through a strict evaluation of these criteria and our disci- concessions at several airports including Helsinki Airport plined approach on returns, we ensure that our conces- (Finland) and Hamad International Airport (Doha; F&B joint sion portfolio remains of the highest quality and that each venture with Qatar Airways). concession offers attractive returns for the company. This methodology is applied to all project types, irrespective of Extensions played a key role in 2023 with, above all, the re- whether we participate in a tender process, engage in di- newal of the vast majority of Avolta’s Spanish airport oper- rect negotiations with concession owners or perform ac- ation contracts for twelve years. This covers 21 airports, quisitions. 120 retail outlets covering around 60,000 m2 and serves approximately 132 million travelers annually (base 2019). As part of «Destination 2027», we have put active portfo- The total commercial space awarded represents a 30 % lio management at the core of our long-term strategy fol- increase on the previous setup as well as a considerable lowing the principle of full profitability evaluation for each sales category expansion in both retail and F&B. Worth concession contract and, at the appropriate times, rene- mentioning are also the renewal of a seven-year conces- gotiation or exit from any concession that does not match sion contract at Belgrade airport to operate a total of eight our concession specific objectives. We continuously up- duty-free shops, a seven-year extension in Kuala Lumpur date and review our portfolio, including post-opening per- International Airport (Malaysia) for F&B and a fifteen-year formances. extension at Harry Reid International Airport (Las Vegas, USA). Avolta has substantially expanded its expertise to operate plemented with the extensive expertise in all operational all types of commercial spaces including both travel retail and regulatory aspects as well as the sustainability man- and F&B formats – and now even further to include oper- agement systems provided by Avolta, concession part- ating as master concessionaire partner. Best-in-class con- ners receive a complete package to best operate their cepts are developed based on detailed understanding of spaces in a profitable and sustainable way. customer expectations as well as shopping and eating be- haviors, creating value and maximizing revenue genera- Smart stores, highly digitalized and with tion. The portfolio includes both dedicated and highly spe- a great sense of place cialized concepts as well as hybrid formats allowing to In line with its strategy, Avolta continues to drive its shop completely revolutionize customer experience. The trust and restaurant digitalization. This creates the ability to of- our concession partners place in Avolta allows our com- fer customers new services, increasing the level of direct pany to become the leading travel experience player, cur- interaction independently from nationalities and lan- rently operating over 5,100 outlets in 73 countries located guages, while at the same time continuing to implement in airports, motorways, seaports, railway stations, down- location-specific formats with highly attractive sense-of- town areas, border crossings, cruise liners & ferries, hotels place designs. Most recent examples include the newly and other locations with captive audiences. refurbished duty-free shop at Arlanda Airport in Stock- holm (Sweden) as well as “Haute Perfumery”, opened at Benefitting from the widest industry experience Zurich Airport (Switzerland), featuring phygital experi- Traditionally featuring a comprehensive portfolio of at- ences helping the customer to identify the right fragrance. tractive concepts tailored to the individual needs of duty- free, duty-paid and F&B environments, serving domestic Highly digitalized shops and F&B outlets – which include and international passengers, Avolta constantly renews pre-order applications, loyalty program integration, phy- and updates its formats to meet expectations of existing, gital experiences as well as contactless shopping and and newly emerging customer profiles. palm recognition technologies – continue to evolve and are typically implemented during refurbishments or when Intelligence on changing profiles and other customer in- building new outlets. For a more detailed description of sights is regularly collected through dedicated surveys, in- our digital strategy, please also refer to pages 54 and 55. store technologies and by analyzing online engagement of our customers and social media channels. This forms Avolta’s concepts provide for a high degree of customiza- the basis of successful marketing initiatives tailored to the tion, including sense-of-place designs, which remains an requirements of every single airport or any other type of important aspect for our concession partners. Avolta location. Our worldwide presence and the extensive intel- knows how to perfectly match local requirements and ligence of customer profiles are core competitive advan- specific customer profiles with efficient commercial for- tages and key drivers to increase sales and profitability, mats, to best serve travelers’ needs and to generate value combined with our ongoing evolution of shop design and for concession partners and Avolta alike. customer services. Additionally, all these physical travel retail and F&B con- Over the many years we have been in the business, we cepts are supported by a comprehensive array of online have advocated the importance of close collaboration be- services and platforms, which considerably increase the tween concession partners and operators of retail and number of touch-points along the traveler’s journey. Com- F&B formats as a base for optimizing customer satisfac- Real Partnership for mutual value creation Highly digitalized shop and F&B concepts continue to evolve with hybrid offers and sense of place design. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 85/336 tion and sales. By joining forces with our concession part- ners, we can, for example, in airports, create attractive commercial spaces that maximize spend from the travel- er’s arrival at the airport until boarding – and if legislation allows – also for arrivals duty-free. Important contract wins and extensions In 2023, Avolta successfully secured new concessions and contract extensions, thereby fostering the company’s re- silience with the necessary «operating licenses» to serve meals as well as selling products and services. In this con- text the remaining lifetime of its portfolio increased to cur- rently over seven years from around six years in 2022. Highlights – amongst others – of the 2023 contract wins include the joint venture with Hubei Airport Group to run, as master concessionaire, the Wuhan Tianhe Airport’s Terminal 2 retail and F&B operations. Wuhan’s Terminal 2 serves 27 million passengers (base 2019) through 77 out- lets. The APAC business region also saw an expansion of its operations in the People’s Republic of China by enter- ing into a new five-year contract at Chongqing Jiangbei International Airport for four stores. In North America, Avolta was awarded a new long-term duty-free contract, along with an extension for its duty- paid business, for Boston Logan International Airport, was awarded long-term contracts for both retail and F&B areas at Oakland International Airport and signed a new fifteen- year duty-paid contract at Fresno Yosemite International Airport (California). In Latin America, Avolta signed a ten-year contract at Vitória Airport (Brazil) as well as a twenty-year contract to operate a duty-free store at the international bridge «Gen- eral San Martin«, the main crossing point between Argen- tina and Uruguay. In EMEA, Avolta won new retail and F&B concessions at several airports including Helsinki Airport (Finland) and Hamad International Airport (Doha; F&B joint venture with Qatar Airways). Extensions played a key role in 2023 with, above all, the re- newal of the vast majority of Avolta’s Spanish airport oper- ation contracts for twelve years. This covers 21 airports, 120 retail outlets covering around 60,000 m2 and serves approximately 132 million travelers annually (base 2019). The total commercial space awarded represents a 30 % increase on the previous setup as well as a considerable sales category expansion in both retail and F&B. Worth mentioning are also the renewal of a seven-year conces- sion contract at Belgrade airport to operate a total of eight duty-free shops, a seven-year extension in Kuala Lumpur International Airport (Malaysia) for F&B and a fifteen-year extension at Harry Reid International Airport (Las Vegas, USA). First-class concession portfolio further expanded with 84 new outlets In 2023, Avolta further increased its portfolio by opening and expanding 84 new retail shops and adding over 35,244 m² of retail space across all regions. At December 31, 2023, retail commercial space totaled 477,464 m², representing a solid footprint for our travel retail operations – and all the more impressive if counting also the commercial F&B areas. Within our total concession portfolio, 25 % have a remain- ing life-time of ten years or more, 26 % have between six and nine years, another 28 % have three to five years and the final 21 % of our contracts have a remaining duration of one to two years. That 51 % of contracts have a life-time of over six years, is testimony to the strong resilience of the Avolta business. On average, Avolta renews existing con- tracts, representing between 10 % and 15 % of our sales, each year, over and above new contract additions. The company’s concession portfolio is highly diversified and well balanced across emerging and mature markets in all six continents. The largest concession accounts for less than 4 % of sales, while the 10 biggest concessions represent less than 18 %, thus reducing cluster risk and ex- posure to impacts in any single market or operation. Financial discipline to focus on investment returns Avolta has tight financial discipline when evaluating new projects and opportunities. This has repeatedly proven its value during challenging business environments as it al- lows Avolta to optimize costs and flexible investments. Projects are analyzed individually on a commercial and fi- nancial basis. The many aspects of a project being as- sessed include development potential and analyzing initial investment requirements, as well as the expected devel- opment of traveler numbers and profile perspectives. Through a strict evaluation of these criteria and our disci- plined approach on returns, we ensure that our conces- sion portfolio remains of the highest quality and that each concession offers attractive returns for the company. This methodology is applied to all project types, irrespective of whether we participate in a tender process, engage in di- rect negotiations with concession owners or perform ac- quisitions. As part of «Destination 2027», we have put active portfo- lio management at the core of our long-term strategy fol- lowing the principle of full profitability evaluation for each concession contract and, at the appropriate times, rene- gotiation or exit from any concession that does not match our concession specific objectives. We continuously up- date and review our portfolio, including post-opening per- formances. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 86/336 Avolta strives to create sustainable value for its shareholders. In 2023, we successfully com- pleted the integration with Autogrill. With our new corporate name Avolta, our reinforced One Company, One Team is highly focused on our Destination 2027 strategy, revolutionizing the Travel Experience for our customers globally. – s r o t s e v n I e g d e l w o n k r e m o t s u c d n a g n i r e f f o d e t a r g e t n i , e l a c s g n i d a e l h t i w n i w o t d e n o i t i s o p s i a t l o v A , t c n i t s i d y l e u q i n U Shareholder Structure Daily Average Volume 22.17 % Edizione 76.2 66.5 64.0 60.2 46.0 8.72 % Advent International Corp. 4.94 % Richemont 4.87 % Alibaba Group Holding Ltd 50.88 % Other Shareholders 3.93 % Black Rock, Inc. 4.49 % Qatar Holding LLC 19 20 21 22 23 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 87/336 Avolta strives to create sustainable value for its shareholders. In 2023, we successfully com- pleted the integration with Autogrill. With our new corporate name Avolta, our reinforced One Company, One Team is highly focused on our Destination 2027 strategy, revolutionizing the Travel Experience for our customers globally. – s r o t s e v n I d e n o i t i s o p s i a t l o v A i , t c n i t s d y e u q n U l i d e t a r g e t n i , l e a c s g n d a e i l h t i i w n w o t l e g d e w o n k r e m o t s u c d n a g n i r e f f o Shareholder Structure Daily Average Volume 22.17 % Edizione 76.2 66.5 64.0 60.2 46.0 8.72 % Advent International Corp. 4.94 % Richemont 4.87 % Alibaba Group Holding Ltd 19 20 21 22 23 50.88 % Other Shareholders 3.93 % Black Rock, Inc. 4.49 % Qatar Holding LLC 140 120 100 80 60 40 20 0 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 88/336 With a footprint that includes 73 countries, Avolta operates over 5,100 outlets and addresses 2.3 billion passengers across over 1,000 airports, motorways, cruise liners & fer- ries, seaports, railway stations and other locations. Our unique value proposition for travelers has been further en- hanced by a new focus on innovative store concepts, hybrid offerings, data-driven customer insights and digitalization, thus benefitting customer conversion and spending. This continues to contribute positively to our strong industry fundamentals of travel retail and F&B – with secular long- term global passenger growth fueled by an increasingly af- fluent and expanding population across many countries. Unique combination of Travel Retail and F&B. From an organic growth standpoint, our strategic expan- sion continues with a keen focus on the highly attractive and resilient North American market. At the same time, we are enhancing our dedicated strategy for the Asia-Pacific region where we are bolstering our team to capture the growth driven by the continued recovery of the Chinese travelers and the rising trend of domestic, intra-regional and international travel among other Asian nationalities. In Europe, the Middle East, Africa and Latin America, Avolta continues to fine-tune its business development approach with clearly defined priorities and goals. Our Destination 2027 strategy targets mid-term annual organic turnover growth that outpaces passenger growth in the locations operated by Avolta. Over and above this, the fragmented nature of the industry presents opportunities for selective bolt-on M&A with Avolta aligning seamlessly to its new cap- ital allocation policy as defined in 2023 (see dedicated paragraph below). Resilient business Despite the transient challenges faced by our industry and Avolta, we maintain a strong belief that travel retail and F&B is a resilient industry. This is underpinned by the steady in- crease in global passengers – as corroborated by external aviation industry sources – and the continued recovery mo- mentum observed through to the end of 2023, as well as the willingness of people to travel and prioritize travel-re- lated spending. Travel retail remains a central component of the overall travel experience, and customers continue to be drawn towards attractive product assortments, hybrid offerings and unique travel experiences. Future F&B growth is poised to be supported by favorable industry dynamics including limited in-flight offerings, a growing trend of trav- elers opting for pre-boarding «grab and go» services, in- creasing interest in regional cuisine and demand for new experiences and concepts. Sustainable profits and strong cash flow generation Avolta is committed to delivering turnover growth, im- proved CORE EBITDA margins and sustainable cash flow generation and evolve our ESG performance, in line with our mid-term outlook provided to the market. Our focus on enhanced profitability is rooted in a zero-based budgeting approach ensuring resources are allocated to activities that make the most impact for the customer, while leveraging technology to streamline work and operations. In line with this budgeting discipline, Avolta actively and systematically manages its concessions portfolio, prioritizing profitability and cash flow contributions. We expect ongoing medium- term improvements in CORE EBITDA gross margins. Having generated CHF 30 million in synergies in 2023, ahead of ex- pectations, we project an additional CHF 55 million in syn- ergies in 2024, achieving the full run-rate of CHF 85 million one year earlier than we expected at the time of announc- ing the Dufry/Autogrill combination. 2023 had, and 2024 will see integration-related costs of CHF 25 million annually. Our continuously improving profitability is driving a resil- ient, sustainable Equity Free Cash Flow (EFCF) conversion from CORE EBITDA. Avolta systematically manages its concession portfolio prioritizing profitability and cash flow contribution. Avolta share price and trading volume Share price in CHF Trading volume millions of CHF 800 700 600 500 400 300 200 100 0 1/22 2/22 3/22 4/22 5/22 6/22 7/22 8/22 9/22 10/22 11/22 12/22 1/23 2/23 3/23 4/23 5/23 6/23 7/23 8/23 9/23 10/23 11/23 12/23 Avolta SPI Volume (all exchanges) Source: Bloomberg Note: SPI Index has been rebased to Avolta share price Market Capitalization and Free Float Billions of CHF 4.9 4.5 2.8 2.2 41 2.9 3.5 2.4 5.0 3.0 2019 2020 2021 2022 2023 Free Float Average Market Capitalization Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 89/336 Avolta share price and trading volume Share price in CHF Trading volume millions of CHF 140 120 100 80 60 40 20 0 800 700 600 500 400 300 200 100 0 1/22 2/22 3/22 4/22 5/22 6/22 7/22 8/22 9/22 10/22 11/22 12/22 1/23 2/23 3/23 4/23 5/23 6/23 7/23 8/23 9/23 10/23 11/23 12/23 Avolta SPI Volume (all exchanges) Source: Bloomberg Note: SPI Index has been rebased to Avolta share price Market Capitalization and Free Float Billions of CHF 4.9 4.5 2.8 2.2 4.1 2.9 3.5 2.4 5.0 3.0 2019 2020 2021 2022 2023 Free Float Average Market Capitalization Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 90/336 Sustainable growth strategy focused on organic growth boosted by selected M&A. Over a longer-term perspective, our travel retail business has consistently pursued a strategy focused on growth and cash flow generation. We have a demonstrated track re- cord of organic growth aligned with regional passenger trends and passenger mix with overall growth boosted by selective M&A. A key highlight in 2023 was the successful completion of the combination with Autogrill, significantly reinforcing Avolta’s leading position across the global travel retail and F&B industry. Capital allocation In 2023, aligned with its expected strong EFCF projections, Avolta updated its capital allocation policy. Over the me- dium-term, Avolta’s aim is to align continued balance sheet deleverage with shareholder returns, all the while maintain- ing some flexibility for organic growth and smaller bolt-on acquisitions. Our medium-term Destination 2027 strategy is based on a target leverage of 1.5 – 2.0x net debt / CORE EBITDA with near-term flexibility of up to 2.5x for relevant business development or bolt-on M&A opportunities. We plan to allocate two-thirds of company EFCF to funding de- leverage and external growth, while returning one-third to shareholders under our newly formulated progressive div- idend policy. For 2023, this equates to a proposed dividend of CHF 0.70 per share, subject to shareholder approval at the AGM on 15 May 2024. Beyond capital allocation, Avolta remains committed to advancing its ESG commitments and engagement for all stakeholders. Member of the SMI MID (SMIM) Index With a market capitalization of CHF 5,084.5 million as per December 31, 2023, Avolta is part of the SMI MID (SMIM) Index on the SIX Swiss Exchange. This index includes the 30 largest publicly listed companies in Switzerland not al- ready represented in the Swiss Market Index (SMI). Avol- ta’s trading volume in 2023 remained healthy, with an av- erage daily trading volume of approximately CHF 60.2 million. The SIX Swiss Exchange remains an important trading platform, where the average daily volume of Avolta shares reached CHF 19.2 million in 2023. Avolta’s trading volumes are mainly concentrated at the SIX 31.8 % and BATS Chi-X OTC 51.5 % platforms. Following the successful closing of the Autogrill transac- tion in February 2023, Edizione became Avolta’s largest shareholder (22.17 % as per December 31, 2023) joining the company’s other longstanding shareholders who contin- ued to provide unwavering support. Further most impor- tant participations (>3 %) as of December 31, 2023, in- cluded Advent International Corp., Qatar Holding LLC Alibaba Group Holding Ltd, Richemont and BlackRock Inc., together representing 49.1 % of our share capital. Strong investment track record for bondholders Avolta has been a well-established investment opportu- nity in the bond market since our first Senior Notes issu- ance in 2012. On the one hand, the bond market repre- sents an important source of financing for the company, while on the other hand, our low operating leverage as well as the strong and resilient cash flow generation capabili- ties are characteristics welcomed by the fixed income market. Long-term financing strengthened. In December 2022 Avolta had successfully refinanced its main bank credit facilities. A new EUR 2,085 million Re- volving Credit Facility (RCF) replaced the EUR 1,300 million RCF and the USD 550 million Term Loan with maturity in December 2027 compared to the previous maturity date in November 2024. In April 2023, the EUR 2,085 million RCF has been in- creased by EUR 180 million, in June 2023 by EUR 410 mil- lion and in September 2023 by EUR 75 million to a new to- tal amount of EUR 2,750 million. Currently, Avolta holds a (BB) rating with Stable Outlook by Standard & Poors and a (Ba3) rating with Positive Outlook by Moody’s. Both rating agencies have upgraded the credit ratings in the reporting period 2023. Fair and comprehensive market communication Avolta is committed to open and transparent communica- tions with the financial market as we present our equity story and investment opportunities. This includes a con- stant, open dialogue with investors, analysts and the me- dia through direct phone and email exchanges, regular roadshows and conference attendance, one-to-one meet- ings and dedicated investor days, either in person or virtu- ally. Senior management actively engage in presenting and discussing our financial performance on a regular basis, and we provide the financial community and media with detailed reports and information through press and ana- lyst conferences, conference calls and webcasts. In this context, Avolta consistently releases quarterly trading up- date statements for Q1 and Q3, along with publishing full financial results for the half-year and full-year periods. As part of our 2023 Investor Relations activities, and con- sidering the Autogrill related MTO, senior management and the Investor Relations team participated in 9 road- shows and 12 conferences in Europe, North America and Asia to meet investors directly or virtually. During this time, we met well over 564 investors in one-to-one or group meetings and many more in presentations. Additionally, the Investor Relations team answered 626 calls and emails in 2023, resulting in a total of 1,190 contacts with investors and analysts. For contact details of Investor Relations, please see page 335 of this Annual Report. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 91/336 Currently, Avolta holds a (BB) rating with Stable Outlook by Standard & Poors and a (Ba3) rating with Positive Outlook by Moody’s. Both rating agencies have upgraded the credit ratings in the reporting period 2023. Fair and comprehensive market communication Avolta is committed to open and transparent communica- tions with the financial market as we present our equity story and investment opportunities. This includes a con- stant, open dialogue with investors, analysts and the me- dia through direct phone and email exchanges, regular roadshows and conference attendance, one-to-one meet- ings and dedicated investor days, either in person or virtu- ally. Senior management actively engage in presenting and discussing our financial performance on a regular basis, and we provide the financial community and media with detailed reports and information through press and ana- lyst conferences, conference calls and webcasts. In this context, Avolta consistently releases quarterly trading up- date statements for Q1 and Q3, along with publishing full financial results for the half-year and full-year periods. As part of our 2023 Investor Relations activities, and con- sidering the Autogrill related MTO, senior management and the Investor Relations team participated in 9 road- shows and 12 conferences in Europe, North America and Asia to meet investors directly or virtually. During this time, we met well over 564 investors in one-to-one or group meetings and many more in presentations. Additionally, the Investor Relations team answered 626 calls and emails in 2023, resulting in a total of 1,190 contacts with investors and analysts. For contact details of Investor Relations, please see page 335 of this Annual Report. Sustainable growth strategy focused on organic growth boosted by selected M&A. Over a longer-term perspective, our travel retail business volumes are mainly concentrated at the SIX 31.8 % and has consistently pursued a strategy focused on growth and BATS Chi-X OTC 51.5 % platforms. cash flow generation. We have a demonstrated track re- cord of organic growth aligned with regional passenger Following the successful closing of the Autogrill transac- trends and passenger mix with overall growth boosted by tion in February 2023, Edizione became Avolta’s largest selective M&A. A key highlight in 2023 was the successful shareholder (22.17 % as per December 31, 2023) joining the completion of the combination with Autogrill, significantly company’s other longstanding shareholders who contin- reinforcing Avolta’s leading position across the global travel ued to provide unwavering support. Further most impor- retail and F&B industry. Capital allocation tant participations (>3 %) as of December 31, 2023, in- cluded Advent International Corp., Qatar Holding LLC Alibaba Group Holding Ltd, Richemont and BlackRock In 2023, aligned with its expected strong EFCF projections, Inc., together representing 49.1 % of our share capital. Avolta updated its capital allocation policy. Over the me- dium-term, Avolta’s aim is to align continued balance sheet Strong investment track record for bondholders deleverage with shareholder returns, all the while maintain- Avolta has been a well-established investment opportu- ing some flexibility for organic growth and smaller bolt-on nity in the bond market since our first Senior Notes issu- acquisitions. Our medium-term Destination 2027 strategy ance in 2012. On the one hand, the bond market repre- is based on a target leverage of 1.5 – 2.0x net debt / CORE sents an important source of financing for the company, EBITDA with near-term flexibility of up to 2.5x for relevant while on the other hand, our low operating leverage as well business development or bolt-on M&A opportunities. We as the strong and resilient cash flow generation capabili- plan to allocate two-thirds of company EFCF to funding de- ties are characteristics welcomed by the fixed income leverage and external growth, while returning one-third to market. shareholders under our newly formulated progressive div- idend policy. For 2023, this equates to a proposed dividend of CHF 0.70 per share, subject to shareholder approval at the AGM on 15 May 2024. Beyond capital allocation, Avolta remains committed to advancing its ESG commitments and engagement for all stakeholders. Long-term financing strengthened. Member of the SMI MID (SMIM) Index In December 2022 Avolta had successfully refinanced its main bank credit facilities. A new EUR 2,085 million Re- With a market capitalization of CHF 5,084.5 million as per volving Credit Facility (RCF) replaced the EUR 1,300 million December 31, 2023, Avolta is part of the SMI MID (SMIM) RCF and the USD 550 million Term Loan with maturity in Index on the SIX Swiss Exchange. This index includes the December 2027 compared to the previous maturity date 30 largest publicly listed companies in Switzerland not al- in November 2024. ready represented in the Swiss Market Index (SMI). Avol- ta’s trading volume in 2023 remained healthy, with an av- In April 2023, the EUR 2,085 million RCF has been in- erage daily trading volume of approximately CHF 60.2 creased by EUR 180 million, in June 2023 by EUR 410 mil- million. The SIX Swiss Exchange remains an important lion and in September 2023 by EUR 75 million to a new to- trading platform, where the average daily volume of Avolta tal amount of EUR 2,750 million. shares reached CHF 19.2 million in 2023. Avolta’s trading Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 92/336 Avolta’s global footprint of over 5,100 travel retail and F&B outlets offers suppliers a unique sales and brand exposure opportunity to a worldwide cus- tomer base. e r u s o p x e r e m o t s u c – s r e i l p p u S e u q i n u m o r f g n i t t i f e n e B 1,000 Avolta works with more than 1,000 of the most renowned global and local brands to make travelers happier. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 93/336 Avolta’s global footprint of over 5,100 travel retail and F&B outlets offers suppliers a unique sales and brand exposure opportunity to a worldwide cus- tomer base. – s r e i l p p u S e r u s o p x e r e m o t s u c i e u q n u m o r f g n i t t i f e n e B 1,000 Avolta works with more than 1,000 of the most renowned global and local brands to make travelers happier. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 94/336 Brand Universe Brand Universe Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 95/336 Brand Universe Brand Universe Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 96/336 Avolta’s network of over 5,100 shops and outlets across 73 countries caters to both domestic and international travelers with dedicated duty-paid and duty-free retail formats as well as a variety of F&B concepts offering a wide array of local and global culinary preferences and cultural eating habits. With this geographically diverse footprint and as the only truly global travel experience player, Avolta offers its brand partners and suppliers a potential of 2.3 billion personal cus- tomer contacts through which they can drive sales and in- crease brand value. Resilience of travel retail and F&B channel confirmed Suppliers benefit from the customers’ confirmed propensity to travel. Ongoing growth in passenger numbers and higher spending versus pre-pandemic levels in the majority of loca- tions emphasize the attractiveness of this channel and its unique access to a captive and affluent customer commu- nity and an attractive access to several customer engage- ment touchpoints. In 2023, sales have continued to increase at high growth rates and the split by categories within the business lines has further normalized towards historical level. Key roles for experiences, healthy and well-being products Market research, through online surveys amongst our cus- tomers and on social media, conducted on a regular basis in 2023 confirmed the ongoing importance of experiences as well as premium offers and sustainable well-being products supporting a healthier lifestyle. Novelties, travel exclusives and unique promotions continue to form very attractive propositions – both in travel retail and F&B. Close collaboration with global and local suppliers. To this purpose, Avolta collaborates closely with its global brand partners and food and beverage vendors. The com- pany also partners with a wide array of local suppliers to source fresh food items as well as traditional local retail prod- ucts transmitting the essential sense of place. Avolta supports the collaboration with suppliers through strategic initiatives, marketing campaigns, global promotions or product launch opportunities. Equally important is the on- going evolution of the commercial areas with new, attractive and hybrid design concepts for both shopping and dining formats. Special focus is given to an increased flexibility in shop layouts and assortment renewals, along with an em- phasis on sustainability aspects when it comes to new shop developments or refurbishments. Attractive access to customer engagement touchpoints Avolta operates a variety of on-site and online customer en- gagement touchpoints, which brand partners can leverage to present their product offering to travelers globally or at defined locations. Suppliers leverage markting channels. To secure a cohesive and seamless customer communica- tion that delivers an impactful experience, brand partners are offered a complete advertising package, called «Emo- tion+», which includes all proprietary customer engagement channels of Avolta. Emotion+ includes on-site activities such as double placements, brand ambassadors, digital signage presence as well as the pre-order and loyalty program chan- nels and social media. In 2023, 217 of these packages have been sold to suppliers, now reaching a total of 355 since in- ception, with over 125 brands participating and generating a customer exposure of 840 million travelers. Suppliers benefit from 2.3 billion potential customer contacts to drive sales and brand awareness. Avolta’s network of over 5,100 shops and outlets across 73 pany also partners with a wide array of local suppliers to countries caters to both domestic and international travelers source fresh food items as well as traditional local retail prod- with dedicated duty-paid and duty-free retail formats as well ucts transmitting the essential sense of place. as a variety of F&B concepts offering a wide array of local and global culinary preferences and cultural eating habits. Avolta supports the collaboration with suppliers through With this geographically diverse footprint and as the only or product launch opportunities. Equally important is the on- truly global travel experience player, Avolta offers its brand going evolution of the commercial areas with new, attractive partners and suppliers a potential of 2.3 billion personal cus- and hybrid design concepts for both shopping and dining tomer contacts through which they can drive sales and in- formats. Special focus is given to an increased flexibility in strategic initiatives, marketing campaigns, global promotions crease brand value. shop layouts and assortment renewals, along with an em- phasis on sustainability aspects when it comes to new shop Resilience of travel retail and F&B channel confirmed developments or refurbishments. Suppliers benefit from the customers’ confirmed propensity to travel. Ongoing growth in passenger numbers and higher Attractive access to customer engagement spending versus pre-pandemic levels in the majority of loca- touchpoints tions emphasize the attractiveness of this channel and its Avolta operates a variety of on-site and online customer en- unique access to a captive and affluent customer commu- gagement touchpoints, which brand partners can leverage nity and an attractive access to several customer engage- to present their product offering to travelers globally or at ment touchpoints. In 2023, sales have continued to increase defined locations. at high growth rates and the split by categories within the business lines has further normalized towards historical level. Key roles for experiences, healthy and well-being products Market research, through online surveys amongst our cus- Suppliers leverage markting channels. tomers and on social media, conducted on a regular basis in To secure a cohesive and seamless customer communica- 2023 confirmed the ongoing importance of experiences as tion that delivers an impactful experience, brand partners well as premium offers and sustainable well-being products are offered a complete advertising package, called «Emo- supporting a healthier lifestyle. Novelties, travel exclusives tion+», which includes all proprietary customer engagement and unique promotions continue to form very attractive channels of Avolta. Emotion+ includes on-site activities such propositions – both in travel retail and F&B. as double placements, brand ambassadors, digital signage presence as well as the pre-order and loyalty program chan- nels and social media. In 2023, 217 of these packages have been sold to suppliers, now reaching a total of 355 since in- ception, with over 125 brands participating and generating a customer exposure of 840 million travelers. Close collaboration with global and local suppliers. To this purpose, Avolta collaborates closely with its global brand partners and food and beverage vendors. The com- Suppliers benefit from 2.3 billion potential customer contacts to drive sales and brand awareness. , t n e m n o r i v n E e c n a n r e v o G 3 2 0 2 t r o p e R d n a l i a c o S Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 98/336 ESG – a key pillar of Avolta’s strategy Avolta’s ESG Strategy is an inherent part of the company strategy «Destination 2027» and contributes to the delivery of its financial and non-financial goals. In 2023, we have further evolved the ESG strategy to enhance its relevance and include the full new company scope resulting from the completed business combination between Dufry and Autogrill and their former individual ESG strategies. We have evolved our materiality assessment developing a Double Materiality Matrix, which covers the material topics of an enlarged stakeholder eco-system and business processes, thus creating the base for our ESG Strategy House and its four new ESG focus areas: Create Sustainable Travel Experiences, Respect Our Planet, Empower Our People, Engage Local Communities. Overview of Avolta’s Sustainability Journey – Avolta receives SBTi validation for its Scope 1, 2 & 3 emis- sion reduction targets (base 2019) – 20 % electric energy covered by renew- able energy – First TCFD Report 2022, published in – Second DE & I survey executed, covering all Avolta operations worldwide – Updated Code of Ethics – Disclosure of Avolta Code of Conduct – Disclosure of Avolta´s ESG Strategy – First materiality assessment – Joined the UN Global the first quarter 2023 Compact – Definition and disclo- – Equal Salary Certifi- – Avolta starts report- sure of materiality cation launched in ing on GHG emis- matrix Switzerland sions 2016 2018 2020 2022 2017 2019 2021 2023 – Avolta publishes first – Avolta launches – Avolta (base 2019) – ESG governance GRI report second recertifica- commits to establish enhanced with dedi- SBTi emission reduc- cated Board ESG – Avolta Supplier Code of Conduct pub- tion of Supplier Code of Conduct tion targets lished and first certi- – ESG governance – Listed in the SXI fication process enhanced with Lead Sustainability 25 launched Independent Direc- tor supervising ESG strategy implemen- tation index of the SIX Swiss Exchange – HR Policy published – Disclosure of Sus- tainable Manage- ment Guidelines – First dedicated DE & I survey, reach- ing over 70 % of head-count Committee and appointment of Chief Public Affairs & ESG Officer – Double Materiality Matrix and evolved ESG Strategy House implemented fully reflecting new com- pany scope – TCFD Report exten- ded covering full company scope – Electricity sourcing from renewable ener- gies increased to 40 % – Avolta Supplier Code of Conduct recer- tification including F&B suppliers launched globally ESG – a key pillar of Avolta’s strategy Avolta’s ESG Strategy is an inherent part of the company strategy «Destination 2027» and contributes to the delivery of its financial and non-financial goals. In 2023, we have further evolved the ESG strategy to enhance its relevance and include the full new company scope resulting from the completed business combination between Dufry and Autogrill and their former individual ESG strategies. We have evolved our materiality assessment developing a Double Materiality Matrix, which covers the material topics of an enlarged stakeholder eco-system and business processes, thus creating the base for our ESG Strategy House and its four new ESG focus areas: Create Sustainable Travel Experiences, Respect Our Planet, Empower Our People, Engage Local Communities. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 99/336 Overview of Avolta’s Sustainability Journey – Updated Code of Ethics – Disclosure of Avolta Code of Conduct – Disclosure of Avolta´s ESG Strategy – Joined the UN Global Compact – First materiality assessment – Definition and disclo- sure of materiality matrix – Equal Salary Certifi- cation launched in Switzerland – Avolta starts report- ing on GHG emis- sions – Avolta receives SBTi validation for its Scope 1, 2 & 3 emis- sion reduction targets (base 2019) – 20 % electric energy covered by renew- able energy – First TCFD Report 2022, published in the first quarter 2023 – Second DE & I survey executed, covering all Avolta operations worldwide 2016 2018 2020 2022 2017 2019 2021 2023 – Avolta publishes first – Avolta launches – Avolta (base 2019) – ESG governance GRI report – Avolta Supplier Code of Conduct pub- lished and first certi- fication process launched second recertifica- tion of Supplier Code of Conduct – ESG governance enhanced with Lead Independent Direc- tor supervising ESG strategy implemen- tation commits to establish SBTi emission reduc- tion targets – Listed in the SXI Sustainability 25 index of the SIX Swiss Exchange – HR Policy published – Disclosure of Sus- tainable Manage- ment Guidelines – First dedicated DE & I survey, reach- ing over 70 % of head-count enhanced with dedi- cated Board ESG Committee and appointment of Chief Public Affairs & ESG Officer – Double Materiality Matrix and evolved ESG Strategy House implemented fully reflecting new com- pany scope – TCFD Report exten- ded covering full company scope – Electricity sourcing from renewable ener- gies increased to 40 % – Avolta Supplier Code of Conduct recer- tification including F&B suppliers launched globally Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 100/336 ESG as core pillar of our Destination 2027 company strategy Avolta embraces a holistic approach to Environmental, Social and Governance values and is deeply committed to sustainability on a global and local level. The compa- ny’s ESG strategy is an integral part of its Destination 2027 strategy. About Avolta’s ESG Report The Avolta ESG Report includes also the GRI Content Index and the ESG Report Annex as well as the TCFD Report and complements the information of the Annual Report (includ- ing the Corporate Governance Report (page 279) and the al Diversific n a ti o 1. Tra v e l E 3. Operatio x p e r ience Revolu ti o n hic p a r g o e G . 2 Reimagined Travel Retail Food & Beverage Traveler Digital Point of Sale E n d-to-End En g a g e m e nt 4. ESG n a l I m p r o v e m e n t C u l t u r e Avolta is a global travel experience player active in the travel Remuneration Report (page 311). All these reports and doc- retail and F&B industry and grew to its current scope uments mentioned are also available online as individual through the business combination of the legacy groups files on our corporate website: www.avoltaworld.com. Dufry and Autogrill completed in 2023. Avolta operates over 5,100 duty-free and duty-paid shops and restaurants Avolta published its first TCFD Report in early 2023 based in over 1,000 locations such as airports, cruise liners & fer- on the business year 2022 and has now expanded the ries, seaports, motorways, railway stations and downtown TCFD Report 2023 to fully cover the scope of the com- tourist areas. In 2023, we employed 68,459 team members bined entity. The TCFD Report takes into account the 2021 (FTEs) across 73 countries. Avolta is part of the Swiss Mar- «Recommendations of the Task Force on Climate-related ket Index MID (SMIM), has a balanced mix of large and small Financial Disclosures» and the «Guidance on Metrics, Tar- globally diversified shareholders and a free float of 71.2 %. gets and Transition Plans». This is another step forward in A full description of Avolta’s business model and strategy is transparency and disclosure in a clear, comparable and available on page 28 of the Annual Report 2023. The report consistent manner, by showing detailed information about is further complemented by several strategy documents, the risks and opportunities in our business that are trig- policies and guidelines mentioned also in the ESG Report, gered by climate change. such as the ESG Strategy, the Human Resources Policy and the Environmental Management Guidelines. Swiss Transparency Requirements on Non-Financial Matters The report has been prepared in accordance with the GRI The Avolta ESG Report 2023 (which includes the ESG Re- Universal Standards 2021 and covers our environmental, port 2023 Annex on page 337 ff. of the Annual Report) and social and governance (ESG) activities, performance and the TCFD Report on page 337 ff. (together, the 2023 Non- approach for the year 2023 focusing on the material mat- Financial Reporting) have been prepared in accordance ters determined to be of greatest relevance for Avolta and with the requirements regarding transparency on non-fi- its stakeholders. nancial matters pursuant to article 964a et seqq. of the Swiss Code of Obligations (SCO). The 2023 Non-Financial For an easier comparison, we continue to include in the Reporting was approved by the Board of Directors and will ESG Report the UN Sustainability Development Goals be submitted for shareholder approval as a separate (SDGs) and information on the respective GRI indicators agenda item at Avolta’s Annual General Meeting 2024 in and SDG goals, which Avolta covers in the corresponding accordance with the requirements of Art. 964c SCO. The sections of this report, thus enabling the reader to obtain a TCFD Report can be found on page 337 ff. of the Annual better and more transparent understanding of our strategy Report. and ESG successes. Scope Avolta has been – through its legacy companies Dufry and For the general profile and most of the GRI indicators, the Autogrill – a signatory member of the UN Global Compact information reported is global and relevant to the whole and prepared Progress Reports ever since 2020 and 2022 company. For staff-related indicators information follows a respectively. Leveraging on this heritage, in February 2024 similar structure as the segmentation used in Avolta’s fi- Avolta confirmed the support to the UN Global Compact nancial report. More information about each region may becoming a new signatory member. be found on pages 56 – 71 of the Annual Report 2023. Should you have any comments about the content of the The Avolta ESG Report is divided into two main sections: report or want to know more about Avolta’s ESG engage- – The ESG Report 2023 – included in the annual report – ment, please email us to: sustainability@avolta.net. gives the reader a wider view of Avolta, its relationship with its main stakeholders as well as its ESG strategy and how this is embedded in the business strategy. – The ESG Report 2023 Annex contains information pre- sented in several tables with quantitative and qualitative indicators as per the GRI Universal Standard indications and is annexed to the Annual Report 2023. Both docu- ments present data as of December 31, 2023. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 101/336 ESG as core pillar of our Destination 2027 company strategy hic p a r g o e G . 2 al Diversific n a ti o 1. Tra v e l E 3. Operatio x p e r ience Revolu n a l I m ti o n p r o v e m e n t C u l t u r e Reimagined Travel Retail Food & Beverage Traveler Digital Point of Sale E n d-to-End En g a g e m e nt 4. ESG Avolta embraces a holistic approach to Environmental, Social and Governance values and is deeply committed to sustainability on a global and local level. The compa- ny’s ESG strategy is an integral part of its Destination 2027 strategy. About Avolta’s ESG Report Avolta is a global travel experience player active in the travel retail and F&B industry and grew to its current scope through the business combination of the legacy groups Dufry and Autogrill completed in 2023. Avolta operates over 5,100 duty-free and duty-paid shops and restaurants in over 1,000 locations such as airports, cruise liners & fer- ries, seaports, motorways, railway stations and downtown tourist areas. In 2023, we employed 68,459 team members (FTEs) across 73 countries. Avolta is part of the Swiss Mar- ket Index MID (SMIM), has a balanced mix of large and small globally diversified shareholders and a free float of 71.2 %. A full description of Avolta’s business model and strategy is available on page 28 of the Annual Report 2023. The report is further complemented by several strategy documents, policies and guidelines mentioned also in the ESG Report, such as the ESG Strategy, the Human Resources Policy and the Environmental Management Guidelines. The report has been prepared in accordance with the GRI Universal Standards 2021 and covers our environmental, social and governance (ESG) activities, performance and approach for the year 2023 focusing on the material mat- ters determined to be of greatest relevance for Avolta and its stakeholders. For an easier comparison, we continue to include in the ESG Report the UN Sustainability Development Goals (SDGs) and information on the respective GRI indicators and SDG goals, which Avolta covers in the corresponding sections of this report, thus enabling the reader to obtain a better and more transparent understanding of our strategy and ESG successes. Avolta has been – through its legacy companies Dufry and Autogrill – a signatory member of the UN Global Compact and prepared Progress Reports ever since 2020 and 2022 respectively. Leveraging on this heritage, in February 2024 Avolta confirmed the support to the UN Global Compact becoming a new signatory member. The Avolta ESG Report is divided into two main sections: – The ESG Report 2023 – included in the annual report – gives the reader a wider view of Avolta, its relationship with its main stakeholders as well as its ESG strategy and how this is embedded in the business strategy. – The ESG Report 2023 Annex contains information pre- sented in several tables with quantitative and qualitative indicators as per the GRI Universal Standard indications and is annexed to the Annual Report 2023. Both docu- ments present data as of December 31, 2023. The Avolta ESG Report includes also the GRI Content Index and the ESG Report Annex as well as the TCFD Report and complements the information of the Annual Report (includ- ing the Corporate Governance Report (page 279) and the Remuneration Report (page 311). All these reports and doc- uments mentioned are also available online as individual files on our corporate website: www.avoltaworld.com. Avolta published its first TCFD Report in early 2023 based on the business year 2022 and has now expanded the TCFD Report 2023 to fully cover the scope of the com- bined entity. The TCFD Report takes into account the 2021 «Recommendations of the Task Force on Climate-related Financial Disclosures» and the «Guidance on Metrics, Tar- gets and Transition Plans». This is another step forward in transparency and disclosure in a clear, comparable and consistent manner, by showing detailed information about the risks and opportunities in our business that are trig- gered by climate change. Swiss Transparency Requirements on Non-Financial Matters The Avolta ESG Report 2023 (which includes the ESG Re- port 2023 Annex on page 337 ff. of the Annual Report) and the TCFD Report on page 337 ff. (together, the 2023 Non- Financial Reporting) have been prepared in accordance with the requirements regarding transparency on non-fi- nancial matters pursuant to article 964a et seqq. of the Swiss Code of Obligations (SCO). The 2023 Non-Financial Reporting was approved by the Board of Directors and will be submitted for shareholder approval as a separate agenda item at Avolta’s Annual General Meeting 2024 in accordance with the requirements of Art. 964c SCO. The TCFD Report can be found on page 337 ff. of the Annual Report. Scope For the general profile and most of the GRI indicators, the information reported is global and relevant to the whole company. For staff-related indicators information follows a similar structure as the segmentation used in Avolta’s fi- nancial report. More information about each region may be found on pages 56 – 71 of the Annual Report 2023. Should you have any comments about the content of the report or want to know more about Avolta’s ESG engage- ment, please email us to: sustainability@avolta.net. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 102/336 Data comparability & measurability of initiative effectiveness Due to the transformative business combination between Dufry and Autogrill and the integration of the two compa- nies in 2023, comparability of the ESG-related data is lim- ited, as 2023 is considered a transition year and will be- come a new «base year» for further improvements. This also influences the descriptions and comparability of the effectiveness of the ESG initiatives implemented. The company will include the related information in more depth going forward, starting with the business year 2024. Nevertheless, where possible, the company discloses im- provements and related data showing the initiatives’ effec- tiveness already for the business year 2023. Such im- provements are listed in full on pages 106 – 107 of this report and include amongst others: – Improved extension (on a like for like basis) of the Avolta Supplier Code of Conduct recertification process and ad- ditional extension of the recertification process to the F&B business; see details on page 117 of the ESG Report – Improvement of coverage of electricity consumption through renewable energy; see details on page 125 – 126 of the ESG Report – First disclosure of total amount of donations including split by type; see details on page 143 of the ESG Report – Increased reach of dedicated internal training of staff for responsible retailing – Extended portfolio of sustainable products in F&B; see details on pages 117 – 119 of the ESG Report. ESG Governance & Compliance Avolta´s ESG Strategy is supervised by the Board of Direc- tors’ dedicated ESG Committee chaired by the Lead Inde- pendent Director. The ESG Committee is informed on the progress of Avolta’s ESG engagement on a quarterly basis. The operational evolution and implementation of the ESG strategy is managed by the dedicated ESG department, headed by the Chief Public Affairs & ESG Officer, who is a member of the Global Executive Committee and reports to the CEO. A detailed description of our ESG Strategy is avail- able on the Avolta website: Our Impact | Avolta New Avolta Double Materiality Matrix Avolta’s Materiality Matrix underwent a complete review in the context of the business combination of Dufry and Au- togrill in 2023 and is now structured following the Double Materiality approach. This approach combines two perspectives: – Impact Materiality (“inside-out”): considering the impacts (actual and potential, positive and negative) that Avolta generates on economy, environment and people; – Financial Materiality (“outside-in”): identifying risks and opportunities that might positively or negatively influence the company’s development, performance and position- ing. The materiality assessment started with a context analysis to identify the relevant material matters for Avolta in light of its business activities and the expectations of the compa- ny’s main stakeholders (investors, concession partners, customers, peers, brand partners and employees), thus de- fining the boundaries of the company’s scope of ESG ac- countability and range of initiatives. In particular, both inter- nal and external documentation was analyzed, such as peers’ and partners’ publicly available reporting, publica- tions from industry associations and sector trends, ESG rat- ing requirements as well as both public and internal surveys conducted on customers and employees. 22 material mat- ters emerged from the analysis which were then assessed in one-to-one interviews with the global ESG team, the members of the Global Executive Committee and of the Board of Directors. The stakeholders were asked to assess the significance of each potential material matter consider- ing both the related impacts generated (Impact Materiality) and risks and opportunities that might influence the com- pany’s performance (Financial Materiality). In the evalua- tion, a medium term time horizon of five years was adopted. Following a prioritization approach and the application of a materiality threshold, a final list of 13 material matters re- sulted for Avolta’s new Double Materiality Matrix, which was validated by the Board of Directors, following the ESG Com- mittee’s recommendation. The impacts of the material matters identified are disclosed in the ESG Report Annex on pages 3 – 5. Materiality Assessment Avolta´s materiality assessment helps the company to align its business with the expectations of its stakeholders and of society in general. The materiality assessment process aims to identify and prioritize the issues of the greatest ma- terial importance; and it is also the basis for defining our GRI reporting content and the boundaries of the topics. The process follows the principles of stakeholder inclusive- ness, environmental and social context, materiality and completeness according to the GRI requirements. Our vision of sustainability however is not a static one, and Avolta conducts periodic and comprehensive materiality assessments to identify our most relevant reporting topics from an ESG perspective. New Avolta Double Materiality Matrix 13 ESG topics emerged as material* for the development of the company’s ESG strategy and commitments. In the context of the business combination of Dufry and Autogrill, Avolta has reviewed the material matters and stakeholder communities to develop the new Double Materiality Matrix. h g i H t u o - e d i s n I w o L Top materiality Health & well-being Supporting communities Waste & packaging Water & biodiversity Diversity, Equity & Inclusion Supply chain management Climate change, energy & emissions Sustainable sourcing & traceability High materiality Human rights Talent recruitment, engagement & retention Employee training & development Product quality & safety Medium materiality Healthy and sustainable choice * To finalize the list of material matters for Avolta a mathemati- cal treshold of 2.5 (on a scale from 1 to 5) was applied. Only matters above aver- age score were se- lected. Low Travel experiences Outside-in High People Communities Planet Avolta’s new Double Materiality Matrix consists now of A detailed description of the material topics and related 13 key material matters, grouped into four focus areas. impacts, risks and opportunities is available in the ESG Four of them – “Diversity, equity & inclusion", "Climate Report Annex 2023. In addition, the aspects related to change, energy & emissions", "Sustainable sourcing & governance and regulatory compliance were consid- traceability" and "Supply chain management" – ered as prerequisites for the business and thus are not emerged as the most material, reflecting the main sus- represented in the matrix, although being addressed in tainability challenges of the industry in which the com- the report. pany operates and has the opportunity to stand out. Data comparability & measurability of initiative the company’s development, performance and position- effectiveness ing. Due to the transformative business combination between Dufry and Autogrill and the integration of the two compa- The materiality assessment started with a context analysis nies in 2023, comparability of the ESG-related data is lim- to identify the relevant material matters for Avolta in light of ited, as 2023 is considered a transition year and will be- its business activities and the expectations of the compa- come a new «base year» for further improvements. This ny’s main stakeholders (investors, concession partners, also influences the descriptions and comparability of the customers, peers, brand partners and employees), thus de- effectiveness of the ESG initiatives implemented. The fining the boundaries of the company’s scope of ESG ac- company will include the related information in more countability and range of initiatives. In particular, both inter- depth going forward, starting with the business year 2024. nal and external documentation was analyzed, such as peers’ and partners’ publicly available reporting, publica- Nevertheless, where possible, the company discloses im- tions from industry associations and sector trends, ESG rat- provements and related data showing the initiatives’ effec- ing requirements as well as both public and internal surveys tiveness already for the business year 2023. Such im- conducted on customers and employees. 22 material mat- provements are listed in full on pages 106 – 107 of this ters emerged from the analysis which were then assessed report and include amongst others: in one-to-one interviews with the global ESG team, the – Improved extension (on a like for like basis) of the Avolta members of the Global Executive Committee and of the Supplier Code of Conduct recertification process and ad- Board of Directors. The stakeholders were asked to assess ditional extension of the recertification process to the F&B the significance of each potential material matter consider- business; see details on page 117 of the ESG Report ing both the related impacts generated (Impact Materiality) – Improvement of coverage of electricity consumption and risks and opportunities that might influence the com- through renewable energy; see details on page 125 – 126 pany’s performance (Financial Materiality). In the evalua- of the ESG Report tion, a medium term time horizon of five years was adopted. – First disclosure of total amount of donations including Following a prioritization approach and the application of a split by type; see details on page 143 of the ESG Report materiality threshold, a final list of 13 material matters re- – Increased reach of dedicated internal training of staff for sulted for Avolta’s new Double Materiality Matrix, which was responsible retailing validated by the Board of Directors, following the ESG Com- – Extended portfolio of sustainable products in F&B; see mittee’s recommendation. details on pages 117 – 119 of the ESG Report. The impacts of the material matters identified are disclosed ESG Governance & Compliance in the ESG Report Annex on pages 3 – 5. Avolta´s ESG Strategy is supervised by the Board of Direc- tors’ dedicated ESG Committee chaired by the Lead Inde- Materiality Assessment pendent Director. The ESG Committee is informed on the Avolta´s materiality assessment helps the company to align progress of Avolta’s ESG engagement on a quarterly basis. its business with the expectations of its stakeholders and of The operational evolution and implementation of the ESG society in general. The materiality assessment process strategy is managed by the dedicated ESG department, aims to identify and prioritize the issues of the greatest ma- headed by the Chief Public Affairs & ESG Officer, who is a terial importance; and it is also the basis for defining our member of the Global Executive Committee and reports to GRI reporting content and the boundaries of the topics. the CEO. A detailed description of our ESG Strategy is avail- The process follows the principles of stakeholder inclusive- able on the Avolta website: Our Impact | Avolta ness, environmental and social context, materiality and completeness according to the GRI requirements. New Avolta Double Materiality Matrix Avolta’s Materiality Matrix underwent a complete review in Our vision of sustainability however is not a static one, and the context of the business combination of Dufry and Au- Avolta conducts periodic and comprehensive materiality togrill in 2023 and is now structured following the Double assessments to identify our most relevant reporting topics Materiality approach. from an ESG perspective. This approach combines two perspectives: – Impact Materiality (“inside-out”): considering the impacts (actual and potential, positive and negative) that Avolta generates on economy, environment and people; – Financial Materiality (“outside-in”): identifying risks and opportunities that might positively or negatively influence Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 103/336 New Avolta Double Materiality Matrix 13 ESG topics emerged as material* for the development of the company’s ESG strategy and commitments. In the context of the business combination of Dufry and Autogrill, Avolta has reviewed the material matters and stakeholder communities to develop the new Double Materiality Matrix. h g H i t u o - e d s n i I w o L Top materiality Diversity, Equity & Inclusion Supply chain management Climate change, energy & emissions Sustainable sourcing & traceability High materiality Human rights Talent recruitment, engagement & retention Employee training & development Product quality & safety Medium materiality Health & well-being Supporting communities Waste & packaging Water & biodiversity Healthy and sustainable choice Low Travel experiences Outside-in High People Communities Planet * To finalize the list of material matters for Avolta a mathemati- cal treshold of 2.5 (on a scale from 1 to 5) was applied. Only matters above aver- age score were se- lected. Avolta’s new Double Materiality Matrix consists now of 13 key material matters, grouped into four focus areas. Four of them – “Diversity, equity & inclusion", "Climate change, energy & emissions", "Sustainable sourcing & traceability" and "Supply chain management" – emerged as the most material, reflecting the main sus- tainability challenges of the industry in which the com- pany operates and has the opportunity to stand out. A detailed description of the material topics and related impacts, risks and opportunities is available in the ESG Report Annex 2023. In addition, the aspects related to governance and regulatory compliance were consid- ered as prerequisites for the business and thus are not represented in the matrix, although being addressed in the report. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 104/336 Avolta’ s ESG Vision Rooted in Avolta’s DNA Embedded in our way of doing business Focused on clear commitments and tangible initiatives Shaped to be a lever of innovation and competitive differentiation Avolta ESG Strategy House The 13 ESG material topics have been clustered into four focus areas highlighting Avolta’s main ambitions. Avolta’s ESG Strategy House is based on the newly developed Double Materiality Matrix, reflects the key focus areas and links with the related UN Sustainable Development Goals. Create Sustainable Travel Experiences – Sustainable sourcing & traceability – Supply chain management – Product quality & safety – Healthy & sustainable choices Respect Our Planet – Climate change, energy & emissions – Waste & packaging – Water & biodiversity S t a keholder G overnance Ensuring sustainable ways of traveling. With our partners. For our customers. Reducing our footprint, increasing our conscious- ness ESG Factory Making our people part Empower of the journey Our by fostering a People diverse, inclusive and equitable workplace. Creating durable bonds Empower with our commu- nities by supporting Our social and eco- People nomic develop- ment. – Diversity, Equity & Inclusion – Employee training & development – Talent recruitment, engagement & retention – Health & well-being – Human rights Empower Our People – Supporting Communities Engage Local Communities Avolta’ s ESG Vision Rooted in Avolta’s DNA Embedded in our way of doing business Focused on clear Shaped to be a lever of commitments innovation and and tangible initiatives competitive differentiation Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 105/336 Avolta ESG Strategy House The 13 ESG material topics have been clustered into four focus areas highlighting Avolta’s main ambitions. Avolta’s ESG Strategy House is based on the newly developed Double Materiality Matrix, reflects the key focus areas and links with the related UN Sustainable Development Goals. Create Sustainable Travel Experiences – Sustainable sourcing & traceability – Supply chain management – Product quality & safety – Healthy & sustainable choices Respect Our Planet – Climate change, energy & emissions – Waste & packaging – Water & biodiversity S t a keholder G overnance Ensuring sustainable ways of traveling. With our partners. For our customers. Reducing our footprint, increasing our conscious- ness ESG Factory Making Empower our people part of the journey Our by fostering a People diverse, inclusive and equitable workplace. Creating Empower durable bonds with our commu- Our nities by supporting People social and eco- nomic develop- ment. – Diversity, Equity & Inclusion – Employee training & development – Talent recruitment, engagement & retention – Health & well-being – Human rights Empower Our People – Supporting Communities Engage Local Communities Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 106/336 Improvements achieved in 2023 Create Sustainable Travel Experiences Respect Our Planet Empower Our People Engage Local Communities Extention of sustainable product sourcing in F&B Partnership with Oceana to support marine habitats through sale of reusable bags in 23 countries Launch of future shop concept and hybrid formats in Arlanda Stockholm and Milano Malpensa airports Sourcing of electricity from renewable sources further increased and now covering 40% of consumption (base 2019) Introduction of «internal first» recruitment Supported local communities in Türkiye, initiative «Grow With Us» during the Morocco and Hawai’i (US) following integration process of Dufry and Autogrill devastating earthquakes and wildfires into Avolta respectively. Extension of internal online communication Implementation of global channel Beekeeper Avolta Community Engagement Strategy Sustainable Product Identification Initiative further expanded Expansion of TCFD Report assessing climate- related risks and opportunities covering the whole company scope Creation & expansion of dedicated training Continued to support and engage with platforms for both back-office and frontline local communities globally through initiatives employees at single country level and often in collaboration with concession partners Increased reach of online employee shop Emporium to additional countries mind.body.soul. Shop-in-shop concept implemented internationally in 11 countries Increased reach of dedicated training of staff for responsible retailing New Avolta Supplier Code of Conduct developed and recertified with suppliers globally Two Centers of Excellence for food innovation opened in Milan and Amsterdam 106 107 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 107/336 Create Sustainable Travel Experiences Respect Our Planet Empower Our People Engage Local Communities Extention of sustainable product sourcing in F&B Partnership with Oceana to support marine habitats through sale of reusable bags in 23 countries Launch of future shop concept Sourcing of electricity from and hybrid formats in Arlanda Stockholm renewable sources further increased and now and Milano Malpensa airports covering 40% of consumption (base 2019) Introduction of «internal first» recruitment initiative «Grow With Us» during the integration process of Dufry and Autogrill into Avolta Supported local communities in Türkiye, Morocco and Hawai’i (US) following devastating earthquakes and wildfires respectively. Extension of internal online communication channel Beekeeper Implementation of global Avolta Community Engagement Strategy Sustainable Product Identification Initiative further expanded Expansion of TCFD Report assessing climate- related risks and opportunities covering the whole company scope Creation & expansion of dedicated training platforms for both back-office and frontline employees Continued to support and engage with local communities globally through initiatives at single country level and often in collaboration with concession partners Increased reach of online employee shop Emporium to additional countries Improvements achieved in 2023 mind.body.soul. Shop-in-shop concept implemented internationally in 11 countries Increased reach of dedicated training of staff for responsible retailing New Avolta Supplier Code of Conduct developed and recertified with suppliers globally Two Centers of Excellence for food innovation opened in Milan and Amsterdam 106 107 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 108/336 ESG Commitments going forward Avolta’s success goes beyond commercial and financial performance and we understand that our business activi- ties have an impact on the communities where we operate and on the environment. In line with our commitment to the Ten Principles of the UN Global Compact we regularly align our overall ESG strategy with new requirements and develop relevant initiatives geared to achieving a more sustainable business, including: Create Sustainable Travel Experiences Respect Our Planet Empower Our People Engage Local Communities Sustainable Sourcing & Traceability: Expand the adoption of responsible sourcing practices and increase the procurement of sustainable, certified and local products Climate Change, Energy & Emissions: Measure Scope 1, 2 and 3 GHG emissions and reduce our footprint in our operations and along the value chain Diversity, Equity & Inclusion: Create an inclusive culture, by promoting diversity and equity at all levels of the Supporting Communities: Create connections with the communities we serve and contribute to the growth of local organization economies Supply Chain Management: Foster a responsible and ethical management of the supply chain, partnering with suppliers that are attentive to social and environmental impacts Waste & Packaging: Measure & reduce the generation of waste and promote circular practices Product Quality & Safety: Provide high quality & safety standards for the products and ingredients used in all of the company’s channels Water & Biodiversity: Reduce water withdrawal in our operations and promote the restoration of habitats along the value chain Healthy & Sustainable Choices: Promote better travel experiences by offering a wide range of healthy and sustainable products, good for both consumers’ and planet’s health Talent Recruitment, Engagement & Retention: Attract and retain highly talented people by building a positive and engaging working environment Training & Development: Provide high quality training, learning & development opportunities to strengthen our people’s competences and professional growth Health & Wellbeing: Provide high health and safety standards and promote world-class well-being offerings and education to foster well-being and work- life balance Human Rights: Protect human rights across the company and along its supply chain Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 109/336 ESG Commitments going forward Avolta’s success goes beyond commercial and financial the Ten Principles of the UN Global Compact we regularly performance and we understand that our business activi- align our overall ESG strategy with new requirements and ties have an impact on the communities where we operate develop relevant initiatives geared to achieving a more and on the environment. In line with our commitment to sustainable business, including: Create Sustainable Travel Experiences Respect Our Planet Empower Our People Engage Local Communities Sustainable Sourcing & Traceability: Climate Change, Energy & Emissions: Expand the adoption of responsible sourcing Measure Scope 1, 2 and 3 GHG emissions practices and increase the procurement of sustainable, certified and local products and reduce our footprint in our operations and along the value chain Diversity, Equity & Inclusion: Create an inclusive culture, by promoting diversity and equity at all levels of the organization Supporting Communities: Create connections with the communities we serve and contribute to the growth of local economies Supply Chain Management: Waste & Packaging: Foster a responsible and ethical management Measure & reduce the generation of waste and promote circular practices of the supply chain, partnering with suppliers that are attentive to social and environmental impacts Product Quality & Safety: Water & Biodiversity: Provide high quality & safety standards for Reduce water withdrawal in our operations the products and ingredients used in all of the and promote the restoration of habitats along company’s channels the value chain Healthy & Sustainable Choices: Promote better travel experiences by offering a wide range of healthy and sustainable products, good for both consumers’ and planet’s health Talent Recruitment, Engagement & Retention: Attract and retain highly talented people by building a positive and engaging working environment Training & Development: Provide high quality training, learning & development opportunities to strengthen our people’s competences and professional growth Health & Wellbeing: Provide high health and safety standards and promote world-class well-being offerings and education to foster well-being and work- life balance Human Rights: Protect human rights across the company and along its supply chain Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 110/336 Avolta’s ESG engagement practices Avolta recognizes that the long-term sustainability of its business relies on the capacity to build, establish and main- tain trusted relationships with all our stakeholders. Integrity is a key element in our business behavior across all levels of the organization and has served Avolta over the years to foster a sense of trust with our stakeholders. Stakeholder interaction and dialogue Engaging with our stakeholders on a regular basis to under- stand their expectations, needs and concerns is part of our ongoing commitment to sustainability. We interact with our stakeholders in a number of different ways, both formally and informally. For 2023, the group of relevant stakehold- ers included in our materiality assessment has been up- dated to reflect the new scope of the new entity resulting from the business combination of Dufry and Autogrill, and includes airports and other concession partners, custom- ers, employees, investors (incl. shareholders, bondholders and lending banks), public authorities, brand suppliers, me- dia and communities. Whilst closely interacting with all stakeholders of our eco- system is important, the close collaboration with our key business partners – brand suppliers and concession part- ners, which permit Avolta to provide a superior travel expe- rience and service to customers – is crucial. Known in the industry as the Trinity (concession partners, retailers & F&B operators and brand suppliers), the tight lines and cooper- ation between these three groups allow for an improved di- alogue and mutual understanding to the ultimate benefit of our common customers. This interaction has remained crit- ical and valuable during 2023 as air traffic in particular con- tinued to accelerate and the performance of our stores and restaurants further increased. Beyond the Trinity described above, our team members and investors are the other two key stakeholders contribut- ing to our company’s success. Avolta however, holds relationships with a larger group of stakeholders, which include: – Travel Retail Associations and Industry Bodies – Avolta is an active member of each of the relevant regional and national industry associations in the geographies in which it operates (see pages 56 – 71). We are proud to have se- nior team members on the Boards of some of the most respected industry bodies – ETRC (European Travel Retail Confederation), MEADFA (Middle East & Africa Duty-Free Association), IAADFS (International Association of Airport Duty-Free Stores), ASUTIL (South American Association of Free Stores), UKTRF (UK Travel Retail Forum) and the DFWC (Duty Free World Council), NRA (National Restau- rant Association) in the USA, AIGRIM (Travel Retail & Lei- sure Association) in Italy. This gives Avolta a voice in in- dustry debates, ensuring that it plays a proactive role in shaping the industry’s future. – Government & Public Institutions – The relationship with this group of stakeholders is of major importance, as they are the generators and guardians of laws and regulations that circumscribe Avolta’s operating environment. New laws and regulations can have a significant impact on the business and Avolta needs to be aware of any changes and be prepared to influence draft regulations and react to comply as needed. – Service Providers – Understanding the relationship of Avolta with key service providers – mainly with IT and lo- gistics suppliers – is fundamental for Avolta to have a more holistic view of its ESG impact and to assess and eventually address improvement areas. – Media – Are an important group for Avolta as it permits the company to communicate with its main stakeholders. Avolta strives to build strong, and close collaborative rela- tionships with media and our communications teams maintain direct, long-term relations with media represen- tatives and influencers, providing them with information on a wide range of global, regional and local topics. – ESG Community – Comprises ESG rating agencies, ESG powerhouses (such as United Nations Global Compact, GRI or SBTi), and the ESG community of the travel retail and F&B industry as well as the airport community and be followed. The policy also describes Avolta’s approach associations. The relationship with this group of stake- to respect human rights throughout its operations and holders permits our company to have a better under- business relationships, recognizing the existence of spe- standing of the main topics of concern on a global basis cific particularities in each of the countries in which Avolta and identify areas of improvement within our ESG report- operates and respecting the regulations applicable in ing and communication. each jurisdiction. – Communities and Charities – As part of its social com- – Avolta´s Environmental Management Guidelines – outline mitment, Avolta supports many activities in the commu- how Avolta is approaching and implementing its environ- nities in which it operates. Avolta has a particular focus on mental initiatives building on its ESG strategy. The guide- fighting poverty and food insecurities, education, youth lines define how Avolta’s initiatives are implemented development and charities for children, as well as general across the company to conduct business in an environ- health and water related initiatives and encourages its mentally conscious manner, aiming at minimizing the employees to work as active members at a local level. For overall environmental impact of its business activities. detailed information, please see Chapter Engage Local – Policy for Insider Information and Securities Trading – the Communities on pages 142 – 148. Avolta’s Policy Framework internal policy defines requirements and behaviors for employees having access to inside information and regu- lates when and how Avolta shares can be traded. This in- Avolta has a set of internal policies and procedures which cludes “blackout periods” announced by the legal & com- describe the ethical, social and environmental principles to pliance departments as applicable during the course of be applied by our team members at all times and which the year. complement the Avolta Code of Conduct. These policies – Reporting on Wrongdoing Procedure – provides several and procedures address specific topics in the areas of en- internal and external whistleblowing channels to anony- vironmental, social, employee and human rights-related mously report wrongdoings in compliance with the re- matters as well as anti-bribery (among others), and provide quirements of applicable law and to prevent any form of guidance on the expected standards and behaviors in their discrimination. The Whistleblowing are supervised and day-to-day work. Furthermore, they are available to all our managed by the Compliance Department as described in team members through the internal communication tools the Empower our People Chapter on pages 134 – 135 of of the company as well as the corporate website, hence en- this ESG Report. suring universal access to them. This set of information in- cludes: Compliance education – Avolta Code of Conduct – requires all of our team mem- Beyond ensuring universal access to policies and proce- bers, officers and directors to act ethically and in compli- dures, Avolta also conducts compliance training for team ance with all applicable laws at all times including interna- members, officers and directors, as applicable, on an on- tionally accepted human rights standards. The Code going basis. These training sessions reflect necessary further outlines the types of conduct that are not permis- changes introduced in our Code of Conduct and internal sible and imposes strict rules in relation to charitable con- compliance updates as well as new laws, regulations and tributions and sponsorships, as well as gifts, hospitality best practices as applicable. Avolta’s Compliance Depart- and entertainment expenses, to minimize the risk of cor- ment regularly evaluates and adapts the content of Avol- ruption. In addition, the rules require careful due diligence ta’s training on Compliance and Corporate Policies to keep to be conducted on any external partner Avolta is work- training up-to-date and reflect industry standards and ap- ing with, including a procedure that must be followed by plicable laws. A detailed overview of the compliance train- all new joint-venture partners, consultants for business ings is described in the chapter Empower Our People on development projects, counterparts to M&A transactions page 138. and other similar counterparts. – Avolta Supplier Code of Conduct – is aligned with the Socio-economic compliance principles of the Avolta Code of Conduct, extends the re- Having operations in 73 countries means complying with a quirements and expected behaviors to the company’s broad range of national laws and regulations, as well as suppliers and is re-certified on a regular basis with the maintaining an active dialogue to foster ongoing stake- suppliers. A detailed description of the Avolta Supplier holder and social engagement. For this reason, from a Code of Conduct and the 2023 implementation progress global perspective, Avolta’s position towards compliance is available on pages 116 – 117 of this ESG Report. necessarily needs to have a holistic and broad approach, by – Human Resources Policy – further complements the also taking into account international norms and best prac- Avolta Code of Conduct by detailing behaviors and re- tices, including the 10 Principles of the UN Global Compact. quirements with respect to legality, diversity, non-dis- In this regard, Avolta has several initiatives and control crimination and equal opportunities as axis of conduct to mechanisms in place that permit the company to monitor Avolta’s ESG engagement practices Avolta recognizes that the long-term sustainability of its business relies on the capacity to build, establish and main- tain trusted relationships with all our stakeholders. Integrity is a key element in our business behavior across all levels of the organization and has served Avolta over the years to foster a sense of trust with our stakeholders. Stakeholder interaction and dialogue Engaging with our stakeholders on a regular basis to under- stand their expectations, needs and concerns is part of our ongoing commitment to sustainability. We interact with our stakeholders in a number of different ways, both formally and informally. For 2023, the group of relevant stakehold- ers included in our materiality assessment has been up- dated to reflect the new scope of the new entity resulting from the business combination of Dufry and Autogrill, and includes airports and other concession partners, custom- ers, employees, investors (incl. shareholders, bondholders and lending banks), public authorities, brand suppliers, me- dia and communities. Whilst closely interacting with all stakeholders of our eco- system is important, the close collaboration with our key business partners – brand suppliers and concession part- ners, which permit Avolta to provide a superior travel expe- rience and service to customers – is crucial. Known in the industry as the Trinity (concession partners, retailers & F&B operators and brand suppliers), the tight lines and cooper- ation between these three groups allow for an improved di- alogue and mutual understanding to the ultimate benefit of dustry debates, ensuring that it plays a proactive role in our common customers. This interaction has remained crit- shaping the industry’s future. ical and valuable during 2023 as air traffic in particular con- – Government & Public Institutions – The relationship with tinued to accelerate and the performance of our stores and this group of stakeholders is of major importance, as they restaurants further increased. are the generators and guardians of laws and regulations that circumscribe Avolta’s operating environment. New Beyond the Trinity described above, our team members laws and regulations can have a significant impact on the and investors are the other two key stakeholders contribut- business and Avolta needs to be aware of any changes ing to our company’s success. and be prepared to influence draft regulations and react to comply as needed. Avolta however, holds relationships with a larger group of – Service Providers – Understanding the relationship of stakeholders, which include: Avolta with key service providers – mainly with IT and lo- – Travel Retail Associations and Industry Bodies – Avolta gistics suppliers – is fundamental for Avolta to have a is an active member of each of the relevant regional and more holistic view of its ESG impact and to assess and national industry associations in the geographies in which eventually address improvement areas. it operates (see pages 56 – 71). We are proud to have se- – Media – Are an important group for Avolta as it permits nior team members on the Boards of some of the most the company to communicate with its main stakeholders. respected industry bodies – ETRC (European Travel Retail Avolta strives to build strong, and close collaborative rela- Confederation), MEADFA (Middle East & Africa Duty-Free tionships with media and our communications teams Association), IAADFS (International Association of Airport maintain direct, long-term relations with media represen- Duty-Free Stores), ASUTIL (South American Association tatives and influencers, providing them with information of Free Stores), UKTRF (UK Travel Retail Forum) and the on a wide range of global, regional and local topics. DFWC (Duty Free World Council), NRA (National Restau- – ESG Community – Comprises ESG rating agencies, ESG rant Association) in the USA, AIGRIM (Travel Retail & Lei- powerhouses (such as United Nations Global Compact, sure Association) in Italy. This gives Avolta a voice in in- GRI or SBTi), and the ESG community of the travel retail Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 111/336 and F&B industry as well as the airport community and associations. The relationship with this group of stake- holders permits our company to have a better under- standing of the main topics of concern on a global basis and identify areas of improvement within our ESG report- ing and communication. – Communities and Charities – As part of its social com- mitment, Avolta supports many activities in the commu- nities in which it operates. Avolta has a particular focus on fighting poverty and food insecurities, education, youth development and charities for children, as well as general health and water related initiatives and encourages its employees to work as active members at a local level. For detailed information, please see Chapter Engage Local Communities on pages 142 – 148. Avolta’s Policy Framework Avolta has a set of internal policies and procedures which describe the ethical, social and environmental principles to be applied by our team members at all times and which complement the Avolta Code of Conduct. These policies and procedures address specific topics in the areas of en- vironmental, social, employee and human rights-related matters as well as anti-bribery (among others), and provide guidance on the expected standards and behaviors in their day-to-day work. Furthermore, they are available to all our team members through the internal communication tools of the company as well as the corporate website, hence en- suring universal access to them. This set of information in- cludes: – Avolta Code of Conduct – requires all of our team mem- bers, officers and directors to act ethically and in compli- ance with all applicable laws at all times including interna- tionally accepted human rights standards. The Code further outlines the types of conduct that are not permis- sible and imposes strict rules in relation to charitable con- tributions and sponsorships, as well as gifts, hospitality and entertainment expenses, to minimize the risk of cor- ruption. In addition, the rules require careful due diligence to be conducted on any external partner Avolta is work- ing with, including a procedure that must be followed by all new joint-venture partners, consultants for business development projects, counterparts to M&A transactions and other similar counterparts. – Avolta Supplier Code of Conduct – is aligned with the principles of the Avolta Code of Conduct, extends the re- quirements and expected behaviors to the company’s suppliers and is re-certified on a regular basis with the suppliers. A detailed description of the Avolta Supplier Code of Conduct and the 2023 implementation progress is available on pages 116 – 117 of this ESG Report. – Human Resources Policy – further complements the Avolta Code of Conduct by detailing behaviors and re- quirements with respect to legality, diversity, non-dis- crimination and equal opportunities as axis of conduct to be followed. The policy also describes Avolta’s approach to respect human rights throughout its operations and business relationships, recognizing the existence of spe- cific particularities in each of the countries in which Avolta operates and respecting the regulations applicable in each jurisdiction. – Avolta´s Environmental Management Guidelines – outline how Avolta is approaching and implementing its environ- mental initiatives building on its ESG strategy. The guide- lines define how Avolta’s initiatives are implemented across the company to conduct business in an environ- mentally conscious manner, aiming at minimizing the overall environmental impact of its business activities. – Policy for Insider Information and Securities Trading – the internal policy defines requirements and behaviors for employees having access to inside information and regu- lates when and how Avolta shares can be traded. This in- cludes “blackout periods” announced by the legal & com- pliance departments as applicable during the course of the year. – Reporting on Wrongdoing Procedure – provides several internal and external whistleblowing channels to anony- mously report wrongdoings in compliance with the re- quirements of applicable law and to prevent any form of discrimination. The Whistleblowing are supervised and managed by the Compliance Department as described in the Empower our People Chapter on pages 134 – 135 of this ESG Report. Compliance education Beyond ensuring universal access to policies and proce- dures, Avolta also conducts compliance training for team members, officers and directors, as applicable, on an on- going basis. These training sessions reflect necessary changes introduced in our Code of Conduct and internal compliance updates as well as new laws, regulations and best practices as applicable. Avolta’s Compliance Depart- ment regularly evaluates and adapts the content of Avol- ta’s training on Compliance and Corporate Policies to keep training up-to-date and reflect industry standards and ap- plicable laws. A detailed overview of the compliance train- ings is described in the chapter Empower Our People on page 138. Socio-economic compliance Having operations in 73 countries means complying with a broad range of national laws and regulations, as well as maintaining an active dialogue to foster ongoing stake- holder and social engagement. For this reason, from a global perspective, Avolta’s position towards compliance necessarily needs to have a holistic and broad approach, by also taking into account international norms and best prac- tices, including the 10 Principles of the UN Global Compact. In this regard, Avolta has several initiatives and control mechanisms in place that permit the company to monitor Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 112/336 and ensure compliance with national and international laws and to follow respective ethical standards. Risk management, due diligence and control The risks inherent in Avolta´s business are divided into two groups: financial risks (see Financial Report on pages 237 – 248) – related to interest rates, exchange rates, credit risks and liquidity risks – and non-financial risks. A compre- hensive description of the company’s non-financial risk and opportunity mapping is included in the ESG Report 2023 Annex on pages 337 ff. as well as in the TFCD Report, both available on the company website: Our Impact | Avolta. Avolta adopts a risk management model based on three lev- els. This model is applicable to all subsidiaries of the com- pany. The company is supported by an Enterprise Risk Man- agement software called GRC (Governance, Risk and Compliance), which allows a comprehensive identification and management of potential risks that may affect the busi- ness. First level – The commitment of Avolta and all its subsid- iaries to integrity and transparency begins with its own staff. Avolta requires all its team members, officers and di- rectors to act at all times in accordance with the provisions of the Avolta Code of Conduct. The latter describes the types of behavior not allowed, and imposes strict compli- ance rules regarding the operation of the business includ- ing for example zero tolerance for bribery. In addition, the policies and procedures of Avolta require each team member, officer and director to perform due diligence and carefully assess new external partners with whom Avolta plans to work, including a procedure to be followed to examine all new business partners, consul- tants for business development projects, partners for transactions and M&A, as well as similar counterparts. Where appropriate, these due diligence processes take into account relevant ESG matters, including, in particular, bribery risk. Second level – There are various governance functions across the organization including the Compliance, Legal, Finance, ESG and Human Resources departments in charge of monitoring the company’s principal risks and establishing the most appropriate controls to mitigate them, as well as ensuring compliance with the policies and procedures of the company. The scope of the Compliance and Corporate Governance function is based on the fol- lowing pillars: – Regular review and – where necessary – update as well as ensuring compliance with the set of global company pol- icies – Establishment of the overall framework of approvals in- cluding a policy of “four eyes” for validations – Training, both for the members of the staff identified with greater exposure to risk, and for the rest of the em- ployees – Global corporate risk management and control – Due diligence in compliance, supply chain and transac- tional matters, including on financial and non-financial risks (e.g. environmental, social, employment, human rights and bribery/corruption) – Internal communication and reporting channels to en- sure the integrity of the compliance program – Investigation of reports of possible wrongdoings and im- plementation of corrective actions Third level – The Group’s Internal Audit provides indepen- dent and objective monitoring and consulting services de- signed to add value and improve Avolta’s operations. This function covers all subsidiaries and applies a systematic and disciplined approach to evaluate and improve the ef- fectiveness of governance processes, as well as risk man- agement and control, including assessing risk manage- ment procedures and the potential committing of fraud. The main risks identified during internal audit procedures are reported to senior management and to the Audit Committee of the Board of Directors, and its status is up- dated periodically until resolution or acceptance are given by the governing bodies. Avolta’s Corporate Governance Avolta believes that good corporate governance is impor- tant to the development of the company, to ensure the sus- tainable provision of long-term benefits for shareholders, employees and society. Avolta´s governance system serves as a control mechanism in relation to a number of elements, including bribery and corruption, tax, executive remunera- tion, shareholders’ voting possibilities and internal control. Most of these topics are covered in the Corporate Gover- nance Section of this Annual Report on pages 279 – 309. Especially relevant for the sustainability of our industry is the corruption and bribery phenomena, which can be the cause of negative economic, social and environmental im- pacts. From a business perspective, corruption distorts the functioning of the market and undermines governance in- stitutions and in general, the rule of law. For Avolta, the subject of corruption is of considerable im- portance, as the company expands its operations to many countries with elevated corruption levels and participates in many public procurement processes to bid for airport, sea- port, motorways, and other concessions around the globe each year. Avolta prohibits and has zero tolerance for brib- ery 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 compliance with all applicable laws, rules, and regulations. Avolta requires all of its team members, officers and directors to behave at all times with honesty, ethically and within the confines of ap- plicable laws as well as in full compliance with Avolta’s Code of Conduct. Where laws, rules or customs exist that are dif- ferent from the principles set out in the Code of Conduct, Avolta team members, officers and directors are required to follow whichever sets the higher standard in this regard. Avolta also expects its team members, officers and direc- tors to fully adhere to the principles of integrity and fair dealing when carrying out activities on behalf of Avolta. This includes promoting standards adopted by the company and as set out in the Code of Conduct with respect to sus- tainability, diversity, decent work and human rights, as well as zero tolerance towards harassment and discrimination. bility Board (FSB) to develop consistent climate-related fi- Avolta’s ESG Commitments & Reporting nancial risk disclosures for use by companies, banks and investors in providing information to stakeholders. In the Avolta engages in numerous external initiatives and strate- first quarter of 2023, Avolta disclosed its first report fol- gic collaborations with organisations and partners to sup- lowing the guidelines of TCFD, which covered the report- port and inform about our work on the most material sus- ing year 2022 and explored the range of the impacts that tainability issues. It has been grouped the most important climate change would have for our business, including and general ones under four different categories, and men- both risks and opportunities. Taking into consideration tionned the more specific ones within the four focus areas. the business combination of Dufry and Autogrill in 2023, Commitments Avolta now publishes a combined TCFD Report covering the full scope of the new entity. The TCFD Report 2023 is – UNGC – Avolta has been a participant of the UN Global available at the end of this Annual Report as well as on the Compact (UNGC) since March 2020 and since then, we Group website: Our Impact | Avolta. have measured and disclosed our progress on the ten – Swiss Requirements regarding Non-Financial Disclo- principles established by the UNGC. Additionally, Avolta sure – Avolta publishes annual Non-Financial Reporting is a participant of the UNGC Swiss Network and regularly in accordance with the requirements regarding transpar- participates in conferences and meetings where best ency on non-financial matters of article 964a et seqq. of practices are shared. the SCO. – SBTi – During 2022 and early 2023, Dufry sought and gained validation from the SBTi for the emissions reduc- Assessments and Ratings tion targets set for the company (retail business), as de- Avolta is regularly assessed and rated by ESG-specialized scribed in detail in the Respect Our Planet section of this rating agencies, including Sustainalytics, MSCI ESG Rat- report on pages 125 – 126. Reporting ings, ISS ESG, Moody’s ESG Solutions (Vigeo Eiris) or In- rate. Avolta´s ESG department engages with ESG analysts to assist them in their assessment of our company and to – GRI – The Global Reporting Initiative (GRI) helps organiza- support their research work. Avolta recognises the value tions to be transparent and take responsibility for their of external feedback from these independent agencies as impacts, supporting companies to systematically report their work helps us to further develop our lines of action on the elements that are material for their businesses in a towards strengthening our long-term commitment to be structured and comprehensive way. This reporting per- a successful, sustainable business. mits better comparability, greater transparency and alignment with international standards, such as the OECD Industry Initiatives guidelines for multinational organisations – ISO 26000; Avolta participates in several industry initiatives geared to- the United Nations Guiding Principles on Business and wards consumer and environmental protection. Amongst Human Rights; the UNGC’s Ten Principles and the United others, Avolta has contributed to the development of sev- Nations’ Sustainable Development Goals. Avolta has pre- eral Codes of Conduct for the travel retail industry (such pared its ESG Report following the guidelines of GRI since as the UK Code of Conduct on Disruptive Passengers and the reporting year 2018 and in this edition has adopted the ETRC and DFWC Codes of Conduct on Sale of Alco- the GRI Universal Standards. hol), and is a member of the ACI Climate Change Task – TCFD – The Task Force on Climate-Related Financial Dis- Force and the ACI Europe Environmental Strategy Com- closures (TCFD) was created in 2015 by the Financial Sta- mittee (ENSTRAT). and ensure compliance with national and international laws – Training, both for the members of the staff identified and to follow respective ethical standards. with greater exposure to risk, and for the rest of the em- ployees Risk management, due diligence and control – Global corporate risk management and control The risks inherent in Avolta´s business are divided into two – Due diligence in compliance, supply chain and transac- groups: financial risks (see Financial Report on pages tional matters, including on financial and non-financial 237 – 248) – related to interest rates, exchange rates, credit risks (e.g. environmental, social, employment, human risks and liquidity risks – and non-financial risks. A compre- rights and bribery/corruption) hensive description of the company’s non-financial risk and – Internal communication and reporting channels to en- opportunity mapping is included in the ESG Report 2023 sure the integrity of the compliance program Annex on pages 337 ff. as well as in the TFCD Report, both – Investigation of reports of possible wrongdoings and im- available on the company website: Our Impact | Avolta. plementation of corrective actions Avolta adopts a risk management model based on three lev- Third level – The Group’s Internal Audit provides indepen- els. This model is applicable to all subsidiaries of the com- dent and objective monitoring and consulting services de- pany. The company is supported by an Enterprise Risk Man- signed to add value and improve Avolta’s operations. This agement software called GRC (Governance, Risk and function covers all subsidiaries and applies a systematic Compliance), which allows a comprehensive identification and disciplined approach to evaluate and improve the ef- and management of potential risks that may affect the busi- fectiveness of governance processes, as well as risk man- ness. agement and control, including assessing risk manage- ment procedures and the potential committing of fraud. First level – The commitment of Avolta and all its subsid- The main risks identified during internal audit procedures iaries to integrity and transparency begins with its own are reported to senior management and to the Audit staff. Avolta requires all its team members, officers and di- Committee of the Board of Directors, and its status is up- rectors to act at all times in accordance with the provisions dated periodically until resolution or acceptance are given of the Avolta Code of Conduct. The latter describes the by the governing bodies. types of behavior not allowed, and imposes strict compli- ance rules regarding the operation of the business includ- Avolta’s Corporate Governance ing for example zero tolerance for bribery. Avolta believes that good corporate governance is impor- tant to the development of the company, to ensure the sus- In addition, the policies and procedures of Avolta require tainable provision of long-term benefits for shareholders, each team member, officer and director to perform due employees and society. Avolta´s governance system serves diligence and carefully assess new external partners with as a control mechanism in relation to a number of elements, whom Avolta plans to work, including a procedure to be including bribery and corruption, tax, executive remunera- followed to examine all new business partners, consul- tion, shareholders’ voting possibilities and internal control. tants for business development projects, partners for Most of these topics are covered in the Corporate Gover- transactions and M&A, as well as similar counterparts. nance Section of this Annual Report on pages 279 – 309. Where appropriate, these due diligence processes take into account relevant ESG matters, including, in particular, Especially relevant for the sustainability of our industry is bribery risk. the corruption and bribery phenomena, which can be the cause of negative economic, social and environmental im- Second level – There are various governance functions pacts. From a business perspective, corruption distorts the across the organization including the Compliance, Legal, functioning of the market and undermines governance in- Finance, ESG and Human Resources departments in stitutions and in general, the rule of law. charge of monitoring the company’s principal risks and establishing the most appropriate controls to mitigate For Avolta, the subject of corruption is of considerable im- them, as well as ensuring compliance with the policies and portance, as the company expands its operations to many procedures of the company. The scope of the Compliance countries with elevated corruption levels and participates in and Corporate Governance function is based on the fol- many public procurement processes to bid for airport, sea- – Regular review and – where necessary – update as well as each year. Avolta prohibits and has zero tolerance for brib- ensuring compliance with the set of global company pol- ery and corruption at all times and in any form. We believe port, motorways, and other concessions around the globe lowing pillars: icies that in order to remain a solid business leader, all business – Establishment of the overall framework of approvals in- must be conducted ethically and in full compliance with all cluding a policy of “four eyes” for validations applicable laws, rules, and regulations. Avolta requires all of Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 113/336 its team members, officers and directors to behave at all times with honesty, ethically and within the confines of ap- plicable laws as well as in full compliance with Avolta’s Code of Conduct. Where laws, rules or customs exist that are dif- ferent from the principles set out in the Code of Conduct, Avolta team members, officers and directors are required to follow whichever sets the higher standard in this regard. Avolta also expects its team members, officers and direc- tors to fully adhere to the principles of integrity and fair dealing when carrying out activities on behalf of Avolta. This includes promoting standards adopted by the company and as set out in the Code of Conduct with respect to sus- tainability, diversity, decent work and human rights, as well as zero tolerance towards harassment and discrimination. Avolta’s ESG Commitments & Reporting Avolta engages in numerous external initiatives and strate- gic collaborations with organisations and partners to sup- port and inform about our work on the most material sus- tainability issues. It has been grouped the most important and general ones under four different categories, and men- tionned the more specific ones within the four focus areas. Commitments – UNGC – Avolta has been a participant of the UN Global Compact (UNGC) since March 2020 and since then, we have measured and disclosed our progress on the ten principles established by the UNGC. Additionally, Avolta is a participant of the UNGC Swiss Network and regularly participates in conferences and meetings where best practices are shared. – SBTi – During 2022 and early 2023, Dufry sought and gained validation from the SBTi for the emissions reduc- tion targets set for the company (retail business), as de- scribed in detail in the Respect Our Planet section of this report on pages 125 – 126. Reporting – GRI – The Global Reporting Initiative (GRI) helps organiza- tions to be transparent and take responsibility for their impacts, supporting companies to systematically report on the elements that are material for their businesses in a structured and comprehensive way. This reporting per- mits better comparability, greater transparency and alignment with international standards, such as the OECD guidelines for multinational organisations – ISO 26000; the United Nations Guiding Principles on Business and Human Rights; the UNGC’s Ten Principles and the United Nations’ Sustainable Development Goals. Avolta has pre- pared its ESG Report following the guidelines of GRI since the reporting year 2018 and in this edition has adopted the GRI Universal Standards. – TCFD – The Task Force on Climate-Related Financial Dis- closures (TCFD) was created in 2015 by the Financial Sta- bility Board (FSB) to develop consistent climate-related fi- nancial risk disclosures for use by companies, banks and investors in providing information to stakeholders. In the first quarter of 2023, Avolta disclosed its first report fol- lowing the guidelines of TCFD, which covered the report- ing year 2022 and explored the range of the impacts that climate change would have for our business, including both risks and opportunities. Taking into consideration the business combination of Dufry and Autogrill in 2023, Avolta now publishes a combined TCFD Report covering the full scope of the new entity. The TCFD Report 2023 is available at the end of this Annual Report as well as on the Group website: Our Impact | Avolta. – Swiss Requirements regarding Non-Financial Disclo- sure – Avolta publishes annual Non-Financial Reporting in accordance with the requirements regarding transpar- ency on non-financial matters of article 964a et seqq. of the SCO. Assessments and Ratings Avolta is regularly assessed and rated by ESG-specialized rating agencies, including Sustainalytics, MSCI ESG Rat- ings, ISS ESG, Moody’s ESG Solutions (Vigeo Eiris) or In- rate. Avolta´s ESG department engages with ESG analysts to assist them in their assessment of our company and to support their research work. Avolta recognises the value of external feedback from these independent agencies as their work helps us to further develop our lines of action towards strengthening our long-term commitment to be a successful, sustainable business. Industry Initiatives Avolta participates in several industry initiatives geared to- wards consumer and environmental protection. Amongst others, Avolta has contributed to the development of sev- eral Codes of Conduct for the travel retail industry (such as the UK Code of Conduct on Disruptive Passengers and the ETRC and DFWC Codes of Conduct on Sale of Alco- hol), and is a member of the ACI Climate Change Task Force and the ACI Europe Environmental Strategy Com- mittee (ENSTRAT). Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 114/336 Create Sustainable Travel Experiences “Ensuring sustainable ways of travelling. With our partners. For our customers.” GRI indicators: 203-2, 308-1, 414-1, 416-1, 416-2, 417-1, 418-1 SDGs: 3.8 12.8 16.3, 16.10 Making Travelers Happy. This is the ambition outlined in Destination 2027, Avolta’s new strategy aiming at revolu- tionising the travel experience (see dedicated chapter on pages 28 – 55 of this Annual Report). Putting the customer at the core of every decision we make is what has taken Avolta to its leading position in the travel retail and F&B sectors. Within the focus area Create Sustainable Travel Experi- ences Avolta has defined four areas of action: – Sustainable Sourcing & Traceability Expand the adoption of responsible sourcing practices and increase the procurement of sustainable, certified and local products – Supply Chain Management Foster a responsible and ethical management of the supply chain, partnering with suppliers that are atten- tive to social and environmental impacts – Product Quality & Safety Provide high quality & safety standards for the products and ingredients used in all of the Group's channels – Healthy & Sustainable Choices Promote better travel experiences by offering a wide range of healthy and sustainable products, good for both consumers’ and planet’s health Avolta aims to exceed customer expectations by combin- ing the sourcing of unique product choices, the develop- ment of attractive shopping environments and offering an ever-wider array of healthy, safe and high-quality products from controlled and sustainable supply chains. In recogni- tion of these efforts, Avolta received two important awards during 2023: the title of Best Retailer from the Middle East & Africa Duty Free Association (MEADFA) and the winning of six prestigious prizes at the FAB Awards (Airport Food & Beverage Conference & Awards). To ensure high quality for our customers, we give particu- lar attention to a wide variety of topics, such as product and supply chain stewardship when selecting our offers, customer’s privacy and data protection, as well as respon- sible marketing initiatives and communication practices. Moreover, since customers are becoming more conscious regarding the consumption of F&B products, Avolta devel- ops its own F&B concept portfolio in a more responsible way, by opting for certified food ingredients, free from ar- tificial colours or preservatives, and preparing meals with a limited amount of ingredients or natural-origin ones. For a holistic and unique travel experience, one of the core objectives of the Destination 2027 strategy, we focus on three main elements: store design, product and service both in-store and online. As such, when developing and refurbishing its stores and restaurants, Avolta pays partic- ular attention on creating a strong sense of place through the linkage of the shopping and dining environment with the individual country’s cultural heritage where the stores are located. The powerful combination of state-of-the-art outlet designs with local motifs and references, alongside a carefully curated selection of products sourced from lo- cal suppliers, results in unique shopping and eating spaces that enable customers to experience a full cultural immersion in the destination with a true “sense of place”. In total, Avolta sources close to 30 % of its retail products locally and slightly over 70 % globally. Sustainable sourcing & traceability “Expand the adoption of responsible sourcing practices and increase the procurement of sustainable, certified and local products.” Transparent information and labelling Besides offering an innovative travel experience that is tuned with evolving consumer preferences in all the 73 countries in which the company operates, Avolta provides its customers all information necessary for a full under- standing of the ingredients its F&B products contain, en- suring maximum transparency and compliance with label- ling laws. In every country in which it operates, the company complies with laws requiring the communication of food ingredients, especially with respect to allergens. For the retail assortment, all product labelling and cus- tomer information on product specification is managed by the respective brand partners (see dedicated chapter be- low). Sustainable sourcing Customer’s preferences are increasingly shifting towards products that have a reduced impact on the environment, guarantee good working conditions to its employees, and ensure appropriate animal welfare. Worldwide, Avolta has designed an innovative and diversified offer that fits a broader perspective of promoting not only healthier but also more responsible consumption models, geared to- ward reducing environmental impacts and protecting na- ture. In its retail shops, Avolta offers customers the opportunity to choose environmentally and socially friendly retail prod- ucts through its Sustainable Product Identification Initia- tive: a labelling framework that highlights positive environ- mental and social characteristics of products, thus contributing on increasing customer’s awareness on the various sustainability criteria associated to each product. In 2023, this initiative was extended to additional locations and products, which now includes 1,964 retail products from 23 global suppliers across all Avolta´s core product categories and is implemented in 167 retail shops across 126 locations globally. RECYCLABLESUPPORTING LOCALCOMMUNITIESPALM OIL FREESUSTAINABLEPLASTIC FREEVEGAN Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 115/336 Create Sustainable Travel Experiences “Ensuring sustainable ways of travelling. With our partners. For our customers.” GRI indicators: 203-2, 308-1, 414-1, 416-1, 416-2, 417-1, 418-1 SDGs: 3.8 12.8 16.3, 16.10 Making Travelers Happy. This is the ambition outlined in from controlled and sustainable supply chains. In recogni- Destination 2027, Avolta’s new strategy aiming at revolu- tion of these efforts, Avolta received two important tionising the travel experience (see dedicated chapter on awards during 2023: the title of Best Retailer from the pages 28 – 55 of this Annual Report). Putting the customer Middle East & Africa Duty Free Association (MEADFA) and at the core of every decision we make is what has taken the winning of six prestigious prizes at the FAB Awards Avolta to its leading position in the travel retail and F&B (Airport Food & Beverage Conference & Awards). sectors. To ensure high quality for our customers, we give particu- Within the focus area Create Sustainable Travel Experi- lar attention to a wide variety of topics, such as product ences Avolta has defined four areas of action: – Sustainable Sourcing & Traceability and supply chain stewardship when selecting our offers, customer’s privacy and data protection, as well as respon- Expand the adoption of responsible sourcing practices sible marketing initiatives and communication practices. and increase the procurement of sustainable, certified Moreover, since customers are becoming more conscious and local products – Supply Chain Management regarding the consumption of F&B products, Avolta devel- ops its own F&B concept portfolio in a more responsible Foster a responsible and ethical management of the way, by opting for certified food ingredients, free from ar- supply chain, partnering with suppliers that are atten- tificial colours or preservatives, and preparing meals with tive to social and environmental impacts a limited amount of ingredients or natural-origin ones. – Product Quality & Safety Provide high quality & safety standards for the products For a holistic and unique travel experience, one of the core and ingredients used in all of the Group's channels objectives of the Destination 2027 strategy, we focus on – Healthy & Sustainable Choices three main elements: store design, product and service Promote better travel experiences by offering a wide both in-store and online. As such, when developing and range of healthy and sustainable products, good for refurbishing its stores and restaurants, Avolta pays partic- both consumers’ and planet’s health ular attention on creating a strong sense of place through the linkage of the shopping and dining environment with Avolta aims to exceed customer expectations by combin- the individual country’s cultural heritage where the stores ing the sourcing of unique product choices, the develop- are located. The powerful combination of state-of-the-art ment of attractive shopping environments and offering an outlet designs with local motifs and references, alongside ever-wider array of healthy, safe and high-quality products a carefully curated selection of products sourced from lo- cal suppliers, results in unique shopping and eating spaces that enable customers to experience a full cultural immersion in the destination with a true “sense of place”. In total, Avolta sources close to 30 % of its retail products locally and slightly over 70 % globally. Sustainable sourcing & traceability “Expand the adoption of responsible sourcing practices and increase the procurement of sustainable, certified and local products.” Transparent information and labelling Besides offering an innovative travel experience that is tuned with evolving consumer preferences in all the 73 countries in which the company operates, Avolta provides its customers all information necessary for a full under- standing of the ingredients its F&B products contain, en- suring maximum transparency and compliance with label- ling laws. In every country in which it operates, the company complies with laws requiring the communication of food ingredients, especially with respect to allergens. For the retail assortment, all product labelling and cus- tomer information on product specification is managed by the respective brand partners (see dedicated chapter be- low). Sustainable sourcing Customer’s preferences are increasingly shifting towards products that have a reduced impact on the environment, guarantee good working conditions to its employees, and ensure appropriate animal welfare. Worldwide, Avolta has designed an innovative and diversified offer that fits a broader perspective of promoting not only healthier but also more responsible consumption models, geared to- ward reducing environmental impacts and protecting na- ture. In its retail shops, Avolta offers customers the opportunity to choose environmentally and socially friendly retail prod- ucts through its Sustainable Product Identification Initia- tive: a labelling framework that highlights positive environ- mental and social characteristics of products, thus contributing on increasing customer’s awareness on the various sustainability criteria associated to each product. In 2023, this initiative was extended to additional locations and products, which now includes 1,964 retail products from 23 global suppliers across all Avolta´s core product categories and is implemented in 167 retail shops across 126 locations globally. RECYCLABLESUPPORTING LOCALCOMMUNITIESPALM OIL FREESUSTAINABLEPLASTIC FREEVEGAN Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 116/336 In our F&B operations we committed to building a more sustainable supply chain of the ingredients and raw mate- rials, hence many of our suppliers participate in national and international initiatives like the Better Life Label for im- proved animal welfare, Fair Trade, and the RSPO (Round- table on Sustainable Palm Oil), especially in EMEA countries. Avolta is also aware that ensuring animal welfare, in accor- dance with regulations, standards, and international best practices is an important component of a responsible supply chain. In our main F&B countries1 – representing over 90 % of our F&B turnover – 84 % of eggs purchased are cage-free, reaching 100 % in Belgium, Germany, Italy, The Netherlands, and Switzerland. 1 Belgium, Canada, France, Germany, Italy, Switzerland, The Netherlands, USA Foodbuy In North America, Avolta works with Foodbuy for the F&B business. Part of the Compass Group since 2007, Foodbuy is the leading pro- curement company for food & beverage ser- vices and has made several commitments to ensure high standards of food safety and sus- tainability. All our North American F&B suppli- ers in the Foodbuy network undergo regular audits on central issues such as human & labour rights, business integrity, diversity & inclusion and environmental sustainability. Any potential risks related to specific sourcing geographies or product related topics are considered by these audits. All requests for proposals for new concessions or renewals include category- specific questions on the supplier’s social re- sponsibility, in order to assess their handling of social and environmental aspects. In 2023 the Group bought F&B products from 370 Food- buy-approved suppliers with one or more cer- tifications, NAE, including USDA Organic and Bio-Based (US Department of Agriculture), BPI Biodegradable (Biodegradable Products Institute), Cedar Grove Compostable, GAP Steps, Cage-free, HFAC, Reduced Antibiotics, Monterey Bay Yellow/Green, MSC, Salmon Safe, Rainforest Alliance, Bird-friendly, Eco- logo, Green Seal, FSC, and SFI. Supply chain management detailed insights on how we assume our responsibility con- Healthy and sustainable choice “Foster a responsible and ethical management of the supply chain, partnering with suppliers attentive to social and environ- mental impacts.” For the travel retail business, Avolta neither produces any retail items nor sells any white-label products, except for a pilot private-label assortment, including for example, des- tination products first introduced in late 2022. All the prod- ucts available on our retail stores are produced by third party companies, which Avolta expects to comply with the law, stipulated contract conditions and international best practices with respect to human rights, the environment, health & safety and labour standards. To guarantee that our retail and F&B suppliers meet our strict environmental and social requirements, Avolta has developed a combined version of the previous Dufry and Autogrill Supplier Code of Conduct, which stipulates the main social and environ- mental requirements to be fulfilled to become an Avolta supplier. Supplier Code of Conduct Avolta’s Supplier Code of Conduct is designed to ensure that its retail and F&B providers conduct their operations in an ethical and legal manner, applying accepted business stan- dards, as described by the UN Global Com- pact, regarding: – Ethics and integrity – Labor and employment practices and working conditions – Anti-money laundering and anti-terrorism – Environmental compliance and sustainability – Product quality and safety To ensure the implementation of a responsible supply chain management with respect to social and environmen- tal matters, Avolta expects its suppliers to maintain finan- cial, operational and business records in accordance with applicable legal requirements and generally accepted ac- counting practices, and to establish a procedure that gives to its employees the possibility to report possible concerns for unethical actions. Reflecting the ESG Governance as explained in the Corpo- rate Governance chapter on page 296, both the Supplier Code of Conduct and the Avolta Code of Conduct provide cerning social, ethical and environmental standards, and how we put into practice the principles of sustainable de- velopment in our day-to-day work, thus ultimately also ex- ecuting on this respective due diligence task. Both Codes were assessed and aligned as part of the business combi- nation of Dufry and Autogrill to ensure their relevance both for our retail and our F&B businesses, reflecting develop- ments in law, regulation and professional ethics. Both Codes are available in the sustainability section of our web- site: www.avoltaworld.com. t c u d n o C f o r e i l p p u S e d o C 3 2 0 2 “Promote better travel experi- ences by offering a wide range of healthy and sustainable products, good for both consumers’ and planet’s health.” Since our customers’ expectations have been constantly evolving, becoming even more sophisticated and oriented towards higher sustainable standards, Avolta constantly monitors its customers' satisfaction and analyzes their changing needs with its Customer Experience Tracking & Survey. Through a set of structured processes, we analyze the attitudes and behaviors of global travelers and identify new market trends, along with new concepts, healthy & sustainable products, and innovative services to offer to our customers. As described in its Destination 2027 strategy, Avolta col- laborates with brand and concession partners to launch a travel experience revolution by customizing the offerings for travelers, including new categories and exclusive prod- ucts that address the new sustainable customer behavior trends. In our F&B business we strive to meet as many di- To secure the suppliers’ agreement with and / or acknowl- etary needs and preferences as possible by developing in- edgement of the Supplier Code of Conduct, a three-year novative and diversified concepts, menus and recipes in follow-up reassessment cycle is observed. collaboration with many industry experts, nutritionists and science communicators, making sure we fulfil the World In 2023, following the release of the Avolta Supplier Code Health Organization’s recommendations. of Conduct, we started a new recertification cycle process reaching out to suppliers who had previously signed the Over time, several collaborations with sector specialists Dufry Code, and expanded the reach of the Code by add- resulted in a series of healthy and sustainable food alter- ing new suppliers from across all main retail product cat- natives. These include the partnership with nutritionist- egories and F&B. In total 441 suppliers, accounting for physician Mauro Mario Mariani and chef Luca Montersino 49 % of total company COGS 2023, signed or acknowl- for the development of the 'Piatto Unico Bilanciato' in Italy, edged the Avolta Supplier Code of Conduct. With regards a balanced single meal that guarantees the correct to the retail sector, where the supplier certification has combination of different nutrients, and the innovative been underway for a few years, in 2023, we increased the WOW Burger: the 100 % vegan sandwich created in our number of suppliers certified to 157 (2022: 152), represent- «Factory- Food Designers» in Milan in collaboration with ing 57 % of 2023 retail COGS (2022: 52 %). vegan chef Simone Salvini and Nestlé Garden Gourmet, is available in Italy and in our proprietary restaurants in some On top of monitoring suppliers to ensure compliance with EMEA countries like France and Switzerland. the principles established in Avolta´s Supplier Code of Conduct, the company will continue to reach out to addi- To ensure a constant development of innovative products, tional suppliers, including new ones, going forward. leveraging Avolta's high expertise in the F&B sector, two Centers of Excellence have been opened in the EMEA re- gion: the Factory-Food Designers in Milan and the Food Services in Amsterdam. These centers are designed to stimulate creativity and develop new ideas, F&B concepts and receipes – supported by specialists from different backgrounds (chefs, pastry chefs, nutritionists, small and local producers, food bloggers, and designers) and also In our F&B operations we committed to building a more Supply chain management sustainable supply chain of the ingredients and raw mate- rials, hence many of our suppliers participate in national and international initiatives like the Better Life Label for im- proved animal welfare, Fair Trade, and the RSPO (Round- table on Sustainable Palm Oil), especially in EMEA countries. Avolta is also aware that ensuring animal welfare, in accor- dance with regulations, standards, and international best “Foster a responsible and ethical management of the supply chain, partnering with suppliers attentive to social and environ- mental impacts.” practices is an important component of a responsible For the travel retail business, Avolta neither produces any supply chain. In our main F&B countries1 – representing retail items nor sells any white-label products, except for a over 90 % of our F&B turnover – 84 % of eggs purchased pilot private-label assortment, including for example, des- are cage-free, reaching 100 % in Belgium, Germany, Italy, tination products first introduced in late 2022. All the prod- The Netherlands, and Switzerland. 1 Belgium, Canada, France, Germany, Italy, Switzerland, The Netherlands, USA ucts available on our retail stores are produced by third party companies, which Avolta expects to comply with the law, stipulated contract conditions and international best practices with respect to human rights, the environment, health & safety and labour standards. To guarantee that our retail and F&B suppliers meet our strict environmental and Foodbuy In North America, Avolta works with Foodbuy social requirements, Avolta has developed a combined for the F&B business. Part of the Compass version of the previous Dufry and Autogrill Supplier Code Group since 2007, Foodbuy is the leading pro- of Conduct, which stipulates the main social and environ- curement company for food & beverage ser- mental requirements to be fulfilled to become an Avolta vices and has made several commitments to supplier. ensure high standards of food safety and sus- tainability. All our North American F&B suppli- ers in the Foodbuy network undergo regular audits on central issues such as human & labour rights, business integrity, diversity & inclusion and environmental sustainability. Any potential risks related to specific sourcing geographies or product related topics are considered by these audits. All requests for proposals for new concessions or renewals include category- specific questions on the supplier’s social re- sponsibility, in order to assess their handling of social and environmental aspects. In 2023 the Group bought F&B products from 370 Food- buy-approved suppliers with one or more cer- tifications, NAE, including USDA Organic and Bio-Based (US Department of Agriculture), BPI Biodegradable (Biodegradable Products Institute), Cedar Grove Compostable, GAP Monterey Bay Yellow/Green, MSC, Salmon Safe, Rainforest Alliance, Bird-friendly, Eco- logo, Green Seal, FSC, and SFI. Supplier Code of Conduct Avolta’s Supplier Code of Conduct is designed to ensure that its retail and F&B providers conduct their operations in an ethical and legal manner, applying accepted business stan- dards, as described by the UN Global Com- pact, regarding: – Ethics and integrity – Labor and employment practices and working conditions – Anti-money laundering and anti-terrorism – Environmental compliance and sustainability – Product quality and safety tal matters, Avolta expects its suppliers to maintain finan- cial, operational and business records in accordance with applicable legal requirements and generally accepted ac- counting practices, and to establish a procedure that gives to its employees the possibility to report possible concerns for unethical actions. Reflecting the ESG Governance as explained in the Corpo- rate Governance chapter on page 296, both the Supplier Code of Conduct and the Avolta Code of Conduct provide Steps, Cage-free, HFAC, Reduced Antibiotics, chain management with respect to social and environmen- To ensure the implementation of a responsible supply Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 117/336 detailed insights on how we assume our responsibility con- cerning social, ethical and environmental standards, and how we put into practice the principles of sustainable de- velopment in our day-to-day work, thus ultimately also ex- ecuting on this respective due diligence task. Both Codes were assessed and aligned as part of the business combi- nation of Dufry and Autogrill to ensure their relevance both for our retail and our F&B businesses, reflecting develop- ments in law, regulation and professional ethics. Both Codes are available in the sustainability section of our web- site: www.avoltaworld.com. t c u d n o C f o r e i l p p u S e d o C 3 2 0 2 To secure the suppliers’ agreement with and / or acknowl- edgement of the Supplier Code of Conduct, a three-year follow-up reassessment cycle is observed. In 2023, following the release of the Avolta Supplier Code of Conduct, we started a new recertification cycle process reaching out to suppliers who had previously signed the Dufry Code, and expanded the reach of the Code by add- ing new suppliers from across all main retail product cat- egories and F&B. In total 441 suppliers, accounting for 49 % of total company COGS 2023, signed or acknowl- edged the Avolta Supplier Code of Conduct. With regards to the retail sector, where the supplier certification has been underway for a few years, in 2023, we increased the number of suppliers certified to 157 (2022: 152), represent- ing 57 % of 2023 retail COGS (2022: 52 %). On top of monitoring suppliers to ensure compliance with the principles established in Avolta´s Supplier Code of Conduct, the company will continue to reach out to addi- tional suppliers, including new ones, going forward. Healthy and sustainable choice “Promote better travel experi- ences by offering a wide range of healthy and sustainable products, good for both consumers’ and planet’s health.” Since our customers’ expectations have been constantly evolving, becoming even more sophisticated and oriented towards higher sustainable standards, Avolta constantly monitors its customers' satisfaction and analyzes their changing needs with its Customer Experience Tracking & Survey. Through a set of structured processes, we analyze the attitudes and behaviors of global travelers and identify new market trends, along with new concepts, healthy & sustainable products, and innovative services to offer to our customers. As described in its Destination 2027 strategy, Avolta col- laborates with brand and concession partners to launch a travel experience revolution by customizing the offerings for travelers, including new categories and exclusive prod- ucts that address the new sustainable customer behavior trends. In our F&B business we strive to meet as many di- etary needs and preferences as possible by developing in- novative and diversified concepts, menus and recipes in collaboration with many industry experts, nutritionists and science communicators, making sure we fulfil the World Health Organization’s recommendations. Over time, several collaborations with sector specialists resulted in a series of healthy and sustainable food alter- natives. These include the partnership with nutritionist- physician Mauro Mario Mariani and chef Luca Montersino for the development of the 'Piatto Unico Bilanciato' in Italy, a balanced single meal that guarantees the correct combination of different nutrients, and the innovative WOW Burger: the 100 % vegan sandwich created in our «Factory- Food Designers» in Milan in collaboration with vegan chef Simone Salvini and Nestlé Garden Gourmet, is available in Italy and in our proprietary restaurants in some EMEA countries like France and Switzerland. To ensure a constant development of innovative products, leveraging Avolta's high expertise in the F&B sector, two Centers of Excellence have been opened in the EMEA re- gion: the Factory-Food Designers in Milan and the Food Services in Amsterdam. These centers are designed to stimulate creativity and develop new ideas, F&B concepts and receipes – supported by specialists from different backgrounds (chefs, pastry chefs, nutritionists, small and local producers, food bloggers, and designers) and also Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 118/336 include the Green Lab – a dedicated R&D studio where health and sustainability converge, creating innovative recipes in line with new trends. The Food Services Center of Excellence in Amsterdam, is focused on the develop- ment of international concepts and the management of company F&B brand portfolio – composed by internal, ex- ternal and franchise brands – and related products. themes: Stay Healthy, Relax, Feel Better and Travel Com- fort. The majority of the selection includes locally sourced and innovative brands but also already established global brands. This concept is currently implemented in 11 coun- tries and 13 locations globally. HUDSON CAFÉ MILANO tasty and trendy F&B products, serving not only healthy Product quality & safety but also environmentally friendly menu items such as organic coffee and teas, poke bowls and fresh smoothies. To ensure fully transparent customer communication, the product labels contain both the complete ingredients list as well as the health benefits they bring. “Provide high quality & safety standards for the products and ingredients used in all of the company's channels.” WASCOFFE LAB Healthy and sustainable concepts Avolta’s commitment to provide our customers globally a well-diversified healthy and sustainable offer results in a wide global portfolio of retail and F&B concepts that offer compelling alternatives for both our customers’ health and the safeguarding of our planet. Among recent open- ings, the following concepts were particularly distinctive for their seamless blending of wellbeing and environmen- tal offerings as key elements contributing to our Destina- tion 2027 travel revolution. MIND.BODY.SOUL. The Hudson Café Milano, opened in Milano Malpensa air- port is Avolta’s first hybrid concept combining cafeteria and bookstore. Through this new concept we want to offer our consumers an integrated travel experience that allows them to both shop and enjoy a relaxing break. In the Hud- son Café, Avolta not only sells a wide range of books and newspapers, but also offers a wide assortment of food and beverage products including coffee, pastries and bakery from both Italian and international cuisine, satisfying the different preferences of our consumers. To offer quick and healthy alternatives, the Hudson Café features a selection of healthy grab & go products such as fruit, poke bowls and yogurt, as well as vegan and vegetarian options. FRESH ISO 9001:2015 on Quality Management Systems Italy (F&B: all stores managed by Autogrill Italia S.p.A. and Nuova Sidap) Food quality, health and safety certifications Applies to: To meet the increasing consumer interest in purchasing healthier and more wellbeing related products, Avolta de- veloped the retail concept mind.body.soul. The “shop-in shop” concept offers a range of nutritious and energy fo- cused food for health-conscious customers, alongside sustainable and relaxing products that promote a true sense of wellbeing. Products from a broad spectrum of categories and brands are displayed under four different Pursuing sensory and emotional pleasure and preserving physical well-being are two key principles of our proprie- tary concept FRESH, at Bali I Ngurah Rai International Air- port, Kuala Lumpur International Airport and Gold Coast International Airport. FRESH offers a wide range of natural, FSSAI (Food Safety and Standards Authority of India) India (F&B: all stores in Bangalore, Hyderabad, and Delhi airports) NVWA (Netherlands Food and Consumer Product Safety Authority) Netherlands (F&B: all stores) NSF Certificate of Food Hygiene and Safety Switzerland, Norway (F&B: selected stores) UK (F&B: all stores) Malaysia (F&B: selected stores) Selling products that meet high standards of quality and safety is extremely important for our company. Our pro- curement teams focus on sourcing products from a reli- able supply base. The majority of the products that we sell are heavily regulated (e.g. alcohol & tobacco but also beauty and food) and Avolta is committed to compliance with the applicable regulations and rules in all the coun- tries where it operates. Across all our restaurants, high-quality ingredients that are used for our recipes and meals are prepared under strict hygiene and sanitary conditions, in compliance with local and international regulations. These offers are peri- odically audited and taught to workers through frequent The WASCOFFEE LAB – available in three locations in Italy training and awareness programs. The quality and safety – is Avolta's first concept made entirely from WAS- of F&B products served are reinforced by an expansive, COFFEE®, the 100 % natural and recyclable material cre- tightly structured management system that begins with ated from recovered coffee grounds and used for the de- the supplier selection. Before doing business with Avolta, sign and furnishings of the shops. Its minimalist and cosy all F&B suppliers go through a pre-approval process to ambience, inspired by the specialty coffee trend, and the test their level of compliance with the company’s food gastronomic offerings satisfy the new consumption mod- quality and safety standards. The process includes micro- els. The menu meets the needs of different traveler pro- biological content and chemical / physical analyses along files and offers healthy and plant-based alternatives. the entire supply chain, which are evaluated from a risk as- ISO 22000 on Food Safety Management Italy (F&B: all stores managed by Autogrill Italia S.p.A.) Austria (F&B: all stores) Australia, Malaysia (F&B: selected stores) Austria, Malaysia (F&B: all stores) Greece (F&B: Hellas LTD) India (F&B: Hyderabad Airport) ISO 9001:2015 (provision of technical project management services) Italy (Milan HQ) ISO 45001 Italy (Milan HQ and F&B airport locations) Halal certification from MUI (Majelis Ulama Indonesia) Switzerland (F&B: Seven spices in Geneva & Zürich airports and Diverse Food Safety program all stores at Bern railway station) India (F&B: all stores in Bangalore, Hyderabad, and Delhi airports) Indonesia (F&B: selected stores in Jakarta and Bali airports) Netherlands (F&B: all stores) Switzerland, Norway (F&B: selected stores) Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 119/336 tasty and trendy F&B products, serving not only healthy but also environmentally friendly menu items such as organic coffee and teas, poke bowls and fresh smoothies. To ensure fully transparent customer communication, the product labels contain both the complete ingredients list as well as the health benefits they bring. Product quality & safety “Provide high quality & safety standards for the products and ingredients used in all of the company's channels.” WASCOFFEE LAB The WASCOFFEE LAB – available in three locations in Italy – is Avolta's first concept made entirely from WAS- COFFEE®, the 100 % natural and recyclable material cre- ated from recovered coffee grounds and used for the de- sign and furnishings of the shops. Its minimalist and cosy ambience, inspired by the specialty coffee trend, and the gastronomic offerings satisfy the new consumption mod- els. The menu meets the needs of different traveler pro- files and offers healthy and plant-based alternatives. Selling products that meet high standards of quality and safety is extremely important for our company. Our pro- curement teams focus on sourcing products from a reli- able supply base. The majority of the products that we sell are heavily regulated (e.g. alcohol & tobacco but also beauty and food) and Avolta is committed to compliance with the applicable regulations and rules in all the coun- tries where it operates. Across all our restaurants, high-quality ingredients that are used for our recipes and meals are prepared under strict hygiene and sanitary conditions, in compliance with local and international regulations. These offers are peri- odically audited and taught to workers through frequent training and awareness programs. The quality and safety of F&B products served are reinforced by an expansive, tightly structured management system that begins with the supplier selection. Before doing business with Avolta, all F&B suppliers go through a pre-approval process to test their level of compliance with the company’s food quality and safety standards. The process includes micro- biological content and chemical / physical analyses along the entire supply chain, which are evaluated from a risk as- Food quality, health and safety certifications Applies to: ISO 9001:2015 on Quality Management Systems ISO 22000 on Food Safety Management Italy (F&B: all stores managed by Autogrill Italia S.p.A. and Nuova Sidap) Austria (F&B: all stores) Australia, Malaysia (F&B: selected stores) Italy (F&B: all stores managed by Autogrill Italia S.p.A.) Austria, Malaysia (F&B: all stores) Greece (F&B: Hellas LTD) India (F&B: Hyderabad Airport) ISO 9001:2015 (provision of technical project management services) Italy (Milan HQ) ISO 45001 Italy (Milan HQ and F&B airport locations) Halal certification from MUI (Majelis Ulama Indonesia) Diverse Food Safety program Switzerland (F&B: Seven spices in Geneva & Zürich airports and all stores at Bern railway station) India (F&B: all stores in Bangalore, Hyderabad, and Delhi airports) Indonesia (F&B: selected stores in Jakarta and Bali airports) Netherlands (F&B: all stores) Switzerland, Norway (F&B: selected stores) FSSAI (Food Safety and Standards Authority of India) India (F&B: all stores in Bangalore, Hyderabad, and Delhi airports) NVWA (Netherlands Food and Consumer Product Safety Authority) NSF Certificate of Food Hygiene and Safety Netherlands (F&B: all stores) Switzerland, Norway (F&B: selected stores) UK (F&B: all stores) Malaysia (F&B: selected stores) Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 120/336 sessment perspective. Once they become Avolta suppli- ers, they are periodically screened by way of question- naires, direct or indirect information gathering, location checks as well as food safety and quality audits. Also, as a brand licensee, the company itself is subject to audits by its brand and concession partners. In addition to these F&B assessment procedures, there is a self-screening program falling within the management system used in the various countries, i.e. a set of centrally coordinated procedures carried out on-site to ensure compliance with all hygiene and sanitary standards. Al- ways striving for improvement, the company has adopted various safeguards and concrete actions to maintain the highest levels of food quality and safety. These address food safety standards and HACCP processes involving nu- merous food safety courses in the various business units, both classroom-taught and online. Frequent audits are carried out to check compliance with quality and safety standards at the F&B outlets in the different regions. In 2023, 93 % of Avolta’s F&B stores in 26 countries received Quality & Safety audits. In some countries, internal monitor- ing is paralleled by audits conducted by third parties and qualified personnel. Responsible marketing Avolta is well aware of its marketing responsibilities and ob- serves all laws with respect to promoting products and ser- vices and in particular with respect to alcohol and tobacco. Its responsibility also includes marketing practices adopted and communication activities launched both in-store and through our pre- and post-sale points of contact with cus- tomers, including product warranties and refund policies. Cooperation with Duty Free World Council and US National Restaurant Association Avolta 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. The Code – called «Responsible Retailer of Alcohol Products» – complements other codes and guidelines followed by individual alcohol manufacturing companies or other bodies, is widely accepted by most travel retailers world- wide and was signed and implemented by Avolta in 2017. The Code defines clear guide- lines for commercial communications, sales of alcoholic products in the travel retail and duty-free environments and for tasting at the point of sale. The Code of Conduct is publicly available from the DFWC website: www.dfworldcouncil.com. Since 2021 we ob- tained the DFWC Responsible Retailer accredi- tation, after members of our staff involved in the sale of alcohol products – both at store and office levels – were trained on the abovemen- tioned code through a DFWC developed train- ing module. This important training is incorpo- rated into Avolta´s training catalogue and the company continues to train all the team mem- bers who are involved in the sale of alcoholic products. By the end of 2023, over 3,400 of our team members had obtained that certification. In addition, over 2,400 team members working in F&B concepts serving alcoholic beverages were trained to responsible serving practices. This brings to over 5,800 the number of people in the company trained to sell and serve re- sponsibly alcoholic beverages. In North Ameri- can we developed the Serve Safe Alcohol program in collaboration with the National Res- taurant Association: an initiative to train all frontline employees on how to properly serve alcoholic beverages. Finally, we launched the «We ID» campaign to raise consumers’ aware- ness about safe drinking which is still ongoing. The campaign requires all customers to pres- ent identification when they purchase alcohol. Customer Service – it does not end at the shopping till In 2023, our global customer service team of the retail business answered 250,047 queries (compared to 154,242 in 2022). Out of all these customer contacts, 39,814 were customer complaints, 146,012 were information requests, 60,281 were requests for services, 3,885 were compli- ments and 55 were suggestions. The remaining queries are related to contacts received that do not refer to Avolta or that the customer does not respond to. The main causes of complaints were as follows: – Billing Overcharges – Damaged product complaints – R & C complaints – Red By Dufry missing points – Wrong products delivered. Case resolution time was, on average, less than six days. Customer privacy and data protection Avolta is committed to safeguarding the privacy of its cus- tomers and their personal information. The company has implemented the necessary management and cyber se- curity systems to treat any customer’s personal informa- tion as confidential. This also includes securely storing personal information – such as for example name, sur- name, email address or loyalty card number – to prevent unauthorized access to it, along with ensuring that such personal information is only collected, used and otherwise processed for legitimate business purposes in accor- dance with applicable laws, the Privacy Notice and Avolta´s Code of Conduct (both accessible in the company´s web- system and a number of internal policies and procedures site www.avoltaworld.com). Online transactions complying with applicable laws and regulations. This is all included in the company’s Global Information Security Policy, which is aligned with the international security Avolta doesn’t handle online transactions that include frameworks ISO 27000 and the National Institute of Stan- payment for duty-free goods – exceptions are made for dards and Technology (NIST). Avolta performs regular some locations and for the food & beverage sector, where tests of its systems and takes several measures to improve respective customs regulations allow. Our Reserve & Col- cyber security, prevent malware infections and avoid data lect service only allows customers to reserve retail prod- breaches. Amongst others, Avolta: – Encrypts customer, ucts and collect them at their preferred airport location at payment and any sensitive data and limits access to it; – the time the customer flies. Normally, however, it is not un- Keeps software up-to-date by installing updates and se- til customers collect the products and show their board- curity patches; – Secures point of sale (POS) devices and ing passes as required, that the payment is processed. applications; – Performs regular vulnerability testing to This is due to customs regulations that only permit Avolta identify weaknesses; – Monitors all activity in Avolta’s sys- to sell duty-free products at the airport location itself. In tems and data for any anomalous activity and indications some countries where we operate in the food & beverage of threats; – Uses (and promotes amongst its employees) sector, it is possible to use systems and apps such as secure passwords and two-factor authentication; – Runs Click & Good and Your Order Please to order and pay in antivirus software continuously, periodically scanning sys- advance, in compliance with Avolta's high cyber security tems for malicious files; – Has introduced advanced Mal- standards. ware protection; – Has PCI certifications in place in most of the countries where it operates; – Has established a global security monitoring and protection system over- Data protection structure and audits Avolta has a Global Data Protection Coordinator (Global seeing Avolta’s cloud services. DPC) who reports to the Chief Compliance Officer. The data protection organization relies on a decentralized Security Awareness Program structure, with local data protection coordinators (Local As part of the Security Awareness Program, Avolta con- DPCs) in the relevant countries. The Local DPCs bear the ducts regular internal communications campaigns and responsibility for data protection matters within their both mandatory and optional training for all team mem- scope of operations. Our employees, as well as third-par- bers regardless of function and location. The content of ties who provide services on Avolta’s behalf, are required this communication and training program includes rele- by policy and process, as well as by contract, if applicable, vant and individual steps towards achieving a secure IT en- to treat customer information with care and confidential- vironment, including: – PCI DSS Awareness – Secure Re- ity. Our processes are designed to preclude unnecessary mote Working – Phishing & Ransomware – Password access to confidential information and Avolta has admin- Safety – Privacy and Data Protection – Social Engineering istrative, technical and physical safeguards that reflect this – Global Information Security Policies – Global Policy of obligation. Avolta regularly reviews and enhances related Acceptable Use of Technology – Data Leak Prevention. procedures and policies. The Group also undertakes inter- nal Data Protection Audits and intrusion tests on a regular basis, while periodic meetings are held to discuss and im- prove the protection of customers’ personal data. Anyone wishing to report a grievance or ask a question regarding Avolta’s data privacy policy, or to access, delete, correct or transfer their personal information, can address such data subject requests to: privacy@avolta.net. Cyber security Avolta is continuously monitoring, reviewing and upgrad- ing its processes to protect its business from potential cy- ber security threats that ultimately could end with theft of data. At a global level, Avolta has a Global IT Security Team that is responsible for keeping IT threats away from Avol- ta’s business, understanding emerging threats and invest- ing in the necessary technology to mitigate potential new risks. In this regard, Avolta has a number of systems and security processes in place, including a robust IT security sessment perspective. Once they become Avolta suppli- www.dfworldcouncil.com. Since 2021 we ob- ers, they are periodically screened by way of question- tained the DFWC Responsible Retailer accredi- naires, direct or indirect information gathering, location tation, after members of our staff involved in checks as well as food safety and quality audits. Also, as a the sale of alcohol products – both at store and brand licensee, the company itself is subject to audits by office levels – were trained on the abovemen- its brand and concession partners. tioned code through a DFWC developed train- ing module. This important training is incorpo- In addition to these F&B assessment procedures, there is a rated into Avolta´s training catalogue and the self-screening program falling within the management company continues to train all the team mem- system used in the various countries, i.e. a set of centrally bers who are involved in the sale of alcoholic coordinated procedures carried out on-site to ensure products. By the end of 2023, over 3,400 of our compliance with all hygiene and sanitary standards. Al- team members had obtained that certification. ways striving for improvement, the company has adopted In addition, over 2,400 team members working various safeguards and concrete actions to maintain the in F&B concepts serving alcoholic beverages highest levels of food quality and safety. These address were trained to responsible serving practices. food safety standards and HACCP processes involving nu- This brings to over 5,800 the number of people merous food safety courses in the various business units, in the company trained to sell and serve re- both classroom-taught and online. Frequent audits are sponsibly alcoholic beverages. In North Ameri- carried out to check compliance with quality and safety can we developed the Serve Safe Alcohol standards at the F&B outlets in the different regions. In program in collaboration with the National Res- 2023, 93 % of Avolta’s F&B stores in 26 countries received taurant Association: an initiative to train all Quality & Safety audits. In some countries, internal monitor- frontline employees on how to properly serve ing is paralleled by audits conducted by third parties and alcoholic beverages. Finally, we launched the qualified personnel. Responsible marketing «We ID» campaign to raise consumers’ aware- ness about safe drinking which is still ongoing. The campaign requires all customers to pres- Avolta is well aware of its marketing responsibilities and ob- ent identification when they purchase alcohol. serves all laws with respect to promoting products and ser- vices and in particular with respect to alcohol and tobacco. Its responsibility also includes marketing practices adopted Customer Service – it does not end at the shopping till and communication activities launched both in-store and In 2023, our global customer service team of the retail through our pre- and post-sale points of contact with cus- business answered 250,047 queries (compared to 154,242 tomers, including product warranties and refund policies. in 2022). Out of all these customer contacts, 39,814 were Cooperation with Duty Free World Council and US National Restaurant Association customer complaints, 146,012 were information requests, 60,281 were requests for services, 3,885 were compli- ments and 55 were suggestions. The remaining queries are related to contacts received that do not refer to Avolta or that the customer does not respond to. The main causes of complaints were as follows: – Billing Overcharges – Avolta has contributed to the development Damaged product complaints – R & C complaints – Red By of the Duty Free World Council´s (DFWC) Self- Dufry missing points – Wrong products delivered. Case Regulatory Code of Conduct for the Sale of resolution time was, on average, less than six days. Alcohol Products in Duty Free & Travel Retail. The Code – called «Responsible Retailer of Customer privacy and data protection Alcohol Products» – complements other codes Avolta is committed to safeguarding the privacy of its cus- and guidelines followed by individual alcohol tomers and their personal information. The company has manufacturing companies or other bodies, is implemented the necessary management and cyber se- widely accepted by most travel retailers world- curity systems to treat any customer’s personal informa- wide and was signed and implemented by Avolta in 2017. The Code defines clear guide- lines for commercial communications, sales of alcoholic products in the travel retail and tion as confidential. This also includes securely storing personal information – such as for example name, sur- name, email address or loyalty card number – to prevent unauthorized access to it, along with ensuring that such duty-free environments and for tasting at the personal information is only collected, used and otherwise point of sale. The Code of Conduct is publicly processed for legitimate business purposes in accor- available from the DFWC website: dance with applicable laws, the Privacy Notice and Avolta´s Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 121/336 system and a number of internal policies and procedures complying with applicable laws and regulations. This is all included in the company’s Global Information Security Policy, which is aligned with the international security frameworks ISO 27000 and the National Institute of Stan- dards and Technology (NIST). Avolta performs regular tests of its systems and takes several measures to improve cyber security, prevent malware infections and avoid data breaches. Amongst others, Avolta: – Encrypts customer, payment and any sensitive data and limits access to it; – Keeps software up-to-date by installing updates and se- curity patches; – Secures point of sale (POS) devices and applications; – Performs regular vulnerability testing to identify weaknesses; – Monitors all activity in Avolta’s sys- tems 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 sys- tems for malicious files; – Has introduced advanced Mal- ware protection; – Has PCI certifications in place in most of the countries where it operates; – Has established a global security monitoring and protection system over- seeing Avolta’s cloud services. Security Awareness Program As part of the Security Awareness Program, Avolta con- ducts regular internal communications campaigns and both mandatory and optional training for all team mem- bers regardless of function and location. The content of this communication and training program includes rele- vant and individual steps towards achieving a secure IT en- vironment, including: – PCI DSS Awareness – Secure Re- mote Working – Phishing & Ransomware – Password Safety – Privacy and Data Protection – Social Engineering – Global Information Security Policies – Global Policy of Acceptable Use of Technology – Data Leak Prevention. Code of Conduct (both accessible in the company´s web- site www.avoltaworld.com). Online transactions Avolta doesn’t handle online transactions that include payment for duty-free goods – exceptions are made for some locations and for the food & beverage sector, where respective customs regulations allow. Our Reserve & Col- lect service only allows customers to reserve retail prod- ucts and collect them at their preferred airport location at the time the customer flies. Normally, however, it is not un- til customers collect the products and show their board- ing passes as required, that the payment is processed. This is due to customs regulations that only permit Avolta to sell duty-free products at the airport location itself. In some countries where we operate in the food & beverage sector, it is possible to use systems and apps such as Click & Good and Your Order Please to order and pay in advance, in compliance with Avolta's high cyber security standards. Data protection structure and audits Avolta has a Global Data Protection Coordinator (Global DPC) who reports to the Chief Compliance Officer. The data protection organization relies on a decentralized structure, with local data protection coordinators (Local DPCs) in the relevant countries. The Local DPCs bear the responsibility for data protection matters within their scope of operations. Our employees, as well as third-par- ties who provide services on Avolta’s behalf, are required by policy and process, as well as by contract, if applicable, to treat customer information with care and confidential- ity. Our processes are designed to preclude unnecessary access to confidential information and Avolta has admin- istrative, technical and physical safeguards that reflect this obligation. Avolta regularly reviews and enhances related procedures and policies. The Group also undertakes inter- nal Data Protection Audits and intrusion tests on a regular basis, while periodic meetings are held to discuss and im- prove the protection of customers’ personal data. Anyone wishing to report a grievance or ask a question regarding Avolta’s data privacy policy, or to access, delete, correct or transfer their personal information, can address such data subject requests to: privacy@avolta.net. Cyber security Avolta is continuously monitoring, reviewing and upgrad- ing its processes to protect its business from potential cy- ber security threats that ultimately could end with theft of data. At a global level, Avolta has a Global IT Security Team that is responsible for keeping IT threats away from Avol- ta’s business, understanding emerging threats and invest- ing in the necessary technology to mitigate potential new risks. In this regard, Avolta has a number of systems and security processes in place, including a robust IT security Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 122/336 Respect Our Planet “Reducing our footprint, increasing our consciousness.” GRI indicators: 302-1, 302-3, 303-1, 303-3, 305-1, 305-2, 305-3, 305-4, 305-5, 306-1, 306-2, 306-3, 306-4, 306-5 SDGs: 6.4, 6.6 7.2, 7.3 8.4 11.6 12.2, 12.4, 12.5 13.1 14.3 15.1, 15.2 Avolta is committed to conducting business in an environ- mentally conscious manner to respect the planet. Climate Task Force as well as the ACI Europe Environmen- tal Strategy Committee (ENVSTRAT). Avolta regularly assesses the environmental reach of its commercial activity and works towards minimizing its im- pact. Considering the wider impact scope resulting from the business combination of Dufry and Autogrill com- pleted in 2023, the combined entity started to reassess its environmental impact to cover the complete scope where possible, or prepared the ground for a full coverage in the business year 2024 – this in particular with respect to the restatement of certain environmental and climate-related targets. Within the focus area «Respect the Planet» Avolta has de- fined three areas of action: – Climate change, Energy & Emissions Measure Scope 1, 2 and 3 GHG emissions and reduce our footprint in our operations and along the value chain. – Waste & Packaging Measure and reduce the generation of waste and promote circular economy practices. – Water & Biodiversity Reduce water withdrawal in our operations and promote the restoration of habitats along the value chain. Avolta recognizes the importance of international initiatives to promote action to preserve the planet. Accordingly, Avolta, a participant of the UN Global Compact, adopts the commitment of taking a precautionary approach to its op- erations, supports the UN Nations to drive awareness of the Sustainability Development Goals (SDGs), and participates in a number of industry initiatives, such as the ACI Europe Due to the special nature of the travel retail and F&B indus- try in which Avolta operates, we traditionally cooperate closely with third parties, in particular with concession part- ners, brand suppliers and logistics providers, towards re- ducing the environmental impact of the business and con- tributing to implement circular economies where possible. This collaboration always focuses on becoming a more sus- tainable business by promoting effective use of resources – especially energy and water – across the operations and supply chain. We further aim at minimizing the generation of unnecessary waste, adopting new technologies that contribute to the reduction on environmental impacts in- creasing our efforts on recycling practices, and supporting our customers in their objective of choosing and consum- ing more sustainable products or healthy nutrition. With the exception of our motorway operations, Avolta typ- ically operates shops and restaurants in highly regulated, third-party owned premises such as airports, train stations, cruise ships & ferries, seaports and downtown locations. This means that for most of our stores and restaurants, a large proportion of its utility consumption – such as elec- tricity – Avolta cannot directly influence sourcing of these resources as predetermined by the concession partners and the given building construction. Moreover, Avolta – for its retail business – does not develop own products, does not operate any own manufacturing sites, and sells third- party products directly sourced from its brand partners. Similarly, for the F&B business, Avolta does not have dedi- cated production sites outside the locations operated. In general the products and menus offered are cooked di- – Management of risks and impacts by establishing objec- rectly in kitchens located in the back of the store. However, tives, programs and plans that promote the continuous the company leverages third party suppliers who develop improvement. F&B recipes following Avolta’s proprietary brands' culinary – Environmental training of the company’s professionals in guidelines or franchised brands’ guidelines. collaboration with the HR training department. Consequently, the company concentrates its energy-sav- In this regard, we regularly engage in constructive dia- ing and emission reduction efforts mainly in the areas of logue with stakeholders in the areas in which we can ac- product sourcing, in-store equipment, supply chain & lo- tively influence the environmental footprint, to assess the gistics, its own office premises and in the design of new impact and eventually implement measures to minimize or stores or in the refurbishment efforts of existing locations. even offset the impact. As a complement to the compa- With respect to shop and restaurant design, the focus is ny’s Environmental Management System, Avolta has a set on the related construction materials, fitting equipment, of Environmental Management Guidelines that define the lighting and energy star certified kitchen appliances environmental principles to follow when it comes to cli- meeting several sustainability criteria and following inter- mate change and efficiency, resource consumption and nationally recognized standards such as LEED or internal shop development. These guidelines are available in the guidelines such as the Green Store Guideline imple- sustainability section of Avolta´s corporate website: www. mented for the whole F&B part of the business. avoltaworld.com. l a t n e m n o r i v n E t n e m e g a n a M s e n i l e d i u G a t l o v A Avolta´s environmental management system Avolta has established an environmental management sys- tem that permits the company to assess and understand its impact on the environment with a systematic and con- sistent approach, 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 in- fluence our footprint, we have already actioned specific ini- tiatives to reduce our footprint, such as the replacement of plastic bags (see page 128) and replacing our F&B guest packaging with more sustainable alternatives for the envi- ronment, in line with national and international law regula- tions (see page 129). In other circumstances, where our business model provides less potential of directly influenc- ing our footprint, Avolta significantly increases its stake- Avolta has formally adopted the precautionary approach principle to its operations. The company follows a consis- tent process to assess its operations from an environmen- tal perspective, to identify current or future environmen- tal impacts of its activities and to promote initiatives that respect the environmental balance and comply with exist- holder dialogue – mainly with airports and supply chain – Climate change, energy and emissions to explore opportunities to reduce the impact further. “Measure Scope 1, 2 and 3 GHG emissions and reduce our foot- print in our operations and along the value chain.” ing environmental laws and regulations. Reducing resource consumption To better assess and understand its environmental im- Avolta´s environmental management system, supervised pact, Avolta has identified five different business areas and implemented by the ESG Department, permits placing that permit to assess, track and, in a second stage, to im- the environment at the center of decision-making through: plement the necessary measures and goals to minimize – Assessment of environmental risks of its activities, facil- resource consumption, emissions and impact of its activ- ities, products and services on a regular basis, improv- ity. These include the third-party production of the goods ing and updating the mechanisms designed to prevent, sold in our stores and restaurants (supply chain), goods mitigate or eradicate them. transportations, warehouses, shops and office environ- – Ongoing identification, assessment and mitigation of the ments. environmental impacts of the company's activities, facil- ities, products and services. Respect Our Planet “Reducing our footprint, increasing our consciousness.” 302-1, 302-3, 303-1, 303-3, 305-1, 305-2, 305-3, 305-4, 305-5, 306-1, GRI indicators: 306-2, 306-3, 306-4, 306-5 SDGs: 6.4, 6.6 7.2, 7.3 8.4 11.6 13.1 14.3 15.1, 15.2 12.2, 12.4, 12.5 Avolta is committed to conducting business in an environ- Climate Task Force as well as the ACI Europe Environmen- mentally conscious manner to respect the planet. tal Strategy Committee (ENVSTRAT). Avolta regularly assesses the environmental reach of its Due to the special nature of the travel retail and F&B indus- commercial activity and works towards minimizing its im- try in which Avolta operates, we traditionally cooperate pact. Considering the wider impact scope resulting from closely with third parties, in particular with concession part- the business combination of Dufry and Autogrill com- ners, brand suppliers and logistics providers, towards re- pleted in 2023, the combined entity started to reassess its ducing the environmental impact of the business and con- environmental impact to cover the complete scope where tributing to implement circular economies where possible. possible, or prepared the ground for a full coverage in the This collaboration always focuses on becoming a more sus- business year 2024 – this in particular with respect to the tainable business by promoting effective use of resources restatement of certain environmental and climate-related – especially energy and water – across the operations and targets. supply chain. We further aim at minimizing the generation of unnecessary waste, adopting new technologies that Within the focus area «Respect the Planet» Avolta has de- contribute to the reduction on environmental impacts in- fined three areas of action: – Climate change, Energy & Emissions creasing our efforts on recycling practices, and supporting our customers in their objective of choosing and consum- Measure Scope 1, 2 and 3 GHG emissions and reduce ing more sustainable products or healthy nutrition. our footprint in our operations and along the value chain. – Waste & Packaging With the exception of our motorway operations, Avolta typ- Measure and reduce the generation of waste and promote ically operates shops and restaurants in highly regulated, circular economy practices. – Water & Biodiversity third-party owned premises such as airports, train stations, cruise ships & ferries, seaports and downtown locations. Reduce water withdrawal in our operations and promote This means that for most of our stores and restaurants, a the restoration of habitats along the value chain. large proportion of its utility consumption – such as elec- tricity – Avolta cannot directly influence sourcing of these Avolta recognizes the importance of international initiatives resources as predetermined by the concession partners to promote action to preserve the planet. Accordingly, and the given building construction. Moreover, Avolta – for Avolta, a participant of the UN Global Compact, adopts the its retail business – does not develop own products, does commitment of taking a precautionary approach to its op- not operate any own manufacturing sites, and sells third- erations, supports the UN Nations to drive awareness of the party products directly sourced from its brand partners. Sustainability Development Goals (SDGs), and participates Similarly, for the F&B business, Avolta does not have dedi- in a number of industry initiatives, such as the ACI Europe cated production sites outside the locations operated. In Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 123/336 general the products and menus offered are cooked di- rectly in kitchens located in the back of the store. However, the company leverages third party suppliers who develop F&B recipes following Avolta’s proprietary brands' culinary guidelines or franchised brands’ guidelines. – Management of risks and impacts by establishing objec- tives, programs and plans that promote the continuous improvement. – Environmental training of the company’s professionals in collaboration with the HR training department. Consequently, the company concentrates its energy-sav- ing and emission reduction efforts mainly in the areas of product sourcing, in-store equipment, supply chain & lo- gistics, its own office premises and in the design of new stores or in the refurbishment efforts of existing locations. With respect to shop and restaurant design, the focus is on the related construction materials, fitting equipment, lighting and energy star certified kitchen appliances meeting several sustainability criteria and following inter- nationally recognized standards such as LEED or internal guidelines such as the Green Store Guideline imple- mented for the whole F&B part of the business. In this regard, we regularly engage in constructive dia- logue with stakeholders in the areas in which we can ac- tively influence the environmental footprint, to assess the impact and eventually implement measures to minimize or even offset the impact. As a complement to the compa- ny’s Environmental Management System, Avolta has a set of Environmental Management Guidelines that define the environmental principles to follow when it comes to cli- mate change and efficiency, resource consumption and shop development. These guidelines are available in the sustainability section of Avolta´s corporate website: www. avoltaworld.com. Avolta´s environmental management system Avolta has established an environmental management sys- tem that permits the company to assess and understand its impact on the environment with a systematic and con- sistent approach, 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 in- fluence our footprint, we have already actioned specific ini- tiatives to reduce our footprint, such as the replacement of plastic bags (see page 128) and replacing our F&B guest packaging with more sustainable alternatives for the envi- ronment, in line with national and international law regula- tions (see page 129). In other circumstances, where our business model provides less potential of directly influenc- ing our footprint, Avolta significantly increases its stake- holder dialogue – mainly with airports and supply chain – to explore opportunities to reduce the impact further. Avolta has formally adopted the precautionary approach principle to its operations. The company follows a consis- tent process to assess its operations from an environmen- tal perspective, to identify current or future environmen- tal impacts of its activities and to promote initiatives that respect the environmental balance and comply with exist- ing environmental laws and regulations. Avolta´s environmental management system, supervised and implemented by the ESG Department, permits placing the environment at the center of decision-making through: – Assessment of environmental risks of its activities, facil- ities, products and services on a regular basis, improv- ing and updating the mechanisms designed to prevent, mitigate or eradicate them. – Ongoing identification, assessment and mitigation of the environmental impacts of the company's activities, facil- ities, products and services. l a t n e m n o r i v n E t n e m e g a n a M s e n i l i e d u G a t l o v A Climate change, energy and emissions “Measure Scope 1, 2 and 3 GHG emissions and reduce our foot- print in our operations and along the value chain.” Reducing resource consumption To better assess and understand its environmental im- pact, Avolta has identified five different business areas that permit to assess, track and, in a second stage, to im- plement the necessary measures and goals to minimize resource consumption, emissions and impact of its activ- ity. These include the third-party production of the goods sold in our stores and restaurants (supply chain), goods transportations, warehouses, shops and office environ- ments. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 124/336 With respect to the types of resources used and the infor- mation collected, electricity and fuel consumption are the most material aspects of our footprint. With respect to wa- ter consumption, there are two relevant aspects. In the context of the typical travel retail operations water con- sumption is marginal and restricted to normal use by our employees and cleaning services within our premises. Within the F&B business, water consumption is more rele- vant although it does not emerge among the most rele- vant material matters, since the intensity of water with- drawal of our restaurants and bars is very low compared to other industries. Nevertheless, being aware of the po- tential impact inefficient water usage has on the environ- ment and climate change, Avolta has decided to include water in its updated and combined materiality matrix. Stores & restaurants Most of the electric energy consumption of Avolta´s activ- ity occurs in the store and restaurant environment. Light- ing, refrigeration, cooking and air-conditioning of over 5,100 stores and restaurants are the largest contributors to our energy consumption and, consequently, to our CO2 footprint. The direct influencing capability of Avolta on these is however limited, due to the nature of our business. Avolta stores and restaurants are mostly located in third- party owned premises and in highly regulated environ- ments, where Avolta has in general less impact when se- lecting energy and electricity sources. The concern for reducing the CO2 footprint from energy consumption has been raised in a large number of air- ports where Avolta operates and concession partners have initiated plans to move to green energy sourcing. Al- though this movement works towards the reduction of our Scope 2 emissions, in 2021, Avolta had defined – as further described in page 126 – its own CO2 reduction plan to in- vest in climate protection initiatives to counter-balance non-avoidable Scope 1 and Scope 2 emissions by 2025 re- gardless of the efforts already initiated by some of our air- port partners. This plan (see also dedicated section on page 126) was, and in 2023 continued to be based, on the retail operations of the company based on 2019 data and remains in place until 2024 – when the reduction plan will be formally restated to cover the complete scope of the new combined entity and including both the travel retail and the F&B business. Distribution centers and warehouses The second-largest contributor to Avolta´s environmental footprint is the transportation of goods. For its retail and F&B operations Avolta operates three main distribution centers in Uruguay, Switzerland and Hong Kong, which then operate additional warehouses in Hong Kong, Runny- mede (UK), Barcelona (Spain), Miami (USA) and Covo (Italy), to provide timely shipping of goods to our operations. These main logistics centers receive major shipments from the suppliers and further distribute products to our respec- tive operations. Whenever possible, retail-related freight is preferably carried by sea and we aim to consistently select the most efficient means of transport in terms of CO2 emis- sions. Furthermore, the vast majority of our long-haul logis- tics partners are either ISO 14001 accredited and/or have strong environmental management procedures in place. Additionally, we have over 25 local warehouses, which re- distribute goods received from the central warehouses to the operations. These are located where Avolta holds sev- eral significant operations within the same country in terms of volumes transported. In general, distribution to individ- ual stores is done by road. The same applies to the F&B business due to its more local character. These road trans- ports are mostly outsourced to national and international specialized partners, some of which have implemented their own environmental strategies. Such strategies include optimizing routes to use as little fuel as possible, the peri- odic upgrading of fleets with low-emission vehicles and the use of additives (such as AdBlue) to reduce pollutants emit- ted by diesel-fueled trucks and vans. In Italy, Avolta’s logis- tics partner is taking various steps to mitigate the emissions produced by distributing our products, namely by replac- ing the most obsolete vehicles with natural gas or Euro 6 models and prioritizing deliveries of higher loads. In the Netherlands, contracts with major distributors were revised in 2022 and led to the purchasing of the first electric trucks, which currently secure logistics between the local ware- house and Schiphol airport. Only a minimal part of the company’s transportation – mostly in the UK – is done with an Avolta-managed transportation fleet. Through the high efficiency in our logistics chain, we ensure that the environ- mental impact of transporting goods is kept to a minimum. The vast majority of shipments of goods from the suppli- er’s site to Avolta’s Distribution Centers is excluded from the assessment, as these emissions lie within the ESG re- sponsibility of the suppliers. As part of its own emission re- duction targets, Avolta actively engages with suppliers to discuss and encourage footprint reduction opportunities. Office environment Beyond stores, restaurants and warehouses, Avolta has of- fice premises in a number of operations across the world. Main ones include the company´s Headquarter offices in Basel (CH), Bedfont Lakes in Feltham (UK), Madrid (ESP), Mi- lan (IT), Amsterdam (NL), East Rutherford (US), Bethesda (US), Miami (US) and Rio de Janeiro (BR). Within these prem- ises, energy consumption is mostly related to lighting and heating. A number of individual measures, such as auto- matic switch off for lighting and heating systems, presence of detector activators and staff awareness campaigns, were implemented in Avolta’s offices to reduce utility consump- tion. Additionally, we advise our employees to question the 2 Includes consumption of Avolta-managed goods transportation in Egypt, Jordan, Morocco, United Arab Emirates and the United Kingdom as well as necessity of any travel and consider using alternatives to diesel and gas for heating purposes. travel, such as virtual meeting systems (videoconferences, teleconferences, live computer meetings, etc.) and we pro- mote more environmental alternatives for our employees’ daily commuting, such as public transport offers. Combined global electricity measurement achieved in 2023 In 2023, Avolta has made first priority to extend its elec- tricity consumption measurement system – previously covering the retail operations – to include also the F&B lo- cations, thus reflecting the high importance of electricity consumption of the company’s CO2 footprint. Based on the utility invoices issued by concession partners for the 3 Scope 2 emissions for year 2023 are reported under the “market-based” approach. They include the contribution of Renewable Energy Certivicates (RECs). Average emission factors used: IEA 2023, trade-adjusted for OECD countries. Applying the “location-based” approach, the emissions amount to 137,558 tCO2eq. 4 Scope 3 emissions only include data from logistics partners accounting for 87 % of total volume of good transported globally in 2023 (2022: 83 %; 2021: 64 %; 2020 & 2019: 55 %). Not included here are the product purchasing related Scope 3 emissions or other Scope 3 emission categories. 5 Carbon intensity calculated over the total net sales of Avolta in tCO2eq. per million CHF. The carbon intensity calculated over the total square meters of commercial surface operated in the retail sector amounts to 0.727 tCO2eq / m2 (Total area 2023: 477,464 m2). For 2022 and previous years the carbon inten- sity data are not comparable with the new reality of Avolta, since they were calculated over the total square meters of commercial surface operated within the retail sector (ex. Dufry). year 2023, we have identified emissions and resource Our CO2 Footprint consumption for operations covering over 90 % of total re- Avolta follows the Greenhouse Gas Protocol (GHGP) stan- tail sales. By reaching such a high figure, we have been dards to report CO2 emissions. This protocol is the most able to extrapolate the information and estimate total widely used international accounting framework for gov- emissions for all commercial spaces. The setup of this ex- ernments and businesses to understand, quantify and tended data gathering process will provide the base to re- manage greenhouse gas emissions and classifies emis- state the emission reduction plan for scopes 1 and 2 of the sions into three scopes: combined group in 2024. – Scope 1: Energy Consumption in MWh 2023 2022 2021 2020 2019 Electricity 1 465,175 103,669 85,756 92,148 120,857 Fuels 2 Total 41,847 6,188 4,027 3,091 6,900 507,022 109,857 89,783 95,239 127,757 Greenhouse Gas Emissions in tons of Co2-EQ. 2023 2022 2021 2020 2019 9,506 1,524 935 717 1,736 Direct greenhouse gas emissions from sources owned by the company. For Avolta, Scope 1 emissions are limited to those from the fuel used by Avolta-managed transportation fleets and fossil fuels and gas used mainly for heating and cooking purposes – Scope 2: – Scope 3: Indirect greenhouse gas emissions from electricity use. In the case of Avolta, these include electricity consump- tion in stores, restaurants, offices and warehouses These are the emissions released by third parties when they provide their services to Avolta. For Avolta, Scope 3 emissions come mainly from purchased goods (Scope 3 category 1). Other relevant emissions are related to capital goods (category 2), upstream trans- 126,021 18,900 19,813 21,290 27,923 portation & logistics (category 4), employee travels 18,057 7,509 3,728 1,451 10,766 (category 7), and use of sold products (category 11). 153,584 27,934 24,477 23,475 40,425 Scope 1 2 Scope 2 1,3 Scope 3 4 Total Carbon Intensity Carbon Intensity5 Tons of CO2-eq, / MCHF net sales 1 Energy consumption is based on reported data from single locations. For missing data concerning US F&B scope, an extrapolation has been con- ducted to estimate consumption for 2023. Thereof, 48,000 MWh were pur- chased with Renewable Energy Certificates (RECs). 2023 data are not compa- rable with previous years, since they reflect the new scope of the company (retail + F&B activities). Data from 2022 to previous years reflect only the retail business sector (ex. Dufry). Data of the years 2022, 2021 and 2020 are not comparable with 2019 due to temporary shop closures during Covid 19. Compared to other companies, Avolta has a singular emission structure and – unlike other businesses where Scope 1, 2 and 3 emissions are in a similar order of magni- tude – its carbon footprint is vastly dominated by the car- bon emissions caused by the production of its purchased goods and meals sold to our customers (in the base year 2019 e.g. about 90 % of total emissions). 2023 10.8 Delivering on our SBTi reduction targets In 2021, Avolta defined science-based emission reduction targets for its retail business, thus recognizing the crucial role the business community can play in minimizing the cli- mate change risk. Science-based targets are greenhouse gas emissions reduction targets that are in line with the With respect to the types of resources used and the infor- These main logistics centers receive major shipments from mation collected, electricity and fuel consumption are the the suppliers and further distribute products to our respec- most material aspects of our footprint. With respect to wa- tive operations. Whenever possible, retail-related freight is ter consumption, there are two relevant aspects. In the preferably carried by sea and we aim to consistently select context of the typical travel retail operations water con- the most efficient means of transport in terms of CO2 emis- sumption is marginal and restricted to normal use by our sions. Furthermore, the vast majority of our long-haul logis- employees and cleaning services within our premises. tics partners are either ISO 14001 accredited and/or have Within the F&B business, water consumption is more rele- strong environmental management procedures in place. vant although it does not emerge among the most rele- vant material matters, since the intensity of water with- Additionally, we have over 25 local warehouses, which re- drawal of our restaurants and bars is very low compared distribute goods received from the central warehouses to to other industries. Nevertheless, being aware of the po- the operations. These are located where Avolta holds sev- tential impact inefficient water usage has on the environ- eral significant operations within the same country in terms ment and climate change, Avolta has decided to include of volumes transported. In general, distribution to individ- water in its updated and combined materiality matrix. ual stores is done by road. The same applies to the F&B Stores & restaurants business due to its more local character. These road trans- ports are mostly outsourced to national and international Most of the electric energy consumption of Avolta´s activ- specialized partners, some of which have implemented ity occurs in the store and restaurant environment. Light- their own environmental strategies. Such strategies include ing, refrigeration, cooking and air-conditioning of over optimizing routes to use as little fuel as possible, the peri- 5,100 stores and restaurants are the largest contributors odic upgrading of fleets with low-emission vehicles and the to our energy consumption and, consequently, to our CO2 use of additives (such as AdBlue) to reduce pollutants emit- footprint. The direct influencing capability of Avolta on ted by diesel-fueled trucks and vans. In Italy, Avolta’s logis- these is however limited, due to the nature of our business. tics partner is taking various steps to mitigate the emissions Avolta stores and restaurants are mostly located in third- produced by distributing our products, namely by replac- party owned premises and in highly regulated environ- ing the most obsolete vehicles with natural gas or Euro 6 ments, where Avolta has in general less impact when se- models and prioritizing deliveries of higher loads. In the lecting energy and electricity sources. Netherlands, contracts with major distributors were revised in 2022 and led to the purchasing of the first electric trucks, The concern for reducing the CO2 footprint from energy which currently secure logistics between the local ware- consumption has been raised in a large number of air- house and Schiphol airport. Only a minimal part of the ports where Avolta operates and concession partners company’s transportation – mostly in the UK – is done with have initiated plans to move to green energy sourcing. Al- an Avolta-managed transportation fleet. Through the high though this movement works towards the reduction of our efficiency in our logistics chain, we ensure that the environ- Scope 2 emissions, in 2021, Avolta had defined – as further mental impact of transporting goods is kept to a minimum. described in page 126 – its own CO2 reduction plan to in- vest in climate protection initiatives to counter-balance The vast majority of shipments of goods from the suppli- non-avoidable Scope 1 and Scope 2 emissions by 2025 re- er’s site to Avolta’s Distribution Centers is excluded from gardless of the efforts already initiated by some of our air- the assessment, as these emissions lie within the ESG re- port partners. This plan (see also dedicated section on sponsibility of the suppliers. As part of its own emission re- page 126) was, and in 2023 continued to be based, on the duction targets, Avolta actively engages with suppliers to retail operations of the company based on 2019 data and discuss and encourage footprint reduction opportunities. remains in place until 2024 – when the reduction plan will be formally restated to cover the complete scope of the Office environment new combined entity and including both the travel retail Beyond stores, restaurants and warehouses, Avolta has of- and the F&B business. Distribution centers and warehouses fice premises in a number of operations across the world. Main ones include the company´s Headquarter offices in Basel (CH), Bedfont Lakes in Feltham (UK), Madrid (ESP), Mi- The second-largest contributor to Avolta´s environmental lan (IT), Amsterdam (NL), East Rutherford (US), Bethesda footprint is the transportation of goods. For its retail and (US), Miami (US) and Rio de Janeiro (BR). Within these prem- F&B operations Avolta operates three main distribution ises, energy consumption is mostly related to lighting and centers in Uruguay, Switzerland and Hong Kong, which heating. A number of individual measures, such as auto- then operate additional warehouses in Hong Kong, Runny- matic switch off for lighting and heating systems, presence mede (UK), Barcelona (Spain), Miami (USA) and Covo (Italy), of detector activators and staff awareness campaigns, were to provide timely shipping of goods to our operations. implemented in Avolta’s offices to reduce utility consump- Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 125/336 tion. Additionally, we advise our employees to question the necessity of any travel and consider using alternatives to travel, such as virtual meeting systems (videoconferences, teleconferences, live computer meetings, etc.) and we pro- mote more environmental alternatives for our employees’ daily commuting, such as public transport offers. Combined global electricity measurement achieved in 2023 In 2023, Avolta has made first priority to extend its elec- tricity consumption measurement system – previously covering the retail operations – to include also the F&B lo- cations, thus reflecting the high importance of electricity consumption of the company’s CO2 footprint. Based on the utility invoices issued by concession partners for the year 2023, we have identified emissions and resource consumption for operations covering over 90 % of total re- tail sales. By reaching such a high figure, we have been able to extrapolate the information and estimate total emissions for all commercial spaces. The setup of this ex- tended data gathering process will provide the base to re- state the emission reduction plan for scopes 1 and 2 of the combined group in 2024. Energy Consumption in MWh 2023 2022 2021 2020 2019 Electricity 1 465,175 103,669 85,756 92,148 120,857 Fuels 2 Total 41,847 6,188 4,027 3,091 6,900 507,022 109,857 89,783 95,239 127,757 Greenhouse Gas Emissions in tons of Co2-EQ. 2023 2022 2021 2020 2019 Scope 1 2 Scope 2 1,3 Scope 3 4 Total 9,506 1,524 935 717 1,736 126,021 18,900 19,813 21,290 27,923 18,057 7,509 3,728 1,451 10,766 153,584 27,934 24,477 23,475 40,425 2 Includes consumption of Avolta-managed goods transportation in Egypt, Jordan, Morocco, United Arab Emirates and the United Kingdom as well as diesel and gas for heating purposes. 3 Scope 2 emissions for year 2023 are reported under the “market-based” approach. They include the contribution of Renewable Energy Certivicates (RECs). Average emission factors used: IEA 2023, trade-adjusted for OECD countries. Applying the “location-based” approach, the emissions amount to 137,558 tCO2eq. 4 Scope 3 emissions only include data from logistics partners accounting for 87 % of total volume of good transported globally in 2023 (2022: 83 %; 2021: 64 %; 2020 & 2019: 55 %). Not included here are the product purchasing related Scope 3 emissions or other Scope 3 emission categories. 5 Carbon intensity calculated over the total net sales of Avolta in tCO2eq. per million CHF. The carbon intensity calculated over the total square meters of commercial surface operated in the retail sector amounts to 0.727 tCO2eq / m2 (Total area 2023: 477,464 m2). For 2022 and previous years the carbon inten- sity data are not comparable with the new reality of Avolta, since they were calculated over the total square meters of commercial surface operated within the retail sector (ex. Dufry). Our CO2 Footprint Avolta follows the Greenhouse Gas Protocol (GHGP) stan- dards to report CO2 emissions. This protocol is the most widely used international accounting framework for gov- ernments and businesses to understand, quantify and manage greenhouse gas emissions and classifies emis- sions into three scopes: – Scope 1: Direct greenhouse gas emissions from sources owned by the company. For Avolta, Scope 1 emissions are limited to those from the fuel used by Avolta-managed transportation fleets and fossil fuels and gas used mainly for heating and cooking purposes – Scope 2: Indirect greenhouse gas emissions from electricity use. In the case of Avolta, these include electricity consump- tion in stores, restaurants, offices and warehouses – Scope 3: These are the emissions released by third parties when they provide their services to Avolta. For Avolta, Scope 3 emissions come mainly from purchased goods (Scope 3 category 1). Other relevant emissions are related to capital goods (category 2), upstream trans- portation & logistics (category 4), employee travels (category 7), and use of sold products (category 11). Carbon Intensity Carbon Intensity5 Tons of CO2-eq, / MCHF net sales Compared to other companies, Avolta has a singular emission structure and – unlike other businesses where Scope 1, 2 and 3 emissions are in a similar order of magni- tude – its carbon footprint is vastly dominated by the car- bon emissions caused by the production of its purchased goods and meals sold to our customers (in the base year 2019 e.g. about 90 % of total emissions). 2023 10.8 1 Energy consumption is based on reported data from single locations. For missing data concerning US F&B scope, an extrapolation has been con- ducted to estimate consumption for 2023. Thereof, 48,000 MWh were pur- chased with Renewable Energy Certificates (RECs). 2023 data are not compa- rable with previous years, since they reflect the new scope of the company (retail + F&B activities). Data from 2022 to previous years reflect only the retail business sector (ex. Dufry). Data of the years 2022, 2021 and 2020 are not comparable with 2019 due to temporary shop closures during Covid 19. Delivering on our SBTi reduction targets In 2021, Avolta defined science-based emission reduction targets for its retail business, thus recognizing the crucial role the business community can play in minimizing the cli- mate change risk. Science-based targets are greenhouse gas emissions reduction targets that are in line with the Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 126/336 level of decarbonization required to meet the goals of the Paris Agreement – to limit global warming to 1.5°C. After committing to the Science Based Targets initiative in spring 2022, Avolta submitted emission reduction targets for its retail operations following the SBTi guidance (SBTi Target Validation Protocol). SBTi validated Avolta’s emis- sion reduction targets for the retail business (former Dufry) in early 2023. Based on a comprehensive analysis of its business model and emissions profile commissioned to a third-party con- sultant, Avolta has established an emission reduction strat- egy for Scope 1 & 2 emissions for its retail business which follows SBTi’s 1.5°C pathway. It will eliminate emissions from its own operations through energy efficiency mea- sures and commits to increase annual sourcing of renew- able electricity from 0 % in 2019 to 100 % by 2025. In addi- tion, Avolta wants to invest into climate protection to counter-balance non-avoidable emissions of its own retail operations (Scope 1 & 2 emissions) by 2025 with carbon off- setting initiatives to be defined in the near future. For Scope 3 emissions, Avolta follows SBTi´s well below 2°C pathway with two separate objectives to be achieved through both supplier engagement programs, and the col- laboration with its logistic partners. The targets mentioned above relate to the retail business and the company's – for- mer Dufry – retail business scope 2022, and the related 2019 base, and are planned to be revised and restated in 2024 to cover the full combined entity. Emission reduction targets as validated by SBTi – Avolta* commits to reduce absolute Scope 1 & 2 GHG emissions by 94.2 % by 2030 (from the 2019 base year). – Avolta* commits to increase annual sourcing of renewable electricity from 0 % in 2019 to 100 % by 2025 and to continue annually sourc- ing 100 % renewable electricity through 2030. – Avolta* commits that 74 % of its suppliers by emissions covering purchased goods and ser- vices will have science-based targets by 2027. – Avolta* commits to reduce absolute Scope 3 GHG emissions of upstream transportation emissions by 28 % by 2030. *All targets listed above are based on the com- pany's – former Dufry – retail business scope 2022, and the related 2019 base data. Our progress in 2023 Scope 1 & 2 objective – During 2023, Avolta has further in- creased its electricity sourcing of renewable energy from 20 % in 2022 to 40 % by purchasing Renewable Energy Certificates (RECs) (using 2019 as a baseline). As an example, these RECs cover the equivalent of our to- tal electricity consumption of our operations in the UK, Brazil, Switzerland, India and China, and permit Avolta to compensate over 11,500 tons of CO2-eq. Avolta will con- tinue with its RECs purchasing program during 2024 to cover, at least, an additional 20 % of its electricity con- sumption. Scope 3 objective – In 2023, Avolta has consolidated its enlarged supplier landscape and mapped the related lo- gistics suppliers’ landscape as a base to design its future emissions reduction plan for our goods transportation. By building on the former engagement with its logistic part- ner community reductions will be achieved by rationaliz- ing shipments of goods and by selecting means of trans- portation with a lower carbon footprint. On the latter, we will give preference to lower impact transportation sys- tems (like rail) when possible; will prioritize the use of sus- tainable fuels for our air routes; and will focus the delivery of goods using Liquefied Natural Gas (LNG) carriers for the long-haul shipments. For short-haul distances mainly cov- ered by road focus will be set on including use of electric vehicles and renewing transportation fleets to the newest technological standards with lowest emission levels. This plan, originally planned to be established during 2023, will now be finalized in 2024 to consider the new and enlarged company scope created by the business combination and allowing Avolta to achieve its targets also from a combined entity perspective. Back in 2022 the company had conducted a preliminary assessment of its main retail suppliers to revise their emis- sion reduction strategies towards reducing emissions and committing to SBTi. While the findings were preliminary, Avolta was and still is confident to achieve the targets val- idated in early 2023 (covering only the retail business) on time. Sustainable design & refurbishment for restaurants & shops Avolta takes a sustainability approach when designing, constructing and refurbishing restaurants and stores. In the design phase and the selection of materials, we choose the most environmentally friendly options and use locally sourced furniture and materials whenever possible, to re- duce environmental impact. Additionally, as described in the Waste chapter below, materials created from waste re- cycling are reintegrated in the construction operating pro- cess thus supporting a more circular economy. The shop design department is centrally organized at a LED) on ceiling and furniture displays, and on using A- or global level. It develops guidelines and defines several in- A+ rated electronic devices (e.g. air conditioning, refriger- dustry standards enabling us to create attractive commer- ators) in our retail stores, resulting in a significant drop in cial environments, while at the same time reducing energy the overall energy consumption. Additionally, Avolta fo- consumption by using renewable or recycled materials. To cuses on permanently optimizing energy efficiency of the this end, specific policies are in place to manage the use of kitchen appliances also supported by innovative cocking materials: timber policy, cement and virgin aggregates pol- methods to use less energy. icy, hazardous chemicals policy, guidelines and energy tar- gets for brand partners for the supply of branded display The sustainability approach to store construction however devices. These guidelines have to be followed by local con- goes beyond the environmental dimension. When select- struction teams and their respective sourcing of materials. ing local construction partners, we ensure that they also Following LEED principles comply with social and environmental regulations, hence, ensuring that the efforts initiated in our design studio also During the shop development and refurbishment phase, result in truly sustainable environments and spaces for our Avolta follows the principles established by leading green- customers. building certification programs, such as the Leadership in Energy and Environmental Design (LEED) recommenda- tions. In this regard, Avolta: Waste & packaging – Sustainably designs and plans new restaurant and store developments and refurbishments considering all as- pects, from visioning to renovation preparation, including: – Comprehensive metering of existing energy consump- tion – Introduction of solutions to improve traffic flow, intro- “Measure and reduce the generation of waste and promote circular practices.” duction of smarter construction materials (easier to Avoiding any waste in the first place or recycling it is an ef- clean, anti-bacterial, etc.) fective way to save valuable resources. Avolta’s waste pro- – Reduces use of natural resources by re-using materials file is mainly influenced by two specific areas. With re- and equipment by giving modular and recyclable design spect to the travel retail business it includes mainly to furniture and other mobile elements of the stores and transportation packaging used for goods transportation restaurants from the warehouses to the shops. For the F&B business – Undertakes a collaborative sustainable approach for the Avolta generates solid and liquid waste: the scraps pro- design process by engaging with all stakeholders in- duced during the food preparation process (back-end), volved in the process (designers, contractors, conces- and the leftovers, packaging, and single-use tableware left sion partners, material suppliers, etc.) behind after the service phase (front-end). – Prevents construction pollutions by protecting the site during the construction In our warehouses, packaging materials, which mainly – Encourages recycling for all users – employees, custom- consist of cardboard, paper, plastic film and wood, as well ers and other stakeholders as electronic and plastic consumables such as neon lamps – Reduces energy consumption of stores and restaurants and PET, are sorted into different containers and sent for and increases equipment’s lifespan recycling. The recycling process is outsourced to special- – Conducts selective sourcing of materials (natural mate- ized service providers. With regard to cartons and pallets rials from sustainably managed sources and /or recycla- used to transport and protect products, Avolta reuses the ble materials) same units as much as possible, thus consistently reduc- – Selects resource-efficient equipment and fixtures (en- ing consumption of new resources. ergy efficient, water efficient, etc.) – Prioritizes local sourcing of materials. In the shops, waste produced by our operations is mostly packing material handled through the concession part- Avolta´s biggest impact on the environment, when it ners’ waste disposal system and recycled accordingly comes to shop and restaurant development, is in relation where possible. In many of our locations, we are taking to its energy consumption including shop and restaurant measures to reduce single-use plastic film, such as re- spaces as well as the kitchen equipment. Being a public placing roll containers used to move products from ware- space, airports have to provide well-lit facilities and natu- houses to the stores. The new models, which include clo- rally, this is a substantial part of their energy consumption. sures on four sides and at the top, drastically reduce The main focus therefore is on substituting traditional consumption of the plastic film needed for the covering lighting for more energy-efficient lighting systems (e.g. and the plastic shrink wrapping used with the old system. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 127/336 level of decarbonization required to meet the goals of the Our progress in 2023 Paris Agreement – to limit global warming to 1.5°C. After Scope 1 & 2 objective – During 2023, Avolta has further in- committing to the Science Based Targets initiative in creased its electricity sourcing of renewable energy from spring 2022, Avolta submitted emission reduction targets 20 % in 2022 to 40 % by purchasing Renewable Energy for its retail operations following the SBTi guidance (SBTi Certificates (RECs) (using 2019 as a baseline). Target Validation Protocol). SBTi validated Avolta’s emis- sion reduction targets for the retail business (former Dufry) As an example, these RECs cover the equivalent of our to- in early 2023. tal electricity consumption of our operations in the UK, Brazil, Switzerland, India and China, and permit Avolta to Based on a comprehensive analysis of its business model compensate over 11,500 tons of CO2-eq. Avolta will con- and emissions profile commissioned to a third-party con- tinue with its RECs purchasing program during 2024 to sultant, Avolta has established an emission reduction strat- cover, at least, an additional 20 % of its electricity con- egy for Scope 1 & 2 emissions for its retail business which sumption. follows SBTi’s 1.5°C pathway. It will eliminate emissions from its own operations through energy efficiency mea- Scope 3 objective – In 2023, Avolta has consolidated its sures and commits to increase annual sourcing of renew- enlarged supplier landscape and mapped the related lo- able electricity from 0 % in 2019 to 100 % by 2025. In addi- gistics suppliers’ landscape as a base to design its future tion, Avolta wants to invest into climate protection to emissions reduction plan for our goods transportation. By counter-balance non-avoidable emissions of its own retail building on the former engagement with its logistic part- operations (Scope 1 & 2 emissions) by 2025 with carbon off- ner community reductions will be achieved by rationaliz- setting initiatives to be defined in the near future. For ing shipments of goods and by selecting means of trans- Scope 3 emissions, Avolta follows SBTi´s well below 2°C portation with a lower carbon footprint. On the latter, we through both supplier engagement programs, and the col- tems (like rail) when possible; will prioritize the use of sus- laboration with its logistic partners. The targets mentioned tainable fuels for our air routes; and will focus the delivery above relate to the retail business and the company's – for- of goods using Liquefied Natural Gas (LNG) carriers for the mer Dufry – retail business scope 2022, and the related long-haul shipments. For short-haul distances mainly cov- 2019 base, and are planned to be revised and restated in ered by road focus will be set on including use of electric 2024 to cover the full combined entity. Emission reduction targets as validated by SBTi vehicles and renewing transportation fleets to the newest technological standards with lowest emission levels. This plan, originally planned to be established during 2023, will now be finalized in 2024 to consider the new and enlarged company scope created by the business combination and – Avolta* commits to reduce absolute Scope allowing Avolta to achieve its targets also from a combined 1 & 2 GHG emissions by 94.2 % by 2030 (from entity perspective. the 2019 base year). – Avolta* commits to increase annual sourcing Back in 2022 the company had conducted a preliminary of renewable electricity from 0 % in 2019 to assessment of its main retail suppliers to revise their emis- – Avolta* commits that 74 % of its suppliers by Avolta was and still is confident to achieve the targets val- emissions covering purchased goods and ser- idated in early 2023 (covering only the retail business) on vices will have science-based targets by 2027. time. – Avolta* commits to reduce absolute Scope 3 GHG emissions of upstream transportation Sustainable design & refurbishment for emissions by 28 % by 2030. restaurants & shops *All targets listed above are based on the com- constructing and refurbishing restaurants and stores. In pany's – former Dufry – retail business scope the design phase and the selection of materials, we choose Avolta takes a sustainability approach when designing, 2022, and the related 2019 base data. the most environmentally friendly options and use locally sourced furniture and materials whenever possible, to re- duce environmental impact. Additionally, as described in the Waste chapter below, materials created from waste re- cycling are reintegrated in the construction operating pro- cess thus supporting a more circular economy. The shop design department is centrally organized at a global level. It develops guidelines and defines several in- dustry standards enabling us to create attractive commer- cial 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 pol- icy, hazardous chemicals policy, guidelines and energy tar- gets for brand partners for the supply of branded display devices. These guidelines have to be followed by local con- struction teams and their respective sourcing of materials. Following LEED principles During the shop development and refurbishment phase, Avolta follows the principles established by leading green- building certification programs, such as the Leadership in Energy and Environmental Design (LEED) recommenda- tions. In this regard, Avolta: – Sustainably designs and plans new restaurant and store developments and refurbishments considering all as- pects, from visioning to renovation preparation, including: – Comprehensive metering of existing energy consump- pathway with two separate objectives to be achieved will give preference to lower impact transportation sys- tion – Introduction of solutions to improve traffic flow, intro- duction of smarter construction materials (easier to clean, anti-bacterial, etc.) – Reduces use of natural resources by re-using materials and equipment by giving modular and recyclable design to furniture and other mobile elements of the stores and restaurants – Undertakes a collaborative sustainable approach for the design process by engaging with all stakeholders in- volved in the process (designers, contractors, conces- sion partners, material suppliers, etc.) – Prevents construction pollutions by protecting the site during the construction – Encourages recycling for all users – employees, custom- ers and other stakeholders 100 % by 2025 and to continue annually sourc- sion reduction strategies towards reducing emissions and – Reduces energy consumption of stores and restaurants ing 100 % renewable electricity through 2030. committing to SBTi. While the findings were preliminary, and increases equipment’s lifespan – Conducts selective sourcing of materials (natural mate- rials from sustainably managed sources and /or recycla- ble materials) – Selects resource-efficient equipment and fixtures (en- ergy efficient, water efficient, etc.) – Prioritizes local sourcing of materials. Avolta´s biggest impact on the environment, when it comes to shop and restaurant development, is in relation to its energy consumption including shop and restaurant spaces as well as the kitchen equipment. Being a public space, airports have to provide well-lit facilities and natu- rally, this is a substantial 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- or A+ rated electronic devices (e.g. air conditioning, refriger- ators) in our retail stores, resulting in a significant drop in the overall energy consumption. Additionally, Avolta fo- cuses on permanently optimizing energy efficiency of the kitchen appliances also supported by innovative cocking methods to use less energy. The sustainability approach to store construction however goes beyond the environmental dimension. When select- ing local construction partners, we ensure that they also comply with social and environmental regulations, hence, ensuring that the efforts initiated in our design studio also result in truly sustainable environments and spaces for our customers. Waste & packaging “Measure and reduce the generation of waste and promote circular practices.” Avoiding any waste in the first place or recycling it is an ef- fective way to save valuable resources. Avolta’s waste pro- file is mainly influenced by two specific areas. With re- spect to the travel retail business it includes mainly transportation packaging used for goods transportation from the warehouses to the shops. For the F&B business Avolta generates solid and liquid waste: the scraps pro- duced during the food preparation process (back-end), and the leftovers, packaging, and single-use tableware left behind after the service phase (front-end). In our warehouses, packaging materials, which mainly consist 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 outsourced to special- ized service providers. With regard to cartons and pallets used to transport and protect products, Avolta reuses the same units as much as possible, thus consistently reduc- ing consumption of new resources. In the shops, waste produced by our operations is mostly packing material handled through the concession part- ners’ waste disposal system and recycled accordingly where possible. In many of our locations, we are taking measures to reduce single-use plastic film, such as re- placing roll containers used to move products from ware- houses to the stores. The new models, which include clo- sures 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. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 128/336 Environmental certifications Applies to: LEED® Platinum LEED® Gold LEED® Silver ISO 50001: 2018 ISO 14001: 2015 EMAS RT 2012 (Low Consumption Building) Switzerland (Retail: "The Circle" in Zurich Airport) India (Retail: Kempegowda International Airport Bengaluru Departures) India (Retail: Kempegowda International Airport Bengaluru Arrivals) Italy (F&B: Villoresi Est) USA (Bethesda HQ) Italy (F&B: Alemagna store in Linate Airport) Italy (F&B: Villoresi Est and Villoresi Ovest 1958) Austria (F&B: all stores) Italy (Milan HQ and Nuova Sidap HQ) Italy (F&B: Villoresi Est, Villoresi Ovest 1958, Brianza Sud, Scaligera, Chianti, Montealto Nord, Montealto Sud and for locations at Caselle Airport in Turin, Fiumicino, Linate, Bergamo, and Bologna airports) Austria (F&B: all stores) Greece (F&B: Hellas LTD) Italy (Milan HQ) Italy (F&B: Villoresi Est, Villoresi Ovest 1958, and Brianza Sud) France (F&B: Ambrussum, Manoirs du Perche, Plaines de Beauce, Chartres Gasville, Chartres Bois Paris, Lochères, Miramas, Villeroy, JdArbres, Wancourt, Porte de la Drôme N&S, Granier, Montélimar Est and Ouest, Dijon, Beaune Tailly, and Corbières Nord) RE 2020 (Bulding activities and construction efficiency) France (F&B: Sommesous) California Green Building Code – Level I and California Energy Standard – Title 24 USA (Locations at airports in California) Energy Star USA (F&B equipment) ISO 14064 (Greenhouse gases) Italy (Milan HQ and Sebino F&B store) Regarding our restaurants, Avolta is intensifying its efforts adopting several approaches like monitoring of waste pro- duced to design tailored strategies, developing either ef- ficient solutions to dispose waste properly or to overall re- duce waste, or by collaborating with specialized partners to co-develop projects that promote recycling and reuse, hence the circular economy. In our offices, the reduction of paper consumption is one of our ongoing challenges. Avolta has put in place local initia- tives to reduce paper and other office material consump- tion, including tips to reduce paper usage, such as printing double sided, avoiding printing of the legal text at the bot- tom of emails, and encouraging people only to print when necessary. The adoption of IT solutions, such as the elec- tronic invoice management system, is also helping to re- duce the amount of paper used in the day-to-day work of our staff and contributing to the protection of resources. Progress on reducing single-use plastic bags and packaging The majority of single-use packaging used by Avolta are related to F&B containers (cups, bowls, etc.), straws and cutlery, as well as to shopping bags used in the travel retail stores. While Avolta is highly committed to move to more sustainable solutions, the transition is quite a challenge, as it requires balancing a reduced environmental footprint with some fundamental external drivers specific to the F&B as well as the aviation industry. Topping the list of reg- ulations are food security requirements as well the man- datory use of STEBs (Secure Tamper Evident Bags). These are necessary for certain airport purchases such as liquor or tobacco, as per the requirements of the International Civil Aviation Organization (ICAO) and regulations of cer- tain airports. Starting in 2020, Avolta gradually began replacing existing plastic carrier bags – which already contained more than 70 % of recycled plastic – in all its duty-free operations globally, with more environmentally friendly ones made of biodegradable and recyclable materials. Once the substi- tution of the single-use plastic bags is fully completed, the company estimates that it will be able to reduce plastic us- age by approximately 7.3 tons per annum within it’s travel retail business. In 2023 the number of countries with retail shops using only bags with alternative materials to plastic has increased to 38 (2022: 26). The plastic bag phase-out process is coupled with point-of-sale communication campaigns to raise awareness and encourage customers to reduce plastic consumption. The company is also adopting a global price scheme for carrier bags in its retail operations, as an additional way of raising awareness and Waste generated, by type of waste (t) reducing bag consumption overall. In our restaurants we are transitioning towards the use of more sustainable single-use guest packaging. During – Paper and paper/cardboard packaging 2023, in the seven major countries1 that represent around – Plastic 90 % of our F&B business, we purchased 68 % sustainable packaging made primarily from materials such as paper, wood and bioplastic. Moreover, whenever possible, we are increasingly reducing the use of unnecessary packaging and encouraging, through dedicated sustainability com- munication campaigns, the non-use of unnecessary pack- aging. Examples of this commitment are the «Skip the Straw» campaign in North America to discourage the use of single-use plastic straws and the initiative launched in UK stores, which required the addition of a surcharge for beverages served in single-use paper cups to nudge con- sumers towards reusable alternatives. The funds raised from the surcharge were donated to Hubbub, a founda- tion supporting the fight against climate change. 1 Belgium, Canada, France, Italy, Switzerland, The Netherlands and USA Hazardous waste* Non-Hazardous waste – Food scraps – Glass – Cooking oil – Pneumatics/tires – General waste – Other Total 2023 14.4 21,393.2 2,213.8 104.9 1,627 263 245.8 0.1 16,696.9 241.7 21,407.6 * Including: electronic devices, toner, batteries, storage devices, contaminated containers, fluorescent tubes, and old refrigerators. The data considers only the following EMEA F&B operations: Austria, Belgium, Denmark, France, Greece, Italy, Netherlands, Slovenia, Sweden and Türkiye. mented several initiatives. First, back-end processes (rec- ipe design, product preparation, etc.) were made more ef- ficient to reduce ingredient waste to a minimum. Second, besides raising customer awareness on food waste, the company explores newer and better ways of cutting down on unsold items, for example by matching production vol- umes to expected traffic or selling products at a discount Biolo partnership for the use of compostable straws In the past, paper straws had already been at the end of the day. In recent years, Avolta has been tested in North America in an effort to reduce working in some restaurants in several European countries the quantity of single-use virgin plastic prod- such as Italy, Switzerland, Belgium, France, Germany and ucts, but they did not live up to expectations. Austria with «Too Good To Go», whose mission is to deal Since 2022, the company partnered with Biolo, with food waste. a company seeking alternative solutions to plastic, which allowed North American restau- Furthermore, to reduce food waste and at the same time rants to introduce sustainable straws that are offer support to local communities, Avolta makes several just as practical as traditional ones. The new food donations in collaboration with different associations straws are made of a plant-based alternative to in the countries where it operates, thus guaranteeing food plastic, and are biodegradable and composta- to people in greatest need. Among the principal and con- ble. They are now stocked at several airport solidated partnerships are those with the Food Donation locations in the USA (California, Washington, Connection in North America as well as the ones with Texas, North Carolina, Florida and Nevada). Banco Alimentare and Pane Quotidiano in Italy (see page 147). Food waste Fostering Circular economy Besides avoiding food waste, Avolta is also intensifying its For Avolta, food waste is a material topic mainly manifest- activities to foster circular economy in its F&B business. ing in its F&B business but does not represent a relevant as- Particular attention is for example put on the recycling of pect for the travel retail part of the operations, because the solid organic waste, which in Italy is separated in-store and majority of the assortment sold in the retail’s food & confec- delivered to composting plants. Similarly, in some Euro- tionary category have a rather long shelf life and are not pean countries, frying oil is separated, collected and used exposed to short expiry dates. for the production of biodiesel and green energy. Consequently, Avolta introduces new technologies to re- duce food waste to a minimum and optimize the handling of raw materials. To this purpose, the company has imple- Environmental certifications Applies to: LEED® Platinum LEED® Gold LEED® Silver ISO 50001: 2018 ISO 14001: 2015 EMAS RT 2012 (Low Consumption Building) Switzerland (Retail: "The Circle" in Zurich Airport) India (Retail: Kempegowda International Airport Bengaluru Departures) India (Retail: Kempegowda International Airport Bengaluru Arrivals) Italy (F&B: Villoresi Est) USA (Bethesda HQ) Italy (F&B: Alemagna store in Linate Airport) Italy (F&B: Villoresi Est and Villoresi Ovest 1958) Austria (F&B: all stores) Italy (Milan HQ and Nuova Sidap HQ) Italy (F&B: Villoresi Est, Villoresi Ovest 1958, Brianza Sud, Scaligera, Chianti, Montealto Nord, Montealto Sud and for locations at Caselle Airport in Turin, Fiumicino, Linate, Bergamo, and Bologna airports) Austria (F&B: all stores) Greece (F&B: Hellas LTD) Italy (Milan HQ) Italy (F&B: Villoresi Est, Villoresi Ovest 1958, and Brianza Sud) France (F&B: Ambrussum, Manoirs du Perche, Plaines de Beauce, Chartres Gasville, Chartres Bois Paris, Lochères, Miramas, Villeroy, JdArbres, Wancourt, Porte de la Drôme N&S, Granier, Montélimar Est and Ouest, Dijon, Beaune Tailly, and Corbières Nord) RE 2020 (Bulding activities and construction efficiency) France (F&B: Sommesous) California Green Building Code – Level I and California Energy Standard – Title 24 USA (Locations at airports in California) Energy Star USA (F&B equipment) ISO 14064 (Greenhouse gases) Italy (Milan HQ and Sebino F&B store) Regarding our restaurants, Avolta is intensifying its efforts it requires balancing a reduced environmental footprint adopting several approaches like monitoring of waste pro- with some fundamental external drivers specific to the duced to design tailored strategies, developing either ef- F&B as well as the aviation industry. Topping the list of reg- ficient solutions to dispose waste properly or to overall re- ulations are food security requirements as well the man- duce waste, or by collaborating with specialized partners datory use of STEBs (Secure Tamper Evident Bags). These to co-develop projects that promote recycling and reuse, are necessary for certain airport purchases such as liquor hence the circular economy. or tobacco, as per the requirements of the International Civil Aviation Organization (ICAO) and regulations of cer- In our offices, the reduction of paper consumption is one of tain airports. our ongoing challenges. Avolta has put in place local initia- tives to reduce paper and other office material consump- Starting in 2020, Avolta gradually began replacing existing tion, including tips to reduce paper usage, such as printing plastic carrier bags – which already contained more than double sided, avoiding printing of the legal text at the bot- 70 % of recycled plastic – in all its duty-free operations tom of emails, and encouraging people only to print when globally, with more environmentally friendly ones made of necessary. The adoption of IT solutions, such as the elec- biodegradable and recyclable materials. Once the substi- tronic invoice management system, is also helping to re- tution of the single-use plastic bags is fully completed, the duce the amount of paper used in the day-to-day work of company estimates that it will be able to reduce plastic us- our staff and contributing to the protection of resources. age by approximately 7.3 tons per annum within it’s travel Progress on reducing single-use plastic bags and packaging retail business. In 2023 the number of countries with retail shops using only bags with alternative materials to plastic has increased to 38 (2022: 26). The plastic bag phase-out The majority of single-use packaging used by Avolta are process is coupled with point-of-sale communication related to F&B containers (cups, bowls, etc.), straws and campaigns to raise awareness and encourage customers cutlery, as well as to shopping bags used in the travel retail to reduce plastic consumption. The company is also stores. While Avolta is highly committed to move to more adopting a global price scheme for carrier bags in its retail sustainable solutions, the transition is quite a challenge, as Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 129/336 operations, as an additional way of raising awareness and reducing bag consumption overall. In our restaurants we are transitioning towards the use of more sustainable single-use guest packaging. During 2023, in the seven major countries1 that represent around 90 % of our F&B business, we purchased 68 % sustainable packaging made primarily from materials such as paper, wood and bioplastic. Moreover, whenever possible, we are increasingly reducing the use of unnecessary packaging and encouraging, through dedicated sustainability com- munication campaigns, the non-use of unnecessary pack- aging. Examples of this commitment are the «Skip the Straw» campaign in North America to discourage the use of single-use plastic straws and the initiative launched in UK stores, which required the addition of a surcharge for beverages served in single-use paper cups to nudge con- sumers towards reusable alternatives. The funds raised from the surcharge were donated to Hubbub, a founda- tion supporting the fight against climate change. 1 Belgium, Canada, France, Italy, Switzerland, The Netherlands and USA Biolo partnership for the use of compostable straws In the past, paper straws had already been tested in North America in an effort to reduce the quantity of single-use virgin plastic prod- ucts, but they did not live up to expectations. Since 2022, the company partnered with Biolo, a company seeking alternative solutions to plastic, which allowed North American restau- rants to introduce sustainable straws that are just as practical as traditional ones. The new straws are made of a plant-based alternative to plastic, and are biodegradable and composta- ble. They are now stocked at several airport locations in the USA (California, Washington, Texas, North Carolina, Florida and Nevada). Food waste For Avolta, food waste is a material topic mainly manifest- ing in its F&B business but does not represent a relevant as- pect for the travel retail part of the operations, because the majority of the assortment sold in the retail’s food & confec- tionary category have a rather long shelf life and are not exposed to short expiry dates. Consequently, Avolta introduces new technologies to re- duce food waste to a minimum and optimize the handling of raw materials. To this purpose, the company has imple- Waste generated, by type of waste (t) Hazardous waste* Non-Hazardous waste – Paper and paper/cardboard packaging – Plastic – Food scraps – Glass – Cooking oil – Pneumatics/tires – General waste – Other Total 2023 14.4 21,393.2 2,213.8 104.9 1,627 263 245.8 0.1 16,696.9 241.7 21,407.6 * Including: electronic devices, toner, batteries, storage devices, contaminated containers, fluorescent tubes, and old refrigerators. The data considers only the following EMEA F&B operations: Austria, Belgium, Denmark, France, Greece, Italy, Netherlands, Slovenia, Sweden and Türkiye. mented several initiatives. First, back-end processes (rec- ipe design, product preparation, etc.) were made more ef- ficient to reduce ingredient waste to a minimum. Second, besides raising customer awareness on food waste, the company explores newer and better ways of cutting down on unsold items, for example by matching production vol- umes to expected traffic or selling products at a discount at the end of the day. In recent years, Avolta has been working in some restaurants in several European countries such as Italy, Switzerland, Belgium, France, Germany and Austria with «Too Good To Go», whose mission is to deal with food waste. Furthermore, to reduce food waste and at the same time offer support to local communities, Avolta makes several food donations in collaboration with different associations in the countries where it operates, thus guaranteeing food to people in greatest need. Among the principal and con- solidated partnerships are those with the Food Donation Connection in North America as well as the ones with Banco Alimentare and Pane Quotidiano in Italy (see page 147). Fostering Circular economy Besides avoiding food waste, Avolta is also intensifying its activities to foster circular economy in its F&B business. Particular attention is for example put on the recycling of solid organic waste, which in Italy is separated in-store and delivered to composting plants. Similarly, in some Euro- pean countries, frying oil is separated, collected and used for the production of biodiesel and green energy. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 130/336 The «WAS» Project The most impressive project to recycle waste is the «WAS»-Project, which is concrete proof of the commitment to recycling and the circu- lar economy. The most significant discards pro- duced by the company’s operations are reused to create innovative materials for store furnish- ings and design. In recent years, research and innovation in this area have focused on the implementation and optimization of three ma- terials developed in a circular economy per- spective – WASCOFFEE®, WASORANGE®, and WASBOTTLE®. The three materials undergo ongoing improvements and in 2023 were again used for the design and furnishing of new stores opened during the year, specifically in Italy, Europe, and North America. WASCOFFEE® is made from coffee grounds. It is a 100 % natural, recyclable material suited for furnishings and eco-design such as tables, counters, and wall panels. WASCOFFEE® has been used to design the interiors of the com- pany’s proprietary brands since 2017 and has since become an iconic design element of Puro Gusto cafés, located in Italy, the rest of Europe, Türkiye, and North America, and of the WASCOFFEE® Lab concept in Italy. WASORANGE®, produced from recycled orange rinds, after oranges are squeezed for fresh juice, is used to make items such as sugar containers, table lamps, and other ac- cessories for Avolta stores. It was developed through Avolta’s partnership with Krill Design, a company specialized in reusing food scraps through circular economy initiatives. WASBOTTLE® is made from recycled plastic containers, namely the high-density polyethyl- ene (HDPE) detergent and cleaning product bottles commonly used at Avolta’s locations. WASBOTTLE® takes the form of 100 % recycla- ble, multi-colored panels used to make coffee tables and clad the walls and other surfaces of stores. Thanks to its qualities of innovation and circularity, in 2021 WASBOTTLE® was nomi- nated to the ADI Design Index 2021, a section of the best Italian design. In 2022, it was im- proved with new finishes and colors and used for some store openings in Italy, including the new Alemagna location at Milan Linate airport, and in the United States for the country’s first Puro Gusto café in Washington, D.C. Water & biodiversity “Reduce water withdrawal in our operations and promote the restoration of habitats along the value chain.” In 2023, according to information from Airport Carbon Accreditation, 101 airports reached the optimization level; 95 airports achieved carbon neutrality level; and 74 the superior accreditations "Transformation", "Transition" and "Level 5". Considering these groups, Avolta operates stores in 87 of these 220 airports, including Dallas Fort Worth, Athens, Helsinki, Amsterdam-Schiphol, Stockholm Arlanda, Vancouver, Zurich, Basel, London Heathrow, Lon- Avolta's own operations do not entail significant direct im- don Gatwick, Abidjan and Queen Alia Airport in Amman, pacts with regards to water withdrawal (which is only used Jordan. for sanitary and kitchen purposes) and discharge (consid- ering it does not operate manufacturing activities, the ACI Europe Climate Task Force and Group does not generate water discharges), as well as in Sustainability Committee (ENVSTRAT) terms of biodiversity loss or deterioration. However, con- In 2019, Avolta joined the ACI Europe Climate Task Force sidering its sectors of activity, Avolta is aware of the poten- as the representative of the travel retail industry. The mis- tial impacts that may arise along its value chain, mainly re- sion of the Climate Change Task Force is to follow up on lated to the sourcing of raw materials and products the implementation of ACI Europe’s Climate Resolution offered. For this reason, Avolta is committed to improve its from June 2019, which includes the preparation of guid- related management and monitoring on these topics, aim- ance material for members, to support them in achieving ing at collecting and providing quantitative performance the Net Zero 2050 commitment. Net Zero aims to reduce indicators in future reporting years also in light of the fu- emissions under the airport´s control down to zero. This is ture regulatory developments. Engaging in partnerships at operations level achieved by reducing energy and fuel consumption through the design of new energy-efficient infrastructure, amongst other recommendations. Retailers play an im- Avolta engages with its stakeholders to promote environ- portant role in the airport ecosystem and Avolta, as the mental protection practices wherever this is possible. We largest global travel experience player, contributes to the actively participate in sustainability committees with our work of the task force with its vision, experience and rec- airport partners, with the aim of identifying areas where ommendations in the regular meetings held. While the Cli- we can collectively reduce the environmental footprint of mate Task Force is currently being reorganized after the our operations. In an increasing number of our operations, industry recovery, Avolta has now also become a member Avolta has a designated sustainability manager in charge of ACI Europe’s new Environmental Strategy Committee of liaising with concession partners and other airport (ENVSTRAT). stakeholders to drive sustainable practices. Either through innovative technologies, adaptation of passenger flows or Member of ACI ANARA ESG workgroup rethinking the recycling processes in place, we are con- Since 2022, Avolta is also a member of the ACI ANARA tributing to the common goal of making airports a more (Airport Non-Aeronautical Revenue & Activities) ESG work- sustainable space. group, working amongst other focus points to define ESG recommendations and best practices for the airport com- Airport Carbon Accreditation munity. The Airport Carbon Accreditation is an Airport Council In- ternational (ACI) Europe certification program that inde- pendently assesses and recognizes the efforts of airports to manage and reduce their carbon emissions. It defines seven different levels of certification: ‘Mapping’, ‘Reduc- tion’, ‘Optimization’, ‘Neutrality’, ‘Transformation’ and ‘Tran- sition’ and the recently introduced “Level 5”. In order to achieve the Optimization accreditation (level 3 of 7) and above, airports need to actively engage with air- port stakeholders, as they need to develop a more exten- sive carbon footprint to include specific Scope 3 emis- sions and the formulation of a Stakeholder Engagement Plan to promote wider airport-based emission reductions. In many cases, these plans also involve Avolta as the oper- ator of airport stores. The «WAS» Project The most impressive project to recycle waste is the «WAS»-Project, which is concrete proof of the commitment to recycling and the circu- lar economy. The most significant discards pro- duced by the company’s operations are reused to create innovative materials for store furnish- ings and design. In recent years, research and innovation in this area have focused on the implementation and optimization of three ma- terials developed in a circular economy per- spective – WASCOFFEE®, WASORANGE®, and WASBOTTLE®. The three materials undergo ongoing improvements and in 2023 were again used for the design and furnishing of new stores opened during the year, specifically in Italy, Europe, and North America. WASCOFFEE® is made from coffee grounds. It is a 100 % natural, recyclable material suited for furnishings and eco-design such as tables, counters, and wall panels. WASCOFFEE® has been used to design the interiors of the com- pany’s proprietary brands since 2017 and has since become an iconic design element of Puro Gusto cafés, located in Italy, the rest of Europe, Türkiye, and North America, and of the WASCOFFEE® Lab concept in Italy. WASORANGE®, produced from recycled orange rinds, after oranges are squeezed for fresh juice, is used to make items such as sugar containers, table lamps, and other ac- cessories for Avolta stores. It was developed through Avolta’s partnership with Krill Design, a company specialized in reusing food scraps through circular economy initiatives. WASBOTTLE® is made from recycled plastic containers, namely the high-density polyethyl- ene (HDPE) detergent and cleaning product bottles commonly used at Avolta’s locations. WASBOTTLE® takes the form of 100 % recycla- ble, multi-colored panels used to make coffee tables and clad the walls and other surfaces of stores. Thanks to its qualities of innovation and circularity, in 2021 WASBOTTLE® was nomi- nated to the ADI Design Index 2021, a section of the best Italian design. In 2022, it was im- proved with new finishes and colors and used for some store openings in Italy, including the new Alemagna location at Milan Linate airport, and in the United States for the country’s first Puro Gusto café in Washington, D.C. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 131/336 In 2023, according to information from Airport Carbon Accreditation, 101 airports reached the optimization level; 95 airports achieved carbon neutrality level; and 74 the superior accreditations "Transformation", "Transition" and "Level 5". Considering these groups, Avolta operates stores in 87 of these 220 airports, including Dallas Fort Worth, Athens, Helsinki, Amsterdam-Schiphol, Stockholm Arlanda, Vancouver, Zurich, Basel, London Heathrow, Lon- don Gatwick, Abidjan and Queen Alia Airport in Amman, Jordan. ACI Europe Climate Task Force and Sustainability Committee (ENVSTRAT) In 2019, Avolta joined the ACI Europe Climate Task Force as the representative of the travel retail industry. The mis- sion 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 guid- ance material for members, to support them in achieving the Net Zero 2050 commitment. 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 im- portant role in the airport ecosystem and Avolta, as the largest global travel experience player, contributes to the work of the task force with its vision, experience and rec- ommendations in the regular meetings held. While the Cli- mate Task Force is currently being reorganized after the industry recovery, Avolta has now also become a member of ACI Europe’s new Environmental Strategy Committee (ENVSTRAT). Member of ACI ANARA ESG workgroup Since 2022, Avolta is also a member of the ACI ANARA (Airport Non-Aeronautical Revenue & Activities) ESG work- group, working amongst other focus points to define ESG recommendations and best practices for the airport com- munity. Water & biodiversity “Reduce water withdrawal in our operations and promote the restoration of habitats along the value chain.” Avolta's own operations do not entail significant direct im- pacts with regards to water withdrawal (which is only used for sanitary and kitchen purposes) and discharge (consid- ering it does not operate manufacturing activities, the Group does not generate water discharges), as well as in terms of biodiversity loss or deterioration. However, con- sidering its sectors of activity, Avolta is aware of the poten- tial impacts that may arise along its value chain, mainly re- lated to the sourcing of raw materials and products offered. For this reason, Avolta is committed to improve its related management and monitoring on these topics, aim- ing at collecting and providing quantitative performance indicators in future reporting years also in light of the fu- ture regulatory developments. Engaging in partnerships at operations level Avolta engages with its stakeholders to promote environ- mental 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. In an increasing number of our operations, Avolta has a designated sustainability manager in charge of liaising with concession partners and other airport stakeholders to drive sustainable practices. Either through innovative technologies, adaptation of passenger flows or rethinking the recycling processes in place, we are con- tributing to the common goal of making airports a more sustainable space. Airport Carbon Accreditation The Airport Carbon Accreditation is an Airport Council In- ternational (ACI) Europe certification program that inde- pendently assesses and recognizes the efforts of airports to manage and reduce their carbon emissions. It defines seven different levels of certification: ‘Mapping’, ‘Reduc- tion’, ‘Optimization’, ‘Neutrality’, ‘Transformation’ and ‘Tran- sition’ and the recently introduced “Level 5”. In order to achieve the Optimization accreditation (level 3 of 7) and above, airports need to actively engage with air- port stakeholders, as they need to develop a more exten- sive carbon footprint to include specific Scope 3 emis- sions and the formulation of a Stakeholder Engagement Plan to promote wider airport-based emission reductions. In many cases, these plans also involve Avolta as the oper- ator of airport stores. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 132/336 Empower Our People “Making our people part of the journey by fostering a diverse, inclusive and equitable workplace.“ GRI indicators: 2-7, 2-8, 2-21, 2-30, 401-1, 402-1, 403-1, 403-2, 403-3, 403-4, 403-5, 403-6, 403-7, 403-8, 403-9, 404-1, 405-1, 406-1, 407-1, 410-1 SDGs: 1.2 4.3, 4.4, 4.5 5.1, 5.5 8.2, 8.5, 8.6, 8.8, 10.3 16.1, 16.5, 16.7 Every Avolta employee is an ambassador of the company. Whether in stores, restaurants, offices or warehouses, each of our team members contribute to drive the com- pany towards success and evolve our brand. Our people’s passion, engagement and motivation are driving forces to make our Destination 2027 strategy come to life and fully embed it in our daily behaviors. Within the focus area «Empower Our People » Avolta has defined five areas of action: – Diversity, Equity & Inclusion Create an inclusive culture, by promoting diversity and equity at all levels of the organization – Talent Recruitment, Engagement & Retention Attract and retain highly talented people by building a positive and engaging work environment – Employee Training & Development Provide high quality training, learning & development opportunities to strengthen our people's competence- and professional growth – Health & Well-being Provide high health and safety standards and promote world-class well-being offerings and education to fos- ter well-being and work-life balance – Human Rights Protect human rights across the company and along its supply chain Empowering our people is a key priority for Avolta, which translates into tangible initiatives to build a great and unique place to work, ensuring the best in terms of fair and equal working conditions, health and safe working en- vironments, competitive salaries, development and reten- tion strategies, avant-garde training programs and any- thing that contributes to generate high engagement levels amongst our people. Building on our core brand principles – Brave, Collabora- tive, Passionate and Inclusive – Avolta has developed a number of policies and procedures to ensure a consistent employee experience across the 73 countries in which it operates, all of which represent a strong foundation for the future. In 2023, a new company People & Culture organization structure was implemented, with Global and Regional Centers of Excellences, to foster the creation of one team, with a shared vision and one global company culture pro- moting diversity, inclusion and recognition at all level of the organization. A fundamental element in connection with this objective is Avolta´s HR Policy, which is publicly available on the company website. This policy highlights the core princi- ples and guidelines, which, in terms of human resources management, are applicable to the whole company. The policy, which has been shared and trained with employ- ees, covers diverse topics, including: – Recruiting and Hiring – Equity, Diversity and Respect for Human Rights – Working Conditions and Labor Relations – Health and Safety – Remuneration and Working Time – Career Development and Advancement – Succession Planning Overview employee structure 2023 EMEA North America LATAM APAC Total FTEs Headcounts 26,212 32,379 29,851 31,737 6,451 6,562 5,804 6,136 68,459 76,962 HQ 140 148 Number of Employees In addition to its own employees, Avolta actively contributes Avolta had 76,962 people (HC) working for the company to local communities by offering working opportunities to at December 31, 2023, 60 % of them women. Of the total, third party employees, thereby generating additional sala- 94 % worked in the stores, restaurants and in the ware- ries and tax payments across the countries where the com- houses, while 6 % in the company offices (see ESG Report pany is present. In this context, our over 5,100 stores and Annex 2023 on page 15/18). Employees by Gender* Female Male 60 % 40 % * 0.1 % of our employees did not disclose their gender according to the tracking systems available as of today. Employees by Regions North America 41 % Latin America 9 % <1 % Headquarters Europe, Middle East & Africa 42 % 8 % Asia Pacific restaurants are not just sales locations for us and our brand partners to sell their products, but also work opportunities for over 3,832 people based in our stores representing these brands and other service providers. Diversity, Equity & Inclusion “Create an inclusive culture, by promoting diversity and equity at all levels of the organization.” Avolta operates in multinational and multicultural environ- ments. Being present in 73 countries, Avolta engages with customers, suppliers and colleagues from a variety of cul- tures and nationalities on a daily basis. Diversity is an es- sential asset to – and integral part of – our company and Avolta promotes an inclusive workplace culture that un- derstands and celebrates diversity in all its forms, be it in gender, age, race, culture, beliefs or creed. Our teams comprise of colleagues from more than 150 na- tionalities across all functions and levels of the organiza- tion. We continue to believe that this broad cultural diver- sity represents a unique competitive advantage. We also view it as a key element in the successful development of our company and in the implementation of our long-term growth strategy. The staff in Avolta’s outlets in each country is predomi- nantly local. Our presence around the world makes us an important employer in many locations, with many of our operations in emerging markets. This, in addition to bring- ing expertise and experience on how to operate an inter- national business, contributes to local development and economic strength. Empower Our People “Making our people part of the journey by fostering a diverse, inclusive and equitable workplace.“ 2-7, 2-8, 2-21, 2-30, 401-1, 402-1, 403-1, 403-2, 403-3, 403-4, 403-5, 403-6, 403-7, 403-8, 403-9, 404-1, 405-1, 406-1, 407-1, 410-1 GRI indicators: SDGs: 1.2 4.3, 4.4, 4.5 5.1, 5.5 8.2, 8.5, 8.6, 8.8, 10.3 16.1, 16.5, 16.7 Every Avolta employee is an ambassador of the company. tion strategies, avant-garde training programs and any- Whether in stores, restaurants, offices or warehouses, thing that contributes to generate high engagement levels each of our team members contribute to drive the com- amongst our people. pany towards success and evolve our brand. Our people’s passion, engagement and motivation are driving forces to Building on our core brand principles – Brave, Collabora- make our Destination 2027 strategy come to life and fully tive, Passionate and Inclusive – Avolta has developed a embed it in our daily behaviors. number of policies and procedures to ensure a consistent employee experience across the 73 countries in which it Within the focus area «Empower Our People » Avolta operates, all of which represent a strong foundation for has defined five areas of action: – Diversity, Equity & Inclusion the future. Create an inclusive culture, by promoting diversity and In 2023, a new company People & Culture organization equity at all levels of the organization structure was implemented, with Global and Regional – Talent Recruitment, Engagement & Retention Centers of Excellences, to foster the creation of one team, Attract and retain highly talented people by building a with a shared vision and one global company culture pro- positive and engaging work environment moting diversity, inclusion and recognition at all level of – Employee Training & Development the organization. Provide high quality training, learning & development opportunities to strengthen our people's competence- A fundamental element in connection with this objective and professional growth – Health & Well-being is Avolta´s HR Policy, which is publicly available on the company website. This policy highlights the core princi- Provide high health and safety standards and promote ples and guidelines, which, in terms of human resources world-class well-being offerings and education to fos- management, are applicable to the whole company. The ter well-being and work-life balance policy, which has been shared and trained with employ- – Human Rights supply chain Protect human rights across the company and along its – Recruiting and Hiring ees, covers diverse topics, including: – Equity, Diversity and Respect for Human Rights – Working Conditions and Labor Relations Empowering our people is a key priority for Avolta, which – Health and Safety translates into tangible initiatives to build a great and – Remuneration and Working Time unique place to work, ensuring the best in terms of fair – Career Development and Advancement and equal working conditions, health and safe working en- – Succession Planning vironments, competitive salaries, development and reten- Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 133/336 Overview employee structure 2023 FTEs Headcounts HQ 140 148 EMEA North America LATAM APAC Total 26,212 32,379 29,851 31,737 6,451 6,562 5,804 6,136 68,459 76,962 Number of Employees Avolta had 76,962 people (HC) working for the company at December 31, 2023, 60 % of them women. Of the total, 94 % worked in the stores, restaurants and in the ware- houses, while 6 % in the company offices (see ESG Report Annex 2023 on page 15/18). Employees by Gender* Female Male 60 % 40 % * 0.1 % of our employees did not disclose their gender according to the tracking systems available as of today. Employees by Regions North America 41 % Latin America 9 % <1 % Headquarters Europe, Middle East & Africa 42 % 8 % Asia Pacific In addition to its own employees, Avolta actively contributes to local communities by offering working opportunities to third party employees, thereby generating additional sala- ries and tax payments across the countries where the com- pany is present. In this context, our over 5,100 stores and restaurants are not just sales locations for us and our brand partners to sell their products, but also work opportunities for over 3,832 people based in our stores representing these brands and other service providers. Diversity, Equity & Inclusion “Create an inclusive culture, by promoting diversity and equity at all levels of the organization.” Avolta operates in multinational and multicultural environ- ments. Being present in 73 countries, Avolta engages with customers, suppliers and colleagues from a variety of cul- tures and nationalities on a daily basis. Diversity is an es- sential asset to – and integral part of – our company and Avolta promotes an inclusive workplace culture that un- derstands and celebrates diversity in all its forms, be it in gender, age, race, culture, beliefs or creed. Our teams comprise of colleagues from more than 150 na- tionalities across all functions and levels of the organiza- tion. We continue to believe that this broad cultural diver- sity represents a unique competitive advantage. We also view it as a key element in the successful development of our company and in the implementation of our long-term growth strategy. The staff in Avolta’s outlets in each country is predomi- nantly local. Our presence around the world makes us an important employer in many locations, with many of our operations in emerging markets. This, in addition to bring- ing expertise and experience on how to operate an inter- national business, contributes to local development and economic strength. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 134/336 knowledge and illustrates the importance for Avolta to create a diverse and inclusive culture. It also promotes in- clusive behaviors, highlighting examples of things that one might do unconsciously (unconscious bias), which could make colleagues feel uncomfortable and / or excluded. In addition to the Global Diversity & Inclusion training, Avolta dedicates a special focus to unconscious bias, the «mental shortcuts» the human brain takes, which can po- tentially lead to unconscious discrimination. In all regions dedicated unconscious bias trainings were implemented either to support managers in making unbiased, better-in- formed decisions, or to increase employee’s awareness on how unconscious bias can affect thinking and judgment and, consequently, the communication with customers and colleagues. In the majority of the countries, the un- conscious bias training is indeed included in the leader- ships’ basic training paths – including store managers and area managers – as well as in the training catalogues for all employees. DE & I vision statement – Avolta is committed to building an inclusive and culturally sensitive workplace for every- one, in which all our people recognize that their unique characteristics, skills and experi- ences are respected and valued. – Avolta employs great people from a wide variety of backgrounds and with a broad range of skills and experiences to best serve our customers and build a better and stron- ger company for all of our stakeholders. – Avolta recruits, rewards and promotes peo- ple based on capability and performance – regardless of gender, national origin, ethnic- ity, lifestyle, age, beliefs or physical ability. DE & I Committee To accelerate the ability of the company to generate posi- tive impact and increase the awareness on DE & I topics, a Diversity, Equity and Inclusion Committee has been set at a global level, formed by senior leaders from different func- tions, professional backgrounds, and geographies (Peo- ple & Culture, ESG, Communications, etc.) The mission of the Committee is to shape Avolta's DE & I journey by steer- ing the strategy, facilitate cross-regional and cross-func- tional collaboration on DE&I initiatives in order to empower the actions at both global and local levels. The Committee meets quarterly to track the progress on the roadmap, as- sess new opportunities & initiatives, and steer outcomes. Another area of focus is the prevention of harassment. In several countries – including Italy and the USA – dedi- cated and mandatory training courses to prevent any form of harassment at the workplace were run and extended to all the team members. Whistleblowing channels to fight any form of discrimination As defined in Avolta’s Code of Conduct and the HR policy, both available on the corporate website, Avolta is commit- ted to provide a safe environment to all employees, imple- menting measures, which promote diversity, dignity and respect and forbid any form of discrimination, harassment or bullying. In order to adopt a zero-tolerance approach to such be- haviors and favor timely reporting in case of occurrence, Avolta provides whistleblowing channels to its employees, ensuring the full confidentiality of information and the pri- vacy of individuals, to report any conduct inconsistent Diversity & Inclusion Awareness Training Awareness is a key factor to foster a company culture that embraces diversity and puts inclusive practices at the heart of the company ethos. In 2023, to further enforce the internal consciousness on diversity and the active pro- motion of inclusivity at the workplace, a global Diver- sity & Inclusion training, sponsored by the CEO and the members of the Global Executive Committee, has been launched and made accessible to all employees. The train- ing – divided into six modules – provides fundamental with the above-mentioned policies. Avolta properly inves- a regular basis to make sure there is no discrimination re- tigates all complaints and prohibits retaliation or discrimi- lated to any kind of diversity. nation against any employees, who report a concern made in good faith. Avolta offers competitive salaries and incentives as a way of attracting and retaining talent. Our standard compen- Since 2018, two company-wide reporting channels com- sation includes a fixed and a variable performance-based plement the email reporting channel compliance@avolta. compensation that rewards the individual efforts of staff net: (1) a worldwide, toll-free hotline in nine languages members. Variable pay is linked to individual and company (English, Spanish, Portuguese, French, Italian, Mandarin, objectives. We regularly review and discuss professional Russian, Greek and German) also accessible via local dial- development with employees and link their performance in numbers for all countries in which Avolta operates; and to incentives. (2) the online reporting website www.dufry-compliance. com. These reporting channels, run by an independent Our team members also enjoy additional benefits that third party, ensure the integrity of such investigations by vary from one location to another, depending on laws, and acting as a centralized contact point, through which any may include benefits such as healthcare, life, accident and wrongdoing is reported directly to the Compliance De- disability insurance, vouchers for cultural and sport activ- partment, reporting to Avolta’s General Counsel and ities as well as dedicated welfare & discounts platforms. In member of the Global Executive Committee, for further this regard, during 2023 Avolta continued with the rollout investigation. Additionally, for the F&B business there cur- of Emporium – a web-based shop with thousands of prod- rently is still available a dedicated whistleblowing tool to ucts from core retail categories at highly discounted which team members can fully anonymously and confi- prices. This benefit is exclusive to Avolta’s people, and in- dentially reach out. Complaints received during the year cludes also a Friends & Family program. By the end of were treated promptly and with the utmost attention. 2023, Emporium was available in 13 countries, represent- Guaranteeing the whistleblowers’ full anonymity, discus- ing Avolta’s main locations by headcounts – Brazil, Can- sions were held with the interested parties in order to ada, Greece, Hong Kong, Italy, Macau, Malaysia, Mexico, quickly communicate and adopt the appropriate correc- Spain, Switzerland, United Arab Emirates, United Kingdom tive measures if needed. and USA. The company will continue with the rollout of Emporium throughout 2024. Equal employment Avolta adheres to local legislation and regulations in all the countries in which it operates. Anti-discrimination, diver- sity and ensuring equal opportunities are, and have always been, important social commitments for Avolta across all locations, especially (but not exclusively) in developing countries. Many locations in which the company operates still pose challenges to the guaranteeing of equality. We monitor these countries closely to ensure we provide equal opportunities to all our staff. As explained in the pre- vious paragraph, the company has in place whistleblower mechanisms to denounce discrimination cases if they happen. Furthermore, in every country served, Avolta complies with parental leave legislation, and in some cases actively supports the return to work after the maternity Equal salary certification in Switzerland leave with dedicated programs ensuring positive work-life Avolta became equal salary certified in Switzerland at the balance for parents with caring responsibilities. beginning of 2019 and was re-certified again in 2021 for an- Compensation & Benefits other three years. This certification underscores the com- mitment to a fair and unbiased reward structure, which en- Avolta provides all employees with fair and competitive ables employees to develop and thrive in their careers. The wages based on each individual’s background and expe- certification process took place in three stages through rience, their particular job within our organization, the ap- statistical evaluation, on-site audits and interviews with in- propriate market benchmark in the respective countries dividuals and panel groups. All phases of the certification and locations, as well as their performance. Entry-level and re-certification processes were performed at the Basel wages are established in accordance with the local laws Headquarters and the Zurich Airport operations and gave and collective employment contracts in place in the vari- proof on how management systems, HR policies and pro- ous countries. The remuneration structure is assessed on cesses integrate the dimensions of equal remuneration. DE & I vision statement knowledge and illustrates the importance for Avolta to – Avolta is committed to building an inclusive create a diverse and inclusive culture. It also promotes in- and culturally sensitive workplace for every- clusive behaviors, highlighting examples of things that one one, in which all our people recognize that might do unconsciously (unconscious bias), which could their unique characteristics, skills and experi- make colleagues feel uncomfortable and / or excluded. ences are respected and valued. – Avolta employs great people from a wide In addition to the Global Diversity & Inclusion training, variety of backgrounds and with a broad Avolta dedicates a special focus to unconscious bias, the range of skills and experiences to best serve «mental shortcuts» the human brain takes, which can po- our customers and build a better and stron- tentially lead to unconscious discrimination. In all regions ger company for all of our stakeholders. dedicated unconscious bias trainings were implemented – Avolta recruits, rewards and promotes peo- either to support managers in making unbiased, better-in- ple based on capability and performance – formed decisions, or to increase employee’s awareness on regardless of gender, national origin, ethnic- how unconscious bias can affect thinking and judgment ity, lifestyle, age, beliefs or physical ability. and, consequently, the communication with customers DE & I Committee To accelerate the ability of the company to generate posi- area managers – as well as in the training catalogues for tive impact and increase the awareness on DE & I topics, a all employees. and colleagues. In the majority of the countries, the un- conscious bias training is indeed included in the leader- ships’ basic training paths – including store managers and Diversity, Equity and Inclusion Committee has been set at a global level, formed by senior leaders from different func- tions, professional backgrounds, and geographies (Peo- ple & Culture, ESG, Communications, etc.) The mission of the Committee is to shape Avolta's DE & I journey by steer- ing the strategy, facilitate cross-regional and cross-func- tional collaboration on DE&I initiatives in order to empower the actions at both global and local levels. The Committee meets quarterly to track the progress on the roadmap, as- sess new opportunities & initiatives, and steer outcomes. Another area of focus is the prevention of harassment. In several countries – including Italy and the USA – dedi- cated and mandatory training courses to prevent any form of harassment at the workplace were run and extended to all the team members. Whistleblowing channels to fight any form of discrimination As defined in Avolta’s Code of Conduct and the HR policy, both available on the corporate website, Avolta is commit- ted to provide a safe environment to all employees, imple- Diversity & Inclusion Awareness Training Awareness is a key factor to foster a company culture that menting measures, which promote diversity, dignity and embraces diversity and puts inclusive practices at the respect and forbid any form of discrimination, harassment heart of the company ethos. In 2023, to further enforce or bullying. the internal consciousness on diversity and the active pro- motion of inclusivity at the workplace, a global Diver- In order to adopt a zero-tolerance approach to such be- sity & Inclusion training, sponsored by the CEO and the haviors and favor timely reporting in case of occurrence, members of the Global Executive Committee, has been Avolta provides whistleblowing channels to its employees, launched and made accessible to all employees. The train- ensuring the full confidentiality of information and the pri- ing – divided into six modules – provides fundamental vacy of individuals, to report any conduct inconsistent Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 135/336 with the above-mentioned policies. Avolta properly inves- tigates all complaints and prohibits retaliation or discrimi- nation against any employees, who report a concern made in good faith. Since 2018, two company-wide reporting channels com- plement the email reporting channel compliance@avolta. net: (1) a worldwide, toll-free hotline in nine languages (English, Spanish, Portuguese, French, Italian, Mandarin, Russian, Greek and German) also accessible via local dial- in numbers for all countries in which Avolta operates; and (2) the online reporting website www.dufry-compliance. com. These reporting channels, run by an independent third party, ensure the integrity of such investigations by acting as a centralized contact point, through which any wrongdoing is reported directly to the Compliance De- partment, reporting to Avolta’s General Counsel and member of the Global Executive Committee, for further investigation. Additionally, for the F&B business there cur- rently is still available a dedicated whistleblowing tool to which team members can fully anonymously and confi- dentially reach out. Complaints received during the year were treated promptly and with the utmost attention. Guaranteeing the whistleblowers’ full anonymity, discus- sions were held with the interested parties in order to quickly communicate and adopt the appropriate correc- tive measures if needed. Equal employment Avolta adheres to local legislation and regulations in all the countries in which it operates. Anti-discrimination, diver- sity and ensuring equal opportunities are, and have always been, important social commitments for Avolta across all locations, especially (but not exclusively) in developing countries. Many locations in which the company operates still pose challenges to the guaranteeing of equality. We monitor these countries closely to ensure we provide equal opportunities to all our staff. As explained in the pre- vious paragraph, the company has in place whistleblower mechanisms to denounce discrimination cases if they happen. Furthermore, in every country served, Avolta complies with parental leave legislation, and in some cases actively supports the return to work after the maternity leave with dedicated programs ensuring positive work-life balance for parents with caring responsibilities. Compensation & Benefits Avolta provides all employees with fair and competitive wages based on each individual’s background and expe- rience, their particular job within our organization, the ap- propriate market benchmark in the respective countries and locations, as well as their performance. Entry-level wages are established in accordance with the local laws and collective employment contracts in place in the vari- ous countries. The remuneration structure is assessed on a regular basis to make sure there is no discrimination re- lated to any kind of diversity. Avolta offers competitive salaries and incentives as a way of attracting and retaining talent. Our standard compen- sation includes a fixed and a variable performance-based compensation that rewards the individual efforts of staff members. Variable pay is linked to individual and company objectives. We regularly review and discuss professional development with employees and link their performance to incentives. Our team members also enjoy additional benefits that vary from one location to another, depending on laws, and may include benefits such as healthcare, life, accident and disability insurance, vouchers for cultural and sport activ- ities as well as dedicated welfare & discounts platforms. In this regard, during 2023 Avolta continued with the rollout of Emporium – a web-based shop with thousands of prod- ucts from core retail categories at highly discounted prices. This benefit is exclusive to Avolta’s people, and in- cludes also a Friends & Family program. By the end of 2023, Emporium was available in 13 countries, represent- ing Avolta’s main locations by headcounts – Brazil, Can- ada, Greece, Hong Kong, Italy, Macau, Malaysia, Mexico, Spain, Switzerland, United Arab Emirates, United Kingdom and USA. The company will continue with the rollout of Emporium throughout 2024. Equal salary certification in Switzerland Avolta became equal salary certified in Switzerland at the beginning of 2019 and was re-certified again in 2021 for an- other three years. This certification underscores the com- mitment to a fair and unbiased reward structure, which en- ables employees to develop and thrive in their careers. The certification process took place in three stages through statistical evaluation, on-site audits and interviews with in- dividuals and panel groups. All phases of the certification and re-certification processes were performed at the Basel Headquarters and the Zurich Airport operations and gave proof on how management systems, HR policies and pro- cesses integrate the dimensions of equal remuneration. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 136/336 Talent recruitment, engagement and retention “Attract and retain highly talented people by building a positive and engaging working environment.” The Avolta People journey Avolta has comprehensively mapped all careers stages in our company, starting from when team members start their application phase until they leave of the organization. All the steps in between these two points and the experi- ences that the team member makes is what Avolta calls “the People journey” and it is the company´s systematic approach that then ensures we identify all opportunities. Avolta wants to deliver a great place to work across all parts of our organization. To simplify the assessment, Avolta establishes four critical stages on his people jour- ney: Recruitment, Training & Career Progression, Com- pensation and Recognition. To ensure «Fair Play» in everyone’s professional career development, Avolta’s recruitment process ensures that all applicants are treated fairly and each applicant is given the same opportunity to be considered, so that the most suitable person can fill the position. The selection is based on the applicant’s competencies, skills, results delivered and the decisions taken regardless of: race, color, religion, sexual orientation, age, gender identity or gender expres- sion, national or origin, political orientation, disability or other discriminating factors. Available positions are first published internally to ensure opportunity and growth of internal talent. Avolta’s recruiters review the skill pipeline of internal candidates ahead of engaging with external hir- ing of professionals. Referrals and recommended poten- tial internal candidates are encouraged and evaluated in the same process against other potential candidates. To ensure fair play in the selection process, all interview eval- uations by Avolta recruiters and hiring managers are re- ported in Avolta’s HR portal Avolta Voyage. If any gaps or personal development needs of the selected candidate are identified, recruiters are instructed to incorporate that information into on-boarding and development plan. «Grow With Us» During the first half of 2023, at the early stage of the integration process the company launched an internal job posting program called “Grow With Us”. Starting in April 2023, the program highlighted open positions and opportunities available to all team members in retail and F&B across the globe. At the end of 2023, through “Grow with Us”, 79 % of the vacancies for senior manager positions were covered with internal candidates. People engagement Understanding our people’s concerns and needs is critical for Avolta. For this reason, the company fosters a dialogue with all team members and invests in developing the nec- essary tools to promote communication across all levels of the organization. Avolta uses several tools to foster inter- nal communication and stimulate the interaction with his people. During 2023, we have continued with the rollout of tech- nologies and tools to align information levels between desktop and non-desktop team members. The scaling of Beekeeper was further accelerated and extended to new countries. This app-based solution enables connection, facilitates workplace engagement and increases produc- tivity through unified communications. Through Bee- keeper, we are able to share with the more unconnected members of our staff information related to our company as well as information related to their day-to-day work en- vironment (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 recognized social networks. Currently, Avolta has over 60,000 live us- ers on the Beekeeper platform, reaching around 90 % of its workforce and expects to reach full rollout of the app globally during 2024. Furthermore, Avolta uses several internal communication channels to facilitate the dissemination of corporate news and to keep our staff updated and engaged. These include the company´s intranet, and regular newsletters. During 2023, due to the integration with the F&B business, a lot of additional effort in term of internal communication and en- gagement was made to clearly explain the purpose of the business combination as well as the progress of the inte- gration process. In this context, 11 global and 3 regional Town Halls have been organized to enable in-presence and online interaction among the Global Executive Committee and all team members. To promote in-person communica- tion and discuss doubts and concerns related to the inte- gration process, a series of Coffee Chats with senior lead- ers were organized in the main company offices (Milan, Avolta team members benefit from an extensive learning Basel, Madrid, London, Amsterdam, Bethesda, New Jersey). catalogue that covers programs to improve their perfor- Moreover, in order to keep everyone informed and en- mance in their current positions, as well as professional gaged about the integration process a dedicated newslet- development opportunities to support career progres- ter “Travel Together – Travel Retail and Travel Food & Bever- sion. Training is offered through various learning solutions, age” has been created and sent regularly to all team including face-to-face, on-the-job as well as virtual and members to keep them updated on the progress of the online training sessions, on technical and people skills. projects related to the integration. Training is open to all team members and managers at all levels and across the entire organization and all geograph- People engagement survey ical locations. To better gauge our performance both within our com- pany and relative to our competitors, Avolta conducts reg- During 2023, 1,449,827 formal training hours were pro- ular people engagement surveys that serve to gain under- vided by Avolta. Most training hours were focused on op- standing of our staff’s perception of the company and erational skills (approx. 73.6 % of the total), in particular for identify areas of improvement. We ensure that the surveys front-line team members, and on the reinforcement of always involve a statistically relevant proportion of our staff, managerial skills for those in management positions (ap- and that they reach out across the world. In 2023, as part proximately 8.2 % of total training hours). of the integration process, a Culture survey was launched, engaging a representative sample of our team members of about 1,500 people – in both retail and F&B locations. The Culture survey aimed at investigating both current and de- sired future values and behaviors, identifying potential strengths to build on as well as differences causing fric- tions. The results of the survey highlighted many similari- ties, in terms of values, ways of working and performing among retail and F&B businesses. The survey also revealed that both organizations were nurturing similar aspirations for the future and had the common wish to be part of a company putting people and customers at the center. The insights coming from the survey contributed to shape Avolta’s brand mission, identity and values, but also to build the new People & Culture vision and strategy (see dedi- cated poster at the beginning of the Annual Report). Training hours by type 2 % Compliance 4 % Other 5 % Health & safety and quality 7 % Technical skils Managerial 8 % skills Employee training and development “Provide high quality training, learning & development opportunities to strengthen our people’s competences and professional growth.” 74 % skills Operational Delivering consistent outstanding customer service is Avolta´s main aspiration and the ultimate objective of Avolta´s Customer Retail Excellence program – an on-go- ing training program for our frontline team members. This program focuses on: For Avolta, training is a fundamental activity for updating – Reinforcing customer service through ideal staffing skills and boosting professional development in a process levels according to store traffic and sales that blends individual growth with cultural and organiza- – Providing team members with a clear focus and target tional progress. Avolta’s training methodology follows the for each shift – Empowering teams through strong leadership – Enhancing selling capabilities around our products, promotions and special lines / offers – Exposure (connections with other colleagues In supporting the program, 13 Academy Stores spread across the three main regions are globally. Located in Stockholm, Zurich, Athens, Madrid, Marrakesh, Jordan, “Four E’s model”: – Educate (formal education) – Experiences (development) – Environment (culture of learning) and professionals) Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 137/336 Talent recruitment, engagement and retention “Attract and retain highly talented people by building a positive and engaging working environment.” The Avolta People journey Avolta has comprehensively mapped all careers stages in our company, starting from when team members start their application phase until they leave of the organization. «Grow With Us» During the first half of 2023, at the early stage of the integration process the company launched an internal job posting program called “Grow With Us”. Starting in April 2023, the program highlighted open positions and opportunities available to all team members in retail and F&B across the globe. At the end of 2023, through “Grow with Us”, 79 % of the vacancies for senior manager positions were covered with internal candidates. All the steps in between these two points and the experi- People engagement ences that the team member makes is what Avolta calls Understanding our people’s concerns and needs is critical “the People journey” and it is the company´s systematic for Avolta. For this reason, the company fosters a dialogue approach that then ensures we identify all opportunities. with all team members and invests in developing the nec- Avolta wants to deliver a great place to work across all essary tools to promote communication across all levels of parts of our organization. To simplify the assessment, the organization. Avolta uses several tools to foster inter- Avolta establishes four critical stages on his people jour- nal communication and stimulate the interaction with his ney: Recruitment, Training & Career Progression, Com- people. pensation and Recognition. During 2023, we have continued with the rollout of tech- To ensure «Fair Play» in everyone’s professional career nologies and tools to align information levels between development, Avolta’s recruitment process ensures that desktop and non-desktop team members. The scaling of all applicants are treated fairly and each applicant is given Beekeeper was further accelerated and extended to new the same opportunity to be considered, so that the most countries. This app-based solution enables connection, suitable person can fill the position. The selection is based facilitates workplace engagement and increases produc- on the applicant’s competencies, skills, results delivered tivity through unified communications. Through Bee- and the decisions taken regardless of: race, color, religion, keeper, we are able to share with the more unconnected sexual orientation, age, gender identity or gender expres- members of our staff information related to our company sion, national or origin, political orientation, disability or as well as information related to their day-to-day work en- other discriminating factors. Available positions are first vironment (such as shifts, product information, events in published internally to ensure opportunity and growth of store, etc.). The app also features tools for internal chats internal talent. Avolta’s recruiters review the skill pipeline and communications and the sharing of information in a ing of professionals. Referrals and recommended poten- social networks. Currently, Avolta has over 60,000 live us- tial internal candidates are encouraged and evaluated in ers on the Beekeeper platform, reaching around 90 % of the same process against other potential candidates. To its workforce and expects to reach full rollout of the app ensure fair play in the selection process, all interview eval- globally during 2024. uations by Avolta recruiters and hiring managers are re- ported in Avolta’s HR portal Avolta Voyage. If any gaps or Furthermore, Avolta uses several internal communication personal development needs of the selected candidate channels to facilitate the dissemination of corporate news are identified, recruiters are instructed to incorporate that and to keep our staff updated and engaged. These include information into on-boarding and development plan. the company´s intranet, and regular newsletters. During 2023, due to the integration with the F&B business, a lot of additional effort in term of internal communication and en- gagement was made to clearly explain the purpose of the business combination as well as the progress of the inte- gration process. In this context, 11 global and 3 regional Town Halls have been organized to enable in-presence and online interaction among the Global Executive Committee and all team members. To promote in-person communica- tion and discuss doubts and concerns related to the inte- gration process, a series of Coffee Chats with senior lead- ers were organized in the main company offices (Milan, Basel, Madrid, London, Amsterdam, Bethesda, New Jersey). Moreover, in order to keep everyone informed and en- gaged about the integration process a dedicated newslet- ter “Travel Together – Travel Retail and Travel Food & Bever- age” has been created and sent regularly to all team members to keep them updated on the progress of the projects related to the integration. People engagement survey To better gauge our performance both within our com- pany and relative to our competitors, Avolta conducts reg- ular people engagement surveys that serve to gain under- standing of our staff’s perception of the company and identify areas of improvement. We ensure that the surveys always involve a statistically relevant proportion of our staff, and that they reach out across the world. In 2023, as part of the integration process, a Culture survey was launched, engaging a representative sample of our team members of about 1,500 people – in both retail and F&B locations. The Culture survey aimed at investigating both current and de- sired future values and behaviors, identifying potential strengths to build on as well as differences causing fric- tions. The results of the survey highlighted many similari- ties, in terms of values, ways of working and performing among retail and F&B businesses. The survey also revealed that both organizations were nurturing similar aspirations for the future and had the common wish to be part of a company putting people and customers at the center. The insights coming from the survey contributed to shape Avolta’s brand mission, identity and values, but also to build the new People & Culture vision and strategy (see dedi- cated poster at the beginning of the Annual Report). of internal candidates ahead of engaging with external hir- very similar environment to that of the most recognized Employee training and development “Provide high quality training, learning & development opportunities to strengthen our people’s competences and professional growth.” For Avolta, training is a fundamental activity for updating skills and boosting professional development in a process that blends individual growth with cultural and organiza- tional progress. Avolta’s training methodology follows the “Four E’s model”: – Educate (formal education) – Experiences (development) – Environment (culture of learning) – Exposure (connections with other colleagues and professionals) Avolta team members benefit from an extensive learning catalogue that covers programs to improve their perfor- mance in their current positions, as well as professional development opportunities to support career progres- sion. Training is offered through various learning solutions, including face-to-face, on-the-job as well as virtual and online training sessions, on technical and people skills. Training is open to all team members and managers at all levels and across the entire organization and all geograph- ical locations. During 2023, 1,449,827 formal training hours were pro- vided by Avolta. Most training hours were focused on op- erational skills (approx. 73.6 % of the total), in particular for front-line team members, and on the reinforcement of managerial skills for those in management positions (ap- proximately 8.2 % of total training hours). Training hours by type 2 % Compliance 4 % Other 5 % Health & safety and quality 7 % Technical skils 8 % Managerial skills 74 % Operational skills Delivering consistent outstanding customer service is Avolta´s main aspiration and the ultimate objective of Avolta´s Customer Retail Excellence program – an on-go- ing training program for our frontline team members. This program focuses on: – Reinforcing customer service through ideal staffing levels according to store traffic and sales – Providing team members 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 the program, 13 Academy Stores spread across the three main regions are globally. Located in Stockholm, Zurich, Athens, Madrid, Marrakesh, Jordan, Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 138/336 Toronto, New York (Newark), Cancun, Sao Paulo, Buenos Aires (Ezeiza), Melbourne and Bali, these stores serve to test concepts and best practices, and function as a refer- ence for stores in other airports and geographies. – Managers with exposure to procurement negotiations – Managers with exposure to government officials such as airport authorities, customs or other public authorities – Managers with signatory power or appointed as direc- tors or officers of Avolta subsidiaries Accordingly, we develop new and existing candidates for – Best Business Growth Story Award recognizing the more senior management roles and we carry out yearly greatest business growth stories, including – but not lim- reviews of the quality of our talent pipeline at two levels: ited to – a new store or restaurant opening, a new air- – The first level concentrates on a limited number of can- port / seaport / motorway / border shop / or other devel- didates, who already have management experience and opment, growth of a product category, a business Other Avolta global learning programs include: – Welcome to the Company training – Designed for office and frontline staff operating in both restaurant and shops it is a comprehensive onboarding program for newcomers aimed at shortening the learning curve. In 2023, over 31,000 new joiners were trained using this program. – Retail Champions program – The cornerstone of our Learning and Development strategy for retail team members, this program has been designed to provide our professionals with the tools, knowledge and capabil- ities they need to perform well in their jobs and develop to their full potential at Avolta. Over 15,600 team mem- bers, including store leaders, have benefited from this program. This set of training programs is complemented with product training programs for our frontline teams, typically delivered by the brands and local teams. During 2023, we continued leveraging on our online train- ing capabilities through: – Level Up – Avolta´s LMS system, which permits estab- lishing personalized learning programs for every team member based on their role, position and professional category – Elucidat – Simplifying the creation of training and learn- ing courses by our learning & development teams to reach 100 % of our staff – Coursera – An online based training platform for man- agement roles – SuccessFactors Training Academy – Content for the F&B side of the business offered in an LMS system with learning journeys per established operational role Avolta also conducts compliance training for team mem- bers, officers and directors, as applicable, on an ongoing basis. These training sessions reflect the ongoing changes introduced in our Code of Conduct. Avolta’s Compliance Department regularly evaluates the content of Avolta’s training on Compliance and Corporate Policies. The ef- forts of the Compliance Department are fully coordinated with, and supported by, the Regional Presidents & CEO’s and the respective HR departments, who help identify the people, including new hires, who should receive training. People who receive training are selected based on the fol- lowing criteria: – Community heads at Headquarters (Finance, Treasury, Procurement, Business Development, Internal Audit, HR, IT, Commercial, Marketing, Customer Service) – Local managers with exposure to business develop- ment, external partners and third-party contractors – Investor Relations, Corporate Communications and Me- would be able to take over one of the senior positions in channel, or an existing store & restaurant that has deliv- dia managers – Members of the Legal and Compliance Department – Members of the Internal Audit Department, Loss Pre- vention and ERM department as well as HR managers worldwide. During 2023, 1,287 managers at all levels of the organiza- tion and across all the regions have completed this train- ing. This figure includes both new Avolta team members and managers who were already trained and with whom the training has been refreshed. New team members, of- ficers and directors are provided with a copy of the Avolta Code of Conduct when they join the company and are re- quired to acknowledge acceptance of its terms in writing. Additionally, Avolta team members, officers and directors have access to all of Avolta’s compliance and corporate policies, including its Code of Conduct. All team members, not included in the managers list, also received compliance training. In 2023, this training reached over 42,000 team members via online e-learning modules, compliance update training videos and commu- nication campaigns. The primary training topics included harassment, discrimination, insider trading, data privacy and instructions on how to report a wrongdoing. Management development In order for our team members to work in highly engaged and high-performing teams, first time managers joining Avolta are trained on Management Fundamentals. This new training has been introduced in the second half of 2023 and develops people skills such as role modelling, communication, situational leadership, feedback and coaching, change management and self-management. The course was rolled out to 230 of our managers in 2023, improving engagement and performance in our stores and restaurants. Talent development and appraisal Avolta ensures that future and long-term management needs are addressed by an optimal balance of promoting internal high-performing team members and hiring exter- nal talent (for example in new countries where we start op- erations). Avolta operates a global, systematic process to identify high-potential talent in the organization and to de- velop them toward key roles in our business model. We strongly believe that talent management and succession planning are key activities for a sustainable business. our organization. ered exceptional growth. – The second level focuses on our stores and restaurants. – Best Organic Growth Award, which recognizes the Amongst the top-performing frontline team members country with the strongest year-on-year organic growth. and supervisors. Performance reviews are an important aspect of a long- are run in North America in the F&B sector. "Shout Out" is term, successful employer-team member relationship. a peer-to-peer recognition program where colleagues Therefore, it is important for us to build a continuous feed- send each other appreciation postcards to recognize ex- back culture, by encouraging constructive dialogue be- cellent performance in terms of alignment with corporate tween each individual team member and manager re- values and ability to work in a team. This contributes to garding goals, priorities and personal development. create an atmosphere of mutual appreciation and atten- Additional staff appreciation and recognition programs With a view to fostering professional growth, Avolta has in- terly recognition program and allows to recognize and ap- troduced a performance review model enabling a con- preciate those team member who have exceeded the structive, participatory, and inclusive appraisal while en- expectations and company standards in terms of perfor- suring professional development and the achievement of mance, service and hospitality, with particular attention Destination 2027 strategic objectives. In 2023 to align our for those who have made heroic or rescue acts. tion fostering motivation. "Above and Beyond" is a quar- internal performance on a global scale and reinforce our One Team mentality, a Global Alignment and Develop- ment Conversation process has been launched. The pro- Health and well-being cess has interested all people in specialized support roles, back office managers and leaders, all global and regional team members, general managers and country-level lead- ers. Driving operational improvements and performance and creating end-to-end engagement with our people, the conversations also supported the identification of people’s talents and how they can use these to further de- velop themselves. “Provide high health and safety standards and promote world- class well-being offerings and education to foster well-being and work-life balance.“ Team Member appreciation and recognition Health and Safety Team member appreciation and recognition is another Workplace safety is a priority and an essential commit- important way for Avolta to value team members and ment for the company in our stores, restaurants, offices team achievements. Every year, Avolta celebrates the One and warehouses. As indicated in the HR Policy, the com- Avolta Awards, which recognize excellence and celebrate pany ensures that all activities are carried out safely by the success of our people worldwide who are dedicated taking all possible measures to eliminate (or at least re- to delivering. The Awards are divided in five categories: duce) the risks to health, safety and welfare of our people, contractors, customers, visitors and any other person who can be impacted by our operations. Our team members – Best Leader Story Award recognizes individuals who operate in airports, motorways, railway stations, seaports, have demonstrated the right behaviors and character cruise ships and similar environments. As a basic prereq- and shown exceptional performance uisite our people have to comply and follow the respective – Best Customer Experience Award, recognizes the high- airport’s, seaports’ or vessel’s safety rules as these envi- est scores measured by our Mystery Shopper Survey ronments are highly regulated. – Best Partnership Initiative Award, which recognizes an outstanding initiative with a supplier, business partner, On top of this, Avolta has specific health & safety regula- concession partner, inter-company or other party, that tions, including internal policies and guidelines – both was innovative, well designed, well executed and im- global and local –, which may go beyond the legal health pactful and safety requirements. Avolta generally strives to achieve high occupational health & safety standards and Toronto, New York (Newark), Cancun, Sao Paulo, Buenos – Managers with exposure to procurement negotiations Aires (Ezeiza), Melbourne and Bali, these stores serve to – Managers with exposure to government officials such as test concepts and best practices, and function as a refer- airport authorities, customs or other public authorities ence for stores in other airports and geographies. – Managers with signatory power or appointed as direc- tors or officers of Avolta subsidiaries Other Avolta global learning programs include: – Investor Relations, Corporate Communications and Me- – Welcome to the Company training – Designed for office dia managers and frontline staff operating in both restaurant and – Members of the Legal and Compliance Department shops it is a comprehensive onboarding program for – Members of the Internal Audit Department, Loss Pre- newcomers aimed at shortening the learning curve. In vention and ERM department as well as HR managers 2023, over 31,000 new joiners were trained using this worldwide. program. – Retail Champions program – The cornerstone of our During 2023, 1,287 managers at all levels of the organiza- Learning and Development strategy for retail team tion and across all the regions have completed this train- members, this program has been designed to provide ing. This figure includes both new Avolta team members our professionals with the tools, knowledge and capabil- and managers who were already trained and with whom ities they need to perform well in their jobs and develop the training has been refreshed. New team members, of- to their full potential at Avolta. Over 15,600 team mem- ficers and directors are provided with a copy of the Avolta bers, including store leaders, have benefited from this Code of Conduct when they join the company and are re- program. This set of training programs is complemented quired to acknowledge acceptance of its terms in writing. with product training programs for our frontline teams, Additionally, Avolta team members, officers and directors typically delivered by the brands and local teams. have access to all of Avolta’s compliance and corporate policies, including its Code of Conduct. During 2023, we continued leveraging on our online train- ing capabilities through: All team members, not included in the managers list, also – Level Up – Avolta´s LMS system, which permits estab- received compliance training. In 2023, this training lishing personalized learning programs for every team reached over 42,000 team members via online e-learning member based on their role, position and professional modules, compliance update training videos and commu- category nication campaigns. The primary training topics included – Elucidat – Simplifying the creation of training and learn- harassment, discrimination, insider trading, data privacy ing courses by our learning & development teams to and instructions on how to report a wrongdoing. reach 100 % of our staff agement roles – Coursera – An online based training platform for man- Management development In order for our team members to work in highly engaged – SuccessFactors Training Academy – Content for the and high-performing teams, first time managers joining F&B side of the business offered in an LMS system with Avolta are trained on Management Fundamentals. This learning journeys per established operational role new training has been introduced in the second half of 2023 and develops people skills such as role modelling, Avolta also conducts compliance training for team mem- communication, situational leadership, feedback and bers, officers and directors, as applicable, on an ongoing coaching, change management and self-management. basis. These training sessions reflect the ongoing changes The course was rolled out to 230 of our managers in 2023, introduced in our Code of Conduct. Avolta’s Compliance improving engagement and performance in our stores Department regularly evaluates the content of Avolta’s and restaurants. training on Compliance and Corporate Policies. The ef- forts of the Compliance Department are fully coordinated Talent development and appraisal with, and supported by, the Regional Presidents & CEO’s Avolta ensures that future and long-term management and the respective HR departments, who help identify the needs are addressed by an optimal balance of promoting people, including new hires, who should receive training. internal high-performing team members and hiring exter- People who receive training are selected based on the fol- nal talent (for example in new countries where we start op- lowing criteria: erations). Avolta operates a global, systematic process to – Community heads at Headquarters (Finance, Treasury, identify high-potential talent in the organization and to de- Procurement, Business Development, Internal Audit, HR, velop them toward key roles in our business model. We IT, Commercial, Marketing, Customer Service) strongly believe that talent management and succession – Local managers with exposure to business develop- planning are key activities for a sustainable business. ment, external partners and third-party contractors Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 139/336 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 can- didates, who already have management experience and would be able to take over one of the senior positions in our organization. – The second level focuses on our stores and restaurants. Amongst the top-performing frontline team members and supervisors. Performance reviews are an important aspect of a long- term, successful employer-team member relationship. Therefore, it is important for us to build a continuous feed- back culture, by encouraging constructive dialogue be- tween each individual team member and manager re- garding goals, priorities and personal development. With a view to fostering professional growth, Avolta has in- troduced a performance review model enabling a con- structive, participatory, and inclusive appraisal while en- suring professional development and the achievement of Destination 2027 strategic objectives. In 2023 to align our internal performance on a global scale and reinforce our One Team mentality, a Global Alignment and Develop- ment Conversation process has been launched. The pro- cess has interested all people in specialized support roles, back office managers and leaders, all global and regional team members, general managers and country-level lead- ers. Driving operational improvements and performance and creating end-to-end engagement with our people, the conversations also supported the identification of people’s talents and how they can use these to further de- velop themselves. Team Member appreciation and recognition Team member appreciation and recognition is another important way for Avolta to value team members and team achievements. Every year, Avolta celebrates the One Avolta 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 character and shown exceptional performance – Best Customer Experience Award, recognizes the high- est scores measured by our Mystery Shopper Survey – Best Partnership Initiative Award, which recognizes an outstanding initiative with a supplier, business partner, concession partner, inter-company or other party, that was innovative, well designed, well executed and im- pactful – Best Business Growth Story Award recognizing the greatest business growth stories, including – but not lim- ited to – a new store or restaurant opening, a new air- port / seaport / motorway / border shop / or other devel- opment, growth of a product category, a business channel, or an existing store & restaurant that has deliv- ered exceptional growth. – Best Organic Growth Award, which recognizes the country with the strongest year-on-year organic growth. Additional staff appreciation and recognition programs are run in North America in the F&B sector. "Shout Out" is a peer-to-peer recognition program where colleagues send each other appreciation postcards to recognize ex- cellent performance in terms of alignment with corporate values and ability to work in a team. This contributes to create an atmosphere of mutual appreciation and atten- tion fostering motivation. "Above and Beyond" is a quar- terly recognition program and allows to recognize and ap- preciate those team member who have exceeded the expectations and company standards in terms of perfor- mance, service and hospitality, with particular attention for those who have made heroic or rescue acts. Health and well-being “Provide high health and safety standards and promote world- class well-being offerings and education to foster well-being and work-life balance.“ Health and Safety Workplace safety is a priority and an essential commit- ment for the company in our stores, restaurants, offices and warehouses. As indicated in the HR Policy, the com- pany ensures that all activities are carried out safely by taking all possible measures to eliminate (or at least re- duce) the risks to health, safety and welfare of our people, contractors, customers, visitors and any other person who can be impacted by our operations. Our team members operate in airports, motorways, railway stations, seaports, cruise ships and similar environments. As a basic prereq- uisite our people have to comply and follow the respective airport’s, seaports’ or vessel’s safety rules as these envi- ronments are highly regulated. On top of this, Avolta has specific health & safety regula- tions, including internal policies and guidelines – both global and local –, which may go beyond the legal health and safety requirements. Avolta generally strives to achieve high occupational health & safety standards and Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 140/336 actively encourages compliance across the whole com- pany. As a result, Avolta has a number of different health & safety regulations and procedures throughout the organization. Regardless of the specific requirements of each local leg- islation, there are certain principles that all these proce- dures adhere to, including: – Compliance with labor legislation on health and safety – Reduce work-related accidents, implementing the nec- essary occupational risk prevention plans, to achieve an effective identification of risks and to avoid them – Promotion of a preventive culture, training our staff to achieve the best safety standards – Having due diligence in the coordination of activities and prevention measures with contractors, suppliers, or any third party that performs activities or is present in Avol- ta's work centers – Continuous improvement, establishing objectives and goals for improvement, systematically taking into ac- count the requirements of stakeholders, continuously assessing performance, applying the necessary correc- tions to achieve the proposed goals and establishing verification, auditing, and control processes to ensure that objectives are met – Management of occupational health and safety pro- cesses change from one location to another, with a num- ber of common guidelines that apply to all our opera- tions, including the following: – Avolta operations provide topical information such as health and safety initiatives to our staffs, 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 improve- ments are made where necessary. In some of our loca- tions, reviews include employee representation con- sultations (where appropriate) – Responsibility for the governance and review of health and safety is with local operations and HR teams – At airport and seaport environments, close collabora- tion with concession partner teams is maintained to ensure compliance with their own H&S regulations and management process. 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 Commit- tees and HR teams is crucial in identifying potential risks and hazards, workers are also encouraged to report to these teams any work-related hazards or hazardous situa- tions. The same process is used for workers to remove themselves from work situations that they believe could cause injury or ill health. Work related incidents are investi- gated and reported to management to develop and imple- ment remediation plans (where and if needed), thus ensur- ing that processes are duly updated in cooperation with the Health & Safety committees. 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, both retail and F&B, and warehouse staff. The greatest risks to which Avolta workers are affected in- clude: – Risks related to material elements, objects, products and constituent elements of machines or vehicles – Risk related to cooking activities – 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 induction ses- sions with new members of our staff and hold regular training sessions with all of our staff, both in stores and of- fices, ensuring understanding of the policies and proce- dures. If needed, training is extended to workers who are not members of our staff, but work on our premises on be- half of third-party service providers. Airport security practices Due to the nature of our business, most of our staff are lo- cated in airport environments, either working in stores and restaurants, 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 pro- cesses established at the specific airports where our stores are located. Most of these regulations and policies are harmonized across the world to ensure consistent lev- els of safety and consumer protection. Worldwide safety regulations are set by the International Civil Aviation Orga- nization 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 autho- rization, which in most cases involves training courses on security measures and procedures in the airport environ- ment. Well-being initiatives Besides ensuring physical health and safety at the work- place, Avolta is also committed in fostering mental and emotional well-being of its team members by offering trainings, benefits and welfare plans that vary from coun- try to country. In many countries dedicated training activ- ities including emotions management, stress manage- ment, physical health, and exercise, as well as mental Avolta provides regular trainings to facilitate lawful and health and mindfulness, are included in the Leadership’s ethical behavior in line with the principles set out in its essential trainings in order to raise the attention of all our Code of Conduct and its internal rules and policies. In all managers on this topic. In some countries the access to the countries where it operates, Avolta complies with laws counseling or well-being practices for our people is sup- and collective labor contracts regarding working hours, ported through the providing of dedicated discounts or by vacation, and leisure time, paying the required compensa- partnering with local providers. tion in case of overtime or atypical hours such as night shifts and holidays. In the USA, all colleagues of the F&B business, have access to Life Work a confidential, inclusive personnel counseling The protection of human rights is also included in the program that provides support 24 hours a day, 7 days a Avolta Supplier Code of Conduct (see chapter Create Sus- week, and 365 days a year, through a phone line and an tainable Travel Experiences on page 116), which explicitly online platform. Life Work benefits include: forbids the supply of any product or service to Avolta manufactured, assembled or packaged in violation of in- ternationally accepted human rights standards and appli- – Connect users to benefits and events through the news- cable laws as well as regulations in relation to labor and working conditions. feed lem – Provide access to a wealth of online resources and infor- mation in support of the individual’s mental, physical, so- Freedom of association and collective bargaining cial, and financial wellness As stated in the Code of Conduct and the HR Policy, Avolta – Guide people to professional counselors and specialists, protects the right to freedom of association and collective for advice any time, on any job-related or personal prob- bargaining, recognizing the paramount importance of – Let people speak safely and confidentially with mental ing collective contracts, individual bargaining and free- health counselors or other specialists such as financial dom of association. This commitment to transparency these freedoms, in accordance with national laws govern- and legal professionals Human rights “Protect human rights across the company and along its supply chain.” Compliance with international standards translates on various levels to the management of national collective bargaining, collective contracts by company and/or location, and individually negotiated agreements. The company’s policy on collective agreements is tailored to each location in which it operates, as each location is subject to its own specific laws and regulations. In all the countries in which it operates, Avolta fosters an open dialogue with the labor unions. Labor relations and talks follow the highest standards of transparency, collab- oration, and fair dealing, in strict accordance with the law As stated in the Avolta’s Code of Conduct, the company is and with the general aim of promoting a good working cli- committed to conducting its operations in an ethical and mate and an open dialogue with the workers’ representa- legal manner in compliance with accepted business stan- tives. Avolta constantly engages with trade unions and dards and applicable laws and regulations with respect to keeps them updated on topics such as health and safety anti-corruption, human rights, worker health & safety, en- standards and protocols, management of the workforce, vironmental protection, and product safety. Any form of any use of government relief programs, talent retention child labor or forced labor is strictly forbidden and clear measures, and any necessary organizational changes. recruitment procedures and regular workplace controls ensure that this never happens at any location. When organizational changes occur, Avolta complies with all provisions of local laws and collective contracts by in- Avolta is also committed to the Ten Principles of the forming the unions and involving them, where applicable, United Nations Global Compact, and in particular to re- in personal meetings. The minimum notice period in case specting the Universal Declaration of Human Rights ad- of organizational changes varies from three to thirteen opted by the United Nations General Assembly in 1948 weeks depending on national and local laws. and the International Labour Organization (ILO) Declara- tion on Fundamental Principles and Rights at Work ad- opted in 1998. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 141/336 ment, physical health, and exercise, as well as mental health and mindfulness, are included in the Leadership’s essential trainings in order to raise the attention of all our managers on this topic. In some countries the access to counseling or well-being practices for our people is sup- ported through the providing of dedicated discounts or by partnering with local providers. In the USA, all colleagues of the F&B business, have access to Life Work a confidential, inclusive personnel counseling program that provides support 24 hours a day, 7 days a week, and 365 days a year, through a phone line and an online platform. Life Work benefits include: – Connect users to benefits and events through the news- third party that performs activities or is present in Avol- constituent elements of machines or vehicles feed – Provide access to a wealth of online resources and infor- mation in support of the individual’s mental, physical, so- cial, and financial wellness – Guide people to professional counselors and specialists, for advice any time, on any job-related or personal prob- lem – Let people speak safely and confidentially with mental health counselors or other specialists such as financial and legal professionals tions, including the following: half of third-party service providers. Human rights “Protect human rights across the company and along its supply chain.” Compliance with international standards As stated in the Avolta’s Code of Conduct, the company is committed to conducting its operations in an ethical and legal manner in compliance with accepted business stan- dards and applicable laws and regulations with respect to anti-corruption, human rights, worker health & safety, en- vironmental protection, and product safety. Any form of child labor or forced labor is strictly forbidden and clear recruitment procedures and regular workplace controls ensure that this never happens at any location. Avolta is also committed to the Ten Principles of the United Nations Global Compact, and in particular to re- specting the Universal Declaration of Human Rights ad- opted by the United Nations General Assembly in 1948 and the International Labour Organization (ILO) Declara- tion on Fundamental Principles and Rights at Work ad- opted in 1998. actively encourages compliance across the whole com- ment remediation plans (where and if needed), thus ensur- pany. ing that processes are duly updated in cooperation with the Health & Safety committees. Additionally, Health & Safety As a result, Avolta has a number of different health & safety Committees undertake regular worksite analysis to identify regulations and procedures throughout the organization. potential risks and hazards. Regardless of the specific requirements of each local leg- islation, there are certain principles that all these proce- This analysis aims to identify existing hazards, as well as dures adhere to, including: conditions and operations in which changes might occur – Compliance with labor legislation on health and safety to create hazards. Results of these assessments are – Reduce work-related accidents, implementing the nec- shared with the local HR teams and management. The essary occupational risk prevention plans, to achieve an highest incidence of occupational accidents is, of course, effective identification of risks and to avoid them among store, both retail and F&B, and warehouse staff. – Promotion of a preventive culture, training our staff to achieve the best safety standards The greatest risks to which Avolta workers are affected in- – Having due diligence in the coordination of activities and clude: prevention measures with contractors, suppliers, or any – Risks related to material elements, objects, products and ta's work centers – Risk related to cooking activities – Continuous improvement, establishing objectives and – Falls at the same level goals for improvement, systematically taking into ac- – Incidents with transport and transfer devices. count the requirements of stakeholders, continuously assessing performance, applying the necessary correc- Training on health and safety is critical to promote a safe tions to achieve the proposed goals and establishing work environment. We therefore conduct induction ses- verification, auditing, and control processes to ensure sions with new members of our staff and hold regular that objectives are met training sessions with all of our staff, both in stores and of- – Management of occupational health and safety pro- fices, ensuring understanding of the policies and proce- cesses change from one location to another, with a num- dures. If needed, training is extended to workers who are ber of common guidelines that apply to all our opera- not members of our staff, but work on our premises on be- – Avolta operations provide topical information such as health and safety initiatives to our staffs, including Airport security practices workers who are not members of our staff but work on Due to the nature of our business, most of our staff are lo- our premises cated in airport environments, either working in stores and – Health and safety activities are regularly reviewed to restaurants, in airport offices and/or in airport ware- ensure issues are effectively managed and improve- houses. As part of the airport eco-system, our staff have ments are made where necessary. In some of our loca- to adhere to and follow the security principles and pro- tions, reviews include employee representation con- cesses established at the specific airports where our sultations (where appropriate) stores are located. Most of these regulations and policies – Responsibility for the governance and review of health are harmonized across the world to ensure consistent lev- and safety is with local operations and HR teams els of safety and consumer protection. Worldwide safety – At airport and seaport environments, close collabora- regulations are set by the International Civil Aviation Orga- tion with concession partner teams is maintained to nization and within Europe by the European Aviation ensure compliance with their own H&S regulations and Safety Agency. In order to work in our stores, members of management process. our staff need to obtain the corresponding airport autho- rization, which in most cases involves training courses on security measures and procedures in the airport environ- Promoting a healthy working environment Ensuring a safe workplace is a duty of all members of our ment. staff. Whilst the joint work of local Health & Safety Commit- tees and HR teams is crucial in identifying potential risks Well-being initiatives and hazards, workers are also encouraged to report to Besides ensuring physical health and safety at the work- these teams any work-related hazards or hazardous situa- place, Avolta is also committed in fostering mental and tions. The same process is used for workers to remove emotional well-being of its team members by offering themselves from work situations that they believe could trainings, benefits and welfare plans that vary from coun- cause injury or ill health. Work related incidents are investi- try to country. In many countries dedicated training activ- gated and reported to management to develop and imple- ities including emotions management, stress manage- Avolta provides regular trainings to facilitate lawful and ethical behavior in line with the principles set out in its Code of Conduct and its internal rules and policies. In all the countries where it operates, Avolta complies with laws and collective labor contracts regarding working hours, vacation, and leisure time, paying the required compensa- tion in case of overtime or atypical hours such as night shifts and holidays. The protection of human rights is also included in the Avolta Supplier Code of Conduct (see chapter Create Sus- tainable Travel Experiences on page 116), which explicitly forbids the supply of any product or service to Avolta manufactured, assembled or packaged in violation of in- ternationally accepted human rights standards and appli- cable laws as well as regulations in relation to labor and working conditions. Freedom of association and collective bargaining As stated in the Code of Conduct and the HR Policy, Avolta protects the right to freedom of association and collective bargaining, recognizing the paramount importance of these freedoms, in accordance with national laws govern- ing collective contracts, individual bargaining and free- dom of association. This commitment to transparency translates on various levels to the management of national collective bargaining, collective contracts by company and/or location, and individually negotiated agreements. The company’s policy on collective agreements is tailored to each location in which it operates, as each location is subject to its own specific laws and regulations. In all the countries in which it operates, Avolta fosters an open dialogue with the labor unions. Labor relations and talks follow the highest standards of transparency, collab- oration, and fair dealing, in strict accordance with the law and with the general aim of promoting a good working cli- mate and an open dialogue with the workers’ representa- tives. Avolta constantly engages with trade unions and keeps them updated on topics such as health and safety standards and protocols, management of the workforce, any use of government relief programs, talent retention measures, and any necessary organizational changes. When organizational changes occur, Avolta complies with all provisions of local laws and collective contracts by in- forming the unions and involving them, where applicable, in personal meetings. The minimum notice period in case of organizational changes varies from three to thirteen weeks depending on national and local laws. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 142/336 Engage Local Communities “Creating durable bonds with the communities by supporting social and economic development.” GRI indicators: 201-1, 202-2, 204-1 SDGs: 8.1, 8.2, 8.3, 8.5 9.1, 9.4, 9.5 Avolta places a paramount emphasis on supporting local communities in all the 73 countries where it operates, un- derstanding that this commitment extends beyond mere corporate responsibility to become a cornerstone of our business ethos. Within the focus area «Engage Local Communities» Avolta has identified a very important area of commitment and action: – Supporting Communities Create connections with the communities we serve and contribute to the growth of local economies Recognizing that sustainable business practices must be intertwined with community well-being, Avolta actively engages in initiatives that foster economic development, social progress, and environmental stewardship at the lo- cal level. By championing social and environmental causes in the regions it operates, Avolta aims to generate a posi- tive impact and a lasting legacy, demonstrating that offer- ing support to local communities is crucial. Avolta sources close to 30 % of its retail products (by COGS) from local suppliers. Our commitment in supporting local communi- ties globally is expressed by a diverse array of projects, each tailored to address specific needs of local communi- ties. The support of charitable institutions and causes, as a way of giving back to society, has been inherent in the growth and evolution of Avolta since its early years. gagement Strategy has identified six priority areas of in- volvement for Avolta’s own independent initiatives – both, at Global and Regional Level – to which the company will concentrate the efforts: – Education for disadvantaged children & adolescents – Healthcare support for people with special needs – Support & Training for vulnerable groups – Fight poverty & food insecurity – Clean water & sanitation for communities – Ocean plastic cleaning Avolta´s help to these causes consists of direct monetary contributions, fundraising campaigns (allowing us to raise additional funds by selling charitable retail and F&B prod- ucts in our stores and restaurants for the benefit of differ- ent NGOs), and in-kind donations to local charities of pri- mary goods, like clothing, meals, and food, which will then be distributed to people in need. The Community Engagement Strategy provides also indi- cations and guidelines for the indirect engagements and all those initiatives run in collaboration with concession partners and suppliers at local level. These are activities defined, managed and driven by our concession partners and/or brand partners, and where Avolta contributes to with supporting activities; e.g. airport fund-raising initia- tives, where Avolta provides space for the sale of water. In this context, in 2023, a new Avolta Community Engage- ment Strategy was approved by the Global Executive Committee with the aim of improving further the compa- ny’s capability to generate positive impact in a subset of social and environmental themes. The Community En- During 2023, at global, country or location level, Avolta supported over 150 nonprofit organizations and social or humanitarian initiatives, promoting cultural events and causes and actively engaging our staff through volunteer work. In total, Avolta donated over CHF 9 million, of which Donations by type Donations by thematic area 18 % Direct 2 % Training for vulnerable groups 1 % Other 3 % Clean water & sanitation 42 % In-kind 9 % Health care support for people with special needs 9 % Education for disadvantaged children 48 % Fight poverty & food insecurity 40 % Indirect 28 % Humanitarian support 18 % through direct donations, 42 % in-kind and 40 % Stakeholder Value Allocation through fundraising. 12 % Retained earnings and local partners In 2023 our corporate community initiatives, both at a com- pany or country level, strongly focused on fighting poverty and food insecurity as well as in providing humanitarian support to populations touched by either natural disasters or socio-political crisis. Avolta took care also of disadvan- taged children, young people and their families, contribut- ing to increase their access to education and healtcare sys- tems. In some cases, our team members have been actively engaged, by either participating in the selection of the char- ity initiatives or through volunteering initiatives. 3 % Shareholders 4 % Public authorities 5 % Bond- holders and lending banks Stakeholder value allocation Avolta contributes to the development of the economies in countries where it operates through the payment of fair and competitive salaries, taxes and the purchase of local products and services. As a way of assessing the eco- nomic impact of its business, Avolta annually discloses its 76 % Employees stakeholder value allocation, which reflects the direct banks. Income taxes paid to public authorities and com- monetary impact of its operations over its main stakehold- munities amounted to CHF 129.2 million in 2023, in the ers. The stakeholder value calculation is based on Avolta’s countries where we operate. The dividend payment, which CORE EBIT plus personnel expenses. It does not comprise the Board of Directors is proposing to the Annual General values allocated to business stakeholders, such as suppli- Meeting of Shareholders on May 15, 2024, of CHF 0.70 per ers or concession partners. registered share amounts to a total of CHF 106.8 million, and if approved by the AGM, will be paid to shareholders The accrued value allocated reached CHF 3,356.3 million in May 2024. in fiscal year 2023. Out of this amount, CHF 2,539.3 million was allocated to our employees in form of remuneration, Additionally, Avolta contributes every year to a compre- retirement benefits, social security payments and other hensive number of social initiatives, which are described personnel expenses. CHF 160.4 million were interest ex- in the Community Engagement section of the report, with penses as contributions to our bondholders and lending the remaining amounts being carried forward. Engage Local Communities “Creating durable bonds with the communities by supporting social and economic development.” GRI indicators: 201-1, 202-2, 204-1 SDGs: 8.1, 8.2, 8.3, 8.5 9.1, 9.4, 9.5 Avolta places a paramount emphasis on supporting local gagement Strategy has identified six priority areas of in- communities in all the 73 countries where it operates, un- volvement for Avolta’s own independent initiatives – both, derstanding that this commitment extends beyond mere at Global and Regional Level – to which the company will corporate responsibility to become a cornerstone of our concentrate the efforts: business ethos. – Education for disadvantaged children & adolescents Within the focus area «Engage Local Communities» – Healthcare support for people with special needs Avolta has identified a very important area of commitment – Support & Training for vulnerable groups and action: – Supporting Communities – Fight poverty & food insecurity – Clean water & sanitation for communities Create connections with the communities we serve – Ocean plastic cleaning and contribute to the growth of local economies Recognizing that sustainable business practices must be contributions, fundraising campaigns (allowing us to raise intertwined with community well-being, Avolta actively additional funds by selling charitable retail and F&B prod- engages in initiatives that foster economic development, ucts in our stores and restaurants for the benefit of differ- social progress, and environmental stewardship at the lo- ent NGOs), and in-kind donations to local charities of pri- cal level. By championing social and environmental causes mary goods, like clothing, meals, and food, which will then in the regions it operates, Avolta aims to generate a posi- be distributed to people in need. Avolta´s help to these causes consists of direct monetary tive impact and a lasting legacy, demonstrating that offer- ing support to local communities is crucial. Avolta sources The Community Engagement Strategy provides also indi- close to 30 % of its retail products (by COGS) from local cations and guidelines for the indirect engagements and suppliers. Our commitment in supporting local communi- all those initiatives run in collaboration with concession ties globally is expressed by a diverse array of projects, partners and suppliers at local level. These are activities each tailored to address specific needs of local communi- defined, managed and driven by our concession partners ties. The support of charitable institutions and causes, as and/or brand partners, and where Avolta contributes to a way of giving back to society, has been inherent in the with supporting activities; e.g. airport fund-raising initia- growth and evolution of Avolta since its early years. tives, where Avolta provides space for the sale of water. In this context, in 2023, a new Avolta Community Engage- During 2023, at global, country or location level, Avolta ment Strategy was approved by the Global Executive supported over 150 nonprofit organizations and social or Committee with the aim of improving further the compa- humanitarian initiatives, promoting cultural events and ny’s capability to generate positive impact in a subset of causes and actively engaging our staff through volunteer social and environmental themes. The Community En- work. In total, Avolta donated over CHF 9 million, of which Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 143/336 Donations by type Donations by thematic area 18 % Direct 2 % Training for vulnerable groups 1 % Other 3 % Clean water & sanitation 42 % In-kind 9 % Health care support for people with special needs 9 % Education for disadvantaged children 48 % Fight poverty & food insecurity 40 % Indirect 28 % Humanitarian support 18 % through direct donations, 42 % in-kind and 40 % through fundraising. Stakeholder Value Allocation In 2023 our corporate community initiatives, both at a com- pany or country level, strongly focused on fighting poverty and food insecurity as well as in providing humanitarian support to populations touched by either natural disasters or socio-political crisis. Avolta took care also of disadvan- taged children, young people and their families, contribut- ing to increase their access to education and healtcare sys- tems. In some cases, our team members have been actively engaged, by either participating in the selection of the char- ity initiatives or through volunteering initiatives. Stakeholder value allocation Avolta contributes to the development of the economies in countries where it operates through the payment of fair and competitive salaries, taxes and the purchase of local products and services. As a way of assessing the eco- nomic impact of its business, Avolta annually discloses its stakeholder value allocation, which reflects the direct monetary impact of its operations over its main stakehold- ers. The stakeholder value calculation is based on Avolta’s CORE EBIT plus personnel expenses. It does not comprise values allocated to business stakeholders, such as suppli- ers or concession partners. The accrued value allocated reached CHF 3,356.3 million in fiscal year 2023. Out of this amount, CHF 2,539.3 million was allocated to our employees in form of remuneration, retirement benefits, social security payments and other personnel expenses. CHF 160.4 million were interest ex- penses as contributions to our bondholders and lending 12 % Retained earnings and local partners 3 % Shareholders 4 % Public authorities 5 % Bond- holders and lending banks 76 % Employees banks. Income taxes paid to public authorities and com- munities amounted to CHF 129.2 million in 2023, in the countries where we operate. The dividend payment, which the Board of Directors is proposing to the Annual General Meeting of Shareholders on May 15, 2024, of CHF 0.70 per registered share amounts to a total of CHF 106.8 million, and if approved by the AGM, will be paid to shareholders in May 2024. Additionally, Avolta contributes every year to a compre- hensive number of social initiatives, which are described in the Community Engagement section of the report, with the remaining amounts being carried forward. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 144/336 Supporting Communities “Create connections with the communities we serve and contribute to the growth of local economies.” The initiatives and projects described below represent some of the most prominent projects we support. The progress made and the encouraging results of our ongo- ing support to these initiatives make us feel very proud and is an incentive to strengthen our ties with them. Education for disadvantaged children and adolescents SOS Children’s Villages program in Brazil, Mexico and Kenya Our global collaboration with SOS Children’s Villages started several years ago in 2009 and continued also in 2023 fostering the long-standing relationship and bene- fitting nearly 500 infants, young children and teenagers and their families. SOS Children's Villages works towards keeping families together, provide alternative care when needed, supporting young people on their path to inde- pendence, and advocating for the rights of children. With the support of Avolta, SOS Children’s Villages improves the lives of at-risk children and families, enabling a future in the communities where SOS Children’s Villages work. During the longstanding collaboration, Avolta has also lent similar support in Morocco and Cambodia. Captain Dufry – Avolta´s global charity initiative Avolta continued extending the reach of its global charity initiative, ”Captain Dufry”. Launched in 2020, Avolta sells Captain Dufry, a soft toy dog wearing a scarf and aviator hat with goggles, across Avolta stores in over 20 countries. Benefits from this initiative are donated to a global charity, which for the 2021 – 2023 period is SOS Children´s Vil- lages. Captain Dufry is available at an accessible price and designed to be an irresistible “feel-good” purchase. This item gives our 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. Be- yond the financial objective pursued with Captain Dufry, this initiative also serves to increase awareness amongst Avolta’s customers of SOS Children’s Villages and their ac- tivities. To this extent, the availability of Captain Dufry in stores is complemented with in-store communication and signage to build awareness. Avolta reserves high visibility spaces across the stores where Captain Dufry is available, including dedicated sales displays and gondolas. On top of this, our customers are offered additional options to do- nate by using the Red By Dufry app, hence, increasing the possibilities of helping this charity initiative even more. Hudson Round-up program Since 2022, Hudson switched its previous donation collec- tion platform to a round-up program at the point-of-sale, which allows travelers to donate the remaining change of their purchases to charities. Hudson used this new plat- form to support two causes throughout the year: Commu- nities In Schools® (CIS®) and the Disasters Emergency Committee (DEC). Hudson was proud to continue its long- standing partnership with CIS, in the USA the largest or- ganization dedicated to empowering students in need. Moreover, Hudson expanded its level of support for CIS, with donations benefitting both the CIS National Office and now 28 local CIS affiliates. By further investing in the affiliate network, Hudson deepened its local community involvement, while helping CIS to strengthen its academic impact on even more students and schools. Until 2023, Hudson has now raised USD 5 million for CIS over its part- nership of more than a decade. With the support of Hud- son, CIS has grown from serving 1.3 million students in 2008 to 1.8 million today. Additionally, 120,000 high school seniors have graduated with Communities In Schools since the partnership started. In the USA, Hudson partici- pated in a 5 km charity run, hosted a coat and shoe drive at its New Jersey corporate office, and helped with a back- to-school event, amongst other local initiatives. Moreover, throughout North America, team members participated in “Movember,” a global initiative where individuals grow moustaches and beards to raise awareness and collect donations for men’s health issues such as prostate cancer, testicular cancer and mental health challenges. Health care support for people with special needs Support to Children’s Cancer and Leukaemia Group Children’s Cancer and Leukaemia Group (CCLG), a lead- ing children’s cancer charity, and the UK and Ireland’s pro- fessional association for those involved in the treatment and care of children with cancer, is the charity supported provides palliative medical and nursing care along with by our UK colleagues. A nominated charity is chosen ev- psychological, social and spiritual support to patients and ery three years based on the votes of our UK employees, their families, as well as the Skytali Hellenic Heart-Lung and CCLG was the chosen charity partner. Transplant Association. Finally, Hellenic Duty Free Shops successfully supported Avolta’s fundraising initiative for 2023 marked the second year of World Duty Free’s sup- SOS Children's Villages with Captain Dufry and the ONE- port for CCLG, and it was the year in which World Duty TREEPLANTED Organization. Free reached the £ 80,000 milestone, the £ 90,000 mile- stone, the £ 100,000 milestone, and then the £ 120,000 Support to communities in Türkiye, Syria, and Morocco milestone! These incredible fundraising targets were To support people and communities impacted by the dev- achieved because of the various sponsorships and events astating earthquake in Türkiye and Syria the 6th Feb- that World Duty Free staff members committed to, includ- ruary 2023, and in Morocco the 8th September 2023, ing taking on the fastest zip line in the world, skydiving, Avolta carried out combined initiatives to assist the popu- completing sponsored walks, holding Cake Bakes, and lation living in the affected regions. To provide humaniatar- many other successful initiatives. ian support to the affected population of Türkiye the com- pany made a significant donation of CHF 500,000 to The With the funds raised, CCLG were able to fund further im- International Federation of Red Cross and Red Crescent portant projects and vital research, and to release a vari- Societies (IFRC), the world's largest humanitarian network. ety of new publications, supportive care factsheets and updated information resources. These included: Equally in Morocco, Avolta contributed to the provision of – The newly updated publication "Coping with family life humanitarian assistance and reliefs to the population of and cancer”, a practical guide for families of a child with the Taroudant region and Imlol, two areas severely im- cancer, which contains tips and advice to help newly di- pacted by the earthquake. Furthermore, Avolta collabo- agnosed families cope better with the impact of cancer rated with the Awsatakh Association of the Douar of on their lives Tamaterte, to help the reconstruction and, in particular, to – The new supportive care factsheets, designed to help establishing a school transport system for middle school parents, carers and families understand more about how students and renovating classrooms to reopen the pri- treatment may affect their child and what they can do to mary school before winter. support them Support & Training for vulnerable groups Thanks to World Duty Free, these publications are given directly to families in hospital, providing expert and reli- Rio de Janeiro, Brazil – Helping to build able information at a time when it’s needed the most. the future of young teenagers Childhood cancer research continues to be severely un- Since 1995, Avolta has been sponsoring a social promo- derfunded, and current treatments regimes are often re- tion program in Rio de Janeiro aimed at improving the liant on outdated adult-oriented therapies which aren’t al- skills of young people and, hence, increasing their em- ways effective for children’s cancer. Together with CCLG, ployability. The 20 participants of the 2023 class benefited World Duty Free is helping to make sure that children di- from this program, which features free professional edu- agnosed with cancer have access to the kinder, more ef- cation to young people from communities around Galeão fective treatments and that their families are given reliable, Airport, including various classes and education modules helpful information as soon as their child is diagnosed. covering various topics and skills such as English, technol- Support to multiple projects in Greece Hellenic Duty Free Shops implemented various commu- ogy, retail operations, professional orientation, teamwork, leadership, rules of etiquette, ethics and citizenship. nity activities throughout the year, and for the first time in- The daily classes, which run over a seven month period cluded employee participation in these initiatives addition- cover three modules and are attended by 18- to 21-year- ally to boost workplace engagement and motivation. This old students of different genders, sexual orientation, na- year’s initiatives included the Non Finish Line Charity Run, tionality and ethnicity. They all receive free meals, uni- and the Run For The Cure with donations to Together for forms, school and educational materials and transportation Children Institution and Breast Cancer Organizations re- assistance. Avolta then supports participants in their first spectively, as well as Deipno Agapis providing meals to steps into professional life. Some join the Avolta team or homeless at the center of Athens. Main initiatives further are employed by other supportive companies, and those included the support of Make-A-Wish Hellas, an organiza- who do not immediately find employment are given ongo- tion granting wishes of children with critical illnesses to ing support in finding an educational or career path. This transform their lives; Galilee Palliative Care Center, which program is also an institution amongst Avolta employees Supporting Communities “Create connections with the communities we serve and contribute to the growth of local economies.” which for the 2021 – 2023 period is SOS Children´s Vil- lages. Captain Dufry is available at an accessible price and designed to be an irresistible “feel-good” purchase. This item gives our 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. Be- yond the financial objective pursued with Captain Dufry, this initiative also serves to increase awareness amongst Avolta’s customers of SOS Children’s Villages and their ac- The initiatives and projects described below represent tivities. To this extent, the availability of Captain Dufry in some of the most prominent projects we support. The stores is complemented with in-store communication and progress made and the encouraging results of our ongo- signage to build awareness. Avolta reserves high visibility ing support to these initiatives make us feel very proud spaces across the stores where Captain Dufry is available, and is an incentive to strengthen our ties with them. including dedicated sales displays and gondolas. On top Education for disadvantaged children and adolescents of this, our customers are offered additional options to do- nate by using the Red By Dufry app, hence, increasing the possibilities of helping this charity initiative even more. SOS Children’s Villages program in Brazil, Mexico and Kenya Hudson Round-up program Since 2022, Hudson switched its previous donation collec- Our global collaboration with SOS Children’s Villages tion platform to a round-up program at the point-of-sale, started several years ago in 2009 and continued also in which allows travelers to donate the remaining change of 2023 fostering the long-standing relationship and bene- their purchases to charities. Hudson used this new plat- fitting nearly 500 infants, young children and teenagers form to support two causes throughout the year: Commu- and their families. SOS Children's Villages works towards nities In Schools® (CIS®) and the Disasters Emergency keeping families together, provide alternative care when Committee (DEC). Hudson was proud to continue its long- needed, supporting young people on their path to inde- standing partnership with CIS, in the USA the largest or- pendence, and advocating for the rights of children. With ganization dedicated to empowering students in need. the support of Avolta, SOS Children’s Villages improves Moreover, Hudson expanded its level of support for CIS, the lives of at-risk children and families, enabling a future with donations benefitting both the CIS National Office in the communities where SOS Children’s Villages work. and now 28 local CIS affiliates. By further investing in the During the longstanding collaboration, Avolta has also lent affiliate network, Hudson deepened its local community similar support in Morocco and Cambodia. involvement, while helping CIS to strengthen its academic impact on even more students and schools. Until 2023, Hudson has now raised USD 5 million for CIS over its part- nership of more than a decade. With the support of Hud- son, CIS has grown from serving 1.3 million students in 2008 to 1.8 million today. Additionally, 120,000 high school seniors have graduated with Communities In Schools since the partnership started. In the USA, Hudson partici- pated in a 5 km charity run, hosted a coat and shoe drive at its New Jersey corporate office, and helped with a back- to-school event, amongst other local initiatives. Moreover, throughout North America, team members participated in “Movember,” a global initiative where individuals grow moustaches and beards to raise awareness and collect donations for men’s health issues such as prostate cancer, testicular cancer and mental health challenges. Captain Dufry – Avolta´s global charity initiative Health care support for people with special needs Avolta continued extending the reach of its global charity initiative, ”Captain Dufry”. Launched in 2020, Avolta sells Support to Children’s Cancer and Leukaemia Group Captain Dufry, a soft toy dog wearing a scarf and aviator Children’s Cancer and Leukaemia Group (CCLG), a lead- hat with goggles, across Avolta stores in over 20 countries. ing children’s cancer charity, and the UK and Ireland’s pro- Benefits from this initiative are donated to a global charity, fessional association for those involved in the treatment Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 145/336 and care of children with cancer, is the charity supported by our UK colleagues. A nominated charity is chosen ev- ery three years based on the votes of our UK employees, and CCLG was the chosen charity partner. 2023 marked the second year of World Duty Free’s sup- port for CCLG, and it was the year in which World Duty Free reached the £ 80,000 milestone, the £ 90,000 mile- stone, the £ 100,000 milestone, and then the £ 120,000 milestone! These incredible fundraising targets were achieved because of the various sponsorships and events that World Duty Free staff members committed to, includ- ing taking on the fastest zip line in the world, skydiving, completing sponsored walks, holding Cake Bakes, and many other successful initiatives. With the funds raised, CCLG were able to fund further im- portant projects and vital research, and to release a vari- ety of new publications, supportive care factsheets and updated information resources. These included: – The newly updated publication "Coping with family life and cancer”, a practical guide for families of a child with cancer, which contains tips and advice to help newly di- agnosed families cope better with the impact of cancer on their lives – The new supportive care factsheets, designed to help parents, carers and families understand more about how treatment may affect their child and what they can do to support them Thanks to World Duty Free, these publications are given directly to families in hospital, providing expert and reli- able information at a time when it’s needed the most. Childhood cancer research continues to be severely un- derfunded, and current treatments regimes are often re- liant on outdated adult-oriented therapies which aren’t al- ways effective for children’s cancer. Together with CCLG, World Duty Free is helping to make sure that children di- agnosed with cancer have access to the kinder, more ef- fective treatments and that their families are given reliable, helpful information as soon as their child is diagnosed. Support to multiple projects in Greece Hellenic Duty Free Shops implemented various commu- nity activities throughout the year, and for the first time in- cluded employee participation in these initiatives addition- ally to boost workplace engagement and motivation. This year’s initiatives included the Non Finish Line Charity Run, and the Run For The Cure with donations to Together for Children Institution and Breast Cancer Organizations re- spectively, as well as Deipno Agapis providing meals to homeless at the center of Athens. Main initiatives further included the support of Make-A-Wish Hellas, an organiza- tion granting wishes of children with critical illnesses to transform their lives; Galilee Palliative Care Center, which provides palliative medical and nursing care along with psychological, social and spiritual support to patients and their families, as well as the Skytali Hellenic Heart-Lung Transplant Association. Finally, Hellenic Duty Free Shops successfully supported Avolta’s fundraising initiative for SOS Children's Villages with Captain Dufry and the ONE- TREEPLANTED Organization. Support to communities in Türkiye, Syria, and Morocco To support people and communities impacted by the dev- astating earthquake in Türkiye and Syria the 6th Feb- ruary 2023, and in Morocco the 8th September 2023, Avolta carried out combined initiatives to assist the popu- lation living in the affected regions. To provide humaniatar- ian support to the affected population of Türkiye the com- pany made a significant donation of CHF 500,000 to The International Federation of Red Cross and Red Crescent Societies (IFRC), the world's largest humanitarian network. Equally in Morocco, Avolta contributed to the provision of humanitarian assistance and reliefs to the population of the Taroudant region and Imlol, two areas severely im- pacted by the earthquake. Furthermore, Avolta collabo- rated with the Awsatakh Association of the Douar of Tamaterte, to help the reconstruction and, in particular, to establishing a school transport system for middle school students and renovating classrooms to reopen the pri- mary school before winter. Support & Training for vulnerable groups Rio de Janeiro, Brazil – Helping to build the future of young teenagers Since 1995, Avolta has been sponsoring a social promo- tion program in Rio de Janeiro aimed at improving the skills of young people and, hence, increasing their em- ployability. The 20 participants of the 2023 class benefited from this program, which features free professional edu- cation to young people from communities around Galeão Airport, including various classes and education modules covering various topics and skills such as English, technol- ogy, retail operations, professional orientation, teamwork, leadership, rules of etiquette, ethics and citizenship. The daily classes, which run over a seven month period cover three modules and are attended by 18- to 21-year- old students of different genders, sexual orientation, na- tionality and ethnicity. They all receive free meals, uni- forms, school and educational materials and transportation assistance. Avolta then supports participants in their first steps into professional life. Some join the Avolta team or are employed by other supportive companies, and those who do not immediately find employment are given ongo- ing support in finding an educational or career path. This program is also an institution amongst Avolta employees Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 146/336 and one of the initiatives Avolta Brazil staff feel very proud of. Our staff in Brazil act as mentors to the program’s stu- dents and every year more than 60 volunteers from both Avolta and its Brazilian partners get involved. Over the 27 years that this program has run, it has proven to be a great success. Employability rates usually reach high levels and since Avolta started its collaboration, over 770 young peo- ple have benefited. Autogrill Italia and Cometa together to support people in need In Italy, since 2020, Autogrill Italia works with Cometa: an association that welcomes hundreds of children, young people, educators, volunteers and professionals to offer personal and professional growth paths to young people living in difficult social conditions. The collaboration with Cometa’s social cooperative Contrada degli Artigiani re- sulted in various installations made by the members of the social cooperative – with the support of specialized profes- sionals – like the large wooden barrique in the Villoresi Ovest restaurant or the artwork installed at the food court of Linate Airport. The latter, created by young people from the social cooperative under the guidance of master crafts- people, is a wall sculpture made of brass and backlit frag- ments of glass that represent luminous “gemstones” and recall the gothic spires over Piazza Duomo, symbol of the city of Milan. HOME MCR In the UK, World Duty Free has supported HOME since 2004. HOME is a Manchester based organisation that aims to improve the lives of young people by running inno- vative arts projects for a range of beneficiaries across the area. It presents and produces a range of art forms includ- ing theatre, film and visual art, alongside a dynamic com- munity engagement programme. Through our engage- ment with HOME, World Duty Free has helped to develop and launch HOME Young Creatives, an inspiring twelve- week arts course in Wythenshawe that involves over 100 young people aged between 12 and 18, led by experienced and knowledgeable artists. The course has been running for several years now and helps to develop and broaden young people’s skillsets and aspirations, culminating in the creation of their own work. Fight poverty & food insecurity HMSHost Foundation Through HMSHost Foundation, the company helps local North American communities by donating money to mis- sion-aligned nonprofit organizations. The Foundation pro- vides food, housing, veterans services and supports the growth and education of the workforce, including young generations, to fight poverty and improve the prosperity of the communities served. HMSHost Foundation directs its efforts on the basis of five pillars: – Relieve hunger and promote nutritional wellness through food-related initiatives – Combat homelessness through access to safe hous- ing, furnishings, clothing, and stable employment – Encourage the next generation through access to edu- cation and training – Promote financial stability through training and job placement – Honor veterans and their families by supporting pro- grams that meet their needs for food, shelter, medical care, and providing job training and placement round-up-for-charity initiative at HMSHost's full-service Free has been raising money through the sale of One Wa- restaurants across the country, also provided a grant. ter to bring clean water, sanitation and hygiene solutions to some of the world’s poorest communities. Through the sale of One Water across World Duty Free shops an amaz- ing £ 2.5 million in total to date have been raised, chang- ing the lives of over 400,000 people. Together with One Water and The One Foundation, Avolta is helping to strengthen water and sanitation services across Kenya, Rwanda, Ghana and Malawi through the delivery of piped water and sanitation services and by capacity building with local utilities for better service provision. Together, the program is repairing broken water points and provid- ing the tools and community training required to ensure the future sustainability of these pumps. Food donations: offering support for local communities while reducing food waste Within the F&B sector, Avolta has a series of active part- nerships with nonprofit organizations in the different re- gions where the company operates. Among these, in the USA, Avolta cooperates, since 2011, with Food Donation Connection (FDC) by donating surplus food to people in need through partnerships with local social service agen- cies. Every donor location is matched with a group of qual- ified charities that collect the food at scheduled days and times. FDC has worked with our operational teams to make sure the food is safe and healthy and to render the donation process more efficient and secure. Also in Italy, Charity Water Project in Zurich and Basel Airports Avolta has been actively supporting nonprofit organiza- Avolta continued the partnership initiated in 2014 with tions active in combating food waste. Its most significant Flughafen Zürich AG, which, under the name of “Charity partnerships include those with Banco Alimentare and Water”, raises funds for charitable causes through the sale Pane Quotidiano, which receive surplus food and straight of bottled water in the airport. For every bottle of mineral donations from Autogrill’s central warehouse. Since 1989, water sold at the price of CHF 2.50, which is obtained from Banco Alimentare has been collecting unspoiled, non-ex- the Adello spring in Adelboden, in the Swiss Alps, 50 cen- pired food that is no longer sellable and would otherwise times are donated to a charitable organization. Sozialwerk be thrown away. Pane Quotidiano, based in Milan, puts hu- Pfarrer Sieber (Social Work Priest Sieber) is the 2023 new man dignity at the center of its activity and has been dis- beneficiary of this project, for which over CHF 400,000 tributing food to those who need it since 1898. In 2023, were raised since January 2023. The foundation strives for around 100,000 product items – approximately 22 tons of the greatest possible social reintegration of marginalized food – were donated. Moreover, also in 2023, for every people. Where this is not possible due to lack of individual “Menù Pausa Perfetta” sold in our Italian F&B restaurants, resources on the part of those affected, they should be Avolta made a donation to Banco Alimentare to support able to live with the greatest possible autonomy with the the distribution of food products to local charities. support of Sozialwerk Pfarrer Sieber and be embedded in Clean water & sanitation for communities a sustainable network of relationships. Oceana One Water – selling water bottles to provide sustainable clean water In 2023, Avolta began its collaboration with Oceana: the largest international advocacy organization focused on Since 2016, World Duty Free has collaborated with The ocean conservation. Through this partnership Avolta has One Foundation as a commercial supporter for the sale of raised funds from the sale of the reusable bags made from the charity’s bottled water brand “One Water” in all of its 100 % recycled plastic bottles. The funds were intended to UK airport stores. Over the past seven years, World Duty Oceana's marine habitats campaign for the protection of In 2023, HMSHost Foundation donated USD 540,000 to poverty-fighting organizations and raised – in collabora- tion with Hudson – nearly USD 300,000 to support the Maui Strong Fund of Hawai‘i Community Foundation, which is working tirelessly to provide financial resources for the people and places affected by the devastating Maui wildfires. Funding for the Maui Strong Fund was sourced through contributions from travelers who made purchases at Hudson travel convenience stores nationwide in the USA. Additionally, the HMSHost Foundation, partially sup- ported by patrons donating spare change at quick-service restaurants in Kahului Airport (OGG), and participating in a Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 147/336 and one of the initiatives Avolta Brazil staff feel very proud HMSHost Foundation directs its efforts on the basis of five of. Our staff in Brazil act as mentors to the program’s stu- pillars: dents and every year more than 60 volunteers from both – Relieve hunger and promote nutritional wellness Avolta and its Brazilian partners get involved. Over the 27 through food-related initiatives years that this program has run, it has proven to be a great – Combat homelessness through access to safe hous- success. Employability rates usually reach high levels and ing, furnishings, clothing, and stable employment since Avolta started its collaboration, over 770 young peo- – Encourage the next generation through access to edu- ple have benefited. Autogrill Italia and Cometa together to support people in need – Promote financial stability through training and job cation and training placement – Honor veterans and their families by supporting pro- In Italy, since 2020, Autogrill Italia works with Cometa: an grams that meet their needs for food, shelter, medical association that welcomes hundreds of children, young care, and providing job training and placement round-up-for-charity initiative at HMSHost's full-service restaurants across the country, also provided a grant. Free has been raising money through the sale of One Wa- ter to bring clean water, sanitation and hygiene solutions to some of the world’s poorest communities. Through the sale of One Water across World Duty Free shops an amaz- ing £ 2.5 million in total to date have been raised, chang- ing the lives of over 400,000 people. Together with One Water and The One Foundation, Avolta is helping to strengthen water and sanitation services across Kenya, Rwanda, Ghana and Malawi through the delivery of piped water and sanitation services and by capacity building with local utilities for better service provision. Together, the program is repairing broken water points and provid- ing the tools and community training required to ensure the future sustainability of these pumps. Food donations: offering support for local communities while reducing food waste Within the F&B sector, Avolta has a series of active part- nerships with nonprofit organizations in the different re- gions where the company operates. Among these, in the USA, Avolta cooperates, since 2011, with Food Donation Connection (FDC) by donating surplus food to people in need through partnerships with local social service agen- cies. Every donor location is matched with a group of qual- ified charities that collect the food at scheduled days and times. FDC has worked with our operational teams to make sure the food is safe and healthy and to render the donation process more efficient and secure. Also in Italy, Avolta has been actively supporting nonprofit organiza- tions active in combating food waste. Its most significant partnerships include those with Banco Alimentare and Pane Quotidiano, which receive surplus food and straight donations from Autogrill’s central warehouse. Since 1989, Banco Alimentare has been collecting unspoiled, non-ex- pired food that is no longer sellable and would otherwise be thrown away. Pane Quotidiano, based in Milan, puts hu- man dignity at the center of its activity and has been dis- tributing food to those who need it since 1898. In 2023, around 100,000 product items – approximately 22 tons of food – were donated. Moreover, also in 2023, for every “Menù Pausa Perfetta” sold in our Italian F&B restaurants, Avolta made a donation to Banco Alimentare to support the distribution of food products to local charities. Clean water & sanitation for communities One Water – selling water bottles to provide sustainable clean water Since 2016, World Duty Free has collaborated with The One Foundation as a commercial supporter for the sale of the charity’s bottled water brand “One Water” in all of its UK airport stores. Over the past seven years, World Duty Charity Water Project in Zurich and Basel Airports Avolta continued the partnership initiated in 2014 with Flughafen Zürich AG, which, under the name of “Charity Water”, raises funds for charitable causes through the sale of bottled water in the airport. For every bottle of mineral water sold at the price of CHF 2.50, which is obtained from the Adello spring in Adelboden, in the Swiss Alps, 50 cen- times are donated to a charitable organization. Sozialwerk Pfarrer Sieber (Social Work Priest Sieber) is the 2023 new beneficiary of this project, for which over CHF 400,000 were raised since January 2023. The foundation strives for the greatest possible social reintegration of marginalized people. Where this is not possible due to lack of individual resources on the part of those affected, they should be able to live with the greatest possible autonomy with the support of Sozialwerk Pfarrer Sieber and be embedded in a sustainable network of relationships. Oceana In 2023, Avolta began its collaboration with Oceana: the largest international advocacy organization focused on ocean conservation. Through this partnership Avolta has raised funds from the sale of the reusable bags made from 100 % recycled plastic bottles. The funds were intended to Oceana's marine habitats campaign for the protection of people, educators, volunteers and professionals to offer personal and professional growth paths to young people living in difficult social conditions. The collaboration with Cometa’s social cooperative Contrada degli Artigiani re- sulted in various installations made by the members of the social cooperative – with the support of specialized profes- sionals – like the large wooden barrique in the Villoresi Ovest restaurant or the artwork installed at the food court of Linate Airport. The latter, created by young people from the social cooperative under the guidance of master crafts- people, is a wall sculpture made of brass and backlit frag- ments of glass that represent luminous “gemstones” and recall the gothic spires over Piazza Duomo, symbol of the city of Milan. HOME MCR In the UK, World Duty Free has supported HOME since 2004. HOME is a Manchester based organisation that aims to improve the lives of young people by running inno- vative arts projects for a range of beneficiaries across the area. It presents and produces a range of art forms includ- ing theatre, film and visual art, alongside a dynamic com- munity engagement programme. Through our engage- ment with HOME, World Duty Free has helped to develop and launch HOME Young Creatives, an inspiring twelve- week arts course in Wythenshawe that involves over 100 young people aged between 12 and 18, led by experienced and knowledgeable artists. The course has been running for several years now and helps to develop and broaden young people’s skillsets and aspirations, culminating in the creation of their own work. Fight poverty & food insecurity HMSHost Foundation In 2023, HMSHost Foundation donated USD 540,000 to poverty-fighting organizations and raised – in collabora- tion with Hudson – nearly USD 300,000 to support the Maui Strong Fund of Hawai‘i Community Foundation, which is working tirelessly to provide financial resources Through HMSHost Foundation, the company helps local for the people and places affected by the devastating Maui North American communities by donating money to mis- wildfires. Funding for the Maui Strong Fund was sourced sion-aligned nonprofit organizations. The Foundation pro- through contributions from travelers who made purchases vides food, housing, veterans services and supports the at Hudson travel convenience stores nationwide in the growth and education of the workforce, including young USA. Additionally, the HMSHost Foundation, partially sup- generations, to fight poverty and improve the prosperity ported by patrons donating spare change at quick-service of the communities served. restaurants in Kahului Airport (OGG), and participating in a Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 148/336 30 % of the marine surface, and thus of its endangered species. Besides protecting marine wildlife by reducing the impact of single-use bags, the partnership aims at in- creasing consumer’s awareness on the importance of simple actions benefiting the environment. The initiative has firstly involved our retail stores in Spain and will be ex- tended in another 21 countries across all the regions where the company operates. And a long list of other local contributions Support for the underprivileged is deeply rooted in our company. In addition to the main initiatives mentioned above there is a long list of causes and projects of all sizes that Avolta subsidiaries and employees support year after year. Amongst others, these include direct donations to the Prime Minister’s National Relief fund (PMNRF) in India to support disaster victims, and the support of our Armenian operation to the social program Children of Armenia Fund (COAF). The main protagonists of many of these actions are our employees, who champion the causes and promote their support through micro-donations, charity runs, bike rides, bake sales and other initiatives to support the many deserving projects. Internally we give voice to these initia- tives through our internal communication platforms to rec- ognize the effort, generate awareness and motivate other employees to develop initiatives of their own. l a i c n a n i F t r o p e R 3 2 0 2 30 % of the marine surface, and thus of its endangered species. Besides protecting marine wildlife by reducing the impact of single-use bags, the partnership aims at in- creasing consumer’s awareness on the importance of simple actions benefiting the environment. The initiative has firstly involved our retail stores in Spain and will be ex- tended in another 21 countries across all the regions where the company operates. And a long list of other local contributions Support for the underprivileged is deeply rooted in our company. In addition to the main initiatives mentioned above there is a long list of causes and projects of all sizes that Avolta subsidiaries and employees support year after year. Amongst others, these include direct donations to the Prime Minister’s National Relief fund (PMNRF) in India to support disaster victims, and the support of our Armenian operation to the social program Children of Armenia Fund (COAF). The main protagonists of many of these actions are our employees, who champion the causes and promote their support through micro-donations, charity runs, bike rides, bake sales and other initiatives to support the many deserving projects. Internally we give voice to these initia- tives through our internal communication platforms to rec- ognize the effort, generate awareness and motivate other employees to develop initiatives of their own. l i a c n a n F i t r o p e R 3 2 0 2 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 150/336 Excellent progress on our Destination 2027 ambitions Dear all, Free Cash Flow (EFCF) reached the longer-term competitive advan- CHF 323.0 million, an 28.6 % conver- tage of the business. In total, we As we look back on 2023, we can be sion of CORE EBITDA, positioning have a medium-term leverage target proud of our many achievements. The us firmly on the pathway towards our of 1.5-2.0x net debt/CORE EBITDA most notable highlights are perhaps «Destination 2027» goal of EFCF with flexibility up to 2.5x if needed the closure of the two-staged EUR conversion superior to 30 %. 2.4 billion Autogrill transaction in July 2023 and the earlier-than-anticipated integration of the businesses, stand- ing 2023 as a historical and transfor- mational year for Avolta. In total, our full year CORE turnover reached Profitable and cash generative growth. after investment in growth. Our De- cember 31, 2023 net debt amounted to CHF 2,696.1 million, the lowest level since 2015, and representing a net debt to CORE EBITDA leverage ratio of 2.6x, well below the covenants ceil- ing 4.5x, in part thanks to the combi- CHF 12,534.6 million, representing All of the aforementioned metrics nation with Autogrill. As at De- organic growth of 21.6 % proforma performed well above our initial ex- cember 31, 2023 we had CHF 715 versus the previous year. pectations, set out at the beginning of million cash on the balance sheet and Despite a business environment fur- the continued strong global travel de- lion resulting from undrawn credit fa- the year. This was thanks, in part, to additional liquidity of CHF 1,923 mil- ther impacted by inflation, interest mand as well as the lower-than-fore- cilities. rate challenges and geopolitical con- casted integration costs1 and, in part, cerns, demand for travel and the to the earlier-than-anticipated syn- Avolta has a history of addressing travel experience was strong and with ergy realization. demand through to the end of the debt financing well ahead of maturity by aligning products and timing to year remaining strong we are confi- In October last year, we communi- the respective market environment to dent that this momentum is sustain- cated our «Destination 2027» vision achieve the best possible financing. able over the foreseeable future. as regards our medium-term capital At present, while Avolta has access to Our reinforced geographical diversifi- allocation. Specifically, of our annual a range of products and strives to bal- cation (73 countries, over 1,000 loca- EFCF, we have committed to returning ance financing security, maturity pro- tions, over 5,100 stores and restau- one third to shareholders by way of a file and cost aspects and while cur- rants) has further enhanced our dividend. For 2023, we will propose at rent available liquidity of CHF 2,637.9 resilient and defensive qualities, un- the Annual General Meeting of Share- million, thereof CHF 715 million avail- derpinning our «Destination 2027» holders (AGM) on 15 May 2024, a divi- able cash and cash equivalents, we are financial ambitions of medium-term dend of CHF 0.70 per share equating mindful of the 2.5 % coupon on our profitable and cash generative to a total payout of CHF 106.8 million October 2024 EUR 800 million matu- growth. from our EFCF of CHF 323.0 million. rity. For the remaining two thirds of annual In this regard, Avolta delivered a solid EFCF, our priority is to deleverage the 2023 profit performance with CORE balance sheet while retaining a de- EBITDA of CHF 1,129.6 million, repre- gree of flexibility to invest in relevant Ample liquidity. senting a margin of 9.0 %, + 30 basis business development and small bolt- At an attractive weighted average rate points (bps) proforma. 2023 Equity on acquisitions in order to reinforce of 3.8 %, our current debt profile con- 1 CHF 50 million vs. our initial expectation of CHF 100 million, of which CHF 25 million was expensed in 2023 with the remainder to be expensed in 2024. Yves Gerster Chief Financial Officer Avolta delivered a solid 2023 profit performance. Excellent progress on our Destination 2027 ambitions Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 151/336 Dear all, As we look back on 2023, we can be proud of our many achievements. The most notable highlights are perhaps the closure of the two-staged EUR 2.4 billion Autogrill transaction in July 2023 and the earlier-than-anticipated integration of the businesses, stand- ing 2023 as a historical and transfor- mational year for Avolta. In total, our full year CORE turnover reached CHF 12,534.6 million, representing organic growth of 21.6 % proforma versus the previous year. Despite a business environment fur- ther impacted by inflation, interest rate challenges and geopolitical con- cerns, demand for travel and the travel experience was strong and with demand through to the end of the year remaining strong we are confi- dent that this momentum is sustain- able over the foreseeable future. Our reinforced geographical diversifi- cation (73 countries, over 1,000 loca- tions, over 5,100 stores and restau- rants) has further enhanced our resilient and defensive qualities, un- derpinning our «Destination 2027» financial ambitions of medium-term profitable and cash generative growth. In this regard, Avolta delivered a solid 2023 profit performance with CORE EBITDA of CHF 1,129.6 million, repre- senting a margin of 9.0 %, + 30 basis points (bps) proforma. 2023 Equity 1 CHF 50 million vs. our initial expectation of CHF 100 million, of which CHF 25 million was expensed in 2023 with the remainder to be expensed in 2024. Free Cash Flow (EFCF) reached CHF 323.0 million, an 28.6 % conver- sion of CORE EBITDA, positioning us firmly on the pathway towards our «Destination 2027» goal of EFCF conversion superior to 30 %. Profitable and cash generative growth. All of the aforementioned metrics performed well above our initial ex- pectations, set out at the beginning of the year. This was thanks, in part, to the continued strong global travel de- mand as well as the lower-than-fore- casted integration costs1 and, in part, to the earlier-than-anticipated syn- ergy realization. In October last year, we communi- cated our «Destination 2027» vision as regards our medium-term capital allocation. Specifically, of our annual EFCF, we have committed to returning one third to shareholders by way of a dividend. For 2023, we will propose at the Annual General Meeting of Share- holders (AGM) on 15 May 2024, a divi- dend of CHF 0.70 per share equating to a total payout of CHF 106.8 million from our EFCF of CHF 323.0 million. For the remaining two thirds of annual EFCF, our priority is to deleverage the balance sheet while retaining a de- gree of flexibility to invest in relevant business development and small bolt- on acquisitions in order to reinforce the longer-term competitive advan- tage of the business. In total, we have a medium-term leverage target of 1.5-2.0x net debt/CORE EBITDA with flexibility up to 2.5x if needed after investment in growth. Our De- cember 31, 2023 net debt amounted to CHF 2,696.1 million, the lowest level since 2015, and representing a net debt to CORE EBITDA leverage ratio of 2.6x, well below the covenants ceil- ing 4.5x, in part thanks to the combi- nation with Autogrill. As at De- cember 31, 2023 we had CHF 715 million cash on the balance sheet and additional liquidity of CHF 1,923 mil- lion resulting from undrawn credit fa- cilities. Avolta has a history of addressing debt financing well ahead of maturity by aligning products and timing to the respective market environment to achieve the best possible financing. At present, while Avolta has access to a range of products and strives to bal- ance financing security, maturity pro- file and cost aspects and while cur- rent available liquidity of CHF 2,637.9 million, thereof CHF 715 million avail- able cash and cash equivalents, we are mindful of the 2.5 % coupon on our October 2024 EUR 800 million matu- rity. Ample liquidity. At an attractive weighted average rate of 3.8 %, our current debt profile con- Yves Gerster Chief Financial Officer Avolta delivered a solid 2023 profit performance. and our reinforced resilient and de- fensive credentials. With our global exposure, we are naturally well hedged with respect to FX fluctua- tions from an operational perspective, however it is important to consider translational effects from currency developments when comparing turn- over with previous years. I would like to thank our customers, shareholders, bondholders, banks, analysts, rating agencies, business partners and key advisors for their continued trust in Avolta and their on- going support to initiate and execute the right measures helping us to emerge stronger and be in the best position to take advantage of the op- portunities we see on our way ahead. Kind regards, Yves Gerster Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 152/336 sists of 81 % fixed rate debt and 19 % on floating rates. Our ratings in 2023 improved with upgrades by both S & P from B+ to BB Outlook Stable and Moody’s from B1 to Ba3 Credit Watch Outlook Positive. During 2023, we have continued the close relationship and ongoing inter- action with our shareholders, inves- tors, bondholders, equity and debt analysts as well as banks and rating agencies in more than 1,190 interac- tions, thereof 9 roadshows, 12 confer- ences, 564 meetings and 626 confer- ence calls and emails. Resilient growth. Our long-term strategy to revolution- ize the travel retail experience coupled with the combination with Autogrill has impacted the financial profile of Avolta. With 37 % of revenues gener- ated in Duty-Free, 31 % Duty-Paid and 32 % F&B in 2023, and a presence in 73 markets, across over 1,000 loca- tions and more than 5,100 outlets, we are significantly more resilient and defensive than ever before while our balance sheet has also been signifi- cantly reinforced. The combination with Autogrill and expansion into travel F&B has changed our P&L and cash flow. While Autogrill delivered similar net returns to the combined entity, we now have structurally higher gross profit margins and a lower concession fee (with longer contract durations) ratio. On the other hand, personnel and other expenses as well as CAPEX requirements will be higher due to the different profile of the F&B business. In October 2023, we have published proforma combined financial state- ments for 2019 and 2022 which allow comparison to our 2023 consolidated financial statements. The historical pro forma numbers are available on our webpage. Over the medium-term, we continue to foster a culture of operational im- provement to fuel profitability, accel- erate cash flow generation, and rein- vest in growth. Hereby, the finance teams will support our strive for supe- rior profitability driven by a logic of zero-based budgeting, focused on disproportionally allocating resources to activities that make the most im- pact, while leveraging technology to simplify work and operations. In addi- tion to the budgeting discipline, Avolta will systematically and actively manage its concession portfolio, with stronger focus on the evaluation of full profitability, cash flow contribution and returns. We have reinforced our ongoing ESG commitment by fully integrating the ESG strategies and sets of initiatives of the former entities into a new com- bined ESG Strategy House, which has resulted in greater transparency of our group wide ESG direction. In par- ticular, we have implemented the double materiality approach in our new Materiality Matrix, developed through a collaborative process with various stakeholder groups. We have also evolved our TCFD Report not only by considering the scope of the new joint entity, but also by providing three severity scenarios for our cli- mate-related risks and opportunities. Last but not least, and a topic close to my heart, we have finalized Avolta’s Community Engagement strategy creating the base for a joint and fo- cused implementation of initiatives in the communities where we operate. Diligent cost and cash flow manage- ment. For 2024, while macroeconomic and geopolitical developments remain uncertain, we look forward to the year with confidence, underpinned by re- cent demand momentum across the travel-related sectors, the positive outlook for global passenger trends The business combination has positively impacted the financial profile of Avolta. We are now more resilient than ever. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 153/336 and our reinforced resilient and de- fensive credentials. With our global exposure, we are naturally well hedged with respect to FX fluctua- tions from an operational perspective, however it is important to consider translational effects from currency developments when comparing turn- over with previous years. I would like to thank our customers, shareholders, bondholders, banks, analysts, rating agencies, business partners and key advisors for their continued trust in Avolta and their on- going support to initiate and execute the right measures helping us to emerge stronger and be in the best position to take advantage of the op- portunities we see on our way ahead. with the combination with Autogrill teams will support our strive for supe- the communities where we operate. Kind regards, defensive than ever before while our Avolta will systematically and actively For 2024, while macroeconomic and Yves Gerster sists of 81 % fixed rate debt and 19 % While Autogrill delivered similar net We have reinforced our ongoing ESG on floating rates. Our ratings in 2023 returns to the combined entity, we commitment by fully integrating the improved with upgrades by both S & P now have structurally higher gross ESG strategies and sets of initiatives from B+ to BB Outlook Stable and profit margins and a lower concession of the former entities into a new com- Moody’s from B1 to Ba3 Credit Watch fee (with longer contract durations) bined ESG Strategy House, which has Outlook Positive. ratio. On the other hand, personnel resulted in greater transparency of and other expenses as well as CAPEX our group wide ESG direction. In par- During 2023, we have continued the requirements will be higher due to the ticular, we have implemented the close relationship and ongoing inter- different profile of the F&B business. double materiality approach in our action with our shareholders, inves- In October 2023, we have published new Materiality Matrix, developed tors, bondholders, equity and debt proforma combined financial state- through a collaborative process with analysts as well as banks and rating ments for 2019 and 2022 which allow various stakeholder groups. We have agencies in more than 1,190 interac- comparison to our 2023 consolidated also evolved our TCFD Report not tions, thereof 9 roadshows, 12 confer- financial statements. The historical only by considering the scope of the ences, 564 meetings and 626 confer- pro forma numbers are available on new joint entity, but also by providing ence calls and emails. our webpage. three severity scenarios for our cli- mate-related risks and opportunities. Resilient growth. Over the medium-term, we continue Last but not least, and a topic close to to foster a culture of operational im- my heart, we have finalized Avolta’s provement to fuel profitability, accel- Community Engagement strategy Our long-term strategy to revolution- erate cash flow generation, and rein- creating the base for a joint and fo- ize the travel retail experience coupled vest in growth. Hereby, the finance cused implementation of initiatives in has impacted the financial profile of rior profitability driven by a logic of Avolta. With 37 % of revenues gener- zero-based budgeting, focused on ated in Duty-Free, 31 % Duty-Paid and disproportionally allocating resources 32 % F&B in 2023, and a presence in to activities that make the most im- 73 markets, across over 1,000 loca- pact, while leveraging technology to tions and more than 5,100 outlets, we simplify work and operations. In addi- ment. are significantly more resilient and tion to the budgeting discipline, Diligent cost and cash flow manage- balance sheet has also been signifi- manage its concession portfolio, with geopolitical developments remain cantly reinforced. stronger focus on the evaluation of uncertain, we look forward to the year full profitability, cash flow contribution with confidence, underpinned by re- The combination with Autogrill and returns. and expansion into travel F&B has changed our P&L and cash flow. cent demand momentum across the travel-related sectors, the positive outlook for global passenger trends The business combination has positively impacted the financial profile of Avolta. We are now more resilient than ever. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 154/336 CORE 2023 12,534.6 (4,477.0) 8,057.6 (3,178.7) (2,539.3) (1,417.7) 207.7 In % 100.0% (35.7% ) 64.3% (25.4% ) (20.3% ) (11.3% ) 1.7% CORE 2022 6,878.4 (2,684.6) 4,193.8 (2,029.9) (997.9) (620.7) 60.9 In % 100.0% (39.0% ) 61.0% (29.5% ) (14.5% ) (9.0% ) 0.9% IFRS 2023 12,789.5 (4,716.0) 8,073.5 (1,875.5) (2,539.3) (1,375.7) 191.9 IFRS 2022 6,878.4 (2,684.6) 4,193.8 (1,081.9) (997.9) (578.7) 61.8 1,129.6 9.0% 606.2 8.8% 2,474.9 1,597.1 Financial Statements 2023 Core and IFRS profit or loss In millions of CHF Turnover Cost of sales Gross profit Concession expenses (CORE) / Leases expenses (IFRS) Personnel expenses Other expenses (CORE) / (IFRS) Other income (CORE) / (IFRS) CORE EBITDA / Operating profit bef D&A Depreciation & impairment of PP&E Amortization & impairment of intangibles (CORE) / (IFRS) Depreciation & impairment right-of-use assets (IFRS) CORE EBIT / Operating profit (IFRS) Financial result (CORE) / (IFRS) CORE Profit before taxes / Profit before taxes (IFRS) Income tax (CORE) / (IFRS) CORE Net profit / Net profit (IFRS) Equity free cash flow In millions of CHF CORE EBITDA Other non-cash items and changes in lease obligation Changes in net working capital Capital expenditures Cash flow related to minorities 1 Dividends from associates Income taxes paid Cash flow before financing Interest, net Other financing items Equity free cash flow Acquisition & financing activities, net 2 Transaction costs Foreign exchange adjustments and other Decrease / (Increase) in financial net debt – at the beginning of the period – at the end of the period (277.5) (2.2% ) (34.5) (0.3% ) – 817.6 (201.3) 616.3 (159.5) 456.8 – 6.5% (1.6% ) 4.9% (25.9% ) 3.6% (113.9) (21.7) – 470.7 (175.6) 295.1 (105.5) 189.6 (1.7% ) (277.4) (113.9) (0.3% ) (242.8) (195.6) – (1,089.6) (785.2) 6.8% (2.6% ) 4.3% (35.8% ) 2.8% 865.1 (567.1) 298.0 (81.6) 216.4 2023 1,129.6 80.7 (44.0) (432.7) (102.6) 1.9 (129.2) 503.7 (160.3) (20.4) 323.0 (268.4) (34.5) 94.5 114.6 2,810.7 2,696.1 502.4 (305.6) 196.8 (76.2) 120.6 2022 606.2 79.6 (4.6) (110.1) (65.0) 2.7 (76.1) 432.7 (134.1) 6.6 305.2 (20.3) – (16.1) 268.8 3,079.5 2,810.7 Content Consolidated Financial Statements 156 – 255 156 Consolidated statement of profit or loss 157 Consolidated statement of other comprehensive income 158 Consolidated statement of financial position 159 – 160 Consolidated statement of changes in equity 161 – 162 Consolidated statement of cash flows 163 – 251 Notes to the consolidated financial statements 252 – 255 Report of the statutory auditor Financial Statements Avolta AG 256 – 270 256 Statement of profit or loss 257 Statement of financial position 258 – 268 Notes to the financial statements 269 – 270 Report of the statutory auditor 1 Includes CHF (133.9) million dividends paid to non-controlling interests and CHF 31.4 million contribution from non-controlling interests. 2 Acquisition & financing activities, net consist mainly of the acquisition of net debt from Autogrill, the cash portion of the MTO consideration and purchases of treasury shares. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 155/336 Financial Statements 2023 Content Consolidated Financial Statements 156 – 255 156 Consolidated statement of profit or loss 157 Consolidated statement of other comprehensive income 158 Consolidated statement of financial position 159 – 160 Consolidated statement of changes in equity 161 – 162 Consolidated statement of cash flows 163 – 251 Notes to the consolidated financial statements 252 – 255 Report of the statutory auditor Financial Statements Avolta AG 256 – 270 256 Statement of profit or loss 257 Statement of financial position 258 – 268 Notes to the financial statements 269 – 270 Report of the statutory auditor Core and IFRS profit or loss In millions of CHF Turnover Cost of sales Gross profit Concession expenses (CORE) / Leases expenses (IFRS) Personnel expenses Other expenses (CORE) / (IFRS) Other income (CORE) / (IFRS) CORE EBITDA / Operating profit bef D&A PP&E Depreciation & impairment of Amortization & impairment of intangibles (CORE) / (IFRS) Depreciation & impairment right-of-use assets (IFRS) CORE EBIT / Operating profit (IFRS) Financial result (CORE) / (IFRS) CORE Profit before taxes / Profit before taxes (IFRS) Income tax (CORE) / (IFRS) CORE Net profit / Net profit (IFRS) Equity free cash flow In millions of CHF CORE EBITDA Changes in net working capital Capital expenditures Cash flow related to minorities 1 Dividends from associates Income taxes paid Cash flow before financing Interest, net Other financing items Equity free cash flow Acquisition & financing activities, net 2 Transaction costs Foreign exchange adjustments and other Decrease / (Increase) in financial net debt – at the beginning of the period – at the end of the period Other non-cash items and changes in lease obligation IFRS 2023 12,789.5 (4,716.0) 8,073.5 (1,875.5) (2,539.3) (1,375.7) 191.9 IFRS 2022 6,878.4 (2,684.6) 4,193.8 (1,081.9) (997.9) (578.7) 61.8 CORE 2023 12,534.6 (4,477.0) 8,057.6 (3,178.7) (2,539.3) (1,417.7) 207.7 – 817.6 (201.3) 616.3 (159.5) 456.8 In % 100.0% (35.7% ) 64.3% (25.4% ) (20.3% ) (11.3% ) 1.7% – 6.5% (1.6% ) 4.9% (25.9% ) 3.6% CORE 2022 6,878.4 (2,684.6) 4,193.8 (2,029.9) (997.9) (620.7) 60.9 (113.9) (21.7) – 470.7 (175.6) 295.1 (105.5) 189.6 In % 100.0% (39.0% ) 61.0% (29.5% ) (14.5% ) (9.0% ) 0.9% 6.8% (2.6% ) 4.3% (35.8% ) 2.8% 1,129.6 9.0% 606.2 8.8% 2,474.9 1,597.1 (277.5) (2.2% ) (1.7% ) (277.4) (113.9) (34.5) (0.3% ) (0.3% ) (242.8) (195.6) – (1,089.6) (785.2) 865.1 (567.1) 298.0 (81.6) 216.4 2023 1,129.6 80.7 (44.0) (432.7) (102.6) 1.9 (129.2) 503.7 (160.3) (20.4) 323.0 (268.4) (34.5) 94.5 114.6 2,810.7 2,696.1 502.4 (305.6) 196.8 (76.2) 120.6 2022 606.2 79.6 (4.6) (110.1) (65.0) 2.7 (76.1) 432.7 (134.1) 6.6 305.2 (20.3) – (16.1) 268.8 3,079.5 2,810.7 1 Includes CHF (133.9) million dividends paid to non-controlling interests and CHF 31.4 million contribution from non-controlling interests. 2 Acquisition & financing activities, net consist mainly of the acquisition of net debt from Autogrill, the cash portion of the MTO consideration and purchases of treasury shares. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 156/336 Consolidated statement of profit or loss Consolidated statement of other comprehensive income for the year ended December 31, 2023 for the year ended December 31, 2023 In millions of CHF Net sales Advertising income Turnover Cost of sales Gross profit Lease expenses Personnel expenses Depreciation and amortization Impairment Reversal of impairment Other expenses Other income Operating profit Finance expenses Finance income Foreign exchange (loss) / gain Profit before tax Income tax expenses Net profit 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 Diluted earnings per share in CHF Note 7 8 9 10 10 10 11 12 13.1 13.2 14 26.2 26.2 2023 2022 In millions of CHF Net profit 12,583.7 205.8 12,789.5 (4,716.0) 8,073.5 (1,875.5) (2,539.3) (1,639.4) (21.7) 51.3 (1,375.7) 191.9 865.1 (626.5) 109.5 (50.1) 298.0 (81.6) 216.4 129.1 87.3 0.64 0.63 6,721.2 157.2 6,878.4 (2,684.6) 4,193.8 (1,081.9) (997.9) (1,111.5) (49.3) 66.2 (578.7) 61.7 502.4 (350.9) 68.5 (23.2) 196.8 (76.2) 120.6 62.4 58.2 0.63 0.62 Other comprehensive income Remeasurement of post-employment benefit plans Income tax Items not being reclassified to net income in subsequent periods, net of tax Exchange differences on translating foreign operations Net gain / (loss) on hedge of net investment in foreign operations Share of other comprehensive income of associates Income tax on above positions Items to be reclassified to net income in subsequent periods, net of tax Total other comprehensive income, net of tax Total comprehensive income, net of tax Attributable to Non-controlling interests Equity holders of the parent Note 15 14, 15 15 28.1 15, 20 14, 15 2023 216.4 11.2 (0.1) 11.1 (261.5) 14.3 – – (247.2) (236.1) (19.7) 109.4 (129.1) 2022 120.6 (37.6) 4.1 (33.5) (91.6) (3.6) 0.5 – (94.7) (128.2) (7.6) 60.4 (68.0) Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 157/336 Consolidated statement of profit or loss for the year ended December 31, 2023 Consolidated statement of other comprehensive income for the year ended December 31, 2023 2023 2022 In millions of CHF Net profit Other comprehensive income Remeasurement of post-employment benefit plans Income tax Items not being reclassified to net income in subsequent periods, net of tax Exchange differences on translating foreign operations Net gain / (loss) on hedge of net investment in foreign operations Share of other comprehensive income of associates Income tax on above positions Items to be reclassified to net income in subsequent periods, net of tax Total other comprehensive income, net of tax Total comprehensive income, net of tax Attributable to Non-controlling interests Equity holders of the parent Note 15 14, 15 15 28.1 15, 20 14, 15 2023 216.4 11.2 (0.1) 11.1 (261.5) 14.3 – – (247.2) (236.1) (19.7) 109.4 (129.1) 2022 120.6 (37.6) 4.1 (33.5) (91.6) (3.6) 0.5 – (94.7) (128.2) (7.6) 60.4 (68.0) In millions of CHF Net sales Advertising income Turnover Cost of sales Gross profit Lease expenses Personnel expenses Depreciation and amortization Impairment Reversal of impairment Other expenses Other income Operating profit Finance expenses Finance income Foreign exchange (loss) / gain Profit before tax Income tax expenses Net profit 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 Diluted earnings per share in CHF Note 7 8 9 10 10 10 11 12 13.1 13.2 14 26.2 26.2 12,583.7 205.8 12,789.5 (4,716.0) 8,073.5 (1,875.5) (2,539.3) (1,639.4) (21.7) 51.3 (1,375.7) 191.9 865.1 (626.5) 109.5 (50.1) 298.0 (81.6) 216.4 129.1 87.3 0.64 0.63 6,721.2 157.2 6,878.4 (2,684.6) 4,193.8 (1,081.9) (997.9) (1,111.5) (49.3) 66.2 (578.7) 61.7 502.4 (350.9) 68.5 (23.2) 196.8 (76.2) 120.6 62.4 58.2 0.63 0.62 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 158/336 Consolidated statement of financial position at December 31, 2023 In millions of CHF Assets Property, plant and equipment Right-of-use assets Intangible assets Goodwill Investments in associates Deferred tax assets Net defined benefit assets Other non-current assets Non-current assets Inventories Trade and credit card receivables Current investments Other accounts receivable Income tax receivables Cash and cash equivalents Current assets Total assets Liabilities and shareholders' equity Equity attributable to equity holders of the parent Non-controlling interests Total equity Borrowings Lease obligations Deferred tax liabilities Provisions Net defined benefit obligation Other non-current liabilities Non-current liabilities Trade payables Borrowings Lease obligations Income tax payables Provisions Other liabilities Current liabilities Total liabilities Total liabilities and shareholders' equity Note 31.12.2023 31.12.2022 Attributable to equity holders of the parent 16 17 18 18 31 33 21 22 23 24 29.1 28 29 31 32 33 30 28 29 32 30 1,131.4 7,237.0 2,144.3 2,978.6 33.7 164.7 36.0 312.1 14,037.8 1,062.0 41.3 54.9 576.2 28.1 714.6 2,477.1 16,514.9 2,360.8 134.5 2,495.3 2,520.6 6,750.8 410.4 74.1 43.5 80.4 9,879.8 873.7 819.4 1,102.6 45.3 105.7 1,193.1 4,139.8 14,019.6 16,514.9 314.3 2,567.8 1,477.8 2,272.2 24.4 145.4 17.0 155.8 6,974.7 928.4 62.3 – 467.6 21.9 854.7 2,334.9 9,309.6 893.0 73.1 966.1 3,452.3 2,010.2 221.4 44.0 12.3 29.3 5,769.5 486.4 122.7 992.4 42.1 89.3 841.1 2,574.0 8,343.5 9,309.6 Consolidated statement of changes in equity for the year ended December 31, 2023 In millions of CHF Note premium shares notes reserve reserve Total interest Total equity Share capital Share Treasury convertible benefit Translation Retained earnings Non-con- trolling Capital reserve for mandatory Employee Balance at January 1, 2023 454.0 4,542.2 (22.9) 60.3 1.7 (543.4) (3,598.9) 893.0 73.1 966.1 – – – 87.3 87.3 129.1 216.4 15 – 11.1 (227.5) – (216.4) (19.7) (236.1) – 11.1 (227.5) 87.3 (129.1) 109.4 (19.7) 25.2 26.1 10.5 49.8 (60.3) (33.4) Share capital increase 25.1 298.6 2,240.8 Dividends Share-based payments 26.1 – – – (33.4) – – – 2,539.4 – 2,539.4 (142.5) (142.5) – – – (33.4) – 35.4 35.4 – 35.4 309.1 2,290.6 (33.4) (60.3) – 35.4 2,541.4 (142.5) 2,398.9 Net earnings Other comprehensive income / (loss) Total comprehensive income / (loss) for the period Transactions with or distributions to shareholders Conversion of mandatory convertible notes to equity Purchase of treasury shares Total transactions with or distribution to owners Changes in ownership interests in subsidiaries Acquired non-controlling interests of Autogrill Changes in participation of non-controlling interests of Autogrill Put-option held by non- controlling interests 6 6 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – Other changes (mainly ownership interest changes) Changes in participation of non-controlling interests 27 (34.1) (34.1) Balance at December 31, 2023 763.1 6,832.8 (90.4) – 12.8 (770.9) (4,386.6) 2,360.8 134.5 2,495.3 – – 441.6 441.6 (920.5) (920.5) (384.1) (1,304.6) (15.1) (15.1) (5.3) (20.4) – 25.2 (8.9) 42.3 33.4 – (910.4) (944.5) 94.5 (850.0) Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 159/336 Consolidated statement of financial position Consolidated statement of changes in equity for the year ended December 31, 2023 Note 31.12.2023 31.12.2022 Attributable to equity holders of the parent In millions of CHF Note Share capital Share premium Treasury shares Capital reserve for mandatory convertible notes Employee benefit reserve Translation reserve Retained earnings Total Non-con- trolling interest Total equity Balance at January 1, 2023 454.0 4,542.2 (22.9) 60.3 1.7 (543.4) (3,598.9) 893.0 73.1 966.1 15 – – – – – – – – – – – – 87.3 87.3 129.1 216.4 – 11.1 (227.5) – (216.4) (19.7) (236.1) – 11.1 (227.5) 87.3 (129.1) 109.4 (19.7) Net earnings Other comprehensive income / (loss) Total comprehensive income / (loss) for the period Transactions with or distributions to shareholders Conversion of mandatory convertible notes to equity Purchase of treasury shares 25.2 26.1 10.5 49.8 – (60.3) – – (33.4) – – – – Share capital increase 25.1 298.6 2,240.8 Dividends Share-based payments 26.1 – – – – – – – Total transactions with or distribution to owners Changes in ownership interests in subsidiaries Acquired non-controlling interests of Autogrill Changes in participation of non-controlling interests of Autogrill Put-option held by non- controlling interests 6 6 Other changes (mainly ownership interest changes) Changes in participation of non-controlling interests 27 309.1 2,290.6 (33.4) (60.3) – – – – – – – – – – – – – (34.1) (34.1) – – – – – – – – – – – – – – – – – – – – – – – (33.4) – – – (33.4) – 2,539.4 – 2,539.4 – – (142.5) (142.5) – 35.4 35.4 – 35.4 – 35.4 2,541.4 (142.5) 2,398.9 – – – – – 441.6 441.6 (920.5) (920.5) (384.1) (1,304.6) (15.1) (15.1) (5.3) (20.4) – 25.2 (8.9) 42.3 33.4 – (910.4) (944.5) 94.5 (850.0) Balance at December 31, 2023 763.1 6,832.8 (90.4) – 12.8 (770.9) (4,386.6) 2,360.8 134.5 2,495.3 at December 31, 2023 In millions of CHF Assets Property, plant and equipment Right-of-use assets Intangible assets Goodwill Investments in associates Deferred tax assets Net defined benefit assets Other non-current assets Non-current assets Inventories Trade and credit card receivables Current investments Other accounts receivable Income tax receivables Cash and cash equivalents Current assets Total assets Non-controlling interests Total equity Borrowings Lease obligations Deferred tax liabilities Provisions Net defined benefit obligation Other non-current liabilities Non-current liabilities Trade payables Borrowings Lease obligations Income tax payables Provisions Other liabilities Current liabilities Total liabilities Total liabilities and shareholders' equity Liabilities and shareholders' equity Equity attributable to equity holders of the parent 16 17 18 18 31 33 21 22 23 24 29.1 28 29 31 32 33 30 28 29 32 30 1,131.4 7,237.0 2,144.3 2,978.6 33.7 164.7 36.0 312.1 14,037.8 1,062.0 41.3 54.9 576.2 28.1 714.6 2,477.1 16,514.9 2,360.8 134.5 2,495.3 2,520.6 6,750.8 410.4 74.1 43.5 80.4 9,879.8 873.7 819.4 1,102.6 45.3 105.7 1,193.1 4,139.8 14,019.6 16,514.9 314.3 2,567.8 1,477.8 2,272.2 24.4 145.4 17.0 155.8 6,974.7 928.4 62.3 – 467.6 21.9 854.7 2,334.9 9,309.6 893.0 73.1 966.1 3,452.3 2,010.2 221.4 44.0 12.3 29.3 5,769.5 486.4 122.7 992.4 42.1 89.3 841.1 2,574.0 8,343.5 9,309.6 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 160/336 Consolidated statement of changes in equity for the year ended December 31, 2022 Consolidated statement of cash flows for the year ended December 31, 2023 Attributable to equity holders of the parent In millions of CHF Note 2023 2022 In millions of CHF Note Share capital Share premium Treasury shares Capital reserve for mandatory convertible notes Employee benefit reserve Translation reserve Retained earnings Total Non-con- trolling interest Total equity Balance at January 1, 2022 454.0 4,542.2 (1.3) 60.3 35.4 (450.9) (3,683.1) 956.6 77.9 1,034.5 15 Net earnings Other comprehensive income / (loss) Total comprehensive income / (loss) for the period Transactions with or distributions to shareholders Dividends to non-controlling interests Purchase of treasury shares 26.1 Share-based payments 26 Total transactions with or distribution to owners Changes in ownership interests in subsidiaries Put-option held by non- controlling interests Other changes in participation of non-controlling interests Changes in participation of non-controlling interests 27 – – – – – – – – – – – – – – – – – – – – – – – – (21.6) – (21.6) – – – – – – – – – – – – – – 58.2 58.2 62.4 120.6 (33.7) (92.5) – (126.2) (2.0) (128.2) (33.7) (92.5) 58.2 (68.0) 60.4 (7.6) – – – – – – – – – – – – 16.4 (21.6) 16.4 – (74.6) (74.6) (21.6) – – 16.4 – 16.4 (5.2) (74.6) (79.8) – 13.4 13.4 5.1 18.5 – (3.8) (3.8) – 9.6 9.6 4.3 9.4 0.5 19.0 Balance at December 31, 2022 454.0 4,542.2 (22.9) 60.3 1.7 (543.4) (3,598.9) 893.0 73.1 966.1 Cash flows from operating activities Profit before tax Adjustments for: Depreciation and amortization Impairment Reversal of impairment Increase / (decrease) in allowances and provisions Other non-cash items Relief of lease obligations Loss / (gain) on sale of non-current assets Loss / (gain) on foreign exchange differences Finance expenses Finance income Cash flow before working capital changes Decrease / (increase) in trade and other accounts receivable Decrease / (increase) in inventories (Decrease) / increase in trade and other accounts payable Dividends received from associates Cash generated from operations Income tax paid Net cash flows from operating activities 1 Cash flow used in investing activities Purchase of property, plant and equipment Purchase of intangible assets Purchase of financial assets Proceeds from lease income Loans receivable (granted) / repaid Proceeds from sale of property, plant and equipment Proceeds from sale of financial assets Interest received 2 Business combination, cash acquired Contribution from sale of interest in subsidiaries, net of cash Net cash flows used in investing activities 1 Include variable lease payments of CHF 1,903.3 (2022: 1,109.5) million. 2 Interest received are disclosed in cash flow from investing activities (consistent to prior year). 298.0 196.8 10 10 10 8 13.1 13.2 20 16 18 6 1,639.4 21.7 (51.3) 23.8 33.1 – (1.1) 50.1 626.5 (109.5) 2,530.7 (49.1) (141.2) 146.3 1.9 2,488.6 (129.2) 2,359.4 (404.4) (36.6) (154.7) 22.5 (36.1) 8.3 79.5 61.9 459.7 (0.8) (0.7) 1,111.5 49.3 (66.2) 64.7 8.7 (80.2) (0.6) 23.2 350.9 (68.5) 1,589.6 (28.7) (288.2) 312.3 2.7 1,587.7 (76.1) 1,511.6 (97.4) (15.9) (0.1) 4.0 4.1 3.2 2.6 30.8 1.1 0.2 (67.4) Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 161/336 Consolidated statement of changes in equity Consolidated statement of cash flows for the year ended December 31, 2022 for the year ended December 31, 2023 Attributable to equity holders of the parent In millions of CHF Note 2023 2022 In millions of CHF Note premium shares notes reserve reserve Total interest Total equity Share capital Share Treasury convertible benefit Translation Retained earnings Non-con- trolling Capital reserve for mandatory Employee Balance at January 1, 2022 454.0 4,542.2 (1.3) 60.3 35.4 (450.9) (3,683.1) 956.6 77.9 1,034.5 15 (33.7) (92.5) – (126.2) (2.0) (128.2) (33.7) (92.5) 58.2 (68.0) 60.4 (7.6) 58.2 58.2 62.4 120.6 Net earnings Other comprehensive income / (loss) Total comprehensive income / (loss) for the period Transactions with or distributions to shareholders Dividends to non-controlling interests Purchase of treasury shares 26.1 Share-based payments 26 Total transactions with or distribution to owners Changes in ownership interests in subsidiaries Put-option held by non- controlling interests Other changes in participation of non-controlling interests Changes in participation of non-controlling interests 27 – – – – – – – – – – – – – – – – – – – – – – – – – – – – (21.6) (21.6) – – – – – – – – – – – – – – – – – – – – – – – 16.4 (21.6) 16.4 – (74.6) (74.6) (21.6) – – 16.4 – 16.4 (5.2) (74.6) (79.8) – 13.4 13.4 5.1 18.5 – (3.8) (3.8) – 9.6 9.6 4.3 9.4 0.5 19.0 Balance at December 31, 2022 454.0 4,542.2 (22.9) 60.3 1.7 (543.4) (3,598.9) 893.0 73.1 966.1 Cash flows from operating activities Profit before tax Adjustments for: Depreciation and amortization Impairment Reversal of impairment Increase / (decrease) in allowances and provisions Other non-cash items Relief of lease obligations Loss / (gain) on sale of non-current assets Loss / (gain) on foreign exchange differences Finance expenses Finance income Cash flow before working capital changes Decrease / (increase) in trade and other accounts receivable Decrease / (increase) in inventories (Decrease) / increase in trade and other accounts payable Dividends received from associates Cash generated from operations Income tax paid Net cash flows from operating activities 1 Cash flow used in investing activities Purchase of property, plant and equipment Purchase of intangible assets Purchase of financial assets Proceeds from lease income Loans receivable (granted) / repaid Proceeds from sale of property, plant and equipment Proceeds from sale of financial assets Interest received 2 Business combination, cash acquired Contribution from sale of interest in subsidiaries, net of cash Net cash flows used in investing activities 1 Include variable lease payments of CHF 1,903.3 (2022: 1,109.5) million. 2 Interest received are disclosed in cash flow from investing activities (consistent to prior year). 298.0 196.8 10 10 10 8 13.1 13.2 20 16 18 6 1,639.4 21.7 (51.3) 23.8 33.1 – (1.1) 50.1 626.5 (109.5) 2,530.7 (49.1) (141.2) 146.3 1.9 2,488.6 (129.2) 2,359.4 (404.4) (36.6) (154.7) 22.5 (36.1) 8.3 79.5 61.9 459.7 (0.8) (0.7) 1,111.5 49.3 (66.2) 64.7 8.7 (80.2) (0.6) 23.2 350.9 (68.5) 1,589.6 (28.7) (288.2) 312.3 2.7 1,587.7 (76.1) 1,511.6 (97.4) (15.9) (0.1) 4.0 4.1 3.2 2.6 30.8 1.1 0.2 (67.4) Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 162/336 Consolidated statement of cash flows (continued) Notes to the consolidated financial statements for the year ended December 31, 2023 for the year ended December 31, 2023 In millions of CHF Note 2023 2022 1. Corporate Information Cash flow from financing activities Transaction costs for financial instruments Proceeds from / (repayment of) 3 rd party loans Proceeds from borrowings Payment of derivatives interests Repayment of borrowings Purchase of non-controlling interests Autogrill Dividends paid to non-controlling interests Purchase of treasury shares Contribution from non-controlling interests Lease payments Interest paid 3 Net cash flow used in financing activities Currency translation on cash Increase / (Decrease) in cash and cash equivalents Cash and cash equivalents at the – beginning of the period – end of the period 3 Interest paid are disclosed in cash flow from financing activities (consistent to prior year). 29 29 29 29 29 6 26 29 29 29.1 29.1 (6.0) 1.6 231.2 – (864.5) (44.1) (133.9) (33.4) 31.4 (1,361.7) (222.4) (2,401.8) (97.0) (140.1) 854.7 714.6 (16.8) (1.8) – (14.2) (152.2) – (68.3) (21.6) 3.3 (907.8) (164.9) (1,344.3) (38.7) 61.2 793.5 854.7 Avolta AG (the “Company”) is a publicly listed company with headquarters in Basel, Swit- zerland. The Company is the world’s leading travel retail and food & beverage company. It operates in more than 5,100 outlets worldwide. The shares of the Company are listed on the SIX Swiss Exchange in Zürich. The consolidated financial statements of Avolta AG and its subsidiaries (Avolta or the “Group”) for the year ended December 31, 2023 and the respective comparative infor- mation were authorized for public disclosure in accordance with a resolution of the Board of Directors of the Company dated March 6, 2024, and are subject to the approval of the Annual General meeting to be held on May 15, 2024. Following the combination with Autogrill in February 2023, the company was renamed from Dufry AG to Avolta AG to unify the combined business representing the compa- ny’s broader scope and diversification. The shareholder resolved to change the com- pany name of Dufry AG to Avolta AG and to amend article 1 of the Articles of Incorpora- tion at the Extraordinary General Meeting of November 3, 2023. 2. Basis of Preparation The consolidated financial statements of Avolta AG and its subsidiaries have been pre- pared in accordance with International Financial Reporting Standards as issued by the IASB (”IFRS Accounting Standards”). 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 con- sideration 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 amor- tized cost, are adjusted to record changes in the fair values attributable to the risks that are being hedged. The consolidated financial statements are presented in millions of Swiss Francs (“CHF”). All values are rounded to the nearest one hundred thousand, except when indicated otherwise. The consolidated financial statements have been prepared on a going concern basis. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 163/336 Consolidated statement of cash flows (continued) Notes to the consolidated financial statements for the year ended December 31, 2023 for the year ended December 31, 2023 In millions of CHF Note 2023 2022 1. Corporate Information Cash flow from financing activities Transaction costs for financial instruments Proceeds from / (repayment of) 3 rd party loans Proceeds from borrowings Payment of derivatives interests Repayment of borrowings Purchase of non-controlling interests Autogrill Dividends paid to non-controlling interests Purchase of treasury shares Contribution from non-controlling interests Lease payments Interest paid 3 Net cash flow used in financing activities Currency translation on cash Increase / (Decrease) in cash and cash equivalents Cash and cash equivalents at the – beginning of the period – end of the period 3 Interest paid are disclosed in cash flow from financing activities (consistent to prior year). 29 29 29 29 29 6 26 29 29 29.1 29.1 (6.0) 1.6 231.2 – (864.5) (44.1) (133.9) (33.4) 31.4 (1,361.7) (222.4) (2,401.8) (97.0) (140.1) 854.7 714.6 (16.8) (1.8) (14.2) (152.2) – – (68.3) (21.6) 3.3 (907.8) (164.9) (1,344.3) (38.7) 61.2 793.5 854.7 Avolta AG (the “Company”) is a publicly listed company with headquarters in Basel, Swit- zerland. The Company is the world’s leading travel retail and food & beverage company. It operates in more than 5,100 outlets worldwide. The shares of the Company are listed on the SIX Swiss Exchange in Zürich. The consolidated financial statements of Avolta AG and its subsidiaries (Avolta or the “Group”) for the year ended December 31, 2023 and the respective comparative infor- mation were authorized for public disclosure in accordance with a resolution of the Board of Directors of the Company dated March 6, 2024, and are subject to the approval of the Annual General meeting to be held on May 15, 2024. Following the combination with Autogrill in February 2023, the company was renamed from Dufry AG to Avolta AG to unify the combined business representing the compa- ny’s broader scope and diversification. The shareholder resolved to change the com- pany name of Dufry AG to Avolta AG and to amend article 1 of the Articles of Incorpora- tion at the Extraordinary General Meeting of November 3, 2023. 2. Basis of Preparation The consolidated financial statements of Avolta AG and its subsidiaries have been pre- pared in accordance with International Financial Reporting Standards as issued by the IASB (”IFRS Accounting Standards”). 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 con- sideration 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 amor- tized cost, are adjusted to record changes in the fair values attributable to the risks that are being hedged. The consolidated financial statements are presented in millions of Swiss Francs (“CHF”). All values are rounded to the nearest one hundred thousand, except when indicated otherwise. The consolidated financial statements have been prepared on a going concern basis. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 164/336 2.1 Russia’s invasion of Ukraine 3.2 Changes in scope of consolidation On February 24, 2022, the Russian Federation initiated a military attack on Ukraine. In Ukraine, the Avolta Group only has operations at the Airport in Odessa, which are sus- pended due to the conflict since March 2022. The Russian travel market has a very low significance for Avolta Group, since Avolta‘s operations in Russia, operated through a local joint venture, only represents 0.8 % of the 2023 Group’s net sales (2022: 1.7 %). However, any further deterioration of the economic situation in Russia or escalation in the hostilities between Russia and Ukraine as well as any restrictions of Russian passen- gers to national or international travel may adversely affect Avolta’s business, including its operations in countries that have traditionally been popular with Russian tourists. The Group cannot predict the outcome of the conflict but is monitoring the situation very closely. 3. Accounting Policies 3.1 Basis of Consolidation The consolidated financial statements of Avolta comprise all entities directly or indi- rectly controlled by Avolta (its subsidiaries) as at December 31, 2023 and December 31, 2022 respectively for the comparative information. Subsidiaries are fully consolidated from the date of acquisition, being the date on which Avolta obtains control, and continue to be consolidated until the date when such con- trol is lost. The Group controls an entity when Avolta is exposed to, or has rights to, vari- able 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, unreal- ized 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 Avolta 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. On February 3, 2023, Avolta, global leader in travel retail, successfully closed the busi- ness combination with Autogrill S.p.A Group (Autogrill), a global leader in travel food & beverage. For further information refer to note 6. 3.3 Summary of significant accounting policies a) Business combinations and Goodwill Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, Avolta 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 Avolta 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. Avolta 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 impairment losses. For the purpose of impairment testing, goodwill acquired in a business combi- nation is, from the acquisition date, allocated to each of Avolta’s group of cash-gener- ating units that are expected to benefit from the combination. 2.1 Russia’s invasion of Ukraine 3.2 Changes in scope of consolidation Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 165/336 On February 24, 2022, the Russian Federation initiated a military attack on Ukraine. In Ukraine, the Avolta Group only has operations at the Airport in Odessa, which are sus- pended due to the conflict since March 2022. The Russian travel market has a very low significance for Avolta Group, since Avolta‘s operations in Russia, operated through a local joint venture, only represents 0.8 % of the 2023 Group’s net sales (2022: 1.7 %). However, any further deterioration of the economic situation in Russia or escalation in the hostilities between Russia and Ukraine as well as any restrictions of Russian passen- gers to national or international travel may adversely affect Avolta’s business, including its operations in countries that have traditionally been popular with Russian tourists. The Group cannot predict the outcome of the conflict but is monitoring the situation very closely. 3. Accounting Policies 3.1 Basis of Consolidation The consolidated financial statements of Avolta comprise all entities directly or indi- rectly controlled by Avolta (its subsidiaries) as at December 31, 2023 and December 31, 2022 respectively for the comparative information. Subsidiaries are fully consolidated from the date of acquisition, being the date on which Avolta obtains control, and continue to be consolidated until the date when such con- trol is lost. The Group controls an entity when Avolta is exposed to, or has rights to, vari- able 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, unreal- ized 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 Avolta 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. On February 3, 2023, Avolta, global leader in travel retail, successfully closed the busi- ness combination with Autogrill S.p.A Group (Autogrill), a global leader in travel food & beverage. For further information refer to note 6. 3.3 Summary of significant accounting policies a) Business combinations and Goodwill Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, Avolta 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 Avolta 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. Avolta 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 impairment losses. For the purpose of impairment testing, goodwill acquired in a business combi- nation is, from the acquisition date, allocated to each of Avolta’s group of cash-gener- ating units that are expected to benefit from the combination. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 166/336 Where goodwill forms part of a cash-generating unit and an operation within is dis- posed of, the goodwill associated with the operation disposed of is included in the car- rying 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 translation Each subsidiary in Avolta 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 transaction in the functional currency using the exchange rate of such date. Monetary assets and liabilities denominated in foreign currencies are remeasured using the functional currency exchange rate at the reporting date and the difference is recorded as unrealized foreign exchange gains / losses. Exchange differences arising on the settlement or on the translation of derivative financial instruments are recog- nized through the statement of profit or loss (within finance costs), 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 unrealized 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 cur- rency are translated into the presentation currency of Avolta (CHF), using the exchange rate at the reporting date. The statements of profit or loss of the subsidiaries are trans- lated using the average exchange rates of the respective month in which the transac- tions 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 com- bination (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: In CHF 1 USD 1 EUR 1 GBP Average rate Closing rate 2023 2022 31.12.2023 31.12.2022 0.8983 0.9715 1.1171 0.9546 1.0049 1.1793 0.8415 0.9288 1.0714 0.9244 0.9896 1.1186 c) Net sales Turnover is comprised of net sales and advertising income and is recognized from con- tracts 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. 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, deducting discounts and excluding sales taxes. When the Group is acting as an agent and not as a principal in a sales transaction, the revenue recognized is the net amount of the Group’s premium or commission. The Group acts as an agent within the fuel business. d) Advertising income The Group’s advertising income results from several distinctive marketing support activities, not affecting the retail price, performed by Avolta after having been devel- oped and coordinated together with its suppliers. The income is recognized in the period the advertising is performed. The compensation will be received on contractual terms. Usually, Avolta is not entitled to offset the income with trade payables related with the same supplier. An allowance on these advertising 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) Grants Grants, including non-monetary grants measured at fair value, are recognized if there is reasonable certainty that the Group will meet the conditions set out in contracts (in the case of private grants, e.g. awarded against services rendered) or government reg- ulations (in the case of public grants awarded in the different countries where the Group operates) and that the grants will be received. Capital grants are recorded in the statement of financial position as deferred revenue, which is recognized as income on a systematic, rational basis over the useful life of the tangible or intangible asset. Operating grants are recognized on a systematic basis in the income statement in the years in which the Group recognizes as costs the expenses that the grants are intended Such operating grants are recognized in the income statement under “Other operating income” or, alternatively, deducted from the related cost, if directly attributable. to offset. f) Cost of sales Cost of sales are recognized when the Company sells the products and comprises 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. g) Lease expenses On May 28, 2020 the IASB issued an amendment to IFRS 16 providing lessees with an exemption from assessing whether a COVID-19 related relief of lease obligations is a lease modification, requiring lessees that apply the exemption to account for COVID-19 related rent concessions as if they were not lease modifications. Avolta adopted this amendment applying it for the full year 2020. The practical expedient applies only to rent concessions occurring as a direct consequence of the COVID-19 pandemic and only if all of the following conditions are met: Where goodwill forms part of a cash-generating unit and an operation within is dis- posed of, the goodwill associated with the operation disposed of is included in the car- rying 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 translation Each subsidiary in Avolta 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 transaction in the functional currency using the exchange rate of such date. Monetary assets and liabilities denominated in foreign currencies are remeasured using the functional currency exchange rate at the reporting date and the difference is recorded as unrealized foreign exchange gains / losses. Exchange differences arising on the settlement or on the translation of derivative financial instruments are recog- nized through the statement of profit or loss (within finance costs), 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 unrealized 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 cur- rency are translated into the presentation currency of Avolta (CHF), using the exchange rate at the reporting date. The statements of profit or loss of the subsidiaries are trans- lated using the average exchange rates of the respective month in which the transac- tions 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 com- bination (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: In CHF 1 USD 1 EUR 1 GBP Average rate Closing rate 2023 2022 31.12.2023 31.12.2022 0.8983 0.9715 1.1171 0.9546 1.0049 1.1793 0.8415 0.9288 1.0714 0.9244 0.9896 1.1186 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 167/336 c) Net sales Turnover is comprised of net sales and advertising income and is recognized from con- tracts 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. 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, deducting discounts and excluding sales taxes. When the Group is acting as an agent and not as a principal in a sales transaction, the revenue recognized is the net amount of the Group’s premium or commission. The Group acts as an agent within the fuel business. d) Advertising income The Group’s advertising income results from several distinctive marketing support activities, not affecting the retail price, performed by Avolta after having been devel- oped and coordinated together with its suppliers. The income is recognized in the period the advertising is performed. The compensation will be received on contractual terms. Usually, Avolta is not entitled to offset the income with trade payables related with the same supplier. An allowance on these advertising 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) Grants Grants, including non-monetary grants measured at fair value, are recognized if there is reasonable certainty that the Group will meet the conditions set out in contracts (in the case of private grants, e.g. awarded against services rendered) or government reg- ulations (in the case of public grants awarded in the different countries where the Group operates) and that the grants will be received. Capital grants are recorded in the statement of financial position as deferred revenue, which is recognized as income on a systematic, rational basis over the useful life of the tangible or intangible asset. Operating grants are recognized on a systematic basis in the income statement in the years in which the Group recognizes as costs the expenses that the grants are intended to offset. Such operating grants are recognized in the income statement under “Other operating income” or, alternatively, deducted from the related cost, if directly attributable. f) Cost of sales Cost of sales are recognized when the Company sells the products and comprises 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. g) Lease expenses On May 28, 2020 the IASB issued an amendment to IFRS 16 providing lessees with an exemption from assessing whether a COVID-19 related relief of lease obligations is a lease modification, requiring lessees that apply the exemption to account for COVID-19 related rent concessions as if they were not lease modifications. Avolta adopted this amendment applying it for the full year 2020. The practical expedient applies only to rent concessions occurring as a direct consequence of the COVID-19 pandemic and only if all of the following conditions are met: Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 168/336 – the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change; – any reduction in lease payments affects only payments originally due on or before June 30, 2021 (for example, a rent concession would meet this condition if it results in reduced lease payments on or before June 30, 2021 and increased lease pay- ments that extend beyond June 30, 2021); and – there is no substantive change to other terms and conditions of the lease. On March 31, 2021, the IASB published a further amendment to extend the date of the practical expedient from June 30, 2021 to June 30, 2022. Avolta adopted the temporary amendment to IFRS 16 for the first half-year 2022. Under defined circumstances, the amendment allows to consider that renegotiations related to COVID-19 are not modifications, and can be recognized directly as a reduction of lease expense. The exemption applies only to rent concessions occurring as a direct consequence of the COVID-19 pandemic and subject to the above conditions and was applied in all pos- sible cases. Avolta did not recognize in 2023 any net relief of lease obligations (2022: 80.2 million) presented as lease (expense) / income (see note 8). h) Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by Avolta are rec- ognized at the proceeds received, net of direct issue costs. Repurchase of Avolta’s own equity instruments is recognized and deducted directly in equity. No gain or loss is rec- ognized in the statement of profit or loss on the purchase, sale, issue or cancellation of Avolta’s own equity instruments. i) Share capital Ordinary 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 Avolta shares purchased by Avolta AG or any subsidiary, the consideration paid, including any directly attributable expenses, net of taxes, is deducted from equity until the shares are cancelled, assigned or sold. Where such ordinary shares are subse- quently sold, any consideration received, net of any direct transaction expenses and income tax, is included in equity. j) Pension and other post-employment benefit obligation The employees of the subsidiaries are eligible for retirement, invalidity and death ben- efits under local social security schemes prevailing in the countries concerned and defined benefit or defined contribution plans provided through separate funds, insur- ance 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. Remeasurements, 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 posi- tion with a corresponding debit or credit to other comprehensive income in the period in which they occur. Remeasurements 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 Avolta recognizes restructuring related costs. Net interest is calculated by applying the discount rate to the net defined benefit obli- gation (asset). Avolta recognizes the following changes in the net defined benefit obli- gation 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 set- tlements are shown under “other expenses” – Net interest expense or income under “finance expenses” or “finance income”. k) Share-based payments Equity settled share-based payments to employees and other third parties providing 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, Avolta 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 recog- nized is the expense as if the terms had not been modified. An additional expense is rec- ognized 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 mea- sured at the date of modification. l) Taxation Income 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 comprehen- Income tax receivables or payables are measured at the amount expected to be recov- ered 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 Avolta operates and generates taxable income. Income tax relating to items recognized in other comprehensive income is recognized sive income or equity. Current income tax in the same statement. Deferred tax Deferred tax is provided using the liability method on temporary differences between the tax basis of assets or liabilities and their carrying amounts for financial reporting purposes at the reporting date.  – the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change; – any reduction in lease payments affects only payments originally due on or before June 30, 2021 (for example, a rent concession would meet this condition if it results in reduced lease payments on or before June 30, 2021 and increased lease pay- ments that extend beyond June 30, 2021); and – there is no substantive change to other terms and conditions of the lease. On March 31, 2021, the IASB published a further amendment to extend the date of the practical expedient from June 30, 2021 to June 30, 2022. Avolta adopted the temporary amendment to IFRS 16 for the first half-year 2022. Under defined circumstances, the amendment allows to consider that renegotiations related to COVID-19 are not modifications, and can be recognized directly as a reduction of lease expense. The exemption applies only to rent concessions occurring as a direct consequence of the COVID-19 pandemic and subject to the above conditions and was applied in all pos- sible cases. Avolta did not recognize in 2023 any net relief of lease obligations (2022: 80.2 million) presented as lease (expense) / income (see note 8). h) Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by Avolta are rec- ognized at the proceeds received, net of direct issue costs. Repurchase of Avolta’s own equity instruments is recognized and deducted directly in equity. No gain or loss is rec- ognized in the statement of profit or loss on the purchase, sale, issue or cancellation of Avolta’s own equity instruments. i) Share capital Ordinary 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 Avolta shares purchased by Avolta AG or any subsidiary, the consideration paid, including any directly attributable expenses, net of taxes, is deducted from equity until the shares are cancelled, assigned or sold. Where such ordinary shares are subse- quently sold, any consideration received, net of any direct transaction expenses and income tax, is included in equity. j) Pension and other post-employment benefit obligation The employees of the subsidiaries are eligible for retirement, invalidity and death ben- efits under local social security schemes prevailing in the countries concerned and defined benefit or defined contribution plans provided through separate funds, insur- ance 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. Remeasurements, 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 posi- tion with a corresponding debit or credit to other comprehensive income in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 169/336 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 Avolta recognizes restructuring related costs. Net interest is calculated by applying the discount rate to the net defined benefit obli- gation (asset). Avolta recognizes the following changes in the net defined benefit obli- gation 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 set- tlements are shown under “other expenses” – Net interest expense or income under “finance expenses” or “finance income”. k) Share-based payments Equity settled share-based payments to employees and other third parties providing 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, Avolta 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 recog- nized is the expense as if the terms had not been modified. An additional expense is rec- ognized 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 mea- sured at the date of modification. l) Taxation Income 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 comprehen- sive income or equity. Current income tax Income tax receivables or payables are measured at the amount expected to be recov- ered 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 Avolta operates and generates taxable income. Income tax relating to items recognized in other comprehensive income is recognized in the same statement. Deferred tax Deferred tax is provided using the liability method on temporary differences between the tax basis of assets or liabilities and their carrying amounts for financial reporting purposes at the reporting date. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 170/336 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 subsid- iaries, 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 and the carry forward of unused tax credits or tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available, against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized, except: – When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a busi- ness 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 sub- sidiaries, 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 in the foreseeable future, taking into account the remaining duration of the underlying concession agreements. 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. m) Property, plant and equipment These are stated at cost less accumulated depreciation and any impairment in fair value. Depreciation is computed on a straight-line basis over the shorter of the esti- mated 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 years n) Right-of-use assets The 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 remeasurement 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 ownership 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 the Group’s assets is up to 40 years. To contain a lease, an agreement has to convey the right to control the use of an iden- tified 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 certain of exercising renewal options contractually foreseen. Right-of-use assets are capitalized 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. Types of right-of-use assets: (i) Shops Avolta enters into lease agreements with operators of airports, seaports, railway sta- tions 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 vari- able 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 cur- rent parts of the lease obligations are secured with bank guarantees in case the Group would not fulfill its contractual commitments. Avolta has capitalized all elements of the lease contracts in accordance with IFRS 16 when at the commencement of the agree- ment 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. Avolta has identified a number of agreements in its portfolio which are not ful- filling 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. Lease agreements for offices or warehouse buildings usually qualify for capitalization (ii) Other buildings under IFRS 16. 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 subsid- iaries, 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 and the carry forward of unused tax credits or tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available, against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized, except: – When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a busi- ness 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 sub- sidiaries, 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 in the foreseeable future, taking into account the remaining duration of the underlying concession agreements. 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. m) Property, plant and equipment These are stated at cost less accumulated depreciation and any impairment in fair value. Depreciation is computed on a straight-line basis over the shorter of the esti- mated 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 years n) Right-of-use assets The 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 remeasurement of lease obligations. The cost of right-of-use assets includes the amount of lease obligations recognized, initial direct costs incurred, and lease payments Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 171/336 made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership 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 the Group’s assets is up to 40 years. To contain a lease, an agreement has to convey the right to control the use of an iden- tified 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 certain of exercising renewal options contractually foreseen. Right-of-use assets are capitalized 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. Types of right-of-use assets: (i) Shops Avolta enters into lease agreements with operators of airports, seaports, railway sta- tions 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 vari- able 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 cur- rent parts of the lease obligations are secured with bank guarantees in case the Group would not fulfill its contractual commitments. Avolta has capitalized all elements of the lease contracts in accordance with IFRS 16 when at the commencement of the agree- ment 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. Avolta has identified a number of agreements in its portfolio which are not ful- filling 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. (ii) Other buildings Lease agreements for offices or warehouse buildings usually qualify for capitalization under IFRS 16. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 172/336 (iii) Vehicles and other Avolta has also entered into many other lease agreements, for example vehicles, hard or software, and other assets, which in accordance with IFRS 16, qualify for capitaliza- tion of leases. o) Short-term leases and leases of low-value assets The 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 commencement 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 10.000, 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. p) Intangible assets These assets mainly comprise of concession rights and brands. Usually, these assets are capitalized at cost, but when identified as part of a business combination, they 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. Intangible assets with finite lives are amortized over the useful eco- nomic life. Intangible assets with an indefinite useful life are reviewed annually to deter- mine whether the indefinite life assessment continues to be supportable. If not, any changes are made on a prospective basis. The brand assets are not amortized, have indefinite useful life, as they can be renewed without significant costs, are supported by ongoing marketing and selling activities and there is no foreseeable limit to the cash- flows they generate. Concession rights have a useful life based on the lease term, which can be up to 40 years. q) Software Software is valued at amortized historical cost, or in case of internal developments by the sum of costs incurred less amortization. r) Impairment of non-financial assets Goodwill 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 dis- posal 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-gen- erating units). s) Associates Associates are all entities over which Avolta 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. Avolta’s investments in associates may include goodwill identified on acquisition. Avolta’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 corresponding adjustment to the carrying amount of the investment. When Avolta’s share of losses in an associate equals or exceeds its interest in the associate, Avolta 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 associate is reduced but sig- nificant influence is retained, only a proportionate share of the amounts previously rec- ognized in other comprehensive income is reclassified to net profit / (loss) where appro- priate. Avolta determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, Avolta calculates the amount of impairment as the difference between the recoverable amount of the asso- ciate and its carrying value, and recognizes the amount within the finance expenses in the statement of profit or loss. Profits and losses resulting from upstream and downstream transactions between Avolta and its associates are recognized in the Group’s financial statements only to the extent of unrelated investor’s interests in the associates. Unrealized losses are elimi- nated unless the transaction provides evidence of an impairment of the asset trans- ferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by Avolta. Dilution gains and losses arising in investments in associates are recognized in the state- ment of profit or loss. t) Inventories Inventories are valued at the lower of historical cost or net realizable value. The historical costs are determined according to the weighted average cost method, except the Food & Beverage inventories which are calculated using the FIFO method or with criteria that approximate FIFO. 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. Avolta 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 business 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. u) Trade and credit card receivables These accounts include receivables related to the sale of merchandise. Trade receiv- ables that do not have a significant financing component are initially measured at trans- action price and subsequently at amortized cost. v) Cash and cash equivalents Cash 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. w) Lease obligations At the commencement date of the lease, the Group recognizes lease obligations mea- sured 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 (iii) Vehicles and other tion of leases. Avolta has also entered into many other lease agreements, for example vehicles, hard or software, and other assets, which in accordance with IFRS 16, qualify for capitaliza- o) Short-term leases and leases of low-value assets The 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 commencement 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 10.000, 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. p) Intangible assets These assets mainly comprise of concession rights and brands. Usually, these assets are capitalized at cost, but when identified as part of a business combination, they 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. Intangible assets with finite lives are amortized over the useful eco- nomic life. Intangible assets with an indefinite useful life are reviewed annually to deter- mine whether the indefinite life assessment continues to be supportable. If not, any changes are made on a prospective basis. The brand assets are not amortized, have indefinite useful life, as they can be renewed without significant costs, are supported by ongoing marketing and selling activities and there is no foreseeable limit to the cash- flows they generate. Concession rights have a useful life based on the lease term, which can be up to 40 years. q) Software Software is valued at amortized historical cost, or in case of internal developments by the sum of costs incurred less amortization. r) Impairment of non-financial assets Goodwill 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 dis- posal 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-gen- erating units). s) Associates Associates are all entities over which Avolta 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. Avolta’s investments in associates may include goodwill identified on acquisition. Avolta’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 corresponding Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 173/336 adjustment to the carrying amount of the investment. When Avolta’s share of losses in an associate equals or exceeds its interest in the associate, Avolta 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 associate is reduced but sig- nificant influence is retained, only a proportionate share of the amounts previously rec- ognized in other comprehensive income is reclassified to net profit / (loss) where appro- priate. Avolta determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, Avolta calculates the amount of impairment as the difference between the recoverable amount of the asso- ciate and its carrying value, and recognizes the amount within the finance expenses in the statement of profit or loss. Profits and losses resulting from upstream and downstream transactions between Avolta and its associates are recognized in the Group’s financial statements only to the extent of unrelated investor’s interests in the associates. Unrealized losses are elimi- nated unless the transaction provides evidence of an impairment of the asset trans- ferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by Avolta. Dilution gains and losses arising in investments in associates are recognized in the state- ment of profit or loss. t) Inventories Inventories are valued at the lower of historical cost or net realizable value. The historical costs are determined according to the weighted average cost method, except the Food & Beverage inventories which are calculated using the FIFO method or with criteria that approximate FIFO. 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. Avolta 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 business 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. u) Trade and credit card receivables These accounts include receivables related to the sale of merchandise. Trade receiv- ables that do not have a significant financing component are initially measured at trans- action price and subsequently at amortized cost. v) Cash and cash equivalents Cash 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. w) Lease obligations At the commencement date of the lease, the Group recognizes lease obligations mea- sured 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 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 174/336 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 remea- surement of the lease obligation due to an index or a rate are recognized against right- of-use assets. In calculating the present value of lease payments, the Group uses the incremental bor- rowing 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 obliga- tions is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease obligations is remeasured if there is a modification, a change in the lease term, a change in the in substance fixed lease pay- ments or a change in the assessment to purchase the underlying asset. Avolta uses a discount rate which is the aggregation of the risk free rate for the respec- tive 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, Avolta 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, the Group’s 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 operations. x) Lease receivable In its role as sub-lessor, the Group recognizes lease receivables as of the commence- ment date of the lease. The sub-leases are determined with reference to the right-of-use asset deriving from the principal lease contract, rather than the underlying asset. For this reason, consid- ering the recognition of a right-of-use asset under IFRS 16 and the fact that the sub- leases typically have a duration equal to the principal lease, the Group reduces its right- of-use assets and recognizes a lease receivable as a counter-entry, split between current and non-current assets. The lease receivable corresponds to the present value of the minimum lease payments to be received as of the commencement date, including those determined on the basis of an index or rate (initially valued using the index or rate at the commencement date of the contract), as well as any penalties in the event that the lease term provides for the option for the early termination of the lease contract and the exercise of that option is estimated to be reasonably certain. The present value is determined using the implicit interest rate of the lease contract. If it is not possible to determine this rate easily, the Group uses the incremental borrowing rate as discount rate. The lease receivable is subsequently increased by the interest accrued and decreased by the receipts received for the lease. Lease receivables are remeasured in the event of changes in the future minimum receipts expected for the lease, as result of: – changes in the index or rate used to determine the lease receipts: in such cases the lease receivables are remeasured by discounting the new minimum lease receipts at the initial discount rate; – change in the lease term or in the likelihood of exercise of the purchase, extension, or early termination option: in such cases the lease receivable is remeasured by dis- counting the new minimum lease receipts at the discount rate in place at the date of – contractual changes that do not fall under any of the reasons for the separate rec- ognition of a new lease: in these cases as well, the lease receivable is remeasured by discounting the new minimum lease payments at the discount rate in place at the the change; date of the change. The use of estimates in relation to the measurement of lease receivables is mentioned in the previous section on Right-of-use assets. y) Provisions Provisions are recognized when Avolta has a present obligation (legal or constructive) as a result of a past event, it is probable that Avolta will be required to settle the obliga- tion 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 reporting 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 that represent a present obli- gation and its fair value can be measured reliably are initially measured at fair value at the acquisition date. At the end of subsequent reporting periods, such contingent lia- bilities are measured at the higher of the amount that would be recognized in accor- dance with IAS 37 Provisions, contingent liabilities and contingent assets and the amount initially recognized less cumulative income recognized in accordance with IFRS 15 Revenue from contracts with customers. Onerous contracts Present obligations arising under onerous contracts are measured and recognized as provisions. An onerous contract is considered to exist if Avolta 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. Restructurings A restructuring provision is recognized when Avolta has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes 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 remea- surement of the lease obligation due to an index or a rate are recognized against right- of-use assets. In calculating the present value of lease payments, the Group uses the incremental bor- rowing 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 obliga- tions is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease obligations is remeasured if there is a modification, a change in the lease term, a change in the in substance fixed lease pay- ments or a change in the assessment to purchase the underlying asset. Avolta uses a discount rate which is the aggregation of the risk free rate for the respec- tive 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, Avolta 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, the Group’s 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 operations. In its role as sub-lessor, the Group recognizes lease receivables as of the commence- x) Lease receivable ment date of the lease. The sub-leases are determined with reference to the right-of-use asset deriving from the principal lease contract, rather than the underlying asset. For this reason, consid- ering the recognition of a right-of-use asset under IFRS 16 and the fact that the sub- leases typically have a duration equal to the principal lease, the Group reduces its right- of-use assets and recognizes a lease receivable as a counter-entry, split between current and non-current assets. The lease receivable corresponds to the present value of the minimum lease payments to be received as of the commencement date, including those determined on the basis of an index or rate (initially valued using the index or rate at the commencement date of the contract), as well as any penalties in the event that the lease term provides for the option for the early termination of the lease contract and the exercise of that option is estimated to be reasonably certain. The present value is determined using the implicit interest rate of the lease contract. If it is not possible to determine this rate easily, the Group uses the incremental borrowing rate as discount rate. The lease receivable is subsequently increased by the interest accrued and decreased by the receipts received for the lease. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 175/336 Lease receivables are remeasured in the event of changes in the future minimum receipts expected for the lease, as result of: – changes in the index or rate used to determine the lease receipts: in such cases the lease receivables are remeasured by discounting the new minimum lease receipts at the initial discount rate; – change in the lease term or in the likelihood of exercise of the purchase, extension, or early termination option: in such cases the lease receivable is remeasured by dis- counting the new minimum lease receipts at the discount rate in place at the date of the change; – contractual changes that do not fall under any of the reasons for the separate rec- ognition of a new lease: in these cases as well, the lease receivable is remeasured by discounting the new minimum lease payments at the discount rate in place at the date of the change. The use of estimates in relation to the measurement of lease receivables is mentioned in the previous section on Right-of-use assets. y) Provisions Provisions are recognized when Avolta has a present obligation (legal or constructive) as a result of a past event, it is probable that Avolta will be required to settle the obliga- tion 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 reporting 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 that represent a present obli- gation and its fair value can be measured reliably are initially measured at fair value at the acquisition date. At the end of subsequent reporting periods, such contingent lia- bilities are measured at the higher of the amount that would be recognized in accor- dance with IAS 37 Provisions, contingent liabilities and contingent assets and the amount initially recognized less cumulative income recognized in accordance with IFRS 15 Revenue from contracts with customers. Onerous contracts Present obligations arising under onerous contracts are measured and recognized as provisions. An onerous contract is considered to exist if Avolta 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. Restructurings A restructuring provision is recognized when Avolta has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 176/336 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 duties A lawsuits and duties provision is recognized to cover uncertainties dependent on the outcome of ongoing lawsuits in relation with taxes or contractual commitments, other than income taxes and duties. z) Investments and other financial assets (i) Classification The 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 respective criteria refer to sec- tion (iii) Measurement. 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 derecognition Regular 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 derecog- nized 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) Measurement At 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), transaction 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. Debt instruments Subsequent 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 derecogni- tion is recognized directly in profit or loss. Impairment losses are presented as part of the financial result. FVOCI: Debt instruments 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 recog- nized 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 rec- ognized in profit or loss and presented as net in the period in which it arises. Equity instruments The 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 assets The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortized cost and FVOCI. For trade receivables, receivables for refund from suppliers and related services the Group applies the simpli- fied approach which requires expected lifetime losses to be recognized from initial rec- ognition of the receivables. aa) Trade and other account receivables Trade and other account receivables (including credit cards receivables and other account receivables), that do not have a significant financing component are initially measured at transaction price and subsequently at amortized cost using the effective interest rate. ab) Financial liabilities (i) Financial liabilities at FVPL These are stated at fair value, with any gains or losses arising on remeasurement rec- ognized in the statement of profit or loss. The net gain or loss recognized in the consol- idated 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 34. (ii) Other financial liabilities Other financial liabilities (including borrowings) are subsequently measured at amor- tized cost using the effective interest method. (iii) Derecognition of financial liabilities Avolta derecognizes financial liabilities only when the obligations are discharged, can- celled 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 instruments Financial 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). 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 duties A lawsuits and duties provision is recognized to cover uncertainties dependent on the outcome of ongoing lawsuits in relation with taxes or contractual commitments, other than income taxes and duties. z) Investments and other financial assets (i) Classification The 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 respective criteria refer to sec- tion (iii) Measurement. 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 derecognition Regular 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 derecog- nized 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) Measurement At 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), transaction 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. Debt instruments Subsequent 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 derecogni- tion is recognized directly in profit or loss. Impairment losses are presented as part of the financial result. FVOCI: Debt instruments 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. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 177/336 When the financial asset is derecognized, the cumulative gain or loss previously recog- nized 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 rec- ognized in profit or loss and presented as net in the period in which it arises. Equity instruments The 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 assets The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortized cost and FVOCI. For trade receivables, receivables for refund from suppliers and related services the Group applies the simpli- fied approach which requires expected lifetime losses to be recognized from initial rec- ognition of the receivables. aa) Trade and other account receivables Trade and other account receivables (including credit cards receivables and other account receivables), that do not have a significant financing component are initially measured at transaction price and subsequently at amortized cost using the effective interest rate. ab) Financial liabilities (i) Financial liabilities at FVPL These are stated at fair value, with any gains or losses arising on remeasurement rec- ognized in the statement of profit or loss. The net gain or loss recognized in the consol- idated 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 34. (ii) Other financial liabilities Other financial liabilities (including borrowings) are subsequently measured at amor- tized cost using the effective interest method. (iii) Derecognition of financial liabilities Avolta derecognizes financial liabilities only when the obligations are discharged, can- celled 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 instruments Financial 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). Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 178/336 ac) Compound financial instruments The component parts of convertible loan notes issued by the Group are classified sep- arately as financial liabilities and equity in accordance with the substance of the con- tractual arrangements and the definitions of a financial liability and an equity instru- ment. A conversion option that will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company’s own equity instruments is an equity instrument. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instru- ment. This amount is recorded as a liability on an amortized cost basis using the effec- tive interest method until extinguished upon conversion or at the instrument’s maturity date. The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subse- quently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised, in which case, the balance recognized in equity will be transferred to share capital and share premium. Where the conversion option remains unexercised at the maturity date of the convertible loan note, the bal- ance recognized in equity will be transferred to retained earnings. No gain or loss is rec- ognized in profit or loss upon conversion or expiration of the conversion option. Trans- action costs that relate to the issue of the convertible loan notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognized directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component and are amortized over the lives of the convertible loan notes using the effective interest method. ad) Derivatives and hedging activities Derivatives 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 management objective and strategy for undertaking its hedge transactions. The fair values of derivative financial instruments designated in hedge relationships are disclosed in note 34. 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 accounting The 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 designates only the intrinsic value of the options as the hedging instrument. Gains 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 recog- nized 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 effec- tive portion of the change in the spot component of the forward contracts are recog- nized 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 other comprehensive income (OCI) 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 rec- ognized 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 recognized 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 inven- tory. 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 hedges Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is recognized immediately in the statement of profit or loss within other finance income or finance expenses. Gains and losses accumulated in equity are reclassified to profit or loss when the foreign oper- ation is partially disposed of or sold. See notes 28.1 and 28.2 for further details. ac) Compound financial instruments The component parts of convertible loan notes issued by the Group are classified sep- arately as financial liabilities and equity in accordance with the substance of the con- tractual arrangements and the definitions of a financial liability and an equity instru- ment. A conversion option that will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company’s own equity instruments is an equity instrument. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instru- ment. This amount is recorded as a liability on an amortized cost basis using the effec- tive interest method until extinguished upon conversion or at the instrument’s maturity date. The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subse- quently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised, in which case, the balance recognized in equity will be transferred to share capital and share premium. Where the conversion option remains unexercised at the maturity date of the convertible loan note, the bal- ance recognized in equity will be transferred to retained earnings. No gain or loss is rec- ognized in profit or loss upon conversion or expiration of the conversion option. Trans- action costs that relate to the issue of the convertible loan notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognized directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component and are amortized over the lives of the convertible loan notes using the effective interest method. ad) Derivatives and hedging activities Derivatives 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 management objective and strategy for undertaking its hedge transactions. The fair values of derivative financial instruments designated in hedge relationships are disclosed in note 34. 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. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 179/336 Cash flow hedges that qualify for hedge accounting The 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 designates only the intrinsic value of the options as the hedging instrument. Gains 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 recog- nized 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 effec- tive portion of the change in the spot component of the forward contracts are recog- nized 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 other comprehensive income (OCI) 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 rec- ognized 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 recognized 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 inven- tory. 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 hedges Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is recognized immediately in the statement of profit or loss within other finance income or finance expenses. Gains and losses accumulated in equity are reclassified to profit or loss when the foreign oper- ation is partially disposed of or sold. See notes 28.1 and 28.2 for further details. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 180/336 Derivatives that do not qualify for hedge accounting Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are rec- ognized immediately in the statement of profit or loss and are included in other finance income or finance expenses. Further details of derivative financial instruments are disclosed in note 34. December 31, 2023. 3.4 New standards, interpretations and amendments adopted 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, 2023). New and amended standards adopted by the Group – IAS 1: Disclosure of accounting policies – IAS 8: Definition of accounting estimates – IAS 12: Deferred tax related to assets and liabilities arising from a single transaction The amendments apply for the first time in 2023, but do not have a material impact on the consolidated financial statements of the Group. The Group has not early adopted any of the amendments that have been issued but not yet effective : – Amendment to IFRS 16 – Leases on sale and leaseback – Amendment to IAS 1 – Non-current liabilities with covenants – Amendment to IAS 7 and IFRS 7 – Supplier finance – Amendments to IAS 21 – Lack of Exchangeability The new standards and interpretations issued not yet effective do not have a material impact from a qualitative and quantitative perspective. The Group did not have to change its accounting policies or make retrospective adjust- ments as a result of adopting the above mentioned new or amended standards. Amendments to IAS 12 Income Taxes The International Accounting Standards Board (IASB) has published ‘International Tax Reform – Pillar Two Model Rules’ (Amendments to IAS 12) in May 2023. Avolta has applied the temporary exception from the accounting requirements for deferred taxes in IAS 12 immediately upon issuance of the amendments and retrospectively in accor- dance with IAS 8. Accordingly, the Group neither recognizes nor discloses information about deferred tax assets and liabilities related to Pillar Two income taxes. OECD Pillar Two model rules The Group is within the scope of the OECD Pillar Two model rules. Switzerland and other jurisdictions in which the Group operates have (substantively) enacted Pillar Two legis- lation. The legislations in those jurisdictions will be effective for the Group’s financial year beginning January 1, 2024. Since the Pillar Two legislations were not effective at the reporting date, there is no current income tax exposure for the year ended The Group is in the process of assessing its exposure to the Pillar Two legislation for when it comes into effect. As per a preliminary transitional safe harbour calculation based on 2023 figures, there are a limited number of jurisdictions where the transitional safe harbour rule may not apply. 4. Critical accounting judgments and key sources of estimation uncertainty The preparation of Avolta’s financial statements requires management to make judg- ments, 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 uncertainty The 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 mate- rial adjustment to the carrying amounts of assets and liabilities within the next financial periods, are discussed below. Impairment tests Avolta 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 estimates. The esti- mates and assumptions used are disclosed in note 19. Derivatives that do not qualify for hedge accounting Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are rec- ognized immediately in the statement of profit or loss and are included in other finance income or finance expenses. Further details of derivative financial instruments are disclosed in note 34. 3.4 New standards, interpretations and amendments adopted 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, 2023). New and amended standards adopted by the Group – IAS 1: Disclosure of accounting policies – IAS 8: Definition of accounting estimates – IAS 12: Deferred tax related to assets and liabilities arising from a single transaction The amendments apply for the first time in 2023, but do not have a material impact on the consolidated financial statements of the Group. The Group has not early adopted any of the amendments that have been issued but not yet effective : – Amendment to IFRS 16 – Leases on sale and leaseback – Amendment to IAS 1 – Non-current liabilities with covenants – Amendment to IAS 7 and IFRS 7 – Supplier finance – Amendments to IAS 21 – Lack of Exchangeability The new standards and interpretations issued not yet effective do not have a material impact from a qualitative and quantitative perspective. The Group did not have to change its accounting policies or make retrospective adjust- ments as a result of adopting the above mentioned new or amended standards. Amendments to IAS 12 Income Taxes The International Accounting Standards Board (IASB) has published ‘International Tax Reform – Pillar Two Model Rules’ (Amendments to IAS 12) in May 2023. Avolta has applied the temporary exception from the accounting requirements for deferred taxes in IAS 12 immediately upon issuance of the amendments and retrospectively in accor- dance with IAS 8. Accordingly, the Group neither recognizes nor discloses information about deferred tax assets and liabilities related to Pillar Two income taxes. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 181/336 OECD Pillar Two model rules The Group is within the scope of the OECD Pillar Two model rules. Switzerland and other jurisdictions in which the Group operates have (substantively) enacted Pillar Two legis- lation. The legislations in those jurisdictions will be effective for the Group’s financial year beginning January 1, 2024. Since the Pillar Two legislations were not effective at the reporting date, there is no current income tax exposure for the year ended December 31, 2023. The Group is in the process of assessing its exposure to the Pillar Two legislation for when it comes into effect. As per a preliminary transitional safe harbour calculation based on 2023 figures, there are a limited number of jurisdictions where the transitional safe harbour rule may not apply. 4. Critical accounting judgments and key sources of estimation uncertainty The preparation of Avolta’s financial statements requires management to make judg- ments, 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 uncertainty The 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 mate- rial adjustment to the carrying amounts of assets and liabilities within the next financial periods, are discussed below. Impairment tests Avolta 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 estimates. The esti- mates and assumptions used are disclosed in note 19. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 182/336 5. Segment information Avolta’s risks and returns are predominantly affected by the fact that Avolta operates in different locations and geographies. Therefore, Avolta presents the segment informa- tion as it does internally to the Global Executive Committee, which represents the Chief Operating Decision Maker (CODM), using geographical segments and the Global Dis- tribution Centers as an additional segment. As part of the integration of the Autogrill Group, the Group implemented a new organi- zation which became effective on February 7, 2023. The previous segment The Amer- icas was split into Latin America (LATAM) and North America. Furthermore, certain countries have been reallocated from Europe, Middle East and Africa (EMEA) to Asia Pacific (APAC). In addition, the Group allocates advertising income to the operating segments. The comparative figures have been presented accordingly to reflect these changes. The Group is presenting the CORE EBITDA (Non-GAAP) KPI which is used by the Global Executive Committee to monitor the Group’s performance. This indicator provides the most relevant view on Avolta’s business and represents an operational KPI excluding the accounting impact resulting from IFRS 16 related profit or loss line items (i.e. deprecia- tion of right-of-use assets and lease interest) and adding the relevant concession fee owed based on the corresponding concession agreement. Please refer to Avolta’s alter- native performance measures section for details. Information reported to the Global Executive Committee for the purposes of resource allocation and assessment of segment performance is focused on the geographical segments. The Group’s reportable segments are therefore as follows: 2023 In millions of CHF With external customer With other divisions Core EBITDA (unaudited) Employees (FTE) Europe, Middle East and Africa (EMEA)1,2 North America 1 Latin America (LATAM) Asia Pacific (APAC) Global Distribution Centers 3 Total divisions Eliminations Total Europe, Middle East and Africa (EMEA)1,2 North America 1 Latin America (LATAM) Asia Pacific (APAC) Global Distribution Centers 3 Total divisions Eliminations Total 6,520.2 3,971.4 1,653.7 557.8 86.4 12,789.5 12,789.5 3,541.3 1,638.3 1,279.9 210.7 208.2 6,878.4 6,878.4 1,529.7 1,529.7 – (1,529.7) 1,303.5 1,303.5 – (1,303.5) – – – – – – – – – – Turnover Total 6,520.2 3,971.4 1,653.7 557.8 1,616.1 14,319.2 (1,529.7) 12,789.5 Turnover Total 3,541.3 1,638.3 1,279.9 210.7 1,511.7 8,181.9 (1,303.5) 6,878.4 696.5 519.3 238.6 41.6 (366.5) 1,129.5 – 1,129.5 444.1 280.6 176.3 (0.5) (294.3) 606.2 – 606.2 26,107 29,851 5,991 5,804 706 68,459 – 68,459 10,353 8,969 3,077 810 583 23,792 – 23,792 2022 In millions of CHF With external customer With other divisions Core EBITDA (unaudited) Employees (FTE) 1 The Group generated 28.3 % (2022: 21.4 %) of its turnover in the US, 10.8 % (2022: 14.7 %), in the United Kingdom and 11.0 % (2022: 2.2 %) in Italy. 2 Avolta generated 3.1 % (2022: 4.0 %) of its turnover with external customers in Switzerland (domicile). 3 Global Distribution Center and corporate entities have global functions that cannot be allocated to the other segments. Transactions between operating segments considered on arm’s length terms. 5. Segment information Avolta’s risks and returns are predominantly affected by the fact that Avolta operates in different locations and geographies. Therefore, Avolta presents the segment informa- tion as it does internally to the Global Executive Committee, which represents the Chief Operating Decision Maker (CODM), using geographical segments and the Global Dis- tribution Centers as an additional segment. As part of the integration of the Autogrill Group, the Group implemented a new organi- zation which became effective on February 7, 2023. The previous segment The Amer- icas was split into Latin America (LATAM) and North America. Furthermore, certain countries have been reallocated from Europe, Middle East and Africa (EMEA) to Asia Pacific (APAC). In addition, the Group allocates advertising income to the operating segments. The comparative figures have been presented accordingly to reflect these changes. The Group is presenting the CORE EBITDA (Non-GAAP) KPI which is used by the Global Executive Committee to monitor the Group’s performance. This indicator provides the most relevant view on Avolta’s business and represents an operational KPI excluding the accounting impact resulting from IFRS 16 related profit or loss line items (i.e. deprecia- tion of right-of-use assets and lease interest) and adding the relevant concession fee owed based on the corresponding concession agreement. Please refer to Avolta’s alter- native performance measures section for details. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 183/336 Information reported to the Global Executive Committee for the purposes of resource allocation and assessment of segment performance is focused on the geographical segments. The Group’s reportable segments are therefore as follows: 2023 In millions of CHF With external customer With other divisions Europe, Middle East and Africa (EMEA)1,2 North America 1 Latin America (LATAM) Asia Pacific (APAC) Global Distribution Centers 3 Total divisions Eliminations Total 6,520.2 3,971.4 1,653.7 557.8 86.4 12,789.5 – – – – 1,529.7 1,529.7 – (1,529.7) 12,789.5 – 2022 In millions of CHF With external customer With other divisions Europe, Middle East and Africa (EMEA)1,2 North America 1 Latin America (LATAM) Asia Pacific (APAC) Global Distribution Centers 3 Total divisions Eliminations Total 3,541.3 1,638.3 1,279.9 210.7 208.2 6,878.4 – – – – 1,303.5 1,303.5 – (1,303.5) 6,878.4 – (1,303.5) 6,878.4 1 The Group generated 28.3 % (2022: 21.4 %) of its turnover in the US, 10.8 % (2022: 14.7 %), in the United Kingdom and 11.0 % (2022: 2.2 %) in Italy. 2 Avolta generated 3.1 % (2022: 4.0 %) of its turnover with external customers in Switzerland (domicile). 3 Global Distribution Center and corporate entities have global functions that cannot be allocated to the other segments. Transactions between operating segments considered on arm’s length terms. Turnover Total 6,520.2 3,971.4 1,653.7 557.8 1,616.1 14,319.2 (1,529.7) 12,789.5 Turnover Total 3,541.3 1,638.3 1,279.9 210.7 1,511.7 8,181.9 Core EBITDA (unaudited) Employees (FTE) 696.5 519.3 238.6 41.6 (366.5) 1,129.5 – 1,129.5 26,107 29,851 5,991 5,804 706 68,459 – 68,459 Core EBITDA (unaudited) Employees (FTE) 444.1 280.6 176.3 (0.5) (294.3) 606.2 – 606.2 10,353 8,969 3,077 810 583 23,792 – 23,792 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 184/336 Profit or loss reconciliation IFRS / CORE Please refer to pages 273 – 274 in Avolta’s alternative performance measures chapter for more details on the reconciliation between the IFRS and CORE profit or loss. Financial position and other disclosures 2023 In millions of CHF Net sales (IFRS) / (CORE) Advertising income Turnover (IFRS) / (CORE) Cost of sales (IFRS) / (CORE) Gross profit (IFRS) / (CORE) Leases expenses (IFRS) / Concession expenses (CORE) Personnel expenses Other expenses (IFRS) / (CORE) Other income (IFRS) / (CORE) Operating profit before D&A / CORE EBITDA Depreciation & impairment of PP&E Amortization & impairment of intangibles (IFRS) / (CORE) Depreciation & impairment right-of-use assets (IFRS) Operating profit / CORE EBIT Financial result (IFRS) / (CORE) Profit before taxes / CORE EBT Income tax (IFRS) / (CORE) Net profit / CORE Net profit 2022 In millions of CHF Net sales (IFRS) / (CORE) Advertising income Turnover (IFRS) / (CORE) Cost of sales (IFRS) / (CORE) Gross profit (IFRS) / (CORE) Leases expenses (IFRS) / Concession expenses (CORE) Personnel expenses Other expenses (IFRS) / (CORE) Other income (IFRS) / (CORE) Operating profit before D&A / CORE EBITDA Depreciation & impairment of PP&E Amortization & impairment of intangibles (IFRS) / (CORE) Depreciation & impairment right-of-use assets (IFRS) Operating profit / CORE EBIT Financial result (IFRS) / (CORE) Profit before taxes / CORE EBT Income tax (IFRS) / (CORE) Net profit / CORE Net profit IFRS 12,583.7 205.8 12,789.5 (4,716.0) 8,073.5 (1,875.5) (2,539.3) (1,375.7) 191.9 2,474.9 (277.4) (242.8) (1,089.6) 865.1 (567.1) 298.0 (81.6) 216.4 IFRS 6,721.2 157.2 6,878.4 (2,684.6) 4,193.8 (1,081.9) (997.9) (578.7) 61.8 1,597.1 (113.9) (195.6) (785.2) 502.4 (305.6) 196.8 (76.2) 120.6 Acquisition rel. adj. (unaudited) Lease adjustments (unaudited) Fuel sales adjustments (unaudited) – – – – – – – 18.8 – 18.8 – 208.3 – 227.1 15.7 242.8 (53.3) 189.5 – – – – – (1,303.2) – (60.8) (0.1) (1,364.1) (0.1) – 1,089.6 (274.6) 350.1 75.5 (24.6) 50.9 (254.9) – (254.9) 239.0 (15.9) – – – 15.9 – – – – – – – – – Acquisition rel. adj. (unaudited) Lease adjustments (unaudited) Fuel sales adjustments (unaudited) – – – – – – – – – – – 173.9 – 173.9 – 173.9 (37.1) 136.8 – – – – – (948.0) – (42.0) (0.9) (990.9) – – 785.2 (205.7) 130.0 (75.7) 7.8 (67.9) – – – – – – – – – – – – – – – – – – CORE (unaudited) 12,328.8 205.8 12,534.6 (4,477.0) 8,057.6 (3,178.7) (2,539.3) (1,417.7) 207.7 1,129.6 (277.5) (34.5) – 817.6 (201.3) 616.3 (159.5) 456.8 CORE (unaudited) 6,721.2 157.2 6,878.4 (2,684.6) 4,193.8 (2,029.9) (997.9) (620.7) 60.9 606.2 (113.9) (21.7) – 470.7 (175.6) 295.1 (105.5) 189.6 At December 31, 2023 In millions of CHF Europe, Middle East and Africa (EMEA)1 North America 2 Latin America (LATAM) Asia Pacific (APAC) Global Distribution Centers 3 Total divisions 4 Unallocated positions 5 Eliminations Total At December 31, 2022 In millions of CHF Europe, Middle East and Africa (EMEA)1 North America 2 Latin America (LATAM) Asia Pacific (APAC) Global Distribution Centers 3 Total divisions 4 Unallocated positions 5 Eliminations Total (2022: 7.5 %) in Spain. ments. 4 Before inter-segment elimination. 5 Total liabilities contain 3rd-party financing. Reconciliation of assets In millions of CHF Operating assets Current assets of corporate and holding companies Non-current assets of corporate and holding companies Eliminations Total assets Total assets 9,792.3 4,085.3 1,620.8 369.5 1,246.1 17,114.0 79.1 (678.2) 16,514.9 Total assets 4,831.1 2,054.8 1,413.9 240.7 1,399.9 9,940.4 40.9 (671.7) 9,309.6 Total liabilities 7,677.1 2,698.3 1,572.6 538.0 3,431.5 15,917.5 3,006.4 (4,904.3) 14,019.6 Total liabilities 3,013.2 1,701.9 1,572.6 437.0 3,531.0 10,255.6 3,045.5 (4,957.6) 8,343.5 Income tax (expense) / income Capital expenditure paid Depreciation amortization and impairment (39.9) (16.0) (13.9) (4.0) (6.3) (80.1) (1.5) – (81.6) (10.6) (29.4) (35.2) (1.2) 1.2 (75.2) (1.0) – (76.2) (440.8) (1,608.3) (441.0) (1,609.8) (186.9) (186.5) (23.1) (28.0) (16.3) (0.2) – (35.6) (46.6) (12.8) (4.8) (13.2) (113.0) (0.3) – (113.3) (937.5) (508.3) (102.6) (46.3) (13.6) (1.5) – Depreciation amortization and impairment (659.4) (254.6) (120.6) (43.8) (15.0) (1,093.4) (1.3) – (1,094.7) Income tax (expense) / income Capital expenditure paid 31.12.2023 31.12.2022 17,114.0 51.0 28.1 (678.2) 16,514.9 9,940.4 26.4 14.6 (671.7) 9,309.6 1 Within the Group, 5.7 % (2022: 9.4 %) of the total non-current assets are located in Switzerland (domicile) and 29.9 % 2 Within the Group, 21.1 % (2022: 15.1 %) of the total non-current assets are located in the US. 3 Global Distribution Centers and corporate entities have global functions and cannot be allocated to the other seg- Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 185/336 Profit or loss reconciliation IFRS / CORE Please refer to pages 273 – 274 in Avolta’s alternative performance measures chapter for more details on the reconciliation between the IFRS and CORE profit or loss. Financial position and other disclosures At December 31, 2023 In millions of CHF Europe, Middle East and Africa (EMEA)1 North America 2 Latin America (LATAM) Asia Pacific (APAC) Global Distribution Centers 3 Total divisions 4 Unallocated positions 5 Eliminations Total At December 31, 2022 In millions of CHF Europe, Middle East and Africa (EMEA)1 North America 2 Latin America (LATAM) Asia Pacific (APAC) Global Distribution Centers 3 Total divisions 4 Unallocated positions 5 Eliminations Total Total assets 9,792.3 4,085.3 1,620.8 369.5 1,246.1 17,114.0 79.1 (678.2) 16,514.9 Total assets 4,831.1 2,054.8 1,413.9 240.7 1,399.9 9,940.4 40.9 (671.7) 9,309.6 Total liabilities 7,677.1 2,698.3 1,572.6 538.0 3,431.5 15,917.5 3,006.4 (4,904.3) 14,019.6 Total liabilities 3,013.2 1,701.9 1,572.6 437.0 3,531.0 10,255.6 3,045.5 (4,957.6) 8,343.5 Operating profit before D&A / CORE EBITDA 18.8 (1,364.1) 2023 In millions of CHF Net sales (IFRS) / (CORE) Advertising income Turnover (IFRS) / (CORE) Cost of sales (IFRS) / (CORE) Gross profit (IFRS) / (CORE) Personnel expenses Other expenses (IFRS) / (CORE) Other income (IFRS) / (CORE) Leases expenses (IFRS) / Concession expenses (CORE) Depreciation & impairment of PP&E Amortization & impairment of intangibles (IFRS) / (CORE) Depreciation & impairment right-of-use assets (IFRS) Operating profit / CORE EBIT Financial result (IFRS) / (CORE) Profit before taxes / CORE EBT Income tax (IFRS) / (CORE) Net profit / CORE Net profit 2022 In millions of CHF Net sales (IFRS) / (CORE) Advertising income Turnover (IFRS) / (CORE) Cost of sales (IFRS) / (CORE) Gross profit (IFRS) / (CORE) Personnel expenses Other expenses (IFRS) / (CORE) Other income (IFRS) / (CORE) Leases expenses (IFRS) / Concession expenses (CORE) Operating profit before D&A / CORE EBITDA Depreciation & impairment of PP&E Amortization & impairment of intangibles (IFRS) / (CORE) Depreciation & impairment right-of-use assets (IFRS) Operating profit / CORE EBIT Financial result (IFRS) / (CORE) Profit before taxes / CORE EBT Income tax (IFRS) / (CORE) Net profit / CORE Net profit IFRS 12,583.7 205.8 12,789.5 (4,716.0) 8,073.5 (1,875.5) (2,539.3) (1,375.7) 191.9 2,474.9 (277.4) (242.8) (1,089.6) 865.1 (567.1) 298.0 (81.6) 216.4 IFRS 6,721.2 157.2 6,878.4 (2,684.6) 4,193.8 (1,081.9) (997.9) (578.7) 61.8 1,597.1 (113.9) (195.6) (785.2) 502.4 (305.6) 196.8 (76.2) 120.6 Acquisition rel. adj. (unaudited) Lease adjustments (unaudited) Fuel sales adjustments (unaudited) (254.9) (254.9) 239.0 (15.9) 15.9 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – (1,303.2) (60.8) (0.1) (0.1) – 1,089.6 (274.6) 350.1 75.5 (24.6) 50.9 (948.0) (42.0) (0.9) (990.9) 785.2 (205.7) 130.0 (75.7) 7.8 (67.9) CORE (unaudited) 12,328.8 205.8 12,534.6 (4,477.0) 8,057.6 (3,178.7) (2,539.3) (1,417.7) 207.7 1,129.6 (277.5) (34.5) – 817.6 (201.3) 616.3 (159.5) 456.8 CORE (unaudited) 6,721.2 157.2 6,878.4 (2,684.6) 4,193.8 (2,029.9) (997.9) (620.7) 60.9 606.2 (113.9) (21.7) – 470.7 (175.6) 295.1 (105.5) 189.6 – – – – – – – – – – – – – – – – – – – – – – – 18.8 208.3 227.1 15.7 242.8 (53.3) 189.5 173.9 173.9 173.9 (37.1) 136.8 Acquisition rel. adj. (unaudited) Lease adjustments (unaudited) Fuel sales adjustments (unaudited) 1 Within the Group, 5.7 % (2022: 9.4 %) of the total non-current assets are located in Switzerland (domicile) and 29.9 % (2022: 7.5 %) in Spain. 2 Within the Group, 21.1 % (2022: 15.1 %) of the total non-current assets are located in the US. 3 Global Distribution Centers and corporate entities have global functions and cannot be allocated to the other seg- ments. 4 Before inter-segment elimination. 5 Total liabilities contain 3rd-party financing. Reconciliation of assets In millions of CHF Operating assets Current assets of corporate and holding companies Non-current assets of corporate and holding companies Eliminations Total assets 31.12.2023 31.12.2022 17,114.0 51.0 28.1 (678.2) 16,514.9 9,940.4 26.4 14.6 (671.7) 9,309.6 Income tax (expense) / income Capital expenditure paid Depreciation amortization and impairment (937.5) (508.3) (102.6) (46.3) (13.6) (186.9) (186.5) (23.1) (28.0) (16.3) (440.8) (1,608.3) (0.2) – (1.5) – (441.0) (1,609.8) (39.9) (16.0) (13.9) (4.0) (6.3) (80.1) (1.5) – (81.6) Income tax (expense) / income Capital expenditure paid (10.6) (29.4) (35.2) (1.2) 1.2 (75.2) (1.0) – (76.2) (35.6) (46.6) (12.8) (4.8) (13.2) (113.0) (0.3) – (113.3) Depreciation amortization and impairment (659.4) (254.6) (120.6) (43.8) (15.0) (1,093.4) (1.3) – (1,094.7) Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 186/336 Reconciliation of liabilities In millions of CHF Operating liabilities Borrowings of corporate and holding companies, current Borrowings of corporate and holding companies, non-current Other non-segment liabilities Eliminations Total liabilities 31.12.2023 31.12.2022 15,917.5 743.3 2,190.4 72.8 (4,904.3) 14,019.6 10,255.6 0.2 2,999.0 46.3 (4,957.6) 8,343.5 6. Acquisitions of businesses 6.1 Combination with Autogrill On February 3, 2023, Dufry, global leader in Travel Retail, successfully closed the busi- ness combination with Autogrill, global leader in Travel Food & Beverage to become Avolta Group. Dufry acquired Autogrill via a two-step acquisition. In accordance with the Combination Agreement, in consideration for the transfer of the 50.3 % stake in Autogrill to Dufry, Edizione (through its wholly owned subsidiary Schema Beta S.p.A.) was issued mandatory convertible non-interest bearing notes convertible into an aggre- gate of 30,663,329 newly issued Dufry shares, at an implied exchange ratio of 0.158 new Dufry shares for each Autogrill share. Edizione exercised its conversion right following closing on February 3, 2023, of the transfer and was issued 30,663,329 Dufry shares. Pursuant to Italian law, Dufry launched a mandatory takeover offer (MTO) for the remaining Autogrill shares in several steps starting from February 3, 2023, which resulted in the delisting of Autogrill on July 24, 2023. Please refer to note 6.2 for further details. Since then, Dufry has successfully integrated Autogrill into its organization, which is expected to generate cost synergies, comprising both cost reductions and gross profit improvements. Furthermore, the combination of Dufry, global leader in Travel Retail, and Autogrill, global leader in Travel Food & Beverage (F&B), creates a unique, integrated Travel Experience Player, leveraging mutual skills to develop more compelling offers for Avolta’s customers and build the next generation of travel experience. The synergies 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. The fair value of the identifiable assets and liabilities assumed of Autogrill at the date of acquisition and the resulting goodwill are determined as follows: IN MILLIONS OF CHF Property, plant and equipment Right-of-use assets 1 Concession rights Brands Other intangible assets Investments in associates Deferred tax assets Other non-current assets Inventories Trade and credit card receivables Cash and cash equivalents Other current assets Borrowings Lease obligations Post-employment benefit obligations Deferred tax liabilities Provisions Trade payables Other liabilities Fair value of non-controlling interests Identifiable net assets Dufry’s share in the net assets (50.3 %) Goodwill Consideration in cash Consideration in shares Total consideration Final fair value 785.2 1,317.1 860.5 113.0 36.4 4.2 43.6 107.9 124.3 9.3 459.7 158.0 (571.4) (1,434.1) (30.8) (269.4) (80.8) (402.6) (399.7) (57.5) 772.9 – 1,279.0 388.8 890.2 1,279.0 1 adjusted for subleases and unfavorable lease terms. From the date when Dufry took control of the Autogrill operations on February 3, 2023, until December 31, 2023, Autogrill operations contributed CHF 4,538.8 million in turn- over and a net profit of CHF 47.9 million to the Group. If the business combination had taken place at the beginning of 2023, Autogrill would have generated a turnover of CHF 4,890.5 million (unaudited) and a net profit of CHF 29.4 million (unaudited). Transaction costs in connection to the Autogrill business combination are reflected in other expenses and finance expenses. Please refer to note 11 and note 13 for further information. 6.2 Transaction with non-controlling interest in Autogrill After the initial acquisition on February 3, 2023, Dufry launched a MTO for the out- standing Autogrill shares at the Milan Stock Exchange and acquired until July 24, 2023, in several steps all the remaining of Autogrill shares (49.7 %) for a total consideration of CHF 1,304.6 million, thereof paid in shares CHF 1,260.5 million and a total consideration paid in cash of CHF 44.1 million equivalent to EUR 6.33 per share. The difference between the total consideration for the additional shares and the proportional reduc- tion of the carrying amount of the non-controlling interests is CHF 920.5 million. This amount is recognized in the retained earnings in the line changes in participation of non-controlling interests in the statement of changes in equity. There were no significant transactions during 2022. Reconciliation of liabilities In millions of CHF Operating liabilities Borrowings of corporate and holding companies, current Borrowings of corporate and holding companies, non-current Other non-segment liabilities Eliminations Total liabilities 31.12.2023 31.12.2022 15,917.5 743.3 2,190.4 72.8 (4,904.3) 14,019.6 10,255.6 0.2 2,999.0 46.3 (4,957.6) 8,343.5 6. Acquisitions of businesses 6.1 Combination with Autogrill On February 3, 2023, Dufry, global leader in Travel Retail, successfully closed the busi- ness combination with Autogrill, global leader in Travel Food & Beverage to become Avolta Group. Dufry acquired Autogrill via a two-step acquisition. In accordance with the Combination Agreement, in consideration for the transfer of the 50.3 % stake in Autogrill to Dufry, Edizione (through its wholly owned subsidiary Schema Beta S.p.A.) was issued mandatory convertible non-interest bearing notes convertible into an aggre- gate of 30,663,329 newly issued Dufry shares, at an implied exchange ratio of 0.158 new Dufry shares for each Autogrill share. Edizione exercised its conversion right following closing on February 3, 2023, of the transfer and was issued 30,663,329 Dufry shares. Pursuant to Italian law, Dufry launched a mandatory takeover offer (MTO) for the remaining Autogrill shares in several steps starting from February 3, 2023, which resulted in the delisting of Autogrill on July 24, 2023. Please refer to note 6.2 for further details. Since then, Dufry has successfully integrated Autogrill into its organization, which is expected to generate cost synergies, comprising both cost reductions and gross profit improvements. Furthermore, the combination of Dufry, global leader in Travel Retail, and Autogrill, global leader in Travel Food & Beverage (F&B), creates a unique, integrated Travel Experience Player, leveraging mutual skills to develop more compelling offers for Avolta’s customers and build the next generation of travel experience. The synergies 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. The fair value of the identifiable assets and liabilities assumed of Autogrill at the date of acquisition and the resulting goodwill are determined as follows: Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 187/336 IN MILLIONS OF CHF Property, plant and equipment Right-of-use assets 1 Concession rights Brands Other intangible assets Investments in associates Deferred tax assets Other non-current assets Inventories Trade and credit card receivables Cash and cash equivalents Other current assets Borrowings Lease obligations Post-employment benefit obligations Deferred tax liabilities Provisions Trade payables Other liabilities Fair value of non-controlling interests Identifiable net assets Dufry’s share in the net assets (50.3 %) Goodwill Consideration in cash Consideration in shares Total consideration Final fair value 785.2 1,317.1 860.5 113.0 36.4 4.2 43.6 107.9 124.3 9.3 459.7 158.0 (571.4) (1,434.1) (30.8) (269.4) (80.8) (402.6) (399.7) (57.5) 772.9 – 1,279.0 388.8 890.2 1,279.0 1 adjusted for subleases and unfavorable lease terms. From the date when Dufry took control of the Autogrill operations on February 3, 2023, until December 31, 2023, Autogrill operations contributed CHF 4,538.8 million in turn- over and a net profit of CHF 47.9 million to the Group. If the business combination had taken place at the beginning of 2023, Autogrill would have generated a turnover of CHF 4,890.5 million (unaudited) and a net profit of CHF 29.4 million (unaudited). Transaction costs in connection to the Autogrill business combination are reflected in other expenses and finance expenses. Please refer to note 11 and note 13 for further information. 6.2 Transaction with non-controlling interest in Autogrill After the initial acquisition on February 3, 2023, Dufry launched a MTO for the out- standing Autogrill shares at the Milan Stock Exchange and acquired until July 24, 2023, in several steps all the remaining of Autogrill shares (49.7 %) for a total consideration of CHF 1,304.6 million, thereof paid in shares CHF 1,260.5 million and a total consideration paid in cash of CHF 44.1 million equivalent to EUR 6.33 per share. The difference between the total consideration for the additional shares and the proportional reduc- tion of the carrying amount of the non-controlling interests is CHF 920.5 million. This amount is recognized in the retained earnings in the line changes in participation of non-controlling interests in the statement of changes in equity. There were no significant transactions during 2022. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 188/336 7. Net sales Net sales by product categories: In millions of CHF Perfumes and Cosmetics Food, Confectionery & Catering Wine and Spirits Luxury goods Tobacco goods Electronics Literature and Publications Fuel Other Total In millions of CHF Perfumes and Cosmetics Food, Confectionery & Catering Wine and Spirits Luxury goods Tobacco goods Electronics Literature and Publications Other Total EMEA 1,533.1 2,007.8 661.7 278.2 1,185.9 14.0 11.7 254.9 466.9 6,414.3 EMEA* 1,275.0 483.7 589.5 248.9 782.9 13.1 9.7 117.4 3,520.2 North America 165.7 3,005.7 67.4 176.9 35.5 126.8 95.1 – 263.7 3,936.8 North America* 128.4 814.0 58.4 123.2 29.6 127.7 89.1 246.5 1,616.9 LATAM 555.2 172.7 426.1 255.2 90.6 70.4 4.6 – 33.6 1,608.3 APAC Global DC 2023 97.5 183.0 139.2 57.3 68.9 1.7 – – 2.2 549.8 58.8 3.4 11.2 0.1 0.7 – – – 0.3 74.5 2,410.3 5,372.7 1,305.6 767.7 1,381.6 212.9 111.4 254.9 766.7 12,583.7 LATAM* APAC* Global DC* 2022 Total 3,520.2 1,616.9 1,273.0 382.6 126.6 388.0 173.3 74.5 40.7 3.8 83.5 1,273.0 60.6 13.8 80.4 26.1 9.2 2.0 – 15.5 207.6 73.6 3.2 25.7 0.6 0.3 – – 0.1 1,920.2 1,441.3 1,142.0 572.1 896.5 183.5 102.6 463.0 103.5 6,721.2 * The comparative figures have been presented according to the new segment structure. Please refer to note 5 for fur- ther details. Net sales by market sector: In millions of CHF Duty-free Duty-paid Food & Beverage Total In millions of CHF Duty-free Duty-paid Total EMEA 2,581.5 1,944.1 1,888.7 6,414.3 EMEA* 2,205.9 1,314.3 3,520.2 North America 255.9 1,683.0 1,997.9 3,936.8 North America* 317.8 1,299.1 1,616.9 LATAM APAC Global DC 2023 Total (1,875.5) (1,081.9) 1,463.7 144.6 – 1,608.3 369.0 36.2 144.6 549.8 – 74.5 – 74.5 4,670.1 3,882.4 4,031.2 12,583.7 LATAM* APAC* Global DC* 2022 1,151.1 121.9 1,273.0 182.7 24.9 207.6 0.4 103.1 103.5 3,857.9 2,863.3 6,721.2 * The comparative figures have been presented according to the new segment structure. Please refer to note 5 for fur- ther details. 10,265.3 1,278.3 286.1 190.9 563.1 12,583.7 6,145.6 178.3 189.5 207.8 6,721.2 2022 (1,168.9) (15.2) (0.7) 10.7 80.2 12.0 Net sales by channel: In millions of CHF Airports Motorways Border, downtown & hotel shops Cruise liners and seaports Railway stations and other Total EMEA 4,639.7 1,278.3 128.4 72.0 295.9 6,414.3 LATAM APAC Global DC 2023 3,805.0 1,432.8 North America 48.6 – – 83.2 3,936.8 North America* 37.1 – 39.2 – 56.0 118.9 0.6 1,608.3 1,081.1 54.3 134.4 3.2 387.8 53.1 – – 108.9 549.8 175.9 16.8 – 14.9 207.6 74.5 74.5 – – – – – – – 103.5 103.5 In millions of CHF EMEA* LATAM* APAC* Global DC* 2022 Airports 3,348.0 1,540.6 Border, downtown & hotel shops Cruise liners and seaports Railway stations and other 70.1 55.1 47.0 * The comparative figures have been presented according to the new segment structure. Please refer to note 5 for fur- ther details. 8. Lease (expenses) / income In millions of CHF Lease expenses 1 Lease expenses short-term contracts Lease expenses low value contracts Sublease income Relief of lease obligations 2 Change in provision for onerous contract 2023 (1,891.0) (40.2) (13.1) 60.6 – 8.2 1 Lease expenses include only variable lease expenses. Fixed and in substance fixed commitments are recognized in accordance with lease accounting as depreciation of right-of-use assets or interest on lease obligations. For the fol- lowing year, the Group estimates that the lease expenses may be between 15 % and 17 % of net sales. 2 In 2022, Avolta applied the COVID-19 related rent concession - amendment to IFRS 16 and recognized relief of lease obligations presented as lease expenses. A part of the Company’s lease contracts require as compensation the higher of two amounts: a) a percentage of sales or b) a fixed minimal guaranteed amount (MAG). The fair value of these fixed or in substance fixed 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 cal- culated as a percentage of sales. Other lease contracts require only variable payments, which are fully presented as lease expense. Variable lease expense approximates the related cash flows due to the short payment term characteristic of these contracts. For further details of right-of-use assets, please refer to note 17, for lease obligation, note 29 and for the gain in relation to modifications of lease contracts, to note 13. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 189/336 Total 6,414.3 3,936.8 1,608.3 North America LATAM APAC Global DC 2023 3,805.0 1,432.8 – 48.6 – 83.2 – 56.0 118.9 0.6 387.8 – 53.1 – 108.9 549.8 – – – – 74.5 74.5 10,265.3 1,278.3 286.1 190.9 563.1 12,583.7 7. Net sales Net sales by product categories: APAC Global DC 2023 Net sales by channel: In millions of CHF Airports Motorways Border, downtown & hotel shops Cruise liners and seaports Railway stations and other EMEA 4,639.7 1,278.3 128.4 72.0 295.9 In millions of CHF Perfumes and Cosmetics Food, Confectionery & Catering Wine and Spirits Luxury goods Tobacco goods Electronics Literature and Publications Fuel Other Total Perfumes and Cosmetics Food, Confectionery & Catering Literature and Publications Wine and Spirits Luxury goods Tobacco goods Electronics Other Total ther details. In millions of CHF Duty-free Duty-paid Food & Beverage Total In millions of CHF Duty-free Duty-paid Total ther details. EMEA 1,533.1 2,007.8 661.7 278.2 1,185.9 14.0 11.7 254.9 466.9 6,414.3 EMEA* 1,275.0 483.7 589.5 248.9 782.9 13.1 9.7 117.4 3,520.2 EMEA 2,581.5 1,944.1 1,888.7 6,414.3 EMEA* 2,205.9 1,314.3 3,520.2 North America 165.7 3,005.7 67.4 176.9 35.5 126.8 95.1 – 263.7 3,936.8 North America* 128.4 814.0 58.4 123.2 29.6 127.7 89.1 246.5 1,616.9 North America 255.9 1,683.0 1,997.9 3,936.8 North America* 317.8 1,299.1 1,616.9 LATAM 555.2 172.7 426.1 255.2 90.6 70.4 4.6 – 33.6 1,608.3 382.6 126.6 388.0 173.3 74.5 40.7 3.8 83.5 1,273.0 1,463.7 144.6 – 1,608.3 1,151.1 121.9 1,273.0 97.5 183.0 139.2 57.3 68.9 1.7 – – 2.2 549.8 60.6 13.8 80.4 26.1 9.2 2.0 – 15.5 207.6 369.0 36.2 144.6 549.8 182.7 24.9 207.6 58.8 3.4 11.2 0.1 0.7 – – – 0.3 74.5 73.6 3.2 25.7 0.6 0.3 – – 0.1 2,410.3 5,372.7 1,305.6 767.7 1,381.6 212.9 111.4 254.9 766.7 12,583.7 1,920.2 1,441.3 1,142.0 572.1 896.5 183.5 102.6 463.0 103.5 6,721.2 74.5 – – 74.5 4,670.1 3,882.4 4,031.2 12,583.7 0.4 103.1 103.5 3,857.9 2,863.3 6,721.2 LATAM* APAC* Global DC* 2022 * The comparative figures have been presented according to the new segment structure. Please refer to note 5 for fur- Net sales by market sector: * The comparative figures have been presented according to the new segment structure. Please refer to note 5 for fur- In millions of CHF LATAM* APAC* Global DC* 2022 Total 3,520.2 1,616.9 1,273.0 In millions of CHF Airports Border, downtown & hotel shops Cruise liners and seaports Railway stations and other EMEA* North America* 3,348.0 1,540.6 70.1 55.1 47.0 37.1 – 39.2 LATAM* APAC* Global DC* 2022 1,081.1 54.3 134.4 3.2 175.9 16.8 – 14.9 207.6 – – – 103.5 103.5 6,145.6 178.3 189.5 207.8 6,721.2 * The comparative figures have been presented according to the new segment structure. Please refer to note 5 for fur- ther details. 8. Lease (expenses) / income In millions of CHF Lease expenses 1 Lease expenses short-term contracts Lease expenses low value contracts Sublease income Relief of lease obligations 2 Change in provision for onerous contract 2023 (1,891.0) (40.2) (13.1) 60.6 – 8.2 2022 (1,168.9) (15.2) (0.7) 10.7 80.2 12.0 LATAM APAC Global DC 2023 Total (1,875.5) (1,081.9) 1 Lease expenses include only variable lease expenses. Fixed and in substance fixed commitments are recognized in accordance with lease accounting as depreciation of right-of-use assets or interest on lease obligations. For the fol- lowing year, the Group estimates that the lease expenses may be between 15 % and 17 % of net sales. 2 In 2022, Avolta applied the COVID-19 related rent concession - amendment to IFRS 16 and recognized relief of lease obligations presented as lease expenses. A part of the Company’s lease contracts require as compensation the higher of two amounts: a) a percentage of sales or b) a fixed minimal guaranteed amount (MAG). The fair value of these fixed or in substance fixed 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 cal- culated as a percentage of sales. Other lease contracts require only variable payments, which are fully presented as lease expense. Variable lease expense approximates the related cash flows due to the short payment term characteristic of these contracts. For further details of right-of-use assets, please refer to note 17, for lease obligation, note 29 and for the gain in relation to modifications of lease contracts, to note 13. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 190/336 9. 9. Personnel expenses Personnel expenses Aggregated information of impairments per division (segment) In millions of CHF In millions of CHF Salaries and wages Salaries and wages Social security expenses Social security expenses Retirement benefits Retirement benefits Other personnel expenses Other personnel expenses Total Total 10. Depreciation, amortization and impairment 10. Depreciation, amortization and impairment In millions of CHF In millions of CHF Depreciation of property, plant and equipment Depreciation of property, plant and equipment Impairment of property, plant and equipment Impairment of property, plant and equipment Reversal of impairment of property, plant and equipment Reversal of impairment of property, plant and equipment Depreciation & impairment of PP&E Depreciation & impairment of PP&E Depreciation of right-of-use assets Depreciation of right-of-use assets Impairment of right-of-use assets Impairment of right-of-use assets Reversal of right-of-use assets Reversal of right-of-use assets Depreciation & impairment RoU assets Depreciation & impairment RoU assets Amortization of intangibles Amortization of intangibles Impairment of intangibles Impairment of intangibles Reversal of impairment of intangibles Reversal of impairment of intangibles Amortization & impairment of intangibles Amortization & impairment of intangibles Depreciation, amortization & impairment Depreciation, amortization & impairment 2023 2023 (1,980.5) (1,980.5) (291.2) (291.2) (53.5) (53.5) (214.1) (214.1) (2,539.3) (2,539.3) 2023 2023 (278.5) (278.5) (5.7) (5.7) 6.8 6.8 (277.4) (277.4) (1,088.3) (1,088.3) (15.3) (15.3) 14.0 14.0 (1,089.6) (1,089.6) (272.6) (272.6) (0.7) (0.7) 30.5 30.5 (242.8) (242.8) 2022 2022 (773.8) (773.8) (129.9) (129.9) (12.9) (12.9) (81.3) (81.3) (997.9) (997.9) 2022 2022 (112.7) (112.7) (1.4) (1.4) 0.2 0.2 (113.9) (113.9) (818.9) (818.9) (15.0) (15.0) 48.7 48.7 (785.2) (785.2) (180.0) (180.0) (32.9) (32.9) 17.3 17.3 (195.6) (195.6) (1,609.8) (1,609.8) (1,094.7) (1,094.7) Aggregated information of reversal of impairments per division (segment) Aggregated information of reversal of impairments per division (segment) In millions of CHF In millions of CHF Europe, Middle East and Africa Europe, Middle East and Africa (EMEA) (EMEA) North America North America Latin America (LATAM) Latin America (LATAM) Asia Pacific (APAC) Asia Pacific (APAC) Global Distribution Centers Global Distribution Centers Total Total Property, plant Property, plant and equipment and equipment Right-of-use Right-of-use assets assets Intangible assets Intangible assets and goodwill and goodwill Property, plant Property, plant and equipment and equipment Right-of-use Right-of-use assets assets Intangible assets Intangible assets and goodwill and goodwill 2023 2023 2022 2022 2.4 2.4 – – 4.4 4.4 – – – – 6.8 6.8 3.4 3.4 – – 6.7 6.7 3.9 3.9 – – 14.0 14.0 – – – – 30.5 30.5 – – – – 30.5 30.5 0.2 0.2 – – – – – – – – 0.2 0.2 46.1 46.1 – – – – 2.6 2.6 – – 48.7 48.7 – – – – 17.3 17.3 – – – – 17.3 17.3 Europe, Middle East and Africa In millions of CHF (EMEA) North America Latin America (LATAM) Asia Pacific (APAC) Global Distribution Centers Total Property, plant and equipment Right-of-use Intangible assets assets and goodwill Property, plant and equipment Right-of-use Intangible assets assets and goodwill (5.5) (0.2) – – – (5.7) (0.4) (14.7) (0.2) – – (15.3) (0.7) (1.4) – – – – (15.0) – – – – (0.7) (1.4) (15.0) (32.9) 2023 – – – – In 2023 and 2022, Avolta’s performance was characterized by a strong recovery of the travel retail industry, resulting in increasing sales in most regions where Avolta operates. However, the level of recovery was not the same for all countries. Whereas some oper- ations performance was better than expected, other operations recovered only slower For further details, please refer to note 19 – Impairment test of tangible and intangible 2022 (32.9) – – – – 2022 (44.8) (37.9) (101.3) (70.7) (56.1) (45.9) (20.3) (41.8) (9.1) (22.0) (15.2) (30.1) (14.2) (38.8) (7.4) (17.5) (5.6) 2023 (179.5) (125.4) (217.5) (168.0) (87.9) (72.4) (41.4) (78.3) (32.3) (43.4) (49.0) (144.9) (24.2) (73.1) (8.0) (19.5) (10.9) 11. Other expenses than expected. assets. In millions of CHF Repairs and maintenance Utilities Credit card expenses Professional advisors IT expenses Freight & packaging Acquisition related transaction costs 1 Other operational expenses Advertising expenses Office and admin expenses Travel, car, entertainment and representation Royalties, franchise fees and commercial services Public relations expenses Taxes other than income taxes Ancillary premises expenses Insurances Bank expenses Total with Autogrill. 1 In 2023 thereof CHF 18.8 million financial-related transaction costs directly linked to the closing of the combination (1,375.7) (578.7) 9. 9. Personnel expenses Personnel expenses Aggregated information of impairments per division (segment) Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 191/336 10. Depreciation, amortization and impairment 10. Depreciation, amortization and impairment In millions of CHF In millions of CHF Salaries and wages Salaries and wages Social security expenses Social security expenses Retirement benefits Retirement benefits Other personnel expenses Other personnel expenses Total Total In millions of CHF In millions of CHF Depreciation of property, plant and equipment Depreciation of property, plant and equipment Impairment of property, plant and equipment Impairment of property, plant and equipment Reversal of impairment of property, plant and equipment Reversal of impairment of property, plant and equipment Depreciation & impairment of PP&E Depreciation & impairment of PP&E Depreciation of right-of-use assets Depreciation of right-of-use assets Impairment of right-of-use assets Impairment of right-of-use assets Reversal of right-of-use assets Reversal of right-of-use assets Depreciation & impairment RoU assets Depreciation & impairment RoU assets Amortization of intangibles Amortization of intangibles Impairment of intangibles Impairment of intangibles Reversal of impairment of intangibles Reversal of impairment of intangibles Amortization & impairment of intangibles Amortization & impairment of intangibles Depreciation, amortization & impairment Depreciation, amortization & impairment (1,609.8) (1,609.8) (1,094.7) (1,094.7) Aggregated information of reversal of impairments per division (segment) Aggregated information of reversal of impairments per division (segment) Europe, Middle East and Africa Europe, Middle East and Africa In millions of CHF In millions of CHF (EMEA) (EMEA) North America North America Latin America (LATAM) Latin America (LATAM) Asia Pacific (APAC) Asia Pacific (APAC) Global Distribution Centers Global Distribution Centers Total Total Property, plant Property, plant and equipment and equipment Right-of-use Right-of-use Intangible assets Intangible assets assets assets and goodwill and goodwill Property, plant Property, plant and equipment and equipment Right-of-use Right-of-use Intangible assets Intangible assets assets assets and goodwill and goodwill 2023 2023 30.5 30.5 – – – – – – – – 2.4 2.4 4.4 4.4 – – – – – – 6.8 6.8 3.4 3.4 – – 6.7 6.7 3.9 3.9 – – 14.0 14.0 0.2 0.2 – – – – – – – – 46.1 46.1 – – – – – – 2.6 2.6 48.7 48.7 30.5 30.5 0.2 0.2 2023 2023 (1,980.5) (1,980.5) (291.2) (291.2) (53.5) (53.5) (214.1) (214.1) (2,539.3) (2,539.3) 2023 2023 (278.5) (278.5) (5.7) (5.7) 6.8 6.8 (277.4) (277.4) (1,088.3) (1,088.3) (15.3) (15.3) 14.0 14.0 (1,089.6) (1,089.6) (272.6) (272.6) (0.7) (0.7) 30.5 30.5 (242.8) (242.8) 2022 2022 (773.8) (773.8) (129.9) (129.9) (12.9) (12.9) (81.3) (81.3) (997.9) (997.9) 2022 2022 (112.7) (112.7) (1.4) (1.4) 0.2 0.2 (113.9) (113.9) (818.9) (818.9) (15.0) (15.0) 48.7 48.7 (785.2) (785.2) (180.0) (180.0) (32.9) (32.9) 17.3 17.3 (195.6) (195.6) 2022 2022 17.3 17.3 – – – – – – – – 17.3 17.3 In millions of CHF Europe, Middle East and Africa (EMEA) North America Latin America (LATAM) Asia Pacific (APAC) Global Distribution Centers Total Property, plant and equipment Right-of-use assets Intangible assets and goodwill Property, plant and equipment Right-of-use assets Intangible assets and goodwill 2023 2022 (5.5) – (0.2) – – (5.7) (0.4) – (14.7) (0.2) – (15.3) (0.7) (1.4) – – – – – – – – – – (15.0) – – (32.9) – – – – (0.7) (1.4) (15.0) (32.9) In 2023 and 2022, Avolta’s performance was characterized by a strong recovery of the travel retail industry, resulting in increasing sales in most regions where Avolta operates. However, the level of recovery was not the same for all countries. Whereas some oper- ations performance was better than expected, other operations recovered only slower than expected. For further details, please refer to note 19 – Impairment test of tangible and intangible assets. 11. Other expenses In millions of CHF Repairs and maintenance Utilities Credit card expenses Professional advisors IT expenses Freight & packaging Acquisition related transaction costs 1 Other operational expenses Advertising expenses Office and admin expenses Travel, car, entertainment and representation Royalties, franchise fees and commercial services Public relations expenses Taxes other than income taxes Ancillary premises expenses Insurances Bank expenses Total 2023 (179.5) (125.4) (217.5) (168.0) (87.9) (72.4) (41.4) (78.3) (32.3) (43.4) (49.0) (144.9) (24.2) (73.1) (8.0) (19.5) (10.9) 2022 (44.8) (37.9) (101.3) (70.7) (56.1) (45.9) (20.3) (41.8) (9.1) (22.0) (15.2) (30.1) (14.2) (38.8) (7.4) (17.5) (5.6) (1,375.7) (578.7) 1 In 2023 thereof CHF 18.8 million financial-related transaction costs directly linked to the closing of the combination with Autogrill. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 192/336 12. Other income 12. Other income In millions of CHF In millions of CHF Selling Income Selling Income Airport services income 1 Airport services income 1 Other operational income 2 Other operational income 2 Other income Other income 1 1 Services provided in airline lounges. Related costs are recognized in the corresponding expense line items. Services provided in airline lounges. Related costs are recognized in the corresponding expense line items. 2 In 2023, other operating income includes government support of CHF 7.0 (2022: 10.0) million. 2 In 2023, other operating income includes government support of CHF 7.0 (2022: 10.0) million. 13. Finance income and finance expenses 13. Finance income and finance expenses 13.1 Finance income 13.1 Finance income In millions of CHF In millions of CHF Income on financial assets Income on financial assets Interest income on current deposits Interest income on current deposits Interest income on 3rd party loans Interest income on 3rd party loans Other finance income 1,2 Other finance income 1,2 Interest income on financial assets Interest income on financial assets Income from financial investments and associates Income from financial investments and associates Share of result in associates Share of result in associates Gain on disposal of financial investments Gain on disposal of financial investments Gain / (loss) on revaluation of financial investments Gain / (loss) on revaluation of financial investments Income from financial investments and associates Income from financial investments and associates Total finance income Total finance income 1 1 In 2023, thereof CHF 36.8 million gains of interest financial derivatives. In 2023, thereof CHF 36.8 million gains of interest financial derivatives. 2 In 2023, thereof gain in relation to modifications of lease contracts of CHF 7.6 million. 2 In 2023, thereof gain in relation to modifications of lease contracts of CHF 7.6 million. 2023 2023 66.6 66.6 103.6 103.6 21.7 21.7 191.9 191.9 2022 2022 41.2 41.2 – – 20.5 20.5 61.7 61.7 2023 2023 2022 2022 54.9 54.9 2.6 2.6 49.3 49.3 106.8 106.8 3.7 3.7 – – (1.0) (1.0) 2.7 2.7 109.5 109.5 28.0 28.0 2.5 2.5 24.7 24.7 55.2 55.2 10.7 10.7 2.6 2.6 – – 13.3 13.3 68.5 68.5 In millions of CHF 2023 2022 13.2 Finance expenses Expenses on financial liabilities Interest expense of which lease interest of which bank interest of which bank commitment fees of which bank guarantees commission expense of which notes interest of which related to other financial liabilities Amortization / write off of arrangement fees Impairment on other financial assets Other finance costs 1,2,3 Interest expense on financial liabilities Expenses on non-financial liabilities Interest expense Interest and other finance expenses Total finance expenses (533.9) (321.0) (91.8) (28.0) (7.1) (84.5) (1.5) (5.4) 0.3 (87.5) (626.5) – – 2023 (121.4) (125.5) 4.2 39.8 47.6 (8.6) 0.6 0.2 (81.6) (284.6) (127.6) (47.8) (12.8) (5.0) (83.6) (7.8) (18.3) (2.6) (45.4) (350.9) – – 2022 (73.1) (79.7) 6.6 (3.1) (23.7) 23.1 (2.5) – (76.2) 1 Thereof CHF 49.1 (2022: 38.8) million losses of interest financial derivatives. 2 In 2023, thereof CHF 15.6 million financing related transaction costs in connection with the closing of the Autogrill transaction (Bridge financing). 3 In 2023, thereof CHF 13.3 million net loss relating to the revaluation of financial investments. (626.5) (350.9) 14. Income taxes Income tax recognized in the consolidated statement of profit or loss In millions of CHF Current Income tax income / (expense) of which corresponding to the current period of which adjustments recognized in relation to prior years Deferred Income tax income / (expense) of which related to the origination or reversal of temporary differences of which adjustments recognized in relation to prior years of which relates to foreign exchange movements 1 of which adjustments due to change in tax rates Total 12. Other income 12. Other income In millions of CHF In millions of CHF Selling Income Selling Income Airport services income 1 Airport services income 1 Other operational income 2 Other operational income 2 Other income Other income 1 1 Services provided in airline lounges. Related costs are recognized in the corresponding expense line items. Services provided in airline lounges. Related costs are recognized in the corresponding expense line items. 2 In 2023, other operating income includes government support of CHF 7.0 (2022: 10.0) million. 2 In 2023, other operating income includes government support of CHF 7.0 (2022: 10.0) million. 13. Finance income and finance expenses 13. Finance income and finance expenses 13.1 Finance income 13.1 Finance income In millions of CHF In millions of CHF Income on financial assets Income on financial assets Interest income on current deposits Interest income on current deposits Interest income on 3rd party loans Interest income on 3rd party loans Other finance income 1,2 Other finance income 1,2 Interest income on financial assets Interest income on financial assets Income from financial investments and associates Income from financial investments and associates Share of result in associates Share of result in associates Gain on disposal of financial investments Gain on disposal of financial investments Gain / (loss) on revaluation of financial investments Gain / (loss) on revaluation of financial investments Income from financial investments and associates Income from financial investments and associates Total finance income Total finance income 1 1 In 2023, thereof CHF 36.8 million gains of interest financial derivatives. In 2023, thereof CHF 36.8 million gains of interest financial derivatives. 2 In 2023, thereof gain in relation to modifications of lease contracts of CHF 7.6 million. 2 In 2023, thereof gain in relation to modifications of lease contracts of CHF 7.6 million. 2023 2023 66.6 66.6 103.6 103.6 21.7 21.7 191.9 191.9 54.9 54.9 2.6 2.6 49.3 49.3 106.8 106.8 3.7 3.7 – – (1.0) (1.0) 2.7 2.7 109.5 109.5 2022 2022 41.2 41.2 – – 20.5 20.5 61.7 61.7 28.0 28.0 2.5 2.5 24.7 24.7 55.2 55.2 10.7 10.7 2.6 2.6 – – 13.3 13.3 68.5 68.5 2023 2023 2022 2022 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 193/336 13.2 Finance expenses In millions of CHF 2023 2022 Expenses on financial liabilities Interest expense of which lease interest of which bank interest of which bank commitment fees of which bank guarantees commission expense of which notes interest of which related to other financial liabilities Amortization / write off of arrangement fees Impairment on other financial assets Other finance costs 1,2,3 Interest expense on financial liabilities Expenses on non-financial liabilities Interest expense Interest and other finance expenses Total finance expenses 1 Thereof CHF 49.1 (2022: 38.8) million losses of interest financial derivatives. 2 In 2023, thereof CHF 15.6 million financing related transaction costs in connection with the closing of the Autogrill transaction (Bridge financing). 3 In 2023, thereof CHF 13.3 million net loss relating to the revaluation of financial investments. 14. Income taxes Income tax recognized in the consolidated statement of profit or loss In millions of CHF Current Income tax income / (expense) of which corresponding to the current period of which adjustments recognized in relation to prior years Deferred Income tax income / (expense) of which related to the origination or reversal of temporary differences of which adjustments recognized in relation to prior years of which relates to foreign exchange movements 1 of which adjustments due to change in tax rates Total (533.9) (321.0) (91.8) (28.0) (7.1) (84.5) (1.5) (5.4) 0.3 (87.5) (626.5) – – (284.6) (127.6) (47.8) (12.8) (5.0) (83.6) (7.8) (18.3) (2.6) (45.4) (350.9) – – (626.5) (350.9) 2023 (121.4) (125.5) 4.2 39.8 47.6 (8.6) 0.6 0.2 (81.6) 2022 (73.1) (79.7) 6.6 (3.1) (23.7) 23.1 (2.5) – (76.2) Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 194/336 Income tax reconciliation In millions of CHF Consolidated profit / (loss) before taxes Expected tax rate in % Income tax at the expected rate Effect of Income not subject to income tax Different tax rates for subsidiaries in other jurisdictions Effect of changes in tax rates on previously recognized deferred tax assets and liabilities Non-deductible expenses Permanent differences Losses of the year for which no deferred tax asset is recognized Net change of recognition of temporary differences and tax credits Non recoverable withholding taxes Income taxes in non-controlling interest holders Adjustments recognized in relation to prior year Foreign exchange movements on deferred tax balances 1 Other items Total 2023 298.0 22.8% (67.8) 3.8 25.3 (0.2) (11.9) (5.0) (30.2) (7.2) (15.2) 25.9 (4.4) 0.6 4.7 (81.6) 2022 196.8 21.8% (43.0) 3.6 (0.8) – (7.1) (5.7) (52.5) (0.4) (10.1) 14.0 29.7 (2.5) (1.4) (76.2) 1 In countries where Avolta pays taxes in a currency other than the functional currency, deferred tax assets and liabili- ties are impacted by foreign exchange fluctuations between the functional and local currencies. These changes are included in the Group's tax expense line. The expected tax rate in % approximates the average income tax rate of the countries where the Group is active, weighted by the profitability of the respective operations adjusted for impairments. For 2023, there were no major changes in tax rates noted for countries in which Avolta is operating. Deferred income tax recognized in other comprehensive income or in equity In millions of CHF 2023 2022 Recognized in other comprehensive income Actuarial gains / (losses) on defined benefit plans Total Recognized in equity Tax effect on share-based payments Total 0.1 0.1 – – 4.1 4.1 – – 15. Components of other comprehensive income benefit reserve Translation reserves Retained earnings Total Total equity Non-controlling interests Attributable to equity holders of the parent 2023 In millions of CHF Remeasurement of post- employment benefits plans Income tax effect Subtotal Exchange differences on translating foreign operations Subtotal Net gain / (loss) on hedge of net investment in foreign operations (note 28.1) Income tax effect Subtotal Share of other comprehensive income of associates Subtotal 2022 In millions of CHF Remeasurement of post- employment benefits plans Income tax effect Subtotal Exchange differences on translating foreign operations Subtotal Net gain / (loss) on hedge of net investment in foreign operations (note 28.1) Income tax effect Subtotal Share of other comprehensive income of associates Subtotal Employee 11.2 (0.1) 11.1 Employee (37.8) 4.1 (33.7) – – – – – – – – – – – – – – (241.8) (241.8) 14.3 14.3 – – – – – – – – – (89.4) (89.4) (3.6) – (3.6) 0.5 0.5 11.2 (0.1) 11.1 (241.8) (241.8) 14.3 14.3 – – – (37.8) 4.1 (33.7) (89.4) (89.4) (3.6) – (3.6) 0.5 0.5 – – – – – – – – – – – – – – – – – – – – – – (19.7) (19.7) (261.5) (261.5) – – – – – – – – – – – – – 0.2 – 0.2 (2.2) (2.2) 11.2 (0.1) 11.1 14.3 14.3 – – – (37.6) 4.1 (33.5) (91.6) (91.6) (3.6) – (3.6) 0.5 0.5 Other comprehensive income 11.1 (227.5) (216.4) (19.7) (236.1) benefit reserve Translation reserves Retained earnings Total Total equity Non-controlling interests Attributable to equity holders of the parent Other comprehensive income (33.7) (92.5) (126.2) (2.0) (128.2) Income tax reconciliation In millions of CHF Consolidated profit / (loss) before taxes Expected tax rate in % Income tax at the expected rate Effect of Income not subject to income tax Different tax rates for subsidiaries in other jurisdictions Effect of changes in tax rates on previously recognized deferred tax assets and liabilities Non-deductible expenses Permanent differences Losses of the year for which no deferred tax asset is recognized Net change of recognition of temporary differences and tax credits Non recoverable withholding taxes Income taxes in non-controlling interest holders Adjustments recognized in relation to prior year Foreign exchange movements on deferred tax balances 1 Other items Total 1 In countries where Avolta pays taxes in a currency other than the functional currency, deferred tax assets and liabili- ties are impacted by foreign exchange fluctuations between the functional and local currencies. These changes are included in the Group's tax expense line. The expected tax rate in % approximates the average income tax rate of the countries where the Group is active, weighted by the profitability of the respective operations adjusted for impairments. For 2023, there were no major changes in tax rates noted for countries in which Avolta is operating. Deferred income tax recognized in other comprehensive income or in equity In millions of CHF 2023 2022 Recognized in other comprehensive income Actuarial gains / (losses) on defined benefit plans Total Total Recognized in equity Tax effect on share-based payments 2023 298.0 22.8% (67.8) 3.8 25.3 (0.2) (11.9) (5.0) (30.2) (7.2) (15.2) 25.9 (4.4) 0.6 4.7 (81.6) 0.1 0.1 – – 2022 196.8 21.8% (43.0) (52.5) 3.6 (0.8) – (7.1) (5.7) (0.4) (10.1) 14.0 29.7 (2.5) (1.4) (76.2) 4.1 4.1 – – Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 195/336 15. Components of other comprehensive income 2023 In millions of CHF Employee benefit reserve Translation reserves Retained earnings Total Non-controlling interests Total equity Attributable to equity holders of the parent Remeasurement of post- employment benefits plans Income tax effect Subtotal Exchange differences on translating foreign operations Subtotal Net gain / (loss) on hedge of net investment in foreign operations (note 28.1) Income tax effect Subtotal Share of other comprehensive income of associates Subtotal 11.2 (0.1) 11.1 – – – – – – – – – – (241.8) (241.8) 14.3 – 14.3 – – Other comprehensive income 11.1 (227.5) – – – – – – – – – – – 11.2 (0.1) 11.1 (241.8) (241.8) 14.3 – 14.3 – – – – – 11.2 (0.1) 11.1 (19.7) (19.7) (261.5) (261.5) – – – – – 14.3 – 14.3 – – (216.4) (19.7) (236.1) 2022 In millions of CHF Employee benefit reserve Translation reserves Retained earnings Total Non-controlling interests Total equity Attributable to equity holders of the parent Remeasurement of post- employment benefits plans Income tax effect Subtotal Exchange differences on translating foreign operations Subtotal Net gain / (loss) on hedge of net investment in foreign operations (note 28.1) Income tax effect Subtotal Share of other comprehensive income of associates Subtotal (37.8) 4.1 (33.7) – – – – – – – – – – (89.4) (89.4) (3.6) – (3.6) 0.5 0.5 Other comprehensive income (33.7) (92.5) – – – – – – – – – – – (37.8) 4.1 (33.7) (89.4) (89.4) (3.6) – (3.6) 0.5 0.5 0.2 – 0.2 (2.2) (2.2) – – – – – (37.6) 4.1 (33.5) (91.6) (91.6) (3.6) – (3.6) 0.5 0.5 (126.2) (2.0) (128.2) Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 196/336 16. Property, plant and equipment 2023 In millions of CHF At cost Balance at January 1 Business combinations Decrease in scope of consolidation Additions Disposals Reclassification within classes Currency translation adjustments Balance at December 31 Accumulated depreciation Balance at January 1 Decrease in scope of consolidation Additions (note 10) Disposals Reclassification within classes Currency translation adjustments Balance at December 31 Impairment Balance at January 1 Decrease in scope of consolidation Impairment (note 10) Reversal of impairment (note 10) Disposals Reclassification within classes Currency translation adjustments Balance at December 31 Carrying amount At December 31, 2023 Leasehold improvements Buildings Furniture fixtures Computer hardware Vehicles Work in progress Total Leasehold improvements Buildings Furniture fixtures Computer hardware Vehicles Work in progress Total 608.8 430.9 (3.4) 71.1 (217.1) 96.3 (163.1) 823.5 13.7 49.7 – 1.4 – 1.5 (4.6) 61.7 536.6 206.4 (0.1) 62.2 (1.8) 96.8 (108.9) 791.2 59.4 – (0.3) 8.5 (5.2) 4.2 (7.6) 59.0 (388.8) (8.9) (407.5) (42.7) 3.3 (148.2) 166.9 29.1 110.5 (227.2) – (2.5) 9.0 (9.0) 1.8 (9.6) 0.1 (114.8) 1.8 (24.2) 85.9 0.3 (11.7) 5.1 4.0 6.0 6.6 0.5 – 1.4 (2.1) 1.1 (1.2) 6.3 (5.3) – (1.3) 2.1 0.1 1.0 69.9 97.7 – 256.1 (3.4) (199.9) (15.8) 204.6 1,295.0 785.2 (3.8) 400.7 (229.6) – (301.2) 1,946.3 – – – – – (853.2) 3.7 (278.5) 184.9 – – 205.2 – (737.9) (458.7) (39.0) (3.4) (81.0) (2.6) (38.5) (2.3) (0.1) (3.0) (127.5) – (5.3) 4.6 37.3 (8.2) 9.2 – – – – 0.1 0.1 – (0.4) 2.1 – 7.5 2.2 – – 0.1 – 0.6 0.2 – – – – – – – – – – 0.1 0.3 – (5.7) 6.8 37.3 0.1 12.0 (43.4) (2.4) (27.1) (1.4) (0.1) (2.6) (77.0) 552.9 49.7 305.4 18.6 2.8 202.0 1,131.4 2022 In millions of CHF At cost Balance at January 1 Increase in scope of consolidation Decrease in scope of consolidation Additions Disposals Reclassification within classes Reclassification to Intangible Currency translation adjustments Balance at December 31 Accumulated depreciation Balance at January 1 Decrease in scope of consolidation Additions (note 10) Disposals Reclassification within classes Currency translation adjustments Balance at December 31 Impairment Balance at January 1 Decrease in scope of consolidation Impairment (note 10) Reversal of impairment (note 10) Disposals Reclassification within classes Currency translation adjustments Balance at December 31 580.8 15.2 530.9 6.7 50.0 1,236.9 (349.7) (8.5) (379.4) (35.8) (5.1) (0.2) (48.5) – – – – – (1.1) (0.4) 13.7 – – (0.3) 0.1 (8.9) – – – 1.1 – 0.2 (2.6) 0.8 (0.6) 14.7 (9.5) 16.0 – (15.7) 536.6 0.2 9.3 (0.9) 11.8 0.3 (1.0) – – (3.2) 0.3 53.3 – (0.1) 6.1 (2.4) 1.7 – 0.8 59.4 0.1 (8.3) 2.3 (0.1) (0.9) (1.8) 0.1 – – – – (0.6) – (0.5) 25.3 (12.1) 20.1 – (4.8) 608.8 0.1 (55.0) 11.4 1.3 3.1 (388.8) 0.4 (0.4) – 0.2 4.9 0.1 (81.0) 139.0 (407.5) (42.7) (5.3) (86.2) (3.9) (34.9) (0.1) (2.4) (129.3) 0.6 (0.6) (0.1) 6.6 (0.7) 0.5 – – – – – – – – – – – – – 2023 (19.8) (400.7) 77.1 (66.5) 0.2 5.3 (404.4) – (0.2) 61.1 (2.5) (37.8) (0.5) (0.2) 69.9 – – – – – – – 0.2 – 0.2 (1.1) 0.1 – 0.8 (1.4) 107.8 (28.2) – (0.5) (20.4) 1,295.0 (778.5) 0.4 (112.7) 23.5 – 14.1 (853.2) 1.0 (1.4) 0.2 1.3 – 0.7 2022 (9.3) (107.8) 19.8 – – (0.1) (97.4) At December 31, 2022 2.2 90.6 14.4 1.2 66.9 314.3 (38.5) (2.3) (0.1) (3.0) (127.5) Cash flow used for purchase of property, plant and equipment In millions of CHF Payables for capital expenditure at the beginning of the period Additions of property, plant and equipment Payables for capital expenditure at the end of the period Payables for capital expenditure acquired through business combination Other Currency translation adjustments Total Cash Flow Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 197/336 16. Property, plant and equipment 2023 In millions of CHF At cost Balance at January 1 Business combinations Decrease in scope of consolidation Additions Disposals Reclassification within classes Currency translation adjustments Balance at December 31 Accumulated depreciation Balance at January 1 Decrease in scope of consolidation Additions (note 10) Disposals Reclassification within classes Currency translation adjustments Balance at December 31 Impairment Balance at January 1 Decrease in scope of consolidation Impairment (note 10) Reversal of impairment (note 10) Disposals Reclassification within classes Currency translation adjustments Balance at December 31 Carrying amount At December 31, 2023 Leasehold improvements Buildings Furniture fixtures Computer hardware Vehicles Work in progress Total (388.8) (8.9) (407.5) (42.7) 608.8 430.9 (3.4) 71.1 (217.1) 96.3 (163.1) 823.5 3.3 (148.2) 166.9 29.1 110.5 (227.2) – (5.3) 4.6 37.3 (8.2) 9.2 13.7 49.7 1.4 – – 1.5 (4.6) 61.7 – (2.5) 9.0 (9.0) 1.8 (9.6) – – – – 0.1 0.1 536.6 206.4 (0.1) 62.2 (1.8) 96.8 (108.9) 791.2 (114.8) 0.1 1.8 (24.2) 85.9 – (0.4) 2.1 – 7.5 2.2 59.4 – (0.3) 8.5 (5.2) 4.2 (7.6) 59.0 0.3 (11.7) 5.1 4.0 6.0 – – – 0.1 0.6 0.2 6.6 0.5 – 1.4 (2.1) 1.1 (1.2) 6.3 (5.3) – (1.3) 2.1 0.1 1.0 69.9 97.7 – 256.1 (3.4) (199.9) (15.8) 204.6 1,295.0 785.2 (3.8) 400.7 (229.6) – (301.2) 1,946.3 – 3.7 (853.2) (278.5) – 184.9 – – 205.2 (737.9) – – – – – – – – – – – – – (5.7) 6.8 37.3 0.1 12.0 – – 0.1 0.3 (81.0) (2.6) (38.5) (2.3) (0.1) (3.0) (127.5) (458.7) (39.0) (3.4) (43.4) (2.4) (27.1) (1.4) (0.1) (2.6) (77.0) 552.9 49.7 305.4 18.6 2.8 202.0 1,131.4 2022 In millions of CHF At cost Balance at January 1 Increase in scope of consolidation Decrease in scope of consolidation Additions Disposals Reclassification within classes Reclassification to Intangible Currency translation adjustments Balance at December 31 Accumulated depreciation Balance at January 1 Decrease in scope of consolidation Additions (note 10) Disposals Reclassification within classes Currency translation adjustments Balance at December 31 Impairment Balance at January 1 Decrease in scope of consolidation Impairment (note 10) Reversal of impairment (note 10) Disposals Reclassification within classes Currency translation adjustments Balance at December 31 At December 31, 2022 Leasehold improvements Buildings Furniture fixtures Computer hardware Vehicles Work in progress Total 580.8 15.2 530.9 – (0.5) 25.3 (12.1) 20.1 – (4.8) 608.8 – – – (1.1) – – (0.4) 13.7 0.8 (0.6) 14.7 (9.5) 16.0 – (15.7) 536.6 53.3 – (0.1) 6.1 (2.4) 1.7 – 0.8 59.4 (349.7) (8.5) (379.4) (35.8) – 0.2 (0.2) (48.5) – (0.3) 0.1 (8.9) 9.3 (0.9) 11.8 0.1 (8.3) 2.3 (0.1) (0.9) (407.5) (42.7) (5.3) 6.7 – – 0.6 (0.6) – – (0.1) 6.6 (5.1) – (0.7) 0.5 – – 50.0 1,236.9 – (0.2) 61.1 (2.5) (37.8) (0.5) (0.2) 69.9 – – – – – – – 0.8 (1.4) 107.8 (28.2) – (0.5) (20.4) 1,295.0 (778.5) 0.4 (112.7) 23.5 – 14.1 (853.2) (86.2) (3.9) (34.9) – – – 1.1 – 0.2 (2.6) 0.3 (1.0) – – (3.2) 0.3 (38.5) (1.8) 0.1 – – – (0.6) – (2.3) (0.1) (2.4) (129.3) – – – – – – 0.2 – 0.2 – (1.1) 0.1 1.0 (1.4) 0.2 1.3 – 0.7 (0.1) (3.0) (127.5) 2.2 90.6 14.4 1.2 66.9 314.3 0.1 (55.0) 11.4 1.3 3.1 (388.8) 0.4 (0.4) – 0.2 4.9 0.1 (81.0) 139.0 Cash flow used for purchase of property, plant and equipment In millions of CHF Payables for capital expenditure at the beginning of the period Additions of property, plant and equipment Payables for capital expenditure at the end of the period Payables for capital expenditure acquired through business combination Other Currency translation adjustments Total Cash Flow 2023 (19.8) (400.7) 77.1 (66.5) 0.2 5.3 (404.4) 2022 (9.3) (107.8) 19.8 – – (0.1) (97.4) Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 198/336 17. Right-of-use assets 2023 In millions of CHF At cost Balance at January 1 Business combinations Decrease in scope of consolidation Additions 1 Disposals 2 Lease modifications 3 Currency translation adjustments Balance at December 31 Accumulated depreciation Balance at January 1 Decrease in scope of consolidation Additions (note 10) Disposals 2 Lease modifications 3 Currency translation adjustments Balance at December 31 Impairment Balance at January 1 Impairment (note 10) Reversal of impairment (note 10) Disposals 2 Currency translation adjustments Balance at December 31 Carrying amount At December 31, 2023 1 New contracts. 2 Ending of lease contracts. Shops Other Buildings Vehicles Other Total Shops Other Buildings Vehicles Other Total 5,766.9 1,281.4 (1.2) 160.3 (144.6) 4,645.3 (612.4) 11,095.7 (3,014.9) 1.1 (1,051.4) 126.7 (0.1) 230.4 245.7 33.5 (0.7) 13.8 (22.1) 8.5 (19.8) 258.9 (106.8) 0.6 (33.6) 15.4 1.6 8.5 (3,708.2) (114.3) (320.7) (15.3) 14.0 4.0 23.2 (294.8) (6.3) – – – 0.4 (5.9) 6.9 1.6 – 2.4 (0.5) 0.1 (0.6) 9.9 (4.2) – (2.4) 0.5 – 0.4 (5.7) – – – – – – 2.6 0.6 – 0.5 (0.3) 0.1 (0.2) 3.3 (1.4) – (0.9) 0.3 – 0.1 (1.9) – – – – – – 6,022.1 1,317.1 (1.9) 177.0 (167.5) 4,654.0 (633.0) 11,367.8 (3,127.3) 1.7 (1,088.3) 142.9 1.5 239.4 (3,830.1) (327.0) (15.3) 14.0 4.0 23.6 (300.7) 7,092.7 138.7 4.2 1.4 7,237.0 3 Relates to contractual lease term change of existing Right-of-use assets in relation to duration, scope and commercial terms. The increase in 2023 predominantly relates to the retention of all relevant travel retail business concessions in Spain. Avolta won all bids it had tendered for, being Andalusia-Mediterranean, the Balearic Islands, the Canary Islands, Catalonia and Madrid. The contracts have a duration of twelve years, include 21 airports and 120 outlets covering around 60,000 m2. 2022 In millions of CHF At cost Balance at January 1 Additions 1 Disposals 2 Decrease in scope of consolidation Lease modifications 3 Reclassification within classes Currency translation adjustments Balance at December 31 Accumulated depreciation Balance at January 1 Decrease in scope of consolidation Additions (note 10) Disposals 2 Lease modifications 3 Reclassification within classes Currency translation adjustments Balance at December 31 Impairment Balance at January 1 Business combination Impairment (note 10) Reversal of impairment (note 10) Disposals 2 Lease modifications 3 Reclassification within classes Currency translation adjustments Balance at December 31 Carrying amount At December 31, 2022 1 New contracts. 2 Ending of lease contracts. 3 Relates to contractual lease term changes. 5,872.7 (0.6) 50.9 (147.0) 152.7 (0.3) (161.5) 5,766.9 (2,528.7) 0.1 (787.4) 135.3 75.3 1.7 88.8 (376.5) 0.5 (15.0) 48.7 4.7 7.5 0.3 9.1 (320.7) 240.0 (0.4) 10.5 (7.0) 6.6 0.3 (4.3) 245.7 (84.9) 0.1 (29.4) 6.4 (0.1) (1.8) 2.9 (6.5) 0.3 – – – – (0.3) 0.2 (6.3) 8.2 – 0.4 (1.5) 0.3 – (0.5) 6.9 (4.2) (1.6) 1.3 0.3 (4.2) – – – – – – – – – – – – 2.1 – 0.9 (0.4) 0.1 – (0.1) 2.6 (1.4) – (0.5) 0.4 0.1 – – – – – – – – – – – 6,123.0 (1.0) 62.7 (155.9) 159.7 – (166.4) 6,022.1 (2,619.2) 0.2 (818.9) 143.4 75.2 – 92.0 (383.0) 0.8 (15.0) 48.7 4.7 7.5 – 9.3 (327.0) (3,014.9) (106.8) (1.4) (3,127.3) 2,431.3 132.6 2.7 1.2 2,567.8 17. Right-of-use assets 2023 In millions of CHF At cost Balance at January 1 Business combinations Decrease in scope of consolidation Additions 1 Disposals 2 Lease modifications 3 Currency translation adjustments Balance at December 31 Accumulated depreciation Balance at January 1 Decrease in scope of consolidation Additions (note 10) Disposals 2 Lease modifications 3 Currency translation adjustments Balance at December 31 Impairment Balance at January 1 Impairment (note 10) Reversal of impairment (note 10) Disposals 2 Currency translation adjustments Balance at December 31 Carrying amount At December 31, 2023 1 New contracts. 2 Ending of lease contracts. Shops Other Buildings Vehicles Other Total 5,766.9 1,281.4 (1.2) 160.3 (144.6) 4,645.3 (612.4) 11,095.7 (3,014.9) 1.1 (1,051.4) 126.7 (0.1) 230.4 (320.7) (15.3) 14.0 4.0 23.2 (294.8) 245.7 33.5 (0.7) 13.8 (22.1) 8.5 (19.8) 258.9 (106.8) 0.6 (33.6) 15.4 1.6 8.5 (6.3) – – – 0.4 (5.9) (3,708.2) (114.3) 6.9 1.6 – 2.4 (0.5) 0.1 (0.6) 9.9 (4.2) – (2.4) 0.5 – 0.4 (5.7) – – – – – – 2.6 0.6 – 0.5 (0.3) 0.1 (0.2) 3.3 (1.4) – (0.9) 0.3 – 0.1 (1.9) – – – – – – 6,022.1 1,317.1 (1.9) 177.0 (167.5) 4,654.0 (633.0) 11,367.8 (3,127.3) 1.7 (1,088.3) 142.9 1.5 239.4 (3,830.1) (327.0) (15.3) 14.0 4.0 23.6 (300.7) 7,092.7 138.7 4.2 1.4 7,237.0 3 Relates to contractual lease term change of existing Right-of-use assets in relation to duration, scope and commercial terms. The increase in 2023 predominantly relates to the retention of all relevant travel retail business concessions in Spain. Avolta won all bids it had tendered for, being Andalusia-Mediterranean, the Balearic Islands, the Canary Islands, Catalonia and Madrid. The contracts have a duration of twelve years, include 21 airports and 120 outlets covering around 60,000 m2. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 199/336 2022 In millions of CHF At cost Balance at January 1 Decrease in scope of consolidation Additions 1 Disposals 2 Lease modifications 3 Reclassification within classes Currency translation adjustments Balance at December 31 Accumulated depreciation Balance at January 1 Decrease in scope of consolidation Additions (note 10) Disposals 2 Lease modifications 3 Reclassification within classes Currency translation adjustments Balance at December 31 Impairment Balance at January 1 Business combination Impairment (note 10) Reversal of impairment (note 10) Disposals 2 Lease modifications 3 Reclassification within classes Currency translation adjustments Balance at December 31 Carrying amount At December 31, 2022 1 New contracts. 2 Ending of lease contracts. 3 Relates to contractual lease term changes. Shops Other Buildings Vehicles Other Total 5,872.7 (0.6) 50.9 (147.0) 152.7 (0.3) (161.5) 5,766.9 (2,528.7) 0.1 (787.4) 135.3 75.3 1.7 88.8 240.0 (0.4) 10.5 (7.0) 6.6 0.3 (4.3) 245.7 (84.9) 0.1 (29.4) 6.4 (0.1) (1.8) 2.9 (3,014.9) (106.8) (376.5) 0.5 (15.0) 48.7 4.7 7.5 0.3 9.1 (320.7) (6.5) 0.3 – – – – (0.3) 0.2 (6.3) 8.2 – 0.4 (1.5) 0.3 – (0.5) 6.9 (4.2) – (1.6) 1.3 – – 0.3 (4.2) – – – – – – – – – 2.1 – 0.9 (0.4) 0.1 – (0.1) 2.6 (1.4) – (0.5) 0.4 – 0.1 – 6,123.0 (1.0) 62.7 (155.9) 159.7 – (166.4) 6,022.1 (2,619.2) 0.2 (818.9) 143.4 75.2 – 92.0 (1.4) (3,127.3) – – – – – – – – – (383.0) 0.8 (15.0) 48.7 4.7 7.5 – 9.3 (327.0) 2,431.3 132.6 2.7 1.2 2,567.8 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 200/336 18. Intangible assets and goodwill Concession rights Concession rights Plain Brands Others 1 Total Goodwill Plain Brands Others 1 Total Goodwill 2023 In millions of CHF At cost Balance at January 1 Business combinations Decrease in scope of consolidation Additions Disposals Reclassification within classes Currency translation adjustments Balance at December 31 Accumulated amortization Balance at January 1 Decrease in scope of consolidation Additions (note 10) Disposals Reclassification within classes Currency translation adjustments Acquisition Related 4,357.8 860.5 – – (73.7) (4.2) (370.3) 4,770.1 (2,344.1) – (239.7) 33.9 (0.3) 195.4 84.7 – – – (5.4) 2.6 (6.3) 75.6 (51.2) – (4.3) 5.2 0.1 5.3 262.0 113.0 – – – – (15.6) 359.4 (3.3) – – – – 0.1 (3.2) 256.1 36.4 (0.4) 36.7 (17.9) 1.6 (26.1) 286.4 (197.7) 0.4 (28.6) 16.4 0.2 20.2 4,960.6 1,009.9 (0.4) 36.7 (97.0) – (418.3) 5,491.5 (2,596.3) 0.4 (272.6) 55.5 – 221.0 (189.1) (2,592.0) 2,390.2 890.2 – – – – (197.3) 3,083.1 – – – – – – – Balance at December 31 (2,354.8) (44.9) Impairment Balance at January 1 Impairment (note 10) Reversal of impairment (note 10) Disposals Reclassification within classes Currency translation adjustments Balance at December 31 Carrying amount (856.3) (20.5) (5.7) – 30.5 40.0 – 57.7 (728.1) – – – – 1.9 (18.6) – – – – 0.5 (5.2) (4.0) (0.7) – 1.5 – (0.1) (3.3) (886.5) (118.0) (0.7) 30.5 41.5 – 60.0 (755.2) – – – – 13.5 (104.5) Balance at December 31, 2023 1,687.2 12.1 351.0 94.0 2,144.3 2,978.6 1 Others mainly contain IT software. Acquisition Related 4,529.7 (25.7) – – (146.2) 4,357.8 (2,272.4) (158.3) 25.7 60.9 (2,344.1) (849.9) (32.9) 17.3 9.2 (856.3) 2022 In millions of CHF Balance at January 1 At cost Additions Disposals Reclassification from property, plant and equipment Currency translation adjustments Balance at December 31 Accumulated amortization Balance at January 1 Additions (note 10) Disposals Currency translation adjustments Balance at December 31 Impairment Balance at January 1 Impairment (note 10) Reversal of impairment (note 10) Currency translation adjustments Balance at December 31 Carrying amount At December 31, 2022 1 Others mainly contain IT software. 266.1 (4.1) 262.0 (3.3) – – – – – – – – (0.1) (5.7) 245.0 15.5 (3.5) 0.5 (1.4) 256.1 (182.5) (20.3) 3.5 1.6 (4.0) – – 5,126.3 15.9 (30.3) 0.5 (151.8) 4,960.6 (2,509.3) (179.9) 30.3 62.6 (879.7) (32.9) 17.3 8.8 (4.0) (886.5) 2,512.8 (122.6) 2,390.2 – – – – – – – – – – (152.8) 34.8 (118.0) (3.3) (197.7) (2,596.3) (20.2) (5.6) 85.5 0.4 (1.0) – (0.2) 84.7 (51.1) (1.3) 1.1 0.1 (51.2) – – (0.3) (20.5) 1,157.4 13.0 253.0 54.4 1,477.8 2,272.2 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 201/336 Concession rights Concession rights 2022 In millions of CHF At cost Balance at January 1 Additions Disposals Reclassification from property, plant and equipment Currency translation adjustments Balance at December 31 Accumulated amortization Balance at January 1 Additions (note 10) Disposals Currency translation adjustments Balance at December 31 Impairment Balance at January 1 Impairment (note 10) Reversal of impairment (note 10) Currency translation adjustments Balance at December 31 Carrying amount At December 31, 2022 1 Others mainly contain IT software. Acquisition Related 4,529.7 – (25.7) – (146.2) 4,357.8 (2,272.4) (158.3) 25.7 60.9 (2,344.1) (849.9) (32.9) 17.3 9.2 (856.3) Plain Brands Others 1 Total Goodwill 85.5 0.4 (1.0) – (0.2) 84.7 (51.1) (1.3) 1.1 0.1 (51.2) (20.2) – – (0.3) (20.5) 266.1 – – – (4.1) 262.0 (3.3) – – – 245.0 15.5 (3.5) 0.5 (1.4) 256.1 (182.5) (20.3) 3.5 1.6 5,126.3 15.9 (30.3) 0.5 (151.8) 4,960.6 (2,509.3) (179.9) 30.3 62.6 (3.3) (197.7) (2,596.3) (5.6) – – (0.1) (5.7) (4.0) – – (879.7) (32.9) 17.3 8.8 (4.0) (886.5) 2,512.8 – – – (122.6) 2,390.2 – – – – – (152.8) – – 34.8 (118.0) 1,157.4 13.0 253.0 54.4 1,477.8 2,272.2 18. Intangible assets and goodwill Acquisition Related 4,357.8 860.5 – – (73.7) (4.2) (370.3) 4,770.1 (2,344.1) – (239.7) 33.9 (0.3) 195.4 30.5 40.0 – – 57.7 (728.1) 2023 In millions of CHF At cost Balance at January 1 Business combinations Decrease in scope of consolidation Additions Disposals Reclassification within classes Currency translation adjustments Balance at December 31 Accumulated amortization Balance at January 1 Decrease in scope of consolidation Additions (note 10) Disposals Reclassification within classes Currency translation adjustments Impairment Balance at January 1 Impairment (note 10) Reversal of impairment (note 10) Disposals Reclassification within classes Currency translation adjustments Balance at December 31 Carrying amount 1 Others mainly contain IT software. Plain Brands Others 1 Total Goodwill 84.7 – – – (5.4) 2.6 (6.3) 75.6 (51.2) – (4.3) 5.2 0.1 5.3 – – – – 1.9 (18.6) 262.0 113.0 (15.6) 359.4 (3.3) 0.1 (3.2) – – – – – – – – – – – – 0.5 (5.2) 256.1 36.4 (0.4) 36.7 (17.9) 1.6 (26.1) 286.4 (197.7) 0.4 (28.6) 16.4 0.2 20.2 (4.0) (0.7) 1.5 – – (0.1) (3.3) 4,960.6 1,009.9 (0.4) 36.7 (97.0) – (418.3) 5,491.5 (2,596.3) 0.4 (272.6) 55.5 – 221.0 (0.7) 30.5 41.5 – 60.0 (755.2) 2,390.2 890.2 (197.3) 3,083.1 – – – – – – – – – – – – – – – 13.5 (104.5) Balance at December 31 (2,354.8) (44.9) (189.1) (2,592.0) (856.3) (20.5) (5.7) (886.5) (118.0) Balance at December 31, 2023 1,687.2 12.1 351.0 94.0 2,144.3 2,978.6 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 202/336 19. Impairment tests of tangible and intangible assets Goodwill and brand names are subject to impairment testing on an annual basis or when indicators of impairment exist. Other tangible and intangible assets, including concession rights, are tested for impairment whenever events or circumstances indi- cate that the carrying amount may not be recoverable. 19.1 Key assumptions used for value-in-use calculations The calculations of value-in-use are most sensitive to the following assumptions: Specific assumptions used for the valuation of goodwill: Sales growth Management based its assumptions on information available at the time of the prepa- ration of the financial statements and assumes that sales will continue to grow in 2024 in line with the international air traffic growth and inflation. Most locations have reached 2019 sales levels in 2023 or will reach in 2024. For the periods after 5 years, Avolta has used growth rates between 2.3 % – 4.0 % (2022: 2.0 % – 3.3 %) to extrapolate the cash flow projections. In its projections, Avolta assumes that the climate change & environ- mental risk has no material impact on future sales levels and the overall recovery of the business. Discount rates The cash flows are discounted using a weighted average cost of capital (“WACC”) rate composed among other factors of: (a) a risk free interest rates derived from actual governmental bonds rates: CHF:  up to 1.02 %, EUR: up to 3.37 %, USD: up to  4.83 % (2022: up to CHF  1.50 %, up to EUR 1.97 %, up to USD 3.89 %), (b) a credit spread of 1.30 % – 3.40 % (2022: 2.00 % – 4.70 %) , (c) a re-levered beta of 1.19 (2022: 1.07), and (d) an equity-risk premium used in 2023 is up to 5.50 % – 6.00 % (2022: 6.25 %). Certain WACC components, like country premium or default country risk, have been weighted for each segment. 19.2 Impairment test of goodwill Goodwill is recognized from the acquisition of businesses by the Group and has been assigned for the purpose of impairment testing to the groups of cash-generating units (GCGU). These groups reflect the reportable segments expected to benefit from the synergies related to acquisitions. In millions of CHF Europe, Middle East and Africa (EMEA) North America Latin America (LATAM) Asia Pacific (APAC) Global Distribution Centers Total carrying amount of goodwill 1 Refer to Note 5 for details on implementation of the new segment structure. 31.12.2023 31.12.2022 1 1,578.6 872.9 455.7 33.3 38.1 2,978.6 1,434.3 513.9 251.8 34.4 37.8 2,272.2 The recoverable amount of each group of cash-generating units (GCGU) is determined based on value-in-use calculations, which require the use of assumptions (see specific assumptions in next table) and future cash flows. These cash flows reflect projections of financial forecasts approved by the management covering a five-year period and a residual value for the years beyond the five-year period. This residual value is an extrap- olation of the 5th year cash flow using a constant terminal growth rate that does not exceed the long-term average growth rate for the respective market. This growth rate is consistent with the growth forecasts disclosed by the travel retail industry. The cash flows used include operational results generated by Global Distribution Centers in rela- tion to the respective GCGU. Group of cash generating units in percentage (%) Europe, Middle East and Africa (EMEA) North America Latin America (LATAM) Asia Pacific (APAC) Post tax discount rates Pre-tax discount rates CAGR 1 for net sales Long term growth rate 2023 2022 2 2023 2022 2 2023 2022 2 2023 2022 2 6.63% 5.73% 5.66% 6.41% 6.89% 6.21% 6.44% 6.34% 8.56% 7.77% 8.02% 8.15% 8.92% 8.28% 8.57% 8.52% 3.42% 4.27% 0.48% 7.43% 4.72% 5.25% 4.96% 19.43% 2.28% 2.54% 2.41% 3.10% 2.50% 2.70% 2.70% 2.50% 1 Compound Annual Growth Rate. 2 Refer to Note 5 for details on implementation of the new segment structure. Sensitivity analysis to changes in assumptions At closing, the estimated recoverable amount of goodwill of each Group’s segments exceeded their carrying amounts. However, if the key assumptions used in the impair- ment tests would deteriorate to a possible reasonable value, as indicated in the fol- lowing table, this change would, in isolation, lead to an additional impairment loss for the year of: Group of cash generating units in percentage (%) Europe, Middle East and Africa (EMEA) North America Latin America (LATAM) Asia Pacific (APAC) Discount rate Sales growth drop 1 2023 +2 % – – – – 2022 2 +2 % – – – – 2023 -3 % – – – – 2022 2 -3 % – – – – 1 The reasonable drop in sales or margin (in percentage of sales) has been considered in each year within the impair- ment test. 2 Refer to Note 5 for details on implementation of the new segment structure. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 203/336 The recoverable amount of each group of cash-generating units (GCGU) is determined based on value-in-use calculations, which require the use of assumptions (see specific assumptions in next table) and future cash flows. These cash flows reflect projections of financial forecasts approved by the management covering a five-year period and a residual value for the years beyond the five-year period. This residual value is an extrap- olation of the 5th year cash flow using a constant terminal growth rate that does not exceed the long-term average growth rate for the respective market. This growth rate is consistent with the growth forecasts disclosed by the travel retail industry. The cash flows used include operational results generated by Global Distribution Centers in rela- tion to the respective GCGU. The calculations of value-in-use are most sensitive to the following assumptions: Specific assumptions used for the valuation of goodwill: Group of cash generating units in percentage (%) Europe, Middle East and Africa (EMEA) North America Latin America (LATAM) Asia Pacific (APAC) Post tax discount rates Pre-tax discount rates CAGR 1 for net sales Long term growth rate 2023 2022 2 2023 2022 2 2023 2022 2 2023 2022 2 6.63% 5.73% 5.66% 6.41% 6.89% 6.21% 6.44% 6.34% 8.56% 7.77% 8.02% 8.15% 8.92% 8.28% 8.57% 8.52% 3.42% 4.27% 0.48% 7.43% 4.72% 5.25% 4.96% 19.43% 2.28% 2.54% 2.41% 3.10% 2.50% 2.70% 2.70% 2.50% 1 Compound Annual Growth Rate. 2 Refer to Note 5 for details on implementation of the new segment structure. Sensitivity analysis to changes in assumptions At closing, the estimated recoverable amount of goodwill of each Group’s segments exceeded their carrying amounts. However, if the key assumptions used in the impair- ment tests would deteriorate to a possible reasonable value, as indicated in the fol- lowing table, this change would, in isolation, lead to an additional impairment loss for the year of: Group of cash generating units in percentage (%) Europe, Middle East and Africa (EMEA) North America Latin America (LATAM) Asia Pacific (APAC) Discount rate Sales growth drop 1 2023 +2 % – – – – 2022 2 +2 % – – – – 2023 -3 % – – – – 2022 2 -3 % – – – – 1 The reasonable drop in sales or margin (in percentage of sales) has been considered in each year within the impair- ment test. 2 Refer to Note 5 for details on implementation of the new segment structure. 19. Impairment tests of tangible and intangible assets Goodwill and brand names are subject to impairment testing on an annual basis or when indicators of impairment exist. Other tangible and intangible assets, including concession rights, are tested for impairment whenever events or circumstances indi- cate that the carrying amount may not be recoverable. 19.1 Key assumptions used for value-in-use calculations Sales growth Management based its assumptions on information available at the time of the prepa- ration of the financial statements and assumes that sales will continue to grow in 2024 in line with the international air traffic growth and inflation. Most locations have reached 2019 sales levels in 2023 or will reach in 2024. For the periods after 5 years, Avolta has used growth rates between 2.3 % – 4.0 % (2022: 2.0 % – 3.3 %) to extrapolate the cash flow projections. In its projections, Avolta assumes that the climate change & environ- mental risk has no material impact on future sales levels and the overall recovery of the business. Discount rates The cash flows are discounted using a weighted average cost of capital (“WACC”) rate composed among other factors of: (a) a risk free interest rates derived from actual governmental bonds rates: CHF:  up to 1.02 %, EUR: up to 3.37 %, USD: up to  4.83 % (2022: up to CHF  1.50 %, up to EUR 1.97 %, up to USD 3.89 %), (b) a credit spread of 1.30 % – 3.40 % (2022: 2.00 % – 4.70 %) , (c) a re-levered beta of 1.19 (2022: 1.07), and (d) an equity-risk premium used in 2023 is up to 5.50 % – 6.00 % (2022: 6.25 %). Certain WACC components, like country premium or default country risk, have been weighted for each segment. 19.2 Impairment test of goodwill Goodwill is recognized from the acquisition of businesses by the Group and has been assigned for the purpose of impairment testing to the groups of cash-generating units (GCGU). These groups reflect the reportable segments expected to benefit from the synergies related to acquisitions. In millions of CHF Europe, Middle East and Africa (EMEA) North America Latin America (LATAM) Asia Pacific (APAC) Global Distribution Centers Total carrying amount of goodwill 1 Refer to Note 5 for details on implementation of the new segment structure. 31.12.2023 31.12.2022 1 1,578.6 872.9 455.7 33.3 38.1 2,978.6 1,434.3 513.9 251.8 34.4 37.8 2,272.2 Group of cash generating units in percentage (%) Europe, Middle East and Africa (EMEA) North America Latin America (LATAM) Asia Pacific (APAC) 1 Refer to Note 5 for details on implementation of the new segment structure. Discount rate Sales growth drop 2023 +1 % (3.6) (2.2) – – 2022 1 +1 % (35.6) (0.3) (17.8) – 2023 -3 % (94.0) (25.4) – – These investments are accounted for using the equity method. Summarized statement of comprehensive income In millions of CHF Net profit / (loss) Other comprehensive income Items to be reclassified to net income in subsequent periods Total comprehensive income 2023 3.7 – 3.7 2022 1 -3 % (79.0) (8.6) (31.1) – 2022 10.7 0.1 10.8 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 204/336 19.3 Impairment test of brand names Avolta’s operations apply several retail and food & beverage concepts which use dif- ferent brand names. The table below indicates the key components used for deter- mining the value-in-use arising during business acquisitions in the past and have been kept at historical values. At closing the estimated recoverable amount of all brand names of the Group exceed their carrying amounts. Management believes that no possible reasonable change in any of the key assumptions would lead to a situation where the recoverable amounts fall below the respective carrying amount. Key assumptions used for the valuation of brand names: Post tax discount rates Growth rates for net sales 20. Investments in associates Brand names in percentage (%) Dufry Hudson News Nuance World Duty Free HMSHost Autogrill 2023 2022 2023 2022 5.75% 5.67% 6.06% 5.68% 5.60% 7.73% 6.78% 8.35% 7.16% 7.52% n / a n / a 2.08% 3.85% 4.14% 2.10% 5.18% 3.95% 4.46% 8.28% 4.96% 2.26% n / a n / a 19.4 Impairment test of tangible and other intangible assets The selection of CGUs for the test has been made based on historical impairments, profitability and materiality of assets. The methodology and assumptions used for these impairment tests are similar to those described for goodwill, except for: (a) The tests were done on CGU level, (b) The period of cash flows is limited to the contractual lease term, ignoring renewal probabilities, (c) The effective tax rate was used as WACC component, (d) For test purposes the carrying amount of the assets was net of linked liabilities, in particular lease obligations, (e) No reliefs of minimal lease payments have been assumed unless contractually agreed by the time of approving these financial statements, (f) The cash flows are reduced for a share of expenses related to corporate assets. The table of note 10 discloses the aggregated impairment expense and reversal of impairment by segment incurred in 2023, whereas note 16, note 17 and note 18 show the cumulated impairment on property, plant and equipment, right-of-use assets and intan- gible assets by type of asset. Sensitivity analysis to changes in assumptions At closing, the estimated recoverable amount of CGU of each Group’s segments exceeded their carrying amounts. However, if the key assumptions used in the impair- ment tests would deteriorate to a possible reasonable value, as indicated in the fol- lowing table, this change would, in isolation, lead to an additional impairment loss for the year of: 19.3 Impairment test of brand names Avolta’s operations apply several retail and food & beverage concepts which use dif- ferent brand names. The table below indicates the key components used for deter- mining the value-in-use arising during business acquisitions in the past and have been kept at historical values. At closing the estimated recoverable amount of all brand names of the Group exceed their carrying amounts. Management believes that no possible reasonable change in any of the key assumptions would lead to a situation where the recoverable amounts fall below the respective carrying amount. Key assumptions used for the valuation of brand names: Brand names in percentage (%) Dufry Hudson News Nuance World Duty Free HMSHost Autogrill 2023 2022 2023 2022 5.75% 5.67% 6.06% 5.68% 5.60% 7.73% 6.78% 8.35% 7.16% 7.52% n / a n / a 2.08% 3.85% 4.14% 2.10% 5.18% 3.95% 4.46% 8.28% 4.96% 2.26% n / a n / a Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 205/336 Discount rate Sales growth drop Group of cash generating units in percentage (%) Europe, Middle East and Africa (EMEA) North America Latin America (LATAM) Asia Pacific (APAC) 2023 +1 % (3.6) – (2.2) – 2022 1 +1 % (35.6) (0.3) (17.8) – 2023 -3 % (94.0) – (25.4) – 1 Refer to Note 5 for details on implementation of the new segment structure. Post tax discount rates Growth rates for net sales 20. Investments in associates These investments are accounted for using the equity method. Summarized statement of comprehensive income In millions of CHF Net profit / (loss) Other comprehensive income Items to be reclassified to net income in subsequent periods Total comprehensive income 2023 3.7 – 3.7 2022 1 -3 % (79.0) (8.6) (31.1) – 2022 10.7 0.1 10.8 19.4 Impairment test of tangible and other intangible assets The selection of CGUs for the test has been made based on historical impairments, profitability and materiality of assets. The methodology and assumptions used for these impairment tests are similar to those described for goodwill, except for: (a) The tests were done on CGU level, (b) The period of cash flows is limited to the contractual lease term, ignoring renewal probabilities, (c) The effective tax rate was used as WACC component, (d) For test purposes the carrying amount of the assets was net of linked liabilities, in particular lease obligations, (e) No reliefs of minimal lease payments have been assumed unless contractually agreed by the time of approving these financial statements, (f) The cash flows are reduced for a share of expenses related to corporate assets. The table of note 10 discloses the aggregated impairment expense and reversal of impairment by segment incurred in 2023, whereas note 16, note 17 and note 18 show the cumulated impairment on property, plant and equipment, right-of-use assets and intan- gible assets by type of asset. Sensitivity analysis to changes in assumptions At closing, the estimated recoverable amount of CGU of each Group’s segments exceeded their carrying amounts. However, if the key assumptions used in the impair- ment tests would deteriorate to a possible reasonable value, as indicated in the fol- lowing table, this change would, in isolation, lead to an additional impairment loss for the year of: Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 206/336 21. Other non-current assets 23. Trade and credit card receivables In millions of CHF Guarantee deposits Loans Lease receivables Prepayment for leases Tax receivables Other Subtotal Allowances Total Movement in allowances In millions of CHF Balance at January 1 Creation Utilized Reclassification Currency translation adjustments Balance at December 31 22. Inventories In millions of CHF Inventories at cost Inventory allowance Total 31.12.2023 31.12.2022 In millions of CHF 31.12.2023 31.12.2022 1 Includes trade receivables against associates of CHF 9.0 (2022: 6.2) million. Aging analysis of trade receivables 31.12.2023 31.12.2022 39.3 4.7 44.0 (2.7) 41.3 15.9 12.7 3.9 1.7 2.3 20.6 36.5 28.1 39.4 67.5 (5.2) 62.3 6.3 11.6 0.2 0.6 4.2 16.6 22.9 Trade receivables 1 Credit card receivables Gross Allowances Net In millions of CHF Not due Overdue Up to 30 days 31 to 60 days 61 to 90 days More than 90 days Total overdue Trade receivables, net 139.9 30.8 54.1 23.9 78.7 – 327.4 (15.3) 312.1 2023 (8.4) (9.3) 1.5 0.3 0.6 (15.3) 52.6 19.1 4.0 32.8 55.2 0.5 164.2 (8.4) 155.8 2022 (10.4) – 1.7 0.6 (0.3) (8.4) 31.12.2023 31.12.2022 1,172.8 (110.8) 1,062.0 1,024.1 (95.7) 928.4 Cost of sales includes inventories written down to net realizable value and inventory losses of CHF 94.5 (2022: 74.7) million. 21. Other non-current assets 23. Trade and credit card receivables 31.12.2023 31.12.2022 In millions of CHF 31.12.2023 31.12.2022 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 207/336 Trade receivables 1 Credit card receivables Gross Allowances Net 1 Includes trade receivables against associates of CHF 9.0 (2022: 6.2) million. Aging analysis of trade receivables In millions of CHF Not due Overdue Up to 30 days 31 to 60 days 61 to 90 days More than 90 days Total overdue Trade receivables, net 39.3 4.7 44.0 (2.7) 41.3 28.1 39.4 67.5 (5.2) 62.3 31.12.2023 31.12.2022 15.9 12.7 3.9 1.7 2.3 20.6 36.5 6.3 11.6 0.2 0.6 4.2 16.6 22.9 139.9 30.8 54.1 23.9 78.7 – 327.4 (15.3) 312.1 2023 (8.4) (9.3) 1.5 0.3 0.6 (15.3) 52.6 19.1 4.0 32.8 55.2 0.5 164.2 (8.4) 155.8 2022 (10.4) – 1.7 0.6 (0.3) (8.4) 31.12.2023 31.12.2022 1,172.8 (110.8) 1,062.0 1,024.1 (95.7) 928.4 In millions of CHF Guarantee deposits Loans Lease receivables Prepayment for leases Tax receivables Other Subtotal Allowances Total Movement in allowances In millions of CHF Balance at January 1 Creation Utilized Reclassification Currency translation adjustments Balance at December 31 22. Inventories In millions of CHF Inventories at cost Inventory allowance Total Cost of sales includes inventories written down to net realizable value and inventory losses of CHF 94.5 (2022: 74.7) million. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 208/336 24. Other accounts receivable 25. Equity In millions of CHF Advertising receivables Services provided to suppliers Loans receivable Receivables from subtenants and business partners Personnel receivables Accounts receivables Prepayments of lease expenses and rents Prepayments of sales and other taxes Prepayments to suppliers Prepayments, other Prepayments Receivables from operational and airport services income Receivables from subleases Guarantee deposits Derivative financial assets Other Other receivables Total Allowance Total Movement in allowances In millions of CHF Balance at January 1 Creation Release Utilized Reclassification Currency translation adjustments Balance at December 31 31.12.2023 31.12.2022 25.1 Fully paid ordinary shares 166.4 2.3 25.4 7.5 2.7 204.3 18.3 136.0 9.1 36.3 199.7 56.6 17.2 46.7 9.3 59.6 189.4 593.4 (17.2) 576.2 2023 (22.5) (8.2) 11.7 – – 1.8 (17.2) 194.0 1.6 0.7 4.0 1.1 201.4 28.6 109.6 4.5 14.4 157.1 – 2.9 102.4 10.1 16.2 131.6 490.1 (22.5) 467.6 2022 (24.7) (3.4) 5.0 0.5 0.1 – (22.5) In millions of CHF Number of shares Share capital Share premium Balance at January 1, 2022 Balance at December 31, 2022 Conversion of mandatory convertible notes to equity Share capital increase Balance at December 31, 2023 90,797,007 90,797,007 2,092,113 59,725,131 152,614,251 454.0 454.0 10.5 298.6 763.1 4,542.2 4,542.2 49.8 2,240.8 6,832.8 On February 3, 2023, Dufry and Edizione successfully closed the transfer of the 50.3 % stake in Autogrill held by Edizione S.p.A (through a wholly owned subsidiary) to Dufry. In accordance with the Combination Agreement entered into on July 11, 2022, and in consideration for the transfer of the 50.3 % stake in Autogrill to Dufry, Edizione (through its wholly owned subsidiary Schema Beta S.p.A.) was issued mandatory convertible non-interest bearing notes convertible into an aggregate of 30,663,329 newly issued Dufry shares, at an implied exchange ratio of 0.158 new Dufry shares for each Autogrill share. Edizione exercised its conversion right following closing on February 3, 2023, of the transfer and was issued 30,663,329 Dufry shares. Additional 29’061’802 Dufry shares were issued in several steps in context of the MTO for the outstanding Autogrill shares at the Milan Stock Exchange. Avolta’s Board of Directors will propose to the Annual General Meeting of Shareholders to pay out a dividend of CHF 0.70 per share in 2024. 25.2 Mandatory convertible notes Balance at January 1, 2022 Balance at December 31, 2022 Conversion of mandatory convertible notes to equity Balance at December 31, 2023 Number of notes In thousands of CHF 695 695 (695) – 60,300 60,300 (60,300) – In November 2023, CHF 69.5 million Mandatory Convertible Bond has been converted into 2’092’113 Avolta AG shares at a conversion price of CHF 33.22. 24. Other accounts receivable 25. Equity 31.12.2023 31.12.2022 25.1 Fully paid ordinary shares Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 209/336 166.4 2.3 25.4 7.5 2.7 204.3 18.3 136.0 9.1 36.3 199.7 56.6 17.2 46.7 9.3 59.6 189.4 593.4 (17.2) 576.2 2023 (22.5) (8.2) 11.7 – – 1.8 (17.2) 194.0 1.6 0.7 4.0 1.1 201.4 28.6 109.6 4.5 14.4 157.1 – 2.9 102.4 10.1 16.2 131.6 490.1 (22.5) 467.6 2022 (24.7) (3.4) 5.0 0.5 0.1 – (22.5) In millions of CHF Number of shares Share capital Share premium Balance at January 1, 2022 Balance at December 31, 2022 Conversion of mandatory convertible notes to equity Share capital increase Balance at December 31, 2023 90,797,007 90,797,007 2,092,113 59,725,131 152,614,251 454.0 454.0 10.5 298.6 763.1 4,542.2 4,542.2 49.8 2,240.8 6,832.8 On February 3, 2023, Dufry and Edizione successfully closed the transfer of the 50.3 % stake in Autogrill held by Edizione S.p.A (through a wholly owned subsidiary) to Dufry. In accordance with the Combination Agreement entered into on July 11, 2022, and in consideration for the transfer of the 50.3 % stake in Autogrill to Dufry, Edizione (through its wholly owned subsidiary Schema Beta S.p.A.) was issued mandatory convertible non-interest bearing notes convertible into an aggregate of 30,663,329 newly issued Dufry shares, at an implied exchange ratio of 0.158 new Dufry shares for each Autogrill share. Edizione exercised its conversion right following closing on February 3, 2023, of the transfer and was issued 30,663,329 Dufry shares. Additional 29’061’802 Dufry shares were issued in several steps in context of the MTO for the outstanding Autogrill shares at the Milan Stock Exchange. Avolta’s Board of Directors will propose to the Annual General Meeting of Shareholders to pay out a dividend of CHF 0.70 per share in 2024. 25.2 Mandatory convertible notes Balance at January 1, 2022 Balance at December 31, 2022 Conversion of mandatory convertible notes to equity Balance at December 31, 2023 Number of notes In thousands of CHF 695 695 (695) – 60,300 60,300 (60,300) – In November 2023, CHF 69.5 million Mandatory Convertible Bond has been converted into 2’092’113 Avolta AG shares at a conversion price of CHF 33.22. Receivables from subtenants and business partners Prepayments of lease expenses and rents Prepayments of sales and other taxes Receivables from operational and airport services income In millions of CHF Advertising receivables Services provided to suppliers Loans receivable Personnel receivables Accounts receivables Prepayments to suppliers Prepayments, other Prepayments Receivables from subleases Guarantee deposits Derivative financial assets Other receivables Other Total Allowance Total Movement in allowances In millions of CHF Balance at January 1 Creation Release Utilized Reclassification Currency translation adjustments Balance at December 31 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 210/336 25.3 Translation reserves In millions of CHF Balance at January 1, 2022 Exchange differences arising on translating the foreign Net gain / (loss) on hedge of net investments in foreign Share of other comprehensive income of associates Balance at December 31, 2022 Exchange differences arising on translating the foreign operations Net gain / (loss) on hedge of net investments in foreign operations Share of other comprehensive income of associates Balance at December 31, 2023 Attributable to equity holders of the parent Non-controlling interests (450.9) (89.4) (3.6) 0.5 (543.4) (241.8) 14.3 – (770.9) (2.2) (19.7) – – Total (91.6) (3.6) 0.5 (261.5) 14.3 – 26. Share-based payment plans In 2023, Avolta recorded CHF 43.5 million in relation to its PSU plans (2023, 2022 and 2021) under personnel expenses, out of which CHF 6.9 million are recorded as other lia- bilities (personnel payables). In 2022, Avolta recorded CHF 18.5 million in relation to its PSU plans (2022 and 2021) under Personnel Expenses, whereas CHF 3.3 million are recorded as other liabilities (personnel payables). Amounts recorded in other payables include charges for cash settled portions CHF 1.9 million (2022: CHF 1.6 million) and accruals for social security charged CHF 5.0 million (2022: CHF 1.7 million). During 2023, Avolta granted to selected members of the management the award 2023 consisting of 862,071 performance share units (PSU). The PSU award 2023 will vest on June 1, 2026 and has a contractual life between 30 and 41 months. At grant dates, the fair values of one PSU award 2023 was calculated applying a combination of market share price and applying a Monte Carlo simulation. The range of fair values was deter- mined between CHF 30.03 and CHF 39.28 for the respective grant dates, with a weighted average fair value of CHF 33.67. As part of this plan, 191,951 PSU will be settled 2023 Plan in cash. The PSU granted in 2023 are subject to three performance conditions (unchanged to the previous year): Cumulative CORE EPS with a 50 % weighting, Relative TSR with a 25 % weighting and an ESG target with a 25 % weighting. The ESG target consists of two different KPIs related to material areas from a business and stakeholder perspective, each with a weighting of ½ of the ESG target. On the vesting date, the PSU vest and are converted into shares based on the achieve- ment of the performance targets. Each PSU may provide between zero share (less than 50 % targets achievement) and 2 shares (150 % or more targets achievement). The target (100 % vesting) in relation to the cumulative CORE EPS measured corresponds to a total of CHF 4.26, ranking at 50th percentile of the peer group for the TSR element and defined ESG targets in the aera of conducted trainings on embedding culture of diver- sity and suppliers related measures. Holders of PSU are not entitled to vote or receive dividends like shareholders do. As of December 31, 2023, none of the PSU awards 2023, 2022 and 2021 have forfeited and 1,810,237 PSU (2022: 948,166) remain outstanding. During 2022, Avolta granted to selected members of the management the award 2022 consisting of 553,359 performance share units (PSU). The PSU award 2022 will vest on June 3, 2025 and has a contractual life between 31 and 41 months. At grant dates the fair values of one PSU award 2022 was calculated applying a combination of market share price and applying a Monte Carlo simulation. The range of fair values was deter- mined between CHF 31.73 and CHF 48.78 for the respective grant dates, with a weighted average fair value of CHF 36.19. As part of this plan, 42,761 PSU will be settled 2022 Plan in cash. The PSU granted in 2022 are subject to three performance conditions: Cumulative Adjusted EPS with a 50 % weighting, Relative TSR with a 25 % weighting, and an ESG target with a 25 % weighting. The ESG target consists of three different KPIs related to material areas from a business and stakeholder perspective, each with a weighting of ¹/3 of the ESG target. 25.3 Translation reserves In millions of CHF Balance at January 1, 2022 Exchange differences arising on translating the foreign Net gain / (loss) on hedge of net investments in foreign Share of other comprehensive income of associates Balance at December 31, 2022 Exchange differences arising on translating the foreign operations Net gain / (loss) on hedge of net investments in foreign operations Share of other comprehensive income of associates Balance at December 31, 2023 Attributable to equity holders of the parent Non-controlling interests (450.9) (89.4) (3.6) 0.5 (543.4) (241.8) 14.3 – (770.9) Total (91.6) (3.6) 0.5 (261.5) 14.3 – (2.2) (19.7) – – Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 211/336 26. Share-based payment plans In 2023, Avolta recorded CHF 43.5 million in relation to its PSU plans (2023, 2022 and 2021) under personnel expenses, out of which CHF 6.9 million are recorded as other lia- bilities (personnel payables). In 2022, Avolta recorded CHF 18.5 million in relation to its PSU plans (2022 and 2021) under Personnel Expenses, whereas CHF 3.3 million are recorded as other liabilities (personnel payables). Amounts recorded in other payables include charges for cash settled portions CHF 1.9 million (2022: CHF 1.6 million) and accruals for social security charged CHF 5.0 million (2022: CHF 1.7 million). 2023 Plan During 2023, Avolta granted to selected members of the management the award 2023 consisting of 862,071 performance share units (PSU). The PSU award 2023 will vest on June 1, 2026 and has a contractual life between 30 and 41 months. At grant dates, the fair values of one PSU award 2023 was calculated applying a combination of market share price and applying a Monte Carlo simulation. The range of fair values was deter- mined between CHF 30.03 and CHF 39.28 for the respective grant dates, with a weighted average fair value of CHF 33.67. As part of this plan, 191,951 PSU will be settled in cash. The PSU granted in 2023 are subject to three performance conditions (unchanged to the previous year): Cumulative CORE EPS with a 50 % weighting, Relative TSR with a 25 % weighting and an ESG target with a 25 % weighting. The ESG target consists of two different KPIs related to material areas from a business and stakeholder perspective, each with a weighting of ½ of the ESG target. On the vesting date, the PSU vest and are converted into shares based on the achieve- ment of the performance targets. Each PSU may provide between zero share (less than 50 % targets achievement) and 2 shares (150 % or more targets achievement). The target (100 % vesting) in relation to the cumulative CORE EPS measured corresponds to a total of CHF 4.26, ranking at 50th percentile of the peer group for the TSR element and defined ESG targets in the aera of conducted trainings on embedding culture of diver- sity and suppliers related measures. Holders of PSU are not entitled to vote or receive dividends like shareholders do. As of December 31, 2023, none of the PSU awards 2023, 2022 and 2021 have forfeited and 1,810,237 PSU (2022: 948,166) remain outstanding. 2022 Plan During 2022, Avolta granted to selected members of the management the award 2022 consisting of 553,359 performance share units (PSU). The PSU award 2022 will vest on June 3, 2025 and has a contractual life between 31 and 41 months. At grant dates the fair values of one PSU award 2022 was calculated applying a combination of market share price and applying a Monte Carlo simulation. The range of fair values was deter- mined between CHF 31.73 and CHF 48.78 for the respective grant dates, with a weighted average fair value of CHF 36.19. As part of this plan, 42,761 PSU will be settled in cash. The PSU granted in 2022 are subject to three performance conditions: Cumulative Adjusted EPS with a 50 % weighting, Relative TSR with a 25 % weighting, and an ESG target with a 25 % weighting. The ESG target consists of three different KPIs related to material areas from a business and stakeholder perspective, each with a weighting of ¹/3 of the ESG target. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 212/336 On the vesting date, the PSU vest and are converted into shares based on the achieve- ment of the performance targets. Each PSU may provide between zero share (less than 50 % targets achievement) and 2 shares (150 % or more targets achievement). The target (100 % vesting) in relation to the cumulative adjusted EPS measured corresponds to a total of CHF 7.60 (to be adjusted by the effect of the combination with Autogrill), ranking at 50th percentile of the peer group for the TSR element and defined ESG mea- sures per area, such as 60 % reduction of CO2 emissions on scope 1 & 2 by 2024. Holders of PSU are not entitled to vote or receive dividends like shareholders do. As of December 31, 2022, none of the PSU awards 2022 and 2021 have forfeited and 948,166 PSU (2021: 394,807) remain outstanding. 2021 Plan On November 30, 2021, Avolta granted to selected members of the management the award 2021 consisting of 394,807 performance share units (PSU). The PSU award 2021 has a contractual life of 30 months and will vest on June 3, 2024. At grant date the fair value of one PSU award 2021 represented the market value for one Avolta share at that date, i. e. CHF 41.54. As part of this plan, 44,753 PSU will be settled in cash. Holders of one PSU award 2021 will have the right to receive free of charge up to two Avolta shares depending on two performance targets reached by Avolta during the grant year of award and the following two years compared with the target. The perfor- mance targets of the 2021 PSU grant are the cumulative adjusted EPS, with a 50 % weighting, and the cumulative Equity Free Cash Flow (EFCF) with a 50 % weighting. On the vesting date, after the three-year vesting period, the PSU vest and are converted into shares based on the achievement of the performance targets. Each PSU may pro- vide between zero share (less than 50 % targets achievement) and 2 shares (150 % or more targets achievement). The target (100 % vesting) in relation to the cumulative adjusted EPS measured corresponds to an improvement by CHF 26.50 compared to the adjusted EPS for fiscal year 2020, respectively an improvement by CHF 993 million compared to the EFCF for fiscal year 2020. Holders of PSU are not entitled to vote or receive dividends like shareholders do. Older Plans During 2020, Avolta did not grant any awards and therefore no PSU were allocated in 2023. 26.1 Treasury shares Treasury shares are valued at historical cost. Balance at January 1, 2022 Purchased shares Balance at December 31, 2022 Returned shares 1 Purchased shares Balance at December 31, 2023 1 Related to a past business combination. Number of shares In millions of CHF 11,281 600,000 611,281 804,728 801,056 2,217,065 (1.3) (21.6) (22.9) (34.1) (33.4) (90.4) 26.2 Earnings per share 26.2.1 Earnings per share attributable to equity holders of the parent Basic earnings per share are calculated by dividing the net profit/ (loss) attributable to equity holders of the parent by the weighted average number of shares outstanding Basic during the year. In millions of CHF / Quantity Net profit / (loss) attributable to equity holders of the parent Weighted average number of ordinary shares outstanding Basic earnings per share in CHF Diluted earnings per share are calculated by dividing the net profit/ (loss) attributable to equity holders of the parent by the weighted average number of ordinary shares out- standing 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 ordi- Diluted nary shares. Refer to note 28 for instruments that could potentially dilute basic earnings per share in future, but were not included in the calculation of diluted earnings per share because they are antidilutive for 2023 and 2022. In millions of CHF / Quantity Net profit / (loss) attributable to equity holders of the parent Weighted average number of ordinary shares outstanding Diluted earnings per share in CHF 26.2.2 Weighted average number of ordinary shares In shares Outstanding shares Mandatory convertible shares Less treasury shares Used for calculation of basic earnings per share Effect of dilution PSU plans Used for calculation of diluted earnings per share 2023 87.3 0.64 2022 58.2 0.63 136,299,408 92,800,277 2023 87.26 0.63 139,360,952 137,659,900 2023 – (1,360,492) 136,299,408 2022 58.20 94,010,983 0.62 2022 90,797,007 2,092,113 (88,843) 92,800,277 3,061,544 139,360,952 1,210,706 94,010,983 On the vesting date, the PSU vest and are converted into shares based on the achieve- ment of the performance targets. Each PSU may provide between zero share (less than 50 % targets achievement) and 2 shares (150 % or more targets achievement). The target (100 % vesting) in relation to the cumulative adjusted EPS measured corresponds to a total of CHF 7.60 (to be adjusted by the effect of the combination with Autogrill), ranking at 50th percentile of the peer group for the TSR element and defined ESG mea- sures per area, such as 60 % reduction of CO2 emissions on scope 1 & 2 by 2024. Holders of PSU are not entitled to vote or receive dividends like shareholders do. As of December 31, 2022, none of the PSU awards 2022 and 2021 have forfeited and 948,166 PSU (2021: 394,807) remain outstanding. 2021 Plan On November 30, 2021, Avolta granted to selected members of the management the award 2021 consisting of 394,807 performance share units (PSU). The PSU award 2021 has a contractual life of 30 months and will vest on June 3, 2024. At grant date the fair value of one PSU award 2021 represented the market value for one Avolta share at that date, i. e. CHF 41.54. As part of this plan, 44,753 PSU will be settled in cash. Holders of one PSU award 2021 will have the right to receive free of charge up to two Avolta shares depending on two performance targets reached by Avolta during the grant year of award and the following two years compared with the target. The perfor- mance targets of the 2021 PSU grant are the cumulative adjusted EPS, with a 50 % weighting, and the cumulative Equity Free Cash Flow (EFCF) with a 50 % weighting. On the vesting date, after the three-year vesting period, the PSU vest and are converted into shares based on the achievement of the performance targets. Each PSU may pro- vide between zero share (less than 50 % targets achievement) and 2 shares (150 % or more targets achievement). The target (100 % vesting) in relation to the cumulative adjusted EPS measured corresponds to an improvement by CHF 26.50 compared to the adjusted EPS for fiscal year 2020, respectively an improvement by CHF 993 million compared to the EFCF for fiscal year 2020. Holders of PSU are not entitled to vote or receive dividends like shareholders do. During 2020, Avolta did not grant any awards and therefore no PSU were allocated in Older Plans 2023. 26.1 Treasury shares Treasury shares are valued at historical cost. Balance at January 1, 2022 Purchased shares Balance at December 31, 2022 Returned shares 1 Purchased shares Balance at December 31, 2023 1 Related to a past business combination. Number of shares In millions of CHF 11,281 600,000 611,281 804,728 801,056 2,217,065 (1.3) (21.6) (22.9) (34.1) (33.4) (90.4) Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 213/336 26.2 Earnings per share 26.2.1 Earnings per share attributable to equity holders of the parent Basic Basic earnings per share are calculated by dividing the net profit/ (loss) attributable to equity holders of the parent by the weighted average number of shares outstanding during the year. In millions of CHF / Quantity Net profit / (loss) attributable to equity holders of the parent Weighted average number of ordinary shares outstanding Basic earnings per share in CHF 2023 87.3 2022 58.2 136,299,408 92,800,277 0.64 0.63 Diluted Diluted earnings per share are calculated by dividing the net profit/ (loss) attributable to equity holders of the parent by the weighted average number of ordinary shares out- standing 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 ordi- nary shares. Refer to note 28 for instruments that could potentially dilute basic earnings per share in future, but were not included in the calculation of diluted earnings per share because they are antidilutive for 2023 and 2022. In millions of CHF / Quantity Net profit / (loss) attributable to equity holders of the parent Weighted average number of ordinary shares outstanding Diluted earnings per share in CHF 26.2.2 Weighted average number of ordinary shares In shares Outstanding shares Mandatory convertible shares Less treasury shares Used for calculation of basic earnings per share Effect of dilution PSU plans Used for calculation of diluted earnings per share 2023 87.26 139,360,952 0.63 2022 58.20 94,010,983 0.62 2023 2022 137,659,900 – (1,360,492) 136,299,408 90,797,007 2,092,113 (88,843) 92,800,277 3,061,544 139,360,952 1,210,706 94,010,983 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 214/336 2023 441.6 (384.1) (5.3) 16.2 6.9 75.3 19.2 19.2 94.5 2022 – – 5.1 – 2.8 7.9 1.5 1.5 9.4 27. Breakdown of transactions with non-controlling interests The following transactions have been recognized in equity attributable to non-con- trolling interests holders: In millions of CHF Acquisition of NCI share in Autogrill Feb Changes in NCI share in Autogrill Change in relation to put option (49 % of Dufry Staer Holding Ltd)1 Navinten NCI change to 49 % Other non-controlling interests (disposed) / acquired Change in Avolta's interest NCI portion of increases in share capital of subsidiaries Share capital changes Total 1 No cash flow effects. 27.1 Information on companies with non-controlling interests In 2023, Avolta allocated CHF 129.1 (2022: 62.4) million of net result to non-controlling interests (NCI). Within the Avolta Group, the net earnings allocated to non-controlling interests is predominantly related to the US subsidiaries, totaling CHF 104.1 (2022: 47.2) million. Airport authorities in the United States frequently require companies to partner with local business partners based on Airport Concession Disadvantaged Business Enter- prise (“ACDBE”) regulation. Avolta may partner with third parties to win new business opportunities and maintain existing ones. Consequently, Avolta’s business model con- templates the involvement of local partners. Net profits from these operating subsid- iaries attributed to Avolta and to non-controlling interests holders reflect the applicable ownership structure. The net profits and dividend payments attributable to non-con- trolling interests exclude expenses incurred by Avolta at the acquisition of these busi- nesses, which are not attributable to the local partners, such as acquisition related interest expenses, income taxes and amortization of intangible assets from acquisitions. There are no individual significant non-controlling interests in 2023 and 2022. 28. Borrowings In millions of CHF Bank debt overdrafts Senior Notes Bank debt loans Third party loans Borrowings, current Bank debt loans Senior Notes Third party loans Total Of which are Bank debt Senior Notes Third party loans Borrowings, non-current Bank debts are denominated in Deferred arrangement fees Bank debts at subsidiaries in Bank debt In millions of CHF US Dollar Euro Subtotal Euro* Swiss Franc* British Pound* US Dollar Other currencies* Total 31.12.2023 31.12.2022 41.5 743.0 32.1 2.8 819.4 379.3 2,138.0 3.3 2,520.6 3,340.0 452.9 2,881.0 6.1 311.4 46.4 (18.1) 339.7 93.2 6.8 – 6.9 6.3 452.9 – – 119.6 3.1 122.7 453.9 2,993.0 5.4 3,452.3 3,575.0 573.5 2,993.0 8.5 409.5 – (17.3) 392.2 104.9 11.0 55.9 – 9.5 573.5 31.12.2023 31.12.2022 * Include Government backed COVID-19 loans of CHF 66.8 (2022: 175.9) million. Since the beginning of the COVID-19 pandemic in 2020 and as a consequence thereof economical restrictions, governments granted backed COVID-19 loans to certain Avolta subsidiaries, which are accounted for financial liability in accordance with IFRS 9. As of December 2023, the amount of loans granted was overall CHF 66.8 (2022: 175.9) mil- lion, whereas the loans were granted in different currencies. Loans granted were in EUR 65.8 (2022: 106.0) million and in CHF 5.7 (2022: 11.0) million. The loans in GBP have been completely reimbursed (2022: 50.0 million) as well as in MAD (2022: 46.8 million). The interest rates vary between 0.0 % and 5.6 % (2022: 0.0 % and 5.5 %). 2023 441.6 (384.1) (5.3) 16.2 6.9 75.3 19.2 19.2 94.5 2022 – – – 5.1 2.8 7.9 1.5 1.5 9.4 27. Breakdown of transactions with non-controlling interests The following transactions have been recognized in equity attributable to non-con- trolling interests holders: In millions of CHF Acquisition of NCI share in Autogrill Feb Changes in NCI share in Autogrill Change in relation to put option (49 % of Dufry Staer Holding Ltd)1 Navinten NCI change to 49 % Other non-controlling interests (disposed) / acquired Change in Avolta's interest NCI portion of increases in share capital of subsidiaries Share capital changes Total 1 No cash flow effects. 27.1 Information on companies with non-controlling interests In 2023, Avolta allocated CHF 129.1 (2022: 62.4) million of net result to non-controlling interests (NCI). Within the Avolta Group, the net earnings allocated to non-controlling interests is predominantly related to the US subsidiaries, totaling CHF 104.1 (2022: 47.2) million. Airport authorities in the United States frequently require companies to partner with local business partners based on Airport Concession Disadvantaged Business Enter- prise (“ACDBE”) regulation. Avolta may partner with third parties to win new business opportunities and maintain existing ones. Consequently, Avolta’s business model con- templates the involvement of local partners. Net profits from these operating subsid- iaries attributed to Avolta and to non-controlling interests holders reflect the applicable ownership structure. The net profits and dividend payments attributable to non-con- trolling interests exclude expenses incurred by Avolta at the acquisition of these busi- nesses, which are not attributable to the local partners, such as acquisition related interest expenses, income taxes and amortization of intangible assets from acquisitions. There are no individual significant non-controlling interests in 2023 and 2022. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 215/336 28. Borrowings In millions of CHF Bank debt overdrafts Senior Notes Bank debt loans Third party loans Borrowings, current Bank debt loans Senior Notes Third party loans Borrowings, non-current Total Of which are Bank debt Senior Notes Third party loans Bank debt In millions of CHF Bank debts are denominated in US Dollar Euro Deferred arrangement fees Subtotal Bank debts at subsidiaries in Euro* Swiss Franc* British Pound* US Dollar Other currencies* Total * Include Government backed COVID-19 loans of CHF 66.8 (2022: 175.9) million. Since the beginning of the COVID-19 pandemic in 2020 and as a consequence thereof economical restrictions, governments granted backed COVID-19 loans to certain Avolta subsidiaries, which are accounted for financial liability in accordance with IFRS 9. As of December 2023, the amount of loans granted was overall CHF 66.8 (2022: 175.9) mil- lion, whereas the loans were granted in different currencies. Loans granted were in EUR 65.8 (2022: 106.0) million and in CHF 5.7 (2022: 11.0) million. The loans in GBP have been completely reimbursed (2022: 50.0 million) as well as in MAD (2022: 46.8 million). The interest rates vary between 0.0 % and 5.6 % (2022: 0.0 % and 5.5 %). 31.12.2023 31.12.2022 41.5 743.0 32.1 2.8 819.4 379.3 2,138.0 3.3 2,520.6 3,340.0 452.9 2,881.0 6.1 – – 119.6 3.1 122.7 453.9 2,993.0 5.4 3,452.3 3,575.0 573.5 2,993.0 8.5 31.12.2023 31.12.2022 311.4 46.4 (18.1) 339.7 93.2 6.8 – 6.9 6.3 452.9 409.5 – (17.3) 392.2 104.9 11.0 55.9 – 9.5 573.5 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 216/336 Notes In millions of CHF Senior Notes denominated in Euro Senior Notes denominated in CHF Convertible Notes denominated in CHF Deferred interest on modification of financing arrangements Deferred arrangement fees Total 31.12.2023 31.12.2022 2,121.3 300.0 474.2 (6.4) (8.1) 2,881.0 2,251.4 300.0 463.5 (8.9) (13.0) 2,993.0 Detailed credit facilities Avolta negotiates and manages its main credit facilities centrally. In December 2022, Avolta had successfully refinanced its main bank credit facilities. A new EUR 2,085 mil- lion Revolving Credit Facility (RCF) replaced EUR 1,300 million RCF and USD 550 million Term Loan with maturity in December 2027 compared to previous maturity date in November 2024. In April 2023, EUR 2,085 million RCF has been increased by EUR 180 million, in June 2023 by EUR 410 million and in September 2023 by EUR 75 million to a new total amount of EUR 2,750 million. As of December 31, 2023 the drawn amount is CHF 357.8 million. In February 2022, Avolta entered into an amendment of certain borrowing instruments which waived compliance with certain financial covenants for another twelve months until and including June 30, 2023. On signing date in December 2022, the margin of the RCF was 3.5 % based on Avolta’s rating. Due to two upgrades by S&P and one upgrade by Moody’s, the margin has improved and is 2.75 % as of December 31, 2023. In June 2023, the former Autogrill credit facility was cancelled by repaying the notional drawn amount of CHF 506.8 million (EUR 200.0 million and USD 347.8 million). The post agreements and the bank guarantee facilities contain covenants and condi- tions customary to this type of financing. In 2023 and 2022, Avolta complied with the financial covenants and conditions contained in the bank credit agreements. Financial covenants included in the borrowing instruments require the Group to comply with: – a maximum ratio of Total Drawn Debt to CORE EBITDA of 4.5:1 for the test periods ending December 31, 2023 and thereafter, – a minimum ratio of CORE EBITDA to Total Interest Expense (excluding lease interest) of 3:1 for the test periods ending December 31, 2023 and thereafter. Bank credit facilities In millions of CHF Revolving credit facility (multi-currency) Uncommitted current facilities At December 31, 2023 In millions of CHF Revolving credit facility (multi-currency)1 Uncommitted current facilities At December 31, 2022 Maturity Currency Credit limit in for- eign currency Draw amount in CHF 20.12.2027 n / a EUR CHF 2,750.0 50.0 Maturity Currency Credit limit in for- eign currency Draw amount in CHF 20.12.2027 n / a EUR CHF 2,085.0 50.0 1 New revolving credit facility replacing the EUR 1,300.0 million revolving credit facility which was cancelled and the USD 550.0 million committed term loan which was fully repaid, both before their maturity. Notes Senior notes Senior notes Senior notes Senior notes Convertible notes 1 Total In millions of CHF Maturity Coupon rate Currency 15.10.2024 15.02.2027 15.04.2028 15.04.2026 30.03.2026 2.50% 2.00% 3.38% 3.63% 0.75% Nominal in foreign currency 800.0 750.0 725.0 300.0 500.0 EUR EUR EUR CHF CHF 2023 745.9 692.0 672.1 299.4 471.6 2,881.0 2,993.0 Below are the overall weighted average notional interest rates on the main currencies 1 Equity component CHF 54.1 million. Weighted average interest rate of bank credit facilities and notes: Interest rate in percentage (%) Average on USD Average on CHF Average on EUR Weighted Average Total 2023 7.88 2.01 3.51 3.76 Amount in CHF 357.8 – 357.8 409.5 – 409.5 2022 790.3 732.1 712.2 298.9 459.5 2022 4.96 2.01 3.19 3.10 31.12.2023 31.12.2022 2,121.3 300.0 474.2 (6.4) (8.1) 2,881.0 2,251.4 300.0 463.5 (8.9) (13.0) 2,993.0 Notes In millions of CHF Senior Notes denominated in Euro Senior Notes denominated in CHF Convertible Notes denominated in CHF Deferred interest on modification of financing arrangements Deferred arrangement fees Total Detailed credit facilities Avolta negotiates and manages its main credit facilities centrally. In December 2022, Avolta had successfully refinanced its main bank credit facilities. A new EUR 2,085 mil- lion Revolving Credit Facility (RCF) replaced EUR 1,300 million RCF and USD 550 million Term Loan with maturity in December 2027 compared to previous maturity date in November 2024. In April 2023, EUR 2,085 million RCF has been increased by EUR 180 million, in June 2023 by EUR 410 million and in September 2023 by EUR 75 million to a new total amount of EUR 2,750 million. As of December 31, 2023 the drawn amount is CHF 357.8 million. In February 2022, Avolta entered into an amendment of certain borrowing instruments which waived compliance with certain financial covenants for another twelve months until and including June 30, 2023. On signing date in December 2022, the margin of the RCF was 3.5 % based on Avolta’s rating. Due to two upgrades by S&P and one upgrade by Moody’s, the margin has improved and is 2.75 % as of December 31, 2023. In June 2023, the former Autogrill credit facility was cancelled by repaying the notional drawn amount of CHF 506.8 million (EUR 200.0 million and USD 347.8 million). The post agreements and the bank guarantee facilities contain covenants and condi- tions customary to this type of financing. In 2023 and 2022, Avolta complied with the financial covenants and conditions contained in the bank credit agreements. Financial covenants included in the borrowing instruments require the Group to comply with: – a maximum ratio of Total Drawn Debt to CORE EBITDA of 4.5:1 for the test periods ending December 31, 2023 and thereafter, – a minimum ratio of CORE EBITDA to Total Interest Expense (excluding lease interest) of 3:1 for the test periods ending December 31, 2023 and thereafter. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 217/336 Bank credit facilities In millions of CHF Revolving credit facility (multi-currency) Uncommitted current facilities At December 31, 2023 In millions of CHF Revolving credit facility (multi-currency)1 Uncommitted current facilities At December 31, 2022 Maturity Currency Credit limit in for- eign currency Draw amount in CHF 20.12.2027 n / a EUR CHF 2,750.0 50.0 357.8 – 357.8 Maturity Currency Credit limit in for- eign currency Draw amount in CHF 20.12.2027 n / a EUR CHF 2,085.0 50.0 409.5 – 409.5 1 New revolving credit facility replacing the EUR 1,300.0 million revolving credit facility which was cancelled and the USD 550.0 million committed term loan which was fully repaid, both before their maturity. Notes In millions of CHF Maturity Coupon rate Currency Senior notes Senior notes Senior notes Senior notes Convertible notes 1 Total 1 Equity component CHF 54.1 million. 15.10.2024 15.02.2027 15.04.2028 15.04.2026 30.03.2026 2.50% 2.00% 3.38% 3.63% 0.75% EUR EUR EUR CHF CHF Nominal in foreign currency 800.0 750.0 725.0 300.0 500.0 Amount in CHF 2022 790.3 732.1 712.2 298.9 459.5 2023 745.9 692.0 672.1 299.4 471.6 2,881.0 2,993.0 Weighted average interest rate Below are the overall weighted average notional interest rates on the main currencies of bank credit facilities and notes: Interest rate in percentage (%) Average on USD Average on CHF Average on EUR Weighted Average Total 2023 7.88 2.01 3.51 3.76 2022 4.96 2.01 3.19 3.10 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 218/336 28.1 Hedge of net investments in foreign operations 29. Borrowings and lease obligations, net The company has designated USD 292.9 million bank loans in relation to the invest- ments in Alliance Inc., Interbaires SA, Navinten SA, Blaicor SA, International Operation & Services SA, and Duty Free Ecuador SA. In millions of CHF Cash and cash equivalents Lease obligations rowings Borrowings Net debt Financial deriva- tives asset-borrow- Financial deriva- tives liability-bor- Balance at January 1, 2023 854.7 3,002.6 99.8 3,575.1 5,813.4 In millions of Balance at January 1, 2022 Currency translation adjustments Balance at December 31, 2022 Currency translation adjustments Balance at December 31, 2023 CHF 267.1 3.6 270.7 (14.3) 256.4 USD 292.9 – 292.9 – 292.9 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. The company maintains the hedge ratio by verifying 100 % hedge ratio. 28.2 Equity-like loans Avolta granted to below mentioned foreign subsidiaries long-term loans. These loans are considered as part of Avolta’s net investment in foreign operations, as settlement is neither planned nor likely to occur in the foreseeable future. Amount in foreign currency Equivalent amount in CHF In millions of Currency 31.12.2023 31.12.2022 31.12.2023 31.12.2022 Dufry International AG Nuance Group (Australia) Pty Ltd. Dufry Americas y Caribe Corp. Nuance Group (Sverige) AB Dufry Duty Free (Nigeria) Ltd. EUR AUD USD SEK USD 1,572.9 121.8 10.2 110.0 6.8 1,087.1 121.8 10.2 110.0 6.8 1,460.8 69.8 8.6 9.2 5.7 1,075.8 76.7 9.4 9.8 6.3 Any translation differences arising on these loans are accounted for in equity in the line item Exchange difference on translating foreign operations. Cash flows from operating, financing and investing activities Repayment of 3 rd party loans payable Transaction costs for financial instruments Repayment of borrowings Proceeds from borrowings Lease payments Cash flow Business combinations (note 6) Other change in scope Additions to lease obligations Interest on lease obligations Modification of lease obligations Early termination of lease obligations Other Discounted interests Arrangement fees amortization Currency translation adjustments Other non-cash movements Balance at December 31, 2023 (502.1) (502.1) 459.7 (0.7) – – – – – – – – – – (97.0) 362.0 714.6 – – – (1,361.7) (1,361.7) 1,434.1 (0.3) 179.7 321.0 4,671.0 (28.1) (0.5) – – (364.4) 6,212.5 7,853.4 ings 9.4 (1.7) 0.4 – – – – – – – – – (1.7) (0.7) (0.7) (638.7) – – – – – – – – – – – 1.6 (6.0) (865.5) 231.2 571.4 0.8 – – – – 3.3 11.8 10.4 (194.1) 403.6 3,340.0 502.1 1.6 (6.0) (864.5) 231.2 (1,361.7) (1,497.3) 1,545.4 1.2 179.7 321.0 4,671.0 (28.1) 2.8 11.8 10.4 (481.8) 6,233.4 10,549.5 1.2 1.6 9.3 (19.1) (19.1) 80.0 28.1 Hedge of net investments in foreign operations 29. Borrowings and lease obligations, net The company has designated USD 292.9 million bank loans in relation to the invest- ments in Alliance Inc., Interbaires SA, Navinten SA, Blaicor SA, International Operation & Services SA, and Duty Free Ecuador SA. In millions of CHF Cash and cash equivalents Lease obligations Financial deriva- tives asset-borrow- ings Financial deriva- tives liability-bor- rowings Borrowings Net debt Balance at January 1, 2023 854.7 3,002.6 9.4 99.8 3,575.1 5,813.4 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 219/336 In millions of Balance at January 1, 2022 Currency translation adjustments Balance at December 31, 2022 Currency translation adjustments Balance at December 31, 2023 CHF 267.1 3.6 270.7 (14.3) 256.4 USD 292.9 292.9 – – 292.9 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. The company maintains the hedge ratio by verifying 100 % hedge ratio. 28.2 Equity-like loans Avolta granted to below mentioned foreign subsidiaries long-term loans. These loans are considered as part of Avolta’s net investment in foreign operations, as settlement is neither planned nor likely to occur in the foreseeable future. Amount in foreign currency Equivalent amount in CHF In millions of Currency 31.12.2023 31.12.2022 31.12.2023 31.12.2022 Dufry International AG Nuance Group (Australia) Pty Ltd. Dufry Americas y Caribe Corp. Nuance Group (Sverige) AB Dufry Duty Free (Nigeria) Ltd. EUR AUD USD SEK USD 1,572.9 121.8 10.2 110.0 6.8 1,087.1 121.8 10.2 110.0 6.8 1,460.8 69.8 8.6 9.2 5.7 1,075.8 76.7 9.4 9.8 6.3 Any translation differences arising on these loans are accounted for in equity in the line item Exchange difference on translating foreign operations. Cash flows from operating, financing and investing activities Repayment of 3 rd party loans payable Transaction costs for financial instruments Repayment of borrowings Proceeds from borrowings Lease payments Cash flow Business combinations (note 6) Other change in scope Additions to lease obligations Interest on lease obligations Modification of lease obligations Early termination of lease obligations Other Discounted interests Arrangement fees amortization Currency translation adjustments Other non-cash movements Balance at December 31, 2023 (502.1) – – – (502.1) 459.7 (0.7) – – – – – – – (97.0) 362.0 714.6 – – – (1,361.7) (1,361.7) 1,434.1 (0.3) 179.7 321.0 4,671.0 (28.1) (0.5) – – (364.4) 6,212.5 7,853.4 – – (1.7) – (1.7) 0.4 – – – – – – 1.2 1.6 9.3 – – (0.7) – (0.7) – – – – – – – (19.1) (19.1) 80.0 – 1.6 (6.0) (865.5) 231.2 – (638.7) 571.4 0.8 – – – 3.3 11.8 10.4 (194.1) 403.6 3,340.0 502.1 1.6 (6.0) (864.5) 231.2 (1,361.7) (1,497.3) 1,545.4 1.2 179.7 321.0 4,671.0 (28.1) 2.8 11.8 10.4 (481.8) 6,233.4 10,549.5 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 220/336 In millions of CHF Cash and cash equivalents Lease obligations Financial deriva- tives asset-borrow- ings Financial deriva- tives liability-bor- rowings Borrowings Net debt Balance at January 1, 2022 793.5 3,636.4 7.4 63.5 3,817.0 6,716.0 29.1 Offsetting financial assets and financial liabilities Avolta’s notional cash pool is operated by a major finance institute. Based on enforce- able master netting agreement, the respective balances at the end of the period have Cash flows from operating, financing and investing activities Business combinations Repayment of 3 rd party loans payable Transaction costs for financial instruments Repayment of borrowings Payments of derivatives interests Lease payments Cash flow Additions to lease obligations Interest on lease obligations Modification of lease obligations Relief on lease obligations Early termination of lease obligations Discounted interests of financial derivatives Discounted interests Arrangement fees amortization 98.8 1.1 – – – – – 99.9 – – – – – – – – – – – – – – (907.8) (907.8) 63.0 127.6 244.2 (80.2) (13.9) – – – Currency translation adjustments (38.7) (87.3) Unrealized exchange differences on the translation of net debt in foreign currencies Other non-cash movements Balance at December 31, 2022 . – (38.7) 854.7 20.6 274.0 3,002.6 – – – – – (24.3) – (24.3) – – – – – 24.1 – – 2.2 – 26.3 9.4 – – – – – (38.5) – (38.5) – – – – – 38.7 – – 36.1 – 74.8 99.8 – – (1.8) (16.8) (152.2) – – (170.8) – – – – – – 10.2 17.7 (147.5) 48.4 (71.2) 3,575.0 (98.8) (1.1) (1.8) (16.8) (152.2) (14.2) (907.8) (1,192.7) 63.0 127.6 244.2 (80.2) (13.9) 14.6 10.2 17.7 (162.2) 69.0 290.0 5,813.3 been set-off as follows: In millions of CHF 31.12.2023 Cash and cash equivalents Borrowings, current 31.12.2022 Cash and cash equivalents Borrowings, current Balance before global pooling Set-off Net balance 2,153.8 2,258.6 1,727.9 995.9 (1,439.2) (1,439.2) (873.2) (873.2) 714.6 819.4 854.7 122.7 1 Thereof CHF 74.9 million (2022: CHF 0.0 million) credit card receivables with a maturity of up to 4 working days included in cash and cash equivalents. 29.2 Legal restrictions on money transfer Cash and cash equivalents at the end of the reporting period include CHF  123.6 (2022: 110.1) million held by subsidiaries operating in countries with exchange controls or other legal restrictions on money transfer. There are no material assets that have any other restrictions to realize or settle liabilities of the Group. 30. Other liabilities In millions of CHF Concession fee payables Other service related vendors Personnel payables Sales and other tax liabilities Put option Dufry Staer Holding Ltd Financial derivative liabilities - current Lease obligation due to tax refund Payables for capital expenditure Interest payables Payables to local business partners Other payables 1 Total Thereof Current liabilities Non-current liabilities Total 1 Thereof CHF 15.6 million related to Covid-19 related employee retention liability in the US. 31.12.2023 31.12.2022 181.4 289.6 362.7 99.6 26.8 80.2 20.9 77.1 22.6 3.8 108.8 1,273.5 1,193.1 80.4 1,273.5 181.5 255.9 158.9 62.4 7.7 99.8 18.6 19.9 25.4 1.9 38.4 870.4 841.1 29.3 870.4  (24.3) (38.5) 99.9 (24.3) (38.5) (170.8) – – – – – – – – – (907.8) (907.8) 63.0 127.6 244.2 (80.2) (13.9) 98.8 1.1 – – – – – – – – – – – – – – ings 7.4 – – – – – – – – – – – – – – – – – – – – – – – – – – – – (1.8) (16.8) (152.2) – – – – – – – – – – 10.2 17.7 (147.5) 48.4 (71.2) 3,575.0 (98.8) (1.1) (1.8) (16.8) (152.2) (14.2) (907.8) (1,192.7) 63.0 127.6 244.2 (80.2) (13.9) 14.6 10.2 17.7 (162.2) 69.0 290.0 5,813.3 Currency translation adjustments (38.7) (87.3) 2.2 36.1 24.1 38.7 (38.7) 854.7 20.6 274.0 3,002.6 26.3 9.4 74.8 99.8 Cash flows from operating, financing and investing activities Business combinations Repayment of 3 rd party loans payable Transaction costs for financial instruments Repayment of borrowings Payments of derivatives interests Lease payments Cash flow Additions to lease obligations Interest on lease obligations Modification of lease obligations Relief on lease obligations Early termination of lease obligations Discounted interests of financial derivatives Discounted interests Arrangement fees amortization Unrealized exchange differences on the translation of net debt in foreign currencies Other non-cash movements Balance at December 31, 2022 . In millions of CHF Cash and cash equivalents Lease obligations rowings Borrowings Net debt Financial deriva- tives asset-borrow- Financial deriva- tives liability-bor- Balance at January 1, 2022 793.5 3,636.4 63.5 3,817.0 6,716.0 29.1 Offsetting financial assets and financial liabilities Avolta’s notional cash pool is operated by a major finance institute. Based on enforce- able master netting agreement, the respective balances at the end of the period have been set-off as follows: Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 221/336 In millions of CHF 31.12.2023 Cash and cash equivalents Borrowings, current 31.12.2022 Cash and cash equivalents Borrowings, current Balance before global pooling Set-off Net balance 2,153.8 2,258.6 1,727.9 995.9 (1,439.2) (1,439.2) (873.2) (873.2) 714.6 819.4 854.7 122.7 1 Thereof CHF 74.9 million (2022: CHF 0.0 million) credit card receivables with a maturity of up to 4 working days included in cash and cash equivalents. 29.2 Legal restrictions on money transfer Cash and cash equivalents at the end of the reporting period include CHF  123.6 (2022: 110.1) million held by subsidiaries operating in countries with exchange controls or other legal restrictions on money transfer. There are no material assets that have any other restrictions to realize or settle liabilities of the Group. 30. Other liabilities In millions of CHF Concession fee payables Other service related vendors Personnel payables Sales and other tax liabilities Put option Dufry Staer Holding Ltd Financial derivative liabilities - current Lease obligation due to tax refund Payables for capital expenditure Interest payables Payables to local business partners Other payables 1 Total Thereof Current liabilities Non-current liabilities Total 1 Thereof CHF 15.6 million related to Covid-19 related employee retention liability in the US. 31.12.2023 31.12.2022 181.4 289.6 362.7 99.6 26.8 80.2 20.9 77.1 22.6 3.8 108.8 1,273.5 1,193.1 80.4 1,273.5 181.5 255.9 158.9 62.4 7.7 99.8 18.6 19.9 25.4 1.9 38.4 870.4 841.1 29.3 870.4 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 222/336 31. Deferred tax assets and liabilities Deferred tax assets and liabilities arise from the following positions: In millions of CHF Deferred tax assets Inventories Property, plant and equipment Intangible assets Lease obligations Provisions and other payables Tax loss carry-forward Other Total Deferred tax liabilities Property, plant and equipment Right-of-use assets Intangible assets Provisions and other payables Other Total Deferred tax liabilities net Deferred tax balances are presented in the consolidated statement of financial position as follows: In millions of CHF Deferred tax assets Deferred tax liabilities Balance at December 31 Reconciliation of movements to the deferred taxes: In millions of CHF Changes in deferred tax assets Changes in deferred tax liabilities Business combinations (note 6) Currency translation adjustments Deferred tax movements (expense) at December 31 Thereof Recognized in the statement of profit or loss Recognized in equity Recognized in OCI 31.12.2023 31.12.2022 12.4 38.6 42.7 1,433.2 76.9 75.7 7.6 1,687.1 (24.8) (1,403.1) (445.2) (51.4) (8.3) (1,932.8) (245.7) 2023 164.7 (410.4) (245.7) 2023 19.3 (189.0) 225.8 (16.4) 39.7 39.8 – (0.1) 14.9 64.1 46.4 286.9 51.5 89.6 4.5 557.9 (34.7) (295.6) (282.9) (13.2) (7.5) (633.9) (76.0) 2022 145.4 (221.4) (76.0) 2022 (34.5) 54.0 – (18.5) 1.0 (3.1) – 4.1 Tax loss carry forward Certain subsidiaries incurred tax losses, which according to the local tax legislation gives rise to a tax credit usable in future tax periods. However, the use of this tax benefit 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 carry forwards or temporary differ- ences 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 2024 and the management projections thereafter. The unrecognized tax losses carry forwards by expiry date are as follows: In millions of CHF Expiring within 1 to 3 years Expiring within 4 to 7 years Expiring after 7 years With no expiration limit Total 31.12.2023 31.12.2022 358.5 750.4 27.5 1,580.5 2,716.9 292.1 775.6 117.4 1,089.4 2,274.5 Unrecognized deferred tax assets Avolta has unrecognized tax losses as shown in the table above which could lead to a potential tax benefit amounting to CHF 607.4 (2022: CHF 502.2) million. The unrecog- nized tax losses can be allocated to the following countries: Switzerland CHF 694.3 mil- lion; Spain CHF 358.7 million; Italy CHF 349.1 million; Brazil CHF 210.3 million; Nether- lands CHF 207.9 million; Australia CHF 148.0 million; US CHF 84.8 million; Mexico CHF 81.6 million; Russia CHF 52.7 million; Belgium CHF 51.7 million and other countries CHF 477.9 million. In addition, Avolta has unrecognized temporary differences of CHF 170.5 (2022: CHF 163.1) million tax effected. These tax effected unrecognized temporary differences can be allocated to the following countries: Spain CHF 59.4 million; Switzerland CHF 31.8 million; Brazil CHF 27.9 million; US CHF 16.2 million; Mexico CHF 11.4 million and other countries CHF 23.8 million. Unrecognized deferred tax liabilities Avolta has not recognized deferred tax liabilities associated with investments in subsid- iaries where Avolta can control the reversal of the timing differences and where it is not probable that the temporary differences will reverse in the foreseeable future. Avolta 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 recov- ered. 31. Deferred tax assets and liabilities Deferred tax assets and liabilities arise from the following positions: 31.12.2023 31.12.2022 In millions of CHF Deferred tax assets Inventories Property, plant and equipment Intangible assets Lease obligations Provisions and other payables Tax loss carry-forward Other Total Other Total Deferred tax liabilities Property, plant and equipment Right-of-use assets Intangible assets Provisions and other payables Deferred tax liabilities net as follows: In millions of CHF Deferred tax assets Deferred tax liabilities Balance at December 31 Reconciliation of movements to the deferred taxes: In millions of CHF Changes in deferred tax assets Changes in deferred tax liabilities Business combinations (note 6) Currency translation adjustments Deferred tax movements (expense) at December 31 Thereof Recognized in the statement of profit or loss Recognized in equity Recognized in OCI Deferred tax balances are presented in the consolidated statement of financial position 1,433.2 12.4 38.6 42.7 76.9 75.7 7.6 1,687.1 (24.8) (1,403.1) (445.2) (51.4) (8.3) (1,932.8) (245.7) 2023 164.7 (410.4) (245.7) 2023 19.3 (189.0) 225.8 (16.4) 39.7 39.8 – (0.1) 14.9 64.1 46.4 286.9 51.5 89.6 4.5 557.9 (34.7) (295.6) (282.9) (13.2) (7.5) (633.9) (76.0) 2022 145.4 (221.4) (76.0) 2022 (34.5) 54.0 – (18.5) 1.0 (3.1) – 4.1 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 223/336 Tax loss carry forward Certain subsidiaries incurred tax losses, which according to the local tax legislation gives rise to a tax credit usable in future tax periods. However, the use of this tax benefit 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 carry forwards or temporary differ- ences 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 2024 and the management projections thereafter. The unrecognized tax losses carry forwards by expiry date are as follows: In millions of CHF Expiring within 1 to 3 years Expiring within 4 to 7 years Expiring after 7 years With no expiration limit Total 31.12.2023 31.12.2022 358.5 750.4 27.5 1,580.5 2,716.9 292.1 775.6 117.4 1,089.4 2,274.5 Unrecognized deferred tax assets Avolta has unrecognized tax losses as shown in the table above which could lead to a potential tax benefit amounting to CHF 607.4 (2022: CHF 502.2) million. The unrecog- nized tax losses can be allocated to the following countries: Switzerland CHF 694.3 mil- lion; Spain CHF 358.7 million; Italy CHF 349.1 million; Brazil CHF 210.3 million; Nether- lands CHF 207.9 million; Australia CHF 148.0 million; US CHF 84.8 million; Mexico CHF 81.6 million; Russia CHF 52.7 million; Belgium CHF 51.7 million and other countries CHF 477.9 million. In addition, Avolta has unrecognized temporary differences of CHF 170.5 (2022: CHF 163.1) million tax effected. These tax effected unrecognized temporary differences can be allocated to the following countries: Spain CHF 59.4 million; Switzerland CHF 31.8 million; Brazil CHF 27.9 million; US CHF 16.2 million; Mexico CHF 11.4 million and other countries CHF 23.8 million. Unrecognized deferred tax liabilities Avolta has not recognized deferred tax liabilities associated with investments in subsid- iaries where Avolta can control the reversal of the timing differences and where it is not probable that the temporary differences will reverse in the foreseeable future. Avolta 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 recov- ered. Other Other provisions comprise mainly potential liabilities to cover the cost for restoration of leased shops to their original condition at the end of the lease agreement and restruc- turing costs. These provisions relate mainly to operation in EMEA and APAC. Cash outflows of non-current provisions The cash outflows of non-current provisions as of December 31, 2023 are expected to occur in: In millions of CHF 2025 2026 2027 2028 2029+ Total non-current Expected cash outflow 25.3 7.0 7.5 2.1 32.2 74.1 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 224/336 32. Provisions 2023 In millions of CHF Contingent liabilities Onerous contract Closedown Lawsuits and duties Labor disputes Other Total Balance at January 1, 2023 Business combinations (note 6) Charge for the year Utilized Unused amounts reversed Currency translation adjustments Balance at December 31, 2023 Thereof Current Non-current 8.7 13.7 – – – (1.8) 20.6 – 20.6 8.4 8.9 2.7 (8.3) (0.9) (1.1) 9.7 5.9 3.8 6.4 – 0.7 (2.8) (0.2) (0.5) 3.6 3.6 – 43.6 11.0 1.9 – (3.7) (1.5) 51.3 51.3 – 3.0 1.1 2.6 (1.2) (1.9) (0.3) 3.3 0.5 2.8 63.2 46.1 27.3 (3.0) (37.4) (4.9) 91.3 44.4 46.9 133.3 80.8 35.2 (15.3) (44.1) (10.1) 179.8 105.7 74.1 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 liabilities Contingent liabilities are recognized in connection with business combinations, usually in relation with legal claims, from which the final outcome is difficult to assess. Onerous contracts Avolta enters in certain non-cancellable agreements. 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 require management to project future sales and operating profits. At balance sheet date, an amount of CHF 9.7 (2022: 8.4) million has been provided mainly in relation to three oper- ation in the region Europe, Middle East and Africa (EMEA) and one operation in Latin America (LATAM). Close down The provision of CHF 3.6 (2022: 6.4) million relates mainly to four operations in Asia Pacific (APAC) and three in EMEA. Lawsuits and duties The provision for lawsuits and duties of CHF 51.3 (2022: 43.6) million covers uncertain- ties related to the outcome of law suits in relation to taxes-other than income, duties and includes risk in relation to concession fees in connection with Avolta’s subsidiaries in EMEA, North America and LATAM. Labor disputes The provision of CHF 3.3 (2022: 3.0) million relates mainly to claims presented by Avolta employees mainly in EMEA and LATAM. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 225/336 Other Other provisions comprise mainly potential liabilities to cover the cost for restoration of leased shops to their original condition at the end of the lease agreement and restruc- turing costs. These provisions relate mainly to operation in EMEA and APAC. Cash outflows of non-current provisions The cash outflows of non-current provisions as of December 31, 2023 are expected to occur in: In millions of CHF 2025 2026 2027 2028 2029+ Total non-current Expected cash outflow 25.3 7.0 7.5 2.1 32.2 74.1 32. Provisions Balance at January 1, 2023 Business combinations (note 6) Charge for the year Utilized Unused amounts reversed Currency translation adjustments Balance at December 31, 2023 Thereof Current Non-current 2023 In millions of CHF Contingent liabilities Onerous contract Lawsuits Closedown and duties Labor disputes Other Total 8.7 13.7 – – – (1.8) 20.6 – 20.6 8.4 8.9 2.7 (8.3) (0.9) (1.1) 9.7 5.9 3.8 6.4 – 0.7 (2.8) (0.2) (0.5) 3.6 3.6 – 43.6 11.0 1.9 – (3.7) (1.5) 51.3 51.3 – 3.0 1.1 2.6 (1.2) (1.9) (0.3) 3.3 0.5 2.8 63.2 46.1 27.3 (3.0) (37.4) (4.9) 91.3 44.4 46.9 133.3 80.8 35.2 (15.3) (44.1) (10.1) 179.8 105.7 74.1 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 liabilities Contingent liabilities are recognized in connection with business combinations, usually in relation with legal claims, from which the final outcome is difficult to assess. Onerous contracts Avolta enters in certain non-cancellable agreements. 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 require management to project future sales and operating profits. At balance sheet date, an amount of CHF 9.7 (2022: 8.4) million has been provided mainly in relation to three oper- ation in the region Europe, Middle East and Africa (EMEA) and one operation in Latin The provision of CHF 3.6 (2022: 6.4) million relates mainly to four operations in Asia America (LATAM). Close down Pacific (APAC) and three in EMEA. Lawsuits and duties The provision for lawsuits and duties of CHF 51.3 (2022: 43.6) million covers uncertain- ties related to the outcome of law suits in relation to taxes-other than income, duties and includes risk in relation to concession fees in connection with Avolta’s subsidiaries in EMEA, North America and LATAM. Labor disputes The provision of CHF 3.3 (2022: 3.0) million relates mainly to claims presented by Avolta employees mainly in EMEA and LATAM. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 226/336 33. Post-employment benefit obligation Avolta provides retirement benefits through a variety of arrangements comprised prin- cipally of stand-alone defined benefit or defined contribution plans, or state adminis- tered plans that cover a substantial portion of employees in accordance with local reg- ulations and practices. The most significant plans in terms of the benefits accrued to date by participants are cash balance and final salary plans. Around 93.8 % (2022: 93.0 %) of the total defined benefit obligation and 96.7 % (2022: 96.6 %) of the plan assets correspond to pension funds in Switzerland, the United Kingdom (UK) and Italy. In millions of CHF Funded Unfunded Switzerland Fair value of plan assets Present value of defined benefit obligation Financial (liability) asset UK Fair value of plan assets Present value of defined benefit obligation Financial (liability) asset Italy Fair value of plan assets Present value of defined benefit obligation Financial (liability) asset Other plans Fair value of plan assets Present value of defined benefit obligation Financial (liability) asset Carrying amount Net defined benefit assets Net defined benefit obligation 33.1 Switzerland 263.7 (244.5) 19.2 129.0 (114.9) 14.1 – – – 9.4 (18.7) (9.3) 36.0 (11.9) – – – – – – – (28.5) (28.5) 3.9 (7.0) (3.1) – (31.6) 2023 Total 263.7 (244.5) 19.2 129.0 (114.9) 14.1 – (28.5) (28.5) 13.3 (25.7) (12.4) 36.0 (43.5) Funded Unfunded 151.3 (151.3) – 132.1 (115.1) 17.0 – – – 10.0 (11.4) (1.4) 17.0 (1.4) – – – – – – – (2.1) (2.1) – (8.8) (8.8) – (10.9) 2022 Total 151.3 (151.3) – 132.1 (115.1) 17.0 – (2.1) (2.1) 10.0 (20.2) (10.2) 17.0 (12.3) In Switzerland two pension plans are in place, one already existing before the acquisi- tion (CHF 170.7 million of liabilities and CHF 192.5 million of assets at December 31, 2023), whereas the second plan is related to the acquired entities in Switzerland (refer- ring to note 6) with CHF 73.8 million of liabilities and CHF 71.2 million of assets at December 31, 2023. Both pension plans are cash balance plans where contributions are made by employees and employer based on a percentage of the insured salary. The pension plans guarantee the amount accrued on the members saving account, as well as interest on those savings amounts. At retirement date, the savings account are con- verted into pensions, or optionally part of the savings can be paid out as a lump sum. Legal framework Pension plans in Switzerland are governed by the Federal Law on Occupational Retire- ment, 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. Main risks The main risks to which the pension fund is exposed are: a) mortality risk, when the effective average life results to be longer than the assumptions used based on the offi- cial 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 asset-liabilities relation of the pension fund. These risks are reg- ularly monitored by an actuary and the Board of Trustees. Asset-liability management Both Swiss pension funds currently invest in a diverse portfolio of asset classes including equities, bonds, property and alternative investments but do not currently use any more explicit asset-liability 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. 33.2 United Kingdom (UK) Avolta participates in another defined benefit pension plan in the UK under specific reg- ulatory 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 representatives 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 pay- ments are made from the trustee-administered funds; however, where plans are under- funded, the company meets the benefit payment obligation as it falls due. 33.3 Italy The Group recognizes defined benefit plans in Italy related to the legal obligations for Italian post-employment benefits (“trattamento di fine rapporto” or “T.F.R.”). This relates to T.F.R. accrued at December 31, 2006 by employees of the Group’s italian companies. The calculation of the legal obligation due by the employer is foreseen by the art. 2120 of the Civil Code and it differs from the one calculated on actuarial basis (respectively CHF 29.5 million and CHF 28.5 million). Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 227/336 33. Post-employment benefit obligation Avolta provides retirement benefits through a variety of arrangements comprised prin- cipally of stand-alone defined benefit or defined contribution plans, or state adminis- tered plans that cover a substantial portion of employees in accordance with local reg- ulations and practices. The most significant plans in terms of the benefits accrued to date by participants are cash balance and final salary plans. Around 93.8 % (2022: 93.0 %) of the total defined benefit obligation and 96.7 % (2022: 96.6 %) of the plan assets correspond to pension funds in Switzerland, the United Kingdom (UK) and Italy. In millions of CHF Funded Unfunded Funded Unfunded 2023 Total 263.7 (244.5) 19.2 129.0 (114.9) 14.1 – (28.5) (28.5) 13.3 (25.7) (12.4) 36.0 (43.5) 263.7 (244.5) 19.2 129.0 (114.9) 14.1 – – – 9.4 (18.7) (9.3) 36.0 (11.9) – – – – – – – (28.5) (28.5) 3.9 (7.0) (3.1) – (31.6) 2022 Total 151.3 (151.3) – 132.1 (115.1) 17.0 – (2.1) (2.1) 10.0 (20.2) (10.2) 17.0 (12.3) 151.3 (151.3) – 132.1 (115.1) 17.0 – – – 10.0 (11.4) (1.4) 17.0 (1.4) – – – – – – – – (2.1) (2.1) (8.8) (8.8) – (10.9) Switzerland Fair value of plan assets Present value of defined benefit obligation Financial (liability) asset Fair value of plan assets Present value of defined benefit obligation Financial (liability) asset UK Italy Fair value of plan assets Present value of defined benefit obligation Financial (liability) asset Other plans Fair value of plan assets Present value of defined benefit obligation Financial (liability) asset Carrying amount Net defined benefit assets Net defined benefit obligation 33.1 Switzerland In Switzerland two pension plans are in place, one already existing before the acquisi- tion (CHF 170.7 million of liabilities and CHF 192.5 million of assets at December 31, 2023), whereas the second plan is related to the acquired entities in Switzerland (refer- ring to note 6) with CHF 73.8 million of liabilities and CHF 71.2 million of assets at December 31, 2023. Both pension plans are cash balance plans where contributions are made by employees and employer based on a percentage of the insured salary. The pension plans guarantee the amount accrued on the members saving account, as well as interest on those savings amounts. At retirement date, the savings account are con- verted into pensions, or optionally part of the savings can be paid out as a lump sum. Legal framework Pension plans in Switzerland are governed by the Federal Law on Occupational Retire- ment, 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. Main risks The main risks to which the pension fund is exposed are: a) mortality risk, when the effective average life results to be longer than the assumptions used based on the offi- cial 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 asset-liabilities relation of the pension fund. These risks are reg- ularly monitored by an actuary and the Board of Trustees. Asset-liability management Both Swiss pension funds currently invest in a diverse portfolio of asset classes including equities, bonds, property and alternative investments but do not currently use any more explicit asset-liability 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. 33.2 United Kingdom (UK) Avolta participates in another defined benefit pension plan in the UK under specific reg- ulatory 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 representatives 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 pay- ments are made from the trustee-administered funds; however, where plans are under- funded, the company meets the benefit payment obligation as it falls due. 33.3 Italy The Group recognizes defined benefit plans in Italy related to the legal obligations for Italian post-employment benefits (“trattamento di fine rapporto” or “T.F.R.”). This relates to T.F.R. accrued at December 31, 2006 by employees of the Group’s italian companies. The calculation of the legal obligation due by the employer is foreseen by the art. 2120 of the Civil Code and it differs from the one calculated on actuarial basis (respectively CHF 29.5 million and CHF 28.5 million). The following tables summarize the components of the funded status and amounts rec- ognized in the statement of financial position for the plan: Change in the fair value of plan assets In millions of CHF Switzerland Italy Switzerland Balance at January 1 Business combination Interest income 1 Return on plan assets, above interest income Contributions paid by employer Contributions paid by employees Benefits paid Administration costs Asset ceiling 2 Currency translation Balance at December 31 151.3 69.6 6.2 (5.6) 7.2 14.9 (23.9) 44.0 – – 263.7 UK 132.1 – 6.0 2.2 (5.7) – – – – (5.6) 129.0 2023 – – – – – – – – – – – 226.9 – 0.9 (19.7) 5.1 7.3 (15.6) (0.2) (53.3) (0.1) 151.3 UK 227.5 – 4.0 (72.8) – – – (5.0) (0.2) (21.4) 132.1 2022 Italy – – – – – – – – – – – 1 Expected interest income on plan assets based on discount rate. See actuarial assumptions. 2 The plan assets are larger than the DBO. However, as no economic benefit is expected, the net defined benefit asset must be ceiled. There is no economic benefit as the employer service cost is smaller than the employer’s expected contributions and no employer’s contribution reserve is available. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 228/336 With the introduction of Legislative Decree no. 124/93, the possibility of allocating post-employment benefit portions to finance supplementary pension provision was envisaged (the “Social Security Reform”). This reform provides, inter alia, that starting from January 1, 2007 the annual provision of participants who have decided not to allo- cate this provision to a pension fund is transferred, for companies with on average at least 50 employees during 2006, to a special Treasury Fund set up at INPS (the Italian social institution). Due to the above mentioned in the system of post-employment benefits brought about by Law 296 of December 27, 2006 and by the decrees and regulations issued in early 2007: – TFR accrued at December 31, 2006 by employees of the Group’s Italian companies is treated as a defined benefit plan in accordance with IAS 19. – TFR accrued from January 1, 2007 is treated as a defined contribution plan, so con- tributions accrued during the exercise are fully recognized as costs. Cost of defined benefit plans In millions of CHF Switzerland UK Italy Switzerland UK 2023 Service costs Current service costs Past service costs Net interest Fund Administration Total pension expenses recognized in the statement of profit or loss (4.6) (0.4) 0.1 (0.2) (5.1) – – 0.8 – 0.8 – – (0.9) – (6.3) 3.9 0.2 – (0.9) (2.2) – – 0.5 – 0.5 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 are a consequence of Avolta’s modified pension fund plan rules as of 1st of January 2023 (lower conversion rate and increase in the maximum insured salary). Remeasurements employee benefits 2023 In millions of CHF Switzerland UK Italy Switzerland UK Actuarial gains (losses) - experience Actuarial gains (losses) - demographic assumptions Actuarial gains (losses) - financial assumptions Return on plan assets exceeding expected interest Effect of asset ceiling Total remeasurements recorded in other comprehensive income 6.9 (1.0) (30.5) (5.6) 45.3 15.1 (3.0) 1.2 (3.3) 2.2 – (2.9) 0.2 – (0.7) – – (0.5) (7.9) – 50.2 (19.7) (53.3) (30.7) (9.1) 1.1 73.2 (72.8) – (7.6) 2022 Italy – – – – – 2022 Italy (0.1) – 0.4 – – 0.3 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 229/336 The following tables summarize the components of the funded status and amounts rec- ognized in the statement of financial position for the plan: Change in the fair value of plan assets In millions of CHF Switzerland Balance at January 1 Business combination Interest income 1 Return on plan assets, above interest income Contributions paid by employer Contributions paid by employees Benefits paid Administration costs Asset ceiling 2 Currency translation Balance at December 31 151.3 69.6 6.2 (5.6) 7.2 14.9 (23.9) – 44.0 – 263.7 UK 132.1 – 6.0 2.2 – – (5.7) – – (5.6) 129.0 2023 Italy Switzerland – – – – – – – – – – – 226.9 – 0.9 (19.7) 5.1 7.3 (15.6) (0.2) (53.3) (0.1) 151.3 UK 227.5 – 4.0 (72.8) – – (5.0) (0.2) – (21.4) 132.1 2022 Italy – – – – – – – – – – – 1 Expected interest income on plan assets based on discount rate. See actuarial assumptions. 2 The plan assets are larger than the DBO. However, as no economic benefit is expected, the net defined benefit asset must be ceiled. There is no economic benefit as the employer service cost is smaller than the employer’s expected contributions and no employer’s contribution reserve is available. With the introduction of Legislative Decree no. 124/93, the possibility of allocating post-employment benefit portions to finance supplementary pension provision was envisaged (the “Social Security Reform”). This reform provides, inter alia, that starting from January 1, 2007 the annual provision of participants who have decided not to allo- cate this provision to a pension fund is transferred, for companies with on average at least 50 employees during 2006, to a special Treasury Fund set up at INPS (the Italian social institution). 2007: Due to the above mentioned in the system of post-employment benefits brought about by Law 296 of December 27, 2006 and by the decrees and regulations issued in early – TFR accrued at December 31, 2006 by employees of the Group’s Italian companies is treated as a defined benefit plan in accordance with IAS 19. – TFR accrued from January 1, 2007 is treated as a defined contribution plan, so con- tributions accrued during the exercise are fully recognized as costs. Cost of defined benefit plans In millions of CHF Switzerland UK Italy Switzerland UK (0.9) (2.2) 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 are a consequence of Avolta’s modified pension fund plan rules as of 1st of January 2023 (lower conversion rate and increase in the maximum insured salary). Remeasurements employee benefits Service costs Current service costs Past service costs Net interest Fund Administration Total pension expenses recognized in the statement of profit or loss Actuarial gains (losses) - experience Actuarial gains (losses) - demographic assumptions Actuarial gains (losses) - financial assumptions Return on plan assets exceeding expected interest Effect of asset ceiling Total remeasurements recorded in other comprehensive income (4.6) (0.4) 0.1 (0.2) (5.1) 6.9 (1.0) (30.5) (5.6) 45.3 15.1 – – – 0.8 0.8 (3.0) 1.2 (3.3) 2.2 – (2.9) (6.3) 3.9 0.2 – (7.9) – 50.2 (19.7) (53.3) (30.7) – – – 0.5 0.5 (9.1) 1.1 73.2 (72.8) – (7.6) In millions of CHF Switzerland UK Italy Switzerland UK 2023 – – – (0.9) 2023 0.2 (0.7) – – – (0.5) 2022 Italy – – – – – 2022 Italy (0.1) 0.4 – – – 0.3 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 230/336 Change in present value of defined benefit obligation Plan asset structure The structure of categories of plan assets is as follows: In millions of CHF Switzerland Balance at January 1 Business combination Current service costs Interest costs Contributions paid by employees Actuarial losses / (gains) - experience Actuarial losses / (gains) - demographic assumptions Actuarial losses / (gains) - financial assumptions Benefits paid Past service cost - plan amendments Other Currency translation Balance at December 31 Net defined benefit (obligation) / asset at December 31 151.3 67.5 4.6 4.9 14.9 (6.9) 1.0 30.5 (23.9) 0.4 0.2 – 244.5 UK 115.1 – – 5.1 – 3.1 (1.2) 3.3 (5.7) – – (4.8) 114.9 2023 Italy 2.1 29.8 – 1.0 – (0.2) – 0.7 (2.7) – – (2.2) 28.5 Switzerland UK 198.8 200.6 6.3 0.8 7.3 7.9 – (50.2) (15.6) (3.9) – (0.1) 151.3 – – 3.5 – 9.1 (1.1) (73.2) (5.0) – – (18.8) 115.1 2022 Italy 3.1 – – – – 0.1 – (0.4) (0.2) – – (0.5) 2.1 19.2 14.1 (28.5) – 17.0 (2.1) Based on pension legislation of certain countries the employer and / or the employees have the obligation to remedy any default situation of the pension foundation, which usually would result in higher periodic contributions. At the statement of financial posi- tion date, there was no such default situation. The actuarial calculations based on IAS 19 resulted in a defined benefit obligation / asset. Actuarial assumptions The present value of the defined benefit obligation is determined annually by indepen- dent actuaries using the projected unit credit method. The main actuarial assumptions used are: In percentage (%) Discount rates Future salary increases Future pension increases Mortality table (generational tables) Switzerland 1.50 1.80 – UK 4.50 – 1.80 2020 2022 2023 Italy Switzerland 2.99 2.00 3.00 2022 2.30 1.50 – UK 4.75 – 1.85 2,020 2,021 2022 Italy 3.6 n/a 3.2 n/a The mortality table takes into account changes in the life expectancy. In percentage (%) Switzerland Italy Switzerland 31.0 21.8 32.2 15.0 100.0 UK 99.7 – – 0.3 100.0 27.2 13.9 45.7 13.2 100.0 UK 99.6 – – 0.4 100.0 Real estate Shares Bonds Other 1 Total 1 Includes Cash and cash equivalents (CHF 3.2 million in 2023) 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 investments in Switzerland which are fair-value-level 3 (significant unobservable inputs) representing 36.5 % (2022: 45.7 %) of the total assets. The net outflow of funds due to pension payments can be planned reliably. Contribu- tions 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. Avolta does not make use of any assets held by these pension plans. Plan participants In millions of CHF Switzerland Italy Switzerland Expected cash flow for Contribution Employer Contribution Employees Weighted average duration of defined benefit 5.2 7.4 17.2 UK – – 17.1 UK – – 16.0 4.9 3.0 15.7 2023 n / a n / a n / a n / a n/a 2023 n / a n / a 7.6 2022 Italy n / a n / a n / a n / a n/a 2022 Italy n/a n/a 8.0 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 231/336 Change in present value of defined benefit obligation Plan asset structure The structure of categories of plan assets is as follows: In millions of CHF Switzerland Switzerland UK 198.8 200.6 In percentage (%) Switzerland Shares Bonds Real estate Other 1 Total 31.0 21.8 32.2 15.0 100.0 UK 99.7 – – 0.3 100.0 2023 Italy Switzerland n / a n / a n / a n / a n/a 27.2 13.9 45.7 13.2 100.0 UK 99.6 – – 0.4 100.0 1 Includes Cash and cash equivalents (CHF 3.2 million in 2023) 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 investments in Switzerland which are fair-value-level 3 (significant unobservable inputs) representing 36.5 % (2022: 45.7 %) of the total assets. The net outflow of funds due to pension payments can be planned reliably. Contribu- tions 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. Avolta does not make use of any assets held by these pension plans. Plan participants In millions of CHF Switzerland Expected cash flow for Contribution Employer Contribution Employees Weighted average duration of defined benefit 5.2 7.4 17.2 UK – – 17.1 2023 Italy Switzerland n / a n / a 7.6 4.9 3.0 15.7 UK – – 16.0 151.3 67.5 4.6 4.9 14.9 (6.9) 1.0 30.5 (23.9) 0.4 0.2 – 244.5 UK 115.1 – – – 5.1 3.1 (1.2) 3.3 (5.7) – – (4.8) 114.9 6.3 0.8 7.3 7.9 – (50.2) (15.6) (3.9) – (0.1) 151.3 – – – 3.5 9.1 (1.1) (73.2) (5.0) – – (18.8) 115.1 19.2 14.1 (28.5) – 17.0 (2.1) Balance at January 1 Business combination Current service costs Interest costs Contributions paid by employees Actuarial losses / (gains) - experience Actuarial losses / (gains) - demographic assumptions Actuarial losses / (gains) - financial assumptions Benefits paid Past service cost - plan amendments Other Currency translation Balance at December 31 Net defined benefit (obligation) / asset at December 31 Actuarial assumptions used are: In percentage (%) Discount rates Future salary increases Future pension increases Mortality table (generational tables) Based on pension legislation of certain countries the employer and / or the employees have the obligation to remedy any default situation of the pension foundation, which usually would result in higher periodic contributions. At the statement of financial posi- tion date, there was no such default situation. The actuarial calculations based on IAS 19 resulted in a defined benefit obligation / asset. The present value of the defined benefit obligation is determined annually by indepen- dent actuaries using the projected unit credit method. The main actuarial assumptions Switzerland Italy Switzerland 1.50 1.80 – UK 4.50 – 1.80 2.30 1.50 – UK 4.75 – 1.85 2020 2022 2,020 2,021 The mortality table takes into account changes in the life expectancy. 2023 Italy 2.1 29.8 1.0 – – (0.2) 0.7 (2.7) – – – (2.2) 28.5 2023 2.99 2.00 3.00 2022 2022 Italy 3.1 – – – – – – – 0.1 (0.4) (0.2) (0.5) 2.1 2022 Italy 3.6 n/a 3.2 n/a 2022 Italy n / a n / a n / a n / a n/a 2022 Italy n/a n/a 8.0 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 232/336 Sensitivities of significant actuarial assumptions The discount rate and the future salary increase were identified as significant actuarial assumptions. A change of 0.5 % in the below assumptions would imply the following impacts on the defined benefit obligation: 2023 In millions of CHF Discount rate Salary rate Switzerland UK Italy Increase Decrease Increase Decrease Increase Decrease (18.7) 2.7 20.5 (3.5) (4.8) – 4.8 – (1.8) 1.9 1.9 (1.8) 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 sepa- rately as part of the test. Interdependencies were not taken into account. 34. Fair value measurement Fair value of financial instruments carried at amortized cost Except as detailed in the table Quantitative disclosures fair value measurement hier- archy for assets below, Avolta 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 Avolta’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). The valuation of the put option related to unlisted shares is derived from the propor- tional share of the net assets. The movement of the put option is recorded through equity instead of through profit or loss. Sensitivities of significant actuarial assumptions The discount rate and the future salary increase were identified as significant actuarial assumptions. A change of 0.5 % in the below assumptions would imply the following impacts on the defined benefit obligation: 2023 In millions of CHF Discount rate Salary rate Switzerland Increase Decrease Increase Decrease Increase Decrease (18.7) 2.7 20.5 (3.5) (4.8) – (1.8) 1.9 Italy 1.9 (1.8) UK 4.8 – 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 sepa- rately as part of the test. Interdependencies were not taken into account. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 233/336 34. Fair value measurement Fair value of financial instruments carried at amortized cost Except as detailed in the table Quantitative disclosures fair value measurement hier- archy for assets below, Avolta 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 Avolta’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). The valuation of the put option related to unlisted shares is derived from the propor- tional share of the net assets. The movement of the put option is recorded through equity instead of through profit or loss. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 234/336 Quantitative disclosures fair value measurement hierarchy for assets Quantitative disclosures fair value measurement hierarchy for liabilities December 31, 2023 In millions of CHF Assets measured at fair value Derivative financial assets Foreign exchange forward contracts - USD Foreign exchange swaps contracts - EUR Foreign exchange swaps contracts - OTHER Cross currency swaps contracts - EUR Subtotal (note 37.3) Short-term investments - USD Money market deposits - USD Total Assets for which fair values are disclosed Loans and receivables Trade and credit card receivables December 31, 2022 In millions of CHF Assets measured at fair value Derivative financial assets Foreign exchange forward contracts - USD Foreign exchange swaps contracts - EUR Foreign exchange swaps contracts - OTHER Cross currency swaps contracts - EUR Options - USD Total (note 37.3) Assets for which fair values are disclosed Loans and receivables Trade and credit card receivables Quoted prices in active markets (Level 1) Significant observ- able inputs (Level 2) Significant unob- servable inputs (Level 3) Total Carrying amounts Fair value measurement using Quoted prices in Significant observ- Total active markets (Level 1) able inputs (Level 2) Significant unob- servable inputs (Level 3) Carrying amounts Fair value measurement using – – 4.4 4.9 9.3 54.9 16.8 81.0 – – – – – 54.9 – 54.9 – – 4.4 4.9 9.3 – 16.8 26.1 4.7 – 4.7 – – – – – – – – – – – 4.4 4.9 9.3 54.9 16.8 81.0 4.7 Quoted prices in active markets (Level 1) Significant observ- able inputs (Level 2) Significant unob- servable inputs (Level 3) Total Carrying amounts Fair value measurement using 0.1 3.7 0.5 5.1 0.7 10.1 62.0 – – – – – – – 0.1 3.7 0.5 5.1 0.7 10.1 62.0 – – – – – – – 0.1 3.7 0.5 5.1 0.7 10.1 62.3 December 31, 2023 In millions of CHF Liabilities measured at fair value Derivative financial liabilities Foreign exchange forward contracts - USD Foreign exchange swaps contracts - EUR Foreign exchange swaps contracts - OTHER Cross currency swaps contracts - EUR Put option Dufry Staer Holding Ltd Total (Note 37.3) Liabilities for which fair values are disclosed At amortized cost Senior notes CHF 300 Senior notes EUR 800 Senior notes EUR 750 Senior notes EUR 725 Convertible notes CHF 500 Total RCF - multicurrency - USD RCF - multicurrency - EUR Related deferred arrangement fees Short-term financing Total 0.1 4.8 – 75.3 26.8 107.0 297.3 730.6 650.7 643.6 470.4 311.8 46.5 – – 358.3 – – – – – – – – – – – 297.3 730.6 650.7 643.6 470.4 0.1 4.8 75.3 80.2 – – – – – – – – – – 311.8 46.5 358.3 2,792.6 2,792.6 26.8 26.8 – – – – – – – – – – – – – – – 0.1 4.8 – 75.3 26.8 107.0 299.4 745.9 692.0 672.1 471.6 2,881.0 311.4 46.4 (18.1) – 339.7 There were no transfers between Level 1 and 2 during the period. There were no transfers between Level 1 and 2 during the period. Quantitative disclosures fair value measurement hierarchy for assets Quantitative disclosures fair value measurement hierarchy for liabilities Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 235/336 December 31, 2023 In millions of CHF Assets measured at fair value Derivative financial assets Foreign exchange forward contracts - USD Foreign exchange swaps contracts - EUR Foreign exchange swaps contracts - OTHER Cross currency swaps contracts - EUR Subtotal (note 37.3) Short-term investments - USD Money market deposits - USD Total Assets for which fair values are disclosed Loans and receivables Trade and credit card receivables December 31, 2022 In millions of CHF Assets measured at fair value Derivative financial assets Foreign exchange forward contracts - USD Foreign exchange swaps contracts - EUR Foreign exchange swaps contracts - OTHER Cross currency swaps contracts - EUR Options - USD Total (note 37.3) Assets for which fair values are disclosed Loans and receivables Trade and credit card receivables Quoted prices in Significant observ- Total active markets (Level 1) able inputs (Level 2) Significant unob- servable inputs (Level 3) Carrying amounts Fair value measurement using – – 4.4 4.9 9.3 – 16.8 26.1 4.7 0.1 3.7 0.5 5.1 0.7 10.1 – – 4.4 4.9 9.3 54.9 16.8 81.0 4.7 0.1 3.7 0.5 5.1 0.7 10.1 54.9 54.9 – – – – – – – – – – – – – – – – 4.4 4.9 9.3 54.9 16.8 81.0 4.7 0.1 3.7 0.5 5.1 0.7 10.1 – – – – – – – – – – – – – – – – Quoted prices in Significant observ- Total active markets (Level 1) able inputs (Level 2) Significant unob- servable inputs (Level 3) Carrying amounts Fair value measurement using There were no transfers between Level 1 and 2 during the period. 62.0 62.0 62.3 December 31, 2023 In millions of CHF Liabilities measured at fair value Derivative financial liabilities Foreign exchange forward contracts - USD Foreign exchange swaps contracts - EUR Foreign exchange swaps contracts - OTHER Cross currency swaps contracts - EUR Put option Dufry Staer Holding Ltd Total (Note 37.3) Liabilities for which fair values are disclosed At amortized cost Senior notes CHF 300 Senior notes EUR 800 Senior notes EUR 750 Senior notes EUR 725 Convertible notes CHF 500 Total RCF - multicurrency - USD RCF - multicurrency - EUR Related deferred arrangement fees Short-term financing Total Quoted prices in active markets (Level 1) Significant observ- able inputs (Level 2) Significant unob- servable inputs (Level 3) Total Carrying amounts Fair value measurement using 0.1 4.8 – 75.3 26.8 107.0 297.3 730.6 650.7 643.6 470.4 – – – – – – 297.3 730.6 650.7 643.6 470.4 2,792.6 2,792.6 311.8 46.5 – – 358.3 – – – – – 0.1 4.8 – 75.3 – 80.2 – – – – – – 311.8 46.5 – – 358.3 – – – – 26.8 26.8 – – – – – – – – – – – 0.1 4.8 – 75.3 26.8 107.0 299.4 745.9 692.0 672.1 471.6 2,881.0 311.4 46.4 (18.1) – 339.7 There were no transfers between Level 1 and 2 during the period. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 236/336 December 31, 2022 In millions of CHF Liabilities measured at fair value Derivative financial liabilities Foreign exchange forward contracts - USD Foreign exchange swaps contracts - EUR Foreign exchange forward contracts - OTHER Cross currency swaps contracts - EUR Put option Dufry Staer Holding Ltd Total Liabilities for which fair values are disclosed At amortized cost Senior notes CHF 300 Senior notes EUR 800 Senior notes EUR 750 Senior notes EUR 725 Convertible notes CHF 500 Total Floating rate borrowings USD Total Quoted prices in active markets (Level 1) Significant observ- able inputs (Level 2) Significant unob- servable inputs (Level 3) Total Carrying amounts Fair value measurement using Capital 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. 35. Capital risk management 0.1 – 0.6 99.1 7.7 107.5 262.6 765.2 604.2 592.9 420.2 – – – – – – 262.6 765.2 604.2 592.9 420.2 2,645.1 2,645.1 0.1 – 0.6 99.1 – 99.8 – – – – – – 412.8 412.8 – – 412.8 412.8 – – – – 7.7 7.7 – – – – – – – – 0.1 – 0.6 99.1 7.7 107.5 298.9 790.3 732.1 712.2 459.5 2,993.0 392.2 392.2 The primary objective of Avolta’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. Avolta 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 main- tain or adjust the financing structure, Avolta may adjust dividend payments to share- holders, return capital to shareholders, issue new shares or issue equity-linked instru- ments or equity-like instruments. Furthermore, Avolta monitors the financing structure using a combination of ratios, including a gearing ratio, cash flow considerations and profitability ratios. As for the gearing ratio Avolta includes within net debt, interest bearing loans and borrowings, less Avolta has a medium-term leverage target of 1.5-2.0x net debt/CORE EBITDA with flex- cash and cash equivalents. ibility up to 2.5x. 35.1 Gearing ratio The following ratio compares owner’s equity to borrowed funds: There were no transfers between Level 1 and 2 during the period. In millions of CHF Cash and cash equivalents Borrowings, current Borrowings, non-current Borrowings, net (excluding derivatives) Equity attributable to equity holders of the parent Adjusted for Accumulated hedged gains / (losses) Effects from transactions with non-controlling interests 1 Total capital 2 Total net debt and capital Gearing ratio 31.12.2023 31.12.2022 (714.6) 819.4 2,520.6 2,625.4 2,360.8 (185.9) 2,412.1 4,587.0 7,212.4 36.4% (854.7) 122.7 3,452.3 2,720.3 893.0 (171.6) 1,497.9 2,219.3 4,939.6 55.1% 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 Avolta that are managed as capital. Avolta did not hold collateral of any kind at the reporting dates. December 31, 2022 In millions of CHF Liabilities measured at fair value Derivative financial liabilities Foreign exchange forward contracts - USD Foreign exchange swaps contracts - EUR Foreign exchange forward contracts - OTHER Cross currency swaps contracts - EUR Put option Dufry Staer Holding Ltd Total Liabilities for which fair values are disclosed At amortized cost Senior notes CHF 300 Senior notes EUR 800 Senior notes EUR 750 Senior notes EUR 725 Convertible notes CHF 500 Total Total Floating rate borrowings USD 0.1 – 0.6 99.1 7.7 107.5 262.6 765.2 604.2 592.9 420.2 412.8 412.8 – – – – – – – – 262.6 765.2 604.2 592.9 420.2 2,645.1 2,645.1 0.1 – 0.6 99.1 – 99.8 – – – – – – 412.8 412.8 7.7 7.7 – – – – – – – – – – – – 0.1 – 0.6 99.1 7.7 107.5 298.9 790.3 732.1 712.2 459.5 2,993.0 392.2 392.2 There were no transfers between Level 1 and 2 during the period. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 237/336 Quoted prices in Significant observ- Total active markets (Level 1) able inputs (Level 2) Significant unob- servable inputs (Level 3) Carrying amounts Fair value measurement using Capital 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. 35. Capital risk management The primary objective of Avolta’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. Avolta 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 main- tain or adjust the financing structure, Avolta may adjust dividend payments to share- holders, return capital to shareholders, issue new shares or issue equity-linked instru- ments or equity-like instruments. Furthermore, Avolta monitors the financing structure using a combination of ratios, including a gearing ratio, cash flow considerations and profitability ratios. As for the gearing ratio Avolta includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents. Avolta has a medium-term leverage target of 1.5-2.0x net debt/CORE EBITDA with flex- ibility up to 2.5x. 35.1 Gearing ratio The following ratio compares owner’s equity to borrowed funds: In millions of CHF Cash and cash equivalents Borrowings, current Borrowings, non-current Borrowings, net (excluding derivatives) Equity attributable to equity holders of the parent Adjusted for Accumulated hedged gains / (losses) Effects from transactions with non-controlling interests 1 Total capital 2 Total net debt and capital Gearing ratio 31.12.2023 31.12.2022 (714.6) 819.4 2,520.6 2,625.4 2,360.8 (185.9) 2,412.1 4,587.0 7,212.4 36.4% (854.7) 122.7 3,452.3 2,720.3 893.0 (171.6) 1,497.9 2,219.3 4,939.6 55.1% 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 Avolta that are managed as capital. Avolta did not hold collateral of any kind at the reporting dates. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 238/336 35.2 Categories of financial instruments 35.3 Net income by IFRS 9 valuation category At December 31, 2023 Financial assets Financial Assets at December 31, 2023 In millions of CHF Interest income Other finance income From interest Foreign exchange gain / (loss) 1 Impairments / allowances 2 Total – from subsequent valuation Net (expense) / income In millions of CHF Interest expenses Amortization of arrangement fees Other finance expenses From interest Foreign exchange gain / (loss) 1 Total – from subsequent valuation Net (expense) / income Financial Liabilities at December 31, 2023 At amortized cost At FVPL 57.5 12.5 70.0 (8.6) 0.3 (8.3) 61.7 At amortized cost (534.9) (5.4) (25.1) (565.4) (41.5) (41.5) (606.9) 36.8 36.8 – – – – 36.8 At FVPL 1.0 – (62.4) (61.4) – – (61.4) Total 57.5 49.3 106.8 (8.6) 0.3 (8.3) 98.5 Total (533.9) (5.4) (87.5) (626.8) (41.5) (41.5) (668.3) 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. In millions of CHF At amortized cost At FVPL Subtotal Cash and cash equivalents Trade and credit card receivables Other accounts receivable Current Investment Other non-current assets Total 714.6 41.3 321.3 – 283.8 1,361.0 – – 26.1 54.9 – 81.0 714.6 41.3 347.4 54.9 283.8 1,442.0 Financial liabilities In millions of CHF At amortized cost At FVPL Subtotal Trade payables Borrowings, current Lease obligations, current Other liabilities Borrowings, non-current Lease obligations, non-current Other non-current liabilities Total 873.7 819.4 1,102.6 949.8 2,520.6 6,750.8 51.9 13,068.8 – – – 107.0 – – – 107.0 873.7 819.4 1,102.6 1,056.8 2,520.6 6,750.8 51.9 13,175.8 At December 31, 2022 Financial assets In millions of CHF At amortized cost At FVPL Subtotal Cash and cash equivalents Trade and credit card receivables Other accounts receivable Other non-current assets Total 854.7 62.3 309.8 119.6 1,346.4 – – 10.1 0.4 10.5 854.7 62.3 319.9 120.0 1,356.9 Financial liabilities In millions of CHF At amortized cost At FVPL Subtotal Trade payables Borrowings, current Lease obligations, current Other liabilities Borrowings, non-current Lease obligations, non-current Other non-current liabilities Total 486.4 122.7 992.4 647.0 3,452.3 2,010.2 29.3 7,740.3 – – – 107.5 – – – 107.5 486.4 122.7 992.4 754.5 3,452.3 2,010.2 29.3 7,847.8 1 Non-financial assets or non-financial liabilities comprise prepaid expenses and deferred income, which will not gen- erate a cash outflow or inflow as well as other tax positions. Non-financial assets 1 – – 228.8 – 28.3 Non-financial liabilities 1 – – – 136.3 – – 28.5 Non-financial assets 1 – – 147.7 35.8 Non-financial liabilities 1 – – – 86.6 – – – Total 714.6 41.3 576.2 54.9 312.1 Total 873.7 819.4 1,102.6 1,193.1 2,520.6 6,750.8 80.4 Total 854.7 62.3 467.6 155.8 Total 486.4 122.7 992.4 841.1 3,452.3 2,010.2 29.3 35.2 Categories of financial instruments 35.3 Net income by IFRS 9 valuation category At December 31, 2023 Financial assets Financial Assets at December 31, 2023 In millions of CHF At amortized cost At FVPL Subtotal Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 239/336 In millions of CHF Interest income Other finance income From interest Foreign exchange gain / (loss) 1 Impairments / allowances 2 Total – from subsequent valuation Net (expense) / income Financial Liabilities at December 31, 2023 In millions of CHF Interest expenses Amortization of arrangement fees Other finance expenses From interest Foreign exchange gain / (loss) 1 Total – from subsequent valuation Net (expense) / income At amortized cost At FVPL 57.5 12.5 70.0 (8.6) 0.3 (8.3) 61.7 At amortized cost (534.9) (5.4) (25.1) (565.4) (41.5) (41.5) (606.9) – 36.8 36.8 – – – 36.8 At FVPL 1.0 – (62.4) (61.4) – – (61.4) Total 57.5 49.3 106.8 (8.6) 0.3 (8.3) 98.5 Total (533.9) (5.4) (87.5) (626.8) (41.5) (41.5) (668.3) 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. In millions of CHF At amortized cost At FVPL Subtotal 81.0 1,442.0 Financial liabilities Cash and cash equivalents Trade and credit card receivables Other accounts receivable Current Investment Other non-current assets Total Trade payables Borrowings, current Lease obligations, current Other liabilities Borrowings, non-current Lease obligations, non-current Other non-current liabilities Total Cash and cash equivalents Trade and credit card receivables Other accounts receivable Other non-current assets Total Trade payables Borrowings, current Lease obligations, current Other liabilities Borrowings, non-current Lease obligations, non-current Other non-current liabilities Total 714.6 41.3 321.3 – 283.8 1,361.0 873.7 819.4 1,102.6 949.8 2,520.6 6,750.8 51.9 13,068.8 854.7 62.3 309.8 119.6 1,346.4 486.4 122.7 992.4 647.0 3,452.3 2,010.2 29.3 7,740.3 Non-financial assets 1 228.8 28.3 Non-financial liabilities 1 – – – – – – – – 136.3 28.5 Non-financial assets 1 – – 147.7 35.8 Non-financial liabilities 1 86.6 – – – – – – 714.6 41.3 347.4 54.9 283.8 873.7 819.4 1,102.6 1,056.8 2,520.6 6,750.8 51.9 13,175.8 854.7 62.3 319.9 120.0 1,356.9 486.4 122.7 992.4 754.5 3,452.3 2,010.2 29.3 7,847.8 26.1 54.9 – – – – – – – – – 107.0 107.0 – – 10.1 0.4 10.5 – – – – – – 107.5 107.5 Total 714.6 41.3 576.2 54.9 312.1 Total 873.7 819.4 1,102.6 1,193.1 2,520.6 6,750.8 80.4 Total 854.7 62.3 467.6 155.8 Total 486.4 122.7 992.4 841.1 3,452.3 2,010.2 29.3 At December 31, 2022 Financial assets In millions of CHF At amortized cost At FVPL Subtotal In millions of CHF At amortized cost At FVPL Subtotal Financial liabilities 1 Non-financial assets or non-financial liabilities comprise prepaid expenses and deferred income, which will not gen- erate a cash outflow or inflow as well as other tax positions. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 240/336 Financial Assets at December 31, 2022 In millions of CHF Interest income Other finance income From interest Foreign exchange gain / (loss) 1 Impairments / allowances 2 Total – from subsequent valuation Net (expense) / income Financial Liabilities at December 31, 2022 In millions of CHF Interest expenses Amortization of arrangement fees Other finance expenses From interest Foreign exchange gain / (loss) 1 Total – from subsequent valuation Net (expense) / income At amortized cost At FVPL 31.0 0.1 31.1 37.4 (2.6) 34.8 65.9 – 24.1 24.1 1.4 – 1.4 25.5 At amortized cost At FVPL (284.6) (18.3) (6.7) (309.6) 10.0 10.0 (299.6) – – (38.7) (38.7) (72.0) (72.0) (110.7) Total 31.0 24.2 55.2 38.8 (2.6) 36.2 91.4 Total (284.6) (18.3) (45.4) (348.3) (62.0) (62.0) (410.3) 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 objectives Avolta has worldwide activities which are financed in different currencies and are con- sequently affected by fluctuations of foreign exchange and interest rates. Avolta’s trea- sury 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. Avolta continuously monitors the market risk, such as risks related to foreign currency, interest rate, credit, liquidity and capital. Avolta seeks to minimize the currency expo- sure 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. 37. Market risk Avolta’s financial assets and liabilities are mainly exposed to market risk in foreign cur- rency exchange and interest rates. Avolta’s objective is to minimize the impact on state- ment 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, Avolta may use financial instruments to hedge the respective exposure. Avolta may enter into a variety of financial instruments to manage its exposure to for- eign currency risk, including forward foreign exchange contracts, currency swaps and over the counter plain vanilla options. During the current financial year, Avolta utilized foreign currency forward contracts and options for hedging purposes. 37.1 Foreign currency risk management Avolta manages the cash flow surplus or deficits in foreign currency of the operations through FX-transactions in the respective local currency. Major imbalances in foreign currencies at Group level are hedged through foreign exchange forwards contracts. The terms of the foreign currency forward contracts have been negotiated to match the terms of the forecasted transactions. Financial Assets at December 31, 2022 At amortized cost At FVPL In millions of CHF Interest income Other finance income From interest Foreign exchange gain / (loss) 1 Impairments / allowances 2 Total – from subsequent valuation Net (expense) / income In millions of CHF Interest expenses Amortization of arrangement fees Other finance expenses From interest Foreign exchange gain / (loss) 1 Total – from subsequent valuation Net (expense) / income 31.0 0.1 31.1 37.4 (2.6) 34.8 65.9 (284.6) (18.3) (6.7) (309.6) 10.0 10.0 (299.6) – 24.1 24.1 1.4 – 1.4 25.5 – – (38.7) (38.7) (72.0) (72.0) (110.7) Total 31.0 24.2 55.2 38.8 (2.6) 36.2 91.4 Total (284.6) (18.3) (45.4) (348.3) (62.0) (62.0) (410.3) 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. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 241/336 36. Financial risk management objectives Avolta has worldwide activities which are financed in different currencies and are con- sequently affected by fluctuations of foreign exchange and interest rates. Avolta’s trea- sury 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. Avolta continuously monitors the market risk, such as risks related to foreign currency, interest rate, credit, liquidity and capital. Avolta seeks to minimize the currency expo- sure 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. Financial Liabilities at December 31, 2022 At amortized cost At FVPL 37. Market risk Avolta’s financial assets and liabilities are mainly exposed to market risk in foreign cur- rency exchange and interest rates. Avolta’s objective is to minimize the impact on state- ment 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, Avolta may use financial instruments to hedge the respective exposure. Avolta may enter into a variety of financial instruments to manage its exposure to for- eign currency risk, including forward foreign exchange contracts, currency swaps and over the counter plain vanilla options. During the current financial year, Avolta utilized foreign currency forward contracts and options for hedging purposes. 37.1 Foreign currency risk management Avolta manages the cash flow surplus or deficits in foreign currency of the operations through FX-transactions in the respective local currency. Major imbalances in foreign currencies at Group level are hedged through foreign exchange forwards contracts. The terms of the foreign currency forward contracts have been negotiated to match the terms of the forecasted transactions. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 242/336 37.2 Foreign currency sensitivity analysis Among various methodologies to analyze and manage risk, Avolta 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 expo- sure in the event that certain specified parameters were to be met under a specific set of assumptions. Foreign Currency Exposure In millions of CHF USD EUR GBP BRL Other Total December 31, 2023 Monetary assets Monetary liabilities Net currency exposure before foreign currency contracts and hedging Foreign currency contracts Hedging Net currency exposure December 31, 2022 Monetary assets Monetary liabilities Net currency exposure before foreign currency contracts and hedging Foreign currency contracts Hedging Net currency exposure 1,148.0 (527.5) 620.5 (826.6) 232.1 26.0 1,099.7 516.5 583.2 (815.6) 255.7 23.3 2,930.1 (2,394.4) 535.7 983.2 (1,460.8) 58.1 704.4 2,637.5 (1,933.1) 813.1 1,075.9 (44.1) 391.3 (402.1) 75.5 (133.3) 2,339.6 (2,095.0) 6,884.5 (5,552.3) Reconciliation to categories of financial instruments: (10.8) (57.8) – – – – (10.8) (57.8) 404.6 399.3 5.3 – – 5.3 108.6 140.9 (32.3) 43.1 – 10.8 244.6 (210.2) (79.0) (44.6) 2,116.7 2,092.9 23.8 98.4 (86.5) 35.7 1,332.2 (53.6) (1,307.7) (29.1) 4,434.0 5,787.1 (1,353.1) 139.0 1,245.1 31.0 The sensitivity analysis includes all monetary assets and liabilities irrespective of whether the positions are third party or intercompany. Avolta has considered some intercompany long-term loans as equity-like loans. Consequently, the related exchange differences are presented in other comprehensive income and thereafter as translation reserve in equity. In addition, Avolta has entered into cross currency swaps to reduce the currency exposure. The foreign exchange rate sensitivity is calculated by aggregation of the net currency exposure of Avolta 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 cur- rency. In millions of CHF Effect on profit or loss based on USD Other comprehensive income based on USD Effect on profit or loss based on EUR Other comprehensive income based on EUR Effect on profit or loss based on GBP Effect on profit or loss based on BRL In millions of CHF Financial assets Total financial assets held in foreign currencies (see above) Less intercompany financial assets in foreign currencies Third party financial assets held in foreign currencies Third party financial assets held in reporting currencies Total third party financial assets Financial liabilities Total financial liabilities held in foreign currencies (see above) Less intercompany financial liabilities in foreign currencies Third party financial liabilities held in foreign currencies Third party financial liabilities held in reporting currencies Total third party financial liabilities 31.12.2023 31.12.2022 31.12.2023 31.12.2022 (1.2) 12.8 2.2 53.8 (0.3) (0.5) 4,434.0 (3,584.6) 849.4 507.5 1,356.9 5,787.1 (3,852.1) 1,935.0 5,912.8 7,847.8 (1.3) 11.6 (2.9) (73.0) 0.6 2.9 6,884.5 (6,259.2) 625.3 816.7 1,442.0 5,552.3 (3,561.1) 1,991.2 11,184.6 13,175.8 37.3 Foreign exchange forward contracts and foreign exchange options at fair value As the management of the company actively pursues to naturally hedge the positions in each operation, the policy of Avolta 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 as per the table below are determined by reference to inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly at December 31 of each year. In millions of CHF December 31, 2023 December 31, 2022 Contract under-lying or principal amount Positive fair value Negative fair value 1,204.3 856.0 9.3 10.1 80.2 99.8 37.2 Foreign currency sensitivity analysis Among various methodologies to analyze and manage risk, Avolta 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 expo- sure in the event that certain specified parameters were to be met under a specific set In millions of CHF USD EUR GBP BRL Other Total Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 243/336 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 cur- rency. In millions of CHF 31.12.2023 31.12.2022 of assumptions. Foreign Currency Exposure December 31, 2023 Monetary assets Monetary liabilities Net currency exposure before foreign currency contracts and Foreign currency contracts hedging Hedging Net currency exposure December 31, 2022 Monetary assets Monetary liabilities Net currency exposure before foreign currency contracts and Foreign currency contracts hedging Hedging Net currency exposure 1,148.0 (527.5) 620.5 (826.6) 232.1 26.0 1,099.7 516.5 583.2 (815.6) 255.7 23.3 2,930.1 (2,394.4) 535.7 983.2 (1,460.8) 58.1 704.4 2,637.5 (1,933.1) 813.1 1,075.9 (44.1) Effect on profit or loss based on USD Other comprehensive income based on USD Effect on profit or loss based on EUR Other comprehensive income based on EUR Effect on profit or loss based on GBP Effect on profit or loss based on BRL 391.3 (402.1) 75.5 (133.3) 2,339.6 (2,095.0) 6,884.5 (5,552.3) Reconciliation to categories of financial instruments: (10.8) (57.8) (10.8) (57.8) – – 404.6 399.3 5.3 – – 5.3 – – 108.6 140.9 (32.3) 43.1 – 10.8 244.6 (210.2) (79.0) (44.6) 2,116.7 2,092.9 23.8 98.4 (86.5) 35.7 1,332.2 (53.6) (1,307.7) (29.1) 4,434.0 5,787.1 (1,353.1) 139.0 1,245.1 31.0 In millions of CHF Financial assets Total financial assets held in foreign currencies (see above) Less intercompany financial assets in foreign currencies Third party financial assets held in foreign currencies Third party financial assets held in reporting currencies Total third party financial assets Financial liabilities Total financial liabilities held in foreign currencies (see above) Less intercompany financial liabilities in foreign currencies Third party financial liabilities held in foreign currencies Third party financial liabilities held in reporting currencies Total third party financial liabilities (1.3) 11.6 (2.9) (73.0) 0.6 2.9 (1.2) 12.8 2.2 53.8 (0.3) (0.5) 31.12.2023 31.12.2022 6,884.5 (6,259.2) 625.3 816.7 1,442.0 5,552.3 (3,561.1) 1,991.2 11,184.6 13,175.8 4,434.0 (3,584.6) 849.4 507.5 1,356.9 5,787.1 (3,852.1) 1,935.0 5,912.8 7,847.8 The sensitivity analysis includes all monetary assets and liabilities irrespective of whether the positions are third party or intercompany. Avolta has considered some intercompany long-term loans as equity-like loans. Consequently, the related exchange differences are presented in other comprehensive income and thereafter as translation reserve in equity. In addition, Avolta has entered into cross currency swaps to reduce the currency exposure. The foreign exchange rate sensitivity is calculated by aggregation of the net currency exposure of Avolta 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. 37.3 Foreign exchange forward contracts and foreign exchange options at fair value As the management of the company actively pursues to naturally hedge the positions in each operation, the policy of Avolta 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 as per the table below are determined by reference to inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly at December 31 of each year. In millions of CHF December 31, 2023 December 31, 2022 Contract under-lying or principal amount Positive fair value Negative fair value 1,204.3 856.0 9.3 10.1 80.2 99.8 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 244/336 38. Interest rate risk management Avolta 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 sensitivity analysis The 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, Avolta’s net profit/loss for the year 2023 would decrease by CHF 36.1 (2022: decrease by CHF 35.3) million. 38.2 Allocation of financial assets and liabilities to interest classes At December 31, 2023 Cash and cash equivalents Trade and credit card receivables Other accounts receivable Current investment Other non-current assets Financial assets Trade payables Borrowings, current Other liabilities Borrowings, non-current Lease obligations Other non-current liabilities Financial liabilities Net financial liabilities At December 31, 2022 Cash and cash equivalents Trade and credit card receivables Other accounts receivable Other non-current assets Financial assets Trade payables Borrowings, current Other liabilities Borrowings, non-current Lease obligations Other non-current liabilities Financial liabilities Net financial liabilities In % In millions of CHF Average variable interest rate Average fixed interest rate Variable Fixed Total interest Non-interest interest rate interest rate bearing bearing Total 1.9% 3.1% 388.5 104.8 493.3 1.6% 2.8% 4.7% 7.3% 4.1% 0.5% 0.6% 2.4% 11.3% 2.2% 7.6% – 33.7 54.9 62.8 644.7 – – 17.9 – 59.9 182.6 – 1.1 – – 221.3 41.3 313.7 221.0 797.3 873.7 12.0 – – 714.6 41.3 347.4 54.9 283.8 1,442.0 873.7 819.4 1,056.8 2,520.6 7,853.4 51.9 – 807.4 807.4 598.9 1,921.7 – 7,853.4 2,520.6 7,853.4 1.2 1,055.6 – 51.9 599.0 10,583.6 11,182.6 1,993.2 13,175.8 136.9 10,401.0 10,537.9 1,195.9 11,733.8 In % In millions of CHF Average variable interest rate Average fixed interest rate Variable Fixed Total interest Non-interest interest rate interest rate bearing bearing Total 1.0% 4.5% 378.2 92.7 470.9 1.1% 0.7% 9.3% 4.8 97.5 – – – – – – 0.1 7.2 478.2 – – – 383.8 62.3 319.8 112.8 878.7 486.4 0.7 754.5 0.0 0.0 29.3 854.7 62.3 319.9 120.0 1,356.9 486.4 122.7 754.5 3,452.3 3,002.6 29.3 467.7 6,109.2 6,576.9 1,270.9 7,847.8 87.0 6,011.7 6,098.7 392.2 6,490.9 2.9% 3.6% 19.0 103.0 122.0 6.1% 448.7 2.4% 4.8% 3,003.6 3,002.6 3,452.3 3,002.6 – 15.8 54.9 2.9 462.1 0.1 – – 0.1 2.4 380.7 – – – – 38. Interest rate risk management Avolta 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 sensitivity analysis The 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, Avolta’s net profit/loss for the year 2023 would decrease by CHF 36.1 (2022: decrease by CHF 35.3) million. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 245/336 38.2 Allocation of financial assets and liabilities to interest classes In % In millions of CHF At December 31, 2023 Cash and cash equivalents Trade and credit card receivables Other accounts receivable Current investment Other non-current assets Financial assets Trade payables Borrowings, current Other liabilities Borrowings, non-current Lease obligations Other non-current liabilities Financial liabilities Net financial liabilities At December 31, 2022 Cash and cash equivalents Trade and credit card receivables Other accounts receivable Other non-current assets Financial assets Trade payables Borrowings, current Other liabilities Borrowings, non-current Lease obligations Other non-current liabilities Financial liabilities Net financial liabilities Average variable interest rate Average fixed interest rate Variable interest rate Fixed interest rate Total interest bearing Non-interest bearing 1.9% 3.1% 388.5 104.8 493.3 – 15.8 54.9 2.9 462.1 – 17.9 – 59.9 182.6 – 33.7 54.9 62.8 644.7 – – – 807.4 807.4 221.3 41.3 313.7 – 221.0 797.3 873.7 12.0 0.1 1.1 1.2 1,055.6 598.9 1,921.7 – 7,853.4 2,520.6 7,853.4 – – – – – 51.9 Total 714.6 41.3 347.4 54.9 283.8 1,442.0 873.7 819.4 1,056.8 2,520.6 7,853.4 51.9 1.6% 2.8% 4.7% 7.3% 4.1% 0.5% 0.6% 2.4% 11.3% 2.2% 7.6% 599.0 10,583.6 11,182.6 1,993.2 13,175.8 136.9 10,401.0 10,537.9 1,195.9 11,733.8 In % In millions of CHF Average variable interest rate Average fixed interest rate Variable interest rate Fixed interest rate Total interest bearing Non-interest bearing 1.0% 4.5% 378.2 92.7 470.9 1.1% 0.7% 9.3% 2.9% 3.6% 6.1% 2.4% 4.8% – 0.1 2.4 380.7 – 19.0 – 448.7 – – – – 4.8 97.5 – 103.0 – 3,003.6 3,002.6 – – 0.1 7.2 478.2 – 122.0 – 3,452.3 3,002.6 – 383.8 62.3 319.8 112.8 878.7 486.4 0.7 754.5 0.0 0.0 29.3 Total 854.7 62.3 319.9 120.0 1,356.9 486.4 122.7 754.5 3,452.3 3,002.6 29.3 467.7 6,109.2 6,576.9 1,270.9 7,847.8 87.0 6,011.7 6,098.7 392.2 6,490.9 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 246/336 39. Credit risk management 40. Liquidity risk management Credit risk refers to the risk that counterparty may default on its contractual obligations resulting in financial loss to Avolta. Almost all Avolta sales are retail sales made against cash or internationally recognized credit / debit cards. Avolta 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 ade- quately. The remaining credit risk is in relation to refunds from suppliers and guarantee deposits. The credit risk on cash deposits or derivative financial instruments relates to banks or financial institutions. Avolta 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 risk The carrying amount of financial assets recorded in the financial statements, after deduction of any allowances for losses, represents Avolta’s maximum exposure to credit risk. Avolta evaluates this risk as the ability to settle its financial liabilities on time and at a rea- sonable price. Besides its capability to generate cash through its operations, Avolta mit- igates liquidity risk by keeping unused credit facilities with financial institutions (see note 28). 40.1 Remaining maturities for non-derivative financial assets and liabilities The following tables have been drawn up based on the undiscounted cash flows of financial assets and liabilities (based on the earliest date on which Avolta can receive or be required to pay). The tables include principal and interest cash flows. 1-6 months 6-12 months 1-2 years More than 2 years At December 31, 2023 In millions of CHF Cash and cash equivalents Trade and credit card receivables Other accounts receivable Current Investment Other non-current assets Total cash inflows Trade payables Borrowings, current Other liabilities Borrowings, non-current Lease obligations 1 Other non-current liabilities Total cash outflows than 5 years. At December 31, 2022 In millions of CHF Cash and cash equivalents Trade and credit card receivables Other accounts receivable Other non-current assets Total cash inflows Trade payables Borrowings, current Other liabilities Borrowings, non-current Lease obligations 1 Other non-current liabilities Total cash outflows 595.9 38.2 307.2 54.9 0.5 996.7 857.7 100.4 931.0 26.6 771.7 – 863.4 62.3 308.4 0.2 1,234.3 486.4 116.6 754.5 55.8 555.8 – 1,969.1 149.0 3.1 42.5 – 0.5 195.1 16.0 762.7 45.6 30.1 648.8 – 8.8 – 1.4 0.5 10.7 25.7 – – – 56.1 436.6 32.4 32.4 294.0 294.0 912.2 1,230.0 1,807.3 7,409.6 51.9 9,268.8 – – – – – – – – – – – – – – – – – – – – – – – – – – – – Total 744.9 41.3 349.7 54.9 327.4 1,518.2 873.7 863.1 976.6 2,776.2 10,060.1 51.9 15,601.6 Total 872.2 62.3 309.8 120.1 1,364.4 486.4 142.3 754.5 3,958.2 3,594.7 29.3 8,965.4 2.2 2.2 117.2 117.2 118.0 514.7 3,728.3 2,087.6 29.3 5,845.2 518.4 632.7 1 Lease obligation with a maturity of more than 2 years contain an amount of CHF 4'329.6 million with a maturity longer 2,687.4 1,503.2 2,142.2 1-6 months 6-12 months 1-2 years More than 2 years 1 Lease obligation with a maturity of more than 2 years contain an amount of CHF 801.5 million with a maturity longer than 5 years. 39. Credit risk management 40. Liquidity risk management Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 247/336 Credit risk refers to the risk that counterparty may default on its contractual obligations resulting in financial loss to Avolta. Almost all Avolta sales are retail sales made against cash or internationally recognized credit / debit cards. Avolta 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 ade- quately. The remaining credit risk is in relation to refunds from suppliers and guarantee The credit risk on cash deposits or derivative financial instruments relates to banks or financial institutions. Avolta 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 – 39.1 Maximum credit risk The carrying amount of financial assets recorded in the financial statements, after deduction of any allowances for losses, represents Avolta’s maximum exposure to credit deposits. or higher. risk. Avolta evaluates this risk as the ability to settle its financial liabilities on time and at a rea- sonable price. Besides its capability to generate cash through its operations, Avolta mit- igates liquidity risk by keeping unused credit facilities with financial institutions (see note 28). 40.1 Remaining maturities for non-derivative financial assets and liabilities The following tables have been drawn up based on the undiscounted cash flows of financial assets and liabilities (based on the earliest date on which Avolta can receive or be required to pay). The tables include principal and interest cash flows. At December 31, 2023 In millions of CHF Cash and cash equivalents Trade and credit card receivables Other accounts receivable Current Investment Other non-current assets Total cash inflows Trade payables Borrowings, current Other liabilities Borrowings, non-current Lease obligations 1 Other non-current liabilities Total cash outflows 1-6 months 6-12 months 1-2 years 595.9 38.2 307.2 54.9 0.5 996.7 857.7 100.4 931.0 26.6 771.7 – 149.0 3.1 42.5 – 0.5 195.1 16.0 762.7 45.6 30.1 648.8 – 2,687.4 1,503.2 – – – – 32.4 32.4 – – – 912.2 1,230.0 – 2,142.2 1 Lease obligation with a maturity of more than 2 years contain an amount of CHF 4'329.6 million with a maturity longer than 5 years. At December 31, 2022 In millions of CHF Cash and cash equivalents Trade and credit card receivables Other accounts receivable Other non-current assets Total cash inflows Trade payables Borrowings, current Other liabilities Borrowings, non-current Lease obligations 1 Other non-current liabilities Total cash outflows 1-6 months 6-12 months 1-2 years 863.4 62.3 308.4 0.2 1,234.3 486.4 116.6 754.5 55.8 555.8 – 1,969.1 8.8 – 1.4 0.5 10.7 – 25.7 – 56.1 436.6 – 518.4 – – – 2.2 2.2 – – – 118.0 514.7 – 632.7 1 Lease obligation with a maturity of more than 2 years contain an amount of CHF 801.5 million with a maturity longer than 5 years. More than 2 years – – – – 294.0 294.0 – – – 1,807.3 7,409.6 51.9 9,268.8 More than 2 years – – – 117.2 117.2 – – – 3,728.3 2,087.6 29.3 5,845.2 Total 744.9 41.3 349.7 54.9 327.4 1,518.2 873.7 863.1 976.6 2,776.2 10,060.1 51.9 15,601.6 Total 872.2 62.3 309.8 120.1 1,364.4 486.4 142.3 754.5 3,958.2 3,594.7 29.3 8,965.4 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 248/336 40.2 Remaining maturities for derivative financial 41. Related parties and related party transactions instruments Avolta holds derivative financial instruments at year-end. At December 31, 2023 In millions of CHF Derivative financial assets Derivative financial liabilities At December 31, 2022 In millions of CHF Derivative financial assets Derivative financial liabilities 1-6 months 6-12 months 1-2 years 9.3 80.2 – – – – 1-6 months 6-12 months 1-2 years 5.0 0.7 – – – – More than 2 years – – More than 2 years 5.2 99.1 Total 9.3 80.2 Total 10.1 99.8 A party is related to Avolta if the party directly or indirectly controls, is controlled by, or is under common control with Avolta, has an interest in Avolta that gives it significant influence over Avolta, has joint control over Avolta or is an associate or a joint venture of Avolta. In addition, members of the key management personnel of Avolta or close mem- bers of the family are also considered related parties as well as post-employment ben- efit plans for the benefit of employees of Avolta. Transactions with related parties are conducted at arm’s length. The related party transactions and relationships for Avolta are the following: In millions of CHF Other income Edizione SpA Purchase of services from Pension Fund DUFRY, post-employment benefits Lease related expenses Aeroporti Di Roma SPA Autostrada Bs Vr Vi Pd SpA Aeroporto di Bologna Other expenses Aeroporti Di Roma SPA ADR Mobility Srl Aeroporto di Bologna Right of Use at December 31 Aeroporti Di Roma SPA Autostrada Bs Vr Vi Pd SpA SANEF S.A. SAPN S.A. (Société des autoroutes Paris-Normandie) Accounts receivables at December 31 Aeroporti Di Roma SPA Lease obligations at December 31 SAPN S.A. (Société des autoroutes Paris-Normandie) Accounts payables at December 31 Aeroporti Di Roma SPA Autostrada Bs Vr Vi Pd SpA SANEF S.A. Pension Fund Aeroporti Di Roma SPA Autostrada Bs Vr Vi Pd SpA Aeroporto di Bologna SANEF S.A. SAPN S.A. (Société des autoroutes Paris-Normandie) ADR Mobility Srl 2023 0.2 (7.2) (16.6) (6.6) (2.4) (1.1) (0.1) (0.1) 6.7 18.8 2.9 0.9 0.4 7.3 19.4 3.6 1.2 0.4 3.5 5.4 0.8 0.2 0.1 0.1 2022 (5.1) – – – – – – – – – – – – – – – – – – – – – – 0.3 instruments Avolta holds derivative financial instruments at year-end. At December 31, 2023 In millions of CHF Derivative financial assets Derivative financial liabilities At December 31, 2022 In millions of CHF Derivative financial assets Derivative financial liabilities 1-6 months 6-12 months 1-2 years 9.3 80.2 5.0 0.7 – – – – 1-6 months 6-12 months 1-2 years More than 2 years – – More than 2 years 5.2 99.1 – – – – Total 9.3 80.2 Total 10.1 99.8 40.2 Remaining maturities for derivative financial 41. Related parties and related party transactions Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 249/336 A party is related to Avolta if the party directly or indirectly controls, is controlled by, or is under common control with Avolta, has an interest in Avolta that gives it significant influence over Avolta, has joint control over Avolta or is an associate or a joint venture of Avolta. In addition, members of the key management personnel of Avolta or close mem- bers of the family are also considered related parties as well as post-employment ben- efit plans for the benefit of employees of Avolta. Transactions with related parties are conducted at arm’s length. The related party transactions and relationships for Avolta are the following: In millions of CHF Other income Edizione SpA Purchase of services from Pension Fund DUFRY, post-employment benefits Lease related expenses Aeroporti Di Roma SPA Autostrada Bs Vr Vi Pd SpA Aeroporto di Bologna Other expenses Aeroporti Di Roma SPA ADR Mobility Srl Aeroporto di Bologna Right of Use at December 31 Aeroporti Di Roma SPA Autostrada Bs Vr Vi Pd SpA SANEF S.A. SAPN S.A. (Société des autoroutes Paris-Normandie) Accounts receivables at December 31 Aeroporti Di Roma SPA Lease obligations at December 31 Aeroporti Di Roma SPA Autostrada Bs Vr Vi Pd SpA SANEF S.A. SAPN S.A. (Société des autoroutes Paris-Normandie) Accounts payables at December 31 Pension Fund Aeroporti Di Roma SPA Autostrada Bs Vr Vi Pd SpA Aeroporto di Bologna SANEF S.A. SAPN S.A. (Société des autoroutes Paris-Normandie) ADR Mobility Srl 2023 0.2 (7.2) (16.6) (6.6) (2.4) (1.1) (0.1) (0.1) 6.7 18.8 2.9 0.9 0.4 7.3 19.4 3.6 1.2 0.4 3.5 5.4 0.8 0.2 0.1 0.1 2022 – (5.1) – – – – – – – – – – – – – – – 0.3 – – – – – – Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 250/336 The transactions with associates are the following: In millions of CHF Sales of goods to Nuance Basel LLC (Sochi) Dufry Thomas Julie Korea CO. Ltd Nuance Group (Chicago) LLC NCM Brookstone Stores Georgia, LLC Puerto Libre Int. SA Lojas Francas de Portugal S.A. Sales of services to Dufry Thomas Julie Korea CO. Ltd CaresQuick nv Nuance Basel LLC (Sochi) QA HMSHost LLC Nuance Group (Chicago) LLC NCM Brookstone Stores Georgia, LLC Puerto Libre Int. SA Lojas Francas de Portugal S.A. Purchase of services from Nuance Group (Chicago) LLC Accounts receivables at December 31 Lojas Francas de Portugal S.A. Nuance Basel LLC (Sochi) Puerto Libre Int. SA Nuance Group (Chicago) LLC NCM Brookstone Stores Georgia, LLC Dufry Thomas Julie Korea CO. Ltd QA HMSHost LLC CaresQuick nv Accounts payables at December 31 Lojas Francas de Portugal S.A. Nuance Group (Chicago) LLC NCM Brookstone Stores Georgia, LLC The company has contractually agreed to a commitment in the amount of CHF 3 mil- lion for a period of five years starting 31 October 2023, to Laguna AG, an entity fully con- trolled by the company’s chairman, in relation to transportation and logistics services provided by a third party. The 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 Avolta, including com- pensation in company shares as follows: In millions of CHF Board of directors Number of directors Current employee benefits Total compensation Global executive committee Number of members Current employee benefits Post-employment benefits Share-based payments (income) / expense 1 Total compensation 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 remuneration report at the end of the annual report. 42. Events after reporting date No significant events occurred after 31 December 2023 up to 6 March 2024 that would have a material impact on these financial statements. 2023 2022 12 9.6 9.6 13 21.4 2.6 19.7 43.7 9 7.6 7.6 8 18.0 1.8 6.2 26.0 2023 2022 1.3 2.3 1.1 0.2 1.3 – 0.1 0.1 0.5 1.1 0.3 – 0.1 – – – 0.3 0.1 1.6 0.9 7.2 0.8 0.5 – 0.7 0.3 2.7 – 0.7 0.2 0.8 15.3 – – 0.5 – 0.3 0.1 0.1 0.5 (0.1) 1.6 1.1 – 2.5 1.0 – – – 1.6 1.1 0.6 The transactions with associates are the following: 2023 2022 The company has contractually agreed to a commitment in the amount of CHF 3 mil- lion for a period of five years starting 31 October 2023, to Laguna AG, an entity fully con- trolled by the company’s chairman, in relation to transportation and logistics services provided by a third party. The 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 Avolta, including com- pensation in company shares as follows: Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 251/336 In millions of CHF Board of directors Number of directors Current employee benefits Total compensation Global executive committee Number of members Current employee benefits Post-employment benefits Share-based payments (income) / expense 1 Total compensation 2023 2022 12 9.6 9.6 13 21.4 2.6 19.7 43.7 9 7.6 7.6 8 18.0 1.8 6.2 26.0 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 remuneration report at the end of the annual report. 42. Events after reporting date No significant events occurred after 31 December 2023 up to 6 March 2024 that would have a material impact on these financial statements. In millions of CHF Sales of goods to Nuance Basel LLC (Sochi) Dufry Thomas Julie Korea CO. Ltd Nuance Group (Chicago) LLC NCM Brookstone Stores Georgia, LLC Puerto Libre Int. SA Lojas Francas de Portugal S.A. Sales of services to Dufry Thomas Julie Korea CO. Ltd CaresQuick nv Nuance Basel LLC (Sochi) QA HMSHost LLC Nuance Group (Chicago) LLC NCM Brookstone Stores Georgia, LLC Puerto Libre Int. SA Lojas Francas de Portugal S.A. Purchase of services from Nuance Group (Chicago) LLC Lojas Francas de Portugal S.A. Nuance Basel LLC (Sochi) Puerto Libre Int. SA Nuance Group (Chicago) LLC NCM Brookstone Stores Georgia, LLC Dufry Thomas Julie Korea CO. Ltd QA HMSHost LLC CaresQuick nv Accounts payables at December 31 Lojas Francas de Portugal S.A. Nuance Group (Chicago) LLC NCM Brookstone Stores Georgia, LLC Accounts receivables at December 31 1.3 2.3 1.1 0.2 1.3 – 0.1 0.1 0.5 1.1 0.3 0.1 – – – – 0.3 0.1 1.6 0.9 7.2 0.8 0.5 – 0.7 0.3 2.7 – 0.7 0.2 0.8 15.3 – – – 0.5 0.3 0.1 0.1 0.5 (0.1) 1.6 1.1 – 2.5 1.0 – – – 1.6 1.1 0.6 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 252/336 Deloitte AG Pfingstweidstrasse 11 8005 Zürich Schweiz Phone: +41 (0)58 279 60 00 Fax: +41 (0)58 279 66 00 www.deloitte.ch How the scope of our audit responded to the key audit matterWe obtained an understanding of management’s process and control activities over the evaluation of goodwill for potential impair-ment, including the review of management’s judgment in allocating goodwill to the operating segments, the review of significant assumptions used in the impairment test and the review of the impairment models.We involved valuation specialists to assess the appropriateness of the mathematical integrity and valuation methodology used in the impairment tests.We evaluated 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 to assess historical sales and expenses against the Group’s assump-tions. We independently determined the weighted average cost of capital (WACC) and compared them against management’s assump-tions, with the support of our valuation specialists.We evaluated the Group’s sensitivity analysis by performing an independent analysis using management’s models. We assessed the adequacy of impairment related disclosures in the consolidated financial statements, including the key assump-tions used and the completeness and accuracy of sensitivities disclosed. Based on the procedures performed above, we obtained sufficient audit evidence to address the valuation risk of goodwill.Valuation of concession right intangibles and right-of-use assetsKey Audit MatterThe Group’s consolidated statement of financial position includes concession right intangibles in the amount of CHF 1,699.3 mil-lion (2022: CHF 1,170.4 million) and right-of-use assets with definite useful lives in the amount of CHF 7,237.0 million (2022: CHF 2,567.8 million). As at December 31, 2023, management recorded an impairment charge of CHF 16.0 million for concession right intangibles and right-of-use assets and a reversal of impairment of CHF 44.5 million from concession right intangibles and right-of-use assets (2022: CHF 47.9 million and CHF 66.0 million, respectively).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 3.3n, 3.3p and 3.3r. As detailed in Note 4, 10, 17, 18 and 19 to the consoli-dated financial statements, the Group assesses at each reporting date whether there are indicators of impairment. When such in-dicators are identified, the carrying value of the respective cash generating unit, to which the respective concession right intangi-bles and right-of-use assets belong to, are tested for impairment. The evaluation of concession rights and right-of-use assets for potential impairment involves a complex analysis driven by signifi-cant assumptions. Risks presented in the quantitative assessment include significant assumptions such as discount rates and sa-les growth values. Given the high level of judgment and complexity of the estimations with regards to these rates, combined with the significance of the recognized amounts to the financial statements as a whole, we assessed management’s estimates made in relation to discount rates and sales growth rates to be a key audit matter.How the scope of our audit responded to the key audit matterWe obtained an understanding of management’s process and control activities over the evaluation of potential impairment, inclu-ding the controls in relation to the review of management’s judgment in the identification of impairment indicators, the review of key assumptions used in the impairment test and the review of the impairment models.We independently evaluated whether there are any impairment indicators for concession right intangibles and right-of-use assets. For those cash generating units for which there were impairment indicators identified, we performed procedures to assess the ap-propriateness of the mathematical integrity and valuation methodology used in the impairment tests, with the support of our va-luation specialists. To the General Meeting ofAvolta AG (formerly Dufry AG), BaselBasel, March 6, 2024Report on the Audit of the Consolidated Financial Statements OpinionWe have audited the consolidated financial statements of Avolta AG (the Company) and its subsidiaries (the Group), which com-prise the consolidated statement of financial position as at December 31, 2023, and the consolidated statement of profit or loss, the consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of ma-terial accounting policies.In our opinion, the accompanying consolidated financial statements (pages 156 to 251), give a true and fair view of the consolidated financial position of the Group as at 31 December 2023 and of its consolidated financial performance and its consolidated cash flow for the year then ended in accordance with IFRS Accounting Standards and comply with Swiss law.Basis for OpinionWe conducted our audit in accordance with Swiss law, the International Standards on Auditing (ISA) and Swiss Standards on Audi-ting (SA-CH). Our responsibilities under those provisions and standards are further described in the “Auditor‘s Responsibilities 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, together with the requirements of the Swiss audit profession, as well as those of the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Indepen-dence Standards) (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.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. 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.Goodwill ValuationKey Audit MatterThe Group’s consolidated statement of financial position includes goodwill of CHF 2,978.6 million (2022: 2,272.2 million). As at De-cember 31, 2023, management concluded that the estimated recoverable amount of goodwill of each of the Group’s segments ex-ceeded their carrying amounts.The accounting policies regarding goodwill applied by the Group are explained in the notes to the consolidated financial statements in sections 3.3a and 3.3r. As detailed in Note 4, 10, 18 and 19 to the consolidated financial statements, the level at which goodwill is monitored and tested annually for impairment is the Group’s segments. The Group management focuses on the regional performance of its operations. Key metrics used by management in assessing performance are measured at the operating segment. The evaluation of goodwill for potential impairment involves a complex analysis driven by significant assumptions. Risks presented in the quantitative assessment include significant assumptions such as discount rates and sales growth values. Given the high le-vel of judgment and complexity of the estimations with regards to these rates, combined with the significance of the recognized amounts to the consolidated financial statements as a whole, we assessed Group management’s estimates made in relation to dis-count rates and sales growth rates to be a key audit matter.Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 253/336 Deloitte AG Pfingstweidstrasse 11 8005 Zürich Schweiz Phone: +41 (0)58 279 60 00 Fax: +41 (0)58 279 66 00 www.deloitte.ch How the scope of our audit responded to the key audit matterWe obtained an understanding of management’s process and control activities over the evaluation of goodwill for potential impair-ment, including the review of management’s judgment in allocating goodwill to the operating segments, the review of significant assumptions used in the impairment test and the review of the impairment models.We involved valuation specialists to assess the appropriateness of the mathematical integrity and valuation methodology used in the impairment tests.We evaluated 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 to assess historical sales and expenses against the Group’s assump-tions. We independently determined the weighted average cost of capital (WACC) and compared them against management’s assump-tions, with the support of our valuation specialists.We evaluated the Group’s sensitivity analysis by performing an independent analysis using management’s models. We assessed the adequacy of impairment related disclosures in the consolidated financial statements, including the key assump-tions used and the completeness and accuracy of sensitivities disclosed. Based on the procedures performed above, we obtained sufficient audit evidence to address the valuation risk of goodwill.Valuation of concession right intangibles and right-of-use assetsKey Audit MatterThe Group’s consolidated statement of financial position includes concession right intangibles in the amount of CHF 1,699.3 mil-lion (2022: CHF 1,170.4 million) and right-of-use assets with definite useful lives in the amount of CHF 7,237.0 million (2022: CHF 2,567.8 million). As at December 31, 2023, management recorded an impairment charge of CHF 16.0 million for concession right intangibles and right-of-use assets and a reversal of impairment of CHF 44.5 million from concession right intangibles and right-of-use assets (2022: CHF 47.9 million and CHF 66.0 million, respectively).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 3.3n, 3.3p and 3.3r. As detailed in Note 4, 10, 17, 18 and 19 to the consoli-dated financial statements, the Group assesses at each reporting date whether there are indicators of impairment. When such in-dicators are identified, the carrying value of the respective cash generating unit, to which the respective concession right intangi-bles and right-of-use assets belong to, are tested for impairment. The evaluation of concession rights and right-of-use assets for potential impairment involves a complex analysis driven by signifi-cant assumptions. Risks presented in the quantitative assessment include significant assumptions such as discount rates and sa-les growth values. Given the high level of judgment and complexity of the estimations with regards to these rates, combined with the significance of the recognized amounts to the financial statements as a whole, we assessed management’s estimates made in relation to discount rates and sales growth rates to be a key audit matter.How the scope of our audit responded to the key audit matterWe obtained an understanding of management’s process and control activities over the evaluation of potential impairment, inclu-ding the controls in relation to the review of management’s judgment in the identification of impairment indicators, the review of key assumptions used in the impairment test and the review of the impairment models.We independently evaluated whether there are any impairment indicators for concession right intangibles and right-of-use assets. For those cash generating units for which there were impairment indicators identified, we performed procedures to assess the ap-propriateness of the mathematical integrity and valuation methodology used in the impairment tests, with the support of our va-luation specialists. To the General Meeting ofAvolta AG (formerly Dufry AG), BaselBasel, March 6, 2024Report on the Audit of the Consolidated Financial Statements OpinionWe have audited the consolidated financial statements of Avolta AG (the Company) and its subsidiaries (the Group), which com-prise the consolidated statement of financial position as at December 31, 2023, and the consolidated statement of profit or loss, the consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of ma-terial accounting policies.In our opinion, the accompanying consolidated financial statements (pages 156 to 251), give a true and fair view of the consolidated financial position of the Group as at 31 December 2023 and of its consolidated financial performance and its consolidated cash flow for the year then ended in accordance with IFRS Accounting Standards and comply with Swiss law.Basis for OpinionWe conducted our audit in accordance with Swiss law, the International Standards on Auditing (ISA) and Swiss Standards on Audi-ting (SA-CH). Our responsibilities under those provisions and standards are further described in the “Auditor‘s Responsibilities 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, together with the requirements of the Swiss audit profession, as well as those of the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Indepen-dence Standards) (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.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. 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.Goodwill ValuationKey Audit MatterThe Group’s consolidated statement of financial position includes goodwill of CHF 2,978.6 million (2022: 2,272.2 million). As at De-cember 31, 2023, management concluded that the estimated recoverable amount of goodwill of each of the Group’s segments ex-ceeded their carrying amounts.The accounting policies regarding goodwill applied by the Group are explained in the notes to the consolidated financial statements in sections 3.3a and 3.3r. As detailed in Note 4, 10, 18 and 19 to the consolidated financial statements, the level at which goodwill is monitored and tested annually for impairment is the Group’s segments. The Group management focuses on the regional performance of its operations. Key metrics used by management in assessing performance are measured at the operating segment. The evaluation of goodwill for potential impairment involves a complex analysis driven by significant assumptions. Risks presented in the quantitative assessment include significant assumptions such as discount rates and sales growth values. Given the high le-vel of judgment and complexity of the estimations with regards to these rates, combined with the significance of the recognized amounts to the consolidated financial statements as a whole, we assessed Group management’s estimates made in relation to dis-count rates and sales growth rates to be a key audit matter.Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 254/336 Other InformationThe Board of Directors is responsible for the other information. The other information comprises the information included in the an-nual report, but does not include the consolidated financial statements, the standalone financial statements and our auditor’s re-ports thereon.Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of as-surance conclusion thereon.In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in do-ing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our know-ledge 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 requi-red to report that fact. We have nothing to report in this regard.Board of Directors’ Responsibilities for the Consolidated Financial StatementsThe Board of Directors is responsible for the preparation of the consolidated financial statements, which give a true and fair view in accordance with IFRS Accounting Standards 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 conti-nue as a going concern, disclosing, as applicable, matters related to going concern, and using the going concern basis of accoun-ting 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 assu-rance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Swiss law, ISA and SA-CH will always detect a material misstatement when it exists. Misstatements 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 ba-sis of these consolidated financial statements.Report on Other Legal and Regulatory RequirementsIn accordance with Art. 728a para. 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists, which has been designed for the preparation of the consolidated financial statements according to the instructions of the Board of Directors.We recommend that the consolidated financial statements submitted to you be approved.Deloitte AG Andreas Bodenmann Fabian HellLicensed audit expert Licensed audit expertWe performed analyses over the projected sales growth rates used in the cash flow projections during the forecast period. In ad-dition, we performed lookback analyses to assess historical sales and expenses against the Group’s assumptions. In addition, we tested on a sample basis the variable and fixed lease payments against contractual agreements.We independently determined the weighted average cost of capital (WACC) and compared them against management’s assump-tions, with the support of our valuation specialists.We evaluated the Group’s sensitivity analysis by performing an independent analysis using management’s models. We assessed the adequacy of impairment related disclosures in the consolidated financial statements, including the key assump-tions used and the completeness and accuracy of sensitivities disclosed.Based on the procedures performed above, we obtained sufficient audit evidence to address the risk of valuation of concession right intangibles and right-of-use assets.Purchase Price Allocation for the business combination of Autogrill S.p.A.Key Audit MatterThe assets, liabilities and contingent liabilities acquired of the business combination with Autogrill S.p.A. were stated at their fair va-lues, which were determined in the course of the purchase price allocation and fair value determination.This results in net assets measured at fair value in the amount of CHF 772.9 million as of the date of the acquisition. Management has the discretion to make judgments, estimates and assumptions in allocating the purchase price and determining the fair value. Changes in these assumptions could have a significant effect on the purchase price allocation and fair values.The judgments and estimates are driven by significant assumptions. Risks presented in the quantitative assessment include signi-ficant assumptions such as discount rates and sales growth values. Given the high level of judgment and complexity of the estima-tions with regards to these assumptions, combined with the significance of the recognized amounts to the consolidated financial statements as a whole, we assessed management’s estimates made in relation to discount rates and sales growth rates to be a key audit matter.How the scope of our audit responded to the key audit matterWe obtained an understanding of management’s process and controls over the acquisition accounting, including the due diligence procedures and review of valuation reports.We obtained the underlying documentation, terms and conditions of the transaction and assessed the accounting treatment of the consideration transferred and the assets and liabilities acquired in accordance with IFRS 3 ‚Business Combinations’.We performed a risk assessment over the assets acquired and liabilities assumed to determine the nature and extent of further pro-cedures and performed opening balance sheet testing for selected acquired assets and liabilities.Together with our valuation specialists we audited the Group‘s valuations and assessed the methodology used to determine the as-sets acquired and liabilities assumed, in particular the methodologies and discount rates as key assumptions, used in the valuation of the acquired business, and a reconciliation of the key inputs used in the fair value measurement.We tested the assumptions over the projected sales growth rates used in the cash flow projections during the forecast period. In addition, we performed lookback analyses to assess historical sales and expenses against the Group’s assumptions.We assessed the adequacy of related disclosures in note 6.1 and 6.2.Based on the procedures performed above, we obtained sufficient audit evidence to address the risk related to the purchase price allocation.Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 255/336 Other InformationThe Board of Directors is responsible for the other information. The other information comprises the information included in the an-nual report, but does not include the consolidated financial statements, the standalone financial statements and our auditor’s re-ports thereon.Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of as-surance conclusion thereon.In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in do-ing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our know-ledge 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 requi-red to report that fact. We have nothing to report in this regard.Board of Directors’ Responsibilities for the Consolidated Financial StatementsThe Board of Directors is responsible for the preparation of the consolidated financial statements, which give a true and fair view in accordance with IFRS Accounting Standards 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 conti-nue as a going concern, disclosing, as applicable, matters related to going concern, and using the going concern basis of accoun-ting 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 assu-rance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Swiss law, ISA and SA-CH will always detect a material misstatement when it exists. Misstatements 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 ba-sis of these consolidated financial statements.Report on Other Legal and Regulatory RequirementsIn accordance with Art. 728a para. 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists, which has been designed for the preparation of the consolidated financial statements according to the instructions of the Board of Directors.We recommend that the consolidated financial statements submitted to you be approved.Deloitte AG Andreas Bodenmann Fabian HellLicensed audit expert Licensed audit expertWe performed analyses over the projected sales growth rates used in the cash flow projections during the forecast period. In ad-dition, we performed lookback analyses to assess historical sales and expenses against the Group’s assumptions. In addition, we tested on a sample basis the variable and fixed lease payments against contractual agreements.We independently determined the weighted average cost of capital (WACC) and compared them against management’s assump-tions, with the support of our valuation specialists.We evaluated the Group’s sensitivity analysis by performing an independent analysis using management’s models. We assessed the adequacy of impairment related disclosures in the consolidated financial statements, including the key assump-tions used and the completeness and accuracy of sensitivities disclosed.Based on the procedures performed above, we obtained sufficient audit evidence to address the risk of valuation of concession right intangibles and right-of-use assets.Purchase Price Allocation for the business combination of Autogrill S.p.A.Key Audit MatterThe assets, liabilities and contingent liabilities acquired of the business combination with Autogrill S.p.A. were stated at their fair va-lues, which were determined in the course of the purchase price allocation and fair value determination.This results in net assets measured at fair value in the amount of CHF 772.9 million as of the date of the acquisition. Management has the discretion to make judgments, estimates and assumptions in allocating the purchase price and determining the fair value. Changes in these assumptions could have a significant effect on the purchase price allocation and fair values.The judgments and estimates are driven by significant assumptions. Risks presented in the quantitative assessment include signi-ficant assumptions such as discount rates and sales growth values. Given the high level of judgment and complexity of the estima-tions with regards to these assumptions, combined with the significance of the recognized amounts to the consolidated financial statements as a whole, we assessed management’s estimates made in relation to discount rates and sales growth rates to be a key audit matter.How the scope of our audit responded to the key audit matterWe obtained an understanding of management’s process and controls over the acquisition accounting, including the due diligence procedures and review of valuation reports.We obtained the underlying documentation, terms and conditions of the transaction and assessed the accounting treatment of the consideration transferred and the assets and liabilities acquired in accordance with IFRS 3 ‚Business Combinations’.We performed a risk assessment over the assets acquired and liabilities assumed to determine the nature and extent of further pro-cedures and performed opening balance sheet testing for selected acquired assets and liabilities.Together with our valuation specialists we audited the Group‘s valuations and assessed the methodology used to determine the as-sets acquired and liabilities assumed, in particular the methodologies and discount rates as key assumptions, used in the valuation of the acquired business, and a reconciliation of the key inputs used in the fair value measurement.We tested the assumptions over the projected sales growth rates used in the cash flow projections during the forecast period. In addition, we performed lookback analyses to assess historical sales and expenses against the Group’s assumptions.We assessed the adequacy of related disclosures in note 6.1 and 6.2.Based on the procedures performed above, we obtained sufficient audit evidence to address the risk related to the purchase price allocation.Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 256/336 Statement of profit or loss for the year ended December 31, 2023 In thousands of CHF Finance income Other income Total income Personnel expenses General and administrative expenses Management fee expenses Reversal of impairment Finance expenses Taxes Total expenses (Loss) / Profit for the year Note 2023 2022 In thousands of CHF Note 31.12.2023 31.12.2022 8 7 23,699 10 23,709 (44,533) (19,548) (7,333) – (968) (1,970) (74,352) (50,643) 26,571 21 26,592 (18,149) (11,361) (7,107) 44,114 (166) (1,139) 6,192 32,784 Statement of financial position at December 31, 2023 Assets Cash and cash equivalents Current receivables third parties Current receivables subsidiaries Loans to subsidiaries Current assets Investments in subsidiaries Non-current assets Total assets Liabilities and shareholders' equity Current interest bearing liabilities Current liabilities third parties Current liabilities participants and bodies Current liabilities subsidiaries Deferred income and accrued expenses Current liabilities Total liabilities Share capital Legal capital reserves Legal retained earnings Other legal reserves Voluntary retained earnings Results carried forward (Loss) / profit for the year Treasury shares Total shareholders' equity Reserve from capital contribution Reserve from capital contribution for own shares held at subsidiaries 76,910 478 4,334 691,000 772,722 5,373,761 5,373,761 6,146,483 649 2,732 – 1,781 72,764 77,926 77,926 906 64 2,313 775,000 778,283 2,824,339 2,824,339 3,602,622 965 1,118 70 1,094 21,561 24,808 24,808 763,071 453,985 6,851,002 1,698 4,551,169 1,698 5,927 5,927 (1,413,402) (50,643) (89,096) 6,068,557 (1,446,186) 32,784 (21,563) 3,577,814 3 5.1 5.1 14 14 6 Total liabilities and shareholders' equity 6,146,483 3,602,622 Statement of profit or loss for the year ended December 31, 2023 In thousands of CHF Finance income Other income Total income Personnel expenses General and administrative expenses Management fee expenses Reversal of impairment Finance expenses Taxes Total expenses (Loss) / Profit for the year 8 7 23,699 10 23,709 (44,533) (19,548) (7,333) – (968) (1,970) (74,352) (50,643) 26,571 21 26,592 (18,149) (11,361) (7,107) 44,114 (166) (1,139) 6,192 32,784 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 257/336 Statement of financial position at December 31, 2023 Note 2023 2022 In thousands of CHF Note 31.12.2023 31.12.2022 Assets Cash and cash equivalents Current receivables third parties Current receivables subsidiaries Loans to subsidiaries Current assets Investments in subsidiaries Non-current assets Total assets Liabilities and shareholders' equity Current interest bearing liabilities Current liabilities third parties Current liabilities participants and bodies Current liabilities subsidiaries Deferred income and accrued expenses Current liabilities Total liabilities Share capital Legal capital reserves Reserve from capital contribution Reserve from capital contribution for own shares held at subsidiaries Legal retained earnings Other legal reserves Voluntary retained earnings Results carried forward (Loss) / profit for the year Treasury shares Total shareholders' equity 76,910 478 4,334 691,000 772,722 5,373,761 5,373,761 6,146,483 649 2,732 – 1,781 72,764 77,926 77,926 906 64 2,313 775,000 778,283 2,824,339 2,824,339 3,602,622 965 1,118 70 1,094 21,561 24,808 24,808 763,071 453,985 6,851,002 1,698 4,551,169 1,698 5,927 5,927 (1,413,402) (50,643) (89,096) 6,068,557 (1,446,186) 32,784 (21,563) 3,577,814 3 5.1 5.1 14 14 6 Total liabilities and shareholders' equity 6,146,483 3,602,622 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 258/336 Notes to the financial statements 1. Corporate information Avolta AG (the “Company”) is a publicly listed company. The shares of the Company are listed on the Swiss Stock Exchange (SIX) in Zurich. Avolta 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. Following the combination with Autogrill in February 2023, the company was renamed from Dufry AG to Avolta AG to unify the combined business representing the compa- ny’s broader scope and diversification. The shareholder resolved to change the com- pany name of Dufry AG to Avolta AG and to amend article 1 of the Articles of Incorpora- tion at the Extraordinary General Meeting of November 3, 2023. 2. Accounting policies 2.1 Basis of preparation We 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 the Consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”), a recognized accounting stan- dard, the Company has, in accordance with the CO, elected to forego presenting the statement of cash flows, the additional disclosures and the management report other- wise required by the CO. The 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. The financial statements are prepared applying on a going concern basis. 2.2 Russia’s invasion of Ukraine On February 24, 2022, the Russian Federation initiated a military attack on the Ukraine. In Ukraine, the Avolta Group only has operations at the Airport in Odessa, which are sus- pended due to the conflict since March 2022. The Russian travel market has a very low significance for Avolta Group, since Avolta‘s operations in Russia, operated through a local joint venture, only represents 0.8 % of the 2023 Group’s net sales (2022: 1.7 %). However, any further deterioration of the economic situation in Russia or escalation in the hostilities between Russia and Ukraine as well as any restrictions of Russian passen- gers to national or international travel may adversely affect Avolta’s business, including its operations in countries that have traditionally been popular with Russian tourists. The Group cannot predict the outcome of the conflict but is monitoring the situation very closely. 2.3 Summary of significant accounting policies Investments in subsidiaries Investments 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 or impairment reversal is recognized in the statement of profit or loss. Treasury shares statement of profit or loss. Share-based payments Treasury shares are recognized at acquisition cost and deducted from shareholders’ equity. Gains or losses arising out of the sale of treasury shares are recorded in the The Company accrues personnel expenses related to share-based payment plans for the respective period in deferred income and accrued liabilities. Any difference between the share-based awards granted and the corresponding 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 liabilities Interest-bearing liabilities are recognized at their nominal value in the statement of financial position. Exchange rate differences All assets and liabilities denominated in foreign currencies are translated into CHF using year-end exchange rates, except investments in subsidiaries, which are recognized 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. Notes to the financial statements 1. Corporate information Avolta AG (the “Company”) is a publicly listed company. The shares of the Company are listed on the Swiss Stock Exchange (SIX) in Zurich. Avolta 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. Following the combination with Autogrill in February 2023, the company was renamed from Dufry AG to Avolta AG to unify the combined business representing the compa- ny’s broader scope and diversification. The shareholder resolved to change the com- pany name of Dufry AG to Avolta AG and to amend article 1 of the Articles of Incorpora- tion at the Extraordinary General Meeting of November 3, 2023. 2. Accounting policies 2.1 Basis of preparation We 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 the Consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”), a recognized accounting stan- dard, the Company has, in accordance with the CO, elected to forego presenting the statement of cash flows, the additional disclosures and the management report other- wise required by the CO. The 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. The financial statements are prepared applying on a going concern basis. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 259/336 2.2 Russia’s invasion of Ukraine On February 24, 2022, the Russian Federation initiated a military attack on the Ukraine. In Ukraine, the Avolta Group only has operations at the Airport in Odessa, which are sus- pended due to the conflict since March 2022. The Russian travel market has a very low significance for Avolta Group, since Avolta‘s operations in Russia, operated through a local joint venture, only represents 0.8 % of the 2023 Group’s net sales (2022: 1.7 %). However, any further deterioration of the economic situation in Russia or escalation in the hostilities between Russia and Ukraine as well as any restrictions of Russian passen- gers to national or international travel may adversely affect Avolta’s business, including its operations in countries that have traditionally been popular with Russian tourists. The Group cannot predict the outcome of the conflict but is monitoring the situation very closely. 2.3 Summary of significant accounting policies Investments in subsidiaries Investments 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 or impairment reversal is recognized in the statement of profit or loss. Treasury shares Treasury shares are recognized at acquisition cost and deducted from shareholders’ equity. Gains or losses arising out of the sale of treasury shares are recorded in the statement of profit or loss. Share-based payments The Company accrues personnel expenses related to share-based payment plans for the respective period in deferred income and accrued liabilities. Any difference between the share-based awards granted and the corresponding 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 liabilities Interest-bearing liabilities are recognized at their nominal value in the statement of financial position. Exchange rate differences All assets and liabilities denominated in foreign currencies are translated into CHF using year-end exchange rates, except investments in subsidiaries, which are recognized 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. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 260/336 3. Direct subsidiaries Share capital and voting rights Share capital Currency In thousands 31.12.2023 31.12.2022 31.12.2023 31.12.2022 Dufry International AG, Switzerland Dufry Corporate AG, Switzerland Dufry Holdings & Investments AG, Switzerland 100% 100% 100% 100% 100% 100% 1,000 100 1,000 1,000 100 1,000 CHF CHF CHF 4. Significant shareholders’ participation In percentage (%) of outstanding registered shares 31.12.2023 31.12.2022 Edizione S.p.A. Advent International Corporation Compagnie Financiere Rupert State of Qatar Alibaba Group Holding Limited BlackRock, Inc. 22.17% 8.72% 4.94% 4.49% 4.87% 3.41% 0.00% 10.10% 5.00% 6.91% 5.40% 0.00% Reclass from reserve from capital contribution for own shares held at 5.2 Conditional share capital 5. Share capital 5.1 Ordinary shares In thousands of CHF Balance at January 1, 2022 subsidiaries Balance at December 31, 2022 Increase of share capital Balance at December 31, 2023 Balance at January 1, 2022 Increase of conditional share capital Balance at December 31, 2022 Decrease of conditional share capital Increase of conditional share capital Conversion of mandatory convertible bonds Balance at December 31, 2023 In In Balance at January 1, 2022 Increase of authorized share capital Balance at December 31, 2022 Balance at May 08, 2023 Issued out of capital range at May 22, 2023 Issued out of capital range at June 7, 2023 Issued out of capital range at July 6, 2023 Issued out of capital range at July 24, 2023 Balance at December 31, 2023 5.3 Capital Band (formerly authorized capital) Number of shares Share capital bution Reserve from capital contri- 90,797,007 453,985 4,552,310 – 90,797,007 61,817,244 152,614,251 – 453,985 309,086 763,071 (1,141) 4,551,169 2,299,833 6,851,002 Shares CHF 9,079,700 45,398,500 30,663,329 39,743,029 (30,663,329) 45,398,503 (2,092,113) 52,386,090 153,316,645 198,715,145 (153,316,645) 226,992,515 (10,460,565) 261,930,450 Shares Nominal value in CHF – – 45,398,503 45,398,503 226,992,515 226,992,515 45,398,503 226,992,515 (22,133,293) (4,393,587) (410,471) (2,124,451) 16,336,701 (110,666,465) (21,967,935) (2,052,355) (10,622,255) 81,683,505 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 261/336 3. Direct subsidiaries Share capital and voting rights Share capital Currency In thousands 31.12.2023 31.12.2022 31.12.2023 31.12.2022 Dufry International AG, Switzerland Dufry Corporate AG, Switzerland Dufry Holdings & Investments AG, Switzerland 100% 100% 100% 100% 100% 100% 1,000 100 1,000 1,000 100 1,000 CHF CHF CHF 4. Significant shareholders’ participation In percentage (%) of outstanding registered shares 31.12.2023 31.12.2022 Edizione S.p.A. Advent International Corporation Compagnie Financiere Rupert State of Qatar BlackRock, Inc. Alibaba Group Holding Limited 22.17% 8.72% 4.94% 4.49% 4.87% 3.41% 0.00% 10.10% 5.00% 6.91% 5.40% 0.00% 5. Share capital 5.1 Ordinary shares In thousands of CHF Balance at January 1, 2022 Reclass from reserve from capital contribution for own shares held at subsidiaries Balance at December 31, 2022 Increase of share capital Balance at December 31, 2023 5.2 Conditional share capital In Balance at January 1, 2022 Increase of conditional share capital Balance at December 31, 2022 Decrease of conditional share capital Increase of conditional share capital Conversion of mandatory convertible bonds Balance at December 31, 2023 Number of shares Share capital Reserve from capital contri- bution 90,797,007 453,985 4,552,310 – 90,797,007 61,817,244 152,614,251 – 453,985 309,086 763,071 (1,141) 4,551,169 2,299,833 6,851,002 Shares CHF 9,079,700 45,398,500 30,663,329 39,743,029 (30,663,329) 45,398,503 (2,092,113) 52,386,090 153,316,645 198,715,145 (153,316,645) 226,992,515 (10,460,565) 261,930,450 Shares Nominal value in CHF – – 45,398,503 45,398,503 226,992,515 226,992,515 45,398,503 226,992,515 (22,133,293) (4,393,587) (410,471) (2,124,451) 16,336,701 (110,666,465) (21,967,935) (2,052,355) (10,622,255) 81,683,505 5.3 Capital Band (formerly authorized capital) In Balance at January 1, 2022 Increase of authorized share capital Balance at December 31, 2022 Balance at May 08, 2023 Issued out of capital range at May 22, 2023 Issued out of capital range at June 7, 2023 Issued out of capital range at July 6, 2023 Issued out of capital range at July 24, 2023 Balance at December 31, 2023 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 262/336 6. Treasury shares In thousands of Balance at January 1, 2022 Purchased shares Balance at December 31, 2022 Returned shares 1 Purchased shares Balance at December 31, 2023 1 Related to a past business combination. 2 Direct and indirect. 7. Impairment of investments in subsidiaries Avolta AG has reviewed the valuation of its investments in Dufry International AG and Dufry Holdings & Investments AG. Based on the assessment performed, the Company did not recognize a need for impairment (2022 reversal of impairment: CHF 44.1 million). 8. Personnel expenses The personnel expenses correspond to the remuneration of selected members of the senior management. Avolta AG employed less than 10 employees in 2023 and 2022. 9. Guarantee commitment regarding Swiss value added tax (VAT) The Company belongs to the Swiss value added tax (VAT) group of Dufry Interna- tional AG, and thus carries joint liability to the Swiss federal tax administration for VAT. Members of the VAT group as of December 31, 2023, are: AVOLTA Participations AG DUFRY International AG DUFRY Samnaun AG DUFRY Russia Holding AG DUFRY Trading AG DUFRY Basel Mulhouse AG DUFRY Corporate AG DUFRY Holdings & Investments AG AVOLTA AG DUFRY Altay AG The Nuance Group AG Shares 2 11,281 600,000 611,281 804,728 800,000 2,216,009 CHF (1,300) (21,563) (22,863) (34,129) (33,404) (90,396) 10. Contingent liabilities The Company jointly and severally with Dufry International AG and Dufry Financial Ser- vices B. V. guaranteed the following credit facilities: In millions of Maturity Coupon rate Currency currency CHF Nominal amount in Drawn amount in Main bank credit facilities Committed revolving credit facility 20.12.2027 EUR 2,750.0 Subtotal Senior notes Senior notes Senior notes Senior notes Senior notes Convertible notes Subtotal Guarantee facility Uncommitted guarantee facility Subtotal At December 31, 2023 Main bank credit facilities Committed revolving credit facility Subtotal Senior notes Senior notes Senior notes Senior notes Senior notes Convertible notes Mandatory convertible notes Subtotal Guarantee facility Uncommitted guarantee facility Subtotal At December 31, 2022 15.04.2028 15.04.2026 15.10.2024 15.02.2027 30.03.2026 3.38% 3.63% 2.50% 2.00% 0.75% EUR CHF EUR EUR CHF 725.0 300.0 800.0 750.0 500.0 n / a EUR 49.0 20.12.2027 EUR 2,085.0 15.04.2028 15.04.2026 15.10.2024 15.02.2027 30.03.2026 18.11.2023 3.38% 3.63% 2.50% 2.00% 0.75% 4.10% EUR CHF EUR EUR CHF CHF 725.0 300.0 800.0 750.0 500.0 69.5 n / a EUR 49.0 357.8 357.8 673.4 300.0 743.0 696.6 500.0 2,913.0 45.5 45.5 3,316.3 409.5 409.5 717.5 300.0 791.7 742.2 500.0 – 3,051.3 48.5 48.5 3,509.3 In millions of Maturity Coupon rate Currency currency CHF Nominal amount in Drawn amount in There were no assets pledged as of December 31, 2023 and 2022. 6. Treasury shares In thousands of Balance at January 1, 2022 Purchased shares Balance at December 31, 2022 Returned shares 1 Purchased shares Balance at December 31, 2023 1 Related to a past business combination. 2 Direct and indirect. Shares 2 11,281 600,000 611,281 804,728 800,000 2,216,009 CHF (1,300) (21,563) (22,863) (34,129) (33,404) (90,396) 7. Impairment of investments in subsidiaries Avolta AG has reviewed the valuation of its investments in Dufry International AG and Dufry Holdings & Investments AG. Based on the assessment performed, the Company did not recognize a need for impairment (2022 reversal of impairment: CHF 44.1 million). 8. Personnel expenses The personnel expenses correspond to the remuneration of selected members of the senior management. Avolta AG employed less than 10 employees in 2023 and 2022. 9. Guarantee commitment regarding Swiss value added tax (VAT) The Company belongs to the Swiss value added tax (VAT) group of Dufry Interna- tional AG, and thus carries joint liability to the Swiss federal tax administration for VAT. Members of the VAT group as of December 31, 2023, are: AVOLTA Participations AG DUFRY International AG DUFRY Samnaun AG DUFRY Russia Holding AG DUFRY Trading AG DUFRY Basel Mulhouse AG DUFRY Corporate AG DUFRY Holdings & Investments AG AVOLTA AG DUFRY Altay AG The Nuance Group AG Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 263/336 10. Contingent liabilities The Company jointly and severally with Dufry International AG and Dufry Financial Ser- vices B. V. guaranteed the following credit facilities: In millions of Maturity Coupon rate Currency Nominal amount in currency Drawn amount in CHF Main bank credit facilities Committed revolving credit facility 20.12.2027 EUR 2,750.0 Subtotal Senior notes Senior notes Senior notes Senior notes Senior notes Convertible notes Subtotal Guarantee facility Uncommitted guarantee facility Subtotal At December 31, 2023 15.04.2028 15.04.2026 15.10.2024 15.02.2027 30.03.2026 3.38% 3.63% 2.50% 2.00% 0.75% EUR CHF EUR EUR CHF 725.0 300.0 800.0 750.0 500.0 n / a EUR 49.0 357.8 357.8 673.4 300.0 743.0 696.6 500.0 2,913.0 45.5 45.5 3,316.3 In millions of Maturity Coupon rate Currency Nominal amount in currency Drawn amount in CHF Main bank credit facilities Committed revolving credit facility Subtotal Senior notes Senior notes Senior notes Senior notes Senior notes Convertible notes Mandatory convertible notes Subtotal Guarantee facility Uncommitted guarantee facility Subtotal At December 31, 2022 20.12.2027 EUR 2,085.0 15.04.2028 15.04.2026 15.10.2024 15.02.2027 30.03.2026 18.11.2023 3.38% 3.63% 2.50% 2.00% 0.75% 4.10% EUR CHF EUR EUR CHF CHF 725.0 300.0 800.0 750.0 500.0 69.5 n / a EUR 49.0 409.5 409.5 717.5 300.0 791.7 742.2 500.0 – 3,051.3 48.5 48.5 3,509.3 There were no assets pledged as of December 31, 2023 and 2022. 12. Events after reporting date No significant events occurred after 31 December 2023 up to 6 March 2024 that would have a material impact on these financial statements. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 264/336 11. Participations of the members of the Board of Directors and the Global Executive Committee in Avolta AG The following members of the Board of Directors or of the Global Executive Committee of Avolta AG (including related parties) held directly or indirectly shares of the Company at December 31, 2023 and December 31, 2022 (members not listed do not hold any shares or options): In thousands of Members of board of directors J.C. Torres Carretero, Chairman H. Jo Min, Lead Independent Director L. Tyler-Cagni, Director Total Board of Directors Members of global executive committee X. Rossinyol, CEO Y. Gerster, CFO F. Cheung, President & CEO Asia Pacific S. Johnson, President & CEO North America L. Marin, President & CEO Europe, Middle East and Africa E. Urioste, President & CEO Latin America P. Duclos, Group General Counsel C. Rossotto, Chief Public Affairs & ESG Officer V. Talwar, Chief Commercial & Digital Officer K. Volery, Chief People & Culture Officer Additional former member of global executive committee E. Andrades, CEO Operations A. Belardini, Chief Commercial Officer S. Branquinho, Chief Diversity & Inclusion Officer Total Global Executive Committee 31.12.2023 31.12.2022 Shares Outstanding un- vested PSU 1 Participation Shares Outstanding un- vested PSU 1 Participation 637.1 0.7 3.6 641.4 81.8 8.7 – – 10.8 – – – – – n / a n / a n / a 101.3 – – – – 208.5 70.3 16.6 26.4 68.8 16.0 74.7 16.9 23.4 14.4 n / a n / a n / a 535.9 0.42% 0.00% 0.00% 0.42% 0.19% 0.05% 0.01% 0.02% 0.05% 0.01% 0.05% 0.01% 0.02% 0.01% n / a n / a n / a 0.42% 611.8 0.7 3.6 616.1 81.2 8.7 n / a n / a 10.8 n / a – n / a n / a n / a 2.0 19.1 0.5 122.3 – – – 76.0 32.4 n / a n / a 32.4 n / a 32.4 n / a n / a n / a 32.4 32.4 6.0 244.0 0.67% 0.00% 0.00% 0.68% 0.17% 0.05% n/a n/a 0.05% n/a 0.04% n/a n/a n/a 0.04% 0.06% 0.01% 0.40% 1 Outstanding unvested Performance Share Units (PSU) at target level. None of the members of the Board of Directors or Global Executive Committee held any options. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 265/336 12. Events after reporting date No significant events occurred after 31 December 2023 up to 6 March 2024 that would have a material impact on these financial statements. 11. Participations of the members of the Board of Directors and the Global Executive Committee in Avolta AG The following members of the Board of Directors or of the Global Executive Committee of Avolta AG (including related parties) held directly or indirectly shares of the Company at December 31, 2023 and December 31, 2022 (members not listed do not hold any shares or options): In thousands of Members of board of directors J.C. Torres Carretero, Chairman H. Jo Min, Lead Independent Director L. Tyler-Cagni, Director Total Board of Directors Members of global executive committee X. Rossinyol, CEO Y. Gerster, CFO F. Cheung, President & CEO Asia Pacific America S. Johnson, President & CEO North L. Marin, President & CEO Europe, Middle East and Africa E. Urioste, President & CEO Latin America P. Duclos, Group General Counsel C. Rossotto, Chief Public Affairs & ESG Officer V. Talwar, Chief Commercial & Digital Officer K. Volery, Chief People & Culture Officer Additional former member of global executive committee E. Andrades, CEO Operations A. Belardini, Chief Commercial Officer S. Branquinho, Chief Diversity & Inclusion Officer Total Global Executive Committee 31.12.2023 31.12.2022 Shares Outstanding un- vested PSU 1 Participation Shares Participation Outstanding un- vested PSU 1 637.1 0.7 3.6 641.4 81.8 8.7 10.8 – – – – – – – n / a n / a n / a 101.3 – – – – 208.5 70.3 16.6 26.4 68.8 16.0 74.7 16.9 23.4 14.4 n / a n / a n / a 535.9 0.42% 0.00% 0.00% 0.42% 0.19% 0.05% 0.01% 0.02% 0.05% 0.01% 0.05% 0.01% 0.02% 0.01% n / a n / a n / a 0.42% 611.8 0.7 3.6 616.1 81.2 8.7 n / a n / a 10.8 n / a – n / a n / a n / a 2.0 19.1 0.5 122.3 – – – 76.0 32.4 n / a n / a 32.4 n / a 32.4 n / a n / a n / a 32.4 32.4 6.0 244.0 0.67% 0.00% 0.00% 0.68% 0.17% 0.05% n/a n/a 0.05% n/a 0.04% n/a n/a n/a 0.04% 0.06% 0.01% 0.40% 1 Outstanding unvested Performance Share Units (PSU) at target level. None of the members of the Board of Directors or Global Executive Committee held any options. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 266/336 13. Material indirect subsidiaries The table below lists the material subsidiaries of the Avolta Group, including all entities which contribute more than 0.3 % of turnover and/or 0.3 % of total assets. H = Holding/Finance O = Operating D = Distribution Center As of December 31, 2023 Location Country Type Ownership in % Share capital in thousands Currency As of December 31, 2023 Location Country Type Ownership in % Share capital in thousands Currency Europe, Middle East and Africa (EMEA) ADF Shops CJSC AC Restaurant&Hotel Beheer N.V Autogrill Belgie N.V. Dufry Sofia OOD WDFG Helsinki Oy Autogrill Coté France S.A.S. Autogrill Deutschland GmbH Le Crobag GmbH & Co KG Hellenic Duty Free Shops S.A. Autogrill Italia S.p.A. Dufrital S.p.A. Nuova Sidap S.r.l. World Duty Free SpA Yerevan Antwerp Antwerp Sofia Vantaa Marseille Munich Hamburg Athens Novara Milan Novara Novara Aldeasa Jordan Airports Duty Free Shops Ltd Amman WDFG SAU, Kuwait Branch Nuance Group (Malta) Ltd Dufry Maroc Sarl HMSHost Nederland B.V. HorecaExploitatie Schiphol B.V Dufry d.o.o. Belgrade Sociedad de Distribucion Comercial Aeroportuaria de Canarias SL World Duty Free Group SAU Nuance Group (Sverige) AB Autogrill Schweiz AG The Nuance Group AG Urart Gumr. Magaza Isletm. ve HMSHost UK, Limited WDFG Ferries Limited WDFG UK Limited Dufry Sharjah FZC Asia Pacific Nuance Group (Australia) Pty L The Nuance Group (HK) Ltd The Nuance Group (Macau) Ltd Armenia Belgium Belgium Bulgaria Finland France Germany Germany Greece Italy Italy Italy Italy Jordan Kuwait Malta Morocco Netherlands Netherlands Serbia Spain Spain Kuwait City Luqa Casablanca Amsterdam Amsterdam Belgrade Telde Madrid Stockholm Sweden Olten Zurich Antalya London London London Sharjah Switzerland Switzerland Turkey United Kingdom United Kingdom United Kingdom Utd.Arab Emir. Melbourne Hong Kong Macau Australia China China Autogrill VFS F&B Co. Ltd. Ho Chi Minh City Vietnam O O O O O O O O O O O O H O O O O O O O O O O O O O O O O O O O O O 100 100 100 80 100 100 100 100 100 100 60 100 100 100 100 52 80 100 100 100 60 100 100 100 100 100 100 100 100 50 100 100 100 70 553,825 3,250 8,756 2,500 3 31,580 205 905 397,535 68,688 466 200 63,720 500 2,383 2,795 2,500 – 45 6,603 717 19,831 100 23,183 1,001 1,728 217 50 360 150 210,000 – 50 104,462,000 AMD EUR EUR BGN EUR EUR EUR EUR EUR EUR EUR EUR EUR JOD KWD EUR MAD EUR EUR EUR EUR EUR SEK CHF CHF TRY GBP GBP GBP AED AUD HKD MOP VND North America HostInternational of Canada, Ltd The Nuance Group (Canada) Inc. WDFG Vancouver LP Airport Management Services LL HG BOS Duty Free JV HG Logan Retailers JV HMSHost Corporation Host International, Inc. HSI Honolulu JV Company HSI MCA FLL FB, LLC HSI MCA LBL LAX T6-TBIT, LLC Hudson Group (HG) Inc. Hudson Group (HG) Retail, LLC Hudson Las Vegas JV Hudson New Hudson News O'Hare JV JFK Air Ventures II JV Seattle Air Ventures Stellar Partner Inc. WDFG North America LLC Latin America Interbaires SA Dufry do Brasil DF Shop Ltda Dufry Lojas Francas Ltda Aldeasa Chile, Ltda Dufry Colombia S.A.S Inversiones Tunc, SA Dufry Jamaica Ltd. Dufry Mexico SA de CV Alliance Duty Free, LLC Navinten SA Global Distribution Centers Vancouver Toronto Vancouver Delaware Boston Boston Delaware Delaware Honolulu Delaware Delaware Delaware Delaware Las Vegas Chicago New York Olympia Tampa Delaware Canada Canada Canada USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA Buenos Aires Argentina Rio de Janeiro Sao Paulo Santiago de Chile Brazil Brazil Chile Bogota Colombia Santo Domingo Dominican Rep. St. James Mexico City San Juan Jamaica Mexico Puerto Rico Montevideo Uruguay Dufry Cruise Services, Inc. Miami USA International Operations & Services (HK) Ltd Hong Kong Dufry International AG Basel Hong Kong Switzerland International Operations & Services (UY) S.A. Montevideo Uruguay International Operations & Services (USA) LLC Miami USA Other companies Dufry Financial Services B.V. Dufry One B.V. Eindhoven Eindhoven Netherlands Netherlands H/O H/O H/O H/O O O O O O H O O O H O O O O O O O O O O O O O O O O D H D D H H 100 100 100 100 80 80 100 100 90 76 75 100 100 73 70 80 75 100 100 100 87 87 100 100 100 100 100 100 51 100 100 100 100 100 100 100 1,351 1,017 – – – – – – – – – – – – – – – – – – 26 258,920 830,214 1,323,310 2,517 100,100 200 4,250 296,747 – 2 – 109,000 1,000 700 19,060 CAD CAD CAD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD ARS BRL BRL USD COP DOP JMD MXN USD UYP USD HKD CHF UYU USD EUR EUR Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 267/336 13. Material indirect subsidiaries The table below lists the material subsidiaries of the Avolta Group, including all entities which contribute more than 0.3 % of turnover and/or 0.3 % of total assets. H = Holding/Finance O = Operating D = Distribution Center Aldeasa Jordan Airports Duty Free Shops Ltd Amman Europe, Middle East and Africa (EMEA) ADF Shops CJSC AC Restaurant&Hotel Beheer N.V Autogrill Belgie N.V. Dufry Sofia OOD WDFG Helsinki Oy Autogrill Coté France S.A.S. Autogrill Deutschland GmbH Le Crobag GmbH & Co KG Hellenic Duty Free Shops S.A. Autogrill Italia S.p.A. Dufrital S.p.A. Nuova Sidap S.r.l. World Duty Free SpA WDFG SAU, Kuwait Branch Nuance Group (Malta) Ltd Dufry Maroc Sarl HMSHost Nederland B.V. HorecaExploitatie Schiphol B.V Dufry d.o.o. Belgrade Sociedad de Distribucion Comercial Aeroportuaria de Canarias SL World Duty Free Group SAU Nuance Group (Sverige) AB Autogrill Schweiz AG The Nuance Group AG Urart Gumr. Magaza Isletm. ve HMSHost UK, Limited WDFG Ferries Limited WDFG UK Limited Dufry Sharjah FZC Asia Pacific Nuance Group (Australia) Pty L The Nuance Group (HK) Ltd The Nuance Group (Macau) Ltd Yerevan Antwerp Antwerp Sofia Vantaa Marseille Munich Hamburg Athens Novara Milan Novara Novara Kuwait City Luqa Casablanca Amsterdam Amsterdam Belgrade Telde Madrid Olten Zurich Antalya London London London Sharjah Armenia Belgium Belgium Bulgaria Finland France Germany Germany Greece Italy Italy Italy Italy Jordan Kuwait Malta Morocco Netherlands Netherlands Serbia Spain Spain Switzerland Switzerland Turkey United Kingdom United Kingdom United Kingdom Utd.Arab Emir. Stockholm Sweden Autogrill VFS F&B Co. Ltd. Ho Chi Minh City Vietnam Melbourne Hong Kong Macau Australia China China O O O O O O O O O O O O H O O O O O O O O O O O O O O O O O O O O O 100 100 100 80 100 100 100 100 100 100 60 100 100 100 100 52 80 100 100 100 60 100 100 100 100 100 100 100 100 50 100 100 100 70 553,825 3,250 8,756 2,500 3 31,580 205 905 397,535 68,688 466 200 63,720 500 2,383 2,795 2,500 – 45 6,603 717 19,831 100 23,183 1,001 1,728 217 50 360 150 210,000 – 50 104,462,000 AMD EUR EUR BGN EUR EUR EUR EUR EUR EUR EUR EUR EUR JOD KWD EUR MAD EUR EUR EUR EUR EUR SEK CHF CHF TRY GBP GBP GBP AED AUD HKD MOP VND As of December 31, 2023 Location Country Type As of December 31, 2023 Location Country Ownership in % Share capital in thousands Currency North America HostInternational of Canada, Ltd The Nuance Group (Canada) Inc. WDFG Vancouver LP Airport Management Services LL HG BOS Duty Free JV HG Logan Retailers JV HMSHost Corporation Host International, Inc. HSI Honolulu JV Company HSI MCA FLL FB, LLC HSI MCA LBL LAX T6-TBIT, LLC Hudson Group (HG) Inc. Hudson Group (HG) Retail, LLC Hudson Las Vegas JV Hudson New Hudson News O'Hare JV JFK Air Ventures II JV Seattle Air Ventures Stellar Partner Inc. WDFG North America LLC Latin America Interbaires SA Dufry do Brasil DF Shop Ltda Dufry Lojas Francas Ltda Aldeasa Chile, Ltda Dufry Colombia S.A.S Inversiones Tunc, SA Dufry Jamaica Ltd. Dufry Mexico SA de CV Alliance Duty Free, LLC Navinten SA Vancouver Toronto Vancouver Delaware Boston Boston Delaware Delaware Honolulu Delaware Delaware Delaware Delaware Las Vegas Chicago New York Olympia Tampa Delaware Canada Canada Canada USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA Buenos Aires Argentina Rio de Janeiro Sao Paulo Santiago de Chile Brazil Brazil Chile Bogota Colombia Santo Domingo Dominican Rep. St. James Mexico City San Juan Jamaica Mexico Puerto Rico Montevideo Uruguay Dufry Cruise Services, Inc. Miami USA Global Distribution Centers International Operations & Services (HK) Ltd Hong Kong Dufry International AG Basel Hong Kong Switzerland International Operations & Services (UY) S.A. Montevideo Uruguay International Operations & Services (USA) LLC Miami USA Other companies Dufry Financial Services B.V. Dufry One B.V. Eindhoven Eindhoven Netherlands Netherlands Type O O O H/O O O H H/O O O O H H/O O O O O O H/O O O O O O O O O O O O D H D D H H Ownership in % Share capital in thousands Currency 100 100 100 100 80 80 100 100 90 76 75 100 100 73 70 80 75 100 100 100 87 87 100 100 100 100 100 100 51 100 100 100 100 100 100 100 1,351 1,017 – – – – – – – – – – – – – – – 26 – 258,920 830,214 1,323,310 2,517 100,100 200 – 4,250 2 296,747 – 109,000 1,000 700 19,060 – – CAD CAD CAD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD USD ARS BRL BRL USD COP DOP JMD MXN USD UYP USD HKD CHF UYU USD EUR EUR Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 268/336 Proposed appropriation of retained earnings and capital distribution In thousands of CHF 2023 2022 Proposed appropriation of retained earnings Result carried forward Profit /(Loss) for the year Retained earnings at December 31 Proposed distribution out of retained earnings Balance at beginning of the year Dividends Reclass from reserve from capital contribution for own shares held at subsidiaries Reserve from capital contribution at December 31 (1,413,402) (50,643) (1,464,045) 4,551,169 (106,830) – 4,444,339 (1,446,186) 32,784 (1,413,402) 4,552,310 – (1,141) 4,551,169 Deloitte AG Pfingstweidstrasse 11 8005 Zürich Schweiz Phone: +41 (0)58 279 60 00 Fax: +41 (0)58 279 66 00 www.deloitte.ch To the General Meeting ofAvolta AG (formerly Dufry AG), BaselBasel, March 6, 2024Report on the Audit of the Financial Statements OpinionWe have audited the financial statements of Avolta AG (the Company), which comprise the statement of financial position as at December 31, 2023, the statement of profit or loss for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.In our opinion, the accompanying financial statements, presented on pages 256 to 268 comply with Swiss law and the Company’s articles of incorporation.Basis for OpinionWe conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the “Auditor‘s Responsibilities for the Audit of the Financial Statements” section of our report. We are independent of the Company in accordance with the provisions of Swiss law, together with the requirements of the Swiss audit profession, 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.Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial state-ments of the current period. 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.Valuation of investments in subsidiariesKey Audit MatterAs described in Notes 2.3, 3 and 7 to the financial statements, Avolta AG holds investments in Avolta Group companies with the carrying value of CHF 5,373.8 million (2022: CHF 2,824.3 million), representing 87% (2022: 78%) of the total assets. As at December 31, 2023, management neither recorded an impairment reversal nor an impairment loss (2022: CHF 44.1 million impairment reversal). In accordance with Article 960 para. 1 CO, each investment held is valued individually and reviewed annually for impairment indi-cators. Each investment showing impairment indicators is tested for impairment and an impairment would need to be recorded by management if the recoverable amount is lower than the carrying amount. The impairment assessment is dependent on the assumptions of cash flow projections used in the impairment tests. Key assump-tions are projected sales growth rates for the forecast period and the weighted average cost of capital applied.Given the high level of judgment and complexity of the estimations, combined with the significance of the above amounts to the financial statements as a whole, we assessed management’s estimates made in relation to investments in subsidiaries to be a key audit matter.How the scope of our audit responded to the Key Audit MatterWe obtained an understanding of management’s process and controls of the identification of impairment indicators, the review of key assumptions used in the impairment test and the review of the impairment models.For investments selected, we involved valuation specialists to assess the appropriateness of the mathematical integrity and valua-tion methodology used in the impairment tests. We evaluated the key inputs and assumptions used in impairment tests of the investments in the Avolta Group companies.We performed analyses over the projected sales growth rates used in the cash flow projections during the forecast period. We independently determined the weighted average cost of capital (WACC) and compared them against management’s assumptions, with the support of our valuation specialists. Proposed appropriation of retained earnings and capital distribution In thousands of CHF 2023 2022 Proposed appropriation of retained earnings Result carried forward Profit /(Loss) for the year Retained earnings at December 31 Proposed distribution out of retained earnings Balance at beginning of the year Dividends Reclass from reserve from capital contribution for own shares held at subsidiaries Reserve from capital contribution at December 31 (1,413,402) (50,643) (1,464,045) 4,551,169 (106,830) – 4,444,339 (1,446,186) 32,784 (1,413,402) 4,552,310 – (1,141) 4,551,169 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 269/336 Deloitte AG Pfingstweidstrasse 11 8005 Zürich Schweiz Phone: +41 (0)58 279 60 00 Fax: +41 (0)58 279 66 00 www.deloitte.ch To the General Meeting ofAvolta AG (formerly Dufry AG), BaselBasel, March 6, 2024Report on the Audit of the Financial Statements OpinionWe have audited the financial statements of Avolta AG (the Company), which comprise the statement of financial position as at December 31, 2023, the statement of profit or loss for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.In our opinion, the accompanying financial statements, presented on pages 256 to 268 comply with Swiss law and the Company’s articles of incorporation.Basis for OpinionWe conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the “Auditor‘s Responsibilities for the Audit of the Financial Statements” section of our report. We are independent of the Company in accordance with the provisions of Swiss law, together with the requirements of the Swiss audit profession, 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.Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial state-ments of the current period. 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.Valuation of investments in subsidiariesKey Audit MatterAs described in Notes 2.3, 3 and 7 to the financial statements, Avolta AG holds investments in Avolta Group companies with the carrying value of CHF 5,373.8 million (2022: CHF 2,824.3 million), representing 87% (2022: 78%) of the total assets. As at December 31, 2023, management neither recorded an impairment reversal nor an impairment loss (2022: CHF 44.1 million impairment reversal). In accordance with Article 960 para. 1 CO, each investment held is valued individually and reviewed annually for impairment indi-cators. Each investment showing impairment indicators is tested for impairment and an impairment would need to be recorded by management if the recoverable amount is lower than the carrying amount. The impairment assessment is dependent on the assumptions of cash flow projections used in the impairment tests. Key assump-tions are projected sales growth rates for the forecast period and the weighted average cost of capital applied.Given the high level of judgment and complexity of the estimations, combined with the significance of the above amounts to the financial statements as a whole, we assessed management’s estimates made in relation to investments in subsidiaries to be a key audit matter.How the scope of our audit responded to the Key Audit MatterWe obtained an understanding of management’s process and controls of the identification of impairment indicators, the review of key assumptions used in the impairment test and the review of the impairment models.For investments selected, we involved valuation specialists to assess the appropriateness of the mathematical integrity and valua-tion methodology used in the impairment tests. We evaluated the key inputs and assumptions used in impairment tests of the investments in the Avolta Group companies.We performed analyses over the projected sales growth rates used in the cash flow projections during the forecast period. We independently determined the weighted average cost of capital (WACC) and compared them against management’s assumptions, with the support of our valuation specialists. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 270/336 Avolta’s Alternative Performance Measures Avolta 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. These CORE figures exclude exceptional acqui- sition respective disposal related expenses and income, and also exclude impairments and amortization of acquisition-related intangible assets, which can differ significantly from year to year. Avolta’s profit or loss statement in accordance with IFRS is materially impacted by IFRS 16 lease accounting. CORE figures exclude the accounting impact resulting from IFRS 16 lease accounting standard. This is achieved by reversing IFRS 16 related profit or loss line items (i.e. depreciation of right-of-use assets and lease interest) and adding the rel- evant concession fee owed based on the corresponding concession agreement. For this same reason, we consider all our concession fees and corresponding payments as CORE to our business, in contrast to IFRS 16, which treats fixed payments as a financing activity. In addition, we believe that the straight-line depreciation of right-of-use assets does not reflect the economic reality of our business and the operational performance of our Group. Avolta uses these adjusted results in addition to IFRS as important factors in internally assessing the Group’s performance. In addition, Avolta, in continuance with Autogrill’s previous practice, reclasses net sales and respective cost of sales in relation to fuel sales to other income. Organic growth In millions of CHF Like-for-like Net new concessions Organic growth 1 1 As reported i.e. not pro-forma. Organic growth describes the turnover growth of the Company in CHF excluding turn- over from acquisition and disinvestments to allow for annual comparison of Avolta Group’s operational performance. Turnover, consisting of net sales and advertising income, is converted at constant previous year exchange rates. Organic growth is further split into Like-for-Like (LFL) growth and Net new concessions. LFL growth considers only shops that were open and comparable under same condi- tions with last year. Shops that are not comparable are adjusted as scope effects and are being reported as Net new concessions. 2023 23.2% 1.9% 25.1% 2022 77.9% (1.8% ) 76.1% We performed lookback analyses to assess historical revenue and expenses against the Group’s assumptions.We assessed the adequacy of investment related disclosures in note 7 to the financial statements.Based on the procedures performed above, we obtained sufficient audit evidence to address the risk of valuation of investments in subsidiaries.Other InformationThe Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the consolidated financial statements, the standalone financial statements, the renumeration report and our auditor’s reports thereon.Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclu-sion thereon.In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the 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.Board of Directors’ Responsibilities for the Financial StatementsThe Board of Directors is responsible for the preparation of the financial statements in accordance with the provisions of Swiss law and the Company‘s articles of incorporation, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.In preparing the financial statements, the Board of Directors is responsible for assessing the Company’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 Company or to cease operations, or has no realistic alternative but to do so.Auditor‘s Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material miss-tatement, 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 and SA-CH will always detect a material misstatement when it exists. Misstatements 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 finan-cial statements.A further description of our responsibilities for the audit of the financial statements is located on EXPERTsuisse’s website at: https://www.expertsuisse.ch/en/audit-report-for-ordinary-audits. This description forms an integral part of our report.Report on Other Legal and Regulatory RequirementsIn accordance with article 728a para. 1 item 3 CO and PS-CH 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.Furthermore, we confirm that the proposed appropriation of retained earnings and capital distribution complies with Swiss law and the Company’s articles of incorporation. We recommend that the financial statements submitted to you be approved.Deloitte AG Andreas Bodenmann Fabian HellLicensed audit expert Licensed audit expert Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 271/336 Avolta’s Alternative Performance Measures Avolta 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. These CORE figures exclude exceptional acqui- sition respective disposal related expenses and income, and also exclude impairments and amortization of acquisition-related intangible assets, which can differ significantly from year to year. Avolta’s profit or loss statement in accordance with IFRS is materially impacted by IFRS 16 lease accounting. CORE figures exclude the accounting impact resulting from IFRS 16 lease accounting standard. This is achieved by reversing IFRS 16 related profit or loss line items (i.e. depreciation of right-of-use assets and lease interest) and adding the rel- evant concession fee owed based on the corresponding concession agreement. For this same reason, we consider all our concession fees and corresponding payments as CORE to our business, in contrast to IFRS 16, which treats fixed payments as a financing activity. In addition, we believe that the straight-line depreciation of right-of-use assets does not reflect the economic reality of our business and the operational performance of our Group. Avolta uses these adjusted results in addition to IFRS as important factors in internally assessing the Group’s performance. In addition, Avolta, in continuance with Autogrill’s previous practice, reclasses net sales and respective cost of sales in relation to fuel sales to other income. Organic growth In millions of CHF Like-for-like Net new concessions Organic growth 1 1 As reported i.e. not pro-forma. Organic growth describes the turnover growth of the Company in CHF excluding turn- over from acquisition and disinvestments to allow for annual comparison of Avolta Group’s operational performance. Turnover, consisting of net sales and advertising income, is converted at constant previous year exchange rates. Organic growth is further split into Like-for-Like (LFL) growth and Net new concessions. LFL growth considers only shops that were open and comparable under same condi- tions with last year. Shops that are not comparable are adjusted as scope effects and are being reported as Net new concessions. 2023 23.2% 1.9% 25.1% 2022 77.9% (1.8% ) 76.1% We performed lookback analyses to assess historical revenue and expenses against the Group’s assumptions.We assessed the adequacy of investment related disclosures in note 7 to the financial statements.Based on the procedures performed above, we obtained sufficient audit evidence to address the risk of valuation of investments in subsidiaries.Other InformationThe Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the consolidated financial statements, the standalone financial statements, the renumeration report and our auditor’s reports thereon.Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclu-sion thereon.In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the 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.Board of Directors’ Responsibilities for the Financial StatementsThe Board of Directors is responsible for the preparation of the financial statements in accordance with the provisions of Swiss law and the Company‘s articles of incorporation, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.In preparing the financial statements, the Board of Directors is responsible for assessing the Company’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 Company or to cease operations, or has no realistic alternative but to do so.Auditor‘s Responsibilities for the Audit of the Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material miss-tatement, 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 and SA-CH will always detect a material misstatement when it exists. Misstatements 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 finan-cial statements.A further description of our responsibilities for the audit of the financial statements is located on EXPERTsuisse’s website at: https://www.expertsuisse.ch/en/audit-report-for-ordinary-audits. This description forms an integral part of our report.Report on Other Legal and Regulatory RequirementsIn accordance with article 728a para. 1 item 3 CO and PS-CH 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.Furthermore, we confirm that the proposed appropriation of retained earnings and capital distribution complies with Swiss law and the Company’s articles of incorporation. We recommend that the financial statements submitted to you be approved.Deloitte AG Andreas Bodenmann Fabian HellLicensed audit expert Licensed audit expert Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 272/336 CORE profit or loss In millions of CHF Net sales (CORE) Advertising income Turnover (CORE) Cost of sales (CORE) Gross profit (CORE) Concession expenses (CORE) Personnel expenses Other expenses (CORE) Other income (CORE) CORE EBITDA Depreciation, amortization and impairment (CORE) CORE EBIT Financial result (CORE) CORE Profit before tax Income tax (CORE) CORE Net profit Attributable to Non-controlling interests Equity holders of the parent Earnings per share attributable to equity holders of the parent CORE basic earnings / (loss) per share in CHF CORE diluted earnings / (loss) per share in CHF Avolta’s CORE profit or loss statement replaces the IFRS related lease expense lines with our concession fees as per the contracts and moves non-shop related leases back to other expenses. Also, we remove the FX impact on our lease obligations and the financing component of IFRS 16. In addition, all depreciation and amortization expenses related to previous acquisitions are removed to enable a better view of the performance of the current year. CORE EBITDA is used by Avolta’s lenders to calculate covenants under the bank financing agreements. 2023 12,328.8 205.8 12,534.6 (4,477.0) 8,057.6 (3,178.7) (2,539.3) (1,417.7) 207.7 1,129.6 (312.0) 817.6 (201.3) 616.3 (159.5) 456.8 148.9 307.9 2.26 2.21 2022 6,721.2 157.2 6,878.4 (2,684.6) 4,193.8 (2,029.9) (997.9) (620.7) 60.9 606.2 (135.6) 470.7 (175.6) 295.1 (105.5) 189.6 83.9 105.7 1.14 1.12 Profit or loss reconciliation IFRS/CORE 2023 In millions of CHF Net sales (IFRS) / (CORE) Advertising income Turnover (IFRS) / (CORE) Cost of sales (IFRS) / (CORE) Gross profit (IFRS) / (CORE) Leases expenses (IFRS) / Concession expenses (CORE) Personnel expenses Other expenses (IFRS) / (CORE)2, 3 Other income (IFRS) / (CORE) Operating profit bef D&A / CORE EBITDA Depreciation & impairment of PP&E Amortization & impairment of intangibles (IFRS) / (CORE)4 Depreciation & impairment right-of-use assets (IFRS) Operating profit / CORE EBIT Financial result (IFRS) / (CORE)5, 6 Profit before taxes / CORE EBT Income tax (IFRS) / (CORE)7 Net profit / CORE Net profit Attributable to Non-controlling interests Equity holders of the parent Earnings per share attributable to equity holders of the parent Basic Earnings / CORE Basic Earnings per share in CHF Diluted Earnings / CORE Diluted Earnings per share in CHF IFRS 12,583.7 205.8 12,789.5 (4,716.0) 8,073.5 (1,875.5) (2,539.3) (1,375.7) 191.9 2,474.9 (277.4) (242.8) (1,089.6) 865.1 (567.1) 298.0 (81.6) 216.4 129.1 87.3 0.64 0.63 Acquisition rel. adj. (unaudited) Lease adjustments (unaudited) – – – – – – – – – – 18.8 18.8 208.3 227.1 15.7 242.8 (53.3) 189.5 10.9 178.6 – – – – – – – (1,303.2) (60.8) (0.1) (1,364.1) (0.1) 1,089.6 (274.6) 350.1 75.5 (24.6) 50.9 8.9 42.0 Fuel sales adjustments (unaudited)1 (254.9) (254.9) 239.0 (15.9) 15.9 – – – – – – – – – – – – – – – CORE (unaudited) 12,328.8 205.8 12,534.6 (4,477.0) 8,057.6 (3,178.7) (2,539.3) (1,417.7) 207.7 1,129.6 (277.5) (34.5) – 817.6 (201.3) 616.3 (159.5) 456.8 148.9 307.9 2.26 2.21 1 CHF 254.9 million net sales (CORE) and CHF 239.0 million cost of sales (CORE) differ from the IFRS amounts because they do not include fuel sales and fuel cost of sales. The net amount is classified as other income (CORE) in accordance with management's protocol for the analysis of Group figures. 2 Other expenses (CORE) exclude CHF 18.8 million financial related transaction cost directly linked to the closing of the combination with Autogrill. 3 CHF 58.3 million non-shop leases included in other expenses (CORE). 4 CHF 208.3 million amortization of acquisition related concession rights. 5 Financial result (CORE) exclude CHF 15.7 million in connection with a Bridge financing, directly linked to the closing of the combination with Autogrill. 6 CHF 350.1 million lease interest expenses and IFRS 16 related foreign exchange effect. 7 CHF 53.3 million deferred taxes on acquisition related concession rights and CHF 24.6 million deferred taxes related to IFRS 16. CORE profit or loss In millions of CHF Net sales (CORE) Advertising income Turnover (CORE) Cost of sales (CORE) Gross profit (CORE) Concession expenses (CORE) Personnel expenses Other expenses (CORE) Other income (CORE) CORE EBITDA CORE EBIT Financial result (CORE) CORE Profit before tax Income tax (CORE) CORE Net profit Attributable to Non-controlling interests Equity holders of the parent Depreciation, amortization and impairment (CORE) Earnings per share attributable to equity holders of the parent CORE basic earnings / (loss) per share in CHF CORE diluted earnings / (loss) per share in CHF Avolta’s CORE profit or loss statement replaces the IFRS related lease expense lines with our concession fees as per the contracts and moves non-shop related leases back to other expenses. Also, we remove the FX impact on our lease obligations and the financing component of IFRS 16. In addition, all depreciation and amortization expenses related to previous acquisitions are removed to enable a better view of the performance of the current year. CORE EBITDA is used by Avolta’s lenders to calculate covenants under the bank financing agreements. 2023 12,328.8 205.8 12,534.6 (4,477.0) 8,057.6 (3,178.7) (2,539.3) (1,417.7) 207.7 1,129.6 (312.0) 817.6 (201.3) 616.3 (159.5) 456.8 148.9 307.9 2.26 2.21 2022 6,721.2 157.2 6,878.4 (2,684.6) 4,193.8 (2,029.9) (997.9) (620.7) 60.9 606.2 (135.6) 470.7 (175.6) 295.1 (105.5) 189.6 83.9 105.7 1.14 1.12 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 273/336 Profit or loss reconciliation IFRS/CORE 2023 In millions of CHF Net sales (IFRS) / (CORE) Advertising income Turnover (IFRS) / (CORE) Cost of sales (IFRS) / (CORE) Gross profit (IFRS) / (CORE) Leases expenses (IFRS) / Concession expenses (CORE) Personnel expenses Other expenses (IFRS) / (CORE)2, 3 Other income (IFRS) / (CORE) Operating profit bef D&A / CORE EBITDA Depreciation & impairment of PP&E Amortization & impairment of intangibles (IFRS) / (CORE)4 Depreciation & impairment right-of-use assets (IFRS) Operating profit / CORE EBIT Financial result (IFRS) / (CORE)5, 6 Profit before taxes / CORE EBT Income tax (IFRS) / (CORE)7 Net profit / CORE Net profit Attributable to Non-controlling interests Equity holders of the parent Earnings per share attributable to equity holders of the parent Basic Earnings / CORE Basic Earnings per share in CHF Diluted Earnings / CORE Diluted Earnings per share in CHF IFRS 12,583.7 205.8 12,789.5 (4,716.0) 8,073.5 (1,875.5) (2,539.3) (1,375.7) 191.9 2,474.9 (277.4) (242.8) (1,089.6) 865.1 (567.1) 298.0 (81.6) 216.4 129.1 87.3 0.64 0.63 Acquisition rel. adj. (unaudited) Lease adjustments (unaudited) Fuel sales adjustments (unaudited)1 – – – – – – – 18.8 – 18.8 – 208.3 – 227.1 15.7 242.8 (53.3) 189.5 10.9 178.6 – – – – – (1,303.2) – (60.8) (0.1) (1,364.1) (0.1) – 1,089.6 (274.6) 350.1 75.5 (24.6) 50.9 8.9 42.0 (254.9) – (254.9) 239.0 (15.9) – – – 15.9 – – – – – – – – – – – CORE (unaudited) 12,328.8 205.8 12,534.6 (4,477.0) 8,057.6 (3,178.7) (2,539.3) (1,417.7) 207.7 1,129.6 (277.5) (34.5) – 817.6 (201.3) 616.3 (159.5) 456.8 148.9 307.9 2.26 2.21 1 CHF 254.9 million net sales (CORE) and CHF 239.0 million cost of sales (CORE) differ from the IFRS amounts because they do not include fuel sales and fuel cost of sales. The net amount is classified as other income (CORE) in accordance with management's protocol for the analysis of Group figures. 2 Other expenses (CORE) exclude CHF 18.8 million financial related transaction cost directly linked to the closing of the combination with Autogrill. 3 CHF 58.3 million non-shop leases included in other expenses (CORE). 4 CHF 208.3 million amortization of acquisition related concession rights. 5 Financial result (CORE) exclude CHF 15.7 million in connection with a Bridge financing, directly linked to the closing of the combination with Autogrill. 6 CHF 350.1 million lease interest expenses and IFRS 16 related foreign exchange effect. 7 CHF 53.3 million deferred taxes on acquisition related concession rights and CHF 24.6 million deferred taxes related to IFRS 16. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 274/336 2022 In millions of CHF Net sales (IFRS) / (CORE) Advertising income Turnover (IFRS) / (CORE) Cost of sales (IFRS) / (CORE) Gross profit (IFRS) / (CORE) Leases expenses (IFRS) / Concession expenses (CORE) Personnel expenses Other expenses (IFRS) / (CORE)1 Other income (IFRS) / (CORE) Operating profit bef D&A / CORE EBITDA Depreciation & impairment of PP&E Amortization & impairment of intangibles (IFRS) / (CORE)2 Depreciation & impairment right-of-use assets (IFRS) Operating profit / CORE EBIT Financial result (IFRS) / (CORE)3 Profit before taxes / CORE EBT Income tax (IFRS) / (CORE)4 Net profit / CORE Net profit Attributable to Non-controlling interests Equity holders of the parent Earnings per share attributable to equity holders of the parent Basic Earnings / CORE Basic Earnings per share in CHF Diluted Earnings / CORE Diluted Earnings per share in CHF IFRS 6,721.2 157.2 6,878.4 (2,684.6) 4,193.8 (1,081.9) (997.9) (578.7) 61.8 1,597.1 (113.9) (195.6) (785.2) 502.4 (305.6) 196.8 (76.2) 120.6 62.4 58.2 0.63 0.62 Acquisition rel. adj. (unaudited) Lease adjustments (unaudited) – – – – – – – – – – – 173.9 – 173.9 – 173.9 (37.1) 136.8 22.0 114.8 – – – – – (948.0) – (42.0) (0.9) (990.9) – – 785.2 (205.7) 130.0 (75.7) 7.8 (67.9) (0.5) (67.3) CORE (unaudited) 6,721.2 157.2 6,878.4 (2,684.6) 4,193.8 (2,029.9) (997.9) (620.7) 60.9 606.2 (113.9) (21.7) – 470.7 (175.6) 295.1 (105.5) 189.6 83.9 105.7 1.14 1.12 1 CHF 42.0 million non-shop leases included in other expenses (CORE). 2 CHF 173.9 million amortization and impairment of acquisition related concession rights. 3 CHF 130.0 million lease interest expenses and IFRS 16 related foreign exchange effect. 4 CHF 37.1 million deferred taxes on acquisition related concession rights and CHF 7.8 million deferred taxes related to IFRS 16. Other non-cash items and changes in lease obligation CORE cash flow In millions of CHF CORE EBITDA Changes in net working capital Capital expenditures Cash flow related to minorities 1 Dividends from associates Income taxes paid Cash flow before financing Interest, net Other financing items Equity free cash flow Acquisition & financing activities, net 2 Transaction costs Foreign exchange adjustments and other Decrease / (Increase) in financial net debt – at the beginning of the period – at the end of the period 2023 1,129.6 80.7 (44.0) (432.7) (102.6) 1.9 (129.2) 503.7 (160.3) (20.4) 323.0 (268.4) (34.5) 94.5 114.6 2,810.7 2,696.1 2022 606.2 79.6 (4.6) (110.1) (65.0) 2.7 (76.1) 432.7 (134.1) 6.6 305.2 (20.3) – (16.1) 268.8 3,079.5 2,810.7 1 Includes CHF (133.9) million dividends paid to non-controlling interests and CHF 31.4 million contribution from non-controlling interests. 2 Acquisition & financing activities, net consist mainly of the acquisition of net debt from Autogrill, the cash portion of the MTO consideration and purchases of treasury shares. Cash flow before financing is calculated from CORE EBITDA, corrected by changes in net working capital and concession related non-cash items (such as prepayments). In addition, capital expenditure (Capex), cash flows to minorities and income taxes are deducted. Cash flow before financing provides an effective measure of Avolta’s cash flow generation from operations and investing activities. Equity free cash flow measures the relevant cash generation of the Company and pro- vides the basis for further capital allocation decisions. It therefore can be considered the single-most important KPI from a shareholder perspective, reflecting the amount of cash available for creating value to investors. 2022 In millions of CHF Net sales (IFRS) / (CORE) Advertising income Turnover (IFRS) / (CORE) Cost of sales (IFRS) / (CORE) Gross profit (IFRS) / (CORE) Leases expenses (IFRS) / Concession expenses (CORE) Personnel expenses Other expenses (IFRS) / (CORE)1 Other income (IFRS) / (CORE) Operating profit bef D&A / CORE EBITDA Depreciation & impairment of PP&E Amortization & impairment of intangibles (IFRS) / (CORE)2 Depreciation & impairment right-of-use assets (IFRS) Operating profit / CORE EBIT Financial result (IFRS) / (CORE)3 Profit before taxes / CORE EBT Income tax (IFRS) / (CORE)4 Net profit / CORE Net profit Attributable to Non-controlling interests Equity holders of the parent IFRS 6,721.2 157.2 6,878.4 (2,684.6) 4,193.8 (1,081.9) (997.9) (578.7) 61.8 1,597.1 (113.9) (195.6) (785.2) 502.4 (305.6) 196.8 (76.2) 120.6 62.4 58.2 0.63 0.62 Acquisition rel. adj. (unaudited) Lease adjustments (unaudited) – – – – – – – – – – – – – 173.9 173.9 173.9 (37.1) 136.8 22.0 114.8 – – – – – – – – (948.0) (42.0) (0.9) (990.9) 785.2 (205.7) 130.0 (75.7) 7.8 (67.9) (0.5) (67.3) CORE (unaudited) 6,721.2 157.2 6,878.4 (2,684.6) 4,193.8 (2,029.9) (997.9) (620.7) 60.9 606.2 (113.9) (21.7) – 470.7 (175.6) 295.1 (105.5) 189.6 83.9 105.7 1.14 1.12 Earnings per share attributable to equity holders of the parent Basic Earnings / CORE Basic Earnings per share in CHF Diluted Earnings / CORE Diluted Earnings per share in CHF 1 CHF 42.0 million non-shop leases included in other expenses (CORE). 2 CHF 173.9 million amortization and impairment of acquisition related concession rights. 3 CHF 130.0 million lease interest expenses and IFRS 16 related foreign exchange effect. 4 CHF 37.1 million deferred taxes on acquisition related concession rights and CHF 7.8 million deferred taxes related to IFRS 16. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 275/336 CORE cash flow In millions of CHF CORE EBITDA Other non-cash items and changes in lease obligation Changes in net working capital Capital expenditures Cash flow related to minorities 1 Dividends from associates Income taxes paid Cash flow before financing Interest, net Other financing items Equity free cash flow Acquisition & financing activities, net 2 Transaction costs Foreign exchange adjustments and other Decrease / (Increase) in financial net debt – at the beginning of the period – at the end of the period 2023 1,129.6 80.7 (44.0) (432.7) (102.6) 1.9 (129.2) 503.7 (160.3) (20.4) 323.0 (268.4) (34.5) 94.5 114.6 2,810.7 2,696.1 2022 606.2 79.6 (4.6) (110.1) (65.0) 2.7 (76.1) 432.7 (134.1) 6.6 305.2 (20.3) – (16.1) 268.8 3,079.5 2,810.7 1 Includes CHF (133.9) million dividends paid to non-controlling interests and CHF 31.4 million contribution from non-controlling interests. 2 Acquisition & financing activities, net consist mainly of the acquisition of net debt from Autogrill, the cash portion of the MTO consideration and purchases of treasury shares. Cash flow before financing is calculated from CORE EBITDA, corrected by changes in net working capital and concession related non-cash items (such as prepayments). In addition, capital expenditure (Capex), cash flows to minorities and income taxes are deducted. Cash flow before financing provides an effective measure of Avolta’s cash flow generation from operations and investing activities. Equity free cash flow measures the relevant cash generation of the Company and pro- vides the basis for further capital allocation decisions. It therefore can be considered the single-most important KPI from a shareholder perspective, reflecting the amount of cash available for creating value to investors. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 276/336 Cash flow reconciliation from operating activities (IFRS) to EFCF In millions of CHF Net cash flow from operating activities Reconciliation elements related to investing activities Purchase of property, plant and equipment Purchase of intangible assets Proceeds from lease income (Proceeds from) / Repayment of loans receivable granted Proceeds from sale of property, plant and equipment Proceeds from sale of financial assets Interest received Reconciliation elements related to financing activities Lease payments Interest paid Contribution from non-controlling interests Dividends paid to non-controlling interests Adjusted for acquisition related transaction costs Transaction costs Equity free cash flow Financial net debt In millions of CHF Borrowings (current and non-current) Financial derivatives liability - Borrowings Less financial derivatives assets - Borrowings Less cash and cash equivalents Financial net debt Avolta’s financial net debt is not considering IFRS 16 related lease obligations. Trade net working capital In millions of CHF Inventories Trade and credit card receivables Less trade payables Trade net working capital Working capital management related to all trade-related items, which is one of the main focus areas. For better transparency, Avolta provides details on its trade-related core net working capital including inventories, trade and credit card receivables and trade payables. 2023 2,359.4 (404.4) (36.6) 22.5 (36.1) 9.1 (0.8) 61.9 (1,361.7) (222.3) 31.4 (133.9) 34.5 323.0 2022 1,511.6 (97.4) (15.9) 4.0 4.1 3.2 2.6 30.8 (907.8) (164.9) 3.3 (68.3) – 305.2 31.12.2023 31.12.2022 3,340.0 80.0 (9.3) (714.6) 2,696.1 3,575.0 99.8 (9.4) (854.7) 2,810.7 31.12.2023 31.12.2022 1,062.0 41.3 (873.7) 229.6 928.4 62.3 (486.4) 504.3 Capital expenditure (Capex) In millions of CHF Purchase of property, plant and equipment Purchase of intangible assets Proceeds from sale of property, plant and equipment Capex 2023 (404.4) (36.6) 8.3 (432.7) 2022 (97.4) (15.9) 3.2 (110.1) Capex includes purchase of property, plant, equipment, intangible assets, other investing activities and proceeds from sale of property, plant, equipment on cash basis. Any purchase or proceeds related to financial assets are not included within the defini- tion as not considered core to Avolta’s business operations and as those activities might differ over time. The financial reports are available under: www.avoltaworld.com/en/download-center Page section “All categories” – select Financial Reports For the Investor Relations and Corporate Communications contacts as well as a sum- mary of anticipated key dates in 2024 please refer to pages 334/335 of this Annual Report. Cash flow reconciliation from operating activities (IFRS) to EFCF In millions of CHF Net cash flow from operating activities Reconciliation elements related to investing activities Purchase of property, plant and equipment Purchase of intangible assets Proceeds from lease income (Proceeds from) / Repayment of loans receivable granted Proceeds from sale of property, plant and equipment Proceeds from sale of financial assets Interest received Reconciliation elements related to financing activities Lease payments Interest paid Contribution from non-controlling interests Dividends paid to non-controlling interests Adjusted for acquisition related transaction costs Transaction costs Equity free cash flow Financial net debt In millions of CHF Borrowings (current and non-current) Financial derivatives liability - Borrowings Less financial derivatives assets - Borrowings Less cash and cash equivalents Financial net debt Trade net working capital In millions of CHF Inventories Trade and credit card receivables Less trade payables Trade net working capital Avolta’s financial net debt is not considering IFRS 16 related lease obligations. Working capital management related to all trade-related items, which is one of the main focus areas. For better transparency, Avolta provides details on its trade-related core net working capital including inventories, trade and credit card receivables and trade payables. 2023 2,359.4 (404.4) (36.6) 22.5 (36.1) 9.1 (0.8) 61.9 (1,361.7) (222.3) 31.4 (133.9) 34.5 323.0 3,340.0 80.0 (9.3) (714.6) 2,696.1 1,062.0 41.3 (873.7) 229.6 31.12.2023 31.12.2022 31.12.2023 31.12.2022 2022 1,511.6 (97.4) (15.9) 4.0 4.1 3.2 2.6 30.8 (907.8) (164.9) 3.3 (68.3) – 305.2 3,575.0 99.8 (9.4) (854.7) 2,810.7 928.4 62.3 (486.4) 504.3 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 277/336 Capital expenditure (Capex) In millions of CHF Purchase of property, plant and equipment Purchase of intangible assets Proceeds from sale of property, plant and equipment Capex 2023 (404.4) (36.6) 8.3 (432.7) 2022 (97.4) (15.9) 3.2 (110.1) Capex includes purchase of property, plant, equipment, intangible assets, other investing activities and proceeds from sale of property, plant, equipment on cash basis. Any purchase or proceeds related to financial assets are not included within the defini- tion as not considered core to Avolta’s business operations and as those activities might differ over time. The financial reports are available under: www.avoltaworld.com/en/download-center Page section “All categories” – select Financial Reports For the Investor Relations and Corporate Communications contacts as well as a sum- mary of anticipated key dates in 2024 please refer to pages 334/335 of this Annual Report. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 278/336 e c n a n r e v o e t a r o p r o C G e c n a n r e v o G e t a r o p r o C Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 280/336 Corporate Governance Introduction is prepared This Report in accordance with the Corporate Governance Directive (DCG) of SIX Exchange Regulation. All information within this Corporate Gover- nance Report and within the Remuneration Report (see page 311) refers to the Company Organization, Internal Regulations and Articles of Incorporation that were in effect as of December 31, 2023 (if not specifically mentioned otherwise). In fiscal year 2023, Avolta AG (formerly named Dufry AG) and Autogrill S.p.A. successfully completed their combi- nation into the new, integrated global travel experience player Avolta. On November 3, 2023, the Extraordinary General Meeting of Shareholders of Avolta AG approved the change of the corporate name Dufry AG into Avolta AG. The Articles of Incorporation are available on the Company website, www.avoltaworld.com, section Inves- tors – Corporate Governance – Articles of Incorporation: www.avoltaworld.com/en/investors/corporate- governance 1. Group structure and shareholders 1.1 Group structure For an overview of the management organizational chart and operational Group structure as at December 31, 2023, please refer to page 21 of this Annual Report. Listed company as of December 31, 2023 Company Avolta AG, Brunngässlein 12, 4052 Basel, Switzerland (hereinafter “Avolta AG” or the “Company”) Listing Registered shares: SIX Swiss Exchange Market capitalization based on shares issued CHF 5,048,479,423 as of December 31, 2023 Percentage of shares held by Avolta AG 1.45 % of Avolta AG share capital as of December 31, 2023 Security numbers Registered shares: ISIN-Code CH0023405456, Swiss Security-No. 2340545, Ticker Symbol AVOL Non-listed consolidated entities as of December 31, 2023 For a table of the operational non-listed consolidated en- tities please refer to page 266 in the section Financial Statements of this Annual Report*. * 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 material subsidiaries of Avolta Group, including all entities which contribute more than 0.3 % of turnover and/or 0.3 % of total assets. 1.2 Significant shareholders Further details regarding these shareholders and share- holder groups as well as additional information regarding Pursuant to the information provided to the Company the individual disclosure notices in 2023 are available on by its shareholders in compliance with the Financial the website of SIX Exchange Regulation at: Market Infrastructure Act during 2023, the following www.ser-ag.com/en/resources/notifications-market- shareholders disclosed significant positions as of participants/significant-shareholders.html#/ December 31, 2023 1. Shareholder Edizione S.p.A. 4 Advent International Corporation 5 Compagnie Financière Rupert 6 Alibaba Group Holding Limited 7 State of Qatar 8 BlackRock, Inc. 9 Through shares Long position through financial instruments 2 Short positions 3 Total of long positions 22.17 % 8.72 % 4.94 % 3.42 % 4.49 % 3.41 % – – – – 1.45 % 0.52 % - 0.02 % – – – – – 22.17 % 8.72 % 4.94 % 4.87 % 4.49% 3.93 % 1 The percentage of voting rights has to be read in context with the 6 Shares directly held by Richemont Luxury Group Ltd, St Helier / 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. 2 Financial instruments such as convertible bonds, conversion and share purchase rights, granted (written) share sale rights and other derivative holdings. 3 4 5 Financial instruments that provide for or permit cash settlement (i.e. contracts for difference). Shares directly held by Schema Beta S.p.A., Treviso / Italy. The beneficial holder of the shares is Edizione S.p.A., Treviso / Italy. Shares directly held by the legal entity AI Louvre (Luxembourg) S.à.r.l., Luxembourg / Grand Duchy of Luxembourg. The beneficial holder of the shares is Advent International Corporation, Boston, MA / USA. Jersey. The beneficial holder of the shares is Compagnie Financière Rupert, Geneva / Switzerland. 7 Shares and financial instruments directly held by the legal entity Taobao China Holding Limited, Hong Kong S.A.R. / China. The beneficial holder of the shares (and mandatory convertible bonds, which were con- verted on November 20, 2023) is Alibaba Group Holding Limited, Grand Cayman, Cayman Islands. 8 Shares directly held by Qatar Holding LLC, Doha / Qatar. The benefi- cial holder of the shares is the Qatar Investment Authority, Doha / Qatar, which was established and is controlled by the State of Qatar. 9 BlackRock, Inc., New York, NY / USA. Of the total share position of 3.41 %, 0.44 % relate to securities lending and similar transactions and 0.52 % to delegated voting rights. In addition, the Company disclosed a purchase position and a sale position (disclosure notice dated February 11, 1.3 Cross-shareholdings 2023) as further described here: Avolta AG has not entered into cross-shareholdings with www.ser-ag.com/en/resources/notifications-market- other companies in terms of capital shareholdings or participants/significant-shareholders.html#/ voting rights in excess of 5 %. Understandings among shareholders The Company is not aware of shareholder agreements or understandings to be published pursuant to Art. 120 et seq. FMIA. Corporate Governance Introduction This Report is prepared in accordance with the Corporate Governance Directive (DCG) of SIX Exchange Regulation. All information within this Corporate Gover- 1. Group structure and shareholders 1.1 Group structure nance Report and within the Remuneration Report (see For an overview of the management organizational chart page 311) refers to the Company Organization, Internal and operational Group structure as at December 31, Regulations and Articles of Incorporation that were in 2023, please refer to page 21 of this Annual Report. effect as of December 31, 2023 (if not specifically mentioned otherwise). Listed company as of December 31, 2023 In fiscal year 2023, Avolta AG (formerly named Dufry AG) and Autogrill S.p.A. successfully completed their combi- nation into the new, integrated global travel experience player Avolta. On November 3, 2023, the Extraordinary Listing Company Avolta AG, Brunngässlein 12, 4052 Basel, Switzerland (hereinafter “Avolta AG” or the “Company”) General Meeting of Shareholders of Avolta AG approved Registered shares: SIX Swiss Exchange the change of the corporate name Dufry AG into Avolta Market capitalization based on shares issued AG. The Articles of Incorporation are available on the Company website, www.avoltaworld.com, section Inves- tors – Corporate Governance – Articles of Incorporation: Security numbers www.avoltaworld.com/en/investors/corporate- governance CHF 5,048,479,423 as of December 31, 2023 Percentage of shares held by Avolta AG 1.45 % of Avolta AG share capital as of December 31, 2023 Registered shares: Ticker Symbol AVOL ISIN-Code CH0023405456, Swiss Security-No. 2340545, Non-listed consolidated entities as of December 31, 2023 For a table of the operational non-listed consolidated en- tities please refer to page 266 in the section Financial Statements of this Annual Report*. * 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 material subsidiaries of Avolta Group, including all entities which contribute more than 0.3 % of turnover and/or 0.3 % of total assets. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 281/336 1.2 Significant shareholders Pursuant to the information provided to the Company by its shareholders in compliance with the Financial Market Infrastructure Act during 2023, the following shareholders disclosed significant positions as of December 31, 2023 1. Further details regarding these shareholders and share- holder groups as well as additional information regarding the individual disclosure notices in 2023 are available on the website of SIX Exchange Regulation at: www.ser-ag.com/en/resources/notifications-market- participants/significant-shareholders.html#/ Shareholder Edizione S.p.A. 4 Advent International Corporation 5 Compagnie Financière Rupert 6 Alibaba Group Holding Limited 7 State of Qatar 8 BlackRock, Inc. 9 Through shares Long position through financial instruments 2 Short positions 3 Total of long positions 22.17 % 8.72 % 4.94 % 3.42 % 4.49 % 3.41 % – – – 1.45 % – 0.52 % – – – – – - 0.02 % 22.17 % 8.72 % 4.94 % 4.87 % 4.49% 3.93 % 1 2 3 4 5 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. Financial instruments such as convertible bonds, conversion and share purchase rights, granted (written) share sale rights and other derivative holdings. Financial instruments that provide for or permit cash settlement (i.e. contracts for difference). Shares directly held by Schema Beta S.p.A., Treviso / Italy. The beneficial holder of the shares is Edizione S.p.A., Treviso / Italy. Shares directly held by the legal entity AI Louvre (Luxembourg) S.à.r.l., Luxembourg / Grand Duchy of Luxembourg. The beneficial holder of the shares is Advent International Corporation, Boston, MA / USA. 6 Shares directly held by Richemont Luxury Group Ltd, St Helier / Jersey. The beneficial holder of the shares is Compagnie Financière Rupert, Geneva / Switzerland. 7 8 9 Shares and financial instruments directly held by the legal entity Taobao China Holding Limited, Hong Kong S.A.R. / China. The beneficial holder of the shares (and mandatory convertible bonds, which were con- verted on November 20, 2023) is Alibaba Group Holding Limited, Grand Cayman, Cayman Islands. Shares directly held by Qatar Holding LLC, Doha / Qatar. The benefi- cial holder of the shares is the Qatar Investment Authority, Doha / Qatar, which was established and is controlled by the State of Qatar. BlackRock, Inc., New York, NY / USA. Of the total share position of 3.41 %, 0.44 % relate to securities lending and similar transactions and 0.52 % to delegated voting rights. In addition, the Company disclosed a purchase position and a sale position (disclosure notice dated February 11, 2023) as further described here: www.ser-ag.com/en/resources/notifications-market- participants/significant-shareholders.html#/ Understandings among shareholders The Company is not aware of shareholder agreements or understandings to be published pursuant to Art. 120 et seq. FMIA. 1.3 Cross-shareholdings Avolta AG has not entered into cross-shareholdings with other companies in terms of capital shareholdings or voting rights in excess of 5 %. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 282/336 2. Capital structure 2.1 Share capital As of December 31, 2023, the Company’s capital struc- ture is as follows: Ordinary share capital issued CHF 763,071,255 (nominal value) divided in 152,614,251 fully paid registered shares with a nominal value of CHF 5 each*. * Including 2,092,113 shares with a nominal value of CHF 5 each (correspond- ing to a total nominal amount of CHF 10,460,565), which were issued out of the conditional capital on November 20, 2023 due to the conversion of man- datory convertible bonds. Conditional capital CHF 34,937,935 (nominal value) divided in 6,987,587 to be fully paid registered shares with a nominal value of CHF 5 each*; plus CHF 226,992,515 (nominal value) divided in 45,398,503 to be fully paid registered shares with a nominal value of CHF 5 each. * Taking into account the 2,092,113 shares with a nominal value of CHF 5 each (corresponding to a total nominal amount of CHF 10,460,565), which were is- sued out of the conditional capital on November 20, 2023, due to the conver- sion of mandatory convertible bonds. Capital Range Capital available for capital increases CHF 81,683,505 (nominal value) divided in 16,336,701 to be fully paid registered shares with a nominal value of CHF 5 each. Upper limit of capital band CHF 844,754,760 (nominal value), lower limit CHF 617,762,245 (nominal value)*. * Upper and lower limit reflect Articles of Incorporation as of January 10, 2024, taking into account the 2,092,113 shares with a nominal value of CHF 5 each (corresponding to a total nominal amount of CHF 10,460,565), which were issued out of the conditional capital on November 20, 2023, due to the conversion of mandatory convertible bonds, and the resulting change in the upper and lower limit of the capital range. 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 subsequent transfer of the shares shall be subject to the restric- tions set forth in Article 5 of these Articles of Incorpo- ration. 4. The Board of Directors may limit or withdraw the right of the shareholders to subscribe in priority to convert- ible debentures, debentures with option rights or similar financing instruments when they are issued, if: a) An issue by firm underwriting by one or several banks with subsequent offering to the public without prefer- ential subscription rights seems to be the most appro- priate 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 participa- tions or new investments of the Company or one of its group companies. 5. If advance subscription rights are denied by the Board may also occur informally or by lapse of time; this also Agreement”) and the acquisition of 193,730,675 of Directors, the following shall apply: a) Conversion rights may be exercised only for up to 15 years; and option rights only for up to 7 years from the date of the respective issuance. b) The respective financing instruments must be issued at the relevant market conditions. For the website link regarding the Articles of Incorpora- tion referred to in the following chapters please see page 309 of this Corporate Governance Report. The remaining conditional capital of CHF 34,937,935 under Article 3bis represents 4.58 % of the issued ordinary share capital of the Company as of December 31, 2023. 2.2 Details on conditional capital and capital range Conditional capital Article 3bis of the Articles of Incorporation reads as follows: 1. The share capital may be increased in an amount not to exceed CHF 34,937,935 by the issuance of up to 6,987,587 fully paid registered shares with a nominal value of CHF 5 each through the exercise of conver- sion and / or option rights granted in connection with the issuance of newly or already issued convertible debentures, debentures with option rights or other financing instruments by the Company or one of its group companies. 2. The preferential subscription rights of the share- holders shall be excluded in connection with the issu- ance of convertible debentures, debentures with Article 3quater of the Articles of Incorporation reads as follows: 1. Subject to Article 3quinquies of these Articles of Incorpo- ration, the share capital may be increased in an amount not to exceed CHF 226,992,515 by the issuance of up to 45,398,503 fully paid registered shares with a nominal value of CHF 5 each through the exercise of conversion and / or option rights granted in connection with the issuance of newly or already issued convert- ible debentures, debentures with option rights or other financing instruments by the Company or one of its group companies in connection with the refinancing of cash payments to be made within the framework of the transactions set forth under Article 3ter para. 4 lit. a of these Articles of Incorporation. 2. The preferential subscription rights of the shareholders shall be excluded in connection with the issuance of convertible debentures, debentures with option rights or other financing instruments. The then current owners of conversion and / or option rights shall be tion rights, and the beginning date for dividend entitle- entitled to subscribe for the new shares. ment. In this regard, the Board of Directors may issue 3. The acquisition of shares through the exercise of new shares by means of a firm underwriting through a conversion and / or option rights and each subsequent banking institution, a syndicate or another third party transfer of the shares shall be subject to the restric- and a subsequent offer of these shares to the current tions set forth in Article 5 of these Articles of Incorpo- shareholders. The Board of Directors may permit pref- erential subscription rights that have not been exer- ration. tion. 4. The Board of Directors may limit or withdraw the right cised to expire or it may place these rights and / or of the shareholders to subscribe in priority to convert- shares as to which preferential subscription rights have ible debentures, debentures with option rights or been granted but not exercised, at market conditions similar financing instruments in the cases mentioned in or use them for other purposes in the interest of the Article 3ter para. 4 lit. b of these Articles of Incorpora- Company. 4. The Board of Directors is further authorized to restrict 5. If advance subscription rights are denied by the Board or deny the preferential subscription rights of share- of Directors, the following shall apply: holders in whole or in part or allocate such rights to a) Conversion rights may be exercised only for up to 15 third parties in connection with the issuance of regis- years; and option rights only for up to 7 years from tered shares: the date of the respective issuance. a) To the remaining shareholders of Autogrill S.p.A. b) The respective financing instruments must be within the framework of the mandatory tender offer issued at the relevant market conditions. by the Company for all remaining outstanding 6. The declaration of acquisition of the shares based on shares of Autogrill S.p.A. following the consumma- this Article 3quater shall refer to this Article 3quater and be tion of the combination agreement by and among made in a form that allows proof by text. A waiver of the Company, Schema Beta S.p.A., and Edizione the right to acquire shares based on this Article 3quater S.p.A. dated as of July 11, 2022 (the “Combination this right. Capital range follows: applies to the waiver of the exercise and forfeiture of shares of Autogrill S.p.A. from Schema Beta S.p.A., a wholly-owned subsidiary of Edizione S.p.A., by the Company contemplated thereunder, one or several The conditional capital of CHF 226,992,515 under Article voluntary tender offers by the Company for all 3quater represents 29.75 % of the issued ordinary share remaining outstanding shares of Autogrill S.p.A. capital of the Company as of December 31, 2023. For and / or any subsequent re-opening of the tender potential maximum capital increases see the limitations period and / or proceeding for the fulfillment of the under Article 3quinquies mentioned below. obligation to purchase the remaining outstanding shares of Autogrill S.p.A. and / or proceeding for the exercise of the right to purchase the remaining with applicable law; and / or Article 3ter of the Articles of Incorporation reads as outstanding shares of Autogrill S.p.A. in accordance 1. Subject to Article 3quinquies of these Articles of Incorpo- b) In connection with the refinancing of cash payments ration, the Company has a capital range ranging from to be made within the framework of the transactions CHF 617,762,245 (lower limit) to CHF 844,754,760 set forth under paragraph a) above. (upper limit). The Board of Directors shall be authorized within the capital range to increase the share capital in The capital available for capital increases of an amount not to exceed CHF 81,683,505 through the CHF 81,683,505 under Article 3ter (capital range) repre- issuance of up to 16,336,701 fully paid registered sents 10.70 % of the issued ordinary share capital of the shares with a nominal value of CHF 5 per share by not Company as of December 31, 2023. For potential later than August 31, 2024. Increases in partial amounts maximum capital increases see the limitations under shall be permitted. Article 3quinquies mentioned below. 2. The subscription and acquisition of the new shares, as well as each subsequent transfer of the shares, shall be Potential maximum capital increases through Articles subject to the restrictions of Article 5 of these Articles 3quater and 3ter of the Articles of Incorporation of Incorporation. Article 3quinquies of the Articles of Incorporation reads as 3. The Board of Directors shall determine the issue price, follows: the type of contribution (including cash, contribution in Capital increases pursuant to Article 3ter and 3quater of kind and set-off), the date of issue of new shares, the these Articles of Incorporation may, in the aggregate, conditions for the exercise of the preferential subscrip- increase the share capital of the Company in an amount As of December 31, 2023, the Company’s capital struc- conversion and / or option rights and each subsequent 2. Capital structure 2.1 Share capital ture is as follows: Ordinary share capital issued CHF 763,071,255 (nominal value) divided in 152,614,251 fully paid registered shares with a nominal value of CHF 5 each*. * Including 2,092,113 shares with a nominal value of CHF 5 each (correspond- ing to a total nominal amount of CHF 10,460,565), which were issued out of the conditional capital on November 20, 2023 due to the conversion of man- datory convertible bonds. Conditional capital CHF 34,937,935 (nominal value) divided in 6,987,587 to be fully paid registered shares with a nominal value of CHF 5 each*; plus CHF 226,992,515 (nominal value) divided in 45,398,503 to be fully paid registered shares with a nominal value of CHF 5 each. * Taking into account the 2,092,113 shares with a nominal value of CHF 5 each (corresponding to a total nominal amount of CHF 10,460,565), which were is- sued out of the conditional capital on November 20, 2023, due to the conver- sion of mandatory convertible bonds. Capital Range Capital available for capital increases CHF 81,683,505 (nominal value) divided in 16,336,701 to be fully paid registered shares with a nominal value of CHF 5 each. Upper limit of capital band CHF 844,754,760 (nominal value), lower limit CHF 617,762,245 (nominal value)*. * Upper and lower limit reflect Articles of Incorporation as of January 10, 2024, taking into account the 2,092,113 shares with a nominal value of CHF 5 each (corresponding to a total nominal amount of CHF 10,460,565), which were issued out of the conditional capital on November 20, 2023, due to the conversion of mandatory convertible bonds, and the resulting change in the upper and lower limit of the capital range. 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 transfer of the shares shall be subject to the restric- tions set forth in Article 5 of these Articles of Incorpo- ration. 4. The Board of Directors may limit or withdraw the right of the shareholders to subscribe in priority to convert- ible debentures, debentures with option rights or similar financing instruments when they are issued, if: a) An issue by firm underwriting by one or several banks with subsequent offering to the public without prefer- ential subscription rights seems to be the most appro- priate 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 participa- tions 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 issued at the relevant market conditions. For the website link regarding the Articles of Incorpora- The remaining conditional capital of CHF 34,937,935 tion referred to in the following chapters please see page under Article 3bis represents 4.58 % of the issued ordinary 309 of this Corporate Governance Report. share capital of the Company as of December 31, 2023. 2.2 Details on conditional capital follows: and capital range Article 3quater of the Articles of Incorporation reads as 1. Subject to Article 3quinquies of these Articles of Incorpo- ration, the share capital may be increased in an amount not to exceed CHF 226,992,515 by the issuance of up nominal value of CHF 5 each through the exercise of Conditional capital follows: Article 3bis of the Articles of Incorporation reads as to 45,398,503 fully paid registered shares with a 1. The share capital may be increased in an amount not conversion and / or option rights granted in connection to exceed CHF 34,937,935 by the issuance of up to with the issuance of newly or already issued convert- 6,987,587 fully paid registered shares with a nominal ible debentures, debentures with option rights or other value of CHF 5 each through the exercise of conver- financing instruments by the Company or one of its sion and / or option rights granted in connection with group companies in connection with the refinancing of the issuance of newly or already issued convertible cash payments to be made within the framework of the debentures, debentures with option rights or other transactions set forth under Article 3ter para. 4 lit. a of financing instruments by the Company or one of its these Articles of Incorporation. group companies. 2. The preferential subscription rights of the shareholders 2. The preferential subscription rights of the share- shall be excluded in connection with the issuance of holders shall be excluded in connection with the issu- convertible debentures, debentures with option rights ance of convertible debentures, debentures with or other financing instruments. The then current Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 283/336 owners of conversion and / or option rights shall be entitled to subscribe for the new shares. 3. The acquisition of shares through the exercise of conversion and / or option rights and each subsequent transfer of the shares shall be subject to the restric- tions set forth in Article 5 of these Articles of Incorpo- ration. 4. The Board of Directors may limit or withdraw the right of the shareholders to subscribe in priority to convert- ible debentures, debentures with option rights or similar financing instruments in the cases mentioned in Article 3ter para. 4 lit. b of these Articles of Incorpora- tion. 5. If advance subscription rights are denied by the Board of Directors, the following shall apply: a) Conversion rights may be exercised only for up to 15 years; and option rights only for up to 7 years from the date of the respective issuance. b) The respective financing instruments must be issued at the relevant market conditions. 6. The declaration of acquisition of the shares based on this Article 3quater shall refer to this Article 3quater and be made in a form that allows proof by text. A waiver of the right to acquire shares based on this Article 3quater may also occur informally or by lapse of time; this also applies to the waiver of the exercise and forfeiture of this right. The conditional capital of CHF 226,992,515 under Article 3quater represents 29.75 % of the issued ordinary share capital of the Company as of December 31, 2023. For potential maximum capital increases see the limitations under Article 3quinquies mentioned below. Capital range Article 3ter of the Articles of Incorporation reads as follows: 1. Subject to Article 3quinquies of these Articles of Incorpo- ration, the Company has a capital range ranging from CHF 617,762,245 (lower limit) to CHF 844,754,760 (upper limit). The Board of Directors shall be authorized within the capital range to increase the share capital in an amount not to exceed CHF 81,683,505 through the issuance of up to 16,336,701 fully paid registered shares with a nominal value of CHF 5 per share by not later than August 31, 2024. Increases in partial amounts shall be permitted. 2. The subscription and acquisition of the new shares, as well as each subsequent transfer of the shares, shall be subject to the restrictions of Article 5 of these Articles of Incorporation. 3. The Board of Directors shall determine the issue price, the type of contribution (including cash, contribution in kind and set-off), the date of issue of new shares, the conditions for the exercise of the preferential subscrip- tion rights, and the beginning date for dividend entitle- ment. In this regard, the Board of Directors may issue new shares by means of a firm underwriting through a banking institution, a syndicate or another third party and a subsequent offer of these shares to the current shareholders. The Board of Directors may permit pref- erential subscription rights that have not been exer- cised to expire or it may place these rights and / or shares as to which preferential subscription rights have been granted but not exercised, at market conditions or use them for other purposes in the interest of the Company. 4. The Board of Directors is further authorized to restrict or deny the preferential subscription rights of share- holders in whole or in part or allocate such rights to third parties in connection with the issuance of regis- tered shares: a) To the remaining shareholders of Autogrill S.p.A. within the framework of the mandatory tender offer by the Company for all remaining outstanding shares of Autogrill S.p.A. following the consumma- tion of the combination agreement by and among the Company, Schema Beta S.p.A., and Edizione S.p.A. dated as of July 11, 2022 (the “Combination Agreement”) and the acquisition of 193,730,675 shares of Autogrill S.p.A. from Schema Beta S.p.A., a wholly-owned subsidiary of Edizione S.p.A., by the Company contemplated thereunder, one or several voluntary tender offers by the Company for all remaining outstanding shares of Autogrill S.p.A. and / or any subsequent re-opening of the tender period and / or proceeding for the fulfillment of the obligation to purchase the remaining outstanding shares of Autogrill S.p.A. and / or proceeding for the exercise of the right to purchase the remaining outstanding shares of Autogrill S.p.A. in accordance with applicable law; and / or b) In connection with the refinancing of cash payments to be made within the framework of the transactions set forth under paragraph a) above. for capital The capital available increases of CHF 81,683,505 under Article 3ter (capital range) repre- sents 10.70 % of the issued ordinary share capital of the Company as of December 31, 2023. For potential maximum capital increases see the limitations under Article 3quinquies mentioned below. Potential maximum capital increases through Articles 3quater and 3ter of the Articles of Incorporation Article 3quinquies of the Articles of Incorporation reads as follows: Capital increases pursuant to Article 3ter and 3quater of these Articles of Incorporation may, in the aggregate, increase the share capital of the Company in an amount Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 284/336 not to exceed CHF 226,992,515 through the issuance of up to 45,398,503 fully paid registered shares with a nominal value of CHF 5 each. By way of background: The potential capital increases under Articles 3quater, 3ter, and the limitations under 3quinquies were introduced in the Company’s Articles of Incorpora- tion to allow for the direct issuance of registered shares or shares through conversion and / or option rights in conjunction with the mandatory tender offer for the shares of Autogrill S.p.A. in connection with the Dufry- Autogrill combination, and a potential refinancing of the cash alternative payable under the offer. 2.3 Changes in capital of Avolta AG Ordinary share capital issued December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 Conditional capital December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 Available capital from capital range (for capital increases) December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 Authorized capital December 31, 2021 December 31, 2021 December 31, 2022 December 31, 2023 CHF 401,318,410 CHF 453,985,035 CHF 453,985,035 CHF 763,071,255 CHF 63,500,000 CHF 45,398,500 CHF 198,715,145 CHF 261,930,450 Not applicable Not applicable Not applicable CHF 81,683,505 None None CHF 226,992,515 Replaced by capital band Changes in capital in 2023 Avolta AG (formerly named Dufry AG) and Autogrill S.p.A. (“Autogrill”) combined their businesses in 2023. As part of the Dufry-Autogrill combination, Schema Beta S.p.A. (“Schema Beta”), a wholly owned subsidiary of Edizione S.p.A. (“Edizione”), transferred its stake of 50.3 % of the issued share capital of Autogrill to Avolta on February 3, 2023. As consideration, Avolta issued to Schema Beta mandatory convertible notes which converted into 30,663,329 newly issued Avolta shares on February 6, 2023. As a result, the ordinary share capital of the Company from CHF 453,985,035 to CHF 607,301,680 (121,460,336 shares) and the existing conditional capital under Article 3quater of the Articles of Incorporation (dated August 31, 2022) declined to zero. The change in the ordinary share capital and the conditional capital was registered in the commercial register on February 6, 2023. increased by CHF 153,316,645 The Company held its Annual General Meeting of Share- holders on May 8, 2023. The AGM resolved to replace the previously existing authorized capital by a capital range, which ranges from CHF 607,301,680 (lower limit) to CHF 834,294,195 (upper limit) and allowed for capital increases in the amount of CHF 226,992,515 (45,398,503 registered shares) until August 31, 2024. It further resolved to create additional conditional capital in an amount of CHF 226,992,515 (45,398,503 registered shares) and to introduce the new Articles 3quater and 3quin- quies into the Articles of Incorporation (for the wordings of these Articles please see section 2.2 “Details on condi- tional capital and capital range” above). On April 11, 2023, the Company published the offer and exemption documents in connection with the mandatory tender offer for the remaining Autogrill shares, offering 0.158 new Avolta shares for each Autogrill share. In compliance with Italian takeover law, the Company also offered a cash alternative equivalent to EUR 6.33 per Autogrill share in the mandatory tender offer. In conjunc- tion with the mandatory tender offer, the Company issued a total of 29,061,802 new Avolta shares out of the capital range during the period of May 24 until July 24, 2023. As a result, the ordinary share capital of the Company increased in that timespan from CHF 607,301,680 to CHF 752,610,690 (150,522,138 shares) and the capital available for capital increases within the capital range declined to CHF 81,683,505 (16,336,701 shares). The various changes in the ordinary share capital and the capital range were registered in the commercial register on May 24, June 7, July 6 and July 24, 2023, respectively. On November 20, 2023, Avolta issued 2,092,113 new shares out of the existing conditional capital under Article 3bis of the Articles of Incorporation in conjunction with the mandatory conversion of Mandatory Convertible Notes of CHF 69.5 million at a conversion price of CHF 33.22 per share. The ordinary share capital of the Company increased from CHF 752,610,690 to CHF 763,071,255 (152,614,251 shares) and the conditional capital under Article 3bis declined to CHF 34,937,935 (6,987,857 shares). The corresponding change in the ordinary share capital and the conditional capital was registered in the Articles of Incorporation and the commercial register on January 10, 2024. Changes in capital in 2022 The Company held an Extraordinary General Meeting of Shareholders (“EGM”) on August 31, 2022. The EGM resolved to create additional conditional capital in the amount of CHF 153,316,645 and to introduce a new Article 3quater to the Articles of Incorporation. The EGM further resolved to create authorized capital in the amount of CHF 226,992,515 and to amend Article 3ter of the Articles of Incorporation. The change in the condi- tional capital and the authorized capital was registered in 2.4 Shares the commercial register on September 5, 2022. As of December 31, 2023, the share capital of Avolta AG By way of background: These capital changes occurred with a nominal value of CHF 5 each. as part of the combination of Dufry with Autogrill, announced on July 11, 2022. For comments on the capital The Company has only one category of shares. The changes in conjunction with the Dufry / Autogrill combi- shares are issued in registered form. All shares are enti- nation, please see section “Changes in capital in 2023” tled to dividends if declared. Each share entitles its holder is divided into 152,614,251 fully paid in registered shares above. Changes in capital in 2021 to one vote (see also the voting rights limitation of 25.1 % mentioned below). The Company maintains a share register showing the name and address of the share- On March 24, 2021, the Company announced the holders or usufructuaries. Only persons registered as successful completion of an offering of CHF 500 million shareholders or usufructuaries of registered shares in the new convertible bonds with a coupon of 0.75 % and a share register shall be recognized as such by the conversion price of CHF 87.00, due 2026. At the same Company. time, the Company also announced the launch of a volun- tary incentive offer to the holders of the existing CHF 350 Article 10 of the Articles of Incorporation stipulate the million 1.0 % convertible bonds due 2023, by which the following voting rights limitation under para. 1 and 2: Company offered such holders an incentive payment for 1. Subject to paragraph 2 of Article 10, each share the exercise of their conversion rights within the accep- recorded as share with voting rights in the share tance period. register confers one vote on its registered holder. 2. Until June 30, 2029, no shareholder may exercise, On April 6, 2021, the Company successfully completed this directly or indirectly, voting rights with respect to own voluntary incentive offer regarding the CHF 350 million or represented shares in excess of 25.1 % of the share 1.0 % convertible bonds due 2023. The offer was accepted capital registered in the commercial register. Legal by holders of convertible bonds with an aggregate prin- entities and partnerships or other groups of persons cipal amount of CHF 347.6 million (99.3 %), who received or joint owners who are interrelated to one another 10,533,325 fully paid registered shares of the Company through capital ownership, voting rights, uniform (conversion was effected at a conversion price of management or are otherwise linked as well as CHF 33.00). The remaining 0.7 % of bonds were, upon individuals or legal entities and partnerships who act exercise of the issuer’s clean-up call, redeemed at par in in concert or otherwise act in a coordinated manner cash. The ordinary share capital of the Company increased shall be treated as one single person. through this bond conversion to CHF 453,985,035 (90,797,007 shares) and the conditional capital was Paragraphs 3 to 6 of Article 10 refer to the Independent reduced to CHF 10,833,375 (2,166,675 shares). The change Voting Rights Representative, the qualifying date for en- in the ordinary share capital and conditional capital was titlement to vote at the Meeting of Shareholders and registered in the commercial register on April 14, 2021. Nominee representation at the Meeting of Shareholders. At the Annual General Meeting of Shareholders on of Incorporation which are available on the Company May 18, 2021, shareholders approved the Board of Direc- website www.avoltaworld.com/en/investors/corporate- tors’ proposal to increase the remaining conditional governance – Articles of Incorporation. For the entire wording of Article 10 please see the Articles capital from CHF 10,833,375 (2,166,675 shares) to CHF 45,398,500 (9,079,700 shares) to allow physical Exceptions regarding the voting rights limitation settlement of the new CHF 500 million 0.75 % convertible granted in the year under review bonds due 2026. The change of the conditional capital The Company has not granted any exception during the was registered in the commercial register on May 19, year under review. 2021. not to exceed CHF 226,992,515 through the issuance of The Company held its Annual General Meeting of Share- up to 45,398,503 fully paid registered shares with a holders on May 8, 2023. The AGM resolved to replace the nominal value of CHF 5 each. previously existing authorized capital by a capital range, which ranges from CHF 607,301,680 (lower limit) to By way of background: The potential capital increases CHF 834,294,195 (upper limit) and allowed for capital under Articles 3quater, 3ter, and the limitations under 3quinquies increases in the amount of CHF 226,992,515 (45,398,503 were introduced in the Company’s Articles of Incorpora- registered shares) until August 31, 2024. It further tion to allow for the direct issuance of registered shares resolved to create additional conditional capital in an or shares through conversion and / or option rights in amount of CHF 226,992,515 (45,398,503 registered conjunction with the mandatory tender offer for the shares) and to introduce the new Articles 3quater and 3quin- shares of Autogrill S.p.A. in connection with the Dufry- quies into the Articles of Incorporation (for the wordings of Autogrill combination, and a potential refinancing of the these Articles please see section 2.2 “Details on condi- cash alternative payable under the offer. tional capital and capital range” above). 2.3 Changes in capital of Avolta AG Ordinary share capital issued Available capital from capital range (for capital increases) December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 Conditional capital December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 Authorized capital December 31, 2021 December 31, 2021 December 31, 2022 December 31, 2023 CHF 401,318,410 CHF 453,985,035 CHF 453,985,035 CHF 763,071,255 CHF 63,500,000 CHF 45,398,500 CHF 198,715,145 CHF 261,930,450 Not applicable Not applicable Not applicable CHF 81,683,505 None None CHF 226,992,515 Replaced by capital band On April 11, 2023, the Company published the offer and exemption documents in connection with the mandatory tender offer for the remaining Autogrill shares, offering 0.158 new Avolta shares for each Autogrill share. In compliance with Italian takeover law, the Company also offered a cash alternative equivalent to EUR 6.33 per Autogrill share in the mandatory tender offer. In conjunc- tion with the mandatory tender offer, the Company issued a total of 29,061,802 new Avolta shares out of the capital range during the period of May 24 until July 24, 2023. As a result, the ordinary share capital of the Company increased in that timespan from CHF 607,301,680 to CHF 752,610,690 (150,522,138 shares) and the capital available for capital increases within the capital range declined to CHF 81,683,505 (16,336,701 shares). The various changes in the ordinary share capital and the capital range were registered in the commercial register on May 24, June 7, July 6 and July 24, 2023, respectively. On November 20, 2023, Avolta issued 2,092,113 new shares out of the existing conditional capital under Article 3bis of the Articles of Incorporation in conjunction with the mandatory conversion of Mandatory Convertible Notes Changes in capital in 2023 Avolta AG (formerly named Dufry AG) and Autogrill S.p.A. of CHF 69.5 million at a conversion price of CHF 33.22 (“Autogrill”) combined their businesses in 2023. As part of per share. The ordinary share capital of the Company the Dufry-Autogrill combination, Schema Beta S.p.A. increased from CHF 752,610,690 to CHF 763,071,255 (“Schema Beta”), a wholly owned subsidiary of Edizione (152,614,251 shares) and the conditional capital under S.p.A. (“Edizione”), transferred its stake of 50.3 % of the Article 3bis declined to CHF 34,937,935 (6,987,857 issued share capital of Autogrill to Avolta on February 3, shares). The corresponding change in the ordinary share 2023. As consideration, Avolta issued to Schema Beta capital and the conditional capital was registered in the mandatory convertible notes which converted into Articles of Incorporation and the commercial register on 30,663,329 newly issued Avolta shares on February 6, January 10, 2024. 2023. As a result, the ordinary share capital of the Company increased by CHF 153,316,645 from Changes in capital in 2022 CHF 453,985,035 to CHF 607,301,680 (121,460,336 The Company held an Extraordinary General Meeting of shares) and the existing conditional capital under Article Shareholders (“EGM”) on August 31, 2022. The EGM 3quater of the Articles of Incorporation (dated August 31, resolved to create additional conditional capital in the 2022) declined to zero. The change in the ordinary share amount of CHF 153,316,645 and to introduce a new capital and the conditional capital was registered in the Article 3quater to the Articles of Incorporation. The EGM commercial register on February 6, 2023. further resolved to create authorized capital in the amount of CHF 226,992,515 and to amend Article 3ter of Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 285/336 the Articles of Incorporation. The change in the condi- tional capital and the authorized capital was registered in the commercial register on September 5, 2022. By way of background: These capital changes occurred as part of the combination of Dufry with Autogrill, announced on July 11, 2022. For comments on the capital changes in conjunction with the Dufry / Autogrill combi- nation, please see section “Changes in capital in 2023” above. Changes in capital in 2021 On March 24, 2021, the Company announced the successful completion of an offering of CHF 500 million new convertible bonds with a coupon of 0.75 % and a conversion price of CHF 87.00, due 2026. At the same time, the Company also announced the launch of a volun- tary incentive offer to the holders of the existing CHF 350 million 1.0 % convertible bonds due 2023, by which the Company offered such holders an incentive payment for the exercise of their conversion rights within the accep- tance period. On April 6, 2021, the Company successfully completed this voluntary incentive offer regarding the CHF 350 million 1.0 % convertible bonds due 2023. The offer was accepted by holders of convertible bonds with an aggregate prin- cipal amount of CHF 347.6 million (99.3 %), who received 10,533,325 fully paid registered shares of the Company (conversion was effected at a conversion price of CHF 33.00). The remaining 0.7 % of bonds were, upon exercise of the issuer’s clean-up call, redeemed at par in cash. The ordinary share capital of the Company increased through this bond conversion to CHF 453,985,035 (90,797,007 shares) and the conditional capital was reduced to CHF 10,833,375 (2,166,675 shares). The change in the ordinary share capital and conditional capital was registered in the commercial register on April 14, 2021. At the Annual General Meeting of Shareholders on May 18, 2021, shareholders approved the Board of Direc- tors’ proposal to increase the remaining conditional capital from CHF 10,833,375 (2,166,675 shares) to CHF 45,398,500 (9,079,700 shares) to allow physical settlement of the new CHF 500 million 0.75 % convertible bonds due 2026. The change of the conditional capital was registered in the commercial register on May 19, 2021. 2.4 Shares As of December 31, 2023, the share capital of Avolta AG is divided into 152,614,251 fully paid in registered shares with a nominal value of CHF 5 each. The Company has only one category of shares. The shares are issued in registered form. All shares are enti- tled to dividends if declared. Each share entitles its holder to one vote (see also the voting rights limitation of 25.1 % mentioned below). The Company maintains a share register showing the name and address of the share- holders or usufructuaries. Only persons registered as shareholders or usufructuaries of registered shares in the share register shall be recognized as such by the Company. Article 10 of the Articles of Incorporation stipulate the following voting rights limitation under para. 1 and 2: 1. Subject to paragraph 2 of Article 10, each share recorded as share with voting rights in the share register confers one vote on its registered holder. 2. Until June 30, 2029, no shareholder may exercise, directly or indirectly, voting rights with respect to own or represented shares in excess of 25.1 % of the share capital registered in the commercial register. Legal entities and partnerships or other groups of persons or joint owners who are interrelated to one another through capital ownership, voting rights, uniform management or are otherwise linked as well as individuals or legal entities and partnerships who act in concert or otherwise act in a coordinated manner shall be treated as one single person. Paragraphs 3 to 6 of Article 10 refer to the Independent Voting Rights Representative, the qualifying date for en- titlement to vote at the Meeting of Shareholders and Nominee representation at the Meeting of Shareholders. For the entire wording of Article 10 please see the Articles of Incorporation which are available on the Company website www.avoltaworld.com/en/investors/corporate- governance – Articles of Incorporation. Exceptions regarding the voting rights limitation granted in the year under review The Company has not granted any exception during the year under review. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 286/336 – 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 partnerships who act in concert to circumvent the regulations concerning the nominees (esp. as syndicates), shall be treated as one single nominee within the meaning of the above mentioned regulation. – The Board of Directors may cancel the registration, with retroactive effect if appropriate, if the registration was effected based on false information or in case of breach of the agreement between the nominee and the Board of Directors. – After consulting the party involved, the Company may delete entries in the share register if such entries occurred in consequence of false statements by the purchaser. The purchaser must be informed immediately of the deletion. – In particular cases, the Board of Directors may allow exemptions from the above mentioned regulations concerning nominees. – 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 exception with regards to limitation of transferability and nominee registrations during the year under review. Required quorums for a change of the limitations of transferability According to the Articles of Incorporation, a change of the limitations on the transfer of registered shares or the removal of such limitations requires a resolution of the General Meeting of Shareholders passed by at least two thirds of the votes represented and the majority of the nominal value of shares represented. 2.5 Participation certificates and profit sharing certificates The Company has not issued any non-voting equity securities, such as participation certificates (“Partizipa- tionsscheine”) or profit sharing certificates (“Genusss- cheine”). 2.6 Limitation on transferability and nominee registration of registered shares – The Company maintains a share register showing the name and address of the shareholders or usufruct- uaries. Any change of contact information must be reported to the share registrar. Notifications by the Company shall be deemed to have been validly made if sent to the shareholder’s or authorized delivery agent’s last registered contact information in the share register. – Only persons registered as shareholders or usufructuaries of registered shares in the share register shall be recognized as such by 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, that there is no agreement on the return of the relevant shares and that they bear the economic risk associated with the shares. – The Board of Directors may register nominees with the right to vote in the share register to the extent of up to 0.2 % of the registered share capital as set forth in the commercial register. Registered shares held by a nominee that exceed this limit may be registered in the share register with the right to vote if the nominee discloses the names, addresses and number of shares of the persons for whose account it holds 0.2 % or more of the registered share capital as set forth in the commercial register. Nominees within the meaning of this provision are persons who do not make the declarations above and with whom the Board of Directors has entered into a corresponding agreement. Nominees are only en titled 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 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 represented at the General Meeting of Shareholders. 2.7 Convertible bonds and options 3. Board of Directors Convertible bonds 3.1 Members of the Board of As of December 31, 2023, the Company had the following convertible bond outstanding: Directors Guaranteed Senior Convertible Bond Issuer Listing Size of issue Outstanding amount as of Dec 31, 2023 Principal amount Interest rate Dufry One B.V., Eindhoven / NL SIX Swiss Exchange CHF 500,000,000 CHF 500,000,000 CHF 200,000 per bond 0.75 % per annum, payable semi-annually (March 30 and September 30) Maturity March 30, 2026 Convertible into Registered shares of Avolta AG (5,747,126 shares) Conversion price Conversion period CHF 87.00 (subject to adjustments) May 25, 2021 up to and including Source of shares Conditional capital and / or issued and March 12, 2026 outstanding shares CH1105195684 1105195684 DUF21 ISIN-No. Swiss Security-No. Ticker symbol Potential dilution As of December 31, 2023, the Board of Directors comprised twelve Board members compared with nine members as of December 31, 2022. The members of the Board of Directors are elected individually and for a term of office extending until completion of the next Annual General Meeting of Share- holders. The Chairman of the Board of Directors and the members of the Remuneration Committee are directly elected by the General Meeting of Shareholders. The following table sets forth the name, position with Avolta, nationality and year of first election as a member of the Board of Directors for each respective member, followed by their Curricula Vitae with a short description of each member’s business experience, education and The underlying 5,747,126 registered shares to be potentially issued as a result of the conversion of the senior convertible bonds represent 3.77 % of the issued and listed registered shares as of December 31, 2023. activities. Options As of December 31, 2023, the Company had no the Avolta Group, is depicted in the Remuneration Report outstanding warrants or options to acquire shares issued on pages 330 / 331 of this Annual Report in accordance by or on behalf of the Company. Avolta has certain share- with Art. 734e CO. A comprehensive list of all mandates that are comparable to board of directors or executive committee mandates at entities that have an economic purpose, other than within based payments, the essentials of which are disclosed in the “Remuneration Report” on page 311 ff. Board of Directors as of December 31, 2023 Name Position with Avolta Juan Carlos Torres Carretero Executive Chairman Alessandro Benetton Honorary Chairman and Independent Director Vice-Chairman and Independent Director Vice-Chairman and Independent Director Sami Kahale Enrico Laghi Heekyung Jo Min Xavier Bouton Mary J. Steele Guilfoile Luis Maroto Camino Ranjan Sen Lynda Tyler-Cagni Eugenia M. Ulasewicz Lead Independent Director Independent Director Independent Director Independent Director Independent Director Independent Director Independent Director Joaquín Moya-Angeler Cabrera Independent Director Nationality Spanish Italian Italian Italian American French American Spanish Spanish German British and Italian American Date of first Election 2003 2022 2023 2022 2016 2022 2020 2019 2021 2020 2018 2021 2.5 Participation certificates and profit sharing certificates – Corporate bodies and partnerships or other groups of persons or joint owners who are interrelated to one another through capital ownership, voting rights, The Company has not issued any non-voting equity uniform management or otherwise linked as well as securities, such as participation certificates (“Partizipa- individuals or corporate bodies and partnerships who tionsscheine”) or profit sharing certificates (“Genusss- act in concert to circumvent the regulations cheine”). 2.6 Limitation on transferability and nominee registration of registered shares 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 registration was effected based on false information or in case of breach of the agreement between the – The Company maintains a share register showing the nominee and the Board of Directors. name and address of the shareholders or usufruct- – After consulting the party involved, the Company uaries. Any change of contact information must be may delete entries in the share register if such entries reported to the share registrar. Notifications by the occurred in consequence of false statements by the Company shall be deemed to have been validly made purchaser. The purchaser must be informed if sent to the shareholder’s or authorized delivery immediately of the deletion. agent’s last registered contact information in the – In particular cases, the Board of Directors may allow share register. exemptions from the above mentioned regulations – Only persons registered as shareholders or concerning nominees. usufructuaries of registered shares in the share – The limitations for registration in the share register register shall be recognized as such by the Company. described above also apply for shares acquired or – Acquirers of registered shares shall be registered as subscribed by the exercise of subscription, option or shareholders with the right to vote, provided that conversion rights. they expressly declare that they acquired the shares in their own name and for their own account, that Exceptions granted in the year under review there is no agreement on the return of the relevant The Company has not granted any exception with regards shares and that they bear the economic risk to limitation of transferability and nominee registrations associated with the shares. during the year under review. – The Board of Directors may register nominees with the right to vote in the share register to the extent of Required quorums for a change of the limitations of up to 0.2 % of the registered share capital as set forth transferability in the commercial register. Registered shares held by According to the Articles of Incorporation, a change of a nominee that exceed this limit may be registered in the limitations on the transfer of registered shares or the the share register with the right to vote if the nominee removal of such limitations requires a resolution of the discloses the names, addresses and number of General Meeting of Shareholders passed by at least two shares of the persons for whose account it holds thirds of the votes represented and the majority of the 0.2 % or more of the registered share capital as set nominal value of shares represented. forth in the commercial register. Nominees within the meaning of this provision are persons who do not make the declarations above and with whom the Board of Directors has entered into a corresponding agreement. Nominees are only en titled 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 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 represented at the General Meeting of Shareholders. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 287/336 2.7 Convertible bonds and options 3. Board of Directors Convertible bonds As of December 31, 2023, the Company had the following convertible bond outstanding: 3.1 Members of the Board of Directors Guaranteed Senior Convertible Bond Issuer Listing Size of issue Outstanding amount as of Dec 31, 2023 Principal amount Interest rate 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 SIX Swiss Exchange CHF 500,000,000 CHF 500,000,000 CHF 200,000 per bond 0.75 % per annum, payable semi-annually (March 30 and September 30) March 30, 2026 Registered shares of Avolta AG (5,747,126 shares) CHF 87.00 (subject to adjustments) May 25, 2021 up to and including March 12, 2026 Conditional capital and / or issued and outstanding shares CH1105195684 1105195684 DUF21 The underlying 5,747,126 registered shares to be potentially issued as a result of the conversion of the senior convertible bonds represent 3.77 % of the issued and listed registered shares as of December 31, 2023. Options As of December 31, 2023, the Company had no outstanding warrants or options to acquire shares issued by or on behalf of the Company. Avolta has certain share- based payments, the essentials of which are disclosed in the “Remuneration Report” on page 311 ff. As of December 31, 2023, the Board of Directors comprised twelve Board members compared with nine members as of December 31, 2022. The members of the Board of Directors are elected individually and for a term of office extending until completion of the next Annual General Meeting of Share- holders. The Chairman of the Board of Directors and the members of the Remuneration Committee are directly elected by the General Meeting of Shareholders. The following table sets forth the name, position with Avolta, nationality and year of first election as a member of the Board of Directors for each respective member, followed by their Curricula Vitae with a short description of each member’s business experience, education and activities. A comprehensive list of all mandates that are comparable to board of directors or executive committee mandates at entities that have an economic purpose, other than within the Avolta Group, is depicted in the Remuneration Report on pages 330 / 331 of this Annual Report in accordance with Art. 734e CO. Board of Directors as of December 31, 2023 Name Position with Avolta Juan Carlos Torres Carretero Executive Chairman Alessandro Benetton Honorary Chairman and Independent Director Sami Kahale Enrico Laghi Heekyung Jo Min Xavier Bouton Mary J. Steele Guilfoile Luis Maroto Camino Vice-Chairman and Independent Director Vice-Chairman and Independent Director Lead Independent Director Independent Director Independent Director Independent Director Joaquín Moya-Angeler Cabrera Independent Director Ranjan Sen Lynda Tyler-Cagni Eugenia M. Ulasewicz Independent Director Independent Director Independent Director Nationality Spanish Italian Italian Italian American French American Spanish Spanish German British and Italian American Date of first Election 2003 2022 2023 2022 2016 2022 2020 2019 2021 2020 2018 2021 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 288/336 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 Partner in charge of Advent International Corporation’s investment activities in Latin America. Current Board Mandates Listed companies: Avolta AG Not listed companies or organizations: None Alessandro Benetton Honorary Chairman, Independent Director, Non-Executive, born 1964, Italian Education BBA from Boston University, MBA from Harvard Business School. Professional Background Alessandro Benetton has been Chairman, CEO and founder of 21 Invest S.p.A. since 1992. He served as member of the Board of Directors of Autogrill S.p.A. (1997 – 2023), as President of the Cortina 2021 Foundation to organize the Alpine Ski World Championships (2017 – 2021), as Chairman of the Benetton Group (2012 – 2013), as Board member of Robert Bosch International Holdings AG (2002 – 2018) and as Chairman of the Benetton Formula 1 Racing Team (1988 – 1998). Since 2022, Chairman of Edizione S.p.A. and Vice Chairman of Mundys S.p.A. (formerly Atlantia S.p.A.) (since 2023). Current Board Mandates Listed companies: Avolta AG Not listed companies or organizations: Edizione S.p.A., 21 Invest S.p.A., 21 Invest SGR S.p.A., 21 Invest France SAS, Mundys S.p.A. (formerly Atlantia S.p.A.), Fremantle Italy (Advisory Committee), University of Naples Parthenope, Fondazione Imago Mundi Sami Kahale Vice-Chairman, Independent Director, Non-Executive, born 1961, Italian Enrico Laghi Vice-Chairman, Independent Director, Non-Executive, born 1969, Italian Education BASc Degree in Electrical and Electronics Engineering from the University of Notre Dame (Indiana), MBA from Babson College (Massachusetts). Professional Background Sami Kahale held various Senior Leadership positions at Procter & Gamble from 1998 to 2017, including Vice President Health & Beauty Care, Central Eastern Europe/Middle East, Africa (2003 - 2007), Vice President Italy (2007 - 2014), Vice President Southern Europe region (2014 - 2017). General Manager and CEO of Esselunga S.p.A. (2018 - 2021). Chairman of the Board of Directors of IRCA S.p.A. since 2022 and Vice- Chairman of the Board of Directors of Marymount International School since 2013. Since 2023, Operating Partner at Advent International. Current Board Mandates Listed companies: Avolta AG Not listed companies or organizations: IRCA S.p.A., Bolton Group, Bauli Group (Innovation Advisory Board), Marymount International School Education Degree in Business Administration from the La Sapienza University of Rome, Professor of Accounting & Finance at the La Sapienza University of Rome. Professional Background Enrico Laghi has been serving as member of the Board of Directors and the Board of Statutory Auditors of a number of listed Italian entities including Acea S.p.A. (2013 – 2019), Pirelli & C. S.p.A. (2006 – 2014), Gruppo Editoriale L’Espresso S.p.A. (2012 – 2013), Unicredit S.p.A. (2013 – 2017) and Beni Stabili (2010 – 2018). Commissioner of Alitalia. Chairman of Edizione S.p.A. (2020 – 2022). Since 2022, Chief Executive Officer of Edizione S.p.A. Current Board Mandates Listed companies: Avolta AG Not listed companies or organizations: Edizione S.p.A., Mundys S.p.A. (formerly Atlantia S.p.A.), Abertis Infraestructuras SA, Studio Laghi Srl, Edizione Property S.p.A. Heekyung Jo Min Xavier Bouton Lead Independent Director, Independent Director, Non-Executive, born 1958, American Non-Executive, born 1950, French Mary J. Steele Guilfoile Independent Director, Non-Executive, born 1954, American Luis Maroto Camino Independent Director, Non-Executive, born 1964, Spanish 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 Investments and Securities Co. in Korea. 2006 Country Advisor, Global Resolutions in Korea. 2007 – 2010 Director General of the Investment Promotion Bureau at the Incheon Free Economic Zone (IFEZ) in Korea. 2011 – 2013 Chief HR Officer of CJ Corporation in Korea. Since 2013, Executive Vice President and Head of Corporate Social Responsibility of CJ CheilJedang. Ms. Min speaks regularly on the subject of sustainability and ESG (Environment, Social, Governance). Education Education Education Diploma in economics and Bachelor of Science from Bachelor’s degree in Law from finance from l’Institut d’Etudes Boston College Carroll School the Universidad Complutense Politiques de Bordeaux and Doctorate in Economics and of Management, MBA from Columbia Business School, Business Administration from the Licensed, Certified Public University of Bordeaux. Accountant. Professional Background Professional Background 1978 – 1984 Director of C.N.I.L. 1996 – 2000 Partner, CFO and Madrid, MBA from the Instituto de Estudios Superiores de la Empresa, Madrid (IESE), further qualifications from Stanford, Harvard Business School, INSEAD and IMD. (Commission Nationale de COO of The Beacon Group, Professional Background l’Informatique et des Libertés). LLC, a private equity, strategic 2000 Joined Amadeus IT Group, 1985 – 1994 General Secretary of advisory and wealth a leading player in the travel Reader’s Digest Foundation. management partnership. and tourism industry, where he 1990 – 2005 Board member of 2000 – 2002 Several served as Deputy CEO, CFO Laboratoires Chemineau. management positions such as and Director Marketing Finance. 1999 – 2021 Board member of ADL Executive Vice President and Prior to joining Amadeus, he Partners. 2005 – 2017 Board Corporate Treasurer at held several managerial member of Dufry AG. Since 1999 JPMorgan Chase & Co. and positions at the Bertelsmann Chairman of the Supervisory Chief Administrative Officer of Group. Since 2011, CEO and Board of F.S.D.V. (Fayenceries de its investment bank. Served President of Amadeus IT Group. Sarreguemines Digoin & Vitry la previously on the Board of Directors of Viasys Healthcare Current Board Mandates Inc. (2001 – 2005), Valley National Listed companies: Bancorp (2003 –2018), Boston Avolta AG and Amadeus IT College (1991 – 2011) and Hudson Group François), and since 2021 Chairman of the Board of Directors of Edeis. Current Board Mandates Listed companies: Avolta AG, F.S.D.V. (Fayenceries de Sarreguemines Digoin & Vitry la Not listed companies or organizations: None Current Board Mandates François) Listed companies: Avolta AG Not listed companies or organizations: Edeis Not listed companies or organizations: Asia New Zealand Foundation (Honorary Advisor) and CJ Welfare Foundation Ltd. (2018 – 2020). Serves as a member of the Boards of Directors of C.H. Robinson Worldwide, Inc. (since 2012), The Interpublic Group of Companies, Inc. (since 2007) and Pitney Bowes, Inc. (since 2018). Since 2002 serves as Chairwoman of MG Advisors, Inc. and has been a Partner of The Beacon Group, LP since 1998. Current Board Mandates Listed companies: Avolta AG, C.H. Robinson Worldwide, Inc., The Interpublic Group of Companies, Inc. and Pitney Bowes, Inc. Not listed companies or organizations: MG Advisors, Inc., Boston College (Trustee Associate), The Beacon Group, LP 3.2 Education, professional background, other activities and functions Juan Carlos Torres Carretero Executive Chairman, born 1949, Spanish Alessandro Benetton Honorary Chairman, Independent Director, Non-Executive, born 1964, Sami Kahale Vice-Chairman, Non-Executive, born 1961, Italian Enrico Laghi Vice-Chairman, Non-Executive, born 1969, Italian Independent Director, Independent Director, 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 Partner in charge of Advent International Corporation’s investment activities in Latin America. Current Board Mandates Listed companies: Avolta AG Not listed companies or organizations: None Italian Education School. BBA from Boston University, MBA from Harvard Business BASc Degree in Electrical and Degree in Business Electronics Engineering from Administration from the Education Education Professional Background Alessandro Benetton has been the University of Notre Dame (Indiana), MBA from Babson College (Massachusetts). La Sapienza University of Rome, Professor of Accounting & Finance at the La Sapienza University of Rome. Chairman, CEO and founder of Professional Background 21 Invest S.p.A. since 1992. He Sami Kahale held various Senior Professional Background served as member of the Board Leadership positions at Procter Enrico Laghi has been serving of Directors of Autogrill S.p.A. & Gamble from 1998 to 2017, as member of the Board of (1997 – 2023), as President of the including Vice President Health Directors and the Board of Cortina 2021 Foundation to & Beauty Care, Central Eastern Statutory Auditors of a number organize the Alpine Ski World Europe/Middle East, Africa of listed Italian entities including Championships (2017 – 2021), as (2003 - 2007), Vice President Acea S.p.A. (2013 – 2019), Chairman of the Benetton Italy (2007 - 2014), Vice Pirelli & C. S.p.A. (2006 – 2014), Group (2012 – 2013), as Board President Southern Europe Gruppo Editoriale L’Espresso member of Robert Bosch region (2014 - 2017). General S.p.A. (2012 – 2013), Unicredit International Holdings AG (2002 Manager and CEO of Esselunga S.p.A. (2013 – 2017) and Beni – 2018) and as Chairman of the S.p.A. (2018 - 2021). Chairman of Stabili (2010 – 2018). Benetton Formula 1 Racing the Board of Directors of IRCA Commissioner of Alitalia. Team (1988 – 1998). Since 2022, S.p.A. since 2022 and Vice- Chairman of Edizione S.p.A. Chairman of Edizione S.p.A. and Chairman of the Board of (2020 – 2022). Since 2022, Chief Vice Chairman of Mundys S.p.A. Directors of Marymount Executive Officer of Edizione (formerly Atlantia S.p.A.) (since International School since 2013. S.p.A. 2023). Current Board Mandates Listed companies: Avolta AG Not listed companies or organizations: Edizione S.p.A., 21 Invest S.p.A., 21 Invest SGR S.p.A., 21 Invest France SAS, Mundys S.p.A. (formerly Atlantia S.p.A.), Fremantle Italy (Advisory Committee), University of Naples Parthenope, Fondazione Imago Mundi Since 2023, Operating Partner at Advent International. Current Board Mandates Listed companies: Current Board Mandates Avolta AG Listed companies: Avolta AG Not listed companies or organizations: Not listed companies or organizations: Edizione S.p.A., Mundys S.p.A. (formerly Atlantia S.p.A.), IRCA S.p.A., Bolton Group, Bauli Abertis Infraestructuras SA, Group (Innovation Advisory Studio Laghi Srl, Edizione Board), Marymount International Property S.p.A. School Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 289/336 Heekyung Jo Min Lead Independent Director, Non-Executive, born 1958, American Xavier Bouton Independent Director, Non-Executive, born 1950, French Mary J. Steele Guilfoile Independent Director, Non-Executive, born 1954, American Luis Maroto Camino Independent Director, Non-Executive, born 1964, Spanish 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 managerial positions at the Bertelsmann Group. Since 2011, CEO and President of Amadeus IT Group. Current Board Mandates Listed companies: Avolta AG and Amadeus IT Group Not listed companies or organizations: None 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 Investments and Securities Co. in Korea. 2006 Country Advisor, Global Resolutions in Korea. 2007 – 2010 Director General of the Investment Promotion Bureau at the Incheon Free Economic Zone (IFEZ) in Korea. 2011 – 2013 Chief HR Officer of CJ Corporation in Korea. Since 2013, Executive Vice President and Head of Corporate Social Responsibility of CJ CheilJedang. Ms. Min speaks regularly on the subject of sustainability and ESG (Environment, Social, Governance). Current Board Mandates Listed companies: Avolta AG Not listed companies or organizations: Asia New Zealand Foundation (Honorary Advisor) and CJ Welfare Foundation Education Diploma in economics and finance from l’Institut d’Etudes Politiques de Bordeaux and Doctorate in Economics and Business Administration from the University of Bordeaux. Education Bachelor of Science from Boston College Carroll School of Management, MBA from Columbia Business School, Licensed, Certified Public Accountant. Professional Background 1978 – 1984 Director of C.N.I.L. (Commission Nationale de l’Informatique et des Libertés). 1985 – 1994 General Secretary of Reader’s Digest Foundation. 1990 – 2005 Board member of Laboratoires Chemineau. 1999 – 2021 Board member of ADL Partners. 2005 – 2017 Board member of Dufry AG. Since 1999 Chairman of the Supervisory Board of F.S.D.V. (Fayenceries de Sarreguemines Digoin & Vitry la François), and since 2021 Chairman of the Board of Directors of Edeis. Current Board Mandates Listed companies: Avolta AG, F.S.D.V. (Fayenceries de Sarreguemines Digoin & Vitry la François) Not listed companies or organizations: Edeis Professional Background 1996 – 2000 Partner, CFO and COO of The Beacon Group, LLC, a private equity, strategic advisory and wealth management partnership. 2000 – 2002 Several management positions such as Executive Vice President and Corporate Treasurer at JPMorgan Chase & Co. and Chief Administrative Officer of its investment bank. Served previously on the Board of Directors of Viasys Healthcare Inc. (2001 – 2005), Valley National Bancorp (2003 –2018), Boston College (1991 – 2011) and Hudson Ltd. (2018 – 2020). Serves as a member of the Boards of Directors of C.H. Robinson Worldwide, Inc. (since 2012), The Interpublic Group of Companies, Inc. (since 2007) and Pitney Bowes, Inc. (since 2018). Since 2002 serves as Chairwoman of MG Advisors, Inc. and has been a Partner of The Beacon Group, LP since 1998. Current Board Mandates Listed companies: Avolta AG, C.H. Robinson Worldwide, Inc., The Interpublic Group of Companies, Inc. and Pitney Bowes, Inc. Not listed companies or organizations: MG Advisors, Inc., Boston College (Trustee Associate), The Beacon Group, LP Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 290/336 Ranjan Sen Independent Director, Non-Executive, born 1969, German Lynda Tyler-Cagni Independent Director, Non-Executive, born 1956, British and Italian Eugenia M. Ulasewicz Independent Director, Non-Executive, born 1953, American Education Degree in Business Administration from Richmond University in London. Education B.A. (Hons) in Languages, Economics & Politics from the University of Kingston, 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 Investment Advisory Committee and Head of the German office in Frankfurt of Advent International. Current Board Mandates Listed companies: Avolta AG and InPost Poland Not listed companies or organizations: Hermes Germany GmbH Professional Background Lynda Tyler-Cagni held various global executive positions with Fast Retailing, Uniqlo and Zegna. She is the founder and CEO at Only the Best, an agency advising and representing talent primarily in fashion, luxury and retail. She also served as a Director of Atlantia S.p.A., an Italian listed global infrastructure operator from 2016 until 2018. Ms. Tyler-Cagni previously served on the Board of World Duty Free Group as a non- executive and independent member and chair of the HR & Remuneration Committee (from 2013 until the acquisition of World Duty Free Group by Dufry AG in 2015). Current Board Mandates Listed companies: Avolta AG Education Bachelor’s degree from the University of Massachusetts, Amherst, Doctor of Law, College of Mount Saint Vincent, NY. Professional Background Eugenia Ulasewicz had a successful career serving in many roles as a global retail industry executive, most recently as President, Burberry Americas until 2013. She serves on the Board of Directors of Signet Jewelers (since 2014), is Chair of the Corporate Citizenship & Sustainability Committee and a member of the Compensation Committee, Vince Holding Corp (since 2014), is Chair of the Compensation Committee and a member of Audit Committee, and ASOS Plc (2020 - 2023) where she was Chair of the ESG Committee and a member of Audit and Remuneration Committees. She served on the Board of Directors of Hudson, Ltd (2018 - 2020) and Bunzl plc (2011 - 2020). Not listed companies or organizations: EDHEC Paris (Business Management Advisory Board) Current Board Mandates Listed companies: Avolta AG, Signet Jewelers Ltd. and Vince Holding Corporation Not listed companies or organizations: None Joaquín Moya-Angeler Cabrera Independent Director, Non-Executive, born 1949, Spanish Education Master’s degree in Mathematics from the University of Madrid, Diploma in Economics and Forecasting from the London School of Economics and Political Science and an MS in Management from MIT’s Sloan School of Management. Professional Background J. Moya-Angeler has focused his career on the technology and real estate industries, including having founded a number of companies. He has been the Chairman of the Board of Directors of various companies: IBM Spain (1990 – 1994), Leche Pascual (1994 – 1997), Meta4 (1997 – 2002), TIASA (1996 – 1998), and Hildebrando (2003 – 2014). Served previously on the Board of Directors of Dufry AG (2005 – 2018), Hudson Ltd. (2018 – 2021) and as Chairman of the Board of Directors of La Quinta Real Estate (1994 – 2023). To date Chairman of the Board of Directors of Corporación Empresarial Pascual (since 1994), Chairman of the Board of Directors of Avalon Private Equity (since 1999). Serves on the advisory boards of private equity firms Palamon Capital Partners and MCH Private Equity. Current Board Mandates Listed companies: Avolta AG Not listed companies or organizations: Corporación Empresarial Pascual, Avalon Private Equity, Palamon Capital Partners (Board of Advisors), MCH Private Equity (Board of Advisors) Changes in the Board of Directors in fiscal year 2023 Alessandro Benetton and Enrico Laghi were elected at the Extraordinary General Meeting of Shareholders on August 31, 2022. Their election became effective after the completion of the transfer of the 50.3 % stake in Autogrill from Edizione to the Company on February 3, 2023. Sami Kahale was newly elected to the Board of Directors at the Annual General Meeting of Shareholders on May 8, 2023. Diversity of the Board of Directors as of December 31, 2023 8 % British / Italian 8 % German 25 % Spanish Chairman. In his executive role, a substantial amount of his 25 % Italian 25 % American Diversity and independence As of December 31, 2023, the Board of Directors has 67 % male and 33 % female members, including the Lead Inde- 8 % French pendent Director. 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 Executive time is devoted to the Company’s operations where he works very closely with the CEO to pursue value-enhancing initiatives including strategically important relationships, joint ventures or acquisitions, and relationships with key current or future shareholders, and initiatives strengthening the Company’s partnerships with governments and key landlords. He also supports re-financing activities and capital markets transactions of the Company. The other members of the Board of Directors (92 % of the Board as of December 31, 2023) are non-executive members and are also considered independent. 67 % Male Over the past years, the Board of Directors has been consistently renewed. As of December 31, 2023, nine out of the twelve Board members have a tenure of 5 years or less. None of the members of the Board of Directors (members as of December 31, 2023) have ever been in a managerial position at Avolta AG or any of its subsidiaries. For informa- tion on related parties and related party transactions please refer to Note 41 on page 249 of the Consolidated Financial Statements and to the information provided in the Remu- neration Report on page 311 ff. of this Annual Report. None of the members of the Board of Directors have significant business connections with the Company or any of its subsidiaries. 33 % Female 8 % Executive 92 % Independent Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 291/336 Changes in the Board of Directors in fiscal year 2023 Alessandro Benetton and Enrico Laghi were elected at the Extraordinary General Meeting of Shareholders on August 31, 2022. Their election became effective after the completion of the transfer of the 50.3 % stake in Autogrill from Edizione to the Company on February 3, 2023. Sami Kahale was newly elected to the Board of Directors at the Annual General Meeting of Shareholders on May 8, 2023. Diversity of the Board of Directors as of December 31, 2023 8 % British / Italian 8 % German 25 % Spanish Diversity and independence As of December 31, 2023, the Board of Directors has 67 % male and 33 % female members, including the Lead Inde- pendent Director. 8 % French 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 Executive Chairman. In his executive role, a substantial amount of his time is devoted to the Company’s operations where he works very closely with the CEO to pursue value-enhancing initiatives including strategically important relationships, joint ventures or acquisitions, and relationships with key current or future shareholders, and initiatives strengthening the Company’s partnerships with governments and key landlords. He also supports re-financing activities and capital markets transactions of the Company. 25 % Italian 25 % American 33 % Female The other members of the Board of Directors (92 % of the Board as of December 31, 2023) are non-executive members and are also considered independent. 67 % Male Over the past years, the Board of Directors has been consistently renewed. As of December 31, 2023, nine out of the twelve Board members have a tenure of 5 years or less. None of the members of the Board of Directors (members as of December 31, 2023) have ever been in a managerial position at Avolta AG or any of its subsidiaries. For informa- tion on related parties and related party transactions please refer to Note 41 on page 249 of the Consolidated Financial Statements and to the information provided in the Remu- neration Report on page 311 ff. of this Annual Report. None of the members of the Board of Directors have significant business connections with the Company or any of its subsidiaries. 8 % Executive 92 % Independent Independent Director, Non-Executive, born 1969, German Education Degree in Business Lynda Tyler-Cagni Independent Director, Non-Executive, Eugenia M. Ulasewicz Independent Director, Non-Executive, born 1956, British and Italian born 1953, American Education Education B.A. (Hons) in Languages, Bachelor’s degree from the Administration from Richmond Economics & Politics from the University of Massachusetts, University in London. University of Kingston, London. Amherst, Doctor of Law, College of Mount Saint Vincent, NY. Professional Background Professional Background Many years of private equity and Lynda Tyler-Cagni held various Professional Background banking experience. 2003 global executive positions with Eugenia Ulasewicz had a Joined Advent International as Fast Retailing, Uniqlo and Zegna. successful career serving in Director. Since 2016 Managing She is the founder and CEO at many roles as a global retail Partner at Advent International. Only the Best, an agency industry executive, most Member of the European and advising and representing talent recently as President, Burberry Asian Investment Advisory primarily in fashion, luxury and Americas until 2013. She serves Committee and Head of the retail. She also served as a on the Board of Directors of German office in Frankfurt of Director of Atlantia S.p.A., an Signet Jewelers (since 2014), is Advent International. Italian listed global infrastructure Chair of the Corporate Current Board Mandates Listed companies: Avolta AG and InPost Poland Not listed companies or organizations: Hermes Germany GmbH operator from 2016 until 2018. Citizenship & Sustainability Ms. Tyler-Cagni previously Committee and a member of served on the Board of World the Compensation Committee, Duty Free Group as a non- executive and independent member and chair of the Vince Holding Corp (since 2014), is Chair of the Compensation Committee and a member of HR & Remuneration Committee Audit Committee, and ASOS Plc (from 2013 until the acquisition (2020 - 2023) where she was of World Duty Free Group by Chair of the ESG Committee Dufry AG in 2015). Current Board Mandates Listed companies: Avolta AG and a member of Audit and Remuneration Committees. She served on the Board of Directors of Hudson, Ltd (2018 - 2020) and Bunzl plc (2011 - 2020). Not listed companies or organizations: EDHEC Paris (Business Current Board Mandates Listed companies: Avolta AG, Signet Jewelers Ltd. Management Advisory Board) and Vince Holding Corporation Not listed companies or organizations: None Joaquín Moya-Angeler Ranjan Sen Cabrera Independent Director, Non-Executive, born 1949, Spanish Education Master’s degree in Mathematics from the University of Madrid, Diploma in Economics and Forecasting from the London School of Economics and Political Science and an MS in Management from MIT’s Sloan School of Management. Professional Background J. Moya-Angeler has focused his career on the technology and real estate industries, including having founded a number of companies. He has been the Chairman of the Board of Directors of various companies: IBM Spain (1990 – 1994), Leche Pascual (1994 – 1997), Meta4 (1997 – 2002), TIASA (1996 – 1998), and Hildebrando (2003 – 2014). Served previously on the Board of Directors of Dufry AG (2005 – 2018), Hudson Ltd. (2018 – 2021) and as Chairman of the Board of Directors of La Quinta Real Estate (1994 – 2023). To date Chairman of the Board of Directors of Corporación Empresarial Pascual (since 1994), Chairman of the Board of Directors of Avalon Private Equity (since 1999). Serves on the advisory boards of private equity firms Palamon Capital Partners and MCH Private Equity. Current Board Mandates Listed companies: Avolta AG Not listed companies or organizations: Corporación Empresarial Pascual, Avalon Private Equity, Palamon Capital Partners (Board of Advisors), MCH Private Equity (Board of Advisors) Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 292/336 Board of Directors and Board Committees as of December 31, 2023 Board of Directors Executive Chairman: Juan Carlos Torres Carretero Honorary Chairman: Alessandro Benetton Vice-Chairmen: Sami Kahale Enrico Laghi Members: Xavier Bouton Lead Independent Director: Heekyung Jo Min Mary J. Steele Guilfoile Joaquín Moya-Angeler Cabrera Ranjan Sen Eugenia M. Ulasewicz Luis Maroto Camino Lynda Tyler-Cagni Audit Committee Remuneration Committee Nomination Committee Mary J. Steele Guilfoile, Chairwoman Luis Maroto Camino, Chairman Heekyung Jo Min, Chairwoman Luis Maroto Camino Heekyung Jo Min Sami Kahale Enrico Laghi Enrico Laghi Joaquín Moya-Angeler Cabrera Mary J. Steele Guilfoile Eugenia M. Ulasewicz Joaquín Moya-Angeler Cabrera ESG Committee Strategy and Integration Committee Heekyung Jo Min, Chairwoman Juan Carlos Torres Carretero, Chairman Sami Kahale Lynda Tyler-Cagni Eugenia M. Ulasewicz Sami Kahale Enrico Laghi Joaquín Moya-Angeler Cabrera Overview individual attendance Board and Comittee meetings Nomination and ESG Committee Nomination Committee (as of April 1, 2023) ESG Committee (as of April 1, 2023) Strategy and Integration Committee Member of the Board of Directors Board Meetings Audit Committee Remuneration (until March 31, Committee 2023) Juan Carlos Torres Carretero 10 /10 Alessandro Benetton 1 Sami Kahale 2 Enrico Laghi 3 Heekyung Jo Min Xavier Bouton Mary J. Steele Guilfoile 4 Luis Maroto Camino Ranjan Sen Lynda Tyler-Cagni 5 Eugenia M. Ulasewicz Number of meetings in fiscal year 2023 Joaquín Moya-Angeler Cabrera 9 / 10 3 / 3 2 / 2 4 / 5 4 / 5 5 / 5 – – – – – – – 5 8 / 9 4 / 4 9 / 9 10 / 10 10 / 10 10 / 10 10 / 10 10 / 10 10 / 10 10 / 10 10 98 % – – – – – – – – 5 4 / 4 5 / 5 5 / 5 5 / 5 – – – – – – – 3 / 3 4 / 4 4 / 4 1 / 1 4 / 4 4 100 % 2 / 2 2 / 2 2 / 2 2 / 2 – – – – – – – – 2 1 / 1 1 / 1 1 / 1 1 / 1 – – – – – – – – 1 1 / 1 0 / 1 1 / 1 1 / 1 1 / 1 – – – – – – – 1 Average attendance ratio 6 90 % 100 % 100 % 100 % 80 % 1 Member of the Board of Directors since February 3, 2023. Member of Strategy and Integration Committee until AGM on May 8, 2023. 2 Member of the Board of Directors since May 8, 2023. Member of Audit Committee, ESG Committee and Strategy and Integration Committee since May 9, 2023. 3 Member of the Board of Directors since February 3, 2023. Member of Audit Committee and ESG Committee until AGM on May 8, 2023. Member of Nomination Committee (and former Nomination and ESG Committee) and Strategy and Integration Committee since February 6, 2023. 4 Member of Nomination Committee since April 1, 2023. 5 Member of Nomination and ESG Committee until February 6, 2023. 6 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 their election at the General Meeting of Shareholders or the appointment to the Committees by the Board of Directors, as the case may be. 3.3 Rules in the Articles of Incorporation regarding the number of permitted mandates outside the Company 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, For the website link regarding the Articles of Incorpora- foundations, trusts and employee welfare foundations. tion referred to in the following chapters please see page No member of the Board of Directors may hold more 309 of this Corporate Governance Report. than ten such mandates. In accordance with Article 24 para. 2 of the Articles of Mandates shall mean any membership on the Board of Incorporation, no member of the Board of Directors may Directors, Executive Board or Advisory Board (in each hold more than four additional mandates in listed compa- case within the meaning of the Swiss Code of Obligations) nies and ten additional mandates in non-listed compa- or a comparable body under foreign law in another nies. The following mandates are not subject to the limi- undertaking with an economic purpose. Mandates in tations under para. 2 of this Article: different legal entities that are under joint control or same beneficial ownership are deemed one mandate. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 293/336 Overview individual attendance Board and Committee meetings Member of the Board of Directors Board Meetings Audit Committee Remuneration Committee Nomination and ESG Committee (until March 31, 2023) Nomination Committee (as of April 1, 2023) ESG Committee (as of April 1, 2023) Strategy and Integration Committee Juan Carlos Torres Carretero 10 /10 Alessandro Benetton 1 Sami Kahale 2 Enrico Laghi 3 Heekyung Jo Min Xavier Bouton Mary J. Steele Guilfoile 4 Luis Maroto Camino 8 / 9 4 / 4 9 / 9 10 / 10 10 / 10 10 / 10 10 / 10 Joaquín Moya-Angeler Cabrera 9 / 10 Ranjan Sen Lynda Tyler-Cagni 5 Eugenia M. Ulasewicz Number of meetings in fiscal year 2023 Average attendance ratio 6 10 / 10 10 / 10 10 / 10 10 98 % – – 3 / 3 2 / 2 4 / 5 – 4 / 5 5 / 5 – – – – 5 90 % – – – 4 / 4 – – – 5 / 5 5 / 5 – – 5 / 5 – – – 3 / 3 4 / 4 – – – 4 / 4 – 1 / 1 4 / 4 5 100 % 4 100 % – – – 2 / 2 2 / 2 – 2 / 2 – 2 / 2 – – – 2 100 % – – 1 / 1 – 1 / 1 – – – – – 1 / 1 1 / 1 1 100 % 1 / 1 0 / 1 1 / 1 1 / 1 – – – – 1 / 1 – – – 1 80 % 1 Member of the Board of Directors since February 3, 2023. Member of Strategy and Integration Committee until AGM on May 8, 2023. 2 Member of the Board of Directors since May 8, 2023. Member of Audit Committee, ESG Committee and Strategy and Integration Committee since May 9, 2023. 3 Member of the Board of Directors since February 3, 2023. Member of Audit Committee and ESG Committee until AGM on May 8, 2023. Member of Nomination Committee (and former Nomination and ESG Committee) and Strategy and Integration Committee since February 6, 2023. 4 Member of Nomination Committee since April 1, 2023. 5 Member of Nomination and ESG Committee until February 6, 2023. 6 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 their election at the General Meeting of Shareholders or the appointment to the Committees by the Board of Directors, as the case may be. 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 Incorpora- tion referred to in the following chapters please see page 309 of this Corporate Governance Report. In accordance with Article 24 para. 2 of the Articles of Incorporation, no member of the Board of Directors may hold more than four additional mandates in listed compa- nies and ten additional mandates in non-listed compa- nies. The following mandates are not subject to the limi- tations 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 foundations. No member of the Board of Directors may hold more than ten such mandates. Mandates shall mean any membership on the Board of Directors, Executive Board or Advisory Board (in each case within the meaning of the Swiss Code of Obligations) or a comparable body under foreign law in another undertaking with an economic purpose. Mandates in different legal entities that are under joint control or same beneficial ownership are deemed one mandate. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 294/336 3.4 Election and terms of office In accordance with Article 13 of the Articles of Incorpora- tion: – The Board of Directors shall consist of at least three and at most twelve members. – Members of the Board of Directors and the Chairman of the Board of Directors shall be elected for a term of office extending until completion of the next Annual 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 Directors 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 Annual 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 Shareholders, the Board of Directors determines its own organ- ization. The Board of Directors may elect up to two Vice-Chairman and an Honorary Chairman from amongst its members. It shall appoint a Secretary who does not need to be a member of the Board of Directors. All twelve members of the Board of Directors, who are active as of December 31, 2023, were elected or re-elected in individual elections at the Annual General Meeting of Shareholders held on May 8, 2023. The Annual General Meeting of Shareholders re-elected Juan Carlos Torres Carretero as Chairman of the Board of Directors. Ms. Eugenia M. Ulasewicz, Mr. Enrico Laghi, Mr. Luis Maroto Camino and Mr. Joaquín Moya-Angeler individual elections as Cabrera were re-elected members of the Remuneration Committee at this Annual General Meeting of Shareholders. in 3.5 Internal organizational structure In accordance with the Organizational Board Regulations, dated December 11, 2023, the Board of Directors shall be comprised of at least four females, (ii) the majority of the members of the Board of Directors shall be independent within the meaning of the applicable proxy voting guide- lines adopted by Institutional Shareholder Services (“ISS”) from time to time (the “ISS Guidelines”) and (iii) the composition of the Board of Directors and its Comittees shall comply with applicable laws and any applicable requirements of the SIX Swiss Exchange, the ISS Guide- lines and the Swiss Code of Best Practice for Corporate Governance (the “Swiss Code of Best Practice”) as amended from time to time. 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 determines its own organization. In accordance with the Organizational Board Regulations, the Board of Directors elects from its members each year at the first meeting after the Annual General Meeting of Shareholders the Honorary Chairman, the Vice-Chairmen, the Lead Inde- pendent Director, the members of the Audit Committee, the Nomination Committee, the ESG Committee and the Strategy and Integration Committee. The Board will further appoint a Secretary who does not need to be a member of the Board of Directors. The Honorary Chairman shall be involved, in coordination with the Chairman, in the organization, carrying out and oversight of the activities concerning shareholder engagement, with particular regard to major share- holders of the Company. One Vice-Chairman or both Vice-Chairmen, together with the CEO, shall focus on the Autogrill S.p.A. and Dufry AG integration matters and advise the Board on the status and progress of integra- tion matters. As of December 31, 2023, Avolta AG has five com- mittees: the Audit Committee, the Remuneration Committee, the Nomination Committee, the ESG Committee and the Strategy and Integration Committee. All five 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, 2023: Mary J. Steele Guilfoile (Chairwoman of the Audit Committee), Luis Maroto Camino, Heekyung Jo Min, Sami Kahale. The current members of the Audit Committee are all independent and non-executive members of the Board of Directors. The members shall be appointed, as a rule, for the entire duration of their mandate as Board members and be re-eligible. The Audit Committee assists the Board of Directors in fulfilling its duties of supervision of management. It performs the following duties and responsibilities: – Review and assessment of the performance and independence of the Auditors; – Review and assessment of the audit plan and the audit results and monitoring of the implementation of the findings by management; – Review the Auditors’ reports and discuss their The Remuneration Committee assists the Board of contents with the Auditors and the management; Directors in fulfilling its remuneration related matters. It – Review the effectiveness of the internal audit performs the following duties and responsibilities: function, its professional qualifications, resources, – Review and assess the remuneration system of the independence and its cooperation with external Company and the Group (including the management audit; incentive plans) and make proposals in connection – Approval of the annual internal audit concept and the thereto to the Board of Directors; annual internal audit report, including response of – Make recommendations regarding the proposals of the management thereto; the Board of Directors for the maximum aggregate – Assessment of the risk management and of the amount of compensation of the Board of Directors proposed measures to reduce risks; and the Global Executive Committee to be submitted – Assessment of the compliance levels and risk to the Annual General Meeting of Shareholders for management; approval; – Make a proposal to the Board of Directors with – Make proposals in relation to the remuneration respect to the annual and interim statutory and package of the CEO and the members of the Board consolidated financial statements. of Directors; The Audit Committee regularly reports to the Board of securities under any management incentive plan of Directors on its decisions, assessments, findings and the Company; proposes appropriate actions. The Audit Committee – Review and recommend to the Board of Directors the – Make proposals on the grant of options or other generally meets at the same dates the Board of Directors remuneration report. meetings take place (usually 4 – 5 times per year), although the Chairperson may call meetings as often as Furthermore, the Remuneration Committee reviews, and business requires. proposes for approval by the Board of Directors, the remuneration for the members of the Global Executive In fiscal year 2023, the Audit Committee held 5 meetings Committee other than the CEO, upon proposal by the (Q1: 1 meeting, Q2: 1 meeting, Q3: 1 meeting, and Q4: 2 CEO. The CEO’s remuneration is determined by the meetings) with management to review the business, Remuneration Committee and submitted to the full Board better understand laws, regulations and policies of Directors for approval. impacting the Group and its business and support the management in meeting the requirement and expecta- The Remuneration Committee meets as often as busi- tions of stakeholders. ness requires (usually 4 meetings per year). The meetings usually last 1 to 2 hours. The meetings usually last 2 to 3 hours. The auditors attended all meetings via video conference. The The Remuneration Committee held 5 meetings in the Chairman of the Board of Directors usually participates as fiscal year 2023 (Q1: 3 meetings, Q4: 2 meetings). The a guest in the Audit Committee meetings. Members of Chairman of the Board of Directors and the Independent the Global Executive Committee attended the meetings Lead Director usually participates as guests in the Remu- of the Audit Committee as follows: CEO 5 meetings and neration Committee meetings. Members of the Global the CFO (who acts as Secretary of the Audit Committee) Executive Committee attended these meetings as 5 meetings. follows: CEO 5 meetings, Chief People & Culture Officer 2 meetings. Cabrera. Remuneration Committee Members as of December 31, 2023: Luis Maroto Camino Nomination Committee (Chairman of the Remuneration Committee), Enrico Members as of December 31, 2023: Heekyung Jo Min Laghi, Joaquín Moya-Angeler Cabrera, Eugenia M. Ulase- (Chairwoman of the Nomination Committee), Mary J. wicz. Steele Guilfoile, Enrico Laghi, Joaquín Moya-Angeler The current members of the Remuneration Committee are all independent and non-executive members of the In April 2023, the formerly combined Nomination and Board of Directors. The members shall be appointed by ESG Committee was split into two Committees to allow the General Meeting of Shareholders until the next more time for additional work by these committees. The Annual General Meeting of Shareholders and be current members of the Nomination Committee are all re-eligible. independent and non-executive members of the Board of Directors. The members shall be appointed, as a rule, for Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 295/336 re-elected without limitation. pendent Director, the members of the Audit Committee, management; – Review the Auditors’ reports and discuss their contents with the Auditors and the management; – Review the effectiveness of the internal audit function, its professional qualifications, resources, independence and its cooperation with external audit; – Approval of the annual internal audit concept and the annual internal audit report, including response of the management thereto; – Assessment of the risk management and of the proposed measures to reduce risks; – Assessment of the compliance levels and risk – Make a proposal to the Board of Directors with respect to the annual and interim statutory and consolidated financial statements. 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 Directors meetings take place (usually 4 – 5 times per year), although the Chairperson may call meetings as often as business requires. In fiscal year 2023, the Audit Committee held 5 meetings (Q1: 1 meeting, Q2: 1 meeting, Q3: 1 meeting, and Q4: 2 meetings) with management to review the business, better understand regulations and policies impacting the Group and its business and support the management in meeting the requirement and expecta- tions of stakeholders. laws, The meetings usually last 2 to 3 hours. The auditors attended all meetings via video conference. The Chairman of the Board of Directors usually participates as a guest in the Audit Committee meetings. Members of the Global Executive Committee attended the meetings of the Audit Committee as follows: CEO 5 meetings and the CFO (who acts as Secretary of the Audit Committee) 5 meetings. Remuneration Committee Members as of December 31, 2023: Luis Maroto Camino (Chairman of the Remuneration Committee), Enrico Laghi, Joaquín Moya-Angeler Cabrera, Eugenia M. Ulase- wicz. The current members of the Remuneration Committee are all independent and non-executive members of the Board of Directors. The members shall be appointed by the General Meeting of Shareholders until the next Annual General Meeting of Shareholders and be re-eligible. 3.4 Election and terms of office In accordance with Article 13 of the Articles of Incorpora- Governance (the “Swiss Code of Best Practice”) as amended from time to time. tion: Except for the election of the Chairman of the Board of – The Board of Directors shall consist of at least three Directors and the members of the Remuneration and at most twelve members. Committee (which are to be elected by the General – Members of the Board of Directors and the Chairman Meeting of Shareholders), the Board of Directors of the Board of Directors shall be elected for a term determines its own organization. In accordance with the of office extending until completion of the next Organizational Board Regulations, the Board of Directors Annual General Meeting of Shareholders. elects from its members each year at the first meeting – The members of the Board of Directors and the after the Annual General Meeting of Shareholders the Chairman of the Board of Directors may be Honorary Chairman, the Vice-Chairmen, the Lead Inde- – If the office of the Chairman of the Board of Directors the Nomination Committee, the ESG Committee and the is vacant, the Board of Directors shall appoint a Strategy and Integration Committee. The Board will Chairman from among its members for a term of further appoint a Secretary who does not need to be a office extending until completion of the next Annual member of the Board of Directors. General Meeting of Shareholders. – Except for the election of the Chairman of the Board The Honorary Chairman shall be involved, in coordination of Directors and the members of the Remuneration with the Chairman, in the organization, carrying out and Committee by the General Meeting of Shareholders, oversight of the activities concerning shareholder the Board of Directors determines its own organ- engagement, with particular regard to major share- ization. The Board of Directors may elect up to two holders of the Company. One Vice-Chairman or both Vice-Chairman and an Honorary Chairman from Vice-Chairmen, together with the CEO, shall focus on the amongst its members. It shall appoint a Secretary Autogrill S.p.A. and Dufry AG integration matters and who does not need to be a member of the Board of advise the Board on the status and progress of integra- Directors. tion matters. All twelve members of the Board of Directors, who are As of December 31, 2023, Avolta AG has five com- active as of December 31, 2023, were elected or mittees: the Audit Committee, the Remuneration re-elected in individual elections at the Annual General Committee, the Nomination Committee, the ESG Meeting of Shareholders held on May 8, 2023. The Committee and the Strategy and Integration Committee. Annual General Meeting of Shareholders re-elected Juan All five Committees are assisting the Board of Directors in Carlos Torres Carretero as Chairman of the Board of fulfilling its duties and have also decision authority to the Directors. Ms. Eugenia M. Ulasewicz, Mr. Enrico Laghi, Mr. extent described below. Luis Maroto Camino and Mr. Joaquín Moya-Angeler Cabrera were re-elected in individual elections as Audit Committee members of the Remuneration Committee at this Annual Members as of December 31, 2023: Mary J. Steele General Meeting of Shareholders. Guilfoile (Chairwoman of the Audit Committee), Luis Maroto Camino, Heekyung Jo Min, Sami Kahale. The current members of the Audit Committee are all independent and non-executive members of the Board of 3.5 Internal organizational structure In accordance with the Organizational Board Regulations, Directors. The members shall be appointed, as a rule, for dated December 11, 2023, the Board of Directors shall be the entire duration of their mandate as Board members comprised of at least four females, (ii) the majority of the and be re-eligible. members of the Board of Directors shall be independent within the meaning of the applicable proxy voting guide- The Audit Committee assists the Board of Directors in lines adopted by Institutional Shareholder Services (“ISS”) fulfilling its duties of supervision of management. It from time to time (the “ISS Guidelines”) and (iii) the performs the following duties and responsibilities: composition of the Board of Directors and its Comittees – Review and assessment of the performance and shall comply with applicable laws and any applicable independence of the Auditors; requirements of the SIX Swiss Exchange, the ISS Guide- – Review and assessment of the audit plan and the lines and the Swiss Code of Best Practice for Corporate audit results and monitoring of the implementation of the findings by management; The Remuneration Committee assists the Board of Directors in fulfilling its remuneration related matters. It performs the following duties and responsibilities: – Review and assess the remuneration system of the Company and the Group (including the management incentive plans) and make proposals in connection thereto to the Board of Directors; – Make recommendations regarding the proposals of the Board of Directors for the maximum aggregate amount of compensation of the Board of Directors and the Global Executive Committee to be submitted to the Annual General Meeting of Shareholders for approval; – Make proposals in relation to the remuneration package of the CEO and the members of the Board of Directors; – Make proposals on the grant of options or other securities under any management incentive plan of the Company; – Review and recommend to the Board of Directors the remuneration report. Furthermore, the Remuneration Committee reviews, and proposes for approval by the Board of Directors, the remuneration for the members of the Global Executive Committee other than the CEO, upon proposal by the CEO. The CEO’s remuneration is determined by the Remuneration Committee and submitted to the full Board of Directors for approval. The Remuneration Committee meets as often as busi- ness requires (usually 4 meetings per year). The meetings usually last 1 to 2 hours. The Remuneration Committee held 5 meetings in the fiscal year 2023 (Q1: 3 meetings, Q4: 2 meetings). The Chairman of the Board of Directors and the Independent Lead Director usually participates as guests in the Remu- neration Committee meetings. Members of the Global Executive Committee attended these meetings as follows: CEO 5 meetings, Chief People & Culture Officer 2 meetings. Nomination Committee Members as of December 31, 2023: Heekyung Jo Min (Chairwoman of the Nomination Committee), Mary J. Steele Guilfoile, Enrico Laghi, Joaquín Moya-Angeler Cabrera. In April 2023, the formerly combined Nomination and ESG Committee was split into two Committees to allow more time for additional work by these committees. The current members of the Nomination Committee are all independent and non-executive members of the Board of Directors. The members shall be appointed, as a rule, for Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 296/336 the entire duration of their mandate as Board members and be re-eligible. 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 performs the following duties and responsibilities: – Assuring the long-term planning of appropriate appointments to the positions of the CEO and the Board of Directors; – Recommend to the Board of Directors the candidates for election as Board members; – Review the curriculum vitae, credentials and experience of the candidates proposed by the Board of Directors to fill vacancies on the Board of Directors or for the position of the CEO; – Review the composition, membership qualifications and size of the Board of Directors and its Committees to ensure appropriate expertise, diversity and independence of the Board of Directors and its Committees; – Present to the Board a proposal of succession plan for the position of the CEO at least once a year; – Present to the Board a proposal of succession plan for the position of the Chairman of the Board; – Review the adequacy of the selection system and criteria used for the appointment of the members of the Global Executive Committee. The Nomination Committee meets as often as business requires (usually 2 – 4 meetings per year). The meetings usually last 2 to 3 hours. The Nomination Committee held 2 meetings since being a stand-alone committee starting April 1, 2023 (Q2: 1 meeting, Q3: 1 meeting). The Chairman of the Board of Directors usually participates as a guest in the Nomina- tion Committee meetings. Members of the Global Exec- utive Committee attended these meetings as follows: CEO 2 meetings. The formerly combined Nomination and ESG Committee held 4 meetings in Q1 2023. The Chairman of the Board of Directors participated as a guest in the combined Nomination and ESG Committee meetings. Members of the Global Executive Committee attended these meetings as follows: CEO 4 meetings, Chief People & Culture Officer 1 meeting, Group General Counsel 1 meeting. ESG Committee Members as of December 31, 2023: Heekyung Jo Min (Chairwoman of the ESG Committee), Sami Kahale, Lynda Tyler-Cagni, Eugenia M. Ulasewicz. The current members of the ESG Committee are all inde- pendent and non-executive members of the Board of Directors. The members shall be appointed, as a rule, for The ESG Committee assists the Board of Directors in fulfilling its ESG strategy related matters. It performs the following duties and responsibilities: – Review on a regular basis and oversee the Group’s global strategy and reputation regarding ESG matters and make recommendations to the Board of Directors on measures to ensure the long-term governance and sustainability of the Group; – Monitor and assess current and emerging trends in ESG matters that may affect the business, operations, performance or reputation of the Group; – Monitor the Group’s performance regarding ESG matters based on metrics, systems and procedures, as deemed necessary and appropriate; – Review the ESG report intended for publication and make a proposal to the Board of Directors with respect to the approval of such report; – Oversee the Group’s communication and engagement on ESG matters with employees, shareholders, investors, customers, the media and the general public; – Monitor and assess the developments in corporate governance-related laws, regulations, standards and best practices, and analyze the external perception of the corporate governance of the Company and the Group; – Advise and make recommendations to the Board of Directors regarding corporate governance-related matters; and – Annually conduct and supervise the self-assessment of the Board of Directors and its Committees, and the assessment of the CEO and the other members of the Global Executive Committee. The ESG Committee meets as often as business requires (usually 2 - 4 meetings per year). The meetings usually last about 2 hours. The ESG Committee held 1 meeting since being a stand- alone committee starting April 1, 2023. The Chairman of the Board of Directors usually participates as a guest in the ESG Committee meetings. The CEO and the Chief Public Affairs & ESG Officer attended the meeting. The formerly combined Nomination and ESG Committee held 4 meetings in Q1 2023. The Chairman of the Board of Directors participated as a guest in the combined Nomi- nation and ESG Committee meetings. Members of the Global Executive Committee attended these meetings as follows: CEO 4 meetings, Chief People & Culture Officer 1 meeting, Group General Counsel 1 meeting. Strategy and Integration Committee The Board of Directors also engages specific advisors to Members as of December 31, 2023: Juan Carlos Torres address specific matters when required. External finan- Carretero (Chairman of the Strategy and Integration cial and brand advisors attended pertinent portions of 1 Committee), Sami Kahale, Enrico Laghi, Joaquín Moya- meeting of the Board of Directors in 2023. Angeler Cabrera. The current members of the Strategy and Integration Committee are all independent and non-executive members of the Board of Directors, except for the Execu- 3.6 Definition of areas of responsibility tive Chairman. The members shall be appointed, as a rule, The Board of Directors is the ultimate corporate body of for the entire duration of their mandate as Board Avolta  AG. It further represents the Company towards members and be re-eligible. third parties and shall manage all matters which by law, the Articles of Incorporation or the Board regulations The Strategy and Integration Committee has the power have not been delegated to another body of the and duty to propose and advise the Board, on strategic Company. guidelines and any change to the scope of the Group’s business, other strategic matters and the Group’s busi- In accordance with the Board regulations, the Board of ness plan, among others. For a full list of the committee’s Directors has delegated the operational management of duties and responsibilities, see Art. 8 of the Company’s the Company to the CEO who is responsible for overall Board Regulations (available under www.avoltaworld. management of the Avolta Group. The following respon- com/en/download-center). The Chairman shall periodi- sibilities remain with the Board of Directors: cally report to the Board of Directors on the proposals, – Ultimate direction of the business of the Company assessments and findings of the Strategy and Integration and the power to give the necessary directives; Committee, and propose appropriate actions. – Determination of the organization of the Company; – Administration of the accounting system, financial The Strategy and Integration Committee meets as often control and financial planning; as business requires. The meetings are usually to last – Appointment and removal of the members of the about 1 to 2 hours. committees installed by itself as well as the persons entrusted with the management and representation The Strategy and Integration Committee held 1 meeting of the Company, as well as the determination of their in Q4 of fiscal year 2023; the CEO attended the meeting. signatory power; Work method of the Board of Directors – Ultimate supervision of the persons entrusted with the management of the Company, in particular with As a rule, the Board of Directors meets about six to seven respect to their compliance with the law, the Articles times a year (usually at least once per quarter). Additional of Incorporation, regulations and directives; meetings or conference calls are held as and when ne- – Preparation of the Company’s annual report, which cessary. The Board of Directors held 10 meetings during includes the management report, the annual fiscal year 2023. The Board of Directors held 7 of these financial statements and the consolidated financial meetings as physical meetings and 3 as video conference statements, the remuneration report, and any other meetings. The meetings of the Board of Directors lasted reports that the Board of Directors may be required about 4 hours. The Executive Chairman determines the by law to prepare; agenda and items to be discussed at the Board meetings. – Organize the General Meetings of Shareholders and All members of the Board of Directors can request to add implement the resolutions adopted by the General further items on the agenda. Meeting of Shareholders; – Submission of an application for debt-restructuring The CEO, the CFO, and the Group General Counsel, also moratorium and notification of the judge if liabilities acting as Secretary to the Board, usually attend the meet- exceed assets; ings of the Board of Directors. Other members of the – Passing of resolutions regarding the subsequent Global Executive Committee may attend meetings of the payment of capital with respect to non-fully paid in Board of Directors as and when required. Members of the shares; Global Executive Committee attended these meetings of – Passing of resolutions on the change of the share the Board of Directors in 2023 as follows: CEO 10 meet- capital to the extent that such power is vested in the ings, CFO 10 meetings, Group General Counsel 10 meet- Board, the ascertainment of capital changes, the ings, President & CEO EMEA 1 meeting. preparation of the report on the capital increase and Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 297/336 Strategy and Integration Committee Members as of December 31, 2023: Juan Carlos Torres Carretero (Chairman of the Strategy and Integration Committee), Sami Kahale, Enrico Laghi, Joaquín Moya- Angeler Cabrera. The current members of the Strategy and Integration Committee are all independent and non-executive members of the Board of Directors, except for the Execu- tive Chairman. The members shall be appointed, as a rule, for the entire duration of their mandate as Board members and be re-eligible. The Strategy and Integration Committee has the power and duty to propose and advise the Board, on strategic guidelines and any change to the scope of the Group’s business, other strategic matters and the Group’s busi- ness plan, among others. For a full list of the committee’s duties and responsibilities, see Art. 8 of the Company’s Board Regulations (available under www.avoltaworld. com/en/download-center). The Chairman shall periodi- cally report to the Board of Directors on the proposals, assessments and findings of the Strategy and Integration Committee, and propose appropriate actions. The Strategy and Integration Committee meets as often as business requires. The meetings are usually to last about 1 to 2 hours. requires (usually 2 – 4 meetings per year). The meetings – Advise and make recommendations to the Board of usually last 2 to 3 hours. Directors regarding corporate governance-related The Strategy and Integration Committee held 1 meeting in Q4 of fiscal year 2023; the CEO attended the meeting. 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 ne- cessary. The Board of Directors held 10 meetings during fiscal year 2023. The Board of Directors held 7 of these meetings as physical meetings and 3 as video conference meetings. The meetings of the Board of Directors lasted about 4 hours. The Executive Chairman determines the agenda and items to be discussed at the Board meetings. All members of the Board of Directors can request to add further items on the agenda. The CEO, the CFO, and the Group General Counsel, also acting as Secretary to the Board, usually attend the meet- ings 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 2023 as follows: CEO 10 meet- ings, CFO 10 meetings, Group General Counsel 10 meet- ings, President & CEO EMEA 1 meeting. the entire duration of their mandate as Board members the entire duration of their mandate as Board members and be re-eligible. and be re-eligible. The Nomination Committee assists the Board of Directors The ESG Committee assists the Board of Directors in in fulfilling its nomination related matters. It performs the fulfilling its ESG strategy related matters. It performs the following duties and responsibilities: following duties and responsibilities: – Assuring the long-term planning of appropriate – Review on a regular basis and oversee the Group’s appointments to the positions of the CEO and the global strategy and reputation regarding ESG Board of Directors; – Recommend to the Board of Directors the candidates for election as Board members; matters and make recommendations to the Board of Directors on measures to ensure the long-term governance and sustainability of the Group; – Review the curriculum vitae, credentials and – Monitor and assess current and emerging trends in experience of the candidates proposed by the Board ESG matters that may affect the business, of Directors to fill vacancies on the Board of Directors operations, performance or reputation of the Group; or for the position of the CEO; – Monitor the Group’s performance regarding ESG – Review the composition, membership qualifications matters based on metrics, systems and procedures, and size of the Board of Directors and its Committees as deemed necessary and appropriate; to ensure appropriate expertise, diversity and – Review the ESG report intended for publication and independence of the Board of Directors and its make a proposal to the Board of Directors with Committees; respect to the approval of such report; – Present to the Board a proposal of succession plan – Oversee the Group’s communication and for the position of the CEO at least once a year; engagement on ESG matters with employees, – Present to the Board a proposal of succession plan shareholders, investors, customers, the media and for the position of the Chairman of the Board; the general public; – Review the adequacy of the selection system and – Monitor and assess the developments in corporate criteria used for the appointment of the members of governance-related laws, regulations, standards and the Global Executive Committee. best practices, and analyze the external perception of the corporate governance of the Company and The Nomination Committee meets as often as business the Group; matters; and The Nomination Committee held 2 meetings since being – Annually conduct and supervise the self-assessment a stand-alone committee starting April 1, 2023 (Q2: 1 of the Board of Directors and its Committees, and the meeting, Q3: 1 meeting). The Chairman of the Board of assessment of the CEO and the other members of Directors usually participates as a guest in the Nomina- the Global Executive Committee. tion Committee meetings. Members of the Global Exec- utive Committee attended these meetings as follows: The ESG Committee meets as often as business requires CEO 2 meetings. The formerly combined Nomination and (usually 2 - 4 meetings per year). The meetings usually last ESG Committee held 4 meetings in Q1 2023. The about 2 hours. Chairman of the Board of Directors participated as a guest in the combined Nomination and ESG Committee The ESG Committee held 1 meeting since being a stand- meetings. Members of the Global Executive Committee alone committee starting April 1, 2023. The Chairman of attended these meetings as follows: CEO 4 meetings, the Board of Directors usually participates as a guest in Chief People & Culture Officer 1 meeting, Group General the ESG Committee meetings. The CEO and the Chief Counsel 1 meeting. ESG Committee Public Affairs & ESG Officer attended the meeting. The formerly combined Nomination and ESG Committee held 4 meetings in Q1 2023. The Chairman of the Board of Members as of December 31, 2023: Heekyung Jo Min Directors participated as a guest in the combined Nomi- (Chairwoman of the ESG Committee), Sami Kahale, Lynda nation and ESG Committee meetings. Members of the Tyler-Cagni, Eugenia M. Ulasewicz. Global Executive Committee attended these meetings as follows: CEO 4 meetings, Chief People & Culture Officer 1 The current members of the ESG Committee are all inde- meeting, Group General Counsel 1 meeting. pendent and non-executive members of the Board of Directors. The members shall be appointed, as a rule, for The Board of Directors also engages specific advisors to address specific matters when required. External finan- cial and brand advisors attended pertinent portions of 1 meeting of the Board of Directors in 2023. 3.6 Definition of areas of responsibility The Board of Directors is the ultimate corporate body of Avolta  AG. It further represents the Company towards third parties and shall manage all matters which by law, the Articles of Incorporation or the Board regulations have not been delegated to another body of the Company. In accordance with the Board regulations, the Board of Directors has delegated the operational management of the Company to the CEO who is responsible for overall management of the Avolta Group. The following respon- sibilities remain with the Board of Directors: – Ultimate direction of the business of the Company and the power to give the necessary directives; – Determination of the organization of the Company; – Administration of the accounting system, financial control and financial planning; – Appointment and removal of the 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 Articles of Incorporation, regulations and directives; – Preparation of the Company’s annual report, which includes the management report, the annual financial statements and the consolidated financial statements, the remuneration report, and any other reports that the Board of Directors may be required by law to prepare; – Organize the General Meetings of Shareholders and implement the resolutions adopted by the General Meeting of Shareholders; – Submission of an application for debt-restructuring moratorium and 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 on the change of the share capital to the extent that such power is vested in the Board, the ascertainment of capital changes, the preparation of the report on the capital increase and Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 298/336 the corresponding amendment of the Articles of Incorporation; – 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 Avolta Group; – To approve the executive regulations promulgated in accordance with the Board Regulations; and – To propose an independent voting rights representative for election to the General Meeting of Shareholders, 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 sufficient information from the management to perform its super- visory duty and to make the decisions that are reserved to the Board through several channels as shown below. Management Information System (MIS) Avolta Group has an internal management information system that consists of financial statements, perfor- mance indicators and risk management. Information to management is provided on a regular basis according to the cycles of the business: sales on a daily and weekly basis; income statement, cash management and key performance indicators (KPI) including customer, margins and investment information, balance sheet, cash flow and other financial statements on a monthly basis. Manage- ment information is prepared on a consolidated basis as well as on a regional basis. Financial statements and key performance indicators are submitted to the entire Board of Directors on a quarterly basis. These quarterly updates also include non-financial information such as, but not exclusively, general business updates, progress on the implementation of the company’s ESG strategy as well as status updates from the Global Internal Audit & Investiga- tions Department. Board meetings and CEO reports 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 CEO information concerning the course of busi- ness of the Company and the Group and, with the autho- rization of the Executive Chairman, about specific matters. The CEO reports at each meeting of the Board of Direc- tors 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 CEO. Apart from the meet- ings, the CEO reports immediately any extraordinary event and any change within the Company and within the Avolta Group to the Executive Chairman. Reports from Global Internal Audit & Investigations Department The Global Internal Audit department provides indepen- dent risk-based and objective assurance reviews and performs loss prevention analysis to group companies through different activity streams. Key risks are identified and corresponding processes and controls included in the annual risk auditing plan. The department prepares a detailed review and auditing plan on a yearly basis with quarterly reassessments and submits it to the Audit Committee. Internal Audit Internal audit is an independent function that provides 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 a specific methodology throughout the Avolta Group and includes the consideration of internal and external factors. Regular follow-up is conducted to ensure that risk mitigation and control improvement measures are implemented on a timely basis. Global Investigations 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, machine learning and anti-fraud techniques. Currently, validations are performed monthly or bi-monthly for all Group companies and results are proven to provide valuable information for loss prevention purposes. Additionally, Avolta is continuously evolving and implementing techniques to establish validations that can enhance the coverage and / or create a higher assur- ance level over the key operating risks. All results of the Global Internal Audit & Investigations activities’ are communicated to key management in charge and to the Group’s senior management, including the members of the Global Executive Committee and the Audit Committee on a regular basis. 2023 Focus points of Global Internal Audit & Investigations In fiscal year 2023, Global Internal Audit (IA) conducted 74 reviews (32 former Dufry, 42 former Autogrill), with a global, country and location-based scope examining activities, risk exposure and processes. Internal Audit focused its efforts on assuring key retail and F&B risks around productivity, inventory and cash management. It further targeted IT and cyber security, and continuously evaluated the implementation of new processes and executed country or location reviews as part of the normal assurance activities. The Global Investigations team executed monthly valida- tions for assurance over the cash deposits and point-of- sale (POS) transactions globally, with coverage of over 92 % of net retail sales (former Dufry entities). During 2023, Global Internal Audit & Investigations started to integrate the respective function of former Autogrill and to form one team globally. As of 2024, IA will conduct combined audits around key risks with global, regional, country and location-based scope, fully combining Travel Retail and F&B. Financial and environmental risk management Detailed information on the financial risk management is provided in Notes 36 to 40 in the consolidated financial statements of this Annual Report. Information on the overall Group Risk Management, which includes climate- related risks and opportunities for the organisation is provided in the TCFD (Task Force on Climate-Related Financial Disclosures) Report and the ESG Report Annex, which are both separate section at the end of this Annual Report and on the sustainability website: www.avoltaworld.com/en/our-impact Meetings and attendance For attendance of the members of the Global Executive Committee at meetings of the Board of Directors or meetings of the Board Committees please refer to section “3.5 Internal organizational structure” above, which also includes the detailed description of the Audit Committee’s organization and working methods. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 299/336 the corresponding amendment of the Articles of Board meetings and CEO reports Incorporation; During Board meetings, each member of the Board may – Non-delegable and inalienable duties and powers of request information from the other members of the Board, the Board of Directors pursuant to the Swiss Merger as well as from the members of the management present Act; on all affairs of the Company and the Group. Outside of – To approve any non-operational or non-recurring Board meetings, each member of the Board may request transaction not included in the annual budget and from the CEO information concerning the course of busi- exceeding the amount of CHF 10,000,000; ness of the Company and the Group and, with the autho- – To issue convertible debentures, debentures with rization of the Executive Chairman, about specific matters. option rights or other financial market instruments; – To approve the annual investment and operating The CEO reports at each meeting of the Board of Direc- budgets of the Company and the Avolta Group; tors on the course of business of the Company and the – To approve the executive regulations promulgated in Group in a manner agreed upon from time to time accordance with the Board Regulations; and between the Board and the CEO. Apart from the meet- – To propose an independent voting rights ings, the CEO reports immediately any extraordinary representative for election to the General Meeting of event and any change within the Company and within the Shareholders, and to appoint an independent voting Avolta Group to the Executive Chairman. rights representative in the event of a vacancy. Except for the Chairman of the Board of Directors, who Department has single signature authority, the members of the Board The Global Internal Audit department provides indepen- Reports from Global Internal Audit & Investigations have joint signature authority, if any. 3.7 Information and control instruments vis-à-vis the senior management dent risk-based and objective assurance reviews and performs loss prevention analysis to group companies through different activity streams. Key risks are identified and corresponding processes and controls included in the annual risk auditing plan. The department prepares a detailed review and auditing plan on a yearly basis with quarterly reassessments and submits it to the Audit Committee. The Board of Directors ensures that it receives sufficient information from the management to perform its super- Internal Audit visory duty and to make the decisions that are reserved Internal audit is an independent function that provides to the Board through several channels as shown below. objective assurance and consulting activity, aiming to Management Information System (MIS) improve the organization’s operations. The selection of Internal Audit reviews to be executed during the year is Avolta Group has an internal management information based on a specific methodology throughout the Avolta system that consists of financial statements, perfor- Group and includes the consideration of internal and mance indicators and risk management. Information to external factors. Regular follow-up is conducted to management is provided on a regular basis according to ensure that risk mitigation and control improvement the cycles of the business: sales on a daily and weekly measures are implemented on a timely basis. basis; income statement, cash management and key performance indicators (KPI) including customer, margins Global Investigations and investment information, balance sheet, cash flow and The Global Investigations activity was created to prevent other financial statements on a monthly basis. Manage- losses and misappropriations within the Group. The day- ment information is prepared on a consolidated basis as to-day work is designed to leverage profitability using well as on a regional basis. Financial statements and key advanced data mining, machine learning and anti-fraud performance indicators are submitted to the entire Board techniques. Currently, validations are performed monthly of Directors on a quarterly basis. These quarterly updates or bi-monthly for all Group companies and results are also include non-financial information such as, but not proven to provide valuable information for loss prevention exclusively, general business updates, progress on the purposes. Additionally, Avolta is continuously evolving implementation of the company’s ESG strategy as well as and implementing techniques to establish validations that status updates from the Global Internal Audit & Investiga- can enhance the coverage and / or create a higher assur- tions Department. ance level over the key operating risks. All results of the Global Internal Audit & Investigations activities’ are communicated to key management in charge and to the Group’s senior management, including the members of the Global Executive Committee and the Audit Committee on a regular basis. 2023 Focus points of Global Internal Audit & Investigations In fiscal year 2023, Global Internal Audit (IA) conducted 74 reviews (32 former Dufry, 42 former Autogrill), with a global, country and location-based scope examining activities, risk exposure and processes. Internal Audit focused its efforts on assuring key retail and F&B risks around productivity, inventory and cash management. It further targeted IT and cyber security, and continuously evaluated the implementation of new processes and executed country or location reviews as part of the normal assurance activities. The Global Investigations team executed monthly valida- tions for assurance over the cash deposits and point-of- sale (POS) transactions globally, with coverage of over 92 % of net retail sales (former Dufry entities). During 2023, Global Internal Audit & Investigations started to integrate the respective function of former Autogrill and to form one team globally. As of 2024, IA will conduct combined audits around key risks with global, regional, country and fully combining Travel Retail and F&B. location-based scope, Financial and environmental risk management Detailed information on the financial risk management is provided in Notes 36 to 40 in the consolidated financial statements of this Annual Report. Information on the overall Group Risk Management, which includes climate- related risks and opportunities for the organisation is provided in the TCFD (Task Force on Climate-Related Financial Disclosures) Report and the ESG Report Annex, which are both separate section at the end of this Annual Report and on the sustainability website: www.avoltaworld.com/en/our-impact Meetings and attendance For attendance of the members of the Global Executive Committee at meetings of the Board of Directors or meetings of the Board Committees please refer to section “3.5 Internal organizational structure” above, which also includes the detailed description of the Audit Committee’s organization and working methods. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 300/336 4. Global Executive Committee 4.1 Members of the Global Executive Committee As of December 31, 2023, the Global Executive Committee comprised ten executives (seven members as of December 31, 2022). The Global Executive Committee under the control of the CEO conducts the operational management of the Company pursuant to the Company’s Board Regulations. The CEO reports to the Board of Direc- tors on a regular basis. The following table sets forth the name, position, nationality and year of appointment of the respective members, followed by their Curricula Vitae with a short description of each member’s business experience, education and activ- ities. All agreements entered into with the members of the Global Executive Committee are entered for an indefinite period of time. Global Executive Committee as of December 31, 2023 Name Position Nationality GEC Member since Year Xavier Rossinyol Chief Executive Officer (CEO) Chief Financial Officer (CFO) President & CEO Asia Pacific (APAC) President & CEO North America (NA) Yves Gerster Freda Cheung Steve Johnson Luis Marin Enrique Urioste Pascal C. Duclos Group General Counsel Camillo Rossotto Chief Public Affairs & ESG Officer Vijay Talwar Katrin Volery Chief Commercial & Digital Officer Chief People & Culture Officer Spanish Swiss Canadian American Swiss Italian American Swiss 2022 2019 2023 2023 2014 2023 2005 2023 2023 2023 President & CEO Europe, Middle East and Africa (EMEA) Spanish President & CEO Latin America (LATAM) Uruguayan / American 4.2 Education, professional background, other activities and vested interests Xavier Rossinyol Chief Executive Officer, born 1970, Spanish Yves Gerster Chief Financial Officer, born 1978, Swiss Freda Cheung Steve Johnson President & CEO Asia Pacific, President & CEO North America, born 1970, Canadian born 1963, American Education Education Bachelor’s degree in Business Degree in Business Administration at ESADE (Spain), Administration & Finance, MBA at ESADE and at the University of Basel. University of British Columbia (Canada and Hong Kong), Master’s degree in Business Law from Universidad Pompeu Fabra (Spain). Professional Background 1999 – 2003 Assistant Group Treasurer at Danzas Management AG. 2003 – 2006 Assistant Group Treasurer at Professional Background Bucher Industries AG. 1995 – 2003 Various positions at November 2006 – 2019 Global Areas (member of the French Head Group Treasury at Dufry group Elior) with responsibility International AG. Since April for finance, controlling, strategic 2019 Chief Financial Officer at planning. 2004 – 2012 Chief Avolta AG. Education Education CA, Chartered Professional Bachelor of Science degree in Accountants of Canada (CPA Marketing from the University of Canada), BComm (Hons), Texas at Arlington. Accounting from the University of British Columbia. Professional Background Professional Background 1996 – 1998 Group Marketing Director Westfield. 1998 – 2000 Prior to 2006 Various positions Head of Airport Management & in Accounting and Finance. 2006 – 2010 Vice President Development Westfield. 2000 – 2014 Executive Vice President Corporate Services World Duty Business Development HMSHost. Free (WDF). 2010 – 2017 CEO 2014 – 2023 President HMSHost. Canada World Duty Free (WDF). Since February 2023 President 2017 – 2019 Senior Vice & CEO North America at Avolta President Commercial USA / AG. Financial Officer at Avolta AG (then named Dufry AG). 2012 – 2015 Chief Operating Officer Region EMEA & Asia at Avolta. 2015 – 2021 Chief Executive Officer at gategroup. Since June 2022 Chief Executive Officer at Avolta AG. Canada at Dufry. 2020 – 2023 Executive Vice President & Country General Manager US / Canada at Dufry. Since February 2023 President & CEO Asia Pacific at Avolta AG. 4. Global Executive Committee 4.1 Members of the Global Executive Committee As of December 31, 2023, the Global Executive Committee comprised ten executives (seven members as of December 31, 2022). The Global Executive Committee under the control of the CEO conducts the operational management of the Company pursuant to the Company’s Board Regulations. The CEO reports to the Board of Direc- tors on a regular basis. The following table sets forth the name, position, nationality and year of appointment of the respective members, followed by their Curricula Vitae with a short description of each member’s business experience, education and activ- ities. All agreements entered into with the members of the Global Executive Committee are entered for an indefinite period of time. Global Executive Committee as of December 31, 2023 Name Position Nationality GEC Member since Year Xavier Rossinyol Chief Executive Officer (CEO) Chief Financial Officer (CFO) President & CEO Asia Pacific (APAC) President & CEO North America (NA) Yves Gerster Freda Cheung Steve Johnson Luis Marin Enrique Urioste Pascal C. Duclos Group General Counsel Camillo Rossotto Chief Public Affairs & ESG Officer Vijay Talwar Katrin Volery Chief Commercial & Digital Officer Chief People & Culture Officer Spanish Swiss Canadian American Swiss Italian American Swiss 2022 2019 2023 2023 2014 2023 2005 2023 2023 2023 President & CEO Europe, Middle East and Africa (EMEA) Spanish President & CEO Latin America (LATAM) Uruguayan / American Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 301/336 4.2 Education, professional background, other activities and vested interests Xavier Rossinyol Chief Executive Officer, born 1970, Spanish Education Bachelor’s degree in Business Administration at ESADE (Spain), MBA at ESADE and at the University of British Columbia (Canada and Hong Kong), Master’s degree in Business Law from Universidad Pompeu Fabra (Spain). Professional Background 1995 – 2003 Various positions at Areas (member of the French group Elior) with responsibility for finance, controlling, strategic planning. 2004 – 2012 Chief Financial Officer at Avolta AG (then named Dufry AG). 2012 – 2015 Chief Operating Officer Region EMEA & Asia at Avolta. 2015 – 2021 Chief Executive Officer at gategroup. Since June 2022 Chief Executive Officer at Avolta AG. Yves Gerster Chief Financial Officer, born 1978, Swiss 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 Avolta AG. Freda Cheung President & CEO Asia Pacific, born 1970, Canadian Steve Johnson President & CEO North America, born 1963, American Education Bachelor of Science degree in Marketing from the University of Texas at Arlington. Professional Background 1996 – 1998 Group Marketing Director Westfield. 1998 – 2000 Head of Airport Management & Development Westfield. 2000 – 2014 Executive Vice President Business Development HMSHost. 2014 – 2023 President HMSHost. Since February 2023 President & CEO North America at Avolta AG. Education CA, Chartered Professional Accountants of Canada (CPA Canada), BComm (Hons), Accounting from the University of British Columbia. Professional Background Prior to 2006 Various positions in Accounting and Finance. 2006 – 2010 Vice President Corporate Services World Duty Free (WDF). 2010 – 2017 CEO Canada World Duty Free (WDF). 2017 – 2019 Senior Vice President Commercial USA / Canada at Dufry. 2020 – 2023 Executive Vice President & Country General Manager US / Canada at Dufry. Since February 2023 President & CEO Asia Pacific at Avolta AG. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 302/336 Luis Marin President & CEO Europe, Middle East and Africa, born 1971, Spanish Enrique Urioste President & CEO Latin America, born 1962, Uruguayan and American Pascal C. Duclos Group General Counsel, born 1967, Swiss Camillo Rossotto Chief Public Affairs & ESG Officer, born 1962, Italian 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 Administration of Spanish subsidiaries of Areas (member of the French group Elior). Joined Avolta (then named Dufry) in 2004, as Business Controlling Director; and 2012 – 2023 also responsible for mergers and acquisitions. 2014 Appointed Chief Corporate Officer. 2018 – 2023 Global Chief Corporate Officer at Avolta. Since February 2023 President & CEO Europe, Middle East and Africa at Avolta AG. Education Law Degree from University of Montevideo, Post Graduate Diploma International Law ISS Holland, Business Executive Program IEM from Business School of the University of Montevideo. Professional Background 1999 – 2002 CEO IOSC. 2002 – 2007 President & CEO Interbaires Duty Free Shop. 2007 – 2011 President Airport Division Duty Free Americas. 2011 – 2020 CEO Neutral Duty Free Shops. 2020 – 2023 General Manager South America Cluster at Avolta AG (then named Dufry AG). Since March 2023 President & CEO Latin America at Avolta 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 Group General Counsel and Secretary to the Board of Directors at Avolta AG. Education MBA from L. Stern School of Business in New York, Degree in Political Science from the University of Turin. Professional Background Prior to 2011 different roles and functions within several companies including Fiat and Barilla. 2011 – 2012 Chief Financial Officer CNH, part of Fiat. 2012 – 2016 Chief Financial Officer Rai TV. 2016 – 2018 Chief Financial Officer Lavazza. 2018 – 2023 Chief Financial Officer & Chief Sustainability Officer Autogrill. Since February 2023 Chief Public Affairs & ESG Officer at Avolta AG. Current Board Mandates Listed companies: Compagnia dei Caraibi Vijay Talwar Katrin Volery Chief Commercial & Digital Officer, born 1971, American Chief People & Culture Officer, born 1968, Swiss Education Education MBA Marketing & Strategy from Diploma from the HSO Business the University of Chicago Booth School Switzerland in Berne, School of Business, M. Acc., Diploma from WKS Business Accounting Degree from Miami Management School University, Ohio. Professional Background 2010 – 2014 CEO/CFO Blue Nile. Switzerland in Berne, Certificate in Strategic Leadership by IMD Lausanne Switzerland. 2016 – 2019 President Digital Professional Background Footlocker. 2019 – 2022 CEO 2000 – 2015 Various positions EMEA Footlocker. 2022 CEO and mid-/long-term Human WISH. February 2023 Chief Digital & Customer Officer, since October 2023 Chief Resources Leader assignments. 2015 – 2016 Chief Human Resources Officer at Tamedia Commercial & Digital Officer at (TX Group). 2016 – 2017 Head Avolta AG. Current Board Mandates Listed companies: Dunelm Group PLC Human Resources at Syngenta. 2018 – 2020 Head Human Resources EurAsia and Global Paper Solenis. 2020 – 2022 Chief Human Resources Officer at Meraxis (REHAU Group). 2022 – 2023 Chief People Officer at Avolta AG (then named Dufry AG). Since February 2023 Chief People & Culture Officer at Avolta AG. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 303/336 Luis Marin President & CEO Europe, Middle East and Africa, born 1971, Spanish Education American Education Enrique Urioste Pascal C. Duclos President & CEO Latin America, Group General Counsel, born 1962, Uruguayan and born 1967, Swiss Education Licence en droit from Geneva Education Camillo Rossotto Chief Public Affairs & ESG Officer, born 1962, Italian Degree in Economic Sciences Law Degree from University University School of Law, L.L.M. MBA from L. Stern School of and Business Administration of Montevideo, Post Graduate from Duke University School of Business in New York, Degree in from Universidad de Barcelona. Diploma International Law ISS Law. Licensed to practice law in Political Science from the Professional Background 1995 – 1998 Auditor at Coopers & Lybrand. 1998 – 2001 Financial Controller at Derbi Holland, Business Executive Program IEM from Business School of the University of Montevideo. Switzerland and admitted to the University of Turin. New York Bar. Professional Background Professional Background Prior to 2011 different roles and 1991 – 1997 Senior attorney at functions within several Motocicletas – Nacional Motor Professional Background S.A. 2001 – 2004 Head of 1999 – 2002 CEO IOSC. law at Geneva law firm Davidoff & Partners. Also companies including Fiat and Barilla. 2011 – 2012 Chief Finance and Administration of 2002 – 2007 President & CEO academic assistant at the Financial Officer CNH, part of Spanish subsidiaries of Areas Interbaires Duty Free Shop. University of Geneva School of Fiat. 2012 – 2016 Chief Financial (member of the French group 2007 – 2011 President Airport Law (1994 – 1996). 1999 – 2001 Officer Rai TV. 2016 – 2018 Chief Elior). Joined Avolta (then named Dufry) in 2004, as Division Duty Free Americas. Attorney at law at New York law Financial Officer Lavazza. 2011 – 2020 CEO Neutral Duty firm Kreindler & Kreindler. 2001 – 2018 – 2023 Chief Financial Business Controlling Director; Free Shops. 2020 – 2023 2002 Financial planner at UBS Officer & Chief Sustainability and 2012 – 2023 also General Manager South AG in New York. 2003 – 2004 Officer Autogrill. Since February responsible for mergers and America Cluster at Avolta AG Senior foreign attorney at law at 2023 Chief Public Affairs & ESG acquisitions. 2014 Appointed (then named Dufry AG). Since the Buenos Aires law firm Officer at Avolta AG. March 2023 President & CEO Beretta Kahale Godoy. Since Latin America at Avolta AG. 2005 Group General Counsel and Secretary to the Board of Directors at Avolta AG. Current Board Mandates Listed companies: Compagnia dei Caraibi Chief Corporate Officer. 2018 – 2023 Global Chief Corporate Officer at Avolta. Since February 2023 President & CEO Europe, Middle East and Africa at Avolta AG. Vijay Talwar Chief Commercial & Digital Officer, born 1971, American Katrin Volery Chief People & Culture Officer, born 1968, Swiss Education MBA Marketing & Strategy from the University of Chicago Booth School of Business, M. Acc., Accounting Degree from Miami University, Ohio. Professional Background 2010 – 2014 CEO/CFO Blue Nile. 2016 – 2019 President Digital Footlocker. 2019 – 2022 CEO EMEA Footlocker. 2022 CEO WISH. February 2023 Chief Digital & Customer Officer, since October 2023 Chief Commercial & Digital Officer at Avolta AG. Current Board Mandates Listed companies: Dunelm Group PLC Education Diploma from the HSO Business School Switzerland in Berne, Diploma from WKS Business Management School Switzerland in Berne, Certificate in Strategic Leadership by IMD Lausanne Switzerland. Professional Background 2000 – 2015 Various positions and mid-/long-term Human Resources Leader assignments. 2015 – 2016 Chief Human Resources Officer at Tamedia (TX Group). 2016 – 2017 Head Human Resources at Syngenta. 2018 – 2020 Head Human Resources EurAsia and Global Paper Solenis. 2020 – 2022 Chief Human Resources Officer at Meraxis (REHAU Group). 2022 – 2023 Chief People Officer at Avolta AG (then named Dufry AG). Since February 2023 Chief People & Culture Officer at Avolta AG. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 304/336 Changes in the Global Executive Committee in fiscal year 2023 In the first quarter 2023, the Company reorganized its Global Executive Committee to reflect the new organiza- tion for the combined Dufry-Autogrill businesses. The following six new members joined the Global Executive Committee: Katrin Volery (effective January 1), Freda Cheung, Steve Johnson, Camillo Rossotto (effective February 7), Vijay Talwar and Enrique Urioste (effective March 1 and 2, respectively). The former members Eugenio Andrades, Andrea Belar- dini and Sarah Branquinho left the Global Executive Committee as of February 6, 2023. Details of their Curricula Vitae are available in the Annual Report 2022 on pages 267 / 268 of the Corporate Governance section. The Annual Report 2022 can be downloaded from the Download Center of the Company website at: www.avoltaworld.com/en/download-center page section “All categories – select Financial Reports”. Diversity As of December 31, 2023, the Global Executive Committee has 80 % male and 20 % female members (December 31, 2022, 86 % male, 14 % female members). Other activities and vested interests As of December 31, 2023, with the exception of Camillo Rossotto (board appointment in Compagnia dei Caraibi) and Vijay Talwar (board appointment in Dunelm Group PLC), none of the members of the Global Executive Committee of Avolta AG has had other activities in governing and supervisory bodies of, or advisory func- tions to, important Swiss or foreign organizations, institu- tions or foundations under private and public law outside Avolta Group, or held any public or political office. For a comprehensive list of mandates outside of Avolta Group at entities that have an economic purpose please refer to the table in the Remuneration Report on page 330 / 331 of this Annual Report. Diversity of the global Executive Committee as of December 31, 2023 10 % Uruguayan/American 10 % Canadian 10 % Italian 30 % Swiss 20 % Spanish Mandates shall mean any membership on the Board of corporate-governance – Articles of Incorporation. 20 % American 20 % Female Group. 80 % Male 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, 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 following mandates are not subject to the limitations under 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, Directors and of the executive management in terms of foundations, trusts and employee welfare foundations. duration and termination are stipulated in Article 23. No member of the Global Executive Committee may hold more than ten such mandates. Avolta’s Articles of Incorporation are available on the Company website www.avoltaworld.com/en/investors/ Directors, Executive Board or Advisory Board (in each case within the meaning of the Swiss Code of Obligations) or a comparable body under foreign law in another undertaking with an economic purpose. Mandates in different legal entities that are under joint control or same 6. Shareholders’ participation rights beneficial ownership are deemed one mandate. For the For the website link regarding the Articles of Incorpora- website link regarding the Articles of Incorporation please tion referred to in the following chapters please see the see page 309 of this Corporate Governance Report. link above. 4.4 Management contracts 6.1 Voting rights Avolta AG does not have management contracts with companies or natural persons not belonging to the Each share recorded as a share with voting rights in the and representation 5. Compensation, shareholdings and loans 5.1 Content and method of determining the compensation and shareholding programs 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 authorized to do so by a written proxy. A proxy does not need to be a shareholder. Shareholders entered in the share register as shareholders with voting rights on a specific qualifying date (record date) designated by the Board of Directors shall be entitled to vote at the General Meeting of Share- Detailed information of compensation, shareholdings and holders and to exercise their votes at the General Meeting loans to active and former members of the Board of of Shareholders. See section 6.5 below. Directors and of the Global Executive Committee in fiscal year 2023 is included in the Remuneration Nominees are only entitled to represent registered shares Report on pages 311 to 333 of this Annual Report. held by them at a General Meeting of Shareholders if they 5.2 Disclosure of rules in the Articles of Incorporation regarding compensation of the Board of Directors and of the Executive Management 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. For rules in the Articles of Incorporation regarding the Article 10 of the Articles of Incorporation includes the approval of compensation by the General Meeting of following voting rights limit: Until June 30, 2029, no share- Shareholders, the supplementary amount for changes in holder may exercise, directly or indirectly, voting rights the executive management as well as the general with respect to own or represented shares in excess of compensation principles please refer to Articles 20 – 22 25.1 % of the share capital registered in the commercial of the Articles of Incorporation. The Articles of Incorpora- register. For more details on this Article, please refer to tion do not contain any rules regarding loans, credit facil- section 2.4 above. ities or post-employment benefits for the members of the Board of Directors and executive management. The rules regarding agreements with members of the Board of Changes in the Global Executive Committee in fiscal year 2023 In the first quarter 2023, the Company reorganized its Global Executive Committee to reflect the new organiza- tion for the combined Dufry-Autogrill businesses. The following six new members joined the Global Executive Committee: Katrin Volery (effective January 1), Freda Cheung, Steve Johnson, Camillo Rossotto (effective February 7), Vijay Talwar and Enrique Urioste (effective March 1 and 2, respectively). The former members Eugenio Andrades, Andrea Belar- dini and Sarah Branquinho left the Global Executive Committee as of February 6, 2023. Details of their Curricula Vitae are available in the Annual Report 2022 on pages 267 / 268 of the Corporate Governance section. The Annual Report 2022 can be downloaded from the Download Center of the Company website at: www.avoltaworld.com/en/download-center page section “All categories – select Financial Reports”. Diversity As of December 31, 2023, the Global Executive Committee has 80 % male and 20 % female members (December 31, 2022, 86 % male, 14 % female members). Other activities and vested interests As of December 31, 2023, with the exception of Camillo Rossotto (board appointment in Compagnia dei Caraibi) and Vijay Talwar (board appointment in Dunelm Group PLC), none of the members of the Global Executive Committee of Avolta AG has had other activities in governing and supervisory bodies of, or advisory func- tions to, important Swiss or foreign organizations, institu- tions or foundations under private and public law outside Avolta Group, or held any public or political office. For a comprehensive list of mandates outside of Avolta Group at entities that have an economic purpose please refer to the table in the Remuneration Report on page 330 / 331 of this Annual Report. Diversity of the global Executive Committee as of December 31, 2023 Uruguayan/American 10 % 10 % Canadian 10 % Italian 30 % Swiss 20 % Spanish 20 % American 20 % Female 80 % Male 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, 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 following mandates are not subject to the limitations under 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 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 305/336 c) Mandates in associations, charitable organizations, foundations, trusts and employee welfare foundations. No member of the Global Executive Committee may hold more than ten such mandates. Mandates shall mean any membership on the Board of Directors, Executive Board or Advisory Board (in each case within the meaning of the Swiss Code of Obligations) or a comparable body under foreign law in another undertaking with an economic purpose. Mandates in different legal entities that are under joint control or same beneficial ownership are deemed one mandate. For the website link regarding the Articles of Incorporation please see page 309 of this Corporate Governance Report. Directors and of the executive management in terms of duration and termination are stipulated in Article 23. Avolta’s Articles of Incorporation are available on the Company website www.avoltaworld.com/en/investors/ corporate-governance – Articles of Incorporation. 6. Shareholders’ participation rights For the website link regarding the Articles of Incorpora- tion referred to in the following chapters please see the link above. 4.4 Management contracts 6.1 Voting rights Avolta AG does not have management contracts with companies or natural persons not belonging to the Group. 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 2023 is included in the Remuneration Report on pages 311 to 333 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 Incorpora- tion do not contain any rules regarding loans, credit facil- ities or post-employment benefits for the members of the Board of Directors and executive management. The rules regarding agreements with members of the Board of 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 authorized to do so by a written proxy. A proxy does not need to be a shareholder. Shareholders entered in the share register as shareholders with voting rights on a specific qualifying date (record date) designated by the Board of Directors shall be entitled to vote at the General Meeting of Share- holders 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 Shareholders 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. Article 10 of the Articles of Incorporation includes the following voting rights limit: Until June 30, 2029, no share- holder may exercise, directly or indirectly, voting rights with respect to own or represented shares in excess of 25.1 % of the share capital registered in the commercial register. For more details on this Article, please refer to section 2.4 above. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 306/336 Exceptions regarding the voting rights limitation granted in the year under review The Company has not granted any exception during the year under review. Required quorums for a change of the voting rights limitation According to the Articles of Incorporation, restrictions on the exercise of the right to vote and the removal of such restrictions requires a resolution of the General Meeting of Shareholders passed by at least two thirds of the votes represented and the majority of the nominal value of the shares represented. 6.2 The independent voting rights representative In accordance with Article 10 para. 4 of the Articles of Incorporation, the independent voting rights representa- tive shall be elected by the General Meeting of Share- holders for a term of office extending until completion of the next Annual General Meeting of Shareholders. Re-election is possible. If the Company does not have an independent voting rights representative, the Board of Directors shall appoint the independent voting rights representative for the next General Meeting of Share- holders. 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 Annual General Meeting of Shareholders held on May 8, 2023, re-elected Altenburger Ltd legal + tax, Kuesnacht-Zurich, as the independent voting rights representative until the completion of the Annual General Meeting of Shareholders in 2024. Altenburger Ltd legal + tax is independent from the Company and has no further mandates for Avolta AG. For the upcoming Annual General Meeting of Share- holders, the Company will once more enable its share- holders to send their voting instructions electronically to the independent voting rights representative Altenburger Ltd legal + tax through the platform: www.avolta.netvote.ch 6.3 Rules in the Articles of Incorporation regarding electronic participation at the General Meeting of Shareholders Article 8a para. 2 of the Articles of Incorporation contains rules that the Board of Directors can determine that the Meeting of Shareholders be held simultaneously at different locations, provided that the statements of the participants are transmitted directly to all venues, and / or that shareholders, who are not present at the General Meetings venue(s) may exercise their rights by electronic means. Para. 3 of Article 8a states that the Board of Direc- tors may also provide that the Meeting of Shareholders can be held by electronic means only without a venue. 6.4 Quorums The General Meeting of Shareholders shall be duly constituted irrespective of the number of shareholders present or of shares represented. Unless the law or Arti- cles of Incorporation provide for a qualified majority, a majority of the votes represented at a General Meeting of Shareholders is required for the adoption of resolutions or for elections, with abstentions, blank and invalid votes having the effect of “no” votes. The Chairman of the Meeting shall have a casting vote. A resolution of the General Meeting of Shareholders passed by at least two thirds of the votes represented and the majority of the nominal value of shares repre- sented shall be required for: 1. A modification of the purpose of the Company; 2. The creation of shares with increased voting powers; 3. Restrictions on the transfer of registered shares and the removal of such restrictions; 4. Restrictions on the exercise of the right to vote and the venue of the Meeting, the agenda and the proposals of In case of change of control, the unvested PSU awards will removal of such restrictions; 5. The introduction of a conditional capital or the introduction of a capital range; 6. An increase in share capital through the conversion of capital surplus, through a contribution in kind or by off-setting a claim, or a grant of special benefits upon a capital increase; 7. The restriction or denial of pre-emptive rights; 8. A change of the place of incorporation of the 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. 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 tors at the latest 60 days before the Meeting and shall members of the Board of Directors (Article 24 para. 1 specify the agenda items and the proposals made. of the Articles of Incorporation); 12. The dissolution of the Company; 13. The combination of shares; 14. The change of the currency of the share capital; 15. The delisting of the Company’s equity securities; register 16. Other matters where statutory law provides for a The record date for the inscription of registered share- 6.7 Registration into the share corresponding quorum. 6.5 Convocation of the General Meeting of Shareholders holders into the share register in view of their participation in the General Meeting of Shareholders is defined by the Board of Directors and stated in the respective invitation to the General Meeting of Shareholders. It is usually around 2 weeks before the Meeting. Shareholders who dispose of their registered shares before the General Meeting of The General Meeting of Shareholders shall be called by Shareholders are no longer entitled to vote with such the Board of Directors or, if necessary, by the Auditors. In disposed shares. accordance with Article 7 para. 3 of the Articles of Incor- poration, one or more shareholders with voting rights representing in the aggregate not less than 5 % of the share capital or votes can request, in writing, that a General Meeting of Shareholders be convened. Such 7. Change of control and defense measures request must be submitted to the Board of Directors, Avolta’s Articles of Incorporation are available on the specifying the items and proposals to appear on the Company website www.avoltaworld.com/en/investors/ agenda. corporate-governance – Articles of Incorporation. In accordance with Article 8 para. 2 of the Articles of Incorporation, the General Meeting of Shareholders shall be convened, at the election of the Board of Directors, by notice in the Swiss Official Gazette of Commerce (SOGC) or by notification in any other form that can be fixed for the Meeting. 6.6 Agenda 7.1 Duty to make an offer An investor who acquires more than 33 ¹⁄³ % of all voting rights (directly, indirectly or in concert with third parties) a takeover offer for all shares outstanding (Article 135 Financial Market Infrastructure Act, FMIA). The Articles of Incorporation of the Company contain neither an opting- out nor an opting-up provision (Article 125 para. 4 FMIA). evidenced by text not less than 20 days before the date whether they are exercisable or not, is required to submit In accordance with Article 8 para. 4 of the Articles of Incorporation, the notice of a General Meeting of Share- holders shall state the date, starting time, mode and 7.2 Clauses on change of control the Board of Directors and, if any, the proposals of the vest immediately as disclosed in the Remuneration shareholders, with a brief statement of the rationale of Report. each proposal, and the independent Voting Rights Repre- sentative’s name and address. According to Article 23 of the Articles of Incorporation, employment and other agreements with the members of In accordance with Article 8 para. 5 of the Articles of the Global Executive Committee may be concluded for a Incorporation, one or more shareholders with voting fixed term or for an indefinite term. Agreements for a rights whose combined holdings represent an aggregate fixed term may have a maximum duration of one year. of at least 0.5 % of the share capital or the votes may Renewal is possible. Agreements for an indefinite term request that an item be included in the agenda of a may have a notice period of maximum twelve months. General Meeting of Shareholders or that a proposal The current contracts with the members of the Global relating to an agenda item be included in the notice Executive Committee contain termination periods of convening the General Meeting of Shareholders. Such a twelve months or less. request must be made in writing to the Board of Direc- Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 307/336 Exceptions regarding the voting rights limitation granted in the year under review The Company has not granted any exception during the year under review. Required quorums for a change of the voting rights limitation 6.3 Rules in the Articles of Incorporation regarding electronic participation at the General Meeting of Shareholders According to the Articles of Incorporation, restrictions on Article 8a para. 2 of the Articles of Incorporation contains restrictions requires a resolution of the General Meeting Meeting of Shareholders be held simultaneously at of Shareholders passed by at least two thirds of the votes different locations, provided that the statements of the represented and the majority of the nominal value of the participants are transmitted directly to all venues, and / or shares represented. that shareholders, who are not present at the General Meetings venue(s) may exercise their rights by electronic means. Para. 3 of Article 8a states that the Board of Direc- tors may also provide that the Meeting of Shareholders can be held by electronic means only without a venue. 6.2 The independent voting rights representative In accordance with Article 10 para. 4 of the Articles of Incorporation, the independent voting rights representa- tive shall be elected by the General Meeting of Share- 6.4 Quorums holders for a term of office extending until completion of The General Meeting of Shareholders shall be duly the next Annual General Meeting of Shareholders. constituted irrespective of the number of shareholders Re-election is possible. If the Company does not have an present or of shares represented. Unless the law or Arti- independent voting rights representative, the Board of cles of Incorporation provide for a qualified majority, a Directors shall appoint the independent voting rights majority of the votes represented at a General Meeting of representative for the next General Meeting of Share- Shareholders is required for the adoption of resolutions or for elections, with abstentions, blank and invalid votes having the effect of “no” votes. The Chairman of the The Company may also make arrangements for elec- Meeting shall have a casting vote. tronic voting (Article 11 para. 5). Resolutions passed by electronic voting shall have the same effect as votes by A resolution of the General Meeting of Shareholders holders. ballot. passed by at least two thirds of the votes represented and the majority of the nominal value of shares repre- The Annual General Meeting of Shareholders held on sented shall be required for: May 8, 2023, re-elected Altenburger Ltd legal + tax, 1. A modification of the purpose of the Company; Kuesnacht-Zurich, as the independent voting rights 2. The creation of shares with increased voting powers; representative until the completion of the Annual General 3. Restrictions on the transfer of registered shares and Meeting of Shareholders in 2024. Altenburger Ltd legal + the removal of such restrictions; tax is independent from the Company and has no further 4. Restrictions on the exercise of the right to vote and the mandates for Avolta AG. removal of such restrictions; 5. The introduction of a conditional capital or the For the upcoming Annual General Meeting of Share- introduction of a capital range; holders, the Company will once more enable its share- 6. An increase in share capital through the conversion of holders to send their voting instructions electronically to capital surplus, through a contribution in kind or by the independent voting rights representative Altenburger off-setting a claim, or a grant of special benefits upon Ltd legal + tax through the platform: www.avolta.netvote.ch a capital increase; 7. The restriction or denial of pre-emptive rights; 8. A change of the place of incorporation of the The corresponding instructions regarding registration Company; and voting procedures on this electronic platform will be 9. The dismissal of a member of the Board of Directors; sent to the shareholders together with the invitation to 10. An increase in the maximum number of members the General Meeting of Shareholders. of the Board of Directors; the exercise of the right to vote and the removal of such rules that the Board of Directors can determine that the corresponding quorum. 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. The combination of shares; 14. The change of the currency of the share capital; 15. The delisting of the Company’s equity securities; 16. Other matters where statutory law provides for a 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. In accordance with Article 7 para. 3 of the Articles of Incor- poration, one or more shareholders with voting rights representing in the aggregate not less than 5 % of the share capital or votes can request, in writing, that a General Meeting of Shareholders be convened. Such request must be submitted to the Board of Directors, specifying the items and proposals to appear on the agenda. In accordance with Article 8 para. 2 of the Articles of Incorporation, the General Meeting of Shareholders shall be convened, at the election of the Board of Directors, by notice in the Swiss Official Gazette of Commerce (SOGC) or by notification in any other form that can be evidenced by text not less than 20 days before the date fixed for the Meeting. 6.6 Agenda In accordance with Article 8 para. 4 of the Articles of Incorporation, the notice of a General Meeting of Share- holders shall state the date, starting time, mode and venue of the Meeting, the agenda and the proposals of the Board of Directors and, if any, the proposals of the shareholders, with a brief statement of the rationale of each proposal, and the independent Voting Rights Repre- sentative’s name and address. In accordance with Article 8 para. 5 of the Articles of Incorporation, one or more shareholders with voting rights whose combined holdings represent an aggregate of at least 0.5 % of the share capital or the votes may request that an item be included in the agenda of a General Meeting of Shareholders or that a proposal relating to an agenda item be included in the notice convening the General Meeting of Shareholders. Such a request must be made in writing to the Board of Direc- tors at the latest 60 days before 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 participation in the General Meeting of Shareholders is defined by the Board of Directors and stated in the respective invitation to the General Meeting of Shareholders. 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 Avolta’s Articles of Incorporation are available on the Company website www.avoltaworld.com/en/investors/ corporate-governance – Articles of Incorporation. 7.1 Duty to make an offer An investor who acquires more than 33 ¹⁄³ % of all voting rights (directly, indirectly or in concert with third parties) whether they are exercisable or not, is required to submit a takeover offer for all shares outstanding (Article 135 Financial Market Infrastructure Act, FMIA). The Articles of Incorporation of the Company 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 unvested PSU awards will vest immediately as disclosed in the Remuneration Report. 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. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 308/336 8. Auditors 8.1 Auditors, duration of mandate and term of office of the lead auditor Pursuant to Article 19 para. 1 of the Articles of Incorpora- tion, the Statutory Auditors shall be elected each year and may be re-elected. Deloitte AG have been the Stat- utory Auditors since 2021. Andreas Bodenmann has been the Lead Auditor since 2021. 8.2 Auditing fee Within the yearly approved budget, there is also an amount permissible for non-audit services that the Stat- utory Auditors may perform. Within the scope of the approved and budgeted amount, the Chief Financial Officer can delegate non-audit related mandates to the Auditors. The Audit Committee agrees the scope of and discusses the results of the external audit with the Statutory Audi- tors. The Statutory Auditors prepare a comprehensive 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 consoli- dated financial statements before they are released. The auditing fees for 2023 for the audit of the consoli- dated and statutory financial statements of Avolta AG and its subsidiaries are CHF 8.22 million (2022: CHF 4.35 million). Representatives of the Statutory Auditors are regularly invited to meetings of the Audit Committee, namely to attend during those agenda points that deal with accounting, financial reporting or auditing matters. 8.3 Additional fees During 2023, Deloitte AG billed additional fees for the half-year review, audit-related services and tax compli- ance services in the amount of CHF 0.35 million, CHF 4.20 million and CHF 0.12 million, respectively (2022: CHF 0.20 million, CHF 0.62 million and CHF 0.09 million, 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 external Auditor should be proposed for election at the General Meeting of Shareholders. The decision regarding this agenda item is then taken by the Board of Directors. When evaluating the performance and independence of the Statutory Auditors, the Audit Committee puts special emphasis on the following criteria: Global network of the audit firm, professional competence of the lead audit team, understanding of Avolta’s specific business risks, personal independence of the lead auditor and indepen- dence of the audit firm as a company, coordination of the Statutory Auditors with the Audit Committee and the Senior Management / Finance Department of Avolta Group, practical recommendations with respect to the application of IFRS regulations. In addition, the Audit Committee reviews regularly the internal audit plan. Internal Audit reports are communi- cated to management in charge and the Company’s senior management on an on-going basis and 4 briefings were done to the Audit Committee in 2023. During the fiscal year 2023, the Audit Committee held 5 meetings. The Statutory Auditors were present at all of those meetings. The Board of Directors has determined the rotation interval for the Lead Auditor to be seven years, as defined by the Swiss Code of Obligation. The last rotation of the Lead Auditor was in conjunction with the change to Deloitte AG as new Statutory Auditors and occurred in 2021. 9. Information policy to pages 334 / 335 of this Annual Report. Avolta is committed to an open and transparent commu- nication with its shareholders, financial analysts, potential investors, the media, customers, suppliers and other interested parties. Avolta publishes its financial reports on a half-year basis (Half-Year Report, Annual Report) in English. The Company further releases quarterly trading updates for Q1 and Q3. All financial reports and media releases containing financial information are available on the Company website www.avoltaworld.com. In addition, Avolta organizes presentations and conference calls with the financial community and media to further discuss details of the reported earnings (such presen- tations or calls are held on the same day of the earnings publication) or on any other matters of importance. The Company undertakes roadshows for institutional inves- In fiscal year 2023, no exemptions were granted. tors and participates at broker conferences and seminars on a regular basis. Details and information on the business activities, 11. New Avolta Group Company structure, financial reports, media releases and On July 11, 2022, the Company (formerly named Dufry AG) investor relations are available on the Company’s website: announced that it will join forces with Autogrill, global The official means of publication of the Company is the through its wholly owned subsidiary Schema Beta S.p.A., www.avoltaworld.com Swiss Official Gazette of Commerce: www.shab.ch issues are: hoc-announcements registration-form Web-links regarding the SIX Exchange Regulation ratio corresponded to the 3-month VWAP of Autogrill and push- / pull-regulations concerning ad-hoc publicity Avolta shares prior to April 14, 2022, equal to EUR 6.33 www.avoltaworld.com/en/media/press-releases-ad- share for Avolta. Furthermore, in April 2023, the Company www.avoltaworld.com/en/media/press-release- Avolta shares at the same exchange ratio as Edizione. The current Articles of Incorporation are available with Italian takeover law. Autogrill was delisted on July 24, on Avolta’s website under: 2023, following the conclusion of the mandatory tender www.avoltaworld.com/en/investors/corporate- offer. governance – Articles of Incorporation The financial reports are available in the download relationship agreement, which underlines the commit- leader in travel food & beverage (F&B) to redefine travel experience. As part of the transaction, Edizione S.p.A., transferred its 50.3 % stake in Autogrill to the Company at an implied exchange ratio of 0.158 new Avolta shares for each Autogrill share on February 3, 2023. The exchange per share for Autogrill and EUR 39.71 (CHF 40.96) per launched a mandatory tender offer for the remaining Autogrill shares, offering Autogrill shareholders to receive Alternatively, the Company also offered a cash alternative equivalent to EUR 6.33 per Autogrill share, in compliance The Company and Edizione have entered into a long-term ment of Edizione as long-term strategic anchor share- holder supporting the enhanced strategy of the combined entity. Edizione is entitled to designate three members of the Board of Directors. Edizione also entered into a lock-up for a period of two years after closing of the Meeting of Shareholders of the Company approved the change of the corporate name from Dufry AG to Avolta AG. Avolta Group is operating in 73 countries and over 1,000 locations, with 5,100 points of sale across three segments – duty-free, travel convenience & essentials, For the Investor Relations and Corporate Communica- transaction (i.e. until February 2025). tions contacts, the Corporate Headquarter address and a summary of anticipated key dates in 2024 please refer On November 3, 2023, the Extraordinary General 10. Ordinary black-out periods During the period of 4 weeks prior to the public food & beverage – and a wide range of channels – from announcement of its annual financial statements and 15 airports and motorways, through to cruises, railways and calendar days prior to the public announcement of its more. For more information on Avolta’s Vision & Strategy half-year financial statements and Q1 and Q3 trading and our regions/business please refer to pages 28 to 96 updates, and until and including the day of publication, of this Annual Report. center under: Reports” www.avoltaworld.com/en/download-center page section “All categories – select Financial the members of the Board of Directors and the Global Executive Committee, members of the management bodies of an Avolta Group company as well as employees who have access to financial information of Avolta or to other inside information, as specified in Avolta’s internal guidelines, are prohibited to trade in Avolta equity or debt securities (or any financial instruments derived therefrom) issued by any Avolta group company. 8. Auditors 8.1 Auditors, duration of mandate and term of office of the lead auditor Pursuant to Article 19 para. 1 of the Articles of Incorpora- Within the yearly approved budget, there is also an amount permissible for non-audit services that the Stat- utory Auditors may perform. Within the scope of the approved and budgeted amount, the Chief Financial Officer can delegate non-audit related mandates to the Auditors. tion, the Statutory Auditors shall be elected each year The Audit Committee agrees the scope of and discusses and may be re-elected. Deloitte AG have been the Stat- the results of the external audit with the Statutory Audi- utory Auditors since 2021. Andreas Bodenmann has tors. The Statutory Auditors prepare a comprehensive been the Lead Auditor since 2021. 8.2 Auditing fee 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 consoli- dated financial statements before they are released. The auditing fees for 2023 for the audit of the consoli- Representatives of the Statutory Auditors are regularly dated and statutory financial statements of Avolta AG and invited to meetings of the Audit Committee, namely to its subsidiaries are CHF 8.22 million (2022: CHF 4.35 attend during those agenda points that deal with million). accounting, financial reporting or auditing matters. 8.3 Additional fees In addition, the Audit Committee reviews regularly the internal audit plan. Internal Audit reports are communi- cated to management in charge and the Company’s During 2023, Deloitte AG billed additional fees for the senior management on an on-going basis and 4 briefings half-year review, audit-related services and tax compli- were done to the Audit Committee in 2023. ance services in the amount of CHF 0.35 million, CHF 4.20 million and CHF 0.12 million, respectively (2022: During the fiscal year 2023, the Audit Committee held 5 CHF 0.20 million, CHF 0.62 million and CHF 0.09 million, meetings. The Statutory Auditors were present at all of 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 those meetings. The Board of Directors has determined the rotation interval for the Lead Auditor to be seven years, as defined by the Swiss Code of Obligation. The last rotation of the Lead Auditor was in conjunction with the change to Deloitte AG as new Statutory Auditors and occurred in 2021. 9. Information policy each year. Based on its review, the Audit Committee Avolta is committed to an open and transparent commu- recommends to the Board of Directors which external nication with its shareholders, financial analysts, potential Auditor should be proposed for election at the General investors, the media, customers, suppliers and other Meeting of Shareholders. The decision regarding this interested parties. agenda item is then taken by the Board of Directors. When evaluating the performance and independence of (Half-Year Report, Annual Report) in English. The the Statutory Auditors, the Audit Committee puts special Company further releases quarterly trading updates for emphasis on the following criteria: Global network of the Q1 and Q3. All financial reports and media releases audit firm, professional competence of the lead audit containing financial information are available on the team, understanding of Avolta’s specific business risks, Company website www.avoltaworld.com. Avolta publishes its financial reports on a half-year basis personal independence of the lead auditor and indepen- dence of the audit firm as a company, coordination of the In addition, Avolta organizes presentations and conference Statutory Auditors with the Audit Committee and the calls with the financial community and media to further Senior Management / Finance Department of Avolta discuss details of the reported earnings (such presen- Group, practical recommendations with respect to the tations or calls are held on the same day of the earnings application of IFRS regulations. publication) or on any other matters of importance. The Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 309/336 In fiscal year 2023, no exemptions were granted. 11. New Avolta Group On July 11, 2022, the Company (formerly named Dufry AG) announced that it will join forces with Autogrill, global leader in travel food & beverage (F&B) to redefine travel experience. As part of the transaction, Edizione S.p.A., through its wholly owned subsidiary Schema Beta S.p.A., transferred its 50.3 % stake in Autogrill to the Company at an implied exchange ratio of 0.158 new Avolta shares for each Autogrill share on February 3, 2023. The exchange ratio corresponded to the 3-month VWAP of Autogrill and Avolta shares prior to April 14, 2022, equal to EUR 6.33 per share for Autogrill and EUR 39.71 (CHF 40.96) per share for Avolta. Furthermore, in April 2023, the Company launched a mandatory tender offer for the remaining Autogrill shares, offering Autogrill shareholders to receive Avolta shares at the same exchange ratio as Edizione. Alternatively, the Company also offered a cash alternative equivalent to EUR 6.33 per Autogrill share, in compliance with Italian takeover law. Autogrill was delisted on July 24, 2023, following the conclusion of the mandatory tender offer. The Company and Edizione have entered into a long-term relationship agreement, which underlines the commit- ment of Edizione as long-term strategic anchor share- holder supporting the enhanced strategy of the combined entity. Edizione is entitled to designate three members of the Board of Directors. Edizione also entered into a lock-up for a period of two years after closing of the transaction (i.e. until February 2025). On November 3, 2023, the Extraordinary General Meeting of Shareholders of the Company approved the change of the corporate name from Dufry AG to Avolta AG. Avolta Group is operating in 73 countries and over 1,000 locations, with 5,100 points of sale across three segments – duty-free, travel convenience & essentials, food & beverage – and a wide range of channels – from airports and motorways, through to cruises, railways and more. For more information on Avolta’s Vision & Strategy and our regions/business please refer to pages 28 to 96 of this Annual Report. Company undertakes roadshows for institutional inves- tors and participates at broker conferences and seminars 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.avoltaworld.com The official means of publication of the Company is the Swiss Official Gazette of Commerce: www.shab.ch Web-links regarding the SIX Exchange Regulation push- / pull-regulations concerning ad-hoc publicity issues are: www.avoltaworld.com/en/media/press-releases-ad- hoc-announcements www.avoltaworld.com/en/media/press-release- registration-form The current Articles of Incorporation are available on Avolta’s website under: www.avoltaworld.com/en/investors/corporate- governance – Articles of Incorporation The financial reports are available in the download center under: www.avoltaworld.com/en/download-center page section “All categories – select Financial Reports” For the Investor Relations and Corporate Communica- tions contacts, the Corporate Headquarter address and a summary of anticipated key dates in 2024 please refer to pages 334 / 335 of this Annual Report. 10. Ordinary black-out periods During the period of 4 weeks prior to the public announcement of its annual financial statements and 15 calendar days prior to the public announcement of its half-year financial statements and Q1 and Q3 trading updates, and until and including the day of publication, the members of the Board of Directors and the Global Executive Committee, members of the management bodies of an Avolta Group company as well as employees who have access to financial information of Avolta or to other inside information, as specified in Avolta’s internal guidelines, are prohibited to trade in Avolta equity or debt securities (or any financial instruments derived therefrom) issued by any Avolta group company. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 310/336 n o i t a r e n u m t r o p e e R R n o i t a r e n u m e R t r o p e R Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 312/336 Dear Shareholders On behalf of the Board of Directors and the Remuneration Committee, I am pleased to share with you our Remuneration Report for fiscal year 2023. In this period, we successfully executed the Dufry-Autogrill combi- nation with the share transfer of Edizione’s 50.3 % stake in Autogrill to Dufry in February, followed by the mandatory tender offer for the re- maining shares of Autogrill, a final squeeze-out procedure and then the delisting of Autogrill on July 24, 2023. On October 2, 2023, we announced our new company name Avolta, which was approved by the Extraordinary General Meeting of Shareholders on November 3, 2023. pared to CHF 10,804.8 million pro- forma in 2022. CORE EBITDA amounted to CHF 1,129.6 million, an increase of 20.0 % compared to pro- forma 2022, and at a margin of 9.0 %. Equity Free Cash Flow came to CHF 323.0 million, a 28.6 % conver- sion of CORE EBITDA and well above expectations at the beginning of the year. I also want to underline the achievements made within our ESG engagement, where we have already fully updated our ESG strategy to the new combined entity and launched several important ESG initiatives. For further information on our perfor- mance, please refer to the detailed letters of our CEO and CFO. At Avolta, we take the lead in creating a travel experience revolution across the travel retail and food & beverage businesses worldwide and we will continue to be a global employer of choice, as the two legacy companies Dufry and Autogrill had been before. Avolta’s compensation system fosters the successful achievement of our strategic and financial targets, as well as sustainable growth and long-term value creation for our shareholders. 2023 is also a testimony to the huge potential of Avolta’s combined teams and businesses, and a year with strong financial performance, reflected by a substantial CORE Organic Growth of 21.6 % and further improvement to all major KPIs. Our CORE Turnover reached CHF 12,534.6 million com- Three new members joined our Board of Directors in 2023: Alessandro Benetton as Honorary Chairman and Enrico Laghi and Sami Kahale as Vice- Chairmen. The previously combined Nomination and ESG Committee was split into two committees given the importance of ESG matters that are an integral part of our strategy. Fur- thermore, in conjunction with the Dufry-Autogrill combination, the Board of Directors decided to intro- duce a new Strategy and Integration Committee. For details on Committee memberships, please refer to page 292 in the Corporate Governance section of this Annual Report. Our Global Executive Committee was expanded with six new members hav- ing joined in the first quarter of 2023. We warmly welcomed Freda Cheung (President & CEO Asia Pacific), Steve Johnson (President & CEO North America), Enrique Urioste (President & CEO Latin America), Camillo Rossotto (Chief Public Affairs & ESG Officer), Vijay Talwar (Chief Commercial & Digi- tal Officer) and Katrin Volery (Chief People & Culture Officer) to our exec- utive committee. At the same time, Eugenio Andrades, Andrea Belardini and Sarah Branquinho left the Global Executive Committee during 2023. We express our sincere thanks for their tremendous work and commit- ment over the years. The Remuneration Committee per- formed its regular activities through- out the reporting year, such as the annual review of the remuneration framework for the Board of Directors and the Global Executive Committee, the performance objectives setting and assessment for the short-term and long-term incentive plans, review of the individual members’ remunera- tion, preparation of the Remuneration Report, and recommending to the Board of Directors the General Meet- ing voting proposals on remuneration. In the context of the annual compen- sation review, and considering the fact that the size and complexity of the Group substantially increased, the Board of Directors decided to put an even greater emphasis on perfor- mance-based compensation in full alignment with shareholder interests. For fiscal year 2023, the following long-term pay-for-performance proved the proposed maximum ag- changes were implemented: alignment and strong commitment gregate remuneration for the Board – The Global Executive Committee of the executives. The number of of Directors for the period from was expanded with new positions PSU granted was adjusted in 2023 AGM 2023 to AGM 2024 with 97.24 %, and additional responsibilities to to reflect the increased responsibili- the increased maximum aggregate reflect the enlarged Group, the im- ties of each member of the Global amount of remuneration for the plementation of Avolta’s long-term Executive Committee and is aligned Global Executive Committee for the strategy “Destination 2027” and to with shareholder interests since it is fiscal year 2023 with 96.37 %, and the drive the Travel Retail Revolution; focused on long-term performance. maximum aggregate amount of re- – The performance bonus opportu- The PSUs are subject to three per- muneration for the Global Executive nity for the Executive Chairman was formance conditions (in line with the Committee for fiscal year 2024 with raised to 150 % of his fixed remuner- PSU plan 2022): Cumulative CORE 96.38 % of the votes represented. ation (with payout cap set at 133¹⁄³ % of target) to reflect the increased EPS (50 %), Relative TSR (25 %), and ESG target (25 %). The ESG target Our compensation structure supports size and complexity of the com- consists of two different compo- our long-term financial and non-finan- bined Avolta Group. In his executive nents (People and Environment) that cial values and is well aligned with our role, a substantial amount of his are both related to material areas shareholders’ interests. On behalf of time is devoted to the Company’s from a business and stakeholder the Board of Directors and the Remu- operations where the Chairman perspective, each with a weighting neration Committee, I would like to works very closely with the CEO to of 50 % of the overall ESG target. All thank you for your continued contri- pursue value-enhancing initiatives targets of the PSU plan are disclosed butions and your confidence in Avolta. including strategically important prospectively. The objectives con- We trust that you will find this report relationships, joint ventures or ac- tinue to reflect the mid- and long- informative. quisitions, and relationships with key term priorities of Avolta Group and current or future shareholders, and take into account feedback received Yours sincerely, initiatives strengthening the Com- from shareholders in the past. The pany’s partnerships with govern- three-year performance period of ments and key landlords. He also the PSU remained unchanged com- supports re-financing activities and pared to earlier PSU plans; capital markets transactions of the – Two members of the Global Execu- Company; tive Committee received a base sal- – The performance objectives for ary increase in 2023 in line with the Luis Maroto Camino the annual bonus of the Executive increase and / or change of their Chairman of the Chairman and the members of the functions and responsibilities. Remuneration Committee Global Executive Committee in 2023 were based on our focus ar- At the AGM in May 2023, sharehold- eas of growth, profitability and cash ers were invited to express their opin- generation. They consist of CORE ion on our remuneration programs Turnover, CORE EBITDA (new KPI) and principles in a consultative vote and Equity Free Cash Flow, with a on the Remuneration Report 2022, weighting of 33¹⁄³ % each; which was approved by a majority of – The Performance Share Units (PSU) 85.08 % of the votes represented. plan was continued to foster the Furthermore, the shareholders ap- Dear Shareholders On behalf of the Board of Directors pared to CHF 10,804.8 million pro- We warmly welcomed Freda Cheung and the Remuneration Committee, forma in 2022. CORE EBITDA (President & CEO Asia Pacific), Steve I am pleased to share with you our amounted to CHF 1,129.6 million, an Johnson (President & CEO North Remuneration Report for fiscal year increase of 20.0 % compared to pro- America), Enrique Urioste (President & 2023. In this period, we successfully forma 2022, and at a margin of 9.0 %. CEO Latin America), Camillo Rossotto executed the Dufry-Autogrill combi- Equity Free Cash Flow came to (Chief Public Affairs & ESG Officer), nation with the share transfer of CHF 323.0 million, a 28.6 % conver- Vijay Talwar (Chief Commercial & Digi- Edizione’s 50.3 % stake in Autogrill to sion of CORE EBITDA and well above tal Officer) and Katrin Volery (Chief Dufry in February, followed by the expectations at the beginning of the People & Culture Officer) to our exec- mandatory tender offer for the re- year. I also want to underline the utive committee. At the same time, maining shares of Autogrill, a final achievements made within our ESG Eugenio Andrades, Andrea Belardini squeeze-out procedure and then the engagement, where we have already and Sarah Branquinho left the Global delisting of Autogrill on July 24, 2023. fully updated our ESG strategy to the Executive Committee during 2023. On October 2, 2023, we announced new combined entity and launched We express our sincere thanks for our new company name Avolta, which several important ESG initiatives. For their tremendous work and commit- was approved by the Extraordinary further information on our perfor- ment over the years. General Meeting of Shareholders on mance, please refer to the detailed November 3, 2023. letters of our CEO and CFO. The Remuneration Committee per- formed its regular activities through- At Avolta, we take the lead in creating Three new members joined our Board out the reporting year, such as the a travel experience revolution across of Directors in 2023: Alessandro annual review of the remuneration the travel retail and food & beverage Benetton as Honorary Chairman and framework for the Board of Directors businesses worldwide and we will Enrico Laghi and Sami Kahale as Vice- and the Global Executive Committee, continue to be a global employer of Chairmen. The previously combined the performance objectives setting choice, as the two legacy companies Nomination and ESG Committee was and assessment for the short-term Dufry and Autogrill had been before. split into two committees given the and long-term incentive plans, review Avolta’s compensation system fosters importance of ESG matters that are of the individual members’ remunera- the successful achievement of our an integral part of our strategy. Fur- tion, preparation of the Remuneration strategic and financial targets, as well thermore, in conjunction with the Report, and recommending to the as sustainable growth and long-term Dufry-Autogrill combination, the Board of Directors the General Meet- value creation for our shareholders. Board of Directors decided to intro- ing voting proposals on remuneration. duce a new Strategy and Integration 2023 is also a testimony to the huge Committee. For details on Committee In the context of the annual compen- potential of Avolta’s combined teams memberships, please refer to page sation review, and considering the and businesses, and a year with strong 292 in the Corporate Governance fact that the size and complexity of financial performance, reflected by section of this Annual Report. a substantial CORE Organic Growth the Group substantially increased, the Board of Directors decided to put an of 21.6 % and further improvement to Our Global Executive Committee was even greater emphasis on perfor- all major KPIs. Our CORE Turnover expanded with six new members hav- mance-based compensation in full reached CHF 12,534.6 million com- ing joined in the first quarter of 2023. alignment with shareholder interests. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 313/336 For fiscal year 2023, the following changes were implemented: – The Global Executive Committee was expanded with new positions and additional responsibilities to reflect the enlarged Group, the im- plementation of Avolta’s long-term strategy “Destination 2027” and to drive the Travel Retail Revolution; – The performance bonus opportu- nity for the Executive Chairman was raised to 150 % of his fixed remuner- ation (with payout cap set at 133¹⁄³ % of target) to reflect the increased size and complexity of the com- bined Avolta Group. In his executive role, a substantial amount of his time is devoted to the Company’s operations where the Chairman works very closely with the CEO to pursue value-enhancing initiatives including strategically important relationships, joint ventures or ac- quisitions, and relationships with key current or future shareholders, and initiatives strengthening the Com- pany’s partnerships with govern- ments and key landlords. He also supports re-financing activities and capital markets transactions of the Company; – The performance objectives for the annual bonus of the Executive Chairman and the members of the Global Executive Committee in 2023 were based on our focus ar- eas of growth, profitability and cash generation. They consist of CORE Turnover, CORE EBITDA (new KPI) and Equity Free Cash Flow, with a weighting of 33¹⁄³ % each; – The Performance Share Units (PSU) plan was continued to foster the long-term pay-for-performance alignment and strong commitment of the executives. The number of PSU granted was adjusted in 2023 to reflect the increased responsibili- ties of each member of the Global Executive Committee and is aligned with shareholder interests since it is focused on long-term performance. The PSUs are subject to three per- formance conditions (in line with the PSU plan 2022): Cumulative CORE EPS (50 %), Relative TSR (25 %), and ESG target (25 %). The ESG target consists of two different compo- nents (People and Environment) that are both related to material areas from a business and stakeholder perspective, each with a weighting of 50 % of the overall ESG target. All targets of the PSU plan are disclosed prospectively. The objectives con- tinue to reflect the mid- and long- term priorities of Avolta Group and take into account feedback received from shareholders in the past. The three-year performance period of the PSU remained unchanged com- pared to earlier PSU plans; – Two members of the Global Execu- tive Committee received a base sal- ary increase in 2023 in line with the increase and / or change of their functions and responsibilities. At the AGM in May 2023, sharehold- ers were invited to express their opin- ion on our remuneration programs and principles in a consultative vote on the Remuneration Report 2022, which was approved by a majority of 85.08 % of the votes represented. Furthermore, the shareholders ap- proved the proposed maximum ag- gregate remuneration for the Board of Directors for the period from AGM 2023 to AGM 2024 with 97.24 %, the increased maximum aggregate amount of remuneration for the Global Executive Committee for the fiscal year 2023 with 96.37 %, and the maximum aggregate amount of re- muneration for the Global Executive Committee for fiscal year 2024 with 96.38 % of the votes represented. Our compensation structure supports our long-term financial and non-finan- cial values and is well aligned with our shareholders’ interests. On behalf of the Board of Directors and the Remu- neration Committee, I would like to thank you for your continued contri- butions and your confidence in Avolta. We trust that you will find this report informative. Yours sincerely, Luis Maroto Camino Chairman of the Remuneration Committee Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 314/336 Remuneration at a glance Summary of remuneration system for the Board of Directors in 2023 Remuneration for fiscal year 2023 Board of Directors Introduction The remuneration awarded to the Board of Directors for fiscal year 2023 is within the limits approved at the 2022 Annual / Extraordinary General Meetings of Shareholders and the 2023 Annual General Meeting of Shareholders, respectively. Remuneration period AGM 2022 – AGM 2023 AGM 2023 – AGM 2024 Approved by GM (TCHF) Total compen- sation* (TCHF) 8,850.0 11,000.0 7,597.5 9,915.1 * Reconciled between reported Board compensation for fiscal years 2022 and 2023 and corresponding compensation from one AGM to the next. The reconciliation for the time period January 1 to the AGM 2024 (on May 15) assumes no changes in the composition of the Board of Directors and Com- mittees compared to year-end 2023. In order to ensure their independence in performing their supervisory function, non-executive members of the Board of Directors receive a fixed remuneration in cash only. Board fees (gross) Chairman of the Board Board member Additional fees (gross) Lead Independent Director Chair Audit Committee Chair Remuneration Committee Chair Nomination Committee Chair ESG Committee Chair Strategy and Integration Committee* Committee member (TCHF) 2,010.5 250.0 (TCHF) 100.0 100.0 75.0 75.0 75.0 0.0 50.0 * The Strategy and Integration Committee is chaired by the Chairman of the Board of Directors, who does not receive separate compensation for this role. The Executive Chairman of the Board of Directors may receive an annual bonus based on performance criteria (target bonus at 150 % of fixed fee, with maximum cap at 133¹⁄ ³ % of the target). Summary of remuneration system for the Global Executive Committee in 2023 Remuneration for fiscal year 2023 Global Executive Committee The remuneration of the Global Executive Committee emphazises pay- for-performance and consists of fixed and variable elements. The base salary and other benefits form the fixed remuneration. The remuneration awarded to the Global Executive Committee for fiscal year 2023 is within the limits approved at the 2023 Annual General Meeting of Shareholders. Variable remuneration drives and rewards best-in-class performance based on ambitious and stretched targets. It is based on short-term and long-term objectives and includes absolute as well as relative performance targets. The variable remuneration consists of an annual cash bonus and a grant of performance share units (PSU). Base salary Pay for the position Benefits Cover retirement, death and disability risks, allowances in kind Annual cash bonus Drive and reward annual performance PSU plan Drive and reward long-term performance, align with shareholders’ interests, 3-years performance period Remuneration period Approved by AGM (TCHF) Total compensation (TCHF) progression. Fiscal year 2023 49,500.0 40,049.8 The total remuneration amount reflects compensation to 13 GEC members ac- tive during fiscal year 2023, excluding one former GEC member. Annual bonus for fiscal year 2023 The total combined achievement percentage for the three targets CORE Turnover, CORE EBITDA and Equity Free Cash Flow was 122.6 %. The max- imum payout corresponds to 133¹⁄ % for the CEO and between 100% and ³ 130% for the other members of the Global Executive Committee. PSU grant and vesting in fiscal year 2023 The grant value of the PSU awarded in 2023 amounts to 40 % of the total compensation for FY 2023. No PSU were awarded in FY 2020, and therefore no PSU vested in FY 2023. Remuneration policy and principles Remuneration governance In order to ensure the company’s sustainable success, it is critical to attract, develop and retain the right talents. Avolta’s remuneration programs are designed to support this fundamental objective and are based on the following principles: – Pay-for-performance; – Shareholder interests; – Competitiveness; – Transparency. – Authority for decisions related to remuneration are governed by the Articles of Incorporation and the Board Regulations of Avolta AG. – The maximum aggregate amounts of remuneration of the Board of Directors and of the Global Executive Committee are subject to binding votes at the AGM. – In addition, the Remuneration Report for the preceding period is sub- ject to a consultative vote at the AGM. – The Board of Directors is supported by the Remuneration Committee in preparing all remuneration-related decisions regarding the Board of Directors and the Global Executive Committee. seqq. of the Swiss Code of Obligations, item 5 of the Annex to the Corporate Governance Directive (DCG) of In 2023, Dufry AG changed its corporate name to Avolta SIX Exchange Regulation governing disclosure of remu- AG to reflect the Dufry and Autogrill combination that neration systems and remuneration paid to members of became effective during the reporting year. At the the Board of Directors and the Global Executive Extraordinary General Meeting of Shareholders held on Committee, and the principles of the Swiss Code of Best November 3, 2023, the shareholders approved the Practice for Corporate Governance of economiesuisse. change in the Company’s name to Avolta AG from formerly Dufry AG. Unifying the travel retail and The Remuneration Report will be submitted to the Annual food & beverage (F&B) businesses under the single name General Meeting of Shareholders on May 15, 2024 for a Avolta was one of the many steps in an already effective consultative vote. integration. The new corporate name Avolta reinforces our long-term vision for the Group and is also part of the “Destination 2027” strategy. For more details on our oper- ations and our business strategy please refer to section Vision & Strategy of this Annual Report. Avolta’s long-term success depends on our continued Remuneration Governance Articles of Incorporation and shareholders ability to attract, motivate and retain outstanding individ- Avolta’s Articles of Incorporation contain specific provi- uals at all levels of the Company, who will ensure that we sions on remuneration. The Articles of Incorporation, and can successfully execute our new strategy as well as any amendments thereof, are subject to approval by the further expand our market position as a global leading General Meeting of Shareholders. The remuneration travel experience player. We want to remain solidly provisions include rules concerning the election, the financed with a healthy balance sheet, strong profitability constitution and the powers of the Remuneration and sustainable cash flows. We will also continue to be a Committee (Art. 17 and 18); the approval of remuneration reliable employer, and offer a working environment where by the General Meeting of Shareholders (Art. 20); the our employees feel well respected and valued. In order to supplementary amount in case of changes on the Global achieve these goals, we continue to provide appropriate Executive Committee (Art. 21); the general remuneration and competitive remuneration to our employees and to principles (Art. 22); the agreements with members of the support their development and focus on their career Board of Directors and the Global Executive Committee (Art. 23) as well as the maximum number of mandates outside the company that a member of the Board of Our executive compensation system is strongly aligned Directors or the Global Executive Committee may hold with the strategy of being a high-performing organiza- (Art. 24 and 25). The Articles of Incorporation are available tion, taking into account the short-term and long-term on the Company website under: objectives of our business. Compensation is reviewed on www.avoltaworld.com/en/investors/corporate-governance an annual basis, focusing on internal and external require- ments, increased complexities of the business and Pursuant to Avolta’s Articles of Incorporation, the General company structure, as well as responsibilities of the indi- Meeting of Shareholders has to approve the proposal of vidual members of the Global Executive Committee. the Board of Directors in relation to the maximum aggre- Avolta operates a short-term annual bonus structure with gate amounts of remuneration for the Board of Directors financial performance targets, and a long-term incentive for the period until the next Annual General Meeting of plan, which includes a mix of absolute and relative as well Shareholders and the Global Executive Committee for the as financial and non-financial performance targets over a following fiscal year. The votes on these maximum aggre- three-year period. All performance targets for the short- gate amounts of remuneration have a binding effect. term as well as the long-term incentives are pre-defined. Thereafter, the decision authority on the individual remu- neration of the members of the Board of Directors and The current Remuneration Report describes our remu- the Global Executive Committee (within the limits neration principles and programs, as well as the gover- approved by the General Meeting of Shareholders) is with nance framework related to the remuneration of the the Board of Directors. In addition, the Remuneration Board of Directors and the Global Executive Committee. Report is submitted to the Annual General Meeting of The report also provides information on the remuneration Shareholders for an advisory vote on a yearly basis, so paid to the members of the Board of Directors and the that shareholders can express their opinion on the remu- Global Executive Committee for fiscal year 2023. The neration policy and programs. report is prepared in accordance with Articles 734 et Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 315/336 Remuneration at a glance Summary of remuneration system for the Board of Directors in 2023 Remuneration for fiscal year 2023 Board of Directors Introduction In order to ensure their independence in performing their supervisory The remuneration awarded to the Board of Directors for fiscal year 2023 function, non-executive members of the Board of Directors receive a is within the limits approved at the 2022 Annual / Extraordinary General fixed remuneration in cash only. Meetings of Shareholders and the 2023 Annual General Meeting of Shareholders, respectively. Remuneration period AGM 2022 – AGM 2023 AGM 2023 – AGM 2024 Approved by GM (TCHF) Total compen- sation* (TCHF) 8,850.0 11,000.0 7,597.5 9,915.1 * Reconciled between reported Board compensation for fiscal years 2022 and 2023 and corresponding compensation from one AGM to the next. The reconciliation for the time period January 1 to the AGM 2024 (on May 15) assumes no changes in the composition of the Board of Directors and Com- mittees compared to year-end 2023. Board fees (gross) Chairman of the Board Board member Additional fees (gross) Lead Independent Director Chair Audit Committee Chair Remuneration Committee Chair Nomination Committee Chair ESG Committee Chair Strategy and Integration Committee* Committee member (TCHF) 2,010.5 250.0 (TCHF) 100.0 100.0 75.0 75.0 75.0 0.0 50.0 * The Strategy and Integration Committee is chaired by the Chairman of the Board of Directors, who does not receive separate compensation for this role. The Executive Chairman of the Board of Directors may receive an annual bonus based on performance criteria (target bonus at 150 % of fixed fee, with maximum cap at 133¹⁄ % of the target). ³ Summary of remuneration system for the Global Executive Committee in 2023 Remuneration for fiscal year 2023 Global Executive Committee The remuneration of the Global Executive Committee emphazises pay- The remuneration awarded to the Global Executive Committee for fiscal for-performance and consists of fixed and variable elements. The base year 2023 is within the limits approved at the 2023 Annual General salary and other benefits form the fixed remuneration. Meeting of Shareholders. Variable remuneration drives and rewards best-in-class performance based on ambitious and stretched targets. It is based on short-term and Remuneration period long-term objectives and includes absolute as well as relative Approved Total compensation by AGM (TCHF) (TCHF) performance targets. The variable remuneration consists of an annual Fiscal year 2023 49,500.0 40,049.8 cash bonus and a grant of performance share units (PSU). The total remuneration amount reflects compensation to 13 GEC members ac- tive during fiscal year 2023, excluding one former GEC member. Base salary Pay for the position Benefits allowances in kind Annual bonus for fiscal year 2023 Cover retirement, death and disability risks, Annual cash bonus Drive and reward annual performance Drive and reward long-term performance, align with shareholders’ interests, PSU plan 3-years performance period The total combined achievement percentage for the three targets CORE Turnover, CORE EBITDA and Equity Free Cash Flow was 122.6 %. The max- imum payout corresponds to 133¹⁄ % for the CEO and between 100% and 130% for the other members of the Global Executive Committee. ³ PSU grant and vesting in fiscal year 2023 The grant value of the PSU awarded in 2023 amounts to 40 % of the total compensation for FY 2023. No PSU were awarded in FY 2020, and therefore no PSU vested in FY 2023. – Authority for decisions related to remuneration are governed by the Articles of Incorporation and the Board Regulations of Avolta AG. – The maximum aggregate amounts of remuneration of the Board of Directors and of the Global Executive Committee are subject to binding votes at the AGM. – In addition, the Remuneration Report for the preceding period is sub- ject to a consultative vote at the AGM. – The Board of Directors is supported by the Remuneration Committee in preparing all remuneration-related decisions regarding the Board of Directors and the Global Executive Committee. Remuneration policy and principles Remuneration governance In order to ensure the company’s sustainable success, it is critical to attract, develop and retain the right talents. Avolta’s remuneration programs are designed to support this fundamental objective and are based on the following principles: – Pay-for-performance; – Shareholder interests; – Competitiveness; – Transparency. In 2023, Dufry AG changed its corporate name to Avolta AG to reflect the Dufry and Autogrill combination that became effective during the reporting year. At the Extraordinary General Meeting of Shareholders held on November 3, 2023, the shareholders approved the change in the Company’s name to Avolta AG from formerly Dufry AG. Unifying the travel retail and food & beverage (F&B) businesses under the single name Avolta was one of the many steps in an already effective integration. The new corporate name Avolta reinforces our long-term vision for the Group and is also part of the “Destination 2027” strategy. For more details on our oper- ations and our business strategy please refer to section Vision & Strategy of this Annual Report. Avolta’s long-term success depends on our continued ability to attract, motivate and retain outstanding individ- uals at all levels of the Company, who will ensure that we can successfully execute our new strategy as well as further expand our market position as a global leading travel experience player. We want to remain solidly financed with a healthy balance sheet, strong profitability and sustainable cash flows. We will also continue to be a reliable employer, and offer a working environment where our employees feel well respected and valued. In order to achieve these goals, we continue to provide appropriate and competitive remuneration to our employees and to support their development and focus on their career progression. Our executive compensation system is strongly aligned with the strategy of being a high-performing organiza- tion, taking into account the short-term and long-term objectives of our business. Compensation is reviewed on an annual basis, focusing on internal and external require- ments, increased complexities of the business and company structure, as well as responsibilities of the indi- vidual members of the Global Executive Committee. Avolta operates a short-term annual bonus structure with financial performance targets, and a long-term incentive plan, which includes a mix of absolute and relative as well as financial and non-financial performance targets over a three-year period. All performance targets for the short- term as well as the long-term incentives are pre-defined. The current Remuneration Report describes our remu- neration principles and programs, as well as the gover- nance framework related to the remuneration of the Board of Directors and the Global Executive Committee. The report also provides information on the remuneration paid to the members of the Board of Directors and the Global Executive Committee for fiscal year 2023. The report is prepared in accordance with Articles 734 et seqq. of the Swiss Code of Obligations, item 5 of the Annex to the Corporate Governance Directive (DCG) of SIX Exchange Regulation governing disclosure of remu- neration systems and remuneration paid to members of the Board of Directors and the Global Executive Committee, and the principles of the Swiss Code of Best Practice for Corporate Governance of economiesuisse. The Remuneration Report will be submitted to the Annual General Meeting of Shareholders on May 15, 2024 for a consultative vote. Remuneration Governance Articles of Incorporation and shareholders Avolta’s Articles of Incorporation contain specific provi- sions on remuneration. The Articles of Incorporation, and any amendments thereof, are subject to approval by the General Meeting of Shareholders. The remuneration provisions include rules concerning the election, the constitution and the powers of the Remuneration Committee (Art. 17 and 18); the approval of remuneration by the General Meeting of Shareholders (Art. 20); the supplementary amount in case of changes on the Global Executive Committee (Art. 21); the general remuneration principles (Art. 22); the agreements with members of the Board of Directors and the Global Executive Committee (Art. 23) as well as the maximum number of mandates outside the company that a member of the Board of Directors or the Global Executive Committee may hold (Art. 24 and 25). The Articles of Incorporation are available on the Company website under: www.avoltaworld.com/en/investors/corporate-governance Pursuant to Avolta’s Articles of Incorporation, the General Meeting of Shareholders has to approve the proposal of the Board of Directors in relation to the maximum aggre- gate amounts of remuneration for the Board of Directors for the period until the next Annual General Meeting of Shareholders and the Global Executive Committee for the following fiscal year. The votes on these maximum aggre- gate amounts of remuneration have a binding effect. Thereafter, the decision authority on the individual remu- neration of the members of the Board of Directors and the Global Executive Committee limits approved by the General Meeting of Shareholders) is with the Board of Directors. In addition, the Remuneration Report is submitted to the Annual General Meeting of Shareholders for an advisory vote on a yearly basis, so that shareholders can express their opinion on the remu- neration policy and programs. (within the Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 316/336 Remuneration Committee Member of the Board of Directors Board member since In the Remuneration Committee since Luis Maroto Camino Enrico Laghi 1 Joaquín Moya-Angeler Cabrera Eugenia M. Ulasewicz 2019 2023 2021 2021 2021 2023 2021 2021 1 Enrico Laghi was elected as member of the Board of Directors and of the Remuneration Committee at the Extraordinary General Meeting on August 31, 2022. His election was subject to, and became effective upon, the completion of the share transfer of the Autogrill shares indirectly held by Edizione S.p.A. to Dufry, which occurred on February 3, 2023. Board of Directors and Remuneration Committee Based on Avolta’s Articles of Incorporation and applicable law, the Board of Directors has the overall responsibility for defining the remuneration policy of the Group, as well as the general terms and conditions of employment for members of the Global Executive Committee. It approves the individual remuneration of the members of the Board of Directors and the Global Executive Committee (within the limits approved by the General Meeting of Share- holders). The Remuneration Committee supports the Board of Directors in fulfilling all remuneration related duties. As of December 31, 2023, the Remuneration Committee consisted of four independent and non-executive members of the Board of Directors. The Annual General Meeting individually re-elected Ms. Eugenia M. Ulasewicz, Mr. Enrico Laghi, Mr. Luis Maroto Camino and Mr. Joaquín Moya-Angeler Cabrera as members of the Remuneration Committee for a term of office until completion of the next AGM in 2024. Luis Maroto Camino was appointed as Chairman of the Remuneration Committee. The Remuneration Committee has the following powers and duties: – Review and assess the remuneration system of the Company and the Group (including the management incentive plans) and make proposals in connection thereto to the Board of Directors; – Make recommendations regarding the proposals of the Board of Directors for the maximum aggregate amount of compensation of the Board of Directors and the Global Executive Committee to be submitted to the General Meeting of Shareholders for approval; – Make proposals in relation to the remuneration package of the CEO and the members of the Board of Directors; – Make proposals on the grant of options or other securities under any management incentive plan of the Company; – Review and recommend to the Board of Directors the Remuneration Report; – Review and propose for approval to the Board of Directors the remuneration for the members of the Global Executive Committee other than the CEO upon proposal by the CEO. The CEO's remuneration is determined by the Remuneration Committee and submitted to the full Board of Directors for approval. The Remuneration Committee discusses the annual compensation of the members of the Board of Directors (board fees, committee fees, target bonus for the Chairman) in separate meetings. The Chairman of the Board of Directors and the CEO usually participate in these meetings without any voting rights and they leave the room when their own compensation is being discussed. The Remuneration Committee submits its proposals to the full Board of Directors annually and the Board of Directors decides collectively on the remunera- tion of its members with all Board members being present during the discussion. The Remuneration Committee meets as often as busi- ness requires but at least four times annually. The Chairman of the Remuneration Committee reports to the Board of Directors after each meeting on the activities of the committee. The minutes of the committee meetings are being made available to all members of the Board of Directors. In the reporting year, the Remuneration Committee held 5 meetings. The duration of the meetings ranged from 1 to 2 hours. The attendance ratio was 100 % in fiscal year 2023. The Remuneration Committee may decide to consult external advisors. In fiscal year 2023, Homburger AG, Decision authorities Levels of authority Remuneration policy and principles Maximum aggregate remuneration amount for the Board of Directors Remuneration of the Board Chairman Individual remuneration of the Board members Maximum aggregate remuneration amount for the Global Executive Committee Remuneration of the CEO Individual remuneration of the other members of the Global Executive Committee Remuneration Report * Within the overall limits approved by the General Meeting of Shareholders. CEO Remuneration Committee Board of Directors AGM Proposes Approves Proposes Proposes Proposes Proposes Proposes Reviews and Approves proposes (binding vote) Approves* Approves* Approves* Reviews and Approves proposes (binding vote) Proposes to Remuneration Committtee Proposes Approves* Proposes Approves vote Consultative PricewaterhouseCoopers AG (PwC) and Obermatt AG the business, demographic size of employee base and were consulted for specific remuneration matters. Other complexity of the industry. The list of companies in 2023 divisions of PwC provided services as Tax and HR advi- included ABB, Adecco, Barry Callebaut, Clariant, Ems- sors for other internal projects. Homburger provided Chemie, Geberit, Georg Fischer, Holcim, Lindt, Lonza, further services as legal advisors. Obermatt did not have Nestlé, Novartis, Richemont, Roche, Sika, Sonova, Strau- any other mandate for Avolta. mann, Swatch Group and Swisscom. The peers remained the same as in previous years, as the selected compar- For further details regarding the responsibilities of the ison criteria are still valid for the fiscal year 2023. Remuneration Committee and the meetings held in fiscal year 2023 please refer to section 3.5 Internal Organiza- tional Structure of the Corporate Governance Report. Method for determining remuneration and benchmarking Remuneration of the Board of Directors Remuneration principles Avolta reviews the remuneration of the Global Executive The remuneration of the members of the Board of Direc- Committee members annually to ensure that it remains tors is designed to attract and retain highly qualified indi- competitive to attract and retain talent in the evolving viduals to serve on the Board of Directors. The Board of context in which the company operates, including by Directors determines the amount of remuneration of its applying peer group benchmarking. The last review in members, taking into account their responsibilities, expe- regards to the remuneration of the Global Executive rience and the time they invest in their activity as Committee members was conducted in fiscal year 2023, members of the Board of Directors. using third party remuneration survey data (including Mercer Executive Compensation data) and publicly disclosed information from other listed companies. The peer group for compensation benchmarking includes Remuneration system SMI and SMIM companies, as those represent the peers Non-executive board members with which the Company competes when it comes to To safeguard their independence in exercising their attracting and maintaining key talent for its global busi- supervisory duties, the non-executive members of the ness. The selection of peer group companies takes into Board of Directors receive a fixed cash remuneration only consideration other factors such as geographic spread of and do not participate in Avolta’s employee benefits Member of the Board of Directors Board member since In the Remuneration Committee since Remuneration Committee Luis Maroto Camino Enrico Laghi 1 Joaquín Moya-Angeler Cabrera Eugenia M. Ulasewicz 2019 2023 2021 2021 2021 2023 2021 2021 1 Enrico Laghi was elected as member of the Board of Directors and of the Remuneration Committee at the Extraordinary General Meeting on August 31, 2022. His election was subject to, and became effective upon, the completion of the share transfer of the Autogrill shares indirectly held by Edizione S.p.A. to Dufry, which occurred on February 3, 2023. Board of Directors and Remuneration Committee – Make proposals on the grant of options or other securities under any management incentive plan of the Company; Based on Avolta’s Articles of Incorporation and applicable – Review and recommend to the Board of Directors the law, the Board of Directors has the overall responsibility Remuneration Report; for defining the remuneration policy of the Group, as well – Review and propose for approval to the Board of as the general terms and conditions of employment for Directors the remuneration for the members of the members of the Global Executive Committee. It approves Global Executive Committee other than the CEO the individual remuneration of the members of the Board upon proposal by the CEO. The CEO's remuneration of Directors and the Global Executive Committee (within is determined by the Remuneration Committee and the limits approved by the General Meeting of Share- submitted to the full Board of Directors for approval. holders). The Remuneration Committee supports the Board of Directors in fulfilling all remuneration related The Remuneration Committee discusses the annual duties. compensation of the members of the Board of Directors (board fees, committee fees, target bonus for the As of December 31, 2023, the Remuneration Committee Chairman) in separate meetings. The Chairman of the consisted of four independent and non-executive Board of Directors and the CEO usually participate in members of the Board of Directors. The Annual General these meetings without any voting rights and they leave Meeting individually re-elected Ms. Eugenia M. Ulasewicz, the room when their own compensation is being Mr. Enrico Laghi, Mr. Luis Maroto Camino and Mr. Joaquín discussed. The Remuneration Committee submits its Moya-Angeler Cabrera as members of the Remuneration proposals to the full Board of Directors annually and the Committee for a term of office until completion of the Board of Directors decides collectively on the remunera- next AGM in 2024. Luis Maroto Camino was appointed as tion of its members with all Board members being present Chairman of the Remuneration Committee. during the discussion. The Remuneration Committee has the following powers The Remuneration Committee meets as often as busi- and duties: ness requires but at least four times annually. The – Review and assess the remuneration system of the Chairman of the Remuneration Committee reports to the Company and the Group (including the management Board of Directors after each meeting on the activities of incentive plans) and make proposals in connection the committee. The minutes of the committee meetings thereto to the Board of Directors; are being made available to all members of the Board of – Make recommendations regarding the proposals of Directors. the Board of Directors for the maximum aggregate amount of compensation of the Board of Directors In the reporting year, the Remuneration Committee held and the Global Executive Committee to be submitted 5 meetings. The duration of the meetings ranged from 1 to the General Meeting of Shareholders for approval; to 2 hours. The attendance ratio was 100 % in fiscal year – Make proposals in relation to the remuneration 2023. package of the CEO and the members of the Board of Directors; The Remuneration Committee may decide to consult external advisors. In fiscal year 2023, Homburger AG, Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 317/336 Decision authorities Levels of authority Remuneration policy and principles Maximum aggregate remuneration amount for the Board of Directors Remuneration of the Board Chairman Individual remuneration of the Board members Maximum aggregate remuneration amount for the Global Executive Committee Remuneration of the CEO Individual remuneration of the other members of the Global Executive Committee Remuneration Report * Within the overall limits approved by the General Meeting of Shareholders. CEO Remuneration Committee Board of Directors AGM Proposes Approves Proposes Proposes Proposes Proposes Proposes Reviews and proposes Approves (binding vote) Approves* Approves* Reviews and proposes Approves (binding vote) Approves* Proposes Approves* Proposes Approves Consultative vote Proposes to Remuneration Committtee PricewaterhouseCoopers AG (PwC) and Obermatt AG were consulted for specific remuneration matters. Other divisions of PwC provided services as Tax and HR advi- sors for other internal projects. Homburger provided further services as legal advisors. Obermatt did not have any other mandate for Avolta. For further details regarding the responsibilities of the Remuneration Committee and the meetings held in fiscal year 2023 please refer to section 3.5 Internal Organiza- tional Structure of the Corporate Governance Report. Method for determining remuneration and benchmarking Avolta reviews the remuneration of the Global Executive Committee members annually to ensure that it remains competitive to attract and retain talent in the evolving context in which the company operates, including by applying peer group benchmarking. The last review in regards to the remuneration of the Global Executive Committee members was conducted in fiscal year 2023, using third party remuneration survey data (including Mercer Executive Compensation data) and publicly disclosed information from other listed companies. The peer group for compensation benchmarking includes SMI and SMIM companies, as those represent the peers with which the Company competes when it comes to attracting and maintaining key talent for its global busi- ness. The selection of peer group companies takes into consideration other factors such as geographic spread of the business, demographic size of employee base and complexity of the industry. The list of companies in 2023 included ABB, Adecco, Barry Callebaut, Clariant, Ems- Chemie, Geberit, Georg Fischer, Holcim, Lindt, Lonza, Nestlé, Novartis, Richemont, Roche, Sika, Sonova, Strau- mann, Swatch Group and Swisscom. The peers remained the same as in previous years, as the selected compar- ison criteria are still valid for the fiscal year 2023. Remuneration of the Board of Directors Remuneration principles The remuneration of the members of the Board of Direc- tors is designed to attract and retain highly qualified indi- viduals to serve on the Board of Directors. The Board of Directors determines the amount of remuneration of its members, taking into account their responsibilities, expe- rience and the time they invest in their activity as members of the Board of Directors. Remuneration system Non-executive board members To safeguard their independence in exercising their supervisory duties, the non-executive members of the Board of Directors receive a fixed cash remuneration only and do not participate in Avolta’s employee benefits Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 318/336 plans. Remuneration of the non-executive members of the Board of Directors is not tied to particular perfor- mance targets. The remuneration of the non-executive members of the Board of Directors consists of an annual Board fee of TCHF 250.0. The functions of Honorary Chairman or Vice-Chairman of the Board of Directors do not receive a separate remuneration for this role. The function of the Lead Independent Director is remunerated with an addi- tional amount of TCHF 100.0 p.a. The Chair of the Audit Committee is remunerated with TCHF 100.0 p.a. In fiscal year 2023, the former Nomination and ESG Committee was split given the importance of ESG matters that are an integral part of our strategy. The Chairs of the Nomination Committee, the ESG Committee and the Remuneration Committee are each remunerated with TCHF 75.0 p.a. The newly formed Strategy and Integration Committee is chaired by the Chairman of the Board of Directors, without separate remuneration for his role on this Committee. Committee members receive an additional remuneration of TCHF 50 p.a. (on all the Committees). The remuneration of the members of the Board of Direc- tors is paid quarterly and may be subject to regular social security contributions, depending on the citizenship and residence country of each Board member. Executive Chairman The Chairman of the Board of Directors, who is intensely involved with the Company’s management, is considered an executive Chairman. As in previous years, the Executive Chairman receives a fixed remuneration of TCHF 2,010.5 and is eligible for a performance bonus. The performance bonus at target was raised in fiscal year 2023 to 150 % of the fixed remu- neration and the payout cap set at 133 ¹⁄³ % of target (2022: 130 % of the fixed remuneration) to reflect the increased size and complexity of the combined Avolta Group. In his executive role, a substantial amount of his time is devoted to the Company’s operations where he works very closely with the CEO to pursue value-enhancing initiatives including strategically joint ventures or acquisitions, and relationships with key current or future shareholders, and initiatives strength- ening the Company’s partnerships with governments and key landlords. He also supports re-financing activities and capital markets transactions of the Company. important relationships, The bonus in 2023 was based on the same three metrics as the annual bonus for the members of the Global Exec- utive Committee: CORE Turnover, CORE EBITDA and Equity Free Cash Flow with a 33 ¹⁄³ % weight per metric (2022: bonus based on Turnover and Equity Free Cash Remuneration structure of the Board of Directors Position / Responsibility Chairman of the Board of Directors Honorary Chairman / Vice-Chairman Lead Independent Director 1 Member of the Board of Directors Chair of the Audit Committee 1 Chair of the Remuneration Committee 1 Chair of the Nomination and ESG Committee 1, 2 Chair of the Nomination Committee 1, 2 Chair of the ESG Committee 1, 2 Chair of the Strategy and Integration Committee 3 Member of Committee 1 Fees mentioned in the table are gross amounts. Annual Fee in 2023 in TCHF Annual Fee in 2022 in TCHF 2,010.5 2,010.5 no additional fee 100.0 250.0 100.0 75.0 n/a 75.0 75.0 no additional fee 50.0 n/a 100.0 250.0 100.0 75.0 100.0 n/a n/a n/a 50.0 1 The fees mentioned for the position of Lead Independent Director, Chair or Membership of a Committee are in addition to the annual board fee as member of the Board of Directors. 2 In 2023, the functions of the previous Nomination and ESG Committee were spit into two separate committees. 3 The Chair of the Strategy and Integration Committee is not separately compensated, as this role is held by the Chairman of the Board of Directors. Flow with a 50 % weight per metric). No payout occurs if The increase in remuneration by 26 % compared with the the performance is not at least 75 % of the combined set previous year is mainly due to a higher number of Board target. The Chairman’s bonus can be paid either in cash and Committee members, the performance bonus for or in an equivalent number of shares allocated to him, or the Executive Chairman, and the establishment of two as a mix of the two. The Board of Directors decided that additional Board Committees (new Strategy and Integra- the bonus for the Executive Chairman for fiscal year 2023 tion Committee and the former Nomination and ESG will be paid in cash (2022: in cash). The fixed remuneration Committee being split into two separate Committees). is paid quarterly, and the bonus is paid out during the second quarter of the following year. Remuneration of the Board of Directors for fiscal year 2023 Other remuneration, loans or credit facilities (audited) For fiscal years 2023 and 2022, no other remuneration (other than mentioned in the table on page 320) was paid directly or indirectly to current or former members of the The table on page 320 and further text on other remuner- Board of Directors or to their related parties. No member ation, loans and credit facilities (marked “audited”) are of the Board of Directors or their related parties were audited according to Article 728a para. 1 no. 4 of the granted a loan or a credit facility during the reporting Swiss Code of Obligations. years. There was no loan or credit facility outstanding at the end of the reporting years to any member of the Board of Directors or their related parties. Summary of remuneration in fiscal years 2023 and 2022 The annual base fee of the members of the Board of Directors remained unchanged compared with the previous year. The Executive Chairman of the Board of Directors received a fixed fee of TCHF 2,010.5 (2022: TCHF 2,010.5) and a performance bonus of TCHF 3,698.5 (2022: TCHF 2,613.6) in cash. The fixed Board fee for the Reconciliation between the reported Board remuneration for fiscal year 2023 and the remuneration amount approved by the AGM for the period from AGM 2023 until AGM 2024 Executive Chairman’s position was last increased in 2017 The AGM 2023 approved a maximum aggregate and has remained unchanged ever since. The perfor- amount of remuneration of the Board of Directors of mance bonus opportunity was increased as explained CHF 11.0 million for the term of office from the AGM above and the bonus granted amounted to 184 % of the 2023 to the AGM 2024 (CHF 8.85 million from AGM annual fixed fee (2022: 130 %). For information of Avolta’s 2022 to AGM 2023). The AGM 2023 approved the performance in fiscal year 2023, which was relevant for proposal of the Board of Directors with 97.24 % of the the performance bonus of the Executive Chairman as well votes represented. The table on page 320 shows the as the annual bonus of the Global Executive Committee reconciliation between the reported Board remunera- (identical metrics of CORE Turnover, CORE EBITDA and tion for fiscal year 2023 and the amount approved by Equity Free Cash Flow), please refer to the letter of the the shareholders at the AGM 2023. CFO with details on the financial performance on page 150. During fiscal year 2023 Avolta’s Board of Directors was enlarged to 12 members as at December 31, 2023 compared with 9 members as at December 31, 2022 in connection with increased scope and complexity of the combined group following the Dufry / Autogrill business combination and increased expertise required on the Board of Directors. The remuneration of the members of the Board of Directors for both fiscal years 2023 and 2022 is shown in the remuneration table on page 320 and reflects the period from January 1 until December 31. plans. Remuneration of the non-executive members of Executive Chairman the Board of Directors is not tied to particular perfor- The Chairman of the Board of Directors, who is intensely mance targets. involved with the Company’s management, is considered an executive Chairman. The remuneration of the non-executive members of the Board of Directors consists of an annual Board fee of As in previous years, the Executive Chairman receives a TCHF 250.0. The functions of Honorary Chairman or fixed remuneration of TCHF 2,010.5 and is eligible for a Vice-Chairman of the Board of Directors do not receive a performance bonus. The performance bonus at target separate remuneration for this role. The function of the was raised in fiscal year 2023 to 150 % of the fixed remu- Lead Independent Director is remunerated with an addi- tional amount of TCHF 100.0 p.a. The Chair of the Audit neration and the payout cap set at 133 ¹⁄³ % of target (2022: 130 % of the fixed remuneration) to reflect the increased Committee is remunerated with TCHF 100.0 p.a. In fiscal size and complexity of the combined Avolta Group. In his year 2023, the former Nomination and ESG Committee executive role, a substantial amount of his time is devoted was split given the importance of ESG matters that are an to the Company’s operations where he works very closely integral part of our strategy. The Chairs of the Nomination with the CEO to pursue value-enhancing initiatives Committee, the ESG Committee and the Remuneration including strategically important relationships, joint Committee are each remunerated with TCHF 75.0 p.a. ventures or acquisitions, and relationships with key The newly formed Strategy and Integration Committee is current or future shareholders, and initiatives strength- chaired by the Chairman of the Board of Directors, ening the Company’s partnerships with governments and without separate remuneration for his role on this key landlords. He also supports re-financing activities and Committee. Committee members receive an additional capital markets transactions of the Company. remuneration of TCHF 50 p.a. (on all the Committees). The remuneration of the members of the Board of Direc- as the annual bonus for the members of the Global Exec- tors is paid quarterly and may be subject to regular social utive Committee: CORE Turnover, CORE EBITDA and security contributions, depending on the citizenship and residence country of each Board member. Equity Free Cash Flow with a 33 ¹⁄³ % weight per metric (2022: bonus based on Turnover and Equity Free Cash The bonus in 2023 was based on the same three metrics Remuneration structure of the Board of Directors Position / Responsibility Chairman of the Board of Directors Honorary Chairman / Vice-Chairman Lead Independent Director 1 Member of the Board of Directors Chair of the Audit Committee 1 Chair of the Remuneration Committee 1 Chair of the Nomination and ESG Committee 1, 2 Chair of the Nomination Committee 1, 2 Chair of the ESG Committee 1, 2 Member of Committee 1 Fees mentioned in the table are gross amounts. as member of the Board of Directors. Chair of the Strategy and Integration Committee 3 no additional fee 1 The fees mentioned for the position of Lead Independent Director, Chair or Membership of a Committee are in addition to the annual board fee 2 In 2023, the functions of the previous Nomination and ESG Committee were spit into two separate committees. 3 The Chair of the Strategy and Integration Committee is not separately compensated, as this role is held by the Chairman of the Board of Directors. Annual Fee in 2023 Annual Fee in 2022 in TCHF in TCHF 2,010.5 2,010.5 no additional fee 100.0 250.0 100.0 75.0 n/a 75.0 75.0 50.0 n/a 100.0 250.0 100.0 75.0 100.0 n/a n/a n/a 50.0 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 319/336 The increase in remuneration by 26 % compared with the previous year is mainly due to a higher number of Board and Committee members, the performance bonus for the Executive Chairman, and the establishment of two additional Board Committees (new Strategy and Integra- tion Committee and the former Nomination and ESG Committee being split into two separate Committees). Other remuneration, loans or credit facilities (audited) For fiscal years 2023 and 2022, no other remuneration (other than mentioned in the table on page 320) was paid directly or indirectly to current or former members of the Board of Directors or to their related parties. No member of the Board of Directors or their related parties were granted a loan or a credit facility during the reporting years. There was no loan or credit facility outstanding at the end of the reporting years to any member of the Board of Directors or their related parties. Reconciliation between the reported Board remuneration for fiscal year 2023 and the remuneration amount approved by the AGM for the period from AGM 2023 until AGM 2024 The AGM 2023 approved a maximum aggregate amount of remuneration of the Board of Directors of CHF 11.0 million for the term of office from the AGM 2023 to the AGM 2024 (CHF 8.85 million from AGM 2022 to AGM 2023). The AGM 2023 approved the proposal of the Board of Directors with 97.24 % of the votes represented. The table on page 320 shows the reconciliation between the reported Board remunera- tion for fiscal year 2023 and the amount approved by the shareholders at the AGM 2023. Flow with a 50 % weight per metric). No payout occurs if the performance is not at least 75 % of the combined set target. The Chairman’s bonus can be paid either in cash or in an equivalent number of shares allocated to him, or as a mix of the two. The Board of Directors decided that the bonus for the Executive Chairman for fiscal year 2023 will be paid in cash (2022: in cash). The fixed remuneration is paid quarterly, and the bonus is paid out during the second quarter of the following year. Remuneration of the Board of Directors for fiscal year 2023 The table on page 320 and further text on other remuner- ation, loans and credit facilities (marked “audited”) are audited according to Article 728a para. 1 no. 4 of the Swiss Code of Obligations. Summary of remuneration in fiscal years 2023 and 2022 The annual base fee of the members of the Board of Directors remained unchanged compared with the previous year. The Executive Chairman of the Board of Directors received a fixed fee of TCHF 2,010.5 (2022: TCHF 2,010.5) and a performance bonus of TCHF 3,698.5 (2022: TCHF 2,613.6) in cash. The fixed Board fee for the Executive Chairman’s position was last increased in 2017 and has remained unchanged ever since. The perfor- mance bonus opportunity was increased as explained above and the bonus granted amounted to 184 % of the annual fixed fee (2022: 130 %). For information of Avolta’s performance in fiscal year 2023, which was relevant for the performance bonus of the Executive Chairman as well as the annual bonus of the Global Executive Committee (identical metrics of CORE Turnover, CORE EBITDA and Equity Free Cash Flow), please refer to the letter of the CFO with details on the financial performance on page 150. During fiscal year 2023 Avolta’s Board of Directors was enlarged to 12 members as at December 31, 2023 compared with 9 members as at December 31, 2022 in connection with increased scope and complexity of the combined group following the Dufry / Autogrill business combination and increased expertise required on the Board of Directors. The remuneration of the members of the Board of Directors for both fiscal years 2023 and 2022 is shown in the remuneration table on page 320 and reflects the period from January 1 until December 31. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 320/336 Remuneration of the Board of Directors (audited) 2023 2022 Name, Function in thousands of CHF Remuneration Social security contributions 8 Juan Carlos Torres Carretero, Chairman 1 5,709.0 Alessandro Benetton, Honorary Chairman 2 Sami Kahale, Vice-Chairman 3 Enrico Laghi, Vice-Chairman 2 Heekyung Jo Min, Lead Independent Director 4 Xavier Bouton, Director 5 Mary J. Steele Guilfoile, Director Luis Maroto Camino, Director Joaquín Moya-Angeler Cabrera, Director Ranjan Sen, Director Lynda Tyler-Cagni, Director Eugenia M. Ulasewicz, Director 238.3 258.7 378.8 537.5 250.0 387.5 375.0 400.0 250.0 292.4 350.0 – 18.6 19.6 28.7 – 16.8 – – 27.5 – 41.0 – total Remuneration 5,709.0 4,624.1 256.9 278.3 407.5 537.5 266.8 387.5 375.0 427.5 250.0 333.4 350.0 n/a n/a n/a 492.7 155.9 331.2 375.0 368.7 250.0 300.0 337.5 Subtotal for active members at Dec 31, 2023 9,427.2 152.2 9,579.4 7,235.1 Jorge Born, Director 6 Julián Díaz González, Director, former CEO 6, 7 Steven Tadler, Director 6 Total n/a n/a n/a n/a n/a n/a n/a n/a n/a 9,427.2 152.2 9,579.4 150.5 – 125.4 7,511.0 Amounts mentioned in the table are gross amounts. 1 The remuneration for Mr. Torres Carretero includes a Board fee of CHF 2.01 million and a cash bonus of CHF 3.70 million (2022: CHF 2.01 million Board fee and CHF 2.61 million bonus). 2 Mr. Benetton and Mr. Laghi were elected as Directors at the EGM on August 31, 2022. Their election was subject to and became effective upon the completion of the share transfer of the Autogrill shares indirectly held by Edizione S.p.A. to Dufry, which occurred on February 3, 2023. They did not receive any compensation during the prior fiscal year 2022. 3 Director since AGM on May 8, 2023. 4 The remuneration for Ms. Heekyung Jo Min includes the fees for her responsibilities as Lead Independent Director, Chairwoman of the Nomination Committee, Chairwoman of the ESG Committee (respectively in 2022 Chairwoman of the combined Nomination and ESG Committee) and membership of the Audit Committee. 5 Director since AGM on May 17, 2022. 6 Director until AGM on May 17, 2022. 7 Mr. Díaz González (former CEO of the Company) did not receive any additional compensation as Board member. 8 Amount includes mandatory employer social security contributions. Social security contributions 8 – n/a n/a n/a – 7.7 – – 18.6 – 44.5 – 70.8 9.1 – – total 4,624.1 n/a n/a n/a 492.7 163.6 331.2 375.0 387.3 250.0 344.5 337.5 7,305.9 159.6 – 125.4 79.9 7,590.9 Remuneration levels are competitive with the talent market Reconciliation between reported Board remuneration and amount approved by shareholders at AGM 2023 in thousands of CHF Board compensation for fiscal Year 2023 as reported Less Board compensation to be accrued for the period January 1, 2023 to the AGM on May 8, 2023 Plus Board compensation to be accrued for the period January 1, 2024 to the AGM on May 15, 2024 Total Board compensation for the period from AGM 2023 to AGM 2024 Total maximum amount as approved by shareholders at the AGM 2023 for period of AGM 2023 to AGM 2024 Compensation ratio Total Board of Directors 9,579.4 (1,944.0) 2,279.7 9,915.1 11,000.0 90.1 % Remuneration of the Global Executive Committee Remuneration principles range with a view to potential increases alongside his / her growing experience. Also, higher salary increases may be granted in the case of an increase in responsibilities. Other benefits and post-employment benefits Avolta strives to provide internationally competitive remu- Whenever applicable, members of the Global Executive neration to the members of the Global Executive Committee participate in the benefit plans available to all Committee that reflects the experience and the area of employees in their country of employment. Benefits responsibility of each individual member. Moreover, the consist mainly of retirement, insurance, and healthcare remuneration system intends to support the execution of plans designed to provide a reasonable level of protection the business strategy, drive performance and strengthen for the employees and their dependents in respect to the the alignment with the shareholder interests. The remu- risk of retirement, disability, death, and illness. The neration system is built around the following principles: members of the Global Executive Committee with a Swiss A significant portion of the remuneration depends on the achievement of short-term and long-term performance targets. Pay-for-performance Shareholder alignment A significant portion of remuneration is paid in form of equity, thus strengthening the alignment between the interests of the executives with those of the shareholders. Competitiveness of Avolta. Transparency The remuneration system and remuneration decisions are explained in a transparent way to internal and external stakeholders. Remuneration system employment contract participate in Avolta’s pension plans offered to all employees in Switzerland. These consist of the basic pension fund, in which base salaries up to an amount of TCHF 308.7 per annum are insured, as well as a supplementary plan in which base salaries in excess of this limit are insured up to the maximum amount permitted by law. Avolta’s pension funds exceed the legal requirements of the Swiss Federal Law on occupational Retirement, Survivors, and Disability Pension Plans (BVG) and are in line with prevalent market practice. Members of the Global Executive Committee under foreign employment contracts are insured commensurately with market conditions and with their position. Each plan varies in line with the local competitive and legal environment and at a minimum, in accordance with the legal requirements of the respective country. Fringe benefits such as insurances, company car, schooling or housing allowances have been granted to certain members of the Global Executive Committee. The monetary values of these benefits are included at their fair value in the remuneration tables. The remuneration of the members of the Global Execu- Annual bonus tive Committee includes the following elements: The annual bonus is a short-term variable incentive – Fixed base salary in cash; designed to reward the financial performance of the – Other benefits, post-employment benefits; Group over a time horizon of one year. – Performance-related bonus in cash; – Long-term share-based incentive. Base salary The annual target bonus (i.e. assuming 100 % achieve- ment of all performance targets) is defined annually for each member of the Global Executive Committee and is The annual base salary is the fixed remuneration expressed as a percentage of the annual base salary. The reflecting the scope and key areas of responsibility of the target bonus in 2023 amounts to 150 % of the annual base position, the skills required to perform the role and the salary for the CEO and ranges from 50 % to 109 % of the experience and competencies of each individual. The annual base salary for the other members of the Global base salary is reviewed on an annual basis. Generally, Executive Committee. salary increases for members of the Global Executive Committee are in line with increases for the broader The actual bonus paid out depends on the achievement workforce. In case of promotion, typically a more of pre-defined Group financial objectives and may range substantial salary increase may be granted. Nevertheless, a newly promoted Global Executive Committee member would get a base salary at the lower end of the expected from 0 % to 133 ¹⁄³ % of the target bonus for the CEO and from 0 % to 130 % of the target bonus for the other Remuneration of the Board of Directors (audited) 2023 2022 Name, Function in thousands of CHF Remuneration contributions 8 total Remuneration contributions 8 total Juan Carlos Torres Carretero, Chairman 1 5,709.0 – 5,709.0 4,624.1 4,624.1 Alessandro Benetton, Honorary Chairman 2 Sami Kahale, Vice-Chairman 3 Enrico Laghi, Vice-Chairman 2 Heekyung Jo Min, Lead Independent Director 4 Xavier Bouton, Director 5 Mary J. Steele Guilfoile, Director Luis Maroto Camino, Director Joaquín Moya-Angeler Cabrera, Director Ranjan Sen, Director Lynda Tyler-Cagni, Director Eugenia M. Ulasewicz, Director Jorge Born, Director 6 Julián Díaz González, Director, former CEO 6, 7 Steven Tadler, Director 6 Total Amounts mentioned in the table are gross amounts. Social security 18.6 19.6 28.7 16.8 – – – – – 27.5 41.0 n/a n/a n/a 238.3 258.7 378.8 537.5 250.0 387.5 375.0 400.0 250.0 292.4 350.0 n/a n/a n/a Social security – n/a n/a n/a – 7.7 – – – – 18.6 44.5 9.1 – – n/a n/a n/a 492.7 163.6 331.2 375.0 387.3 250.0 344.5 337.5 159.6 – 125.4 256.9 278.3 407.5 537.5 266.8 387.5 375.0 427.5 250.0 333.4 350.0 n/a n/a n/a n/a n/a n/a 492.7 155.9 331.2 375.0 368.7 250.0 300.0 337.5 150.5 – 125.4 7,511.0 9,427.2 152.2 9,579.4 79.9 7,590.9 Subtotal for active members at Dec 31, 2023 9,427.2 152.2 9,579.4 7,235.1 70.8 7,305.9 1 The remuneration for Mr. Torres Carretero includes a Board fee of CHF 2.01 million and a cash bonus of CHF 3.70 million (2022: CHF 2.01 million Board fee and CHF 2.61 million bonus). 2 Mr. Benetton and Mr. Laghi were elected as Directors at the EGM on August 31, 2022. Their election was subject to and became effective upon the completion of the share transfer of the Autogrill shares indirectly held by Edizione S.p.A. to Dufry, which occurred on February 3, 2023. They did not receive any compensation during the prior fiscal year 2022. 3 Director since AGM on May 8, 2023. 4 The remuneration for Ms. Heekyung Jo Min includes the fees for her responsibilities as Lead Independent Director, Chairwoman of the Nomination Committee, Chairwoman of the ESG Committee (respectively in 2022 Chairwoman of the combined Nomination and ESG Committee) and membership of the Audit Committee. 5 Director since AGM on May 17, 2022. 6 Director until AGM on May 17, 2022. 7 Mr. Díaz González (former CEO of the Company) did not receive any additional compensation as Board member. 8 Amount includes mandatory employer social security contributions. Reconciliation between reported Board remuneration and amount approved by shareholders at AGM 2023 in thousands of CHF Board compensation for fiscal Year 2023 as reported Less Board compensation to be accrued for the period January 1, 2023 to the AGM on May 8, 2023 Plus Board compensation to be accrued for the period January 1, Total Board compensation for Total maximum amount as approved by shareholders at the AGM 2023 for 2024 to the AGM the period from AGM period of AGM 2023 Compensation on May 15, 2024 2023 to AGM 2024 to AGM 2024 ratio Total Board of Directors 9,579.4 (1,944.0) 2,279.7 9,915.1 11,000.0 90.1 % Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 321/336 Remuneration of the Global Executive Committee Remuneration principles Avolta strives to provide internationally competitive remu- neration to the members of the Global Executive Committee that reflects the experience and the area of responsibility of each individual member. Moreover, the remuneration system intends to support the execution of the business strategy, drive performance and strengthen the alignment with the shareholder interests. The remu- neration system is built around the following principles: Pay-for-performance A significant portion of the remuneration depends on the achievement of short-term and long-term performance targets. Shareholder alignment A significant portion of remuneration is paid in form of equity, thus strengthening the alignment between the interests of the executives with those of the shareholders. Competitiveness Remuneration levels are competitive with the talent market of Avolta. Transparency The remuneration system and remuneration decisions are explained in a transparent way to internal and external stakeholders. Remuneration system The remuneration of the members of the Global Execu- tive Committee includes the following elements: – Fixed base salary in cash; – Other benefits, post-employment benefits; – Performance-related bonus in cash; – Long-term share-based incentive. Base salary The annual base salary is the fixed remuneration reflecting the scope and key areas of responsibility of the position, the skills required to perform the role and the experience and competencies of each individual. The base salary is reviewed on an annual basis. Generally, salary increases for members of the Global Executive Committee are in line with increases for the broader workforce. In case of promotion, typically a more substantial salary increase may be granted. Nevertheless, a newly promoted Global Executive Committee member would get a base salary at the lower end of the expected range with a view to potential increases alongside his / her growing experience. Also, higher salary increases may be granted in the case of an increase in responsibilities. Other benefits and post-employment benefits Whenever applicable, members of the Global Executive Committee participate in the benefit plans available to all employees in their country of employment. Benefits consist mainly of retirement, insurance, and healthcare plans designed to provide a reasonable level of protection for the employees and their dependents in respect to the risk of retirement, disability, death, and illness. The members of the Global Executive Committee with a Swiss employment contract participate in Avolta’s pension plans offered to all employees in Switzerland. These consist of the basic pension fund, in which base salaries up to an amount of TCHF 308.7 per annum are insured, as well as a supplementary plan in which base salaries in excess of this limit are insured up to the maximum amount permitted by law. Avolta’s pension funds exceed the legal requirements of the Swiss Federal Law on occupational Retirement, Survivors, and Disability Pension Plans (BVG) and are in line with prevalent market practice. Members of the Global Executive Committee under foreign employment contracts are insured commensurately with market conditions and with their position. Each plan varies in line with the local competitive and legal environment and at a minimum, in accordance with the legal requirements of the respective country. Fringe benefits such as insurances, company car, schooling or housing allowances have been granted to certain members of the Global Executive Committee. The monetary values of these benefits are included at their fair value in the remuneration tables. Annual bonus The annual bonus is a short-term variable incentive designed to reward the financial performance of the Group over a time horizon of one year. The annual target bonus (i.e. assuming 100 % achieve- ment of all performance targets) is defined annually for each member of the Global Executive Committee and is expressed as a percentage of the annual base salary. The target bonus in 2023 amounts to 150 % of the annual base salary for the CEO and ranges from 50 % to 109 % of the annual base salary for the other members of the Global Executive Committee. The actual bonus paid out depends on the achievement of pre-defined Group financial objectives and may range from 0 % to 133 ¹⁄³ % of the target bonus for the CEO and from 0 % to 130 % of the target bonus for the other Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 322/336 members of the Global Executive Committee, with one exception whose maximum payout cap is at 100 %. The Group financial objectives for the annual bonus are determined on an annual basis by the Board of Directors upon recommendation by the Remuneration Committee, and are set in line with the mid-term strategic plan and the annual budget. In line with the "Destination 2027" Strategy of the combined Group and the main objectives of the business to deliver resilient growth, sustainable profitability and cash flows, the Board of Directors selected three KPIs: CORE Turnover, CORE EBITDA and Equity Free Cash Flow, each of them with a 33 ¹⁄³ % weighting. The actual performance for each KPI is measured as a percentage achievement compared with the pre-defined target. For a performance achievement percentage below 75 %, the bonus payout is zero. For a performance achievement of 100 %, the bonus payout amounts to 100 % of the annual target bonus. In case of outperfor- mance, the bonus payout is capped at 133 ¹⁄³ % of the annual target bonus amount for the CEO and at 130 % of the annual target bonus amount for the other members of the Global Executive Committee (except one member with cap set at 100 %). The Remuneration Committee considers the financial targets for the annual bonus to be commercially sensitive and that their disclosure would put the company at a competitive disadvantage. However, a performance assessment and the connection between pay and perfor- mance are provided ex-post, as commentary to the remuneration tables. The annual bonus is usually paid out in cash in the second quarter of the following year. Share-based incentives (PSU) The purpose of Avolta Performance Share Unit (PSU) plan is to provide the members of the Global Executive Committee and selected members of the Senior Manage- ment team with an incentive to make significant and extraordinary contributions to the long-term perfor- mance and growth of the Group, enhancing the value of the shares for the benefit of the shareholders. The share- based incentive is also increasing the ability of Avolta Group to attract and retain persons of exceptional skills. The value of the PSU grant is defined annually by the Board of Directors and the Remuneration Committee for each member of the Global Executive Committee. The number of PSU allocated to each member of the Global Executive Committee takes into account the base salary as well as the prevailing share price. In fiscal year 2023, the number of PSU granted was adjusted to reflect the increased responsibilities of the members of the Global Executive Committee and is aligned with shareholder interests since it is focused on long-term performance. The PSU at grant value amounted to 306 % of the annual base salary for the CEO and ranged from 78 % to 205 % of the annual base salary for the other members of the Global Executive Committee in 2023. The PSU granted in fiscal year 2023 are a conditional right to receive future shares of the company, if the vesting conditions are met on the vesting date in June 2026. From an economic point of view, the PSU are stock options with an exercise price of nil. They are expected to have no dilutive effect, as the shares are sourced from treasury shares held by the Company. The performance targets of the 2023 PSU grant are the following, each measured over a three-year performance period: – Cumulative CORE EPS with a 50 % weighting – Relative Total Shareholder Return (TSR) with a 25 % weighting – ESG targets with a 25 % weighting The absolute financial performance of Cumulative CORE EPS measures the company’s profitability to investors and is expressed as a nominal amount in CHF (for the glossary of financial terms and alternative performance measures please see page 271 of this Annual Report). The Relative TSR is expressed as a percentile ranking in a peer group of 26 selected companies, mainly from the STOXX Europe 600 travel, leisure and retail industries. The complete list of companies chosen is shown in the table on page 325. The measurement of Avolta’s relative ranking compared to this group is provided by Obermatt, an independent indexing Swiss financial research firm focused on company performances. The third target measures the company’s activities improvements regarding impact of its operations on ESG matters with KPIs for the 2023 Plan including Employee trainings on compliance, diversity and inclusion, responsible operator or related topics, and Purchase volume with suppliers having committed to the Science Based Target initiative (SBTi). ESG-related KPIs are quantifiable and material for Avolta’s long-term strategy, and targets are set to award exceptional performance significantly beyond the ordi- nary course of business. KPIs are based on Avolta’s mate- riality assessment including all stakeholders. Further details for each of the objectives are shown on page 324. For further information on ESG please see also the ESG Report on page 97 ff. of this Annual Report. in ESG and the The PSU vest on the vesting date based on the achieve- ment of the performance targets. Each PSU may provide Remuneration components1 Component Instrument Purpose Influenced by Performance objectives in 2023 Base salary - Base remuneration - Paid in cash on a monthly basis - Attract and retain best - Position professionals - Competitive market environment - Experience of the person Other benefits, post- employment benefits - Allowances - Social pension and insurance benefits - Attract and retain - Legal requirements - Protect against risks - Market practice Annual bonus - Annual bonus in cash - Pay-for-performance - Financial performance - CORE Turnover of the Group for the - CORE EBITDA fiscal year - Equity Free Cash Flow Long-term share-based - Performance Share - Reward long-term - Financial performance - Cumulative CORE EPS incentives (PSU) Units (PSU) performance of the Group - Align with shareholder - Share price - Relative TSR - ESG interests performance relative to peer group - ESG performance of the - Measured over a three- year performance Group period 1 For a glossary of financial terms and alternative performance measures please see page 271 of this Annual Report. Overview of the target, minimum and maximum bonus for the Global Executive Committee Fiscal year 2023 Fiscal year 2022 Target bonus amount for CEO 150 % of annual base salary 150 % of annual base salary the Global Executive Committee 50 % to 109 % of annual base salary 50 % to 110 % of annual base salary Target bonus amount for other members of Minimum achievement level for payout (below which the payout is zero) 75 % of the combined targets performance 75 % of the combined targets performance Maximum annual bonus for CEO 133 ¹⁄ % of target bonus amount ³ 133 ¹⁄ % of target bonus amount ³ Maximum annual bonus for other members Between 100 % and 130 % of target bonus of the Global Executive Committee amount 130 % of target bonus amount Performance objectives for annual bonus Performance objectives and weighting Equity Free Cash Flow (33 ¹⁄ %) Equity Free Cash Flow (50 %) Fiscal year 2023 Fiscal year 2022 CORE Turnover (33 ¹⁄ %) CORE EBITDA (33 ¹⁄ %) ³ ³ ³ Turnover (50 %) members of the Global Executive Committee, with one the number of PSU granted was adjusted to reflect the exception whose maximum payout cap is at 100 %. increased responsibilities of the members of the Global The Group financial objectives for the annual bonus are interests since it is focused on long-term performance. determined on an annual basis by the Board of Directors The PSU at grant value amounted to 306 % of the annual upon recommendation by the Remuneration Committee, base salary for the CEO and ranged from 78 % to 205 % of and are set in line with the mid-term strategic plan and the annual base salary for the other members of the the annual budget. In line with the "Destination 2027" Global Executive Committee in 2023. Executive Committee and is aligned with shareholder Strategy of the combined Group and the main objectives of the business to deliver resilient growth, sustainable The PSU granted in fiscal year 2023 are a conditional right profitability and cash flows, the Board of Directors to receive future shares of the company, if the vesting selected three KPIs: CORE Turnover, CORE EBITDA and conditions are met on the vesting date in June 2026. Equity Free Cash Flow, each of them with a 33 ¹⁄³ % weighting. From an economic point of view, the PSU are stock options with an exercise price of nil. They are expected to have no dilutive effect, as the shares are sourced from The actual performance for each KPI is measured as a treasury shares held by the Company. percentage achievement compared with the pre-defined target. For a performance achievement percentage The performance targets of the 2023 PSU grant are the below 75 %, the bonus payout is zero. For a performance following, each measured over a three-year performance achievement of 100 %, the bonus payout amounts to period: 100 % of the annual target bonus. In case of outperfor- – Cumulative CORE EPS with a 50 % weighting mance, the bonus payout is capped at 133 ¹⁄³ % of the annual target bonus amount for the CEO and at 130 % of weighting – Relative Total Shareholder Return (TSR) with a 25 % the annual target bonus amount for the other members – ESG targets with a 25 % weighting of the Global Executive Committee (except one member with cap set at 100 %). The absolute financial performance of Cumulative CORE EPS measures the company’s profitability to investors and The Remuneration Committee considers the financial is expressed as a nominal amount in CHF (for the glossary targets for the annual bonus to be commercially sensitive of financial terms and alternative performance measures and that their disclosure would put the company at a please see page 271 of this Annual Report). The Relative competitive disadvantage. However, a performance TSR is expressed as a percentile ranking in a peer group of assessment and the connection between pay and perfor- 26 selected companies, mainly from the STOXX Europe mance are provided ex-post, as commentary to the 600 travel, leisure and retail industries. The complete list The annual bonus is usually paid out in cash in the second to this group is provided by Obermatt, an independent remuneration tables. quarter of the following year. Share-based incentives (PSU) of companies chosen is shown in the table on page 325. The measurement of Avolta’s relative ranking compared Swiss financial research firm focused on indexing company performances. The third target measures the company’s activities in ESG and the improvements The purpose of Avolta Performance Share Unit (PSU) plan regarding impact of its operations on ESG matters with is to provide the members of the Global Executive KPIs for the 2023 Plan including Employee trainings on Committee and selected members of the Senior Manage- compliance, diversity and inclusion, responsible operator ment team with an incentive to make significant and or related topics, and Purchase volume with suppliers extraordinary contributions to the long-term perfor- having committed to the Science Based Target initiative mance and growth of the Group, enhancing the value of (SBTi). ESG-related KPIs are quantifiable and material for the shares for the benefit of the shareholders. The share- Avolta’s long-term strategy, and targets are set to award based incentive is also increasing the ability of Avolta exceptional performance significantly beyond the ordi- Group to attract and retain persons of exceptional skills. nary course of business. KPIs are based on Avolta’s mate- Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 323/336 Remuneration components1 Component Instrument Purpose Influenced by Performance objectives in 2023 Base salary - Base remuneration - Paid in cash on a monthly basis - Attract and retain best professionals - Position - Competitive market environment - Experience of the person Other benefits, post- employment benefits - Allowances - Social pension and insurance benefits - Attract and retain - Protect against risks - Legal requirements - Market practice Annual bonus - Annual bonus in cash - Pay-for-performance - Financial performance of the Group for the fiscal year - CORE Turnover - CORE EBITDA - Equity Free Cash Flow Long-term share-based incentives (PSU) - Performance Share - Reward long-term - Financial performance Units (PSU) performance - Align with shareholder of the Group - Share price - Cumulative CORE EPS - Relative TSR - ESG interests performance relative to peer group - ESG performance of the Group - Measured over a three- year performance period 1 For a glossary of financial terms and alternative performance measures please see page 271 of this Annual Report. Overview of the target, minimum and maximum bonus for the Global Executive Committee Fiscal year 2023 Fiscal year 2022 Target bonus amount for CEO 150 % of annual base salary 150 % of annual base salary Target bonus amount for other members of the Global Executive Committee Minimum achievement level for payout (below which the payout is zero) Maximum annual bonus for CEO 50 % to 109 % of annual base salary 50 % to 110 % of annual base salary 75 % of the combined targets performance 75 % of the combined targets performance 133 ¹⁄ ³ % of target bonus amount 133 ¹⁄ ³ % of target bonus amount Maximum annual bonus for other members of the Global Executive Committee Between 100 % and 130 % of target bonus amount 130 % of target bonus amount The value of the PSU grant is defined annually by the details for each of the objectives are shown on page 324. Board of Directors and the Remuneration Committee for For further information on ESG please see also the ESG each member of the Global Executive Committee. The Report on page 97 ff. of this Annual Report. Performance objectives and weighting CORE Turnover (33 ¹⁄ ³ CORE EBITDA (33 ¹⁄ %) ³ Equity Free Cash Flow (33 ¹⁄ ³ %) %) Turnover (50 %) Equity Free Cash Flow (50 %) riality assessment including all stakeholders. Further Fiscal year 2023 Fiscal year 2022 number of PSU allocated to each member of the Global Executive Committee takes into account the base salary The PSU vest on the vesting date based on the achieve- as well as the prevailing share price. In fiscal year 2023, ment of the performance targets. Each PSU may provide Performance objectives for annual bonus Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 324/336 Overview of PSU grants to the Global Executive Committee1 Fiscal year 2023 Fiscal year 2022 PSU grant to CEO 306 % of annual base salary 197 % of annual base salary PSU grant to other members of the Global Executive Committee 78 % to 205 % of annual base salary 67 % to 119 % of annual base salary 1 The PSU grant at fair value in 2023 was adjusted to reflect increased responsibilities of the members of the Global Executive Committee Relative TSR – List of companies used for calculation1 Accor SA Air France-KLM SA Amadeus IT Group, S.A. Avolta AG easyJet plc Hennes & Mauritz AB Kingfisher plc Lagardere SA Industria de Diseño Textil, S.A. Marks and Spencer Group plc InterContinental Hotels Group PLC Next plc Wizz Air Holdings Plc TUI AG WH Smith PLC Whitbread plc B&M European Value Retail S.A. Internat. Cons. Airlines Group, S.A. Ryanair Holdings plc Zalando SE Carnival Corporation & plc JD Sports Fashion plc Deutsche Lufthansa AG Kering SA Sodexo S.A. SSP Group plc 1 The peer group is approved by the Board of Directors and reflects a list of meaningful and relevant peer companies. The peer group remained unchanged compared to the previous year. Overview of the performance objectives of the PSU plan 2023 Timing of the PSU plans Year 2020 Year 2021 Year 2022 Year 2023 Year 2024 Year 2025 Year 2026 Performance objectives Cumulative CORE EPS Relative TSR ESG 2020 PSU plan No PSU granted in fiscal year 2020 Rationale Definition Measures the company’s profitability to investors. Measures the company’s ability to provide investors with strong returns compared to industry- related peers. Measures the company’s activities in ESG and the improvements regarding impact of its operations on ESG. Cumulative CORE EPS, defined as Avolta's CORE Net Profit, as yearly reported, divided by the weighted average number of shares outstanding in the respective year. The cumulative CORE EPS over a three-year period is expressed as a nominal amount in CHF. Avolta’s relative TSR over the performance period, expressed as a percentile ranking in a peer group of 26 companies (see list on page 325). The TSR is calculated as the performance of the share price plus reinvested dividends. TSR ranking to be calculated annually by Obermatt, an independent Swiss financial research firm. Split into two different KPIs (50 % weight each): - People: Employee trainings - Environment: Purchase volume with retail suppliers under SBTi Weighting 50 % Performance period 2023 – 2025 25 % 2023 – 2025 25 % 2023 – 2025 Target (100 % vesting) Cumulative CORE EPS of CHF 4.26. Ranking at 50th percentile of the peer group. People: Trainings on compliance, diversity and inclusion, responsible operator and related topics completed by 25 % of Avolta's (Dufry and Autogrill) 2023 FTE by year-end 2025. Environment: Retail suppliers covering at least 40 % of the Company's 2023 purchase volume (based on cost of goods sold) have committed to the Science Based Target initiative (SBTi). Share allocation on vesting At target 1 share per PSU; at 150 % or more target achievement, a maximum of 2 shares per PSU; at less than 50 % target achievement, zero shares. The performance objectives for the PSU granted in previous years are disclosed in the respective Remuneration Reports.* * For the website link to previous financial reports please see page 309 of the Corporate Governance Report. 2021 PSU plan Grant Vesting period Vesting Performance targets reached 2022 PSU plan Grant Vesting period Vesting Assessment of TBD target achievements 2023 PSU plan Grant Vesting period Vesting Assessment of TBD target achievements between zero share (less than 50 % target achievement) and 2 shares (150 % or more target achievement). In case of voluntary resignation or termination for cause, unvested PSU forfeit without any compensation. They continue to vest in case of termination by the employer without cause, retirement, disability or death and they are subject to immediate vesting in case of change of control. Employment contracts According to Article 23 of the Articles of Incorporation, Remuneration of the Global Executive Committee for fiscal year 2023 Summary of remuneration for fiscal years 2023 and 2022 The table on page 326 is audited according to Article 728a para. 1 no. 4 of the Swiss Code of Obligations. employment and other agreements with the members of For fiscal year 2023, the remuneration of the Global Exec- the Global Executive Committee may be concluded for a utive Committee includes the remuneration of a total of fixed term or for an indefinite term. Agreements for a 13 members: five members active January 1 to Decem- fixed term may have a maximum duration of one year. ber 31, three members effective as of February 7 to Agreements for an indefinite term may have a notice December 31, two members effective as of March 1 and 2 period of maximum twelve months. The current employ- to December 31, and three members who left the Global ment contracts with the members of the Global Executive Executive Committee in 2023 (their remuneration also Committee contain termination periods of twelve months includes contractual compensation payments during or less. notice periods). The remuneration for fiscal years 2023 Overview of PSU grants to the Global Executive Committee1 Fiscal year 2023 Fiscal year 2022 PSU grant to CEO 306 % of annual base salary 197 % of annual base salary PSU grant to other members of the Global Executive Committee 78 % to 205 % of annual base salary 67 % to 119 % of annual base salary 1 The PSU grant at fair value in 2023 was adjusted to reflect increased responsibilities of the members of the Global Executive Committee Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 325/336 Relative TSR – List of companies used for calculation1 Accor SA Air France-KLM SA Amadeus IT Group, S.A. Avolta AG B&M European Value Retail S.A. Carnival Corporation & plc Deutsche Lufthansa AG easyJet plc Hennes & Mauritz AB Industria de Diseño Textil, S.A. InterContinental Hotels Group PLC Internat. Cons. Airlines Group, S.A. JD Sports Fashion plc Kering SA Kingfisher plc Lagardere SA Marks and Spencer Group plc Next plc Ryanair Holdings plc Sodexo S.A. SSP Group plc TUI AG WH Smith PLC Whitbread plc Wizz Air Holdings Plc Zalando SE 1 The peer group is approved by the Board of Directors and reflects a list of meaningful and relevant peer companies. The peer group remained unchanged compared to the previous year. Overview of the performance objectives of the PSU plan 2023 Timing of the PSU plans Year 2020 Year 2021 Year 2022 Year 2023 Year 2024 Year 2025 Year 2026 Performance objectives Cumulative CORE EPS Relative TSR ESG 2020 PSU plan No PSU granted in fiscal year 2020 Rationale Measures the company’s profitability to investors. Measures the company’s ability to Measures the company’s activities provide investors with strong in ESG and the improvements returns compared to industry- regarding impact of its operations related peers. on ESG. Definition Cumulative CORE EPS, defined as Avolta’s relative TSR over the Split into two different KPIs Avolta's CORE Net Profit, as yearly performance period, expressed as (50 % weight each): reported, divided by the weighted a percentile ranking in a peer group - People: Employee trainings average number of shares of 26 companies (see list on page - Environment: Purchase volume outstanding in the respective year. 325). The TSR is calculated as the with retail suppliers under SBTi The cumulative CORE EPS over a performance of the share price three-year period is expressed as a plus reinvested dividends. TSR nominal amount in CHF. ranking to be calculated annually by Obermatt, an independent Swiss financial research firm. Weighting 50 % Performance period 2023 – 2025 25 % 2023 – 2025 peer group. Target (100 % vesting) Cumulative CORE EPS of CHF 4.26. Ranking at 50th percentile of the People: Trainings on compliance, 25 % 2023 – 2025 diversity and inclusion, responsible operator and related topics completed by 25 % of Avolta's (Dufry and Autogrill) 2023 FTE by year-end 2025. Environment: Retail suppliers covering at least 40 % of the Company's 2023 purchase volume (based on cost of goods sold) have committed to the Science Based Target initiative (SBTi). Share allocation on vesting At target 1 share per PSU; at 150 % or more target achievement, a maximum of 2 shares per PSU; at less than 50 % target achievement, zero shares. The performance objectives for the PSU granted in previous years are disclosed in the respective Remuneration Reports.* * For the website link to previous financial reports please see page 309 of the Corporate Governance Report. 2021 PSU plan Grant Vesting period Vesting Performance targets reached 2022 PSU plan Grant Vesting period Vesting TBD Assessment of target achievements 2023 PSU plan Grant Vesting period Vesting TBD Assessment of target achievements between zero share (less than 50 % target achievement) and 2 shares (150 % or more target achievement). In case of voluntary resignation or termination for cause, unvested PSU forfeit without any compensation. They continue to vest in case of termination by the employer without cause, retirement, disability or death and they are subject to immediate vesting in case of change of control. Employment contracts 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. Agreements for an indefinite term may have a notice period of maximum twelve months. The current employ- ment contracts with the members of the Global Executive Committee contain termination periods of twelve months or less. Remuneration of the Global Executive Committee for fiscal year 2023 Summary of remuneration for fiscal years 2023 and 2022 The table on page 326 is audited according to Article 728a para. 1 no. 4 of the Swiss Code of Obligations. For fiscal year 2023, the remuneration of the Global Exec- utive Committee includes the remuneration of a total of 13 members: five members active January 1 to Decem- ber 31, three members effective as of February 7 to December 31, two members effective as of March 1 and 2 to December 31, and three members who left the Global Executive Committee in 2023 (their remuneration also includes contractual compensation payments during notice periods). The remuneration for fiscal years 2023 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 326/336 Remuneration of the Global Executive Committee (audited) Remuneration component in thousands of CHF Base salary Bonus on specific financial targets 3 Post-employment benefits 4 Other benefits Share-based compensation grant value (3 years performance period) 5 Total compensation awarded 2023 GEC1 CEO2 GEC1 9,659.6 11,167.9 2,554.1 609.9 16,058.3 40,049.8 1,700.0 3,127.3 769.8 – 5,204.7 10,801.8 7,412.7 10,330.2 1,759.0 255.7 8,785.4 28,543.0 2022 CEO2 1,416.7 2,833.3 534.9 – 2,784.8 7,569.7 Total realized compensation 23,991.5 5,597.1 19,757.6 4,784.9 Number of performance share units awarded 5 429,581 132,502 199,059 76,045 Amounts mentioned in the tables are gross amounts. 1 The remuneration of the Global Executive Committee for fiscal year 2023 includes compensation to 13 members: five in office from Jan 1 to Dec 31, three appointed as of Feb 7, two appointed as of March 1 and 2, and three who left the GEC in 2023 (their remuneration includes payments during their contractual notice period). For fiscal year 2022, it included compensation to 8 members: the CEO as of March 1, the former CEO (Jan 1 to Dec 31) and six other members active from Jan 1 to Dec 31. The CEO has the highest compensation of the Global Executive Committee. 2 3 For fiscal year 2023, CORE Turnover, CORE EBITDA and Equity Free Cash Flow. For fiscal year 2022, Turnover and Equity Free Cash Flow. 4 Amount includes employer social security contributions and pension contributions. 5 For valuation details of the Avolta (former Dufry) performance share units see Note 26 of the consolidated financial statements. The disclosed value in the table corresponds to the grant value in the respective year (number of PSU granted multiplied by the PSU value at the date of grant. The PSU value assumes 100 % target achievement, except for relative TSR as part of the LTI, for which the PSU value was calculated according to the Monte Carlo methodology). Remuneration structure Global Executive Committee in 2023 7 % Post-Employment Benefits 16 % Base Salary 8 % Post-Employment Benefits, other Benefits 27 % Base Salary 2022). CEO 37 % Share-Based Compensation Other GEC Members 48 % Share-Based Compensation 29 % Bonus CORE Turnover, CORE EBITDA, Equity Free Cash Flow 28 % Bonus CORE Turnover, CORE EBITDA, Equity Free Cash Flow and 2022 on page 326 covers the period between No PSU grants in 2020; PSU plan 2021 expected to vest January 1 and December 31. In fiscal year 2020, no PSU were granted, therefore no shares were allocated in fiscal year 2023. Total remuneration for the members of the Global Execu- tive Committee for 2023 amounts to TCHF 40,049.8 For the PSU plan 2021, it is expected that it will vest in (2022: TCHF 28,543.0). This amount comprises annual 2024 based on the estimates available at the time of base salaries of TCHF 9,659.6 (2022: TCHF 7,412.7), annual publication of this Annual Report. bonus of TCHF 11,167.9 (2022: TCHF 10,330.2), post- employment benefits of TCHF 2,554.1 (2022: TCHF 1,759.0), Realized compensation in fiscal year 2023 other benefits of TCHF 609.9 (2022: TCHF 255.7) and PSU As no PSU were granted in fiscal year 2020 and therefore grants of TCHF 16,058.3 (2022: TCHF 8,785.4). no shares were allocated in fiscal year 2023, the total real- ized compensation for the Global Executive Committee in Explanatory comments to the remuneration table fiscal year 2023 amounts to TCHF 23,991.5, of which The changes in the total remuneration awarded to the TCHF 5,597.1 relate to the CEO. Global Executive Committee for fiscal year 2023 compared with the previous year are mainly due to the Potential shares from PSU plans following factors: The total number of shares that can be allocated to all – New composition of the Global Executive Committee participants of Avolta's PSU plan (members of the Global with six new members (Chief People & Culture Executive Committee and members of Senior Manage- Officer, President & CEO Asia Pacific, President & CEO ment team) would amount to the following: At target North America, President & CEO Latin America, Chief (100 %) 1,810,237 shares, representing a total of 1.19 % of Public Affairs & ESG Officer, Chief the outstanding shares as at December 31, 2023. At Commercial & Digital Officer); and three members maximum (i.e. at 2 shares per vested PSU) 3,620,474 who left the GEC in 2023; shares, representing a total of 2.37 % of the outstanding – CEO remuneration is reflected for the entire shares as at December 31, 2023. Historically, the 12-month period in 2023, compared to 10 months in Company has always sourced its share-based compen- 2022. The table in 2022 included both CEOs active sation from treasury shares, so that no dilutive effect is during fiscal year 2022; expected from the PSU. – Given the substantially increased size and complexity of Avolta Group following the Dufry / Autogrill combination, the grants of the variable long-term awards (PSU) were adjusted to reflect the increased responsibilities of the GEC members, while Other remuneration, loans or credit facilities (audited) continuing full alignment with shareholder interests In fiscal year 2023, in compliance with contractual obliga- through the performance-based compensation; tions, the former CEO received compensation of – Two members of the Global Executive Committee TCHF 2,111.7, including TCHF 159.4 of social security costs. received a base salary increase in 2023 to take into In fiscal year 2022, in compliance with contractual obliga- account the increase and / or change of their tions, one former member of the Global Executive functions and responsibilities. The annual base salary Committee received compensation of TCHF 170.8, for the CEO was unchanged. The difference in the including TCHF 26.9 of social security costs. No other table regarding the base salary of the CEO results remuneration was paid directly or indirectly to current or from the 12-month period in 2023 (vs. 10 months in former members of the Global Executive Committee, or Performance under the annual bonus For fiscal year 2023, the annual bonus amounts to 122.6 % during the reporting years. There was no loan outstanding of target for the CEO and to between 100 % and 122.6 % at the end of the reporting years to any member of the of target for the other members of the Global Executive Global Executive Committee or their related parties. to their related parties, in 2023 and 2022, respectively. No member of the Global Executive Committee or their related parties were granted a loan or a credit facility Committee. This means that the annual accrued bonus is 184 % of the base salary for the CEO and ranges from 61 % to 134 % of the base salary for the other members of the Global Executive Committee (2022: CEO 200 %; other members 65 % to 143 %). Remuneration of the Global Executive Committee (audited) Remuneration component in thousands of CHF Base salary Bonus on specific financial targets 3 Post-employment benefits 4 Other benefits Share-based compensation grant value (3 years performance period) 5 Total compensation awarded GEC1 CEO2 GEC1 2023 1,700.0 3,127.3 769.8 – 5,204.7 10,801.8 7,412.7 10,330.2 1,759.0 255.7 8,785.4 28,543.0 2022 CEO2 1,416.7 2,833.3 534.9 – 2,784.8 7,569.7 9,659.6 11,167.9 2,554.1 609.9 16,058.3 40,049.8 Total realized compensation 23,991.5 5,597.1 19,757.6 4,784.9 Number of performance share units awarded 5 429,581 132,502 199,059 76,045 Amounts mentioned in the tables are gross amounts. 1 The remuneration of the Global Executive Committee for fiscal year 2023 includes compensation to 13 members: five in office from Jan 1 to Dec 31, three appointed as of Feb 7, two appointed as of March 1 and 2, and three who left the GEC in 2023 (their remuneration includes payments during their contractual notice period). For fiscal year 2022, it included compensation to 8 members: the CEO as of March 1, the former CEO (Jan 1 to Dec 31) and six other members active from Jan 1 to Dec 31. 2 The CEO has the highest compensation of the Global Executive Committee. 3 For fiscal year 2023, CORE Turnover, CORE EBITDA and Equity Free Cash Flow. For fiscal year 2022, Turnover and Equity Free Cash Flow. 4 Amount includes employer social security contributions and pension contributions. 5 For valuation details of the Avolta (former Dufry) performance share units see Note 26 of the consolidated financial statements. The disclosed value in the table corresponds to the grant value in the respective year (number of PSU granted multiplied by the PSU value at the date of grant. The PSU value assumes 100 % target achievement, except for relative TSR as part of the LTI, for which the PSU value was calculated according to the Monte Carlo methodology). Remuneration structure Global Executive Committee in 2023 7 % Post-Employment Benefits 16 % Base Salary Post-Employment Benefits, other Benefits 8 % 27 % Base Salary CEO 37 % Share-Based Compensation Other GEC Members 48 % Share-Based Compensation 29 % Bonus CORE Turnover, CORE EBITDA, Equity Free Cash Flow 28 % Bonus CORE Turnover, CORE EBITDA, Equity Free Cash Flow Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 327/336 and 2022 on page 326 covers the period between January 1 and December 31. No PSU grants in 2020; PSU plan 2021 expected to vest In fiscal year 2020, no PSU were granted, therefore no shares were allocated in fiscal year 2023. Total remuneration for the members of the Global Execu- tive Committee for 2023 amounts to TCHF 40,049.8 (2022: TCHF 28,543.0). This amount comprises annual base salaries of TCHF 9,659.6 (2022: TCHF 7,412.7), annual bonus of TCHF 11,167.9 (2022: TCHF 10,330.2), post- employment benefits of TCHF 2,554.1 (2022: TCHF 1,759.0), other benefits of TCHF 609.9 (2022: TCHF 255.7) and PSU grants of TCHF 16,058.3 (2022: TCHF 8,785.4). Explanatory comments to the remuneration table The changes in the total remuneration awarded to the Global Executive Committee for fiscal year 2023 compared with the previous year are mainly due to the following factors: – New composition of the Global Executive Committee with six new members (Chief People & Culture Officer, President & CEO Asia Pacific, President & CEO North America, President & CEO Latin America, Chief Public Affairs & ESG Officer, Chief Commercial & Digital Officer); and three members who left the GEC in 2023; – CEO remuneration is reflected for the entire 12-month period in 2023, compared to 10 months in 2022. The table in 2022 included both CEOs active during fiscal year 2022; – Given the substantially increased size and complexity of Avolta Group following the Dufry / Autogrill combination, the grants of the variable long-term awards (PSU) were adjusted to reflect the increased responsibilities of the GEC members, while continuing full alignment with shareholder interests through the performance-based compensation; – Two members of the Global Executive Committee received a base salary increase in 2023 to take into account the increase and / or change of their functions and responsibilities. The annual base salary for the CEO was unchanged. The difference in the table regarding the base salary of the CEO results from the 12-month period in 2023 (vs. 10 months in 2022). Performance under the annual bonus For fiscal year 2023, the annual bonus amounts to 122.6 % of target for the CEO and to between 100 % and 122.6 % of target for the other members of the Global Executive Committee. This means that the annual accrued bonus is 184 % of the base salary for the CEO and ranges from 61 % to 134 % of the base salary for the other members of the Global Executive Committee (2022: CEO 200 %; other members 65 % to 143 %). For the PSU plan 2021, it is expected that it will vest in 2024 based on the estimates available at the time of publication of this Annual Report. Realized compensation in fiscal year 2023 As no PSU were granted in fiscal year 2020 and therefore no shares were allocated in fiscal year 2023, the total real- ized compensation for the Global Executive Committee in fiscal year 2023 amounts to TCHF 23,991.5, of which TCHF 5,597.1 relate to the CEO. Potential shares from PSU plans The total number of shares that can be allocated to all participants of Avolta's PSU plan (members of the Global Executive Committee and members of Senior Manage- ment team) would amount to the following: At target (100 %) 1,810,237 shares, representing a total of 1.19 % of the outstanding shares as at December 31, 2023. At maximum (i.e. at 2 shares per vested PSU) 3,620,474 shares, representing a total of 2.37 % of the outstanding shares as at December 31, 2023. Historically, the Company has always sourced its share-based compen- sation from treasury shares, so that no dilutive effect is expected from the PSU. Other remuneration, loans or credit facilities (audited) In fiscal year 2023, in compliance with contractual obliga- tions, the former CEO received compensation of TCHF 2,111.7, including TCHF 159.4 of social security costs. In fiscal year 2022, in compliance with contractual obliga- tions, one former member of the Global Executive Committee received compensation of TCHF 170.8, including TCHF 26.9 of social security costs. No other remuneration was paid directly or indirectly to current or former members of the Global Executive Committee, or to their related parties, in 2023 and 2022, respectively. No member of the Global Executive Committee or their related parties were granted a loan or a credit facility during the reporting years. There was no loan outstanding at the end of the reporting years to any member of the Global Executive Committee or their related parties. Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 328/336 Performance achievements under the annual bonus in fiscal year 2023 Performance objectives Results Performance achievement CORE Turnover (33 1⁄3 %) With a CORE Turnover of CHF 12,534.6 million, the predetermined target was exceeded. Core EBITDA (33 1⁄3 %) With CORE EBITDA of CHF 1,129.6 million, the predetermined target was substantially exceeded. Equity Free Cash Flow (33 1⁄3 %) With Equity Free Cash Flow of CHF 323.0 million, the predetermined target was substantially exceeded. 0 % 0 % 0 % 150 % 150 % 150 % Payout factor The combined performance ratio amounts to 122.6 % of target. The payout is between 100 % and 122.6 % of the target bonus amounts for the members of the Global Executive Committee (incl. the CEO). Payout Percentage threshold Target Cap 75 % 100 % 130 % / 133 1/3 % Reconcilitation between the reported Shareholdings of the members of the Global Executive Committee remuneration for fiscal year 2023 and the remuneration amount approved by the AGM 2023 Board of Directors and the Global Executive Committee on December 31, 2023 and 2022 (audited) The AGM 2023 approved an increased maximum aggre- the Global Executive Committee of Avolta AG (including gate amount of remuneration for the Global Executive related parties) directly or indirectly held shares or share Committee of CHF 49.5 million for the fiscal year 2023. options (including PSU) of the Company as at Decem- The ratio of the remuneration awarded to the members of ber 31, 2023 and 2022. Members not listed in the tables the Global Executive Committee in fiscal year 2023 did not hold any shares or options (including PSU). The following members of the Board of Directors and of The table below is audited according to Article 728a para. 1 no. 4 of the Swiss code of Obligations. compared to the amount approved by the AGM is shown in the table on page 328. The same AGM also approved a maximum aggregate amount of remuneration for the Global Executive Committee of CHF 36.0 million for the fiscal year 2024. The remuneration ratio for 2024 will again be disclosed in the Remuneration Report 2024. PSU outstanding at December 31, 2023 Plan Grant Performance period Vesting Number of PSU outstanding LTI 2023 GEC (incl. CEO) 2023 2023-2025 June 2026 Senior Mgt LTI 2022 GEC (incl. CEO) 2022 2022-2024 June 2025 Senior Mgt LTI 2021 GEC (incl. CEO) 2021 2021-2023 June 2024 Senior Mgt 429,581 432,490 199,059 354,300 132,403 262,404 Compensation ratio for remuneration of Global Executive Committee for 2023 in thousands of CHF GEC compensation for fiscal year 2023 as reported Total maximum amount for GEC compensation as approved by Shareholders at the AGM 2023 for fiscal year 2023 Compensation ratio Total Global Executive Committee 40,049.8 49,500.0 80.9 % 1 The total remuneration amount reflects compensation to 13 GEC members active during fiscal year 2023 and excludes 1 former GEC member (see table on page 326 and section other remuneration, loans or credit facilities on page 327). in thousands Members of Board of Directors J. C. Torres Carretero, Chairman H. Jo Min, Lead Independent Director L. Tyler-Cagni, Director Total Board of Directors Members of Global Executive Committee X. Rossinyol, CEO Y. Gerster, CFO F. Cheung, President & CEO Asia Pacific S. Johnson, President & CEO North America E. Urioste, President & CEO Latin America P. Duclos, Group General Counsel C. Rossotto, Chief Public Affairs & ESG Officer V. Talwar, Chief Commercial & Digital Officer K. Volery, Chief People & Culture Officer ADDITIONAL FORMER MEMBER OF GLOBAL EXECUTIVE COMMITTEE E. Andrades, CEO Operations A. Belardini, Chief Commercial Officer S. Branquinho, Chief Diversity & Inclusion Officer Total Global Executive Committee L. Marin, President & CEO Europe, Middle East and Africa 10.8 December 31, 2023 December 31, 2022 Shares Outstanding unvested PSU 1 Particip. Shares Outstanding unvested PSU 1 Particip. 637.1 0.7 3.6 641.4 81.8 8.7 – – – – – – – n / a n / a n / a 101.3 – – – – 208.5 70.3 16.6 26.4 68.8 16.0 74.7 16.9 23.4 14.4 n / a n / a n / a 0.42 % 0.00 % 0.00 % 0.42 % 0.19 % 0.05 % 0.01 % 0.02 % 0.05 % 0.01 % 0.05 % 0.01 % 0.02 % 0.01 % n / a n / a n / a 611.8 0.7 3.6 616.1 81.2 8.7 n / a n / a 10.8 n / a – n / a n / a n / a 2.0 19.1 0.5 – – – – 76.0 32.4 n / a n / a 32.4 n / a 32.4 n / a n / a n / a 32.4 32.4 6.0 0.67 % 0.00 % 0.00 % 0.68 % 0.17 % 0.05 % n / a n / a 0.05 % n / a 0.04 % n / a n / a n / a 0.04 % 0.06 % 0.01 % 1 Outstanding unvested Performance Share Units (PSU) at target level. None of the members of the Board of Directors or Global Executive Committee held any options. 535.9 0.42 % 122.3 244.0 0.40 % Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 329/336 Performance achievements under the annual bonus in fiscal year 2023 Performance objectives Results Performance achievement CORE Turnover With a CORE Turnover of CHF 12,534.6 million, the predetermined target (33 1⁄3 %) was exceeded. Core EBITDA (33 1⁄3 %) substantially exceeded. With CORE EBITDA of CHF 1,129.6 million, the predetermined target was Equity Free Cash With Equity Free Cash Flow of CHF 323.0 million, the predetermined target Flow (33 1⁄3 %) was substantially exceeded. 0 % 0 % 0 % Payout factor The combined performance ratio amounts to 122.6 % of target. The payout is between 100 % and 122.6 % of the target bonus amounts for the members of the Global Executive Committee (incl. the CEO). Payout Percentage threshold Target Cap 75 % 100 % 130 % / 133 1/3 % Reconcilitation between the reported Global Executive Committee remuneration for fiscal year 2023 and the remuneration amount approved by the AGM 2023 The AGM 2023 approved an increased maximum aggre- gate amount of remuneration for the Global Executive Committee of CHF 49.5 million for the fiscal year 2023. The ratio of the remuneration awarded to the members of the Global Executive Committee in fiscal year 2023 compared to the amount approved by the AGM is shown in the table on page 328. The same AGM also approved a maximum aggregate amount of remuneration for the Global Executive Committee of CHF 36.0 million for the fiscal year 2024. The remuneration ratio for 2024 will again be disclosed in the Remuneration Report 2024. Shareholdings of the members of the Board of Directors and the Global Executive Committee on December 31, 2023 and 2022 (audited) The following members of the Board of Directors and of the Global Executive Committee of Avolta AG (including related parties) directly or indirectly held shares or share options (including PSU) of the Company as at Decem- ber 31, 2023 and 2022. Members not listed in the tables did not hold any shares or options (including PSU). The table below is audited according to Article 728a para. 1 no. 4 of the Swiss code of Obligations. PSU outstanding at December 31, 2023 Plan Grant Performance period Vesting Number of PSU outstanding LTI 2023 GEC (incl. CEO) 2023 2023-2025 June 2026 LTI 2022 GEC (incl. CEO) 2022 2022-2024 June 2025 LTI 2021 GEC (incl. CEO) 2021 2021-2023 June 2024 Senior Mgt Senior Mgt Senior Mgt Compensation ratio for remuneration of Global Executive Committee for 2023 in thousands of CHF GEC compensation for compensation as approved by Shareholders fiscal year 2023 as reported at the AGM 2023 for fiscal year 2023 Total maximum amount for GEC Compensation ratio Total Global Executive Committee 40,049.8 49,500.0 80.9 % 1 The total remuneration amount reflects compensation to 13 GEC members active during fiscal year 2023 and excludes 1 former GEC member (see table on page 326 and section other remuneration, loans or credit facilities on page 327). in thousands Members of Board of Directors J. C. Torres Carretero, Chairman H. Jo Min, Lead Independent Director L. Tyler-Cagni, Director Total Board of Directors Members of Global Executive Committee X. Rossinyol, CEO Y. Gerster, CFO F. Cheung, President & CEO Asia Pacific S. Johnson, President & CEO North America L. Marin, President & CEO Europe, Middle East and Africa E. Urioste, President & CEO Latin America P. Duclos, Group General Counsel C. Rossotto, Chief Public Affairs & ESG Officer V. Talwar, Chief Commercial & Digital Officer K. Volery, Chief People & Culture Officer ADDITIONAL FORMER MEMBER OF GLOBAL EXECUTIVE COMMITTEE E. Andrades, CEO Operations A. Belardini, Chief Commercial Officer S. Branquinho, Chief Diversity & Inclusion Officer Total Global Executive Committee December 31, 2023 December 31, 2022 Shares Outstanding unvested PSU 1 Particip. Shares Outstanding unvested PSU 1 Particip. 637.1 0.7 3.6 641.4 81.8 8.7 – – 10.8 – – – – – n / a n / a n / a 101.3 – – – – 208.5 70.3 16.6 26.4 68.8 16.0 74.7 16.9 23.4 14.4 n / a n / a n / a 0.42 % 0.00 % 0.00 % 0.42 % 0.19 % 0.05 % 0.01 % 0.02 % 0.05 % 0.01 % 0.05 % 0.01 % 0.02 % 0.01 % n / a n / a n / a 611.8 0.7 3.6 616.1 81.2 8.7 n / a n / a 10.8 n / a – n / a n / a n / a 2.0 19.1 0.5 – – – – 76.0 32.4 n / a n / a 32.4 n / a 32.4 n / a n / a n / a 32.4 32.4 6.0 0.67 % 0.00 % 0.00 % 0.68 % 0.17 % 0.05 % n / a n / a 0.05 % n / a 0.04 % n / a n / a n / a 0.04 % 0.06 % 0.01 % 535.9 0.42 % 122.3 244.0 0.40 % 1 Outstanding unvested Performance Share Units (PSU) at target level. None of the members of the Board of Directors or Global Executive Committee held any options. 150 % 150 % 150 % 429,581 432,490 199,059 354,300 132,403 262,404 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 330/336 Mandates outside of the Company (audited) Article 734e of the Swiss Code of Obligations requires that all mandates or functions held by members of the Board of Directors or the Global Executive Committee in entities within the meaning of Article 626 para. 2 no. 1 of the Swiss Code of Obligations that do not form part of the Avolta Group be disclosed in the Remuneration Report to the extent that such mandates are comparable to board of directors or executive committee mandates and the entity has an economic purpose. are published in the Corporate Governance Report: for members of the Board of Directors in section 3.3 on page 293 and for the Global Executive Committee in section 4.3 on page 304, respectively. The disclosure of mandates and positions in accordance with the SIX Corporate Governance Directive is included in the Corporate Governance Report: for members of the Board of Directors in their Curricula Vitae on pages 288 to 290 and for the Global Executive Committee on pages 301 to 303, respectively. The rules in Avolta’s Articles of Incorporation regarding the number of additional mandates outside the Company The following table lists the different members and their mandates outside the Avolta Group as of December 31, 2023. Name Listed companies Not listed companies or organizations Members of Board of Directors Juan Carlos Torres Carretero None Alessandro Benetton None Sami Kahale None Enrico Laghi None Laguna Partners AG, Sole Director Acamar S.r.l., Sole Director 1 Witherspoon Investments LLC, Sole Director Edizione S.p.A., Chairman of the Board of Directors 21 Invest S.p.A., Chairman and CEO 2 21 Invest SGR S.p.A., Chairman 2 21 Invest France SAS, Chairman of the Supervisory Board 2 Mundys S.p.A., Vice Chairman Ricerca Finanziaria S.p.A., Chairman and CEO Ricerca S.p.A., Board Member and CEO Saibot Srl Società Uninominale, Director Fremantle Italy, Advisory Committee Member Advent International, Operating Partner IRCA S.p.A., Chairman of the Board Bolton Group, Non-Executive Board Director Bauli Group, Chairman, Innovation Advisory Board Edizione S.p.A., Chief Executive Officer Abertis Infraestructuras SA, Board Member Studio Laghi S.r.l., Chairman Mundys S.p.A., Board Member Edizione Property S.p.A., Director Schema Gamma S.r.l., Chairman Heekyung Jo Min Xavier Bouton CJ CheilJedang, Executive Vice President, Corporte Social Responsibility None Fayenceries de Sarreguemines Digoin & Vitry la François (F.S.D.V.), Chairman of the Supervisory Board Edeis, Chairman of the Supervisory Board CIPIM, Chairman of the Supervisory Board SCI de Parcay, Director Groupement Forestier de Saint-Hubert, Manager SCI Chateau de Saint-Hubert and SNC-CFC, Manager SCI du Quai, Manager Name Listed companies Not listed companies or organizations Members of Board of Directors (continued) Mary J. Steele C.H. Robinson Worldwide, Inc., MG Advisors, Inc., Chairwoman of the Board Guilfoile Member of the Board of Directors The Beacon Group, LP, Partner The Interpublic Group of Companies, Inc., Member of the Board of Directors Pitney Bowes, Inc., Member of the Board of Directors Luis Maroto Camino Amadeus IT Group, CEO and President, None Member of the Board of Directors Joaquín Moya- Angeler Cabrera None Ranjan Sen InPost Poland, Member of the Supervisory Hermes Germany GmbH, Member of the Supervisory Board 4 Board Hermes Parcelnet Ltd (known under the brand name "Evri"), Board Member 4 Al Mansart GP 1 S.à.r.l. (known under the brand name "Parfums de Marly"), Corporación Empresarial Pascual LC, Chairman of the Board of Directors Palamon Capital Partners, Member of the Advisory Board MCH Private Equity, Member of the Advisory Board Concord Realty LTD, Chairman Inmoan SL, Chairman 3 Avalon Private Equity SCR, Chairman Casa Grande de Salinas SL, Chairman Explotaciones al Alba SL, Chairman 3 Explotaciones San Anton SL, Chairman 3 Quantumacy, Member of the Advisory Board Cybolt, Member of the Board Board Member (Class A Director) Advent International LP, Managing Partner 5 Advent International GmbH, Managing Director 5 Advent Investment Advisory GmbH, Managing Director 5 Lynda Tyler-Cagni None Only the Best, Director and CEO Eugenia M. Ulasewicz Signet Jewelers Ltd., Member of the None Board of Directors Vince Holding Corporation, Member of the Board of Directors Acamar S.r.L. is a subsidiary of Laguna Partners AG 21 Invest S.p.A., 21 Invest SGR S.p.A. and 21 Invest France SAS are part of the same group of companies Inmoan SL, Explotaciones al Alba SL and Explotaciones San Anton SL are part of the same group of companies Hermes Germany GmbH and Hermes Parcelnet Ltd. are part of the same group of companies 1 2 3 4 5 Advent International LP, Advent International GmbH and Advent Investment Advisory GmbH are part of the same group of companies Name Listed companies Not listed companies or organizations Members of Global Executive Committee Sextant Initiatives AG, Member of the Board of Directors 1 Xavier Rossinyol Yves Gerster Freda Cheung Steve Johnson Luis Marin Enrique Urioste Pascal Duclos None None None None None None None Camillo Rossotto Board of Directors Compagnia dei Caraibi, Member of the Dunelm Group PLC, Member of the Board Vijay Talwar Katrin Volery of Directors None 1 Sextant Initiatives AG is a non-active holding entity None None None None None None None None Elite Consultoria Estrategica Ltda., Director Moebius Investments Ltd., Director Mandates outside of the Company (audited) are published in the Corporate Governance Report: for members of the Board of Directors in section 3.3 on page 293 and for the Global Executive Committee in section Article 734e of the Swiss Code of Obligations requires 4.3 on page 304, respectively. that all mandates or functions held by members of the Board of Directors or the Global Executive Committee in The disclosure of mandates and positions in accordance entities within the meaning of Article 626 para. 2 no. 1 of with the SIX Corporate Governance Directive is included the Swiss Code of Obligations that do not form part of the in the Corporate Governance Report: for members of the Avolta Group be disclosed in the Remuneration Report to Board of Directors in their Curricula Vitae on pages 288 the extent that such mandates are comparable to board to 290 and for the Global Executive Committee on pages of directors or executive committee mandates and the 301 to 303, respectively. entity has an economic purpose. The rules in Avolta’s Articles of Incorporation regarding mandates outside the Avolta Group as of December 31, the number of additional mandates outside the Company 2023. The following table lists the different members and their Name Listed companies Not listed companies or organizations Alessandro Benetton None Edizione S.p.A., Chairman of the Board of Directors Members of Board of Directors Juan Carlos Torres None Carretero Sami Kahale None Enrico Laghi None Laguna Partners AG, Sole Director Acamar S.r.l., Sole Director 1 Witherspoon Investments LLC, Sole Director 21 Invest S.p.A., Chairman and CEO 2 21 Invest SGR S.p.A., Chairman 2 21 Invest France SAS, Chairman of the Supervisory Board 2 Mundys S.p.A., Vice Chairman Ricerca Finanziaria S.p.A., Chairman and CEO Ricerca S.p.A., Board Member and CEO Saibot Srl Società Uninominale, Director Fremantle Italy, Advisory Committee Member Advent International, Operating Partner IRCA S.p.A., Chairman of the Board Bolton Group, Non-Executive Board Director Bauli Group, Chairman, Innovation Advisory Board Edizione S.p.A., Chief Executive Officer Abertis Infraestructuras SA, Board Member Studio Laghi S.r.l., Chairman Mundys S.p.A., Board Member Edizione Property S.p.A., Director Schema Gamma S.r.l., Chairman Heekyung Jo Min CJ CheilJedang, None Executive Vice President, Corporte Social Responsibility Xavier Bouton Fayenceries de Sarreguemines Edeis, Chairman of the Supervisory Board Digoin & Vitry la François (F.S.D.V.), CIPIM, Chairman of the Supervisory Board Chairman of the Supervisory Board SCI de Parcay, Director Groupement Forestier de Saint-Hubert, Manager SCI Chateau de Saint-Hubert and SNC-CFC, Manager SCI du Quai, Manager Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 331/336 Name Listed companies Not listed companies or organizations Members of Board of Directors (continued) Mary J. Steele Guilfoile C.H. Robinson Worldwide, Inc., Member of the Board of Directors The Interpublic Group of Companies, Inc., Member of the Board of Directors Pitney Bowes, Inc., Member of the Board of Directors MG Advisors, Inc., Chairwoman of the Board The Beacon Group, LP, Partner Luis Maroto Camino Amadeus IT Group, CEO and President, Member of the Board of Directors None Joaquín Moya- Angeler Cabrera None Ranjan Sen InPost Poland, Member of the Supervisory Board Corporación Empresarial Pascual LC, Chairman of the Board of Directors Palamon Capital Partners, Member of the Advisory Board MCH Private Equity, Member of the Advisory Board Concord Realty LTD, Chairman Inmoan SL, Chairman 3 Avalon Private Equity SCR, Chairman Casa Grande de Salinas SL, Chairman Explotaciones al Alba SL, Chairman 3 Explotaciones San Anton SL, Chairman 3 Quantumacy, Member of the Advisory Board Cybolt, Member of the Board Hermes Germany GmbH, Member of the Supervisory Board 4 Hermes Parcelnet Ltd (known under the brand name "Evri"), Board Member 4 Al Mansart GP 1 S.à.r.l. (known under the brand name "Parfums de Marly"), Board Member (Class A Director) Advent International LP, Managing Partner 5 Advent International GmbH, Managing Director 5 Advent Investment Advisory GmbH, Managing Director 5 Lynda Tyler-Cagni None Only the Best, Director and CEO Eugenia M. Ulasewicz Signet Jewelers Ltd., Member of the Board of Directors Vince Holding Corporation, Member of the Board of Directors None 1 2 3 4 5 Acamar S.r.L. is a subsidiary of Laguna Partners AG 21 Invest S.p.A., 21 Invest SGR S.p.A. and 21 Invest France SAS are part of the same group of companies Inmoan SL, Explotaciones al Alba SL and Explotaciones San Anton SL are part of the same group of companies Hermes Germany GmbH and Hermes Parcelnet Ltd. are part of the same group of companies Advent International LP, Advent International GmbH and Advent Investment Advisory GmbH are part of the same group of companies Name Listed companies Not listed companies or organizations Members of Global Executive Committee Xavier Rossinyol Yves Gerster Freda Cheung Steve Johnson Luis Marin Enrique Urioste Pascal Duclos Camillo Rossotto Vijay Talwar Katrin Volery None None None None None None None Sextant Initiatives AG, Member of the Board of Directors 1 None None None None None Elite Consultoria Estrategica Ltda., Director Moebius Investments Ltd., Director Compagnia dei Caraibi, Member of the Board of Directors Dunelm Group PLC, Member of the Board of Directors None None None None 1 Sextant Initiatives AG is a non-active holding entity Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 332/336 Deloitte AG Pfingstweidstrasse 11 8005 Zürich Schweiz Phone: +41 (0)58 279 60 00 Fax: +41 (0)58 279 66 00 www.deloitte.ch Auditor’s Responsibilities for the Audit of the Remuneration ReportOur objectives are to obtain reasonable assurance about whether the information pursuant to Art. 734a-734f CO is free from ma-terial 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 and SA-CH will always de-tect a material misstatement when it exists. Misstatements 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 this re-muneration report.As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgement and maintain professional scep-ticism throughout the audit. We also:• Identify and assess the risks of material misstatement in the remuneration report, whether due to fraud or error, design and per-form audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.• Obtain an understanding of internal control relevant to the audit 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 Company’s internal control.• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclo-sures made.We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical re-quirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.Deloitte AG Andreas Bodenmann Fabian HellLicensed audit expert Licensed audit expert(Auditor in charge)To the General Meeting ofAvolta AG (formerly Dufry AG), BaselBasel, March 6, 2024Report on the Audit of the Remuneration Report according to Art. 734a-734f CO OpinionWe have audited the Remuneration Report of Avolta AG (the Company) for the year ended 31 December 2023. The audit was lim-ited to the information pursuant to Art. 734a-734f of the Swiss Code of Obligations (CO) in the sections “Remuneration of the Board of Directors”, ”Other remuneration, loans or credit facilities of the Board of Directors”, “Remuneration of the Global Executive Com-mittee”, ”Other remuneration, loans or credit facilities of the Global Executive Committee”, “Shareholdings of the members of the Board of Directors and the Global Executive Committee on December 31, 2023 and 2022“ and “Mandates outside of the company” on pages 311 to 331 of the remuneration report. In our opinion, the information pursuant to Art. 734a-734f CO in the accompanying remuneration report (pages 311 to 331) com-plies with Swiss law and the Company’s articles of incorporation.Basis for OpinionWe conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the “Auditor’s Responsibility for the Audit of the Remuneration Report” section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, 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. Other InformationThe Board of Directors is responsible for the other information. The other information comprises the information included in the an-nual report but does not include the sections marked “audited” in the Remuneration Report, the consolidated financial statements, the stand-alone financial statements and our auditor’s reports thereon.Our opinion on the Remuneration Report does not cover the other information and we do not express any form of assurance con-clusion thereon.In connection with our audit of the Remuneration Report, our responsibility is to read the other information and, in doing so, con-sider whether the other information is materially inconsistent with the audited financial information in the Remuneration Report, 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 re-quired to report that fact. We have nothing to report in this regard.Board of Directors' Responsibilities for the Remuneration ReportThe Board of Directors is responsible for the preparation of a Remuneration Report in accordance with the provisions of Swiss law and the Company's articles of incorporation, and for such internal control as the Board of Directors determines is necessary to en-able the preparation of a Remuneration Report that is free from material misstatement, whether due to fraud or error. It is also re-sponsible for designing the remuneration system and defining individual remuneration packages.Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 333/336 Deloitte AG Pfingstweidstrasse 11 8005 Zürich Schweiz Phone: +41 (0)58 279 60 00 Fax: +41 (0)58 279 66 00 www.deloitte.ch Auditor’s Responsibilities for the Audit of the Remuneration ReportOur objectives are to obtain reasonable assurance about whether the information pursuant to Art. 734a-734f CO is free from ma-terial 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 and SA-CH will always de-tect a material misstatement when it exists. Misstatements 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 this re-muneration report.As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgement and maintain professional scep-ticism throughout the audit. We also:• Identify and assess the risks of material misstatement in the remuneration report, whether due to fraud or error, design and per-form audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.• Obtain an understanding of internal control relevant to the audit 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 Company’s internal control.• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclo-sures made.We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical re-quirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.Deloitte AG Andreas Bodenmann Fabian HellLicensed audit expert Licensed audit expert(Auditor in charge)To the General Meeting ofAvolta AG (formerly Dufry AG), BaselBasel, March 6, 2024Report on the Audit of the Remuneration Report according to Art. 734a-734f CO OpinionWe have audited the Remuneration Report of Avolta AG (the Company) for the year ended 31 December 2023. The audit was lim-ited to the information pursuant to Art. 734a-734f of the Swiss Code of Obligations (CO) in the sections “Remuneration of the Board of Directors”, ”Other remuneration, loans or credit facilities of the Board of Directors”, “Remuneration of the Global Executive Com-mittee”, ”Other remuneration, loans or credit facilities of the Global Executive Committee”, “Shareholdings of the members of the Board of Directors and the Global Executive Committee on December 31, 2023 and 2022“ and “Mandates outside of the company” on pages 311 to 331 of the remuneration report. In our opinion, the information pursuant to Art. 734a-734f CO in the accompanying remuneration report (pages 311 to 331) com-plies with Swiss law and the Company’s articles of incorporation.Basis for OpinionWe conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the “Auditor’s Responsibility for the Audit of the Remuneration Report” section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, 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. Other InformationThe Board of Directors is responsible for the other information. The other information comprises the information included in the an-nual report but does not include the sections marked “audited” in the Remuneration Report, the consolidated financial statements, the stand-alone financial statements and our auditor’s reports thereon.Our opinion on the Remuneration Report does not cover the other information and we do not express any form of assurance con-clusion thereon.In connection with our audit of the Remuneration Report, our responsibility is to read the other information and, in doing so, con-sider whether the other information is materially inconsistent with the audited financial information in the Remuneration Report, 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 re-quired to report that fact. We have nothing to report in this regard.Board of Directors' Responsibilities for the Remuneration ReportThe Board of Directors is responsible for the preparation of a Remuneration Report in accordance with the provisions of Swiss law and the Company's articles of incorporation, and for such internal control as the Board of Directors determines is necessary to en-able the preparation of a Remuneration Report that is free from material misstatement, whether due to fraud or error. It is also re-sponsible for designing the remuneration system and defining individual remuneration packages.Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 334/336 Information for investors and media Registered shares Issuer Listing Type of security Ticker symbol ISIN-No. Swiss Security-No. Reuters Bloomberg Avolta AG SIX Swiss Exchange Registered shares AVOL CH0023405456 2340545 AVOL.S AVOL:SW Key dates in 2024 March 7, 2024 May 15, 2024 May 16, 2024 July 30, 2024 October 31, 2024 March 6, 2025 Results Fiscal Year 2023 Publication of Annual Report Annual General Meeting Trading Statement First Quarter 2024 Results First Half Year 2024 Trading Statement Third Quarter 2024 Results Fiscal Year 2024 Publication of Annual Report Senior Notes Issuer Listing Size of issue Interest rate Maturity ISIN-No. Issuer Listing Size of issue Interest rate Maturity ISIN-No. Issuer Listing Size of issue Interest rate Maturity ISIN-No. Issuer Listing Size of issue Interest rate Maturity ISIN-No. Dufry One B.V. The International Stock Exchange (“TISE”) EUR 800 million 2.5 % p.a., paid semi-annually October 15, 2024 XS1699848914 (Serie REG S) Dufry One B.V. The International Stock Exchange (“TISE”) CHF 300 million 3.625 % p.a., paid semi-annually April 15, 2026 XS2333565815 (Serie REG S) Dufry One B.V. The International Stock Exchange (“TISE”) EUR 750 million 2.0 % p.a., paid semi-annually February 15, 2027 XS2079388828 (Serie REG S) Dufry One B.V. The International Stock Exchange (“TISE”) EUR 725 million 3.375 % p.a., paid semi- annually April 15, 2028 XS2333564503 (Serie REG S) Senior convertible bonds Issuer Listing Size of issue Interest rate Maturity Convertible into Conversion price ISIN-No. Ticker symbol Dufry One B.V. SIX Swiss Exchange) CHF 500 million 0.75 % p.a., paid semi- annually March 30, 2026 Registered shares Avolta AG CHF 87.00 CH1105195684 DUF 21 Media contacts Cathy Jongens Director Corporate Communications Phone + 41 79 288 09 36 cathy.jongens@avolta.net Investor Relations Contacts Rebecca McClellan Global Head Investor Relations Phone +44 7543 800405 rebecca.mcclellan@avolta.net Address Corporate Headquarters Avolta AG Brunngässlein 12 P.O. Box 4010 Basel Switzerland Phone +41 61 266 44 44 avoltaworld.com Company’s website: Latest news: Articles of incorporation:  Financial reports: Information for investors and media Registered shares Issuer Listing Type of security Ticker symbol ISIN-No. Avolta AG SIX Swiss Exchange Registered shares AVOL CH0023405456 Swiss Security-No. 2340545 Reuters Bloomberg AVOL.S AVOL:SW Key dates in 2024 May 15, 2024 May 16, 2024 July 30, 2024 October 31, 2024 March 7, 2024 Results Fiscal Year 2023 Publication of Annual Report Annual General Meeting Maturity ISIN-No. Trading Statement First Quarter 2024 Trading Statement Third Quarter 2024 Results First Half Year 2024 Senior convertible bonds March 6, 2025 Results Fiscal Year 2024 Publication of Annual Report Senior Notes Issuer Listing Size of issue Interest rate Maturity ISIN-No. Issuer Listing Size of issue Interest rate Maturity ISIN-No. Issuer Listing Size of issue Interest rate Maturity ISIN-No. Issuer Listing Size of issue Interest rate Dufry One B.V. The International Stock Exchange (“TISE”) EUR 800 million 2.5 % p.a., paid semi-annually October 15, 2024 XS1699848914 (Serie REG S) Dufry One B.V. The International Stock Exchange (“TISE”) CHF 300 million 3.625 % p.a., paid semi-annually April 15, 2026 XS2333565815 (Serie REG S) Dufry One B.V. The International Stock Exchange (“TISE”) EUR 750 million 2.0 % p.a., paid semi-annually February 15, 2027 XS2079388828 (Serie REG S) Dufry One B.V. The International Stock Exchange (“TISE”) EUR 725 million 3.375 % p.a., paid semi- annually April 15, 2028 XS2333564503 (Serie REG S) Issuer Listing Size of issue Interest rate Maturity Convertible into Conversion price ISIN-No. Ticker symbol Dufry One B.V. SIX Swiss Exchange) CHF 500 million 0.75 % p.a., paid semi- annually March 30, 2026 Registered shares Avolta AG CHF 87.00 CH1105195684 DUF 21 Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 335/336 Media contacts Cathy Jongens Director Corporate Communications Phone + 41 79 288 09 36 cathy.jongens@avolta.net Investor Relations Contacts Rebecca McClellan Global Head Investor Relations Phone +44 7543 800405 rebecca.mcclellan@avolta.net Address Corporate Headquarters Avolta AG Brunngässlein 12 P.O. Box 4010 Basel Switzerland Phone +41 61 266 44 44 avoltaworld.com Company’s website: Latest news: Articles of incorporation:  Financial reports: Annual Report 2023 Management Report ESG Report Financial Report Governance Report Page 336/336 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 Avolta at the time of preparation of this Annual Report. Avolta 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 Avolta AG, Basel Concept, Production Tolxdorff Eicher, Horgen Design, Production Hilda ltd., Zurich Print Neidhart + Schön Group AG, Zurich © Avolta AG 2024 t r o p e R G S x e n n A 3 2 0 E 2 t r o p e R G S E x e n n A 3 2 0 2 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 Avolta at the time of preparation of this Annual Report. Avolta 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 Avolta AG, Basel Concept, Production Tolxdorff Eicher, Horgen Design, Production Hilda ltd., Zurich Print Neidhart + Schön Group AG, Zurich © Avolta AG 2024 ESG Report 2023 Annex ESG Report 2023 Annex ESG Report 2023 Annex About the Annex Avolta has aligned its ESG Report with the new guidelines of the Global Reporting Initiative (GRI) Standards 2021. Reporting in accordance with this international standard permits a more transparent and comparable approach to information and facilitates the tracking of sustainability performance indicators. In 2023, Avolta completed the business integration of the former entities Dufry and Autogrill, which includes also the development of a joint company and ESG strategy as disclosed in the respective chapters on pages 28 – 55 of the Annual Report 2023 and the ESG Report 2023. The ESG Report 2023 Annex forms part of the ESG Report, which together with the TCFD Report constitutes Avolta’s 2023 Non-Financial Reporting in accordance with the requirements regarding transparency on non-financial matters of Art. 964(a)-(c) of the Swiss Code of Obligations. The ESG Report is included in the Annual Report 2023 on page 97. The ESG Report 2023 Annex contains informa- tion presented in several tables with quantitative and qualitative indicators as per the GRI Standard indications. The GRI Content Index 2023, also included in the Annex, cross references indicators (GRI and SDG) and page numbers, serving as a comprehensive guide to where the information on each topic may be found – either in the Annual Report, the ESG Report, on the company website or in this Annex. Scope Avolta’s 2023 ESG Report covers the scope of the new combined entity and includes information from all the 73 countries where Avolta 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 2 – 7, 2 – 8, 2 – 21, 2 – 30; GRI 205-3 and GRI 401, 402, 403, 404, 405, 406, 407 & 410 – information is broken down by five geographical regions, following a similar structure to the one used in Avolta’s financial report: – HQ – Group Headquarters in Basel, Switzerland – Europe, Middle East & Africa – Asia Pacific – North America – Latin America. More information about each of the regions included may be found on pages 56 – 75 of the Annual Report 2023. Should you have any comments about the content of the report or want to know more about Avolta’s ESG engage- ment, please email us to: sustainability@avolta.net. Material Matters and Related Inside-Out Impacts, Outside-In Risks and Opportunities and Mitigation Below is a description of Avolta’s material matters. As required by the GRI Standards 2021, for each matter we list the actual and potential impacts generated by the company on the economy, environment and people, including the human rights, which were assessed as significant via the updated materiality assessment (“Impact materiality”). For each material matter identified, we report the inside-out impacts and outside-in risks and opportunities, which might influence Avolta’s results and performance identified as significant during a preliminary “double materiality” exercise (integrated by the “Financial materiality” perspective) in compliance with the require- ments regarding transparency on non-financial matters pursuant to article 964a et seqq. of the Swiss Code of Obligations (SCO). As a voluntary addition, the overview also draws inspiration from the European Sustainability Reporting Standards (ESRS) foreseen by the new Corpo- rate Sustainability Reporting Directive (CSRD). The over- view considers both own operations as well as business relationships, products and services related to the Group’s value chain. Although positive impacts and opportunities may arise as well, priority has been given to negative impacts and risks adopting a precautionary approach. In the ESG Report, we describe the prevention and mitigation measures in place to manage impacts, risks and opportunities. An exception has been made for the matter “Supporting Communities”, for which only positive impacts and oppor- tunities have been identified in light of the voluntary nature of initiatives to support and engage communities. Material Matters, Related Inside-Out Impacts, Outside-In Risks & Opportunities, Mitigation Material matter Inside-out impacts Outside-In risks and opportunities Mitigation by Avolta Sustainable sourcing & traceability Potential negative impact on Potential risk on the company See page 115 Adopt responsible sourcing practices people related to harmful sourcing limited traceability and responsible environment, animal welfare and reputation deriving from raw materials aiming at both improving the transparency & traceability and increasing the procurement of sustainable and certified products. practices. sourcing safeguards, and from the violation of animal welfare standards. Potential risk on the company business continuity due to raw material scarcity. Supply chain management Potential negative impact on Potential risk on the company See page 116 Ensure a responsible and ethical communities in terms of violations of socio-environmental performance not management of the supply chain, also human rights (including child and aligned with business and by partnering with suppliers attentive forced labor, adequate wages, stakeholders expectations. environment, people and affected reputation deriving from suppliers’ to their social and environmental collective bargaining, freedom of impacts. association, working time, adequate housing and non-discrimination), health and safety and environmental standards. Healthy and sustainable choice Potential negative impact on people Potential risk on the Group financial See page 117 Promote better travel experiences to a limited offer of sustainable, preferences towards more healthy offering a wide range of healthy and healthy and nutritious products. and sustainable choices. in terms of customers well-being due results due to the shift in customers Product quality & safety Potential negative impact on people Potential risk of non-compliance with See page 119 related to damages on customers regulations on product quality and health and safety. safety. Climate change, energy and Potential negative impact on the Potential risk on the company See page 123 emissions environment related to the generation business continuity deriving from the of greenhouse gas emissions. exposure to physical (extreme climatic events, rising of mean temperatures, etc.) and transition (evolving regulation, reputational damage, etc.) risks. sustainable products, good for both consumers’ and planet health. Provide high quality & safety standards for the products and ingredients used in all of the company’s channels. Reduce GHG emissions by applying a set of measures including energy efficiency initiatives, sustainable logistics and mobility, and green stores building. 2/18 3/18 ESG Report 2023 Annex ESG Report 2023 Annex ESG Report 2023 Annex Material Matters, Related Inside-Out Impacts, Outside-In Risks & Opportunities, Mitigation Material matter Inside-out impacts Outside-In risks and opportunities Mitigation by Avolta Sustainable sourcing & traceability Adopt responsible sourcing practices aiming at both improving the transparency & traceability and increasing the procurement of sustainable and certified products. Supply chain management Ensure a responsible and ethical management of the supply chain, also by partnering with suppliers attentive to their social and environmental impacts. The ESG Report 2023 Annex forms part of the ESG Below is a description of Avolta’s material matters. As Healthy and sustainable choice Promote better travel experiences offering a wide range of healthy and sustainable products, good for both consumers’ and planet health. page 97. The ESG Report 2023 Annex contains informa- (“Impact materiality”). For each material matter identified, Product quality & safety Provide high quality & safety standards for the products and ingredients used in all of the company’s channels. Climate change, energy and emissions Reduce GHG emissions by applying a set of measures including energy efficiency initiatives, sustainable logistics and mobility, and green stores building. About the Annex – HQ – Group Headquarters in Basel, Switzerland Avolta has aligned its ESG Report with the new guidelines – Europe, Middle East & Africa of the Global Reporting Initiative (GRI) Standards 2021. – Asia Pacific Reporting in accordance with this international standard – North America permits a more transparent and comparable approach to – Latin America. information and facilitates the tracking of sustainability performance indicators. More information about each of the regions included may be found on pages 56 – 75 of the Annual Report 2023. In 2023, Avolta completed the business integration of the Should you have any comments about the content of the former entities Dufry and Autogrill, which includes also report or want to know more about Avolta’s ESG engage- the development of a joint company and ESG strategy as ment, please email us to: sustainability@avolta.net. disclosed in the respective chapters on pages 28 – 55 of the Annual Report 2023 and the ESG Report 2023. Material Matters and Related Inside-Out Impacts, Outside-In Risks and Opportunities and Mitigation Report, which together with the TCFD Report constitutes required by the GRI Standards 2021, for each matter we Avolta’s 2023 Non-Financial Reporting in accordance with list the actual and potential impacts generated by the the requirements regarding transparency on non-financial company on the economy, environment and people, matters of Art. 964(a)-(c) of the Swiss Code of Obligations. including the human rights, which were assessed as The ESG Report is included in the Annual Report 2023 on significant via the updated materiality assessment tion presented in several tables with quantitative and we report the inside-out impacts and outside-in risks and qualitative indicators as per the GRI Standard indications. opportunities, which might influence Avolta’s results and performance identified as significant during a preliminary The GRI Content Index 2023, also included in the Annex, “double materiality” exercise (integrated by the “Financial cross references indicators (GRI and SDG) and page materiality” perspective) in compliance with the require- numbers, serving as a comprehensive guide to where the ments regarding transparency on non-financial matters information on each topic may be found – either in the pursuant to article 964a et seqq. of the Swiss Code of Annual Report, the ESG Report, on the company website Obligations (SCO). As a voluntary addition, the overview or in this Annex. Scope also draws inspiration from the European Sustainability Reporting Standards (ESRS) foreseen by the new Corpo- rate Sustainability Reporting Directive (CSRD). The over- Avolta’s 2023 ESG Report covers the scope of the new view considers both own operations as well as business combined entity and includes information from all the 73 relationships, products and services related to the countries where Avolta operates. For the general profile Group’s value chain. and most of the GRI indicators, the information reported is global (i.e.: relevant to the whole group). For staff- Although positive impacts and opportunities may arise as related indicators – GRI 2 – 7, 2 – 8, 2 – 21, 2 – 30; GRI well, priority has been given to negative impacts and risks 205-3 and GRI 401, 402, 403, 404, 405, 406, 407 & 410 – adopting a precautionary approach. In the ESG Report, information is broken down by five geographical regions, we describe the prevention and mitigation measures in following a similar structure to the one used in Avolta’s place to manage impacts, risks and opportunities. An exception has been made for the matter “Supporting Communities”, for which only positive impacts and oppor- tunities have been identified in light of the voluntary nature of initiatives to support and engage communities. financial report: 2/18 Potential negative impact on environment, animal welfare and people related to harmful sourcing practices. Potential risk on the company reputation deriving from raw materials limited traceability and responsible sourcing safeguards, and from the violation of animal welfare standards. See page 115 Potential risk on the company business continuity due to raw material scarcity. Potential risk on the company reputation deriving from suppliers’ socio-environmental performance not aligned with business and stakeholders expectations. See page 116 Potential negative impact on environment, people and affected communities in terms of violations of human rights (including child and forced labor, adequate wages, collective bargaining, freedom of association, working time, adequate housing and non-discrimination), health and safety and environmental standards. Potential negative impact on people in terms of customers well-being due to a limited offer of sustainable, healthy and nutritious products. Potential risk on the Group financial results due to the shift in customers preferences towards more healthy and sustainable choices. See page 117 Potential negative impact on people related to damages on customers health and safety. Potential risk of non-compliance with regulations on product quality and safety. See page 119 Potential negative impact on the environment related to the generation of greenhouse gas emissions. See page 123 Potential risk on the company business continuity deriving from the exposure to physical (extreme climatic events, rising of mean temperatures, etc.) and transition (evolving regulation, reputational damage, etc.) risks. 3/18 ESG Report 2023 Annex ESG Report 2023 Annex Material matter Inside-out impacts Outside-In risks and opportunities Mitigation by Avolta Material matter Inside-out impacts Outside-In risks and opportunities Mitigation by Avolta Waste and Packaging Reduce and mitigate environmental damages caused by the excessive production and/or inadequate disposal of waste, including food waste. Reduce the use of virgin plastic in packaging. Water and Biodiversity Implement processes to monitor and reduce water withdrawal in the operations and purchase materials and products preserving biodiversity. Diversity, Equity & Inclusion Support diversity by fostering an inclusive working environment and incorporate a culture of DE & I throughout the organization, to develop a diverse, inclusive leadership. Talent recruitment, engagement and retention Promote efforts in the attraction, recruitment and retention of talents in order to bring on board and cultivate the leaders of tomorrow. Encourage people to engage throughout the organization by listening to and understanding their needs. Employee Training and development Provide best training and performance development opportunities in order to foster employees personal and professional growth. See page 127 Health and Well-being Potential negative impact on people Potential risk of non-compliance See page 139 See page 131 Potential negative impact on the environment related to excessive production and/or inadequate disposal of waste, including food waste. Potential negative impact on the environment related to the exploitation and depletion of natural resources (such as virgin materials, etc.) and to the generation of packaging-related waste. Potential negative impact on the environment related to excessive withdrawal from areas with water stress and/or inefficient consumption of water. Potential negative impact on the environment related to loss of biodiversity and damage to natural ecosystems. Potential risk of non-compliance deriving from evolving legislation related to waste and product packaging. Potential risk on the company financial results due to the scarcity of packaging raw materials, leading to price volatility Potential risk of non-compliance deriving from evolving regulations regarding water discharge, deforestation and biodiversity. Potential risk on the company business continuity deriving from water scarcity. Potential risk on the company reputation deriving from the lack of initiatives and/or safeguards aimed at protecting biodiversity. Potential negative impact on people due to the perception of a not- inclusive culture, unable to recognize and valorize any kind of diversity, such as disability, gender, age, race, minorities, etc. Potential risk on the company reputation deriving from the inability to foster a diverse and inclusive culture that stimulates creativity and innovative thinking. See page 133 Potential negative impact on people in terms of inadequate selection process, retention measures not aligned with expectations and low engagement and motivation to contribute to the Group’s evolution path. Potential risk on the company productivity deriving from the incapacity to recruit all kinds of talent (considering also disability, gender, race, etc.) and retain key resources. Potential risk on the Group reputation due to a workplace culture that does not foster open dialogue and engagement. See page 136 Potential negative impact on people in terms of training programs that do not foster the acquisition and development of key competencies, and lack of personalized development and career paths. Potential risk on the company productivity deriving from upskilling and development programs not in line with the business strategy and goals. See page 137 Strengthen the culture of health and injuries. safety in the workplace through in terms of occupational illnesses and caused by the violation of workplace health and safety regulations. training and prevention programs Potential negative impact on people Potential risk on the company designed to reduce occupational in terms of physical and mental well- reputation and productivity due to low injuries and protect physical and being benefits and work-life balance employee satisfaction. mental wellbeing. protection not aligned with expectation. Human rights Potential negative impact on people Potential risk on the company See page 141 Foster respect for human rights and human rights violations – including violation, including child and forced workers’ rights along the entire value child and forced labor, adequate labor, adequate wages, collective chain. wages, collective bargaining, freedom bargaining, freedom of association, and affected communities in terms of reputation deriving from human rights of association, working time, adequate housing and non- discrimination. working time, adequate housing and non-discrimination. Supporting communities Potential positive impact on people Potential opportunity on the company See page 144 and the communities coming from reputation deriving from the Contribute to the development of tangible support to local economy fulfillment of the company’s local communities through through occupation, wealth and responsibility as corporate citizen and occupation, wealth and prosperity as prosperity. well as with dedicated community the ability to engage in strategic connections with the community. engagement and charitable initiatives. Potential positive impact deriving from the support to charitable organizations and NGOs, actively committed in contributing to social, environmental and economical development at local level. Non-Financial Risks & Opportunities The factors listed below represent the main risks and opportunities for Avolta based on its business model and the company strategy Destination 2027. These factors are regularly reviewed and adapted in line with changes in the company’s scope and the business model as well as to reflect new external developments. Detailed information on the business model is provided in the Strategy Chapter (pages 28 – 55), the ESG Report on pages (97 – 148) as well as in the Financial Report (pages 149 – 278) and the Corporate Governance Report (pages 279 – 309). With the publication of its TCFD Report, Avolta also provides greater detail on specific risks and opportunities arising specifically from climate change. Information provided in the TCFD Report is intended to complement topics included in the table below and is available as integral part of the Annual Report 2023 or on the Avolta Group website: Our Impact | Avolta. 4/18 5/18 ESG Report 2023 Annex ESG Report 2023 Annex Material matter Inside-out impacts Outside-In risks and opportunities Mitigation by Avolta Material matter Inside-out impacts Outside-In risks and opportunities Mitigation by Avolta Waste and Packaging Potential negative impact on the Potential risk of non-compliance See page 127 Health and Well-being Strengthen the culture of health and safety in the workplace through training and prevention programs designed to reduce occupational injuries and protect physical and mental wellbeing. Human rights Foster respect for human rights and workers’ rights along the entire value chain. Supporting communities Contribute to the development of local communities through occupation, wealth and prosperity as well as with dedicated community engagement and charitable initiatives. Potential negative impact on people in terms of occupational illnesses and injuries. Potential risk of non-compliance caused by the violation of workplace health and safety regulations. See page 139 Potential negative impact on people in terms of physical and mental well- being benefits and work-life balance protection not aligned with expectation. Potential risk on the company reputation and productivity due to low employee satisfaction. Potential negative impact on people and affected communities in terms of human rights violations – including child and forced labor, adequate wages, collective bargaining, freedom of association, working time, adequate housing and non- discrimination. Potential risk on the company reputation deriving from human rights violation, including child and forced labor, adequate wages, collective bargaining, freedom of association, working time, adequate housing and non-discrimination. See page 141 See page 144 Potential opportunity on the company reputation deriving from the fulfillment of the company’s responsibility as corporate citizen and the ability to engage in strategic connections with the community. Potential positive impact on people and the communities coming from tangible support to local economy through occupation, wealth and prosperity. Potential positive impact deriving from the support to charitable organizations and NGOs, actively committed in contributing to social, environmental and economical development at local level. Non-Financial Risks & Opportunities The factors listed below represent the main risks and opportunities for Avolta based on its business model and the company strategy Destination 2027. These factors are regularly reviewed and adapted in line with changes in the company’s scope and the business model as well as to reflect new external developments. Detailed information on the business model is provided in the Strategy Chapter (pages 28 – 55), the ESG Report on pages (97 – 148) as well as in the Financial Report (pages 149 – 278) and the Corporate Governance Report (pages 279 – 309). With the publication of its TCFD Report, Avolta also provides greater detail on specific risks and opportunities arising specifically from climate change. Information provided in the TCFD Report is intended to complement topics included in the table below and is available as integral part of the Annual Report 2023 or on the Avolta Group website: Our Impact | Avolta. Reduce and mitigate environmental production and/or inadequate related to waste and product damages caused by the excessive disposal of waste, including food packaging. environment related to excessive deriving from evolving legislation production and/or inadequate disposal of waste, including food waste. Potential risk on the company waste. Reduce the use of virgin plastic Potential negative impact on the financial results due to the scarcity of in packaging. environment related to the packaging raw materials, leading to exploitation and depletion of natural price volatility resources (such as virgin materials, etc.) and to the generation of packaging-related waste. Water and Biodiversity Potential negative impact on the Potential risk of non-compliance See page 131 Implement processes to monitor and withdrawal from areas with water regarding water discharge, reduce water withdrawal in the stress and/or inefficient consumption deforestation and biodiversity. environment related to excessive deriving from evolving regulations operations and purchase materials of water. and products preserving biodiversity. Potential negative impact on the business continuity deriving from environment related to loss of water scarcity. Potential risk on the company biodiversity and damage to natural ecosystems. Potential risk on the company reputation deriving from the lack of initiatives and/or safeguards aimed at protecting biodiversity. Diversity, Equity & Inclusion Potential negative impact on people Potential risk on the company See page 133 Support diversity by fostering an inclusive culture, unable to recognize to foster a diverse and inclusive inclusive working environment and and valorize any kind of diversity, such culture that stimulates creativity and incorporate a culture of DE & I as disability, gender, age, race, innovative thinking. due to the perception of a not- reputation deriving from the inability throughout the organization, to minorities, etc. develop a diverse, inclusive leadership. Talent recruitment, engagement Potential negative impact on people Potential risk on the company See page 136 and retention in terms of inadequate selection productivity deriving from the Promote efforts in the attraction, aligned with expectations and low (considering also disability, gender, recruitment and retention of talents in engagement and motivation to race, etc.) and retain key resources. process, retention measures not incapacity to recruit all kinds of talent order to bring on board and cultivate contribute to the Group’s evolution the leaders of tomorrow. Encourage path. people to engage throughout the organization by listening to and understanding their needs. Potential risk on the Group reputation due to a workplace culture that does not foster open dialogue and engagement. Employee Training and development Potential negative impact on people Potential risk on the company See page 137 Provide best training and performance development in terms of training programs that do productivity deriving from upskilling not foster the acquisition and and development programs not in line development of key competencies, with the business strategy and goals. opportunities in order to foster and lack of personalized development employees personal and professional and career paths. growth. 4/18 5/18 ESG Report 2023 Annex ESG Report 2023 Annex Risks Risk Factors Reduction in passenger & traveler traffic and changes in customer behavior Potential Impact Our Response Risk Factors Potential Impact Our Response – Any event outside our control that causes a reduction of traveler & passenger traffic in among others airports & airlines, railway stations, ferries and cruise lines as well as motorways could adversely affect our business. – The same applies to economic conditions and political changes, which influence customer sentiment as well as traveling and spending behavior. – Business diversification has always been and will continue to be a key strategic element to mitigate risks and drive company growth. – Diversification by geographies, sectors and channels to mitigate the impact of regional or local phenomena. – Information on sales split by geographies, sectors, channels and products categories is available on pages 8 – 9 of the Annual Report 2023. Market & political risks – Operating in a – Changes in the regulatory framework in – Diversification by geographies and by highly regulated environment individual markets can positively or customs regime reducing exposure to local – Travel Retail and F&B in general is a highly profitability of the company at local or – Broad product and food assortment regulated industry, as operators: group level. negatively impact sales performance or legislation. Risks related to pandemics – The COVID-19 pandemic is an example of how governmental restrictions to reduce traveling and personal contacts as a result of a pandemic strongly reduce domestic and international travel, passenger traffic and therefore impact the travel retail industry and our business. Winning and extending concessions – Travel retail and travel F&B is typically a highly competitive concession business. Avolta competes with other travel retailers and F&B operators at global, regional and local levels in obtaining and maintaining concessions at airports and in other travel channels. Within a specific location (airport, cruise ship, train station, motorway location, casino or alike) the number of concessions is typically limited and includes a de-facto exclusivity. – Failing to win or extend a concession can prevent Avolta – or any competitor – from entering a specific location until the concession comes up again for renewal. – Concession contracts can be subject to revocations and modifications, which can negatively affect the performance of the company at the particular location or at corporate level. 6/18 – We immediately took action to protect health and safety of our employees and customers through our Health & Safety Protocol, fully aligning it with local regulations in the locations we operate. – Various processes and risk mitigation strategies being in place already prior to the COVID-19 pandemic have enabled us to react quickly and effectively on this specific situation. – We have taken a location-by-location and shop-shop-by-shop approach to assess opportunities to keep shops and restaurants open or reopen them as soon as possible. – We have adapted the company organization and processes to the new business environment to reduce costs and applied an increased control on cash management. – We have secured the resilience of the company by defining a new strategy – Destination 2027 – implementing a variety of refinancing initiatives focusing on liquidity and a strong financial position. – We expect to be well positioned for the ongoing recovery phase and to be able to engage in strategic initiatives to accelerate growth going forward. – Avolta maintains a highly diversified concession portfolio of over 5,100 shops across over 1,000 locations in 73 countries with an average remaining life-time of currently over 7 years. – Concessions are well balanced throughout emerging and developed markets; the largest concession accounts for less than 4 % and the ten biggest concessions for around 28 % of sales. – Local presence in all key markets, allows Avolta to monitor opportunities at global level to compete for attractive contracts. – have to adhere to the same regulatory framework with respect to commercial activities as well as local product and health & safety requirements as local retailers and restaurant operators in any specific country. – can additionally be impacted by changes in the taxation and customs allowance systems of individual countries. – have to follow product disclosure and health legislation as well as security requirements issued by the airline and airport industry. Customer data privacy and cyber security – Potential impact on both the operational – Avolta manages its IT, data protection and readiness of the business as well as with cyber security risks through its Global IT respect to reputation in the case of issues Security Team responsible to assess, with customer data. constantly adapted to new customer preferences. – Strong and long-term partnerships with airport authorities and other concession partners. Mutual trust and shared objectives with these concession partners are key for value creation. – Cooperation with industry associations to lobby for the industry’s interests. identify and implement protective measures to mitigate existing and potential new risks. – Avolta’s Group Data Protection Policy defines requirements to process third party transactions, fulfills the EU General Data Protection Regulation (GDPR) and ensures compliance with international data protection laws such as among others the Payment Card Industry Data Security Standard (PCI DSS) and the Sarbanes-Oxley Act (SOX). – The company regularly does cyber security trainings helping to sensitize employees and increase their alertness for these topics. – A detailed description on cyber security is available on page 121 of the ESG Report. – Avolta maintains a global customer service platform, where any issues can be reported online and / or by personal contact 24 / 7. Availability and retention of human capital – The capability of employing and retaining a – Create an attractive working environment, skilled workforce is a key success factor in which considers the specific skills needed the company. by our employees (e.g. foreign languages, – By directly engaging with our customers – This is particularly true for our shop and shift working, security requirements etc.) from over 150 nationalities and ethnicities restaurant staff, who normally have higher and offer fair compensation schemes. our employees are key success factors to and different skill requirements than in – Foster equal opportunities, without any kind drive sales and customer satisfaction. traditional high-street retail and F&B of discrimination. operations. – Create wealth at the local communities’ level. Customer behavior – Changes in customer behavior as well as – Avolta regularly performs customer surveys the capability to provide the right services several times per year to early identify – Avolta welcomes daily customers from over can influence sales performance of our potential changes in customer behavior and 150 nationalities, many of them having operations locally and globally. preferences. different purchasing, dining behaviors and product preferences. – In cooperation with our brand partners our procurement teams identify new trends and customer needs to optimize our dining offerings and product assortments. 7/18 ESG Report 2023 Annex ESG Report 2023 Annex Potential Impact Our Response Risk Factors Potential Impact Our Response – Changes in the regulatory framework in – Diversification by geographies and by Risks Risk Factors Reduction in passenger & traveler traffic and – Any event outside our control that causes a – Business diversification has always been changes in customer behavior reduction of traveler & passenger traffic in and will continue to be a key strategic Risks related to pandemics – The COVID-19 pandemic is an example of – We immediately took action to protect among others airports & airlines, railway element to mitigate risks and drive stations, ferries and cruise lines as well as company growth. motorways could adversely affect our – Diversification by geographies, sectors and business. channels to mitigate the impact of regional – The same applies to economic conditions or local phenomena. and political changes, which influence – Information on sales split by geographies, customer sentiment as well as traveling and sectors, channels and products categories spending behavior. is available on pages 8 – 9 of the Annual Report 2023. how governmental restrictions to reduce health and safety of our employees and traveling and personal contacts as a result customers through our Health & Safety of a pandemic strongly reduce domestic Protocol, fully aligning it with local and international travel, passenger traffic regulations in the locations we operate. and therefore impact the travel retail – Various processes and risk mitigation industry and our business. strategies being in place already prior to the COVID-19 pandemic have enabled us to react quickly and effectively on this specific situation. – We have taken a location-by-location and shop-shop-by-shop approach to assess opportunities to keep shops and restaurants open or reopen them as soon as possible. – We have adapted the company organization and processes to the new business environment to reduce costs and applied an increased control on cash management. – We have secured the resilience of the company by defining a new strategy – Destination 2027 – implementing a variety of refinancing initiatives focusing on liquidity and a strong financial position. – We expect to be well positioned for the ongoing recovery phase and to be able to engage in strategic initiatives to accelerate growth going forward. cruise ship, train station, motorway location, casino or alike) the number of concessions is typically limited and includes a de-facto exclusivity. 4 % and the ten biggest concessions for around 28 % of sales. – Local presence in all key markets, allows Avolta to monitor opportunities at global level to compete for attractive contracts. 6/18 Market & political risks – Operating in a highly regulated environment – Travel Retail and F&B in general is a highly regulated industry, as operators: – have to adhere to the same regulatory framework with respect to commercial activities as well as local product and health & safety requirements as local retailers and restaurant operators in any specific country. – can additionally be impacted by changes in the taxation and customs allowance systems of individual countries. – have to follow product disclosure and health legislation as well as security requirements issued by the airline and airport industry. Customer data privacy and cyber security individual markets can positively or negatively impact sales performance or profitability of the company at local or group level. – Potential impact on both the operational readiness of the business as well as with respect to reputation in the case of issues with customer data. customs regime reducing exposure to local legislation. – Broad product and food assortment constantly adapted to new customer preferences. – Strong and long-term partnerships with airport authorities and other concession partners. Mutual trust and shared objectives with these concession partners are key for value creation. – Cooperation with industry associations to lobby for the industry’s interests. – Avolta manages its IT, data protection and cyber security risks through its Global IT Security Team responsible to assess, identify and implement protective measures to mitigate existing and potential new risks. – Avolta’s Group Data Protection Policy defines requirements to process third party transactions, fulfills the EU General Data Protection Regulation (GDPR) and ensures compliance with international data protection laws such as among others the Payment Card Industry Data Security Standard (PCI DSS) and the Sarbanes-Oxley Act (SOX). – The company regularly does cyber security trainings helping to sensitize employees and increase their alertness for these topics. – A detailed description on cyber security is available on page 121 of the ESG Report. – Avolta maintains a global customer service platform, where any issues can be reported online and / or by personal contact 24 / 7. – Create an attractive working environment, which considers the specific skills needed by our employees (e.g. foreign languages, shift working, security requirements etc.) and offer fair compensation schemes. – Foster equal opportunities, without any kind of discrimination. – Create wealth at the local communities’ level. Customer behavior – Changes in customer behavior as well as – Avolta regularly performs customer surveys – Avolta welcomes daily customers from over 150 nationalities, many of them having different purchasing, dining behaviors and product preferences. the capability to provide the right services can influence sales performance of our operations locally and globally. several times per year to early identify potential changes in customer behavior and preferences. – In cooperation with our brand partners our procurement teams identify new trends and customer needs to optimize our dining offerings and product assortments. 7/18 Winning and extending concessions – Failing to win or extend a concession can – Avolta maintains a highly diversified – Travel retail and travel F&B is typically a entering a specific location until the across over 1,000 locations in 73 countries highly competitive concession business. concession comes up again for renewal. with an average remaining life-time of prevent Avolta – or any competitor – from concession portfolio of over 5,100 shops Availability and retention of human capital – The capability of employing and retaining a skilled workforce is a key success factor in the company. Avolta competes with other travel retailers – Concession contracts can be subject to currently over 7 years. – By directly engaging with our customers – This is particularly true for our shop and and F&B operators at global, regional and revocations and modifications, which can – Concessions are well balanced throughout local levels in obtaining and maintaining negatively affect the performance of the emerging and developed markets; the concessions at airports and in other travel company at the particular location or at largest concession accounts for less than channels. Within a specific location (airport, corporate level. from over 150 nationalities and ethnicities our employees are key success factors to drive sales and customer satisfaction. restaurant staff, who normally have higher and different skill requirements than in traditional high-street retail and F&B operations. ESG Report 2023 Annex ESG Report 2023 Annex Risk Factors Potential Impact Our Response Risk Factors Potential Impact Our Response Suppliers & product availability – The ability to maintain and develop supply – Avolta operates a centralized global Health & safety risks – Injury, illness or fatality can influence – The first level of health and safety provisions – As a “pure” travel retailer & F&B operator, Avolta does not develop nor produce any products nor private labels. relationships to source products from global and local brands and suppliers requested by customers is a key success factor. procurement department, which directly manages its supply chain with owners of global brands. Additionally, particularly for the F&B business as well as for local products, sourcing is done through local suppliers. – Avolta’s global brand portfolio as well as the access to renowned local suppliers represents a valuable asset for concession partners, when we compete for concessions. – Legal or compliance issues, especially incidents of corruption, can generate related costs, penalties, loss of lease agreements, black-listings as well as reputational damage. These impacts can occur locally, but also affect the company globally. – In its Code of Conduct, Avolta stipulates provisions on how it expects employees, directors and officers to conduct business. The dedicated Global Compliance department monitors the respect of the respective set of company policies. – In addition, a comprehensive risk management is established structured into three levels (see page 112 of the ESG Report). For risks of corruption in connection with external partners, Avolta has a procedure in place that requires to perform due diligence and to vet all external partners such as joint venture partners, consultants for business development projects, counterparts to M&A transactions and other similar counterparts. In addition, regular reassessment on existing external partners in conducted. – Through the Avolta Supplier Code of Conduct, the company extends its scope of compliance to its supply chain. – Employees receive regular compliance trainings and awareness raising communications. – Avolta’s ESG Strategy covers the different aspects of sustainability. – The company has defined emission reduction goals (for the former Dufry business) and discloses emissions on Scope 1, 2 and 3 for the whole scope. These objectives (for the former Dufry scope) have been validated by the Science Based Targets initiative (SBTi). – Avolta has a dedicated Shop & Restaurant Design Strategy to develop sustainable shops and restaurants with respect to reduced energy consumption, use of recyclable materials and circular economy for refurbishments. – Avolta is replacing its single-use plastic usage with sustainable and alternatives, where possible (see details page 128 of the ESG Report). – Environmental legislation and requirements can affect cost of energy consumption for transportation as well as the operation of shop, restaurant and office premises within the company. – Legislation on use of packaging material (e.g. single use plastics) and circular economy can influence business procedures. Legal & compliance – Within its course of business, there is a risk that the company could violate laws and regulations at local level regarding business conduct and regulations, including, among others, bribery, corruption, fraud, discrimination, unauthorized use of personal data. – The company could be involved in lawsuits, claims of various natures, investigations and other business related legal proceedings. Climate change & environmental risks – Avolta does not develop nor produce own products nor does it operate any kind of manufacturing sites. – Products are mainly sourced directly from brand owners and are delivered either to our Distribution Centers, wholesalers or directly to the shops and restaurants. – Transportation of goods from the supplier’s production sites to the Avolta’s Distribution Centers, wholesalers or directly to the shops and restaurants is covered within the responsibility of the suppliers. – From an energy perspective Avolta includes in its scope consumption at office buildings and covers its supply chain from the Distribution Center to the shops. These premises are mostly rented with low possibility to influence construction. – Avolta develops its own shop & restaurant design and the respective guidelines. 8/18 – Except for employees working in office- reputational damage, which can impact our and safety programs, to which our buildings, Avolta’s workforce mostly financial and business performance. employees have to adhere to and for which operational readiness and generate is defined by concession partners’ health operates in highly regulated areas such as airports, cruise ships & ferries, train stations, motorways as well as seaports and similar environments. Thus, we have two levels of health and safety provisions: the own company ones and those established by the respective concession partner. – Fire, health pandemics, terrorist attacks and other external factors can be risks to our employees and customers. Financial risks, ability to borrow funds – Financial Risks can impact the company’s – Avolta has two strategic growth pillars: and / or fund raising profitability, liquidity and financial position. organic growth and M&A. they are specifically trained. – Avolta’s own health and safety regulations are applied on top of the location specific ones and include group-wide regulations and guidelines. – In the context of the COVID-pandemic Avolta implemented an additional Global Health & Safety Protocol to protect both employees and customers. The protocol includes our internal guidelines and is flexible enough to adapt to the local regulations in the countries and locations of our operations. – A detailed description of the Health & Safety management process is described on pages 139 – 141 of the ESG Report. – Within organic growth the company successfully extends existing contracts, adds additional retail space in existing locations and wins new concessions contributing to the increase of its global footprint. – We continue to focus on M&A as it offers the opportunity for strategic add-on acquisitions in travel retail and F&B as well as for accessing new and adjacent travel related markets. – M&A often allows to leverage an existing local organization thus increasing profitability. 9/18 ESG Report 2023 Annex ESG Report 2023 Annex Risk Factors Potential Impact Our Response Risk Factors Potential Impact Our Response Suppliers & product availability – The ability to maintain and develop supply – Avolta operates a centralized global Health & safety risks – Except for employees working in office- buildings, Avolta’s workforce mostly operates in highly regulated areas such as airports, cruise ships & ferries, train stations, motorways as well as seaports and similar environments. Thus, we have two levels of health and safety provisions: the own company ones and those established by the respective concession partner. – Fire, health pandemics, terrorist attacks and other external factors can be risks to our employees and customers. – Injury, illness or fatality can influence operational readiness and generate reputational damage, which can impact our financial and business performance. Financial risks, ability to borrow funds and / or fund raising – Financial Risks can impact the company’s profitability, liquidity and financial position. – As a “pure” travel retailer & F&B operator, global and local brands and suppliers manages its supply chain with owners of Avolta does not develop nor produce any requested by customers is a key success global brands. Additionally, particularly for relationships to source products from procurement department, which directly products nor private labels. factor. Legal & compliance – Legal or compliance issues, especially – In its Code of Conduct, Avolta stipulates incidents of corruption, can generate provisions on how it expects employees, – Within its course of business, there is a risk related costs, penalties, loss of lease directors and officers to conduct business. that the company could violate laws and agreements, black-listings as well as The dedicated Global Compliance regulations at local level regarding business reputational damage. These impacts can department monitors the respect of the conduct and regulations, including, among occur locally, but also affect the company respective set of company policies. others, bribery, corruption, fraud, discrimination, unauthorized use of personal data. – The company could be involved in lawsuits, claims of various natures, investigations and other business related legal proceedings. globally. Climate change & environmental risks – Environmental legislation and requirements – Avolta’s ESG Strategy covers the different can affect cost of energy consumption for aspects of sustainability. – Avolta does not develop nor produce own transportation as well as the operation of – The company has defined emission products nor does it operate any kind of shop, restaurant and office premises within reduction goals (for the former Dufry manufacturing sites. the company. business) and discloses emissions on Scope – Products are mainly sourced directly from – Legislation on use of packaging material 1, 2 and 3 for the whole scope. These brand owners and are delivered either to (e.g. single use plastics) and circular objectives (for the former Dufry scope) have our Distribution Centers, wholesalers or economy can influence business been validated by the Science Based directly to the shops and restaurants. procedures. – Transportation of goods from the supplier’s production sites to the Avolta’s Distribution Centers, wholesalers or directly to the shops and restaurants is covered within the responsibility of the suppliers. – From an energy perspective Avolta includes in its scope consumption at office buildings and covers its supply chain from the Distribution Center to the shops. These premises are mostly rented with low possibility to influence construction. – Avolta develops its own shop & restaurant design and the respective guidelines. 8/18 the F&B business as well as for local products, sourcing is done through local suppliers. – Avolta’s global brand portfolio as well as the access to renowned local suppliers represents a valuable asset for concession partners, when we compete for concessions. – In addition, a comprehensive risk management is established structured into three levels (see page 112 of the ESG Report). For risks of corruption in connection with external partners, Avolta has a procedure in place that requires to perform due diligence and to vet all external partners such as joint venture partners, consultants for business development projects, counterparts to M&A transactions and other similar counterparts. In addition, regular reassessment on existing external partners in conducted. – Through the Avolta Supplier Code of Conduct, the company extends its scope of compliance to its supply chain. – Employees receive regular compliance trainings and awareness raising communications. Targets initiative (SBTi). – Avolta has a dedicated Shop & Restaurant Design Strategy to develop sustainable shops and restaurants with respect to reduced energy consumption, use of recyclable materials and circular economy for refurbishments. – Avolta is replacing its single-use plastic usage with sustainable and alternatives, where possible (see details page 128 of the ESG Report). – The first level of health and safety provisions is defined by concession partners’ health and safety programs, to which our employees have to adhere to and for which they are specifically trained. – Avolta’s own health and safety regulations are applied on top of the location specific ones and include group-wide regulations and guidelines. – In the context of the COVID-pandemic Avolta implemented an additional Global Health & Safety Protocol to protect both employees and customers. The protocol includes our internal guidelines and is flexible enough to adapt to the local regulations in the countries and locations of our operations. – A detailed description of the Health & Safety management process is described on pages 139 – 141 of the ESG Report. – Avolta has two strategic growth pillars: organic growth and M&A. – Within organic growth the company successfully extends existing contracts, adds additional retail space in existing locations and wins new concessions contributing to the increase of its global footprint. – We continue to focus on M&A as it offers the opportunity for strategic add-on acquisitions in travel retail and F&B as well as for accessing new and adjacent travel related markets. – M&A often allows to leverage an existing local organization thus increasing profitability. 9/18 ESG Report 2023 Annex ESG Report 2023 Annex Information on employees and other workers (using GRI coding) 2-7 Employees Employees by employment contract and gender (HC) Female Permanent Fixed-term Non-guaranteed hours Male Permanent Fixed-term Non-guaranteed hours Other / Not disclosed Permanent Fixed-term Non-guaranteed hours Total Employees by employment type and gender (HC) Female Full-time Part-time Male Full-time Part-time Other / Not disclosed Full-time Part-time Total HQ 63 61 2 0 85 84 1 0 n/a n/a n/a n/a 148 HQ 63 45 18 85 82 3 n/a n/a n/a 148 EMEA North America LATAM APAC Total 19,704 19,806 3,988 2,671 46,232 19,709 3,632 16,551 3,017 136 97 0 12,675 11,826 10,551 2,052 72 n/a n/a n/a n/a 11,806 20 0 105 105 0 0 356 0 2,574 2,337 237 0 n/a n/a n/a n/a 1,146 1,286 239 41,099 4,758 375 3,465 30,625 899 2,423 143 n/a n/a n/a n/a 25,677 4,733 215 105 105 0 0 32,379 31,737 6,562 6,136 76,962 EMEA North America LATAM APAC Total 19,704 19,806 3,988 2,671 46,232 9,895 9,809 17,248 2,558 3,696 292 2,229 442 33,113 13,119 12,675 11,826 2,574 3,465 30,625 8,579 4,096 n/a n/a n/a 10,638 1,188 105 79 26 2,515 59 n/a n/a n/a 3,067 398 n/a n/a n/a 24,881 5,744 105 79 26 32,379 31,737 6,562 6,136 76,962 * The data considers only the following EMEA F&B operations: Austria, Belgium, Denmark, France, Greece, Italy, Netherlands, Slovenia, Sweden and Türkiye 2-30 Collective bargaining agreements Employees covered by collective bargaining (%) HQ EMEA North America LATAM Percentage of employees covered by collective 100 % 66 % 55 % 65 % bargaining agreements APAC 23 % Total 58 % 202-2 Proportion of senior management hired from the local community Full-time senior managers active at 31/12 (%) HQ EMEA North America LATAM Percentage of senior managers from local 26 % 84 % n/a 77 % communities APAC 94 % Total 40 % 204-1 Proportion of spending on local suppliers In 2023 Avolta’s spent on local suppliers for its retail business amounted to around 30 % of global retail COGS. 306-3/4/5 Waste generated, waste diverted from disposal, and waste directed to disposal Waste recovered/diverted from disposal (by recovery operation) and directed to disposal (by disposal operation) (t)* Waste generated Of which recovered (Preparation for reuse / Recycling / Other operation) Of which disposed – Landfill – Incenerator – with energy recover – Incenerator – without energy recover – Other disposal methods Hazardous Non-Hazardous Total 14.4 9.5 4.9 0 1.5 3.2 0.2 21,393.2 6,955.5 14,437.8 5,829.0 2,904.4 4,960.7 743.6 21,407.6 6,965.1 14,442.7 5,829.0 2,905.9 4,963.8 743.9 2-8 Workers who are not employees Workers who are not employees by gender (HC) Female Male Other / Not disclosed Total 10/18 HQ 4 2 n/a 6 EMEA North America LATAM APAC 1,757 1,360 n/a 3,117 n/a n/a n/a n/a 254 257 n/a 511 112 86 n/a 198 Total 2,127 1,705 n/a 3,832 11/18 ESG Report 2023 Annex ESG Report 2023 Annex Information on employees and other workers 2-30 Collective bargaining agreements Employees by employment contract and gender (HC) EMEA North America LATAM APAC Total 19,704 19,806 3,988 2,671 46,232 19,709 3,632 202-2 Proportion of senior management hired from the local community 12,675 11,826 3,465 30,625 Full-time senior managers active at 31/12 (%) HQ EMEA North America LATAM Percentage of senior managers from local communities 26 % 84 % n/a 77 % APAC 94 % Total 40 % Employees covered by collective bargaining (%) HQ EMEA North America LATAM Percentage of employees covered by collective bargaining agreements 100 % 66 % 55 % 65 % APAC 23 % Total 58 % 204-1 Proportion of spending on local suppliers In 2023 Avolta’s spent on local suppliers for its retail business amounted to around 30 % of global retail COGS. Employees by employment type and gender (HC) EMEA North America LATAM APAC Total 19,704 19,806 3,988 2,671 46,232 306-3/4/5 Waste generated, waste diverted from disposal, and waste directed to disposal Waste recovered/diverted from disposal (by recovery operation) and directed to disposal (by disposal operation) (t)* Waste generated Of which recovered (Preparation for reuse / Recycling / Other operation) Of which disposed – Landfill – Incenerator – with energy recover – Incenerator – without energy recover – Other disposal methods Hazardous Non-Hazardous Total 14.4 9.5 4.9 0 1.5 3.2 0.2 21,393.2 6,955.5 14,437.8 5,829.0 2,904.4 4,960.7 743.6 21,407.6 6,965.1 14,442.7 5,829.0 2,905.9 4,963.8 743.9 32,379 31,737 6,562 6,136 76,962 * The data considers only the following EMEA F&B operations: Austria, Belgium, Denmark, France, Greece, Italy, Netherlands, Slovenia, Sweden and Türkiye 2-8 Workers who are not employees Workers who are not employees by gender (HC) HQ EMEA North America LATAM APAC HQ 63 61 2 0 85 84 1 0 n/a n/a n/a n/a 148 HQ 63 45 18 85 82 3 n/a n/a n/a 148 4 2 6 n/a 32,379 31,737 6,562 6,136 76,962 16,551 3,017 136 10,551 2,052 72 n/a n/a n/a n/a 9,895 9,809 8,579 4,096 n/a n/a n/a 1,757 1,360 n/a 3,117 11,806 97 0 20 0 105 105 0 0 17,248 2,558 10,638 1,188 105 79 26 356 0 2,574 2,337 237 0 n/a n/a n/a n/a 3,696 292 2,515 59 n/a n/a n/a 1,146 1,286 239 899 2,423 143 n/a n/a n/a n/a 2,229 442 3,067 398 n/a n/a n/a n/a n/a n/a n/a 254 257 n/a 511 112 86 n/a 198 41,099 4,758 375 25,677 4,733 215 105 105 0 0 33,113 13,119 24,881 5,744 105 79 26 Total 2,127 1,705 n/a 3,832 12,675 11,826 2,574 3,465 30,625 11/18 (using GRI coding) 2-7 Employees Non-guaranteed hours Female Permanent Fixed-term Male Permanent Fixed-term Non-guaranteed hours Other / Not disclosed Permanent Fixed-term Non-guaranteed hours Other / Not disclosed Total Female Full-time Part-time Male Full-time Part-time Full-time Part-time Total Female Male Total 10/18 Other / Not disclosed ESG Report 2023 Annex ESG Report 2023 Annex 401-1 New employee hires and employee turnover Note that Avolta mainly operates in airports that have a very marked seasonal pattern and traffic, especially in the Europe, Africa & Middle East and Latin 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 summer period. Wherever possible, Avolta employs the same staff year after year. However, these seasonal employment contracts are accounted as new hires in the table below and therefore also impact the turnover figures. Employees who left by age and gender (HC) EMEA North America LATAM APAC Total EMEA North America LATAM 10,787 16,979 6,381 3,308 1,098 10,674 5,013 1,292 8,191 10,363 5,442 2,164 585 n/a n/a n/a n/a 6,054 3,352 957 174 105 59 10 1,248 765 442 50 862 563 257 42 n/a n/a n/a n/a APAC 1,538 1,076 405 57 2,225 983 1,219 23 n/a n/a n/a n/a Total 30,569 18,893 9,178 2,498 21,650 13,042 6,997 1,611 174 105 59 10 18,978 27,516 2,110 3,763 52,393 Outgoing turnover by age and gender (%) EMEA North America LATAM 49 % 82 % 16,697 25,722 1,300 2,833 46,577 Female <30 30 – 50 >50 Male <30 30 – 50 >50 <30 30 – 50 >50 Total Female <30 30 – 50 >50 Male <30 30 – 50 >50 <30 30 – 50 >50 Total Other / Non disclosed Other / Non disclosed 724 400 294 30 576 298 246 32 n/a n/a n/a n/a 18 % 31 % 13 % 6 % 22 % 37 % 17 % 11 % n/a n/a n/a n/a 1,110 755 290 65 1,723 1,335 361 27 n/a n/a n/a n/a APAC 42 % 50 % 29 % 40 % 50 % 61 % 31 % 29 % n/a n/a n/a n/a 9,699 16,180 6,998 9,419 5,393 3,169 1,137 4,460 1,871 667 n/a n/a n/a n/a 109 % 32 % 23 % 114 % 31 % 25 % n/a n/a n/a n/a 9,993 4,811 1,376 5,270 3,088 1,061 123 84 32 7 148 % 61 % 27 % 125 % 67 % 35 % 117 % 179 % 62 % 117 % 81 % 7 % 55 % 80 % HQ 19 4 13 2 6 1 3 2 n/a n/a n/a n/a 25 HQ 30 % 100 % 33 % 10 % 100 % 5 % 8 % n/a n/a n/a n/a HQ 12 27,732 16,545 8,577 2,610 18,722 11,364 5,569 1,789 123 84 32 7 Total 60 % 114 % 41 % 24 % 61 % 102 % 42 % 29 % 117 % 179 % 62 % 117 % 61 % Total 8 13/18 Total 66 % 130 % 44 % 23 % 71 % 117 % 52 % 26 % 166 % 223 % 113 % 167 % 68 % 17 % 52 % 20 % 46 % 402-1 Minimum notice periods regarding operational changes Minimum number of weeks (n) EMEA North America LATAM APAC Minimum number of weeks to provide notice 5 13 3 4 for operational changes 55 % 86 % 128 % 33 % 23 % 158 % 64 % 25 % 65 % 88 % APAC 58 % 71 % 41 % 35 % 64 % 45 % 105 % 25 % n/a n/a n/a n/a 31 % 59 % 20 % 10 % 33 % 70 % 18 % 14 % n/a n/a n/a n/a 144 % 73 % 32 % 166 % 223 % 113 % 167 % 87 % 139 % 36 % 22 % n/a n/a n/a n/a EMEA North America LATAM 32 % 61 % HQ 17 6 10 1 9 0 5 4 n/a n/a n/a n/a 26 HQ 27 % 150 % 26 % 5 % 11 % 0 % 9 % 15 % n/a n/a n/a n/a 18 % 59 % New hires by age and gender (HC) Female <30 30 – 50 >50 Male <30 30 – 50 >50 Other / Non disclosed <30 30 – 50 >50 Total Ingoing turnover by age and gender (%) Female <30 30 – 50 >50 Male <30 30 – 50 >50 Other / Non disclosed <30 30 – 50 >50 Total 12/18 ESG Report 2023 Annex ESG Report 2023 Annex Employees who left by age and gender (HC) Female <30 30 – 50 >50 Male <30 30 – 50 >50 Other / Non disclosed <30 30 – 50 >50 Total Outgoing turnover by age and gender (%) Female <30 30 – 50 >50 Male <30 30 – 50 >50 Other / Non disclosed <30 30 – 50 >50 Total 401-1 New employee hires and employee turnover Note that Avolta mainly operates in airports that have a very marked seasonal pattern and traffic, especially in the Europe, Africa & Middle East and Latin 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 summer period. Wherever possible, Avolta employs the same staff year after year. However, these seasonal employment contracts are accounted as new hires in the table below and therefore also impact the turnover figures. New hires by age and gender (HC) EMEA North America LATAM Ingoing turnover by age and gender (%) EMEA North America LATAM 18,978 27,516 2,110 3,763 52,393 HQ 17 6 10 1 9 0 5 4 n/a n/a n/a n/a 26 HQ 27 % 150 % 26 % 5 % 11 % 0 % 9 % 15 % n/a n/a n/a n/a 6,381 3,308 1,098 5,442 2,164 585 n/a n/a n/a n/a 128 % 33 % 23 % 139 % 36 % 22 % n/a n/a n/a n/a 10,787 16,979 8,191 10,363 55 % 86 % 65 % 88 % 10,674 5,013 1,292 6,054 3,352 957 174 105 59 10 158 % 64 % 25 % 144 % 73 % 32 % 166 % 223 % 113 % 167 % 87 % 1,248 765 442 50 862 563 257 42 n/a n/a n/a n/a 31 % 59 % 20 % 10 % 33 % 70 % 18 % 14 % n/a n/a n/a n/a APAC 1,538 1,076 405 57 2,225 983 1,219 23 n/a n/a n/a n/a APAC 58 % 71 % 41 % 35 % 64 % 45 % 105 % 25 % n/a n/a n/a n/a Total 30,569 18,893 9,178 2,498 21,650 13,042 6,997 1,611 174 105 59 10 Total 66 % 130 % 44 % 23 % 71 % 117 % 52 % 26 % 166 % 223 % 113 % 167 % 68 % 18 % 59 % 32 % 61 % Other / Non disclosed Other / Non disclosed Female <30 30 – 50 >50 Male <30 30 – 50 >50 <30 30 – 50 >50 Total Female <30 30 – 50 >50 Male <30 30 – 50 >50 <30 30 – 50 >50 Total 12/18 EMEA North America LATAM APAC Total 9,699 16,180 5,393 3,169 1,137 9,993 4,811 1,376 6,998 9,419 4,460 1,871 667 n/a n/a n/a n/a 5,270 3,088 1,061 123 84 32 7 724 400 294 30 576 298 246 32 n/a n/a n/a n/a 1,110 755 290 65 1,723 1,335 361 27 n/a n/a n/a n/a 27,732 16,545 8,577 2,610 18,722 11,364 5,569 1,789 123 84 32 7 16,697 25,722 1,300 2,833 46,577 EMEA North America LATAM HQ 19 4 13 2 6 1 3 2 n/a n/a n/a n/a 25 HQ 30 % 49 % 82 % 100 % 33 % 10 % 109 % 32 % 23 % 148 % 61 % 27 % 7 % 55 % 80 % 100 % 5 % 8 % n/a n/a n/a n/a 114 % 31 % 25 % n/a n/a n/a n/a 17 % 52 % 125 % 67 % 35 % 117 % 179 % 62 % 117 % 81 % APAC 42 % 50 % 29 % 40 % 50 % 61 % 31 % 29 % n/a n/a n/a n/a 18 % 31 % 13 % 6 % 22 % 37 % 17 % 11 % n/a n/a n/a n/a 20 % 46 % Total 60 % 114 % 41 % 24 % 61 % 102 % 42 % 29 % 117 % 179 % 62 % 117 % 61 % Total 8 13/18 402-1 Minimum notice periods regarding operational changes Minimum number of weeks (n) Minimum number of weeks to provide notice for operational changes HQ 12 EMEA North America LATAM APAC 5 13 3 4 ESG Report 2023 Annex ESG Report 2023 Annex 403-8 Workers covered by an occupational health and safety management system Employees covered by an occupational H&S management system (HC) Employees covered by an occupational H&S system Employees covered by an occupational H&S system, that has been internally audited Employees covered by an occupational H&S system, that has been audited or certified by an external party (e.g. ISO 45001) HQ 148 0 0 EMEA North America* LATAM 29,500 31,737 4,601 APAC 1,212 Total 35,461 15,327 4,721 0 0 2,319 2,313 1,368 19,014 132 7,166 Total number of employees 148 32,379 31,737 6,562 6,136 76,962 Employees covered by an occupational H&S management system (%) Employees covered by an occupational H&S system Employees covered by an occupational H&S system, that has been internally audited Employees covered by an occupational H&S system, that has been audited or certified by an external party (e.g. ISO 45001) 100 % 0 % 0 % 91 % 47 % 15 % 100 % 0 % 0 % 70 % 35 % 35 % 20 % 22 % 2 % 46 % 25 % 9 % *For North America, data refers to employees covered by the Workers’ Compensation Policy. 403-9 Work-related injuries Injuries of employees by type of incident (n) Work related injuries – of which high-consequence work-related injuries (excluding fatalities) Main types of work-related injury Fatalities Hours worked HQ 0 0 0 EMEA North America LATAM APAC Total 960 12 1,452 9 93 0 53 10 2,558 31 Bruises and contusions, sprains and strains, cuts and wounds , burnings, and to a minor extent fractures 0 0 0 0 0 Female Director / Management 265,715 45,240,353 40,296,400 11,303,149 11,518,082 108,623,698 405-1 Diversity of governance bodies and employees Employees by associate category, age and gender (HC) EMEA North America LATAM 19,704 19,806 3,988 Rate of fatalities as a result of work-related injury Rate of high-consequence work-related injuries Rate of recordable work-related injury 0 0 0 0 0.27 21.22 0 0.22 36.03 0 0 8.23 0 0.87 4.60 0 0.29 23.55 404-1 Average hours of training per year per employee Average training hours by gender and associate category (n) Female Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff 14/18 HQ n/a n/a n/a n/a n/a EMEA North America LATAM APAC Total 7 5 4 22 7 33 3 3 31 34 17 9 7 21 18 10 7 4 13 10 19 5 5 27 20 Average training hours by gender and associate category (n) EMEA North America LATAM APAC Total Male Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff Other/Not disclosed Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff Total Training hours by type (n) Operative skills Managerial skills Technical skills Health & Safety and Quality Compliance Other Total Admin & Professionals Sales & Ops Managers Sales & Ops Staff <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 EMEA North America LATAM APAC Total 67,184 35,490 51,321 50,714 16,549 21,659 944,402 42,934 12,490 1,067,009 73,052 21,721 15,087 2,343 6,285 17,947 4,928 4,068 0 25,584 4,455 7,239 10,005 11,321 4,050 119,282 98,229 80,734 34,281 50,293 242,916 1,056,605 100,745 49,560 1,449,827 HQ n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a HQ n/a n/a n/a n/a n/a n/a n/a HQ 63 26 0 20 6 37 4 19 14 0 0 0 0 0 0 0 0 8 3 3 24 6 n/a n/a n/a n/a n/a 8 302 17 210 75 964 174 579 211 1,021 97 664 260 17,417 4,678 8,428 4,311 34 2 3 35 35 n/a n/a n/a n/a n/a 33 228 7 113 108 130 9 70 51 1,988 479 1,127 382 17,460 6,272 6,541 4,647 13 10 5 17 14 n/a n/a n/a n/a n/a 15 92 2 57 33 329 60 204 65 152 28 93 31 3,415 1,196 1,867 352 7 3 3 10 7 n/a n/a n/a n/a n/a 8 APAC 2,671 63 2 45 16 213 78 124 11 101 19 70 12 2,294 1,415 755 124 18 3 4 28 18 n/a n/a n/a n/a n/a 19 Total 46,232 711 28 445 238 1,673 325 996 352 3,262 623 1,954 685 40,586 13,561 17,591 9,434 15/18 ESG Report 2023 Annex ESG Report 2023 Annex system (HC) system system (%) system 403-8 Workers covered by an occupational health and safety management system Employees covered by an occupational H&S management EMEA North America* LATAM Employees covered by an occupational H&S 29,500 31,737 4,601 APAC 1,212 Total 35,461 Employees covered by an occupational H&S system, that has been internally audited Employees covered by an occupational H&S system, that has been audited or certified by an external party (e.g. ISO 45001) 15,327 4,721 0 0 2,319 2,313 1,368 19,014 132 7,166 Total number of employees 148 32,379 31,737 6,562 6,136 76,962 Employees covered by an occupational H&S management Employees covered by an occupational H&S 100 % Employees covered by an occupational H&S system, that has been internally audited Employees covered by an occupational H&S system, that has been audited or certified by an external party (e.g. ISO 45001) *For North America, data refers to employees covered by the Workers’ Compensation Policy. 91 % 47 % 15 % 100 % 0 % 0 % 70 % 35 % 35 % 20 % 22 % 2 % 46 % 25 % 9 % 403-9 Work-related injuries Work related injuries – of which high-consequence work-related injuries (excluding fatalities) Fatalities Hours worked Rate of fatalities as a result of work-related injury Rate of high-consequence work-related injuries Rate of recordable work-related injury Female Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff 14/18 960 12 0 0 0.27 21.22 7 5 4 22 7 1,452 9 0 0 0.22 36.03 33 3 3 31 34 93 0 0 0 0 8.23 17 9 7 21 18 53 10 2,558 31 0 0 0.87 4.60 10 7 4 13 10 0 0 0.29 23.55 19 5 5 27 20 404-1 Average hours of training per year per employee Average training hours by gender and associate category (n) EMEA North America LATAM APAC Total HQ 148 0 0 0 % 0 % HQ 0 0 0 0 0 0 HQ n/a n/a n/a n/a n/a Average training hours by gender and associate category (n) Male Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff Other/Not disclosed Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff Total Training hours by type (n) Operative skills Managerial skills Technical skills Health & Safety and Quality Compliance Other Total HQ n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a HQ n/a n/a n/a n/a n/a n/a n/a EMEA North America LATAM APAC Total 8 3 3 24 6 n/a n/a n/a n/a n/a 8 34 2 3 35 35 n/a n/a n/a n/a n/a 33 13 10 5 17 14 n/a n/a n/a n/a n/a 15 7 3 3 10 7 n/a n/a n/a n/a n/a 8 18 3 4 28 18 n/a n/a n/a n/a n/a 19 EMEA North America LATAM APAC Total 67,184 35,490 51,321 50,714 16,549 21,659 944,402 42,934 12,490 1,067,009 73,052 21,721 15,087 2,343 6,285 17,947 4,928 4,068 0 25,584 4,455 7,239 10,005 11,321 4,050 119,282 98,229 80,734 34,281 50,293 242,916 1,056,605 100,745 49,560 1,449,827 Injuries of employees by type of incident (n) EMEA North America LATAM APAC Total 405-1 Diversity of governance bodies and employees Employees by associate category, age and gender (HC) Main types of work-related injury Bruises and contusions, sprains and strains, cuts and wounds , burnings, Female and to a minor extent fractures Director / Management 265,715 45,240,353 40,296,400 11,303,149 11,518,082 108,623,698 Admin & Professionals Sales & Ops Managers Sales & Ops Staff <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 HQ 63 26 0 20 6 37 4 19 14 0 0 0 0 0 0 0 0 EMEA North America LATAM 19,704 19,806 3,988 302 17 210 75 964 174 579 211 1,021 97 664 260 17,417 4,678 8,428 4,311 228 7 113 108 130 9 70 51 1,988 479 1,127 382 17,460 6,272 6,541 4,647 92 2 57 33 329 60 204 65 152 28 93 31 3,415 1,196 1,867 352 APAC 2,671 63 2 45 16 213 78 124 11 101 19 70 12 2,294 1,415 755 124 Total 46,232 711 28 445 238 1,673 325 996 352 3,262 623 1,954 685 40,586 13,561 17,591 9,434 15/18 ESG Report 2023 Annex ESG Report 2023 Annex 405-1 Diversity of governance bodies and employee Employees with disability by employee category, age and gender (HC) HQ EMEA North America LATAM APAC Total Employees by associate category, age and gender (HC) Male Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff Other/Non disclosed Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 HQ 85 66 0 44 22 19 1 14 4 0 0 0 0 0 0 0 0 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a EMEA North America LATAM 12,675 11,826 376 4 216 156 639 116 371 152 1,021 100 648 273 10,639 3,703 4,845 2,091 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 241 6 119 116 69 9 37 23 1,475 284 798 393 10,041 3,912 3,647 2,482 105 0 0 0 0 14 0 14 0 1 1 0 0 90 46 38 6 2,574 107 2 56 49 395 83 233 79 153 24 114 15 1,919 700 1,059 160 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a APAC 3,465 90 0 64 26 206 69 126 11 250 33 196 21 2,919 2,104 780 35 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Total 30,625 880 12 499 369 1,328 278 781 269 2,899 441 1,756 702 25,518 10,419 10,331 4,768 105 0 0 0 0 14 0 14 0 1 1 0 0 90 46 38 6 Total 148 32,379 31,737 6,562 6,136 76,962 16/18 Female Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff Male Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff Other/Non disclosed Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff Total 0 0 0 0 0 0 0 0 0 0 n/a n/a n/a n/a n/a 0 295 0 12 8 275 224 1 8 7 208 n/a n/a n/a n/a n/a 519 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 33 0 4 0 29 40 0 10 0 30 n/a n/a n/a n/a n/a 73 3 0 0 0 3 2 0 0 0 2 n/a n/a n/a n/a n/a 5 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk Avolta is unaware of any operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be at risk. As a participant of the UN Global Compact, Avolta endorses the concept and right to exercise freedom of association. Moreover, and as stipulated in Avolta´s Supplier Code of Conduct, Avolta suppliers shall not supply any products or services to Avolta that have been manufactured, assembled, or packaged in violation of internationally-accepted human rights standards and applicable laws and regulations in relation to labor and working conditions, and more specifically, in respect of the rights of employees to form and join trade unions and bargain collectively in accordance with applicable law. 410-1 Security personnel trained in human rights policies or procedures Avolta does not employ in-house security personnel of its own. This is largely due to the fact that its retail stores and F&B operations are overwhelmingly located in airports, railway stations, motorways and on cruise ships (98 % of 2023 global sales), where secu- rity is already strict and generally provided by e.g. the airport authority or cruise line itself. Where security personnel are required and contracted, Avolta expects its secu- rity service contractors to act in a manner consistent with local and national laws as well as with applicable human rights standards. Avolta outsources this service to trustworthy providers, regulated by local governments and with a reputable track-record of services, including 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 Avolta. 331 0 16 8 307 266 1 18 7 240 n/a n/a n/a n/a n/a 597 17/18 ESG Report 2023 Annex ESG Report 2023 Annex 405-1 Diversity of governance bodies and employee Employees by associate category, age and gender (HC) EMEA North America LATAM 12,675 11,826 HQ 85 66 0 44 22 19 1 14 4 0 0 0 0 0 0 0 0 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 376 4 216 156 639 116 371 152 1,021 100 648 273 10,639 3,703 4,845 2,091 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 241 6 119 116 69 9 37 23 1,475 284 798 393 10,041 3,912 3,647 2,482 105 0 0 0 0 14 0 14 0 1 1 0 0 90 46 38 6 2,574 107 2 56 49 395 83 233 79 153 24 114 15 1,919 700 1,059 160 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a APAC 3,465 90 0 64 26 206 69 126 11 250 33 196 21 2,919 2,104 780 35 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Total 30,625 880 12 499 369 1,328 278 781 269 2,899 441 1,756 702 25,518 10,419 10,331 4,768 105 0 0 0 0 14 0 14 0 1 1 0 0 90 46 38 6 <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 <30 30 – 50 >50 Total 148 32,379 31,737 6,562 6,136 76,962 Male Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff Other/Non disclosed Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff 16/18 Employees with disability by employee category, age and gender (HC) HQ EMEA North America LATAM APAC Total Female Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff Male Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff Other/Non disclosed Director / Management Admin & Professionals Sales & Ops Managers Sales & Ops Staff Total 0 0 0 0 0 0 0 0 0 0 n/a n/a n/a n/a n/a 0 295 0 12 8 275 224 1 8 7 208 n/a n/a n/a n/a n/a 519 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 33 0 4 0 29 40 0 10 0 30 n/a n/a n/a n/a n/a 73 3 0 0 0 3 2 0 0 0 2 n/a n/a n/a n/a n/a 5 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk Avolta is unaware of any operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be at risk. As a participant of the UN Global Compact, Avolta endorses the concept and right to exercise freedom of association. Moreover, and as stipulated in Avolta´s Supplier Code of Conduct, Avolta suppliers shall not supply any products or services to Avolta that have been manufactured, assembled, or packaged in violation of internationally-accepted human rights standards and applicable laws and regulations in relation to labor and working conditions, and more specifically, in respect of the rights of employees to form and join trade unions and bargain collectively in accordance with applicable law. 410-1 Security personnel trained in human rights policies or procedures Avolta does not employ in-house security personnel of its own. This is largely due to the fact that its retail stores and F&B operations are overwhelmingly located in airports, railway stations, motorways and on cruise ships (98 % of 2023 global sales), where secu- rity is already strict and generally provided by e.g. the airport authority or cruise line itself. Where security personnel are required and contracted, Avolta expects its secu- rity service contractors to act in a manner consistent with local and national laws as well as with applicable human rights standards. Avolta outsources this service to trustworthy providers, regulated by local governments and with a reputable track-record of services, including 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 Avolta. 331 0 16 8 307 266 1 18 7 240 n/a n/a n/a n/a n/a 597 17/18 ESG Report 2023 Annex 415-1 Public Policy For Avolta it is important to engage in discussions with various stakeholders – from policymakers, legislators and regulators to representatives of the business community and society – to understand relevant issues and to help find constructive solutions to current challenges. When it comes to political and charitable contributions, as established in the Avolta Code of Conduct, Avolta 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 Avolta. Avolta does not make direct or indirect contributions to political causes that can present corruption risks, because they can be used to exert undue influence on the political process. 416-1 Assessment of the health and safety impacts of product and service categories We are committed to ensuring that every product and meal we sell is safe. Our procurement teams focus on preventing issues occurring by sourcing products from a reliable supply base. Some of the products that Avolta sells are heavily regulated – especially alcohol and tobacco but also beauty, as well as food and beverages. Avolta complies with all regu- lations and rules related to the products sold in the countries where it operates. 416-2 Incidents of non-compliance concerning H&S impacts of products and services Incidents of non-compliance (n)* Incidents of non-compliance with regulations resulting in a fine or penalty Incidents of non-compliance with regulations resulting in a warning Incidents of non-compliance with voluntary codes Total 31/12/2023 15 9 7 31 * The incidents of non-compliance regarding the health and safety impacts of products and services reported in 2023 mainly concern minor accidents, all of which have been carefully handled by the associate in charge of Quality, Health and Safety Management to tighten the company’s standards. 18/18 t n e t n o C I R G 3 2 0 2 x e d n I ESG Report 2023 Annex 415-1 Public Policy For Avolta it is important to engage in discussions with various stakeholders – from policymakers, legislators and regulators to representatives of the business community and society – to understand relevant issues and to help find constructive solutions to current challenges. When it comes to political and charitable contributions, as established in the Avolta Code of Conduct, Avolta 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 Avolta. Avolta does not make direct or indirect contributions to political causes that can present corruption risks, because they can be used to exert undue influence on the political process. 416-1 Assessment of the health and safety impacts of product and service categories We are committed to ensuring that every product and meal we sell is safe. Our procurement teams focus on preventing issues occurring by sourcing products from a reliable supply base. Some of the products that Avolta sells are heavily regulated – especially alcohol and tobacco but also beauty, as well as food and beverages. Avolta complies with all regu- lations and rules related to the products sold in the countries where it operates. 416-2 Incidents of non-compliance concerning H&S impacts of products and services Incidents of non-compliance (n)* Incidents of non-compliance with regulations resulting in a fine or penalty Incidents of non-compliance with regulations resulting in a warning Incidents of non-compliance with voluntary codes 31/12/2023 15 9 7 31 * The incidents of non-compliance regarding the health and safety impacts of products and services reported in 2023 mainly concern minor accidents, all of which have been carefully handled by the associate in charge of Quality, Health and Safety Management to tighten the company’s standards. Total 18/18 t n e t n o C I R G 3 2 0 2 x e d n I GRI Content Index 2023 Avolta Annual Report 2023 GRI Content Index 2023 Avolta Annual Report 2023 GRI Content Index 2023 Page indications in this Index refer to the 2023 Avolta Annual Report unless otherwise noted. Avolta’s 2023 ESG Report applies Global Reporting Initiative (GRI) Universal Standards: 2016*, 2018* and 2021* which refer to the Standards’ issue date, not the date of the information presented in this report. Statement of use Avolta has reported “in accordance with GRI Standards” for the period from 1 January 2023 to 31 December 2023. GRI 1 used GRI 1: Foundation 2021 Applicable GRI Sector Standard(s) N/A: The GRI Sector Standards for the F&B and retail industries have not yet been published. GRI Standard/ other source Disclosure SDG Page Number and/or URL Omission Requirement(s) Omitted Reason Explanation GRI Sector Standard Ref. No. General Disclosures GRI 2: General Disclosures 2021 2-1 Organizational details 2-2 Entities included in the organization’s sustainability reporting 2-3 Reporting period, frequency and contact point 2-4 Restatements of information 21; 24-27; 56-75; 280-285 266-267 Pg. 2 ESG Report 2023 Annex 7 March 2024 There are no restatements of information in this report, since 2023 is the first reporting year for Avolta 2-5 External assurance No GRI Standard/ other source Disclosure SDG Page Number and/or URL Reason Explanation Omission Requirement(s) Omitted GRI Sector Standard Ref. No. Avolta´s ESG Report, as well as the ESG Report Annex, GRI Index, and TCFD report are revised and approved by the 111-113; 298-299 No critical issues raised. 298-299 Avolta´s Board is regularly updated on new issues and concerns that may have an impact over the sustainable development of the business. 296 BoD 293 311-331 311-331 311-331 2-15 Conflicts of 16.6 2-13 Delegation of responsibility for managing impacts 2-14 Role of the highest governance body in sustainability reporting interest 2-16 Communication of critical concerns 2-17 Collective knowledge of the highest governance body 2-18 Evaluation of the performance of the highest governance body policies 2-19 Remuneration 2-20 Process to determine remuneration 2-21 Annual total compensation ratio 56-75; 101-102; 110-111 10.3 8.5 Pg. 10 ESG Report 2023 Annex Pg. 10 ESG Report 2023 Annex 2-6 Activities, value chain and other business relationships 2-7 Employees 2-8 Workers who are not employees 2-9 Governance structure and composition 2-10 Nomination and selection of the highest governance body 5.5; 16.7 287-299 279-309 2-11 Chair of the highest governance body 2-12 Role of the highest governance body in overseeing the management of impacts 16.6 287-291 5.5; 16.7 279-309; 296-297 2/9 3/9 Headquartered in Switzer- land, Avolta operates in 73 countries with different economic development levels and with very varied labor markets. The compensation we offer is based on regular market analyses of the respective positions as well as the employee’s skill set and performance. As far as possible, we strive to offer all our employees comparable compensation structures and monitor compliance with minimum standards. The ratio of the annual compensation of the highest-paid employee and any median can vary greatly depending on the market spread between countries and other external influences, such as exchange rates etc. For this reason, we do not consider the requested information to be relevant to assessing the fairness of our compensation structures. GRI Content Index 2023 Avolta Annual Report 2023 GRI Content Index 2023 Avolta Annual Report 2023 GRI Standard/ other source Disclosure SDG Page Number and/or URL Omission Requirement(s) Omitted Reason Explanation GRI Sector Standard Ref. No. 296 Avolta´s ESG Report, as well as the ESG Report Annex, GRI Index, and TCFD report are revised and approved by the BoD 16.6 293 111-113; 298-299 No critical issues raised. 298-299 Avolta´s Board is regularly updated on new issues and concerns that may have an impact over the sustainable development of the business. 311-331 311-331 311-331 2-13 Delegation of responsibility for managing impacts 2-14 Role of the highest governance body in sustainability reporting 2-15 Conflicts of interest 2-16 Communication of critical concerns 2-17 Collective knowledge of the highest governance body 2-18 Evaluation of the performance of the highest governance body 2-19 Remuneration policies 2-20 Process to determine remuneration 2-21 Annual total compensation ratio Headquartered in Switzer- land, Avolta operates in 73 countries with different economic development levels and with very varied labor markets. The compensation we offer is based on regular market analyses of the respective positions as well as the employee’s skill set and performance. As far as possible, we strive to offer all our employees comparable compensation structures and monitor compliance with minimum standards. The ratio of the annual compensation of the highest-paid employee and any median can vary greatly depending on the market spread between countries and other external influences, such as exchange rates etc. For this reason, we do not consider the requested information to be relevant to assessing the fairness of our compensation structures. GRI Content Index 2023 Page indications in this Index refer to the 2023 Avolta Annual Report unless otherwise noted. Avolta’s 2023 ESG Report applies Global Reporting Initiative (GRI) Universal Standards: 2016*, 2018* and 2021* which refer to the Standards’ issue date, not the date of the information presented in this report. Avolta has reported “in accordance with GRI Standards” for the period from 1 January 2023 to Statement of use GRI 1 used Applicable GRI Sector Standard(s) 31 December 2023. GRI 1: Foundation 2021 N/A: The GRI Sector Standards for the F&B and retail industries have not yet been published. Disclosure SDG Page Number and/or URL Reason Explanation Omission Requirement(s) Omitted GRI Sector Standard Ref. No. General Disclosures GRI Standard/ other source GRI 2: General Disclosures 2021 2-1 Organizational 21; 24-27; 56-75; 280-285 266-267 Pg. 2 ESG Report 2023 Annex 7 March 2024 There are no restatements of information in this report, since 2023 is the first reporting year for Avolta 56-75; 101-102; 110-111 details 2-2 Entities included in the organization’s sustainability reporting 2-3 Reporting period, frequency and contact point 2-4 Restatements of information 2-6 Activities, value chain and other business relationships 2-8 Workers who are not employees 2-9 Governance structure and composition 2-5 External assurance No 2-7 Employees Pg. 10 ESG Report 2023 Annex 10.3 8.5 Pg. 10 ESG Report 2023 Annex 287-299 2-10 Nomination and selection of the highest 5.5; 16.7 279-309 governance body 2-11 Chair of the highest governance body 2-12 Role of the highest governance body in overseeing the 5.5; 16.7 management of impacts 16.6 287-291 279-309; 296-297 2/9 3/9 GRI Content Index 2023 Avolta Annual Report 2023 GRI Content Index 2023 Avolta Annual Report 2023 GRI Standard/ other source Disclosure SDG Page Number and/or URL Omission Requirement(s) Omitted Reason Explanation GRI Sector Standard Ref. No. Disclosure SDG Page Number and/or URL Reason Explanation Omission Requirement(s) Omitted GRI Sector Standard Ref. No. 2-22 Statement on sustainable development strategy 2-23 Policy commitments 2-24 Embedding policy commitments 2-25 Processes to remediate negative impacts 2-26 Mechanisms for seeking advice and raising concerns 2-27 Compliance with laws and regulations 2-28 Membership associations 2-29 Approach to stakeholder engagement 12-20, 98 ESG Strategy at: www.avoltaworld.com 100; 108-109, 111-113; ESG Strategy, Code of Conduct, Supplier Code of Conduct, HR Policy at: www.avoltaworld.com 111-113 ESG Strategy, Code of Conduct, Supplier Code of Conduct, HR Policy at: www.avoltaworld.com 134-135 Code of Conduct and HR Policy at: www.avoltaworld.com In 2023 there were no significant incidents of non- compliance with laws and regulations 110-111 101-102; 110-111 2-30 Collective bargaining agreements 8.8 141; Pg. 14 ESG Report 2023 Annex Material Topics GRI 3: Material Topics 2021 3-1 Process to determine material topics 3-2 List of material topics Material matter: Water and Biodiversity 3-3 Management of material topics 102 103 131 GRI 3: Material Topics 2021 GRI 303: Water and effluents 2018 4/9 303-1 Interactions with water as a shared resource 303-3 Water withdrawals 6.4 131 131 The information is unavailable/incomplete. Avolta is committed to improve its management and monitoring practices related to water, aiming at collecting and providing quantitative performance indicators in future reporting years. 5/9 GRI Standard/ other source GRI 3: Material Topics 2021 GRI 202: Market Presence 2016 GRI 204: 2016 GRI 3: Material Topics 2021 Material matter: Supporting communities 3-3 Management of material topics 142-148 202-2 Proportion of senior management hired from the local community 8.5 Pg. 11 ESG Report 2023 Annex 204-1 Proportion of 8.3 Pg. 11 ESG Report 2023 Annex Procurement spending on local Practices suppliers Material matter: Climate change, energy and emissions 3-3 Management of material topics GRI 302: 302-1 Energy Energy 2016 consumption within the organization 302-3 Energy intensity 123-127 125 7.2 7.3 8.4 12.2 13.1 12.4 13.1 14.3 15.2 (40.3 MWh/MCHF net sales). For the retail sector only, the energy intensity is calculated over the total square meters of commercial surface and amounts to 283.2 kWh/m² GRI 305: Emissions 2016 305-1 Direct (Scope 1) 125 GHG emissions 305-2 Energy indirect (Scope 2) GHG emissions 305-3 Other indirect (Scope 3) GHG emissions 305-4 GHG emissions Intensity 305-5 Reduction of GHG emissions 125 125 125 125 Material matter: Waste and packaging GRI 3: Material Topics 2021 3-3 Management of material topics GRI 306: 306-1 Waste Waste 2020 generation and significant waste- related impacts 306-2 Management of significant waste- related impacts 127-130 129 129-130 6.6 11.6 12.4 12.5 Pg. 11 ESG Report 2023 Annex GRI Content Index 2023 Avolta Annual Report 2023 GRI Content Index 2023 Avolta Annual Report 2023 GRI Standard/ other source Disclosure SDG Page Number and/or URL Reason Explanation Omission Requirement(s) Omitted GRI Sector Standard Ref. No. GRI Standard/ other source Disclosure SDG Page Number and/or URL Omission Requirement(s) Omitted Reason Explanation GRI Sector Standard Ref. No. 2-22 Statement on sustainable development strategy 2-23 Policy commitments 2-24 Embedding policy commitments 2-25 Processes to remediate negative impacts 2-26 Mechanisms for seeking advice and raising concerns 2-27 Compliance with laws and regulations 2-28 Membership associations 2-29 Approach to stakeholder engagement 12-20, 98 ESG Strategy at: www.avoltaworld.com 100; 108-109, 111-113; ESG Strategy, Code of Conduct, Supplier Code of Conduct, HR Policy at: www.avoltaworld.com 111-113 ESG Strategy, Code of Conduct, Supplier Code of Conduct, HR Policy at: www.avoltaworld.com 134-135 Code of Conduct and HR Policy at: www.avoltaworld.com In 2023 there were no significant incidents of non- compliance with laws and regulations 110-111 101-102; 110-111 2-30 Collective 8.8 141; Pg. 14 ESG Report 2023 bargaining agreements Annex Material Topics GRI 3: Material 3-1 Process to determine material Topics 2021 topics 3-2 List of material topics Material matter: Water and Biodiversity 3-3 Management of material topics 303-1 Interactions 6.4 131 with water as a shared resource 303-3 Water withdrawals 102 103 131 131 GRI 3: Material Topics 2021 GRI 303: Water and effluents 2018 4/9 The information is unavailable/incomplete. Avolta is committed to improve its management and monitoring practices related to water, aiming at collecting and providing quantitative performance indicators in future reporting years. Material matter: Supporting communities GRI 3: Material Topics 2021 GRI 202: Market Presence 2016 GRI 204: Procurement Practices 2016 3-3 Management of material topics 142-148 202-2 Proportion of senior management hired from the local community 204-1 Proportion of spending on local suppliers 8.5 Pg. 11 ESG Report 2023 Annex 8.3 Pg. 11 ESG Report 2023 Annex Material matter: Climate change, energy and emissions GRI 3: Material Topics 2021 GRI 302: Energy 2016 3-3 Management of material topics 302-1 Energy consumption within the organization 302-3 Energy intensity GRI 305: Emissions 2016 305-1 Direct (Scope 1) GHG emissions 7.2 7.3 8.4 12.2 13.1 12.4 13.1 14.3 15.2 305-2 Energy indirect (Scope 2) GHG emissions 305-3 Other indirect (Scope 3) GHG emissions 305-4 GHG emissions Intensity 305-5 Reduction of GHG emissions 123-127 125 (40.3 MWh/MCHF net sales). For the retail sector only, the energy intensity is calculated over the total square meters of commercial surface and amounts to 283.2 kWh/m² 125 125 125 125 125 Material matter: Waste and packaging GRI 3: Material Topics 2021 GRI 306: Waste 2020 3-3 Management of material topics 127-130 6.6 11.6 12.4 12.5 306-1 Waste generation and significant waste- related impacts 306-2 Management of significant waste- related impacts 129 Pg. 11 ESG Report 2023 Annex 129-130 5/9 GRI Content Index 2023 Avolta Annual Report 2023 GRI Content Index 2023 Avolta Annual Report 2023 GRI Standard/ other source Disclosure SDG Page Number and/or URL Omission Requirement(s) Omitted Reason Explanation GRI Sector Standard Ref. No. GRI Standard/ other source Disclosure SDG Page Number and/or URL Reason Explanation Omission Requirement(s) Omitted GRI Sector Standard Ref. No. 306-3 Waste generated 15.1 129 Pg. 11 ESG Report 2023 Annex 306-4 Waste diverted from disposal 306-5 Waste directed to disposal 129 Pg. 11 ESG Report 2023 Annex 129 Pg. 11 ESG Report 2023 Annex Material matter: Supply chain management 3-3 Management of material topics 308-1 New suppliers that were screened using environmental criteria 414-1 New suppliers that were screened using social criteria GRI 3: Material Topics 2021 GRI 308: Supplier Environ- mental Assess- ment 2016 GRI 414: Supplier Social Assess- ment 2016 116-117 116-117 116-117 Material matter: Talent recruitment, engagement and retention GRI 3: Material Topics 2021 3-3 Management of material topics 136-137 GRI 401: Employment 2016 401-1 New employee hires and employee turnover 5.1 8.5 8.6 10.3 Material matter: Health and well-being Pg. 12-13 ESG Report 2023 Annex GRI 3: Material Topics 2021 GRI 403: Occupational Health and Safety 2018 139-141 139-141 139-141 3.3 3.4 3.9 8.8 8.8 8.8 139-141 8.8 16.7 139-141 3-3 Management of material topics 403-1 Occupational health and safety management system 403-2 Hazard identification, risk assessment, and incident investigation 403-3 Occupational health services 403-4 Worker participation, consultation, and communication on occupational health and safety 3.3 3.5 3.7 3.8 8.8 4.3 4.4 4.5 5.1 8.2 8.5 10.3 Material matter: Health and well-being GRI 403: 403-5 Worker training 8.8 139-141 Occupational on occupational health Health and Safety 2018 and safety 403-6 Promotion of worker health 139-141 403-7 Prevention and 139-141 mitigation of occupational health and safety impacts directly linked by business relationships 403-8 Workers covered by an occupational health and safety management system 403-9 Work-related injuries 8.8 Pg. 14 ESG Report 2023 Annex Data for workers who are not employees is currently unavailable. 3.6 3.9 8.8 16.1 Pg. 14 ESG Report 2023 Annex Data for workers who are not employees is currently unavailable. Material matter: Employee training and development GRI 3: Material Topics 2021 3-3 Management of material topics 137-139 GRI 404: 404-1 Average hours Training and of training per year per Education employee 2016 Pg. 14-15 ESG Report 2023 Annex Material matter: Diversity, Equity & Inclusion 3-3 Management of material topics 133-135 405-1 Diversity of governance bodies and employees 5.1 5.5 8.5 Pg. 15-17 ESG Report 2023 Annex GRI 3: Material Topics 2021 GRI 405: Diversity and Equal Opportunity 2016 6/9 7/9 GRI Content Index 2023 Avolta Annual Report 2023 GRI Content Index 2023 Avolta Annual Report 2023 GRI Standard/ other source Disclosure SDG Page Number and/or URL Reason Explanation Omission Requirement(s) Omitted GRI Sector Standard Ref. No. GRI Standard/ other source Disclosure SDG Page Number and/or URL Omission Requirement(s) Omitted Reason Explanation GRI Sector Standard Ref. No. 129 129 116-117 116-117 116-117 306-3 Waste generated 306-4 Waste diverted from disposal 306-5 Waste directed to disposal 15.1 129 Pg. 11 ESG Report 2023 Annex Pg. 11 ESG Report 2023 Annex Pg. 11 ESG Report 2023 Annex Material matter: Supply chain management 3-3 Management of material topics 308-1 New suppliers that were screened using environmental criteria 414-1 New suppliers that were screened using social criteria GRI 3: Material Topics 2021 GRI 308: Supplier Environ- mental Assess- ment 2016 GRI 414: Supplier Social Assess- ment 2016 GRI 3: Material Topics 2021 Material matter: Talent recruitment, engagement and retention 3-3 Management of material topics 136-137 GRI 401: 401-1 New employee Employment hires and employee 2016 turnover Pg. 12-13 ESG Report 2023 Annex Material matter: Health and well-being GRI 3: Material Topics 2021 3-3 Management of material topics GRI 403: 403-1 Occupational Occupational health and safety management system Health and Safety 2018 5.1 8.5 8.6 10.3 3.3 3.4 3.9 8.8 8.8 139-141 139-141 139-141 403-2 Hazard identification, risk assessment, and incident investigation health services 403-4 Worker participation, consultation, and communication on occupational health and safety 403-3 Occupational 8.8 139-141 8.8 16.7 139-141 Material matter: Health and well-being GRI 403: Occupational Health and Safety 2018 403-5 Worker training on occupational health and safety 403-6 Promotion of worker health 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships 403-8 Workers covered by an occupational health and safety management system 403-9 Work-related injuries 8.8 139-141 3.3 3.5 3.7 3.8 8.8 8.8 3.6 3.9 8.8 16.1 139-141 139-141 Pg. 14 ESG Report 2023 Annex Data for workers who are not employees is currently unavailable. Pg. 14 ESG Report 2023 Annex Data for workers who are not employees is currently unavailable. Material matter: Employee training and development GRI 3: Material Topics 2021 GRI 404: Training and Education 2016 3-3 Management of material topics 137-139 Pg. 14-15 ESG Report 2023 Annex 404-1 Average hours of training per year per employee 4.3 4.4 4.5 5.1 8.2 8.5 10.3 Material matter: Diversity, Equity & Inclusion 3-3 Management of material topics 133-135 405-1 Diversity of governance bodies and employees 5.1 5.5 8.5 Pg. 15-17 ESG Report 2023 Annex GRI 3: Material Topics 2021 GRI 405: Diversity and Equal Opportunity 2016 6/9 7/9 GRI Content Index 2023 Avolta Annual Report 2023 GRI Content Index 2023 Avolta Annual Report 2023 GRI Standard/ other source Disclosure SDG Page Number and/or URL Omission Requirement(s) Omitted Reason Explanation GRI Sector Standard Ref. No. Disclosure SDG Page Number and/or URL Reason Explanation Omission Requirement(s) Omitted GRI Sector Standard Ref. No. GRI 406: Non-discrim- ination 2016 406-1 Incidents of discrimination and corrective actions taken 5.1 8.8 In 2023, 118 complaints related to incidents of discrimination have been received through formal reporting channels and reviewed from the Group. Among them, only 28 emerged as confirmed incidents of discrimination and for all of them the Group has designed the most appropriate remediation plan. On the basis of the severity of the reported episode, different disciplinary actions have been implemented ranging from verbal or written warning to termination. The remediation plan was still on-going at the end of the year for 9 of them, while for the remaining 19 cases the remediation plan was completed. Material matter: Human rights GRI 3: Material Topics 2021 GRI 402: Labor/ Management Relations 2016 GRI 407: Freedom of Association and Collective Bargaining 2016 3-3 Management of material topics 141 8.8 Pg. 13 ESG Report 2023 Annex 8.8 Pg. 17 ESG Report 2023 Annex 402-1 Minimum notice periods regarding operational changes 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk Material matter: Product quality and safety 3-3 Management of material topics 119-120 Pg. 18 ESG Report 2023 Annex 16.3 Pg. 18 ESG Report 2023 Annex 416-1 Assessment of the health and safety impacts of product and service categories 416-2 Incidents of non-compliance concerning H&S impacts of products and services GRI 3: Material Topics 2021 GRI 416: Customer Health and Safety 2016 8/9 GRI Standard/ other source GRI 3: Material Topics 2021 GRI 3: Material Topics 2021 GRI 410: Security Practices 2016 GRI 415: 2016 GRI 417: Marketing GRI 205: Anti- 2016 GRI 206: Anti- Behavior 2016 GRI 201: Economic 2016 Material matter: Sustainable sourcing & traceability 3-3 Management of material topics 115-116 Material matter: Healthy and sustainable choice 3-3 Management of material topics 117-119 Other GRI indicators beyond material matters 410-1 Security personnel trained in human rights policies or procedures 415-1 Political 140; Pg. 17 ESG Report 2023 Annex Pg. 18 ESG Report 2023 Annex Public Policy contributions 417-1 Requirements for 12.8 80-81; 98; product and service 115-119 and Labeling information and 2016 labeling GRI 418: Customer 418-1 Substantiated complaints concerning 16.3 16.10 Privacy 2016 breaches of customer privacy and losses of customer data During 2023, Avolta 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 205-3 Confirmed incidents of corruption During 2023, Avolta didn’t have any confirmed incident of corruption and actions taken corruption 206-1 Legal actions for During 2023, Avolta didn’t have anticompetitive competitive behavior, antitrust, and monopoly practices any legal action for anti- competitive behaviour, anti- trust or monopoly practices 201-1 Direct economic value generated and 143 Performance distributed 8.1 8.2 9.1 9.4 9.5 201-2 Financial implications and other risks and opportunities due to climate change 201-3 Defined benefit plan obligations and other retirement plans 201-4 Financial assistance received from government TCFD Report (Pg. 5) 168-169; 211; 226-232 None 9/9 GRI Content Index 2023 Avolta Annual Report 2023 GRI Content Index 2023 Avolta Annual Report 2023 GRI Standard/ other source Disclosure SDG Page Number and/or URL Reason Explanation Omission Requirement(s) Omitted GRI Sector Standard Ref. No. GRI Standard/ other source Disclosure SDG Page Number and/or URL Omission Requirement(s) Omitted Reason Explanation GRI Sector Standard Ref. No. GRI 406: 406-1 Incidents of Non-discrim- discrimination and ination 2016 corrective actions 5.1 8.8 taken In 2023, 118 complaints related to incidents of discrimination have been received through formal reporting channels and reviewed from the Group. Among them, only 28 emerged as confirmed incidents of discrimination and for all of them the Group has designed the most appropriate remediation plan. On the basis of the severity of the reported episode, different disciplinary actions have been implemented ranging from verbal or written warning to termination. The remediation plan was still on-going at the end of the year for 9 of them, while for the remaining 19 cases the remediation plan was completed. Material matter: Human rights 3-3 Management of material topics 141 402-1 Minimum notice 8.8 Pg. 13 ESG Report 2023 Annex Management operational changes periods regarding 407-1 Operations and 8.8 Pg. 17 ESG Report 2023 Annex suppliers in which the right to freedom of association and collective bargaining may be at risk 416-1 Assessment of the health and safety impacts of product and service categories non-compliance concerning H&S impacts of products and services Material matter: Product quality and safety 3-3 Management of material topics 119-120 Pg. 18 ESG Report 2023 Annex 416-2 Incidents of 16.3 Pg. 18 ESG Report 2023 Annex GRI 3: Material Topics 2021 GRI 402: Labor/ Relations 2016 GRI 407: Freedom of Association and Collective Bargaining 2016 GRI 3: Material Topics 2021 GRI 416: Customer Health and Safety 2016 8/9 Material matter: Sustainable sourcing & traceability GRI 3: Material Topics 2021 3-3 Management of material topics 115-116 Material matter: Healthy and sustainable choice GRI 3: Material Topics 2021 3-3 Management of material topics 117-119 Other GRI indicators beyond material matters GRI 410: Security Practices 2016 GRI 415: Public Policy 2016 GRI 417: Marketing and Labeling 2016 GRI 418: Customer Privacy 2016 GRI 205: Anti- corruption 2016 GRI 206: Anti- competitive Behavior 2016 GRI 201: Economic Performance 2016 410-1 Security personnel trained in human rights policies or procedures 415-1 Political contributions 417-1 Requirements for product and service information and labeling 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data 140; Pg. 17 ESG Report 2023 Annex Pg. 18 ESG Report 2023 Annex 12.8 80-81; 98; 115-119 16.3 16.10 During 2023, Avolta 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 205-3 Confirmed incidents of corruption and actions taken During 2023, Avolta didn’t have any confirmed incident of corruption 206-1 Legal actions for anticompetitive behavior, antitrust, and monopoly practices 201-1 Direct economic value generated and distributed 201-2 Financial implications and other risks and opportunities due to climate change 201-3 Defined benefit plan obligations and other retirement plans 201-4 Financial assistance received from government During 2023, Avolta didn’t have any legal action for anti- competitive behaviour, anti- trust or monopoly practices 143 8.1 8.2 9.1 9.4 9.5 TCFD Report (Pg. 5) 168-169; 211; 226-232 None 9/9 TCFD Report 2024 Avolta Annual Report 2023 t r o p e R D F C T 3 2 0 2 t r o p e R D F C T 3 2 0 2 TCFD Report 2023Avolta Annual Report 2023 Task Force on Climate-Related Financial Disclosures (TCFD) Report 2023 Content Governance 3 3 Board oversight 3 Management oversight & implementation Strategy 4 4 Avolta’s climate strategy 4 Climate related risks and opportunities 7 Qualitative climate scenario for Avolta 9 Plans to expand scenario analysis Risk Management 9 9 9 Organizational processes for identification and management of CRRO Integration in the organization’s overall risk management Targets & Metrics 10 10 Greenhouse gas emissions 10 CO2 reduction targets 11 Integrating ESG- and climate-related metrics in remuneration 2/11 TCFD Report 2023Avolta Annual Report 2023 Avolta’s ESG strategy and engagement has always been an inherent part of the company’s strategy – a commit- ment also reconfirmed in the company strategy Desti- nation 2027. Avolta’s ESG strategy includes 4 focus areas – Create Sustainable Travel Experiences, Respect the Planet, Empower our People, and Engage Local Communities – and subsumes climate change as part of the focus area Respect the Planet. its ESG Avolta consistently reports on initiatives, achievements and vision in the annually disclosed ESG Report, which is an integrated part of the Annual Report. The ESG Report comments on the company’s engagement and progress on how to minimize impact and generate positive contributions for its stakeholders. With its TCFD Report (Task Force on Climate-related Financial Disclosure) Avolta wants to complement the existing ESG reporting, further enhance transparency and provide stakeholders with information and insights to assess climate-related risks and opportunities (CRRO). This report also explains how Avolta responds to these challenges. The TCFD Report, together with the ESG Report (including the ESG Report 2023 Annex) constitutes Avolta’s 2023 Non-Financial Reporting in accordance with the requirements regarding transparency on non- financial matters of Art. 964(a)-(c) of the Swiss Code of Obligations. The ESG report is included on pages 97 – 148 of the Annual Report. 1. Governance 1.1 Board oversight The supervision of the implementation of Avolta’s ESG strategy – including climate change topics – has always been within the responsibility of the Board of Directors. In 2023, to further highlight the importance of ESG, the former Nomination and ESG Committee of the Board of Directors was reorganized into two individual commit- tees: the ESG Committee, chaired by the Lead Indepen- dent Director, and the Nomination Committee that assists the Board of Directors in fulfilling its nomination related matters. The ESG Committee advises the Board of Directors on matters concerning the sustainable success of the busi- ness and monitors and assesses the company’s activities in this area; such functions include promoting the inte- gration of sustainability within the Group’s strategies and culture and fostering these concepts among all stake- holders, reviewing stakeholder engagement, and period- ically assessing the Group’s position on sustainability themes (including financial market, ratings and sustain- ability index analyses). The Lead Independent Director supervises Avolta’s ESG strategy development and execution, ensuring alignment with the business strategy. The Lead Independent Director and the other members of the ESG Committee are expe- rienced in corporate citizenship, sustainability and ESG, bringing subject matter expertise to the committee. As ESG is seen as a holistic approach, climate-related topics are discussed as part of the regular ESG Committee meetings. Further underlining the strategic importance, ESG is now represented also at the level of the Global Executive Committee by the Chief Public Affairs & ESG Officer, who drives the implementation and the execution of the defined strategy. Interaction with the ESG Committee occurs through the regular quarterly information meet- ings, as well as through additional meetings and informa- tion exchanges upon request of the Lead Independent Director. The entire Board of Directors is updated, at least on a quarterly basis on non-financial information. This also includes, among other matters, updates on progress on the implementation of the company’s ESG strategy. 1.2 Management oversight & implementation Execution of the sustainability strategy at the operational level is led by the Chief Public Affairs & ESG Officer, who reports to the group CEO and leads the ESG department. The day-to-day implementation of the ESG strategy is executed by the ESG department. The corporate gover- nance structure and policies are continuously assessed to ensure compliance with the applicable legal frame- works, environmental guidelines as well as Avolta’s Code of Conduct to reflect stakeholder’s needs and expecta- tions. Additionally, the ESG department develops approaches to identify, assess, monitor and report on climate-related risks and opportunities. Avolta’s Corporate Governance Report 2023 provides more information on the governance structure concerning ESG on page 296. Since 2022, ESG and climate-related performance goals are integrated in the compensation schemes of the Global Executive Committee as well as the senior management. Details are included and disclosed in the Remuneration Report 2023 on page 311. 3/11 TCFD Report 2023Avolta Annual Report 20232022 based on 2019 data. Following the business combi- nation of Dufry and Autogrill in 2023, Avolta plans to restate the targets in 2024 to cover the full scope of the combined business. Avolta has a dedicated Shop and Restaurant Design Strategy to develop sustainable shops and restaurants with respect to reduced energy consumption, use of recyclable materials and circular economy for refurbish- ments. Avolta follows the principles established by leading green-building certification systems, such as the Leadership in Energy and Environmental Design (LEED). For details on the Environmental Guidelines and addi- tional information, please refer to the section ”Respect the Planet” on page 123 of the ESG Report 2023. 2.2 Climate related risks and opportunities Climate change is anticipated to impact Avolta’s business over the short-, medium- and long-term. Physical risks might impact Avolta’s business operations and supply chain in the form of e.g. extreme nature-related events. With respect to the F&B business, physical risks may impact also the agricultural output, with negative effects on crop yields and livestock production. Transition risks might affect Avolta through moving the economy into a low-carbon future which is characterized by e.g. environmental legislation, carbon taxes or higher aviation fuel and / or gasoline prices that increase price levels and hence consumers’ preparedness to fly and travel in general. In the F&B business, product prefer- ences of customers might change. On the other hand, climate change can also provide opportunities for Avolta. The following table shows the main climate-related risks and opportunities identified and evaluated so far by the company, which might impact Avolta. 2. Strategy 2.1 Avolta’s climate strategy As a travel experience player, Avolta views addressing climate change not only as a moral obligation, but as essential from a business perspective to ensure business continuity for the long-term. Due to the special nature of the travel retail and F&B industry, on top of actively reducing its own footprint, Avolta closely collaborates with third parties, in particular with concession partners, brand suppliers and logistics providers, on reducing the environmental impact of its business in general, and more specifically also contributing to the implementation of recycling processes and waste avoidance wherever possible. Avolta’s ESG strategy covers the different aspects of sustainability, including climate-related risks and oppor- tunities, which are managed by the ESG department and implemented as needed in collaboration with other specific departments and functions. This TCFD Report is reporting on the progress achieved. In 2021, internal guidelines (Environmental Management Guidelines) were adopted to define the Group’s manage- ment and compliance measures with a special focus on climate action. The adoption of these guidelines is moni- tored by the ESG department. In 2021, the company amongst other ESG initiatives established an emission reduction strategy for Scope 1 and 2 emissions until 2025 (based on the Dufry retail business scope 2022 and the 2019 base data), which follows the 1.5°C pathway and was validated by the Science-Based Target initiative (SBTi) in early 2023. For Scope 3 emissions, the company (based on the Dufry retail business scope 2022 and the 2019 base data) follows SBTi ‘s “well below 2°C pathway” with two sepa- rate objectives. Through supplier engagement programs, the company will commit to ensure that, by 2027, 74 % of emissions (based on the Dufry retail business scope 2022 and the 2019 base data) will be covered by SBTi committed suppliers. At the same time, through collab- oration with its logistics partners, it commits to reduce its logistics carbon footprint (based on the Dufry retail busi- ness scope 2022 and the 2019 base data) by 28 % by 2030. Both initiatives combined will serve to reduce Avol- ta’s Scope 3 carbon footprint (based on the Dufry retail business scope 2022 and the 2019 base data) in align- ment with SBTi criteria, which were also validated by SBTi. The targets were validated by SBTi in early 2023 and relate to the Dufry retail business and company scope of 4/11 TCFD Report 2023Avolta Annual Report 2023Type Risk / opportunity factors Potential impact Avolta’s response Transition Risks (Policy & Legal) – A reduction in passenger traffic could adversely affect Avolta’s sales. – Environmental legislation can affect cost of energy consumption, cost for transportation and influence business processes by regulation on the use of packaging material (e.g. single use plastics). – CO2 taxation of carbon intensive agriculture can affect procurement costs. – Regulations on CO2 taxation of flights / cruise ships / automobiles etc. leading to a reduction in passenger traffic and changes in customer behavior. – Environmental legislation and requirements on e.g. energy consumption, transportation, packaging materials in the own operations and supply chain. – Regulations on CO2 taxation of direct emissions of carbon intensive agriculture, e.g. livestock farming. – Business diversification has always been and will continue to be a key strategic element to mitigate risks and drive company growth. – Diversification by geographies, sectors, suppliers and channels to mitigate the impact of regional or local phenomena (see sales splits on pages 8 – 9 of the Annual Report 2023). – Avolta has a dedicated Shop Design Strategy to develop sustainable shops with respect to reduced energy consumption, use of recyclable materials and circular economy for shop refurbishments. – Avolta is replacing its single-use plastic packaging with sustainable alternatives, where possible and in particular within its travel retail operations (see details page 127 of the ESG Report 2023). – Cooperation with industry associations to develop sustainable solutions for the industry. – Strong and long-term partnerships with airport authorities and other concession partners. Mutual trust and shared objectives with these landlords are key for value creation. – Development of technical monitoring and management capabilities in order to reduce its greenhouse gas emissions and minimize the climate risks to which its business is exposed. – Start of Avolta’s global sustainable product identification initiative and the increase of healthy, sustainable (i.e. plant based) and certified (organic, fair trade, etc.) products in the F&B stores’ assortments. Transition Risks (Market) – Changes in customer – The change in ecological – Avolta has a Global Consumer Insight department awareness might influence travel traffic, customer sentiment as well as traveling and spending behavior. This can influence sales performance of Avolta’s outlets locally and globally. – The change in product preferences might lead to sales risks when not meeting customer demands. behavior towards higher ecological awareness leading to a reduction in passenger traffic at airports, a change in travel destinations, reductions or changes in motorway and railway stations traffic or a change in purchasing behaviors and product preferences. – Changes in customer behavior towards higher ecological awareness leading to a reduction in carbon intense food product purchases. who regularly performs customer surveys and marketing analysis several times per year to early identify potential changes in customer behavior and preferences. – In cooperation with Avolta’s brand partners, the central procurement teams identify new trends and customer needs to optimize assortments. – Avolta also operates owned Innovation Labs endowed with dedicated “R&D kitchens”, where new F&B concept and products are developed to meet new customer requirements. – Enhanced communication activities to support customer make responsible product choices – as started with Avolta’s global sustainable product identification initiative and the increase of healthy, sustainable (i.e. plant based) and certified (organic, fair trade, etc.) products in the F&B stores’ assortments. – Avolta’s diversification strategy by geographies, sectors, categories and channels (see sales splits on pages 8 – 9 of the Annual Report 2023) mitigates the impact of regional or local phenomena and the fact of passengers travelling to other destinations. 5/11 TCFD Report 2023Avolta Annual Report 2023 Type Risk / opportunity factors Potential impact Avolta’s response – Avolta’s diversification strategy by geographies, sectors, categories and channels (see sales splits on pages 8 – 9 of the Annual Report 2023) mitigates the impact of regional or local phenomena and the fact of customers travelling to other destinations. This strategy will continue to be a key strategic element going forward to mitigate risks and drive company growth. Physical Risks (Acute and Chronic) – Extreme nature-related events such as rise in sea level, heat waves etc. or natural disasters might affect the supply chain, production processes and Avolta’s operations. – Acute and chronic physical risks influence the agricultural output, with negative effects on crop yields and livestock production. – Acute risks such as extreme weather events and natural catastrophies might lead to asset damages or disruption to the supply chain, production processes and could impair Avolta’s ability to sell its products. – Chronic risks such as the rise in sea level might impact locations where Avolta operates and eventually lead to a reassessment of the operation, with the costs this implies. – The effect of global warming may lead passengers to select different holiday destina- tions where Avolta may not be present, hence, impacting sales. – Fluctuations in the agricultural output can negatively affect the availability of procured products, purchasing costs and planning security. – Trustful climate strategy – Avolta might strengthen its – Avolta’s ESG strategy covers different aspects of and enforcement. reputation and build a competitive advantage compared to competitors as it is the only company disclosing a TCFD report in its industry. sustainability in a holistic approach. The company has defined emission reduction goals and discloses emissions on Scope 1, 2 and 3 (for its Dufry business scope 2022 and 2019 base-line). – Avolta has set up main lines of action, which include the continuous assessment of its corporate governance structure and policies, alignment of ESG and business strategies ensuring critical business decisions, ensuring compliance and control as well as having an open stakeholder dialog and engagement. – Avolta has an ESG strategy in place which is also aligned with main ESG objectives of concession partners and main stakeholders and which also represents many new opportunities to be embraced with dedicated ESG initiatives. This places the company in a stronger position to obtain new and retain existing concessions. Risks / Opportunities (Reputation) 6/11 TCFD Report 2023Avolta Annual Report 20232.3 Qualitative climate scenario for Avolta In 2023, Avolta embarked on examining the utilization of climate scenarios. While our work has only just begun, we are happy to share some of our initial considerations. We have carefully assessed which climate scenarios are adequate for Avolta. There is a growing consensus in the travel retail and F&B industries that scenarios developed by the Network for Greening the Financial System (NGFS) are apt for describing different futures for the travel retail and F&B sector. While designed largely for use by central banks and regulators, NGFS recognizes that it is also valu- able to the business community as a common starting point. We started examining our prime risk through the lens of three NGFS reference scenarios: Orderly Transi- tion, Disorderly Transition, and Hot House World. The three scenarios chosen are the following ones: The Orderly Transition scenario assumes climate poli- cies are introduced early and become gradually more stringent. This leads to a gradual and predictable transi- tion to a low-carbon economy. Both physical and transi- tion risks are relatively subdued. Overall, in an orderly transition scenario, a travel retail and F&B firm would be able to plan and adapt to the changing market and regulatory environment in a struc- tured manner, enabling a smoother shift to sustainable practices and aligning its business model with the goals of a low-carbon economy. The Disorderly Transition scenario envisages a situation where climate action is delayed and then suddenly accel- erated. In this scenario, the delay in taking action leads to a more abrupt and disruptive transition later on. Overall, a disorderly transition to a low-carbon economy would demand swift and significant adaptations from travel retail and F&B firms. While presenting certain risks and challenges, it could also open up new opportunities innovation and sustainability-focused business for models. The Hot House World scenario assumes that some climate policies are implemented in some jurisdictions, but global efforts are insufficient to halt significant global warming. Critical temperature thresholds are exceeded, leading to severe physical risks and irreversible impacts like sea-level rise. Travel retail and F&B firms, like many other businesses, would need to adapt and innovate in the face of these challenges, potentially reshaping their business models, supply chains, and product offerings to remain viable in a drastically changed environment. Area of business potentially affected Operations Supply Chain Orderly Transition Disorderly Transition Hot House World A focus on energy efficiency would become paramount. Retail stores, restaurants, warehouses, and distribu- tion centers would need to invest in energy-efficient lighting, HVAC systems, and other technologies to reduce energy consumption. The introduction of carbon pricing or energy taxes could significantly increase operational costs. Travel retail and F&B firms may need to invest quickly in energy-efficient technologies and processes to reduce costs and comply with new regula- tions. Rising temperatures and extreme weather conditions could impact the physical operations of retail stores, restaurants, warehouses, and distribution centers. This includes higher costs for cooling, potential damage to infrastructure, and disruptions in logistics. With a gradual shift, travel retail and F&B firms would have more time to adjust their supply chains to ensure sustainability. This might involve sourcing more eco-friendly materials, working with greener suppliers, or optimizing logistics for lower emissions. The disorderly transition could lead to abrupt changes in the availability and cost of raw materials, especially those with high carbon footprints. Travel retail and F&B firms might face difficulties in sourcing products and materials, leading to supply chain disruptions and increased costs. Increased frequency of extreme weather events like storms, floods, and droughts could disrupt global supply chains. Travel retail and F&B firms might struggle with inconsistent supply of products, increased costs for raw materials, and challenges in maintaining inventory levels. 7/11 TCFD Report 2023Avolta Annual Report 2023Area of business potential-ly affected Changes in Consumer Behavior and Brand Loyalty Policy Change Market Opportunities and Innovation Workforce Orderly Transition Disorderly Transition Hot House World Consumer awareness and demand for environmentally friendly products would likely increase steadily, allowing travel retailers and F&B operators to gradually expand their range of sustainable products. The rapid transition might lead to a swift change in consumer awareness and behavior, with a heightened demand for sustainable and envi- ronmentally friendly products. Retailers and F&B operators not already offering such products might struggle to meet this new demand. Consumer preferences and demands may shift significantly in response to environmental changes. There might be a greater demand for sustainable, eco-friendly products, or products adapted to new climate realities (e.g., cooling products, durable goods for extreme weather). Travel retail and F&B firms would face progressively stricter environmental regulations, but these changes would be introduced in a predictable and manageable way, giving companies time to adapt. The sudden implementation of strict environmental regulations and policies could catch travel retail and F&B companies off-guard. These might include sudden bans on certain materials, abrupt changes in packaging requirements, and steep carbon taxes, requiring rapid adjust- ments in business operations. Even in a “Hot House World,” some regions may implement stringent environmental regulations. Retail firms might face increased costs related to compliance, packaging, waste management, and carbon footprint reduction. The orderly transition could open new market opportunities in the green economy, encouraging innovation in product development, supply chain management, and customer engage- ment. Despite the challenges, this scenario could also present opportunities. There may be a growing market for sustainable products, and retailers who adapt quickly could capture new customer segments. The broader economic impacts of a “Hot House World” scenario could lead to market volatility, affecting consumer spending power and overall economic stability, which in turn could impact travel retail and F&B sales. Travel retail and F&B operators would have the opportunity to train and develop their workforce in new, green technologies and practices, aligning their skills with the demands of a low- carbon economy. Travel retail and F&B firms may need to retrain or reskill their workforce to adapt to new technologies, process- es, or products that align with the low- carbon transition. The health and safety of employees could be at risk due to extreme weather conditions, leading to potential workforce challenges and increased costs for health and safety measures. While each of the three climate scenarios – Orderly Tran- sition, Disorderly Transition, and Hot House World – is possible, it is not clear to what extent either one will materialize. For Avolta, it is key to take specific measures to increase our business’ resilience and prepare for the future as well as we can. Monitor policy adaptation. Stay informed about regula- tory changes and plan ahead to meet new standards. Engage in policy discussions and advocacy to shape favorable outcomes. Sustainable Supply Chain Management. Gradually tran- sition to sustainable suppliers, invest in eco-friendly materials, and optimize logistics for lower emissions. Develop relationships with suppliers who share a commitment to sustainability. Invest in energy-saving technology and environmen- tally friendly packaging. Refurbish stores, restaurants and warehouses with energy-efficient systems and appli- ances, implement sustainable packaging solutions, and reduce waste. Explore renewable energy options. Expand green product and F&B lines. Gradually increase the range of environmentally friendly products and meals to meet growing consumer demand. Educate customers about the benefits of sustainable products and meals. Brand enhancement. Promote the company’s sustain- ability efforts to boost brand reputation. Engage in marketing campaigns highlighting environmental commitments. Workforce training. Invest in training programs for employees on sustainable practices and green technol- ogies. Foster a culture of sustainability within the organi- zation. Innovate and explore markets. Invest in research and development for innovative, sustainable products and services. Explore new market opportunities in the green economy. 8/11 TCFD Report 2023Avolta Annual Report 2023 2.4 Plans to expand scenario 3.2 Integration in the organization’s analyses overall risk management Avolta’s first TCFD Report published in March 2023 focused on identifying climate-related risks and oppor- tunities, which foster building appropriate scenarios going forward. To analyze climate scenarios and subse- quently identify management tools, further discussions between risk and strategy departments are necessary, in particular also against the background of the business combination of Dufry and Autogrill in 2023 and the needed update of the strategy and the specific initiatives. Internally, Avolta is liaising with its risk management team to this end and plans to provide further information on scenario analysis expansion in its TCFD Report in 2025. 3. Risk Management 3.1 Organizational processes for identification and management of CRRO The risk management processes of Avolta identify and manage risks at different levels of the organization and the responsibility is distributed across different functions and countries of the organization. The company is supported by an enterprise risk management software called GRC (Governance, Risk and Compliance), which allows a comprehensive identification and management of existing and potential risks that may affect the busi- ness. During 2023, further improvements of the enterprise risk management process were put in place including the alignment of the company organization and processes following the business combination of Dufry and Autogrill, now renamed to Avolta. This new process harmonizes risk management processes concerning format and time-frame. One pillar of the risk manage- ment organization is ESG, which also contains the management of climate-related risks and opportunities. The overall risk management model of Avolta is based on the following three levels: 1. The commitment of Avolta and all its subsidiaries to integrity and transparency begins with its own staff and the adherence to the Avolta Code of Conduct. including 2. There are various governance functions across the organization the Compliance, Legal, Finance, ESG and Human Resources departments that are in charge of monitoring the main risks and establishing the most appropriate controls to mitigate them, as well as ensuring compliance with the policies and procedures of the Group. 3. The Group’s Internal Audit department provides inde- pendent and objective monitoring and consulting services designed to add value and improve Avolta’s operations. This function covers all subsidiaries and applies a systematic and disciplined approach to eval- uate and improve the effectiveness of governance processes as well as risk management and control, including assessing risk management procedures and the potential committing of fraud. The main risks identified during internal audits are reported the Audit to senior management and Committee of the Board of Directors. The status of the main risks is periodically updated until resolution or acceptance by the governing bodies. Climate-related aspects form integral parts of the ESG processes and infrastructure. Therefore, the risk man- agement processes also include explicitly the manage- ment of Avolta’s CRRO (Climate Related Risks and Opportunities) as an integral part of the ESG engage- ment. Further information on the overall risk management process is provided in the Corporate Governance Report 2023 on pages 298 – 299 including chapters «3.5 Internal Organizational Structure», «3.6 Definition of areas of responsibility» and «3.7 Information and Control Instruments vis-a-vis the senior Management», as well as in the ESG Report 2023 on page 117 of the Annual Report 2023. The Financial Risk Management is disclosed in the Financial Report 2023 on pages 237 – 248. 9/11 TCFD Report 2023Avolta Annual Report 20234. Targets & Metrics 4.2 CO2 Reduction targets 4.1 Greenhouse gas emissions The Greenhouse gas emissions for the years 2019-2023 as shown below are calculated in accordance with the Greenhouse Gas Protocol (GHGP). Greenhouse gas emissions In tons of Co2-EQ. 2023 2022 2021 2020 2019 Scope 12 Scope 21,3 Scope 34 Total 9,506 1,524 935 717 1,736 126,021 18,900 19,813 21,290 27,923 18,057 7,509 3,728 1,451 10,766 153,584 27,934 24,477 23,475 40,425 Carbon intensity Carbon Intensity5 2023 2022 2021 2020 2019 Tons of CO2- eq,/MCHF net sales 10.8 0.0697 0.0521 0.0500 0.0740 1 Energy consumption is based on reported data from single locations. For missing data concerning US F&B scope, an extrapolation has been con- ducted to estimate consumption for 2023. Thereof, 48’000 MWh were pur- chased with Renewable Energy Certificates (RECs). 2023 data are not compa- rable with previous years, since they reflect the new scope of the company (retail+F&B activities). Data from 2022 to previous years reflect only the retail business sector (ex. Dufry). Data of the years 2022, 2021 and 2020 are not comparable with 2019 due to temporary shop closures during Covid 19. 2 Includes consumption of Avolta-managed goods transportation in Egypt, Jordan, Morocco, United Arab Emirates and the United Kingdom as well as diesel and gas for heating purposes. 3 Scope 2 emissions for year 2023 are reported under the “market-based” ap- proach. They include the contribution of Renewable Energy Certificates (RECs). Average emission factors used: IEA 2023, trade-adjusted for OECD countries. Applying the “location-based” approach, the emissions amount to 137,558 tCO2eq. 4 Scope 3 emissions only include data from logistics partners accounting for 87 % of total volume of good transported globally in 2023 (2022: 83%; 2021: 64 %; 2020 & 2019: 55 %). Not included here are the product purchasing re- lated Scope 3 emissions or other Scope 3 emission categories. 5 Carbon intensity calculated over the total net sales of Avolta in tCO2eq. per million CHF. The carbon intensity calculated over the total square meters of commercial surface operated in the retail sector amounts to 0.727 tCO2eq. / m2 (Total area 2023: 477,464 m2). For 2022 and previous years the carbon intensity data are not comparable with the new reality of Avolta, since they were calculated over the total square meters of commercial surface op- erated within the retail sector (ex. Dufry). 10/11 Avolta has defined science-based emission reduction targets for the former Dufry scope 2022 based on 2019 data, thus recognizing the crucial role the business community can play in minimizing the climate change risk. Science-based targets are greenhouse gas emis- sions reduction targets that are in line with the level of decarbonization required to meet the goals of the Paris Agreement – to pursue efforts to limit global warming to 1.5°C. After committing to the Science Based Targets initiative in spring 2022, the Group submitted emission reduction targets following the SBTi guidance (SBTi Target Valida- tion Protocol). SBTi validated the following emission reduction targets in early 2023 for the former Dufry scope 2022 (not including the Autogrill business) based on 2019 data: – Committment to reduce absolute Scope 1 & 2 GHG emissions 94.2 % by 2030 from a 2019 base year. – Committment to increase annual sourcing of renew- able electricity from 0 % in 2019 to 100 % by 2025 and to continue annually sourcing 100% renewable elec- tricity through 2030. – Committment to reach 74 % of the suppliers by emis- sions covering purchased goods and services will have science-based targets by 2027. – Committment to reduce absolute Scope 3 GHG emis- sions of upstream transportation emissions by 28 % by 2030. The targets were validated by SBTi in early 2023 and relate to the Avolta retail business and company scope of 2022 based on 2019 data. Following the business combi- nation of Dufry and Autogrill in 2023, Avolta plans to re-state the targets in 2024 to cover the full scope of the combined business. In addition, Avolta wants to invest into climate protection to counter-balance non-avoid- able emissions of its own retail operations (Scope 1 & 2 emissions) by 2025 with carbon offsetting initiatives to be defined in the near future; also based on the Dufry business scope 2022 and the 2019 baseline. The emission reduction strategy for Scope 1 & 2 follows the SBTi 1.5°C pathway, whereas the emission reduction strategy for Scope 3 follows the SBTi well below 2°C pathway. Measures to achieve the reductions of Scope 1 & 2 include reductions in energy consumption and the purchase of renewable energy certificates (RECs) at company level. Scope 3 reduction measures are the establishment of a supplier engagement program, devel- opment of a green logistics code of conduct and tracking of suppliers and logistic partners with commitments to SBTi. TCFD Report 2023Avolta Annual Report 2023For the next years, Avolta will investigate whether addi- tional key figures on CRRO e.g. vulnerable assets to cli- mate change, and in particular considering the new scope after the business combination, can be reported. 4.3 Integrating ESG and climate- related metrics in remuneration In 2022, the Nomination and ESG Committee of the Board of Directors recommended the inclusion of ESG and climate-related performance metrics in the remu- neration schemes of the Global Executive Committee and senior management. This proposal was imple- mented in 2022 and continued in 2023. Moreover, in 2023, the former Nomination and ESG Committee has been split into two dedicated committees: the ESG Committee, who now supervises the implementation of the ESG strategy, including climate related topics, and the Nomination Committee, which assists the Board of Directors in fulfilling its nomination related matters. For more information, please also refer to page 296 of the Corporate Governance section in the Annual Report 2023. 11/11 TCFD Report 2023Avolta Annual Report 2023Avolta – The leading global travel experience player. Avolta AG (SIX: AVOL) offers a revolutionary travel experience to consumers worldwide addressing 2.3 billion passengers in over 5,100 outlets across more than 1,000 airports, motorways, cruise lines, seaports, railway stations and other locations. The company, headquartered in Basel, Switzerland, operates in 73 countries worldwide. Avolta – The leading global travel experience player. Avolta AG (SIX: AVOL) offers a revolutionary travel experience to consumers worldwide addressing 2.3 billion passengers in over 5,100 outlets across more than 1,000 airports, motorways, cruise lines, seaports, railway stations and other locations. The company, headquartered in Basel, Switzerland, operates in 73 countries worldwide. r u o y e k a m o t e r e h e r ’ e W i g n d r a w e r s a y e n r u o j . n o i t a n i t s e d e h t s a 

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