DUFRY

Analysis of Dufry share price

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Before you buy Dufry stock, we suggest you discover some useful information about this stock that will help you make good analyses of it. Indeed, for these analyses, we are going to explain to you in particular the elements which you must follow in priority for a good fundamental analysis according to their influence on this value. We will also introduce you to this company in more detail, its activities and sources of income as well as its advantages and disadvantages. We will also tell you about its main competitors in the market and its recent major strategic partnerships.

Elements that can influence the price of this asset:

Analysis N°1

First of all, it will be necessary to monitor the setting up of new concessions in new markets, particularly in Asia where the group's sales could increase by more than 20% over the next 5 years.

Analysis N°2

It will also be necessary to monitor the group's new business models, which could lead to an expansion of the gross margin, as well as new development opportunities with border stores and service.

Analysis N°3

The creation of new commercial surfaces in some airports could also bring additional profit to this company.

Analysis N°4

The competition for this business in the most attractive tourist destinations will also need to be closely monitored with global players interested in these concessions.

Analysis N°5

The foreign exchange market should also be monitored, as exchange rates may also impact the profitability of this group due to a high proportion of sales in dollars, but also a portion in euros and pounds sterling.

Analysis N°6

The strategic operations carried out by this group with the establishment of partnerships and alliances with other companies, for example, must be taken into account

Analysis N°7

Finally, the financial results should be followed with great interest, with Dufry's annual balance sheet and its interim results published each quarter.

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General presentation of Dufry

We now invite you to deepen your knowledge of Dufry by discovering a more complete presentation of this group. It is essential to understand how this company makes its profits and what its main segments and sources of revenue are in order to be able to anticipate the effects of future events on its profitability.

The Dufry Group is a Swiss company operating in the retail and concessions sector. More specifically, the company specializes in the operation of duty-free retail stores.

The stores and shops are mainly located in airports for almost 90.8% of the turnover, in hotels and on tourist sites for 3.4% of the turnover as well as on cruise ships and in seaports for 2.5% of the turnover.

It is also possible to break down the Dufry Group's revenues by store type and in this way:

  • Tax-free or Duty Free shops currently account for 61.9% of the group's turnover.
  • Finally, taxed shops represent 38.1% of this turnover.

As regards the distribution of the turnover by product families, we can note that perfumes and cosmetics generate 32.3% of the turnover, confectionery and other food products generate 17.1% of the turnover, wines and spirits generate 15.7%, tobacco products 11.2%, watches, jewellery and accessories 7.1%, clothes and leather goods as well as luggage 6.1%, electronic products 3%, books, newspapers and magazines 2.4% and the rest including toys, 5.1%.

The Dufry Group currently owns and operates a network of 2,200 stores worldwide.

Analysis of Dufry share price
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The major competitors of Dufry

The duty-free and other concession-type airport stores sector naturally has several major players that compete directly with the Dufry Group and that you must absolutely take into account when analyzing this stock. Here is a presentation of these opponents:

Lagardère

First of all, the Lagardère Group is an international group present in more than 40 countries and employing over 28,000 people. Recently, the group has refocused its strategic activities into two main branches with a branch based on publishing and publishing including also mobile games and board games and Lagardère Travel Retail which specializes in retailing in train stations and airports with Relay outlets.

World Duty Free

This company specialises in duty-free shops and is the result of a demerger from the Autogrill group. It is important to note that Dufry is a major shareholder in this company.

King Power

Another competitor to Dufry is the King Power International Group, which is one of the leading retail companies in Thailand and operates specifically in the duty-free segment. This group is based in Bangkok and was established in 1989. It even gave its name to the King Power Stadium in Leicester.

Valora

Dufry's last major competitor is the Valora Group, which was founded in 1905 in Olten in the canton of Solothurn under the name Swchweizer Chocoladen und Conlonialhaus. The company used to specialise in chocolate. Today, the group specialises in retailing and operates more than 2,400 sales outlets in Europe, of which more than 1,000 are located in Switzerland. The group's turnover is almost 2 billion Swiss francs and the company currently employs over 4,435 people.

The major partners of Dufry

It goes without saying that the Dufry group does not only have adversaries and enemies in its sector of activity, but that it can also count on certain major strategic allies. Here are two concrete examples of partnerships recently set up by this company:

Hainan Development Holdings or HDH

A partnership has been signed with this public company owned by the province of Hainan to develop travel retail on the Chinese island. The first step of this collaboration consists in developing new duty-free infrastructures within the Mova Mall in Haikou, the capital of the island. Mova Mall is one of the main tourist and shopping destinations in downtown Haikou and offers a wide range of shopping, dining and entertainment options and over 2,500 luxury hotel rooms. It allows Chinese citizens to purchase up to $14,000 worth of goods per year at duty-free rates.

Alibaba 

Finally, Dufry has also agreed to collaborate with China's Alibaba Group to explore and invest in opportunities in China to grow the travel retail business in the country and strengthen Dufry's digital transformation. As part of the agreement, the two companies will form a joint venture in which the Chinese group will hold a 51% majority stake and Dufry will hold a 49% stake. Alibaba will contribute its network in China and its digital capabilities and Dufry will contribute its existing travel retail business in China and will support the new venture with its supply chain and strong operational skills. At the same time, Alibaba Group will invest in the travel retail specialist and hold up to 9.9% of the equity.

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The factors in favour of a rise in the Dufry share price:

Now we'll tell you a little more about the strengths and weaknesses of the Dufry Group, in other words, the pros and cons of this stock.

Let's start with a list of the main assets the group has with :

  • A leading position in travel retailing worldwide with international positions and strong expansion. The group covers 8 of the world's top 30 airports.
  • The geographical diversification of the group in the world is also an asset, with a market share of 30% and a presence in strategic markets such as Asia and South America.
  • A history of high growth and margins as well as numerous acquisitions.
The factors in favour of a drop in the Dufry share price:

As far as Dufry's flaws and weaknesses are concerned, we'll remember:

  • The high cost of recent acquisitions which may weigh on its net income.
  • A dividend policy that is still unclear to investors.
  • A growth that has been marred recently by the Covid crisis and travel restrictions.
  • A position that is still relatively weak in Asia compared to competitors.
The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

How is the capital of the Dufry Group distributed?

Several major shareholders are to be known in the distribution of the capital of the Dufry group. They are Luis Andrès Holzer Neumann with 15.5% of the shares, Qatar Holding with 7.37% of the shares, GIC Pte Ltd Investment management with 5.38%, the Rupert family with 5.33%, Franklin Mutual Advisers with 4.94%, Hainan Traffic Administration Holding with 3.19%, Norges Bank Investment Management with 3.11%, T Row Price International with 2.02%, Fiduciary Management with 1.79% and Alibaba Group with 5.1%. 8.24% of the shares are held in treasury.

What have been Dufry's major acquisitions and strategic transactions?

In 2005, the French group Elior took an indirect stake in Dufry by acquiring the company Areas in Spain. In 2014, the Dufry Group acquired the Swiss company The Nuance Group, which is active in the same field and employs 5,400 people, for 1.55 billion Swiss francs. Finally and in 2015, the group also acquired 50.1% of the shares held by the Benetton family in its competitor World Duty Free.

How do I know if Dufry's share price will go up or down?

Dufry's share price is influenced by various external factors, including news about the company and its sector of activity and other publications, which you can study as part of a fundamental analysis of this stock. It is also possible to carry out a technical analysis at the same time, this time based on stock market charts and trend indicators.

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