Hamburg, 17 April 2018. Gebr. Heinemann experienced healthy, robust development in 2017.The Hamburg-based global enterprise was able to build on its strong position in the Europeantravel retail sector, particularly in Eastern European countries such as Russia, Ukraine, Georgiaand Romania. In the Asian travel retail market, the company continued to expand its business inMalaysia. Gebr. Heinemann was successful on tender bids around the world throughout the year,and now has a presence at Hong Kong International Airport and in partnership with JamesRichardson at Ben Gurion Airport in Tel Aviv for the first time. In Australia, the company won anew location at Gold Coast Airport. The Heinemann Americas and Heinemann Asia Pacificsubsidiaries were also successful in their joint bid to supply and operate the shops on fourCarnival Cruise Line ships.
In a competitive environment in which business in the core markets is being more heavily influenced by global political developments than ever before, Gebr. Heinemann has performed very well overall and acted flexibly to take advantage of the market conditions. This is reflected in its controlled group turnover of 4.1 billion euros* (representing growth of 6.6 percent on turnover of 3.8 billion euros in the previous year). Breaking this down by category, LTC is the strongest with a 57 per cent share, followed by Perfume & Cosmetics at 32 per cent and Fashion & Accessories at 9 per cent.
2018 investment and outlook
Gebr. Heinemann is predicting double-digit sales growth for the 2018 financial year. Following considerable investment in innovative processes and IT structures, the Hamburg-based enterprise will also continue to invest in the travel retail market. A considerable share of its overall investment, which is set to total approximately 100 million euros, will go towards its ongoing project at Istanbul New Airport and digital development in connected travel retail.
Retail update: Designing the marketplaces of the future
2017 saw a positive trend in Gebr. Heinemann’s top retail locations. In Scandinavia,Gebr. Heinemann was able to agree an early extension to its contract at Copenhagen Airport to 2023. Sales growth in Norway reached 6.5 per cent. The refit and expansion of the shops operated under the Travel Retail Norway joint venture (partners: Gebr. Heinemann and Norse Trade) at Oslo, Bergen, Kristiansand, Stavanger and Trondheim airports is now complete. A new generation of Duty Free shops now awaits passengers across a total of 16,740 square metres of retail space.
In Istanbul, Gebr. Heinemann’s most successful location in terms of retail sales, there was a one per cent increase over the previous year despite political and economic unrest. The JR-Heinemann Duty Free Limited Partnership, the newly-founded joint venture between James Richardson and Gebr. Heinemann, won the tender for a ten-year contract at Ben Gurion Airport in Tel Aviv in August 2017, and has been operating six shops with a total retail space of 4,000 square metres there since January 2018. With annual sales predicted at 400 million US dollars for 2018, Tel Aviv is now Gebr. Heinemann’s third strongest retail location after Istanbul and Oslo. Gebr. Heinemann’s joint venture with Fraport, FRA, recorded a successful first year at Frankfurt Airport in 2017. Heinemann Asia Pacific won a tender for eight confectionery shops at Hong Kong International Airport, all of which will have opened in the first half of 2018. In Sydney, Gebr. Heinemann’s marketplace concept saw growth of around ten per cent in its first full year. The company will soon be adding a second location in Australia having won the tender for two shops at Gold Coast Airport. Gebr. Heinemann is also continuing to expand its business in Malaysia. The Heinemann Asia Pacific subsidiary has raised its stake in its joint venture with DFZ.
Turning to the company’s Cruise Liner division, Gebr. Heinemann set a successful benchmark with an innovative, cross-category shop design on-board TUI Cruises’ “Mein Schiff 6”.
Distribution update: Making a lasting contribution to customers’ success
The strongest growth rates were recorded in the Eastern Europe & Central Asia (formerly Russia/CIS) and Benelux & Africa regions. Growth in Eastern Europe & Central Asia is largely the result of the company’s joint venture activities at Moscow’s Sheremetyevo and Domodedovo airports. Russian passenger numbers are continuing to bounce back, which has contributed to double-digit sales growth above the average growth rate for passenger numbers. The Travel Retail Domodedovo joint venture won a tender to become the exclusive Duty Free operator in the new terminal at Moscow’s second-largest airport, Domodedovo, and will therefore soon be responsible for the airport’s entire Duty Free business. At Moscow Sheremetyevo Airport, the company will be doubling its total retail space operated by IDF (Imperial Duty Free) this year and next, and is gradually converting all of the shops to walk-through concepts.The Gebr. Heinemann subsidiary Travel Retail Vilnius was able to secure a six-year extension to its contract at Vilnius International Airport. Gebr. Heinemann is also very satisfied with the strong growth of its border shop business in the EECA region. The company sees great potential in the Arrivals Duty Free business in the Eurasian Economic Union, which is due to launch in October 2018 at the latest.
In the company’s Inflight & Catering division, existing supply contracts with Gate Retail and Ryanair were each extended by five years. Gebr. Heinemann also celebrated a global tender win in the cruise business: The Heinemann Americas and Heinemann Asia Pacific subsidiaries and Hamburg headquarters jointly secured the contract to operate a total of 1,220 square metres of retail space as the on-board retailer for four Carnival Cruise Line ships. Both retail and distribution (wholesale) on cruise ships are important strategic growth markets for Gebr. Heinemann, and ones in which the company will continue to invest worldwide going forward.
For Gebr. Heinemann’s Distribution division, 2017 was marked by the launch of the new distribution brand that promises to make a lasting contribution to its customers’ success. The “Supplying Success” claim represents the brand’s commitment to consistently outstanding quality. With this, the company is positioning itself more definitively against the international competition and stating clearly what Gebr. Heinemann stands for as a distributor.
Purchasing and Logistics update: Turning brands and trends into experiences
As a company that operates in complex global markets, two of the greatest challenges for Gebr. Heinemann remain global pricing and gaining commitment from globally-oriented suppliers that are also prepared to make long-term financial investments. The company’s Purchasing division focuses on both quality and strategic elements, such as bringing trends into the range and special retail products, i.e. travel retail exclusives, and is always thinking up new ways of integrating brands and trends into the customer experience. Make-up is currently a global “super trend category”. For this reason, Gebr. Heinemann worked hard on making this product group more attractive, colourful and more of an experience for travellers through new presentation design concepts throughout 2017. The strong “K-beauty” (Korean Beauty) trend and its intensive skincare products has also been brought into Gebr. Heinemann with Korean brand Sulwhasoo being the first to be added to the travel retail range. Gebr. Heinemann has also taken advantage of a powerful trend in the LTC category: hand-crafted spirits. These add an attractive flair to the shops and can be presented as exclusive categories. One example is the successful, exclusive, global launch of “Copper Dog” Scottish craft whisky in travel retail at Heinemann Duty Free. The company also drove forward the strategic and conceptional expansion of the Fashion & Accessories / Watches & Jewellery categories and their presentation, especially in the Core Duty Free segment, in 2017.
One year ago, Gebr. Heinemann launched the Travel Retail Data Innovation Group (TRDIG). 30 suppliers and the biggest travel retailers in Europe have now joined the initiative for digital, automated data exchange. It is an important element of the globalisation of Gebr. Heinemann and the entire travel retail sector.In summer 2017, Gebr. Heinemann and its Norwegian partners put the world’s first driverless transport system (SAGV) at an airport into service in Oslo. Over recent months, the technical foundations have been laid in Logistics to ensure that the company can meet rising demand stemming from its growing worldwide supply business and new legislation in the best possible way.
Corporate responsibility
Conscious of its responsibility for preserving the environment, Gebr. Heinemann joined forces with the marine conservation organisation OceanCare last year, in order to send a clear signal against the global increase in plastic waste. Single-use plastic bags are now only provided at a cost of 30 cents at 14 Heinemann Duty Free locations in Germany and Austria, and from January 2018 in Bratislava (Slovakia) and Ljubljana (Slovenia). The proceeds generated by this policy go to fund the work of OceanCare. Within just one year, the company was able to reduce consumption of single-use plastic bags at participating shops by around 70 per cent, from around 8.8 million in 2016 to 2.5 million. For the full year of 2017, the total donation made to OceanCare came to 142,000 euros.
* As of April 2018: Controlled group turnover of Gebr. Heinemann and affiliates.
Press enquiries:
Lara Vitzthum
Head of Corporate Communications
L_Vitzthum@Gebr-Heinemann.de
Julia Grobecker
Manager Corporate Communications
J_Grobecker@gebr-heinemann.de
