Julían Díaz - CEO Andreas Schneiter - CFO

Joern Iffert - UBS Jon Cox - Kepler Cheuvreux Felix Remmers - Credit Suisse Andrew Pentol - Duty Free Magazine Jaafar Mestari - JPMorgan

Okay. Good afternoon.

Welcome to this full year presentation once more in Zurich. Thank you for participating.

Here in the room, Andreas Schneiter and Julían Díaz calling and participating in the call from Zurich. We're going to walk through the presentation in the same way than previous times.

There is a presentation that was disclosed this morning or our worksite. Please go to Page 5 of this presentation.

One year ago, when we were here, we were talking about 2017, obviously referring certainties with many events that happened during the last quarter of 2015 during many months with many question marks and we were talking about 2016 goals for the company. We were commenting about acceleration of organic growth.

This has been over the past 18 months a request and a question that was repeated many times by investors, by analysts, who were talking about how to improve EBITDA after obviously acquisitions and how to really deliver what is expected in the integration. We own World Duty Free and Nuance, increased the free cash flow and finally we were ahead of time, but thinking how to extending important contracts of the company, that for us were critical and we obviously tried to renegotiate ahead of obviously anything else.

Melbourne, Zurich, Sao Paulo and Cancun, Cozumel, Marrakech and many others have been commented on Zurich in the last 12 months and in the bottom side of Page 5 where we have is what happened is finally we have reached level of growth in organic growth in the last quarter very similar to the one that we have had over the past year, 5.6%. And finally, 2016 was a year with positive organic growth plus 1%.

I am going to comment on the different details during the presentation. I don't want to extend on this page.

The second one is EBITDA reached CHF935 million, 29% of last year. Free cash flow increased by 43%, the highest in the history of the company for CHF484 million.

Net debt reduced by CHF205 million reaching CHF3.7 million, obviously compared with previous year, reduced by CHF200 million. The integration of World Duty Free was finally complete.

We were expecting CFH105 million synergies and what we can comment on now is that the final amount of synergies identified has been CHF125 million. The remaining part will be implemented around 2017.

And this contract that I mentioned before, we're obviously representing 80,000 square meters of commercial space. I comment on that by yearend December 2015 total number of the square meters we're operating from the commercial point of view is 425,000, representing CHF1.2 billion of sales.

We also finalized the program for refurbishment in the shops for accelerating revenue growth and we complete 30,000 square meters of commercial space. All these events and all these results cannot be separated of the business model.

I have been very consistent over the past year repeating the same thing. Our profitable growth strategy and the business model still remains intact and I think this information is confirming what I am telling.

Situations like what happened during the first half of 2016, we were subject to many events, many times repeated, currency volatility, economic, and social unrest in many countries worldwide, have been a good example of what I am talking about. The business model is resilient.

The diversification strategy is still valid and the focus for driving more growth that we're using the three pillars, acquisitions, organic growth and obviously new concessions inclusive there are still valid. In terms of information we've more detail, if we move to Page 6, what we have here is just the highlights of the full year results.

Then the detail will be explained by Andreas. Turnover reached CHF7.8 billion.

As I said 5.6% organic growth during the last quarter, plus 1% in full year. Gross profit margin improvement of 40 basis points.

Confirmation of the synergies -- Nuance synergies already fully implemented and starting implementing -- impacting the P&L in 2015 with around CHF40 million, synergies generated from World Duty Free. Free cash flow again CHF484 million and net debt reduction already commented on and I want to remind one thing.

One of the questions that I hear more and more often is how could you accelerate in Dufry the organic growth? If you want to reduce the level and you want to reduce the impact on no debt.

The answer is here. If we have been able to accelerate organic growth and in parallel, we have been able to reduce the net debt and the cash generation.

World Duty Free synergies are obviously represented there and they were CHF125 million and that is something that has not been announced to the market and this is the total process in the position to confront that the total synergies due to this acquisition is CHF125 million. If we move for the people participating in the call to Page 7, I think I will try to separate the first semester to the first quarter and the fourth quarter.

The challenge in first semester in 2016 was the strong currency devaluation in key emerging markets for us Russia, Brazil, Argentina and even China, not mentioned, but obviously, Russia also minus 10% compared with matured currencies. And economic crisis in Brazil and Russia social economical events impacting our operations in Turkey, the number of Russians in Anatolia dropped by 97% and the drop-in number of passengers in mainly Russia, Naples and also in Anatolia around 47%.

So, the situation during the first semester was a bit challenging, but again due to the rich diversification strategy, we also had a very positive performance in the States, U.K. and North America balancing the negative results mentioned before and again it is important that the diversification strategy has a meaning and this is the meaning.

Our company's performance in the first half of 2016 was a challenge. So, during the second quarter a strong acceleration of organic growth in Q3 due to the continued good performance in Spain and U.S.

and the significant increase in the U.K. after the Brexit announcement.

The good recovery in Brazil and higher impact of good performance in Turkey due to the strong seasonality of the business. I think at that time during the summer, we were expecting a recovery in Turkey, but Turkey was not the core.

The situation didn’t normalize until later on. Finally, in Q4, the initiatives launched to rise organic growth impacted positively in the company worldwide.

In addition, very strong performance in Brazil and North America and the recovery of our Turkish business also in low season. We were at that time obviously expecting the recovery during the summer, but the recovery happened during the last quarter.

It was the low season. The impact in the performance of the company was very low, but we have seen the recovery in Turkey in Anatolia.

As I go into the organic growth, reached plus 5.6% in Q4 and plus 1% in full year. Regarding our trading update and divisions performed better in Q4 than in the previous three quarters, all the divisions.

Division 1, Southern Europe and Africa, turnover in 2016 reached CHF1.7 billion compared with CHF1.2 billion in 2015. Organic growth full year was minus 2.5% and 1.6% in Q4, impacted by the seasonality of Turkey during the summer.

Italy, Spain and Portugal had a very good year with single digit growth. Turkey due to the events mentioned before, dropped sales close to 50% and other countries, Greece and Africa operations held up relatively well with a small decline of Russia compared with Tunisia.

Division 2, U.K., Central and Eastern Europe, turnover reached CHF2.1 billion compared with CHF1.4 billion one year ago. Organic growth grew by 3.9% and 8.7% increasing organic growth in the last quarter.

Very good performance in U.K., high single digit growth in the year and double-digit growth in Q4. Serbia and Finland, single digit positive performance in the year and double-digit in the quarter.

Sweden and Switzerland were both almost flat. Russia and other related countries remaining negative, but with positive acceleration, the second part of the year especially in number of passengers.

Division 3, Asia, Middle East and Australia. Turnover reached CHF770 million compared with CHF630 million one year ago.

Organic grow positive in the year of 0.4 compared with obviously the previous quarter a significant improvement and 1.5% in the quarter. Excellent double-digit growth in Korea, Indonesia, Sri Lanka and India.

Single digit growth in Cambodia and Europe, operations at Hong Kong, Macau and Australia with negative performance due to the impact of the Chinese consumers and the renovation of process in Australia that at time were started obviously with a lot of impact in the sales. Division 4, Latin America, turnover reached CHF1.5 billion in 2016 versus CHF1.4 billion one year ago.

Organic growth in the division was minus 4.1% full year and plus 3.7% in the quarter may impact Brazil and Argentina. Good performance in Norway, Ecuador, Chile, Peru, Mexico, Dominican Republic and Jamaica with high single digit growth or double digit growth.

Brazil reached minus 6% full year with high double-digit growth in Q3 and Q4. And finally, Division 5 North America turnover reached CHF1.6 billion compared with CHF1.3 in 2015.

Organic growth reached 4.5% positive in full year with last 7.2% in the quarter. A strong performance in cards and duty paid business and duty free in Canada, mitigated by negative performance in duty free U.S.

due to the stronger U.S dollar. All the positive trends commented during Q4 2015, have confirmed in January and February, despite the calendar in February.

All divisions performing well with positive recovery in Africa, Turkey, Greece and Italy in Division 1. Acceleration of growth in U.K., Sweden and Finland and excellent recovery in Russia and other Eastern countries with double-digit positive growth in January and February in Division 2.

Similar performance in Division 3 Middle East and Australia. Good performance in China, Macao, South Korea, Indonesia, Cambodia, Germany and Kuwait and still negative performance in Hong Kong.

In Division 4 Latin America, very good acceleration of growth with double-digit growth in Brazil, Uruguay, Ecuador, Chile, Peru and Dominican Republic. All the other operations with similar performance compared with Q4.

And Division 5 North America, very good double-digit positive growth in U.S. and Canada duty-free and single digit positive growth in our duty paid business in the U.S.

This is in my view obviously, we have 64 countries. We have very short time to destination, can be extended, but we have a very good picture about what’s happened and what is going to happen or what is happening now in January and February.

Let’s move to Page 8, I have already commented on that. I think the most positive thing is the acceleration of growth in Central and Eastern Europe, 8.7% in the last quarter.

The acceleration of growth in North America 7.2% and Latin America 3.7%, and still Asia, Middle East and Southern Europe and Africa remains a bit weak, but still obviously, I can say is positive. If we move to Page 9, I comment on that.

Last year we had 80,000 square meters of commercial space on total of 425,000 of extended and signed, 340 shops and approximately CHF1.2 billion in total sales of the company. The construction renewal were a similar trends than the concessions before the renewal.

The average duration of the construction portfolio is a year. I always repeat the same thing, the quality of the construction portfolio is one of the most important assets we have.

Based in the rent we pay of 27.2% in the P&L the duration is above eight years and diversification. We are in 64 countries with hundreds of concessions and I think there is not a similar case in the travel rate paid.

The concession portfolio is probably one of the strongest assets that we can sell to the market. In terms of the shops open, Page Number 10, we have opened 42,000 square meters of growth retail space in 2015.

As I said, openings represent close in gross terms 10% of the total retailer space. As we are going to see in a minute, later on still the pipeline opportunities is very healthy.

When we call in on the organic growth acceleration, we also comment on renovations and refurbishments. We have renovated last year 30,000 square meters of commercial space in different locations that are listed in Page 10.

I don't think that I should spend anything else because you know the -- you have the places that. If we move to Page 11, regarding the newer space, we have already signed 22,000 square meters of commercial space.

These 22,000 square meters of commercial space as is in the chart will be opened along most of them in 2017 and part in 2018. The locations have I think we have won the tendering board in Colombia.

The first time that we step in Columbia, one of the few countries that we have been able to step in. Cairo, in the new terminal, new premise with NCL, new shop in Macau.

Mozambique new country also. Hard Rock Hotel in Las Vegas, terminal four in Cancun, Tampa and there is a long lease of concessions that we have already signed on top of these, we have the– pipeline opportunities.

The pipeline opportunities are represented there 38,000 square meters of commercial space. Most of this space is negotiated or in the process to be negotiated.

In Asia and Middle East, with 14,000 square meters and in North America with 11,000 square meters. If we move to Page 12, just for commenting one of the most important KPIs regarding the organic growth is very interesting.

International passengers forecast in 2017 is plus 7.1%. In January and February, we had plus 9% global basis I’m not talking about Dufry division, but I’m talking about globally basis.

In 2018, we forecasted is 6.2% and in 2018 5.8%. I think the reasons are clear here Asia-Pacific, Middle East and Latin America; obviously, we are represented well in all these regions, except in Asia.

If we move to Page 13, I have repeated many times the strategy and Dufry’s segmentation, but in terms of Dufry’s segmentation, I think the diversification strategies also represented here. 27% of the business is U.K., Central and Eastern Europe with Division 2, 22% of the business in Southern Europe and Africa so on and so on.

I think it's relevant to say that still in Asia and Middle East we have only 10% of the market. We have not represented probably and I repeat in the past, or in Belgium, is to multiply this 10% by 2% obviously in order to balance the business during the next five years.

In terms of Dufry categories, the most important, perfume and cosmetics 32%, confectionary and food 17%, luxury plus 7%, wine and spirits 15%, that's confirming again the strategy of the company regarding the product diversification and the product mix. In Page 14, Dufry is still a profitable company.

I confirm that 91% of the total sales this year are generated in airport retail, but we have a significant group diversification in border shops, railway stations and cruise lines and seaports. During the next five years, the company has the intention to expand these categories especially, the cruise line and seaport and the border shops and specifically in the regions where we are not well represented from the retail point of view for a seaport in Asia.

Dufry by sector, Dufry duty free 60%, duty paid 40%. I think ground value of the company is going to reach 50-50 balance between the two businesses that we comment on many times.

Let’s move to Page 15, implementation of synergies. I already commented on that.

CHF125 million, I don’t think that I should comment on anything else. Maybe that in the P&L 2016, we had an impact in terms of savings in the cost structural CHF49 million and in terms of gross profit margin, positive impact of CHF14 million.

This is due to both duty free acquisition. If we move to Page 16, I think in January 2015, we were here and I remember that we comment on the efficiency plan, CHF50 million target efficiency plan.

And one of the arguments we did at that time, is that obviously as for several years of acquiring companies, it was time to really reorganize the way we work and the opportunity to really be more efficient. At the time that we acquired World Duty Free, I have to say we kind of do everything at the same time and we differentiate between synergies efficiencies.

We differentiate because obviously, there are two different ways of generating both things. In the World Duty Free case, what we said is CHF105 million is the target in terms of synergies.

And when somebody, when analysts asks me, why are you talking about now synergies and not efficiencies and I said because I think the efficiency is something that we need to implement in a different way and we need now to concentrate in delivering to the market what we have promised at the time that we acquire the company and we put also the efficiency program [indiscernible]. Now I think after the integration of World Duty Free, is the right time to come back to the originality as how to make the things better?

How to continue? Obviously, with the growth of the company, with efficiency of the company and one of the most important initiatives probably not one of this, the most important initially is this operating model implementation.

I think this is in my view and is the intention of the company that will this business model -- business operating model will be implemented, the company will be more efficient, more focusing the customer and also, we generate more profitability. What are the targets here?

Number one, it drives growth. Drives growth at what level?

The same level that we have had over the past year from Dominican point of view and I am going to repeat it many times during this presentation, we want to set up these 5%, 6%, 7% obviously depending on the situations, that organic growth representing over the past 13 years. Then drive efficiencies.

It's already there. We have intension to continue to the P&L with 50 basis points at the EBITDA level when the plant business operating model will be fully implemented that will be around 2017 and 2018.

If that one is protect the commercial model, I think what we are going to really deliver to the market is very unique in terms of commercial approach. The reason is more than half of big component that is how to connect with the customers and one of any result and the new generation store that will be opened in the upcoming -- I am going to comment on that later on is one of the main drivers.

And so, the financial model, I am going to say every time the same thing. We are very disciplined from the financial point of view and we don't do crazy things intentionally.

This company has the intention to continue with the same level of discipline in terms of financial approach. Then its increased competitiveness in the market we show you with one single intention, to better serve the customers and fulfill their new challenges expectations.

That's the whole thing about. Then how this business operating model is going to be developed?

Number one it's aligning the operating processes and procedures in the company. To change organizations in this company, introducing the benefit of these process of integration with Nuance and World Duty Free with all the lessons that we have to learn from them too.

And finally adopt the new ways of collaboration between the headquarters, the divisions and the countries. This business operating model is a reality.

It's not a project as we already tested in Mexico, we are in the last steps of the project in Mexico and we'll be fully implemented in 20 locations along 13 group of countries around 2017 and we fully implemented in 2018. Then the second important project and I think it's also very also relevant is utilization, I think we are talking -- everybody is talking about the utilization and to understand what the utilization is about is every time more difficult because we don't want to be cheater company but we want to be a company focusing the customer and we behaving with the maximum efficient possible and the utilization is just a tool for doing that.

Our intension is that this technology will facilitate the increase in penetration in a ticket and as a consequence in spend per passenger and this is a process that is already started too. I think the historical performance in travel, retail is normal, the penetration is very low, only 16% of the total people going through an airport buy something.

The opportunity is unbelievable. We have been for many years trying to connect with the customers before they travel and it was impossible.

I remember that we did things with a taxi driver, with bus stations, with many things and it's impossible because at the moment you are there, you travel is a long way and longtime normally. With digitalization, with digital tools and we're going to sprint home.

This is something that is very important and very useful. Travel retail is very unique.

Everybody is talking about online and high street. Both are very competitiveness and both with probably have anybody the reasons we have, but we have very special conditions.

Number one is we have a captive audience. We invest millions in attracting the people to the shops.

The customers are there. The difficulty here is how to refine really the assortment, how to adopt the assortment to the new -- better new profile, how to connect them when they are in the journey of travelling?

This is the real challenge and we have a very unique shopping environment. Information that we have done in research is 47% of the total customers in terms of people that buy something, normally are based in input buy.

47% of the total people buy by imports based in gifting, price perceptions, promotions, type of assortment, sharing with others and novelties and we Dufry travel retail company and Dufry's has all these things. The product we show you go through the list, I can go up the retail to but all these things are there.

57% of the passengers are planned. They go there with an intension and the intention is very is based in price perception, gift, assortment, indulgence myself sharing with others is the same thing.

We have the opportunity to drive more value and operational growth through this oblique type of customers. Growing these channel for the suppliers is also very attractive because we have very good window display.

What are we going to do? I think the opportunities are there, but we need to really deliver and delivering assortment not delivering a five-year plan.

Number one that we need to do is continue developing our core categories. I think core categories are very resilient to many other types of retail activities.

Core categories, the wine or spirits partnered with the -- are there since the beginning of the travel retail. Number two, is continuing to develop inputs for sure.

Number three is protect our channel it is perceived as value saving channel. Number four is to develop exclusive assortment for travel retail.

Number five is secured level of foothold in the travel retailer, it's got more work to do, better traffic flow within the shops and better location and number six is accelerate digitalization for increasing the penetration rate, the spend per ticket and as a consequence, the spend per passenger. And this limited to the second program Page number 18, this is help driving customer experience is very difficult, is very difficult and Dufry has obviously, a model.

This is model that we are implementing now. Number one, we are using digitalization for understanding better customer.

We have referred this to many of our analysis of information. We have more information than any other company in this business.

We collect information in all the shops. We are operating in 350 locations, 2,200 shops.

Training the staff and I think there are two examples there. One is providing them latest technology that is the iPad and how to deal with the customers with the iPad and really more entertain more shelves through the information they could provide.

And the second one is this program that we have established with Disney in order to train the personnel in really interactive and focusing the customer service. The third one is omnichannel, digital experience.

We have three elements to that; Dufry Red Loyal Program probably you heard about it. We are going to expand it globally very soon.

It's an application that will facilitate your identification and your connection with the company. Pre-order service, this is merchandize and social media celebrities.

And finally, new experiences through digital innovation. The more relevant one is the new generation store.

I think in 2017, you are going to see the new generation stores in several locations starting in Heathrow Terminal 3, Cancun, Melbourne, the opportunity and digital is going to be new type of approach to the customers from now on and Dufry is going to lead the process. The intention is always the same, is how to connect with the customer?

How to provide the customer the service they're expecting? How to increase the penetration and how to increase the sales per ticket.

The way and the approach in terms of communication is here. I cannot go through all the details, but you have here half part in Page 19 implies April arrivals and post arrival.

What you have here is all the channels that we have, we are in the process to implement, on the left side with channels and the locations where we are contacting with the people, is the first time in the history of travel retail that we are able to do that. And the second obviously aimed is that all the stakeholders are aligned.

Its stakeholders starting with the travel agencies, eight carriers, operators, eight landlords and also the suppliers and this is again an exercise of approaching the business from the moment the customer are home to the moment the customer is back in their journeys and we can do it for one single reason. We can do it because we are the largest and we are everywhere and we can connect on board.

We can connect at the airport. We can connect at home.

There are no companies today in the travel retail that can do something like that. The strategic priorities for 2017 in Page 20 and now I want to continue with organic growth.

Organic growth is going to be again in 2017 main focus of the company, drive penetration in the shops, part of the organic growth, including the next generation of store. The connection with the customers and new customer profiles, digitalization.

We are going to continue with refurbishment. We are going to communicate by minute.

Then we have new projects and expansions. I mentioned we have to-date under negotiation 38,000 square meters of commercial space and the target in terms of refurbishment here is 50,000 square meters.

Drive profitability through and efficiency through the latest operating model implementation obviously use this in terms of the best practice to implement the business operating model and efficiencies along the company and leveraging that organization is the key for 2017 will lead in the future also to acquisitions because this is a question that sometimes I hear quite often. Is this company still thinking about to implement acquisitions?

The acquisition is yes, but not now. We need obviously to do the things properly and what the intention we have is to continue with the organic growth and acquisitions, growth at the due time.

The due time is when the level that we'll reach a value -- a level that will be acceptable in terms of what we are expecting from the company as you know between 2.5%, 3% net debt to EBITDA leverage. In Page 21, strategic priorities again, yes with obviously more detail.

Organic growth above 5% and we have signed 22,000 square meters, a pipeline of 30,000 refurbishment. The intention is 5%, 6% in any case above 5% organic growth 2017.

EBITDA in order to reach 13%, 13.5% in turns. I think three areas that I need to remind here.

Number one is the World Duty Free synergies, they are already there. Will be fully impacting the P&L in 2017.

The second one is the contribution from the business operating model efficiency 7.5 percentage point of EBITDA margin and the second one is the recovery of the business in operations like Brazil, Russia and Turkey that obviously at the time we did this announcement were a different world than today. What I can say is the companies in these countries are performing well today so far.

And finally, the cash generation. Cash generation the medium-term target is below 3%.

I will say, we always say between 2.5% and 3%. Net debt to EBITDA and this target remains unchanged.

That's all from my side, Andreas. Do you want to continue?

Sure. So, good morning and good afternoon, everyone.

I'm going to present financial part of the presentation. So, if we move to Page 23, there we have the different components.

Julian already commented most of them. So, I'm not going to repeat it.

Just one comment, which I'm going to repeat now along my presentation is the first quarter was the first quarter where we actually had no consolidation impact. So, as you may know the World Duty Free acquisition annualized in August 2017.

So Q4 is of course 2016 so the Q4 is the first quarter where we can have a direct comparable. Now if I look at the currency then starting with emerging market currencies, what we do see is like the second half of 2016 was a little more benign in terms of exchange rates than the first half.

So especially the Brazilian Real and the Russian Ruble they have stabilized over the last few quarters and they even slightly strengthened from their lows. In terms of the Argentinean Peso, there we had a big devaluation in December 2015.

So there again in Q4 2016, we had the full year impact of that. Going forward from Q1 2017 onwards what we do see is the Argentinean Peso is a lot more stable compared to 2016.

Generally, when we look at the emerging market currencies, we see a lot less volatility at the moment. So, this makes our life a bit easier if I can say that way.

Then if we go to our main currencies, the British Pound, Euro and U.S. dollar.

So, on the full year, we had negative translation effect of minus 0.6%. This was mainly driven by the British Pound devaluation starting in the second half of 2016.

Now if you go to the Q4, there you have two effects; the British Pound devaluation, which increased a bit compared to Q3 and also the Euro Swiss Francs was a tad weaker than in previous quarters for that in the fourth quarter we had minus 3.3%, versus minus 0.16% in the third quarter. Now if I look forward into 2017 we will continue to have a negative FX impact because of the British pound of the June 2017.

Just to reiterate what we always say at this point is we are lastly naturally hedged, so when we talked about FX impact, this is mere translation impact but no transaction risk. Then if I move to Page 26 the P&L overview, so again we already discussed topline, if I then start directly with the gross margin.

So, this improved 40 basis year-on-year mainly driven by synergies. On the concession on a full year basis this increased as a percentage over sales because of the consolidation of World Duty Free, but if you compare the full year to the nine months, you will see that this remains stable at 27.2%.

Then personnel and other expenses, they improved by 1.2 percentage points year-on-year and this was same percentage also in the fourth quarter comparing Q4 2016 to Q4 2015. Overall, EBITDA was 0.1 percentage higher than last year.

Then below EBITDA, we have the deprecation. This is in line with last year at 2.1%.

Amortization, this is higher as an overall amount because again of the full year consolidation of World Duty Free. If you look at it on a quarterly basis, you will see that we have a charge of CHF95 million approximately for the quarter.

This is fully in line with previous quarters and that is also the number you should assume going forward for 2017 on a quarterly basis for this line. Then the next line we have here is the linearization and just to remind everyone, the linearization is related to our Spanish concession contract.

Here we had a charge of CHF75 million as we communicated. For 2017 for the full year, the respective amount will be CHF59 million.

Again, to mention, we have a very, very strong seasonality in that respective line. So, the biggest charge that you will see in linearization will be Q1 2017 and the charge for Q1 will be CHF42 million.

So, for everyone to be clear on that one. Other operational results ended up with CHF42 million.

There the restructuring cost, the additional charge that we put in 2016 was CHF6 million. Also, the mixed element was basically project cost, start-up cost, which amounted to close to CHF20 million.

Then on the financial results, we have CHF215 million of expenses. As we mentioned on our last call and we’re going to discuss that later on, we repaid the U.S.

dollar bonds and that generated one-off charges in total of CHF19.6 million, all of which were charged in the fourth quarter. Of those CHF13.5 were cash and those were charged to the financial result.

Just to remind, the annual interest expense of that bond was CHF27 million. So, we're going to save that.

So, in principal you can reduce at least the financial results by that amount. Then on the income taxes, the income tax charge was CHF11 million.

This would translate into a tax rate of about 20%. As you know there is many discussions in many countries on corporate tax rates and I think the forward cost is really, really difficult to make.

I don't dare to do it. What I can say though is we internally continue to use a tax rate of 20% to 25%, that’s the best guess that we have to take that pinch of salt.

Then moving on, non-controlling interest were CHF43 million and the biggest minorities we have are in the U.S. The U.S.

performed very well and as such, I think that is also reflected in that line. And then to conclude, the cash earnings where we add back acquisition related amortization amounted to CHF323 million.

So, CHF114 million higher compared to last year. Now if we go to Page 27, so there we have basically just on the first quarter.

As I said, you can directly compare it because there is no acquisition effect anymore and I think what these two charts do show in a very, very nice way is all the work, the integration work that we have done. So, you do see the 40 basis points that we have on the gross margin and you see the 160 basis points in total on the EBITDA margin in Q4.

So, I think it does reflect all the work we have to done to generate the synergies. On the synergies side, already mentioned by Julían, so CHF60 million are already based in, in 2016.

There is another CHF60 million, which we expect to come in 2017. On the cash EPS, moving to Page 28, the cash EPS has become a lot more seasonal ever since we acquired Word Duty Free.

Especially this linearization effect that I was mentioning beforehand adds to that. So, I think we need to look at on a quarter-by-quarter basis.

If you look at the fourth quarter, cash EPS grew by 60%. On a full year basis, it was 50% growth.

So, you do see again the synergies and the improvement coming through the bottom line. Then on the cash flow statement, Page 29, we had a very strong cash flow generation, year-on-year plus 43%.

Also in the cash flow, you do see the seasonality of our business, especially in the working capital and we’re going to see that later on. We will discuss core networking capital and CapEx in a separate slide, but if I look at the other lines here, there is actually no surprises or nothing unusual in the cash flow statement.

So, I think its suffice to say that we are very cash generative as a business and we have used the cash to deleverage the company. Then on Page 30 we have the two-key metrics for the free cash flow and starting with the core networking capital, on the right-hand chart what you do see very nicely there is that we have been able to lower the core networking capital year-on-year starting with 2014 before the acquisitions and now ending up at 5.4%.

If you then look at the seasonal pattern, you also see that the improvement that we have shown in Q3 so this is about one percentage point year-over-year, we have the same improvement in Q4. So, this improvement on the core networking capital, I think we consider it structural.

So, we really have made an effort to improve the core networking capital and to generate some cash there. On the CapEx side, we have 3.2%, sorry CapEx is 2.2% of our turnover.

This is bang in line with the 3% to 3.5% guidance that we gave and is also fully in line with CHF250 million, CHF275 million that we indicated. Going forward, we feel that the 3% to 3.5% range is the right percentage to use.

So, I think there is no change in that respect. Now if I move to the balance sheet on Page 31, again I keep repeating myself, it remains substantially unchanged.

There are no surprises there. Biggest items are intangible assets, so concession rates and goodwill.

On the part liability side its obviously net debt and equity. Then if we move to Page 32, so what you do see here is that we have reduced net debt by CHF200 million.

So, I think we deleverage the company somewhat in 2016 covenant was CHF369 million versus a threshold of four times. Now going forward, we do have a number of project in our pipeline in Greece and LATAM which does require investments in addition of our normal CapEx.

Overall, we expect to deploy a bit more than CHF100 million in these projects and that will happen in the next couple of quarters. Now because typically the next -- the first quarter and to certain extent also the second quarter are not very strong in terms of cash generation, we have triggered what we call a permitted ratio increase.

This is an existing feature that we have in our bank facilities and this is designed to give us short term flexibility for three quarters. So, until the end of 2017 in that context for small and midsized investment and the basic idea is basically to have sufficient headroom, which is typically or not typically, which is required by the rating agencies.

So, this has been executed important point here the permitted rate increase does not trigger any additional costs neither one-off, nor recurring. Then to conclude, as I mentioned earlier, we repaid our $500 million U.S.

dollar bond expiring 2020. We did this repayment in December 2016.

This was our most expensive piece of steps with a 5.5% coupon. So, the savings until the maturity of the bond will be in excess of $80 million.

As I said there has been a one-off charge of US$19.6 million and yearly saving would be around US$27 million. So, by currency, again we have mentioned that in previous calls, we try to match the cash flows of our business.

So that’s why you see an important part of our debt in euros and U.S. dollars.

That is all from the financial part. So, I hand back to Julian.

Okay. Thank you, Andreas.

I think Page 35, we have what correlates the definition of what we have discussed today. Number one, Dufry in 2017 is going to be focused in driving organic growth.

Achieving this above 5% organic growth is one of our target, using the new technologies, using the newer spaces that we are negotiating and using the refurbishment of the 50,000 square meters I comment before. The second one is the business operating model.

So, a significant improvement in terms of efficiency and where we work, but also in terms of the P&L and this 50 basis points is a target that will be developed around 2017 and 2018. It's also and I would like to do it with obviously we felt a little possible but we are in our presentation from a financial point of view that the new extra generation that will be launched in Heathrow Terminal 3, Zurich, Melbourne, Cancun, Madrid, they're now in process and will obviously change the way that travel retail shops are perceived.

Finally, continue with the cash generation and leveraging with the middle long term target of 2.53%, leverage net of EBITDA. That’s the presentation so far, and I think it's probably the most interesting part the Q&A.

Thanks for taking my questions. Joern from UBS.

The first one would be on the equity free cash flow. I think it was around CHF200 million for 2016.

I have to admit, significantly below what I have expected. I was close to CHF300 million.

Now it seems the organic growth is becoming more capital intensive with the new projects in Latin America and Greece. Does it also automatically mean that organic growth in 2017 will accelerate versus Q4 2016?

And also, what should we expect then for an equity free cash flow run rate for 2017, 2018 considering net working capital, tax charges and potential prepayments? This would be the first question.

The second question on the EBITDA. Can you please share with us what was the incremental synergy benefit in Q4 from World Duty Free?

And the last question would be on the concession fees. What do you expect in terms of step up, including potential repayments for 2017, 2018?

Thanks very much.

Sure. Okay.

Look, I think on the equity free cash flow I have tried to highlight that, but I think it's really, really important here is that if you were to compare Q3 with Q4 and I think that’s what you're doing, we do have a very, very strong seasonality nowadays on the networking capital. So, I think what is always a bit dangerous here is like to do the short-term comparison because this may be misleading.

If you look at the overall model, I think we should be able to significantly increase the equity free cash flow, because actually as the synergies come through and as they're going to be reflected, they should be increasing almost frank for frank if I can say that. So, if we can continue to grow positively as we do now, you should see an increase, which is quite significant.

So. I would, what I would want to avoid is to tell you that CHF200 million is the right number to plug in, in your model, it should be a lot higher than that.

And one point that I also wanted to make, which you eluded to. I disagree with the notion that growth, organic growth should be more cash intensive.

If there are some specific projects that I mentioned, that doesn't necessarily mean that the CapEx or the overall investment that we need to do in project should be higher going forward. So, I feel very, very comfortable with the mobile that we have done in the past or that we have had in the past will also be applicable to the future.

Okay. From my side, the organic growth obviously is condition to many events that are also not controlled by us.

I think to say that we'll above 5% is the more realistic figure, we have only two months. If you ask me, the organic growth within the first two months is more than 5%, the answer is yes.

But I cannot this is still the positive term and is going to be higher than that. My statement is in 2017 the barrier is to be above 5%.

Regarding the impact of the synergies in the last quarter, I don't have the information here, but I think this information we can share. There is not initial new contact or back operations department we can discuss it.

I don't remember exactly how much and the last question was?

The growth in concession fees is step-up including potential prepayments for 2017-18.

Increase in concession fees. Increase in concession fees in 2017 this is the question?

I think we'll be quite stable. I don't think that in 2017, we are not going to see a lot in terms of increasing of concession fees, instead obviously, we are now significant position as with the higher with the like-for-like company, I don't think so.

Thanks Julian. Jon Cox with Kepler Cheuvreux.

Congratulations on a very interesting set of figures, particularly that organic sales growth in Q4. I wondered if I can just push you a little bit more, actually we don't have to plug into our models necessarily, but what was organic sales growth in the first couple of months for the year, because the way you're talking, it seems to be close to about high-single digit rather than five at this point.

Second question, you talked about gross retail space expansion being about 10% of your existing space currently. Just wondering, are you going to be withdrawing from any space, if at all there are any contracts and you know satisfied with or could you give us a net figure basically for this year.

And just to come back to on that CHF100 million expenditures you mentioned Andreas, is this just because of the timing or is it and it's not included in your guidance of 3%, to 3.5% or actually is that included in your 3% to 3.5% in the rate and it's all about timing. It's just you're doing it in the first part of the year and you don't have sufficient funds to do it.

Thank you.

Well actually this is a question that I already answered, but yes, in February the company has grown more than 7% organically. That is generally in February and I don't want to lead to any conclusion.

The conclusion for me above 5% okay. Number two is regarding the space.

The target for this year is exactly the 10% of the total space more or less as new space added to the concession portfolio and we already got 22,000 and the third one is regarding…

So, the reason, I sounded is mainly a timing issue. So, if you look at the overall CapEx number I feel comfortable with the 3% and 3.5%.

Timing wise we will have to deploy that cash into first and second quarters and we just wanted to make sure that we are comfortable if you want on the covenant side.

Thank you.

Thank you. Felix Remmers from Credit Suisse.

Two questions from my side. First you mentioned that you renewed a quite a lot of new contracts and you even mentioned that a similar terms, so I was wondering why is that normally structure you would expect that you have to pay more to the airports.

So, what are you seeing in these negotiations? Do we have to hit some feelings in terms of what your competitors are willing to pay that will be the first question.

The second question would be on the gross margin expansion. I just wanted to understand a bit better why does it take a bit longer to expand gross margin versus realizing operating cost synergies?

So, you include only CHF40 million on the gross profit margin level, why does that take longer than the other?

Okay. Regarding the concession fees, that is not a secret.

There is no fear that we are in a market that many -- no we have commercial propositions that offer the authorities who are able to offer this landlord the opportunity to increase their income who is obviously their center passenger. The negotiation process is quite often where you roll there with that proposal where you're visualizing in five years’ time the income for the landlord let's say landlord and the way to manage to maintain, this is specifically that is value created for the landlord and I think this is not an issue that there is a topline or is a threshold that now is lower than in the past.

I don't think that this is the case in this negotiation process and this negotiation process was one-on-one negotiation where we offer them from the commercial and financial point of view propositions that are increasing their revenues per passenger in the long-term and most of the contracts that were here were for 10 years, extended for 10 years over there is a long-time propositions. Number two is regarding the margin is obviously is very difficult that they want in our cost structure you can't go there and say, we don't save it.

You can't calculate it and it's very obviously in the gross profit margin, you have different alternatives. You have -- first of all you have inventory with the old price and obviously, you need to sell the inventory and at the same time buy the new inventory.

Then you have negotiation processes that are based in volumes and then you need to wait until the volume is performing and there is no single way. There is not a mathematic issue where you will bid and the next day it's there.

It's a combination of negotiations where you leave it to increase the gross profit margin 40 basis points, but it's a consequence of different negotiation processes for the reason it takes more time especially because the old inventory has to be sold. Another question.

Okay.

Yeah, I have group of questions with regards to synergies. First of all, just to get it right, the numbers you mentioned that are reflected in the '16 accounts, these are actual numbers.

It's not analyzed or something like that

It's actual numbers.

It's not analyzed right.

Correct.

So, if I calculate them the GAAP even to the increase synergy expense was CHF125 million, I see that transfer of 70, 80 basis points, whatever the sales expectation is. That means more is required to get above 13% and here is the question, do we have to see further leverage, top line growth and the BMO impact to come through in order to get the margin above the 13%.

That's a bit of a difference to what you acquainted in the past right.

Obviously, you have three components of this difference. One component is in the synergy side.

This is something it's already there. This is component and will be implemented along 2017.

The second component is obviously the efficiencies generated through the business operating model implementation these 50 basis points that are already calculated. And the third one, is at the time I comment on the 13.5% EBITDA margin target, it was based in the situation we have direct cash changes.

The Russians have changes in Russia, the Russians in Turkey have change in Brazil. What we have seen so far is a record of this operation and these operation were good in terms of the blend in terms of the mix.

And I think what we need now is this business come back. I ensure this is coming back because it's a reality.

Brazil is growing to lead it. Russia is going to lead now.

The operation in Antalya is also recovering compared obviously with low season. We need to see the high season.

I don't think that it will be a problem to reach 13%, 13.5% EBITDA margin if these conditions are met.

Okay. And the second question is with the very strong that we see in Spanish airports, is there any chance that the reorganization charge is going to be reduced or that we're going to see a different pattern on that line?

So, far no. So, I think we would need to have another extra strong growth with extra year of very, very strong in order to get closer to that, but if we just do the basic plan that we have today, the minimum guarantee will stay, linearization will stay as it is today.

Okay. And the third one again to the BMO, how should we look at this?

Is it primarily a cost, is it tackling OpEx rather than the gross margin or what the effect in it? And second attached to that on the timeline, could we put in I don't know when you say by end of '18, you want to have these 50 basis points on the EPA margin say half of that in '17 and half of that in '18 and then the full 50 basis points in '18 or how should we see that?

The point here is, the main reason for doing the business operating model is not the cost saving, but as a consequence of the business operating model that are cost saving, because obviously, the company will have a different structure and a different process on procedures and mostly would be more efficient. This is one thing.

As a consequence, from the financial point of view, the 50 basis points is something that we have calculated based on the change of structure in the chains that we work. When will it be effective in the P&L?

We will try, to do it as much obviously as fast as possible in 2017, but yes due to the calendar of implementing the different events, it will be the second part of 2018. This is the more realistic way of looking.

What is, sorry, I forgot the other part of the question.

That was the question. Thank you.

Just one question, the Hong Kong team available, two different categories, could you tell us little bit your position in this one?

I think in Hong Kong, there were two different packages. We have only participated in the perfume and cosmetic buckets.

We have not participated in the bucket of tobacco and spirit. The reason to participate in the bucket is when we analyze it the project, it was under the parameters from the financial and commercial point of view that we were satisfied that we could be awarded, which obviously, the restrictions we have, the restrictions we have, the discipline, the financial discipline I said.

I think 60% of the awards of the points or whatever they name they use is due to commercial activities and 40% is due to the financial offer. As a consequence, I got impression that we have a change to go further.

We think that we have been able to offer the authorities there an opportunity to really drive more sales, drive more income per passenger. That is in fact what they're looking for.

Then how the competition and how the different participants will behave, we got no control on that, but I can tell you one thing. We went to work, we went to win in Hong Kong is the only thing I can say.

Thank you. Basic model, a completely different question, could you elaborate on the shop in the Heathrow that you shop and the new experience that the consumer is going to have there?

Well, the shop is difficult to explain, because we don’t have a picture, but the reality is that the shop will carry on a specific initiative from the digital point of view on commercial point of view that will change the way that the shops are operated today. The shop will be a shop alive that will comply with the customers when they are around in the corridor.

Obviously with technology that is based in digital number one. Why, because if you identify they are there, you can’t bring the people inside the shop and at the same time offer them personalized offers.

The second thing, the shop will have different departments and different initiatives that will be also dressed up with digital technology. The shop depending of the time of the day, will input messages in the different languages of the nationalities going through.

For example, they will have different departments in terms of products and it is offset business because the shop also delivers service for example, is social media areas where you can obviously contact with the social media and also you will be attracted by the famous personalities that are in the country. Do we have this facility to discuss and go inside the shop and discuss with them about the shop and about many other things?

For example, the shop will have new product and I mentioned here the one of the most important things for the company is to develop a specific product for travel retail that cannot be acquainted in any of the places. And I repeat in many presentations the same thing.

We have developed with a Swiss company Lindt, capital of flavors, chocolate flavors, one of them is Ghirardelli and was a tremendous success because the only way to buy this product was in Dufry. Now there is another, there has been one of them is with Diago, they are going to produce a specific whisky that will be only available in Dufry’s shops.

That is the way that the shop will contribute. It’s not only the format.

It’s not only the awards. It's also the way that we will be operated.

Thank you.

Just a quick question on South Korea and what’s happening there with China banning travel groups to go there. Have you started to see any slowdown in your business?

I think you are about 3% or 4% of groups sales in South Korea currently.

Not yet. In fact, the operation is performing better than even during the last quarter 2016.

We have not seen anything yet, but the number of customers attracted to this specific location in terms of groups is very low.

And then just sort of deleveraging M&A sort of dividend question, the first part with the M&A targets in Asia just want to get what are you looking at is? Is it sort of smaller players potentially like bolt-on deals may be over the next couple of years always thoughts of a big bang.

There is a big chain players I think Sunrise, is that something you will be looking. And the second point, just on the deleveraging and the commitment to may be paying a dividend, what are your thoughts currently depending on how this year goes.

Will you be in a position may be to pay dividend on 2017 results if you deleverage as much as maybe you could based on what organic sales growth is currently. Thank you.

I think with the current financial structure; the company is not in the position to do decomposition. This is obviously reminder they have done many times.

The company has intention to continue exploring opportunities based in acquisition that are legal and more size that can be accumulated or acquired with the current financially structure. At the same time and probably in order of events, the dividend is before this acquisitions even there is more ones.

The Board is considering that in 2018 as a consequence of 2017 results a dividend could be a good way of returning capital to the shareholders. And how much is obviously a different question.

We are very early in the year, but I think is a very active initiative within the Board in order to confront to next general assembly obviously, the general assembly is now the next one, after next, but the company will be in the position to pay our dividend. What are the conditions here?

Obviously, one of them is the performance of the business and the utilization of cash. The second thing is the leverage of the company, but we have seen is that we are deleveraging as we expect obviously independently of the events that happen in Turkey and all these places could be better.

But we are in the process of deleveraging at the level that we confirm that Board the possibility if they decided to go ahead with the dividend. I think 2017 if everything is normal, the Board will be in the position to decide it.

Thank you.

Thanks for taking the follow-up question. And first would be on Greece with Frankford and privatizing a couple of airports where you stand here in terms of negotiations?

What can be the impact of the profitability? Second question making the EBITDA approach with the synergies, this organic growth you're targeting, EBITDA of 1.05 being looking reasonable to you for 2017.

Thanks.

This question is about Greece, the otherwise would be more difficult. We have a very long contract.

Sorry, we have a very long license, duty free exclusive in Greece okay. The license is what it is.

We can’t sell duty free products of the airports. On top of that, we have a very good relationship with Frankfort.

They are our landlords in many locations as continue in Peru. Continue in Bulgaria and we are creating possibility to create more value in this province and we are in the middle of our negotiation where we have identified and we call it quick wins, in order to accelerate extra growth in the locations they are going to renovate because as you know, one of the most difficult things we have in Greece in the regional airports is shop location, shop layouts and especially traffic flow.

The shops normally are in the first floor. The U.S.

licensing you have to go there and looking for the shop. They are not go through.

There are many thing and I think with Frankfort, this is something that they already know. It’s a great obviously, opportunity to develop better business in these regional airports and we are very confident that we will be able to really deliver an extra value to Frankfort.

On the second part is EBITDA bridge and the possibility, we don’t give guidance regarding EBITDA and I’m not going to change this strategy in the future. I think what we try is to provide you with information in order that you may build your assumptions based in the information, but anything else is very difficult, Thank you very much.

Any other questions in the room if not we go to the calls. Thank you very much.

We can continue with the calls. Yes, questions from the audience participating through conference call.

Hello and thanks for taking my question. Just wanted to elaborate little bit more on the new generation store concept, the new generation concept another one that other people asked about.

I understand at the movement the defined locations are Heathrow, Zurich and Melbourne, but I always want to understand there is going to one in Asia. Can you just offer any light on that and also just perhaps provide a little bit more information in terms of how it's going to elevate the shopping experience?

How brands are going to get more exposure and a little bit more on some of the digital components and may be the center placed elements?

Okay. Melbourne is what we have identified in Asia and I think this is already announced in where Asia, Australia whatever.

For us it's Asia because it's the same division and it’s in the process to build. In fact, we're quite advantaged in terms of the contraction and the renovation.

The second part of the question.

Was how it’s going to be experienced?

Yes, I already commented on the new generation. The store I finished from the commercial point of view a significant advanced compared with the shops that we see today in travel retail because the shop is alive.

The shop is a shop that in terms of interactions with the customers, will create another extra value for increasing the penetration and it's been particular. The reality that the experience that we have let’s collect over the past years in terms of retail activities in travel retail with all these companies that we have acquired with the different ways of doing things in Nuance and Duty Free have contributed also to increase the commercial performance and secondly this is my view the novelty and the approach to the new construction.

What I say is our hope that we’ll communicate with the customers through digital experience, but this is something that is very important, but at the same time, the most difficult thing is the content. What is the content that this screens should communicate to the customers and we have a significant project leaded by our Chief Operating Officer, José Antonio Gea with the intention to develop the contents in all these shops because digital, see there are normal secrets.

Digital screens are everywhere. The point is what to communicate and this is obviously one of the most important thing.

The second important thing is a new departments in new areas that the shop will carry on. The question coming from the travel retail, I think it's better that we don’t comment on anything specific because obviously, this is also a knowhow.

The third thing is regarding how to attract people inside the shop. I commented on the famous localization and EB Technologies for really attracting the people inside the shop and they said the people, when they are in the airport.

There are many areas where this shop will contribute an extra value to the travel retailer. What is the value proposition of travel and historically we have seen one, this half good savings?

This is the value proposition. This has been, sorry the value proposition.

We have been for many, many years talking about if its 20% cheaper or 30% cheaper or 50% cheaper, now the concepts will be different. The concept is what is the value proposition to the customer and we need to be an elaborate in parallel with the customer development.

By the year 2020, one third of the total workforce population will be millennial. Millennial that are not reading newspapers, and not watching the TV, and nowhere standard watches many other things.

I can't obviously tell many things because we have to research thoroughly. One important thing, 96% of the time they in an airport, they are committed to Internet.

We need to understand how to connect with them and part of the whole strategy from the utilization point of view is exactly that.

Thank you.

Okay.

Hi, good afternoon everyone and I've got three questions please. The first one is just about this CHF100 million of investments that you’re going to be making in Q1 and Q2 in LATAM and Greece.

Could you may be just clarify again whether this CHF100 million is included in the CapEx guidance for the year? So, for the year if I take consensus revenue are we looking at CapEx of around CHF260 million and then CHF100 million or a total CHF260 million, but with early facing in Q1, Q2?

And then my two other questions on the U.S. duty paid, I think you mentioned single digit growth in your current trading comments, which is one of the slightly less spectacular growth rates this year some beverage players and suite players have been tackling retail and convince.

People like HMSHost have made acquisitions there. They are talking more and more about Hudson and then Parities like competitors.

Has this segments of convenience in the U.S. become more competitive and finally on organic growth, what you think it would take for your like-for-like revenue to completely match the growth in passengers that we're seeing?

It sounds like even in your January, February trends, you are talking about passengers doing plus 9, you are doing plus 7 is the Asia underweight the main delta here?

So, if I start with the first one, so to answer your question, let's say that 3%, 3.5% of CapEx for 2017 should remain unchanged. So, it shouldn’t be higher in a way.

So, it's really about the cash out that we will see in the first two quarters of this $100 million.

Okay. Regarding the U.S., the debate what I can say is that obviously, we are running the most important, largest and more efficient company in travel retail in the U.S.

and one single digit in this case, single digit, high single digit growth is in my view a very remarkable performance because the number of passengers that are more impacting this business are the duty-paid passengers and the duty-paid passengers are not growing a lot. In terms of competition in the U.S., the U.S.

market is very competitive. It's very competitive.

I don’t see what is the difference now compared with other operators have some costs in my view, the rest operational model and this is reflected not only that, it is reflected in the P&L. It is reflected in the yearly growth and cannot be compared with any other ones.

Again, I'm talking obviously from Dufry's perspective and maybe using that I understand that there is not, is growing more than any other competitor is having better operational margins than any other competitors. Regarding the like-for-like, I would prefer not to mention the like-for-like is separated from passenger because I learn a lesson.

When the devaluation of the currencies, Brazilian Real, Russian Ruble whatever, Mexican Peso and many others, I think to convert the growth in passengers to sell depending on the degree of devaluation. And I don’t think that today we are still in the position to separate the degree of this devaluation from the growth of number of passengers.

I prefer to say the organic growth including like-for-like and expansion will be above 5% instead to mention the like-for-like independently.

Okay. Thank you very much and I'm sorry I just would like to go back on that CHF100 million investment.

So are you saying that there is about CHF260 million in CapEx and then separately it is not CapEx but it is CHF100 million or are you saying that the total spend in CapEx, which would include LATAM and Greece would be about CHF260 million please.

So, there are two things. Okay, so one is the timing of the cash flow okay.

And what I'm saying is like there will be a cash out in next two quarters of CHF100 million plus okay. That's what you will see in the cash flow statement.

The other question that you put is to say what will be the CapEx number at the end of the year? If you look at that percentage of our turnover and there I'm telling you it's 3% to 3.5%.

Okay. So that's in principal the way I would describe it.

All right, thank you very much.

Thank you.

Hi there Julian, Andreas. Hope you're well.

I just have two quick questions. One is just to clarify your comment on space expansion and the contribution.

So, you're aiming to grow space by on a gross basis 10%. So, should be expecting a significant acceleration in the contribution of revenue growth from the space versus last year's 0.6% and then the second question is related to your increase in the synergies from World Duty Free.

I wondered if you could just elaborate in a little bit more detail as to what areas specifically you found in addition to your original plan or was it that you're just guiding us a little bit on the conservative side? Thanks very much.

Thank you. Regarding the space or the newer space, I think it is obviously difficult to confirm exactly the figure, but if you are considering 10% of gross space, added of the total 425,000 that we had at the end of the year, it will be a good approach.

Then there are differences of the question is how many square meters are they going to close down this year? This is process we don't [indiscernible], but we don't know.

I think in terms of the model, personally I would put the 10% in terms of continuation of the space and then discount basically in basing historic information percentage. Then regarding the synergies, the CHF20 million, most of these synergies are the extra synergies are going to be generated through the gross profit margin improvement because better deals that we have signed with the suppliers and also there is obviously a part that has been identified as cost synergies, but the most important part I hope is generated through the gross profit margin and also it depends on the volume of sales as I said before.

Great. Thank you very much.

Thank you.

Okay. There are more questions here.

One more question in the room, please.

On Inflight just to clarify this one. You mentioned that on Slide 19 when it comes about communication with the customer and you call it Inflight Emotion, can you just exclude or maybe you don't exclude any penetration into that specific segment.

I recall that you don't like the business because you don't have control over the working capital management, but maybe now that even its, I don't know, 50,000 feet above you have connection to the internet, so what is the statement there?

I am still in the same position. I don't like the business when you don't control the cash having to control the merchandize.

We're not talking about that.

Okay. Thanks.

Thank you very much.

Okay. That's all.

Thank you very much for all the participants in the room and in the conference call. And let's see during the first quarter results how the things are going.

Thank you.

Thank you.