Julían Díaz - Chief Executive Officer Andreas Schneiter - Chief Financial Officer

Joern Iffert - UBS Charlie Muir-Sands - Deutsche Bank Rebecca McClellan - Santander Jaafar Mestari - J.P. Morgan Jon Cox - Kepler Cheuvreux SA

Thank you for the introduction. Good afternoon.

This is Julían Díaz speaking. There is also Andreas Schneiter participating in the call.

Welcome to Q3 results presentation. As always, we are going to use the presentation - the information disclosure this morning in our website.

Please go to Page 5 of this document. One of the most important periods of the high season in the Northern Hemisphere is almost finished.

We could confirm that the good side prospects commented on during the last call are delivered. The highlights of this page show what I am stating.

Solid organic growth, increase of 7.9% in nine-months. Gross profit margin increased 59.4%, 100 basis points higher than last year.

EBITDA grew 9.3% in Q3 and 8.5% in nine-months, reaching CHF744 million in the year-to-date. And finally, free cash flow was CHF464.6 million in nine-months with CHF333 million in Q3, the highest quarterly results in cash flow ever.

If we move to Page 6, we will be able to really go through the details. Turnover reached CHF6.2 billion in the first nine-months, a 6.7% increase compared with previous year.

And if we consider also the effect of FX minus 0.9%, we reach plus 7.6% increase in turnover including rate. Organic growth increased by 7.9% in nine-months and 7.6% in Q3.

The performance by division was as follows. Division one; Southern Europe and Africa, turnover reached CHF1.4 billion nine-months, an increase of 8.7% compared with previous year, driven by strong 10.1% organic growth in Q3 and 7.7% organic growth increase in nine-months.

A strong growth in African countries, Morocco, Ivory Coast, Ghana, Kenya, double-digit growth increase. Turkey, it was strongest double-digit growth supported by the return of Russian customers.

France, Italy, Spain and Malta, single-digit growth. Division two; Central and Eastern Europe.

Turnover reached CHF1.6 billion during the first nine-months. The division reached 7.2% increase in total turnover in constant FX rates and 2% in reported figures.

Organic growth reached 8.4% in the division. By country, a strong double-digit growth in Syria, Russia, Kazakhstan and Armenia.

Single-digit growth in UK, Sweden, Finland and Switzerland. Single-digit negative performance in Bulgaria, due to the rerouting of Russian passengers to other destinations.

In division three; Asia, Middle East and Australia. Turnover reached CHF574 million compared with CHF569 in 2016.

Organic growth turned positive in Q3, flat 4.4 compared with minus 2.1 in last year. And as a consequence, we reached flat 0.5% organic growth in nine-months.

After [indiscernible] with significant good results in [spend] (Ph) production since we finished in August. We continued with two impacts in the organic performance in the division.

Number one is the food renovation in shops in Emirate and the temporary closing of the Sri Lanka. Both issues will be solved during the last quarter 2017.

All the countries in this division is performing well. China continental, Macau, Indonesia, Cambodia double-digit growth.

South Korea, Singapore, Emirate, Sharjah, Jordan and Kuwait single-digit positive growth. The negative performance in [indiscernible] and the closing of our operations in Mumbai also impacted the positive performance in the division.

In division four, Latin America, with a turnover rich CHF1.2 billion plus 13% compared with previous year. Organic growth increased by 12.7% in nine-months and by 13.2% in the quarter.

Double-digit positive growth in Uruguay, Chile, Peru, Dominican Republic, Brazil, Jamaica and our operations on more cruise lines. Single-digit growth in Argentina, Ecuador, Mexico, Aruba and Puerto Rico.

Negative performance in our operations in the [indiscernible]. In division five, North America, turnover rich CHF1.3 billion, 6.6% increase compared to previous year with organic growth of 6% driven by a predictable and long-term duty-free and duty pay business, duty-free with significant consolidation of growth in our operations specially in Canada.

Regarding our gross profit margin, the increase of 100 basis points reaching 59.4%. The [confirmation] (Ph) of [indiscernible] of our last acquisition and the increase of efficiencies in our logistics system were the drivers of this performance.

EBITDA grew by 8.5% reaching CHF744 million during the first nine-months with 11.9% EBITDA margin compared with 11.7% last year. The main positive drivers supporting the EBITDA increase were the organic growth and gross profit margin increase.

Consulting fees and genial expenses partially compensated then because the rent - increase in Spain and the refurbishment and extensions of several of shops during this part of the year. Regarding EPS have reached CHF5.81 from CHF4.55 in 2016, 28% increase.

In the first nine-months of 2017, we have generated CHF454.6 million in cash with CHF337.1 million in the quarter. This cash flow was impacted by CHF104 million during the first nine-months due to some extensions and new negotiations of important contract that commented on during our previous call.

As a consequence, net debt was reduced by CHF275 million by September 2017 compared with December 2016. For completing the highlight, the opening of new commercial space, 20,500 square meters and the refurbishment of 23,000 square meters in 50 shops supported our acceleration of organic growth.

Year-to-date September, we have signed a contract adding 18,000 square meters to our concession portfolio where 9,400 will be opened in 2017. If we move to Page 7 please, in this page we have comment on turnover evolution on organic growth.

Let’s focus in trading update. We are taking about the first three weeks of October.

In all the divisions, positive performance in most of the operations in the first weeks in October, significant acceleration compared with the first nine-months. Divisions one, Southern Europe and Africa.

Our operations performed better compared with nine-months and especially Morocco, Ghana, Kenya, Greece, Malta, Dufry in Italy, France, Spain and Turkey. Division two; Central and Eastern Europe.

Positive performance in UK, Finland, Serbia, Russia, Kazakhstan and Armenia. Switzerland impacted due to the closing of our operation in Geneva starting the 1st of October but good performance in the other operations including Zurich and Basel, despite the full refurbishments started in Zurich.

Division three; Asia, Middle East and Australia. Good acceleration in these division compared with the first nine-months.

Very good performance in Macau, South Korea, Indonesia, Cambodia, Emirates, Jordan and Kuwait. Division four; Latin America.

Good performance in this division too, with similar rates than nine-months. Uruguay, Chile, Peru, Mexico, Dominican Republic, Aruba, Jamaica and our operations on lower cruise line performed very well.

Significant impact due to the hurricane in Puerto Rico and Caribbean Island, also not relevant in terms of consolidated figures. Division five; North America.

Significant acceleration of work in the division in all channels, duty-free and duty-paid in the U.S. and Canada with double-digit growth.

Now if we go to Page 8, base of the organic growth is the new space openings that we have communicated in this Company’s call and also in different press releases. We have at least 20,500 of gross retail space that we are opening at this period of time.

Shops in China in duty-paid, duty-free Macau in the casino, several shops in Rio de Janeiro. U.S.

shops in two casinos also in Las Vegas, [indiscernible] airport and we also reorganize the activities in our business with the Company cruise with the Cruise Lines. The start of Dufry cruise services including new ship in Asia is going to be one of the most relevant expansions in this channel in the future.

We have also opened an operating cruise lines in the Mediterranean with two month tour. Regarding the shop refurbished part of the organic growth as augmented, we have refurbished 23,000 square meters, the more relevant are listed in the bottom side of this slide including Madrid, Athens, Guadeloupe, Gatwick, and many others that are obviously clear here.

If we move to Page 9, in page nine I think what more relevant is to comment on the 18,000 square meters signed so far in 2017. Several new shops in Pisa in Italy, Lisbon, four in the Canary Islands, Maldives, Athens, Kazakhstan, Jamaica, Colombia, Bahamas.

And in the U.S. Phoenix, New Orleans, LA, obviously many other operations.

We have expanded so far with 18,000 signed square meters and we have now opportunity of negotiating and in process of negotiation 38,000 of pipeline in the Ukraine operation. Most of them, 35% of them are located in North America, 26% of this 28,000 square meters are in division two.

UK Central and Eastern Europe and other divisions are also clear. If we move to Page 10, there is a second pillar, important pillar in terms of forecasting for organic growth.

International passenger so far in 2017, August is 8.8% and the different divisions performance is also in the chart on the left side. International percentage forecast for the next two years are confirming the positive trend in travel retail number of passengers increasing by 7.4% in 2018 and 5.6% in 2019.

The expectations are obviously facilitating the understanding of the business, organic growth basically is number of passengers and productivity on top of that based also in the currency reported fluctuation. Then if we move to Page 11, what we have seen the pillars of the strategy since a long time ago, we are communicating that this Company is well balanced in terms of concession portfolio.

A brief diversification strategy expressing these top chart on the left side, Dufry by division. The division that is representing the next important part, Asia and Middle East and Australia 9%.

As I mentioned many times, we are in the process and we have the intension of expand the business in this part of the world with the target to balance all the operations around 20% contribution to the sales. Dufry by channel, we are expanding the airport retail business, we represent today 25% of the total airport retail worldwide and airport generated 92% of our revenues during the first nine-months of 2017.

We have also again these channels, diversified channel, cruise lines and seaports, railway stations are more downtown hotel shops. The next month ahead, what we are going to see is our development in the cruise line and seaport business, because we are in the process to sign some new agreements that will expand this business.

Dufry by category just confirmed, personal care is number one, perfumes and cosmetics 33% and we are going to be the leader of all categories from now on. Confectionary, food and catering 17% and affordable looks that today represent 13%.

Obviously we are maintaining all the categories, core categories [indiscernible]. Dufy by sector, the Company is our duty-free Company 62% but we have a good representation f duty-paid activities 38%.

The targets for the Company as I mentioned many times is to reach 50/50. The opportunities in duty-paid are still very high, because as you know almost 65% of the total passengers travelling today are doing it domestically.

And is the way to expand the business that will do it for commercial concern. One is convenience store [indiscernible], the other one is a core categories in duty-paid.

Then we move to Page 12. I think in this page clearly to comment on to this number one is one of the most important drivers for growth in our Company this year and mid year 2018 is going to be organic growth.

We are going to do it in two different approaches, one is the traditional approach including acceleration of commercial initiatives, refurbishment plan and many other promotions and activities that we accelerate here, but also it’s very relevant with the utilization. I think it’s important, because like the retail is today in constant evolution.

Changes in passenger profile, origin of the passenger, motivation and behavior, I think all these passengers are expecting more experiences and better services and differentiated products as obviously part of the environment.

Thank you Julian and good morning and good afternoon to everyone. So let’s move directly to page number 19.

As for organic growth, Julian already commented on the healthy growth in the third quarter of 2017 which was 7.6% and which we generated through a combination for like-for-like growth and growth from the new concessions. And this quarter there were no changes in scope anymore and there will be none going forward.

On the FX impact in the third quarter just turned positive and was 0.5% for the period and as a result reported growth accelerated the to 8.1% in the third quarter. At a divisional level, we had a strong performance across the Group.

In the third quarter again, organic growth in Southern Europe and Africa accelerated to 10%, organic growth in UK Central and Eastern Europe held up very well at above 5%, even if the devaluation of the British pound analyzed at the end of the second quarter and did not support the growth any longer in the third quarter. Asia, Middle East and Australia have a clear organic growth acceleration to 4.4% a number of locations as mentioned by Julían posted a strong growth which more than compensated for the refurbishment impact on the closings and distributions.

Latin America continued to grow double-digit at 13.2% which is remarkable given that compared to the first half of the year, there was no significant tailwind from the Brazilian real appreciation any more. And then finally North America continued to post yet another very solid results number close to 6% growth.

Then on Page 20 we have the overview of the FX translation effects. As mentioned before, third quarter result was positive and this was mainly driven by the appreciation of the euro against the Swiss franc.

Compared to previous quarters, the devaluation of the British pound had only a very limited impact on the translation effect. And assuming that the current rates that we see as of today would prevail, we would expect to see also positive translation impact in the fourth quarter of 2017.

Then let’s move to the income statement on Page 21 and starting with the gross profit line. Gross margin improved by one percentage point to 59.4% as in the last quarter this is mainly due to the synergies from the World Duty-Free integration and they have been main driver of this improvement.

Concession fees as a percentage of turnover increased to 27.8% from 27.2%. Although, three quarters of this increase is due to changes in concession fees, whereby the biggest shift came from the minimum guarantee in Spain as well as from renewal of contracts were not all operations improvements have been implemented yet.

Personal and general expenses combined increased by 20 basis points compared to the last year. if we just look to the third quarter specifically these expenses as a percentage on turnover remained virtually unchanged.

Share of results of associates was negative 2.4 million for the nine-months. As mentioned in earlier calls, the share of results of associates were negative in the second quarter due to a one-off charge.

Looking only to the third quarter, the contribution was a positive CHF2.1 million this year compared to CHF1.4 million in the same quarter 2016. Then EBITDA for the nine-months as already commented was CHF743.6 million and EBITDA margin increased 20 basis points to 11.9%.

Moving to depreciation and amortization. In absolute amounts this was in line with previous quarters.

The total charge for the nine-months were CHF389 million and CHF129 million for the quarter. As a percentage of turnover D&A improved by about 70 basis points to 6.2% for the nine-months.

The if we move to the next line the linearization and just to remind everyone this includes two non-cash elements related to the Spanish contracts. First, there is the non-cash portion of the concession fees which was prepaid and secondly there is a straight lining of the yearly minimum guarantee increases which we have to do accordingly to IFRS.

So this linearization was 35 million for the nine-months and after mentioned in the past this line got considered seasonality and therefore we had a positive result in third quarter of about 11 million. For the fourth quarter, we will have a negative charge again of about 25 million bringing the expected charge for full-year 2017 to about 60 million.

Other operational results were 27.5 million for the nine-months. Start-up and closing cost, restructuring cost accounted for about three quarter of the overall expenses.

Financial results was 132.9 million for the nine-months, compared to last year the financial results improved by close to 20 million. And this was mainly due to the repayment of the U.S.

dollar bond that we did at the end of 2016. Financial results in the third quarter was 42.6 million and fully in-line with expectations.

Income taxes were 37 million, the tax rate was similar to previous year for the nine-months at around 30%. As we have mentioned many times, our group tax does vary quite significantly across quarters.

So for the full-year I think the indication that we gave in the past 20% to 25% still seems a very good indication. Non-controlling interest was 37.3 million for the nine-months compared to 29.7 million in the same period last year.

If we just look at the quarter, minorities were practically stable at 13.3 million versus 13.2 million in the same period last year. Net earnings for equity holders increased significantly year-on-year and reached 84.7 million.

and the same would apply to the cash earnings which adds back acquisition related amortization and which stood at 312.3 million compared to the 244.5 million last year. Then is we move to Page 22, we have as usual the cash earnings per share.

So there the seasonality is important, the third quarter is the most important period for the cash EPS generation and it was no different this year. So cash EPS in the third quarter grew by $0.60 to CHF348 and for the first nine-months cash EPS grew by 28% to CHF581.

Then if we move to the cash flow statement on Page 23, free cash flow before financing was 464.5 million for the nine-months. This amount includes however some project related non-recurring cash outs, which we already commented on in our last call.

In total the specific cash out amounts to about CHF104 million of which 29 million are reflected in CapEx and about 75 million are included as a changing working capital. All these cash outs were done in the first half of the year.

If we therefore look specifically to the third quarter free cash was 337 million and I think it’s fair to say that we have delivered a very, very strong cash generation in the quarter as well as the year-to-date. When we look at the equity free cash flow, i.e., deducting the interest on the minority payment, we actually have quite a similar picture.

Equity free cash flow for the nine-months was 270 million including the one-offs and 375 million adjusting for these ones. So again I think very strong results.

Then on Page 24, we have our cash flow KPIs and they are fully in-line with our targets, both the core net working capital and CapEx. So for the core net working capital, which includes inventory, trade receivables and trade payables, we reached 4.7% of turnover compared to our target of 5% to 6% on average.

For CapEx we were at 3.5% of turnover for the period against the target range of 3% to 3.5% for the full-year. Hence, we can confirm that we do expect to end 2017 within our target range.

Then on Page 25, we show the quarterly cash flow generation. As mentioned before, the first two quarters were impacted by one-off cash outflows as well as some seasonal shifts.

In the third quarter, we have been fully on track with our free cash flow generation. Now looking at the slide, I think it is worth mentioning that Q3 2016 was actually an outstanding quarter already in terms of cash generation.

So to match and to exceed that this year actually is quite an achievement again. If we move then to the balance sheet on Page 26, there haven’t been any significant shift.

In very general terms, on the asset side the line concession rights have decreased as we continue to amortize these assets. If you may remember these are mainly related due to acquisitions.

On the liability side, we continue de-leverage and to reduce our net debt. Then if we move to Page 27, there we have the key metrics on the financing.

Net debt evolution shows the [charges] (Ph) for the leveraging year-to-date. And as per 30th of September, we had a net debt of just below 3.5 billion.

In terms of covenants, we improved our leverage covenant [indiscernible] in the third quarter. And at the end of September we were at 3.45 times versus the maximum allowed covenant threshold of four times.

Debt by currency remained largely unchanged to previous quarters, so no change there. Then if we conclude on Page 28, as you may have read we issued a new bond earlier this month with a notion 800 million.

The duration is seven years, so 2024 and the bond has a coupon of 2.5%. We will use the proceeds to repay early our 2022 bond of EUR500 million that currently pays 4.5% coupon and that we called early in October and with the remaining amount we will reduce bank debt.

Now apart from the bond refinancing, we are also currently working to refinance our bank debt and we expect this transaction will complete during the fourth quarter of 2017. The bond and bank refinancing together will generate recurring savings of up to CHF25 million per year and starting in the third quarter and fully in the first quarter in 2018.

To the cost, there will be a one-off financial charge of about 40 million for both transactions together in the fourth quarter of 2017. Now, I think if we take one step back and look at the changes that we have done in our financing structure over the last four quarters, i.e., the bond repayment that we did in December 2016 as well as the current bond issuance and repayment and the bank refinancing that we are currently doing, we have further strengthened our balance sheet in two important aspects.

Firstly we have significantly pushed the maturity profile essentially to 22 to 24 in this area. And secondly and almost more importantly we have combined interest savings of the different transactions of around 50 million per annum and that we will have going forward from 2018 onwards.

So this is all from my side and with that, I hand back to Julian.

Thank you Andreas. Let’s move to Page 30 of the presentation.

And we commented and we disclosed that do please consider the IPO for North American subsidiary. We are in the process of preparing all the administrative steps required and the decision is not today reached yet.

The main tablet would be above our focus to complete all the requirement from a legal point of view, good market conditions and valuation are critical aspects of the decision but as I said is not decided yet. Therefore reminding a bit what are consideration of this, three aspects that are very value add.

Dufry will continue controlling the Company, the consolidation of the business is one-off for obviously main initiative, but also the implementation of all the synergies that globally we could generate and North America will be fully integrated in the structure of our business even in this case [indiscernible]. One of the rational that we were explaining at the time when we announced the IPO is the different characteristics of the travel retail market in the U.S.

There are three aspect that in my opinion are relevant. One is North America, is a food and beverage market.

60% of the business is food and beverage, 40% is retail. The main priority for [indiscernible], we continue to be a retailer.

Duty-free, duty-paid and everything the duty-paid, convenience and standalone branded stocks.

Yes, hi Julían, hi Andreas, and thanks for taking my questions. And the first one would be, please on the cash conversion and it really looks very strong.

May I ask regarding around 100 million one-off payments and that materialize in 2017, are you expecting any other pre-concession payments for 2018 or higher CapEx so can we really make a simple math, and I mean cash flow plus 100 million one-off investments in 2017 to 2018. So that [indiscernible] cash flow in 2018 be close up to 400 million?

And second question would be please on the EBITDA margin, and has the virtually [indiscernible] now annualized and can you roughly guide us for Q4 if the EBITDA margin will expand or will be down so the best guess would be helpful. And the last question again please on the EBITDA margin for 2018.

If you would exclude benefits from the - Dufry synergies the EBITDA margin would be down to some extent potentially for the nine-months 2017. What is making you confident that you can really boost your EBITDA margin in 2018 year-by-year.

I mean concession fee, the increase is much smaller than in 2017? Has your fixed cost savings ahead and so some color would be appreciated.

Thank you very much.

So I will take the first question on the cash conversion. Look I think at this stage, we haven’t had any plans for any other one-off payments.

So from that perspective my best indication for you is that 3to 3.5% CapEx and the core networking capital as we presented it and there shouldn’t be anything if I think call it out extraordinary that we have at this moment.

Regarding the EBITDA in 2017, the target is exactly the same as when we started the year is we will reach above 1 billion and as a consequence we will be around 12% to 12.1% EBITDA margin I hope. As a consequence, 2018 as I said is the year where we need to first of all transform the synergies of the both companies acquired in the past as part of the EBITDA, this is done and this is confirmed.

The second thing is the recovery of the operations that were tremendously impacted by the currency fluctuations and talking about Brazil, Russia and especially Turkey and in the first two cases is done. The Turkey case is very advance and totally recovered but is very advanced.

I don’t see there is any issue there. And the third issue is obviously delivery of the efficiencies and I differentiate efficiencies because they are depending on the business of the operating model implementation and synergies.

Depending on the acquisitions this 50 million of efficiencies will be implemented along what is 2017, but for the 30 billion P&L in 2018 and this is part of the evolution of the EBITDA margin. How will be the EBITDA margin in the next year will be?

This is the last part of the question. In my view, on top of what I said is we need to deliver the 50 million of the business operating model implementation efficiencies.

The concession fee will be the chain of the likely higher. The important thing here is leverage at the level of the growth in general expenses and personal expenses.

And for the Company, the target is to reach 13% with one more single initiative is the expansion of gross profit margin of around 50 basis points next year. My calculations are targeting the 13% base in that.

Alright, thanks very much. And really one last follow-up to Andreas.

Andreas did I understand you correctly that interest cost savings in total also looking at the bank refinancing should be around 50 million from 2018 onwards?

Yes, it depends on what you take as a basis, if you take 2016 as a basis which were before we did any of the transactions, where we should have a delta of more than 50 million to 2018, that is correct. If you look to 2017 we over here will have parts of the savings based in so their relative improvements will be 25 million at least.

Okay. Thanks very much for the clarity guys.

So thanks for answering questions. Thank you.

Hi, good afternoon. My first question is following up on that interest cost.

Did you say that the refinancing was 14 million or 40 million and how much of that writing off capitalized fees that you have already paid versus how much of cash?

Yes, so it’s 40 million as an amount and about 25 million is cash and the rest will be non-cash.

Great. And then the second question relates to the U.S.

IPO. Are you envisaging that that entity would carry a similar proportion amounts of leverage to your Group business or more or less?

And then the third one and the final one is I just wondered now whether you had further discussions with HNA now confirmed their - position and whether you further commercial initiatives available with them that go beyond the scope of what you have talked about as your plans to 2018? Thank you.

So if I just can take the question on the U.S. business and the leverage there.

So look we currently have somewhat lower leverage in the U.S. Group that we have at the overall Group level.

So I think the leverage we will be looking to give or take is somewhere between two to three times range in the U.S. so this will be something that we will need to calibrate.

I think the other question or topic that we will address there is, currently we would plan that the financing of the U.S. asset will remain integrating with Dufry.

So we wouldn’t look for separate financing there, but we will keep it as part of the Dufry financing.

From my side, I can confirm that we are progressing with HNA in almost 10 initiatives for identifying synergies within obviously the recent activities we operate and the recent activities they operate. From the retail point of view to the management of databases of the different passengers and travelers they managing the different operations.

I think we are quite advanced, but nothing specific yet in order to say synergies to identified synergy. But there are 10 projects where we are progressing so far.

Great, thank you.

Hello. Two questions, good afternoon.

Firstly, I think you said that there is an acceleration in organic growth in the first three weeks of October versus the nine month level, is that right?

Yes acceleration because the Company volume is tougher, yes, about 7.6% during the third quarter.

Right. Simply because of the [indiscernible].

Yes. I think so.

And what do you think is an achievable organic growth in sort of when you look at current momentum going into 2018?

Let’s start with 2017, in 2017 and also obviously because we have confirmed already what have been in the high season I would say that yearly basis we could say around 7% instead the 5% to 6% as I mentioned during the last call. Obviously the last call was before the high season.

Now I think we will reach in 2017 around 7%. For next year, I always maintained the same thing.

On top of the average number of passengers that are going through an airport and taking into consideration the countries, we should think about 5% to 6% organic growth for 2018.

Excellent, okay. Thank you very much.

And then just slipping as we talked about Asia and then it took your under exposure at the moment. Are there any particular markets that you might be interested in and it’s as and when finances or assets become available?

It’s very broad, obviously the market but there are three aspects of this strategy initiative that is very important for us. Number one, we identified flagship operations, like we have done in other regions in order to create a critical mass, because we are operating today in 15 countries these are countries are not really sizeable in terms of the importance.

We are in second and third tier airports especially in airport retail and we have identified targets in several countries. So obviously I cannot comment on the country, because it’s a very confidential information.

One is airport retail. The second one is to develop alternative channels that will facilitate expansion in the region.

One of them is cruise lines, for example we have opened the first operation in our cruise line, the name is Joy and its one of the more successful operation we ever had. It has tremendous opportunity for us and we will continue through this type of business.

We have also the intension within this second pillar of alternative channels to develop downtown shops, but not in downtown its standalone shops. We are talking about destination shops for the sample we have to date two operations in Macau in casinos and we have just announced another one in Malaysia that was discussed a couple of weeks ago.

And the third channel that we believe that could be an alternative in Asia is [indiscernible]. Then what is going to happen with the digitalization and the expansion of the digital strategy in Asia and we believe that there are many alternative for travel retail and especially for Dufry.

In order to engage with the customer, before they even [indiscernible] and this is part of the strategy that we are let’s say developing with some companies in [indiscernible] internally we believe that digitalization will drive a significant value in travel retail in Asia. I kind of to be more specific again because this is a public conference and what we are planning is specific, but let’s say airport retail number one, alternative channels number two and digitalization number three.

Just one final sort of top-up then, do you feel that the market in Asia is more warrant to consolidation than it was perhaps two or three years ago.

The market is Asia is still very fragmented, as you know there are important companies, but located in one single place and there are many other operating locations where the consolidation is possible.

Okay. Thank you very much.

Welcome, thank you.

Hi thank you for taking the questions, I had a couple please. The first is just to understand on this concession fee aspect.

You have talked about the new impact of reorganized concessions like Melbourne and so on, which is sort of hard to get a full handle on how significant this will be going forward especially as your engaging and refurbishing sites for the new model? And then within that, you have also in the past explained how you have renegotiated many of the concessions where few expiring going forward and that the growth of the emerging market concessions Turkey and Greece come in areas with lower than average concession rate.

I was wondering if you could help us understand going forward the different components of the concession rate dynamic please.

Yes thank you for the question. I think it’s earlier on question.

What happened this year compared to last year, 27.8% this year, 27.2% last year and there are two different groups this year. One is the increase of the minimum guarantee in Spain that it’s something has been published not at the time that we acquired the Company, has been published the momentum in this contract whatsoever earlier at that time and there is a 9% increase per year of concession fee.

And this impacted obviously because the increasing concession fee in Spain is a very significant group of operations was higher than the growth. In Spain we have been growing but we have been growing lower than the increase of concession fees due to two reasons.

Number one is because the traffic has been driven by local carriers and the second one is because most of the passengers 75% of the total tourism in Spain are British. And the devaluation of the pound 15% last year and 8% in the last year is impacting the projection.

But obviously these passengers are buying more in the UK. Number one is Spain.

Number two is operation that were extended last year, many operations extended last year that have two different approaches. One is conditions that were [indiscernible] or even lower than in the contract.

And those conditions were there and I can confirm that and I don’t want to mention specific locations because obviously they are confidential issues here that I cannot breach. But there are other concessions where we agreed to increase for example the minimum guarantee per passenger.

Today nine-months these have been important concessions that were and the renovation since the beginning of the year and this renovation was impacting the top-line growth and as a consequence we were paying the rent since January 1st and during the first nine-months we have been impacting the percentage on total turnover, because the mark in these locations were higher than the reality we were expecting. What is the issues today is, most of these locations are already sold, in the sense that they are already finalized with the renovation of the shops and this will facilitate in the future and the product is for the future, we will facilitate the percentage on sales will be better.

And the second part of this formula of the concession fees is what is going to happen with the new concession. In my view, what we are going to try obviously is to maintain the level of concession fee like it is today.

Condition to that is the type of business we will expand. If you tell me that tomorrow we are going to start, I don’t know, let’s say sales from all cruise line, sales from cruise lines has concession fee higher I mean [indiscernible] that probably will be slightly higher.

But my recommendation in your model use the same than we have today. Because what we are going to improve due to the efficiency of the operations that started within year end in 2017 probably will be mitigated by new operations with higher rent but with higher return, because these operations from all cruise liner have higher returns the investments for an active sale.

The idea is 27%, 28% is a good range for 2018.

Okay, thank you. And with the refurbishment program you are going to engage and will that provide any upward pressure and are there any other sort of downward pressures within the mix sales towards the emerging markets or areas of lower concession fees that kind of offset that.

Yes this is an issue because every time that we have started renovation depending on the Company. For example, we are renovating Sharjah today in the Emirates and there is not an impact at all in the sales.

We are renovating now Zurich, full renovation and we have had an impact in the sales, not negative sale. But the growth that we had was mitigated or impacted by the renovation.

Depending on one thing, in my view in emerging markets I think the sales will continue even with the renovation. This is something that has been starting to calculate that.

In my two markets, we had impacted due to the renovation, but what I have seen so far is not negative performance. For this reason, I am not going to give you idea - because we have a lot of renovation and we are going to renovate the shops and will continue with the same trend and you should expect positive performance even with the renovation.

Every time that we renovated our shop, the passenger is increasing between 15 and 25% depending on the location. I have two examples that I alluded a bit.

One is [indiscernible] that was terminated renovation beginning of March this year and since the spend per passenger increased by 22%. Melbourne we renovated the shop and we have increased the spend per passenger by 15% since September.

Those are the type of things. We cannot stop the renovation of the shops and the renovation of the shops are not excuses for performing worse in [indiscernible].

Okay, thank you. And then the other question I had was related to the IPO.

Since you announced the potential IPO, you have also seen a partner potential partner in the food arena [indiscernible] announced a segmentation of its Company into three entities including U.S. airport - motorway and airports food and beverage.

You obviously know that group very well, does this have any consideration as a potential partner or does other partnerships talks have also considerations as to whether you carry forward with the IPO?

No I don’t think so, I think the IPO what happens is we will be an IPO only with intention to do what I explained and the business will be controlled and on any regard operated by us. The competition in the U.S.

will be tough because obviously [indiscernible] is a great operator and they have a significant participation in the market. [indiscernible] than we have in retail.

And in my view, we don’t need any partners in the U.S.

That’s great. Thank you for the answers.

Thank you.

Hi good afternoon everyone. And three quick questions from me please, the first one is on this new organic growth guidance of 7% for the full-year.

It seems to imply only about 4% in Q4. Is there any particular reason why you would expect November and December to be weaker.

I think you said so far in October in a lot of regions it’s actually accelerated. And my second question is on net new business which was plus 1.2% in Q3 which is the strongest level in the past couple of years since the middle of 2015 I think.

So is there anything in particular to flag here, have you benefited from any delays or exceptional business? We have heard from other players for example in Chicago Midway some of the closures have been delayed.

So is this a bit of a blip or is this a true underlying acceleration in new business?

Thank you. Regarding the organic growth and guidance, I don’t like the old guidance because what I try is to really inform what our plans have in our guidance.

I said this because I mentioned during the last call, we were expecting 5%, 6% as to how the other sales organic growth and now the high season is already over, I think the possibility to reach 7% is better realistic. What happened during the last quarter of 2016 is that the Company already performed 6% increase and we are talking about the differing comparable.

And in my view if we reach a significant level of organic growth during the last months we will reach the 7%. What happened during the first three weeks of October 2017 what I said is very positive, its higher than the nine-months, but I don’t want to change that because then the comparable is significant.

It is 6% last year, 7% for the year is what I think is reality target. What is the second part of your question?

Second part was the net new business contributions?

No, it’s not because of the delays. It’s very straight.

It’s because we comment on the newest square meters that we have added since the beginning of the year is 20,000 square meters they are starting to produce now the result. The last information I saw in terms of this is around - you mentioned one, but my information is that there is gross contribution from new business is 3.1%, but in any case we will be this year around 3% I hope gross contribution.

Thank you. And I had just a last one on Spain.

With the increase in minimum guarantee that you have talked about are you still above max for lot to which includes Barcelona or has that increased taking you below mark gain and with that in mind how has the Barcelona trends been since October?

Okay. Regarding Spain, we have not achieved to be out of mark in lot number one, Madrid another Airport and lot number two Barcelona Airport so far.

See we are subject to mark. Regarding the situation in our operations in the Spain, growing as before.

Regarding Catalonia specifically, there are three airports in Catalonia, two [indiscernible] destinations, one is Reus the other one is Girona. In both cases we only have same speed over the year.

And third one is Barcelona that probably could be the most athletic in the future. So far the business is flat compared with previous year and nine-months was flat 4%, lower at the same we are far away from what we were doing before or this event.

Okay. Thank you very much.

Yes, good afternoon guys and congratulations on a very strong set of organic sales numbers and gross margin gains, looks impressive. But of course just digging back into the margin expansion, Julían you are saying 12%, 12.1% for this year.

Obviously now we are trying to build out what will happen next year. First of all, just on the 50 basis points new savings for synergies plan, just wondering about how much of that will come in 2018.

That was the first question. The second one, just going back to what my colleague said about the impacts of renovation, how that dampens the margin initially maybe because you have new space and you have to expand it once, but you have new concession phase which are higher.

Just wondering how much of that could actually unwind in 2018? Are we again looking at maybe a 10 to 20 basis points set, I wonder what your thoughts are on that?

That’s my first round of questions. Thank you.

Okay, thank you. Regarding EBITDA, I think I was specifically explaining how we build the target for 2018.

The 50 basis points of the efficiencies, the 50 million as a consequence 50 basis points of EBITDA margin added due to the efficiencies of the latest operating model will be fully impacting the P&L in 2018. On top of that, that we have in this case certain levels in general expenses and personal expenses.

The second part of the positive aspects is the increasing gross profit margin, I think 60 basis points for next year is a realistic target for us. On the other side, what we have is what is the evolution of the expenses specially concession fees.

Concession fees so far is 27.8%, by year-end, we will be similar or maybe is slightly lower. But next year I think we cannot display the significant increase in concession fee.

We will be between 27.8% to 28% and this is depending on two aspects. One is the new concession in different channels that I mentioned that probably we will announce.

And the other one is the reality of the business that we will expand, we will negotiate. Those are the two parts of the balance for reaching the 28%.

But I think 28% is a realistic target in 2018.

So then if I add all of this together then you are saying that basically the EBITDA margin could be close to 13% next year or is that too optimistic?

Yes this is our target, yes 13%.

For 2018?

2018 yes. As I said, [indiscernible] because even I know I repeated myself sorry for that.

Well under the initial figure, I think we have the intention and the focus to do it and we will try.

And then just a bit of an add-on to that. Basically just wondering on the commitment to pay a the dividend is this still the plan to pay a dividend on 2017 results or is this still a big contingent on whether that U.S.

IPO goes at?

I think still the dividend payment or obviously the composition our stakeholders is an important issue in the Company. The Board of Directors is going to consider this payment of dividend independently over the IPO and obviously depending on the IPO which will be different, but independently of IPO I would say yes.

Okay, and then just on the HNA I’m wondering [indiscernible] on the Board, in the next [indiscernible] or haven’t you actually have those talks yet?

Well what we hear and this is the only thing I can say, I don’t know what will happen next year at the time of the [indiscernible] is that they are not requiring any type of government in Dufry.

And can I ask the same question about [indiscernible] that they asked for a seat on the Board too?

No exactly the same answer. So far, there is not communication by them in any regard, regarding government or a specific participation in the Board.

Okay. Thanks very much.

Thank you for the questions.

One follow-up from me. In terms of the mass growth in 2018 in Spain I think it’s 6% is that right?

Yes it is correct.

And your assumption of concession fee sales flat 28% or something like that. What sort of sales growth does that assume or what sales growth assumption have you taken on board for Spain in order for there to be no major de-leverage risk?

Okay. Sorry I think we don’t disclose all the details here at country level or specific level.

But our calculation for next year is that we need to drive a concession fee around 20% including the increase of the concession fee in Spain.

So yes just to come back on - you mentioned that you are comfortable with one billion plus EBITDA for this year. Just looking at consensus at the moment for 1.1 billion or a little bit over for 2018.

Obviously some of the guidance you are giving today would indicate that figure should be higher but I would just ask are you comfortable or not with that 2018 consensus at the moment around 1.1 billion or are you telling us actually with your plans you would like that to get a little bit higher? Thank you.

Jon allow me to wait a bit because it’s still 2017 and its ongoing. I need to understand how 2017 will finish.

What I tried to communicate is what are the targets for next year. To provide a specific information and regarding EBITDA in terms of amount or in terms of anything else I prefer to keep it until we know exactly how 2017 is going to finish.

Okay. Thanks again.

Thank you.

Okay. Thank you very much to all the participants in the call.

And as always, we are willing and open to receive all the questions through our Investor Relations Department or directly. Thank you very much.

Thank you.