New contract wins and a strong performance from its exisiting businesses ensured that 2017 was an "exciting, healthy and robust" year for duty free operator, Gebr Heinemann, which saw its group turnover rise 6.6% to €4.1 billion.
The Hamburg-based global enterprise was able to build on its strong position in the European travel retail sector, particularly in Eastern European countries such as Russia, Ukraine, Georgia and Romania.
In the Asian travel retail market, the company continued to expand its business in Malaysia.
Gebr. Heinemann was successful on tender bids around the world throughout the year, and now has a presence at Hong Kong International Airport and in partnership with James Richardson at Ben Gurion Airport in Tel Aviv for the first time.
In Australia, the company won a new location at Gold Coast Airport.
The Heinemann Americas and Heinemann Asia Pacific subsidiaries were also successful in their joint bid to supply and operate the shops on four Carnival Cruise Line ships.
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Co-owner, Claus Heinemann, said that in a competitive environment in which business in the core markets is being more heavily influenced by global political developments than ever before, he believes that his comopany had performed very well overall and acted flexibly to take advantage of the market conditions.
"Despite the challenges, I think 2017 was a respectable year for us with healthy and robust developments, so we were generally satisfied with the results," he noted.
And he is predicting double-digit sales growth for the 2018 financial year.
"We want to achieve even stronger growth in Asia and America this year, and haven't forgotten Europe, but believe that the growth potential in these regions is even greater," admiited Claus Heinemann.
Following considerable investment in innovative processes and IT structures, the Hamburg-based enterprise will also continue to invest in the travel retail market, spending around €100 million this year most notably in Turkey on ongoing project at Istanbul New Airport and digital development in connected travel retail.
Europe currently accounts for 80% of the company's business, and in addition to Russia and Eastern Europe, Gebr Heinemann continues to do well in Scandinavia.
Indeed, in Scandinavia, Heinemann was able to agree an early extension to its contract at Copenhagen Airportto 2023, while sales growth in Norway soared by 6.5%.
The refit and expansion of the shops operated under the Travel Retail Norway joint venture at Oslo, Bergen, Kristiansand, Stavanger and Trondheim airports is now complete. A new generation of duty free shops now awaits passengers across a total of 16,740 square metres of retail space.
In Istanbul Atatürk, Gebr Heinemann’s most successful location in terms of retail sales, there was a 1% increase over the previous year despite political and economic unrest.
The JR-Heinemann Duty Free Limited Partnership, the newly-founded joint venture between James Richardson and Gebr. Heinemann, won the tender for a ten-year contract at Ben Gurion Airport in Tel Avivin August 2017, and has been operating six shops with a total retail space of 4,000 square metres there since January 2018.
With annual sales predicted at USD 400 million for 2018, Tel Aviv is now Gebr. Heinemann’s third strongest retail location after Istanbul and Oslo.
Heinemann’s joint venture with Fraport, FRA, recorded a successful first year at Frankfurt Airport in 2017.
Elsewhere, Heinemann Asia Pacific won a tender for eight confectionery shops at Hong Kong International Airport, all of which will have opened in the first half of 2018.
And In Sydney, Gebr. Heinemann’s marketplace concept saw growth of around 10% in its first full year.
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The company will soon be adding a second location in Australia having won the tender for two shops atGold Coast Airport. Gebr. Heinemann is also continuing to expand its business in Malaysia. The Heinemann Asia Pacific subsidiary has raised its stake in its joint venture with DFZ.
The strongest growth rates were recorded in the Eastern Europe & Central Asia (formerly Russia/CIS) and Benelux & Africaregions.
Growth inEastern Europe & Central Asiais largely the result of the company’s joint venture activities at Moscow’s Sheremetyevo and Domodedovo airports.
Russian passenger numbers are continuing to bounce back, which has contributed to double-digit sales growth above the average growth rate for passenger numbers.
The Travel Retail Domodedovo joint venture won a tender to become the exclusive Duty Free operator in the new terminal at Moscow’s second-largest airport, Domodedovo, and will therefore soon be responsible for the airport’s entire Duty Free business.
At Moscow Sheremetyevo, the company will be doubling its total retail space operated by IDF (Imperial Duty Free) this year and next, and is gradually converting all of the shops to walk-through concepts.
Finally, the Gebr Heinemann subsidiary Travel Retail Vilnius was able to secure a six-year extension to its contract at Vilnius International Airport.