Gebr Heinemann back to profitability in 2021
Max Heinemann, CEO, Gebr Heinemann
Celebrating “solid” annual results, German travel retailer Gebr Heinemann returned to profitability in 2021 (excluding foreign exchange effects) and has set an ambitious target of achieving 75% of its pre-pandemic 2019 turnover for this year.
In its annual press conference today (Thursday) to launch the family-owned operator’s Annual Business & Corporate Responsibility Report 2021, the management team gave an upbeat and positive view of last year’s financial performance, despite a tough year due to the emergence of the Omicron coronavirus variant. They also provided a relatively bullish outlook despite the Ukraine war and economic uncertainties.
CEO Max Heinemann began the press conference with a statement about the war between Ukraine and Russia – two countries where the company has operated for many years.
He said that after the war was declared on 24 February 2022, the company had suspended business in Ukraine for an “unforeseeable period” and had also suspended delivery of products to Russia, which would affect its distribution customers.
Heinemann – the fifth generation of the family to run the business – expressed deep concern over the humanitarian tragedy taking place in Ukraine and was “sad and worried about the war close to home”, and particularly its effect on company employees.
Turning to the 2021 financial results, Chief Operating Officer Raoul Spanger gave a bullish picture of the business, noting that several locations had been “overperforming” sales-wise, notably at Istanbul Airport and Sydney Airport. He put this down to so-called “revenge spending” after the pandemic as travelers found freedom after lockdown.
He said this revenge spending effect had been taken into account in coming up with the company’s 2022 target of reaching 75% of pre-pandemic 2019 turnover.
In setting the ambitious target, he acknowledged that both Chinese and Russian customers would not be traveling in their pre-pandemic numbers and estimated that only around 10% of the operator’s European turnover was generated by Russians.
The issue of sustainability took center stage in the press conference as the company set out its new mission statement: “The Heinemann Family. We turn travel time into valuable time as the most human-centric company in global Travel Retail.”
Key financial figures for 2021
A “major success” for Gebr Heinemann in 2021 was to return to profitability (excluding foreign exchange effects). The Gebr Heinemann Group closed the 2021 financial year with a controlled group turnover of €2.1 billion (US$2.21 billion). This represents 44% of the turnover achieved in 2019 (€4.8 billion) and an increase of 31% on 2020 sales of €1.6 billion.
The result was supported by one-time effects and is due to three reasons: cost management, further savings achieved through negotiations with business partners, and government Covid-19 support measures in several countries. For 2022, Gebr Heinemann expects to achieve 75% of the turnover of 2019.
Turnover in the retail segment was 76% of total turnover (2020: 75%). Turnover in the distribution segment was 20% of total turnover (2020: 22%).
With a 73% share of sales, business at airports was the largest sales channel (2020: 63%). This was followed by the border shop business with 13% of total sales (2020: 21%).
Europe remained the region with the largest share of sales at 84% (2020: 80%), followed by the Middle East at 8% (2020: 5%), Asia Pacific at 4% (2020: 10%), Africa at 3% (2020: 4%) and the Americas at 1% (2020: 1%).
“Although we continued to miss Asian travelers in Europe in 2021, their absence did not have as big an impact on spend per passenger as we had expected,” said Spanger. “Travel retail is on a healthy footing. Fewer people are traveling, but the propensity to buy continues unabated and many travelers are even spending significantly more money than before the crisis. Overall, 2021 has once again confirmed to us that it is important and right to be active in different channels of the travel trade and to stand on two strategic pillars with our own retail and distribution business. In this way, we remain stable and independent of individual markets.”
In 2021, Istanbul Airport remained an important hub during the pandemic and at Tel Aviv Ben Gurion Airport, Gebr Heinemann and its partner, James Richardson Group, benefited from the continuing shopping enthusiasm of Israelis.
In addition, Gebr Heinemann was able to renew important concessions and also to generate new business. In the coveted tender of Norwegian airport operator Avinor, Gebr Heinemann's joint venture Travel Retail Norway (TRN) continued to secure retail operations at Oslo, Bergen, Trondheim and Stavanger airports.
Gebr Heinemann also opened a total of 19 new shops in 14 countries in 2021 – at airports, border crossings, on cruise ships and ferries as well as in Macau.
Broken down by category, the liquor, tobacco and confectionery range accounts for 52% of sales (2020: 55%), followed by perfume and cosmetics with 33% (2020: 33%) and fashion, accessories, watches and jewelry with 10% of sales (2020: 9%).
“We want to be close to the traveler – with offers and experiences that are dynamic, unique and unforgettable. Our ranges should be a source of inspiration and innovation,” said Dr Dirk Schneider, Chief Commercial Officer. “To transform travel time into valuable time in line with our vision, we work with our suppliers and the world’s leading brands. And with many of them, we see the opportunity to grow very strongly in the future.”
Schneider noted the good performance of niche fragrances such as Penhaligon’s. He also said the company would be carrying more “rare, trendy, exclusive” products in the future.
New mission statement
In 2021, Gebr Heinemann gave itself a new, human-centric mission statement with a clear vision for the future: “The Heinemann Family. We turn travel time into valuable time as the most human-centric company in global Travel Retail.”
The focus is people – employees, suppliers, business partners and customers, political stakeholders and travelers in particular.
This vision “forms the umbrella for all projects and activities as well as for the thinking and fundamental attitude of Gebr Heinemann”, according to the firm.
Gebr Heinemann’s "future friendly" seal identifies products with sustainable packaging and materials in the shop
“With the mission statement, we manifest our corporate culture: the ultimate focus on humans. This is what makes and distinguishes us in global travel retail and what can be decisive for potential new partners,” said Max Heinemann. “We are a family business – more human, more passionate, more reliable, more accessible and faster than others. Our business partners and travelers will feel this typical Heinemann personality, worldwide and physically as well as digitally. In this way, we can offer travelers around the globe even more entertaining, inspiring and sustainable shopping experiences. Or in the words of our vision: transform travel time into valuable time.”
A key element of the mission statement is the sustainable impact, which has been anchored there as a promise to travelers. Gebr Heinemann pursues a sustainable corporate strategy and has formulated its own Sustainable Development Goals for the ecological and social fields of action resulting from its global activities, which it aims to achieve by 2030.
One example is the sustainable category concept for responsible shopping, which Gebr Heinemann was the first travel retailer worldwide to develop. As a first step, the "future friendly" seal identifies products with sustainable packaging and materials in the shop. This year, the company will add further sustainability features. Gebr Heinemann sees itself as playing a pioneering role in the industry.
CFO change
In other news, Gebr Heinemann announced that as of 1 July 2022, Stephan Ernst will hand over the position of Chief Financial Officer (CFO) on the Executive Board to Dr Kai Deneke.
Deneke is currently Director Controlling at Gebr Heinemann. The CFO is responsible for finance, IT, procurement and facility management.
“We sincerely thank Stephan for advancing our company with his constructive manner and look forward to continuing our relationship in a spirit of friendship outside of daily business with him,” said Max Heinemann.
.jpg?&resize.width=322&resize.height=483)
