European Tax Free Consumption. Milan, 20 October 2016

Transcription

1 European Tax Free Consumption Milan, 20 October 2016

2 Tax Free Shopping European and APAC Markets Country trends and weights

3 YTD SEP 16 - EUROPE and APAC Tax Free Spending performance After stellar growth supported by strong macro drivers in 2015, relative performance is negative due to a perfect storm across all main drivers (i.e. Biometric visas, China slowdown, terror attacks, FX) Countries France Italy Jan-Sep 16 SIS dev vs PY -21% -11% Sep 16 SIS dev vs PY -23% -8% UK delivering solid 2 digits growth supported by good mix of macro drivers (FX), long term activities which are supporting Globe shoppers travel journey (i.e. Extend Chinese Visa Validity) APAC (including Japan, Korea and Singapore) is performing +4% in terms of Tax Free Spending Year-to-Date. The growth is supported by a strong increase in number of travelers across all destinations, yet arriving with lower amount of cash to spend UK (GBP) Germany Source: Global Blue Data 9% -21% 32% -21% Europe -12% -8% 3

4 L12M ENDING SEPTEMBER EUROPE Source: Global Blue Market Estimation 4

5 Tax Free Shopping Nationalities Top nationalities weight and performance

6 YTD SEP 16 - WORLDWIDE Nationalities Overview Europe APAC Nationalities % on Tot Dev vs PY Nationalities % on Tot Dev vs PY Chinese represent the first nationality both in Europe (28% of total) and in APAC (55% of total). Their trend in Europe has been strongly affected by all negative elements previously mentioned Russians keep on declining for the third year in a row and they are now the 4 th nationality with 8% of total market Total China Middle East Russian Fed USA Hong Kong 100% -12% 28% -22% 12% 0% 8% -19% 6% -2% 3% -11% Total China Indonesia Taiwan Hong Kong Japan 100% 4% 55% 6% 9% -1% 4% -10% 3% -25% 3% 44% Tax Free Spend of the Middle Eastern is flat in Europe thanks to GBP favorable exchange rate They are representing nationality n.1 in UK market Thailand Switzerland Korea 3% -14% 3% -12% 3% -3% Korea Malaysia Thailand 3% 6% 2% -4% 2% -6% Taiwan 2% -17% Viet Nam 2% 22% Japan 2% 8% Philippines 2% 6% Others 30% -6% Source: Global Blue Data (Jan Sep 16) Middle East: Kuwait, Qatar, Saudi Arabia, UAE Others 15% 7% 6 APAC: Japan,Korea, Singapore.

7 Key drivers of European Performances

8 SEP 16 - EUROPE Top Line Perfomance Source: Global Blue Data 8

9 YTD SEP 16 - EUROPE Highlights Sales in Store progression No. of Tax Free Forms Av. spend per transaction Europe -12% - 8% - 5% France - 21% - 20% - 1 % Europe North 0% - 5% + 6% Europe South - 10% - 5% - 5% Europe Central - 19% - 12% - 8% % difference in SiS (Euro) vs YA European performances has been quite negative this year due to a combination of many effects: Strong base of 2015 (due to favourable exchange rates last year) Softening of exchange rates Biometric Visas Safety concerns (terror attack, security issue in France) The elements above led to a decrease in both volumes (n. of transactions) and in capacity of spending (avg spend). 9 Unless mentioned differently the data refers to Like for Like geographical comparison (Excluding countries with less than 24 months Ireland)

10 QUARTERLY INDEX - EUROPE Historical development by quarter of Tax Free Spending Source: Global Blue Data 10

11 FX TRENDS CNY / Euro: -6% CNY / Euro: +23% USD / Euro: -1 % USD / Euro: +23% Source: Global Blue Data Euro appreciation against key globe shoppers currencies (especially CNY and USD) drove decrease in n. of transactions and average spend. 11

12 YTD SEP 16 - FOCUS ON CHINESE Chinese globe shoppers as key driver Over the last four years, Chinese Tax Free Spending grew consistently supported by positive macro-economic drivers including GDP, new air connections and positive FX influences. +57% CAGR on Chinese Sales In Store over the last four years (ending in 2015). Including 2016, CAGR is back to norm +27% Chinese Global shoppers Sales In Stores (Euro) 300% 250% 200% 150% 100% 50% 0% 100% 172% Chinese Sales in Store (Eur) (% progression vs YA) 206% 214% 261% 249% Source: Global Blue Data 12

13 YTD SEP 16 - FOCUS ON CHINESE Slow down of Chinese demand Soft vs Biometric visa Shanghai stock market Terror attacks Checks at custom Slow down in local economy and drop in consumer confidence Government willingness to strengthen local consumption (positive incentive, checks at customs arrivals) Biometric visa and terror attacks as travel restrainer to Europe Source: Global Blue Data 13

14 YTD SEP 16 CHINESE GLOBE SHOPPER New globe shopper profiles and expectations Official perspective of expected passengers: million outbound passengers million outbound passengers Tour Group traveller 60% Frequent Individual Traveller (FIT) 40% More and more Chinese globe shoppers feel comfortable travelling by themselves in Europe, experiencing history and entertainment. They are balancing spend preferences between luxury goods and entertainment Tour groups are growing sales bookings based on a large amount of low cost tours focused on travellers originating in tier II & III cities Value traveller (tier II & III) Experiential Millennials HNWI (High Net Worth Individuals) Millennials are becoming more savvy and are looking for brands which they can relate to from an attitude and mindset perspective Source: China National Tourism Administration (CNTA) 14

15 YTD SEPTEMBER EUROPE Categories performance All categories are suffering due to a decrease of the average spending Last year, Currency volatility and lag in pricing adjustment created a positive trend supporting category growth especially categories with high value transactions Watches & Jewelry, on top of the above, is suffering to its exposure to Chinese consumers who remain concern by checks at arrivals 15

16 Focus on Countries

17 YTD SEP 16 - ITALY Italian Market Deep Dive YTD Tax Free Spending in Italy is decreasing 11% vs last year Italy - 11% Sales in Store Nationalities % on Tot Dev vs PY After difficult 4 to 6 months Italy performance is back to single digit decline Chinese, still representing the first nationality, are decreasing more than rest of the market Outlet segment for the first time in its history presents a negative trend (-6% vs last year) but consolidates his Total China Russian Fed USA Middle East Korea Others 100% -11% 28% -23% 12% -11% 9% -1% 6% 1% 6% 1% 39% -5% weight in the market (16% of total) Source: Global Blue Data (Jan Sep 16) Middle East: Kuwait, Qatar, Saudi Arabia, UAE 17

18 YTD SEP 16 - FRANCE, GERMANY and UK Top 5 Globe shopper Nationality comparison France - 21% Sales in Store Germany - 21% Sales in Store UK +9% Sales in Store Nationalities % on Tot Dev vs PY Nationalities % on Tot Dev vs PY Nationalities % on Tot Dev vs PY Total 100% -21% Total 100% -21% Total 100% 9% China 23% -37% China 38% -30% Middle East 30% 16% USA 10% -13% Middle East 12% -7% China 24% 9% Middle East 7% -17% Russian Fed 9% -28% USA 5% 28% Russian Fed 6% -24% Switzerland 7% -9% Hong Kong 4% 14% Hong Kong 5% -9% Taiwan 3% -20% Thailand 3% 10% Others 49% -14% Others 31% -10% Others 34% 1% Chinese still the first nationality despite they are suffering in France and Germany Chinese average spending is decreasing in most of the European Countries Source: Global Blue Data (Jan Sep 16) Middle East: Kuwait, Qatar, Saudi Arabia, UAE 18

19 Bain & Company Global Blue Analysis

20 Focus Source: Global Blue data *Note: 2016 is October 2015-September 2016, 2015 is October 2014-September 2015, 2014 is October 2013-September 2014, 2013 is October 2012-September 2013, 2012 is October 2011-September

21 Business Outlook

22 NEXT 12 MONTHS OUTLOOK Tax Free outlook Europe APAC Transaction drivers Air arrivals and capacity Consumer confidence Slight Increase Flat Increase Flat Legal limitations Flat Flat Average spend drivers FX Traveller mix GDP Slight Decrease Slight Decrease Flat Slight Decrease Slight Decrease Flat SiS Consensus +2% / +4% +1% / +3%

23 Thank you