Autogrill splits restaurants and tax-free

Opportunities in growth countries

Autogrill is active in 39 countries: the bulk of activities is providing restaurants at airports, stations and along
highways: that branch is twice as big as the division that handles tax free
sales at airports – their value is estimated at 4 and 2 billion euro respectively.

CEO Gianmario Tondato da Ruos believes both
branches have growth opportunities in the development of travel infrastructure
in China, India, Turkey, Latin America and Vietnam. “They are opening up
opportunities that did not exist ten years ago”, he said in an interview with the
Financial Times, but mainly if each branch goes its own way.

Declining margins in roadside restaurants

It is expected that the restaurant branch will
get a downsizing after the split, to get margins back up to par. This is
necessary because the activities of roadside restaurants in Italy and the rest
of Europe are slowing down. For the tax free branch things are different: excluding rents, margins of that department are some of the
highest in the sector.

It is still unsure if both branches will
continue to work autonomously: a merger with a sector rival is not out of the
question for the tax free department. It is also possible that the shares of both
companies will be offered at separate exchanges: the restaurant branch would
remain in Milan, but the tax free department could move somewhere else.

At the moment Autogrill is controlled by the
Italian family Benetton. The board of directors has approved the project that
was already announced in February. The operation itself is planned for
September.