| Valuation method | Value, CHF | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | n/a | |
| Graham Formula | 10.62 | -65 |
Avolta AG (formerly Dufry AG) is a global leader in travel retail, operating under well-known brands such as Dufry, World Duty Free, Hudson, and Nuance. Headquartered in Basel, Switzerland, the company manages a vast network of approximately 2,300 duty-free and duty-paid shops across airports, cruise liners, seaports, railway stations, and downtown tourist areas worldwide. Avolta offers a diverse product portfolio, including perfumes, cosmetics, food and confectionery, wines and spirits, fashion, electronics, and travel accessories. With a history dating back to 1865, Avolta has established itself as a key player in the specialty retail sector, catering to the needs of international travelers. The company's strategic locations in high-traffic travel hubs position it to capitalize on the recovery of global travel post-pandemic. Avolta's strong brand recognition, extensive retail footprint, and diversified product offerings make it a dominant force in the travel retail industry.
Avolta AG presents a compelling investment opportunity due to its strong market position in the global travel retail sector and its recovery potential as international travel rebounds. The company's diversified revenue streams across multiple product categories and geographies mitigate risks associated with regional downturns. However, investors should be cautious of the company's high leverage (total debt of CHF 11.9 billion) and sensitivity to macroeconomic factors, as evidenced by its beta of 1.74. The positive operating cash flow (CHF 2.6 billion) and a dividend yield of approximately 3.91 CHF per share add to its attractiveness. Long-term growth prospects are tied to the recovery of global travel, making Avolta a cyclical play on the consumer discretionary sector.
Avolta AG holds a competitive advantage through its extensive global footprint, strong brand portfolio, and strategic locations in high-traffic travel hubs. The company's scale allows it to negotiate favorable terms with suppliers and landlords, enhancing profitability. Its diversified product mix, spanning luxury goods, essentials, and impulse purchases, ensures resilience against shifting consumer preferences. However, Avolta faces intense competition from regional and global players, particularly in key markets like Asia and Europe. The company's high debt load could constrain financial flexibility compared to less leveraged peers. Additionally, the rise of e-commerce in duty-free shopping poses a long-term threat, though Avolta's physical presence in transit locations provides a unique advantage. The merger with Autogrill (completed in 2023) further strengthens its position by integrating food and beverage retail into its portfolio, creating cross-selling opportunities. Avolta's ability to adapt to post-pandemic travel trends and capitalize on recovering passenger traffic will be critical in maintaining its leadership position.