European Tax Free Consumption The analysis of the Tax Free Consump5on within Europe
Milan October 2014 Pier Francesco Nervini -‐ VP Interna5onal Key Accounts Global Blue Group
Tax Free Shopping European Markets Trends and weights of countries
Tax Free Shopping – European Markets
European Countries trends
• For the first 5me in the last 6 years, Europe is flat.
• The Growth ra5o is below expecta5on, mainly due to a fall in Russian visitors.
Countries Sales in Store % vs PY
France 3% Italy 0% United Kingdom -‐3% Germany -‐1% Others WW 11% Europe 0% (Jan-‐Sep 14)
• Top four countries in Europe account for 72% of the overall European Tax Free shopping business.
• The Market value of eligible Tax-‐Free travellers spending remains constant at 40 Billions Euros – same level as 2013.
Weight of main countries within Europe
23%
18%
16%
15%
28%
France
United Kingdom
Italy
Germany
Others EU
Tax Free Shopping -‐ Na5onali5es
Weight and trends of the most important na5onali5es in EU and WW
Top 10 Na5onali5es – World Wide and Europe
Sales in Store weights and trends by na5onali5es (Jan-‐Sep 14). Na5onali5es are ranked based on Sales in store figures.
• Chinese growth s5ll strong and consistent with last year’s forecast. In 12 months their weight on the total business has increased by 2% points.
• Russians are underperforming, trend started even before Ukrainian crisis in November 2013.
• Japanese are s5ll suffering due to a weaker Yen.
• Brazilians are now out from both the Top 10 Na5onali5es.
World Wide Sales in store Na8onali8es % to Tot % vs PY Total 100% 2% China 29% 14% Russian Fed 15% -‐11% United States 4% 4% Indonesia 3% -‐14% Japan 3% -‐14% Taiwan 2% 23% Thailand 2% -‐16% Hong Kong 2% 14% Kuwait 2% 18% Saudi Arabia 2% 9% Others 36% 1%
Europe Sales in store Na8onali8es % to TOT % vs PY Total 100% 0% China 27% 11% Russian Fed 17% -‐12% United States 4% 4% Kuwait 3% 19% Japan 3% -‐15% Saudi Arabia 2% 9% UAE 2% 9% Hong Kong 2% 8% Switzerland 2% 2% Thailand 2% -‐20% Others 36% -‐1%
Focus on Countries
FRANCE +3% (January – September 2014)
• Tax Free Market Size es5mated for 2013 at almost 9 Billion Euro.
• Befer performances for France against other main European markets, mainly linked to lower numbers of Russian travellers.
Sales in store
Na8onali8es % to Tot % vs PY
Total 100% 3% China 35% 10% Russian Fed 10% -‐6% United States 5% 9% Japan 4% -‐15% Hong Kong 4% 12% Others 42% 0%
UNITED KINGDOM -‐3% (January – September 2014)
• Middle East has always a leading role in this country with an increased presence in the Outlet channel.
• A stronger Pound has affected sales and the overall performance.
• We were expec5ng stronger trends for China due to easier Visa issuing procedures. Chinese visitors to UK s5ll below levels achieved in Con5nental Europe.
Sales in store
Na8onali8es % to Tot % vs PY
Total 100% -‐3% Middle East 28% 6% China 25% 6% Nigeria 5% -‐9% Russian Fed 4% -‐23% Malaysia 3% -‐6% Others 35% -‐12%
GERMANY -‐1% (January – September 2014)
• Lower growth of Chinese tourists if compared with other countries.
• Problems given by Russians and Watches & Jewelry sector.
Sales in store
Na8onali8es % to Tot % vs PY
Total 100% -‐1% China 33% 7% Russian Fed 21% -‐11% Switzerland 6% 1% UAE 4% 9% Kuwait 3% 36% Others 33% -‐4%
ITALY 0% (January – September 2014)
• Even if Russians are decreasing less than in other markets, the impact is the highest one, as they s5ll represent the first na5onality.
• Koreans performances are mainly linked to the strong currency (KRW) and the increasing presence in the Outlet channel.
Sales in store
Na8onali8es % to Tot % vs PY
Total 100% 0% Russian Fed 26% -‐8% China 22% 15% United States 6% 3% Japan 4% -‐9% Korea 4% 23% Others 38% -‐3%
OUTLET SHOPPING IN ITALY (January – September 2014)
Increase of the Outlet channel in Italy
+16%
0% Italy country Trend
OUTLET SHOPPING IN ITALY
Global Blue and Bain&Company
Bar chart: Weight of Transac5ons per Sector of each Na5onality
71,43%
78,65%
33,40%
43,45%
47,42%
66,44%
13,79%
12,36%
8,55%
10,05%
11,95%
11,90%
14,78%
8,99%
58,05%
46,50%
40,63%
21,66%
China
Japan
Middle East
Others
Russian Fed
Usa
Luxury Premium Mass
*Note: Reference period is September 2013-‐August 2014
Sectors evolu5on by weight in the last 3 Years Luxury Looses weight, it is now around 50%
53,90%
52,31%
49,35%
47,00%
48,00%
49,00%
50,00%
51,00%
52,00%
53,00%
54,00%
55,00%
2012 2013 2014
Luxury
Premium and Mass Increase their weights
9,87%
10,49%
10,97%
9,20% 9,40% 9,60% 9,80% 10,00% 10,20% 10,40% 10,60% 10,80% 11,00% 11,20%
2012 2013 2014
Premium
36,24%
37,20%
39,68%
34,00%
35,00%
36,00%
37,00%
38,00%
39,00%
40,00%
2012 2013 2014
Mass
*Note: 2014 is September 2013-‐August 2014, 2013 is September 2012-‐August 2013 and 2012 is September 2011-‐August 2012
Forecast 2015
FORECAST 2015
of TFS Eligible Business
From + 3 to 5 %
• Chinese – between 5% and 10%
• Russians – between -‐ 5% and flat
• S5ll posi5ve trend from Oil countries