What is Growth Strategy and Future Prospects of Avolta Company?

In 2024, Avolta significantly expanded its footprint with the acquisition of the Free Duty concession in Hong Kong and the Greater Bay Area. This move is projected to generate CHF 250 million in sales for 2024 and provides access to 150 million passengers, strengthening its presence in Asia Pacific.

Avolta secured long-term contracts in North America, including over 11 years at JFK's Terminal 8, introducing concepts like Eataly and Momofuku to a U.S. airport for the first time. These JFK wins, alongside a Terminal 6 contract, are expected to boost regional revenue by approximately 3%.

Further solidifying its North American presence, Avolta secured 15-year contracts at John Wayne Airport in California in May 2024. Recent agreements in July 2025 include a ten-year F&B contract at Dallas Fort Worth International Airport and a ten-year contract for 13 stores at San Antonio International Airport.

Avolta entered the Saudi Arabian market in 2024 with a contract for 10 F&B concepts at King Khalid International Airport. In early 2025, the company expanded into Tunisia, establishing a presence in five of the country's largest airports, and grew its cruise channel in Latin America.

For the full year 2024, Avolta reported a total turnover of CHF 13.725 billion. CORE turnover reached CHF 13.473 billion, an 8.9% growth at constant exchange rates and 6.3% organic growth. CORE EBITDA increased by 12.2% year-on-year to CHF 1.267 billion, achieving a 9.4% margin, a 40 basis point improvement from 2023. Equity Free Cash Flow (EFCF) saw a significant 32% rise to CHF 425 million.

The company began 2025 with strong momentum, reporting a CORE turnover growth of +8.2% at constant exchange rates and +5.3% organic growth in Q1 2025. As of February 28, 2025, year-to-date revenue growth was 9.5%, with organic growth at 6.0%. CORE EBITDA for Q1 2025 reached CHF 196 million, a 16.3% increase year-on-year, with a CORE EBITDA margin of 6.4%, up 37 basis points.

Avolta has reaffirmed its medium-term targets, aiming for annual organic growth between 5% and 7%. The company also plans an improvement in CORE EBITDA margin by 20 to 40 basis points annually and an increase in EFCF conversion by 100 to 150 basis points per year.

Net debt stood at CHF 2.663 billion by the end of 2024, a decrease from CHF 2.696 billion in 2023, with a leverage ratio of 2.1x. As of March 31, 2025, financial net debt was CHF 2.820 billion, with a leverage ratio of 2.18x, an improvement from 2.55x in Q1 2024. Avolta also announced a share buyback program of up to CHF 200 million for 2025 and will propose a dividend of CHF 1.00 per share, a 43% increase.

The slower growth in spend per passenger, particularly in categories like alcohol and watches/jewelry, directly impacts Avolta's revenue growth potential. This necessitates a focus on strategies that can increase transaction values or drive higher volumes.

Given the over 80% revenue reliance on airports, Avolta's strategy for overcoming market challenges must include robust contingency plans for travel disruptions. Diversification within the travel ecosystem or exploring new revenue streams could be vital.

The decline in sales in regions like Latin America and the impact of reduced travel from certain nationalities highlight the need for Avolta's business strategy to be adaptable to geopolitical shifts. This involves understanding and responding to changing travel patterns and consumer spending power.

Avolta's approach to innovation and future growth, particularly through hybrid concepts and cross-selling, is a key element of its growth plan. This aims to create a stronger competitive advantage by offering integrated and appealing customer experiences.