DFNI Interview with Gebr Heinemann executive director Raoul Spanger

We have to take over on the 15th of February, so it's a huge challenge now to set up the team, install every process which is necessary, and then we will have a period until Christmas next year when we have the final shops ready. So that's a huge challenge for us, for the whole group—new logistic facilities, new logistic processes. It's a major challenge but also a major coup for our team in Singapore. We said always we want to grow organically, this is organic growth, and we achieved it. And we look forward to it. And personally I can say, flying in six months four times to Sydney is also a challenge.

Of course a new challenge. I mean, we always took advantage from our strong logistics in Europe where we can serve overnight basically to Copenhagen, to Oslo, to Frankfurt, to the bigger places. This is not possible, so it will be a completely different process and it will be a learning curve. I'm quite sure about that. But we will be ready on the 15th of February.

I can only say, as we always say, a tender like this, a big tender, one of the biggest worldwide—if you make major mistakes, you lose money. If you can avoid them, you can win money. And this is our target.

Yes, certainly, because if you see Europe, a lot of places are given for a couple of times with longer contract periods. And apart from Asia, it's logical for us to go to North Africa where we find the same clientele which we know—Europeans going on holiday. So we have turned into Sharm El Sheikh Terminal 2 with Gebr. Heinemann duty free, and we have together with our partners TAV and ATU won this Tunisian competition where we already have been operating in Monastir and Enfidha, and now are at basically seven airports in Tunisia. So a major step and important step, and of course one target on our list.

Difficult to say, actually. Gebr. Heinemann is a company which has a tradition in going into difficult and new markets, and it pays off always. But it might take some time. And to predict what is the political situation is very dangerous and difficult in these days. If you see Russia, if you see Ukraine, and if you see North Africa, it can also be a couple of difficult [situations]. We are sure about that.

It has quite some impact on our year, on our turnover. So we are expecting a flat year only in turnover, and this is related to currency turbulences which are impacted by political influences. And the major part is of course Russia and Ukraine. Also the airports where we have a lot of Russians flying in, like in Turkey but also in Frankfurt, are suffering from that.

That's what we are expecting now, yeah. Actually the second half of the year went better. Scandinavia is doing fine—in Norway and in Copenhagen we are quite successful, sometimes over budget which was ambitious. But Germany is difficult. We have also an issue that Berlin and Lufthansa are not in the kind of crisis but are cutting down flights to cover costs, and the market is not an easy one, especially if you go to the east, if you go to Russia, which is one of our strongest markets.

For the company, for Heinemann Asia Pacific, it's a major step. Because now we are in Malaysia, now we are in Indonesia with Adani, and next year we will be in Australia, in Sydney. That makes us a player in the region, and this was our target. Heinemann's target is actually, in a couple of years, to be of course a player in Europe—we want to remain market leader, of course, to be a leading player—and we don't have to be number one, but a leading player in Asia, and we also want to be a leading player in the Americas.

Yes, of course. Istanbul, the new airport, which will be an airport for 90 million people in the beginning of the first phase and later on up to 150 million—so a completely new dimension—is an important target. And Abu Dhabi, as you said, is also of course an important target. We have also to go there where the business is growing. And if you see growing sales, where is growing? It's in the Middle East, it's in Asia, it's also in Africa on a smaller level, but it's not so much in Europe. So we have to follow the track actually. And we are in Turkey and we want to stay in Turkey. That's an important part.

Three things actually. You don't have to sign if you don't want to sign. It's not airports' failure if you sign a contract which you shouldn't have signed. That's one issue. Second issue is we are facing of course a period of consolidation. That means we have less players and bigger players, and the competition is getting tight and tougher. And the third one, what I would say, it's market. It's like in any market. We should not blame airports. Of course it's a lot of money, but it's also a fantastic marketplace which they give on hold. If you open the next day you make a huge turnover. If you open downtown somewhere you have to get along step by step. So we have to face it. It's our business. And our company, also our owners, we talk again and again—what is our future? Should we also take a step away from travel retail because of this development? But Gebr. Heinemann is especially saying, I'm better in the leading position in one business than number 15 in ten businesses. And I agree to that.