News Column

Solid operational performance impacted by adverse currency exchange rates and weaker short-haul flight volumes in North America and Europe

May 14, 2014

Solid operational performance impacted by adverse currency exchange rates and weaker short-haul flight volumes in North America and Europe

•Total revenue at CHF 666.3 million, compared to CHF 686.0 million in previous year•Total revenue at constant currency up by CHF 19.9 million to CHF 705.9 million•EBITDA margin of 2.7% (3.0% at constant currency), compared to 3.1% in the previous year•Solid operational performance impacted by currency headwinds•Adverse impact from ongoing short-haul capacity management in Europe and North America, and severe weather in the US•Restructuring initiatives in the Airlines Solutions business in Europe deliver as expected•Positive flow through from Emerging Markets continues•Positive revenue growth in Product and Supply Chain with product mix resulting in slightly higher cost of goods•Net loss reported for the period CHF 16.7 million•Confirms 2014 full-year outlook

ZURICH, May 15, 2014 ? Reported total revenue of CHF 666.3 million, representing a 2.9% decrease compared to CHF 686.0 million in the previous year's reporting period. At constant currency the Group achieved an increase of CHF 19.9 million or 2.9% to CHF 705.9 million.

Segment EBITDA (EBITDA) was CHF 18.0 million in the period under review, a decrease of CHF 3.1 million compared to CHF 21.1 million in the previous year. Of this decrease CHF 2.9 million was driven by ongoing weaker currencies, mainly in the Emerging Markets against the Swiss Franc. At constant currency therefore EBITDA would have remained almost unchanged at CHF 20.9 million. EBITDA was also negatively impacted by extreme weather conditions and the resulting lower volumes in the US and the ongoing short-haul capacity management in Europe and the US. Overall, gategroup achieved an EBITDA margin of 2.7% or 3.0% adjusted for currency effects compared to an EBITDA margin of 3.1% last year.

Mainly due to lower EBITDA, higher restructuring charges for the period, the absence of an unrealized forex gain compared with the prior year and a higher deferred tax charge, gategroup reported a CHF 16.7 million loss for the period, compared to a CHF 5.0 million loss in the previous year. The Group's cash flow from operations was an absorption of CHF 10.1 million year to date compared to cash generated from operations of CHF 1.1 million for the same period in 2013. This was primarily due to lower EBITDA, and higher working capital requirements, driven by timing on receivables and payables.

gategroup's balance sheet as of March 31, 2014, shows total equity of CHF 264.8 million, compared to CHF 267.4 million as of March 31, 2013. Net debt as of March 31, 2014, slightly increased by CHF 9.6 million to CHF 300.4 million compared to March 31, 2013.

Revenue growth in both segments

In the first three months of 2014, the Airline Solutions business reported total revenue of CHF 572.9 million. At constant currency the segment saw an increase in revenue of CHF 9.3 million from CHF 601.3 million to CHF 610.6 million. EBITDA for the business segment year to date reached CHF 18.3 million (3.2% of revenue), compared to CHF 21.5 million (3.6% of revenue) in the same period in 2013. As previously reported, the restructuring program in Europe is well on track to deliver savings leading to a higher EBITDA margin compared to the previous year. A part of these savings, however, has been negatively impacted by the ongoing short-haul capacity management of the airlines. Extreme weather conditions, including record low temperatures and heavy snowfall, caused the highest number of flight cancellations in 25 years for airlines in the US. The airline capacity management and the resulting lower catering volumes and lower last-mile services in the US led to a decrease in operational profitability.

The Product and Supply Chain Solutions (P&SCS) business reported an increase in revenues to CHF 130.9 million (CHF 132.8 million at constant currency) in the first three months of 2014 from CHF 125.8 million for the same period in 2013. P&SCS reported EBITDA of CHF 6.4 million (4.9% of revenue) compared to CHF 7.1 million (5.6% of revenue) in the previous year. The slight decrease in EBITDA was mainly driven by product mix and higher cost of goods.

Major contract extensions and streamlining of non-core activities

In the reporting period, gategroup renewed and expanded its business with long-time customer Delta Air Lines. The deal includes a five-year extension of all catering and provisioning services originally due to expire in 2013. gategroup has also expanded its relationship with Delta at three new locations: Dusseldorf, Germany; Manchester, England; and Santiago, Chile. Additionally, Gate Aviation was awarded combined cabin cleaning and provisioning services at certain US locations. The total value of the deal is approximately CHF 125 million per year.

gategroup and Norwegian Air Shuttle ASA have agreed to extend their partnership for Norwegian's long-haul services for three years until April 2017. gategroup will focus on last-mile services and continues to deliver amenity kits, equipment and security services to Norwegian. The two companies worked very closely together to launch Norwegian's long-haul product. In addition, Gate Gourmet will continue to provide last-mile services to Norwegian's short-haul network.

Outlook confirmed

gategroup confirms its 2014 full-year outlook. gategroup expects the global economy to show another year of uneven performance and associated volatility in foreign currency exchange rates. For the full year gategroup anticipates flat revenue growth and an EBITDA margin between 5.6% and 6.2%.

More information on our First Quarter Report is available at:

Overview of key figures for the first three months of 2014 (January-March)

millions of CHF

January-March 2014

January-March 2013


Total revenue




Segment EBITDA




Segment EBITDA margin




Operating (loss)/ profit




Operating profit margin




Loss for the period




Cash (used in)/generated from operations




Net debt





(incl. available credit lines)




Invitation to analysts, investors and journalists

gategroup CEO Andrew Gibson and CFO Thomas Bucher would like to invite analysts, investors and journalists to participate in a telephone conference call regarding the 2014 Q1 results.

The presentation can be accessed via webcast and dial-in teleconference at 14:00 CET on Thursday, May 15, 2014.

To listen to the live presentation via teleconference, call the dial-in number approximately 15 minutes before the start time. Once dialed in, please follow the instructions given over the phone.

Direct dial-in numbers:

Switzerland toll:

+41 44 580 00 69

UK toll:

+44 2033679461

US toll-free:


To link to the live webcast of the presentation, please follow this link:


Dagmara Robinson

+41 44 533 7032

OVERVIEW of gategroup

gategroup is the leading independent global provider of products, services and solutions related to a passenger's onboard experience. gategroup comprises the following brands: deSter, eGate Solutions, Gate Aviation, Gate Gourmet, Gate Retail Onboard, Gate Safe, Harmony, Performa, Pourshins and Supplair.


This publication contains forward-looking statements and other statements that are not historical facts. The words "believe", "anticipate", "plan", "expect", "project", "estimate", "predict", "intend", "target", "assume", "may", "will" "could" and similar expression are intended to identify such forward-looking statements. Such statements are made on the basis of assumptions and expectations that we believe to be reasonable as of the date of this publication but may prove to be erroneous and are subject to a variety of significant uncertainties that could cause actual results to differ materially from those expressed in forward-looking statements. Among these factors are changes in overall economic conditions, changes in demand for our products, changes in the demand for, or price of, oil, risk of terrorism, war, geopolitical or other exogenous shocks to the airline sector, risks of increased competition, manufacturing and product development risks, loss of key customers, changes in government regulations, foreign and domestic political and legislative risks, risks associated with foreign operations and foreign currency exchange rates and controls, strikes, embargoes, weather-related risks and other risks and uncertainties. We therefore caution investors and prospective investors against relying on any of these forward-looking statements. We assume no obligation to update forward-looking statements or to update the reasons for which actual results could differ materially from those anticipated in such forward-looking statements, except as required by law.

Press Release (PDF)



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