Income Statement

Change
(€m) 2008 % 2007 % at current exch. rate at constant exch. rate
Revenue 5,794.5 100.0% 4,861.3 100.0% 19.2% 24.6%

Other operating income

128.2 2.2% 97.8 2.0% 31.1% 31.0%

Total revenue and income

5,922.8 102.2% 4,959.2 102.0% 19.4% 24.7%

Cost of raw materials, consumables and supplies

(2,202.6) 38.0% (1,811.6) 37.3% 21.6% 26.7%

Personnel expense

(1,486.4) 25.7% (1,323.6) 27.2% 12.3% 17.5%

Leases, rents, concessions and royalties

(1,007.4) 17.4% (727.6) 15.0% 38.5% 45.2%

Other operating costs

(624.8) 10.8% (534.0) 11.0% 17.0% 21.8%
EBITDA 601.5 10.4% 562.4 11.6% 7.0% 11.7%

Depreciation, amortisation and impairment losses

(269.6) 4.7% (222.1) 4.6% 21.4% 26.6%

Impairment losses on goodwill

(0.2) 0.0% (1.2) 0.0% 0.0% 0.0%

EBIT

331.7 5.7% 339.1 7.0% (2.2%) 2.3%

Net financial expense

(123.8) 2.1% (64.1) 1.3% 93.0% 100.9%

Net reversals of impairment losses on financial assets

3.3 0.1% 0.4 0.0% n.s. n.s.

Profit before tax

211.3 3.6% 275.4 5.7% (23.3%) (19.7%)

Tax

(68.2) 1.2% (103.6) 2.1% (34.1%) (31.0%)

Profit for the year

143.1 2.5% 171.8 3.5% (16.7%) (12.9%)

-Group

123.2 2.1% 158.1 3.3% (22.1%) (18.6%)

- Minority interests

19.9 0.3% 13.8 0.3% 44.6% 55.5%

Despite the downturn in the international economy, particularly evident in the fourth quarter of the year, the Group's results in 2008 were in line with the targets announced to the market. During the year Autogrill built up its travel retail & duty-free operations, a business it entered in 2005 when it acquired joint control of Aldeasa. In the spring it gained full control of Aldeasa and also 100% of World Duty Free Europe Ltd., strengthening its worldwide leadership in catering and retail services for people on the move.

The traveller services market depends on traffic trends, which in turn are affected by GDP. Over the years, however, traffic patterns have been linked more closely to mass changes in the international mobility of people and goods than to economic cycles. Traffic growth in the more developed countries, resulting from rising household income and the spread of new and cheaper means of transport (e.g. mass car ownership and low-cost airlines), has recently been joined by similar trends in newly industrialised countries with their inherent transnational spirit and a young population influenced by consumption models in the rest of the world. For a long time these trends were favoured by exceptionally low energy costs. In recent years, however, the booming demand for energy in emerging countries, combined with geopolitical tensions (the crisis in the Middle East, the Gulf War, etc.), have caused oil prices to spike from around $20 per barrel at the start of 2002 to nearly $100 per barrel in early 2008. The main food commodities have also shot up in price over the last two years.

In 2008 the extreme volatility of energy prices affected the markets by making forecasts and scenarios unpredictable. Crude oil prices remained high throughout the summer, climbing to $144 per barrel in early July. Autogrill was quick to react to these trends, capitalising on the markets' relative strength in the first half of the year (when performance outpaced traffic trends in the Group's various sectors and channels), and in the summer launching a broad reorganisation involving every segment of the business with an emphasis on food & beverage and travel retail & duty-free. Efficiency measures for travel retail & duty-free had been planned in connection with the integration of the companies acquired in 2008, with an initial focus on the United Kingdom followed by a global integration phase. At the time of the acquisitions the eventual synergies expected to be achieved totalled some €45m. The first phase was completed on schedule. Autogrill expects to complete the entire project earlier than planned, with rewards in line with projections.

The global crisis that emerged last summer led the Group to extend its streamlining measures to the food & beverage segment as well. A program centred on reducing structural costs was implemented in 2008 and will continue in 2009. Overall, Autogrill has simplified and improved the efficiency of its structure by decreasing the headcount by 402 in food & beverage and by 188 in travel retail & duty-free, for a total cost of €15.7m incurred mostly during the third quarter of the year. The reorganisation had a negative impact on the bottom line, but has proved to be especially worthwhile given the economy's later turn for the worse. In the second half of 2008, key macroeconomic indicators plummeted around the world, especially in the United States, which in the final quarter reported a 6.2% drop in GDP. The situation is no better in Europe. All of the major countries' governments have announced, and in some cases taken, measures to support the economy and protect their financial systems. The extent and depth of the crisis, however, is not yet known. The abrupt economic slowdown had immediate repercussions on the price of oil, whose steep upward climb took a hairpin turn in the other direction. At the end of 2008, the price per barrel had dropped to around $40. Food commodity prices reacted accordingly, foreshadowing a deflationary trend that could last throughout 2009. While the rise in oil prices - in conjunction with the financial crisis - helped destabilise economic growth models in many developed and emerging countries, the subsequent price drops have not managed to head off a serious worldwide recession.

The macroeconomic crisis and the lack of consumer confidence have had a major impact on traffic, which has fallen off sharply in all of the Group's main markets. By way of example, air traffic in the United States was down by an average of 4.7% for the year, and by 8.9% in the fourth quarter. In Spain, where air traffic was rising at the end of June, the situation gradually worsened with a plunge of 12.7% in the final quarter, leading to a 3.2% drop for the year.

1 Source: Airport Transport Association and Aeropuertos Españoles y Navegación Aerea