Autogrill acquisitions prompt savings plan

24 July 2008
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25 July 2008 | Rebecca Ellinor

Italian company Autogrill aims to save in excess of ?25 million (£19.7 million) a year from 2010 by exploiting its new, stronger purchasing power.

A further ?20 million (£15.7 million) cost savings are expected to result from "synergies through the rationalisation of the cost structure, including labour costs".

The company, which runs catering and retail operations at railways and motorway service stations across Europe, this month unveiled the decision to restructure purchasing as part of its 2008-2010 business plan. It said the project takes into account its acquisition of two airport retail operations - Spanish-based Aldeasa and World Duty Free Europe in April and May respectively. It also bought airline caterer Alpha Group in 2007. Its larger size, greater geographical reach and a lot of overlap in terms of what the companies buy are among the reasons for the rethink.

Analysis work on the group restructure has already taken place, supplier negotiations will start in September with the "optimisation of its buying and supply chain" operations expected to be complete in 2009.

In a presentation to the financial community, head of integration Silvano Delnegro said: "These three companies have developed commercial practices in terms of pricing policy and commercial relationships with brands which is something we can leverage across the companies. We realise we can bring more value to the table with our suppliers as a single business."

The company is focusing on efficiency plans after having achieved annual growth of around 18 per cent between 2005-2008.

SMjul2008

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