WDF extends contract with Heathrow airport, eyes cost cuts

By Francesca Landini and Elisa Anzolin MILAN (Reuters) - Italian airport retailer World Duty Free said on Thursday it had agreed a 6-1/2-year extension of its retail contract with London Heathrow Airport, which last year generated more than 20 percent of the company's revenues. In a presentation on its website, WDF also said it was working hard to make its Spanish operations more efficient, adding it would press ahead with integration of its European platforms. The group, which has had to cope with economic recession both in Spain and Italy, expects savings of around 15 million euros ($19 million) over the next three years from its Spanish business, a slide in the presentation showed. In the same period the airport retailer plans to cut costs by an additional 25-30 million euros through closer integration of its Spanish and British operations, a switch over to a single IT system and a more efficient warehouse network. WDF was spun off from motorway caterer Autogrill a year ago to pave the way for possible tie-ups for both companies. So far WDF has not announced any alliance, while competitor Dufry acquired Swiss Nuance in June. "The group is seeking growth and is open to business combinations," WDF Chief Financial Officer David Jimenez-Blanco said in a conference call with analysts. He did not elaborate on possible options for the group. The company said on Thursday it was confirming its guidance for revenues between 2.375 billion euros and 2.425 billion euros this year, even if it had to pay one-off restructuring costs and had to account for higher rent bills at Heathrow airport in the last nine months of this year. (1 US dollar = 0.7884 euro) (Editing by Keiron Henderson)