Review Insights Outlook Business Year 2017 Dear Readers

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Review Insights Outlook Business Year 2017 Dear Readers,

Gebr. Heinemann experienced healthy and robust growth in 2017. We have held our own very well against our competitors and have been able to capitalise flexibly on market conditions. This has in turn enabled us to expand on our strong position in Europe. The return of Russian holidaymakers to Turkey was good news for our business and compensated for the reduction in travel from Western Europe. In the cruise sector, we now operate globally from our base in Miami. We are also pleased with our development in the Asia-Pacific region. We are continually expanding our business in Malaysia and Sydney and now have an additional presence at Hong Kong International Airport.

Our new joint venture at Tel Aviv Airport, which began operations on 1 Janu- ary 2018, has been another source of pride for us. Duty Free has an excellent position in Israel. Further to that, all of our departments are currently focusing on their preparations for the planned opening of the new airport in Istanbul at the end of this year.

Our staff here at Gebr. Heinemann are all dedicated to conserving resources. We are committed to monitoring the economic, social and ecological impacts of the company’s business. Our pilot project for this is a collaboration with the ocean protection organisation OceanCare to reduce the amount of plastic bags in our shops.

We hope you enjoy reading our Annual Report.

Sincerely,

Claus Heinemann Gunnar Heinemann I. Editorial Owners II. Contents CORPORATE NEWS

08 Interview – Owners and Executive Board 14 The Corporate Philosophy of Gebr. Heinemann 18 Financial Statements 20 Strategy Day 2017 in Hamburg 26 HR News: internal global job market for international development 30 Heinemann Corporate Responsibility: an update 34 Expert interview: Matthias von Randow, Executive Director of BDL GLOBAL PRESENCE 40 New business: tender wins 2017 42 New, expanded, extended: supply contracts 2017 CONTENTS 44 Shop openings and extended concessions 2017 48 Joint venture with James Richardson wins tender in Tel Aviv 54 New ways in Norway: new generation of Duty Free shops 62 Spurt towards the finishing line at Istanbul New Airport Experience the world of 66 Augmented reality at Berlin-Schönefeld Gebr. Heinemann once again 70 The new shopping concept on "Mein Schiff 6" in our Annual Report. We 78 The new Gebr. Heinemann distribution brand have captured twelve exciting 86 Marketing Summit 2017 months and interesting topics 90 Russia on the rise HELLO AND from around the globe in 98 Exclusive supply contract with Mauritius Duty Free Paradise images and text for you. So 102 "On top of onboard": Inflight & Catering insights WELCOME get reading! You will also find 106 Best practice case: Albrecht Dürer Airport Nuremberg QR codes that link some of 114 Trends and innovations change the world of Perfume & Cosmetics the texts to films. Enjoy! 120 Copper Dog with exclusive premiere at Heinemann 124 A new multibrand concept for luxury shopping experiences 130 Travel Retail Data Innovation Group with positive development 136 Procurement & Facility Management: purchase globally, save locally 140 Strategies for the growing demands of global logistics networks 146 The development of Heinemann Asia Pacific 150 Interview with Max Heinemann 156 Sweet Dreams at Hong Kong International Airport 162 Heinemann Australia – the complete update 168 Heinemann Tax & Duty Free opens at Gold Coast Airport 172 Heinemann Americas with full steam ahead Lara Vitzthum, Head of Corporate Communications SPOTLIGHTS 2017

180 2,950 years at Gebr. Heinemann 184 Awards 194 Redesigned HSV box: impressive impressions 196 "My Highlight"

III. Imprint CORPORATE NEWS

About the current situation of Gebr. Heinemann worldwide P_8 CORPORATE NEWS

a country that would have good reason not to wel- Free shops. This generates a high level of aware- come Germans because of the Holocaust. In fact, ness throughout the country. On top of this, Duty the opposite is true: we feel very welcome there.” Free has an excellent image because it is a mark of quality that is synonymous with original mer- 2017 WAS A Raoul Spanger: “The two family companies Danos chandise.” and Heinemann approached one another and de- RESPECTABLE YEAR. cided to pool their resources. The result is a strong How did Heinemann’s top airports develop in partnership that is very important to us because 2017? An interview with the board members of Gebr. Heinemann the Danos family has a wealth of experience as a long-standing operator at the airport in Tel Aviv.” Raoul Spanger: “All of our top airports developed positively. We saw the best performance in Stephan Ernst: “We soon realised how much we Sydney: the marketplace concept with several have in common. Our working relationship was subtenants and bars is working extremely well. characterised by trust and commitment right from This is a new approach that is catching on. In the the start. Just like Heinemann, Richardson keeps first full year since introducing the concept, we saw its word. Personally, I am impressed by the joie de growth of 10 per cent in Sydney. This development The Owners and Executive Directors agree that 2017 was a "respectable" year for Gebr. Heinemann. But does "respectable" vivre and openness of people in Israel. It’s an ex- goes hand in hand with sustained passenger also mean successful? What were the most important occurrences and changes for Gebr. Heinemann in the international citing country!” growth due to a rising number of Asian travellers. travel retail market? And what are the company’s plans for 2018? An interview with Claus and Gunnar Heinemann, Norway posted good figures, too, with growth of Kay Spanger, Raoul Spanger, Stephan Ernst and Peter Irion about how the Hamburg-based family company is operating How much is the Duty Free business in 6.5 per cent. However, we noticed that passengers globally. Tel Aviv worth to Gebr. Heinemann? first needed time to adjust following the opening of new shops at the considerably larger terminal The global economy is robust and presents and in border shops. We are pleased with develop- “Annual sales total 400 million in the spring. For that reason, we did not achieve opportunities for growth. Which opportunities ment in Asia, too: we are continuously expanding Claus Heinemann: US dollars, which will immediately make Tel Aviv the more ambitious target we had set ourselves. was Gebr. Heinemann able to utilise in 2017? our business in Malaysia and we won a major con- our third largest concession after Istanbul and Business in Frankfurt grew by 2 per cent. However, fectionery tender in Hong Kong in September 2017, Oslo. On top of this, the average revenue per pas- we have seen over the past two years that Asian Claus Heinemann: “We experienced healthy, ro- which included eight new shops. Three years after senger will be the highest of any Heinemann site.” travellers are becoming more selective about bust development in 2017. For instance, we were our successful premiere in Sydney, we will add a travelling to Frankfurt. That is why we were unable able to expand on our strong position in Europe, second Australian location at Gold Coast Airport “The large market volume stems to record stronger growth there. Developments in especially in Eastern European countries such as in the future.” Stephan Ernst: from the fact that Duty Free customers at the air- Istanbul – our number one location for sales – were Russia, Ukraine, Georgia and Romania. The report in Tel Aviv have a ‘pick up on arrival’ option. positive, too. This took us by surprise in a positive turn of Russian holidaymakers to Turkey was good Gunnar Heinemann: “We are also immensely This means they can shop prior to their outbound way, considering the current environment.” news for our business and compensated for the re- proud of our recently established joint venture at flight and collect their purchases when they return. duction in travel from Western Europe. We are the Ben Gurion Airport in Tel Aviv, which has started Israeli passengers account for 70 per cent of sales. “Istanbul enjoyed consider market leader in Scandinavia, where Norway and operating in early 2018. This partnership with the Claus Heinemann: Passengers are keen to make the most of their able traffic not only from Russia, as already men- Denmark performed well. In the cruise sector, we family company James Richardson has special sig- Duty Free allowances.” tioned, but also from Arab countries. By contrast, now operate globally from our base in Miami. We nificance for us. Israel may be a small country, but it arrivals business is decreasing due to the weak are also satisfied with our retail activities at airports is a large market. It means a lot to us to operate in Gunnar Heinemann: “These figures show that currency. Turkish Airlines has stabilised and fur- ‘lugging around’ purchases when they are travel- ther strengthened Istanbul as a transfer airport. ling halfway around the world remains a challenge This is good news. After all, the largest airport in for Duty Free customers. In Israel, passengers the world is being built there to cater for this trans- have a convenient option, which leads to outstand- fer business. Many of our staff from throughout ing sales.” the company will be involved in working on this project in Istanbul in 2018. Turkey is the most im- Kay Spanger: “Much like in Scandinavia, sales are portant export market for Gebr. Heinemann.” incredibly high compared to the small population. In Israel, we will be the largest retailer in the coun- Stephan Ernst: “The INA project is now much more try in most product categories. This makes it an challenging than originally expected due to devel- interesting prospect for suppliers, too. The Duty opments in passenger numbers, which were es- Free market is so important in Israel that domes- timated much more positively during the contract tic advertisements for it are accepted by the local negotiations at the end of 2014 than they are now.” market. There are even TV commercials for Duty

Claus Heinemann Gunnar Heinemann P_10 CORPORATE NEWS

Kay Spanger: “The project is equally challenging largest growth rates were in the Eastern Europe & want a trouble-free end-to-end supply chain or, in nied by the right pricing for the market in question, for us and our suppliers, but we have signed a Central Asia and Benelux & Africa segment. In the other words, an all-in-one solution.” taking into account volatile exchange rates in inter 25-year contract and will make it a resounding former, growth stemmed primarily from our border national business.” success. Turkey is Heinemann’s top priority.” shops and Moscow’s airports, Sheremetyevo and Which purchasing trends are you seeing, both Domodedovo. We were also delighted that our con- globally and regionally? What was 2017 like for GH from a financial You are taking a new approach to distribution tract in Vilnius in Lithuania was extended by a fur- perspective? What were the most important with "Supplying Success". How did you come ther six years. Russian consumers’ confidence has Kay Spanger: “We always ask ourselves which occurrences and what surprises were there? up with this idea and what is its objective? returned: they are travelling and shopping again. trends are right for us. Which regional brands are Our business in Africa developed very positively, important for additional revenue. It’s about effi- Stephan Ernst: “It was a respectable year. Largely Peter Irion: “We have always asked ourselves how thanks in particular to the return of our client, Mau- ciency – i.e. expenditure and revenue – and joint for technical reasons relating to our reduced stake in we can advise our customers successfully. Now, we ritius Duty Free Paradise. Our activities in the glob- investments. At the moment, cosmetics are trend- the Frankfurt business, we will post very little growth have found the right way to do this with the new dis- al cruise market are proving highly successful, too. ing worldwide. Brands and colours change quick- from consolidated group sales in 2017. However, tribution brand and the associated pledge, Supply- Both retail and distribution aboard cruise ships are ly here. Trendy brands are often bought by big sales for the group of controlled companies – ing Success. This came about because an analysis important growth markets for Gebr. Heinemann. businesses, then there are exciting negotiations which show the firms’ total sales, regardless showed that we were presenting our customers with We will continue to invest in this in the future. These with the industry concerning purchase prices and of Heinemann’s stake – rose by 6.6 per cent to a different image and a different service depending investments will be made worldwide because we investments. Within cosmetics, face masks are 4.1 billion euros in 2017. on the sales division and staff involved. Now we are supply cruise ships from our sites and/or subsidi- currently a strong trend. They generate a large conveying a clear image by saying exactly what aries in Europe, Miami, Singapore and Sydney. We number of customer contacts as well. Take, for We are satisfied with our profit as well. High report- Gebr. Heinemann stands for: making our customers are the only company that does this.” example, the Korean skincare brand Sulwhasoo, ed currency losses due to the dollar’s weakness more successful. That’s our promise!” with which we are a trendsetter for our Korean cus- against the euro, the effect of the Frankfurt joint ven- Kay Spanger: “Whether centrally and locally, we tomers in Europe. In the LTC category – liquor, to- ture, and substantial investments in MovinGH2020 What response did that meet with? ensure that we offer correspondingly high-quality bacco and confectionery – we are seeing a trend all had a negative impact on our profit, but im- logistics. Our clients rate this very highly because for hand-crafted spirits, which may not make for provements in the operating result partly compen- Peter Irion: “The team from the headquarters gave cruise ships have very carefully devised, complex large volumes but are very attractive. We can dis- sated for this. However, we were unable to move us excellent feedback. We quickly built up a sense schedules.” play these products as exclusive categories in our closer to achieving our medium-term return target of team spirit across all the departments. Custom- shops.” of 4.5 per cent for the group in 2017. One positive ers have so far also responded very positively to Gunnar Heinemann: “It is essential for cruise com- development worth mentioning is the start of the our promise of success. We intend to develop other panies that the goods are ready and waiting when On the subject of pricing: what is your strategy? MovinGH2020 programme, which brings togeth- services, of course, such as a B2B platform. We the ship docks and can be taken on board. Cruise er the key issues of process management, CTR, also share the experience we have gathered as a operators need reliable suppliers because ships Kay Spanger: “Like all other retailers, we are re- master data management and check-out. The retailer. It’s about engaging in close dialogue with are usually in port for less than 24 hours. This line luctant to talk about our pricing strategy publicly. first major milestones were achieved in 2017. We our customers so that we can develop joint proof business is a great fit for us!” Our strategy centres on quality and strategic ele- also made considerable progress with the strate- jects as successfully as possible.” ments, such as incorporating trends into the range gy process by gearing all areas towards achiev- How did the airline market develop? and special products, i.e. Travel Retail Exclusives. ing the company’s goals. In addition to this, the How did business develop in the distribution We ensure that Travel Value and Duty Free is a strategy coordination team – which is made up of market? Peter Irion: “There is an extreme trend towards high priority in the industry. The travel retail mar- representatives from various specialist sections – consolidation here – in the catering market, too. In ket is an ideal place for brand owners to present started work successfully and is ensuring that this Peter Irion: “We expanded in almost all areas and 2017, we managed to extend two important and promote their products – we are the industry’s theme gathers pace.” achieved total growth of 7.5 per cent overall. Our contracts, safeguarding our business with both shop window. Ultimately, this has to be accompa- Ryanair and Gategroup and thereby setting the course for further growth. Low-cost carriers undoubtedly present an opportunity for us because they have always been driven by sales. ‘Buy on board’ is part and parcel of these airlines.”

Kay Spanger: “‘Buy on board’ also includes snacks, which is a new product group for us. This business has its own rules, such as small packaging sizes. We want to cover this category in the future as well so that we can offer a bundled service. We are all about providing solutions from a single source and that is exactly what clients are looking for. They

Peter Irion Kay Spanger Stephan Ernst P_12 CORPORATE NEWS

On the subject of large-scale projects, what What growth do you anticipate in 2018 and One last question, with a quick answer: The is the initial outcome of the joint venture with what investments are planned? customer comes first, so how would you like Fraport? customers to experience Heinemann Duty Stephan Ernst: “We anticipate double-digit growth Free in 2018? Raoul Spanger: “The joint venture was founded on – due in part to our new activities – and a reason- the basis of the deep trust that has formed from able profit. In addition to the considerable invest- Raoul Spanger: “The Heinemann brand turns ten Fraport and Gebr. Heinemann working together ments in MovinGH2020, we will once again invest in 2018. These past ten years were primarily offline. for many, many years. And it is a success. Here heavily in the market.” The next ten years will be much more digital. We are some examples: we were involved in the new want to get to know our customers better every day plans before the construction of Terminal 3 actually Your son Max Heinemann will join the execu- and maintain a permanent dialogue with them.” started. This allowed us to develop a configuration tive team in 2018. What do you think about this together at an early stage. There will be a large, important step? Gunnar Heinemann: “Customers should feel and open-plan area – you could say the shops will recognise that we at Heinemann understand them come to the customers. In this way, we want to ap- Gunnar Heinemann: “I’m looking forward to it, well.” peal specifically to passengers travelling with low- of course! I am particularly pleased that my son cost airlines, which will depart from this terminal spent eight years in Singapore, learnt a lot and Kay Spanger: “We want to remain the number one in the future. Another example is Fraport’s online managed Heinemann Asia Pacific for four years. choice for our suppliers and customers in the travel shopping website. We played a part in this right We can learn from his experience, too. Max felt retail market – more than ever before!” from the start as a co-developer and are deeply very at home in Asia and is joining the executive involved in the business. This has brought us even team as a man who brought Heinemann success Peter Irion: “Hanseatic, reliable, efficient, human. closer together as a team and our 800 employees in a far-away market. He is a team player. We Those are our brand values for Supplying Success. mastered the switch to the joint venture in a posi- consider ourselves well prepared for the moment Plus, the sense from the customer that we have tive fashion. We are bringing new brands to Frank- of generation change in management which is a made them more successful.” furt, as well: we have opened a Bulgari Boutique in critical one in any family company.” zone B. Three more boutiques will open in zone Z Stephan Ernst: “Customers should say: they’re in spring 2018 (Bottega Veneta, Gucci and Yves Claus Heinemann: “As Max’s uncle, I think things here, too?” Saint Laurent), creating additional jobs. Later this have worked out perfectly. With his experience year, the Duty Free shops in zone B will be given of Asian culture, Max will contribute value to the Claus Heinemann: “Istanbul is our biggest project. a makeover.” company that we did not have previously. He will I hope that customers in Istanbul New Airport will strengthen us as a firm. That is the prerequisite for see how extraordinary the city of Istanbul is and What were the nicest surprises in 2017? someone to become a new member of the exec- love our unique new shopping concept.” utive team. As a family company, it also shows us Claus Heinemann: “There weren’t really any big that we have a competent, capable next genera- surprises, but we saw that Gebr. Heinemann held tion. There could be no better message, especially its own very well against its competitors as a fam- for our employees.” ily company and was able to flexibly capitalise on market conditions. On top of this, by becoming more global, we are continuing to ensure that we can compensate for political or economic difficul- ties in certain regions with our business activities elsewhere. I am very confident that the travel market as a whole will continue to grow and that we will gain additional market shares over the long term. We also have a very good workforce to help us achieve this.”

Raoul Spanger Kay Spanger and Claus Heinemann Stephan Ernst Peter Irion, Executive Director Distribution, THE CORPORATE PHILOSOPHY describes the first principle "We are one family" : "Gebr. Heinemann is a family-run company, and we want OF GEBR. HEINEMANN to bring that family feeling into the workplace. We are guided by family values, we support and respect one another and we enjoy working with each other." Foundation of success and guidance for the future

Peter Irion For Gebr. Heinemann – a globally active, family-run business – a distinctive culture of values forms the basis for effective working relationships rooted in trust. Gebr. Heinemann employs 6,000 people around the world. The corporate philosophy serves as a guide, and as the foundation of success for their shared efforts. It not only lays out the principles of cooperation and work practices, it also defines the mission and "We lead through trust" is the second principle. vision of Gebr. Heinemann. In a constantly evolving market environment, Gebr. Heinemann aims to be As Stephan Ernst, Executive Director Finance & IT, the first choice on the travel retail market by virtue of the vitality and long-term outlook of an independent points out, "This principle not only applies to the family-run company. managers, but also to the way each individual works and their basic attitudes. We are reliable, open, honest and we The trading firm therefore supports customer journeys with the best multi-channel offers. Service and the take responsibility for our actions. Trust must always be shopper experience are continually enhanced, driving customer-related developments with innovative based on give and take." services spanning all sales channels.

Stephan Ernst

OUR VISION: "Our successful development as a company over the years is The Heinemann Family. down to the fact that we have always stuck to our course persistently, even when times were tough. Our goals are First choice in Travel Retail. clear, and we understand that when you stop trying to get better, you stop being good," says Kay Spanger, Executive Director Purchasing, Fulfillment & Worldwide. Logistics. With this in mind, guiding principle number three in our mission is: "We persevere".

Kay Spanger OUR MISSION: We live and breathe service, "We delight our customers" is the fourth principle. and we create value in an "This applies to our clients in both the retail and distribution areas," explains Raoul Spanger, inspiring and emotional way. Executive Director Retail & HR. "The principle implies that we are consistently personally committed to meeting customer demands, delivering unrivalled service and establishing long-term relationships."

Raoul Spanger “From a financial perspective, 2017 was a respectable year for us, and we are satisfied with our earnings. Gebr. Heinemann achieved a strong and stable performance. We were able to expand on our strong position and presence, especially in Eastern European countries such as Russia, Ukraine, Georgia and Romania. The joint venture at Ben Gurion Airport in Tel Aviv with James Richardson – also a family-run company, owned by the Danos Family – was commercially significant for us. The airport has annual sales of around 400 million US dollars, which will immediately make Tel Aviv our third largest concession after Istanbul and Oslo. The INA project in 2017 was much more challenging at the development stage than we originally expected, as the projected passenger numbers were more positive during the contract negotiations at the end of 2014 than they are now.

I’m personally very happy about the great progress we made with our internal strategy process by gearing all areas towards achieving the company’s goals. In 2018, we antici pate double-digit growth, and reasonable earnings again. In addition to new investments in our internal strategy programme MovinGH2020, we will once again invest heavily in the market.” WE WILL ONCE AGAIN INVEST HEAVILY IN THE MARKET.

Stephan Ernst, Executive Director Finance & IT P_18 CORPORATE NEWS FINANCIAL STATEMENTS Gebr. Heinemann Group Turnover: 4.1 billion € * Total external sales by categories + 6.6 % Δ PY * Preliminary group turnover of Gebr. Heinemann and affiliates. Consolidated Gebr. Heinemann turnover according to HGB: 3.0 billion euros. 32 %

Perfume & Cosmetics

57 %

Liquor, Tobacco, Confectionery

9 %

Retail 78 % Fashion & Accessories

2 %

Other categories and OTHER rendered services Rendered services 1 %

Distribution 21 %

Total external sales by regions Total external sales by channels

14 %

Germany 29 % Airports Shops Border Cruise Liners and Ferries Airlines and Catering Other EU countries (except Germany) 41 %

Rest of Europe 77 % 14 % 4 % 2 % 3 % 11 %

Asia and Asia Pacific OTHER 5 %

Rest of the world TOMORROW’S OOHS AND AAHS

Strategy Day 2017: How can we inspire customers in future? P_22 CORPORATE NEWS

A day full of inspiration and innovation: At the beginning of September the Purchasing department of Gebr. Heinemann invited representatives of international brand manufacturers to the annual Strategy Day in Hamburg. Around 350 participants witnessed exciting presentations on the current development of the company and discussed sustainable strategies for the future of global travel retail. The overarching objective was to develop ways to continue inspiring customers and ensuring their long-term loyalty.

The event was held at Hamburg's Museum of Ethnology – a fitting, symbolic choice of venue: Not only was it established in 1879, the same year as Gebr. Heinemann, it also shares the aspiration of bringing cultures together. Kay Spanger, Executive Director Purchasing, Fulfillment & Logistics,

summed it up: “The focus of Gebr. Heinemann is more international than ever. To continue our global success, we need partners who think and act globally, too.” Gebr. Heinemann is placing great emphasis on unusual promotions and cross-category activities, which offer suppliers a multitude of opportunities to hone their own company profile, thus generating growth for themselves. In return Gebr. Heinemann expects them to give substantial support and financial commitment.

GLOBAL STRATEGY AND LIVE PROMOTIONS

The presentations from eight company divisions focused on the global orientation and the strategy of Gebr. Heinemann. Thus, representatives from Heinemann Americas, Australia and Asia Pacific were among the presenters, pointing out to international suppliers interesting potentials for using creative strategies to gain key market shares at their locations. P_24 CORPORATE NEWS

The Purchasing and the Distribution departments summarized the success factors and potential in their respective divisions. The Retail department used the "marketplaces" concept to outline how the future of The Activity Management department presented the highlights of the previous year's global activities travel retail might look: "one-stop shopping" without doors and the "race track", but full of inspiration, inno- and surprised guests with two live promotions in the event space. The end of the Strategy Day 2017 was vative promotions and cross-category activities that invite customers to stay a little longer. Status updates marked by a party and extremely positive feedback from the industry representatives. were provided on the global exchange of data and on the Travel Retail Data Innovation Group, founded by Gebr. Heinemann, as well as on the digital orientation of the company’s marketing.

Kay Spanger and Patrick Bouchard, Vice President Global Client Management, Estée Lauder Peter Irion HIRE CHANCES FOR INTERNATIONAL CAREERS

Internal global job market opens up opportunities for better international development P_28 CORPORATE NEWS

With globalisation and digitalisation come new challenges for successful HR management. It needs to Anne-Kristin Hohnschild, become more staff-focused and agile, processes must be faster and collaboration must be more intercon- Cruise Channel Account Manager in Miami nected. The International HR Management team at Gebr. Heinemann is ensuring that the company and “I’ve been working for Gebr. Heinemann in Miami since December 2017 and will stay here for two years to establish a Cruise its employees are well equipped for global challenges with new support services and an internal global Liner Distribution Team. I’ve always been interested in working abroad for a certain period and I’m happy that I now job market. have an opportunity to bring my expertise and cruise experience to our subsidiary Heinemann Americas. For me personally, working abroad means that I can really broaden my horizons, Employees working on international projects will now receive the best possible preparation for the asso- while remaining loyal to the company Gebr. Heinemann – that’s a great combination! ciated challenges. “We are offering intercultural training and, if necessary, safety courses, so that they can concentrate Being far away from my family and friends is the biggest challenge for me. The on their project right from day one and feel at home in their new international surroundings,” reports Janina Stucke, exciting task of establishing a Cruise Team for Distribution is not something that International HR Manager. “Two project teams who work together with Turkey and Israel have already completed this can be accomplished in a day. I enjoy tackling this task and growing from my training and gave us thoroughly positive feedback.” day-to-day experiences.”

The International HR Management team has also optimised its service package for employees who are

posted abroad for an extended period as expatriates. “Expatriates and, if necessary, family members travelling with them are being prepared better – for example, with training courses and preventive medical care – and are supported closely by the HR department at their company back home while they are abroad, and are proactively assisted with reinte- gration early on,” says Janina Stucke. “The new compensation concept is fair and transparent and geared to the cost and quality of living at the host site.”

At the beginning of the year, the International HR Management team also successfully rolled out a new internal global job market, which offers employees at Gebr. Heinemann new international development

opportunities. “This project was close to my heart right from the start,” comments Janina Stucke. “Until recently, our employees’ further development opportunities were largely limited to their existing site. With the international job market, Wing Chee Chau, Retail Operations Manager in Hong Kong we are creating a transparent database of worldwide vacancies, which we hope will help us to retain good employees for many years. At the same time, it opens up an attractive new channel of recruitment for sites that are still relatively “When I had a part-time job as a student at Amsterdam Airport Schiphol and later on as Shop Manager, I met business unknown within the local market.” Dr. Wolfgang Thiele, Global HR Director at Gebr. Heinemann, adds: “Last people from all over the world. Their travelling behaviour attracted me and made me believe working abroad could give me but not least, to face the growing international challenges, Gebr. Heinemann needs employees who feel at home in the an interesting life and work experience. When I arrived in Hong Kong in November 2017, our international arena, are sensitive to intercultural issues and have global contacts. In other words, launching the global job Sweet Dreams stores still had to open at Hong Kong International Airport. Together market is a win-win situation for the company and its employees.” with HR, our focus was to recruit our front line staff. Meanwhile my main task was translating our retail strategy to an operational level to prepare for our opening. The various HR departments around the world must work together closely on the new international job Even though I was born in Amsterdam and have Asian roots, working in Hong listings. As the first point of contact for international HR managers, Janina Stucke tries to make optimum Kong is still very much out of my comfort zone. The various challenges that I use of synergies with regular visits to the sites, annual international HR meetings and multi-site collabo- encounter abroad test my adaptability, flexibility, patience, communication skills ration on HR projects. One of the first joint projects was the international roll-out of the employee opinion and resourcefulness. I needed to strengthen my cultural awareness.” survey last year, which employees at the sites in Singapore, Kuala Lumpur and Sydney were invited to participate in for the first time. CORPORATE RESPONSIBILITY: MORE THAN A BUZZWORD SINCE 1879

At Gebr. Heinemann sustainability has been part of the business culture for four generations P_32 CORPORATE NEWS

Corporate responsibility has been at the heart Gebr. Heinemann’s business for generations, because it global increase in plastic waste. Single-use plas- builds on a dialogue with customers, business partners and suppliers, and not least with employees. tic bags are now only provided for a charge at 14 What it calls for – lifting the individual’s personal sense of responsibility above the individual level to an Heinemann Duty Free locations in Germany and overarching collective system – is an established element of the company culture at Gebr. Heinemann. Austria, and from January 2018 onwards also in The managers and employees of this family company with global operations apply its principles out of Bratislava (Slovakia) and Ljubljana (Slovenia). The conviction. charge of 30 cents draws the attention of passengers from all over the world to the topic of environ- Vera Bürgi, Managing Director OceanCare, with Claus Heinemann An indivisible part of systematic corporate responsibility management is the willingness to examine the mental pollution. All the proceeds generated by this economic, social and ecological effects of the company’s business. At Gebr. Heinemann, a particular focus policy go to fund the work of OceanCare. is on personnel management, environmental management and supply chain management. The company has commercial relationships with over 1,000 suppliers, customers and business partners in more than Within just one year it was possible to reduce 100 countries. Although Gebr. Heinemann has always relied on trust, in future the company would like to usage of single-use plastic bags at participating exert a greater influence over the concrete implementation of common sustainability standards along the shops by around 70 per cent, from some 8.8 mil- entire value chain and support its partners in these endeavours. In this sense, corporate responsibility lion in 2016 to 2.5 million. At the same time, Gebr. is also a strategy that contributes to safeguarding the commercial success of Gebr. Heinemann. Heinemann reported a sharp increase in sales of alternative, reusable bags over the same period, AWARD-WINNING CR REPORT ON TRACK TO MEET INTERNATIONAL REPORTING STANDARD from 21,400 to 96,700. Just six months after starting the campaign, Claus Heinemann was able to Ensuring the sustainability of corporate responsibility activities also requires regular reporting on the work hand over a cheque for 55,000 euros to the com- that has been completed. Gebr. Heinemann’s first foray into an external dialogue was the publication of pany’s environmental partner. For the full year of its CR Report in 2015. In 2017 the company published an improved report for 2016 with a more global 2017, the total donation made to OceanCare came to an impressive 142,000 euros. focus, which was based on international frameworks and guidelines and won the Fox Finance Award in gold for efficient corporate reporting. MORE EFFICIENT USE OF RESOURCES WITH "ECOPROFIT" Now Gebr. Heinemann is building on this foundation in order to make further improvements to the systematic documentation In late 2017, Gebr. Heinemann took another important step along this path by introducing the Ecoprofit and performance measurement of sustainability activities system sponsored by the City of Hamburg at its headquarters. This initiative combines the company’s and the quality of CR reporting. commitment to environmental protection with sustainable commercial success. Data are collected on the waste and wastewater produced, as well as on energy and water consumption, which contributes

OCEANCARE: PILOT PROJECT WITH to cutting operating costs, making more efficient use of resources and increasing competitiveness. The SUSTAINABILITY POTENTIAL intention is also to devise and systematically implement practical steps that relieve pressure on the environment. Ecoprofit certification is planned for January 2019. Conscious of its responsibility for pre- serving the environment, Gebr. Heinemann joined forces with the marine conservation organisation OceanCare last year, in order to send a clear signal against the

A full review of Gebr. Heinemann’s corporate responsibility activities can be found in the CR Report on the company’s website at: http://www.gebr-heinemann.de/en/Philosophy#csr Watch the video on YouTube ON AIR

Expert interview with Matthias von Randow, Executive Director of the German Aviation Association (BDL) P_36 CORPORATE NEWS

How are things looking for the future of the What needs to be done to ensure high quality Turkey is currently building the largest airport Our final question: What is the thing that you aviation industry? in global aviation despite the dynamic growth? in the world. What about the construction and purchase in Duty Free shops as a special treat? expansion of the major European airports? “Worldwide air traffic is “I fly a lot and usually with Matthias von Randow: Matthias von Randow: “The airlines offer their Matthias von Randow: growing strongly, partly because economic devel- products according to the modular principle: the Matthias von Randow: “We know that extensions hand luggage – in which larger quantities of liquid opments are so good. This is a crucial factor be- entire product range is presented, from the first- are also set to take place in Germany. Two exam- are prohibited, as we all know. That's why I think it's cause transport and economic success are linked class premium product to the low-cost options. The ples: Terminal 3 is being built in Frankfurt, and a great that I can buy gifts like wine or champagne together.” customer can choose according to his or her indi- third runway is planned in Munich. Infrastructure from Heinemann Duty Free and bring them on vidual interest. This breadth leads to the success of development is generally necessary in the trans- board.” What do people expect from air transport a competitive aviation industry.” port sector – but there needs to be a significant today? acceleration of planning. This is also in the inter- Which products contribute on the ground to a ests of the general population! The great majority of Germans say they like to fly. And you also need Matthias von Randow: “Almost 90 per cent of all positive flight experience? Germans have travelled by plane. This includes airports to fly. By the way, the number of people who were satisfied or very satisfied with their last people who fly a lot for work but also people who “What's important is an Matthias von Randow: flight has been consistently over 90 per cent for only go on holiday once a year. What unites them excellent connection to airports, whether it's cars several years.” all is that flying is still something special for them, or long-distance rail travel. Furthermore, we see they find the flight experience interesting and a very big task in making the state-run security beautiful. Air transport connects people with each checks at airports much more efficient. We see other, today just as it did 50 years ago.” great potential there and are ready to participate.”

How are the needs and expectations of travel- Airports, airlines and retailers have common, lers changing – especially with regard to digi- but also differing, economic interests. How can tisation? all three benefit from each other?

“Digitisation has a long tra- Matthias von Randow: Matthias von Randow: “All three benefit from our dition in air transport. Our companies have long passengers having positive travel experiences. been among the pioneers. This became most vis- This starts with attractive flight offers and good Matthias von Randow is Executive Director of ible to travellers with the onset of the internet age connections and also includes transparency, a the German Aviation Association (BDL). Prior – since then, flight bookings over the internet have pleasant stay at the airport and ends only after to his entry into the aviation industry, he worked been just as commonplace as creating boarding safe arrival at the destination. This is the result of passes on mobile devices. The ability to combine the cooperation and the high level of common in- from 1998 to 2008 in the Federal Ministry of offers from many airlines worldwide shows how terests among our companies. That also connects Transport, Building and Urban Development, global and transparent the aviation industry is.” us at BDL.” where he assumed leadership of the management team in 1999. In 2004, he was What ideas will the aviation industry use to en- Several countries, such as the UK and Germany, sure even more satisfaction in the near future? have introduced an aviation tax. What damage appointed head of the policy department for does this cause to air transport? transport. In 2008, he was appointed State “Today we know that users Matthias von Randow: Secretary of the Federal Republic of Germany. of the internet are more and more active on mobile Matthias von Randow: “National charges distort devices. It is important to develop processes relat- competition at the expense of Germany as an avia- ed to this, so that user-friendliness is ensured. In tion hub, whether it's the aviation tax, the financing addition, it will be important for products and ser- of security checks or rigid operating hours at the vices to be to further individualised. Close to the airports. With the Federal Ministry of Transport's customer with tailor-made services – that's what aviation plan, there are a number of suitable pro- ALMOST 90 % OF ALL it's all about. Flying is a modern technology, espe- posals for how general operating conditions can be cially in the sense of faster movement of informa- further improved.” tion in this cross-border network.” GERMANS HAVE TRAVELLED BY PLANE. GLOBAL PRESENCE

Worldwide developments: new strategies, markets, shops and contracts P_40 GLOBAL PRESENCE

Location: Moscow Domodedovo Airport –

Moscow Moscow International Terminal Size: 7,000 sq m Opening: June 2018

Location:

Location 1: Charleston

Charleston Hong Kong International Airport

Port Canaveral / Florida Tel Aviv

Mobile Tel Aviv (2 shops on board Carnival Mobile Size:

Port Canaveral 8 shops, about 1,000 sq m in total Liberty of Carnival Cruise Line) Port Canaveral

Hong Kong Opening: Size: Hong Kong 18 December 2017 (2 shops), in total 299 sq m 12 February 2018 (3 shops), Opening: April 2018 (2 shops), January 2018 May 2018 (1 shop)

Location 2: Mobile / Alabama (3 shops on board Location: Carnival Fantasy of Carnival Cruise Line) Ben Gurion Airport Tel Aviv (Joint Venture with James Richardson) Size: in total 249 sq m Size: 7 shops, 4,000 sq m in total Opening: February 2018 Opening: Start of joint venture: 1 January 2018 Location 3: Charleston / South Carolina (3 shops on board Carnival Ecstasy of Carnival Cruise Line) Size:

in total 249 sq m Gold Coast Opening: Gold Coast March/April 2018

Sydney Sydney

Location 1: Sydney (1 shop on board Carnival Spirit of Carnival Cruise Line) Size: 424 sq m Opening: TENDER WINS June 2018

Location 2: 2017 Gold Coast Airport (2 shops) Size: 1,400 sq m Opening: October 2018 P_42 GLOBAL PRESENCE

EXTENDED SUPPLY CONTRACTS

Ireland Location: Shannon Airport Customer/Contract partner: Shannon Airport Guernsey Location: Guernsey Airport Customer/Contract partner: Wine and Beer Importers Guernsey SUPPLY CONTRACTS Denmark Location: Billund Airport Customer/Contract partner: Billund Lufthavn A/S 2017 Russia Location 1: Moscow Vnukovo Airport Customer/Contract partner: Aero Trade LLC

Location 2: Yuzhno-Sachalinsk Airport NEW SUPPLY CONTRACTS Customer/Contract partner: Aero Trade LLC

Location 3: Krasnojarsk Airport Turkmenistan Mongolia Customer/Contract partner: Aero Trade LLC Location: Ashgabat Airport Location: Ulaanbaatar (diplomatic shop) Customer/Contract partner: ITC GmbH Customer/Contract partner: Imperial DF Location 4: St. Petersburg Central Station Customer/Contract partner: Aero Trade LLC Russia Kazakhstan Location 1: Volgograd Airport Location: Kazakh-Chinese border (2 border shops) Location 5: Arkhangelsk Airport Customer/Contract partner: OOO Globus Treid Customer/Contract partner: Alatau DF Customer/Contract partner: Aero Trade LLC

Location 2: Port of St. Petersburg Mauritius Location 6: Tjumen Airport Customer/Contract partner: Baltic Sea Touristic Location: SSR International Airport Mauritius / Rodrigues Customer/Contract partner: Aero Trade LLC Customer/Contract partner: Mauritius Duty Free Paradise Ukraine Location 7: Ulan Ude Airport Location: TRU Ukraine / Zaporizhya Airport Sierra Leone Customer/Contract partner: Aero Trade LLC Customer/Contract partner: Travel Retail Ukraine Location: Lungi International Airport Customer/Contract partner: IDFG – Intercontinental Duty Free Group Location 8: Pulkovo Airport (LED) Domestic Terminal – P&C Shop Italy Customer/Contract partner: Location 1: Ferry/Cruise liner "Princess Anastasia" Travel Retail St. Petersburg (between Stockholm and St. Petersburg) Customer/Contract partner: Ligabue Mongolia Location: Ulaanbaatar (diplomatic shop) Location 2: Ferry/Cruise liner "MS Hamburg" Customer/Contract partner: DFCO Mongolia Customer/Contract partner: Ligabue Ukraine Location: TRU Ukraine/shop at the Seaport Odessa, EXPANDED SUPPLY CONTRACTS Border shop Goptovka Customer/Contract partner: Travel Retail Ukraine

Poland Estonia Seychelles Seychelles International Airport Victoria, Mahé Location 1: Szczecin – Unity Line Ferries Location: Tallinn Airport Location: Seychelles Trading Company Customer/Contract partner: Baltona S.A. Customer/Contract partner: Baltona S.A. Customer/Contract partner: Norway Location 2: Katowice Airport Oslo, Color Line Ferries Customer/Contract partner: Baltona S.A. Location: Customer/Contract partner: Color Line Location 3: Wroclaw Airport Customer/Contract partner: Baltona S.A. P_44 GLOBAL PRESENCE

Russia Latvia Location 1: Moscow Sheremetyevo Airport, Location: Riga Airport, Best Seller & Kids Shop Terminal E Fashion Shop Size: 183 sq m Size: 110 sq m Opening: September 2017 Opening: August 2017 Hong Kong Location 2: Moscow Sheremetyevo Airport, Location: Hong Kong International Airport – Terminal E VIP Galaxy Lounge Sweet Dreams by Heinemann (Midfield Concourse) Size: 50 sq m Size: in total 120 sq m SHOP OPENINGS Opening: August 2017 Opening: December 2017 Location 3: Moscow Sheremetyevo Airport, Lithuania Terminal D ACC Shop Location: Kaunas Airport (2 Shops) 2017 210 sq m Size: Size: 370 qm August 2017 Opening: Opening: 12 July 2017 Moscow Sheremetyevo Airport, Location 4: Australia P&C expansion Location 1: Sydney Airport – Hermès Boutique Germany Ukraine Size: 831 sq m about 120 sq m October 2017 Size: Location: Flughafen Berlin-Schönefeld – Location: Kiev Zhuliany Airport Opening: Opening: March 2017 Heinemann Young Shop 106 sq m Size: Turkey 160 sq m 27 January 2017 Sydney Airport – Longchamp Boutique Size: Opening: Istanbul Airport – Arrival 4 Location 2: February 2017 Location 1: in the Luxury Boutique Area of Heinemann Tax & Duty Free, Opening: 144 sq m Location: Kiev Zhuliany Airport Size: Departure Terminal 1 April 2017 Location: Frankfurt Airport – Victoria’s Secret (Landside, T1B) Size: 88 sq m Opening: Size: 97 sq m 68 sq m 27 January 2017 Size: Opening: Izmir Airport – Arrival 2 Opening: February 2017 January 2017 Location 2: Opening: 350 sq m Location: Kiev Zhuliany Airport Size: August 2017 Location: Frankfurt Airport – Bulgari Boutique, Size: 194 sq m Opening: Ferragamo Boutique (T1B) Opening: 5 July 2017 Tunisia Size: in total 117 sq m Kiev Zhuliany Airport Monastir Airport Main Shop Opening: May 2017 Location: Location: Size: 357 sq m Size: 680 sq m Location: Mein Schiff 6 Opening: 16 November 2017 Opening: May 2017 Size: in total 550 sq m Zaporizhya Airport Opening: June 2017 Location: Size: 40 sq m Norway Opening: 25 November 2017 Location: Oslo Airport – TV Fashion North Moldavia Size: in total 129 sq m Chişinău Airport Opening: February 2017 Location: Size: 350 sq m Location: Oslo – Duty Free Departure East (Re-Opening) Opening: 25 December 2017 Size: in total 2,044 sq m Slovakia Opening: April 2017 Location: Bratislava Airport Non-Schengen Location: Oslo Airport – Satellite Shop (Transit) Size: 160 sq m Size: in total 300 sq m Opening: March 2017 Opening: October 2017 Slovenia Location: Bergen Airport – TVS Shop T3 Location: Ljubljana Airport Non-Schengen Size: in total 230 sq m Size: 37 sq m Opening: August 2017 Opening: October 2017

Location: Bergen Airport – DFS Shop Arrival T3 Hungary Size: in total 860 sq m Location: Budapest Airport T2B Non-Schengen Opening: August 2017 Size: 309 sq m Opening: April 2017 EXTENDED CONCESSIONS

Denmark Location: Copenhagen Airport Size: 3,500 sq m Extended until: February 2023

Lithuania Location: Vilnius International Airport Size: 6 shops, in total 1,569 sq m Extended until: 2023 “In 2017, our top retail locations developed positively – and we were able to expand them by one. In August, together with our joint venture partner James Richardson, we won the license to operate Duty Free shops at Ben Gurion Airport in Tel Aviv. The JR-Heinemann joint venture has been jointly running the shops in the T1 and T3 terminals since 1 January 2018. With this, Gebr. Heinemann has entered a new, exciting market and gained a business location that, after Istanbul and Oslo, will be our third largest in terms of retail sales.

In Norway, we completed the intensive reconstruction and expansion of our shops in Oslo, Bergen, Kristiansand, Stavanger and Trondheim, which began two years ago. With our joint venture TRN, we expanded our shops during the terminal enlargements in Oslo and Bergen in 2017 and created shopping experiences that are expected to surprise Norwegian and international passengers and exceed their expectations. A new generation of Duty Free shops is now welcoming customers to the Norwegian airports, whose passenger numbers are growing steadily.

In Istanbul, together with our Turkish partner Unifree, we have further developed the marketplaces of the future at Istanbul New Airport. Here we will be able to offer a brand mix – especially in the luxury segment – which is currently not available at any other international airport in this constellation. WE CREATE INDIVIDUAL And in Cruise Retail, we set a successful benchmark in 2017: with an innovative, MARKETPLACES ALL OVER cross-category shop design with the character of an open marketplace, we went on board the 'Mein Schiff 6' this summer. This is a plan that we want to put in place on THE WORLD. other cruise ships in the future as well.”

Raoul Spanger, Executive Director Retail & HR MAZEL TOV!

Joint venture of Gebr. Heinemann and James Richardson wins tender in Tel Aviv P_50 GLOBAL PRESENCE

At Ben Gurion Airport in Tel Aviv, the name James Richardson and the JR / Duty Free shops have been associated with a highly popular travel retail shopping experience for Israelis and visitors alike since 1988. In 2017, James Richardson and Gebr. Heinemann set up the joint venture JR-Heinemann Duty Free Limited Partnership, which put in a joint bid as part of the new tender for the concession for confectionery, tobacco, spirits, perfumes and cosmetics. It was a great success and on 9 August the partners won a ten-year contract. This has been in effect since 1 January 2018 and has one clear aim: to expand Duty Free business at the airport and give travellers an even better shopping experience.

Gebr. Heinemann and James Richardson each hold 50 per cent of the joint venture. The Hamburg- based travel retailer is to be the exclusive supplier for the international brand selection. Heinemann will also be involved in the operation of the joint venture itself. The JR/Duty Free brand will stay, as it has an excellent name recognition factor of 90 per cent in Israel. The new concession comprises the Duty Free Main shop, four satellite shops in Terminal 3, one satellite shop in Terminal 1 and a pharmacy, which is not supplied by Gebr. Heinemann.

TWO BIG FAMILY COMPANIES IN TRAVEL RETAIL

Gebr. Heinemann and James Richardson, which is based in Australia, are the only two large family- owned companies in the international travel retail sector. At Ben Gurion Airport they are now pooling their expertise. When the contracts were signed, Garry Stock, Chairman of James Richardson, said:

“James Richardson has a long and proud history in Israel and we are thrilled to be extending this in the future. Heinemann will bring know-how gained from its presence in many European and other markets to further strengthen P_52 GLOBAL PRESENCE

the JR Israel business.” Raoul Spanger, Executive Director Retail & HR at Gebr. Heinemann, added: “No one knows the Israeli travel retail market better than James Richardson. We are very happy, and confident that together we can further develop the business at Ben Gurion.”

TEL AVIV WILL BE THE THIRD-LARGEST LOCATION BY RETAIL SALES FOR GEBR. HEINEMANN, AFTER ISTANBUL AND OSLO

The joint venture started preparing for operations in Tel Aviv immediately after winning the tender. In meetings with the Purchasing department, the first steps were taken to define the brands for the P&C and LTC selections for the first quarter of 2018, whereby tobacco will not be supplied at first. Richard Hoyer,

Director Global Subsidiaries at Gebr. Heinemann and project manager for Tel Aviv, explains: “We invited the purchasing teams from James Richardson to visit us at our headquarters in Hamburg and shortly afterwards invited them to Norway, where we visited the Heinemann Duty Free shop in Oslo. In Tel Aviv we have a similar sales volume and the same challenge – to bring a large volume of stock into the shops as quickly as possible. So in Oslo we looked at the logistics processes, including the supply chain and goods deliveries, as well as operations processes such as check-out, sales LOOKING AT 2018: and category management. In addition, our shops there present the latest in shopfitting, which is important because the In the first quarter, test deliveries were sent to Ben Gurion Airport from the Gebr. Heinemann logistics centre in Hamburg-Allermöhe. The plan is to supply main shop in Tel Aviv is also due for a refit in the second half of 2018.” Tel Aviv will be the third-largest site for Gebr. the shops with all the P&C and L(T)C product groups by the end of 2018. At the Heinemann by sales volume, behind Istanbul and Oslo. But the visit to Oslo was also interesting for the same time, the look of the main Duty Free shop will be largely redesigned. new partners for other reasons, because Gebr. Heinemann’s operations there are based on a similar joint venture model. Their working methods were therefore able to be illustrated using examples of best practice.

HIGH "SPEND PER PAX" IN TEL AVIV AND FURTHER GROWTH IN PASSENGER NUMBERS EXPECTED

Over 17 million passengers ("total pax") travel through Ben Gurion Airport every year and the number is growing, not least due to the implementation of the Open Sky agreement in 2012, which liberalised air traffic between Israel and the EU. Lower fares are one of the results. This is partly why the airport modified Terminal 1, which is used by low-cost carriers, in spring 2017. Overall, more than 100 airlines take off and land at Israel’s biggest airport. Around 70 per cent of passengers are from Israel and 30 per cent are tour-

ists. “Spending in the airport shops per head, or ‘per pax’, by Israeli customers is around three times higher than for other passengers,” says Richard Hoyer. “That is because the saving compared with domestic prices is still very high. Another thing is that more than half of travellers shop when departing, but then collect their purchases from a pick-up point in the arrivals area when they return. This means the average spend is high. We expect a further increase in passenger numbers and therefore further sales growth.” NEW WAYS IN NORWAY

Extended retail space for a new generation of Duty Free shops in Norway Passenger numbers at Norwegian airports are rising continuously, and TRN (Travel Retail Norway) is there to whose digital displays show countryside scenery as well as the shop’s special offers, all set off by plenty of blond ensure a suitable retail experience. The joint venture between Gebr. Heinemann and Norse Trade is the leading wood. This "sense of place" is also apparent from the product range. Travellers simply adore the concept, says operator of Duty Free shops in Norway and in the past two years has completed an intensive refit and expansion Gordana Schiel, Team Leader Retail Sales at Gebr. Heinemann: “ Together with our Purchasing department, we have of its locations in Oslo, Bergen, Kristiansand, Stavanger and Trondheim. In 2017, its activities focused on the put together a range that maintains a strong focus on Norwegian products. We are seeing continuous sales growth in our classic shops at the expansive airports in Oslo and Bergen. After adding retail space the size of a football pitch and a new range. Local products are even up to 30 per cent.” From the Perfume & Cosmetics section, travellers are often picking up generation of Duty Free shops, TRN is now fit for the future in Norway. products from the lifestyle brand Bad Norwegian, while in LTC, the chewing tobacco Snus, Norwegian spirits and local beer specialities are popular. The largest category in the Departure shops is Perfume & Cosmetics. Sets On 27 April 2017, the new Oslo Airport was officially opened following its expansion, which began in 2011. The flag- and items that would make perfect gifts are showcased in a special "gifting area." Premium highlights in terms of ship project of the state-owned operator Avinor has almost doubled its total floor area to 265,000 square metres design and architecture are used to optimally display high-priced products in the wine, spirits and confectionery and has long-term capacities for up to 32 million passengers per year. TRN has seven shops at the airport under area. the Heinemann brand, including the world’s largest Arrivals Duty Free shop. As part of the terminal extension,

TRN completely refurbished and expanded its existing Departures Duty Free East and opened an additional Florian Seidel, Director Retail at Gebr. Heinemann, comments on the joint venture: “It’s the perfect combination Departures Duty Free shop in the new North pier. and structure for the Norwegian market: With TRN and its 1,900 committed employees, we have the best possible setup for our operation in Norway. We have been able to expand our business over the past few years and thus made sure that we are ahead of RELAXED SHOPPING EXPERIENCE, HIGH-QUALITY DESIGN, LOCAL INFLUENCE the development in passenger numbers.” Oslo Airport has come a long way as an air traffic hub, and this can also be seen in the increasing number of transfer passengers. Their proportion has gone up to 20 per cent in the past few The two Departures Duty Free shops represent the next generation of shop design, offering an innovative shop- years. As a result of this, the passenger guidance has changed and the otherwise optimally located shops can’t ping experience that takes both Norwegian and international travellers by surprise, exceeding their expectations. be reached by all travellers anymore. To offer a shopping experience to all passengers, TRN has opened an addi- Customers visiting the shops (which span a total of 4,500 square metres) are met by a relaxed atmosphere and tional Heinemann Duty Free shop in November 2017 that covers 300 square meters in the Non-Schengen area. design elements that evoke the nature of Norway: lamps in the shape of trees and large, stylised rock formations, P_58 GLOBAL PRESENCE

NEW DUTY FREE AND TRAVEL VALUE SHOPS AT BERGEN AIRPORT

Terminal 3 at Bergen Airport was extended in 2017, doubling the airport’s future capacity to a maximum of 10 million passengers. TRN has opened two shops in the terminal, which handles all arrivals and domestic departures. Previously, there was only one shop for both departures and arrivals. Now, all passengers arriving at the new terminal are met by a Heinemann Duty Free Arrivals shop covering almost 900 square metres, which, in addition to the extensive perfume and cosmetics range and many regional branded products, also offers 430 different wines and nearly 60 different types of beer. Around 90 per cent of passengers arriving in Bergen are Norwegian, so the product range at this site has a strong local focus. TRN has also designed a new Travel Value shop in Terminal 3.

WAREHOUSE AREA EXPANDED, INTRODUCTION OF HEINEMANN & ME PLANNED

“At our Norwegian locations, we are now optimally prepared to satisfy demand for the duration of the contract, in antici pation of healthy growth in passenger numbers,” states Florian Seidel, summarising the completion of the refit and expansion work in Norway. At the end of 2017, TRN has a shop area of some 16,740 square metres, which is about 7,000 square metres, or one football pitch, more than previously. Looking ahead to 2018, TRN will expand its warehouse at Oslo Air- port and ramp up the implementation of the driverless transport system, which has been successfully used to supply the Arrivals shops. The roll-out of the customer loyalty programme, Heinemann & Me, is also planned, starting with the shops at Oslo Airport. 16,740 SQUARE METRES OF SHOP AREA S_61 GLOBAL PRESENCE

Trondheim Airport Duty Free Travel Value

EMPLOYEES SHOPS

Bergen Airport Duty Free Arrival 1,900 16 Duty Free Departure Travel Value

FLIGHT

Trondheim Trondheim GH2017

TRAVEL RETAIL Oslo Airport Duty Free Arrival Duty Free Departure East Duty Free Departure North Duty Free Departure Non-Schengen NORWAY Bergen

Bergen Travel Value Fashion East Travel Value Fashion North Travel Value P/C West

Oslo Oslo

Stavanger

Stavanger Kristiansand Airport Duty Free

Kristiansand TRN opened its first Duty Free shop at Kristiansand Kristiansand Airport in late December 2004. Today, the company is the leading Duty Free operator in Norway, with Stavanger Airport 1,900 employees and 16 shops at the airports in Duty Free Main Oslo, Bergen, Kristiansand, Stavanger and Trond Duty Free Arrival heim. Gebr. Heinemann and Norse Trade each Travel Value Fashion hold a 50 per cent stake in the joint venture. Florian Seidel, Director Retail at Gebr. Heinemann, has been a member of the Board of Directors since 2017; the Board is chaired by Raoul Spanger, Executive Raoul Spanger Florian Seidel Director Retail & HR at Gebr. Heinemann. CONSTANTLY NOBLE IN ISTANBUL

Istanbul New Airport: Many letters of intent for luxury brand shops already closed P_64 GLOBAL PRESENCE

Gebr. Heinemann and its Turkish partner Unifree The main Duty Free shops will be situated in zones Laurent, Bottega Veneta, Hermès, Ferragamo, There is also a joint working group with the airport’s

continue to design the marketplaces of the future at four and six in the departure area. “More than every Bulgari and Loro Piana – Istanbul New Airport will foodservice experts, who will operate these areas Istanbul New Airport (INA). In addition to the world- other departing passenger will be transferring. Istanbul offer a collection of luxury brands that cannot be themselves. Representatives from catering, retail class Duty Free range under its own management, New Airport will act as the central hub for the global route found at any other international airport in the world. and Duty Free take part in this interdisciplinary Unifree is responsible for centre and lease man- network, especially for Turkish Airlines,” adds Aydin working group. Together they elaborate concepts, agement and for interacting with the F&B company Celebi, responsible for Duty Free shop space COORDINATION OF PRODUCT RANGES floor space and the overarching design to ensure a

for INA. A total of 53,000 square metres of retail planning at Istanbul New Airport. “When we look at AND CATEGORIES compelling total package. Because when designing space will be available in perspective. the current figures for Atatürk Airport, we feel optimistic the marketplaces of the future, it is vital to focus on because the airport reported growth in passenger numbers Sinan İşçimenler, Business Development Director people. “We are on schedule and are getting ready for the shop- of 8.47 per cent in the year 2017 versus previous year.” and responsible for overall centre and lease fitting process, due to start in February 2018. Both we, management (CLM): “The LOI give a good idea of how as the Duty Free operator, and the tenants are looking The acquisition of tenants for the high-end design- diverse the range of luxury goods will be. Now we will be forward to the beginning of this important phase – when er shops has also been highly successful. Letters coordinating the product ranges and categories between the we can start to fit out the interior of the terminal,” says of intent (LOI) have been signed with Louis Vuitton, centre and lease management and the Duty Free range.” Pia Schlottmann, Project Manager Istanbul at Dior and Prada. Final contracts will be negotiated Gebr. Heinemann. in the months ahead. Combined with the boutiques Gebr. Heinemann is working on the large-scale operated by Unifree – Céline, Gucci, Fendi, Saint project Istanbul New Airport with an extensive team of specialists in architecture, retail, logistics, business development, marketing, HR, IT and

process management. “Intensive workshops are held on site every two weeks. At the same time, a video-conferencing system specially set up for the project ensures that the participants from Unifree and Gebr. Heinemann can also see and hear one another across distances of thousands of kilometres,” says Project Manager Pia Schlottmann. “But in addition to the functional requirements, the particular local conditions also play an important role. This is why all the project staff were prepared for their stint abroad and for working in Turkey by means of intercultural training courses and security training.” APPSOLUTE FUN

Berlin-Schönefeld creates the world’s first augmented reality discount promotion in airport retailing P_68 GLOBAL PRESENCE

Customers chasing red balloons through the Heinemann Duty Free Shop, and they received a discount for this? Yes! During last year’s pre-Christ- mas season, Gebr. Heinemann introduced for the first time – and thus being a forerunner in airport retailing – an Augmented Reality promotion in one of their shops. Online- and offline shopping merged into a holistic

shopping experience. “We offered passengers in the capital a unique shopping experience on a completely new level,” says Steffen Jopp, Managing Director of Heinemann Duty Free in Berlin. “It is our ambition to create a playful insight into the virtual world for our international customers. We have our finger on the pulse THE RULES OF THE GAMES of new developments with this app and are building bridges between the virtual and the real world.” The app was developed by the Hamburg-based company For the promotion, a lively staging area was cre- SchönenbergFilm for Heinemann Duty Free. Gebr. Heinemann was sup- ated in the Schönefeld Duty Free shop. Promoters ported by Flughafen Berlin Brandenburg GmbH (FBB) during the imple- encouraged customers actively to join in the game, mentation of the idea. explained the rules and provided the customers with an iPad needed to participate. Here, the red balloons were superimposed over the real image of the shop. Within 30 seconds, the customers had

* No cash equivalent available. Redeemable for all travellers to burst as many of the balloons as possible by Secure your 10 % with a valid boarding pass with * the exception of all airport staff. Only valid on the campaign "virtual contact" with the iPad. The more balloons discount now! date. Only one coupon per Discover a huge selection of customer and purchase. Not valid for duty-paid tobacco they "nabbed", the higher the value of the cou- perfumes, cosmetics, spirits, products, beverages in return- sweets and much more! able bottles, newspapers, magazines, books and shopping pon they won. Participants were able to receive a bags. Not applicable to price- Simply redeem this coupon reduced goods and may not be and save 10 %. used in combination with any discount of up to 20 per cent on their purchases. other discount promotion. Valid in all H Duty Free

Only valid on the campaign shops in Berlin-Schönefeld. Every 1,000th balloon won an extra gift card valued

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Passengers embrace the new shopping concept on "Mein Schiff 6" P_72 GLOBAL PRESENCE

It was a glamourous gala in the port of Hamburg on 1 June 2017 when TUI Cruises celebrated the naming of "Mein Schiff 6" with a fireworks display against the spectacular backdrop of the Elbphilharmonie. People’s enthusiasm for cruises is undimmed, and the thousands of spectators and guests that evening are not the only evidence: the growth market with some 25 million passengers a year is clear proof. Onboard shopping is a key source of revenue for the shipping companies. For "Mein Schiff 6", Gebr. Heinemann Cruise Liner GmbH has developed an innovative, cross-category shop concept with the character of an open marketplace. A conversation with Ricarda Frentzel-Beyme, Director Cruise Liner, about the benchmark in cruise retail, which the company also plans to take on board other cruise ships.

WHY A NEW SHOP CONCEPT?

“On board it is important to keep the customers entertained. Retail there goes way beyond the classical sales process. Passengers mostly spend seven to ten days on a cruise ship. During the cruise they keep coming back to our shops, which are on the way to the theatre and the restaurants. This means we can develop a relationship with them, but we also have to make them want to spend time and shop in our boutiques. So our thinking goes beyond the limits of the shop.”

INNOVATION PLUS EMOTION, YOU COULD SAY?

“The passengers are on holiday; we want to intensify this feeling of well-being. The previous look and feel of the shops was rather clean and practical. Now the design concept is integrated into the architecture of the ship. The flooring is coordinated, for example, so the corridors blend seamlessly into the shops. There are no more doors or thresholds that get in the way. The open character of a marketplace makes the shops much more accessible. Windows have also been installed in the shopping area for the first time, which reinforces the INTERVIEW WITH feeling of being in a boutique on the high seas. Comfortable seating in front of the windows RICARDA FRENTZEL-BEYME and the shops encourages people to stay a while.” WHAT ROLE DOES THE PRESENTATION OF THE MERCHANDISE PLAY? Director Gebr. Heinemann Cruise Liner “One new feature is that we now have a cross-category concept. Our aim is to inspire passengers with a harmonious look. We win them over as customers by showing them the right combinations – so outfit plus accessories and perfume. Visual merchandising also means that the articles on display change during the cruise. On board the ship our shopping selection has to compete with the programme of readings and other events. So activities that involve the guests are important, like make-up sessions or fashion shows. Cross promotion also enables us to network with other departments on the cruise ship. That includes whisky tastings at the bar, for instance, with the whisky available for purchase in our shops.”

HOW DID THE WORK WITH TUI CRUISES GO?

“TUI Cruises had the basic idea of designing the shops on "Mein Schiff 6" as lounges, with wood and metal. We developed the retail concept to go with that. The idea of the marketplace is not new for us – we already use it in Heinemann Retail at airports. So we have the experience and the standard from our own shops and can generate synergies from that.” P_74 GLOBAL PRESENCE

WHAT OTHER EXPERTISE DID GEBR. HEINEMANN CONTRIBUTE ON BOARD "MEIN SCHIFF 6"?

“In addition to the retail design and the architecture, we brought our knowledge of visual merchandising and the right brands for the product range. The passenger structure on board cruise ships is getting increasingly complex – capacities are growing and so is the variance in terms of income, interests and age groups. We profit from our experience in global markets and know which customers buy what. Gebr. Heinemann supplies all product groups and we have very good logistics, so uninterrupted supplies are always guaranteed. The Cruise Liner team from headquarters works closely with the ship and goes on board regularly to ensure that our high standards are met.”

SO YOU’VE SET THE BENCHMARK – WHERE DOES IT GO FROM HERE?

“We will be implementing the marketplace concept on the new "Mein Schiff 1" and ‘Mein Schiff 2’, which will replace two older vessels of the same name in 2018 and 2019, as well as on two expedition ships operated by Hapag-Lloyd.”

 wholly owned subsidiary  15 decks of Gebr. Heinemann  1,267 cabins  own retail  2,534 passengers  on 5 ships from TUI Cruises,  530 square metres of shop space 4 from Phoenix, 3 from Hapag-Lloyd Cruises  5 shops  global routes  routes: Mediterranean, North  all product groups: accessories,

MEIN SCHIFF 6 and Central America, Caribbean watches & jewellery, fashion, perfume & cosmetics, LTC GEBR. HEINEMANN HEINEMANN GEBR. LINER GMBH CRUISE “Gebr. Heinemann Distribution has been growing well over the past year and has laid a foundation from which it can continue to hold its strong position in a competitive market. The new distribution brand and its "Supplying Success" claim stand for consistently outstanding quality, and represent a promise to our customers that our services will make a lasting contribution to their success. A good example of this is the best-practice case we recently implemented with our long-term customer, Nuremberg Airport. Our trusting relationship with them and our expertise in the market and region enabled us to identify potential for further, mutual growth and successfully take advantage of it.

We have achieved strategic growth in the Eastern Europe & Central Asia and Benelux & Africa markets in particular. Just two examples of this are the contract extension we have agreed at Vilnius International Airport, and the tender we have won to become the exclusive Duty Free operator at Moscow-Domodedovo Airport's new international terminal with our joint venture Travel Retail Domodedovo. On the Indian Ocean, an important market for Gebr. Heinemann Distribution, we have agreed an exclusive supply contract with Mauritius Duty Free Paradise.

In the airline market, we have secured key supply contracts with Gate Retail and Ryanair. Gebr. Heinemann is a company with a global focus, and the first-class infrastructure we have built and our international expertise we have gained as a result have been key to winning these contracts where customers want to be able to supply WE CONTRIBUTE numerous service stations at international airports reliably.

TO OUR CUSTOMERS' Our global commitment has also been key to the success of a new venture for us: SUCCESS. the Gebr. Heinemann subsidiaries in the USA and Australia and the Hamburg headquarters won the global tender for Carnival Cruise Line, which will see our company entering the American and Australian cruise market for the first time in 2018. This represents an exciting growth market for us, and one in which we will continue to invest.”

Peter Irion, Executive Director Distribution CLAIMING SUCCESS

Launching the distribution brand with the claim "Supplying Success" P_80 GLOBAL PRESENCE RELIABLE, EFFICIENT, HUMAN, HANSEATIC

It provides clear positioning The new distribution brand connects against the competition, its identity to that which distinguishes gives a performance promise the company and makes it unique – and bundles everything that and what it is prized for in the travel- retail industry. The brand values Gebr. Heinemann Distribution "reliable, efficient, human, Hanseatic" offers its customers: the dis- express this. The performance tribution brand with the claim promise is: We want to make a "Supplying Success" was lasting contribution to our customers’ launched in 2017. success. The core values alongside the performance promise and the "Supplying Success" claim, are what constitute the brand. Product range and services – everything from a single source, tailor-made and aligned with the customers’ needs – that is what the Gebr. Heinemann Distribution stands for. It provides its customers with much more than service and HANSEATIC creates added value for them. Its wide range of We stand by our word. services includes the individual and optimal assortment of product ranges for all distribution channels, effective marketing measures, state-of- RELIABLE the-art tailor-made architecture solutions and much We are your reliable partner. more. However, a market analysis had shown that Today and tomorrow. the Distribution was presenting its customers with a different image and a different service depending HUMAN on the sales division and staff involved. With the We care. new brand, the Distribution department now creates a uniform quality. The brand claim "Supplying Success" clearly communicates the

company's distribution strengths, thus ensuring EFFICIENT unique positioning in the market. “We want to become We set standards in service even better with passion and commitment, to inspire and logistics. our customers and contribute to their success,” says Peter Irion, Executive Director Distribution at Gebr. Heinemann. P_82 GLOBAL PRESENCE

BRINGING THE BRAND DESIGN AND IMPLEMENTATION: TO LIFE THE DISTRIBUTION DEPARTMENT SHARPENS ITS PROFILE

The employees of Gebr. Heinemann Distribution The claim "Supplying Success" is a performance promise which is directed to internal operations just work together to consistently implement the perfor- as much as it is to customers. In the summer of 2017, the first working groups started, led by the sales mance promise both internally and externally. Each directors and with the involvement of the Human Resources department. The overarching topics of the and every one of them is an ambassador for the workshops are the optimisation of the customer and brand images, the target group-specific revision of brand and brings it to life. The official starting shot services and the development of a B2B communication platform as a digital basis for internal and external for the new brand was given by Peter Irion, the collaborative work. Sales Directors, Markus Ettlin, Director of Market- ing, and Prof. Dr. Ing. Franz-Rudolf Esch, External Brand Consultant, at the beginning of June 2017 As Organisational Development Manager at Gebr. Heinemann, Lene on the Distribution Day in Warnemünde, which Agne is supervising the process of the internal implementation of the was attended by around 170 employees. "The brand. She says: “In the Distribution department, we have made what we Extra Portion of Distribution" handbook, prepared stand for clearer – made it tangible. This has been received enthusiastically by the in-house Gebr. Heinemann advertising across all sales divisions. It provides motivation and a sense of shared identi- agency Terrahe, summarised the themes of the ty among the employees. Now everyone is being called upon to add life to the day and work packages for the participants. The brand. In the sales divisions, joint workshops are carved out to show what meeting was all about providing information and brand values and guiding principles mean for each employee in their daily work was at the same time the kick-off for participants' and how these values can be implemented.” joint work on profile-raising and concretisation of the distribution brand in the coming months.

In the following weeks, colleagues from head Peter Irion is pleased with the successful start-up phase: “ quarters and logistics centres were involved It is the first time that all of us – all sales directors and through a roadshow. The brand was presented to all employees in the Distribution department – have worked together on our identity and this experience is very enriching suppliers in autumn at Gebr. Heinemann's Strategy for all of us. Even across departments, we quickly created a team spirit and received excellent feedback. Together we are ” The initial spark has been given, the rails have been laid in the Day. The customers got to know it at an exclusive strong and will lead the brand to success. direction of the future, everything is on the move – the new brand with the claim "Supplying Success" is a event during the TFWA World Exhibition in Cannes daily reality in the Distribution department and can be experienced by customers. and at November's three-day Marketing Summit at the Hamburg company headquarters. P_84 GLOBAL PRESENCE

Inspire with a clear identity. Peter Irion, Executive Director What is changing for the customers? Distribution, and Markus Ettlin, Director Marketing, Peter Irion: "We will be able to look after our customers even more professionally, offer them even better ideas and be able to give them even better advice – and, of course, we will underline talk about the path to the brand and the idea behind it. our personal, familial approach."

Markus Ettlin: "Digitalisation in cooperation is also an issue. This will make us even more Why is there now a distribution brand? efficient. For success, we need a transformation from analogue to digital."

Peter Irion: "We need an identity. We want to show what the Distribution department of Gebr. Peter Irion: "We are working on a B2B platform for this. In addition, we are optimising our Heinemann stands for. Previously there were six sales divisions – six markets which were indivi- services, for example with regard to product range consultation and activity planning. Internally, dually optimised. Now there is a joint mission: we want to achieve a uniform quality." we are also developing uniform analysis tools."

Markus Ettlin: "If a business unit grows as enormously as the Distribution department, then What do you want customers to be saying about Gebr. Heinemann's Distribution department you need to work on the structure and alignment. Clear positioning is important in international three years from now? competition." Peter Irion: "In general: you have genuinely made me more successful! And about every staff What message does the claim "Supplying Success" send to customers? member in our Distribution department: 'It’s a Heinemann!' – as a synonym for quality and success." Peter Irion: "It stands for our performance promise to our customers: We make a sustainable contribution to their success. With our range of services, we are able to do more than our competitors. We do not just focus on the price – we offer much more! This is a self-confident image with which we of course also create an expectation among our customers. Our signal is also that we want to enter into more extensive communication with them than before. We need open collaboration and their willingness to get involved in that. We can only make them more successful if they trust us."

How is the Distribution department positioning itself internally for the new brand?

Peter Irion: "The brand is also a performance promise to ourselves. It works both internally and externally, it connects us as a team and makes us proud. It shows our identity, on which we all – the sales directors and all employees in the Distribution department as well as colleagues from other departments – work together. Optimising the brand image was also a project done alongside the Gebr. Heinemann Marketing department."

Markus Ettlin: "We supported the theoretical derivation of the brand and helped lay the rails for it. Together with the renowned brand strategy consultant Prof. Dr. Franz-Rudolf Esch and the sales directors, we began by developing the brand essence and values: reliable, efficient, human, Hanseatic. The brand articulates what we stand for and how we work. It is based on the DNA of Gebr. Heinemann."

Peter Irion: "Right, it's an evolution, not a revolution! Then we introduced the brand to the employees at the Distribution Day in Warnemünde and invited them to add life to the 'Supplying Success' claim together with us. In Warnemünde, movement was initiated and dynamism and creativity were developed. It was great to see how motivated and how committed all of them are to this topic. A highlight was the newly developed brand song, which summarised the results at the end of the event. It was amazing how enthusiastically everyone participated."

Markus Ettlin, Director Marketing Peter Irion

MAR KE TING SUMMIT 2017

Marketing Summit – Information and Networking for Distribution Customers

Whether on name tags, presentations, champagne glasses or place cards: The brand claim "Supplying compliance. The social highlight of the event was a Success" was spread over every surface at the 2017 Marketing Summit. The new brand was also the maritime evening with over 300 guests. A trade fair occasion for this three-day event, for which the Distribution department had invited its customers to Ham- with 27 suppliers was the conclusion of the Mar- burg at the end of November. More than 180 guests travelled to the official presentation. The Marketing keting Summit 2017. The goal was to showcase Summit was – in keeping with "Supplying Success" – designed to give them ideas and tips on making both major and lesser-known brands and to enable their business even more successful. To this end, the event consisted of various building blocks, which customers to have extensive contact with exhibi- also provided the opportunity to network and make new contacts: In addition to keynotes and talks about tors – to discuss, for example, practical needs and customer orientation, there were also workshops and presentations with a range of practical tips and individual solutions and to bring along fresh ideas. "quick wins" for implementation in guests' own stores. The focus was on topics ranging from product innovations, trends and promotions through to visual merchandising, market research, social media and P_88 GLOBAL PRESENCE

Let us play an active part in shaping change together. Thorsten Repenning, Director Sales Cruises & Ferries

Our success is built on great focus on our customers’ success, on highly competent, motivated and professional people, on efficient processes and systems and on a lot of laughter! John Baumgartner, Director Sales Inflight & Catering

Let us be inquisitive, seek to understand things, and continue as such, so we are motivated to go the extra mile each day. Carsten Menck, Director Sales Airports Europe

We have the chance to set the course together for a successful future. Oleg Zhytomyrsky, Director Sales Eastern Europe & Central Asia

If something is important, we should not wait until it is urgent. Thomas Petermann, Manager Special Projects

Integration is the opportunity to find one’s place. Bernard Schlafstein, Director Sales Eastern Europe & Central Asia TIME LINE FOR PRESENTATION OF THE DISTRIBUTION BRAND

June 2017 Distribution Day, Warnemünde July 2017 Roadshow Hamburg, The digital development of the markets allows consumers to enjoy enormous Headquarters product range diversity and availability. For us, this is a clear opportunity to offer our partners and customers more and more new ideas. October 2017 Tobias Bechinger, TFWA, Cannes Director Sales Bordershops Europe

September 2017 Strategy Day, Hamburg Roadshow at the Hamburg- Allermöhe Logistics Centre November 2017 Marketing Summit, Hamburg December 2017 Roadshow at the Erlensee Logistics Life is about change – and therefore Centre about continuously developing oneself. Stephan van Groningen, Director Sales Benelux & Africa RUSSIA ON THE RISE

Strong sales growth expected on Eastern Europe & Central Asia markets New airport shops, strong border shop business and growth in its joint venture activities: in Russia and the CIS Gebr. Heinemann can look back on a successful 2017. Prior years were difficult, with the depreciation of the rouble putting pressure on the economy, but the company believed in the market and invested in it. That stimulated new business and laid the groundwork for a successful future. Bernard Schlafstein and Oleg Zhytomyrsky, the two Sales Directors responsible for Eastern Europe & Central Asia at Gebr. Heinemann, talk about the development of the Russian and CIS market this year and convey a sense of the potential offered by the introduction of Arrival Duty Free.

The travel market in Russia and the CIS has recovered and again has very positive momentum. How has this had an impact on Gebr. Heinemann’s business?

Bernard Schlafstein: “2017 was a good year for us. In terms of deliveries to shops I am pleased to say the Russia/CIS region was at the same level as 2013, our most successful year to date. Gebr. Heinemann’s retail joint ventures, Imperial Duty Free and Travel Retail Domodedovo, are above target. Our sales are growing faster than average passenger numbers at the airports. Our border shop business in Belarus, Georgia and Ukraine is INTERVIEW also going well. Going forward we believe that in Russia and the CIS we can expect sales growth WITH OLEG ZHYTOMYRSKY AND of over ten per cent in terms of deliveries.”

BERNARD SCHLAFSTEIN What do you think is the reason for this good performance? Directors Sales Eastern Europe & Central Asia Bernard Schlafstein: “The stability of the rouble since late 2016 means that the Russians are generally travelling again. Especially to Turkey and Europe. In July 2016, Russia also lifted the ban on charter flights to Turkey that had been in place for the previous seven months. And so in 2017 we had the first 'real' summer season again, with Russian tourists travelling to holiday resorts such as Antalya and Bodrum.” P_94 GLOBAL PRESENCE

And in Ukraine? 2018 will be another exciting year, with the introduction of Arrival Duty Free.

Oleg Zhytomyrsky: “Business at Kiev Boryspil Airport is performing well, despite the ongoing Oleg Zhytomyrsky: “In December 2016, a new Customs Code provided the legislative foundations for crisis in Ukraine. It is in line with passenger numbers. Ukraine is also opening up – since the Arrival Duty Free in the Eurasian Economic Union. Now we are trying to find retail space for this at all beginning of June 2017, Ukrainians can travel to most EU countries without a visa. In December the international and regional airports and want to open the first shops right at the start of 2018. We 2017, we leased new space for a total of four shops at the second-largest airport in the country, already have areas at Moscow-Sheremetyevo Airport that we are going to convert. We are in talks with Kiev-Zhulyany. In late 2017, we opened a 350 square metre walk-through shop. It is mostly low- the airports, which are very interested in this new model, because Duty Free sales represent a good cost carriers that use this international airport and their passenger numbers are growing fast.” source of revenue. And in fact the purchasing patterns of Russian passengers have changed altogether. Today they are more price-conscious

How would you describe Gebr. Heinemann’s strategy for Eastern Europe & Central Asia? and compare the prices with those on the domestic market. They want a Bernard Schlafstein: “In the Russian market we work with partners who know the local luxury atmosphere and good service – conditions. Gebr. Heinemann has always been far-sighted, even at difficult times; we believed in but not luxury prices. At our sites in the market and so continued to invest. Our joint venture partners appreciate that. This year we Russia, Belarus and Kazakhstan we celebrated the tenth anniversary of the joint venture Travel Retail Domodedovo, in which Gebr. are expecting revenue growth of 18 per Heinemann and Greenway are partners. Today TRD operates 13 shops with a total surface area cent in 2018 with the launch of Arrival of nearly 3,800 square metres at five airports in Moscow, Samara and Yekaterinburg, with annual Duty Free and of 30 per cent thereafter.” retail sales of around 40 million euros.”

So that means growth and expansion are still being pursued. How is that going at the moment?

Bernard Schlafstein: “Our joint venture Imperial Duty Free at Moscow-Sheremetyevo Airport had a particularly strong year. IDF is the main operator at this airport, with a presence at 90 per cent of the retail spaces. In a project running until 2024, we are successively refitting all the shops there and switching to the walk-through concept. We also opened two new shops at Kaunas Airport in Lithuania. In December 2017, our Travel Retail Vilnius joint venture renewed its contract at Vilnius International Airport, where we have operated shops for ten years. And at the end of the year we won the tender for an exclusive Duty Free operator at the new international terminal at Moscow-Domodedovo Airport with Travel Retail Domodedovo.”

Oleg Zhytomyrsky: “Our acquisition of almost 50 border shops in Ukraine, Georgia and Belarus last year enabled us to win a lot of new business. We refitted most of them, introduced a new concept in line with the highest international standards and now supply them with all the categories in the Heinemann range. And now sales are really taking off!” P_96 GLOBAL PRESENCE

RESTRUCTURING OF THE EASTERN EUROPE & CENTRAL ASIA TRAVEL RETAIL DOMODEDOVO BECOMES SALES DIVISION (FORMERLY RUSSIA/CIS) EXCLUSIVE DUTY FREE OPERATOR

On 1 September 2017, Bernard Schlafstein and Oleg Zhytomyrsky took over responsibility from Pierre The joint venture Travel Retail Domodedovo has Viarnaud for the Eastern Europe & Central Asia sales division at Gebr. Heinemann. Pierre Viarnaud won the tender to run exclusive Duty Free managed the department successfully for 16 years and left on reaching retirement age. Bernard Schlafstein operations in the new terminal at Moscow’s and Oleg Zhytomyrsky know the local markets second-largest airport, Domodedovo. The shop is very well, having worked as Area Sales Directors due to open in June 2018 and will cover a total of for many years. Together they now manage the 7,000 square metres. The concession is for seven Eastern Europe & Central Asia department, which years. It will have a main area of approximately has almost 70 employees. They have restructured 4,000 square metres right after security as a walk- the business to meet current market demands with through shop, two areas of around 1,500 square great efficiency and ensure optimal customer metres for fashion and accessories boutiques, service. Each is responsible for a separate last-minute shops and an Arrival Duty Free shop. geographical area. In addition, Bernard Schlafstein also manages finance and certificates and Oleg Zhytomyrsky heads category management for P&C, LTC and F/A as well as trade marketing.

Oleg Zhytomyrsky and Bernard Schlafstein, Directors Sales Eastern Europe & Central Asia

10 YEARS OF TRAVEL RETAIL DOMODEDOVO CONTRACT RENEWED AT VILNIUS INTERNATIONAL AIRPORT Established in 2007, the joint venture Travel Retail Domodedovo (TRD), in which Gebr. Heinemann Vilnius International Airport and Travel Retail Vilnius and Greenway each hold 50 per cent, began by are continuing their successful partnership at the taking part in tenders for the Russian market. In airport in Lithuania’s capital city. Since 2008, Travel 2009, it opened its first shop at Moscow- Retail Vilnius has operated ten shops there under Domodedovo Airport – with just 18 square metres. the brand name Heinemann Duty Free and Travel Today TRD represents a success story, with a Value Vilnius. The Lithuanian company is a wholly team of nearly 300 employees operating a total of owned subsidiary of Gebr. Heinemann. As part of thirteen shops with around 3,800 square metres of Celebrating 10 years of Travel Retail Domodedovo the six-year contract renewal, the shops will be retail space at five Russian airports (Moscow- getting a fresh new design and layout in the months Domodedovo, Moscow-Ostafyevo, Yekaterinburg- ahead. A completely new shopping experience for Koltsovo, Samara-Kurumoch, Moscow- the more than 3.8 million passengers that use Zhukovsky). TRD generates annual retail sales of the airport every year will be created in a larger approximately 40 million euros. Its main site is at space than before. Travel Retail Vilnius previously Moscow-Domodedovo Airport, which is the operated ten shops at the airport, with a total of second-largest airport in Russia. TRD is led by 1,060 square metres. In future there will be six General Manager Sergey Govorushko. It celebrated shops covering 1,500 square metres, including a its tenth anniversary in June 2017. spacious new walk-through shop and a new shop in the non-Schengen area. CATERING PARADISE

Exclusive supply contract with Mauritius Duty Free Paradise signed P_100 GLOBAL PRESENCE

Idyllic beaches, sunshine, a turquoise sea and luxury hotels – Mauritius is a dream destination for many PRODUCT SELECTION AND SERVICES travellers. Every year, more than 1.2 million people visit the island in the Indian Ocean and the number continues to grow. They travel there on their honeymoon, for a round of golf or in search of rest and relax- Goods are generally delivered as sea freight from Hamburg. SSR International Airport is an air traffic ation. The Sir Seewoosagur Ramgoolam International Airport (SSR International Airport) handles around hub for connections to La Réunion and Paris, Sydney, Singapore and other destinations. As well as Air 3.5 million passengers a year. As of May 2017, Gebr. Heinemann is the exclusive supplier to the shops at Mauritius, airlines including Air France, British Airways, Emirates, Lufthansa, Eurowings and Condor also this airport and the airport on the smaller sister island of Rodrigues. Airport operator AML had previously take off and land here. The great majority of visitors to Mauritius and Rodrigues come from France and carried out its own purchasing operations to stock the airport shops via its subsidiary Mauritius Duty Free other European countries such as Germany and the UK, followed by travellers from South Africa, India

Paradise (MDFP) and its joint venture Rodrigues Duty Free Paradise (RDFP). As part of a restructuring, and China. Given this background, the process of selecting the product range was exciting. “We have MDFP then organised a tender to supply the total of four shops (one departure and one arrivals shop per put together a selection with French influences,” explains Stephan van Groningen. “That means lots of perfume and airport), which Gebr. Heinemann successfully took part in. The supply contract was signed for three years skincare. A lot of champagne is sold at the airport, too – Mauritius is, after all, a popular destination for honeymoon couples. in May 2017 and the first product deliveries began in June. In fact, the collaboration is about much more But there is also strong demand for sweets to eat at home from Indian customers, who buy them for their families.” The than supplying the shops with international branded goods in the categories P&C and LTC. teams in the Gebr. Heinemann Distribution department for Benelux & Africa and at MDFP have already

got to know one another after just a few months. “The working relationship is excellent. We have developed a rapport JOINTLY OPTIMISING COMMERCIAL SUCCESS very quickly. The advantage for our customers is that we are very efficient in what we bring to the supply relationship and we also contribute a wide range of services,” says the Sales Director. Looking ahead, Gebr. Heinemann will also be A number of factors convinced MDFP to select the travel retail company from Hamburg: reliability of sup- assuming responsibility for marketing at the shops, organising high-profile promotional events, marketing plies and pricing, outstanding logistics and compliance, provision of services, such as advisory services advertising space, planning and redesigning retail areas and training the shop staff. and support with shop refits, marketing, promotions and training, as well as the development of growth strategies for its business partner. Stephan van Groningen, who as Director Sales Benelux & Africa at THE INDIAN OCEAN IS A MAJOR MARKET FOR GEBR. HEINEMANN DISTRIBUTION Gebr. Heinemann Distribution is responsible with his team for supplying MDFP, describes the first steps in Winning the exclusive supply contract for MDFP in 2017 was a milestone for the team at the Distribution the relationship and how they laid the groundwork for optimising commercial success: “In June, we used test department Benelux & Africa. Stephan van Groningen explains: deliveries to determine the key parameters, such as how long the products take to get from our logistics centre in Hamburg “This supply contract is strategically important to the islands and how customs clearance works in Mauritius. The launch phase then began in the summer and we are now for our presence as a distributor in the Indian Ocean. We had been suppliers on Mauritius before and lost the contract; now gradually starting to deliver P&C and LTC product groups. In late November, we also started supplying fashion and acces- we are back. Along with our customers in the Seychelles, MDFP is the biggest customer in our department. The Indian Ocean sories, though not on an exclusive basis.” is a key market for us. Mauritius is politically and economically stable and has a good infrastructure. Passenger numbers at the airport are growing by up to ten per cent a year at the moment, and we assume that the growth will continue.”

Stephan van Groningen, Director Sales Benelux & Africa ON TOP OF ONBOARD

Gate Retail und Ryanair extend their contracts with Gebr. Heinemann P_104 GLOBAL PRESENCE

Anyone who operates with global success in the complex airline business needs partners with equally DECISIVE FACTOR: FIRST-CLASS INFRASTRUCTURE international expertise. Ryanair, Europe's biggest airline brand, and Gate Retail, one of the world’s leading AND WORLD-WIDE EXPERTISE providers of comprehensive on-board retail solutions for airlines, rely on the Inflight & Catering team of Gebr. Heinemann Distribution for sourcing of their on-board products. Two successful partnerships, both Customers of the Gebr. Heinemann Inflight & Catering team benefit from the first-class infrastructure of of which were expanded in 2017 for a further five years. the globally-oriented company. Central purchasing power, category management and a logistics network which also ensures a secure supply chain combine with expertise in the airline business. Inflight & Catering

RAPID GROWTH: GATE RETAIL manages the entire value and supply chain for on-board sales with account teams who are assigned to each customer and know the markets, airline types and passenger profiles precisely. In total, the Inflight & When the new supply contract comes into force in the spring of 2018, Gebr. Heinemann will be the Catering team supplies optimal assortments to more than 100 catering stations at airports across Europe. exclusive perfume and cosmetics supplier for all 18 airline customers of Gate Retail for the first time, as

well as being distributor for other categories such as accessories, and some other items. “We have been Another service they offer is crew engagement – supporting airlines with incentives, training and additional supplying Gate Retail for five years. During this time, the company has gone through changes and placed a strong focus on material for on-board sales. expansion,” says John Baumgartner, Director Sales Inflight & Catering at Gebr. Heinemann.“Gate Retail is growing fast – we will be delivering goods to them at some 40 catering units across Europe in future.” The Swiss-based EXCLUSIVE SUPPLIER FOR RYANAIR Gategroup, which owns Gate Retail, acquired Inflight Service Group in 2016, thus driving its development towards becoming the largest buy-on-board provider in the world. Xavier Rossinyol, CEO Gategroup, says: “Ryanair has 86 stations all across Europe, and every product we deliver must be relevant to all areas of Europe. That says John Baumgartner, summing up the complex challenge. The fact that “Gategroup believes that combining our excellence in providing superior passenger and retail experience with Heinemann’s is something only we can do,” Gebr. Heinemann is the right partner for this has been proven by the Hamburg-based company: Europe's network and expertise in perfume and cosmetics will deliver a strong offering to our airline clients. This joint and flexible biggest airline brand, with 129 million passengers in 2017, has now agreed to extend the exclusive supply approach to market in a true partnership spirit is a unique way of working that we believe is the future of customer-supplier contract for all product groups by another five years. The Inflight & Catering team has been enhanced with relationship.” John Baumgartner explains: “The added value that Gebr. Heinemann offers to partners in the airline two new employees who are responsible for the Irish low-cost carrier. A unique feature of the partnership market is very powerful. We have the expertise to provide each customer with the right category management, account is the on-board catalogue. It is designed, photographed and printed twice a year, with a circulation of 1.6 management and distribution across all of Europe – whether low-cost, flag-carrier or airline concessionaire. With million copies per issue, by the Gebr. Heinemann subsidiary and advertising agency Terrahe. Gate Retail, Heinemann is also taking a big step into on-board sales with Nordic airlines such as SAS, TUIfly Nordic or Norwegian.” Gategroup is now the biggest customer of the 25-strong Inflight & Catering team at Gebr. Heinemann Distribution. “Ryanair continues to grow with new aircraft and new destinations. We want to support this and be part of this growth,” says John Baumgartner.

“On-board sales is a complex sales channel,” states the Sales Director. “It requires a unique concept and a special focus. BUY ON BOARD HAS BIG POTENTIAL We have it and we can do that. That's a big competitive advantage.”

In general, the Sales Director still sees great potential in the demanding airline retail business:

“Traditional on-board sales is under pressure and moving away from trolley retail. However, the potential lies in the passenger data that the airlines have, in the presentation of the goods on digital channels, and in reaching the passengers via new channels. It is a challenging environment with great opportunities.” The Inflight & Catering team at Gebr. Heinemann is also expanding its reach into the so called "buy on board" business, meaning

products that are consumed on-board the flight, such as snacking and drinks.“The buy-on-board channel is growing. More and more airlines are moving into retailing of also the food and drinks on-board, and this is a product category and sales channel where our infrastructure and competence will be of an advantage to our partners. I anticipate great growth here in the future,” says John Baumgartner.

Xavier Rossinyol, CEO Gategroup John Baumgartner WHAT MAKES TOMORROW’S PASSENGERS FLY HIGH?

Clear focus on Travel Exclusives and base price policy at Albrecht Dürer Airport Nuremberg P_108 GLOBAL PRESENCE

The Albrecht Dürer Airport in Nuremberg is showing considerable development. This is the result of new data and experiences from comparable locations airlines, more destinations and larger planes, causing passenger numbers to rise constantly. The current belonging to Heinemann retail. The comparable lo- number stands at 4.3 million (2017). Gebr. Heinemann’s Distribution department Airports Europe looked cations included the shops in Hanover and Bologna. into how airport retail can continue to grow in light of these developments, and how potential can be fully harnessed for its long-term customer using a best practice example. The result: a clear focus on success- An airport profile was created first, which included ful marketing activities such as base price policies (e.g. 19.90 euros or 29.90 euros) and Travel Exclusives main travel type, destination, airline, passenger along with optimised presentation in the shops. The activities calendar was also adjusted. At the end of volume and growth. Based on this profile, 2017, a measurable increase of 22 per cent against the previous year was recorded. Nuremberg Airport’s KPIs were compared with the reference locations in the Heinemann portfolio. Flughafen Nürnberg Service GmbH operates a Duty Free & Travel Value Shop that covers around 600 The company then looked at the categories split square metres for which Gebr. Heinemann has been the primary supplier for all product groups since into LTC/F, P&C and FA/WJ, and analysed the 1979. As a gateway to the metropolitan region of Nuremberg, the airport has a high-quality European share of special offers, Travel Exclusives, twin network structure in which low-cost carriers like Ryanair and Wizzair are gaining in importance. The packs and base prices in the individual categories. Gebr. Heinemann Distribution department Airports Europe has performed an analysis of the shop’s Finally, the average individual sale figures were assortment structure and activity planning. also compared. The results, including potential and growth opportunities, were presented to the ADDED VALUE AND A LONG-TERM CONTRIBUTION TO THE CUSTOMER’S SUCCESS customer by the Airports Europe department.

Making a lasting contribution to customers’ success and creating added value – that is the performance “We discovered that Nuremberg has a price-sensitive promise of the Gebr. Heinemann Distribution. And the cooperation with Nuremberg Airport is a clear passenger structure, and therefore recommended a focus example of this. “We want to grow together with our customers efficiently, through a cooperation based on partnership on base price policies, Travel Exclusives and cross-category explains Carsten Menck, Director Sales Airports and trust. This means sharing data and best practice knowledge,” placements. In future the main focus should be on a holistic Europe. “Our idea was to develop standards, minimise inefficient promotional activities and identify and utilise potential.” economic view of range type and offerings,” explains Vivien Wagner, responsible for the project as BENCHMARKS AND MARKET APPRAISALS Category Manager Perfume & Cosmetics in the Airports Europe department, summing up the The project was presented to Nuremberg Airport at the annual meeting in February 2017, and the airport analysis. Public holidays, peak travel times, trade provided the retail, passenger, sales, category performance, average individual sale, and spend per pax fairs and events in Nuremberg were included for figures. Following an evaluation of the data, the distribution team began a benchmarking process with the annual planning for offerings.

Vivien Wagner, Category Manager Perfume & Cosmetics Airports Europe P_110 GLOBAL PRESENCE

CONCENTRATING ON BASE PRICE POLICY

Nuremberg Airport began implementing the suggestions in August 2017. The Airports Europe department supported the airport with shop construction examples, recommendations for placement and impulse kits developed together with the Heinemann distribution customer. New developments at the Duty Free & Travel Value Shop in Nuremberg include the red column with base prices that catches the eye, the "red-head" concept, which displays various perfume offers, a podium with Travel Exclusives and prominently placed impulse kits that highlight either an image aspect (e.g. best seller, summer, perfect gift) or price (e.g. best deals, sale).

“We were able to provide our customer with ideal recommendations for their market,” says Carsten Menck. “We develop strategies for individual customers that are adapted to their targets using our expertise in the market and the location, and integrative work in the company.” And the success of these strategies is already apparent in Nuremberg: footfall in the shop is up and KPIs have developed very positively.

Klaus Dotzauer, Managing Director Flughafen Nürnberg Services GmbH (FNSG), is delighted

about this development: “Our business relationship with Gebr. Heinemann started in 1979, spanning nearly four decades from the first moment until now. Over the years, the business relationship was changing from just supplying us to a comprehensive partnership including all topics of travel retail business. This partnership has been increasing over the years without becoming old-fashioned or convenient. Quite the contrary is the case, since it is indeed able to create a lot of new and interesting ideas to increase our common success in the market. Therefore I'd like to say thank you to Gebr. Heinemann, especially to the team which is responsible for cooperating with us.”

Klaus Dotzauer, Managing Director Flughafen Nürnberg Service GmbH (FNSG), Vivien Wagner, Category Manager Perfume & Cosmetics Airports Europe, Carsten Menck, Director Sales Airports Europe (from left) “As a company active on complex global markets, our main focus in purchasing is to decide: what is the right pricing for the global or local market? How far do we go in regional or passenger-driven pricing compared with the global market? That means: what is the optimum negotiating strategy, how does purchasing have to be organised and when does the pricing have to be a function of the sales channel? Especially in the LTCF and P&C categories, this entails finding a global strategy with our partners in the markets and in industry. Our strategy centres on quality and strategic elements, such as incorporating trends into the range and special products, i.e. Travel Retail Exclusives. Our shops are excellent showcases for the industry and we are always thinking up new ways of integrating brands and trends into the customer experience.

One good example is make-up, which is currently a ‘super trend category’ worldwide. In 2017 we worked hard to make this product group even more attractive for travellers. We drove forward the strategic and conceptional expansion of the Fashion & Accessories / Watches & Jewellery categories and their presentation, especially in the core Duty Free segment. The LTCF category concentrated on personalised, exclusive products and the crafted products segment in 2017 and will continue to do so.

The globalisation of our retail activities means that the procurement of non- merchandise is also becoming more international. Here we have realised significant cost savings. Quality and cost control are also the key strategic imperatives for our logistics activities. We have reviewed our internal organisational structure in order to analyse and realise potential cost savings. At the same time we have created the WE INTEGRATE BRANDS technical conditions for optimising how we meet the higher demands of increasingly AND TRENDS INTO THE global deliveries and new legislation. Last year we launched the Travel Retail Data Innovation Group, or TRDIG for short. 30 suppliers and the biggest travel retailers CONSUMER EXPERIENCE. in Europe have now joined the initiative for digital, automated data exchange. It is an overwhelming response, which shows that we are on the right track with our travel retail data pool. It is an important element of the globalisation of Gebr. Heinemann and the whole travel retail sector.”

Kay Spanger, Executive Director Purchasing, Fulfillment & Logistics BEAUTY’S NEW FACE

Trends and innovations change the world of Perfume & Cosmetics P_116 GLOBAL PRESENCE

The market for make-up, care products and perfumes is growing rapidly and its drivers are changing. Instagram posts and YouTube tutorials by popular beauty bloggers with millions of followers have a mas- sive influence on the evolution of the category. Millennials, who make for well-informed consumers thanks to their mobile internet connections, are present at all airports. Strong online shops play an important role in customers’ perceptions, as do exciting international retail concepts that bring a new flair to the physical market in Germany. One example is the French beauty retailer Sephora, which stocks lifestyle brands presented in a special way and opened several shops in Germany in 2017. In travel retail, Gebr. Heinemann meets customers’ expectations of this dynamic product group with trends, innovations and ideas, breaking new ground as it continues to develop this sector. The well-known English market research institute Euro- monitor has determined that the market for make-up alone grew by one third between 2011 and 2016 to

53 billion euros. And the forecast remains positive. “The beauty market is currently in a period of great upheaval,” confirms Britta Hoffmann, Director Purchasing Perfume & Cosmetics at Gebr. Heinemann.“There’s a lot going on in this category – it is very lively. We see this as an opportunity to present trends faster, to question existing concepts and to try out new approaches.”

MAKE-UP BECOMES AN EXPERIENCE, WITH NEW PRESENTATIONS AND BRANDS

Make-up is the shooting star – the "super-trend category" – in the Perfume & Cosmetics product group. Interest is particularly strong from millennials and the growing number of Asian travellers at airports.

One key factor behind the appeal of make-up to customers is the presentation. Britta Hoffmann explains: “In 2017, we thought very hard about how we want to present this category in future. We see two main presentation strategies for responding to demand – one for the big new marketplaces at Heinemann Duty Free and one for existing smaller retail spaces. The product group must become more visible, attractive, brighter and more tangible.” In response, Purchasing, Retail and Marketing jointly developed a new design concept that will be launched at Tax Free by Heinemann at Copenhagen Airport in April 2018 and could act as a prototype for other sites.

The box-in-box installation, developed jointly with L’Oréal Luxe, was successfully tested in autumn 2017 at Frankfurt Airport. The cosmetics group developed individual brand boxes for the make-up of its brands Yves Saint Laurent, Lancôme, Giorgio Armani Cosmetics and Urban Decay, which were showcased within the existing cosmetics display at the Heinemann Duty Free shop in Frankfurt. This pragmatic solution enabled an attractive range and a genuine eye-catcher to be created for customers in a small space. P_118 GLOBAL PRESENCE

K-BEAUTY AND MASKS PERFUMES: FROM LUXURIOUS TO LOW-COST Korean Beauty, or "K-Beauty" for short, became a powerful trend in 2017. Its main characteristic is “In terms of fragrances, we are seeing strong customer that Korean women use a particularly large amount demand for both luxurious, individual products and low- of skincare products. Not only Asian women with a cost brands,” says Britta Hoffmann. “Many customers, sophisticated skincare routine but also more and including young customers, want scents that set them apart. more European customers appreciate the intensive Not only the brand but also the personalisation or packaging creams, fluids and serums, says Britta Hoffmann: as a ‘collector’s edition’ play a role, as do the commercial niche “In our Heinemann Duty Free shops in Frankfurt and at brands. That is why we have rolled out Atelier Cologne, for our distribution client at Munich Airport, we were the first instance, and the exclusive collections of selected perfume company in travel retail to introduce products from houses. A new addition to our range in Istanbul is the Sulwhasoo, a premium brand in Korean skincare cosmetics. sophisticated fragrances with elaborately designed bottles We spotted the trend very quickly and still see great from Kilian Hennessy.” To reflect the expansion of potential for it, given the many Asian customers at our the low-cost carriers with their price-sensitive international sites.” passengers, the P&C Purchasing team has continued to work very hard on expanding the base price range for perfume, and together with the Retail team has created a great offering, a clear concept and good communications. At the same time, the company is highly competitive regarding domestic and online products. In 2017, this category reported double-digit growth and generated an impressive Also inspired by the K-Beauty trend are the "sheet masks", face masks soaked in highly concentrated 15 per cent of revenue in the fragrance category. care products. This hits the spot with younger, care-conscious customers in the European market, too, as can be seen by the strong revenues right from the date the masks from Face Inc and Dr. Jart+ were launched in autumn 2017 and the continuous notable growth in demand.

STRATEGIC DEVELOPMENT OF THE CATEGORY WITH PREFERRED PARTNERS

For the sustainable development of its Perfume & Cosmetics category, Gebr. Heinemann restructured its annual negotiations with its suppliers in 2017. The process now starts with attendance at the Strategy Day, followed by commercial negotiations, a clear bid by the supplier, the details of which are then negotiated, and a final category workshop with selected partners. This took place for the first time with Clarins. The French cosmetics group had invited its customer to Paris to an "innovation hub". The Gebr. Heinemann Purchasing team for Perfume & Cosmetics and the category managers at Clarins held an extensive con- ceptualisation meeting, discussing topics such as the joint refinement of Travel Retail Exclusives and ideas about the shop of the future. P_120 GLOBAL PRESENCE

LOREM IPSUM OXMOS A DOG WITH CHARACTER Officiendant omnim restibus magnat. Acerferunto volumen imenietur restrum iliatur? BisCopper re dolupti Dog Blended sitiam laute Malt illes Scotch sant Whisky haribus celebrates nim sum its venduciam, exclusive premiere ommosame at Heinemann plant P_122 GLOBAL PRESENCE

Local, handmade spirits are a key trend. These crafted spirits that can be found in the categories Whisky, Gin and Rum are captivating customers with their unusual, individual characters, limited editions and unique stories woven around the brands and products themselves. Copper Dog is one of these handcrafted whiskies, a blended malt scotch that had its exclusive travel retail launch at Heinemann Duty Free in June 2017. The launch took place in a dedicated promotional area at Tax Free by Heinemann at Copenhagen Airport, which featured a small-scale recreation of the bar at the Copper Dog pub for the occasion. The real pub is part of the Craigellachie Hotel in Speyside, Scotland, the world’s largest whisky region. And the hotel is the birthplace of Copper Dog Whisky.

WHY "COPPER DOG"?

What is a copper dog? The term originates from the ingenious device Scottish distillery workers would use in days gone by to smuggle small amounts of The initial Copper Dog Bar launch was held at Copenhagen Airport, with additional promotions following whisky back to their homes. They would solder a penny to the end of a small, slim copper tube, the copper at selected Heinemann Duty Free shops, including Amsterdam, Hamburg, Frankfurt and Vienna. dog, and seal the other end with a cork. They could then conceal it in their clothing. When British busi- “Copper explains Laura Kramer, Head of Category Liquor/Purchasing. nessman Piers Adam bought the Craigellachie Hotel some years ago, he was Dog has a perfect story,” “We were able to present inspired by these stories and decided to name the hotel pub and a spe- it very effectively in the promotions. Many customers, and especially millennials, are always looking for something new – cially crafted whisky after the device. Copper Dog marries together something unique. Limited editions are very much sought after. Malt whiskies are incredibly popular; they are a driving eight Speyside single malts, resulting in a blended 40 per cent force in the category. As a crafted malt, Copper Dog is something extra special while still being in a mid-level price category scotch full of character and with an unmistakeable aroma of toffee at 34.90 euros.” apples, berries, citrus fruits, apples and pears as well as spice. Copper Dog has been rolled out at a number of international Heinemann locations since June 2017, including Oslo, Sydney and Istanbul, and is also available via distribution. In the first six months, ATTRACTIVE IN-STORE RANGES 8,000 bottles have been sold, and the hand crafted Speyside whisky has earned a global Handcrafted spirits are interesting products for Gebr. Heinemann as they add an attractive flair to the presence in travel retail. shops and can be presented as exclusive categories. They help the company to achieve its aim of con-

tinually surprising the international customers and exceeding their expectations. “We are delighted to be the first travel retail partner for Copper Dog,” said Rüdiger Stelkens, Director Purchasing LTCF, at the start of the Copper Dog launch. “Heinemann always strives to be first to offer customers superior shopping experiences and premium, travel retail exclusive products.”

Rüdiger Stelkens, Director Purchasing LTCF NEW

BRAND-NEW MULTIBRAND

Fashion & Accessories and Watches & Jewellery develop a new luxury shopping experience P_126 GLOBAL PRESENCE

In the modified Terminal E at Moscow-Sheremetyevo Airport passengers will soon experience a new multibrand concept for Fashion & Accessories and Watches & Jewellery. Together with its Russian joint venture partner, IDF, Gebr. Heinemann will be presenting one of several new store concepts for these categories here for the first time in the summer of 2018. Jan Richter, Director Purchasing Fashion & Accessories, and Olaf Benjamin, Director Purchasing Watches & Jewellery, talk about their strategy and Olaf Benjamin: “Of course we also want to convince brands the new developments that it entails. that have not been present in travel retail to date. Here we are focusing on the premium and affordable luxury segments and the following relevant product groups: sunglasses, small and large 2017 was dedicated to new strategic developments for FA and WJ. Why? leather goods, men’s business unit, watches and jewellery.” Jan Richter: “The purchasing patterns of our travel retail market customers are changing very rapidly from more price-oriented demand purchases to sustainable experience purchases. Cus- Tell us about Moscow-Sheremetyevo, and the modifications at Terminal E. tomers are not only interested in buying a branded product at an advantageous price; they want Jan Richter: “In summer 2018 we are opening a multibrand concept in the affordable luxury seg- to be surprised, inspired and entertained.” ment on 800 square meters there, under the brand name Sheremetyevo Duty Free Heinemann. It is designed on the basis of an open, walk-through concept – travellers reach it when they Olaf Benjamin: “These customer expectations influence demand at the airports, and so what come out of the Duty Free shop. Together with our architecture department and the Berlin-based they expect of us too. Airport operators are looking for partners with ideas that go beyond the design agency Plajer & Franz, we have developed a high-quality design framework. Selected classical convenience/Core Duty Free concepts. It is important to create holistic, tailor-made materials such as Italian terrazzo flooring, white oiled oak, brass and white marble give the con- experiences for the respective target groups.” cept an intensive but not intrusive touch of luxury. The local sense of place is also important and is reflected in the shop design.” Jan Richter: “That’s important for our brand partners too, of course. As well as a high-quality presentation in an appropriate setting, they are really looking for their products to be showcased Olaf Benjamin: “Within our new design framework, Moscow-Sheremetyevo will have a mix of and imbued with emotion. Because our customers do not generally plan their purchases of cloth- three-wall monobrand boutiques and a central area with see-through units. This enables larger ing, accessories, watches and jewellery in advance, the brand image and product presentation affordable-luxury and top-luxury brands are vital for giving them a spontaneous and lasting experience of the brand.” to present their goods in their own furniture in a boutique setting. Smaller trend brands will be presented in our concept Olaf Benjamin: “Based on these relevant changes in the travel retail market we have developed furniture pieces in the central area. We a strategic concept for our categories, from which we have derived a realignment and a varie- will be showing watches from Cartier for ty of retail formats. For the conceptual foundation, we developed a strategy pyramid, in which the first time. Bulgari, Montblanc, IWC, we divide our concepts into four different formats: Core Duty Free, multibrand, concept stores, Tissot and Longines will also be on dis- monobrand store. Now we have completed the planning for Core Duty Free and multibrand. We play.” will be rolling that out in 2018, at Moscow-Sheremetyevo, for instance.”

What is so special about the new presentation? Jan Richter: “In the leather accessories category, we will be starting with Jan Richter: “For the Core Duty Free and multibrand concepts we have created a strong design Coach. Ferragamo, MCM, Etro, Furla, framework, which enables our brand partners to slot themselves into the concept with person- Pinko and Tumi round off our brand alised branded furniture. At the same time the concept offers plenty of flexibility to curate new portfolio. In sunglasses, we will be intro themes at regular intervals and so to keep the spaces fresh and exciting. Inspired by the big ducing Linda Farrow. Saint Laurent, department stores in the top global physical retail locations, we just wanted to bring Dior, Gucci, Fendi and Ray Ban will this special atmosphere to the airports of the world.” also be represented.” P_128 GLOBAL PRESENCE

What new developments are there in terms of monobrand and concept stores?

Jan Richter: “In Fashion & Accessories, we currently operate monobrand stores with Hermès, Ferragamo, Burberry, Hugo Boss, Michael Kors, Fendi, Zegna, and Longchamp. We want to expand our portfolio with the Kering Group brands and those of the LVMH Group. In May 2018, we are opening three monobrand boutiques for Gucci, Saint Laurent and Bottega Veneta at Frank- furt Airport in T1, Z-Non-Schengen.”

Olaf Benjamin: “In Watches & Jewellery, that would be Bulgari and Montblanc. We are working to expand our portfolio here and so are establishing strategic partnerships with the Richemont Group and the Swatch Group.”

Jan Richter: “And of course we also want to keep growing with our long-term partners such as Hermès, Montblanc, Hugo Boss, Ferragamo, Bulgari, Michael Kors and Furla. The development of the concept stores is almost complete. In this project, the aim is to implement extraordinary trend concepts that are unique in the airport environment and so serve as a clear differentiating factor, both for the airports and for Gebr. Heinemann.”

FA/WJ STRATEGY | OVERVIEW PYRAMID

Monobrand MONOBRAND AND LICENCE SHOPS and Licence Shops Brand or licence shops (Gucci, MONOBRAND Hermès, Montblanc, Bulgari, ASSORTMENT Saint Laurent, Bottega Veneta)

CONCEPT STORE Concept Store Development of a new brand with SPECIAL EDITIONS a unique characteristic (example: well-being concept)

MULTIBRAND Multibrand Additional category spaces beyond Destination Luxe FULL RANGE Core Duty Free spaces ASSORTMENT Own branding & sub-branding Gebr. Heinemann (‘Multibrand’ by Gebr. Heinemann)

CORE DUTY FREE Core Duty Free Gebr. Heinemann key business ENTRY / BESTSELLER including all categories. ASSORTMENT Travel Value and Duty Free under one roof for B2B and B2C BIG DATA MAKES A BIG DIFFERENCE

Travel Retail Data Innovation Group keeps developing positively P_132 GLOBAL PRESENCE

A global standard for exchanging master data – that is the aim of the Travel Retail Data Innovation Group (TRDIG) created by Gebr. Heinemann.

One year ago the TRDIG was presented to industry partners in Hamburg for the first time. Thirty suppliers and the biggest travel retailers in Europe have since joined the initiative for digital, automated data exchange. Inken Callsen, Director Fulfillment at Gebr. Heinemann, emphasises the importance of master data as a basic condition for automated digital processes and is satisfied with develop-

ments: “We are increasingly seeing the importance of correct master data for our business model. The overwhelming response from our partners shows that we are on the right track with TRDIG and a global travel retail data pool.”

FIRST TEST PHASE UNDERWAY

The aim for 2018 is to complete the technical groundwork for connecting to the data pool, both at Gebr. Heinemann and its industry partners. Laura

Moser, Project Manager Fulfillment:“Suppliers sent us the first test data at the end of 2017. In early 2018 we then did the final functionality tests on the data pool and started to connect the first suppliers. In future we aim to ac- quire certificates through the data pool as well as managing the master data exchange.”

“As well as implementing the data pool, our day-to-day business is still to obtain and maintain master data for products, suppliers, customers, creditors and debtors,” says Alexandra Schulze Niehoff, Head of Customer

Order Management. “The subject of master data management, or MDM for short, always keeps us on our toes, to ensure that we are optimally positioned for the every- day challenges. Our master data form the basis for all the processes linked to SAP. That’s one reason why we need high-quality data, which the MDM team is now requesting from the first suppliers by means of direct communication and on its own account. This task is due to be transferred in P_134 GLOBAL PRESENCE ORDERS FROM MORE THAN 1,000 CUSTOMERS full from Purchasing over the course of 2018. It will save us unnecessary paperwork and make us more efficient overall. In

parallel we are looking at connecting the certificates.” The MDM team has launched a quality offensive for 2017/18 Management Customer Order IN 100 COUNTRIES to meet the new challenges. So in recent months it has attended training courses, for example, in order to get up to speed with the various processes. Alexandra Schulze Niehoff is delighted by the team’s commitment and high level of motivation. When supply contracts have to be signed and orders processed in Distribution and Retail, the Customer UPGRADED SUPPLIER REQUIREMENTS Order Management (COM) department goes to work. Order management comprises all the activities from the time the order is received until it is passed on to Logistics: checks include sell-by date, trading units,

Seamless processes and fully automated logistics call for high-quality goods deliveries. So the procedures partial pallet quantities, hazardous goods and certificates. “In order processing our focus is really on checking for goods deliveries have been upgraded in cooperation with Fulfillment and Logistics. To ensure compli- that the quantities are correct, because revenue is directly linked to that. The order must be fulfilled as accurately as possible ance and demonstrate its necessity, an interdisciplinary supply chain meeting was held in the Erlensee in order to maximise satisfaction and delight the customer,” says Alexandra Schulze Niehoff, Head of Customer logistics centre with L’Oréal, the Gebr. Heinemann logistics function and the Fulfillment department’s Sup- Order Management at Gebr. Heinemann. plier Order Management (SOM) as well as the new Demand Management. Representatives of SOM, DM and Logistics later travelled to Paris to meet the travel retailer’s biggest supplier. In addition to improving Its day-to-day contacts enable the team to work continuously on improving the customer relationship.

delivery quality, the subject of track and trace was discussed. Gebr. Heinemann tracks the products to Because, “It’s only when we take care of our customers, understand their challenges and solve problems that we build a ensure its goods flows are transparent and to prevent products from being diverted to unauthorised chan- real partnership,” says Nataliya Lerschmacher, COM team leader for the Eastern Europe & Central Asia nels. “We are very happy with the results of this exchange,” states Project Manager Oliver Scharnweber. “Both the region. She and Alexandra Schulze Niehoff travelled to Moscow in June to discuss fundamental aspects working relationship and the supply quality are much better.” of the cooperation with IDF and TRD, the two main joint venture partners in this division. The exchange of functional information with COM’s colleagues in Logistics and Purchasing and The year 2017 was also dedicated to building the Demand Management department. The Demand Man- the master data owners was aimed at solving significant problems in

agement team was set up in October when Fulfillment took over the planning of promotion volumes. In ad- day-to-day business. “The challenge was to identify the connections between dition to designing future demand and supply processes in MovinGH2020 project FOCA, Fabian Flügge, individual areas and to initiate communications between them. It is the only Head of Demand Management, is mainly concerned with optimising the existing planning processes. In way to find standardised solutions and optimise processes with a view to regular Demand Meetings with all sales channels the department makes planning transparent, identifies future growth,” explains Nataliya Lerschmacher. That is important, expense drivers and makes a vital contribution to efficient planning processes. because a new terminal is being built at Moscow-Sheremetyevo Airport in 2018 for the football World Cup in Russia, which will add a lot of new retail space.

“The second part of our trip, the visit to Travel Retail Domodedovo, was also a success,” says Alexandra Schulze Niehoff. “I particularly like the open-minded culture, the professional discussions and the willingness to change.” PURCHASE GLOBALLY, SAVE LOCALLY

Purchasing Procurement & Facility Management saved millions P_138 GLOBAL PRESENCE

As Gebr. Heinemann’s retail activities go global, the sphere of operations for non-merchandise procure-  Energy prices declined over a period of four ment, also known as indirect spending, becomes more and more international. The main objective is to years. Gebr. Heinemann then began talks with the airports at which the company has supply the sites in Europe and Asia. At the same time, the team of nine aims to internationalise its pur- 4 retail operations and the airport supplies chasing. Andreas Otte, Director of the Purchasing Procurement & Facility Management department since the electricity. Intensive negotiations with UP TO it was set up in 2009, explains, “We see ourselves as advisers and service providers to our colleagues in operations. the landlords resulted in contracts being ad justed to reflect market conditions, with an- With our knowledge and actions we contribute to cutting costs across all areas of Gebr. Heinemann.” Annual savings 20% nual savings of up to 20 per cent, depending currently add up to 3 million euros, and “they all go straight to the bottom line,” Andreas Otte emphasises. The on the site. range of activities is large: from office equipment, construction and technology components to logistics, marketing, services, IT, travel and the vehicle fleet, the purchasing team deals with many different topics.

They are responsible for an annual procurement volume of 200 million euros and around 180 contracts  The number of promotion agencies for mar- are negotiated every year. keting activities was increased significantly. 5 Five agencies will act for Gebr. Heinemann in future, two in Germany and three in other European countries. A strategic dual/multiple supplier strategy is behind the change, which is aimed at creating competition and thus obtaining quality improvements and better RECENT EXAMPLES OF SUCCESSFUL COST REDUCTIONS: prices.

 The procurement of "gift with purchase"  In Amsterdam, the Purchasing Procurement & articles for the CIS market was renegotiated. Facility Management department reported a 1 By changing suppliers, innovating products 6 double-digit percentage saving for job agen- and adapting processes, the team was able cies thanks to its positive and constructive to save a six-figure amount. working relationship with the local staff.

 A global tender was put out for the procurement of plastic bags for the Heinemann Duty 2 Free shops at Sydney Airport. In future they will also be purchased in Europe, generating savings of 20 per cent. Andreas Otte took another step towards making non-merchandise purchasing more international a few 20% days before the end of the year, when he visited his counterpart at the Heinemann affiliate Unifree Duty Free in Istanbul: “We want to use the know-how that exists in the different countries to get to know local markets and suppliers better and to support one other. We have to work together more closely, because if everyone keeps their knowledge The success  A nationwide tender was put out among to themselves, the only winner is the supplier. Personal contacts and close interaction are a great advantage.” banks in Germany in order to obtain better of the tender for plastic bags at Sydney Airport showed the Purchasing Director how important it is to think 3 exchange rates for Gebr. Heinemann. Since entrepreneurially across continents. Experience has taught Andreas Otte that a first-time tender delivers then, the different foreign currencies have $ double-digit cost savings. Cost reduction knows no borders – and certainly not in Gebr. Heinemann’s been pooled and paid in centrally to a single global business. bank for conversion. Annual high six-figure savings were the monetary result of this ten- € der process. READY, STEADY, FUTURE!

Strategies to deal with the growing demands of tomorrow’s global logistics networks P_142 GLOBAL PRESENCE

Major new locations, like at Ben Gurion Airport in Tel Aviv or the future Istanbul New Airport, growing TECHNICAL SOLUTIONS ADVANCED goods volumes as at Oslo Airport and the current legal demands facing the industry, such as tighter track and trace rules for tobacco products – all these topics are examples of the higher demands being made In summer 2017 Gebr. Heinemann and its Norwegian partners put the world’s first driverless transport of Gebr. Heinemann Logistics. In recent months the unit has laid the groundwork for the expansion of its system at an airport into service. The solution was customised to meet the particular requirements at global network. An overview of strategic tools, performance management and technical solutions: Oslo Airport, with large volumes of goods in the shop, long distances and a secure supply chain. Another warehouse at the airport will be connected in 2018. Logistics and the colleagues in Oslo are working on Last year Gebr. Heinemann Logistics refined its organisational structure and tools in order to identify and further additional automated solutions, in order to replace manual processes. realise potential for optimisation in cooperation with Retail, Sales and Purchasing. “We are reviewing our supply structures while maintaining the same high service standards and developing our stable network,” says Marco Rebohm, Director Logistics at Gebr. Heinemann. So the freight cost monitor was expanded in 2017, for in- INTERNATIONAL LOGISTICS NETWORK stance, which checks some invoices automatically and supports the specialists in Transport Management by reporting on the results. It factors in global transport flows and the different demands made of logistics Last year, Logistics also supported the colleagues

when goods are delivered to airlines, airports or cruise ships. “Automated invoice checks enable us to improve at various international sites with the ongoing our analysis of the costs in the transport network. That is important for negotiations with freight forwarders, for example,” development of local logistics service providers, explains Marco Rebohm. such as Heinemann Americas in Miami and Heinemann Duty Free in Sydney. The logistics PERFORMANCE MANAGEMENT FOR THE LOGISTICS CENTRES partner in Singapore moved to a modern logistics centre with the support of Gebr. Heinemann. Assis- One important topic is to secure long-term capacities at the logistics centres in Hamburg-Allermöhe and tance was also provided with preparing operations Erlensee near Frankfurt. For this purpose a tool was created with external partners to calculate capacity for the new JR-Heinemann joint venture at Tel Aviv use at the logistics centres in advance. It can also simulate special scenarios, such as changes in the Airport and supplying the MSC cruise ships in business model of Gebr. Heinemann or one of its distribution customers. These calculations always con- Miami. sider the connections between transport and warehouse, because this is important for finding the best solution and illustrating the effects on the overall logistics function. Because any changes in the supply chain have a knock-on effect. If the structure is changed for one customer, that also impacts other customers. So the aim is always to optimise the overall logistics situation for Gebr. Heinemann.

The warehouse facility in Hamburg-Allermöhe was enhanced in 2017 to get it technically fit for the future and to prepare it for the introduction of the SAP Extended Warehouse Management system. Introduction of SAP EWM is due to start in late 2018, and the entire logistics function will then be integrated into SAP. P_144 GLOBAL PRESENCE

FOR 2018 AND BEYOND

One key topic for the logistics function at the Hamburg-based travel retailer is the inauguration of Istanbul New Airport, planned for October 2018, where Gebr. Heinemann and its partner Unifree will operate the Duty Free concession.

“Together with our Turkish colleagues we have driven the project forwards, so at the launch in October we will be able to deliver an excellent logistics solution,” says the Director Logistics. Looking to 2018, he adds that the groundwork is also being laid for compliance with tighter legal requirements for the tracking and tracing of cigarettes. The new pan-European tobacco control system is intended to document every step of the way from the manufacturer to the point of sale for every cigarette packet, in order to eliminate illicit trade.

Gebr. Heinemann has also been looking carefully – in the literal sense – at a very exciting topic for 2018:

“We are in the project design phase for the use of smart glasses, in order to boost productivity in manual picking and dispatching,” explains Marco Rebohm. And he adds: “It is vital for us to spot future logistics trends at an early stage and put them to use.”

Marco Rebohm, Director Logistics

GEBR. HEINEMANN APPOINTED TO BVL ADVISORY BOARD

Gebr. Heinemann was appointed to the Advisory Board of the trade association "Bundesvereinigung für and academia are organised in the BVL. The non-profit organisation is an open Logistik" (BVL) in 2017. Marco Rebohm, Director Logistics, represents the travel retail company as one of network, which aims to publicise the importance of supply chain management and 40 board members. Altogether more than 11,000 specialists and managers from industry, retail, services logistics and to advance their application and development.

Watch the video on YouTube FROM ASIA PACIFIC TO ASIA TERRIFIC

Heinemann Asia Pacific turns from "start-up" to reputable travel retailer P_148 GLOBAL PRESENCE

You can fly halfway around the world and still see things that are familiar. In the business district Kallang, for example, in the middle of Singapore. If you step out of the tropical heat of this bustling Asian metropolis

China and into the office block Aperia Tower 2, take the lift to the 12th floor and you’ll find yourself in front of a China brick facade with a large Gebr. Heinemann logo – where one can’t help but think of the headquarters in Hamburg’s HafenCity.

In 2010 the family-run company launched operations in the Asia-Pacific region and established the subsid-

Hong Kong iary Heinemann Asia Pacific in a small office in Singapore, in line with the company policy of proximity to Hong Kong

Myanmar the local area in order to get to know it better. The aim is to transfer Gebr. Heinemann’s expertise as one Myanmar of the top players in international travel retail to the region and become the preferred partner with comprehensive solutions for landlords, shop owners and suppliers in this dynamic market.

Malaysia Heinemann Asia Pacific has grown into a company that has established itself on the Asian and Australian Malaysia travel retail market. With a clear organisational structure, the foundation has been laid for future growth.

Singapore Today, the office in Kallang employs 75 people. In 2017 Heinemann Asia Pacific won a bid to operate con- Singapore fectionery shops at Hong Kong International Airport and took the first step into cruise retail.

Indonesia Indonesia

Overview: the Heinemann Duty Free Malaysia subsidiary was established in 2012. This was followed by Heinemann Australia in 2014 – with 500 employees in the sales team at Heinemann Tax & Duty Free at Sydney Airport it is now the largest operating anchor business in the region. There has been a sales office HEINEMANN ASIA PACIFIC: AN OVERVIEW in Shanghai since 2010 to manage retail and distribution operations on the Chinese market. A proprietary Singapore: logistics centre was also established in Singapore in 2016, run by the company’s logistics partner YCH. Headquarters and logistics centre Heinemann Asia Pacific currently operates in these markets: Singapore, Australia, China, Malaysia, Indo-

Australia nesia, Laos and Myanmar. Malaysia: Australia Subsidiary: Heinemann Duty Free Malaysia (Kuala Lumpur) Max Heinemann has been managing Heinemann Asia Pacific as CEO together with a management team Retail: KLIA 2 "be Duty Free" on site since 1 January 2014. On 1 January 2018, he handed the reins over to Marvin von Plato, who had Joint Venture with DFZ (border shops ZON Duty Free) previously held the position of Director Distribution & Business Development. Max Heinemann will join Australia: the Gebr. Heinemann Board of Directors in Hamburg this summer. Time for a review of the situation in Subsidiary: Heinemann Australia (Sydney) Singapore. Retail: Sydney Airport, "Heinemann Tax & Duty Free" Cruise Retail: Carnival Cruise Line (Sydney / Pacific)

China: Subsidiary: Heinemann Hong Kong Retail: Hong Kong International Airport, "Sweet Dreams by Heinemann" Cruise Distribution: MSC Cruises (Shanghai / East China Sea)

Indonesia: Distribution partnership with Plaza Bali at Jakarta International Airport in T2 and T3

Myanmar: Distribution partnership with Image Duty Free at Mandalay International Airport P_150 GLOBAL PRESENCE

WHAT WERE YOUR HOPES FOR HEINEMANN ASIA PACIFIC AS YOU STARTED OUT?

“We realised that we would have to go to Asia if we wanted Gebr. Heinemann to continue growing in the Duty Free market. The European market was more or less saturated. So we had to take this step to become a truly global player, and we had to be there to really understand the market. We wanted to show that our corporate culture would work just as well in other cultures – and we have.”

WHAT WERE THE FIRST STEPS?

“Singapore was the beginning of Heinemann INTERVIEW Asia Pacific. We didn’t even have an office when I came over in 2010. I was initially responsible for WITH MAX HEINEMANN logistics and finances, then sales and then purchasing for the region. Our first office was at The development of Clarke Quay; then we moved to Kallang in 2014. Heinemann Asia Pacific We signed a long-term contract for our office space here. This was an important signal for us as a company, and for our employees. At every office we’ve made gradual adjustments to make it look more like our headquarters in Hamburg, for example with things like its typical brick facades. We also have brick facades, wooden floors and high ceilings in our office in Kallang. I call it integration with a reminder of home.” P_152 GLOBAL PRESENCE

WHAT DID YOU LEARN IN THE FIRST FEW YEARS? AND WITH THE OPENING AT SYDNEY AIRPORT YOU ENTERED THE AUSTRALIAN MARKET. “To keep my nerve (laughs) … We adjusted our strategy roughly every two years. And we also learned to say no to certain markets and to focus – specifically on Singapore, Malaysia and “Yes, we needed this anchor from a busi- Australia. Now we have a clear strategy.” ness point of view. It allows us to show what Heinemann is capable of doing with

HOW DOES THE COOPERATION WITH THE HEADQUARTERS IN HAMBURG WORK? a large space. Many airport operators – from Malaysia, Singapore and Hong “It took some time for the two sides to get to know each other. And each side has learned a lot Kong, for instance – have now visited our from the other. In the first years we worked somewhat independently from the headquarters, location in Sydney. Because of our activi- simply because it was necessary for this market. Since then we have established some mecha- ties in Sydney, we were invited to take nisms between us and the Board in Hamburg. Many bridges have been built. And within the part in the confectionery tender at Hong Group, too, cooperation has become very good. At the moment, for instance, we are cooperating Kong International Airport. The invest- closely with Heinemann Americas. We also receive a lot of support from headquarters. They ment was worth it and is already paying have great faith in us. And they’re placing a lot of trust in the young team here in Singapore.” off. Our office in Singapore only provides support in daily business for Heinemann HOW DID GEBR. HEINEMANN CREATE ITS IMAGE AS A REPUTABLE TRAVEL RETAILER Australia in Sydney, but we are still very IN THE ASIA-PACIFIC REGION? proud of this location. Sydney has made Heinemann a preferred player on the trav- “We set a lot of individual milestones in order to figure out how to break into this market. In Asia, el retail market in Asia-Pacific. It’s a life- too, competition has thinned out due to the consolidation of companies. But the competition is style destination. And that’s why it is es- Constantin Wiesmann (Managing Director Heinemann Australia), Max Heinemann, dominated by local power houses, or classic Asian conglomerates like King Power from Taiwan, Audrey Tay (Director Finance & IT), Marvin von Plato (CEO Heinemann Asia Pacific) (from left) sential for us to be there. Sydney is also of China Duty Free and Shilla and Lotte from Korea. Another strong international player is DFS. We great significance for the development of had a shop at Changi Airport in Singapore from 2012 for some time called ‘Vine & Leaf’, which Heinemann as a global brand. It was im- sold wine and tobacco products. It was concept-driven and creative. The next milestone was portant to establish the awareness and ‘be Duty Free’ at the low-cost terminal KLIA2 at Kuala Lumpur International Airport in Malaysia. flexibility that we need to make the brand This was the first time we asked ourselves: ‘How are we going to present ourselves?’ Under the work worldwide.” Heinemann brand or independently?”

THOSE SHOPS ARE OPERATED UNDER THE NAME ‘BE DUTY FREE’ – WHY? TOGETHER WITH HEINEMANN AMERICAS YOUR TEAM WON A TENDER IN CRUISE “We decided against ‘Heinemann Duty Free’ because the term of the contract was too short and RETAIL IN 2017. that brand presence means a large investment in the shop. We also didn’t know enough yet about the market and its risks. In Europe, contract terms are usually seven to ten years, but in Asia just “The tender for four Carnival Cruise three. But that also gave us the opportunity to take part in a lot of tenders. We bid in a tender Line ships was a global project for as an international travel retailer for the first time in Malaysia in 2012. Terminal KLIA2, where all Gebr. Heinemann – our teams in Miami, the shops are, was new at the time and is driven by low-cost carriers. There was no data for us Hamburg and Singapore all worked to analyse. We were far from experts on the Malaysian market – but we were determined to win. together. Asia is the largest growth That is why we built on the concept of the airport’s new terminal, called ‘be curious’, with a brand market for cruises and Miami is currently called ‘be Duty Free’. There was a difficult period to bridge after we won the tender because the the most important hub. We decided to terminal opening was delayed by two years to 2014. Business got off to a slower start than we participate in the tender as a retailer. At had anticipated. After our second year we got to grips with the market and now we are doing very our headquarters in Hamburg we have well. ‘be Duty Free’ covers all categories except L&T, and sales are now on a par with Heinemann years of expertise in retail on board, and Duty Free at Hamburg Airport. It has helped us understand the Malaysian market and to find the our organisation has locations around right strategic direction: One that suits us and that we're happy with. Our joint venture with DFZ the globe.” in Malaysia is also very important.” P_154 GLOBAL PRESENCE

WHAT WERE THE KEY FACTORS IN HEINEMANN’S SUCCESS MALAYSIA IS A MARKET WITH LOTS OF POTENTIAL – IN THE ASIA-PACIFIC REGION? EXPANSION OF THE JOINT VENTURE WITH DFZ

“The company invests a lot of time in understanding different cultures and explaining who we Malaysia is a restless, difficult market, but also one that is constantly developing – a market in which Gebr. are. We are flexible and very good at bringing out the best in both parties in our partnerships. Heinemann sees great potential. Since 2012 Heinemann Asia Pacific has been running the cross-category And we have a proactive attitude, a solid work ethic and are sincere. As a global organisation our Duty Free concept ‘be Duty Free’ on a 1,200-square-metre retail space through its subsidiary Heinemann family-run company now has to become stronger to ensure that our customers benefit from our Malaysia Duty Free at Kuala Lumpur International Airport’s Terminal 2. In the summer of 2016, the com- efficiency and to turn this into another USP.” pany took a further strategic step in the market and established a joint venture with DFZ Capital Berhad, a subsidiary of the largest Malaysian multi-channel Duty Free supplier DFI. The company runs border shops 2018 – WHAT’S NEXT FOR HEINEMANN ASIA PACIFIC? on the border to Thailand and Singapore and Duty Free shops at airports. “A successful launch in Hong Kong is important. We also want to look at doing more business in China. And we’re looking to grow in Australia. One focus of our work will be the expansion In the fourth quarter of 2017, Heinemann Asia Pacific increased its holdings in DFZ from a 10 per cent of business in Malaysia. For the organisation Heinemann Asia Pacific the next developmental to a 15 per cent share. “We increased our share because we believe in our partner’s potential to grow,” says Max stage will be strengthening HR. We have a great, young team with an average age of 33 – 80 Heinemann, CEO of Heinemann Asia Pacific.“DFZ’s border shops complement our airport activities. This business per cent of whom are women – and a common corporate culture that works in any culture. We is of particular interest because the shops belong to a highly profitable company. Our joint venture has a very successful and are no longer a start-up; we have to offer our employees direction and show them what devel- solid foundation.” opment opportunities are open to them. We are now able to do that thanks to our organisational structure. One of our future focal points will be employer branding. 2018 will be the year of talent DFZ is one of Gebr. Heinemann’s largest distribution customers. With Andreas Winnen as CEO and management in Singapore. We have to come up with concepts for the international employee Hendrik Heyde as Director Operations of DFZ, Heinemann Asia Pacific is also involved in the strategic market, and we have to implement them in Europe, too. This is important for a global company and operative business. Max Heinemann and Marvin von Plato are both on the Board of Directors, and like Gebr. Heinemann.” DFZ has three representatives on the Board. “There has been an in-depth cultural exchange between the companies since we began collaborating,” reports Max Heinemann. “It’s an outstanding partnership with great transparency. YOU ARE GOING TO JOIN THE BOARD OF DIRECTORS IN HAMBURG IN SUMMER 2018. DFZ has high expectations of us and our professional expertise. We have become very involved in purchasing, logistics, HOW DO YOU PLAN TO GO ABOUT THIS? sales and back office operations in this joint venture. With this successful partnership we are drawing the attention of the Asian market.” A sound base for further expansion. ”Marvin von Plato has taken over as CEO of Heinemann Asia Pacific. He has already successfully held the position of Director Distribution & Business Development on the management team for many years. But saying farewell will be very emotional for me. Singapore is dear to my heart. It’s been home to my children, and Heinemann Asia Pacific is ‘my baby’, too. But I know I’m leaving it in the safe hands of a great family. I’m proud of our team and our corporate culture. The organisation here has come of age and the time has come for me to let go. I’m very grateful for the experiences I’ve had here and that I can take what I have learned back to Hamburg. I’ll be taking the experience of having worked far away from the headquarters and I intend to bring my new perspective back to the solidly growing Group as an added value. As an active family member and Board of Directors member in a family-run company, you’ll always have an all-round responsibility for the development of the business. I’m looking forward to it.” CONFECTION IN PERFECTION

Gebr. Heinemann establishes the new brand Sweet Dreams at Hong Kong International Airport P_158 GLOBAL PRESENCE

One name, eight individual concepts: Sweet Dreams by Heinemann has opened its first shops airside in Terminal 1 of Hong Kong International Airport. It is unique in many ways, and a pioneering move by the Heinemann Asia Pacific team, who won the tender to become the exclusive operator of the confectionery shops in September 2017 and who launched operations together with colleagues from Hong Kong, Singapore, Australia and Hamburg. Now passengers at the airport in the Asian metropolis can immerse themselves in this experience, with themes like a fairground, outer space or an underwater world, complete with virtual reality and 3D shows – and the scent of chocolate, liquorice and popcorn. The tender itself attracted much attention: the Hong Kong Airport Authority decided to tender the confectionery business as an independent category for the first time in 2017. It had previously been part of the general range of Duty Free offers. The first two shops opened their doors on 18 December 2017, and the other six will be opened consecutively during the first six months of 2018. This resulted in the new brand Sweet Dreams by

Heinemann. “It was a breakthrough,” explains Max and entertaining customers. There are 3D projections, 3D chocolate printers, games and virtual reality WELL DESIGNED, FUN AND Heinemann, “It was the first time we had linked an offerings. “One of the reasons we won the bid is that we understood how important customer engagement was for the A DELIGHT FOR CUSTOMERS: exclusive, individual concept with the Heinemann brand airport. We had already unsuccessfully participated in another bid here for spirits and tobacco products. The feedback noted SWEET DREAMS BY HEINEMANN name. But the Heinemann brand can still be felt, for that our customer engagement strategy was lacking. We took this feedback to heart and kept it in mind for the confectionery example, in the customer service provided in the shops.” adds Max The conditions of the tender were complex, as For the tender, the airport was looking for a wide tender. The airport was surprised and overwhelmed by the concepts, and said, ‘Thank you for listening to us,” Heinemann. Max Heinemann, CEO of Heinemann Asia Pacific range of modern, international sweets presented in

reports: “The most interesting aspect was that the bright, playful designs. A team of Heinemann Asia The customers will also be tempted into the shops with the scent of chocolate, lollipops and liquorice. concession was tendered alone for the first time. Another Pacific architects, designers and project managers Heinemann has even more innovative approaches for the main shops in Departure Hall East to attract challenge was that the shop spaces were scattered in varying developed eight colourful designs that stand out customers: Garrett Popcorn, an American gourmet popcorn brand that is particularly popular in Hong Kong sizes throughout the airport. The shops range from almost and which, despite their uniqueness, still have a is the anchor tenant and a magnet for customers. Items that are presented in the Sweet Dreams shops in 60 square metres to 180 square metres and are located at common feel. The target group spans all ages. The personalised displays include truffles and chocolate from Godiva and Lindt along with the sparkling gold different gates. Our biggest challenge, however, was the shops make buying confectionery an experience, of Ferrero Rocher. fact that each shop required an individual design. For our with design themes such as underwater worlds, team that meant dreaming up eight individual concepts for outer space or a fairground. And they fulfil international confectionery. It was exciting.” another central aspect of the tender: inspiring P_160 GLOBAL PRESENCE

GREAT FAITH IN THIS CATEGORY AT ONE OF THE WORLD’S LARGEST AIRPORTS HONG KONG IS AN IMPORTANT STRATEGIC STEP FOR THE EXPANSION OF GEBR. HEINEMANN With over 70 million passengers per year, Hong Kong International Airport is one of the biggest airports in the world. It is also one of the most important airport hubs in Asia and the gate to the Chinese mainland. By winning the tender and establishing a presence at Hong Kong International Airport, Gebr. Heinemann More than 100 airlines connect this airport to 220 destinations. Capacity is expected to grow to 100 million has taken another important step in its expansion into the Asia-Pacific region.“The location in Hong Kong will passengers by 2030. A complex marketplace, characterised by a growing number of Chinese travellers, also be an important reference for us for future tenders,” explains Max Heinemann. And it is a strategic beacon for international tourists, business travellers and the nomadic millennials who compare prices but are also on other tenders in the Asia-Pacific region. the lookout for creative and exclusive brands.

The contract for the eight confectionery shops will run for three years. That’s acceptable to Heinemann, RECRUITING NEW COLLEAGUES explains Max Heinemann – it does constrain opportunities to some extent, but it also limits risk. “There has IN HONG KONG been no exclusive confectionery space at Hong Kong International Airport until now. That’s why we have no comparative the CEO admits. data,” “But because Heinemann operates an international network of its own shops at hub airports, we Frecy Bastian, Head of HR at Heinemann Asia Pacific in Singapore, shares how colleagues based almost have benchmarks. That made the calculations for these locations a little easier. We have high hopes for this category here in 9,000 kilometres away from the Gebr. Heinemann headquarters in Hamburg are brought into the fold of Hong Kong. We’re happy that the Airport Authority has given us the opportunity of running this category exclusively and the Heinemann family. “We won the tender in September 2017 and only had a couple of weeks to source for employees for look forward to a long partnership. With our concept we intend to redefine how confectionery is presented at an airport.” the opening of the first two shops in December. Our key roles include the retail team, warehouse team, HR, IT and Finance. We have also looked internally for interim operations support from Gebr. Heinemann and other subsidiaries and identified Jens Wolf, Director of Retail Sales Europe as our Interim General Manager. He was fundamental in setting up the operations for the past four months. Now, Victor Chan takes over as General Manager. As a new operator in Hong Kong, it is critical that we source the right people with personal values aligned to the Heinemann values. We looked into the employees of the previous operator, established a referral scheme for current employees in Singapore and Malaysia to recommend their contacts in Hong Kong, advertised in local papers and conducted a Career Day to invite more candidates outside the airport area. Another important step that we took to ensure that the new employees embrace our corporate culture is to conduct a detailed 'On-boarding Day' where we highlighted our company’s values. In addition, we also conducted sales, customer service, product, visual merchandising and systems training.

We have now filled almost 80 per cent of the necessary headcount and set up operational and communication process between Hong Kong and the regional headquarters in Singapore.” MANY FIRSTS ON THE FIFTH CONTINENT

New tender, opening of the first luxury boutique and new partnerships in Australia P_164 GLOBAL PRESENCE

FIRST HERMÈS BOUTIQUE ON THE AUSTRALIAN TRAVEL RETAIL MARKET

Heinemann made Australian travel retail history this year by opening the first Hermès boutique in a travel retail context on the continent. Located at Sydney Airport’s Luxury Boutique area of Terminal 1, the 150-square-metre shop not only elevates the shopping experience at the airport, it is also the pinnacle of a long-standing cooperation between the two family-owned businesses dating back to the mid-seventies.

Particularly engaging is the shop’s architecture which is inspired by the Aboriginal concept of dreamwriting. In the Australian natives’ culture it forms the beginning of knowledge, the source of all laws of existence. In its construction and geometry, the Hermès boutique, with its spectacular entrance, builds upon this. P_166 GLOBAL PRESENCE

Customers are welcomed by the world-famous carrés, the stylish Hermès scarves. Centre-stage in the boutique, the Hermès leather range with handbags and smaller leather products are displayed, repre- senting the uncompromising quality of the brand. A variety of products from lifestyle accessories to home decorations, perfumery, jewellery, watches, shoes and ready-to-wear invites the clientele to explore the Hermès range to the fullest. P_168 GLOBAL PRESENCE

NEW RETAIL LOCATION IN AUSTRALIA

Heinemann Tax & Duty Free opens at Gold Coast Airport

Beaches, surfing hot spots and national parks – the Gold Coast in the East Coast of Australia is one of the most popular destinations for both lo- cals and tourists, and Gold Coast Airport is one of the fastest-growing airports in the country. At the end of 2017, Heinemann Australia won the tender for both shops in both the departures and arrivals areas, which they will be taking over from former operator Aelia Duty Free as of 21 October 2018.

Constantin Wiesmann, Managing Director of Heinemann Australia, speaks about the company’s

second location in Australia: “We are delighted to have a presence in The Gold Coast, which is the gateway to Australia’s leading tourist destination. Sydney was a first and significant step for Gebr. Heinemann to enter the Australian market. Now we want to continue to grow substantially here.” Heinemann Tax & Duty Free will offer all categories of its product range across approximately 430 square metres in departures and 300 square metres in arrivals. The shop will focus on spirits, wine and sparkling wine, as well as perfumes and cosmetics. Both retail areas will be designed as walk-through shops. Over the course of the terminal expansion, they will also be significantly expanded and will receive a completely new design 6.4 M concept by 2020. The tender’s contractual period is valid for seven years. PASSENGERS 730 SQ M More than 6.4 million passengers use the Gold Coast Airport each year, with tourists making up 75 per SHOP AREA NORTHERN cent of this figure. It is one of two airports in the State of Queensland, alongside Brisbane International TERRITORY QUEENSLAND Airport. Low-cost international airlines make up the majority of air traffic at the Gold Coast Airport. WESTERN AUSTRALIA Gold Coast SOUTH Long-distance connections include destinations in New Zealand, Malaysia and Singapore. AUSTRALIA NEW SOUTH WALES Sydney Canberra Melbourne VICTORIA

Constantin Wiesmann, Managing Director Heinemann Australia P_170 GLOBAL PRESENCE

STARTING WITH A HIT IN AUSTRALIA

New Promotion-Partnership with the Emirates Australian Open

It has been a successful two years for the Heinemann Australia team. With its entry into the travel retail market down under at Sydney Airport the Hamburg-based company has opened not only their largest Duty Free shop yet, but also the largest stand-alone one in the world, boasting a total of 8,000 square metres. And it is the combination of size and quality that makes the difference. Only recently, Constantin

Wiesmann, Managing Director of Heinemann Australia, said in a trade media interview, “We have established a very smooth business operation and are market leaders in operational excellence.”

OFFICIAL AIRPORT DUTY FREE SPONSOR OF THE EMIRATES AUSTRALIAN OPEN

And still, in the country that is one of the furthest away from the company’s headquarters in the north of Germany, the name Heinemann is, as of yet, a young one. Increasing the brand’s awareness is, therefore, a major goal for the 500 strong Heinemann Australia team. One of the steps along the way: becoming spon- soring partner of the Emirates Australian Open, one of the oldest and most important golf tournaments on the planet. 2017 saw the start of a two-year relationship as the official airport Duty Free sponsor of the na-

tional championship. “We see great value in this association particularly because of the huge attention the Emirates Aus- tralian Open has received over the past few years with many of the world’s star players having competed in the event,” as- sesses Constantin Wiesmann this partnership. At the Australian Golf Club’s course, where the tournament is held every November, Heinemann Australia sponsors hole 8. Around the grounds, the company partakes

in various activities, such as a tent in which attendees can participate in different games. “It is an event which supports building brand awareness for Heinemann amongst mid to upper income Australians and international golf fans,” states Constantin Wiesmann. “Hosting hundreds of business partners as well as premium Heinemann & Me customers in the course of the four-day event fits in well with the Heinemann brand values.”

VIRTUAL GOLF AT SYDNEY AIRPORT

In addition, the cooperation was extended to the Heinemann Duty Free shop at the airport. For two months prior to the tournament, it hosted a pop-up, giving customers the opportunity to play a virtual reality game of golf. If they were members of the loyalty programme Heinemann & Me, or signed up for it, they entered a lucky draw offering a truly luxurious prize: a premium golf experience at the Emirates Australian Open, including flights to Sydney, accommodation in the city, tickets to attend the tournament (including an exclusive lunch at the Stonehaven Club), plus a TAG Heuer watch, a bottle of Jack Daniel’s Gentleman Jack engraved with the winner’s name and a set of golf clubs fitted to the winner. It would seem that the Heinemann Australia has definitely left the driving range for the fairway in their second full business year. FULL SHOPS AHEAD!

Heinemann Americas and Heinemann Asia Pacific become cruise retailers for the first time S_174 GLOBAL PRESENCE

Gebr. Heinemann subsidiaries in the U.S. and Australia, along with the headquarters in Hamburg, collaborated on a first on the high seas in 2017. An international Heinemann team worked across continents on a bid for a global tender from Carnival Gebr. Heinemann already has some experience on the German-speaking cruise market in Europe. Now Cruise Line, the largest cruise company in the the company is working on a comprehensive global strategy for the cruise channel. “We will be pooling our world according to passenger numbers, and extensive expertise in airport retail, cruise retail in Europe, as well as distribution and logistics for the cruise retail market,” presented its bid together to the potential customer says Nadine Heubel, CEO of Heinemann Americas. “Heinemann Americas was established in 2013 in order to – with great success! create a strategic milestone for our presence in the U.S. and to showcase the expertise of Gebr. Heinemann as a key player in the global travel retail industry. We are committed to becoming the first choice for operators, landlords, suppliers and of In 2018, Gebr. Heinemann will break into the course passengers, by offering flexible and comprehensive travel retail solutions on a global scale.” American and Australian cruise markets. Heinemann Americas (for the vessels Carnival Liberty, Carnival Fantasy and Carnival Ecstasy) and Heinemann Asia Pacific (for the Carnival Spirit) have each closed three-year contracts with Carnival Cruise Line. The Heinemann range on board the four ships includes perfume & cosmetics, liquor, tobacco & confectionery, accessories and watches, logo and fashion goods, and each category has been adjusted to suit the ships’ target groups.

Nadine Heubel, CEO Heinemann Americas S_176 GLOBAL PRESENCE

CRUISES ARE AN IMPORTANT TOPIC FOR THE FUTURE

Gebr. Heinemann is boarding the Carnival Cruise Line as a retailer. However, the company could theoretically have offered the customer two options: to come on board as a retailer with full responsibility for shop operations or as a distributor who provides a suitable range of products along with services such as consultation and training, as it does – for

example – for MSC Cruises. “For us, the international cruise market is an important topic for the future, and our global presence is a great advantage,” reports Max Heinemann, CEO of Heinemann Asia Pacific

in Singapore. “We’re in an ideal position to take on the cruise market.” HEINEMANN ASIA PACIFIC ON THE CARNIVAL SPIRIT THE DESIGN CONCEPT: A LOCAL SENSE OF PLACE From June 2018 Heinemann Asia Pacific will operate the largest of the new cruise shops, with a total area of 424 square metres on the Spirit. The ship sails the Tasmanian Sea and the Pacific for cruises of up to The design of all retail spaces on board the ten days. Although the ship is based in Sydney and administration for the vessel is carried out there, Carnival Ecstasy Carnival ships was spearheaded by Hamburg. The Heinemann Asia Pacific will manage this concession from Singapore. Thus the global collaboration is Gebr. Heinemann concept here is "a local sense of moving into its next phase. place", which it has successfully applied at airport shops around the world. Caribbean themes are reflected in the shop architecture for the vessels sailing US routes. But the shops on board will also reflect the Carnival Cruise Line brand image. This creates a comprehensive travel and shopping experience for passengers.

HEINEMANN AMERICAS ON THE CARNIVAL LIBERTY, Carnival Liberty FANTASY AND ECSTASY

Heinemann Americas will manage a retail area totalling around 800 square metres on the Carnival ships Liberty, Fantasy and Ecstasy, which sail around the Caribbean and to the Bahamas. On board, the shop concessionaire will cater to the needs of the passengers, the majority of whom are from the USA and have booked with Carnival Cruise Line, whose slogan is "Fun for all – all for fun", looking for an affordable, fun-packed holiday.

Carnival Fantasy Carnival Spirit SPOTLIGHTS 2017

A glimpse behind the scenes of Gebr. Heinemann 2,950 YEARS AT GEBR. HEINEMANN

Here’s to our long-time employees! P_182 SPOTLIGHTS 2017

20 YEARS 15 YEARS

Deborah Louise Püst, Frankfurt, since 1st January 1997 Christiane Biggemann, Dortmund, since 1st January 2002 Birgit Strack, Frankfurt, since 1st January 1997 Silke Gowens, Hamburg-Allermöhe, since 1st January 2002 Jasmin Vey, Frankfurt, since 1st January 1997 Patrick Schmidtke, Erlensee, since 1st January 2002 40 YEARS Cordula Fischer-Riepe, Head Office, since nd22 January 1997 Pierre Viarnaud, Head Office, sincest 1 January 2002 Oezguer Kurt, Erlensee, since 17th February 1997 Manuela Wolkenhauer, Head Office, sincest 1 January 2002 th st th Steffen Schindler, Hamburg-Allermöhe, since 17 February 1997 Frank Fischer, Berlin-Tegel, since 1 February 2002 Sibylle Holzschuh, Frankfurt, since 25 February 1977 Thuy Le Thi Phuong, Frankfurt, since 24th February 1997 Nina Maaß, Hamburg-Allermöhe, since 1st February 2002 Veysel Tütüncü, Frankfurt, since 12th March 1977 Andre Michael Gäbler, Erlensee, since 1st March 1997 Andre Piel, Hamburg-Allermöhe, since 1st February 2002 st th st Bettina Müller, Head Office, since 1 March 1997 Markus Kybart, Hamburg-Allermöhe, since 10 February 2002 Erika Lenzendorf, Head Office, since 1 April 1977 Hakverdi Turhal, Frankfurt, since 1st March 1997 Atakan Dogan, Erlensee, since 1st March 2002 Jürgen Baumann, Hamburg-Allermöhe, since 1st August 1977 Nina Buck, Hamburg, since 1st April 1997 Pietro Nisi, Hamburg-Allermöhe, since 1st March 2002 st rd th Panagiotis Ganiatsas, Erlensee, since 1 April 1997 Yvonne Freudenberg, Head Office, since 3 March 2002 Gerd Lange, Head Office, since 15 September 1977 Anna Edit Godzsak, Frankfurt, since 1st April 1997 Sophia Hyun-Chung Sanchez Fernandez, Head Office, since th11 March 2002 Malgorzata Guzowska-Gnacinski, Hamburg, since 1st April 1997 Holger Bening, Head Office, since 1st April 2002 Lars-Robert Heinsen, Head Office, since 1st April 1997 Johannes Sammann, Frankfurt, since 1st April 2002 Maarit Korpi, Frankfurt, since 1st April 1997 Nils Schneider, Hamburg-Allermöhe, since 16th April 2002 Kai Rodemann, Frankfurt, since 1st April 1997 Göksel Cakir, Hamburg-Allermöhe, since 1st June 2002 Nora Graf, Frankfurt, since 1st May 1997 Natascha Gostencnik, Frankfurt, since 1st June 2002 Heike Hemmann, Frankfurt, since 1st May 1997 Silke Hauschildt, Head Office, sincest 1 June 2002 35 YEARS 30 YEARS st st Elena Karavassiliadou, Frankfurt, since 1 May 1997 Michaela Heller, Frankfurt, since 1 June 2002 Petra Lang, Frankfurt, since 1st May 1997 Barbara Stroh, Head Office, since th18 June 2002 st th Ronald Schmidt, Hamburg-Allermöhe, 1 January 1982 Wilhelmine Ippolito, Cologne, since 13 April 1987 Jaklin Sarkissians-Mehler, Frankfurt, since 1st May 1997 Markus Loch, Frankfurt, since 24th June 2002 th st Peer Eikhof, Hamburg-Allermöhe, since 27 April 1982 Gerd Stapelfeldt, Hamburg-Allermöhe, since 1 August 1987 Axel Stadler, Head Office, since th16 May 1997 Ursula Badermann, Frankfurt, since 1st July 2002 st st Sabine Alba Valdes, Head Office, since 1 July 1982 Michael Thode, Hamburg-Allermöhe, since 1 August 1987 Elisabetta Costanza Castrogiovanni, Frankfurt, since 1st June 1997 Daniel Brants, Head Office, sincest 1 July 2002 st th Andreas Füldner, Hamburg-Allermöhe, since 1 July 1982 Beatrix Melic, Frankfurt, since 12 September 1987 Isabel Lopez Martinez, Frankfurt, since 1st July 1997 Andrea Fayed, Frankfurt, since 1st July 2002 st Wolfgang Engelken, Head Office, since 1 August 1982 Rina Quilling, Frankfurt, since 1st July 1997 Dirk Hanten, Hamburg-Allermöhe, since 1st August 2002 Konstantin Schäfer, Hamburg-Allermöhe, since 1st July 1997 Steffen Heiser, Hamburg-Allermöhe, since st1 August 2002 Ulrike Seibel, Frankfurt, since 1st July 1997 Margret Kasparek, Cologne, since 1st August 2002 Sven Albrecht, Hamburg-Allermöhe, since 1st August 1997 Bettina Krause Benatelli, Frankfurt, since 1st August 2002 Yvonne Hanisch, Frankfurt, since 1st August 1997 Anna Plotnikov, Frankfurt, since 1st August 2002 Frank Maeße, Hamburg-Allermöhe, since 1st August 1997 Nicole Rehmann, Head Office, sincest 1 August 2002 Skender Sinanaj, Hamburg-Allermöhe, since 1st August 1997 Abdus Samad Miah, Frankfurt, since 15th August 2002 25 YEARS Petra Christina Tietz, Frankfurt, since 1st August 1997 Naira Salomao de Santana, Frankfurt, since 15th August 2002 Nicolas Ostermann, Head Office, since th11 August 1997 Carsten Haub, Erlensee, since 1st September 2002 st st Ioan Damciuc, Erlensee, since 1st January 1992 Mohamed Hassani, Erlensee, since 1 September 1997 Thomas Raab, Frankfurt, since 1 September 2002 st th Jens Peter Linke, Hamburg-Allermöhe, since 1st January 1992 Kai-Uwe Koch, Hamburg-Allermöhe, since 1 September 1997 Manuela Boßmann, Frankfurt, since 15 September 2002 st th Tanja Röckinghausen, Head Office, sincest 1 February 1992 Ingo Krüger, Hamburg-Allermöhe, since 1 September 1997 Nils Güsmer, Head Office, since 16 September 2002 st th Kader Uenues, Hamburg, since 1st February 1992 Barbara Rapp, Frankfurt, since 1 September 1997 Lilli Zimmermann, Cologne, since 16 September 2002 nd th Adriane Santo, Frankfurt, since 6th February 1992 Sabine Willems, Frankfurt, since 22 September 1997 Birgit Huß, Head Office, since 19 September 2002 st st Ann-Kristin Gustavsson, Frankfurt, since 15th February 1992 Felix Bukowiecki, Hamburg-Allermöhe, since 1 October 1997 Gabriele Alexander, Head Office, since 1 October 2002 st st Mario Hoeck, Erlensee, 16th March 1992 Yasmin Lengsfeld, Frankfurt, since 1 October 1997 Claudia Fröhlich, Head Office, since 1 October 2002 st st Bozica Bardiovski, Frankfurt, since 1st April 1992 Ralf-Oskar Schöll, Erlensee, since 1 October 1997 Sabine Weinrich, Hamburg-Allermöhe, since 1 October 2002 st th Hans-Peter Fietsch, Hamburg-Allermöhe, since 1st April 1992 Florian Seidel, Head Office, since 1 October 1997 Manuela Grujic, Berlin-Schönefeld, since 7 October 2002 st th Britta Schulz-Kropp, Berlin-Schönefeld, since 13th April 1992 Frauke Tobaben, Head Office, since 1 October 1997 Silke Birkner, Berlin-Tegel, since 25 October 2002 th st Fredi Göttmann, Erlensee, since 1st May 1992 Parminder Parmar, Frankfurt, since 15 October 1997 Rachida Baba, Frankfurt, since 1 November 2002 th st Markus Menzel, Head Office, sincest 1 June 1992 Gislaine Schweinsberg, Frankfurt, since 15 October 1997 Jessica Ferrari, Frankfurt, since 1 November 2002 st st Maria Elfita Sander, Hamburg, since st1 June 1992 Kathrin Sachse, Head Office, since 1 November 1997 Jörg Meyer, Hamburg-Allermöhe, since 1 November 2002 st th Ruth Schernthaner, Frankfurt, since 1st June 1992 Sabine Solinas Jarrett, Frankfurt, since 1 November 1997 Jutta Theobald, Cologne, since 4 November 2002 st th Maria Andersen, Cologne, since 1st July 1992 Nadia Arabkhazai, Frankfurt, since 1 December 1997 Rocco Covello, Erlensee, since 15 November 2002 st nd Mohammad-Tawab Hosseini, Frankfurt, since 1st July 1992 Frank Beckhaus, Head Office, since 1 December 1997 Monika Schultze, Head Office, since 22 November 2002 st rd Monika Schäfer, Cologne, since 1st July 1992 Heike Schröter, Leipzig, since 1 December 1997 Claudia Schneider, Frankfurt, since 23 November 2002 st st Petra Ramm, Frankfurt, since 1st August 1992 Claudia Yazgan, Frankfurt, since 1 December 1997 Uwe Glieber, Erlensee, since 1 December 2002 st Thomas Blackburn, Erlensee, since 11th August 1992 Klaus-Peter Glindemann, Erlensee, since 1 December 2002 st Floricica Dutulescu, Erlensee, since 17th August 1992 Pamela Khan, Hamburg, since 1 December 2002 st Ricky Strack, Erlensee, since 1st October 1992 Heinz Schwember, Frankfurt, since 1 December 2002 st Marlies Huke, Berlin-Tegel, since 2nd October 1992 Roberto Traina, Frankfurt, since 1 December 2002 Halil Goeruer, Frankfurt, since 1st December 1992 AND THE WINNER IS

Gebr. Heinemann celebrated winning several awards in different categories in 2017 P_186 SPOTLIGHTS 2017

FRONTIER LIFETIME ACHIEVEMENT AWARD THE MOODIE DAVITT FOR CLAUS AND GUNNAR HEINEMANN DIGITAL AWARD 2017

Following tradition, the "Frontier Awards" were held after the "TFWA World Exhibition & Conference" in FOR HEINEMANN & ME

Cannes on 4 October. Claus and Gunnar Heinemann were awarded the "Frontier Lifetime Achievement The industry medium "The Moodie Davitt Report" Award" for their outstanding entrepreneurial performance and Gebr. Heinemann’s customer service in the recognised the Heinemann & ME customer loyalty travel retail sector. programme, with over 500,000 members, as best digital loyalty campaign. P_188 SPOTLIGHTS 2017 S_06 SPOTLIGHTS 2017

TWO HIGH-CALIBRE DESIGN AWARDS WENT TO "RAUM 1879"

The exhibition space depicting the history of Gebr. Heinemann, constructed in the headquarters’ new building "K5", won two high-calibre design awards. At the German Design Award 2018, which recognises innovative products and projects, their manufacturers and designers, "Raum 1879" (Room 1879) took the award for exhibition design in the category "Fair and Exhibition". And the interactive exhibition piece "Flows of Goods" was awarded with the Red Dot Award: Communication Design 2017 in the "Interface & User Experience" category. The exhibition piece shows the flow of goods on a virtual globe and viewers can move it using gestures. Michael Schulte (Director of Terrahe until 2016), Amir Rezaii Architects in Hamburg, and Designbüro Persch were responsible for the idea and design of the exhibition concept. P_190 SPOTLIGHTS 2017

FOX FINANCE AWARDS FOR THE ANNUAL REPORT AND CR REPORT

Both Gebr. Heinemann’s corporate publishing products enjoyed great success at the Fox Finance Awards 2017, a large competition focussing on communications efficiency. The corporate responsibility report "Responsibility. Teamwork. Tradition." took home the gold, and the 2016 Annual Report "Review. Insights. Outlook." took silver, while both brochures also took silver in the category "Fox Finance Visuals". P_192 SPOTLIGHTS 2017

THE 2016 BUILDING OF THE YEAR FOR THE EXPANSION OF THE HEADQUARTERS (K5)

The Hamburg association of architects and engineers (AIV) named the expansion of the headquarters (K5) the "2016 Building of the Year". The highly successful coordination with the existing building (K3) was mentioned during the presentation speech. Claus and Gunnar Heinemann attended the ceremony and accepted the award together with the architects from gmp and the structural engineer from the engineering firm Weber-Poll. The two owners thanked the head of the architecture department, Kai Böckler, and his team for their outstanding, professional support during the construction. P_194 SPOTLIGHTS 2017

THAT’S HOW YOU WANT TO SPEND OVERTIME

Redesigned HSV box impresses all visitors

Founded in 1887, the Hamburger Sport-Verein e.V., or HSV, is just eight years younger than Gebr. Heinemann. Both are well-known in Hamburg, and both can claim with pride to be part of the Hanseatic city’s history. The history of Gebr. Heinemann is closely interwoven with the area known now as HafenCity and the flair of the historical warehouse district. The atmosphere from the time the company was founded has been brought back to life in the Gebr. Heinemann box at the HSV stadium. With its nostalgic feel, heartfelt details and, of course, always-social guests, it may well be the most inviting corporate box in the Volks- park stadium and impresses more than just the HSV fans at home matches.

Oliver Heinemann and Florian Seidel

P_198 SPOTLIGHTS 2017

“There was a ‘blow away’ Heinemann highlight in Tel Aviv, Israel: “One particularly positive memory is of my It is 11:45 am on 9 August. The phone rings. It is the Israel visit to the summer party of our FAR joint Airport Authority on the phone to Amnon Tagori, General venture in Frankfurt. There I experienced Manager JR Duty Free at Ben Gurion Airport: a degree of cohesion and commitment IAA: How are you feeling, Amnon? across all levels of the team that I Amnon: Frankly, a little tense. have rarely seen before. With a team IAA: Well relax… you have won the tender!!! like that we can do great things!”

Karl-Heinz Dietrich, Senior Executive Vice President, YEAH! The JR-Heinemann partnership was Retail & Properties, Fraport AG born. And on 1 January 2018 we commenced the new concession. Thank you to everyone in Hamburg, Melbourne and Tel Aviv who made it happen!”

Garry Stock, Chairman Duty Free of James Richardson

“My 'special moment' of 2017? It certainly lasted not less than 365 days! In fact, last year I had the privilege of meeting the Gebr. Heinemann community for the first time, when I took global accountability of our joint business relationship. On top of the solid double-digit “My most memorable moment was undoubtedly the sales growth and the extraordinary brand activations that day we spent together brainstorming in Paris. we successfully executed together, I believe 2017 will It was a day where creativity met with fun to be recalled as the 'year one' of an extremely valuable share and prepare the future of cosmetics and strategic long-term partnership among the two in travel retail. Both the Heinemann and organisations of ours, where investments and Clarins teams, motivated by the same visibility, together with new product launches, strong values, were able to have open exclusives, and sales results will be witness of an and constructive discussions about real extraordinary acceleration. I’m highly convinced future projects.” the growing success of Campari Group and its Damien Tonneau, most famous brands within travel retail is tightly Director Travel Retail EMEA, Clarins Group connected to the success of Gebr. Heinemann and so it will be in the years to come.”

Alessandro Pincelli, Global Travel Retail – EMEA Director, Campari Group P_200 SPOTLIGHTS 2017

“Attending the 2017 Australian HR Awards as a finalist in the Human Resources Manager category was not only a privilege, but a humbling and proud moment as it allowed me to represent the Heinemann brand and also reflect on what we have achieved as a team at Heinemann Australia. I would be remiss to not thank the Heinemann team domestically and globally for their support, motivation, collaboration and enthusiasm in 2017. In addition, I would like to personally take this “Joy of life! Faithful to our Italian DNA, we like to celebrate opportunity to thank my Human Resources and share nice moments together. With the opening team for their continued hard work, enthusi- of the Frankfurt Terminal 1B Boutique, Bulgari asm and commitment as our success is reliant is proud to enrich the customer experience on each other’s contributions. Well done, team. And through travelling to the eternal city, once again, thank you.” experiencing la dolce vita and discovering

Che Lewer, Head of Human Resources Heinemann Australia (2nd from left) with team: more than 2,700 years of Roman heritage Haya Adra, Human Resources Officer, Matthew Northey, Human Resources Partner - Learning and Development, and Nicole Howe, Human Resources Partner that inspire our beautiful collections. This successful project is the result of a close relationship and trust with Heinemann and the Airport teams. We are looking forward to continuing our fruitful collaboration!”

“Our business relationship with Gebr. Heinemann has started Roberto Marino (Sales & Marketing Director Travel Retail Europe - Jewels, Watches & Leather goods, Bulgari - right) with Alban Lacroix (Marketing as a usual customer supplier co-operation. However, Manager Travel Retail Europe - Jewels, Watches & Leather goods), Massimo Panico (Area Sales Manager Travel Retail Europe - Jewels, Watches & Accessories) during the years it has changed into a real and and Jasmina Lüdemann (Buyer Watches & Jewellery Gebr. Heinemann) strong partnership. One of our highlights was the joint achievement of our great shop re-fit at the end of 2017 while bringing the shop atmosphere with brand personalisations such as Jo Malone and Mac to a next level. The Duty Free concept was born at Shannon Airport and has reached its 70-year anniversary. The success story will be continued and the first milestone for that is the contract extension with Gebr. Heinemann.”

Darren Smyth, Head of Commercial – Shannon Airport, Shannon Group plc. Imprint Publisher: Gebr. Heinemann SE & Co. KG, Koreastrasse 3, D-20457 Hamburg Phone +49 (40) 30 10 20, E-Mail: [email protected] www.gebr-heinemann.de

Contact person under media regulations: Lara Vitzthum, Gebr. Heinemann Corporate Communications

Design: TERRAHE KG & Co. KG, Koreastrasse 3, D-20457 Hamburg

Editorial teams: Gebr. Heinemann Corporate Communications, Schellenberg & Kirchberg PR GmbH & Co. KG, Sportallee 54, D-22335 Hamburg

Images: Alfred Brandl, Bob Leinders, Carnival Cruise Line Deutschland, Copper Dog, Dr. Jart+, Hendrik Kossmann, IGA-Istanbul New Airport, OceanCare, Oliver Heinemann, Play Studios, Sulwhasoo, Tom’s Photo, TUI Cruises

Lithography: Alfred Brandl, TERRAHE KG & Co. KG

Printing: Compact Media GmbH STATUS AS OF: MARCH 2018 OF: AS STATUS Gebr. Heinemann SE & Co. KG Koreastrasse 3 20457 Hamburg · Germany Phone +49 (40) 30 10 20 www.gebr-heinemann.de