Good afternoon, Welcome to Dufry's Ha lf-Year Results 2021 Presentation. These are Yves Gerster, Dufry's CFO, and Julián Díaz, Dufry's CEO, participating in the call. In today's presentation, we are going to use the document disclosed this morning on our website. First, please go to page 2 and briefly comment on today's agenda. We are going to comment on the group highlights, then trading update, followed by financial, obviously, update of the information, and the outlook. If we move and start with group highlights on page 4 of the presentation. First half of 2021 was characterized by a slow start due to the ongoing restrictions in traveling. During the second quarter, the improvement was felt week by week. Progress on vaccination and implementation of supportive travel protocols, we see as clear signs of recovery in the respective regions.
Especially the demand for travel retail and the unique shopping experience we offer gives us confidence for the months ahead. We expect to open around 1,700 stores by the end of the month. For comparison, one year ago, only around 1,000 shops were open. In August, by the last day of August, we are expecting that 70% of the shops, with 85% of the sales capacity, will be reopened. After a successful reorganization, focused clearly now on driving the recovery, and in the middle of a mute environment, we won tenders and secured concessions. This is a part of our recovery strategy. We are not only thinking in this short-term growth strategy. We are thinking in the future, and especially what we have as our core business, as well as two areas that for us are very relevant, the channel and the geographical diversification.
Concession wins included several contracts in Central America and the Caribbean, among the most important tourist destinations worldwide. Several locations in the U.S., including digitalized stores and convenient new shops openings. Complementing new and renewed concessions are strategic partnerships for us, especially in China, in the partnership we have with HDH and Alibaba Group. In this case, the idea is to explore long-term opportunities in the growing Hainan market. As is already known, we opened 6,000 sq m of commercial space during the first part of 2021, and we are expecting to open around 33,000 in a new building with the name Aquarius by the end of August 2021. Short- and mid-term supportive will be digital initiatives, with store digitalization progressing, for example, in the U.S., and pilot projects for customer engagement and analytics running in almost all the world.
Please, let's move now to page 5 with the financial highlights. Organic growth half year 2021 at -69.5% compared with 2019, with the second quarter at -66% and clearly visible progress in July with -50.4% net sales versus 2019. Turnover trending in the right direction. Regional differences obviously are expected. Based on passenger situation in airports and other channels, we continue to work with our landlords, partners and applicable solutions in regard to concessions with tangible results. Half 1, we have agreed and signed CHF 495.4 million of rent releases. New organizational setup, centralized management of expenses, strong cost discipline, and improved processes translated into personnel and other expenses savings. Both allowed us to upgrade our cost and cash flow scenarios for the rest of the year. Half year 2021 cash consumption better than expected, with close to CHF 50 million lower cash outflow per month on average.
We disclosed at the beginning of the year a target with a -55 scenario of CHF 60 million average cash consumption per month. We achieved also our targets of a comprehensive refinancing well ahead of maturity and continue with a nearly unchanged strong liquidity position, having now the flexibility to focus the full organization on opportunities ahead of us. Please, let's move now to page 6 for commenting on the environmental, social, and governance highlights. Sustainability is at the core of our Dufry strategy implementation, as we commented in previous calls, and we are further driving our environmental, social, and governance engagement. It is now also supported by a dedicated leadership position for diversity and inclusion, with Sarah Branquinho joining the Global Executive Committee as of 1st of July.
We continue to drive the different initiatives which are materialized from our shareholders, stakeholders and a company perspective with a focus on environmental impact of our partners and ourselves. Employees, supplier, and customer engagement in our discussion are also part of the reporting. In this slide, we are listing an update of the different projects since the last time we commented during the Q1 call. Let's move to slide 8 for commenting on organic growth evolution. Gradual improvement with uptake in June, -60.4%, and especially July, -50.4%, with gradual improvement in August, so far very similar. Driven by regions most advanced with vaccinations and defined travel protocols. Recovery, as expected, driven by domestic and intra-regional international travel and supported by the summer holiday season, expected to be prolonged this year, probably beyond September.
International long-haul travel may resume slowly, we see much advanced approaches from authorities to protect people while being sensible about social consequence. As a result, intra-regional international traffic accelerating. Based on current visibility, we expect travel and turnover in the U.S., Central America, and EMEA to continue to be in positive trends. Encouraging are also, for example, news from the U.S. to consider allowing international travel from fully vaccinated visitors, or decision from the U.K. last week to remove travelers from India, United Arab Emirates, Qatar, or France from quarantine lists and to add several additional European countries to its green list. As previously commented on Asia and South America, still we don't see a lot of light because the restrictions remain intact.
Seat capacities from airlines are continually increasing, and industry associates are upgrading 2021 and overall recovery outlook, as we are going to comment later during the presentation. Elevated spend per passenger and average ticket value are reassuring that travelers feel comfortable in airport environment, and shopping continues to be integral part of the travel. For continuing with explanation, please, let's go and move to page 9, and we will comment on the turnover and organic growth by region. Americas are the most advanced, with the U.S. and Central America and Caribbean recovering the strongest in the region. Total recovery was -59.3% half year compared with 2019. The U.S. are trading at -23.9% in July compared with 2019, supported by a strong convenience presence from Dufry and its Hudson brand, and -6.2% compared with 2020.
Central America and Caribbean airport channels are trading at -17.6% compared to July 2019, with some regions above or close to their July 2019 performance, such as Dominican Republic, Puerto Rico, Aruba, Antigua, Bermuda, and Mexico. South America's performance was impacted by the more severe pandemic situation compared with North America and EMEA, especially in Argentina and Brazil. This was partially mitigated by easing of restrictions in other countries like Colombia, Ecuador, Peru, Uruguay, and meanwhile, we see vaccination process also in the important Brazilian market. Regarding Asia Pacific, we expect an update of travel from 2022 on, as our footprint is geared towards international travel and most locations are still closed. Obviously, the situation remains very weak, 84.5% drop compared with 2019. Domestic travel started to resume.
Our operations in Shanghai and Chengdu in China are trading at a higher level compared with 2019, and Macau also performing above regional average. Authorities are working on setting up Asian travel bubbles with vaccination progress across the region as most important catalyst over the next months. Europe, Middle East, and Africa saw an uptake of the second quarter, with June at -73% and July at -57.9% compared with 2019. Performance advanced most in Turkey, Greece, several Eastern European countries, Middle East, especially Egypt, and Northern Africa, and stood at close to 70% compared with 2019 for these countries combined. Southern and Central Europe, as well as the U.K., saw gradual improvements during the first six months of the year, solely related to restricted measures.
The efforts across the European Union and region overall for a stronger collaboration on protocols and aligned approaches are encouraging, and important countries like Spain, Italy, France, and the U.K. are advancing. Please, let's move now to page 10 for commenting on sales by region and sector. Regional and sector split mirrored the reopening patterns during the first half of the year. The regional net sales split saw Europe, Middle East, and Africa contributing with 32.2% of total sales, and Asia-Pacific with 4.5%. With finally Americas contributing around 54.4%. Duty paid performance at -60.2% versus 2019, due to the easing travel restrictions in domestic markets, and represented 54.5% total sales, while duty-free represent 45.5% with -78.9% performance. Please consider that the European Union is a customs union, and duty paid applies to most countries within the region.
Regarding Brexit, I think with Brexit in force since the beginning of the year, the U.K. is not part of this custom union anymore, with a positive impact on duty-free like we are going to comment later. Duty-free will pick up as soon as intra-regional, international, and low-haul international travel starts to resume more broadly. However, recovery is not dependent on one of the other category, as we are flexible to align our commercial offer and operations. Let's move now to page 11, where we are going to comment on net sales and performance by channel. The channel split mirrors the current travel patterns, and underpins our continued diversification strategy. In H1, the airport channel represented 82.4% of total sales, increased performance from -77.9% during Q1 to -68.8% in Q2 compared with 2019. Is an indicator for continued demand for air travel once possible from a regulatory perspective.
We will continue to diversify our channels to broaden our offering and to meet new and renewed demand. In H1, railway stations and other, including wholesale, represented 11% of the total sales. Border, downtown, and train stations and hotels around 4.8%, and cruise lines and seaports around 4.8%. Other channels increased due to the wholesale activity done in the distribution centers, with Hainan supply collaboration contributing the most of the sales during half year 2021 in this channel. If we move now to page 12, for finally discuss about the performance by category. In page 12, what we have is the split of the categories. From a category perspective, perfume and cosmetics remains leading, 27.8% of the total, with food and confectionery having seen increased demand during the first six months of the year, and as already in 2020 with 24%.
Category mix reflects obviously the current reopening patterns with domestic flights and inter-regional, international gradually improving. We expect this trend to continue and position ourselves accordingly during the rest of the summer. We have, for example, food and beverage-related openings in the U.S., dedicated coffee shops, and are about to launch a new shop-in-shop concept, Evolve, including also classic convenience food and beverage corner. With normalization of travel, other product categories will see normalized demand as well as, and obviously, current shifts are also related to the reopening schedules. As previously commented on, we will continue with our reopening based in shop-by-shop profitability, taking into consideration footfall and passenger profiles in the respective locations. In page 13, we are going to comment on retail space development. Opening and refurbishments increased during the second quarter compared with Q1, while we continued to manage our capital allocation in a disciplined manner.
Highlights included additional store at Istanbul Sabiha Gokcen International Airport in Turkey, and new shops in Athens, Kos, Santorini and Thessaloniki in Greece. Both countries are important leisure travel markets and are performing well above group average. Dufry added retail space on Porto Alegre in Brazil and Saint Petersburg Pulkovo Airport in Russia. Already existing space at both location was also refurbished to form a unique commercial offer for customer and successful grand openings. In the U.S., we roll out Hudson Nonstop concept with Amazon Just Walk Out technology at Dallas Love Field Airport and Chicago Midway Airport. One project to increase store digitalization globally that will be expanded gradually. Additionally, new opened store includes Salt Lake City International Airport and Virgin Hotel Las Vegas, the latest contributing to our diversification strategy. Now let's move to page 14 and comment on our current development in Hainan.
Dufry entered partnership with Hainan Development Holdings, HDH, and Alibaba Group to collaborate in a joint project in China, specifically in Hainan. The global duty-free plaza is at the Mova Mall in the city center of Hainan's capital, Haikou, and consists of two buildings, Aquarius and Capricorn. In our first phase, 3,000 square meters we opened at the beginning of the year, only a few weeks after entering into an agreement with our partners. We are now in phase 2, and are in the process of starting operations of additional 30,000 square meters featuring beauty, fashion, liquor, food, and electronics, expected to be open by the last week of August, beginning week of September. The supply is currently managed by Dufry's Hong Kong operation, and is set to be transferred to the Hainan operation as soon as practicable, and the full organization is finally settled in Hainan.
The first collaboration gives us the opportunity to explore the attractive but highly regulated Hainan market, and its long-term potential for us as an international travel retail company. Let's move now and discuss the financial update. I will hand it over to Yves for commenting on this part. Yves, please.
Thank you, Julián , and welcome to everyone on the line from my side. On slide 16, we provide an overview of financing measures successfully implemented since the beginning of the health crisis last year. We were supported by equity and debt investors, existing ones, but also new ones, our relationship banks, rating agencies, and many others. The relationships we established already before the pandemic proved to be resilient and new partnerships were formed. We have talked about the various initiatives already in detail when they were executed. Highlights during the first six months of the year was certainly the comprehensive refinancing of overall CHF 1.6 billion, with a well-diversified product mix, including senior notes and bank debt. As a consequence, we have no material maturities coming up before 2024, and we are looking at a weighted average maturity of 4.6 years for all outstanding debt.
We also received an extension of the covenant holiday by 4 quarters until June 2022, with a 5 times leverage threshold for September and December 2022. The current financial setup provides us confidence for the months ahead, and we are in a strong position to focus fully on reopenings and new opportunities to drive recovery and growth. Moving on to the next slide. The H1 2021 income statement is characterized by continued significant cost savings and some one-off effects related to gross profit margin, the pandemic-related impairments, and financing-related costs. Our gross profit reached CHF 666.1 million. I will refer to the margin impact in more detail on the next slide. We achieved an adjusted operating profit of -CHF 211 million and an adjusted net profit of -CHF 348.1 million.
What is important to note here, despite almost CHF 400 million lower turnover during the first six months of the year, adjusted operating profit increased by CHF 253.6 million, and adjusted net profit increased by CHF 234.1 million versus half year 2020. Excluding one-off effects, the increase would have been even more pronounced. The improvement was driven by continued cost savings. Considering MAG relief, personal, and other expenses, we realized overall P&L savings of CHF 780.8 million compared to half year 2019. In detail, lease expenses amounted to plus CHF 93.1 million. This position includes CHF 270.5 million waivers booked as MAG relief. Those waivers relate to concession fees of the years 2020 and 2021, however, which have only been signed in 2021. Based on the current status of signed agreements, we expect CHF 305.9 million to be accounted for as MAG relief for the full year 2021 P&L.
Another CHF 216.7 million will be recognized in lower lease expenses, depreciation of right-of-use asset, and lease interest, of which CHF 87.4 million will benefit future years. Again, this amount is based on what is signed so far in 2021. If we achieve further agreements during the second half of the year, this would come on top. Personal expenses decreased by 38.9% compared to half year 2020 based on the reorganization and ongoing cost discipline. Other expenses decreased by 22.4%, also related to the tight cost control. Depreciation, amortization, and impairments stood at -CHF 738.2 million versus -CHF 1,185.5 million in half year 2020. The decrease relates to lower depreciation and amortization as a consequence of the pandemic-related impairments we booked already in 2020. During the first six months of this year, we recognized another CHF 100.7 million of impairments.
As mentioned previously, impairments on depreciable and amortizable assets only represent a timing shift. They are triggered quasi automatically from an accounting perspective by following a conservative approach on current cash flow projections in relation to the remaining contract length. Moving on to the next slide, looking at the gross profit in more detail. Our gross profit margin reached 56.1% in the half-year. Slide 18 shows you the bridge compared to half year 2019. It is important to note that we were in a position to protect our retail margin compared to 2019. We are still expecting retail margin to be slightly lower during the reopening as we are focusing on cash generation. However, the demand for travel retail, once travel resume, is clearly supportive.
The margin was temporarily affected by the turnover mix, continued short-term inventory management through wholesale, and a higher duties and freight ratio due to lower sales volumes. The main impact relates to the supply of our Hainan collaboration in China through our Hong Kong-based distribution center. We expect the handover of the supply to the local joint venture at some point in the second half of the year. Full year 2021 margin will still be impacted from the mix, and we expect a similar level as for the first half of 2021. Moving on to the next slide 19. Our cash flow metrics improved considerably compared to H1 2020. Adjusted operating cash flow reached -CHF 47.7 million compared to -CHF 103.6 million in the 6 months of the previous year.
Equity free cash flow stood at -CHF 275 million versus -CHF 749.1 million in the first half of 2020. Taking into consideration the strong cash flow management and the execution of the financing measures during the first half, change in net debt was only -CHF 7.5 million. Let's look at the key elements of the cash flow statement on the next slide. On the next slide 20 illustrates the improvements briefly mentioned already. Despite year-over-year CHF 399.6 million lower turnover, our equity free cash flow improved by CHF 474.1 million. Most lines have contributed positively. Lease, personal, and other expenses as discussed previously. In addition, net lease payments amounted to CHF 139.3 million. The reduction compared to 2020 refers to the relief we received from landlords, as well as the derecognition from IFRS 16 in some of the contracts.
As a reminder, lease payments reflect the fixed part of a concession contract. We successfully renegotiated some of the contracts, which now do not contain a fixed MAG anymore. Changes in working capital reached -CHF 120.9 million. This represents an improvement of CHF 353 million compared to half year 2020. Income tax paid and cash flow related to minorities decreased related to the loss situation of most operations. Interest paid remained at the same level as in 2020, while CapEx was further reduced. Moving on to the next slide. From a quarterly perspective, cash consumption during the second quarter only reached CHF 55.7 million, a significant improvement versus 2020. Cash consumption here is defined as equity free cash flow. The overview on slide 21 shows the quarterly evolution since the beginning of the crisis and visibly displays the measures we have implemented.
Our expectation at the beginning of the year was a cash outflow of around CHF 50 million on average per month for the first half of the year in a -40% full-year turnover scenario, and around CHF 60 million on average per month for the first half in a -55% full-year turnover scenario. We achieved to reduce the average monthly cash consumption to CHF 45.8 million during the first half. We also show the bridge from an equity free cash flow to change in net debt. During the second quarter, we have early converted our existing CHF 350 million bond into equity. The amount of CHF 320.9 million was recognized now as equity in the second quarter this year. The remaining amount of CHF 28.9 million was already considered as equity last year when the convertible was issued.
The equity component of the new CHF 500 million convertible was considered already in the first quarter of 2021. Currency impact on net debt relates to our currency mix in debt positions. Net of currency translation impact on net debt, the net debt would actually have decreased during the first half of 2021. Moving on to the next slide 22. For a monthly periodic view, equity free cash flow turned positive from May onwards. This is actually important. During the last three months, including July and the first week of August, the company has actually generated positive cash. The graph presented on slide 22 displays the typical seasonality of our business with cash outflows in the first quarter, also under normal circumstances. It also shows that we were in a position to translate current turnover, which is still significantly lower compared to 2019, into cash.
We expect the positive cash generation to continue throughout the third quarter. The fourth quarter is normally subject to typical seasonality, with cash flow also depending on this year's specific travel patterns. Our cash generation capability remains strong, and Julián will provide more information on our scenarios for the year later during the presentation. Moving on to the next slide 23. Turning to working capital dynamics now. Changes in working capital reach -CHF 120.9 million, but please remember that in half year 2020, we had an outflow of CHF 473.9 million. To have a better understanding about the changes in net working capital, let's look at the core and the non-core separately. Changes in core working capital only amount to - CHF 6 million.
Our core working capital saw increases in trade payables in line with turnover development, which were offset by increases in receivables and inventories related to the current reopening patterns. The core net working capital was also impacted by the pre-sourcing for our Hainan collaboration, with an additional 30,000 sq m being opened at the end of Q3 2021. Other working capital saw an outflow due to an increase in non-trade related accounts receivable with various third parties, with a sizable amount related to the cash deposit made to a court in the ongoing legal process with one of our airport partners. For the net working capital overall, we continue to expect an inflow for full year 2021 and also 2022, with the magnitude depending on the turnover recovery. Moving on to the next slide.
We continue to manage our capital allocation in a highly disciplined manner. CapEx was significantly reduced from CHF 125.3 million in half year 2019 to CHF 60 million in half year 2020, and now to CHF 33.6 million in half year 2021. We adopted our overall CapEx deployment approach as part of the reorganization, plus made use of increasing efficiencies due to the standardization of store fit-outs. In that regard, it is important to note that we are not expecting a catch-up in CapEx, as we are not compromising our business necessities and are still engaging in opportunities when they arise. Moving on to the next slide. Starting on the left side with the net debt. Net debt amounted to CHF 3,351.5 million at the end of June. This compares to CHF 3,344 million at the end of December 2020, and to CHF 3,659.4 million at the end of June last year.
Over the last 12 months, we strengthened our debt position based on financial measures taken, including the successful refinancing during the first half of 2021. Looking at the updated maturity profile on the right side of the slide, we have no upcoming material maturities before the year 2024. Our weighted average maturity positively increased to 4.6 years. The 2024 revolving credit facility currently is undrawn. The proceeds of the euro and Swiss franc senior notes were used to fully repay the 2022 euro term loan and to partially repay the 2022 US dollar term loan. The remaining term loan, previously expiring in 2022, has been extended to the year 2024. Our main objectives of the refinancing were extending the maturity profile, protecting liquidity, and prolong the covenant holiday by four quarters, while executing the best possible terms in current market environment. We have achieved all those objectives.
Moving on to the next slide. The final slide on the presentation from my side provides you with the details on the current liquidity position. During the first six months of this year, liquidity increased from CHF 1,905.7 million- CHF 2,172 million. The continued strong liquidity position was supported by our significant cost savings, tight cash flow management, and successful execution of our comprehensive refinancing during the first half of 2021. Given the current financial profile, we expect to be well-positioned during the future months of reopening. With that said, I hand over back to Julián.
Thank you, Yves. Let's now move on to page 28 for commenting on the reopenings. I comment on that, but I guess it's very important to remark what the situation is right now. July performance, already mentioned it, but it's very important to emphasize that the trends we see in the respective regions with vaccination progress very fast. In the most important clusters, we have seen a significant development in July. Central America and Caribbean, -17.6%, in all cases compared with 2019. North America, -23.9%. Mediterranean, with -32.3%, and total company, -50%. We are not facing at all a problem with the demand. I think the problem here is travel restrictions and related, obviously, limitations for the movement of people.
This specific situation will be released step by step, and we can obviously confirm that every time that the restrictions are released, the business is recovered very fast. Monthly sales progress for regions with resuming of travel. This is giving us the confidence and motivation to accelerate our commercial and operational excellence initiatives and engaging in opportunities for strengthening our business during the recovery. As commented on before, first days of August continuing the same trend with a slightly better performance than the -50.4% versus 2019 reported for July. Most important, it is possible to even outperform summer 2019 in individual regions like Turkey, Egypt, Ecuador, Dominican Republic, several Caribbean islands, which are opened for touristic traffic or locations across the U.S., for example, in Florida. Please, let's move to page 29 and comment on the global air travel passengers projections.
In this page, what we see is the different updated based in the institutions data provider that we can comment on. Throughout the last few weeks, industry associations have positively updated the recovery outlook. ACI, IATA, and Air4 casts are expecting now a recovery in passengers numbers by 2023 on, driven by domestic traffic and interregional international traffic. Passenger assumptions for the year 2023 are between for the year 2021, sorry, are between -44% and -54% compared with 2019. Given the current visibility or expectations, is closer to the lower end of this range with -55%. More recent upgrades reflect confidence of the industry and independent data providers. From Dufry perspective, turnover recovery might be in line with passenger expectations. [However] recovery to 2019 equity free cash flow levels is expected to be faster, likely even in Q4 2022, and with full year in recovery 2023.
We would like also to comment in page 30, next page, about our updated cost and cash flow scenarios for 2021. Provided cost and cash flow sensitivities for the two turnover scenarios at the beginning of the year were -40% and -55%. Not changing the turnover scenarios, however, current trading and visibility of external parties and our sales trends towards the -55% scenario for the full year 2021. However, we are in the strong position to be able to upgrade both our cost and cash flow sensitivities based on cost saving executed, relief on minimum annual guarantees negotiated with our landlords, and our disciplined cash flow management. We are positively updating as follows.
In the scenario -55%, the sensitivities in concession fee are moving from 35% - 32%, in personal expenses from 19%- 18%, in all cases on turnover, and in operational expenses from 10%- 9%, maintaining the CapEx target in CHF 130 million. Note that in this case, the expectation is achieve CHF 1.2 billion Swiss franc savings versus 2019 in this -55% turnover scenario, which is also reflected in the cash flow expectations. In H2 2021, -CHF 15 million average monthly cash flow, equity free cash flow, as if explained before, updated from the CHF 20 million before. Note that minimum annual guarantee relief refer to certain passenger expectation. As a consequence, these CHF 495 million Swiss francs commented during the presentation cannot be one-off transferred to the -14% scenario turnover. In this case, it's clear that the 55 scenario is the reference for us in 2021.
In summary, we increased cost savings potential for the year from CHF 630 million-CHF 770 million, communicated as of March to around CHF 1.2 billion, in this case, including also the MAG relief signed up to June 2021. In slide 31, we will comment on the shops reopen. Once more, we reopen our retail business gradually following single location productivity scenarios and in line with easing of travel restrictions by governments and reassuring of operation by airports and by other landlords. At the end of July, more than 80% of sales capacity was reached by the Americas and EMEA, with APAC reaching slightly above 50% of potential sales compared with 2019. The expectation for August is that especially the Americas will continue to reopen shops and increase potential sales.
The total that we are expecting is around 70% of the shops with 85% of the sales capacity reopened compared with 2019. In page 32, like in previous calls, we comment on customer insights based on our internal online survey done from June 29th to July 26, 2021. Most of recent data suggested that more than 57% of travelers are eager to resume travel and have already booked flights for the next 12 months. Close to 70% of these flights are for leisure or visiting family and friends, in line with current trends. Already 30% are expecting to take up business travel within the next year. This number would be at the same level as before the pandemic in case of Dufry's passengers profile. Another encouraging findings are related to the U.K. Brexit and the impact of the tax decisions taken by the authorities, and the duty-free regulations.
We are seeing sales increase on liquor and tobacco across the different channels, airports, ferries, et cetera, up between 50% and 100%, depending on locations increase. Positive halo effect on other categories as well, supported by higher conversion numbers. Those are early indications as the U.K. is still in the process of opening up. As we comment on, obviously, the decisions to reopen were taken during the last 10 days. Now, please go and move on to page 33, and we will comment briefly about the conclusions we extract from our half year results 2021 presentation. I think there are probably three subjects and one remark. First, we have seen, especially in Q2, an encouraging reinitiation of operations in most of the regions, progressing in parallel with the improvement of health COVID-related conditions and the release of travel restrictions.
We expect to operate close to 85% of sales capacity by the end of August. We are also supporting this reopening and taking advantage of the situation with retail commercial and operational initiatives, as well as concession wins and extensions for improving the performance in our locations. The second, obviously big block of remarks is we update our expectation for 2021 regarding the target of cost savings for achieving CHF 1.2 billion compared with 2019. These decisive actions result in a lower cash monthly consumption, -CHF 45.8 million during H1, compared with -CHF 60 million previously communicated. As a consequence, we update also full year 2021 equity free cash flow outlook.
The third one, it is also relevant for concluding the presentation to comment on the successful refinancing executed in H1 and the strong liquidity position achieved on June 30th with CHF 2.172 billion, providing sufficient liquidity for driving our reopening plan and growth acceleration. Finally, a comment or remarks a few words regarding Dufry strategy 2021, 2023. We are in the process of developing the basis for accelerating our recovery and enhance the performance in growth and generation of cash with focus in 3 specific areas, strengthening the core travel retail business with obviously several initiatives, diversification of channels and geographies, and accelerating our global digitalization project. That's all from our side regarding the presentation. As always, the Q&A section could start now, and all the questions obviously are welcome. Thank you very much.
The first question is from Joern Iffert from UBS. Please go ahead.
Good afternoon, Julián, and good afternoon, Yves. Thanks for taking my questions. The first one would be, please, on the incremental MAG release of around CHF 250 million versus your previous scenarios you have provided. Can you share with us how much of this is really residing in cash savings in this year? Would it be fair to assume around 50% of this? The second question would be please linked to your gross profit margins. Some quarters ago, you had negative impact from promotions, if I remember correctly. This is not the case anymore, but now you are guiding the gross profit margin recovery can take until 2023. Is this only linked to mix, or are you also planning any special promotions to be more attractive on pricing in the next 12- 18 months?
The third and last question, if I may, please, on food and beverage, as many airlines are cutting structurally food and beverage offerings for short-haul flights, and you are mentioning that you are planning more shop-in-shop concepts for food and beverage, what is roughly the revenue opportunity you are seeing here over the next 2-3 years? Many thanks.
Thank you, Joern. If you want to talk about the cash effect of the MAGs.
Yes. Look, thank you very much, Joern Iffert, for the questions. For the first point, what I can make sure, and I think what is important is that all MAG reliefs we have communicated will lead to a one-to-one relationship to lower cash outflows. That's the first point, and I think it's important. The second one is in respect to the split. As you have rightly pointed out, part of the CHF 200 million additional MAG reliefs will affect the cash flow this year, and the part will affect the cash flow next year. How much the split is, we are not disclosing, but your indication you have provided sounds about right.
Regarding the gross profit, the answer is yes, we have obviously control, very tight on promotions and other type of discounts. We believe that these promotions will be needed when the traffic will accelerate. Far, we have seen the opportunity to increase the gross profit margin during the second quarter. As probably you remember, I commented on a possible 150 basic points gross profit margin impact due to retail part. I can obviously comment on that. The gross profit margin due to retail will be slightly negative or similar than in 2019. The difference in gross profit margin will be mostly generated this year to the mix of wholesale and depending how the wholesale is going to obviously impact. We are trying now to accelerate the setup of the organization in Hainan for allowing the organization in Hainan to buy directly this merchandise.
Obviously this will have a positive impact in the average gross profit margin by the year end. In terms of retail, the acceleration of the recovery of the gross profit margin is giving me the opportunity to say that the gross profit margin without influence of mix will be recovered in 2022. Regarding food and beverage, you are completely right. We have obviously a complete set of initiatives for complementing the offer in all the locations where is possible. In most of the cases, we have created a program for accelerating the opportunity of selling merchandise in two levels. Levels of standard food and beverage in convenient stores, especially in the U.S., and in the second level, in the other shops, in the duty-free shops, mainly with confectionery expanded displays.
For the next 2 or 3 years, we believe it's a great opportunity for us, not only because now it's also, as probably you remember, we said that we went at that time with Hudson public with the idea to accelerate the expansion of food and beverage in the U.S. Now, I can say that with the new circumstances in the market, Dufry is interested to expand the food and beverage, not only in the U.S., even worldwide. How much and how long? This obviously depends on the circumstances. There are two possibilities here. One is the acceleration of organic growth in food and beverage. That, in my view, initially is going to be in the U.S.
The second one is possibility to do acceleration in non-organic growth. This is something, obviously, that doesn't depend on us, depending on the circumstances of the market, depending on the opportunity of the recovery, and depending, obviously, on the opportunities available in the market.
Thanks a lot.
The next question is from Mariotta Lorenzo from Bank of America. Please go ahead.
Hi, guys. Thank you for today's call. Just two questions from me. Firstly, you seemingly found a little bit more in terms of personnel and other expense savings. Should we be expecting those to impact your sustainable cost targets, or is that more of a transitory saving? Second is just to confirm, did you say that you would expect free cash flow to equity to be back to the 2019 level, in 2023? If you did, does that include the sustainable cost-saving targets?
Look, let me pick up on those two questions. Not entirely sure if I got them right, so let me try to answer, and then you will need to let me know if this is correctly understood. On the personal expense savings, obviously the savings we generate this year compared to 2019, as well as last year, are significantly higher. Last year and this year, we obviously still, I don't know if the word profit is the right expression, but profit from the lower turnover, and therefore, the savings on the P&L are also more pronounced than what we assume is going to happen then in the long run, i.e., when we recover back to the 2019 sales.
In respect to the free cash flow to equity or the equity free cash flow, there what we have said is that it is our assumption that this is recovering faster than top line. Now the question is, obviously due to some additional cost savings we generate. Now the question is by when we expect or you expect the turnover to recover entirely to 2019 levels. In our case, we believe that this is around late 2022, and then in the first full year, 2023. In that regard, taking into account what I just said, because the cash flow should recover slightly faster than turnover, we can assume that between 2022 and 2023, we will see again a similar cash flow as in 2019. Is that answering the question?
Yeah. I guess, if I was to make the assumption of full year 2023 recovered, you would expect to see the 2019 cash flow plus the cost savings, right? The CHF 400 million sustained cost savings.
No, that's not correct, and that's not what I wanted to say. Look, probably we need to go step by step. The first thing is, let's assume that the year 2023 we see a full recovery in respect to turnover on the year 2019. If that happens, you should have all the long-term cost savings reflected in the P&L. What you also need to consider are a number of additional points. The first one is, if we have significantly higher profitability, that will also come at the cost of some higher tax expenses. On top of that, you will also need to consider that in some of our locations, we have minority interest. Assuming that to some of those minorities, we do pay a dividend, the CHF 400 million of permanent cost saving will translate into a cash flow, which is considerably lower than that.
Let's assume for the sake of argument, a 25% tax rate, income tax rate, that's already CHF 100 million. Minorities impact on top. Basically the CHF 400 million translate on the equity free cash flow level on something before take, rough numbers, maybe CHF 250 million. What you also need to take into account are some potential, inflation on personal expenses in term jurisdictions and some other impacts.
Yeah, that's fair. Super helpful. Thank you very much.
The next question is from Gian Marco Werro from ZKB. Please go ahead.
Thank you, everybody. 3 questions from my side. Thank you, Yves and Julián , for this very detailed presentation again. First question is, in relation to the catch-up of your CapEx. You mentioned that you do not see a catch-up necessary. However, what is the new CapEx level that we should consider once Dufry sales are back on normal levels? Let's also come back to this, 2023 scenario, maybe. Another question is in relation to your personal costs. There, I see that these are really, significantly down versus 2019 levels, nearly 60%. How are you organized to hire again quickly enough, then also qualify people to serve the returning travelers and to not partly face a shortage of available people as we see, for example, in other service industries at the moment?
Maybe a third question, not sure if you can give us some more details there. I think it's really important as Spain is around 10% of your sales usually pre-pandemic. Can you quantify about how many minimum annual guarantees you are currently in negotiations or in discussions with Aena, where you agree on the relief for MAG and where you do not agree at the moment? Thank you.
Okay. This is Julián speaking. Regarding CapEx, I have to confirm that as soon as the business is recovered, this company will require between 3 and 3.5 on turnover per year, including both type of CapEx, recurring CapEx and also new CapEx for investments. This is a rule that, is depending on obviously the acceleration of sales. Regarding personal expenses, the most important one is obviously the number of people that we dismiss and the number of people that we move to furloughs. Depending on the reopening, we are in the position to reopen as, is obvious because this is the history during 2020 and 2021, all the spaces that we need. We have a special program.
It's a special welcome back program that has identified positions and names of specific employees that will be recovered and obviously, reinitiated in the company as soon as the business is back. When we have a problem, obviously, we try with the local services to provide support to the organization. For example, probably the only place that so far we have been, in a more difficult situation regarding new employees is in the U.S., where as you probably heard, that it's very difficult to reengage all the employees because there are employees that doesn't want to come back, and there are employees that they found something else. We have not been limited so far for reopening due to lack of personnel. We have a program for the next 12 months, as I said, in order to engage with the employees as soon as they are needed.
Regarding Spain, I cannot comment too much about Spain. We didn't agree about the offer that Aena did. We believe that we have the right to get a higher discount. The case now is in the court. As always, and I comment on that, we are working with Aena from the commercial point of view and from the business point of view, trying to accelerate the sales. In parallel, this case that probably will be finally decided by the court in the first instance along 2023.
So far what we have won, and this is also disclosure, is an injunction that we put as a consequence of avoiding the payment of the minimum guarantees in 2020 so far in 2021. As far as the decision is not final in any of the obviously the fronts open, to comment on that is very difficult. Thank you.
Thank you.
The next question is from Anna Murray from Barings. Please go ahead.
Hi. I think this may be following on the question about Aena, I wondered if you could elaborate a bit more on the outflow in other trade receivables that you saw during the first half of the year. What drove that? My second question is, apologies I got cut off, the very first question of the Q&A session about MAG savings. Would you mind just repeating what you said about the incremental savings and how much of that will be cash cost saving?
In respect to the non-core, you will see a number of different effects. Most of that is related to concession fees, receivables or payables, basically payables, and also some other impacts, which are cash or non-cash relevant, but which are already reflected on the P&L. It can be any kind of movements. Typically, over time, this is normalizing, but you will see temporarily some swings in that position. What I said in respect to the second part, in respect to the MAC or minimum guarantees, there what you need to assume is that all the concessions we have negotiated and where we have confirmed that we have achieved the MAC relief, that this is cash relevant. Having said that, not all of that is cash relevant this year. It can be split between this year and next year, depending on when the MAC payment typically would occur.
Okay, thank you. Do you mind just elaborating then specifically about the non-core trade receivable movement in the first half of this year? What drove that?
Look, yes, I can do that. It's the typical movements we see in this line, which basically, give me a second. It can be anything in relation to, for example, credit card receivables or payables. It can be related to inventories, not because that would be core. It can be any prepayments of concession fees we do or personal expense changes. If, for example, you have some increase or decrease in personal expense payables, in relation to sales taxes, in relation to taxes of any kind, also income taxes, financial derivatives, et cetera. The biggest position for this year were related to what I've already mentioned, some increase in relation to a guarantee we have provided to the court, and also in relation to personal expenses, in relation to concession fees, and in relation to sales tax and other taxes. Those were the key positions, and also financial derivatives.
Thank you very much. That's very helpful.
The next question is from Yvonne Chao, from Nan Fung Trinity. Please go ahead.
Hi. Can you hear me?
Yes.
Yes.
Thank you very much. I just have a quick follow-up question because I didn't catch it correctly, I think. Even though the personal savings this year is higher than your guided flow has increased, you're saying that the sustainable cost savings remains CHF 400 million, is that correct?
I think it's slightly different. The remaining cost sustainable savings are CHF 400 million within the total cost universe. CHF 280 million of this CHF 400 million.
Okay.
Is related to personal expenses, and the difference is operational expenses.
Okay. Whatever is increased, compared to previous guidance, basically transitory, is temporary. The permanent savings is still CHF 400 million.
Personal savings, as we communicated, is CHF 400 million, with the split I just mentioned.
Okay. Thanks.
The next question is from Edouard Aubin, from Morgan Stanley. Please go ahead.
Good afternoon, Julián and Yves. 2 questions for me. The first one is on the sales in North America in July. As you said, I think you're down 23% versus July 2019. If you could give us a rough idea of what was the breakdown in North America between international and local travel pre-COVID. If you could tell us if locals are now already up to the extent you can in North America versus 2019, and if so, what's the shape of your P&L roughly in July versus 2 years ago? That's question 1. Question 2 is, Yves you gave us quite a bit of comments on cash flow, but just to come back on the P&L. If you look at the group sales, again, assuming group sales in 2023 would be at or above 2019, the CHF 8.8 billion.
Would it make sense to assume that your adjusted operating profit would be in excess of CHF 1 billion versus less than CHF 800 million in 2019? Assuming that's the case, which I think it would be around 400 basis point improvement, would it be more or less evenly split between lower personal expenses and lower rental charge? That would be helpful. Thank you.
I will answer the first part. As you know, we don't disclose specific information about countries. Let's talk about region North America. Previous split of sales were around 80% generated in duty paid, 20% generated in duty free. The problem is that the most important part of the duty free is around 85% of the total sales drop compared with 2019. The difference, obviously, for achieving this good performance is generated via duty paid. Yves Gerster, you want to talk about the second one?
Yes, thank you very much. In respect to the adjusted operating profit for the financial year 2023, it's obviously hard to say all detailed lines of our future business plan. But your question was if it's in excess of CHF 1 billion in case we do CHF 8.8 billion turnover, and the answer to that is, but take it as a pinch of salt, is yes. It's in excess of CHF 1 billion adjusted operating profit.
Basically, if I'm not mistaken, Yves, I think, since the IPO, your highest operating profit margin was around 12%, if I'm not mistaken. Again, doing the math ballpark, you think that by 2023, you could be potentially reaching towards the top end of the range in terms of operating profit that year, potentially?
Yeah. Look, we don't give guidance of that kind, but potentially, yes.
Understood. Thank you.
The next question is from Andrea Martel from Neue Zürcher Zeitung. Please go ahead.
Yes. Hello. Do you hear me?
Yes. Perfectly loud and clear.
Oh. Okay. Thank you. Could you give me an example, what's the typical way a lease is renegotiated? Or what's the typical How much discount do you usually get? Or can you give any general information or maybe information about Zurich, how it's done there?
Thank you for the question. We don't comment on specifics on any regard, because obviously, concessions are only one in one place, and it is very dangerous. In general terms, what we try is to adapt the contract to the reality of the business. This is achieved in most of the cases today, when we renegotiate base the rent in the number of passengers during the year.
This is the basic change. This change, so far in most of the cases, is basically for the years 2020, last year, and for the year 2021, this year. For the future, most of the contracts remain the same.
The typical contract is not about number of passengers?
The typical contract. No. There are different contracts in travel retail. The most important part of the rents we pay is variable, is not a fix. What we are discussing here in most of the cases, because it's the concern, is the Minimum Annual Guarantees. In general terms, if we were talking about a normal year, most of the rents are variable. Variable means percentage on sales, percentage, obviously, rent on sales and/or rent per passenger. This is happening in most of the contracts.
[But] in a situation like the situation we are today, the associated risk with the contract is the part of this contract that could be identified as Minimum Annual Guarantees. This Minimum Annual Guarantees is what we have shown last year and this year, that is possible, obviously, in good faith to renegotiate with the landlords and/or airports. This basically is what I said regarding adapting the rent to the number of passengers in these years.
This means there's no minimum guarantee or that even this minimum annual guarantee is adapted to the number of passengers?
It's actually that.
Yeah. Thank you.
The next question is from Tom Gibney from BNP Paribas. Please go ahead.
Hi. Just a quick one. You mentioned that you might be open to doing an organic expansion in food and beverage to expand your offering there. What would be the financial constraints for that sort of acquisition? Would you consider anything, I guess larger, i.e., sort of more than CHF 100 million?
I think probably the most obvious to say is that we are focused in cash preservation and cost savings and the recovery. Anything else is behind what is the target of the company now. In general, M&A is a possibility, and we are always interested, but obviously forward in terms of timing, depending on the circumstances and depending on the recovery. If the question is, are you going to be involved before the recovery is confirmed in an M&A strategy? This is not the first priority, and this is not what I said.
Okay. Thank you.
The next question is a follow-up question from Joern Iffert from UBS. Please go ahead.
Thank you for taking my follow-up questions. It's on your comments on the equity free cash flow for 2023 again, please. When I understand you correctly, you assume that 2023 has potential to fully recover the top line to 2019 levels, and then you are saying this should also result, that you can achieve the 2019 equity free cash flow level. Should it not be the additional CHF 250 million from cost savings, just to make sure that there is no misunderstanding? Thank you.
Look, again, what I said before is that let's assume in the year 2023, the top line has recovered entirely. Yes, we should see the additional cost savings. They would translate on the equity free cash flow and give or take the CHF 250 you mentioned before. What you would need to consider on top of that, potentially, depending on how your model works, is any increase in concession fees, inflation in personal expenses, et cetera. Whatever you would consider comes on top in your model, you would need to add there or deduct.
Okay. Thank you.
There are no more question at this time.
Okay. I would like to thank to all the participants in the call and telling us always we are ready for any type of clarifications or further clarifications needed in the investor relations office or Yves or myself. Thank you very much for participating.
Thank you very much.