INTERIM 2005 RESULTS

Transcription

1 PRESS RELEASE INTERIM 2005 RESULTS. Operating income continues to improve, gaining 8% to 35 million. Free cash flow is positive at 13 million (vs. a negative 33 million in winter 2004) In millions of euros 1 st Half st Half st Half 2005 Revenues Operating income Financial expense (25) (22) (20) Exceptional expense (21) (7) (4) Income tax 10 (2) (4) Amortization of goodwill (4) (4) (4) Minority interests (1) (1) 0 Net income/(loss) (29) (4) 3 Free cash flow (6) (33) 13 April 30, 2003 April 30, 2004 April 30, 2004 Net debt (436) (424) (378) Financial results for the six months ended April 30, 2005 show an 8% increase in operating income despite the major impact of natural disasters at the end of Revenues amounted to 750 million for the period, compared with 784 million in first-half 2004, representing a 4.3% decrease as reported and a 3.1% decline like-forlike (at comparable scope of consolidation and exchange rates). Excluding the direct impact of the Caribbean hurricanes and the Asian tsunami, revenues were up 1.5% for the half. Reported revenues were reduced by 35 million by the temporary closure of five of the most profitable villages (Punta Cana and Columbus Isle in the Caribbean and Phuket, Kani and Faru in Asia). Insurance settlements covering the operating income shortfall from the five closed villages totaled 24.7 million. This direct impact was calculated on the basis of the villages operating income for winter

2 The settlements did not cover the indirect impact on the planned objective from such factors as the opportunity cost of expected growth at the five villages, the decline in demand at nearby villages and the effect on bookings of postponing the ad campaign. Despite these factors, operating income continued to improve, increasing to 35 million from an already good showing of 32 million in winter 2004, and net income was positive for the first time in four years, at 3 million. Free cash flow swung to a positive 13 million, versus a negative 33 million in the prior year period. Debt continued to decline, to 378 million from 424 million at April 30, Operating income by region and business In millions of euros 1st Half st Half st Half 2005 Europe-Africa Asia The Americas Sub-total Villages Jet tours Other businesses (4) (1) (1) Operating income The good performance in Europe-Africa, led by high occupancy rates in the snow villages, the success of the new Marrakech village and robust Internet sales, was dampened by an increase in marketing and insurance costs. Business continued to recover in the Americas, as attested by the 14.4% gain in revenue per available bed (RevPAB) and further growth in operating income with reduced capacity. In addition, Internet sales were up significantly for the period. Asia was deeply affected by the December 26 tsunami, which led to the closure of three villages representing 30% of the region s total capacity. Business is recovering very slowly due to lingering fears about Asian destinations and airline capacity in the region has been reduced. Thanks to its successful up-market strategy, Jet tours posted a solid gain in operating income. 2

3 Critical milestones were reached in winter 2005 The value-driven business model has again been validated, with a 5.5% increase in RevPAB on the back of improvements in both the price mix and the occupancy rate. The success of Club Med s new strategic positioning can be seen in its new ad campaign ( There s so much more of the world to discover ), new logo and new brand identity (Club Med Style). Satisfaction levels reached a new record, with the number of very satisfied customers up 7.5% on winter In line with the terms announced last December, initial synergies with Accor, our leading industry shareholder, have been implemented in such areas as purchasing synergies, the deployment of cross-loyalty programs, and the development of a joint B2B offering. Additional growth drivers for winter 2006 These milestones have paved the way for additional growth drivers to be implemented in winter 2006: Sustained resegmentation: 95% of the village base will be 3T or 4T in winter 2006 (versus 91% in 2005) with the opening of Peisey Vallandry (4T), the upgrade of Les Boucaniers to 4T from 2T, the renovation and upgrade, from 2T to 3T, of Aime la Plagne, the closure for renovation of the 2T Flaine village. Faster upgrading to 4T standards: in winter 2006, 42% of the portfolio will be 4T (up 10 points from winter 2004) with, in particular, the upgrading of Kani and Cervinia from 3T to 4T. Extension of inclusive bar & snacking offers for all the snow villages in Europe in winter 2006, after the highly popular response in the Americas and successful testing in the 200% villages. Faster room reclassification depending on room amenities, location or the availability of extra services. This responds to customer expectations for accommodations and offers Club Med an effective driver of additional long-term growth. 3

4 Summer 2005 bookings In % increase in revenues Reported At June 4, 2005 Excl. direct impact of tsunami Europe-Africa + 8.4% + 9.8% The Americas - 2.4% - 2.3% Asia % % Total Club Med + 4.5% + 6.5% Jet tours + 14 % - The increase in Europe-Africa bookings reflects the initial positive impact of the new strategic positioning, supported by the ad campaign launched in March. Bookings in the Americas showed a slight decline due to high prior-year comparatives and a decrease in capacity early in the season. Asian bookings, which were up sharply in winter 2004, are still being affected by the indirect impact of the tsunami, mainly lingering fears and the reduction in available airline capacity. Jet tours has stepped up its growth dynamic and is benefiting from an upturn in the French market. 4

5 In discussing the interim results, Henri Giscard d Estaing, Chairman and Chief Executive Officer, noted that: Our winter results demonstrate that Club Méditerranée is on the right track. Our business model is working and our upmarket, friendly, multicultural positioning is aligned with the expectations of our customers. Critical milestones, such as the development of initial synergies with Accor, have been reached in recent months and have paved the way to leverage additional growth drivers as early as winter After the natural disasters at the end of 2004 and their impact of about 20 million on our planned objective as of the end of winter 2005, we are maintaining our target of around 100 million in operating income by the end of fiscal 2006, although this environment obviously makes it much harder to meet. Contacts Media: Thierry Orsoni Phone: +33 (0) thierry.orsoni@clubmed.com Analysts: Caroline Bruel Phone: +33 (0) caroline.bruel@clubmed.com 5