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Interim Results June 11, 2004 Key figures for winter 2004 Strong growth in operating income… (in millions of euros) Like-for-like revenues Operating income % very satisfied customers +4.5% Win 03 vs Win 02: +10% Win 04 vs Win 03: +9% 32 784 764 750 12 (4) Winter 02 Winter 03

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slide1

Interim Results

June 11, 2004

slide2

Key figures for winter 2004

  • Strong growth in operating income…

(in millions of euros)

Like-for-like revenues

Operating income

% very satisfied customers

+4.5%

Win 03 vs Win 02: +10%

Win 04 vs Win 03: +9%

32

784

764

750

12

(4)

Winter 02

Winter 03

Winter 04

Winter 02

Winter 03

Winter 04

Business model validated

slide3

Validation for the new business modelin America

  • Club Med America: actions undertaken are delivering results

(€m)

Like-for-likerevenues

Operatingincome

Environment

  • An improving economic and geopolitical environment

+9.4%

Club Med highlights

129

  • Increased business

118

1) Success of the Total All Inclusive package

2) Growth in direct sales and sales through travel agencies

3) Impact of low prior-year comparatives

10

2

Winter 03

Winter 04

Winter 03

Winter 04

  • Substantial increase in operating income
slide4

Validation for the new business modelin Asia

  • Club Med Asia: first positive impact from prior-year comparatives

(€m)

Like-for-likerevenues

Operatingincome

Environment

  • Economic upturn in certain markets
  • Health situation under control

+4.6%

Club Med highlights

  • First positive impact from low prior-year comparatives (Bali,SARS) revenues up 25% YOY in April alone
  • Increased sales in Japan, Australia andSingapore, and start-up of sales in China

66

63

3

0

Winter 03

Winter 04

Winter 03

Winter 04

slide5

Validation for the new business modelin Europe

  • Club Med Europe: firm resilience in a tough market

(€m)

Like-for-likerevenues

Operatingincome

Environment

  • No economic upturn in Europe
  • Difficult economic conditions in France

Club Med highlights

425

425

19

  • Sustained success of Ski packages
  • In France: increased sales through the new distribution channels  Surge in Internet bookings Success of the new indirect network
  • Firm resistance from the Club Med agencies
  • Decline in business from the traditional indirect network and via phone
  • Improved resistance in the rest of Europe

14

Winter 03

Winter 04

Winter 03

Winter 04

slide7

Key figures

Winter 02

Winter 03

Winter 04

(in millions of euros)

Consolidated revenues

  • Reported
  • Like-for-like

816

785

784

750

765

784

Operating result

(4)

12

32

Group net result

(25)

(29)

(4)

Capital expenditures

(83)

(40)

(44)

Disposals

45

44

33

Free cash flow

6

(6)

(33)

Net debt

(421)

(436)

(424)

slide8

Activities

Winter 03

Winter 04

Variation

763,800

Number of customers

  • incl. Club Med customers
  • incl. Jet tours customers

771,100

+1.0%

639,200

642,400

+0.5%

124,600

128,700

+3.4%

-0.7%

Hotel days sold

4,012,000

3,984,000

-4.5%

Capacity in hotel days

5,807,000

5,546,000

Occupancy rate

69.1%

71.8%

+2.7 pts

+2.4%

Like-for-like revenues

€765 m

€784 m

+5.9%

Like-for-like revenues – Stay / HD

€104.4

€110.6

slide9

Price / Mix

Change impact

Change in business base

Volume

Consolidated revenues

  • Change winter 04 vs winter 03: +2.4% on a like-for-like basis

(in millions of euros)

-6

+25

-17

-3

785

(1)

(2)

(4)

(3)

784

(1)

Winter 04

(3)

Winter 03

(4)

(2)

slide10

Operating result by zone and business

Winter 02

Winter 03

Winter 04

(in millions of euros)

Europe

13

14

19

Asia

2

0

3

(13)

2

10

America

  • Villages activity

2

16

32

Tour operating

(3)

0

1

Other activities

(3)

(4)

(1)

(4)

12

32

  • Total Group
slide11

Analysis of results from Villages activity

(in millions of euros)

Winter 02

Winter 03

Winter 02

OPERATING RESULT

2

16

2

2

0

2

  • Change impact
  • Volume impact
  • Mix/Price impact
  • Others

(2)

(5)

(7)

10

22

32

4

(1)

3

OPERATING RESULT

16

32

32

Winter 03

Winter 04

Winter 04

slide12

Analysis of results in Europe

(in millions of euros)

Like-for-like

Reported

W.03 Op. result

14

Winter 03

Winter 04

Revenues *

430

429

  • Change impact
  • Volume impact
  • Mix/Price
  • Others

0

(7)

Margin on var. costs

234

234

9

% of revenues

54.4%

54.5%

3

Fixed selling costs

(52)

(52)

19

W.04 Op. result

Fixed operating costs

(155)

(153)

Overheads

(13)

(10)

Operating result

14

19

% of revenues

3.3%

4.4%

* Including interzone revenues

slide13

Analysis of results in Asia

(in millions of euros)

Like-for-like

Reported

W.03 Op. result

0

Winter 03

Winter 04

Revenues *

82

82

  • Change impact
  • Volume impact

Asia / AsiaEurope / Asia

  • Mix/Price
  • Others

1

0

Margin on var. costs

46

47

1

% of revenues

56.1%

57.3%

(1)

3

Fixed selling costs

(12)

(11)

(1)

Fixed operating costs

(30)

(29)

3

W.04 Op. result

Overheads

(4)

(4)

Operating result

0

3

% of revenues

0%

3.6%

* Including interzone revenues

slide14

Analysis of results in America

(in millions of euros)

Like-for-like

Reported

W.03 Op. result

2

Winter 03

Winter 04

Revenues *

167

164

  • Change impact
  • Volume impact

America / AmericaEurope / America

  • Mix/Price
  • Others

(1)

2

Margin on var. costs

98

99

4

% of revenues

58.7%

60.4%

(2)

10

Fixed selling costs

(23)

(21)

(3)

Fixed operating costs

(70)

(66)

10

W.04 Op. result

Overheads

(3)

(2)

Operating Result

2

10

% of revenues

1.2%

6.1%

* Including interzone revenues

slide15

Jet tours operating result

(in millions of euros)

Winter 02

Winter 03

Winter 04

119

Revenues

128

133

12.0

  • Semi-net margin

15.0

15.7

10.1%

% of revenues

11.7%

11.8%

(14.2)

  • Other costs

(14.8)

(14.8)

(2.2)

Operating result

0.2

0.9

slide16

Other activities operating result

(in millions of euros)

Operating result

Winter 03

Winter 04

  • Club Med Gym
  • Club Med World Paris
  • Club Med World Montreal

0

(1)

(2)

(1)

(1)

N/A

slide17

Result statement

Winter 03

Winter 04

(in millions of euros)

Revenues

785

784

Operating result

12

32

Net financial expense

(25)

(22)

Net income from equity companies

0

0

Net exceptional expense

(21)

(7)

Taxes

10

(2)

Goodwill amortization

(4)

(4)

Minority interests

(1)

(1)

Group net result

(29)

(4)

slide18

Net financial expense

(in millions of euros)

Winter 03

Winter 04

Credit cards transaction fees

(4)

(4)

Interest expense

(13)

(13)

Others

(2)

(2)

Net financial expense excl. change impact

(19)

(19)

Realized & unrealized exchange gains & losses

(6)

(3)

Net financial expense

(25)

(22)

Cost of debt

5.3%

5.9%

Average debt

494

454

slide19

Result statement

Winter 03

Winter 04

(in millions of euros)

Revenues

785

784

Operating result

12

32

Net financial expense

(25)

(22)

Net income from equity companies

0

0

Net exceptional expense

(21)

(7)

Taxes

10

(2)

Goodwill amortization

(4)

(4)

Minority interests

(1)

(1)

Group net result

(29)

(4)

slide20

Balance sheet

04/30/03

04/30/04

04/30/03

04/30/04

(in millions of euros)

Fixed assets

  • Tangible assets
  • Intangible assets
  • Financial assets

Shareholders equity& minority interests

568

475

901

773

73

66

Provisions

211

189

98

94

159

129

Working capital (1)

Total fixed assets

1,210

1,056

436

424

Net financial debt

Net deferred taxes

26

38

TOTAL LIABILITIES

1,236

1,094

TOTAL ASSETS

1,236

1,094

Gearing

77.0%

89.3%

(1) At 04/30/02 working capital was €127 m

slide21

Cash flow statement

(in millions of euros)

Winter 03

Winter 04

Cash flow

(10)

28

Change in working capital

(4)

(50)

Change in provisions

4

0

Funds from operating activities

(10)

(22)

Investments

(40)

(44)

Disposals and others

44

33

Free Cash Flow

(6)

(33)

Change impact and others

(9)

(2)

Cash variation

(15)

(35)

slide23

Summer 2004

  • Capacity by zone:

Sum. 03

Sum. 04

Variation

(in thousands of HD)

5,705

5,867

Europe

Asia

America

+2.8%

-2.6%

987

961

-13.6%

1,675

1,447

8,367

8,275

-1.1%

TOTAL WORLDWIDE

slide24

Summer 2004

  • Capacity by category:

Sum. 02

Sum. 04

Sum. 03

(capacity in %)

2 Tridents

3 Tridents

4 Tridents

Cruise ships & villas

27%

18%

21%

57%

63%

59%

14%

18%

18%

2%

1%

2%

TOTAL

100%

100%

100%

Further improvment in the product mix

slide25

Summer 2004

  • Summer 2004 bookings (vs summer 2003), at May 29, 2004

Cumulative,at May 29, 2004

Over the last four weeks

Like-for-like revenues

-9.3%

Europe

-2.1%

+5.6%

America

+29.1%

+63.2%

Asia

+34.7%

+2.4%

Total Club Med

-1.6%

+5.2%

Jet tours

+4.4%

slide27

The benefits of moving up market

  • A village portfolio now ready to move upmarket

1998 2003 2005

% huts and 2T 34% 19% 9%

% 3 and 4T villages 66% 81% 91%

In number of beds

A clarified, consistent offering

slide28

The benefits of moving up market

  • A profitable business model, value-driven instead of volume-driven

Village profits

Selling price

Costs

Very satisfied GMs(basis 100 index)

100

117

148

Comfort level

3 

4 

2 

An upmarket strategy,combinig high margins and satisfied customers

slide29

The benefits of moving up market

The Club Med brand: the basis of an intense customer relationship

  • The higher people move uprange, the more they are attached to the brand
  • A very high percentage of customers say they’ll come back: 85%
  • The more demanding the customers, the stronger their attachment

A strong brand that creates high expectations

(Source: Sorgem Fonds de Marque – France, Italy, USA – January 2004)

slide30

The benefits of moving up market

  • The strength of the Club Med brand: the example of France

Criteria for choosing a vacation club

Club Medcustomers

Competitioncustomers

  • Reputation 43% (no.1) 21% (no.4)
  • Destinations 35% (no.2) 37% (no.2)
  • Type of stay 21% (no.3) 10% (no.6)
  • Organization 20% (no.4) 17% (no.5)
  • Activities 19% (no.5) 6% (no.7)
  • Price 16% (no.6) 44% (no.1)

Club Med, a differentiated positioning

(Source: U&A NFO Sofres – France, Summer Villages – February 2004)

slide32

Clear, identified expectations

Vacations are critically important for our current and potential customers

  • Substantial financial investment: 1 month of salary (France)
  • Psychological investment: - a time of sharing for families- just one week of vacation (USA)
  • An investment indicative of social status (Italy)

Vacations are « a rare occasion, when quality counts »

slide33

Clear, identified expectations

Expectations of customers who like Club vacations

More human, more personal style

  • More personalization
  • More services and organizational flexibility

More innovation and higher quality

  • More innovative activities
  • Greater balance between sports and cultural/artistic activities

More open to and integrated into the local environment

  • A club that’s more open to the outside world
  • Also, the local culture is better integrated inside the Club

(Source: NFO Extra Tout Compris study – France, Italy, Netherlands – July 2003)

slide34

What will Club Med be like tomorrow?

Club Med, a unique positioning

« FRIENDLY UPMARKET »

slide35

What will Club Med be like tomorrow?

Moving the village portfolio faster upmarket in 04/05

  • Cherating Beach: upgraded from 3 to 4 Tridents
  • El Gouna: opening as a 3 Tridents
  • Marrakech: - opening of la Palmeraie as a 4 Tridents - Médina upgraded from 3 to 4 tridents - creation of Riad
  • Sant’ Ambrogio: upgraded from 2 to 3 Tridents
  • Coral Beach: reopening after top-to-bottom renovation
  • Turquoise: rooms renovated – village center redecorated
  • Chamonix: upgraded from 3 to 4 Tridents
  • Val d’Isère: entirely restyled 4 Tridents
  • Pesey Nancroix: opening as a 4 Tridents

A strategic evolution of Club Med to upmarket

slide36

What will Club Med be like tomorrow?

  • Heading for incomparable…
  • Three-year marketing agreement with Star Airlines: - Highly quality standards, - personalized service, - modular purchase of a volume of hours, - exclusive airports package.
  • Revamping purchasing process: - target of around €30 million in 2006, partially reinvested in customer services
  • Motivated GOs: going upmarket is everybody’s business

… a comprehensive approach to moving upmarket

slide37

Conclusion

By being the uncontested leader

in friendly upmarket all-inclusive vacations,

with a profitable business model,

the strategy of moving upmarket has redefined

an incomparable Club Med that creates value

…a confirmed target:

around 100 million euros in operating income in 2006