A Year of Growth for Club Med in 2012 despite a challenging
environment in Europe
MIAMI, Dec. 7, 2012 /PRNewswire/ --
- Business volume up 3.7% to €1,515
million
- 4 and 5 Trident
customers up 7% increase [+ 57,000
]
- Operating Income Villages up
1% to €62 million
- Net income before tax and
non-recurring items up 7.3% to €35
million
- Net result €2
million
- Gearing -10 points at
23%
- Free cash flow up 45% to
€55 million
Xavier Mufraggi, CEO of Club Med North America, comments on the
fiscal 2012 results as a reflection of Club Med's success in the
U.S. saying:
"Club Med North America is pleased to announce
another profitable year in 2012, with our best results in more than
10 years despite a challenging market, illustrating the success of
a change in business model that aligns with an upscale and
family-focused strategy.
The success of the renovation of Sandpiper Bay in
Florida is one of the key elements
in Club Med North America's impressive performance. The resort
surpassed expectations and illustrates the importance of having an
all-inclusive family resort in the U.S. Sandpiper Bay was not
the only resort responsible for our growth, and even despite
challenges in the market, the region has also garnered more
sustainability through an increase in brand loyalty, and an
acceleration of new guest recruitment in resorts worldwide
(including ski destinations and additional group bookings.)
Club Med continues to keep a pulse on the industry in order
to offer today's travelers an unparalleled and dynamic vacation
experience at more than 80 locations around the
world.
For 2013, we will continue to invest in our portfolio by
opening new resorts in Pragelato Vialattea, Italy, Belek, Turkey and Guilin, China, while also renovating current
properties in Rio Das Pedras,
Brazil and Cherating Beach,
Malaysia. Specifically in North
America, we will continue to focus on our points of
differentiation vs. the competition. For example, we will reinforce
the positioning of our sports offering through a new concept
surrounding "Active Vacations" set to launch at our Sandpiper Bay
property. To further strengthen our positioning as the leader in
unique children's offerings, this spring Club Med will introduce
the most competitive pricing for children in the market by
extending our kids under 2 stay free to kids under 4.
In response to the increased interest from American and
Canadian customers in our unique ski product, Club Med has
prospective plans to open a new ski resort in North America. Our brand already has 50 years
of experience in ski vacations and 23 ski properties worldwide with
high occupancy rates and an outstanding level of guest
satisfaction.
We are confident in the North American market and look
forward to upcoming projects and new growth."
Commenting on the annual results, Henri
Giscard d'Estaing, Chairman and Chief Executive Officer,
noted that:
"Club Mediterranee's reported an increase in revenue for
fiscal 2012 despite accelerating deterioration of the European
tourist markets during the summer. Thanks to its powerful
positioning on the upscale market, the Group was able to protect
its margins and demonstrate the resilience of its business
model.
Club Med is now in a position for a new step forward in the
deployment of its international expansion strategy, by leveraging
its stronger financial position, its upscale portfolio of villages
and the ability to interface one-to-one with customers through
direct distribution network.
Club Med is positioned to capture growth in the market of
all-inclusive upscale vacation packages in order to get by the end
of 2015 one in three customers to come from fast-developing
economies."
1. A year of growth in 2012 despite
worsening market conditions in Europe
-- Key figures for fiscal 2012 (1
November 2011 - 31 October
2012)
- Village business volume (corresponding to total sales
regardless of village operating structure) rose by 3.7% to €1,515
million from €1,461 million in fiscal 2011.
- Village revenue totaled €1,447 million, up 2.2% with
increases of 2.8% in the Europe-Africa
region (of which +2.5% in France
in a market declining by 2.6% according to CETO1) and
4.5% in the Americas region. In Asia, revenues dipped 2.6% due to the sale of
the Lindeman Island village in Australia. Excluding Lindeman Island, revenue
from the region was up 2.8%, helped by a 24% rise in the number of
Chinese customers during the fiscal year.
- RevPAB (revenue per available bed) at constant exchange
rates was 2.1% higher, at €99.3, versus €97.3 in fiscal 2011,
reflecting a 1.8% improvement in the average price per hotel day to
€139,3 and a one-point rise in the occupancy rate to just under
69%.
-- Profitability preserved attesting to the business
model's robustness.
- EBITDA Villages was stable at €126 million. EBITDA
margin stood at 8.7%, close to the 9% target announced last
June.
- Operating Income Villages rose to €62 million from €61
million in fiscal 2011, lifted by higher contributions from the
Americas and Asia. These two
regions now account for over two-thirds of total operating
income villages, reflecting the effectiveness of the Group's global
strategy.
- Operating loss from the management of assets amounted to
€26 million, with the €32 million cost of closing non-strategic
villages partly offset by gains on disposal of the Meribel Aspen
Park village and other assets.
- Other operating income and expense represented a net
expense of €14 million, of which restructuring costs accounted for
€10 million.
- Finance cost - net represented €8 million versus €16
million in fiscal 2011. The €47 million reduction in average net
debt led to interest savings of €3 million, while profits on sales
of shares and provision reversals had a positive impact of €4
million.
- Net income before tax and non-recurring items rose
slightly to €35 million after quadrupling in fiscal 2011.
Attributable net profit was stable at €2 million.
- The Board of Directors meeting held on 6 December approved the
2012 financial statements. It also indicated that it would like for
shareholders to benefit from the Company's improvements. This could
be done through purchase of shares to be cancelled under the
shareholder buyback program which will be submitted at the Annual
Shareholder Meeting. Due to the lack of visibility on the
fiscal 2013 earnings, in the currently worsening economic
environment and declining European tourist market, the Board
believes that this option is preferable to paying a cash dividend
for fiscal 2012.
-- Club Med has three major strengths to help it withstand
the challenging environment in France and the rest of Europe
- A strong financial position, with growing positive
underlying free cash flow. In fiscal 2012, free cash flow stood at
€55 million compared with €38 million the previous year, or €36
million versus €26 million excluding the impact of asset disposals
and village exit costs. In addition, net debt is
significantly lower at €118 million, reflecting a 10-point
improvement in gearing to 22.6%, while the ratio of net debt to
EBITDA villages has improved considerably and now stands at less
than 1x. It was divided by two since 2010.
- A fully refurbished, upscale village offer, with 4 and
5-Trident villages representing two third of total capacity at
31 October 2012, a 3.6-point increase
over one year. Three villages were sold during the year (Meribel
Aspen Park, Lindeman Island and Bora-Bora) and five non-strategic
villages were closed (Smir, Coral
Beach, Djerba Meridiana, Beldi and Nabeul).
The Valmorel village in France
that was opened last December has confirmed the validity of the
Group's strategic positioning in the uscale and very upscale
segments. With an occupancy rate of 81% in its first year, the new
village attests the leading position of Club Med's mountain village
offer, even in the summer.
- Tighter customer relations, with over 60% of sales
carried out directly. Online bookings have continued to grow,
accounting for 20.5% of sales in fiscal 2012.
2. Fiscal 2013 outlook
-- A slightly growing Winter 2013, led by demand in the
Americas and Asia.
As of 1 December, winter 2013 bookings (business volume at
constant exchange rates) were up 1.1% on the prior-year season. In
2011, bookings at that date represented two-thirds of the winter
total.
Bookings in the Europe-Africa
region were down 0.8%. In France,
Club Med Business bookings that reached records last year were
down, while the individuals were up +1.2% in business volume. This
figure translate in number of customers to a -3.1%, while the
market is down 10.3% at the end of October, according to
France's tour operators
organization CETO.
Bookings in the Americas and Asia were up by 7.2% and 5.0% respectively,
lifted by the more favorable economic environment in these regions
and, in particular, by the dynamism of Brazil, China
and other fast-developing markets.
Bookings for the past four weeks were down 0.6% with a drop of
5.1% for the Europe-Africa region, partly offset by booking that
are up in Americas and Asia.
-- The uncertain environment calls for prudence in
2013
In light of the sluggish economic environment in Europe, particularly France, the following measures have been
taken:
- Winter 2013 capacity has been adjusted by 3.7% compared with
winter 2012. In Europe-Africa,
closure of Meribel Aspen Park and Coral
Beach along with temporary shutdowns of certain villages in
North Africa have led to a 5.4%
capacity reduction. For the summer 2013 season, Europe-Africa
capacity has been shrunk by 6.2% in response to the uncertain
economic environment.
- Capital spending will be kept at the fiscal 2012 level of
around €55 million and will concern both ongoing projects to move
the village offer upscale and necessary maintenance work. In
addition, a further €10 million or so may be spent on acquiring
equity interests to speed up the pace of growth in certain high
potential markets such as Brazil
and Russia.
- Costs reported under "Operating loss from the management of
assets" should be considerably lower than in fiscal 2012 now that
the program to move the village offer upscale is nearing
completion.
Based on the above outlook, the Group should report positive
free cash flow in fiscal 2013.
3. 2015: a new milestone in Club Med's
global strategy to capture growth in the all-inclusive upscale
vacation package market
-- Step up the pace of growth in fast-developing
markets
With growth set to remain strong in major high potential markets
such as China, Brazil and Russia, Club Med is aiming for one in three
customers to come from fast-developing markets by the end of
2015.
First among these will be China, which will become Club Med's second
largest market by 2015 with 200,000 customers, five villages
(including Guilin, the country's second 4-Trident village which
will welcome its first guests in spring 2013) and a new premium
resort hotel brand – by Club Med – aligned with local
demand. The "by Club Med" large upscale resort-hotels will
target Chinese city-dwellers looking for long weekend breaks in the
countryside at relatively short distance from their home. They will
also serve the meetings, incentives, conferences and exhibitions
(MICE) market.
-- Continue to win market share in France and other mature markets by
strengthening premium distribution, upgrading pricing policies to
include a family deal with children under 6 staying free, and
offering new products such as new Club Med Discovery tours and new
Club Med 2 cruises.
-- Promote Club Med brand's unique spirit
In early 2013, Club Med will be launching its new worldwide
brand advertising campaign to raise its notoriety, recruit new
customers and promote repeat bookings.
To speed up the pace of international expansion, new
distribution channels are being developed and the Group is
targeting a fourfold increase in the number of Club Med
shop-in-shops and franchise outlets (from 50 to 200) by the end of
2015.
-- Optimize the business model
Club Med is taking its upscale strategy a step further, with
three-quarters of village capacity set to meet 4 or 5-Trident
standards by 2015 including new villages such as Pragelato
Vialattea in Italy, Belek in
Turkey and Guilin in China that are due to open in 2013. These new
destinations will increase the number of year-round permanent
villages (or bi-seasonal) with optimum capacity.
In line with the asset-light strategy, most of the current
development projects are based on the management contract model,
the aim being to improve return on capital employed while also
achieving a balance of models for the village portfolio.
Additional information
The consolidated and parent company financial statements of
Club Mediterranee for the fiscal year ended 31 October 2012 were approved by the Board of
Directors on 6 December 2012.
These financial statements have been audited and the Auditors'
reports are in the process of being prepared.
The
fiscal 2012 financial results presentation is available for
download at http://www.clubmed-corporate.com.
1 CETO : Cercle d'Etudes des Tours Operateurs
(French Tour-Operators Association)
SOURCE Club Med