Club Méditerranée : 2010 Annual Results
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Club Méditerranée : 2010 Annual Results
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Catégorie : Monde - Économie du secteur
- Chiffres et études
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Club Méditerranée Returns to Growth and Positive Cash Flow
Village operating income at €42 million vs. €36 million in fiscal 2009
Winter 2010-2011 bookings up 14.7%
Positive free cash flow before disposals: €23 million
· Return to growth
- Summer 2010: revenue at constant exchange rates up 0.8%
Net gain of 17,000 customers for the summer season, with an additional 21,000 in 4 and
5 Trident
- Winter 2010-2011 bookings up a sharp 14.7%
· A business that now generates cash
- Village operating income of €42 million vs. €36 million in 2009
- Village EBITDA margin of 8%
- Positive free cash flow before disposals of €23 million (€41 million with disposals)
- Income before tax and non-recurring items of €8 million (vs. a € 1 million loss in 2009)
- Net loss of €14 million, versus a €53 million loss in fiscal 2009
· A favorable configuration for 2011
- Opening of two new 4 Trident villages: Sinai Bay (Egypt) and Yabuli (first village in
China)
- 4 and 5 Trident capacity increased to 61%
- A development partner – Fosun – a privately owned Chinese company and new
shareholder with a nearly 10% equity investment
Commenting on the fiscal 2010 results, Chairman and Chief Executive Officer Henri Giscard
d’Estaing said:
“Fiscal 2010 saw further progress in the deployment of our worldwide specialist strategy, in
particular with a business model that demonstrated its effectiveness in the winter season and sales
that improved in the summer.
Fiscal 2011 is shaping up favorably with a Club Med that now generates underlying free cash flow,
while also recording double-digit growth in winter bookings and simultaneously opening two new
villages – a series of events that we haven’t seen for a long time. We’re confident that we’ll meet our
objectives for year-end 2012, with two-thirds of our capacity in the 4 and 5 Trident segments and
direct sales that account for 60% of the total. These goals should enable us to generate Village
EBITDA margin of nearly 10%. Sales in China increased by over 40% in 2010 and the country is
expected to become our second-largest market by 2015, led by the opening of five villages and the
support of our new shareholder Fosun.”
1- BUSINESS AND FINANCIAL REVIEW
Statement of income for the year ended 31 October 2010
(in €m) 2008 2009 2010
Consolidated revenue
Reported 1,484 1,360 (1) 1,353 (1)
Villages excluding currency effects 1,516 1,382 1,336
EBITDA Villages (2) 100 100 107
As a % of revenue 6.7% 7.4% 8.0%
Operating Income - Villages 35 36 42
Operating Income – Management of Assets (8) (29) (14)
Other Operating Income and Expense (15) (27) (15)
Operating Income/(loss) 12 (20) 13
Finance cost, net (33) (23) (22)
Share of profit of associates 1 2 3
Income tax/benefit (11) (2) (8)
Income/(loss) from discontinued operations 33 (10) -
Net Income/(loss) before tax and non – recurring
items (19) (1) 8
Net Income/loss 2 (53) (14)
Free Cash Flow 50 (33) 41
Net debt (31 October) (295) (239) (197)
(1) Includes €17 m in revenue property development in 2010 and €16 m in 2009
(2) EBITDA Villages: Village earning before interest, taxes, depreciation and amortization
Further improvement in Village operating margin
(in €m)
2007 2008 2009 2010
EBITDAR Village (1) 210 248 254 264
As a % of revenue 15.0% 16.7% 18.9% 19.8%
EBITDA Village (2) 75 100 100 107
As a % of revenue 5.3% 6.7% 7.4% 8.0%
Village operating Income 18 35 36 42
As a % of revenue 1.3% 2.4% 2.7% 3.1%
(1) EBITDAR Villages: Operating Income Villages before rents, depreciation,
amortizations and change in provisions
(2) EBITDA Village: Village operating income before depreciation,
amortizations and provisions
Club Méditerranée returns to growth
· Village revenue (excluding €17 million in property development revenue) amounted to
€1,336 million in fiscal 2010, a 3.4% decline from the previous year due mainly to an
8.7% drop in transport revenue. After five quarters of decline, revenue increased in both
the 3rd and 4th quarters. Moreover, for 2010, bookings expressed in comparable revenue
(across all seasons) rose by 9%, with increases of 15% in the 3rd quarter and 13% in the
4th, an improvement that signals a return to sustained growth.
· Village EBITDA and Village operating income continued to rise despite a sluggish
tourist market in Europe, thereby confirming the structural improvement in the Group’s
operating margin. Village EBITDA amounted to €107 million, compared with
€100 million in 2009, while Village operating income totaled €42 million, versus
€36 million in the prior year. Village EBITDA margin rose to 8.0%, from 7.4% in fiscal
2009.
· Operating margin was positively impacted by the productivity program, which delivered
savings of €29 million for the year and €92 million in two years.
· The operating loss from the management of assets amounted to €14 million, including
€8 million in impairment losses, village closure costs and asset write-offs and the
€4 million costs of villages closed for renovation.
· Other operating income & expense represented a net expense of €15 million
(compared with a net expense of €27 million in fiscal 2009). It was comprised mainly of
€7 million in restructuring costs, €2 million in costs stemming from the impact of the
volcanic ash cloud and €5 million in litigation-related costs.
· Finance cost and other financial income and expenses – net represented a net
expense of €22 million, virtually unchanged from fiscal 2009. The slight increase in
borrowing costs was due to the cost of implementing the new syndicated line of credit in
December 2009 and the impact of the issue of OCEANE bonds due 2015.
· Income tax expense, net amounted to €8 million in fiscal 2010 compared with
€2 million the year before.
· Income before tax and non-recurring items was €8 million, versus a loss of €1 million in
fiscal 2009. Non-recurring expenses totaled €14 million, of which €7 million in
restructuring costs and €8 million in village closure costs.
· The Group’s balance sheet was strengthened. For the year, Club Méditerranée
generated positive free cash flow before disposals for the first time in more than ten
years. In December 2009, the Club also set up a new, medium-term €120 million line of
credit that expires in 2012 and issued €80 million in OCEANE bonds due 2015. These
operations strengthened the Group’s liquidity, diversified its sources of financing and
lengthened its debt maturity. As a result, net debt was sharply lower at €197 million and
gearing stood at 38.2%, versus 48.6% at 31 October 2009.
2010: Further increase in upmarket clientele
· 11,000 additional customers in the 4 and 5 Trident segments for the year.
In fiscal 2010, Club Med had a total of 680,000 4 and 5 Trident customers, representing
56% of the total. The number is constantly increasing, demonstrating that customers
have embraced the upmarket strategy. The summer season saw a 2.7% increase in the
number of total customers, which to a considerable degree offset the winter’s 4.5%
decline. As a result, the overall decline for the year was limited to 0.8%.
The occupancy rate declined by 2.3 points but since the average price continued to rise
slightly (stable in the winter, up 2.4% in the summer), the decline in RevPAB was limited
to 2.7% for the year.
· Families, Club Med's strategic target, rose to 59% of 4 and 5 Trident customers.
In 2010, Club Med hosted 565,000 families, 13,000 more than in 2009. The increase
confirms the strength of Club Med's positioning in the upscale and family segments,
supported by a broad all-inclusive, premium offer with a strong focus on sporting
activities, well-being and special services for children.
· Customer satisfaction once again increased.
2- WINTER 2010-2011 TRENDS
Winter 2010-2011 bookings up 14.7% at 4 December
(in revenue at constant exchange
rates)
Year-on-year
growth at
4 Dec. 2010
Year-on-year
growth over
past 8 weeks
Europe + 16.3% + 7.5%
Americas + 13.8% + 4.4%
Asia + 6.3% + 12.8%
Total + 14.7% + 7.9%
Total bookings at 4 December were up 14.7% versus winter 2009-2010 with increases in all
three regions: 16.3% in Europe, 13.8% in the Americas and 6.3% in Asia.
Over the past eight weeks, bookings rose by 7.9% worldwide with increases of 7.5% in
Europe, 4.4% in the Americas and 12.8% in Asia.
3- OUTLOOK
Club Méditerranée reaffirms its objectives
- Two-thirds of the portfolio in the 4 and 5 Trident segments by year-end 2012
Club Med has stepped up the pace of development while pursuing the asset light strategy.
Following the December 2010 openings of Sinai Bay in Egypt (4 Trident village with a 5
Trident Luxury Space) and Yabuli in China (4 Trident), a number of openings are scheduled
for 2012: Valmorel in France (4 Trident village with a 5 Trident Luxury Space) and Cefalu in
Italy (5 Trident).
As for renovation projects, Sandpiper Bay in Florida, Yasmina in Morocco and Sahoro in
Japan will be refurbished and upgraded to 4 Trident in 2011. Phuket in Thailand will be
renovated in 2012.
Club Méditerranée also announced the sale of the Sestriere village and the closing of the
Metaponto village, both in Italy. It is also looking to dispose of a number of unprofitable 2
and 3 Trident villages (representing 6% of total current capacity) that no longer fit with the
new positioning.
- 60% of direct sales in 2012
The aim is for the direct distribution model to generate over 60% of revenue by 2012
compared with 58% in 2010.
This model helps Club Med distribute its offer more efficiently even as it continues to drive
down costs.
In 2010, the new online booking site was deployed in 27 countries with sales rising by 10%.
In addition, the Club will leverage its strengthened direct distribution network and worldwide
customer database to deploy an ambitious new CRM (Customer Relationship Management)
program in 2011.
Achieving these two objectives while also continuing to improve the business model could
help generate Village EBITDA margin of around 10% in 2012.
With the support of its shareholder Fosun, Club Med is
reaffirming its commitment to making China its second-largest
market in 2015 with a target of 200,000 customers
Deployment of Club Med’s strategy in China is well underway. That strategy is now
supported by Fosun, a privately held Chinese company that currently holds a nearly 10%
equity stake and strengthens the Club’s capacity for development in China, which is to
become the Group’s second-largest market.
In 2010, the number of Chinese customers increased by 42% over the previous year, with
32,000 Chinese customers vacationing in Club Med villages in the Asia-Pacific region. This
figure rises to 60,000 when customers from the entire Greater China area are included. Club
Med’s goal is to continue increasing the number of Chinese customers to a total of 200,000 in 2015.
To step up recruitment of new customers, Club Med plans to open five villages in China over
the next five years, of which the first is the Yabuli mountain village that was successfully
brought on stream in late November.
At the same time, Club Med is continuing to strengthen its sales and marketing operations
with the installation of Club Med Corners in upscale travel agencies in China’s main cities.
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