Dec. 7, 2012
- 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,
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.
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 CETO 1) 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
and the rest of
- 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.
Fiscal 2013 outlook
- 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.
-- A slightly growing Winter 2013, led by demand in the Americas and
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.