Club Méditerranée: 2012 Annual Results
A Year of Growth for Club Med in 2012 despite a challenging environment in
PARIS -- December 07, 2012
Club Méditerranée (Paris:CU):
- 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
Commenting on the annual results, Henri Giscard d’Estaing, Chairman and Chief
Executive Officer, noted that:
“Club Méditerranée’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)
(in €m) 2009 2010 2011 2012
12 vs 11
Business Volume 1 380 1 375 1 461 1 515 + 3,7%
Villages ^ (1)
Group - 1 360 1 353 1 423 1 459 + 2,6%
Villages - at
constant exchange 1 406 1 359 1 416 1 447 + 2,2%
EBITDA Villages ^ 100 107 126 126
As a % of revenue 7,4% 8,0% 8,9% 8,7%
Operating Income - 36 42 61 62 + 1,0%
Operating Income - (29) (14) (24) (26)
Management of Assets
Other Operating (27) (15) (11) (14)
Income and Expense
Operating income (20) 13 26 22
before tax and (1) 8 33 35 + 7,3%
Net income/loss (53) (14) 2 2
Investments^(4) (51) (44) (50) (50)
^(5) ^(5) ^(6)
Disposals 28 18 19 42
Free Cash Flow (33) 41 38 55
Net debt (239) (197) (165) (118)
(1) Total sales regardless the operating structure (reported)
(2) Includes €16 million, €17 million, €14 million and €12 million in property
development revenue for, respectively, 2009,2010, 2011 and 2012
(3) EBITDA Villages : Operating Income Villages before interest, taxes
depreciation and amortization
(4) Withdrawn Investments (See Cash-flow statement)
(5) Net of grant and insurance settlements
(6) Withdrawn investments (€50 million) and realized investments (€59.8
*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
*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%.
^1 CETO: Cercle d’Etudes des Tours Operateurs (French Tour-Operators
*Profitability preserved attesting to the business model’s robustness.
(in €m) reported 2009 2010 2011 2012
EBITDAR Villages ^(1) 254 264 270 281
% of revenues 18,9% 19,8% 19,2% 19,4%
EBITDA Villages ^(2) 100 107 126 126
% of revenues 7,4% 8,0% 8,9% 8,7%
Operating Income Villages 36 42 61 62
% of revenues 2,7% 3,1% 4,4% 4,3%
(1) EBITDAR Villages: Operating Income Villages before depreciation,
amortization, rents and change in provisions
(2) EBITDA Villages: Operating Income Villages before depreciation and
and change in provisions
*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 Méribel 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
*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 (Méribel
Aspen Park, Lindeman Island and Bora-Bora) and five non-strategic villages
were closed (Smir, Coral Beach, Djerba Méridiana, 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
*Tighter customer relations, with over 60% of sales carried out directly.
Online bookings have continued to grow, accounting for 20.5% of sales in
2. Fiscal 2013 outlook
*A slightly growing Winter 2013, led by demand in the Americas and Asia.
(at constant exchange Cumulative as of Capacity Winter
rate) 4 last weeks 2013
1st december 2012
Europe-Africa - 0,8% - 5,1% - 5,4%
Americas + 7,2% + 8,1% + 1,1%
Asia + 5,0% + 7,2% - 6,3%
Asia excl. Lindeman + 10,4% + 14,3%
Total Club Med + 1,1% - 0,6% - 3,7%
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
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
*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 ajusted by 3.7% compared with winter 2012.
In Europe-Africa, closure of Méribel 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
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
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
*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
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
The consolidated and parent company financial statements of Club Méditerranée
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
Statement of Income
(in €m) 2009 2010 2011 2012
Group Revenue^(1) 1 360 1 353 1 423 1 459
Operating Income - Villages 36 42 61 62
Operating Income - Management (29) (14) (24) (26)
Other Operating Income & (27) (15) (11) (14)
Operating income/(loss) (20) 13 26 22
Finance cost, net (23) (22) (16) (8)
Share of profit of associates 2 3 1 1,6
Income tax/benefit (2) (8) (9) (13,4)
Income/(loss) from (10) - - -
Net result (53) (14) 2 2
^(1) Includes €16 million, €17 million, €14 million and €12 million in
property development revenue for, respectively 2009, 2010, 2011 and 2012
Non-current 10.09 10.10 10.11 10.12 Equity and 10.09 10.10 10.11 10.12
PPE 874 874 838 815 minority 492 516 512 522
Intangible 83 86 79 80 Provisions 52 50 51 48
Non current Deferred tax
financial 90 100 92 90 liabilities-net 25 30 29 27
non-currents 1 047 1 060 1 009 985 Working capital 199 230 219 240
Government (40) (37) (33) (30) Net debt 239 197 165 118
Total 1 007 1 023 976 955 Total 1 007 1 023 976 955
Gearing 48,6% 38,2% 32,2% 22,6%
/ villages 14,8% 17,2% 15,5% 16,6%
employed*/ 60% 59% 54% 49%
* Capital employed = fixed assets nets of
grants settlements - working capital
Caroline Bruel, +33 (0)1 53 35 31 29
Pernette Rivain, +33 (0)1 53 35 30 75
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