0 Club Med 2011 Annual Results Show Sharp Increase in Business Indicators and Strong Growth in Profitability | Worldnews - news from all over the world

2011-12-09 17:36

Club Med 2011 Annual Results Show Sharp Increase in Business Indicators and Strong Growth in Profitability

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MIAMI, Dec. 9, 2011 /PRNewswire/ --

- Village Business Volume:                     

up 6.3%

- Number of upmarket customers:                         

up 19%  [+ 130,000]   

- Village operating income:                                      

up 48% 

- Net income before tax and non-recurring items:        

x 4     

Xavier Mufraggi, CEO of Club Med North America, comments on the fiscal 2011 results as a reflection of Club Med's success in the U.S. saying:

"Despite the current recession and additional global issues, Club Med is thriving due to its success in the UK market, US market and international villages that offer guests a range of destination options for clients looking to travel. Club Med's upscale and international strategy makes the company resilient in a difficult market.

Club Med North America has shown its best performance since before September 2011, illustrating the success of a change in business model that aligns with a family-focused marketing strategy that has been in place since 2004.

The success of the newly renovated Sandpiper Bay resort in Florida is a key element in Club Med North America's impressive performance, surpassing expectations and showing the high demand for a premium all-inclusive resort in North America. Club Med Sandpiper Bay is the only all-inclusive family resort in North America with international elite Tennis, Golf and Fitness Academies that yield additional net revenue and product advantage.

Club Med's global success, due to a return to sustainable profit along with the success of Sandpiper Bay and the international Fitness Academies, marks the beginning of a more aggressive strategy for Club Med North America, and establishes Club Med's leading position in the industry. We are confident that the company will be able to replicate this success in additional locations throughout the U.S. and Canada, as there is a clear demand for all-inclusive destinations in the market. 62% of respondents in a 2011 travel study indicated that an all-inclusive package is considered extremely / very desirable. For affluent travelers (HHI $125k+) the number is 60% – 2011 Portrait of American Travelers, YPartnership/Harrison Group.

This new and more aggressive strategy is primarily marked by upgraded management programs, as well as interesting proposals for both sun and snow resorts. Club Med's 90% awareness rate in the Top 30 markets in the world, along with its affluent international clientele, enables us to put destinations on the map that attract a growing clientele with a distinctive product that features Kids Clubs and innovative sports and wellness academies.

Club Med is the resort leader in ski destinations with 20 resorts worldwide, representing 25% of the world ski market, and hopes to expand with ski resorts in North America. Currently, the North American ski business has been focused on real estate and condos, which lead to a short term ROI as condos were left empty due to the recession. Club Med has undisputed advantages in this regard with 50 years of experience in ski, occupancy rates of more than 90% and an outstanding level of guest satisfaction. These advantages, coupled with Club Med's signature all-inclusive features from fitness academies to Kids Clubs, make Club Med exactly the breath of fresh air needed to bring life back into the ski resort industry, as evidenced by the recent opening of Club Med Valmorel in the French Alps. Club Med was able to mark Valmorel as an up-and-coming ski destination that is already booked to capacity during the European low-season. Only Club Med, with its distinctive offerings and highly focused strategy, can accomplish such goals."

Commenting on the fiscal 2011 results and the inauguration of the new Valmorel village in France's Savoy Alps, Chairman and Chief Executive Officer Henri Giscard d'Estaing said:
"In fiscal 2011, Club Mediterranee is now structurally profitable. We gained 130,000 customers in the upmarket segment and enjoyed record-high customer satisfaction rates. In addition, we made market share gains and captured growth in new vacation markets that are emerging around the world. With two thirds of our villages in the upmarket or very upmarket segment and 60% of sales carried out directly by year-end 2012, we will be well prepared to enter a new era. The spirit of this new era is embodied in Valmorel, the latest generation village that we are inaugurating today."

Fiscal 2011: sharp increase in all business indicators and strong growth in profitability despite unfavorable global events

Club Mediterranee has confirmed its ability to structurally improve profitability over the long term.

1.  A stronger balance sheet

In addition to improving earnings to 32% at 31 October 2011, Club Med carried out two transactions after the fiscal year-end that strengthened its balance sheet.

Club Mediterranee recently signed an agreement with its banks to extend the maturity of its euro 100-million medium-term line of credit by two years to December 2014. Furthermore, in light of the Group's improved financial position, the line of credit will be renewed under improved terms.

Club Mediterranee has sold the Aspen Park Hotel in Meribel for euro 20 million. However, the Group intends to maintain its presence in this prestigious resort by operating two other villages there – Le Chalet and L'Antares.

2. 2011-2012 Winter trends

Bookings to date for the 2012 winter season are 3.8% ahead of the winter 2011 figure. At the same date last year, two-thirds of winter bookings had been recorded.

Europehas seen a 3.2% increase in bookings, with a slowdown in the middle booking period over the past eight weeks that mainly reflected unfavorable prior-year comparatives, as bookings were high at the same time last year prior to the Arab Spring.

The Americas have continued to enjoy dynamic growth as bookings rose by 10.2%, led by the move upmarket at Sandpiper Bay in Florida and the renovation of Rio das Pedras in Brazil.

Asiahas benefited from continued 40% growth in Greater China while reporting a slowdown in order intake in Japan due to the Fukushima effect (high prior-year comparatives) and in Australia due to the closure of the Lindeman village.

3.    Outlook:Capturing growth

3.1.  Objectives for 2012 maintained

At the end of fiscal 2011, upmarket and very upmarket villages accounted for 62% of portfolio capacity, reflecting the return to an assertive development strategy. Two new villages opened during the period – Sinai Bay in Egypt (4 and 5 Tridents) and Yabuli in China (4 Tridents).

New openings are continuing in fiscal 2012 with Valmorel in France's Savoy Alps set to open on 18 December. The new property features a 4 and 5-Trident village as well as chalets-apartments.

In summer 2012, Club Med will open its second village in China – Guilin, a 4-Trident village that will be operated under a management contract (first opening phase).

Renovations in 2012 will focus on Asia: Phuket in Thailand, Kabira Beach in Japan and the completion of Sahoro's upgrade from 3 to 4 Tridents, also in Japan.

Lastly, Club Med is continuing to adjust the village portfolio with the elimination of Les Menuires in France, Lindeman in Australia and Smir in Morocco scheduled for 2012. In 2011, Club Med returned the 3-Trident seasonal village of Metaponto (Italy) and the 2-Trident seasonal village of Athenia (Greece) to their owners. In addition, the Group sold its 3-Trident seasonal village in Sestrieres, Italy.

The goal is to strengthen direct contact with customers and continue lowering the percentage of selling costs by developing direct and semi-direct distribution.

3.2. Driving growth through enhanced international expansion

Club Med aims to sustainably assure the profitability of its business units. The Americas returned to profit and can now leverage a profitable business model to drive further growth.

In mature markets like the United Kingdom – one of the world's leading tourist markets – Club Med has made significant market share gains over the past three years. Summer 2011 sales were up 7%, compared with a 1% increase for the UK market as a whole, while winter 2012 sales are up 2% in a market that has contracted by 7%. In France, summer 2011 sales grew by 2% although the market declined by 2%.

Growth will also be driven by continued expansion in rapidly developing countries like China, Brazil, Russia, South Korea, Argentina and South Africa. Customers from these target countries will represent more than 20% of Club Med's worldwide clientele in 2012, or nearly 265,000 customers.

Club Med is actively pursuing its development in China with the creation in 2012 of a second village in Guilin. Expansion in China is underpinned by three growth drivers: i) a stronger Club Med sales presence, particularly via the development of the "shop in shop" concept, ii) last summer's deployment of a Greater China business unit and iii) the opening of five villages by 2015, of which two are already in the pipeline.

Additional information

The consolidated and parent company financial statements of Club Mediterranee for the fiscal year ended 31 October 2011 were approved by the Board of Directors on 8 December 2011. These financial statements have been audited and the Auditors' reports are in the process of being prepared. The fiscal 2011 financial results presentation is available for download at http://www.clubmed-corporate.com.

 

 

 

           

SOURCE Club Med

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