HALF-YEAR RESULTS 2014 ZURICH, 21 AUGUST 2014

Transcription

1 HALF-YEAR RESULTS 2014 ZURICH, 21 AUGUST 2014

2 HY 2014 HIGHLIGHTS AND ACHIEVEMENTS 2

3 OPERATING PROFIT AT LAST YEAR S LEVEL CLEARLY IMPROVED NET RESULT OVERALL A CHALLENGING ENVIRONMENT 3 Geopolitical events in Egypt, Kenya, Thailand and Ukraine Adverse currency movements in Asia and Northern Europe impacted consumer sentiment Organic growth at 1.0% Operating profit similar to prior year (excluding the positive Swiss pension impact in 2013) Significant increase in Net result to CHF -14.6m (CHF -47.4m) seasonal loss Strong Free cash flow at CHF 141.8m Portion of turnover from non-european Source markets at 42% Group Travel maintains strong competitive position but lower demand out of Japan FIT growing +15% in Asia excluding Japan Outbound Nordics characterized by price and margin erosion Continued profitable growth at VFS despite crisis around Ukraine/Russia

4 EUROPE MOST IMPORTANT SOURCE AND DESTINATION REGION; ASIA ACCOUNTS FOR 29% OF SOURCE SOURCE & DESTINATION MARKET SHARES FOR KUONI GROUP (HY 2014) Source Destination Americas MEA 7% Americas 15% 6% MEA 29% 10% 55% Europe 58% Europe APAC 20% APAC HY 2013: HY 2013: Europe 55% Europe 53% APAC 31% APAC 21% MEA=Middle East & Africa, APAC=Asia Pacific 4

5 ORGANIC TURNOVER DEVELOPMENT IN HY 1% CURRENCY IMPACT OF 3% ON TRANSLATION Organic GROWTH RATES BY BUSINESS UNIT (IN %) FX Acq./Div. Group Travel FIT Outbound Nordic Outbound Europe/Asia DM Specialists VFS Global

6 CURRENCY MIX FOR TRANSLATION HY 2014 TURNOVER AVERAGE EXCHANGE RATES VS HY 2013 OTHERS DKK 6% AUD 2% 3% NOK 5% SEK 31% 6% INR 7% US$ 10% 17% 12% GBP 6 CHF GBP US$ INR SEK NOK AUD DKK in %

7 HY 2014 FINANCIAL REVIEW 7

8 P&L KEY FIGURES (CHF million) HY14 Turnover EBITA EBITA (excl. Swiss pension effect) EBIT n/a EBIT (excl. Swiss pension effect) n/a n/a Net Result Net Result (excl. Swiss pension effect) Loss from disposal of subsidiaries Financial result other 8 HY13 %

9 OPERATING PROFIT BRIDGE HY 2014 VS HY 2013 PRICE AND MARGIN EROSION IN SCANDINAVIA PREVENTED A FURTHER INCREASE IN EBITA (CHF million) EBITA 2013 Discont. Turnover Operations Growth GOPMargin excl Swiss pension 9 Staff costs Mkt&Adv Other Ops JV Saudi Costs Costs MOFA Property Currency sale impact EBITA 2014

10 OPERATING PERFORMANCE HY 2014 BY BUSINESS UNITS EBITA TURNOVER HY14 HY13 % HY Group Travel FIT (Fully Independent Traveller) (CHF million) Kuoni Group HY13 % n/a excl Swiss pension Global Travel Services Acquisition & Integration costs Outbound & Specialists Outbound Nordic Outbound Europe/Asia remaining n/a n/a DM Specialists n/a VFS Global n/a Outbound Europa/Asia sold/closed Corporate 10

11 GROUP TRAVEL: MAINTAINED STRONG MARKET POSITION LOWER DEMAND FROM JAPAN (CHF million) Turnover GOP EBITA FTE (end of period) HY14 HY13 excl Swiss pension % Lower demand in the important Japanese market: Increase of consumption tax Devaluation of the Yen Temporarily lower demand from China post introduction of new travel law Short-term damper on demand from Indonesia due to elections and adverse currency movements Volumes from Taiwan, Hong Kong and Vietnam above last year No major changes in consumer behaviour in Japan is expected for the second half 11

12 FIT: Organic growth of 5.1% (CHF million) HY14 HY13 excl Swiss pension % EBITA FTE (end of period) Turnover GOP Room nights up by 4.2% to 6.2 million Double digit organic growth in Asia (+15%) excluding Japan Growth also driven by Germany, UK and Middle East and Africa Consumer sentiment in Japan, Australia and South America suffered from currency devaluation and difficult economical environment Unrests in Turkey and between Russia and Ukraine had negative effects Improved GOP margin was offset by higher expenses for improved booking systems and new applications/features 12

13 OUTBOUND NORDICS: ECONOMIC DOWNTURN IN NORWAY AND PRICE EROSION (CHF million) Turnover GOP EBITA FTE (end of period) HY14 HY13 excl Swiss pension % Organic growth of 7.6% due to price and margin erosion: Air-overcapacity Continuing political upheavals in Egypt and Thailand led to a fall in demand and partial reallocation to Canary Islands Lower travel activity out of Norway Excellent spring and summer weather impacting demand negatively Measures initiated: New agreement with flight crews at Novair Withdrawal from some destinations Reduction of headcount Negative operating result expected for FY 13

14 OUTBOUND EUROPE/ASIA: SIGNIFICANT IMPROVEMENT OF OPERATING EARNINGS (CHF million) HY14 HY13 excl Swiss pension % GOP EBITA remaining Turnover remaining Turnover sold/closed EBITA sold/closed FTE (end of period) 14 Positive development of the Swiss and Indian markets Switzerland reduced flight capacities in winter months paid off and substantially increased online bookings India improved top line and GOP in all business areas as well as cost savings considerably improved operating profitability UK suffered from the travel warning to Kenya and political turmoil in Thailand

15 DM SPECIALISTS: INDIA AND USA PERFORMED WELL BUT COULD NOT COMPENSATE (CHF million) HY14 HY13 excl Swiss pension % GOP EBITA FTE (end of period) Turnover 15 Operations in East Africa suffered badly after the travel warnings issued by many governments Ongoing political turmoil in Thailand caused uncertainty in winter and spring months Operations in Middle East suffered from missing Russian tourists and lower in-destination spending due to the devaluation of the Rouble

16 VFS GLOBAL: CONTINUED GROWTH AND SIGNIFICANT INCREASE IN EARNINGS (CHF million) Turnover GOP EBITA - whereof JV FTE (end of period) 16 HY14 HY13 excl Swiss pension % 9.3m Visa applications processed (-0.9%) Organic growth by +14.5% applications centres i.e. total of worldwide Low margin business for the Indian mission was dropped (US and Canada) Higher number of visa applications from Asia Negative effect from conflict between Ukraine and Russia, # of Russian visas dropped by 22%

17 FINANCIALS: SEASONAL LOSS, NET PROFIT IMPROVED AS RESULT OF EXIT COSTS IN PY HY14 HY13 % % excl Swiss pension (CHF million) Amortisation EBIT n/a n/a n/a n/a Net Result EPS A (in CHF) EPS B (in CHF) EBITA Loss from disposal of subsidiaries Financial result other Income Taxes Avg. # of shares outstanding 17 HY Corporate costs significantly lower due to positive impact on EBIT of CHF 10.1m from the sale of the Geroldstrasse property at headquarters to Zürcher Kantonalbank Financial results improved due to lower coupon on the bond Prior year tax result impacted by the pension benefit and the losses from sold/closed companies

18 SUBSTANTIAL CASH CONVERSION DRIVEN BY NET WORKING CAPITAL (CHF million) Operating CF Free CF 18 0 HY 2011 HY 2012 HY 2013 HY 2014

19 FREE CASH FLOW EVOLUTION (CHF million) DISPOSAL OF PROPERTY TO ZÜRCHER KANTONALBANK EBIT 19 Depr./Amort. other non cash exp/inc Change in NWC Income tax paid Operating CF CAPEX Disposal of FCF HY 2014 property

20 HEALTHY AND IMPROVED EQUITY RATIO AT SOUND BALANCE SHEET (CHF million) '070 1'954 1'614 1' Dec Jun Dec Jun 2014 Equity ratio Liability Equity 20 In %

21 GOOD LIQUIDITY DEBT POSITION AS AT SENIOR CREDIT FACILITY NOT USED BY ORDINARY REDUCTION OF CHF 47M TO CHF 256M (CHF million) vs CHF 200m 464 vs CHF 420m Liquid funds 21 Bond nominal Other debt Net Liquid Funds Advance payments Net debt position by customers

22 CURRENT TRADING & OUTOOK 22

23 TRADING AS OF 17 AUGUST 2014 & OUTLOOK CHF % LCY % Group Travel FIT Outbound Nordic Outbound Europe/Asia Destination Management Specialists VFS Global (Visa Services) # of processed visa applications OUTLOOK 2014 Expected full-year operating earnings (EBIT) in the range of CHF million Expected net result around prior-year level MIDTERM TARGETS Remain unchanged despite more challenging business environment 0

24 BUSINESS REVIEW 24

25 COMPLETED A SIGNIFICANT TRANSFORMATION AND FOCUSES ON TRAVEL-RELATED SERVICES WITH LEADING POSITIONS PORTFOLIO CHANGE Turnover (CHF m) Key changes 2011: Acquisition of GTA, a leading B2B hotel accommodation and group travel service provider 5,6691) 2012/13: Exit of loss-making tour operating units in Spain, Benelux, Russia, Italy, France and closure of Octopus.com (B2C portal) 2010/2013: Growth of VFS Global As a result of these key changes, tour operating in 2013 accounts for 41% of turnover it is expected that the share of Destination & Accommodation Services and Visa Processing will continue to grow over time VFS FIT 3,894 Groups Visa Processing Destination & Accommodation Services DM Specialists Outbound Nordic Outbound Europe & Asia Of which TO (%) % 41% Tour Operating 1) Includes unit excited in 2013 (France & Italy) 25

26 KUONI OPERATES WITH GLOBAL FOOTPRINT IN MORE THAN 100 COUNTRIES ON FIVE CONTINENTS 26 ~ FTE working for the Kuoni Group from over 100 nationalities Kuoni operates more than 400 offices in over 100 countries and more than 1300 Application Centres through VFS Globel

27 KUONI OPERATES ALONG THREE ACTIVITIES WITH MULTIPLE WELL ESTABLISHED BRANDS PORTFOLIO OVERVIEW Description Destination & Accommodation Services Self-contracted and availabilitysecured hotel accommodation and land components Worldwide online distribution system Travel services at destination with dedicated employees on site Outbound travel from European and Asian source markets Variety of tailor-made, individual and packaged holidays Visa outsourcing and technology services of non-judgmental, administrative part Strong specialist portfolio in Switzerland and UK B2B/ B2C business Group Travel A Outbound Nordic D F VFS Global FIT B E Outbound Europe & Asia DM Specialists C Brands 27 Visa Processing B2C business B2B business Units Tour Operating

28 A Group Travel GROUP TRAVEL More than group tours organised yearly More than 3.2 million room nights sold yearly 28

29 A Group Travel LEVERAGE POSITION AS ONE OF THE LEADING GROUP TRAVEL PROVIDERS, ORGANIZING MORE THAN TOURS PER YEAR BUSINESS MODEL Supply side Our position Client side Hotels >3'000 hotels world-wide >3m hotel room nights Transportation One of the leading destination handlers for Group Travel from Asia to Europe, organising about 50'000 leisure tours every year, in 15 languages Group of travellers Travel Retail Group of travellers ~1.8m travellers 25 sales offices >110'000 coaches booked per year Most visited countries: Italy, UK, France, Switzerland, Germany Sightseeing, Venues, Events, Catering, Kuoni Group Travel from Asia to Europe with around 35% share to Europe >10'000 sightseeing items >200'000 meals 29 Tour Operators

30 A Group Travel GROUP TRAVEL EXPERTS MAINLY FOCUS ON HANDLING ASIAN GROUP TRAVEL TO EUROPE ESTIMATED MARKET SIZE AND SHARE Est. market size (EUR bn)1) Turnover share by region (HY 2014) +3.6% Source Americas 0.82 EMEA APAC & MEA Americas 2% 1% 6% 12% Others 1.59 Destination GTE GTE share 2013: 35% 82% APAC 2013 Kuoni Group Travel Experts is one of the leading destination handlers for Group Travel from Asia to Europe, with around 35% share 97% Europe More than 4/5 of Kuoni Group Travel Expert's turnover is generated in Asian source markets Japan accounts for 1/3 ~97% of business goes to destination Europe 1) Source: Kuoni estimate, Group Travel from Asia to Europe 30

31 B FIT FIT (FULLY INDIPENDENT TRAVELLER) ~13 million room nights booked in FY 2013 Top 5 destinations Paris, London, Dubai, Rome, New York 31

32 B FIT A LEADING GLOBAL B2B WHOLESALER SELLING TO ON- AND OFFLINE CLIENTS BUSINESS MODEL Supply side1) Our position Hotel Accommodation 45'000 self-contracted hotels in 152 countries A leading B2B wholesaler with global range of products (hotel accommodation, land components) Distribution via XML feeds & HTML websites Client side Tour Operators Traveller Consolidators Traveller OTAs Traveller Travel Retail Traveller Retail & Wholesale Pricing 21'000 rooms per day sold in 2013 Land Components FIT with 7.3% global share Over 5'000 transfers and 14'000 sightseeing activities in more than 1'000 cities available 32 Brands: 1) FY 2013

33 B FIT GENERATES 45% OF TURNOVER IN ASIA-PACIFIC AND MIDDLE EAST&AFRICA ESTIMATED MARKET SIZE AND SHARE Turnover share by region (HY 2014) Est. market size (USD bn)1) -4.3% 30.2 Source 28.9 Others Americas 15% GTA 28.2 Europe Americas 19% 40% MEA 15% 26.8 Destination MEA 11% 49% FIT share 2013: 7.3% % 2.1 APAC 2013 Global intermediated accommodation market (online and offline) is large and highly fragmented Europe APAC 45% of turnover is generated in APAC & MEA source regions Europe today is most important destination with APAC & MEA on the rise FIT gained share out of strong position in the global accommodation market in 2013 versus previous year 33 21% 1) Source: PhocusWright, Euromonitor, Kuoni; addressable market

34 C Destination Management Specialists DESTINATION MANAGEMENT SPECIALISTS More than travellers handled in FY tours to Burj Kalifa yearly More than 12 million kilometres have been covered in Africa for safaris, transfers and tours in FY13 34

35 C Destination Management Specialists DESTINATION INSIDERS PROVIDING ACCESS TO COMPLEX DESTINATIONS AND PRODUCTS BUSINESS MODEL Supply side Our position Land components Hotels Cars Tours Transfers 35 India South-East Asia Eastern & Southern Africa Middle East Australia USA Tour Operators Traveller Travel Retail Traveller Online Sales Platform Traveller Destination insider providing know-how, content and operations support Content sold through multitude of channels Destination footprint Presence predominately in complex destinations with low accessibility/ consolidation Client side All DM Specialists with share between ~20-40% among DM Specialists in the respective destinations

36 C Destination Management Specialists SERVE PREDOMINANTLY EUROPEAN CUSTOMERS WHO TRAVEL MAINLY TO APAC AND MEA SOURCE MARKET & DESTINATION SHARES (HY 2014) Destination Source Americas Americas 15% MEA APAC 14% 5% 43% 9% 71% Europe 43% MEA Over 2/3 of Destination Management Specialists' turnover is made with European customers In terms of destination, APAC and MEA each account for just over 40% of turnover 36 APAC

37 D Outbound Nordic OUTBOUND NORDIC Around 1 million outbound passengers yearly top destinations Greece, Turkey, Croatia, Bulgaria, Cyprus 1/3 carried on own airline 67% online distribution 37

38 D Outbound Nordic OPERATES SEVERAL WELL-KNOWN BRANDS IN SWEDEN, NORWAY, DENMARK AND FINLAND BUSINESS MODEL Supply side1) Our position Outbound Nordic Hotels (Sweden, Norway, Denmark, Finland) More than 75% selfcontracted hotels in 10 countries Clear B2C focus Renewing Novair s fleet with modern and environmentally efficient A321neo 31% of seats with own airline Novair Apollo is No. 3 among traditional tour operators in Sweden Land Services Own websites Traveller Own travel retail Traveller 3rd party websites Traveller 3rd party travel retail Traveller Traditional tour operator in Scandinavia Complemented by dynamic packaging Flights Client side Brands Various local suppliers for transfers & excursions 1) FY

39 D Outbound Nordic ~20% MARKET SHARE AMONG TRADITIONAL TOUR OPERATORS IN SCANDINAVIA ESTIMATED MARKET SIZE AND SHARE Turnover share by region (HY 2014) Est. market size (CHF bln)1) +8.1% 4.79 Source 5.18 MEA Others Destination APAC Outbound Nordic Americas 6% 8% 6% 100% Outbound Nordic share 2013: 80% 20% Europe Outbound Nordic with a share of ~20% among traditional tour operators Europe All turnover is generated with Scandinavian customers Sweden is biggest market in terms of turnover, followed by Norway ~80% of turnover is to European destinations, predominantly beach 1) Volumes of TUI, Thomas Cook, Primera and Kuoni; Source: Annual reports of TUI & Thomas Cook, Primera estimated 39

40 OUTBOUND EUROPE & ASIA 40 More than 130 own retail outlets in Europe and Asia More than destination insider tips available online (alone in Switzerland from over 700 Kuoni travel experts)

41 E Outbound Europe & Asia STRENGTHENED ITS FOCUS ON KEY MARKETS AFTER EXIT IN 2012/2013 BUSINESS MODEL Supply side Our position Client side Outbound Europe & Asia Switzerland: Leading position among traditional tour operators Hotels 81 retail outlets Curated choice Variety of hotels (luxury, boutique, mainstream, etc.) Own websites Traveller Own travel retail Traveller 3rd party websites Traveller 3rd party Travel retail Traveller Strong specialist portfolio Brands UK: Specialist position 30 retail outlets ( incl JL stores) Flights Strong specialist portfolio Brands Mostly scheduled flights India: Specialist position 19 own retail outlets, 86 franchises Brands Land Services Hong Kong: Specialist position Strong expertise in tours, excursions, safaris, etc outlets Brands

42 E Outbound Europe & Asia CUSTOMERS TRAVELLED IN 2013 SOURCE MARKET & DESTINATION SHARES (HY 2014) Source Destination Americas APAC 19% 16% 37% MEA 10% 84% Europe 34% APAC Destinations Europe and APAC each account for roughly one third of turnover 42 Europe

43 F VFS Global VFS Global >18 million Visa applications handled in 2013 >1 300 applications centers operated in more than 110 countries 43

44 F VFS Global APPOINTED BY GOVERNMENTS ALL OVER THE WORLD TO PROVIDE NONJUDGEMENTAL VISA PROCESSING SERVICES AS AN OUTSOURCING PARTNER BUSINESS MODEL Contractual partners Our position Client side Governments Governments are increasingly outsourcing their visa application processes to 3rd parties Very specific requirements, driven by complex political, legal and security environments Providing visa processing services to governments worldwide Global footprint, serving 45 governments >1 300 Visa Application Centers in >110 countries ~83m visa applications processed VFS Global is a leader with around 50% worldwide market share Value added services Core support services (e.g. lounges, express services) 44 Application Centre Customer

45 F VFS Global THE WORLD S LEADING VISA OUTSOURCING AND TECHNOLOGY SERVICES SPECIALIST ESTIMATED MARKET SIZE AND SHARE Est. market size (m applications)1) VFS Global turnover share by region (2013) Source +27.9% MEA Americas Others % VFS 2012 Americas Europe 19% 4% 17% MEA Destination 18.0 VFS Global share 2013: APAC 50% 12% 62% Europe 69% APAC 2013 VFS Global is a leader with around 50% worldwide market share 7% Almost 70% of turnover is made with travellers from Asia Pacific Europe is most important destination Source: 1) D&B, updated 2013 market size estimates will be presented in the HY 2014 presentation 45

46 WELL POSITIONED WITHIN THE COMPLEX TRAVEL DISTRIBUTION ECO-SYSTEM TRAVEL ECO-SYSTEM Kuoni Segments SUPPLIERS Supplier.com Highly fragmented CUSTOMERS Large international OTAs Hotels Metasearch Smaller/regional OTAs Transfers Tour Operators Travel Retail Switches/ GDS Tours FIT/ Bed banks Flights Group travel Destination Management 46 Consolidators/ Brokers Visa Processing Services 2013: >1bn international arrivals Changing behaviours Countless desires

47 ADDITIONAL INFORMTION 47

48 AGENDA 2014/2015 / CONTACT DETAILS REPORTS ON BUSINESS PERFORMANCE ON THE FOLLOWING DATES: Nine-month business update 6 November 2014 Annual report March 2015 General Meeting of Shareholders 20 April 2015 in Zurich CONTACT DETAILS: 48 Corporate Communications Phone: communications@kuoni.com Investor Relations Phone: investor.relations@kuoni.com mailing list:

49 GROUP STRUCTURE 49

50 DISCLAIMER THIS COMMUNICATION CONTAINS STATEMENTS THAT CONSTITUTE FORWARD-LOOKING STATEMENTS. IN THIS COMMUNICATION, SUCH FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION, STATEMENTS RELATING TO OUR FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS AND CERTAIN OF OUR STRATEGIC PLANS AND OBJECTIVES. BECAUSE THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES, ACTUAL FUTURE RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED IN OR IMPLIED BY THE STATEMENTS. MANY OF THESE RISKS AND UNCERTAINTIES RELATE TO FACTORS WHICH ARE BEYOND KUONI TRAVEL HOLDING S AND/OR ITS AFFILIATES (REFERRED TO AS KUONI ) ABILITY TO CONTROL OR ESTIMATE PRECISELY, SUCH AS FUTURE MARKET CONDITIONS, CURRENCY FLUCTUATIONS, THE BEHAVIOR OF OTHER MARKET PARTICIPANTS, THE ACTIONS OF GOVERNMENTAL REGULATORS AND OTHER RISK FACTORS DETAILED IN KUONI S PAST AND FUTURE FILINGS AND REPORTS, INCLUDING PRESS RELEASES, REPORTS AND OTHER INFORMATION POSTED ON KUONI S WEBSITES OR IN OTHER FORM. READERS ARE CAUTIONED NOT TO PUT UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS WHICH SPEAK ONLY OF THE DATE OF THIS COMMUNICATION. KUONI DISCLAIMS ANY INTENTION OR OBLIGATION TO UPDATE AND REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. 50

51 THANK YOU FOR YOUR ATTENTION 51