KUONI GROUP TO FOCUS ON ITS CORE BUSINESS AS A SERVICE PROVIDER TO THE GLOBAL TRAVEL INDUSTRY ZURICH, JANUARY 14, 2015

Transcription

1

2 KUONI GROUP TO FOCUS ON ITS CORE BUSINESS AS A SERVICE PROVIDER TO THE GLOBAL TRAVEL INDUSTRY ZURICH, JANUARY 14, 2015

3 AGENDA 1 DEVELOPING KUONI GROUP FURTHER 2 STRATEGY FOCUSED ON GLOBAL AND GROWING TRAVEL SERVICES AND EXIT FROM TOUR OPERATING ACTIVITIES 3 3 TRADING UPDATE

4 DEVELOPING KUONI GROUP FURTHER HEINZ KARRER CHAIRMAN

5 DEVELOPING KUONI FURTHER PORTFOLIO CHANGE OVER TIME Turnover (CHF m) ) VFS FIT Core Divisions DM Specialists Outbound Europe & Asia Of which Tour Operating % 39% Exit of Tour Operating Activities New strategy is the result of a comprehensive strategic review considering past performance, future market developments and assessment of own capabilities Focus on growing three divisions: Global Travel Distribution (previously FIT) Global Travel Services (previously Group Travel and DM Specialists) VFS Global Group Travel Outbound Nordic Board of Directors unanimously decided to focus on its core business as a service provider to the global travel industry and to governments Intention to find new owners for all tour operating activities: Kuoni Switzerland, UK, Benelux, Hong Kong, India and Scandinavia/Finland 1) Preliminary unaudited turnover for Kuoni 5

6 STRATEGY FOCUSED ON GLOBAL AND GROWING TRAVEL SERVICES AND EXIT FROM TOUR OPERATING ACTIVITIES PETER MEIER CHIEF EXECUTIVE OFFICER

7 NEW KUONI FOCUSED ON THREE DIVISIONS WITH LEADING GLOBAL POSITIONS Tour Operating VFS Global Destination & Accommodation Management OLD STRUCTURE 7 NEW STRUCTURE Fully Independent Traveller (FIT) Group Travel Destination Management Specialists VFS Global Global Travel Distribution (GTD) Global Travel Services (GTS) VFS Global Leading and highly experienced B2B provider of accommodation and land components Long-standing and leading provider of group travel and destination management services Pioneer and global leader in travel-related business process outsourcing solutions for governments and public institutions Outbound Nordic Outbound Outbound Europe/Asia Exit of tour operating activities

8 CONCENTRATE ON SERVICES WITH ATTRACTIVE LONG-TERM GROWTH POTENTIAL TURNOVER (PRO-FORMA, PRELIMINARY 2014) EXCLUDING OUTBOUND SEGMENT VFS Global 8% Global Travel Services (GTS) 36% 56% Global Travel Distribution (GTD) Three divisions concentrated on markets and services with attractive long-term growth potential and in which Kuoni has globally leading positions Unique set-up with strong focus on Asia will enable Kuoni to expand positions further by leveraging scale and exploring cross-selling opportunities Launch of strategic initiatives to accelerate growth and improve profitability across business segments Total: CHF m FTEs: ~8 0001) 1) As of September

9 SUBSTANTIALLY LARGER SHARE OF TURNOVER GENERATED WITH ASIAN SOURCE MARKETS SOURCE AND DESTINATION MARKET SHARES (PRO-FORMA NEW KUONI GROUP 9M 2014) Source Destination Americas Americas 12% 14% MEA 34% 10% APAC Europe MEA APAC 44% 10% 58% 18% Europe Total: CHF m Reported 9M 2014 Reported 9M 2014 (incl. Outbound) (incl. Outbound) Europe 58% Europe 58% APAC 30% APAC 19% MEA=Middle East & Africa, APAC= Asia Pacific 9

10 KUONI TO SEARCH NEW OWNERS FOR ITS TOUR OPERATING ACTIVITIES NO IMPACT ON CUSTOMERS AND THEIR CURRENT OR FUTURE BOOKINGS TURNOVER SPLIT (PRO-FORMA, PRELIMINARY 2014) Hong Kong Benelux India 2% 6% 4% UK Scandinavia/ Finland 38% 19% 31% Switzerland Exit of tour operating activities including Switzerland, UK, Benelux, Hong Kong, India and Scandinavia/Finland Business can be better developed under new ownership, leveraging scale or specific market strengths Kuoni to seek assurance to allow for the continuation of existing business locations and the continuing employment of staff Intention to find new owners in the course of 2015 Proceeds from sale to be invested in further developing core businesses Total: CHF m FTEs : ~3 8001) 1) As of September

11 THREE STRATEGIC INITIATIVES TO ACCELERATE GROWTH AND IMPROVE PROFITABILITY EXPANDING FOOTPRINT IN ASIA, MIDDLE EAST AND AFRICA Invest additional resources in Asia, the Middle East and Africa by leveraging existing footprint and expanding capabilities across all segments FURTHER DIGITALISATION Enhance customer service and increase efficiency by implementing new state-ofthe-art technology platforms EXPAND SERVICE OFFERING Develop new service offering for digital travellers 11 Build on existing customer base and global footprint Provide existing services to a wider range of customer segments by realising cross-selling potential Introduce new products and services

12 EXPANDING FOOTPRINT IN DEVELOPING COUNTRIES WITH PARTICULAR FOCUS ON ASIA EXPANSION OF GEOGRAPHIC FOOTPRINT South Korea China Taiwan STRATEGIC INITIATIVES Expand sales presence in Asia Address additional distribution channels in Asia Thailand Vietnam Philippines Malaysia Indonesia 12 Increase sales activities with key accounts for smaller groups Specific China development programme addressing capabilities across all divisions

13 FURTHER DIGITALISATION STATE-OF-THE ART TECHNOLOGY APPLICATIONS DIGITALLY EMPOWERED PROCESSES DIGITAL TRAVELLER CAPABILITIES 13 Deploy innovative customer facing systems and implement Oracle e-commerce platform at Global Travel Distribution Rollout new proprietary reservation systems at Global Travel Services Deploy advanced search capabilities allowing for complex search requests Digital visa processing for interaction with governments Rollout tool for travel agencies with improved usability and itinerary management, including third party content Enhance mobile features of existing applications and increase number of touch points on a traveller's journey Exploit new sales opportunities by introducing mobile travel assistant Invest in digital capabilities and digital advisory board Foster cultural focus on digital innovation

14 EXPAND SERVICE OFFERING EXPAND SERVICE OFFERING FOSTER CROSS-SELLING OPPORTUNITIES DEVELOP INTO NEW GEOGRAPHIES AND CHANNELS 14 Expand service and product offering to cater to specific needs of Asian, Middle Eastern and African source markets Increase number of beach destinations and third party products Expand into services adjacent to visa processing and new disciplines such as front office services Foster cross-selling opportunities such as destination services or visa services across divisions Grow share of Destination Management Services business for non-europe customer segments Group travel online sales

15 TRADING UPDATE THOMAS PEYER CHIEF FINANCIAL OFFICER

16 2.8% ORGANIC GROWTH ACHIEVED BY CORE BUSINESS Pro-Forma Preliminary Turnover FY 2014 TURNOVER (FY14 UNAUDITED) FY14 FY13 Δ% nominal Δ% organic1) Global Travel Distribution (previously FIT) Global Travel Services2) Group Travel Experts Destination Management Specialists Subtotal2) Outbound2) (CHF million) VFS Global Outbound Nordic Outbound Europe/Asia Less turnover between segments Kuoni Group 1) Adjusted for currency fluctuations and acquisitions/divestments; 2) Aggregated without turnover elimination between segments 16

17 STABLE TURNOVER FOR THE GROUP WITH ROBUST GROWTH IN THE CORE BUSINESS EXPECTED RESULTS IN-LINE WITH GUIDANCE FOR Turnover 2014 on previous year level (organic -0.1%) Robust growth in the core business driven by increasing travel volumes in Asia Continued geopolitical turmoil in Egypt, Kenya, Thailand, Ukraine and Russia as well as adverse currency movements led to lower overall top line growth. Currency impact of -1.7% and impact from divestments of -1.0% EBIT is expected to be around CHF 85 million Net profit is expected to be around CHF 66 million including accrued charges from the divestiture project The full year results will be announced as previously stated on 17 March 2015

18 FINANCIAL EFFECTS FY results 2014 to be published based on current segment structure Kuoni Group to report three segments as of 2015 (GTD, GTS and VFS Global) REPORTING DIVIDEND POLICY MID-TERM TARGETS Outbound Nordic and Outbound Europe & Asia to be reported as discontinued operations/ assets held for sale as of 2015 (in accordance with IFRS 5) Income statement items to be disclosed as discontinued operations Assets and liabilities to be reclassified as assets held for sale Depreciation and amortisation waived Net result 2015 expected to be negatively impacted by divestiture charges of approximately CHF 25 million, while the proceeds from the divestiture are expected to be generated more likely in 2016 Intention to continue with the dividend pay-out ratio of 40-45% of the net result attributable to shareholders excluding non-recurring items from the divestment process New mid-term targets to be communicated on 17 March 2015 with announcement of FY results 2014 Aspiration to grow significantly faster than the global travel market, which according to UNWTO will expand by 3.8%1) annually and continued strong cash flow generation 1) UNWTO press release from December 18,

19 CLOSING REMARKS HEINZ KARRER CHAIRMAN

20 QUESTIONS & ANSWERS

21 ADDITIONAL INFORMATION 21

22 LEADING TOUR OPERATOR RANKING AMONG TOP FIVE IN EUROPE OUTBOUND BUSINESS TO BE DISCLOSED AS DISCONTINUED OPERATIONS/ASSETS HELD FOR SALE AS OF FISCAL YEAR 2015 NORDIC BENELUX Turnover 2014 CHF 844 m1) FTEs ) Turnover 2014 CHF 37 m1) FTEs ) No 3 tour operator 3 specialist brands Online distribution mainly Online distribution only 8 retail outlets INDIA SWITZERLAND Turnover 2014 CHF 679 FTEs 2014 m1) ) Turnover 2014 CHF138 FTEs 2014 m1) ) No 1 tour operator 17 own retail outlets, 88 franchised 81 retail outlets Business travel expert Strong specialist portfolio UK HONG KONG Turnover 2014 CHF 410 m1) FTEs ) Turnover 2014 CHF 79 m1) FTEs ) 31 retail outlets 4 retail outlets Premium specialist brand High-end niche market focus Long-haul expert Leading market position in Switzerland Top three position in Nordics Premium brands in key markets Strong specialist portfolio Growing presence in India and Hong Kong Distribution through a variety of proprietary and 3rd party channels 1) Preliminary unaudited turnover figures 2014; 2) As of 30 September

23 KUONI GROUP ORGANISATIONAL STRUCTURE AS OF 14 JANUARY 2015 Chief Executive Officer Peter Meier Human Resources Finance1) IT Thomas Peyer Strategy & Communication2) Exit of Tour Operating Activities Global Travel Distribution Global Travel Services VFS Global Outbound Ivan Walter Rolf Schafroth Zubin Karkaria Rolf Schafroth Member of Executive Board 1) Including Risk, Legal & Compliance; 2) Including Investor Relations 23

24 GLOBAL TRAVEL DISTRIBUTION (GTD) TURNOVER BUSINESS OVERVIEW CHF million Leading and highly experienced B2B wholesaler and provider of accommodation and land components to tour operators and offline and online travel agencies globally Strong position in intermediated accommodation market globally with ~ room nights sold online per day ~43% of turnover sourced from fast-growing Asia/Pacific, the Middle East and Africa markets

25 GLOBAL TRAVEL SERVICES (GTS) TURNOVER1) BUSINESS OVERVIEW CHF million Long-standing and leading provider of group travel and destination management services to tour operators and travel agencies globally Sources and coordinates destination services including accommodation, transportation, tours and activities, venues and event management (MICE)2) #1 player in the growing Asian group travel market with 60% of turnover generated from Asia/Pacific source markets ~ leisure tours per year 873 ~1.8 million travellers per year 25 sales offices Group Travel Experts Destination management specialist with ~2040% market share in respective destinations DM Specialists 1) Aggregated without turnover elimination between segments; 2) MICE=Meetings, Incentives, Conferences & Events

26 VFS GLOBAL TURNOVER BUSINESS OVERVIEW CHF million Pioneer in travel-related business process outsourcing solutions for governments and public institutions ~18 million visa applications processed in ~50% global market share 205 ~70% turnover generated from travellers from Asia/Pacific ~1 400 visa application centres in 117 countries Differentiated market position with leading technologies, infrastructure and capabilities Long-term customer relationships and contracts

27 WELL POSITIONED WITHIN THE COMPLEX TRAVEL DISTRIBUTION ECO-SYSTEM TRAVEL ECO-SYSTEM SUPPLIERS Kuoni Group Supplier.com Highly fragmented CUSTOMERS Large international OTAs Hotels Metasearch Smaller/regional OTAs Transfers Tour Operators Travel Retail Switches/ GDS Tours GTD (FIT Wholesaler) Flights Group travel Destination Management 27 Consolidators/ Brokers Visa Processing Services 2014: >1bn international arrivals Changing behaviours Countless desires

28 A LEADING GLOBAL B2B PROVIDER OF HOTEL ACCOMMODATION AND LAND COMPONENTS GLOBAL TRAVEL DISTRIBUTION (GTD) BUSINESS MODEL Supply side1) Our position Hotel Accommodation self-contracted hotels in 152 countries A leading B2B provider 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 Over room nights per day sold online in 2014 Land Components Brands: Over transfers and sightseeing activities in more than cities available 28 1) FY 2013

29 GROUP TRAVEL PROVIDER ORGANISING MORE THAN TOURS YEARLY GLOBAL TRAVEL SERVICES (GTS) GROUP TRAVEL BUSINESS MODEL Supply side1) 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 leisure tours every year, in 15 languages Group of travellers Travel Retail Group of travellers ~1.8m travellers 25 sales offices > 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 > sightseeing items > meals 29 Tour Operators 1) FY 2013

30 DESTINATION INSIDERS PROVIDING ACCESS TO COMPLEX DESTINATIONS AND PRODUCTS GLOBAL TRAVEL SERVICES (GTS) DESTINATION MANAGEMENT BUSINESS MODEL Supply side Our position Land components Hotels Cars Tours Transfers 30 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

31 LEADING OUTSOURCING PARTNER PROVIDING VISA PROCESSING SERVICES TO GOVERNMENTS VFS GLOBAL 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 ~1 400 Visa Application Centers in 117 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) 31 Application Centre Customer

32 PRELIMINARY TURNOVER FY 2014 BASED ON 2014 REPORTING STRUCTURE TURNOVER (UNAUDITED) FY14 FY13 Δ% nominal Δ% organic1) ) Destination Management Specialists VFS Global (CHF million) Group Travel FIT (Fully Independent Traveller) Outbound Nordic Outbound Europe/Asia Less turnover between segments Kuoni Group 1) Adjusted for currency fluctuations and acquisitions/divestments; 2) Includes turnover of CHF 59m from divested entities 32

33 FINANCIAL CALENDAR 2015 REPORTS ON BUSINESS PERFORMANCE ON THE FOLLOWING DATES: Annual Results March 2015 General Meeting of Shareholders 20 April 2015 in Zurich CONTACT DETAILS 33 Corporate Communications Phone: communications@kuoni.com Investor Relations Phone: investor.relations@kuoni.com mailing list:

34 DISCLAIMER THIS COMMUNICATION CONTAINS STATEMENTS THAT CONSTITUTE FORWARD-LOOKING STATEMENTS INCLUDING, BUT NOT LIMITED TO, THOSE USING THE WORDS BELIEVES, ASSUMES, EXPECTS OR FORMULATIONS OF A SIMILAR KIND. 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. SUCH FORWARD-LOOKING STATEMENTS ARE MADE ON THE BASIS OF ASSUMPTIONS AND EXPECTATIONS THAT WE BELIEVE TO BE REASONABLE AT THIS TIME, BUT MAY PROVE TO BE ERRONEOUS. BECAUSE THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES, ACTUAL FUTURE RESULTS, THE FINANCIAL CONDITION, THE DEVELOPMENT OR PERFORMANCE OF KUONI TRAVEL HOLDING AND/OR ITS AFFILIATES (REFERRED TO AS KUONI ) 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'S ABILITY TO CONTROL OR ESTIMATE PRECISELY, SUCH AS FUTURE MARKET CONDITIONS, CURRENCY FLUCTUATIONS, THE BEHAVIOUR 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. IT SHOULD BE NOTED THAT PAST PERFORMANCE IS NOT A GUIDE TO FUTURE PERFORMANCE. PLEASE ALSO NOTE THAT INTERIM RESULTS ARE NOT NECESSARILY INDICATIVE OF THE FULL-YEAR RESULTS. MOREOVER, THE PRO FORMA INFORMATION PROVIDED IN THIS PRESENTATION SERVES AS AN ILLUSTRATION AND CONTAINS SIMPLIFIED ASSUMPTIONS. ROUNDING EFFECTS MAY OCCUR. THE REPRESENTATION OF THIS FINANCIAL INFORMATION IS BASED ON HYPOTHETICAL BUSINESS EVENTS AND FACTS AND DOES NOT REFLECT KUONI'S ACTUAL ASSET, FINANCIAL AND INCOME SITUATION. THE ASSET, FINANCIAL AND INCOME SITUATION OF KUONI IN FUTURE FINANCIAL STATEMENTS AND REPORTS MAY SUBSTANTIALLY DIFFER FROM THE INFORMATION PROVIDED HEREIN. THE REASON FOR THIS IS A STRING OF FACTORS, SUCH AS, FOR EXAMPLE, BUSINESS DEVELOPMENTS, CHANGES IN THE MARKET, AND IN THE LEGAL, REGULATORY AND/OR ECONOMIC FRAMEWORK, AS WELL AS AMENDED ACCOUNTING REGULATIONS. PERSONS REQUIRING ADVICE SHOULD CONSULT AN INDEPENDENT ADVISER. THIS COMMUNICATION DOES NOT CONSTITUTE AN OFFER OR AN INVITATION FOR THE SALE OR PURCHASE OF SECURITIES IN ANY JURISDICTION. 34