Kuoni Group posts organic growth above market – All tour operating activities sold faster than planned
First half-year 2015
- CHF 1,532 million turnover from continuing operations, positive organic growth of +6.8%
- Strong Swiss franc had -7.4% negative impact on turnover
- Significant organic turnover growth for core businesses at GTD (+10.9%) and
VFS Global (+28.8%) Divisions - Operating earnings before amortisation (EBITA): CHF 16.7 million;
EBIT: CHF 3.6 million - Net result from continuing operations: CHF 5.9 million
- Net result from discontinued operations: CHF -178.0 million,
includes one-time effects from sale of European tour operating activities - All tour operating activities sold successfully and faster than planned
Outlook for 2015
- Full-year operating earnings (EBIT) from continuing operations expected to be in the range of CHF 40 to CHF 50 million
Key figures
CHF million | 1.1.- | 1.1.- | Change in % |
Turnover | 1,531.9 | 1,541.9 | –?0.6 |
Gross profit | 278.1 | 288.2 | –?3.5 |
Gross profit margin (%) | 18.2 | 18.7 | ? |
Operating earnings before amortisation (EBITA) | 16.7 | 45.42 | –?63.2 |
EBITA margin (%) | 1.1 | 2.9 | ? |
Operating earnings (EBIT) | 3.6 | 30.72 | –?88.3 |
EBIT margin (%) | 0.2 | 2.0 | ? |
Net result from continuing operations | 5.9 | 28.4 | –?79.2 |
Net result from discontinued operations | –?178.0 | –?42.4 | –?319.8 |
Net Result | -172.1 | -14.0 | |
Free cash flow from continuing operations | 31.9 | 50.0 | –?36.2 |
Free cash flow from continuing and discontinued operations | 101.5 | 141.8 | –?28.4 |
1 Restatement of prior-year figures due to the decision to sell all outbound tour operating activities
2 Incl. positive contribution of CHF 10.1 million from the disposal of a property in Zurich in first half of 2014
Peter Meier, CEO of Kuoni Group, made the following comments:
"Kuoni Group's organic growth above market in first half of 2015 vindicates the new strategic direction initiated at the beginning of the year and the focus on global B2B business areas. However, the strong Swiss franc had a significant negative impact on turnover due to the conversion into our presentation currency. The two divisions Global Travel Distribution (GTD) and VFS Global recorded strong growth. In the first six months of the year, VFS Global processed over 10 million visa applications for the first time. With the successful sale of all tour operating activities in June and August 2015, we achieved a key objective of the new strategic direction faster than planned."
Current trading 2015
As at 9 August 2015, percentage changes in booking levels and turnover for the year to date compared with the equivalent prior-year period were as follows in Swiss franc (CHF) and local currency (LC) terms:
Continuing operations | CHF | LC |
Global Travel Distribution (GTD) | +3% | +12% |
Global Travel Services (GTS)1 | -10% | 0% |
VFS Global (Number of applications processed) | +11% |
Outlook for 2015
For 2015 as a whole the Kuoni Group expects operating earnings (EBIT) from continuing operations in the range of CHF 40 to CHF 50 million. This includes an expected negative exchange rate impact on the presentation currency of around CHF 7.5 million compared to prior-year due to the strong appreciation of the Swiss franc in 2015.
The Indian Destination Management business that was sold at the beginning of August 2015 will in future be reported under “discontinued operations”. In the outlook for financial year 2015 the unit is already treated as a “discontinued operation”.
In addition, at the time of deconsolidation of the sold tour operating activities and Destination Management India, the over the years accumulated currency translation losses (CTA) will charge the net result. This one-off special accounting effect does not impact the equity or cash position. As at end-June 2015, the accumulated currency translation losses amount to about CHF 215 million.
Conference calls on Kuoni Group's 2015 interim figures
The following conference calls will be held today for analysts and journalists: analysts 9.30 a.m. CEST (in English); media 11.00 a.m. CEST (in German) Peter Meier, CEO, and Thomas Peyer, CFO of Kuoni Group, will be commenting on the 2015 half-year results.
1 Excl. Destination Management India unit sold in August 2015
Kuoni Group figures
Kuoni Group generated turnover of CHF 1,532 million in the first half of 2015 (20141: CHF 1,542 million). Organic growth came to +6.8%. Exchange rate effects had a significant -7.4% significant negative impact on turnover in Swiss francs, the Group's presentation currency. The GTD and VFS Global Divisions recorded positive organic growth of 10.9% and 28.8% respectively. The GTS Division achieved strong growth in group travel business in China and Taiwan, while demand in the important Japanese market declined.
Gross profit came to CHF 278 million (20141: CHF 288 million). Organic growth in gross profit came to +2.5%. The gross profit margin came to 18.2% (20141: 18.7%). The conversion into Swiss francs had a negative effect. VFS Global significantly increased its gross profit thanks to strong growth. By contrast, lower turnover from the GTS Division in the Japanese market had a negative impact on gross profit. Targeted marketing activities aimed at accelerating growth in the key markets meant that the GTD Division had to accept lower margins.
Earnings before amortisation (EBITA)came to CHF 16.7 million (20141,2: CHF 45.4 million). Operating earnings (EBIT) stood at CHF 3.6 million (20141,2: CHF 30.7 million). The lower gross profit in GTD and GTS Divisions as well as the higher cost of the growth strategy in the GTD and VFS Global Divisions had a negative effect on operating earnings development. It should also be noted that the prior-year results were boosted by the CHF 10.1 million proceeds of a property sale in Zurich.
Net profit from continuing operationscame to CHF 5.9 million (20141: CHF 28.4 million). The net result from discontinued operations stood at CHF -178.0 million (20141: CHF -42.4 million). This includes non-recurring effects, as communicated in June when the European tour operating activities were sold. These effects include the net proceeds, the cost of the sales process and impairments on goodwill. Most of this has no effect on liquidity.
As communicated in January 2015, the discontinued operations include the outbound tour operators in Switzerland, the UK, Scandinavia/Finland, Benelux, India and Hong Kong. Destination Management India, the sale of which was announced on 7 August 2015, is still included in the half-year results under "continuing operations" but will in future be reported under "discontinued operations".
Cash flow from operating activities from continuing operations came to CHF 40.9 million (20141: CHF 63.5 million). Free cash flow from continuing operations came to CHF 31.9 million (20141: CHF 50.0 million). The year-on-year decline is due to lower operating earnings (EBIT) and changes in net working capital.
1 Restatement of prior-year figures due to the decision to sell all outbound tour operating activities
2 Incl. positive contribution of CHF 10.1 million from the disposal of a property in Zurich in first half of 2014
Kuoni Group's equity at 30 June 2015 came to CHF 440 million (31.12.2014: CHF 779 million). The equity ratio stood at 18.5% (31.12.2014: 32.2%). Equity declined significantly owing to the negative net result, the distribution against capital reserves and material currency translation losses (CHF -114 million) as a result of the Swiss National Bank's decision to abandon the minimum exchange rate against the euro.
As at 30 June 2015, Kuoni Group's continuing operations (incl. Destination Management India) had 8,564 employees (FTE) (2014: 8,054 FTE).
Change in Kuoni Group’s Executive Board
Group CFO Thomas Peyer will leave Kuoni Group. Thomas Peyer has been with Kuoni since 1999 and has held various senior roles in Finance prior to his appointment as Group CFO in March 2014. He was instrumental in the divestiture process of the Outbound units, which will be concluded in the course of 2015. A search for his successor has been initiated and a successor will be announced at a later stage. Thomas Peyer will remain in the role as Group CFO until first-half of 2016. The Board of Directors wants to thank Thomas Peyer for his valuable contribution to the development of the company over the years.
Kuoni Group figures
Income Statement
CHF million | 1.1.-30.6.2015 | 1.1.-30.6.20141 | Change in % | 1.1.-31.12.20141 |
Continuing operations | ||||
Turnover | 1,531.9 | 1,541.9 | -0.6 | 3,436.0 |
Direct costs | -1,253.8 | -1,253.7 | 0.0 | -2,810.3 |
Gross profit | 278.1 | 288.2 | -3.5 | 625.7 |
Personnel expense | -167.6 | -160.8 | -4.2 | -329.2 |
Marketing and advertising expense | -4.7 | -4.8 | 2.1 | -8.3 |
Other operating expense | -76.5 | -60.5 | -26.4 | -144.4 |
Share in result from joint ventures | 2.5 | -0.8 | -2.0 | |
Depreciation | -15.1 | -15.9 | 5.0 | -32.5 |
Earnings before interest, taxes and amortisation (EBITA) | 16.7 | 45.42 | -63.2 | 109.32 |
Amortisation | -13.1 | -14.7 | 10.9 | -29.4 |
Earnings before interest and taxes (EBIT) | 3.6 | 30.72 | -88.3 | 79.92 |
Financial income | 3.3 | 2.1 | 57.1 | 5.2 |
Financial expense | -1.2 | -3.0 | 60.0 | -3.9 |
Result before taxes | 5.7 | 29.8 | -80.9 | 81.2 |
Income tax income / (expense) | 0.2 | -1.4 | n.a. | -18.8 |
Net result from continuing operations | 5.9 | 28.4 | -79.2 | 62.4 |
Net result from discontinued operations, net of income taxes | -178.0 | -42.4 | -319.8 | 5.0 |
Net Result | -172.1 | -14.0 | 67.4 | |
Of which: | ||||
Attributable to non-controlling | 0.3 | 0.3 | 1.0 | |
Attributable to shareholders of Kuoni | -172.4 | -14.3 | 66.4 | |
From continuing and discontinued operations: | ||||
Basic / diluted earnings per registered share A | -8.93 | -0.74 | 3.44 | |
Basic / diluted earnings per registered share B | -44.63 | -3.69 | 17.20 | |
From continuing operations: | ||||
Basic / diluted earnings per registered share A | 0.30 | 1.45 | 3.17 | |
Basic / diluted earnings per registered share B | 1.48 | 7.27 | 15.87 |
1 Restatement of prior-year figures due to the decision to sell all outbound tour operating activities
2 Incl. positive contribution of CHF 10.1 million from the disposal of a property in Zurich in first half of 2014
Breakdown of turnover
CHF million | 1.1.-30.6.2015 | 1.1.-30.6.20141 | Change in % | Organic Growth in % | 1.1.-31.12.20141 |
Global Travel Distribution (GTD) | 872.9 | 848.1 | 2.9 | 10.9 | 1,933.6 |
Global Travel Services (GTS) | 502.3 | 570.2 | -11.9 | -4.4 | 1,234.2 |
VFS Global | 158.1 | 127.1 | 24.4 | 28.8 | 270.8 |
Less turnover eliminations | -1.4 | -3.5 | -2.6 | ||
Kuoni Group | 1,531.9 | 1 41.9 | -0.6 | 6.8 | 3,436.0 |
Breakdown of operating earnings before amortisation (EBITA)
CHF million | 1.1.-30.6.2015 | 1.1.-30.6.20141 | 1.1.-31.12.20141 |
Global Travel Distribution (GTD) | 12.5 | 25.9 | 63.2 |
Global Travel Services (GTS) | -17.6 | -6.5 | 4.8 |
VFS Global | 32.6 | 26.5 | 52.5 |
Corporate | -10.8 | -0.52 | -11.22 |
Kuoni Group | 16.7 | 45.42 | 109.32 |
Breakdown of operating earnings (EBIT)
CHF million | 1.1.-30.6.2015 | 1.1.-30.6.20141 | 1.1.-31.12.20141 |
Global Travel Distribution (GTD) | 3.2 | 15.1 | 42.0 |
Global Travel Services (GTS) | -21.4 | -10.4 | -3.4 |
VFS Global | 32.6 | 26.5 | 52.5 |
Corporate | -10.8 | -0.52 | -11.22 |
Kuoni Group | 3.6 | 30.72 | 79.92 |
1 Restatement of prior-year figures due to the decision to sell all outbound tour operating activities
2 Incl. positive contribution of CHF 10.1 million from the disposal of a property in Zurich in first half of 2014
Divisions
Global Travel Distribution (GTD)
Turnover came to CHF 873 million (20141: CHF 848 million). Organic growth was +10.9%. Earnings before amortisation (EBITA) came to CHF 12.5 million (20141: CHF 25.9 million). Operating earnings (EBIT) stood at CHF 3.2 million (20141: CHF 15.1 million).
Approximately 6.6 million room nights were booked in the first half of 2015, an increase of 7.8% compared to the same period last year. All source markets recorded more bookings than in 2014. Strong growth was achieved in the Asia/Pacific market, especially in China, India, Singapore and Indonesia. Lower margins were accepted in order to accelerate growth in the key markets through targeted marketing activities. Higher personnel costs resulting from the growth strategy and investments in new IT applications also had an impact on operating earnings.
Global Travel Services (GTS)
Turnover of CHF 502 million was generated in the first six months of 2015 (20141: CHF 570 million). Organic growth came to -4.4%. Earnings before amortisation (EBITA) came to CHF -17.6 million (20141: CHF -6.5 million). Operating earnings (EBIT) stood at CHF -21.4 million (20141: CHF -10.4 million).
In the group travel business in Asia there was above-average growth in China and Taiwan while demand declined in Japan. Positive growth outside Japan resulted in overall organic growth of +4.1% in the group travel business. However, the strong Swiss franc had a very negative effect on the conversion into the presentation currency, leading to a fall in turnover. Lower gross profit in the Japanese market also had a negative effect on the operating result. Approximately 1.4 million room nights were booked in the first half of 2015, an increase of 4.1%.
Geopolitical events had a negative effect on demand at the destination management specialists, particularly in the Middle East and Africa, which led to a decline in turnover. Demand was up in the USA and Asia/Pacific by contrast. Cost savings and a focus on destination services with higher margins and more profitable accounts led to an improvement in operating earnings.
Комментарии