Club Med Shows Very Strong Growth in First-Half 2011 Results

MIAMI, June 9, 2011 /PRNewswire/ --

• Business volume up 12% to euro 763 million
• Revenue up 11% to euro 754 million -Number of 4 and 5 Trident customers up 22% (or 78,000 customers)
• Operating Income Villages up 67% to euro 47 million
• Doubling of net income before tax and non-recurring items, to euro 28 million (vs. Euro 14 million in first-half 2010)  
• Net income of euro 10 million (vs. euro 3 million in first-half 2010)
• Free cash flow of euro 30 million (vs. euro 21 million in first-half 2010)

In discussing the interim results, Henri Giscard d'Estaing, Chairman and Chief Executive Officer, noted that:

"The very sharp improvement in first-half results and the increase in the number of our customers, despite an unfavorable environment in the second part of the semester, have demonstrated the effectiveness of the strategy that Club Med has steadily led since 2004. Backed by its historical strengths (its global brand, its locations, its all-inclusive package that has now been moved upscale, and its GO's), Club Med is capitalizing on its global market presence and the transformation of its business model, which enable it to spread its risks and adjust capacity to events. The overperformance delivered over the winter could therefore enable the Group to offset the unfavorable impact over the summer of currently known events."

Commenting on Club Med's performance in North America, President and Chief Executive Officer, Xavier Mufraggi said:

"In North America, we have seen favorable results which are in-line with the worldwide performance.  Our positive performance, despite tough economic conditions, continues to be driven in part, by the successful re-launch of Sandpiper Bay located in Port St Lucie, Florida.  The all-inclusive family resort caters to the organization's core clientele:  families, sports enthusiasts (with new Elite Academies specializing in tennis, golf and fitness) as well as group business with a new renovated business center."

• Club Med Sandpiper Bay exceeded expectations in the first half of 2011 by delivering 47% more bookings and 65% more sales then Winter 2010.  
• In addition to it's strong Winter performance, Sandpiper Bay is already the top selling resort for North Americans this Summer.

I – Very strong growth results:  

• In the first six months of fiscal 2011, business volume Villages (corresponding to total sales regardless village operating structure) rose by 12% to euro 763 million from euro 680 million in first-half 2010.
• Villages revenue increased by 8% at constant exchange rates over the period, with every region reporting gains, including 7.7% in Europe, 10.5% in the Americas and 6.4% in Asia.
• RevPAB (revenue per available bed) surged 5.5%, led by a 2.2% improvement in the average price per hotel day to euro 154 and a 2.4-point increase in the occupancy rate to almost 70%.
• EBITDA Villages rose sharply to euro 80 million from euro 61 million in first-half 2010, with EBITDA margin widening to 10.7% from 9.1% a year earlier.
• Operating Income Villages stood at euro 47 million for the period, up 67% and already exceeding the full-year 2010 figure.
• On Operating Income Villages, event-related lost revenue had around a euro 7 million impact in the first half, but customer shifts to other destinations helped to reduce that impact by almost half.

In addition, some euro 1.5 million in costs were recognized in operating income from the management of assets and in other operating income & expense

• Net income before tax and non-recurring items doubled year-on-year to euro 28 million.
• Net income stood at euro 10 million, compared with euro 3 million in first-half 2010.
• Free cash flow improved to euro 30 million from euro 21 million a year earlier, and stood at a positive euro 13 million before the euro 17-million gain on the sale of shares in the Italian property companies.
• Debt continued to be reduced, to euro 169 million at end-April 2011 from euro 197 million at end-October 2010.

II – The number of 4 and 5 Trident customers is still rising very quickly and Club Med is gaining new market shares

The number of 4 and 5 Trident customers rose by 22% or 78,000 customers. In all, 72% of customers chose 4 and 5 Trident villages over the winter, compared with 50% four years ago. In addition, the total number of customers increased by 7% to 599,000 from 560,000 in first-half 2010. At the same time, Club Med is gaining new market shares. In China, the number of new customers grew by 56% on the 1st-half 2011. In the United Kingdom, for example, where the market is highly competitive and concentrated, Club Med has gained 12,000 new customers over the past four years. In 2011, sales are up 16% year-to-date, in a market(1) up just 2%.

III – Sinai Bay, Yabuli and Sandpiper Bay villages successfully opened

Opened in December 2010, Sinai Bay in Egypt is a 4 Trident village with a 5 Trident Luxury Space. It enjoyed very high satisfaction ratings in first-half 2011, despite the temporary events-related closure in February. Sandpiper Bay in Florida, which has been entirely renovated and upgraded from 3 to 4 Tridents, delivered much the same performance, with RevPAB increasing by 52%. Lastly, the Yabuli ski village opened in December 2010 reported results in line with objectives. As Club Med's first village in China, it offers the Club Med brand excellent visibility in this highly promising market.

IV – Outlook for Summer 2011

Bookings for the 2011 summer season are 5.4% ahead of the summer 2010 figure. At the same date last year, nearly two-thirds of the summer bookings had been recorded.

Although bookings were down 0.7% in Asia, they were up 5.2% in Europe and 17% in the Americas.

Trailing four-week bookings are down 6.8%, of which: -A 9.1% decline in Europe, reflecting the regional impact of events in North Africa. -A 9% decline in Asia, with a sharp fall off in Japan due to the closing of Sahoro this summer and the impact of natural disasters. This was partly offset by the sustained, very strong growth in China and Southeast Asia. -A further 17% increase in the Americas, lifted by the reopening of the renovated, upgraded Sandpiper Bay village.

Capacity was reduced by 0.8% for the summer 2011 season, by: -Definitively closing the villages of Athenia in Greece and Metaponto in Italy, which no longer met Club Med standards. -Adjusting capacity in Tunisia in response to the events.

V – Opening of the new Valmorel village in December 2011

In December 2011, the new Valmorel village will open its doors in the Savoy region of France. A mountain village offering the full range from upscale to luxury, Valmorel has 394 4 Tridents rooms, 26 suites in the 5 Trident Luxury Space and 27 chalet-apartments. The initial marketing phase for the chalet-apartments began last April, with 10 units already sold and 7 options taken.

APPENDIX

' Net income before tax and non-recurring items

Tax (2) (2) (6) (4)

www.clubmed.com.us

(1) GFK data

SOURCE Club Med