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Club Med Reports Growth in the Americas and Stable Activity Worldwide in a Mixed Environment

February 25, 2014 Financial No Comments Email Email

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

“North America has been very dynamic in all our resorts with groups and individual business. We had an excellent start to the year in January and February thanks to volume, consistent rate integrity and significant growth of our ski business to Europe. This is very exciting news as 2013 was already a record year for the North American zone.”

Mulia-Bali1 Indicator that best represents the business : total sales regardless the operating structure

2 Stated in terms of business volume at constant exchange rates (as at February 15, 2014)

I. Business performance

  • Business Volume Villages (corresponding to total sales regardless of village operating structure) amounted to € 352 million versus € 355 million in the prior year, down 0.8%. At constant exchange rate, business volume rose by 3.3%, supported by the growth of Asia and the Americas.

The slight decrease of 1% of Europe-Africa was due to early All Saints school holidays which were positioned on the Winter season last year, and to the continuing deterioration of the French tourism market.

  • Capacity is globally up 1.6% in the first quarter, due to the opening of the village of Guilin in China. On the Europe-Africa region, the capacity was adjusted downward by 2.7%, including the closure of the 3-Trident village of El Gouna in Egypt.
  • RevPab (Revenue per available bed) posts an increase at constant exchange rate of 2.8% at 110 € versus 107 € in the first quarter 2013 thanks to the improvement of the average price per hotel day at 161,5 € (+3.5%) and to the stability of the occupancy rate at 66%.
  • The weight of the customers staying in the most upmarket villages (4 and 5-Trident villages) continues to rise by 1.1 percentage point. In the first quarter 2013, they count for more than 81% of the total number of customers.

II. First quarter highlights

  • Market share gains in France

In an Individual French market down by 5% (in business volume) according to the latest SETO1 data available on departures from November 2013 to January 2014, Club Méditerranée continues to beat the market by posting a retreat limited to 1% over the same period.

  • Russia : opening of an office and a travel agency in Moscow on February 1, 2014

After 18 years of successful collaboration between Club Mediterranée and its Russian distributor Tsvetnoy, the Group has jointly decided to promote directly the sale of the Club Med products in Russia. The objective of Club Mediterranée is to develop the brand in Russia and attract new customers (as a reminder, 13 000 Russian customers stayed in a Club Med village in 2013) through the set up of a call center and a dedicated website.

This opening is part of the objective that the Group has set to have a third of its customers from the fast-growing markets2 by the end of 2015.

1 SETO : Syndicat des Entreprises du Tour Operating (Union of Tour Operating Companies)

2 Fast-growing markets: Russia, Turkey, South Africa, Ukraine, Middle East, Mexico, Brazil, Argentina, Venezuela, Chile, China, Singapore, South Korea, India, Malaysia, Hong-Kong, Thailand, Taiwan, Israel

III. Outlook

  • Year-to-date cumulative Winter 14 bookings up but a significant decline, particularly in France

Winter 14 capacity was adjusted to +2.2% versus +2,4% released on the 2013 annual results, following the decision to postpone the opening date of the village of Belek (Turkey) given the financial difficulties faced by the owner of the village.

As of February 15, 2014, cumulative Winter 2014 bookings, expressed in business volume at constant exchange rate, are up 3.1% versus Winter 2013. At the same time last year, bookings represented 90% of the Winter season.

All the regions have posted to date an increase. Asia is driven by the dynamism of fast-growing countries, including China, where bookings are up 16%. The Americas, despite a sharp decline in Argentina, recorded growth of its reservations of 7.1% to date, driven by the performance of the United States and Brazil.

In a very downbeat environment in some European tourism markets, and especially in the French individual market that is down 4.5% in business volume (SETO data at the end of January), Europe-Africa bookings posted growth of 1.3%.

Over the past 8 weeks, bookings are down 4,6%. This slowdown is due solely to the 12.1% decline in bookings in Europe-Africa.

  • Bookings for Summer 2013 are up

The bookings, which have benefited from an active early booking policy in all geographical regions, are encouraging despite continued tough market conditions in some European markets, and particularly in France. At the same date last year, bookings represented approximately one third of the summer season.

IV. Shareholding

  • Thresholds

UBS AG declared it had exceeded the threshold of 5% of the capital of Club Méditerranée on November 29, 2013. At that time, the Company hold 1,650,826 shares, representing 5.18% of the capital and 4.63% of voting rights of Club Méditerranée. The majority of the participation of UBS AG is held under the cover of the 1,650,805 Contracts For Differences (CFD1) sold by the bank to its customers. UBS AG hold 115 shares on its own at that time.

  • Update on the public tender offer

Following the appeals filed with the Paris Court of Appeal seeking cancellation of the the French Autorité des Marchés Financiers(“AMF”) decision regarding the compliance of the public tender offer initiated on May 27, 2013 by Axa Private Equity (now Axa Capital / Ardian) and Fosun jointly with the management of Club Méditerranée, the date for pleadings has been set for February 27, 2014 by the Paris Court of Appeal.

The Paris Court of Appeal should indicate, at the end of the hearing, the date on which the decision would be pronounced.

1 A “financial contract for differences” or “CFD” is a financial instrument by which term the investor acquires the right to collect the difference between the price of the underlying at the time of conclusion of the contract and price on the exercise date

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