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1
Annual results8 January 2002
2
1998-2000 SUMMARY OF STRATEGY

• Growth strategy linked with increased capacity

-
1
5
-

• New villages

69.6
68.5
73.7
5.2 pts

• Occupancy rate

146,000
126,000
111,000
31.5

• New G.Ms

1,341
23.4
1,577
1,278

• Revenues

Proven concept and strategy
Core business revenues
3
2001 PURSUING OUR STRATEGY
Laying the foundations of future growth
Strong increase in capacity in 2001
New level of fixed costs
Necessity for double digit growthin 2001
4
FILM DE LANNEE 2001 POURSUITE DE LA STRATEGIE
2001 PURSUING OUR STRATEGY

• Growth strategy backed by increased capacity

15,986
16,922
5.8

• Capacity in hotel days

73.7
72.0
- 1.7 pt

• Occupancy rate

1,577
1,663
5.4

• Revenues

Growth insufficient to cover fixed costs
Core business revenues
5
2001 PURSUING OUR STRATEGY

• Growth strategy backed by product and brand
  strength

• In a SOFRES survey conducted from 19th to 20th
  October 2001, out of 1,005 people
• 68 of people interviewed would have total
  confidence in a Club Med holiday ( No.1 against
  its competitors)
• 69 have the same confidence in the brand as 6
  months ago and 76 are planning a Club Med
  holiday (80 of current clients) No.1 against
  its competitors

6
2001 PURSUING OUR STRATEGY

• and an exceptional level of satisfied GMs

• - 600,000 questionnaires were sent (in 9
  languages) 90 questions asked
• Exceptional average return rate 42
• 83 of GMs would like to come back
• very satisfied GMs 3,8 points since
  summer 98
• Favourites mini club, Sports, GO, Village

7
2001 ANALYSIS OF ACTIVITIES

• Trends before 11th September

revenues
6.2
1st quarter

• Beginning of recession in USA (end Nov)

6.3
2nd quarter

• Beginning of recession in Asia (February)

5.1
3rd quarter

• Beginning of recession in Europe (May)

A harsh global environment
8
2001 ANALYSIS OF ACTIVITIES

• Trends after 11th September

Reservation levels on
01/09/01
31/10/01
revenues
1.6
- 2.3
For September stays
4thquarter
1.2
7.0
- 9.4
For October stays
Impact of 11 September on operating result (23)
million Immediate reaction Plan announced on
Oct 18th
9
2001 CORE BUSINESS

• Contrasted results by geographic region

AMERICA
EUROPE
ASIA

• Revenues by region( of Core business revenues)

67.5
13.4
19.1

• ROCE

10.6
17.4
- 9.0
A strong model in Europe and Asia Difficulties
seen in America
10
2001 CORE BUSINESS

• Difficulties identified in America

• Economic reasons

Revenue growth in 2001 / 2000
11
2001 CORE BUSINESS

• Difficulties identified in America

• Structural reasons

• Restructuring began 18 months later than in
  Europe

• Difficulties in targeting marketing

• US headquarter costs based on anticipated
  stronger growth

A deterioration of results
Management restructured during the year
12
2001 JET TOURS

• Club Med management integrated too late

• Activities impacted by the implementation of a
  new reservations system and by the events of 11th
  September

• A return to balanced operating profit in the
  summer

Potential for improvement
13
2001 OTHER ACTIVITIES

• Gymnase Club

- Activity and results in line with forecasts

• Club Med World

- A successful commercial concept 400,000
visitors - Profitability to be improved

• OYYO

- Early launch - Renowned success of concept
14
KEY FIGURES
30/10/01
30/10/00
Change
Millions of Euros
1,985
1,889
5.1

• Consolidated revenues

50
103
51.4

• Operating income

(70)
59

• Group net income

318
24.8

• Capital expenditure

239
(52)
(214)
75.7

• Free cash flow

15
ACTIVITIES IN 2001

• More than 2 million clients
• 4 increase in number of GMs and 3.4 increase in
  hotel days sold
• Reduction in occupancy rate - 1.7 pt

31/10/01
31/10/00
2,052,800

• Number of clients
• ? including GM

2,020,500
1,782,300
1,710,500
16,922,000

• Capacity in hotel days

15,987,000

• Hotel days sold

12,184,000
11,782,000

• Occupancy rate

72.0
73.7
16
CAPACITY OCCUPANCY RATE
In thousands of hotel days
Occupancy rate
Europe - Africa
80.7
79.6
10,132
9,592
Openings Athénia, Mare Nostrum
America
64.5
62.7
4,138
3,880
Asia
60.9
57.5
2,652
Opening Kani
OpeningsCrested ButtePunta Cana
2,514
Total 2001 capacity 16 922(thousand hotel days)
17
CONSOLIDATED REVENUES

• 4.6 growth on a like-for-like basis and with
  constant exchange rates

In millions of Euros
1,985
5.1
Gymnase Club 24
4.6
1,889
FB -5
Perimeter effect
2001
2000
18
REVENUE DISTRIBUTION BY ZONE AND ACTIVITY
millions (on 31/10/01)
1,985 million Euros
(distribution and of total)
Comparablegrowth
Other activities 42 (2)
TO 281 (14)
Asia 223
0.7
America 317
1.7
Villages 1,663(84)
Europe - Africa1,123
8.5
19
PROFIT LOSS ACCOUNT
31/10/01
31/10/00
Change
In millions of Euros
5.1
1,985
1,889

• Consolidated revenues

• Operating income
• of revenues

50
103
51.5
2.5
5.5
59

• Group net income

(70)
20
OPERATING INCOME BY GEOGRAPHIC ZONE AND ACTIVITY
In millions of Euros
31/10/01
31/10/00
Europe Africa
68
84
America
(34)
(8)
Asia
32
24

• S/ Total Core Business

58
108
Tour Operating
(3)
(3)
Business Units
(5)
(2)

• Group total

50
103
21
ANALYSIS OF RESULTS FROMCORE BUSINESS
In millions of Euros
31/10/01
31/10/00

• Revenues

1,663
1,577

• Margins from variable costs

951
913
57.2
57.9
of revenues

• Fixed commercial costs

(213)
(191)

• Fixed operating costs

(633)
(568)

• Overheads

(47)
(46)

• OPERATING INCOME

58
108
3.5
6.8
of revenues
22
ANALYSIS OF RESULTS IN EUROPE
31/10/01
31/10/00
In millions of Euros
1,128

• Revenues by issuing zone and interzone

1,040
581

• Margin on variable costs

536
51.5
51.5
of revenues

• Fixed commercial costs

(121)
(103)

• Fixed operating costs

(366)
(325)

• Overheads

(26)
(24)

• OPERATING INCOME

68
84
6.1
8.1
of revenues

• ROCE

10.6
ND
23
ANALYSIS OF RESULTS IN ASIA
31/10/01
31/10/00
In millions of Euros
278
287

• Revenues by issuing zone and interzone

149
158

• Margin on variable costs

53.8
55.1
of revenues

• Fixed commercial costs

(31)
(32)

• Fixed operating costs

(88)
(85)

• Overheads

(6)
(9)

• OPERATING INCOME

24
32
8.6
11.1
of revenues

• ROCE

17.4
ND
24
ANALYSIS OF RESULTS IN AMERICA
31/10/01
31/10/00
In millions of Euros
400
383

• Revenues by issuing zone and interzone

221
219

• Margin on variable costs

55.2
57.2
of revenues

• Fixed commercial costs

(61)
(56)

• Fixed operating costs

(179)
(158)

• Overheads

(15)
(13)

• OPERATING INCOME

(34)
(8)
-8.5
-2.1
of revenues

• ROCE

- 9.0
ND
25
JET TOURS OPERATING INCOME
In millions of Euros
281
263

• Revenues

24
20

• Semi net margin

8.7
7.6

• of revenues

• Other costs

(26.5)
(22.4)
(2.5)
(2.4)

• Operating income

26
PROFIT LOSS ACCOUNT
millions

• Revenues

1,985
1,889

• Operating income

50
103

• Net financial expenses

(33)
(13)

• Net income from equity companies

0
2

• Exceptional expenses

(71)
(14)

• Goodwill amortization

(8)
(7)

• Tax

(6)
(10)

• Minority interests

(2)
(2)

• Net income

(70)
59
27
NET FINANCIAL EXPENSES
millions
15
-

• Convertible bond premium

(8)
(10)

• Credit cards

(18)
(21)

• Interest charges

• Differences from conversion, exchange rates and
  other elements

(2)
(2)

• Net financial expenses

(13)
(33)
4.75
5.15

• Cost of debt

• Interest Cover (EBITDA / Interest)

9.2
6.3
6,3
28
EXCEPTIONAL EXPENSES
(in millions of Euros)

(71)
(14)

• Exceptional expenses

• Of which Rebound plan

(60)

• other restructuring

(10)

• asset disposals

20

• asset depreciation

(15)

• costs from village closures (excluding  recovery
  plan )

(7)
29
PROFIT LOSS ACCOUNT
millions

• Revenues

1,985
1,889

• Operating income

50
103

• Net financial expenses

(33)
(13)

• Net income from equity companies

0
2

• Exceptional expenses

(71)
(14)

• Goodwill amortisation

(8)
(7)

• Tax

(6)
(10)

• Minority interests

(2)
(2)

• Net income

(70)
59
30
Balance sheet
31
BALANCE SHEET

31/10/01
31/10/00
31/10/01
31/10/00
In millions of Euros

• ShareholdersEquity andminority interests

• Tangible intangibleassets

754
884
1,262
1,351

• Provisions

186
117

• Financialassets

• BFR

18
13
92
86

• Net financialdebt

396
423
1,437
1,354
1,437
1,354
Gearing
53
48
32
ASSETS AND CAPITAL EXPENDITURE
In millions of Euros
31/10/01
31/10/00

• Capital expenditure
• Tangible
• Intangible
• Financial

132
254
24
29
83
35

• Total

239
318

• Disposals (expressed as sale price)

(118)
(126)
() of which Gymnase Club 42m
33
CASHFLOW STATEMENT
In millions of Euros
31/10/01
17
Cashflow
116
29
Variation in Working Capital
(102)
23
Variation in Provisions
(36)
69
(22)

• Funds from operating activities

(239)
Investments and funds acquired
(318)
118
Disposals
126
(52)
(214)

• Free Cash Flow

34
Short and medium term strengths
35
ACTION PLAN TO  REBOUND

• Problems identified appropriate measures taken

External problems
Internal problems
- Global recession - Impact of 11th September
- American management - Jet Tours - Improving
our margins
Plan announced on18th October
Specific measures
36
ACTION PLAN TO  REBOUND

• External problems 18th October plan (reminder)

- Reduced capacity Provisional or permanent
closure of 15 of winter capacity - Employee plan
and adapting structures Lowering of breakeven
point Reduction of 15 of number of employees
in headquarters - Reduced capital expenditure
2002 capital expenditure reduced to 100 million
Euros
Recurrent savings of 30 40 million Euros per
year
37
ACTION PLAN TO  REBOUND

• Internal problems specific measures

• America Targeting growth and profitability

4 Major areas of focus
Refocusing marketing policy
Reorganising the commercial platform
Structural improvements - village to
headquarters
Management and organisation restructuring
38
ACTION PLAN TO  REBOUND

• Change marketing and advertising to generate
  demand

Leverage high Club Med brand awareness
Challenge?  AIDA 
Awareness 92
Interest 37
Desire 12
Action 8
- Turn awareness into action
- Laser like focus on emerging consumer target
Active Lifestyle Americans
- New advertising platform  Wanna Play 
39
ACTION PLAN TO  REBOUND

• Internal problems specific measures to restore
  profitable growth to America

Reorganisation of commercial platform
- Implement fair value pricing policy- Proven
worldwide strategy to improve Club Meds value
equation
- Re-organize call centre and transportation-
New Scottsdale call center (99 efficiency)
- Build on Club Med on Line success- 10 of
American reservations- 25 new GMs
40
ACTION PLAN TO  REBOUND

• Internal problems specific measures to restore
  profitable growth to America

Structural improvements village to
headquarters
- Flexible village operations and costs
- Make fixed costs variable in response to
activity
- 23  reduction in winter 2002 village capacity
- Reduce headcount and overhead structures
41
ACTION PLAN TO  REBOUND

• Internal problems specific measures to restore
  profitable growth to America

Re-structure management and organization
- Establish business unit structure
- Strong seasoned management team in place
Flawless execution of Plan
42
ACTION PLAN TO  REBOUND

• Internal problems specific measures to
  accelerate the recovery of Jet tours

• Recovery well begun in 2001

Winter 01/00
Summer 01/00
Year 01/00
- 14
- 11
- 12.9
129
142
271
Number of clients
- 7
- 9
- 8
128
135
263
Revenues
- 6
18
6
12
15
27
Semi net margin
- 48
gt 100
3
- 2.7
0.3
- 2.4
Operating income
Breakeven and improved results in summer 2001
43
ACTION PLAN TO  REBOUND

• Internal problems specific measures to
  accelerate the recovery of Jet tours

• Recovery underway in 2001 advanced reservation
  system

- Level of calls received 12 in October 2000,
34 in January 2001, 80-85 since March
2001 - Time taken per reservation October 2000
lt 18mn Since March 2001 4mn
44
ACTION PLAN TO  REBOUND

• Internal problems specific measures to
  accelerate the recovery of Jet tours

• A three-stage plan

• Stage 1 Pursue turnaround of internal
  operations

• Stage 2 Redeploy the Jet tours brand

• Stage 3 Operate within a rigorous management
  framework

45
ACTION PLAN TO  REBOUND

• Internal problems specific measures to
  accelerate the recovery of Jet tours

• Stage 1 Pursue turnaround of internal
  operations

• Consolidate performance in reservations
• ? secure optimal operational performance to help
  sales
• Reinvigorate sales teams and links with
  distribution networks
• ? Jet tours, a generalist tour operator leader
  with travel agents
• Re-organize the Jet Tours team
• ? A complete management team and a more reactive
  company to confront 2002

46
ACTION PLAN TO  REBOUND

• Internal problems specific measures to
  accelerate the recovery of Jet tours

• Stage 2 Redeploy the Jet Tours brand

• Resume advertising to the general public with a
  snappy, differentiating slogan  you can miss
  everything but your holidays  
• ? Greater awareness
• Refocus product offer on key destinations for the
  French as well as on Club Med destinations
• ? A more complete but less widespread offer in
  some countries
• Clarify the presentation of the Jet Tours product
  range
• ? Rethink brochures for clearer product
  segmentation

47
ACTION PLAN TO  REBOUND

• Internal problems specific measures to
  accelerate the recovery of Jet tours

• Stage 3 Operate within a rigorous management
  framework

• Better negotiation of air and land buying
  agreements, capitalising on synergies with Club
  Med
• Better tracking of air and hotel reservation
  levels
• Reduction of operating costs and a new reduction
  in staff

Higher margins and lower breakeven point
48
ACTION PLAN TO  REBOUND

• Internal problems specific measures for Club Med
  World

1) Adaptation of Club Med World Paris

• Management reorganization
• Restructure restoration activities

2) Opening of Club Med World Montreal with a more
favorable financial model

• Lower operating (salary) costs

3) Headquarter costs

• Structural costs shared between Paris and
  Montreal
• Impact of plan announced on 18th October

49
TRENDS FOR WINTER 2002

• Booking levels expectations very difficult to
  gauge

On last 4 weeks
Cumulative
- 16
- 35

• On 18 / 10

- 19.1
- 16.3

• On 29 / 12

This figure takes into account the good level
of winter 2002 bookings before September 11th
50
TRENDS FOR WINTER 2002

• Worldwide weakly booking report as of December
  29th 2001

• September 11th deeply affected booking behaviours

51
SHORT AND MEDIUM TERM OUTLOOK

• A brand strategy

• One goal profitable growth

• A brand, not mass-market strategy
• One ambition Become a leisure group
• One route the implementation of the recovery
  plan
• improve profitable growth of core business
• - accelerate implementation of synergies with
  other activities

52
SHORT AND MEDIUM TERM OUTLOOK

• Accelerate the Transformation Plan

• improve profitable growth of core business

? Resegment product offer
Why ?
In 2001
In 2000
ROCE

lt 0
0 - 3
9
8 - 9
14 - 16
15
53
SHORT AND MEDIUM TERM OUTLOOK

• Accelerate the Transformation Plan

• improve profitable growth of core business

? Resegment product offer
How ? Restructure the 2 Trident range
- Permanent closure of 6 villages -
Transformation of 2 villages to 3 Tridents
(Nabeul and Smir)
32 reduction of 2 Trident capacity, lowered
to20 in 2001 and 15 of total capacity in 2002
54
SHORT AND MEDIUM TERM OUTLOOK

• Accelerate the Transformation Plan

• improve profitable growth of core business

? An improved organization and lower breakeven
point

• Operational decentralization by geographic region

• Simplification of headquarter and operational
  structures, including at La Villette

? A lower breakeven point 30 to 40 M recurrent
savings per year
55
SHORT AND MEDIUM TERM OUTLOOK

• Accelerate the Transformation Plan

• Implement synergies between core business and
  otheractivities

Gymnase Club will become  Club Med . 
Answer on 21st January
56
CONCLUSION

• Competitive assets in an uncertain economic
  climate

• A strong global brand
• A unique and proven concept
• An integrated, flexible and reactive model
• A sound financial position

An opportunity for Club Méditerranée to gain
market share
57
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