Kuoni Group Destinations incl GTA. Analyst & Media Event Zurich, 7 July 2011

Transcription

1 Kuoni Group Destinations incl GTA Analyst & Media Event Zurich, 7 July 2011

2 Disclaimer This communication contains statements that constitute forward-looking statements. 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. Because these forward-looking statements are subject to risks and uncertainties, actual future results 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 Travel Holding s and/or its affiliates (referred to as Kuoni ) ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behavior 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. Analyst & Media Event 7 July

3 The Kuoni Group focuses on leisure travel and destination management businesses Division Northern Region Southern Region Business model Leisure Travel Premium, specialists and mainstream segments Core competences: Organisation of leisure travel Customer advisory service (trusted advisor) Providing and selling leisure travel products and services via various distribution channels Procurement and production No 1 in India in all aspects of travel Footprint in China: Hong Kong VFS Global (business process outsourcing) Destinations Destination Management FIT / online FIT Groups MICE Others: Sports events, cruises etc. Analyst & Media Event 7 July

4 The GTA acquisition has a major strategic impact on the Kuoni Group Kuoni Group becomes one of the global leaders in destination-based travel Broadest and most competitive range of destination services Attractive mix of complementary and synergetic destination businesses (FIT Specialists, Online FIT, Leisure Groups, MICE) Global footprint with critical mass in most destinations One of the largest land contracting organizations with strong relationships with suppliers Center of gravity of Kuoni Group organization moves significantly by increasing......exposure high-growth markets in Asia...presence in high-growth online land segments...share of destination-based business...share of low-touch, cost-efficient business models Kuoni Group strengthens its position as global, asset-light, flexible and high-growth travel company FIT = Foreign Independet Travelers MICE = Meetings, Incentives, Congresses and Events Analyst & Media Event 7 July

5 With the GTA integration, the Kuoni group will shift its centre of gravity TURNOVER KUONI GROUP (% OF TOTAL) 2010 reported 2010 pro forma 25% Destination Management ~ 50% Destination Management 75% Leisure Travel ~ 50% Leisure Travel Analyst & Media Event 7 July

6 Top three group priorities in the next 12 months 1. Keep growth momentum and successfully integrate GTA 2. Complete investment and cost-reduction program 3. Pursue further growth opportunities (e.g. Asia) Analyst & Media Event 7 July

7 KDM and GTA Rolf Schafroth, CEO Division Destinations (KDM & GTA) 7 July 2011

8 Overview of GTA and KDM Strategy of Division Destinations Analyst & Media Event 7 July

9 Brief overview on KDM KDM offers its services and products globally, having local specialist companies on almost every continent Leisure & special interest group tours FIT (independent travellers) Kuoni Connect (Online FIT) MICE (Meetings, Incentives, Congresses, Events) Others: Sports events, cruises (turnarounds, port of call, pre & post programs, shore excursions) Leisure Groups FIT Online FIT MICE KDM is market leader in India & USA and among the leading DMCs in Asia, Arabia, East/South Africa & Europe KDM was awarded World s Leading Destination Management Company by the World Travel Awards in 2010 Analyst & Media Event 7 July

10 Presence around the world Analyst & Media Event 7 July

11 GTA and KDM with excellent strategic fit, creating a stronger player in the market Turnover/TTV 2010 in CHF bn* Online FIT Specialist DMC Groups MICE Geographic coverage * Fx rate 1 USD = 0.9 CHF Analyst & Media Event 7 July

12 Division Destinations: aggregating a fragmented supply base and providing wide range of services to multiple distribution channels Strong buying power => wide range of contracted hotels and other destination services Travel Agents Customers Marginal commitments Mark-up based business model Tours Division Destinations B2B Tour Operators Traveler Strong relationship presence in multiple distribution channel Other Destination Services OTA (1) Customers Traveler Note: (1) OTA = Online Travel Agent. Analyst & Media Event 7 July

13 High level distribution model for both Online FIT & Groups business Division Business relationship Traveller type Customer & channel type Distribution brand Retail Online FIT ( and DS (1) ) Travel agents, OTAs Affiliates / Partners GTA: North America GTA: Europe / Latin America Core B2B Wholesale Destinations Groups (incl. MICE) Relates to group travel including escorted and unescorted Wholesaler / tour operator Event Organiser, Corporates Octopus B2C Direct to end user Analyst & Media Event 7 July

14 Brands of Division Destinations SBD Destinations BU/Company Leisure Online FIT MICE Kuoni & GTA branded units Destination specialist brands Analyst & Media Event 7 July

15 Integration and way forward Analyst & Media Event 7 July

16 Integration will take place in two phases: planning and execution Q Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Preparation Planning First 120 days: Develop integration plan Execution Upcoming months/years (step by step): Implement integration plan Day 1 Day 120 Day 1 readiness Integration plan Offering optimization Supplier optimization Efficiency increase IT consolidation Know-how leverage... Analyst & Media Event 7 July

17 Principles and approach of Integration Programme Integration principles Ensuring achievement of 2011 business objectives and maintain growth momentum Capturing quick-wins and address urgent coordination needs Learning from each other, and choosing best practice approaches Capturing efficiency improvements Communicating openly Approach Project set-up in work streams with clearly defined scope, timelines and deliverables Business work streams Online FIT (Sales & Operations) Group Sales Inbound Operation Groups Contracting / Suppliers B2C Distribution Support function work streams Finance HR & Communication IT & Processes Integration Management Deliverables Design of future organization supporting the growth targets of the various businesses Implementation plan and priorities Analyst & Media Event 7 July

18 GTA opens up new strategic opportunities for Kuoni Group OVERVIEW OF GTA TRANSACTION VALUE DRIVERS Value Focus of Integration Programme Grow and synergize 1. Maintain growth momentum 2. Capture direct synergies 3. Realize opportunities for operational improvement 4. Exploit complementary capabilities, market positions and relationships 5. Leverage investments (e.g. IT) 6. Provide highly competitive land inventory and long-tail to other Kuoni businesses Extend reach and scope 1. Grow destination footprint (e.g. beach destinations) 2. Expand destination services (e.g. excursions, roundtrips) 3. Drive process innovation (e.g. online leisure Groups) 4. Capture synergies with other businesses (e.g. FIT specialists, MICE) Create further strategic options 1. Explore extensive partnerships with key suppliers and customers 2. Expand into new business segments/channels 3. Exploit technological opportunities (with scale in IT ) Strategic development Analyst & Media Event 7 July

19 Substantial Expected Synergies Annual cost and revenue synergies of approximately CHF 25 million anticipated from 2014 Anticipated Synergies Operations Improvement Cost (~70%) IT Reduction of IT systems Management & Support Funct.ions Purchasing Efficiency gains from GTA s operations improvement program and sharing of best practices Efficiency gains in Sales, Inbound operations and Contracting Overlaps and back-office synergies GOP (1) margin improvement as a result of combining purchasing volume Financial impact Anticipated run-rate synergies of c. CHF 25 million by : CHF 5 million (20%) 2013: CHF 20 million (80%) 2014: CHF 25 million (100%) Revenue (~30%) Yield Management Turnover Loss Leverage GTA s yield management capabilities to improve margin on Kuoni Connect inventory Minor near-term sales losses in Asia for clients with destination overlap Expected non-recurring costs (2) Notes: Restructuring, IT migration and post-merger management costs (1) GOP = Gross Operating Profit. (2) Excluding transaction and financing costs. Financial impact Expected non-recurring costs of CHF 20 million (2) 2011: CHF 10 million (50%) 2012: CHF 5 million (25%) 2013: CHF 5 million (25%) Analyst & Media Event 7 July

20 Thank you for your attention!