2008 Nine-Month Report - Kuoni Group

kuoni travel holding ltd.
2008 Nine-Month Report

02 kuoni group 2008 nine-month report
www.kuoni-group.com
Kuoni reports further turnover and earnings growth
The Kuoni Group raised its third-quarter turnover by 4.0% to
CHF 1 547 million in 2008. Earnings before interest and taxes
(EBIT) for the period were increased by 8.2%, to CHF 105.8
million. As a result, the CHF 3 775 million turnover generated
for the first nine months of 2008 was an improvement of 7.4%
on the prior-year period. Nine-month EBIT was increased by
an even higher 15.7% to CHF 119.7 million. Strategic Business
Units (SBUs) Scandinavia, Switzerland and Asia & Destination
income statement 1.1.–30.9.2008 1.1.–30.9.2007 change in %
(chF million)
turnover 3 775.0 3 514.8 +7.4
gross profit 800.0 756.6 +5.7
gross profit margin (%) 21.2 21.5
earnings before interest and taxes (eBit) 119.7 103.5 +15.7
eBit margin (%) 3.2 2.9
net result 120.6 99.2 +21.6
cash flow 172.9 242.5 –28.7
results highlights for the first nine months of 2008
► Group turnover totalled CHF 3 775 million, a 7.4% improvement
on the CHF 3 515 million of the prior-year period.
Organic growth accounted for 7.2 percentage points of the
increase and acquisitions for 5.9 percentage points, while
currency movements (particularly in the UK) reduced the
increase by a substantial 5.7 percentage points.
► Earnings before interest and taxes (EBIT) saw a sizeable
increase to CHF 119.7 million, 15.7% up on the CHF 103.5
million of 2007.
► Third-quarter turnover increased to CHF 1 547 million,
while EBIT was improved to CHF 105.8 million.
Management were the prime contributors to the encouraging
turnover and earnings rises of the first nine months. At SBU
United Kingdom, by contrast, the already-advanced economic
crisis and the resulting consumer restraint continued to
depress demand. Kuoni further pursued its growth strategy,
acquiring Australian Tours Management and UK-based luxury
tour operator Carrier in the third-quarter period.
► Kuoni’s growth strategy was further pursued with the
acquisitions of Carrier (of the UK) and Australian Tours
Management. The acquisitions will be included in the scope
of consolidation from 1 October and 1 November 2008
respectively.
► Kuoni‘s repositioning as a global travel brand with innovative
product lines, a contemporary-stlye logo and new-look
brochures was successfully launched worldwide with the
Global Launch Event in London in September 2008.

Results of the Kuoni Group
Group TURNOVER for the first nine months of 2008 rose
to CHF 3 775 million, compared to CHF 3 515 million for
the prior-year period. The positive turnover result was
buoyed by above-average organic growth of 7.2%. Acquisitions
added 5.9% to turnover for the period, while the net
impact of currency movements eroded 5.7% from the result.
GROSS PROFIT was increased to CHF 800 million, up 5.7%
on the first nine months of 2007. Gross profit margin
showed a slight decline to 21.2%.
EARNINGS BEFORE INTEREST AND TAXES (EBIT) were
encouragingly improved compared to their prior-year
equivalent, rising from CHF 103.5 million to CHF 119.7
million. The 15.7% increase is attributable largely to
results at SBUs Asia & Destination Management and Scandinavia,
though a sizeable EBIT increase at SBU Switzerland
also made a major contribution. Depreciation no longer
required on Edelweiss Air also added CHF 8.6 million
to the EBIT result. EBIT margin rose encouragingly from
2.9% to 3.2%.
The NET RESULT of CHF 120.6 million for the first nine
months of 2008 was a substantial 21.6% improvement on
the CHF 99.2 million of the prior-year period.
CASH FLOW from operating activities for the first nine
months declined 28.7% to CHF 173 million (prior-year
period: CHF 243 million). The improvement in operational
cash flow amounted to CHF 17 million, this was more than
offset by an increase in accounts receivable (CHF 29 milli-
kuoni group 2008 nine-month report
on, attributable largely to above-average growth in
destina tion management business), a decline in customer
pre payments (CHF 31 million; UK and Scandinavia) and
a decline in other net working capital (CHF 27 million).
While customer prepayments at the end of September
were above their prior-year level in Scandinavia in localcurrency
terms, the decline in the UK reflects the currently-difficult
market environment. Free cash flow stood
at CHF 134 million (prior-year period: CHF 218 million).
The BALANCE SHEET showed equity of CHF 647 million
on 30 September 2008 (compared to CHF 601 million a
year ago) and an equity ratio of 30.2% (which compares to
28.9% on 30 September 2007).
2008 third-quarter performance
The Kuoni Group generated turnover of CHF 1 547 million
for the third quarter of 2008, a 4.0% increase on the CHF
1 488 million of July-to-September 2007. Of this 4.0% increase,
4.1 percentage points were achieved through organic
growth and 5.6 percentage points through acquisitions,
while the net negative impact of currency movements reduced
such growth by 5.7 percentage points.
Gross profit for the quarter showed a slight increase, from
the CHF 330 million of the prior year to CHF 332 million,
while gross profit margin amounted to 21.5%. Third-quarter
earnings before interest and taxes (EBIT) amounted to CHF
105.8 million (compared to CHF 97.8 million for the prioryear
period), while the net result was increased from CHF
95.7 million to CHF 99.3 million.
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04 kuoni group 2008 nine-month report
www.kuoni-group.com
Third-Quarter 2008 Results by Strategic Business Unit
switzerland
europe
The turnaround achieved at SBU Switzerland in the first half SBU Europe sustained a decline in its third-quarter turn-
of 2008 was further confirmed by the unit’s third-quarter over, from the CHF 262 million of the prior-year period to
results: the CHF 349 million turnover was a 9.4% improve- CHF 233 million. EBIT for the period totalled CHF 16.4 milment
on the CHF 319 million of the same quarter last year. lion (compared to CHF 18.4 million a year ago). The declines
The successful repositioning of the Helvetic Tours inclusive- are due primarily to the relative weakness of the euro and
tour brand and the acquisition of Direkt Reisen both made
substantial contributions to the higher turnover volume.
to the sale of the unit’s Austrian retail operations.
EBIT was also tangibly improved, from CHF 22.0 million to united kingdom
CHF 31.5 million. The EBIT result includes the positive effect While third-quarter turnover at SBU United Kingdom de-
of CHF 2.9 million of depreciation no longer required on clined from CHF 213 million to CHF 167 million, the unit’s
Edelweiss Air following its sale to Swiss.
EBIT for the period was improved from CHF 8.2 million to
CHF 9.2 million. A severe weakening of the British pound
scandinavia
substantially eroded the earnings result, however; and the
SBU Scandinavia (including New Ventures) achieved a economic downturn and its impact on consumer mood
further sizeable turnover increase for the third quarter of prompted a continued decline in demand that was exacerba-
2008: the CHF 420 million turnover for the period was 24.3% ted by the global financial crisis, which has hit the UK parti-
up on the CHF 338 million of July-to-September 2007. EBIT
for the period declined, however, from the CHF 38.3 million
cularly hard.
of the previous year to CHF 31.6 million. Individually, asia & destination management
Scandinavian operations (excluding New Ventures) genera- SBU Asia & Destination Management further improved its
ted third-quarter turnover of CHF 382 million, a 13.0% im- turnover result in the third quarter of 2008, from the CHF
provement that stems largely from above-average turnover 381 million of the prior-year period to CHF 398 million.
growth in Norway and Denmark. EBIT amounted to CHF EBIT was raised from CHF 22.5 million to CHF 24.9 million.
38.8 million, a 6.1% decline which was due largely to the fact The turnover increase is due to the acquisition of Dubai-
that the comparable results for summer 2007 had been subsbased Desert Adventures Tourism and to the growth in destitantially
boosted by an exceptionally rainy Scandinavian nation management business in Europe and the USA. The
summer that had encouraged outbound travel.
Indian tour operating business and the services provided by
VFS Global (Visa Facilitation Services) also made further
On the New Ventures front, the Shoestring International
operation is to be closed down at the end of 2008 after failing
to achieve sufficient market penetration. The Russian market
also remains very difficult and fiercely contested, putting
pressure on the corresponding margins. Action has already
been initiated to improve results here.
gains, despite sizeable adverse currency movements.

Outlook for 2008 as a whole
BOOKING LEVELS as of 2 November 2008 for the Kuoni
Group’s tour operating business were 3% higher in Swiss-franc
terms than their prior-year equivalents. Organic growth stood
at 3%. Year-on-year booking trends for key business units:
Switzerland +6%
Scandinavia +15%
France +3% (in local EUR terms +6%)
United Kingdom –16% (in local GBP terms –1%)
India –1% (in local INR terms +15%)
zurich, 11 november 2008
Key Dates in 2009
The Kuoni Group will be reporting on its further business performance
on the following dates:
2008 Annual Results 19 March 2009
2009 Annual General Meeting of Shareholders 21 April 2009
kuoni group 2008 nine-month report
In view of the global financial crisis and the associated fears of
recession, a slow down in growth can be expected in the
fourth-quarter period.
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06 kuoni group 2008 nine-month report
www.kuoni-group.com
Income Statement (condensed)
chF million 1.1.– 1.1.– CHAnGE 3 rd QUARTER 3 rd QUaRteR change
30.9.2008 30.9.2007 in % 2008 2007 in %
turnover 3 775.0 3 514.8 +7.4 1 546.7 1 487.6 +4.0
Direct costs –2 975.0 –2 758.2 –7.9 –1 214.6 –1 157.6 –4.9
gross profit 800.0 756.6 +5.7 332.1 330.0 +0.6
Personnel expense –373.2 –347.8 –7.3 –124.7 –121.8 –2.4
marketing and advertising expense –102.2 –98.9 –3.3 –33.6 –34.4 +2.3
other operating expense –170.7 –164.6 –3.7 –55.4 –60.9 +9.0
Depreciation –34.2 –41.8 +18.2 –12.6 –15.1 +16.6
earnings before interest
and taxes (eBit) 119.7 103.5 +15.7 105.8 97.8 +8.2
Financial result 20.1 12.2 +64.8 3.6 4.7 –23.4
earnings before taxes 139.8 115.7 +20.9 109.4 102.5 +6.7
income taxes –19.2 –16.5 –16.4 –10.1 –6.8 –48.5
net result
of which:
120.6 99.2 +21.6 99.3 95.7 +3.8
minority interests
net result attributable to share-
–2.0 0.5 –0.8 0.4
holders of Kuoni travel holding ltd. 122.6 98.7 100.1 95.3
Basic earnings per registered
share B in chF
Diluted earnings per registered
42.87 33.67
share B in chF 42.87 33.67

Turnover by Strategic Business Unit
kuoni group 2008 nine-month report
chF million 1.1.– 1.1.– CHAnGE 3 rd QUARTER 3 rd QUaRteR change
30.9.2008 30.9.2007 in % 2008 2007 in %
switzerland 775 737 +5.2 349 319 +9.4
scandinavia 944 743 +27.1 420 338 +24.3
europe 544 564 –3.5 233 262 –11.1
United Kingdom 500 573 –12.7 167 213 –22.6
asia & Destination management 1 070 959 +11.6 398 381 +4.5
corporate 10 10 0 4 4 0
less intersegment revenue –68 –71 n.a. –24 –29 n.a.
total 3 775 3 515 +7.4 1 547 1 488 +4.0
EBIT by Strategic Business Unit
chF million 1.1.– 1.1.– CHAnGE 3 rd QUARTER 3 rd QUaRteR change
30.9.2008 30.9.2007 in % 2008 2007 in %
switzerland 24.5 8.6 +184.9 31.5 22.0 +43.2
scandinavia 34.6 41.2 –16.0 31.6 38.3 –17.8
europe 15.3 16.2 –5.6 16.4 18.4 –10.9
United Kingdom 26.6 31.1 –14.5 9.2 8.2 +12.2
asia & Desitnation management 44.7 32.3 +38.4 24.9 22.5 +10.7
corporate –26.0 –25.9 –0.4 –7.7 –11.6 +33.6
total 119.7 103.5 +15.7 105.8 97.8 +8.2
07

disclaimer
If we formulate forecasts or expectations in this announcement or if our statements
relate to the future, these statements may be associated with known and
unknown risks and uncertainties. Actual outcomes and developments may, therefore,
deviate significantly from the expectations and assumptions expressed. The
performance of financial markets and exchange rates as well as national and international
law amendments, particularly with regard to tax regulations, may also
have an influence. Except as required by law, the company assumes no obligation
to update forward-looking statements.
further information
for media representatives
Peter Brun
Head of Corporate Communications
Kuoni Travel Holding Ltd.
Neue Hard 7
CH-8010 Zurich
P +41 (0)44 277 48 28
M +41 (0)76 370 24 24
peter.brun@kuoni.com
for analysts and investors
Laurence Bienz
Head of Investor Relations
Kuoni Travel Holding Ltd.
Neue Hard 7
CH-8010 Zurich
P +41 (0)44 277 45 29
laurence.bienz@kuoni.com