The Board of Directors of the Kuoni Group has decided that in the light of the evolution of the Kuoni Group’s portfolio, various smaller loss-making tour operating businesses are no longer of strategic relevance to the group. Kuoni no longer wants to run these activities and will explore exit options depending on circumstances for each of the various businesses, which may include complete or partial sale, management buy-out, or even termination of activities if no sustainable solutions can be found. Businesses affected are Kuoni’s tour operating activities in Italy, Spain, the Netherlands, Belgium and Russia, as well as the B2C online hotel platform Octopustravel. Kuoni will commence consultations with employee representatives in accordance with local statutory requirements.
It is not yet possible to accurately quantify the financial consequences of these changes. Based on today’s knowledge the reduction of the portfolio could entail direct cash-relevant costs amounting to CHF 35 million. In addition, non-cash-relevant costs and impairments will impact the result. The operating result (EBIT) respectively net result is expected to be reduced by approximately CHF 80 million, which is likely to happen in the current financial year. The earnings forecast issued on 23 August 2012 has to be adjusted accordingly. The measures being taken should eliminate annual operating losses (EBIT) of around CHF 17 million in the future.
The portfolio reduction affects European tour operating activities that have been loss-making for several years. The activities mentioned above generate total annual turnover of approximately CHF 300 million, and employ around 500 people. Kuoni will, in accordance with the statutory provisions in each national market, start consultations with employee representatives. Based on the outcome of these consultations, the concrete measures to be taken in each market will be decided upon and communicated at a later date. It is possible, in the event of a sale or management buy-out, that business activities may be continued outside the Kuoni Group, thus preserving the associated jobs.
Further information about the latest status of the portfolio reduction will be communicated together with the Business Update on Q3 2012 on 8 November 2012.
Kuoni Group’s Board of Directors intends to base its dividend proposal to the next Annual General Meeting of Shareholders in April 2013 on the consolidated net result for 2012 excluding the one-off costs mentioned above. The final dividend proposal will be communicated on 21 March 2013.
