Page 1 of 2

The High Earners in the North

Scandinavia, Russia and the Playitas Resort – Market Region North Division

Kuoni Scandinavia, Megapolus Tours (Russia) and the sports and family resort “Playitas” (Spain) generated overall turnover of CHF 1 045 million in 2010 (compared with CHF 1 012 million in 2009), a year-onyear increase of 3.2 %. Operating earnings (EBIT) rose steeply to CHF 43.9 million (2009: CHF 5.3 million). Underlying EBIT amounted to CHF 50.0 million.

The increase in earnings generated via higher margins, lower costs and currency gains. The Scandinavia unit was, as a result, one of Kuoni Group’s most important sources of earnings during the year. The unit also benefited from the new Group structure with its global Procurement and Production unit.

Kuoni Scandinavia’s three main markets (Sweden, Norway, Denmark) generated turnover of CHF 966 million in 2010 (2009: CHF 945 million). Operating earnings (EBIT) more than doubled, rising to CHF 58.4 million (2009: CHF 25.0 million).

Direct distribution (primarily Internet sales) under the Apollo brand increased again in 2010, rising to 49 % of the total (2009: 43 %). The Scandinavian countries became the first Kuoni markets to introduce applications for smart phones.

Apollo’s iPhone apps had been downloaded 35 000 times by the end of the year. Social networks (Facebook, Twitter) were also harnessed for the first time in 2010 as additional communication and sales channels. In Sweden, for example, Apollo’s Facebook site attracted most members of all major tour operators. Novair, the airline run by Kuoni’s Scandinavian unit, has refurbished the business class section on its long-haul aircraft. Its business class offering is now one of the best on the market.

On 1 September of the year, the Scandinavia unit acquired the Danish golf specialist Krone Golf Tours, offering tailor-made golf trips from Denmark, mainly to Spain, Portugal, Tunisia and Turkey. Krone Golf Tours was incorporated into Kuoni’s Swedish golfing specialist Golf Plaisir, which was acquired in 2008, in order to exploit synergies.

Sweden: strong earnings


In 2010 the Swedish market increased turnover above average (+ 6.7 %). Improved passenger load factors on aircraft and higher turnover, especially for Turkish and Egyptian destinations, contributed to the results. On the other hand the flight cancellations necessitated by the volcanic ash cloud, as well as the royal wedding in Sweden, the warm summer weather and the football World Cup all had a negative effect on the take-up of holidays.

At the same time, efficiency gains based on the reorganisation of the Kuoni Group led to lower headcount and to lower costs. Currency gains helped to ensure that operating earnings (EBIT) were higher in 2010 than in the previous year.

The Apollo brand has successfully established itself as top 3 provider in the Swedish travel market. In 2010 the most popular short-haul destinations for Swedes included the Greek islands (especially Crete and Rhodes), Southern Turkey, Egypt and the Canary Isles. The most-visited long-haul holiday destination was Thailand. “All-inclusive” products were also particularly in demand.

Norway: further growth


Alongside the Swedish market, Norway contributed substantially to the Scandinavia unit’s operating earnings (EBIT) in 2010. Turnover increased at a healthy rate (+ 5.6 %). Poor weather in Norway during the summer and strong demand for flights from the country’s smaller airports contributed to this improvement, while competition from low cost carriers flying out of Oslo intensified.

Apollo Norway reduced its costs significantly as a result of additional synergies delivered by the reorganisation of the Kuoni Group.