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FINANCIAL REPORT

02_

01 [ 11.000 ]

02 [ 41.000.000 ]

03 [ 4.038.286 ]

04 [ 66 ]

05 [ 632 ]

6 [ 250.000 ]

08 [ 47.2 ]

07 [ 400 ]

09 [ 1972 ]
10 [ 1 ]
11 [ 23.501 ]
12 [ 100.000.000 ]

15 [ 3 ]

16 [ 106 ]

17 [ 58 ]

18 [ 12 ]
20 [ 8.636.034 ]

13 [ 14 ]

14 [ 38.400 ]

19 [ 90 ]

21 [ 24 ]

22 [ 350485 ]

23 [ 7 ]

28 [ 9 ]

29 [ 1.546 ]
31 [ 952.000 ]
34 [ 100 ]
37 [ 2.856.000 ]

24 [ 3.400.000 ]

25 [100 ]

26 [ 87 ]

35 [ 63 ]

27 [ 16.300 ]
30 [ 240.261 ]
32 [ 20 ]

33 [ 7.000 ]
36 [ 11 ]
38 [ 163 ]

39 [ 21 ]

40 [ 34.000 ]

41 [ 526 ]

42 [ 2.404 ]

44 [ 44 ]
46 [ -14.9 ]

45 [ 1963 ]

47 [ 7.000 ]

48 [ 660.000 ]
49 [ 40.000.000 ]

50 [ 3.000.000 ]

02 FINANCIAL REPORT

43 [ 90.000 ]

KUONI GROUP

50 facts and figures for the Kuoni Group in 2011

02 FINANCIAL REPORT

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[ Average number of employees in 2011 ]


[ Visa applications by VFS Global in 10 years ]
[ Customers worldwide ]
[ Kuoni hotels in the Maldives ]
[ Pages in annual report ]
[ Images in global picture archive ]
[ Daily number of Japanese visiting Paris with Kuoni ]
[ Average age of group management ]
[ Year of stock exchange listing ]
[ Group CEO ]
[ Pages in Swiss catalogues ]
[ Rail kilometres travelled by CH rail specialists in 2011 ]
[ Flagship Stores ]
[ Annual number of employee meals at Kuoni headquarters ]
[ Company-owned aircraft / Novair ]
[ Years in the travel business ]
[ Background stories on the groups intranet page in 2011 ]
[ Opening of remodelled Kuoni travel stores in Switzerland ]
[ Kuoni hotels with Travelife Award ]
[ Visa applications by VFS Global in 2011 ]
[ Kuoni Academy training centres in India ]
[ Security number of Kuoni registered shares B ]
[ Members of the Board of Directors ]
[ Google search results ]
[ % of CO2-compensated business trips by employees ]
[ Destinations ]
[ Tonnes of waste recycled by Kuoni/myclimate in Bali ]
[ Pages in the Kuoni Code of Conduct ]
[ Children supported by Kuoni projects ]
[ Kuoni Facebook Likes ]
[ Number of registered shares A ]
[ Kuoni No. 1 Travel Bags ]
[ Dinners in Burj al Arab organised by Kuoni in 2011 ]
[ Kuoni travel stores in Switzerland ]
[ Countries where the Kuoni Group is active ]
[ Times in a row Worlds Leading Tour Operator ]
[ Number of registered shares B ]
[ Number of Kuoni travel stores worldwide ]
[ Volunteering offers by Kuoni Switzerland ]
[ GTS clients: travel agencies, tour organisers, online portals ]
[ VFS Global Visa Centres worldwide ]
[ Employees of VFS Global ]
[ Hotels available on Octopus.com ]
[ % of women in middle and senior management ]
[ Kuoni opens its first branch in Japan ]
[ % of US dollars drop against the CHF in 2011 ]
[ Overnight stays in Italy with GTS per day ]
[ GTS division bookings in 2011 ]
[ Daily queries in GTS databases ]
[ Annual overnight stays of GTS groups in Europe ]

KUONI ANNUAL REPORT # 2011

Kuoni GRoup

02_

Financial Report 132

02_00_01_

Kuoni Principles (2) 133

02_00_02_

The topic of Continuity 134

02_01_

Comment Financial Report (Group) 136

02_02_

Five-Year Summary of Key Data

02_03_

Pro Forma Figures 162

02_04_

Kuoni Group 166

02_04_01_

Statement of Financial Position

02_04_02_

Income Statement 168

02_04_03_

Statement of Comprehensive Income 169

02_04_04_

Statement of Changes in Equity

158

167
02_06_

Corporate Governance 258

170

02_06_00_

Introduction 259

02_04_05_

Statement of Cash Flows 171

02_06_01_

Group Structure and Shareholders

02_04_06_

Accounting Principles 172

02_06_02_

Capital Structure 261

02_04_07_

Notes to the Consolidated

02_06_03_

Board of Directors 268

Financial Statements 179

02_06_04_

The Group Executive Board

280

02_04_08_

Principal Subsidiaries and Associates 230

02_06_05_

Compensation, Shares and Loans

281

02_04_09_

Report of the Statutory Auditor

02_06_06_

Shareholders Participation Rights

282

02_06_07_

Changes of Control and

234

260

02_05_

Kuoni Travel Holding Ltd.

238
02_06_08_

Auditors 286

02_05_01_

Statement of Financial Position

239

02_06_09_

Information Policy 287

02_05_02_

Income Statement 240

02_06_10_

Compensation Report 292

02_07_

Appendix 312

02_07_01_

Agenda 2012 313

02_05_03_

Notes 241

02_05_04_

Board of Directors Proposal for the

Defence Measures 285

Appropriation of Retained Earnings 253


02_05_05_

130 | 131

Report of the Statutory Auditor

254

Kuoni Annual Report # 2011

02_00_01_

Financial Report

K u o n i G R OUP

Kuoni Principles (2)

Business comes and goes.


+
Unlike a company rooted in tradition,
but existing in time.
=
Its name stands for
only one thing: continuity.1

1
Kuoni has been helping to shape
the travel industry since 1906 and
it has always focused on meeting customers needs, expanding its services
and staying ahead of the times. A pronounced commitment to service is
a firmly established part of the com
panys tradition.
The prerequisites for the company and
the environment in which it operates
may change, but Kuonis reliability as
a tour operator makes it a safe bet, offering its customers certainty, transparency and honesty. This continuity
is still one of Kuonis distinguishing
factors, forming a solid foundation for
the future of travel.

02 Financial Report

132 | 133

Kuoni Annual Report # 2011

02_00_02_

Financial Report

K u o n i G R OUP

Kuoni is here for the long term.

Travel (ling)
Conti nuity.

Committed to continuity.

Over the course of more than a hundred years Kuoni has coped with numerous negative influences and responded early to trends as they have
emerged. To master crises and keep
moving forward, it is vital to take a
flexible approach to changing market
situations and requirements, and to
invest in areas with potential for the
future. Kuoni does this, guided by constant, timeless values such as reliabi
lity, passion and authenticity.
2011 was another year characterised
by negative external influences. There
was political turmoil in Arabic countries, a serious earthquake followed
by a tsunami and a nuclear disaster in
Japan, floods in parts of Thailand and
a debt crisis in Europe. Tourism has
always been dependent on external factors that vary from year to year. Whether its political turbulence, environmental disaster or economic change,
Kuoni keeps to its principles, reacts responsibly to the challenges that come,
invests, acts anticyclically when it has
to, and always does its best to produce
sustainable, profitable results.

02 Financial Report

134 | 135

Kuoni Annual Report # 2011

02_01_

Financial Report

SUBSTANTIAL INCREASE IN TURNOVER AND EARNINGS

business year 2011

K u o n i G R OUP

investors and consumers. Against this background, the emerging markets


continued to be the driving force of global economic growth. The uncertain-

The Kuoni Group delivered an encouraging business performance for 2011

ties over the ramifications of the government debt crisis in Europe

in a very challenging market environment. Thanks to increased turnover

had a number of negative effects, including increased volatility in the

and despite the one-off costs associated with the acquisition and integration

exchange rates of various currencies against the Swiss franc, which

of Gullivers Travel Associates (GTA), the net result for the year was a

reached new highs in euro and US dollar terms until the Swiss National

clear improvement on 2010. With the depressed general economic climate

Bank intervened on 6 September.

and the political upheavals in the Arab world, the market environment
proved far from easy in 2011, especially for European tour operating

GLOBAL TOURIST SECTOR DEFIES MUTED ECONOMIC GROWTH

activities. Nevertheless, the Kuoni Group posted turnover for the year of

The United Nations World Tourism Organization (UNWTO) has projected


the following regional growth rates for
international arrivals in 2011 (source:
UNWTO, January 2012):

CHF 5111 million, a 28% nominal increase on 2010. The effect of a

Despite a worldwide economic situation that was far from bright and

strongly appreciating Swiss franc eroded 8.3% of the Group turnover.

despite further unforeseen unfavourable events, the global tourism sector

Acquisitions raised Group turnover by 35%. Organic turnover

showed largely positive trends. The United Nations World Tourism

growth amounted to 1.2%, and was driven by the continued sizeable

Organization (UNWTO) expects international arrivals for 2011 to show

expansion of business within Division Destinations and in the

a 4.4% growth (source: UNWTO, January 2012), continuing the gene-

Groups Asian and VFS Global activities. Earnings before interest and

ral recovery of the tourist sector that was first felt the previous year. The

Asia-Pacific: 5.6%

taxes (EBIT) amounted to CHF 74.2 million, a 27% improvement on

tsunami and subsequent nuclear crisis in Japan as well as the political

Americas: 4.2%

Europe: 6.0%

the CHF 58.4 million of the previous year. EBIT net of the costs of the

upheavals in North Africa and the Arabian Peninsula all had a tangible

investment and cost-reduction programme, ordinary amortisation of

effect on the tourism sector. Higher costs, meanwhile especially through

acquisition-related intangible assets and the one-off costs associated with

rising oil prices weighed heavily on the already narrow margins of

The Middle East: 8.0%

the acquisition and integration of GTA, stood at CHF 168.9 million

the fiercely competitive leisure travel segment. The political developments

Worldwide: 4.4%

(compared to CHF 127.1 million in 2010). The net Group result for the year

in North Africa also help explain the regional shifts in recent market

amounted to CHF 33.3 million (compared to CHF 23.2 million for 2010).

growth, which has seen a narrowing in rates between mature and emer-

Africa: 0.0%

ging markets after the latter had served as the prime mover in global
The International Monetary Fund
(IMF) has projected global economic
growth of 3.8% for 2011 (source: IMF
World Economic Outlook Update, January 2012), 1.4 percentage points less
than the previous year. Once again,
the emerging nations were the prime
growth drivers (China 9.2%, India
7.4%, Russia 4.1%, Brazil 2.9%), though
even these countries faced a less positive economic climate than they had
enjoyed in 2010. Growth in the deve
loped markets (Switzerland 1.9%, USA
1.8%, euro zone 1.6%, UK 0.9%) was
clearly compromised by the current
debt crisis.

RISING UNCERTAINTIES ON THE FINANCIAL MARKETS SLOWING

GLOBAL ECONOMIC GROWTH

tourism development over the past few years. With the exception of the
Middle East and North Africa, all the worlds regions reported positive
tourism growth. Arrivals in Europe saw an above-average increase, as

Global economic development slowed substantially in the course of 2011.

Southern Europe attracted more tourists seeking alternative destinations

The loss of momentum can be attributed to a number of negative influen

in the light of the unrest in North Africa and the Arabian Peninsula.

ces in the first half-year, such as the civil unrest in North Africa and

Asia, too, posted a positive overall trend, despite the Japanese disaster.

the Arabian Peninsula, the devastating earthquake and tsunami in Japan


(and the ensuing critical situation at the Fukushima nuclear power
plant) and the uncertainties on the financial markets deriving from
Europes debt crisis. Fears of a possible return to recession in the worlds
developed markets prompted a sizeable loss of confidence among
02 Financial Report

136 | 137

Kuoni Annual Report # 2011

02_01_

K u o n i G R OUP

>>

Comment Financial Report (Group)

THE KUONI GROUP: TURNOVER GROWTH IN ASIA

AND AT DIVISION DESTINATIONS

>>

Comment Financial Report (Group)

worlds financial markets. The Swiss franc, a traditional safe haven currency, gained in value against all of Kuonis main foreign currencies
in cost and revenue terms, reducing consolidated turnover for the period.

The Kuoni Group increased its turnover substantially in 2011 com-

The impact of currency movements eroded some CHF 329 million or

pared to prior-year levels. Business showed broadly positive development,

8.3% of the turnover for the year.

though substantial differences were seen in the performances of the


Groups various regions and activities. Division Destinations reported

particularly positive trends and a further increase in turnover from

28% improvement on the prior-year period. Organic growth (i.e. excluding

Consolidated turnover for 2011 totalled CHF 5111 million, a

its existing Kuoni Destination Management activities. The new businesses

currency effects and the impact of acquisitions) amounted to 1.2%.

acquired, Gullivers Travel Associates (GTA), also added substantially


to the divisions turnover volume. Strong increases were witnessed, too, in
the Groups Asian leisure travel business. And VFS Global, the Group
subsidiary that specialises in providing administrative consular services,

Group turnover of
CHF 5111 million by activity

saw another significant expansion of its business activities. On a less

46%
Destination
Management
Services

positive note, the repercussions of the Arab Spring, declines in both


consumer confidence and disposable incomes, high currency fluctuations
as well as the uncertain economic outlook all combined to depress the
European leisure travel business.

54%
Tour Operating
Business

Turnover development in 2011 was influenced exceptionally strongly

Lime Travel AB (acquired effective 1


March 2011) is one of Swedens leading providers of luxury travel arrangements. The company generated annual
turnover of around CHF 9.3 million
in 2010.

The first of these acquisitions, made a substantial contribution to the turn-

www.limetravel.se

based Gullivers Travel Associates (GTA), which has since been assimi-

by Kuonis acquisition activities and the strength of the Swiss franc.


over growth. Kuoni acquired the business of Lime Travel AB of Sweden
effective 1 March; with economic effect as of 1 May Kuoni acquired London-

18%
Scandinavia

46%
Destinations

lated into Division Destinations within the Kuoni Group. Extrapolated to


Gullivers Travel Associates (GTA) (acquired effective 1 May 2011) is a global
leader in the rapidly-expanding online
travel services market. GTA reported a
turnover volume of CHF 1865 million
for the 2010 business year.

10%
UK & Benelux

the full-year period, the acquisitions executed by Kuoni in the course


of 2011 add CHF 1829 million to annual consolidated turnover. The

13%
Switzerland

aggregate purchase price for all acquisitions combined amounted to


CHF 619 million. The acquisitions added CHF 1355 million to Group
turnover in 2011, an increase of 35%.

www.gta-travel.com

Group turnover of
CHF 5111 million by segment

7%
Asia

6%
Southern Europe

Currency movements were the second major influence on Group

turnover trends. The 2011 business year was characterised by exceptional


volatility in foreign exchange rates, as a result of the uncertainty on the
02 Financial Report

138 | 139

Kuoni Annual Report # 2011

02_01_

K u o n i G R OUP

>>

Comment Financial Report (Group)

>>

The Kuoni Group positions itself as a global and service orientated

travel provider that is active in leisure travel services (which accounts for

Comment Financial Report (Group)

Division northern REGION: TURNOVER MAINTAINED AT

PRIOR-YEAR LEVELS

51% of its turnover), destination management services (which generates


46% of Group turnover) and Visa services (accounting for 3% of turnover).

Kuoni Scandinavia sustained an 8.3% decline in turnover for the year to

Destination management services increased its share of total Group

CHF 958 million, principally as a result of currency movements.

turnover significantly in 2011, largely as a result of the acquisition of

In local-currency terms, business volumes for Kuonis Nordic operations

GTA. Kuonis Asian activities also continued their recent trend of

were maintained broadly at prior-year levels, despite the relatively

accounting for an increasingly higher proportion of total Group turnover.

severe impact of the political upheavals in North Africa. The source markets

Within the Kuoni Group portfolio, however, the turnover generated

of Sweden, Norway and Denmark and business in the newly-tapped

remained broadly spread among the Groups three divisions and their

Finnish market were spared major damage thanks to flexible capacity

various markets. The year also saw a further increase in the inter

management. Novair, the airline operated by Kuoni Scandinavia, was

nationalisation of the Groups leisure travel business.

forced to suspend its services to North Africa for several weeks in spring,

Division Northern Region consists of


Kuoni Scandinavia (Sweden, Norway,
Denmark, Finland, Russia and the
Novair airline, plus the Playitas vacation resort in Spain) and Kuoni United
Kingdom & Benelux. The division generated turnover of CHF 1465 million in
2011 (2010: CHF 1640 million).
Scandinavia generated turnover of
CHF 958 million (2010: CHF 1045 million).

but swiftly found alternative destinations such as the Canary Islands

Turnover for individual markets


(CHF million)

2010
2011

Net of currency movements, the Division Southern Region and

for the aircraft concerned. The tour operating business of Russia-based

Destinations divisions improved on their prior-year performances in

Megapolus Tours was substantially reduced in the course of the year,

turnover terms. But Division Northern Region and Division Southern

with the high-risk charter airline business abandoned entirely from the

Region both sustained declines in their business volumes as a result of the

start of the summer season. These actions significantly reduced turnover

Swiss francs strength. The overall positive trend was driven largely by

from the Groups Russian market activities, but greatly reduced the ope-

continued strong growth in the Groups destination management

rations risks, too. Thanks to its redevelopment as a state-of-the-art sports

business, in the external consular services offered by VFS Global and in

and family resort, the Playitas complex on Fuerteventura in the Canary

Kuonis Asian tour operating activities.

Islands was able to tangibly increase its occupancy and turnover volume.

3000

3000

2500

2405

2500
2000

Kuoni United Kingdom generated


turnover of CHF 402 million (2010:
CHF 477 million).

Swiss franc. As well as Pounds decline, business in the UK market was

1500

1500
1000

lion for the year, a 15% decline on 2010 that can be primarily ascribed to
the tangible weakening of the euro and the British pound against the

2000

1000

Kuoni United Kingdom & Benelux posted turnover of CHF 507 mil-

1045 958
595 507

500

500

1017

797 712
355 305

316 370

Southern
Europe

Asia

depressed by a clear deterioration in consumer mood and a slump in


vacation demand. The political upheavals in Egypt, one of its important
destinations, also negatively affected UK business. Beside, Kuonis UK

0
Scandinavia

UK &
Benelux

Division
Northern Region

Switzerland

Division
Southern Region

Destinations
Division
Destinations

operation did enlarge its network of own sales offices from 12 to 21, and
also expanded its partnerships with various travel agents. For Kuoni
Benelux (which is active in the Netherlands and Belgium), the turnover
decline was due solely to currency movements. The fall in business

Kuoni Benelux generated turnover of


CHF 105 million (2010: CHF 118 million).

volumes via external travel agencies (which was caused by a decision to


focus on the organisations own sales offices) was offset through the
02 Financial Report

140 | 141

Kuoni Annual Report # 2011

02_01_

K u o n i G R OUP

>>

Comment Financial Report (Group)

>>

Comment Financial Report (Group)

opening of new Kuoni retail outlets and the acquisition of Best Tours

business being conducted via external travel agencies proved a clear

Belgian operations.

disadvantage. In view of this, Kuoni France endeavoured to focus on


direct sales by expanding its own sales office network. Kuoni Italy raised

Division southern REGION: ASIA AGAIN THE PRIME GROWTH DRIVER

its turnover year-on-year thanks to the addition of specialist operator


Best Tours Italian business activities. The new acquisitions cultural trips

Division Southern Region comprises


Kuoni Switzerland, Kuoni Southern
Europe (France, Italy and Spain) and
Kuoni Asia (India including VFS Global
and China/Hong Kong). The division
achieved turnover of CHF 1386 million in 2011 (2010: CHF 1468 million).

The strength of the Swiss franc against


the euro prompted business to be lost
to providers outside Switzerland:
some to travel agencies in neighbouring countries (Germany in particular)
and some to online booking portals offering euro-denominated deals to the
Swiss market.

Kuoni Switzerland generated turnover of CHF 712 million in 2011, an

to Egypt were, however, especially severely affected by the local poli-

11% decline on the prior-year period. The political unrest in Egypt,

tical upheavals. After opening new sales offices, Kuoni Spain was able to

Tunisia and Morocco adversely affected vacation travel demand in the

maintain its annual turnover almost at prior-year levels in local-

Swiss market, too. The suspension of leisure travel flights to Egypt

currency terms.

Kuoni France generated turnover of


CHF 196 million (2010: CHF 245 million).
Kuoni Italy generated turnover of CHF
94 million (2010: CHF 92 million).
Kuoni Spain generated turnover of
CHF 15 million (2010: CHF 18 million).

and Tunisia had a major impact on business levels: Egypt in particular


The Asia region, which consists of Kuoni India and Kuoni Hong

has been a key Swiss travel destination, especially in the winter season.

The slump in business to the countries concerned was only partially offset

Kong/China, achieved a substantial increase in turnover, in a highly

through new bookings and rebookings for the Canary Islands and from

favourable business and market environment. The annual turnover of

spring onwards to Greece and Turkey. While the strength of the Swiss

CHF 370 million was not only a 17% improvement on the CHF 316 mil-

franc had a basically positive impact on demand in the Swiss market for

lion of 2010; it was a further record result. Kuoni India saw a substantial

travel products, this benefit was restricted as it was for many Swiss

increase in its tour operating business, thanks to further market ex

tour operators by a substantial increase in customers preferring to

pansion and despite the adverse impact of the Indian rupees weakening

make their bookings at travel agencies across the border in neighbouring

against the Swiss franc. Kuoni Indias business-to-business activities,

countries or via foreign online portals offering euro-denominated

which offer travel products to Indian companies and organisations, raised

products. Kuoni Switzerlands specialist travel brands also suffered turn-

their passenger volumes by some 50%. The direct customer business

over declines, with Africa, Intens Travel and Manta Reisen (diving)

also posted significantly higher turnover, thanks largely to the further

particularly hard hit by the developments in the Arab world. Railtour

expansion of the local sales network. In addition to its traditional

and Frantour, Kuonis two rail travel specialists, continued to face a

travel businesses, Kuoni India also reported a tangible increase in the

tough business environment. Results for Northern Europe specialist Kon-

turnover generated by its VFS Global subsidiary, which offers external

tiki, however, were a tangible improvement on the previous year, when

consular services, as a result of new contractual agreements with

business had been severely affected by the Icelandic volcanic eruption.

various government authorities. VFS Global now provides its services for
37 governments in 62 countries. Kuonis leisure travel company in

All Kuonis country organisations in Southern Europe felt the twin

China/Hong Kong delivered a highly encouraging performance for 2011

impact of the upheavals in North Africa and the bleak economic situation

in a favourable economic environment. By expanding its product

in the euro zone. With consumer mood still depressed, unemployment

portfolio and by swiftly and flexibly realigning its product offer in res-

levels high and tough price competition being waged in the tour operating

ponse to the tsunami in Japan and the political upheavals in North

sector, business volumes for 2011 were down on their prior-year levels.

Africa, Kuoni China/Hong Kong achieved an annual turnover result that

The CHF 305 million turnover for the year was a 14% decline (or 3.8% in

was a tangible improvement on 2010 in local-currency terms.

Kuoni India generated turnover of


CHF 325 million (2010: CHF 271 million). This includes VFS Global with a
share of CHF 176 million (2010: CHF
156 million).

For a description of the VFS Global


business model, please see Page 120.

Kuoni China/ Hong Kong generated


turnover of CHF 45 million (2010: CHF
46 million).

local currency). Business at Kuoni France was especially hard hit by the
unrest in North Africa. In a consolidating market, the high proportion of
02 Financial Report

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Kuoni Annual Report # 2011

02_01_

K u o n i G R OUP

>>

Comment Financial Report (Group)

DIVISION DESTINATIONS: ORGANIC GROWTH AND GTA ACQUISITION

BOOST BUSINESS VOLUMES

Division Destinations consists of


Kuoni Destination Management and
Gullivers Travel Associates (GTA),
which was acquired in the course of
2011. The division generated turnover
of CHF 2405 million for the year (2010:
CHF 1017 million), and achieved organic growth (excluding acquisitions
and currency factors) of 13%.

>>

Comment Financial Report (Group)

Having posted a sound recovery the previous year, Destination

Management India & South Asia saw its turnover decline 10% to
CHF 72 million in 2011, as a result of currency exchange factors. In local-

For Division Destinations, the prime event of 2011 was the Kuoni Groups

currency terms, the unit raised its turnover 7.7% year-on-year,

acquisition and integration of Gullivers Travel Associates (GTA),

despite the difficult economic conditions in its key European source

which added a further CHF 1346 million to the divisional turnover. If the

markets.

acquisition had been effected as of 1 January 2011, GTA would have


Destination Management Africa raised its annual turnover 3.0% to

added a further CHF 472 million to the divisions turnover for the year.

Business at Division Destinations existing destination management

CHF 57 million. The growth stemmed largely from East Africa, which

operations saw overall positive trends in all regions, though the correspon-

saw a surge in demand for individual travel products and smaller lodges

ding results were muted by adverse currency movements. The division

on various safari tours. The stronger business here offsets the currency-

posted turnover for the year of CHF 1059 million, a 4.2% increase on its

related declines in business volumes in South Africa and Namibia, the

2010 equivalent.

units two further regions.

Destination Management Europe, the divisions largest constituent

2011 business at Destination Management Asia-Pacific was severely

unit, raised its turnover 6.7% to CHF 494 million, with the Far East

affected by the flooding in Thailand, Vietnam, Cambodia and Australia.

source markets showing particularly strong growth. This, together with

Despite these setbacks, however, the annual turnover of CHF 88 million

the Kuoni Connect business-to-business hotel database launched in

was a 4.7% improvement on the previous year net of currency factors.

2009, helped offset the slump in volumes from Japan following the tsunami
disaster and the subsequent nuclear power plant problems.

Kuonis GROSS PROFIT SUBSTANTIALLY INCREASED,

BUT ACQUISITIONS PROMPT DECLINE IN GROSS PROFIT MARGIN

The strongest organic growth within the division was seen at Desti-

nation Management Middle-East, which increased its turnover from the

Kuoni achieved a gross profit for 2011 of CHF 1026 million the first

CHF 116 million of 2010 to CHF 140 million. The higher business volume

time the company has exceeded the CHF 1 billion threshold in its

was driven by greater demand for individual travel products and by the

corporate history. The result is a 18% improvement on the previous year.

previous years acquisition of the Gulf Dunes and Reem Tours companies.

Acquisitions accounted for 23% of the gross profit growth, while


currency movements depressed gross profit by 8.9%.

MICE stands for meetings, incentives,


conferences and events. Kuonis MICE
business organises conferences, congresses and trade fairs of all kinds
for companies and other institutions,
along with incentive travel arrangements that form part of employees
bonus schemes.

Destination Management USA generated turnover of CHF 215 mil-

lion for the year. With the US dollar losing almost 15% of its value,
the units Swiss-franc turnover volume was broadly in line with prior-year
levels in Swiss francs terms. The volume growth in local-currency
terms was due primarily to rising turnover from Kuoni Connect and to
strong growth in the MICE sector.

02 Financial Report

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Kuoni Annual Report # 2011

02_01_

K u o n i G R OUP

>>

Gross Profit for individual markets


(CHF million)

2010
2011

Comment Financial Report (Group)

>>

400

400
350
350
300
300
250
250
200
200
150
150
100
100
50
50
0
0

366

saw a slight increase in its gross profit margin after raising the directsales share of its UK business. In Southern Europe, the new sales offices in
France and Spain had a similarly beneficial effect. Kuoni Switzerland
further improved its gross profit margin, too, thanks to the positive effects

201

182

172
101

168

166

185

164

of realigning the product mix and achieving better capacity utilisations


(also at its specialist operators). The margins at Kuoni Asia declined,
owing largely to higher direct costs in the tour operating segment. Over-

87
57

all gross profit margin for Kuoni Destination Management remained

50

at its 2010 level. The higher margins achieved through the sizeable increase
Scandinavia

UK &
Benelux

Division
Northern Region

Comment Financial Report (Group)

Switzerland

Southern
Europe
Division
Southern Region

Asia

Destinations
Division
Destinations

The Kuoni Group posted a gross profit margin for 2011 of 20.1%.

The decline from the prior-year level of 21.9% is due to the acquisitions

in demand in the Europe target market were offset by margin declines


at other destinations and the adverse impact (in margin terms) of GTAs
acquisition.

SUBSTANTIALLY-INCREASED EBIT RESULT DESPITE ONE-OFF GTA

ACQUISITION COSTS

effected in the course of 2011. Gullivers Travel Associates (GTA), the


biggest of these, had a particularly strong impact on gross profit margin

Having achieved both organic and (in particular) acquisition-related

for the year, since the company operates a highly automated large-

business growth in the course of the year, the Kuoni Group saw its

volume business with substantially lower margins than those of Kuonis

nominal operating costs increase in 2011 over their prior-year levels.

traditional activities. In organic terms, Kuoni slightly increased its

At the same time, however, operating cost efficiency was further im-

gross profit margin, thanks largely to the expansion of VFS Globals con-

proved through a range of actions that included optimising and auto

sular services business.

mating various business processes.

Gross profit margin trends showed wide variations from unit to unit

The 2011 income statement includes non-recurring costs of the

and within the Groups various business segments. The Scandinavian

acquisition and integration of Gullivers Travel Associates (GTA), which

leisure travel business faced sizeable flight overcapacities attributable at

amounted to CHF 11.3 million and CHF 8.9 million respectively.

least in part to strong expansions among low-cost carriers. Regional

The investment and cost-reduction programme initiated in 2009 was

gross profit margin was also dented by the need to repatriate vacationers

concluded as planned at the end of 2011. The costs of the programme

following the suspension in spring of all flights to North Africa. Gross

amounted to CHF 36 million (compared to CHF 40 million for 2010).

profit margin for Kuonis Russian activities was tangibly increased

A total of CHF 106 million was spent on the programme over its three-

following the abandonment of the high-risk charter business in favour of

year duration.

As part of its groupwide investment


and cost-reduction programme, Kuoni has taken action to accelerate its
transformation process and enhance
its infrastructure, with a special emphasis on expanding and refining its
market- and customer-focused distribution channels (e-business and its
own sales outlets).

a stronger focus on individual travel arrangements. The Playitas sports


Average Kuoni Group workforce numbers rose 26% in 2011, from

and family resort on Fuerteventura also achieved a much-improved gross

profit margin, thanks in particular to the higher occupancies recorded

87 72 to 11048 full-time equivalents. The increase was due largely to

following completion of the hotels refurbishment. Kuoni UK & Benelux

the acquisition of Gullivers Travel Associates (GTA), the strong growth in

02 Financial Report

146 | 147

Kuonis workforce (full-time equivalents) was at 12104 as per end of the


year (2010: 9048).

Kuoni Annual Report # 2011

02_01_

K u o n i G R OUP

>>

Comment Financial Report (Group)

>>

the Groups Asian business and the further expansion of VFS Global and
its activities.

EBIT net of the costs of the investment


and cost-reduction programme, the
planned amortisation of acquisitionrelated intangible assets and the oneoff costs of acquiring and integrating
GTA) amounted to CHF 168.9 million
(2010: CHF 127.1 million).

As a result of the acquisition-driven increase in turnover and the

organic growth at Division Destinations and in Asia, the Kuoni Group


substantially raised its earnings before interest and taxes (EBIT)
result for 2011. Despite the one-off costs of acquiring and integrating GTA,
the CHF 74.2 million EBIT recorded for the year was a CHF 15.8 million
or 27% improvement on the CHF 58.4 million of 2010.

Comment Financial Report (Group)

60.0

60
50.0
50
40.0
40
30.0
30
20.0
20
10.0
10
0.0
0
-10.0
-10
-20.0
-20

48.6

43.9

As in previous years, all three divisions made a positive contribution

21.2
8.2

8.3
2.9

8.1

4.4

UK &
Benelux

Division
Northern Region

to the overall EBIT achieved. The declines in all key foreign currencies

2010
2011

28.5

Scandinavia

EBIT was raised 28% by organic


growth. The declines in the exchange
rates of all relevant foreign currencies
against the Swiss franc eroded 18% or
CHF 10 million from the EBIT figure.
Acquisitions had a 17% positive impact
on the EBIT result.

47.6

42.2

Group EBIT by market/division


(CHF million)

Switzerland

8.9

Southern
Europe
Division
Southern Region

Asia

Destinations
Division
Destinations

against the Swiss franc in the course of 2011 did, however, have a tangible
effect on the consolidated EBIT result. The acquisition of Gullivers Travel

FURTHER IMPROVEMENT IN NET GROUP RESULT

Associates (GTA) made a positive impact in EBIT terms; and Kuonis


Asian activities and almost all the units within Division Destinations

The net group result amounted to CHF 33.3 million. The increase on the

substantially improved their earnings performances. With declining

prior year was driven by the strong improvement in consolidated

volumes in the European tour operating business, Kuoni Scandinavia, UK

EBIT and an improved financial result. Tax expense was higher, however,

& Benelux, Switzerland and Southern Europe saw year-on-year declines

owing to the increase in operating profit.

in their EBIT contributions.

Earnings before interest and taxes


(EBIT) (CHF million)

lion, a tangible improvement on the CHF 18 million of 2010. This

200

200
175
175
150
150
125
125
100
100
75
75
50
50
25
25
0
0

The Kuoni Group reported a net financial result of CHF 9.4 mil-

20.2
35.7

148.7

is due largely to the fact that the prior-year result was more strongly
168.9

influenced by non-operational foreign exchange differences and

In accordance with international accounting principles, goodwill is not


amortised. It is, however, subjected annually to an impairment test to determine its current value.

by underlying profits and losses deriving from the valuation of longterm balance-sheet items. The prior-year result also included one-

38.8

time costs of CHF 3.1 million incurred through the attempts to acquire

74.2

ET-china. Interest expense in 2011 was substantially higher, owing


primarily to financing costs associated with the Gullivers Travel Associates (GTA) acquisition.

EBIT
Reported

Amortisation
IFRS 3

Investment
Programme

Underlying
EBIT

Acquisition
& Integration
Costs GTA

Tax expense amounted to CHF 31 million (2010: CHF 17 million). The

average weighted tax rate was higher than the long-term average,
because the mix of different tax rates for profit and loss results had a net
upward effect on the tax rate as a whole. The fact that acquisition

02 Financial Report

148 | 149

Kuoni Annual Report # 2011

02_01_

K u o n i G R OUP

>>

Comment Financial Report (Group)

>>

Comment Financial Report (Group)

costs could not be used for tax reduction purposes also impacted

and Southern Europe; and the further expansion of VFS Globals activities

negatively on the tax rate for the year.

entailed additional tangible-asset investments. The capital spending


effected under the groupwide investment and cost-reduction programme

Earnings per registered share B amounted to CHF 9.22 (2010:

was substantially lower than in 2010.

CHF 7.43). The Board of Directors will recommend to the Annual General
The Kuoni Group held cash and cash equivalents of CHF 376 mil-

Meeting of Shareholders of 17 April 2012 that the profit for the year be

partly distributed in the form of a withholding tax-free appropriation of

lion at the end of 2011, a decline of some CHF 300 million from

the newly-established capital contribution reserve. The amount paid

their prior-year level. Cash flow from operating activities decreased

should also comply with the broad parameters of the Kuoni Groups

to CHF 101 million and includes a one-off negative seasonal effect

long-term profit distribution policy. The Board of Directors will therefore

deriving from the acquisition of Gullivers Travel Associates (GTA).

ask the Meeting to approve a withholding tax-free distribution of

The fact that the GTA acquisition was financed not only with equity

CHF 0.60 per registered share A and CHF 3.00 per registered share B

and loans but also with available cash has substantially reduced

for the 2011 business year (2010: CHF 0.50/2.50). The payout factor

liquid-fund levels. Advance payments from customers rose from the

resulted at 34% (2010: 31%).

CHF 352 million of 2010 to CHF 373 million. The Group reported a
net debt position of CHF 306 million at year-end (compared to a net

Earnings per registered share B


(CHF)

cash position of CHF 67 million at the end of 2010).

60.0

60

50.0

50

52.7
46.4

40.0

40

30.0
20.0

was conducted in association with the Gullivers Travel Associates (GTA)

30
20

10.0

10

7.4

9.2

2010

2011

0.1

0.0

The statement of comprehensive income includes the net Group result


and all further capitalised value adjustments which are not shown on the
income statement under IFRS provisions. These include market-value adjustments to financial instruments
(CHF 19 million) and currency translation differences (CHF 64 million).
The biggest currency translation differences derived from the translations
of the balance sheets of Kuoni Group
subsidiaries reporting in GBP, EUR
and SEK, of USD-denominated intragroup loans of an equity nature and
of CHF-denominated intragroup loans
to subsidiaries with other functional
currencies.

The Kuoni Groups equity was increased substantially in 2011, from

CHF 562 million to CHF 775 million. A CHF 257 million rights issue

2007

2008

2009

The effective capital increase, net of


costs and the effect of own shares was
at CHF 235 million.

acquisition. The equity funds generated were used to part-finance the


acquisition, with the remainder of the CHF 615 million purchase price
financed via a syndicated credit facility. This increased the companys
debt levels; but the balance sheet equity ratio remains on 31%

Total comprehensive income for 2011 amounted to CHF 12 million

(prior year: CHF 17 million).

SOLID CASH FLOW EVEN AFTER GTA ACQUISITION

a high value for the travel sector that reflects the Kuoni Groups sound
balance-sheet policy.

KUONI ECONOMIC PROFIT FURTHER IMPROVED, DESPITE ONE-OFF

NEGATIVE EFFECTS

Capital spending on tangible and intangible assets in 2011 amounted to


CHF 57 million, and was primarily on IT. The investment amount was

The Kuoni Groups value-based management approach is intended to

a CHF 14 million increase on the CHF 43 million of 2010. A large part of

keep top management aligned as closely as possible to creating sus

the extra spending derived from the acquisition of Gullivers Travel

tainable added value. The central management performance indicator

Associates (GTA) in the course of the year. Kuoni also invested in expand-

here is known as Kuoni Economic Profit or KEP.

ing and refurbishing its branch office networks in the UK, Benelux
02 Financial Report

150 | 151

KEP is calculated from net operating profit after tax (NOPAT) less the
cost of capital invested in operations.
Group-level capital costs have been set
at a sustainable rate weighted average
cost of capital (WACC) of 8.5%. Specific
capital cost rates have also been set for
the Groups individual divisions and
markets that accommodate the corresponding economic and currency
considerations.

Kuoni Annual Report # 2011

02_01_

K u o n i G R OUP

>>

Comment Financial Report (Group)

>>

Kuoni has integrated this value-based management approach based

Comment Financial Report (Group)

Return on invested capital (ROIC) for 2011 amounted to 3.3%.

on the KEP performance indicator into its entire management process, to

Excluding the costs of the investment and cost-reduction programme,

ensure that it has a sustainable effect. To this end, planning and budget-

ROIC stood at 5.6% for the year.

ing, performance measurement, internal and external communications


and the long-term variable-compensation models applicable to senior
management positions have all been consistently adapted to the sustainable value-creation philosophy.

Kuoni Economic Profit declined in 2011 from CHF 23.3 million to

CHF 47.4 million. The increase in turnover volumes and the improvement in operating earnings performance were more than offset by higher
Kuoni economic profit
(CHF million)

Key Figures (CHF million)


Net operating profit after tax (NOPAT)
Average invested capital
Return on invested capital (ROIC)
Weighted average capital costs (WACC)
ROIC WACC spread
Kuoni Economic Profit (KEP)
Delta KEP

2011

2010

40.9
1233.4
3.30%
8.50%
5.10%
47.4
24.1

40.2
748.2
5.40%
8.50%
3.1%
23.3
40.9

NOPAT divided by the average capital invested in operations gives return


on invested capital (ROIC), which is
compared with WACC for the Kuoni
Group and/or its constituent units to
determine value-adding performance.

capital interest costs. With the acquisition of Gullivers Travel Associates


(GTA), the Kuoni Groups average invested capital increased 65%
from CHF 748 million to CHF 1233 million, prompting a corresponding
sizeable rise in its capital costs.

20.0%
20
15.0%
15

17.0%

18.8%

10.0%
10
5.4%

5.0%
5
80.0

80
60
40.0
40
20.0
20
0.0
0
-20.0
-20
-40.0
-40
-60.0
-60
-80.0
-80
60.0

ROIC (%)

0.0%
0

71.9
60.4

3.3%

0.1%

-5.0%
-5
2007

2008

2009

2010

2011

Based on global focus KUONI EXPECTS to be able to partici-

pate in the growth particularly in Asia in 2012


23.3
47.4

saw a slowdown in business growth and momentum. The numerous crises

64.3
2007

2008

2009

After a relatively favourable first half-year, the last six months of 2011

2010

2011

and events that occurred in the course of the year had a tangible
impact on the global economy, which continues to be plagued by sizeable
uncertainty and offers only cloudy prospects for the immediate future.
Based on the most recent prognoses available, the year is likely to see
further weak growth in global GDP terms. Economic growth in Europe is
expected to feel the pinch of the financial policies now being implemented

The International Monetary Fund


(IMF) forecasts global economic
growth of 4.0% for 2012 (source: IMF
World Economic Outlook, September
2011) the same level as is expected
for 2011. In making its projection, the
IMF expects the substantial recovery
in Japan (in particular) and a slight
economic recovery in the USA to offset the decline in Europes economic
momentum.

in response to the debt crisis. Growth rates projected for 2012 in emer
ging economies are likely to be slightly below prior year, though these
nations should continue to serve as a powerful motor for further global
economic expansion.
02 Financial Report

152 | 153

Kuoni Annual Report # 2011

02_01_

K u o n i G R OUP

>>

Comment Financial Report (Group)

For the tourist sector, the United Nations World Tourism Organiza-

>>

Comment Financial Report (Group)

6000

6000

tion (UNWTO) expects further growth in global international tourism,

5000

though at more modest rates. The UNWTO is currently projecting growth

4 000

of 3% to 4% for 2012 as a whole (source: UNWTO, January 2012).

3000

5000

4699

5111

4 855

4000

3894

3984

2009

2010

Turnover
(CHF million)

3000

2000

2000

Continuing economic growth is leading to a further increase in

standards of living, especially in Asian source markets, and this is having

1000

1000
0

a positive effect on Kuoni Groups relevant business activities. By

2007

2008

2011

contrast, the effects of the European debt crisis, including the effect on
consumer sentiment in the European tour operating sector, are still
hard to predict. Based on the latest trading figures for the first weeks of
the current year, Kuoni is confident about 2012. The further expansion

200.0
200

through the acquisition of Gullivers Travel Associates (GTA) of the Kuoni

150.0
150

Groups position particularly in the Asian market will make a positive

100.0
100

contribution to the development of the Kuoni Group. The integration of


GTA and the adoption of the new group structure will be further pursued
in 2012.

139.5 135.7

150.4 151.0

50.0
50

15.1

0.0
0

1.6

EBIT
Net result

74.2

58.4
23.2

33.3

-50.0
-50
2007

EBIT and net result


(CHF million)

2008

2009

2010

2011

Kuoni will continue to pursue its present growth strategy. Kuoni

aims to increase its business volumes at rates that are above the general
market average, through a combination of targeted acquisitions and
its own organic growth. In doing so, and by continuously enhancing its
business processes, Kuoni will ensure further earnings improvements.
Kuoni will also remain true to its strategy of low vertical integration. The
Group will continue to focus on its core travel competence, with a
particular strong positioning in growth markets, in Destination Management services and in online business. By offering a broadly-based
portfolio of services that are closely tailored to individual needs, by
selectively promoting and developing contemporary sales channels and
by practising strict cost management, Kuoni aims to ensure that it
continues to create added financial value.

02 Financial Report

154 | 155

Kuoni Annual Report # 2011

Remote places
within reach.

fig. 1:

Blossoming season of the rapeseed fields between limestone hills in Luoping in the east of the province of Yunnan.

156 | 157

Kuoni Annual Report # 2011

02_02_

Five-Year Summary

of Key Data

K u o n i G R OUP

CHF million

2011

2010

2009

2008

2007

CHF million

2011

2010

2009

2008

2007

Turnover
Total Northern Region
Scandinavia
UK & Benelux
Total Southern Region
Switzerland
Southern Europe
Asia
Destinations
Corporate

5111
1465
958
507
1386
712
305
370
2405
0

3984
1640
1045
595
1468
797
355
316
1017
0

3894
1664
1012
652
1462
821
374
267
894
0

4855
2017
1193
824
1871
1028
539
304
1101
0

4699
1970
1004
966
1856
1001
558
297
1009
0

Cash flow (net cash from operating activities)


Per registered share A
Per registered share B

5.87
29.33

8.15
40.76

3.26
16.31

7.60
38.01

17.62
88.11

Net result
Per registered share A
Per registered share B

1.84
9.22

1.49
7.43

0.02
0.08

10.54
52.68

9.27
46.36

Equity
Per registered share A
Per registered share B

44.43
222.14

38.57
192.84

40.67
203.37

41.74
208.70

41.33
206.67

EBIT
Total Northern Region
Scandinavia
UK & Benelux
Total Southern Region
Switzerland
Southern Europe
Asia
Destinations
Corporate

74.2
31.4
28.5
2.9
47.8
8.1
8.9
48.6
47.6
52.6

58.4
52.1
43.9
8.2
46.1
8.3
4.4
42.2
21.2
61.0

15.1
14.5
5.3
9.2
33.5
1.5
6.1
25.9
15.5
48.4

150.4
61.2
29.0
32.2
80.8
39.4
18.9
22.5
38.5
30.1

139.5
84.3
38.9
45.4
55.9
19.7
20.1
16.1
32.0
32.7

Dividend
Per registered share A
Per registered share B

0.6045
3.0045

0.505
2.505

1.60
8.00

2.00
10.00

3.40
17.00

119952006

7235672

22956088

28631310

48737640

Payout ratio

34.2%

31.2%

>100%

19.0%

35.9%

33.3

23.2

1.6

151.0

135.7

Yield (at year end rate)

1.33%

0.55%

2.29%

2.78%

2.88%

57.2
92.8
101.1
306.4

43.3
54.9
117.0
66.6

44.2
52.4
46.7
59.3

59.5
49.2
108.7
88.0

53.2
56.3
256.9
88.8

Registered share A (Nominal value CHF 0.20)


Number outstanding
Number entitled to dividend
Stock market prices

1249500
1249500
not listed

952000
952000
not listed

952000
952000
not listed

952000
952000
not listed

985600
985600
not listed

Non-current assets
Current assets
Equity
Equity ratio
Non-current liabilities
Current liabilities
Total assets

1576
923
775
31.0%
415
1309
2499

773
1048
562
30.9%
302
957
1821

827
1025
592
32.0%
319
941
1852

809
919
606
35.1%
98
1024
1728

795
1142
607
31.3%
115
1216
1937

Registered share B (Nominal value CHF 1.00)


Number outstanding
Number entitled to dividend
Stock market prices high
low
at year-end
Annual trading volume in CHF million

3748500
35516387
439
213
225
839

2856000
2682529
459
294
454
787

2856000
2679111
387
253
349
697

2856000
2672731
616
290
360
1447

2956800
2669800
784
517
590
1931

Invested capital1
Return on Invested Capital (ROIC)2
Kuoni Economic Profit (KEP)3

1233
3.3%
47.4

748
5.4%
23.3

760
0.1%
64.3

701
18.8%
71.9

711
17.0%
60.4

Stock market capitalisation


as at 31 December in CHF million

900

1383

1063

1097

1861

Average number of personnel (FTE)


Total Northern Region
Scandinavia
UK & Benelux
Total Southern Region
Switzerland
Southern Europe
Asia
Destinations
Corporate

11048
1683
915
768
5329
1107
545
3677
3867
169

8772
1693
984
709
4692
1166
503
3023
2262
125

9070
1757
1021
736
4914
1190
546
3178
2264
135

9797
1878
1122
756
5557
1426
718
3413
2256
106

8826
1725
992
733
5052
1434
789
2829
1950
99

Net result
Investments in tangible fixed assets
and intangible assets
Depreciation and amortisation
Cash flow (net cash from operating activities)
Net cash

02 Financial Report

Total dividend payout


Nominal value reduction

The data presented are based on the consolidated


financial statements. Any changes made to Kuoni
Group accounting policies as a result of changes to
International Financial Reporting Standards are
not retroactively applied.

2 Return on Invested Capital (ROIC) is defined as


net operating profit after tax (NOPAT) as a proportion
of average invested capital. NOPAT is defined as
earnings before interest and taxes (EBIT) less income
dependent taxes

1 Invested capital is the average annual total of all


net current assets, tangible fixed assets, goodwill
actually paid (less any impairments effected) and
other net assets (excluding interest-bearing assets
and liabilities). In the case of GTA, invested capital
was calculated for the full 12-month period: the
corresponding reduction in view of GTAs shorter
eight-month ownership period (i.e. from 1 May 2011)
was effected via capital costs (see footnote 3).

3 Kuoni Economic Profit or KEP is defined as net


operating profit after tax (NOPAT) less the cost of
capital invested in operations. The cost of capital
invested in operations is determined by multiplying
the average invested capital by the weighted average
cost of capital (WACC) of 8.50% of the Kuoni Group.
The cost of capital invested for GTA was calculated
for the eight-month period following its acquisition
on 1 May 2011.

158 | 159

4 Proposal of the Board of Directors to the General


Meeting of Shareholders on 17 April 2012. Subject
to definitive approval by the General Meeting of
Shareholders.
5 Distribution to shareholders of a withholding
tax-free appropriation from the newly created capital
contribution reserve.
6 The company will waive its entitlement to such
payments from the capital contribution reserve for
the treasury shares held on the distribution date
which are reserved for use in its employee share plan.
7 As at 31 December 2011.

Kuoni Annual Report # 2011

Heeding the call


of the great wide open.

fig. 2:

The monsoon-eroded ridges of the Makran Coast along the Indian Ocean in Iran at the Pakistani border.

160 | 161

Kuoni Annual Report # 2011

02_03_

Pro Forma Figures

K u o n i G R OUP

>>

Pro Forma Figures

CHF Mio.

02 Financial Report

2011

2010

2009

2008

2007

Nettoerls
Outbound Europe
Outbound Nordic
Outbound Kuoni Europe
Global Travel Services
Groups
FIT (Fully Independent Traveller)
Emerging Markets & Specialists
Specialists
Emerging Markets
VFS Global
Corporate

5111.3
2098.7
929.5
1169.8
1843.8
788.9
1070.1
1286.0
900.4
221.9
176.4
0.0

3983.6
2285.1
978.7
1307.0
489.6
n.a.
n.a.
1323.6
954.6
226.2
156.2
0.0

3893.6
2320.7
957.1
1364.2
415.2
n.a.
n.a.
1264.1
949.6
192.7
129.3
0.0

4855.0
2930.1
1092.1
1838.6
601.1
n.a.
n.a.
1463.5
1067.2
281.3
123.4
0.0

4698.6
2948.5
979.0
1970.9
526.0
n.a.
n.a.
1364.5
1046.3
247.1
74.8
0.0

EBITA
Outbound Europe
Outbound Nordic
Outbound Kuoni Europe
Global Travel Services
Groups
FIT (Fully Independent Traveller)
Acquisition and integration cost
Emerging Markets & Specialists
Specialists
Emerging Markets
VFS Global
Corporate

113.0
24.4
35.2
10.8
62.1
19.0
63.3
20.2
79.1
35.4
1.8
41.9
52.6

72.2
55.8
55.8
0.0
6.5
n.a.
n.a.
0.0
70.9
38.8
4.3
36.4
61.0

30.3
25.2
21.7
3.5
5.1
n.a.
n.a.
0.0
48.4
37.1
9.7
21.0
48.4

162.8
115.1
45.8
69.3
18.2
n.a.
n.a.
0.0
59.6
52.0
10.6
18.2
30.1

152.0
107.4
42.4
65.0
16.7
n.a.
n.a.
0.0
60.6
46.3
0.5
13.8
32.7

EBIT
Outbound Europe
Outbound Nordic
Outbound Kuoni Europe
Global Travel Services
Groups
FIT (Fully Independent Traveller)
Acquisition and integration cost
Emerging Markets & Specialists
Specialists
Emerging Markets
VFS Global
Corporate

74.2
20.3
33.9
13.6
36.7
13.4
43.5
20.2
69.8
26.6
1.3
41.9
52.6

58.4
53.0
54.7
1.7
6.1
n.a.
n.a.
0.0
60.3
28.9
5.0
36.4
61.0

15.1
22.4
20.5
1.9
4.9
n.a.
n.a.
0.0
36.2
25.5
10.3
21.0
48.4

150.4
112.6
44.6
68.0
17.8
n.a.
n.a.
0.0
50.1
43.3
11.4
18.2
30.1

139.5
106.0
41.5
64.5
16.7
n.a.
n.a.
0.0
49.5
35.5
0.2
13.8
32.7

162 | 163

Kuoni Annual Report # 2011

In the light
of the unknown.

fig. 3:

The limestone hills along the Li River downstream from Guilin epitomise the beauty of the Chinese landscape.

164 | 165

Kuoni Annual Report # 2011

02_04_

Kuoni grouP

02_04_01_

Statement of financial PoSition

Assets CHF 1 000

Notes

31 Dec 2011

31 Dec 2010

(13)
(14)
(15)
(16)
(17)
(23)

200 799
939 778
347 336
11 562
42 273
34 146
1 575 894

8.0
37.6
13.9
0.5
1.7
1.4
63.1

180 108
383 064
114 160
13 077
42 269
39 861
772 539

9.9
21.0
6.3
0.7
2.3
2.2
42.4

(18)
(19)
(20)

288 861
86 874
366 934
180 349
923 018

11.6
3.5
14.7
7.1
36.9

587 898
86 368
210 094
164 042
1 048 402

32.3
4.8
11.5
9.0
57.6

2 498 912

100.0

1 820 941

100.0

Notes

31 Dec 2011

31 Dec 2010

(21)
(21)

3 998
17 163
779 047

0.2
0.7
31.1

3 046
3 943
554 417

0.2
0.2
30.4

765 882

30.6

553 520

30.4

(21)

8 728
774 610

0.4
31.0

8 874
562 394

0.5
30.9

(22)
(23)
(24)

19 819
97 118
298 068
415 005

0.8
3.9
11.9
16.6

18 208
39 438
243 897
301 543

1.0
2.2
13.4
16.6

(24)
(25)

11 391
306 881
372 718
618 307
1 309 297

0.4
12.3
14.9
24.8
52.4

11 761
234 566
352 006
358 671
957 004

0.6
12.9
19.3
19.7
52.5

Total liabilities

1 724 302

69.0

1 258 547

69.1

Total equity and liabilities

2 498 912

100.0

1 820 941

100.0

Non-current assets
Tangible fixed assets
Goodwill
Other intangible assets
Investments in associates
Other financial assets
Deferred taxes
Total non-current assets
Current assets
Cash and cash equivalents
Time deposits
Accounts receivable / other receivables
Prepaid expenses
Total current assets
Total assets

Equity and liabilities CHF 1 000


Equity
Share capital
Treasury shares
Reserves
Equity attributable to shareholders
of Kuoni Travel Holding Ltd.
Non-controlling interests
Total equity
Liabilities
Provisions
Deferred taxes
Financial debts
Total non-current liabilities
Financial debts
Accounts payable
Advance payments by customers
Accrued expenses
Total current liabilities

02 FinAnciAl RepoRt

Kuoni GRoup

166 | 167

(25)

Kuoni AnnuAl RepoRt # 2011

02_04_02_

02_04_03_

Income Statement

Statement of Comprehensive Income

CHF 1000

Notes

2011

2010

CHF 1000

Turnover

(3/4)

5111325

100

3983645

100.0

Net result

Direct costs
Gross profit

4085654
1025671

79.9
20.1

3110494
873151

78.1
21.9

Other comprehensive income

(3/5)

524675
82560
251443
92807
74186

10.3
1.6
4.9
1.8
1.5

459553
91788
208578
54869
58363

11.5
2.3
5.2
1.4
1.5

6673
16068
64791

0.1
0.3
1.3

4591
22926
40028

0.1
0.6
1.0

31446
33345

0.6
0.7

16850
23178

0.4
0.6

1550

0.0

1863

0.0

31795

0.7

21315

0.6

Personnel expense
Marketing and advertising expense
Other operating expense
Depreciation and amortisation
Earnings before interest and taxes (EBIT)

(6)
(7)
(8)
(3/9)

Financial income
Financial expense
Result before taxes

(10)
(10)

Income taxes
Net result

(11)

Of which:
Attributable to non-controlling interests
Attributable to shareholders of
Kuoni Travel Holding Ltd.
Basic earnings per registered share B in CHF
Diluted earnings per registered share B in CHF

(12)
(12)

9.22
9.22

7.43
7.43

Basic earnings per registered share A in CHF


Diluted earnings per registered share A in CHF

(12)
(12)

1.84
1.84

1.49
1.49

02 Financial Report

K u o n i G R OUP

2011

2010

33345

23178

10599
14396
64162
6499

4930
12208
35285
1893

Total other comprehensive income

45666

40670

Total comprehensive income

12321

17492

1574
13895

1955
19447

Realised gains or losses from cash flow hedges


transferred to income statement
Recognised gains or losses from cash flow hedges
Translation differences
Income taxes on other comprehensive income

Of which:
Attributable to non-controlling interests
Attributable to shareholders of Kuoni Travel Holding Ltd.

168 | 169

Notes

(21)
(21)
(21)
(21)

Kuoni Annual Report # 2011

02_04_04_

02_04_05_

Statement of Changes in Equity

CHF 1000
Equity as at 1 January 2010

Share
capital
3046

Treasury
shares
6775

Capital
reserves
196120

Net result
Other comprehensive income:
Realised gains or losses
from cash flow hedges
transferred to income
statement
Recognised gains or losses
from cash flow hedges
Translation differences
Income taxes on other
comprehensive income
Total comprehensive income
Dividends
Sale of treasury shares
Use of treasury shares
Changes in ownership interests
Equity as at
31 December 2010

Retained
earnings
562567

Other
reserves1
172293

21315

21315

3046

3943

197123

570349

Net result
Other comprehensive income:
Realised gains or losses
from cash flow hedges
transferred to income
statement
Recognised gains or losses
from cash flow hedges
Translation differences
Income taxes on other
comprehensive income
Total comprehensive income

31795

Dividends
Use of treasury shares
Capital increase
Changes in ownership interests
Equity as at
31 December 2011

7236
470
9857

31795

Total
equity

21315

1863

23178

12208
35377

1893
40762

1893
19447

213055

Noncontrolling
interests

591732

12208
35377

9545
122

CHF 1000

9067

4930

1003

Statement of Cash Flows

582665

4930

22956
140
2692

Total equity
of Kuoni
shareholders

4930

92

12208
35285

1955

1893
17492

22956
1143
12237
122

1360

788

24316
1143
12237
910

553520

8874

562394

31795

1550

33345

10599

10599

10599

14396
64186

14396
64186

24

14396
64162

6499
45690

6499
13895

1574

6499
12321

2011

2010

33345
92807
5293
1610

23178
54869
1755
14369

26146
2
1001
46487
101125

11934
9863
14371
33773
117008

36035
21157
607591
1889
792
402
629
663459

25414
17930
15230
1907
90756
1958
2522
146859

51032
0
234513
0
1720
7236
276589

5428
1143
0
910
1360
22956
29511

13292

13119

299037

72481

Cash and cash equivalents at beginning of year

587898

660379

Cash and cash equivalents at end of year

288861

587898

Cash flow from operating activities


Net result
Depreciation and amortisation
Changes in provisions and deferred taxes
Other non-cash expenses and income
Changes in net working capital
Accounts receivable/other receivables
Prepaid expenses
Accounts payable/accrued expenses
Advance payments by customers
Net cash from operating activities (cash flow)
Cash flow from investing activities
Purchase of tangible fixed assets
Purchase of other intangible assets
Acquisition of subsidiaries, net of cash and cash equivalents acquired
Disposal of tangible fixed assets
Increase in time deposits (net)
Investment in associates
Decrease in other financial assets (net)
Net cash used in investing activities
Cash flow from financing activities
Decrease of borrowings (net)
Sale of treasury shares
Share capital increase
Changes in ownership interests
Dividend to non-controlling interests
Dividend to shareholders of Kuoni Travel Holding Ltd.
Net cash from financing activities
Effects of exchange rate changes on cash and cash equivalents
Net decrease in cash and cash equivalents

952

3998

550
12670

17163

256088

453211

584581

258745

K u o n i G R OUP

7236
1020
234513
0

1720

765882

8728

8956
1020
234513
0
774610

Notes

(8)

(13)
(15)
(2)

(16)

For further details see notes 28 and 29.

1 For further details see note 21.

02 Financial Report

170 | 171

Kuoni Annual Report # 2011

02_04_06_

K u o n i G R OUP

Accounting Principles

Kuoni Travel Holding Ltd. (the Company) is domiciled in Zurich. The consolidated financial statements for the
year ended 31 December 2011 cover
the Company and all its subsidiaries
(Kuoni Group) and associates. The Company is one of Europes leading tourism
companies, active in the leisure travel
and destination management field. The
consolidated financial statements are
prepared in accordance with International Financial Reporting Standards
(IFRS) and comply with Swiss law.

Basis of Preparation

The consolidated financial statements


are presented in Swiss francs (CHF),
rounded to the nearest thousand. The
consolidated financial statements are
prepared on the historical cost basis
except for derivative financial instruments, financial assets and financial
instruments available for sale, which
are stated at their fair value. Noncurrent assets and discontinued operations held for sale are stated at the
lower of the carrying amount and fair
value less costs to sell.
The preparation of the consolidated
financial statements in conformity

with IFRS requires management to


make judgements, estimates and assumptions that affect the application
of policies and reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these
estimates. Critical judgements made
by management in the application
of IFRS that have a significant effect
on the financial statements and key
sources of estimation uncertainties are
discussed separately. The accounting
policies have been applied consistently
to all periods presented in these consolidated financial statements, with
the exceptions described below.
Adoption of New and
Revised Standards

The Kuoni Group adopted the following new and revised standards and
new interpretations with effect from
1 January 2011:
Revised standards:





IAS 24: Related Party Disclosures


IAS 32: Financial Instruments:
Presentation (classifications of
rights issues)
IAS 27: Consolidated and
Separate Financial Statements

>>

New interpretations:




IFRIC 14: Prepayments of a minimum funding requirement


IFRIC 19: Extinguishing financial
liabilities with equity instruments
improvements to IFRSs (May 2010)

The adoption and application of the


above standards and interpretations
had no effect on these consolidated financial statements.

Future ifrs changes

With the exception of IAS 19, the Kuoni


Group does not expect these new and
revised standards and interpretations
to have any significant effect on its results and financial situation to date.
They will, however, have an impact on
transactions effected on or after 1 January 2012. This applies in particular to:
The amendments to IAS 19 Employee Benefits must be adopted from 1
January 2013. From its corresponding
analyses to date, the Kuoni Group expects such adoption to have the following impact on its consolidated results:

In future, actuarial gains and losses


will be recognised immediately in
Other comprehensive income. The
previous option of deferring such recognition using the corridor approach
will no longer be permitted. Under that
approach, such gains and losses were
shown in results for the period if they
exceeded 10% of the higher of the prior
years fund assets or pension obligations amount. As of 31 December 2011,
unrecognised actuarial losses amounted to CHF 47 million. The adoption
of the amendments to IAS 19 is thus
likely to result in greater volatility in
pension fund assets/liabilities and
consolidated equity.
As a further consequence of the adoption of the amendments to IAS 19, interest on plan assets will no longer
be estimated based on expected asset
returns under current asset allocations. In future, such interest will be
based on the discount rate. The net
periodic pension cost of the Kuoni
Group would have been around CHF
2.7 million higher if the new provisions had been adopted for the 2011
business year.

Effective date

Planned
application

New Standards or Interpretations


IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interests in Other Entities
IFRS 13 Fair Value Measurement
IFRS 9 Financial Instruments

1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2015

Reporting year 2013


Reporting year 2013
Reporting year 2013
Reporting year 2013
Reporting year 2015

Revisions and amendments of Standards and Interpretations


Deferred Tax: Recovery of Underlying Assets (Amendments to IAS 12)
Presentation of Items of Other Comprehensive Income (Amendments to IAS 1)
IAS 19 Employee Benefits
IAS 28 Investments in Associates and Joint Ventures
Disclosures Netting of Financial Assets (Amendments to IFRS 7)
Netting of Financial Assets and Liabilities (Amendments to IAS 32)

1 January 2012
1 July 2012
1 January 2013
1 January 2013
1 January 2013
1 January 2014

Reporting year 2012


Reporting year 2013
Reporting year 2013
Reporting year 2013
Reporting year 2013
Reporting year 2014

02 Financial Report

Accounting Principles

Subsidiaries

Subsidiaries are entities controlled


by Kuoni Travel Holding Ltd. Control
is the power to directly or indirectly
govern the financial and operating
policies of an entity so as to obtain
benefits from its activities. This is the
case where the Group holds more than
50% of the voting rights of an entity
or where the Group has been granted
management of an entity contractually
or is exercising control by other means.
Subsidiaries acquired in the course of
the accounting year are consolidated
from the date the control effectively
commences. Subsidiaries sold in the
course of the accounting year are deconsolidated as of the date on which
control ceases.

172 | 173

The full consolidation method is used,


under which all assets, liabilities, income and expenses of the subsidiaries are included in the consolidated
financial statements. The share of net
assets and net profit or loss attributable
to minority shareholders is presented
separately as non-controlling interest on the consolidated statement of
financial position, and separately as
non-controlling interest in the consolidated income statement.

Associates

Associates are entities in which the


Group is able to exercise significant
influence, but not control, over the financial and operating policies. The
consolidated financial statements include the Groups share of the total recognised gains and losses of associates
on an equity accounting basis, from
the date significant influence commences until the date it ceases. When
the Groups share of losses exceeds
the carrying amount of the associate,
the carrying amount is reduced to nil
and the recognition of further losses
is discontinued except to the extent
that the Group has incurred further
obligations in respect of the associate.
Intragroup Transactions
and Balances

All intragroup transactions and balances and any unrealised gains and
losses or income and expenses arising
from intragroup transactions are eliminated in the consolidation process.
Foreign Currency
Transactions

Transactions in foreign currencies are


translated at the exchange rate on the
date of the transaction. Monetary assets and liabilities in foreign currencies are translated at year-end rates.
Non-monetary assets and liabilities
in foreign currencies that are stated at

historical cost are translated at the exchange rate on the date of the transaction. Non-monetary assets and liabilities in foreign currencies that are stated
at fair value are translated at the exchange rate at the date the values were
determined. Foreign exchange gains
or losses arising from translation are
recognised in the income statement.
Consolidation of Foreign
Subsidiaries

The consolidated financial statements


are presented in Swiss francs (CHF).
The financial statements of foreign
subsidiaries are prepared in their functional currency. Assets and liabilities
(including goodwill and fair-value
adjustments) of foreign subsidiaries
are translated to CHF at year-end exchange rates. Revenue, expenses and
cash flow amounts are translated at
weighted average exchange rates. Foreign exchange differences arising from
the translation of foreign subsidiaries
are recognised directly in equity as a
translation difference.

Turnover

The Group renders a wide range of travel services. The revenue from rendering these services is recognised in the
income statement at the time when the
significant risks and rewards are transferred to the customer. This is generally the case on the date of departure
or, in the case of destination management activities, on the date of arrival.
Turnover comprises net sales revenues
from the tour operating business (after
deduction of sales taxes, value added
tax, discounts and commissions) as
well as commissions received from leisure travel retailing.

Employee Benefits

Wages, salaries, social security contributions, paid vacation and sickness-related absences, bonuses and

Kuoni Annual Report # 2011

02_04_06_

K u o n i G R OUP

>>

non-monetary benefits are allocated


to and shown in the year in which the
employee provided the service concerned for the Kuoni Group. Where
Kuoni provides long-term employee
benefits, the costs are accrued to match
the service to be provided by the employee, and the liabilities of the Kuoni
Group are discounted to take account
of the time value of money where the
effects are significant.

Share-Based Compensation

Certain employees participate in


share-based employee participation
plans, i.e. programmes based on equity
instruments of Kuoni Travel Holding
Ltd. For all share-based employee compensation, the current market value of
the shares concerned is determined
on the date the entitlement is granted,
and is debited to personnel expense on
the corresponding income statements
throughout the period until the entitlement is awarded.
With all employee participation plans
under which equity instruments are
awarded, the compensation paid and
any further amounts resulting from
the exercising of such benefits are
shown as increases in equity. In the
case of cash-based employee participation plans, the compensation awarded
is shown as a liability at its fair value
on the balance sheet date.

Retirement Benefits

Def ined contribution plans: Switzerland, the United Kingdom, Italy,


France, Sweden, Denmark, Norway, the
Netherlands, Austria, the USA, India
and Japan.
The plans are funded by the Groups
subsidiaries (employer) and the employees. Employers contributions to
defined contribution plans are recognised as an expense in the income
statement when incurred. The Groups
net obligation in respect of defined
benefit pension plans is calculated
separately for each plan by qualified
actuaries using the projected unit credit method. To the extent that any cumulative unrecognised actuarial gain or
loss of a plan exceeds 10% of the greater
of the present value of the defined benefit obligation and the fair value of plan
assets, that portion is recognised in the
income statement over the expected average remaining working lives of the
employees participating in the plan.
Where actuarial calculations result
in a surplus, this is only recognised
to the extent that the Group derives a
future economic benefit in the form
of a reduction in plan contributions
or a refund.
Due to local regulations, the Group
maintains certain unfunded retirement benefit plans. The present value
of the defined benefit obligation of unfunded plans is recognised as a provision for employee benefits.

State retirement benefits are provided in


the majority of countries in which the
Kuoni Group operates. The Group has
additionally set up a number of legally
independent retirement benefit plans
or insurance schemes in the following
countries, which are generally funded
by the employee and the employer:
Defined benefit plans: Switzerland, the
United Kingdom, Netherlands and
Norway.

Accounting Principles

Operating Lease Payments

Leases where all the major risks and


rewards of ownership are effectively
retained by the lessor are classified as
operating leases. Payments made under
operating leases (net of any incentives
received from the lessor) are charged
to the income statement on a straightline basis over the period of the lease.
Details of the treatment of finance leases are provided under the accounting
policy for tangible fixed assets.

02 Financial Report

>>

Income Taxes

Income tax on the profit or loss for the


year comprises current and deferred
taxes, based on the local tax rates expected to apply for each Group company. Income tax is recognised in the
income statement except to the extent
that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current income tax is the expected tax
payable on the taxable income for the
year, calculated using tax rates enacted
or substantially enacted at the balance
sheet date, and any adjustment to tax
payable in respect of previous years.
Deferred tax is provided using the
statement of financial position liability method, providing for temporary differences between the carrying
amounts of assets and liabilities for
financial reporting purposes and the
amounts used for taxation purposes.
Temporary differences relating to investments in subsidiaries are not provided for to the extent that they will
probably not reverse in the foreseeable future. Deferred tax liabilities on
undistributed profits of subsidiaries
are recognised, unless dividend payments to the ultimate Group holding
company are not planned for the foreseeable future. The amount of deferred
tax recognised is based on the expected
manner of realisation or settlement
of the carrying amount of assets and
liabilities, using tax rates enacted or
substantially enacted at the balance
sheet date.
A deferred tax asset is recognised only
to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised.

Tangible Fixed Assets

Tangible fixed assets are stated at cost


less accumulated depreciation and

Accounting Principles

impairment losses. Where an item of


tangible fixed assets comprises major
components having different useful
lives, they are accounted for as separate
tangible fixed asset items. The capitalisation of subsequent costs is evaluated
under the general recognition principle for such assets at the time they are
incurred.
Long-term leases of tangible fixed assets where the Group has substantially
all the risks and rewards of ownership
are classified as finance leases. Tangible fixed assets acquired by way of
finance lease are stated at an amount
equal to the lower of their fair value
and the present value of the minimum
lease payments at the inception of the
lease, less accumulated depreciation
and any impairment losses. The related
liabilities are recognised as non-current or current liabilities. The interest
expense component of finance lease
payments is recognised in the income
statement using the effective interest
rate method.
Depreciation is charged to the income
statement on a straight-line basis over
the estimated useful lives of the items
of tangible fixed assets (owned assets
and assets under finance leases and/or
components thereof) concerned. Land
is not depreciated. The estimated useful lives are as follows:

Buildings
Other tangible fixed assets:
Fixtures and equipment
Fixtures and equipment
at point of sale
IT hardware, office
equipment and vehicles
Personal computers and
office machines

Years
2050

The Group does not have any intangible assets with indefinite useful lives,
except for goodwill.

8
5
3

Intangible assets comprise software,


licences, trademark rights and similar

Goodwill

All business combinations are accounted for by applying the acquisition


method. Goodwill arising from the acquisition of a subsidiary represents the
excess of the cost of the acquisition
over the fair value of the net identifiable assets acquired, and is allocated
to cash-generating units. In respect
of associates, the carrying amount of
goodwill is included in the carrying
amount of the investment in the associate. Purchase price adjustments
prior to 1 January 2010 are still effected
via goodwill.
Goodwill is stated at cost less accumulated impairment losses. Goodwill is
tested at least annually for impairment.

10

Intangible Assets

174 | 175

rights acquired from third parties or


in a business combination. Intangible
assets acquired in a business combination are recognised separately from
goodwill if they are subject to contractual or legal rights or are separately
transferable and their fair value can
be reliably estimated. Intangible assets are stated at cost less accumulated
depreciation and impairment losses.
They are depreciated on a straight-line
basis over their expected useful lives
of three to ten years.

Financial Investments

The Group has investments classified


as available for-sale which include minority investments in listed and nonlisted companies.
Available-for-sale investments are stated at fair value, with any resultant gain
or loss recognised directly in equity,
except for impairment losses and, in
the case of debt securities, foreign ex
change gains and losses. When these

investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised
in the income statement.
The fair value of listed available-forsale investments is their quoted bid
price at the balance sheet date. The fair
value of unlisted investments is estimated using valuation techniques.
Time deposits (with a maturity exceeding 12 months from the date of
acquisition), long-term loans and other
long-term receivables are stated at their
amortised cost less impairment losses.
Interest is recognised using the effective interest rate method. The Group
does not have any instruments classified as at fair value through profit and
loss (trading), with the exception of
derivative financial instruments (see
the accounting policy on Derivative
Financial Instruments).
Time Deposits, Loans
and Accounts Receivable

Time deposits (with a maturity bet


ween 3 and 12months from the date
of acquisition), short-term loans and
accounts receivable are stated at their
cost less impairment losses. Impairment losses are recognised on an individual basis, or on a portfolio basis
(for accounts receivable), where there
is objective evidence that impairment
losses have been incurred. The allowance on bad debt and the receivable is
written off if there are clear indicators
(such as a certificate of unpaid debts)
that the receivable is not collectable.

Cash and Cash Equivalents

Cash and cash equivalents contain


cash balances, postal giro accounts
and bank current accounts as well as
time deposits and money market investments with a maturity not exceeding 3 months from the date of acquisition.

Kuoni Annual Report # 2011

02_04_06_

K u o n i G R OUP

>>

Impairment

The carrying amounts of the Groups


assets (other than deferred tax assets
and pension assets, for which separate accounting policies apply) are
reviewed at each balance sheet date
to determine whether there is any indication of impairment. If any such
indication exists, the assets recoverable amount is estimated. Goodwill is
tested at least annually for impairment.
An impairment loss is recognised in
the income statement whenever the
carrying amount of an asset exceeds
its recoverable amount. The recoverable amount of loans and other receivables carried at amortised cost is calculated as the present value of estimated
future cash flows, discounted at the
original effective interest rate inherent
in the asset. Receivables with a short
duration carried at cost are not discounted. The recoverable amount of
available-for-sale securities is their fair
value. The recoverable amount of other
assets is the greater of their fair value
less costs to sell and their value in use.
An impairment loss in respect of goodwill is not reversed. An impairment
loss in respect of financial investments
classified as available-for-sale is reversed if there is a subsequent increase
in the recoverable amount that can be
related objectively to an event occurring after the impairment loss was recognised. In respect of other assets, an
impairment loss is reversed if there has
been a change in the estimates used
to determine the recoverable amount.
Reversals of impairment losses are recognised in the income statement, with
the exception of reversals of impairment losses on equity investments classified as available-for-sale.

Treasury Shares

When the Company or its subsidiaries


purchase the Companys own shares,

Accounting Principles

the consideration paid, including any


directly attributable costs, is presented
as treasury shares and deducted from
equity. Where such shares are subsequently sold or reissued, any consideration received is included in equity.

Financial Debt

>>

that are unrecognised because the future outflow of resources is not probable or the amount concerned cannot
be reliably determined. Contingent
liabilities are not recognised in the
statement of financial position, but
are disclosed.

Financial debt is initially recognised


at fair value, less attributable transaction costs. Thereafter, financial debt is
stated at amortised cost using the effective interest rate method, with any difference between cost and redemption
value being recognised in the income
statement under financial expense
over the borrowing period.

Provisions

A provision is recognised in the statement of financial position when the


Group has a present legal or constructive obligation as a result of a
past event, when it is probable that an
outflow of economic benefits will be
required to settle the obligation and
when a reliable estimate can be made
of the amount of the obligation. If the
effect is material, provisions are determined by discounting the expected
future cash flows at a pre-tax rate that
reflects current market assessments
of the time value of money and, where
appropriate, the risks specific to the
liability. A provision for onerous contracts is recognised when the expected benefits to be derived by the Group
from a contract are lower than the unavoidable cost of meeting its obligations
under the contract.

Contingent Liabilities

Contingent liabilities are possible obligations arising from past events whose
existence will be confirmed only by
the occurrence or non-occurrence of
one or more uncertain future events
not wholly within the Groups control.
They may also be present obligations

02 Financial Report

Accounts Payable

Accounts payable are stated at cost.


Derivative Financial
Instruments

The Group uses derivative financial instruments primarily to hedge its exposure to foreign exchange risks arising
from operational, financing and investment activities. The Group largely
uses forward-exchange contracts, currency options and aviation fuel options
for this purpose. In accordance with
internal Group accounting principles,
derivative financial instruments are
not used for trading purposes. However, derivatives used for hedging purposes that do not qualify as hedge accounting are accounted for as trading
instruments.
All derivative financial instruments
are initially recognised at fair value.
Subsequent to initial recognition, derivative financial instruments are stated at fair value. Derivative financial
instruments with a positive fair value
are included in acc ounts receivable,
while those with negative fair value
are included in accounts payable. Any
gains or losses on the remeasurement
of the fair value of derivative financial instruments that do not qualify
for hedge accounting are recognised
immediately in the income statement.
The fair value of the instruments used
is the calculated amount that the
Group would receive or pay to terminate the contracts at the balance sheet
date, based on quotes from independent counterparties.

Accounting Principles

Hedging

Cash Flow Hedges


Where a derivative financial instrument is designated as a foreign currency hedge of the variability in cash
flows of a firm commitment or a highly
probable forecasted transaction, the
effective part of any gain or loss on the
derivative financial instrument is recognised directly in equity. Contracts
of this kind are classified as cash flow
hedges.
When the firm commitment or forecast transaction results in the recognition of a non-financial asset or liability,
the cumulative gain or loss is removed
from equity and included in the initial cost of the non-financial asset or
liability. Otherwise, the cumulative
gain or loss is removed from equity and
recognised in the income statement at
the same time as the hedged transaction. The ineffective part of any gain
or loss is recognised immediately in
the income statement.
When a hedging instrument expires
or is sold, terminated or exercised, or
the entity revokes the designation of
the hedge relationship but the hedged
forecast transaction is still expected
to occur, the cumulative gain or loss at
that point remains in equity and is recognised in accordance with the above
policy when the transaction occurs.
If the hedged transaction is no longer
expected to take place, the cumulative
unrealised gain or loss recognised in
equity is recognised immediately in
the income statement.

hedge accounting is applied, and any


gain or loss on the hedging instrument
is recognised in the income statement.
Related foreign exchange gains and
losses are also recognised in the income statement as incurred.
Non-Current Assets Held
for Sale and Discontinued
Operations

Non-current assets (or disposal groups)


are classified as held for sale if their
carrying amount will be recovered
principally through a sale transaction
rather than from continuing use. The
asset (or disposal group) must be available for immediate sale in its present
condition and the sale must be highly
probable. Immediately before reclassification as held for sale, the measurement of the assets (and all assets
and liabilities in a disposal group) is
brought up to date in accordance with
the applicable accounting standards.
On initial reclassification as held for
sale, non-current assets and disposal
groups are recognised at the lower of
their carrying amount or fair value less
costs to sell. Any impairment losses on
initial classification as held for sale are
recognised in the income statement.
A discontinued operation is a component of the Groups business that represents a separate major line of business
or a geographical area of operations,
or is a subsidiary acquired exclusively
with a view to resale. Classification as
a discontinued operation occurs upon
disposal or when the operation meets
the criteria to be reclassified as held
for sale, if earlier.

Hedging of Monetary Assets


and Liabilities
Where a derivative financial instrument is used to economically hedge
the foreign exchange exposure of a recognised monetary asset or liability, no

176 | 177

Segment Reporting

A segment is a distinguishable component of the Group which provides


products and/or services in a particular geographical area or a particular
tourism activity and for which separate financial information is available.

The results of the Groups operating


segments are regularly reviewed by
the Board of Directors (as the Groups
chief operating decision-maker) to determine how resources should be distributed and performance potential
assessed. Segments are managed at the
EBIT level.
The segment reporting reflects the
management structure implemented
within the Kuoni Group. This divides
up leisure travel activities based on the
geographical location of the revenue
generating Group company, which in
turn largely corresponds to the origin
of the customers concerned. The same
geographical breakdown based on the
location of the Group company would
be less meaningful for the activities
of Destination Management, which
largely provides services at holiday
destinations.
The Groups six reportable segments
are Scandinavia, the United Kingdom
& Benelux, Switzerland, Southern Europe, Asia and Destinations. These are
organised into three divisions, with
Destinations forming both a division
and a reportable segment.
Interdivisional revenues are accounted for at market rates. The reportable
segments apply the same accounting
principles as the Group.
All operational assets and liabilities
which can be directly or reasonably
assigned to a reportable segment are
shown within the divisions concerned.

Earnings per Share (EPS)

Earnings per share are calculated by


dividing the net result attributable to
Kuoni Travel Holding Ltd. shareholders by the weighted average number of
registered shares entitled to dividends
during the year under review.

Kuoni Annual Report # 2011

02_04_06_

02_04_07_

>>

K u o n i G R OUP

Notes to the Consolidated Financial Statements

Accounting Principles

1. Exchange Rates

The following exchange rates were used for the Groups most important
currencies:
Diluted earnings per share further
take into account any dilution effect
which might have resulted from the
exercise of options.

anticipated turnover from cash-generating units with capitalised goodwill


could result in shortened useful lives
or impairment.

Management Estimates and


Assumptions

Provisions for Warranties


and Onerous Contracts

Estimates and underlying assumptions are reviewed on an ongoing basis. Changes in accounting estimates
may be necessary if there are changes
in the circumstances on which the estimate was based, or as a result of new
information or additional experience.
Such changes are recognised in the period in which the estimate is revised.

Group companies may become involved in warranty proceedings or onerous contracts in the course of their
ordinary operating activities. Provisions for warranties and onerous contracts are measured on the basis of the
information available and a realistic
estimate of the expected outflow of
resources. The outcome of these proceedings may result in claims against
the Kuoni Group that cannot be met
at all or in full through provisions or
insurance cover.

The key assumptions about the future


and key sources of estimation uncertainty that have a significant risk of
causing a material adjustment to the
carrying values of assets and liabilities within the next twelve months are
described below.
Tangible fixed Assets, Goodwill and
Other Intangible Assets
The Kuoni Group has tangible fixed assets with a carrying value of CHF 201
million (see note 13), other intangible
assets with a carrying value of CHF
347 million (see note 15) and goodwill
with a carrying value of CHF 940 million (see note 14).
Goodwill is reviewed annually for impairment. The net book values of tangible fixed assets and other intangible
assets are reviewed if there is any indication of impairment. To assess if
any impairment exists, estimates are
made of the future cash flows expected to result from the use of the asset
and its eventual disposal. Actual outcomes could vary significantly from
such estimates of discounted future
cash flows. Factors such as changes
in the planned use of buildings, the
presence or absence of competition,
technical obsolescence or lower than

Litigation Provisions
The Kuoni Group is party to various legal proceedings. Further claims could
also arise which might not be covered
by existing liabilities or by insurance.
Moreover, no assurance can be given
that the extent of such matters will not
increase, or that possible future lawsuits, claims or proceedings will not be
material. Any such changes that arise
could impact the litigation provisions
recognised in the statement of financial position in future periods.
Income Taxes
As at 31 December 2011, the net receivable for current income taxes amounts
to CHF 6.7 million, the net payable for
current income taxes amounts to CHF
28.2 million and the net payable for deferred income taxes amounts to CHF
63.0 million (see note 23). Significant
estimates are required in determining the current and deferred tax assets
and liabilities. Some of these estimates
are based on interpretations of existing tax laws and regulations. Management believes that these estimates

02 Financial Report

are reasonable and that the recognised


liabilities for income-tax-related uncertainties are adequate. Various internal and external factors may have
favourable or unfavourable effects on
income tax assets and liabilities. These
factors include, but are not limited to,
changes in tax laws and regulations or
their interpretation, and changes in
tax rates. Any such changes that arise
could impact the current and deferred
income tax assets and liabilities recognised in the statement of financial
position in future periods. Furthermore, in order to determine whether
tax loss carry-forwards may be carried
as assets, it is first necessary to critically assess the probability of future
taxable profits against which to offset
them. Such profits depend themselves
on a variety of influencing factors and
developments.

Year-end rates in CHF


Currency
USD
GBP
EUR
DKK
NOK
SEK
HKD
INR
KES
THB

Average rates in CHF

Unit

2011

2010

2011

2010

1
1
1
1
1
1
1
1
1
1

0.940
1.451
1.217
0.164
0.157
0.136
0.121
0.018
0.011
0.030

0.936
1.449
1.251
0.168
0.160
0.140
0.120
0.021
0.012
0.031

0.887
1.421
1.233
0.166
0.158
0.137
0.114
0.019
0.010
0.029

1.042
1.609
1.381
0.185
0.173
0.145
0.134
0.023
0.013
0.033

2. Acquisitions

Acquisitions 2011

Lime Travel AB, Stockholm

(100% acquired 1 March 2011), Tour Operating Business

Gullivers Travel Associates, London

(100% acquired 1 May 2011), Destination Management Services

In addition, our shareholdings in the following company were increased


in the course of the year:

UTE Megapolus Group Co Ltd, Moscow

(from 80% to 92%), Tour Operating Business

178 | 179

Kuoni Annual Report # 2011

02_04_07_

K u o n i G R OUP

>>

Notes to the Consolidated Financial Statements

>>

Notes to the Consolidated Financial Statements

Acquisitions 2010

Gullivers Travel Associates (GTA), London

TBA Global, New York (asset deal effective 1 February 2010),

The Kuoni Group acquired Gullivers Travel Associates (GTA) in full,

Destination Management Services

together with its subsidiaries in Europe, Asia and the Americas,

Krone Golf Tours, Copenhagen

at the beginning of May 2011. GTA is one of the worlds leaders in the

(asset deal effective 1 September 2010), Tour Operating Business

rapidly-growing online travel services market, with operations in

Gulf Dunes LLC, Dubai (100% acquired 1 December 2010),

26 cities. GTAs online reservation facilities were used to book some

Destination Management Services

12 million hotel bednights in 2010.

Reem Tours and Travel LLC, Dubai (100% acquired

1 December 2010), Destination Management Services

GTAs core business is centred on hotel reservations, coach services,

Best Tours S.p.A., Milan

transfers, city sightseeing tours and destination services for group

(100% acquired 31 December 2010), Tour Operating Business

and individual travellers. In strategic terms, GTA excellently enhances

Best Tours, Brussels

Kuonis traditional tour operating business. The new acquisition also

(asset deal effective 31 December 2010), Tour Operating Business

fits well into Kuoni Destination Management (KDM): while GTAs


strengths lie in the swiftly-growing online business-to-business services

In addition, our shareholdings in the following company were increased

market, KDM specialises in group leisure travel arrangements. GTA

in the previous year:

is also strongly anchored in the rapidly-expanding Asian market. GTAs


results are incorporated into the reporting segment Destinations.

Kuoni Private Safaris (E.A.), Nairobi

(from 80% to 100%), Destination Management Services

The GTA purchase price amounts to USD 664 million in cash. The assets
and liabilities in the table were taken over as shown: The acquisition-

CHF Million
Tangible fixed assets
Goodwill
Other intangible assets
Other tangible assets
Cash and cash equivalents
Time deposits
Accounts receivable/other receivables
Prepaid expenses
Non-current liabilities
Current liabilities
Non-controlling interest
Purchase price in cash
Cash and cash equivalents acquired
Purchase price not yet paid
Sales price adjustments on prior year acquisitions
Cash flow used for acquisitions

related intangible assets identified were valued at CHF 273 million while

Book value and purchase price of the acquisitions

Gullivers Travel
Associates

Others

Total
acquired
2011

Total
acquired
2010

18.8
599.8
293.2
5.8
6.5
0.0
188.8
21.7
73.0
446.1
0.0
615.5

0.0
1.5
1.4
0.1
1.1
0.3
0.4
0.2
0.4
1.6
0.0
3.0

18.8
601.3
294.6
5.9
7.6
0.3
189.2
21.9
73.4
447.7
0.0
618.5

0.2
13.5
8.8
0.0
3.2
0.7
8.9
3.1
2.0
17.3
0.0
19.1

6.5
1.7
0.0
607.3

1.1
0.4
1.2
0.3

7.6
2.1
1.2
607.6

3.2
0.7
0.0
15.2

02 Financial Report

non-tax-deductible goodwill amounted to CHF 600 million. The resulting


goodwill largely reflects the value of the synergies and future earnings
which Kuoni expects to generate from the acquisition. The purchase price
is not yet final, and may change as a result of still-pending contractual
conditions. In view of the fact that the corresponding valuations have not
yet been completed, the information on the assets and liabilities
acquired is not final.

180 | 181

Kuoni Annual Report # 2011

02_04_07_

K u o n i G R OUP

>>

Notes to the Consolidated Financial Statements

GTA reported turnover of CHF 1346 million for the eight-month period

>>

Notes to the Consolidated Financial Statements

Acquisitions 2010

of its Kuoni Group ownership in 2011 and an EBIT after amortisation of


intangible assets of CHF 16.4 million. The Kuoni Group incurred

The acquisitions effected in 2010 are of negligible significance in terms of

acquisition and integration costs of CHF 20.2 million as a result of the

their size. The total purchase price of all these acquisitions amounted

acquisition. These are included in Other operating expense.

to CHF 19.1 million in cash. The companies acquired generated an aggregate turnover of CHF 28.9 million under their Kuoni Group ownership

If the acquisition had been effected as of 1 January 2011, GTA would have

in 2010 (or a turnover of CHF 140.3 million for the full year) and reported

contributed a CHF 472 million higher turnover and a CHF 8 million

an aggregate negative EBIT (after amortisation of intangible assets)

lower EBIT result.

of CHF 0.2 million (and a negative EBIT of CHF 2.2 million for the full year).

Other acquisitions 2011

If all these acquisitions had been completed on 1 January 2010, the


Kuoni Group would have reported a CHF 111.4 million higher turnover

The second acquisition in 2011, of Lime Travel, is of minor importance

and a CHF 2.0 million lower EBIT for the 2010 business year.

in view of its size. The purchase price amounted to SEK 21 million in cash.
The company generated turnover of CHF 9 million in the ten-month
reporting period and achieved a breakeven EBIT result.
Had the two acquisitions been effected on 1 January 2011, the Kuoni
Group would have reported an additional CHF 474 million of turnover
and a CHF 8 million lower EBIT result for the year.

02 Financial Report

182 | 183

Kuoni Annual Report # 2011

02_04_07_

K u o n i G R OUP

>>

Notes to the Consolidated Financial Statements

CHF 1000

Scandinavia

Notes to the Consolidated Financial Statements

3. Segment Reporting

Information
by reportable
segments/divisions

>>

Northern
Region

UK & Benelux

Southern
Europe

Switzerland

Southern
Region

Asia

Destinations

Total reportable
segments/divisions

Corporate

2011

2010

2011

2010

2011

2010

2011

2010

2011

2010

2011

2010

2011

2010

2011

2010

2011

2010

External turnover
Turnover with
other segments
Turnover of divisions
Eliminations
Turnover

957362

1044394

506692

594585

1464054

1638979

711730

796933

303177

352590

369712

315964

1384619

1465487

2262652

879179

5111325

3983645

565
957927

612
1045006

2
506694

0
594585

564
1464618

612
1639591

1
711731

8
796941

1798
304975

2582
355172

171
369883

182
316146

1623
1386242

2368
1467855

142544
2405196

137707
1016886

144731
5256056
144731

140687
4124332
140687

GOP
GOP margin

171961
18.0%

201020
19.2%

87059
17.2%

100455
16.9%

259020
17.7%

301475
18.4%

166146
23.3%

181788
22.8%

49508
16.2%

57709
16.2%

185296
50.1%

167760
53.1%

400950
28.9%

407257
27.7%

365701
15.2%

164419
16.2%

1025671

873151

Depreciation
and amortisation

4905

5147

7438

8051

12343

13198

9242

9373

2949

2465

8463

9077

20654

20915

42486

7701

75483

41814

17324

Earnings before
interest and taxes
(EBIT)
EBIT margin

28506
3.0%

43922
4.2%

2927
0.6%

8145
1.4%

31433
2.1%

52067
3.2%

8070
1.1%

8339
1.0%

8869
2.9%

4465
1.3%

48599
13.1%

42221
13.4%

47800
3.4%

46095
3.1%

47606
2.0%

21190
2.1%

126839

119352

405

43

1600

1596

2005

1639

2005

244467
223343

341940
247201

290710
127951

322688
144708

534153
350269

664277
391558

239597
210691

275046
182539

68787
67683

71098
67062

186323
83992

212068
88970

493389
361048

556722
337080

1412985
631064

377610
223526

6799

3646

4819

4621

11618

8267

5909

6316

4875

2194

13301

6676

24085

15186

12175

915
931

984
1027

768
814

709
724

1683
1745

1693
1751

1107
1066

1166
1153

545
520

503
525

3677
3810

3023
3152

5329
5396

4692
4830

3867
4795

Share in result
from associates
Assets
Liabilities
Capital expenditure
Number of staff
(full-time equivalents):
annual average
at year-end

2011

2010

Group
2011

2010

5111325

3983645

1025671
20.1%

873151
21.9%

13055

92807

54869

52653

60989

74186
1.5%

58363
1.5%

1639

88

167

1917

1472

2440527
1342381

1598609
952164

583851
3819211

2223321
3063831

2498912
1724302

1820941
1258547

3236

47878

26689

9314

16655

57192

43344

2262
2319

10879
11936

8647
8900

169
168

125
148

11048
12104

8772
9048

1 The assets and liabilities shown under Corporate


include the Corporate items from the statement of
financial position and the financial assets/liabilities
and tax assets/liabilities of the Kuoni Group.

02 Financial Report

184 | 185

Kuoni Annual Report # 2011

Transcending
our own limitations.

fig. 4:

The Jinshanling section of the Great Wall of China, 135 km north of Beijing, the morning after a winter snow fall.

186 | 187

Kuoni Annual Report # 2011

02_04_07_

K u o n i G R OUP

>>

Notes to the Consolidated Financial Statements

>>

Breakdown of Turnover by Geographical Area

CHF 1000
Switzerland1
International
Eliminations
Total

Notes to the Consolidated Financial Statements

2011

2010

Change
in %

725537
4420647
34859
5111325

827180
3202568
46103
3983645

12.3
+38.0
+24.4
+28.3

Breakdown of assets by geographical area

CHF 1000
Switzerland
International
Total

Tangible
fixed assets
31 Dec 2011

Intangible
assets
31 Dec 2011

Total
31 Dec 2011

Tangible
fixed assets
31 Dec 2010

Intangible
assets
31 Dec 2010

Total
31 Dec 2010

74904
125895
200799

44451
1242663
1287114

119355
1368558
1487913

76729
103379
180108

45959
451265
497224

122688
554644
677332

2011

2010

Change
in %

418326
37045
35805
33499
524675

365166
36922
29827
27638
459553

+14.6
+0.3
+20.0
+21.2
+14.2

1 Tour Operating Business and Destination Management Services

4. Turnover

Breakdown of turnover by activity

CHF 1000
Tour Operating Business
Destination Management Services
Eliminations
Total

2011

2010

Change
in %

2845788
2405196
139659
5111325

3102470
1016886
135711
3983645

8.3
+136.5
2.9
+28.3

Turnover for 2011 was CHF 1127 million or 28.3% higher than in the
prior year. Organic growth increased turnover by 1.2%, acquisitions
added 35.4% and currency movements reduced turnover volume by 8.3%.

5. Gross Profit

Gross profit comprises turnover less all directly allocable airline, ship,

rail, hotel, car rental and similar costs. Gross profit also includes

Information on significant Customers

the currency gains or losses from exchange rate differences realised or


No customer accounts for more than 10% of total turnover.

incurred by individual subsidiaries in the course of their operations.

Breakdown of EBIT

CHF 1000
Total EBIT of reportable segments/divisions
Corporate
Corporate cost
Investment and cost-reduction programme
Total

2011

2010

Change
in %

126839

119352

+6.3

16886
35767
74186

20530
40459
58363

+17.7
+11.6
+27.1

An exceptional investment and cost-reduction programme was launched


at the end of January 2009. The three-year programme envisages total
investments of CHF 106 million. The programme has seen key initiatives

6. Personnel Expense

Personnel expense increased by 14.2%. Organic growth accounted for


+0.8%, acquisitions for +21.4% and currency movements for 8.0%
of the overall change.
CHF 1000
Wages and salaries
Pension costs
Other social security costs
Other personnel costs
Total

launched in the areas of electronic distribution channels, global marketing and branding and raising employee skills and efficiency. A total of
CHF 35.8 million was spent on the programme in 2011 (CHF 40.5 million
in 2010).

02 Financial Report

188 | 189

Kuoni Annual Report # 2011

02_04_07_

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>>

Notes to the Consolidated Financial Statements

SHare-Based Compensation

>>

Notes to the Consolidated Financial Statements

investment risk. The members of group-wide senior management are


remunerated under the same MPP, but with different proportions

The members of the Board of Directors (exclusively non-executive

of the fixed and variable and the short-term and long-term incentive

directors) receive fixed compensation. 50% of this total compensation

components.

is paid in cash form; the remaining 50% is paid in shares. The issue
price of the shares concerned is redefined each year and amounts to

Share-based compensation costs for 2011 totalled CHF 8.4 million (prior

the average of all closing prices for the last ten trading days of the month

year: CHF 13.4 million). The average price of the 275 72 shares used for such

before the Ordinary General Meeting of Shareholders. The shares are

purposes in 2011 amounted to CHF 306 (prior year: 56627 shares used;

awarded on the trading day following the day of dividend distribution

average price CHF 237). The price of each share so used is determined by its

after the Ordinary General Meeting of Shareholders, and are subject

stockmarket price on assignment, less a discount for the corresponding

to a blocking period of three years.

vesting period. An adjustment of the performance factor for current plans


reduced share-based compensation costs by CHF 9.5 million (385 71 shares).

A Management Performance Plan (MPP) compensation system has been


established for Group Executive Board members and senior management

Defined Benefit Retirement Plans

groupwide. Under the MPP, the members of the Group Executive Board
receive a yearly compensation which is divided roughly equally into a

The Group incurs costs for retirement benefit plans in accordance with

fixed and a variable performance-based component. Around one-third of

prevailing regulations in the countries in which it operates. The benefits

this variable component takes the form of a short-term incentive, while

paid to insured employees are generally calculated as a percentage of

the remaining two-thirds take the form of a long-term incentive.

their expected salary in the last few years prior to retirement.

The short-term incentive is based in equal amounts on the achievement

The following assumptions (weighted averages) used in actuarial

of annual financial targets and personal targets, and is paid in cash. The

calculations were adjusted to take account of the economic situation in

long-term incentive, which uses a Performance Share Plan to assign

the country concerned:

entitled persons a certain number of Kuoni shares at the beginning of


each plan period (business year), is based by contrast on the value-adding
performance of the person concerned over a three-year period. The
number of shares assigned at the beginning of the plan period will be
multiplied by a factor of between 0.25 and 3, depending on the employees
subsequent performance in the period concerned. The basis of this

Discount rate
Expected return on investment
Salary increases
Rate of pension increase

2011

2010

2.50%
3.20%
1.70%
0.30%

3.20%
4.10%
1.70%
0.30%

financial performance assessment is the value-based management


performance indicator known as Kuoni Economic Profit or KEP. The

The expected return on capital on the investments of funded pension

shares finally awarded based on the employees performance will

plans is based on the long-term historical performance of the individual

be issued in April following the three-year vesting period. These shares

asset categories for each pension plan.

will not be subject to any subsequent blocking period.


Where funded retirement plans exist, the costs of occupational pension
The KEP target for the Kuoni Group underlying this compensation

coverage are transferred in accordance with the legislation in force in

component, which is used to determine the payment of any variable

the country concerned. The s urpluses of the major defined benefit plans

compensation amount, is itself based on investors expected returns on

are shown below:

the market value of the Kuoni Group and on the corresponding


02 Financial Report

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Kuoni Annual Report # 2011

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>>

Notes to the Consolidated Financial Statements

CHF 1000
Assets of independent retirement plans at fair value
Defined benefit obligations (DBO) of the funded pension plans
Deficit
Cumulative, unrecognised actuarial and investment loss (net)
Unrecognised part of defined benefit assets
Defined benefit assets recognised in the statement of financial position (net)
Pension assets
Pension liabilities

>>

31 Dec 2011

31 Dec 2010

345708
373883
28175

355875
354277
1598

46707
0
18532

16249
0
17847

18775
243

18112
265

Notes to the Consolidated Financial Statements

Retirement plan obligations were as follows:


CHF 1000

2011

2010

Present value of obligation as at 1 January

354277

338054

Current employer service cost


Interest cost
Employee contributions
Benefits paid
Actuarial losses on obligation
Translation differences
Present value of obligation as at 31 December

10365
11072
5190
25311
18351
61
373883

8825
12123
5598
20330
14834
4827
354277

2011

2010

10365
11072
14584
163
514
7530

8825
12123
13894
40
1323
8417

29515
37045

28505
36922

The assets of the independent retirement plans were as follows:


CHF 1000

2011

2010

Fair value of assets as at 1 January

355875

340322

Expected return on assets


Employer contributions
Employee contributions
Benefits paid
Actuarial losses on assets
Translation differences
Fair value of assets as at 31 December

14584
8210
5190
25311
12788
52
345708

13894
9133
5598
20330
11114
3856
355875

Employers contributions for 2012 are estimated at CHF 8.3 million.


Actual income from investments for 2011 amounted to CHF 1.8 million
(2010: CHF 25.0 million). The assets of the retirement plans were

The actuarially determined retirement benefit costs stated above are set
against the Groups contributions to retirement benefit plans. The
following table gives a calculation of the pension costs of the Groups
major defined benefit plans:
CHF 1000
Current employer service cost
Interest costs
Expected return on assets
Recognition of actuarial losses
Effect of the asset ceiling
Pension cost recognised in income statement
Other pension cost (defined contribution plans and state retirement benefits)
Total pension costs

invested in the following asset categories at year-end:


CHF 1000
Equity securities
Debt securities
Real estate
Other assets
Total assets

31 Dec 2010

plans, the impact of differences between the expected and the actual

26%
53%
9%
12%
100%

27%
53%
8%
12%
100%

returns on pension fund assets and the components of the actuarial

The retirement plans hold no shares or other equity instruments of


Kuoni Travel Holding Ltd., Zurich.

02 Financial Report

The following table shows the (deficit)/surplus held by the Groups pension

31 Dec 2011

profits/(losses) on the defined benefit obligation for the past five years.
CHF 1000

2011

2010

2009

2008

2007

Assets of independent retirement plans at fair value


Defined benefit obligations (DBO)
of the funded pension plans
Deficit

345708

355875

340322

308713

398321

373883
28175

354277
1598

338054
2268

313984
5271

348133
50188

Experience-based adjustments to plan assets held


Experience-based adjustments to DBO
Impact of changes in actuarial assumptions on DBO

12788
5538
23889

11114
1604
16438

17005
5161
6569

73333
1307
13305

14998
3197
29380

192 | 193

Kuoni Annual Report # 2011

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K u o n i G R OUP

>>

Notes to the Consolidated Financial Statements

7. Other Operating Expense

CHF 1000
Rent and utilities
Aircraft leasing
Administrative and other expenses
Total

>>

2011

2010

Change
in %

67921
19015
164507
251443

67371
26121
115086
208578

+0.8
27.2
+42.9
+20.6

8. Depreciation and Amortisation

Breakdown of depreciation and amortisation by type of asset.


CHF 1000
On buildings
On other tangible fixed assets
On intangible assets
Total

Notes to the Consolidated Financial Statements

2011

2010

Change
in %

5266
23221
64320
92807

4520
21849
28500
54869

+16.5
+6.3
+125.7
+69.1

10. Financial Result

CHF 1000

2011

2010

Interest income
Dividend income
Share in profits from associates
Non-operational exchange gains (net)
Other financial income
Financial income

5171
10
145
1040
307
6673

4176
7
187
0
221
4591

12417
0
2062
1589
16068

9244
8923
1659
3100
22926

2011

2010

34429
2983
31446

18876
2026
16850

Interest expenses
Non-operational exchange losses (net)
Share in losses from associates
Other financial expenses
Financial expense

The increase in interest expenses derives from the syndicated loan facility.
In 2010 Kuoni made a takeover offer for Et-china.com International
Holdings Ltd. in Guangzhou (China). However, there was a lack of clarity

9. Earnings before Interest and Taxes (EBIT)

among shareholders of GZL Guangzhou International Travel Services, a


tour operator in which Et-china holds a stake and which is the main

EBIT for 2011 was CHF 15.8 million or 27.1% up on the prior-year result.

interest to Kuoni. Kuoni was not affected by this lack of clarity. Because of

Organic growth increased EBIT by 28.2%, acquisitions increased it by

this unresolved situation, the takeover could not be made. Acquisition

16.9% and currency movements decreased EBIT by 18.0%.

costs of CHF 3.1 million were incurred in prior year through the activities
connected with this planned takeover. These are shown under other
financial expenses.

11. Income Taxes

CHF 1000
Current taxes
Deferred taxes
Total

02 Financial Report

194 | 195

Kuoni Annual Report # 2011

02_04_07_

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>>

Notes to the Consolidated Financial Statements

>>

Tax expense can be analysed as follows:


CHF 1000
Tax expense at the average weighted Group tax rate (net)
Non-tax-deductible expenses
Tax-free income
Capitalised deferred tax assets from previously not recognised tax loss carry-forwards
Utilisation of tax loss carry-forwards, not recognised in the statement of financial position
Tax effect from current losses, not eligible for recognition as assets
Effect of changes in tax legislation
Tax expense for earlier periods
Tax expense reported

2011

2010

10398
4929
2313
1193
953
20467
267
378
31446

11129
1605
923
2700
4501
11452
85
873
16850

The weighted average tax rate of the Group for the year under review
was 16% (2010: 28%), The various tax rates applicable to the group
subsidiaries positive and negative results reduced the tax rate in 2011.
Depending on the country involved, profit distributions have varying
tax consequences, the extent of which cannot be estimated.
The Group has the following unrecognised tax loss carried forward:
Expiring CHF 1000
Up to 1 year
1 to 5 years
Over 5 years
Unlimited
Total
Not capitalised maximum positive tax effect

2011

2010

51
146122
66957
141871
355001

5997
127994
32590
124572
291153

103494

84360

12. Earnings per Share (EPS)

13. Tangible Fixed Assets

Land and
buildings

Other tangible
fixed assets

Total tangible
fixed assets

Purchase cost as at 1 January 2010

205616

152060

357676

Additions
Disposals
Acquisitions
Translation differences
Purchase cost as at 31 December 2010

2493
869
0
12969
194271

22921
21774
161
11322
142046

25414
22643
161
24291
336317

Accumulated depreciation as at 1 January 2010

69087

90218

159305

Additions
Disposals
Translation differences
Accumulated depreciation as at 31 December 2010

4520
32
2320
71255

21849
19857
7256
84954

26369
19889
9576
156209

Net book value as at 31 December 2010

123016

57092

180108

Purchase cost as at 1 January 2011

194271

142046

336317

Additions
Disposals
Acquisitions
Translation differences
Purchase cost as at 31 December 2011

6538
0
5269
2028
204050

29497
16998
13582
5911
162216

36035
16998
18851
7939
366266

Accumulated depreciation as at 1 January 2011

71255

84954

156209

Additions
Disposals
Translation differences
Accumulated depreciation as at 31 December 2011

5266
0
241
76280

23221
15377
3611
89187

28487
15377
3852
165467

127770

73029

200799

31 Dec 2011

31 Dec 2010

294860
183248

276182
129987

CHF 1000

Net book value as at 31 December 2011


2011

2010

Basic earnings per registered share B in CHF


Net result attributable to nominal shareholders B of Kuoni Travel Holding Ltd. in CHF 1000
Weighted average number of nominal shares B outstanding

9.22
29702
3220792

7.43
19901
2680030

Basic earnings per registered share A in CHF


Net result attributable to nominal shareholders A of Kuoni Travel Holding Ltd. in CHF 1000
Weighted average number of nominal shares A

1.84
2093
1135075

1.49
1414
952000

02 Financial Report

Notes to the Consolidated Financial Statements

Fire Insurance Values

CHF 1000
Buildings
Furniture, fixtures and equipment

196 | 197

Kuoni Annual Report # 2011

02_04_07_

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>>

Notes to the Consolidated Financial Statements

>>

Notes to the Consolidated Financial Statements

full regard to country- and currency-specific risks relating to cash flows.

14. Goodwill

CHF 1000

2011

2010

Net book value as at 1 January

383064

405286

Acquisitions
Purchase price adjustments
Translation differences
Net book value as at 31 December

601265
1246
43305
939778

13482
420
35284
383064

The management believes that barring extraordinary events no


possible changes to the assumptions made would cause the carrying
amount of the Groups goodwill to exceed its recoverable value.

15. oTher Intangible Assets

Intangible
assets from
acquisitions

Further
intangible
assets

Total other
intangible
assets

Purchase cost as at 1 January 2010

141173

52864

194037

Additions
Disposals
Acquisitions
Translation differences
Purchase cost as at 31 December 2010

0
0
8733
13367
136539

17930
8085
64
2764
60009

17930
8085
8797
16131
196548

Accumulated depreciation and amortisation as at 1 January 2010

40712

28169

68881

Additions
Disposals
Translation differences
Accumulated depreciation and amortisation as at 31 December 2010

13816
0
4932
49596

14684
8081
1980
32792

28500
8081
6912
82388

Net book value as at 31 December 2010

86943

27217

114160

Purchase cost as at 1 January 2011

136539

60009

196548

Additions
Disposals
Acquisitions
Translation differences
Purchase cost as at 31 December 2011

0
0
274101
17281
393359

21157
8551
20521
2282
90854

21157
8551
294622
19563
484213

Accumulated depreciation and amortisation as at 1 January 2011

49596

32792

82388

Additions
Disposals
Translation differences
Accumulated depreciation and amortisation as at 31 December 2011

38723
0
561
87758

25597
8276
994
49119

64320
8276
1555
136877

305601

41735

347336

CHF 1000

The cash-generating units of the Kuoni Group are considered to be its


reportable segments. These are examined to determine whether currently
capitalised goodwill amounts still reflect the value thereof, or whether
impairments are required. Goodwill is allocated to the cash-generating
units of the Kuoni Group as follows:
Discount rate
before taxes

CHF 1000
Total Northern Region
Scandinavia
UK & Benelux
Total Southern Region
Switzerland
Southern Europe
Asia
Destinations
Total

11.8%
12.9%
9.5%
14.4%
22.0%
13.2%

31 Dec 2011

31 Dec 2010

217898
115197
102701
57347
32154
10585
14608
664533
939778

221053
118087
102966
60028
32154
10881
16993
101983
383064

The value of goodwill is tested at least annually for impairment, or if


certain factors or general conditions suggest that its carrying amount can
no longer be recovered. The Kuoni Group applies a standard method to
assess goodwill values. The basic amount which should be recovered by
any goodwill reappraised is based on value-in-use, which is determined
from cash flow projections that are themselves based on the latest
management-approved business plan. This plan pays due and full regard
to the organisational changes and includes the latest management
estimates on turnover and margin trends and on operating costs. The

Net book value as at 31 December 2011

business plan also pays due regard to historic values based on past
experience and includes projections for the next five years. Subsequent

Intangible assets deriving from acquisitions consist largely of capitalised

years are considered on a perpetual annuity basis, using growth rates

trademark rights, while further intangible assets include software

from 0.5% to 2%. The discount rates have been calculated on the basis of

purchased as well as software projects in the course of construction

the weighted average capital costs of the Kuoni Group, with due and

totalling CHF 7.5 million (2010: CHF 0).

02 Financial Report

198 | 199

Kuoni Annual Report # 2011

02_04_07_

K u o n i G R OUP

>>

Notes to the Consolidated Financial Statements

>>

16. Investments in Associates

CHF 1000

2011

2010

Net book value as at 1 January

13077

12591

Share in profits
Share in losses
Investment in associates
Net book value as at 31 December

145
2062
402
11562

187
1659
1958
13077

18. Cash and Cash Equivalents

CHF 1000
Cash holdings and bank current accounts
Time deposits and money market investments with original term up to 90 days
Total

2011

2010

Net book value as at 1 January

42269

45411

Additions
Disposals
Acquisitions
Translation differences
Net book value as at 31 December

5540
5387
1141
1290
42273

6747
8599
5
1295
42269

CHF
GBP
EUR
USD
SEK
Other
Total

funded pension plans totalling CHF 18.8 million (2010: CHF 18.1 million)
see note 6. As in the previous year, there are no loans to associates.

02 Financial Report

31 Dec 2010

252388
36473
288861

463692
124206
587898

31 Dec 2011

31 Dec 2010

33846
51325
52246
36521
9145
105778
288861

190839
119021
52548
43769
82789
98932
587898

2011

2010

0.1%
0.5%
0.9%
0.3%
1.8%

0.2%
0.6%
0.5%
0.4%
0.6%

The average interest rates are:

Other financial assets comprise minority holdings and loans amounting


to CHF 23.5 million (2010: CHF 24.2 million) and pension assets from

31 Dec 2011

Cash and cash equivalents are denominated in the following currencies:


CHF 1000

17. Other Financial Assets

CHF 1000

Notes to the Consolidated Financial Statements

CHF
GBP
EUR
USD
SEK

200 | 201

Kuoni Annual Report # 2011

02_04_07_

Kuoni GRoup

>

Notes to the Consolidated Financial Statements

>

19. time deposits

Notes to the Consolidated Financial Statements

20. Accounts ReceivAble And otheR ReceivAbles

CHF 1 000

This position contains time deposits maturing in more than 90 days.

31 Dec 2011

31 Dec 2010

295 154
0
62 099
23 042
32 723
366 934

150 951
15
47 012
15 615
27 731
210 094

31 Dec 2011

31 Dec 2010

213 319
111 025
31 878
12 793
20 961
389 976
23 042
366 934

122 008
45 399
22 726
16 628
18 948
225 709
15 615
210 094

2011

2010

Flat-rate value adjustments 1 January

15 615

15 478

Change (net)
Translation differences
Flat-rate value adjustments 31 December

7 953
526
23 042

1 034
897
15 615

Receivables from customers


Receivables from associates
Other receivables
Flat-rate value adjustments
Positive fair values of derivative financial instruments held
Total

Access to the time deposits denominated in SEK, amounting to


CHF 76.1 million, is limited due to contracts with the British Civil
Aviation Authority (CAA).
Time deposits are denominated in the following currencies:
CHF 1 000
EUR
GBP
USD
SEK
Other
Total

31 Dec 2011

31 Dec 2010

0
2 823
106
76 104
7 841
86 874

49
0
781
78 119
7 419
86 368

2011

2010

1.0%
1.0%
0.6%
1.5%

1.0%

0.7%
1.1%

The average interest rates are:

EUR
GBP
USD
SEK

Other receivables include tax receivables of CHF 6.7 million


(2010: CHF 4.8 million).
Accounts receivable show the following payment dates:
CHF 1 000
Payment not yet due
Payment overdue 1 to 30 days
Payment overdue 31 to 60 days
Payment overdue 61 to 90 days
Payment overdue by more than 90 days
Flat-rate value adjustments
Total

Flat-rate value adjustments to overdue receivables totalled CHF 2.4 million


(2010: CHF 2.5 million) to receivables between 61 and 90 days overdue
and CHF 20.6 million (2010: CHF 13.1 million) to receivables over 90 days
overdue. Some of the underlying receivables are expected to be paid.
The receivables with no payment date relate largely to long-term customer relations with agents or processing companies.
Flat-rate value adjustments showed the following developments:
CHF 1 000

02 FinAnciAl RepoRt

202 | 203

Kuoni AnnuAl RepoRt # 2011

Leaving well
enough Alone.

fig. 5:

One of the highest volcanic peaks known as the Tezoua in the bizarre Hoggar Mountains of southern Algeria.

204 | 205

Kuoni Annual Report # 2011

02_04_07_

K u o n i G R OUP

>>

Notes to the Consolidated Financial Statements

>>

21. Equity

Notes to the Consolidated Financial Statements

The capital administered by the Kuoni Group corresponds to the consolidated equity. Kuonis aims in administering this capital are:

to maintain the sound structure of its statement of financial position

based on going-concern values;

to maintain the financial scope required for future investments and

acquisitions;

to ensure a return for investors that is commensurate with their

investment risk.

COMPOSITION OF SHARE CAPITAL

Registered
share A

Registered
share B

Total

1249500
0.20

3748500
1.00

4998000

Share capital
CHF
in %

249900
6.25

3748500
93.75

3998400
100.00

Voting rights
Number
in %

1249500
25.00

3748500
75.00

4998000
100.00

Type of share
Number
Nominal value in CHF

The Kuoni Group administers its equity by means of its statement of


financial position equity ratio, i.e. the proportion of equity to total assets.

Conditional Capital

The equity ratio amounted to 31.0% on 31 December 2011. The Kuoni


Group is not subject to any legal covenants relating to minimum equity

Conditional capital issuable via the exercise of conversion rights and/or

requirements. For covenants relating to financial indebtedness, see

warrants linked to bonds or similar debt issued by Kuoni Travel Holding

page 213.

Ltd. or any of its subsidiaries in the domestic or international capital

CHF 1000
Equity attributable to shareholders of Kuoni Travel Holding Ltd.
Non-controlling interests
Total equity
Total assets
Equity ratio

31 Dec 2011

31 Dec 2010

765882
8728
774610

553520
8874
562394

2498912
31.0%

1820941
30.9%

markets and/or via the exercise of options granted to shareholders


amounts to a maximum of CHF 384000, with a further maximum of
CHF 96000 reserved for employee stock option plans.

Authorised Capital

There is an authorised capital of maximum CHF 571200. We refer to


the related information on page 243 of the financial statements of

The Board of Directors makes a proposal to the Annual General Meeting

Kuoni Travel Holding Ltd.

of Shareholders on the use of any profit or balance available for distri


bution. The Kuoni Group pursues a results-based distribution policy and

Restricted Transferability Provisions

generally distributes between 30% and 35% of its net profit for the year
to its shareholders. The Board of Directors will propose to the Annual

The Articles of Incorporation stipulate that no more than 3% of total

General Meeting of 17 April 2012 that shareholders receive a with-holding

voting rights may be entered in the name of any one shareholder.

tax-free appropriation from the newly created capital contribution


reserve. This payment should also pay due regard to the Kuoni Groups

Opting out/Opting up

long-term earnings distribution policy. In view of this, the Board of


Directors will recommend the distribution of CHF 0.60 per registered

There is no opting-out or opting-up clause in the Articles of

share A and CHF 3.00 per registered share B for the 2011 business year.

Incorporation.

The payout ratio amounts to 34%.

02 Financial Report

206 | 207

Kuoni Annual Report # 2011

02_04_07_

K u o n i G R OUP

>>

Notes to the Consolidated Financial Statements

>>

Notes to the Consolidated Financial Statements

management. The changes to treasury shares reflect the registered shares

Principal Shareholders

B purchased by or issued to the Board of Directors, the Group Executive


The following principal shareholders are known to us:

Board and management.

Kuoni and Hugentobler-Foundation, Zurich


31 December 2011: 1249500 registered shares A = 25.00% of the voting rights
31 December 2010: 952000 registered shares A = 25.00% of the voting rights

Options have not been issued from 2005 onwards. The Kuoni Group has

Silchester International Investors Limited, London


31 December 2011: 755062 registered shares B = 15.11% of the voting rights1
31 December 2010: 601100 registered shares B = 15.79% of the voting rights1

had no options outstanding since 31 December 2008.

1 Voting rights restricted to 3% in accordance with


Article 5 of the Articles of Incorporation of Kuoni
Travel Holding Ltd.
2 As per share register 31.12.2011 last notification
dated 9 December 2009, therefore no further details
on options.
3 As per share register 31.12.2010.

Federation of Migros Cooperatives, Zurich together with


Anlagestiftung der Migros Pensionskasse, Zurich
Pensionskasse der Globus-Unternehmen, Spreitenbach
31 December 2011: 474014 registered shares B = 9.48% of the voting rights12
31 December 2010: 307586 registered shares B = 8.08% of the voting rights13

the free reserves of Kuoni Travel Holding Ltd. subsequent to the

approval of an appropriate resolution by the General Meeting of

Shareholders;

Treasury Shares

Share plan
Number of
registered
shares B

Book value
CHF 1000

Held on 1 January 2010

135494

6775

Sales
Use
Held on 31 December 2010

2796
53831
78867

140
2692
3943

Exercise of subscription rights


Use
Held on 31 December 2011

46925
10999
136791

12670
550
17163

The exercising of subscription rights is related to the rights offering of


May 2011. Kuoni exercised all its subscription rights on its treasury
shares.

Retained Earnings

Only a limited amount of retained earnings is available for distribution:

Pictet Funds S.A., Geneva


31 December 2011: Voting rights less than 3%
31 December 2010: 145769 registered shares B = 3.83% of the voting rights13

Options

Share Plan

the reserves of subsidiaries in accordance with local fiscal and legal

provisions, provided they are distributed first to the parent company.

Other Reserves

Other reserves contain translation differences as well as hedging reserves


and fair-value reserves. The last two of these are shown with due consideration for deferred taxation amounts.
CHF 1000
Reserves as at 1 January 2010
Realised gains or losses from cash flow hedges
transferred to income statement
Recognised gains or losses from cash flow hedges
Translation differences
Reserves as at 31 December 2010
Realised gains or losses from cash flow hedges
transferred to income statement
Recognised gains or losses from cash flow hedges
Translation differences
Reserves as at 31 December 2011

Translation
differences

Hedging
reserves

Fair value
reserves

Total

169072

3221

172293

35377
204449

3648
9033
0
8606

0
0
0
0

3648
9033
35377
213055

64186
268635

7843
10653
0
9890

0
0
0
0

7843
10653
64186
258745

The remaining treasury shares held are reserved for the employee share
plan of the Board of Directors, the Group Executive Board and
02 Financial Report

208 | 209

Kuoni Annual Report # 2011

02_04_07_

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>>

Notes to the Consolidated Financial Statements

>>

Translation Differences

The biggest translation differences derived from the translation of the


assets and liabilities of Group companies reporting in GBP, EUR and SEK
and of USD-denominated intragroup loans of an equity nature.

Hedging Reserves

The hedging reserves correspond to the positive or negative fair value of


currency and fuel price hedging contracts classified as cash flow hedges.
They are expected to be removed from equity within 12 months.

Fair-Value Reserves

Deferred taxes changed as follows:


CHF 1000

2011

2010

Deferred tax assets


Deferred tax liabilities
Deferred tax assets as at 1 January (net)

39861
39438
423

39684
43059
3375

Changes recognised in the income statement


Changes not recognised in the income statement
Acquisitions
Translation differences
Deferred tax liabilities as at 31 December (net)

2983
6499
64185
4306
62972

2026
1893
1414
1293
423

34146
97118

39861
39438

At year-end the cumulative deferred taxes recognised directly in equity

22. Provisions

amounted to CHF 3.5 million (2010: CHF 3.0 million). They arise largely

Employee
benefits
2011

Direct
costs
2011

Other
2011

Total
2011

Total
2010

Provisions as at 1 January

13600

3418

1190

18208

19022

Additions
Used
Released
Acquisitions
Translation differences
Provisions as at 31 December

2219
2236
1137
1083
183
13346

263
126
784
0
34
2737

13
17
501
3244
193
3736

2495
2379
2422
4327
410
19819

2917
1449
1198
557
1641
18208

CHF 1000

23. deferred Taxes

Deferred tax assets


Deferred tax liabilities

The fair-value reserves relate to financial assets available for sale.

Notes to the Consolidated Financial Statements

The provisions for employee benefits relate to defined benefit retirement


plans, termination benefits to be paid out in accordance with the law
and other retirement benefit obligations.
Provisions for direct costs include amounts payable to service providers
which are uncertain as to their due dates or size.

02 Financial Report

from the positive and negative current market values of the currency
and fuel price hedging contracts classified as cash flow hedges.
Deferred taxes are derived from the following statement of financial
position items:

CHF 1000
Current assets
Tangible fixed assets
Other non-current assets
Accrued expenses and provisions
Deferred taxes deriving from timing differences
Netting of deferred taxes within each Group company
Deferred taxes deriving from timing differences (net)
Tax effect on undistributed retained earnings of subsidiaries
Deferred taxes on recognised tax loss carry-forwards
Total

210 | 211

Deferred tax
assets
31 Dec 2011

Deferred tax
liabilities
31 Dec 2011

Deferred tax
assets
31 Dec 2010

Deferred tax
liabilities
31 Dec 2010

1405
4825
73
14501
20804

8227
4225
81523
2662
96637

856
2349
29
15225
18459

7056
5452
24934
2441
39883

12019
8785

12019
84618

10748
7711

10748
29135

12500
25361
34146

97118

10303
32150
39861

39438

Kuoni Annual Report # 2011

02_04_07_

K u o n i G R OUP

>>

Notes to the Consolidated Financial Statements

>>

In addition to other terms and conditions, the syndicated credit facility

24. Financial Debts

CHF 1000
Bond
Bank debts
Other
Total
Of which:
Current financial debts
Non-current financial debts

Notes to the Consolidated Financial Statements

31 Dec 2011

31 Dec 2010

199124
110081
254
309459

198644
55633
1381
255658

11391
298068

11761
243897

Kuoni Travel Holding Ltd. issued a CHF 200 million bond at an annual
interest rate of 3% in October 2009. The bond was issued at 100.309%.

contains covenants relating to the degree of indebtedness (ratio of


financial debt to EBITDA) and to equity (minimum consolidated equity).
Additional customary market terms and conditions also apply.
Maximum indebtedness may not exceed three times the EBITDA amount.
The outstanding bond issue is subject to the usual cross-default
clause, under which the outstanding bond amount(s) may become due
for payment if repayment of the syndicated credit amount is demanded
owing to non-observance of the credit terms and conditions. These credit
terms and conditions were being observed on the balance sheet date.
Financial debts are due as follows:

The bond has a duration of four years and matures on 28 October 2013.

CHF 1000

The effective interest rate applied is 3.27%. The bond had a market value

Statement of financial position value


Contractual cash flows
Up to 6 months
7 to 12 months
1 to 2 years
2 to 5 years
Over 5 years

of 102.35% at year-end (stock exchange price on 31 December). Bank debts


consist of mortgages on properties and subsidiaries bank overdrafts.
Liabilities towards credit institutions include mortgages on properties
and bank accounts of subsidiaries with a negative balance on the balance

31 Dec 2011

31 Dec 2010

309459
334923
14706
5623
207976
98570
8048

255658
283186
14506
6345
17892
218376
26067

31 Dec 2011

31 Dec 2010

300456
8637
366
309459

243644
10086
1928
255658

sheet date, together with the syndicated credit facility concluded in 2011.
Financial debts are denominated in the following currencies:

Syndicated credit facility

The Kuoni Group has access to a CHF 350 million syndicated credit
facility which was established in March 2011 to part-finance the acquisition of Gullivers Travel Associates, London. Kuoni Travel Holding Ltd.,
Zurich is the liable party. The credit facility is of five years duration and

CHF 1000
CHF
EUR
Other
Total

will be terminated on 30 June 2016. A total of CHF 70 million was utilised


thereof as of 31 December 2011. The maximum credit amount under
the facility will be reduced by CHF 47 million a year from 30 June 2013
onwards. The interest payable is based on the LIBOR rate plus a margin
of between 1.00% and 2.25%.

02 Financial Report

212 | 213

Kuoni Annual Report # 2011

02_04_07_

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>>

Notes to the Consolidated Financial Statements

>>

Notes to the Consolidated Financial Statements

Risks are assessed by conducting interviews with management members

Average interest rates were:


2011

2010

2.8%
3.3%

2.9%
3.8%

CHF
EUR

and further key personnel. The associated risk scenarios are then
developed on the basis of these and further considerations, including
corporate goals and strategies. Kuonis groupwide risk management
covers 17 top Group-level risks. Beyond these, three to five specific top
risks are managed and monitored for each division and for the
most important business units.

25. Accounts Payable and Accrued Expenses

Within the Internal Control System (ICS), the corresponding processes


The reported amount contains taxes owed but not yet paid amounting to
CHF 28.2 million (2010: CHF 8.5 million).

had those specific risks systematically monitored which are relevant


to the annual accounting process in terms of their incorrect or fraudulent
reporting potential. The key controls derived from these were imple-

26. Risk Management

mented where they were not already fully in place, and documented.
Procedures have also been defined to monitor and assess the existence

The Board of Directors and the management have maintained a risk

of internal controls.

management process under which a report is compiled every six months


on Kuonis present risk exposure and the current status of defined
risk-reducing actions and activities. The probabilities of such risks
occurring and the anticipated impact of the risk scenarios analysed also
form part of this semi-annual risk management reporting. The Kuoni
risk management process further extends to quarterly reporting on any
newly identified risk scenario or changed risk assessment.

02 Financial Report

214 | 215

Kuoni Annual Report # 2011

02_04_07_

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>>

Notes to the Consolidated Financial Statements

>>

27. Financial Risk Management

Notes to the Consolidated Financial Statements

Liquidity Risk

and Derivative Financial Instruments

Liquidity risk is the risk that the Kuoni Group may be unable to meet its financial
The table below shows the financial instruments held by the Kuoni Group.

its liquidity to keep it at adequate levels, with monthly reports to the Group

Derivative financial instruments

CHF 1000

Loans,
receivables
and payables
at amortised
cost

Executive Board. This is done partly by maintaining liquidity reserves, to even out
the usual fluctuations in liquidity levels and needs. Kuoni also has unutilised

Availablefor-sale

At fair value
through profit
and loss

Used as cash
flow hedges

Other

Total
carrying
amount2

credit facilities to cope with any major liquidity fluctuations. These unused credit
facilities totalled CHF 351 million on 31 December 2011 and are available for
loans, overdrafts and hedging activities. The facilities are spread among several

31 Dec 2011
Other financial assets
Cash and cash equivalents
Time deposits
Accounts receivable/other receivables
Total financial instruments assets

obligations when these become due for payment. Kuoni permanently monitors

banks, to avoid excessive dependence on a single banking institution. The due


23254
288861
86874
327531
726520

244

244

18775

1997
1997

30726
30726

6680
25455

42273
288861
86874
366934
784942

28218
28218

309459
306881
618307
1234647

dates of the financial debts held are shown in note 24. The other financial instruments held (accounts payable and accrued expenses) are all payable within
six months.

Financial debts
Accounts payable
Accrued expenses
Total financial instruments liabilities

309459
285505
590089
1185053

4015

17361

4015

17361

Credit Risk

Exposure to credit risk is monitored on an ongoing basis and covered by appropriate value adjustments on accounts receivable and prepayments made (see note 20).
Credit risks are limited because the customer base of the Kuoni Group consists

31 Dec 2010

of a large number of customers spread over a wide range of geographical regions.

Other financial assets


Cash and cash equivalents
Time deposits
Accounts receivable/other receivables
Total financial instruments assets

23900
587898
86368
177576
875742

Financial debts
Accounts payable
Accrued expenses
Total financial instruments liabilities

255658
182987
350140
788785

257

257

18112

1370
1370

26361
26361

13588

37991

13588

37991

1 The Other position shows items to which the


provisions of IAS 39 do not apply.

4787
22899

42269
587898
86368
210094
926629

8531
8531

255658
234566
358671
848895

2 The fair values of the financial instruments do not


deviate substantially from their carrying amounts.

There are no risk concentrations.


The counterparties to derivative financial instruments and cash are carefully
selected financial institutions. Given their high credit ratings, the Kuoni Group
does not expect any counterparty to fail to meet its obligations. The maximum
exposure to credit risk is represented by the carrying amount of each financial
asset.

Interest Rate Risk

In the normal course of its business, the Kuoni Group is exposed to liqui-

The Kuoni Group is exposed to interest rate risk as a result of movements in

dity, credit and market risks (interest rate and currency risks). To manage

interest rates in the capital market. Generally, all non-current financial liabilities

these risks, various derivative financial instruments are used. While

have fixed interest rates. Consequently, changes in interest rates can result in

these are subject to the risk of market rates changing subsequent to their

fluctuations in the fair value of such financial liabilities. This would not have any

acquisition, such changes are generally offset by opposite effects on

impact on the net result or future cash flows, however. The fair values of financial

the items being hedged.

liabilities do not differ significantly from their carrying amounts on the balance
sheet date. No corresponding derivatives are outstanding on the balance sheet
date.

02 Financial Report

216 | 217

Kuoni Annual Report # 2011

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>>

Notes to the Consolidated Financial Statements

>>

Notes to the Consolidated Financial Statements

Cash flow sensitivity analysis for financial instruments with variable

cash flow hedges are expected to be removed from equity within 12 months.

interest rates: a one percentage point increase in the interest rate

Changes in the fair value of forward exchange contracts, currency options

applicable would have reduced the net result by CHF 3.8 million. A one

and swaps that economically hedge monetary assets and liabilities in

percentage point reduction in the interest rate applicable would have

foreign currencies and for which no hedge accounting is applied are

increased the net result by the same amount. This analysis is based on the

recognised in the income statement. Both the changes in fair value of the

assumption that all other influencing factors remain unchanged.

forward contracts and the foreign exchange gains and losses relating
to the monetary items are reported under direct costs.

Foreign Currency Risk

Derivative Financial Instruments

The Kuoni Group incurs foreign currency risk primarily on purchases and
borrowings denominated in a currency other than the functional
currency of the subsidiary concerned. A further foreign currency risk of

CHF 1000

smaller significance derives from the amount of turnover denominated

Cash flow hedges


Currency-related forward contracts,
swaps and options
Commodity options (aviation fuel)
Other derivative financial instruments
Currency-related forward contracts,
swaps and options
Total

in a currency other than the measurement currency of the subsidiary


concerned. On a consolidated basis, the Group is also exposed to currency
fluctuations between the Swiss franc and the local measurement cur
rencies of its subsidiaries. The major currencies giving rise to currency
risk for the Kuoni Group are the euro, the pound sterling, the Swedish

Positive
fair values
31 Dec 2011

Negative
fair values
31 Dec 2011

Contract
values
31 Dec 2011

Positive
fair values
31 Dec 2010

Negative
fair values
31 Dec 2010

Contract
values
31 Dec 2010

28914
1812

16537
824

855340
46058

22668
3693

37991
0

1027720
34877

1997
32723

4015
21376

288224
1189622

1370
27731

13588
51579

267186
1329783

krona and the US dollar.


The fair value is the (higher or lower) value at which a derivative contract
Foreign currency risks are monitored within the Kuoni Group in accord-

could be concluded on the balance sheet date. The fair values calculated

ance with specified guidelines. These guidelines contain principles on

on the balance sheet date should be looked at not in isolation but together

risk limits, the forms of hedging instruments permitted and the relevant

with the calculated value of anticipated future transactions and hence in

risk monitoring processes. The guidelines prohibit on principle the use

the context of the aggregate reduction in the Groups exposure to cur-

of derivative financial instruments for speculative purposes. The enforce-

rency movements. Positive or negative fair values of derivative financial

ment of these guidelines and general risk management are provided

instruments are carried on the statement of financial position under

by the Kuoni Groups treasury units in the form of a hedging strategy.

accounts receivable or accounts payable.

Monthly reports are submitted to the Group Executive Board on the


current risk situation.
The Kuoni Group uses forward exchange contracts and currency options

Derivative financial instruments by currency:

to hedge its foreign currency risk. Most hedging contracts have maturi-

CHF 1000

ties of up to 12 months. Where necessary, the forward exchange contracts

EUR
USD
THB
Other currencies
Commodity options (aviation fuel)
Total

are rolled over at maturity. The Kuoni Group does not hedge against
the foreign currency risks associated with its net investment in foreign
entities or the related foreign currency translation of local earnings.

Positive
fair values
31 Dec 2011

Negative
fair values
31 Dec 2011

Contract
values
31 Dec 2011

Positive
fair values
31 Dec 2010

Negative
fair values
31 Dec 2010

Contract
values
31 Dec 2010

7295
16792
827
5997
1812
32723

11685
5060
324
3483
824
21376

493550
327643
40737
281634
46058
1189622

4690
8209
638
10501
3693
27731

25766
20390
609
4814
0
51579

529204
404661
40065
320976
34877
1329783

The currency hedging contracts outstanding at year-end are summarised


in the following table. Gains and losses on hedge contracts qualifying as
02 Financial Report

218 | 219

Kuoni Annual Report # 2011

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K u o n i G R OUP

>>

Notes to the Consolidated Financial Statements

>>

The table below shows the currency risk deriving from financial instru-

Maturities of derivative financial instruments:

CHF 1000
Up to 6 months
7 to 12 months
1 to 2 years
2 to 3 years
Total

Positive
fair values
31 Dec 2011

Negative
fair values
31 Dec 2011

Contract
values
31 Dec 2011

Positive
fair values
31 Dec 2010

Negative
fair values
31 Dec 2010

Contract
values
31 Dec 2010

15572
12508
4643
0
32723

9329
8357
3690
0
21376

672098
393114
124410
0
1189622

11167
12482
4082
0
27731

26867
19867
4845
0
51579

703782
499380
126621
0
1329783

The table below shows the financial instruments used, valued at their
fair market values and using their valuation method.
The levels are defined as follows:
Level 1: Current market value in an active market of an identical
financial instrument.
Level 2: Current market value in an active market of a similar financial
instrument or a valuation method whose prime input factors are not
based on observable market data.
Level 3: Valuation method whose prime input factors are not based on
observable market data.

ments whose currency differs from the functional currency of the


subsidiary holding the instrument concerned:
In million
foreign currency

USD
31 Dec 2011

EUR
31 Dec 2011

THB
31 Dec 2011

USD
31 Dec 2010

EUR
31 Dec 2010

THB
31 Dec 2010

0.2
3.2
18.3
0.0
43.2
8.0
8.2
6.3
74.8

0.1
0.2
22.6
0.0
48.3
14.5
11.8
19.1
78.4

0.0
0.0
31.2
0.0
5.2
22.2
78.6
0.0
137.2

0.9
3.0
25.1
0.8
14.6
8.9
7.5
0.0
60.8

0.1
0.3
25.4
0.0
21.1
8.0
13.2
5.0
63.1

0.0
0.0
35.3
0.0
0.2
0.4
140.9
0.0
176.8

0.0
16.9
23.5
69.6
2.0
46.3
65.7

35.8
39.1
56.9
41.6
1.6
49.2
125.8

0.0
73.9
64.6
199.8
0.0
232.9
105.4

0.1
15.6
14.2
42.5
2.4
44.3
30.5

31.5
24.8
4.0
27.3
1.3
27.2
61.7

0.0
99.0
21.2
224.4
0.0
311.4
33.2

9.1

47.4

31.8

30.3

1.4

143.6

45.0
384.2
339.2

33.4
384.6
351.2

0.0
1959.4
1959.4

31.5
410.0
378.5

13.7
389.0
375.3

0.0
1697.9
1697.9

Foreign currency hedges

277.8

278.5

1005.2

273.5

286.4

926.7

Net exposure

52.3

120.1

922.4

74.7

87.5

627.6

Intercompany loans
Other financial assets
Cash and cash equivalents
Time deposits
Accounts receivable 3rd party
Accounts receivable intercompany
Prepaid expenses
Less assets hedged (fair value hedge)
Assets exposure
Intercompany loans
Accounts payable 3rd party
Accounts payable intercompany
Accrued expenses
Advance payments by customers
Less liabilities hedged (fair value hedge)
Liabilities exposure
Net balance sheet exposure
Estimated forecast sales
Estimated forecast purchases
Gross estimated forecast exposure

CHF 1000
31 Dec 2011

Notes to the Consolidated Financial Statements

Level 1

Level 2

Level 3

Total

Derivative financial assets


Other financial assets
Total financial assets

0
0
0

32723
0
32723

0
0
0

32723
0
32723

Derivative financial liabilities


Other financial liabilities
Total financial liabilities

0
0
0

21376
0
21376

0
0
0

21376
0
21376

Level 1

Level 2

Level 3

Total

Derivative financial assets


Other financial assets
Total financial assets

0
0
0

27731
0
27731

0
0
0

27731
0
27731

variables (and interest rates in particular) remained unchanged. The

Derivative financial liabilities


Other financial liabilities
Total financial liabilities

0
0
0

51579
0
51579

0
0
0

51579
0
51579

bought and sold within the business year to which the provisions of

31 Dec 2010

02 Financial Report

A change in the foreign-currency positions shown at year-end as a result


of a 5% or 3% change in currency exchange rates would have increased
or decreased consolidated equity and the net Group result by the amounts
shown below. This analysis is based on the assumption that all other
consolidated income statement may also be substantially affected by any
changes in currency exchange rates relating to financial instruments
IFRS 7 do not apply.

220 | 221

Kuoni Annual Report # 2011

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>>

Notes to the Consolidated Financial Statements

Foreign-currency Sensitivity Analysis

Nominal currency USD


+/ 5%
CHF million
functional currency

>>

Nominal currency EUR


+/ 3%

Nominal currency THB


+/ 5%

Equity

Income
Statement

Equity

Income
Statement

Equity

Income
Statement

1.3
2.6
4.8
1.5

0.2
0.1
0.2
0.1

0.4
0.5
6.4
n.a.

0.6
0.1
0.1
n.a.

0.1
0.1
0.8
0.2

0.1
0.0
0.1
0.0

31 Dec 2011
CHF
GBP
SEK
EUR

Notes to the Consolidated Financial Statements

28. Free Cash Flow

CHF 1000
Cash flow from operating activities
Purchase of tangible fixed assets
Purchase of other intangible assets
Disposal of tangible fixed assets
Free cash flow

2011

2010

101125
36035
21157
1889
45822

117008
25414
17930
1907
75571

2011

2010

2249
11881
29082

4070
8978
14701

29. Additional Information on the Statement of Cash Flows

CHF 1000
31 Dec 2010
CHF
GBP
SEK
EUR

1.7
2.7
5.3
2.9

0.4
0.2
0.2
0.0

2.6
0.6
6.7
n.a.

0.3
0.2
0.2
n.a.

0.1
0.2
0.7
0.1

0.0
0.0
0.2
0.0

Interest received
Interest paid
Income taxes paid

These three positions are included in cash flow from operating activities.

02 Financial Report

222 | 223

Kuoni Annual Report # 2011

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>>

Notes to the Consolidated Financial Statements

30. Related Parties

>>

Notes to the Consolidated Financial Statements

Group Executive Board and Board of Directors

Compensation

Related parties are directors and Group Executive Board members


(together with members of their families), major shareholders and

The total compensation (including employers contributions to social

companies controlled by these parties, associates and pension plans.

security and pension funds) paid to members of the Group Executive

Transactions with related parties are priced on an arms length basis.

Board and the Board of Directors, which is included in personnel expense


consisted of:

Apart from the compensation paid to the Board of Directors and the

Group Executive Board

Group Executive Board and the ordinary contributions to occupational


pension plans, there were no significant transactions with related
parties in 2011.

Kuoni and Hugentobler-Foundation, Zurich

The Kuoni and Hugentobler-Foundation received a (gross) dividend of

Board of Directors

Total

CHF million

2011

2010

2011

2010

2011

2010

Short-term employee benefits


Post-employment benefits
Termination benefits
Share-based payments
Total

4.5
0.8
0.0
0.1
5.2

5.2
0.8
0.0
4.3
10.3

0.9
0.1
0.0
0.7
1.7

0.9
0.1
0.0
0.7
1.7

5.4
0.9
0.0
0.6
6.9

6.1
0.9
0.0
5.0
12.0

CHF 0.5 million on the basis of its shareholding.


The compensation paid to and shares held by members of the Board of

Associates

Directors and the Group Executive Board are shown in detail on pages
246 to 249 of the financial statements of Kuoni Travel Holding Ltd., in

All transactions with associates are priced on an arms length basis. The

compliance with Swiss law.

Kuoni Group made sales to associates totalling CHF 1.1 million in 2011
(2010: CHF 1.3 million), while, as last year, no purchases were made from
associates. For receivables outstanding, please see notes 16 and 20.
As in the previous year, no profits were distributed by associates in 2011.

Pension Plans

The transactions between the Kuoni Group and the various defined
benefits pension plans for its employees are shown in note 6. As in the
previous year, the Kuoni Group currently has no liabilities towards
these pension plans.

02 Financial Report

224 | 225

Kuoni Annual Report # 2011

02_04_07_

K u o n i G R OUP

>>

Notes to the Consolidated Financial Statements

>>

31. Contingent LiabilitiEs, Assets Pledged

CHF 1000
Contingent liabilities
Assets pledged

Notes to the Consolidated Financial Statements

33. Post-Year-End Events

31 Dec 2011

31 Dec 2010

The consolidated financial statements of the Kuoni Group were approved

0
73948

0
76692

and released for publication by the Board of Directors on 15 March 2012.


The Board of Directors also resolved on the same date to propose to the
General Meeting of Shareholders that shareholders receive a withholding

The assets pledged were used to secure bank loans with mortgage

tax-free appropriation from the newly created capital contribution

collateral.

reserve of CHF 0.60 per registered share A and CHF 3.00 per registered
share B for the 2011 financial year. The final approval of the above is

32. Leasing Liabilities

subject to the General Meeting of Shareholders of 17 April 2012.

Financial Leases

No events have occurred since 31 December 2011 that would necessitate


an adjustment to the carrying amounts of the Groups assets and

As in the prior year, there are no finance leasing liabilities.

liabilities.

Operating Leases

This position mainly relates to leasing liabilities of Novair for certain


aircraft and to lease contracts for buildings.
CHF 1000
Liabilities payable up to 1 year
Liabilities payable 1 to 5 years
Liabilities payable over 5 years
Total leasing liabilities not recognised in the statement of financial position
Amount recognised in the income statement in current year

02 Financial Report

31 Dec 2011

31 Dec 2010

59426
117113
9201
185740

50379
119923
14340
184642

71014

67210

226 | 227

Kuoni Annual Report # 2011

Being at one
with all of nature.

fig. 6:

A network of trails caused by migrating elephants criss-crosses the green grasses of Lake Amboseli in Kenya.

228 | 229

Kuoni Annual Report # 2011

02_04_08_

K u o n i G R OUP

Principal Subsidiaries and Associates

02_04_08_01_

>>

Europe

Activity

Currency

Paid-in
share capital

Investment in %

Consolidation

T/D
T
C
C

CHF
CHF
CHF
CHF

7000000
1600000
1000000
6000000

100
93
100
100

C
C
C
C

Austria
Kuoni Destination Management Ges.m.b.H., Vienna

EUR

253000

100

Belgium
Kuoni Travel Belgium B.V. B.A., Gent

EUR

7335000

100

Denmark
Kuoni Scandinavia Danmark, Copenhagen
Kuoni Destination Management A/S, Copenhagen
Falk Lauritsen Rejser A/S, Herning

T
D
T

DKK
DKK
DKK

0
600000
500000

100
100
100

C
C
C

Switzerland
Kuoni Reisen AG, Zurich
Railtour Suisse SA, Berne
KIT Solution AG, Zurich
Kuoni Immobilien AG, Zurich

France
Voyages Kuoni S.A., Paris

T/D

EUR

507000

100

Hungary
Kuoni Destination Management Kft., Budapest

HUF

3000000

100

Italy
Kuoni Italia S.p.A., Genoa
Kuoni Destination Management S.p.A., Rome
Octopus Travel Italia SRL, Rome

T
D
D

EUR
EUR
EUR

8400000
1548000
20000

100
100
100

C
C
C

The Netherlands
Kuoni Travel Nederland B.V., Amsterdam
Kuoni Destination Management B.V., Amsterdam
Kuoni Specialists B.V., Amsterdam

Principal Subsidiaries and Associates

T
D
T

EUR
EUR
EUR

02 Financial Report

13230000
55815
20418

100
100
100

Activity

Currency

Paid-in
share capital

Investment in %

Consolidation

Norway
Kuoni Scandinavia Norway, Oslo

NOK

100

Russia
UTE Megapolus Group Co. Ltd., Moscow

RUB

186000

92

Spain
Viajes Kuoni S.A., Madrid
Kuoni Destination Management S.L., Madrid
Sotavento S.A., Fuerteventura
Gullivers Travel Associates S.A., Madrid

T
D
T
D

EUR
EUR
EUR
EUR

2614600
150000
3060000
420708

100
100
100
100

C
C
C
C

Sweden
Kuoni Scandinavia AB, Stockholm
Nova Airlines AB, Stockholm

T
T

SEK
SEK

23000000
15000000

100
100

C
C

T/D
T
T
T
T
T
D
D
D

GBP
GBP
GBP
GBP
GBP
GBP
GBP
GBP
GBP

1500000
650000
70000
4442000
100
139000
177194
10000
50000

100
100
100
100
100
100
100
100
100

C
C
C
C
C
C
C
C
C

United Kingdom
Kuoni Travel Ltd., Dorking
CV Travel Holdings Ltd., London
Holiday Supplies Ltd., Liverpool
Kirker Holdings Ltd., London
Voyages Jules Verne Ltd., London
Carrier Ltd., Cheshire
Donvand Ltd., London
GTA travel.com Ltd., London
Octopus Travel.com Limited, London

C
C
C

230 | 231

Activity:

Consolidation:

T Tour Operating Business


D Destination Management Services
C Corporate

C Consolidated
E Valuation according to equity method

Kuoni Annual Report # 2011

02_04_08_

K u o n i G R OUP

>>

02_04_08_02_

Australia
Australian Tours Management Pty Ltd., Melbourne
GTA Australasia Pty Limited, Sydney
Octopus Travel.com (Australia) Pty Limited, Sydney
China
Kuoni Travel (China) Ltd., Hong Kong
S.K.Y. Business Consultancy Co. Ltd., Shanghai
Et-china.com International
Holdings Ltd., Guangzhou
Kuoni Travel (China) Ltd., Beijing
Gullivers Travel Associates (Hong
Kong) Limited, Kowloon
Gullivers (Beijing) Commercial Consulting
Services (China), Beijing
Gullivers Travel Associates (China) Limited, Beijing

Principal Subsidiaries and Associates

>>

Overseas

Activity

Currency

Paid-in
share capital

Investment in %

Consolidation

D
D
D

AUD
AUD
AUD

500000
100000
50000

100
100
100

C
C
C

T
D

HKD
CNY

4800000
1198115

100
100

C
C

T
D

CNY
CNY

0
0

30
100

E
C

HKD

3064000

100

D
D

USD
CNY

250000
4000000

100
100

C
C

D
D

AED
AED

300000
1725000

80
100

C
C

AED

1000

100

T/D
T
T

INR
INR
INR

83600000
8450000
283670000

100
100
100

C
C
C

Japan
Kuoni Travel (Japan) Ltd., Tokyo
Gullivers Travel Agency co Ltd (Japan), Tokyo
Octopus Travel.com Japan KK, Tokyo

D
D
D

JPY
JPY
JPY

50000000
40000000
10000000

100
100
100

C
C
C

Kenya
Private Safaris (E.A.) Ltd., Nairobi

KES

62500000

100

Mauritius
Kuoni Asian Investments (Mauritius) Ltd., Port Louis
VF Worldwide Holdings Ltd., Port Louis

C
T

USD
GBP

1000000
4303000

100
100

C
C

Nepal
Sita World Travel (Nepal) Pvt. Ltd., Kathmandu

NPR

2250000

63

Dubai
Desert Adventures Tourism LLC, Dubai
Gulf Dunes LLC, Dubai
Gullivers Travel Associates Middle
East FZ LLC, Dubai
India
Kuoni Travel (India) Pvt. Ltd., Mumbai
Kuoni Business Travel India Pvt. Ltd., Delhi
VFS Global Services Pvt. Ltd., Mumbai

Principal Subsidiaries and Associates

02 Financial Report

Activity

Currency

Paid-in
share capital

Investment in %

Consolidation

SGD

100000

100

SGD

100000

100

South Africa
Kuoni Private Safaris (Pty) Ltd., Cape Town

ZAR

500000

100

South Korea
Kuoni Travel (Korea) Ltd., Seoul
Gullivers Travel Associates Korea Limited, Seoul

D
D

KRW
KRW

100000000
350000000

100
100

C
C

Sri Lanka
Sita World Travel (Lanka) Pvt. Ltd., Colombo

LKR

2500000

76

Taiwan
Gullivers Travel Associates (Taiwan) Limited, Taipei

TWD

6000000

100

Thailand
Asian Trails Ltd., Bangkok
Kuonissimo (Thailand) Ltd., Bangkok

D
D

THB
THB

24000000
2451000

49
49

C
C

United States
AlliedTPro, Inc., New York
Kuoni Travel (Atlanta) Inc., Atlanta
Kuoni Holding Delaware, Inc., Wilmington
GTA Americas LLC, Delaware
Octopus Travel.com (USA) Limited, Delaware

D
D
C
D
D

USD
USD
USD
USD
USD

170000
50000
1
29700000
1000

100
100
100
100
100

C
C
C
C
C

Singapore
Kuoni Travel (S) PTE Ltd., Singapore
Gullivers Travel Associates (Singapore)
Pte Limited, Singapore

232 | 233

Activity:

Consolidation:

T Tour Operating Business


D Destination Management Services
C Corporate

C Consolidated
E Valuation according to equity method

Kuoni Annual Report # 2011

02_04_09_

K u o n i G R OUP

Report of the Statutory Auditor

>>

Report of the Statutory Auditor

Report of the Statutory Auditor on the Consolidated

require that we plan and perform the audit to

Financial Statements to the General Meeting of

obtain reasonable assurance whether the consolidated

Shareholders of Kuoni Travel Holding Ltd., Zurich.

financial statements are free from material miss-

We confirm that we meet the legal requirements on

tatement.

licensing according to the Auditor Oversight Act (AOA)

Report on Other Legal Requirements

and independence (article 728 CO and article 11 AOA)

As statutory auditor, we have audited the accompanyAn audit involves performing procedures to obtain

and that there are no circumstances incompatible

Holding Ltd., presented on pages 167 to 233, which

audit evidence about the amounts and disclosures

with our independence.

ing consolidated financial statements of Kuoni Travel


comprise the statement of financial position, income

in the consolidated financial statements. The proce-

statement, statement of comprehensive income,

dures selected depend on the auditors judgment,

In accordance with article 728a paragraph 1 item 3 CO

statement of changes in equity, statement of cash flows

including the assessment of the risks of material

and Swiss Auditing Standard 890, we confirm that

and notes for the year ended 31 December 2011.

misstatement of the consolidated financial statements,

an internal control system exists, which has been

whether due to fraud or error. In making those risk

designed for the preparation of consolidated financial

assessments, the auditor considers the internal control

statements according to the instructions of the board

system relevant to the entitys preparation and fair

of directors.

Board of Directors Responsibility

The board of directors is responsible for the prepara-

presentation of the consolidated financial statements

tion and fair presentation of the consolidated financial

in order to design audit procedures that are appro

We recommend that the consolidated financial

statements in accordance with International Financial

priate in the circumstances, but not for the purpose of

statements submitted to you be approved.

Reporting Standards (IFRS) and the requirements

expressing an opinion on the effectiveness of the

of Swiss law. This responsibility includes designing,

entitys internal control system. An audit also includes

implementing and maintaining an internal control

evaluating the appropriateness of the accounting

system relevant to the preparation and fair presentation

policies used and the reasonableness of accounting

KPMG AG

of consolidated financial statements that are free

estimates made, as well as evaluating the overall

from material misstatement, whether due to fraud or

presentation of the consolidated financial statements.

Martin Schaad

error. The board of directors is further responsible

We believe that the audit evidence we have obtained

Licensed Audit Expert

for selecting and applying appropriate accounting

is sufficient and appropriate to provide a basis for our

Auditor in Charge

policies and making accounting estimates that are

audit opinion.

reasonable in the circumstances.

Opinion

Auditors Responsibility

In our opinion, the consolidated financial statements

Ivano Castagna

Our responsibility is to express an opinion on these

for the year ended 31 December 2011 give a true

Licensed Audit Expert

consolidated financial statements based on our audit.

and fair view of the financial position, the results of

We conducted our audit in accordance with Swiss

operations and the cash flows in accordance with

law and Swiss Auditing Standards as well as Interna-

International Financial Reporting Standards (IFRS)

tional Standards on Auditing. Those standards

and comply with Swiss law.

02 Financial Report

Zurich, 15 March 2012

234 | 235

Kuoni Annual Report # 2011

Finding ourselves
in the depths of space.

fig. 7:

The frozen dunes of Victoria Valley raked by strong downslope winds in the Dry Valley region of Antarctica.

236 | 237

Kuoni Annual Report # 2011

02_05_

Kuoni traveL hoLding Ltd.

02_05_01_

Statement of financial PoSition

Assets CHF
Non-current assets
Investment in subsidiaries
Loans to group companies
Loans to third parties
Other financial assets
Tangible fixed assets
Land and building
Furniture, fixtures and equipment
Total non-current assets
Current assets
Cash and cash equivalents
Securities
Accounts receivable
from third parties
from group companies
Prepaid expenses
Total current assets

Notes

31 Dec 2011

31 Dec 2010

(6)

489 896 212


960 062 190
1 242 340
145 895

32.6
63.7
0.1
0.0

490 709 826


383 769 388
2 365 950
235 895

45.4
35.5
0.2
0.0

(2)
(2)

4 460 000
1
1 455 806 638

0.3
0.0
96.7

4 460 000
1
881 541 060

0.4
0.0
81.5

897 250
20 167 750

0.1
1.2

183 571 987


8 674 450

17.0
0.8

60 807
6 876 543
20 370 454
48 372 804

0.0
0.6
1.4
3.3

205 253
4 721 747
1 380 680
198 554 117

0.0
0.5
0.2
18.5

1 504 179 442

100.0

1 080 095 177

100.0

Notes

31 Dec 2010

31 Dec 2010

(7)

3 998 400

0.3

3 046 400

0.3

(8)
(9)

8 000 000
58 700 077
379 855 161
20 167 750

0.5
3.9
25.2
1.3

8 000 000
61 265 966
111 792 427
8 674 450

0.7
5.7
10.3
0.8

(8)

376 832 250


0

25.1
0.0

366 102 673


10 222 877

33.9
1.0

(7)

1 177 433
11 679 501
860 410 572

0.1
0.8
57.2

1 975 049
21 425 261
592 505 103

0.2
2.0
54.9

239 227 000


200 000 000
150 118 521

15.9
13.3
10.0

239 223 000


200 000 000
0

22.1
18.5

1 422 598
35 276 687
17 724 064
643 768 870

0.1
2.3
1.2
42.8

1 789 190
19 832 581
26 745 303
487 590 074

0.2
1.8
2.5
45.1

1 504 179 442

100.0

1 080 095 177

100.0

(9)

Total assets

Equity and liabilities CHF


Equity
Share capital
Legal reserves
General reserve
Share premium reserve
Reserve from capital contribution
Reserve for treasury shares
Other reserves
Free reserve
Other reserve from capital contribution
Retained earnings
Profit carried forward
Net result
Total equity
Liabilities
Provisions
Bond
Bank loans
Accounts payable
to third parties
to group companies
Accrued expenses
Total liabilities
Total equity and liabilities

02 FinAnciAl RepoRt

238 | 239

K u o n i t R Av e l
holding ltd.

(11)

Kuoni AnnuAl RepoRt # 2011

02_05_02_

02_05_03_

Income Statement

CHF
Income
Financial income
Income from investments in subsidiaries
Other operating income
Total income

Notes

Notes

2011

2010

(3)
(4)

17225475
46563904
721858
64511237

1870485
61906030
1752352
65528867

K u o n i t rav e l
holding ltd.

Introduction

In legal terms, Kuoni shareholders are shareholders of Kuoni Travel


Holding Ltd., Zurich, which controls the subsidiaries listed at the
end of the consolidated accounts. From an economic standpoint,
the shareholders of Kuoni Travel Holding Ltd. are invested in the entire

Expenses
Personnel expense
Administrative expense
Expenses related to investments in subsidiaries
Other expenses
Depreciation
Financial expense
Income taxes
Total expenses

(5)

Net result

13427414
6969962
8738560
7380125
0
15800136
515539
52831736

19479389
9814609
4322420
136400
0
9980343
370445
44103606

11679501

21425261

Group, so the consolidated accounts are of primary importance. The


accounts of Kuoni Travel Holding Ltd. are conform with Swiss company law.

1. Contingent Liabilities, Assets Pledged

CHF
Contingent liabilities
Assets pledged

31 Dec 2011

31 Dec 2010

375929871
0

432960142
0

31 Dec 2011

31 Dec 2010

10157000
914000

9853200
581000

Contingent liabilities consist of sureties and guarantees for consolidated


subsidiaries.

2. Fire Insurance Values

CHF
Buildings
Furniture, fixtures and equipment

3. Financial Income

The financial income derives largely from interest on investments.

4. Income from Investment in Subsidiaries

The income from investment in subsidiaries consists of dividends received


as well as income from the sale of subsidiaries. As in the prior year, all
wholly owned subsidiaries were charged management fees to cover Group
overheads.

02 Financial Report

240 | 241

Kuoni Annual Report # 2011

02_05_03_

K u o n i t rav e l
holding ltd.

>>

Notes

>>

Notes

The share capital is composed as follows:

5. Expenses Related to Investment in Subsidiaries

This item relates to support given to subsidiaries as well as to currency-

CHF

related value adjustments and provisions. Where necessary, losses

1249500 registered shares A CHF 0.20 nominal value


3748500 registered shares B CHF 1.00 nominal value
Total share capital

incurred by subsidiaries were offset by direct subsidies or appropriate


allocations were made to provisions earmarked for that purpose.

6. Investment in Subsidiaries

31 Dec 2011
249900
3748500
3998400

Conditional Capital

We refer to the information on principal subsidiaries and associates on

Conditional capital issuable via the exercise of conversion rights and/

pages 230 to 233 of the Financial Report.

or warrants linked to bonds or similar debt issued by Kuoni Travel


Holding Ltd. or any of its subsidiaries in the domestic or international

CHF
Equity as at 1 January 2009

capital markets and/or via the exercise of options granted to share

7. Equity

Share capital

Legal reserves

Other reserves

Retained earnings

Total equity

3046400

187512385

331804450

72755545

595118780

39000000

24806902
39000000
28631310

24806902
0
28631310
703848
758049
592756269

holders amounts to a maximum of CHF 384000, with a further maximum of CHF 96000 reserved for employee stock option plans.

Net result
Appropriation of retained earnings
Dividends
Sale of treasury shares
Use of treasury shares
Equity as at 31 December 2009
Net result
Appropriation of retained earnings
Dividends
Sale of treasury shares
Use of treasury shares
Equity as at 31 December 2010
Net result
Appropriation of retained earnings1
Dividends
Use of treasury shares
Capital increase
Equity as at 31 December 2011

3046400

527298
628899
188668582

176550
129150
371110150

5000000

29931137
21425261
5000000
22956088

3046400

686793
377468
189732843

139800
75600
376325550

23400310

12000000

11679501
22222877

952000
3998400

10222877
7235672
7811079
266191861
466722988

1176450
12669750
376832250

12856934

Authorised Capital

The authorised capital of Kuoni Travel Holding Ltd. amounts to


CHF 571200 and is valid until 20 April 2013. The use of the authorised
capital is limited to the financing or refinancing of GTA Holdco Limited, GTA Americas LLC, Octopus Travel.com (USA) Limited and Colum-

21425261
0
22956088
826593
453068
592505103

bus Technology Developments Limited which was effected in 2011. The

11679501
0
7235672
8987529
254474111
860410572

20 April 2013.

1 Includes the resolution by the Annual General


Meeting regarding the reassignment of reserves
from Other reserve from capital contribution to
Legal reserve from capital contribution.

Board of Directors may not issue any new shares for any other purpose on
the basis of the authorised capital. The Board of Directors will delete
Article 3ter of the Articles of Incorporation of Kuoni Travel Holding Ltd.
relating to authorised capital upon the expiration of its validity on

Although the authorised capital of Kuoni Travel Holding Ltd. can


virtually no longer be used as a result of the above restriction,
the following information is still provided because it is required to be
included:
In accordance with Article 3ter of the Articles of Incorporation of Kuoni
Travel Holding Ltd., the Board of Directors is authorised to increase
share capital by up to CHF 571200 through the issue of a maximum of
178500 fully-paid-up registered shares A with a nominal value of
CHF 0.20 per share and a maximum of 535500 fully-paid-up registered

02 Financial Report

242 | 243

Kuoni Annual Report # 2011

02_05_03_

K u o n i t rav e l
holding ltd.

>>

Notes

>>

Notes

shares B with a nominal value of CHF 1.00 per share at any time until

The overall amount held in reserves from capital contributions is

20 April 2013. Should it do so, the Board of Directors shall specify the issue

CHF 380 million, which is made up of the various types of contributions

amount, the type of contribution, the date of such issue and the com-

and share premiums less distributions recorded since 1 January 1997.

mencement of dividend entitlement. In the issue of any such shares, the

The Swiss Federal Tax Administration disputes reserves from capital

subscription rights of existing shareholders shall be granted in full. The

contributions of CHF 11.4 million. The increases 2011 have not yet been

Board of Directors may also issue such new registered shares through

assessed by the Federal Tax Administration. The remaining reserves

their firm acquisition by a bank or a third party and subsequent offering

from capital contributions of CHF 103.4 million have been confirmed by

to existing shareholders. The Board of Directors is empowered to deter-

the Federal Tax Administration.

mine the subscription price and the further subscription-right provisions. Should subscription rights not be exercised, the Board of Directors

9. Treasury Shares

may permit these to lapse, place them (and the corresponding shares)
on the market at market rates or use them in any other way in the interests
of the company. The exercising of contractually acquired subscription
rights and the subscription to and acquisition of the new registered

Share plan:
number of
registered
shares B

Book value
CHF 1000

shares, and any subsequent trannsfer thereof, are subject to Article 5 of

Held on 1 January 2010

177797

8890

the Articles of Incorporation of Kuoni Travel Holding Ltd. Every new

Purchase
Sale
Use
Held on 31 December 2010

0
2796
1512
173489

0
140
76
8674

Purchase
Use
Capital increase
Held on 31 December 2011

0
23529
46925
196885

0
1176
12670
20168

share entitles its holder to one vote.

Restricted Transferability Provisions

The Articles of Incorporation stipulate that no more than 3% of total


voting rights may be entered in the share register in the name of any one
shareholder.

Opting out/Opting up

Share Plan

There is no opting-out or opting-up clause in the Articles of Incorporation.


The remaining treasury shares held are reserved for the share purchase

plan of the Group Executive Board and management. The changes to

8. Reserves from capital contributionS

CHF

Legal reserve
from capital
contribution

Other reserve
from capital
contribution

Capital contribution as per 1.1.2011


Reclassification
Distribution
Increase from treasury shares
Increase from Capital increase
Capital contribution as per 31.12.2011

111792427
10222877
7235672
8987529
256088000
379855161

10222877
10222877

02 Financial Report

treasury shares reflect the registered shares B purchased by or issued to


Total

the Board of Directors, the Group Executive Board and management.

122015304
0
7235672
8987529
256088000
379855161

244 | 245

Kuoni Annual Report # 2011

02_05_03_

K u o n i t rav e l
holding ltd.

>>

Notes

10. Principal Shareholders

>>

Notes

No compensation was paid in 2011 to members of the Board of Directors


who had left in the prior period or earlier. Kuoni Travel Holding Ltd.

We are aware of the following principal shareholders:


Kuoni and Hugentobler-Foundation, Zurich
31 December 2011: 1249500 registered shares A = 25.00% of the voting rights
31 December 2010: 952000 registered shares A = 25.00% of the voting rights

and its Group companies had not granted any collateral, loans, advances
or credits to members of the Board of Directors or to persons associated
with them as at 31 December 2011. No options were allocated in the year
under review.

Silchester International Investors Limited, London


31 December 2011: 755062 registered shares B = 15.11% of the voting rights1
31 December 2010: 601100 registered shares B = 15.79% of the voting rights1

1 Voting rights restricted to 3% in accordance with


Article 5 of the Articles of Incorporation of Kuoni
Travel Holding Ltd.
2 As per share register 31.12.2011 last notification
dated 9 December 2009, therefore no further details
on options.
3 As per share register 31.12.2010.

Federation of Migros Cooperatives, Zurich together with


Anlagestiftung der Migros Pensionskasse, Zurich
Pensionskasse der Globus-Unternehmen, Spreitenbach
31 December 2011: 474014 registered shares B = 9.48% of the voting rights12
31 December 2010: 307586 registered shares B = 8.08% of the voting rights13
Pictet Funds S.A., Geneva
31 December 2011: Voting rights less than 3%
31 December 2010: 145769 registered shares B = 3.83% of the voting rights13

11. Bond

Kuoni Travel Holding Ltd. issued a CHF 200 million 3% bond in


October 2009. The bond has a duration of four years and matures on
28 October 2013.

12. Related Parties

Basic cash
compensation
(fixed)

Social security
contributions

Total

CHF 1000

Number of shares

CHF 1000

CHF 1000

CHF 1000

2011
Henning Boysen, Chairman
Wolfgang Beeser
Heinz Karrer
John Lindquist
David Schnell
Annette Schmmel
Raymond D. Webster
Total

276
98
112
84
157
84
84
895

593
214
237
178
297
178
178
1875

210
76
84
63
105
63
63
664

30
9
13
10
0
10
10
82

516
183
209
157
262
157
157
1641

2010
Henning Boysen, Chairman
Wolfgang Beeser
Heinz Karrer
John Lindquist
David Schnell
Annette Schmmel
Raymond D. Webster
Total

276
98
111
84
157
84
84
894

603
217
241
181
302
181
181
1906

210
76
84
63
105
63
63
664

31
9
13
10
0
10
10
83

517
183
208
157
262
157
157
1641

1 The shares were valued at a market value of


CHF 354 (2010: CHF 348). The market value calculated
includes a 16% discount in view of the shares
restricted availability at the time of their assignment.

In accordance with its shareholding, the Kuoni and Hugentobler


Foundation was awarded a dividend payment of CHF 0.5 million gross.

Share-based
compensation
(fixed)1

Compensation paid to the Group Executive Board

13. Compensation Paid

For their service in 2011, the members of the Group Executive Board

Compensation paid to members of the Board of Directors

received the compensation shown in the table below. The aggregate


compensation paid to the members of the Group Executive Board

For their service in 2011, the members of the Board of Directors received

in 2011amounted to CHF 7.8 million. The highest individual

the compensation shown in the table below. The aggregate compensation

total compensation paid in 2011 amounted to CHF 2.1 million.

paid to the members of the Board of Directors in 2011 amounted to


CHF 1.6 million (2010: CHF 1.6 million).

The presentation of the compensation paid to members of the Group


Executive Board was modified in the course of 2011. Whilst in previous
years the compensation stated was that actually paid in the business year

02 Financial Report

246 | 247

Kuoni Annual Report # 2011

02_05_03_

K u o n i t rav e l
holding ltd.

>>

Notes

>>

Notes

concerned, from 2011 onwards the cash-form variable compensation

The compensation includes basic salaries for 2011 and variable bonus pay-

awarded for the year is also included using the accrual method, while the

ments for 2011. Share-based compensation includes the registered

share-based variable compensation is also included based on the shares

shares B allocated for 2011, which will be adjusted and paid out after a

assigned for the achievement of the corresponding targets in the business

three year performance assessment period. The registered shares B

year concerned. Figures for 2010 have been restated accordingly. The

paid on in the 2011 financial year on the basis of the 2008 share-based

change resulted in adjustments to the variable compensation and social

compensation are shown in footnote 3.

security contribution amounts.


2011
CHF 1000
Basic cash compensation (fixed)
Variable compensation:
in cash2
in shares3
Pension scheme contributions4
Social security contributions
Other compensation amounts
Termination benefits
Total
2010
CHF 1000
Basic cash compensation (fixed)
Variable compensation:
in cash6
in shares7
Pension scheme contributions8
Social security contributions
Other compensation amounts
Termination benefits
Total
1 Five members.
2 The members of the Group Executive Board were paid
STI variable compensation in cash form of CHF 1.1 million
in 2011 for the prior-year period. The cash-form variable
compensation paid to CEO Peter Rothwell amounted to
CHF 0.4 million.
3 The members of the Group Executive Board were
assigned 8975 registered shares B in the 2011 business
year. These shares were valued at a market price of
CHF 292. The market value calculated includes a 23%
discount in view of the shares restricted availability at the
time of their assignment and an 8% discount in view of
the diluting effect of the capital increase. The share-based
compensation for 2011 will be awarded at the end of the
three-year reference period in spring 2014. A total of
3758 registered shares B (worth CHF 1.7 million) were
awarded to members of the present Group Executive
Board in 2011 from the share-based compensation
assigned in 2008. (Since CEO Peter Rothwell was not
appointed to the Group Executive Board until 2009,
he was not awarded any such shares in 2011.)

4 One member of the Group Executive Board is


entitled to take early retirement in accordance with the
regulations of the Patronale Frsorgestiftung. The noncontribution-based costs of the corresponding benefits
are included in the pension fund contributions shown.
The corresponding regulations have not been extended to
any new Group Executive Board member since 2005.

Group Executive
Board1

Of which:
Peter Rothwell

3234

900

659
2617
662
638
39
0
7849

232
714
110
114
6
0
2076

Group Executive
Board5

Of which:
Peter Rothwell

3742

900

1261
2047
528
397
28
0
8003

424
507
111
111
6
0
2059

An expenses payment of CHF 0.1 million was paid to a member of the


Group Executive Board who left the company in the prior period.
Otherwise, no payments were made in 2011 to members of the Group
Executive Board who left in the prior period or earlier. Kuoni Travel
Holding Ltd. and its Group companies had not granted any collateral,
loans, advances or credits to any members of the Group Executive
Board or to persons associated with them as at 31 December 2011. No
options were allocated in the year under review.

CHF 228. The market value calculated includes a 16%


discount in view of the shares restricted availability at the
time of their assignment. The share-based compensation
for 2010 will be awarded at the end of the three-year
reference period in spring 2013. No shares were awarded
in 2010. In accordance with the regulations valid at the
time, share-based compensation was awarded in the
following business year. The present compensation system was first adopted for the 2008 business year.

5 Six members. Peter Meier joined the Group Executive


Board on 1 November 2010, so the amounts shown include
the compensation paid to him for a two-month period.
8 Two members of the Group Executive Board are were
The compensation paid to Max E. Katz is included up until entitled to take early retirement in accordance with the
his retirement (on 31 December 2010).
regulations of the Patronale Frsorgestiftung. The noncontribution-based costs of the corresponding benefits
6 The members of the Group Executive Board were paid are included in the pension fund contributions shown.
STI variable compensation in cash form of CHF 1.2 million The corresponding regulations have not been extended to
in 2010 for the previous year. The cash-form variable
any new Group Executive Board member since 2005.
compensation paid to CEO Peter Rothwell amounted to
CHF 0.5 million.
7 The members of the Group Executive Board were
assigned 8964 registered shares B in the 2010 business
year. These shares were valued at a market price of

02 Financial Report

248 | 249

Kuoni Annual Report # 2011

02_05_03_

K u o n i t rav e l
holding ltd.

>>

Notes

>>

14. Share Ownership

Board of Directors and Group ExecUTIVe Board

Registered share B as at 31 December

2011
Board of Directors
Henning Boysen, Chairman
Wolfgang Beeser
Heinz Karrer
John Lindquist
David Schnell
Annette Schmmel
Raymond D. Webster
Group Executive Board
Leif Vase Larsen
Stefan Leser
Rolf Schafroth
Peter Meier
Total
2010
Board of Directors
Henning Boysen, Chairman
Wolfgang Beeser
Heinz Karrer
John Lindquist
David Schnell
Annette Schmmel
Raymond D. Webster
Group Executive Board
Max E. Katz1
Leif Vase Larsen
Stefan Leser
Rolf Schafroth
Peter Meier2
Total
1 Member of the Group Executive Board who left
the company during 2010.

Notes

Number of shares

Other equity instruments

Number of shares

Voting rights

Number of shares

4283
1052
1167
1146
2647
1326
1346

0.09%
0.02%
0.02%
0.02%
0.05%
0.03%
0.03%

0
0
0
0
0
0
0

808
3329
1768
1

0.02%
0.07%
0.04%
0.00%

0
0
0
0

18873

0.38%

Board of Directors (non-executive members only)

Voting rights

no blocking period
blocking period 2011
blocking period 2012
blocking period 2013
blocking period 2014

no blocking period
blocking period 2011
blocking period 2012
blocking period 2013
blocking period 2014

0%

31 Dec 2010

6279
0
2907
1906
1875

3727
1462
2907
1906
0

31 Dec 2011

31 Dec 2010

5757
0
149
0
0

4062
1148
149
0
0

Group Executive Board (current)

Number of shares

31 Dec 2011

15. Risk Management

The Board of Directors and the management use a risk management process under which a report is compiled every six months detailing

3190
838
930
698
2350
1148
848

0.08%
0.02%
0.02%
0.02%
0.06%
0.03%
0.02%

0
0
0
0
0
0
0

3243
505
1150
460
1

0.09%
0.01%
0.03%
0.01%
0.00%

0
0
0
0
0

15361

0.40%

Kuonis present risk exposure and the current status of defined riskreducing actions and activities. The probabilities of such risks occurring
and the anticipated impact of the risk scenarios analysed also form
part of this semi-annual risk management reporting. The Kuoni risk
management process further extends to quarterly reporting
on any newly identified risk scenario or changed risk assessment.

0%

2 Member of the Group Executive Board newly


appointed during 2010.

02 Financial Report

250 | 251

Kuoni Annual Report # 2011

02_05_03_

>>

Notes

02_05_04_
Board of Directors proposal
for the appropriation of retained earnings

Risks are assessed by conducting interviews with management members

CHF

and further key personnel. The associated risk scenarios are then

Profit carried forward


Net result for the year
Retained earnings

developed on the basis of these and further considerations, including


corporate goals and strategies. Kuonis group-wide risk management
covers 17 top Group-level risks and three to five specific top risks for each
of the divisions and the most important business units.
Within the Internal Control System (ICS), the corresponding processes
had those specific risks systematically monitored which are relevant
to the annual accounting process in terms of their incorrect or fraudulent
reporting potential. The key controls derived from these were implemented where they were not already fully in place, and documented.
Procedures have also been defined to monitor and assess the existence
of internal controls.

K u o n i t rav e l
holding ltd.

2011

2010

1177433
11679501
12856934

1975049
21425261
23400310

0
0
0

0
0
0

Allocation to other reserves


Appropriation of profit

11000000
11000000

22222877
22222877

Profit carried forward to new account


Retained earnings

1856934
12856934

1177433
23400310

2011

2010

379855161
11995200

111792427
7235672

749700

476000

10654914
590586
11995200

6759672
0
7235672

Dividends:1
Per registered share A
Per registered share B
Total dividends

1 The dividends on treasury shares B which have


been set aside for the employee stock option plan

and are in our possession on the date of the dividend


payment will be added to retained earnings.

Instead of a dividend, the Board of Directors will propose to the Annual


General Meeting that shareholders receive a withholding tax-free
appropriation from the capital contribution reserve of CHF 0.60 per
registered share A and CHF 3.00 per registered share B.
CHF
Legal reserve from capital contribution
Distribution from legal reserve from capital contribution
Distribution1
Per registered share A CHF 0.60
Per registered share B CHF 3.00
on 3551638 shares entitled to dividend at 31 December 2011
on 196862 treasury shares set aside for the employee share plan at 31 December 2011
Total distribution
1 The company will waive its entitlement to such
payments from the capital contribution reserve for

02 Financial Report

252 | 253

the treasury shares held on the distribution date


which are reserved for use in its employee share

plan. The amount due on these shares will be taken


to the legal reserve from capital contributions.

Kuoni Annual Report # 2011

02_05_05_

Report of the Statutory Auditor

K u o n i t rav e l
holding ltd.

>>

Report of the Statutory Auditor

Report of the Statutory Auditor on the Financial

An audit involves performing procedures to obtain

In accordance with article 728a paragraph 1 item 3 CO

Statements to the General Meeting of Shareholders of

audit evidence about the amounts and disclosures in

and Swiss Auditing Standard 890, we confirm that an

Kuoni Travel Holding Ltd., Zurich.

the financial statements. The procedures selected

internal control system exists, which has been designed

depend on the auditors judgment, including the assess-

for the preparation of financial statements according

As statutory auditor, we have audited the accompany-

ment of the risks of material misstatement of the

to the instructions of the board of directors.

ing financial statements of Kuoni Travel Holding Ltd.,

financial statements, whether due to fraud or error.

presented on pages 239 to 252, which comprise the

In making those risk assessments, the auditor consid-

We further confirm that the proposed appropriation of

statement of financial position, income statement and

ers the internal control system relevant to the entitys

available earnings complies with Swiss law and the

notes for the year ended 31 December 2011.

preparation of the financial statements in order to

companys articles of incorporation. We recommend

design audit procedures that are appropriate in the

that the financial statements submitted to you be

circumstances, but not for the purpose of expressing an

approved.

Board of Directors Responsibility

opinion on the effectiveness of the entitys internal


KPMG AG

The board of directors is responsible for the preparation

control system. An audit also includes evaluating the

of the financial statements in accordance with the

appropriateness of the accounting policies used

requirements of Swiss law and the companys articles

and the reasonableness of accounting estimates made,

of incorporation. This responsibility includes designing,

as well as evaluating the overall presentation

implementing and maintaining an internal control

of the financial statements. We believe that the audit

system relevant to the preparation of financial state-

evidence we have obtained is sufficient and

Licensed Audit Expert

ments that are free from material misstatement,

appropriate to provide a basis for our audit opinion.

Auditor in Charge

Martin Schaad

whether due to fraud or error. The board of directors is


further responsible for selecting and applying appro-

Opinion

priate accounting policies and making accounting


estimates that are reasonable in the circumstances.

Auditors Responsibility

Our responsibility is to express an opinion on these

In our opinion, the financial statements for the year


ended 31 December 2011 comply with Swiss law and the

Ivano Castagna

companys articles of incorporation.

Licensed Audit Expert

Report on Other Legal Requirements

Zurich, 15 March 2012

financial statements based on our audit. We conducted


our audit in accordance with Swiss law and Swiss

We confirm that we meet the legal requirements on

Auditing Standards. Those standards require that we

licensing according to the Auditor Oversight Act (AOA)

plan and perform the audit to obtain reasonable

and independence (article 728 CO and article 11 AOA)

assurance whether the financial statements are free

and that there are no circumstances incompatible with

from material misstatement.

our independence.

02 Financial Report

254 | 255

Kuoni Annual Report # 2011

Travel is yearning
to see the other side.

fig. 8:

A terraced volcanic crater used as a Maori fortress when Europeans first landed in New Zealand.

256 | 257

Kuoni Annual Report # 2011

02_06_

Corporate Governance

02_06_00_

Introduction

C o r p o ra t e
Gover na nce

This Corporate Governance Report describes the principles of management


and control as they apply to the top decision-making bodies of the
Kuoni Group. To enhance transparency and thus comparability with prior
years and other companies, it has been prepared in conformity with
the SIX Corporate Governance Directive of 29 October 2008. Unless otherwise specified, all the information contained in the report is based
on data as at 31 December 2011. The principles and rules of corporate
governance as practised by the Kuoni Group are set out in the companys Articles of Incorporation, its Organisational Regulations and the
regulations of the Board of Directors committees. The Chairman of
the Board of Directors reviews the content and current relevance
of the corporate governance provisions regularly, and proposes any
additions or amendments required to the Board of Directors.
The Kuoni Group meets all the relevant corporate governance provisions.
In particular, the Kuoni Group abides by all existing legislation, the
directives of the SIX Swiss Exchange (and the remarks thereto) and the
Swiss Code of Best Practice for Corporate Governance issued by
economiesuisse, Switzerlands umbrella business association (as updated
in 2007).
This document contains, under Point 02_06_10, the Compensation
Report of the Board of Directors, which also complies with the provisions
of Newsletter 2010/1 of FINMA, the Swiss Confederations financial
markets supervisory authority.

Trust, reliability and security are all


basic prerequisites for a healthy and
successful company. Maintaining
these essential parameters of business
management and control is the key
task of Corporate Governance. Professionally implemented Corporate Governance is essential for any successful
and responsible company that seeks to
serve its shareholders, employees and
external stakeholders.

02 Financial Report

258 | 259

Kuoni Annual Report # 2011

02_06_01_

02_06_02_

Group Structure and Shareholders

02_06_01_01_

Group Structure

Capital Structure

C o r p o ra t e
Gover na nce

Kuoni Travel Holding Ltd. is not aware of any shareholders


agreements.

Kuoni Travel Holding Ltd. is a joint-stock holding company under Swiss


law which has direct or indirect shareholdings in all the companies

Cross-shareholdings

02_06_01_03_

worldwide which belong to the Kuoni Group. The Kuoni Group maintains
lean and efficient management structures at all levels. While the Board

Kuoni Travel Holding Ltd. has no cross-shareholdings, whether purely of a

of Directors devotes itself to overall management, strategic and super

capital nature or involving voting rights.

visory duties, the Group Executive Board is entrusted with operational


management tasks. For a diagram of the operational structure of the

Capital

02_06_02_01_

Kuoni Group, see page 46 of the Market Report.


The registered shares B of Kuoni Travel Holding Ltd., Zurich, which have

For further details and the composition of the amounts of ordinary, autho-

a nominal value of CHF 1., are traded on the Main Standard of the

rised and conditional capital of Kuoni Travel Holding Ltd. at year-

SIX Swiss Exchange (securities number 350 485, ISIN CH 0003504856).

end, please see note 21 on page 207 of the Financial Report. Further infor-

The registered shares A of Kuoni Travel Ltd., Zurich, which have a

mation on the capital structure is available on the company website.

www.kuoni.com/
share-capital-structure

nominal value of CHF 0.20, are not listed. The companys legal domicile is

www.kuoni.com/group

at Neue Hard 7, Zurich. Kuoni Travel Holding Ltd. does not hold any

Kuoni Travel Holding Ltd. conducted a capital increase in 2011. The new

equity interests in any stock-exchange-listed companies.

registered shares were used to finance or refinance the acquisition of

For details of the unlisted companies that belong to the Kuoni Group of

shares in GTA Holdco Limited, GTA Americas LLC, Octopus Travel.com

consolidated companies, see pages 230 to 233 of the Financial Report.

(USA) Limited and Columbus Technology Developments Limited

A detailed description of the global activities of the Kuoni Group is

(collectively known as Gullivers Travel Associates [GTA]). The subscription

available in the Market Report or on the company website.

rights of existing shareholders were granted in full for the new share
issue.

02_06_01_02_

Principal Shareholders

Authorised and Conditional Capital in Particular

02_06_02_02_

The information on principal shareholders of Kuoni Travel Holding Ltd.

www.six-swiss-exchange.com/
shares/companies/
major_shareholders_de.html

www.kuoni.com/major-shareholders

is provided in the table on page 208 of the Financial Report. This shows

The authorised capital of Kuoni Travel Holding Ltd. amounts to

those shareholders holding over 3% of the companys shares, together

CHF 571200 and is valid until 20 April 2013. The use of the authorised

with their current holdings (based on information provided by the same).

capital is limited to the financing or refinancing of GTA Holdco Limited,

The company received one notification of significant shareholders as

GTA Americas LLC, Octopus Travel.com (USA) Limited and Columbus

required under Article 20 of the Swiss Federal Act on Stock Exchanges

Technology Developments Limited which was effected in 2011. The Board

and Securities Trading in the course of 2011. This notification was

of Directors may not issue any new shares for any other purpose on the

published on the SIX Swiss Exchanges notifications platform and on the

basis of the authorised capital. The Board of Directors will delete Article

company website. Kuoni Travel Holding Ltd. is not aware of any

3ter of the Articles of Incorporation of Kuoni Travel Holding Ltd. relating

other shareholders holding more than 3% of the companys shares as of

to authorised capital upon the expiration of its validity on 20 April 2013.

31 December 2011.
02 Financial Report

260 | 261

Kuoni Annual Report # 2011

02_06_02_

C o r p o ra t e
Gover na nce

>>

Capital Structure

>>

Capital Structure

Although the authorised capital of Kuoni Travel Holding Ltd. can vir-

In the case of issues of bonds or similar debt instruments to which con-

tually no longer be used as a result of the above restriction, the following

version and/or warrant rights are attached, the pre-emptive rights of the

information is still provided because it is required to be included in

existing shareholders are excluded. The holders of the said conversion

a companys Annual Report by the corresponding corporate governance

and/or warrant rights are entitled to subscribe for new registered shares

information directive of the SIX Swiss Exchange:

B. The acquisition of registered shares through the exercise of conversion


and/or warrant rights and any subsequent transfer thereof are subject to

In accordance with Article 3ter of the Articles of Incorporation of Kuoni

the transfer and voting restrictions contained in the Articles of Incor

Travel Holding Ltd., the Board of Directors is authorised to increase

poration. The Board of Directors is authorised to restrict or revoke the

share capital by up to CHF 571 200 through the issue of a maximum of

pre-emptive rights of shareholders when such bonds or similar debt

178500 fully-paid-up registered shares A with a nominal value of CHF 0.20

instruments to which conversion and/or warrant rights are attached are

per share and a maximum of 535500 fullly-paid-up registered shares B

issued to finance the acquisition of other companies or parts of compa-

with a nominal value of CHF 1.00 per share at any time until 20 April

nies. If shareholders pre-emptive rights are revoked by a decision of the

2013. Should it do so, the Board of Directors shall specify the issue amount,

Board of Directors, the conversion and/or warrant rights concerned will

the type of contribution, the date of such issue and the commencement

be issued at the prevailing market price, and the new registered shares

of dividend entitlement. In the issue of any such shares, the subscription

will be issued at market rates, with due regard to the current market

rights of existing shareholders shall be granted in full. The Board of

price of the registered shares concerned and/or of comparable financial

Directors may also issue such new registered shares through their firm

instruments with a market price. The exercise period is limited to ten

acquisition by a bank or a third party and subsequent offering to existing

years for conversion rights and to seven years from the date of the bond

shareholders. The Board of Directors is empowered to determine the

issue for warrant rights.

subscription price and the further subscription-right provisions. Should


subscription rights not be exercised, the Board of Directors may permit

Conditional capital of a maximum of CHF 96000 also exists for use in

these to lapse, place them (and the corresponding shares) on the market

exercising subscription or option rights granted to employees of Kuoni

at market rates or use them in any other way in the interests of the

Travel Holding Ltd. or its subsidiaries under one or more employee stock

company. The exercising of contractually-acquired subscription rights

option plans. In such cases, new registered shares B may also be issued

and the subscription to and acquisition of the new registered shares, and

to employees at rates below the current stock market price, and existing

any subsequent trannsfer thereof, are subject to Article 5 of the Articles

shareholders shall have no subscription rights. The terms and conditions

of Incorporation of Kuoni Travel Holding Ltd. Every new share entitles its

for the issue of such shares shall be determined by the Board of Directors.

holder to one vote.

The acquisition of registered shares under such employee stock option


plans and any subsequent transfer thereof are subject to all the relevant

Conditional capital issuable via the exercising of conversion rights

statutory transfer and voting right restrictions.

and/or warrants linked to bonds or similar debt issued by Kuoni Travel


Holding Ltd. or any of its subsidiaries in the domestic or international
capital markets amounts to a maximum of CHF 384000.

02 Financial Report

262 | 263

Kuoni Annual Report # 2011

02_06_02_

C o r p o ra t e
Gover na nce

>>

02_06_02_03_

Capital Structure

Changes in Capital and Share Buyback Programme

>>

Capital Structure

Securities held with an intermediary may only be disposed of or used as


collateral in compliance with the terms of the Swiss Intermediary-Held

For 2009, 2010 and 2011 please refer to note 7 on page 242 of the

Securities Act (Bucheffektengesetz). Uncertificated securities which do

Financial Report.

not qualify as securities held with an intermediary may only be transferred by assignment. Such assignment shall only be valid if Kuoni Travel

02_06_02_04_

Shares and Participation Certificates

Holding Ltd. is notified thereof.

The composition of the share capital of Kuoni Travel Holding Ltd. is

All registered shares are entitled to a dividend. Kuoni Travel Holding Ltd.

shown on page 207 of the Financial Report. At the General Meeting of

waives its entitlement to a dividend on any shares held by the company

Shareholders of Kuoni Travel Holding Ltd. each registered share carries

as treasury shares at the time of the dividend payment. The voting rights

one vote. These voting rights can only be exercised if the shareholder

attached to such shares are suspended by law.

is registered as a shareholder with voting rights in the Kuoni Travel


Holding Ltd. share register. Under the Articles of Incorporation, such

Kuoni Travel Holding Ltd. has not issued any participation certificates.

registration also requires a declaration from the shareholder that they


have acquired the shares concerned in their own name and for their

Dividend-right Certificates

02_06_02_05_

own account.
Kuoni Travel Holding Ltd. has not issued any dividend-right certificates.
The unlisted registered shares A (nominal value CHF 0.20) have a five
times lower nominal value than the listed registered shares B (nominal

Restrictions on Transferability and Nominee Registrations

02_06_02_06_

value CHF 1.00), and thus have five times greater voting rights in terms
of the capital invested.

The following provisions apply to the registered shares A and B of


Kuoni Travel Holding Ltd.

The registered shares of Kuoni Travel Holding Ltd. are uncertificated.


The shareholder may demand at any time that Kuoni Travel Holding Ltd.

The Board of Directors of Kuoni Travel Holding Ltd. will deny the regi-

issue a confirmation in respect of the registered shares which the

stration of an acquirer of registered shares subject to the provisions

shareholder currently owns. The shareholder is not entitled to the prin-

of the last paragraph in this chapter 02.06 as the holder or usufructuary

ting and delivery of certificates for registered shares. Kuoni Travel

of the registered shares with voting rights concerned if, as a result of

Holding Ltd., by contrast, may print and deliver certificates representing

such registration, the acquirer were to acquire or collectively hold,

shares (single or global share certificates or certificates comprising

directly or indirectly, more than 3% of the registered share capital entered

multiple shares) at any time instead of uncertificated securities. Kuoni

in the Commercial Register. For the registered shares exceeding this 3%

Travel Holding Ltd. may also cancel without replacement any

ceiling, the acquirer shall be registered in the share register as the holder

such prev iously issued share certificate or uncertificated security.

or usufructuary of these registered shares without voting rights.

02 Financial Report

264 | 265

Kuoni Annual Report # 2011

02_06_02_

C o r p o ra t e
Gover na nce

>>

Capital Structure

>>

Capital Structure

Legal entities or partnerships that are interrelated through capital

of any such action, the shareholder concerned must be immediately

ownership, voting rights or uniform management or are otherwise

informed.

linked with one another, as well as individual persons or legal entities or


partnerships who act in concern for the purpose of circumventing the

The Board of Directors of Kuoni Travel Holding Ltd. shall specify the

limitation for registration in the share register shall, for the purposes of

particulars and give the necessary directions to ensure compliance

the preceding paragraph, be treated as one single acquirer.

with the preceding provisions. It may also allow exemptions in particular

The limitation for registration in the share register set forth in para-

limitation specified in paragraph 1. The Board of Directors issues regu-

graph 1 of this chapter 02.06 subject to Article 652b, paragraph 3 of the

lations on this. The Board may also delegate its duties.

cases from the regulation regarding nominees and the percentage

Swiss Code of Obligations, also applies to registered shares which


are acquired through the exercising of pre-emptive rights, warrants and

No exemptions from the transferability and nominee registration

conversion rights. The limitation for registration in the share register

restrictions were granted in 2011.

shall not apply to an acquisition of registered shares by succession or


division of estate or under marital property law.

The vested rights of the shareholders entered in the share register on


25 February 1995 (including those of their legal successors by virtue of

Other than set forth above, acquirers of registered shares shall be

the devolution or partition of an estate, a matrimonial property regime

registered in the share register as shareholders with voting rights upon

or a merger with or incorporation into a directly-controlled, wholly-

their application, provided they expressly declare that they have

owned holding company) remain intact. The limitations outlined above

acquired the registered shares in their own name and for their own

shall also not apply to shares which have been or will be acquired by

account.

the shareholders entered in the share register on 25 February 1995 or their


legal successors as defined above through the exercising of subscription,

The Board of Directors of Kuoni Travel Holding Ltd. may register indi-

warrant, option or conversion rights arising from the shares entered in

vidual persons who do not expressly declare that they hold the regis-

the share register on 25 February 1995 and any shares derived therefrom.

tered shares for their own account (nominees) in the share register with
voting rights if the nominee has entered into an agreement with the

Convertible Bonds and Options

02_06_02_07_

Board of Directors with respect to such status and if the nominee is subject to the supervision of a recognised bank or financial market.

Kuoni Travel Holding Ltd. had no convertible bonds or options outstanding at the end of 2011.

The Board of Directors of Kuoni Travel Holding Ltd. may also, after
having heard the person concerned, cancel a persons registration in the
share register as a shareholder or nominee with voting rights with
retroactive effect to the date of registration if such registration was
based on incorrect information from the acquirer, and shall then in such
cases register the shareholder or nominee concerned in the share
register as a shareholder or nominee without voting rights. In the event
02 Financial Report

266 | 267

Kuoni Annual Report # 2011

02_06_03_

C o r p o ra t e
Gover na nce

Board of Directors

02_06_03_01_

>>

Board of Directors

specified in the Articles of Incorporation, the Board of Directors consists

Members of the Board of Directors

of a minimum of five and a maximum of nine members. These members


a) The Board of Directors of Kuoni Travel Holding Ltd. consists of the
following seven members:
Name
Henning Boysen
Wolfgang Beeser
Annette Schmmel
Raymond D. Webster
David Schnell
Heinz Karrer
John Lindquist

each year extending from one Ordinary General Meeting of Shareholders

Born

Nationality

Function

Joined

Current term expires

1946
1942
1965
1946
1947
1959
1950

Danish
German
Swiss/German
British/New Zealander
Swiss
Swiss
British/US-American

Chairman
Deputy Chairman
Member
Member
Member
Member
Member

2003
2007
2004
2006
2002
2007
2007

2012
2013
2013
2013
2012
2014
2014

www.kuoni.com/board-of-directors

are each elected for a term of office that shall not exceed three years, with

The curricula vitae of the individual Board members can be viewed on


page 47 of the Market Report and on the company website.

to the next. The Board of Directors is self-constituting. The Board


appoints its Chairman, one or more Deputy Chairmen (as required) and
a Secretary, the last of whom need not be a Board member.
The organisational regulations and company bylaws also stipulate that
members of the Board of Directors will automatically retire from the
Board on the date of the General Meeting of Shareholders following their
70th birthday.
For information on the initial election and remaining period of office of
each member of the present Board of Directors, please see the table under
02_06_03_01_ above.

b) All the members of the Board of Directors are non-executive independent directors.

c) None of the present Board members sat on the Group Executive

The internal organisation of the Board of Directors is based on the com-

Board of Kuoni Travel Holding Ltd. or on the executive board of any

panys Organisational Regulations, which are issued by the Board

Internal Organisation

group subsidiary of Kuoni Travel Holding Ltd. within the last three years.

of Directors and were last revised in December 2011. The Organisational

Similarly, none of the present Board members maintains material

Regulations may be viewed on the company website.

02_06_03_04_

www.kuoni.com/
corporate-governance

business relationships with Kuoni Travel Holding Ltd. or with any group
subsidiary of Kuoni Travel Holding Ltd.

02_06_03_02_

Other Activities and Functions

Division of Duties within the Board of Directors

Within the Board of Directors, the Chairman has the following duties and
authorities. The Deputy Chairman deputises for the Chairman in his

www.kuoni.com/board-of-directors

Details of other activities and functions of the members of the Board of

absence, and bears the same duties and authorities when doing so. Apart

Directors are available on the company website.

from these duties and authorities, the Chairman and Deputy Chairman
have no particular function within the Board of Directors.

02_06_03_03_

Election and Term of Office

The Chairman is responsible for the formal and organisational leaderEach individual member of the Kuoni Travel Holding Ltd. Board of

ship and management of the Board of Directors. In urgent cases, he

Directors is elected separately by the General Meeting of Shareholders. As

shall also take the necessary decisions and precautions until the matter

02 Financial Report

268 | 269

Kuoni Annual Report # 2011

02_06_03_

C o r p o ra t e
Gover na nce

>>

Board of Directors

>>

Board of Directors

can be decided upon by the Board of Directors. The Chairman further

The prime duty of the Audit Committee is to support the Board of

monitors the observance of legal requirements, the Articles of Incorporation,

Directors in its monitoring and superv ision of the companys accounting

regulations and directives by the companys management bodies,

and financial management. Its main tasks therein comprise:

and submits the requisite motions, requests and proposals to the Board of

providing independent and objective monitoring of the integrity

Directors. The Chairman also ensures, in collaboration with the Group

of the companys consolidated reporting process, internal financial

Executive Board, that information is provided in good time on all major

control systems and accounting and their compliance with the

aspects of the company which are of relevance to the monitoring of its

relevant legal provisions;

activities and to the corporate decision-making process. Further details

assessing the independence and performance of both the external

of the duties and authorities of the Chairman of the Board are provided

and the internal auditors;

in Section 2.5 of the Organisational Regulations.

ensuring open communications between the Group Executive Board,

the Board of Directors and the internal and external auditors.

Board Committees

The Audit Committee further reviews:


The Board of Directors has formed the following two committees to assist

the guidelines imposed by the Group Executive Board to ensure

it in its work: the Audit Committee and the Nomination and Compensa-

efficient financial reporting processes and controls;

tion Committee.

periodic discussions of the current state of affairs with the Group

Executive Board and the internal auditors and separately

with the external auditors.

Each of these committees has written regulations specifying its tasks and
responsibilities.

The Audit Committee also performs the following main tasks which have
The Audit Committee currently consists of David Schnell (chairman),

been assigned to it by the Board of Directors:

Wolfgang Beeser and John Lindquist . The Audit Committee has assured

reviewing the Annual Report, the annual and interim financial

itself that the majority of its members have the requisite expertise in

statements, the nine-month Business Update and the auditing

accounting and financial management. The Audit Committee reports to

reports and management letters of the Kuoni Group and

the Board of Directors on its conclusions, and the Board of Directors

Kuoni Travel Holding Ltd. and submitting proposals to the Board

decides upon appropriate action.

of Directors;

ensuring compliance with set accounting standards within

the Group;

approving the integrated audit plans of the external auditors

as well as the internal auditors;

assessing and discussing the external auditors audit reports;

assessing the performance, independence and compensation

02 Financial Report

of the external auditors;

selecting the auditing company to be proposed to the General

Meeting of Shareholders for election as the companys statutory

270 | 271

Kuoni Annual Report # 2011

02_06_03_

C o r p o ra t e
Gover na nce

>>

Board of Directors

>>

Board of Directors

auditor and submitting the corresponding proposal to

furthering the development of management as a whole. The Nomination

the Board of Directors;

and Compensation Committee enlisted the services of an external

periodically reviewing internal processes and procedures;

specialist, Hostettler Kramarsch & Partner, Zurich, in 2011 to assist it in

periodically reviewing the suitability and effectiveness

its decisions and recommendations. The Nomination and Compensation

of the internal auditors;

Committee reports to the Board of Directors on its conclusions, and the

submitting proposals to the Board of Directors on entries into

Board of Directors decides upon appropriate action on the basis thereof.

the share register for shareholders with voting rights

In this connection, please also see the Compensation Report (note

in connection with Article 5 of the Articles of Incorporation;

02_06_10 below).

periodically reviewing the guidelines issued on ad-hoc

publicity and the prevention of insider dealing;

submitting proposals to the Board of Directors on notifying

Committees

the courts in the event of overindebtedness;

periodically reviewing all internal guidelines and directives

The Board of Directors and its committees meet as often as business

that are not reviewed by any other committee.

requires, but a minimum of six times a year for the Board of Directors,

Working Methods of the Board of Directors and its

four times a year for the Audit Committee and three times a year for
The Audit Committee has its own authority on the following matters:

the Nomination and Compensation Committee. The Board of Directors

ensuring the auditors fulfilment of the legal requirements

met nine times for regular meetings in 2011 (average length: 8 hours)

on licensing as stipulated in the Auditor Oversight Act (AOA)

and also held one extraordinary meeting of 2.5 hours duration. The Audit

and independence (Swiss Code of Obligations, Article 728);

Committee held four regular meetings (average length: 6.5 hours);

maintaining the share register;

and the Nomination and Compensation Committee held three regular

periodically reviewing the organisation of the internal auditor;

meetings (average length: 3.5 hours) and three telephone conferences


(average length: 45 minutes).

reviewing strategic tax planning issues;

Remunerating external auditors for subsidiaries;

appointing and dismissing the Head of Internal Audit.

The Board of Directors meets at the invitation of its Chairman. A Board


meeting may also be demanded by any of its members or by the CEO.

The Nomination and Compensation Committee is composed of Heinz


Karrer (chairman), Annette Schmmel and Raymond D. Webster.

The agenda of the Board of Directors meetings is set by the Chairman.

The main tasks of the Nomination and Compensation Committee are to

Any member of the Board of Directors may table an agenda item.

monitor the organisation, qualification, performance and remuneration

The members of the Board of Directors each receive documentation prior

of management and the Board of Directors and to review the terms and

to the meetings which enables them to prepare for discussion of the

conditions of any employee share purchase plan. Other tasks performed

agenda items concerned.

by the committee are assessing the performance of the CEO and the
Group Executive Board as a team, arranging succession plans for the

Board meetings are chaired by the Chairman. A Board meeting shall be

members of the Board of Directors and the Group Executive Board,

quorate provided the majority of Board members are present. The Board

seeking and proposing new members for the Board of Directors and

votes and passes resolutions by a simple majority. In the event of a tie, the

02 Financial Report

272 | 273

Kuoni Annual Report # 2011

02_06_03_

C o r p o ra t e
Gover na nce

>>

Board of Directors

>>

Board of Directors

meeting chair has the casting vote. In addition to its members, meetings

Minutes are kept of all Board committee meetings. Committee resolutions

of the Board of Directors are generally attended by the CEO and the Chief

may also be passed by circular written communication, provided no

Financial Officer (CFO), and by further members of the Group Executive

member demands that a meeting be convened.

Board as and when required. These attendees have only an advisory


function, along with the right to table motions or agenda items. Persons

An annual self-assessment procedure has been established to permanent-

who are not members of the Group Executive Board may also attend as

ly monitor and if possible enhance the performance of the Board of

specialists at the chairs invitation.

Directors. This evaluates how efficiently the Board and its committees are
performing their functions and meeting their responsibilities, whether

Minutes are kept of all meeting deliberations. Board resolutions may

each Board member participates actively in Board discussions and

also be passed by written approval (letter, fax, email or other written

makes contributions based on independent judgement, and whether an

form), again by a simple majority, provided all Board members have had

environment of open discussions is maintained at Board meetings.

the opportunity to cast their vote and provided no member demands


oral discussion of the matter concerned.

Board committee meetings are held at the invitation of the chair. A Board

The Board of Directors is the companys supreme managing body and is

committee meeting may also be demanded by any committee member

responsible for supervising the management of the company and its

or the CEO (and an Audit Committee meeting may additionally be de-

business. It deals with all matters that are not entrusted to another body

manded by the Chairman of the Board, the CFO or the internal or

of the company under the law, the companys Articles of Incorporation

external auditors). The agenda of Board committee meetings is compiled

or its Organisational and Business Regulations.

Areas of Responsibility

02_06_03_05_

by the chair. Any committee member may table an agenda item.


With regard to the non-transferability and inalienability of duties of
The committee members each receive documentation prior to the meet-

the Board of Directors, reference is made to Article 716a of the Swiss Code

ings which enables them to prepare for discussion of the agenda items

of Obligations and Article 20 of the Articles of Incorporation.

concerned.
The Board of Directors may also, subject to the relevant legal provisions,
Board committee meetings are chaired by the committee chair. A committee

delegate all or part of its duties to manage and represent the company to

meeting shall be quorate (and empowered to submit proposals to the Board

one or more of its members (as managing directors) or to third parties

of Directors) provided the majority of committee members are present.

by issuing the appropriate organisational regulations. In this connection,

The meeting votes and passes resolutions by a simple majority. In the event

the Board of Directors has issued a set of Organisational Regulations

of a tie, the meeting chair has the casting vote. In addition to its members,

which specify (under Section 2.3) its further duties and authorities and

meetings of the Audit Committee are generally attended by the Chairman of

list (under Section 4.3) those business items which require its approval.

the Board, the CEO, the CFO, the Head of Internal Audit and a representative of the external auditors. In addition to its members, meetings of the
Nomination and Compensation Committee are generally attended by the
Chairman of the Board, the CEO and the Chief Human Resources Officer.
02 Financial Report

274 | 275

Kuoni Annual Report # 2011

02_06_03_

C o r p o ra t e
Gover na nce

>>

www.kuoni.com/
corporate-governance

Board of Directors

>>

Board of Directors

The Board of Directors of Kuoni Travel Holding Ltd. manages the

ensuring that all legal requirements are observed and that

subsidiaries under its legal and/or economic control as a corporate group.

all applicable legal provisions are familiar to and observed by

The responsibility for the resolutions taken by the Board of Directors

the companys employees (Corporate Compliance; the basic

therefore extends not only to the company in the legal sense but also to all

parameters here are laid down in the companys Code of Conduct);

the subsidiaries described above by virtue of the Boards authority to

the internal organisation and the internal control system;

issue instructions to the representatives of the company in their respective

hiring and dismissing employees;

governing bodies. Within the overall parameters imposed by the

monitoring the performance of external service providers;

law and the Articles of Incorporation, the Board of Directors delegates

preparing meetings of the Board of Directors together

the management of the company to the Group Executive Board by

with its Chairman and presenting the necessary documents;

means of the relevant Organisational Regulations, which can be viewed

reporting to the Board of Directors.

on the company website.


The Group Executive Board is empowered to pass resolutions on all
The Group Executive Board has the duty and the authority to manage

business assigned to it. The Group Executive Board may submit

the Kuoni Groups business operations. It is responsible in particular for:

such business to the Board of Directors for approval. The provisions on

planning, managing and monitoring the companys profitability,

which items of business must be submitted to the Board of Directors

risk positions, balance sheet structure and liquidity within

for approval are laid down in the Organisational Regulations (Article

the guideline parameters laid down by the Board of Directors;

4.3 thereof).

devising the business strategy, multi-year business plan and budget

for the following business year, and submitting these to the

Board of Directors;

the Group Executive Board

preparing and submitting proposals to the Board of Directors,

particularly in relation to financing policy, investment policy, asset

The Management Information System (MIS) of the Kuoni Group is

management policy, risk management and sourcing and trading

structured as follows. The financial statements of the individual subsidi-

policy, and in other areas as and where required (the Group

aries are prepared on a monthly, quarterly, semi-annual and annual

Executive Board shall also ensure the subsequent detailed adoption

basis. These figures are aggregated per division and consolidated for the

of such policies and the observance of the principles laid down in

Group. The figures are compared with the previous year and the budget.

connection therewith, and shall report regularly to the Board

The attainability of the budget, which is based on the first year of a

of Directors thereon);

three-year mid-term plan for each subsidiary, is assessed on the basis of

Information and Controlling Instruments for Supervising

compiling the annual and half-year accounts and the Nine-Month

quarterly reporting and forecasts. The heads of the divisions submit

Business Update and providing the additional information

monthly written reports on the progress of business to the Group

required in connection therewith, and submitting these to the

Executive Board and the Board of Directors. These reports are discussed

Board of Directors.

with the Group Executive Board at the Board of Directors meetings,

02_06_03_06_

as are the implementation and observance of Board resolutions and the


companys liquidity levels.

02 Financial Report

276 | 277

Kuoni Annual Report # 2011

02_06_03_

C o r p o ra t e
Gover na nce

>>

Board of Directors

>>

Board of Directors

Any member of the Board of Directors may demand to be informed about

Internal Audit complements the controlling mechanisms available to the

the companys affairs. The CEO is responsible for informing the Board

Board of Directors and reports directly to the Boards Audit Committee.

of Directors about the current course of business and important business

Internal Audit supports the Group Executive Board in special projects as

transactions occurring in the company and in its subsidiaries. The

requested by the CEO or other members of the Group Executive Board,

CEO reports to the Chairman of the Board at regular intervals. The CEO

and in other matters. Internal Audits main task is to conduct an

must also inform the Chairman immediately of any unusual events,

independent assessment of internal control systems and their effectiveness

and the Chairman will in turn pass such information on to the members

with regard to potential risks. The reports prepared by Internal Audit

of the Board.

regarding the audits carried out are submitted to the members of the
Audit Committee, the Chairman of the Board, the CEO, the CFO, the Head

To ensure the direct information of the full Board of Directors, the CEO

of IT, the Head of Corporate Controlling, the Group General Counsel

regularly attends meetings of the Board of Directors and its committees

and the external auditor. Each report also contains comments by the Group

unless the Board or its committees need to conduct a closed meeting

Executive Board regarding the key findings of the audits conducted in

session. The CFO also attends all meetings of the Audit Committee and is

addition to suggested improvements.

further present for most agenda items at full Board meetings. The
further members of the Group Executive Board attend Board meetings for
particular agenda items as and when required. The Chairman of
the Board also receives copies of the minutes of all meetings of the Group
Executive Board.
The companys risk management function provides an established risk
model for identifying, managing and monitoring strategic and operational risks throughout the Kuoni Group. The groupwide risk profile
consists of the risks identified in the Groups main country organisations
(adopting the bottom-up approach) and groupwide strategic risks
(adopting the top-down approach). The present risk profile and the
current status of risk-reducing measures resolved are regularly monitored
and are reported twice-yearly to the Board of Directors.

02 Financial Report

278 | 279

Kuoni Annual Report # 2011

02_06_04_

02_06_05_

the grouP executive Board

02_06_04_01_

membeRs oF the gRoup executive boARd

Compensation, shares and Loans

CoRpoRAte
GoveR nA nCe

Details of the compensation, shares and loans of members of the Board


of Directors and the Group Executive Board are provided in the Compen-

For details of the members of the Group Executive Board, please see

sation Report (note 02_06_10).

page 51 of the Market Report.

02_06_04_02_
www.kuoni.com/executive-board

otheR Activities And Functions

Details of other activities and any further functions of Group Executive


Board members are provided on the company website.
No member of the Group Executive Board holds any official function or
political office.

02_06_04_03_

mAnAgement contRActs

Kuoni Travel Holding Ltd. and its Group subsidiaries have not concluded
any management contracts with any third parties.

02 FinAnciAl RepoRt

280 | 281

Kuoni AnnuAl RepoRt # 2011

02_06_06_

Shareholders Participation Rights

02_06_06_01_

Restriction and Representation of Voting Rights

C o r p o ra t e
Gover na nce

>>

Shareholders Participation Rights

the devolution or partition of an estate, a matrimonial property regime


or merger with or incorporation into a directly-controlled, wholly-owned

Each share entitles its holder to one vote at the Annual General Meeting.

holding company) remain intact. Neither do the limitations outlined

When exercising the right to vote, no shareholder shall be able to vote,

above apply to shares which have been or will be acquired by the share-

directly or indirectly, with more than 3% of the registered share capital

holders entered in the share register on 25 February 1995 or their legal

entered in the Commercial Register; this 3% includes their own shares

successors as defined above through the exercise of subscription, warrant,

and shares represented by proxy. This limitation on voting rights does not

option or conversion rights arising from the shares entered in the share

apply to corporate proxies (Article 689c of the Swiss Code of Obligations),

register on 25 February 1995 and any shares derived therefrom.

independent proxies (Article 689c of the Swiss Code of Obligations),


depositaries (Article 689d of the Swiss Code of Obligations) or sharehold-

Statutory Quorums

02_06_06_02_

ers registered in the share register as shareholders with voting rights


for more than 3% of the registered share capital entered in the Commer-

As a general principle, the General Meeting of Shareholders votes and

cial Register.

passes resolutions by an absolute majority of the votes in favour and votes


against cast (excluding abstentions). The following resolutions of the

Legal entities or partnerships that are interrelated through capital

General Meeting of Shareholders require at least two-thirds of the votes

ownership, voting rights or uniform management or that are otherwise

represented and an absolute majority of the nominal value of the shares

linked with one another, as well as individual persons or legal entities

represented to be passed:

or partnerships acting in concert for the purpose of circumventing the

amendments to the Articles of Incorporation, including any changes

limitation on registration in the share register are regarded as one single

to the companys purpose;

shareholder for the purposes of the preceding paragraph.

the creation of shares with privileged voting rights;

limiting or relaxing the transferability of registered shares;

The Board of Directors of Kuoni Travel Holding Ltd. issues procedural

an authorised or conditional capital increase;

rules regarding participation in and representation at the General

a capital increase through the conversion of capital surplus,

Meeting of Shareholders. A shareholder may only be represented at the

in return for a non-cash contribution or for the purposes

General Meeting of Shareholders by their legal representative, another

of acquiring property and granting special rights;

shareholder with the right to vote, the corporate proxy, the indepen-

limiting or revoking pre-emptive rights;

dent proxy or a depositary. All the shares held by a shareholder may be

changes to the location of the companys registered office;

represented by one person only.

the dissolution of the company through liquidation or by merger.

The members of the Board of Directors of Kuoni Travel Holding Ltd.

Convening the General Meeting of Shareholders

02_06_06_03_

who are present at the Annual General Meeting of Shareholders decide


whether powers of attorney are to be recognised.

The Ordinary General Meeting of Shareholders is convened in accordance


with the relevant legal requirements. It is generally convened in April,

The vested rights of the shareholders entered in the share register on

and must be held within six months of the end of the financial year to

25 February 1995 (including those of their legal successors by virtue of

which it relates. An Extraordinary General Meeting of Shareholders

02 Financial Report

282 | 283

Kuoni Annual Report # 2011

02_06_06_

02_06_07_

>>

Shareholders Participation Rights

Changes of Control and Defence Measures

can be convened if the Board of Directors or the external auditors deem

Duty to Make an Offer

C o r p o ra t e
Gover na nce

02_06_07_01_

this appropriate. The convention of an Extraordinary General Meeting of


Shareholders may also be demanded by shareholders representing at

There are no opting-up or opting-out clauses in the Articles of Incor

least 10% of share capital, provided this is done jointly and in writing

poration of Kuoni Travel Holding Ltd. In view of this, any person owning

stating the items to be discussed and the corresponding proposals or,

more than one-third of the voting rights of Kuoni Travel Holding Ltd.

in the event of elections, the names of the candidates proposed.

must make an offer for all the companys listed shares.

Every registered shareholder receives a personal invitation to attend,

Change-of-Control Clauses

02_06_07_02_

a detailed meeting agenda and notes on the various agenda items at least
www.kuoni.com/
annual-general-meeting

20 days in advance of the meeting concerned. The agenda will also be

The following change-of-control clauses apply:

published in various Swiss newspapers and on the website.

02_06_06_04_

Board of Directors

Agenda

There are no change-of-control clauses in any agreements or plans to the


Shareholders representing shares with a nominal value of CHF 20 000 or

benefit of members of the Board of Directors.

more can demand that an item be included on the agenda of a General

www.kuoni.com/
annual-general-meeting

Meeting of Shareholders up to 45 days before the meeting concerned. This

request must be submitted in writing, and must also specify the motions

Senior Management

Members of the Group Executive Board and groupwide

to be put to the meeting. The submission deadline is published on the


website.

In the event of a change of control, the current three-year vesting period


under the Long-Term Incentive shall end immediately and the corre-

02_06_06_05_

Entry in the Share Register

sponding shares shall be assigned. Apart from this, there are no changeof-control clauses in any agreements or plans to the benefit of members

All shareholders entered in the share register as shareholders with voting

of the Group Executive Board or groupwide Senior Management.

rights up to three working days before a General Meeting of Shareholders


may vote at the meeting concerned. Shareholders who sell their shares

Bondholders

before the General Meeting of Shareholders takes place are no longer


entitled to vote. Shareholders who buy additional shares or sell part of

In the event of a change of control, bondholders are entitled to demand

their shareholding after their meeting admission card has been issued

the premature repayment of their bond amount.

must exchange the card sent to them at the information desk on arriving
at the meeting concerned.

Syndicated credit facility lenders

In the event of a change of control, the banks participating in the syndicated credit facility are entitled to demand the premature repayment
of any current loan amounts thereunder and/or to terminate the facility.
02 Financial Report

284 | 285

Kuoni Annual Report # 2011

02_06_08_

02_06_09_

Auditors

02_06_08_01_

Duration of Mandate and Term of Office of the

Auditor-in-Charge

Information Policy

C o r p o ra t e
Gover na nce

Kuoni Travel Holding Ltd. maintains an open and transparent communication policy towards its shareholders, current and potential investors,
financial analysts, customers, business partners and other stakeholder

The auditing mandates issued to KPMG Ltd., Zurich have a duration of

groups. Kuoni Travel Holding Ltd. provides prompt and comprehensive

one year each. KPMG Ltd., Zurich, has been the auditor of Kuoni Travel

information on the Groups business activities, while paying due and

Holding Ltd. since 1970. The auditor-in-charge, Martin Schaad, has

full regard to all the applicable provisions and directives of the SIX Swiss

been in office since April 2009. The auditor-in-charge is changed at least

Exchange. In its endeavours to present details of its business development

every seven years.

to its stakeholders, Kuoni Travel Holding Ltd. also makes forward-looking statements. These statements are assessments by the management

02_06_08_02_

Audit Fee

about the present and future situation and performance of the company
as they appear at the time the statement is made.

KPMG charged the Kuoni Group fees amounting to CHF 2.7 million during
the 2011 financial year for services in connection with the auditing of the
annual accounts of Kuoni Travel Holding Ltd. and its Group subsidiaries,
as well as the consolidated financial statements of the Kuoni Group. An
additional CHF 0.8 million was charged by other audit companies.

02_06_08_03_

Additional Fees

KPMG also charged the Kuoni Group fees totalling CHF 0.7 million for

Key Dates for 2012


Financial year close:
2011 annual results published:
Annual Report published:
General Meeting of Shareholders:
Dividend paid to banks:
Analysts' Day
First half-year close:
Half-year results announced:
Nine-month business update announced:

31 December 2011
20 March
20 March
17 April
24 April (ex-day: 19 April)
30 May
30 June
23 August
08 November

additional services, i.e. tax consulting and accountancy compliance.


No fees were charged by other audit companies for any 0ther services.

02_06_08_04_

Supervisory and Controlling Instruments with Regard to

the External Auditors

www.kuoni.com/financial-calendar

The latest key dates are always available on the website.


Kuoni Travel Holding Ltd. publishes a comprehensive Annual Report
each year informing its shareholders about business developments and
the companys annual results. The Annual Report can be ordered by

Each year, the Audit Committee of the Board of Directors evaluates the

any shareholder via the invitation to the Ordinary General Meeting of

performance, remuneration and independence of the statutory auditor and

Shareholders. Of particular importance are the Corporate Governance

proposes an external auditor to the Board of Directors who will be put

report integrated into the Annual Report and the Financial Report on the

forward for election at the General Meeting of Shareholders. The Audit

past business year. All Kuonis consolidated financial statements are

Committee also annually examines the scope of external auditing, the

compiled in compliance with International Financial Reporting Stand-

auditing plans and the relevant processes, and discusses the audit results

ards (IFRS).

with the external auditors. Representatives of the external auditors


also regularly attend Audit Committee meetings, and attended all four
such meetings in 2011.
02 Financial Report

286 | 287

Kuoni Annual Report # 2011

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Information Policy

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Information Policy

The reports on first-half results and the nine-month business update are

These activities are conducted with a focus on recently announced

published and dist ributed in the same way as the companys media

developments or financial results, and in full compliance with

releases. These reports contain unaudited financial results which are

SIX Exchange Regulations Directive on Ad-hoc Publicity.

compiled in compliance with IFRS guidelines.


The presentations for financial analysts and investors are regularly
Kuoni Travel Holding Ltd. occasionally publishes information on cur-

archived on the Kuoni Group website. These presentations are not

rent developments within its various business units or on other Group

constantly updated, but document long-term developments within

activit ies. In compliance with the relevant listing regulations of the

the company.

SIX Swiss Exchange, these communications are always issued simultaneously to a broad circle of recipients.

Details of the relevant contacts and the Kuoni Investor Relations mailbox

www.kuoni.com/
investor-presentations

www.kuoni.com/contact

are available on the website.


www.kuoni.com/archive

www.kuoni.com/group-news

An archive containing the companys Annual Reports, half-year reports,


nine-month business updates and further information and presentations

Interested parties may also add their name to the Investor Relations

is available on the website. Kuoni Travel Holding Ltd. also maintains an

e-mail list on the website.

archive of all its published ad-hoc disclosures and other communications


on the website. All this information is publicly available. Interested
parties may also register on the website to receive ad-hoc disclosures and
other published communications by e-mail.
The information contained in these reports and communications is
considered correct at the time of its publication. Kuoni Travel Holding
Ltd. does not update media releases issued in the past in the light of

Subject
Share capital and capital structure
Information on Kuonis shares
Board of Directors
Group Executive Board
Organisational Regulations
Corporate Governance (including
Compensation Report)
Key dates

www.kuoni.com/group-news

Link
www.kuoni.com/share-capital-structure
www.kuoni.com/share
www.kuoni.com/board-of-directors
www.kuoni.com/executive-board
www.kuoni.com/corporate-governance
www.kuoni.com/corporate-governance
www.kuoni.com/financial-calendar

subsequent market or business developments.


As part of its investor relations programme, Kuoni Travel Holding Ltd.
organises:

the presentation of its annual results;

conference calls around the publication of its half-year results,

the nine-month business update or other information;

meetings with investors and analysts, either individually or

in groups at roadshows in key financial centres;

analysts and investors events on specific topics or issues;

presentations at brokers events.

02 Financial Report

288 | 289

Kuoni Annual Report # 2011

Curiosity expands
our reach.

fig. 9:

The estuary of the Colorado River in Mexico has tides of almost ten metres during full moon.

290 | 291

Kuoni Annual Report # 2011

02_06_10_

Compensation Report

02_06_10_01_

compensation report

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Compensation Report

Since the members of the Board of Directors of Kuoni Travel Holding Ltd.
are independent and are not members of the Group Executive Board,

In view of the fact that Kuoni Travel Holding Ltd. is listed on the SIX

the details of the compensation of the Board of Directors and of the

Swiss Exchange, and in line with the desire of its Board of Directors and

Group Executive Board are presented in two separate sections.

Group Executive Board to maintain a transparent compensation


policy, the present Compensation Report contains all the information

The Kuoni Group strives constantly to be a first-choice employer which is

required under the Swiss Code of Obligations (Article 663b bis and

able to recruit, retain and motivate the best and most professional

Article 663c, Paragraph 3) and Section 5.1 of the Directive on Information

employees around the world who are of the calibre that is essential to

Relating to Corporate Governance issued by SIX Exchange Regulation.

Kuonis continued success.

In its corporate governance provisions and its reporting thereon, the


Kuoni Group also observes the Swiss Code of Best Practice for Corporate

The Role of the Nomination and Compensation Committee

02_06_10_02_

Governance issued by economiesuisse, the umbrella association for


Swiss business and industry. The Kuoni Groups financial statements are

The Kuoni Groups Nomination and Compensation Committee (NCC)

compiled in accordance with International Financial Reporting

is appointed by the Board of Directors and consists solely of independent

Standards (IFRS). The directives issued by each of these bodies and

non-executive members. The present members of the NCC are Heinz

authorities show slight variations in their presentation and inter

Karrer (chairman), Annette Schmmel and Raymond Webster. Board

pretation provisions.

Chairman Henning Boysen also attended all the NCCs meetings in 2011.

The Compensation Report below complies with the provisions of Section

The main duty of the NCC is to monitor the organisation, qualification,

5.1 of the Directive on Information Relating to Corporate Governance

performance and remuneration of executive management and the Board

issued by the SIX Swiss Exchange, and also pays due regard to Annex 1 of

of Directors and to review the terms and conditions of any employee

the Swiss Code of Best Practice for Corporate Governance issued by

share purchase plan. Other tasks performed by the NCC include assess-

economiesuisse. The Report presents the compensation system used by the

ing the performance of the CEO and the further individual members of

Kuoni Group. The compensation paid in accordance with the afore

the Group Executive Board, arranging succession plans for the members

mentioned provisions of the Swiss Code of Obligations is shown and

of the Board of Directors and the Group Executive Board, submitting

commented on in note 02_06_10_06_ (pages 304 to 307).

proposals for and recruiting new members of the Board of Directors and
furthering the development of management as a whole.

The present Compensation Report is intended to inform the public about


the compensation paid by the Kuoni Group. This Compensation Report

The NCC submits to the Board of Directors generally once a year in

will be presented to the 2012 Ordinary General Meeting of Shareholders

December its proposal for the structure and the amounts of compensa-

both for approval as an integral part of the 2011 Annual Report and for

tion to be paid to the members of the Board of Directors and the salaries

its separate consultative voting approval.

of the members of the Group Executive Board (including the relevant


bonus programmes), for the Board of Directors to confirm or modify in
accordance with the NCCs recommendations. It may also enlist the
services of external consultants when doing so. Compensation in this

02 Financial Report

292 | 293

Kuoni Annual Report # 2011

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Compensation Report

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Compensation Report

sense includes salaries and all further benefits received, including (but

(IPE) system, which grades each function via a position evaluation

not limited to) all shares and similar securities, pension fund payments,

based on a series of criteria: impact (size of organisation, influencing

discretionary and other bonuses, insurances, company vehicles, leaving

scope, financial contribution), communication (need for the position

settlements and further termination agreement benefits.

to communicate, organisational framework), innovation (requirement to


identify, improve or further develop processes, services or products)

The NCC ensures that all executive personnel are compensated fairly,

and knowledge (knowledge required to achieve the positions goals and

appropriately, competitively, in line with their performance and in

make a value contribution, team size and team expertise required,

accordance with the strategic goals of the Kuoni Group. To do so, the NCC

and geographical context in which knowledge must be used).

devises proposals which are submitted to the Board of Directors for


decision, monitors the implementation of employee-related corporate

iii) the future development of the Kuoni Group in performance and

guidelines and upholds the norms of good business management

profitability terms (based on the corresponding Kuoni Group three-year

practice in the long-term interests of the companys shareholders.

planning, in which external market developments are also projected).

The Board of Directors took decisions on a number of major issues in 2011

The members of the Group Executive Board have no right of participation

following corresponding proposals from the NCC. These included:

or consultation in the determining of their compensation (including


any payments due under the relevant bonus programmes). The CEO is,

a more extensive presentation of variable salary components in the

however, generally present when the compensations proposed for

2011 Compensation Report with due regard to the accrual principle,

Group Executive Board members are discussed, and submits correspond-

to ensure maximum transparency;

ing proposals (except for his own compensation amounts).

the application to internal shareholders (subject to the long-term

The decision on the structure and amount of compensation for the members

incentive plan) of the same dilution criteria and considerations

of the Board of Directors is taken by the Board of Directors and laid down

arising from the acquisition of GTA and the associated capital

in a set of regulations. In any vote on the compensation to be paid to a

increase that were applied to external shareholders.

particular member of the Board of Directors, however, the Board member


concerned must observe the relevant general withdrawal/abstention

When determining the compensation levels (including basic salary,

procedures.

incentives and fringe benefits) to be set and the service agreements to


be concluded, the NCC pays particular regard to:

The NCC establishes and maintains a philosophy of payment for services


and performance rendered that is in line with overall company strategy,

i) external comparisons with international corporations of similar

and submits this to the Board of Directors for approval.

size from all business and industry sectors;


ii) internal comparisons with the salaries and further benefits awarded
to management personnel elsewhere throughout the Kuoni Group.
Here the Kuoni Group uses Mercers International Position Evaluation
02 Financial Report

294 | 295

Kuoni Annual Report # 2011

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02_06_10_03_

Compensation Report

compensation for the board of directors

>>

Compensation Report

Compensation for the Group Executive Board

The system applied for the compensation of the Board of Directors is

The compensation guidelines of the Kuoni Group are an integral part

based on the total compensation approach and comprises:

of Kuonis personnel policy, and are intended to motivate and retain

02_06_10_04_

existing employees, to recruit talented new personnel and to help and


encourage all employees to deliver a performance that is of a continu-

a basic salary

long-term incentives (shares) and

ously high level. The Kuoni Groups compensation system is based on the

fringe benefits.

total compensation principle and comprises:

The members of the Board of Directors receive the fixed compensation

a basic salary

proposed by the NCC (generally in December) and approved by the full

short-term incentives (personal performance in relation to quality/

Board whose amount per Board role is specified in the Compensation

quantity goals, and financial results in relation to budget)

Elements of the Board of Directors of Kuoni Travel Holding regulations

long-term incentives (value-adding performance and further

of 18 April 2007. These regulations were devised at Kuonis own discre-

corporate development in relation to the objectives set) and

tion on the basis of the Ethos Survey entitled Executive Remuneration in

fringe benefits.

the 100 Largest Companies listed in Switzerland of November 2006


and a report on compensation practices for chairmen of the board of

The short-term and long-term incentives offered are closely linked to the

directors produced by the CC&T company in 2002. The fixed compen

companys financial development and success. This establishes and

sation awarded to members of the Board of Directors has been confirmed

maintains a commonality of interests between the companys sharehold-

(instead of adjusted) annually since 2007.

ers and its employees.

50% of the total compensation paid to members of the Board of Directors

The Kuoni Group maintains various forms of pension and other retire-

is paid in cash form; the remaining 50% is paid in shares. The issue

ment benefit schemes for employees entitled thereto. These schemes

price of the shares concerned is redefined each year and amounts to the

cover a large majority of the Kuoni Groups personnel. For further details,

average of all closing prices for the last ten trading days of the month

please refer to pages 191 to 193 in the Financial Report.

before the Ordinary General Meeting of Shareholders. The shares are


awarded on the trading day following the day of dividend distribution

It is the duty of the Group Executive Board and of Human Resources

after the Ordinary General Meeting of Shareholders, and are subject to

Management to ensure that Kuoni attracts, retains and further develops

a blocking period of three years.

the best executive talent in the tourism industry within the Kuoni Group.

The members of the Board of Directors are entitled to travel concessions


which are similar in scope to those granted to Kuoni Group employees.

02 Financial Report

296 | 297

Kuoni Annual Report # 2011

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Compensation Report

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Compensation Report

A Management Performance Plan (MPP) compensation system has been

On the basis of the first few years of experience with the above, the Board

in place since 2008 for Group Executive Board members and senior

of Directors resolved in August 2010, following a corresponding proposal

management (Senior Vice Presidents and Vice Presidents) groupwide.

from the NCC, that from 2011 onwards a) as a threshold provision, a

Under the MPP, the members of the Group Executive Board will receive

long-term incentive can only be paid if no cumulative EBIT is incurred in

compensation for the 2011 business year which is divided into a fixed

the reference period concerned, and b) the performance factor should

(roughly 40%) and a variable (roughly 60%) performance-based

range, based on actual performance achieved, between a floor of 0.25 and

component. Around one-third of this variable component takes the form

a cap of 3. The basis of this financial performance assessment is the

of a short-term incentive, while the remaining two-thirds take the form

value-based management performance indicator known as the Kuoni

of a long-term incentive.

Economic Profit or KEP.

The short-term incentive is based in equal amounts on the achievement

For clarification purposes, we would like to illustrate here the challenge

of annual financial targets (the 2011 Kuoni Group EBIT compared to

of achieving a Factor 1 result under the above provisions.

budgeted projections, with a possible target achievement of between 0%


and 200%) and personal targets (with a possible target achievement

The KEP target is based primarily on two considerations. First, the

of between 0% and 120%), with payment in April 2012 in cash form. The

KEP target reflects a risk-adjusted expected return (8.5% WACC) that is

personal targets here should always serve to help ensure the overall

based on market and not book value. Secondly, as a profit value,

further development of the business unit concerned. The personal targets

the KEP incorporates not only operating costs but also the costs of capital

for Group Executive Board members are proposed by the CEO, discussed

employed. As such, it represents a far more challenging target than

on the NCC and approved by the Board of Directors. The personal targets

the usual profit criteria.

for the CEO are proposed by the Chairman of the Board of Directors.
These personal targets generally fall into four categories strategy, trans-

The maximum factor of 3 will only be applied if investor expectations

formation, people and stakeholders with their relative weightings

(8.5% WACC) have been clearly exceeded in return terms.

varying according to the function held.


Kuonis long-term incentive (LTI) is designed to be self-financing, i.e. any
The long-term incentive, which uses a Performance Share Plan to assign

additional costs incurred through the LTI are already included in the

the persons entitled thereto a certain number of Kuoni shares at the

KEP result. Kuoni strives to enable its management to participate in the

beginning of each plan period (business year), is based by contrast on the

companys value-adding achievements in accordance with the pay for

value-adding performance achieved over a three-year period extending

performance principle. The LTI plan provides such participation in the

from 2011 to 2013. The number of shares assigned at the beginning of the

event of both over- and underperformance. In accordance with this, a

reference period will be multiplied by a performance factor whose

factor of zero will be applied if the EBIT result falls below a specified

value will depend on the subsequent performance achieved in the period

level. Based on the entitlement of international plan participants and the

concerned.

past history of Kuonis long-term incentive systems, the current long-term


incentive plan has a maximum factor of 3, to ensure that significant
overperformance over a longer period can continue to be rewarded
appropriately.

02 Financial Report

298 | 299

Kuoni Annual Report # 2011

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Compensation Report

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Compensation Report

The calibration of the KEP target for the long-term incentive is essentially

Contractual obligations dating from 2005 exist in respect of one member

based on an investors perspective which considers not only Kuoni but

of the Group Executive Board. Under these obligations, should their

also comparable companies with similar business portfolios. This process

employment be terminated by the employer, the Group Executive Board

also pays due regard to the growth expectations, risk profiles, investment

member concerned will receive six monthly salaries plus one monthly

levels and profitability levels that are typical of the industry. All such

salary for every year of their age after age 47 until age 56. Apart from this,

considerations flow directly into the Kuoni KEP target-setting process.

no member of the Group Executive Board or the Board of Directors


is entitled to any benefits in the event of a change of control or to any

The KEP target-setting process assumes that investors expect a risk-

leaving settlement, because no such agreements have been concluded

adjusted return on their investment which is based on market value

since 2005.

(and not book value), and translates such expected returns over a
three-year period into operational KEP targets. The KEP target for the

No share options have been issued since 2005.

Kuoni Group for the 20112013 period was devised with the assistance
of independent external consultants Hostettler Kramarsch & Partner,

The Kuoni Groups compensation programmes have been designed to

Zurich, based on shareholders expectations (external perspective,

ensure that they are comparable and competitive with those of a

8.5% WACC).

benchmark group of other world-class corporations of similar rank and


renown which are also constantly on the lookout for management

The shares concerned will be awarded in April 2014, based on actual

talent worldwide.

performance in the corresponding reference period. Once awarded,


the shares will not be subject to any further vesting period.

The total compensation (including basic salary, incentives and fringe


benefits) paid to members of the Group Executive Board is deter-

The LTI plan is intended to provide the companys top management with

mined with due regard to a market comparison conducted by Mercer

a further incentive to contribute to the success and business health of

Frankfurt management consultants. This comparison considers

the Kuoni Group, and thereby enhance the Groups market value, to the

international corporations of comparable size from all industry sectors.

benefit of its shareholders. The plan should also enable the companys

Mercer Deutschland had one further mandate at Kuoni Travel

top management to participate in the Kuoni Groups long-term success.

Holding Ltd. in 2011: a position evaluation and salary benchmarking


for various vice presidents and senior vice presidents of the

In the event of a change of control of the company, the present compen

Kuoni Group, which was commissioned as part of the corporate

sation system excludes on principle the conclusion of any generous

restructuring and the post-merger integration of GTA.

golden parachute agreements. Apart from any possible legal obligations,


the system also excludes any kind of severance payments in the event
of termination of employment.

02 Financial Report

300 | 301

Kuoni Annual Report # 2011

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Compensation Report

Value-Based Management

>>

Compensation Report

A KEP target which reflects investors expectations of a return on their


invested capital that is appropriate to their investment risk is set as

The value-based management approach at the Kuoni Group is founded

part of the annual strategic planning process. Based on Kuonis enter-

on the economic profit concept. This aims to keep top management

prise value, a KEP target is set for the Group as a whole whose achieve-

aligned as closely as possible to creating long-term added value on behalf

ment will provide the companys shareholders with a return on their

of the Groups owners. The central management performance indicator

investment that is at least as high as Kuonis capital costs (8.5% WACC).

here is known as Kuoni Economic Profit or KEP. KEP is calculated from


net operating profit after tax (NOPAT) less the average cost of capital

The KEP and ROIC for the Kuoni Group are calculated every quarter and

invested in operations. The Group-level weighted average cost of capital

compared with the corresponding budgeted and prior-year figures as

(WACC) has been set at a sustainable rate of 8.5%, which was calculated

an integral part of the reporting process. The development of KEP over

by IFBC AG, Zurich. IFBC AG, Zurich had one further mandate at

time (known as delta KEP) and changes in the difference between ROIC

Kuoni Travel Holding Ltd. in 2011: a purchase price allocation for the

and WACC reveal the value added by the Group as a whole and its

acquisition of Gullivers Travel Associates.

divisions. Linking these results to the operational value drivers of


turnover growth, cost efficiency and capital efficiency also reveals how

Specific WACC rates that accommodate economic and currency consid-

such value was achieved.

erations have also been set for the Groups individual divisions and
markets. NOPAT divided by the average capital invested in operations

The presentation of KEP and ROIC trends for the Kuoni Group is a key

gives return on invested capital (ROIC), which is compared with the

part of Kuonis external communications with financial analysts and

WACC for the Kuoni Group and/or its constituent units to determine

investors. This clearly and bindingly illustrates the Kuoni Groups focus

value-adding performance.

on sustainable value creation to the outside world.

Kuoni has integrated this value-based management approach founded on

The provision of a long-term incentive plan based on the absolute

the KEP performance indicator into its entire management process, to

achievement of KEP targets provides senior management with an

ensure that it has a sustainable value-adding effect. To this end, planning

attractive incentive that is firmly aligned to ensuring sustainable

and budgeting, performance measurement, internal and external

value creation within the Kuoni Group.

communications and the long-term incentive (LTI) compensation for


senior management staff have all been consistently adapted to the
sustainable value-adding philosophy.

02 Financial Report

302 | 303

Kuoni Annual Report # 2011

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Compensation Report

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Compensation Report

Basic cash
compensation
(fixed)

Compensation

Compensation to members of the Board of Directors

For their service in 2011, the members of the Board of Directors received
the compensation shown in the table below.
The aggregate compensation paid to the members of the Board of
Directors in 2011 amounted to CHF 1.6 million (2010: CHF 1.6 million).
No compensation was paid in 2011 to any members of the Board of
Directors who had left in the prior period or earlier. Kuoni Travel Holding
Ltd. and its Group companies had not granted any collateral, loans,
advances or credits to members of the Board of Directors or to persons
associated with them as at 31 December 2011. No options were allocated in the year under review.

Share-based
compensation
(fixed)1

Social security
contributions

Total

CHF 1000

Number of shares

CHF 1000

CHF 1000

CHF 1000

2011
Henning Boysen, Chairman
Wolfgang Beeser
Heinz Karrer
John Lindquist
David Schnell
Annette Schmmel
Raymond D. Webster
Total

276
98
112
84
157
84
84
895

593
214
237
178
297
178
178
1875

210
76
84
63
105
63
63
664

30
9
13
10
0
10
10
82

516
183
209
157
262
157
157
1641

2010
Henning Boysen, Chairman
Wolfgang Beeser
Heinz Karrer
John Lindquist
David Schnell
Annette Schmmel
Raymond D. Webster
Total

276
98
111
84
157
84
84
894

603
217
241
181
302
181
181
1906

210
76
84
63
105
63
63
664

31
9
13
10
0
10
10
83

517
183
208
157
262
157
157
1641

1 The shares were valued at a market value of


CHF 354 (2010: CHF 348). The market value calculated
includes a 16% discount in view of the shares
restricted availability at the time of their assignment.

Compensation to the Group Executive Board

The NCCs general authorities for determining the compensation to


be paid to the members of the Group Executive Board are specified
on page 293. The aggregate compensation to the members of the Group
Executive Board in 2011 amounted to CHF 7.8 million. The highest
individual total compensation in 2011 amounted to CHF 2.1 million.
The presentation of the compensation paid to members of the Group
Executive Board was modified in the course of 2011. Whilst in previous
years the compensation stated was that actually paid in the business year
concerned, from 2011 onwards the cash-form variable compensation
awarded for the year is also included using the accrual method, while the
share-based variable compensation is also included based on the shares
02 Financial Report

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Kuoni Annual Report # 2011

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Compensation Report

The compensation shown includes basic salaries for 2011 and the variable

year concerned. Figures for 2010 have been restated accordingly. The

compensation payable for the 2011 business year. Share-based compen

change resulted in adjustments to the variable compensation and social

sation includes the registered shares B assigned for 2011, which will be

security contribution amounts.

modified and awarded based on actual performance in a subsequent

Basic cash compensation (fixed)


Variable compensation:
in cash2
in shares3
Pension scheme contributions4
Social security contributions
Other compensation amounts
Termination benefits
Total
2010
CHF 1000
Basic cash compensation (fixed)
Variable compensation:
in cash6
in shares7
Pension scheme contributions8
Social security contributions
Other compensation amounts
Termination benefits
Total

2 The members of the Group Executive Board were


paid STI variable compensation in cash form of
CHF 1.1 million in 2011 for the prior-year period.
The cash-form variable compensation paid to CEO
Peter Rothwell amounted to CHF 0.4 million.
3 The members of the Group Executive Board were
assigned 8 975 registered shares B in the 2011
business year. These shares were valued at a market
price of CHF 292. The market value calculated
includes a 23% discount in view of the shares
restricted availability at the time of their assignment
and an 8% discount in view of the diluting effect
of the capital increase. The share-based compen
sation for 2011 will be awarded at the end of the
three-year reference period in spring 2014. A total
of 3 758 registered shares B (worth CHF 1.7 million)
were awarded to members of the present Group
Executive Board in 2011 from the share-based
compensation assigned in 2008. (Since CEO Peter
Rothwell was not appointed to the Group Executive
Board until 2009, he was not awarded any such
shares in 2011.)

Compensation Report

assigned for the achievement of the corresponding targets in the business

2011
CHF 1000

1 Five members.

>>

4 One member of the Group Executive Board is


entitled to take early retirement in accordance with
the regulations of the Patronale Frsorgestiftung.
The non-contribution-based costs of the corres
ponding benefits are included in the pension fund
contributions shown. The corresponding regulations have not been extended to any new Group
Executive Board member since 2005.
5 Six members. Peter Meier joined the Group
Executive Board on 1 November 2010, so the
amounts shown include the compensation paid to
him for a two-month period. The compensation
paid to Max E. Katz is included up until his retirement
(on 31 December 2010).
6 The members of the Group Executive Board
were paid STI variable compensation in cash form
of CHF 1.2 million in 2010 for the previous year.
The cash-form variable compensation paid to CEO
Peter Rothwell amounted to CHF 0.5 million.

02 Financial Report

Group Executive
Board1

Of which:
Peter Rothwell

3234

900

659
2617
662
638
39
0
7849

232
714
110
114
6
0
2076

Group Executive
Board5

Of which:
Peter Rothwell

3742

900

1261
2047
528
397
28
0
8003

424
507
111
111
6
0
2059

three-year reference period. The registered shares B awarded in 2011 from


the share-based compensation for 2008 are presented in footnote 3.
Compensation of CHF 0.1 million was paid in 2011 to one member of the
Group Executive Board who had left in the prior period. Apart from this,
no compensation was paid to any Group Executive Board member who
had left in the prior period or earlier. Neither Kuoni Travel Holding Ltd.
nor its Group companies had granted any collateral, loans, advances
or credits to any member of the Group Executive Board or to any persons
associated with them as at 31 December 2011. No options were allocated in the year under review.

7 The members of the Group Executive Board were


assigned 8 964 registered shares B in the 2010
business year. These shares were valued at a market
price of CHF 228. The market value calculated includes
a 16% discount in view of the shares restricted
availability at the time of their assignment. The
share-based compensation for 2010 will be awarded
at the end of the three-year reference period in
spring 2013. No shares were awarded in 2010. In
accordance with the regulations valid at the time,
share-based compensation was awarded in the
following business year. The present compensation
system was first adopted for the 2008 business year.
8 Two members of the Group Executive Board were
entitled to take early retirement in accordance with
the regulations of the Patronale Frsorgestiftung.
The non-contribution-based costs of the corres
ponding benefits are included in the pension fund
contributions shown. The corresponding regulations have not been extended to any new Group
Executive Board member since 2005.

306 | 307

Kuoni Annual Report # 2011

02_06_10_

C o r p o ra t e
Gover na nce

>>

02_06_10_07_

Compensation Report

>>

Share OwnerShip

Board of Directors and Group Executive Board

Registered share B as at 31 December

2011
Board of Directors
Henning Boysen, Chairman
Wolfgang Beeser
Heinz Karrer
John Lindquist
David Schnell
Annette Schmmel
Raymond D. Webster
Group Executive Board
Leif Vase Larsen
Stefan Leser
Rolf Schafroth
Peter Meier
Total
2010
Board of Directors
Henning Boysen, Chairman
Wolfgang Beeser
Heinz Karrer
John Lindquist
David Schnell
Annette Schmmel
Raymond D. Webster
Group Executive Board
Max E. Katz1
Leif Vase Larsen
Stefan Leser
Rolf Schafroth
Peter Meier2
Total
1 Member of the Group Executive Board who left
the company during 2010.

Compensation Report

Number of shares

Other equity instruments

Number of shares

Voting rights

Number of shares

4283
1052
1167
1146
2647
1326
1346

0.09%
0.02%
0.02%
0.02%
0.05%
0.03%
0.03%

0
0
0
0
0
0
0

808
3329
1768
1

0.02%
0.07%
0.04%
0.00%

0
0
0
0

18873

0.38%

3190
838
930
698
2350
1148
848

0.08%
0.02%
0.02%
0.02%
0.06%
0.03%
0.02%

0
0
0
0
0
0
0

3243
505
1150
460
1

0.09%
0.01%
0.03%
0.01%
0.00%

0
0
0
0
0

15361

0.40%

Board of Directors (non-exectuve members only)

Voting rights

no blocking period
blocking period 2011
blocking period 2012
blocking period 2013
blocking period 2014

31 Dec 2011

31 Dec 2010

6279
0
2907
1906
1875

3727
1462
2907
1906
0

31 Dec 2011

31 Dec 2010

5757
0
149
0
0

4062
1148
149
0
0

Group Exectuve Board (current)

Number of shares
no blocking period
blocking period 2011
blocking period 2012
blocking period 2013
blocking period 2014

0%

0%

2 Member of the Group Executive Board newly


appointed during 2010.

02 Financial Report

308 | 309

Kuoni Annual Report # 2011

Getting in touch
with the earth again.

fig. 10:

Lower part of Talimu River in China forming the border of the Taklimakan dune field.

310 | 311

Kuoni Annual Report # 2011

02_07_

Appendix

02_07_01_

agenda 2012

C o r p o ra t e
Gover na nce

The Financial Report and the information on Corporate

Governance constitute an integral part of the Kuoni Group


Annual Report.

This Annual Report is also available in German.

The German original shall prevail.

Der Geschftsbericht ist auch in deutscher Sprache erhltlich.

Massgebend ist der deutsche Originaltext.

Agenda 2012

The Kuoni Group will be providing information on its further

business performance on the following dates:

Annual General Meeting

photography notes

17 April 2012

Half-year-results 23 August 2012

In this chapter, the pictures are again


taken from the archive of George Steinmetz. The multi-award winning photographer studied geophysics at Stanford University. He began his career
by hitchhiking across Africa for over
two years. Since then, he has travelled
to unexplored terrain on all seven
continents for his photo reportages.
In more recent years, he has specialised
in aerial photography with the aid of
lightweight aircraft. Using motorised
paragliders, he gains access to territories that remain closed to all other
means of transport.

Nine-month Business Update

In the second chapter of the Kuoni Annual Report 2011, the birds eye panoramas are primarily dedicated to uninhabited natural landscapes. They
are classic places of longing situated
amidst untouched nature, which have
embodied the aesthetic feeling of the
sublime since the landscape painting
of Romanticism.

laurence.bienz@kuoni.com

08 November 2012

Investor Relations

Laurence Bienz
Kuoni Travel Holding Ltd.
Neue Hard 7, CH-8010 Zurich
tel +41 (0)44 277 45 29
fax +41 (0)44 277 40 31

02 Financial Report

312 | 313

Kuoni Annual Report # 2011

02 Financial Report

06_03_

Colophon

Publisher:

Kuoni Travel Holding Ltd.

Corporate Communications

Neue Hard 7, CH-8010 Zurich

tel +41(0) 44 277 43 63

fax +41(0) 44 272 39 91

www.kuoni.com
Twitter: www.twitter.com/kuonigroup
Facebook: www.facebook.com/KuoniGroup

Idea, Development, Creative Direction:

Wolfgang Scheppe

Concept:

Wolfgang Scheppe, Remo Masala

Authors:

01: Peter Brun, Heidi Elsenhuber, Stephanie Keller,

Matthias Leisinger, Simon Marquard, Wolfgang Scheppe

02: Laurence Bienz, Alexander Brochier, Ren Hsler, Michael Mller

03: Alexander Brochier, Elisenda Casellas, Oliver Fischer,

Wolfgang Scheppe, Silvana Ulber

04: Wolfgang Scheppe

05: Wolfgang Scheppe

Illustrations:

Sara Codutti

Graphic Design:

Andrea Buran, Claudine Iselin, Marie Letz

Translations:

Paul Day, Fiona Elliott, Ishbel Flett, Barbara Hau, James Knight,

Catherine Schelbert, Julia Thorson

Project Manager:

Simon Marquard

Production:

Helga Sterr

Photography:

George Steinmetz, Anonymous (Collection W.S.)

Typesetting:

Andrea Buran, Claudine Iselin, Marie Letz

Programming:

Mario Klingemann

06 appendix