Club Mediterranée: First-Half 2014 Estimated Results

Regulatory News:

Club Mediterranée (Paris:CU):

• Business volume Villages (estimates¹): -1.1% reported (+2.2% at constant exchange rates); growth in the Americas and in Asia offset a flat business in Europe-Africa which was affected by a marked slowdown in France.
• Operating Income Villages (estimates¹): €51 million versus €49 million in the first-half of 2013, reflecting varying performances from one geographical region to another.
• Net income (estimates¹): €15 million versus €18 million in the first-half of 2013.
• Cumulative Summer 2014 bookings² at April 26: -2.3% impacted by a strong downturn in the Europe-Africa region, in particular over the last eight weeks at -17.3%.

I. Winter 2014 bookings

As of April 26, 2014, cumulative Winter 2014 bookings, expressed in total business volume at constant exchange rates, were up 2.7% compared with Winter 2013. These bookings totaled close to 100% of the Winter season which ends on April 30, 2014.

Performances varied by geographic region:

• Growth in Europe-Africa was limited to +0.4%. This region dealt with a strong downturn in its two main markets: the French market was down near 9%³ in business volume on the individual segment despite the Parisian Easter holidays falling during the Winter season, and the Belgian market recorded a 11%⁴ drop in the number of customers.
  These markets are affected by the economic crisis and by the current disaffection of destinations like Egypt. In this context, Club Med continues to outperform the market, but suffered from declining bookings which are down 1.5% in France and down 9.5% in Belgium according to SETO and ABTO criteria;

• The Americas posted growth of 7.3% and Asia grew 9.5% supported by favourable economic environment in these parts of the world.
  In the Americas, the increase in bookings was mainly driven by good business momentum in the United States and Brazil. In Asia, bookings were driven by the recovery in sales in Japan and in Australia, and by momentum in China.

Overall, Winter 2014 capacity is up 2.0% following the opening of 4 Trident village of Guilin in China.

II. Winter 2014 estimates⁵

• Business Volume Villages (corresponding to total sales regardless of village operating structure) reached €775 million versus €758 million for the first-half of 2013, up 2.2% at constant exchange rates. Business was down 1.1% in reported data.
• Revenue Villages (at constant exchange rates) reached €756 million, up 2.8% compared with the first-half of 2013.
• EBITDA Villages was up 3.3% at €84 million versus €81 million for the first-half of 2013. The EBITDA Villages margin (as a proportion of revenue) was 11.1% versus 10.7% for the first-half of 2013.
• Operating Income Villages totaled €51 million, up 2.6% compared with Winter 2013. This increase was nonetheless impacted by a €6 million decrease for the Europe-Africa region versus Winter 2013 due to the weaker performance of the French market. Profitability continued to improve in the Americas and Asia regions.
• Net income reached €15 million versus €18 million for Winter 2013.
• Free cash flow totaled €23 million and net debt was decreased to €97 million taking into account the conversion of 1,097,719 OCEANEs at April 25, 2014.

III. Outlook for Summer 2014

Cumulative bookings as of April 26, 2014, stated in terms of business volume at constant exchange rates, were down 2.3% compared with Summer 2013, for a capacity adjusted by -3.8%.

In Europe-Africa, bookings were down 4.7% for the season, impacted by the closure of two managed 4 Trident short-haul villages (Belek in Turkey and Sinaï Bay in Egypt) as well as the negative effect of the Easter holidays falling during the Winter season.

Bookings in the Americas and Asia regions increased:

• In the Americas, bookings were up 15.2%, mainly driven by the sustained momentum of sales in North America;
• In Asia, bookings rose by 5.3% with a key contribution from fast-growing markets, especially China.

Over the last eight weeks, bookings were down 13.1%, impacted by a 17.3% drop in the bookings of the Europe-Africa region.

As a reminder, close to 60% of the total Summer bookings had been recorded at the same period last year.

Based on bookings to date and despite the expected growth in profitability in the Americas and Asia regions, the trend seen in Europe-Africa, in particular over the past eight weeks, would result in a decrease in the Summer 2014 of the Operating Income Villages compared with Summer 2013.

Finally, the 3.8% decrease in capacity includes a -9% adjustment in Europe-Africa due to i) the exit of the 3 Trident Villages of El Gouna (Egypt) and Hammamet (Tunisia), ii) the temporary closure of the managed Sinaï Bay Village (Egypt) due to the current geopolitical situation and iii) the non-reopening of the Village of Belek (Turkey) due to its owner's unresolved financial difficulties.

In Asia, capacity increased by an impressive 13%, taking into account the opening of the 5-Trident area in the village of Dong’ao Island, the third village in China, and the opening of the village of Guilin for the whole Summer season. Capacity remains unchanged in the Americas.

The Company notes that the financial data contained in this press release is in line with the information provided as part of the ongoing public tender offer. It being noted however that the 2014 outlook outlined above is slightly lower than the variant of the business plan taking into account the continuing deterioration of the European tourism market, and in particular in France, as referred to in the "note en réponse” (stamp no. 13-363 dated July 15, 2013).

IV. Shareholding

• Threshold crossings since February 21, 2014

Polygon Global Partners LLP declared that it had exceeded the legal threshold of 5% of capital on April 7, 2014. At this date, it declared that it owned 1,610,000 CDF⁶, or 5% of capital and 4,48% of the voting rights.

Moneta Asset Management declared that it had exceeded the legal threshold of 5% of capital on March 24, 2014. At this date, it declared that it owned 1,612,772 shares, i.e. 5.06% of capital and 4.53% of voting rights.

On April 24, 2014, UBS AG declared that it had fallen below the 5% threshold of the voting rights. At this date, it declared that it owned 1,756,233 shares, representing 5.46% of capital and 4.89% of voting rights.

V. Update on the Public Tender Offer

The Paris Court of Appeal will deliver its judgment on April 29, 2014 on the appeal regarding the French Autorité des Marchés Financiers’ ("AMF”) decision relating to the compliance of the Public Tender Offer initiated by Axa Private Equity (Axa Capital/Ardian) and Fosun, in cooperation with Management.

VI. Publication of 2014 audited interim results

The audited consolidated financial statements for the first-half of 2014 will be approved by the Board of Directors of Club Méditerranée on May 15^th, 2014 and will be published on May 16 ^th, 2014, before the market opening.

¹ These estimates have not been verified by the Auditors. The six-month financial statements will be approved by the Board of Directors on May 15, 2014 following the Audit Committee's review on the same day.
² Total business volume Villages at constant exchange rates.
³ SETO data at end-March as business volume.
⁴ ABTO data at end-March as number of customers.
⁵ These estimates have not been verified by the Auditors. The six-month financial statements will be approved by the Board of Directors on May 15, 2014 following the Audit Committee's review on the same day.
⁶ An agreement between two parties to exchange the difference between the opening price and closing price of a contract.