Pierre et Vacances SA · EURONEXT:VAC
Pierre et Vacances SA — Pierre & Vacances-Center Parcs Group — Investor Presentation (January 2020)
33 slides from Pierre et Vacances SA's investor presentation, Jan 27, 2020
Slide 1: “Change Up”
“CHANGE UP” 27 JANUARY 2020
Slide 2: Contents
CONTENTS I “CHANGE UP” OVERVIEW 2 PILLAR #1: GROWTH 3 PILLAR #2 : EFFICIENCY 4 PILLAR #3 : VALUES 5 EXPECTED RESULTS 6 CONCLUSION // 2 //
Slide 3: “Change Up” Overview
I “CHANGE UP” OVERVIEW // 3 //
Slide 4: “Change Up” Overview
“CHANGE UP” OVERVIEW TARGETS EXECUTION SEPTEMBER 2019 Start of work on “Change Up” 3 PILLARS Approval of “Change up” by Gérard 27 JANUARY Brémond & the Group Board of 2020 Directors 28 JANUARY 2020 Announcement of “Change up” & 3 YEARS start of reorganisation project >150 m€ to implement the plan 20
Slide 5: A project built by the Group’s management
A PROJECT BUILT BY THE GROUP’S MANAGEMENT Work conducted in project mode New skills in strategic ~40 managers for the various parts functions (purchases, External assistance involved in the construction…) reporting from recognised PREPARATION construction of of the plan over a period of four directl
Slide 6: Pillar #1: Growth
2 PILLAR #1: GROWTH // 6 //
Slide 7: Strategic priorities
STRATEGIC PRIORITIES → A thorough performance review of the current asset portfolios OPTIMISATION OF → Premiumisation of the Center Parcs and Pierre & Vacances brands CURRENT → Continued innovation and digitalisation to drive revenue growth OPERATIONS → A tailor-made property development model 2 REG
Slide 8: Performance review of the asset portfolios
PERFORMANCE REVIEW OF THE ASSET PORTFOLIOS Pierre & Vacances : → The roll-out of an annual performance evaluation of the asset portfolio based on precise criteria: → Target profitability levels (“minimum EBIT margin of 5% of revenue”), → Minimum stock levels, OPTIMISE THE → Acceptable rent… → Identi
Slide 9: Development of the business lines 1/2
DEVELOPMENT OF THE BUSINESS LINES 1/2 ESPAGNE → Strategy to expand in northern → Development strategy focusing on → Strategy to develop residences and a Europe mountain regions focus on 3-4* hotels with renovation → Strategy to premiumise the → A premiumisation strategy based on → 1,800 additional a
Slide 10: Development of the business lines 2/2
DEVELOPMENT OF THE BUSINESS LINES 2/2 → The main target markets are the → High-growth development strategy UK, Ireland and Germany focused on C2C and campsites → Increasing franchise agreements → Transfer of Pierre & Vacances residences to Maeva.com → 109 projects to sign by 2024 management contract
Slide 11: Premiumisation 1/2
PREMIUMISATION 1/2 Modernising the Center Parcs offer with a premiumisation of the Domains, enhanced customer experiences and digitalisation of the customer journey → Premiumisation of existing Domains : premium assets to rise from 48% in 2019 to 61% in 2025 (+27%) → Increase in occupancy rates to r
Slide 12: Premiumisation 2/2
PREMIUMISATION 2/2 Transforming the apartment rental offer into a holiday experience offer, to bolster our leadership position in holidays for “Framilies” (Friends & Families) → Premiumisation: the premium label (4* and 5*) to rise from 31% of accommodation in 2019 to 42% in 2025 (+35%) SKY PARK → D
Slide 13: Becoming the benchmark in rental of private homes and campsites
BECOMING THE BENCHMARK IN RENTAL OF PRIVATE HOMES AND CAMPSITES Continuing to develop the distribution and services platform in 2 markets: private home rentals and campsites → Developing a panel of services (yield, purchasing centre, web, experience…) for our partners enabling them to optimise their
Slide 14: Digitalisation & innovation to help boost revenue
DIGITALISATION & INNOVATION TO HELP BOOST REVENUE Accelerating digitalization and innovation to help boost revenue through three main focus areas: I CONTINUE TO → Improving and simplifying the customer experience on mobile devices (increase traffic from 70% in 2020 to 80% in 2024) EXPAND DIRECT SALE
Slide 15: A tailor-made property model for each project
A TAILOR-MADE PROPERTY MODEL FOR EACH PROJECT TO SECURE THE MARGIN AND FUTURE RENTS Property development focused on strategic priorities; Three levers to underpin targeted and profitable development Review of our construction methods/cost prices to maintain acceptable rent levels: I PROJECT COST → B
Slide 16: Pillar #2: Efficiency
3 PILLAR #2: EFFICIENCY // 16 //
Slide 17: A more agile organisation with an entrepreneurial mindset
A MORE AGILE ORGANISATION WITH AN ENTREPRENEURIAL MINDSET I A SLIMMED-DOWN HOLDING COMPANY A LIGHTER HEAD OFFICE: CREATION OF A HOLDING COMPANY FOCUSED ON OVERSIGHT AND SIMPLIFIED GOVERNANCE FUNCTIONS… … HOUSING GROUP-WIDE STRATEGIC FUNCTIONS TO STRENGTHEN SYNERGIES WITHIN THE GROUP. 4 OPERATING MET
Slide 18: A more agile organisation with an entrepreneurial mindset
A MORE AGILE ORGANISATION WITH AN ENTREPRENEURIAL MINDSET Incorporating key support functions into each Business Line: FINANCE Management control, G/L and subledger accounting HUMAN RESOURCES Recruitment, training and development, internal communication and employer branding DEVELOPMENT OF THE BUSIN
Slide 19: A slimmer top holding company
A MORE AGILE ORGANISATION WITH AN ENTREPRENEURIAL MINDSET A slimmer top holding company, focused on governance, oversight and strategic functions → Taking into account social and CSR ethical challenges in the Group’s → Ensuring the Group’s financing activities → Accompanying the Group’s development
Slide 20: Transformation of the procurement function
TRANSFORMATION OF THE PROCUREMENT FUNCTION TO MEET THE GROUP’S CHALLENGES Focus on purchases → The Procurement function only covers 60% of the Group’s purchases: 11% 75% Total purchases in 2019: €732m • Supplier selection O/w not covered by the Procurement 28 20% • Price negotiation department: €294
Slide 21: Priority on digital projects
PRIORITY ON DIGITAL PROJECTS Investments required in order to meet requirements SIGNIFICANT → To face the IT challenges generated by the Group’s development, an additional €15m in project investments are needed to: INVESTMENTS IN “IT” → Support the Group’s business by perfecting the customer experie
Slide 22: Pillar #3: Values
4 PILLAR #3 : VALUES // 22 //
Slide 23: Our purpose & our values
OUR PURPOSE & OUR VALUES We are the European leader in local tourism, committed to helping people get back to basics in a preserved environment OUR VALUES We are all We cultivate living responsible together entrepreneurs // 23 //
Slide 24: Our social and societal responsibility
OUR SOCIAL AND SOCIETAL RESPONSABILITY Our CSR strategy reflects our purpose through our operations. It addresses societal and environmental challenges in tourism and construction: → Offering activities related to nature and the → Favouring local purchases in the construction regions at all our site
Slide 25: Our human challenges
OUR HUMAN CHALLENGES The main challenges of the Group’ Human Resources Department and the Business Lines are to: → Give meaning to the work of all employees in the business lines, at the forefront of operations, to encourage more OUR HUMAN RESOURCES entrepreneurship namely a sense of initiative, act
Slide 26: Socially responsible assistance
SOCIALLY RESPONSIBLE ASSISTANCE Aware of the potential impact of the Change Up project for its employees in France and the Netherlands, the Group pledges to fully assist them through all these changes. The aim is that all employees see the project as a professional development opportunity. In France
Slide 27: Expected Results
5 EXPECTED RESULTS // 27 //
Slide 28: Change in business line revenue
IMPACTS Growth over CHANGE IN 2020-2024 BUSINESS LINE REVENUE Accommodation +6.0% revenue a year net of commission fees Comparative-scope basis +4.7% a year Accommodation revenue from the Business Lines should increase by 6% a year on average over 2020- 2024, i.e: → +2.9% from optimisation of curren
Slide 29: Savings plan
IMPACTS €m SAVINGS PLAN → The impacts expected by the Group following implementation of the savings plan represent a total of €50m by 2024 and break down as follows: • €30m net from the reorganisation (the maximum number of 30 Organisation redundancies envisaged about 220 jobs) and €20m from “Change
Slide 30: Current operating results
IMPACTS Average operating income generation over 2020-2024 CURRENT → For the Business lines, the aim is to generate: → An operating margin of 5% as of 2022 (Ambition 2022 (% of total) OPERATING target) 21% RESULTS → A target margin for 2024 of more than 9% → Growth in current operating income is lin
Slide 31: Conclusion
6 CONCLUSION // 31 //
Slide 32: Conclusion: a strict plan with a return to profitability as of 2021
CONCLUSION: A STRICT PLAN WITH A RETURN TO PROFITABILITY AS OF 2021 → A targeted and profitable development with Center Parcs in northern Europe and Pierre & Vacances in mountain regions → A business-oriented and agile organisation with an entrepreneurial mindset → A reorganisation plan initiated as
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Pierre & Vacances-Center Parcs Group — Investor Presentation (January 2020) on 6ix