Letter to the Shareholders

Dear Shareholders

During the 2011 financial year, Kuoni took some important steps in its ongoing change process. The company invested in the future growth markets, i.e. the geographical regions, but also the business models and the new technologies that promise significant growth. Kuoni has evolved into a global and service-oriented provider of travel products. It sells these products and services directly to customers, but also acts as a business partner for other companies and their customers; and it does this worldwide, with a particularly strong presence in Asia.

The changes made during the year were based on several key elements. The centrepiece was the acquisition of Gullivers Travel Associates (GTA) in May 2011. Our shareholders’ approval of a capital increase at the General Meeting in April 2011 provided a substantial part of the funds required to finance this purchase without compromising Kuoni’s further development. Following completion of the acquisition, the group’s organisational structure was adjusted to reflect the new positioning and weighting of business activities. 2011 also saw the completion of the group’s three-year investment and cost reduction programme. This focused on sales initiatives relating to direct customer contact, the consolidation of IT systems, global brand positioning and the development and promotion of our employees’ knowledge and skills.
The GTA acquisition represents one of the most important strategic moves in Kuoni’s history. GTA’s areas of business ideally augment the successful and growing activities of Kuoni Destination Management (KDM). Kuoni is now one of the market leaders in the operation of global online databases for individual travellers who want to book hotel stays, transfers or excursions either at travel agencies, through online portals or through other tour operators. This type of business is one of the fastest growing areas of the tourism industry. The group leisure travel business, which Kuoni has been operating successfully for almost 50 years, was also greatly strengthened by the GTA acquisition.

Kuoni is either the market leader or one of the biggest providers in this business area, particularly in numerous Asian countries.