Revenues amounted to 750 million euro for the period, compared with 784 million euro in first-half 2004, representing a 4.3% decrease as reported and a 3.1% decline like-for-like (at comparable scope of consolidation and exchange rates).

Operating income continues to improve, gaining 8% to €35 million.
Free cash flow is positive at €13 million
(vs. a negative €33 million in winter 2004)

In millions of euros	1st Half 2003	1st Half 2004	1st Half 2005
Revenues	785	784	750
Operating income	12	32	35
Financial expense	(25)	(22)	(20)
Exceptional expense	(21)	(7)	(4)
Income tax	10	(2)	(4)
Amortization of goodwill	(4)	(4)	(4)
Minority interests	(1)	(1)	0
Net income/(loss)	(29)	(4)	3
Free cash flow	(6)	(33)	13
	April 30, 2003	April 30, 2004	April 30, 2004
Net debt	(436)	(424)	(378)

Excluding the direct impact of the Caribbean hurricanes and the Asian tsunami, revenues were up 1.5% for the half. Reported revenues were reduced by €35 million by the temporary closure of five of the most profitable villages (Punta Cana and Columbus Isle in the Caribbean and Phuket, Kani and Faru in Asia).

Insurance settlements covering the operating income shortfall from the five closed villages totaled €24.7 million. This direct impact was calculated on the basis of the villages` operating income for winter 2004.

The settlements did not cover the indirect impact on the planned objective from such factors as the opportunity cost of expected growth at the five villages, the decline in demand at nearby villages and the effect on bookings of postponing the ad campaign.

Despite these factors, operating income continued to improve, increasing to €35 million from an already good showing of €32 million in winter 2004, and net income was positive for the first time in four years, at €3 million. Free cash flow swung to a positive €13 million, versus a negative €33 million in the prior year period. Debt continued to decline, to €378 million from €424 million at April 30, 2004.

Operating income by region and business

• The good performance in Europe-Africa, led by high occupancy rates in the snow villages, the success of the new Marrakech village and robust Internet sales, was dampened by an increase in marketing and insurance costs.
• Business continued to recover in the Americas, as attested by the 14.4% gain in revenue per available bed (RevPAB) and further growth in operating income with reduced capacity. In addition, Internet sales were up significantly for the period.
• Asia was deeply affected by the December 26 tsunami, which led to the closure of three villages representing 30% of the region`s total capacity. Business is recovering very slowly due to lingering fears about Asian destinations and airline capacity in the region has been reduced.
• Thanks to its successful up-market strategy, Jet tours posted a solid gain in operating income.

Critical milestones were reached in winter 2005

• The value-driven business model has again been validated, with a 5.5% increase in RevPAB on the back of improvements in both the price mix and the occupancy rate.
• The success of Club Med`s new strategic positioning can be seen in its new ad campaign (There`s so much more of the world to discover), new logo and new brand identity (Club Med Style).
• Satisfaction levels reached a new record, with the number of very satisfied customers up 7.5% on winter 2004.
• In line with the terms announced last December, initial synergies with Accor, our leading industry shareholder, have been implemented in such areas as purchasing synergies, the deployment of cross-loyalty programs, and the development of a joint B2B offering.

Additional growth drivers for winter 2006

These milestones have paved the way for additional growth drivers to be implemented in winter 2006:

• Sustained resegmentation: 95% of the village base will be 3T or 4T in winter 2006 (versus 91% in 2005) with the opening of Peisey Vallandry (4T), the upgrade of Les Boucaniers to 4T from 2T, the renovation and upgrade, from 2T to 3T, of Aime la Plagne, the closure for renovation of the 2T Flaine village.
• Faster upgrading to 4T standards: in winter 2006, 42% of the portfolio will be 4T (up 10 points from winter 2004) with, in particular, the upgrading of Kani and Cervinia from 3T to 4T.
• Extension of inclusive bar & snacking offers for all the snow villages in Europe in winter 2006, after the highly popular response in the Americas and successful testing in the 200% villages.
• Faster room reclassification depending on room amenities, location or the availability of extra services. This responds to customer expectations for accommodations and offers Club Med an effective driver of additional long-term growth.

Summer 2005 bookings