revomslag_13apr.qxd 09-05-2005 15:29 Side 1 kilroytravels.com - kilroygroups.com - myplanet.com revomslag_13apr.qxd 09-05-2005 15:29 Side 2 Content Page Page Key Figures and Key Ratios ............................. 1 Management’s Statement and Auditor’s Report .. 11 The KILROY Group .............................................. 2 Accounting Policies .......................................... 12-13 Group Structure and Locations ........................ 3 Profit & Loss Account ........................................ 14-15 Report of the Board of Directors ...................... 4-5 Balance Sheet ..................................................... 16-17 KILROY Individual Travel .................................. 6-7 Cash Flow Statement ........................................ 18 KILROY Group Travel ........................................ 8 Notes to the Accounts ....................................... 19-24 MyPlanet ............................................................. 9 Board of Directors and Management ................ 25-26 Financial Review .............................................. 10 Office Addresses ............................................... 27-28 KILROY travels International A/S Knabrostræde 8 DK-1210 Copenhagen K Denmark CVR-nr. 10 91 52 95 This annual report with financial statements is presented in accordance with the Danish Financial Statements Act.The following is a translation of a Danish original document. The original Danish document text shall be governing text for all purposes and in case and in case of any discrepancy the Danish wording shall be applicable. The Danish-language annual report is subject to approval at the ordinary general meeting on may 3rd, 2005, and will be filed with the Danish Commerce and Companies Agency. rev_indhold_02maj.qxd 09-05-2005 15:23 Side 1 Key Figures and Key Ratios DKK million 2000 2001 2002 2003 2004 Profit and loss account Turnover 1,576 1,539 1,440 1,260 1,209 EBITDA 37 38 29 19 21 EBIT 16 13 4 -3 2 Net financials 5 7 6 -1 3 EBT 21 20 10 -4 1 Profit attributable to KILROY travels International A/S 13 13 5 -5 0 Balance sheet Cash and bonds 367 343 297 216 213 Current assets 427 399 352 282 262 Total assets 503 491 436 363 332 Capital expenditure 36 44 21 22 11 Group/Parent company equity 66 79 89 59 69 Current liabilities 404 379 315 258 239 Cash flow from operating activities 58 26 -33 -57 26 Key ratios EBITDA - ratio (%) 12.8 12.7 9.9 7.4 8.6 EBIT - ratio (%) 1.0 0.9 0.3 -0.3 0.2 Return on assets (%) 3.1 2.7 0.9 -0.9 0.6 Return on equity, KILROY (%) 20.8 18.5 6.5 -3.7 6.3 Liquidity ratio (%) 105.6 105.3 111.8 109.3 109.6 Equity ration (%) 13.0 16.1 20.4 16.2 20.9 Earnings per share (DKK) 55.4 57.1 23.3 -11.8 14.5 Cash flow per share (DKK) 247.8 110.4 -142.8 -243.4 93.1 Dividend (DKK million) 6.5 0 20 0 0 Dividend (%) 28 0 85 0 0 Average number of employees, full-time equivalent 562 588 568 489 438 Definitions: EBITDA-ratio: EBITDA /gross profit (ex. other operating income) Cash flow per share (CFPS): Cash flow from operating activities/number of shares Equity ratio: Equity (ex. minority interests)/total assets Return on equity: Net profit/average equity EBIT-ratio: EBIT/turnover Dividend ratio: Dividend/share capital Earnings per share (EPS): Net profit (ex. extraordinary income/expense) per share Liquidity ratio: Current assets/current liabilities Return on assets: Operating profit (EBIT)/total assets The KILROY Group 1 rev_indhold_02maj.qxd 09-05-2005 15:23 Side 2 The KILROY Group Dreams … we make them happen! KILROY travels International A/S has a very special mission called, "Dreams … we make them happen!" We are a group of travel companies, based in Europe, who specialises in value-added travel for students, young people and members of the MyPlanet Friendship Societies. The dreams we realize are those of discovery, years made substantial investments in IT and Web Cost efficiency - Streamlining the operation to exploration, learning and friendship. We help our development to support this business philosophy. document cost efficiency at the highest industry level. customers find the meaning of life by experiencing the world. We focus on young people but also welcome Focus on performance Human resources - Having the best and most the "young in mind." Our third business driver is focusing on both personal competent staff serving our customers better than and corporate achievements. Thus, the KILROY Group anyone else. Traditional travel companies sell airline tickets and book is divided into three business units, which all have full accommodation. But the KILROY Group's products and profit/loss responsibility: Industry dynamics services encompass the whole travel experience - from The future of the travel industry still seems to be planning the trip and seeking relevant information, to z KILROY Individual Travel, with core focus on students turbulent with a number of structural changes ahead. the actual flight, accommodations, adventures, new and young people travelling individually. It consists of But in the KILROY Group, we believe that the dream cultures, and the memories and useful experiences to KILROY Explorer, specialising in long-haul travel by of exploring the world is a growing and inexhaustible share with others who also love to travel. providing superb personal service and destination trend, especially in the segments we serve. The custo- knowledge to customers, and KILROY Online, which mers' demand for individualized and specialized Adding value for the customer sells flight tickets and specific non-flight products via services is expected to grow faster in the years to The most important business driver for the KILROY the Internet. come. Exploiting the growing importance of the Group is adding relevant value for our customers. Internet, and being able to swiftly adapt to the rules of We know what's in and what's out; what's hot, and z KILROY Group Travel, with core focus on youth the industry's new business models, will be the keys to what's not. and students travelling in groups for educational, travel companies' future success. recreational and other organised purposes. This requires staff competence, which is a fundamental This is why we in the KILROY Group continuously component of our service offering. We express this z MyPlanet, serving only the members of the adjust our business platforms to anticipate and adapt competence directly through our sales consultants, and MyPlanet Friendship Societies. to market dynamics. We have defined the Web as our indirectly through our various Web sites. This makes us customers' first point of contact, reflecting the fact that a highly appreciated authority in our niche segments. Each business unit is monitored with specific key performance indicators, and these are reflected in the the Web is by far our target groups' most important source of inspiration. To this, we add our reliable brands and clear segmenta- objectives and action plans for each individual staff tion, which makes the KILROY Group stand out in a member. We constantly streamline our business processes in vast and highly competitive marketplace. All three business units have the same order to reduce transaction costs. We analyse our customers' needs and preferences in order to be able Cost efficiency fundamental strategic pillars, defined as the KILROY M A R C H: to add and deliver the right value. We constantly invest Adding value for our customers at the lowest possible in our brands to underline our reliability for customers in cost is our second-most important business driver. Market leadership - Being the leading player in the a highly turbulent market. And we continue to build ever Travel is a low-margin industry, and it's only possible to segments we serve. closer relationships with suppliers, who are committed maintain a competitive edge by constantly improving to our philosophy of serving niche markets in a unique productivity. Availability - Offering the customer the most conveni- and dedicated way. ent and cheapest distribution access at any given time. The KILROY Group defines the Web as the customer's The KILROY Group is prepared to play an active role in first point of contact. Technology and simplicity are the Relevance - Adding value for the customer in the consolidation process that is expected to take place keys to improved efficiency, and we have over the past accordance with his or her preferences. in the travel industry in the coming years. 2 The KILROY Group rev_indhold_02maj.qxd 09-05-2005 15:23 Side 3 Group Structure and Locations, May 2005 KILROY travels International A/S (Denmark) Corporate Functions Business Units MyPlanet KILROY Group Travel KILROY Individual Travel (Friendship Societies) KILROY group travel A/S KILROY travels Denmark A/S MyPlanet International A/S Copenhagen, Holstebro Copenhagen, Odense, Aalborg, Aarhus Holstebro, Copenhagen (Denmark) (Denmark) KILROY group travel KILROY travels Norway AS MyPlanet Norway AS Oslo Oslo, Bergen, Stavanger, Tromsø, Oslo (Norway) Trondheim, Kristiansand (Norway) KILROY group travel KILROY travels Sweden AB MyPlanet Sweden AB Stockholm Stockholm, Gothenburg, Lund, Malmö, Stockholm, Gothenburg (Sweden) Umeå, Uppsala, Linköping, Örebro (Sweden) KILROY group travel OY KILROY travels Finland AB MyPlanet Australia PTY Ltd. Helsinki Helsinki, Tampere, Turku, Jyväskylä Sydney (Finland) (Australia) KILROY travels Netherlands B.V. Amsterdam, Groningen, Rotterdam Utrecht, Leiden Legal structure cannot be read from the above. The KILROY Group 3 rev_indhold_02maj.qxd 09-05-2005 15:23 Side 4 Report of the Board of Directors The general demand for travel recovered somewhat in 2004 but the aggressive price wars between general commercial airlines and low-cost carriers on the European market continued to put price pressure on flight tickets. Despite these challenges, the KILROY Group managed to improve financial results from its losses in 2003 through restructuring, cost efficiency and focus on the Web as the primary interface with customers. KILROY Group turnover in 2004 reached DKK 1,209 rally declined, and the majority of airlines have moved to in the travel industry, and is one of the main drivers in million, a marginal drop of 4% from DKK 1,260 a 0-commission platform.