Rating Rationale

The rating consists of quantitative and qualitative criteria based on Scope’s rating methodology for corporations.

The main positive rating drivers are the company’s long term experience and the resulting industry specific know-how. The company has two established brands and reports large scale effects. Despite recent personnel changes in management Scope considers seasonal dependencies in combination with a low diversification as key risks for investors. Due to an expected growth in turnover for 2012/2013 according to the international consolidated forecasts combined with the qualitative strengths for mid-term developments, Scope assigns a stable outlook to the company.

The quantitative analysis assesses the financial statements of the years 2009/2010 to 2011/2012. The evaluation is based on a solid equity base that is above the average level in comparison to international standards. A rise in turnover of 43% over the period considered as well as the positive net profits in all three regarded years are positively evaluated within the rating. An extraordinary profit due to a large ground sale on one side and significantly reduced operating profits caused by exceptional cost increases on the other side are reported for the business year 2011/2012.

From the qualitative point of view, main threats have been identified in key man risk issues linked to the resignation of the current CFO. The seasonal dependencies in combination with the low diversification in the existing business model may impact negatively the company’s future development. In addition, political influences in the regarded markets that impair the business model indirectly exist. Homair Vacances could state a well-grounded controlling and reporting instrument as well as risk controls for the management to steer the company’s activities, which has been positively incorporated in the assessment. Qualitative strengths of the company have yet to be assessed, when it comes to the strategic potential for organic and non-organic growth and competitive advantages concerning scale effects and online marketing.

The outlook for this rating is stable due to the expected growth in turnover for 2012/2013 according to the internal consolidated forecast combined with the qualitative strengths for mid-term developments.