• October - 19

TUI Group on track: Group earnings up by 14.1 per cent in Q31

HANOVER / LONDON – “Our earnings grew by 14.1 per cent1 in Q3, and we reiterate our guidance for the full year. In financial year 2015/16, we are planning to deliver at least 10 per cent growth in underlying EBITA year-on-year. TUI’s presence in more than 100 countries with our Group’s own businesses and employees and our advanced transformation to a hotel and cruises group make TUI Group more flexible and resilient – and thus stronger. Today, we are in a better position to cushion geopolitical challenges. No one is immune to external impacts. However, it has been demonstrated that we have launched the right strategy, engage in active management and control, and have developed a sophisticated risk management system,” said Fritz Joussen, CEO TUI Group, at the presentation of the results for the quarter.

Overview earnings and turnover
In the period from April to June 2016, TUI Group improved its underlying operating result (EBITA) by 1.1 per cent to 180.0 million euros. Excluding FX and the timing impact of Easter, EBITA climbed by 14.1 per cent1 to 203.3 million euros (Q3 2014/15: 178.1 million euros). In Tourism, a good trading performance was delivered in particular by source market UK & Ireland, RIU hotels and Cruises.

In the period under review, turnover by TUI Group totalled 4.60 billion euros, down by 5.7 per cent year-on-year (4.88 billion euros). This was driven by the timing impact of Easter, a decline in bookings to North Africa and Turkey and the impact of terrorist attacks on the market environment, for instance in Belgium following the terror attack at Brussels Airport. For the first nine months of the financial year, turnover declined slightly by 0.9 per cent to 11.39 billion euros (9M 2014/15 11.49 billion euros). TUI is currently delivering a robust trading performance in line with the Group’s expectations. The summer 2016 source market programme is 87 per cent sold to date, with turnover up one per cent. Demand has shifted to other profitable destinations. Source market bookings excluding Turkey are up eight per cent overall.

Hotels & Resorts – RIU increases occupancy and average rate per bed
In the period under review, RIU delivered an increase in occupancy of five percentage points. The average rate per bed grew by three per cent. Overall, RIU increased its results by 14.0 per cent to 64.6 million euros (Q3 2014/15: 56.6 million euros) in the period under review. Hotels & Resorts recorded underlying EBITA of 56.7 million euros (previous year 67.3 million euros). The prior year’s reference result had included a gain on disposal of Grecotel of ten million euros. Moreover, earnings for hotels in Turkey and North Africa fall short of past levels, as expected, due to the geopolitical events.

Cruises remain growth market
TUI Group’s cruise activities reported earnings growth of 10.1 million euros in Q3 2015/16. The underlying operating result climbed to 29.4 million euros (Q3 2014/15: 19.3 million euros). TUI Cruises completed the first full year of operation of ‘Mein Schiff 4’. In July 2016, the fleet was expanded to include ‘Mein Schiff 5’. TUI’s subsidiary Hapag-Lloyd Cruises also achieved a further improvement in its performance in the period under review. With its three companies TUI Cruises, Hapag-Lloyd Cruises and Thomson Cruises in the UK, TUI is one of Europe’s leading cruise providers in the growing cruise segment.

Source markets: TUI UK & Ireland with continued good trading performance, Germany and France with positive development
Source market UK & Ireland delivered a good trading performance with an increase in load factors and margins and continued strong trading. The Nordics, by contrast, were impacted by the decline in demand to Turkey. Overall, Northern Region (UK & Ireland, Nordics, Canada, Russia) reported an underlying operating result of 88.1 million euros (Q3 2014/15: 103.3 million euros). Excluding the negative impact of foreign exchange translation and the timing impact of Easter, however, it rose to more than 104 million euros.

Underlying EBITA of Central Region (Germany, Austria, Switzerland, Poland) showed a positive development and improved to 3.3 million euros following a loss recorded in the prior year. Excluding the Easter effect, the underlying operating result amounted to five million euros. In the period under review, the results benefited in particular from lower distribution costs and cost savings in Germany and Austria. Despite challenging conditions, TUI Group continued to increase its market share in Germany.

Western Region (Netherlands, Belgium, France) further reduced its underlying EBITA loss to -6.5 million euros (Q3 2014/15: -10.2 million euros). Excluding Easter, the region achieved a further improvement in its result (-3 million euros), driven primarily by a significant reduction in French operating losses, offset partly by the weaker trading environment in Belgium following the Brussels attack.

Post-merger synergies: Further nine million euros delivered
Regarding the synergies announced in the framework of the merger with TUI Travel PLC in 2014, TUI delivered further nine million euros worth of synergies in the period under review, driven by corporate streamlining and hotel occupancy improvements.

Guidance for full year and the period to 2017/2018 reiterated
Despite the geopolitical challenges, TUI continues on its growth path. The Executive Board is confident of delivering underlying EBITA growth of at least 10 per cent2 in 2015/16 and at least 10 per cent2 underlying EBITA CAGR over the two subsequent years to 2017/18.

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