TIDMTUI TIDMTUIN TIDMTUIJ
RNS Number : 4933E
TUI AG
10 February 2015
NEW TUI GROUP DELIVERS A GOOD START TO THE YEAR
HIGHLIGHTS
-- 15% improvement in the underlying operating result(1) ,
excluding profit on sale of Riu Waikiki
-- Travel (formerly TUI Travel) result in line with our expectations
-- Hotels & Resorts (formerly TUI Hotels & Resorts) and
Cruises delivered a significant increase in profitability,
including the profit on sale of a hotel
-- Pleased with overall trading to date for Winter 2014/15 and Summer 2015
-- Post-merger integration underway - delivery of synergies will
commence during this financial year
-- Mainstream strategy is progressing, from growing profitability to profitable top-line growth
-- Evaluating options to manage Non-Mainstream for growth and value
-- Confident of delivering full year underlying operating profit
growth of 10% to 15% at constant currency(1)
Key Financials
Underlying Reported
EURm Q1 14/15 Q1 13/14 Change% Q1 14/15 Q1 13/14
restated(2) restated(2)
Revenue 3,543.6 3,361.1 +5.4 3,543.6 3,361.1
EBITA -107.9 -141.1 +23.5 -145.0 -160.2
EBITA - excluding profit
on sale of hotel, at constant
currency(1) -120.0 -141.1 +15.0 n/a n/a
-------------------------------- --------- ------------- -------- --------- -------------
(1) Constant currency basis assumes that constant foreign
exchange translation rates are applied to the underlying operating
result in the current and prior year
(2) Please refer to page 37 of the interim financial statements
for further explanation of prior year restatement
Chief Executives of TUI Group, Friedrich Joussen and Peter Long,
commented:
"We are delighted to announce our first set of results as TUI
Group, having delivered 15% improvement in the underlying operating
result. This reflects a significant increase in profitability in
Hotels & Resorts and Cruises. The Travel result is in line with
our expectations. We have continued to grow unique holidays and
online bookings across all key source markets and expect to deliver
growth in the underlying operating result in the remainder of the
year. Following completion of the merger between TUI AG and TUI
Travel PLC in December 2014, the integration of our businesses is
well underway, with a new Executive Committee in place. Based on
this result and our current trading, we remain confident of
delivering full year underlying operating profit growth of 10% to
15%(1) ."
Q1 Results
-- Underlying operating loss reduced by EUR33m to EUR108m (Q1
2013/14: loss of EUR141m). This equated to a 15% improvement in the
underlying operating result, excluding EUR16m profit on sale of Riu
Waikiki within TUI Hotels & Resorts, and EUR4m adverse foreign
exchange translation.
-- Travel underlying operating loss of EUR149m, or EUR144m at
constant currency (Q1 2013/14: EUR137m) was in line with our
expectations. Mainstream operating loss of EUR114m, or EUR110m at
constant currency (Q1 2013/14: loss of EUR110m).
-- Hotels & Resorts underlying operating profit increased
significantly to EUR51m (Q1 2013/14: EUR26m). Improved yield
performance, with overall occupancy up 3.6 percentage points to
77.6% and revenue per bed up 2.2%.
-- Cruises delivered underlying operating profit of EUR2m (Q1
2013/14: loss of EUR16m), with losses halved in Hapag-Lloyd
Kreuzfahrten and growth in TUI Cruises following the successful
launch of Mein Schiff 3.
Pleased with overall trading to date for Winter 2014/15 and
Summer 2015
-- Winter 2014/15 is closing out in line with our expectations -
84% of the Mainstream programme sold, with higher average selling
prices in most source markets.
-- Pleased with overall Summer 2015 trading to date, with 1%
higher average selling prices and broadly flat volumes overall.
-- Excellent online performance with Mainstream Summer 2015 online bookings up by 8%.
-- Continued growth in sales of unique holidays, which currently
account for 78% of Mainstream Summer 2015 bookings.
-- Strong trading performance continues by Accommodation
Wholesaler with TTV up 23% for Winter 2014/15 and 24% for Summer
2015.
Implementing our strategy post-merger
-- Integration under way, will start to deliver synergies this year.
-- Mainstream strategy is progressing, from growing profitability to profitable top-line growth
-- Evaluating options to manage Online Accommodation and
Specialist & Activity for growth and value under the leadership
of their new CEO, Will Waggott.
-- Remain committed to exiting remaining shareholding in
Hapag-Lloyd AG, through either IPO or trade sale.
-- Based on our Q1 result and current trading, we remain
confident of delivering full year underlying operating profit
growth of 10% to 15%(1) .
-- We will hold a Capital Markets Day on 13th May 2015, to
coincide with our H1 interim results, providing an update on our
strategy and setting out our plans for growth.
CURRENT TRADING
Winter 2014/15
In Mainstream, the Winter 2014/15 season is closing out as
expected, with 84% of the programme sold and strong pricing across
most of our source markets. Mainstream bookings are up 1% versus
prior year, reflecting planned capacity reductions in the Nordics
and France, with average selling prices up 1%. We are pleased with
overall trading to date, although in Germany, we are experiencing
some margin pressure in the Canaries, which forms a significant
part of our Winter programme.
We continue to deliver sustainable growth through our unique
holiday experiences, increasingly distributed online. Unique
holidays account for 72% of all Mainstream bookings, up three
percentage points compared with this time last year, whilst online
sales continue to grow across all key source markets.
Trading by Hotels & Resorts largely mirrors customer numbers
in Mainstream, as a high proportion of Group-owned hotel beds are
taken up by the Mainstream tour operators. In Cruises, bookings
performance continues to be driven by the expansion of the TUI
Cruises fleet, with the addition of Mein Schiff 3, and improved
fleet performance by Hapag-Lloyd Kreuzfahrten.
In Accommodation Wholesaler, TTV is up 23%, driven primarily by
Latin America, USA and Asia.
Current Trading(1) Winter 2014/15
YoY variation% Total Total Total Programme sold (%)
ASP(2) Sales(2) Customers(2)
Mainstream
UK +3 +6 +3 77
Nordics +5 -3 -7 91
Germany Flat +2 +1 82
France tour operators +4 -12 -16 87
Other(3) -1 +2 +4 89
Total Mainstream +1 +2 +1 84
Accommodation Wholesaler(4) +3 +23 +19 N/A
(1) These statistics are up to 1 February 2015 and are shown on
a constant currency basis
(2) These statistics relate to all customers whether risk or
non-risk
(3) Other includes Austria, Belgium, Netherlands, Poland and
Switzerland
(4) Sales refer to total transaction value (TTV) and customers
refers to roomnights
Summer 2015
For Summer 2015, we remain pleased with trading to date. In
Mainstream, we are still at an early stage of the booking cycle,
with approximately 32% of the programme sold, in line with prior
year. We are pleased with average selling prices, up 1%. In the UK,
which has the highest percentage of holidays sold so far at 38%,
bookings are up 4% and average selling prices are up 1%. Overall,
Mainstream bookings are down 1%.
We continue to see strong demand for our unique holidays, which
account for 78% of Mainstream bookings, up one percentage point. We
are particularly pleased with the growth in unique in Germany, now
accounting for over 60% of Summer bookings. Mainstream online
bookings are up 8%.
As for Winter, trading by TUI Hotels & Resorts largely
mirrors customer numbers in Mainstream. In Cruises, bookings
performance is driven by the launch of Mein Schiff 4 by TUI Cruises
in the Summer.
Our Accommodation Wholesaler business has had a strong start to
the year, with TTV for Summer 2015 up 24% driven by growth in Asia,
Latin America and the USA.
FUEL/FOREIGN EXCHANGE
Our strategy of hedging the majority of our jet fuel and
currency requirements for future seasons, as detailed below,
remains unchanged. This gives us certainty of costs when planning
capacity and pricing. The following table shows the percentage of
our forecast requirement that is currently hedged for Euros, US
Dollars and jet fuel for Travel, our largest segment.
Travel Winter 2014/15 Summer 2015
Euro 96% 85%
US Dollars 93% 85%
Jet Fuel 93% 87%
As at 6 February 2015
----------------------- --------------- ------------
NET DEBT AND LIQUIDITY
The net debt position (cash and cash equivalents less loans,
overdrafts and finance leases) at 31 December 2014 was EUR1,632m
(30 September 2014: net cash EUR293m). The increase since year-end
was driven by typical seasonal cash outflows within the tour
operator. The net debt position consisted of EUR1,094m of cash and
cash equivalents, EUR177m of current financial liabilities and
EUR2,549m of non-current financial liabilities.
We remain satisfied with our long-term debt funding and
liquidity position. This includes external bank revolving credit
facilities totalling EUR1.75bn which mature in June 2018, used to
manage the seasonality of the Group's cash flows and liquidity, and
the following listed bonds:
-- High yield bond EUR300m (issued by TUI AG, matures October 2019)
-- Convertible bond EUR339m (issued by TUI AG, matures March 2016)
-- Convertible bond GBP200m* (issued by TUI Travel PLC, matures April 2017)
-- Hybrid bond EUR300m (issued by TUI AG, no maturity date)
* In the context of the completion of the merger between TUI AG
and TUI Travel PLC, TUI AG terminated a financing agreement with
Deutsche Bank early. As a result, legal ownership of TUI Travel PLC
Convertible Bonds 2017 with a nominal value of GBP200m was
transferred to TUI AG during January 2015.
OUTLOOK
The new TUI Group has delivered a good start to the year, with
strong growth in profitability in Cruises and TUI Hotels &
Resorts. Mainstream performance during the quarter was in line with
our expectations, and our strategy, with its focus on unique
holidays, direct distribution and leveraging our scale, leaves us
well placed to deliver growth in underlying operating profit in the
remainder of the year. Our Accommodation Wholesaler business
continues to outperform the market, with strong TTV growth in
current bookings.
Our post-merger integration is underway and we expect to start
delivering synergies in the current financial year. In Mainstream,
our strategy is progressing, from growing profitability to
profitable top-line growth. In Non-Mainstream, we are evaluating
our options to manage these businesses for growth and value and we
remain committed to exiting our remaining shareholding in
Hapag-Lloyd AG, through either IPO or trade sale. Based on this
result and our current trading, we remain confident of delivering
full year underlying operating profit growth of 10% to 15%(1) .
Q1 REPORT
A full copy of our Q1 2014/15 Interim Report can be found on our
corporate website: http://www.tuigroup.com/en/investors
INVESTOR & ANALYST CONFERENCE CALL & WEBCAST
A conference call and webcast for investors and analysts will
take place today at 7.45am GMT / 8.45am CET. The dial-in
arrangements for the call are as follows:
Germany: +49 30 23 253 1428
UK: +44 203 367 9216
France: +33 172 253 098
US: +1 408 916 9838
A presentation to accompany the conference call will be made
available at 7.00am GMT / 8.00am CET via our corporate website:
http://www.tuigroup.com/en/investors
Details of the webcast can also be found at the same link.
Pre-Close Trading Update
TUI Group will issue a pre-close trading update on Wednesday
25th March 2015.
Half-Year Financial Report 2014/15 & Capital Markets Day
TUI Group will issue its H1 interim results on Wednesday 13th
May 2015, followed by a Capital Markets Day. Further detail will be
given in due course.
ANALYST & INVESTOR ENQUIRIES
Andy Long, Director of Strategy & Investor Tel: +44 (0)1293 645 831
Relations
Contacts for Analysts and Investors in UK, Ireland and Americas
Tej Randhawa, Investor Relations Manager Tel: +44 (0)1293 645 829
Sarah Coomes, Investor Relations Manager Tel: +44 (0)1293 645 827
Jacqui Smith, PA to Andy Long Tel: +44 (0)1293 645 831
Contacts for Analysts and Investors in Continental Europe, Middle East and Asia
Nicola Gehrt, Head of Investor Relations Tel: +49 (0)511 566 1435
Ina Klose, Investor Relations Manager Tel: +49 (0)511 566 1318
Jessica Blinne, Team Assistant Tel: +49 (0)511 566 1425
This information is provided by RNS
The company news service from the London Stock Exchange
END
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