TUI AG: 1st Quarter Results 2018
TUI AG (TUI) QUARTERLY STATEMENT TUI Group - financial highlights
Q1 Highlights
New TUI Cruises ship - Spring 2023 Our TUI Cruises joint venture will continue to expand its cruise fleet, with the addition of a new 2,894 berth ship in Spring 2023. The ship, which will be a sister ship to the 2018 and 2019 launches, will be fully financed by the joint venture, with no additional capital expenditure requirement from TUI Group. This will enable TUI Cruises to enhance the customer experience with a greater range of innovative and environmentally sound ships and itineraries, thereby continuing its participation in the high growth German cruise market. Outlook
1 Assuming constant foreign exchange rates are applied to the result in the current and prior period. Current Trading Holiday Experiences Demand remains strong for the Western Mediterranean and Caribbean (despite hurricane disruption and reflecting demand from North America) and continues to improve for Turkey and North Africa, in particular from Sales & Marketing . We are delivering further expansion of our own hotel brands, with eight openings in Winter 2017 / 18 and seven further openings in Summer 2018. At the same time we continue to streamline the existing portfolio, with the disposal of three Riu hotels in Q1 and five further repositionings under the TUI Blue and TUIMagic Life brands in FY18. In addition, the Robinson Club Jandia Playa in Fuerteventura is undergoing renovation and will be closed for most of FY18. In Cruises new launches are scheduled for TUI Cruises, Marella Cruises and Hapag-Lloyd Cruises in 2018 and 2019, as well as the new build just announced for TUI Cruises in Spring 2023. Demand for our cruises remains strong, with an increase in yield in all three brands. In Marella, Majesty left the fleet in November 2017 and Spirit will leave the fleet after Summer 2018. Volumes in Destination Services develop in line with our Sales & Marketing business. We are opening a new destination management company (DMC) this April in Jamaica, and will continue to develop our destination portfolio. Sales & Marketing Sales & Marketing continues to progress well. Winter 2017 / 18 revenues are up 6 % on prior year, with bookings up 3 %. There is strong growth in bookings for North Africa, Thailand, Cape Verde and Cyprus. Long haul continues to grow, although demand for the Caribbean from Sales &
In Northern Region, Nordics bookings continue to grow strongly (+ 5 %) with higher pricing (+ 3 % on average) and margins reflecting strong demand for our holidays, remixed destination portfolio and the introduction of the Cyrus yield management system. In the UK, demand is resilient. Bookings for Winter 2017 / 18 are down 4 % (or down 3 % including cruise) versus a very strong prior year comparative of + 12 % (including cruise). Load factor is slightly ahead of prior year, with a small reduction of risk capacity in line with demand. Average selling price is up 8 %, reflecting the ongoing impact of the weaker Pound Sterling, which continues to result in more normalised trading margins. In Central Region, bookings in Germany are up significantly on prior year (+ 8 %), as we continue to build market share. Average selling price is up 1 %. There is particularly strong demand for Canaries as well as recovery in demand for North Africa, especially Egypt. In addition, long haul volumes continue to grow, including to Thailand as a result of the opening of the new Robinson club. Switzerland and Poland are also performing well. In Western Region, bookings in Belgium and Netherlands are ahead of prior year (+ 4 % overall) with a strong load factor performance. Average selling price is up 2 %. In France bookings are impacted by subdued demand for the Caribbean post hurricanes, however, load factor remains ahead of prior year as a result of prudent risk capacity management. We remain focussed on improving the underlying result in France this year, and on the delivery of synergies from the Transat acquisition. Looking ahead, Summer 2018 has started well. The programme is 35 % sold, in line with prior year, with revenues up 8 % and bookings up 6 %. Growth is driven by higher bookings for Greece, Turkey and Cyprus. In addition, although it is generally less significant as a destination in Summer compared with Winter, there is also higher demand for North Africa. At this relatively early stage, bookings in all three regions are up versus prior year, with a particularly strong start in Nordics, Germany and Benelux. In the UK, where the programme is 41 % sold, the rebrand continues to drive up unaided awareness of TUI. UK bookings are broadly in line with prior year (- 1 %), with average selling price up 3 %. Consolidated earnings
Segmental performance Holiday Experiences
Sales & Marketing
Cash flow / Net capex and investments / Net debt The cash outflow from operating activities decreased by EUR 181 m to EUR 1,320 m. The net debt position of the continuing operations improved by EUR 644 m to EUR 874 m. The year-on-year improvement was attributable mainly to the receipt of disposal proceeds not yet fully reinvested.
* Excluding effects from Hotelbeds disposal. The decline in net capex and investments was mainly driven by the acquisition of Transat last year and the sale of three Riu hotels in Q1 2018. Foreign Exchange / Fuel 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 Sales & Marketing, which account for over 90 % of our Group currency and fuel exposure.
Income statement
Cash flow statement
Financial position
Alternative performance measures Key indicators used to manage the TUI Group are EBITA and underlying EBITA. EBITA comprises earnings before interest, income taxes and goodwill impairments and excluding the result from the measurement of interest hedges. EBITA includes amortisation of other intangible assets. We consider underlying EBITA to be the most suitable performance indicator for explaining the development of the TUI Group's operating performance. Underlying EBITA has been adjusted for gains on disposal of financial investments, expenses in connection with restructuring measures according to IAS 37, all effects of purchase price allocations, ancillary acquisition cost and conditional purchase price payments and other expenses for and income from one-off items. The table below shows the reconciliation of earnings before tax from continuing operations to underlying earnings. In Q1 2018, adjustments (including one-off items and purchase price allocations for continuing operations) totalled EUR 20.2 m. This increase of EUR 11.0 m versus the prior year was primarily attributable to restructuring costs incurred in the period under review for the integration process in France.
The improvement in the interest result in Q1 2018 was mainly driven by the improvement in net debt position and lower interest rates. Adjustments include one-off income and expense items impacting or distorting the assessment of the operating profitability of the segments and the Group due to their level and frequency. These items primarily include major restructuring and integration expenses not meeting the criteria of IAS 37, material expenses for litigation, gains and losses from the sale of aircraft and other material business transactions of a one-off nature. TUI Group's operating loss adjusted for one-off effects declined by EUR 35.4 m to EUR 24.9 m in Q1 2018. In Q1 2018, adjustments included expenses for purchase price allocations of EUR 7.6 m and in particular restructuring costs for the integration of Transat in France.
Other segment indicators
Cautionary statement regarding forward-looking statements The present Quarterly Statement Q1 2018 contains various statements relating to TUI's future development. These statements are based on assumptions and estimates. Although we are convinced that these forward-looking statements are realistic, they are not guarantees of future performance since our assumptions involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Such factors include market fluctuations, the development of world market prices for commodities and exchange rates or fundamental changes in the economic environment. TUI does not intend to and does not undertake any obligation to update any forward-looking statements in order to reflect events or developments after the date of this Statement. Analyst and investor enquiries Peter Krüger Contacts for Analysts and Investors in UK, Sarah Coomes Hazel Chung Contacts for Analysts and Investors in Continental Europe, Middle East and Asia Nicola Gehrt Ina Klose Jessica Blinne Investor and analyst conference call and webcast A conference call and audio webcast for analysts and investors will take place today at 7:15am GMT / 8:15am CET. The dial-in arrangements for the call are as follows: For Germany: +49 30 232531411 The presentation slides and details of the audio webcast will be made available ahead of the presentation at the following link: http: / /www.tuigroup.com / en-en / investors Financial calendar
13 February 2018 Annual General Meeting 2018 9 May 2018 Half Year Financial Report 2018 Capital Markets Day 9 August 2018 Quarterly Statement Q3 2018 27 September 2018 Pre-close Trading Update 13 DeCember 2018 Annual Report 2018 Contact and publishing details
published by TUI AG www.tuigroup.com concept and Design 3st kommunikation, Mainz photography Cover: Michael Neuhaus The English and a German version of this Published on 13 February 2018
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ISIN: | DE000TUAG000, DE000TUAG299 |
Category Code: | QRF |
TIDM: | TUI |
LEI Code: | 529900SL2WSPV293B552 |
Sequence No.: | 5199 |
End of Announcement | EQS News Service |
653577 13-Feb-2018
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