The Report of the Supervisory Board presented below tells you about our activities in financial year 2015 / 16.
We have successfully completed financial year 2015 / 16. Our employees, Executive Board and Supervisory Board have jointly achieved many objectives and exceeded some targets. Key projects for the future of the Company have been completed or are well on track. In the Report of the Supervisory Board presented below, I would like, on behalf of the entire Supervisory Board, to tell you about the key activities of our various committees in financial year 2015 / 16.
Two years after the merger between TUI AG and TUI Travel PLC, the integration of the two companies is almost complete. The synergies we had promised were delivered. The merger and the integration have created the conditions for the future growth of the Company that had been sought by the Executive Board and Supervisory Board. Apart from close monitoring of the synergies, the focus of the work by the Supervisory Board and Integration Committee in the financial year under review was on cultural integration. Our declared goal is and remains not to be a German or British but an international company. The Supervisory Board itself is a good example: only three of the ten shareholder representatives elected by you have a German passport. The successful work performed by the Executive Board in the integration process is also demonstrated by the results of our TUIgether employee survey, performed for the second time in the past financial year. Due to the clear corporate strategy defined by the Executive Board and supported by the Supervisory Board, but also the expansion of career and development opportunities, the identification and satisfaction of the employees of your Company have improved substantially.
Overall, the completed financial year was characterised by the continued volatility of the external framework. With the attack on Brussels Airport in March 2016, terrorism reached a key source market. Our employees and management have delivered an impressive performance in the interests of our customers: they have given a face to customers’ trust in the TUI Smile. We were also challenged by changes in customer demand for travel to Turkey and North Africa: our debates focused on shifting capacity to alternative destinations, initiated and successfully implemented by the Executive Board, and the organisation of Group-wide crisis management. We likewise addressed the decision taken in the UK in June 2016 to be the first country to leave the European Union since its inception. Long before and directly after the Brexit vote, the Executive Board and Supervisory Board discussed potential consequences and an action plan, and this remains a matter of attention.
Thanks to its flexible business model, TUI AG managed to increase its earnings year-on-year in financial year 2015 / 16, despite the challenging geopolitical framework. That is a remarkable achievement, as numerous competitors and peers had to correct their earnings guidance downward, in some cases quite substantially.
The Supervisory Board and its Committees discussed many technical issues and business transactions requiring its approval. Apart from monitoring compliance with the German Corporate Governance Code (DCGK) and regularly discussing questions related to the UK Corporate Governance Code (UK CGC), our work focused on reviewing and debating the financial statements of TUI AG and the Group. We also closely monitored the focussing of the business model and the associated divestments. Both the completed divestment of Hotelbeds Group and the planned sale of Specialist Group are prerequisites for investments in growth during the next few years. The Strategy Committee formed after the 2016 Annual General Meeting provides a key platform for engaging in an even more intensive exchange with the Executive Board about strategically relevant decisions and preparing the debates of the Supervisory Board.
Although the forthcoming financial year 2016 / 17 entails uncertainty regarding the geopolitical situation and the further Brexit process, we have every reason to look ahead with confidence. TUI AG is on a growth path. Our business model continues to progress consistently and systematically from distribution towards production with integrated control of value creation. Our clear strategic direction makes TUI AG an attractive and promising investment.
On behalf of the entire Supervisory Board, let me express warm gratitude to our employees and the Executive Board for an excellent job done in financial year 2015 / 16.