Hanover, London, 8 December 2016

Very successful 2015/16 financial year for TUI Group

Travel, hotels and cruises: underlying EBITA increases 14.5 per cent1

  • Including specialist unit Travelopia, available for sale, growth of 12.5 per cent1
  • CEO Joussen: “TUI is in good shape. Our business model is robust, the transformation of the Group is on track, earnings grow double-digit.”
  • Supervisory Board and Executive Board to propose dividend of 0.63 euros per share (previous year 0.56 euros)
  • Guidance for earnings growth extended: Underlying EBITA to improve at least 10 per cent1 in 2016/17 and at least 10 per cent1 EBITA CAGR to 2018/19
  • TUI UK & Ireland, Western Region, RIU and Cruises with strong performance in the period under review
  • Group turnover2 up 1.4 per cent to 17.76 billion euros at constant exchanges rates

TUI Group continued to focus on its core business, invest in growth markets and deliver considerable earnings growth1 in the completed financial year 2015/16. The Group outperformed its earnings (underlying EBITA) guidance despite many geopolitical challenges and crises. The world’s leading tourism group based in Hanover reports an operating result of 1.001 billion euros (previous year 953 million euros) – excluding the specialist unit Travelopia, which is available for sale as announced and is accounted for as discontinued operation. At constant exchange rates the increase amounts to 14.5 per cent to 1,092 billion euros, including foreign exchange translation growth is 5.0 per cent. Including the result from specialist unit Travelopia underlying EBITA climbed to 1.126 billion euros. At constant exchange rates earnings improved by 12.5 percent, with foreign exchange translation the increase was 2.9 percent year-on-year.

In December 2015, TUI had announced its guidance of underlying EBITA CAGR of at least ten per cent for the next three financial years to 2017/18. At the presentation of the annual results, the Executive Board announced an extension of the earnings guidance by one year to 2018/19.

Regarding the annual results Fritz Joussen, CEO TUI Group, explains: “TUI is in good shape, the course is set for growth. We are in a strong position in Europe, continue our expansion, in particular in Mexico and the Caribbean, and seek to benefit from the growth momentum in other parts of the world, where more people are discovering leisure travel. Thanks to the global strength of the TUI brand, it offers great potential internationally. We invest in hotels and cruises with their strong growth and margin potential, and consistently continue TUI’s transformation initiated in 2014. We extend our earnings guidance to 2018/19 and aim to continue to deliver underlying EBITA CAGR of at least ten per cent1 in the next three financial years,” said Joussen. He also emphasized the fact that the transformation from a tour operator and distributor to a designer, developer and operator of holiday concepts, hotels and cruise vessels with a strong sales organisation, initiated in 2014, is paying off. These areas offer higher margins than the mere trading business. Joussen said: “The Executive Board’s strategy has been confirmed. This transformation will create a new TUI: exceptional holiday experiences for our guests, value for our shareholders, and internationally attractive prospects for our people in more than 100 countries.”

Dividend: Executive Board and Supervisory Board propose 0.63 euros per share 
The development of TUI Group’s dividend is linked to the Group’s underlying EBITA at constant currency. An additional bonus of 10 per cent is paid on the base dividend for the prior financial year (0.51 euros). The strong underlying EBITA growth by continuing operations of 14.5 per cent1 plus the additional 10 per cent bonus on the base dividend thus lead to a dividend of 0.63 euros per share. The Executive Board and the Supervisory Board will submit a corresponding proposal to the Annual General Meeting on 14 February 2017.

Outlook TUI Group: EBITA growth guidance extended – delivering further transformational growth 
TUI Group is on track to continue its profitable growth in the long run. Having completed the disposal of Hotelbeds Group and with the disposal process for the specialist travel unit Travelopia underway, the Group focuses on delivering transformational growth in its own hotel and cruise brands as an integrated tourism group. Fritz Joussen: “Despite continued geopolitical crises and macroeconomic challenges, we have withdrawn from the trend of the industry and delivered considerable earnings growth. Our strategy as a tourism group with a vertically integrated model and the consistent transformation of our Group with a focus on our own hotel and cruise brands are increasingly paying off.”

Development of the Tourism segment in the period under review 
In Tourism, growth was driven by source market TUI UK & Ireland, Western Region and the Hotels & Resorts and Cruises segments, delivering significant growth in earnings.

The Northern Region (UK & Ireland, Nordics, Canada, Russia) benefited from source market TUI UK & Ireland, which delivered a strong performance. Customer volumes in the market grew by four per cent in the period under review. Both occupancy and margins were improved. The source market also launched a new cruise ship, TUI Discovery. Earnings by the Nordics reflected restrained demand to Turkey. The programme was largely remixed to alternative destinations; however, this did not fully mitigate the impact of the decline in demand. Earnings by the Nordics also included upfront costs in respect of the TUI brand migration. Underlying EBITA by Northern Region grew to 556 million1 euros (previous year 538 million euros). Including foreign currency translation, underlying EBITA totalled 461million euros.

In source market Germany, market conditions remained challenging. Margins in Central Region (Germany, Austria, Switzerland, Poland) were impacted by the decline in demand to Turkey. At the same time, however, Germany managed to deliver further cost savings and grow market share. It also delivered an improvement in direct distribution mix to 45 per cent (+2 percentage points year-on-year) and in online mix to 14 per cent (+1 percentage point year-on-year). Earnings by the Region amounted to 89 million1 euros (previous year 103 million euros) including the impact of a decision by the EU Commission regarding certain past agreements of Hapag-Lloyd Express GmbH with Klagenfurt Airport in Austria. Moreover, the impact of unexpectedly high levels of sickness among TUI fly flight crews was also partially included.

Earnings by Western Region (Netherlands, Belgium, France) were characterised by a positive performance in France. The restructuring there delivered successes and France benefited from a remix of the programme away from North Africa. At the same time, the Netherlands also delivered a very positive performance following the successful TUI brand migration in October 2015. Customer volumes in the Netherlands grew by 3 per cent, direct distribution mix climbed to 71 per cent, and online distribution mix rose to 50 per cent. Overall, underlying EBITA by Western Region grew to 86 million euros year-on-year (69 million euros).

At 15.99 billion1 euros, combined turnover for all Regions was higher year-on-year (15.80 billion euros); underlying EBITA rose to 731 million1 euros (previous year: 711 million euros). Including foreign currency translation, underlying EBITA was 10.6 per cent down year-on-year to 635 million euros.

Hotels & Resorts: Operating result +22,5% - Growth driven by Riu hotels
The strong performance of the Hotels & Resorts segment was primarily driven by core brand Riu. Riu hotels achieved a 4 percentage point increase in occupancy on a 1 per cent increase in capacity. Overall, the segment also benefited from the Group’s vertical integration, with an increase in the operating result of an additional 20 million euros driven by occupancy improvements. Underlying EBITA by the segment grew to 287 million euros in the period under review (previous year 235 million euros), up 22.5 per cent. At constant exchange rates underlying EBITA even improved to 291 million euros. Turnover by the segment climbed by 7.6 per cent to 619 million euros (previous year 575 million euros).

Cruises remain growth driver and will be further expanded
At the same time, the Cruises segment remains a growth driver for TUI Group. In the completed financial year, Cruises recorded significant growth in earnings. For TUI Cruises, “Mein Schiff 4” completed its first full year in operation; in Summer 2016, the fleet was expanded with the launch of newbuild “Mein Schiff 5”. TUI Cruises will launch “Mein Schiff 6” in the current financial year, and two additional newbuilds will be launched in 2019. Following its turnaround last year, Hapag-Lloyd Cruises delivered earnings growth of 17 million euros. The average daily rate was increased by 8 per cent. The modernisation of the fleet operated by Hapag-Lloyd Cruises with two new luxury expedition ships will take place in 2019. Overall, Cruises delivered underlying EBITA of 130 million euros (previous year 81 million euros).

Group turnover improves +1.4 per cent 
At 17.76 billion euros, Group turnover2 was 1.4 per cent higher year-on-year (17.52 billion euros) at constant exchange rates. Including negative foreign exchange translation Group turnover was 1.9 per cent lower at 17.19 billion euros.

Further merger synergies delivered
In financial year 2015/16, further synergies announced in the framework of the merger at the end of 2014 were delivered. Synergies worth 60 million euros were delivered in the period under review. This includes 30 million euros from corporate streamlining, 20 million euros from occupancy improvements and 10 million from the restructuring of Destination Services. The Group expects the remaining 20 million euros to be delivered in the current financial year 2016/17.



1 at constant exchange rates
2 continued operations excluding Hotelbeds Group and Travelopia

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