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TUI AG / Annual Financial Report
TUI AG: Annual Financial Report - Part 1
08-Dec-2016 / 08:00 CET/CEST
Dissemination of a Regulatory Announcement, transmitted by EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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8 December 2016
TUI GROUP
Full year results to 30 September 2016
- We have delivered a second year of strong performance post-merger with
12.5% increase in underlying EBITA including Travelopia or 14.5% for
continuing operations1.
- Our sustained strong performance is a clear demonstration of the
success of our growth strategy and the strength of our competitive
position.
- We believe our strategy creates value for our customers, our people and
our shareholders alike, and we remain committed to paying an attractive
dividend, proposed at 63 cents per share in respect of 2015/16.
- Having completed the disposal of Hotelbeds Group in September, and with
the disposal process for Travelopia underway, we are focussed on
delivering transformational growth in our own hotel and cruise brands,
supported and enabled by a strong and flexible balance sheet.
- Current trading for Winter 2016/17 and Summer 2017 remains in line with
our expectations.
- Based on our roadmap for growth and current trading, we expect to
deliver at least 10% growth in underlying EBITA in 2016/171, and extend
our previous guidance of at least 10% underlying EBITA CAGR to
2018/191.
- This balanced guidance is a clear demonstration of the confidence we
have in our growth strategy, against what continues to be an uncertain
geopolitical and macroeconomic backdrop.
KEY FINANCIALS
Year ended 30
September
EURm 2016 2015 Restated2 Change Constant
% currency change
%1
Turnover - 17,185 17,515 -1.9% +1.4%
continuing
operations
Underlying EBITA 1,001 953 +5.0% +14.5%
- continuing
operations
Underlying EBITA 1,030 1,001 +2.9% +12.5%
- including
Travelopia
Reported EBITA - 898 795 +13.0% +24.4%
continuing
operations
Pro forma 0.86 0.84 +2.4% +15.5%
earnings per
share3
Normalised 944 794 +18.9% n/a
operating cash
flow4
Return on 21.9% 22.4% -0.5pp n/a
invested capital ts
(ROIC)5
Dividend per 63 cents 56 cents +12.5% n/a
share
Note: In order to explain and evaluate the operating performance by the
segments, EBITA adjusted for one-off effects (underlying EBITA) is
presented. Underlying EBITA has been adjusted for gains/losses on disposal
of investments, restructuring costs according to IAS 37, ancillary
acquisition costs and conditional purchase price payments under purchase
price allocations and other expenses for and income from one-off items.
Reported EBITA comprises earnings before net interest result, income tax
and impairment of goodwill excluding the losses on container shipping
measured at equity and excluding the result from the measurement of
interest hedges.
1 Assuming constant foreign exchange rates are applied to the result in the
current and prior period.
2 Prior year figures restated, including the treatment of Hotelbeds Group
and Travelopia as discontinued operations. Further explanation is included
on page 6.
3 Please refer to Earnings Per Share section on page 7.
4 Operating cash flow pre net capex and investments and dividend payments,
assuming normalised working capital inflow and excluding additional UK
pension top-up of EUR174m in 2015/16.
5 ROIC (return on invested capital) is calculated as the ratio of
underlying EBITA to the average for invested interest bearing capital for
the Group or relevant segment.
Annual Report 2015/16 and Investor & Analyst Presentation and Webcast
A full copy of our Annual Report 2015/16 can be found on our corporate
website: http://www.tuigroup.com/en-en/investors. A presentation and
webcast for investors and analysts will take place today at 09:30 GMT /
10:30 CET. The presentation will be made available via our website shortly
beforehand. Details of the webcast, which will be available for replay,
will also be available there.
SECOND YEAR OF STRONG PERFORMANCE POST-MERGER
In EURm
Underlying EBITA 2014/15 1,069
Prior year restatement (including Hotelbeds & Travelopia treated as -116
discontinued)2
Underlying EBITA restated 2014/15 953
Underlying trading +114
Turkey / North Africa -50
Merger synergies +60
Aircraft & Europa 2 financing +15
Underlying EBITA 2015/16 excluding FX 1,092
Foreign exchange translation -91
Underlying EBITA 2015/16 1,001
Results in the current and prior year have been restated to include
Destination Services within Other Tourism, to reclassify Crystal Ski and
Thomson Lakes & Mountains from Travelopia to Northern Region, and to
include both Hotelbeds Group and Travelopia as discontinued operations. For
further explanation of restatements please see page 6.
- Within the Source Markets, underlying EBITA was EUR635m (2014/15:
EUR711m) or EUR731m excluding EUR96m negative foreign exchange
translation. The Source Markets continue to build on their strength in
direct distribution and direct relationship with the customer. In
2015/16 direct distribution mix increased by two percentage points to
72% and online mix increased by two percentage points to 43%.
- Northern Region underlying EBITA was EUR461m (2014/15: EUR538m) or
EUR556m excluding EUR95m negative foreign exchange translation:
- The UK delivered a strong operating performance, with customer
volumes up over 4% and an increase in load factor. This was driven
by the strength of customer demand for our unique holidays, with
growth across short, medium and long haul, and the launch of our
new ship TUI Discovery. We have also made further significant
progress in increasing online distribution, with 58% of UK holidays
booked online this year, up four percentage points.
- The Nordics result this year was adversely impacted by lower demand
for Turkey, having more than halved in size as a destination. A
significant proportion of the programme was remixed to alternative
destinations, however, this did not fully mitigate the impact and
customer volumes overall fell as a result. Further progress has
been delivered in respect of online, which accounted for 75% of all
bookings in the year. The result also includes some upfront costs
in respect of the TUI brand migration, which commenced at the start
of November 2016 and is progressing well.
- In Canada, Winter margins came under pressure as a result of the
unfavourable movement in the Canadian dollar exchange rate.
However, the Summer result improved on prior year due to continued
growth in unique content.
- Central Region underlying EBITA was EUR88m (2014/15: EUR103m) or EUR89m
excluding negative foreign exchange translation:
- In Germany, market conditions remained challenging and margins were
adversely impacted by subdued demand for Turkey. Despite this, we
continued to grow market share in the year, building on the
strength of the TUI brand. We have also delivered an improvement in
direct distribution mix to 45% (up two percentage points) and in
online mix to 14% (up one percentage point), and continue to
deliver further savings as a result of restructuring programmes,
including the alignment of our operations in Germany and Austria.
- The result includes the impact of a court ruling in November
regarding airport services and marketing agreements with an
Austrian airport, and the partial impact on holidays commenced in
September of unexpectedly high levels of sickness among TUIfly
flight crew.
- Our priorities in Germany are to build scale through growth in
market share with a broader product offering, increase direct and
online distribution and improve operational efficiency. On the
latter, TUI AG's Supervisory Board has approved the plan to
contribute its German leisure airline subsidiary TUI fly GmbH to a
joint venture with Etihad, together with the leisure operations of
Air Berlin and including Air Berlin's participation in NIKI. It is
intended that this will create a new airline joint venture with
around 60 aircraft and a seat capacity of 15 million seats per
year, operating from key departure airports in Germany, Austria and
Switzerland. It is expected that TUI AG will hold a stake of 24.8%
in the joint venture, with Etihad holding 25% of the interests and
the remaining 50.2% held by the existing private foundation NIKI
Privatstiftung. Details regarding the joint venture will be jointly
presented by Etihad and TUI after successful completion of the
negotiations.
- Western Region underlying EBITA improved to EUR86m (2014/15: EUR69m):
- The result in France improved significantly following delivery of
restructuring and remix of the programme away from North Africa. In
addition, Netherlands delivered a good performance following the
TUI brand migration in Autumn 2015, with a 3% increase in customers
and further increases in direct and online distribution mix to 71%
and 50% respectively.
- These were partly offset by the difficult trading environment in
Belgium following the Brussels attack, particularly for package
holiday sales. Trading for subsequent seasons has improved and is
also being helped by the TUI brand migration which commenced in
October 2016.
- The acquisition of Transat's French tour operating business
completed at the end of October 2016 and is expected to further
improve the profitability of this source market.
- In Hotels & Resorts, underlying EBITA increased to EUR287m (2014/15:
EUR235m) or EUR291m excluding EUR4m negative foreign exchange
translation:
- In line with our plans to grow our own hotel brands, we have opened
a further seven hotels this year, and a further two were
repositioned from other brands into TUI Blue. In total 18
additional hotels have been opened since the end of 2013/14 in our
core brands, and we intend to open circa 40 to 45 additional hotels
by the end of 2018/19.
- Riu delivered a strong performance in the year, with underlying
EBITA up EUR68m (excluding EUR11m negative foreign exchange
translation), a 4% point improvement in occupancy, 1% increase in
capacity and 6% increase in average revenue per bed. Spain, Cape
Verde and Caribbean have performed particularly well.
- We have delivered an additional EUR20m benefit from occupancy
improvement in the year, hitting our merger target in full. This
clearly demonstrates the benefits of our vertically integrated
model.
- However, as expected, earnings for hotels in Turkey and North
Africa have been adversely impacted by reduced demand following
geopolitical events. This is estimated to have impacted the result
by around EUR50m in the year, compared with 2014/15.
- ROIC for Hotels & Resorts increased from 10.5% to 12.3% in the
year.
- In Cruises, underlying EBITA increased to EUR130m (2014/15: EUR81m):
- TUI Cruises delivered EUR32m growth in earnings with the full year
impact of Mein Schiff 4 and the launch of Mein Schiff 5 in July
2016. Average daily rate and occupancy across the fleet also remain
very strong. We will launch Mein Schiff 6 in Summer 2017, with a
further two deliveries to come in 2018 and 2019, at which point we
intend to move Mein Schiff 1 and 2 into the UK market.
- Hapag-Lloyd Cruises delivered EUR17m growth in earnings, following
completion of their turnaround last year. Fleet performance
continues to improve, including an 8% increase in average daily
rate. The result also includes the benefit of refinancing Europa 2.
- ROIC for Cruises increased from 17.3% to 21.3% in the year.
- In Other Tourism, underlying EBITA was EUR5m (2014/15: EUR8m), or EUR1m
excluding the positive impact of foreign exchange translation. A
significantly improved performance in Corsair was offset by the impact
of lower demand to Turkey and North Africa in Destination Services and
additional IT costs in relation to strategic projects.
- All other segments underlying EBITA loss reduced to EUR56m (2014/15:
EUR81m loss), or EUR62m loss excluding the positive impact of foreign
exchange translation.
- Synergy delivery - We have delivered EUR60m additional merger synergies
in 2015/16. This includes EUR30m corporate streamlining, EUR20m
occupancy improvement in our target hotels and EUR10m as a result of
the restructuring of Destination Services into Other Tourism. We expect
the remaining EUR20m of synergies to be delivered in 2016/17.
- Strong operating cash generation - We are focussed on delivering a
strong operating cash flow performance and generated over EUR0.9bn in
2015/16 on a normalised basis (2014/15: EUR0.8bn).
- Financial targets delivered - We have delivered against our financial
targets for 2015/16 with a leverage ratio of 3.3 times (target 3.5 to
2.75 times), and an interest coverage ratio of 4.8 times (target 4.5 to
5.5 times interest). We have tightened our targets for 2016/17 to 3.25
to 2.5 times for leverage ratio and 4.75 to 5.75 times for interest
coverage.
- Committed to paying an attractive dividend - proposed at 63 cents per
share in respect of 2015/16, which reflects 14.5% growth in underlying
EBITA at constant currency on the 2014/15 base, plus the additional 10%
outlined at the time of the merger.
CURRENT TRADING & OUTLOOK
- Winter 2016/17 trading is in line with our expectations:
- Source Markets revenues up 9% with bookings up 5% and 60% of the
programme sold. Strong growth in UK long haul and cruise is partly
offset by continued pressure in Nordics and Germany as a result of
lower demand for Turkey and North Africa.
- Further openings in our hotel brands, with a new Riu in Jamaica, a
new TUI Blue in Tenerife and further expansion of our unique tour
operator concepts in third party hotels including Lanzarote,
Thailand, Mauritius and Cape Verde.
- First Winter of operations for Mein Schiff 5 and TUI Discovery
going well.
- Summer 2017 is progressing in line with our expectations:
- Most Source Markets still at very early stage - UK over 20% sold
with revenues up 16% and bookings up 9%, showing the continued
resilience in demand for our holidays;
- Openings in our hotel brands include a new Sensatori in Rhodes, a
new Robinson club in South East Asia and new TUI Blue hotels in
Croatia and Italy, as well as the continued expansion of our unique
tour operator concepts in third party hotels including Sardinia,
Croatia, Spain, Greece and Bulgaria.
- Mein Schiff 6 and TUI Discovery 2 launch next Summer, with bookings
progressing well.
- Having completed the disposal of Hotelbeds Group in September, and with
the disposal process for Travelopia underway, we are focussed on
delivering transformational growth in our own hotel and cruise brands,
supported and enabled by a strong and flexible balance sheet.
- Medium term cash flow will therefore reflect reinvestment of proceeds
from the Hotelbeds Group disposal.
- Based on our roadmap for growth and current trading, we expect to
deliver at least 10% growth in underlying EBITA in 2016/171, and extend
our previous guidance of at least 10% underlying EBITA CAGR to
2018/191.
- This balanced guidance is a clear demonstration of the confidence we
have in our growth strategy, against what continues to be an uncertain
geopolitical and macroeconomic backdrop.
CURRENT TRADING IS IN LINE WITH OUR EXPECTATIONS
Winter 2016/17
Current trading for Winter, which is the low season for most of our
businesses, is in line with our expectations. In Hotels & Resorts, where
performance is reflective of bookings made via our Source Markets, we have
a new opening for Riu in Jamaica, one new hotel for TUI Blue in Tenerife
and two repositioned hotels for TUI Blue in Austria and Germany. We also
continue to expand our unique tour operator concepts in third party hotels,
with several additions to our Sensimar and Family Life portfolio this
Winter, including Lanzarote, Thailand, Mauritius and Cape Verde.
In Cruise we continue to see strong demand for our most recent addition,
Mein Schiff 5, with a good performance across the TUI Cruises fleet.
Thomson Cruises (which is currently reported within UK trading data)
continues to benefit from the addition of TUI Discovery to the fleet, based
in the Caribbean this Winter.
With 60% of the programme sold to date, Source Market revenue is 9% ahead
of prior year, with bookings up 5%. This reflects long haul growth
(bookings up 13%), in particular in the UK with an additional 787 flying
this Winter.
Current Trading1 Winter 2016/17
YoY variation% Total Total Total Programme sold
Revenue2 Customers2 ASP2 (%)
Northern Region +14% +11% +3% 61%
UK +26% +19% +6% 57%
Nordics -5% -2% -3% 72%
Central Region +5% -2% +6% 55%
Germany +3% -4% +6% 54%
Western Region +8% +5% +3% 64%
Benelux +5% +2% +3% 63%
Total Source Markets +9% +5% +4% 60%
1 These statistics are up to 27 November 2016 and are shown on a constant
currency basis
2 These statistics relate to all customers whether risk or non-risk
In the UK, revenue is currently up 26% with bookings up 19% and 57% of the
programme sold to date, ahead of prior year. This is driven by growth
across package holidays and cruise. Sales to the Canaries and long haul
have been particularly strong, with bookings up 16% and 21% respectively.
Long haul expansion has been facilitated by the new Boeing 787-900,
delivered in Summer 2016, with Mexico, Dominican Republic and Jamaica
proving popular and new destinations added such as Cuba and Sri Lanka. Cape
Verde and Cyprus continue to grow as alternative destinations to North
Africa. This Winter season also sees the first winter operations of the TUI
Discovery and we are pleased with performance to date for the new ship.
In the Nordics, revenues are down 5% with bookings down 2% and 72% of the
programme sold to date, in line with prior year. This reflects the impact
of lower demand for Turkey in October (October is reported within Winter
for Nordics, but within Summer for other Source Markets), reduced volumes
to Egypt where demand remains subdued, and lower long haul volumes. These
have been partly offset by higher demand for the Canaries. Winter trading
is also impacted by the timing of key holidays, with Christmas falling on a
weekend (therefore less popular for departures) and the Easter holidays
falling in April (April is reported within Summer for Nordics, but within
Winter for other Source Markets). The TUI rebrand was launched in the
Nordics at the start of November 2016 and is progressing well.
In Germany, revenues are up 3% with bookings down 4% and 54% of the
programme sold to date. We are continuing to increase our market share,
despite challenging conditions. Trading reflects lower demand for Turkey,
which is a Winter destination for Germany, and for Egypt, partly offset by
growth in the Canaries (albeit with continued high levels of competition)
and long haul.
In Benelux, revenues are up 5% with bookings up 2% and 63% of the programme
sold to date, also ahead of prior year. Revenues in Belgium are up 5%, with
subdued demand for Egypt offset by increased volumes for the Canaries,
Mainland Spain and Morocco. The TUI rebrand launched in Belgium during
October 2016 and is progressing well. Netherlands revenues are also up 5%,
against strong comparatives as a result of the One Brand implementation
last year.
Summer 2017
Trading for the Source Markets is at an early stage. In line with the usual
Summer season launch dates for each Source Market, only the UK is over 20%
sold. UK revenue is up 16% and bookings are up 9%, with growth again driven
by long haul and cruise, including the launch of TUI Discovery 2. Sales for
our additional TUI Cruises ship, Mein Schiff 6, are also progressing well.
In Hotels & Resorts we are opening a new Sensatori in Rhodes, a new
Robinson club in South East Asia and new TUI Blue hotels in Croatia and
Italy, as well as continuing to expand our unique tour operator concepts in
third party hotels including Sardinia, Croatia, Spain, Greece and Bulgaria.
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 our Source Markets,
which account for over 90% of our Group currency and fuel exposure.
Winter 2016/17 Summer 2017 Winter 2017/18
Euro 95% 82% 40%
US Dollars 90% 75% 45%
Jet Fuel 92% 88% 66%
As at 2 December
2016
PRIOR YEAR RESTATEMENT
We have revised our segmental reporting for the current and prior year. The
most significant restatement relates to Hotelbeds Group. The Destination
Services result has been carved out from Hotelbeds Group and is now
reported within Other Tourism and, following the carve out, the Hotelbeds
Group result has been reclassified to discontinued operations. In addition,
the Crystal Ski and Thomson Lakes & Mountains result has been reclassified
from Specialist Group to Northern Region, in preparation for the disposal
of Travelopia. The result of Travelopia has been reclassified to
discontinued operations. Also, costs relating to IT services have been
reclassified from All Other Segments to Other Tourism, as they relate to
the Tourism businesses. Minor reclassifications have also been made from
Western and Central Region to All Other Segments
ADJUSTMENTS
Adjustments (including separately disclosed items and purchase price
allocation, for continuing operations) of EUR102m were incurred during
2015/16, a reduction of EUR57m on prior year. The following table provides
a breakdown of these items:
In EURm 2015/16 2014/15
Restructuring expense 12 59
Gains on disposals 1 -3
Other one-off items 47 61
Purchase price allocation (PPA) 42 42
Total Adjustments 102 159
Of which are merger related costs 11 39
NET INTEREST EXPENSE
Net interest expense (including expense from the measurement of interest
hedges) for the year improved by EUR3m to EUR180m net expense (2014/15: net
expense EUR183m). The improvement was driven by lower interest in relation
to convertible bonds (which converted in the prior year), offset partly by
the inclusion of EUR12m charge in the current year in respect of interest
on the October 2019 high yield bond, which we have chosen to recognise up
front. The bond was called on 19 October 2016 and redeemed in full on 18
November 2016. New senior notes with the same nominal amount were
successfully issued on 26 October 2016 with a more favourable interest
coupon. The notes will mature on 26 October 2021.
INCOME TAXES
Tax charge for the year was EUR153m (2014/15: EUR58m). Following the merger
of TUI AG and TUI Travel PLC a reassessment of deferred tax assets on tax
loss carry forwards was performed during the second quarter of 2014/15.
This led to a tax credit of EUR114m in the prior year, primarily driven by
the planned reorganisation of the German tax group. The underlying
effective tax rate (which is calculated based on underlying earnings before
tax, excluding separately disclosed items, acquisition related expenses and
impairment charges) for TUI Group therefore reduced to 25% in 2014/15 and
remained at this level in 2015/16.
PRO FORMA EARNINGS PER SHARE
The following table shows underlying earnings per share for continuing
operations on a pro forma basis. This provides like-for-like figures on a
year on year basis, adjusted for bond conversions and the merger with TUI
Travel PLC in the prior year. Earnings per share performance reflects
growth in underlying EBITA (offset partly by EUR91m adverse foreign
exchange translation). Pro forma earnings per share increased by 2.4% on
the prior year, or 15.5% excluding the negative impact of foreign exchange
translation.
Pro forma figures in EURm 2015/16 2014/15
Underlying EBITA (including prior year restatements) 1,001 953
Net interest expense (excluding convertible bond interest -180 -163
in prior year)
Underlying earnings before tax 821 790
Underlying effective tax rate 25% 25%
Tax charge -205 -197
Minority interest (excluding TUI Travel PLC in prior -111 -90
year)
Hybrid dividend - -11
Net income 504 491
Number of shares in issue as at 30.9.2016 587 587
Pro forma earnings per share in EUR 0.86 0.84
ACQUISITIONS AND DIVESTMENTS
No major acquisitions were made during 2015/16. On 31 October 2016 TUI AG
acquired Transat's French tour operating business for an enterprise value
of EUR55m, with the aim of increasing our market presence in France. A
payment of EUR65m was made, including an assumption for working capital,
subject to receipt of final completion accounts.
The Hotelbeds Group disposal was completed in September 2016 for a total
cash consideration of EUR1.2bn. Proceeds from the disposal will be
reinvested in our growth strategy for hotels and cruises, and to strengthen
the core of our business.
Travelopia (formerly part of Specialist Group) is treated as discontinued
operations, with marketing having commenced in September 2016. The disposal
process is progressing to plan.
Our 12.3% shareholding in Hapag-Lloyd AG, which will be diluted to 8.9%
following the merger of Hapag-Lloyd AG and United Arab Shipping Company, is
accounted for as an available for sale financial asset, with a viable route
to exit following the IPO at the end of 2015. As at 30 September 2016 the
fair value of our shareholding (based on the Hapag-Lloyd AG closing share
price that day) was EUR266m.
DIVIDEND
The Executive Board and the Supervisory Board are recommending a dividend
of 63 cents per share (2014/15: 56 cents per share) in respect of the
financial year 2015/16. Subject to approval at the Annual General Meeting
on 14 February 2017, the dividend will be paid to shareholders on 17
February 2017 to holders of relevant shares at close of business on 14
February 2017.
NET DEBT, RATING AND FINANCIAL TARGETS
The net cash position (cash and cash equivalents less capital market
financing, loans, overdrafts and finance leases) at 30 September 2016 was
EUR32m for continuing operations, or EUR350m including Travelopia (30
September 2015: net debt EUR214m including Travelopia and Hotelbeds Group).
The development of net cash reflects our strong operating cash flow
performance, receipt of Hotelbeds proceeds and the benefit of foreign
exchange translation, offset as anticipated by capital expenditure, pension
contributions and dividend outflows. We also added EUR350m additional asset
backed finance during the year, primarily for a new 787 aircraft and an
additional cruise ship in the UK. The net cash position of EUR32m at 30
September 2016 consisted of EUR2,073m of cash and cash equivalents (EUR129m
of which was subject to disposal restrictions), EUR1,232m of finance lease
liabilities, EUR306m high yield bond and EUR503m bank and other financial
liabilities (including owned cruise ship and aircraft finance).
Our focus on rating will allow us to obtain advantageous financing
conditions and continue to ensure access to debt capital markets. This has
already delivered benefits. Moody's upgraded TUI to Ba2 in April 2016, and
Standard & Poor's revised its outlook on TUI from Stable to Positive in
February 2016. We have delivered against our financial targets for 2015/16
with a leverage ratio of 3.3 times (target 3.5 to 2.75 times) and an
interest coverage ratio of 4.8 times (4.5 to 5.5 times interest). For
2016/17, our financial targets have been tightened - leverage ratio target
is 3.25 to 2.5 times, and interest cover target is 4.75 to 5.75 times.
In October 2016, we completed the issue of a Euro denominated senior bond,
maturing October 2021, with a coupon of 2.125%. The proceeds are used for
general corporate purposes including the refinancing of the former EUR300m
4.5% high yield bond, which was redeemed in November 2016.
OUTLOOK
Our sustained strong performance is a clear demonstration of the success of
our growth strategy and the strength of our competitive position against
what continues to be a turbulent geopolitical and macroeconomic backdrop.
We believe our strategy creates value for our customers, our people and our
shareholders alike.
Having completed the disposal of Hotelbeds Group in September, and with the
disposal process for Travelopia underway, we are focussed on delivering
transformational growth in our own hotel and cruise brands, supported and
enabled by a strong and flexible balance sheet. Our medium term cash flow
will therefore reflect the reinvestment of proceeds from the Hotelbeds
Group disposal. Based on our roadmap for growth and current trading, we
expect to deliver at least 10% growth in underlying EBITA in 2016/171, and
extend our previous guidance of at least 10% underlying EBITA CAGR to
2018/191. This balanced guidance is a clear demonstration of the confidence
we have in our growth strategy, against what continues to be an uncertain
geopolitical and macroeconomic backdrop.
The following detailed guidance is given in respect of 2016/171:
- Turnover - around 3% growth
- Underlying EBITA - balanced guidance of at least 10% growth
- Adjustments - around EUR80m
- Net interest - around EUR160m
- Net capex and investments - around EUR1bn, including the acquisition of
Transat's French tour operating business and purchase of Legend of the
Seas for Thomson Cruises. This figure excludes aircraft order book
finance.
- Year end net debt - around EUR0.8bn, reflecting investment in
transformational growth and aircraft order book finance.
- Financial targets - leverage ratio 3.25 to 2.5 times, interest coverage
4.75 to 5.75 times
1 Assuming constant foreign exchange rates are applied to the result in the
current and prior period and based on the current group structure; guidance
relates to continuing operations and excludes any disposal proceeds for
Travelopia and Hapag-Lloyd AG
ANNUAL GENERAL MEETING AND Q1 2016/17
TUI Group will hold its Annual General Meeting and issue its Q1 2016/17
Report on 14 February 2017.
ANALYST & INVESTOR ENQUIRIES
Andy Long, Director of Investor Tel: +44 (0)1293 645 831
Relations
Contacts for Analysts and Investors in UK, Ireland and Americas
Sarah Coomes, Head of Investor Tel: +44 (0)1293 645 827
Relations Tel: +44 (0)1293 645 823
Hazel Newell, Investor Relations
Manager
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 Tel: +49 (0)511 566 1435
Relations
Ina Klose, Investor Relations Manager Tel: +49 (0)511 566 1318
Jessica Blinne, Team Assistant Tel: +49 (0)511 566 1425
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The EQS Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de/ukreg
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Language: English
Company: TUI AG
Karl-Wiechert-Allee 4
30625 Hannover
Germany
Phone: +49 (0)511 566-00
Fax: +49 (0)511 566-1901
E-mail: [email protected]
Internet: www.tuigroup.com
ISIN: DE000TUAG000, DE000TUAG273, DE000TUAG281
WKN: TUAG00 , TUA G27, TUA G28
Listed: Regulated Market in Hanover; Regulated Unofficial
Market in Berlin, Dusseldorf, Hamburg, Munich,
Stuttgart, Tradegate Exchange; Open Market in
Frankfurt ; London
Category Code: ACS
LSE Ticker: TUI
Sequence Number: 3662
Time of Receipt: 08-Dec-2016 / 07:19 CET/CEST
End of Announcement EQS News Service
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527883 08-Dec-2016
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