TUI Travel – Key figures
€ million | Q2 2009 | Q2 2008 restated | Var. % | H1 2009 restated | H1 2008 restated | Var. % |
|---|---|---|---|---|---|---|
| Turnover | 4,007.9 | 4,575.5 | - 12.4 | 6,922.3 | 8,041.2 | - 13.9 |
| Divisional EBITA | 55.2 | - 159.7 | n/a | - 309.1 | - 484.8 | + 36.2 |
| Gains on disposal | – | – | – | – | ||
| Restructuring | + 7.4 | + 190.6 | + 34.9 | + 217.7 | ||
| Purchase price allocation | + 11.1 | + 13.9 | + 21.6 | + 56.5 | ||
| Other one-off items | + 24.3 | + 27.6 | + 61.4 | + 43.3 | ||
| Underlying divisional EBITA | 98.0 | 72.4 | + 35.4 | - 191.2 | - 167.3 | - 14.3 |
| Capital expenditure | 62.4 | 85.9 | - 27.4 | 117.1 | 150.4 | - 22.1 |
| Headcount (30 June) | – | – | – | 50,391 | 51,230 | - 1.6 |
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Turnover and earnings
In the second quarter of 2009, turnover by TUI Travel decreased 12% year-on-year. The decline in turnover was due to lower volumes and corresponding capacity cuts, above all in the volume business, and the year-on-year weakening of the exchange rate of the British pound against the euro. Accumulated turnover for the first half of the year totalled €6.9bn, down 14% year-on-year.
Operating earnings by TUI Travel rose by €26m year-on-year in the second quarter. This increase resulted in particular from the timing of Easter with the Easter business falling in the second quarter. Accumulated earnings for the first half of the year fell by €24m to €-191m.
As expected, demand for holiday tours was again impacted by the economic environment in all volume markets in the second quarter. Despite a decline in bookings, both pricing and load factors were kept at high levels thanks to active capacity management.
In the second quarter of 2009, TUI Travel had to carry adjustments totalling €43m for the following special one-off effects:
- restructuring costs of €7m, arising in particular on restructuring tour operator activities in France
- effects of €11m from purchase price allocations, and
- one-off effects of €24m, in particular integration costs incurred for tour operator and incoming activities.
Reported earnings by TUI Travel grew by €215m year-on-year to €55m in the second quarter. This was mainly attributable to the inclusion of the cost of the strategic realignment of TUI Travel’s flight operations in 2008 figures. Accumulated earnings for the first half of 2009 rose by €176m.
Mainstream
Mainstream, the largest sector within TUI Travel, comprises sales of flight, accommodation and other tourism services in the three source markets Central Europe, Northern Region and Western Europe.
TUI Travel – Mainstream volumes
| ‘000 | Q2 2009 | Q2 2008 restated | Var. % | H1 2009 | H1 2008 restated | Var. % |
|---|---|---|---|---|---|---|
| Central Europe | 2,650 | 2,957 | - 10.4 | 4,183 | 4,912 | - 14.8 |
| Northern Region | 1,908 | 2,387 | - 20.1 | 3,095 | 3,782 | - 18.2 |
| Western Europe | 1,407 | 1,577 | - 10.8 | 2,172 | 2,579 | - 15.8 |
| Total | 5,965 | 6,921 | - 13.8 | 9,450 | 11,273 | - 16.2 |
Central Europe
In the Central Europe sector (Germany, Austria, Switzerland, Poland with airline TUIfly) customer volumes decreased by 10% year-on-year in the second quarter due to the reduced TUIfly capacity. Profit contributions rose since price-reduced offerings accounted for a lower proportion of the volume sold and the Easter business fell in the second quarter. TUI Suisse reported a continued decline in margins in the second quarter due to the intensified competition in the Swiss travel market. In Austria, TUI Austria benefited from synergies from the merger of TUI and First Choice activities, on lower customer volumes. Following the substantial growth achieved in 2008, TUI Poland recorded a decline in demand in the second quarter of 2009, in particular due to the weaker exchange rate of the Polish zloty against the euro.
Northern Region
In the Northern Region sector (UK, Ireland, Canada, Nordic countries with airlines First Choice Airways, Thomsonfly and TUIfly Nordic) customer volumes declined by 20% year-on-year in the second quarter of 2009, roughly matching capacity cuts. The UK recorded strong business in the lates market, creating margin improvements and a year-on-year increase in load factors. In contrast, the Nordic TUI tour operators again saw their business impacted by the weaker consumer climate in Sweden and Denmark. However, compared with the winter season, bookings for the summer of 2009 have improved substantially. Business in the Canadian travel market, characterised by overcapacity, remained unsatisfactory.
The integration of activities in the UK market continued to progress according to plan in the second quarter, and synergies were therefore delivered as expected.
Western Europe
The Western Europe sector (France, the Netherlands, Belgium with airlines Corsairfly, Arkefly and Jetairfly) recorded a decrease of 11% in customer volumes in the second quarter of 2009. TUI’s tour operators in France recorded a weakening of demand due to the economic environment and remained affected by the adverse effects of the political unrest in Guadeloupe and Madagascar. TUI tour operators in the Netherlands also reported declines in volumes. TUI activities in Belgium benefited from stable demand and an improved cost base of TUI’s own airline, reporting a positive business development in the second quarter.
Specialist & Emerging Markets
The Specialist & Emerging Markets sector, which consists of specialist tour operators in Europe, North America and emerging markets such as Russia, reported a year-on-year decrease in customer volumes of 11% at 293 thousand customers in the second quarter of 2009. The specialist tour operators in Continental Europe reported a positive development of business. The premium segment in the UK continued to show a positive development in the second quarter, with long-haul tours, in particular, benefiting from the integration of the former TUI entities and First Choice. While capacity was cut year-on-year, the TUI Travel business in North America was impacted by a decline in demand for expedition tours.
Activity
The Activity sector, which comprises travel companies offering active holidays in the Marine, Adventure as well as Ski, Student & Sport segments, recorded a clearly positive business performance in the second quarter. Growth resulted in particular from the profit contributions of the tour operators newly acquired in 2008. The increase was also attributable to the integration of the skiing business of TUI and First Choice as well as cost savings.
Accommodation and Destination (A&D)
The online services and incoming agencies, formerly forming the Online Destination Services sector, have been carried under ‘Accommodation and Destination’ (A&D) as of the second quarter of 2009. Online Services continued the gratifying development achieved in 2008. Earnings by incoming agencies fell year-on-year due to a decline in customer volumes and a weakening of the excursion business in Spain.
Further Information
- Tourism (Download)