TUI announces medium-term earnings growth programme Conversion to registered shares / Dividend proposal of 77 cents per no-par value share
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Annual General Meeting 2005
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Hanover, May 11, 2005
TUI AG, Europe's leading tourism Group, aims at almost doubling its operating result in tourism, its core business, in the next few years. This was announced by TUI's CEO Dr Michael Frenzel to shareholders at today's Annual General Meeting in Hanover. 'We have got off to a good start to the year 2005. For the year as a whole, we assume a double-digit percentage increase in tourism earnings to be possible, said Frenzel.
Medium-term increase in earnings to 700 million euros in tourism
'In the medium term, we are intending to almost double earnings by tourism as against 2004 levels to EBTA of approx. 700 million euros. As far as we are concerned, the medium-term perspective implies the period until 2008', said Frenzel in his speech to the Annual General Meeting. This is to be achieved by means of a comprehensive programme to boost earnings. Frenzel said: 'In order to achieve this improvement in earnings, we are currently working on a large number of well-defined individual measures at all stages of the tourism value chain.' The programme focuses on sustainable cost reductions and an increase in efficiency. Achieving this goal naturally depends on a steady positive development of the market environment and further moderate market growth.
Following cost savings of approx. 500 million euros already implemented since 2001, a further 150 million euros are to be saved through cost reductions and more efficient production alone. As Frenzel pointed out, corresponding programmes have already been launched in source markets Germany and UK. Frenzel announced that the measures include changes in the work organisation and an optimisation of distribution costs. As TUI's CEO pointed out, the cost containment measures will not focus on reductions in staffing levels.
In Frenzel's view, additional earnings potential can be tapped by means of ’strengthening vertical integration of the value chain'. By way of example, 21 hotels with more than 13,000 beds will be opened in 2005. A further 13 hotels with more than 6,000 beds will be opened in 2006. Activities also focus on the further expansion of online activities. ’Over the next few years, we expect the online segment to offer a considerable potential for growth, including earnings growth', said TUI's CEO. He expects this sector alone to entail a further earnings potential of up to 35 million euros annually.
Conversion into registered shares
In his presentation, Frenzel asked the shareholders for their approval of the conversion of bearer shares into registered shares. ’This facilitates communication with our shareholders', said TUI's CEO. Another reason for the conversion is that registered shares will make it easier for TUI to prove that the majority of shares in TUI AG are held by EU nationals. This evidence is required to obtain the operating licenses for the Group's airlines under transport legislation.
Dividend proposal of 77 cents per share, as before
Frenzel proposed a dividend of 77 cents per no-par value share to the Annual General Meeting, as already paid last year. ’This means maintaining the high dividend level, which we even managed to retain in previous, weaker years', said TUI's CEO.
The transmission of the CEO's speech is available here.
For further information please contact:
Björn Beroleit, phone +49 511 566-1310
Nicola Gehrt, phone +49 511 566-1435