Successful start to the new financial year for TUI / Turnover and earnings improved in Q1 / Positive prospects / Booked turnover for the summer season increases by almost 11 per cent
| Service |
Other Topics
Interim Report I/2005
more...
Hanover, May 10, 2005
TUI AG has had a successful start to the new financial year. Europe's leading tourism group achieved an increase in turnover and improved earnings by divisions year-on-year. In view of the typical seasonal character of the tourism business, the first quarter regularly closes negatively.
Accounting in accordance with new IFRS standards
Mandatory application of new IFRS accounting standards resulted in changes in the disclosure and measurement of several items of the profit and loss statement and the balance sheet and the previous year's comparative figures in the first quarter of 2005.
Earnings by divisions (adjusted) up 8.4 per cent year-on-year
Earnings by divisions (EBTA), adjusted for the effects of the IFRS changes as well as unusual expenses and income, rose by 8.4% year-on-year to -208 million euros.
Earnings of continuing operations improves
The continuing operations tourism and shipping as well as central operations reported a 13.0 per cent improvement in earnings for the first quarter of 2005 to -261 million euros. This was generated by a 6.3 per cent improvement in earnings in tourism and a 13.6 per cent increase in earnings in shipping. Moreover, central operations was reducing costs, also reporting improved earnings year-on-year.
Earnings of the discontinuing operations, trading and special logistics, to be divested in the course of the year, halved to 26 million euros in the first quarter. This development was due to the divestments in special logistics completed in 2004 and the expected lower earnings in the trading sector.
Turnover of continuing operations increases year-on-year
The TUI Group's continuing operations (tourism, shipping, central operations) generated turnover of 3.23 billion euros in the first quarter of 2005, up 8.0 per cent year-on-year (2.99 billion euros). This growth was attributable to 6.7 per cent growth in tourism and 16.4 per cent growth in shipping. The discontinuing operations (trading, special logistics) reported turnover of 0.35 billion euros in the first quarter of 2005, a 33.0 per cent decline year-on-year. This reduction in turnover had been expected and resulted from the divestments in special logistics completed in the previous year.
Tourism continues upward trend
In the first quarter of 2005, the tourism division performed better than in the previous year. 3.78 million customers chose the tourism products of the TUI Group. Earnings by the division were negative due to the seasonal nature of the business but improved by 6.3 per cent to -192 million euros (previous year: -205 million euros). Turnover climbed by 6.7 per cent to 2.52 billion euros.
The strongest growth was recorded by the Central Europe sector (Germany, Austria, Switzerland, and airlines Hapag-Lloyd Flug and Hapag-Lloyd Express). Customer numbers climbed to a total of 1.73 million, following 1.50 million in the previous year's comparative period due to the inclusion of the seat-only business of Hapag-Lloyd Express. Turnover increased by 11.8 per cent to 0.94 billion euros (previous year: 0.84 billion euros). This growth mainly resulted from an increase in turnover in Germany, where the previous year's positive trend in the market for holiday tours consolidated. Earnings of the sector improved by 14.9 per cent to -86 million euros, primarily due to good tour operator business. Hapag-Lloyd Express also improved its quarterly earnings.
The Northern Europe sector (UK, Ireland, Nordic countries, and the airlines Britannia Airways UK, Britannia Airways Nordic and Thomsonfly) reported an overall satisfatory trend in the first quarter of 2005. The total number of customers stood at 1.18 million, compared with 1.09 million in the previous year. Turnover grew by 5.5 per cent to 0.90 billion euros. This was largely due to the positive trend in the tour operator business in the UK which more than compensated for the dip in turnover in the Nordic countries in the wake of the tsunamis in Asia. In Ireland, turnover matched the previous year's level. Earnings by the sector dropped from -98 million euros in the previous year to -106 million euros which, however, was due to the first-time inclusion of the low-cost carrier Thomsonfly in the sector's figures. Excluding Thomsonfly, earnings in the UK and the Nordic countries developed positively and exceeded the previous year's levels in both regions.
The Western Europe sector (France, Netherlands, Belgium, and the airlines Corsair and TUI Airlines Belgium) achieved a 13.1 per cent increase in customer numbers to 0.87 million. Turnover grew by 4.7 per cent to 0.53 billion euros. This was mainly due to the increase in turnover in source markets France and Belgium. Earnings by the sector dropped to -19 million euros from -11 million in the previous year, since the improvements in the Netherlands did not fully offset the decline in France, and figures for Belgium comprised the seasonally negative flight opreations for the first time in the first quarter of 2005.
The destinations sector (incoming agencies and hotel companies) generated turnover of 89 million in the first quarter of 2005. The 10.1 per cent decline was mainly due to the divestment of the Anfi Group in 2004. Earnings by the sector, in contrast, almost tripled to 23 million euros. This was attributable to the improvement in the operating result of the hotel companies, on the one hand, and the first-time full yearconsolidation of a Turkish hotel company as well as the first-time consolidation of three Spanish clubs, on the other.
The Other tourism sector (business travel and IT services companies) achieved turnover of 61 million euros in the first quarter of 2005, matching the previous year's level. Earnings totalled -4 million euros, following -3 million euros in the previous year.
Shipping continues positive trend
The shipping division (Hapag-Lloyd Container Linie and Hapag-Lloyd Kreuzfahrten) continued the previous year's positive trend in the first quarter of 2005. The transport volume rose by 12 per cent, with average freight rates also up by 12 per cent. As a result, turnover increased by 16.4 per cent overall to 0.67 billion euros. This growth was almost exclusively due to the increase in turnover in container shipping. Earnings by the division totalled 25 million euros, up 13.6 per cent year-on-year.
Central operations benefit from cost reductions
Central operations (corporate centre functions, real estate companies, industrial activities) reported turnover of 44 million euros. Earnings improved to -94 million euros (previous year: -117 million euros) as the costs of central operations were reduced with virtually unchanged interest results.
In the trading sector the US steel service companies of Preussag North America, Inc. (PNA) successfully closed the first quarter of 2005. Turnover rose by 23.3 per cent to 0.25 billion euros. However, purchasing prices increased significantly year-on-year. As a result, the previous year's record result was not repeated, with quarterly earnings falling by 36.0 per cent year-on-year to 16 million euros.
Positive prospects – Booked turnover for the summer season up by almost 11 per cent
Last year's positive trend continues in tourism. Bookings for the 2005 summer season have got off to a good start. They are above the previous year's levels - in some cases significantly - in virtually all source markets. At Group level, the number of customers, comprising the low cost airlines included for the first time, has risen by 19.7 per cent, with booked turnover 10.8 per cent up on the previous year. The tourism summer business of TUI, excluding the low cost airlines, grew strongly as well and with an increase in customer numbers of 8.6 per cent and growth in booked turnover of 9.5 per cent so far. TUI therefore continues to assume a double-digit percentage increase in tourism earnings for the 2005 financial year.
Prospects for the further course of 2005 are also favourable overall for container shipping. Experts expect the increase in demand for container transports to continue, and Hapag-Lloyd will be able to benefit from this trend by expanding its capacity. In the light of continually high freight rates, the TUI Group expects the high earnings levels in shipping to continue in the 2005 financial year.
As TUI's CEO Michael Frenzel points out: 'Following a number of difficult years, we are now reaping the fruits of our labour. We are well positioned in tourism and shipping, our core businesses, and continue to grow. I therefore expect us to make good progress towards our medium-term earnings objectives in 2005.
Turnover by divisions
| € million | Q1 2005 | Q1 2004 | Var. % |
|---|---|---|---|
| Tourism | 2,515.7 | 2,358.8 | + 6.7 |
| Central Europe | 939.6 | 840.7 | + 11.8 |
| Northern Europe | 895.2 | 848.2 | + 5.5 |
| Western Europe | 531.0 | 507.3 | + 4.7 |
| Destinations | 89.2 | 99.2 | - 10.1 |
| Other tourism | 60.7 | 63.4 | - 4.3 |
| Shipping | 668.6 | 574.6 | + 16.4 |
| Central operations | 43.9 | 56.1 | - 21.7 |
| Continuing operations | 3,228.2 | 2,989.5 | + 8.0 |
| Trading | 245.9 | 199.4 | + 23.3 |
| Special logistics | 106.6 | 326.8 | - 67.4 |
| Discontinuing operations | 352.5 | 526.2 | - 33.0 |
| Turnover by divisions | 3,580.7 | 3,515.7 | + 1.8 |
Earnings by divisions
| € million | Q1 2005 | Q1 2004 | Var. % |
|---|---|---|---|
| Tourism | - 192 | - 205 | + 6.3 |
| Central Europe | - 86 | - 101 | + 14.9 |
| Northern Europe | - 106 | - 98 | - 8.2 |
| Western Europe | - 19 | - 11 | - 72.7 |
| Destinations | 23 | 8 | + 187.5 |
| Other tourism | - 4 | - 3 | - 33.3 |
| Shipping | 25 | 22 | + 13.6 |
| Central operations | - 94 | - 117 | + 19.7 |
| Continuing operations | - 261 | - 300 | + 13.0 |
| Trading | 16 | 25 | - 36.0 |
| Special logistics | 10 | 27 | - 63.0 |
| Discontinuing operations | 26 | 52 | - 50.0 |
| Earnings by divisions (EBTA) | - 235 | - 248 | + 5.2 |
| Unusual expenses and income | – | + 18 | – |
| Measurement of conversion options | - 27 | - 39 | + 30.8 |
| EBTA (adjusted) | - 208 | - 227 | + 8.4 |
For further information please contact:
Björn Beroleit, phone +49 511 566-1310
Nicola Gehrt, phone +49 511 566-1435