TUI Group emerges stronger from financial year 2010/11

Turnover grew by 7 per cent to around 17.5 billion euro (previous year 16.4 billion euro). At 600 million euro, operating earnings (underlying EBITA) were 2 per cent up year-on-year (previous year 589 million euro), in spite of the impact of 83 million euro resulting from the events in North Africa. The Group result for the year was increased by 4 per cent to 118 million euro (previous year 114 million euro). The contribution by Container Shipping to TUI’s result for the year was -2 million euro (previous year 150 million euro). In financial year 2010/11, TUI achieved substantial progress in reducing its debt. Invested capital in Container Shipping was reduced by one billion euro. The Group’s net debt thus decreased by around 1.5 billion euro to 817 million euro.

For financial year 2011/12, TUI is cautiously optimistic and expects moderate growth in turnover and operating earnings. “The environment will remain challenging in the light of weaker economic growth in Europe and persistently high energy costs. Nevertheless, we are entering the new year stronger and will consistently continue to pursue our successful strategy of differentiated products“, comments TUI CEO Frenzel on the outlook. Overall, the Executive Board expects the TUI Group to post a positive Group result for financial year 2011/12.

In the period under review, TUI Travel recorded an overall positive performance. The impact of the unrest in North Africa was limited by means of flexible capacity management in all source markets with the exception of France. In the UK, in particular, TUI tour operators outperformed their competition. TUI Travel increased its turnover by more than 7 per cent to 16.9 billion euro (previous year 15.8 billion euro), primarily due to higher customer volumes in the Mainstream Business. Operating earnings (underlying EBITA) improved despite the impact of the North Africa crisis (74 million euro) to around 500 million euro (previous year 485 million euro). This represents growth of more than 3 per cent. Apart from focussing on differentiated, exclusive products, the improvement in earnings was primarily driven by the implementation of the turnaround and cost savings programmes in the UK and Canada. Reported earnings by TUI Travel climbed by around 220 million euro to 321 million euro (previous year 102 million euro). In the previous year, reported earnings primarily reflected the one-off costs of 123 million euro resulting from the volcanic eruption in Iceland.

The number of customers in Mainstream, the key Business Line, rose by more than 4 per cent to more than 20 million customers (previous year 19.5 million customers).

Total turnover by TUI Hotels & Resorts grew slightly year-on-year to around 781 million euro (previous year 772 million euro; +1 per cent). This was attributable to the improvement in occupancy of 2.7 percentage points and the rise in average revenues per bed of 1.8 per cent. Capacity was increased slightly in the period under review (+1.1 per cent). The development of earnings by TUI Hotels & Resorts was also characterised by the events in North Africa and the resulting shift in bookings to alternative destinations. Lower occupancy and margins in TUI Hotels in Egypt were not fully offset by growth in Spain and the Caribbean. However, the North Africa effect only amounts to 9 million euro overall. Operating earnings (underlying EBITA) totalled 145 million euro, almost flat year-on-year (previous year 148 million euro).

Hotels of the Riu brand, in particular, increased their occupancy rates and average revenues per bed. In the Canaries, for instance, occupancy grew by 8.8 percentage points to 91.2 per cent as a direct result of the crisis in North Africa. In the Caribbean, Riu benefited from stronger demand from North America. Overall, occupancy in Riu long-haul destinations rose by 3.5 percentage points to 79.8 per cent. TUI’s Robinson, Grupotel and Grecotel hotel brands also achieved a positive performance in the period under review. As expected, the performance of the Iberotel brand declined in Egypt because of weak bookings for North Africa.

The Cruises Sector comprises Hapag-Lloyd Kreuzfahrten and the joint venture TUI Cruises (at equity measurement; turnover not shown).

In the period under review, Hapag-Lloyd Kreuzfahrten increased its turnover by around 12 per cent to around 201 million euro. Operating earnings by the Cruises Sector (underlying EBITA) improved to around 11 million euro (previous year 8 million euro) in financial year 2010/11, despite start-up costs for fleet expansion in the Cruises Sector and the commissioning of a vessel by TUI Cruises. This constitutes earnings growth of around 47 per cent.

In the period under review, Hapag-Lloyd increased the load factor of its fleet by 3 percentage points to 76.7 per cent. The average rate per passenger per day was 422 euro, 2.2 per cent up year-on-year. In financial year 2010/11, the fleet operated by TUI Cruises recorded a load factor of 100 per cent. This represents an increase of 12.8 percentage points year-on-year. The average rate per passenger per day grew by 2.7 per cent to 152 euro.