TIDMTUI
RNS Number : 0044L
TUI AG
28 September 2016
28 September 2016
TUI GROUP
Pre Close Trading Update
Prior to entering its close period ahead of reporting its full
year results for the twelve months ending 30 September 2016 on 8
December 2016, TUI Group announces the following update on current
trading.
Chief Executive of TUI Group, Friedrich Joussen, commented:
"We are continuing to deliver our strategy as a content centric,
vertically integrated tourism group. The Summer 2016 season is
almost fully sold, with a continued strong performance by the UK,
Riu and Cruises, the launch this Summer of two additional cruise
ships and the opening of five additional hotels in our core brands.
Winter 2016/17 is trading in line with our expectations, with
further growth driven by long haul. In addition, we are pleased to
have announced the completion of the Hotelbeds Group disposal on 12
September and marketing of Travelopia (formerly part of Specialist
Group) has commenced.
As we approach our 2015/16 year end, we are therefore confident
of delivering between 12% and 13% growth in underlying EBITA(1) .
This demonstrates the strength of our integrated business model and
the success of our content centric strategy, as well as the
continued delivery of our merger synergies."
HIGHLIGHTS
Continuing to deliver our strategy as a content centric,
vertically integrated tourism group
-- Delivering our content centric strategy, with the launch of
two further cruise ships and the opening of five additional hotels
in Summer 2016, with further additions announced for future
seasons.
-- Focussing on our Tourism business, with the completion of the
Hotelbeds Group disposal for total cash consideration of EUR1.2
billion, and the commencement of marketing of Travelopia in
September.
Source Market trading remains robust
-- Summer 2016 closing out as we expected, 97% sold to date with revenue and bookings up 1%.
o Sustained strong performance by the UK, with revenue and
bookings up 5%.
o Continuing to build on our direct relationship with our
customers, with controlled mix up one percentage point to 72% and
online mix up two percentage points to 43%.
-- Winter 2016/17 trading in line with our expectations.
Overall, revenue is up 11% and bookings are up 5%, driven in
particular by UK long haul growth which in turn drives an earlier
booking profile.
Hotels & Resorts performance benefitting from popularity of
Western Mediterranean and long haul
-- We are continuing to benefit from the popularity of our
hotels in the Western Mediterranean and long haul, and delivering
further occupancy improvements in these regions as a result of
further vertical integration with the Source Markets.
-- Five additional hotels opened in Summer 2016 in our core
hotel, club and concept brands, including three long haul, with
further openings to come for Winter 2016/17 and Summer 2017.
Strong growth in Cruises and further modernisation of fleet
-- Continued strong trading by TUI Cruises, following the launch
of Mein Schiff 5 in July. Sales for Mein Schiff 6 (which launches
in Summer 2017) are also going well.
-- Further modernisation of the Thomson Cruises fleet, with the
successful launch of TUI Discovery in June and additional ship TUI
Discovery 2 for Summer 2017.
-- Expansion and modernisation of Hapag-Lloyd Cruises expedition
offering, with two new vessels scheduled for launch in the Spring
and Autumn of 2019.
Outlook - confident of achieving between 12% and 13% growth in
underlying EBITA in 2015/16(1)
-- As we approach our 2015/16 year end, we are confident of
delivering between 12% and 13% growth in underlying EBITA(1) .
-- This demonstrates the strength of our integrated business
model and the success of our content centric strategy, as well as
the delivery of our merger synergies.
-- As previously announced, we will provide a strategy update
with our full year results announcement on 8 December 2016.
(1) Assuming constant foreign exchange rates are applied to the
result in the current and prior period and treating Hotelbeds Group
as discontinued operations
CURRENT TRADING
Summer 2016
Summer 2016 trading remains in line with our expectations. 97%
of the Source Markets' programme has been sold to date, in line
with prior year, with revenue and bookings up 1%. As expected,
demand for Turkey remains lower than prior year, however, Source
Market bookings excluding Turkey are up 7%, proving the sustained
strength in underlying demand for our package holidays and the
flexibility of our model in our ability to remix capacity. We are
continuing to build on our direct relationship with our customers,
with controlled mix up one percentage point to 72% and online mix
up two percentage points to 43%.
Current Trading(1) Summer 2016
YoY variation% Total Total Total Programme sold (%)
Revenue(2) Customers(2) ASP(2)
Northern Region +3 +2 +1 98
UK +5 +5 Flat 98
Nordics -8 -10 +2 99
Central Region -1 -2 +1 96
Germany -1 -2 +1 96
Western Region Flat +2 -2 97
Benelux -1 +2 -3 96
Total Source Markets +1 +1 Flat 97
(1) These statistics are up to 18 September 2016 and are shown
on a constant currency basis
(2) These statistics relate to all customers whether risk or
non-risk
Trading in Hotels & Resorts largely reflects bookings made
through our Source Markets. The popularity of our hotels outside
Turkey and North Africa continued to drive improvement in Hotels
& Resorts' performance this Summer, and we are well placed to
benefit from the increase in demand for the Western Mediterranean
and long haul destinations. We are also continuing to deliver
occupancy improvements in these destinations as a result of further
vertical integration with the Source Markets. In Summer 2016 we
have opened five additional hotels in our core brands (one Riu and
one Sensatori in Dominican Republic, a further Riu in Sri Lanka,
plus two Robinson clubs in Greece and Turkey) and repositioned two
more as TUI Blue (both in Turkey).
Strong trading continues in TUI Cruises, following the launch of
Mein Schiff 5 in July. Sales for Mein Schiff 6 (which launches in
Summer 2017) are also going well, and we have delivered further
modernisation of the Thomson Cruises fleet, with the successful
launch of TUI Discovery in June and an additional ship, TUI
Discovery 2, planned for Summer 2017. In addition, we are expanding
and modernising the Hapag-Lloyd Cruises expedition offering, with
two new vessels scheduled for launch in the Spring and Autumn of
2019.
Winter 2016/17
Winter 2016/17 trading is in line with our expectations, with
around one third of the programme sold to date. For the Source
Markets, revenue is up 11% and bookings are up 5%, driven in
particular by UK long haul growth.
In the UK, revenue is up 29% and bookings are up 22%. This is
driven by the further expansion of our long haul programme, with an
additional 787-9 aircraft (our fourteenth 787 to date). Long haul
bookings are currently up 26%, in line with capacity increases,
with Mexico, Dominican Republic continuing to grow, and the
addition of new 787 destinations such as Cuba and Sri Lanka. Medium
haul destinations such as the Canaries, Cyprus and Cape Verde are
also performing well. This season also sees the first Winter
operations of the TUI Discovery, which will be based in the
Caribbean.
In the Nordics, revenue is down 4% against bookings down 3%,
reflecting the impact of Turkey trading for October and reduced
demand for Egypt, which has not been fully offset by increased
demand for alternative destinations. We will continue to focus on
remixing to other destinations, in line with demand. In addition,
the TUI rebrand has just been launched, with the marketing campaign
commencing in October.
In Germany, revenue is up 2% against bookings down 4%. We are
continuing to increase our market share, despite challenging
conditions. Long haul bookings (which account for around one third
of the programme) are up 10%, with growth driven by Thailand, USA
and Mexico. However, this is offset by a reduction in demand for
Turkey (which is a Winter destination for Germany) and Egypt. The
Canaries continue to grow as an alternative to these destinations,
albeit with a significant level of competition.
In Benelux, revenue is up 4% with bookings down 2%. In Belgium,
following the more subdued demand for Summer 2016 (as a result of
the terrorist attack on Brussels Airport in March), trading in
Belgium has improved. This booking performance is partly offset in
Netherlands, where last year's comparatives include the timing
impact of the TUI brand launch.
In Hotels & Resorts we have new openings scheduled 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.
Summer 2017
Trading for the Source Markets is at a very early stage. In line
with the usual Summer season launch dates for each Source Market,
only the UK is more than 10% sold. UK revenue is up 14% and
bookings are up 7%, with growth again driven by long haul and
cruise. Sales for our additional cruise ships, Mein Schiff 6 and
TUI Discovery 2, are going well. In Hotels & Resorts we have
new openings scheduled for Sensatori in Rhodes and for TUI Blue in
Croatia, as well as the continued expansion of our unique tour
operator concepts in third party hotels.
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 former TUI Travel businesses, which
account for over 90% of our Group currency and fuel exposure.
Summer 2016 Winter 2016/17 Summer 2017
Euro 95% 90% 57%
US Dollars 96% 85% 66%
Jet Fuel 96% 93% 85%
As at 23 September 2016
------------------------- ------------ --------------- ------------
We do not hedge the impact of foreign exchange translation of
results in non-Euro currencies. Based on exchange rates at current
levels we continue to anticipate an adverse impact of approximately
EUR100m from foreign exchange translation on the full year
underlying EBITA result, primarily due to the translation of peak
season profits from Sterling denominated operations.
OUTLOOK
We are continuing to deliver our strategy as a content centric,
vertically integrated tourism group, with the completion of the
Hotelbeds Group disposal and marketing of Travelopia having
commenced. The Summer 2016 season is almost fully sold, and Winter
2016/17 is trading in line with our expectations. As we approach
our 2015/16 year end, we are therefore confident of delivering
between 12% and 13% growth in underlying EBITA(1) . This
demonstrates the strength of our integrated business model and the
success of content centric strategy, as well as the delivery of our
merger synergies.
(1) Assuming constant foreign exchange rates are applied to the
result in the current and prior period and treating Hotelbeds Group
as discontinued operations
ANNUAL REPORT 2015/16
TUI Group will issue its Annual Report for the full year 2015/16
on Thursday 8 December 2016 and hold a presentation for investors
and analysts on the same day. Further details will follow.
ANALYST & INVESTOR ENQUIRIES
Andy Long, Director of Investor Relations Tel: +44 1293 645831
Contacts for Analysts and Investors in UK, Ireland and Americas
Sarah Coomes, Head of Investor Relations Tel: +44 1293 645827
Hazel Newell, Investor Relations Manager Tel: +44 1293 645823
Jacqui Smith, PA to Andy Long Tel: +44 1293 645831
Contacts for Analysts and Investors in Continental Europe, Middle East and Asia
Nicola Gehrt, Head of Investor Relations Tel: +49 511 566 1435
Ina Klose, Investor Relations Manager Tel: +49 511 566 1318
Jessica Blinne, Team Assistant Tel: +49 511 566 1425
This information is provided by RNS
The company news service from the London Stock Exchange
END
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