TUI AG: Pre-Close Trading Update (727705)

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 TUI AG (TUI) 
TUI AG: Pre-Close Trading Update 
 
27-Sep-2018 / 08:00 CET/CEST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
            27 September 2018 
 
      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 2018 on 13 December 2018, TUI 
Group announces the following update on current trading. 
 
            Chief Executive of TUI Group, Friedrich Joussen, commented: 
 
          "The financial year is closing out as we expected, with the fourth 
       consecutive year of double digit growth in underlying EBITA since the 
 merger1. Having continued to expand our hotel and cruise offer, occupancies 
and yields remain high, and the number of customers purchasing holidays from 
    us has grown in all major markets, even with the sustained period of hot 
  weather in Northern Europe this Summer. This demonstrates the strength and 
    resilience of demand for our holiday experiences, although as previously 
  stated the hot weather has limited our ability to outperform. Whilst at an 
         early stage, trading for future seasons is overall in line with our 
  expectations. Our strong positioning as a leading holiday product provider 
with own distribution, as well as our balanced portfolio of destinations and 
markets, mean that we are well positioned to continue to deliver against our 
       growth strategy. We therefore reiterate our guidance of at least 10%1 
            underlying EBITA growth in FY18." 
 
1 Assuming constant foreign exchanges rates are applied to the result in the 
            current and prior period 
 
            Current Trading 
 
        Overall, trading since our last update has remained in line with our 
         expectations. In Hotels & Resorts our strategy of having a balanced 
      portfolio of destinations continues to pay off, as we benefit from the 
  return in demand for Turkey, North Africa and increased demand for Greece, 
 as well as delivering new openings in South East Asia and the Caribbean. As 
 expected, demand for Spain is normalising from the very high levels seen in 
         recent years. We have a strong pipeline of hotel openings for FY19, 
 including year round destinations such as Cape Verde, Mexico, the Caribbean 
   islands and the Maldives, and we expect to deliver on the guidance we set 
 out at the time of the merger of around 60 additional hotel openings by the 
            end of FY19. 
 
   In Cruises, the launches of the new TUI Cruises Mein Schiff 1 and Marella 
     Explorer this Summer have gone very well, and yield performance remains 
        strong across our three fleets. A dry dock for the Europa means that 
    Hapag-Lloyd Cruises will have a more subdued earnings performance in the 
  final quarter of FY18. In FY19 we will launch three ships (new TUI Cruises 
      Mein Schiff 2, Marella Explorer 2 and Hanseatic Nature for Hapag-Lloyd 
Cruises), with additional launches scheduled in future years. We continue to 
            see strong demand for our unique cruise brands. 
 
 Destination Experiences continues to perform very well, with strong organic 
     growth in the final quarter. Having expanded our regional capability in 
 destinations with the acquisition of the destination management business of 
      Hotelbeds Group, we recently announced the acquisition of Musement, an 
 online platform for selling tours and activities in destinations around the 
      world. This will enable the creation of a scalable digital platform to 
      source, produce and distribute tours and activities to TUI and non-TUI 
            customers. 
 
    Customer volumes in Sales & Marketing are up 4% on prior year for Summer 
   2018, benefitting in particular from increased capacity to Turkey, Greece 
   and North Africa as well as smaller destinations such as Bulgaria, and an 
         increase in the volume of customers staying in our Group hotels. As 
 anticipated, volumes to Spain have continued to normalise compared with the 
 very high growth seen in recent years. As noted in our Q3 update, there are 
   a number of external factors which have made operations more challenging, 
including the unusually hot Summer in Northern Europe and higher than normal 
 level of airline operational disruption. Despite this, we have continued to 
    grow our customer base, demonstrating once again the strength of the TUI 
   brand and product offer, coupled with further growth in the proportion of 
            direct and online distribution. 
 
                  Summer 20182 
                  ............ 
YoY                           Total     Total    Total Programme 
variatio                                                sold (%) 
n% 
 
                            Revenue Customers      ASP 
Northern Region                  +4        +2       +1        97 
Central Region                   +8        +7       +1        98 
Western Region                   +3        +2       +1       100 
Total Sales & Marketing          +5        +4       +1        98 
 
2 These statistics are up to 23 September 2018, shown on a constant currency 
            basis and relate to all customers whether risk or non-risk 
 
  Sales & Marketing trading for Winter 2018/19 (which is low season for most 
       markets) is at a relatively early stage, with around one third of the 
   programme sold. Performance is positive overall, with customer volumes up 
   2%. Bookings in most markets are ahead of prior year and tracking in line 
       with capacity. In Nordics, we are seeing a later booking profile this 
 Winter, in line with the market, against strong prior year comparatives and 
  as a knock-on impact from the prolonged hot Summer in Scandinavia. Average 
  selling price overall for Sales & Marketing is down 1% on prior year. This 
    reflects a proactive remix of capacity, enabling us to capitalise on the 
     returning popularity of North Africa and Turkey, and also to reduce our 
            capacity to the Canaries where demand is normalising. 
 
            Foreign Exchange & Fuel 
 
           Our strategy of hedging the majority of our currency and jet fuel 
 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 Sales & Marketing, 
         which account for over 90% of our Group currency and fuel exposure. 
 
                        Summer 2018 Winter 2018/19 Summer 2019 
Euro                        97%          86%           55% 
US Dollars                  94%          85%           66% 
Jet Fuel                    93%          87%           75% 
As at 21 September 2018 
 
 At our Q3 update we flagged approximately EUR35m adverse translation impact 
       on underlying EBITA compared with rates prevailing in the prior year, 
      including the impact from the revaluation of Euro loan balances within 
    Turkish hotel entities. As detailed at Q3, this is a non-cash impact, as 
Euro loans are repaid with Euro income. Since the Q3 update the Turkish Lira 
  has further weakened, leading to an increase in the revaluation impact. We 
        now expect approximately EUR70m adverse impact in total from foreign 
exchange translation on the FY18 underlying EBITA result, subject to further 
            movements in exchange rates to 30 September 2018. 
 
            Outlook 
 
      FY18 is closing out in line with our expectations and we reiterate our 
    guidance of at least 10% growth in underlying EBITA1. Whilst at an early 
 stage, trading for future seasons is overall in line with our expectations. 
       Our strong positioning as a leading holiday product provider with own 
distribution, as well as our balanced portfolio of destinations and markets, 
  mean that we are well positioned to continue to deliver against our growth 
            strategy. 
 
Annual Report 2017/18 
 
TUI Group will issue its Annual Report on Thursday 13 December 2018 and hold 
a presentation for investors and analysts on the same day. Further details 
will follow. 
 
Analyst & Investor Enquiries 
 
     Peter Krueger, Member of the Group 
 Executive Committee, Group Director of 
   Strategy, M&A and Investor Relations 
 
                                        Tel: +49 (0)511 566 1440 
 
 Contacts for Analysts and Investors in UK, Ireland and Americas 
Sarah Coomes, Head of Investor          Tel: +44 (0)1293 645 827 
Relations 
Hazel Chung, Senior Investor Relations  Tel: +44 (0)1293 645 823 
Manager 
 
Contacts for Analysts and Investors in Continental Europe, 
Middle East and Asia 
Nicola Gehrt, Head of Investor          Tel: +49 (0)511 566 1435 
Relations 
Ina Klose, Senior Investor Relations    Tel: +49 (0)511 566 1318 
Manager 
Jessica Blinne, Junior Investor         Tel: +49 (0)511 566 1425 
Relations Manager 
 
ISIN:           DE000TUAG000, DE000TUAG299 
Category Code:  TST 
TIDM:           TUI 
LEI Code:       529900SL2WSPV293B552 
OAM Categories: 3.1. Additional regulated information required to be 
                disclosed under the laws of a Member State 
Sequence No.:   6082 
EQS News ID:    727705 
 
End of Announcement EQS News Service
(END) Dow Jones Newswires
September 27, 2018 02:01 ET (06:01 GMT)
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