TUI AG (TUI)
TUI AG: 3rd Quarter Results
13-Aug-2019 / 08:00 CET/CEST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
9 Months 2019
TUI Group - financial highlights
EUR million Q3 Q3 2018 Var. 9M 9M 2018 Var. % Var. %
2019 adjusted % 2019 adjusted at
constant
currency
Turnover 4,745 4,576.7 + 3.7 11,421 11,142.6 + 2.5 + 2.8
.0 .4
Underlying
EBITA 1
Hotels & 91.5 72.4 + 226.9 244.7 - 7.3 - 18.6
Resorts 26.4
Cruises 101.5 88.7 + 207.9 182.4 + 14.0 + 14.0
14.4
Destination 15.3 17.4 - 4.9 4.1 + 19.5 + 17.1
Experiences 12.1
Holiday 208.3 178.5 + 439.7 431.2 + 2.0 - 5.0
Experiences 16.7
Northern - 14.2 n. a. - - 111.6 - - 134.8
Region 58.6 263.7 136.3
Central 8.2 31.5 - - - 113.2 - 5.7 - 5.7
Region 74.0 119.6
Western - - 8.5 - - - 113.7 - 91.2 - 91.2
Region 53.5 529.4 217.4
Markets & - 37.2 n. a. - - 338.5 - 77.5 - 77.0
Airlines 103.9 600.7
All other - 3.5 - 28.9 + - 38.7 - 75.6 + 48.8 + 44.2
segments 87.9
TUI Group 100.9 186.8 - - 17.1 n. a. n. a.
46.0 199.7
84.1 176.0 - - - 27.4 -
EBITA 2, 3 52.2 262.6 858.4
Underlying 219.3 287.0 - 141.8 312.5 - 54.6
EBITDA 3, 4 23.6
EBITDA 3, 4 210.4 281.2 - 103.7 285.4 - 63.7
25.2
EBITDAR 3, 396.9 459.9 - 634.6 794.7 - 20.1
4, 5 13.7
Net gain / 47.3 104.8 - - - 105.8 -
net loss 54.9 240.4 127.2
for the
period
Earnings 0.04 0.17 - - 0.54 - 0.31 - 74.2
per share 3 76.5
EUR
Net capex 238.8 378.4 - 890.4 585.7 + 52.0
and 36.9
investments
Equity 19.8 21.4 - 1.6
ratio (30
June) 6 %
Net debt / - 589.4 n. a.
Net cash 994.6
(30 June)
Employees 71,847 66,632 + 7.8
(30 June)
Differences may occur due to rounding.
This Quarterly Statement of the TUI Group was prepared for the reporting
period 9M 2019 from 1 October 2018 to 30 June 2019.
The TUI Group applied IFRS 15 and IFRS 9 retrospectively from 1 October
2018. In contrast to IFRS 15, IFRS 9 was introduced without restating the
previous year's figures.
In Q1 2019, the Italian tour operators were transferred from All other
segments to the Central Region. In addition, the Crystal Ski companies,
which provide services in the destinations, were reclassified from Northern
Region to Destination Experiences. Prior-year figures were adjusted
accordingly.
1 In order to explain and evaluate the operating performance by the
segments, EBITA adjusted for one-off effects (underlying EBITA) is
presented. Underlying EBITA has been adjusted for gains / losses on disposal
of investments, restructuring costs according to IAS 37, ancillary
acquisition costs and conditional purchase price payments under purchase
price allocations and other expenses for and income from one-off items.
Please also refer to page 6 for further details.
2 EBITA comprises earnings before interest, income taxes and goodwill
impairment. EBITA includes amortisation of other intangible assets. EBITA
does not include measurement effects from interest hedges.
3 Continuing operations.
4 EBITDA is defined as earnings before interest, income taxes, goodwill
impairment and amortisation and write-ups of other intangible assets,
depreciation and write-ups of property, plant and equipment, investments and
current assets. The amounts of amortisation and depreciation represent the
net balance including write-backs. Underlying EBITDA has been adjusted for
gains / losses on disposal of investments, restructuring costs according to
IAS 37, ancillary acquisition costs and conditional purchase price payments
under purchase price allocations and other expenses for and income from
one-off items.
5 For the reconciliation from EBITDA to the indicator EBITDAR, long-term
leasing and rental expenses are eliminated.
6 Equity divided by balance sheet total in %, variance is given in
percentage points.
Highlights
· Our Holiday Experiences continue to deliver a strong performance,
despite the challenges we currently face in our Markets & Airlines
business, demonstrating the strength of our integrated business model.
· Our Hotels & Resorts result in Q3 is supported by our asset portfolio of
diversified destinations. Whilst Riu saw lower demand in Spain resulting
from the continued shift of demand from Western to Eastern Mediterranean,
our Turkish hotels saw a significant year on year earnings improvement as
a result of this demand shift.
· Our strong Cruises result reflects the capacity expansions across the
fleet this Summer, with strong volumes in TUI Cruises, and strong increase
in yields for both Marella and Hapag-Lloyd Cruises.
· Destination Experiences continued to grow with our Musement integration
well on track, with the basis set for the business to benefit from strong
Summer season volumes in Q4.
· Markets & Airlines continued to see a weak demand environment leading to
a later booking behaviour by our customers, reflecting the ongoing
knock-on impact of the Summer 2018 heatwave and Brexit uncertainty. Number
of customers were marginally ahead of prior year however and the segment
delivered a stable underlying result outside of the 737 MAX grounding
impact.
· As outlined in our ad-hoc announcement in March, Q3 was negatively
impacted by the 737 MAX aircraft grounding. Resumption of the 737 MAX
remains subject to the clearance decision of the civil aviation
authorities and we have secured replacement aircraft leases out to the end
of our Summer 2019 programme. We anticipate 737 MAX related costs of
approximately up to EUR 300 m for the current financial year.
· In the last quarter we made significant progress to deliver on our four
strategic initiatives:
· Grow Hotel & Cruise business with vertical integration to drive
premium returns;
· Retain and where possible extend strong positions in Markets &
Airlines;
· Add scale in new markets, with our new GDN-OTA (Global Distribution
Network Online Travel Agent) platform; and
· Add scale in Destination Experience markets with our new tours and
activities platform.
· Hotels & Cruises - we will continue to leverage our distribution scale
to increase yields in our content businesses and further invest in
portfolio diversification. We will both continue to be selective in our
approach and apply a blended ROIC target rate of > 15 %.
· Markets & Airlines - we have set up a Markets Transformation Programme
to improve our market competitiveness. The programme will focus on CRM and
digital upselling, harmonisation of purchasing, airline efficiency, mobile
distribution and common IT platforms to retain and where possible, extend
our market share.
· New markets - we will build reach in complementary markets through our
scalable GDN-OTA platform and have seen strong growth momentum already to
date. Our target of 1 m additional customers from new markets by 2022 may
be achieved earlier.
· Destination Experiences - we will drive scale in our new digitalised
platform by both expanding our product portfolio and by extending to
further 3rd party distribution channels such as Ctrip.
· As part of our ongoing review of our business portfolio, we are pleased
to announce we have signed an agreement post balance sheet date relating
to the disposal of two non-core German specialist businesses. The disposal
of Berge & Meer and Boomerang reflects our drive to focus on clear
synergistic businesses. We anticipate the disposal, for an agreed
enterprise value of EUR 96 m to EUR 106 m (including EUR 10 m earn-out),
to complete in the first quarter of the next financial year.
· As expected, net debt as at 30 June 2019 reflects the full utilisation
of disposal proceeds received over the past few years and the increase in
financing related to our aircraft re-fleeting programme. TUI is in a
robust financial position, with a considerable level of financing and
liquidity headroom.
· We therefore reiterate FY19 underlying EBITA guidance stated in our ad
hoc announcement of 29 March 2019 of approximately up to - 26 % compared
with underlying EBITA rebased in FY18 of EUR 1,177 m1.
1 Based on constant currency: FY18 result rebased in December 2018 to EUR
1,187 m to take into account EUR 40 m impact for revaluation of Euro loan
balance within Turkish Lira entities, and adjusted further to EUR 1,177 m
for retrospective application of IFRS 15.
At a glance
For further detail, please see Segmental Performance on pages 6 to 11.
Results at a glance
EUR million Q3 2019 9M 2019
Underlying EBITA FY18 (originally reported) + 193 + 35
IFRS 15 impact - 6 - 18
Turkish Lira revaluation impact (prior year) + 8 + 18
Underlying EBITA FY18 (rebased) + 195 + 35
Holiday Experiences + 28 + 21
Markets & Airlines - 31 - 174
All other segments + 24 + 33
Special items
Prior year: Riu gains on disposal (Hotels & - 8 - 43
Resorts)
Prior year: Niki bankruptcy impact (Central - + 20
Region)
Prior year: Airline disruptions (Markets & + 13 + 13
Airlines)
Q1 FY19: Northern Region hedging gain - + 29
Q2 / Q3 FY19: 737 MAX grounding (Markets & - 144 - 149
Airlines)
Q2 / Q3 FY19: Easter timing (Markets & + 22 -
Airlines)
Underlying EBITA FY19 at constant currency + 99 - 215
Foreign exchange translation + 2 + 15
Underlying EBITA FY19 + 101 - 200
Expected development and guidance
Holiday Experiences
Holiday Experiences continues to deliver a strong performance overall. The
strength in our model lies not only in the investment we have made in recent
years to expand our differentiated content and our integrated model (driving
higher occupancies, rates and yields in our hotels and cruise ships), but
also in our expansion of multiple hotel destinations. Our diversified
destination strategy is delivering clear benefits from the shift in demand
from Western to Eastern Mediterranean and we expect this benefit to continue
in Q4.
We have opened 23 own hotels so far in FY19, and expect to open 26 in total.
This will bring the total since merger to 70, slightly ahead of our original
target of around 60 hotels. Around two thirds of our 70 openings since
merger are of lower capital intensity, (operated under either a management
or franchised contract or owned with JV partner), reflecting our disciplined
approach in ownership.
In Cruises, we have launched three ships this year, new Mein Schiff 2,
Marella Explorer 2 and Hanseatic nature. All our brands continue to perform
well, driven by robust demand for our attractive itineraries and premium
all-inclusive, as well as luxury and expedition product offerings.
Within Destination Experiences, we expect excursions and activities
contributions to grow, with Musement integration costs in the year partly
offsetting. In the coming months, we will expand the product portfolio and
3rd party distribution channels (such as with Ctrip) of our digitalised
platform, driving further future growth.
Markets & Airlines
As previously communicated, we expect our FY19 full-year results to be
impacted by the 737 MAX grounding. We have seen a later booking behaviour to
date from the ongoing knock-on impact of last year's extraordinary hot
Summer with demand continuing to be impacted by Brexit uncertainty. In
addition, overcapacity to Spanish destinations has resulted in increased
competition, putting pressure on margins for the division.
For Summer 2019, 87 % of the programme has been sold compared with 88 % at
this time last year. Bookings are down 1 %, with average selling price up 1
%1. As we approach August, we expect improvement in Summer trading as we lap
the height of last year's heatwave. Bookings and margins have improved
year-on-year over the most recent weeks, however pricing remains behind cost
inflation, therefore we continue to anticipate margins to be lower than
prior year.
1 These statistics are up to 4 August 2019, shown on a constant currency
basis, and relate to all customers whether risk or non-risk.
Guidance
We therefore reiterate FY19 underlying EBITA guidance stated in our ad hoc
announcement of March 2019 of approximately up to - 26 %, compared with
underlying EBITA rebased in FY18 of EUR 1,177 m2.
2 Based on constant currency: FY18 result based in December 2018 to EUR
1,187 m to take into account EUR 40 m impact for revaluation of Euro loan
balance within Turkish Lira entities, and adjusted further to EUR 1,177 m
for retrospective application of IFRS 15.
Based on current foreign exchange rates, we expect approximately EUR 15 m
positive impact on underlying EBITA compared with rates prevailing in the
prior year.
Consolidated earnings
Turnover
EUR million Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
adjusted adjusted
Hotels & 154.5 161.0 - 4.0 425.5 448.9 - 5.2
Resorts
Cruises 256.3 222.7 + 15.1 680.9 619.6 + 9.9
Destination 259.4 65.8 + 294.2 562.2 131.4 + 327.9
Experiences
Holiday 670.2 449.5 + 49.1 1,668.6 1,199.9 + 39.1
Experiences
Northern 1,599.6 1,616.0 - 1.0 3,722.9 3,842.6 - 3.1
Region
Central 1,598.4 1,525.7 + 4.8 3,823.1 3,761.3 + 1.6
Region
Western 804.3 846.6 - 5.0 1,861.4 1,911.2 - 2.6
Region
Markets & 4,002.3 3,988.3 + 0.4 9,407.4 9,515.1 - 1.1
Airlines
All other 72.5 138.9 - 47.8 345.4 427.6 - 19.2
segments
TUI Group 4,745.0 4,576.7 + 3.7 11,421.4 11,142.6 + 2.5
TUI Group 4,776.7 4,576.7 + 4.4 11,454.6 11,142.6 + 2.8
at constant
currency
Underlying EBITA
EUR million Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
adjusted adjusted
Hotels & 91.5 72.4 + 26.4 226.9 244.7 - 7.3
Resorts
Cruises 101.5 88.7 + 14.4 207.9 182.4 + 14.0
Destination 15.3 17.4 - 12.1 4.9 4.1 + 19.5
Experiences
Holiday 208.3 178.5 + 16.7 439.7 431.2 + 2.0
Experiences
Northern - 58.6 14.2 n. a. - 263.7 - 111.6 - 136.3
Region
Central 8.2 31.5 - 74.0 - 119.6 - 113.2 - 5.7
Region
Western - 53.5 - 8.5 - 529.4 - 217.4 - 113.7 - 91.2
Region
Markets & - 103.9 37.2 n. a. - 600.7 - 338.5 - 77.5
Airlines
All other - 3.5 - 28.9 + 87.9 - 38.7 - 75.6 + 48.8
segments
TUI Group 100.9 186.8 - 46.0 - 199.7 17.1 n. a.
TUI Group 98.9 194.6* - 49.2 - 214.5 35.3* n. a.
at constant
currency
* Rebased previous year's numbers adjusted for EUR 8 m and EUR 18 m in 9 m
2018, arising from the revaluation of Euro loan balances within Turkish
hotel entities.
EBITA
EUR million Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
adjusted adjusted
Hotels & 91.5 72.4 + 26.4 226.9 244.6 - 7.2
Resorts
Cruises 101.5 88.7 + 14.4 207.9 182.4 + 14.0
Destination 11.8 16.9 - 30.2 - 7.5 3.0 n. a.
Experiences
Holiday 204.8 178.0 + 15.1 427.3 430.0 - 0.6
Experiences
Northern - 63.2 9.4 n. a. - 290.9 - 125.0 - 132.7
Region
Central 5.1 28.4 - 82.0 - 126.2 - 122.6 - 2.9
Region
Western - 56.6 - 11.5 - 392.2 - 226.6 - 129.7 - 74.7
Region
Markets & - 114.7 26.3 n. a. - 643.7 - 377.3 - 70.6
Airlines
All other - 6.0 - 28.3 + 78.8 - 46.2 - 80.1 + 42.3
segments
TUI Group 84.1 176.0 - 52.2 - 262.6 - 27.4 - 858.4
Discontinued - 41.4 n. a. - 41.4 n. a.
operations
Total 84.1 217.4 - 61.3 - 262.6 14.0 n. a.
Segmental performance
Holiday Experiences
Holiday Experiences
EUR Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
million adjusted adjusted
Turnover 670.2 449.5 + 49.1 1,668.6 1,199.9 + 39.1
Underlying 208.3 178.5 + 16.7 439.7 431.2 + 2.0
EBITA
Underlying 206.8 186.3* + 11.0 426.8 449.4* - 5.0
EBITA at
constant
currency
* Rebased previous year's numbers adjusted for EUR 8 m in Q3 2018 and EUR 18
m in 9 m 2018, arising from the revaluation of Euro loan balances within
Turkish hotel entities.
Hotels & Resorts
Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
adjusted adjusted
Total 369.1 334.6 + 10.3 960.4 897.9 + 7.0
turnover
in EUR
million
Turnoverin 154.5 161.0 - 4.0 425.5 448.9 - 5.2
EUR
million
Underlying 91.5 72.4 + 26.4 226.9 244.7 - 7.3
EBITA in
EUR
million
Underlying 90.0 80.21 + 12.2 214.1 262.91 - 18.6
EBITA at
constant
currency
rates in
EUR
million
Capacity 11,922 10,911 + 9.3 28,689 27,103 + 5.9
hotels
total 2 in
'000
Riu 4,665 4,484 + 4.0 13,266 12,917 + 2.7
Robinson 958 823 + 16.3 2,241 2,070 + 8.3
Blue 1,149 944 + 21.6 3,169 2,712 + 16.9
Diamond
Occupancy 79.8 80.2 - 0.4 78.2 78.4 - 0.2
rate
hotels
total 3 in
%
variance
in %
points
Riu 88.9 88.4 + 0.5 85.7 87.1 - 1.4
Robinson 66.9 64.4 + 2.5 67.4 63.6 + 3.8
Blue 77.2 83.4 - 6.2 77.9 80.4 - 2.5
Diamond
Average 60 57 + 5.4 67 64 + 4.0
revenue
per bed
hotels
total 4, 5
in EUR
Riu 58 58 + 0.1 65 65 + 0.2
Robinson 86 86 + 0.5 92 92 - 0.9
Blue 113 104 + 8.0 122 114 + 7.1
Diamond
Turnover measures include fully consolidated companies, all other KPIs incl.
companies measured at equity.
1 Rebased previous year's numbers adjusted for EUR 8 m in Q3 2018 and EUR 18
m in 9 m 2018, arising from the revaluation of Euro loan balances within
Turkish hotel entities.
2 Group owned or leased hotel beds multiplied by opening days per period.
3 Occupied beds divided by capacity.
4 Arrangement revenue divided by occupied beds.
5 Previous year revenue per bed restated to reflect revised PY rate at Blue
Diamond.
· Hotels & Resorts underlying EBITA for Q3 was up EUR 19 m on prior year
at constant currency rates, excluding last year's EUR 8 m gain on
disposals in Riu. Occupancy remained high across the segment at 80 %.
Average revenue per bed increased by 5 %, helped by the shift of demand to
Eastern Mediterranean, reflecting improving rates in Turkey.
· In Riu, as expected from the shift of demand from Western to Eastern
Mediterranean, underlying EBITA decreased year on year as Riu came off
record highs. Additionally, last year benefitted from EUR 8 m disposal
proceeds in the same period. In spite of this destination shift, occupancy
at Riu increased by 1 ppts to 89 %. Average rate remained at EUR 58.
· Robinson saw a good operational performance in the quarter with
occupancy increasing by 3 ppts to 67 % and average rate of EUR 86 in line
with prior year. This was driven by increased demand for our clubs in
Turkey, and the benefit of reopening our flagship club Jandia Playa in
Fuerteventura, which was closed for renovation in the prior year.
Underlying EBITA increased by EUR 1 m in the period.
· Blue Diamond earnings declined by EUR 4 m in the period due to higher
interest and depreciation costs of our new properties and lower occupancy
rates across the portfolio, particularly in our new openings. Occupancy
rate fell by 6 ppts to 77 %, and average rate is up 2 % excluding FX and
up 8 % including FX.
· As anticipated, our other hotels result increased by EUR 19 m versus
prior year reflecting the return of demand to Turkey, delivering improving
rates and occupancy.
· Since merger, 67 new hotels have been opened, 66 % of which are in lower
capital intensity models (managed, franchised or owned via joint venture).
Cruises
Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
adjusted adjusted
Turnover1 256.3 222.7 + 15.1 680.9 619.6 + 9.9
in EUR
million
Underlying 101.5 88.7 + 14.4 207.9 182.4 + 14.0
EBITA in
EUR million
Underlying 101.6 88.7 + 14.5 207.9 182.4 + 14.0
EBITA at
constant
currency in
EUR million
Occupancyin
%
variance in
% points
TUI Cruises 99.5 98.8 + 0.6 99.3 99.2 + 0.2
Marella 98.5 100.3 - 1.8 99.7 99.9 - 0.2
Cruises2
Hapag-Lloyd 74.7 75.6 - 0.9 76.3 76.1 + 0.2
Cruises
Passenger
daysin '000
TUI Cruises 1,609 1,239 + 29.9 4,427 3,753 + 18.0
Marella 906 799 + 13.4 2,348 2,050 + 14.6
Cruises2
Hapag-Lloyd 81 87 - 5.9 232 254 - 8.8
Cruises
Average
daily rates
3 in EUR
TUI Cruises 190 200 - 5.1 163 165 - 1.4
Marella 144 138 + 4.8 144 135 + 6.9
Cruises 2,
4 in GBP
Hapag-Lloyd 584 571 + 2.3 620 590 + 5.1
Cruises
1 No turnover is carried for TUI Cruises as the joint venture is
consolidated at equity.
2 Rebranded from Thomson Cruises in October 2017.
3 Per day and passenger.
4 Inclusive of transfers, flights and hotels due to the integrated nature of
Marella Cruises.
· Cruises underlying EBITA increased by EUR 13 m in Q3. All three brands
saw growth in the quarter from additional capacity versus prior year.
· TUI Cruises result was up by EUR 9 m versus prior year. As expected, the
increase in capacity of 30 % (new Mein Schiff 1 launched H2 FY18 and new
Mein Schiff 2 launched Q2 FY19) helped to deliver a strong contribution in
the quarter. Average daily rate was down 5 % to EUR 190 compared to prior
year, which reflects in part our itinerary mix and the significant
increase in German ocean cruise capacity this year.
· Marella Cruises underlying EBITA was up by EUR 3 m reflecting the
addition of Marella Explorer 2 launched in May and average daily rate
increasing by 5 %. The result was partially offset by the exit of Marella
Spirit in Q1 of this financial year.
· Hapag-Lloyd Cruises underlying EBITA increased by EUR 1 m on prior year,
driven by average daily rate up 2 % across the fleet and the new Hanseatic
nature joining the fleet in May, partially offset by the exit of Hanseatic
at the start of FY19.
Destination Experiences
EUR Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
million adjusted adjusted
Total 379.7 143.8 + 164.0 797.5 288.2 + 176.7
turnover
Turnover 259.4 65.8 + 294.2 562.2 131.4 + 327.9
Underlying 15.3 17.4 - 12.1 4.9 4.1 + 19.5
EBITA
Underlying 15.2 17.4 - 12.6 4.8 4.1 + 17.1
EBITA at
constant
currency
· Q3 earnings growth, as in H1, was driven by the integration of last
year's acquisition of Destination Management, offset partly by start-up
losses in Musement.
· The number of excursions and activities sold in Q3 almost doubled versus
prior year, reflecting the acquisition of Destination Management and
Musement.
Markets & Airlines
Markets & Airlines
Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
adjusted adjusted
Turnoverin 4,002.3 3,988.3 + 0.4 9,407.4 9,515.1 - 1.1
EUR
million
Underlying - 103.9 37.2 n. a. - 600.7 - 338.5 - 77.5
EBITA in
EUR
million
Underlying - 103.2 37.2 n. a. - 599.1 - 338.5 - 77.0
EBITA at
constant
currency
in EUR
million
Direct 74 74 - 74 74 -
distributi
on mix1 in
%
variance
in %
points
Online 48 47 + 1 49 48 + 1
mix2 in %
variance
in %
points
Customers3 6,028 6,024 + 0.1 12,574 12,732 - 1.2
in '000
1 Share of sales via own channels (retail and online).
2 Share of online sales.
3 In Q1 2019, the Italian tour operators were transferred from All other
segments to the Central Region. In addition, the Crystal Ski companies,
which provide services in the destinations, were reclassified from Northern
Region to Destination Experiences.
· As expected, the Markets & Airlines Q3 result reflects tougher prior
year comparables (pre-heatwave), the flagged grounding costs for the
Boeing 737 MAX, the continued weaker consumer confidence due to continued
Brexit uncertainty, the knock-on impact of the Summer 2018 heatwave
resulting in delayed customer bookings, compounded by reduced pricing and
margin pressure from overcapacities to Spain.
Northern Region
Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
adjusted adjusted
Turnover 1,599.6 1,616.0 - 1.0 3,722.9 3,842.6 - 3.1
in EUR
million
Underlying - 58.6 14.2 n. a. - 263.7 - 111.6 - 136.3
EBITA in
EUR
million
Underlying - 57.8 14.2 n. a. - 262.0 - 111.6 - 134.8
EBITA at
constant
currency
in EUR
million
Direct 94 94 - 93 93 -
distributi
on mix1 in
%
variance
in %
points
Online 66 65 + 1 67 65 + 2
mix2 in %
variance
in %
points
Customers 2,159 2,211 - 2.4 4,405 4,574 - 3.7
in '000
1 Share of sales via own channels (retail and online).
2 Share of online sales.
· In the UK, Q3 demand continued in the same theme as we saw during the
first half, impacted by the same factors as outlined above, with no
external change to this environment. Customer volumes declined 1 % on
prior year, improving from the 5 % decline in H1, however margins remain
significantly lower versus prior year.
· For the Nordics, customer numbers saw a slight improvement, down 6 % for
the third quarter, up from 8 % down in the first half. As previously
communicated, the Nordics saw an acute knock-on impact from last Summer's
heatwave, with the region additionally influenced by the environmental
discussions which has continued to weigh on customer decisions to travel.
· Share of earnings for Canada decreased by EUR 8 m in the quarter,
reflecting 737 MAX grounding costs.
· Northern Region benefitted from the later Easter timing of EUR 14 m in
the quarter, however this was fully offset by the grounding of the 737
MAX, costing the region EUR 84 m, with overall underlying EBITA declining
by EUR 73 m.
Central Region
Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
adjusted adjusted
Turnoverin 1,598.4 1,525.7 + 4.8 3,823.1 3,761.3 + 1.6
EUR
million
Underlying 8.2 31.5 - 74.0 - 119.6 - 113.2 - 5.7
EBITA in
EUR
million
Underlying 8.1 31.5 - 74.3 - 119.7 - 113.2 - 5.7
EBITA at
constant
currency
in EUR
million
Direct 50 49 + 1 50 50 -
distributi
on mix1 in
%
variance
in %
points
Online 22 21 + 1 21 21 -
mix2 in %
variance
in %
points
Customers3 2,249 2,170 + 3.6 4,629 4,605 + 0.5
in '000
1 Share of sales via own channels (retail and online).
2 Share of online sales.
3 In Q1 2019, the Italian tour operators were transferred from All other
segments to the Central Region. Prior-year figures were adjusted
accordingly.
· The Q3 result, driven primarily by Germany, saw a decline in underlying
EBITA versus prior year, with the benefit of later Easter timing of EUR 7
m and positive trading in the region fully offset by replacement 737 MAX
aircraft costs of EUR 17 m.
· Customer volumes for Central Region increased by 4 % in Q3, reflecting
the solid recovery in German customer bookings and the continued strong
volume increase in Poland as we continue to drive growth in this market.
· Distribution continues to be key to improving this low margin region.
Both direct and online distribution for the Central Region grew by 1 ppt
to 50 % and 22 % respectively.
Western Region
Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
adjusted adjusted
Turnoverin 804.3 846.6 - 5.0 1,861.4 1,911.2 - 2.6
EUR
million
Underlying - 53.5 - 8.5 - 529.4 - 217.4 - 113.7 - 91.2
EBITA in
EUR
million
Underlying - 53.5 - 8.5 - 529.4 - 217.4 - 113.7 - 91.2
EBITA at
constant
currency
in EUR
million
Direct 75 73 + 2 75 74 + 1
distributi
on mix1 in
%
variance
in %
points
Online 56 53 + 3 58 56 + 2
mix2 in %
variance
in %
points
Customers 1,620 1,642 - 1.3 3,539 3,553 - 0.4
in '000
1 Share of sales via own channels (retail and online).
2 Share of online sales.
· Western Region underlying EBITA was down EUR 45 m versus prior year,
with little recovery in trading and margin remaining weak.
· In Belgium, customer numbers improved by 3 % in the quarter driven
largely by seat-only customers, with tour operator customers and
underlying EBITA contribution down.
· In the Netherlands, customer volumes were down 4 % year on year, with
pricing and margin remaining weak throughout the period.
· France, despite our best efforts to turn this region around, has
experienced a contracting market, reducing the impact of our rebranding
campaign last year. The knock-on impact of the extraordinary hot Summer
last year continues to be a factor, with recent good weather in the region
negatively impacting trading further.
· Timing of Easter added EUR 1 m contribution to the quarter with the 737
MAX grounding costing the region EUR 43 m.
All other segments
EUR Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
million adjusted adjusted
Turnover 72.5 138.9 - 47.8 345.4 427.6 - 19.2
Underlying - 3.5 - 28.9 + 87.9 - 38.7 - 75.6 + 48.8
EBITA
Underlying - 4.7 - 28.9 + 83.7 - 42.2 - 75.6 + 44.2
EBITA at
constant
currency
· The result for All other segments improved due to the phasing of Head
Office costs year on year, which will be weighted towards the final
quarter this year.
· On 18 March 2019 TUI announced the disposal of a majority stake in
Corsair. The non-repeat of Corsair Q3 losses helped to deliver a benefit
in the All other segments result. On a FY basis, Corsair will show a
negative impact versus prior year as positive Q4 earnings contribution
will not be consolidated in this financial year's results.
Cash flow / Net capex and investments / Net financial position
The cash inflow from operating activities decreased by EUR 578.7 m to EUR
700.8 m. As well as the lower earnings in 9M 2019. This was mainly driven by
lower customer deposits from a later booking behaviour and higher
prepayments.
Net debt is defined as financial debt less cash and cash equivalents and
future short-term interest-bearing investments. As expected, net debt as at
30 June 2019 reflects the full utilisation of proceeds of disposals received
over the past few years and the increase in financing related to our cruise
and aircraft re-fleeting programme.
Net financial position
30 Jun 2019 30 Jun 2018 Var. %
Financial debt - 2,637.0 - 2,030.5 - 29.9
Cash and cash equivalents 1,564.9 2,598.0 - 39.8
Short-term interest-bearing 77.5 21.9 + 253.9
investments
Net debt / net cash - 994.6 589.4 n. a.
Net capex and investments
EUR million Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
adjusted adjusted
Cash gross
capex
Hotels & 73.7 78.8 - 6.5 260.3 193.9 + 34.2
Resorts
Cruises 25.4 185.5 - 86.3 225.4 223.6 + 0.8
Destination 3.2 3.3 - 3.0 12.8 6.2 + 106.5
Experiences
Holiday 102.3 267.6 - 61.8 498.5 423.7 + 17.7
Experiences
Northern 10.5 19.6 - 46.4 41.0 43.0 - 4.7
Region
Central 8.8 5.3 + 66.0 23.4 15.5 + 51.0
Region
Western 3.9 12.1 - 67.8 24.9 25.1 - 0.8
Region
Markets & 23.2 37.0 - 37.3 89.3 83.6 + 6.8
Airlines
All other 17.4 23.7 - 26.6 98.6 116.5 - 15.4
segments
TUI Group 142.9 328.3 - 56.5 686.4 623.8 + 10.0
Net pre 56.2 37.9 + 48.3 1.9 17.7 - 89.3
delivery
payments on
aircraft
Financial 64.1 55.8 + 14.9 210.8 80.0 + 163.5
investments
Divestments - 24.3 - 43.6 + 44.3 - 8.7 - 135.8 + 93.6
Net capex 238.9 378.4 - 36.9 890.4 585.7 + 52.0
and
investments
The increase in net capex and investments in 9M 2019 was mainly driven by
the acquisition of Marella Explorer 2, openings in Hotels & Resorts related
to our core hotel brands Riu, Robinson and TUI Blue as well as the openings
of the online platform Musement and further companies from Hotelbeds. The
development of divestments was related to the sale of the majority stake in
Corsair, while the prior-year figure included the sale of three Riu
entities.
Foreign exchange / Fuel
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 Markets &
Airlines division, which account for over 90 % of our Group currency and
fuel exposure.
Foreign Exchange / Fuel
Summer 2019 Winter 2019 / 20 Summer 2020
%
Euro 103 77 38
US Dollar 94 83 56
Jet fuel 95 92 72
As at 8 August 2019.
Interim financial statements
Financial position of the TUI Group as at 30 Jun 2019
EUR million 30 Jun 2019 30 Sep 2018 1 Oct 2017
adjusted* adjusted*
Assets
Goodwill 2,974.7 2,913.1 2,889.5
Other intangible 673.5 643.2 548.1
assets
Property, plant 5,651.9 4,876.3 4,253.7
and equipment
Investments in 1,476.4 1,402.3 1,284.1
joint ventures
and associates
Trade and other 62.5 103.3 138.7
receivables
Derivative 44.6 83.2 79.9
financial
instruments
Other financial 44.8 54.3 69.5
assets
Touristic 192.0 157.3 185.2
payments on
account
Other 261.2 184.4 73.1
non-financial
assets
Income tax assets 9.6 9.6 -
Deferred tax 331.2 228.0 326.0
assets
Non-current 11,722.4 10,655.0 9,847.8
assets
Inventories 124.0 118.5 110.2
Trade and other 810.3 821.9 700.9
receivables
Derivative 280.3 441.8 215.4
financial
instruments
Other financial 77.5 18.7 11.9
assets
Touristic 1,596.2 731.3 583.9
payments on
account
Other 129.4 140.2 81.7
non-financial
assets
Income tax assets 139.3 114.1 98.7
Cash and cash 1,564.9 2,548.0 2,516.1
equivalents
Assets held for - 5.5 9.6
sale
Current assets 4,721.9 4,940.0 4,328.4
Total assets 16,444.3 15,595.0 14,176.2
* Prior-year figures adjusted due to retrospective application of IFRS 15
and PPA adjustments.
Financial position of the TUI Group as at 30 Jun 2019
EUR million 30 Jun 2019 30 Sep 2018 1 Oct 2017
adjusted* adjusted*
Equity and
liabilities
Subscribed capital 1,502.9 1,502.9 1,501.6
Capital reserves 4,200.5 4,200.5 4,195.0
Revenue reserves - 3,143.4 - 2,058.4 - 2,798.3
Equity before 2,560.0 3,645.0 2,898.3
non-controlling
interest
Non-controlling 698.2 634.8 594.0
interest
Equity 3,258.2 4,279.8 3,492.3
Pension provisions 1,049.0 962.2 1,094.7
and similar
obligations
Other provisions 693.5 768.1 801.4
Non-current 1,742.5 1,730.3 1,896.1
provisions
Financial 2,435.0 2,250.7 1,761.2
liabilities
Derivative financial 53.2 12.8 50.4
instruments
Other financial 20.9 14.4 43.9
liabilities
Other non-financial 90.0 89.0 106.3
liabilities
Touristic advance 0.1 - -
payments received
Income tax 69.3 108.8 150.2
liabilities
Deferred tax 116.3 187.9 106.4
liabilities
Non-current 2,784.8 2,663.6 2,218.4
liabilities
Non-current 4,527.3 4,393.9 4,114.5
provisions and
liabilities
Pension provisions 29.8 32.6 32.7
and similar
obligations
Other provisions 333.0 348.3 349.9
Current provisions 362.8 380.9 382.6
Financial 202.0 192.2 171.9
liabilities
Trade payables 2,331.0 2,692.5 2,433.1
Derivative financial 110.6 65.7 217.2
instruments
Other financial 101.8 93.3 103.8
liabilities
Touristic advance 4,985.4 2,824.8 2,700.4
payments received
Other non-financial 497.2 585.7 495.1
liabilities
Income tax 68.0 86.2 65.3
liabilities
Current liabilities 8,296.0 6,540.4 6,186.8
Current provisions 8,658.8 6,921.3 6,569.4
and liabilities
Total provisions and 16,444.3 15,595.0 14,176.2
liabilities
* Prior-year figures adjusted due to retrospective application of IFRS 15
and PPA adjustments.
Income statement of the TUI Group for the period from 1
Oct 2018 to 30 Jun 2019
EUR million Q3 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
2019 adjusted* adjusted*
Turnover 4,745. 4,576.7 3.7 11,421. 11,142.6 2.5
0 4
Cost of sales 4,459. 4,188.3 6.5 10,979. 10,476.9 4.8
2 1
Gross profit 285.8 388.4 - 26.4 442.3 665.7 - 33.6
Administrative 282.0 300.9 - 6.3 920.2 921.6 - 0.2
expenses
Other income 1.6 13.4 - 88.1 14.5 62.0 - 76.6
Other expenses 2.1 1.6 31.3 16.0 1.9 742.1
Impairment of - 7.0 1.2 n. a. - 9.8 28.2 n. a.
financial
assets
Financial 11.7 23.6 - 50.4 81.6 41.3 97.6
income
Financial 39.8 56.5 - 29.6 118.9 124.6 - 4.6
expenses
Share of 76.7 75.7 1.3 184.0 189.9 - 3.1
result of
joint ventures
and associates
Earnings 58.9 140.9 - 58.2 - 322.9 - 117.4 - 175.0
before income
taxes
Income taxes 11.6 36.1 - 67.9 - 82.5 - 11.6 - 611.2
Result from 47.3 104.8 - 54.9 - 240.4 - 105.8 - 127.2
continuing
operations
Result from - 41.4 n. a. - 41.4 n. a.
discontinued
operations
Group profit / 47.3 146.2 - 67.6 - 240.4 - 64.4 - 273.3
loss for the
year
Group profit / 21.7 140.6 - 84.6 - 320.1 - 140.3 - 128.2
loss for the
year
attributable
to
shareholders
of TUI AG
Group profit / 25.6 5.6 357.1 79.7 75.9 5.0
loss for the
year
attributable
to
non-controllin
g
interest
* Prior-year figures adjusted due to retrospective application of IFRS 15
and previous year's structure was adjusted due to the first time application
of IFRS 9.
Condensed cash flow statement of the TUI Group
EUR million 9M 2019 9M 2018
Cash inflow from operating activities 700.8 1,279.5
Cash outflow from investing activities - 948.8 - 584.8
Cash outflow from financing activities - 718.2 - 573.6
Net change in cash and cash equivalents - 966.2 121.1
Change in cash and cash equivalents due to - 17.7 - 39.2
exchange rate fluctuation
Change in cash and cash equivalents due to + 0.8 -
changes in the group
of consolidated companies
Cash and cash equivalents at beginning of 2,548.0 2,516.1
period
Cash and cash equivalents at end of period 1,564.9 2,598.0
Alternative performance measures
Key indicators used to manage the TUI Group are underlying EBITA and EBITA.
EBITA comprises earnings before interest, taxes and goodwill impairments.
EBITA includes amortisation of other intangible assets. It does not include
the result from the measurement of interest hedges.
Underlying EBITA has been adjusted for gains on disposal of financial
investments, restructuring expenses according to IAS 37, all effects from
purchase price allocations, ancillary acquisition costs and conditional
purchase price payments and other expenses for and income from one-off
items.
The table below shows a reconciliation of earnings before taxes from
continuing operations to underlying earnings.
Reconciliation to underlying EBITA (continuing operations)
EUR million Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
adjusted* adjusted*
Earnings 58.9 140.9 - 58.2 - 322.9 - 117.4 - 175.0
before
income
taxes*
plus: Net 26.0 36.7 - 29.2 58.7 88.5 - 33.7
interest
expense
less: Income - 0.8 - 1.6 50.0 1.6 1.5 6.7
/ plus:
Expense from
the
measurement
of interest
hedges
EBITA* 84.1 176.0 - 52.2 - 262.6 - 27.4 - 858.4
Adjustments:
plus: Losses 0.6 - 0.6 11.7 - 0.6
/ less:
Profit on
disposals
plus: 0.8 0.9 2.4 14.3
Restructurin
g expense
plus: 8.9 6.7 27.7 21.7
Expense from
purchase
price
allocation
plus: 6.5 3.8 21.1 9.1
Expense from
other
one-off
items
Underlying 100.9 186.8 - 46.0 - 199.7 17.1 n. a.
EBITA*
* Prior-year figures adjusted due to retrospective application of IFRS 15.
One-off items carried here include adjustments for income and expense items
that reflect amounts and frequencies of occurrence rendering an evaluation
of the operating profitability of the segments and the Group more difficult
or causing distortions. These items include in particular major
restructuring and integration expenses not meeting the criteria of IAS 37,
material expenses for litigation, gains and losses from the sale of aircraft
and other material business transactions with a one-off character.
In the first nine months, adjustments (including individual items and
purchase price allocations) totalling EUR 62.9 m (previous year: EUR 44.5 m)
were made. The individual items adjusted in the period under review mainly
relate to one-off expenses in connection with the conversion of the pension
plan in the United Kingdom to a defined contribution plan and the loss on
the Corsair disposal. In the prior-year period, in addition to expenses from
purchase price allocations, restructuring costs for the integration of
Transat in France and the restructuring of our German airline in particular
had to be adjusted.
The TUI Group's underlying EBITA declined by EUR 216.8 m to a loss of EUR-
199.7 m.
Key figures of income statement (continuing operations)
EUR million Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
adjusted adjusted
Earnings 396.9 459.9 - 13.7 634.6 794.7 - 20.1
before
interest,
income
taxes,
depreciation
, impairment
and rent
(EBITDAR)
Operating 186.5 178.7 + 4.4 530.9 509.3 + 4.2
rental
expenses
Earnings 210.4 281.2 - 25.2 103.7 285.4 - 63.7
before
interest,
income
taxes,
depreciation
and
impairment
(EBITDA)
Depreciation 126.3 105.2 + 20.1 366.3 312.8 + 17.1
/
amortisation
less
reversals
of
depreciation
*
Earnings 84.1 176.0 - 52.2 - 262.6 - 27.4 - 858.4
before
interest,
income taxes
and
impairment
of goodwill
(EBITA)
Earnings 84.1 176.0 - 52.2 - 262.6 - 27.4 - 858.4
before
interest and
income taxes
(EBIT)
Expense from 0.8 1.6 - 50.0 - 1.6 - 1.5 - 6.7
the
measurement
of interest
hedges
Net interest - 26.0 - 36.7 + 29.2 - 58.7 - 88.5 + 33.7
expense
Earnings 58.9 140.9 - 58.2 - 322.9 - 117.4 - 175.0
before
income taxes
(EBT)
* On property, plant and equipment, intangible assets, financial and other
assets.
Other segment indicators
Underlying EBITDA
EUR million Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
adjusted adjusted
Hotels & 118.9 96.9 + 22.7 305.0 318.5 - 4.2
Resorts
Cruises 127.0 107.4 + 18.2 273.6 234.5 + 16.7
Destination 19.0 19.7 - 3.6 16.4 10.6 + 54.7
Experiences
Holiday 264.9 224.0 + 18.3 595.0 563.6 + 5.6
Experiences
Northern - 43.1 26.0 n. a. - 222.3 - 76.7 - 189.8
Region
Central 13.4 36.6 - 63.4 - 103.1 - 98.1 - 5.1
Region
Western - 48.4 - 5.3 - 813.2 - 202.4 - 102.3 - 97.8
Region
Markets & - 78.1 57.3 n. a. - 527.8 - 277.1 - 90.5
Airlines
All other 32.5 5.7 + 470.2 74.6 26.0 + 186.9
segments
TUI Group 219.3 287.0 - 23.6 141.8 312.5 - 54.6
EBITDA
EUR million Q3 2019 Q3 2018 Var. % 9M 2019 9M 2018 Var. %
adjusted adjusted
Hotels & 118.9 96.9 + 22.7 304.9 318.4 - 4.2
Resorts
Cruises 127.0 107.4 + 18.2 273.6 234.5 + 16.7
Destination 17.9 19.1 - 6.3 11.5 9.5 + 21.1
Experiences
Holiday 263.8 223.4 + 18.1 590.0 562.4 + 4.9
Experiences
Northern - 44.7 24.1 n. a. - 240.6 - 81.3 - 195.9
Region
Central 11.2 34.3 - 67.3 - 107.4 - 105.1 - 2.2
Region
Western - 50.4 - 7.1 - 609.9 - 208.3 - 115.0 - 81.1
Region
Markets & - 83.9 51.3 n. a. - 556.3 - 301.4 - 84.6
Airlines
All other 30.5 6.5 + 369.2 70.0 24.4 + 186.9
segments
TUI Group 210.4 281.2 - 25.2 103.7 285.4 - 63.7
Discontinued - 41.4 n. a. - 41.4 n. a.
operations
Total 210.4 322.6 - 34.8 103.7 326.8 - 68.3
Employees
30 Jun 2019 30 Jun 2018 Var. %
adjusted
Hotels & Resorts 29,363 27,173 + 8.1
Cruises* 349 304 + 14.8
Destination Experiences 9,863 6,223 + 58.5
Holiday Experiences 39,575 33,700 + 17.4
Northern Region 12,652 12,537 + 0.9
Central Region 10,653 10,485 + 1.6
Western Region 6,620 6,614 + 0.1
Markets & Airlines 29,925 29,636 + 1.0
All other segments 2,347 3,296 - 28.8
TUI Group 71,847 66,632 + 7.8
* Excludes TUI Cruises (JV) employees. Cruises employees are primarily hired
by external crew management agencies.
Cautionary statement regarding forward-looking statements
The present Quarterly Statement contains various statements relating to
TUI's future development. These statements are based on assumptions and
estimates. Although we are convinced that these forward-looking statements
are realistic, they are not guarantees of future performance since our
assumptions involve risks and uncertainties that could cause actual results
to differ materially from those anticipated. Such factors include market
fluctuations, the development of world market prices for commodities and
exchange rates or fundamental changes in the economic environment. TUI does
not intend to and does not undertake any obligation to update any
forward-looking statements in order to reflect events or developments after
the date of this Statement.
ISIN: DE000TUAG000
Category Code: QRT
TIDM: TUI
LEI Code: 529900SL2WSPV293B552
Sequence No.: 16542
EQS News ID: 856195
End of Announcement EQS News Service
(END) Dow Jones Newswires
August 13, 2019 02:00 ET (06:00 GMT)
Tui (LSE:TUI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Tui (LSE:TUI)
Historical Stock Chart
From Jul 2023 to Jul 2024
