TUI AG (TUI) TUI AG: Annual Financial Report - Part 1
08-Dec-2021 / 08:00 CET/CEST Dissemination of a Regulatory
Announcement, transmitted by EQS Group. The issuer is solely
responsible for the content of this announcement.
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8 December 2021
TUI GROUP
Full-year results to 30 September 2021
FY21 Q4 FINANCIAL HIGHLIGHTS
-- Q4 Group revenue of EUR3.4bn, up EUR2.1bn versus FY20 Q4,
reflecting the success of vaccination programmesand the rebound of
leisure travel, particularly across Continental Europe during the
Summer
-- Q4 delivered first positive Group quarterly EBITDA of EUR160m
since start of pandemic
-- Almost break-even Q4 Group Und. EBIT result of EUR97m loss,
incl. EUR60m one-offs, delivered on reducedvolumes
-- First positive quarterly EBIT delivered in Q4 by Hotels &
Resorts, Central and Western Regions, sincestart of pandemic,
demonstrating the swift return of profitable contribution when we
are permitted to operate moresubstantially
-- 60% of Global Realignment Programme savings realised in FY21,
with further 25% to follow in FY22 - ontrack to deliver full target
of EUR400m p.a. by 2023
-- Strong Q4 FCF (before financing) of EUR1.4bn, second
consecutive positive FCF quarter since start ofpandemic
-- Year-end net debt of EUR5.0bn, a reduction of EUR1.4bn since
Q3 and EUR3.9bn1 on a pro-forma basis includingEUR1.1bn capital
increase completed post balance sheet
-- Extension of RCF maturities by 24 months and therefore no
major maturities until July 2024
-- More than EUR2bn of refinancing achieved in less than 12
months since agreeing third state support package(Dec 2020) -
significant steps towards returning to gross leverage ratio2 of
around 3x? Issue of EUR590m of Convertible Bonds ? Progress on
asset-right strategy, with sale of real-estate portfolio to Riu
family for EUR541m ? EUR1.1bn capital increase (concluded early
November 21)
-- Credit rating upgrades from Moody's to B3 and S&P to B-
confirmed during course of capital increase
FY21 Q4 OPERATIONAL HIGHLIGHTS
-- Hotels & Resorts achieved Q4 average occupancy of 66% and
average rate per bed of EUR73, with 92% of ourgroup portfolio
reopened as of 30 September (331 hotels in operation out of 359
group portfolio) versus 79% ofgroup portfolio as at end of Q3
-- Cruises - 14 ships out of 16 total fleet were in operation as
of 30 September, including our brand-newexpedition class Hanseatic
spirit which joined Hapag-Lloyd Cruises fleet in August 2021.
Average occupancies acrossour three cruise brands in the final
quarter ranged between 39% and 53%
-- TUI Musement operated over 1m excursions, tours and
activities in Q4, with 41% of sales booked online
-- 3.8m Markets & Airlines customers departed in Q4 with 83%
departing from our Central and Western Regions
-- 50% capacity operated by Markets & Airlines for the July
to October period in line with expectations
LATEST DEVELOPMENTS
-- Encouraging pipeline of 4.1m bookings across both Winter
21/22 and Summer 22, with 1.4m bookings addedsince 3 October (2.7m
bookings)
-- The increased media coverage of rising incident rates and the
emergence of new Omicron variant hasweakened this positive
momentum, particularly for Winter
-- Winter 21/22 bookings3 are 62% of Winter 18/19 levels with
ASP up 15%
-- Trading continues to be in line with winter capacity
assumption of 60% to 80%, with Q1 already 93%sold, if current
sentiment prevails, winter capacity will likely be modified towards
the lower end of ourassumptions
-- Proven operational track record to adapt flexibly, due to
advantage of integration
-- Easter (April) well-booked, with bookings to date at 90%
Winter 18/19 levels, predominantly booked bythe UK
-- Summer 2022 well-booked and in line with current capacity
assumptions, with ASP strongly up 23%4
-- UK May bookings4 already 52% sold
LIQUIDITY
-- As of 6 December, we have a strong liquidity position of
EUR3.5bn, with the recent capital increaseoffsetting the lower
winter working capital swing in Q1 (versus norm)
-- We are well prepared for the remainder of the winter season
and to weather any change in the bookingenvironment
STRATEGIC PRIORITIES
-- Ongoing priorities - we will continue with our disciplined
cash management, drive operatingeffectiveness, maximise
opportunities to de-lever and continue our debt reduction in order
to return to a solid andhealthy balance sheet
-- Our growth opportunities will be driven by the expansion of
our tours & activity segment, accelerateddigitalisation, our
increased offer of dynamic packaging, growth through asset-right
financing structures andexecution of our Global Realignment
programme. The combination of these drivers will enable us to
emerge stronger,leaner, more digitalised and more agile, and ready
to exploit market recovery and growth opportunities.
-- TUI is strategically well positioned and will benefit from
the strong rebound in the leisure industry.
-- Mid-term ambitions - we expect underlying EBIT to
significantly build on FY195, driven by both top-linegrowth and
benefits from our Global Realignment Programme, with a target to
return to gross leverage ratio2 of lessthan 3.0x
1 Pre-winter seasonal swing
2 Defined as gross debt (financial liabilities including lease
liabilities and net pension obligation, divided by underlying
EBITDA (IFRS16 basis)
3 Bookings up to 28 November 2021 compared to Winter 2018/2019
programme (undistorted by C-19), relate to all customers whether
risk or non-risk and includes amendments and voucher
re-bookings
4 Bookings up to 28 November 2021 compared to Summer 2019
programme (undistorted by C-19), relate to all customers whether
risk or non-risk and includes amendments and voucher
re-bookings
5 FY19A Underlying EBIT of EUR893m excluding EUR293m Boeing MAX
cost impact
ANNUAL REPORT AND FY21 RESULTS INVESTOR & ANALYST AUDIO
WEBCAST
Our year-end announcement and a full copy of our Annual Report
can be found on our corporate website: http://
www.tuigroup.com/en-en/investors. An audio webcast for investors
and analysts will take place today at 09.30 GMT / 10.30 CET. Our
year-end presentation alongside details of the webcast, will be
made available via our website beforehand.
FY21 Q4 KEY FINANCIALS (IFRS16 basis)
Year ended 30 September
Q4 2020
EURm Q4 2021 Change
Adjusted8
Revenue 3,366 1,233 -173%
Underlying EBIT6 -97 -1,030 n.m
Reported EBIT7 34 -725 n.m
Loss before tax -71 -836 n.m
Group loss attributable to shareholders of TUI AG -58 -806 n.m
Underlying loss per share -EUR0.20 -EUR1.92 n.m
Net debt -4,954 -6,421 +1,467
6 Underlying EBIT has been adjusted for gains on disposal of
investments, major gains and losses from the disposal of assets,
major restructuring and integration expenses. The indicator is also
adjusted for all effects from purchase price allocations, ancillary
acquisition costs and conditional purchase price payments
7 Reported EBIT comprises earnings before net interest result,
income tax and result from the measurement of interest hedges
8 FY20 is adjusted to IFRS16
FY21 RESULTS Q4 BRIDGE
-- Almost break-even Q4 Group Underlying EBIT result of EUR97m
loss, incl. EUR60m one-offs, delivered on reducedvolumes.
-- Demonstrating the advantage of our diversified model and
distribution power, our Hotels & Resorts,Central and Western
Regions delivered their first positive quarterly underlying EBITs
since the start of thepandemic.
In EURm (IFRS16 basis)
FY20 Q4 Underlying EBIT (adjusted)8 (1,030)
Holiday Experiences +289
Markets & Airlines +530
All other segments +10
One-offs
Prior Year Non-repeat of Impairments +105
Prior Year Non-repeat of Net Hedging Ineffectiveness +59
Current Year Impairments -29
Current Year Net Hedging Ineffectiveness -31
FY21 Q4 Underlying EBIT at actual rates -97
Q4 Underlying EBIT in EURm FY21 Q4 at FY20 Q4 at
Variance at actual rates
(IFRS 16 basis) actual rates actual rates8
Hotels & Resorts 115.9 -87.2 +203.1
Cruises -42.9 -124.9 +82.1
TUI Musement -8.6 -47.4 +38.9
Holiday Experiences 64.5 -259.6 +324.1
Northern Region -257.7 -368.5 +110.8
Central Region 48.8 -213.8 +262.6
Western Region 70.8 -147.8 +218.6
Markets & Airlines -138.1 -730.1 592.0
All other segments -23.2 -40.4 +17.2
Total TUI Group -96.9 -1,030.0 +933.2
-- Hotels & Resorts saw its first positive quarterly
underlying EBIT result since the start of the pandemicin Q4,
demonstrating the strength of our business model to restart
operations quickly in an uncertain environment. ? Our diversified
and integrated model has been a clear advantage in the current
environment, withdiffering regional restrictions enabling an
earlier reopening of some of our destinations, such as Mexico,
whichwas able to host domestic and US customers, helping to deliver
a good occupancy rate of 76% in Q4. Our integrationenabled us to
distribute customers to our own content first, with key
destinations such as the Canaries and Greecealso delivering good
occupancies of 76% and 75% respectively, in the final quarter. ?
These advantages resulted in a EUR203m improvement in Q4 underlying
result, delivering the segment's firstpositive quarterly underlying
EBIT of EUR116m since the start of the pandemic (FY20 Q4: EUR87m
loss). This improvementincludes a EUR18m non-repeat benefit from
impairments charged in Q4 of the prior year (triggered under IAS
36). ? Q4 occupancy rate increased by 19% pts to 66% (FY20 Q4: 47%)
as a result. Average rate per bed increasedby 15% to EUR73 due to
mix and normalisation in pricing as volumes recovered (FY20 Q4:
EUR64). ? 331 of our group hotels were operating (92% of 359 group
hotels) as at the end of the financial year.
-- Cruise - Q4, the first quarter with all three Cruise brands
in operation since the start of the pandemic. ? The Cruise segment
reported a Q4 underlying EBIT loss of EUR43m (FY20 Q4: EUR125m loss
including impairmentsof EUR22m). The improvement of EUR82m
year-on-year reflects the fuller return of all three cruise brands,
with both TUICruises and Hapag-Lloyd Cruises resuming original
itineraries to the Mediterranean in the final quarter and
Marellaresuming its operation in Q4, after a near fifteen-month
hiatus, offering itineraries around the British Isles andto the
Mediterranean. ? Q4 occupancy rates ranged between 39% and 53%
across our cruise brands, with an element of cappedoccupancy
requirements still in place by some destinations, and shorter lead
time to market itineraries,particularly in the UK, limiting the
opportunity. ? 14 ships out of 16 total fleet were in operation as
of 30 September 2021 (including the new expeditionclass Hanseatic
spirit which joined Hapag-Lloyd Cruises in August 2021).
-- TUI Musement saw a higher number of customers travelling this
Summer versus prior year as travelrestrictions and social
distancing requirements eased, with much of the volume driven by
our Markets & Airlinesbusiness. ? Q4 underlying EBIT loss of
EUR9m, a EUR39m improvement on prior year (FY20 Q4: EUR47m loss)
reflects theimproved environment for travel and clear benefits of
our integrated model, with more than 1m excursions andactivities
sold in the final quarter. ? 41% of Q4 sales were online with App
sales increasing 226% across the year ? We continue to accelerate
and enhance our digital transformation at TUI Musement, adapting
our "DigitalFirst" service model to ensure we remain guest centric
throughout all channels, providing support and expertise inresort
both in person and through our dedicated TUI App 24-7 when
needed.
-- Markets & Airlines - Central & Western Regions
returned to a positive underlying EBIT result, their firstpositive
quarter since start of the pandemic. ? Our Markets & Airlines
business delivered a EUR592m improvement in Q4 versus prior year
(FY21 Q4: EUR138mloss vs. FY20 Q4: EUR730m loss), benefitting from
savings achieved by our Global Realignment Programme as well asfrom
a EUR56m non-repeat benefit of impairments charged in Q4 of the
prior year (triggered under IAS 36). ? The earlier easing of travel
restrictions by the EU, enabled both our Central and Western
Regions in Q4to deliver a first quarter of positive underlying EBIT
since the start of the pandemic, demonstrating not only theclear
demand for leisure travel when permitted without restrictions, but
the continued appetite for TUI holidays aswell as our advantaged
position to quickly restart due to our integration. ? A total of
3.8m customers departed for their holidays during Q4, with 83%
departing from our Central andWestern Region markets. Overall
volume in the final quarter improved by 103% year-on-year (FY20 Q4:
1.8m)reflecting the wider lifting of travel restrictions, supported
by the successful roll-out of vaccinationprogrammes.
GLOBAL REALIGNMENT PROGRAMME - TARGETED SAVINGS OF EUR400M P.A.
BY FY23
In May 2020, we announced our Global Realignment Programme to
address group-wide costs, with a target of permanently saving more
than EUR400m per annum by FY23. In the financial year ending
September 2021, 60% of our announced targeted savings had been
delivered. Savings have been most significantly delivered across
the Markets & Airlines division (85% of savings to date), which
has been achieved through reductions of our retail shop estate and
significant down-sizing of our German airline fleet of 39 aircraft
(June 2020) by 40%. The remaining FY21 savings were delivered
across corporate head office functions and other entities, TUI
Musement and Hotels & Resorts. Of our announced 8k FTE roles
impacted, 7k FTEs have been agreed to date. We expect to deliver a
further 25% of our targeted savings in FY22 and to deliver the full
programme benefits by end of FY23. To continue to deliver our
targets we expect remaining restructuring costs of EUR70m in
FY22.
The continued execution of our Global Realignment Programme
combined with accelerated digitalisation, expansion of our tours
& activity segment, growth through asset-right financing
structures, enables TUI to emerge stronger, leaner, more
digitalised and more agile, and ready to exploit market recovery
and growth opportunities.
NET DEBT
The year-end net debt position of EUR5.0bn (IFRS 16 basis) is an
improvement of EUR1.4bn from 30 June 2021 net debt position of
EUR6.3bn. The improvement in the final quarter reflects cash
proceeds generated by the Riu real-estate disposal and cash flow
generated by our operations, which were used to reduce our KfW RCF
to EUR0.4bn, in line with our pro-forma net debt expectations.
Post balance sheet date, we concluded a capital increase of
EUR1.1bn in early November 2021, improving our pro-forma net-debt
position to EUR3.9bn (pre-winter seasonal swing).
CURRENT TRADING
Hotels & Resorts - 256 hotels in operation (72% of total
group owed portfolio) as of end of October, reflecting the winter
seasonality as some our short-haul Mediterranean destinations close
for the winter months (vs. 331 hotels /92% of total group owed
portfolio as of end of September). We expect the Caribbean and the
Canaries to remain key winter destinations for both our Markets
& Airlines and third-party customers, with our diversified and
integrated model delivering clear advantages in the current
environment.
Cruises - TUI Cruises will be operating 5 out of its 7 Mein
Schiff fleet over the Winter 21/22 season with Hapag-Lloyd Cruises
operating its full fleet of 5 ships. Winter destinations for the
Mein Schiff fleet include the Caribbean, the Canaries and the
Emirates. Hapag-Lloyd Cruises will be resuming its original
around-the-world cruise itinerary over the winter, as well as
operating in the Emirates and Northern Europe, with two of its
three expedition ships returning also to Antarctica. The short-term
booking environment continues, with bookings strong in September
and October, however November softer in light of recent sentiment
and news flow. As a result, incoming bookings for H1 2022 are
slightly behind pre-C-19 comparable periods, but at significantly
higher rates. Bookings for H2 2022 and 2023 are level with pre-C19
comparable periods, at higher rates.
Marella Cruises is currently operating 3 out of its 4-ship fleet
for its winter programme. Explorer is sailing in the Canaries,
Explorer 2 in the Western Mediterranean and Discovery in the
Caribbean, with Barbados itinerary in particular well sold. The
current short-term booking pattern we see for Markets &
Airlines is also evident for UK Cruise, with stronger late demand
for short and medium-haul itineraries. Discovery 2 is expected to
re-join the fleet from March, sailing out of Palma. Summer 22
bookings remain well-positioned with strong retention levels.
TUI Musement - Excursions, tours and activities to develop in
line with operations and capacity operated by Markets &
Airlines for Winter 21/22, in line with winter seasonality.
Winter 2021/22 - Bookings3 at this stage are 62% of Winter 18/19
levels. Prior to recent news coverage, bookings were returning to
normalised W18/19 levels, with 863k bookings taken since last
update on 3 October and ASPs strong at up 15%. Q1 capacity plans
already reflect a relatively lower winter volume and is well sold
at 93%, however in light of recent trends, capacity will likely be
modified towards the lower end of our winter capacity plans of
between 60% and 80%. We expect the current short-term booking
behaviour to continue. Easter (April) is well-booked, with bookings
to date at 90% of Winter 18/19 levels, predominately booked by the
UK.
Summer 2022 - We have a very encouraging pipeline of 2.2m
bookings4, which is an increase of 535k bookings since our last
update on 3 October, driven by a mix of re-bookings and new
bookings, reaffirming the intention to travel and continued
appetite for a TUI summer holiday. The UK, which is typically the
most advanced booked due to the earlier launch of its Summer
programme, is already 52% sold for May with total Markets &
Airlines bookings for the key August holiday period up 17%. Overall
Summer bookings4 are down 3% and ASP is up strongly at 23% (versus
Summer 19), reflecting the higher mix of packages. At this early
stage, we believe Summer 22 volumes will recover close to
normalised Summer 19 levels, supported by the stronger starting
position and a travel environment underpinned by the continued
success of vaccinations.
It remains difficult to forecast the further course of the
pandemic and its impact on customer behaviour. In view of the
uncertain environment, the Executive board believes it would not be
appropriate to issue a specific forecast for the new financial year
2022 at this time.
______________________________________________________________________________________________
FY21 FY KEY FINANCIALS (IFRS16 basis)
Year ended 30 September
2020
EURm 2021 Change
Adjusted8
Revenue 4,732 7,944 -40%
Underlying EBIT6 -2,075 -2,997 +31%
Reported EBIT7 -2,013 -2,927 +31%
Loss before tax9 -2,462 -3,203 +23%
Group loss attributable to shareholders of TUI AG -2,467 -3,148 +22%
Underlying loss per share10 -EUR2.28 -EUR5.56 +59%
Dividend per share EUR0.00 EUR0.00 n.a
Net debt -4,954 -6,421 +1,467
6 Underlying EBIT has been adjusted for gains on disposal of
investments, major gains and losses from the disposal of assets,
major restructuring and integration
expenses. The indicator is also adjusted for all effects from
purchase price allocations, ancillary acquisition costs and
conditional purchase price payments.
7 Reported EBIT comprises earnings before net interest result,
income tax and result from the measurement of interest hedges
8 FY20 is adjusted to IFRS16
9 For reconciliation of loss/earnings before tax to underlying
EBIT, please refer to page 58 of the Annual Report
10 For calculation of underlying loss/earnings per share please
refer to page 34 of the Annual Report
FY21 FY RESULTS BRIDGE
In EURm (IFRS16 basis)
FY20 FY Underlying EBIT (adjusted)8 (2,997)
Holiday Experiences -48
Markets & Airlines +68
All other segments +50
One-offs
Prior Year Non-repeat of Impairments +515
Prior Year Non-repeat of Net Hedging Ineffectiveness +248
Prior Year Non-repeat MAX costs +72
Prior Year Non-repeat C-19 repatriation and compensation costs +43
Current Year Impairments -66
Current Year Net Hedging Ineffectiveness +40
FY21 FY Underlying EBIT at actual rates -2,075
FY Underlying EBIT in EURm FY21 at FY20 at
Variance at actual rates
(IFRS 16 basis) actual rates actual rates8
Hotels & Resorts -152.7 -395.2 +242.5
Cruises -277.5 -322.3 +44.8
TUI Musement -105.3 -114.0 +8.7
Holiday Experiences -535.4 -831.5 +296.1
Northern Region -965.8 -960.9 -4.9
Central Region -328.6 -612.5 +283.9
Western Region -176.6 -433.7 +257.1
Markets & Airlines -1,470.9 -2,007.1 +536.2
All other segments -69.1 -158.4 +89.3
Total TUI Group -2,075.5 -2,997.0 +921.5
ANALYST & INVESTOR ENQUIRIES
Tel: +44 (0) 1293 645 925
Mathias Kiep, Group Director Investor Relations, Controlling and Corporate Finance
+49 (0) 511 566 1425
Nicola Gehrt, Director, Head of Group Investor Relations Tel: +49 (0) 511 566 1435
Contacts for Analysts and Investors in UK, Ireland and Americas
Hazel Chung, Senior Investor Relations Manager Tel: +44 (0) 1293 645 823
James Trimble, Investor Relations Manager Tel: +44 (0) 1582 315 293
Contacts for Analysts and Investors in Continental Europe, Middle East and Asia
Ina Klose, Senior Investor Relations Manager Tel: +49 (0) 511 566 1318
Vera Weißwange, Junior Investor Relations Manager Tel: +49 (0) 511 566 1425
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ISIN: DE000TUAG000
Category Code: ACS
TIDM: TUI
LEI Code: 529900SL2WSPV293B552
OAM Categories: 1.1. Annual financial and audit reports
Sequence No.: 128507
EQS News ID: 1254946
End of Announcement EQS News Service
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