TUI Group achieves record growth in operating performance in financial year 2011/12

The TUI Group ends financial year 2011/12 with record results from operations and provides a positive outlook for the current financial year. In the period under review, Europe’s leading tourism group achieved turnover growth of 5 per cent to 18.3 billion euros (previous year 17.5 billion euros). Underlying EBITA, the Group’s key performance indicator, leaped by 24 per cent to a record result of 746 million euros. Group profit rose by 20 per cent to 142 million euros (previous year 118 million euros). TUI CEO Dr Michael Frenzel commented: “Our business model has proven to be stable and sustainable despite a challenging economic framework in our key source markets in Europe. TUI is outperforming the market. Thanks to our product strategy and our efficient capacity control, we have delivered record operating results."

Frenzel continued: “A further milestone in the completed financial year was the significant reduction in net debt of 639 million euros. We have thus achieved our long-standing objective of placing the Group in a virtually debt-free position.” At the balance sheet date, net debt stood at 178 million euros (-78 per cent as against 30 September 2011). Earnings per share declined to -0.16 euros (previous year -0.01 euros). This was primarily due to the considerable deterioration in the profit contribution from the Hapag-Lloyd shareholding included in TUI’s Group result (-49 million euros; previous year -2 million euros).

TUI assesses the outlook for the current financial year 2012/13 as positive. The Executive Board expects a slight increase in turnover, above all driven by a higher proportion of exclusive product in TUI Travel’s Mainstream Business. Operating earnings are expected to match the high level posted for the com-pleted financial year provided that consumer sentiment in the key source markets remains stable. Overall, TUI expects the Group result for financial year 2012/13 to be positive.

TUI Travel
In the period under review, turnover by TUI Travel grew by 4.8 per cent to 17.7 billion euros (previous year 16.9 billion euros); on a constant currency basis it rose by 2.1 per cent. On overall stable customer numbers, this development was mainly driven by higher average selling prices and a higher proportion of differentiated product versus the prior year. Operating earnings improved by around 28 per cent to 637 million euros (previous year 500 million euros). This was also primarily attributable to a higher proportion of differentiated, exclusive products in the Mainstream Business and stronger selling through direct distribution channels. This development was particularly strong in source market UK, where TUI UK recorded substantial gains in market shares.

Hotels Resorts
The Group’s Hotels & Resorts Sector has also recorded a successful financial year. Total turnover rose by 5.8 per cent to 826 million euros (previous year 781 million euros). This development was above all attributable to an increase in average revenues per bed of 3.5 per cent and an improvement in occupancy of 2.1 percentage points, with capacity only slightly up year-on-year. Operating earnings by TUI Hotels & Resorts leaped by more than 23 per cent to around 179 million euros (previous year 145 million euros). This growth was driven by better pricing and successful cost management by Riu, the largest hotel chain.

Cruises
The Cruises Sector comprises the brands Hapag-Lloyd Kreuzfahrten and TUI Cruises (measured at equity, turnover not shown). Turnover by the Sector grew by 15 per cent to 231 million euros (previous year 201 million euros) due to capacity increases within the Hapag-Lloyd fleet. Operating earnings by the Cruises Sector declined considerably to 3 million euros (previous year 11 million euros). While TUI Cruises continued to develop very well, Hapag-Lloyd Kreuzfahrten posted a decline in earnings due to start-up costs for the fleet expansion and lower average rates. Occupancy of Hapag-Lloyd ships was 77.4 per cent (previous year 76.7 per cent), while the average rate decreased from 422 euros per passenger per day to 399 euros in the period under review. TUI Cruises achieved an increase in occupancy to 101 per cent. At 151 euros per passenger per day, the average rate was flat year-on-year (152 euros).