Q1 2010/11: Substantial turnover and earnings growth driven by rising demand in the European travel market

TUI, Europe’s leading tourism group, benefited from growing demand in the European travel market in the first quarter of financial year 2010/11. Improvements in the operating performance in all three Sectors (TUI Travel, TUI Hotels & Resorts, TUI Cruises) generated considerable turnover and earnings growth. In the first quarter, the TUI Group’s turnover was 3.3 billion euro, up 11 per cent year-on-year (previous year 3.0 billion euro). Operating earnings (underlying EBITA) rose by around 17 per cent to -120 million euro (previous year -144 million euro). The typical seasonal loss in the tourism business narrowed by around 72 million euro to around -94 million euro (previous year -166 million euro). This constitutes a year-on-year improvement in the Group result of around 43 per cent. At -0.2 euro, earnings per share are 52 per cent up year-on-year (previous year -0.4 euro). At the end of the first quarter (31 December 2009), the TUI Group’s net debt amounted to 3.1 billion euro. Net debt was thus reduced by around 600 million euro year-on-year.

Detailed development of TUI Travel

In the first quarter, the turnover generated by TUI Travel climbed by almost 12 per cent to 3.2 billion euro (previous year 2.8 billion euro). This growth was mainly driven by higher customer numbers in the Mainstream Business in almost all source markets and the strengthening of Sterling against the Euro. Underlying earnings by the Sector improved by almost 23 million euro year-on-year. The seasonal loss typical of the industry was around -105 million euro (previous year -128 million euro). The improvement in earnings is mainly attributable to the successful turnaround of business in Canada and the improved performance of the French Corsair airline.

Detailed development of TUI Hotels & Resorts

The Group’s hotel business also benefited from higher demand for holiday tours in the first quarter. Total turnover by the Sector grew by almost 4 per cent to 184 million euro (previous year 177 million euro). Roomnights rose from 4 to 4.3 million. Hotel occupancy was around 71 per cent, up 5.4 percentage points year-on-year. Average revenues per bed increased from around 46 euro to around 48 euro. The positive development was also reflected by operating earnings. Following a slight quarterly loss of -1 million euro in 2009/10, TUI Hotels & Resorts posted underlying EBITA of 2 million euro in the first quarter of 2010/11. The growth mainly results from an improved business performance of the Riu hotel chain and higher customer numbers in almost all regions.

Detailed development of TUI Cruises

At around 40 million euro, turnover by the Cruises Sector did not fully match the prior-year level (previous year 41 million euro), driven by two cruise ships, MS Europa and MS Columbus, being in dry dock for maintenance. The joint venture TUI Cruises is measured at equity in the consolidated financial statements so that its turnover is not shown here. Operating earnings by the Cruises Sector improved by around 30 per cent in the first quarter to -4 million euro (previous year -6 million euro). This development is mainly attributable to strong demand in TUI Cruises, which recorded an increase in its load factor from almost 68 to around 97 per cent year-on-year. The average rate per passenger rose from 112 euro to 125 euro. At around 74 per cent, the load factor in Hapag-Lloyd Kreuzfahrten was 3 percentage points down year-on-year (around 77 per cent) due to the dry-dock periods. The average rate, by contrast, rose from 361 euro to 389 euro per passenger.

Detailed development of Container Shipping (100 per cent basis)

Turnover by Container Shipping rose by around 34 per cent to around 1.5 billion euro (previous year 1.1 billion euro) in the first quarter of 2010/11. This was due to higher transport volumes and in particular the significant year-on-year rise in average freight rates. Overall, Hapag-Lloyd increased its transport volume by 6.6 per cent to 1.2 million TEU (previous year 1.1 million TEU). This development was mainly driven by the Trans-Pacific trade lane. The average freight rate level was 1,639 US dollar per TEU in the first quarter of 2010/11, up around 20 per cent year-on-year (1,368 US dollar/TEU). Underlying EBITA by Container Shipping improved by around 118 million euro to 97 million euro in the first quarter (previous year -21 million euro). Besides a more favourable exchange rate exchange rate of the US dollar relative to the Euro, the reasons for the substantial growth in earnings were higher transport volumes and freight rates.