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TUI AG: 1st Quarter Results 2019

12/02/2019 6:00am

UK Regulatory (RNS & others)


Dow Jones received a payment from EQS/DGAP to publish this press release.

 
 
 TUI AG (TUI) 
TUI AG: 1st Quarter Results 2019 
 
12-Feb-2019 / 07:00 CET/CEST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
QUARTERLY STATEMENT 
Q1 2019 
 
TUI Group - financial highlights 
 
EUR million                  Q1 2019   Q1 2018  Var. % Var. % at 
                                       adjusted        constant 
                                                       currency 
Turnover                     3,704.8   3,548.9  + 4.4  + 4.7 
Underlying EBITA1 
Hotels & Resorts             68.7      91.9     - 25.2 - 25.8 
Cruises                      47.0      37.5     + 25.3 + 25.6 
Destination Experiences      - 4.7     - 3.5    - 34.3 - 28.6 
Holiday Experiences          111.0     125.9    - 11.8 - 12.0 
Northern Region              - 74.3    - 37.3   - 99.2 - 98.1 
Central Region               - 37.1    - 54.8   + 32.3 + 32.1 
Western Region               - 66.7    - 48.7   - 37.0 - 36.8 
Markets & Airlines           - 178.1   - 140.8  - 26.5 - 26.2 
All other segments           - 16.5    - 21.8   + 24.3 + 21.1 
TUI Group                    - 83.6    - 36.7   -      - 129.2 
                                                127.8 
EBITA2                       - 105.6   - 56.9   - 85.6 
Underlying EBITDA3           26.8      57.5     - 53.4 
EBITDA3                      11.9      43.6     - 72.7 
EBITDAR4                     189.6     214.4    - 11.6 
Net loss for the period      - 111.9   - 68.3   - 63.8 
Earnings per shareEUR        - 0.24    - 0.19   - 26.3 
Equity ratio (31 Dec)5       26.9      26.7     + 0.2 
 
% 
Net capex and investments    294.8     140.7    + 
                                                109.5 
Net financial position (31   - 1,832.0 - 874.2  - 
Dec)                                            109.6 
Employees (31 Dec)           60,839    55,061   + 10.5 
 
Differences may occur due to rounding. 
 
This Quarterly Statement of the TUI Group was prepared for the reporting 
period Q1 2019 from 1 October 2018 to 31 December 2018. 
 
The TUI Group applied IFRS 15 and IFRS 9 retrospectively from 1 October 
2018. Previous year' figures were adjusted due to the first-time application 
of IFRS 15 and previous year's structure was adjusted due to the first-time 
application of IFRS 9. 
 
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 15 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 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. 
 
4 For the reconciliation from EBITDA to the indicator EBITDAR, long-term 
leasing and rental expenses are eliminated. 
 
5 Equity divided by balance sheet total in %, variance is given in 
percentage points. 
 
Q1 Summary 
 
· Q1 performance was in line with our expectations. Our product-­focussed 
strategy and investment in unique hotel and cruise brands continues to pay 
off. 
 
· As flagged, this was offset by a weak performance in our ­Markets & 
Airlines business, where the seasonal loss increased significantly. This 
was primarily due to the knock-on impact of the Summer 2018 heatwave, 
overcapacities in Spain arising from the shift in demand to the Eastern 
Mediterranean, pressure on yields, continued Pound Sterling weakness, and 
strong ­comparatives for Nordics in Q1 last year. 
 
· The current year result also includes a net EUR 11 m benefit from 
special items, as stated below. Please refer to pages 6 to 10 below for 
further detail on segmental performance in Q1. 
 
· As detailed in our announcement on 6 February 2019, we expect underlying 
EBITA rebased at constant currency to be broadly stable in FY19 compared 
with the record performance in FY18 of EUR 1,177 m1, with a continued 
strong performance in Holiday Experiences offset by a continuation of 
sector headwinds in Markets & Airlines. 
 
· Our growth strategy remains intact and TUI is well positioned. 
 
1 Based on constant currency; FY18 comparative rebased in December 2018 to 
EUR 1,187 m to take into account EUR 40 m impact for revaluation of Euro 
loan balances within Turkish Lira entities in FY18, and adjusted further to 
EUR 1,177 m for ­retrospective application of IFRS 15 
 
Q1 results at a glance 
EUR million                                    Q1 2019 
Underlying EBITA Q1 FY18 (originally reported) - 25 
IFRS 15 impact2                                - 12 
Underlying EBITA Q1 FY18 (adjusted)            - 37 
Holiday Experiences                            + 23 
Markets & Airlines                             - 86 
All other segments                             + 5 
Special items 
Prior year: Riu gains on disposal              - 38 
Prior year: Niki bankruptcy impact             + 20 
Current year: Northern Region hedging gain3    + 29 
Underlying EBITA Q1 FY19 constant currency     - 84 
Foreign exchange translation                   - 
Underlying EBITA Q1 FY19                       - 84 
 
2 TUI Group has applied IFRS 15 from 1 October 2018 using the retrospective 
method. This means that the prior year reference period is presented in 
accordance with IFRS 15. The main impacts of this were set out on page 248 
of our Annual Report 2018. 
 
3 Relates to gains crystallised on a hedge taken out in Northern Region, 
which is no longer required. 
 
Outlook and Expected Development 
 
We are continuing to deliver our growth strategy, with a focus on product 
and investment in unique Holiday Experiences, together with the ongoing 
digitalisation and platforming of our business. We currently have 28 hotel 
openings, mainly in year-round destinations, and three cruise ship launches 
scheduled in FY19, and are on track with the integration of last year's 
Destination Management and Musement acquisitions in Destination Experiences. 
These acquisitions have significantly enhanced our geographic coverage and 
excursions & activities product offer, as well as providing a digitalised 
platform for future growth with the Musement platform now including content 
from Destination Experiences. In addition, TUI UK retail are using Musement 
as their booking ­platform for excursions & activities. In terms of 
destinations, Turkey and North Africa continue to grow in popularity, with 
demand for Spain continuing to normalise. In Cruises, the strong demand 
continues for TUI Cruises, Marella Cruises and Hapag-Lloyd Cruises, as we 
look forward to our ship launches in 2019 and beyond. Looking ahead, load 
factor and yield performance are in line with our expectations, and reflect 
the additional capacity coming to market. 
 
As published in our announcement on 6 February 2019, Markets & Airlines 
continue to face significant sector headwinds. Previously, it was 
anticipated that these headwinds would impact negatively on H1 (Winter), 
however we are seeing from current bookings an adverse impact on H2 
(Summer), and have updated our guidance accordingly. Markets & Airlines 
bookings4 for Winter 2018 / 19 are down 1 % on prior year, with average 
selling price down 2 % and a lower margin performance than prior year. 85 % 
of the programme has been sold to date. For Summer 2019, 34 % of the 
programme has been booked to date. Bookings are broadly in line with prior 
year and average selling price is flat, again with a lower margin 
performance than prior year. 
 
4 These statistics are up to 3 February 2019, shown on a constant currency 
basis and relate to all customers whether risk or non-risk 
 
The lower margin performance is driven by a continuation of the sector 
headwinds already discussed at our FY18 results presentation in December 
2018, in particular: 
 
· negative impact from the extraordinary hot weather in 2018, resulting in 
later bookings and weaker Markets & Airlines margins; 
 
· shift in demand from the Western to Eastern Mediterranean, which has 
created overcapacities in certain destinations such as the Canaries, 
resulting in lower margins for Markets & Airlines; and 
 
· continued weakness of the Pound Sterling, making it difficult to improve 
margins on holidays sold to UK customers. 
 
We therefore expect underlying EBITA to be broadly stable in FY19 compared 
with the record performance in FY18 of EUR 1,177 m5, with a continued strong 
performance in Holiday Experiences offset by a continuation of sector 
headwinds in Markets & Airlines. 
 
5 Based on constant currency; FY18 comparative rebased in December 2018 to 
EUR 1,187 to take into account EUR 40 m impact for revaluation of Euro loan 
balances within Turkish Lira entities in FY18, and adjusted further to EUR 
1,177 m post ­retrospective application of IFRS 15 
 
We are already taking specific measures to address Markets & Airlines 
headwinds, including harmonisation under one leadership to drive cost 
savings and efficiencies; reducing distribution costs by shifting to more 
direct, more online, more mobile; and increasing upselling of activities & 
excursions to drive revenue and margin benefits. We also expect that the 
continued sector headwinds may trigger market consolidation, and that TUI 
could be a beneficiary of this. 
 
Despite the challenges experienced by Markets & Airlines, demand for leisure 
travel continues to grow in our core markets. We have positioned TUI to 
benefit from this through the successful transformation as an integrated 
provider of Holiday Experiences ­(hotels, cruises and activities & 
excursions), based on its strong strategic and financial position. On top of 
that, we are planning to enter into new markets generating EUR 1 billion of 
revenue from 1 million customers by 2022, driving more demand for our own 
hotels. Holiday Experiences delivered 70 % of underlying EBITA in FY18 and 
we expect continued strong performance from these parts of our business. 
Having delivered this transformation, we expect the ongoing digitalisation 
and platforming of our business to drive future earnings, positioning TUI to 
continue to benefit from the strong mid- to long-term growth in consumer 
demand for leisure travel. 
 
Due to the application of IFRS 15, turnover for FY18 has been adjusted to 
EUR 19.2 billion. Our guidance of around 3 % turnover growth in FY196 
remains unchanged. 
 
6 Based on constant currency; prior year comparatives presented in 
­accordance with IFRS 15 
 
With regard to the UK's exit from the EU in 2019, the main concern remains 
whether our airlines will continue to have access to EU airspace. We are 
continuing to address the importance of there being a special agreement for 
aviation to protect consumer choice with the relevant UK and EU ministers 
and officials, and are in regular exchange with relevant regulatory 
authorities. We continue to develop scenarios and mitigating strategies for 
various outcomes, including a "hard Brexit", depending on the political 
negotiations, with a focus to alleviate potential impacts from Brexit for 
the Group. 
 
Consolidated earnings 
 
Turnover 
EUR million                    Q1 2019  Q1 2018  Var. % 
                                        adjusted 
Hotels & Resorts               139.3    144.8    - 3.8 
Cruises                        193.0    192.3    + 0.4 
Destination Experiences        158.3    39.2     + 303.8 
Holiday Experiences            490.6    376.3    + 30.4 
Northern Region                1,153.8  1,183.9  - 2.5 
Central Region                 1,333.6  1,275.5  + 4.6 
Western Region                 573.7    575.9    - 0.4 
Markets & Airlines             3,061.1  3,035.3  + 0.8 
All other segments             153.1    137.3    + 11.5 
TUI Group                      3,704.8  3,548.9  + 4.4 
TUI Group at constant currency 3,716.6  3,548.9  + 4.7 
 
Underlying EBITA 
EUR million                    Q1 2019  Q1 2018  Var. % 
                                        adjusted 
Hotels & Resorts               68.7     91.9     - 25.2 
Cruises                        47.0     37.5     + 25.3 
Destination Experiences        - 4.7    - 3.5    - 34.3 
Holiday Experiences            111.0    125.9    - 11.8 
Northern Region                - 74.3   - 37.3   - 99.2 
Central Region                 - 37.1   - 54.8   + 32.3 
Western Region                 - 66.7   - 48.7   - 37.0 
Markets & Airlines             - 178.1  - 140.8  - 26.5 
All other segments             - 16.5   - 21.8   + 24.3 
TUI Group                      - 83.6   - 36.7   - 127.8 
TUI Group at constant currency - 84.1   - 36.7   - 129.2 
 
EBITA 
EUR million             Q1 2019  Q1 2018  Var. % 
                                 adjusted 
Hotels & Resorts        68.7     91.9     - 25.2 
Cruises                 47.0     37.5     + 25.3 
Destination Experiences - 8.7    - 3.8    - 128.9 
Holiday Experiences     107.0    125.6    - 14.8 
Northern Region         - 91.1   - 41.6   - 119.0 
Central Region          - 39.0   - 58.4   + 33.2 
Western Region          - 68.3   - 58.6   - 16.6 
Markets & Airlines      - 198.4  - 158.6  - 25.1 
All other segments      - 14.2   - 23.9   + 40.6 
TUI Group               - 105.6  - 56.9   - 85.6 
 
Segmental performance 
 
Holiday Experiences 
EUR million                           Q1 2019  Q1 2018  Var. % 
                                               adjusted 
Turnover                              490.6    376.3    + 30.4 
Underlying EBITA                      111.0    125.9    - 11.8 
Underlying EBITA at constant currency 110.8    125.9    - 12.0 
rates 
 
Hotels & Resorts 
                                      Q1 2019  Q1 2018  Var. % 
                                               adjusted 
Total turnoverin EUR million          313.5    295.4    + 6.1 
Turnoverin EUR million                139.3    144.8    - 3.8 
Underlying EBITAin EUR million        68.7     91.9     - 25.2 
Underlying EBITA at constant currency 68.2     91.9     - 25.8 
ratesin EUR million 
Capacity hotels total1in '000         9,135    8,870    + 3.0 
Riu                                   4,415    4,395    + 0.4 
Robinson                              677      691      - 2.0 
Blue Diamond                          949      810      + 17.2 
Occupancy rate hotels total 2         76       75       + 0.6 
 
in %, variance in % points 
Riu                                   82       85       - 2.3 
Robinson                              71       64       + 7.6 
Blue Diamond                          74       78       - 4.0 
Average revenue per bed hotels        65       63       + 2.7 
total3, 4 
 
in EUR 
Riu                                   65       64       + 1.4 
Robinson                              88       91       - 3.3 
Blue Diamond4                         113      106      + 6.2 
 
Turnover measures include fully consolidated companies, all other KPIs incl. 
companies measured at equity 
 
1 Group owned or leased hotel beds multiplied by opening days per quarter 
 
2 Occupied beds divided by capacity 
 
3 Arrangement revenue divided by occupied beds 
 
4 FY18 Average revenue per bed restated 
 
· Excluding last year's EUR 38 m gain on three hotel disposals in Riu, 
underlying EBITA of Hotels & Resorts increased by EUR 15 m, driven by the 
continued recovery in demand for Turkey and North Africa. 
 
· Occupancy for the segment remains high, at 76 %, reflecting the 
continued strong benefit of our integrated business model. Average revenue 
per bed increased by 3 %. 
 
· Twelve new hotels were opened in the quarter in year-round destinations 
(Caribbean, Mexico, Cape Verde and Egypt). 
 
· Our diversified portfolio of hotels and destinations means that we 
continue to benefit from the increased demand for Turkey and North Africa. 
Occupancy, rates and earnings in these hotels continued to grow this 
quarter. 
 
· Riu's performance was driven primarily by the non-repeat of last year's 
disposal gains. Overall, occupancy remains high at 82 %, and average rate 
per bed increased by 1 % versus prior year. As expected, demand for Spain 
(including Canaries) is continuing to normalise. Riu opened three new 
hotels this quarter in Mexico and Cape Verde. 
 
· Robinson's performance was slightly behind prior year, due to the 
planned closure of a club in Fuerteventura for major renovation, partly 
offset by improved performance in Maldives, Turkey and North Africa. 
Average rate decreased due to lower pricing in Spain, which was not fully 
offset by higher pricing for Turkish clubs due to seasonal planned 
closures. 
 
· Blue Diamond's earnings decreased in the quarter as a result of higher 
interest costs in relation to the financing of new hotels. The reduction 
in occupancy this quarter reflects the impact of new openings, as they 
continue to build up to run-rate. 
 
Cruises 
                                      Q1 2019  Q1 2018  Var. % 
                                               adjusted 
Turnover1in EUR million               193.0    192.3    + 0.4 
Underlying EBITAin EUR million        47.0     37.5     + 25.3 
Underlying EBITA at constant currency 47.1     37.5     + 25.6 
ratesin EUR million 
Occupancyin %, variance in % points 
TUI Cruises                           100      99       + 1.3 
Marella Cruises2                      102      101      + 0.8 
Hapag-Lloyd Cruises                   75       76       - 0.4 
Passenger daysin '000 
TUI Cruises                           1,372    1,266    + 8.3 
Marella Cruises2                      704      692      + 1.8 
Hapag-Lloyd Cruises                   71       75       - 5.1 
Average daily rates3 
 
in EUR 
TUI Cruises                           149      149      - 
Marella Cruises2, 4                   137      129      + 6.2 
Hapag-Lloyd Cruises                   591      533      + 10.9 
 
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, in GBP 
 
· The Cruises underlying EBITA result increased by EUR 10 m in the 
quarter, driven primarily by increased earnings for Hapag-Lloyd Cruises. 
 
· TUI Cruises earnings increased due to the launch of the new Mein Schiff 
1 in 2018 and good performance across the fleet, offset partly by the exit 
of the former Mein Schiff 1 to Marella. 
 
· Marella Cruises earnings increased due to the launch of Marella Explorer 
in 2018 (the former Mein Schiff 1) and a good performance across the 
fleet, offset partly by dry dock days for the Discovery and exit of the 
Spirit. 
 
· Hapag-Lloyd Cruises earnings increased significantly, with increased 
rates across the fleet and the non-repeat of dry dock days in prior year, 
partly offset by the exit of the Hanseatic. 
 
Destination Experiences 
EUR million                           Q1 2019  Q1 2018  Var. % 
                                               adjusted 
Total turnover*                       226.3    83.2     + 172.0 
Turnover*                             158.3    39.2     + 303.8 
Underlying EBITA                      - 4.7    - 3.5    - 34.3 
Underlying EBITA at constant currency - 4.5    - 3.5    - 28.6 
rates 
 
* Previous year's figures restated for reclassification of Destination 
Experiences companies of Crystal Ski previously reported in Northern Region 
 
· The Destination Experiences result reflects the positive impact from the 
acquisition of Destination Management, offset by the start-up losses in 
our Musement acquisition. As flagged previously, we expect the Musement 
acquisition to become earnings accretive from year two. 
 
· The integration of Destination Management is on track and synergies will 
start to be delivered during FY19. The Musement platform is now live with 
Destination Experiences products, and has also been rolled out as the 
agency solution for TUI UK retail. 
 
Markets & Airlines 
                                      Q1 2019  Q1 2018  Var. % 
                                               adjusted 
Turnoverin EUR million                3,061.1  3,035.3  + 0.8 
Underlying EBITAin EUR million        - 178.1  - 140.8  - 26.5 
Underlying EBITA at constant currency - 177.7  - 140.8  - 26.2 
ratesin EUR million 
Direct distribution mix1              73       74       - 1.0 
 
in %, variance in % points 
Online mix2                           49       48       + 1.0 
 
in %, variance in % points 
Customersin '000                      3,667    3,623    + 1.2 
 
1 Share of sales via own channels (retail and online) 
 
2 Share of online sales 
 
· As expected and outlined in our FY18 results in December 2018, the weak 
performance in Markets & Airlines was primarily due to the knock-on impact 
of the Summer 2018 heatwave, overcapacities in Spain arising from the 
shift in demand to the Eastern Mediterranean, pressure on yields, 
continued Pound Sterling weakness, and strong comparatives for Nordics in 
Q1 last year. 
 
· The current year result for Northern Region includes a gain which was 
crystallised on a hedge which is no longer required. 
 
Northern Region 
                                      Q1 2019  Q1 2018  Var. % 
                                               adjusted 
Turnoverin EUR million                1,153.8  1,183.9  - 2.5 
Underlying EBITAin EUR million        - 74.3   - 37.3   - 99.2 
Underlying EBITA at constant currency - 73.9   - 37.3   - 98.1 
ratesin EUR million 
Direct distribution mix1              93       92       + 1.0 
 
in %, variance in % points 
Online mix2                           67       65       + 2.0 
 
in %, variance in % points 
Customersin '000                      1,237    1,249    - 1.0 
 
1 Share of sales via own channels (retail and online) 
 
2 Share of online sales 
 
· For both UK and Nordics, demand has been significantly impacted by the 
factors outlined above. In addition, this has made it harder in the 
Nordics to pass on relatively high cost inflation this Winter (currency 
and departure taxes). 
 
· Northern Region customer numbers declined by 1.0 % compared with prior 
year. In the UK, although customer numbers were broadly in line with prior 
year, trading margin performance was significantly lower due to the 
factors outlined above. 
 
· In the Nordics, volumes were down 5.6 % on prior year, with many 
customers having used up their annual leave over the Summer to enjoy the 
hot weather. This compares with a very strong performance in Nordics in 
the previous year. 
 
· The share of earnings for Canada decreased in the quarter, primarily as 
a result of the year on year impact of fuel and currency rates. 
 
· The negative effects outlined above were partly offset by EUR 29 m gain 
which crystallised during the quarter on a hedge which is no longer 
required. 
 
Central Region 
                                      Q1 2019  Q1 2018  Var. % 
                                               adjusted 
Turnoverin EUR million                1,333.6  1,275.5  + 4.6 
Underlying EBITAin EUR million        - 37.1   - 54.8   + 32.3 
Underlying EBITA at constant currency - 37.2   - 54.8   + 32.1 
ratesin EUR million 
Direct distribution mix1              49       49       - 
 
in %, variance in % points 
Online mix2                           21       20       + 1.0 
 
in %, variance in % points 
Customersin '000                      1,404    1,373    + 2.3 
 
Previous year's figures adjusted due to the reclassification of Italian tour 
operators 
 
1 Share of sales via own channels (retail and online) 
 
2 Share of online sales 
 
· The improvement in Central Region underlying EBITA was driven by 
Germany. This included the non-repeat of the impact of the bankruptcy of 
Niki (EUR 20 m cost in prior year) as well as reduced overheads. These 
positive effects were offset partly by the increase in airline cost base 
due to the loss of the Air Berlin / Niki contract, as well as reduced 
trading as a result of the headwinds outlined above. 
 
· Central Region customer volumes increased by 2.3 %. Germany was broadly 
in line with prior year. The increase was driven by Poland, where we 
continue to build scale and market share. 
 
Western Region 
                                      Q1 2019  Q1 2018  Var. % 
                                               adjusted 
Turnoverin EUR million                573.7    575.9    - 0.4 
Underlying EBITAin EUR million        - 66.7   - 48.7   - 37.0 
Underlying EBITA at constant currency - 66.6   - 48.7   - 36.8 
ratesin EUR million 
Direct distribution mix1              76       75       + 1.0 
 
in %, variance in % points 
Online mix2                           59       58       + 1.0 
 
in %, variance in % points 
Customersin '000                      1,026    1,001    + 2.5 
 
1 Share of sales via own channels (retail and online) 
 
2 Share of online sales 
 
· In Western Region, margins were impacted by the factors outlined above. 
In addition, especially in France, there was a negative consumer sentiment 
against the backdrop of the "Gilets Jaunes" protests. 
 
· In addition, the result reflects a higher level of airline disruption 
and staffing costs in Belgium. 
 
· Customer volumes increased by 2.5 %, with a higher increase in Belgium 
(mainly driven by seat only) offset by lower volumes than prior year in 
France. 
 
All other segments 
EUR million                           Q1 2019  Q1 2018  Var. % 
                                               adjusted 
Turnover                              153.1    137.3    + 11.5 
Underlying EBITA                      - 16.5   - 21.8   + 24.3 
Underlying EBITA at constant currency - 17.2   - 21.8   + 21.1 
rates 
 
· The result for All other segments improved primarily due to a reduction 
in head office costs. 
 
· The Corsair result further deteriorated due to increased costs and the 
impact of the recent 'Gilets Jaunes' protests in France. 
 
Cash flow / Net capex and investments / Net debt 
 
The cash outflow from operating activities increased by EUR 260 m to EUR - 
1,580 m. This was driven by a higher working capital outflow for the payment 
of hotel creditors than prior year, mainly as a result of increased capacity 
in Summer 2018 in Central Region. 
 
As at 31 December 2018, the net debt rose by EUR 958 m. The year-on-year 
increase in net debt primarily reflected the planned reinvestment of the 
proceeds of disposals generated in the two prior years as well as additional 
aircraft finance leases. 
 
From the Half Year Financial Report 2018, we have adjusted the definition of 
our net debt. While net debt has so far been calculated as the balance 
between current and non-current financial debt and cash and cash 
equivalents, we will also consider future short-term interest-bearing 
investments as a debt-deduction item. The majority of these investments 
become due between three and six months. In accordance with IFRS 
regulations, these investments are not shown as cash and cash equivalents in 
the consolidated balance sheet but within current trade receivables and 
other assets. This adjustment had no effect on the previous year. 
 
Net financial position 
EUR million                     31 Dec 2018 31 Dec 2017 Var. % 
Financial debt                  2,761.5     1,871.4     + 47.6 
Cash and cash equivalents       919.7       997.2       - 7.8 
Short-term interest-bearing     9.8         -           n. a. 
investments 
Net debt                        - 1,832.0   - 874.2     - 109.6 
 
Net capex and investments 
EUR million                           Q1 2019  Q1 2018  Var. % 
                                               adjusted 
Cash gross capex 
Hotels & Resorts                      79.1     62.1     + 27.4 
Cruises                               146.2    35.4     + 313.0 
Destination Services                  2.0      0.9      + 122.2 
Holiday experiences                   227.3    98.4     + 131.0 
Northern Region                       10.7     8.3      + 28.9 
Central Region                        6.0      6.9      - 13.0 
Western Region                        11.3     6.1      + 85.2 
Markets & Airlines                    28.0     21.3     + 31.5 
All other segments                    21.8     55.3     - 60.6 
TUI Group                             277.1    175.0    + 58.3 
Net pre delivery payments on aircraft - 32.0   40.5     n. a. 
Financial investments                 61.4     10.4     + 490.4 
Divestments                           - 11.7   - 85.2   + 86.3 
Net capex and investments             294.8    140.7    + 109.5 
 
The increase in net capex and investments in Q1 2019 was mainly driven by 
the acquisition of Marella Explorer 2 and the acquisitions of the online 
platform Musement as well as further companies from Hotelbeds, and the 
phasing of capital expenditure previously expected in FY18. The decline in 
divestments resulted from the sale of three Riu hotels in the prior year. 
 
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, which account for over 90 % of our Group currency and fuel 
exposure. 
 
Foreign Exchange / Fuel 
%           Winter 2018 / 19 Summer 2019 
Euro        98               86 
US Dollars  93               82 
Jet Fuel    92               89 
 
As at 7 February 2019 
 
Financial position 
 
Financial position of the TUI Group as at 31 Dec 2018 
EUR million       31 Dec 2018    30 Sep 2018     1 Oct 2017 
                                 adjusted*       adjusted* 
Assets 
Goodwill          2,958.7        2,911.4         2,889.5 
Other intangible  638.6          631.6           548.1 
assets 
Property, plant   5,113.5        4,899.2         4,253.7 
and equipment 
Investments in    1,403.3        1,402.3         1,284.1 
joint ventures 
and associates 
Trade receivables 333.2          287.7           211.8 
and other assets 
Touristic         176.5          157.3           185.2 
payments on 
account 
Derivative        30.2           83.2            79.9 
financial 
instruments 
Financial assets  75.0           54.3            69.5 
available for 
sale 
Income tax assets 9.7            9.6             - 
Deferred tax      250.3          228.0           326.0 
assets 
Non-current       10,989.0       10,664.6        9,847.8 
assets 
Inventories       129.9          118.5           110.2 
Trade receivables 967.1          981.9           794.5 
and other assets 
Touristic         825.6          731.3           583.9 
payments on 
account 
Derivative        316.5          441.8           215.4 
financial 
instruments 
Income tax assets 152.7          113.8           98.7 
Cash and cash     919.7          2,548.0         2,516.1 
equivalents 
Assets held for   -              5.5             9.6 
sale 
Current assets    3,311.5        4,940.8         4,328.4 
Total assets      14,300.5       15,605.4        14,176.2 
 
* Prior-year figures adjusted due to retrospective application of IFRS 15 
and PPA adjustment for Destination Management 
 
Financial position of the TUI Group as at 31 Dec 2018 
EUR million          31 Dec 2018   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     - 2,523.9     - 2,058.2      - 2,798.3 
Equity before        3,179.5       3,645.2        2,898.3 
non-controlling 
interest 
Non-controlling      667.0         635.5          594.0 
interest 
Equity               3,846.5       4,280.7        3,492.3 
Pension provisions   988.5         962.2          1,094.7 
and similar 
obligations 
Other provisions     764.5         768.1          801.4 
Non-current          1,753.0       1,730.3        1,896.1 
provisions 
Financial            2,415.1       2,250.7        1,761.2 
liabilities 
Derivative financial 71.4          12.8           50.4 
instruments 
Income tax           69.7          108.8          150.2 
liabilities 
Deferred tax         85.9          197.4          106.4 
liabilities 
Other liabilities    106.4         103.4          150.2 
Non-current          2,748.5       2,673.1        2,218.4 
liabilities 
Non-current          4,501.5       4,403.4        4,114.5 
provisions and 
liabilities 
Pension provisions   31.7          32.6           32.7 
and similar 
obligations 
Other provisions     343.7         348.3          349.9 
Current provisions   375.4         380.9          382.6 
Financial            346.4         192.2          171.9 
liabilities 
Trade payables       1,761.3       2,697.1        2,434.0 
Touristic advance    2,601.8       2,824.8        2,700.4 
payments received 
Derivative financial 149.9         65.7           217.2 
instruments 
Income tax           126.8         86.2           65.3 
liabilities 
Other liabilities    590.9         674.4          598.0 
Current liabilities  5,577.1       6,540.4        6,186.8 
Current provisions   5,952.5       6,921.3        6,569.4 
and liabilities 
Total provisions and 14,300.5      15,605.4       14,176.2 
liabilities 
 
* Prior-year figures adjusted due to retrospective application of IFRS 15 
and PPA adjustment for Destination Management 
 
Income statement 
 
Income statement of the TUI Group 
for the period from 1 Oct 2018 to 31 Dec 2018 
EUR million                       Q1 2019   Q1 2018    Var. % 
                                            adjusted* 
Turnover                          3,704.8   3,548.9    4.4 
Cost of sales                     3,560.4   3,364.8    5.8 
Gross profit                      144.4     184.1      - 21.6 
Administrative expenses           320.8     306.8      4.6 
Other income                      5.5       45.7       - 88.0 
Other expenses                    1.3       0.3        333.3 
Impairment of financial assets    - 4.4     24.9       n. a. 
Financial income                  48.0      14.2       238.0 
Financial expenses                49.6      37.1       33.7 
Share of result of joint ventures 34.4      40.8       - 15.7 
and associates 
Earnings before income taxes      - 135.0   - 84.3     - 60.1 
Income taxes                      - 23.1    - 16.0     - 44.4 
Result from continuing operations - 111.9   - 68.3     - 63.8 
Group loss for the year           - 111.9   - 68.3     - 63.8 
Group loss for the year           - 139.1   - 109.2    - 27.4 
attributable to shareholders of 
TUI AG 
Group profit for the year         27.2      40.9       - 33.5 
attributable to non-controlling 
interest 
 
* Prior-year figures adjusted due to restrospective application of IFRS 15 
and previous year's structure was adjusted due to the first-time application 
of IFRS 9 
 
Cash flow statement 
 
Condensed cash flow statement of the TUI Group 
EUR million                                  Q1 2019   Q1 2018 
Cash outflow from operating activities       - 1,580.2 - 1,320.4 
Cash outflow from investing activities       - 284.7   - 140.7 
Cash outflow / inflow from financing         232.2     - 48.8 
activities 
Net change in cash and cash equivalents      - 1,632.7 - 1,509.9 
Change in cash and cash equivalents due to   4.4       - 9.0 
exchange rate fluctuation 
Cash and cash equivalents at beginning of    2,548.0   2,516.1 
period 
Cash and cash equivalents at end of period   919.7     997.2 
 
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 the reconciliation of earnings before tax to 
underlying earnings. 
 
Reconciliation to underlying EBITA 
EUR million                       Q1 2019   Q1 2018    Var. % 
                                            adjusted* 
Earnings before income taxes*     - 135.0   - 84.3     - 60.1 
plus: Net interest expense        27.5      25.6       7.4 
plus: Expense from the            1.9       1.8        5.6 
measurement of interest hedges 
EBITA*                            - 105.6   - 56.9     - 85.6 
Adjustments: 
plus: Restructuring expense       1.5       9.1 
plus: Expense from purchase price 8.3       7.6 
allocation 
plus: Expense from other one-off  12.2      3.5 
items 
Underlying EBITA*                 - 83.6    - 36.7     - 127.8 
 
* Prior-year figures adjusted due to restrospective 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 Q1 2019, adjustments (including individual items and purchase price 
allocations) totaling EUR 22.0 m (previous year: EUR 20.2 m) were made. The 
individual items adjusted in the quarter under review mainly relate to 
one-off payments in connection with the conversion of the pension plan in 
the United Kingdom to a defined contribution plan. In the prior-year 
quarter, in addition to expenses from purchase price allocations, 
restructuring costs for the integration of Transat in France in particular 
had to be adjusted. 
 
The TUI Group's operating loss adjusted for special items increased by EUR 
46.9 m to EUR 83.6 m in Q1 2019. 
 
Key figures of income statement 
EUR million                           Q1 2019  Q1 2018  Var. % 
                                               adjusted 
Earnings before interest, income      189.6    214.4    - 11.6 
taxes, depreciation, impairment and 
rent (EBITDAR) 
Operating rental expenses             177.7    170.7    + 4.1 
Earnings before interest, income      11.9     43.6     - 72.7 
taxes, depreciation and impairment 
(EBITDA) 
Depreciation / amortisation less      117.5    100.5    + 16.9 
reversals of depreciation* 
Earnings before interest, income      - 105.6  - 56.9   - 85.6 
taxes and impairment of goodwill 
(EBITA) 
Earnings before interest and income   - 105.6  - 56.9   - 85.6 
taxes (EBIT) 
Expense from the measurement of       1.9      1.8      + 5.6 
interest hedges 
Net interest expense                  27.5     25.6     + 7.4 
Earnings before income taxes (EBT)    - 135.0  - 84.3   - 60.1 
 
* On property, plant and equipment, intangible assets, financial and other 
assets 
 
Other segment indicators 
 
Underlying EBITDA 
EUR million             Q1 2019  Q1 2018  Var. % 
                                 adjusted 
Hotels & Resorts        94.3     114.4    - 17.6 
Cruises                 66.7     57.3     + 16.4 
Destination Experiences - 0.9    - 1.4    + 35.7 
Holiday Experiences     160.1    170.3    - 6.0 
Northern Region         - 61.6   - 28.9   - 113.1 
Central Region          - 31.9   - 50.0   + 36.2 
Western Region          - 61.7   - 44.5   - 38.7 
Markets & Airlines      - 155.2  - 123.4  - 25.8 
All other segments      21.9     10.6     + 106.6 
TUI Group               26.8     57.5     - 53.4 
 
EBITDA 
EUR million             Q1 2019  Q1 2018  Var. % 
                                 adjusted 
Hotels & Resorts        94.2     114.4    - 17.7 
Cruises                 66.7     57.3     + 16.4 
Destination Experiences - 3.0    - 1.8    - 66.7 
Holiday Experiences     157.9    169.9    - 7.1 
Northern Region         - 75.4   - 30.3   - 148.8 
Central Region          - 33.1   - 52.0   + 36.3 
Western Region          - 62.3   - 53.3   - 16.9 
Markets & Airlines      - 170.8  - 135.6  - 26.0 
All other segments      24.8     9.3      + 166.7 
TUI Group               11.9     43.6     - 72.7 
 
Employees 
                        31 Dec 2018 31 Dec 2017 Var. % 
                                    adjusted 
Hotels & Resorts        18,787      18,121      + 3.7 
Cruises*                340         312         + 9.0 
Destination Experiences 9,050       3,598       + 151.5 
Holiday Experiences     28,177      22,031      + 27.9 
Northern Region         12,365      13,282      - 6.9 
Central Region          10,684      10,293      + 3.8 
Western Region          6,142       5,950       + 3.2 
Markets & Airlines      29,191      29,525      - 1.1 
All other segments      3,471       3,505       - 1.0 
TUI Group               60,839      55,061      + 10.5 
 
* 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. 
 
Financial calendar 
 
12 February 2019 
 
Annual General Meeting 2019 
 
15 May 2019 
 
Half-year Financial Report 2019 
 
August 2019 
 
Quarterly Statement Q3 2019 
 
September 2019 
 
Pre-close trading update 
 
December 2019 
 
Annual Report 2019 
 
PUBLISHED BY 
 
TUI AG 
 
Karl-Wiechert-Allee 4 
 
30625 Hanover, Germany 
 
Tel.: + 49 (0)511 566-00 
 
Fax: + 49 (0)511 566-1901 
 
www.tuigroup.com 
 
concept and Design 
 
3st kommunikation, Mainz, Germany 
 
Photography 
 
Cover: Hapag-Lloyd Cruises 
 
The English and a German version of this 
Quarterly Statement are available on the web: 
www.tuigroup.com/en-en/investors 
 
Published on 12 February 2019 
 
ISIN:          DE000TUAG000 
Category Code: QRF 
TIDM:          TUI 
LEI Code:      529900SL2WSPV293B552 
Sequence No.:  7453 
EQS News ID:   774747 
 
End of Announcement EQS News Service 
 
 

(END) Dow Jones Newswires

February 12, 2019 01:00 ET (06:00 GMT)

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