Trading Statement
26 Settembre 2007 - 9:03AM
UK Regulatory
RNS Number:4952E
TUI Travel PLC
26 September 2007
26 September 2007
TUI Travel PLC
Trading Update
Following the successful completion of the merger of the tourism businesses of
TUI AG and First Choice Holidays PLC to form TUI Travel PLC, we are pleased to
provide an update on current trading, acquisitions and business integration
ahead of the start of our first full financial year for the 12 months ended 30
September 2008.
Current Trading
Since the trading numbers announced on the 9th August consumer demand across the
TUI Travel businesses for Summer 2007 has remained strong. Forward bookings for
Winter 2007/08 and early bookings for Summer 2008 are also very positive.
Summer 2007
After a relatively weak start to the Summer 2007 season, demand has picked up
across all source markets and the Group has continued to trade in line with the
Board's expectations.
Current Trading (1)
Summer 07
y-o-y variation% Sales Customers Capacity
MAINSTREAM
Northern Europe
First Choice
Short-haul -2 flat -5
Medium-haul +3 +1 flat
Long-haul +27 +22 +25
First Choice -Total +6 +3 flat
TUI - UK
Short-haul -5 +3 +3
Medium-haul -1 -1 -4
Long-haul -19 -30 -30
TUI UK - Total -4 flat -1
TUI - Nordic +6 +3 +2
TUI Northern Europe - Total -1 +1 flat
Central Europe
TUI - Germany +6 +10 -
TUI - Austria -2 -4 -
TUI - Switzerland +22 +14 -
TUI Central Europe - Total +6 +9 +10
Western Europe
TUI - France +2 -4 -
TUI - Belgium +10 +10 -
TUI - Netherlands +14 +9 -
TUI Western Europe - total +8 +5 +7
SPECIALIST (2) +16 +16
ACTIVITY (2) +3 n/a
ONLINE DESTINATION SERVICES
Sales Bednights
Online Destination Services (3) +40 +24
Laterooms.com +53 +50
(1) These statistics are up to 23 September 2007
(2) These statistics exclude FY2006 and FY2007 acquisitions
(3) These statistics are for the online businesses only
MAINSTREAM SECTOR
Northern Europe (UK & Ireland and Nordic)
In the UK Mainstream business the First Choice brand, as anticipated, has
performed particularly well with sales up 6% on flat capacity. This has been
particularly driven by a strong long-haul offering and a recovery in medium-haul
compared to last year. In the Thomson business sales are down 4% on lower
capacity. This is primarily a result of remixing volume by reducing capacity in
the package holiday segment and increasing participation in the component led
independent travel segment. Whilst tightening the package holiday capacity in
Thomson has led to good margin performance in the Summer, overall margins across
the TUI Travel UK & Ireland businesses continue to be adversely impacted by
higher APD taxes and the year on year increase in fuel costs.
The Nordic businesses which make up the rest of the Northern Europe Sector have
had a strong Summer.
Central Europe (Germany, Switzerland and Austria)
In the German source market, although consumer demand has been strong with
bookings up 10%, there has been a considerable increase in capacity leading to
weaker selling prices, lower load factors and margin pressure. In addition, the
German business has suffered as a result of third party tour operators returning
capacity. For Summer 2008 capacity will be reduced to 48 aircraft from the
current fleet of 55.
The other central European source markets have performed in line with our
expectations.
Western Europe (France, Belgium and The Netherlands)
We are pleased with the performance in Western Europe where the Belgian and
Dutch markets have performed very well with revenues up 10% and 14%
respectively. The French business has also recovered strongly from a difficult
Summer last year and will significantly reduce its loss for the year compared to
2006. All these businesses have seen margins improve year-on-year.
SPECIALIST SECTORS (Specialist, Activity and Online Destination Services)
The First Choice specialist businesses have continued their strong performance
throughout the summer. On a like-for-like basis sales are up 16% in Specialist,
3% in Activity and 40% in Online Destination Services. Margins have improved
across these businesses.
Winter 07/08
All businesses that have Winter programmes on sale are currently performing well
for the Winter season. Capacity has been tightened across a number of source
markets and margins are currently ahead of last year. We are further sold in
the UK by 5 percentage points compared to this time last year.
Current Trading (1)
Winter 07/08
y-o-y variation% Sales Customers Capacity
MAINSTREAM
Northern Europe
First Choice
Short-haul +1 -3 -22
Medium-haul +29 +24 -10
Long-haul +27 +23 +2
Total First Choice +25 +20 -10
TUI - UK
Short-haul -10 -18 -20
Medium-haul +24 +20 -3
Long-haul -5 -13 -4
TUI UK - total +3 -2 -10
TUI - Nordic +23 +21 +14
TUI Northern Europe - total +10 +4 -4
Central Europe
TUI - Germany +9 +9 -
TUI - Austria +1 +6 -
TUI - Switzerland +31 +30 -
TUI Central Europe - total +10 +10 +10
Western Europe
TUI - France +4 -6 -
TUI - Belgium +17 +23 -
TUI - Netherlands +28 +15 -
TUI Western Europe +8 +6 +1
SPECIALIST (2) +8 +15
ACTIVITY (2) +11 n/a
(1) These statistics are up to 23 September 2007
(2) These statistics exclude FY2006 and FY2007 acquisitions
(3) ODS and Laterooms.com - Winter season is not significantly sold at this point in time
Summer 08
For Summer 2008, the UK & Ireland Mainstream business is the only programme that
has been on sale for any reasonable time period and we are seeing the benefit of
having the two strongest tour operating businesses. Currently, First Choice
sales are 26% ahead on customer bookings that are up 24%. The programme is 3
percentage points further sold than at the same point last year and long-haul is
selling particularly well. In Thomson sales are 2% ahead on capacity that has
been reduced by 8%. Margins overall in the TUI Travel UK & Ireland business are
slightly ahead of last year.
Acquisitions
Over the summer period we have completed nine acquisitions within niche
specialist segments of the leisure travel market for a maximum consideration of
#81.7m. An initial consideration of #52.2m has been paid with a further amount
of up to #29.5m that could be paid as deferred and contingent consideration. For
the eleven months ended 30 September 2007, we have made sixteen acquisitions for
a maximum consideration of #227.5m with an initial consideration of #159.0m.
In addition, as recently announced, we have divested of Budget Travel, one of
the Group's Irish businesses to Primera Travel Group, a privately owned
Icelandic travel company. Completion of the sale is subject to approval from the
EU Competition authority.
We have acquired businesses within the online, activity, premium escorted tours
and student travel segments of the market:
* Within Online Destination Services, we have strengthened our position
further in the Asia Pacific region by agreeing to acquire asiarooms.com, a
leading online B2C provider of hotel accommodation in Asia. Asiarooms.com has
established itself as a significant online retailer of accommodation by applying
leading edge technology and web capabilities in one of the fastest growing
travel markets. Its main source markets are the USA, UK, Singapore and Australia
serving key destinations of Thailand, Singapore, Japan and Hong Kong. In the
current year, the business is on track to sell nearly 4m bed nights. This
acquisition adds to our growing position in the Asia Pacific region and online
accommodation market where we continue to see excellent growth and margin
opportunities for the Group going forward.
* In the Activity Holidays Sector, we have acquired four companies.
Within the premium North American escorted tours segment, we acquired Starquest,
an operator of themed luxury travel adventures by private jet. Along with our
existing business, TCS (acquired as part of the Grand Expeditions acquisition in
December 2005), we are now the clear market leader within this high-growth
segment of the US travel market. As previously announced, we acquired Hannibal
Travel Group which is a leading premium escorted tours operator serving the
Danish 'baby boomer' and 'young professional' demographic. It also compliments
our existing Danish activity operation. In addition, we have added to our
Schools and Adventure Travel Group within the Adventure division with the
acquisition of Ski Alpine, which is a provider of group ski trips to UK
university students. Finally, we have entered the sports tour market with the
acquisition of Australian Sports Tours which offers fully guided tours and
independent travel packages through B2B and B2C distribution channels for major
sporting events. Operating at double-digit margins and within a fast growing
area of the marketplace, we are looking to develop our participation within this
niche segment.
* Within North American Student Travel, we have added to our two
acquisitions in the first half with the purchase of World Class Vacations and
New Horizons Tour and Travel. These acquisitions will maintain our position at
the forefront of the fragmented and high growth group performance segment of the
student travel marketplace in the US.
* Within the Mainstream Sector, we have acquired an online car broker
and an online independent package holiday review site. These businesses will
further enable us to meet the needs of the travel consumer for flexibility and
choice in their holiday decision making.
The acquisition pipeline remains strong as we continue to target travel
companies, notably within the Asia Pacific region, online, activity and North
American student travel segments, that exhibit excellent growth characteristics
and the ability to generate premium margins, high earnings growth and strong
cash flow.
Integration Process
The integration process has started very well. The UK and Ireland management
team has been announced and the two integration teams across the business are
now fully operational. We are increasingly confident that during the first 100
days strategic clarity will be reached on a number of key business issues and
that, over the stated three year period, we will deliver at least #100m in
synergy benefits.
Outlook
In line with previous statements by both First Choice and TUI AG and based on
the Summer 2007 trading numbers the TUI Travel Board is satisfied that these
businesses will meet their expectations in respect of their current financial
year ends. This is based on the continued trading progress made during Summer
2007 together with the benefits of the cost restructuring in the TUI Tourism
businesses that are coming through in the second half of 2007 particularly in
the 4th quarter.
Going forward, the first TUI Travel PLC year-end will be 30 September 2008.
Accordingly, for comparative purposes proforma financials for the 12 months
ended 30 September 2007 and 30 September 2006 are being produced. These will be
available for release in early December. In arriving at the September numbers,
adjustments will arise as we harmonise the October year-end of First Choice and
the December year-end of TUI Tourism.
Commenting on the trading update, Peter Long, Chief Executive, TUI Travel PLC
said:
"I am pleased with the way the peak summer season trading has progressed across
our businesses and the signs for future seasons' trading are very encouraging
particularly in the UK where we are benefiting from two strong franchises. Our
acquisition pipeline remains strong and I am delighted with the acquisitions we
have completed. Acquisitions remain a key priority for TUI Travel.
"The integration of the TUI Tourism and First Choice businesses has started and
as I have been visiting the TUI Tourism businesses over the past few weeks my
belief that we have an exceptional value creation opportunity by combining the
best of both businesses has been reinforced."
Future communication dates
The next communication dates for the company will be as follows:
8 November Trading update in conjunction with TUI AG's 3rd quarter results
Early December Proforma financials for the twelve months to 30 September 2007 and 2006
29 January Strategic update and Interim Management Statement
Enquiries
TUI Travel PLC
Paul Bowtell, Chief Financial Officer Tel: 01293 588 036
Andy Jones, Director Group Finance Tel: 01293 588 058
David Paterson, Head of Strategy & Investor Relations Tel: 01293 588 055
Lesley Allan, Corporate Communications Director Tel: 01293 588 944
Hudson Sandler
Jessica Rouleau Tel: 020 7796 4133
Michael Sandler
There will be an Analyst Conference Call at 0900 (BST) and the dial-in details
are as follow:
UK dial-in : 0800 6940 257
International dial-in : +44 (0) 1452 555 566
Conf ID 18392242
This information is provided by RNS
The company news service from the London Stock Exchange
END
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