RNS Number : 0497J
TUI Travel PLC
27 November 2008
27 November 2008
TUI Travel PLC
Preliminary results for the year ended 30 September 2008
Key Financials
Underlying results 1,2 Reported results1
�m 2008 2007 Change% 2008 2007
Pro forma Pro forma
Revenue 13,932 12,840 +9% 13,932 12,840
Operating profit / (loss) 398.0 260.5 +53% (184.1) 56.1
Profit / (loss) before tax 319.7 222.8 +43% (266.6) 18.4
Basic eps 20.4p 14.4p +42% (24.4)p 0.6p
Dividend per share 9.7p 8.4p +16% 9.7p 8.4p
1 Comparative information is presented on an unaudited pro forma basis for 12 months to 30 September 2007. As set out in note 1, the
statutory comparative period included in the financial statements is nine months to 30 September 2007 and includes the results of First
Choice only from 3 September 2007
2 Underlying operating profit and underlying profit before tax exclude separately disclosed items, amortisation of IFRS 3 intangibles,
goodwill impairment and taxation of results of the Group's joint ventures and associates and underlying profit before tax also excludes an
acquisition related put option within interest charge, refer to note 1
Highlights
* The Group has had an excellent year with underlying operating profit up 53% to �398.0m (2007: �260.5m)
- Mainstream sector: underlying operating profit up 91% to �277.4m (2007: �145.0m)
primarily due to strong turnarounds in the UK, Germany and France
- Specialist sectors: underlying operating profit up �14.3m to �133.0m (2007: �118.7m)
* Underlying operating margin up 90 basis points to 2.9% (2007: 2.0%)
* Underlying profit before tax improved by 43% to �319.7m (2007: �222.8m)
* Underlying earnings per share increased by 42% to 20.4p (2007: 14.4p)
* Final dividend of 6.9p per share, resulting in a 16% increase in full year dividend of 9.7p per share (2007:
8.4p)
* Integration progressing better than expected; synergy target upgraded by �25m to �175m and delivery
accelerated
* Acquisition of sixteen niche high-growth specialist businesses completed for �109m
* Current trading
- Winter 2008/09 trading is progressing well, with average selling prices up 10%, 9% and
11% in UK charter, Germany and France respectively and fewer holidays left to sell in
all key markets
- Encouraging early trading for Summer 2009, with UK charter average selling prices up
10%
Peter Long, Chief Executive Officer of TUI Travel PLC, commented:
''We are delighted that in our first year as a merged company we have achieved significantly improved profitability across the business.
The integration is progressing well and we are now targeting �175m of synergies, which is �25m higher than our previous target.
Our customers continue to regard their main holiday as an essential, not a luxury, which they are reluctant to forgo. More than ever,
they want to book their holidays with trustworthy brands that provide excellent value for money.
TUI Travel has a highly experienced management team and in combination with our flexible business model and the diversity of the Group's
activities, I believe that the actions we are taking to manage supply and accelerate the synergy benefits puts us in a strong position to
manage the current economic environment and continue to meet our expectations for 2009."
A presentation for analysts and investors will be held today at 9.30am (GMT) at RBS, 250 Bishopsgate, London EC2M 4AA. For details of
the webcast please visit www.tuitravelplc.com.
High resolution images are available for the media to view and download free of charge from www.vismedia.co.uk.
Enquiries:
TUI Travel PLC
Paul Bowtell, Chief Financial Officer Tel: 01293 645 713
Andy Jones, Director of Finance & Investor Relations Tel: 01293 645 795
David Paterson, Head of Strategy & Investor Relations Tel: 01293 645 795
Lesley Allan, Corporate Communications Director Tel: 01293 645 773
Hudson Sandler
Jessica Rouleau /Kate Hough Tel: 020 7796 4133
CURRENT TRADING, HEDGING, INTEGRATION AND OUTLOOK
Current Trading
Trading is in line with our most recent trading update that was released on 14 November 2008.
For all seasons currently on sale, we continue to focus on ensuring that we recover our input costs and achieve our margin targets by
leveraging the flexibility we have in our business model. Accordingly, in anticipation of a period of weaker demand, we have implemented
significant capacity reductions across our source markets. These reductions have enabled us to maintain and in certain markets (UK and
Central Europe) increase the average selling prices we are achieving compared to our trading update on 29 September 2008, reach the
necessary load factors and deliver our margin targets.
Winter 2008/09
Current Trading 1 Winter 2008/09
Risk Capacity3
y-o-y variation% ASP2 Sales2 Customers2 Capacity Left to sell4
MAINSTREAM
Northern Region
Short-haul +5 -9 -13 -16
Medium-haul +11 +3 -7 -8
Long-haul +6 -1 -7 -4
UK - Charter +10 flat -9 -9 -9
Nordic +3 -6 -9 -8 -8
Canada flat -1 -1 -4 -5
Northern Region - Total +8 -2 -9 -8 -8
Germany - Charter +4 flat -4
Germany - Scheduled +23 flat -19
Germany - Total +9 flat -8 -15
Austria +2 -13 -15 -10
Switzerland -4 -9 -5 -20
Poland +8 +41 +31 +24
Central Europe - Total +8 -1 -8 -15 -18
France +11 -6 -15 -8
Belgium +5 +2 -3 -6
Netherlands +1 -13 -14 -15
Western Europe - Total +7 -6 -12 -8 -1
SPECIALIST +11 +9 -2
ACTIVITY NA -6 NA
ODS +6 +14 +8
UK Scheduled - discontinued +39 -68 -77 -88 -97
1 These statistics are up to 16 November 2008
2 These statistics relate to all customers whether risk or non-risk
3 These statistics exclude non-risk lines of business - primarily in Western
and Central Europe (e.g. overland)
4 % change in number of holidays left to sell versus prior year
Summer 2009
In the UK, we are continuing to focus on managing our capacity in anticipation of a weaker earlier booking environment. Accordingly, we
have reduced capacity by 16% to ensure that we achieve strong average selling prices, meet load factor targets and consequently achieve our
margin targets. To date volumes have been 17% lower but average selling prices have remained strong and are up 10% versus prior year, which
is substantially greater than the expected cost inflation (of circa 6%) in this season. The total programme load factor is flat versus prior
year at 19% but as a result of the capacity reductions we have implemented there is already 14% less stock left to sell for the season.
Fuel/Foreign Exchange
We are largely hedged for all open seasons, providing us with certainty of cost to inform our pricing decisions. As a result of greater
cost inflation in the UK (due to the current weakness of Sterling against the Euro) and as the only source market on sale for the Summer
2009 programme, we are further hedged than in continental European source markets.
Whilst partially offset by the Dollar strength, the recent fall in fuel prices will lead to some benefit in the current financial year
in continental European source markets. However, we anticipate that the majority of the benefit of the lower oil prices will materialise in
the financial year ending 30 September 2010.
UK Hedged Position
Winter 2008/09 Summer 2009
Fuel 96% 95%
FX Euro 96% 95%
FX USD 99% 94%
As at 21 November 2008
Group Hedged Position
Winter 2008/09 Summer 2009
Fuel 90% 83%
FX Euro 97% 95%
FX USD 90% 85%
As at 21 November 2008
Integration
Progress has been excellent to date. As a result we are upgrading the synergy target from �150m to �175m per annum and have accelerated
the delivery timetable. The additional �25m synergy benefit will be achieved primarily through additional benefits of �15m arising from the
UK integration, particularly in the airline as a result of further efficiencies in network planning. In addition, the Group and Global
target has been upgraded by �10m to �35m, due to further opportunities identified in the integration of a number of specialist businesses in
the UK that require turnaround and our offline incoming agencies in the ODS sector.
Accordingly, we have exceeded our 2008 target by �10m, with �35m of benefits delivered in the year. We ended the financial year with an
exit run-rate of �70m, meaning that the majority of our 2009 target of �100m is already achieved.
Synergy phasing
�m FY08 FY09 FY10
P&L benefit 35 100 160
Incremental P&L benefit +35 +65 +60
Exit rate 70 140 175
As a result of the additional synergy opportunities identified and the acceleration of synergy delivery, the one-off integration costs
are now expected to total �230m, (from �180m). Expected capital expenditure to support the integration is expected to be at �28m (from
�25m). Integration costs of �164m have been incurred in 2008, with the remainder to be incurred in 2009.
Integration cost
�m FY08 FY09 FY10 Total
P&L cost 164 66 - 230
Capex cost 15 13 - 28
In the financial year, we achieved a number of key milestones relating to the integration project, including:
UK Mainstream
- Integration of our UK airlines, which are now operating as a single entity,
under a single operating licence, as Thomson Airways;
- Launch of a combined reservation platform for Summer 2009 in the UK, which
will enable us to optimise our yield management capability;
- Integration and relocation of UK airline and tour operating support
functions to our new UK head office in Luton;
- Consolidation of our UK Mainstream call centres and customer service
operations; and
- Virtual Call Centre rollout across the First Choice retail network, which
will enable us to recreate the customer service benefits and cost
efficiencies experienced when this was implemented in the Thomson retail
estate.
Group & Global
- Migration of our UK Specialist brands onto a single reservation platform and
consolidation of call centre operations;
- Migration of our ski businesses on to one reservation platform and
consolidation of a number of UK Activity businesses into a single head
office infrastructure;
- Successful launch of Marmara products through Nouvelles Frontieres
distribution channels;
- Savings in insurance purchasing and cash management charges delivered; and
- Combination of offline incoming agency services in a number of key
destinations within our ODS sector.
TUI AG
On 12 October 2008 TUI AG (TUI Travel's majority shareholder) announced the disposal of its shipping business, Hapag-Lloyd AG, and
indicated that the proceeds of the sale might be used to make an offer for the rest of TUI Travel's shares. TUI AG subsequently announced on
16 October that it had no current intention of making such an offer. Under the City Code on Takeovers and Mergers, it is precluded from
doing so for six months, except in certain situations.
As it may become necessary to consider an offer by TUI AG, the Board of TUI Travel will form a committee of independent directors to
consider the merits of an offer and any related matters. Sir Michael Hodgkinson, Deputy Chairman and Senior Independent Director of TUI
Travel will chair this committee.
Outlook
Despite a more challenging trading environment we are satisfied with our current position across all our source markets and businesses.
Within our Mainstream source markets, through a combination of reducing fixed capacity, third party flying (which is 30% of all tour
operator capacity) and uncommitted bed stock (which accounts for 80% of bed stock), we believe we can manage the current market conditions
and continue to improve the performance of the business.
We retain significant strength, diversity and flexibility in our business model through our hedging positions, capacity management,
brand leadership and management experience to be well positioned to outperform the market in 2009 and 2010.
BUSINESS AND FINANCIAL REVIEW
Group Performance
The Group delivered a �137m improvement in underlying operating profits to �398m in 2008, our first year as a fully merged business
(2007: �261m). This has primarily been achieved as a result of a strong performance in the UK driven by improved trading and the delivery of
synergies, a significant turnaround in France, further improvement in Nordics from strong winter trading and improved summer trading in
Germany and Austria. The Specialist sectors also contributed to the result through a combination of organic and acquisition led growth.
Group revenue for the year increased by 9% to �13,932 (2007: �12,840m) with currency movements accounting for 4% of the growth. As a
result of the stronger performance in the Mainstream sector, the Group increased its underlying operating margin by 90 basis points to 2.9%
(2007: 2.0%).
Year ended 30 September
Underlying results 2 Reported results Statutory results
�m 2008 20071 Change 2008 20071 2008 2007
Pro forma Pro forma
Revenue 13,932 12,840 +9% 13,932 12,840 13,932 7,975
Operating profit/(loss) 398.0 260.5 +53% (184.1) 56.1 (184.1) 161.9
Profit/(loss) before tax 319.7 222.8 +43% (266.6) 18.4 (266.6) 152.5
Basic earnings/(loss) per 20.4p 14.4p +42% (24.4)p 0.6p (24.4)p 6.4p
share (p)
1 Comparative information is presented on an unaudited pro forma basis for 12 months to 30 September 2007. As set out in note 1, the
statutory comparative period included in the financial statements is nine months to 30 September 2007 and includes the results of First
Choice only from 3 September 2007
2 The Group believes that underlying operating profit and underlying profit before tax provide additional guidance to the statutory
measures on the underlying performance of the business during the financial year. Underlying operating profit and underlying profit before
tax exclude separately disclosed items, amortisation of IFRS 3 intangibles, goodwill impairment and taxation of results of the Group's joint
ventures and associates and underlying profit before tax also excludes an acquisition related put option within interest charge, refer to
note 1
A reconciliation of underlying profit before tax to profit/(loss) before tax is as follows:
Year ended 30 September 2008 2007
�m �m
Underlying profit before tax 319.7 222.8
Separately disclosed items (380.7) (147.3)
Acquisition related put option cost within interest charge (4.2) -
Impairment of goodwill (111.7) (37.3)
Amortisation of IFRS 3 intangibles (86.9) (17.5)
Taxation on losses of joint ventures and associates (2.8) (2.3)
Statutory (loss)/profit before tax (266.6) 18.4
The separately disclosed items of �380.7m (2007: �147.3m) include:
- Restructuring expenses of �65.3m, which relate to restructuring programmes
already in progress prior to the merger, the integration of acquired
businesses and further restructuring activities to increase business
efficiency.
- Merger related integration costs of �164.3m, which relate to the integration
programmes across the UK Mainstream and Group and Global businesses affected
by the merger.
- Aircraft related costs of �151.1m, which are primarily attributable to the
loss on disposal of 19 aircraft included in the June sale and leaseback
transaction.
Further information on the separately disclosed items is included in note 3 of the financial statements. As a result of its
reclassification as a disposal group held for sale earlier in the year, a goodwill impairment of �111.7m was recognised in respect of
TUIfly, our airline in the German source market. TUIfly has since been declassified as a disposal group held for sale. Amortisation of
business combination intangibles arising on the merger amounted to �80.0m and is included within the 2008 total charge of �86.9m.
Segmental Performance
Segmental performance presented here is based on underlying financial information (which excludes separately disclosed items, impairment
of goodwill and amortisation of business combination intangibles). The Group believes that underlying financial information provides
additional guidance to the statutory measures on the underlying performance of the business during the financial year. Segmental statutory
results are set out in note 2 of the financial statements.
All underlying financial information for the year ended 30 September 2007 in the segmental performance analysis is presented on the pro
forma basis set out in note 1 to the financial statements.
Mainstream Sector
The Mainstream sector reported an underlying operating profit of �277.4m in 2008, an improvement of �132.4m (2007: �145.0m).
Mainstream 2008 2007 Change %
Customers ('000)
Northern Region 8,570 9,075 -6%
Central Europe 11,232 11,518 -2%
Western Europe 5,745 5,635 +2%
Total 25,547 26,228 -3%
y-o-y variation
Revenue per customer Total
Northern Region +7%
Central Europe +13%
Western Europe +11%
Total +10%
Underlying operating profit (�m)
Northern Region 177.7 96.1 +85%
Central Europe 62.4 41.5 +50%
Western Europe 37.3 7.4 +404%
Total 277.4 145.0 +91%
Underlying operating margin %
Northern Region 4.1% 2.2% +190bps
Central Europe 1.3% 1.0% +30bps
Western Europe 1.4% 0.3% +110bps
Total 2.3% 1.3% +100bps
Controlled distribution %
Northern Region 1 73% 72% +1ppt
Central Europe 1 38% 37% +1ppt
Western Europe 49% 47% +2ppts
Total 53% 52% +1ppt
1 Excludes scheduled flying
Northern Region
The Northern Region achieved an 85% improvement in underlying operating profit to �177.7m (2007: �96.1m). As outlined in the table
below, the primary drivers behind the improvement in performance were margin enhancement in the UK and in the Nordics. In the UK, this
improvement resulted from the delivery of integration synergies and the reduction of loss making capacity.
Underlying operating profit bridge UK Nordics Canada Northern Region
2007 underlying operating profit 56.4 34.7 5.0 96.1
Scheduled flying losses 14.0 - - 14.0
Underlying margin enhancement 33.5 14.7 (9.6) 38.6
Synergies 29.0 - - 29.0
2008 underlying operating profit 132.9 49.4 (4.6) 177.7
Northern Region 2008 2007 Change %
Customers ('000)
UK and Ireland 6,978 7,564 -8%
Nordic 1,313 1,233 +6%
Canada 279 278 flat
Total 8,570 9,075 -6%
y-o-y variation
Revenue per customer Total
UK and Ireland +7%
Nordic +8%
Canada +9%
Total +7%
Revenue growth
UK and Ireland -2%
Nordic +14%
Canada +10%
Total +1%
Underlying operating profit/(loss) (�m)
UK and Ireland 132.9 56.4 +136%
Nordic 49.4 34.7 +42%
Canada (4.6) 5.0 -192%
Total 177.7 96.1 +85%
Underlying operating margin %
UK and Ireland 3.9% 1.6% +230bps
Nordic 6.5% 5.2% +130bps
Canada (2.6%) 3.1% -570bps
Total 4.1% 2.2% +190bps
Controlled distribution %
UK and Ireland 1 75% 74% +1ppt
Nordic 79% 73% +6ppts
Canada 16% 17% -1ppt
Total 1 73% 72% +1ppt
1 Excludes scheduled flying
UK and Ireland
UK and Ireland delivered a �76.5m improvement in underlying profits to �132.9m in 2008 (2007: �56.4m). This was driven by an improvement
in underlying margins, primarily due to tight capacity control, including the elimination of loss making routes, and the delivery of
integration synergies.
The business reduced loss making scheduled flying capacity by 22% in its Winter 2007/08 programme and by 43% in its Summer 2008
programme. As a result, in 2008 the business recovered �14m of losses incurred in the previous financial year and remains on track to fully
recover the remaining �13m losses over the next two financial years.
Capacity was also rationalised in the charter programme, mainly in the short haul destinations of the Balearics, mainland Spain and
Portugal and also in some medium haul destinations such as the Canaries and Greece. Total charter capacity was reduced by 5% in Winter
2007/08 and by 7% in Summer 2008. As a result of these capacity reductions, total customers decreased by 8% from 2007 to 2008, of which
there was a 26% reduction in scheduled flying customers and a 4% reduction in charter customers. This action supported a stronger pricing
environment in the lates booking period, in which previously there has been significant discounting of holidays. As a result of having
significantly less holidays left to sell across all departure months, stronger margins and improved load factors were achieved despite
higher fuel costs, leading to a �33.5m improvement in operating profit.
Integration in the UK continues to progress very well, with synergies of �29m delivered for the full year. Significant milestones have
been achieved during the year, including the launch of the UK Summer 2009 programme on one reservation platform, the integration of our UK
airlines, which operated under one license for Summer 2008, and the integration and relocation of airline and tour operating functions into
our new UK head office in Luton.
The business has continued to grow its level of controlled distribution, with a one percentage point increase to 75% in 2008 which was
primarily driven by an increase in our web sales following the re-launch of the First Choice website.
In addition to the integration process, the UK brands continued to focus on delivering differentiated product and high quality service.
During the year Thomson launched its Sensatori Hotel Concept with Sensatori Crete opening on 1 May 2008. The 5 Star concept includes West
End entertainment, premium dining options, swim-up rooms, an extensive Spa and first-rate childcare. First Choice opened three more Holiday
Villages in Cyprus, Algarve and Mexico, which focus on family facilities and activities.
Nordics
The Nordics business grew underlying operating profit by �14.7m to �49.4m in 2008 (2007: �34.7m). Revenue increased by 14% to �766m
(2007: �669m) and operating margin improved by 130 basis points to 6.5% (2007: 5.2%). This improvement was primarily driven by strong Winter
2007/08 trading due to the expansion of the long haul programme, where the deployment of an additional 747 aircraft from our French business
into its winter programme enabled the Nordics to fly direct to long haul destinations such as Thailand. As a result customer bookings to
Thailand were 39% higher in 2008 than the prior year. We continued to build on our position as a leading provider of long haul package trips
in the Nordic market by introducing a second B767 aircraft from the UK market into the winter programme, with new destinations such as Suart
Thani (Thailand), Phnom Penh (Cambodia) and Boa Vista (Cape Verde).
Additionally, the differentiated Blue Concept label was expanded to new customer segments during the year, including the successful
rollout of Blue Exotic, a family concept for the premium end of the market and built on high accommodation standards, local cuisine and
entertainment and the popular holiday children club 'Bamse'. More than one third of total customers now purchase Blue Concept products,
which has led to improved margins.
There was significant growth in controlled distribution, with bookings through our own channels reaching 79% for the year, up six
percentage points over the prior year. For the Summer 2008 programme 81% of products were sold through our websites or via our own shops.
This has also contributed to the improvement in operating profit and margins in 2008.
Canada
Canada reported an underlying operating loss of �4.6m in 2008 (2007: profit of �5.0m). This loss was primarily incurred as a result of
significant overcapacity in the market, which led to margin erosion. However, Signature, the tour operator, maintained a 12% market share
and the retail brand, SellOffVacations, was successfully restructured during the year. Canada remains an important countercyclical market to
the UK, operating nine aircraft through winter and one in the summer season. It also sells differentiated content developed in the UK, such
as the Holiday Villages in the Caribbean.
Central Europe
The Central Europe division reported an underlying operating profit of �62.4m in 2008 (2007: �41.5m). This improvement of �20.9m was
driven by strong summer trading in Germany and the successful turnaround of the Austrian business.
Central Europe 2008 2007 Change %
Customers ('000)
Germany 10,197 10,388 -2%
Switzerland 354 319 +11%
Austria 681 811 -16%
Total 11,232 11,518 -2%
y-o-y variation
Revenue per customer Total
Germany +15%
Switzerland -17%
Austria +21%
Total +13%
Revenue growth
Germany +12%
Switzerland -8%
Austria +2%
Total +11%
Underlying operating profit/(loss) (�m)
Germany 49.1 39.7 +24%
Switzerland 4.0 3.3 +21%
Austria 9.2 (1.5) +713%
Total 62.4 41.5 +50%
Underlying operating margin %
Germany 1.2% 1.1% +10bps
Switzerland 2.0% 1.5% +50bps
Austria 2.4% (0.4%) +280bps
Total 1.3% 1.0% +30bps
Controlled distribution %
Germany 1 39% 38% +1ppt
Switzerland 39% 37% +2ppts
Austria 19% 18% +1ppt
Total 1 38% 37% +1ppt
1 Excludes scheduled flying
Germany
Underlying operating profit for 2008 was �49.1m, an improvement of �9.4m over the prior year (2007: �39.7m). This was delivered by
strong summer trading, following the reduction of airline capacity by eight aircraft (10% of capacity) for the Summer 2008 programme. As a
result there was significantly less capacity to sell, particularly in the sun and beach lates markets, which resulted in higher load factors
and margin improvement, despite pressure from higher fuel costs.
During the year, demand for premium packaged products increased. Popular destinations included the Canaries, Balearics, Greece, Turkey
and Portugal. Differentiated product launches included the Sensimar hotel franchises in Crete, Rhodes and the Turkish Riviera for the 2009
summer season, TUI Maxima an exclusive Riverboat on the Danube and the TUI Snow Guarantee, which entitles customers in the event of no snow
to start their trip later or travel to a sun and beach destination.
The expansion of the Polish source market, which is included in the Germany result, has also contributed to strong growth, with revenue
and customer growth of 32% and 11%. Both our brands in the Polish market, TUI and Scan, performed well in the year. Winter 2007/08 volumes
to Egypt (which represents 25% of the winter programme) more than doubled, whilst in summer 2008 volumes to Greece (which represents 25% of
the summer programme) were 41% higher than in 2007.
Switzerland
Underlying operating profits improved by �0.7m (21%) to �4.0m in 2008 (2007: �3.3m). The introduction of the TUI Germany product model
into the Swiss mainstream market last year continued to yield strong customer demand in 2008, as the product is more competitively priced
than those of other competitors. As a result, customer volumes increased by 11% in 2008. In addition, the business improved profitability in
the year by growing controlled distribution two percentage points through its direct-selling brand Vogele thereby reducing commission costs.
The business also benefited from cost efficiencies implemented in the previous financial year.
Austria
Austria delivered a significant turnaround in 2008, achieving underlying operating profits of �9.2m compared to a loss of �1.5m in the
prior year. Operating margin improved by 280 basis points to 2.4% (2007: (0.4%)). This was primarily driven by improved capacity management
and the reduction in guaranteed bed stock which led to improved prices and margins. As a result, customer volumes decreased by 16% over
prior year, however revenue per customer was 21% ahead. In particular, significant capacity was cut in the Gullet brand following the
release of the exclusivity agreement to guarantee beds with Magic Life. Austria also delivered �2.5m of synergies in the year resulting from
the integration of First Choice's business into TUI Austria.
Western Europe
Western Europe achieved a strong improvement in underlying operating profits to �37.3m (2007: �7.4m), primarily driven by the turnaround
in the French business.
Western Europe 2008 2007 Change %
Customers ('000)
France 2,451 2,524 -3%
Netherlands 1,430 1,380 +4%
Belgium 1,864 1,731 +8%
Total 5,745 5,635 +2%
y-o-y variation
Revenue per customer Total
France +15%
Netherlands +5%
Belgium +12%
Total +11%
Revenue growth
France +11%
Netherlands +9%
Belgium +20%
Total +13%
Underlying operating profit / (loss) (�m)
France 4.8 (18.7) +126%
Netherlands 8.4 5.7 +47%
Belgium 24.1 20.4 +18%
Total 37.3 7.4 +404%
Underlying operating margin %
France 0.4% (1.6%) +200bps
Netherlands 1.2% 0.9% +30bps
Belgium 3.2% 3.2% flat
Total 1.4% 0.3% +110bps
Controlled distribution %
France 46% 47% -1ppt
Netherlands 55% 53% +2ppts
Belgium 49% 43% +6ppts
Total 49% 47% +2ppts
France
France reported underlying operating profits of �4.8m in 2008, a very strong improvement of �23.5m over the prior year (2007: loss of
�18.7m). This improvement was driven by the following:
* In Nouvelles Fronti?s ("NF"), the tour operator product offering was
rationalised to focus on profitable destinations. This resulted in
improved yield management and stronger pricing for both the Winter 2007/08
and Summer 2008 programmes. In Corsair, the fleet was reduced by one
aircraft thereby reducing operating costs. The scheduled flying programme
was also rationalised to combine tourist and expatriate customers and
focused on fewer destinations, mainly the French West Indies and Indian
Ocean.
* A recovery in customer demand in Q1 08 for one of Corsair's key
destinations, La Reunion. This destination was heavily impacted in Q1 07
by the outbreak of the Chikungunya disease.
* Strong summer demand in Marmara for the higher margin destinations of
Egypt and Turkey, leading to strong pricing increases.
* Synergy opportunities between NF and Marmara. These resulted in savings
of �1.0m delivered in the year from selling Marmara products through NF
shops and negotiating savings on seat rates for shared routes.
As a result of these actions the NF business successfully turned around its performance and delivered an operating profit in the year.
The final result was however adversely impacted by a charge of �6m for additional depreciation in respect of the six owned aircraft in
Corsair to reflect changes in the aircraft market and a charge of a further �6m in respect of seasonal hedges which did not satisfy hedge
accounting effectiveness tests. These charges are included in the overall operating result for France of �4.8m.
Netherlands
Netherlands reported an underlying operating profit of �8.4m in 2008 (2007: �5.7m). Revenue and customer growth were 9% and 4% ahead of
the prior year, with growth mainly in the destinations of Turkey and Egypt and the USA. First Choice Netherlands achieved strong growth via
the Kidsworld brand and successfully introduced Bulgaria, a new destination for 2008. During the year, the business absorbed costs of �4.0m
from a higher than normal level of aircraft incidents, which adversely affected the underlying profitability of the business. These issues
have all been resolved.
Belgium
2008 underlying operating profit was �24.1m, an improvement of �3.7m over prior year (2007: �20.4m). This was driven by revenue and
customer growth of 20% and 8%, respectively, with medium haul volumes up 22% over prior year as the business benefited from strong demand
for Turkey, Morocco and Egypt. Controlled distribution increased by six percentage points during the year (mainly through the web) and is
now at 49% of total bookings, leading to lower commissions and improved margins.
Specialist and Emerging Markets Sector
The Specialist and Emerging Markets sector reported underlying operating profits of �26.1m (2007: �29.9m). In the UK, the business was
adversely affected by distribution issues and significant disruption to the business caused by a change of location and systems, while
demand in the leisure segment of student travel in the US was weaker.
Europe
The Europe division reported underlying operating profits of �13.9m (2007: �18.7m), a decrease of �4.8m. A number of businesses within
the division are undergoing a restructuring programme to address the business model as a result of adverse performance in 2008. For example,
there was some loss of volumes in the Thomson businesses during the migration of the call centres and reservation systems that adversely
affected the distribution platform. However, significant progress has been made in the integration project, delivering �0.5m of synergy
benefits in 2008 with further benefits to come in 2009. In particular, the former Thomson businesses will benefit from increased control
over distribution that resulted from migration of these businesses to the reservations system used by the former First Choice.
US
The US division reported underlying operating profits of �12.3m in 2008, an improvement of �1.1m (2007: �11.2m). This was due to strong
growth in the expeditions businesses, in particular TCS Expeditions and Starquest Expeditions, which operate in the luxury private jet
segment. TCS increased customer volumes by 29% and doubled revenues in 2008, with demand particularly strong for its winter programme, which
was fully sold before the start of the season. Starquest was acquired in September 2007 and contributed �2.2m to the profitability of the
division in 2008.
However, the leisure segment of the Student Travel group of businesses suffered from a softening in demand for higher priced
international trips due to the weakening of the US economy. In addition, volumes decreased due to a change in customer buying habits, with
more students self-packaging and arranging group trips through social networks. Total leisure volumes decreased by 15% in 2008 compared to
the prior year. To address this change, actions have been taken to simplify the sales structure and rationalise the product portfolio. These
actions will enable the businesses to improve sales efficiency and focus on the core differentiated spring break offering. Europe Express,
which specialises in packaging holidays for US customers to Europe, also experienced a reduction in volumes of 10% as US consumer demand
fell due to the strengthening of the Euro against the Dollar and the weak US economy.
Emerging Markets
In Russia, we continue to evaluate our participation strategy for this high growth market and announced in April our intention to form a
joint venture relationship with S Group, to develop TUI Travel's Russian leisure tourism presence.
Specialist and Emerging Markets 2008 2007 Change %
Customers ('000)
Europe 634 703 -10%
US 339 297 +14%
Total 973 1,000 -3%
y-o-y variation
Revenue per customer Total
Europe +22%
US +4%
Total +16%
Specialist and Emerging Markets 2008 2007 Change %
Revenue growth
Europe +10%
US +19%
Total +12%
Underlying operating profit (�m)
Europe 13.9 18.7 -26%
US 12.3 11.2 +9%
Total 26.1 29.9 -13%
Underlying operating margin %
Total 3.2% 4.1% -90bps
Activity Sector
The Activity sector delivered a strong performance in 2008, with a 25% increase in underlying operating profits, which were up �9.9m to
�49.5m (2007: �39.6m). This was achieved through a combination of strong organic growth and acquisitions, principally in the Student and
Sport divisions, with organic growth up �5.0m for the sector.
The Marine division performed very well in 2008, reporting underlying operating profits of �18.3m (2007: �14.9m). Marine operates a
combined fleet of approximately 1,360 yachts, 1,100 cruisers and six beach clubs in the Caribbean and Mediterranean. The integration of the
two yacht chartering businesses of Sunsail and The Moorings has been successfully completed, and has delivered operational and back office
synergies in line with expectations. During the year the businesses also focused on improving asset utilisation and increased yacht
occupancy by 2% to 22.1 weeks of charter per yacht (2007: 21.7 weeks). Sunsail Clubs also achieved an increase in beach clubs occupancy
levels of six percentage points to 85% (2007: 79%). The flagship yacht base in Tortola, in the British Virgin Islands, is being
significantly upgraded to create the world's leading yacht charter facility using environmentally friendly technologies and will be
completed in 2009.
The Adventure businesses delivered an increase of 13% in underlying operating profits to �14.2m in 2008 (2007: �12.6m). The Polar
Cruising business significantly contributed to this growth as a result of the successful integration of Quark Expeditions (acquired in April
2007) with the existing polar cruising business. Polar cruising also experienced strong customer demand with overall occupancy rates
increasing to 91% (2007: 89%). During the year we also built up a market leading position in Australian overland tours based out of Western
Australia, through the acquisition of Planet Perth and Australian Pinnacle Tours in December 2007 and the integration of these businesses
with our existing operator Western Exposure.
The Ski, Student and Sport divisions increased underlying operating profits to �17.0m in 2008 (2007: �12.1m), despite a �2.0m reduction
in profitability in the Ski division. The businesses acquired during the year contributed significantly to this growth. Within Student, we
acquired CHS, Real Travel and World Challenge Expeditions. The Group first entered the Sport travel market in 2007, and through the 2008
acquisitions of Sportsworld, Gullivers Sport, Events International, Your Sporting Challenge and Fanatics, the Sport division has created a
unique portfolio of sports specialists tour operators in the UK and Australia. The Ski division remains the largest outbound ski and lakes
tour operator in Europe with approximately 40% market share.
Activity 2008 2007 Change %
y-o-y variation
Total revenue growth Total
Marine -9%
Adventure +25%
Ski, Student and Sport +28%
Total +18%
Underlying operating profit (�m)
Marine 18.3 14.9 +23%
Adventure 14.2 12.6 +13%
Ski, Student and Sport 17.0 12.1 +40%
Total 49.5 39.6 +25%
Underlying operating margin %
Total 6.3% 6.0% +30bps
Online Destination Services (ODS)
The ODS sector consists of three divisions. The B2B business is split geographically into two divisions, Hotelbeds and Portfolio
Incoming. The Hotelbeds division delivers accommodation services (online) and destination services (offline) through brands such as
Hotelbeds (services to tour operators), Bedsonline (services to travel agencies), Pacific World (the Meetings, Events, Incentives and
Conferences ("MICE") leader in Asia) and Intercruises (the world's largest provider of ground handling services to cruise lines). The
Portfolio Incoming division operates through a network of destination agencies worldwide and includes brands such as TUI Espana and TUI
Hellas.
The B2C division specialises in supplying online accommodation through its three businesses: Hotelopia, a well established brand in
Europe, LateRooms, a leading seller of late availability in the UK, and AsiaRooms, the highest traffic B2C accommodation business in Asia.
The ODS sector reported underlying operating profits of �57.4m, an improvement of 17% (2007: �49.2m), with all divisions contributing to
this growth.
Within the B2B businesses, the online accommodation businesses performed very well, with 23% growth in bednight volumes and a 6%
increase in revenue per bednight over the prior year. Hotelbeds and Bedsonline were both successful in increasing market share within its
mature source markets of Spain and the UK as well as further expanding into newer source markets such as Brazil, USA and Mexico. The offline
business also delivered profit growth, with an increase in passenger volumes of 3% to 3.9 million (2007: 3.8 million).
Within the B2C division, Hotelopia increased volumes by 16%, mainly due to strong growth in its European Cities products. However,
commission rates decreased in the more competitive mature markets of Spain and the UK as a result of greater competition from online
participants. In LateRooms.com like for like volumes in 2008 were 21% ahead of the prior year. LateRooms.com continued its strong growth as
a result of its differentiated late availability model and a highly effective online marketing campaign, and during the year LateRooms.es
was successfully launched into the Spanish source market.
The Portfolio Incoming division grew passenger volumes by 10%, with revenue per passenger remaining in line with 2007. The division
delivered profit growth in 2008 despite margin pressures in some of the more mature source markets such as Spain, where price competition
increased as the tour operators cut capacity.
The integration of the former TUI and First Choice businesses within the ODS sector is progressing well, and synergies of �2.0m were
delivered in 2008.
Online Destination Services 2008 2007 Change %
Online - Bednights ('000)
B2B 18,298 14,867 +23%
B2C 6,966 4,055 +72%
y-o-y
Online - Revenue per bednight variation
B2B +6%
B2C -5%
2008 2007 Change %
Offline - passenger volumes (m)
Portfolio Incoming division 9.0 8.2 +10%
Hotelbeds Offline 3.9 3.8 +3%
y-o-y
Offline - revenue per pax (�) variation
Portfolio Incoming division flat
Hotelbeds Offline flat
Underlying operating profit (�m)
Total 57.4 49.2 +17%
Underlying operating margin %
Total 11.4% 11.1% +30bps
Joint Ventures and Associates
The JV and Associates result incorporates our share in Island Cruises, in incoming agencies managed by the Portfolio Incoming division
within ODS, and in hotels managed by the UK and Nordics source markets. Underlying operating profits for the Group's joint ventures and
associates were �14.8m in 2008, an improvement of �2.0m (2007: �12.8m). This was primarily driven by the incoming agencies, where customer
volumes increased by 13% in 2008 due to strong demand in destinations within the Asia region from the UK, Nordics and US source markets.
Island Cruises reported underlying operating profits in 2008 which were �0.4m behind last year, as softer demand in the UK cruise market
resulted in the business being unable to pass on higher input costs to the customer. Post the year end, TUI UK & Ireland agreed to buy the
remaining 50% of its Joint Venture in Island Cruises from Royal Caribbean Cruises Ltd ("RCL") and take ownership in the Island Cruises
operation. The transaction is subject to regulatory clearance in Ireland. Under this transaction the Island Star ship will be returned to
RCL in April 2009 while the Island Escape will be retained by our business. TUI UK & Ireland also operates Thomson Cruises, which currently
operates a fleet of five ships. It is our intention to integrate the Island Escape into this established fleet.
Corporate Overheads
Corporate Overheads include the costs relating to the Group head office function, including headcount for departments such as Group
Finance, Group Legal and Group HR, premises costs and professional fees. Corporate Overheads were �27.2m in 2008, an increase of �11.2m over
the proforma 2007 overhead of �16.0m. We anticipate that ongoing Corporate Overheads will remain around the 2008 level. The higher overhead
is primarily due to the inclusion of overhead functions which supported the TUI Tourism businesses and which transferred across to TUI
Travel PLC as part of the merger. In addition, a number of central functions have expanded to meet ongoing statutory, compliance and
regulatory requirements of the new enlarged group since the merger of the former TUI and First Choice businesses, and as a result we have
incurred additional costs in 2008.
Acquisitions
In the year, the Group completed sixteen acquisitions within high growth niche segments of the leisure travel market, in line with its
strategy of making 'bolt-on' acquisitions of businesses with the ability to generate premium margins and high earnings growth. The sixteen
businesses were acquired for a total consideration of �108.6m. For comparison, in the year ended 30 September 2007, we made seventeen
acquisitions for a total consideration of �220.0m (although this included the acquisition of Laterooms for �97.2m).
Company Description Date Country
Activity Holiday Sector
CHS Tours School ski holidays Dec 07 UK/Austria
Australian Pinnacle Tours Escorted tours Dec 07 Australia
Active Safari (Planet Perth) Escorted tours Jan 08 Australia
Gullivers Sports Sports tours Feb 08 UK
Your Sporting Challenge Sports tours Mar 08 UK
Real Travel Gap year specialist Apr 08 UK
World Challenge High School Expeditions Apr 08 UK
Sportsworld Corporate Sports Tours May 08 UK
Fanfirm Sports tours Aug 08 Australia
Events International Sports tours Sep 08 UK
Specialist Holiday Sector
National Events Schools performance tours Nov 07 US
Travelmood Longhaul Australia specialist Jun 08 UK
Online Destination Services
Cruiselink Cruise handling services Nov 07 US
Destination Florida Cruise handling services Jan 08 US
Hotels London Online Bed bank Sept 08 UK
Western Europe
Societe Polynesienne Promotion Hotel Operator July 2008 French Polynesia
Hoteliere
TOTAL CONSIDERATION �108.6m
Acquisitions in the year are shown in the table above. Of the consideration, �74.3m was paid during the year. A further �30.2m will be
paid as deferred and contingent consideration and loan notes of �2.7m were issued. In addition, �1.4m of acquisition expenses were incurred,
bringing the total expected consideration to �108.6m.
Acquisitions in the year �m
Amounts paid in the year 74.3
Deferred & contingent consideration 30.2
Loan notes issued 2.7
107.2
Acquisition expenses paid in the year 1.4
Total consideration 108.6
The cash flow impact resulting from acquisitions includes the cash consideration paid for acquisitions in the year of �74.3m, deferred
and contingent consideration of �0.6m relating to acquisitions in the year, deferred and contingent consideration of �37.0m relating to
prior year acquisitions that was paid in the year, acquisition expenses of �1.4m, cash acquired of �23.0m, and cash paid relating to the
purchase of minority interests of �19.8m, resulting in a total net cash outflow for the year of �110.1m (2007: �135.2m).
Cash flow impact of acquisitions �m
Amounts paid in the year 74.3
Acquisition expenses 1.4
Cash acquired with acquisitions (23.0)
Cash paid relating to deferred and contingent consideration 37.6
Cash paid relating to the purchase of minority interests 19.8
Net cash outflow in the year relating to acquisitions 110.1
Taxation
Underlying profit before tax excluding JVs and associates for the year was �319.7m (2007: �222.8m). The tax charge on these profits was
�89.5m (2007: �62.4m) representing an effective tax rate of 28.0% (2007 unaudited proforma: 28.0%). Based on the current structure of the
business and existing local taxation rates and legislation, it is expected that the underlying tax rate, will remain at a level of around
28% going forward.
Reported loss before tax for the year was �266.6m (2007: profit �18.4m). The tax credit on this loss was �0.1m (2007: charge �11.5m)
representing an effective tax rate of nil (2007: 62.5%). This rate differs from the underlying effective tax rate due to the
non-deductibility for tax purposes of the goodwill impairment on TUIfly and certain separately disclosed items, as well as not recognising
deferred tax assets on certain losses due to uncertainty as to the timing of their utilisation.
The cash tax rate is expected to be lower than the income statement tax rate as we utilise our deferred tax assets. In the coming year,
we envisage a cash tax rate of approximately 17% of underlying profit before tax.
Earnings per share
Underlying basic earnings per share was 20.4p (2007 underlying pro forma: 14.4p), an improvement of 42%. Basic loss per share was
(24.4p) (2007 pro forma: earnings per share 0.6p; 2007 statutory: earnings per share 6.4p).
Dividends
The Board is recommending a final dividend of 6.9p per share. On 18 March 2008, the Board recommended an interim dividend of 2.8p per
share, making a full year dividend of 9.7p per share. This represents a payout ratio of 48%. The final dividend will be paid on 6 April 2009
to holders of relevant shares on the register at 13 March 2009.
The Group's policy is to maintain underlying dividend cover at around two times. We intend to continue to operate a dividend
re-investment plan as an alternative to receiving a cash dividend.
Cash and Liquidity
The net debt position (cash and cash equivalents less loans, overdrafts and finance leases) at the year end was �136.6m (2007: �237.4m).
This consisted of �1,129.8m of cash and �208.9m of current interest-bearing loans and liabilities and �1,057.5m of non-current
interest-bearing loans and liabilities. The net pensions deficit at the year end was �253.1m, (2007: �292.9m).
The reduction in net debt has arisen primarily due to cash generated from operating activities and the proceeds of sale and leaseback
transactions, partially offset by our acquisition programme. In June, the Group entered into a sale and leaseback transaction of 19 owned
aircraft for proceeds of $526m. This transaction enabled the group to further increase the flexibility of the business model while securing
access to modern and fuel-efficient aircraft such as the Boeing 737-800 NG. The disposal proceeds were used to pay down debt.
The Board remains satisfied with the Group's funding and liquidity position. Fixed charges cover and the ratio of net debt to EBITDA,
which we believe to be the most useful measures of cash generation and gearing, as well as being the main basis for covenants in our credit
facilities, were 2.04x and 0.2x respectively at the year end (2007: 2.07x and 0.5x respectively). Fixed charges cover is defined as earnings
before interest, tax, depreciation, amortisation and operating lease rentals charge (EBITDAR) divided by net interest plus operating lease
rentals. EBITDA is defined as earnings before interest, tax, depreciation and amortisation.
We have two main sources of debt funding, both of which have a number of years remaining before maturity - these include the shareholder
loan from TUI AG which is EUR1.0 billion and matures in January 2011, and our �770m revolving credit facility which matures in August 2012.
Accordingly, we remain satisfied with our facilities.
Accounting Policies
There have been no changes in accounting policies during this financial year. The Group continues to monitor the potential impact and
timing of changes to International Financial Reporting Standards.
Treasury Policies
The Board has established a framework to ensure that the Group has adequate policies, procedures and controls to successfully manage the
financial risks that it faces. These form part of the Company's Risk Management Framework.
The key financial risks faced by the Company are in relation to foreign currency, interest rate, fuel price and liquidity. Group
Treasury has implemented individual treasury policies to cover specific risks faced by each business unit. The procedures stipulate the
levels of authority applied to dealing and approve the financial instruments that may be used to manage these exposures. All significant
treasury transactions on behalf of the businesses are undertaken and executed by Group Treasury. Transactions are undertaken only to hedge
underlying exposures. Financial instruments are not traded, nor are speculative positions taken.
The relevant member of the Group Management Board has ultimate responsibility for treasury risks and Group Treasury conducts regular
reviews of financial risks with the business unit management teams. The Board regularly reviews the Group's exposure to financial risks.
Consolidated income statement
for the year ended 30 September 2008
Proforma 9-month
Year ended year ended period ended
30 September 30 September 30 September
2008 2007 2007
unaudited
Note �m �m �m
Revenue 2 13,931.8 12,839.9 7,975.4
Cost of sales (12,910.7) (11,800.4) (7,362.7)
Gross profit 1,021.1 1,039.5 612.7
Administrative expenses (1,217.2) (993.9) (457.7)
Share of profit of joint 12.0 10.5 6.9
ventures and associates
Operating (loss) / profit (184.1) 56.1 161.9
Analysed as:
Underlying operating profit 398.0 260.5 230.6
Separately disclosed items 3 (380.7) (147.3) (33.9)
Amortisation of business (86.9) (17.5) (10.0)
combination intangibles
Impairment of goodwill (111.7) (37.3) (22.9)
Taxation on profits of joint
ventures and associates (2.8) (2.3) (1.9)
(184.1) 56.1 161.9
Financial income 4 122.0 147.4 99.9
Financial expenses 4 (204.5) (185.1) (109.3)
Net financial expenses 4 (82.5) (37.7) (9.4)
(Loss) / profit before tax (266.6) 18.4 152.5
Taxation 6 0.1 (11.5) (79.5)
(Loss) / profit for the year / (266.5) 6.9 73.0
period
Attributable to:
Ordinary shareholders (270.7) 6.6 71.1
Minority interest 4.2 0.3 1.9
(Loss) / profit for the year / (266.5) 6.9 73.0
period
Pence Pence Pence
(Loss) / earnings per share
(pence) for result
attributable to the equity
holders of the company during
the year / period
- basic 9 (24.4) 0.6 6.4
- diluted 9 (24.4) 0.6 6.4
Non-GAAP measures
Reconciliation of underlying operating profit to underlying profit before tax
�m �m �m
Underlying operating profit 398.0 260.5 230.6
Net underlying financial expenses 4 (78.3) (37.7) (9.4)
Underlying profit before tax 319.7 222.8 221.2
Pence Pence Pence
Underlying earnings per share (pence) for profit
attributable to the equity holders of the company
during the year / period
- basic 9 20.4 14.4 11.4
- diluted 9 20.2 14.3 11.3
The proforma figures for the year ended 30 September 2007 are unaudited. The basis of preparation of these figures is set out in Note 1.
Consolidated balance sheet
At 30 September 2008
30 September 30 September
2008 2007
Note �m �m
Non-current assets
Intangible assets 4,428.7 4,216.9
Property, plant and equipment 926.2 1,317.5
Investments in joint ventures and 114.4 92.5
associates
Other investments 55.8 53.0
Trade and other receivables 210.3 231.9
Employee benefit asset 16.9 20.8
Derivative financial instruments 47.5 6.4
Deferred tax assets 205.2 167.8
6,005.0 6,106.8
Current assets
Inventories 51.2 39.7
Other investments held for sale 28.6 12.4
Trade and other receivables 1,653.5 1,377.9
Income tax recoverable 28.8 28.3
Derivative financial instruments 273.5 37.6
Cash and cash equivalents 8 1,129.8 1,958.7
Assets classified as held for sale 156.8 88.0
3,322.2 3,542.6
Total assets 9,327.2 9,649.4
Current liabilities
Interest-bearing loans and borrowings (208.9) (152.0)
Employee benefits (2.0) (2.9)
Derivative financial instruments (177.7) (137.1)
Trade and other payables (4,056.5) (3,554.6)
Provisions (203.2) (211.8)
Income tax payable (89.5) (73.8)
Liabilities classified as held for sale (22.4) (18.8)
(4,760.2) (4,151.0)
Non-current liabilities
Interest-bearing loans and borrowings (1,057.5) (2,044.1)
Derivative financial instruments (50.0) (25.5)
Employee benefits (268.0) (310.8)
Trade and other payables (148.3) (186.1)
Provisions (212.0) (117.3)
Deferred tax liabilities (234.8) (183.8)
(1,970.6) (2,867.6)
Total liabilities (6,730.8) (7,018.6)
Net assets 2,596.4 2,630.8
Equity
Share capital 111.8 111.8
Other reserves 2,741.9 2,428.7
Retained (deficit) / earnings (262.7) 82.9
Total equity attributable to equity
holders of the parent 2,591.0 2,623.4
Minority interest 5.4 7.4
Total equity 2,596.4 2,630.8
Consolidated statement of cash flows
For the year ended 30 September 2008
9-month
Year ended period ended
30 September 30 September
2008 2007
Note �m �m
(Loss) / profit for the year / period (266.5) 73.0
Adjustment for:
Depreciation and amortisation 330.9 134.8
Impairment of intangible assets and
property, plant and equipment 145.8 22.9
Equity-settled share-based payment 13.5 0.3
expenses
Loss on sale of property, plant and 71.4 12.3
equipment
Income from joint ventures and associates (12.0) (6.9)
Loss on foreign exchange 25.1 3.4
Dividends received from joint ventures and 9.4 -
associates
Financial income (122.0) (99.9)
Financial expense 204.5 109.3
Income tax (credit) / expense (0.1) 79.5
Acquisition of shares for share-based (7.1) (12.8)
payments
Operating profit before changes in working 392.9 315.9
capital and provisions
(Increase) / decrease in inventories (4.9) 1.2
Increase in trade and other receivables (234.8) (217.2)
Increase in trade and other payables 265.0 461.8
Increase / (decrease) in provisions and 41.8 (24.6)
employee benefits
Cash flows from operations 460.0 537.1
Interest paid (108.8) (54.4)
Interest received 53.3 50.1
Income taxes paid (33.5) (35.5)
Cash flows from operating activities 371.0 497.3
Investing activities
Proceeds from sale of property, plant and 347.2 17.8
equipment
Proceeds from disposal of subsidiaries net
of cash disposed of 2.5 -
Acquisition of subsidiaries, net of cash (90.3) (114.3)
acquired
Acquisition of minority shareholdings (19.8) (15.8)
Investment in joint ventures (9.5) -
Acquisition of property, plant and (277.4) (79.9)
equipment and software
Cash flows from investing activities (47.3) (192.2)
Financing activities
Share issue expenses - (23.3)
Proceeds from new loans and deposits taken 231.7 1,793.3
Repayment of borrowings (1,410.5) (603.5)
Payment of finance lease liabilities (25.6) (18.3)
Ordinary and minority interest dividends (69.9) (13.2)
paid
Pre-business combination financing cash - (699.6)
flows to TUI AG
Cash flows from financing activities (1,274.3) 435.4
Net (decrease) / increase in cash and cash 8 (950.6) 740.5
equivalents
Cash and cash equivalents at start of year 8 1,958.7 1,183.6
/ period
Effect of foreign exchange on cash held 8 121.7 34.6
Cash and cash equivalents at end of year / 8 1,129.8 1,958.7
period
Consolidated statement of recognised income and expense
for the year ended 30 September 2008
9-month
Year ended period ended
30 September 30 September
2008 2007
�m �m
Foreign exchange translation 180.4 44.4
Actuarial gains arising in respect of defined
benefit pension schemes 4.4 111.4
Cash flow hedges:
- movement in fair value 162.7 (22.5)
- amounts recycled to the income statement 37.1 25.8
Tax on items taken directly to equity (62.6) (30.7)
Net income recognised directly in equity 322.0 128.4
(Loss) / profit for the year / period (266.5) 73.0
Total recognised income for the year / period 55.5 201.4
Attributable to:
Ordinary shareholders 50.5 198.7
Minority interest 5.0 2.7
55.5 201.4
Notes to the consolidated financial statements
1. Basis of preparation
(A) Statutory accounts
The financial information set out above does not constitute the Group's statutory accounts for the year ended 30 September 2008.
Financial statements for the year to 30 September 2008 will be delivered to the registrar of companies in due course. KPMG Audit Plc has
reported on these accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 237(2) or (3) of the
Companies Act 1985.
Statutory consolidated accounts for the company were not required to be prepared or audited for the period ended 30 September 2007, as
that date was not an accounting reference date and the year ended 30 September 2008 comprises the first statutory consolidated accounts of
the company. Accordingly: auditors have not reported under Section 235 of the Companies Act 1985 for the period ended 30 September 2007; and
no group accounts will be delivered to the registrar of companies for that period.
The prior period statutory accounts for TUI Travel PLC (the Company) for its individual accounting period to 31 July 2007 have been
audited and delivered to the registrar of companies. PricewaterhouseCoopers LLP reported on these accounts; their report was (i)
unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying
their report and (iii) did not contain a statement under section 237(2) or (3) of the Companies Act 1985.
(B) Accounting policies
Other than set out below in respect of the comparative pro forma financial information for the year to 30 September 2007, the accounting
policies applied by the Group in its consolidated financial statements for the year ended 30 September 2008 are in accordance with
International Financial Reporting Standards as adopted by the European Union ('Adopted IFRSs'.) Other than noted below, these accounting
policies are the same as those applied by the Group in Part VII of its listing prospectus dated 29 June 2007. The Group's listing
prospectus, dated 29 June 2007, is available at www.tuitravelplc.com
The following interpretation issued by the International Financial Reporting Interpretations Committee (IFRIC) is effective for the
first time in the current financial year and has been adopted by the Group with no significant impact on its consolidated results or
financial position:
IFRIC 11 - Group and treasury share transactions
(C) Business combination
On 3 September 2007, the TUI Travel PLC Group was formed through a business combination of the tourism businesses of TUI AG (TUI
Tourism) with First Choice Holidays PLC (now First Choice Holidays Limited) (First Choice). The business combination was effected on 3
September 2007 by way of TUI Travel PLC, a subsidiary of TUI AG, acquiring both TUI Tourism and First Choice. On a consolidated basis, TUI
Tourism is considered to be the acquirer of First Choice. As a result of the business combination, First Choice's listing on the London
Stock Exchange was cancelled on that date and the ordinary shares of the new combined group, TUI Travel PLC, were admitted to the Official
List of the UK Listing Authority and to trading on the London Stock Exchange.
(D) Comparative financial information
The statutory comparative financial information presented in the income statement, cash flow statement and statement of recognised
income and expense represents the 9-month period from 1 January 2007 to 30 September 2007 for the TUI Tourism businesses and one month for
First Choice (from 3 September 2007). The Directors consider this to be the appropriate statutory comparative as it represents the previous
statutory reporting period of the TUI Tourism business. The subsequent acquisition and one month inclusion of First Choice and the
seasonality of the business of the Group as a whole will mean that this period is not directly comparable to the current year.
The unaudited pro forma income statement for the year ended 30 September 2007 has been prepared by the Directors of the Company on a pro
forma basis to illustrate the effect of the business combination as if it had taken place prior to 1 October 2006 (the first day of the pro
forma comparative accounting period presented). This is to provide information which the Directors consider is meaningful, but it is not
entirely comparable to the result for the year ended 30 September 2008 because it is an aggregation of financial information of TUI Tourism,
First Choice and the holding company, TUI Travel PLC and it does not reflect the acquisition accounting following the business combination
of First Choice. Specifically no adjustments have been made for the impact of acquisition accounting in accordance with IFRS 3 Business
Combinations; the assets and liabilities of First Choice have not been restated to their fair value; and no amortisation relating to the
First Choice business combination has been recognised. Also intra-group trading between TUI Tourism and First Choice has not been eliminated, as required by IAS 27: Consolidated and separate
financial statements. The unaudited pro forma financial information has been prepared for illustrative purposes only. It has not been
designed to and does not give a presentation of the income statement of the Group that would have been reported in accordance with Adopted
IFRSs had the First Choice business combination actually occurred before 1 October 2006.
(E) Funding and Liquidity
The Board remains satisfied with the Group's funding and liquidity position.
The two main sources of debt funding are the shareholder loan from TUI AG, which is EUR1.0 billion and matures in January 2011, and the
�770 million revolving credit facility which matures in August 2012.
The ratio of EBITDA to fixed charges (being the aggregate amount of interest and any other finance charges in respect of borrowings and
including all payments under operating leases) and the ratio of net debt to EBITDA, which the Board believes to be the most useful measures
of cash generation and gearing, as well as being the main basis for the Group's credit facility covenants, are currently well within the
covenant tests. Forecasts reviewed by the Board, including forecasts adjusted for significantly worse economic conditions, show continued
compliance with these covenants.
On the basis of its forecasts, both base case and adjusted as described above, and available facilities, the Board has concluded that
the going concern basis of preparation continues to be appropriate.
(F) Underlying measures of profit
The Group believes that underlying operating profit and underlying profit before tax provide additional guidance to statutory measures
on the underlying performance of the business during the financial years. The term underlying is not defined under International Financial
Reporting Standards. It is a measure that is used by management to assess the underlying performance of the business internally and is not
intended to be a substitute measure for Adopted IFRSs' GAAP measures. The Group defines these underlying measures as follows:
Underlying operating profit is profit before financial income and expenses, taxation (Group and share of joint ventures and associates),
separately disclosed items (see Note 3), amortisation of intangible assets acquired in business combinations and impairment of goodwill
Underlying profit before tax is profit before taxation (Group and share of joint ventures and associates), separately disclosed items,
amortisation of intangible assets acquired in business combinations, impairment of goodwill and financing expenses or income arising on the
revaluation of minority put option liabilities
Underlying earnings used in the calculation of underlying earnings per share is profit after tax excluding separately disclosed items,
amortisation of intangible assets acquired in business combinations, impairment of goodwill and financing expenses or income arising on the
revaluation of minority put option liabilities (net of related taxation)
It should be noted that the definitions of underlying items being used in these financial statements are those used by the Group and may
not be comparable with the term "underlying" as defined by other companies within both the same market sector or elsewhere.
Separately disclosed items are those items which are highlighted by virtue of their size or incidence to enable a full understanding of
the Group's financial performance. Details of separately disclosed items in the current and prior financial years are set out in Note 3.
2. Segmental Information
Segmental information is presented by the Group's business sectors. Segment results include items directly attributable to a segment as
well as those that can be allocated on a reasonable basis. Unallocated items include corporate costs and net financial expense.
Sector analysis
The Sector analysis is based on the Group's management and reporting structure.
Year ended 30 September 2008
Mainstream Holidays
Joint
Total Online Ventures
Mainstream Destination And
Central Northern Western Sector Specialist Activity Services Associates
Eliminations Total
Europe Region Europe Sector Sector
/ Corporate Group
�m �m �m �m �m �m �m �m
�m �m
Revenue
Total revenue 4,714.1 4,532.2 2,753.0 11,999.3 819.5 779.5 701.0 -
(367.5) 13,931.8
Inter segment revenue (12.3) (155.1) (0.5) (167.9) (0.2) - (199.4) -
367.5 -
External revenue
- continuing operations 4,701.8 4,377.1 2,752.5 11,831.4 807.8 705.4 495.0 -
- 13,839.6
- acquisitions - - - - 11.5 74.1 6.6 -
- 92.2
Total external revenue 4,701.8 4,377.1 2,752.5 11,831.4 819.3 779.5 501.6 -
- 13,931.8
Operating (loss) / profit (112.5) (104.2) 19.8 (196.9) 1.1 (4.4) 41.9 12.0
(37.8) (184.1)
Amortisation of business
combination intangibles 0.6 58.3 2.2 61.1 7.7 8.1 10.0 -
- 86.9
Separately disclosed items 62.6 223.6 15.3 301.5 17.3 45.8 5.5 -
10.6 380.7
Impairment of goodwill 111.7 - - 111.7 - - - -
- 111.7
Taxation on joint ventures and
associates - - - - - - - 2.8
- 2.8
Underlying operating profit /
(loss) 62.4 177.7 37.3 277.4 26.1 49.5 57.4 14.8
(27.2) 398.0
Analysed as:
- continuing operations 62.4 177.7 37.3 277.4 26.2 41.9 56.6 14.8
(27.2) 389.7
- acquisitions - - - - (0.1) 7.6 0.8 -
- 8.3
398.0
Net financing expenses excluding separately disclosed finance charge of �4.2m
(78.3)
Underlying profit before tax
319.7
Proforma year ended 30 September 2007
Mainstream Holidays
Joint
Total Online
Ventures
Mainstream Destination
And
Central Northern Western Sector Specialist Activity Services
Associates Eliminations Total
Europe Region Europe Sector Sector
/ Corporate Group
�m �m �m �m �m �m �m
�m �m �m
unaudited unaudited unaudited unaudited unaudited unaudited unaudited
unaudited unaudited unaudited
Total external revenue
4,253.6 4,317.4 2,439.6 11,010.6 729.6 658.4 441.3
- - 12,839.9
Operating (loss) / profit
13.5 (18.6) (19.3) (24.4) 9.1 18.8 36.1
10.5 6.0 56.1
Amortisation of business
combination intangibles
0.2 0.1 - 0.3 4.0 3.5 9.7
- - 17.5
Separately disclosed items
27.8 91.2 26.7 145.7 2.9 17.3 3.4
- (22.0) 147.3
Impairment of goodwill
- 23.4 - 23.4 13.9 - -
- - 37.3
Taxation on joint ventures and
associates
- - - - - - -
2.3 - 2.3
Underlying operating profit /
(loss)
41.5 96.1 7.4 145.0 29.9 39.6 49.2
12.8 (16.0) 260.5
260.5
Net financing expenses
(37.7)
Underlying profit before tax
222.8
9-month period ended 30 September 2007
Mainstream Holidays
Joint
Total Online Ventures
Mainstream Destination And
Central Northern Western Sector Specialist Activity Services Associates
Eliminations Total
Europe Region Europe Sector Sector
/ Corporate Group
�m �m �m �m �m �m �m �m
�m �m
Revenue
Total revenue 3,277.7 2,340.7 1,711.5 7,329.9 194.7 284.1 310.9 -
(144.2) 7,975.4
Inter segment revenue (4.3) (2.7) (13.3) (20.3) - - (123.9) -
144.2 -
Total external revenue 3,273.4 2,338.0 1,698.2 7,309.6 194.7 284.1 187.0 -
- 7,975.4
Operating profit 40.1 31.5 25.4 97.0 4.1 9.5 26.8 6.9
17.6 161.9
Amortisation of business
combination intangibles - 8.3 0.2 8.5 0.3 0.4 0.8 -
- 10.0
Separately disclosed items 14.5 40.3 5.4 60.2 0.2 0.1 1.1 -
(27.7) 33.9
Impairment of goodwill - 22.9 - 22.9 - - - -
- 22.9
Taxation on joint ventures and
associates - - - - - - - 1.9
- 1.9
Underlying operating profit /
(loss) 54.6 103.0 31.0 188.6 4.6 10.0 28.7 8.8
(10.1) 230.6
230.6
Net financing expenses
(9.4)
Underlying profit before tax
221.2
3. Separately disclosed items
Proforma 9-month
Year ended year ended period ended
30 September 30 September 30 September
2008 2007 2007
�m �m �m
unaudited
Restructuring expenses 65.3 126.1 21.1
Merger related integration costs 164.3 20.9 18.8
Aircraft 151.1 (10.7) (16.8)
Other - 11.0 10.8
Total 380.7 147.3 33.9
Restructuring expenses
These costs relate to restructuring programmes that were already underway pre-merger, and to the integration of acquired businesses and
further restructuring activities across all sectors.
Merger related integration costs
These relate primarily to the costs of integration of the UK businesses, combined with other one-time costs incurred as a result of the
merger.
Aircraft
These costs relate to the restructuring of the aircraft fleet. In the year ended 30 September 2008 they include sale and leaseback
losses of �101.7m, write-downs on aircraft held for sale of �23.4m, net financial derivative credits and foreign exchange losses of �5.5m,
and other costs of �20.5m. In the proforma comparative period, the costs include �13.9m to bring TUI UK's accounting policy for maintenance
provisions in line with TUI Travel PLC's accounting policy, combined with sale and leaseback credits of �26.5m and a cost of �1.9m for the
early termination of an aircraft lease in First Choice Airways. In the 9-month period ended 30 September 2007, the net credit of �16.8m is
the result of sale and leaseback profits of �30.7m offset by the �13.9m charge incurred as a result of the change in maintenance
provisioning in TUI UK.
Other
These relate primarily to the cost of retrospective non-recoverable Airline Passenger Duty in the prior period.
4. Net financial expenses
9-month
Year ended period ended
30 September 30 September
2008 2007
Financial income �m �m
Bank interest receivable 42.5 13.1
Interest on pension scheme assets 68.2 44.8
Interest receivable in respect of loans to
parent and fellow subsidiary undertakings 3.5 34.4
Other financial income 7.8 7.6
122.0 99.9
Financial expenses
Bank interest payable on loans and overdrafts (45.2) (16.6)
Interest payable in respect of loans from
parent and fellow subsidiary undertakings (66.8) (26.8)
Interest on pension scheme liabilities (71.8) (47.1)
Finance lease charges on leases (11.7) (5.7)
Unwinding of discount on provisions (4.0) (2.0)
Other financial expense (5.0) (11.1)
(204.5) (109.3)
Net financial expenses (82.5) (9.4)
Net financial expenses (as above) (82.5) (9.4)
Non-underlying acquisition-related financial expenses 4.2 -
Net underlying financial expenses (78.3) (9.4)
The non-underlying acquisition-related financial expenses relate to the revaluation of a put option written by the Group in respect of a
minority shareholder of L'TUR Tourismus AG. This option is exercisable until 2012.
5. Income and expenses
9-month
Year ended period ended
30 September 30 September
2008 2007
�m �m
Included in the income statement for the year
/ period are the following (credits) /
charges:
Operating lease income, aircraft (5.5) (6.3)
Operating lease rentals, land and buildings 166.9 60.1
Operating lease rentals, aircraft and other 326.9 181.0
equipment
Depreciation of property, plant and equipment 206.4 101.9
Amortisation of intangible assets 124.5 32.9
Charge for share-based payments 14.2 4.9
Loss on sale of property, plant and equipment 71.4 12.3
Loss on foreign currency retranslation 25.1 3.4
Impairment of goodwill and other intangibles 114.1 22.9
Impairment of property, plant and equipment 31.7 -
Operating lease rentals, land and buildings, includes �18.8m of costs included in separately disclosed items as provisions for onerous
leases, primarily related to the rationalisation of the retail estate.
6. Taxation
The tax (credit) / charge can be summarised as follows:
9-month
Year ended period ended
30 September 2008 30 September
2007
�m �m
(i) Analysis of (credit) / charge in the
year / period
Current tax charge:
UK corporation tax on profits of the year - 9.7
/ period
Non-UK tax on profits of the year / 54.1 29.7
period
Adjustments in respect of previous 0.3 5.6
periods
54.4 45.0
Deferred tax (credit) / charge:
Origination and reversal of timing
differences:
- Current year / period UK (42.8) (0.8)
- Current year / period non-UK (11.9) 31.6
- Adjustments in respect of previous 0.2 3.7
periods
(54.5) 34.5
Total income tax (credit) / charge in (0.1) 79.5
income statement
(ii) Reconciliation of effective tax rate
The total tax (credit) / charge for the year is lower (2007: higher) than the standard rate of corporation tax in the UK of 29% (2007:
30%). The differences are explained below:
Year ended 9-month period ended
30 September 30 September
2008 2008 2007 2007
�m % �m %
(Loss) / profit before tax reported
in the income statement (266.6) 152.5
Less share of profit in joint
ventures and associates (12.0) (6.9)
(278.6) 145.6
Income tax on (loss) / profit before
tax excluding share of joint ventures
and associates at the standard rate
of UK tax of 29% (2007: 30%) (80.8) 29.0% 43.7 30.0%
- Expenses not deductible for tax 39.0 (14.0)% 10.3 7.1%
purposes
- Utilisation of tax losses - (0.8) (0.5)%
- Non-utilisation of tax losses 44.3 (15.9)% 1.3 0.9%
- Higher tax rates on overseas (0.2) 0.1% 18.8 12.9%
earnings
- Lower tax rates on overseas (2.9) 1.0% (3.1) (2.1)%
earnings
- Adjustments to taxation in respect
of previous periods 0.5 (0.2)% 9.3 6.4%
Total income tax (credit) / charge in
income statement (0.1) 0.0% 79.5 54.6%
The underlying rate of taxation is 28% (2007: 41.9%). It is expected that an underlying tax rate of 28% will be sustainable in the
medium term.
7. Dividends
The following dividends relating to ordinary shares have been deducted from equity in the year:
Year 9-month
ended period ended
30 September 30 September
2008 2007
�m �m
Initial interim dividend paid for 2007 of 5.9p
per share (2007: interim 2.5p per share) 65.4 13.2
The interim dividend in respect of the 6-month period to 31 March 2008 of 2.8p was paid on the 1 October 2008 and this dividend of
�30.9m will be recognised as a deduction from equity in the year ending 30 September 2009.
Subsequent to the balance sheet date, the Directors have proposed a final dividend of 6.9p per share (2007: initial interim dividend of
5.9p) payable on 6 April 2009 to the holders of relevant shares on the register at 13 March 2009. The final proposed dividend amounts to
�76.3m and will, after approval by shareholders, be recognised in the consolidated financial statements for the year ending 30 September
2009. The final ordinary dividend of 6.9p per share, together with the interim dividend of 2.8p per share, makes a total dividend of 9.7p
per share relating to the year ended 30 September 2008 compared to a 2007 total dividend of 8.4p comprising the initial interim (5.9p) and
interim (2.5p) dividends.
A dividend reinvestment plan is in operation. Those shareholders who have not elected to participate in this plan, and who would like to
participate with respect to the 2008 final dividend, may do so by contacting Equiniti direct on 0871 384 2030. The last day for election for
the final proposed dividend is 23 March 2009 and any requests should be made in good time ahead of that date.
8. Movements in cash and net debt
30 September Cash Non-cash Foreign Arising on 30 September
2007 movement movement exchange acquisition 2008
�m �m �m �m �m �m
Cash and cash equivalents
1,958.7 (950.6) - 121.7 - 1,129.8
Amounts due to related parties
(1,400.0) 778.8 (23.4) (195.4) - (840.0)
Bank loans (552.7) 400.0 - (17.5) (15.6) (185.8)
Loan notes (28.3) 21.5 (0.6) (1.1) - (8.5)
Finance leases (178.0) 25.6 (10.5) (24.5) - (187.4)
Other financial liabilities
(37.1) - (4.2) (3.4) - (44.7)
Net debt (237.4) 275.3 (38.7) (120.2) (15.6) (136.6)
9. Earnings per share
The basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the applicable weighted
average number of shares in issue during the year, excluding those held in the employee share ownership trusts. The diluted earnings per
share is calculated on profits attributable to ordinary shareholders divided by the adjusted weighted average number of ordinary shares,
which takes account of the outstanding share awards, where their conversion is dilutive. The additional earnings per share measures have
been given to provide the reader of the accounts with a better understanding of the results.
As the majority of the Group's share capital was not in issue for 8 months of the prior period, the weighted average number of shares
would not give a meaningful result and hence the number of shares outstanding at 30 September 2007 has been used to calculate the prior year
earnings per share.
Basic earnings per share
Weighted (Loss) / Weighted Weighted
average earnings Proforma average Earnings average
Earnings
Earnings no. of shares per share earnings no. of shares per share Earnings no. of shares
per share
2008 2008 2008 2007 2007 2007 2007 2007
2007
�m Millions Pence �m Millions Pence �m Millions
Pence
unaudited unaudited unaudited
Basic earnings per share (270.7) 1,108.7 (24.4) 6.6 1,109.3 0.6 71.1 1,109.3
6.4
Amortisation of business 173.6 15.7 50.8 4.6 30.0
2.7
combination
intangibles, and impairment of
goodwill (net of tax)
Basic earnings per share (97.1) 1,108.7 (8.8) 57.4 1,109.3 5.2 101.1 1,109.3
9.1
before amortisation of
business combination
intangibles, and impairment of
goodwill (net of tax)
Separately disclosed items 323.1 29.2 102.0 9.2 25.5
2.3
(net of tax)
Basic underlying earnings per 226.0 1,108.7 20.4 159.4 1,109.3 14.4 126.6 1,109.3
11.4
share
Diluted earnings per share
Weighted (Loss) / Weighted Weighted
average earnings Proforma average Earnings average
Earnings
Earnings no. of shares per share earnings no. of shares per share Earnings no. of shares
per share
2008 2008 2008 2007 2007 2007 2007 2007
2007
�m Millions Pence �m Millions Pence �m Millions
Pence
unaudited unaudited unaudited
Basic earnings per share (270.7) 1,108.7 (24.4) 6.6 1,109.3 0.6 71.1 1,109.3
6.4
Effect of dilutive options 9.3 0.2 8.7 - 8.7
-
Basic earnings per share (270.7) 1,118.0 (24.2) 6.6 1,118.0 0.6 71.1 1,118.0
6.4
adjusted for dilution
Amortisation of business 173.6 15.5 50.8 4.5 30.0
2.6
combination
intangibles, and impairment of
goodwill (net of tax)
Diluted earnings per share (97.1) 1,118.0 (8.7) 57.4 1,118.0 5.1 101.1 1,118.0
9.0
before amortisation of
business combination
intangibles, and impairment of
goodwill (net of tax)
Separately disclosed items 323.1 28.9 102.0 9.2 25.5
2.3
(net of tax)
Diluted underlying earnings 226.0 1,118.0 20.2 159.4 1,118.0 14.3 126.6 1,118.0
11.3
per share
In the year ended 30 September 2008 the effect of options is anti-dilutive due to the loss for the year. The anti-dilutive effect is not
taken into account and basic earnings per share and diluted earnings per share are both disclosed as (24.4) pence. The effect of diluted
options in 2008 is included solely to calculate diluted underlying earnings per share.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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