TIDMTT.
RNS Number : 2862X
TUI Travel PLC
12 August 2009
12 August 2009
TUI Travel PLC
Interim management statement and results for
the third quarter and nine months ended 30 June 2009 (unaudited)
Key financials
Third quarter ended 30 June 2009
+-----------------------------------------+-------------+------------+-------------+
| | |
+-----------------------------------------+----------------------------------------+
| GBPm | Q3 09 | Q3 08 | Change % |
+-----------------------------------------+-------------+------------+-------------+
| Revenue | 3,575 | 3,616 | -1% |
+-----------------------------------------+-------------+------------+-------------+
| Underlying operating profit1 | 102 | 65 | +57% |
+-----------------------------------------+-------------+------------+-------------+
| Underlying operating margin % | 2.9% | 1.8% | +1.1pp |
+-----------------------------------------+-------------+------------+-------------+
1 Underlying operating profit / loss excludes separately disclosed items,
amortisation of IFRS 3 intangibles, goodwill impairment and taxation of results
of the Group's joint ventures and associates
Highlights
+-----+----------------------+------------------------------------------------------------------------+
| * | The group delivered a good performance in the third quarter with |
| | underlying operating profits up by GBP37m to GBP102m, driven by: |
| | |
+-----+-----------------------------------------------------------------------------------------------+
| | - | Incremental GBP21m of synergy benefits delivered; |
| | | |
+-----+----------------------+------------------------------------------------------------------------+
| | - | Good trading in the UK, Nordics and Germany, despite an adverse impact |
| | | from the swine flu outbreak in Mexico; |
| | | |
+-----+----------------------+------------------------------------------------------------------------+
| | - | Continued elimination of losses in the scheduled flying operations in |
| | | Germany and the UK; and |
| | | |
+-----+----------------------+------------------------------------------------------------------------+
| | - | The timing of Easter, which this year fell in the third quarter. |
| | | |
+-----+----------------------+------------------------------------------------------------------------+
| * | Summer 2009 continues to trade in line with our expectations with |
| | customers booking closer to departure; achieving required load factors and |
| | average selling prices. |
| | |
+-----+-----------------------------------------------------------------------------------------------+
| * | Winter 2009/10 booking volumes behind last year, as anticipated, with |
| | capacity adjusted to align supply and demand. |
| | |
+-----+-----------------------------------------------------------------------------------------------+
| * | Summer 2010 trading has started positively in the UK, with bookings in |
| | line with the prior year despite the programme launching two months later. |
| | |
+-----+-----------------------------------------------------------------------------------------------+
| * | Well positioned to meet the Board's expectations for the year ended 30 |
| | September 2009. |
+-----+----------------------+------------------------------------------------------------------------+
Peter Long, Chief Executive Officer of TUI Travel PLC, commented
"We are pleased with these results and remain well positioned to meet the
Board's expectations for the year ending 30 September 2009. Our UK Summer 2010
programme, which only launched recently, is trading well and we remain satisfied
with our trading performance across all open seasons. Now, more than ever,
customers are choosing to book their holidays with our high quality, trustworthy
brands.
We anticipate market conditions will remain challenging and expect the later
booking pattern to continue in the next financial year. We will continue to
maintain a high degree of flexibility in our business model to allow us to alter
capacity in line with market conditions."
Conference Call
A conference call for analysts will take place today at 9.00am (BST). The
dial-in arrangements for the call are as follows:
+---------------------+--------------------------------------------------------+
| Telephone: | +44 (0) 1452 555 566 |
+---------------------+--------------------------------------------------------+
| Participant Code: | 24586272 |
+---------------------+--------------------------------------------------------+
A presentation to accompany the conference call will be made available at 8.00
am (BST) via our corporate website:
http://www.tuitravelplc.com
A recording of the conference call will be available on:
+---------------------+--------------------------------------------------------+
| Telephone: | +44 (0) 1452 550 000 |
+---------------------+--------------------------------------------------------+
| Participant Code: | 24586272# |
+---------------------+--------------------------------------------------------+
Enquiries:
+-------------------------------------------------+----------------------------+
| TUI Travel PLC | |
+-------------------------------------------------+----------------------------+
| Paul Bowtell, Chief Financial Officer | Tel: 01293 645 713 |
+-------------------------------------------------+----------------------------+
| Andy Jones, Director of Finance & Investor | Tel: 01293 645 795 |
| Relations | |
+-------------------------------------------------+----------------------------+
| David Paterson, Head of Strategy & Investor | Tel: 01293 645 795 |
| Relations | |
+-------------------------------------------------+----------------------------+
| Lesley Allan, Corporate Communications Director | Tel: 01293 645 773 |
+-------------------------------------------------+----------------------------+
| | |
+-------------------------------------------------+----------------------------+
| Hudson Sandler | |
+-------------------------------------------------+----------------------------+
| Jessica Rouleau /Kate Hough | Tel: 020 7796 4133 |
+-------------------------------------------------+----------------------------+
CURRENT TRADING AND OUTLOOK
Summer 2009
Booking volumes to date are tracking ahead of capacity reductions across most of
our source markets, leaving us with less stock left to sell for the remainder of
the season compared with last year. Trading in the lates market is in line with
our expectations and we are achieving the required departed load factors and
pricing levels, despite the later booking curve that we have experienced this
season.
Recent booking volumes have continued to trade ahead of the cumulative
position showing that, although customers are booking later in the current
economic climate, there is still strong demand for the main summer holiday. As a
result, bookings and left to sell statistics have improved further across most
source markets since our last update on 19 May.
+-------------+--------+-----------+------------+
| y-o-y | | Bookings |Cumulative |
| variation% | | since | |
| | | previous | bookings |
| | | trading | |
| | |statement | |
+-------------+--------+-----------+------------+
| | | | |
+-------------+--------+-----------+------------+
| UK - | | +2 | -12 |
| Charter | | | |
+-------------+--------+-----------+------------+
| Nordics | | +7 | -10 |
+-------------+--------+-----------+------------+
| Germany | | -6 | -9 |
| - | | | |
| Charter | | | |
+-------------+--------+-----------+------------+
| France | | +2 | -10 |
+-------------+--------+-----------+------------+
| Belgium | | -7 | -6 |
+-------------+--------+-----------+------------+
| Netherlands | | -6 | -14 |
+-------------+--------+-----------+------------+
+--------------+--------+--------+------------+--------+-----------+
| Current | Summer 2009 | | |
| Trading | | | |
| 1 | | | |
+--------------+------------------------------+--------+-----------+
| | | | Total |
| | | | Risk |
+--------------+------------------------------+--------+-----------+
| y-o-y | ASP2 |Sales2 |Customers2 | |Capacity3 |
| variation% | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| MAINSTREAM | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| Northern | | | | | |
| Region | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| Short-haul | +5 | -9 | -13 | | |
+--------------+--------+--------+------------+--------+-----------+
| Medium-haul | +10 | +2 | -8 | | |
+--------------+--------+--------+------------+--------+-----------+
| Long-haul | +6 | -20 | -25 | | |
+--------------+--------+--------+------------+--------+-----------+
| UK - | +7 | -6 | -12 | | -16 |
| Charter | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| Nordic | +8 | -3 | -10 | | -15 |
+--------------+--------+--------+------------+--------+-----------+
| Northern | +7 | -5 | -12 | | -16 |
| Region - | | | | | |
| Total | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| Germany | -3 | -12 | -9 | | |
| - | | | | | |
| Charter | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| Germany | +3 | -9 | -11 | | |
| - | | | | | |
| Scheduled | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| Germany | -3 | -12 | -10 | | -16 |
| - Total | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| Austria | +1 | -15 | -16 | | |
+--------------+--------+--------+------------+--------+-----------+
| Switzerland | -7 | -21 | -15 | | |
+--------------+--------+--------+------------+--------+-----------+
| Poland | -10 | -46 | -40 | | |
+--------------+--------+--------+------------+--------+-----------+
| Central | -3 | -13 | -11 | | -15 |
| Europe | | | | | |
| - Total | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| France | -3 | -13 | -10 | | |
+--------------+--------+--------+------------+--------+-----------+
| Belgium | -1 | -7 | -6 | | |
+--------------+--------+--------+------------+--------+-----------+
| Netherlands | +1 | -13 | -14 | | |
+--------------+--------+--------+------------+--------+-----------+
| Western | -2 | -11 | -10 | | -9 |
| Europe | | | | | |
| - Total | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| SPECIALIST | +2 | -15 | -17 | | |
+--------------+--------+--------+------------+--------+-----------+
| ACTIVITY | NA | -13 | NA | | |
+--------------+--------+--------+------------+--------+-----------+
| A&D | -3 | +5 | +8 | | |
| (formerly | | | | | |
| ODS)4 | | | | | |
+--------------+--------+--------+------------+--------+-----------+
| | | | | | |
+--------------+--------+--------+------------+--------+-----------+
1 These statistics are up to 2 August 2009
2 These statistics relate to all
customers whether risk or non-risk
3 These statistics include all risk
capacity programmes
4 These statistics include Online businesses only
In the UK, customer bookings for our charter business are now down 12%, versus
down 16% at our last trading update, reflecting an improved run rate with
volumes up 2% in the period. The total programme load factor is 79% sold for the
full season, with the load factor to the end of September at 85% sold, which is
broadly in line with last year. Average selling prices are now 7% ahead of the
prior year.
We resumed flights to Mexico at the end of May after the British Government
lifted its advice to avoid all non-essential travel to the country and are now
seeing demand for the destination return due to the value on offer to customers.
In the last month, bookings to Mexico were up 27% year on year, although load
factors are approximately ten percentage points lower than other long haul
destinations and versus the prior year level because of the lower bookings and
higher cancellations seen after the initial outbreak of swine flu. We estimate
that the outbreak of swine flu in Mexico reduced profits in our UK business by
c.GBP7m in the third quarter.
The medium-haul destinations of Egypt and Turkey have continued to
experience strong growth versus the prior year, partially driven by some
customers being attracted to non-Euro destinations. All inclusive (4pp mix
increase to 33%) and differentiated holidays (6pp mix increase to 34%) continue
to prove popular with our customers.
In the Nordics, as in the UK, we experienced a later booking trend and trading
has continued to improve since the last trading update, with bookings up 7% and
average selling prices up 14% in the period. Trading in Sweden has continued to
be particularly strong and, after difficult early trading, recent bookings in
Denmark have recovered well. Total bookings to date are now down 10% compared to
capacity down 15%. The programme load factor is now 95%, three percentage points
higher than last year.
In Germany, charter bookings have strengthened since our last trading update,
with volumes down 6% in the period compared to the cumulative position of down
9%. Demand for our differentiated products remains high. Margins per passenger
in the charter business are still ahead of last year despite average selling
prices being down three percent, as discounts have been funded by suppliers.
However, the scheduled flying business in Germany has seen reduced bookings in
recent weeks as volumes trend towards capacity reductions. The total load factor
in Germany is now 76%, one percentage point higher than the prior year.
In Switzerland, excess capacity remains in the market and we continue to
experience pricing pressure as a result of aggressive competitor pricing.
Trading in Poland remains difficult due to the continued devaluation of the
Zloty which has substantially increased the cost of overseas travel.
In France, trading has continued to improve since the last trading update, with
cumulative bookings down 10% compared to 16% previously. However, load factors
remain behind prior year as the improved recent volumes have not offset the
impact on bookings of the civil unrest in the French West Indies earlier in the
year. Lates trading in Belgium has been robust with load factors now at 91%. We
now have significantly less product left to sell and as a result the rate of
sale has naturally slowed. Average selling prices are down slightly versus the
prior year due to increased mix of overland holidays following a reduction in
our flying programme. Load factors in the Netherlands are now ahead of prior
year due to continued improved trading after a slow start to the season.
In the Specialist & Emerging Markets sector sales remain 15% down driven largely
by reduced demand in the US for our portfolio of escorted tours products and
reduced volumes in some of our long-haul specialist brands due to higher fuel
supplements on scheduled flights. However, our premium UK brands including
Sovereign and Hayes & Jarvis, have experienced higher demand and volumes are
ahead of prior year.
Within the Activity sector we have reduced capacity in the Marine division and
seen reduced demand in the North American adventure businesses resulting in
sales down 13%.
In the Accommodation & Destinations sector (A&D, previously Online Destination
Services), LateRooms continues to perform strongly with the number of bednights
up more than 50% versus prior year driven by increased supply of distressed bed
stock and consumer demand for value. Profits in the Incoming Agencies business
within A&D were adversely affected by c.GBP1m due to the outbreak of swine flu
in Mexico, which reduced the number of visitors to this destination.
Winter 2009/10
As anticipated, the later booking trend seen in Winter 2008/9 and Summer 2009
has continued into Winter 2009/10 in the UK source market, with bookings
currently down 21%. Trading in the last four weeks has improved, with bookings
down 6% versus last year. We have taken a cautious approach to planning for this
season, especially as winter holidays can be more discretionary in nature given
that they are often secondary holidays. As such, we have planned to remove 15%
of capacity although we have retained flexibility to alter this to reflect
developments in demand. The load factor is currently c.20% and the average
selling price is up 9% versus prior year.
In the Nordics, bookings have started slowly and are down 29%, with Denmark
being particularly weak. Trading in recent weeks, however, has improved, with
volumes in line with our initial capacity reduction, which is down by 15%. The
average selling price is currently up 3% versus prior year.
The other source markets have only recently launched their Winter 2009/10
programmes.
Summer 2010
Bookings for the UK Summer 2010 programme are in line with the prior
year despite the programme launching two months later than for Summer 2009 and
higher initial deposit levels, while the average selling price is currently 3%
higher. The first brochure edition was launched later this year reflecting the
later booking curve and ongoing negotiations with accommodation suppliers and
initial capacity plans are broadly flat versus last year. The load factor is 5%,
which is in line with last year.
Most of our sales to date are for our portfolio of differentiated content as
customers seek to guarantee their chosen product and departure date. Bookings
for our First Choice Holiday Villages have been particularly strong in early
trading, up 11% versus last year.
Foreign Exchange and Fuel Hedged Position
We have largely hedged our fuel and foreign exchange exposure for the current
financial year and continue to hedge for future seasons in line with our hedging
policy.
+--------+--------+---------+--------+
| |Summer | Winter |Summer |
| | 2009 |2009/10 | 2010 |
+--------+--------+---------+--------+
| Euro | 95% | 78% | 39% |
+--------+--------+---------+--------+
| USD | 99% | 91% | 59% |
+--------+--------+---------+--------+
| Jet | 98% | 81% | 59% |
| Fuel | | | |
+--------+--------+---------+--------+
| As at | | | |
| 7 | | | |
| August | | | |
| 2009 | | | |
+--------+--------+---------+--------+
Foreign Exchange Translation
The underlying operating profit in the third quarter was GBP3m higher due to a
foreign exchange translation gain, primarily driven by Sterling's depreciation
against the Euro and US Dollar relative to the third quarter last year. This
gain, however, is insufficient to offset the adverse translation impact on
seasonal losses in the first half of this financial year which amounted to
GBP30m, leaving FX translation losses at GBP27m in the nine months to 30 June
2009. If exchange rates remain at current levels we anticipate that the impact
on the full year will be adverse.
Integration
During the quarter we delivered GBP28m of synergy benefit (Q3 08: GBP7m), with
GBP23m in the UK Mainstream and GBP5m from other source markets. In the year to
date, we have delivered synergy benefit of GBP80m and remain on track to deliver
GBP115m of benefit in the current financial year. We remain confident of
delivering the total synergy target of GBP200m per annum and the expected total
cost of delivering the synergies is unchanged at GBP260m.
Outlook
We are satisfied with trading for Summer 2009 and remain well positioned to meet
the Board's expectations for the year ended 30 September 2009.
Lates trading in the current season, along with our experience in the previous
winter season, gives us confidence that, whilst the uncertain economic
conditions have resulted in a later booking curve, holiday demand remains strong
and tighter market supply conditions mean that required load factors and selling
prices will continue to be achieved. We expect a similar booking pattern to
continue in the next financial year.
We will continue to maintain a high degree of flexibility for the coming seasons
to allow us to alter capacity as market conditions develop.
THIRD QUARTER BUSINESS AND FINANCIAL REVIEW
Group Performance
The Group's underlying operating profit improved by GBP37m to GBP102m (Q3 08:
GBP65m). The improvement was driven by incremental integration synergies and the
benefit from Easter falling in April this year. This was partially offset by the
adverse impact of the Mexican swine flu outbreak and continued weak trading in
the French business due to weak consumer sentiment towards the destinations of
French West Indies and Madagascar.
The main drivers of the year on year change in Q3 underlying operating profit
are:
+--------------+--------+
| GBPm | |
+--------------+--------+
| Q3 08 | 65 |
| underlying | |
| operating | |
| profit | |
+--------------+--------+
| Incremental | +21 |
| synergies | |
+--------------+--------+
| Scheduled | +4 |
| flying | |
+--------------+--------+
| Easter | +17 |
| / | |
| Trading | |
+--------------+--------+
| Swine | -8 |
| flu | |
| impact | |
+--------------+--------+
| Acquisitions | +4 |
+--------------+--------+
| FX | +3 |
| Translation | |
+--------------+--------+
| Impact | -4 |
| of | |
| FY08 | |
| sale & | |
| leaseback | |
| transaction | |
+--------------+--------+
| Q3 09 | 102 |
| underlying | |
| operating | |
| profit | |
+--------------+--------+
| | |
+--------------+--------+
Group revenue was GBP3,575m in Q3 09, a reduction of 1% on Q3 08 revenue of
GBP3,616m. This variance was due to capacity reductions, particularly in the UK
and Germany, partly offset by higher selling prices and translation of foreign
currency revenue into Sterling. On a constant currency basis, the revenue
decline was 9%.
Third quarter ended 30 June 2009
+------------+--------+--------+--------+
| | |
+------------+--------------------------+
| GBPm | Q3 09 | Q3 08 | Change |
| | | | % |
+------------+--------+--------+--------+
| Revenue | 3,575 | 3,616 | -1% |
+------------+--------+--------+--------+
| Underlying | 102 | 65 | +57% |
| operating | | | |
| profit1 | | | |
+------------+--------+--------+--------+
| Underlying | 2.9% | 1.8% | +1.1pp |
| operating | | | |
| margin % | | | |
+------------+--------+--------+--------+
Nine months ended 30 June 2009
+------------+--------+--------+--------+
| | |
+------------+--------------------------+
| GBPm | 9M 09 | 9M 08 | Change |
| | | | % |
+------------+--------+--------+--------+
| Revenue | 8,954 | 8,770 | +2% |
+------------+--------+--------+--------+
| Underlying | (187) | (185) | -1% |
| operating | | | |
| loss1 | | | |
+------------+--------+--------+--------+
| Underlying | (2.1%) | (2.1%) | - |
| operating | | | |
| margin % | | | |
+------------+--------+--------+--------+
Underlying operating profit / loss excludes separately disclosed items,
amortisation of IFRS 3 intangibles, goodwill impairment and taxation of results
of the Group's joint ventures and associates.
Segmental Performance
+--------------+----------+---------+---------------+------------------------------------+-------------+------------+----------+--------+--------+--------+---------+
| | Northern | Central | Western Europe | Total | Specialist | Activity | A&D | Group | Total |
| | Region | Europe | | Mainstream | | | | and | Group |
| | | | | | | | | JVs | |
+--------------+----------+---------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| | | | | | | | | | |
+--------------+----------+---------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Customers | | | | | | | | |
| ('000) | | | | | | | | |
+-------------------------+---------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Q3 | 1,908 | 2,650 | 1,407 | 5,965 | 293 | - | - | - | - |
| 09 | | | | | | | | | |
+--------------+----------+---------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Q3 | 2,387 | 2,957 | 1,577 | 6,921 | 330 | - | - | - | - |
| 08 | | | | | | | | | |
+--------------+----------+---------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Change | -20% | -10% | -11% | -14% | -11% | - | - | - | - |
| % | | | | | | | | | |
+--------------+----------+---------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Revenue (GBPm) | | | | | | | |
+-----------------------------------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Q3 | 1,032 | 1,277 | 718 | 3,027 | 208 | 181 | 159 | - | 3,575 |
| 09 | | | | | | | | | |
+--------------+----------+---------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Q3 | 1,179 | 1,229 | 726 | 3,134 | 204 | 137 | 141 | - | 3,616 |
| 08 | | | | | | | | | |
+--------------+----------+---------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Change | -13% | +4% | -1% | -3% | +2% | +32% | +13% | - | -1% |
| % | | | | | | | | | |
+--------------+----------+---------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Underlying operating | | | | | | | |
| profit (GBPm) | | | | | | | |
+-----------------------------------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Q3 | 37 | 41 | (16) | 62 | 9 | 21 | 14 | (4) | 102 |
| 09 | | | | | | | | | |
+--------------+----------+---------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Q3 | 19 | 39 | (21) | 37 | 6 | 9 | 18 | (5) | 65 |
| 08 | | | | | | | | | |
+--------------+----------+---------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Change | +95% | +5% | +23% | +68% | +50% | +133% | -22% | +20% | +57% |
| % | | | | | | | | | |
+--------------+----------+---------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Underlying operating | | | | | | | |
| margin% | | | | | | | |
+-----------------------------------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Q3 | 3.6% | 3.2% | -2.3% | 2.0% | 4.1% | 11.6% | 9.0% | - | 2.9% |
| 09 | | | | | | | | | |
+--------------+----------+---------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Q3 | 1.6% | 3.2% | -2.9% | 1.2% | 3.1% | 6.2% | 12.5% | - | 1.8% |
| 08 | | | | | | | | | |
+--------------+----------+---------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| Change | +2.0pp | flat | +0.6pp | +0.8pp | +1.0pp | +5.4pp | -3.5pp | - | +1.1ppt |
| % | | | | | | | | | |
+--------------+----------+---------+----------------------------------------------------+-------------+------------+----------+-----------------+--------+---------+
| | | | | |
+--------------+----------+---------+---------------+------------------------------------+-------------+------------+----------+--------+--------+--------+---------+
Northern Region
The Northern Region achieved an GBP18m improvement in underlying operating
profit to GBP37m (Q3 08: GBP19m), representing a two percentage point
improvement in underlying operating margin. The quarterly improvement was
largely driven by incremental merger synergies of GBP16m and the later timing of
Easter, offset by the adverse impact of the Mexican swine flu outbreak.
+--------------+----------+
| GBPm | Northern |
| | Region |
+--------------+----------+
| Q3 08 | 19 |
| underlying | |
| operating | |
| profit | |
+--------------+----------+
| Scheduled | +2 |
| Flying | |
+--------------+----------+
| Synergies | +16 |
+--------------+----------+
| Acquisitions | +2 |
+--------------+----------+
| Easter | +8 |
| / | |
| Trading | |
+--------------+----------+
| Swine | -7 |
| flu | |
| impact | |
+--------------+----------+
| Impact | -2 |
| of | |
| FY08 | |
| sale & | |
| leaseback | |
| transaction | |
+--------------+----------+
| FX | -1 |
| Translation | |
+--------------+----------+
| Q3 09 | 37 |
| underlying | |
| operating | |
| profit | |
+--------------+----------+
| | |
+--------------+----------+
During Q3 09, the UK continued to exit its loss making scheduled flying business
which delivered an additional GBP2m of margin improvement in Q3 09 over prior
year. Input cost inflation was recovered through higher average selling prices
during the period.
Trading profits in the UK increased by GBP8m in the quarter, helped by the
benefit of Easter falling in April this year versus March last year. However,
this was offset by the adverse impact on trading of the Mexican swine flu
outbreak in April 2009, which resulted in an approximate GBP7m adverse impact in
Q3 09 due to repatriation and compensation costs, increased cancellations and
lower load factors when the Mexico flying programme resumed in May.
UK synergies of GBP23m were delivered in Q3 09, an increase of GBP16m over the
prior year. The business remains on track to deliver full year synergies of
GBP90m.
Performance in the Nordics business was strong in Q3 09, with operating profit
up GBP4m, partly due to the Easter holidays falling in April this year and also
due to strong pricing (average selling price increases of 7% over prior year).
This excellent trading performance was driven by the strength of our leading
brands in Sweden and Norway, which according to YouGov, an independent market
research company, are consistently rated as consumers' preferred brands in these
source markets. This improvement, however, was offset by margin erosion in
Canada in April (the final month of the winter high season) due to the continued
challenging conditions in this market.
Central Europe
Central Europe reported an underlying operating profit of GBP41m in Q3 09, an
improvement of GBP2m over last year (Q3 08: GBP39m).
+-------------+---------+
| GBPm | Central |
| | Europe |
+-------------+---------+
| Q3 08 | 39 |
| underlying | |
| operating | |
| profit | |
+-------------+---------+
| Scheduled | +2 |
| Flying | |
+-------------+---------+
| FX | +3 |
| Translation | |
| benefit | |
+-------------+---------+
| Impact | -2 |
| of | |
| sale | |
| and | |
| leasebacks | |
+-------------+---------+
| Easter | -1 |
| / | |
| Trading | |
+-------------+---------+
| Q3 09 | 41 |
| underlying | |
| operating | |
| profit | |
+-------------+---------+
| | |
+-------------+---------+
Germany continued its programme of reducing loss making scheduled flying
capacity in Q3 09, reducing capacity by 18% in the quarter versus prior year.
This yielded additional margin improvements of GBP2m in the period. Trading
profits, including the benefit of Easter timing, increased by a further GBP4m in
Q3 09 over prior year.
The operating profit improvement in Germany, however, was more than offset by
increased losses in Poland and Switzerland. Customer volumes in Poland decreased
by 32% in Q3 09 over last year due to the significant weakening of the Polish
Zloty against the Euro, which significantly reduced customer demand for Euro
destinations and increased input costs. Switzerland continues to be adversely
affected by competitor actions to protect market share, resulting in deep
discounting and lower prices.
Western Europe
Western Europe reported an underlying operating loss of GBP16m, an improvement
of GBP5m over the Q3 08 loss of GBP21m.
This improvement was driven by a strong performance in Belgium, which was helped
by Easter timing. Western Europe performance was, however, partially offset by
weak trading in France as consumer sentiment continued to be weak towards the
destinations of French West Indies and Madagascar, following the civil unrest in
the second quarter of 2009. Corsair, our French long haul scheduled airline, has
experienced a challenging financial year due to these specific destination
issues and the economic downturn. We are continuing to review the business model
/ fleet and associated strategic alternatives for the Corsair business.
France delivered synergies of GBP1m in the quarter (Q3 08: nil), primarily in
distribution costs.
Specialist & Emerging Markets
The sector delivered an improvement of GBP3m in underlying operating profits to
GBP9m in the third quarter (Q3 08: GBP6m).
This improvement was due to the delivery of GBP1m of synergies in the quarter,
GBP1m from acquisitions and GBP1m from FX translation benefits.
The joint venture in Russia & CIS and its subsequent acquisitions have now been
approved by EU and local regulatory and competition clearance
authorities. Following this, the joint venture agreement between TUI Travel and
S-Group is now completed.
Activity
The Activity sector delivered a significant improvement in underlying operating
profits to GBP21m in Q3 09 (Q3 08: GBP9m). Acquisitions contributed GBP2m of
profit in the quarter and the sector delivered integration synergies of GBP3m in
Q3 09 (Q3 08: nil).
Strong trading growth was delivered by our Sports Division in Q3 09 due to the
Lions Tour in June 2009 which takes place every four years. The Ski division
also performed strongly in April, with revenue growth of 22% in the quarter and
improved margins. Trading profit across the remainder of the sector was broadly
in line with last year due to capacity rationalisation, for example the Marine
Division where Summer 2009 capacity has been cut by 15%.
Accommodation & Destinations (A&D, formerly ODS)
A&D reported an underlying operating profit of GBP14m in Q3 09 (Q3 08: GBP18m).
The sector was adversely impacted by the Swine Flu outbreak in Mexico,
particularly during the period when the government advice in many source markets
was to avoid non-necessary travel to the country. At this time customer presence
in the Mexican resorts was significantly reduced, leading to lost transfer and
excursion revenue. This resulted in lost contribution of GBP1m in Q3 09.
The incoming agencies also continued to experience decreased volumes and
customer spend in the Euro destinations, due to the strength of the Euro against
the Sterling, and capacity reductions implemented by the tour operators.
The sector delivered GBP1m of synergies in Q3 09 (Q3 08: nil) from the
integration of the former TUI and First Choice businesses in our incoming agency
division.
Acquisitions
In the three months ended 30 June 2009, the Group acquired four businesses for a
maximum consideration of GBP31m, of which the initial cash payment was GBP15m.
The total maximum consideration for acquisitions in the nine months to 30 June
2009 was GBP81m.
Three of the acquisitions in the quarter were in the Activity sector and one was
in the A&D sector. In the Activity sector we acquired Zegrahm Expeditions, a
small-ship adventure cruise specialist, Williment, a New Zealand sports tours
operator, and ATA, an escorted tours specialist in Australia. In the A&D sector,
we acquired Aragon, a cruise handling business in the UK.
Cash and Liquidity
The net debt position (cash and cash equivalents less loans, overdrafts and
finance leases) at 30 June 2009 was GBP866m (30 June 2008: GBP285m). Net debt
consisted of GBP404m of cash and GBP1,270m of interest-bearing loans and
liabilities. The net debt position at 31 March 2009 was GBP1,097m. The reduction
in net debt is primarily a result of cash flow from operating activities, which
is seasonally high in the third quarter.
TUI AG Reporting
TUI AG, our majority shareholder, is issuing its second quarter results for the
three-months to 30 June 2009 on 13 August 2009. This report contains financial
information relating to TUI Travel PLC. However, this information is not
directly comparable due to different presentation and treatment of certain
items.
Consolidated income statement (unaudited)
for the 9 month period ended 30 June 2009
+---------------------------------------------+-------+---------+----------+-----------+
| | | | 9 month | 9 month |
| | | | period | period |
| | | | ended | ended |
+---------------------------------------------+-------+---------+----------+-----------+
| | | | 30 June | 30 June |
+---------------------------------------------+-------+---------+----------+-----------+
| | | | 2009 | 2008 |
+---------------------------------------------+-------+---------+----------+-----------+
| | | | | (as |
| | | | | restated |
| | | | | - note |
| | | | | 1) |
+---------------------------------------------+-------+---------+----------+-----------+
| | Note | | GBPm | GBPm |
+---------------------------------------------+-------+---------+----------+-----------+
| Revenue | 2 | | 8,954 | 8,770 |
+---------------------------------------------+-------+---------+----------+-----------+
| Cost of sales | | | (8,467) | (8,470) |
+---------------------------------------------+-------+---------+----------+-----------+
| Gross profit | | | 487 | 300 |
+---------------------------------------------+-------+---------+----------+-----------+
| | | | | |
+---------------------------------------------+-------+---------+----------+-----------+
| Administrative expenses | | | (838) | (915) |
+---------------------------------------------+-------+---------+----------+-----------+
| Share of profits of joint ventures and | | | 4 | 2 |
| associates | | | | |
+---------------------------------------------+-------+---------+----------+-----------+
| Operating loss | 2 | | (347) | (613) |
+---------------------------------------------+-------+---------+----------+-----------+
| | | | | |
+---------------------------------------------+-------+---------+----------+-----------+
| Analysed as: | | | | |
+---------------------------------------------+-------+---------+----------+-----------+
| Underlying operating loss | 2 | | (187) | (185) |
+---------------------------------------------+-------+---------+----------+-----------+
| Separately disclosed items | 3 | | (117) | (241) |
+---------------------------------------------+-------+---------+----------+-----------+
| Amortisation of business combination | | | (42) | (75) |
| intangibles | | | | |
+---------------------------------------------+-------+---------+----------+-----------+
| Impairment of goodwill | | | - | (112) |
+---------------------------------------------+-------+---------+----------+-----------+
| Taxation on profits of joint ventures and | | | (1) | - |
| associates | | | | |
+---------------------------------------------+-------+---------+----------+-----------+
| Operating loss | | | (347) | (613) |
+---------------------------------------------+-------+---------+----------+-----------+
| | | | | |
+---------------------------------------------+-------+---------+----------+-----------+
| Financial income | | | 52 | 116 |
+---------------------------------------------+-------+---------+----------+-----------+
| Financial expenses | | | (116) | (184) |
+---------------------------------------------+-------+---------+----------+-----------+
| Net financial expenses | | | (64) | (68) |
+---------------------------------------------+-------+---------+----------+-----------+
| | | | | |
+---------------------------------------------+-------+---------+----------+-----------+
| Loss before tax | | | (411) | (681) |
+---------------------------------------------+-------+---------+----------+-----------+
| Taxation | | | 115 | 159 |
+---------------------------------------------+-------+---------+----------+-----------+
| Loss after tax from continuing operations | | | (296) | (522) |
+---------------------------------------------+-------+---------+----------+-----------+
| | | | | |
+---------------------------------------------+-------+---------+----------+-----------+
| Loss from discontinued operations | | | (8) | - |
+---------------------------------------------+-------+---------+----------+-----------+
| Loss for the period | | | (304) | (522) |
+---------------------------------------------+-------+---------+----------+-----------+
| | | | | |
+---------------------------------------------+-------+---------+----------+-----------+
| Attributable to: | | | | |
+---------------------------------------------+-------+---------+----------+-----------+
| Ordinary shareholders | | | (305) | (524) |
+---------------------------------------------+-------+---------+----------+-----------+
| Minority interest | | | 1 | 2 |
+---------------------------------------------+-------+---------+----------+-----------+
| Loss for the period | | | (304) | (522) |
+---------------------------------------------+-------+---------+----------+-----------+
+----------------------------------------------------------------------------------+
| Non-GAAP measures |
+----------------------------------------------------------------------------------+
| Reconciliation of underlying operating loss to underlying loss before tax |
+----------------------------------------------------------------------------------+
+----------------------------------------------+------+---------+----------+-----------+
| | | | GBPm | GBPm |
+----------------------------------------------+------+---------+----------+-----------+
| Underlying operating loss | | | (187) | (185) |
+----------------------------------------------+------+---------+----------+-----------+
| Net underlying financial expenses | | | (64) | (68) |
+----------------------------------------------+------+---------+----------+-----------+
| Underlying loss before tax | | | (251) | (253) |
+----------------------------------------------+------+---------+----------+-----------+
Consolidated balance sheet (unaudited)
At 30 June 2009 and 30 September 2008
+------------------------------------------------+--------+----------+-----------+
| | | 30 June | 30 |
| | | | September |
+------------------------------------------------+--------+----------+-----------+
| | | 2009 | 2008 |
+------------------------------------------------+--------+----------+-----------+
| | | GBPm | GBPm |
+------------------------------------------------+--------+----------+-----------+
| Non-current assets | | | |
+------------------------------------------------+--------+----------+-----------+
| Intangible assets | | 4,638 | 4,429 |
+------------------------------------------------+--------+----------+-----------+
| Property, plant and equipment | | 977 | 926 |
+------------------------------------------------+--------+----------+-----------+
| Investments in joint ventures and associates | | 91 | 114 |
+------------------------------------------------+--------+----------+-----------+
| Other investments | | 45 | 56 |
+------------------------------------------------+--------+----------+-----------+
| Trade and other receivables | | 237 | 210 |
+------------------------------------------------+--------+----------+-----------+
| Employee benefit asset | | 1 | 17 |
+------------------------------------------------+--------+----------+-----------+
| Derivative financial instruments | | 37 | 48 |
+------------------------------------------------+--------+----------+-----------+
| Deferred tax assets | | 398 | 205 |
+------------------------------------------------+--------+----------+-----------+
| | | 6,424 | 6,005 |
+------------------------------------------------+--------+----------+-----------+
| Current assets | | | |
+------------------------------------------------+--------+----------+-----------+
| Inventories | | 58 | 51 |
+------------------------------------------------+--------+----------+-----------+
| Other investments | | 41 | 29 |
+------------------------------------------------+--------+----------+-----------+
| Trade and other receivables | | 2,077 | 1,653 |
+------------------------------------------------+--------+----------+-----------+
| Income tax recoverable | | 68 | 29 |
+------------------------------------------------+--------+----------+-----------+
| Derivative financial instruments | | 222 | 273 |
+------------------------------------------------+--------+----------+-----------+
| Cash and cash equivalents | | 404 | 1,130 |
+------------------------------------------------+--------+----------+-----------+
| Non-current assets held for sale and disposal | | 75 | 157 |
| groups | | | |
+------------------------------------------------+--------+----------+-----------+
| | | 2,945 | 3,322 |
+------------------------------------------------+--------+----------+-----------+
| | | | |
+------------------------------------------------+--------+----------+-----------+
| Total assets | | 9,369 | 9,327 |
+------------------------------------------------+--------+----------+-----------+
| | | | |
+------------------------------------------------+--------+----------+-----------+
| Current liabilities | | | |
+------------------------------------------------+--------+----------+-----------+
| Interest-bearing loans and borrowings | | (119) | (99) |
+------------------------------------------------+--------+----------+-----------+
| Employee benefits | | (2) | (2) |
+------------------------------------------------+--------+----------+-----------+
| Derivative financial instruments | | (337) | (178) |
+------------------------------------------------+--------+----------+-----------+
| Trade and other payables | | (4,533) | (4,057) |
+------------------------------------------------+--------+----------+-----------+
| Provisions | | (177) | (235) |
+------------------------------------------------+--------+----------+-----------+
| Income tax payable | | (75) | (89) |
+------------------------------------------------+--------+----------+-----------+
| Liabilities of disposal groups | | (26) | (22) |
+------------------------------------------------+--------+----------+-----------+
| | | (5,269) | (4,682) |
+------------------------------------------------+--------+----------+-----------+
| Non-current liabilities | | | |
+------------------------------------------------+--------+----------+-----------+
| Interest-bearing loans and borrowings | | (1,151) | (1,167) |
+------------------------------------------------+--------+----------+-----------+
| Employee benefits | | (457) | (268) |
+------------------------------------------------+--------+----------+-----------+
| Derivative financial instruments | | (42) | (50) |
+------------------------------------------------+--------+----------+-----------+
| Trade and other payables | | (87) | (149) |
+------------------------------------------------+--------+----------+-----------+
| Provisions | | (222) | (180) |
+------------------------------------------------+--------+----------+-----------+
| Deferred tax liabilities | | (206) | (235) |
+------------------------------------------------+--------+----------+-----------+
| | | (2,165) | (2,049) |
+------------------------------------------------+--------+----------+-----------+
| | | | |
+------------------------------------------------+--------+----------+-----------+
| Total liabilities | | (7,434) | (6,731) |
+------------------------------------------------+--------+----------+-----------+
| | | | |
+------------------------------------------------+--------+----------+-----------+
| Net assets | | 1,935 | 2,596 |
+------------------------------------------------+--------+----------+-----------+
| | | | |
+------------------------------------------------+--------+----------+-----------+
| Equity | | | |
+------------------------------------------------+--------+----------+-----------+
| Share capital | | 112 | 112 |
+------------------------------------------------+--------+----------+-----------+
| Other reserves | | 2,495 | 2,750 |
+------------------------------------------------+--------+----------+-----------+
| Retained deficit | | (675) | (271) |
+------------------------------------------------+--------+----------+-----------+
| Total equity attributable to equity holders of | | 1,932 | 2,591 |
| the parent | | | |
+------------------------------------------------+--------+----------+-----------+
| Minority interest | | 3 | 5 |
+------------------------------------------------+--------+----------+-----------+
| Total equity | | 1,935 | 2,596 |
+------------------------------------------------+--------+----------+-----------+
Notes to the financial statements (unaudited)
1. Basis of preparation (unaudited)
The financial information in this report relating to the 9 month periods ended
30 June 2009 and 30 June 2008, and the balance sheets at 30 June 2009 and 30
September 2008, is unaudited. This unaudited financial information does not
constitute the statutory accounts of TUI Travel PLC within the meaning of
section 240 of the Companies Act 1985.
The unaudited financial information relating to the income statement for the 9
month periods ended 30 June 2009 and 30 June 2008, and the balance sheets as at
30 June 2009 and 30 September 2008, has been prepared on the basis of the
Company's Adopted IFRSs accounting policies, which are disclosed in Note 1 of
the consolidated financial statements for the year ended 30 September 2008.
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 ('First Choice'). On a consolidated basis, TUI Tourism is
considered to be the acquirer of First Choice. The fair valuation of the First
Choice assets and liabilities acquired was finalised by 3 September 2008, being
12 months from the date of acquisition, and as a result the income statement and
segmental information for the period ended 30 June 2008 have been restated. The
restatement relates to the fair value of customer deposits at 3 September 2007
and has resulted in a reduction in turnover and an increase in loss before
taxation of GBP8m in the period to 30 June 2008 and a reduction in the taxation
credit for the same period of GBP2m.
2. Segmental information (unaudited)
Sector analysis
The Sector analysis is based on the Group's management and reporting structure.
+--------+
| 9 |
| month |
|period |
| ended |
| 30 |
| June |
| 2009 |
+--------+
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+------------+--------+
| | Mainstream Sector | | | | | | | |
+--------------+------------------------------+------------+------------+----------+--------------+------------+------------+--------+
| | Northern | Central | Western | Total | Specialist | Activity | Accommod'n | Joint | Corporate | Total |
| | | | | Mainstream | | | & | | | |
| | Region | Europe | Europe | | Sector | Sector | Destinations | Ventures | | Group |
| | | | | Sector | | | Sector | | | |
| | | | | | | | | and | | |
| | | | | | | | | Associates | | |
| | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+------------+--------+
| | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
| | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+------------+--------+
| Total | 2,687 | 3,053 | 1,671 | 7,411 | 612 | 585 | 346 | - | - | 8,954 |
| external | | | | | | | | | | |
| revenue | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+------------+--------+
| | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+------------+--------+
| Operating | (128) | (81) | (97) | (306) | 11 | (1) | (3) | 4 | (52) | (347) |
| (loss) / | | | | | | | | | | |
| profit | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+------------+--------+
| Separately | 37 | 1 | 14 | 52 | 4 | 18 | 6 | 3 | 34 | 117 |
| disclosed | | | | | | | | | | |
| items | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+------------+--------+
| Amortisation | 15 | 1 | 2 | 18 | 5 | 10 | 9 | - | - | 42 |
| of business | | | | | | | | | | |
| combination | | | | | | | | | | |
| intangibles | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+------------+--------+
| Taxation on | - | - | - | - | - | - | - | 1 | - | 1 |
| profits of | | | | | | | | | | |
| joint | | | | | | | | | | |
| ventures and | | | | | | | | | | |
| associates | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+------------+--------+
| Underlying | (76) | (79) | (81) | (236) | 20 | 27 | 12 | 8 | (18) | (187) |
| operating | | | | | | | | | | |
| (loss) / | | | | | | | | | | |
| profit | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+------------+--------+
| Net financing expenses | | | | | (64) |
+-----------------------------------------------------------------------+----------+--------------+------------+------------+--------+
| Underlying | | | | | | | | | | (251) |
| loss before | | | | | | | | | | |
| tax | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+------------+--------+
+----------------------------------------------------------------------------------+
| 9 month period ended 30 June 2008 (as restated - see note 1) |
+----------------------------------------------------------------------------------+
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+-----------+--------+
| | Mainstream Sector | | | | | | | |
+--------------+------------------------------+------------+------------+----------+--------------+------------+-----------+--------+
| | Northern | Central | Western | Total | Specialist | Activity | Accommod'n | Joint | Corporate | Total |
| | | | | Mainstream | | | & | | | |
| | Region | Europe | Europe | | Sector | Sector | Destinations | Ventures | | Group |
| | | | | Sector | | | Sector | | | |
| | | | | | | | | and | | |
| | | | | | | | | Associates | | |
| | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+-----------+--------+
| | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm | GBPm |
| | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+-----------+--------+
| Total | 2,814 | 2,914 | 1,642 | 7,370 | 563 | 542 | 295 | - | - | 8,770 |
| external | | | | | | | | | | |
| revenue | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+-----------+--------+
| | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+-----------+--------+
| Operating | (326) | (217) | (69) | (612) | 4 | 5 | 7 | 2 | (19) | (613) |
| (loss) / | | | | | | | | | | |
| profit | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+-----------+--------+
| Separately | 177 | 51 | 2 | 230 | 4 | 3 | 3 | - | 1 | 241 |
| disclosed | | | | | | | | | | |
| items | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+-----------+--------+
| Amortisation | 54 | - | 2 | 56 | 3 | 8 | 8 | - | - | 75 |
| of business | | | | | | | | | | |
| combination | | | | | | | | | | |
| intangibles | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+-----------+--------+
| Impairment | - | 112 | - | 112 | - | - | - | - | - | 112 |
| of goodwill | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+-----------+--------+
| Taxation on | - | - | - | - | - | - | - | - | - | - |
| profits of | | | | | | | | | | |
| joint | | | | | | | | | | |
| ventures and | | | | | | | | | | |
| associates | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+-----------+--------+
| Underlying | (95) | (54) | (65) | (214) | 11 | 16 | 18 | 2 | (18) | (185) |
| operating | | | | | | | | | | |
| (loss) / | | | | | | | | | | |
| profit | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+-----------+--------+
| Net financing expenses | | | | | (68) |
+-----------------------------------------------------------------------+----------+--------------+------------+-----------+--------+
| Underlying | | | | | | | | | | (253) |
| loss before | | | | | | | | | | |
| tax | | | | | | | | | | |
+--------------+----------+---------+---------+------------+------------+----------+--------------+------------+-----------+--------+
3. Separately disclosed items (unaudited)
+---------------+--------+--------+-----------+
| | | 9 | 9 |
| | | month | month |
+---------------+--------+--------+-----------+
| | | period | period |
| | | ended | ended |
+---------------+--------+--------+-----------+
| | | 30 | 30 |
| | | June | June |
+---------------+--------+--------+-----------+
| | | 2009 | 2008 |
+---------------+--------+--------+-----------+
| | | | (as |
| | | | restated) |
+---------------+--------+--------+-----------+
| | | GBPm | GBPm |
+---------------+--------+--------+-----------+
| Merger | | 69 | 106 |
| related | | | |
| integration | | | |
| costs | | | |
+---------------+--------+--------+-----------+
| Restructuring | | 30 | 16 |
| expenses | | | |
+---------------+--------+--------+-----------+
| Aircraft | | 18 | 119 |
+---------------+--------+--------+-----------+
| Total | | 117 | 241 |
+---------------+--------+--------+-----------+
Merger related integration costs
These relate primarily to the costs of integration of the UK businesses, in
particular the integration of First Choice and Thomson in the UK and the
formation of one airline and an integrated retail estate.
In the 9-month period ended 30 June 2009, GBP3m of the cost relates to asset
write downs following the acquisition and integration of the remaining 50%
shareholding in Sunshine Cruises Limited (Island Cruises) into the Thomson
Cruises fleet.
Restructuring expenses
Costs incurred in the 9-month period ended 30 June 2009 relate to restructuring
programmes which are not related to the business combination of First Choice and
the TUI Tourism businesses. The main item included here is GBP15m due to the
closure of the Sunsail Clubs in Turkey.
Costs incurred in the comparative 9-month period ended 30 June 2008 relate
primarily to restructuring programmes that were already underway prior to the
First Choice and TUI Tourism business combination.
Aircraft
Aircraft credits and costs relate to the continuing restructuring of the
aircraft fleet. Sale and leaseback profits of GBP4m have been offset by GBP22m
of costs relating to hedging of the aircraft order book, aircraft fleet advisory
fees, foreign exchange revaluation of aircraft held for sale and remaining
flight replacement costs following the collapse of Futura.
The prior period cost of GBP119m is the net result of sale and leaseback losses
of GBP105m, write-downs on aircraft held for sale of GBP19m, net financial
derivative credits of GBP10m and other costs of GBP5m.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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