TIDMTT.
RNS Number : 5969O
TUI Travel PLC
08 August 2014
8 August 2014
TUI Travel PLC
("TUI Travel")
Third Quarter Results ended 30 June 2014 and Interim Management
Statement
DELIVERING GROWTH AND OUT-PERFORMING THE MARKET
-- Strong Q3 result with underlying operating profit up 21% to GBP92m
on a like-for-like basis(1)
-- Remain pleased with progress in Summer trading - higher average selling
prices across Mainstream
-- Delivering against our growth levers
-- Flexible and resilient business model means that we are delivering
sustainable, profitable growth and out-performing the market
Peter Long, Chief Executive of TUI Travel PLC, commented:
"We are pleased to have delivered another strong performance
this quarter across the Group with a 21% increase in underlying
operating profit(2) . Demand for our unique holidays, which now
account for over 70% of Summer sales, has continued to grow, as
have bookings made online. Our One Mainstream structure, led by
Johan Lundgren, continues to yield tangible benefits across a
number of areas as we drive the organisation to deliver a
performance similar to that achieved by our UK business. We remain
pleased with progress in Summer trading, despite strong
comparatives, and are achieving higher average selling prices
across Mainstream overall.
"As the trading environment in the commodity space has become
more competitive and airline capacity continues to increase, our
flexible and resilient business model - focused on unique holidays
and our relationship with the customer throughout their whole
holiday experience - enables us to deliver sustainable, profitable
growth and out-perform the market."
Highlights
-- Strong Q3 performance across the Group
* Underlying operating profit increased by GBP36m to
GBP112m (Q3 2013: GBP76m). On a like-for-like
basis(1) , underlying operating profit improved by
21% to GBP92m.
* UK and Germany underlying operating profit up by 17%
and 16% respectively (excluding Easter and on a
constant currency basis(1) ).
-- Remain pleased with progress in Summer 2014 trading
* Mainstream bookings performance in line with previous
trading update, with improvements in the UK and
Nordics.
* Pleased with yield performance, with higher average
selling prices across Mainstream overall.
* 88% sold to date.
-- Delivering against our growth levers
* Further growth in Mainstream unique holidays and
online bookings.
* One Mainstream structure, led by Johan Lundgren, is
firmly in place and yielding tangible benefits across
multiple areas.
* Strong Q3 performance by Specialist & Activity -
underlying operating profit doubled on a
like-for-like basis(1) .
* Accommodation Wholesaler continues to perform very
well with Summer 2014 TTV up 16%.
-- Pleased with Winter 2014/15 trading; strong start to UK trading for
Summer 2015
(1) Like-for-like basis is at constant currency rates and
excludes the estimated timing impact of Easter (calculated by the
change in margin in the weeks when the Easter holidays fall,
compared to the same weeks in 2013). Constant currency basis
assumes that constant foreign exchange translation rates are
applied to the underlying operating result in the current and prior
year
(2) Underlying operating profit/loss excludes separately
disclosed items, acquisition related expenses, impairment of
goodwill and interest and taxation of results of the Group's joint
ventures and associates.
Investor and Analyst Conference Call
A conference call for investors and analysts will take place
today at 8.15am (BST). The dial-in arrangements for the call are as
follows:
Telephone: +44 (0)1452 555 566
Participant Code: 8363 3804
A presentation to accompany the conference call will be made
available at 8.00am (BST) via our corporate website:
http://www.tuitravelplc.com
A recording of the conference call will be available for 30 days
on:
Telephone: +44 (0)1452 550 000
Participant Code: 8363 3804
Statement of proposed merger of TUI Travel and TUI AG
On 27 June 2014 the Independent Directors of TUI Travel PLC and
the Executive Board of TUI AG announced that they had reached
agreement in principle on the key terms of a possible all-share
nil-premium merger of TUI Travel PLC and TUI AG. Following the
extension granted to TUI AG by the UK Takeover Panel on 25 July,
TUI AG must, by no later than 5.00 pm (London time) on 19 September
2014, either announce a firm intention to put forward a merger
proposal or announce that it does not intend to put forward such a
merger proposal. Further announcements will be made as
required.
Enquiries:
Analysts & Investors
Andy Long, Director of Strategy & Investor Tel: +44 (0)1293 645 831
Relations
Tej Randhawa, Investor Relations Manager Tel: +44 (0)1293 645 829
Sarah Coomes, Investor Relations Manager Tel: +44 (0)1293 645 827
Press
Lesley Allan, Corporate Communications Director Tel: +44 (0)1293 645 790
Mike Ward, External Communications Manager Tel: +44 (0)1293 645 776
Michael Sandler (Hudson Sandler) Tel: +44 (0)20 7796 4133
DELIVERING AGAINST OUR GROWTH LEVERS
We continue to deliver against our growth levers, supporting our
ongoing profit growth roadmap, against a backdrop of increased
capacity in the European leisure travel market.
1. Delivering Mainstream Growth
1.1 Unique holidays only available from TUI Travel
Sales of unique holidays account for 71% of Summer 2014 bookings
to date, up three percentage points on prior year. Unique holidays
result in higher levels of customer satisfaction and repeat
bookings, placing us in a strong position versus the commodity
competition. Our unique holiday offering also gives us control over
the end-to-end customer experience and an opportunity to interact
with our customers throughout their journey. Other leisure travel
providers, such as airlines and online travel agents, do not
benefit from this level of interaction.
1.2 Distributed directly to the customer - growth from
online
Sales of Summer 2014 holidays direct to the customer account for
67% of bookings, up two percentage points on prior year. The growth
in direct distribution is driven by the online channel, up three
percentage points to 36% of sales for Summer 2014. Our customers
are increasingly seeing the benefits of our digital transformation
strategy, which is in turn driving conversion improvements from our
new web platforms. The shift to online also drives significant
margin improvement as distribution costs decrease.
1.3 Leveraging our scale
We have a significant position of strength as a result of our
market-leading scale. Our One Mainstream structure, led by Johan
Lundgren, is firmly in place and yielding tangible benefits across
multiple areas, including purchasing, holiday concept development,
distribution and online, digital transformation, airline and
in-resort services.
2. Organic Specialist & Activity growth
The Specialist & Activity Sector reported a significantly
improved underlying operating profit for Q3 14 of GBP14m (Q3 13:
GBP6m). The restructuring of this Sector has enabled better
management of business performance and the realisation of
efficiency savings.
3. Leveraging our global leadership position in Accommodation
Wholesaler through growth in existing markets
Accommodation Wholesaler continues to consolidate its global
leadership position, with Summer 2014 TTV up 16% on prior year.
This is being driven by strong trading across all source
markets.
4. Investing in Accommodation OTA
In Accommodation OTA (online travel agent) we continue to build
on our strong brand positioning of LateRooms.com in the UK and
expand in the emerging markets across Asia through AsiaRooms.com
and in Brazil with MalaPronta, Brazil's fourth largest
accommodation-only OTA.
5. Focus on free cash flow generation, ROIC and operational efficiency
Improving the Group's profitability and free cash flow delivers
superior returns on investment. This improvement allows us to
invest further in the future of our business.
Our business improvement programme, which is nearly complete,
delivered a further GBP3m of efficiency savings in the quarter.
This is just one element of our focus on operational efficiency and
we continue to drive efficiency improvements across our
businesses.
CURRENT TRADING
Summer 2014
Overall, we remain pleased with progress in Summer 2014 trading
with 88% of the programme sold to date. Mainstream booking
performance is in line with our previous trading update and average
selling prices are up 1%. We continue to see growth in unique
holidays, which account for 71% of Mainstream bookings, up three
percentage points on prior year. We are also very pleased with the
growth in Mainstream online bookings, which account for 36% of all
Summer bookings, up three percentage points on prior year.
Current Trading(1) Summer 2014
YoY variation% Total Total Total Programme sold (%)
ASP(2) Sales(2) Customers(2)
MAINSTREAM
UK +2 +1 -1 87%
Nordics -1 -4 -4 92%
Germany Flat -1 -1 86%
France tour operators +3 -10 -13 88%
Other(3) +1 Flat Flat 91%
Total Mainstream +1 -1 -2 88%
Accommodation Wholesaler(4) Flat +16 +15 N/A
(1) These statistics are up to 3 August 2014 and are shown on a
constant currency basis
(2) These statistics relate to all customers whether risk or non
risk
(3) Other includes Austria, Belgium, Netherlands, Poland and
Switzerland
(4) These statistics refer to online accommodation businesses
only; Sales refer to total transaction value (TTV) and customers
refers to roomnights
In the UK, bookings are currently down 1% (down 3% at the last
trading update) despite strong prior year comparatives.
Comparatives in Q4 are not as strong due to the effect of unrest in
Egypt in August and September last year. There has been an
increased level of capacity in the wider market this year,
particularly around sales of commodity product, however, our unique
product offering puts us in a strong position relative to our
competitors. Sales of unique holidays account for 84% of holidays
sold to date, up one percentage point on prior year. This Summer
has seen the successful launch of our latest Sensatori unit in
Jamaica and further expansion of other unique concepts. Couples,
Holiday Village and Splashworld volumes are up significantly on
prior year. Growth destinations include Greece, Ibiza and, on the
back of expanded long-haul capacity from our 787s, Jamaica, Mexico
and Dominican Republic.
We are delighted with the continued progress in our digital
transformation - online bookings account for 51% of Summer holidays
sold to date, up four percentage points on prior year. We are also
pleased with yield performance, with average selling prices up 2%,
reflecting the change in mix towards more unique holidays. To date,
87% of the UK programme has been sold.
In the Nordics, reflecting the competitive trading environment,
bookings are down 4% in line with capacity reductions (bookings
were down 7% at the last trading update), with slightly lower
average selling prices. Unique holidays account for 95% of sales,
up one percentage point on prior year, and online sales account for
73% of bookings, up four percentage points on prior year. To date,
92% of the programme has been sold.
In Germany, bookings are down slightly compared with prior year,
however, in recent weeks we have seen a significant increase in
bookings. Average selling prices for packages are up 1% but are
flat overall as a result of mix changes, with an increase in
lower-priced overland sales since prior year. Unique holidays
continue to grow, accounting for 54% of bookings, up two percentage
points on prior year. Our Best Family, Robinson and Magic Life
brands are performing particularly well. Online sales continue to
expand in Germany, up 18% compared with prior year. To date 86% of
the programme has been sold.
In France, bookings are down by 13%, in line with capacity
reductions. We are pleased with the 3% increase in average selling
prices, achieved in spite of the continued challenging trading
environment. As well as further reducing our overall capacity we
have continued to re-model our programme, adding new destinations
such as Lanzarote, Fuerteventura, Menorca and Kos. We have also
implemented a product improvement plan in our Clubs, to improve the
offering in underperforming units, including free swimming lessons
for all children. To date 88% of the programme has been sold.
In Accommodation Wholesaler, TTV is up 16%, with growth driven
by all source markets. We continue to see particularly strong
growth in demand for destinations in Latin America and Asia.
In Specialist & Activity, we are pleased with sales with
continued good performances by the North American specialists,
Marine and Adventure businesses.
Winter 2014/15 and Summer 2015
At this early stage, we are pleased with Winter trading. In the
UK, where 23% of the programme has been sold, bookings are up 3%
and average selling prices are up 3%. We are increasing capacity in
selected destinations such as Jamaica and Mexico where we see
growing demand, enabled by the expansion of our 787 fleet. Sales of
unique holidays account for 83% of bookings, up three percentage
points on prior year. We are also pleased with a strong start to UK
trading for Summer 2015.
In the Nordics, where 29% of the programme has been sold, we
have reduced capacity in order to strengthen our competitive
position in what continues to be a challenging trading environment.
Bookings are down 8%, in line with our capacity reductions, and we
are encouraged by average selling prices being up 3% year-on-year.
Sales of unique holidays account for 93% of bookings, up one
percentage point on prior year.
FUEL/FOREIGN EXCHANGE
Our strategy of hedging the majority of our fuel and currency
requirements for future seasons, as detailed below, remains
unchanged. This gives us certainty of costs when planning capacity
and pricing. The following table shows the percentage of our
forecast requirement that is currently hedged for Euros, US Dollars
and jet fuel.
Summer 2014 Winter 2014/15 Summer 2015
Euro 96% 80% 41%
US Dollars 95% 81% 58%
Jet Fuel 91% 79% 52%
As at 1 August 2014
--------------------- ------------ --------------- ------------
Foreign exchange translation reduced the underlying operating
result by GBP1m in the first nine months of the year. Based on the
prior year average Q4 rate of 1.17, a one cent movement in the
Euro/Sterling rate impacts prior year Q4 underlying operating
profit by circa GBP3.2m.
OTHER RECENT DEVELOPMENTS
During July, we agreed with the Trustees of our UK defined
benefit pension schemes to make available to the members the option
on retirement to exchange non-statutory future increases in their
pension with a higher annual pension which increases only in line
with inflation. The change will generate a one-off reduction in the
pension liabilities of circa GBP28m to GBP32m and, consistent with
the similar pension transaction which concluded in the UK in the
first half of this year, this credit will be included within
separately disclosed items.
OUTLOOK
We have delivered a strong result in the year-to-date. Unique
holidays and online bookings have continued to grow. We remain
pleased with Summer trading, despite strong comparatives.
Specialist & Activity profits have improved significantly since
the prior year, demonstrating the turnaround that has taken place
in this Sector. We are also continuing to see strong trading in
Accommodation Wholesaler.
As the trading environment in the commodity space has become
more competitive and airline capacity continues to increase, our
flexible and resilient business model - focused on unique holidays
and our relationship with the customer throughout their whole
holiday experience - enables us to deliver sustainable, profitable
growth and out-perform the market.
BUSINESS AND FINANCIAL REVIEW
Group Performance
Third quarter ended 30 June 2014
Underlying results(1)
GBPm Q3 14 Q3 13 Change%
Revenue 3,797 3,860 -2%
Operating profit 112 76 +47%
Operating profit on a like-for-like basis(2) 92 76 +21%
---------------------------------------------- ------- ------- --------
9-month period ended 30 June 2014
Underlying results(1)
GBPm 9M 14 9M 13 Change%
Revenue 8,987 9,257 -3%
Operating loss (186) (213) +13%
Operating loss at constant currency(3) (185) (213) +13%
---------------------------------------- ------- ------- --------
(1) Underlying operating profit/loss excludes separately
disclosed items, acquisition related expenses, impairment of
goodwill and interest and taxation of results of the Group's joint
ventures and associates
(2) Like-for-like basis is at constant currency rates and
excluding the estimated timing impact of Easter (calculated by the
change in margin in the weeks when the Easter holidays fall,
compared to the same weeks in 2013).
(3) Constant currency basis assumes that constant foreign
exchange translation rates are applied to the underlying operating
result in the current and prior year
In the third quarter Group revenue decreased by 2% to GBP3,797m
(Q3 2013: GBP3,860m). Foreign exchange translation reduced revenue
by 4%, driven mostly by the weaker Euro. This was partly offset by
the benefit of the later timing of Easter.
The Group's underlying operating profit increased to GBP112m (Q3
2013: GBP76m). This included an estimated GBP23m positive impact
from the later timing of Easter. On a like-for-like basis,
excluding the timing impact of Easter and foreign exchange
translation, underlying operating profit increased by GBP16m or
21%.
The main drivers of the year-on-year improvement in underlying
operating profit were:
GBPm Q3 9M
Q3 13 underlying operating profit/(loss) 76 (213)
Trading 13 17
Business improvement 3 11
Q3 14 underlying operating profit/(loss) at constant currency excluding estimated timing impact
of Easter 92 (185)
Easter (1) 23 -
FX translation (3) (1)
---- ------
Q3 14 underlying operating profit/(loss) 112 (186)
----
1 The impact of Easter is estimated by calculating the change in
margin in the weeks when the Easter holidays fall, compared to the
same weeks in 2013.
Quarterly Segmental Performance
Segmental performance is based on underlying financial
information (which excludes certain items, including separately
disclosed items and acquisition related expenses).
Total Mainstream and Emerging Markets A&D Specialist Central Total Group
Customers ('000)
Q3 14 5,458 - 387 - -
Q3 13 5,449 - 389 - -
Change % Flat - -1% - -
Revenue (GBPm)
Q3 14 3,251 230 316 - 3,797
Q3 13 3,320 210 330 - 3,860
Change % -2% +10% -4% - -2%
Underlying operating profit/ (loss) (GBPm) (1)
Q3 14 85 19 14 (6) 112
Q3 13 59 18 6 (7) 76
Change % +44% +6% +133% +14% +47%
------------------ -------------------------------------- -------- ----------- ----------- ------------
(1) Underlying operating profit/loss excludes separately
disclosed items, acquisition related expenses, impairment of
goodwill and interest and taxation of results of the Group's joint
ventures and associates
Mainstream and Emerging Markets
Underlying operating profit increased by GBP26m to GBP85m. This
included an estimated GBP18m benefit from the timing of Easter
offset by GBP1m adverse impact from foreign exchange
translation.
In the UK we delivered a 17% increase in underlying operating
profit (excluding the timing of Easter), despite last year's strong
comparatives and a less benign capacity environment. We have
continued to deliver efficiency savings, in particular in the
airline, with reduced engineering and handling costs. In addition,
the UK business delivered a further GBP1m of efficiency savings
towards the business improvement programme in the period. We
continued to see strong demand for unique holidays, accounting for
86% of departures in Q3, up one percentage point. We are also very
pleased with our online bookings performance - the online channel
accounted for 49% of all bookings during Q3, up three percentage
points on prior year.
The Nordic region result was slightly lower than prior year on a
like-for-like basis*. We have partially mitigated the impact of the
challenging trading environment through a rigorous focus on
operational efficiency. Unique holidays accounted for 95% of
departures in the quarter, broadly in line with prior year. Online
share improved by three percentage points to 72%.
In Germany we delivered a 16% increase in like-for-like*
underlying operating profit (excluding the timing of Easter and on
a constant currency basis), reflecting the success of our ongoing
journey to improve operating margin in this source market. We have
continued to drive operational efficiency whilst focusing on
expanding our unique holidays offering and driving direct
distribution. Unique holidays accounted for 54% of departures in
the quarter, up two percentage points over prior year (which has
been restated to include 1-2-Fly). Online bookings accounted for
12% of departures in the quarter, up three percentage points over
prior year.
France delivered a further reduction in operating loss in the
quarter on a like-for-like* basis. We have continued to refocus our
tour operator programme in line with demand, reducing our exposure
to North African destinations. We are continuing to reduce
overheads, rationalise the retail estate, reduce the level of third
party commissions and increase direct online sales. The tour
operator delivered GBP1m of efficiency savings towards the business
improvement programme in the quarter. In addition, the further
restructuring announced at the end of the 2013 reduced costs by
GBP3m.
The Other source markets delivered a broadly flat result
year-on-year, including a strong performance by Netherlands.
Emerging Markets delivered a flat result year-on-year, reflecting
the ongoing challenging trading environment for the tour operators
included here.
* Like-for-like basis is at constant currency rates and
excluding the estimated timing impact of Easter
Accommodation & Destinations (A&D) Sector
The A&D Sector reported underlying operating profit of
GBP19m (Q3 13: GBP18m). This included an estimated GBP2m benefit
from the later timing of Easter and GBP1m adverse impact from
foreign exchange translation. We continue to grow TTV and room
nights for Accommodation Wholesaler with a focus on expansion in
the Americas, Asia and Africa. In Accommodation OTA we remain
focused on building on our strong brand positioning of
LateRooms.com in the UK, and expanding in the emerging markets
through AsiaRooms.com and MalaPronta.
Specialist & Activity Sector
The Specialist & Activity Sector reported a significantly
improved underlying operating profit of GBP14m (Q3 13: GBP6m). This
included an estimated GBP3m benefit from the later timing of Easter
and GBP1m adverse impact from foreign exchange translation. The
result also includes GBP1m delivery of further business
improvement.
The restructuring of this Sector has enabled better management
of business performance and the realisation of efficiency savings.
The Marine and Adventure divisions have benefitted from improved
trading, and the Sports division has also benefitted from the
timing of events, including the FIFA World Cup.
Separately Disclosed Items
Separately Disclosed Items (SDIs) in the quarter amount to a
charge of GBP45m. During the quarter advice was taken on the VAT
position of Hotelbeds Product SLU, registered in Spain and located
in the Canary Islands. Given the stricter interpretation of VAT
regulations in Spain relating to businesses operating in the Canary
Islands, the advice received was to regularise the VAT position.
Therefore during the quarter additional VAT payments of GBP32m were
made, of which GBP28m related to years prior to the current
financial year and so this element is included within SDIs. Further
payments of circa GBP16m are expected to be made later this
financial year and have been accrued for accordingly.
APPENDIX 1
Part A
PROFIT ESTIMATE
Under the City Code on Takeovers and Mergers (the "Code") the
following results for the third quarter ended 30 June 2014 are
treated as a profit estimate (the "Profit Estimate").
Third quarter ended 30 June 2014
Underlying results(1)
GBPm Q3 14
Operating profit 112
Operating profit excluding estimated Easter(2) timing
impact at constant currency(3) 92
------------------------------------------------------- ----------------------
(1) Underlying operating profit/loss excludes separately
disclosed items, acquisition related expenses, impairment of
goodwill and interest and taxation of results of the Group's joint
ventures and associates
(2) The impact of Easter is estimated by calculating the change
in margin in the weeks when the Easter holidays fall, compared to
the same weeks in 2013.
(3) Constant currency basis assumes that constant foreign
exchange translation rates are applied to the underlying operating
result in the current and prior year
Notes
The Profit Estimate is based on the unaudited management
accounts for the three months ended 30 June 2014 and has been
prepared on the basis of the accounting policies to be used in the
FY14 Annual Accounts.
Reports
As required by Rule 28.1(a) of the Code, PricewaterhouseCoopers
LLP, as reporting accountants to TUI Travel, have provided a report
stating that, in their opinion, the Profit Estimate has been
properly compiled on the basis stated and the basis of accounting
used is consistent with the accounting policies of the Group. In
addition Lazard & Co. Limited ("Lazard"), as financial adviser
to the Independent Directors of TUI Travel, has provided a report
stating that, in its opinion solely for the purpose of Rule
28.1(a)(ii) of the Code and subject to the terms of its reports,
the Profit Estimate, for which the Independent Directors of TUI
Travel are solely responsible, has been prepared with due care and
consideration.
Copies of these reports are included below. Each of
PricewaterhouseCoopers LLP and Lazard has given and not withdrawn
its consent to the publication of its report in the form and
context in which it is included.
Part B
Report from PricewaterhouseCoopers LLP
The Independent Directors
TUI Travel PLC
TUI Travel House
Crawley Business Quarter
Fleming Way
Crawley
West Sussex
RH10 9QL
Lazard & Co., Limited
50 Stratton Street
London
W1J 8LL
(the "Financial Adviser")
8 August 2014
Dear Sirs
TUI Travel PLC
We report on the profit estimate made by TUI Travel PLC (the
"Company") and its subsidiaries (together the "Group") comprising
the statement of underlying operating profit and underlying
operating profit excluding estimated Easter timing impact at
constant currency for the third quarter ended 30 June 2014 (the
"Profit Estimate"). The Profit Estimate and the basis on which it
is prepared is set out in Appendix 1 Part A of the announcement of
Third Quarter Results ended 30 June 2014 issued by the Company
dated 8 August 2014 (the "Announcement").
This report is required by Rule 28.1(a)(i) of the City Code on
Takeovers and Mergers issued by the Panel on Takeovers and Mergers
(the "City Code") and is given for the purpose of complying with
that rule and for no other purpose. Accordingly, we assume no
responsibility in respect of this report to TUI AG (the "Offeror")
or any other person connected to, or acting in concert with, the
Offeror or to any other person who is seeking or may in future seek
to acquire control of the Company (an "Alternative Offeror") or to
any other person connected to or acting in concert with an
Alternative Offeror.
Responsibilities
It is the responsibility of the independent directors of the
Company (the "Independent Directors") to prepare the Profit
Estimate in accordance with the requirements of the City Code. In
preparing the Profit Estimate the Independent Directors are
responsible for correcting errors that they have identified which
may have arisen in unaudited financial results and unaudited
management accounts used as the basis of preparation for the Profit
Estimate.
It is our responsibility to form an opinion as required by Rule
28.1(a)(i) of the City Code as to the proper compilation of the
Profit Estimate and to report that opinion to you.
Save for any responsibility which we may have to those persons
to whom this report is expressly addressed and for any
responsibility arising under Rule 28.1(a)(i) of the City Code to
any person as and to the extent therein provided, to the fullest
extent permitted by law we do not assume any responsibility and
will not accept any liability to any other person for any loss
suffered by any such other person as a result of, arising out of,
or in connection with this report or our statement, required by and
given solely for the purposes of complying with Rule 23.3(b) of the
City Code, consenting to its inclusion in the Document.
Basis of Preparation of the Profit Estimate
The Profit Estimate has been prepared on the basis stated in
Appendix 1 Part A of the Announcement and is based on the unaudited
management accounts for the three months ended 30 June 2014. The
Profit Estimate is required to be presented on a basis consistent
with the accounting policies of the Group.
Basis of Opinion
We conducted our work in accordance with the Standards for
Investment Reporting issued by the Auditing Practices Board in the
United Kingdom. Our work included evaluating the basis on which the
historical financial information for the three months ended 30 June
2014 included in the Profit Estimate has been prepared and
considering whether the Profit Estimate has been accurately
computed using that information and whether the basis of accounting
used is consistent with the accounting policies of the Group.
We planned and performed our work so as to obtain the
information and explanations we considered necessary in order to
provide us with reasonable assurance that the Profit Estimate has
been properly compiled on the basis stated.
However, the Profit Estimate has not been audited. The actual
results reported, therefore, may be affected by revisions required
to accounting estimates due to changes in circumstances, the impact
of unforeseen events and the correction of errors in the management
accounts. Consequently we can express no opinion as to whether the
actual results reported will correspond to those shown in the
Profit Estimate and the difference may be material.
Our work has not been carried out in accordance with auditing
standards generally accepted in the United States of America or
auditing standards of the Public Company Accounting Oversight Board
(United States) and accordingly should not be relied upon as if it
had been carried out in accordance with those standards.
Opinion
In our opinion, the Profit Estimate has been properly compiled
on the basis stated and the basis of accounting used is consistent
with the accounting policies of the Group.
Yours faithfully
PricewaterhouseCoopers LLP
Chartered Accountants
PricewaterhouseCoopers LLP is a limited liability partnership
registered in England with registered number OC303525. The
registered office of PricewaterhouseCoopers LLP is 1 Embankment
Place, London WC2N 6RH. PricewaterhouseCoopers LLP is authorised
and regulated by the Financial Conduct Authority for designated
investment business
Part C
Report from Lazard & Co., Limited
The Independent Directors
TUI Travel PLC
TUI Travel House
Crawley Business Quarter
Fleming Way
Crawley,
West Sussex
RH10 9QL
8 August 2014
Ladies and Gentlemen,
Possible all-share nil-premium merger (the "Proposed
Combination") of TUI Travel PLC ("TUI Travel" or the "Company") and
TUI AG ("TUI AG")
We report on the profit estimate made by TUI Travel in the
announcement dated 8 August 2014, a copy of which is attached to
this letter, comprising an estimate of underlying operating profit
and underlying operating profit excluding estimated Easter timing
impact at constant currency for the third quarter ended 30 June
2014 (the "Profit Estimate") of TUI Travel and its subsidiary
undertakings (the 'Group').
We have discussed the Profit Estimate and the bases and
assumptions on which it has been prepared with you as directors of
TUI Travel, the senior management of TUI Travel and with PwC, TUI
Travel's auditors. We have assumed with your consent that the
Profit Estimate reflects the best currently available estimates and
judgments of the management of TUI Travel as to the financial
performance of TUI Travel for the period to which it relates. We
have also discussed the accounting policies and bases of
calculation for the Profit Estimate with the directors and the
senior management of TUI Travel and with PwC. We have also
considered PwC's report of today's date addressed to you and us on
this matter. You have confirmed to us that all information relevant
to the Profit Estimate has been disclosed to us.
For purposes of rendering this letter, we have, with your
consent, relied upon and assumed the accuracy and completeness of
all the financial, legal, regulatory, tax, accounting and other
information provided to, discussed with or review by, us, without
any independent verification thereof.
On the basis of the foregoing, we consider that the Profit
Estimate, for which you as directors of TUI Travel are solely
responsible, has been made with due care and consideration.
This letter is provided to you solely in connection with Rule
28.1(a)(ii) of the City Code on Takeovers and Mergers (the "Code")
and for no other purpose. We are acting exclusively as financial
adviser to the independent directors of TUI Travel and no one else
in connection with the Proposed Combination; no person other than
the independent directors of TUI Travel can rely on the contents of
this letter and, to the fullest extent permitted by law, we assume
no responsibility and will not accept any liability to any person
other than the independent directors of TUI Travel in respect of
this letter or the work undertaken by us in connection with this
letter.
This letter is not an opinion regarding, and we express no view
as to, the reasonableness or achievability of the Profit Estimate.
Instead, this letter will address solely the matters required to be
addressed by Rule 28.1(a)(ii) of the Code and does not address any
other matter; it does not address, among other things, the relative
merits of the Proposed Combination as compared to any other
transaction or business strategy, the merits of the decision by TUI
Travel to engage in the Proposed Combination, the fairness to TUI
Travel shareholders of the exchange ratio in the Proposed
Combination, or the price at which TUI Travel's shares or the
shares of TUI AG would trade at any time.
Furthermore, this letter has been prepared independent of
publication of the Profit Estimate and may not be relied on by you
in recommending that TUI Travel shareholders vote to approve the
Proposed Combination. This letter is not intended to and does not
constitute a recommendation to any shareholder as to how such
shareholder should vote or act with respect to the Proposed
Combination or any matter related thereto.
Yours faithfully,
For and on behalf of
Lazard & Co., Limited
A copy of this announcement will be available on our corporate
website at http://www.tuitravelplc.com. The content of the website
referred to in this announcement is not incorporated into and does
not form part of this announcement.
This announcement contains statements about TUI Travel PLC that
are or may be forward-looking statements. All statements other than
statements of historical facts included in this announcement may be
forward looking statements. Such forward looking statements involve
risks and uncertainties that could significantly affect expected
results and are based on certain key assumptions. Many factors
could cause actual results to differ materially from those
projected or implied in any forward looking statements, as by their
nature forward-looking statements involve known and unknown risks
and uncertainties because they relate to events and depend on
circumstances that will occur in the future. Due to such
uncertainties and risks, readers are cautioned not to place undue
reliance on such forward looking statements, which speak only as of
the date hereof. TUI Travel PLC disclaims any obligation to update
any forward looking or other statements contained herein, except as
required by applicable law or regulation. TUI Travel PLC, nor any
of its associates or directors, officers or advisers, provides any
representation, assurance or guarantee that the occurrence of the
events expressed or implied in any forward-looking statements in
this announcement will actually occur. You are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date hereof. Other than in accordance with its
legal or regulatory obligations, TUI Travel PLC is under no
obligation and TUI Travel PLC expressly disclaims any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.
This information is provided by RNS
The company news service from the London Stock Exchange
END
QRTSSEFAWFLSEDA
Grafico Azioni TUI Travel (LSE:TT.)
Storico
Da Set 2024 a Ott 2024
Grafico Azioni TUI Travel (LSE:TT.)
Storico
Da Ott 2023 a Ott 2024
