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14 Feb 2017

BY Jennifer Morris

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Tui Group reports strong start to the financial year

Tui Group has reduced seasonal loss in its financial results for the first quarter.

Tui headquarters
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Tui Group reports strong start to the financial year

The group delivered a growth in turnover in the period, with the “seasonal Q1 loss” reduced year-on-year.

 

Including the impact of foreign exchange translation, underlying Ebita (earnings before interest, taxes, and amortization) rose by 25% to €–60.3 million.

 

Tui Group’s turnover climbed by 8.5% to €3.49 billion (previous year €3.21 billion).

 

Fritz Joussen, chief executive, Tui Group, emphasised the group’s strength “despite a challenging market environment in some destinations”.

 

He said: “A broad portfolio of group-owned hotel and cruise companies, aircraft and tour operators are gathered under the group umbrella and we operate in more than 100 countries around the globe.

 

“This gives us great flexibility and enables us to quickly remix our programme if our customers’ travel preferences change.

 

“The transformation of our business as an integrated tourism business based on own hotel and cruise brands, initiated in 2014, is really paying off.”

 

Last night Tui Group completed the sales process for its specialist division, Travelopia which was initiated in Q1 2016/17.

 

The price was based on an “enterprise value” of €381 million and equals a multiple of 14.4 times underlying Ebita of the segment.

 

“This means that the transaction creates value,” said Joussen.

 

“It also marks the next strategic step to further sharpen Tui’s profile as a vertically integrated tourism business.

 

“Tui is in an excellent state of health, and we are delivering on our promises.

 

“For the full year 2016/17, we reiterate our guidance of at least 10% growth in underlying Ebita.”

 

UK & Ireland, the Nordics, Canada and Russia benefited from a strong trading performance in UK & Ireland, Tui Group said, with volumes currently up more than 10% year-on-year.

 

The growth was driven in particular by long-haul and cruise with the launch of Tui Discovery in summer 2016.

 

The Nordics continue to operate in a challenging market environment, with lower demand for Turkey and North Africa.

 

Its result was also affected by the phasing of Tui rebrand costs. In the period under review, underlying earnings by Northern Region rose by €10 million to €-20.2 million.

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