TUI AG: Pre-Close Trading Update
24 September 2019
Pre-Close Trading Update
Prior to entering its close period ahead of reporting its full year results for the twelve months ending 30 September 2019 on 12 December 2019, TUI Group announces the following update on current trading.
Chief Executive of TUI Group,
"Our vertically integrated business model proves to be resilient, even in this challenging market environment. Our Holiday Experiences business continues to deliver strong results. Meanwhile, our Markets & Airlines business faces a number of ongoing external challenges such as the grounding of the 737 MAX aircraft, airline overcapacities and continued Brexit uncertainty. The Summer 2019 season is however closing out in line with expectations and we therefore reiterate FY19 underlying EBITA guidance stated in our ad hoc announcement of
"These external challenges will continue in FY20 - therefore, we will focus on becoming more cost competitive in our Markets & Airlines business to protect and extend our market share where possible. Going forward, our two key digital strategic initiatives will deliver greater customer reach in new markets complementary to our existing markets, through our new GDN-OTA2 platform as well in our Destination Experiences markets through our Musement platform, driving further demand to our own Holiday Experiences businesses. TUI is well-positioned to become an integrated digital tourism platform business."
1 Based on constant currency: FY19 comparative rebased in
2 Global distribution network (GDN) as TUI's new
In Cruises, we successfully launched the new
In Destination Experiences, we expect to see strong customer growth in the final quarter, driven by both underlying growth and the acquisitions of Destination Management and Musement. This year has seen the successful integration of both companies and together with the planned expansion of both the product portfolio and 3rd party distribution, we have created a solid base for future growth in this attractive and fast growing market.
In Markets & Airlines, as expected, the most recent trading weeks since our Q3 update on 13 August have been stronger in both bookings and average selling price, resulting in Summer 20193 customer bookings flat on prior year and ASP up 1%, with customer volumes to
Winter 2019/20 programme3 (which is low season for most markets) is at an early stage, with around one third of the programme sold, broadly in line with prior year. The weaker demand environment as previously discussed remains evident and we are seeing bookings down in line with our capacity reduction of 2%, with average selling price up 4% on prior year.
Resumption of the 737 MAX remains subject to the clearance decision of the civil aviation authorities. To ensure we are sufficiently covered for peak periods during our Winter 2019/20 programme, we anticipate a smaller level of aircraft replacement costs to be incurred, compared to Summer 2019.
3 These statistics are up to 15
Foreign Exchange & Fuel
Our strategy of hedging the majority of our currency and jet fuel requirements for future seasons 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 for Markets & Airlines, which account for over 90% of our Group currency and fuel exposure.
At our Q3 update we indicated approximately EUR15m positive translation impact on underlying EBITA compared with rates prevailing in the prior year. We now expect a positive impact of approximately EUR11m in total from foreign exchange translation on the FY19 underlying EBITA result, subject to further movements in exchange rates to 30 September 2019.
Expected development and guidance
FY19 is closing out in line with our expectations and we therefore reiterate FY19 underlying EBITA guidance stated in our ad hoc announcement of
As articulated, the ongoing external challenges we have seen in FY19 are likely to persist into FY20. This coming year will see us focus on becoming more cost competitive, selectively grow our Holiday Experiences business and scale up our digital platforms in new markets and Destination Experiences. Delivering on our four strategic initiatives will ensure we remain well-positioned to benefit in this changing environment and enable sustained growth going forward.
Annual Report 2019
Analyst & Investor Enquiries
ave further increased our marketdemand for holidays, with volumes up x% in Q1. In addition, we have further increased our marketave further increased our marketdemand for holidays, with volumes up x% in Q1. In addition, we have further increased our market
|OAM Categories:||3.1. Additional regulated information required to be disclosed under the laws of a Member State|
|EQS News ID:||878443|
|End of Announcement|
Quick facts: TUI AG
Market Cap: £2.14 billion
NO INVESTMENT ADVICE
The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...FOR OUR FULL DISCLAIMER CLICK HERE