euro adhoc: TUI AG
Earnings Forecast
Ad-hoc announcement according to § 15
WpHG (German Stock Trading Law)
Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement.
14.12.2006
Hanover, 14 December 2006. Against the background of the deterioration in earnings in 2006, in particular in the shipping division, TUI AG announces:
The Supervisory Board of TUI AG has approved the plan submitted by the Executive Board for the next few years and in this context also approved a comprehensive action plan to improve earnings in tourism. Besides measures for further growth in the airline, internet and hotel businesses, a comprehensive cost-cutting programme totalling 250 million euros by 2008 was resolved. The cost of materials will be cut by around 150 million euros, with personnel costs reduced by around 100 million euros. The plan also includes cutting around 3,600 jobs in the tourism division. The expected restructuring costs of 140 million euros will be carried in the balance sheet for 2006 to the largest extent possible.
Against the background of the currently difficult market situation in particular in the shipping division, TUI has specified its medium-term profit targets. In the shipping division, a considerable improvement in earnings is expected due to the non-recurrence of the integration costs and the onset of the synergy effects. In combination with notable volume growth, an earnings level of 400 to 500 million euros is planned for 2008. Due to the persistent pressure on margins in tourism, the Executive Board considers earnings of 450 to 550 million euros in 2008 as realistic. In the tourism division, the Executive Board considers it probable that a restatement of goodwill may be required due to the changes in earnings expectations.
At the same time, TUI has launched a new programme for a further reduction in debt and an associated reduction in capital tied up in the Group. For the shipping division, the decision was taken to sell a harbour terminal in Montréal, Canada, and several small ships owned by CP Ships, some of which have been chartered out. In addition, the divestment of real estate not required for operative purposes has been planned. The total cash potential resulting from these measures is around one billion euros. For 2008, TUI thus expects net debt of around 2.5 billion euros. Additional debt reduction potential will result from the cash flow from operating activities.
Moreover, the TUI AG Supervisory Board has authorised the Executive Board to prepare the annual financial statements for 2006 on the assumption that a dividend will not be paid. Servicing of the Groups hybrid bond will not be affected. For the 2007 financial year, a significant improvement of Group earnings is expected and in this regard dividends are assumed to be paid again.
Further details concerning the resolutions adopted at the Supervisory Board meeting will be announced on Friday, 15 December 2006, 10:00 a.m. (CET).
Address: TUI AG Karl-Wiechert-Allee 4 30625 Hanover Germany
List of stock exchanges: Berlin/Bremen, Düsseldorf, Frankfurt, Hamburg, Hannover, München, Stuttgart
ISIN codes: DE000TUAG000 DE0003659884 DE0002913894 XS0191794782 XS0191795672 XS0195307367 DE000TUAG059 XS0237431837 XS0237433700 XS0237435317 XS0237436711
End of ad-hoc notice
If we comment on forecasts or expectations in this announcement or if our statements relate to the future, these statements may be associated with known and unknown risks and uncertainties. Actual outcomes and developments may, therefore, deviate significantly from the expressed expectations and assumptions. In addition, the performance of financial markets and exchange rates as well as national and international law amendments, particularly with regard to tax regulations, may have an influence. Except as provided by law, the company assumes no obligation to update future statements.
end of announcement euro adhoc 14.12.2006 21:55:26
Further inquiry note:
Björn Beroleit, phone +49 (0)511 - 566 1310
Nicola Gehrt, phone +49 (0)511 - 566 1435
Branche: Transport
ISIN: DE000TUAG000
WKN: TUAG00
Index: DAX, CDAX, HDAX, Prime All Share
Börsen: Frankfurter Wertpapierbörse / official dealing/prime standard
Börse Berlin-Bremen / official dealing
Hamburger Wertpapierbörse / official dealing
Baden-Württembergische Wertpapierbörse / official dealing
Börse Düsseldorf / official dealing
Niedersächsische Börse zu Hannover / official dealing
Bayerische Börse / official dealing