Print Preview : Financial year 2001 became a record year for Preussag

Financial year 2001 became a record year for Preussag
The financial year 2001 was the most successful financial year in Preussag<.>`s history: at Euro 811 million, the results by divisions exceeded that of the 1999/2000 financial year by Euro 64 million (plus nine per cent). The Group annual profit (after tax) rose by Euro eight million to Euro 411 million despite an increase in goodwill amortisation associated with acquisitions. Consolidated turnover rose from Euro 21.9 billion to Euro 22.4 billion.

We made another big step forward in the 2001 financial year on our way to becoming a services group. 2001 was also a test year for the integrated business model of the tourism division. The results confirm that we are pursuing the correct strategy, said executive board chairman Dr. Michael Frenzel at today`s accounts press conference in Hanover.

Tourism results at record level

Preussag consolidated its leading position in the European tourism market through organic growth and selected acquisitions and partnerships. Despite the events of 11 September, the tourism division finished the year very successfully. This is highlighted by the approx. 25 per cent increase in profit to Euro 530 million. With a return on equity of 32 per cent, tourism performance was at record level.

The Central Europe segment which includes the Central European tour operating business, hotel holdings and destination services, made the main contribution to profits with Euro 350 million (plus 30 per cent). The Northern Europe segment in its first full financial year within the Group generated a very good result with Euro 180 million, and this included Thomson Holidays posting the best performance in its corporate history.

Excellent performance by logistics and energy

The logistics division concentrated within Hapag-Lloyd AG emulated the successful development of the previous years. At Euro 308 million, this division produced an excellent performance. And the energy segment with Euro 338 million also produced an outstanding performance. Because of the difficult situation in the German construction industry and the effects of the stagnating US-American economy, the building engineering and trading segments produced much worse results than in the 1999/2000 financial year.

Tourism with strong growth in turnover

Consolidated turnover rose by three per cent to Euro 22.4 billion although the development varied according to segment. At 21 per cent to Euro 12.8 billion, the strongest growth was posted by the core tourism division. The logistics division boosted its turnover by around eight per cent to Euro 3.9 billion in the face of difficult market conditions. The industry division with the energy, building engineering and trading segments contributed Euro 5.6 billion to Group turnover, down 26 per cent year-on-year.

Changes in employee structure

The employee structure in the 2001 financial year was primarily determined by the further growth of tourism, and the divestiture programme involving the building engineering and energy segments. Overall, the workforce reduced by around 10 per cent to 69,550 at balance sheet date. With the increase in the proportion of staff involved in tourism to over 70 per cent, the number of employees working for non-German Group companies also rose to 45,656 or 66 per cent of the Group workforce.

Divestiture programme progressing satisfactorily

Industrial activities were scaled down by wide-ranging divestitures in the building engineering and energy segments. Around two thirds of the expected liquidity inflow from divestitures has therefore already been contractually concluded and some has already been realised. This enabled net debt to be reduced by around 11 per cent to Euro 6.2 billion compared to last year`s balance sheet date. Indebtedness will be reduced further by a significant amount in the coming months.

Market position as leading tourism group further expanded

Preussag further expanded its position as the leading European tourism group through targeted acquisitions in new source markets such as the ten per cent stake in the holding of the Italian Alpitour group and the acquisition of 51 per cent of the Austrian Magic Life group. And the establishment of central airline management, central hotel purchasing and a restructured destination services organisation created the platform for the even better harnessing of economies of scale. In addition, these organisational measures also helped to durably optimise internal cost structures.

Group to be renamed TUI AG

The successful implementation of the new international brand concept has made World of TUI a central point of orientation for customers, employees and business partners. The `World of TUI` is an ideal platform for future growth, regionally as well as in new business areas. We also want to more clearly highlight to the financial world the orientation and resources of our Group, and therefore intend to rename the Group `TUI AG`. The first German tourism shares will therefore be TUI shares, said the executive board chairman referring to the plans for the annual general meeting in June.

Modest outlook for the ongoing financial year

The first months of the new financial year were clearly affected by the weak economic environment. The tangible feeling of insecurity amongst consumers in the German market has an impact on the profit forecasts of tourism in particular. Logistics and energy will also not be able to match the outstanding performance of the previous year. Improvements in central operations and the shedding of industrial activities, which still had a negative impact on the results in 2001, create an opportunity for the performance of the divisions in 2002 overall to approach the previous year`s level.

Differential development of tourism markets

The development of the tourism sector is marked by the drop in bookings of around 11 per cent in the winter season which ends shortly. Despite the difficult situation overall, market shares have been boosted in crucial submarkets against the background of generally stable price levels. The initial analysis of the winter season indicates that TUI Deutschland has won market shares.

Advance bookings for the summer season show a clear recovery on a weekly basis but are still down for the Group as a whole by 8.5 per cent. A look at each European market reveals a mixed picture: the UK market has developed considerably better than the German market. In Germany, bookings for the summer season are currently down by around 13 per cent - a figure that is the same or better than the market trend. Because weeks with strong bookings are still expected to come, this decline is forecast to shrink in coming weeks, although it is not prognosed to be recouped entirely. The reduction in the market in Germany is predicted to be between six and eight per cent, although TUI will do better. The year-on-year drop in booked turnover in the UK is currently only slightly less than four per cent. It is possible that Thomson`s summer business will continue to improve.

The Group-wide performance-preservation programme with a total volume of almost Euro 160 million, higher than originally announced, will be rigorously implemented in 2002.

The Group is therefore currently profiting considerably from its European positioning, said Frenzel assessing the outlook for 2002. We are in an excellent position with our `World of TUI` brand which has gained high levels of awareness within a very short period of time. We are optimising our structures on the basis of our performance-preservation and cost-cutting programmes, are further expanding our market positions, and will emerge revitalised from the current temporary slowdown in growth. Vicky Karantzavelou - Friday, May 03, 2002