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…
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 TUI has specified its medium-term profit targets. I 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.
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 Group`s 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.
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