TUIAG / 3rd Quarter Results

10-Aug-2017 / 07:00 CET/CEST

Dissemination of a RegulatoryAnnouncement, transmitted by EQS Group AG. The issuer is solely responsible for the content of this announcement.

Q3 2016/17

TUIGroup - financial highlights

EUR million		Q3 2016 / 17Q3 2015 / 16 restated	Var. %	Var. % constant currency	at 9M 2016 / 17	9M 2015 / 16 restated	Var. %	Var. % at constant currency
Turnover	4,775.4	4,239.7		+ 12.6 + 16.4	11,129.2	10,389.3	+ 7.1	+11.6
1 Underlying EBITA
Northern Region	81.0	71.9		+ 12.7 + 25.9	- 57.0	- 49.0		- 16.3 - 46.0
Central Region	24.5	3.5		+ 600.0+ 597.1 - 119.2		- 107.1		- 11.3 - 11.3
Western Region	- 11.9	- 6.4		- 85.9 - 89.1	- 114.2	- 82.1		- 39.1 - 39.1
Hotels & Resorts	77.7	57.2		+ 35.8 + 31.5	200.5	153.2		+ 30.9 + 31.2
Cruises	67.1	45.0		+ 49.1 + 54.2	142.1	94.3		+ 50.7 + 56.4
Other Tourism	- 6.3	- 5.4		- 16.7 - 22.2	- 19.6	- 22.1		+ 11.3 + 31.6
Tourism	232.1	165.8		+ 40.0 + 45.2	32.6	- 12.8	n. a.	n. a.
All other segments	- 10.5	- 4.9		- 114.3 - 142.9 - 25.3		- 32.7	+ 22.6 + 6.1
TUIGroup	221.6	160.9		+ 37.7 + 42.3	7.3	- 45.5	n. a.	+ 94.7
Discontinued operations	14.2	35.5		- 60.0 - 57.7	- 1.1	13.7	n. a.	- 91.4
Total	235.8	196.4		+ 20.1 + 24.2	6.2	- 31.8	n. a.	+ 96.2
2,4 EBITA	200.2	136.9	+ 46.2		- 51.7	- 104.0	+ 50.3
4 Underlying EBITDA	317.3	237.3	+ 33.7		290.0	203.9	+ 42.2
4 EBITDA	301.9	220.1	+ 37.2		249.6	167.1	+ 49.4
Net profit / loss for the period (continuing operations)	160.6	75.9	+ 111.6		- 84.9	- 271.0	+ 68.7
4 EUR Earnings per share	0.23	0.10	+ 130.0		- 0.28	- 0.59	+ 52.5
Net capex and investments 213.3		148.0	+ 44.1		908.4	391.8	+ 131.9
Equity ratio (30.6.)3 %					16.2	13.5	+ 2.7
Net financial position (30.6.)4					234.3	- 458.6	n. a.

Net financial position (30.6.)5					-	172.4	n. a.
Employees (30.6.) 4					65,965	62,708	+ 5.2

Differences may occur due to rounding.

Due to the following changes to segmental reporting, the prior year's reference figures were restated accordingly:

Already inQ2 2016 / 17, the hotel operating company Blue Diamond Hotels and Resorts Inc., St. Michael, Barbados, previously carried in the Northern Region segment, was integrated in the hotel business and has therefore been reported within Hotels & Resorts. Moreover, the British cruise business Thomson Cruises, which had also previously been reported within the Northern Region segment, was transferred to the Cruises segment. Moreover, due to the planned disposal of a large part of the Specialist Group segment (Travelopia, carried as discontinued operation since 30 September 2016) - Crystal Ski and Thomson Lakes & Mountains were reclassified to Northern Region. The disposal of Travelopia was completed inQ3 2016 / 17.

1 In order to explain and evaluate the operating performance by the segments, EBITA adjusted for one-off effects (underlying EBITA) is presented. Underlying EBITA has been adjusted for gains / losses on disposal of investments, restructuring costs according to IAS 37, ancillary acquisition costs and conditional purchase price payments under purchase price allocations and other expenses for and income from one-off items.

2 EBITA comprises earnings before net interest result, income tax and impairment of goodwill excluding losses on container shipping and excluding the result from the measurement of interest hedges.

3 Equity divided by balance sheet total in %, variance is given in percentage points.

4 Continuing operations

5 Discontinued operations, includes Hotelbeds Group only

Consistently delivering on our growth strategy

Strong performance inQ3 with 19 % growth in like for like 1 underlying EBITA (38 % growth including Easter and foreign exchange translation)
Good demand for the rest of Summer 2017 for our hotels, cruises and holidays
Disposal of Travelopia & Hapag-Lloyd AG shares complete - proceeds will be reinvested in transforming the business and strengthening the balance sheet
Financial performance reflects success of our strategy - TUIGroup has delivered its first positive 9M underlying EBITA, as well as a significant improvement in operating cash flow
Reiterate our guidance of at least 10 % growth in underlying EBITA in 2016 / 17 1 and at least 10 % underlying EBITA CAGR to 2018 / 19 1
Strength of our integrated model and balanced portfolio of destinations leave us well placed to deliver sustainable growth into the longer term

1At constant foreign exchange rates applied in the current and prior period, based on the current Group structure and excluding timing impact of Easter (Q3 only).

Strong Q3 performance

results at a glance
EUR million	Q3 9M
Underlying EBITA 2015 / 16	180 - 57
Restatements (including Travelopia treated as discontinued operations)- 19 + 12
2 Underlying EBITA 2015 / 16 restated	161 - 45
Underlying trading	+ 24+ 48
Merger synergies	+ 5 + 15
Year on year impact of aircraft financing	+ 1 + 3
TUI fly sickness	- - 24
2 Like for like underlying EBITA 2016 / 17	191 - 3
Easter timing impact	+ 38-
Foreign exchange translation	- 7 + 10
2 Underlying EBITA 2016 / 17	222 7

2 Continuing operations

Hotels & Resorts continued to deliver growth inQ3, driven by good performances in Riu, Robinson and Blue Diamond. Occupancy increased by 3 % points to 74 %, with a 2 % increase in average revenue per bed 3
We have opened 10 new hotels since the end of the financial year 2015 / 16, bringing the total new hotel openings since merger to 28. Five further openings are scheduled this Winter for Riu, Robinson and Blue Diamond, as well as further repositionings to TUIBlue
Cruises delivered strong growth in the quarter, with the launch of Mein Schiff 6 (TUICruises) and TUIDiscovery 2 (Thomson Cruises) and a further increase in earnings at Hapag-Lloyd Cruises.Average daily rates were up across all three brands, with consistently high occupancy
Source Markets delivered a like for like increase in earnings this quarter, with a significant improvement in performance in Nordics and Germany partly offset, as expected, by the impact of currency cost inflation in the UK
Demand for our holidays remains high, with customer volumes up 7 % in the year to date and an increase in direct and online distribution to 73 % and 46 % respectively in the quarter. The TUIrebrand has been a success in Nordics and Belgium, and we are preparing for the UK launch this Autumn
We have extended further the maturity date of our EUR 1.75 billion revolving credit facility to July 2022

3 Hotels & Resorts occupancy rate figures currently exclude Blue Diamond

Details see segmental performance section on pages 5 to 8

Current trading

Summer 2017

Summer 2017 remains in line with our expectations, with good demand for our hotels, cruises and holidays.

In Hotels & Resorts, demand remains strong for Spain (including Canaries), Greece, Cape Verde, Italy, Cyprus and the Caribbean. Demand has also improved for NorthAfrica and (in recent weeks) Turkey. We added two new TUIBlue properties in Tuscany and Croatia for this Summer, which are performing in line with our expectations.

In Cruises, following the launch of TUIDiscovery 2 and Mein Schiff 6, demand remains strong as our UK and German customers continue to enjoy the wider range of itineraries on offer and our local offering.

The Source Markets' programme, which includes sales of holidays to our own and third party hotels, is 88 % sold, in line with prior year. Bookings are 4 % ahead of prior year, driven by growth in demand for Greece, Bulgaria, Croatia, Italy, Cape Verde and long haul. Customers continue to book increasingly direct and online.

In the UK, as we expected, demand for our holidays remains resilient. Bookings have remained at the same high level as prior year, despite the impact on pricing from cost inflation, in particular due to the weaker Pound Sterling. We believe that this is testament to the popularity of our holidays and to the high level of priority our customers place on them. We will continue to offer good value for money with a range of products and destinations, and remain the clear market leader.

Current trading Summer 2017 *

YoYvariance %		Total revenueTotal custormersTotalASP		Programme
				sold (%)
Northern Region	+ 8	+ 1	+ 7	88
UK	+ 7	-	+ 7	88
Memo: UK incl. Thomson Cruises	+ 9	+ 1	+ 8	88
Nordics	+ 13	+ 5	+ 8	89
Central Region	+ 10	+ 7	+ 3	86
Germany	+ 7	+ 4	+ 3	86
Western Region	+ 7	+ 3	+ 3	90
Benelux	+ 7	+ 3	+ 3	90
Total source markets	+ 8	+ 4	+ 5	88
Memo: Total source markets incl. Thomson Cruises+ 9		+ 4	+ 5	88

* These statistics are up to 30 July 2017, shown on a constant currency basis and relate to all customers whether risk or non-risk.

Future Seasons

At this early stage, trading for future seasons is in line with our expectations. In Hotels & Resorts we will continue to grow in year round destinations, with the opening of five new hotels and clubs this Winter for Riu (in Mexico), Robinson (one club in Thailand and one in Maldives) and Blue Diamond (two hotels in Dominican Republic). There will also be further repositionings to our TUI Blue brand, as we continue to simplify and enhance our customer offering.

In Cruise, growth will be driven by the first Winter of operations of our new ships, as well as the launch in Summer 2018 of the new Mein Schiff 1 inGermany and TUIExplorer (the current Mein Schiff 1) in the UK. We are pleased with the development of bookings and rates for both the new and existing fleet, with demand remaining very strong in both the UK and German markets.

In Source Markets, we are continuing to shape our programme for Winter 2017 / 18 and retain a significant degree of flexibility at this early stage when it comes to capacity planning for Summer 2018. In line with prior years, Winter 2017 / 18 is around 25 % booked. Bookings are currently up 9 % and average selling prices up 3%, with growth driven by long haul, Cape Verde and Canaries. We are looking forward to the UK rebrand, which will commence in the Autumn.

Disposal of Travelopia and Hapag-Lloyd shares

As part of strategy announced at the time of the merger, TUIGroup has been working to simplify its business model. On 15 June 2017, TUIGroup completed the disposal of Travelopia to KKR for an enterprise value of £ 325 million, equating to 14.4 times 2015 / 16 underlying EBITA or 7.7 times underlying EBITDA (pro forma basis). Following some open market disposal earlier on this year, TUI disposed of its remaining shares in Hapag-Lloyd AG on 10 July 2017. Total net proceeds from the disposal of Hapag-Lloyd AG shares were EUR 407 million.

As outlined in TUI's full year results presentation in December 2016, these disposal proceeds will be reinvested in the transformation of TUI as the world's leading integrated tourism business, focused on own hotel and cruise brands, and to further strengthen TUI's balance sheet. In this context, TUI is contemplating to structure the intended cruise ship acquisitions (currently operated as Mein Schiff 1 and Mein Schiff 2) by TUIUK from TUICruises GmbH (50 % JV with Royal Caribbean Cruises Ltd.) in 2018 and 2019 as a straight cash transaction.

Outlook

Based on the strong year to date result and trading for the remainder of Summer 2017, we reiterate our guidance of at least 10 % growth in underlying EBITA in 2016 / 17 *. In addition, we expect the following:

Turnover growth in excess of our previous guidance of around 3 %, reflecting our strong year to date performance and current trading.
Net debt as at 30 September 2017 broadly neutral *, compared with previous net debt guidance of approximately EUR 0.8

billion *, reflecting the receipt of proceeds from the Travelopia and Hapag-Lloyd AG share disposals.

Based on current foreign exchange rates, we expect approximately EUR 10 million adverse impact on underlying EBITA compared with rates prevailing in the prior year.

As we near the end of the third year following the merger with TUI Travel, we have consistently delivered on our growth strategy. The merger synergies will be delivered in full by the end of the current financial year, and we have implemented a new management structure and an integrated decision making process based on six common global platforms. With the sale of Travelopia and the shares in Hapag-Lloyd AG our non-core disposal programme has been completed and marks a significant step in our transformation as the world's leading integrated tourism business. Our financial performance already reflects the success of this transformation, with TUIGroup now having delivered its first positive 9M underlying EBITA, as well as a significant improvement in operating cash flow.

Our operational experience, scalable integrated model and balanced portfolio of destinations mean that we are well placed to deal with the challenges against the wider macroeconomic and geopolitical backdrop, and to deliver sustainable growth into the longer term. We therefore also reiterate our guidance of at least 10 % underlying EBITA CAGR to 2018 / 19 *, and will provide an update on our growth strategy at our full year results presentation in December 2017.

* At constant foreign exchange rates applied in the current and prior period, and based on the current group structure.

Consolidated earnings

Turnover
EUR million		Q3 2016 / 17Q3 2015 / 16 restated	Var. %9M 2016 / 17	9M 2015 / 16 restated	Var. %
Northern Region	1,727.8	1,660.7	+ 4.0 3,932.1	3,989.9	- 1.4
Central Region	1,557.5	1,346.3	+ 15.73,585.5	3,333.4	+ 7.6
Western Region	926.3	734.6	+ 26.12,040.3	1,650.2	+ 23.6
Hotels & Resorts	151.3	143.2	+ 5.7 451.3	409.2	+ 10.3
Cruises	214.3	171.0	+ 25.3560.2	479.9	+ 16.7
Other Tourism	145.5	143.8	+ 1.2 435.9	433.8	+ 0.5
Tourism	4,722.7	4,199.6	+ 12.511,005.3	10,296.4	+ 6.9
All other segments	52.7	40.1	+ 31.4123.9	92.9	+ 33.4
TUIGroup	4,775.4	4,239.7	+ 12.611,129.2	10,389.3	+ 7.1
TUIGroup at constant currency4,936.1		4,239.7	+ 16.411,596.0	10,389.3	+ 11.6
Discontinued operations	282.7	584.7	- 51.7 829.0	1,652.2	- 49.8
Total	5,058.1	4,824.4	+ 4.8 11,958.2	12,041.5	- 0.7

Underlying EBITA
EUR million		Q3 2016 / 17Q3 2015 / 16 restated	Var. % 9M 2016 / 17	9M 2015 / 16 restated	Var. %
Northern Region	81.0	71.9	+ 12.7 - 57.0	- 49.0	- 16.3
Central Region	24.5	3.5	+ 600.0- 119.2	- 107.1	- 11.3
Western Region	- 11.9	- 6.4	- 85.9 - 114.2	- 82.1	- 39.1
Hotels & Resorts	77.7	57.2	+ 35.8 200.5	153.2	+ 30.9
Cruises	67.1	45.0	+ 49.1 142.1	94.3	+ 50.7
Other Tourism	- 6.3	- 5.4	- 16.7 - 19.6	- 22.1	+ 11.3
Tourism	232.1	165.8	+ 40.0 32.6	- 12.8	n. a.
All other segments	- 10.5	- 4.9	- 114.3 - 25.3	- 32.7	+ 22.6
TUIGroup	221.6	160.9	+ 37.7 7.3	- 45.5	n. a.
TUIGroup at constant currency229.0		160.9	+ 42.3 - 2.4	- 45.5	+ 94.7
Discontinued operations Total	14.2 235.8	35.5 196.4	- 60.0 - 1.1 + 20.1 6.2	13.7 - 31.8	n. a. n. a.

EBITA
EUR million		Q3 2016 / 17Q3 2015 / 16 restated	Var. %9M 2016 / 17	9M 2015 / 16 restated	Var. %
Northern Region	63.8	67.2	- 5.1 - 84.3	- 64.3	- 31.1
Central Region	23.8	1.4	n. a. - 116.4	- 115.6	- 0.7
Western Region	- 12.8	- 8.8	- 45.5 - 141.6	- 88.2	- 60.5
Hotels & Resorts	77.7	56.1	+ 38.5197.7	151.3	+ 30.7
Cruises	67.1	45.0	+ 49.1142.1	94.3	+ 50.7
Other Tourism	- 6.7	- 9.8	+ 31.6- 21.6	- 29.8	+ 27.5
Tourism	212.9	151.1	+ 40.9- 24.1	- 52.3	+ 53.9
All other segments	- 12.7	- 14.2	+ 10.6- 27.6	- 51.7	+ 46.6
TUIGroup	200.2	136.9	+ 46.2- 51.7	- 104.0	+ 50.3
Discontinued operations0.3		26.0	- 98.8 - 21.9	- 45.7	+ 52.1
Total	200.5	162.9	+ 23.1- 73.6	- 149.7	+ 50.8

Northern Region

		Q3 2016 / 17Q3 2015 / 16 restated		Var. %9M 2016 / 17	9M 2015 / 16 restated	Var. %
Turnoverin EUR million	1,727.8	1,660.7		+ 4.0 3,932.1	3,989.9	- 1.4
Underlying EBITAin EUR million	81.0	71.9		+ 12.7- 57.0	- 49.0	- 16.3
Underlying EBITA at constant currencyin EUR million	90.5	71.9		+ 25.9- 71.6	- 49.0	- 46.0
1 points93 Direct distribution in %, variance in %		92	+ 1	92	91	+ 1
2 points63 Online distribution in %, variance in %		62	+ 1	63	60	+ 3
Customersin '000	2,113	2,026		+ 4.3 4,476	4,276	+ 4.7

1 Share of sales via own channels (retails and online); incl. Thomson Cruises

2 Share of online sales; incl. Thomson Cruises

Northern Region continues to deliver leading levels of direct and online distribution, at 93 % and 63 % respectively inQ3 2016 / 17. Customer volumes grew by 4 % in the same period.
As outlined at H1 2016 / 17, the underlying EBITA result for Q3 2016 / 17 includes approximately EUR 20 m benefit from the later timing of Easter.
UK customer volumes increased by 5 % in the quarter, reflecting the later timing of Easter. 60 % of Q3 2016 / 17 holidays in the UK were booked online. Demand for our holidays remains resilient in the UK.This resilience, coupled with a continued focus on efficiency, means that we have been able to mitigate to an extent the impact of the weaker Pound Sterling.
Nordics delivered a significant improvement in earnings in the quarter. The business has successfully rebalanced its programme with more emphasis on destinations such as Greece and the Canaries. In addition, the roll out of the Group automated yielding solution is helping to drive superior margins. Performance was also aided by the TUIrebrand. Customer volumes increased by 3 %, partly reflecting the later timing of Easter. Online bookings mix increased by 3 % points to 80 %.

Central Region

		Q3 2016 / 17Q3 2015 / 16 restated	Var. %	9M 2016 / 17	9M 2015 / 16 restated	Var. %
Turnoverin EUR million	1,557.5	1,346.3		+ 15.7 3,585.5	3,333.4	+ 7.6
Underlying EBITAin EUR million	24.5	3.5		+ 600.0- 119.2	- 107.1	- 11.3
Underlying EBITA at constant currencyin EUR million	24.4	3.5		597.1 - 119.2	- 107.1	- 11.3
			-			-
1 points49 Direct distribution in %, variance in %		48	+ 1	48	46	+ 2
2 points19 Online distribution in %, variance in %		15	+ 4	18	15	+ 3
Customersin '000	2,054	1,810	+ 13.5 4,201		4,025	+ 4.4

1 Share of sales via own channels (retails and online)

2 Share of online sales

Central Region has continued to increase the share of bookings via direct and online channels, to 49 % and 19 % respectively. Customer volumes grew by 14 % in the same period.
The underlying EBITA result for Q3 2016 / 17 includes approximately EUR 4 m phasing benefit from the later timing of Easter.
Germany has continued to build on its market share gains with an increased range of holidays and departure airports on offer, delivering an improved trading performance in the quarter. Customer volumes increased by 11 %, reflecting the later timing of Easter and the later timing of the Whitsun holiday which increased volume and margin.
On 8 June 2017 TUIGroup and Etihad AviationGroup announced that they would not continue their negotiations for a planned joint venture between the German aviation subsidiary TUI fly and Niki.As previously stated, we will continue to push the repositioning of TUI fly further ahead in order to develop long-term prospects for the airline and its employees.

Western Region

		Q3 2016 / 17Q3 2015 / 16 restated	Var. %9M 2016 / 17	9M 2015 / 16 restated	Var. %
Turnover in EUR million	926.3	734.6	+ 26.12,040.3	1,650.2	+ 23.6
Underlying EBITA in EUR million	- 11.9	- 6.4	- 85.9 - 114.2	- 82.1	- 39.1
Underlying EBITA at constant currency in EUR million	- 12.1	- 6.4	- 89.1 - 114.2	- 82.1	- 39.1

1 points72 Direct distribution in %, variance in %		70	+ 2	72	70	+ 2
2 points53 Online distribution in %, variance in %		51	+ 2	55	52	+ 3
Customersin '000	1,589	1,360		+ 16.83,424	3,032	+ 12.9

1 Share of sales via own channels (retails and online)

2 Share of online sales

Western Region increased further the share of bookings via direct and online channels, to 72 % and 53 % respectively for Q3 2016 / 17.
The result reflects the first time inclusion of Transat (small loss in the quarter), as well as the impact of rebrand costs in Belgium. These were partly offset by the EUR 5 m benefit of the later timing of Easter.
Benelux delivered a good improvement in the quarter, following the attacks on Brussels Airport last year and reflecting the successful TUIrebrand. Customer volumes were up 9 %, with online bookings mix up 3 % points to 59 %. In France, the underlying result was offset partly by the timing of income statement credits in the prior year and inclusion of Transat losses. The integration of Transat is progressing to plan, with the delivery of synergies to commence in the next financial year.

Hotels & Resorts

		Q3 2016 / 17Q3 2015 / 16		9M 2015 / 16
		restated	Var. %9M 2016 / 17	restated	Var. %
Total turnover in EUR million	339.1	300.9	+ 12.7903.7	831.2	+ 8.7
Turnover in EUR million	151.3	143.2	+ 5.7 451.3	409.2	+ 10.3
Underlying EBITA in EUR million	77.7	57.2	+ 35.8200.5	153.2	+ 30.9
Underlying EBITA at constant currency rates in EUR million	75.2	57.2	+ 31.5200.9	153.2	+ 31.2
Capacity hotels total1,4 in '000	10,518.9	9,795.6	+ 7.4 24,806.6	23,765.9	+ 4.4
Riu	4,777.3	4,565.5	+ 4.6 13,160.2	12,935.6	+ 1.7
Robinson	960.0	895.2	+ 7.2 2,126.9	2,038.4	+ 4.3

Occupancy rate hotels total2 in %, variance in % points	74.3	71.6	+ 2.7 74.6	74.0	+ 0.6
Riu	88.2	86.2	+ 2.0 88.2	87.2	+ 1.0
Robinson	57.8	59.8	- 2.0 60.3	61.9	- 1.6
Average revenue per bed hotels total3	in EUR54.57	53.47	+ 2.1 60.43	58.37	+ 3.5
Riu	58.70	54.74	+ 7.2 65.44	61.21	+ 6.9
Robinson	82.49	82.29	+ 0.2 88.55	86.95	+ 1.8

These statistics include former TUI Travel hotels; Blue Diamond included in underlying EBITA

1Group owned or leased hotel beds multiplied by opening days per quarter

2Occupied beds divided by capacity

3 Arrangement revenue divided by occupied beds

4 Previous year's KPIs restated

Our popular brands, integrated model and strong presence in year round destinations continue to drive high levels of occupancy, up 3 % points to 74 %, with a 2 % increase in average revenue per bed.
The result includes EUR 9 m benefit from the later timing of Easter.
Riu continued to deliver a good performance, particularly in Spain and Mexico. Capacity increased by 5 % in the quarter, including the new Riu Reggae in Jamaica and closures for renovations in the prior year. Occupancy increased further to 88 %, with a 7 % increase in average revenue per bed.
Robinson also delivered a good performance in the quarter.Although occupancy was impacted by lower demand for clubs in Turkey, this was offset by a strong performance inGreece, Spain and Portugal.
Blue Diamond delivered further growth in earnings, as it continues its expansion in the Caribbean.

Cruises
		Q3 2016 / 17Q3 2015 / 16 restated	Var. %9M 2016 / 17	9M 2015 / 16 restated	Var. %
Turnover1 in EUR million	214.3	171.0	+ 25.3560.2	479.9	+ 16.7
Underlying EBITA in EUR million	67.1	45.0	+ 49.1142.1	94.3	+ 50.7
Underlying EBITA at constant currency rates in EUR million	69.4	45.0	+ 54.2147.5	94.3	+ 56.4
Occupancyin %, variance in % points
Hapag-Lloyd Cruises	73.1	73.4	- 0.3 73.6	74.4	- 0.8
TUICruises	101.2	101.2	- 100.2	101.0	- 0.8

Thomson Cruises	100.3	99.3	+ 1.0 99.9	98.3	+ 1.6
Passenger days in '000
Hapag-Lloyd Cruises	86,348	87,654	- 1.5 250,042	253,952	- 1.5
TUICruises	1,094,675	775,819	+ 41.13,125,373	2,408,912	+ 29.7
Thomson Cruises	753,496	530,099	+ 42.11,843,474	1,382,859	+ 33.4
2 Average daily rates in EUR
Hapag-Lloyd Cruises	562	546	+ 2.9 584	556	+ 5.0
TUICruises	183	179	+ 2.2 160	158	+ 1.3
3 Thomson Cruises	163	154	+ 5.8 161	151	+ 6.6

1 No turnover is carried for TUICruises as the joint venture is consolidated at equity

2 Per day and passenger

3 KPIrevenue, inclusive all package elements

TUICruises continues to deliver significant growth in its all inclusive German offering, whilst maintaining a strong occupancy and rate performance. Mein Schiff 6 was launched during the quarter, initially based in Kiel (Germany) before moving to New Jersey for itineraries in the USA and Caribbean.
Thomson Cruises delivered significant growth in earnings, with continued modernisation of the fleet, including the launch of TUIDiscovery 2 in the Mediterranean. There was also a good rate and occupancy performance across the fleet as UK demand for cruise remains very strong.
Earnings for Hapag-Lloyd Cruises increased in the quarter, with overall increased average daily rate and good expedition cruise performance offsetting the lower number of operating days.

Other tourism

EUR million		Q3 2016 / 17Q3 2015 / 16 restated	Var. %9M 2016 / 17	9M 2015 / 16 restated	Var. %

Turnover	145.5	143.8	+ 1.2 435.9	433.8	+ 0.5
Underlying EBITA	- 6.3	- 5.4	- 16.7 - 19.6	- 22.1	+ 11.3
Underlying EBITA at constant currency- 6.6		- 5.4	- 22.2 - 15.1	- 22.1	+ 31.6

Destination Services continued to deliver an improved result in the quarter, including further synergies.
This was partly offset by performance at Corsair where there was a more competitive trading environment in the quarter.

Cash flow / Net capex and investments / Net financial position

The cash inflow from operating activities increased by EUR 339.7 m year-onyear. This was mainly driven by better trading and an improved working capital due to the disposal of the Hotelbeds Group.

The net financial position of the continuing operations improved from EUR- 458.6 million (30 June 2016) to EUR 234.3 million (30 June 2017),

reflecting amongst others the receipt of proceeds from the Travelopia and Hapag-Lloyd AG share disposals.

EUR million Q3 2016 / 17Q3 2015 / 16Var. % 9M 2016 / 179M 2015 / 16Var. % Cash gross capex Northern Region 13.7 - 5.8 n. a. 38.9 24.3 + 60.1 Central Region 4.8 2.7 + 77.8 12.2 11.8 + 3.4 Western Region 6.1 5.2 + 17.3 19.7 12.9 + 52.7 Hotels & Resorts 55.8 79.2 - 29.5 186.5 187.6 - 0.6 Cruises 26.9 8.9 + 202.2274.7 32.2 Other Tourism 37.8 24.9 + 51.8 86.9 68.5 + 26.9 Tourism 145.1 115.1 + 26.1 618.9 337.3 + 83.5 All other segments 1.9 3.3 - 42.4 3.7 18.0 - 79.4 TUIGroup 147.0 118.4 + 24.2 622.6 355.3 + 75.2 Discontinued operations 18.0 24.2 - 25.6 28.6 56.7 - 49.6 Total 165.0 142.6 + 15.7 651.2 412.0 + 58.1 Net pre delivery payments on aircraft78.5 - 3.9 n. a. 195.9 17.4 n. a. Financial investments 3.6 12.7 - 71.7 106.7 26.7 Divestments - 33.8 - 3.4 - 894.1 - 45.4 - 64.3 + 29.4 Net capex and investments 213.3 148.0 + 44.1 908.4 391.8	Net capex and investments






				+ 753.1







				+ 299.6

				+ 131.9

The increase in cash gross capex in the Cruises sector mainly resulted from the purchase of the cruise liner TUIDiscovery 2.

Our strategy of hedging the majority of our jet fuel and currency requirements for future seasons, as detailed below, 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 our Source Markets, which account for over 90 % of our Group currency and fuel exposure.

%		Summer 2017Winter 2017 / 18Summer 2018
Euro	97	82	40
US Dollar96		87	64
Jet Fuel 95		91	79

As at 3 August 2017

Financial position

Financial position of the TUIGroup as at 30 Jun 2017
EUR million 30 June 201730 Sep 2016
Assets
Goodwill	2,893.7	2,853.5
Other intangible assets	567.8	545.8
Property, plant and equipment	4,292.9	3,714.5
Investments in joint ventures and associates1,253.4		1,180.8
Financial assets available for sale	69.8	50.4
Trade receivables and other assets	417.4	315.3
Derivative financial instruments	62.0	126.8
Deferred tax assets	450.8	344.7
Non-current assets	10,007.8	9,131.8
Inventories	113.6	105.2
Financial assets available for sale	289.1	265.8
Trade receivables and other assets	1,956.1	1,320.1
Derivative financial instruments	250.7	544.6
Income tax assets	102.5	87.7
Cash and cash equivalents	2,226.5	2,072.9
Assets held for sale	0.1	929.8
Current assets	4,938.6	5,326.1
	14,946.4	14,457.9

Equity and liabilities

Equity and liabilities
Subscribed capital		1,500.7 1,500.7
Capital reserves		4,192.2 4,192.2
Revenue reserves		- 3,844.2- 3,017.8
Equity before non-controlling interest		1,848.7 2,675.1
Non-controlling interest	567.7	573.1
Equity		2,416.4 3,248.2
Pension provisions and similar obligations1,295.6 1,410.3
Other provisions	794.4	803.0
Non-current provisions		2,090.0 2,213.3
Financial liabilities		1,794.2 1,503.4
Derivative financial instruments	60.6	27.5
Income tax liabilities	150.9	22.2
Deferred tax liabilities	62.5	62.9
Other liabilities	158.9	160.1
Non-current liabilities		2,227.1 1,776.1
Non-current provisions and liabilities		4,317.1 3,989.4
Pension provisions and similar obligations41.3		40.6
Other provisions	383.7	374.8
Current provisions	425.0	415.4
Financial liabilities	198.0	537.7
Trade payables		2,209.1 2,476.9
Derivative financial instruments	186.0	249.6
Income tax liabilities	55.7	196.0
Other liabilities		5,139.1 2,872.4
Current liabilities		7,787.9 6,332.6
Liabilities related to assets held for sale	-	472.3
Current provisions and liabilities		8,212.9 7,220.3
		14,946.414,457.9

Income statement of the TUIGroup for the period from 1 Oct 2016 to 30 Jun 2017

EUR million	Q3 2016 / 17	Q3 2015 / 16 restated	9M 2016 / Var. % 17	9M 2015 / 16 restated	Var. %
Turnover	4,775.4	4,239.7	+ 12.6 11,129.2	10,389.3	+ 7.1
Cost of sales	4,339.2	3,863.3	+ 12.3 10,467.1	9,750.7	+ 7.3
Gross profit	436.2	376.4	+ 15.9 662.1	638.6	+ 3.7
Administrative expenses	300.4	281.2	+ 6.8 901.5	875.0	+ 3.0
Other income	4.1	2.8	+ 46.4 9.2	31.2	- 70.5
Other expenses	- 0.4	2.7	n. a. 1.8	5.9	- 69.5
Financial income	42.9	14.0	+ 79.9 206.4	32.5	+ 145.8
Financial expenses	34.2	43.7	- 21.7 115.3	243.4	- 52.6
Share of result of joint ventures and associates	54.3	38.3	+ 41.8 159.9	103.0	+ 55.2
Earnings before income taxes	203.3	103.9	+ 95.7 - 107.5	- 319.0	+ 66.3
Income taxes	42.7	28.0	+ 52.5 - 22.6	- 48.0	+ 52.9
Result from continuing operations	160.6	75.9	+ - 84.9 111.6	- 271.0	+ 68.7
Result from discontinued operations	- 88.7	31.0	n. a. - 151.8	- 17.0	- 792.9
Group profit / loss for the year	71.9	106.9	- 32.7 - 236.7	- 288.0	+ 17.8
Group profit / loss for the year attributable to shareholders of TUI AG	47.7	86.9	- 45.1 - 315.2	- 362.0	+ 12.9
Group profit / loss for the year attributable to non-controlling interest	24.2	20.0	+ 21.0 78.5	74.0	+ 6.1

Cash flow statement

Condensed cash flow statement of the TUIGroup
EUR million		9M 2016 / 179M 2015 / 16
Cash inflow from operating activities	1,380.6	1,040.9
Cash outflow from investing activities	- 841.0	- 385.3
Cash outflow from financing activities	- 685.0	- 566.2
Net change in cash and cash equivalents	- 145.4	89.4
Change in cash and cash equivalents due to exchange rate fluctuation- 31.7		78.5
Cash and cash equivalents at beginning of period	2,403.6	1,682.2
Cash and cash equivalents at end of period	2,226.5	1,850.1
of which included in the balance sheet as assets held for sale	-	187.3

Alternative performance measures

Key indicators used to manage the TUIGroup are EBITA and underlying EBITA. We consider EBITA to be the most suitable performance indicator for explaining the development of the TUIGroup's operating performance. EBITA comprises earnings before interest, taxes and goodwill impairments; it does not include the results from container shipping operations nor the results from the measurement of interest hedging instruments.

The table below shows a reconciliation of earnings before taxes from continuing operations to underlying earnings. In 9M 2016 / 17, adjustments including purchase price allocations worth EUR 59.0 m for continuing operations were nearly flat year-on-year. Material adjustments in 9M 2016 / 17 related to expenses of around EUR 24m for the integration of the French TUI tour operator following the acquisition of Transat.Adjustments made inQ3 also included one-off costs of around EUR 11 m in relation to IT restructuring projects in Northern Region. Material income was generated from the reversal of a restructuring provision no longer required in Central Region.

Reconciliation to underlying EBITA From continuing operations

EUR million		Q3 2016 / 17Q3 2015 / 16 restated		Var. %9M 2016 / 17	9M 2015 / 16 restated	Var. %
Earnings before income taxes	203.3	103.9		+ 95.7- 107.5	- 319.0	+ 66.3
less / plus: Result from the partial sale / measurement in Container Shipping	- 32.9	-	n. a.	- 35.2	100.3	n. a.
plus: Net interest expense and expense from the measurement of interest hedges	29.8	33.0	- 9.7 91.0		114.7	- 20.7
EBITA	200.2	136.9		+ 46.2- 51.7	- 104.0	+ 50.3
Adjustments:
less: Profit on disposals (prior year losses)	- 2.1	-		- 1.4	0.9
plus: Restructuring expense	-	2.0		17.1	7.5
plus: Expense from purchase price allocation7.0		7.7		22.2	25.3
plus: expense / less: income from other one-off items	16.5	14.3		21.1	24.8
Underlying EBITA	221.6	160.9	+ 37.77.3		- 45.5	n. a.

Key figures of income statement From continuing operations

EUR million	Q3 2016 / 17	Q3 2015 / 16 restated	Var. %	9M 2016 / 17	9M 2015 / 16 restated	Var. %
Earnings before interest, income taxes, depreciation, impairment and rent (EBITDAR)	496.7	423.8	+ 17.2	811.7	763.2	+ 6.4
Operating rental expenses	194.8	203.7		- 4.4 562.1	596.1	- 5.7
Earnings before interest, income taxes, depreciation and impairment (EBITDA)	301.9	220.1	+ 37.2	249.6	167.1	+ 49.4
Depreciation / amortisation less reversals of depreciation*	101.7	83.2	+ 22.2	301.3	271.1	+ 11.1
Earnings before interest, income taxes and impairment of goodwill (EBITA)	200.2	136.9	+ 46.2	- 51.7	- 104.0	+ 50.3
Earnings before interest and income taxes (EBIT)	200.2	136.9	+ 46.2	- 51.7	- 104.0	+ 50.3
Interest result and earnings from the measurement of interest hedges	29.8	33.0		- 9.7 91.0	114.7	- 20.7
Result from the partial sale / measurement of shares in Container Shipping	- 32.9	-		n. a. - 35.2	100.3	n. a.
Earnings before income taxes (EBT)	203.3	103.9	+ 95.7	- 107.5	- 319.0	+ 66.3

* On property, plant and equipment, intangible asssets, financial and other assets

Other segment indicators

Underlying EBITDA

EUR million		Q3 2016 / 17Q3 2015 / 16	Var. % 9M 2016 / 17	9M 2015 / 16	Var. %
		restated		restated
Northern Region	101.2	72.0	+ 40.6 - 9.6	- 20.2	+ 52.5
Central Region	27.6	8.4	+ 228.6- 106.4	- 92.6	- 14.9
Western Region	- 8.2	- 2.7	- 203.7 - 101.8	- 70.6	- 44.2
Hotels & Resorts	98.0	77.7	+ 26.1 265.9	216.1	+ 23.0
Cruises	83.0	56.9	+ 45.9 184.6	126.9	+ 45.5
Other Tourism	9.8	7.9	+ 24.1 25.8	15.3	+ 68.6
Tourism	311.4	220.2	+ 41.4 258.5	174.9	+ 47.8
All other segments	5.9	17.1	- 65.5 31.5	29.0	+ 8.6
TUIGroup	317.3	237.3	+ 33.7 290.0	203.9	+ 42.2
Discontinued operations14.2		42.8	- 66.8 - 1.0	50.6	n. a.
Total	331.5	280.1	+ 18.4 289.0	254.5	+ 13.6

EBITDA

EUR million		Q3 2016 / 17Q3 2015 / 16	Var. % 9M 2016 / 17	9M 2015 / 16	Var. %
		restated		restated
Northern Region	87.0	70.7	+ 23.1 - 27.8	- 25.2	- 10.3
Central Region	27.1	6.8	+ 298.5- 102.5	- 99.4	- 3.1
Western Region	- 6.9	- 4.1	- 68.3 - 125.7	- 73.9	- 70.1
Hotels & Resorts	98.0	77.7	+ 26.1 265.2	217.5	+ 21.9
Cruises	83.0	56.9	+ 45.9 184.6	126.9	+ 45.5
Other Tourism	9.1	3.4	+ 167.624.0	7.5	+ 220.0
Tourism	297.3	211.4	+ 40.6 217.8	153.4	+ 42.0
All other segments	4.6	8.7	- 47.1 31.8	13.7	+ 132.1
TUIGroup	301.9	220.1	+ 37.2 249.6	167.1	+ 49.4
Discontinued operations0.3		36.8	- 99.2 - 21.8	7.7	n. a.
Total	302.2	256.9	+ 17.6 227.8	174.8	+ 30.3

Cautionary statement regarding forward-looking statements

The present Quarterly Statement contains various statements relating to TUI's future development. These statements are based on assumptions and estimates.Although we are convinced that these forward-looking statements are realistic, they are not guarantees of future performance since our assumptions involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Such factors include market fluctuations, the development of world market prices for commodities and exchange rates or fundamental changes in the economic environment. TUI does not intend to and does not undertake any obligation to update any forward-looking statements in order to reflect events or developments after the date of this Statement.

Analyst and investor enquiries

Peter Krüger Director of Investor Relations and Special Projects Tel.: + 49 (0)511 566 1440

Contacts for Analysts and Investors in UK, Ireland and Americas

Sarah Coomes Head of Investor Relations Tel.: + 44 (0)1293 645 827

Hazel Chung Investor Relations Manager Tel.: + 44 (0)1293 645 823

Contacts for Analysts and Investors in Continental Europe, Middle East and Asia

Nicola Gehrt Head of Investor Relations Tel.: + 49 (0)511 566 1435

Ina Klose Investor Relations Manager Tel.: + 49 (0)511 566 1318

Jessica Blinne Team Assistant Tel.: + 49 (0)511 566 1425

The presentation slides and the video webcast for Q3 2016 / 17 are available at the following link: www.tuigroup.com/en-en/investors

Contact and publishing details

Published by TUIAG Karl-Wiechert-Allee 4 30625 Hanover, Germany Phone: + 49 511 566-00 Fax: +49 511 566-1901 www.tuigroup.com

Concept and Design 3st kommunikation, Mainz

Photography Cover Getty Images

The English and a German version of this Quarterly Statement are available on the web: www.tuigroup.com/en-en/investors

Published on 10 August 2017

Financial calendar

28 September 2017 Trading Update

13 December 2017 Annual Report 2016 / 17

13 February 2018 Annual General Meeting 2018 Quarterly Statement Q1 2017 / 18

The EQS Distribution Services include RegulatoryAnnouncements, Financial/Corporate News and Press Releases. Archive at www.dgap.de/ukreg

Language: English Company: TUIAG Karl-Wiechert-Allee 4 30625 Hannover Germany Phone: +49 (0)511 566-1425 Fax: +49 (0)511 566-1096 E-mail: [email protected] Internet: www.tuigroup.com ISIN: DE000TUAG000, DE000TUAG281, DE000TUAG299 WKN: TUAG00 , TUA G28, TUA G29 Listed: Regulated Market in Hanover; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange; Open Market in Frankfurt; London Category Code: QRT TIDM: TUI LEICode: 529900SL2WSPV293B552 OAM Categories: 3.1.Additional regulated information required to be disclosed under the laws of a Member State Sequence No.: 4515

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