Chairman's statement

Having faced a number of geopolitical events in 2011, the most serious of which was the North African crisis, we are pleased to have achieved an 18% increase in underlying operating profit for the full year to £471m (2010: £399m).

In January, the Group updated the market on its strategic priorities and the roadmap to achieve these objectives. Since then, we have faced not only the events that occurred in some of our key North African destinations but also increasing global economic uncertainty. It is testament to the strength of our business and its flexibility that we have achieved the results that we have.

Results

The Group has achieved an 18% increase in underlying operating profit to £471m (2010:£399m) on revenue of £14,687m (2010: £13,514m). Underlying profit before tax is up 25% to £360m (2010: £289m). Underlying earnings per share increased 24% to 23.6p (2010: 19.0p). Following a reduction in separately disclosed items, the Group’s statutory profit before tax was £144m (2010: loss of £73m).

Dividends

The Board is recommending a final dividend of 8.0p per share (2010: 7.8p). On 10 May 2011, the Board recommended an interim dividend of 3.3p per share (2010: 3.2p), thereby resulting in a full year dividend of 11.3p per share (2010: 11.0p). The Group has a progressive dividend policy and will look to maintain underlying dividend cover at just over two times.

Board

Two of our Non-Executive Directors, Jeremy Hicks and Giles Thorley, resigned from the Board in January 2011 and on 4 April 2011 Minnow Powell joined the Board as a Non-Executive Director and Chairman of the Audit Committee. In September, we welcomed another Non-Executive Director to the Board, Coline McConville. Post year end, on 19 October 2011, Clare Chapman stepped down from the Board and Bill Dalton was appointed Chairman of the Remuneration Committee effective from that date. Also post year end, on 20 October 2011, Johan Lundgren, an Executive Director, was promoted to Deputy Chief Executive with responsibility for the Mainstream Sector. Johan was previously Managing Director of the Northern Region of the Mainstream Sector.

The TUI Travel PLC Board has resolved to adopt a policy designed to achieve at least 25% female representation among its members by 2015.

Sustainable development

At TUI Travel we have a firm commitment to sustainable development and our goal is to make travel experiences special. We seek to achieve this whilst minimising environmental impact, respecting culture and people and bringing economic benefits to communities. The past year has seen our businesses continue to drive eco-efficiencies, which have brought financial as well as environmental benefits and sustainability has also stimulated a number of product innovations. There is also evidence that our most sustainably-managed hotels are also those which are delivering higher quality and customer satisfaction.

Colleagues

We are a truly international business and our team of colleagues, numbering some 53,000, are based worldwide. A large proportion of our colleagues are customer facing and the level of service they deliver to our customers is an essential part of the leisure travel experience. We have a committed team across the whole organisation and on behalf of the Board I would like to thank them for their much valued contribution to our success.

Dr Michael Frenzel
Non-Executive Chairman