STOCKHOLM, Sweden, July 23, 2002 (PRIMEZONE) -- Ticket Travel Group AB (publ):
For further information and questions, please contact CEO Dag Tveteras, +46 70 313 71 80 or Financial Director Katarina Sjogren Petrini, +46 70 567 51 73
The printed version of this interim report can be ordered on + 46 8 702 66 00TICKET TRAVEL GROUP AB (PUBL) INTERIM REPORT JANUARY - JUNE 2002
- Operating income SEK 9.1 (5.2) million, +75 %
- Earnings per share SEK 0.51 (0.30)
- Net sales SEK 1,774.1 (1,915.3) million, -7 %
- Operating margin before amortisation of goodwill 0.8 % (0.5 %)
- Costs cutting program successful, costs reduced by SEK 29.1
million (excluding currency effects) in the period.
- Increased market share in charter and package holidays in a
weak market
MARKET AND SALES
Group sales for the period were down 7 % on last year. The current economic situation has affected sales negatively. Ticket however considers the negative effects that the terrorist attack in the USA and the outbreak of war in Afghanistan has had on travellers is substantially reduced. In the second quarter, sales fell by 8 % on last year. This is partly due to the record warm early summer weather, resulting in fewer travellers and lower average prices. Ticket has in Sweden and Norway increased its market share of total charter and packet travel sales.
Passenger figures from the Swedish Civil Aviation Authority for the period show that the number of passengers travelling abroad was 12 % lower than for the corresponding period in 2001. Both business and private travel is included in these figures. The Swedish Civil Aviation Authority's prognosis for 2002 is that passenger numbers for the year will fall by around 10 %.
This summer there was an increased demand for cheap charter holidays to countries where cost levels are low, primarily Bulgaria and Turkey. Interest in travel to Portugal and Spain is somewhat lower than previous years. The Canary Islands will nevertheless before the winter defend its position as Norwegians' and Swedes' most popular holiday destination.
The market for low price air travel has grown strongly in recent years. Currently, in the Nordic countries, the majority of players have a low price profile. The established airlines are also launching new concepts directed at the low price segment. Ticket cooperates with a number of these players and has consequently broadened the company's range and offers customers value for money air tickets.
NET SALES
Ticket Group's net sales for the period were SEK 1,774.1 (1,915.3) million, which is a fall of 7 %. For comparable shops the fall was 6 % excluding currency rate effects. The Swedish company's net sales for the period were SEK 1,145.2 (1,244.2) million, a fall of 8 %. Net sales for the Norwegian company for the period were SEK 628.8 (671.1) million, a fall of 6 %.
EARNINGS
Group earnings for the period were SEK 9.0 (5.2) million after financial items. Consolidated operating income was SEK 9.1 (5.2) million. The gross profit margin for the Group was 10.0 % (10.0 %). The Swedish company's operating income for the period was SEK 7.9 (8.2) million. Operating income for the Norwegian company was for the period SEK 1.2 (-1.9) million, operating income before amortisation of goodwill being SEK 4.9 (1.6) million.
SECOND QUARTER 2002
Consolidated net sales in the second quarter were SEK 815.2 (885.1) million, a fall of 8 %. For comparable travel agents the fall was 6 % excluding currency rate effects. The Swedish company's net sales in the quarter were SEK 531.5 (580.1) million, a fall of 8 %. For the Norwegian company, net sales for the quarter were SEK 283.7 (305.0) million, a decrease of 7 %.
Group earnings after financial items were SEK 0.6 (-0.2) million. Consolidated operating income for the quarter was SEK 0.6 (-0.3) million. Gross profit margin for the quarter was 10.5 % (10.5 %). The Swedish company's operating income was SEK 1.5 (3.9) million. Operating income for the Norwegian company was SEK 0.9 (-0.8) million for the quarter before goodwill amortisation.
Information per area
SEKm Net sales
Qtr 2 Qtr 2 Change(7) Jan - Jan - Change(7) Year
Jun Jun
2002 2001 %* 2002 2001 %* 2001
Sweden 531 580 -8 (-8) 1,145 1,244 -8 (-8) 2,099
Norway 284 305 -7 (-13) 629 671 -6 (-12) 1,079
Group 815 885 -8 (-10) 1,774 1,915 -7 (-10) 3,178
SEKm Operating income
Qtr 2 Qtr 2 Change(7) Jan - Jan - Change(7) Year
Jun Jun
2002 2001 % 2002 2001 % 2001
Sweden 1.5 3.9 -8 7.9 8.2 -5 -15.3
Norway -0.9 -2.2 - 1.2 -1.9 - -18.2
Belgium** - -2.0 - - -1.1 - -14.1
Items affecting - - - - - - -14.8
comparability***
Group 0.6 -0.3 - 9.1 5.2 73 -62.4
SEKm Earnings after financial items
Qtr 2 Qtr 2 Change(7) Jan - Jan - Change(7) Year
Jun Jun
2002 2001 % 2002 2001 % 2001
Sweden 1.5 6.1 -62 7.7 12.3 -38 -10.1
Norway -0.9 -4.3 - 1.3 -6.0 - -22.4
Belgium** - -2.0 - - -1.1 - -14.1
Items affecting - - - - - - -14.8
comparability***
Group 0.6 -0.2 - 9.0 5.2 72 -61.4
* Figures in brackets are calculated excluding currency rate
effects.
** Tickets 50% profits share is given in the earnings table.
*** Items affecting comparability in 2001 were the disposal of
Ticket BBL Travel.
SWEDEN AND NORWAY
The cost cutting program is running according to plan. The goal, which is to reduce costs by SEK 50 million for the year 2002 as compared with 2000 (excluding currency effects), is expected to be achieved. During the first half year, Group sales and administration costs have fallen by SEK 29.1 million compared with 2000, currency effects excluded. The reduction was SEK 22.0 million including currency effects.
In Sweden there were 67 shops in operation at the end of the period, including an Internet shop. One shop has been closed in the period. Three shops have been closed in Norway in the period. The number of shops in operation at the end of the period was 33, including an Internet shop. The closure and re-location is a part of Ticket's on going business to improve profitability.
In the period, the number of employees amounted to 450 (528). Sales per non-seasonal employee have however increased in the period, compared with the same period last year. This is primarily a result of the implementation of the cost cutting program. Ticket has installed a new telephone system in Sweden, which means that Ticket now has Scandinavia's largest virtual call centre. There also has been a major training initiative, primarily for shop managers, carried out in both Sweden and Norway.
The process to strengthen Ticket's role as a retailer continues. The initiative involves Ticket more aggressively protecting its role as a retailer through developing cooperation with suppliers and better using the shop as a market place. The development enables suppliers to change their market mix and to increase the proportion of shop adapted communication, which can reach the customer closer to their purchase decision. Several campaigns have been carried out in the period with leading suppliers in both Sweden and Norway with good results. Several successful campaigns have achieved sales increases of 50 % compared with the same period last year.
During the period the cooperation with Sterling runs according to plan. The cooperation is estimated to give an increase in sales of SEK 50 million for Ticket.
Ticket has launched in the period a new service for booking weekend packages with scheduled flights on its web site Ticket.se. The booking function is the first in Sweden that offers customers the ability to book and pay for flights and hotels themselves on line in one booking. Ticket's goal is to offer customers the same range of products and services on line on the Internet as is offered today in the shops.
DREAMTICKET
The legal process for the liquidation of Dreamticket is in progress. Ticket has already written off its entire involvement in Dreamticket, and as a result of this Ticket does not anticipate that the liquidation will incur the Group any further costs.
FINANCIAL POSITION
The group's liquid assets in the period were SEK 55.8 (47.7) million including short-term investments. Interest bearing liabilities were SEK 12.0 (16.0) million. Unused overdraft was SEK 51 million. The Group's cash flow from operating activities was SEK 40.3 (19.7) million. The improved result on last year has had a positive effect on cash flow. The cash flow has also been positively affected by the increase in non- interest bearing debt. Cash flow from investment activities was SEK -3.1 (-10.5) million, and from financial activities cash flow was SEK 4.0 (-) million. The equity/assets ratio was 23.5 % (32.1 %) and Group shareholder equity at period end was SEK 76.8 (122.7) million.
INVESTMENTS
Group investments in fixed assets were SEK 2.0 (10.5) million for the period. Investments have primarily been in the IT area. Depreciation for the quarter was SEK 11.3 (12.4) million.
ACCOUNTING PRINCIPLES
This interim report has been prepared in accordance with the same accounting principles and calculation methods as used in the year 2001 annual report and in accordance with the Swedish Financial Accounting Standards Council's recommendations.
PARENT COMPANY
Net sales for the period were SEK 22.6 (23.4) million. Earnings after financial items were SEK -1.3 (0.9) million. The Group's liquid assets at period end were SEK 34.7 (26.6) million including short-term investments. Investments for the period were SEK 0.6 (3.3) million.
FUTURE PROSPECTS
It is currently difficult to make an accurate prediction of market development for the year. Based on the economic and international political factors, which still affect the market, Ticket will not achieve the profitability goal in 2002. To achieve the profitability goal, which is operating earnings being 1.3 % of net sales before amortisation of goodwill, Ticket's net sales have to be higher than the year 2000 level, that is to say more than SEK 3.63 billion with costs levels in line with the cost cutting program. In the first half year, operating margin was 0.8 % (0.5 %) before amortisation of goodwill.
Sales so far in July have shown a positive development compared with last year, mainly due to the poorer weather around mid-summer.
During the last 2 years, Ticket has consolidated operations and increased shop operation efficiency. In the current situation, with effective cost control and increased productivity, a couple of new start- ups in expanding areas are under consideration.
With a strong brand and a clear role as a retailer, we consider that Ticket will continue to strengthen its market position and profitability.
FUTURE REPORTING
Reporting for 2002 will be as follows:
- Interim report for January - September 23, October 2002 - Year-end report for January - December 2002, 31 January 2003
Nacka, Sweden, 23 July 2002
Ticket Travel Group AB (publ) The Board
REVIEW REPORT
We have performed a review of this interim report and in accordance with the recommendations set out by the Swedish Institute of Authorized Public Accountants, FAR. A review is significantly limited in scope compared to an audit. Nothing has been found to suggest that this interim report does not comply with the requirements set out in the Stock- and Annual Accounts Acts.
Stockholm, Sweden, 23 July 2002
Ernst & Young AB
Lars Traff, Authorised Public Accountant
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