TUI AG continues its growth course. The Group's accumulated operating earnings by divisions – EBTA adjusted for unusual income and expenses – for the first three quarters of 2004 totalled 505 million euros, an increase of 290 million euros year-on-year. Thereby earnings have more than doubled.

All the divisions contributed to this positive tend. In tourism, the strong upturn of the previous quarters continued. In the first three quarters of 2004, the tourism division generated accumulated earnings of 487 million euros, this was an increase of 62 per cent or 186 million euros year-on-year. The shipping sector achieved accumulated earnings of 193 million euros and increased its earnings by 35 per cent compared with 143 million euros recorded in the previous year.

The third quarter contributed significantly to this trend. Adjusted earnings by divisions stood at 620 million euros and rose by 88 million euros year-on-year. Due to the good summer season, the tourism division increased its earnings by 14 per cent to 572 million euros. The shipping sector recorded sustained growth in transport volumes and a further slight increase in freight rates. At 89 million euros, quarterly earnings in the shipping sector were 13 per cent higher than in the previous year. Due to the sustained steel boom, the trading sector reported an extraordinary increase in earnings to 30 million euros in the third quarter.

In the third quarter of 2004, the TUI Group generated turnover of 6.2 billion euros, following 6.5 billion euros achieved in the previous year. The tourism division and the shipping sector as well as the trading sector increased their turnover. The year-on-year decline resulted from the divestments in the trading sector and in special logistics. Adjusted for the turnover of the divested entities, Group turnover rose by 6.6 per cent. Accumulated Group turnover for the first three quarters totalled 14.3 billion euros (previous year: 15.4 billion euros); on a like-for-like basis, it rose by 6.4 per cent.

In the third quarter, the sale of Algeco was closed. In 2004, net debt was strongly reduced again by 1.1 billion euros to 2.7 billion euros.

Dr. Michael Frenzel, CEO of TUI AG, comments: "We are proud of the strong business trends in our core businesses tourism and shipping. The third quarter of 2004 represents one of the best quarterly results ever and confirms impressively the earnings power of our integrated business model in tourism."

Tourism
The tourism division closed the third quarter at a turnover of 4.87 billion euros (previous year: 4.72 billion euros), an increase of 3.2 per cent. Turnover in the tourism division grew significantly more strongly than customer numbers, a trend confirming an overall improvement in price levels. Accumulated turnover for the first three quarters of 2004 rose by 3.2 per cent to 10.51 billion euros (previous year: 10.18 billion euros).

Earnings in the tourism division improved considerably by 14.4 per cent to 572 million euros (previous year: 500 million euros) in the third quarter. This increase was primarily attributable to the substantial improvement in earnings in the Central Europe sector and persistently good earnings in the destinations sector. The economic success was essentially due to the balance in capacity on offer and demand in this year. Price quality improved as there was less residual capacity to be offered at reduced prices.

Earnings in the Central Europe sector (Germany, Switzerland, Austria and Hapag-Lloyd Flug) alone rose by 75.3 per cent in the third quarter, from 89 million euros in 2003 to 156 million euros in 2004. This was mainly achieved by the positive development of TUI Deutschland. Accumulated earnings generated by the sector in the first three quarters of 2004 totalled 110 million euros (previous year: minus 20 million euros). This reflected the recovery of the tour operator business, the effect of the cost containment programme and the good seat load factors achieved in flight operations. Turnover of this sector grew by 4.1 per cent to 1.91 billion euros (previous year: 1.83 billion euros) in the third quarter, with accumulated turnover for the first three quarters rising to 4.07 billion euros (previous year: 4.02 billion euros).

The Northern Europe sector (UK, Ireland, Nordic countries and Britannia Airways) increased its turnover by 5.9 per cent to 1.77 billion euros in the third quarter (previous year: 1.67 billion euros). Around three quarters of this growth was generated in the UK, where both customer numbers rose and higher prices were achieved. In the first three quarters, accumulated turnover was up by 9.6 per cent to 3.83 billion euros (previous year 3.50 billione euros). In the third quarter, the Northern Europe sector generated earnings of 194 million euros (previous year: 230 million euros) and thus did not reach the previous year's level. Whereas flight operations generated good, stable results in the UK, the strength of the euro against the British pound sterling adversely affected the operating costs of the tour operators. Overall, the Northern Europe sector improved its performance in the first three quarters of 2004 year-on-year with accumulated earnings of 142 million euros (previous year: 132 million euros).

In the Western Europe sector (France, Netherlands, Belgium, Corsair and TUI Airline Belgium), turnover dropped by 0.7 per cent to 928 million euros (previous year: 935 million euros) in the third quarter of 2004, a trend mainly attributable to the increase in price competition for longhaul destinations in the French market. Accumulated turnover in the first three quarters totalled 2.03 billion euros, matching the previous year's level. Earnings of the sector rose to 97 million euros in the third quarter (previous year: 93 million euros). The slight decline in earnings in France and Belgium were more than offset by improvements in the Netherlands. The new airline TUI Airlines Belgium already made a positive profit contribution. Accumulated earnings for the first thee quarters stood at 78 million euros (previous year: 80 million euros).

The destinations sector improved its earnings in the third quarter by 24.7 per cent to 116 million euros (previous year: 93 million euros), in particular due to good occupancy rates in the hotels and resorts. At accumulated earnings of 142 million euros (previous year: 110 million euros), earnings of the division rose by 29.1 per cent in the first three quarters of 2004.

The Other tourism sector (business travel and IT service providers) also managed to increase their earnings on the previous year. Earnings rose to 9 million euros in the third quarter (previous year: minus 5 million euros), with accumulated earnings of 15 million euros for the first three quarters (previous year: minus 1 million euros).

Logistics
With the divestment of the Algeco Group, the logistics division continued to focus on shipping. Turnover of the division declined to 889 million euros (previous year: 1.04 billion euros) in the third quarter as a result of the divestments in the special logistics sector. However, adjusted for the relevant divestments, turnover grew by 9.6 per cent. Due to the extremely positive development in container shipping, earnings rose despite the divestments: in the third quarter, the logistics division generated earnings of 102 million euros (previous year: 96 million euros), with accumulated earnings of 208 million euros (previous year: 199 million euros) for the first three quarters.

In the shipping sector, Hapag-Lloyd Container Linie again recorded sustained growth in the third quarter: at 625,000 standard containers (TEU), the transport volume in the third quarter topped previous year's volume by 13.8 per. In addition, average freight rates rose year-on-year. Due to the volume growth and the persistently high freight rates, turnover in the third quarter 2004 rose by 12 per cent to 725 million euros (previous year: 648 million euros). At 89 million euros, quarterly earnings of the shipping sector even grew by 12.7% year-on-year (previous year: 79 million euros). Accumulated earnings for the first three quarters totalled 193 million euros (previous year: 143 million euros).

Other sectors
Following the divestment of the AMC Group, the trading sector only comprises the companies of the PNA Group operating in the steel service business in the US. Due to the persistently good business trend and high price levels, turnover in the steel business climbed by 77.5 per cent to 279 million euros (previous year: 157 million euros) in the third quarter while earnings rose to 30 million euros, substantially exceeding the previous year's level (1 million euros). Accumulated earnings already totalled 94 million euros (previous year: 0 million euros), the best result ever achieved by the PNA Group since its formation.

The Group's central operations (corporate centre functions of TUI AG, real estate companies, industrial activities, Hapag-Lloyd Ex-press and Thomsonfly airlines) reported turnover of 155 million euros (previous year: 122 million euros) in the third quarter and earnings of 52 million euros (previous year: minus 103 million euros). For the first three quarters, central operations recorded accumulated earnings of minus 109 million euros (previous year: 523 million euros). The high level of accumulated earnings in the previous year resulted from the unusual income from the divestment of the indirect shareholdings in Ruhrgas AG and of Preussag Energie GmbH. This year, unusual income accounted for comparatively lower amounts and mainly resulted from the divestment of the Algeco Group.

The low-cost carriers Hapag-Lloyd Express (HLX) and Thomsonfly, operating in Germany and the UK, generated turnover of 64 million euros (previous year: 39 million euros) in the third quarter of 2004 and joint earnings of 1 million euros (previous year: minus 10 million). HLX generated a positive quarterly result for the first time. In the first three quarters, the turnover of the two low-cost airlines totalled 142 million euros (previous year: 81 million euros).

Group profit for the year
In the third quarter, Group profit for the year stood at 608 million euros, following 236 million euros achieved in the previous year. Accumulated Group profit for the year totalled 572 million euros and thus was below the previous year's level (646 million euros) as the significant improvement in operating results of the divisions was contrasted by a year-on-year decline in one-off income from divestments.

Prospects
All the divisions have performed positively. The economic framework continues to provide cause for optimism. Against the background of a pick-up in demand in the travel business, earnings in the core business tourism will significantly exceed the previous year's level in the 2004 financial year. This is also reflected by the current growth in turnover: at Group level, booked turnover for the 2004 summer season was 3.4 per cent up on the previous year, while it has hitherto even grown by 5.7 per cent year-on-year for the 2004/2005 winter season. Prospects are also positive for container shipping. The current business trend is characterised by an increase in transport volumes and high freight rates.

"We are well on track. The business development of our divisions clearly confirms our expectation that earnings by division, adjusted for unusual expenses and income, for the 2004 financial year will total at least 420 milion euros following 242 million euros in the previous year", says Michael Frenzel, TUI's CEO, with confidence