Friedrich Joussen, TUI AG’s incoming chief executive officer, is asking shareholders for patience before he outlines plans to give shareholders a return from Europe’s largest travel company.
“Allow me a few more months to complete my program for TUI,” Joussen said in the text of a speech handed to journalists before the start of the shareholder meeting today in Hanover, Germany. “We will have a very close look at each individual area of TUI. I have no patience if a part of our company does not deliver the right performance.”
Investors share the 49-year-old’s anxiety as he takes the helm today from Michael Frenzel. The 65-year-old lawyer headed the company for 19 years, turning an industrial conglomerate into Europe’s largest tourism company, while failing to generate value for shareholders.
Shares of TUI have lost about 35 percent under Frenzel, while Germany’s MDAX benchmark index for medium-sized companies rose more than fivefold. TUI has paid a cash dividend only once in the past six years, and suffered net losses in three of the years.
“The sole reign of Mr. Frenzel has anything but done TUI good,” Ingo Speich, a fund manager at Union Investment in Frankfurt, said at the meeting today. “His era was a regency of demise. For shareholders, it was two lost decades.”
TUI’s pension liabilities are “a ticking time bomb,” Speich said.
Joussen said while he is still fine-tuning the details of TUI’s strategy, he will develop the company’s strengths and may not spend much time on its weaknesses, without elaborating. He seeks a more efficient and transparent structure, he said.
In the four months since his appointment to the management board, Joussen scrutinized the company’s tour operations, airlines, hotels and cruises businesses, he told shareholders today. TUI Chief Financial Officer Horst Baier reiterated the company is committed to selling its remaining stake in Hapag Lloyd, Europe’s fourth-largest container line.
TUI today reported its biggest first-quarter loss in four years, while confirming its outlook for fiscal 2013. Hotel operations will generate more profit this year than planned, while the company’s cruise operations will see earnings decline.
The shares fell as much as 2.6 percent to 8.13 euros in Frankfurt today. They traded at 8.17 euros at 10:28 a.m. for a market value of 2.01 billion euros.
To contact the reporter on this story: Richard Weiss in Frankfurt at email@example.com
To contact the editor responsible for this story: Benedikt Kammel at firstname.lastname@example.org