TUI AG Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jamie Rollo - Morgan Stanley & Co. International Plc - Analyst : Thanks. Good morning, everyone. And just three quick ones if I may. First of all, on current trading, are you concerned about the volume slowdown in Germany compared to the figures you gave in December? And also why have the hotel ADR figures, why are they accelerating in Q2 and the second half of the year compared to Q1? It looks very strong. Secondly, on the rating upgrade, how should we think about any benefit to the EUR400 million P&L interest expense over sort of the next year or two, particularly in the context of the of the RCF refinancing. And then just on the guidance of 7% to 10%, I don't know whether. Your 7% to 10% was was including the 1%, EUR15 million from the hotel balance sheet valuation, but it looks quite conservative now. I think you need about 5% profit growth for the remaining nine months to hit the midpoint. So presumably you're feeling pretty comfortable with that 7% to 10%. Thank you.

Question: Jamie Rollo - Morgan Stanley & Co. International Plc - Analyst : Thank you very much.

Question: Muneeba Kayani - BofA Global Research - Analyst : Good morning. Two questions from me please. Firstly, just from the FDI, benefits, like can you help quantify what you've seen so far and kind of how you're thinking about that in your guide for the year. And then secondly, just within your guidance, how are you thinking about the ex EBIT growth for the rest of the year? Thank you.

Question: Muneeba Kayani - BofA Global Research - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 8:00AM, TUI1n.DE - Q1 2025 TUI AG Earnings Call

Question: Richard Clarke - Bernstein - Analyst : Thanks for taking my questions. Three for me. Maybe just starting on the inclusion of Ryanair, you're still saying flat capacity for the summer. Was Ryanair in addition to that, so you're taking other capacity out to match that? And how should we think about trips using Ryanair? Do you do you make any profit at the market and airlines on a Ryanair trip or is all the profit taken at the the sort of hotel side of the business? Secondly, just on cruise occupancy at 95% down year on year, you're running at sort of 100% occupancy in 2019. So can you get back to that kind of level? What's the missing occupancy in crews? And then just lastly, in 2019 you were double BB rated, you paid a dividend. So is BB enough for the dividend to come back, or do you need a sort of another ratings upgrade for the dividend to be brought back in?

Question: Richard Clarke - Bernstein - Analyst : If I can, I just ask a quick clarification on the first answer there. On slide 16, it says bookings positive on flat capacity assumptions. Just trying to unpick, are you saying capacity actually won't be flat? It's just risk capacity that's going to be flat and you're expecting to (inaudible). Yeah, so that, so maybe just what is that assumption then, so actually the booking numbers you're presenting on slide 16 just risk capacity, just trying to understand that assumption you put at the top of slide 16.

Question: Richard Clarke - Bernstein - Analyst : Okay. All right, thank you.

Question: Chandni Hirani - Barclays - Analyst : Hi guys, thanks for taking my question. You touched, on the slowing Germany bookings, but are you at all kind of concerned on the negative bookings they see in the UK? Sort of what gives you conviction on this improving and helping that moderate growth embedded within your guidance?

Question: Chandni Hirani - Barclays - Analyst : Thank you.

Question: Cristian Nedelcu - UBS - Analyst : Hi, thank you very much. Maybe the first question, can you help us quantify the total investments you made in the markets and airline like in shops in marketing? Can you give us a ballpark number in Q1? Just to better understand the the evolution of the EBIT there year over year. Secondly, coming a little bit back to the UK market, so we're seeing two of your largest competitors adding their capacity, growing their capacity by 9% respectively, more than 20% this year. Do you see signs that, competition is also increasing? I mean, we see your booking number, we see the macro environment seems to be weakening a little bit in the UK sequentially. How do you see the whole dynamic there? And I think maybe lastly just again thinking at the coming back to the prior question, you guys for moderate growth in that for this year in markets and airlines. Could you give us a bit more color there? What are the profit drivers. You're already minus EUR30 million a year. Bookings up 2% does not sound amazing for the summer. Revenues up 13% in Q1, didn't stop the EBIT from falling. So can you tell us a bit more what are the, in that bridge of EBIT for the markets and airlines? What are the factors that give you confidence, that you can observe moderate growth. Thank you.

Question: Andre Juillard - Deutsche Bank - Analyst : Yes, good morning, thank you for asking my question. Just wanted to come back on the operating trend, in the western region. Well, we've seen a relatively low trend, so you said that you are expecting the dynamic package to come back and you've taken some measures, but could you detail a little bit more what are the different parameters and how they could positively impact the rest of the year? Thank you.

Question: Andre Juillard - Deutsche Bank - Analyst : Okay.

Question: Cristian Nedelcu - UBS - Analyst : Thank you very much. I'm coming again to the moderate growth in in markets and airlines, the guidance. May I add two data points? I see the number of FTEs in markets and airlines in Q1 is up around 3.5% year over year. Maybe the question there is, what is the growth rate in FTE for the full year and equally so, what type of wage inflation are you seeing across markets and airlines just to to get us a better feel versus the average selling price increases that you're showing. And secondly, coming back to your answer in the context in which most of your growth seems to be driven by dynamic packaging. Could you elaborate a little bit on the margin profile there, the incremental contribution from that, I guess what I'm, what I cannot fully reconcile and I may be wrong, is getting to that moderate profit growth after the starting the year which is minus EUR30 million, and maybe there are other levers of improving profitability year over year that you can, give us more color on? Thank you.

Question: Cristian Nedelcu - UBS - Analyst : Thank you. Sorry, could I ask one last one, apologies. I just in the context, historically, usually the average selling prices for the year in most of the years in the tour operators tends to fade a bit down in the late season. Is there any reason why you believe this will not be the case this year, or anything that you can change structurally in the market that you think that that sort of historical average trend will not repeat this year? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 8:00AM, TUI1n.DE - Q1 2025 TUI AG Earnings Call

Question: Cristian Nedelcu - UBS - Analyst : Thank you very much.