The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Jamie Rollo - Morgan Stanley & Co. International Plc - Analyst
: Three questions, please. First one is really about the sort of cadence of profit in the year, because you mentioned a few things, investment in the
first half ahead of the summer, the Easter shift, and those maintenance reserves, which hit Q4, which, I guess, reverse in Q4 this year. So it would
be great if you could please quantify each of those items.
And then secondly, the guidance of P&L, interest costs of around EUR400 million. It's not much lower year on year. I'm just wondering what you
think a sort of normalized medium-term run rate would be, assuming you get the credit rating upgrade. And obviously, rates are coming down a
bit.
And then finally, just on current trading, Germany, much stronger than the UK. Is that just the market share gains post FTI? And on the UK down
3% for the summer, should we read too much into that? It does look a bit weak.
Question: Jamie Rollo - Morgan Stanley & Co. International Plc - Analyst
: Just on the first question, the maintenance reserve hit, could you quantify that? And is that going to normalize this year, please?
Question: Jamie Rollo - Morgan Stanley & Co. International Plc - Analyst
: Well, it would just be nice to quantify the hit actually, if nothing else.
Question: Jamie Rollo - Morgan Stanley & Co. International Plc - Analyst
: Okay, thank you.
Question: Cristian Nedelcu - UBS - Analyst
: Maybe two questions from my side. I noticed the optimism on UK bookings on dynamic packaging. But if I compare the release today versus
September, if I calculate, well, October, November, it looks to me that there wasn't much growth in bookings year over year. Maybe they were a
bit declining year over year. So just if you can elaborate a little bit why that was the case.
And maybe the second one, looking at the free cash flow building blocks in 2025. Can I run with you -- we're starting from EUR230 million of free
cash flow this year. You're guiding for EUR100 million higher EBIT. You're guiding for a steep revenue increase, so potentially a couple of hundred
million higher working capital. You're talking about TUI Cruises JV dividends increasing close to pre-COVID levels. That could be another EUR100
million, EUR150 million. You no longer have the EUR70 million investment in the RIU JV, the equity injection you had this year in the new hotel JV.
So when I do this math, I'm getting to a free cash flow of EUR500 million to EUR600 million next year. Am I missing any important building blocks
from here? I cannot fully reconcile this with your comment that your net debt would just moderately improve next year. What am I missing?
Question: Cristian Nedelcu - UBS - Analyst
: So if you allow me one follow-up on the cost side. I guess, you mentioned the maintenance charge that was a meaningful headwind in Q4. But
could you help us a bit understand going forward what is the increase in the cost base in the Markets & Airline? We have this national insurance in
the UK. You talk about the investments. Could you help us a bit quantify the pace of growth in cost there?
Question: Cristian Nedelcu - UBS - Analyst
: Thank you very much.
Question: Othmane Bricha - BofA Global Research (UK) - Analyst
: So just if you could be more specific on Markets & Airline EBIT improvements in 2025. Can you explain a bit better the different moving parts
between Boeing, between ETS and SAF?
Investments into operations other cost inflation is on the negative side and on the positive side, be specific about the impacts from fuel savings
and impact from operating leverage from top line growth.
And then more longer term, still in Markets & Airline, can you guide us on when we should think of significant improvement in EBIT for the Western
region?
And lastly, can you -- you just talked about growing the share of international in Markets & Airline. Can you remind us what is currently the share
of international within the division? And how much will it grow, let's say, in four, five years' time?
Question: Othmane Bricha - BofA Global Research (UK) - Analyst
: Thank you.
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DECEMBER 11, 2024 / 9:30AM, TUI1n.DE - Q4 2024 TUI AG Earnings Call
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