TUI AG Q4 2025 Earnings Call Transcript

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

Question: Jamie Rollo - Morgan Stanley - Analyst : Three questions, please. All of them on markets and airline actually. I appreciate it's only 15% of your profit. But if you could first of all, just talk a bit about current trading. It looks like that 1% is quite a big slowdown from the 4% September figure, if we add up the volume in ASP back then. I appreciate you're no longer giving the breakdown of that 1%, but could you talk about why it slowed? And also whether the ASP increases you're getting, if that's sufficient to cover cost inflation. Secondly, on the guidance for the full year, if my math is right, you need a minimum 30% EBIT growth in Markets Airline to hit the group profit increase. But it sounds like it's going to be second half weighted given Jamaica and the Easter shift. Just really wondering about the confidence level in that given so little has been sold for the summer at this stage. And then finally, just on the strategy and market airline. Thanks for the bridge on Slide 18. That's very helpful but it looks like you're getting hardly any margin benefit this year from the first three of those factors, the own products, the line commercialization or the operational excellence or the growth is from overhead costs. So do you think strategy is working? Because what you outlined at CMD was more about revenue growth? And you're using about 11% growth in dynamic packages. So just really wondering about your strategy overall in M&A.

Question: Andrew Lobbenberg - Barclays - Analyst : Can you explain what changed with the decision to take the new boats into the TUI Cruises rather than this time last year when you were expressing confidence that you would keep them at Marella? Can you explain what happens to the Marella fleet as it ages and perhaps explain how you expect to serve the UK market on the Cruises side? And then the second question would be around the growth in dynamic? I mean it's growing 11%. Therefore, the non-dynamic is shrinking, I guess, about 10%. How did the economics work? How strong are the economics on dynamic? And what does that tell us about the economics of non-dynamic? And how should we expect the share of dynamic to evolve going forward?

Question: Andrew Lobbenberg - Barclays - Analyst : Can I just ask, I mean, on the UK -- I mean the existing Marella fleet is older than the TUI Cruises fleet. How long can it go? Or is there a time when you refurb the old vessels and they can just keep going into the future? Or are there technology or environmental issues that for a defined timeline -- a lifetime on them?

Question: Kate Xiao - Bank of America - Analyst : I have a few questions on AI. In your presentation, you mentioned that your products are open to LMMs. I wonder what that means are your products kind of bookable directly on the kind of AI agent level? Or is it through your own apps? I think through bio example, it looks like it's kind of more through your own app. And I wonder if there's scope to kind of integrate further, he spoke about directly at the AI agent level. And then the other question is, are you seeing increased demand right now already from the AI front? Can you quantify the benefits you have seen so far? And finally, on the cost front, any numbers you can share by implementing AI, say, what would the contribution be in your markets and airline business to that 3% EBIT margin target?

Question: Karan Puri - JPMorgan Chase & Co - Analyst : I have two questions if that's okay. The first one is on the balance sheet and cash generation. Just wondering with leverage not too far from your midterm target and with cash generation picking up nicely as well. Wondering if the 10% to 20% dividend payout rate is more sort of a floor with potential for an increase if you continue to delever? That's question one. Maybe I start with that. I'll come back to question two after.

Question: Karan Puri - JPMorgan Chase & Co - Analyst : The second question is actually on the newly announced 250 million cost savings. Despite this sort of incremental 250 million, you've kept the midterm EBIT guidance unchanged. What is the best way to think about this? Does this imply that the underlying momentum across the other buckets of dynamic packaging airline commercialization, et cetera, is tracking a bit behind? Or is you just being conservative? How should we think of this, please?

Question: Leo Carrington - Citi - Analyst : If I can ask two related questions, please. In terms of the travel environment in Europe, how would you frame that right now? You've referenced the competitive nature of the environment. Is that your competitive tension? Or is that in the context of some kind of caution from consumers? And obviously, that was the later profile of bookings over the summer. And then looking forward, for the ASP growth you've referenced for winter and summer, is this mostly like-for-like pricing? Or is there a mix or duration effects that are also moving this metric?

Question: Richard Clarke - Sanford C Bernstein & Co LLC - Analyst : Just starting on Cruises. Are you seeing any benefit in Europe, maybe less capacity, some of the other cruise companies have redirected capacity to the Caribbean? Is that helping yield? Are you thinking about your planning for where you're going to run your cruises based on that? And maybe in that context, why are you only seeing prices flat, particularly where you've got new ships, why price is not growing in the cruise business? And second question, I think this year or next year, I guess, you're saying the big contributor to the 7% to 10% will be the markets and airlines business. How should we think about -- I know you've got a useful slide at Slide 42, but just the shape of that 7% to 10%, would you expect beyond '26 we would see the hotels and the cruise business being the majority contributor to that 7% to 10%. And then thirdly, I know you sort of explained the dividend sizing. But in the past, you used to at least be out of return to true dividend back as a dividend. It looks like your dividend is going to be below the TUI Cruises dividend to you. So just wondering why at least that isn't being able to pass back to TUI shareholders.

Question: Andre Juillard - Deutsche Bank AG - Analyst : Two questions, if I may. First one about the German market and the reinvestment plan, which has been presented by the government. Could you give us some more color about your feeling on the consequences of this reinvestment plan and the trend that we could see and the potential good news that we will see in the consumer and the travel and leisure sector. Second question about the booking trends. You are relatively cautious on the winter partly because of the negative base effect, but what do you see in terms of trends on the last booking? And do you see any significant evolution on upgrades or downgrades in terms of segmentation of the bookings?

Question: Andre Juillard - Deutsche Bank AG - Analyst : Yes. And the consequence it could have on the consumer side.