TUI AG

Good morning, ladies and gentlemen, and a warm welcome to the TUI-HE conference call regarding the financial year 24 Q3 results. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation for the ones dialed into the conference call. Let me now turn the floor over to your hosts, Sebastian Ebel and Matthias Kiel.

Thank you very much. Ladies and gentlemen, a warm welcome from our side to TUI's third quarter results presentation. My name is Nicla, Group Director Investor Relations, and I'm here with our CEO, Sebastian Ebel, and our CFO, Matthias Kieff. They will present a record quarterly performance and provide an update on trading and outlook. And as always, afterwards, we will be available for Q&A. And with that, I have the pleasure to hand over to Sebastian.

Thank you, Nicola. A very warm welcome also from my side. I'm very happy to present with Matthias our numbers. You find that in a good mood in Berlin, in our office, in a good mood not only because of the third quarter result and the good outlook for the full year result, but also because we're seeing very good progress on our transformation program. We have given the promise that we will unlock significant value by focus on operational excellence and by transformation. And we will give you more information with the full year result on our transformation. Today, I can say that we very much leverage on our unique quality experience products, and we have more and more positioning as a successful platform of business. And by knowing how the progress is on the transformation, we will stay committed to our mid-term ambitions to have an EBIT underlying growth of 7% to 10% per year and to further improve the net leverage. So the agenda is, like always, I will give you some highlights. Matthias will dig into the numbers. Together we will do a trading update and outlook and a summary, and then we're looking forward to the Q&A session. If we look at the highlights, we can report another record revenue quarter with 5.8 billion, which is almost 10% up. compared to last year, and a significant improvement in our underlying EBIT to 232 million, 62 million up, which is 37%, and all business contributing. Markets and airlines are doing very strongly with significant increase in bookings. Also, the ASP is up 3%. Booking has accelerated the growth. The ASP is slightly less than we had before. This is purely a mathematical issue. You may recall that FDI went into insolvency in Germany. They were at a very lower end of the market. And as we got our market share with the FDI customers, that had a mathematical impact on the ASP. The ASP on the products we have sold before is stable. Great result in holiday experiences. Hotels very strong. surprisingly strong. You may recall we had the Suez impact. We had to reroute cruise ships from the Suez Channel around the southern part of Africa. and we were able to offset even more of these additional costs. And also amusement has seen significant growth with our product. And by this, we can reconfirm the guidance we have given to increase the EBIT by at least 25%. I think this is a good promise we have given to you and the markets. If we look into the sectors, hotel, significant increase of profitability, 20 million. Now we stand at 339. And if you look at the average daily rate increase with 7%, this is a very good result for the seasons just before the peak season. Cruise, 30 million, almost 30 million, up now at almost 200 million. What is amazing here is not only the occupancy increase to almost 100%, technically it's difficult to overachieve that, and especially a daily rate increase of 7%. Musement has also seen an improvement of results. We have more focus, and this is important also for the future, for the next quarter, but also for the long-term future. We are not so much in buying new customers with a low low revenue, average revenue, a number where the margin is, in absolute terms, not high enough. We are focusing very much on selling the own products where we have a very good margin. Therefore, this 14% increase are important. Transfers are almost in line with the growth of the tour operator, which we have seen. If we come to markets and airlines, an increase of 10 million. Two markets are contributing positively, the northern region and the central region, whereas the western region is negative. This is mainly due to the introduction of the new IT systems we had and some delays in the max delivery. So these are one time effect which should not occur anymore next year. Some highlights, which is always good to be anecdotally, what are good examples for our strategy. One example from hotel and resorts, or two examples from hotel and resorts, and one example from amusement. Rio opens the 10th city hotel, a city hotel which is very much focused on leisure customers. This is pretty unique in major cities, and what we do see is very, very strong profitability. two hotels in New York. We have one in Dublin. We have one in London. We have one in Madrid. We have one in Panama. I think I've now forgotten two. We have one in San Francisco and now it's, and in Berlin. Thank you, Nicola. And the one in Chicago is the next one. And that's really great because we bring the TUI brand also in the source market to life and people when they go to a capital city or to a city can experience TUI. Another good example has been the opening of the Mora Hotel, a six-star product on Zanzibar. Very well received, 100% occupancy at the moment, very good prices. There is a market for that. It's a different product to other six-star hotels because it's very, very much focused on leisure customers, the big market of leisure customers. Musement, we are very happy. that we were able to gain a last minute as a B2B partner with all the brands. It clearly shows that the strategy, one, to focus on B2B strong partners, and second, on B2C with our own products works very well. And we always said, this is a source of new customers. That's what we see. And with all the activities, we will accelerate this growth. Sustainability is part of our DNA, it's in our heart, and it's not only altruistic, but also because we too see the commercial sense in it. And two good examples, one is the mine shift 7, which was delivered a couple of weeks ago, is the first ship which will be green methanol ready, which means that if we are in a harbor, we will source green electricity of, what is the name, of shore power. And this means we buy this wherever it's possible, green electricity. And this is valid then for 12, 13 hours. And the remaining part then will be done by e-LNG or e-methanol. And that will bring the cruise business in a very different territory when it comes to sustainability. And another thing we are very proud of, the one or the other may recall that we build a huge solar plant at our property in Hannover in Germany. We are now with all the activities in Germany, office activities, retail activities. We are 100% CO2 free. But again, this we want to achieve also in our hotel business. We have now 25% of our hotels have solar production, and a major step has been and will be that we just launched three significant big solar plants in Turkey. Another three, which brings us to six, will be opened within the next weeks, which means that our two hotels, owned two hotels in Turkey, will be will be carbon-free. And the good things, it's not a contradiction to profitability, it just supports the profitability as in the medium term, it's even getting more important to the customers. And I think these are good examples about our sustainability agenda. And with the nice words, we come to the heart, also nice numbers, which will be presented by Matthias.

Thank you very much Sebastian and thanks very much everyone for joining this call. Good morning also from my side. Let me give you some further details on the quarter numbers and before we then come to trading and outlook. All in all Sebastian already summarized this has been another good quarter for the Group. This clearly delivers on our targets for the full year. Just something to remind everyone on this is the eighth consecutive quarter in a row with a strong increase in profit. That's something we, of course, are very pleased with. Two years. Absolutely. So I think this has been quite a great journey if we look back on that coming out of a crisis. And at the same time, this is also a trigger because we have in this quarter had the final step to redeem KfW and effectively do the final refinancing step for that period. So with this further progress on balance sheet, I would like to start before I go into the bridge and then the details to P&L cash flow and balance sheet. We were able to place a convertible bond around 500 million in July. What is important is three facts. One is, this is just to reiterate, this is the final step to fully cancel our KfW credit line, an unutilized line as we already discussed and presented. quarter by quarter still this was used as a headroom and at the same time we had to put in the existing convertible also for 2026 and we always said these together we would like to address we address this with the placement of a new convertible 500 million that was immediately used to buy back effectively the old convertible and thereby that's the second important fact we will have a around 18 million interest saving, cash interest saving from next year onwards. Just to mention it, because that has an impact on our fourth quarter and on the full year numbers, then on interest, there will be because the repayment of the old convertible is then at par market price plus we have to, you see in valuation impact, convertible is always discounted, and that kind of, you can call it step-up, effectively non-cash impact, that you will see as a P&L interest charge in our fourth quarter of around 45 million. So these are the three important facts, KW, handbag initiated now, refinancing done, significant interest, cost savings next year around 18 million, and then please note in Q4 we will have and one of impact on a non-cash charge for the valuation of the old convertible by buying it back. Now, coming to the quarter, as Sebastian said, this has been a very good quarter, another step towards our targets for the full year. And what I really like is that all segments have really contributed to that. As Sebastian alluded on it, also cruises, despite the cost that we had for Suez, one, the traveling around Africa, but also in particular the canceled voyages that were already sold that we couldn't execute upon, so that's really a good result. Markets as well, the Western region situation is a bit special to the rest, and then the strong profit contribution from hotels continues. And that overall results in our P&Ls for the quarter, which is in line with expectations. What has been important for me, one, it's revenue, 9% growth. I think that's something which underlines, again, holidays are a key priority for consumers. Our guests, they want to travel with us and they want to continue to travel with us. This is really encouraging and it's a strong signal that holidays are prioritized in such a high way and that we in the end can realize the record revenue again this year and are 9% up. The P&L, of course, shows the EBIT improvement for now for the nine months, year-to-date for the first time also positive. That's really great. And then irrespective of the refinancing that I just touched upon, which will have an impact next year, already also this year you see the strong benefits that we have achieved in reducing our interest costs. That year-to-date is a 75 million improvement. We would normally lower our guidance below 400, but with this special charge in Q4 that moves us up again, so we would then as a result formally be at the end of The guidance at the upper end, at the same time, underlying, you could call it, that we will see in a minute on the cash side in particular, you see the strong improvement. One in line with what was our expectations during all these refinancing steps, but secondly, also a product of all the additional initiatives. So that's something I'm quite happy with. Now coming to cash flow, you see that if I may focus on interest first and not one year-to-date improvement of around 80 million in the nine months, also an improvement in the quarter and then the guidance has been adjusted to that reflecting that improvement to a new range of 310 to 325. The improvement I expect in the fourth quarter to be a bit less because also last year we were already out of all drawings in the fourth quarter. So you talk about less interest kind of savings. At the same time, we have some products now on balance sheets for interest savings. payment during the full year, like the high yield bond. So that's all in all, the improvement will be less, of course, in the fourth quarter. Still, the reduction is really a great achievement. Working capital, again, also in line with expectations. I think there are two effects, just to mention on the quarter, why it's a bit lower than The delta is a bit lower than last year's same period. One, Easter was earlier, so in Q3 we already paid more invoices for the Easter period. And secondly, Q3 last year still had quite some ramp up between the seasonality winter towards summer. So that's something I would say this year a bit more normal in terms of development still on the balance sheet working capital at record levels. So something we are also very pleased with. Last point before I summarize cash flow is the net investments. You see in the quarter, this is in line with last year. Year-to-date is higher. This includes the payment for the final payment for funding the new joint venture with Rio. At the same time, I would expect that we are more towards the upper end of the guidance and investments because of Some phasings on the projects, still a bit difficult on the last Euro to forecast that because you always have these construction payments and you have also on the delivery schedule still some moving parts. But overall, I would say the corridor tends towards the upper end maybe at the upper end or a bit higher. And other than that, on cash flow, important that the lease amortization, the amortization on asset financing, what we saw on the quarter in line with our expectation for the full year of around 0.6 billion, just to make that point also clear. Now, as a result, cash flow brings us to a slight improvement on our balance sheet. Again, that's now 2.1 billion. I would expect that this further reduces in Q4. We will probably see less of a working capital outflow as a net result in the fourth quarter than we saw last year. And we also have the profit development, so let's see on that. But overall, I would say this also confirms our slight improvement that we have guided. So with that, I would hand back to you, Sebastian, because that brings us to the outlook and the basis of course, the bookings.

Yes, thank you very much. We are happy with the bookings in summer and for the winter, the first glimpse into the winter. The programme with UK and Germany is now roughly sold at 90%, which means still 10%, but we are very close to the target. Bookings are up 6%. There we have seen an acceleration, especially in Germany, but also in the UK. There were a few weeks which were slightly slower due to the European soccer at the Olympics. What we have seen on the recent days and last two weeks a very strong late business for August, for September, but also going into the first quarter of winter. That is very nice to experience and significant volumes are getting in. So we are very optimistic for the next, for short-term and medium-term. It's a good picture. ASP is slightly down, as I explained before. It's a technical effect. The increase in Germany came from very short-term bookings because of the FDI insolvency. FDI is in a very different market segment where TUI never had been strong in the lower end segment. And for the first time, TUI Germany was able... By the way, it's also Switzerland, it's also Austria, it is also Holland, France. We were able to capture our market share market segment, and as the average ASP of these customers are significantly lower, this leads to a decrease in the ASP. Otherwise, we do see a stable development there. So, a nice picture also looking into the winter, especially in the first quarter, strong bookings, UK on the same level, like a good level of last year. and it's very promising that especially now the months till the end of this calendar year are booked very well with robust pricing and with a good outlook. Different to the years before, we have now a normal hedging pattern. We were able to hedge as we wanted to hedge and others wanted us not to hedge, and this is good. If we compare with competitors, I think the amount hedged and of course the rates hedged are supporting a further improvement of profitability. If we go into the details, asset hotels in the fourth quarter doing very well, plus 10% on the daily rate. That is amazingly strong. And you could ask, why is that happening? We are getting more and more international. I think one of the targets of TUI is to get out, not to get out, to increase the share outside the region of Europe. Of course, Europe is our core business. We want to get stronger. We want to go into the markets in Europe where we haven't been like Eastern Europe, Southern Europe, but going out. And the front is their hotels and resort where we have a strong footprint. in the caribbean and now also in in the cluster of west africa the cluster of east africa the middle east the far east the first robinson club in vietnam the first hotels in in in china and all this leads to benefiting from the strong demand and price pattern of these markets occupancy also again a slight increase on a high level which is good cruise 11% more sold cruise days. You should keep in mind that we have just introduced mine shift seven, so we increased significantly the capacity. And occupancy with plus one sounds small, but when a ship is full, it's full. And we are above 100% in the next quarter. So that's why it's a great result. And also the daily rate is is actually stronger because it's more of a mixed effect than it looks like as it is today. Experiences sold significantly increased. Very, very much a focus on own produced products because there is a higher margin. And maybe, Matthias, as the guidance comes from the finance head of CFO, it has a special

Thank you, Sebastian. Indeed, I think you mentioned in the beginning, already in your summary, what we can do today is that we can reconfirm our guidance in line with the policy that we had in the last quarter, that at least a growth of 25% is expected on EBIT. At the same time, you saw the development on revenues. and that also remains unchanged for the full year. And I think, again, there's something which personally for me is really important because it shows the consumer is there and a 10% growth in revenues means that our consumers, they all pay more for the days we have more customers. And that's encouraging, as you also said, for the coming seasons. In detail, by the segments, I think to cut this short, what we saw in the quarter, what Sebastian presented, and the details on the development in Q3. That's fully reflected here in terms of the full year development of each of the segments. And then on the details, coming from adjustment down to that, that's all I covered when we talked about the details in P&L cash flow and at that point. And with that, I would hand over back to Sebastian for final words on this conference call.

Thank you, Matthias. And as I said, we are very confident on this year, but we are also very confident, not but, and we are very confident for the future season, for the future years. Yes, we focus very much on operational performance and we do see significant opportunity there to further improve. And due to the transformation through the rollout of platforms going into more markets, we want to grow and we are seeing it that we are growing significantly by implementing these global platforms and this profitable growth we want to and we are doing to accelerate. An example here is the dynamic packaging. is Eastern Europe, Southern Europe, Latam, and a very strong focus on profitable growth. Important is profitable growth by improving margin due to higher revenues, but also by getting better cost ratios. By improving profitability, we are going to strengthen further the balance sheet, and this only works when we are really focused on cash, That's our daily business. We look at cash every day. And we know that further improvement of free cash flow is required as our target. And we will achieve that. And that's why we can confirm our mid-term ambition with an EBIT growth of 7% to 10% per year to improve the net leverage significantly. And of course, by doing that, to improve the rate With all what we do, the transformation we want to bring to the globe, we have done with the hotel, also with all other products to be not only the very strong brand in Europe, but also outside Europe. And there by the combination of performance and transformation, we think that we have a lot of opportunities and the management team, and I must say, Everyone in TUI is very excited about what we are doing and what we can achieve. Sometimes I say it's a giant which just awoke. Awaked? What is the right English word? Woke up. Woke up. Thank you, Nicola.

Thank you, Sebastian. Thank you, Matthias. I think we are now available for Q&A. Looking forward to your questions.

Thank you very much. So dear ladies and gentlemen, if you are dialed in to the conference call and have a question for the speakers, please press 9 followed by the star key on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you wish to cancel your question again, please press 9 and star key a second time.

So one moment please for the first question. First question comes from Jamie Rollo.

MS.

Over to you. Thank you. Good morning, everyone. Jamie Roller from Morgan Stanley. Thanks for taking my questions. Good morning. Good morning. I've got a few on markets and airlines, please. So the third quarter profit, as you showed, did double from last year, but it's still pretty low compared to the third quarter of 2019 once we adjust for the Boeing delays in that year. So can you talk a bit about the margin outlook in markets and airlines and in particular what's happening on the dynamic packaging side and what impact that might be having on margin? Secondly, just on the outlook on markets and airlines, you're talking about slightly weaker ASPs, which is all due to FTI and mix. Are you seeing any slowdown anywhere in the market, whether that's your seat only business, so I know you don't do much, or whether it's the low end of the market. And what are your capacity plans now for the summer? You had, I think, something like a 10% plus at all capacity increase plan. And then finally, a general question on the full year guidance now looks pretty conservative. 25% growth would be sort of no growth at all in Q4 profits, or indeed a small drop. Is everything in the fourth quarter we should think about whether it's CrowdStrike or FTI or any moving parts that we're perhaps not aware of. Thank you.

Maybe I start and Matthias, you step in. If we look at the bookings, we don't see a slowdown. As I said, the short-term bookings, they are good. Also, the price quality is good. Maybe it's because of the positioning of TUI. We are more in the upper end. And this is a very stable and dynamic business. That's why I think we are positioning well. And by FDI getting out of a segment we are benefiting from that as well. And therefore we are confident also for the short term, but also for the medium term. And one other thing is, as we have invested and what we are building now come in place. We talked about the direct access to hotels, to airlines a lot in the last 12 months. Now it is coming and that's why the dynamic, which is in weaker times, bringing more margin, more volumes, is supporting us very much. For example, today we started with Ryanair in Germany, which is a great achievement. So we bring more and more content into the system, which supports our growth ambitions. If you talk about the performance of market airlines, for us, due to how we do price, the quarter, the most important quarter is quarter four. And there we are also very optimistic about the development there. You're right. And that's why the transformation has been and will be so important. There is still a significant part where we can catch up. We are on the way. And besides all the other things, what we do, the focus of being excellent to close the gap to the one or the other competitor is so important. Matthias, would you like to add?

Maybe on the question on the comparison to 2019, in detail between the two quarters, in Q3, between the two years, and indeed restated for the max, I think one is that generally I think it's fair that the margin level is a slightly different one versus 2019, because since then we've seen a lot of inflation, and that's something which was more or less costs coming to the sector. In terms of the comparison of the performance then, if you then look, I would say it's not so much market, it's certain units where we just see different patterns. And Scandinavia, for instance, in 2019 had a record performance last year. I think we were quite transparent that this is something we need to work on and are working on. And that's, of course, something which is on its way to get back towards their targets and our targets on it, just to name an example. And the last point is, I don't, to be honest, I don't recall when Easter was in 2019. And that, of course, always has a shift in profits between Q2 and Q3.

And then maybe if I add, which is also a good outlook, we haven't seen the positive impact of the fleet rollover. I think this is something to come when finally the MAX, especially the MAX 10, will arrive. We really are proud that the network stability has never been as good as this year, at least I can't remember. with the exception of the two days around the CrowdStrike, we haven't had to cancel flights. The DBC costs or the delays are at a historical low level, and that in a situation where we don't have the new aircrafts yet. And taking this into account, the network quality is good, and there is even more positive to come to what we see today.

then on the guidance if i may i think how i look at this i mean we had a clear policy throughout the year that we followed and you can call it conservative or careful but i think it's something as you also said in the call is beginning this is the eighth quarter with an increase in profit and we have quite a stable framework throughout the year. That's something that we continue to use going forward for the rest of the financial year. I think that's maybe the best description to look at that.

And it's better conservative to underline at least than be different.

Thank you. And so just on the capacity question, have you reduced your capacity plans in the UK or they saw what they were at the last atoll increase?

Maybe we can answer this question later. I will try to... I'll do it out of my memory. There are different impacts. One is, yes, it's on the 219 level. Further growth, it's more on the dynamic part, because as said, we had to take in lease aircrafts because we didn't get the max aircraft with all the cost impact and so on and that's why it's so great that we are able to achieve or overachieve the profit targets and even if we would like to increase a further capacity and I would say the room is there for us but at the moment we are as many other companies are limited. On the other hand, if you look at our business with EasyJet now, Ryanair has started to work. The UK will follow in 2025. This gives us a big upside because there we are in a catch-up or we can get into a catch-up mode. And by the way, this is also true for the direct connect to a hotel use and this will give us significantly growth opportunities whereas we don't have to increase the fleet which is technically for us at the moment not possible and it will be possible when we are back to a normal pattern hopefully 26 of going thank you very much thanks a lot so we are moving on to the next question the next question comes from james roland clark of barclays please go ahead

Good morning. Good morning. My first question is just on the acceleration of bookings in Germany that you've outlined is sort of partly or mostly to do with FTI's exits and picking up customer volumes from there. It's gone from 7% the last update to 10%. Is that number still accelerating? And perhaps you could give us an idea of how much of that change or what it would have been X the incremental customers from FTI's exit. And then dealing with FTI again, should we think about this jump up in bookings that we're seeing in the summer for the German source market as potentially being how to think about sort of FY25 boosts, or could you do better than that? And maybe you could also talk about the FCI's exit, what that could mean in the medium term for your tour up hotels and cruise business in terms of revenue and profitability. And I guess just finally, just following up on the guidance question from Jamie, I think consensus sits at about a 23 million EBIT growth in the fourth quarter. And I know you're very conservative with your guidance and you've remained steady in that outlook throughout the year. But are you confident in where consensus sits? or increasingly confident or more confident, try to give us a bit of color around that and why 23 million is the rights of growth in the fourth quarter. Thank you.

Maybe the consensus question is answered by Matthias. I will take the more fun part, the FDI question. The insolvency of FDI was a sad thing for the customers who had booked with us. because they are still waiting for the refund of their money. So these customers hardly had the opportunity to go on vacation, again, because they haven't had the money back from what they had paid before. So we talked about pent-up demand in corona times. Here there is probably a FDI pent demand for next year. Is it big? it huge it's reasonable um and it will happen and why have these people not very very often not able to rebook and and and paying a second time because as said they are positioned more on the lower end where families where money is more an issue than uh with with with our customers We tried to support the hoteliers and the FDI customers as much as possible. The team went after the day of insolvency immediately to the destinations to discuss with the hoteliers to help them to overcome the summer issue, the summer problem, the summer challenge. And we were able to get most of, we got all the hotels we wanted to have, so we were able to grow the base, the future base, because quite often a customer is linked to a hotel and you have the hotel, you sell it. We supported the customer very much first by attractive offers. And I must say that was done together with all other competitors. They reacted very much like us in favor of the customers. We also made payment terms that they have to pay at departure and don't have to prepay. These were all limited measures. So we are going back after the summer to a normal pattern. And that's why I think the assumption is that there is that we get at least our fair market share of FDI customers. And second, that there will be a profit, positive profit impact for the next years. And overall, I think there have been probably reasons why FDI went into insolvency, and these reasons going away should also improve the market conditions in Germany. So it's one cornerstone of our... I mean, it's something which supports, and that it was not... I mean, it supports our targets we have, more important for us is and has been to accelerate the transformation that whatever and whoever is in the market we can win more and take the profits into our pool.

Thank you Sebastian and then I think on the guidance I think what I can reiterate is we are quite transparent on the KPIs for the fourth quarter. Sebastian, you mentioned what your expectations are in terms of the forward-looking business, and I would just turn the question around. If we were unhappy with consensus, if we would feel that we deviate with our own expectations, we would anyway need to talk about this, because then we would be obliged to mention this. that may be helpful for you.

Thank you very much.

Thank you also from my side. The next question comes from . Please, over to you.

Thank you very much. I just want to follow up on those FTI volumes. Can you quantify maybe what market share FTI had in Germany and how much can you grab both in the short and medium term? And also, can you quantify the difference in absolute ASP between FTI and your own volumes so far? And also, as this volume comes with a dilutive impact on the pricing, Can you explain the moving parts and the impact on the margin? Thank you very much.

I don't know how many numbers are available on FDI. When you look at the absolute numbers, you should have in mind that they had a strong component business, selling car rent, selling flight only. So the numbers you quite often hear my educated guess only half of it is is is package and uh from what i've seen again not confirmed their latest market share was seven eight percent i have no idea how much is out of that was component how much was a package but there's a significant component part to it and i would be and the team would be unhappy if we were not able to get our to get a 30% market share out of that. So it's a significant volume. Again, the numbers are very, very difficult to calculate. And second, the customers who had booked with FTI, they were hardly addressable this year because these people needed to get the money back. They haven't got the money back. The process of getting back the money has just started. I've no idea if it takes another four weeks, eight weeks or even 12 weeks, but it will be outside the summer season. So the impact that these people can think about going on vegetation again will probably start in winter and will be more important for next year. If you ask about ASP, again, very difficult to judge. It will be significant on the package. It will be significantly lower, would be my My estimate, if you have a high share of components, it will even further bring the things down. And that's why it's difficult to judge. What I can say is when we got our share of the package, FDI package is one thing, but we also got the share of car rental customers, that is educated guys at 200, 300, 400 euros on average booking and not 1100. So there are a lot of structural effects which we don't know yet, and the FDI customers are not yet distributed to all the competitors, including us, as a lot of people were not able to book.

Thank you. And do you still expect the impact on the margin to be accretive or dilutive once you integrate those volumes in the midterm?

Can you repeat? It was very difficult to understand your question, for me at least.

Yes. Can you explain how accretive or dilutive would these volumes be on your margin?

As I said, I would say the impact on this year is probably neutral. For the future, it will be, of course, value-creative. It will be volumes which will increase the load factor on our aircrafts, which helps us to get hotels which we normally wouldn't have got into our portfolio. We will have the volumes in our transfers. They will buy excursions, so there will be a significant positive impact this year. I would say that has been a neutral effect because you should not underestimate the pure logistics to ramp up several hundred thousand of customers was huge. And for us, that was very well recognized by the market to make sure that TUI is the problem solver for the customer. is important. There were two companies who were very much engaged in bringing customers back, FDI customers. We were organizing that they got payments, of course, that will be reimbursed, but there was a lot of effort and as I said, payments just when they went on vacation, attractive offers so that they could book and it was all on the late business and not on the long business, which is commercially a very attractive one. But in future it will have a significant effect on us and on the market. And you should have in mind it's not only Germany.

Thank you very much.

Thanks a lot. The next question is from Jaina Mistry, Jefferies. Over to you.

Hi, good morning. Thank you for taking my questions. Good morning. Hi. I've got two questions left. The first question, when we last spoke, I think you said that summer would be made or broken through the late market. I wondered if you could give any colour on how the late market has performed versus your expectations. You've mentioned more robust pricing in your outlet commentary over the summer. Does that mean that pricing has accelerated into later bookings? And then my second question is on winter. Now, I know it's still very early days, but you've also spoken about robust pricing over the period. Should we take that to mean kind of the same as what we're seeing in summer, 3% or something slightly higher than that? Thank you.

I can't remember saying that what you have said, what I've said. Of course, it's always the last 10% are the ones which makes a season good or not as good, but that everyone would have said a year ago or two, maybe not in COVID, but outside COVID. And especially in our business, July, August, September are these months. And when I take out the effect of FTI, which we discussed, it has been a fairly uh normal uh lates market slightly higher volumes and um so nothing special from my side to add maybe matthias you want to add but that would be my my summary and again it's six weeks to go and of course if you see seven days great bookings you're more optimistic when the market seems to be yesterday more difficult and it looks good at the moment and on winter I mean, the UK is the most advanced with one third. They're doing well. Germany on 10% less or other markets, very much in line with other winter. We have seen a dynamic is growing, which supports our growth. For the time being, I would not expect something extraordinary. therefore it's also so important that the outside european activities or the cruise activities the hotel activities are even performing better and that's why in total we are confident about a good winter next year and also a good summer 25. you know just to reiterate i mean this is like a first

kind of lifting where we are with bookings and showing some illustrative numbers. That's what we normally do in that quarter. And then there's the more formal update in September with them, where we also, from the booking side, Sebastian just mentioned, UK with the third, you can expect all other markets on 10% in the booking curve behind that. It's all within expectations, but that's why we normally don't give more numbers. And again, that will be delivered in September. The volumes are still low, but it's robust.

That's very helpful. Thank you. Can I just confirm, when you talk about robust price levels, does that imply growth at this stage?

Sorry, the line is not perfect. Can you repeat the last part of the question?

In the release, when you talk about robust price levels, does that mean prices are up year on year?

I mean, we want and we need to cover inflation. And that's why it's important for us that we, that prices are up.

Okay. Thank you.

Thank you very much.

Thanks a lot. Dear ladies and gentlemen, if you wish to state a question for the speakers, please press 9 in the star key now to enter the queue.

At the moment, there are no more questions. Ah, next question incoming from André Julliat of Deutsche Bank Equity Research.

Good morning. Congratulations for the results. Good morning. If I may, first one about destinations. Did you see any significant change in the destination of your clients and maybe a significant rebound on long haul? So this is the first question. Second question, coming back to the competition, the bankruptcy of FTI and the former one of Thomas Cook a few years ago, did you see any regulation or specific rules coming up to have easier refunds? Because you mentioned that it was quite complicated for FTI clients to be refunded. Did you see any significant changes that we should take in consideration in our assumptions and in your cost base or rules for distribution in general? Thank you very much.

If you look at the passenger's development to the different destinations, there are destinations, I would say, with normal growth, 5%, 6%, 7%, like Spain, like Greece, like Cyprus, like Italy, And then there are markets which significant growth, double the growth. And this is Turkey, this is Egypt, and this is Cape Verde. And that's when I always say, when we talk about where should growth go to in it, it's important that we have the capacity outside the markets where capacity could be constrained and could be limited. We have a very strong footprint in Turkey with own hotels. We started 10 years ago to build footprint in a couple of words, which is a very good business. And third, we have also through our hotel joint venture, a strong footprint in Egypt. And that's, I think, and they are outside Europe, they have a cost advantage. And therefore I would expect that these markets will see over-proportional growth and we are well positioned. Long haul. out of Europe is slower because of the... And if you see that on the hotel side, we have 10% increase, which means that hotel prices in the Caribbean have probably gone up even more than 10%, 12, 13%. And that, of course, is a cost situation, which makes it sometimes harder to sell a trip to Mexico because the Americans are paying a lot more. We are benefiting from that in the hotel business These customers then go also to Egypt to cupboard or which seems to be get normalizing now is the the Far East is Thailand is Sri Lanka. So I would say that there is further growth to be anticipated in these Middle East Far East countries in the short term. And there was a question on the route concerning FTI. We don't. At least I would not expect any significant changes. Of course, we know that there was a new directive, a plan. We think it will be for our markets on a very similar level. It's more the impact that component seller could have an impact, which would be very much in favor of it. I have no idea if that will happen or not, but I think whatever happens, There is an opportunity. It improves our competitiveness. Most likely, I would say it stays as it is.

Okay. And just to come back on destinations, did you see any recent changes because of the situation in the Middle East and geopolitical situation in general or nothing really significant at this stage?

I mean, there has been small things, you can't fly over Russia, so therefore you have higher cost if you go to Thailand, but that is now learned after these horrible two years with the Ukrainian war. The business to Israel, to Lebanon, to Jordan has actually has never been a big, we talk about a few thousand customers, so not relevant at all. And what you have seen, yes, there were maybe two weeks where it was lower for Egypt, but that has picked up. And if you see how strong Egypt is growing, because it's such a great product, if something happens, it's very short term. And the effect is that there is a small shift from A to B, but nothing more. And that's always, I mean, that's why it's so important that we have enough capacity for when the customers and it's more priced than anything other reason, has other thoughts and maybe a destination like Mallorca, it was really for this year and you could hardly get a reasonable bet. And then it's important that we have enough bets on Cup World or in Turkey. And that's what we are having.

Okay, very clear. Thank you.

Thanks a lot. Next question is from Jurgen Kolb, Kepler-Chevreau.

Thanks very much. Basically one question with several components maybe. First of all, housekeeping really. Any update on the situation with Boeing? What's the current status? Also maybe a quick and first look into 2025. And then in this respect, I understand you don't want to be too precise here, but The negative effects from CrowdStrike, from the Red Sea, from the Boeing, all had obviously negative implications on your EBIT line. Maybe any further indication as to how much that really affected your EBIT would be helpful. I understand you don't want to be too precise, but maybe a little bit of an indication as to what the total amount and what the level has been. Thank you.

Before I get too precise, I will ask Matthias to answer the question. On Boeing, as I said, I'm really proud of the team that we haven't had the lowest number of cancellations, I think, in Germany. One, the delay, three hours delay, a historical low number. So the disruptions which could have occurred and others had by not getting the delivery of Boeing, we have diminished, and that is really something we are proud of. As I said, we expect that the deliveries we are waiting for will come in 2026 and therefore we will manage the situation well in between.

I understand the question on being more precise. I mean, on one side, of course, there have been some events at the same time. Events are not new for the business. We've shared with you the KPIs, which are positive. And then I think the best is what we can do. I mean, again, reiterate, we have a clear guidance policy this year that we follow. And I think we have done the same when we entered into Q3, and we're doing the same again in Q4. Understood. It was a try.

So thanks a lot, Mr. Kolb. As of now, we have no more questions in the queue. So with that, I would like to close the Q&A session, and I'm handing the floor back over to the hosts.

First, thanks again for attending. A good quarter, a good full year, and what is, I think, for us even more important is a good prospect, the focus on excellence. There's a lot of room for possibilities of improvement, a strong focus on transformation, a lot of opportunities outside Europe, as we have described, We are not only getting ready, we are seeing the first results of this, and that makes TUI for us as management so exciting that we are not in a downhill battle, but we really can focus on the areas where we can win and where we can change TUI. And I said the TUI of tomorrow will be very different of the TUI of today. And the long-term vision is to really have a strong global