TUI AG

Good morning, ladies and gentlemen. A very warm welcome here in Hannover from our TUI campus for our second quarter 2025 results presentation. My name is Nicola and I'm Group Director, Investor Relations. And I'm here with our CEO, Sebastian Ebel, and our CFO, Matthias Kiep. We are very pleased to report a strong set of numbers which exceed expectations. And with that, I have the pleasure of handing over to Sebastian and Matthias. And Sebastian, you go first.

Yes. Thank you very much. Happy to present the Q2 and therefore the H1 results to you. The agenda is like we do it in the past. I will give the operational and strategic highlights. Matthias will dive into the numbers. From my side, the trading outlook and a short summary. The Q2 is the weakest in our year's performance. We always say you can't win the year, but you can lose the year. And therefore, we are pleased what we have seen and what we can report on. Just as we will hear quite often today, this quarter has a strong impact by the shift of Easter. Last year, Easter was in March. This year, it was in April. And that has two effects that the big Easter business moved into April. And the booking, which is normally starting strongly after Easter, also shifted into April and into especially into May now. We do see that global travel demand is robust despite all the geopolitical and macroeconomic uncertainties. And with these uncertainties, our focus is very much on margin protection and on cost reduction. and the one or the other were with us at the capital markets day in in madrid we got a lot of positive feedback and we are very thankful for this feedback and we explained to you our strategy for creating the global curated leisure marketplace where we do see significant progress and we also promised not only the improvements on cash flow and balance sheet but also to give you the to define the shareholder return strategy at the end of the year and that's what we will do the most important part of our presentation today is that we can reconfirm our guidance for this year and for the medium or longer term the seven to ten percent EBIT growth if you look at uh The summary, we delivered 3.7 billion revenue plus 1.5%. As said, Eastern was a couple of weeks later in April and an underlying EBIT of 207 million, which was mainly driven by the Easter holiday shift into Q3. Holiday experience remained very well on track, another strong growth quarter and a strong demand looking forward for our unique and differentiated products. The market on airlines, we had a good late market in 2024-2025 with bookings up 2% and ASP 4%. For us, it's very important, you see it for summer as well, that we keep the ASP increase of 4% to protect margins. Summer is on last year's level. Again, this is the effect of having a strong look on margins. And you see still here slightly lower, minus 1%. What we have seen is what we had expected after the 1st of May, a strong increase in booking. That is what is coming, what we do see now. and which makes us very confident for the rest of the year. And as said, it's important that we maintain the 4%. I will talk a little bit later also about dynamic because this is now with the implementation of the direct links to airlines and to hoteliers picking up a lot. In summary, we have seen an increase of EBIT versus last year if we adjust for Eastern. And as I said, we can reaffirm our full year 25 guidance, which, by the way, not every company can do. If we look into the details, you see a strong hotel result. slightly 10 million or 40 million down. This is not an operation. Operationally, the hotels do very well. It's revaluation effects only because you have seen the strong increase of the euro at least till a couple of days ago and that has impacted this result. Operationally, it's very strong. You see it occupancy has been very strong for this quarter without Eastern and their rate is also 4% nicely. Cruise also doing very well. You should have in mind that we had the relax naming and putting into service in March. This has always a cost effect and the benefits will come from April onwards. So therefore, it's a great result from TUI Cruises and from Marella. The occupancy was on the same level. We had a Swiss itinerary impact, but that has been minor. And again, the result is great. I'm really happy about what we do see in amusement. Of course, I know we know that this is a smaller business. We have seen a significant halving the losses in the first half year. Why is that positive? For two reasons. One, the putting everything into one customer base and now sees the first impact with the first product set, which is amusement, cross-selling, up-selling, which works very well. And therefore, we are very confident about the amusement activity. We want to grow profitable. We don't want to grow just for the sake of growth. We want to grow profitable and that we do it through cross-selling and of own experience where we grow, had grown 18% and we'll see strong growth also for the coming quarters. If we look at market and airlines this quarter, if you take the one-time effects out Eastern, and we again have the ETS effect, which we had in March, In the first quarter, the benefit will come in the fourth quarter. We are on the same level or maybe even operationally slightly better. This is important. And again, we invested significantly in retail. So this is a satisfying result. What is really important? Excellent is the growth of the app. If someone uses the TUI app, there were just new releases. We will now bring every month new releases, and this will have a significant impact. This is really getting great. In this quarter, you haven't seen yet the big increase of the dynamic packages. That's what we see when we look forward. There is a significant increase, especially in the UK, not 10 or 20 percent. It's even bigger. It's still driven by the Ryanair connection. And every month we will put more and more airlines to the dynamic product end. also the direct link for the hotels. This will make a huge shift. We did the first country in the Nordic, and it will also come in summer, and we have seen what we had expected, a significant growth. So that is the two sides of one coin. We want to be very careful on the wholesale to keep the margins and to grow with all what we bring now in the market on dynamic and growth. Of course, retail is important. App sales are very important. And the 10% we achieved today is a significantly higher share in the UK. And that's what we will also achieve in the other countries. Some iconic things which are also bringing color to the sheer numbers. We were able to celebrate the 20th hotel in Adria. There's a very strong pipeline there. which makes us very happy, which is a great success of the team. And it's not only China, it's Vietnam, it's Cambodia, it's Thailand, Sri Lanka, and so on. The Global Hotel Fund, a vehicle to get more hotels into our ecosystem, acquired a hotel in Jamaica. And the Hotel Fund, just to reiterate, we have a 10% ownership fund. And this hotel is run and operated and managed by Royalton, our 50% JV out of Canada. We had the successful expansion of the mineshaft uh relax the next trip will come next year and what is amazing is despite if you look at minecraft 7 relax flow in campus capacity increase of 45 the booking level is on the same level as the years before and this is amazing and you know we we secured two slots for two new vessels Unfortunately, only for 31 and 33. But on the other hand, it's good that the yacht capacity is so limited. We are working on the ownership structure and we are exploring partnership options as presented before. One also nice step, we extended our collaboration or we started our collaboration with Oman Air with a very successful activity with Qatar Airways doing very well. And this now we will do also with Oman Air. Other white label partners will follow. It's our product. We are the tour operator or the producer. The offering, the sales is done with and through Oman Air. And with this, we get new customer segments in new areas and generate additional revenue. By the way, these are passengers with numbers which are not in the numbers we have given you before. App share 10%, 40% up. the uk now getting to 220 so it's a great achievement and again i just saw yesterday the new release it's getting really nice also the cross-selling the location-based services you can see now on the front page so a lot of good stuff and i have in my office the the version which will come month by month and that is good and by the way it's the same for web where we also can improve a lot what we have, and this will come. And the third one is the dynamic packaging. Sustainability is in our mind. It's not a fashion for us. And whatever the outside world thinks, we stick to our SPTI targets and we will deliver our SPTI targets. Why? It is sensible because the customer wants it. And second, the commercial business cases are very good. So we can deliver not the one or the only. It's not a contradiction to commercial sensibility. It's a proof. And a good example is the new MindShift Relax. We always say dual fuel engines. It's the same fuel. One is the traditional LNG and the other is the ELNG, which is produced out of biogas, so carbon-free, and this can be used there. And if you look, that's really interesting because I quite often get the questions. ELNG three years ago was eight times as expensive. Two years, it was four times expensive. This year, it's only two times as expensive. So because of the oversupply of gas due to the reduction, it's getting also a commercial sound business case. And that's why we invest wherever it is sensible to achieve our targets.

After a lot of words, to the numbers, Matthias. Thank you, Sebastian. And good morning to everyone also from my side. If I may summarize in this part, in this section, as usual, on the half year before we then come with a view to the rest of the financial year, booking statistics, and then the view on the guidance. And I will hand over to Sebastian for that again. Now, I'm very pleased with the quarterly development. As Sebastian said, we are up year and year if you exclude the impact for Eastern. As you know, Eastern, the two weeks that we had last year in March, now move to April, which is our third quarter. So this volume peak and this margin peak now moves from second quarter into our third quarter. And I think it's fair to say that our April operational view confirms that. So that's really pleasing. Structurally, let me highlight two things. As part of the Capital Markets Day, we could reconfirm that TUI Cruises will pay a dividend of at least the amount that they paid in 2019, so at least $170 million. And secondly, we could also reconfirm that our UCAM pension scheme is now fully funded and that these payments will stop with our fourth quarter of So going forward, 2026, we'll have that benefit. On Morella, I'll summarize separately all the effects. Again, that is what we discussed at a capital market, say, but I would like to take the opportunity to bring that all to you again. Now, on the quarter, if I may, and then to P&L cash flow and balance sheet for that, you can here very clearly see the impact Easter had. That's pronounced in markets and airlines. This minus 40 consists of a minus 30 Easter and around minus 10 from translating into the new currency rates. If you take constant currencies, that is the 10 million FX translation, the new uh, effectively flat for markets and airlines. And the rest is in line with, uh, what Sebastian said. If you look overall for the half year, we are now 30 million up. If you adjust for Eastern, it's around 60 million. And with that, that's of course a great cornerstone, uh, towards our guidance for the full year. And with that highlights, P&L cashflow and the balance sheet on the P&L. I think first of all, the revenue growth, uh, That's really great, plus 8% for half a year. That shows leisure, irrespective of what's going on in the world. This is highly prioritized. Our customers have paid 8% more to us than they did for holidays, and they have invested in more holidays with us, and we have generated more revenue. I think that's really great news for us and for the sector. Second part is EBIT. We talked about that. And if you move down, then you see that interest expense, which has improved in the quarter again, but then even more so for the half year. So a minus 180 compared to a minus roughly 210 of expenses that we had last year, same time. And that benefit is something that we appreciate. believe we can carry forward to the full year and we have lowered our guidance from 385 to 415 in P&L interest to something which is now 355 to 385, so 30 million lower. Where is this benefit coming from? It's primarily interest income because one, interest rates have decreased much slower than this was anticipated and how the market looked at this a couple of months earlier. And secondly, also our cash management and all the initiatives that have been driving month by month, they're really paying off. And with that, you have a bit more volume, but in particular, better rates that yield a better interest income. And again, we see this 30 million benefit coming through for the full year. Now, with regard to cash flow, you see the same. So interest cash flow for half year around 130 compared to 165 a year before. Again, we lowered the guidance here. Two other points to highlight. One is working capital. For Q2, you see effectively the same working capital development than in the quarter before. We're very pleased with that. Again, we had a very good development already in Q1, so a half year overall. Also, the Easter shift is really in line with our plans and that's even ahead of that. So I'm really pleased with the working capital discipline in the company interest we discussed. And then we need to look at net invest and lease payments. If you look at the half-year numbers, they look high compared to the full-year guidance, but we see a couple of phasing effects there where we had more payments and more projects in the first year. The net invest, as we discussed already in Q1, more to the high side, so at the upper end of the range, so at the 680. We need to add Marella here. I'll come to that in a second because the pre-delivery payments will be triggered in in the summer. And second, the lease and asset amortization that's in line with our plans and forecasts, as I just said. And we stick to this 0.5 to 0.6, again, as discussed already in Q1 at the upper end of this range. Now, balance sheet has slightly improved, which is good. So cash flow translates into this 0.1 improvement. You may remember we had a bigger improvement year on year. as for the 30th of September. And then in the first quarter, we reflected the additional aircraft deliveries on balance sheet. We highlighted that here. That kind of took that benefit away. And now we're moving back forward based on the Q1 balance sheet, which is, again, in line with our plans. The net debt should overall, therefore, improve. slightly year on year, because, again, that effect of the additional aircraft deliveries directly on balance sheet we've had in the first quarter, and we work against that. Now, coming to Morella and then to capital allocation path, Morella, again, for those attending the Capital Markets Day, nothing new, but I just want to highlight two things. One is the ship are ordered. The shipyards have accepted and reconfirmed the slots. I think that's a really great achievement. And if you look at the performance of Mirella, that's great to see the future perspective for the business. The deliveries will be 31, 33. So, well, in the future, you could say, unfortunately, from a ration point, but at the same time, this gives us further time to prepare for this from a balance sheet perspective. And therefore, it's important to ask that we confirm this focus on a robust balance sheet, on a robust balance sheet, make sure that net leverage further degrees significantly below the one times. This remains unchanged because that prepares the business for the refleeting option, and otherwise it would have not been possible to do this, to be honest, and wouldn't have made sense. And at the same time, as Sebastian said, partnership structures, that's something – We continue to evaluate on that basis, and I think we will do whatever is the best for the company. In terms of the capital allocation summary, again, that's something we shared at the Capital Markets Day, and we get this question a lot, you know, when is there a dividend communication, et cetera. Now, we have had a very structured journey on this, and this is something I just wanted to reiterate. We said first we want to operationally bring the business to a level where it makes sense to look at dividends. Then I think we have achieved with 24 record results. Now with half year, we can reconfirm our guidance for this year with 7% to 10% increase in profit. And on that basis, you could say this ticks the box on, okay, this is a sound basis to define a dividend or capital allocation strategy, capital return strategy. And then secondly, on the balance sheet, The leverage has already come down and came down to 0.8 with 24. Secondly, the rating agencies honored that. We received a double B from Fitch. Standard Pours and Moody's also upgraded their ratings. So that's also something we wanted to achieve before we enter into internal discussion in terms of how will that strategy look like. And so we will start internal discussions and then as our earlier communication, have the discussion with you in communication in December. On that basis, looking forward, I think, Sebastian, the basis is the booking intake. And if I may hand over back to you.