TUI AG (TUIFF) Q2 2023 Earnings Call Transcript

TUI AG (OTCPK:TUIFF) Q2 2023 Earnings Conference Call May 10, 2023 5:00 AM ET

Company Participants

Nicola Gehrt - Investor Relations

Sebastian Ebel - Chief Executive Officer

Mathias Kiep - Chief Financial Officer

Conference Call Participants

Richard Clarke - Bernstein

Cristian Nedelcu - UBS

Mark Irvine-Fortescue - Stifel

Alex Brignall - Redburn

Jamie Rollo - Morgan Stanley

Richard Stuber - Numis

Nicola Gehrt

Good morning, ladies and gentlemen. A warm welcome to TUI Group’s Q2 2023 Results Presentation. My name is Nicola, and I think most of you are familiar with me. I’m here on stage with our CEO, Sebastian Ebel; and our CFO, Mathias Kiep. They will show you where we are with our second quarter results and how we move ahead, which we think will be a strong summer business.

As you all know, we will kind of end of our presentation with some anecdotes and some progress which we have made on our strategic initiatives. And afterwards, we will be available for Q&A as always. We will start with questions here from the audience before we actually give over to the operator so that the external audience also has the opportunity to ask for Q&A.

So with that, I hand over to Sebastian and the floor is yours.

Sebastian Ebel

Thank you very much. A warm welcome here in the room and in the net. I hope that no one expects anecdotes from me, except for tourism. And I would like to give you an overview about the TUI, about the quarter two and what we do see for the foreseeable future. I think for us, it’s really good to see that the Q2 shows the clear path to full recovery and even more what we do see for the summer, we are back to normality. And what is very important that with all the measures we have taken, there is a very strong foundation for future profitable growth. And I need the clicker. Thank you.

I will give you an overview about the highlights and the trading update. Mathias will move to the numbers. And afterwards, I would like to present some of the strategic initiatives because that is important to show you that TUI of today is a very different animal to TUI 3 years ago. Looking back, there was a strong momentum for winter, not yet on ‘19 levels, so still missing 10%, 11%, 12%, but on a very clear path to recovery. And what was even more important was that Easter was very, very strong on two aspects, one on bookings, but what was as important, we were able to cope with the volumes, you all remember the issues the tourism sector had with the air force last year. This year that was the first peak without any impacts not for TUI, but also not for the sector and that was valid for all the different segments TUI are in.

The last week, bookings, very, very strong on ‘19 levels and this should help us to achieve the ‘19 summer numbers. You may recall that when I was asked last time I said, I would expect the summer could be minus 10%. Today, we are by far more confident that we are getting closer or very close or even at ‘19 levels. And I also looked in the morning to the actual booking numbers of today and which is strange everyday, the same procedure. And it looks that the momentum is even accelerating. So, that’s why we are very confident to deliver a significant increase in full year profitability and that gives us lot of positive momentum and also working in such an environment is a lot more fun than what we had experienced the last years.

And we are laying and set the foundation for future growth, because we don’t want to stand still compared to ‘19, but we want to grow even in a market which is challenging. I think we should not forget if you look at departure numbers in Europe, they are well below ‘19. So when we say we were 12% lower than ‘19 in winter and that we are getting closer to ‘19 numbers, you can calculate that we are doing quite significant market shares. And that’s the result of the initiatives we do.

If you look at the numbers in detail, we have had 2.4 million customers, that is 88%, so the minus 12% of ‘19 levels. The level of load factor, 93% is at the level where we had been before, that is important. Revenue up by 50% to €3.2 billion and the EBIT minus €242 million. The second quarter is always the weakest in the year. What is good is that we are almost back on the ‘19 levels I think €9 million missing. And we are €88 million up to last year. If we take two exceptions out the hedging ineffectiveness and the state grant we get, we are even €188 million up.

Net debt after the capital increase improved to €3.1 million. And what is important, as I said, is the booking momentum 13% versus prior year at 96% of ‘19 levels. When we presented last time here 3 months ago, it was minus 11%. So we gained 7 percentage points, which shows the very clear dynamic we have. And when I was asked by one of the newspapers in Germany, how we think the summer will be, we said we believe that the last-minute business will not have the dimension as we were experiencing it before. And the last minute defined as the sales 14 days before departure, which normally work under price pressure. What we do see today is very different. We see a strong momentum now, and we see also short-term bookings both with a good price quality.

So the momentum has changed. And we always discussed in the past, what is the difference about pricing low-cost carrier to a TUI operator. So the TUI operator go more into the pricing structure as a low-cost carrier has, and I think this is important, UK bookings even better, which is really important because of all things which impacted UK, I must admit, I’m really surprised that UK is booking so strong, maybe it has something to do with the weather. So in the last weeks, we were above ‘19 booking levels at 6% higher prices, like-for-like 8%. We still had some reductions from people who had booked in the – before Corona. And this helps us – not only helps us, that is also necessary to offset the inflation impact.

If we go into the different segments, Holiday Experiences is doing very well, especially hotels and resorts. There we are now again above the Q2 ‘19. And although we have had the same capacity, we have seen that significant improvement because of occupancy, 83% for quarter two is a very good number. And also the daily rate has increased a lot. There is also a mixed effect in it because the Caribbean has seen significant price increases more than Europe because of the very strong Americas business.

Cruises again, profitable, significant up to last year’s level, not yet there where it had been in Q2, but heading to it. And you can a little bit distinguish between Marella and TUI Cruises. Marella or the UK cruise business needed probably 3, 4 months more to recover. And we only have 4 ships at the moment. The fifth ship from TUI Cruises will come now middle of or end of May. So there is also a capacity difference. And TUI Cruises who is do performing now looking forward at very close or at the level of ‘19. But again, for the second quarter, there was a small catch-up effect. And the crisis-related debt produces more negative interest. And as we have the 50% result of the income after interest and tax, this has an impact, overall, very good development. And in summer and for the foreseeable future going back to pattern booking patterns as we had seen for the first time also, we can see that the ADRs are above prior period.

And to Musement, it’s fluctuating about what we had in ‘19 and ‘22. We have seen very strong growth on the experience part. We decided to use the money we gained there to invest in customer getting customers because we want to have as many new customers into the TUI ecosystem to sell them also the other TUI products. So that’s very different to the other segments. Here, we really go for customer growth because our business model is that we want to earn money with the customers through other products.

If we look at markets and airlines, so we are at the level of Q2 ‘19. The comparison to ‘22 is a little bit more difficult because in the 356 or the 262, there were two positive impacts, which were one-time. One is the hedging ineffectiveness, which is a Mathias can explain or will explain later, which is a balance sheet item from the past when we had no business, so no cash, nothing. And second, we got a grant like all the other companies in Germany of €50 something million last year, which we don’t have to pay back, and that helped us last year to reduce the volumes. So overall, it’s a good development.

And if you look at the different segments, we do see that in Northern and in Central, we are still €15 million or €20 million behind ‘19. Western region has significantly improved. There is one very good story into it. The ones who have been with TUI for a long time, remember all the huge losses we had in France. We changed the business model. We skipped all the loss-making long-tail business and focus really on their own hotel products. So the volume is 50% or 40% less, but we are profitable. I mean, in my hundreds of years of with TUI, I can only remember early 2001 year with a profit. And between that, we had a significant amount of losses, and we now eventually return the business and this is also good.

And what we also should have in mind, if we look at the numbers, you may recall that we had due to the balance sheet structure and the market situation, we had issues in hedging. So we were not able to hedge. And these two quarters were significantly impacted compared to the competition by this fact that we could not hedge. Now looking forward, we offer some 80% hedged. So this issue is gone for the foreseeable future. And therefore, you see also some impact here, negative impact of this. So we can be satisfied and we are with the numbers.

I don’t want to repeat maybe one thing. We were very lucky in winter that we have a destination with own assets in Egypt and on Cape Verde because what we have seen is that long haul is significant in volume below ‘19. So if you compare the minus 12% in winter, you see that long haul is down minus 40%, minus 50% and short or medium haul is coming close to historical levels. And here, we were – which was important that we had destinations, which are sun destinations also in winter, and there were the winners of the season.

If you look forward summer ‘23 bookings are plus 13% versus prior year. This is a very, very stable trend, what is more important is that we have closed the gap from minus 11% 3 months ago to minus 4%, so bookings compared to ‘19 and the momentum is there. And at the moment, there is no indication of why that should slow down. Yes, we do expect that there will be a shortage of beds, which is a good message, especially in some destinations like Greece or Spain. It’s a good message because that helps the price margin quality. And it’s a good message because due to our own hotel properties, we have made sure that we don’t double sell beds. And that’s why we are very confident.

If I look at today, it’s 60% are sold, so still 40% to be sold, which is not a small number. On the other hand, having sold at this time of the year, 60% is very encouraging. And especially is the strong – amazing is the strong performance in the UK bookings, where it’s two-thirds are sold in the meantime. And we benefit here that we have introduced the dynamic packaging, still needing 6 months to be really, as others do it at the best, but we do see a significant growth there as well.

The three strong markets are UK, Germany and Netherlands. Germany has really picked up now. So that is good. And if we would ask the question, where are the weaker markets, one asset is France, that we have done by purpose to make sure that we are profitable. And the other two are the Nordics. So, Nordic states plus Finland and Belgium. The Nordic states first, there is a slower recovery. The ones who have very long being with TUI knows that the difference between a very good result and a breakeven result is the weather in Nordics. Apparently, like in the UK, the weather has been not as good as it is. So that is why we are catching up, but it’s not there.

And secondly, the market has turned to a very strong portion, 50% plus on dynamic packaging, and we are just introducing the dynamic packaging there. So this impact will come at the second half of the year. And Belgium has a lot of more capacity. We reduced therefore the capacity to stay and to increase profitability because a lot of airlines move their capacity from Amsterdam due to the constraints there to Brussels and that has changed the dynamics. So overall, these are the numbers of the markets, which really supports the growth with the other ones, we have voluntarily taken out capacity because we wanted to make sure that capacity is in line with demand.

If we look at Hotel and Resorts, the outlook in the second half, available bed nights 5% plus. At the moment, occupancy is 3%, up 60%. That for the hotel business is quite extraordinary because normally these numbers are behind to operator. What we do see is that here very high level also compared to last year. And you could ask why are the hotels as full as they are when the European market is still 10% down in general to be performing better. What we do see and this effect we underestimated, like Majorca is a good example. If Europe is 10% down, you now have sourced markets within the past, were never there. I mean you have now the first direct flights from New York to Palma. You have ample vacation bringing customers to Majorca. You have the Chinese, you have the Middle East. So that’s one of the reasons that the hotels where there is a slight decline from Europe, they can make it up for markets which actually are prepared to pay more. And as I said, we expect a very good occupancy there.

Cruise, the capacity is on the same level, one ship from TUI Cruises went into Marella, which helps to go back to 5 ships, which was the historical number pre-COVID. One ship in the meantime, we had as great occupancy up 22%. Marella now in April, May, coming to the numbers occupancy we had before and TUI Cruises as well. And for the first time, booked rates are above pre-pandemic levels for most of the itineraries. And Musement as said, we are broadening the product a lot more into digital selling. And therefore, we expect going back to ‘19 profitability and using the incremental margin to invest in getting more customers. Mathias?

Mathias Kiep

Thank you, Sebastian. I have my own clicker. Thank you and good morning to all. Good morning to all in the room and to all in the webcast. Now I’ll bring to you a bit of a recap on the capital raise, what is the pro forma impact on the balance sheet and it’s of course, really a milestone in terms of the capital structure for the company and its recovery. And then as Sebastian said, a couple of more details to P&L cash flow and the balance sheet of the quarter.

Now I think this quarter, again, as I said, operationally, this is really another quarter that delivers into our target and our expectations so that I’m really pleased with. And alone, there’s €1 billion increase in sales versus last year’s same time. I think this is a great achievement also that the company could execute this in a very ordinary manner. And Sebastian mentioned customer satisfaction is at record highs, and that’s something where we’re really proud of that these increases that normally firms take much longer periods, we can do and customers are very happy with that. And also these translate into finance. And I think with the underlying EBIT, and I’ll come to the exceptions to the one-offs in a second, with this €180 million of improvement versus last year, that’s clearly without within our expectations. And I think we remain confident that we do a significantly better result than we did last year. And I think that’s our clear ambition.

Now the capital raise, I think that was the second milestone that can come to the pro forma numbers in a second. I think that’s, of course, a milestone to the balance sheet, repayment of the state that’s really great. And we are really grateful for all the shareholders and new investors who have contributed to that and have made that possible. And please be ensured we are very much committed to the trust that we received for €1.8 billion of investment into TUI. And thank you very much for that.

Now what does it mean in terms of receiving these monies? And if you think about our capital structure on the ‘22 numbers, 30th of September, which is also the test numbers in the balance sheet year-end, we would come down to a net debt of €2.4 billion, now with the EBITDA that we had of €1.2 billion that would result in a leverage on the balance sheet of below 2x. Now if you want to come to ‘19 levels, you can do a reverse calculation, and that would mean we would need this year an EBITDA of €1.6 billion. And I think €1.2 billion last year, our commitment to do substantially better. I think that’s why we’re confident, and this is the chart that we also used in roadshow that these numbers are really achievable.

And very importantly, we also repaid a silent participation one, which was an interest-bearing hybrid instrument on our balance sheet, accounted for as equity, but at the other time, with an accelerating interest charge. So there we are very pleased that we could clean up the balance sheet for that. The same effect you will see on the gross leverage and the same dynamics are account there. Our target remains get back also to the rating that we had prior to the pandemic, which was BB. We got the first step with the B rating and a positive outlook. But of course, this is a longer journey. At the same time, we will continue to deliver.

Now let’s go to the quarter, P&L, balance sheet and cash flow. On P&L, Sebastian already mentioned, all segments contributed well to this operational recovery. I’m also pretty pleased with the adjustments, which are at a low amount. And this allowed us to also lower our modeling assumptions on these adjustments by €20 million to get down to €40 million to €60 million we were at €60 million to €80 million. Now what is a bit a pressure point is interest remains interest. We have seen another interest increase from the Sanford Banks. We will see the benefits from the capital raise. At the same time, the extension of our credit facilities, which are underway and also the repayment – the full repayment of the state funds and debt, which will be in this quarter, so Q3, they will result in a couple of one-offs. So we’re tending towards the lower end of our guidance. But again, these one-offs are difficult to plan, and this is something we have to have a look at.

Taxes. This is also just to reconfirm this underlying tax rate of 18%, something we see materialize throughout the quarters, which is also very helpful. And I’m also very pleased that we can reconfirm that. Now I like this chart because as you said, Sebastian, all segments have really well contributed to the improvement in EBIT. So hotels, which we’re already starting with operations last year in the same quarter, you see cruises profitable again. And I think the track record and the bookings that you described Sebastian, they suggest this is more, again, as we always said, a timing topic rather than a structural topic. And then also markets getting trajectory and it’s really needed because we want to have a much better result this year in the summer than we had last year.

Now on the adjustments, €50 million last year, we already talked about this in the last quarter at the same time. It was a grant from the state, which is very separate to all this state aid on group level, which was done on a local level. This was these grants that you received when your business was closed and you get support for, for instance, retail and things like that. This was common structures in all markets that we’re in, but because of the structure, €50 million arrived in one quarter in Germany a year ago. So that’s something we took out in the comparison. The same is the hedge ineffectiveness, which resulted in a positive 40 last year. What is hedge ineffectiveness? IFRS is very strict that if you don’t have an underlying that you lose on for, and there are some other reasons, then you go out of hedge accounting, which you normally have and you don’t see anything coming from a hedge. Now if you’re out of hedge accounting, you hedge subject to pricing of the underlying of fuel and a mix just moves through the P&L. And this was a positive impact last year of 40, because they were very long-ranged hedges, which you in COVID went out of hedge accounting, and they were just moving to the P&L until they got into their maturity. And these were €40 million positive last year. And again, that’s something we took out for comparison reasons. So on an adjusted basis, this results in this €180 million of positive quarter-to-quarter.

Now on cash flow, as a result, I think this follows more or less the P&L and operational recovery. Working capital, this is €1.5 billion. This is really strong, I must say, because, one, the discipline on the asset side of the working capital remains. And at the same time, the ramp-up is more or less the same that we had a year ago when we ramped up from effectively no business to a normal summer or to some kind of 2 words and all and summer at that point in time. And now we did to ramp up from a 90% winter business to our summer business as just described. So I think this shows the discipline that we have in working capital and also the very strong trajectory that we saw. You may remember, since January, the bookings really took and become up and become very positive. So I think on the cash flow statement, there is something which occurred in the quarter, and very much driven by working capital and the rest follows the P&L. As a result, again, the balance sheet is within expectations. I think what is really good is to see this pro forma numbers. Again, to remind everyone, we did the capital raise. It started end of March and it closed end of April.

So just over the balance sheet date. So we will not see it – you will not see it in our reports. That’s why we did this performer. And only in the coming quarters, you see it in the reported numbers. But I think if you look at our liabilities to banks, the proceeds from the raise more or less would have halved the numbers. I think at the same time, the very positive situation we had at the end of the quarter already without the capital raise was that we completely got out of the KfW facility, and I think that’s really showing how we’re ramping up the business in a very good way. Also the covenant test, which was a debate that I had with some of you earlier, I think these numbers showed this was something which was easily passed with sufficient very much sufficient headroom. So that’s also something even without the capital raise, which I was very pleased to see.

Now finally, let me sum up with our modeling assumptions and most I already talked. But what remains is, I think we will – we are committed to further increase the turnover of the company. This remains unchanged. And we expect underlying EBIT or results to improve significantly versus last year. And I think Sebastian we discussed, I think what we can say, we will not provide a more detailed guidance for obvious reasons. I think with what is market expansion, what is consensus around us, we remain comfortable with that. And I think that’s something we can say. The rest of the modeling assumptions remain broadly unchanged. We talked about adjustments, which go down, which is very good. It’s very helpful also for cash conversion interest sampling. We have to have a look also more clarity, I guess, next year when all the one-offs move out of the accounts, and we have probably a more stable interest rate environment and asset financing and net debt will be impacted then positively also by the capital raise.

I think that’s for me. Thank you very much. And again, I think I’m very pleased with the quarter. Sebastian?

Sebastian Ebel

Thank you, Mathias. Something you probably have not expected to the change in the company, we want to bring to the heart to our employees because in the past, the vision was Think Travel. Think TUI. And we have very much moved to an experienced business. So it’s not about bringing a customer from Hanover to Majorca. It’s about bringing a customer into a wonderful hotel, doing a lot of tours, experiences, party, pool and so on. So by really changing the nation and the nature of the business, and we needed something to bring this to our people and a vision for TUI internally. It’s not a marketing thing because then it’s too short a too long and too complex as something to tell our people and leisure experiences. It’s not business, it’s about experience, in leisure and we added also excellence in.

I think this is more and more important that strong organization have strong people, managers who decide people who have fun who want to deliver. And sometimes, especially in a mid European environment to talk about excellence is not something which is so well received. We think it’s differently, if we are excellent, people have more fun working in the company because they do achieve what we do, we have more happier customers. Therefore, we have more profits which means that shareholders are happier. And at the end, we can also be more generous to our people. So that’s why we changed from Think Travel, Think TUI, to Excellence in Leisure Experiences. And we have a short film on that and...

[Video Presentation]

So this was developed with our colleagues presented to our colleagues and is a mind shift in the organization. And if you compare TUI 6 months ago, if you compare TUI 3 years ago, it’s a very different company. And I’m pretty sure if in 6 months, we will be here again. It’s again a different company. And – and it’s a big change. And I really like let’s do it because to be quick to make sure that colleagues are deciding that they have the courage to decide is so important because there are some other competitors had an advantage. And with this change, we are not only want to catch up, but we want to make sure that we are creating and developing the market.

What does it mean in some more details on the product side, high-quality new products, broad range and scale, not only wholesale package, unique travel leisure offerings across the value chain. We are not the 31st OTA. We are unique as Amazon has prime. We have our Rios, our TUI Cruises, our Magic Life, our own experiences. And very important is sustainability because we believe that without sustainability, there is no first, no future for the world, second, no future for tourism and therefore, we not only aligned – assigned to the SBTi targets, but we want to be by far more ambition.

Technology. And we sometimes say now we are an IT company, which sells experiences. We are building more and more platforms. And this will be a huge change. So you will see we have a lot of thoughts for future growth. If in the past, you may recall the one or the other, we started business in Brazil. It costed us a lot of money. And at the end, we were not successful. What we are doing now is we have built platforms if we would go to Brazil or to India or to South Africa. We would use the platform we have. We will open a distribution sales organization, 5, 10 people.

And we would not further invest in technology because we have the platform. We would not invest in service organization because we have the service organization. So it’s – I mean, for other sectors, it’s nothing new, but for our sector, it’s something new. So, very much using and leveraging scalable solutions. Are we yet there? No. We are on the way to it. So every month, there will be more platform introduced. And the main target is to – at the end of this calendar year to have 80%, 90% achieved. And you will never achieve 100%, if you – because if you achieve 100%, then you are not moving anymore.

And the last thing is maybe the most important thing is the – our people performance-driven, performance-driven culture. As I said, it’s not always popular. But we very much believe when it’s about well-being, we are not as par. We should create fun for customers for employees by delivering and then by having also materialized benefits out of that. And that is, I think, a good process, and we do see more momentum. So creating winning teams is something easy to write down. It’s sometimes easy to create program. At the end, it needs a mind shift, and we do know which organization have done that very well. In the past and other sectors, there are good reasons why Apple became so strong as they are. We see that sector-by-sector. And we are heading to it, and management takes a lot of time also by living the example to do so whatever someone can decide should be decided there.

What does it mean? You remember that we presented our strategy to go into dynamic packaging. Dynamic package in the market bigger than the wholesale package, TUI was there in – with a very, very small market share. Now we are bringing that to all the markets. And that is one of the reasons the last bullet point here, why we are able to offer by far broader range product range in the UK, which will lead to significant growth. Expansion of [indiscernible] to the detailed flight market, ancillary was B2C growth with Musement, the TUI Blue hotel asset-light growth and our sustainability. These are examples like we did in the past with others.

The TUI Flight Market is something new. The idea there is that we link directly to the airlines, through the NDC connection, not through Amadeus or Sabre anymore. And the big benefit, it’s a win-win situation for airlines and for TUI and then for the customers because we have daily pricing. So it’s not about agreements which we did 3 or 6 months ago. We get daily prices on a by far lower cost basis because all the intermediate costs has gone out, and it’s a benefit asset to the airline for TUI and for the customer, which means in our app, you can get flights for a very attractive price, where we don’t have to fear the competition with the ones who sell today million more tickets. And this is also then used for the dynamic package to make sure that we have the best content there as well. Today, we have all the European major airlines now starting with the Far East airlines, there is one big group missing British Airways and Iberia. And hopefully, in the next 6 months, they are the last cornerstone, what we do need.

Ancillaries, we have not been the most innovative company there. If we look at our competitors, they have done better. Some of them have done better. Ancillaries are quite often 100% or 80% or 70% margin. So we have a very strong program in delivering it through – into all the channels because in the past, if you wanted to have a seat upgrade, it was a complex thing to do. Now you will get through the TUI app an offer and you can decide. Two things are even more important. One is bundling because more and more customers don’t want to have priority, more legroom and a meal, but to bundle as a VIP product.

So bundling is getting more important and dynamic pricing, again, here important because if a plane is empty, you will have a different pricing than if the plane is full for these high-demand extra-legroom and want, you may only add €5 and for the other one when there is high demand, €50. So a lot of things and adding also products which have not been with TUI, one thing, which getting really – never have played golf up to now. And – but what we do see, especially in winter, this market segment is huge. Now getting groups, you will only get if it’s linked to the hotel here and with the tea times and so on. And by introducing that, there is a significant demand, which we didn’t get before.

TUI Musement, as said, very important to get customers into the TUI ecosystem. So therefore, to experience as part of all distribution channels and the TUI ecosystem as we said, very strong growth 200%. And what we are now doing is focusing on city experience. TUI Musement one of the best investments we did is a Milan-based company. So they were strong and are strong in Italy, in Spain and France, but they were very weak or not existing in Germany or the UK Now we are building – and we have started with 100 key cities to have the full product range and own experience in 100 cities, so we are doing is now to start selling this product if the customers at home. So if I’m in Berlin, I buy the Musement museum ticket, if I’m here the [indiscernible] ticket, so to make sure that we can more interact with the customer during time when he is not in the city. So experience, if you are at home key cities and owned products because if we get critical volumes, it means that more and more makes sense to have own products, which allows different margins and more uniqueness also by collaborations with other suppliers.

TUI Blue asset light, you see growth, and you see growth in areas where you would not have expected it, the Far East for TUI. There’s so much, TUI Blue by the way, which is also important. If you look at customer satisfaction, our own brands scored significantly higher than on average with the market, which means that the customer experienced something superior when he’s with us. And the TUI Blue, when it goes into the world has not only the good experience and the great experience for the customer, but brings the TUI brand into the world. And this is an asset in itself. It’s not about the €1 million management fee. We get per hotel. It’s also about bringing the brand into these markets so that we become stronger in distribution and in sales whenever we sell other products.

And I think we will see an acceleration here too. Management franchise and for us, it’s important that we stick to the investment policy we have, at least for the next 3 years, till we have convinced the markets that we are not talking about something delivering, but that we have delivered because getting €1.8 billion after and having shareholders who have been extremely loyal. Although they are lost, sometimes the majority of our investment is a big, big obligation for us, which we want to fulfill.

Sustainability, you know about the SBTi targets. Our own ambition is stronger for the next 10 years. And every day, we do small steps. I mentioned once the new head office in Hannover opened in August, carbon-free. We have now the first hotels, which will be carbon-free. We were marketing as carbon-free. We have signed green fuel supply. We are talking about bio-LNG methanol for ships, a lot of good things, which we now create.

We do see it as a chance, not as an opportunity, not as a threat. Why? The business case has improved a lot. And we do see besides all willingness of a customer to pay something incremental that the breakeven between carbon fuel and green fuel is shortening, 3 years, 4 years, 5 years, but it’s not out of stick anymore, but it’s really making business-wise a sense to do so. And we think as the market leader, if we do it first, we will see the benefits for us cost-wise, but also for – with the customers. And we do see it where we don’t compensate, but we tell the customer, this is a carbon-free hotel. There is the willingness to pay a premium or to book that more frequently.

And I discussed and I presented the expansion plan for the UK, it’s not about starting a price war or to bring over-capacity in the market, it’s using – mainly using the capacity which is there. By connecting to airlines, third-party airlines, by connecting to great hotel stuff to package dynamic as others have done well and to get the market share we have in the wholesale package also into this new sector for us, new sector, not for the market and by having a very strong focus on quality, using the service infrastructure. We have an airport, in hotels and the omnichannel distribution. We have to make sure that the customer gets the great experience he’s getting from to in with other products, but also in this product so that we are not another me-too, but that we are really making the difference there.

And therefore, we are very happy about what we have seen here, what we have built here, what we are building here and as the proof is in the pudding and therefore, we need to deliver. But if we look at the booking for next winter and we look at the summer after, we have never seen such a strong start. This mainly comes out of the initiative. But first, we need to deliver this year summer. And we have to make sure that every one of our investors is happy about what they have seen in summer with us, that our customers have the same great NPS as we see at the moment and that our people benefit also from having more fun and more exciting working with TUI.

So making a long short – long story short, accelerate profitable growth through all the measures that we set, which should and will improve profitability and margin; a strong focus on cash flow, which is sometimes quite a tough thing because we have now with all what we do see such a strong interest in TUI and will have a huge amount of great ideas what we should do. But first, we need to deliver to make sure that the cash flow comes in to reduce further debt as we have planned, and of course, on a strong balance sheet to create shareholder value to pay back the trust we received.

Question-and-Answer Session

A - Nicola Gehrt

As we said, now we are available for Q&A. And we have two colleagues here who actually distribute mics and I see Richard here. So perhaps we can give the mic to Richard first.

Richard Clarke

Thanks very much. Richard Clarke from Bernstein. Three questions as per normal. I guess, a lot of people jumped on your comments on Monday, Sebastian, about price discipline in the market, no last minute deals. I guess, the very next day, Ryanair ordered 300 new planes. So to what extent is that sort of wishful thinking versus a TUI commitment not to discount? How will you react if the European consumer starts maybe spending a bit less on travel, if not through price? Second question, changing the tag line, bringing experiences in, I guess, it sounds a bit like Musement coming even more to the four. Is that the correct interpretation? And what are your ambitions for Musement, the path to profitability? How big can that business get in your view? And then thirdly, I guess, there is been a couple of changes in the wider travel distribution market. Iberostar signed a deal with IHG. Expedia is launching a new points-based loyalty program. You talked about share gains. Is that just a COVID impact or do you see yourself kind of gaining share over the longer term? And some of the – any comments on those changes at Iberostar, particularly?

Sebastian Ebel

First, when I saw the announcement of Ryanair ordering the Dash 10 of Boeing, we felt very happy because one of the – I mean, you know that we are a loyal Boeing customer despite all the hassle we have and we still have. They are not performing as they should perform. And there was a big question mark on the Dash 10, which we have ordered and we have a significant backlog. So with this order, I think we can now expect that they will deliver the Dash 10, which is extremely important for us to be competitive to the Neo of Airbus, which is mainly used by competitors. So this is a good move. And as we have ordered them a couple of years ago and pricing has changed quite a bit, we have very good contracts and it’s a good move. On pricing stability, it’s also quite interesting development. And what I’ve seen is markets are very different. So Ryanair reduced significantly the capacity in Germany, and I found very interesting, the reason they gave to it. That is different of course to the UK. What we do see is – and that’s why whatever the price is of an air seat, we want to benefit. If there is oversupply, we want to benefit from the low cost. If there is like today not enough capacity, we also want to benefit from that.

What is more important is the shortage on hotel rooms and especially on shortage on very attractive destinations and very strong brand. So customers have moved more to the branded product, expect that this stays, and have even more moved into the good – whatever a good destination is. And today, to get a flight seat to Greece is easier. It’s also not easy, but it’s easier than to get a bed. And it will get even more difficult because of over-contracting. So the limiting factor, not today, that’s on both sides, will be more the bed and all the services around. And therefore, we believe very much if we focus on quality, on having a very stable organization, on sustainability, great products, we will benefit from this development. And the last €10, which an airline or €20 or €30 will give as a reduction, and especially because they can afford like Ryanair, we would like to benefit from that because the dynamic package.

Musement, you’re right, Musement is an amazing development because it has three main activities. One is the transfer of the service of TUI guest. And there, the profitability depends if we are plus 10% more guests or minus 10%, that’s a little bit not what we can change. And we have to B2B a product where it’s all about making our B2B partners happy. We signed with EasyJet, as you know, and which gives us scale in buying products. So that’s what we said when you really triple volume, you go to the same suppliers that I want to have 3x as much, you will get different rates than only for TUI.

And thirdly, which is the most important one is own customers, because when we have own customers, there are two things. One, we gain the customer for TUI ecosystem. We now start to attract customer in the destination through a QR code, it gets the TUI app like the other two major competitors. And we don’t really care if this customer came with [indiscernible] or came with Expedia whomever want to offer really great. If we have this customer in the ecosystem, in our app, one customer account, one payment, one loyalty, then we should be able to sell the product.

And second, the more volume we get, the more we can create and own product, what we call collection product, where we are not selling a third-party product, but where we produce and own product. And what we said, despite all the promise on delivering results, the profit increase in Musement, we invest for the foreseeable future into growth. We have catch up with GetYourGuide and Viator. And the market consolidation has not happened yet. There are – I mean, the big four have 20% maximum, very different to the hotel OTA business where booking is the very dominant player. So we want to not only to catch up, but we want to grow quicker than the competitors. And I think it’s important step, not only for being successful in Europe, but also to grow outside Europe business and wider distribution, hotel distribution.

If you look first – if you look at the big hotel chains, they have done and used the time in corona extremely well. They introduced membership pricing. They introduced services, seamless booking. If you’re going to a hotel, you only need the phone to check in. You don’t need a key anymore. Even the most remote Hilton hotel, I was in Luton. I used my phone to open the door. The checkout was one push. So great service concept and the membership pricing is something very profitable.

So besides the fact that we have outstanding product, this really shows the way forward. As said, we are now having one customer account, not in a small version, getting more and more different. One payment is introduced. And this last missing part is the loyalty. And there is an interesting question. Is it one of the big ones or what do we do something on our own with our Blue Diamond business in Canada, we joined the Caribbean, we joined the Marriott scheme, extremely big success. In Europe, we haven’t taken the decision. We are working at something we want to introduce at the end of the year, but there are different options. That is the missing piece, which we will implement. And we think membership pricing and services, seamless services and differentiate sales is key and even more important for leisure because you may like to have the bottle of champagne in the room. I think it’s more important than having it on a business trip like for us tonight. It’s more important if you are on vacation.

Cristian Nedelcu

Thank you very much. Cristian Nedelcu from UBS. Maybe the first one, when we think that your EBIT generation in the second half of the year, any reason why this should not be well above 2019 levels? Your volumes are almost back, your pricing is 20% up and you have the €400 million cost savings that you announced a couple of years ago. So what am I missing here? The second one, your first half working capital performance was better. So the cash inflow was better than the normal pre-COVID cash inflow. So I guess, my question, historically, you generated around €300 million of cash inflow from working capital in the second half of the year. Is it fair to assume that this year you’re going to have a few hundred million more, so €500 million, €600 million, any headwinds here that we should keep in mind? And maybe the last one, just a technical question, the kerosene prices have been coming down. The pound has been strengthening over the last months. And I think you mentioned today that your hedge now around 80% for the summer. Could you provide a bit more granularity at what level are you hedged for fuel? So what is the fuel price that you locked in or the FX that you have locked in within that 80% hedging? Thank you.

Sebastian Ebel

[Technical Difficulty] the chances you mentioned. But again, we are 60% booked, not 100% booked. There are also some operational challenges. So we wanted to make sure that our view is balanced. And let’s see what the outcome will be. And second, that leads to your – Mathias can give you some more questions. When we started to hedge and we were only able to hedge very, very late and we are still fighting for every hedge line, especially long-term. We hedged in an environment where the pound was – we started to hedge, now it’s very different, where the pound was very weak, where the euro was also weaker against the dollar and fuel price were significant higher. So the first significant portion was not so favorable as we do see and this has impacted significantly first half. And there, we will have also some impact to the second half. And therefore, we said with the consensus, we feel happy it’s in line with chances and risk. The whole situation will be better if we can hedge looking forward as we have done before. We are not yet there, but we are moving to it. That would be my answer.

Mathias Kiep

Thanks, Sebastian. And Cristian, thank you. Just on the working capital, as you said, so this €300 million in the second half in ‘19, I think this is a good kind of momentum, how we say, the sentiment, how the company is developing also this year. At the same time, we will have a positive impact from just the inflation and the higher turnover that January there is. As Sebastian said, there are some business like France, Nordics, etcetera, where we have lower capacity also planned. So we’re moving towards ‘19. So we would expect a bit more, but at the same time, not like a very substantial change of the pattern that we saw in 2019. Now on hedging, I think we have a challenge to provide kind of more details than we said at the moment. At the same time, I think it’s – when you look at our first quarter, we were really impacted double-digit by the kind of movements, and this is something which has moved out now. And I would say, overall, on our hedge position, this is something, the surprising that we have that gives us, let’s say, a position where we can generate what we need in order to get to something towards consensus, if that makes sense.

Cristian Nedelcu

Thanks very much.

Mathias Kiep

Thank you.

Mark Irvine-Fortescue

Thank you. Good morning. Mark Irvine-Fortescue from Stifel. Also three questions, if that’s all right. One on cruise, one on growth, one on long-haul. Just on cruise, if we think about next year, FY ‘24, once the Marella fleet is back to full strength, is there any reason why you can’t aim for and we might expect a full profit recovery on a like-for-like basis ‘24 versus ‘19 for cruise? Secondly, on growth, you put up that million extra passengers in the UK tour operator. But I think for the Group, overall, your sort of airline fleet capacity is still pretty flat on ‘19 levels. Ryanair has been mentioned, Jet2 has also got a big new order. Do you really think you can sustainably grow the business without investing more in the airline fleet?

And the last one on long-haul, I just wanted to sort of understand a little bit more about the dynamics there. It sounded like the slowness was more in the tour operator, so outbound from Europe, whereas the hotels and resorts piece in the Caribbean, Mexico, Asia was not seeing some of that weakness because the source markets were a more resilient customer. Could you just touch on that, please? Thank you.

Sebastian Ebel

I may start if you allow with the long-haul because that’s the easier part. If you look at departure numbers, we are just yet above 50% of what we had seen pre-corona. Actually, this is also true for business long-haul recovering, but we don’t see that this will recover short-term or medium-term to the levels we had seen before. Why? The cost increases have been significant, not only because of kerosene of whatever aircraft costs and taxes, but especially on the hotel side, because I mean, the same hotel in the past, European – the Caribbean, European customers compared with American customers, maybe 10% difference, 20%. At the moment, it’s easily 100% difference. So the Americans pay 100% more in the hotel years than say, if I get €400 instead of €200, I don’t want so much. European/UK, are not still – not yet used to differentiate. Hopefully, there will be some changes tomorrow – not tomorrow, after the day tomorrow.

So this makes the product really more expensive. And people think, especially in times which are more – the dollar, yes, has lost strength against the Euro, but it’s still not where it had been. So this leads to what we expect that the long-haul will be under pressure. And you see a REIT every day how much airlines have increased the long-haul prices, that’s different to it. So therefore, it will be under pressure. The good thing is that it’s not a margin issue because if the demand – the demand follows also the offers. So luckily, there are not 100% offers and 50% demand, it’s very much in line with it. So it’s a more challenging business with limited growth in the future. Luckily, there is strong demand in the Americas who really substitute the European demand.

On airline, yes, we definitely compete. One, you should not forget that we also have a backlog luckily placed in 2015 or whenever it was ‘14 to Boeing and we could get as many – not as many aircraft as we want, but a high two-digit number if we would need them, and we use them for the fleet rollover. And the question is where do we grow with own aircrafts, where we grow with wet leases because we need the capacity in summer. We don’t need the capacity so much in winter. And thirdly, where do we grow with dynamic packaging. And the more than others bring capacity into the market, the more access to dynamic stock we have on the hotel side and on the airline side. I mean, I would not expect that the two delivers products to us or the other way around, but there are so many products now available.

So if you look, for example – I mean, this is an amazing thing. If you look at the Turkish carriers now, I flew from Hannover yesterday, and we had 10 flights to Antalya. And the Turkish carriers due to the stupid regulation has a cost benefit of €60, €70 to deny boarding compensation, know this and that, doesn’t make sense there to fly. It makes a lot of sense to buy from SunExpress as we do all over. It’s a great airline, a huge cost advantage, and they are happy to have us as a lead customer. So that’s why, yes, we will grow one or the other aircraft and we do see a lot of benefit in bringing our demand in line with the supply of others. And said, with the exception of the Dash 10 problem, which hopefully – or I assume Ryanair has solved, which was a very clever move and they probably will get outstanding rates. This aircraft will deliver and that will help us to get the right aircraft as well into our own. On cruise, as said, I’m more a controller like Mathias. So we should always be very cautious what we do say, because at the end, it’s all about delivery. I have something to see what you do see, especially now with the fifth ship this year or half of the year, we only had a quarter of the year. We had four ships. And especially the – I mean, in winter, there were a lot of problems still with ships in the Caribbean due to regulation and so on. I think there is a good likelihood that cruise will return to normal profitability.

Nicola Gehrt

Further question here in the room? Otherwise, I would give over to the operator in case we have questions from the external audience.

Operator

[Operator Instructions] We will take our first question from Alex Brignall from Redburn. Pleas go ahead. Your lien is open.

Alex Brignall

Good morning, thank you for taking questions. The first one is on trading. A few people have asked this morning about the charts you’ve put in, in the presentation and the sort of appearance of a slowdown in booking volumes against 2022. Could you just give us some comments on the different comps in 2022 and how that manifests in what matters in terms of what it is versus 2019 or your expectations for how the comps evolve and how that would affect that number obviously with 2019 being more important? For the full year, given that you’ve so far made a loss in the first half, obviously, increase in guidance would be probably a little bit full hardy. Could you just talk about what the current rate of bookings might do for profitability levels? If we just look at what your current booked position is, it seems like you’re probably heading for a high number, but obviously being a little bit conservative with how things might play out between now and the end of the year? And then the third question, a bit of a specific one on Musement. Obviously, you have an important relationship with Booking.com. They are rolling out a lot more of that connected trip in which Musement is an important part. To what extent is your growth of the exposure to the cities related to working with those OTAs which are clearly bigger in the cities, much less exposed to some of these markets? Thank you very much.

Sebastian Ebel

Okay. Maybe starting with the first question, we are up on bookings compared to ‘22, 13%. And we are catching up only minus 4% now compared to minus 11% a quarter ago to ‘19. If you look at the booking pattern last year, the summer was actually – especially the fourth quarter was a good quarter, almost also back to normality. And what you saw that the bookings were late and then during this time now had a peak. And therefore, to be close to the peak is something which surprised us quite a bit because we thought it would be less, because the peak last year was huge and then normalizing in middle of June. So that’s why we look on two numbers, how do we book against ‘19 to really close the gap further and not in these strong weeks compared with ‘22. If we are as close as we are, it’s great, but the overall is good. We think that the last-minute business or the business 14 days before departure will be different to what we had seen before. Yes, there are still significant volumes, but the price quality is very different.

If you ask what could be, in a very positive scenario, the growth, we think the growth is limited due to two facts. I mean, if you look at Germany and partly also the UK, there is less flight capacity and Corendon had just pulled out, but reduced because of restructuring very much the supply. Other airlines had to shrink because of non-availability of flights. That situation is probably very, very stressed. So that’s why we think it’s very important that we keep demand and supply in balance, more optimized on price than on volume. And last – and you are right, that’s also one of the reasons why we are cautious. We still have to catch up something from the first half year. And as said, the proud we are on a stable operation for 1 week around Easter, no one knows what in the very, very, very high peak it will be, it will be far better than it had been. We still have the ATC strike. And there are still some also things we are hedged 80% of fuel, but the 20% are – and so on. So I think to balance risk and chances is very important.

On to Musement, as I always stress, we want to look at the best of breed and Booking is a very well-run company. I really admire what they have built and they are doing very well. And I mean, it’s – if you look at the two main brands in Europe, it’s Booking and it’s us. So to partner in this area, I think makes a lot of sense. They do see a benefit. We do see a benefit. Important is that no one – I must admit, I’ve never been in contact with them. That’s all discussed on a working level. I would assume they don’t want to rely on us too much. We don’t want to rely too much on us. As long as both parties see the benefit, it works well. And as said, we have a lot of B2B partners now. So to have a variety is very important. And the most important are our B2C customer because these are really TUI customers. And that’s also the profitable customer, which we have.

So on the other hand, if we now do see, we introduced ECO-only in Nordics and will be introduced during the year also the UK and others. I was quite positively surprised, normally you don’t hit ambitious plans. Here, it’s different. Although we are catching up to others, we are not at the same level when it comes to app and product portfolio, we will take another 6 months. We are doing very well especially because of the service components we can offer as others can’t offer. And 81%, if I remember right, are new customers, which have never been with TUI and that is very similar with TUI Musement. So the whole thing is doing very well.

Is it something which creates profit today? No today, it’s about growing. If I look at more – and that’s actually the only developed market in ECO-only or really experiences only Germany. The level of margin, I mean, there is maybe €10 difference between a 3-hour – 3-day stay in a hotel compared to a 10-day package. So it’s amazing what these components bring as margin and we will like to benefit from us. And the main thing is to get customers. And I mean, the competitors, the strong one, have a retention of 70. When you start new, you have one of zero. And to build very quickly to 70% – to 50% retention where you don’t have to pay commission and you can afford to get new customers is so important and then to sell all the other products. So it’s very important. We can compete now with all the other big ones also in European cities. And it will take 2 to 3 years if the volumes kick in, so retention kick in that we not only have the purchasing benefits, but also see full profitability as we do see in the markets where we started earlier with that.

Alex Brignall

Thanks so much.

Operator

We will move on with our next participant, Jamie Rollo from Morgan Stanley. Please go ahead. Your line is open.

Jamie Rollo

Thanks. Good morning, [indiscernible] and Sebastian, three questions, please. First, on the cruise business. Mein Schiff’s average day rates were 7% below Q2 ‘19, just really wondering what’s happened there because the commentary on the last call I think was a bit more positive on cruise pricing? Secondly, could you talk about the options to refinance the bank debt? Are you considering just to extend the facility or would you consider some term debt or convertible debt? And also, what’s the plan for the remaining KfW facilities? Do you plan to keep that? And then finally, just a point of clarification, you said, you’re happy with market expectations. But I think you also said the leverage target implies €1.6 billion EBITDA, which is about €200 million below consensus. That might just be because that’s the minimum you need. But just wanted to check, are you still happy with €1.8 billion of EBITDA for consensus and €950 million of EBIT for consensus? Thank you.

Sebastian Ebel

Thank you for the question, Jamie. On the cruise, there is a significant mix effect as the long-haul had been difficult and still has some challenges. The long-haul cruise were limited in demand, but luckily also in supply from our side. And as Marella took out one fleet, which normally would have had in the long-haul, there is a mathematical effect to offset that. So now coming in summer to more a normal pattern, it’s not yet normal because we still have a lot more non-flight cruises than we had in the past. So going from Kiel to Norway, which means that we missed the flight part, which you would have anyhow, despite this structural mix effect, we do see that the day rate has been – not has been – is above the level before. So we are very happy with the development. As said, the second quarter was still influenced by one ship less in Marella. For Marella, it took more time to build the demand. Actually, by the way, this is also valid for Royal or Carnival. They are so strong, although they have half the volume from the UK and some more interest TUI Cruises has to pay. Looking forward, it’s very normal lives to what we had seen except the higher interest of TUI Cruises because they will take another 1 or 2 years till they got rid of the incremental debt. And if you look at the bond, you know what the increase of debt was and what they pay for it. Maybe, Mathias, you can answer the other two questions, which I have forgotten.

Mathias Kiep

No, thank you. One was on the expectations for this year and how this was correlated to what you see on this chart on the leverage levels. And it’s – I think the line wasn’t excellent, but just to reconfirm, I think it is, as said, we would need €1.6 billion in order to get there. This doesn’t mean that €1.6 billion is kind of the new target. On the contrary, I think we feel comfortable with this consensus where it currently is, which is just a bit below €1 billion on EBIT and then you would add the €800 million of depreciation, amortization, as you said. At the same time, given that we don’t have a concrete guidance and given that we are where we are with all the kind of volatility that may or may not come, I think this is probably the best position that we are in, in terms of communication on the numbers going forward today.

On the RCF, I think that’s what you referred to and the bank’s loan. This is the €1.5 billion facility. The KfW facility is linked to that. We have now, as planned, halved the KfW facility. It’s an undrawn facility. It’s now €1 billion only. And both facilities together, we plan to extend for another 2 years over the summer. So this will be just, let’s say, a standard amend-and-extend process with the same kind of volume and targeting that we can keep KfW as a buffer for this maximum period.

What we then do exactly with it, this is to be seen. There are two questions to it. One, how much do we really need it? What is the real – I think also in the winter, you saw we don’t need a full facility even as a buffer, that’s something to reduce it. And then secondly, we will need further rating upgrades. And given the performance, that’s something we would also expect to come. And then we have full optionality and do the right things in order to find good and right instruments if we want to have that buffer on a commercial market rather than from KfW.

Jamie Rollo

Thank you very much.

Mathias Kiep

Thank you.

Operator

Thank you. [Operator Instructions] It appears there is no further questions at this time. I’d like to turn the conference back to Sebastian for any additional or closing remarks.

Sebastian Ebel

There is one question in the room.

Richard Stuber

Thank you. Richard Stuber from Numis. Just really one question on hotels. I mean, you talked a lot about the supply constraints and sort of – and the prices you can get there. Could you remind us just what your growth strategy is in the hotels? How many more hotels do you expect to build in the next sort of 2, 3 years? And again, sort of how you’ll be financing that? Will it be through the capital-light program? Thank you.

Sebastian Ebel

Due to the strength of distribution we have, hoteliers are very interested in us. And that’s also a change what has been seen if we commit to supply to customers, we will deliver it, there are great opportunities for us to invest in hotels at the movement, which we don’t’ do, because we feel oblige to the – to what we have promised. So that’s why we are working with an asset-light model and with investment through our JV companies or through our hotel fund to make sure that we have not, for the next 5-year, access to the hotel, which we make strong, but long-term. So to take the benefits out of two worlds. The main focus for investment is through these vehicles, nothing else. Second is – nothing else means very limited as [indiscernible] is always doing great investments. Second, to build further through management and franchise contracts, the TUI brand also outside Europe. And by doing that, bringing the brand, TUI, into the world, bringing the sales and product machine also into markets where we have not been yet strong.

Richard Stuber

Thank you.

Nicola Gehrt

We’re done with the Q&A. So thank you so much. Any last words.

Sebastian Ebel

Hopefully not last words, but for today. [Technical Difficulty] a market which can have challenges every day, but also have a lot of chances every day. We work hard that more chances are materialized than risk. And therefore, we – as I said before, it’s a lot of fun to move the company forward, especially if you feel for the first time more tailwind than headwind. Thank you very much for the fair analysis. And it has been – I think it has been a great – I mean, I do see representatives of banks to do successful capital launch, capital raise means a lot of trust into us, a lot of trust of the banks who supported us here to sign. And we want to deliver, and as said, we want that after another 2 years you see the TUI of today, again, in 2 years is a different animal than of today. If we would stop, we would lose. So we want to not stop, but we want to accelerate.

So thank you for being here and seeing you soon again.

Mathias Kiep

Thank you very much.