TUI AG (TUI)
TUI AG: Q3 INTERIM FINANCIAL REPORT 1 October 2022 – 30 June 2023
09-Aug-2023 / 08:00 CET/CEST
The issuer is solely responsible for the content of this announcement.
TUI GroupQuarterly Statement1 October 2022 – 30 June 2023ContentQuarterly Statement Q3 2023.. 3Summary. 3Consolidated earnings. 9Segmental performance.. 10Cash Flow / Net debt / Net capex and investments. 15Consolidated income statement. 16Cash flow statement. 17Financial position.. 18Alternative performance measures. 20Other segment indicators. 21Cautionary statement regarding forward-looking statements. 22Financial calendar. 22Contacts. 22This Quarterly Statement of TUI Group was prepared for the reporting period from 1 October 2022 to 30 June 2023.Quarterly Statement Q3 2023SummaryQ3 back to profitability with an underlying EBIT of €169.4m improving strongly by €196.5m year-on-year. Current booking levels confirm our expectations for a strong Summer and we are on track to deliver on FY 2023 expectations. - The continued popularity of our unique product offering was underlined by 5.5m customers enjoying a holiday with us in the quarter, an increase of 0.4m or +9% versus the prior year and at 95% of Q3 2019 customer levels on a like for like basis1. As a result, average load factor for the quarter was 93% (Q3 2022: load factor 92%).
- Group revenue of €5.3bn, was 19% higher across our segments versus the prior year (Q3 2022: €4.4bn), supported by higher volumes and prices. This reflects the strength of demand for our products with Group revenue 11% above pre-pandemic levels driven by improved prices (Q3 2019: €4.7bn).
- Q3 Group underlying EBIT at €169.4m, improved strongly by €196.5m and €122m excluding the impact of €75m flight disruption costs in the prior year (Q3 2022: €-27.0m loss) and is the first profitable Q3 since the pandemic:
- Hotels & Resorts surpassed the already strong performance in the prior year, reporting a fifth consecutive quarter above 2019, supported by improved operational performances across our key brands.
- The recovery in Cruises continues with the segment achieving a fifth positive quarter since the start of the pandemic. All of our three Cruise brands contributed to the positive EBIT development boosted by increased volumes as well as higher occupancies.
- Markets & Airlines delivered a solid improvement, driven in particular by higher prices and strong demand. In addition, the segment profited from the absence of the flight disruption costs which impacted the prior year.
- Following the €1.8bn capital raise in April, we successfully extended our existing syndicated credit lines totaling €2.7bn in May. Both are significant measures to improve our credit metrics, restore our balance sheet strength and are a vote of confidence in TUI. As a result we have seen a first improvement in our credit rating during the quarter, with S&P upgrading in April to B and Moody’s upgrading in May to B2 both with a positive outlook.
- The net debt position as of 30 June 2023 was €-2.2bn, an improvement of €1.1bn year-on-year (30 June 2022: €-3.3bn). This is driven by the net proceeds (following final repayment of the WSF obligations) from our capital increase in April 2023 and a positive free cash flow.
- We confirm our expectations for a strong Summer. Bookings total 12.5m2 for the season, a 6% increase versus Summer 2022 and an increase of 4.3m guests since our Half-Year Financial Report H1 2023. As a result, bookings are close to pre-pandemic levels at 95%. ASP continues to hold up strongly at +7% against the previous season and +26% against Summer 2019.
- Bookings were impacted in the short-term as a result of the wildfires in Southern Europe and flight cancella-tions to Rhodes, but have subsequently recovered as operations have resumed, enabling customers to enjoy their holidays once again. As a result, bookings for the last week were +5% against Summer 2022, with ASP up +9% over the same period and ahead of the cumulative position.
- We continue to monitor the situation concerning the wildfires in Southern Europe and remain in close contact with local authorities. As events unfolded in Rhodes, the safety of our guests and colleagues in the affected areas was paramount. Together with our 300 service staff, we were able to provide our guests with 24/7 support and welfare. We operated twelve repatriation flights with additional aircraft deployed to bring our guests home safely, all highlighting the benefit of our customer proposition. However, we also want to support the communities on the island directly affected by the fires. The TUI Care Foundation has launched a fundraising campaign. Every donation received will be doubled by the foundation.
- In total we evacuated 8,000 of our guests, but it is also important to point out that 80% of our guest on the island have been unaffected. Rhodes accounts for ca. 5% of our full Summer 2023 programme. The financial impact of the wildfires in recent weeks covering cancellations & lost margin, customer compensation as well as repatriation flights & welfare costs has added ca. €25m of cost to our full year 2023 results.
1Excluding businesses sold and discontinued since 20192 Bookings up to 6 August 2023 relate to all customers whether risk or non-risk and include amendments and voucher re-bookings - With 86% of the Summer sold, which is in line with 2022 and 2019 levels and given the latest booking position, we are confident in our Summer 2023 capacity assumption of being close to normalised 2019 Summer levels.
- We reconfirm our expectations to increase underlying EBIT significantly for financial year 20231.
1 Based on constant currency.Sustainability as opportunity- Sustainability is a fundamental management principle for the TUI Group and a cornerstone of our strategy for continually enhancing the value of our company. We firmly believe that sustainable development is critical to long-term economic success.
- We have near-term targets set for airline, cruises and hotels, to reduce emissions in line with the latest climate science. These 2030 targets were validated by the Science Based Targets initiative (SBTi) and published in our Q1 Interim Report in February 2023.
- Together with destinations, TUI is shaping the future of sustainable tourism. As a sign of this joint responsibility, the government of Cape Verde, TUI Group and TUI Care Foundation have signed a Memorandum of Understanding “Tourism for Development” to intensify their cooperation on a wide range of sustainability topics. Their joint goal is to strengthen tourism on the islands as a force for good. The agreement introduces key strategic focus areas that the three signatories want to focus on in their joint efforts. The agreement covers a wide range of 18 issues – from renewable energy and environmental protection to local entrepreneurship empowerment, cultural heritage protection and education.
- TUI is driving the sustainability transformation of the tourism sector through its initiatives. An important milestone has been achieved for TUI´s excursion business: 1,000 excursions offered on TUI Musement platforms have now been checked against global sustainability standards. TUI is one of the first companies in the industry to start applying global sustainability standards to its experiences portfolio. The certified process for experiences is designed to support local suppliers on their way to sustainable offerings and therefore advance the entire sector.
- In our Cruise operations Mein Schiff has now successfully tested a bio-fuel blend derived from waste cooking oil, on one of its vessels. These fuels reduce sulphur oxide particles and carbon emissions by up to 90% compared to fossil fuels.
- Recently, TUI has successfully extended the maturity of its existing credit lines of €2.7bn by a further two years. The syndicated credit line will now mature in July 2026. The interest conditions of this revolving credit facility (RCF) are linked to the achievement of the Group’s emission reduction targets confirmed by SBTi.
- Transparency on TUI´s sustainability progress is an integral part of our journey towards a net-zero company. Independent, external evaluation of our actions means accountability towards the public. ISS ESG has upgraded TUI Group’s sustainability rating. With the new C+ rating, TUI is listed as a “Prime Investment” in the tourism sector for the first time. The transparency level for TUI’s sustainability commitment is rated as “very high”.
| TUI Group – financial highlights | | | | | | | | | | | | | | | | | | | € million | | | Q3 2023 | | Q3 2022
adjusted | | Var. % | | 9M 2023 | | 9M 2022
adjusted | | Var. % | | Var. % at constant currency | | Revenue | | | 5,286.0 | | 4,433.2 | | + 19.2 | | 12,189.4 | | 8,930.8 | | + 36.5 | | + 37.9 | | Underlying EBIT1 | | | | | | | | | | | | | | | | | Hotels & Resorts | | | 112.5 | | 104.9 | | + 7.3 | | 262.2 | | 189.7 | | + 38.2 | | + 41.0 | | Cruises | | | 64.0 | | 3.0 | | n. a. | | 79.0 | | - 102.3 | | n. a. | | n. a. | | TUI Musement | | | 13.1 | | 13.3 | | - 1.6 | | - 13.1 | | - 18.1 | | + 27.9 | | + 53.9 | | Holiday Experiences | | | 189.7 | | 121.2 | | + 56.5 | | 328.1 | | 69.2 | | + 373.9 | | + 387.8 | | Northern Region | | | - 1.1 | | - 93.1 | | + 98.9 | | - 270.6 | | - 445.7 | | + 39.3 | | + 33.8 | | Central Region | | | 8.8 | | 20.3 | | - 56.8 | | - 122.4 | | - 62.4 | | - 96.0 | | - 98.9 | | Western Region | | | - 1.0 | | - 70.2 | | + 98.6 | | - 103.9 | | |
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