REG-TUI AG TUI AG: Q4 Pre-Close Trading Update

TUI AGAnnouncement

20/09/2022 07:15

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   TUI AG (TUI)
   TUI AG: Q4 Pre-Close Trading Update

   20-Sep-2022 / 08:00 CET/CEST
   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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                                                            20 September 2022

                                   TUI GROUP

                                        

                          Q4 Pre-Close Trading Update

                                        

   Prior to entering its close period ahead of reporting its full year
   results for the twelve months ending 30 September 2022 in December, TUI
   Group announces the following trading update.

    

   Summer 2022 set to close in line with our expectations, later booking
   pattern continues into Winter with strong ASP

    

     • Q4 expected to deliver further strong progress - Hotels & Resorts set
       to deliver its 5th consecutive positive quarter. Cruise and TUI
       Musement with significant improvement. Markets & Airlines
       significantly profitable despite airport disruptions

    

   Market & Airlines

     • Overall Summer 2022 programme^1 totals 12.9m bookings, an increase of
       1.4m since Q3 update, with bookings at 91% of Summer 2019 levels. The
       key departure months of July and August closed at 94% of Summer 2019
       levels
     • ASP continues to hold up strongly at +18% versus Summer 2019, which
       will help to soften the impact from the current higher inflationary
       environment
     • UK Summer 2022 cumulative bookings remain +4% ahead of Summer 2019,
       with booking momentum in Germany and Netherlands well ahead of Summer
       2019 levels since our Q3 update
     • Flight disruption costs remain at elevated levels but continued to
       improve through Q4
     • Winter 2022/23 bookings^1 are at an early stage and our current
       assumption is for a Winter programme close to normalised pre-pandemic
       levels with the option to flexibly adjust capacity in line with
       customer demand. We will leverage our flexible and integrated business
       model to ensure we provide our customers not only with the best winter
       holiday experience but also the assurance that TUI remains the best
       choice for holiday travel
     • Against this background, Winter 2022/23 bookings^1 stand at 78% of
       Winter 2018/19 levels with the near departure months of November and
       December at 81%. To date Winter ASP is higher at 26%
     • As usual, the UK, with 36% of the programme sold, is the most advanced
       booked at +9% and ASP up +22% versus Winter 2018/19
     • Q1 bookings, which represent a mix of late Summer and early Winter,
       are 54% sold compared to around 60% in a normalised year
     • As in Summer, we continue to see a trend towards a higher share of
       short-term bookings for Winter and strong pricing, confirming solid
       customer demand for holiday travel

    

    

   Holiday Experiences

     • Hotels & Resorts continues to perform strongly in Q4, with July and
       August occupancies broadly in line with and average rates above
       pre-pandemic levels, highlighting the strength of our integrated
       business model and our strong distribution power. We expect to see
       continued strong demand for Winter 2022/23 especially in the Canaries
       and the Caribbean
     • Cruises continues to recover in Q4, with occupancies building strongly
       and rates achieving 2019 levels. Winter 2022/23 occupancies are
       developing in line with our expectations at rates above 2019 levels.
       Short-term bookings continue to represent a large proportion of
       overall bookings, however, the proportion of mid-term bookings is
       increasing as customer confidence returns
     • TUI Musement has significantly increased the sale of tours and
       activities to 6.3m year-to date (1.2m year-to-date prior year)

    

    

    

   TUI Group

     • For financial year 2022, we re-confirm our expectations to return to
       significant positive underlying EBIT^2 and also remain committed to
       deliver our mid-term ambitions: underlying EBIT to significantly build
       on FY19^3, driven by both top line growth and GRP4 benefits and to
       return to a gross leverage ratio5 of less than 3.0x
     • ESG Update: Sustainability and ambitious ESG standards are a very high
       priority for the Board and Group Executive Committee. The criteria and
       approaches of the Global Sustainable Tourism Council (GSTC) are our
       aspiration and the benchmark for our actions in more and more areas.
       We are taking a new approach to applying the GSTC sustainability
       standards to our excursion portfolio. Our aim is to create a broad
       offer for our customers and lead them to more sustainable excursions.
       TUI is also pursuing ambitious climate targets to make the agreements
       of the Paris Climate Agreement and the EU Green Deal a success. TUI
       has submitted its emissions reduction targets to the Sciene Based
       Targets Initiative (SBTi) and will transparently document its targets,
       actions and timeline to SBTi. The sustainability agenda is to be
       presented after confirmation of the targets by SBTi
     • TUI Group will issue its Annual Report on Wednesday 14 December 2022
       and hold a presentation for investors and analysts on the same day.
       Further details will follow

    

    

    

   ^1 These statistics are up to 11th September 2022, shown on a constant
   currency basis and relate to all customers whether risk or non-risk

   ^2 In view of the ongoing COVID 19 pandemic and the war in Ukraine, the
   assumptions for underlying EBIT are subject to considerable uncertainty.
   The greatest area of uncertainty will be the impact on consumer
   confidence, should travel restrictions be reintroduced, should there be
   further cost inflation volatility and/or an escalation of the war in
   Ukraine

   ^3 FY19A underlying EBIT of €893m excluding €293m Boeing MAX cost impact

   ^4 Global Realignment Programme

   ^5 Defined as gross debt (Financial liabilities incl. lease liabilities &
   net pension obligations) divided by underlying EBITDA/R

    

   Chief Executive Officer of TUI Group, Fritz Joussen, and CFO, Sebastian
   Ebel, commented:

   "In 2022, we see a strong travel summer almost at the same level as summer
   2019. We confirm our guidance and will successfully close the 2022
   financial year with a significantly positive underlying EBIT. In the UK,
   bookings continue to be well above pre-crisis levels at +4% and bookings
   in Germany and the Netherlands have also been above pre-crisis levels in
   recent weeks. The trend has been towards higher value or longer holidays
   with a higher overall holiday budget. This is encouraging and shows the
   current importance of holidays and travel experiences in the post-Corona
   era. Our strong brand, exclusive product portfolio with proprietary
   holiday experiences at hotels, clubs and cruise ships, and strong presence
   in destinations are competitive advantages that will continue to pay off
   and that we are building on. Through the efficiency programmes
   successfully implemented during the pandemic, we have also significantly
   and sustainably reduced our cost structure. We are leaner, more digital
   and more efficient. This gives us the freedom to invest in the customer
   and the holiday experience: Quality, service and sustainability are our
   focus."

    

    

   Current Trading

   Overall Summer 2022 programme1 now totals 12.9m bookings, an increase of
   1.4m since our August update, with bookings currently at 91% of Summer
   2019 levels. Overall ASP continues to hold up strongly at +18% versus
   Summer 2019, reflecting a higher mix of package products and the
   popularity of our summer holidays which will help to soften the impact
   from the current higher inflationary environment. Over 5.3m customers
   departed for their TUI holiday during the main Summer months of July and
   August, doubling the 2.6m customers who travelled in July and August last
   year and closed at 94% of Summer 19 levels. The UK continues to remain our
   most advanced market in terms of bookings, with cumulative volumes
   remaining ahead of Summer 2019 at +4%. In particular, we see strong
   booking momentum in Germany and Netherlands since the Q3 update, with
   bookings up +13% and +16% respectively against Summer 2019 levels. The
   Canaries, the Balearics, Greece and Turkey continue to be popular Summer
   destinations for customers. We are pleased to see flight disruption,
   predominately experienced in the UK throughout May & June, improve through
   Q4, although still at elevated levels.

    

   Winter 2022/23 bookings1 are at an early stage and our current assumption
   is for a Winter programme close to normalised pre-pandemic levels with the
   option to flexibly adjust capacity in line with customer demand. We will
   leverage our flexible and integrated business model to ensure we provide
   our customers not only with the best winter holiday experience but also
   the assurance that TUI remains the best choice for holiday travel. At this
   early stage 26% of the programme has been sold, with bookings at 78% and
   the near departure months of November and December at 81% of Winter
   2018/19 levels. Winter ASPs to date are higher at 26%. As usual, the UK,
   with 36% of the programme sold, is the most advanced booked at +9% and ASP
   up +22% versus Winter 2018/19. The Canaries, Mexico, Egypt and Cape Verde
   are likely to form a key part of our holiday offer this upcoming winter.
   Q1 bookings, which represent a mix of late Summer and early Winter, are
   54% sold compared to around 60% in a normalised year. As in Summer, we
   continue to see a trend towards a higher share of short-term bookings for
   Winter and strong pricing, confirming solid customer demand for holiday
   travel.

    

   In Hotels & Resorts, as of the end of August, 350 hotels were in operation
   across key destinations such as the Canaries, the Balearics, Greece and
   Turkey for both Markets & Airlines and third-party customers. Hotels &
   Resorts continues to perform strongly in Q4, with July and August
   occupancies broadly in line and average rates above pre-pandemic levels,
   highlighting the strength of our integrated business model and our strong
   distribution power. For Winter 2022/23, we expect to see continued strong
   demand for year-round destinations such as the Canaries and the Caribbean
   with occupancies and average rates developing strongly, however, with the
   short-term booking environment to remain.

    

   Mein Schiff and Hapag-Lloyd Cruises are currently operating a full fleet
   of twelve ships offering itineraries in the Mediterranean, Northern Europe
   and around the world, with Asia itineraries resuming in Winter 2022/23.
   Marella, with its fleet of four ships, currently operates itineraries
   across the Mediterranean and in Winter 2022/23 with one ship in the
   Canaries and three ships in the Caribbean. Cruises has continued to
   recover into Q4, with occupancies building strongly and rates in line with
   2019 levels. Winter 2022/23 occupancies are developing in line with our
   expectations at rates above 2019 levels. We continue to see strong demand
   for our unique cruise brands which offer a strong value proposition for
   customers in the current inflationary environment. Short-term bookings
   continue to represent a large share of overall bookings, however, the
   proportion of mid-term bookings is increasing as customer confidence
   returns.

    

   TUI Musement our tours and activities business, continues to develop ahead
   of the capacity assumptions of our Markets & Airlines for Q4. The business
   is benefiting from our increased inventory of products offered in global
   cities as well as sun and beach locations, as third-party sales return, in
   line with a return to a more normalised pre-pandemic travel environment.
   Year to date2, we have already sold 6.3m tours and activities against 1.2m
   year-to-date in the prior year.

    

   1 These statistics are up to 11th September 2022, shown on a constant
   currency basis and relate to all customers whether risk or non-risk

   2 Up to 7th September 2022

    

    

   Sustainability (ESG)

    

   As an update to our ESG initiatives, we are the first tourism company in
   the world to apply the Criteria of the Global Sustainable Tourism Council
   (GSTC) to our experiences portfolio in order to assess the sustainability
   performance of individual tours and activities. After three years of
   development and trials, we have established an internal framework to apply
   the GSTC criteria to individual tours and activity product lines. This
   ground-breaking approach by TUI Musement recently received certification
   for meeting the standards of the GSTC, achieving the highest quality
   assurance mark that currently exists for sustainability.

    

   Over 180 experiences have gone through this comprehensive process to meet
   global sustainability standards in destinations such as Mallorca, the
   Canaries, Turkey, Dominican Republic and Croatia. By 2023, We aim for all
   TUI Collection experiences to meet global sustainability standards, one of
   the largest own-brand portfolios in the travel industry, which is
   available in over 100 destinations. We have also launched a new ‘Green and
   Fair’ label on our selling website for excursions, to help customers
   identify those tours and activities that meet the GSTC criteria.

    

   We are now in intensive discussions with GSTC about how it can develop the
   scheme further and make it available on a global basis, so other
   experience operators can benefit from our ground-breaking work. This would
   enable other operators to adopt the same approach as TUI and assess the
   sustainability performance of individual experiences against global
   criteria. If successful, this will allow sustainability standards to be
   raised across the industry and make it easier for consumers to make more
   sustainable choices.

    

   Analyst & Investor Enquiries

    

   Nicola Gehrt, Director, Head of Group Investor Tel: +49 (0) 511 566 1435
   Relations
   Adrian Bell, Senior Investor Relations Manager Tel: +49 (0) 511 566 2332
   James Trimble, Investor Relations Manager      Tel: +44 (0) 1582 315 293  
   Stefan Keese, Investor Relations Manager       Tel: +49 (0) 511 566 1387
   Anika Heske, Junior Investor Relations Manager Tel: +49 (0) 511 566 1425

    

    

   Cautionary statement regarding forward-looking statements

    

   The present announcement contains various statements relating to TUI
   Group's and TUI AG's future development. These statements are based on
   assumptions and estimates. Although we are convinced that these
   forward-looking statements are realistic, they are not guarantees of
   future performance since our assumptions involve risks and uncertainties
   that could cause actual results to differ materially from those
   anticipated. Such factors include market fluctuations, the development of
   world market prices for commodities and exchange rates or fundamental
   changes in the economic or political environment. TUI does not intend to
   and does not undertake any obligation to update any forward-looking
   statements in order to reflect events or developments after the date of
   this announcement.

    

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   ISIN:           DE000TUAG000
   Category Code:  TST
   TIDM:           TUI
   LEI Code:       529900SL2WSPV293B552
   OAM Categories: 3.1. Additional regulated information required to be
                   disclosed under the laws of a Member State
   Sequence No.:   189048
   EQS News ID:    1445629


    
   End of Announcement EQS News Service

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