22 September 2020

Pre-Close Trading Update

Prior to entering its close period ahead of reporting its full year results for the twelve months ending 30 September 2020, TUI Group announces the following update on current trading.

C-19 Highlights

  • Prior to the C-19 pandemic, January 2020 saw the best booking month in the company’s history
  • TUI was on track to deliver a strong result for financial year 2020
  • Since the worldwide travel suspension in March, significant self-help actions have been taken to address the impact of the C-19 pandemic across the business
  • Liquidity swiftly managed by securing state aid from the German Federal government
  • Cash fixed costs reduced by more than 70% during the immediate lockdown period
  • Comprehensive compensation agreement finalised with Boeing
  • Completed the Hapag-Lloyd Cruises disposal to TUI Cruises joint venture in a challenging environment
  • First tour operator to successfully restart operations across multiple markets and destinations, helped by the advantage of our integrated and diversified business model
  • Global Realignment Programme launched to permanently reduce overhead cost base by 30% across the Group
  • Summer 2020 and Winter 2020/21 capacity reduced as a result of recent volatile changes in travel restrictions
  • Overall FY20 Q4 cash outflow remains as expected
  • As at 20 September 2020, cash and available facilities on a pro forma basis including additional stabilisation package, would amount to €2.0bn

Chief Executive of TUI Group, Friedrich Joussen, commented:

“We have successfully restarted our operations; customers are enjoying their holidays with newly adapted hygiene protocols and we have taken 1.4m customers on their holidays since restart1. Destination availability at present is highly influenced by government policy and development of the pandemic, meaning the environment remains volatile, and is likely to remain so for the next few quarters.

“Leisure holidays remain important to customers and have been one of the most missed activities2 during the pandemic, with leisure travel expected to recover faster than business travel. Our integrated model, underpinned by our trusted and leading brand, offering differentiated products and attractive value propositions, combined with proven flexibility in a volatile environment, means we are strategically well placed to benefit as leisure travel volume recovers over the coming seasons.

“We are on track to complete the additional stabilisation package provided by the German Federal government as announced on 12 August with waiver approval secured from our Senior Notes bond holders. Our Global Realignment Programme is firmly underway with digitalisation initiatives accelerated throughout the Group. TUI will emerge a stronger, leaner, more digitalised business and is well positioned to benefit from the expected recovery.“

1 Since restart of operations in mid-June to end of August 2020

2 BCG COVID-19 consumer sentiment survey UK, US, Italy and France https://www.bcg.com/en-gb/publications/2020/covid-consumer-sentiment-survey-snapshot-5-18-20

About TUI Group

TUI Group is the world’s leading integrated tourism group operating in more than 100 destinations worldwide. The company is headquartered in Germany. The TUI Group’s share is listed in the FTSE 250 index and in the German open market.

In financial year 2019, TUI Group recorded turnover of around €19bn and an operating result of €893m. The Group employs more than 70,000 people worldwide. TUI offers its 28 million customers, including 21 million customers in European national companies, integrated services from a single source. It covers the entire tourism value chain under one roof. This comprises more than 400 hotels and resorts with premium brands such as RIU, TUI Blue and Robinson as well as 18 cruise ships ranging from the MS Europa and MS Europa 2 luxury class vessels and expedition ships to the Mein Schiff fleet of TUI Cruises and the vessels of Marella Cruises in the UK. The Group also includes leading European tour operator brands, five airlines with 150 modern medium- and long-haul aircraft and 1,600 travel agencies. Apart from the expansion of its core business with hotels, cruises and destination activities, TUI is increasingly investing in digital platforms. The Group is transforming as a digital company.

Global responsibility for sustainable economic, ecological and social activity is a key feature of our corporate culture. TUI Care Foundation, initiated by TUI, promotes the positive effects of tourism, education and training as well as environmental and social standards with projects in 25 countries. It thus contributes to the development of the holiday destinations. TUI Care Foundation, operating around the world, initiates projects creating new opportunities for the next generation.