TUI with successful restart of business activities / Cash flow before financing in the 3rd financial quarter 320 million euros – positive again for the first time in the pandemic | TUI Group - One of the world's leading tourism groups
August 12, 2021
TUI with successful restart of business activities / Cash flow before financing in the 3rd financial quarter 320 million euros – positive again for the first time in the pandemic
Corporate
Demand for holidays remains high: 1.5 million additional bookings for summer 2021 since May, total of more than four million guests in current holiday season
Resumption of operations generates cash inflows: Cash flow before financing around 320 million euros in the 3rd financial quarter – positive again for the first time since the start of the pandemic
Almost 70 per cent of all TUI package holiday guests use the TUI App (+21 percentage points) – strong trend towards more digital interaction with guests
Successful refinancing measures, loan maturities of 4.7 billion euros extended until summer 2024
CEO Joussen: “Customer demand and booking momentum are high as soon as travel restrictions are withdrawn. The figures for the start of the summer business are encouraging. Germany and continental European markets show high demand. In England this will only be reflected in Q4. Business is coming back and TUI's transformation is clearly having an impact.”
TUI has successfully resumed business activities in all European markets. Demand for holiday travel remains unabatedly high. As soon as travel restrictions fall in the markets, booking momentum increases significantly. A total of around 1.5 million bookings have been received since the half-year figures in May, and the Group is currently recording 4.2 million bookings for summer 2021. As before, the trend towards online bookings increased significantly during the pandemic. In the third quarter, more than half of the TUI customers booked their holidays online (52 per cent). In addition, interaction with guests is increasingly taking place digitally, with almost 70 per cent of all TUI package tour guests using the TUI App (+21 percentage points). Besides the Balearic Islands with Majorca, the Greek islands, in particular Crete and Rhodes, are among the most popular destinations for TUI guests. In addition, domestic tourism and cruises by Group company TUI Cruises as well as the TUI Group's hotel and club brands – RIU, TUI Blue and Robinson – are also in demand. In the period under review, 283 TUI hotels were open and eight of the Group's cruise ships were carrying guests. With the positive operating restart, TUI is again generating cash inflows. In the third quarter of the financial year these were higher than the current cash costs, so that for the first time since the beginning of the pandemic a positive cash flow before financing of around 320 million euros was recorded.
TUI CEO Fritz Joussen: “Our business model and the strong TUI brand remain a successful model and are the guarantee for the successful restart. Customer demand and booking momentum remain high as soon as state travel restrictions are withdrawn. Where the state gives back normal entrepreneurial freedom, we are very successful – where states intervene and restrict entrepreneurial freedom, these interventions impact bookings. With one and a half million additional bookings since May and a total of more than four million bookings for the summer business, the figures are encouraging. Especially in Germany and in the continental European markets, the current booking figures show a high pent-up demand. In England, travel could only be resumed in mid-July. Demand and bookings there will therefore be reflected in the 4th quarter. Business is coming back and TUI's transformation is clearly having an impact.”
Key figures Q3 2021: positive cash flow for the first time since the start of the pandemic, efficiency programme with strict cost discipline limits loss In the period under review, TUI generated revenue again with its successful operational restart. The accelerated transformation and global realignment with an extensive efficiency programme and strict cost discipline have simultaneously led to further savings and a very controlled cash outflow. As a result, cash inflows were again higher than current cash outflows and the Group recorded positive cash flow before financing of around 320 million euros for the first time since the start of the pandemic. Due to continued restrictions, travel could not be resumed in all markets and not in all destinations, therefore revenue reached 650 million euros and adjusted EBIT was -670 million euros.
Successful refinancing measures, increase in convertible bond and sale of real estate portfolio In the reporting period, the Group implemented various refinancing measures to strengthen its capital structure. The previously successfully placed convertible bond was increased by 190 million euros. In May, the Group announced the sale of a real estate portfolio of 21 properties. The sale underlines the “asset-right” strategy already initiated before the pandemic and was completed at the end of July. All 21 properties will remain part of TUI's hotel portfolio, will continue to be jointly operated by TUI and RIU and will contribute to the Group's hotel division revenue as before. In an initial purchase price payment, the Group received 541 million euros, with a further 130 million euros to be added by 2023. Also, at the end of July, TUI, 19 international banks and KfW agreed to extend the maturity of revolving credit facilities (RCF) totalling 4.7 billion euros until summer 2024. The Group thus has more time and flexibility to implement the planned refinancing steps in view of ongoing Corona restrictions. The goal remains the rapid repayment of the state loans. As of 9 August 2021, TUI had financial resources of 3.1 billion euros available. This is around 1.4 billion euros more than in May 2021.
Summer 2021: Booking level high at 4.2 million, strong demand and booking momentum in recent weeks – average prices +9 per cent Demand for summer holidays continues at an unbroken high level. TUI recorded a total of 4.2 million bookings for summer 2021. Average prices are nine per cent higher than for summer 2019 due to the high proportion of package holidays in current bookings. Capacity for the core months of the 2021 summer programme has been adjusted to 60 per cent of the 2019 summer programme. With clear travel rules and the lifting of travel restrictions, demand picked up significantly in recent weeks, especially in individual markets. Fritz Joussen: “It is necessary to move away from the rigid consideration of incidence levels as a measure of the pandemic. We will probably live with Covid as with other infectious diseases. The point is to mitigate the contagions, the severity and the consequences of a disease. In Europe, vaccination offers are available to everyone who wants to be vaccinated, severe disease progressions do not increase noticeably, and the health systems are not overburdened anywhere in Europe. This is a great success of the vaccination campaigns. Vaccination protects – vaccinated people are protected and are no longer a significant risk to others. Those who are not or hardly at risk should now have their liberties fully restored. This is especially true for children and young people, for whom vaccinations are not compulsory. Whether one gets vaccinated or not is and remains a personal decision. However, a few should not be allowed to permanently set the pace and restrict the everyday life of the majority.”
The TUI Group is one of the world's leading tourism groups and operates worldwide. The Group is headquartered in Germany. TUI shares are listed in the MDAX index of the Frankfurt Stock Exchange and in the regulated market of the Lower Saxony Stock Exchange in Hanover. TUI Group offers its 20 million customers integrated services from a single source and forms the entire tourism value chain under one roof. The Group owns over 400 hotels and resorts with premium brands such as RIU, TUI Blue and Robinson and 17 cruise ships, ranging from the MS Europa and MS Europa 2 in the luxury class and expedition ships in the HANSEATIC class to the Mein Schiff fleet of TUI Cruises and cruise ships operated by Marella Cruises in the UK. The Group also includes Europe's leading tour operator brands and online marketing platforms, for example for hotel-only or flight-only offers, five airlines with more than 130 modern medium- and long-haul aircraft and around 1,200 travel agencies. In addition to expanding its core business with hotels and cruises via successful joint ventures and activities in vacation destinations, TUI is increasingly focusing on the expansion of digital platforms. The Group is transforming itself into a global tourism platform company.
Global responsibility for sustainable economic, environmental and social action is at the heart of our corporate culture. With projects in 25 countries, the TUI Care Foundation initiated by TUI focuses on the positive effects of tourism, on education and training and on strengthening environmental and social standards. In this way, it supports the development of vacation destinations. The globally active TUI Care Foundation initiates projects that create new opportunities for the next generation.
