What is required for a strong start

TUI Group ready to resume travel activities
Pandemic stops strong start to FY 2020
Global realignment and cost reductions decided
Transformation of the group accelerated

13.05.2020 – 07:04


Hanover (ots)

May 13, 2020

- Chairman of the Executive Board Fritz Joussen: "People want to travel. Europe must now gradually open up. Summer vacations are possible responsibly and with clear rules. We will reinvent vacations in 2020." - TUI Hotels in Germany and Europe ready to go. Increased hygiene and protective measures in all touristic activities of the group. - Strong start to the 2020 financial year before the pandemic: sales grow by +6 percent to 6.0 billion euros in the first five months. Operationally adjusted EBIT after five months +21 percent to -240 million euros [1] [2] - First bookings for summer 2021 +114 percent - TUI Cruises 2021 load factor at normal level - Group-wide overhead costs to be reduced by a total of 30 percent - Available liquid funds (as of May 10, 2020): 2.1 billion euros

TUI is ready to resume travel activities in Germany and Europe soon. Almost two months after almost all business areas had to be shut down due to the worldwide travel bans, the tourism group is prepared to resume operations. The first TUI hotels on Sylt and in Mecklenburg-Western Pomerania will open their doors to guests in the coming days. TUI's hotels and clubs are also ready to welcome holidaymakers in European destinations. A 10-point catalog for increased hygiene and protective measures is currently being implemented in the Group's houses around the world, offering guests the greatest possible security. Fritz Joussen, Chairman of the TUI Group: "The safety and well-being of our guests and employees around the world continue to have top priority. Summer holidays in Europe can now be gradually made possible again - responsibly and with clear rules. Organized travel offers great advantages right now: With the trusted brand TUI, we offer security, on-site support and guarantee the return trip home in special situations. Together with the destinations and our partners, we have developed extensive measures to protect our guests. The demand for holidays is still very high. People want travel. Our integrated business model allows us to immediately resume travel activities as soon as this is possible again. The season starts later, but could take longer. For 2020 we will also reinvent holidays: New destinations, changed travel periods, new offers Place, more digitization. "

Strong development before the pandemic broke out

In mid-March, before the end of the first six months of the 2020 financial year, the group had to suspend operational travel activities due to COVID-19 and the associated global travel bans. Up until this point in time, the world's leading tourism group was on track: In the first five months of the financial year, sales increased by six percent to 6.0 billion euros. Adjusted operating EBIT excluding the effects of one-off effects was EUR -240 million - an improvement of 21 percent compared to the same period of the previous year. Joussen: "We were economically very successful before the crisis and will be again after the end of the crisis. We have a functioning and successful business model and over 21 million loyal customers who trust our strong brand."

Bridging loan ensures liquidity

Immediately after TUI was forced to largely cease business as a result of global travel restrictions, the group decided to apply for a KfW bridging loan of 1.8 billion euros. This is to cushion the unprecedented effects of the pandemic until normal business operations can resume. The German federal government approved the loan on March 27th. On April 8, the banks, which are providing TUI's existing credit line of 1.75 billion euros ("Revolving Credit Facility"), also gave their approval for the contractual integration of the new loan. The quick action of the TUI Executive Board thus made it possible to secure additional liquidity at short notice. As of May 10, 2020, the group had financial resources and available credit facilities of around EUR 2.1 billion.

Global realignment accelerates transformation

The loans received must be repaid in a short period of time and the high level of debt quickly reduced. So that the strong operational development can continue even in a globally weakened market after the pandemic, the Group is now implementing a global program with extensive cost-cutting measures. This will further accelerate the already initiated transformation into a digital platform company. Joussen: "TUI should emerge stronger from the crisis. But it will be a different TUI and find a different market environment than before the pandemic. That requires cuts: in investments, costs, our size and our presence all over the world. We must be leaner than before, more efficient, faster and more digital. We will implement our "Asset right" strategy, which we started in 2019, even more targeted and faster. We are becoming more digital at all levels - especially the expansion of digital platforms in the new markets and for our activities in The holiday regions will be accelerated. We want to permanently reduce our so-called overhead costs across the entire Group by 30 percent. Worldwide, this will have an impact on around 8,000 positions that we are not filling or shedding To find our way back in the past few years, we now have to implement the realignment quickly. "

Outlook: Forecast for the full year not yet possible

On March 15, the Management Board withdrew the forecast for 2020 as a whole. Due to the ongoing pandemic and the ongoing global travel restrictions, the Management Board is also refraining from issuing a new forecast for the 2020 financial year under the current circumstances. Currently, 35 percent of the 2020 summer program is still booked.

[1] at constant exchange rates

[2] Excluding the effect of the flight ban of the 737 MAX, the one-time expense for investments in digital platforms and the one-time hedging profit in the previous year

Press contact:

TUI Group
Group Corporate & External Affairs

Kuzey Alexander Esener
Head of Press
Corporate communications
Tel. +49 (0) 511 566 6024
[email protected]

Original content by: TUI AG, transmitted by news aktuell