TUI AG

Good afternoon. Thank you for being on the call and sorry for the slight delay.

The whole day is a little bit hectic on our side. But when we arranged the date we couldn't know that actually elections would be in the U.K.

tomorrow. So we thought it would be good to pull in our announcement.

And advancing is more important than maybe the elections in the U.K. So therefore sorry for being late but I - anyhow - and Birgit and I will be - we’ll try to be concise and hopefully we can answer all your questions.

So if you turn now to last year, I can say that in light of 737 MAX and the market conditions, I think we had a very successful year, because we could improve our turnover to 3%, so more customers of 2.7%, more customers traveling with us. Of course, no Thomas Cook effect in there and also, I can tell you for trading now into the future it looks good.

Underlying EBITDA would have been flat if we had - if we didn't have - if we had not had the MAX effect. Otherwise, we stayed in line with our guidance which we gave - the last guidance, which we gave out in April which is and also good development consecutively to build also focus a little bit on the cash front which is even I think more important.

And then, EPS was €0.89 and dividend per share is €0.54 according to our existing dividend policy and we have actually launched a new dividend policies this morning. Birgit will also take you in more details to the dividend policy which we think is the right one.

If you look at our growth profile which we expect to have we are just in front of a huge transformation of the company. We have transformed the company from a trading company fortunately into a digital - into a vertically-integrated business.

Now, we are thinking about the full digital transformation for digital - becoming a digital platform business. That is of course has huge upsides and we believe it’s very attractive for us in our staffing position that we are today.

And then, ROIC, very healthy numbers today, but the venture cost of capital line I think that’s also pretty good. Now, that said, Holiday Experiences’ is the backbone of the business.

Today, we start with hotels and resorts. You'll see very healthy numbers.

A growth of underlying EBITDA of 8%, mainly driven by the average revenue per bet which has actually come up from 63 to 66. Now, over the year, you had question marks on, could we sustain profitability in the hotels and there’s a huge migration from people who actually now to let vacation in Spain.

There’s more in Turkey again, but we have a lot of hotels in Spain. But at the end of the day, you see the diversification of what portfolio of hotels.

It’s a pretty good one so it’s a very solid and very robust business. Now, on cruises, equally very nice story because all cruise companies are contributing to our growth and when you look on the left side, you'll see that this has been 13% EBIT and on the left side, you see the different companies and it's all very healthy and nothing to add.

Maybe what really causes you could argue, why there is the average daily rate going backward from £178 to £174? Is that weakening of demand and I can assure you it's not.

Quite to the contrary, the demand is huge and we wish to have more capacity. But you see the growth of almost 20% in capacity.

That is, of course, aligned or coincidental that this actually a good replanning and, of course, each additional what you do is actually a less profitable route than the route before. So, we had one ship more in the Mediterranean over the summer but that is actually causing lower yield.

But at the end of the day, a very, very healthy business contributing the growth, as you see on the right, the lower box, this thing right here. So, that’s a very healthy and very good position and good growing business.

And then, the newest star on our horizon is the destination experiences. If we double the volume, more than double the volume and the underlying profitability is up 44%.

I mean, of course, then we had integration cost. But even if you include the integration cost, you are up 22%.

Now, here we say, particularly into the future, when we come to talk about strategy, here we sacrifice profitability into the future a little bit because we want to be the number one consolidator in the world for experiences, and too much profitability is dangerous. We could gear it to profitability like we do here, but we will actually put a little bit more gas and actually consolidate faster.

So you should see stronger growth and a little bit less profitability and even stronger growth than this, and I think that’s what the story of this thing will be in the future. We want to be absolutely certain that we are leading consolidation in the world.

So then we come to the market, and here you have actually in the bridge two brown or beige or whatever blocks. One is the MAX, €293 million, as I said.

And then the other one is the €113 million, and that is the headwind for overcapacities which we talked about. And now, all that said, consolidation will happen at a certain point in time, and now I can say consolidation is happening, at least in some of the countries.

I mean, in the U.K. it’s very clear.

I mean, this is very, very different business than it has been in the past. For the winter, for the summer, it’s very early days.

It's not easy to say, but for the winter, it’s different. And unfortunately in Germany, it's not that visible because Condor is still flying this state money.

So the consolidation has not happened, and we will see - Nordics, as you know, the business or wing business was bought by - is it a Norwegian or Swedish billionaire? I don’t know, but it is somebody who is actually obviously interested.

And the business is competing like it was in the past, so no change. Actually, we see a little bit in the U.K.

looks up additional demand for additional aircraft where we see also growth but different. It’s actually better - banner is actually - we are taking same amount of aircraft.

As you know, we had an airline which is oversized to our - to operator activities. So we are re-qualifying recliner seats through package which has higher margin.

And so we will see - in Benelux, we will see growth without additional investment, which for the Benelux cluster is the right thing to do because many of the airports which are interesting are slot restricted. So we think it’s a better strategy to increase margins and not volume.

And it’s a little different to the U.K. That said, I would like to hand over to Birgit to guide you a little bit through the numbers and the things below EBIT as well as our proposal which we have offered for different policy.

Thank you, Friedrich. 2019 was a challenging year for the whole travel industry.

And in addition, TUI was impacted by the by Boeing MAX grounding, costing us close to €300 million. However, I’m pleased to report that we were able to maintain our revised EBITDA guidance of March.

And on all other parameters, we ended within our original guidance. So on this slide, the underlying EBITDA bridge and as Friedrich already covered, Holiday Experiences businesses continue with very strong performance.

And that is what you see here. So what we do here is actually simplify the message.

And you see the €72 million increase. And this is also offset by a weaker first half-year performance in our two operating business for which we issued an ad-hoc statement earlier in the year.

And we saw continued Brexit uncertainty and airline overcapacity as the latest customer booking profiles resulting in a lower margin performance in the year. And then the positive in all other segments is driven by one-off cost saving.

And all other larger events of a onetime nature almost net each other out as you can see from this graph. So this leaves with an operational EBITDA performance which remained broadly flat versus last year, and due to the robustness of our business.

And as you can see we separated the onetime effect of the €293 million Boeing 737 MAX costs. And these costs are flipped in around €240 million direct operational cost, and the remainder being the commercial impact on our operations in line with our communication in March of this year.

This brings us to an underlying EBITDA of €880 million at constant currency, or €893 million at actual rate, about a quarter lower versus previous year entirely attributable to the Boeing 737 MAX impact. So then moving to the income statement on Slide 11, and slide in last year's annual report, we have applied IFRS 15 and IFRS 9 from the 1st of October 2018 as outlined in the appendix and also in corresponding Excel download on our website.

So we achieved a turnover of nearly €19 billion in financial year 2019, which was up 3% compared to the same period of last year, partly due to an acquisition effect in Destination Experiences segment. And our underlying EBITDA is down by 13% versus last year, which corresponds with the growth of 6% if you would exclude the effect of the Boeing MAX 737 branding.

And excluding the effect of acquisitions and divestitures, our administrative expenses decreased by 5.6% over the same period versus last year, as we focused on operating leverage and tight cost control. Adjustments of €125 million are in line with guidance and we related to the restructuring in markets and airlines to drive market competitiveness.

And the reduced interest year-on-year primarily is due to tax-related release of interest provisions and both on effective tax rate increase due to a one-off depreciation on tax loss carryforwards. So, the group result after minorities is down €311 million year-on-year.

The grounding of the MAX being the most significant driver of this development, and to a lesser extent the non-receipt of elements in discontinued operations and tax in 2018. But overall, a resilient operating performance from the business in a very challenging market.

So, moving over to the free cash flow slide on Slide 12. So, here, I'm very pleased to let you know that we were able to realize an operating cash flow broadly in line with last year despite the Boeing 737 MAX impact and the main drivers for this resilience were our EBITDA contribution from Holiday Experiences with 12% growth or €120 million year-on-year, significant working capital improvement in the fourth quarter and it was due to the successful implementation of sustainable working capital initiative, and also Q4 benefited from a little booking strength of this year.

And also, as we’ve said during last quarter, and then, a positive cash effect during the last week of our fiscal year in context of the collapse of one of our major competitors. And then, as planned, a non-repeat of one-off in 2018 in tax and pension contributions.

Then, the free cash flow for dividends remains with circa minus €600 million in line with the expectations, pre Boeing MAX grounding but equally demonstrates our new - take a close look at our capital allocation to secure future growth and opportunities. I will come back to this later.

Allow me to give one forward-looking statement for working capital in the first half of full year 2020. We expect a higher working capital outflow versus last year based on our announced capacity prod for accommodating Thomas Cook customer.

So then, moving over to the next slide, on net investments. So for the 12-month period, they amounted to €1.1 billion and are fully in line with guidance and are as last year of our planned reinvestment of disposal proceeds.

And as you can see in the pie chart at the bottom, around two-thirds of our cash - capital expenditures for the 12 month period were growth related. In addition, we made significant investments in technology to further drive efficiencies and we are executing upon our plan and committed aircrafts refitting mainly through financial reasons.

And for financial year 2020, we expect our net investments to be on a more normalized level with around €750 million to €900 million. And as one of my finance priorities, I want to confirm that we are and stay committed to our disciplined investment approach and we’ll continue to closely monitor our capital expenditures in order to make sure that we drive the committed incremental returns.

So, moving over to Slide 14, as expected, net debt increased around €900 million due to the discussed free cash flow development and our planned asset financing. Two-thirds of asset financing are related to committed aircraft re-fleeting and the enablement of cruise ship financing.

The other mainly includes FX effects and financial debt from asset acquisition. So despite the Boeing 737 MAX impact, our gross leverage ratio remains at the upper end of our guidance of 2.25 to 3 times, and excluding the MAX impact, our gross leverage ratio would have been 2.7 times, broadly in line with prior year.

So then moving to Slide 15, this shows that our gross leverage ratio guidance remains unchanged within the range of 2.25 to 3 times, and these ratios exclude a potential impact of a Boeing MAX grounding situation beyond April 2020. We have a credit rating of BB with Standard & Poor’s and Ba2 with Moody’s since 2017, both with negative outlooks.

We acknowledge the current challenges in the travel market and Boeing MAX grounding specifically weighing on our performance. We are committed to keep our leverage ratio in tight control in order to demonstrate our commitment towards our rating agencies and in order to continue to have access to the debt capital markets at attractive rates when we required.

In a very challenging year and environment, we continue to enjoy a solid and healthy financial profile, with a weighted average cost of debt of around 1.6% and weighted average maturity of our financial instruments of three years at the end of September. At the end of the fourth quarter, we had full access to €1.5 billion of undrawn commitments under our revolving credit facility which covers the seasonal cash requirements of our business.

So then moving over to Slide 16, so let me summarize our financial performance. So despite - as I said before, despite the previously discussed headwind, we are proud as an executive board that we delivered an underlying EBITDA in line with our revised guidance in this challenging environment.

We gave early clarity on the expected Boeing MAX cost impact and our early calculation for the communication scenario turned out as planned. We ended up exactly in the middle of our net investment guidance at €1.1 billion.

We delivered above expectations remaining in our gross leverage guidance, and the proposed dividend per share of €0.64 cents is in line with our current dividend policy, reflecting the forecasted decline in underlying EBITDA of minus 25.6%. So as discussed with you for a while now, we have a very strong focus on cost efficiencies, operational cash flow and capital allocation in order to create funds to capture every value-creating growth opportunity going forward.

So then moving to the next slide on the future capital allocation framework, as we execute our second transformation phase which we’ve explained in - and will also explain it in more detail in the next slide, but financial strength will remain a key component for resilience when facing external headwinds. So first, we focus on organic growth through investments in own asset and digital platforms, and Friedrich will talk about there is plenty of opportunity for us ahead in the coming years.

And second, we remain committed to effective shareholder return and, however, our current dividend policy leaves on our free cash flow and liquidity headroom. We are as truly a growth company operating in markets with significant growth potential like for instance if the nation experiences and we are entering into a new market with our GDN-OTA platform and at the same time we are investing in sustainable growth in our hotels and cruises business.

So we therefore decided for a new dividend policy which gives us the ability to successfully execute our transformation while offering our shareholders attractive returns at the same time. I will go through the details of our new dividend policy on the following chart.

And under the new policy, the dividends will be new built of our business model and financial structure. So, first, last year we continued to look for accretive M&A and portfolio optimization to make use of external market opportunities which strengthened our growth.

And we demonstrated this in the past as well and also will do so going forward. And, fourth, if excess cash is available, it shall be returned to shareholders.

And then very importantly, it is the - how do you call it - banner below. It's underpinning all of the above.

We will be disciplined in maintaining a solid balance sheet and keep our target growth leverage ratio comfortably within the range of 2.25 to 3 times. So then moving over to our dividend policy.

So TUI’s dividend policy due for payment in 2021 will changes as follows. A core dividend payout of 30% to 40% of the group's underlying earnings after tax both minorities at constant currency with a dividend floor of €0.35.

So we see this new dividend policy as an attractive balanced and sustainable element of shareholder returns while securing future growth. The floor guarantees shareholders a minimum payout irrespective of the cyclical market environment of the tourism industry and subsequent impacts on underlying earnings after-tax.

To give an indication, based on our share price at the end of financial year 2019, the dividend floor would represent a percent yield of 3.3%. This updated capital allocation framework will provide TUI with increased flexibility as it balances the various components of value creation.

So let me now hand back to Fritz, who will be giving you an update on our strategy.

Birgit, thank you very much. So I think it is important now to talk about how we generate growth and where do we want to grow, what do we want to do, how do we want to change the company.

We changed it from being a trading company into a vertically integrated business. And as I said, we believe putting it right now into the field of digital platform, become a digital platform business, is actually at the core of our strategy.

When you look at TUI today, you'll see it being active in the touristic market. It has 21 million customers, which is serving in our source markets.

And then you look at the growth of the market at 3% above GDP, Market & Airlines are growing slower than Hotels, Cruises, and DX, and that at digital experiences, and you see that actually these experiences are growing 4% to 7%, and the markets are 1%. So putting our investment into these markets is definitely a very rational decision.

Now when you look on the next slide in our integrated business model which we are in that right now, and at the start of the new digital transformation and we believe it is a very strong position because it has a very strong customer base. It has differentiated content.

Yes, we have a lot of investment in hotels, and we like to talk about hotels and cruises. We think it's the strong returns on that’s higher than PR3, we believe it’s beautiful business.

But the reason this is so beautiful business is the scale we are adding in our markets in airlines. And so, we have more or less 7 million customers in our experiences, we have 21 million customers in our market in airlines and with that we make sure that we have such premium returns.

So this particular integration business - of business is actually absolutely the right thing to do. Now, owning customers is very good.

And now because you can think about upselling and we’ll talk about that in a minute. And, as I said, the experience itself might have a little bit of more risk, but because of the double digit diversification of our business, many of those market and then hotels in many destinations you have seen how robust the business is even if demand shifts from investment to Internet and so on and so on.

Now, being in this position, we thought very hard of what we should be doing and we condensed our strategy, the choices we make, the strategic choices we make into four areas. And in these areas I would like to cover now a little bit more in detail.

That's the reason why I - look onto it the next page. And here, we see in the markets and airlines please, that we have a lot of leading market positions.

The tour operating is still the largest intermediary segment. And by the way many people say it's that - the portions of tour operating in the markets is still growing, so it cannot be that bad.

And we have some structural and cyclical pressures, but at the same time, the consolidation which I always talked about is now happening, and you can see that the bankruptcy of Thomas Cook in the markets that the capacity is leaving. We see an enormous shift and demand and therefore, you know, I always say, the more the conversation will happen it always comes unexpected, but you know now it came and to be also very clear what we exactly did.

The first thing we did was we went into destination and actually covers - we tried to acquire the hotels of Thomas Cook because that made demand, right? So, it's very easy.

The customers have booked the holidays in these hotels but they don't have anybody to bring them there. So therefore, actually, we were in destination, particularly in Turkey where Thomas Cook was strong Egypt, as well as Greece.

We acquired the majority of properties. We also did a new fleet planning particularly for the U.K.

and the increased capacities to serve demand. Slot availability was secured, so that is something which is important.

And here, it’s very clear we want and that's the title of the slide, protect where possible, extend market leadership. So, market leadership is not for sale and therefore we are pretty let's say front foot on this.

And in order to do that it's very important to have - to be cost competitive because the only danger is really in these situations that somebody can hold privacy because they have lower cost structure, so this market and domain transformation, the front aviation project we had called reduction. The building one can deploy many strategies that we have all IT systems just once and so on and so on.

It’s all for serving the purpose of being cost competitive and therefore the transformation is on its way. We should not think that the bankruptcy of Thomas Cook will change that paradigm.

So, we buy a little bit time but at the same time we push very, very rigidly on this transformation project and that's also facilitates not better cost structures only but also more agility and that's the reason why we say we can do things in a more agile way. We introduced very competitive accommodation only on dynamic packaging structures because when once we are on one platform this can be done more or less once instead of six or seven times.

So that is the strategy on market and airlines it’s very straightforward, very down to earth, very - we are just fighting for market shares and we are fighting for profitability and we are the number one in this market and we want to stay number on that market is very straightforward. Now on Holiday Experience it’s a little bit more tricky because we have more choices and that’s the reason why we also cover them in two slides, instead of one slide.

Here, we - as I said, we are, on cruises as well as on hotels, very positive with the ROIC, displayed by what our peers have and the distance overall is growing, and the reason for that is vertical integration. We can serve and achieve good occupancies as well as good rates because we have the 25 million customers in the market and that’s very good.

At the same time, we have actually - we have quite some grants we consolidated and - but we will consolidate even more, and we will be a little bit more selective when it comes to investment, and that is what we always said on a normalized level of investment we had done in expansion as we promised after the merger but now, a little bit more normalized. But what does normalized mean?

Normalized means rigid and according to strategy, and the next slide shows that we have two cornerstones or two pillars of our strategy in our hotels, particularly Riu we will - it’s a very strong brand. This investment demand but, at the same time, very high returns because they particularly build hotels that actually such a supply.

That’s their main competence. So Riu competence is building stuff and also being on time, in budget and then also the distribution power , which I get for as TUI.

But I mean, being in Zanzibar or being in Tanzania or being in - it's a worldwide company specialized on building new destinations and going new destinations. And that's the reason why you need the investment because there are no other hotels.

If there were other hotels, the margins would be nowhere like they are now, obviously. So we need to keep this animal alive and running.

It will be a little bit limited in growth because there’s not that many opportunities you find. But once you find these opportunities, usually, they are the jewels of our hotel strategy.

So here is okay with assets. That's the reason why we say asset-right, okay?

So now TUI Blue is now a little bit of a different approach. In TUI Blue, we say we build scale, and long term, it will also - Robinson and Magic Life will be part of what we call the TUI Blue family.

TUI Blue is more the synonym for our hotel brand. It will be the biggest leisure hotel brand in the world, and we have actually started with an asset-right approach as well because what you do when you have a new brand, you invest.

You try to make the brand shiny. You try to get good ratings.

You try to get good social scores, and that's what we did: customer satisfaction up, Net Promoter Score up, very, very authentic concept, good rates by customers. And now we said, okay, with the head of first 10 hotels, it took us two years.

Now it will take us 1 year to do 100, okay? So you see the scale nature, and that's of course because you don't invest, right?

That's the reason you do something which is contemporary, good modern design with good authentic experiences; also with IT which actually makes it differentiated because you can book rooms. You can - individual homes.

You can actually make your experience more special, more individual, more authentic. And this is also something which is open for other hotels.

So with hoteliers, we say we have the better marketing platforms. You can connect to this, our main footprint is Europe, Caribbean, but increasingly as well now in Southeast Asia because we believe that that would the expected market of the future.

So we started this trend, we will be 800 next summer season. If it subsides and we will enter the future, it will hundreds of hotels.

Now, if not more - so it is fit more purpose to be a big leisure brands which is important to - in that world, we are actually the resort hotel that it is very niche oriented, the small brand and so on and this is something which is more sizeable and more scalable. So then, complemented, these hotel strategy, we have now GDN-OTA and this is actually a twofold thing.

The first thing we are doing, we say, it’s good to have a brand. It’s equally good and complementary if we have distribution power more broadly than just in our core markets.

And that’s what GDN-OTA is providing. More or less, we deploy a digital only platform hosted in the cloud which is state of the art and let’s say, very much - the most modern technology and actually that is generating additional demand particularly in sold-out seasons for our own hotels or contracted hotel and we had said originally, we want to do a million customers with €1 billion of revenues in 2022.

That was actually when we started the project in 2017. And now we are at the run rate of €250,000 per year.

We believe we should be much faster than 2022. So we are thinking now how can we go - be faster, how can we deploy faster.

And the differentiation element of this is that we don't need to necessarily need to earn the money in the GDN-OTA on the platform. But there's - in the additional occupancy - margin occupancy in our hotels and committed hotels.

And that is something that we are very bullish that that can be achieved. We have now the test scale of 250,000 customers per year, so at the end of the day a scale game.

And here we believe we should be putting much more effort into. And then when you look at the next page, when you have the GDN-OTA and you have as well the strong brand of TUI Blue and you have strong native distribution of 21 million customer, you can be very attractive towards the year right, because OTAs actually seek distribution.

And then - when you then - on top of, let’s say, you IT fits to market individual homes instead of categories. And then you have comprehensive - the suite of services and brands and distribution platforms, which we call the Amadeus for hoteliers because the Amadeus and the other industry helps the - aircraft with 189 seats to market each and every seat to a different price according to seasons and so on and so on.

And we said through the most year, we hedge to market each and every home instead of in categories individually. And therefore yield efficiency is extremely better it has been before.

And you started that was our Blue Hotel we saw for example select your own feature €10 to €15 per room per night, high of revenues that's equal to higher margin. We see right now that people - that hoteliers are starting to build their catch release dynamically if you have a what's held as the V-shape and they have morning sun sea view or evening sun sea view.

And of course, it's a different pass. Some of the hoteliers have taken our technology and make it maybe for coverage from the restaurants.

I mean, if you have - if you can address each and every room then you can build dynamically your inventory according to your needs. And the promise we make - the big promise we make to the hoteliers, we tell them booking has taken a big differentiation from you.

Booking once is the best if all rooms are the same - sea view and that's it. We empower you.

We give you the control back. We give hoteliers control and differentiation back and that is the big promise and we see this Blue that’s extremely attractive to hoteliers because they know that hotel is better and they know what kind of categories they would like to have.

And as I said, if you make the prices and do the process according to custom demand and differentiation, your used efficiency is extremely better than if you don't do this. Much to talk about upselling opportunities and these things, which actually the platform, of course, will also do because it's connected to OCM systems.

So, reach, brand reach, as well as technology are the cornerstones of our differentiation, strategy and goal strategy in GDN-OTA in the Amadeus for hoteliers, and we believe its for doing this. Last, not least, destination experiences, we want to be the world’s consolidator number one for experiences, and we always talked about €150 billion market size and 7% growth, and 350,000 providers and non-digital distribution models.

And we have actually said here we want to be the first one with 1 million things to do. I mean, we have 150,000 left to consolidate this market, and let’s invest into consolidation of that market.

It’s third biggest domestic market, one of the strongest point, touristic market, virtually no competition. So we want to be the consolidator of things to do.

We are also easy to distribute with white label. You’ll see that the seats have - we could also think about.

We are active on Google. The go-to-market can be whatever it is, but we want to be the richest content in the world and consolidate on that front.

Overall, I think the important point is we have said, in our digital platform businesses, we want to - in the next year, we will invest something of mid- to high-double-digit million. And so it's significantly more than what we have done in the past.

So therefore we believe we put our money where our mouth is. And at the end of a day, I think that that’s important, and I think if in the foreseeable future we could serve 21 million customers, serve 30 million customers as part of our ecosystem connecting at either on the hotel or on the experiences or on the GDN-OTA, that will be a good next targets.

So, we are a growth company from 25 million customers to 30 million customers and that you know what actually Birgit also alluded to when we talk about or when she talk about the dividend policy. With that, I would like to turn over to Birgit again for the financial guidance.

Thank you. So we're on Slide 31 now.

And let me take you through the building blocks for fiscal year 2020 and the gross expectations even beyond 2020 and on this slide you can see the timings of the expected benefits. So in Market & Airlines what we are executing upon either historically committed aircraft, fleet, renewal programs which comes with asset financing and also following the products of one of our competitors.

We increased land capacity for winter 2019 and 2020 and also some of 2020 as you will know and expected such increases could generate approximately €1 billion to €1.3 billion of revenues and assuming an average through the cycle margin of around 2% to 3%. This would deliver a nice building blocks of growth next year.

And then whilst we expect growth from incremental capacity increase is then we will seek all opportunity possible that is value accretive. We - at the same time anticipated market headwinds like Brexit and we'll know more tomorrow and airline overcapacities and the general macro environments to persist still in 2020.

And we also counted within max scenario now until the end of April which is about €130 million in our numbers but we also - We also - and I will touch on that on the next slide and give you some clarity, what if it doesn't come back in our fiscal year 2020. So then, also the market underwent transformation program and Pete talked a lot about that already.

So, this program will lead to selective expenditures for implementation. But overall, IT investments are expected to remain stable for that part.

And then, moving to hotels and resorts and cruises. So first, for hotels, the annualization of new openings will deliver underlying EBIT growth in fiscal year 2020 and give you another building block of growth for fiscal year 2020.

So, next year, we envisage around 10 new hotel openings in either ownership or management. And we continue to build our assets liabs to the Blue brand around 100 hotels and then it’s what Fritz talked about.

We will maintain discipline with respect to capital expenditures and might consider further growth opportunity for our Riu consolidated entity and it’s also what Fritz talked about just now because they have a track record of generating high margins, cash flows and return on investment. And then on cruises.

2020, we will reflect an annualization benefits from four new ships launched in 2019 across our brand. And we will execute our fleet plan with five more shifts from financial year 2020 to 2026 with growth mainly financed through our successful joint venture model with Royal Caribbean.

So here, if you look at the middle part of this successful - our successful transformation demonstrates that it remains a really good area to invest. And then, we go to number three and four.

So GDN-OTA and the DX platform, Fritz already talked about it. And here, you see the benefits coming in 2023, 2024.

As the acceleration of growth in our platform businesses require investments during a number of years to drive more customers who are increasingly vertically integrated platform. So for financial year 2020 and Fritz talked about that, we expect these to be mid- to high-double-digit OpEx investments and we will further screen the market for smaller accretive M&A opportunities.

So then in order to achieve this last or these two initiatives, growth initiatives for us, as I just mentioned, additional OpEx investments that are required will be at the expense of EBIT and margin in the short term. And then moving to our guidance on the next page, so we will also guide you because this is still the IFRS 16 and we will guide you through these changes on IFRS 16 in our call tomorrow, which is specifically around the topic.

So revenues are expected to grow by mid- to high-single digits and growth will be driven by our Holiday Experiences businesses as well as our Markets & Airlines segment. And underlying EBIT will be between approximately €950 million and €1.50 billion, including €130 million of cost impact from Boeing MAX until the end of April 2020.

However, and this is in an unlikely alternative scenario because nothing indicates that this will be the case. But as we did in fiscal year 2019, we would like to give you the full picture.

So if the ban on the MAX is not listed for the remainder of financial year 2020, then we assume additional costs of between to €220 million to €270 million. And in either scenario include compensation from Boeing in any form.

And our guidance range equally includes this - what I just talked about, this mid- to high double-digit million investments in our digital platform growth. Then adjustment for the financial year 2020 will be €70 million to €90 million.

This is mainly consisting of restructuring activities and it will include around €100 million of disposal gains for our German specialized business. And then underlying EAT post minorities is expected to be between €540 million and €630 million.

And we have introduced new guidance as it forms the basis for our new dividend policy going forward. And beginning with financial year 2020, we will give our dividend payment on a new policy.

So 30% to 40% of underlying EAT post minorities underpinned by a dividend floor of €0.35. Let me finish with asset financing and net debt.

Asset financing is mainly driven by our historically committed aircraft fleet renewal program, and will be within a range of approximately €750 million to €850 million. Net debt at the end of the financial year is expected to be between €1.8 billion to €2.1 billion, which continues to provide us with more than sufficient headroom to our covenant.

So with that, let me hand over to the operator for Q&A.

Three questions, please. First, just on the MAX guidance, thank you for that clarity.

But I'm just a bit confused it looks like the cost for the first half, €130 million, around €20 million a month, and the cost for the second half, if it's worst case, is about €50 million a month and that looks like a pretty similar figure to the second half of 2019. I appreciate you have more aircraft but of course you shouldn't have the expenses last minute wet leases.

So it’d just be helpful maybe to break down some of the costs in the bigger number so that for the back half of the year, a thought for that please.

Sure I mean - Jamie, it’s exactly as you say. I mean when you look at all our program which we have right now, it is significantly - the fleet is significantly bigger than the fleet which we had in summer 2019.

And we have also significantly more customers because what we said, we will actually serve the market this - which is actually Thomas Cook - which Thomas Cook actually has left. So therefore there will be a combination of wet leases as well as dry leases.

I mean all dry leases is also not a very good thing because when you do dry we are taking - I’ll give you one - cornerstone. We are taking already dry leases right now on board just - I think we have done nine until now.

Where we extended contact yeah we are doing that when it’s economically the right thing to do. But of course, right now you’ll see already that the dry lease market is also increasing.

And also, when you have dry lease you usually do commitments between four and six years. So, we need to be very, in that case, in this unlikely case as we say, we need to be tactical and that - we say there will be a mix of client wet leases, a little bit less wet leases but there will be a mix of - client wet leases and this is something which we have planned bottom up and where we make a week by week by week we make decisions.

So, it’s nothing which actually will happen as a surprise like last time. So, it will be more efficient.

And second question just on the guidance, if you look at the fall of the MAX costs, €1,080 million to €1,180 million, is down up to 10% year-on-year. It sounds like hotel profits will be up.

I'm just trying to understand where the sort of gap is. Is all of that the additional digital OpEx in markets and airlines or could we also assume the cruise EBITDAR will also be lower year-on-year?

No. I mean, when you look at - I mean, Jamie, let's take the midpoint yeah, just for calculation purposes.

If you take the midpoint of €1 billion, then you add the €130 million, then you add, let's say, €80 million or whatever you have €210 million or €220 million or whatever. So then it would be €1.2 billion or something, yeah.

If you add it back now the MAX cost of this year, you could give the FX, the hard costs or the soft costs or whatever you would be.

Hundred and hundred.

Hundred and hundred - you still have an increase but it's very clear, we are now shifting gears in terms of digitalization and actually - the volume is an important part of the equation.

Yes I can add to that. So if you start from the 893 million so indeed you add then the non-event of MAX cost and there, there is a range of course depending on whether you take the real cost or including commercial impacts.

And so let's say between 90 million and 160 million and then you add the growth of holiday experience to that includes Hotels and Cruise. And then you also have the impact of one of the - major competitors collapsed that we’d take additional capacity as that as well.

And then you deduct from that the investments in digital. Then you get to the higher end of our guidance but as we have seen and you're probably are looking at the first results of bookings et cetera.

It’s very early in the year to really commit to a very high number and we saw that also in 2000 I mean, last year. So, it's a - set of businesses is made also in summertime.

So that's why I think we will be able to provide also more clarity around February or during the Q1 results. But - I think so that was valid like looking at the upper - I mean in the upper end of the guidance.

Just to clarify on that, if I may. Are you saying that cruise profits will be up this year and that €80 million, whatever the number is mid- to high - double-digit investment, does that reverse in 2021?

So that - there will be continuous investments in our platform that is logical. That’s also what we said on this previous slide.

So you will see the benefits from our platform business, GDN-OTA, and also Destination Experiences, as of 23, 24. So you’ll really need to expect that in the first years it is - we are building scale.

There is so much opportunity, but you need to build scale, and that requires investment. So you will see that - enough to cruise.

Yes, we do see further growth, but the growth is decelerating as there is more capacity added, of course, and because we are making investments in environmental friendly let’s say, adjustment. So that is what you see there, and in hotels also, we still see growth.

Of course these are important building blocks for us, and they generate very decent and predictable cash, as you can see also from our numbers in 2019.

And the third question which is a quick one on leverage. You talked about the working capital, and obviously we've seen that the low deposits and the prepayments.

Does that mean this quarter will be more like last year's €2 billion sort of swing from September to December, or more like the prior year which is €1.5 billion, or perhaps even bigger than €2 billion, if you can give a flavor - for the bit of spike in December? Thank you.

I mean, for the growing business, so you should see…

Yes.

Higher swing.

Yes.

So if you have a 10% or let’s say, mid- to high-single- digit.

Yes, it will be, yes.

The growth, the swing needs to be there otherwise, it would be surprising because we are adding Thomas Cook business the cyclical business.

Yes.

So just three quick questions, please. The first one is just following up on OpEx investments, mid to high double-digits.

I guess, is €50 million to €90 million. You seem to be indicating that the high end of that 80 million and also I wanted to ask in terms of divisions.

Does that mean that destination's experience division will effectively turn to an EBIT loss, or will these OpEx and digital be the across divisions. And then, on the strategy building blocks for full year 2020 it's fairly clear especially the market share wins, the hotel, et cetera.

But if I go back to more medium term building blocks one year ago same results presentation you highlighted, for example, that there could be €100 million of cost savings from moving to higher mobile mix. And then that could be another hundred million of savings in inventory and purchasing.

I don't think I see these areas explored further in today's presentation, so I appreciate the short-term focus was to win share. Are those still areas on the horizon or have you become less optimistic on benefits of mobile, benefits of purchasing.

And lastly, just on the CapEx guidance. So €750 million to €900 million if I take your revenue guidance it looks like 3.6% to 4.5%.

You were previously saying it will normalize all the way down to 3.5%. So what's happening here is this that full year 2020 is seeing tail of ongoing investments.

Is it still coming down to 3.5%, or is the new norm closer to 4%, 4.5%?

Okay on the - when we talk about digital, the digital acceleration investments, these are focused on our digital platform businesses. So there are additional investments and additional normal course of business to transform our markets and do these things, I mean, get to one platform market domain transformation that's not what we mean.

What we really mean is the reach and experiences in GDN-OTA. And here, the thing is a little bit difficult to say because here we can make decisions day-by-day, and we will make decisions day-by-day.

And we say - the question is, how much margin do we allow, when do we - when is our conversion rate good enough and so on. And we have built a very sophisticated engine in order to make these tradeoff decisions very fast.

Now that said, we have actually, this, whatever it is, 60 to 90 or whatever, we have 50 to 90. This year, we have actually done also something, but it was more in the order of magnitude 10 to 20.

So, let's say - so, therefore, we make these decisions and we accelerate. I think also it's clear, my experience in the digital business, you should not overpace because then you start to become inefficient.

But that said, the main obstacle here is - when you say what in the platforms is actually costing? The reach in GDN-OTA, so that is actually reach and conversion.

So, this is more customer oriented. And so to get to a million earlier per year then actually we expected, and the experience is more around consolidation on the content front, so upstream, right?

So, it's not reach, which is the main content proposition here, so that's more of the million things to do. So, we said, the block end we have right now put to the business is debt.

But, of course, we will be careful in terms of profitability versus growth. We are much like people who actually put shareholder's money into just reach.

So, and where it's at, you know, the excess is - midterm will be 5% to 6% margin business. And I think that's something which is pretty important as well.

On the commercial cost in markets, there's a lot of moving parts. I think when you look at our - we have - we are increasing the asset distribution.

We are increasing still the online distribution. At the same time, you see as you have seen with other companies in the OTA space lately that the DPC costs, so the purchase, the digital purchase costs are as well increasing.

And we - sometimes it's even balancing that retail is like having attractive gain and so on. And therefore, what we always said, our mid-term planning is something like 2% to 3% margin business.

And again, if margins would be higher, we would be also thinking about; Are we good on reach? Because here it's very important that we put the cost down, but at the same time, it's a scale business.

We need to be number one in the respective markets, that we have a clear experience in. If you are losing out, then it's - you can be in a difficult position pretty fast.

That's also the reason why we are so front foot, for example, in the consolidation game right now in the U.K. And we have said that particularly in the summer, but also now in the winter, but particularly in the summer, we had enough capacity and enough slots in order to get a fair market share of the Thomas Cook business so that we are not losing out as other competitors.

That of course takes into account that we need to be cost competitive. If we are not cost competitive, then we can be outpriced.

But we will take care of that. And the third question I think, and there it is maybe.

So just before we move to CapEx with that, the second part of the question on the building block; So, €100 million of mobile benefits, it doesn't sound like you're formally sticking to that. There was a second bucket which was a €100 million of inventory and purchasing cost benefits, is that still…?

I think it will happen. I mean, it's not that it will not happen.

I mean, quite to the contrary. Those will happen.

I mean, the question is how fast do we get mobile up, our mobile distribution, and we talked about the scenario there. And of course, the same thing that repurchasing benefit, we said, if there was €100 million of purchasing benefit of a 5 billion points.

I mean, we have not introduced our purchasing - the first modules of purchasing. And I think what we will be seeing is at least what I think for the next summer, I see good development of purchasing prices.

I don't know, do we talk about publicly about purchasing prices development? Maybe not, I don't know, but --

We don't guide margins.

We don't guide margin. But I think there is still maybe and that is the uncertainty which we really talked about.

If - that's it, let's put it the following way. If the pound would stay at £0.84 or £0.85 to the euro, we would - the margins we would generate would be significantly better than last year.

And but of course you don't know. That's the reason why I say.

Because, I mean, the price increases are about what actually the benefits of the currency that are bigger than the price increases in destination. And therefore it's tricky to say, nobody knows where the pound will stay and nobody when they're purchasing.

If it stays at £0.84 we might be at pretty much at the upper end of what we believe. But who knows?

I mean, it will be interesting seeing the election tomorrow and where the pound will be in two weeks. You had one question about -

On the CapEx. So, yes, in the past there was like 3.5% of revenue kind of range.

I think also back in - but when we discuss them and also over the calls we always said normalized investment level would be currently around 800, 850 refit. So, that would be in line with what we have here.

And, well, it's reflected –what Fritz also said earlier, if there are interesting real opportunities which we will then actually also detail, they are very stable cash flow, reliable. These assets are very well executed.

Then of course it makes sense to move within that range, but that will obviously bring immediate upside in the year thereafter. So, that is to be considered, that's why we keep this range a bit twice.

The first and most urgent question is on your guidance. You are guiding us a doubling of your net debt, but nevertheless you want to maintain your gross leverage target of 3.

What am I missing here? Is it - yes, what am I missing here?

Why is it doubling?

It's because in the - it's a gross leverage ratio. So, you're - so then you need to include gross set which also includes operating leases as it's a different building block.

We can actually send you the definition because it doesn't relate one on one with a net debt increase. It's all pre-IFRS 16 also.

So, if we will do - if we will move in - well, we will also report IFRS 16 already in 2020, but we do not have a comparison with 2019 as we do not restate the numbers. That's why we have both versions and also our guidance is pre-IFRS 16.

But once we move into 2021, you will be able to correlate with the better. But now it is because of distinctions.

And as we grow into finance leases with the aircraft re-fleeting, re-shift actually, operating leases into finance leases, and that's why you see this increase in - actually in net debt. But post-IFRS 16, that will not be the case anymore.

So just to clarify, on Page 14, you show us the gross financial liabilities, discounted value of operating leases, pension obligations. And basically, what you are saying now is that some of these discounted value of operating leases will move into gross financial liabilities and therefore net debt will grow?

Yes on the - but we will do - you know what to know we will do a call on - actually IFRS 16 and there you will very clearly see that and we will explain that how it works because.

But you write on Page 32, in a very big box, all numbers are pre-IFRS 16 applications. So there is no such.

Yes.

Guidance as pre-IFRS 16?

Correct, correct and that's why you see that effective when you then move from an operating lease into a financial lease, you only see the increase in the net debt instead of seeing the total picture which actually the finance leases are more attractive than the operating lease.

Understand okay. And did I understand correctly that you are overly confident that the MAX grounding will only last until end of April or what makes you confident and when will you have more clarity?

I mean - exactly clear when you look at the mean expectations of all the customers of Boeing, I would say this - end of the April we are at the end of the scale. And therefore I think it seems to be that market sentiment is in that direction.

Now that said, it's not in our control. And therefore we have added that - we have added a scenario which potentially could apply if it cost less.

But if it is later than April then also the additional optionalities come to mind then it’s more than a year - that starts to become more than a year. Then we also have more commercial opportunities to think about alternatives, because if the delay is more than a year, then the contract foresees commercial opportunities.

And let's have a look I think April is pretty realistic now. And that's the reason why that’s main part of the guidance.

Yes, that's what we did as well as you can see from the guidance, we actually also provided the scenario should it be until the end of our fiscal year then you know at least what the year - what the boundaries are and range.

Okay. And did you already thought about refinancing of your outstanding high yield bond?

Yes we are constantly evaluating refinancing. It has to be the right moment and as you know we have a very low cost of debt so it needs to be interesting, but yes indeed that is ongoing.

Just a couple of questions actually from my side. To come back on the net debt guidance that you gave us, I was just wondering, Birgit, and also in the presentation you referred to the first half of 2020 in terms of higher net working capital.

But I was just wondering what kind of building block in that should, we assume from change in our net working capital. The second question is a bit related to the destination portfolio that it have and the booking trends that you see.

So, obviously, Turkey has been pretty strong, Canary Eastern Spain obviously somewhat weaker. Is there any structural element in the market why we should think of some kind of rebalancing between Western and Eastern Mediterranean or should it stay basically as it is more or less.

And having said this, obviously, 2019 have quite some rather late booking pattern. Is that also what you are baking into your guidance for 2020.

And lastly, again on MAX 8, I was just wondering given that let's say, the worst case would you all would not hope comes into place, is there - can you be sure there is enough leasing capacity out there in the market?

Yes.

Thank you.

Maybe on the leasing capacity first I mean, each and every end of lease we have right now NGs, yeah, that we check if we can - to attractive conditions we can prolong the lease. And as I said, beyond or close to 10 or 9, 9 lease which we have called off.

And the costs are attractive. I mean, today is not an issue.

So, and the reason for that is that - it comes - the drawback, and the drawback is as you need to lease at four to six years right. So the decisions we are making, not decisions for a season.

And - we have an advantage because we are - we know the rest and so they know us and therefore - usually it’s something we do and particularly not for winter season we are doing that. So - but we have also turned down, if things for example come to €350,000 per month lease rates then you know we say okay you better do something else.

So our conditions are attractive and we believe it will not be to hijack. So the aircraft will be available but the question is between wet lease and dry lease will be more - will do technical short-term capacity or do you think you want to have an aircraft for the next four to six years.

So that is the trade-off - it would not be available. On the destination mix, it's a little bit tough to say.

I think maybe the most recent trend was that Egypt is very strong particularly because summer stake has opened again from the UK. So that has been strong.

And I think in our portfolio Turkey will be strong and reasonably strong because Thomas Cook wasn’t strong in these countries, right. So we actually collected more or less hotels - we didn’t have a home.

We were in destination very fast. They contracted a lot of hotels.

So we will have an increase in patterns and in these countries. I don’t know if that helps and maybe the last point on the late booking patterns.

Late booking usually happens when you have an oversupply, and in Germany there might be late bookings, and in UK there might not be late bookings because in UK you have very restricted supply right now. And by the way, also in Belgium you have a restricted supply and Nordics because of the restricted slot availability in the airport.

So I would assume that in these two countries, in UK and Benelux regions, you will see better margins because of better booking patterns. In Germany, you might see - particularly in the summer.

In winter, we see the margins are okay. In summer, you might see that still there is oversupply, and the same is true for Nordics.

So it's a little bit of a mixed bag, it’s a little bit of mixed bag that's one of the things which actually also is a good thing. We will have different and development also in Germany coming from carbon tax, but also the question of - this kind of, how do you say two operators, insurance and the mitigation.

I mean, at the end of the day it's a little bit mixed bag. The important point here is we say 2% to 3% should be a good margin in the two operator business, and we want to be high-single-digit, let’s say, growth in terms of revenues of customers.

So I think that’s what our position is. How exactly is it depending on it’s a little difficult to say, but that’s what we are striving to achieve.

Birgit, do you?

Okay yes, I’m going to answer the question on the net debt. So, in the first quarter, expected free cash flow as a dividend will be again - I mean you would need to think of last year.

It’s roughly in that same area. So let’s say minus - between minus €1.5 billion and €2 billion.

And to that, you need to add of course the finance leases which I also discussed, let’s say - well, I cannot - probably can I see the numbers, no. Oh, I think sorry, sorry I just wanted to but I can’t.

So - but then, you need to add your finance leases to it and of course you have the starting net debt provision that - so that’s just give you an indication now where we will land.

And on the changes the in net working capital for the full year is there also a range that you could provide for us what you have baked into your guidance for the full year?

So, yes we don’t actually guide on working capital. You will need to understand, it’s a component which is highly fluctuating in our business.

But we target to improve it, let’s say, even versus 2019. And as you know, we have a lot of cash flow initiatives.

We constantly work on it, but we are not committing to a number here, but it will hopefully be positive.

The reason why I’m asking was basically since it looks like that the conversion, cash flow wise, of your profits in 2020 is pretty low or close to zero after the dividend. And now, I was assuming that there's obviously some negative net working capital development baked into 2020.

But we can also follow up on that, maybe later on.

Yes. Let's follow up on that because, no, it's not the case.

We don't forecast negative working capital development.

Three questions, if I may. The first one actually on free cash flow, looking at the free cash flow bridge into 2020.

Probably I'm missing something, but could I ask for your help? So, in 2019, your free cash flow before dividend was a negative of around €100 million.

In 2020, your net investments should be €300 million lower than in 2019. Your profits are going to grow by somewhere between €50 million to €100 million.

And earlier, you also mentioned, your working capital should see an improvement. Now, despite this, if I read correctly the Slide 32 with your FY 2020 guidance, you seem to imply that post the dividend, you should see a cash burn of around €250 million.

So, if I assume the dividend is €200 million, that pretty tells me that you expect a flattish free cash flow in 2020. And I'm just - I cannot reconcile this to the math, I just mentioned before.

So that would be my first one if I may. The second question - actually first to the advanced payments received.

I think you had at least in 2018 somewhere around €2.5 billion of advanced payments received. And post the bankruptcy of Thomas Cook, you've seen authorities having to pick up the bill and reimburse clients in the U.K.

and in Germany. We had a few weeks ago some of the OTAs that are claiming that they are disadvantaged because they keep their advanced payments received in a trust in contrast with the tour operators.

Do you believe that these events will represent the catalyst for the regulators to enforce higher cash ring fencing or higher requirements of collaterals on your advanced payments received? And the last one or maybe to end on a positive note; I believe in the past around 17% of your tour operator customers were also buying hotel rooms, the hotels that are owned by TUI or [rented] by TUI.

Could you please tell us if you expect a similar hit rate for this incremental tour operator customer, this €1 million to €1.3 million incremental customers; do you expect a similar 17% funneled into your owned hotel rooms and what does that imply for the occupancy and pricing of Riu, Robinson and your other hotels?

Okay, I can start. The cash ring fence is not the moving piece.

I think the more moving piece is actually the change of the insurance policies and enforcement of insurance policies in Germany. Now, because that is something in the U.K., the state took actually responsibility to actually repatriate customers.

In Germany, that is not the case. And in Germany the former regime only paid out something between 10% and 20% of actually potentially after the bill came out only 10% to 20% of actually the damage.

And there's a discussion going on if that should be changed and that might be the case. And by the way we baked something into the German budget as well.

So, that's considered. On the 17%, here I have a very easy calculation.

Let's assume for a moment we do 1 million or 1.5 million or whatever additional customers more or less. Not very many of them will go into our own hotels because the strategy when you - the best strategy of these kind of occasions is you acquire contracts with third-party OTAs which form a contract with - formerly had a contract with Thomas Cook, right?

So, that's how you start, And this is the starting position of us. So, we're in Destination the first people.

We have a unique position in Destination because we can provide multi-source market coverage. So, we go to the OTAs and say we’ll just take over the hotel and we just fill it.

But we don't buy it with just a contract. And then over time that builds a relationship and we think about additional more value accretive structures.

But for the time being, we just are - it's a plain vanilla type deal. And that's with some committed hotels, but, of course, with native customer basis.

Because usually when you have hotel with significant customer base, with a loyal customer base, or has already booked the vacation for the next year and so on and so on. So, it will be not our hotels first instance.

But of course, I mean, when we have not built a funnel on the top end over time, we will try to actually migrate these customer, that's clear. So, but that's not the season, and maybe - Birgit?

And so I would like to reply to question on cash flow. So, let's say our EBIT reported is roughly our operating cash flow.

So, if you take that element and then you deduct from that investment, net investments which are €750 million to €900 million. And then from that you deduct the dividends under our old policy because in 2020 we still pay dividend on the 2019 policy.

Then, that probably answers your question if you do this math. But we can follow this up also after the call.

Let's - we already noted it down and we'll follow up with you.

Maybe just one follow up if I may on the working capital. There used to be a rule of thumb saying that whenever your revenues are growing by around 2.5% you are - effectively, you're getting €100 million cash released from working capital.

Is that rule still valid today? Because you do guide for mid to high-single digit revenue growth.

It's not totally wrong. I mean, it's actually - yes.

How could I say that you are - you have a good assumption.

So, that would be €300 million to €400 million of cash inflow from working capital following that rule of thumb, is that correct?

No.

No, no. That's not what we have shown.

But we'll follow-up separately. We'll follow up separately with you.

A couple of things: Firstly, on the €170 million to €190 million of one-off costs; could you just let us know how much of that will be cash in 2020? Secondly, you've mentioned that you - quarter of the customers that you were targeting and you're accelerating the 2022 target.

Could you confirm that you've also delivering more than a quarter of the revenue, the €1 billion revenue target? And the last question, you've spoken a lot about being a growth company.

But if we back out the last three years and we exclude the MAX. It looks to me as if EBIT is broadly the same as it was in 2017 despite a pretty significant reallocation of capital and increased incremental CapEx of so €800 million.

So, it doesn't look as if your growth strategy is now working in terms of driving profitability or incremental returns. So, why would you not just run this business for cash and return the cash to shareholders?

So, [indiscernible].

I will first talk about the adjustments. So, that is - most of it is restructuring and that is over a period, let's say, maximum two years.

So, yes, it's cash and I don't have a split here of what we expect in the first year and in the second. But, yes, it’s cash.

Okay. Second point is, I mean, when you look at five-year horizons, okay?

And not seasonal distortion of all of these things. When you look at the five-year horizon, I mean, we have significantly improved EBIT.

I mean, now, the last year was actually a dip and this year, as we say, in some of the markets, the consolidation has not happened we have much - of course 130 million. But - therefore I think it's not very - it’s a two-year comparison or one-year comparison is - most of the time not very meaningful.

The second point is we have been - our strategy was and is - and fortunately was to be content sensitive vertically integrated. Otherwise, we would have been the huge problems - and our market is of course, also not very easy.

I mean, that's also clear. 70% are now - more than 70% are now from cruises and hotels and that is part of the first transformation.

And obviously we do a second transformation because it’s nice to have this profitability in hotels and cruises, but at the same time, it’s also expensive to have it and that’s the reason why the investment profile is very heavy, investment profile. So now we say, we want to grow based on our captive audience of 21 million digital businesses and that are the two basic digital businesses which we have talked about.

And here, we will divert more - and put more fund this will be more asset like, we will divert more and more funds into the digital goals. And in my view, it’s absolutely the right thing to do and when you look in five years, you will see that actually the transformation from being a product centric, vertically integrated business to additional platform business will have happened I’m absolutely certain.

And just in the last question, can you confirm that you’re a quarter of the way to the €1 billion revenue target, if you’ve got a quarter of the customers?

No, because in GDN-OTA you mean?

Yes.

No, we cannot confirm that and the reason for that is that contrary to our €1 million target which we had been talking about, yes. The platform itself is more efficient in hotel only, and therefore, the revenue per customers will be a little bit lower.

But that said, that’s the reason why we also said conversion on the other hand is much better. So the commercial - attraction is better, but because the conversion is higher, the revenue is a little bit lower.

Yes it’s true, but the commercial is higher and therefore, economically we believe it should be pulling in the million faster and should grow faster. So it's more efficient but it is a little bit less revenue per customer.

Thank you very much. Have a great day and see you soon.