TUI AG

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00:23 So good morning, everybody. It will be a busy day today, Annual General Meeting Q1 results.

So I'm always a little bit confused of what presentation I should focus to, but with the help of all the team and also Sebastian is with me. So if the CFO is close to you then nothing can go wrong.

00:47 So, let's go to Page number 4 and we will do the presentation as usual and do some introductory remarks, and the closing and the important pieces come from Sebastian. But the first slide shows clearly, we operated in Q1, 67% of capacity, we said 60% to 80%.

So that is spot on. Actually, we also continued commercially, I would say, on the very strong quarter four result of last year, 2.3 million customers.

And that is 4 times, what we had before when you look at the revenue of 5 times what was the year before. So very strong commercials and strong commercial pick up.

01:44 79% load factor actually says it is strong, but it is not where it should be in terms of a normal year, normal year would have been 85%, maybe even 90%. But it is actually regaining and that is reflected the EBITDA almost break-even, EBIT and also EBT EUR400 million roundabout better than Q1, in the crisis Hotels & Resorts stayed positive.

I think that is very strong. And a strong liquidity position at EUR3.3 billion.

Therefore, we will be very comfortable handing back the first tranche of government funding 1st of April. So, I think this is all good news, but I mean this is of course all history.

I will come to the future to the trading in a minute. 02:50 Maybe I'm turning the pages through the different sections of our business.

Hotels & Resorts actually is now EUR8.6 million bednights, a year ago it was EUR5.2 million. A normal year would be EUR9.1 million.

So we are close to the normal operations. And I think that has been also the theme in Q4 of Hotels & Resorts even if not fed by the local markets, but our source markets, local business very strong Caribbean, for example, Americas.

So Hotels & Resorts positive and you will see that also when Sebastian talks about financials. 03:35 Markets and Cruises, I would say a little bit more difficult situation, particularly when you look at Q2 right now, you see a little bit to lower sailing on the six ships are now sailing.

But the summer bookings are strong, the summer prices are strong, so we remain very positive on summer. But market airlines maybe more important and more significant right now, 2.3 million customers, in normal years we would see 3.6 million.

So it's a little bit lower or it's lower than Hotels & Resorts. Hotels & Resorts almost normal, the markets need to still catch up.

04:24 Maybe one last remark on that page is TUI Musement. TUI Musement 10 times the volume of the year before end, higher 250,000 excursions, higher than pre-crisis.

So TUI Musement strongest growth, I mean even in difficult times when customers from source markets are only two-third is over-achieving already the numbers of excursion sold. And that is a strong growth story always talked about particularly when we talk about strategy and growth segments for the future.

Very attractive segments and we are certain that this is actually the right cost to bet on. 05:06 Now when you go to the next slide.

And now we talk about future. And this is maybe even more interesting.

You will see the weekly booking profile for winter on the left side. And to see the Omicron rally, right so in December the net bookings actually went down.

And the interesting thing now is that the net bookings of last week has been 94%. And when you look at the accumulated bookings for winter, this is actually in the table on the right, you'll see the minus 42.

So this is 58%. 05:46 So, week over week over week, we add right now more and more and more customers and you see the enormous dynamic development week over week.

And just to give you an idea, the volumes are not small, last week was actually 126,000 bookings for winter, so it is strong. And what's also strong is 15% average sales price.

So the margins will be good. So, therefore, as we have also clicked the capacity, also the load factors will be okay.

So margin prices good, load factors good, catching up demand that is the theme for winter. 06:29 Now summer is more important because some of the volumes are much bigger.

So when you see the steady state summer is actually minus 28, that is the base we are starting now. So 72% base.

So we are lagging behind 28% pre-crisis, but 22% higher prices. I have never seen in all fairness any, I have never seen any market situation where we had 22% higher prices.

You'll remember the early ‘20. Early ‘20, we said 14% higher volumes, 3% higher crisis and we felt good.

So, 22% higher prices is a lot. And when we turn the pages right now, you see that actually also the bookings are now tremendously catching up.

And we are now last week 100%, so, spot on pre-crisis level when it comes to booking. 07:32 Now you could argue, of course, this is lower booking and so on and so on, but also absolute terms, and I just want to mention it because it is also absolute terms high numbers because we are talking last peak 275,000 customers, 100%.

So I mean, that says, you know, we are catching on this 72%, we are building now enormous momentum. And you can imagine that also the 100% might not be the end of the ceiling of development because you will see the steep increase.

08:12 And as I said on the basis, now on the base, 22% higher prices, 100% last week, as I would assume that we see a strong cash up. And the demand is high.

The spending, household savings are high. And is driven by all markets just to give you an idea, strongest market now was Netherlands plus 70% up on pre-crisis.

UK up 20% on pre-crisis, Germany is 20% down on pre-crisis, but packages are up 20% on pre-crisis. So overall, it's a little bit slower because of Austria and Switzerland and all the effects.

But -- so packages, which are the higher margin business is up 20%. 08:59 And even Belgium is up 20% and even Nordics is catching up, it's still below 100, but you know the mix is now moving up.

And particularly, I have to say, now the last weeks have been an enormous rally of bookings and we assume that it will go on. 09:22 Now let's talk about the sectors a little bit and sentiment, I mean, potentials slot (ph) I talked about, Sebastian will -- I will just leave it there.

Even in the difficult Q1 was profitable, I think that's not something to discuss about. Cruises, we said, we have been cruising, sailing with 14 ships.

Now we are sailing with 6 ships because of the port restrictions and Omicron on the ships and so on and so on. But when you look at the last bullet here you know the bookings for summer are strong, prices are good.

And therefore as restrictions ease, that there will be -- it's not a matter of demand. 10:08 And TUI Musement is -- I will talk about this distribution our own captive channels, so our app in a minute.

But you know the secret of being 10 times the volume year-ago being 1.5 times the volume of pre-crisis is actually also third-party. You know that we talked about booking, you know, we talked about Trivago and all the other partners and that is coming to life right now.

And as I said, it's the strongest fourth pocket in our company. 10:38 Okay.

Let's talk a little bit and I know that you sometimes like it and I like it as well. You know about the business itself and you see our app almost on 70% of our customers use our app.

And you'll see that we have of course pursuers and so on. I think the things which are also you know the excursions, which are marketed, dynamic bookflow messaging, cross-channel deeplinking.

So you on the website, the app will remember that you have looked on the website and so on. So all good stuff.

The dynamic bookflow means that each customer individually gets excursions, and you saw the uptake. By the way it is on a comparable basis 7 times the uptake to pre-crisis levels.

So this is very strong. 11:35 And right now it's still ancillary selling.

Soon we'll becoming a competition only future market. So stuff which is not packages, but which is alternate to our packages in different market.

But what it's also doing and this is the open nature of our new IT architecture, it has strong API interfaces. For example, we have actually now connected the Mobi software through our app.

And what that really does is not only it gives you the Uber like experience so that you will know exactly when the bus is coming and you see the map and the buses actually are arriving, so Uber-like experience. But also Mobi is also with artificial intelligence intelligent route planning.

So the question of how should the bus drive and what kind of route is actually optimal to save cost to bring customer fast to the hotels. So Mobi, a very strong technology company, which just connect via APIs, it's possible in the modern like, I just wanted to give you a little bit of a highlight here.

12:42 Okay. So then actually something which we are also proud of is actually our sustainability agenda.

Historically, we always have been focusing on the airlines and being atmosphere ranking and what -- and you name it and the youngest fleet and low consumption, also the 80% pre-crisis hotel certification. All the verticals are very important, but when you want to fulfil the UN Sustainability Targets, and the European Green Agenda 2030-2050, also the region needs to be sustainable.

13:23 And I have personally together with the Prime Minister, [indiscernible] launched roads as the cool (ph) app for sustainable tourism. And what that really means is you know, an open platform for all tourism.

And we want to get this destination, sustainable destination. And it's a public-private partnership and it's a role model for our global destination development.

It's all fact-based. 13:56 I mean it's important that you have 2030-2050 targets.

We believe it's even more important to achieve over a short-term in order to be able to hit the targets. And roads, when I opened it, I didn't know, but you know, just for you to digest, 97% is actually of the GDP is actually tourism.

So if we don't get it right in roads, then we have a big problem because it's the only thing which happens in roads. And therefore it's not only tourism minister, and so it's also the Prime Minister being focused, and I think this is very important.

14:32 Why did they pick TUI? Well because we have a long-lasting relationship because we invest in the destination, because we bring customers.

So, it's a lot of discretionable investment in customer spending. And that's of course very important when 97% of your GDP is actually tourism.

So, the tourism agenda is actually and the sustainability agenda is developing, that's what I wanted to highlight here. 14:57 Now, next one, which I think is also very important.

We always talked about vertical integration. And that we are focused on building own differentiated content.

And you know that we have TUI Blue and Robinson and Magic Life, and you see the brands and we are proud about them. And we are very confident that we are doing the right things, when you look at our profitability of these brands and how the development holding, we think we do the right things.

15:30 Now the issue a little bit with the strategy of differentiated content is that you have a challenge to go fast, because when you invest a lot, and you do it all in your balance sheet, you cannot grow fast. And to unleash that strategic dilemma, I know that we talked about it, but it's for us very high on the agenda.

We need to grow off balance sheet, and in cruises we do that with joint ventures. In the hotels, we do it with joint ventures, but even more important we launch right now the first independent, it's an independent hotel [indiscernible].

But we are doing the advisory services to them, we are actually running on GOP on revenue. 16:14 It is a very new model, but it is a model which is potentially growing very fast.

The first fund is launched, 40% of equity is in the fund right now. And since we have the funds, we get a lot of new opportunity as well.

The opportunities come because people know right now that there is growth money. And therefore we are convinced it's the right way to go.

We have the full control, but we don't have the investment on the balance sheet. We think it's absolutely spot on in order to achieve differentiation as well as have not all the investment on the balance sheet.

16:56 So that's actually this. And then I think, I'm done with my first section.

And now comes the important numbers, that actually show you very clearly how we performed. And that actually will do -- and Sebastian will guide you through the numbers.

17:17 Thank you very much, Fritz. And a very warm welcome to everyone who has joined on the webcast today.

Let me guide you through the quarter one results of the financial year '22 on the following pages. 17:30 So starting with the income statement, we delivered Group revenue of EUR2.4 billion in the first quarter, which is up EUR1.9 billion on the prior year, reflecting the more open travel environment, enabled by the successful roll-out of vaccination during calendar year ‘21.

As Fritz mentioned, we operated 67% of our ‘18, ‘19 winter capacity in Q1, which was in line with our expectations. 17:56 October delivered around half of this capacity, benefiting from good summer momentum, which unfortunately eased of in November and December due to Omicron-related concerns.

But we certainly now see this momentum returning in our bookings in the most recent weeks and we can see this every day. Q1 underlying EBITDA was almost break-even at EUR65 million loss, a significant improvement of EUR392 million versus prior year.

18:27 Q1 underlying EBIT loss reduced to EUR274 million, improving by similar quantum to EBITDA with Hotels & Resorts delivering a second quarterly positive underlying EBIT since the start of the pandemic. Adjustments this quarter, not too much to flag here, we have a EUR21 million gain included this quarter relating to the sale of Nordotel hotels, which is partly offset by ongoing cost relating to the global realignment program of around EUR10 million.

18:59 Our full year assumptions for adjustments remain an expense of between EUR90 to EUR100 million, of which around EUR70 million were related to the global realignment program. Therefore no change to December.

Q1 net interest expenses increased year-on-year, despite lower cash interest, which you will see on the next page. This is primarily due to a positive one-off accounting effects in the prior year relating to the revaluation of the senior notes.

19:28 Our full year assumptions for net interest range of between EUR380 million to EUR425 million is based on our expectations of a more normalized business this summer. Where we would anticipate lower drawings of our facilities as a result.

Lastly, Group results after minorities was a loss of EUR384 million, a clear improvement of almost EUR400 million on the prior year, which is a solid step in the right direction. 19:57 On my next slide, I want to touch on some segmental highlights, especially given we have seen an excellent performance delivered by Hotels & Resorts.

So, Hotels & Resorts underlying EBIT of EUR61 million is not only an improvement of EUR157 million versus prior year, but is almost in line with full year '19 Q1 results of EUR69 million. 20:21 The segment delivered its second consecutive positive quarterly EBIT, the development, which I'm very pleased about.

And for me a good start of our Hotels & Resorts to our new financial year. Overall average occupancy was 64%, up 21 percent (ph) points year-on-year, and average daily rate increased by 20% to EUR72.

Mexico did really well, delivering occupancy of 85%. Occupancy in the Caribbean was 76% and across the Canaries the average 79%.

This pattern was reflected in the Riu's result in particular with strong performance in their core Caribbean and Spanish markets. 21:05 Moving to Cruise.

You will see here that our Cruise segment delivered a EUR67 million improvement year-on-year across the three brands with TUI Cruises and Hapag-Lloyd delivering EUR67 million of this improvement, which reflects the wider resumption of operations in the first half of the quarter. The quarterly result was held back from late November due to Omicron and increasing incident rates.

This resulted in a number of amended bookings delaying to a later departure date and the early curtailment of three of our ships, which of course then impacted the results you see here. As already reflected by Fritz, it's likely that cruise will see a more challenging environment in Q2.

Although since a couple of day, we have now within TUI Cruises 10 out of 12 ships in operations. 21:58 Onto TUI Musement, here we sold 1.1 million excursions in the quarter, an increase of 1 million versus prior year.

Generating a EUR20 million improvement in underline EBIT. Very simply, this illustrates the return of [indiscernible] in our destinations and to the broader range of offerings, and I'm convinced of the future growth in this segment.

What we see here are the first steps in resuming our growth plans. We have invested in the digital acceleration and the integration of Musement, so this leaves us very well-positioned as the summer returns to normalized levels.

22:36 Onto Markets & Airlines division, as already covered, we certainly saw a more open travel environment this quarter with October seeing good momentum for both bookings and departures. The latter end of the quarter, however, saw a level of amendments due to Omicron.

Omicron concerns which saw a number of customers delaying departure to a later period. 22:58 A total of 2.3 million customers departed in the quarter and I'm pleased to share that we have achieved a load factor of 79%, which is only a few percentage points behind full year '19 Q1 of 85%.

Combined across the segment underlying EBIT loss improved by EUR164 million to EUR259 million loss, reflecting the 67% capacity operated over the period, a vast improvement on the previous year, which saw our operations largely suspended due to travel restrictions. The results includes EUR34 million net cost impact from hedging ineffectiveness.

This is a non-cash item as well as savings delivered by our Global Realignment Programme across all markets. 23:49 You can see here the similar pattern and underlying EBIT performance to Q4 with our European markets continuing the theme from September -- from summer '21, which saw a higher level of confidence in departure.

Comparatively higher to Central and Western, Northern region saw a loss of EUR172 million. This primarily reflects the higher operational leverage for the UK business with UK's departure volumes although improving, still limited on overall sentiments around testing requirements and changing restrictions.

24:26 As you all know testing on entry and day two PCR testing was only removed on December 7. Overall this was a mixed result for the segment, but it serves to illustrate more than ever the benefit of our business model where we are diversified in our source markets.

Ultimately, we are not solely reliant on one market to determine our return to profitability. 24:49 So to sum up our underlying EBIT performance, I will briefly run through our usual bridge.

Starting on the left, we have prior year Q1 reported a loss of EUR776 million. All segments delivered improvements year-on-year with only hedging ineffectiveness of EUR34 million as a material one-off cost to flag in the quarter.

25:13 Q1 capacity and its result was broadly in line with expectations, resulting in Q1 EBIT loss of EUR274 million. For the second quarter, where we experienced some headwind on bookings from the Omicron discussions, we may see Cruise and our Market & Airline business likely to deliver a weaker quarter.

However, we see some good trends since the new year, which gives reason to -- for early optimism as we head into summer and the positive trend is accelerating day by day. 25:47 Moving over to our cash flow slide for Q1.

As you can see on our slide, overall Q1 cash flow was driven by lower seasonal working capital outflow, compared to '19. And the proceeds from the capital increase in November.

Now looking into the details, starting from the reported EBITDA of minus 55, we saw as expected a Q1 working capital outflow of EUR937 million, which was significantly less than usual due to lower summer '21 business volume. 26:21 The outflow was driven by the normal seasonal supplier payments and seasonal decrease in customer deposits.

And just as a reminder to everyone, the level of working capital outflow we have recorded in a more normalized environment for Q1, '20 and full year '19 amounted to roughly EUR1.4 billion. The outflow of cash interest improved to EUR93 million due to savings from lower RCF drawings and further year-on-year savings in context of interest and fees from the repaid senior notes.

This was partly offset by coupon payments for the convertible bonds issued in April-June last year. All of which led to a total operating cash flow of minus EUR1.1 billion.

The low cash out for CapEx of EUR53 million is in line with prior year and underpins our continued strict CapEx management. Prior year benefiting from divestment proceeds and sale leaseback financing.

27:26 Our current assumption for full year '21, net investments remain the same. Here we expect an overall cash outflow of between EUR120 million to EUR280 million.

Breaking this down, we expect CapEx outflow to be in the range of between EUR300 million to EUR350 million, which we expect to be mitigating by positive inflows of between EUR70 million to EUR180 million through some smaller divestments and positive net pre-delivery payments for aircraft. 27:50 To assist you as before, we have included a modeling assumption table in the appendix of this presentation.

That brings me to the total cash flow of EUR59 million, which was driven by the net inflow from financing of EUR1.1 billion capital increase in November, in addition to the increased RCF drawings partly offset by principal lease payments. 28:21 And on to the liquidity position, let me run through our cash and facilities as of 3rd of February.

We are pleased to report a strong liquidity position of EUR3.3 billion reflecting strict cost discipline that expected lower working capital swing due to reduced summer '21 volumes as well as the proceeds from the recent capital increase. 28:44 The outflow for the month of December and January was very much in line with expectations with Omicron having less of an impact than initially anticipated and strong cash inflow in the recent days.

With this strong liquidity position, we are well-prepared for the remainder of the winter season. And also in a very comfortable position to make the first step in handing back roughly EUR700 million of government support early April.

29:14 Onto our net position, Q1 net debt stood at around EUR5 billion in line with the year-end net debt position. The in-line position reflects cash proceeds of EUR1.1 billion from our recent capital increase offset by operations and working capital outflow of roughly EUR1 billion.

The latter of which as previously outlined being much lower than what is seasonally typical for our first quarter. 29:43 Additionally, on the bottom left of the slide, we have again provided the drawings of the silent participations as well as under the RCF as of both balance sheet date and on 3rd of February.

To the bottom right of the slide, we have provided the split of our financial liabilities with the full details on lease liabilities and life liabilities to banks, which I know most of you find helpful. 30:10 So to finalize my section, I would like to reiterate my ongoing priorities as CFO.

It is important to me that we continue with our strict cash and CapEx discipline. Manage the working capital flow back and further execute good on the asset-right strategy.

And today you have heard further evidence of this with the initiation of the hotel fund. We will continue to drive operating effectiveness.

This means where possible we will work on optimizing our fixed capacities. 30:45 Our Global Realignment Programme is on track to deliver another further 25% of our target this year.

Our digitalization we see the good progress of TUI Musement and we will continue to accelerate our digitalization plans and growth aspirations through dynamic packaging. 31:03 And lastly, but certainly not least, we will continue to work hard on optimizing our financing structures.

We will seek further de-lever opportunities using organic cash proceeds from also from routine portfolio optimization and the continuation of our asset-right strategy. All with a target to reduce debt and to further improve our credit rating.

31:28 And you may well have seen our on our AGM agenda, the new capital authorizations, which will -- we will ask our shareholders to approve today. And to say it clear, these are inventory resolutions.

We are convinced that the availability of options and the flexibility to act quickly on opportunistically the front market opportunities are a value for all stakeholders in these volatile times. 31:58 I'm pleased to say that we have made good progress over the last month and that we will continue on this path.

To conclude, it's our collective ambition and target to return the company to a solid and healthy balance sheet. TUI is well-positioned, and I look forward to updating you as well as we deliver on our ambitions in the upcoming periods.

32:22 With this, I will hand over back to Fritz for the closing remarks.

32:26 Okay. Thank you, Sebastian.

I have one more slide, and then we turn to your questions. But it's important slide, I think.

In the lower part of the slide says 3 times gross leverage, of course you can move that ratio by moving that down and that's what we want to do, but also to move cash conversion up and profitability up. And we think we have done our homework in the crisis to be significantly up on the EBIT long-term, right, so -- mid-term.

So this is by growth, and this is by efficiency. 33:04 And the pockets of the future growth of profitability as you see above, so that if we do our homework.

I talked about the expansion of our tours activity segment already today stronger than pre-crisis, even with lower customers. Digitalization, mass individualization, 21 million customers as the distribution channel of activities are more relevant, more differentiating, more growth in the customer base.

So cross selling, up selling of activities of room upgrades and so on and so on. We see very promising first results.

One of the reasons that actually our tours activity segment is so strong is also the new distribution channel, which we have here. 33:52 And then I talked about the asset-right financing structure.

So growth in Hotel segment, growth in Cruising by new tonnage and so on. And Sebastian talked to you about it in on the financing and joint ventures of balance sheet.

Very important, the first step is done in terms of the hotels and that will be a strong growth pocket as well. 34:20 And last not least, the best predictions you can do is on cost saving.

We promised EUR400 million '23 onwards, last year we realized EUR240 million, this year we will do 90%, so EUR340 million at least. All actions close this year, so we finish realignment a year earlier than promised.

So these are the pockets, which we believe will create sustainable growth and sustainable also profitable growth and cash conversion which is equally important than just managing debt down. 34:54 That said, I would like to open the floor to your questions.

35:21 Thanks. Good morning, everyone.

Three questions, please. First on the summer average selling price increase of 22%, what is -- can you quantify the mix benefit within that given your packages are up and your flight only is down and clearly there is a very big difference in average selling prices between packages and seat only.

And also what are your margins on those bookings because you're showing us, you're paying 20% higher rates for example on the Riu hotel portfolio, you've got higher fuel costs. So could you just confirm the margins are up for the summer as well?

36:02 Secondly, I appreciate it's too difficult to give full year guidance, but we're nearly halfway through the second quarter. And you talked a bit about cruise and markets and airlines being worse than the first quarter.

Could you perhaps give us some steer on Q2 losses? I mean consensus, for example had a similar loss to the first quarter, around EUR300 million, is that fair?

36:29 And then finally, you mentioned, I think Fritz, in an interview this morning, you're expecting the German states to convert and you've got the EUR1.7 billion authority you're looking for at the AGM for potential share issue, which I think Sebastian you described as inventory resolution, but just really that EUR1.7 billion share authority issue, how many shares do you think the company might end up converting to repay some of this state aid and debt? Thank you very much.

37:06 Okay, Jamie. Hello.

I won a bet, because I said the first one will be Jamie Rollo, and it will be three questions. Okay.

So that actually gives me EUR20 of my colleagues around the table. 22% is all mix, right, is all mix, and it is a mix of destinations, enormously more long haul, enormously more Cape Verde.

So destinations where the margins are very good. Slightly longer holidays, slightly more 5-star than 4-star bookings, the 22% is a lot.

And the margins as the destinations, which are particularly popular is now long haul to the Caribbean and Cape Verde, I mean, these are by far has a margin destinations we have. So therefore it is mixed, but also the margins are significantly up.

That said, you know, maybe Sebastian will talk about hedging position in a minute. 38:20 We talked about should we do a full year guidance.

In all fairness we decided not to do it yet. And in all fairness, when you look at the booking position right, now just the development over the last weeks, which of the booking pattern what we have guided to this with Omicron being prevalent in December, and obviously 100% potentially even in the next weeks going above 100% for summer, in terms of the booking patterns, we would have liked to do something, but it should have been also meaningful.

And therefore, you know what I see right now is extremely strong. 39:03 But that said, if we can keep that a little bit a couple of weeks, maybe a couple of month is, the big booking month as we see right now, I think that, yeah, we're potentially in a better position to do that.

With the conversion I just said this morning, because I cannot imagine that a state has the opportunity to convert at EUR1 and doesn't do it. Therefore I think it will happen, I have no particular information of when it will happen or how it will happen.

I also know from all discussions I have that the state is potentially not a long-term investor, that's also clear. So -- but that's also nothing I know, but just I assume.

But that said, Sebastian, particularly on the capital, and also in the hedging position and the -- yeah, things, Q2, yeah.

40:04 Thank you, Jamie for the question on the Q2. As we said, the first quarter was impacted by the Omicron really as Fritz described is, which impacted significantly December, but also January.

And the Q2 is normally the weakest quarter we have in losses between EUR200 million to EUR300 million in normal years. And we do see the impact of Omicron in the second quarter.

We also see a catch-up, so it's very difficult how these two effects will be. But we do expect that the Q2 will be weaker than the Q1 due to early Omicron booking impact.

40:57 On Cruise, we have now with TUI Cruises & Hapag-Lloyd has set 10 ships again in operations. There is a -- there were very, very few bookings for from mid of November till almost now.

We have seen also now a strong impact and we have strong forward bookings. So it's really exciting to see, and I'm really curious to see how strong the catch-up effect will be and this is not yet clearly to predict.

41:37 On the hedging position, we haven't had the lines, which we would have had before. And that's why we hedged later than normally.

For the winter, we are well hedged and for summer, we have hedged the booking position. And there are two effects, which offsets almost, which is the stronger pound and euro as we had anticipated and the higher fuel price.

So that's why we think we can cope with that on today's level. 42:14 And on the capital measures, I actually don't know, if the inventory decisions, if that is a real English word, but I -- we couldn't find a better one.

And a lot of the decisions will depend on when is the right occasion, how strong is the business and the operating cash flow. And that's why we cannot give any guidance on that.

The focus very much now is to really get the strongest cash flow generation we can do.

42:52 Brilliant. Thanks.

And sorry, just a follow-up. So in terms of Q2, something between the normal EUR300 million loss that I assume not as bad as the EUR600 million loss a year ago, somewhere in between?

43:11 If I would agree on that, I would give a guidance, which I don't want to do. But it will be less than last year's quarter two.

43:23 Brilliant. Thank you very much.

And apologies for things are predictable. Thank you.

43:29 That's good. Okay.

43:41 Great. Good morning, everybody.

Just wanted to follow up on that question on the share authority, assuming that Silent Participation 1 is converted, could you just confirm how many shares it would convert into currently? And therefore, kind of how many shares left over in the authorization?

Second, when you think about the new hotel funds you're raising, could you sort of sketch out the economics of the fund. And I guess what I'm trying to understand is how much equity you will put in and what ultimately the profit contribution could be from that fund once its maturity, please?

Thank you.

44:30 So the Silent Participation, the conversion is for EUR1. So it's 420 million shares.

And this is what you can deduct from the authorization. But as said, these are inventory decisions, no concrete plans on that.

The hotel fund and this is very important is independent of TUI. The hotel fund can invest in any property.

The facilitator is [indiscernible] invest. Of course it's our interest to manage these hotels, but it could also be that these are other hotels.

And if you look at comparable hotel companies official data, normally the income is 3% of the revenues at 10% of the GOP. So, without any capital deployed.

So this is why we are doing it, it's an independent body from TUI. And we will manage the hotels.

And that gives us acceleration of building our hotel brand network.

45:48 Okay. Great.

Thank you.

46:01 Thank you very much. Thanks for taking my questions.

Just starting on the balance sheet, obviously you've made a disposal in the quarter of Nordotel hotels. Not an asset you've talked much about before, is there much -- also that kind of asset that you can sell any other disposal plans to come?

And then the second question, you obviously seen a shift from flight only towards packages, has that been TUI led, have you been pushing that or if consumers actually been wanting to book more packages and maybe the reasons behind that shift. And then thirdly on Cruise, I think on your guidance on summer close to normality is Markets & Airlines comments.

So maybe you can just talk to me about where the -- how you see the Cruise recovery come, when that can return back to normality in your view?

46:51 Okay. So flight only is also, I mean, first of all, we sell whatever we can sell, right.

So we are not in the business to educate our customers. But the mix itself, is of course when you do less over land then long haul is more prevalent, then you have more packages, right.

And also sometimes when you look, we see the first scarcities coming up, right. So scarcity means of course that you cannot book independent, right.

So when you look for example, summer bookings, when you look for example the first high season now will be the Easter weeks. Easter weeks, the destinations will be full, that's also good for margins by the way and good for the late pricing.

So it's not that we necessarily wanted to do, want I mean, it's good for us, but it is customer that it's scarcity led and its destination led. What was your other question was?

47:55 [indiscernible] more left to sell.

47:56 I mean, there is more left to sell. No, no...

47:59 On the asset.

48:00 That was not for Nordotel. I mean, the third question was our cruise recovery.

Cruise recovery may be due to the selling of -- if there is more to sell, but the cruise recovery is a little bit, I would say, common sense. People would actually go on cruising right now.

But of course, when the infection rate limits your access to harbors to limit actually your cruise operation, then of course, it is volatile. We believe that the summer will be much better, because last year it was also much better.

And when you look at the booking patterns right now, bookings for summer, particularly for Q4, this financial year, but also, yeah, Q4, Q3 starting, but particularly Q4 is on pre-crisis level and prices are, if at all, higher than pre-crisis. So, therefore we assume that demand will be there.

49:09 And also that if you can do the savings, that the savings will be done, and it will be very attractive. That's what we assume, particularly in summer when the infections are less influential.

And you have heard Denmark, you have heard UK and also even Germany very conservative. But that's right now opening of everything before Easter is thinkable.

So I mean, therefore my personal view is, it is not unlikely that this will be on pre-crisis or close to pre-crisis levels. On Nordotel, Sebastian can -- and I mean, but maybe you can take that question.

49:55 Yes. First, we sold Nordotel into Group hotel, which is one of our joint venture companies, which is very good fit with our strategy.

So we keep 50% of the after taxed profits. Do we have similar opportunities?

It is part of our normal business that we sell the one or the other assets that we have done in all the years. We had discussed Marella, there would be significant synergies to bring this into the TUI Cruises joint venture.

For the time being we have to see when we have the right moment, cruise should recover first. And the good thing is that due to the ownership of three out of the four ships that Marella is generating a good cash flow.

So, we can wait till we can achieve the full value of Marella. And so, there is a few things which we will do, Marella would be the biggest project.

51:11 Thank you.

51:24 Hey. Good morning.

Just a question from me, firstly on the pricing, do you think this the price rises are sustainable? I know it's been driven by mix, but do you think it's a one-off just using cash build over COVID lockdown or do you think there could be a fundamental sort of change from going forward?

And on the Marella point, on the sale, obviously we've been talking about returning cash to the government or paying down those facilities. I mean, how are you balancing potential, just getting the right price for Marella and also paying down certain facilities?

Thank you.

52:11 On -- maybe I take the first one, and the second I think on the strategy on particular balance sheet, Sebastian, I think. But pricing, it's not sustainable, I mean, 22% pricing until the end of the season just would be a paradise.

I mean having a starting point where we have significant bookings now, you know, 2030, above 30%, on summer business and cumulative 20% up on pricing has never happened to me and I have never seen it. Also the addition of bookings which come, I mean we talked last -- even last times we talked, we were 25% or 23% up or whatever.

I mean, it's now for quite some time 22%, 23% up. So it's so much longer than are expected, but of course, at the end of the season, it will be lower because 22% up in prices would be an enormous profitability.

But it says as longer we can keep the prices up, the better it is. 53:19 And also one thing should be mentioned, we see right now, one market trend, which I also have not seen before that elasticity is relatively small, meaning if people don't book right now for summer, it's usually not the price, if people don't book for summer now, then it's usually uncertainty.

So therefore we keep margin up, prices up because we don't believe that lower prices would increase demand right now. But we have a late booking pattern we keep our nerves a little bit.

We keep the prices up and play the price curve. So I believe the mix right now when you look at the mix where people travel, how people travel, we will keep quite some part of the 22%.

Will it be 22% by the end of the season? No.

But, Sebastian, you really have a good view on these things as -- if we had 22%, we will be happy.

54:15 Yes. And I mean the interesting thing, as Fritz said that, the price level, we do see at the moment supports what we have seen before.

This is quite unusual and maybe there will be also some scarcity. But you never know it's very difficult.

54:34 By the way, winter is more end of the season now and yeah, 15% up.

54:39 Yeah.

54:39 So maybe it's also interesting. I mean let's see -- let's say mid-season and still 15% up, let's see, anyhow, Marella.

54:45 And the week of January was the pickup in February also supports strong prices, which is all time usual (ph). Marella, as Fritz said, we anticipate a good and full recovery for the second half of the summer.

And I think it's very important that we do see this recovery to formulate a view of what a fair price would be because we are not under pressure to sell something because of the need of cash. And as I said, the situation of Marella is three owned ship, one leased-in ship from TUI Cruises.

So the company with decent low occupancy is cash generating. So therefore the interest, which we may would need to pay is easily offset by the positive cash flow.

So it's really the question of optimizing the value for you as shareholders.

55:45 Thank you. Super.

Thank you.

56:02 Good morning. Thank you for taking the questions, I'll do three, why not.

On bookings, a couple of points to that, on the UK, could you tell us how booked the UK is kind of relative to that 24% that the whole needs it. And then on the sort of broader booking environment, obviously January is a very happy booking month.

But if the volume stay as they are now, how would that then compare to a normal seasonal pattern. I guess my point is, what happens in February, March, April, do the normal bookings go down a bit of that, how would that sort of look?

On the hotel funds, could you tell us how that ties in with the plan you talked about previously on increased franchising and growing the brand in that way and how the two are related if they are? And then my third question I think, online, how is that impacting your sort of gross margin after commissions and distribution costs?

Thank you.

57:05 So in the bookings we are ahead, right. So -- and the bookings in a normal year in the UK, we would be around just below 40 and now we are mid-40s.

So the booking up in the UK is the only market where we are cumulative ahead. And since this week, we are also in the net adds ahead.

So, the -- and also because it's such a big portion of our bookings profile, it's also pricing, you can judge a big part of the 22% price is actually part of the UK. And as we have now more than half of the fleet or let's say half of the fleet of our aircrafts in the UK and particularly more or less, let's say 80% of long-haul aircraft in the UK, the UK will be enormous driver of the full summer profile.

Now that said, I said Netherlands is amazingly high now, 70% above pre-crisis level in terms of net adds. But at the same time in all of course the total amount of bookings in the Netherlands is still relatively small, lower than comparable to pre-crisis, but UK is very strong.

So that said, what was the other questions?

58:36 What happens to February, April normally?

58:38 Yeah. Usually you have an enormous booking peak right now and usually comparables come down.

Therefore our comparables, therefore the 100% will be over-achieved at certain weeks from now. I would have expected the cut-over point for summer bookings later in February than it was in the first week of February, was a little bit of a surprise to me.

But it will of course stay up. But it's not only the comparables, but also the total booking, I mean, last -- as I've said last January it was 275,000 bookings per week.

So it's not only relative high, but also absolute high in that respect. And then the hotel fund, it was.

59:30 Yes. May be -- the hotel fund owns the hotel.

So the independent fund owns the property of the hotel. We would manage with our core brands these hotels.

So, Robinson, Magic Life, TUI Blue, these would be the brands for the hotels we manage. So it's not a franchise.

59:55 Okay. So the franchising plan is completely at [indiscernible] independent strategy to this?

60:02 Yes. You referred to the growth we have for especially for TUI Blue, where we increased from 10 to above 100.

And where we want to grow and accelerate the growth through franchise and management. This year the hotel fund independent of TUI owns the property, we would manage the hotel.

60:29 Brilliant. Thank you very much.

And then just the online question, margins from online versus offline?

60:35 Can you -- so how the online margin is, yeah, Sebastian, you got the question.

60:41 I mean, this is really now very exciting. The online margins, which were historically lower than retail margins, it's now closing.

And what is also very interesting, the more we sell through the TUI app, the lower distribution cost we have, because with that we don't have any distribution costs. So that is really online is not online.

So there are good trends, of course we have just started the journey. And we put a lot of effort to accelerate the journey.

The good thing is that we are still at a starting point, so the benefit can be huge.

61:20 But one thing is also -- I want to mention one thing. Strategically, it's not our target to reduce online sales cost.

I mean, strategically we want to get cut over to the online proposition, and this is particularly true in Germany. And in Germany, for example, we have the strongest sales on that sets Sunday in the company history, last Sunday.

And one of the reasons is we spend a little bit of online sales. I mean, we gain market share, we are the only -- the traditional tour operators, the only player with a significant [Technical Difficulty] presence.

So, we are driving out online in order to significantly have more control. 62:03 The ultimate goal as Sebastian says, online is not the end state.

The end state is mobile, and that's the reason why the app, which is now used for ancillaries will be, and will become part of the strongest growing section for our holiday experiences as well, so the packages as well, because conversion is good, attention is good, sales cost are very good. But as I said, strategically we are still, it's nothing changed that we want to become more and more an online company.

In particular the biggest and development areas are in Germany where retail was always so big. And the scattered distribution landscape is tends (ph) of tour operators.

62:48 That's really helpful. Sebastian, your comment about online versus retail, when you said retail, where you talking about your own stores because typically the thing that -- the achieved margin versus the margin before is the reason the cost of paying third parties like in Germany.

So I guess my question is, the online move if it reduces your use of third parties, was it not [indiscernible]?

63:11 The customer buys the product where he wants to buy the product. In our own retail we have a good margin.

And as I said, also the margins now online are coming closer to the retail margins, which is I think a quite normal way. We have seen that in England that the margins you can compare.

This is the same path we see (ph) in Germany.

63:36 I mean the ticket size online usually is smaller than in retail because you have one click of that competition. So the ticket size is smaller, distribution costs are a little bit smaller.

But you know as Sebastian says, this is now converging if you like.

63:49 Brilliant. Thank you very much.

64:04 Hi. Thank you very much.

Three questions if I may. The first one on the second half of this year, I mean, you used to generate EBIT of around EUR1.2 billion in the second half pre-COVID.

You're talking now about summer capacity broadly aligned with 2019. So can you talk a bit about the moving parts in that EBIT, can you achieve the EUR1.2 billion in the second half which are the moving parts?

64:34 Secondly, in terms of Q2, could you give us a bit of a steer around the working capital, cash contribution in Q2, maybe referring to past Q2 levels, or how we should think about it? And lastly the authorization, the 1.6 billion or 1.7 billion shares authorization, if need be, could you talk us a bit through the process.

How did you get to this number? I mean, why is any 1 billion new shares authorization or 2 billion, or how did you get to the number?

And in that regard, I mean, you did mention this EUR700 million reducing the state RCF in April. That's the first step.

So do you have any visibility on the time-line of further reductions in the state RCF, is anything already agreed with the German state? Thank you.

65:37 I mean, it's a good try, but we cannot give guidance, right. I mean, so as I said, it's difficult to prognose right now when you are 72% on normal level, your cash-up velocity is 100%.

So we -- and then 22% up in price. It's difficult to do these kind of prognosis.

And that's the reason why we consciously we said, we don't give any guidance. Now we think about it to next time and you know it's not that we are against guidance, but it should be meaningful.

So, if I said 1.2 billion was right, that would actually contrast everything I said before. Cash generation, maybe Sebastian, can you take that or you know on Q2?

66:30 Yes. We would also not give guidance.

I think it will be, I mean, it depends on profitability. I said something about that and how strong the bookings will be.

There we are positive, but you have to do the own --

66:44 Yeah. We are amazingly aligned.

Still -- and then how did we get to the authorization is more or less we got the standard --

66:53 The legal framework.

66:54 It's the legal framework, which together with the Supervisory Board and talks to investors and also in the best interest of the company we have flexibility and [indiscernible] accrual we do the right things, we want to achieve the 3 times leverage. That's our main objective.

And to do the right things, we have then, what did you say inventory approvals of...

67:20 Yeah.

67:21 Inventory approvals, and then, of course, the Supervisory Board together with the first end we will make a plan and we will of course communicate as soon as we have.

67:34 So the numbers are [indiscernible] that is the legal framework, that was not calculated from something, which we would like to have or what we need. It's just what you normally do and this is given by the legal framework, Germany.

67:47 Understood. Excellent.

Thank you for that. Just on my second questions on the Q2 working capital.

Can you make any -- I understand that is difficult, but can you make any comments related to the usual Q2 working capital movement in cash? So would you expect, you are saying bookings are strong over the last weeks, so should it be a much stronger cash inflow from working capital than the usual Q2 or any color you could provide there?

68:12 Normally bookings bring cash.

68:13 Yeah. I mean, that will be strong.

I mean, there will be strong bookings, of course in usual you have strong January bookings as well. So therefore -- but it will be a strong cash inflow versus with the position we are in right now.

I mean, that's very clear.

68:31 Okay. Understood.

Thank you very much.

68:34 Thank you.

68:35 Thank you.

68:39 Thanks a lot. Have a great day.

And talk to you soon.

68:42 Thank you. Bye-bye.

68:44 Bye-bye.