(new: booking figures for winter 2024/25 and summer 2025, updated price reaction, analyst opinion)
HANNOVER (dpa-AFX) – Despite growing economic concerns, the tourism group TUI is working its way back to pre-pandemic levels. CEO Sebastian Ebel reported on Wednesday about good business with customers from Great Britain and Germany. Nevertheless, in the 2023/24 financial year, Tui with a total of 20.3 million tour operator guests still lagged behind the 20.6 million from the pre-crisis year 2019. Ebel thinks it will break this mark in the new financial year by the end of September 2025. The group’s operating profit is also expected to continue to grow after its recent jump.
The news was initially met with price losses on the stock exchange: Although the business figures were roughly as analysts expected, Tui shares temporarily lost eight and a half percent to around 7.74 euros in the morning. It wasn’t until shortly after midday that their price turned positive. Most recently, the stock was one of the stronger stocks in the MDAX, the index of medium-sized stocks, with a price gain of around one percent to around 8.54 euros.
Stock marketers reported in the morning that investors were taking profits after Tui shares had risen sharply in the past few weeks and months. After the jump into positive territory, the stock was trading around 21 percent more expensive in the afternoon than at the turn of the year.
In the past financial year, Tui counted seven percent more tour operator guests than the year before. Sales rose by twelve percent to 23.2 billion euros. The fact that the increase was not greater was due to business in France. The organizer there had slashed its offer by half – causing the number of guests to fall by half a million. In Great Britain, however, Tui has already counted ten percent more bookings than before the pandemic, reported CFO Mathias Kiep. In Germany the number was five percent higher.
The bankruptcy of the tour operator FTI, which had to cease operations this summer, also contributed to this. As a result, Tui gained additional customers, as it did with its brand after the then European industry leader Thomas Cook went bankrupt Neckerman Traveling in September 2019 was the case.
During the Corona crisis in 2020, Tui also became a need for restructuring: the company lost its business due to the travel restrictions. The German state saved Tui from ruin with financial aid. The company has paid back the aid and is making money again. However, the remaining mountain of debt is still too big for the board.
In the past financial year, Tui shareholders received a surplus of 507 million euros, almost two thirds more than the year before. In day-to-day business, the group achieved an operating profit before interest, taxes and special items (adjusted EBIT) of almost 1.3 billion euros, an increase of around a third.
Tui has long been generating profits less from the sale of hotel accommodation and flights than from its own hotels and cruise ships. Of the operating profit of 1.3 billion euros, 1.1 billion came from the “holiday experiences” division. In addition to hotel chains such as Riu and Tui Blue, this includes the Robinson Clubs, the cruise lines Tui Cruises, Hapag-Lloyd and Marella as well as the tour operator offers at the holiday destinations.
The latest booking figures make Ebel optimistic that people will continue to eagerly book trips despite the difficult economic situation. So far, Tui has already sold 62 percent of the winter program, and for summer 2025 it is 17 percent.
“Our goal remains to become more profitable, efficient and stronger with Tui in all segments,” said Ebel. In the new 2024/25 financial year, group sales are expected to increase by a further five to ten percent. Adjusted operating profit is expected to increase by seven to ten percent, just as much as planned in the medium term. The board wants to further reduce the mountain of debt. In the past year, the group’s net debt fell by half a billion euros to 1.6 billion euros.
The US aircraft manufacturer Boeing continues to cause trouble for Tui, as it has had to reduce its production due to incidents and production defects and recently even had to stop it for weeks due to a strike. The airlines of the Tui Group, such as the German Tuifly, like other airlines, will therefore have to wait even longer for new Boeing jets.
Deliveries of the 737 Max aircraft are now two to three years behind the original schedule, the board reported. In the past financial year, Tui only received five new machines of this type. According to current status, 13 jets are expected for the new financial year.
Industry experts were satisfied with the Tui figures. Jaina Mistry from Jefferies spoke of fulfilled expectations and good business. Your colleague Othmane Bricha from Bank of America raised his price target to 12.50 euros. He still sees almost 50 percent room for improvement./stw/lew/jha/
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