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Good morning, everyone, and welcome to the TUI Group Full Year '26 Q2 and H1 Results Analyst and Investor Conference. My name is Seb, and I'll be the operator for your call today. [Operator Instructions]. I will now hand you over to Nicola Gehrt, Group Director of Investor Relations. Please go ahead.

Good morning, ladies and gentlemen. A very warm welcome to our second quarter results presentation here at the TUI campus and Hannover. My name is Nicola and I'm Group Director Investor Relations. And I'm delighted to be joined for the presentation by our CEO, Sebastian Ebel; as well as our CFO, Mathias Kiep.

We are pleased to present a strong set of half year results as well as Q2 results, highlighting the strong progress we have made on the transformation whilst absorbing the impact of the Iran war and the Jamaican hurricane.

We will also share our ambitions for the outlook of this financial year, which remains to be a challenging market environment. Following the presentation, as always, we will open the floor for Q&A.

And with that, I have the pleasure to hand over to Sebastian.

Thank you. Nicola, I couldn't have done the summary better than you. A very warm welcome from rainy Hannover. Rain should mean good bookings. So we hope and pray for similar weather for the coming weeks. The agenda will be very similar to what you are used to it. I will do a summary of the operational and strategic highlights. Mathias will go into the financial details and then trading and outlook in a short summary.

We had a strong Q2 and a wonderful H1, and it would have been even better if we wouldn't have had the impact of the Iran war and the Jamaica hurricane, I always say, as someone took away the cream on the cake but that's how it is. Why we were able to see this development. The transformation is gaining momentum. The vertical integration is even doing better. The diff products are loved by the customers.

And maybe that is the biggest change to before AI is disruptive and it helps us a lot in creating efficiency, streamlining processes, getting better processes, but also changing the distribution landscape, very, very exciting.

And having said that, unfortunately, the second half year, like March, March, as said, [ EUR 50 million ] to EUR 50 million because of the Middle East impact. This will also impact -- or has been impacted and will impact our second half year results. Therefore, we had to change the guidance in April, and we want to reconfirm it.

You could rightly ask why is the range from EUR 1.1 billion and EUR 1.4 billion, a significant one because the visibility is not as much as we are used to it from the beginning.

If you look some highlights on the achievements, we further streamlined the organization. We now have beneath me a COO function, who makes sure not only to get all the cost and efficiency synergies but also make sure that the sales organization, make sure that the very, very good load factors, occupancies of cruise ships of hotels will further be improved.

And on the other hand, the unique hotel products, cruise products, amusement products are very important for the sales organization.

On the hotel side, we further expand our business in an asset-right model. we have now built a very strong River Cruises business, another ship. It helps us to strengthen the TUI ecosystem because a customer who was yesterday traveling to Majorca, tomorrow wants to go to a Christmas cruise in Germany. So we try to offer TUI-branded products in different segments.

The functional-led target operating model is now established and which means that we align processes all over the market, which means higher productivity, but it means also a higher speed if you implement something once like AI, it's there for all the markets. You don't have to do it market-by-market, less cost but higher capacity. What -- the higher speed.

Therefore, especially in the Markets + Airlines, we operational excellence efficiency is important. Also in this market environment, we looked at capacity, Nordics was a longer term, but overall, we were less -- we were more risk adverse and reducing risk capacity.

The commercialization of the airline, which is a big, big project, and we expect huge benefits are now in the status of being implemented. The first markets where we have implemented is Belgium and the Netherlands, you may recall that this was a market which gave us a headache. And we do see that with a strong airline team, giving them the commercial responsibility that has led to significant improvements.

And this will be rolled out beginning of next -- in next fiscal year. This model will work in all the markets. So we will have then a commercial responsible airline management, of course, capturing all the synergies. But over -- beside the benefits of the synergies also to get the benefits from getting direct into the market.

We are expanding our business. The example here in Romania. We also have had a soft launch in Italy. We will do the one or the other market more in East Europe, but also outside Europe. We have not only now rolled out, and this is now for a year, the one app with more and more functionality, increasing the number of customers. But what is new, the OneWeb is at the moment, gradually going live.

It started with the U.K. -- with Ireland then U.K., now the Nordic country, Belgium, Holland and Germany will be the last country in January, February '27. And the most disruptive part of the sector of the business of, I would say, in the world at the moment is AI.

And we understand AI not as one additional tool, but a way of how we work. It is not only linked to IT, but it's also linked to how we create better processes. And better customer experience and what is important, how we get into new, more cost-effective distribution channels, a very exciting topic, which is important for everyone in TUI.

A short look about why the March was impacted so much. We had 2 ships, which we couldn't get out of the region for now 10 weeks. They will be back into commercial service 15th and 17th of May. This was a significant cost for the second quarter, but also for the third quarter. We had to bring customers home from the Gulf region, but what was even more costly from the long-haul Eastern countries, which went through the UAA, hub, the Maldives, Thailand and so on.

And we also had impact on our hotel business in the Middle East, but also in the far east. We are really proud not only that the 2 ships left safely the Gulf, but that we had own repatriation flights to the Dubai-Saudi border to bring customers home safely, very quickly. And that really boost the brand not only awareness, but trust and loyalty.

I never got so many positive letters from -- or e-mails from customers, but it was a significant cost, and it will take until the end of the year. I assume until the Middle East and the Far East were back to normal situation. So the impact was EUR 40 million plus in the Q2. And in Cruise, we see because back to commercial business middle of May, another EUR 20 million.

And what has changed in Market and Airlines is customer sentiment, first from East to Western Med. The long-haul East, Middle East is almost 0, so very, very low bookings. And what we also see, and maybe this is related to the discussion on kerosene that people book very late. So if you see later on that we still need to book a significant amount to get back to the last year's numbers. We see, for example, that May is on the same level as last year. And this is a clear trend of the last-minute bookings.

If you go into the details, the hotel business, despite Jamaica and despite the impact in the Middle East with our own hotels almost on the same level as last year. Without the Jamaica, the occupancy would be on the same level or slightly above, and the rates would have been gone up.

The problem was with Jamaica, as the hotels had to close for minimum 2-month, maximum till for 6 months for renovation or restructuring even when we were able to open the one or the other, we had to do it with lower yield. That will normalize in the summer.

Cruise, outstandingly strong. If we would haven't had the impact of EUR 20 million in the second quarter, we would have seen even a stronger quarter than last year despite the same capacity, and the half year was outstanding. And we haven't seen any slowdown even in the last days. The demand is huge. And what I found really amazing is as we didn't expect to get the ships out when we got them out, we had canceled the cruise until the end of May.

So then we were able to open bookings again earlier for the cruise from 15th and 17th of May onwards. And they are almost as booked as before. So there was a rush on this capacity.

TUI Musement doing well. What is also nice to see is despite a stable passenger numbers, they are able to sell more to existing, but what is even nicer to gain more new customers. And this is important for our TUI ecosystem. So a good development on a very good on HEX.

If we look for Markets and Airlines, actually, it's -- the first time for a longer time when we do see a significant improvement of the result, less losses in winter. And we wouldn't -- if we wouldn't have had the impact of Iran, then the results would have improved even stronger. So we are a little bit frustrated about this.

The benefit came in all markets, especially in the Northern region and in the Western region. Germany is influenced by some one-offs last year. And this is, on a stable passenger number, dynamic is growing. The differentiated product sales are growing. App sales are growing, and we were even able to increase the load factor of our airline. So a good development and this is a result of the transformation.

What is also important that we're talking about AI, not only as a tool to streamline processes to improve processes. But like in TUI Musement, that is, of course, for me, an eye-opening project within a couple of week the axel-based transfer planning was newly made through an AI agent 3, 4 weeks. And it's so much reducing the cost of the number of people who have to work there, but also the load factor of our buses have gone up by 5%. So this is a quite significant example what we do see in a lot of areas of the company.

When it comes to products, we have now implemented also in the U.K., that was the last market or the last major market, TUI Tours. So this is where the customer individually can do his trip, his round trip and that we do by -- powered by Google and Google content and which had, of course, on a small basis, but a good start in all the markets.

We are also proud that we are now also on ChatGPT. We do see that Gemini probably is the most advanced LMM, at least that's what I would say as a user. And you will find a TUI there, and we are convinced through the great collaboration. I was with Google last week that you will have the TUI booking way to be integrated there in the LMM.

So if you would ask for a nice hotel in Majorca with this and this benefit, you would not only see like today. This is offered by TUI, but then you could, in a seamless process book this package or this hotel of ours and further LMM integrations are underway. We want to play a leading role there. And it will help us and bring us forward a lot.

We have also introduced our reward program. We started in Finland 6, 7 weeks ago. It went very well. The other Nordic markets followed and we will have all the major markets on the system on this reward scheme until the end of the year. It's not a system like we have -- some airlines have it, you collect points and then you get 100 points, a rebate of EUR 1. It's about value recognition status treats.

So we want to recognize with our own enhancement, customer -- loyal customers which can mean the free coffee on the aircraft or a longer stay in late checkout in the hotel. So not only on the booking process but also when it comes to benefits in the -- during the travel. And the good thing is these are things which doesn't cost us a lot of money but gives a lot of recognition to the customer.

Mathias? After a lot of pros, the numbers.

Thank you, Sebastian. And I can only reconfirm the numbers that you showed. So a very good morning from my side, and I'll have the bridges, the summary and then P&L, cash flow and balance sheet as in every quarter. So allow me a brief summary before I go into these details. And first of all, the numbers that we present today, they're in line with our preliminary numbers that we showed end of April. And this reconfirms the very strong quarter and Sebastian already showed you some of the details. This is effectively the strongest H1 we've had.

And now this is also the 14th consecutive quarter of underlying EBIT growth, which shows all initiatives and measures that we've implemented, how they translate into earnings and that's something which is -- we are really proud of when we look at this picture.

So revenue in line with the last year, slightly up on a constant currency basis that is particularly true coming from the euro to pound conversion rates, the underlying EBIT up significantly, and this is post the impact of the Iran war, I think this is very important because we were on road show with some of you talked to some of you when the war outbroke and I think we always said it's important for us that we can consume these costs directly in a quarter, and that doesn't change kind of the shape of earnings that we have.

And I think that's a very good proof of, one, we had it in the first quarter with Jamaica, now second quarter, a bit of Jamaica, but in particular, the lost revenues and cost of bringing home customers from the Iran war. So all of these direct impacts have been really consumed in a good way. And then net debt is in line with prior year. That we will come to that in a second ,is driven by the working capital of the missing bookings for the summer in comparison to the year before. So that's not structural, but it's, of course, reflecting what's the intake as of now.

Now let me come to the bridges and then go to these details. I think Sebastian, mentioned already in Holiday Experiences, more or less flat. And if you then look into the details, Cruises flat despite the fact that 2 ships were blocked and the cost of bringing customers home are also sitting there. That's a fantastic result in hotels.

We still have a bit of a Jamaica impact and then a very strong performance in Markets and Airlines. And as indicated here, the plus EUR 30 million would have been plus EUR 50 million, if we did not have these costs for bringing customers home and a bit of valuation impact directly linked to the Middle East scenario.

A similar picture then for H1. So Holiday Experiences in line broadly with prior year and then a strong improvement in markets. And I think if you take this picture and we'll come to that later, this already also explains in terms of why we had to adjust our guidance going forward because that what we were expecting that there's an even stronger push from Holiday Experiences this year. There's challenges.

Q1, we talked about Jamaica. We talked about Mexico in particular, for RIU and our midnight operations in the Caribbean cruises a strong benefit, but some of the benefits consumed by the lost revenues in Middle East. That's something we'll also see in the third quarter. So overall, despite all the trajectory we have.

This is effectively only almost flat, a bit up and then a strong performance in markets, but we have summer bookings, which are not on the level that we were expecting when we set the guidance, that's why we needed to adjust it and we'll come to that later.

Now P&L, cash flow and balance sheet, what is there to highlight? I think it's very good to see that the improvement in operational result, our EBIT is up this EUR 40 million. But you also see that the group result after minorities has improved by EUR 70 million. So the discipline in all the other elements of the P&L continues, and we have an even bigger improvement of our seasonal loss in the winter compared to the operational improvement.

And with that benefits on the interest side, we also expect now that we come out for the full year at the lower end of our interest cost towards the EUR 325 million, that's a positive adjustment based on the results of winter.

Same on cash flow. I think structural, this follows what you've seen in the first quarter. So more investment, but offset by less payment for pension and less payments for lease amortization, that's exactly the structural changes that we've implemented in 2025.

And interest, I already mentioned, we're going also there towards the lower element. So cash flow follows P&L. And the same is on the investments, because we have some optimizations on the lease, on the delivery portfolio with Boeing, and that help us to slightly reduce what we see there, and that's why we'll go towards the lower end.

What is impacting cash flow then on a net basis, if you take this all together, then it's the working capital and that is solely coming from less customer prepayments compared to 1 year ago. And that is effectively the summer bookings position translating into less customer deposits as of today. So I think albeit this is, of course, a picture we would not like to see, and it has an impact on our balance sheet.

At the same time, it's not structural, and that's the positive thing about it. So whenever the market normalizes again, I think the crisis is now for much longer than a lot of people expected, then this should come back. And in particular, for the winter, where it's really important for us that this come backs, I think there is enough time to recover.

And that's what you also see then if you look at the developments, the -- let's say, flat net debt compared to prior year, and we did have a better position as of Q1. It's solely coming on a net basis from this cash and bank deposits line, which is then less liquidity compared to 1 year ago, which is the less working capital position coming from customer payments. There is a bit of movements from lease liabilities but this is in line with what we've planned for.

This is effectively the Boeing delivery portfolio coming on balance sheet over time. So that's also something we'll see it in the guidance later. These impacts together, we expect that despite a slight improvement, our net debt will slightly go up because we need to reflect the working capital effect in our plannings this could still change depending on how the recovery in the summer is, Sebastian just talked about it.

But at the same time, as of today, that's what we expect. And again, the good thing is this is, from my point of view, not structural. And with that, I think outlook, Sebastian, maybe trading, and then we come to some of the details.

Thank you. As we said before, we do see, in general, a shift from East Med to West Med that we see a softer Mexico, and we very much see a very strong late booking pattern. That impacts all the different activities, maybe with the exception of -- not maybe, definitely with the exception of cruise. We have a slightly higher capacity on hotels and resorts. We have a very good development on daily rate, but we are still behind when it comes to occupancy.

Again, here, it's not short-term, it's medium and longer-term. And we do see that this will get smaller.

On Cruise, all parameters are very good. The occupancy is still 2% less, but that is just because the ships came back into service earlier and there is some catch-up effect. So I wouldn't be surprised if we manage to come there on the same level as last year.

By the way, it's not only TUI Cruise is performing extremely well, but also Marella is performing extremely well. TUI Musement, I said, what is good that the experience is sold, we do see a mid-single-digit growth, which means we sell more to existing customers, and we sell more to new customers, which are important to bring into the TUI ecosystem.

When we look into the Markets and Airline, we do see at the moment that booked revenue is 7% lower, that is roughly also the pax number. If we look, for example, into the next month in May, we are on last year's level, which means that the short-term bookings make up a lot of the shortage and therefore, it's the interesting and important question, will we do see that throughout the year.

Nevertheless, we were very cautious. We reduced risk capacity between 4% and 5% to be on the safe side and mainly with third-party assets, so the impact on our own is less. We are, again, very much focusing on further cost reduction efficiency through the transformation. And we also are benefiting on one hand, from a very good hedging position the summer closer to 90%, still winter above 60%.

But of course, the remaining 10%, 15% means an incremental cost, which we have to offset by other cost measures. So not an easy situation, but why we are confident, not because we have seen a short-term booking pattern, not why we can still have great utilization of our own hotel assets -- hotels or cruise or aircraft. But if we compare the holiday intention with a year ago, it's on the same level.

So what -- the difference is that the impact on Middle East leads to people booking later and a shift from Eastern to Western Mediterranean. So if the market intelligence is right, we should see the volumes -- the still missing volumes coming back in summer.

We also asked maybe that was my fear while people go less on flight holidays, but more stay in the country for overland travel. But also that is what we don't see, and we will not see, especially when the weather stays as it is. So there's a lot of good reasons to fight for every customer, and there are a lot of good reasons to be cautious, and that's why we reduced capacity.

And when the question I got quite often is what does it mean on pricing and so on. We do see a very stable Western Mediterranean market with strong and good prices. And then the interesting question will be when will the offers from the Eastern countries will kick in so that they are also attractive offers for very price-conscious customers.

So by having said that, we changed and we confirmed the guidance of April for the range between EUR 1.1 billion to EUR 1.4 billion the range. I know it's still high, but it's very, very difficult to foresee the future. We are happy to see a good May, but the question is what will be the trend? And if things come down or will stay as they are. Would you do that?

And indeed, I think as another step on top of the April as Sebastian just said, reconfirmation of the guidance when we go through our segments. I think the -- what we can provide you and what we are working with is, of course, the building blocks that we still have and that can help to narrow down your expectations. So on the hotel side, I think given the Jamaica impact and given the difficulties we had with the Mexican market and the important winter business, in particular for RIU, we only expect guidance now slightly below prior year.

And that is a change and that is one element that has left us with the decision to adjust our full year guidance. On Cruises, we still expect the business to grow. We've seen the strong benefits operational and from the capacity increase in the first quarter. Marella continues also to perform strong every quarter. But we had from Marella, as you may recall, a very positive one-off in Q4 last year.

That's something which is then, of course, offsetting all the benefits that we still see there. In addition, as Sebastian mentioned it, we will see the new capacity coming and also the kind of the one now that the ship are operating again in the German business that's according to our expectations or a bit more. So the slight growth despite the Middle East impact we will still continue to see. In Musement, there's not a lot of change, it was just mentioned what we see in maybe a bit less bookings for the summer.

I mean, please bear in mind that that's for the overall portfolio. So what is steered then towards Musement is also likely less, and there has been a quite strong cost management over the first 6 months. There are some elements where we can delay projects in order to make sure that the growth from the EUR 67 million going forward in 2026 can prevail.

And then the question is on Markets & Airlines. There, we had a very strong first 6 months. I think the benefits of the transformation is they are really clear. At the same time, with that environment for the summer and the impact of Iran has on consumer confidence, and that is something now we are in the middle of May. May is, I think, stable, as you said, Sebastian, so that is okay.

But at the same time, of course, it's not great environment. And so we need to adjust our expectations for markets despite all the progress that has been made there. So we expect that the result for markets will be below prior year.

And I think if you take these components together, that's how we look at our guidance, then you can have your own kind of -- you can narrow your own expectations and view on the range that we have provided for the full year.

And then on the next page, we've just summarized what are the impacts on the modeling assumptions. I've covered them all. And on that basis, I would hand back to you, Sebastian,for the summary.

The summary. So besides having a great first half, we do see the challenge in the second half. We think we are extremely well prepared especially the transformation in Market and the Airlines will help us during this more challenging times and will definitely improve our situation in the coming months and years.

We have a strong hotel pipeline, some more capacity in cruises and a lot of great projects in -- with AI, so by saying that and building very much on AI accelerating and the strategic building pillars, we feel very much well prepared for all the challenges will come.

And as soon as the market is smoothened, we will also not only be able to compensate the negatives but benefit from all the changes. So we look forward to the impact of what we are transforming and changing and doing.

Thank you, Sebastian. Thank you, Mathias. Josef, we are now available for Q&A. May I hand over to you?

[Operator Instructions] First question on the line is from Jamie Rollo with Morgan Stanley.

What I'd love to ask the story behind you getting the 2 ships out of the Strait of Hormuz. But sadly, I think I'm limited to some more boring questions. First on Markets and Airline, the 7% decline in booked summer revenues, that's obviously the same as it was in the update last month. Other companies have seen a better trading in recent weeks. I'm wondering whether you've seen any sign of things getting a little bit better or whether it's been consistently sort of down 7% throughout the more recent period?

And also, you hinted at pricing being better. So what's the volume and pricing breakdown within the minus 7%?

Second question is still on Markets and Airline. Obviously, a very good second quarter margin performance. I think it's 150 basis points better excluding the Iran hit. But actually, your direct distribution and online mix were no better. In fact, I think a bit worse in the second quarter and dynamic packages only 100,000 extra passengers. So is that all operating efficiencies driving that performance? And can we sort of assume those continue into the second half of the year?

And then finally, just on the full year guidance, what assumptions sit behind the bottom and top of the EUR 1.1 billion to EUR 1.4 billion range? I assume that's pretty well all in Markets and Airline, given that's where the sort of operating leverage sits? And also what's behind the net debt target for flat in terms of the working capital position at September?

First, Jamie, your questions are never boring. That is a general remark. Second to your questions, we took capacity out, especially capacity, fixed capacity, which we had, for example, leased in when it came to planes, hotel allotments to be prepared if the market gets or stays challenging so that we don't have to discount just to get things filled. And that is the reason why we are in the situation where we are.

For us, it has been important that we are able to fill capacity for the foreseeable future and to take some time to keep volumes open when we know how the customer sentiment will be. And at the moment, this works well. And therefore, volume and prices are very much in line. And we see for the first time that price increases we still have in the Western Mediterranean are offset by the other destinations. So the inflation effect, which we had in recent years is not there anymore.

On the direct distribution online, we are increasing the share of app. If you look month-by-month, there is a positive momentum. And yes, we are working hard to get especially the app share higher. So on direct, the app share is now at 25%, which is almost 5% higher than the year before.

And this means a significant reduction in distribution cost. So that's what we do. And the last question at the moment has vanished from my screen, who can help me with the third question?

I think there were 2 questions on guidance, the upper and lower end, what are the drivers from our side and net debt. And if you want, I can just cover.

Yes.

I think on the upper and lower end for the guidance, I think if you look at the components, and that's what I guided you through, indeed, markets is one of the key elements to move. On the opportunity side, there are also some elements in the hotel side. There are some new hotels coming live to the -- and if they perform better than expectation, I think there's probably some upsides, the same. I think we have quite a footprint in Turkiye. So if the market recovers nicely over the summer, we should see benefits there.

So I think there -- I would say, in general, there is ability to get to the upper end. There's also some risk if this crisis prolongs for longer. And those things what we saw that people still have a high intention to book that doesn't materialize. We are prepared for this. At the same time, this is the way we build that.

And on net debt, if you take the midpoint from the guidance, just exemplary, then naturally, we have lower earnings than we had last year. At the same time, we currently have a negative working capital development that will recover over the summer naturally. But at the same time, there could be an impact or not.

And then you have a bit of impact from the lease portfolio coming from the Boeing deliveries. And all this together would result in the slight increase of net debt compared to what we saw last year.

Okay. So just back on the second question on the margins then. So that margin improvement is all coming through the distribution line as your GP1 margins are holding flat but it's really below that line, you're seeing that benefit?

I mean the margin overall is improving. And there's a mixture. There is not 1 big or 2 big things. It's all the measures here and their, efficiency, cost reduction, less HR cost, less IT cost. So it's a mixture of all, but also we have seen for the first time the distribution costs are lowering in the recent months.

And that's what I mean that the transformation is not a single thing. It's working on a lot of areas. And as we were low on margin that helps us now to bring the margin in a better direction. There is a lot to be achieved in the future.

Next question is from Andrew Lobbenberg with Barclays.

Can I ask some obvious question. Can you talk about the difference in the booked revenue between the U.K., which I think was down 10% in Germany that was down 3%. What's driving that? Second question would be on Cruise. And I appreciate it's early days, but are you seeing any impact on Hantavirus impacting consumer attitudes?

Okay. As you may know, our fleet in the U.K. is significantly bigger than in Germany. So in Germany, more than half is on dynamic flights with third party. In the U.K., it's very different. And by taking out risk capacity, the impact naturally was significantly bigger in the U.K. You could argue it's a very cautious approach. It is.

On the other hand, due to our dynamic capabilities, if the market is as strong as the market intelligence say, we are very much able to bring a good TUI product with the TUI hotel to the customer.

Second, we have seen no impact. I called yesterday the management of our 2 cruise companies, people feel safe. People also are able to get a good judgment. You may know that the highest risk to die in a hospital is by the bacterias, the hotel bacterias. So cruise is a very safe place.

But of course, the media interest has been high, but this has not impacted, although it was all over, probably not only in the U.K. but as well in Germany and other countries. Our business, the last days were extremely strong in bookings and people are very resilient to these news.

Can I just come back on that U.K. versus Germany? So you're saying it's because the U.K. took out a lot of chartered air capacity. Is that right?

One of the main driver is less risk capacity, yes, to protect price.

Next question is from Karan Puri from JPMorgan.

I've got 2 questions on your strategic update that you shared in the release. The first 1 is on the TUI loyalty program. Just given the phased out -- phased rollout through 2027, just wondering what sort of customer enrollment and engagement targets you've set for the first, I would say, 12 to 18 months, maybe. And at what scale does the program actually become accretive to margins through reduced acquisition costs and higher direct bookings shares? That's the first one.

The second one, just on the TUI Tours and the Gemini partnership. Now again, that's given that the AI-powered in destination planning service with Google is now live, what is the early evidence or is there any early evidence of uplift in ancillary spend or increased experiences per customer? Is that something that you can share with us as well? That's it for my end.

The loyalty program now was quicker than we had planned due to the acceptance by the customer rolled out in all 4 Nordic countries, and it will be rolled out to all other major countries in this year. As I said, it's a program which recognize loyalty status, and it's not based on getting selecting points to reduce price.

The first numbers in the Nordic countries have been very strong, but it's too early to give a very clear indication. But we were positively surprised.

Second, of course, the main reason is it should increase loyalty, and customers coming back and staying in the TUI network to create an even better TUI ecosystem to buy less new customers. And this would have a huge impact. If we would have 10% less -- and this is probably a very good number. If we would have 10% less customers to be bought in 2 or 3 years and that would have a -- you know about our distribution cost would make a significant difference.

And by the way, also to do more up sales -- upgrade sales would also be good. But it's a little bit early to give an honest feedback. What we wanted to avoid is that we add up cost to it just by giving rebates and these things all about recognition and recognition, which has a significant value for the customer, but limited cost for us as the free coffee on an airplane or the late checkout in a hotel.

Understood. And on the other one, sorry, the TUI Tours as well.

Yes. Sorry. The tourist business is a huge business all over the world. We haven't been in there or we have been tiny, tiny, tiny. And this has been now introduced. I could say we are growing by a couple of hundred percent from EUR 1 million to EUR 3 million to EUR 6 million. So it's still a longer way until it's really EUR 500 million, EUR 800 million business, which is clearly the target. So again, there, the first start was good.

Of course, the system still needs more content, more functionality, but it's great. It's built on -- globally on the same IT technology. So we are not like in the past doing something here in to this country and something else in another country. So -- and of course, there are markets where the tourist business is more important than another market. So we are very confident that we have a great product and that we have a lot of customers who are interested in.

And what we also did when you look at the organizational changes we did in TUI, one to have a COO role to get the vertical integration, but also getting cost synergies. In the past, we had 2 tours people responsible for it in Markets and Airlines and in the destination because many of these tours are produced in the destinations. So we have now brought it together to not only to lower cost, but to accelerate product development and functionality.

With River cruise, it's easier to just add one ship and then you know you have the revenue and the profit of one ship.

Our next question is from [ Jack Baber ] from Bank of America.

I'm standing in for Kate this morning. Three questions, if that's okay. You mentioned ASP partially mitigating higher costs on Slide 21. I was just wondering how much are your ASPs up at the moment? And what has customer feedback been?

Second question, would you be able to comment on the mix implications on margins from shifting from East to West in the Med. Is it right to assume the East has stronger margins? Could you perhaps quantify the impact and expectations moving forward?

And finally, just expanding on the reduced U.K. bookings linked to the chartered capacity. Is this a reflection of a weakening U.K. consumer? And how do you view U.K. demand for the rest of the year?

Okay. If you -- and I would like to almost answer the question in one. You are right that Eastern margins are higher than Western historically. What you do see is at the moment as the demand for the Western European is strong, they are very stable and sometimes even better margins.

On the effect on the Eastern Med is -- and one of the question could be why do you have less or anticipate less results or may anticipate. It's the missing volume from, for example, from Turkiye. And it's not so much that we lose margin there because it's with only very limited on flying. We do a lot with SunExpress with Corendon. So we are very dynamic there. So it's not in the -- and now also the hoteliers are giving more and more attractive offers. So not that we lose margin. It's about the volumes.

And there, it's the exciting question, will the volumes come? And if you see where TUI has its strength -- it's in -- we are overproportionately strong in Turkiye, the U.K. and that is also the reason why we took more capacity out and why we do see still a weaker booking pattern at Cypress.

For German, Cypress is -- I've never been there for vacation. The U.K., it's extremely strong in the decline in Cyprus or for Cypress was huge, and it has slightly recovered, but it's still slow. So margins are stable, but it's just the volume shift or the not yet volume. And this, in a way, brought us to, with a very different mix of passengers and prices on average, going very much similar.

Our next question is from Andre Juillard from Deutsche Bank.

First one is about airlines and cruise lines. You secured and covered kerosene and oil for the ships. But could you quantify the potential negative impact you could have from higher oil price in the second part of the year and next year?

Secondly, do you have a quantification also of the elasticity of the demand regarding the prices improvement we could have on airlines, especially. And regarding still airlines, could you give us some more color about your capability to rebalance the capacity from East to West, because I guess that you do not have an unlimited slots in all destinations such as Spain, Canary Island and so on. So how far can you go on this rebalancing?

And last question, if I may, about the general environment, considering that the actual environment is tough and putting pressure on all players, do you expect a shift from small tour operators clients to bigger players as you?

Yes, do you want to talk about hedging maybe? And I do the rest?

Yes, of course. Thank you. I think we -- what we can share as today is the hedge volume. And to give you a bit more transparency. So when we look at these numbers that was in the presentation, the 63%, That is the average for the group. And some of our Airline business are fully hedged for the summer. So it is 85%. And then there's some share in our business, which is dynamic and which is not hedged and does not need to hedge in that level. So that brings down the average.

So I would say for the summer, we are generally fine. We've talked about the capacity cuts. But naturally, if we were to get a hit for the last, let's say, 5% to 10% and we don't want to cancel it because it impacts the full value chain, and we have to consume at these prices that would bring us -- would have an impact on profitability, but that's why we have a range in our guidance.

Going forward, we have some 62% that we published for the winter. You have the same ranges there. So some airlines are much higher than the more dynamic regions. And I think that's a bit too early to see what could be the impact because capacity plans, pricing discussions, and there are also a lot of other effects on this that we need to look at and would want to look at.

And maybe I'll start with the third question about rebalancing. As I said, Turkiye, we almost fly with third party airline. So when we have less customers, it's not our risk. The only destination where we had to and we did rebalance or the 2 ones were Cypress and Egypt.

Egypt has been growing unbelievably strong. This has now normalized. So it's not like in Turkiye, where we're well below last year when it comes to booking there, it's more that the strong growth is now limited. So the main shift was from Cyprus, a few in Greece and a few in Egypt to Spain and that we have done. So we don't need any other shift anymore.

By the way, we also had to secure beds, which we manage, which was not easy. It's always difficult to talk about our competitors, and I don't want to do that. For us, it's important to be strong, to get stronger, to let the customer know that we are well hedged, that we take care of them even in cases which we didn't foresee like in the Middle East, and I never got so many positive feedback letters like for this event.

So I would assume strong brands always benefit from a crisis, but it's always important that we are as strong as we can be.

The second question on price elasticity. When we talk about airline commercialization, it has to do in optimizing the network. It has to do with optimizing all kind of cost position, but also to act when it comes to pricing or on special -- on products as an airline. So for example, our seat-only share is very, very small.

And compared to other successful airlines, the share is there by far higher. So the price elasticity on the seat-only doesn't hurt us at the moment. But in general, we didn't benefit from it. And therefore, what we do see is by commercializing the airline, we will more act as an airline, and we will more also be able at the upper end to get customers on seat only, so to benefit there from the price demand curve, especially in the lates when it comes to seat only because it's different to package.

Normally, the lates prices on seat-only are high, and we are, at the moment, not benefiting from that. But that is an implementation. That's why Holland and Belgium are doing as the first country better, and we would expect for the same for the next year in the U.K.

We'll take our last question from Cristian Nedelcu from UBS.

Two questions, if I may. The first one, anecdotally, we are hearing about some of the U.K. tour operators or OTAs competing on payment terms. Could you elaborate what you're seeing on your side? And I'm trying to think, would you consider adjusting the payment terms at all? And how could that impact the working capital at the end of the year?

And secondly, just on the CapEx plan. I think you flagged at the lower end of the guidance for this year. How much flexibility is there to reduce that even further for this year? And to what extent could you give us some color around the CapEx plans for next year? Is that similar in size with what we're seeing this year? Or lower? Or any color there would help?

If we would change something, but we're probably not the forum to talk here about this. I would -- I mean, for me, it's the last escape if you start for us to do something on payment terms, and I would do my utmost to not agree to that, if that maybe gives an answer to you.

What we -- I mean, we have built our own payment platform, which we now rolled out also to other markets. We have now direct debiting in the system. What is the other pay as you -- [ pay now later. ] So these are things we are implementing.

So I would be very hesitating and I would do the utmost to avoid anything because if you start to manage a company for cash, then it's difficult to get, we say, in Germany to get the ghost into the bottle again. I don't know if that makes sense in English. Does it?

And then maybe on the CapEx plans for next year, I mean, naturally, we're giving guidance at the end of the year with a view then towards 2027. What are the elements that we already know today and that is 2 components: one, a lot of the hotel projects, and that's something we discussed already with the view to '26, they're online and they will be kind of executed the same on the Boeing delivery portfolio and the attached CapEx to that.

And the rest, we will naturally go through in very much detail. And with a view of where do we see a direct benefit and which are elements that provide opportunity, and we will have that discussion internally.

Yes. So we will be very careful about investments next year. But you should also have in mind we had and still have a significant disadvantage in our fleet. We have now 60 in the summer out of 100, 737 MAX, which is a by far better aircraft. And we don't have the MAX 10 yet. So we don't have a cost competitive product to the A321neo. So we need this competitive disadvantage to put into an advantage and that's why we are rolling over the fleet with seeing great benefits, but still another year to go.

It's very helpful. Can I add a very short 1 on cruises. Just reading for the press release today, I think you mentioned excluding the changes in itinerary with the vessels that were trapped in Hormuz. I think the bookings are up 1%, if I understood well. While I think you mentioned capacity going forwards is up 6%.

Am I reading this correctly, it feels a bit that bookings should -- if capacity grows by 6%, bookings should also grow in a more meaningful way, but I'm not sure if I'm comparing apples to apples?

No, no. I mean at the moment, we are almost on last year's level, minus 2% was 3 weeks ago. We sell everything. And the occupancy cannot go up further. We had in summer last year, 108%. So maybe we even had too many kids on board. So this is -- the demand is still significantly higher than the capacity we have. We just had the issue that we had to fill 2 ships in May on very, very short notice, and that worked surprisingly well.

So also, if we look at the bookings for next year, they are not lower than the year before than even better compared and even with a higher capacity. So it's very solid and also in the luxury area where we probably had the biggest -- I mean, not in absolute term, it's a smaller business, but where we still had a few points of occupancy left to sell. We have seen now in the last couple of months that we also sell there the capacity we have. So a very amazing market.

But just on the numbers to make sure that it's clear. I mean, if you mathematically have empty ships, then your occupancy goes down because there's 0 for the rest of the portfolio. If you exclude them, then as Sebastian said, the occupancy actually goes up 1% for the summer despite the fact and that is our H2, despite the fact that new capacity comes in, it's going to be crystallised in June, right.

20th of June.

Yes. So I think that shows how strong the business is. Cruise is really absolutely the strongest performing unit that we have.

This concludes the Q&A session. I'll now hand back to Sebastian for closing comments.

So first, thank you for your questions and for the good discussion. We had a very good first half year. Transformation is the main reason behind it. Unfortunately, we have the Middle East impact in -- not only in March for the second half, but for the remaining part of this year. And we are very happy that we have a successful transformation because then it would hit us very much more.

We have made some adjustment on the strategy because of AI to getting even leaner with a lot of things we can change, getting better distribution by implementing, bringing our own AI agents into LMMs and social media.

And thirdly, we very much believe in differentiated product, of course, differentiation, which are recognized by the customer and he pays for it. And by having these main cornerstones, we feel very well positioned for the coming periods. Short-term, the business will be challenging. We hope that we are so good that we manage the short-term bookings in a way that we can fill our capacity.

We have been more risk adverse than we would have been thought before, but I think it's important to be careful, cautious. And if the market is better, what market intelligence implies, then we will be able to react with dynamic products. So have been really hard weeks, but I think it's worth working hard.

Thank you.

Thank you so much, and good morning, ladies and gentlemen. It's my pleasure to welcome you to our first quarter 2026 results presentation here at the Congress Center in Hannover, where we will be holding our AGM later this morning. My name is Nicola, and I'm Group Director, Investor Relations at TUI, and I'm delighted to be joined for the presentation by our CEO, Sebastian Ebel; and our CFO, Mathias Kiep.

We look forward to sharing with you the details of a very positive start to the new financial year, along with an update on current trading and the reconfirmation of our outlook. In the interest of time, we will keep the presentation brief before we open the floor for your questions. We kindly ask you for your understanding that due to the AGM, we will need to limit the session for 1 hour. And with that, I have the pleasure to handing over to Sebastian.

Thank you, Nicola. A very warm welcome from all of us here in Hannover. The sun is shining the first time since a couple of weeks, but the snow is still outside, but we hope now for warmer weather. You know the agenda, it's very similar as you are -- as you know it. I will do a short introduction about the last quarter. We are very happy about the results. Last year, first quarter was good. This year, it's even better. We have seen an increase in EBIT of EUR 26 million despite the cost of the Melissa hurricane of Jamaica. I will talk about this later on.

And this improvement is based on a positive HEX trading momentum, but also an improvement in Market and Airlines. And we have seen strong demand in Holiday Experiences business and we have seen the right demand for our risk capacity, which we use -- which we wanted to fill as much as possible with the right margin. And you remember that the main target for the retail is also for the sales activities to fill our assets. And by having this positive momentum, we can reaffirm the guidance -- the EBIT guidance for '26 of 7% to 10% growth. And we also see this growth for the coming years.

If we go into the details, first quarter in Holiday Experiences, we were able to improve the result by EUR 18 million despite the one-off impacts in hotels. The Jamaica, you remember, Melissa, who was affecting the business in Jamaica, we had to close hotels the Riu hotels, the Royalton hotels for the whole time the first quarter, and you will see it later, we also had to cancel a significant amount of flights from the U.K. to Jamaica. Nevertheless, we have -- if we take the one-offs out in Hotels & Resorts, we would have seen a EUR 6 million improvement and without that, we are EUR 19 million below.

And exclusive of Jamaica, you see that the occupancy even in winter grew by 1% and the average daily rate grew by 5%. Cruise is very strong. We have seen a significant improvement in result despite a significant higher capacity of 16%. Occupancy were up by 3%, almost reaching 100% and having the same daily rate, an outstanding result. And also Musement and winter is not so important, has seen a slight improvement. When we look at Market and Airlines, we also have seen a EUR 10 million improvement versus prior year. This includes a negative impact of Jamaica, EUR 6 million. As I said, we had to cancel flights to the island, and this had a EUR 6 million impact.

For us, it has been important and it is important and will be important that we have the right risk capacity because with the right risk capacity, we can protect our margin. And the growth today in the future should come from dynamic packaging. And that we did that quite well in this quarter is shown by the load factor, which went up by 1%. And what we see is also the first benefit of our cost reduction program. Some special items we have seen and initiatives we have seen in the first quarter. We are really proud that we announce our market entry and open our network in Romania on Thursday, I will be there. And it will be after [indiscernible] which we opened 2 years ago. It's doing very well.

It will be the second in the market which we opened. We had a prelaunch a couple of days ago. We see quite promising demand and good margin. And again, it will help us to fill our assets in Europe, but also outside Europe. We also are increasing our River Cruise fleet. The second Nile ship had been launched, and we have now -- we operate now successfully 6 vessels. We have put a lot of effort in improving further development in our app. We, as you may recall, we are bringing forward activities on the same global IT platform.

The app was the first platform, which we not only harmonized, it's the same one. And now we do see day by day the benefit of doing so. If you look at the app today, the AI application is really a success story. And we have seen a significant conversion growth and uplift in bookings through the app. And the app is the most efficient way to book and to keep customers and to increase retention, and we are very happy. And the potential for us is huge if we compare us with best of breed. We also signed a partnership agreement with Jet2 on the Musement activity platform.

We are very thankful for the trust Jet2 gave to us to integrate the Musement platform after Booking.com, easyJet and lastminute.com, it's the fourth big wholesale partner. We don't take it for granted. It's a big obligation for us like for Booking, like for easyJet, like for lastminute to deliver outstanding products to the Jet2 customers. We are growing on the hotel side. We have a strong pipeline. As you know, we opened 5 hotels in Africa. We opened 1 hotel in Vietnam.

So these are -- especially these are the 2 regions where we are growing, and we want to grow further. Sustainability is key of our DNA. It's not a trend which may have faded away a little bit. For us, it's very important for our customers for the climate, and it's commercially a sound business case, and that was recognized by achieving the A rating of the CDP. And Mathias, if you like to go into the numbers.

Thank you very much, Sebastian, and a very good morning also from my side. Thank you for joining the call. As always, I want to give an overview about the performance, then the EBIT bridge and then details to P&L, cash flow and the balance sheet. And Sebastian, as you said, we are very pleased with the first quarter results and this first step into the new fiscal year. And -- if you look at this, it's really great that we not only have an operational improvement of the numbers, EUR 77 million, the highest underlying EBIT that we've ever seen in this quarter, but also another progress and step improvement in our balance sheet and the underlying financial profile.

Net debt improved another EUR 0.5 billion year-on-year. This includes EUR 0.2 billion FX impact, but the underlying decrease, EUR 0.3 billion is coming from all the measures that we undertook over the last 12 months. And as elements of this progress, I would like to highlight: one, we've now also taken the final cruise ship from Marella into ownership. And as you may have seen and recall, we have also repaid early the outstanding remaining amount of the old convertible 2028. And as you said, Sebastian today is the AGM where we will return to dividend payments. That is, for all of us, a very important and great moment.

So for the details, as I said, EBIT bridge, P&L, cash flow and balance sheet. Now as you saw in the front section, there's really a strong underlying development in all segments. In the hotels, please remember the impact that Jamaica has. Second, that we had a positive one-off last year of around EUR 15 million. We also called that out. And against that, we have the results in this quarter. So overall, an operationally positive development and a negative impact through these one-offs or the not repeat of one-offs.

Then you see the very strong development in Cruise. And I think it's really great to say not only the capacity addition and the earnings that come from that in TUI Cruises, but also the constant improvement in Marella and in the operational development of TUI Cruises. So alone, the rate increases in Marella for the winter, we talk about 5% again. I think with the ships that we have and with the concept, that's really a fantastic achievement.

Musement, really good development, strong cost control. And then as Sebastian mentioned, even despite the impact that we also see there in Jamaica with the long-haul business, a very strong operational development, and it's so important to manage the capacity, one; and second, to make sure that we continue to deliver in our own assets and business in holiday experiences. And with the EUR 77 million, a really strong start into the year, EUR 26 million more than we had the year before.

Now to the P&L, two things to highlight. One, it's the first underlying result, which is positive pre-minorities in this quarter. In tourism, you normally have a negative result, also operationally in the winter. So this is even more so very pleasing to see. Also as a result, our loss per share halved effectively for that quarter year-on-year. And one contributor to that is another improvement in the interest expense that comes from all the measures that we did, in particular, the lease portfolio restructuring and taking the ships and ownership. So that's another EUR 10 million improvement that helps us to reaffirm our guidance of EUR 325 million to EUR 350 million.

On this number, please remember that most of our payments dates for financial instruments are more in the second quarter, so it's quarter 2, quarter 4. So we can't take this times 4. There's a higher interest payout in Q4 and Q4 compared to Q1. And -- with that to cash flow and cash flow is in line with expectations.

The very important element is that the structural savings that we worked on and that we achieved interest payments, the fall away of the regular contributions to the U.K. pension scheme and a reduction in the lease and asset financing repayments, that helps to offset the higher investments that we wanted to see in the hotel segment and that we need to do in context of the Boeing delivery portfolio. And all in all, a EUR 50 million improvement in the first quarter on the cash flow side.

Coming to the balance sheet. And as I said, the EUR 0.5 billion improvement is driven by the improvement that you see in the lease portfolio, aircraft and ships in particular, and includes also EUR 0.2 billion FX movement. Now this strong performance and the strong advantage, we will not see this coming and going through the rest of the year because we will see more aircraft being delivered. I think this year, Sebastian, we talk about up to 15, maybe a bit more of planes coming from Boeing.

So that will -- because they directly move on balance sheet, impact that. But overall, we continue to see a further improvement of net debt in the full fiscal year. And concluding from my side, because we got the question a lot about the mechanics for the dividend payments. So today is the AGM. We put that to road show. Shareholders are expected to approve the dividend payment. And then tomorrow, we will pay into the system. So our shares go ex dividend. And then on the 13th, there will be the payment date from the system to shareholders.

And with that, back to Sebastian on the way forward, how our bookings and the guidance look like.

Thank you, Mathias. So a good start into the new year. How does the future look like? What do we expect? If you look into Hotels & Resorts, we do see that the available bed nights will significantly grow in the second quarter, but also for the full half year. The occupancy for the second quarter is on the same level like we have seen last year. This includes -- that excludes the Jamaica effect. We are with 4% below last year when it comes for the second half year. That is not a concern to us because we are still in the ramp-up phase when it comes to Jamaica.

But also, what we do see, by the way, this is also very valid for Markets + Airline. We see a late booking trend. The available -- the average daily rate increase is about 3%, which is a healthy number also to cope with the cost inflation. On Cruise, the outstanding picture remains. What we do see is that the capacity growth is getting smaller, but it's still significant. Occupancy is 4%, respective 3% in the second half up. And you should recall that the ships are 100% full. So this will further reduce to 0. But what we now can do is to optimize the price because we are so well ahead in being booked the ships.

Musement, we expect a mid-single-digit growth for experiences. And this in a market which we do see is a very good result and shows that Musement is doing an excellent job. When it comes to Markets + Airline, and I would like to start to reiterate again, we slightly reduced our risk capacity, it's all about to sell the risk capacity, flight, hotel owned assets with -- in a way that we protect margin. The growth should come through the dynamic products. And by having said so, we will see a winter on the same number as last year, especially when we take into account the last-minute business.

What we do see is -- I just look, for example, for the number of yesterday, we see that after the strong winter we had where the footfall was significantly down for retail, we see that the weather has normalized in the last 4, 5, 6 days, and therefore, the business has immediately picked up significantly. And for summer, we are slightly below last year. Also there, we are very confident that it will move into the same level as last year. And the focus is on protecting margin and the focus is on filling our risk capacity to fill our aircraft and our hotels.

We are well hedged, as you can see, and the hedge position gives us an opportunity with today rates. And by having said so, we can reconfirm the guidance, the increase in EBIT by 7% to 10%. And as I said, a good start in the first quarter. We are confident for the second quarter, and we also expect a good summer. There's one chart left, the summary. And just to repeat, both sectors support each other.

The vertical integration is -- makes our business model strong and resilient. The marketplace benefits from the exclusive products and the Holiday Experiences benefit from the strong sales. And together, we protect revenue and margin. And as I said, this should bring us to the ambitious growth guidance we have given. And therefore, we also could reiterate not only the dividend proposal for today, but also for the coming years, 10% to 20% of the underlying EPS.

Thank you, Sebastian. Thank you, Mathias. We are now available for Q&A.

[Operator Instructions] Our first question comes from Karan Puri from JPMorgan.

I've got two quick ones. One on the summer trading that you just mentioned. So tracking at minus 2%, how confident are you to hit your 2% to 4% top line growth guidance in that context? If you could take that one first, and then I'll move to the second one.

As I explained, we are confident that we will achieve last year's level.

And on the revenue -- and I think you also asked about the revenue guidance, 2% to 4%. I mean if you look at Q1, there is -- on constant currency, there's a 1% improvement. Now we will also see increase of sales from our Holiday Experiences segment that also needs to be factored into this revenue guidance. And that's why we're overall reiterating our guidance also on the sales side this morning.

And what I would like to remind you, the strong growth in TUI Cruises, you don't see in the TUI AG numbers, not in our numbers because the revenue is not consolidated. So this significant impact is not impacting TUI. So this is outside the consolidated TUI revenue number.

Yes. Understood. And second question was actually on your partnership with Mindtrip and other LMMs. Is it possible to maybe share some early indications of progress made with these partnerships? Anything on the distribution unit economics will really be helpful here.

Yes. So distribution is changing. We very much believe in retail. That's key, and it's commercially a sound case because the margins and because of the early sales are strong. We're seeing and expect a very significant change from web to app and to LMMs and social media. And we put a lot of effort and investments into creating an outstanding app. We have releases every 2 weeks. It's really improving a lot, and we do see that in the numbers -- growth numbers in the significant improved conversion.

So every 2 weeks, you will see new applications, including AI applications and new ways of search. We have started collaborations with LMMs and Mindtrip. We have started to sell to ChatGPT. So I'm really proud that we're there on the [indiscernible], on the lane to overtake. And at the moment, we do see that we get the first numbers of traffic. It's still low. It's still more that people get information, but they can book with us as well. And we really want to use this channel as good as possible.

The next question comes from Andrew Lobbenberg from Barclays.

Can you just help us understand these hotel KPIs with and without the Jamaica impact? I mean, are you able to tell us what the occupancy is in Q1 and Q2, perhaps with Jamaica included, so we can see the sequential trend through to the second half? Because I'm seeing some investors concerned about what that means for the hotel trend, but that's not quite understanding how you're presenting those KPIs.

And then just the second question would come down to the reduced interest costs and the impact of bringing assets back on to the balance sheet. Can you just explain whether these gains are one-off or whether they are sustainable? Are they onetime things as you bring the assets on balance sheet? Or are they all enduring improvements to the interest cost?

I think we have stated that the Jamaica effect was EUR 15 million on the Hotel's side, and that should be reduced to 5% to 10% in the second quarter, which means that a significant part of the 4% is based on the Jamaica effect. And there, we would expect till the end of the second quarter, this should be very much normalized to it. And that's why we feel confident about the occupancy for the hotel business in general.

Yes, and on the interest results, so what you see for Q1 versus last year is really a structural improvement. And we had last year and -- a better interest environment with regard to interest income. And also, we had a smaller one-off during the year that we also published that was in H2. And that's why the guidance, the lower end is in line with what you saw as a full result in last year. But the improvement, that's what we worked on is really structural. So it's replacing leases from the past that are not with regard to market terms that we can get today with more attractive instruments or with cash proceeds.

The next question comes from Leo Carrington from Citi.

If I could ask two questions, please, both really about your demand. Firstly, in terms of the demand against your risk capacity adjustments, can you give a bit more color of what these -- what the shape of these adjustments was? Is it certain destinations, certain dates or across the board? I'd be interested to know how you're planning for this year? And then secondly, in terms of how we should understand consumer preferences, what's your view on the differing trends between the hotels which is perhaps more competitive, later booking trends versus cruise, which seems to remain very strong. Is it the product? Is it demographics? I'd be interested.

As you have seen, the occupancy in Markets + Airlines in the first quarter was up 1%. This, you can put into -- relation to the slightly lower number of customers. What we have taken out and capacity is not our own flying, not our own hotels. It's third-party commitments. We had full chargers, allotments, guarantees and that we have reduced significantly because we also believe that this capacity is available dynamically. And we wanted -- just wanted to make sure that our risk capacity, the ones which we produce ourselves, we can fill for a decent margin. So it's all about third-party capacity.

We haven't seen a negative impact on the hotel business, except the Jamaica business. And this is not a surprise. All the hotels, the Riu hotels, and the Royalton were closed. The Riu hotel started to get opened in January. The Royalton hotels will be opened just before Eastern because they use the time for renovations. So this is an impact which we couldn't avoid, we do see that the business is healthy. Of course, there are markets which are stronger than others. What helps is the international sales organization we have, if one market is less good, the other one is better.

When it comes to consumer preference, one thing is clear for us. That's why we invest so much in international sales activities. We want to make sure that if one market is weaker, we can get the customer from somewhere else. Therefore, the share of international customers in our own assets is growing, and that gives us the confidence to really see, again, outstanding numbers there. If you look at the overall demand, the one group which is buying later are the families and also this is understandable to see.

Can I just ask a follow-up on that first point on the risk capacity? Do you get the sense that this -- the allotment say in the hotel capacity that you've not taken on this year has gone to other tour operators? Or is it possible that you could actually fill it dynamically later in the season?

Yes. That is very clearly the concept. It doesn't mean that we don't have a great relationship to the hotel. It's sometimes also the wish of the hotel. It's the wish of ourselves because then it's up to the hotel -- hotelier to know what is the best price he want to offer to get the volumes. And this uncertainty, what is the right price we take away if we still work with the hotelier on a very exclusive basis, but having a risk capacity, which is mainly -- is not there anymore, but the capacity we use is by getting dynamic rates. So the model is in the longer tail changing to dynamic. And this is something which we will see huge benefits in the future.

The next question comes from Andre Juillard from Deutsche Bank.

Two questions, if I may. First one on the source market. Could you give us some more color about the trend you are seeing in the U.K. and in Germany, which are your 2 first markets? And in terms of destination on the other side, you are mentioning that Greece, Balearics, Turkey and Egypt are very strong. Could you also give us some more color about the trend you are seeing if you have some new destination emerging? And also what is the most profitable one or the one on which you see the strongest operating leverage?

I will not give you the details which one is the most profitable one. I do apologize for that. Egypt is very, very strong. Bulgaria and Tunisia, so the lower cost countries are strong. Greece and Spain are stable. Turkiye is suffering at the moment because of high inflation and low currency devaluation. So -- and it's more a family destination. If you look at our clusters, we do see strong demand for Sansiba. We also see good demand for the Middle East. For Asia, we see less good demand for the U.S.

And if you look into the main markets in Europe, the Eastern European market, and that's why we are so happy to move into Romania. Germany and the U.K. are stable, but with significant competition. Germany, as I said, will see a catch-up because we had since the week before Christmas, minus 5, minus 10, minus 50, 0.5 meter snow and the footfall was really 1/3 of what we had seen before. So that's why we expect that Germany will be stable or will see a slight growth. And I would say that the U.K. market is -- the sun and beach market is -- especially mid-haul is strong. On the long haul, there might be some more weakness, but that's what we have to wait for.

Do you see anything specific on the source market and destinations that was not anticipated or something which is really scary or anything special?

I mean we are happy about the strength to Egypt because we benefit from us. Turkiye is a concern, but I mean, that's the good thing if you are more and more going to dynamic, if you can bring clients from A to B that a lower demand in one destination is -- needs some replanning but didn't kill profitability. So that's good. I mean maybe it will be interesting to see how the demand to North America will develop, but we don't fly to it. It's very small. It's not relevant for us.

It's nice to have, and it clearly has an impact on the revenue numbers, but it's from a profit point of view very, very small. I think we have flight per week to Melbourne in California. That's all. So there is no -- and one hotel in Miami, the Riu Hotel. So the exposure is very, very minimal. But of course, it has an impact on the revenue side.

The next question comes from Kate Xiao from Bank of America.

First, I want to ask about your river cruises product, which you kind of highlighted as part of your Markets + Airlines on one of the slides. Can you talk to us about the market opportunity there? It looks like you guys are adding capacity. And what's your sense of the latest demand and pricing trends? Is it healthy? Is it stronger or weaker than ocean cruise market? That was the first question.

And the second question on your Musement partnerships. You're highlighting kind of new partnerships with Jet2 on top of existing partnerships. Can you help us understand the long-term market opportunity with these partnerships? And how is the economics looking compared to kind of your own traffic? And also over the long term, what's your margin goal for this business? Obviously, you guys are ramping up profitability. What do you think is the long-term realistic margin goal theoretically?

So on cruise and river cruise, the demand is big. I mean there's one major difference for a new ship, the profit is EUR 60 million, EUR 70 million for a river ship with maximum 200 passengers compared to 3,000, 4,000 is limited. But nevertheless, it's a great product. You get access to customers to bring into the TUI ecosystem, and therefore, we like it. So strong demand. The good thing is, and you may have heard a lot of orders, but the restricting factors are the slots in the harbors, in the city harbors.

And that protects very much the margin, and we are very happy to own slots, and therefore, it's a very stable business. Can it scale to 10 ships, 12 ships? Yes, but it's still 10 ships with 200 passengers and which is just half the size of an ocean cruise ship. So it's nice -- it brings -- it's profitable, but it's good, especially good for the TUI customer ecosystem. On the partnerships, yes, you're right. It's 1 out of 4, and there are smaller ones as well. And I think it's great if our partners can sell more to their customers, profitable, and it's good for us as a producer.

We have 2 focuses -- or we have a lot of focus, but 2 main focus on growth. One is through the wholesale partnerships. Second, on the own products because our business model or it could be, but we have decided not to do is not to sell the long -- I mean, we also sell the long tail, but that's not where we've spent the marketing money for. We spent the marketing money to sell the own products where the margin is not 10%, not 12%, but it's 30%, 40%. The catamarans, electric bicycles, or whatsoever, the special entries into coliseum and other things to really where we have created with our own buses, for example, own products because there, we have the big customer base. We can fill them from the first day onwards and they bring us good margin.

So if we say 7 -- or 5% or 7% growth, it's mainly on own products and less focus on the long tail that comes along with the customers we have gained. And we hope, of course, if the customer who lives in Berlin wants to buy a theater ticket in Berlin, they also use our app. But there, the margin is EUR 2 or EUR 3, very limited. When this customer, for example, buys a transfer at Mallorca Airport, the benefit is EUR 20 or EUR 30 or EUR 40. So that is -- it's not scale. It's really -- of course, it's also scale, but its scale more from B2B, and it's more really incremental significant margin through own products.

[Operator Instructions] The next question comes from Richard Clarke from Bernstein.

Three, if I may. Just want to kind of loop back on the philosophy around the shift to dynamic packaging, and I think you say it's around sort of preserving margin. If we were to look next year into sort of 2027, I guess with -- you'd expect lower lease costs on planes, lower fuel costs with the weak dollar. And so the profitability of flying is probably going to increase for you. Could that possibly lead to a lean back into risk capacity? Or is the direction of travel always going to be towards more dynamic packaging irrespective of what the cost environment is?

And then second question, just on cruise. I guess, pricing up 1%. You said in your prepared remarks, you see some opportunities to push a bit harder on price maybe beyond the current capacity growth. I guess you must be selling cruises more than a year out. So what is the pricing looking on that? Is there some expectations maybe into 2027 that we can start seeing cruise prices up sort of mid-single digits. And then lastly, a very quick one, but do you get any sense that you're losing any demand because of the World Cup in the summer of this year? So any sort of U.K. or German customers traveling over to the U.S. for the World Cup rather than maybe taking a TUI holiday?

Thank you for the question. It's maybe an aspect I didn't get. We are in the middle of the transformation in Markets + Airlines. And the transformation is on the Market side and on the Airline side. On the Market side, it's especially to connect NDC airlines. To give you an example, last week, we -- or on the weekend, we integrated Finnair NDC into the Nordic system. And by getting this contract, we have seen a significant uplift for lower distribution cost. Of course, Finland is a small market.

But with this thing to get more and more carriers on the lowest price tariffs, which we haven't had yet. This will help us to get the content and to get the content for the best price. The second part of the transformation is Airline. And in the Airline, we had 5 airlines or 6 airlines which were run separately. We brought the airlines together as one airline, two AOC and U.K. because not being part of the Europe and the European airlines. We have seen by bringing it together on the operational side, a huge cost improvement.

If you look at our denied boarding compensation, it's 1/3 of what it had been because now the Belgian -- if there is an AOG in Germany, the Belgian airline that can fly and so on. What is still missing is the one commercial piece. So if you are a Spanish customer, you don't find a Spanish website where you find the flights to Frankfurt and to London. That's -- we are just doing it at the moment, as I speak, to bring this into the market. And we lose 20% or 30% of the demand because we haven't run the airline like an airline.

And by commercializing the airline, and -- we will see despite the operational benefits, which we really realized this year, we will see the commercial benefits from next year onwards with a significant impact for the summer. On price in cruise, if we would -- I mean, when we increased the demand in the last 24 months and not the demand, the demand as well, but the capacity by 45%, 45% increase TUI Cruises demand. And I must say I was skeptical about not selling the volume, but price. But it was selling by far better than we had anticipated.

And if we would have known that strong demand, we could probably have risen the price by 3%, 4% more. Fortunately, we are very well sold. So what we do now on the pricing side has an impact, but because the volume is small, the impact is limited. So the big impact will be in the coming years where we are good sold above the years before, but still a quite significant volume to be sold.

And the last question -- the World Cup, I don't know. The effect had been strong 15 years ago, or I would say, 16 years ago. It has become slower -- smaller and smaller year-by-year. It -- one reason is 16 years ago, there were hardly big TV screens in a hotel or in your hotel room and you haven't had the live transmission. Today, it's very different. People can watch the game they want to watch on an iPad or on the computer. And therefore, I would say, yes, there is an impact, but this impact is small.

The next question comes from Cristian Nedelcu from UBS.

The first one maybe on the Markets + Airlines, the splitting capacity dynamic versus risk capacity. I think it used to be 15% dynamic and 85% risk, I don't think it changed that much. But could you tell us how do we think about this year? We think about low single-digit declines in risk capacity and 8% growth in dynamic capacity? Or what's the range of outcomes for this year? And the second one, could we go a bit in more detail through the EBIT bridge in Markets + Airlines year-over-year?

You have the forecast or the outlook for strong growth versus the EUR 200 million EBIT last year. Can we talk about the moving parts? Because we have the cost cutting 30% of the EUR 250 million that helps. But in the same time, we do have some wage inflation. We do have some inflation, I would guess, in your overhead and distribution costs. Your book revenues for the summer are down 2%.

Now I'm making an assumption here. If the overall revenues are down 2% year-over-year, there's EUR 400 million lower revenues in the tour operator. How much are you cutting from your capacity cost year-over-year on accommodation airline and so on? Could you tell us a bit more the moving parts there? And what gives you confidence that you can indeed grow the EBIT in a strong way year-over-year?

First, our main profit, and therefore, I'm always a little bit puzzled by so many questions comes to Markets + Airlines. The main driver for us is the Holiday Experiences business and the distribution makes sure that our assets are filled well. When you look at the dynamic share or the decrease in the risk capacity, it's not on our own assets, it's on third-party assets. So it has no impact on our own assets. And therefore, in the first quarter, for example, the load factor on our airline has even increased by 1%. If you ask about the split, we are not talking about a 2-digit percentage. It's a small or medium big 1-digit percentage.

Towards 20%, maybe.

Yes, towards 20%. The future growth will come, of course, from dynamic packaging. And we -- due to the cost measures, we want to and will reduce the overhead distribution, IT cost in relation to the revenues.

We have no further questions. So I'll hand the call back to the management team for any closing comments.

Good. So we have had a good start. We are confident about the future for this year. Therefore, we could reconfirm the guidance. And we will benefit from all the measures we have taken, right capacity, a better cost structure, higher efficiency. And we are middle in the process of transformation to prepare the company for growth. And therefore, we are very confident with the guidance we have given.

This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.

Good morning, ladies and gentlemen. A very warm welcome to our 2025 results presentation here in pleasantly mild London. My name is Nicola, and I'm Group Director of Investor Relations, and I'm here with our CEO, Sebastian Ebel; and our CFO, Mathias Kiep.

We look forward to present a financial year with record results, and we will give an update on our strategic progress. We will also unveil our new dividend policy and give an update on current trading as well as on our outlook, expectations for the next year. And as always, after the presentation, we will open the floor for your questions.

And with that, I have the pleasure to hand over to Sebastian.

Thank you, Nicola. And it's not only pleasantly mild, it's also sunny outside.

Definitely.

So, a very warm welcome from all of us. We are happy to present our results this time again from London. You are familiar with the agenda. I will talk about the operational highlights to give an update on the strategy, and Mathias will go into the details of the numbers and the trading outlook, and I will summarize our presentation at the end.

It was an excellent year for us, a record performance with a strong increase in EBIT. The integrated strategy delivered these strong results. The distribution made sure that our assets are full. And we used also the time to accelerate our M&A transformation. We put a lot of effort into it, and I will talk a little bit more in details about that.

And now we can monetize the M&A transformation to show you the way to the 3% EBIT margin we want to achieve. We have very clear growth targets for '26, supported by a positive trading momentum. And that convinced us and we were convinced to start with a dividend policy. We know that our shareholders for a long time haven't seen dividends, and it's more than fair and the basis we have led with a good result to start immediately with a dividend and to give you some more information on the dividend policy.

If you look into the results, very, very strong Hotels & Resorts business, strong increase. We had not a real increase in bed nights that will slightly change next year because of closure of renovation. We had an outstanding occupancy all over the year, 84%, and we had an increase in the daily rate.

Outstanding Cruise result. And not only TUI Cruises, but also Marella. We are extremely happy about the development of Marella. And therefore, we could not only in the fourth quarter, but in total, achieve a significant improvement. We had a significant growth, and we will see more growth this year of the available pax days, 100% occupancy and an increase in the daily rate.

A good development also from Musement. And if you remember where Musement, which is a marketplace for experiences, was at a couple of years ago and where it is today, it's a great development. And we put more efforts in selling the right products into the customer base than acquiring new customers, which would cost us in the beginning investment and money. What we do is, we focus on own products, building their own product base and grow with this. So, a very good development. Holiday Experiences, EUR 191 million versus prior year.

A different picture on Markets & Airlines, where we had a roughly EUR 100 million decrease in results. As said, we invested heavily into the transformation, IT investment, marketing investment. We had some extraordinary impacts, some provisions we had to make. We had the peak of IT investment. For the first time, we will see reduced IT investments in this year.

As said, a lot of investment into transforming the business. This impacted all major markets, and we think we are now over the negative development, and we can see a positive development. And again, it is so important that we have the strong distribution to fill our assets.

And by the way, if I look at Marella, it's a U.K. business with two operator and flights. So the picture is two coins and the two sides of the same method. And I will talk about the transformation a little bit later.

And what drives the superior Holiday Experiences' performance? We have now a customer base of 35 million. This now for the first time, includes our unique customers in Cruise, in Hotels. And this customer base, we use for all the marketing activities to make sure that our 463 hotels are full. Our Cruise ships have a great occupancy and the Tours & Activities business is improving.

And if you look at the numbers, if you -- fourth quarter hotel occupancy, 88%. This is significantly higher than what you see with others. The return on Cruise is with 22% and 17%, very, very high and attractive if you compare it. And the take-up rate, Musement owned products, that means 30% of our market customers buy a Musement product is very high, and it's very important because there, the distribution costs are low or not existing. So, this funnel model drives the great result in holiday experiences, and we try to broaden the funnel to support the growth in Holiday Experiences.

On the other side, it's very, very important to have our own products, because with our own products, we achieve great customer satisfaction, which is superior and at the top end of products and a very high retention rate. Customers who come back, you don't need to buy in the market again. And to have a retention rate of 40 years, we calculate on 2 years. If you were to do it on 3 or 4 years, it would be significantly higher. It's important, and they come again to us, because we have curated products they trust in. So, this is the driver for our superior Holiday Experience performance.

If I look at our strategy, the market is growing. It's growing stronger outside Europe, but also Europe is a resilient market. There are areas in Europe where growth is significantly higher like Eastern Europe. You know we are in Poland. We went last year into Czech, doing very well. Now we have the soft launch at the moment in Romania. And there is significant growth in Southern Europe. We grow nicely in Spain, now in Portugal, but also have started to enter the Italian market, all on the same platform we had. And the good thing is that the demand is especially there for unique brand-led leisure products. So, strong brands with great product quality lead the market and the profitability.

TUI, you have seen that before. We have now the fourth consecutive year with significant profit growth, and we want to deliver this also in this year. And time is running so quickly. We are now in the third month of the year, time is flying by. And this is not only the ambition for this year, but for the foreseeable future.

Today, more than 80% of the profit come from Holiday Experiences and only 15% from Markets & Airline. And this gives us two opportunities to grow nicely and solid in the asset-light model with Holiday Experiences and to take the big opportunities on Market & Airlines, because if we compare with best of breed, there is a lot what we can achieve and what we can win in the market.

And therefore, we want to deliver not only growth, but profitable growth in Hotels & Resorts and Cruises and in TUI Musement and in Market & Airlines. And this is based on what we call the TUI ecosystem, what we have built for all our customers, our database to get better marketing, to have higher customer retention and to lower significant distribution costs. This is also supported by what we do with AI. We have seen and we do see AI as a disruptive technology, which supports us in producing better products, new products, which we can distribute on global platforms.

You may recall that TUI was a company where we had own production, Markets & Airlines, per country. We had five Airlines. We took a lot of effort, a lot of investment to bring this together, and now it's the time to get the benefits from it. This is only possible if we have a performance orientated organization. This has been a big, big task to get the organization aligned with the new org design we have.

And last point, sustainability was not something which was on work with TUI. We very much believe it. It's important for the customer, but we also see the commercial benefits, and that's why it's as important on the agenda than it has been before.

If I look at the Hotel division, 18 new hotels, the return, excellent, the CSAT, so the customer satisfaction or the NPS are outstandingly good. We have 70 hotels in the pipeline, mainly management. Again, when sometimes we got the question, why is our revenue not growing bigger, because we get the management fee, not the revenue, especially growth in Asia. It has now got a momentum, and we are really proud of what the team there has achieved. But it's not only Asia, it's also Africa and in other areas.

We have very distinct, with proven brands. We put effort in building upper luxury brands. We have the global mass market or mainstream brands, and we have strong regional brands. And we are less strong on the price consciousness market. There is something where we can catch up. 70 new hotels in the pipeline and with a big momentum there. And by the way, a lot of these hotels are building new distribution facilities, which also supports the future growth.

We have talked about the Oman partnership. This is going according to plan. We have started to not wait to build up the business when the hotels are there, but started to promote the country. By the way, it's in a great country. I could recommend -- I can only recommend to go there. And it's very strategic for us. We have had the proven cluster in the Caribbean. We have it in Cape Verde. We built it in Zanzibar, and now Oman and maybe others to come.

If we look at Cruises, 18 ships, great return on investment, very, very strong NPS. So, the product is loved and what we deliver is great. There is one ship, which came into the market last March, where we see now an incremental Summer effect. And there is one ship also from Fincantieri coming in early Summer next year '26, which will support our growth. And also because we never talked about it so much, Hapag-Lloyd is doing very well. They had some impact when there was the rerouting. There is no routing this year, hopefully. And that's why they also have significantly improved.

And you know that we have two ships on order, '31, '33. And we are very, very happy that we also have options which we can decide on in the coming months. And it's a great business and with a great prospect, and Mathias will show it later.

If we do see that we have overall a 45% capacity increase if I look at 2 years and the load factor is 5% ahead, only give me one conclusion we could have sold for higher prices. But that's a luxury problem.

TUI Musement, as I said, the transfer part is not growing and that the growth comes with third party. But there are two areas where we are growing: one, enhancing our multi-day offering. We are just at the start. We talked about new products. We just brought this product into the German market. I got the figures from last week. It's accelerating. The U.K. market will follow soon. We have high expectations about the growth we can achieve there. So, it's the production facility for multi-day Tours offering a huge market also in Southern Europe.

And of course, the offering and experiences. Yes, Sun & Beach is dominant, but we are increasing city footprint. For the first time, I could book the Heathrow Express yesterday and I haven't booked theater or restaurants yet, but the offering goes into the city. The focus is on own experiences because that's where the value is in the TUI collection offers, and it's about up and cross-selling. And that's why we think about significant growth also in the midterm.

If we look at the market, and it was a -- maybe it was a painful process when you do local production, local organizations, you centralize, you bring together one selling platform, one buying platform. It was a huge investment with things to overcome with time delays. At the end of '26, we will have every country on the same selling platform, and we do see the first markets when look -- when it comes to efficiency, marketing efficiency, a huge increase. You do things once and not five or six times. And that is why we can talk about efficiency and cost optimization.

And it's the same with the Airline side. We had five airlines, which was not the good setup. Now we have -- we are only talking about one airline with a commonality in all aspects. Before we had five different hand luggage rules and so on. Now it's one. All the things where you would say you should have done it before, but it was quite a challenging thing to bring everything onto one system.

Operationally, it has helped us a lot. I would say, if I look at reliability, I look at it every day, the reliability and therefore, the denied boarding compensation is at historical low in the first weeks of this year. So a lot of benefits. And now it's about the commercialization to make sure that we lead the airline as you would lead a commercial independent airline without giving up the synergies we get from the market. So, that's why you see the two wheels combined for net, but business in it means. And we have the clear target to increase the underlying EBIT margin, and we expect to get a good step forward this year.

What are the building blocks, the levers? And these are examples, but the main -- the most important ones. Of course, the Risk Right. A good example was Nordic, which we turned around, has been profitable for the -- since a longer time last year, and we see a good development. This year, we had to define the Risk Right capacity and the growth should more and more come from Dynamic.

You know the Ryanair case, which really -- which went live last December, but took momentum in Summer, which is now rolled out to other destination. We have a lot of NDC carriers, which we bring into our ecosystem even before. Now Christmas should have a significant impact on our -- positive impact on our business. Others were ahead of it.

Product Differentiation. It's key. We want to increase, and we are in the process of increase from 45% to 60%. We do a big step forward, because we do see this is the reason to buy with TUI and these differentiated products give us higher margin.

Customer Lifetime Value Management. It's something where we put a lot of effort in to bring customers into the same database to define the methodology, how we not play with the customer, but how we use the opportunities and we are -- and to optimize distribution costs.

Airline Growth and Airline Commercialization. One thing was very clear that we have a network and a -- network which gives us a lot of opportunities to improve. We had a fleet which were due to all the delays, not optimal. Like last year, we had, again, a significant cost on not having the Boeing as we wanted to have. There is now the clear expectation that for this year, we can add the promised amount of aircraft. But again, last year was not what we had anticipated to get. Airline optimization, very important point.

Operational Excellence, and this is now where I'm really getting excited. We put a lot of efforts into the system to push direct sales to get free traffic to make the customer buy more often. And for the first time, we not only can tick mark that we have taken the actions into place, but it started to be commercial beneficial. And it's very clear. If you have a 10%, 15% share of app, you see how big the opportunity is looking forward to decrease the distribution profit.

What helps us a lot, and I will put some more information -- give some more information later is AI. AI is a game changer when it comes to production, when it comes to product quality, when it comes to how we sell products. And this only works well when we take the opportunities of global platforms also into the cost arena. And therefore, we are now able to deliver and to talk about cost improvements.

The cost improvements will hit us for the first time this year '26. Last year, again, we had some extraordinary still like the Boeing effect, but we have had all the investments for the first time, we can reduce IT investment and to harvest what we have done. One thing is clear, we will stay and we need to get even a more IT-led company. And the earlier and the quicker and the more drastic we change, the better it is for us.

We have -- the plan is EUR 250 million cost reduction, 60% on overhead cost reduction, so where we -- you can count, I've saved this or that. 40% operational excellence. These are things which we also can, of course, count and measure like the optimization in marketing, online marketing cost, of course, we can count, but there are thesis which we have to prove that we are on a good way there. We have these two buckets, and we want to have this realized in the next 3 years, and we try to even bring it forward to be prepared whatever happened in the market.

AI is changing it, a lot, the world, but it's also changing a lot the travel business, moving into Agentic search, improving how we produce the content and to have better content to improve the customer experiences, which is amazing in Nordic. You have customers who want to talk to an AI agent and not to a personal agent anymore because they rely more, trust more the AI answer, hyper-personalization with all the data we have. It's a huge amount, but to get the right conclusion, AI helps a lot, and it further reduces cost.

And therefore, TUI is changing into an AI-powered organization. And we want to be in all front doors with all the LMMs. We have made you programs. We now sometimes wait for the LMMs to connect us, because they have to do some more homework than they had thought. But the Mindtrip example is something to see and to show how ready we are, and we will benefit from our strong brands and the unique products.

What does it mean? Concrete? We are working with main key partners where there are big communities like in social media, like selling platforms, but all LMMs and Mindtrip is a good example of how this could look like. That's a huge opportunity to move away from being very much dependent on Google and others to more spread to others and to get into new segments. We have not been strong in the Generation Z, which is using this very much, and that gives us huge opportunities. But it's tough and a lot to do.

AI for our customers, how the customer search on our app, what he gets as content, what he gets not only when it comes to pictures, videos, translation, trip planning, a lot of enhancements we deliver 2 weeks -- by 2 weeks. I remember times when there was a release once in 3 months and in -- yes, per quarter, then per month. Now we are releasing every week something a new, including voice, chat agents and so on.

And customers, our customers love it. It only works if we get the support and the excitement I have, the management team have with our colleagues. So, we spent a lot of effort to bring this new world to our colleagues so that they are all excited and they are, because we have seen the huge demand of, for example, Microsoft Copilot, and we, of course, support that very much.

What do we see when distribution is changing? And we do see that there is a split of customers which go more and more brand specific. Therefore, differentiation is so important and the exclusivity is so important. And on the other hand, customers who go through LMMs, and sometimes they come from one side to another. Therefore, to have the TUI AI concierge agent who supports the customer is so important, and it's about a partnership, but it's also about optimizing the search, how we search the optimization of engines who answers. This only works if we have an end-to-end view on customer data -- on our customer data. And it only works, I think that is still underestimated if the data -- not the data, the content the customer sees is trustworthy and can be verified, one of the benefits of the direct contact to suppliers we have.

I would recommend that you look at Mindtrip that has been the first showcase and it has been -- not it has been -- it is a successful -- not showcase anymore, a successful case.

As I said, sustainability is in our hearts. We have made good progress last year. Of course, it gets always more challenging in the next year, but we are well on track to deliver our 2030 targets. So overall, strategy is very clear, growth on the assets filled outstanding well through our markets and monetizing the investments we have made in Market & Airline.

And now to the hard numbers. Mathias?

Thank you, Sebastian. Very good morning from my side. Thank you for joining the call.

And how does '25 look in detail? We've already published our numbers mid of November, where we upgraded our guidance and for the full year '25. And so, let me just share a couple of key items for P&L, cash flow and of course, the balance sheet. Then as Sebastian said, we have announced a new dividend policy going forward. I'll come to that in a minute before I come to trading and outlook, short term and midterm, how does this strategy translate into building blocks for our future growth.

Highlights '25, very clearly, revenue growth, again, 4% plus. This shows the high commitment of our customers, the high priority of spending for holidays. Underlying EBIT, as we announced in November, increased by 12.6% on constant currency rates and 9% on actual rates. Our net debt, as a result, improved by EUR 0.3 billion down to EUR 1.3 billion, and the leverage came down again towards 0.6x, which is one of the lowest rates the company ever had and the lowest rate that the company had over the last decade. So that's something we want to continue going forward.

And while we think we expect the business to grow another 7% to 10% as a result of the strategy, which just been explained, there are clear building blocks to get there. We think it's also now time to start with the dividend policy and already start with paying this for '25 on the back of the strong results. And we think this 10% to 20% going forward thereafter, that's a very good balance of investing into future growth, deleveraging the business going forward and having an attractive capital return for our shareholders.

Now in detail, what is the summary for '25 P&L, cash flow and balance sheet. Again, you see here the footprint of our '25 result, strong contribution from Hotels, from Cruises and from Musement. Musement is also very attractive in terms of scaling into all products and also being more efficient in how to deliver the service to our customers.

You see Markets & Airlines. It's with the decrease. I mean, this is very important to put into this context of investing into the transformation and making sure we get the benefits going forward, and we are in a competitive situation. We've talked about the Boeing delays. We also talked about the one-offs that we saw EUR 20 million alone from covering maintenance related to the re-fleeting already in '25. So I think that's how we would like to put this into context, strong cost discipline in our central operations and then the result of EUR 1,413 at actual rates and EUR 1,459 at constant currency.

Now details to P&L. What is of interest? I think there's two elements. One is EPS, the key number for the dividend policy going forward, improved by 25% year-on-year reported and more than 30% on an underlying basis. This is really a strong result and is absolutely key for us that we translate our operational growth also in growth on a per share basis.

Second is, and that's something we will see on the cash side. This has supported really well is the strong improvement on the interest side, well beyond our expectations that we had 12 months ago, a lot of optimization work, and we'll come to that. This is a cornerstone of our new dividend policy, because we see that all the investment into financial discipline, they track to gain traction. And on the back of that, we get really competitive terms, and that's really supportive to our interest result.

On the cash side, very solid and robust performance, again, a key pillar for the future dividend policy and for starting to pay this already for 2025. When you look at this, strong improvements in the dividend received, more than EUR 200 million more than in the year before. That's as we discussed, in particular, coming from TUI Cruises, and it's very important for us that the strong performance in Cruises also translates into cash payments to us as a shareholder.

Second is the strong improvements on financial costs. So interest result went down, but also pension costs started to decrease. You may remember that we have been able to fund the U.K. pension schemes, and we expect '26 that we don't have further payments into that. These are key pillars to also fund our future investments. Because more investments that we need, one for, to grow our Hotel business further, really strong profits, the second on the delivery of the Boeing portfolio, that's something where we need some funding for and structurally, we worked hard to get this from these two items, plus, and that's the other point you see here investments and lease and asset financing amortization. This is in line within guidance.

But we expect that in particular, lease and asset financing, all the investments that we did structurally in '25 will pay out -- pay off in '26. And on that basis, we'll have a strong improvement of that number, which is then the final pillar to look at our increased investment for '26 and going forward.

Now on resulting balance sheet, as I said, improvement by EUR 0.3 billion. What is important and what is great for the further structure of the balance sheet is that some improvements we did also in November. We paid back the remaining outstanding amount of the older convertible, that's EUR 120 million repayment that we did out of existing cash resources that will help our gross debt, something which is important for the rating agencies, but also, of course, something which is important for interest result. And interest result, we need to manage because a year ago, we still had a higher interest income level, and that's something that we need to work against.

Second point is that because of the Schuldscheindarlehen that we did earlier this year and the agreement that we did with TUI Cruises on the refleeting and the access to the U.K. market, we ended both finance leases that we had for Marella and now both ships are in ownership, which will remove the debt amortization in the future and gives us full operational flexibilities on these two ships. And so, no indebtedness on the fleet of Marella anymore, which is also structurally a very strong improvement compared to some years ago.

Now looking forward, financial strategy, it's not only dividend policy, but it's also deleverage target. As I said, this is something which is equally important to us. And from the 0.6x, while this is historically really strong, we still want to reduce this further. And on the midterm, we want to go below 0.5x, because we think the continuously deleverage something that's really helpful for the structure of the business. And as I just explained, this also helps us to fund further investments.

Now moving forward in terms of capital allocation, I think there are three steps to look at. One is what have we delivered. And '25 record results, very strong cash flow, good results from this high financial discipline. We can start and we started to really optimize our terms, our balance sheet. And that's something we will continue to work on. This is the right basis to look at the next phase for the company's development.

And what is it? It's one, it's investments, because we have seen the strong yield, Sebastian, you mentioned this. And I think one is on the results '25, but also if you look at the strategic pillars, what is there is super attractive. A lot of investors come to us and say, can't you do more. But I think we need to find a balance. So, more investments at the same time, deleverage and capital allocation to shareholders, but there will be more investments into Hotels also in '26.

At the same time, we have seen a delay in the Boeing portfolio, which has been operationally really a challenge, one less efficient aircraft, but also renewals when you don't want to do them and all of this. So, this seems to have improved a lot. So, we expect now in '26, around 20 deliveries, which is a significant step up from '25 and all the related investments will also be reflected in our guidance, which is now towards EUR 900 million -- EUR 860 million to EUR 900 million for investments net in 2026.

And on the back of that, we have come forward with a dividend policy. We always said we will communicate this in December 2025. What was unclear, and we had a lot of discussions with our Board on this is when to start effectively with this dividend payments. Would it start with '26 for '26? Or would it already start in '26 for '25? And we have decided to bring forward to the AGM in February the proposal of a starter dividend of EUR 0.10 for 2025 on the back of the strong results, the solid cash flow structure and the improvements on the balance sheet that we have achieved.

And we think this is a very good balance overall also with this corridor of 10% to 20% going forward of underlying EPS payments of investing into further growth, deleveraging the company going forward, making sure we continue to be in a strong way and dialogue with our rating agencies and financing partners and then have the right capital allocation to our shareholders.

We have summarized that on the next chart, but the more important thing is going forward, what is directly ahead of us and what's ahead in the midterm.

And let me come to trading and the respective details of guidance now. Sebastian already mentioned it, we have a good trajectory on the Hotel side, on the Cruise side and the Musement. And I think if you look at the trading stats, the KPIs for the next 6 months, effectively, each single KPI is higher than it was a year before. So, the strong track record that we saw in '25, all the investments that we've done, the yield really attractive, and we expect that this trend continues.

If you look at the Hotels, for the first time since quite some time, we also see net additions. That's something to look forward on the portfolio. You see a slight reduction in occupancy. This is a bit of the ramp-up, which is super normal. You've mentioned the 88%.

Jamaica.

Yes. It's also Jamaica, but effectively, this vertical integration, this is what really drives this, and this shows how strong the model works, combination of having a two-operator with the Airline plus the Hotel footprint.

Same on Cruises. And another year with 13% increase of capacity, which you don't see in your occupancies even goes up. This is a really strong, strong sector.

And then, on Musement, the same. We continuously see the scaling into own products and really good development on the transfer side, both key cornerstones of the profitability of the business.

In Markets & Airlines, we see a solid winter. I think the trading pattern remains unchanged. At the same time, the early signs and signals for the Summer are also, I would say, sound and encouraging. At the same time, Summer, we will publish not now, but when we have more tangible data with Q1, which is mid of February.

At the same time, again, what is important, because a lot of investors and partners have asked us to change this, we now will report revenues going forward to make us more comparable with other players in the sector.

Now how does this translate into our guidance? As we said, we expect the business to grow another 7% to 10% in profitability in 2026. What are the pillars, before we come to the modeling assumptions on the other P&L and cash flow items? It's growth in Hotels, it's growth in Cruises. And if you consider the investments that we've done, the pipeline in Cruise, the pipeline in Hotel side that we just looked at and also the trajectory of both businesses over the last 24 months, 36 months, I think this is a clear cornerstone where we already see the KPIs today that will deliver that growth slight. It's also in context of the really strong and high absolute amounts that you already see here. So that's something where we look really -- we're really pleased with.

Musement, we expect that the trajectory that we saw in '24, in '25 continues. And again, the KPIs are supporting another year of additional growth there.

In Markets & Airlines, Sebastian explained how we look at this. We have a market where customers continue to prioritize holidays. This is still a #1 investment and something to spend for, for everyone, and I personally can only share this view.

And secondly, for us, it's key to deliver this in the most efficient way to our customer possible. So, a lot of focus on costs, a lot of focus on initiatives, and that's why we expect this business segment to deliver strong growth in 2026.

In detail to the rest of the P&L, what I would like to highlight is interest. As I said, the benchmark is 2025. We had a higher income environment at the start of the year. That's something where we work against. At the same time, we've done a lot of optimization measures, which should help us so that broadly in line with 2025, we expect 2026 and which is significantly below historic levels.

We see investments, I talked about that going towards EUR 860 million to EUR 900 million. And at the same time, offsetting this, we see a strong improvement in lease and asset financing. As I said, at the same time, we expect that we don't have to continue to fund the U.K. pensions, which already stopped in Q4 2025.

And as a result, we expect another slight improvement, our net debt aside, and this should all help us to move constantly towards this target of moving net debt leverage towards below 0.5x.

And midterm, I think this is important to us, because we've seen a very strong '25, 2x, we increased our guidance. We have seen on the back of that, the ability and opportunity to start paying dividends now. And we have a strong guidance, and we expect profits of 7% to 10% increase in 2026, and we expect further growth to happen. And this is how the strategy that Sebastian explained will also translate into numbers.

You see further growth in hotels alone the investments, the increased investments will yield. You have the protection and the -- from a vertical integration and the ability to have strong occupancies in all of these investments.

We have a ship pipeline, another ship in TUI Cruises in '26. We'll see the annualization of this in '27. And then again, new ships, '31, '33 and with the expansion in the U.K. market, the opportunities there.

Then in Musement, we see this digital growth, which really works in a way and plus all the initiatives to do this in the most efficient way versus our customers. So that's the sector we're really pleased with the development and we expect profits to not only continue to grow '26, but also beyond.

And then, there's Markets & Airlines transformation, and we have really said set this profit target of 3% and look forward to the initiatives to contribute towards that. And on that basis, we think we have a package which is '25 delivered capital allocation defined and building blocks for growth beyond '26 and in '26.

And with that, Sebastian, back to you.

Thank you, Mathias. Short summary from my side. In the middle, what we call the Unique Synergy Fly Wheel of TUI, it's not to business Market & Airline and Holiday Experience, it's the same coin with two methods. The one are the distribution, strong distribution sector. The other one is the lighthouse products, the differentiated unique products and both areas support each other. The broad customer base that supports the asset utilization and the differentiation improves the margin and the customer satisfaction.

And with both of this, we are confident to give you the outlook, grow further. The EBIT, not only for next year, but to see it for the longer-term future. And as our shareholders had to be very patient, and I think, it's more than fair that we start to pay a dividend for '25 and that we become very -- well, lastly, very reliable on what we want to do for the future. So, you see us as always carefully optimistic.

Thank you, Sebastian and Mathias. We are now available for Q&A.

[Operator Instructions] Our first question comes from Jamie Rollo from Morgan Stanley. Jamie, your line is now open.

Three questions, please. All of them on Markets & Airline actually. I appreciate it's only 15% of your profit. But if you could, first of all, just talk a bit about current trading. It looks like that 1% is quite a big slowdown from the 4% September figure if we add up the volume and ASP back then. I appreciate you're no longer giving the breakdown of that 1%, but could you talk about why it slowed? And also whether the ASP increases you're getting, if that's sufficient to cover cost inflation?

Secondly, on the guidance for the full year, if my math is right, you need a minimum 30% EBIT growth in Markets & Airline to hit the group profit increase. And it sounds like it's going to be second half weighted given Jamaica and the Easter shift. Just really wondering about the confidence level in that given so little has been sold for the Summer at this stage.

And then finally, just on the strategy in Markets & Airline. Thanks for the bridge on Slide 18. That's very helpful. But it looks like you're getting hardly any margin benefit this year from the first three of those factors, the own products, the airline, commercialization or the operational excellence, all the growth is from overhead costs. So, do you think the strategy is working? Because what you outlined at the CMD was more about revenue growth and you're only doing about 11% growth in Dynamic Packages. So, just really wondering about your strategy overall in M&A.

I'll answer, Mathias, the first questions. Yes, you are right, there is a Jamaica effect, and we very much believe that we can cope with it very well. We would not have needed it, but it is as it is.

You're right, there has been only in the markets, not on all the others, there you have seen a strong momentum. And you could, I mean, logically say, Marella is a U.K.-dominated company, and therefore, the revenue is there U.K.-based. What was important for us to make sure that we keep the margin at a good level in Winter. You remember that last Winter, we had a very, very strong second quarter. And therefore, we said volume is less important than the margin because we can cover our risk capacity.

There is an interesting development on inflation. I mean, you may recall that it was difficult for us in the last years to cover the inflation in the ASP. What we do see is that the -- like in other sectors of consumer spend, the inflation has normalized. We even see that sometimes, yes, there is still a 2% or 3% increase, but we also see that there is 0 increase, that we can buy some products, beds or especially on the Airline side cheaper than we did before. So therefore, for Winter, it was very much steering towards margin and the inflation and what we get from the customer are very much more in line what we have seen before.

For the Summer, we need the cost reduction, and we put a lot of effort into achieving this cost reduction. Nicola gave me the advice not to be too bullish because that would increase too many expectations. But what we do see is very encouraged what we do see. But we also see that there is market pressure. I would not be right to say that. So, it's very much important that the cost reduction can not only offset anything what is in the market, but can get into a positive increase in Market & Airlines. And I'm not sure if the 30% are rightly calculated, but we want to be -- see a significant growth in Market & Airlines as well.

And is the strategy working? One thing is, this is -- and you know it, because you're so much in the detail. On the revenue growth, the TUI Cruises revenue growth is not a TUI growth, because we just get the results into it. The joint ventures on the Hotel side: The Atlantica or TUI BLUE Hotels, we get the result, but we don't get the revenue.

So, if we would add up the customer revenue increases, it would be a very different picture than the consolidated numbers. Because the U.K. last year has increased the share, the sales into Rio significantly, but this is not a revenue increase only slightly, because it's in the consolidation. It's not 1 plus 1, it's 1 plus 1 is equals 1.2. So therefore, it's something which doesn't really reflect from a customer perspective, the revenue growth. And that would be my answer to the question, Mathias. Was it right?

I think -- As Always.

Our next question comes from Andrew Lobbenberg from Barclays.

Can you explain what changed with the decision to take the new boats into the TUI Cruises rather than this time last year when you were expressing confidence that you would keep them at Marella. Can you explain what happened to the Marella fleet as it ages and perhaps explain how you expect to serve the U.K. market on the cruising side?

And then, a second question would be around the growth in Dynamic. I mean, it's growing 11%. Therefore, the non-Dynamic is shrinking, I guess, about 10%. How did the economics work? How strong are the economics on Dynamic? And what does that tell us about the economics of non-Dynamic? And how should we expect the share of Dynamic to evolve going forward?

So, with the Cruise part, the synergies we do see on the new builds with TUI Cruises are huge. We always said when we put something into the joint venture, the 50% should add more value to us than keeping the 100%. And you may recall that the new two ships are on the same series like the TUI Cruises: Mein Schiff Flow and Mein Schiff Relax.

So a lot of synergies also with the Royal Caribbean on operating these ships. By the way, we have three options, which have a high value. There are no building slots available till '30 something. So we are very happy to also have three options.

And the question is absolutely right. What does it mean for Marella? Marella is performing outstandingly well. You've seen all the prices they have received. We believe that there is even room for more tonnage in the U.K. or put it also into North Europe, including the Nordic countries. And this is -- by the way, we have the Board meeting with the Royal Caribbean later today in London. There are opportunities which we will explore.

But it was important for us that we have the right vehicle where we get all the synergies. And one thing is also clear, it would have been a significant stretch to our balance sheet and financing, and we wanted to be very much on the safe side. But the rationale is 50% should be more valuable than 100%.

Dynamic, non-Dynamic, that's a good question as well. We very much believe in the non-Dynamic -- in the Dynamic, in the risk-free product. And we also believe in the wholesale product.

The question is, what is the risk right we have. In the past, we have had sometimes too much risk capacity that we have now have found a good solution. That is a definition that we -- of the risk capacity, which we think we can sell well and the growth should come from Dynamic. It's not an or, it's an end. And it was very clear that the focus is on selling the risk capacity, even if that lowers the Dynamic of the selling of the non-Dynamic. Now we have Risk Right, we do see significant more opportunities to grow there.

And of course, we had also to do some technology homework. We haven't had all the carriers, the third-party carriers. We haven't had too many NDC connections. We have now connected British Airways. Others will come even before Christmas. So, we had to do -- to lay the foundation with significant IT divestments on Dynamic. And I would say that the growth should come from -- in TUI from Dynamic, which means that it would equally translate into growth into growth with Dynamic.

Can I just ask, I mean, on the U.K. on -- I mean, the existing Marella fleet is older than the TUI Cruises fleet. How long can it go? Or is there a time when you refurb the old vessels and they can just keep going into the future? Or are there technology or environmental issues that put a defined time line -- time -- lifetime on them?

We very much believe with all the investment, and we are refurbishing. And we are doing a lot of sustainability investment. But compared to cash flow, it's a very nice picture, so that they can stay in service until the '30, '35. There are now -- and I don't want to elaborate too much because this is just brainstorming what I said.

There is also a life for refurbished tonnage, and we do see as the new build slots are very, very limited or you can't get any at the moment for the next 10 years or 7, 8 years, but I would say, 10 years, it could make sense to have also some reasonable investments there. And that's what I said. That's something we have to develop.

For the time being, we had assumed that having new ships, which are double the size of Marella, we will see significantly improvements even with our 50% share with our development in Cruise, there might be opportunities which we haven't seen half a year ago, because if we have seen Mathias showing 5% higher occupancy in our load factor or booking in TUI Cruises, I mean, with 45% higher capacity, it clearly shows that we sold too cheap, but it's more than a luxury problem. So, there is something to do with us, but more on the opportunity side than on the risk side. Really like what they have achieved is really amazing.

[Operator Instructions] Our next question comes from Kate Xiao from Bank of America.

I have a few questions on AI. In your presentation, you mentioned that your products are open to all LLMs. I wonder what that means. Are your products kind of bookable directly on the kind of AI agent level? Or is it through your own apps? I think through by your example, it looks like it's kind of more through your own app. Then I wonder if there's scope to kind of integrate further, hence, bookable directly at the AI agent level.

And then the other question is, are you seeing increased demand right now already from the AI front? Can you quantify the benefits you have seen so far? And finally, on the cost front, any numbers we can share by implementing AI, say, what would the contribution be in your Markets & Airline business to that 3% EBIT margin target?

As said, we believe that AI is changing the tourism, how we distribute. And our own brands are very, very important because we want to get as many of our customers direct on our app into our product. And that's why we have increased and changed the split of performance marketing into brand marketing. And apparently, it works well. Maybe we -- most likely, we have been under-invested in brand. So, we -- marketing, so therefore, we shift.

If you look at LMMs, it's really exciting. For the first time, TUI is ready and the LLMs are not ready. And why are we ready? You have seen it with Mindtrip. It's working. We do see it where we use it internally and the LMMs are still optimizing what they do. It was interesting what ChatGPT or the owners said what they have to do first before they start with the sales shops.

For us, it's important to be directly bookable so that the customer says, I want to go 2 weeks to Mayoka with this and that. And then he gets the TUI offers and then he's in the TUI ecosystem to book it. Technically, it is possible. We are waiting to get connected.

And you could argue, but that is then open for many. I mean, there is a first-mover advantage, but our advantage is we have the Robinson Club, others don't have. We have the TUI BLUE, others don't have. We have the service component, which is very, very important, especially in our customer segment with also customers at the -- with different age pattern. So, we very much believe that this exclusive content, differentiated content is a difference.

When you talk about where can we use AI to have lower cost, one, to increase the conversion rate in the app. That's something we have started to see. And a good example is for us when it comes to service. I mean, people calling -- asking a question. Today, a big, big share is done by AI. And then you could ask, what does it mean, because we got the question before on the workforce. In these areas, we work with a lot of service companies. And there, we were able to reduce that a lot.

The next step will be content production. A lot of things will be automized with better quality, pricing. We still have a lot to do to improve our pricing. Maybe others are superior there. AI is supporting that a lot. So it's both things to get better outcome, better content, better prices and on the other side, to decrease -- to improve processes and to decrease cost for that IT development is a great example.

I remember 2 years ago, we had thousands of external people. Today, we have maybe 30 or 50. And we really lowered -- almost vanished the number of external people and we do it with us. And I would say, today, it is -- you have the factor of 5 if you develop something with AI systems in IT, and there's even more to come. This is a way, and it needs education. It needs a very clear target. But the organization is really, really excited about it. And it's for us the opportunity to maybe overtake the one or the other, and that's why we put so much effort into it. And it sounds by far easier than it is.

Right, Nicola?

Right, as always.

Our next question comes from Karan Puri from JPMorgan.

I have two questions, if that's okay. The first one is on the balance sheet and cash generation. Just wondering with leverage not too far from your midterm target and with cash generation picking up nicely as well. Wondering if the 10% to 20% dividend payout ratio is more so a floor with potential for an increase if you continue to delever. That's question one. Maybe we can start with that and I'll come back to question two after.

Yes, exactly. But they say cash flow breakeven at some point at the start of the next phase, very clearly. So as I said, one is we need to bring leverage further down, and this is below 0.5x. As of today, 0.6x. At the same time, when we look at leverage, what will be, of course, what we need to consume at the same time is the order book of Boeing, which is peaking '26 and '27. So, this is something where we expect that we can, of course, work on leverage, but at the same time, something that we still need to consume.

And this is some -- so I think on the back of that, we've decided to propose a starter dividend and we are -- have defined this 10% to 20% of underlying EPS as a dividend strategy going forward. Again, it's to be defined in each year where we are. But at the same time, I think we really balance with that deleveraging, consuming of investments and good basis for shareholder returns. That's the idea behind it.

Perfect. The second question is actually on the newly announced EUR 250 million cost savings. Despite this sort of incremental EUR 250 million, you've kept the midterm EBIT guidance unchanged. What is the best way to think about this? Does this imply that the underlying momentum across the other buckets of Dynamic Packaging, Airline Commercialization, et cetera, is tracking a bit behind? Or it's you just being conservative? What -- how should we think about this, please?

It's important to achieve what we have promised. And -- I mean, we haven't had in mind the Jamaica incident, which was a significant hit. We want to make -- to do as much as possible to fulfill what we promise to the market. If times are great, like last year, we are able to overachieve. There might be times where they are even getting more challenging because the economy is the war and so on. I think reliability is a very high value for us. And I mean, it's better to fulfill with a very high certainty what we promised or what we outlined, what we are achieving then to add up all the opportunities we have.

Our next question comes from Leo Carrington from Citi.

If I could ask two related questions, please. In terms of the travel environment in Europe, how would you frame that right now? You referenced the competitive nature of the environment. Is that pure competitive tension? Or is that in the context of some kind of caution from consumers? And obviously, there was the later profile of bookings over the Summer. And then looking forward, for the ASP growth you've referenced for Winter and Summer, is this mostly like-for-like pricing? Or is there mix or duration effects that are also moving this metric?

I mean we are lucky that, for example, in the Hotel business, whatever is the impact from Europeans or U.K. customers, it doesn't hit us, because we -- I was on Lanzarote last week, absolutely packed. I've never seen so many French people, so many Spanish people, and I've never seen so many Asian people. So, we benefit from the global distribution we have built up. On Cruise, it's the product. And therefore, it is very much sold out.

If I look at the European or if I look at Musement, they have now a lot international customers, which are not Central European ones. But also the European market is not homogeneous. If I look, there's strong growth in Eastern Europe. So you know about our successful Polish business who went -- they went into Czech, doing very well. At the moment, they go into Romania, soft launch, a real launch in February. Spain, which was always a challenge for us. Outgoing Spain, for the first time turned positive, and it's growing significant in Portugal, Latin America. So it's important these markets outside the core markets. Because, if I look at Germany, if I look at the U.K., I would say at least there is no tailwind.

And with the political uncertainty, and I know it, of course, better in Germany than in the U.K., there might be even effects. We are -- and looking at Germany, we are maybe less impacted, because we are in the customer segment, which has a higher income and the lower segment, and that's why we had the one or the other insolvency, which the company who were at the lower end, they suffer more.

For us, it's important to be as resilient and to have the broadest distribution we have to make sure that the Cruise, the Hotels, the Musement products are having the highest possible occupancy.

And if you look into the seasons, we had a good start, but we quite often had a good start. And even if you are now 10% or whatever percentage up, you can lose that in a week, in turn of the year season. So that's why it's so difficult to give a good and solid outlook. But we -- the resiliency we got is making sure that we can fill our assets. And at the end, if it's 10% or minus or 10% on Markets & Airlines, it's very important, and we need the growth, and we are envisaging the growth, but we can -- could lose the game on the Holiday Experience. And as we don't do that and we win there, it's so important that we get from markets -- the customers into our assets. And this works well, and it works even better now than it worked a month ago or a year ago.

[Operator Instructions] Our next question comes from Richard Clarke from Bernstein.

Just starting on Cruise. Are you seeing any benefit in Europe from maybe less capacity some of the other Cruise companies have redirected capacity to the Caribbean? Is that helping yields? Are you thinking about your planning for where you're going to run your Cruises based on that? And maybe in that context, why are you only seeing prices flat, particularly where you've got new ships, why are prices not growing in the Cruise business?

Second question, I think this year or next year, I guess, you're saying the bigger contributor to the 7% to 10% will be the Markets & Airlines business. How should we think about -- I know, you've got a useful slide at Slide 42, but just the shape of that 7% to 10%, would you expect beyond '26 that we would see the Hotels and the Cruise business being the majority contributor to that 7% to 10%?

And then thirdly, I know you sort of explained the dividend sizing. But in the past, you used to at least be able to return the TUI Cruise dividend back as a dividend. It looks like your dividend is going to be below the TUI Cruise dividend to you. So, just wondering why at least that isn't being able to pass back to TUI shareholders.

On Cruise. I don't know if we benefit from less capacity. What I know is that the value proposition of TUI Cruises, Hapag-Lloyd and Marella is superior. TUI Cruises new ships, the well-being approach, the all-inclusive approach, amazingly great product. Hapag-Lloyd, the same.

Marella, and that for me has been the biggest surprise, and therefore, I'm so really grateful to the management and the team there. If you look at the prices they win at the food concept. It seems to be that they do a lot of things right.

And then the right question is, why are prices not better. And that is a question we put to the management there. To be fair, no one and especially not me anticipated that the demand would be stronger than the capacity increase. So there is something more to be done on the prices.

On the other hand, and we know it from markets very often, the customers you don't get in the beginning, you have to pay a lot to get them late. And therefore, we are really grateful to the capacity there.

Do you want to say a few -- and maybe last before Mathias goes into the detail, I think it's very clear, and that's why we always stress so much the business model, having strong distribution, which fills our assets. Yes, we want to have a significant increase in Market & Airline profitability, but the majority, I would -- I mean, I couldn't assume that this would be the other way around.

Yes. And maybe just on the dividend. To be fair, I think we developed the dividend looking forward. Again, as I said, balancing deleverage targets, investment and consumption of the investments -- and please do not forget that the Aircraft delivered by Boeing directly move on balance sheet if they are leased or asset financed and that the CapEx is primarily related then to the adjacent engines, et cetera, maintenance events that we need to move through CapEx.

And then thirdly, to have a decent returns to shareholders and to have a good dividend yield in line with as what we get as comments from investors and business partners. I think in the past, the dividend policy was really on different pillars, and that's why I think it's not really comparable.

Just a few words on the guidance growth. I think the 7% to 10%, if you -- I think they have 2 elements indeed. One is what are the building blocks in terms of investments that you can already see today that, in particular in HEX will then deliver a certain earnings growth going forward. And that's one element.

The other element is the benefits from Markets & Airlines. And naturally, I mean, there's a kind of overall improvement that we expect. But also if you go to the regions, and Sebastian, you mentioned the success that we had in Nordics. We reduced capacity there to the right capacity. We have an issue in the Belgium, Netherlands model, which is similar. I think that's something you need to put into context. But what is for the guidance, very important, this is more back-ended very naturally. So, this is more towards the Summer where we expect then the profit growth in that area.

Our next question comes from Andre Juillard from Deutsche Bank.

Two questions, if I may. First one about the German market and the reinvestment plan, which has been presented by the government. Could you give us some more color about your feeling on the one consequences of this reinvestment plan and the trend that we could see and potential good news that we could see in the consumer and the travel and leisure sector.

Second question about the booking trend. You are relatively cautious on the Winter, partly because of the negative base effect. But what do you see in terms of trends on the last booking? And do you see any significant evolution on upgrades or downgrades in terms of segmentation of the bookings?

You mean the investments of the -- increased investment of the government?

Yes. And the consequence it could have on the consumer side.

How should I phrase it politically correct? I think, Germany is in a very difficult situation, and we would need significant more rigid changes. And at the moment, we try to have a debt-related investment program, which may work or may not work. At least it will not change the sentiment as long as not main questions are solved. So, I don't see any positive impact to any business in Germany.

And coming back to your booking trends question. As I said, it's very difficult to predict. On Winter, we said margin is very important and another 1 or 2 volume with lower margin doesn't help us, because the risk capacity is set right.

We had strong Black Friday 2 weeks, which personally surprised me a little bit. But of course, as I said, whatever we have today, it is important, but the main important season is the change of the year -- a season, and then we will know. I think, it's very important to protect margin and where we cannot protect the margin to make sure that the cost element is more than what the market would see. So, the prediction is more difficult than it has been in recent years. And it's important that we are cautious that we are not going into a risk strategy, but in a well-balanced strategy.

And is it a late booking pattern? What we do see, I don't see that too many things has changed. There have been change that some of the consumer segments like the families, which is luckily not so much the TUI business with two or three kids, they don't have the money too much anymore to spend in travel. They are more a segmented oriented change or Egypt because there's a great price value for the customer is growing significantly and other countries are losing. So it's important to be resilient, to be dynamic, to change quickly and to live with these changes.

We currently have no further questions. So I'd like to hand back to Sebastian Ebel for any further remarks.

Team, and I always say thank you to the whole team is working very hard. Transformation is not easy, and it only works if our people work with us, if we get the right products to the customer. And as we do see that day-by-day, we see progress, we are confident about TUI's future. We have huge opportunities. We have significant risk, which we have to manage. And therefore, I very much believe investment in TUI is a great thing, because we not only work hard, that's a lot of people doing, but we are seeing that we can give great offers to our customers and to support trends we do see in the market. So, thank you for being with us and asking your questions and challenging us. Mathias?

Thank you so much.

Thank you so much. And the only thing remains, have a good festive season ahead of you.

And go with TUI. We still have some seats available.

Excellent.

Thank you.

Thank you. Bye-bye.

As we conclude today's call, we'd like to thank everyone for joining. You may now disconnect your lines.

Hello, everyone, and thank you for joining the TUI Group FY '25 9 Months Results Call. My name is Claire, and I will be coordinating your call today. [Operator Instructions]

I will now hand over to TUI to begin. Please go ahead.

Thank you, Claire. Good morning, ladies and gentlemen. A very warm welcome to our third quarter results presentation from the TUI campus in a very hot and sunny Hanover. My name is Nicola, and I'm Group Director, Investor Relations.

I'm joined today by our CEO, Sebastian Ebel; and our CFO, Mathias Kiep.

We are pleased to present a good set of numbers with Q3 delivering the best ever result. No doubt, you will have seen our ad hoc statement yesterday evening, which highlighted that on this basis, we are raising our full year '25 underlying EBIT guidance.

Following the presentation in a moment, we will be available for Q&A.

And with that, I have the pleasure to hand over to Sebastian and Mathias. Yes, Sebastian to you first.

Thank you, Nicola, for the nice introduction. And you see us -- not you see us, you hear us in a good mood. There are not many good news today around in the world. I think what we can show and deliver are good news and that keeps us very positive.

You are familiar with our agenda. it's the same like before. I will talk about operational and strategic highlights. Mathias will go into the numbers in detail. We also will give you a trading and outlook and a short summary.

We have seen a very strong 9 months: revenue up by 8%; EBIT up EUR 115 million, EUR 150 million at constant currency driven by record Hotels and Cruise results.

How do we do that? We have had an even intensified look into the integration benefits. This, doing into our own hotels, our own cruises, into the Musement products, have even been optimized and that drives superior results and growth, and we are really proud of that.

Markets + Airline transformation is accelerating. Very important because we still have significant room for profit improvements. And we are -- and we have presented that before, more customers more products to deliver growth. And by rolling out now our standardized global IT platform, we are able to significantly reduce cost. We will go into the details in December this year, so in 3 months, to give more guidance on what we do there.

And on this basis of the great 9 months, we are not only well on track for the full year, but we were also able to increase the guidance for the full year to 9% to 11% at current currency (sic) [ constant currency ].

If you look into the third quarter into the details, significant improvement, EUR 90 million, almost EUR 100 million at current currencies (sic) [ constant currency ], driven by the Holiday Experiences record and Markets + Airline benefit of the Easter shift, which we had expected when we presented the Q2 numbers.

Revenue up by 7% and EBIT up to EUR 321 million, the highest Q3 result ever. I can remember, and the team looked into it so to verify it for the whole TUI.

When we look into Holiday Experience, forward trading momentum is there, it stays. So by the vertical integration benefits, by the strong demand, we are able to have higher rates for our unique and differentiated products. By the way, the focus on unique and differentiated products makes TUI different also for the Markets + Airline. And the Markets + Airline helps a lot through the integration effects to get the outstanding occupancy and -- rates.

If we look into the Markets + Airline, summer bookings are minus 2%, ASP holding up 3% in a very competitive market with a later booking trend heatwaves and especially the Middle East conflict had some impact.

If we look into the winter season, we have seen a very positive start. It's still early, but a good start is a good start. And by having said that, as said, we were able to increase the guidance.

If we go into the details. Q3 and the 9 months, Hotels & Resorts were on the same level as Q3 '24. This is taking into effect a negative effect. We had a onetime effect on revaluation effect, and we also had the effect of the Turkish lira. Operational result has been significantly better. But again, this is a strong comparative we had last year and we keep that.

On the Cruise side, a significant improvement. The good thing is it's not only because TUI Cruises' capacity increase, it's we haven't had the negative effect of the Suez channel rerouting last year. And we do see that we have a very good development also when it comes to rate.

You could argue -- on Hotels side, the occupancy has further increased daily rate, 3%. You could argue why is the occupancy, and also when we look into the fourth quarter, is stable? Because the cruise ships are fully booked. So the future tasks will be to optimize further the rate.

Also good development with Musement. Especially we put a lot of effort to direct our TUI customers into our own produced experience through the built database we have with all customers and that is doing very well, and that has led also to a significant increase in the 9 months of the TUI Musement.

So Holiday Experiences doing extremely well, benefiting from global distribution that I should have mentioned as well. We now get more and more hotels also from other source -- TUI source markets. We went into Portugal. We went into Spain. By the way, we will go in the autumn into Italy as a new source market. We went into Eastern Europe, but also into the Americas, South America, Middle America, and that helped us to keep the high load factor or even improve the load factor. So it's an important effect of the vertical integration.

If we look into Markets + Airline, we have seen the expected increase due to the Easter shift in Q3, but we are still behind the 9-month number. Departed pax, 2% up. What is really important for us is the increase in the dynamic package share. This is a very important source of growth in the future, and we have now built a dynamic connection to airline content, to hotel content and that's why we also expect not only here a significant -- we see not only here a significant increase, but we hopefully can accelerate that in the future.

App sales also very important for us, 40% increase, now to 10.5 percentage points. That's a great development and clearly what is even better is that when we want to go to the 50%, there is a lot of what we can achieve by improving our app and load factor on the same good level as we had before.

If we look into the regions, U.K., having seen the biggest improvement; Germany, a small improvement; and Western Region, negative. Western Region consists of 3 countries, France, Belgium, Holland. France is doing well, but we haven't had -- we have this for 2 years, before that it was our Sorgenkind, our main concern, problem child.

Holland and Belgium needs a lot of focus, and we are turning around the business. We're changing the business model to a more dynamic model, a more direct sales model. We actually had the same situation in Scandinavia, Finland a year ago. We changed -- turned around the Nordic countries and this is what we will achieve, also invest in region next year. So it gives us a solid base of further improvement as well.

Some highlights like we always do, we said for Markets + Airline more products, more customers. For more products, there is a very important product, which we are now rolling out in Europe, starting with all the TUI markets, starting with Germany. This is our Tours products. The tours market is a big, big market in Europe, but everywhere in the world. And the new tool consists -- which is available for online but also for retail, it consists of preproduced round trips at the moment, 200, but that will increase to several thousands closely. But what we have seen there is a big demand of personalized agendas from the customer.

So where he books 2 days Los Angeles, 1 day San Francisco, 1 day in Yosemite Park, and the Tour will make sure that the flight fits to the hotel. The time schedule fits of the excursion, fits to the location where you are. So it's a great tool and the first signs are very promising. It's a huge untapped market.

I talked about the app, a lot of small and big improvements there. We bring AI into the search, not only search algorithm, but also the customer can do full text search. We did start that in the U.K. And every month, there is new functionality in the app, location-based service and so on.

On the Hotel, on the Holiday Experiences side, last time we presented what we are doing in Asia. We are now also expanding in Africa, which is, by the way, a very attractive market and the TUI brand is very well received there. Now new hotels in Gambia, Cote d'Ivoire, thank you. I was never so good in French. And also in South Africa, there are more hotels coming.

As you know, we successfully launched in March the Mein Schiff Relax, which was now in full operation in the third quarter. In the third quarter, TUI third quarter of '26 the Mein Schiff Flow is coming into the market, and that will also be a significant base of improvement.

Sustainability. This is not a fashion for us. It's a sound business case for us. It's, of course, good for the climate, it's important for the customer, but it's also commercial business case in itself.

Here, we have some examples for what we do. Turnarounds on airports, we had the first U.K. airport, was it Birmingham, where we use hydrogen-powered ground support equipment. What is really not on the list here, what makes us proud, we had the first trip traveled with Mein Schiff Relax completely with e-LNG. So carbon-free LNG, which was made out -- or which is made out of biogas coming price-wise closer to the carbon LNG. And this is something where we always dreamt of and we have brought this into reality.

Mathias, the hard numbers.

Thank you very much, Sebastian, and good morning also from my side. Let me, on the next page, just briefly go through the numbers, the bridge is 3 and 9 months and then P&L, cash flow and balance sheet.

And as Sebastian just presented, we're very pleased naturally with this quarter. Revenue increased by 7%. This is also because of the positive shift of Easter into this quarter.

And then an underlying EBIT 9 months at constant currency of EUR 199 million and EUR 165 million at actual rates. This results in this EUR 150 million increase year-to-date at constant currency.

And as a result, we are very pleased that we can raise our guidance to a range of 9% to 11%. Just mathematically, this range also allows us to even have a softer Q4 and still result in a positive area with this range.

Net debt has further improved, that's a result of our financial discipline. And we target our further improvement of leverage for the full year and can confirm that we are on track to do so.

We also, and that's a very good reference, we think, has issued a promissory note of around EUR 250 million at a very favorable coupon. I think this shows also the trust and the terms that we are now achieving in the credit market that really helps us to not only refinance the business, but to optimize our financing structure.

Now the 3 months, as Sebastian just has explained, I think on this one page, you just very clearly see the success of Cruise, which goes beyond to just the addition of the new tonnage into Cruises. And the not having the Suez effect this year, it's also an improvement in the underlying operational performance of both units.

Now cumulative 9 months numbers, as I just said, EUR 165 million for the 9 months at actual rates. If we would apply prior year rates, that would be at EUR 200 million, so EUR 35 million higher. But this is in particular coming from the volatility in the pound, for example. And you may also have just seen the volatility in the year that we thought earlier this year this will maybe reverse because we have the stronger summer months at current rates, I don't expect that we will have a significant benefit in Q4.

On the picture in terms of where is it coming from strong performance in Hotels & Resorts, as Sebastian mentioned also the benefits of vertical integration that's really encouraging Cruises. That's something we've seen in Q3, we have seen already in Q1. This is really a strong market. And through the localization of both units, it's a very strong product proposition.

Musement in line with expectations, strongly benefiting from the Markets + Airline clients.

And then in Markets + Airline, accumulated a position of minus EUR 35 million. And that's why we also think going forward in Q4 this will be, for the full year, challenging to turn around. And this is also reflected in our guidance going forward.

Now to the P&L, cash flow and balance sheet. If you look at the details, what needs to be highlighted, this is in particular adjustments. Net interest and the EPS adjustments, you see a positive number. This quarter, we had some disposals and they resulted in positive one-offs. We expect that this positive impact of around EUR 20 million will be carried forward. And therefore, we can, for the adjustments, update our guidance to the lower end of our range.

Interest is very favorable. Again, there's a one-off included because of the valuation of our bond. But the other half of the improvement of around EUR 20 million in the quarter is various elements, lease improvement, interest on derivative improved. And we expect that these improvements will hold for the full year. And if you then again, just do the math, you will come to a situation and we will expect a similar improvement in Q4. And on that basis, we expect that we will actually be slightly below the range that we already reduced last time for interest.

And all of this results in a very strong increase in earnings per share by EUR 0.26 in the quarter, EUR 0.10 last year and EUR 0.36 this year.

For the 9 months and 3 months on cash flow. Cash flow is in line with our expectations. Let me highlight a couple of elements. First, working capital is a bit softer in the quarter than last year, but fully in line. Sebastian mentioned it, we also go for margin rather than volume.

The other cash, there were a couple of one-offs included last year as well that we don't see this year again.

And there's also always the movement in maintenance reserves when we hand back aircraft, that's an impact that we will also see in future years that whenever the Boeing portfolio switches around and we get new aircraft that we then see the outflow for the old aircraft on the maintenance.

Interest, the same positive effect that we've seen on the P&L side and resulting also in improvement of our guidance. So we expect that we can go below the range. Again, we lowered that range in H1 as well, but we think we can get below this for the full year.

Investments in line with our expectations. You see an increase also when you see -- look at the 9 months, it's probably around EUR 100 million more. And just be reminded that we saw substantial divestment proceeds last year. And in line with H1 communication, we therefore expect that we are at the upper end.

The rest of the cash flow is in line with our expectations.

And as a result, we see that net debt has improved by EUR 200 million versus prior year. There are 2 effects. One is there's a bit of FX as well, which is supporting us on the lease portfolio. Dollar against the euro is a bit weaker versus last balance sheet date. And the second impact is that against July -- against the comparison in June of last year and July, we issued a convertible and the equity component is accounted here in the comparison.

All in all, the development here since the 1st of October is reflecting our strategy to keep net debt under control, increase our earnings and thereby reduce our leverage step by step.

Just before I hand back to Sebastian on bookings and -- just one final comment on the promissory notes that we could -- issued. As I said, I'm very pleased with the terms and is very pleased with the support that we received from the banks that handled this transaction.

The rationale, again, this is not a refinancing. It's really about optimizing our financing structure. And it's cheaper than what we have. While -- but even more important, it gives us more flexibility for the aircraft that we intend to refinance with these proceeds. So we will not prolong lease payments, lease arrangements for these aircraft, but use the proceeds from this Schuldschein.

So no impact on our debt position because we're just replacing it, but it will give us much more flexibility in our aircraft ownership and that's something which is a positive for the operations of our airline.

And with that, I would like to end and hand it over back to you, Sebastian, on trading and outlook.

Thank you, Mathias. If we look into the fourth quarter, and I want to start with Holiday Experiences. We do see that our occupancy we can further optimize by 3 percentage points, and we are able to increase the daily rate by 6%.

Two main effects: global distribution we have built up and the steering of our markets into our own assets. This brings us into this great situation.

And by the way, the Net Promoter Score for our own assets are outstandingly positive.

On Cruise side, another increase of capacity, but only a small increase of occupancy. Why is it only 1%? Because the ships are full. They are above 100%. We have just seen an absolute record with additional beds for children. So we are well above 100%. This is amazing. And this is an outstanding result, gives us future possibilities for price optimization. And despite this strong increase, a great result.

By the way, when we look forward into -- because of one ship more next summer, we do see that we are even ahead of bookings of this year.

If we look at TUI Musement, we expect high single-digit growth, which is an outstanding result because we are able to increase further the uptake rate of TUI customers. Why? Because with the single database we have built and personalized offer management, we are able to bring the right product at the right time to the customer and Musement is benefiting from that very much.

By the way, we are now also starting to offer Musement customers. So Musement customers, which they got in cities, which they got in the destination, but not through TUI, we have started to offer TUI products to them as well.

So overall, a great development and vertical integration is paying off with all the tools we have built.

If we look into Markets + Airline, bookings are at minus 2%. U.K., plus 1%, and we do see a momentum through all the measures we have taken in the U.K., 90% sold. Germany going backwards by 5%, the Tour operator product, minus 4%. Why is that the case? We have seen a significant impact not only of the heatwave, but also from the tension in the Middle East and as long-haul destinations in the Middle East has been a significant part of the TUI business, we have seen some impact there. And we have very much focused on margin, less on volume.

Therefore, the ASP is plus 3%. And program sold almost 90% today. So that's why we are very -- and summer includes October. So we are very confident that we can achieve what we have.

Looking into winter, we had a very positive start. It's still early, but it's important we expect a good winter because of the shoulder season is getting more important because customers who may have not traveled in summer will go in October and November.

We also are getting -- that's part of the transformation. We are bringing more products to it like city trips. TUI has never been strong in city trips. Now we have started to offer them. So it's a little bit the reverse by how easyJet is doing it who went from city trips into sun and beach. We go from sun and beach into cities. It's a complete untapped area for TUI.

And as we can now dynamic package, the Ryanair deal helps us a lot. We are offering attractive products in the city destination area and that supports especially autumn, but also the early season in summer.

So that's what we understand with more products, dynamically produced TUI Tours component products. And for -- we talked a lot about this and we now see that all these things come into place. And that's why we are positive not only, of course, for winter, but for the future.

Hedge position is also something I would like to reflect on during COVID and the first years after, we have still limitations. Now the limitations with the sound balance sheet and the benefits improvements we have seen on the balance sheet and the trust of the banks, we are back now to a normal situation. We can do what we want to do. We have full flexibility. And we are happy that next winter is hedged for good rates. We have, especially on the fuel side, good hedging for summer and we have even started to hedge for winter '26, '27. So we are back to normal. So the outlook we think is very positive. And that helps us to increase the guidance on constant currency from 9% to 11%.

And what is maybe even more important, Mathias will go into more details on the guidance, is that we can also confirm the longer-term outlook for the coming years because we are very convinced that with all the improvement in Markets + Airline, we will see a significant, better catch-up mode in the coming years.

And maybe you do some more?

Thank you, Sebastian. And indeed, this is more to summarize what we've presented so far. So the segment view compared to our position when we set up this guidance in December, Hotels & Resorts, we had a slight growth in our expectations. Given the very strong results and performance, we have upgraded that to strong growth.

Same to Cruises. As discussed, this is really a strong market and the performance is beyond what we see from just adding the additional capacity and the Suez effect.

Musement remains unchanged. The translation of clients into earnings is continuing to work very well.

And then in Markets + Airline, unfortunately, we need to downgrade from our moderate growth expectations, which were triggered by the expectations, particularly on the fourth quarter. We now expect this segment to be below what we've seen in full year 2024.

But as a result, with the very strong performance in our product businesses, as we just presented, the underlying EBIT for the group is expected to increase higher than we had and by 9% to 11% at constant currency rates.

And the details in the P&L and cash flow, again, to summarize these adjustments. We expect now at lower end of this range of EUR 40 million to EUR 60 million. Net interest, we've lowered the range in H1. And we expect both for P&L and for cash to be slightly below that range.

Net investment, we confirm that we're at the upper end of this, and there is this additional EUR 50 million prepayment for the Marella refleeting, which has been triggered in the fourth quarter.

Lease and asset financing remains stable.

And net debt in line with what we've just seen for Q3, we expect a slight improvement for the full year.

And with that, I would hand back to Sebastian for final words and midterm outlook.

Thank you. Final words for today, hopefully. As said, the guidance this year, but we want to confirm our midterm ambition. We see a significant improvement -- we foresee significant movement in Markets + Airline to the measures we have take, shoulder month, dynamic packaging.

I had forgotten one important thing, more differentiated product because today we have 25% differentiated product with great margins. The commodity product is under pressure. And if we move in the next years to 50% differentiated product, we will see a significant improvement there as well. And differentiation is not good for the sake of differentiation. It's because the NPS, the Net Promoter Score, what we do see is well above whatever normal products mean. So this is an important thing for us as well.

And we do that through optimizing and putting a lot of effort into the vertical integration to drive scale and profitability. We have now the tools, the database so that we can do personalized offers. And we have, as said, the platforms, which we are rolling out. Not we want to roll out, we have rolled it out in some markets. We will roll them out to all markets, and that gives us a significantly lower cost base for the future. We will see that in next year, the first big effects, and we will give more details in December.

The transformation, as said, very important. A lot of effort and great progress, which is not yet reflected in this year's numbers, but we will see that very much. And of course, one big effect is the turnaround in Belgium and the Netherlands.

On the Holiday Experiences side, we have a lot of opportunities to invest. We are limit in the capabilities we have, and that helps us to really focus on the best out of good investment that was also in the past the trigger point for outstanding returns.

What we even do more is that we focus on the integrations to build clusters, which means -- and we have 2 or 3 clusters, which we are just preparing. It's about flying to a cluster. It's building and having great hotel content in the clusters and have Musement activities on the ground there as well.

So clear focus on the best returns, we can achieve that. And that will leave us -- brings us to further improvements on the cash flow. We still have to do something there and we do know that, which will strengthen the balance sheet. And this knowing what we are doing, independent if we have headwind or tailwind, would be great at one stage to have tailwind again. But with what we do, we get even more resilient to geopolitical change, to demand changes and we can confirm our ambition to grow further the underlying EBIT by 7% to 10% in the coming years.

It's a tough program and we have made, especially when I look at what we presented in Madrid, when was it, 3 months ago, 4 months ago, it seems like it was half a year ago, we have made significant progress in implementing what we had promised to implement and now it's the right time to start to earn the commercial benefits in next year and the years after.

Thank you, Sebastian. Claire, we are now available for Q&A.

[Operator Instructions] we have our first question from Jamie Rollo from Morgan Stanley.

I've got a few questions on Markets + Airline and then one on free cash flow. So just on Markets + Airline, the margins looked like they dropped to only 1% this year. It will be helpful for us to understand how much of that pressure, is it demand environment, whether that's the consumer, the weather, the Middle East? How much of it is the competitive environment, basically insufficient ASPs? And how much of it is the higher cost of the transformation? And is there a risk that your margins in 2026 in Markets + Airline will drop further?

Secondly, on the strategy in that division, you sound really confident it's working. As you said, we can't see any evidence yet. Is there anything you are disappointed about? Or are you going to be making any changes? And why are you so confident it is working?

And then, finally, on cash. The mix of profit is moving even more towards the joint ventures. So what does that mean in terms of your free cash flow conversion and the eventual possible payout to your shareholders at the end of the year?

Thank you. I start with the disappointment. If you look isolated -- or if you look in details what we presented, the one thing where I'm disappointed was the development in Belgium and Holland. And we have addressed that like we did it in Nordic, and there, we have seen the change. And therefore, we will see there the change and that will be also a significant part of the incremental profit for the coming years.

If you ask about the margin, yes, there are costs of transformation in it quite significantly. If you look into the margin profile, you see that the traditional wholesale package is under pressure.

By the way, wherever we act as a nondifferentiated OTA, that's where the pressure is.

If you look at differentiated products, so 25%, we have significantly higher margin not only on the Hotels side, if I would add that, but also for Markets only. And therefore, to further increase, we put a lot of effort to increase the differentiated product set. As said, the target one day 50% will -- there we will benefit.

So important non-diff change to differentiated product. It can be a hard diff, it can be a soft diff and that will have a significant effect.

Second thing is, when it is non-diff, it is important that it's produced dynamically. The old model is not bringing the benefit as it has been, and therefore, it's so important that we increase the number of dynamic packaged product.

Thirdly, new products we bring into the market. The commercialization of the airline will -- there, we will start in next year. We will see a slightly changed route network. More also we have some optimization for seats only.

So it's a lot of activities, which will make a difference and the new product, as said, towards city trips and so on.

So one, disappointment, addressed and we will change that. Gives us a huge -- big upside. And the change in the traditional business into the modern world with a lot of differentiated product.

And maybe I should add the more -- despite that we support retail as much as we can do, one of the biggest things is to get the AI systems implemented into the distribution, which remains linked to social media, means into the ChatGPTs, the [ proximities ] and so on.

Would you like to do the third question, Mathias?

Yes. So on cash flow and capital allocation, I think as we point to this from my side, capital, I think, one is the capital return strategy needs to be based and will be based on the robustness of the business overall. I think we can confirm that the change in earnings mix has not altered any of our internal discussion and road map. And of course, naturally, a third point, we are working on the improvement of profitability and cash flow of all our businesses.

Could I just come back on a couple of things you said, Sebastian? Could you please, if possible, quantify Belgium, Netherlands hit?

And also, you didn't answer the question about margins in 2026 In Markets + Airline. We're not asking for forecast, but do you think we have bottomed or it could be a bit more of a U-shape before we get to the 3%?

I expect a significant improvement for next year when it comes to margin. On the Belgium holiday -- Belgium, Netherlands things, you see the losses and this is a business which should be structurally significantly positive.

Our next question comes from Richard Clarke from Bernstein.

I guess if we go back to Q2, you were quite optimistic that the slight step down in bookings you've seen was due to a later booking window and you were calling out the improvements you'd seen since Labor Day at that print. So just a little bit more color on what's happened in the last couple of months that, that trend didn't hold. Is that all down to heatwave and Middle East?

And in particular, maybe second question, just a bit of color over the last 12 months as to what's particularly happened in Germany. I think after FTI came out, we kind of assumed there was a vacuum there, the 2-year lease was slightly filled. Who has stepped into that vacuum? And has that actually sort of raised the competitive pressure? Is the replacement more competitive against you than FTI?

And then the third question is just around the dividend. I mean you haven't mentioned it today, but I guess we're expecting a dividend policy at your next print in December. Does dividend policy mean you're going to declare a dividend? Or does it mean you're going to set out a policy and declare a dividend at the end of 2026?

I think, first, I would like to reiterate, we have a great result in Holiday Experiences and this is the result of the vertical integration. The customers of the markets brought into the Holiday Experience assets.

Second, we see a good momentum in the U.K., more to come. And yes, Germany has been a weaker market. If you asked for the reason, there are external onetime effects like the Middle East situation, also less trouble to the U.S.

And if you asked about FTI, as I said, the differentiated products bring the volume. We could have got quite more customers, we would have liked to do it. But as we wanted to protect margin, the market environment was not with the products we had to get to these customers. So the market has been weaker, and the heatwave also played a role, definitely.

And FTI, it was a decision in this market development situation to focus on the differentiated product. We will also bring more products into the market with a different cost base to also be competitive with there, but it's, again, for us, margin protection is very important. So it's more that we go into the area of differentiated product.

You may recall that FTI was heavily loss-making, so not because it was a bad company or they had -- they had a lean cost structure. It was just the market segment they have been in, and this market segment has not improved yet. And with -- and therefore, it was not our main focus today.

Yes. Thank you. And on the specification of what dividend policy means in December, I would say please understand that we cannot really go beyond the communication that we have set. We need to ask for your understanding that we cannot further comment on this. Reason is we've been quite transparent at our internal discussions and the discussions that we are having with our Board. This will be in Q4 calendar year and we cannot, therefore, go beyond what we've presented externally yet.

It's on our agenda.

Okay. Maybe just one quick clarification. Why has Germany suffered more from the heatwave and the Middle East than the U.K. has? What is the differentiation there?

Why has Germany more suffered? I would say that the economical climate in Germany is less good as it is in the U.K. Second, the U.K. is more orientated to the Caribbean than Germany. We have a significant business to the East, by the way, it's now coming back and that's why I said with heatwaves, we probably have to expect year-by-year. But these geopolitical incidents, they impact us for 8 weeks. Unfortunately, we're the wrong 8 weeks, but it's over. And what we do see now that this market is coming back. And yes, so these are onetime effects.

And of course, what you also see maybe Germans are more risk averse. If you look at bookings to the North Sea or to the Baltic Sea, German North Sea, German Baltic Sea, they are even down 25% if you look at the official data. So Germans have been more hesitating.

So in our segment, we are actually doing very well compared to others. And by enlarging the product portfolio and so on and so on, we will now turn it around again. Important for us that the relativeness to others is good. And with the new products and the new production method, despite these incidents when they happen, we will win. And we will prove that.

Our next question now comes from Cristian Nedelcu from UBS.

Could I please start with the working capital? Correct me if I'm wrong, but I think your revenues in Markets + Airline in the first 9 months are EUR 800 million higher year-over-year. You usually have a negative working capital. So this should mean some cash inflow from working capital better than last year. But I believe, the contrary, I think the working capital cash inflow is EUR 100 million less than you had last year. Could I just double-check the moving part and what's happening there?

I think the second one on Markets + Airline, coming a bit back to the cost savings and transformation costs and benefits, I think you mentioned you'll provide us more details in December. But just ballpark for us to understand is this year the transformation program, is it a net headwind to the EBIT or the benefits are higher than the transformation cost? Could you give us a bit -- I'm trying to understand if this year there's a EUR 50 million, EUR 100 million benefit from the transformation or it's a headwind or anything like that?

And maybe the third one, if I may, just coming back to your guidance for a modest improvement in the net debt. If I look on Slide 33, I think that the segments which may be a bit more difficult, at least for me, to forecast is this movement in the lease and other repayments and other noncash additions to the lease. Could you talk a little bit about that?

So leaving aside the free cash flow generation, while the impact on the net debt from all these movements in the leases and additions and other movements, I think you've mentioned in Q3 you had a benefit from the FX on the dollar-denominated leases. I think that itself helps you by EUR 200 million. So could you help us for the full year roughly how we should think at these moving parts?

Yes. Maybe I can start with working capital. If you just look at Q3, you have a EUR 50 million softness in working capital, again this is something where I'm not kind of too excited to be out, to be honest. I mean, there's always what is exactly the date and how does it compare that plays a role in this. If you look at the order of magnitude, if you compare revenues to working capital, there's also the advanced bookings, which are included in working capital.

And that's if you just look at the trading statistics, which are a bit down, that's also reflected in this position. But in the end, that's something that over the full summer and over the full season, which will then go out. And I think, again, which is an even more important, is how is the winter for us because in the summer we are anywhere on the surplus cash with regard to seasonality.

On the third point, net debt, modest improvement. Yes, indeed, if you just look at what is the earnings and cash flow forecast operationally for the business, implicitly then you would be at a kind of good improvement on net debt. At the same time, we had order delivering, Boeing deliver in the winter and that has increased because they move directly on balance sheet our lease position, and that is netting some of this positive effect off. That's why we have a slight improvement only for the full year.

On the transformation cost effect on the results, one is, of course, we will always see operational improvements and we're working -- I mean, this is a step-by-step project. This is not like a turnkey project where in certain point of months you will see a very different business. This is stepwise. At the same time, when you look at our adjustments, we factor in kind of costs that would be involved in our fourth quarter in terms of realize some of these benefits.

And on the program, more details in December. It's a significant benefit we want to achieve. And I think it's important for us to really have the time to give you a full overview about that. And of course, the net costs were still bigger than the positive effect.

Can I add one short -- sorry, go ahead.

And the transformation then is one step to bring us to the 3%.

Can I add one short follow-up on the working capital? So Mathias, based on your answer you suggested that at the end of the year, the working capital should be pretty much aligned with the usual relationship. So this means that the usual EUR 600 million cash inflow you're seeing from working capital in Q4, that's more or less what you're counting on for this year, too?

And maybe secondly, looking at your -- in your balance sheet the Touristic payments received, I think this have increased year-over-year by something like 3% while your revenues have increased by 7%. Just double checking this increased competition in the market, does that materialize also by offering better payment terms for your customers or lower deposits or collecting money closer to the departure date, is this something you're seeing at an industry level or not really?

No, we're not seeing this. And these are 2 questions, but anyway and -- but the prepayment schedule and how they're coming in, advanced payments, this is fully in line with last year. I mean, this working capital, we see the cash flow is also the delta against prior year and that's where the trading position of the current year is reflected. And what I said is over the full season, I expect a fully normal working capital inflow and position.

And at the same time, of course, if we steer the business more for margin than volume, you will see an impact on the net development on working capital. But this is something I'm more relaxed about because in the end, to give away product in order to generate working capital would not be a good thing, to be honest.

Our next question comes from Jaina Mistry from Jefferies.

I've got three. First one is on your Hotels & Resorts segment, I wondered if you could quantify your pipeline of hotel rooms today and how that compares historically? So what the number would have been in [ 2019 ]?

My second question is around your EBIT guidance. I think you might have mentioned it earlier, but could you just go into more detail around why your guidance only implies flat EBIT growth in Q4?

And then lastly, my third question, I just wondered if you could give a bit more detail on your view on the health of the U.K. consumer. Bookings are flat in the winter in the U.K. so far. It appears that you've been losing share given Jet2 and easyJet holidays are putting on much more capacity. Can you talk about the competitive dynamics and your view on whether travel in the U.K. is slowing?

Yes, thank you. I can maybe start with the EBIT guidance. Indeed, mathematically, the guidance, as it's now said, allows us to be softer in Q4 versus prior year or flat. I think -- and if you just look at our segment expectations, then, indeed, the most important quarter for the Markets + Airline business we have reduced our forecast for the full year. And at the same time, the expectation for the product business, which is more evenly distributed amongst the quarter has increased.

On the hotel pipeline rooms, I mean, the capacity has increased. At the same time, also the number of management contracts have increased. I would stress that the IR team comes back to you with details on that.

And then maybe, Sebastian, some words on the health of the U.K. consumer.

I mean, I'm surprised how stable the U.K. market is. And the interesting question is how do you grow? Do you grow with significant increased risk capacity or are you growing with using the risk capacity? Yes, we have our airline. We will have an even better route network, thanks to the transformation.

But the growth will come through using a third-party network to use the dynamic packaging. And that leads to, in a way, that our passenger also counts if it's a Ryanair flight, at the Ryanair number. And therefore -- but it's initiated by us. We have stopped the losing of market share. We will gain market share by going more and more into the dynamic space. And that's why we are so confident with what we do see as one of the main markets where we see the benefits of the transformation first.

Our next question comes from Andre Juillard from Deutsche Bank.

Most of my questions were already answered, but just follow-up on the airlines and the cruise lines. Could you give us some more color about your intentions about financing? Do you plan to continue to end some lease contracts for the airlines and transform them into a full ownership? And have you made any progress on the financing of the 2 new ships from Marella?

Yes. Thank you. On the airline financing, I would say, generally, our strategy is to have more ownership and it's purely, I would say, the one -- biggest reason is operationally the flexibility we currently don't have. We profit a lot from the lease market, and at the same time, we want to continue to use opportunities that we have and that's particularly for leases that run out. I would expect that first deliveries, we would always naturally put into a lease structure so far for the coming time because of the benefits that we see there on the financing market.

And the same applies, because you asked for both, on the cruise side. So the financing offers for new ships, that's something which is very favorable and then that's something we would always go for. And then once the ships are used, you can see how you steer leverage.

On the Marella new ship financing. This is all going well to plan and we are very pleased with the developments on the financing side there.

Our next question comes from Jurgen Kolb from Kepler Cheuvreux.

Two questions from my side, a follow-up on the Airline business here. Is there an ideal share of owned airlines? Or is that rather a moving target that you decide on the opportunities and whenever or whatever is possible?

And then secondly, on the bookings, Germany, down 5%, summer. What are you seeing in terms of length of the vacations? Are people or are the consumers in Germany specifically also cutting down on the length? Or is it (just) the number of bookings that is down?

And maybe one additional one, so that makes 3. How are you planning the winter period? I would assume no capacity increase because you want to grow with dynamic packaging, but maybe some words on how you're seeing the winter period coming along.

Welcome. We have not really focused on airline. Part of the transformation is -- with huge benefits is to making out of 1, 2, 3, 4, 5 airlines, 1 airline. We had the model that the source market had an airline. We had some global synergies. But now -- and we have the management team together. We are implementing 1 airline at the end with 2 AOCs, one for the U.K., unfortunately needed, and one for Europe.

So a lot of benefits to have 1 integrated airline cost benefit, but also revenue airlines. We don't sell from the designation. So if a Spanish customer wants to go to London or Frankfurt, he has to visit different sites. And that's all changing. So a big change and that will increase efficiency.

When you talk about capacity, there are 2 things easy to address. One is the dynamic packaging, and that's the main focus. But we also have had a lot of efficiency, not used efficiency gains. By building 1 airline, we are able to -- without having more aircraft, without having more pilots, we can increase the utilization significantly. This also will lead to do better product and less cost.

So this is a huge change. And with the price to win is high and we have now the structure built, we have the management team, we have made a lot of decisions, we will have a combined fleet plan for the next summer. So a lot of great things we are looking forward to.

And in a way, it's the normal -- it has been a big change for TUI because, of course, it changed the OT. But if you look at the main airlines, no one would have run it as we have done it. And with the new management team, David Schelp and so on, we were able to address it.

When you talk about German trading trends, I think a lot of things have been onetime effects, but also a kind of a consumer sentiment. And therefore, it's so important that we go into market segments where we haven't been in.

The stay length has become -- at least that's my -- what I do see at the moment, slightly less long, which is -- I mean, during COVID or after COVID, we saw an increase by 1 day. This is getting more normal than as it was before.

And winter capacity change, I answered. There will be more capacity or a little bit more capacity through dynamic packaging. Again, it's not only airline capacity. It's also bed capacity.

And second, in the system, we had a lot of opportunities to increase efficiency and that's what we are doing. And again, not only on the airline side, but also why, as I said, we try to be -- having better offers -- or more offers, not better, more offers on the shoulder season to have hotels longer open till January in Greece and Turkey and that should also help us with the same cost structure to increase capacity.

We are not planning to have X aircraft more and so on. We want to -- we have still a huge potential in increasing efficiency.

Our next question comes from Karan Puri from JPMorgan.

Three quick questions from my end. The first one is on group EBIT sensitivity to top line growth within Markets + Airline. I'm wondering if you could share something on the drop-through here?

Second one is again on the Q4 implied EBIT growth coming in slightly softer than previously expected. Sorry if I missed it, but just if you could touch a bit on the phasing between Q3 and Q4 once again.

And the last one is on your sort of evolution of German market share in the context of the minus 5% bookings that you communicated today.

Again, I mean, the biggest part of the profit of TUI is Holiday Experiences. And we get all the questions on Markets + Airline, yes, we have room for improvement. The important thing is that through steering, we further improve the Holiday Experience business and that's what we do very well. And therefore, the sensitivity, you're probably asking a downward sensitivity, is very limited or not existing in Markets + Airline. Yes, there is a huge opportunity with the transformation and so on. So that's why we are so positive when it comes to the outlook into the outer years.

And to add on this, I mean, this is not really -- the business is driven by margin. That's how they're also steered by our colleagues.

And to give you an example Nordics, with less capacity, so less revenues, they will do better results this year than last year. It's about where are you with your capacity, where is the market and what is the right capacity in terms of risk profile and product profile. So I think that's fine.

I think the second question or third one was about phasing between Q3 and Q4. I think I can just repeat what I said before. So if you look at our guidance target, we can achieve the new upgraded guidance for the group with even a softer Q4. And on that basis, we have defined our guidance targets.

And the market share question is an interesting one. Our market share in the Tours business is maybe 3%, but our natural market share should be 30%. On the city trips, it's maybe 5%, it should be 30%. If you look at the market share, 4-, 5-star segment hotels differentiated, we increased significantly the market share.

What we didn't do is in a soft market increase the market share, which is very low in the 2- or 3-star undifferentiated product because, as Mathias said, it's all about positive margin. It's not all about volume.

Yes, the cost we will take out will make us also more competitive at the lower end, but we have to be very, very careful there because especially in the soft market -- and you see the example of FTI. As I said, it was a good company, but they were loss-making because they were in a segment where it's really difficult: high prepayments, undifferentiated product to earn money with.

And therefore, in this market condition, we said we are very careful there because increased market share would have meant increased losses. That's why we focus very much on the 4-, 5-star differentiated product market.

Makes sense. Just if it's possible to sort of give sort of a high-level understanding of blended market share in this context. Just trying to understand what the market is doing in terms of bookings versus minus 5%?

So in winter, we have gained significant market share. In summer, I would at least expect that the market share is stable.

Our next question comes from Muneeba Kayani from Bank of America.

First question, on Cruises, it's a clearly strong performance this year and I see your guidance upgrade on that specific segment. As we think about next year on Cruises, can you talk about the building blocks for this business and separately between JV and Marella? What's your visibility for next year at this point?

And then also on the cash flow side from Cruises and the dividends, you've clearly said it for this year, but also a bit of thinking about it for next year. So that's my first question around just overall Cruises into next year.

And then secondly, just on FX. So your guidance is at constant currency. There was a EUR 10 million headwind in the third quarter. What are the moving parts on FX for the fourth quarter as we model out reported EBIT?

We have given you the ambition for the next years, which includes next year, which includes also that we are positive on the Cruise. One thing is a fact that there is one more ship to come. And I also gave you an indication that the bookings looking forward are promising. So that's why we are optimistic for the Cruise sector.

For TUI Cruises, one ship more, big ship more. Marella, very well booked, very stable operation, optimizing yield also positive. And the real guidance -- and therefore, I should say about our ambition for the next year, not guidance, ambition for the next year and the full guidance you will get in December, including the cost program.

And I was told -- I should not talk about cost program. It's because it's the effect, which we do it not as a cost program. It's the automatic effect that you have one sales system, one buying system, one airline system and that leads to automatic cost saving and real significant cost savings.

Foreign exchange?

Yes. Thank you. And indeed, I mean, on FX, again, when we looked at the start of the year with the currencies that we had at that point in time, if you just look at the euro-to-pound relation, we would have seen losses translating at rate and then the earnings in the summer coming back at the same rate.

Now in the summer, the relation has changed and now the euro is stronger. So we get less income in pounds when we translate that into euros. And I think that's something, which we will also see in the fourth quarter.

So if currency stays where they are, there is not expected to be a big catch-up against where we are accumulated as of Q3.

Our next question comes from Andrew Lobbenberg from Barclays.

And apologies if these questions have been answered as I did join rather late. But I'd like to ask about the transaction buying back the aircraft from the lessors. What motivated that? And what are the economic benefits? If I look across some of the other airlines, we've seen Norwegian and easyJet do similar things and they've had really quite strong P&L benefits from these moves. Are you going to be seeing the same sort of P&L benefits from this transaction?

And then my second question would relate to the change to your CapEx guidance, which is a bit more money for the Marella new boats that are being built. Does this give us any indication in how your funding strategy has evolved for the 2 new boats? Does it change whether there's a likelihood of Marella staying on balance sheet or being moved off balance sheet? And apologies if they've already been asked.

Because as an expert, Mathias, you go into the details. Being 40 years in the business, I have learned if you buy aircraft when the euro is strong and you sell aircraft when the dollar is strong and that you can only do when you have ownership. It's a long way to go for us, but this is a fundamental part of the benefits of the P&L of other airlines.

And therefore, if you can -- and of course, there are other reasons. One, when you want to keep, besides the currency, sometimes it has to do with optimizing the maintenance cost, the difference between lease rates and purchase contracts you have. So it's more than the currency. But if you do that well, you have an income stream, which you don't have, if you rely on leases. And that's why in Ryanair is 90-plus percent, easyJet has 70% or 60% to 70% and they all move into this direction.

So again, this is part of the transformation of TUI, or as Mathias would say, optimization of financing.

Yes. And I think just to reconfirm this, this is triggered by the optimization of our financing portfolio. So we take the opportunity of leases that are up for renewal that we kind of replace them with these proceeds. But also to be clear about this, we haven't factored any other benefits other than the operational for the Airline team. And the kind of financing structure benefits that we have on balance sheet interest on -- and cash flow into our models internally.

And on Marella, maybe you can take this up with the IR team as well what is triggering the question because from my point of view, we haven't changed our view between H1 and Q3. In H1, we already announced this EUR 50 million payment that would be triggered by signing of the contract with the shipyard. The contract has been signed. So the payment has been triggered, and the amount is the same.

We currently have no further questions. So I'll hand back to Sebastian for closing remarks.

Thank you. As said, we are building on our strength, and I would like -- really to like our team and sometimes challenging market conditions, we are really working hard on a successful transformation, and the team is doing a great job. It's the same on the optimization of the investment policy we have on Holiday Experiences.

And above all, it's the integration, which helps us to get -- to have the best usage and the most profitable usage of our assets, and that's what you do see with the outstanding result. And Holiday Experiences is working extremely well to optimize their result, and that is not God-given.

It's the result of very tough work, and I'm really grateful about, and I probably can talk also for Mathias, really grateful of what the team is doing because this degree of change including being more product, having higher productivities is outstanding and I have not seen before in TUI.

So thank you for participating on this journey. I always said TUI of today is different to TUI of yesterday. It will be different to TUI tomorrow, and we are, as the result of the third quarter shows, on the right track. Thank you very much.