TUI AG (TUI1) Earnings Call Transcript & Summary

Hello, and welcome to the TUI FY '20 Results Conference Call. My name is Molly, and I'll be your coordinator for today's event. Please note that this call is being recorded. [Operator Instructions] I would now like to hand you over to your host, Friedrich Joussen, to begin today's conference. Thank you.

Thank you very much, and good morning, everybody, to our virtual conference. It's not only virtual for you. It's also virtual for us, I don't sit with the team right now, but I hope it will be working well. Let me turn to Page #3 to show you a little bit what we will be doing. I will be doing opening statement and set the scene, then Birgit will talk about in Section 2 and 3 about results, and again, the support package and the latest status there and our thinkings. I will be talking about market trends and the next year perspective, and then actually, we have the honor to introduce our new CFO. As you know, Birgit will be leaving, and we are very sad about that. And we have -- but the new CFO is an old companion, not only to me, but also to the company, very experienced in the industry. And Sebastian will actually introduce himself at the end of the meeting. So now turning to Page #4. You can say that COVID-19 has been the greatest crisis in the tourism sector and also for us. And you see that reflected in financial year '20 results. The good thing is, I think when you look at vaccination news coming, testing news coming, when you look at the booking patterns, when you look at all this, I think we have seen the worst, and also with our new financing package, I think we will be able to look through the crisis. So that's something which -- it's not a pretty picture for financial year '20, but fortunately, it's past. We actually -- in year '20, we, of course, saw an incredibly strong start, of course, also with a consolidated market with Thomas Cook not being there anymore. January, February was fabulous, we added capacities everywhere, and then a standstill. So that was something we needed to tackle. And we took out cost. But now I think after start and stop of bookings in the summer and also in the winter, we are now looking at 82% down in capacities. I believe that, still, it is a business that's good, and we will see that. I believe, particularly when you look at summer, it will be different. I mean, the one before last bullet says, 50% of capacity sold in May, which is the first summer month, and of course, in subsequent months even relatively better. And we will also talk a little bit about the relative price, which is up 14%. So it's good selling levels. It's even better than good prices. And therefore, if we don't close down next summer again, and the likelihood is very low with the vaccine and the new testing regimes found and the corridors which we are working against, I think we'll have seen the worst. Now bullet point #4 on this slide talks about the realignment program. We took -- not only took out 70% of cost immediately and after the lockdown in March, but also, we put up a realignment program, which does 2 things: first of all, it reduces dramatically cost; and secondly, it pushes digitalization so that cost savings don't go in line with quality deterioration. Here, that's -- the process is right now one process everywhere, one system everywhere and fully digital. And we are now confident enough to increase our target from EUR 300 million annual savings to EUR 400 million annual savings. So we tightened the program. We are executing well. We are running in front -- we are in front of our objectives. And therefore, we are now confident to commit to EUR 400 million annual savings, which is, of course, good. If you look through the crisis, a much different cost structure. Additional support package we talked about, and that's very important for 3 things. First of all, it provides -- of the EUR 1.8 billion, EUR 1.5 billion are additional liquidity. EUR 300 million go out for actually the repayment of the bond. The second thing is it is largely equity and -- are equity-related or equity-closed instruments and also guarantees. That means no debt or very limited debt. And that is important for the balance sheet long term. And lastly, with that package, we move out first maturities of our debt instruments from, actually, second quarter or quarter starting April next year to the quarter starting July in '22. And that gives us more than 18 months. And when you think about the whole crisis, only 9 months, it's a lot of time where we can actually take care of the ways how we repay and structure our debt and balance sheet positions. And then lastly, on that slide, significant positive market reactions on the announcement, I mean, just the share price. Just that we were, right now, in a position to structure our new financing round. Also including EUR 500 million of equity raised was something as a consequence of just the vaccine announcement. And obviously, this is something which customers, but also you, as investors, see as a turning point. And combined with antigen testing, I think it is what we also believe a turning point for our company. So I believe we are strongly positioned to benefit from market recovery, which no doubt will come. Demand is there. Of course, now restrictions are more regulatory and legal and not demand-driven, and therefore, we can resume the growth trajectory as soon as markets open up again. Now I have now talked about Slide #5 and 6 in my summary. And maybe let me, before I hand over to Birgit, turn to Page #8. And here, you see the full year numbers and Q4 numbers. Revenue is maybe not so interesting. The only thing you see, it is EUR 8 billion. So it is minus 58%. So it has been a very restricted year. Okay. It's not a surprise. But maybe focusing on to the full year EBIT, it is minus EUR 3 billion. That is, of course, when you take into account -- let's take into account the impairments, the bottom largely impairment-driven one-off effect here. The impairment is because of the higher WACC, just an accounting thing. But EUR 2.2 billion, EUR 2.4 billion of this EUR 3 billion are the potentially additional debt, which is there. It's not all additional debt, but largely. And Birgit will talk about it because, just to get it right, what is there to stay, if you look at liquidity and the cash burn we have, largely, it's also driven by the payout of customer -- the prepayments, which, of course, will immediately flow as working capital into the system, again, as soon as the business starts again. But Birgit will highlight that a little bit more in detail. It's not a pretty number. But fortunately, it is a view into the past and not view into the future. And I will be coming back with a view into the future and hand over to Birgit right now starting with Page #9.

Thank you, Fritz, and good morning to you all. So I will be taking you through the financials, starting with the usual EBIT bridge schedule on Page 8. Sorry, there is an echo. Okay. So on the left, we start with our fiscal year '19, underlying EBIT of EUR 893 million. And we then added the positive contribution from our strong first 5-month performance, and this brings us to EUR 990 million. And for a transparent view, we are adding back EUR 140 million of non-repeat of the Boeing MAX grounding costs as compared to the previous period. And as you can see from the next bar, the overall COVID-19 impact for this fiscal year amounted to EUR 3.4 billion in total, of which EUR 2.2 billion relates to the fourth quarter. And the next block represents the full year impact of our impairments change versus prior year, and this is an increase of EUR 505 million, and of which the majority occurs in the 9-month period, as discussed with you during our last quarter results. And the full year amount consists of the following buckets: it's roughly EUR 200 million for Hotels & Resorts; EUR 150 million for the Marella Cruise ships; and EUR 150 million for other impairments, and these are mainly cost-related. And as a reminder, the impairments were triggered due to the higher WACC from an increased market risk premium, which results in a higher discount on our planned future cash flows. And then the last block here, as you can see, we equally recorded an impact of nearly EUR 250 million of hedging ineffectiveness, and this is due to a reassessment of capacity requirements related to COVID-19. And as a result, our overall underlying EBIT recorded was EUR 3 billion loss for the fiscal year. So moving over to Slide 9. You will find our income statement with explanations on a like-for-like basis under IAS 17. And I will be really brief with my comments as our figures are impacted by COVID-19, and a more detailed analysis is meaningless. So I'd like to highlight once again our achievements on fixed cost reductions. So in the fourth quarter, we delivered a fixed cost run rate of EUR 260 million, which is fully in line with our internal expectations. And this really demonstrated that during the COVID-19 pandemic, we managed to substantially reduce our cost saves, and it also demonstrates our ability to rapidly react and decrease our operational gearing in an absolute crisis situation. And as mentioned in my previous slides, and that's what you can see here, the total impairment in underlying EBIT amounts to EUR 550 million, and -- of which EUR 209 million lies in underlying EBITDA and EUR 306 million in D&A. And then allow me one comment on the adjustments, which resulted in a net positive of EUR 70 million, and this consists of restructuring costs and PPA with a total of nearly EUR 400 million and an impairment on goodwill and property of roughly EUR 100 million. And the adjustments are more than offset by the successful disposals of Hapag-Lloyd Cruises and our Specialist business. Another P&L position I would like to comment on is the increase in net interest, predominantly reflecting the utilization of the RCF and the first KfW facility. Then moving to Slide 10, and this is the 12-month period cash flow. And in this unprecedented situation, and as we discussed also during all the previous calls, managing cash flow and liquidity really remained the #1 key priority for us, and we actively addressed the cash items in our control. So let's go then through the main drivers of the fiscal year '20 cash flow. And then here, as you know, the group's underlying EBITDA loss is driven by the COVID-19 standstill, the related impairments and also the impact on hedging ineffectiveness, which I discussed on the bridge as well. And then the working capital outflow, such a major component here, is mainly driven by refund obligations due to the continuous restrictions on travel and also the settlement of trade payables. And a few elements I would like to point out, the EUR 800 million decrease in customer deposits compared to prior year, and we will be able to utilize EUR 300 million of prepayments made before the pandemic. So as a result, we expect the working capital position to recover as soon as operations restart and people start booking again. So we managed to reduce net investments, so this is also important to note here, and in a significant way, reflecting our decision to pause all projects in Q3 and Q4. So compared to our previous operating guidance range, we nearly halved our spend. And additionally, the sale of the German Specialist business and the disposal proceeds from the Hapag-Lloyd transactions more than offset our net investments, resulting in a positive inflow of EUR 150 million. And as you know, our dividends were paid before the pandemic. And our financing cash flow reflects the full utilization of our RCF and the first tranche of our KfW facility. And Sebastian will later talk about certain P&L and cash flow assumptions for the full year '21. So then if we move to Slide 11 on the net debt. And then the table on the left is driven by the negative free cash flow after dividends of roughly EUR 3.6 billion as the other items, you could see match each other out. And then so I will, therefore, focus my comments on the net debt and financing table on the right-hand side of the chart. And here, you see the increase in net debt by EUR 3.6 billion. It's mainly driven by the components we already discussed, like our losses in the reported EBITDA, our working capital outflow and then also further impact of EUR 0.3 billion, consisting of the dividends and other cash flow and net debt items. And the number, it is important to note, the number of EUR 3.6 billion does not yet reflect the second and the third support packages, which I will detail in a minute. And then for the financing of the EUR 3.6 billion, we utilized our existing RCF, the first KfW support package, and we drew upon our cash position. So let me now come to the additional support package, which we announced a week ago. But first, let me introduce it a bit on Slide 13 with the latest development since our pre-close trading update and what has changed since then. So as of late September, our business was significantly impacted by the increase in COVID-19 infection rates. And as you know, this led to a new lockdown-like situation, which led to customer uncertainty regarding new bookings and also timing of bookings. And so we therefore further adjusted our planning scenarios and expect the H1 liquidity to be lower and working capital recovery to be later than originally anticipated. And these reasons led to the negotiation of the further support package, securing another EUR 1.8 billion, bridging us to the expected travel recovery. So -- and then on Slide 14, the -- and here, I will not go into this -- on this slide, but it does show you also from the colors, unfortunately, a lot of red, but it shows you the complexity of managing the opening and closing of travel destinations across our various markets. And as you can equally see from the predominant red shading for the first quarter of our fiscal year 2021, most markets remains closed for travel. So then if we move to Slide 15. This is regarding liquidity outflow. And as I already said, our liquidity outflow for the first half of 2021 is slightly higher than initially expected due to the renewed travel restriction. And our Q4 monthly cash outflow has developed entirely in line with our expectations. And then the Q1 of our fiscal year 2021 will result in a higher liquidity outflow due to the restricted travel situation, which I already described and which you saw from the previous page. So we therefore expect a range of EUR 400 million to EUR 450 million of monthly cash outflows, which equally includes supplier payments. We assume development for Q2 for the fiscal year 2021, it will be driven by 2 main factors: so the net costs in the range of EUR 250 million to EUR 300 million, and also a working capital development, which will depend on the COVID-19 situation at the time. So that is difficult to predict right now. Then on Slide 16, and you know this page because this page was presented to you last week during our management call, and it was presented by Fritz and Peter. And it shows the deal components for a total amount of EUR 1.8 billion. And the package is based on support of the government and also shareholders, with a significant support of our major shareholder, Unifirm, representing the Mordashov family, and it's also supported by a syndicate of banks on the debt and on the capital increase side. So let me then quickly go over the deal again with the 4-deal components. So the first component relates to the economic stabilization funds from the German state, which is called WSF, and it consists of 2 hybrid facilities, which are silent participations of a total of EUR 700 million. And in the appendix of the presentation, you will find more details on this deal structure. And the first facility is a EUR 420 million hybrid with the conversion option into TUI shares, but only up to a maximum of 25% plus 1 share at the conversion price of EUR 1. So this is a straight convertible. And the second facility is a net EUR 280 million hybrid, and this is a hybrid of subordinated instruments, which also receives IFRS equity credit. And as you can see from the chart, this is a leasing framework agreement for the entire deal. And then the second component, on the right-hand side, relates to a EUR 200 million additional revolving credit facility supported by the KFW. And the main difference with the existing KfW credit lines is that this will be a secured line as opposed to the other lines which are unsecured. And other than that, the terms are in alignment with the previously agreed lines. And at the same time, we are able to prolong the maturity of EUR 500 million tranche, which was due at the 1st of April '21, and we were able to extend that to July 2022. And then the third component is a EUR 400 million state guarantee, which will unlock existing cash collaterals, which we accumulated this past periods. And this is, as we already explained, on the back of our credit rating and current situation. And these collaterals related to European regulatory authorities and also credit cards providers, and this is really good news because this can now freed up instead of being restricted to cash. And it therefore strengthens our liquidity position with an equivalent amount. And in addition, mentioned as an alternative here, there is a clause in the [ KfW ] reverse term sheet, that the Hybrid II will be increased by an equivalent EUR 400 million as a potential bridge and fall-back in case the state guarantees will not materialize. And then the fourth component is a EUR 500 million capital increase available to all of our existing shareholders. And we plan to reduce our nominal value of shares from EUR 2.56 to EUR 1, and we plan to issue 500 million new shares at EUR 1 net. Issued price will be EUR 1.07 to include the transaction cost, but the net proceed are EUR 1 per share. And all shareholders are invited to participate as this is a capital raise with subscription rights, and the EUR 500 million is fully underwritten by Unifirm and also a syndicate of 4 banks, of which 2 banks are our brokers. And EUR 300 million of the EUR 500 million proceeds will be used to repay our senior bonds outstanding with the maturity in October '21. And as a result, our first maturity will be in July '22. So then if we then move to Slide 17, this relates to the equity-related components. You can see that an EGM resolution is planned for January to reduce the nominal value per share from EUR 2.56 to EUR 1 as well as an increase of conditional capital to enable the conversion rights of Hybrid I, and then an authorization of the equity capital raise and also a rights issue -- sorry, and the resolution on the EUR 420 million hybrid bond, which I already mentioned. And then just to note that the rights issue will be executed under German law and U.K. listing rules. And then on Slide 18, you can see an overview of the time line. And then from today on, the next step is to send out an invitation for an Extraordinary General Meeting to, as I -- and I already mentioned, that to have a resolution by the shareholders on the capital reduction from the EUR 2.56 to EUR 1 nominal value to get the evolution for the EUR 500 million capital increase and to have a resolution on the EUR 420 million Hybrid I. And then in general, we will hold a virtual extraordinary general meeting. And soon thereafter, we are planning to launch the rights issue, which according to German standards, foresees a 2-week subscription offer period. And during the subscription offer period, investors can decide to participate the capital increase, and then the settlement will follow shortly after the last day of the subscription offer period. And then if we move to Slide 19, which is, from my page, the last slide. So the support package really underpins the strong trust, alignment and also commitment from the German state and our main shareholder, Unifirm, representing the Mordashov family. It increases our equity base by EUR 800 million on an IFRS 16 base, and it allows us to repay the EUR 300 million bond, and through this, extend our maturity profile until July 2022. And important to note is that the 30th of November, our pro forma liquidity, including the support package, amounts EUR 2.5 billion. And on the right-hand side, the table represents a reconciliation from our cash and available facilities since the beginning of the pandemic until the 30th of November. And let me once again highlight that we saw a liquidity outflow of EUR 3.4 billion, of which EUR 1.7 billion relates to working capital and EUR 450 million -- or EUR 400 million to EUR 450 million of cash collaterals. And we expect the working capital to recover with the normalization of travel, and the cash collaterals will be freed up by the state guarantees of EUR 400 million. Now before I hand over to Fritz, I would like to thank you for our interactions over the past 2.5 years, not only during this COVID crisis, but equally during the Boeing MAX crisis. And despite the difficult external challenges we faced, I felt you have been understanding for the situation, and I equally felt we had very constructive one-to-one meetings together. So I'm happy that TUI secured its financing for the next phase to come, and I also trust that in terms of immediate liquidity crisis, we have now seen the worst. And so from here, so we should be able to build up again and come out winning, which Fritz and Sebastian will talk about later and now as of the next slide. So thanks again. And with that, let me hand over to Fritz.

Birgit, thank you very much. You are -- this was a departing message, but you are not departing yet because you will answer the Q&A and the remainder, so please stay around. And I just would like to talk a little bit about the future because, I think, last year has been last year. And now, let's look forward. And the first question, of course, which everybody puts top on the agenda, do we have a market? Or do we have a regulatory issue? And here, I have a couple of information and slides which actually show very clearly that's not only we think that it was largely a regulatory ratio. So people actually were not allowed to travel, but they want to travel. And the first one is -- the first picture I have here is actually the Euromonitor market research, which actually says that the market will be back very fast. In '22, we will see year levels of '19 and even in '21, which is we now started the year, is EUR 1.3 billion. And that, I think, is very promising because not only the markets will be back. The markets will be back. But through the crisis, and even before the crisis, we saw consolidation happening. So that was the reason for the very strong start in 2020. And even after the crisis, even more consolidation will have happened, and therefore, we will see a strong demand, a pent-up demand, and we will see a more consolidated market. When you look at the whole thing from a customer perspective, I think it's worth looking at the Boston Consulting consumer sentiment survey, which lately came out. And what is -- this graph on the left is all about is different customer groups. On top, from left to right, you see the split by age, so generation Z and millennials, Generation X and me, the Baby Boomers, and so my generation. And you see household income per capita, so highest and lowest quartile, so it spans all the incomes. And you see different rankings of demand, which is the missed categories. And interesting, everything is different, but leisure travel. Leisure travel is the one -- priority one amongst all age groups and amongst all incomes. And as most of travel, we usually say the most of travel, the core of travel is done every second year. We see that and we believe, and also our booking indicates already, is that people couldn't go this year, and therefore, there will be an enormous pent-up demand next year. And that is, I think, very important. Safety also will remain important, which is, I think, also good for us because we are taking care of our business model. For our customer safety, we -- for example, we provide people who travel right now with full screening testing. So that's -- I think that's very good. And so safety is coming up as an important issue alongside with price and other components. Now a little bit of anecdotes. I mean, it is what the customer experienced firsthand, and I just brought a couple of examples. When we opened Palma on the 15th (sic) [ 15th of June ] from Germany, we were sold-out in 36 hours. I mean this is very unusual. I mean it seems to be that people were waiting in front of the PC, how they could book. Actually, it was all online, right? So I mean, the online is already back on previous year's levels, and the thing which is missing is actually the retail. That's also, by the way, one of the reasons for this strong restructuring we are looking at. So then when you look at Canaries in October, so just 5 months later, 50% of capacity was sold in 1 week. In the U.K., that's another example, 20,000 bookings in 10 days after the Canary Islands reopened before October half term. So I mean, you see it's enormous demand once you open. But even long haul, I mean, first flight to St. Lucia, a load factor of 98%. You think, usually, people with masks and so on, that is something -- maybe people would not like not to travel, but they do. What also is interesting, all 3 flights, and this were the 1, 3 -- and one, second and third flight to St. Lucia, load factors increased over 10% week-on-week after -- in the last week. I mean, this is usually not happening. So you see late booking trends happening. But also, one example from our Robinson brand, Esquinzo and Jandia which are both on the Canaries, improved 400% -- 430% and 300%, respectively, year-over-year the first 2 weeks of November '20. So I mean we opened more or less the Canaries again, and you see this kind of bookings as soon as you are opening. The demand is there. Now when I look into the booking development. And you see on the next slide, left, winter '20 and -- in the graphs, and then with the dotted line, summer '21. You see on the bottom the 20% capacity for winter. So it's a very small program and it's very volatile here. And booking is down 82%. it's in line with capacity, and over the last weeks even improved a little bit. Every sales prices are good. I mean, it's 4% up. So that's something good. And now as we have also seen the reopening in the U.K., I would say for the corridors, we will see improving trends. But for summer, I think it's important, our total net bookings are 10% down versus '20. But '20 was already very strong because Thomas Cook was gone. But when you look at summer '19, which is more normalized, we are still 3% up. And the interesting thing is we have 14% up on price. And that actually says something about the pent-up demand. People are trading up, that people are saying, "The summer will come and the demand will be there and travel will be possible." So the perception of scarcity, I think, is also potentially a driver. U.K. is the market which was opened first. It's 19% -- even there, it's 19% up versus the summer '20. So where we had bookings in, we are still running significantly ahead of summer -- the very strong summer '20 bookings. And maybe one additional data point, which I also provide on my summary page. The first big month of summer is actually May, and we are 50% sold. So the good thing is, I mean, summer is running well. And maybe on the next slide, you'll see interesting left booking weeks and days: booking days in winter, left; and summer, right. And interestingly enough, after the vaccine announcement, the winter was okay, doing okay-ish, yes? But the summer bookings really picked up right now. And that actually says something about the perception of customers that summer '21 will be a recovered market. Now one -- the important component is, of course, the debt we accrue. And we are very aware that we will have to be more lean and agile and much more profitable than in the past. So that's the reason why we have the realignment program. We call it realignment program because it's not only about cost reduction, it's also about driving digitalization. So the obstacle usually is when you reduce costs, you reduce quality, but we are very aware that we -- and we are very focused on increasing quality and reducing cost. And that is possible with our digitalization program, which we started 2 years ago, but we are driving much faster right now because we have less traffic in our systems. The migration to the new architecture is easier. And on the right side, you see that we are committing now to EUR 400 million annual savings starting in '23. And the reason for that is not additional programs. It is what it is. The progress and the focus is in the middle, yes? But we are, first of all, executing faster. Secondly, we are executing more on the higher end of our initial assumptions, which have been above EUR 300 million anyway. But when we talked about the first time, we didn't want to overcommit, so we talked about EUR 300 million. Now we can talk about EUR 400 million because the programs are firming up, and we are running ahead of our savings targets. So then maybe one example I wanted to do around digitalization, it's just one proof point of our digital strategy. And I took our newest hotel brand, TUI Blue, where actually, we have now -- we increased our active customer base from last year with almost 200%. But even more important, the bookings which we got in the app actually has almost quadrupled. So it's up 350%. So the bookings per user has actually increased, right? And that's -- and at the same time, the appreciation of the app is extremely high. So it's the most popular app in the App Store. So you see here, 8.5 CSQ. So it's quality, up; redemption, up; profits, up. We are closer to the customer. And of course, this is a huge driver that, for example, in that case, we can actually reduce staff in TUI Musement, in Destination, the staff which was usually selling activities in Destination. Now let me talk very briefly before I conclude on some industry fundamentals after the crisis. I think it's a very clear, in Markets & Airlines, we will see later booking profiles. We are seeing later booking profiles. And that will stay a little bit. We believe that long-haul will recover fast when the vaccine is available and the testing is available. We see that right now. Good long-haul programs even in very small destinations. So Mexico is not open from Europe. Dominican Republic are not open. But as we open for example, Cuba, immediately, there is demand here. So the demand will not only be short-haul and general leisure travel. It will be also long-haul. That's what we believe. Anyway, we will see an oversupply in the online market in the foreseeable future. That's the reason why we reduced our fleet 20%, at least 20% restructuring in Germany, one platform. But we also believe in own airline, or the control of an airline will stay instrumental in our end-to-end model. So that's how we see Markets & Airlines, less exposure, less commitment but control. Then on Hotels, top right. Short term, we will see overcapacities. Strong hotel brands will benefit. So with our club brands, with our Rio Blue and so on hotel brands, we are well positioned. People who can produce traffic and who can produce a guaranteed demand will be best placed to actually gain in this recovering market. So brand, product, digital capabilities and also sales will be important, and we believe we are well positioned. In Cruises, this is -- we expect to recover strongly when the vaccine is available and testing, and the strong recovery will lead to enormous shortage of supply. And we had shortage of supply before the crisis. Now in the crisis, many cruise companies have actually scrapped old capacities and actually have stopped investments into new capacities. So therefore, we believe the demand will be high and the supply will be short. So as soon as it recovers, a good and very profitable market. TUI Musement, more or less, nothing changed. I mean, we believe in -- the activity market is the third biggest touristic market. It's very -- many players, it's not consolidated, it's not digitalized. And therefore, our platform strategy will not only take advantage of the growth, but also will take advantage of the digitalization and consolidation of the market long term. And therefore, it stays -- this part of the business has been in the last 8 years, a major pillar for our future growth, and it will stay. And when I look in the next slide, then it is more or less the strategic picture or the strategic road map of TUI. And we believe that the transformed TUI will be -- which is leaner, which is more digital, less capital-intensive, is in a great position to take advantage of recovering markets and -- as markets still have the demand but we're regulated down and drive profitable growth. And on my concluding slides, again, let's say, the history and future of the crisis, we had a strong start of the year. We had an enormous lockdown. We took the chance to acquire liquidity, to take down costs immediately and look through the crisis to accelerate our transformation into a leaner and agile structure. And I think when you look at the booking trends right now, when you look at latest developments with testing and vaccination, we will return into a profitable growth soon with a stronger position, less capital-intensive and more digital company. That's it from my side. And before we take now questions of you, I would like to hand over to Sebastian, who is long-term in the company, has been responsible for all our assets in Hotel & Cruise and Destination businesses and now will, the 1st of January, take the role of CFO of the company. Sebastian, your stage.

Thank you, Fritz. First, I would like to thank Birgit for the smooth hand-over transition. It has been good working with you. And I'm really looking forward to the new role. And as Fritz rightly said, I've been almost 30 years in the company, and I also had finance roles before. We are all aware of this current situation, hardly any revenues until March. We were able to secure liquidity very quickly. And we also looked into the different scenarios, a resumption in spring '21, but also in a prolonged imposition of international travel bans to secure TUI's future. Therefore, we further were able to secure a support -- another support package, which gives us sufficient liquidity reserves in this volatile market for '21. And of course, we are looking in a variety of other options to further enhance our liquidity position and to rebuild a solid finance profile. If you go to Slide 34. These are my priorities for the next coming month to really drive the recovery and to work towards a healthy balance sheet structure. First, manage the liquidity, we -- the execution of the third support package, a very disciplined CapEx management, which is very important, and to work on other divestments, sale and manage back possibilities. Second, to drive revenues and earnings. The most important thing is, of course, that we are able to be significant profitable. One important thing is as the demand will vary, to optimize the capacity, we have done very well in achieving less fixed cost, which will help us to cope with demand changes to execute the global realignment program, and of course, to continue cost discipline and improving the quality through digitalization. The good thing is that this goes hand-in-hand. We can further reduce costs by improving the service to the customer, and to drive to its transformation to return to a growth path to take all the opportunities we do see today for the future of tourism. And last point, to optimize the financing. To focus on asset-right strategy for airlines, for hotels, also for cruise, to manage the debt and the related interest cost and to look and to follow -- to monitor capital markets options, which we do see. So at the end, we will have a solid and healthy balance sheet and to return to a gross leverage ratio target of less than 3. Thanks a lot.

So with that, thank you very much, Sebastian. We now open -- operator, can you please manage now the Q&A session? Thank you.

[Operator Instructions] The first question comes from the line of Jamie Rollo calling from Morgan Stanley.

First question is just on the leverage number. I know you like to look at gross financial debt, which I don't think is in the presentation, but it looks to be about EUR 8.3 billion from the annual report at September. And I suppose that must have increased to maybe EUR 10 billion since then if you draw down on the second and third debt instruments. And that's about 3x last year's EBITDA, FY 2019 EBITDA. So that's 5x 2019 EBITDA. How do you get that down to the 3x target? I mean, I can see that working capital might take EUR 1 billion off that, but that still leaves a gap of about EUR 3 billion. Secondly, sticking with debt, the Cruise JV debt is up to EUR 3.3 billion at year-end, up about EUR 1 billion from that Hapag-Lloyd transaction. I'm just wondering how that is financed and whether there are any restrictions on the dividends to be received and whether there's actually capability for the JV to buy Marella now that it's got a leverage at that level? And then finally, just on disposals. I think you said EUR 400 million to EUR 500 million. But what is the form? Are they straight sales? Or are they sale and leasebacks? And if they're sale and leasebacks, is that an additional EUR 400 million to EUR 500 million of asset financing debt that we should take into account?

Maybe Birgit and Sebastian, can you take #1 and 2 on and maybe I'll also come in.

Yes. Okay. So Jamie, so indeed, so if I reconcile the numbers that you quoted, so if you look at gross debt at the 30th of September, likely it starts with EUR 7.7 billion. And if you then indeed add back the second and the third facility, you come close to EUR 10 billion, let's say, EUR 9.8 billion pro forma. And then you deduct the bond, so the EUR 300 million, so EUR 9.5 billion. And yes, indeed, we -- as we said earlier, we would definitely target to go down and to go down to a level that is pre-corona, so less than 3x. And there's 4 routes for us to restrengthen the balance sheet. And the first is, of course, building cash back into the business through the tight operational controls, and it's what you've seen. And a really enormous focus on cost, and you'll also see even EBITDA transformation program helping to deliver that. And then second, the disposals and asset financing, and if Sebastian question can also talk about that and hew talk about it for your third question. And then, of course, raising capital through debt markets is an option and raising equity. But of all these options, we are particularly focused on #1 and 2, which are currently in our control. And that is the cost, building the cash back and also disposals and asset finance. And then maybe, Sebastian, as you were the architect also on the Cruise business, it is for your former line of business, I'm going to hand it over to you for that.

Yes. Thank you very much. As you know, TUI Cruises, partly half-owned by Royal Caribbean, 50% by us, is financing on its own. At the moment, we have 2 ships with guests cruising from the Canary Islands, which means that 5 ships are still waiting for being used again. We expect that we will be back to a normal itinerary in early summer. Also there, we do see strong demand, which is very promising at the moment. Also there, the limitation is where we can cruise and where we -- currently and at the moment, the Canary Islands are the only sector. We assume that we will be back to normal in '22 with the yields and occupancies we have seen before. That means that as TUI Cruises had to finance themselves in the recent months, that there will be no dividends for '21 and '22. And then we have to see how quickly the improvement will be. Second question, on the disposals, we have looked at our hotel portfolio. The target is to sell straight and to manage back. There are very attractive options in the market. It's important for us that we get the real value, which we do see. It probably will improve further in the next month. It's important for us that we don't fire-sale, but that we do the right deals, and we are working on that, and we do see good opportunities there. When we manage back, it is important for us that we are able to have long-term contracts to make sure that we can keep the significant part of the profit stream. Actually, by using the brand concept, especially TUI Blue, we are also able to add more and more hotels where we have franchise or management contracts to offset the effects of hotels which we have sold.

Okay. Just to clarify on both of those. Birgit, did you say that additional equity is still possibly part of the plan? And Sebastian, just on the sell and manage back, that we should be taking off, obviously, some EBITDA in relation to you selling the operation then?

So I can answer the first question. I was just mentioning the optionality. We have a spectrum of options. And of course, we need to look at everything, but it doesn't mean that -- I'm not seeing that, that will happen. I mean, I'm just leaning on the options. Thank you, Jamie.

Raising the bar. On the hotel side, yes, of course, we sell a hotel, we lose profitability. The concept, actually, that was -- or the strategy, which we defined before COVID was that we want to grow significantly our TUI Blue brand. And we do see that due to the crisis, the opportunities are even stronger as hoteliers look for very strong distribution. And the target very clearly is to offset a part loss of profitability where we have sold a hotel by having more hotels under management or in a franchise. The concept, and this seems to work very well, if you may recall that we start with 10 TUI Blue hotels, 15, 18 months, 2 years ago. We are now around 100, and we do see that we even can accelerate this path.

Maybe, Jamie, on my side, maybe one thing to add here how I'd like to see it from a strategic perspective. You have actually 2 parts of the business when you run a hotel company. You have a property part or a real estate part, and you have actually an operational part. The real estate part is, with us, very often part of the integrated P&L. If you separate it, we unleash a lot of value because we crystallize, if you'd like, the terminal value of the business, which is the real estate is a terminal value piece, yes? And there is so much money around right now which actually likes to invest into real estate. And then, of course, you lose part of the EBIT, but not so much because the EBIT on the real estate is not very high, yes? But you keep the control, particularly if you don't sell it, but you put it into foreign structures. And that is what we are talking about. So we keep full control. We have long-term contracts. And what Sebastian said, you unleash growth. Because these kinds of models, if you invested all yourself, then you would never able to grow the pace we wanted to. So it's not -- this part of the business, even we pre-thought before the crisis, is not happening to be accelerated. And more or less, you could think about our hotel business becoming more a mature hotel business like Hyatt or the others are doing exactly the same, right? So that's more or less the idea. So we keep control. We keep the risk. We keep whatever. I mean, so we are managing it, but we get it off the balance sheet. And that helps in 2 cases, the first, the growth; and the second, the repair of the current sheet.

Okay. Got it. Great. And Birgit, thank you, and best of luck.

Thank you.

The next question comes from the line of Jaafar Mestari calling from Exane BNP.

I had 2 questions for me, please. Just firstly, on the summer 2021 program. Could you talk a little bit more about the products, the destination mix, the length of stay? So what do you need to tweak to the offer? Or are customers just literally booking anything that opens? And in these bookings, how have you been able so far to maximize the bookings going to your own hotels and to the routes that you fly in-house? And secondly, on customer deposits, there's a useful bridge in note 33 of the accounts. And you're saying that working capital outflow going forward is mostly going to be supplier prepayments. So is it fair to assume the EUR 1.8 billion of customer deposits on the balance sheet in September mostly relates to actual live bookings? So customers were pretty certain want to travel? Or is there still a significant part that is in vouchers, in canceled bookings, et cetera, that have a little bit more uncertainty?

Yes. Maybe I'll come to the program itself, yes? The good thing is the summer program is very broad, yes? And what you see, of course, is standard right now. We had in summer '20, enormous bookings into Greece here. So therefore, that is standard. Also Spain, it's very broad. That's standard. And we also expect a little bit of recovery in the long-haul destination. But long-haul are much more part in the winter, right? So I think it's a pretty safe bet. So -- and today, it's more or less whatever is open. And we have the full program, of course, 80%, so we have less risk. That's what Sebastian also said. Voluntarily, we have said, "Let's do a little bit less risk, so we are safe on yields, yes? And if the market is too much, let's assume for a moment that we have some overcapacities. So if the market is even stronger, then we don't lose market shares." Right? On the deposits, right now, of course -- on the working capital, when it comes back, in January, February, we will have prepayments-driven working capital developments. The first time is actually then April or end of March where you have redemption working capital development, meaning big, right? So that is the big first travel season. And therefore, we believe in the booking -- summer bookings are of utmost importance or of higher importance at end of January and February. And then the first redemption actually will take in April. Now the question is how we convert in vouchers? Or is it just dormant? It's not so much dormant. I would say, vouchers are the big part or people asking for repayments, but after the vaccine, we saw a significant step-up in larger acceptance and also new bookings into summer. And part of the EUR 1.8 billion are the new bookings as well as free vouchers available. I hope that answers your question.

Maybe, I -- yes, maybe I can add-on the numbers there. It's exactly as you said, Fritz And the question was balance sheet and its named holistic advanced payments received. And that position is EUR 1.770 billion, so EUR 1.7 billion, EUR 1.8 billion, and of that, the unredeemed voucher number is 4 -- a little over EUR 400 million, to give you an idea.

And maybe to the question on steering, what we do see, as I said before, the Canary Islands are the destination which is open. We bring almost every customer on our own aircraft in almost all in our own hotels. That works extremely well. And we do see the same pattern for summer. The main target is to bring our guests into our own assets to secure the profitability.

The next question comes from the line of James Ainley calling from Citi.

Three from me as well, please. The first one, can you talk a bit about whether you've seen any changes in the remittance terms from merchant acquirers or the payment terms demanded from your hotel partners? The second is have you seen any bankruptcies from hotel partners? Interested to hear how that might impact your summer program, and in particular, the costs you might be paying for hotels that you resell? And then the third question is much industry discussion about cash ring-fencing and trust funds. Are you seeing any emerging developments about -- from regulators to demand cash ring-fencing or use of trust funds for your business?

Maybe, Birgit and Sebastian, you can answer?

Yes.

Maybe I'll start with the payment providers. Yes, there was some pressure which has now been released. There is a very strong competition between the payment providers, so that we do expect that this is now normalizing again. And what also helps is that we are moving in some markets where it's possible to direct debiting, like in Central Europe or Germany, where this is very common.

And then just maybe on the future development, I can just talk about the current situation. We have a good relationship actually with the regulating bodies that also, of course, are [indiscernible] (01:13:20) from collateral. And I believe that's been really very constructive, and we are happy with the outcome. And then on the credit card collateral, of course, we expect that to change now that you also see the liquidity positions that we will have now. So it all, I mean, relates together. And of course, the credit rating that we currently have does not help. So -- and then the part of the package that we just negotiated will also help in terms of the EUR 400 million guarantee. So I think that's what we can see at this point in time.

And it is normalizing. So that's what we can clearly say.

Yes.

There was some pressure, but it's normalizing.

Yes. maybe a word on hotel bankruptcies. We are not seeing huge bankruptcies. Quite the contrary, I think you see right now that asset values and so on are more and more, I would say, increasing potentially in the hotel field. The values are increasing and -- because people are starting to look through the crisis. And now this is, first of all, there is support up here in the respective countries for financing, but also, the equity which is sitting at the sidelines is now kicking in. So -- because people think -- I think I don't know anybody who says that actually, leisure travel will not recover. It's a little bit different, I would say, to business travel or it's quite different to business travel. But leisure travel, the money is available. And that's, I think, what you see.

And the first breakeven for hotels is low, less than 50%. So I wouldn't expect any major bankruptcies. What we do see is that hoteliers are interesting in very strong sales brand, and this is the opportunity we have with the TUI brand, Riu brand or the Robinson brand.

And just following up on that, what's the implication of that for kind of the costs you're paying for hotel capacity for next summer, please?

Well, that's not a big problem. I mean, quite on the contrary, I mean, we have been renegotiating with almost everybody right now as it's, of course, very clear, I mean, in that situation. We are renegotiating with everybody. The good thing is the portfolio is actually good. And also, more and more hotels are, of course, interested in working with us because, as Sebastian said, there will be a little bit of -- there will be some oversupply, so we need to invest there. And the interest of working with a big marketing and build brand in order to secure demand is -- these are all increasing.

And just, I mean, the hoteliers are very flexible. They look at their occupancy, and now that was -- it's part of the transformation. Direct access to the hotel helps them and helps us to fill capacity with the right price we get. So we are by far quicker nowadays.

The next question, Stuart Gordon calling from Berenberg.

A couple of questions. First one, just to confirm, the May capacity that you're talking about, is that similar to the whole summer season, that sort of 80% of 2019? Secondly, and I maybe missed this in the answer to Jamie, but my understanding is TUI Cruises also have a loan from KfW. Could you confirm how much that is? And is that also why dividends will be restricted until at least 2022? Thirdly, just on debt maturities. Obviously, at 18 months to July '22, but is there any risk of not getting cleaning sign-off for going concern during 2021, if you don't get that completed sooner rather than later? And just one point of clarification. It doesn't look as if you've included the cash collaterals that will be replaced -- that will get the state guarantee. It doesn't look like you've removed them from net deck. Could you just confirm that all the cash, including those cash collaterals, are included in the net debt number? Thank you.

Birgit, you want to take that, or Sebastian?

Well, I'll start with the answer on TUI Cruises. There is a support from KfW, which we don't disclose the number. It's similar to what I said on the hotel side. Cruise also has a cash breakeven 40%, 45%. So when the business, as it looked like, comes back, it really returns very quickly to a positive cash flow. So that's why we are very positive on Cruise.

Yes. No, I was just -- maybe on the cash collateral. So just as an answer, they're partly restricted cash and partly receivables. So it's a mix.

And what we are also seeing is that there will be a significant positive impact due to the solid financing of TUI now. I mean, it had completely changed the picture in the last 10 days.

Okay. Does that answer the questions? Or what -- I think I didn't answer the first question.

I think they didn't -- yes, just confirmation that your May capacity is similar to the 80% you've talked about for the full summer '19.

Similar to '19. It's similar to the '19 capacity.

Yes.

And the last question was on the debt maturities, is there any risk of, although it's July '22, that obviously, in the second half of next year, is less than 12 months. Is there any risk to going concern sign-offs through the year as you publish accounts?

No.

No. No, it isn't because despite -- I mean, the going concern is confirmed by the auditors.

Okay. So because you're not -- because it's not formally audited during the year, that's not a risk?

Sorry, I needed to... yes, no.

I mean, one, it's very clear that we are in good talks concerning '22. For '21, we are very safe, and we do even see now upsides because the situation has improved. And we are working on '22, and there, we are very confident that we will come to very good solutions.

The next question comes from the line of Richard Clarke calling from Bernstein.

Three operational questions, if I can. First one is how can we interpret the 14% price rise that you've talked about for the summer? And maybe if you can break that down between what's like-for-like, what's mix, what's people using higher-value vouchers kind of going forward and the interpretation of maybe your confidence around can you keep that number positive or near that through to summer. Second question is on Cruise capacity. I assume the 80% number is just about Markets & Airlines next summer. So what's the Cruise capacity going to sit out through the next few years? And then it looks like your hotels did quite a lot better in Q4. They were down about 60% versus the Markets & Airlines down 83%. Is that about you kind of directing customers to your hotels? Or is that about sort of geographical mix? And should we think about the hotels continuing to sort of lead on the recovery? And what explains that?

Yes. I mean, I think, on the hotel, exactly what you say. I mean, we are directing the traffic into our own hotels. And that is a major driver of the vertical integrated business model, and that is also the beauty of being part of the family, yes? The 14% is an up-trading. What we see is that people usually take something and then they are saying, "Okay. This year, I didn't have a proper vacation, or this year, I have the vouchers." And they are putting this money against better products. Now we are positioned very well in the 4- and 5-star segment, and we are seeing the 4- and 5-star segment taking up first. So therefore, it is, I think, something which will stick around. Now the question, of course, there's a contract trend in the -- of a short booking cycle. But even here, I would say, when you look at our winter bookings, we have been reducing our program in line with capacity -- in line with the demand. And therefore, even in winter, the cost per -- or the price per travel was up. So that's what we tried -- what we will try to achieve also for summer. That's the reason why we only planned a risk capacity of 80% despite the fact that actually, Thomas Cook, of course, will not be there. And you saw the Euromonitor, the de facto prognosis of demand is going down, let's say, something 12% to 14%. And so this 80%, we are conservative. And what you don't have into account, of course, is because the reference point is 19%, Thomas Cook was there, usually, you would say, 20% more bookings should be possible. So I think we are conservative. I think we are conservative. And the reason -- and the result will be that our prices will be good. Now on the Cruise capacities, we have actually scrapped 1 ship at Marella, Sebastian, right? That gets you...

2. It reduced from 6 to 4.

6 to 4, so we have a reduced capacity and we are seeing very good demand. I mean, as soon as we can sail, the ships will be sailing. And in general terms, I would say, you will see a reduced capacity because also others have taken out old capacity and have not added so much new capacity, I mean, not as much as planned.

And the German market probably will be very stable because there was unfilled demand before, where people went to international products because the German-speaking products were sold out. So there will be, even if there would be slightly less, demand spillover effect into German-speaking products by German customers. Therefore, we kept the capacity planned from May onwards stable. It's a little bit different in England where we reduced from 6 to 4 ships. 2 were scrapped. And that's -- we think that's the situation that we should also sell this capacity well. And we think that it will be normalized from early summer onwards.

Maybe if I could just ask one quick follow-up. You haven't mentioned the 737 MAX in your presentation. When do you expect to start flying that? And can you avoid kind of overcapacity in the airline as those planes come on?

Yes. I mean the FAA has now approved and the EASA will be doing in due course. Initially, it was planned for November, but now it's moved into December, maybe January. I mean, the good thing is we have been able to not only get compensation, but also delay the order book here, interestingly enough. So therefore, we don't have inflow of capacity -- significant inflow of capacity over the next 12 to even 24 months. So that's actually also a tick in the box. And interestingly enough, I would say, from afterwards, we believe that we will be looking into replacing capacity, not growing, but replacing capacity. One of the very interesting things which are happening right now, that the replacement of old aircraft in the green deal of the EU will be also funded by the EU when you replace it with more fuel-efficient. So it might be interesting afterwards to take capacity, but we are not -- the deal we have been striking with Boeing is actually allowing us very flexible take-in rates for new aircraft.

The next question comes from the line of Adrian Pehl calling from Commerzbank.

Actually, one is on the additional cost savings that you want to bring forward. So I was wondering, the EUR 100 million additional savings per year, where exactly is that coming from? Are you just doing, let's say, more of the same program? Is that due to the reduced and probably sold asset base? What's your plan? Maybe you could elaborate a little bit further on that. And on these asset disposals you have been addressing, actually, first of all, is there a possibility to have whatever kind of sale and leaseback on the Marella -- remaining Marella cruise ships? Or is that exclusively geared towards hotels? And on the hotel side, is that just disposals? Or you really want to get rid of the likely unprofitable ones? Or are you broadly considering sale and leaseback transactions on these assets?

Maybe I can start on this. I mean, first of all, the EUR 400 million is not new. It's just a tidying up of our program we had underway anyway. So when we do a program like this, we do a full program, and of course, our target is more than what we communicate. Because we will actually prove to you that we do the EUR 300 million, and now we are proving to you that we are doing the EUR 400 million. So we are just tidying up. We are running in front of our curve. We have promised something. We can see now -- we see now that we can deliver more, and therefore, we are committing more, yes? But it's not a different program or a bigger program or something. It is just what we planned. But we are now telling you and committing to more because we are more certain that we can deliver, yes? Second, on Marella, the sale and leaseback externally is not an option. That is also very clear. So we -- the joint ventures, you saw the Hapag-Lloyd. Think more in this direction, right? So that, actually, we put the financing of balance sheet, but we have the full control in the ships. And on the hotel front, I think 2 things are important to see. What we don't do, we just don't sell hotels and lease them back as a pure financial transaction. This is not what our plan is. Our plan is, and that was also a plan which was done before the crisis, to set up financing structures to decouple the real estate business with the operations business, so opco/propco kind of model, right? And in the propco of the real estate, you have a significant part of the value and terminal value, and that is something which is not fitting our business models, right? So -- and there's enough money, which actually is at the sidelines to invest here, yes? So therefore, the separation will allow us to separate the real estate and to grow faster in our hotel portfolio because our balance sheet and our business model doesn't allow us to invest into property, and it's not very efficient to do that. There is enough equity out which wants to do it, and actually, is just fit to do it. It's not our core. Maybe one last word, and this is something regarding sale and leaseback. Think about more sale and manage back, yes? Because leaseback is not very efficient. And now exceptionally, we will do it, but manage back is important. And also, it's important that we have the control. And this, when you look at hotel fund structure, instead of just a plain sale and leaseback, it's much easier to do.

Maybe just a quick follow-up. Actually, as you've been probably considering such moves for quite a while and are probably pretty aware of the prices, I mean, I'm quite sure you could provide us some sort of at least qualitative indication on how asset prices on the hotel side have developed prior to the vaccine announcement and post the vaccine announcement. And post the vaccine announcement, are prices already near somewhere, where you could say, "Well, that are a reasonable prices." Or is the market still waiting for how the vaccine is actually playing out practically or how we advance into the summer season this year?

But maybe, Sebastian, could you shed some light on that? I mean, I think, the prices never have gone down, really. I mean, that's what I think I saw. But is it right, Sebastian, my assumption?

Yes. I mean, there's a very different development between city hotels and leisure hotels. The prices had been very high. Maybe there have been a slight 10% decrease in the recent months, but it seems to normalize again as there is so much money, and leisure hotels are seen as a good investment.

Yes. So it has not come down to the extent which you may be -- actually, I have to say that I thought it would come down faster or more, but it seems to be that real estate investors look through the crisis.

Okay. That sounds comfortable. And Birgit, thanks for everything, and all the best for you.

Thank you.

The final question comes from the line of Cristian Nedelcu calling from UBS.

Three, if I may. The first one, having in mind your guidance on capacity for next summer at 80%, could you give us a rough range or where you expect the free cash flow for the company to be at the end of FY '21? Secondly, looking at your guidance on CapEx, the EUR 400 million to EUR 500 million. Could you give us a bit more color what's exactly in there? And is that the new run rate going forward? And thirdly, just on the -- on Slide 25. If I understand well, the difference -- for the summer 2021, the difference between total bookings and new bookings is somewhere around EUR 1.4 million. Now is it fair to assume most of these are vouchers and if that is the case, can you help me reconcile this number with the value of vouchers, the EUR 400 million value of outstanding vouchers that you mentioned earlier? Am I missing anything here?

Okay. Maybe, Sebastian, and it's mainly -- it's -- I think we are not guiding. But just to make sure that I don't say wrong things.

Maybe on CapEx, as said, we will be very tight on investments. So for the time being, this is the upper end of what we want to achieve. So there, we don't expect today an increase in the foreseeable future. We don't guide for...

On the free cash flow, I'm not quite sure. I'm not sure exactly -- we don't guide, no?

We don't guide. No, exactly. It's a very -- I mean, it's almost impossible to really judge this.

Yes. Okay. So what was -- and there was what's part of actually the EUR 1.4 million whatever it is, is the difference between new bookings and net bookings is covered by vouchers or what part of that covers the vouchers. And Is that something we -- I mean, on top of my head, I don't know. But in all fairness, but do we know off-hand, maybe?

It had been 50%, 5-0 percent. But of course, now as the new bookings come in, this picture now is completely changing because the ones who wanted to rebook and use the voucher have mainly done it. So from what we do see with the new bookings, it will go up to 80%, 85% real new bookings and 10% still going for about voucher or rebooking.

Yes. That's quite right.

So this effect is growing out, that's the German translation. I don't know if it works in English.

Yes. But it's an important thing. I mean, also having the vouchers actually tied into the system with new bookings is extremely important because lots of unused vouchers are also not very good. Okay. Does that answer your question, Cristian?

Yes, yes.

Thank you. Thank you. That was the last question I think. Thank you very much, everybody, for staying or for being on the line and listening in. I want to say on this side also, thank you very much, Birgit. Again, you obviously, did a good job. People thank you on the call. I want to thank -- personally thanks to you. It was a great and very constructive and a good companionship running the company. Unfortunately, don't consider your tenure or not. And therefore, it came -- the COVID crisis came, unfortunate. I wish you all the best. And I also have to say that Sebastian and I, we worked together for quite some while in different functions. And I'm equally happy that Sebastian now takes this new very, very important role, restructuring our balance sheet. Of course, liquidity now should be there to manage through the crisis. But the balance sheet is a task, and of course, we will have 18 months to do that. That's plenty of time, I believe. Thank you very much, everybody, for listening in, and talk to you soon.

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