TUI AG (TUI1) Earnings Call Transcript & Summary

Ladies and gentlemen, my name is Dieter Zetsche. As Chairman of the Supervisory Board, I hereby open the Annual General Meeting of TUI AG and in accordance with the charter, I take the chair. I would like to warmly welcome our shareholders and representatives as well as the representatives of the press. As at our Extraordinary General Meeting in January this year, I'd like to welcome you again to an only online event. This general meeting will be held as the so-called Virtual General meeting without the physical presence of the shareholders and their individual proxies. Only the proxies of the company appointed by shareholders to exercise the voting rights will be present. The Executive Board and Supervisory Board, consider virtual holding of the Annual General Meeting in times of the pandemic to be the only possible responsible option. As in previous year, the minutes of the Annual General Meeting will be taken by Dr. [ Ulrich Halp ], Notary Public, whom I would like to welcome here with. Due to the COVID-19 pandemic, the Board of Directors or the Executive Board is not fully present. Sitting next to me are the Chairperson, Mr. Joussen; and Mr. Sebastian Ebel. The other members of the Executive Board follow the Annual General Meeting by means of video and audio transmission. And of the Supervisory Board, Professor Edgar Ernst is present in person. In addition to myself, the other members of Supervisory Board take part in this Annual General Meeting by way of video and audio transmission. I would also like to welcome here in this room, also I mentioned the company process, Ms. [ Marga Moresta ] and [ Andrea Shilling ]. Furthermore, Dr. Martin Riecken from the Corporate Communications Department will be present to support us in connection with answering the submitted questions. Now some formalities. I note that the Annual General Meeting was convened in due form and time. The invitation to today's Annual General Meeting was duly published in the Federal Gazette on the 3rd of March 2021. A print out of the notice is available here on site and will be taken to the minutes. Furthermore, the convening notice was also forwarded to the media that allow all for Europe wide distribution pursuant to Section 124a of the German Stock Corporation Act. Due to the stock exchange listing of TUI AG at the London Stock Exchange, further information has been public, in particular, the notice of publication of the AGM system in the NSM system, which was published on 3rd of March 2021. The AGM documents have been available on German and English on TUI AG's website since the AGM has been convened. All publications requirements in connection with AGM were fulfilled, not missing the motions for additions to the agenda to be announced were received. The decision to hold today's Annual General Meeting as a virtual AGM with the arrangement of shareholder rights announced in the notice of meeting was made by the Executive Board with the consent of the Supervisory Board in accordance with Section 1 and subsection 2, 1, 2, 3 and 6 to the act of measures of the law of companies, cooperative, association foundations and condominiums to combat the effects of the COVID-19 pandemic. This also applies to the possibility of participation of members of the Supervisory Board and Executive Board to participate in meetings by means of video and audio transmission. The entire Annual General Meeting can be followed live by means of video and audio transmission by the shareholders entered in the shareholders registered via AGM online service set up for this Annual General Meeting. Shareholders duly registered for the annual meeting or their proxies may exercise their voting rights via the AGM online system in accordance with the voting procedure to be explained by me. They can exercise their voting rights themselves through a proxy or by means of electronic communications, specifically by absentee vote or exercise their voting rights in accordance with the instructions given by them through the proxies of the company and change of your vote instruction given. Shareholders who have exercised their voting rights themselves by electronics absentee ballot or by proxy may declare their objection to resolutions via the AGM online system until the end of the AGM without a period at the AGM. Proposal was submitted by the shareholder, [ Guards Knoble ], to elect him as a member of the Supervisory Board. The company made this election proposal available on the website on 12th of March 2021. I will come back to this later. There are no further countermotions and/or election proposals that would have to be dealt with at today's virtual Annual General Meeting. No countermotions and collection proposals may be made during the Virtual General Meeting. The company's proxies will not make any motions at the AGM. This will also not be available to ask -- they will also not be available to ask questions as shareholders or at the AGM. The attendance area for today's virtual meeting comprises the room from which we broadcast the AGM. This is called the Congress Center in the head office of the registers office of TUI AG in the Karl-Wiechert-Alee in Hanover. I am pleased to announce now the attendance of today's members. So from the registered capital of the company in the number of 1 million -- 1,099,393,603 in divided into 1,099,393,604 no par values, there are 10,010,000 no par shareholders and are represented with the same number of votes. This corresponds to 0.9% of the registered share capital in addition to the postal votes for 19,105,000 no par values were received. To start there, we have then 547,065 -- 574,065,393 no par share values. This corresponds to 49.76% of the registered share capital. So this is also available to the notary. And I will announce the changes in attendance, together with then the current number of post absentee votes received in due course. I point out that the video and audio recordings are not permitted. And then according to our bylaws as Chairperson, I determine the order of the items on the agenda and the manner or format of agenda votes are taken in the so-called additional procedure. The votes in favor and against are counted and abstentions have no relevance for the vote. The votes are counted with the aid of the data processing system, shareholders as well as proxies may exercise their voting rights during the AGM until the beginning of the voting via the AGM online system by way of electronic communication in the form of absentee votes and may change and revoke absentee votes already cast. In addition, it is possible to issue, amend and revoke proxies and instructions to proxies of the company via AGM online system. This will also apply in each case. If absentee votes have already been cast or proxies, instructions have already been issued in the run-up to the AGM, respective of whether this has been done via the AGM online system or via absentee vote fax or the extent -- to the extent permissible. At the appropriate time, I will remind you to vote -- remind you to vote, but I would like to ask you to already now to cast your votes in time. Immediately before the vote, I will again explain in more detail the voting procedures and also voting by proxy. Details of the handling of personal data and drives under the EU General Data Privacy Regulation can be found in the convocation. And shareholders had the opportunity to submit questions to the administration via electronic communications until 23rd of March 2020 (sic) [ 2021 ] Central European time. It is not intended to ask questions after the deadline and during the Virtual Annual General Meeting. As a matter of principle, questioners are not mentioned by name when answering questions unless it was expressly requested. All duly submitted questions will be answered in the interest of an expeditious proceeding. Administration may also ask -- answer questions in summary form. So I now close the formalities. And ladies and gentlemen, we now end up into the agenda. I call now agenda item 1, presentation of the approved annual financial statements. As of 3rd of September, the approved consolidated financial statements, the Sunrise Management report and Group Management report, with the report explaining the information in accordance with Section [ 289A ] and Section [ 315A ] of the Commercial Code and the report of the Supervisory Board. The documents have been available and will still be available on the company's website since the convening of the AGM on 3rd of March. These documents are also accessible here in this -- available in this room, and they will be available during the AGM. I would like now to ask the Chairperson to explain the documents and the situation of the company.

Ladies and gentlemen, dear shareholders. I'd like to warm -- now welcome you warmly to the AGM of this financial year 2020, which has been concluded now. And we have now our second AGM in this year. And I reported now in January on the situation of AGM. And therefore, I will now focus on the strategic relevant issues. So before the crisis, TUI was a company in rude health, a company that could rightly claim to be global leader in tourism that developed and designed holiday resorts in the destination, with an EBIT structurally above EUR 1 billion and annual investments, similarly in excess of EUR 1 billion. We were able to finance our business activities on the capital market with debt capital at an interest rate of 1.5%. And in 2019, we had 27 million customers around the world, and we were planning revenue growth of just under 20%, so 20%. Our bookings in January and February 2020 reflected this. So we had a plus of 17%. In 2018, that means 2 years before the crisis, we had started transforming TUI from a vertically integrated tourism group into a digital platform company. At the time, we had set the objective of decoupling the -- our growth from the direct investments on the balance sheet in order to be able to grow more quickly. At the same time, we sought also to implement global scaling effects with our IT systems. And the transformation, therefore, involves 4 pillars. First, the transformation of our core booking systems via our own development of TRIPS, which covers all key systems. This is hotel purchasing, then also own and third-party room allocations, flight management, product packaging price and yield, CRM, web front and app. So the development of our core system is almost completed today and is being implemented uniformly around the world. Since February of this year, the first bookings in Belgium and TRIPS have been managed via TRIPS. And here, we anticipate IT synergies, and with consequently cost savings significantly in excess of EUR 100 million per year. And this is also a substantial boost to the speed of innovation and development because we can now completely independently put new software versions into operation in a weekly rhythm. This means we are quicker, closer to the customer and more attractive. So the second pillar, the transformation of our business field experiences through the acquisition and integration of the digital platform company, Musement. The integration is now complete. And is delivering excellent results. We are present with 27 million customers in the app. And the platform is now sufficiently scalable and robust that companies like booking.com are also using it for their companies. The third pillar, the TUI Blue Horizons. Our hotel contracts and room allocations are now located in the cloud, in a globally standardized database. All allocations are presented and positioned in terms of each room individually as opposed to the standard room categories. Each room thus becomes a product that can be individually described, priced and booked enabling features that are extremely well like with customers are now possible, like, for example, desired rooms. And that's worth up to extra EUR 12 (sic) [ EUR 15 ] per night to them. And I won't go into further detailed features here for time reasons. They work in a similar way, and they are so attractive to our customers, they also justify a price premium. That's what it is in the differentiation. And it's also about the individualization of the product for many millions of customers. Usually, this was a contradiction, individualization and scale affect, differentiation and costs. With the digitalization, we now combine those things. So now the fourth pillar with our Asset Right strategy, which we have been pursuing for around 2 years, we are working towards bolstering our revenue and earnings growth by not making all investments ourselves. And as a consequence, we have fewer assets on the balance sheet. We retain control over product, brands, capacity and sales. Of course, we already achieved this in a year ago in our Cruises segment by merging Hapag-Lloyd's Cruises in TUI Cruises. A similar step is also planned for Marella as soon as the markets permit. Therefore, we need a little bit more business in cruises in order that it works. So in terms of our hotels, we launched TUI Blue 2 years ago and already, we have now 100 franchise partners. So the outsourcing of the spin of our hotels into funds is now initiated. Ladies and gentlemen, the transformation of our company into a digital platform company, which we embarked on an early stage was already the right thing to do before the crisis. And during the crisis, it has become a key factor for the survival of the company. The crisis only started for us at the start of the beginning 2020 in March. Prior to that, bookings were higher than the previous year and such on a record level. With a lockdown on the weekend of the 15th of March, TUI became a company without a product and without revenues. So until the quarter our revenues fell by 98% in our quarter to June 2020. The restrictions did not start to ease until mid-June. The 1.9 million customers up to September reflected the very limited possible destinations on offer. It's better than nothing, but it was not really very much. And then the infections rates started to climb from October, resulting in a new lockdown in September, as you know. And what is now 12 months of the crisis, we have only been able to facilitate a holiday for some 2.5 million of customers and as such, just around 10% of a normal year. The impact and the extent of the crisis created an enormous need for short term liquidity. Despite drastic cost savings, 70% within a few weeks, in the months since March 2020, we have needed around EUR 4.4 billion of liquidity, with some EUR 2 billion for refunds to customers for working capital and the rest for financing the net cost, which albeit were drastically reduced. And if things happen, and of course, it's -- we have really -- then you have really then conditions to deposit EUR 400 million in cash were imposed on us by banks, insurers and regulators. So we could not use the cash which we had. By the end of March 2020, we had succeeded in protecting our liquidity in the short-term through negotiations entered into with the German government and the banks. Overall, with a further financing round in August, we had available to us EUR 1.5 billion in liquid funds for a credit line of banks and so then some main loans from the German government. And the contributions which we made of our own that were significant, for instance, we stopped investments in hotels and cruises. Sale of Hapag-Lloyd Cruises was completed as planned. So suppliers and hotel contracts were renegotiated. A few weeks after the start of the crisis, we implemented a cost reduction program with the aim of saving at least EUR 400 million annually from financial year 2023 onwards. These short-term mobilization was possible because the digital transformation was at an advanced state. Today, we have already implemented over half of the planned savings without loss of quality in the customer experience and without compromising our company's future growth prospects. So we have saved money there where it makes strategically sense, and we didn't do anything which didn't make any sense in our point of view. Because of the travel restrictions in December of last year, we started another financing round, which was successfully concluded in January. This concerns hybrid contributions from the state, totaling around EUR 1.1 billion, including the silent participation that can be converted into TUI shares up to a level of 25%, plus 1 share at a value of EUR 1. And you have to keep in mind that today, we have a share price between 1 -- between EUR 4 and EUR 5, and you can now trade at EUR 1. Additionally, in our extraordinary Annual General Meeting in January, you agreed to a capital increase of some EUR 500 million at a subscription price of EUR 1.07 per share. So the shareholders were able to get that benefit. The capital increase, ladies and gentlemen, showed the high level of trust that our investors, meaning your trust, dear shareholders, have in our company. The acceptance rate was at 98%, and the remaining 2% were oversubscribed several times. In this context, I'd like to particularly highlight the commitment of Alexey Mordashov and his family who increased their shareholding from 24.9% to 30.1%. So a high level of trust. Let me explain a final, no less significant component for overcoming the crisis. You remember, in 2019, we had to cope with the grounding of the Boeing 737 MAX. The agreement with Boeing reached in the spring of 2020 has enabled us to reposition our airlines within the group. The agreed compensation payments were collected in full. The deliveries of the aircraft were postponed until subsequent years and the options for further aircraft were reduced by 35. This will have a great relief effect on our balance sheet. The flight platforms have been fully integrated. The aircraft fleet has been adapted to strategic requirements. So for example, in Germany, from 39 to 22 aircraft, you probably read about this in the press. As we are also anticipating substantial oversupply in the European flight market after the crisis, the corresponding effects on earnings will be over EUR 100 million per year. As a result, the group's cash and available facilities are currently per March 22, around EUR 1.6 billion. This value confirms our assumptions as already communicated and demonstrates our strict discipline on expenditure. Now let's look at the figures for the year 2020. After an initial brilliant start, it became decidedly difficult for our industry due to COVID-19 and above all the restrictions that were imposed and this is also expressed in the numbers. We started off with an increase in revenue of 8% in the first quarter, but then the group's revenues under IAS 17 at a constant currency basis fell by a total of 58% due to EUR 7.9 billion in financial year 2020 as a consequence of the pandemic. Guest figures were down 62% year-on-year. The TUI Group's underlying EBIT under IAS 17 fell by EUR 3.9 billion to an operative loss of EUR 3 billion in financial year 2020 on a constant currency basis. The year-on-year fall in revenues affected all segments and also includes impairments in value of assets as well as losses from the valuation of hedging transactions for kerosene that are no longer required. In the reporting year, we also had EUR 70 million adjusted net earnings in the reported results. So this is positive. This includes the disposal gains from the sale of German special tour operators and Hapag-Lloyd, in particular, that adds up to EUR 476 million. In comparison, expenditure for restructuring and value adjustments was made against the backdrop of business performance. That was negatively affected by COVID-19. The increase of the net interest under IAS 17 by EUR 100 million to EUR 177 million in the reporting year is a particular consequence of higher interest expenses as a result of utilizing credit lines, and I will come back to this later. The earnings before interest fell by EUR 3.8 billion during the reporting year to a loss of EUR 3.1 billion. This corresponded to the proportion of group losses, a portion to the shareholders of TUI AG in the financial year 2020. For the TUI AG shareholder proportions of group earnings produced adjusted earnings per share of minus EUR 5.45 as compared to the previous year of plus EUR 0.89. Now let's turn to our financial stability indicators. In terms of the application of IFRS 16 for the first time, the liabilities from operative leases previously reported off the balance sheet were shown as a debt on our balance sheet for the first time in the financial year 2020. Previous year's figures were not adjusted. Meaning that this change in the reporting method alone produces an increase in our reported net debt of EUR 2 billion. At the end of the financial year 2020, the group's net debt, taking account of this change in the reporting method was EUR 6.4 billion. So the net debt without this effect is EUR 3.5 billion. And this is due to the almost complete utilization of our revolving credit facility of EUR 1.5 billion and the utilization of the first financing package totaling BRL 1.8 billion. Now in 2021, we will continue to experience the negative effects of the pandemic. We continue to anticipate a significant positive inflow of working capital. Business and bookings normalized. We also expect to achieve a cash breakeven situation with the development of the net costs. But still, we don't know how the pandemic will develop. So the financial follow-up costs are difficult to forecast. The Executive Board of TUI AG continues to refrain from issuing a specific forecast for the financial year 2021. So ladies and gentlemen, dear shareholders, at this point, I would like to extend my special thanks to our employees. It is difficult to imagine the stress, the fear of losing one's job and the company as a whole, that everyone has felt and continues to feel in this crisis, which is still ongoing today. While continued short-time work with pay cuts, those secure jobs, it at the same time, represents a loss of affluence, working from home without team is technically possible, thank God, but at the same time, it can produce feelings of isolation and powerlessness. We know this from surveys we conducted among our employees. And nevertheless, the team has stood and today still stands behind the company with a very high level of commitment. We always say TUI and the TUI team can handle a crisis, which is true, but nonetheless, we cannot take it for granted. Each and every one of the TUI family deserves our thanks for the commitment and the will to succeed that to this very day, have seen our company through the crisis. And I hope that our policymakers manage to bring infection rates under control with vaccinations and tests to such an extent that travel is possible again. The market is here. The customers want to travel. We've seen that reportedly throughout the crisis when we were able to open certain corridors. But policymakers have to create the conditions for tourism. Ladies and gentlemen, this brings me to the vantage point of the customers on the market. Even during the crisis, we saw that the customers both value the holiday experience with a satisfaction feedback of 8.6 on a scale from 1 to 10. And this is comparable to what we're seeing during normal years. With our safety and hygiene measures, we have been able to achieve a 7-day incidence of under 1:100,000 for our 2.5 million customers, 1:100,000. So traveling is safe. People want to travel and traveling is safe. And in the short term, we have also developed short-term innovative products that were important to our customers. For example, a protect insurance policy for all, and we developed flexible tariffs. And our customers appreciate this considerably during the crisis. The bookings for summer 2021, including rebookings and voucher redemptions remain at an encouraging level of 2.8 million guests, even though this is down 60% on the comparable level for the summer of 2019. In view of the changes to the program, and you have probably read that we have many of those in the current situation, we have currently adjusted the anticipated summer 2021 capacity to 75% from July '21 onwards. So this is a small decrease, but it remains important that we've retained sufficient flexibility to adapt this both up and down, should the demand of our customers recover more quickly when the travel restrictions are lifted. It is encouraging that in comparison to the February booking update, we have been able to record around 180,000 new customer bookings. Additionally, many customers in the U.K. have rebooked for later departure dates so that the bookings there for October are currently up 12%. The average prices for the summer of '21 rose due to the pricing and the product mix, customers buy more high-quality products, so they rose by 22%. Dear shareholders, ladies and gentlemen, we continue to see a strong pent-up demand and desire to travel among our customers. And we look to the coming seasons with optimism. We're seeing strong demand for next summer in the U.K. with bookings up to -- bookings up some 120% and May '22, so very early in '22, an increase of 150%. So these are strong figures, pent-up demand, as we call it, the customers want to travel if they can. And this brings me to the long-term trends in tourism and I can also see great prospects here. Let me explain the reasons. Well, first, people stay young for longer. They get older, they live healthier. They have time and money. Those were the drivers that over the past 15 years have powered the growth of tourism at double the rate than the GDP. And the crisis does not change anything with respect to this megatrend. The crisis has, if you so will, merely pressed the pause button. But as soon as the crisis is over, this megatrend will continue to be true. Another increasing megatrend can be seen today. It's something that has developed among the young population, but is also moving into the older segments, namely experience is the new luxury. Customers increasingly value experience more than the possession of an asset, for example, owning your first car. I have seen this or I've experienced this myself in my family. What's important is traveling, what's not so important is owning a car. And this trend will again bolster the tourism and the travel sector in the long term. After all, the tourism industry gives many countries in the world the most effective opportunity to participate in global value creation and achieve both affluence and political stability at a suitable level. In Southern Europe alone, tourism is the key building block that allows their economies to function. TUI, with its integrated business model, doesn't only deal in tourism products. It is also the largest private investor in most tourism destinations. And as such, the backbone of the tourism industry in those places. So for me, there is no doubt at all that tourism per se, also we as a company are needed more than ever in order to overcome the impact of the crisis in the corresponding regions of the world. Now if these -- if this is going to apply in April, and we will see good development in the United Kingdom, the prospects of this is very good. In particular, we should receive up to approximately EUR 2 billion in liquidity through the return of the working capital has flowed out in the course of the pandemic because of so much concern at the start of the crisis as soon as we see a recovery of the market, because customers are coming back. As of today, this would mean additional debt of around EUR 2 billion to EUR 2.5 billion, with an average interest burden of around EUR 150 million to EUR 200 million per year. In view of the savings effects of our cost efficiency program of over EUR 400 million per year, I think that this is possible. In terms of the debt itself, the next maturity date for debt repayment is July 2022. That gives us enough time to make the requisite provisions. Our reduced cost basis as well as a combination of capital measures and M&A, gives us sufficient capability to overcome this challenge. Our long-term goal is to return to a moderate gearing ratio of 3.0x. Dear shareholders, we therefore, ask you to approve the authorized capital proposed by us. Our proposed resolutions reflect our belief that it is in our TUI's interest to be able to act should the capital markets offer us an attractive refinancing opportunity. With regard to agenda items 5 to 7, the -- it's about the authorization of the Executive Board to perform various capital measures. The expired authorizations for capital increases of last year as well as to issue convertible bonds and bonds with warrants should be hereby renewed. The proposal is for authorized capital of around EUR 110 million as well as additional authorized capital of around EUR 417 million. We further request approval for the issue of convertible bonds, bonds with warrants, profit sharing rights or income bonds with a total nominal amount of up to EUR 2 billion and conditional capital of around EUR 110 million. The shareholders shall, in all cases, be granted a subscription right on the issue of new shares or the issue of convertible bonds or bonds with warrants. So that means there will be limits. You will get a subscription right. However, this may be waived, where the shares or bonds are issued at market price. Now this avoids dilution of shareholdings. Similarly, the subscription right may only be waived for the issue of shares up to a total of 10% of the share capital. For further details, I refer to the invitation to today's Annual General Meeting, which you can find online on the company's website. Now at this juncture, I would like to express my thanks to Peter Long. Peter Long is my colleague with whom I've been working with as long as he was the CEO of TUI Travel when I joined TUI AG. We have a lot in common because after many years, we succeeded in merging the companies, something that we hardly expected would ever happen. He was always available as somebody who gave me advice. He was also the -- when the Supervisory Board was changed, when the composition was changed, now we have 2 representatives from the government, and as a result of this, he will leave the Supervisory Board. And at this juncture, I would like to express my heartfelt thanks to you, dear Peter, thank you for your contribution to the company, for your achievements and your close connections and loyalty to the management team and the company. All the best for your future. Ladies and gentlemen, dear shareholders, the COVID crisis and the collateral damage in combating it have led the tourism industry and many companies along with it to the edge of a precipice. State and private support have prevented the worst for us. However, that aid did not come in the form of a gift, but rather as loans that need to be repaid. We have stabilized our company in the short-term through consistent cost and liquidity management. We will be in a position to bear this debt burden and to reduce it over time, thanks to the digital transformation, which I just described, and the consistent optimization of our business model. The period of the crisis has been nerve racking for all of us, for you, as shareholders and, of course, especially for our employees. And this period was also marked by great uncertainty. You -- uncertainty for you as shareholders and especially for our employees. The fact that we have all stood together and continue to do so, that all of our stakeholders are so committed despite everything, shows that TUI can handle crisis. We have even managed to look beyond the crisis as a company and to drive forward the digital transformation more uncompromisingly than ever before. The TUI of today -- indeed the TUI of tomorrow is stronger, leaner, more effective and more digital than ever before. We have shown that TUI can handle crisis and it can even handle transformation. For this impressive achievement, I'd again, like to thank the whole TUI team. You, our shareholders, deserve my recognition and gratitude for your loyalty. You all stuck with us through the crisis. The end of travel restrictions now seems within touching distance. And then there is nothing to stop us carrying our previous successes forward. Thank you very much.

Thank you, Mr. Joussen for your words. Ladies and gentlemen, I think it is also in your interest when I thank the Executive Board and all employees of the TUI Group for the efforts made and for their achievements in the past fiscal year. I would now like the Executive Board to pass these words of gratitude on to the employees. I would now like to continue with the report of the Supervisory Board. Dear shareholders now this year, we are convening for the second time at -- in General Meeting in this first quarter in a virtual format. This is unusual, but it's symbolic for the closing of the year in which TUI was affected by the effects of the corona pandemic and had to come to terms with one of the difficult phases of the company's history. At the shareholders' meeting, when we met in February, we were very optimistic when we looked back on the past fiscal year. But just shortly after, we were negatively impacted by the restrict global travel restrictions. We are still very much aware of these effects. At the end of the day, they led to a situation where sales collapsed almost completely last year. Despite the -- this, we are still getting together today, although it's in a virtual format. And the reason for this is that we have demonstrated that we have a very robust business model, which has been able to be successful when doing the grounding order for the Boeing aircraft last year as well. But even the best business model can't cushion a decline in sales of down to almost 0. But at the same time, it was an important prerequisite for being able to meet again today. And this is -- which is mainly due to the government aid, which will secure the future of the company. The focus of our Supervisory Board activities was in addition to the General Supervisory Board work, accompanying the Executive Board through the crisis. As you will be able to read in my report in the annual report, we mainly focused on the development of liquidity and continuing development of the transformation process, especially the development of liquidity was one of the topics at each meeting. In addition to the meetings, I was in a permanent exchange with Mr. Joussen. And at this juncture, I would like to emphasize again that the speed in which the Executive Board and the staff responded to this dramatic crisis was impressive. Impressive. And the efforts that the company had to make in all areas deserves full recognition. The impact on the staff varied considerably. In some areas, there was maximum workload. And in other areas, there was maximum short-time work. Fulfilling the company's original purpose that is generating travel experiences is -- has only been possible for a limited extent for the past year. The Executive Board responded quickly and comprehensively to the change -- dramatically changing situation. During the first stabilization package of last year, the Executive Board secured the first stabilization package last March and also generated cost savings and initiated cost savings under the title of global realignment program. The transformation process was initiated as well. Mr. Joussen touched upon that in his speech. We succeeded in convincing the government twice throughout the year to grant additional financial aid when the pandemic and the travel restrictions continued and became even tighter. With an increasing availability of approved vaccines, we do hope that when testing strategies are going to expand it, and more people will be vaccinated, we do hope that we will be able to normalize our offer gradually, but this will still take some months. I now would like to talk about the changes at Executive Board level. As you know, our CFO, Ms. Conix, informed us last year that she would like to terminate her contract, which -- does not want to prolong her contract, which expires -- is going to expire in June of this year. As a result, Ms.Conix resigned from our office after the preparation of the annual report, and her responsibility was passed on to Mr. Ebel. At this juncture, I would like to thank Ms. Conix for her work and wish her all the best for her new activities. Ms. Conix and Mr. Ebel designed the transition in a very seamless way so that we were able to sign the third financing package in early January. Peter Krueger also played a very important role in this regard, and he has been appointed to the Executive Board as of the first of January 2021. Based on his experience in similar activities, he led the talks with our financing partners, but always worked hand-in-hand with the entire Executive Board team. We're delighted to have him on board. And with this, I would like to talk about the changes at Supervisory Board level. These are quite comprehensive because, with the end of this AGM, we will have changes on the employee side and also on the shareholders side. I'm going to summarize these changes briefly. Afterwards, all new colleagues will introduce themselves in video messages. Now with regard to the changes that employees on the employee side, I would like to mention that at the end of June, Ortwin Strubelt within the scope of the sale of Hapag-Lloyd's Kreuzfahrten to TUI Cruise's joint venture, resigned from his office on the Executive Board. Mr. Strubelt has been a member of the Supervisory Board. Mr. Strubelt had been a member of the Supervisory Board since 2009, and he was also a member of the Audit Committee and the Presiding Committee. Now he will continue his activities as Work Council Chairman at TUI Cruises. Mr. Heinemann, Stefan Heinemann is the successor of Mr. Strubelt. And in October of last year, the elections of the employee representatives took place. As you can read in our press release from 3 March 2021, in connection with the convening to today's AGM, in addition to Mr. Heinemann, who has already been appointed by the court, Tanja Viehl from the Cockpit Trade Union and Mr. Mark Muratovic from TUI Deutschland GmbH will be appointed as new members on the Supervisory Board. After his regular term of office, Dr. Dierk Hirschel will leave this body after this AGM. Mr.Pönipp entered the passive period of his early retirement scheme and left the AGM accordingly. On the owners side, 4 mandates are expiring with effect of this AGM. Ms. Angelika Gifford informed me that she would work at a new management function in an international company and was intending to reduce the number of memberships in boards and committees and that she would end her activities for TUI at the end of this supervisory -- at the end of this meeting. Alexey Mordashov and Professor Dr. Ernst are being put up for reelection as you can see in the convening documents. Mr. Mordashov is the largest shareholder of TUI, who also showed by increasing his share, the share of Unifirm Ltd. that he believes in the future success model of TUI and he would like to remain a stable anchor shareholder. Professor Ernst is also available for another tenure. Professor Ernst, in his function as the Chairperson of the Audit Committee, has always accompanied the company in a very critical way. He's been doing this since 2011, and he's a very dedicated member of the Supervisory Board and is in direct contact with the CFO Group and the auditors. And I'm delighted that with Dr. Jutta Dönges and Ms. Janina Kugel, we have 2 new representatives who are going to be proposed today. They are representatives suggested by the Economic Stabilization Fund. They have a perfect profile for this job. And before I ask for the video clips, I would like to extend my heartfelt thanks to all Supervisory Board members who left the Supervisory Board throughout this year or who will resign from their office at the end of this meeting. They have been always very active in our debates, and were very dedicated when it comes to developing this company. And I would like to extend a very special thank to my deputy, Peter long. Over the past years, he led the Strategy Committee. And as a passionate tourism expert, he played a very important role in paving the way for this company over the past few years. I wish all of these members, former members the best for the future. Now dear shareholders, now for a little variety, and I would like to ask for the videos, which will introduce the new members on the side of the employee representatives and the owners. [Presentation]

Dear shareholders, ladies and gentlemen, COVID-19 is the virus that brought me in contact with TUI in a very special way. And this virus prevents me from being at the AGM personally. But that's why we have this video message instead. My name is Jutta Dönges. I live in Frankfurt with my husband and our 4 children. When you hear Frankfurt, you probably think about the banking sector. After studying mechanical engineering, I worked as an industrial engineer for almost 2 decades in the banking sector at 2 international banks in the area of investment banking. Six years ago, I moved to the management body of the federal agency for financial market stabilization. My job originally was to manage participations, which the government took on in order to stabilize the financial -- stabilize the banking sector after the financial crisis, and I'm still doing this today. I still work for the finance agency of the government, and I am the Managing Director. And for 1 year -- since 1 year now, the financial agency is also managing this Economic Stabilization Fund. I'm very interested in working for TUI because TUI has very many positive connotations. It reminds you of holidays. And content wise, I'm very interested in working across countries and in different divisions. I would like to contribute my experience in financing in the capital markets and in the managing of economic company crisis in -- when facing the challenges at TUI. But it's even more. Traveling is educating. Traveling is a cultural asset. Professionally and personally, I'm very interested in sustainability. And I'm interested in solving the supposed contradiction between traveling as part of personal freedom and sustainability as part of societal responsibility. That's very important.

Ladies and gentlemen, in July 2020, I was appointed as employee representative to the Supervisory Board of TUI AG. I was appointed by the court. Since this is my first regular AGM, I would like to introduce. My name is Stefan Heinemann. I'm 41 years old, and I live South, in the south of Hanover or South Hanover with my partner. 22 years ago, I started as an apprentice at TUI, became an IT specialist in application development. Since then, I have been working at TUI InfoTec, the IT service provider of TUI. As a project manager, I've worked in many international projects, and I also head them to certain account. Today, my team and I are part of aviation IT and we're responsible for operating the infrastructure of numerous group-wide services for the airlines of TUI. Since 2002, I've been a member of the Works Council of TUI InfoTec. I am an experienced employee in the Group Works Council and also the spokesperson of the IT committee. In addition to the interests of employees, digital topics, such as digitalization and the IT strategy of TUI are very important to me. I'm very happy to contribute my experience to the Supervisory Board. I'm looking forward to playing a constructive role in helping TUI grow together further. I do hope that at the next AGM, we will be a stronger company when we look back on the past, and I thank you for your attention.

Good morning, dear shareholders. This is my first AGM at TUI, and this is in a virtual format. And so far, I would like to quickly give you an introduction of who I am. My name is Janina Kugel. I'm a Supervisory Board member and strategic adviser. And I worked in Germany and abroad in various positions. First of all, I was a Labor Director and HR Director of Siemens. I live in the South of Germany in Munich, together with my family. I feel very close to TUI because I like traveling, getting to know other cultures, other people. And at the same time, my professional life has been marked by managing change projects in the smaller scale, but also in the larger scale, some have massive impact on companies, others minor impacts on various companies. And also TUI is right in such a phase, not only just because of the effects of the pandemic, but also digitalization, different markets, changed competitors -- competitive environments. And the expectations of customers mean that the company has to keep changing interest itself. And therefore, I'm very pleased to be able to give you an impulse and invest my experience to make sure that TUI is well prepared for the future. And I would like to wish you all a lot of success in this annual meeting.

Dear shareholders of TUI, I was selected to become a member of the Supervisory Board of TUI AG in October 2020. I'm very much looking forward to this task, and I would like to introduce myself. My name is Mark Muratovic. I am 47 years old with -- and in Hanover with my wife and my child. I've had a long-standing career in tourism. And I know the company very well. Since 1999, I've been working in various functions for TUI. And since 2014, I'm a full-time Works Council member. Beginning of March '21, I took over Michael Pönipp's position being the Chairman of the Works Council of TUI AG and the Deputy Chairman of the Comprehensive Works Council of TUI. And therefore, I'm also active on the Supervisory Board of TUI Germany. As you see, I love assuming responsibility. TUI is right in the phase of transformation, and I will support the changes that go along with it. This is going to be a focus of my work. Thank you very much for your attention, and I wish you a successful AGM.

Dear shareholders. I also would like to welcome you to the AGM of TUI AG. My name is Tanja Viehl. I worked for Air Berlin and in an international law firm in various positions. And for some years now, I've been active as an attorney for the Association Cockpit. And I do know TUI well. I'm very pleased to play an active role in co-determination in the company now that I've been elected to the Supervisory Board. And we, the employees representatives, will be in a position to shape the future of the group also in the coming years. The core task of the Supervisory Board is monitoring the Executive Board and consulting the Executive Board. And this is our very obligation. TUI has a huge future. After this crisis, we can assume the pole position in the consolidated competition. We will make sure that we will keep TUI fit for the future and foster sustainability. Occupational hazards and safety will also play an important role in the future to make sure that our customers get a unique holiday experience. The employees of TUI and you can be rest assured, will still be very passionate in supporting the economic success of the company. At the same time, I'm hoping for your support, our highly professional and committed TUI employees to make sure that we safeguard as many jobs as possible. Thank you very much for listening.

Ladies and gentlemen, I think this presentation of the 5 candidates speaks for itself. I am very pleased to look forward to the cooperation with the new colleagues. Finally, I also would like to allude to the fact that for this year, for the first time, the remuneration systems for the Supervisory Board and Executive Board, respectively, are on the agenda. We already voluntarily voted on these schemes. Some of the questions touched upon the remuneration system. To avoid doubt or duplication, I would like -- I would not like to elaborate on this topic and rather do it when we have the Q&A session. That brings me to the end of my explanations on the report of the Supervisory Board. [Statements in English on this transcript were spoken by an interpreter present on the live call.]