TUI AG (TUI1) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and a very warm welcome to the presentation of the results for 2023 here at Deutsche Bank in London. My name is Nicola and I'm Group Director Investor Relations with TUI, and I'm here on stage with our CEO, Sebastian Ebel and our CFO, Mathias Kiep. I think we have some very interesting and exciting topics on the agenda for you today. So we are very pleased to actually present a good close to the year of this summer season. And we also are very pleased to tell you our first expectations for a very positive 2024. And as always, at this point in time, we will also share our strategic update and the progress we have made in the past year and also our midterm ambitions of the building blocks of growth. And let's come now a bit to the technical point of view. We will finalize our presentation with our usual Q&A session, and we will start with questions here from the audience. And later on, we will forward to the operator and take also questions from the people on the webcast. And with that, I'm very pleased to hand over to Sebastian. Please go ahead.

Thank you, Nicola. So happy to be in London. Happy to see you in real life, and looking forward to your questions later on. You may ask why I'm wearing that. I mean it's important that Mathias still wears a suit because he has to take care of the finance numbers. And I'm having more of the fun part. And the message I want to convey is three-folded; one, we have 1 of the strongest brand in tourism, which is the smile, and that makes very often the difference. Second, I'm really proud of what we have achieved and what we are going to achieve. And I'm most proud of our people, because without them, we wouldn't achieve what we are achieving. And we have a great team, not only in the Executive Board and the management, but overall, and we said the DNA of TUI is caring, not only about our guests, but also internally, which in today's time is even more important. With having 2 horrible wars in Europe, that we take care of our neighbor, of our colleague, and our guest is so important, and that makes the difference, and that's what the TUI smile stands for. And whoever comes to Hanover, we have now removed, in the former TUI Germany head office, where the whole TUI is, in a way to reduce cost, to get rid of other expensive buildings, but you will see the DNA which we are living. And if you come to Hanover, I would be happy to show it. We have 5 topics today. I do the summary on the operational highlights. Mathias will go into the results in details, and he will also give the trading outlook, which is -- I mean, last year is always important, but the next year is always more important. And I think what is really interesting is the strategy update, because there are a lot of changes we had envisaged, where we now see the first significant impacts. And I would say it's a 5-year program, it's not a 6-month program. But the good thing is every quarter we should deliver 1 -- the other cornerstone of that. And of course, to discuss our ambitions, and then we are very happy to take all the questions and to answer your questions. What are the highlights? You have seen it. Record revenue, almost EUR 21 billion. EBIT strongly increased. The Q4 performance was good. And I mean it's always making us a little bit nervous because we are depending so much on the fourth quarter. Actually, that's something we are changing. But nevertheless, the summer months are the months where people travel. And it's always good to not get caught by surprise with something negative. The winter booking momentum is high despite what happened in the Middle East, which is a nightmare. Important also now that the price quality is good, and it's a balance between volume and prices, we also see that there is some bed shortage in the market for winter because of all what has happened. The summer bookings, the early bookings are good. I mean, nothing more and nothing less, because the amount is still compared to the overall bookings low. On the other hand, if you have a good start, it's important. And I even looked in the morning, but I do every morning to the bookings. Yesterday was strong, even stronger than this, which is good. And therefore, we feel very comfortable with all what we know to give a guidance for next year -- or for this year, for fiscal year. And I think it's the first time that we take the courage to do so. And this is a big commitment from our side that we feel very confident that we can achieve that and how we want to do it. And Mathias will give some more information on that. But it's not only about next year. We wanted to bring back TUI to a growth path. And this is really important, and I would like today to give you the ingredients which we see for the growth. And what is important is that we don't assume any tailwind from the market. I mean, you all know about consumer climate. You know all the uncertainty in the world. I think it would be great if that changes, but we don't see it at the moment. So it's all about our performance in the market to be good and better. And therefore, the transformation is so important. I said it's a 5-year run. I mean, it never stops. I know you and investors, if you do well, they want you to do even better. But the main change in transformation is a 5-year run, and we are now in the second year. And it's important that we deliver, and then we will be positioned for future profitable growth. The opportunities we have are almost unlimited. If you would compare us with very strong other brands, they are global brands, and maybe I should not compare us with Amazon, but I mean it's a good motivation to really become a global brand and not being the #1 in Europe. If we look at -- not at the future, but looking backwards, we have seen a very strong fourth quarter. Holiday Experiences did very well. I mean if you look at hotels and resorts, now EUR 550 million, a very strong fourth quarter. Again, you could ask why is it on the same level as the year before. One, we had been a record quarter the year before; second, we had some impact from the wildfire. The Greek occupancy was significantly lower after all the news and we had a few openings which costed us some money. The good thing is that we will benefit from it in this year. Cruises is doing outstandingly well. I mean, from breakeven to almost EUR 250 million. And what we do see, and maybe this is the biggest surprise for me, positive surprise, that it's continuing to improve occupancy, but also rates. And if you know that the cost inflation on a ship is significantly lower than what we anticipated in -- what we have seen in consumer segments in Europe. You will see that every euro more on the yield has a very high share on profitability. So this is doing extremely well. TUI Musement is very interesting. Yes, a significant increase in profitability. And we need to balance it out between increase of profitability and growth, because Musement is the part where we get a lot of new customers within TUI. But on the other hand, we also want to increase the profitability. And therefore, I'm very happy, and we are all happy that we have an increase and a significant increase in the coming year in Musement, but also being a major source of new customers. And if you look just before Christmas, we will bring a lot -- new set of products, a new app and so on. So there is a lot to come. And we want to generate higher profits, but even more important, more customers into the new TUI ecosystem. The Markets & Airlines. A good fourth quarter. For the first time, profitable. Again, this is good. But this is the area where we have the biggest opportunity for improvement. If we look and compare with others, we are not yet there, we are pretty far away where we want to be. In the future, there's a lot of room for improvements. And we achieved the first step, being significantly profitable, and there is by far more to come. And the transformation, especially in this area, is taking up speed. And -- sorry if I came between you and the slide. This is the main focus, and we have focused a lot in taking all the measures, implementing the measures, so that we can turn around this even more. So transformation is the key of TUI to create the new TUI. It sometimes sounds easy. It's not easy. It's quite a challenge. It's hard work. Some things work well, others don't work as well. And therefore, I'm so happy that we have a great team. So where we are -- and I've seen, if the team is working well, companies are by far more successful and I'm really happy about the relationship we have and the team and not only in the management board, but we had our SLT on Crete, which was a lot of energy, and this is important for the future. If I look at the regions, they are profit-wise very similar, but they are very different. If you look at Western region, a huge improvement, EUR 80 million. I mean it's a small region. France for the first time profitable. We implemented for the first time our new platform there. So we see it's a little bit -- I always say, a guinea pig, but I should use another word, you said it's our trial area. What works there does work in other areas as well. And to see that a lot of things we have implemented there first are doing well. Central region here with EUR 88 million actually is significantly better, but we had some hedging ineffectiveness. And Mathias can explain it. He always tries to explain to me and I remember for an hour and then [ Wolfgang ], that's difficult, but the operational result has been significantly better. There was some accounting mechanism from the past. And the northern region is still the 1 where we do see, if we compare us with our competitors, where we have a huge potential to come back to profitability we had before. Others have been very strong, and I'm really happy that the management team, which is partly new under the leadership of Andrew Flintham has taken up this challenge, and we do see significant progress there, which is not reflected in these numbers yet. But overall, a big step to future profitability. When we talk about the integrated model and when we talk about -- when I talk about lifetime value later on after Mathias has gone over the numbers, you will hopefully understand even more what I mean there, obvious synergies, which we had before and which we hopefully drive -- have driven more now. And there is a fully new concept about customer lifetime value to optimize it, which you know from really successful companies like Amazon and so on, which we now try to follow. I mean the immediate benefits is about quality. We had some issues during COVID, and we have made huge improvements on quality. If I look at our NPS, if I look at customer satisfaction, if I look at airline reliability, and maybe this is the part where I'm the proudest of, if I look at DBC -- what is the English word for DBC, FTC. I will ask always the same question, I can't remember, it's probably age. If you see the FTC cost, how it's developing positively, but we had to invest EUR 50 million. So quality has been core for us because the brand is associated with quality, and we have made a good progress and an 8.6% customer satisfaction in owned hotels is significantly above third-party hotels, but these are not normal third-party hotels, that are the selected third-party hotels. The occupancy with 86%, now we are going to 90%. We still had some -- the winter was in some areas and the Greece impact had some impact. But now being, I would say, 90-plus is an amazing achievement and it only works because the crew operator, the retail, and the distribution works so well. Cruise. TUI Cruises have been always outstanding and compared to even the best of breed. The 12% last year have been very good compared to the others. When we look at what we expect for this year, it's back to the outstanding profitability. And Musement is also benefiting a lot from the production of customers. 1/3 buy a product from Musement when they are on vacation, and yes, there's still the target to add another 10%, but it's a great achievement. And the more we produce these activities on our own, the more margin we can achieve. And on top of that, we have brought in the concept of going for higher customer lifetime value. What does it mean? I will go more into the details later on. Higher share of wallet, more interaction with the customer, more new customers, to really be in close contact with the customer. So that whenever he thinks about travel, he thinks about TUI, that he buys from us. And I mean, for me, 1 of the best that I learned at school, it's always easier to look at your neighbor than to learn on your own. If I look at Amazon, how they do it, it's amazing how much they work with the customer, the direct communication. I think this is a good example for us as well. And therefore, we will later on tell you what it means concrete and we are driving for that. And that should give you the answer, because some of you always ask, if I'm interested in cruise, I should invest in Carnival, or especially Royal Caribbean, our dear partner, or when I'm interested in hotel, why shouldn't I go directly to the hotel company. And I would like to convince you and the market why it's good to invest into TUI, but that's for later. Last year, we had a good plan, but the plan is on paper. And more important is what do we achieve. And as I said, it's a 5-year plan because if you start with something today, you implement in tomorrow, the day after tomorrow, in a year, and then until it works out is important, but we have been really successful. The new technology platform we rolled out first to Belgium and the Netherlands, as said, a little bit our guinea pig, and what we can see, it works very well. It was not without pain. That's always the case. But now we are really happy. And just to give you a few examples of what does it mean? Now the Belgium customer can start from Amsterdam or the Dutch customer at the border can start from Belgium. So we have now 10% cross-border sales. This is completely incremental volume. We haven't had that. The next step is, if you go to Aruba, you have 3 long-haul connections from Holland and you have 3 from Belgium. But if you go from Belgium, you need to go on Sunday, Wednesday and Friday. Now because the dates are different, you have 6 options. You can start from Brussels and you return to Amsterdam. And then there is a coach offer to go back to your original departure airport. These are things where benefits come automatically. And this is -- if we look forward, if we have the platform in Germany, there are so many Germans who travel from Amsterdam, and Dutch would travel from Germany. So small things, which in the airline sector has been there always, but not in tour operator. So the rollout is working well, and I'll give you some indication how the rollout should move on in the next coming years. The product platforms were launched. We started with Acco-Only. The TUI Flight Marketplace was just introduced, I think, last week into our own retail in the U.K. Before that we bought it from a third party. Now we buy it from the U.K. Retail sells it from our own production. The tourist business is a huge market segment in Europe, which was never in focus very much within TUI. We have started now the central production. Also Belgium, again, is the -- Holland is the first market where we bring -- where we have brought the product into it. And we do see a significant benefit. And the first progress in digitalization and growth in app sales. This is something for -- the biggest change in investments in IT was on app, because retail is important, and that is always important to tell. It's nothing against retail, because especially in the U.K., we have, by far, now more active in third-party retail. We are heavily more supported in the retail here, like in Germany. Why? Because the retail brings customers which have a higher customer value. They are always very good in convincing the customer that the next hotel is maybe better, that they should go here and there. So the value of a retail booking is very high. Yes, we have to pay higher commission. But if you look at the commercials, it's really good. The difference is more on web and app. Web is becoming and has become quite expensive if you have to buy the new traffic, because Google has become more and more expensive. And therefore, to bring the paid traffic to unpaid traffic on the web and the best thing is to bring the unpaid traffic onto the app because there it is unpaid. The customer is in the app. It uses the service. You can directly talk to him. You can target campaigns, it's so important. We had a small share. Now we have still a small share compared to the biggest competitors, or the best of breed, like booking, but we are catching up quickly. So good growth there. What makes TUI different is the other differentiated products. And that's what we see in every market survey, people associated with TUI, TUI Cruises, Hapag-Lloyd, Marella, RIU, Robinson, Suneo, all the brands we have, which are -- as stated before, customer satisfaction is significantly higher. And that makes TUI unique. And it's the argument why people should buy from us. Like with Netflix, their own productions; like with Amazon, with the Prime service, this is our prime service. We brought 1 TUI cruise -- TUI cruise's cruise-ship, we introduced in the U.K. market as Marella Voyager after refurbishment. It's doing extremely well. We have 3 ships coming into TUI cruises, 1 next year, 2 in '25. And by leveraging the synergies, it's really great. And TUI Musement, we are more and more focusing on own production, on exclusive excursions, inclusive trips to get the balance right between profitability and new customers. And the last, but maybe even the most important in the long run is our sustainability road map. Here, when I talk about the DNA of TUI, about caring about colleagues, caring about customers, it's so important that we care about the environment, because tourism lives on a good environment. And we think that the ones who -- and we as a market leader should do care significantly on environmental to make TUI as a source of good. As we say, long term, as a source of good, it's so important that we are here getting as quickly as possible carbon free. And what is interesting is we do see it as an opportunity, not a threat. Why? The commercials has changed a lot. The price differentials and the cost differentials more and more support green energy. And now we have classified the first hotels with external labeling as carbon-free hotels. And now we have started. I have no results yet to say for these hotels, we want to get EUR 1 per customer per day more. I'm personally pretty much convinced that it will work out. Maybe I'm wrong. Let's see in a year's time if it has worked. So sustainability for us is really important because otherwise, tourism is not always the most liked sector by politicians. We want to be -- change the world and we'll do it, I think, quite successfully, want to change the sentiment saying, yes, tourism is a source of good. Without tourism, you will see all the negative impact in the destinations. But on top of that, we do it as carbon-free as possible, plastic-free as possible, reduction of water consumption, buying more and more local products. So I have to make sure that I don't talk too long, but you may see the energy we all have. And Mathias, it's nothing better than the numbers.

Depends on the numbers. I would say, indeed.

That's also true.

Thank you so much, and great for having me. Good morning to everyone. And indeed, allow me to look back in '23, usual P&L, cash flow and balance sheet, in line with our expectations, a bit better, actually. I'll walk you through the elements of that. Secondly, forward-looking, we have written down our capital allocation. Also nothing new for those people involved with TUI, but I think it's good to have that on paper. There is something we consider currently on our listing structure, I would like to talk about that as well. And then, of course, it's about trading going forward and the guidance, as Sebastian just mentioned, we want to grow the company this year by 25%. But let's start looking backwards. I think all the KPIs, revenue, EBIT, and net debt within our expectations. And it's really good to see that the leverage of the company is now lower than we had in '19 again. And this is so important because in the end, what's the biggest yield of the capital raise is that we are now prepared to grow. And this is so important and is the right thing for the company. And now we also expect that rating agencies follow that and reflect that in the rating. I think, again, I said it on many occasions, the B for the company is just not good enough, and we need to get back to our historic levels. Now let me walk through P&L, cash flow and the balance sheet in detail. On the P&L, there were some movements that I would just like to lay out. Again, revenues in line with expectations, depreciation as well. On the adjustments, it's quite a low amount. There was a write-off in the numbers that we expected and we looked with the new plans on it. Now you see the Canada positive one-off coming through much more and this is creating actually a net positive rather than negative, around EUR 25 million to EUR 35 million. This EUR 25 million to EUR 35 million is actually what we would expect going forward as well. I think this is very important because it's quite a reduction compared to the past. We will be continuing to be very disciplined on that to make sure that we don't adjust too much and that they are not too much adjustments. So I think in the past, we had something like EUR 60 million to EUR 80 million. And for next year, we expect EUR 25 million to EUR 35 million. On the interest, we had to increase our cost guidance because of the interest environment recently. We came out at the lower end of this. Why is that? Because trading in the last weeks was better, so more liquidity on balance sheet, less requirements to draw lines, even more ability opportunity to get interest returns. And that's why we came out a bit better than we thought. At the same time, we will continue to have an interest of around EUR 410 million to EUR 450 million next year. The cash interest will be much lower than that. I'll come to that in a second. There's also this year, quite this EUR 380 million of cash interest versus this number. A lot of interest result coming from provisions from derivatives or moving to the P&L. It's just something which is result of the higher interest environment. Income taxes in line with the 80% underlying tax rate, and this will continue to apply for the future as well. So I'm very happy with that, despite the profit increasing, so that's a very good result. On cash flow, I think there are 2 things, which came in nicely; one, working capital, which is EUR 300 million. That's a very good number for the year given that the business ramped up so much last year at the same time. So if we compare year-on-year, so the EUR 300 million, I like that. At the same time, investments, a couple of RIU projects did not materialize. So we stayed at the EUR 500 million, including the payout for the new joint venture. That's also something we will see in the net debt as a positive. And then on the cash interest this year, which is EUR 380 million. And this is something where we will see the benefits from the capital raise. So the cash interest guidance is EUR 330 million to EUR 350 million, much lower. But as I said, a lot of noncash interest coming from the balance sheet through P&L. So overall, cash flow, free cash flow, you see this EUR 500 million, EUR 600 million total. As always, this also needs to, in the financing cash flow, reflect the lease and asset financing amortization, which is around EUR 500 million to EUR 600 million. So in line with our guidance that this is a transitional year, and we were kind of broadly neutral, slightly positive for the year. Again, slightly better than it could have been. Now on the balance sheet, if you go through that, the EUR 2.1 billion. This is better than we expected. We expected something like EUR 2.4 billion to billion EUR 2.6 billion. What's the difference? One is better cash flow. Second is, you see in the lease quite a development. There's also a positive FX movement included there. And then thirdly, we also expected that we would fund the RIU new joint venture with additional debt in the RIU joint venture. RIU joint venture is consolidated, but this did not materialize. So these are the steps to move from this RUR 2.4 billion down to the EUR 2.1 billion that you see. And I must say, I'm really happy with that number. In particular, if you look at our ratios, 1.2x net debt leverage on the balance sheet, that's much better than in '19. The same on gross leverage in both. This is something we expected and wanted to achieve as part of the raise and as part of this transitional year. This is the right balance sheet to now grow the company in the way that Sebastian described it, and I think we come to trading in a second. All this trading, it's very important that we do this without growing the balance sheet again. So also going forward, just as a final comment that we will focus on net debt. Going forward, I think it's much simpler, and it now also much more reflects where the company is with a swing, et cetera. But this will also need to go further down. We will move that below the 1x. And I think that's the next step for the company. Now forward-looking, 2 things, capital allocation and listing considerations. I think, again, '23, transitional year. We've just went through the numbers. There's a lot of facts in there, but the bottom line is we achieved what we wanted to achieve. Now we get formally a couple of times to questions, what about dividends going forward, et cetera. What is important for the business though is 1 that we grow it to the next level. I think this is the absolute prior 1 topic. And I think Sebastian this is when you talk about your energy, this is where the energy in the firm is, because there's so much potential and this is the absolute need also if you think about the structure of the business. At the same time, in parallel, we'll need to bring the balance sheet into an even better position, bring leverage below onetime net debt. And at the same time, we still have EUR 1 billion of KfW, which is the line which you don't want to use, which is not used, but which is a buffer, and we want to replace that buffer over time. Now this line is until '26, so there's ample time. At the same time, this is something where we need to look at what are the right instruments to put that. Other bilateral lines, you can think about putting other financing instruments in place. So there's a variety of options, and we want to make this clear before we do the next step. And once this is all achieved, so the company is at the next level in terms of growth and realizing the growth. Second, the balance sheet is in an even better shape, cleaned up with this final unutilized line, then I think it's the right moment to define a dividend strategy. I think that's important. I think it wouldn't be rational to do today this definition, because it would be somewhere in the future, and we wouldn't have the way to get there, because we only can talk about the guidance of 1 year in the corridor. But at the same time, to finish off 1 and 2 and then define it, I think that would be a good order of steps. That's 1 forward-looking topic. The other 1 is listing considerations. And what is the background of that. Now we were in some discussions, and if you look at our share, around 75% is now traded on the German line and around 75% of the shares are held in Germany. And there were comments when we were on a road show, where people asked why you still have this dual listing structure. Why is the liquidity not pooled in 1 exchange, that would be better for us as investors, and we would actually also encourage you to think about is there not a better index because we dropped off the FTSE 100 due to COVID. Now I think taking that into consideration, we started to have some questions on that with other investors to say, how would you look at this. We've got this comment. And I think we all constantly got this feedback that people said, look, a lot of trading, effectively majority, and 75% is more than that, is on the German line. So in these days, pooling of liquidity is something which has a value. Secondly, we think a good link of liquidity, stock exchange and index makes sense. And then from a company perspective, EU ownership is as, an airline business, quite important, so that would be supported. So there are good reasons to consider to go from the London listing to Frankfurt listing. At the same time, this is something we would like to consider over the next 2, 3 weeks, and then it would be vote for shareholders in our AGM in February, should we continue this path. And that I think is very important. I think there's a good rationale for that. We have a view. That's why we put it on the paper and into this presentation. At the same time, it's something shareholders should vote on. And that's, I think, what a shareholder vote and AGM is there for. So I think on 13th of February, there is the date, and the invitation would go out in early January. Until then, we would continue to discuss it and collect feedback. That's, I think, if we look at '23 and these 2 items, but let me then go to current trading and the outlook, because I think that's what encourages even more. And -- it's not moving, but I can do it without the charts. Okay. Thank you. Now I think if you look at the winter trading and the summer trading, Sebastian mentioned it, this is really strong. And I must say, I've been in so many meetings. We have been in so many meetings where people actually told us, we would not have any bookings because with all the inflationary discussions, recession fears, consumer pressure in this world, people would not go on holiday anymore. This is not the case. Holidays are very resilient. And as Sebastian said, in particular, our segment is even more resilient. And this 50%, 60% sold for the winter with a much bigger program, I think that's something which encourages us a lot for the winter. And now it's early December, effectively our first quarter is in 4 weeks, it's done. So I think this will be a first step towards our targets. At the same time, it's very important that also we go into this winter in a normal hedge position. This is how it should be, and this is very much a difference compared to last year. I would also say, Sebastian, this is the second biggest yield of the capital raise that we can grow the business now without having to look at how do we do it and are we exposed to currency volatility or fuel currency. And that's the right thing. Now last point on the trading. ASP is actually holding up nicely, this is plus 5%. I think, again, as we saw over the last months, to pass on inflation, that's something which is possible in the market today. And the same on the summer. I think this is very early. We have to take it with some caution. At the same time, this 13% we see, exactly the same pattern as we had for the winter, for the summer. And I think this encourages, because it goes through all the markets. And again, consumers are there. There's a big demand for holidays, and we will be part of this. Sebastian, maybe a couple of words from your side to the situation in the Middle East and trading in Egypt and all of this, if I may.

Yes. Thank you, Mathias. I mean, of course, we were concerned when there was the horrible attacks in Israel and now the war there. And we had seen a drop in Egypt. And that's where we had 4 weeks of slower bookings. But what we have seen now is that the bookings have returned and also for Egypt, which is after the Canary Islands and after Cape Verde, the third most important destination. And therefore, we had a dip, but it has normalized. And we do see, for summer, no impact on what had happened there. Maybe there's even a kind of a catch-up effect. Whenever I look, and I did it in the morning, to the booking numbers, they seem to be even stronger than weaker. Of course, you have to fight every day for the bookings. Yes, we try to get customers early into the system. And apparently, it works well. And if you look at market studies, it shows that people start to save money on this and that spend, but not on travel, and that's why we are very confident to look at the second part of the winter and to look at the summer. And I always get the question, what about the European soccer championship. I said there is no risk for Germany, unfortunately. I think we will have 3 or 4 matches. I don't know how many. Maybe the risk is higher for the U.K. But what has changed quite fundamentally, because I remember, 20 years ago, when there was such an event, we could say, these are -- it starts 2 weeks before with slow bookings. Nothing. The difference is people can now look at the matches on their iPad, on their computer, wherever they are. And that's why the impact is less. So from all what we do see, beside all the measures we have taken to get more customers and so on, we are confident for summer. We have to work hard. But I think we can have a lot of courage to expect a good summer.

Yes. And I think I can only add, at our family table with the 3 girls, holidays is a top priority. That's the #1 question. Football, I even asked if I could send them the jersey, and they said, no. So anyway, let's...

I got tickets, I got tickets.

That's very good. Now I think what is important really is these numbers, they hold up, and you see the same also in our holiday experiences. And I think if you go through hotels, cruises and musement, you see the same dynamic. And it's really important because if the volume business has this double-digit growth, then automatically, Europe, because the funnel is much smaller, you were kind of getting strong demand into hotels, cruise and musement. And hotels, they were already at record performance. So the growth potential going forward is, of course, slower and lower than the rest of the portfolio. Cruise is very important. If you look at how the occupancy ramped up each quarter, they're now at this 100% plus that they always needed and wanted prior to COVID and had prior to COVID. Now we can actually go into the next year with this ramp up capacity and utilization, which is very different from this year, where they over time needed to get to this level. So also in cruises, with the strong demand, we have the demand occupancy that's there. This is exactly the ingredients that we needed for the next year. And in musement, you continue to see that there are more customers that want to book than in the quarter before. And more customers that go on an excursion, do something else than the quarter before. So there's an operational benefit, a strategic benefit. We will come to that later. Again, this is also something where you have the first indicator. If inflation hits, this is maybe something you would like to save, but we're not seeing it. So this is really encouraging. Overall, this brings us to our guidance and sales more than 10%. This is what we expect next year. If you think about the prices, that we're already in this corridor of around 5%, this is 1/2 of it. The other is that our ambition and expectation is, of course, in the PAX growth, currently plus 10%. So I think that brings you to the at least 10%. The second is that, as a result, EBIT should grow by more than 25%. And if you think about the components, hotels already at very high level, we expect further but modest growth on this. In cruise, if you compare to '19, there is something like a triple-digit number still missing to the level they had in '19. And again, with the occupancy rate now at the same level, the next year is kind of something where we expect significant growth. Musement, also some potential to go to the level that they had in '19, and to improve even further. And then we have Markets & Airlines, where we have seen a first step this year in terms of getting the profitability up. If you consider the impact they had from being not hedged the way the business should be last year in the winter, that's almost something like EUR 100 million impact. And then you have not factored in, in this EUR 100 million, what comes from growth and initiatives that we will have and that we discussed. So overall, if you think EUR 977 million plus 25%. If you think about cruise and markets, what are driving this, I think the good thing about this guidance is that it really can be built and put into building blocks. In each of the building blocks, I think there is a strong rationale why the increase of the result should be where we expect it to be. The same, I think, for the rest of our modeling assumptions. As I said, the adjustments will be on a low level and continue to do that. Interest, we see on the cash side the benefits from the capital raise. At the same time, the interest environment has increased, and that's something we need to reflect. CapEx, we expect on a level that we had in '23 as well. So the investment level is relatively constant. There will be the additional funding of the RIU III joint venture. We always put it aside because there will also be a separate dividend flow for that. As a result, overall for the net debt, so the cash generation of the business, we expect this to further improve. There should be a slight improvement. If I go through the ingredients, with the delivery stream that we currently have from Boeing, our lease liabilities should go up a bit. We would probably see now some funding costs from the RIU joint venture in the RIU II. And at the same time, we will have a positive and much more positive cash flow than this year. And this will offset it. So the EUR 2.1 billion should, as a result, come down further. So I think that's the package that we look at for '23, and the guidance for '24. And I think the important message that we have is, this is more than an ambition. I think we have a clear building block now in front of us that was done in '23. And if you go through our segments and the trading, I think this all comes together. And I think with that, the question is now, Sebastian, what comes after that?

Great. Thank you, Mathias. And as said, we are very confident, and it's hard work. I mean, we don't expect a headwind from the markets, all about consumer climate. It comes from the actions, the measures we have taken. And it's a quite significant mind shift in the company to define and measure, to execute, and then to commercialize what you think the output should be. And I think we are on a very good track. As I said, I'm very proud of what the team is doing. Some things work better. Others, we have to adjust. But overall, we are really happy. And then the question is, it's not about next year, it's about the long-term view on TUI. And as Mathias said, we want to grow, because we very much believe, with growth, more profitability, more cash flow will come. And with more cash flow, we can invest more. We can use the opportunities in the market, we can extend our reach, our global reach. So a lot of good thoughts, ideas, we have what we would like to do, but we are still working on laying the foundations, which means to have a strong profitable business. We want to be a growing, scalable and global tourism business with ambitious profitability targets. Growing, I explained why it's important. Scalability is something we never leveraged because we had every country could, in the past, do the same -- could do what they wanted to do, not the same, but they could do what they wanted to do. They had their own reservation system, their own distribution system, their own buying system, and that we are changing 1 platform scalability for 20 markets, but also for 80 markets. And it's nothing new in tourism. If you look at the biggest competitors, they do it since 20 years. And global, because we do see that being the #1 in Europe is nice, but Europe is only a small portion of the world, and we want to grow at least in the most attractive markets in the world. The U.S. or North America, we know very well because we bring a lot of customers to it. South America is not too far away when we now see that we are building up Spain and Portugal. You are used to the language. So a lot of things which are ready to roll out to other markets. And of course, profitability is necessary to invest and to make shareholders happier than in the past. The global tourism market is growing besides all the incidents what are happening. And if we're really honest, growth is probably overall more limited in Europe than in other areas of the world, and therefore, to roll out what we do to other areas is very important. TUI of tomorrow will be very different, I will give you a lot of examples later on, than TUI of today and TUI a year ago. And by rolling out the global platforms, we have now started to roll out and by capturing customer value. What we mean with it, I will explain later. It's a holistic view on the customer and to make sure that we are in such an interaction with the customer that we can increase the value for this customer. Strong focus on sustainability. We think there is a premium to it: one, cost avoidance; second, higher income from customer; and we need a positive sentiment from politics, who sometimes say, there shouldn't be any planes flying. We also say what I was saying, answering, if that wouldn't be the case, then the people on Cape Verde would not have enough to eat, as they had during COVID. And for the environment, it would be very bad because there wouldn't be necessary investments. Not easy always to explain, but I think by doing it very drastically, people do understand. On the other hand, it gives us the obligation to be as carbon neutral, to be as plastic-free, to be with a minimum of waste is very important. And we do see, and as I said, we have now the first trials that the customer is even paying a premium to it. And last point, as Mathias said, is the ambitious EBIT growth target, because we think if we want to grow, this is essential, if we want to invest. I always give the example to the politicians, if we have to pay even -- and you have seen the new directive on packages, which is okay-ish. I think probably the team did a good work with the relevant bodies to convince what should we do. I said, if we don't have to pay for collaterals, we can invest in new aircraft, and new aircraft means 20% less emissions and so on. So investments are really important. That's why I don't believe -- now I'm getting political, but I'm old enough to do so. I'm very unhappy with what's happening in Germany with all the -- to forbid this and that and that. I think it would be far better if we have the scope to invest and to make sure that we achieve very clear targets. So overall, we think we have all the ingredients to become more profitable. The market is growing. By the way, also a good example, if you look at the record occupancy in Majorca, for example, we have now -- not we, Majorca has now direct flights to the U.S., the Canary Islands. So even if there is less growth in Europe, there is a lot of growth to Europe and to holiday destinations. Therefore, it's so important to have the global reach. Segments are growing differently. The traditional wholesale package is probably less growing, more dependent on how much exclusive products we can have. The dynamic packaging is growing significantly. You have seen the numbers of our dear competitors in the U.K. And if I do see, since introduction, we have achieved this year in summer, 0.5 million of dynamic packaged products, great margin. And I mean, I will not tell the number because then I would have -- Nicola would not be happy, but we have a very ambitious plan for the coming year. To grow the dynamic portion with direct access to the supplier makes a huge difference. It's a growth area. Tourism activities is a growth area. The activities are very essential for the customer. The good thing is, there is by far more activities sold during vacation. Customers buy it when they are in London, in Berlin. They hop-on, hop-off, all the different products, the museum ticket. We will be able in the first quarter to buy the Heathrow Express on Musement on the TUI app. I'm really waiting for it. These are small things. If you have it once in your app, you buy it regularly. And this is what we want to achieve. On cruise and hotels, the growth is more limited on the capacity growth, which is a good thing, which keeps occupancy high and margins high. And TUI especially is benefiting from the market segment. We are in the 4 or 5 star segment. More the people with a higher income, that makes our business more resilient. And we also see that the package, which at 1 stage seemed to be not too exciting anymore, has regained a lot, because with all the incidents, you have seen the security element is recognized by the customer. TUI of tomorrow will unlock significant value. And here are 5 major points what we are changing. Why we say TUI yesterday is different to today and will be very different tomorrow. One, of course, is the operational excellence and transformation. The transformation is key to it. If we don't even accelerate the transformation, then we will not get the benefits. On the other hand, I said it's a 5-year program. We are now in 1.5 years. The good thing is, every quarter we should see benefits from what we do, sometimes more, sometimes less, depending on the steps we are doing, but it's nothing where we are out of ideas. It's a very clear plan, and even after the 5 years, I could give you a lot of thoughts how we will grow the business. But it's more about always the next quarter, then the quarter after this to show. One is to grow the component product sales and to get new customers, which means to increase the market share and to increase profitability and being more resilient, because that's also very important. When we had the incident in the Middle East, we immediately started to change the flight pattern to the more Western militarian countries. We immediately started to buy rooms on the Canaries, Cape Verde, and so on. We immediately started to renegotiate prices with the Egyptian hoteliers. So this is very, very important, the resilience in the business that we can cope with incidents. There will be always incidents. Second, the uniqueness, the differentiated products are the ones which have a higher profitability and which keeps retention high. So it's so important that we have the unique products, and they drive margin and the retention ratio, which means also lower distribution costs. Consolidating several platforms. This is something which we have just started. The first example was Belgium, Holland. I will give you later on some ideas how this will progress. Why is it so important? If you do everything on the same platform, huge cost synergies. Second example, in some markets, train is very important. And by the way, I'm a real fan of trains. We will have now -- in the new platform, till end of '24, we will integrate the train connection, which means we get a very different set of customers, the customers who go from Amsterdam to Prague with a train. They don't want to fly. They book the excursion in Prague and they book the hotel with us. And if you would need to build this connection in every country, you should never start it. It's so complex, you will have a bottleneck with the IT resources. Doing this now once makes things by far easier and quicker. So common platforms are core of what we do. Without that, we wouldn't see the progress. And by the way, I mean, if you look at our dear competitors' booking, would never have thought to build a different platform for Germany, then for the U.K. So I mean, it's very obvious that we need that as quickly as possible. And the good thing is we have started with the first countries. And it's working very well. The growth via the app to increase the share of unpaid traffic and to have a direct communication with the customer. As said, retail is very important and it will stick important, and we do our utmost to increase even the share -- not the share, but the absolute number from retailers, because the value of the customer they bring to us is very high. On the other hand, we want to move the traffic from the web into the app. Why? On the web, you have to buy the customers quite often. And the Google costs have gone up dramatically. So whenever we can increase the unpaid share, it will reduce the distribution cost. And what we have seen, when we predicted we will reduce even further than the 0.1% of distribution cost. On the web, what happened was, we increased the unpaid traffic. Unfortunately, the paid traffic became more expensive. So the only way out of this Catch-22 or whatever it is, is to bring the customer into the app and to communicate regularly on service, on products with it. And it's doing well. And the great thing is that we know where best of breed competitors are, there is still a high portion we can achieve. And that's why we invest so much on app. And if you use the app, you have seen and you will see all the milestones we have taken, now 1 single customer account, 1 payment system introduced, and at the end will be the loyalty program like the hotel companies, reduced distribution costs and increased retention. And by building the TUI ecosystem, we want to do 3 things: increase the share of wallet when it comes to travel spend of the customer, and increase up and cross-selling. And that's what we describe as customer lifetime value, and I will go into the details. So if you see the 1, 2, 3, 4, 5 elements there, there will be some incremental information there. Market share, I think this is probably the easiest part to understand. Dynamic packaging, it was hardly existing. Now when I say 0.5 million customers in the U.K. In Germany, now 30% of all sales are dynamic. You benefit from more access to products, you benefit from great prices, it drives profitability. Accommodation only, starting to pick up. Flight only, as mentioned before, we had a consolidator in our U.K. retail third-party one. Now since last week, we have our own product, which is better, higher margin, and we sell our own product. Tours, an area where tour operators like TUI were never strong in. We have now built the central platform for tourists with the first market we started to sell is Belgium; the second will be Netherlands and significant success. That's why when you look at the bookings for these 2 countries, they are superior to other markets. As I said, it's a little bit our guinea pig for all what we do. Tours is really important, will be rolled out in the next 12 to 24 months to all the markets. And that's EUR 1 billion market. It's not about EUR 100 million or EUR 200 million. Flight only is not such a profit driver, but it's a driver for communication with the customer, which is also very important. Ancillaries, a strong focus on ancillaries, car rental, high-margin products, so a lot of things. And by offering more and more products, we go also into the segments of the travel listers and the energized adventures. So segments which were not so much linked to TUI. And that's why we think we have all the ingredients for growth. And here, the example from '19 to '23 and actually accelerated last year into dynamic packaging. And dynamic packaging means different variants. It can mean full dynamic, dynamic flights, dynamic hotel. By the way, by far better, not through bed banks, but through direct connect to the hoteliers. We are now building all the direct connect, so the hotelier brings us significantly higher margin. It can mean a dynamic flight with a wholesale room. By the way, that's probably the highest profit pool, or dynamic accommodation with the flight we have in our system. And I think the EUR 2.5 billion, we are talking about growth rates which are not 10% or 20%, they're significantly higher. And 2 advantages, if there is oversupply, you benefit from great purchase prices. If there's undersupply, which we had seen always in the last years, some of our dear competitors got a bed, which we didn't get because the hotelier said you can have the hotel, but for EUR 20 more. And as we were only linked to wholesale packages, he wanted to have the EUR 20 more from his partner. And now he will pass that through also to us, so that we get allotments, which we wouldn't get before. Differentiated products drive margin and customer retention. And this is also something which is amazing to see. You have seen that we have a pipeline of roughly 50 hotels per year, mainly on management, some on franchise, and a very few on asset-right strategy, and customer satisfaction is higher, retention is higher, margin is higher. Therefore, our big brands like RIU, which is an outstanding company, outstanding family; Robinson; Magic Life, also Magic Life, which was always a slight problem, now is performing well; TUI BLUE. Now we have the first hotels in China on a franchise first and on management. Yes, a hotel brings EUR 0.5 million, a EUR 1 million, but it brings by far more, it brings your reach, brings new customers, new customer data, a lot of great things. The cruise ships are very important. You may recall, we get 3 new cruise ship, Mein Schiff 7, June 20 next year to TUI Cruises from Turku and 2 from Italy in '25 beginning and end. So these are differentiated products, products with a tour operator, sold as a tour operator product. And if you're always asking why is TUI Cruises so much profitable, more profitable than, for example, the American cruise lines, it's because they have the tour operator and we have the retail margin. So also a very, very unique product. If you look at the NPS, it's outstandingly high. It's probably the product I know with the highest NPS. And on the excursion, we do the same. And the experiences, it's -- the profitability in excursions. First, it's good to get the customer, new customer. Second, the profitability depends on that you don't have to buy the customer second time, third time, you keep him in the system. And second, if you're having a critical volume that you can produce exclusive products or you buy allotments. That you are so big that you can go to the amusement park and say, "now I buy 30,000 tickets, give us a special price" and, again, it's differentiation in a market segment, which is growing more than 5%. And we are increasing, accelerating the growth via the asset-right strategy. Yes, the 1 or the other hotel, we will still build, mainly with joint venture partners, to leverage their balance sheet, mainly through the hotel fund, and developing, especially when we have access to outstanding good properties, it creates a lot of value. At the moment, we have a pipeline for this year, 41 hotels. We want to increase this pipeline, mainly on leisure, 90% on leisure, but we also have seen now the 2 RIU hotels in New York are outstandingly great and very, very good. And there will be a third 1 in New York. So these are locations when they are the best, it's amazing profitability. The 3 new planned ships, I said, and about Musement, the exclusive products. I also discussed. Musement is, therefore, so important because we get customers which TUI hasn't had before. And that brings very different customer segments into the pipeline. Customer satisfaction. That was 1 of the first actions we took. We look every Tuesday evening to our customer satisfaction. We are now on pre-COVID level, and we have seen that we have further increased in the recent weeks, and the target is even higher. And now you may know that other companies say they have an NPS of 60% or 65%. The difference is, if you ask for the NPS at the end of the travel or 6 months later, and if you ask at the end of the travel, you normally have -- it would be 15 percentage points higher here. That is the normal standard is after 6 months. And that's why this very high number is sometimes compared with other even higher numbers, but it's apple to pears. And we think the right way is to look us 6 months later, because then there's a full impression of the customer. And we also know if he wants to go with us again. The CSAT 8.5% is the target, and retention rate is 40%. Again, there, we have the definition is 2 years, not 4 years, there it would be 75%, 80%. We want to have that the customer comes back to us within 24 months and quality is key for a brand of TUI. We lost some during COVID and now we are really back. And what we always do, it was quite a hard tough. If a hotel doesn't perform, we switch it off immediately. If an airline doesn't perform, we take them out. We have invested a lot of money in reliability of our airline network. As said, in Germany, we had the FTC costs at the absolute minimum. We haven't had that before. The U.K. is doing very, very, very well despite all airport disruptions. We are at the lowest end of complaints we had. So this is paying off. You invest EUR 50 million and you get out EUR 150 million. So this is the ratio of 1:3, therefore, quality is absolutely important. One platform delivers synergies and global rollout. In the past, every country has its own production and had its own access to the hoteliers, mainly manually and had their selling platform. Now we are rolling out the 1 production and sourcing platform, which means it will be on the same system and it will have all the connections to the supplier online, which makes very quick. And to have 1 selling platform, B2B and B2C. Again, B2B is as important as B2C. Of course, we look which are the better B2B ways to sell than others. And this makes a huge difference because, as I said, if you're on the same platform, the rollout to other countries is by far easier. I remember when we built up, we call it, new markets in Brazil, it cost us a fortune, and at the end, it was not successful. Now when we have Portugal, with the Portuguese language, I know we have to adapt to Brazilian Portuguese or whatever the right word is, you just do distribution and sales, you may add some products, but you don't have to build up significant fixed cost. That's the idea that is what we realized with this concept. And of course, it takes a lot of cost out and the 1 selling system is the same. We have it on the app. The app is today the same. U.K., Germany, Belgium, Switzerland, and whatever we build for into the app is available for all the markets. On the web, we are not yet there, but it will come as well. So the platforms take out cost will be by far quicker to the market and with the global rollout is then by far easier with less investments. And the synergies of a global rollout also include the customer data, which was held decentrally. So the hotel had a database, the tour operator had a database, Musement had a database. We bring now, and when I say now, literally now, onto 1 database so that we can start cross-sell -- or we have started, we can do cross-selling and upselling. We have the first preliminary results. The amount is still too small. We hope that at the end of '24 or middle of '24, we will have the first real results with the analytics, but what we do see, it's working well. To sell a car rental product or to sell a Musement product or to sell an insurance product is by far better to be achieved through such a system than by creativity which we had before. And the only missing part is the loyalty program we are working on. We have not created the single customer count. You would ask why you haven't had it before. Now we have it. That's the opportunity. We have the 1 payment solution. You don't have to put in your credit card 10 times. I mean, no one would think in Amazon that if you buy an x good, you put in your credit card. All these things we implement and it works well. The app, I discussed it. We don't want to lower the share of retail. We want to lower the web share and put more and more customers onto the app. We will introduce private pricing with a loyalty program, a lot of things you know from a hotel company. So that means that all the different customers we bring into 1 central database and to use them for cross and upselling. If someone buys an excursion for Berlin to go in a museum, we can offer him the hotel bed. If someone goes regularly to Italy, books a flight, we can offer him also the package or the hotel only. And with more products, the more benefits we can bring to the customer. And this is what we say is the customer lifetime value optimization. The transformation rollout, we did a lot in '23. We do even more in '24. Now it's more about commercializing what we have built. Still things are missing the direct link to the main, general managers of hoteliers, but this is coming now step by step. The dynamic package where we are still behind the 1 or the other competitor in the U.K., it's coming this spring, so a lot of things. So '24 and '25 will be the rollout of the common platforms to all 3 core markets. And then from '26 onwards, we can move with speed into other global markets. And by doing this, we want to capture the customer lifetime value and would be all on the same platform. And that's why it's not that we have to wait for '26. It's every quarter, something new gets to the customer and we see a benefit. And therefore, we are quite convinced that we can increase profitability quarter by quarter. And at the end, it's all about increase the share of wallet with existing customers, because we now can offer him or her more products. It's all about more customers through Musement and other products we offer, and we want to reduce the distribution cost. And very, very important for us, maybe this is 1 of, besides great people, the uniqueness of TUI as the brand, the signature of the brand and the brand perception. I always say, if you look to the core markets, the bet message is that 1 of our really strong competitors like Booking, they are the #1 or the #2 with their brand perception, brand recognition. The good news is for TUI, we are in all the markets the #1 or #2. And that is a great starting point, and that is working out well. So more customers, higher share of wallet, and less distribution cost on a foundation of a very, very strong brand and a very strong app, good CRM. And maybe the piece which is still missing, we are just now starting to prepare for is the loyalty piece, unique products, great traditional products, and by working very well with the customer to increase the customer lifetime value, a concept which you know from other successful brands. Sustainability is core. I think I explained that. And we always now start to communicate special events, for example, the first hotels which are carbon-free, the first cruise where we use biofuels, the first cruise when we come get the LNG ships, which will go with bio-LNG, which is chemically the same, it just gets produced from biogas from organic waste. And also which is important, the TUI Care Foundation. You may have seen that we have started a big program and planting trees. Does that make the difference? I think it makes the difference because every 10 million trees make the difference in the world. I think 1 of the biggest issues for climate change is that a lot of trees were cut down. So it's really important. What is maybe as important, it emotionalizes our product. And it's so amazing to see customers saying I pay EUR 30 or EUR 50 for my tree. And sometimes, they really want to know where is their tree and it's their tree. Therefore, the TUI Care Foundation is so important. But also to do education in areas where it's needed. Cape Verde, we have a school for girls and women, and a lot of things which we think is our duty to do, and I could talk now for half an hour, but I shouldn't. And I think this is the strategic update. And if we do summarize, we are happy about what we have achieved. We are by far not there where we need to be. If you look at profitability and cash flow, it's still -- I shouldn't say minor, it's reasonable, but it's by far not there where we are. If we really want to be a strong company and a global company, we need to invest into product, into marketing. We are probably under-invested in marketing. We have to invest in global reach. And there are huge opportunities, and it's not a short run, it's a long run. And as said, we are full of energy and not only me, it's all for the colleagues and even the CFO, especially the CFO, is also very much full of energy. I'm not sure if the accountant is full of -- that's a different story, but the CFO is okay, right?

Okay. Thank you very much.

Maybe 1 personnel item. You have seen that there will be a change in the TUI Executive Board. David Burling will leave the company at the end of the year. I worked with him for 30 years, not only a brilliant tourism person, but a good friend and someone you would always like to go on a vacation or to stay at the bar. He did a tremendous job during the crisis. On the other hand, the crisis has been pretty tiring for all of us and the transformation is emotionally not always easy, because it means that you have to tell people that there is a lot of change. And therefore, I'm really happy that David Schelp -- so David will rejoin the company. David is -- both are very similar when it comes to personality, people which we do like, and I'm really happy that David supports David now in the transition. And David did a great job in bringing all the different local service activities, DMC activities together on 1 platform and then acquiring or initiating the M&A activity with Musement, building it up. I was very sad when he left to build his own company, which he also did extremely successfully, which he gave now in other hands. He will rejoin and he's a great person for transformation, and I'm really looking forward to it, and I'm very grateful to David Burling for what he does, and we will stay very close and TUI to him. And I'm very happy that David Schelp will rejoin. And what is also important, because although this should not be, the question is then too German. David Schelp was born in Hong Kong, he grew up. Therefore, English is also his mother tongue. There for a couple of years. So you would probably -- when you talk to him, you would think he's English. We think he's German. He lived for 5, 6 years on Majorca. So he's very -- he went to university in, what was it, somewhere in England. So he probably is the most international person we will have in the company. Thank you very much. Questions.

Thank you, Sebastian. I think the mic is coming. So if you would use the mic always for asking questions, that would be great for the audience on the web. Thank you.

Jamie Rollo from Morgan Stanley. A couple of questions for Sebastian. Thinking about sort of risks for 2024. Are you concerned about the 25% capacity growth in the U.K. that the ATOL data is suggesting? And also, what happens if we do get that shift from the Eastern to the Western Med? I think traditionally, TUI has made higher margins in the Eastern Med. And then Mathias, just on working capital, what should we think about in terms of the usual outflow in Q1? And are we factoring in -- are you factoring anything into your guidance of slightly lower net debt this year given, of course, we're going to be adding quite a lot of extra revenue? And if I could sneak in extra one, interest costs clearly very high compared to pre-COVID, but lower debt. How should we think about the profile of that as you get the rating back and as you refinance?

So a shift from East to West. I think what is important that we are as flexible as we can be. And yes, margins on Turkey are great, but we have also seen great margins on Cape Verde. And for us, it was important to secure hotel beds to -- and it's very difficult now to say, will there be a medium-term shift for summer or not. The flexibility is really, really important. We do see that bookings for Turkey are strong, but on a small level, of course. And we have secured also the beds in the Western Mediterranean. So we can react. And normally, when you do see that there is maybe a shift from east to west, then the offers from the hoteliers will be very strong. We fly less to the Eastern. We use quite often SunExpress or Corendon and others. I only think from Germany we have 1 or 2 flights. The 98% is done with third party. The risk is more to secure the beds, and therefore, the direct connect to the hotelier is so important. Yes, of course, there are risks. It would be wrong to say there is no risk, even if the resilience now is by far higher. We have seen what something like in Israel does mean for the business. The important thing is that we are as flexible as we can be to shift capacity, to buy capacity where it's needed. The risk we do see less now, especially in our segment, comes from inflation, because inflation has really come down, especially in like Spain, I think it's now back to 2%. And this is also reflected now in the purchase prices. So we don't see a significant impact. Fuel prices are -- if you look at the hedging position now, I mean, it was -- I mean, we were not able to hedge last year at the right time, but I would say we now hedged at the right time, and we were -- I mean, if we know when it's the best time, we probably didn't need to work, but it's fun to work. But this time, we were on the lucky side for this year. So unless there is something really big, we have a lot of flexibility now in the system. And we have -- I mean, it's small things, big things, long haul had been more difficult. But now we do see that countries like Dominican Republic, we focus more because that is the low-cost long-haul destination compared to Mexico. So we brought a lot of more flexibility in the system. And I think, and you were talking about overcapacity in the U.K. I mean, I was always surprised that we thought about there is overcapacity and then there was none. But at the end, you always wake up and there is something which you had expected. Therefore, the dynamic packaging is so important, because 2 reasons -- 2 views on that. If there is overcapacity, the margins on dynamic packaging are increasing and we benefit from it now because we have the systems. Now when I said we did EUR 0.5 million and you know how much we do, why shouldn't we have the same market share in dynamic packaging than on wholesale package. The other thing which has been limiting us was when there was undersupply, the hotelier didn't give us the rooms for the wholesale rates. They wanted to have the premium, and you only get the premium and the capacity if you have systems and you can accept the EUR 10 more, the hotel you want to have and you put in the EUR 10 or EUR 20 on to our own system that we have built. So that's why we think a good balance between wholesale package, the uniqueness, and the dynamic packaging takes a lot of risk out of the markets. And by the way, the accommodation only means a lot of products, city trips, but also overland travel. Also, there is a spread of risk and chances, and that's why we are pretty confident that we can cope with regional risk with consumer risk, and we may can even benefit from it. There was 1 question to you, finance question?

Yes, there were 2 questions, 1 on working capital, 1 on interest cost development. On working capital, I think there are 2 areas. One is Q1. The other 1 is full year. On Q1, to start with that, Q1 '24, I would expect that the development is similar to last year. Now we have more volume in the business. So we pay more invoices from the summer. At the same time, trading in winter '23 for us started a bit soft. So now with better trading, broadly offset what we see at higher volumes still to be paid from the summer. Then year-on-year, a big part of the revenue increase we will see in the peak months in the summer. So if we then compare September to September, September position will also be influenced, and how then the next winter trading will start, how the autumn is. And of course, the end summer September, October, this is when we still fly on the summer chains. So that's why you don't see the big increase that you would see from this 10% revenue increase, but you should expect an increase also in a positive development in working capital than year-on-year. Now on the interest costs, I think if we look at the cash cost, I think this is where your question relates to primarily. On the RCF, there is still potential to further reduce the costs. And when rating improves, there's a 0.75% step down in the margin, and then with each rating step, there is another step down in the margin cost of that. At the same time, we also see a big increase now with the higher rates in the lease portfolio. And that was actually the key driver of the cost increase earlier in '23. And this is something which will then only grow out over time, at the same time improve. The same way, whenever we do improve our rating, this will be reflected in new leases whenever we renew an aircraft. And the same if interest rates come down, this will also be reflected, but the amount of fixed rates is much higher there. Effectively, the aircraft portfolio is, I would say, 90% fixed interest rates.

Ivor Jones from Peel Hunt. You've set out the operational strategy for 3 years or more. Could you talk about the capital strategy? You've talked about the importance of dynamic packaging. Does that mean the airline starts to wind down and you exit those liabilities? And in the joint ventures for hotels and cruises, similarly, they're very high return for the partners. Does TUI gradually exit those and become less capital-intensive? So generally, where will the business be in terms of capital intensity?

I mean, the joint ventures has a significant benefit if we finance through the joint venture. We need not to put normally capital into the joint ventures. Even during crisis, we didn't put capital into the joint venture. On the other hand, we only get dividends. And therefore, it has been so important, for example, for TUI Cruises or RIU that they come back to the level of dividends they had before or even to extend the level of dividends. And that is working very well beside the fact that they are really great companies, operational excellence. If you look at investments in total, I mean, the IT investments, which we never stopped also during COVID, are really laying the foundation. And at the end, but the big benefit you will see more in 3 years or 4 years than tomorrow is if you are in the same platform, you develop things once and you can then split it to more markets. So I wouldn't expect that the IT investments would go down, because we have so many growth thoughts and initiatives that we have put. I mean in case something happens, you can always reduce it. But I think we are more on the growth pattern. I think on the question on aircraft or own hotel assets, I would say it's not an or, it's in a way an end. You're right, the growth will come through whatever we do dynamic, because you trade with the market, you trade with the daily pricing, the daily availability, and that is something, especially when you have good IT system direct linked to the customer, that's why the margins are superior at least in times when there is some oversupply. So yes, therefore, 1 of the biggest priority we set was -- or the biggest priority was a dynamic packaging. By the way, something which we started to do in Germany a couple of years ago, and that is nothing is capital free because we had to adopt IT system, building access to Uniper, to the general manager consolidators. Also some money involved, but of course, it's less capital and less risk. On the other hand, if you want to make sure that you are not torn between supply and demand, it's important that you can have a defined capacity of aircraft or our own hotels. I think that we feel very comfortable with the number of aircrafts we have. That doesn't mean that here TUI aircraft are 1 aircraft. They are more, but we are not talking about 20 or 30 aircrafts more. It's more important that we have the fleet to roll over to get the MAX to reduce the operational cost significantly. But we don't have a -- it's always good to have a fit between the capacity, wholesale capacity and the wholesale or the own flight capacity. On the hotel side, first, we have a very strong joint venture. I mean if you look at RIU, I think it's probably the company, a hotel company, which is the best-performing company I know, at least in the world, and that's why we did the RIU III, which, I mean, we will see the first benefits in 3 years. But then the return is outstanding. And I think it's good that we do it in vehicles where the management is superior. And maybe we only participate with 50%, but it's better to participate in something good with 50% compared to with something bad with 100%. So that's why we are very happy to work with the joint ventures. And they are also unique in the product set. Yes, we have some hotels which we own 100%. If there would be a superior beach location in Mexico, for example, we would be happy to have a Robinson Club in Mexico. But these occasions are very, very rare to find, and that's why the willingness and the openness to invest huge amount is limited. And it's more using the opportunities, or if we have a great occasion like we had now on Zanzibar, or we have a nice plot which we had from pre-COVID on Cape Verde, where we will, on both, build Robinson Clubs, we will do with the hotel fund. So joint ventures, hotel fund, and very, very rarely, we will do on our own, and most with partners where we have the full trust that what they do, they do extremely well.

James Rowland from Barclays. My first 1 is on the 25% -- or at least 25% EBIT growth. Could you maybe frame how much of that is coming from recovery of the business to sort of pre-COVID passenger levels versus self-help measures? And then also, how do we think about ceding to that EBIT growth as well? Maybe what's the maximum that's achievable? And then the second question is on your shift to dynamic packaging or growth in dynamic packaging. You said in your presentation that wholesale has actually got a resurgence of demand. So as you find the right balance of dynamic in wholesale, is that accretive to your profit generation in the Markets & Airlines division?

I would like that Mathias answer the question about numbers, because a CFO normally is more trustful than a CEO. On the dynamic, I think it's important -- I mean, the dynamic is more quite often a short-term opportunity, a great opportunity. And as said, it depends on oversupply, undersupply, and to trade that, and to offer by far more products. That's the case. The wholesale is very important because that gives us the uniqueness. That's why I showed the customer satisfaction, which is, on dedicated -- on wholesale product, normally higher. Yes, the growth potential in dynamic is by far higher. Also the regional set up. In the past, we haven't had hotels on Zanzibar besides our own. Now we can offer the full range, the Italian 1 star product as well as the 6-star segment product. So the potential is huge. We should never forget the core business of TUI, which is the uniqueness or the USP products. Yes, the 1 has higher growth potential, has more resilience and give us more opportunity. The rest is very, very important for us, for the customer. I mean if you look at Disney, if you look at Netflix, they had good reasons why they started to build their own or to produce their own series, because that's -- I mean, I know it from the kids, whenever these strange things come up, they are off, they sit there and wait for it. And this is a little bit similar. That's what -- the Robinson Club has been the first product we had where people, still, and even more, they go into the Robinson Club because they can say, I've been to the Robinson Club. I have been really recognized as part of the team and so on. So we need these products, but the growth will be more on the dynamic. And if dynamic is good profitability or outstanding profitable, or maybe sometimes less profitable, it depends on the market condition, but overall, it will pay a lot into our profitability. And I think when you have this in mind, when we say we want not only to see the 25% EBIT growth, Mathias will talk about, we do see that there are different pockets of profit growth in the future. It's very difficult to say, this year it's that and the next year it's that. But overall, it's good to have a wide range of products, new customers with whom we can grow. And the quickest 1 is and will be dynamic packaging, which, in a way, when you look at the component business, it's in a way also dynamic, price dynamic. What we do is now with a direct connect to a channel manager, means that we get the hotel at the price for, let's say, 100. And we can sell them this product as bed only. We can dynamic package this with a package. We can say we sell it only as a hotel. We take 30% markup, because we only will take the markup 15% because we've combined it with a known airline seat. So that gives us a lot of flexibility. And did we leverage on that a couple of years ago? No. Do we leverage on that today? Yes. But I would say we are achieving 20% of what we can achieve also including AI, which will get more and more important to us. And I hope that the strategy is clear and you can see why we are so energized. On the other hand, it's tough work, and it means every month you have to deliver what you want to deliver before you can commercialize. And it's not easy. It needs a full dedicated team. It needs -- I mean, we've built up -- sorry, if I talk too much, a dedicated IT resource in Porto in Ukraine at the moment at the border to Poland and Pune to have our dedicated team to drive that, because with dedicated own teams, the efficiency is higher, costs are lower. And it's hard work, and we are still in a catch-up mode. Others, especially single product companies have an advantage, but we are catching up. And then through the ecosystem, we have the marketplace, the customer value benefit. And that's why we are so confident that in the long run, we will add a lot of value to customers, to colleagues, because they want to be proud that TUI is superior, and at the end also -- or not at the end, during the time also to shareholders. If we don't have the trust of our shareholders, it's very difficult. Although we don't need the capital raises anymore, but at the end, it's also important that the share price is at a good level. The self-confidence to create that and to give our people that they feel really proud of being part of TUI, that is something where we really need to get stronger, to do more marketing campaign. I mean, we -- what's the first time when something didn't work well, to cut costs on marketing. I'm very sure if we would add another EUR 100 million on marketing spend -- yes, it's not planned, so don't worry about the 25%. But I would, in a way, feel more happy it will be 35%, but we would say, EUR 100 million we spent more on marketing, and then it will be only 25%. So getting into a self -- what is the opposite word of vicious circle, in a positive circle momentum. And we are just at the edge that we can achieve that. And as I said, we moved in TUI into 1 building completely branded, which was very new to us and people are very proud of it. We will change some of the delivery of the aircraft painting, how we do it inside. So people should really feel proud to travel with TUI and should feel proud of being with TUI. My learning was that companies are successful if this proudness, if the agility is there even if you're in a very difficult market, and we were quite often beaten by -- for good reasons by analysts, by shareholders, and now we turn it around, and that's why it makes so much fun. And that's why -- and I hope that the shareholders will support that and the Supervisory Board that I don't have to retire next year or after next year, because it's so much fun to do the transformation. And by the way, when my wife asked me why I'm still working, I told her, "Do you want to divorce? Because it would end up in divorce if I'm at home." So it's a lot of fun building it up, and we are proud, and I think we can talk about the whole team. We were on roads with 100 people on our SLT, and to feel the spirit that you are winning again, and that you are not beaten because you lost market share, or you see the great performance of Jet2, which is a wonderful company, and you say, they do something better. But now to see that we've started to do something better and that we catch up. This is our booking, great company, but why shouldn't we sell the Acco-Only as they do so. And to give this spirit back in the company is a lot of fun and working with the colleagues and traveling around, I mean, it's different than producing yogurt or weapons or so on. We have vacation almost all the time. And if the numbers are right, it's even better. On the other hand, we know that the business is always -- it's not an easy business. It has a lot of challenges, and therefore, this resilience, the flexibility is so important. No one knows what will be tomorrow. I'm pretty sure we will come out, if something happens, stronger than before. Sorry, talking too much.

On the questions on the guidance. I think the question was how does it compare to '19 levels? And what would be beyond, right, James?

You could frame it in how much is the recovery of the business. Obviously, you've got the hedging tailwind as well in that recovery of the business versus what's self-help. So some of the strategy, operational improvements you discussed here? Sorry, and final thing is what's the ceiling to that EBIT growth do you think?

I mean, if you go through some of the segments, and let me answer each kind of what's the '24 cornerstone or building block and what is then beyond. If you think about the hotels, they're already beyond the '19 results. And from all what you have heard here, we would expect them to modestly grow in '24 as well and beyond. And I think with fueling that with the not the big investments, but through joint ventures, we talked about the new RIU JV, et cetera, this will all help to further kind of contribute to this 7% to 10% EBIT growth for the group. So hotels, expected kind of at the level they have, will further modestly increase. That's the expectation from us on the hotel segment. In cruises, I think it's pretty much a timing effect this year. We talked about this. They needed time to ramp up the occupancy. Now we have the occupancy and the portfolio of ships is not uncomparable to '19. At the same time, '19 was, for Marella, a record year, because they had even more ships. They had 6, now they have 5. And also the fuel regulation was, in terms of the fuel cost for the ships were lower. Also, but still in '24, if you think about occupancy at the level of '19, and now a full year in front of them, this shows, I think, the potential. And then going forward, each year, we will have a new delivery in TUI Cruises. And I think we put it on the slide you can expect around EUR 30 million from that ship. It's a bit like the [ rhythm ] that we had in the past.

Our share.

Our share, absolutely. Now the question will be, for each of these deliveries, what will be the net development of the capacity. Will there be all ships utilized, go out, doing something else with them. This will be a discussion for each of the year. But again, if you think about the stream of profit growth, another cornerstone for beyond '24. And then on Musement, I think we want them back to the level they had in the past and then invest in growth for the business. And at the same time, with the level they have this year at actual rates, I think it's 36 -- around EUR 35 million. In '19, they were EUR 50 million higher than that. So I think it has some contribution to the group, but it's more important that we continue to grow the business and that they start to grow customer groups. And this was, as Sebastian said, that we get into a position that we can in-source these customers into other products. And then on the Markets, this year, first step, '19, they were at EUR 240 million, including the cost of the MAX. If you add them back, I think it's a bit early to say what is the real expectation on the business, but you also mentioned the hedge impact. So there is a way to go for the business. And then all these initiatives that we talked about, they will start to come into the results this year, but even more in the years thereafter. So I think if you take that all together, that probably gives you some -- how we look at the building blocks of how we build this guidance together.

And I mean, we're in December, and we know, unless something severe happens about the first quarter, which would support that. I could have talked a lot about what ideas and thoughts we have for future growth, why is TUI strong in a few countries in Europe and not globally. Why haven't we had the marketplaces for specialist products, which we would never produce on our own. So there is a lot to come. On the other hand, I'm a strong believer you should do always 3 things right, and when you have done them right, then you can go for the next 3 things. The most important 1 was the dynamic packaging -- or not was, is. Second is direct access to supplier. And third is the global platform, which we call Trips rollout. And then we do 4 and 5 and 6 beside the operational excellence. But we are not short on 9, 10, 11, but let's do the first 3 things well, so that we can really commercialize harvest what we are doing.

It's Jaina Mistry from Jefferies. I've got 3 questions as well. First thing on the hotels business, for H1, you said that the number of available beds is up by 4%. Could you break that down into actual new capacity, the new hotels added to the system versus the RIU hotels being fully refurbished and coming back on to your platform? And then secondly, on Winter '23, can you talk about your average selling price for the U.K. business. You gave the bookings number. I wondered if you could give ASPs as well? And then lastly, on hotels again, I wondered if you could quantify the OpEx inflation that you expect to see for FY '25?

The first question, the available beds are really new beds and added to the system. There is 1 I remember, which is on Mauritius, which we will -- so it's, I would say, 2/3 or 75% are really new hotels and maybe 15%, 20%, and just I think Mauritius is the only one the RIU Hotel, which was first tear down and is rebuilt. And I think it will come into it in spring, summer, something. So it will be even more than 80%, which is really incremental new things. On the average selling price, I think what is good is, one, the inflation has gone down significantly, not only -- and I don't know where the inflation is now in the U.K., so 3%, 4%. But especially in countries like Spain or so, it's below what we experience in Central Europe and maybe also in the U.K. And also now the strong increases of hotel prices is over. So I would say that at the moment that's why the margins are climbing and the profit is increasing. A significant part of the price increases, yes, are still needed for the inflation on the hotel side. On the other side, on the airline side, we have significant cost decreases, fuel, but also consumption and all these things. So a significant part of the increase in the selling price doesn't go to the supplier and stays in the system. On OpEx inflation?

Yes, I think we saw like a ramp-up of inflation that came through the hotel contracts in '23. The other part will come into place in '24, because it takes a year until you renegotiate. Then sometimes there's some kind of delay. But overall, as Sebastian said, in this corridor of 3% to 6% price increase that we see throughout all the markets, you normally pass on the inflation, airlines and hotels through the price increase. And for the U.K., it's also there in this corridor of this 3% to 6%. So there's no difference.

It's quite interesting. You can do a lot. I mean, there are historical benefits we have. We bought options for aircrafts and these prices are today incredibly attractive. And I mean, look at Ryanair, they have done it even better. And these great prices with low consumptions help a lot in having a good OpEx ratio. On hotel side, as said, we are seeing less inflation as price increases. There is, if you look at things which you normally don't see so much, as I said, the FTC cost, which 2 years ago were tremendous, we said we put EUR 50 million into the system and want to save significantly more, which then triggers the complaint costs. What we do see today, with all the automation, it has really less than halved. So there's a lot of things where you can still take out cost. And also on the platforming, if you produce things once, you need by far less people. And the last thing, we have had always shortage on IT capacity. And I remember the times when an external 1 in U.K. has been even worse. You had to pay EUR 700, EUR 800 per day. If we do it with our own capacity in Pune, you're at 25%, and the others, you may be at 50%. But what is good, it is own people, the productivity is very high. So the high amount of investment we take on IT, which are absolutely necessary, actually is coming along with a 100% increase in productivity or in output. And I think this is so important that the competitiveness to other market players will improve. And therefore, my estimate would be that at least with today's inflation rate, which we still see, we can manage slightly below this inflation rate, unless there's a big thing on food prices, but that's why we started to hedge now by earlier.

Ali Naqvi from HSBC. Just a couple of questions. How much flex do you have in your EBIT guidance in case there's any discounting in the market in terms of pricing? And then secondly, in terms of impacted regions in Middle East, how much of that volume would be in the summer season? And finally, are you seeing any changes in your hotelier relationships as a result of all the capacity that's coming into the market from EasyJet and Jet2's...

Maybe I'll start with what's in the guidance. I mean, naturally, the guidance reflects what we currently see as a market environment. If there was a bigger impact or more impact than we currently see, then we would need to look at it. At the same time, if you look at the components, I think there's substantial growth still coming from, for instance, cruises. And there, I mean, if the volume is plus 10% or plus 5%, there will be always significant volume coming through the cruise demand. So I think that's how we would like to look at the guidance.

On -- I mean you are referring to countries like Egypt or Turkey. Egypt in summer is not big for us. It's small. Turkey is big. But overall, it's still of limited importance. And if you look at where others have been better and take market share from TUI, it was actually in these 2 countries. And this we want to take back because these were countries where we were not as flexible as we could do. So if you talk about our hotel relationship, it was in the past quite often a love and hate relationship. Love because when we said we bring 100 customers or 1,000 customers or 10,000 customers, we brought the 10,000 customers. On the other hand, we were not growing. Jet2 or others were growing. And of course, for a hotelier who is building a new hotel, growth is often of essence. Since we have started to grow this winter, this has completely changed. And we are now contacted by hoteliers, who said, "Oh, you're growing again. That's wonderful." The second thing why hoteliers didn't like us was it was extremely complex to work with TUI. We had 5 different buying systems, and they had to open 1 system for beds for Belgium, 1 for Germany, 1 for England, 1 for -- this now we have unified, brought together for the hoteliers. The second thing is -- and that's why dynamic packaging is so important, with our dear competitor in England, they had the direct link to the general manager of the hotelier. which made it very easy for the hotelier to change the prices allotments. And with TUI, it was still sometimes on [indiscernible] and other things, which makes the whole thing complex. And that, I would say, we are 70% through. The next 30% will come in '24, to be at the same level of the best competitor. What we can add to it, and this is a big benefit to TUI, one, with TUI, they are not depending on one source market, which has become very, very important. And what we will also allow, and this is a big benefit to the biggest accommodation-only player, is distribution-led pricing, because I would say, for example, a TUI Germany customer in a hotel stays longer and has more ancillary revenues for the hotelier, so less costs and higher margin. And you could say this has a higher value for the hotelier. So for TUI in Germany, you get a different price than for a customer in Holland, which is all very late, very price sensitive, and so on. So the channel-based pricing is some of the uniqueness and high number of source markets. For example, for Cape Verde, we have a very small tour operator in Portugal. We are now bringing the platform to Portugal. So that means that from, let's say, a handful thousands of customers, we can increase to 100. This has a high, high value for the Cape Verde hotels, because these people, they stay short, but they pay double the price of a wholesaler. So that's what, technology-wise, we were not good. We were very old fashioned. The mentioned competitor, Jet2, did it by far better than we. And now we are catching up, and we want to be -- I mean, all the competitors will do better, but at least we don't want to have a disadvantage. We are heading to an advantage. And therefore, we do see a -- I mean the OTAs were always happy because they get high volumes for us and we are very reliable, but we were not easy to handle with. And that we are changing, and we are growing. And therefore, I have been to a lot of hotel conferences, I will go to Antalya next week, and the sentiment towards TUI has changed a lot. We got the exclusivity for Rixos, who may be 1 of the best hotel chains in Turkey. This was a breakthrough and we filled them 100% the hotel. So it's good for them. It's good for us. And a growing company has a higher value to partners than when you have to go and say, can we reduce the allotment? What can we do? We don't want to pay the shortfalls. And if you're growing, a lot of things are getting easier. If you're not growing, a lot of things are more difficult. And I think at the moment, we manage well with the hoteliers. By the way, it's the same with airlines. We now connect with NDC [X] with Amadeus, so that we have also the online rates of the airlines, which give you normally a benefit of EUR 10 to EUR 20. Sounds small, but it's a big thing. And as I said, now we have rolled out our consolidated airfare product to British retail last week. I haven't seen the numbers yet, but even if we only replace what we bought third party, it has a significant impact. And this kind of commercializing what we have and making people aware that pricing can be better, buying can be better, marketing can be better is a big, big benefit. And if we ask, we do once a year a, call it, TUIgether, employees survey. And 1 of the things which came out, we are still too slow, we are still -- and this to change sounds easy, but it's -- we are all working, very strong commitment, and we see the benefits. And as I said, we could learn a lot from Booking, from Jet2, from DER when it comes to long haul, but to admit that competitors do something very good and sometimes better than us, and put this willingness to catch up and to overtake is so important on top of what we do very good.

Any further questions from the room? Otherwise, we will give audience on the web a quick chance. That's the one.

[indiscernible] from Bernstein. One of your competitors you spoke about earlier, Jet2, has had some success targeting a more off-line strategy and looking at third-party...

A more what?

A more off-line strategy, targeting third-party distributors. So I was wondering how you think about your off-line, online and indirect/direct share going forward?

I mean that is what we changed a year ago. There was a very strong focus on online. I said the shift was online more to app to have more unpaid. And we very clearly said we want to be also in retail. And we moved strongly in retail, and we now get a significantly higher share. In Germany, there we started, but also now you may have seen, we changed some of the position of the U.K. management board. And 1 of the things they moved in was into the retailer, again, to make deals with retailers to be very reliable to them, to make an attractive value proposition to them. And that has seen a significant benefit during the year. And it's very clear that we need both. And we want to be very reliable partners for both, not for 1 year, for 2 years, but for the eternity. And again, there we could learn something from our competitor, not to say or, but to say and. And this is working very well. And the commission you pay is important. But if the value of the product you sell, the margin is higher, you can afford also to pay a higher commission. And that's why I'm always pushing the team to have a good and a very good relationship to a retailer, because they sell the product anyhow. And then they should sell it also with a fair market share to us. So this is one. And the second is the shift from web to app.

So if there are no further questions in the room, I would say we ask the operator if somebody online is there with a question.

[Operator Instructions] We have no questions on the phone line.

That was perfect. Then I would say, perhaps some closing remarks.

I'm not prepared for closing remarks. I thought Jamie, you would have another question, but -- your questions are the most challenging ones, I must admit. And we need a lot of challenges. No, as you said, we are changing TUI. We are full of energy. Nothing is easy. There will be probably some setbacks in market, and maybe we do something not as good as we wanted to do, but to learn and to get better is important. A lot of energy to shape the market, to be very fair to our competitors, because they are quite often doing, in some areas, better jobs than we do. Learning from them to have some effort, some dignity to what others do is important, and I'm really thankful for you being with us and telling us. I mean, a lot of things I have read in analyst report before, because you have the big advantage to listen to everyone and to learn from everyone. And therefore, thank you very much for the work you are doing. Although we don't pay for what you do, we read very much what you do, and it helps us a lot in getting better. I know we have a great team, who is happy to answer most of your questions. Please feel free if you have thoughts on what we could do better, what we should do better, and I think we would be all happy if the world would see some more peace because what we do is important. It's important for the destinations for our customers. On the other hand, the world is, in some areas, a horrible place. And I think we should do the utmost to look after our neighbor, colleague, and wherever we can make the world better. And thank you very much for being with us, and I'm looking forward to further meetings in London or maybe at 1 time in Hanover, which I really would like to show you that somebody once said, we are the NGO head office of tourism in Hanover. Now we are a company which is putting a lot of effort in branding, in energizing people, and giving a trust to people, caring about customers, and maybe it's of interest for you to feel that. And it was just an idea. Hopefully, I don't shock you, but maybe we can do 1 day, in our head office, a meeting like this again. Thank you very much and Merry Christmas and good time until then. And I had hoped that we would have chocolate -- what is it called, Nicholas [indiscernible]? What is the English word for it?

They don't have it.

Is it? Then it's not so important here than in Germany, because if I don't bring something home for the kids tonight, then there will be an issue. I have to solve the problem. So it's a very important day, at least in Germany, about the Saint Nicholas. Okay. Thank you very much all the best.