TUI reports 10th quarter of underlying EBIT growth

(Sharecast News) - Anglo-German leisure travel conglomerate TUI Group reported its 10th consecutive quarter of underlying EBIT growth on Tuesday, with its holiday experiences segment driving improvements in the first quarter of the 2025 financial year. The Frankfurt-listed company, which delisted from the London Stock Exchange last June, said revenue rose 13% to €4.9bn, supported by higher demand and improved pricing.

It said its holiday experiences division, which includes hotels and resorts, cruises, and 'TUI Musement', delivered a strong performance.

Hotels and resorts posted a record underlying EBIT increase of 65.8%, driven by higher occupancy and pricing.

Cruises saw a 39.6% rise in underlying EBIT, benefiting from strong demand and fleet expansion.

TUI Musement recorded a 78.5% improvement, supported by increased experiences sold and transfers.

However, the markets and airline segment saw a 31% decline in underlying EBIT due to investments ahead of the summer season.

Customer numbers increased 6% to 3.7 million, with dynamic package bookings up 18%.

Average load factor remained stable at 85%.

Net debt was largely unchanged, increasing slightly to €4.1bn from €4bn the prior year.

TUI noted that it had received a BB credit rating with a stable outlook from Fitch, marking a return to pre-pandemic levels.

The company reaffirmed its full-year guidance, expecting revenue growth of 5% to 10% and underlying EBIT growth of 7% to 10%, with a positive outlook for the summer season.

Winter 2024-2025 bookings were up 2% with an average selling price increase of 4%, while summer 2025 bookings showed a similar 2% rise, also with a 4% average selling price increase.

Holiday experiences remained on track for the second quarter, with higher rates and strong demand.

The hotels and resorts segment was expecting higher occupancy and rates despite some routine hotel closures.

Cruises would operate 17 ships, with an additional vessel, Mein Schiff Relax, joining later in the period.

TUI Musement meanwhile anticipated increased bookings for tours, activities, and transfers.

Strategic developments included hotel portfolio expansion, particularly in Asia, with new properties in Vietnam and Indonesia.

The company said it was also continuing its digitalisation efforts, notably a partnership with Ryanair to enhance its dynamic holiday offerings in the UK and Ireland.

TUI said its app sales grew 45% year-over-year in the UK, now accounting for 17.6% of total sales.

The company also said it maintained a strong hedging position on fuel and currency, providing cost certainty.

Sustainability remained a focus, with TUI earning an 'A' rating from the Carbon Disclosure Project for climate change action.

The company said it was also investing in fuel-efficient aircraft and participating in research projects to reduce aviation's environmental impact.

Looking ahead, TUI said it was aiming to accelerate profitable growth, targeting underlying EBIT growth of 7% to 10% annually and reducing net leverage below 1.0x.

The company said it expected continued momentum in both its holiday experiences and markets and airline divisions, reinforcing its position in the travel sector.

At 1011 CET (0911 GMT), shares in TUI were down 9.76% in Frankfurt, at €7.71.

Reporting by Josh White for Sharecast.com.