CEOInterviews.AITUI-CFO Mathias Kiep: Wir planen mit 25 Prozent Wachstum!

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Host0:08

Dear viewers, with these temperatures you can easily get wanderlust, and that fits perfectly because at the Frankfurt Stock Exchange, the German Stock Exchange, everything today is about TUI AG. After almost 10 years, the company is returning from London to Germany. To discuss what this means and how TUI will continue in the future, I'm joined today by CFO Mathias Kiep. Good morning, and thank you for being here. Mr. Kiep, this morning we have a very good start to trading, plus 4% on the stock currently. How is the mood?

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Mathias Kiep0:37

That is naturally great. First of all, it's great that we have come back home to the German Stock Exchange today. We can only say thank you to the London Stock Exchange after 10 years, but being able to make such a start today is naturally great. We are very happy.

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Host0:50

What do you hope to gain from the return from London to Germany?

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Mathias Kiep0:53

A very good question. Yes, because indeed, as you mentioned, 10 years ago we had a very clear vote from shareholders to go to London, and in February we had a very, very clear vote from our shareholders to return to Frankfurt. In the end, volume will now come to one place, liquidity only on one exchange, dual structures are always costly, and that disappears. And what many missed is a clear anchor index, and we expect to quickly enter the NX. And these three elements together, I believe, make us somewhat confident.

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Host1:26

Let's talk a bit more about the stock itself, specifically the dividend topic. In 2018 it was very strong at €6.50 per share, and in recent years there was nothing. What does the future look like? Is something planned, and if so, when?

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Mathias Kiep1:41

We do have a plan. I believe in the first step we want to bring the company to the right profitability level. This year we have set out to grow operating profit by at least 25% year-on-year. At the same time, we still have some homework to do in refinancing – the small KfW loan line has been halved again – but we want to get all that done. We also have homework to do with the rating agencies, working together to get back to where we were before the pandemic. And then I think we will have the right ingredients for a solid, serious dividend strategy.

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Host2:16

Is there perhaps already a rough time frame for when that could be planned?

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Mathias Kiep2:19

We need to replace the credit lines by 2026. It should be done a year in advance to ensure a smooth process, and I think by then we will know where the company stands. Then we can formulate a very good dividend strategy. And of course we understand that shareholders will demand that, and we also have the ambition to be able to pay dividends again at some point – that goes without saying.

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Host2:42

The topic of sustainability and CO2 avoidance is naturally becoming more important. Have you already calculated what costs might come in the future, and how do you plan to approach the topic overall?

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Mathias Kiep2:55

Yes, a really important topic. We have to face it and we want to. A very good example is our airline. We are already investing heavily in more efficient aircraft, now moving to the new Boeing Max planes, and that will be a significant step in achieving reductions in the airline. We have had ourselves examined and tested, aiming for a 25% reduction in the airline in the near future. And as I said, aircraft are already a major topic for us.

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Host3:27

Exactly. Perhaps a brief digression: Boeing is under criticism right now and of course cannot deliver all the aircraft that were planned. Are you affected by that, or are you more in the green zone in that regard?

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Mathias Kiep3:37

We are in the green zone when it comes to handling our holiday operations, if I may say so. We have enough aircraft to get all customers where they want to go. As you said at the beginning, towards the sun – the weather here in these latitudes is not exactly reliable. We can definitely state that it is more work, and not every delivery date is as reliable. I think we see that today with Airbus, but also very strongly with Boeing. As long as no plane is left at the gate, I think that's quite positive.

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Host4:03

Exactly. Then let's come to the conclusion and touch again on the debt topic. You already mentioned it earlier. It is naturally very high currently compared to other companies. How does it look in the future? Are you positive that it can be reduced sensibly?

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Mathias Kiep4:16

Yes, the fact is that we are already lower in relative debt than in 2019, which is our reference year before the crisis. This year we will take another step towards getting debt down to net debt, which will probably be the lowest level the company has had in a very long time. But it must continue: increase earnings without letting debt rise alongside. That must be our task.

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Host4:44

Yes, other companies are also indebted, no question. At TUI, in the past, one might have thought that bad news or this debt was already priced in, but the stock still suffered and did not perform. So why do you think your company, your stock, is viewed more critically by market participants than others?

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Mathias Kiep5:05

I believe we now need to deliver quarter by quarter, implementing what we promised each quarter. We always see that this has a positive effect. But also the change of stock exchange, the capital increase is now a year ago, we have cleaned up the balance sheet, completing refinancing – these are all topics that need time to take effect. And I think that's what we will do. We are on a good path, but we continue to deliver quarter by quarter. That is our commitment, and I hope that helps. So with this start today in Germany, we are positive for the future.

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Host5:40

That's how it should be. Then I thank you for the interview. Thank you very much for your time. Sincere thanks.

Yes, dear viewers, TUI looks very, very positive for the future. Thank you for watching. Take care.