Tui posts better-than-expected FY earnings

(Sharecast News) - Travel firm Tui posted a better-than-expected jump in full-year earnings on Wednesday as it hailed record results from a number of its segments and announced the return of dividend payments. In FY25, adjusted earnings before interest and tax jumped 12.6% from the previous year to a record €1.46bn, exceeding the company's forecast for a rise of 9% to 11%. Meanwhile, group revenue was 4.4% higher at 24.4bn.

Tui said it benefited from record results in the Holiday Experiences unit, its Tui hotel brands, the Tui cruise companies, and its experience provider Tui Musement.

The group said its "strong" financial performance had created the basis for new dividend policy. It proposed a starting dividend of €0.10 per share for fiscal year 2025, while from 2026 onwards, a dividend of 10% to 20% of adjusted earnings per share will be distributed.

For 2026, Tui expects a 2% to 4% increase in revenue and a 7% to 10% rise in adjusted EBIT.

In the medium term, the group is forecasting average growth in adjusted EBIT of about 7% to 10% compound annual growth rate and a net debt ratio of less than 0.5x.

Chief executive Sebastian Ebel said: "2025 was a successful year for Tui. In a highly competitive market environment, we achieved the best result in the company's history and exceeded the EBIT forecast for the full year 2025.

"The Tui ecosystem with strong proprietary brands such as RIU, Robinson, Tui Blue, and Tui Cruises, and growing global distribution through our well-known tour operators are our strengths."

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: "Tui continues to deliver for holidaymakers and investors alike, confirming the previously announced beat of its full-year profit guidance, despite some weakness on the top line. Tui operates a diverse travel business, owning an airline, cruise ships, hotels, and resorts, serving over 20 million customers across more than 180 destinations.

"Record performances across its hotels, resorts and cruises are doing most of the heavy lifting. Strong growth here helped offset double-digit declines in its airline segment, which suffered from stiff competition and the negative near-term financial impact of significant investments as it looks to position itself for the future.

"Despite the impressive profit performance, it was the news that dividend payments are returning in the new year that stole the show. The first payment of €0.10 per share for the financial year just gone will be made in 2026. Following that, current market forecasts suggest that dividend payments could triple to €0.30 per share the following year, reflecting a respectable forward dividend yield of around 3.6%."