TUI AG · XETR:TUI1
TUI — Q3 2019 Earnings Presentation
35 slides from TUI's earnings presentation, Aug 13, 2019
Slide 1: FY19 Q3 Results
FY19 Q3 Results 13 August 2019 Cameron Highlands, Malaysia
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains a number of statements related to the future development of TUI. These statements are based both on assumptions and estimates. Although we are convinced that these future-related statements are realistic, we cannot guarantee them, for our assumpt
Slide 3: Strategy Update
STRATEGY UPDATE FRITZ JOUSSEN 3 TUI GROUP | 2019 Q3 Results | 13 August 2019
Slide 4: TUI's unique integrated business model and strong strategic position delivers superior returns
TUI’s unique integrated business model and strong strategic position delivers superior returns, even within a challenging market environment MARKETS & AIRLINES HOLIDAY EXPERIENCES 4 STRATEGIC INITIATIVES STRONG CUSTOMER BASE DIFFERENTIATED CONTENT Grow Hotel & Cruise business with vertical 1 integra
Slide 5: Grow Hotel & Cruise business – Significant progress made in last quarter
1 Grow Hotel & Cruise business – Significant progress made in last quarter VERTICAL INTEGRATION TO DRIVE PREMIUM RETURNS • Holiday Experiences standing strong, • TUI Blue adding scale to Robinson and TUI underpinned by Q3 results Magic Life by creating an integrated hotel platform • Geographical div
Slide 6: Retain/extend strong positions in Markets & Airlines: Unlock scale benefits
2 Retain /extend strong positions in Markets & Airlines: Unlock scale benefits MARKETS TRANSFORMATION MARKETS & DOMAIN PORTFOLIO PROGRAMME TRANSFORMATION BOARD REVIEW Drive market competitiveness Drive cost, innovation and speed Flexibility and focus on core • Revenues: Upselling, mass- CRM ”The pur
Slide 7: Add scale in new markets and destination experiences
3 + 4 Add scale in new markets and destination experiences – Significant progress made in Q3 NEW GDN1-OTA PLATFORM NEW TOURS & ACTIVITIES PLATFORM • Building reach: Complementary markets to • Integration of Musement platform almost existing business completed • Dynamic packaging: flexible customer •
Slide 8: FY19 Q3 Performance
FY19 Q3 PERFORMANCE FRITZ JOUSSEN 8 TUI GROUP | 2019 Q3 Results | 13 August 2019
Slide 9: Hotels and Cruises with strong Q3 results, Markets & Airlines stabilising
Hotels and Cruises with strong Q3 results, Markets & Airlines is stabilising but heavily impacted by MAX grounding FY19 Q3 UNDERLYING EBITA IN €M Net effect special items -€117m -8 13 28 -31 24 • Holiday Experiences saw strong Q3 growth driven by hotels and cruise – hotel diversification proves Non-
Slide 10: Holiday Experiences: Hotels & Resorts – Q3
Holiday Experiences: Hotels & Resorts – Q3 Strong performance as a result of diversified hotel portfolio AVERAGE OCCUPANCY % AVERAGE REVENUE PER UNDERLYING EBITA (€M) 88 89 BED € FY19 Q3 FY18 Q32 % 80 80 57 58 60 58 Underlying EBITA 91.5 72.4 26.4 Underlying EBITA at CC 4 90.0 80.2 12.2 FY18 Q3 FY19
Slide 11: Holiday Experiences: Cruises – Q3
Holiday Experiences: Cruises – Q3 Growth driven by capacity additions and resilience of high occupancy levels UNDERLYING EBITA (€M) TUI CRUISES MARELLA CRUISES 200 190 FY19 Q3 FY18 Q3 % 138 144 1.6 1.2 100 0.9 99 Underlying EBITA 101.5 88.7 14.4 99 100 0.8 o/w fully consolidated 35.6 32.1 10.9 o/w e
Slide 12: Holiday Experiences: Destination Experiences – Q3
Holiday Experiences: Destination Experiences – Q3 Significant growth achieved, basis set for summer season EXCURSIONS & ACTIVITES SOLD (M‘s) TURNOVER AND EARNINGS (€M) 2.3 FY19 Q3 FY18 Q31 % +92% Total Turnover 379.7 143.8 164.0 1.2 o/w Turnover 3rd Party 259.4 65.8 294.2 Underlying EBITA 15.3 17.4
Slide 13: Markets & Airlines – Q3
Markets & Airlines – Q3 Stabilising underlying performance with costs from MAX impact as expected ONLINE DISTRIBUTION % APP DISTRIBUTION %1 TURNOVER AND EARNINGS (€M) 47 48 1.4 FY19 Q3 FY18 Q33 % 0.9 +56% Turnover 4,002.3 3,988.3 0.4 Underlying EBITA -103.9 37.2 n.a. FY18 Q3 FY19 Q3 FY18 Q3 FY19 Q3
Slide 14: Summer 2019 expected development
Summer 2019 expected development HOLIDAY EXPERIENCES MARKETS & AIRLINES HOTELS & RESORTS • FY19 results impacted by 737 MAX grounding • Three further hotel openings planned for Summer 2019, bringing the total • Measures in place to end of Summer, working towards an up to since merger to ~70 approxim
Slide 15: FY19 9M Results
FY19 9M RESULTS BIRGIT CONIX 15 TUI GROUP | 2019 Q3 Results | 13 August 2019
Slide 16: Holiday Experiences standing strong; Boeing MAX impact weighs on 9M performance
Holiday Experiences businesses standing strong. Market challenges impacting Markets & Airlines, Boeing MAX impact weighs on 9M performance FY19 9M UNDERLYING EBITA IN €M 21 Net effect special items -€130m 35 Excl. €43m from -174 disposal gains relating to four Riu properties PY 29 33 -43 13 20 -200
Slide 17: Income Statement – 9M
Income Statement – 9M Group result after minorities mainly impacted by Boeing MAX TURNOVER In €m FY19 9M FY18 9M1 DELTA YOY • Broadly stable excluding the effect of smaller M&A Turnover 11,421.4 11,142.6 278.8 €290.8m pre Underlying EBITDA Boeing MAX 141.8 312.5 -170.7 UNDERLYING EBITDA impact Depre
Slide 18: Free cash flow – 9M impacted by Boeing MAX
Free cash flow – 9M impacted by Boeing MAX, lower working capital change and elevated net capex and investments as expected UNDERLYING EBITDA UNDERLYING EBITDA (€M) WORKING CAPITAL CHANGE (€M) • Strong earnings contribution from 142 313 1.251 Holiday Experiences; Markets & Airlines 564 -€171m -55% 5
Slide 19: 9M Capex is in line with expectations
9M Capex is in line with expectations – Growth investments will continue to deliver attractive returns NET CAPEX AND INVESTMENTS NET CAPEX & INVESTMENTS 9M NET CAPEX & INVESTMENTS • Hotels: Reflects delivery of our growth (€M) 890 BY SEGMENT (€M) strategy and some phasing from FY18; blended ROIC tar
Slide 20: Higher net debt position reflects Boeing MAX impact and reinvestment
Higher net debt position reflects ~€150m Boeing MAX impact, operational development, working capital movement and our planned re-investment and financing strategy 9M NET DEBT FY19 9M MOVEMENT IN NET DEBT (€M) • Net debt increased due to Free Cash Flow development (Boeing MAX and investments) and pla
Slide 21: Reiterating TUI's robust financial position
Reiterating TUI’s robust financial position LEVERAGE RATIO LEVERAGE RATIO CREDIT RATING • Leverage ratio driven by asset investments and 3,5 FY 2019 Leverage target grounding of Boeing MAX leads to FY19 expectation at range 3.00x – 2.25x, 3.3 expect upper end Rating FY16 FY17 FY18 Current upper end
Slide 22: FY19 guidance confirmed
FY19 guidance confirmed FY19e1 FY18 Turnover2 Around 3% growth €18,504m5 Full summer season flight capacity replacement for 737 MAX aircraft: Underlying EBITA rebased3,5 €1,177m3,5 approx. up to minus 26% (total one-off impact of approx. up to €300m) Adjustments ~€125m €87m Net capex and investments
Slide 23: Summary
SUMMARY FRITZ JOUSSEN 23 TUI GROUP | 2019 Q3 Results | 13 August 2019
Slide 24: TUI's transformation into a tourism platform business
TUI’s transformation into a tourism platform business POST MERGER (2014-2018) FUTURE TRANSFORMATION • Focused growth in Hotels and Cruises: Diversification, reduced capital intensity, ROIC target of ≥15%, investments ~3.5% of • Creation of an integrated tourism company revenues • Four years of stron
Slide 25: Appendix
APPENDIX 25 TUI GROUP | 2019 Q3 Results | 13 August 2019
Slide 26: IFRS 15 and IFRS 9 application
IFRS 15 and IFRS 9 application IFRS 15 – Revenue from contracts with customers IFRS 9 – Financial instruments • Application from 1 October 2018 using retrospective method • Application from 1 October 2018 (FY18 related line items in B/S (FY18 now fully aligned to IFRS 15) and I/S adjusted, measureme
Slide 27: 9M reported position rebased for Turkish Lira
9M reported position rebased for Turkish Lira FY19 9M UNDERLYING EBITA IN €M 21 Net effect special items -€130m -18 18 35 35 17 -174 Excl. €43m from 29 disposal gains relating to four Riu 33 -43 13 properties PY 20 -200 -215 -149 • Holiday Experiences with strong Improvement Non-repeat Non-repeat 9M
Slide 28: Q3 reported position rebased for Turkish Lira
Q3 reported position rebased for Turkish Lira FY19 Q3 UNDERLYING EBITA IN €M Net effect special items -€117m -8 13 28 -31 24 -6 8 Strong Q3 growth driven by Net of the Non- -144 repeat of hotels and cruise MAX, ATC Improvement disposal Non-repeat 195 and Easter 193 187 – hotel impact, driven by gain
Slide 29: FY19 9M Turnover by Segment
FY19 9M Turnover by Segment – restated for IFRS15 (excludes Intra-Group Turnover and JVs/associates)* In €m FY19 9M FY18 9M1 Change FX Change ex FX Hotels & Resorts 425.5 448.9 -23.4 -0.3 -23.1 - Riu 294.5 343.1 -48.6 7.7 -56.3 - Robinson 67.4 53.3 14.1 -1.0 15.1 - Blue Diamond - - - - - - Other 63.
Slide 30: FY19 9M Underlying EBITA by Segment
FY19 9M Underlying EBITA by Segment* In €m FY19 9M FY18 9M1 Change FX Change ex FX Hotels & Resorts 226.9 244.7 -17.8 12.8 -30.6 - Riu 223.0 278.7 -55.7 3.6 -59.3 - Robinson 6.2 6.2 - 1.7 -1.7 - Blue Diamond** 16.5 16.3 0.2 1.6 - 1.4 - Other -18.9 -56.5 37.7 6.0 31.7 Cruises 207.9 182.4 25.5 0.1 25.
Slide 31: FY19 Q3 Turnover by Segment
FY19 Q3 Turnover by Segment – restated for IFRS15 (excludes Intra-Group Turnover and JVs/associates)* In €m FY19 Q3 FY18 Q31 Change FX Change ex FX Hotels & Resorts 154.5 161.0 -6.5 -2.1 -4.4 - Riu 93.8 108.7 -14.9 3.4 -18.4 - Robinson 24.8 19.4 5.4 -0.9 6.2 - Blue Diamond - - - - - - Other 35.9 32.
Slide 32: FY19 Q3 Underlying EBITA by Segment
FY19 Q3 Underlying EBITA by Segment* In €m FY19 Q3 FY18 Q311 Change FX Change ex FX Hotels & Resorts 91.5 72.4 19.1 1.4 17.7 - Riu 73.4 78.3 -4.9 1.8 -6.7 - Robinson 6.5 5.3 1.2 -0.6 1.9 - Blue Diamond** -2.3 2.0 -4.3 0.0 -4.3 - Other 13.9 -13.2 27.1 0.1 27.0 Cruises 101.5 88.7 12.8 -0.1 12.9 - TUI
Slide 33: Cash Flow & Movement in Net Debt – 9M
Cash Flow & Movement in Net Debt – 9M In €m FY19 9M FY18 9M EBITDA underlying 141.8 312.5 EBITDA reported 103.7 285.4 Working capital 807.5 1,251.4 Other cash effects 35.0 15.7 At equity income -184.0 -189.9 Dividends received from JVs and associates 120.4 149.1 Tax paid -98.1 -134.9 Interest (cash)
Slide 34: Net Financial Position, Pensions and Operating Leases
Net Financial Position, Pensions and Operating Leases In €m 30 Jun 2019 30 Jun 2018 Financial liabilities -2,637 -2,031 - Finance leases -1,487 -1,360 FINANCIAL LIABILITIES - Senior Notes -298 -296 • Higher versus prior year as a result of Schuldschein and - Liabilities to banks -835 -349 new financ
Slide 35: Contact
ANALYST AND INVESTOR ENQUIRIES Contact Peter Krueger, Member of the Group Executive Committee, Group Director Strategy, M&A and Investor Relations Tel: +49 (0)511 566 1440 Contacts for Analysts and Investors in UK, Ireland and Americas Hazel Chung, Senior Investor Relations Manager Tel: +44 (0)1293