Tui Ag · XETR:TUI1
Tui — H1 2019 Earnings Presentation
27 slides from Tui's earnings presentation, Jun 26, 2019
Slide 1: FY19 H1 Strategy Update & Results
FY19 H1 Strategy Update & Results June 2019 Island Boa Vista, Cape Verde
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: TUI's unique integrated business model – 4 strategic initiatives
TUI’s unique integrated business model delivers superior returns – 4 strategic initiatives to stay successful MARKETS & AIRLINES HOLIDAY EXPERIENCES 4 STRATEGIC INITIATIVES STRONG CUSTOMER BASE DIFFERENTIATED CONTENT 1 Grow Hotel & Cruise business with vertical integration to drive premium returns •
Slide 4: Grow Hotel & Cruise business with vertical integration
1 Grow Hotel & Cruise business with vertical integration to drive premium returns Berlin Croatia Bulgaria Dublin New York Greece Portugal Ibiza Italy Turkey Dom Rep Cyprus Mexico 380 HOTELS & Tunisia Egypt 17 CRUISE SHIPS2 TobagoBarbados RESORTS1 Costa Rica Jamaica St. Lucia Aruba Antiqua Cape Verde
Slide 5: Protect and extend strong positions in Markets & Airlines
2 Protect and where possible extend strong positions in Markets & Airlines MARKETS & AIRLINES P&L1 REVENUE & COST BASE INITIATIVES Digitalisation, • Upselling: Drive ancillary product sales Excursions up 95%2 Mass-individualisation & Differentiation • Mass-individualised and packaged offers Up to
Slide 6: New GDN-OTA platform for new markets
3 Add scale for own holiday experiences and expand into new markets: new GDN-OTA platform MARKETS & AIRLINES NEW MARKETS 21m 1m by customers 2022 Current pax booking run rate of ~200k p.a. • Pre-defined packaged product • Complementary markets to existing business • Predominantly own airline capacit
Slide 7: New tours & activities platform
4 Add scale in destination experience markets: new tours & activities platform EXISTING CUSTOMER BASE 3RD PARTY CUSTOMER POTENTIAL OPPORTUNITY • €150bn global market • 7% p.a. growth • Highly fragmented market with ~350k 21m customers - existing markets 3rd Party customers – global reach suppliers •
Slide 8: FY19 H1 Results
FY19 H1 RESULTS 8 TUI GROUP | FY19 H1 Strategy Update & Results | 26 June 2019
Slide 9: H1 result reflects weak demand in Markets & Airlines
H1 result reflects weak demand environment in Markets & Airlines; Holiday Experiences standing strong FY19 H1 UNDERLYING EBITA IN €M -170 • Holiday Experiences standing strong thanks Net effect special items -€16m to investment in content & integrated model • Weak demand environment in Markets & -31
Slide 10: Holiday Experiences: Hotels & Resorts
Holiday Experiences: Hotels & Resorts Resilient H1 performance, benefit from shift of demand to Eastern Med will be H2 weighted AVERAGE OCCUPANCY % AVERAGE REVENUE PER UNDERLYING EBITA (€M) 87 84 BED € FY19 H1 FY18 H12 % 77 77 72 69 68 69 Underlying EBITA 135.4 172.3 -21.4 Like-for-like Underlying E
Slide 11: Holiday Experiences: Cruises
Holiday Experiences: Cruises Earnings increased with demand strong across all three brands UNDERLYING EBITA (€M) TUI CRUISES MARELLA CRUISES 2.8 FY19 H1 FY18 H1 % 2.5 136 1.4 145 1.3 100 100 Underlying EBITA 106.4 93.7 13.6 148 148 99 99 o/w fully consolidated 52.4 40.4 29.7 o/w equity result 54.0 5
Slide 12: Holiday Experiences: Destination Experiences
Holiday Experiences: Destination Experiences Continued growth driven by strategic acquisitions EXCURSIONS & ACTIVITES SOLD (M‘s) TURNOVER AND EARNINGS (€M) 2,4 FY19 H1 FY18 H11 % +95% 1,2 Total Turnover 417.8 144.4 189.3 o/w Turnover 3rd Party 302.8 65.6 361.6 2 Underlying EBITA -10.4 -13.3 21.8 FY1
Slide 13: Markets & Airlines
Markets & Airlines As expected, significant impact on margin from weak Winter demand, plus initial costs of 737 MAX grounding and Easter phasing into Q3 ONLINE DISTRIBUTION % APP DISTRIBUTION %1 TURNOVER AND EARNINGS (€M) 49 50 1,5 1,1 +36% FY19 H1 FY18 H13 % Turnover 5,405.1 5,526.8 -2.2 Underlying
Slide 14: FY19 Outlook
FY19 Outlook – Strong H2 building blocks but continued weak environment in Markets & Airlines HOLIDAY EXPERIENCES MARKETS & AIRLINES HOTELS & RESORTS • FY19 results impacted by 737 MAX grounding • On track to deliver growth from our hotel pipeline - Up to ~€300m additional one-off costs (to end of S
Slide 15: Income Statement
Income Statement H1 winter losses in line with expectations In €m FY19 H1 FY18 H11 ADJUSTMENTS Turnover 6,676.4 6,565.9 Includes PPA of €18m, one-off payment relating to the conversion Underlying EBITA -300.6 -169.7 of a UK pension plan and €11m loss on disposal relating to Corsair. Adjustments (SDI
Slide 16: Cash Flow & Movement in Net Debt
Cash Flow & Movement in Net Debt In €m FY19 H1 FY18 H1 WORKING CAPITAL OUTFLOW DRIVEN BY S18 VOLUME INCREASES EBITDA reported -106.7 4.1 • Higher outflow in Q1 driven by growth in capacity in S18, particularly in Working capital -349.0 -194.7 Central Region, from additional returned aircraft from Ai
Slide 17: Reiterating TUI's robust financial position
Reiterating TUI’s robust financial position GROSS LEVERAGE RATIO DEVELOPMENT AND OUTLOOK SUMMARY 3,5x 3.50x • Leverage ratios driven by investment in 3.25x 3,0x 2.75x 3.00x 3.00x profitable growth 2,5x 2.50x 2.25x 2.25x • Combination of weaker trading & grounding 2,0x of 737 MAX lead to FY19 expecta
Slide 18: FY19 guidance unchanged
FY19 guidance unchanged FY19 Guidance FY19e1 FY18 Turnover2 Around 3% growth €18,504m5 Full summer season flight capacity replacement for 737 MAX aircraft: Underlying EBITA rebased3,5,6 €1,177m3,5 approx. up to minus 26% (total one-off impact of approx. up to €300m) Adjustments ~€125m €87m Net capex
Slide 19: Summary
SUMMARY 19 TUI GROUP | FY19 H1 Strategy Update & Results | 26 June 2019
Slide 20: TUI Group outlook: 3rd wave of growth
TUI Group outlook: Building blocks for future growth – 3rd wave of growth STRONG GROWTH TRACK RECORD: FUTURE GROWTH: MERGER SYNERGIES INVESTMENTS, EFFICIENCY & DIGITALISATION BUILDING BLOCKS 3RD WAVE Markets & Airlines • Strong customer base • Revenue opportunities +13%1 3rd wave: • Cost improvement
Slide 21: Appendix
APPENDIX 21 TUI GROUP | FY19 H1 Strategy Update & Results | 26 June 2019
Slide 22: 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 23: FY19 H1 Turnover by Segment
FY19 H1 Turnover by Segment – restated for IFRS15 (excludes Intra-Group Turnover and JVs/associates)* In €m FY19 H1 FY18 H11 Change FX Change ex FX Hotels & Resorts 271.0 287.9 -16.9 1.8 -18.7 - Riu 200.7 234.4 -33.7 4.2 -37.9 - Robinson 42.6 33.9 8.7 -0.1 8.8 - Blue Diamond - - - - - - Other 27.7 1
Slide 24: FY19 H1 Underlying EBITA by Segment
FY19 H1 Underlying EBITA by Segment* In €m FY19 H1 FY18 H11 Change FX Change ex FX Hotels & Resorts 135.4 172.3 -36.9 11.4 -48.3 - Riu 149.6 200.4 -50.8 1.7 -52.5 - Robinson -0.3 1.0 -1.3 2.2 -3.5 - Blue Diamond** 18.8 14.3 4.5 1.5 2.9 - Other -32.7 -43.4 10.7 5.9 4.8 Cruises 106.4 93.7 12.7 0.1 12.
Slide 25: Net Financial Position, Pensions and Operating Leases
Net Financial Position, Pensions and Operating Leases In €m 31 Mar 2019 31 Mar 2018 Financial liabilities -3,101 -1,978 - Finance leases -1,527 -1,294 FINANCIAL LIABILITIES - Senior Notes -297 -296 • Higher versus prior year as a result of Schuldschein & Commercial Paper issuance, utilisation of sho
Slide 26: Financial Ratios FY18 and Targets for FY19
Financial Ratios FY18 and Targets for FY19 – TUI Definitions LEVERAGE RATIO FY18 DEVELOPMENT AND OUTLOOK €m FY18 Gross debt 2,443 3.50x to Bonds 297 FY19 Leverage Target to Liabilities to banks SPLIT 780 3.25x 80% Aircraft 3.00x 3.00x range 3.00x – 2.25x to Finance lease 1,343 2.75x to Other financi
Slide 27: 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