TUI AG · XETR:TUI1
TUI — FY2018 Earnings Presentation
34 slides from TUI's earnings presentation, Dec 13, 2018
Slide 1: FY18 Full Year Results & Strategy Update
FY18 Full Year Results & Strategy Update 13 DECEMBER 2018
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: FY18 Full Year Results
FY18 FULL YEAR RESULTS FRITZ JOUSSEN 3 TUI GROUP | 2018 FY Results | 13 December 2018
Slide 4: Superior strategy delivers strong results in a challenging market environment
Superior strategy delivers strong results in a challenging market environment • Fourth consecutive year of double-digit earnings1 growth post-merger TURNOVER UNDERLYING EBITA • Successful transformation; ~70% of earnings from €19.5bn €1,147m Holiday Experiences versus 30% at merger +6.3%1 +10.9%1 •
Slide 5: TUI Group: Fourth consecutive year of double-digit earnings growth
TUI Group: Fourth consecutive year of double-digit earnings growth1 UNDERLYING EBITA IN €M Net effect special items €10m +10.9% Base -44 growth for 43 -20 FY19 -22 -13 -35 growth 176 -40 +12%2 Further Reflects Corsair Net disposal Air Traffic Control growth in extended impact of four disruption cust
Slide 6: Holiday Experiences: Hotels & Resorts
Holiday Experiences: Hotels & Resorts Another strong overall performance delivers strong earnings growth UNDERLYING EBITA (€m) AVERAGE OCCUPANCY % AVERAGE REVENUE PER BED € FY18 FY17 % 85 86 90 90 89 63 64 65 64 78 79 78 79 83 60 60 56 57 53 51 Underlying EBITA 425.7 356.5 19.4 o/w fully consolidate
Slide 7: Holiday Experiences: Cruises
Holiday Experiences: Cruises Investment paying off: capacity and strong earnings growth delivered UNDERLYING EBITA (€M) TUI CRUISES MARELLA CRUISES 5.2 3.0 2.7 4.5 FY18 FY17 % 3.5 2.0 2.1 2.1 2.7 Underlying EBITA 324.0 255.6 26.8 131 141 115 116 121 1.7 171 169 171 173 178 101.7 100.9 o/w fully cons
Slide 8: Holiday Experiences: Destination Experiences
Holiday Experiences: Destination Experiences Strengthened by strategic M&A ARRIVAL GUESTS (M‘s) TRANSFERS OPERATED TURNOVER AND EARNINGS (€M) 11.5 11.9 (M‘s)2 28.0 24.0 FY18 FY17 % Total Turnover 594.1 444.8 33.6 o/w Turnover 3rd Party 303.5 202.5 49.9 Underlying EBITA 44.7 35.1 27.4 FY17 FY18 1 FY1
Slide 9: Markets & Airlines (formerly Sales & Marketing)
Markets & Airlines (formerly Sales & Marketing) Strength in distribution against backdrop of external challenges CUSTOMERS (M‘s)1 MARKETS TURNOVER AND EARNINGS (€M) 21.1 NET PROMOTER SCORE2 FY18 FY17 % 20.2 REMAIN HIGH AT 50 Turnover 16,996.2 16,143.2 5.3 19.1 19.0 18.8 Underlying EBITA 452.5 526.5
Slide 10: FY18 Full Year Results
FY18 FULL YEAR RESULTS BIRGIT CONIX 10 TUI GROUP | 2018 FY Results | 13 December 2018
Slide 11: Income Statement
Income Statement Strong underlying business performance YoY at ADJUSTMENTS In €m FY18 FY17 YoY Constant Includes PPA €32m and planned restructuring costs in Markets & Currency Airlines Turnover 19,523.9 18,535.0 +5.3% +6.3% INTEREST Underlying EBITA 1,147.0 1,102.1 +4.1% +10.9% Improvement of €31m v
Slide 12: FY18 cash flow still characterised by growth investments
FY18 cash flow still characterised by growth investments FY18 CASH FLOW ANALYSIS IN €M NORMALISED CASH FLOW FREE CASH FLOW TO NET CASH BRIDGE 223 -600 75 -435 262 1,498 -468 898 -298 -204 257 -196 -33 583 124 -227 -222 -56 FY18 Normalised Cash Working Other cash JV Dividends Tax, JV earnings Normali
Slide 13: Strong cash generation allowing to invest, pay dividends and strengthen balance sheet
Strong cash generation allowing to invest, pay dividends and strengthen balance sheet FY19: LAST YEAR OF DISPOSAL PROCEEDS REINVESTMENT CAPITAL ALLOCATION FRAMEWORK ~€0.4bn FY19 net capex & investments expected to Growth investments JV growth be in the range of • Reinvesting disposal proceeds •
Slide 14: Leverage ratio – FY18 reflects Schuldschein, target range maintained
Leverage ratio – FY18 reflects Schuldschein, target range maintained LEVERAGE RATIO FY18 DEVELOPMENT AND OUTLOOK €m FY18 Guidance YOY increase reflects 3.50x Schuldschein issuance Gross debt 2,443 3.25x 3.00x 3.00x to Bonds 297 2.75x to Liabilities to banks 780 2.50x SPLIT 2.25x 2.25x to Finance lea
Slide 15: Business model strength continues to drive ROIC
Business model strength continues to drive ROIC1 HOTELS CRUISE • Delivering strong ROIC for TUI 14% 23% shareholders 13% 12% 20% • Hotels: predominantly lower 11% TUI GROUP 17% 17% capital intensity, JVs FY16 FY17 FY18 24% FY152 FY16 FY17 FY18 • Cruises: partially off balance FY15 23% 22% 22% sheet
Slide 16: FY19 Guidance
FY19 Guidance FY19 Guidance FY19e1 FY18 Turnover2 Around 3% growth €19,524m Underlying EBITA rebased3 At least 10% growth €1,187m3 Adjustments ~€125m €87m Net capex & investments4 ~€1.0bn-€1.2bn €0.8bn Leverage ratio 3.0x to 2.25x 2.7x Dividend per share Growth in line with underlying EBITA rebased3
Slide 17: EBITA growth FY19 – Headwinds and Growth Levers
EBITA growth FY191 – Headwinds and Growth Levers MARKET HEADWINDS GROWTH LEVERS Adverse trading in Q1/Q2 including continued impact • Strong brand & NPS from heatwave (Autumn holidays & Nordics Winter • Annual holiday spend is a top priority for customers bookings) • Yielding of own risk capacity op
Slide 18: Strategy Update
STRATEGY UPDATE FRITZ JOUSSEN 18 TUI GROUP | 2018 FY Results | 13 December 2018
Slide 19: Market environment: TUI has moved on and developed into an integrated provider of Holiday Experiences
Market environment: TUI has moved on and developed into an integrated provider of Holiday Experiences OTAs “Best and unique product, “Depth of offering“ individualised offering“ • Agent model, trading margin • Dynamic packaging • No/ limited risk capacity • Own hotels, flights and cruises: • Increas
Slide 20: Our business model: Product-focused holiday provider with almost 70% Holiday Experience earnings
Our business model: Product-focused holiday provider with almost 70% Holiday Experience earnings Markets & Airlines – ~30% EBITA HOLIDAY EXPERIENCES – ~70% EBITA INTEGRATION BENEFITS Rest Own & Committed Digitalisation, efficiency, diversification 23m customers1 Growth, diversification 4m customers2
Slide 21: Future earnings growth driven by reinvestment, digitalisation and efficiency benefits
Future earnings growth driven by reinvestment of disposal proceeds, digitalisation and efficiency benefits STRONG GROWTH TRACK RECORD: FUTURE GROWTH: MERGER SYNERGIES INVESTMENTS, DIGITALISATION & EFFICIENCY HIGHLIGHTS • 3 earnings waves, heading towards ≥10%2 third wave +13%1 3rd wave: • Mix of ear
Slide 22: Our vision: Digitalisation and platforming of our business model
Our vision: Digitalisation and platforming of our business model MID-LONG TERM OUR DIGITAL PRIORITIES WHAT WILL IT BRING? BENEFITS • Too early to say >€100m 1 From Retail to Online to Mobile Cost Saving • However, base infrastructure in place and improving every day >€100m • First pilot projects sho
Slide 23: From Retail to Online to Mobile
1 From Retail to Online to Mobile RETAIL ONLINE/DIRECT MOBILE HIGHLIGHTS • Mobile booking technology developed • Linked to CRM engine 32 68 74 1 26 +9% 48 • 5.5m active TUI app users as -19% 38 addressable base +26% • ~200k app customers in FY18 FY14 FY18 FY14 FY18 FY17 FY18 • Every 1% app sale yiel
Slide 24: Digital mass-individualisation: Use customer data to create individualised holidays
Digital mass-individualisation: Use customer data to create individualised holidays for 2 21m1 Markets & Airlines customers MOBILE AS AN ENABLER DRIVE BOOKINGS & FOR INDIVIDUALISATION ANCILLARIES HIGHLIGHTS • TUI’s competitive advantage - own Individualised marketing: customer end to end i.e. double
Slide 25: Inventory/Purchasing digitalisation: commercialise purchasing of risk inventory
Inventory/Purchasing digitalisation: Opportunity to commercialise the purchasing of our 3 risk inventory of 100m bed nights and €5bn purchasing volume from 3rd party hoteliers CYRUS YIELD MANAGEMENT OUR VISION • Centralised & automated inventory management – applying same Bedswap pilot initiative: p
Slide 26: Digital global market presence: Low risk and opportunistic entry into new markets
Digital global market presence: Low risk and opportunistic entry into new markets and 4 reduction of yield pressure at the same time DIGITALISED GROWTH HIGHLIGHTS 21m customers (Northern Europe) • New Markets1: Own risk capacity and 3rd - ~100k customers out of 1m Own risk capacity party hotels and
Slide 27: Our ambition: Strong strategic positioning, earnings growth and cash generation
Our ambition: Strong strategic positioning, strong earnings growth and strong cash generation with underlying EBITA almost doubling in 6 years1 STRONG STRATEGIC POSITION €1.1bn STRONG €0.8bn EARNINGS GROWTH Underlying EBITA almost doubling in 6 years1 No equity raised but dividends paid STRONG CASH
Slide 28: Q&A
Q&A 28 TUI GROUP | 2018 FY Results | 13 December 2018
Slide 29: Appendix
APPENDIX 29 TUI GROUP | 2018 FY Results | 13 December 2018
Slide 30: FY18 Turnover by Segment
FY18 Turnover by Segment (excludes Intra-Group Turnover and JVs/associates)* In €m FY18 FY17 Change FX Change ex FX Hotels & Resorts 606.8 679.0 -72.2 -52.2 -20.0 - Riu 407.0 493.1 -86.1 -21.8 -64.3 - Robinson 89.3 82.6 6.7 -4.1 10.8 - Blue Diamond - - - - - - Other 110.5 103.3 7.2 -26.3 33.5 Cruise
Slide 31: FY18 Underlying EBITA by Segment
FY18 Underlying EBITA by Segment* In €m FY18 FY17 Change FX Change ex FX Hotels & Resorts 425.7 356.5 69.2 -68.8 138.0 - Riu 390.3 355.9 34.4 -10.8 45.2 - Robinson 41.8 38.5 3.3 -4.8 8.1 - Blue Diamond** 23.9 20.1 3.8 -3.8 7.6 - Other -30.3 -58.0 27.7 -49.4 77.1 Cruises 324.0 255.6 68.4 -0.6 69.0 -
Slide 32: Cash Flow & Movement in Net Cash
Cash Flow & Movement in Net Cash In €m FY18 FY17 OPERATING CASH FLOW EBITDA reported1 1,498.5 1,490.9 • Reduction due to timing of and higher hotel prepayments in Working capital 66.4 406.2 the period and deconsolidation of Travelopia versus FY17 Other cash effects 74.6 89.9 At equity income -297.7
Slide 33: Net Financial Position, Pensions and Operating Leases
Net Financial Position, Pensions and Operating Leases In €m 30 Sept 2018 30 Sep 2017 Financial liabilities -2,443 -1,933 - Finance leases -1,343 -1,227 - Senior Notes -297 -296 - Liabilities to banks -780 -381 FINANCIAL LIABILITIES • Higher versus prior year as a result of aircraft financing; - Othe
Slide 34: 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 Sarah Coomes, Head of Investor Relations Tel: +44 (0)1293 645 82