Tui Ag · XETR:TUI1
Tui — Investor Presentation (January 2021)
39 slides from Tui's investor presentation, January 2021
Slide 1: TUI Group Investor Presentation
TUI GROUP INVESTOR PRESENTATION January 2021
Slide 2: Disclaimer
DISCLAIMER NOT FOR DISTRIBUTION, RELEASE OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES This presentation may not be published, distributed or transmitted in the United States, Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa, Switzerland or the United
Slide 3: Agenda
Agenda 1 Key investment highlights Page 4 2 Business overview & recent trends Page 7 3 Third support package & proposed transaction Page 15 4 Appendix Page 22 3 TUI GROUP | Investor Presentation | January 2021
Slide 4: 1. Key Investment Highlights
1. KEY INVESTMENT HIGHLIGHTS TUI GROUP | Investor Presentation | January 2021
Slide 5: Introductory Comment from the Management
Introductory Comment from the Management “This proposed capital increase, part of a wider €1.8bn support package agreed with private investors, banks and the German government, is directed to enable the full redemption of the Senior Notes due in October 2021 and consequently ensures the extension of
Slide 6: Reasons to invest
Reasons to invest Fulfilment distinguishes TUI from 1 Holidays remain a high priority 4 competition - ability to take risks and shape markets Integrated business model with strong Leading, trusted brand with 2 5 customer base and distribution power differentiated products TUI is strategically well p
Slide 7: 2. Business Overview and Recent Trends
2. BUSINESS OVERVIEW AND RECENT TRENDS TUI GROUP | Investor Presentation | January 2021
Slide 8: TUI's unique and integrated business model continues to be the foundation of our success
TUI‘s unique and integrated business model continues to be the foundation of our success INTEGRATED BUSINESS MODEL MARKETS & AIRLINES HOLIDAY EXPERIENCES 21m customers 433 Hotels1 • Integrated business model with differentiated product 150 aircraft 17 Cruise ships2 offering along the whole value cha
Slide 9: COVID-19 crisis and the impact on TUI
COVID-19 crisis and the impact on TUI TUI INITIAL IMPACT BRIDGE RETURN 1 EXCEPTIONAL FY20 START 2 & LOCKDOWN ACTIONS 3 PARTIAL RESTART 4 TO GROWTH • Exceptional start to S20 trading – • Travel suspension from mid- • Integrated model - TUI first to • Restrictions limiting operations January was TUI’s
Slide 10: C-19 driving accelerated change: Global realignment programme cost reduction target increased to ~€400m p.a.
C-19 driving accelerated change: Global realignment programme cost reduction target increased to ~€400m p.a. PILLARS RECENT PROGRESS PHASING • TUI fly Germany: Implementing REDUCE COSTS restructuring plan to reduce number P&L view ~€400m p.a of aircraft & bases €303m • TUI Musement: Restructuring pr
Slide 11: World arrivals expected to show strong increase in 2021 & return to 2019 levels in 2022
World arrivals expected to show strong increase in 2021 & return to 2019 levels in 2022 ACTUAL DEVELOPMENT FORECAST2 Return to World arrivals both leisure and business travel (bn)1 FY19 levels 1.5 1.5 1.4 1.3 1.3 1.2 1.2 COVID-19 crisis 0.7 2015 2016 2017 2018 2019 2020e 2021e 2022e Leisure travel e
Slide 12: Strong sentiment for leisure travel suggests pent up demand and fast recovery
Strong sentiment for leisure travel suggests pent up demand and fast recovery BCG Consumer Sentiment Survey Travel and tourism related Most missed categories Age Household income per capita2 Recent BCG consumer sentiment Rank Gen Z and Gen X Baby boomers Highest quartile Lowest quartile survey1: mil
Slide 13: Customers are committing to travel despite volatility
Customers are committing to travel despite volatility – 3.3m1 new bookings since global travel bans were lifted RECENT BOOKING DEVELOPMENT2 OVERALL BOOKING DEVELOPMENT3 Current year Previous year 2.783 2.452 • WINTER 20/21: New bookings • Total bookings down 82% and ASP up 4% YoY, in line with 993 s
Slide 14: Summary: Drive transformation and expected return to profitable growth
Summary: Drive transformation and expected return to profitable growth FY20: STRONG START & C-19 FY21: TRANSITION FY22+: PROFITABLE GROWTH • Exceptional start to S20 trading • Bookings uplift and revenue recovery to • Trusted, leading brand with differentiated • Swift and disciplined liquidity corre
Slide 15: 3. Third Support Package & Proposed Transaction
3. THIRD SUPPORT PACKAGE & PROPOSED TRANSACTION TUI GROUP | Investor Presentation | January 2021
Slide 16: Protection from ongoing travel restrictions: new support package of €1.8bn
Protection from ongoing travel restrictions as bridge into return to growth – new support package of €1.8bn with shareholder, bank & government participation 1 WSF: HYBRID CAPITAL 2 KFW ADDITIONAL RCF • €420m Hybrid I • €200m RCF, secured; largely same terms as existing no maturity, but conversion r
Slide 17: Successful agreement of support package – swift and proactive liquidity management
Successful agreement of support package – TUI continues with swift and proactive liquidity management to bridge into 2021 recovery HOLISTIC 3RD SUPPORT CONCEPT SUMMARY – C-19 LIQUIDITY DEVELOPMENT • Commitment of the German government & Unifirm €m (Mordashov family) • Strong trust in return to profi
Slide 18: Equity Capital Increase: Summary Transaction Overview
Equity Capital Increase: Summary Transaction Overview ISSUER TUI AG OFFERING SIZE • Approx. 509m new ordinary shares at a subscription price of €1.07 each for total net proceeds of about €509m • Fully underwritten offering, by a combination of existing shareholder Unifirm and the Joint Global Coordi
Slide 19: Equity Capital Increase: Overview of transaction timeline
Equity Capital Increase: Overview of transaction timeline EXPECTED TRANSACTION TIMELINE AND KEY MILESTONES 30-Dec-2020 8-Jan-2021 22-Jan-2021 27-Jan-2021 Publication of prospectus Shares trade ex-rights and start of German subscription Announcement of final take-up German subscription period and rig
Slide 20: Ongoing priorities & next steps in the return to a healthy balance sheet
Ongoing priorities & next steps in the return to a healthy balance sheet MANAGE DRIVE OPTIMISE LIQUIDITY REVENUE & EARNINGS FINANCING • Execution of 3rd support package • Optimise capacity (less fixed • Focus on asset-right strategy • Manage working capital flow back capacity) • Manage C-19 debt and
Slide 21: TUI strongly positioned to be a key beneficiary beyond the crisis
TUI strongly positioned to be a key beneficiary beyond the crisis INTEGRATED BUSINESS MODEL WITH Markets & Airlines Holiday Experiences TOURISM SECTOR FUNDAMENTALS DIVERSIFED CUSTOMER BASE & REMAIN ATTRACTIVE & UNCHANGED DISTRIBUTION POWER 21m customers 433 Hotels1 150 aircraft 17 Cruise ships2 Own
Slide 22: 4. Appendix
4. APPENDIX TUI GROUP | Investor Presentation | January 2021
Slide 23: Q4/12M: EBIT loss reflects impact of C-19 restrictions, mitigated by fixed cost reductions
Q4/12M: EBIT loss reflects impact of C-19 restrictions, mitigated by fixed cost reductions Q4 REVENUE FY REVENUE • Pre C-19 crisis we had an exceptional start to FY20 – on track to deliver a strong FY20 result €1.2bn1 €7.9bn1 • Q4 Revenue of €1.2bn - TUI first operator to restart with >2m -84%1 -58%
Slide 24: FY20 underlying EBIT bridge
Strong start to first 5M, with FY loss triggered by unprecedented C-19 travel suspension, limited by immediate fixed cost reductions FY20 UNDERLYING EBIT IN €M1 97 144 893 990 -1,255 Impairments ~-€505m Net hedging 7M C-19 (March-Sept) -€3.4bn 9M: ~-€410m ineffectiveness 9M: ~-€1.3bn / Q4: : ~-€2.2b
Slide 25: Income Statement
Income Statement – acute H2 impact from C-19 travel restrictions, limited by immediate fixed cost reductions FY20 FY20 FY19 REVENUE IFRS 16 1 2 In €m IAS 17 adjusted €6.7bn generated in 9M period and €1.2bn generated during restart in Q4 Revenue 7,943.7 7,952.9 18,928.1 UNDERLYING EBITDA Underlying
Slide 26: Cash flow
Cash flow – mitigated by immediate cash cost reductions and strict working capital discipline FY20 FY20 FY19 REPORTED EBITDA In €m IFRS 16 IAS 17 1 adjusted 2 Loss driven predominantly by C-19 business standstill, related impairments and net EBITDA underlying -1,615.0 -2,242.6 1,359.5 hedging ineffe
Slide 27: Movement in Net Debt
Movement in Net Debt YoY FY20 C-19 Net Debt & Financing In €m FY20 FY20 FY19 IFRS 16 IAS 17 1 Net debt increase FY20 (€bn) Financing utilised (€bn) Opening net debt as at 1 October -910 -910 124 RCF 1.5 Rep EBITDA -2.0 FCF after Dividends -3,193 -3,631 -597 Asset Finance -569 -377 -337 KfW #1 1.8 Ot
Slide 28: Net Financial Position, Pensions and Operating Leases
Net Financial Position, Pensions and Operating Leases 12M YoY Q3 to Q4 In €m 30-Sep-20 30-Sep-19 YoY ∆ 30-Sep-20 30-Jun-20 QoQ ∆ Financial liabilities -7,669 2,682 -4,987 -7,669 -7,864 195 - Finance leases - -1,495 1,495 - - - - Lease liabilities under IFRS161 -3,400 - -3,400 -3,400 -3,645 245 - Sen
Slide 29: Liquidity outflow higher than initially expected due to stop/start & continuing restrictions
Liquidity outflow higher than initially expected due to stop/start & continuing restrictions MONTHLY NET CASH-OUTFLOW COMMENTS (INCL. NET COSTS1, WC & NET SPECIAL ITEMS) FY20 Q4 ~€-230m (restart) (thereof WC: €-140m – mostly refunds) • FY20 Q4 in line with expectations (incl. disposal proceeds from
Slide 30: Modelling assumptions
Modelling assumptions CAPACITY FOR FUTURE SEASONS1 OTHER FINANCIAL METRICS (IFRS16 BASIS) 20% Nov 20 – FY21e FY20A W20/21 (20% reduction since Pre- Mar 21 Close) Apr 21 – Adjustments ~-€180m to -€200m -€70m S21 80% (no change since Pre-Close) Oct 21 Net interest ~-€400m to -€450m -€276m expense -€40
Slide 31: FY20 Full Year Revenue by Segment
FY20 Full Year Revenue by Segment (excludes Intra-Group Revenue and JVs/associates)* FY19 Change vs IAS 17 In €m FY20 IFRS 16 FY20 IAS 171 Change vs IAS 17 IAS 17 FX adjusted ex FX Hotels & Resorts 402.4 402.4 660.0 -257.6 0.1 -257.7 - Riu 272.9 272.9 415.1 -142.2 -2.1 -140.1 - Robinson 57.2 57.2 10
Slide 32: FY20 Full Year Underlying EBITDA by Segment
FY20 Full Year Underlying EBITDA by Segment* FY19 Change vs IAS 17 In €m FY20 IFRS 16 FY20 IAS 171 Change vs IAS 17 IAS 17 FX adjusted ex FX Hotels & Resorts -58.0 -195.1 563.3 -758.3 -25.8 -732.5 - Riu 118.9 114.1 384.9 -270.8 1.7 -272.4 - Robinson -21.1 -32.5 80.9 -113.4 1.7 -115.1 - Blue Diamond*
Slide 33: FY20 Full Year Underlying EBIT by Segment
FY20 Full Year Underlying EBIT by Segment* FY19 Change vs IAS 17 In €m FY20 IFRS 16 FY20 IAS 171 Change vs IAS 17 IAS 17 FX adjusted ex FX Hotels & Resorts -395.2 -399.6 451.8 -851.4 -19.9 -831.5 - Riu 50.1 49.7 326.2 -276.5 3.0 -279.5 - Robinson -99.1 -102.7 54.7 -157.4 3.7 -161.1 - Blue Diamond**
Slide 34: Industry fundamentals from TUI's perspective
Industry fundamentals from TUI’s perspective MARKETS & AIRLINES HOTELS • Leisure travel will return to previous levels with • Short-term overcapacities expected packages remaining important • Strong hotel brands will benefit • Later booking profile expected for duration of crisis • Best-in-class sal
Slide 35: Markets & Airlines: Accelerating realignment programme to drive flexibility & digitalisation
Markets & Airlines: Accelerating realignment programme to drive flexibility & digitalisation EXISTING MARKETS TRANSFORMATION Traditional model 21m1 Driving competitiveness 6m • Cost improvements – Purchasing 7m – Airline efficiency – Mobile • Accelerating our transformation, reducing costs and drivi
Slide 36: Hotels & Cruises: Asset-right strategy, driving returns
Hotels & Cruises: Asset-right strategy, driving returns, benefitting from vertical integration • Sizeable leisure hotel portfolio with premium returns 433 Hotels1 17 Cruise ships2 Benefitting from vertical integration & distribution power Portfolio expansion through asset-right strategy ROIC – p
Slide 37: TUI Musement: Building scale in the "things to do" market
TUI Musement: Building scale in the “things to do” market & attracting customers to extend TUI’s ecosystem 3RD PARTY CUSTOMER • Strong strategic position EXISTING CUSTOMER BASE POTENTIAL • €150bn+ market in FY19 & expected to return to sustained growth post C-191 – Highly fragmented market (~350k su
Slide 38: Sustainability is at the heart of TUI
Sustainability is at the heart of TUI - focus on further driving our sustainable business transformation TUI GROUP SUSTAINABILITY STRATEGY TUI CREDENTIALS (FY 20) • TUI Group is represented in the sustainability indices FTSE4Good, We are mindful of the importance of travel and tourism for Ethibel Su
Slide 39: Contact
Contact ANALYST AND INVESTOR ENQUIRIES Mathias Kiep, Group Director Controlling, Investor Relations and Corporate Finance Tel: +44 (0) 1293 645 925 +49 (0) 511 566 1425 Nicola Gehrt, Director, Head of Group Investor Relations Tel: +49 (0) 511 566 1435 Contacts for Analysts and Investors in UK, Irela