Tui Ag · XETR:TUI1
Tui — Investor Presentation (March 2019)
47 slides from Tui's investor presentation, March 2019
Slide 1: TUI Group Investor Presentation
TUI Group Investor Presentation March 2019
Slide 2: What is TUI Group?
What is TUI Group? Hotel & Resorts, Cruises and Destination Experiences holiday experiences “product” provider with own distribution and fulfilment KEY HIGHLIGHTS HOLIDAY EXPERIENCES €426m Leading leisure hotel and club brands around 27m customers (1) EBITA the world; investments, operations, owners
Slide 3: Market environment: TUI 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 4: 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 5: What does it mean? Integrated model brings strong strategic benefits
What does it mean? Integrated model brings strong strategic benefits in the wider market context INTEGRATION BENEFITS / TUI STRATEGY WIDER MARKET CONTEXT Own customer end-to-end Enables us to personalise our customers’ holiday experiences, basis for targeted marketing Yielding our own risk capacity:
Slide 6: What do we offer to our investors – reasons to be invested
What do we offer to our investors – 3 reasons to be invested are intact • Global leading tourism group • Holiday product provider with own distribution STRONG • Own customer end to end: Markets & Airlines, Hotels, Cruises, Destination Experiences STRATEGIC • Individualisation and targeted marketing
Slide 7: Growth & Digitalisation Initiatives
GROWTH & DIGITALISATION INITIATIVES TUI GROUP | Investor Presentation | March 2019
Slide 8: 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 third wave • Mix of earnings growth changes +
Slide 9: Hotels & Resorts investments: 57 new hotels since merger, lower capital intensity
1 Hotels & Resorts investments: 57 new hotels since merger, lower capital intensity PORTFOLIO DIVERSIFICATION DERISKED GROWTH • Predominantly lower capital intensity Berlin Croatia Bulgaria • Ownership in 365 days Dublin destinations/ where scarcity of New York Greece Portugal Ibiza Italy Turkey ass
Slide 10: Cruise capacity growth financed through disposal proceeds and off-balance sheet JV
1 TUI’s cruise capacity growth financed through disposal proceeds re-investment programme and off-balance sheet (JV) OFF-BALANCE SHEET FINANCING AS BRAND / OWNERSHIP FLEET DEVELOPMENT PREFERRED OPTION Off-balance sheet: JV Current fleet: Exit FY22 • Funded by JV • No CAPEX requirements for TUI Deliv
Slide 11: Strategic expansion of Destination Experiences: Musement acquisition
1 Strategic expansion of our Destination Experiences business – Ticking all boxes: Musement acquisition complementary to recent HBG Destination Management acquisition DIGITALISATION MORE PRODUCTS MORE GUESTS MORE DESTINATIONS TUI DX STRATEGY • End-to-end digital process: • Differentiation of excursi
Slide 12: Strong cash generation allowing to invest, pay dividends and strengthen balance sheet
1 Strong cash generation allowing to invest, pay dividends and strengthen balance sheet BUSINESS MODEL STRENTGH CONTINUES TO DELIVER ROIC1 CAPITAL ALLOCATION FRAMEWORK HOTELS CRUISE 23% Growth investments JV growth 14% • ~50% JV cash flow 13% • Reinvesting disposal proceeds 12% 20% pay-out to TU
Slide 13: Efficiency measures for Markets & Airlines and entry into New Markets
2 Efficiency - specific measures for our Markets & Airlines business and entry into New Markets MARKETS & AIRLINES NEW MARKETS Business harmonisation Reduce distribution costs Activities & excursions upselling Markets & Airlines CEO TUI 2022 Northern Central Western +1m Customers +€1bn Sales • €150b
Slide 14: Our vision: Digitalisation and platforming of our business model
3 Our vision: Digitalisation and platforming of our business model OUR DIGITAL PRIORITIES 1 3 From Retail to Online to Mobile Inventory/Purchasing 2 Mass-individualisation 4 Global market presence 14 TUI GROUP | Investor Presentation | March 2019
Slide 15: From Retail to Online to Mobile
3 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 yi
Slide 16: Digital mass-individualisation for 21m Markets & Airlines customers
3 2 Digital mass-individualisation: Use customer data to create individualised holidays for 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. doub
Slide 17: Inventory/Purchasing digitalisation: Opportunity to commercialise purchasing of risk inventory
3 3 Inventory/Purchasing digitalisation: Opportunity to commercialise the purchasing of our 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:
Slide 18: Digital global market presence: Low risk entry into new markets
3 4Digital global market presence: Low risk and opportunistic entry into new markets and 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 19: Outlook & Guidance
OUTLOOK & GUIDANCE TUI GROUP | Investor Presentation | March 2019
Slide 20: Outlook – Headwinds in Markets & Airlines but still expect to repeat record FY18
Outlook – Headwinds in Markets & Airlines but still expect to repeat record FY181 HOLIDAY EXPERIENCES MARKETS & AIRLINES HOTELS & RESORTS - +27% LFL Q1 EARNINGS GROWTH • 34%2 of Summer 2019 programme booked to date • 28 new hotel openings in FY19 mostly in year-round destinations • Bookings are broa
Slide 21: Repeat of record FY18 with broadly stable earnings development
Repeat of record FY18 with broadly stable earnings development FY19 Guidance FY19e1 FY18 Turnover2 Around 3% growth €19,208m5 Underlying EBITA rebased3,5 Broadly stable €1,177m3,5 Adjustments ~€125m €87m Net capex & investments4 ~€1.0bn-€1.2bn €0.8bn Leverage ratio 3.0x to 2.25x 2.7x Growth in line
Slide 22: Appendix: FY19 Q1 Results
APPENDIX FY19 Q1 RESULTS 22 TUI GROUP | Investor Presentation | March 2019
Slide 23: TUI Group: Q1 Markets & Airlines weak, partly offset by Holiday Experiences growth
TUI Group: As flagged, Q1 Markets & Airlines was weak, partly offset by Holiday Experiences underlying growth FY19 Q1 UNDERLYING EBITA IN €M As previously flagged, adverse Q1 for -37 Markets & Airlines, impacted by 23 prolonged hot Summer, overcapacity in Spain, pressure on yields and weak GBP Conti
Slide 24: Holiday Experiences: Hotels & Resorts
Holiday Experiences: Hotels & Resorts Continued improvement in underlying earnings driven by Turkey and North Africa AVERAGE OCCUPANCY % AVERAGE REVENUE PER UNDERLYING EBITA (€M) 85 82 BED € FY19 Q1 FY18 Q12 % 75 76 64 65 65 63 Underlying EBITA 68.7 91.9 -25.2 Like-for-like Underlying EBITA 68.7 53.
Slide 25: Holiday Experiences: Cruises
Holiday Experiences: Cruises Earnings growth and positive outlook across all three brands UNDERLYING EBITA (€M) TUI CRUISES MARELLA CRUISES 149 1.4 149 FY19 Q1 FY18 Q1 % 1.3 129 137 99 100 101 102 Underlying EBITA 47.0 37.5 25.3 692 704 o/w fully consolidated 20.8 12.3 69.1 o/w equity result 26.2 25
Slide 26: Holiday Experiences: Destination Experiences
Holiday Experiences: Destination Experiences Growth from strategic acquisitions EXCURSIONS & ACTIVITES SOLD (M‘s) TURNOVER AND EARNINGS (€M) 1.3 FY19 Q1 FY18 Q11 % +86% 0.7 Total Turnover 226.3 83.2 +172.0 o/w Turnover 3rd Party 158.3 39.2 +303.8 2 Underlying EBITA -4.7 -3.5 -34.3 FY18 Q1 FY19 Q1 •
Slide 27: Markets & Airlines: Challenging backdrop for Q1
Markets & Airlines Challenging backdrop as flagged for Q1 ONLINE DISTRIBUTION % APP DISTRIBUTION %1 48 49 1.1 TURNOVER AND EARNINGS (€M) +63% FY19 Q1 FY18 Q13 % 0.7 Turnover 3,061.0 3,035.3 0.8 Underlying EBITA -178.1 -140.8 -26.5 FY18 Q1 FY19 Q1 FY18 Q1 FY19 Q1 BRIDGE UNDERLYING EBITA (€M) CUSTOMER
Slide 28: Income Statement
Income Statement Less significant quarter – winter losses as expected In €m FY19 Q1 FY18 Q11 Turnover 3,704.8 3,548.9 ADJUSTMENTS -36.7 Includes PPA of €8m and one-off payment relating to the conversion Underlying EBITA -83.6 of a UK pension plan. No change to full-year guidance of ~€125m Adjustment
Slide 29: Cash Flow & Movement in Net Debt
Cash Flow & Movement in Net Debt OPERATING CASH FLOW In €m FY19 Q1 FY18 Q1 • Higher seasonal operational outflow driven by growth in capacity in S18, particularly within Central Region EBITDA reported 11.9 43.6 Working capital -1,398.0 -1,175.2 NET CAPEX AND INVESTMENTS Other cash effects -78.8 -55.
Slide 30: 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 using retrospective method (no (means FY18 is now presented in accordance with IFRS 15) restate
Slide 31: FY19 Q1 Turnover by Segment
FY19 Q1 Turnover by Segment – restated for IFRS15 (excludes Intra-Group Turnover and JVs/associates)* In €m FY19 Q1 FY18 Q11 Change FX Change ex FX Hotels & Resorts 139.3 144.8 -5.5 -2.5 -3.0 - Riu 103.3 114.8 -11.5 - -11.5 - Robinson 19.6 18.6 1.0 -0.1 1.1 - Blue Diamond - - - - - - Other 16.4 11.4
Slide 32: FY19 Q1 Underlying EBITA by Segment
FY19 Q1 Underlying EBITA by Segment* In €m FY19 Q1 FY18 Q11 Change FX Change ex FX Hotels & Resorts 68.7 91.9 -23.2 0.5 -23.7 - Riu 74.0 115.3 -41.3 -0.2 -41.1 - Robinson -1.3 1.5 -2.8 0.4 -3.2 - Blue Diamond** -1.3 0.8 -2.1 - -2.1 - Other -2.7 -25.7 23.0 0.3 22.7 Cruises 47.0 37.5 9.5 -0.1 9.6 - TU
Slide 33: Net Financial Position, Pensions and Operating Leases
Net Financial Position, Pensions and Operating Leases In €m 31 Dec 2018 31 Dec 2017 Financial liabilities -2,762 -1,871 - Finance leases -1,365 -1,186 - Senior Notes -297 -296 FINANCIAL LIABILITIES - Liabilities to banks -1,078 -362 • Higher versus prior year as a result of Schuldschein & Commercial
Slide 34: FY18 Full Year Results
FY18 FULL YEAR RESULTS TUI GROUP | Investor Presentation | March 2019
Slide 35: 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 36: 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 37: 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 38: 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 39: 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 40: 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 41: Markets & Airlines
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 42: 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 43: 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 44: 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 45: 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 46: 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 47: 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