Tui Ag · XETR:TUI1
Tui — 9M FY2020 Earnings Presentation
41 slides from Tui's earnings presentation, Aug 13, 2020
Slide 1: COVID-19 Update & FY20 9M Results
COVID-19 UPDATE & FY20 9M RESULTS 13 AUGUST 2020
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: Agenda
Agenda I. C-19 Update 1. Operational achievements during restart & current priorities 2. Financial achievements during restart & current priorities 3. Global Realignment Programme underway II. FY20 9M Results III. Summary 3 TUI GROUP | FY20 9M Results | 13 August 2020
Slide 4: C-19 Update
C-19 UPDATE FRITZ JOUSSEN / BIRGIT CONIX TUI GROUP | FY20 9M Results | 13 August 2020
Slide 5: Opening statement
Opening statement ✓ Successful restart of operations in all source markets ✓ Partial restart of business has generated immediate working capital inflow ✓ Q3 results demonstrate the significant reduction of cash fixed costs ✓ Expect to be broadly cash break-even in Q4 2020 on an operational level ✓ S
Slide 6: Operational achievements during restart & current priorities
Operational achievements during restart & current priorities TUI GROUP | FY20 9M Results | 13 August 2020
Slide 7: TUI has been the first holiday company to restart operations quickly & responsibly
1 TUI has been the first holiday company to restart operations quickly & responsibly Pilot project Majorca √ RIU has reopened 59 hotels √ Blue cruises with Mein Schiff √ worldwide fleet – from 24 July • Successful pilot project together with Balearic authorities and suppliers • Returning to operatio
Slide 8: TUI's integrated model allows quick restart and the steering of customers into own assets
1 TUI’s integrated model allows quick restart and the steering of customers into own assets Test PMI1 CRO DESTINATIONS ES & CI3 PT GR EGY TR MAR TUN Planned from Oct FAO2 BU CYP onwards Planned from Oct SOURCE MARKETS onwards JUNE JULY AUGUST SEPTEMBER OCTOBER 61 2,300 159 4,200 181 4,500 220 OPERAT
Slide 9: Successful operations in July – the first month of restart
1 Successful operations in July – the first month of restart OPERATIONS IN JULY 2020 GROUP BOOKINGS JULY 2020 Cumulative PAX 563K NORTHERN REGION 28k PAX (risk & non-risk) Booked Load Factor 89% CENTRAL REGION 311k PAX RESTART IN ACTION WESTERN REGION 224k PAX HOTELS & RESORTS 159 Hotels opened CRUI
Slide 10: Health and safety protocols allow relaxing travels in times of pandemic
1 Health and safety protocols allow relaxing travels in times of pandemic RECAP OF PROTOCOLS AS SHARED AT H1 HIGHLIGHTS • Health and safety measures successfully implemented • New hygiene standards are as strict as necessary and as relaxing as possible • Positive customer feedback shows that holiday
Slide 11: 1.7m new bookings since global travel bans were lifted – Summer 21 looks promising
1 1.7m new bookings since global travel bans were lifted – Summer 21 looks promising RECENT BOOKING DEVELOPMENT1 OVERALL BOOKING DEVELOPMENT2 S20 W20 S21 • 57% of adjusted Summer 20 programme sold New bookings since 1,050k 195k 430k • 16% of our original Summer 20 programme sold; Overall June1 (prev
Slide 12: Financial achievements during restart & current priorities
Financial achievements during restart & current priorities TUI GROUP | FY20 9M Results | 13 August 2020
Slide 13: TUI reaches agreement with German Federal Government on additional financial headroom of €1.2bn
2 TUI reaches agreement with German Federal Government on additional financial headroom of €1.2bn • TUI Management reaches agreement of €1.2 billion to further strengthen TUI’s position in a volatile market environment and is now better positioned in case of any further long-term travel restrictions
Slide 14: Details of TUI's government stabilisation financing measures
2 Details of TUI’s government stabilisation financing measures 1st stabilisation measure 2nd stabilisation measures RCF – RCF – Convertible Bond Item Apr KfW tranche Aug KfW tranche subscribed by WSF³ Amount €1.8 billion €1.05 billion €150 million Oct 21 / Oct 21 / Min. six years from Maturity Date
Slide 15: Successful closing of Hapag-Lloyd transaction further enhances liquidity position
2 Successful closing of Hapag-Lloyd transaction further enhances liquidity position DISPOSAL OF HLC TO TUI CRUISES JV COMMENTS • Disposal at an attractive valuation Fully consolidated At equity consolidated • Cash in of ~€690m, of which ~€70m to be received over next two years • Deconsolidation of ~
Slide 16: Comprehensive compensation agreement with Boeing enhances liquidity
2 Comprehensive compensation agreement with Boeing enhances liquidity and allows flexible fleet planning for duration of crisis BOEING AGREEMENT FLEET CAPACITY PLANNING • Supports plans for fleet reduction • Compensation over next two years • Overall aircraft fleet is expected to support the anticip
Slide 17: Liquidity development in line with expectations
2 Liquidity development in line with expectations LIQUIDITY DEVELOPMENT SINCE LAST UPDATE COMMENTS Cash and available facilities on 10 May 2020 = €2.1bn • Customer refunds in line with expectations – Customer refunds & cash costs & other current voucher uptake rate of ~30% - 40% Positive cash inflow
Slide 18: Restart leads to significant reduction of monthly cash out
2 Restart leads to significant reduction of monthly cash out – strict liquidity management maintained STANDSTILL RESTART SCENARIO FY20 Q3 FY20 Q4 FY21 Q1 broadly cash muted cash out of Monthly cash costs & break-even1 on low single digit customer refunds €550m - €650m operational level; hundred m p.
Slide 19: Partial restart of business generates immediate working capital inflow
2 Partial restart of business generates immediate working capital inflow • c illustrative Group cash position - seasonal swing Normal 1 2 3 4 Restart Standstill Q1 Q2 Q3 Q4 Q1 Q2 Apr 20 Jun 20 Aug 20 Liquidity 1st stabilisation Boeing agreement 2nd stabilisation enhancing package & HLC disposal pack
Slide 20: Next priority will be rebuilding a robust financial profile
2 Next priority will be rebuilding a robust financial profile REBUILD A SOLID FINANCIAL PROFILE Pre C-19 Gross leverage 2.25x – 3.0x TUI entered into agreements target to cover seasonal swing through Winter 2020/21 and thereafter. The Group will now evaluate options to FY 2020 & 2021 Guidance withdr
Slide 21: Global Realignment Programme underway
Global Realignment Programme underway TUI GROUP | FY20 9M Results | 13 August 2020
Slide 22: Global realignment programme drives TUI's strategic initiatives
3 Global realignment programme drives TUI’s strategic initiatives REDUCE COSTS REDUCE CAPITAL INTENSITY DRIVE DIGITALISATION • Accelerate Transformation project • Asset-right strategy in Hotels & Cruises • Increase accommodation only, seat • Merge tasks and organizations across the • Reduction of in
Slide 23: Overall cost reduction target is envisaged to be over €300m p.a.
3 Overall cost reduction target is envisaged to be over €300m p.a. PHASING OF GLOBAL REALIGNMENT PROGRAMME COMMENTS P&L view Cumulative benefits SDI >€300m • Majority of restructuring costs already in current financial year 240 • Main benefits to be delivered in FY21 & FY22 • Cash out primarily in F
Slide 24: Global realignment programme: Main projects already underway
3 Global realignment programme: Main projects already underway • Start of negotiations with work councils & trade unions regarding restructuring Transformation plan presented GERMANY • Reduction in number of aircraft by around 50% from 39 & in negotiations • Reduce number of bases to five as well as
Slide 25: FY20 9M Results
FY20 9M RESULTS FRITZ JOUSSEN / BIRGIT CONIX TUI GROUP | FY20 9M Results | 13 August 2020
Slide 26: Q3/9M: Group EBIT loss mitigated by immediate fixed cost reduction
Q3/9M: Group EBIT loss mitigated by immediate fixed cost reduction in response to C-19 impact 9M YTD TURNOVER • Cash fixed costs reduced by >70% from April as Q3 TURNOVER €6.7bn1 anticipated €75m1 -98%1 -42%1 • 9M underlying EBIT driven by: o Suspended or reduced operations since March mitigated by
Slide 27: FY20 9M underlying EBIT bridge
Strong start to first 5M, with loss triggered by unprecedented C-19 travel suspension, limited by immediate fixed cost reductions FY20 9M UNDERLYING EBIT IN €M1 -199 -102 97 4M C-19 (March-June) Impairments ~€410m Variances: -€1.3bn -1,255 • Triggered under IAS 36 Net hedging • C-19 Lost contributio
Slide 28: 9M Income Statement
9M Income Statement – Underlying EBIT loss limited by immediate cost reductions in response to C-19 FY20 9M FY20 9M FY19 9M IAS 17 1 In €m IFRS 16 IAS 17 ∆ YOY Turnover 6,710.4 6,717.4 11,421.4 -4,704.0 Underlying EBITDA -921.4 -1,345.7 142.2 -1,487.9 Depreciation & Amortisation -1,033.5 -626.9 -341
Slide 29: 9M Cash flow
9M Cash flow – cash burn limited by immediate cash fixed cost mitigations and strict working capital discipline FY20 9M FY20 9M FY19 9M IAS 17 In €m IFRS 16 IAS 17 1 ∆ YOY EBITDA underlying -921.4 -1,345.7 142.2 -1,487.9 Adjustments -89.0 -89.0 -37.0 -52.0 Working capital -1,098.8 -1,122.0 807.5 -1,
Slide 30: 9M Movement in Net Debt
9M Movement in Net Debt – seasonal swing driven by C-19, partly reduced by Hapag-Lloyd reclassification to disposal group Net debt bridge 9M YoY Net debt bridge H1 to Q3 In €m FY20 9M FY20 9M FY19 9M YoY ∆ FY20 9M FY20 H1 QoQ ∆ 1 1 1 IFRS 16 IAS 17 IAS 17 IAS 17 IAS 17 IAS 17 Opening net debt as at
Slide 31: FY20 guidance withdrawn
FY20 guidance withdrawn reflecting unknown period of worldwide travel suspension as a result of C-19 “… the Executive Board has decided today to withdraw the Financial Year 2020 guidance as communicated on 11 February 2020. Furthermore the Executive Board also refrains from issuing a new guidance fo
Slide 32: Summary
SUMMARY FRITZ JOUSSEN TUI GROUP | FY20 9M Results | 13 August 2020
Slide 33: Recap: TUI's integrated unique business model
Recap: TUI‘s integrated unique business model is the foundation of our success INTEGRATED BUSINESS MODEL Markets & Airlines Holiday Experiences 21m customers 411 Hotels1 • Integrated business model with unique product 150 aircraft 18 Cruise ships2 offering along the whole value chain Own & 3rd party
Slide 34: Summary: Successful restart driving transition and return to normalised levels in FY22
Summary: Successful restart driving transition and return to normalised levels in FY22 FY20: RESTART FY21: TRANSITION FY22+: BACK TO NORMAL • Successful and responsible restart • Further ramp up of bookings expected • TUI benefitting from recovery based on • Uptake in bookings since travel bans lift
Slide 35: Appendix
APPENDIX TUI GROUP | FY20 9M Results | 13 August 2020
Slide 36: FY20 9M Turnover by Segment
FY20 9M Turnover by Segment (excludes Intra-Group Turnover and JVs/associates)* Change vs IAS 17 In €m FY20 9M IFRS 16 FY20 9M IAS 171 FY19 9M Change vs IAS 17 IAS 17 FX ex FX Hotels & Resorts 304.7 304.7 425.5 -120.9 2.3 -123.2 - Riu 231.3 231.3 294.5 -63.2 1.1 -64.3 - Robinson 36.7 36.7 67.4 -30.7
Slide 37: FY20 9M Underlying EBIT by Segment
FY20 9M Underlying EBIT by Segment* Change vs IAS 17 In €m FY20 9M IFRS 16 FY20 9M IAS 171 FY19 9M Change vs IAS 17 IAS 17 FX ex FX Hotels & Resorts -296.0 -293.4 227.3 -520.7 -24.8 -495.9 - Riu 66.9 66.5 223.0 -156.5 3.6 -160.1 - Robinson -34.7 -34.8 6.2 -41.1 1.5 -42.6 - Blue Diamond** -16.3 -16.3
Slide 38: FY20 Q3 Turnover by Segment
FY20 Q3 Turnover by Segment (excludes Intra-Group Turnover and JVs/associates)* Change vs IAS 17 In €m FY20 Q3 IFRS 16 FY20 Q3 IAS 171 FY19 Q3 Change vs IAS 17 IAS 17 FX ex FX Hotels & Resorts 4.5 4.5 154.5 -150.0 -0.1 -150.0 - Riu 2.9 2.9 93.8 -90.9 -0.1 -90.9 - Robinson 0.5 0.5 24.8 -24.4 0.0 -24.
Slide 39: FY20 Q3 Underlying EBIT by Segment
FY20 Q3 Underlying EBIT by Segment* Change vs IAS 17 In €m FY20 Q3 IFRS 16 FY20 Q3 IAS 171 FY19 Q3 Change vs IAS 17 IAS 17 FX ex FX Hotels & Resorts -320.0 -335.5 92.8 -428.3 -7.9 -420.4 - Riu -62.7 -62.3 73.4 -135.7 2.0 -137.7 - Robinson -27.7 -27.5 6.5 -34.0 0.6 -34.6 - Blue Diamond** -16.1 -16.1
Slide 40: Net Financial Position, Pensions and Operating Leases
Net Financial Position, Pensions and Operating Leases 9M YoY bridge H1 to Q3 bridge FINANCIAL LIABILITIES In €m 30-Jun-20 30-Jun-19 YoY ∆ 30-Jun-2031-Mar-20 QoQ ∆ • ~€2.2bn higher lease Financial liabilities -7,864 -2,637 -5,227 -7,864 -5,937 -1,927 liabilities versus prior - Finance leases - -1,487
Slide 41: Contact
Contact ANALYST AND INVESTOR ENQUIRIES Mathias Kiep, Group Director 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, Ireland and Americ