Tui Ag · XETR:TUI1
Tui — FY2022 Earnings Presentation
62 slides from Tui's earnings presentation, Dec 14, 2022
Slide 1: FY22 Q4/12M Results & Strategy Update
FY22 Q4/12M RESULTS & STRATEGY UPDATE 14 December 2022
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 1 FY22 Q4 Highlights– Sebastian Ebel 2 FY22 Q4/12M Results – Mathias Kiep 3 Expectations 2023 - Trading & Modelling Assumptions – Sebastian Ebel & Mathias Kiep 4 Strategy Update – Sebastian Ebel 5 TUI Musement Special – Peter Ulwahn 6 Summary and Q&A – Sebastian Ebel, Mathias Kiep & Peter Ulw
Slide 4: TUI Ad-hoc 13.12.2022: TUI and WSF agree return of Corona state aid
TUI Ad-hoc 13.12.2022: TUI and WSF agree return of Corona state aid TUI Group CEO Sebastian Ebel Ad-hoc published on 13.12.2022 • Agreement with WSF for “Our goal has always been clear: reduce net debt and interest burden repayment of Silent Participation I and strengthen our balance sheet. Now is t
Slide 5: Strong performance in Q4 with Und. EBIT above €1bn
Strong performance in Q4 with Und. EBIT above €1bn - all segments with positive profit contribution • Following limited Winter trading due to Covid, a restart of operations in Q3, we saw Q4 delivering a strong performance in a more normalised trading environment • Summer 22 closed out strongly with
Slide 6: All segments & regions delivering positive contribution
All segments & regions delivering positive contribution – Hotels & Resorts back at FY19 levels for the second quarter in a row HOLIDAY EXPERIENCES MARKETS & AIRLINES €433m (+€368m YoY) €612m (+€750m YoY) FY22 Q4 FY21 Q4 FY22 Q4 FY21 Q4 291 344 Q4 YoY Q4 YoY Und. EBIT €m Und. EBIT €m HOTELS & 116 Ava
Slide 7: Strong progress made across all of TUI's digital platforms
Strong progress made across all of TUI’s digital platforms % ONLINE BOOKINGS FY22 ENHANCED USAGE & CUSTOMER EXPERIENCE 69% 73% +6% pts vs FY19 of package customers download and use the app (+28% pts vs. FY19) 54% 29% package bookings loaded in-app +6% pts vs FY19 +6% pts vs FY19 8.1 CSAT1 % APP BOOK
Slide 8: FY22 performance: Strong close to the year with Covid restrictions lifted
FY22 performance: Strong close to the year with Covid restrictions lifted FY22 YoY REVENUE GROUP €16.5bn +€11.8bn UND. EBIT €2.5bn improvement leading to positive Und. EBIT after two years HOLIDAY EXPERIENCES €505m +€1.0bn Achieving target to be “significantly positive” MARKETS & -€45m +€1.4bn
Slide 9: Agenda
AGENDA 1 FY22 Q4 Highlights– Sebastian Ebel 2 FY22 Q4/12M Results – Mathias Kiep 3 Expectations 2023 - Trading & Modelling Assumptions – Sebastian Ebel & Mathias Kiep 4 Strategy Update – Sebastian Ebel 5 TUI Musement Special – Peter Ulwahn 6 Summary and Q&A – Sebastian Ebel, Mathias Kiep & Peter Ulw
Slide 10: Achievements 2022 - good progress in deleveraging the Group
Achievements 2022 - TUI has made good progress in deleveraging the Group 2022 2023 FY22 / Q4 Net Debt of Gross leverage1 Agreement Highlights €3.4bn improved to 4.7x with WSF for Significant improvement repayment of SP I & FY22 Pro-forma2 Gross Warrant Bond by €1.5bn €16.5bn Revenue Leverage already
Slide 11: Income Statement
Income Statement Und. EBIT Q4 above €1bn supports significantly positive full year REVENUE • Full Year revenue at €16.5bn following return to more normalised environment in H2, In €m (IFRS 16) FY22 Q4 FY21 Q4 FY22 12M FY21 12M with 16.7m Markets & Airlines passengers departing, up 212% on FY21 Reven
Slide 12: 12M result – Significantly improved result YoY
12M result – Significantly improved result YoY due to a return to more normalised pre-pandemic environment in H2 FY21 vs. FY22 UNDERLYING EBIT IN €M 19 -133 542 409 Holiday Experiences: +€1,040m 1,559 • Hotels & Resorts 37.8m avail. bednights, up 10.7m YoY (+39%) and occupancy 76%, up 23%pts. • Crui
Slide 13: FY22 Free Cash flow of €1.3bn driven by positive EBITDA and WC inflow
FY22 Free Cash flow of €1.3bn driven by positive EBITDA and WC inflow WORKING CAPITAL In €m (IFRS 16) FY22 Q4 FY21 Q4 FY22 12M FY21 12M • Q4 outflow is in line with seasonal development, PY not comparable due to pandemic Underlying EBITDA 1,232 160 1,225 -1,145 • Full year inflow of c. €1.1bn driven
Slide 14: Net debt improvement by €1.5bn to €3.4bn
Net debt improvement by €1.5bn to €3.4bn FY21 YE to FY22 YE In €m FY22 YE FY21 YE In €m FY22 YE FY21 YE YoY ∆ YoY ∆ IFRS 16 IFRS 16 IFRS 16 IFRS 16 Financial liabilities -5,259 -6,550 1,291 Opening net debt as at 1 October -4,954 -6,421 1,467 FCF after Dividends 1,325 143 1,182 - Lease liabilities u
Slide 15: CFO priorities – ongoing capital structure development
CFO priorities – ongoing capital structure development Support Profitable Growth Cash Flow Focused Strengthen Balance Sheet • Support further • Strict cost discipline • Continue reduction of debt transformation • Focus on WC, capex & cash and German government • Implement ESG initiatives from operat
Slide 16: TUI Ad-hoc 13.12.2022 - Positioning TUI for the future
TUI Ad-hoc 13.12.2022 - Positioning TUI for the future… • Repay c. €479m of Silent Participation I & Warrant Bond alongside substantial redemption of KfW RCF Key objectives • No WSF conversion into TUI shares until 31/12/2023 • Repayment price of €730m1 as per signing date of Agreement, • Reduce rel
Slide 17: Seeking shareholder approval to return further government funding
… by seeking shareholder approval to return further government funding… • AGM invitation to be published on 5th January 2023 AGM details • AGM to be held on 14th February 2023 (virtually) • Shareholder approval requested for capital reduction/share consolidation (Ratio 10:1) to improve access to cap
Slide 18: Using existing authorisations to execute WSF Agreement
… using existing authorisations to execute WSF Agreement: repayment WSF & substantial redemption of KfW RCF… Current Total KfW RCF: €2.1bn government Total WSF (nominal): €479m1 (not drawn 30/9/22) funding Authorised Capital Authorised Capital Authorisations 2022/I 2022/II No. of shares Up to 162m U
Slide 19: To emerge stronger in an attractive, long-term growth sector
… to emerge stronger in an attractive, long-term growth sector Capital increase is expected to Strengthen balance sheet • Reduce leverage to well below 3x • Lower cost of capital • Accelerate path to an improved credit rating • Continue to simplify capital structure Allow the business to drive g
Slide 20: Agenda
AGENDA 1 FY22 Q4 Highlights– Sebastian Ebel 2 FY22 Q4/12M Results – Mathias Kiep 3 Expectations 2023 - Trading & Modelling Assumptions – Sebastian Ebel & Mathias Kiep 4 Strategy Update – Sebastian Ebel 5 TUI Musement Special – Peter Ulwahn 6 Summary and Q&A – Sebastian Ebel, Mathias Kiep & Peter Ulw
Slide 21: TUI exits the pandemic well positioned for FY23 and beyond
TUI exits the pandemic well positioned for FY23 and beyond – Higher flexibility with a lower risk & cost base TRUSTED BRAND RIGHT SIZED AIRLINE Own-flight capacity reduced by 17 aircraft Valued by customers to a fleet of 133 aircraft1 TUI CUSTOMER OFFER REDUCED HOTEL More quality, more flexibility,
Slide 22: Short-term bookings continue into Winter
Short-term bookings continue into Winter – cumulative booked position improved by +6%pts, now being 84% W22/23 Cumulative Net bookings as % of W18/19 2.8m bookings, +1.5m added since trading update Versus 18/19 W22/23 L4W 96% BOOKINGS1 -16% -4% +6%pts 90% Positive momentum building, ASP +28% > cumul
Slide 23: FY23 H1 Trading: Positive momentum continues
FY23 H1 Trading: Positive momentum continues with all segments clearly ahead of prior year HOLIDAY EXPERIENCES Versus 2022 23 H11 Trading Environment HOTELS & • Avail. Bed Nights slightly lower due to hotel renovations Avail. Bed Nights -2% • Booked occupancy of 57% vs. prior year of 48% RESORTS • B
Slide 24: FY23 Modelling Assumptions
FY23 Modelling Assumptions per 14 December 2022 FY23e1 FY22 Revenue2 Expect further strong increase in Revenue €16,545m Underlying EBIT2 Expect Und. EBIT to increase significantly €409m Adjustments -€60m to -€80m -€89m (incl. PPA)3 Net interest4 -€410m to -€430m -€466m Net investments5 -€450m to -€5
Slide 25: Agenda
AGENDA 1 FY22 Q4 Highlights– Sebastian Ebel 2 FY22 Q4/12M Results – Mathias Kiep 3 Expectations 2023 - Trading & Modelling Assumptions – Sebastian Ebel & Mathias Kiep 4 Strategy Update – Sebastian Ebel 5 TUI Musement Special – Peter Ulwahn 6 Summary and Q&A – Sebastian Ebel, Mathias Kiep & Peter Ulw
Slide 26: Tourism remains a growth sector - fundamentals remain attractive
Tourism remains a growth sector - fundamentals remain attractive TRAVEL IS A MEGA TREND Favourable demographic Experiences Tourism growth above GDP – supported by high disposable The new lifestyle & global a multi-year growth industry income and longevity trend in travel 26
Slide 27: CEO priorities
CEO priorities Grow New New products market share customers Strong focus on quality Sustainability as opportunity Winning team 27
Slide 28: Grow market share – Broadening the TUI funnel
Grow market share – Broadening the TUI funnel Attracting existing & new customers with new products… Customers New customers New customers 21m1 Tour operator - 13 regions Distribution On- / Offline / App CROSS- & UPSELLING 133 aircraft2 Tours & Activities 418 hotels2 More More differentiated differe
Slide 29: Growth opportunities in Markets & Airlines
Grow market share – Growth opportunities in Markets & Airlines Markets & Airlines Market Split Est.TUI Future Market Our opportunities By Product1 Share Today2 Growth Grow market share in our traditional Wholesale package market – be more agile & more competitive Acco-only ~35% 1-5% Leverage the
Slide 30: Growth opportunities in Holiday Experiences
Grow market share – Growth opportunities in Holiday Experiences Holiday Experiences Market Split by TUI Our opportunities Future Market Product1 Participation Growth2 Developing our strong hotels & cruise brands Strong differentiated Grow through new differentiated products leisure hotel brands
Slide 31: New products: TUI's Heartland products & future growth
New products TUI’s Heartland products & future growth to attract new customers SUN & BEACH… …WEEKEND TRIPS … Wholesale package …DYNAMIC PACKAGING… Accommodation- & Flight-only …EXPERIENCES & … HOTELS & CRUISES… … TOURS TICKETS… TUI Heartland products TUI Future growth 31
Slide 32: New customers – extending TUI's appeal to untapped segments
New customers – extending TUI’s appeal in existing & untapped customer segments with new products • TUI has a strong market share in the TUI Heartland TUI Future traditional Heartland segments • The traditional Heartland products Smart tanners form a smaller proportion of the total Deal-driven, leis
Slide 33: Bring more customers into TUI's central customer ecosystem
Bring more customers into TUI’s central customer ecosystem Leverage TUI brand Wholesale Package Hotels App-centric Holiday Experiences Markets & Airlines Dynamic Package CRM TUI Musement Customer Accomm. One customer account, Only/Tours loyalty programme Cruise (+ further initiatives) Flight Only 33
Slide 34: CEO priorities
CEO priorities Grow New New products market share customers Strong focus on quality Sustainability as opportunity Winning team 34
Slide 35: Strong focus on quality - Customer happiness is at our core
Strong focus on quality - Customer happiness is at our core Our ambition is to improve NPS 461 & CSAT 8.42 further TUI’s continuous improvement cycle Live Happy - Delivering on our customer promise Monitor implemented Measured through Measured throughNPS NPS actions to deliver a seamless journey Mak
Slide 36: Sustainability as opportunity
Sustainability as opportunity - Our ambition is to be industry-leading in achieving net-zero & we aim for this well before 2050 People Planet Progress • Boost positive impacts of our industry • Commitment to achieve net-zero emissions • Enabling 20m customers/year to make • Empower a generation of s
Slide 37: Winning team: Let's TUI it
Winning team: Let’s TUI it – let’s do it the TUI way! Talent acquisition & talent Upskilling programmes & attraction irresistible employer brand Diversity, equity, inclusion Global all-inclusive culture strategy & wellbeing initiatives Strong focus on execution, Leadership entrepreneurship & employe
Slide 38: CEO Priorities - Summary
CEO Priorities - Summary “We’re playing to win.” Sebastian Ebel Grow Market Share: We will drive profitable growth by doing things better and by building on our strengths. New Products: By growing our product range – Acco-Only, Flight-Only, Tours, Dynamic Packaging, Cars, Ancillaries – and incre
Slide 39: Agenda
AGENDA 1 FY22 Q4 Highlights– Sebastian Ebel 2 FY22 Q4/12M Results – Mathias Kiep 3 Expectations 2023 - Trading & Modelling Assumptions – Sebastian Ebel & Mathias Kiep 4 Strategy Update – Sebastian Ebel 5 TUI Musement Special – Peter Ulwahn 6 Summary and Q&A – Sebastian Ebel, Mathias Kiep & Peter Ulw
Slide 40: Peter Ulwahn, CEO TUI Musement
Peter Ulwahn, CEO TUI Musement 2022 – CEO TUI Musement and member of TUI Group Executive Committee 2020 – Chief Digital Officer 2015 – TUI Musement Executive Leadership Team 2015 – Regional Director Long Haul, Miami 2014 – Product Director and Board Member Fritidsresor, Sweden (today TUI Nordic) 199
Slide 41: In a nutshell
In a nutshell TUI Musement is a leading provider of experiences, transfers, and tours across the world Tours & Activities market is growing & still Excursions, Great things to do in Experiences Sold* activities, attraction unconsolidated, representing the next big opportunity in travel >120 countrie
Slide 42: Tours & Activities market
Tours & Activities market Fastest growing market in travel fueled by digitalisation Large & growing market1 Next big opportunity in travel Experiences - Unique characteristics $ bn Booked online % CAGR 2 Fragmented supply Unstandardized sector where 329 intermediation plays a critical role 306 288 2
Slide 43: A unique business model
A unique business model End-2-end model enabled by state-of-the-art digital platforms Experiences Transfers Tours1 Products Excursions Activities Tickets Shorex2 Sourcing Production Digital Platforms Distribution TUI B2C B2B Demand Service delivery by local teams Delivery 43 1 Multi-Day Tours | 2 Sh
Slide 44: Video: Cross-selling experiences through the TUI App
Video: Cross-selling experiences through the TUI App 44
Slide 45: Competitive landscape – key competitors
Competitive landscape – key competitors Unique positioning in all 3 categories Experiences Transfers Tours Selected competitors Value Proposition + + Differentiated E2E1 production & distribution E2E1 production & distribution Transfers platform with global offering platform for a wide range of high
Slide 46: TUI MM product categories
TUI MM product categories Driving digitalisation in our 3 complementary product categories Cross-selling between 3 categories Experiences Transfers Tours Extensive portfolio of the most relevant Pre-defined & custom-made multi-day Shared and private transfers between airports, excursions, activities
Slide 47: Strong and diversified distribution
Strong and diversified distribution Leveraging TUI’s scale and acquiring new customers 1 2 3 TUI B2C B2B Cross/Up-sell products to other TUI Experiences, transfers and tours for Custom digital platforms and division customers: Markets, any and all travellers around the service solutions for leading
Slide 48: Bamboo Rafting & Tastes of Jamaica; Herbs & Honeybees
BAMBOO RAFTING & HERBS & HONEYBEES THE SEC I NR EI B T SI ZO AF TASTES OF JAMAICA RESTORATION - MNAC • Embedded in Montjuic, discover the • Experience an atmospheric National Palace built for the bamboo raft ride down the International Exhibition in 1929, Martha Brae River currently hosting the MNAC
Slide 49: Summary & Highlights
Summary & Highlights TUI Musement has a unique position in a high growth market, developing at c.7%1 p.a. within the travel industry Profitable player positioned for growth combining a digital platform model with in-destination delivery Differentiated value propositions within 3 distinct product cat
Slide 50: Agenda
AGENDA 1 FY22 Q4 Highlights– Sebastian Ebel 2 FY22 Q4/12M Results – Mathias Kiep 3 Expectations 2023 - Trading & Modelling Assumptions – Sebastian Ebel & Mathias Kiep 4 Strategy Update – Sebastian Ebel 5 TUI Musement Special – Peter Ulwahn 6 Summary and Q&A – Sebastian Ebel, Mathias Kiep & Peter Ulw
Slide 51: Clear mid-term strategy to capture future market growth potential
Clear mid-term strategy to capture future market growth potential Accelerate profitable growth OUR FY23 ASSUMPTIONS With new customer segments & more product sales Revenue1 expected to further increase strongly Improve profitability Und. EBIT1 expected to increase significantly and margin OUR 20
Slide 52: Appendix
APPENDIX
Slide 53: Global Realignment Programme ~€400m p.a. cost reduction
Global Realignment Programme ~€400m p.a. cost reduction target fully implemented PILLARS RECENT PROGRESS PHASING REDUCE P&L view COSTS • Programme now successfully implemented with 7k ~€400m p.a / 100% FTE roles reduced €320m/ 80% €303m • Majority of savings sit in Markets & Airlines and €240m / 60%
Slide 54: Movement in Net Debt
Movement in Net Debt FY22 9M to FY22 YE In €m FY22 YE FY22 9M In €m FY22 YE FY22 9M IFRS 16 IFRS 16 QoQ ∆ IFRS 16 IFRS 16 QoQ ∆ Opening net debt as at 1 October -4,954 -4,954 0 Financial liabilities -5,259 -5,013 -246 FCF after Dividends 1,325 1,332 -7 - Lease liabilities under IFRS16 -3,208 -3,231
Slide 55: Financing facilities and support packages overview
Financing facilities and support packages overview per 30 Sep 2022 Support Facility Instrument Utilisation €m Debt/equity Maturity date package # €m - 1,4541 562m drawn Debt RCF Bank - 1901 guarantee line - July 2024 (unsecured) facilities 1&2 2,100 Fully undrawn Debt Schuldschein - 425 - Debt July
Slide 56: FY22 Q4 Revenue by Segment
FY22 Q4 Revenue by Segment (excludes Intra-Group Revenue and JVs/associates)1 FY22 Q4 FY21 Q4 In €m Change incl FX FX Change ex FX IFRS 16 IFRS 16 Hotels & Resorts 167,3 282,5 -115,2 13,3 -128,5 - Riu 73,0 178,0 -105,0 14,0 -119,0 - Robinson 35,7 38,8 -3,1 -1,1 -2,0 - Blue Diamond2 - - - - - - Other
Slide 57: FY22 Q4 Underlying EBITDA by Segment
FY22 Q4 Underlying EBITDA by Segment1 FY22 Q4 FY21 Q4 In €m Change incl FX FX Change ex FX IFRS 16 IFRS 16 Hotels & Resorts 328,4 169,0 159,4 7,6 151,8 - Riu 142,8 64,1 78,6 6,0 72,7 - Robinson 60,8 42,6 18,2 -0,1 18,3 - Blue Diamond 11,5 1,2 10,3 1,6 8,6 - Other 113,4 61,1 52,3 0,1 52,2 Cruises 105
Slide 58: FY22 Q4 Underlying EBIT by Segment
FY22 Q4 Underlying EBIT by Segment1 FY22 Q4 FY21 Q4 In €m Change incl FX FX Change ex FX IFRS 16 IFRS 16 Hotels & Resorts 290,9 115,9 175,0 8,2 166,8 - Riu 120,5 39,2 81,3 4,6 76,6 - Robinson 57,5 36,0 21,5 1,6 19,9 - Blue Diamond 11,5 1,2 10,3 1,6 8,6 - Other 101,5 39,6 61,9 0,3 61,6 Cruises 103,1
Slide 59: FY22 Revenue by Segment
FY22 Revenue by Segment (excludes Intra-Group Revenue and JVs/associates)1 FY22 FY21 In €m Change incl FX FX Change ex FX IFRS 16 IFRS 16 Hotels & Resorts 806,2 440,5 365,7 30,1 335,5 - Riu 587,0 286,3 300,7 28,4 272,3 - Robinson 111,8 67,4 44,5 1,0 43,5 - Blue Diamond2 - - - - - - Other 107,4 86,9
Slide 60: FY22 Underlying EBITDA by Segment
FY22 Underlying EBITDA by Segment1 FY22 FY21 In €m Change incl FX FX Change ex FX IFRS 16 IFRS 16 Hotels & Resorts 651,3 63,1 588,1 17,3 570,8 - Riu 395,2 52,4 342,8 11,9 330,9 - Robinson 84,5 29,0 55,4 0,3 55,2 - Blue Diamond 49,8 -32,6 82,4 4,9 77,5 - Other 121,8 14,2 107,6 0,3 107,3 Cruises 55,4
Slide 61: FY22 Underlying EBIT by Segment
FY22 Underlying EBIT by Segment1 FY22 FY21 In €m Change incl FX FX Change ex FX IFRS 16 IFRS 16 Hotels & Resorts 480,6 -152,7 633,3 16,2 617,1 - Riu 304,1 -42,5 346,6 9,3 337,3 - Robinson 54,0 -6,2 60,1 1,8 58,4 - Blue Diamond 49,8 -32,6 82,4 4,9 77,5 - Other 72,8 -71,4 144,2 0,3 144,0 Cruises 0,8 -
Slide 62: Analyst and Investor Enquiries
ANALYST AND INVESTOR ENQUIRIES Nicola Gehrt, Group Director Investor Relations Tel: +49 (0)511 566 1435 Adrian Bell, Senior Investor Relations Manager Tel: +49 (0)511 566 2332 James Trimble, Investor Relations Manager Tel: +44 (0)1582 315 293 Stefan Keese, Investor Relations Manager Tel: +49 (0)511