Tui Ag · XETR:TUI1
Tui — Commerzbank Sector Conference 2016
55 slides from Tui's conference presentation, Aug 31, 2016
Slide 1: TUI Group Investor Presentation
TUI Group Investor Presentation Commerzbank Sector Conference 31 August 2016 Tulum, Mexico
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 TUI Group Overview 2 Delivering Growth 3 9M Review 2015/16 & Outlook 4 Appendix 3
Slide 4: FY 9M Opening remarks
FY 9M Opening remarks • Good performance in 9M period further demonstrating the resilience of our vertically integrated model. • Summer 2016 trading overall remains in line with our expectations with no apparent slowdown in UK bookings as a result of the EU referendum. • The disposal processes for H
Slide 5: TUI Group – The world's leading tourism business
TUI Group – The world’s leading tourism business Access to over 20m customers Modern & efficient leisure airline Attractive global hotel portfolio Growing fleet of cruise ships Key figures 2014/15 : Turnover €19.0bn; Underly. EBITA €1,001m; DPS €0.56 Note: Income statement items restated for discont
Slide 6: Strong positions in all parts of the value chain
Strong positions in all parts of the value chain • Control over content - especially hotels and cruises - is key to achieving differentiation from the competition and to delivering growth Integrated platforms • Vertical integration offers significant margin and medium-term cash flow upside Integrate
Slide 7: Strategy – Position of content centric, vertical integration
Strategy – Position of content centric, vertical integration Essence Global Platforms • Based on our strong heritage as trading Global TUI Brand companies, we are increasingly becoming a vertically integrated Aviation: Configuration, Purchasing, company throughout the tourism value Financing, Mainte
Slide 8: A clear structure to deliver growth and value
A clear structure to deliver growth and value Tourism Managed for value Marketing & Sales Travelopia Hotels & Resorts Cruises Hotelbeds Group in Source Markets (former Specialist Group) Tour operator Hotelportfolio Cruise ship fleet B2B Online Specialist & activity Disposal accommodation Marketing e
Slide 9: What we want to achieve – our growth levers
What we want to achieve – our growth levers Deliver Tourism Growth Global TUI Hotels/Hotel Destination Unparalleled Aviation Cruises IT Brand Purchasing Services customer proposition Maximise Growth & Value of our other businesses Increased Deliver Merger Synergies shareholder returns Balance sheet
Slide 10: TUI Brand
TUI Brand Hotel & club Exclusive Cruise Lines brands international hotel concepts Clear brand strategy supports our growth plans 10
Slide 11: Brand migration process
Our brand migration process will make sure that we don’t lose local brand equity NL Phased approach Phase 1 allows transfer of FR Introduce TUI best practice and enables us to BE minimise risk Nordics Phase 2 UK Supporting Workstreams Airline rebranding, destination & airport rebranding, external &
Slide 12: Strengthen local P&Ls, build on world-class global platforms
Strengthen local P&Ls, build on world-class global platforms Northern Region Central Region Western Region €538m EBITA, 7.3% margin €104m EBITA, 1.8% margin €69m EBITA, 2.4% margin 91% direct distribution 44% direct distribution 68% direct distribution 58% online distribution 15% online distribution
Slide 13: Central Platform airline fleet
Europe’s 7th largest airline fleet Industry-leading rates of asset utilisation Central platform with local airlines One organisational structure Central Platform 8 aircraft 60 aircraft Business model / ways of working 9 aircraft 30 aircraft Scale: one procurement organisation / common supply chain &
Slide 14: Our Destination service team
Our Destination service team Delivering our differentiation strategy One organisation in all destinations Over 6,500 11m 109 employees customers destinations Customer Sales Service experience Increase NPS and CSQ Increase sales & margin Transport Excursions Transfers Handling People Cost engagement
Slide 15: Investing in transformational growth
Investing in transformational growth Hotels Cruises Strengthening the Core • Invest in local strength and global • Strongly differentiated • Strongly differentiated platforms Strategic view • Growth enabler • Growth enabler • Strengthen Balance Sheet ready • Priority for Capex allocation • Priority
Slide 16: Growth in our strong hotel and club brands
Growth in our strong hotel and club brands – Summer 2016 hotel additions Hotels & Concept Hotels Robinson Masmavi Robinson Kyllini Beach Sensatori Dominican Republic • RIU Republica • Robinson • Robinson • Sensatori Dominican • RIU Sri Lanka Masmavi Kyllini Beach Dominican Republic Turkey Greece Rep
Slide 17: Growth of cruise fleet
Growth of cruise fleet Mein Mein Mein Mein Mein Mein Mein Mein Schiff 1 Schiff 2 Schiff 3 Schiff 4 Schiff 5 Schiff 6 Schiff 7 Schiff 8 Berths 1,924 1,924 2,500 2,500 2,500 2,500 2,860 2,860 Year of construction 1996 1997 2014 2015 2016 2017 2018 2019 MS1 and MS2 to replace 2 ships in UK fleet follow
Slide 18: Conquering Destinations - Our long-haul presence
Conquering Destinations - Our long-haul presence Over 1m customers Over 40 group hotels Range of cruise routes 14 x 787 (S16) (source markets, accommodated) USA Caribbean Mexico & Middle East Asia & India C.America Indian Ocean Australia Our targets • >50% growth in source market customers over • Ne
Slide 19: Integrated platforms - Focus on customer experience
Integrated platforms - Focus on customer experience Central Mobility Platform Central Customer Platform • Increasingly mobile first • SAP solution: • Key driver of customer engagement at every stage • Single view of the customer of the journey • Contact management • Over 1 million downloads to date
Slide 20: Update on Hotelbeds, Specialist Group & Hapag-Lloyd
Update on Hotelbeds, Specialist Group & Hapag-Lloyd Specialist Group Hotelbeds Group Hapag-Lloyd AG (now: Travelopia) • Accounted as financial asset • Agreement reached to • Strategic Review available for sale sell Hotelbeds complete • Fair value of €234m business for €1.2bn • Decision to dispose ba
Slide 21: Deliver merger synergies
Deliver merger synergies 1 2 Corporate Cash tax streamlining benefits Uplifted by €5m to €50m* Significant 7% point reduction in ETR** synergy 3 potential 4 Increased occupancy from Inbound Services vertical integration cost savings Each 1% point increase equivalent to €6m EBITA* At least €20m* On t
Slide 22: Financial policy: disciplined capital allocation
Financial policy Disciplined approach to capital allocation • Investment in hotels & cruises – the key differentiator in customer Investing in experience and a significant opportunity for growth transformational • Investment in online distribution, inventory management and growth customer/CRM system
Slide 23: Financial policy: new financial targets 2015/16
Financial policy New financial targets 2015/16 • Current corporate credit ratings “BB-” (S&P) and “Ba2” (Moody’s) • We are committed to improving our credit metrics, therefore we are setting new financial targets for 2015/16 as follows: Ratio Target 2015/16 Actual 2014/15 Leverage ratio 3.5 to 2.75
Slide 24: 9M Review 2015/16 & Outlook
9M Review 2015/16 & Outlook 24
Slide 25: Review of 9M
Review of 9M Brand turnover: €13.5bn • Turnover flat y-o-y, Q3 in particular was impacted by -0.2% /+1.3%* geopolitical events Turnover: €11.4bn • 60.0%* improvement in underlying EBITA. -0.9% /+0.2%* • UK, Riu and Cruise continue to deliver a strong trading Underlying EBITA: €-56.9m performance. +4
Slide 26: Summer 2016 and Winter 2016/17
Summer 2016 and Winter 2016/17 • Summer 2016 • Source Market programme 87% sold to date, revenue up 1%. • Continued strong performance in UK – revenue and bookings up 6%. • No apparent slow down in bookings as a result of the EU referendum. • Source Markets bookings excluding Turkey up 8% proving th
Slide 27: Outlook 2015/16 – Continuing operations basis
Outlook 2015/16* – Continuing operations basis €m 2014/15 2015/16 e Brand Turnover €21,590m Around 3% growth Turnover €19,018m Around 2% growth Underlying EBITA €1,001m At least 10% growth Adjustments €176m ~€160m Net Interest €182m ~€170m Net capex & €655m ~€750m investments Net debt €214m Broadly
Slide 28: Progressive dividend policy
Progressive dividend policy Based on underlying earnings growth on 5.1 cents constant currency 6.9 cents 5.1 cents Additional 10% 4.5 cents Base 56 cents 51.4 cents 44.5 cents 2014/15 2015/16 indicative only Progressive dividend policy which reflects underlying growth in earnings 28
Slide 29: Appendix
Appendix 29
Slide 30: Review of Q3
Review of Q3 Brand turnover: €5.2bn • Turnover decline driven by earlier Easter timing and -4.9% /-1.2%* geopolitical events. Turnover: €4.6bn • 14.1%* improvement in underlying EBITA. -5.7% /-2.1%* • UK, Riu and Cruise continue to deliver a strong trading performance. Underlying EBITA: €180.0m +1.1
Slide 31: Underlying EBITA bridge Q3 2015/16
TUI Group Underlying EBITA bridge Q3 2015/16 in €m 9 1 -12 15 -10 10 -11 Corporate streamlining €5m Occupancy improvements €4m 178 203 180 Q3 14/15 Underlying PY: Profit on PY: Merger Debt/finance Q3 15/16 Easter timing FX translation Q3 15/16 Continuing Ops trading disposal of Repatriation synergie
Slide 32: Source Markets
Source Markets Turnover and Earnings (€m) Bridge Underlying EBITA (€m) 4 -9 -6 7 Q3 15/16 Q3 14/15 % Turnover 3,843.3 4,071.3 -5.6 89 94 85 Underlying EBITA 84.9 88.9 -4.5 Q3 14/15 Northern Central Western Q3 15/16 FX Q3 15/16 Region Region Region pre FX translation Northern Region -€6m (+€1m exclud
Slide 33: Hotels & Resorts
Hotels & Resorts Turnover and Earnings (€m) Bridge Underlying EBITA (€m) 1 13 Q3 15/16 Q3 14/15 % -22 -2 Total Turnover 300.9 316.9 -5.0 Underlying EBITA 56.7 67.3 -15.8 67 59 57 o/w Equity result 10.9 10.0 9.0 Q3 14/15 Riu Robinson Other Q3 15/16 FX Q3 15/16 pre FX translation The prior year resu
Slide 34: Cruises
Cruises Turnover and Earnings (€m) Bridge Underlying EBITA (€m) Q3 15/16 Q3 14/15 % 4 Turnover HL Cruises 71.3 63.8 11.8 6 Memo: TUI CruisesTurnover 181.4 147.7 22.8 29 Underlying EBITA 29.4 19.3 52.3 19 o/w EAT TUI Cruises* 25.8 19.5 32.3 Q3 14/15 TUI Cruises HL Cruises Q3 15/16 * TUI Cruises joint
Slide 35: Income Statement
Income Statement • Adjustments of €82m A reduction of €61m due to the lower merger related costs, includes PPA of €45m. In €m 9M 2015/16 9M 2014/15 Interest reduced to €115m • A reduction of €26m mainly due to the lower Turnover 11,390.0 11,488.1 convertible bond interest. Underlying EBITA -56.9 -10
Slide 36: Underlying EBITA bridge 9M 2015/16
TUI Group Underlying EBITA bridge 9M 2015/16 in €m Corporate streamlining €15m Occupancy improvements €4m -42 Destination Services €5m -57 8 -105 5 -15 24 -10 10 26 9M 2014/15 Underlying PY: Profit on PY: Merger New financing Debt/finance 9M 2015/16 FX translation 9M 2015/16 Continuing trading dispo
Slide 37: Cash Flow
Cash Flow In €m 9M 2015/16 9M 2014/15* EBITA reported** -138.8 -248.1 Depreciation** 312.0 294.2 Working capital 1,143.6 881.5 Other cash effects 50.8 -123.8 At equity income** -101.7 -84.9 Dividends received from JVs and associates 39.6 9.1 Tax paid -160.4 -102.3 Interest (cash) -58.8 -67.4 Pension
Slide 38: Movement in net debt
Movement in net debt €m 30 Jun 2016 30 Jun 2015 Opening net (debt)/ cash as at 30 September -214 293 Movement in cash net of debt 193 -323 Disposal of shares in Money Market fund - 300 Foreign exchange movement 75 -174 Non cash movement in debt - Asset backed finance -337 -689 Non cash movement in d
Slide 39: FX and fuel
FX and fuel Summer Winter Summer Hedging 2016 2016/17 2017 Euro 95% 81% 50% US Dollars 95% 84% 59% Jet Fuel 95% 91% 77% Anticipate ~€100m adverse impact from FX translation on the full-year underlying EBITA result Hedging as at 5 August 2016 39 TUI GROUP | Q3 2015/16 Results | 11 August 2016
Slide 40: 2015/16 9M Turnover by segment
2015/16 9M Turnover by segment (excludes intra-group turnover)* Change ex In €m 9M 2015/16 9M 2014/15 Change FX FX Northern Region 4,285.6 4,305.9 -20.3 -103.4 83.1 Central Region 3,335.2 3,340.3 -5.1 -2.6 -2.5 Western Region 1,650.2 1,660.1 -9.9 0.1 -10.0 Source Markets 9,271.0 9,306.3 -35.3 -105.9
Slide 41: 2014/15 Turnover by segment
2014/15 Turnover by segment (restated for continuing operations)* In €m Q1 2014/15 Q2 2014/15 Q3 2014/15 Q4 2014/15 FY 2014/15 Northern Region 1,167.0 1,234.1 1,904.8 3,042.5 7,348.4 Central Region 1,058.1 876.0 1,406.1 2,260.6 5,600.8 Western Region 487.3 412.4 760.4 1,186.9 2,847.0 Source Markets
Slide 42: 2015/16 9M Underlying EBITA by segment
2015/16 9M Underlying EBITA by segment* Change ex In €m 9M 2015/16 9M 2014/15 Change FX FX Northern Region -11.3 8.1 -19.4 -13.4 -6.0 Central Region -106.5 -97.9 -8.6 0.2 -8.8 Western Region -82.2 -71.1 -11.1 - -11.1 Source Markets -200.0 -160.9 -39.1 -13.2 -25.9 Riu 218.2 170.4 47.8 -8.0 55.8 Robin
Slide 43: 2014/15 Underlying EBITA by segment
2014/15 Underlying EBITA by segment (restated for continuing operations)* In €m Q1 2014/15 Q2 2014/15 Q3 2014/15 Q4 2014/15 FY 2014/15 Northern Region -47.6 -47.6 103.3 530.2 538.3 Central Region -20.3 -73.4 -4.2 201.4 103.5 Western Region -11.9 -49.0 -10.2 139.9 68.8 Source Markets -79.8 -170.0 88.
Slide 44: Net financial position
Net financial position €m 30 Jun 2016* 31 Mar 2016* 31 Dec 2015 30 Sep 2015 Financial liabilities 2,122 2,505 2,918 1,887 o/w non-current 1,838 2,282 2,693 1,654 o/w current 284 223 225 233 Cash 1,663 926 1,042 1,673 Net debt 459 1,579 1,876 214 * On Continuing operations basis. 44
Slide 45: Source Market KPIs Q3
Source Market KPIs* Q3 Direct Distribution Online Distribution Customers (000) 15/16 14/15 15/16 14/15 15/16 14/15 UK 93% 92% 59% 54% 1,745 1,664 Nordics 91% 91% 77% 73% 314 351 Germany** 46% 42% 14% 14% 1,672 1,853 Benelux 73% 68% 56% 50% 1,125 1,173 Total Source Markets *** 73% 69% 44% 40% 5,260 5
Slide 46: Source Markets KPIs Q3 2015/16
Source Markets KPIs Q3 2015/16 Customers Direct Distribution Online Underly. EBITA y-o-y (%) (`000) y-o-y (ppts) (%) y-o-y (ppts) (%) y-o-y (€m) (€m) Northern Region* 2 2,090 0 92 5 8621 -15 88 Central Region -9 1,810 5 52 1 17 7 3 Western Region* -4 1,360 4 70 4 51 4 -6 Source Markets -4 5,260 4 73
Slide 47: Hotels & Resorts KPIs Q3 2015/16
Hotels & Resorts KPIs Q3 2015/16 Capacity1 Revenue/bed2 Occupancy3 Underly. EBITA4 y-o-y (%) (`000) y-o-y (%) (€) y-o-y (ppts) (%) y-o-y (€m) (€m) 1 4,566 3 54.7 5 86 8 65 8 895 -3 82.3 -11 60 1 6 Other (incl former TUI -20 -14 Travel Hotels) TUI H&R (incl former -4 9,796 5 53.5 57 TUI Travel Hotels
Slide 48: Cruises KPIs Q3 2015/16
Cruises KPIs Q3 2015/16 Passenger cruise Average daily rate Occupancy Underly. EBITA days y-o-y (%) (´000) y-o-y (%) (€) y-o-y (ppts) (%) y-o-y (€m) (€m) 20 776 3 179 Flat 101 6 26* -3 3 88 7 546 73 4 4 * Equity result 48
Slide 49: Source Markets Current Trading - Summer 2016
Source Markets Current Trading - Summer 2016 Current trading1 Programme Revenue2 Customers2 ASP2 y-o-y variation (%) sold UK 6 6 Flat -1 89% Nordics -9 -12 3 87% Germany -3 -3 1 86% Benelux -1 22 -3 85% Source Markets 1 0 0 Flat Flat 87% 1. These statistics are up to 31 July 2016 and are shown on a
Slide 50: Key sources of funding 30 June 2016
Key sources of funding 30 June 2016 Interest % Instrument Issue Maturity Amount €m p.a.* Revolving Credit Facility Sep 14 Dec 20 1,750** 1.55 High Yield Bond Sep 14 Oct 19 300 4.5 Finance leases Various Various 1,258 Various *Upgrade of our rating by Moody’s has reduced our RCF interest margin from
Slide 51: Destination update
Destination update • Adverse travel advice in UK, Belgium and Netherlands still in place Tunisia • TUI has 11 leased hotels – most have been temporarily closed • Tour operator charter capacity remixed for Summer 2016 • Adverse travel advice to Sharm el Sheik airport from all major source markets Egy
Slide 52: Aircraft order book deliveries – FY 2016 to FY 2021
Aircraft order book deliveries – FY 2016 to FY 2021 15/16 16/17 17/18 18/19 19/20 20/21 B737 NG - - - - - - B737-MAX - - 5 18 18 12 B787-8 - - - - - - B787-9 1 1 2 - - - Firm order book deliveries 2016-2021 1 1 7 18 18 12 Financial Years (FY) ending 30 September; figures correct as at 31 July 2016,
Slide 53: Aircraft commitments by financing type
Aircraft commitments by financing type Operating Lease* Finance Lease Owned Total As at 30 September 2015 124 15 8 147 Order book financing - 1 - 1 External Lessor deliveries 6 - - 6 External Lessor Returns (5) - - (5) As at 30 June 2016 125 16 8 149 * Includes aircraft leased from and operated on b
Slide 54: Financial calendar
Financial calendar 2016 & 2017 28 September 2016 Pre-close trading update 8 December 2016 Annual Report for financial year 2015/16 14 February 2017 Q1 Report and Annual General Meeting 29 March 2017 Pre-close trading update 54
Slide 55: Contact
Contact ANALYST & INVESTOR ENQUIRIES Andy Long, Director of Investor Relations Tel: +44 1293 645831 Contacts for Analysts and Investors in UK, Ireland and Americas Sarah Coomes, Head of Investor Relations Tel: +44 1293 645827 Hazel Newell, Investor Relations Manager Tel: +44 1293 645823 Jacqui Smith