Tui Ag · XETR:TUI1
Tui — Investor Presentation (September 2020)
52 slides from Tui's investor presentation, September 2020
Slide 1: TUI Group Investor Presentation
TUI Group Investor Presentation September 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: Overview
OVERVIEW TUI GROUP | Investor Presentation | September 2020
Slide 4: TUI Group at a glance
TUI Group at a glance TUI GROUP HOLIDAY EXPERIENCES (~70% EBITA2) 21m Customers1 €452m Leading leisure hotel and club brands around EBITA the world; investments, operations, ownership €18.9bn Turnover €366m Leading German & UK cruise brands EBITA €893m EBITA / excl. MAX €1,186m EBITA2 €56m Tours, ac
Slide 5: TUI's unique and integrated business model is the foundation of our success
TUI‘s unique and integrated business model is the foundation of our success INTEGRATED BUSINESS MODEL Markets & Airlines Holiday Experiences 21m customers 411 Hotels1 • Integrated business model with differentiated product 150 aircraft 18 Cruise ships2 offering along the whole value chain Own & 3rd
Slide 6: TUI's four strategic initiatives
TUI’s four strategic initiatives - grow integrated business model through expanded distribution and content 1 MARKETS & AIRLINES 2 HOLIDAY EXPERIENCES Protect and where Asset-right expansion, possible extend driving returns, benefiting leading positions • Grow own products from vertical integration
Slide 7: Global realignment programme drives TUI's strategic initiatives
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 inve
Slide 8: C-19 Update
C-19 UPDATE TUI GROUP | Investor Presentation | September 2020
Slide 9: 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 Continue to expect Q4 cash outflow to be low single-digit hundreds €million
Slide 10: Impact & response to C-19 and operational achievements
Impact & response to C-19 and operational achievements TUI GROUP | Investor Presentation | September 2020
Slide 11: COVID-19 crisis and the impact on TUI
COVID-19 crisis and the impact on TUI RIGHT-SIZING RESTART 1 COVID-19 IMPACT 2 TUI ACTIONS 3 THE BUSINESS 4 OF OPERATIONS • Exceptional start to S20 trading • Reduced cash fixed cost base by • Global Realignment • Holidays remain a high priority • Temporary travel suspension >70% within four weeks P
Slide 12: TUI first holiday company to restart operations quickly & responsibly
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 operation
Slide 13: Successful operations since mid-June restart
Successful operations since mid-June restart1 OPERATIONS SINCE RESTART1 M&A DEPARTURES SINCE RESTART1 Cumulative PAX 1,405K NORTHERN REGION 193k PAX (risk & non-risk) Load Factor 84% CENTRAL REGION 757k PAX RESTART IN ACTION WESTERN REGION 455k PAX > Play HOTELS & RESORTS 157 Hotels reopened CRUISES
Slide 14: Health and safety protocols allow relaxing travels in times of pandemic
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 e
Slide 15: 2.4m new bookings since global travel bans were lifted
2.4m new bookings since global travel bans were lifted – Summer 21 looks promising RECENT BOOKING DEVELOPMENT1 OVERALL BOOKING DEVELOPMENT2 S20 W20 S21 • 82% of adjusted Summer 20 programme sold New bookings since 1,555k 285k 605k • 15% of our original Summer 20 programme sold; Overall June1 (previo
Slide 16: Financial achievements during restart & current priorities
Financial achievements during restart & current priorities TUI GROUP | Investor Presentation | September 2020
Slide 17: Agreement with German Federal Government on additional €1.2bn headroom
TUI reached agreement with German Federal Government on additional financial headroom of €1.2bn • TUI Management reached 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 a
Slide 18: Details of TUI's government stabilisation financing measures
Details of TUI’s government stabilisation financing measures 1st stabilisation measure 2nd stabilisation measures RCF – RCF – Convertible Bond (Bond with Item Apr KfW tranche Aug KfW tranche warrant) subscribed by WSF4 Amount €1.8 billion €1.05 billion €150 million Oct 21 / Oct 21 / Maturity Date Mi
Slide 19: Successful closing of Hapag-Lloyd transaction enhances liquidity
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 ~€4
Slide 20: Boeing compensation agreement enhances liquidity
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 anticipat
Slide 21: Liquidity development in line with expectations
Liquidity development in line with expectations LIQUIDITY DEVELOPMENT SINCE LAST UPDATE COMMENTS • Successful management of liquidity position during Pro forma cash and available facilities on 12 Aug 2020 = €2.4bn standstill & restart (incl. KfW2/WSF)1 • Cash and available facilities on 12 Aug posit
Slide 22: Restart leads to significant reduction of monthly cash out
Restart leads to significant reduction of monthly cash out – strict liquidity management maintained STANDSTILL RESTART SCENARIO FY20 Q3 FY20 Q4 FY21 Q1 Expect low single muted cash out of Monthly cash costs & low to mid-single digit hundreds €m customer refunds €550m - €650m p.m. including net digit
Slide 23: Partial restart of business generates immediate working capital inflow
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 packag
Slide 24: Next priority will be rebuilding a robust financial profile
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 provide sufficient liquidity to cover seasonal swing through Winter 2020/21. The Group will now evaluate options FY 2020 & 2021 Gui
Slide 25: Global Realignment Programme underway
Global Realignment Programme underway TUI GROUP | Investor Presentation | September 2020
Slide 26: Global realignment programme drives TUI's strategic initiatives
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 inve
Slide 27: Overall cost reduction target over €300m p.a.
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 FY2
Slide 28: Global realignment programme: main projects already underway
Global realignment programme: Main projects already underway • Start of negotiations with work councils & trade unions regarding restructuring Transformation plan presented • Reduction in number of aircraft by around 50% from 39 GERMANY & in negotiations • Reduce number of bases to five as well as h
Slide 29: Summary
SUMMARY TUI GROUP | Investor Presentation | September 2020
Slide 30: Summary: Successful restart driving transition and return to normal 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 • Recovery of bookings expected • Trusted, leading brand with differentiated • Uptake in bookings since travel bans lifted
Slide 31: FY20 9M Results
FY20 9M RESULTS TUI GROUP | Investor Presentation | September 2020
Slide 32: Q3/9M: Group EBIT loss mitigated by fixed cost reduction
Q3/9M: Group EBIT loss mitigated by immediate fixed cost reduction in response to C-19 impact Q3 TURNOVER 9M YTD TURNOVER • Cash fixed costs reduced by >70% from April as €75m1 €6.7bn1 anticipated -98%1 -42%1 • 9M underlying EBIT driven by: o Suspended or reduced operations since March mitigated by
Slide 33: 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 34: 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 35: 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 36: 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 37: 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 38: 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 39: Appendix – FY20 9M Results
APPENDIX – FY20 9M RESULTS TUI GROUP | Investor Presentation | September 2020
Slide 40: 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 41: 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 42: 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 43: 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 44: Appendix – FY19 Results
APPENDIX – FY19 RESULTS TUI GROUP | Investor Presentation | September 2020
Slide 45: Income Statement – Full Year
Income Statement – Full Year Group result after minorities mainly impacted by MAX grounding, underlying EPS benefit from lower underlying tax rate In €m FY19 FY181 ∆ YOY % YOY TURNOVER Turnover 18,928.1 18,468.7 459.5 +3% • Broadly stable excluding the effect of smaller M&A Underlying EBITDA 1,359.5
Slide 46: Cash Flow & Movement in Net Debt – Full Year
Cash Flow & Movement in Net Debt – Full Year In €m FY19 FY18 EBITDA underlying 1,359.5 1,554.8 Adjustments -82.1 -60.4 EBITDA reported 1,277.4 1,494.4 Working capital -25.6 64.5 Other cash effects 138.4 75.0 At equity income -297.5 -292.1 Dividends received from JVs and associates 244.6 222.7 Tax pa
Slide 47: Net Financial Position, Pensions and Operating Leases
Net Financial Position, Pensions and Operating Leases In €m 30-Sep-19 30-Sep-18 Financial liabilities -2,682 -2,443 - Finance leases -1,495 -1,343 FINANCIAL LIABILITIES - Senior Notes -298 -297 • Higher versus prior year as a result of new finance - Liabilities to banks -870 -780 leases relating to
Slide 48: FY19 Full Year Turnover by Segment
FY19 Full Year Turnover by Segment – restated for IFRS15 (excludes Intra-Group Turnover and JVs/associates)* In €m FY19 FY181 Change FX Change ex FX Hotels & Resorts 660.0 606.8 53.2 2.8 50.4 - Riu 415.1 407.0 8.1 9.5 -1.4 - Robinson 103.1 89.3 13.8 -0.6 14.4 - Blue Diamond - - - - - - Other 141.8 1
Slide 49: FY19 Full Year Underlying EBITA by Segment
FY19 Full Year Underlying EBITA by Segment* In €m FY19 FY181 Change FX Change ex FX Hotels & Resorts 451.5 420.0 31.5 14.0 17.5 - Riu 326.2 390.3 -64.1 4.3 -68.4 - Robinson 54.7 41.8 12.8 1.9 10.9 - Blue Diamond** 9.9 18.4 -8.4 1.1 -9.5 - Other 60.7 -30.4 91.1 6.7 84.4 Cruises 366.0 323.9 42.1 -0.7
Slide 50: Appendix - Sustainability
APPENDIX - SUSTAINABILITY TUI GROUP | Investor Presentation | September 2020
Slide 51: Pioneering Sustainability – Ambition and achievement
Pioneering Sustainability – Ambition and achievement TUI Airways and TUI fly Germany TUI’s airlines are 18% more carbon- ~14% reduction in relative cruise 83% of TUI Hotels & Resorts Women in ~36% of ranked #1 & #4 most carbon- efficient than the average of the 6 carbon emissions since 2015 hold sus
Slide 52: 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