3 Reasons to Invest in TUI August Robinson Club Noonu, Maldives

Transcription

1 Reasons to Invest in TUI August 018 Robinson Club Noonu, Maldives

2 Strong TUI investment case reasons to be invested / to invest 1 STRONG STRATEGIC POSITION Global leading tourism group Covering entire customer journey: Sales & Marketing, Hotels, Cruises, Destination Services Integration and control of attractive hotel & cruise experiences drives customer satisfaction & retention drives end-to-end customer profitability STRONG EARNINGS GROWTH At least +10% Global leisure travel market growing above GDP Strong track record driven by merger synergies: Underlying EBITA CAGR of 1% 1 since merger Underlying EPS CAGR of 1% since merger driven by lower interest and tax rate Future growth supported by digitalisation benefits and by reinvesting disposal proceeds EBITA growth target extended until 00 STRONG CASH GENERATION.6% group ROIC, significantly above cost of capital Strong operating cash conversion, enabling to fund maintenance investments high cash returns to shareholders in form of dividends balance sheet stability 1 Underlying EBITA CAGR of 1% since merger / average CARG of 1% since merger at constant currency TUI GROUP reasons to invest August 018

3 1 Our business model: Product-focused holiday provider with 59% Holiday Experience earnings MARKETS 41% EBITA Digitalisation, diversification HOLIDAY EXPERIENCES 59% EBITA Growth, diversification INTEGRATION BENEFITS / STRATEGY Northern, Central, Western ROIC : 85% ~150 TUI Aircraft, rd party flying Own, rd party committed & non-committed Customer, knowledge, service & fulfilment 0m customers Integrated Integrated Integrated Owned / managed / JV ROIC : 1% Owned / JV ROIC : 0% Owned / JV ROIC : 4% GROUP PLATFORMS Portfolio approach 79 1 Hotels 16 Ships rd party rd party 115 Destinations rd party 1 4 Own customer end-to-end Yielding our risk capacity: 6m customers to optimise own hotels/ cruises demand Unique TUI holiday experiences and fulfillment differentiating TUI from competition Double diversification across Markets and Holiday Experiences 1 This number includes group hotels and rd party concept hotels as at end of Q FY18 As at end of August 018 This number relates to Sales & Marketing/ all other TUI GROUP reasons to invest August 018

4 Merger synergies delivered, strong earnings growth story continues STRONG GROWTH TRACK RECORD: MERGER SYNERGIES FUTURE GROWTH: MARKET DEMAND, DIGITALISATION, INVESTMENTS MERGER SETS BASIS FOR FUTURE GROWTH +1% 1 >+10% CAGR Earnings growth from investments Target extended to 00: at least 10% underlying EBITA CAGR Mix of earnings growth changes Earnings growth from market demand & digitalisation benefits Market demand & digitalisation benefits Growth from investments Less seasonality in earnings FY14 FY18e FY19e FY0e 1 Underlying EBITA CAGR of 1% since merger / average CARG of 1% since merger at constant currency 4 TUI GROUP reasons to invest August 018

5 Strong cash generation allowing to invest, pay dividends and strengthen balance sheet ILLUSTRATIVE CASH FLOW PROFILE - FY19 Underlying EBITDA Normalised Growth Investments 1/ of bn disposal proceeds 1 Pre-funding ~65% Covering Dividends Taxes Pensions Cash conversion Deleveraging etc. CAPITAL ALLOCATION FRAMEWORK Attractive dividend In line with earnings growth : 0.65 per share Balance sheet stability Target leverage ratio further reduced to.5x-.0x Strong cash generation allows to tick all boxes Growth investments Re-investing disposal proceeds 15% ROIC hurdle rate Opportunistic M&A, if synergistic JV growth ~ 50% JV cash flow pay-out to TUI ~ 50% retained to finance JV growth 1 Disposal proceeds reinvested from -FY19 5 TUI GROUP reasons to invest August 018

6 Business model strength continues to drive ROIC TUI GROUP 1 4% HOTELS Delivering strong ROIC for % % 4% 11% 1% 1% TUI shareholders Hotels: pre-dominantly low capital intensity, JVs Cruises: partially off CRUISES 17% 17% 0% SALES & MARKETING, ALL OTHERS 4% 50% 7% balance sheet financing Sales & Marketing: low capital intensity Strong earnings performance 1 Pre IFRS 16; Based on former segmentation - Marella Cruises within Source Markets 6 TUI GROUP reasons to invest August 018

7 APPENDIX 7 TUI GROUP reasons to invest August 018

8 TUI s re-investment programme -FY19 doubling EBITA under way GROWTH INVESTMENTS to FY18 9M GROWTH INVESTMENTS FY18 & FY19 REINVESTMENTS ~ 0.4bn ~ 0.4bn ~ 1.bn Disposal proceeds 1 0 Marella Discovery hotels since Merger Expedition Marella ships HL Explorer 1 prepayment 55 Transat (EV) 4 80 PDPs 175 UK Pensions m 5 5m 70m 5m 6 0m 11m 545 Rem. prefunding 0 Rem. equity contribution Expedition ships HL 00 SGE 15 ~15 hotels until m 5m 0m PDPs UK Destination Pensions Management 018 Deconsolidated EBITA Targeted EBITA 7 Acquisition of Destination Management for EV of 110m from HBG 10-5m 8 Reinvestment of disposal proceeds by FY19 Own content growth Basis for end-to-end profitability Investments on track More than doubling returns Capital discipline continues after FY19 ROIC as KPI Normalised capex levels Investments if attractive + 61m 1 Including working capital/cash effect; Equity-contribution, delivery in Spring & Autumn 019; Assumes SkySea Golden Era (SGE) purchase as cash transaction; 4 10m quarterly adjustment until pro rata approach; 5 Number includes 9m EBITA of HBG & Travelopia as well as EAT of MS1 within TUI Cruises of 1.5m due transferring the ship to UK market; 6 run-rate; 7 Based on targeted EBITA run-rate 8 Profitability growth expected in line with year ramp-up phase of synergies; expected to complete in H FY18 8 TUI GROUP reasons to invest August 018