Thomas Cook. Delivering the transformation. Q3 Interim Management Statement Thomas Cook Group plc

Transcription

1 Thomas Cook Delivering the transformation Q3 Interim Management Statement

2 Key messages and agenda Delivering the transformation Delivering improved financial and business performance Current trading and outlook 4 This is just the start 2

3 Key messages and agenda 1 Delivering the transformation Harriet Green Group CEO 2 Delivering improved financial and business performance 3 Current trading and outlook 4 This is just the start 3

4 DELIVERING THE TRANSFORMATION Q3 2013: more results improvements since we last reported eleven weeks ago H1 Results Announcement 16 May billion capital refinancing Six months underlying EBIT 1 on a like for like basis improved by 58.7m UK underlying EBIT 1 margin on a last 12 months basis 1.1% 107m cost out delivered by 31 March and total FY15 target increased to 390m 11 Weeks Q3 1 August IMS 2013 Announcement 1 Successfully August 2013 completed: reduced debt and extended maturity, resulting in credit rating upgrade Successfully completed: Balance sheet strengthened reduced debt Nine and months extended underlying maturity EBIT 1 on a like for like basis improved by 104m Nine months underlying EBIT 1 on a like for like basis improved by UK 79.1m underlying EBIT 1 margin on a last 12 months like for like Result basis improved by 60 bps to 1.7% 138m cost out delivered by 30 June and total FY15 target Result increased to 400m Cash conversion 47% as at 31 March Cash conversion 58% as at 30 June Result most visible holiday website on Innovative web partnership with Triporati Result Google UK, attracting 59% of all generic laptop/desktop holiday searches and second most visible for tablet and smartphone searches (Greenlight May 2013) Concept hotels increased to 93 from to be open for FY14 season. Summer 13 bookings up 38% This is just the start Q3 IMS Announcement Note: Results are for the 6 months ended 31 March 2013 and for the ended 30 June See Appendix for details. 4

5 DELIVERING THE TRANSFORMATION More delivery against our Targets and KPIs first presented in March 2013 FY12 Q3 13 FY15 Targets New Product Revenue N/A More progress (e.g. concept hotel summer 2013 bookings up 38%.) > 500m Web Penetration 34% 35% 1 > 50% Cost out Profit improvement 60m 138m > 400m Sales CAGR 2 N/A N/A > 3.5% KPIs Gross Margin Improvement 3 N/A 1.1% 4 > 1.5% UK EBIT Margin 5 0.1% 1.7% 1 > 5% Cash Conversion 6 11% 58% > 60% Notes: See Appendix 5

6 DELIVERING THE TRANSFORMATION More progress on our concept hotel plan first presented in March 2013 Performance relative to other products 1 Higher gross margins through volume commitments Continuing to roll out concept hotel Group-wide Concept hotel customer bookings up by 38% Opening a further 46 hotels for the FY14 season, taking the total to 139 Continuing product innovation Quality assurance standard being developed to cover, not just concept hotels, but all products across the Group Indicative concept hotel expansion plan millions of passengers /12 66 Higher loyalty through consistent experiences 12/ / /15 15/ / Higher rate of early bookings Sunwing smartline (family) Family concept (tbd) Sunprime/ SENTIDO smartline (adult) # of hotels in operation 1 Average for the existing concept portfolio 2 Total number of hotels, including those opened during April/May, for summer 2013 season 6

7 DELIVERING THE TRANSFORMATION More innovation to inspire our customers to book online Committed to grow business being transacted online from the current 35% 1 to over 50% in FY15 the most visible website on Google UK, attracting 59% of all generic laptop/desktop holiday searches and second most visible for tablet and smartphone searches 2 Thomas Cook ranked as one of the UK s top 5 social media brands 3 and Neckermann brand best webshop award Website optimised for tablet usage to boost conversion rates Ask and Answer interactive site where the conversion rate from those visiting the site to booking online is more than double than for the website as a whole Incremental website advertising revenue 1. Calculated on a last 12 months basis. 2. Greenlight report May Headstream Special Brands 100 the report

8 DELIVERING THE TRANSFORMATION More cost out and confidence of delivery since we last reported 11 weeks ago UK Turnaround cumulative cost out increased to 105m, with 15m of benefits realised in Q3 Group-wide cost out increased to 33m, with 16m achieved in Q3 Well on track to deliver the cumulative total of 170m by end of FY13 Additional 10m of benefits identified from existing projects increasing our FY15 target to more than 400m Internally risk weighted, independently reviewed and rigorously embedded in our reporting systems, we remain confident of achieving our objectives Group-wide cost out 1 Organisational structure 1 Run-rate. 2 One-off costs. Q3 13 FY13 FY14 FY15 UK Turnaround Integrated air travel strategy Product, infrastructure, technology, and other Expected costs to achieve 2 FY H Total targeted benefits Income statement Cash flow (Opex) Cash flow (Capex)

9 Key messages and agenda for today 1 Delivering the transformation 2 Delivering improved financial and business performance Michael Healy Group CFO 3 4 Current trading and outlook This is just the start 9

10 DELIVERING IMPROVED FINANCIAL AND BUSINESS PERFORMANCE Refinancing executed on plan with further aircraft fleet financing secured 431m raised through issuance of new shares 525m of June 2020 Notes issued at 7.75% New 500m 4 year banking facility in place with prior facilities repaid, and additional 191m facility available from 2015 Lease financing arranged for a further 9 new aircraft being delivered in

11 DELIVERING IMPROVED FINANCIAL AND BUSINESS PERFORMANCE Positive EBIT achieved in Q3 Revenue 3% above last year despite ongoing management of capacity to mirror demand m Q3 13 Q3 12 Change Like for Like Change Gross Margin improvement maintained at 1.1% on a like for like basis with improvement in all segments Revenue 2,354 2, % +3.0% Gross Margin % % +1.1% Positive EBIT in Q3 with a like for like improvement of 46m Underlying EBIT 1 (23) + 24m + 46m 11

12 DELIVERING IMPROVED FINANCIAL AND BUSINESS PERFORMANCE Significantly improved trading performance and stronger balance sheet Revenue 1% above last year despite ongoing management of capacity to more closely mirror demand Gross Margin improvement of 1.1% reflecting benefits of capacity management EBIT improvement of 104m on like for like basis Finance charges broadly in line with last year Separately disclosed items largely reflect transformation activity Net debt more than halved by 647m to 452m Liquidity headroom above 1bn m to to Change Like for Like Change Revenue 5,578 5, % +1.0% Gross Margin % % +1.1% Underlying EBIT (197) (271) + 74m + 104m Net Finance Charges Separately disclosed items (111) (103) - 8m - 8m (162) (266) + 133m + 133m Pre tax loss (470) (669) + 199m + 229m Net Debt 452 1, m Liquidity headroom 1, m 1 EBIT, profit before tax and earnings per share excluding exceptional operating items, IAS 39 fair value re-measurement, goodwill impairment and BCI amortisation 2 Liquidity headroom represents headroom under available credit facilities at each date 12

13 DELIVERING IMPROVED FINANCIAL AND BUSINESS PERFORMANCE Separately disclosed items Year to date cash exceptionals of 105m primarily restructuring and refinancing costs Restructuring costs recognised ahead of benefit delivery Improving business performance removes requirement for additional impairments Provision for Tour Operators Margin Scheme ( TOMS ) VAT ruling m to Cash to Non cash 13 to to Business restructuring costs (88) (6) (94) (50) Refinancing costs (15) - (15) (25) Finance related charges (2) (13) (15) (1) Impairment/amortisation of intangibles (16) (16) (211) Provisions for tax disputes (13) (13) (12) IAS 39 (9) (9) 4 Group (105) (57) (162) (295)

14 DELIVERING IMPROVED FINANCIAL AND BUSINESS PERFORMANCE Net Financing Costs Net interest before aircraft financing flat year on year Aircraft finance interest increased through last year s sale and leasebacks Run-rate expected to be broadly steady until 2015 note repayment m to to Bank and bond interest (64) (66) Fee Amortisation (5) (11) Other (21) (16) Interest on borrowings before aircraft financing (90) (93) Interest Income 3 5 Net interest before aircraft financing (87) (88) Aircraft finance leases (14) (3) Net interest after aircraft financing (101) (91) Others (10) (12) Net financing costs (111) (103) 14

15 Key messages and agenda for today 1 2 Delivering the transformation Delivering improved financial and business performance 3 Current trading and outlook Michael Healy Group CFO 4 This is just the start 15

16 CURRENT TRADING AND OUTLOOK We are already delivering better performance Key highlights of recent trading Year to date Underlying EBIT improved by 100m Summer trading Over 85% of planned capacity sold: 1% up on last year 9% less left to sell Gross margins up in all businesses Full year outlook encouraging underpinned by the delivery of our transformation plans 16

17 Key messages and agenda for today Delivering the transformation Delivering improved financial and business performance Current trading and outlook 4 This is just the start Harriet Green Group CEO 17

18 THIS IS JUST THE START This is just the start Q3 IMS Results Announcement 1 August 2013 Successfully completed 1.6bn capital refinancing UK underlying EBIT 1 margin on a last 12 months like for like basis improved by a further 60 bps to 1.7% 138m cost out delivered by 30 June and total FY15 target increased to 400m Cash conversion 58% as at 30 June most visible holiday website on Google UK attracting 59% of all generic laptop/desktop holiday searches and second most visible for tablet and smartphone searches (Greenlight May 2013) Concept hotel Summer 2013 bookings up 38% Huge potential for future growth Q3 IMS Announcement 1 August 2013 Significant debt reduction using growing operational cash Successfully flow completed: Balance sheet strengthened reduced debt and extended maturity Nine KPI to months deliver underlying UK EBIT margin EBIT 1 on of a greater like for than like basis 5% by improved FY15 by 79.1m Result Target to deliver 400m in savings by FY15 with more to come Result Our business model is highly cash generative, potentially enabling dividend payments in the future Result of the transformation of Thomas Cook We aspire to have the highest share of bookings online for a Result major tour operator Product expansion to capture fast growing market sectors Note: Results are for the 6 months ended 31 March 2013 and for the ended 30 June See Appendix for details. 18

19 19

20 Appendix 20

21 APPENDIX More delivery against our Targets and KPIs first presented in March 2013 Notes to slide 5: Measured on a last 12 months basis ( LTM ) Compound annual growth rate from FY13 to FY15 including new product revenue Delivery measured against an underlying gross margin of 21.3%, being the underlying gross margin in FY12, adjusted for the Thomas Cook India disposal Gross margin improvement of 1.1% for Q3 13 compared with Q3 12 on a like for like basis. KPI is based on a full year measure Underlying profit from operations of the Group s UK operating segment (excluding Thomas Cook India) as a percentage of its revenue Cash conversion defined as net cash from operating activities less interest paid as a percentage of underlying EBITDA 21

22 APPENDIX Reconciliation of like for like to underlying numbers Underlying refers to trading results after adjusting for separately disclosed items shown on slide 13 that are significant in understanding the on-going results. Like for like reflects the comparison in the underlying results after removing identifiable non-recurring items in the prior year. A reconciliation of like for like to underlying numbers for EBIT and gross margin is as follows: ended m EBIT ended m Change % ended m Gross margin ended m 1. Impact of provision releases in Northern Europe and Airlines Germany where the underlying liability for aircraft related and other costs no longer exists. 2. Reflects the impact of Thomas Cook India which was disposed of in H Net impact of the disposal/closure of individual businesses comprising Explorers Hotel, HCV, FX Bureaux and FY12 store closures. 4. Estimated adjustment for the timing of the Easter holidays. In FY13 part of the Easter holiday season fell in the first half of that financial year. In FY12 Easter predominantly fell in the second half of that financial year. 22 Change % Underlying (197) (271) (0.2) FY12 provision releases 1 - (30) 30 - (0.2) 0.2 India FY12 disposal 2 - (12) 12 - (0.7) 0.7 Other discontinued operations 3-12 (12) - (0.6) 0.6 Other Currency impact (0.2) Like for like (197) (301)