TUI GROUP - REASONS TO INVEST & BUSINESSMODEL

Strong TUI investment case-3 reasons to be invested / to invest

1

STRONG STRATEGIC POSITION

  • •Global leading tourism group

  • •Covering entire customer journey: Sales & Marketing, Hotels, Cruises, Destination Experiences

  • •Integration and control of attractive hotel & cruise experiences

    • •drives customer satisfaction & retention

    • •drives end-to-end customer profitability

    • •provides strategic entry barriers

  • 2

    STRONG EARNINGS GROWTH

    At least +10%

  • •Global leisure travel market growing above GDP

  • •Strong track record driven by merger synergies:

    • •Underlying EBITA CAGR of 12%1since merger

    • •Underlying EPS CAGR of 21% 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 2020

  • 3

    STRONG CASH GENERATION

  • •23.6% group ROIC FY17, 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 12% since merger / average CARG of 13% since merger at constant currency

1

3 years after the merger:

TUI-one brand, superior strategic positioning, diversified

MARKETS-41% EBITA Digitalisation, diversification

Northern, Central, Western

~150 TUI

Aircraft,

3rd party flyingOwn, 3rd party committed & non-committedCustomer, knowledge, service & fulfilmentROIC FY17: 85%3

20m customersIntegrated distributionIntegrateddistributionIntegrated distributionGROUP PLATFORMSPortfolio approach

6m customers

3rd party distribution

3rd party distribution

INTEGRATION BENEFITS /

STRATEGY

Own customer end-to-end

Yielding our risk capacity: 26m 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

2

3

4

1This number includes group hotels and 3rdparty concept hotels as at end of Q3 FY18

2As at end of July 2018

3This number relates to Sales & Marketing/ all other

2Merger synergies delivered: Three waves driving earnings, two yet to materialize: Future earnings growth driven by growth investments and digitalisation benefits

STRONG GROWTH TRACK RECORD: MERGER SYNERGIES

FUTURE GROWTH: DIGITALISATION, INVESTMENTSFUTURE GROWTH

FY14

Earnings growth from investmentsEarnings growth fromdigitalisation benefits

FY15

FY16

FY17

FY18eFY19eFY20e

  • •Target extended to 2020: at least 10% underlying EBITA CAGR

  • •Mix of earnings growth changes

    • •Growth frominvestments

    • •Market demand & digitalisation benefits

  • •Less seasonal earnings

1 Underlying EBITA CAGR of 12% since merger / average CAGR of 13% since merger at constant currency

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TUI AG published this content on 09 August 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 09 August 2018 05:49:15 UTC