TUI Group Investor Presentation Commerzbank, German Investment Seminar New York, 11 12 January 2010 TUI AG Investor Relations Seite 1
Agenda I. Group overview II. Financials & Financing update III. Outlook TUI AG Investor Relations Seite 2
TUI current group structure Tourism Tour operator Hotels Cruises At equity 43.33% TUI AG Investor Relations Seite 3
Tourism TUI Travel TUI AG Investor Relations Seite 4
Tourism TUI Travel overview Merger of TUI Tourism activities with First Choice Holidays businesses in 2007 Europe s leading international leisure travel company Over 30 m customers from over 25 source markets Over 135 aircraft Circa 3,500 retail shops in Continental Europe, UK & Ireland 50,000 colleagues Widest range of leisure travel experiences available TUI AG Investor Relations Seite 5
Tourism TUI Travel business segments Mainstream Sector Specialist & Emerging Markets Sector Central, Northern and Western Europe 22 m customers Classic tour operator business / market leadership 40 specialist tour operators worldwide Around 1 m customers Exclusive products / strong local brands Activity Sector 57 business units in 8 countries Lifestyle travel products / market-leading brands Accommodation & Destinations Sector Incoming agencies in 48 countries Online portals in Europe and Asia Destination services / online accommodation TUI AG Investor Relations Seite 6
Tourism TUI Travel Building blocks of growth Short to medium term improvement Sustainable long-term growth Cost Synergies Growing Mainstream Margins Delivering Growth Delivering 200m of synergies Improving margins on 7bn of under performing revenue Mainstream Differentiated content Long haul opportunity Specialist organic growth Emerging markets Acquisitions Clear strategy for growth TUI AG Investor Relations Seite 7
Tourism TUI Travel Integration synergy phasing m FY 07/08 FY 08/09 FY 09/10 FY 10/11 Total P&L benefit UK Mainstream 29 93 140 160 160 Group & Global 6 27 40 40 40 Total 35 120 180 200 200 y-o-y incremental benefit +35 +85 +60 +20 +200 TUI AG Investor Relations Seite 8
Tourism TUI Hotels & Resorts TUI AG Investor Relations Seite 9
Tourism TUI Hotels & Resorts at a glance No 1 leisure hotelier in Europe with 243 hotels and approx. 154,000 beds Most hotel companies with local partners Focus on four star category (64%) High occupancy rates through access to TUI Travel customers and direct distribution TUI AG Investor Relations Seite 10
Tourism TUI Hotels & Resorts overview Group-controlled hotel beds by regions Other 7% Caribbean 21% Total: 153,537 Western Mediterranean 32% North Africa/ Egypt 22% 5 Stars 24% Hotels by categories 3 Stars 12% Eastern Mediterranean 18% Total: 243 4 Stars 64% TUI AG Investor Relations Seite 11
Tourism TUI Cruises TUI AG Investor Relations Seite 12
Tourism TUI Cruises Hapag-Lloyd Cruises operates 4 ships in the German premium and luxury segment EUROPA, the flagship of the fleet, is for the tenth time in succession the only 5 stars plus cruise ship in the world* * rated by Berlitz Cruise Guide Joint Venture (50/50) with Royal Caribbean Cruises Ltd. Christening of the first ship Mein Schiff and first cruise in May 2009 TUI AG Investor Relations Seite 13
Container shipping Hapag-Lloyd participation TUI AG Investor Relations Seite 14
Container shipping Hapag-Lloyd at a glance TUI AG Albert Ballin KG Leading global container carrier 43 1/3% 56 2/3% BidCo 100% 113 container vessels with a total capacity of 465,200 TEU* Revenues in 9M 2009: 3.3 bn Volume in 9M 2009: 3.5 m TEU *Fleet Status: 30 September 2009 Hapag-Lloyd Sale of majority stake of Hapag-Lloyd to Albert Ballin in March 2009 Remaining participation of 43.3% consolidated at equity from Q2 2009 onwards TUI AG Investor Relations Seite 15
Container shipping Freight rates and transport volumes Share of volume for 9M 2009 (m TEU) Trans-Pacific 21% Atlantic 23% Latin America 19% 20% 10% 0% Development of freight rates & volumes since 2007 % change y-o-y Freight rate Volume Australasia 15% -10% -20% Far East 23% -30% Q1 07 Q2 07 Q3 07 Q4 07 Q108 Q208 Q308 Q408 Q1 09 Q2 09 Q3 09 TUI AG Investor Relations Seite 16
Container shipping Hapag-Lloyd cost saving programme Overview of cost saving targets per cost category by 2011 (US$ m) 90 1,100 504 121 385 Cargo-related Costs Equipment Ship System Overhead Total Source: Hapag-Lloyd AG; Roland Berger TUI AG Investor Relations Seite 17
Agenda I. Group overview II. Financials & Financing update III. Outlook TUI AG Investor Relations Seite 18
P&L highlights short financial year (SFY) 2009 in bn in m in m 16 15.2 700 665 657 500 14 12 13.1 600 500 400 401 10 400 300 8 6 300 235 200 4 2 200 100 178 100 45 0 9M 08 9M 09 Turnover 0 0 9M 08 9M 09 9M 08 9M 09 9M 08 9M 09 Underl. EBITA Rep. EBITA Group profit TUI AG Investor Relations Seite 19
Turnover and Earnings SFY 2009 m 9M 2009 9M 2008 % PF 2008/09 PF 2007/08 % Tourism Turnover 13,054.3 15,136.2-13.8 16,503.9 18,695.1-11.7 TUI Travel 12,636.1 14,690.6-14.0 15,960.6 18,128.4-12.0 TUI Hotels & Resorts 276.2 290.1-4.8 356.8 366.2-2.6 Cruises 142.0 155.5-8.7 186.5 200.5-7.0 Underlying EBITA 695.6 664.1 +4.7 652.0 632.3 +3.1 TUI Travel 571.2 520.0 +9.8 504.9 459.0 +10.0 TUI Hotels & Resorts 123.1 132.9-7.4 150.2 157.6-4.7 Cruises 1.3 11.2-88.4-3.1 15.7 n.m. Central operations Turnover 49.3 64.8-23.9 70.3 116.2-39.5 Underlying EBITA -39.0 0.4 n.m. -93.8-59.8-56.9 Continuing operations Turnover 13,103.6 15,201.0-13.8 16,574.2 18,811.3-11.9 Underlying EBITA 656.6 664.5-1.2 558.2 572.5-2.5 TUI AG Investor Relations Seite 20
Key figures of the TUI Group SFY 2009 (P&L) m 9M 2009 9M 2008 EBITA 235.4 177.7 Impairment of goodwill -8.9-76.1 EBIT 226.5 101.6 Interest result -502.0-214.1 thereof interest result (ex. one-off Hapag-Lloyd) -148.1-214.1 Equity result container shipping -214.2 0.0 EBT -489.7-112.5 Income taxes 46.2-72.8 Result from continuing operations -443.5-185.3 Result from discontinued operations 844.2 230.2 Group profit 400.7 44.9 Minority interests 67.4 11.2 Group profit after minorities 333.3 33.7 Number of shares (average) m 251.4 251.0 EPS 1.25 0.07 Incl. charges for the interest effects on the Hapag-Lloyd loans totaling 354 m resulting from a comparison between current appropriate interest rates and the interest rates agreed in March 2009 Equity result Hapag-Lloyd for Q2 and Q3 (43.3%) Decrease mainly attributable to a revaluation of tax risks and the use of tax losses carried forward by TUI Travel Position comprises book gain on disposal of Hapag-Lloyd ( 1,135 m), Hapag-Lloyd after tax result of Q1 2009 and the result from Magic Life ( -26 m operational losses and 44 m for write down of assets) TUI AG Investor Relations Seite 21
Balance sheet 30 Sep 2009 Net financial debt position bn 09/2009 06/2009 03/2009 12/2008 09/2008 Financial liabilities 3.71 4.55 5.00 4.98 5.15 non-current 3.17 3.43 4.03 3.97 4.29 current 0.54 1.12 0.97 1.01 0.87 Cash 1.45 1.92 2.42 2.05 2.81 Net debt 2.26 2.63 2.58 2.93 2.34 Net debt disc. operations 0.07-1.15 0.45 Net debt incl. disc. operations 2.33 2.63 2.58 4.08 2.79 Considerable reduction in net financial debt position as a result of the disposal of Hapag-Lloyd Reduction in gross debt due to disposal of Hapag-Lloyd, as well as the redemption of the 400 m bond and further early redemption of 216 m of private placements (initial maturities: 12/2009 and 04/2010) of TUI AG TUI AG Investor Relations Seite 22
Recent financing transactions TUI TUI Travel Successful issue of convertible bonds amounting to 218 m Maturity date: 17 November 2014 Extension of debt maturity profile Successful issue of convertible bonds at amounting to GBP350 m Raising of) additional bank facilities of GBP140 m Early repayment of remaining shareholder loan initiated Hapag-Lloyd Approval for state guaranteed loans in the amount of 1.2 bn Shareholder contribution for Hapag-Lloyd support of 923 m (equity contribution) Restructuring of TUI loans Hapag-Lloyd cost saving programme of approx. US$1.1 bn installed TUI AG Investor Relations Seite 23
Revised repayment schedule for shareholder loan to TUI Travel Following the issue of the convertible bonds, the new repayment schedule is as follows: 100 m 30 September 2009 250 m 01 April 2010 509 m 01 December 2010 at the latest (mandatory prepayment obligation) 160 m 30 April 2011 1,019 m Logic of the revised repayment schedule: Perfect fit with TUI AG s maturity profile Comfortable cash reserves for TUI Travel for the upcoming winter seasons Comfortable refinancing position for TUI AG and TUI Travel TUI AG Investor Relations Seite 24
Hapag-Lloyd: Capital and financing measures New Hapag-Lloyd Financing 1.95 bn Shareholder contribution 0.75 bn State guaranteed bank loans 1.2 bn Hapag-Lloyd cost saving programme US$1.1 bn TUI AG Albert Ballin KG Secured by state guarantees Unsecured 43 1/3% 56 2/3% 90% 10% The presented financing concept and the implemented cost saving programme by Hapag-Lloyd were preconditions for the state guarantees granted by the Federal Republic of Germany and the city of Hamburg. TUI AG Investor Relations Seite 25
Background on state guarantees to Hapag-Lloyd Financial impact of state guarantees Hapag-Lloyd is principally not allowed to amortise any debt as long as the guarantees are in place Current TUI loans have to be restructured Size of the state guarantees All committed financial obligations are also covered by the facility The facility includes potential financing for the order book of container ships (approx. US$0.6 bn) Likelihood of drawings If or to what extent Hapag-Lloyd will use the state-backed loans depends on the operational development going forward Strongly improved cash situation due to contribution from shareholders Low capex commitments going forward Bottoming-out of freight rates since July 2009 TUI AG Investor Relations Seite 26
Capital employed in shipping (status December 2009) -in m - Amount Comment 43 1/3% Hapag-Lloyd stake 910 Fresh equity 124 Debt equity swap 153 Equity stake in Hapag-Lloyd 1,187 03/09 Timing 2009 Timing 04/10 Put option in 2012 Debt hybrid swap I Debt hybrid swap II 350 350 Convertible into equity from 03/11 Interest step-up after state guarantees New hybrid structure (ex CTA) 215 25 m repayment guaranteed by Hamburg Subordinated loan 227 Structure acc. to guarantee Vendor loan 180 Maturity 03/14 Loans incl. hybrids 1,322 Total 2,509 RCF 200 Repayment guaranteed by consortium 03/10 Real estate Hapag-Lloyd 150 Sale & lease back H1/10 TUI AG Investor Relations Seite 27
Pro forma financing TUI AG assuming no repayment from HL until 2012 and excluding operational effects -in m - 1800 1600 1400 1200 1000 800 600 400 200 Purchase Cash TTP TUI AG shares 30.09. 494 91 Conv. bond 218 HL support 124 HL Real est. + RCF 150 200 SHL TTP 250 234** SHL TTP 509 150** 550 Repaym. City of HH 25 SHL TTP 160 625 CASH IN Disposal proceeds / repayments of capital employed in HL (approx. 2.5bn) Asset streamlining programme (approx. 0.5bn) CASH OUT Repayment of bonds ( 1.1bn in H2/2012) 0 2008/09 2009/10 2010/11 * Early redemption of private placement of 83 m due in 12/09 and of 33 m due in 04/10 ** Split private placements/loans: 184 m (04/10); 50 m (09/10); 150 m (12/10) TUI AG Investor Relations Seite 28 Private placements and loans Cash Other Senior notes
Additional options for liquidity generation Asset streamlining Financing for owned assets (cruise ships, real estate and hotels) Disposal of non-core assets (e.g. real estate and hotels) Disposal proceeds / repayments of capital employed in Hapag-Lloyd Diversified financing instruments (loans, hybrids, equity) offer high flexibility to realise employed values in Hapag-Lloyd, as soon as there are signs of improvement in the shipping industry TUI has sufficient sources to meet future financial obligations TUI AG Investor Relations Seite 29
Agenda I. Group overview II. Financials & Financing update III. Outlook TUI AG Investor Relations Seite 30
Tourism Trading update Current Trading 1 Winter 2009/10 ASP² Sales² Customers² y-o-y variation% Short-haul +6-20 -25 Medium-haul +7-11 -18 Long-haul +9-14 -21 UK +10-8 -16 Nordic +3-13 -15 Northern Region +6-13 -18 Germany Flat -15-15 Austria -2-27 -26 Switzerland -6-11 -5 Poland -7-24 -18 Central Europe Flat -15-15 France -11-19 -9 Belgium -4-3 +1 Netherlands +3-10 -12 Western Europe -8-14 -7 Specialist -13-23 -11 Activity NA -19 NA A&D 4-8 +20 +30 ¹ These statistics are up to 22 November 2009 ² These statistics relate to all customers whether risk or non-risk TUI AG Investor Relations Seite 31 ³ These statistics include all risk capacity programmes 4 These statistics refer to B2B Online business only and sales refer to total transaction value (TTV) Key markets trading in the last weeks ahead of cumulative position & capacity reductions
Outlook 2009/10 Expectations for underlying earnings (EBITA) Travel Hotels & Resorts Cruises Synergy benefits from integration Risk: Weakness of GBP, potential rise in unemployment Stable earnings expected Slight increase in bed nights, despite stable capacities Higher occupancy rates estimated Risk: Lower demand from tour operator customers Prior year earnings expected to be reproduced Earnings expected to match last year s level Shipping Recovery tendencies in the container shipping business are expected to improve profit contributions. However, earnings situation still negative. TUI AG Investor Relations Seite 32
Group Strategy Maximising value of Hapag-Lloyd investment, closely monitoring options to exit the business Pursuing restrictive cash and working capital management Optimising the structure within the tourism segments Realising the integration and synergy benefits of 200 m sterling per annum by financial year 2010/11 in TUI Travel Expanding the tour operator business in growth markets like Russia and the Ukraine Focusing on a high-yield, differentiated hotel portfolio in TUI Hotel & Resorts Expanding the market share in the German-speaking volume market for cruises TUI AG Investor Relations Seite 33
IV. Appendix A. Pro Forma Figures (FY 30 Sep) Turnover and Earnings FY 2008/2009 Turnover and Earnings FY 2007/2008 P&L 2007/2008 and 2008/2009 B. Financial calendar TUI AG Investor Relations Seite 34
A. Turnover and Earnings Pro Forma Financial year 2008/2009 (FY 30 Sep) m Q1 08/09 Q2 08/09 Q3 08/09 Q4 08/09 FY 08/09 Tourism Turnover 3,449.6 3,064.2 4,143.3 5,846.8 16,503.9 TUI Travel 3,324.5 2,914.4 4,007.9 5,713.8 15,960.6 TUI Hotels & Resorts 80.6 91.8 90.8 93.6 356.8 Cruises 44.5 58.0 44.6 39.4 186.5 Underlying EBITA -43.6-263.2 113.0 845.8 652.0 TUI Travel -66.3-288.7 97.5 762.4 504.9 TUI Hotels & Resorts 27.1 25.6 19.0 78.5 150.2 Cruises -4.4-0.1-3.5 4.9-3.1 Consolidation - - - - - Central operations Turnover 21.0 14.7 16.9 17.7 70.3 Underlying EBITA -54.8-48.1 26.3-17.2-93.8 Continuing operations Turnover 3,470.6 3,078.9 4,160.2 5,864.5 16,574.2 Underlying EBITA -98.4-311.3 139.3 828.6 558.2 TUI AG Investor Relations Seite 35
A. Turnover and Earnings Pro Forma Financial year 2007/2008 (FY 30 Sep) m Q1 07/08 Q2 07/08 Q3 07/08 Q4 07/08 FY 07/08 Tourism Turnover 3,558.9 3,614.8 4,706.1 6,815.3 18,695.1 TUI Travel 3,437.8 3,465.7 4,575.5 6,649.4 18,128.4 TUI Hotels & Resorts 76.1 91.1 84.1 114.9 366.2 Cruises 45.0 58.0 46.5 51.0 200.5 Underlying EBITA -31.8-206.7 90.0 780.8 632.3 TUI Travel -61.0-239.7 72.4 687.3 459.0 TUI Hotels & Resorts 24.7 27.1 17.6 88.2 157.6 Cruises 4.5 5.9 0.0 5.3 15.7 Consolidation - - - - - Central operations Turnover 51.4 13.2 18.6 33.0 116.2 Underlying EBITA -60.2 6.9 13.4-19.9-59.8 Continuing operations Turnover 3,610.3 3,628.0 4,724.7 6,848.3 18,811.3 Underlying EBITA -92.0-199.8 103.4 760.9 572.5 TUI AG Investor Relations Seite 36
A. Pro Forma P&L 2007/2008 and 2008/2009 m PF 2008/09 PF 2007/08 EBITA 132.3 4.2 Impairment of goodwill -40.0-76.1 EBIT 92.3-71.9 Interest result* -576.8-282.2 Equity result container shipping -214.2 - EBT -698.7-354.1 Income taxes 76.2-52.7 Result from continuing operations -622.5-406.9 Result from discontinued operations 836.4 256.2 Group profit 213.9-150.7 Minority interests 35.7 26.2 Group profit after minorities 178.2-176.9 Number of shares (average) m 251.4 251.0 EPS 0.71-0.70 * incl. result from valuation loans to Hapag-Lloyd ( -353.9 m) TUI AG Investor Relations Seite 37
B. Financial calendar 15 February 2010* First Quarter 2009/10 17 February 2010 Annual General Meeting 12 May 2010* Second Quarter 2009/10 11 August 2010* Third Quarter 2009/10 *scheduled TUI Investor Relations - E-Mail: investor.relations@tui.com - Phone: +49-511-566-1425 TUI AG Investor Relations Seite 38
Future-related 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 assumptions involve risks and uncertainties which may give rise to situations in which the actual results differ substantially from the expected ones. The potential reasons for such differences include market fluctuations, the development of world market fluctuations, the development of world market commodity prices, the development of exchange rates or fundamental changes in the economic environment. TUI does not intend or assume any obligation to update any forward-looking statement to reflect events or circumstances after the date of these materials. TUI AG Investor Relations Seite 39