Introduction to TUI's Cruise Business 9 MAY 2018
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Introduction to TUI‘s cruise business 9 MAY 2018 Mein Schiff 6 INTRODUCTION FRITZ JOUSSEN 2 TUI GROUP | Capital Markets Day | 9 May 2018 TUI-Red 239.0.0 Functional • Always use TUITypeLight Cruises – an important pillar of our integrated and product-focussed strategy New TUI-Green • Font size14pt 170.215.0 • Line spacing 6 pt • titles in TUI-Dark TUI-Yellow Blue SALES & MARKETING - 41% EBITA HOLIDAY EXPERIENCES - 59% EBITA CRUISES ESSENTIAL PART OF 255.225.0 Digitalisation, diversification Growth, diversification INTEGRATED STRATEGY Conventions • Bullet points & standard text in 20m customers Portfolio approach TUI-Dark Blue • ~25% of Group EBITA ~150 TUI Aircraft, 1 • Unique product offering, Owned / managed / JV 383 3rd party flying Northern Integrated ROIC FY17: 13% Hotels 3rd party differentiates TUI in distribution: distribution distribution “line of defence” vs OTAs Own, 3rd party • Market leading position and committed & 162 high brand recognition New TUI-Grey 25% New TUI-Blue non-committed Owned / JV Ships Central Achromatic 112.203.244 Integrated ROIC FY17: 20% 3rd party • TUI Cruises with 40% of repeat 220.220.220 distribution distribution Customer bookings in 2017 New TUI-Blue 50% service & New TUI-Grey 194.230.250 fulfilment 115 • Supports double diversification: 115.115.115 Western Owned / JV Destinations Cruises as “flexible” destination Integrated ROIC FY17: 24% 3rd party TUI-Dark Blue ROIC FY17: 85%3 distribution distribution TUI-Black 9.42.94 0.0.0 Primary colours Primary GROUP PLATFORMS TUI-White 255.255.255 1 This number includes group hotels and 3rd party concept hotels as at end of H1 FY18 2 As at end of May 2018 3 This number relates to Sales & Marketing/ all other 3 TUI GROUP | Capital Markets Day | 9 May 2018 TUI-Red 239.0.0 Functional • Always use TUITypeLight TUI’s cruise business with distinct brand and tailored product offering New TUI-Green • Font size14pt 170.215.0 • Line spacing 6 pt • titles in TUI-Dark TUI-Yellow 255.225.0 Blue BRAND / OWNERSHIP MARKET SEGMENT PRODUCT STRATEGY Conventions • Bullet points & standard text in TUI-Dark Blue Off-balance: JV / 6 ships³ • Yield product, distinct • Inventor of and market • Tailored to German speaking market segment leader in German premium customer demand • Capture market growth cruise segment • Premium all-inclusive On balance / 6 ships³ • Tailored to UK customer demand • Yield product, distinct New TUI-Blue • UK market leader in flycruise New TUI-Grey 25% Achromatic 112.203.244 • Ownership of end to end journey market segment 220.220.220 • Mid-premium cruise tailored to UK customer • Product upgrade New TUI-Blue 50% segment • All-inclusive1 • Capture market growth New TUI-Grey 194.230.250 115.115.115 On balance / 4 ships³ • Best cruise ships in the world² TUI-Dark Blue • Inventor of cruise shipping • 5 star plus luxury cruise TUI-Black 9.42.94 • Luxury pricing 0.0.0 • Market leader in German offering Primary colours Primary • Internationalisation TUI-White luxury & expedition segment • Exclusive expedition routes • Expedition growth 255.255.255 1 from summer 2019 onwards; ² according to Berlitz Cruise Guide; ³ Fleet as of May 2018 4 TUI GROUP | Capital Markets Day | 9 May 2018 TUI-Red 239.0.0 Functional • Always use TUITypeLight Hapag-Lloyd Cruises expedition growth: plan to order new ship New TUI-Green • Font size14pt Green light for a 3rd expedition 170.215.0 • Line spacing 6 pt cruise ship; Hapag-Lloyd • titles in TUI-Dark KEY FACTS Cruises will shortly launch the TUI-Yellow BRAND / OWNERSHIP 255.225.0 Blue planning / negotiation for a Conventions • Bullet points & further Hanseatic standard text in • Hapag-Lloyd Cruises plans to take delivery of HANSEATIC new build 3 in TUI-Dark Blue spring / early summer 2021 • Participate in strong market growth in the expedition & experience segment • Strengthening position, improve quality leadership within Germany, Austria and Switzerland & internationalise product • Ship will be evolution of the first two expedition new builds delivered in 2019 New TUI-Blue • 230 lower berths New TUI-Grey 25% Achromatic 112.203.244 220.220.220 • Similar financing as other expedition ships: 80% funded by debt capital / New TUI-Blue 50% 20% equity contribution – part of TUI’s CAPEX plan New TUI-Grey 194.230.250 115.115.115 TUI-Dark Blue TUI-Black 9.42.94 0.0.0 Primary colours Primary TUI-White 255.255.255 5 TUI GROUP | Capital Markets Day | 9 May 2018 TUI-Red 239.0.0 Functional • Always use TUITypeLight Hapag-Lloyd HANSEATIC new build 3: improved customer experience with a modern New TUI-Green • Font size14pt and efficient expedition fleet 170.215.0 • Line spacing 6 pt • titles in TUI-Dark TUI-Yellow Blue 255.225.0 Conventions • Bullet points & standard text in TUI-Dark Blue New TUI-Blue New TUI-Grey 25% Achromatic 112.203.244 220.220.220 New TUI-Blue 50% New TUI-Grey Marina Extendible glass-floored balconies 194.230.250 115.115.115 TUI-Dark Blue TUI-Black 9.42.94 0.0.0 Primary colours Primary TUI-White The HanseAtrium, a The Ocean Academy 255.255.255 multifunctional allows you to lounge with state-of- experience science Panoramic Cabin the-art technology however you desire Deck track at the bow Grand Suite 6 TUI GROUP | Capital Markets Day | 9 May 2018 TUI-Red 239.0.0 Functional • Always use TUITypeLight TUI’s cruise strategy proves to be successful: Strong growing business contributing ~25% of New TUI-Green • Font size14pt Group EBITA today 170.215.0 • Line spacing 6 pt • titles in TUI-Dark TUI-Yellow Blue 255.225.0 BRAND / OWNERSHIP STRONG AND PROFITABLE GROWTH KEY HIGHLIGHTS Conventions • Bullet points & standard text in TUI-Dark Blue Off-balance: JV / ROIC: 16% TUI Cruises² • TUI’s cruise business benefiting from 256 Marella Cruises continued strong market demand Hapag-Lloyd Cruises 191 shortage of cruise ship supply % of Group profit 136 arrival of new ship capacity ordered New TUI-Blue On balance / ROIC: 14% 100 several years ago “at the right time” New TUI-Grey 25% Achromatic 220.220.220 112.203.244 811 TUI Cruises with youngest fleet in 87 the market (low fuel consumption 1 61 New TUI-Blue 50% 10 68 and reduced emission levels) New TUI-Grey 194.230.250 115.115.115 31 13 30 33 • Participate in market growth through TUI-Dark Blue On balance / ROIC: 10% -21 additional capacity for TUI Cruises TUI-Black 9.42.94 0.0.0 FY14 FY15 FY16 FY17 • >50% dividend conversion rate from Primary colours Primary TUI-White 1% 8% 19% 23% TUI Cruises JV³ 255.255.255 • 20% Cruise segment ROIC² Note: Chart shows underlying EBITA in €m and % of TUI Group EBITA contribution; 1 Marella Cruises not included; 2 TUI Cruises JV (50%) is consolidated at equity; 3 Calculation: Dividends received by TUI / TUI‘s share of EAT 7 TUI GROUP | Capital Markets Day | 9 May 2018 TUI-Red 239.0.0 Functional • Always use TUITypeLight All three TUI cruise brands with strong financial track record New TUI-Green • Font size14pt 170.215.0 • Line spacing 6 pt • titles in TUI-Dark TUI-Yellow Blue 255.225.0 Conventions • Bullet points & standard text in TUI-Dark Blue 4.5 2.7 3.5 2.1 2.1 579 594 2.0 536 2.7 401 450 115 116 121 131 348 355 349 1.7 171 169 171 173 99,9 99.0 100,6 101,7 68.2 76.2 76.8 76.7 New TUI-Blue New TUI-Grey 25% 102,3 102,7 102,6 101,9 Achromatic 112.203.244 220.220.220 New TUI-Blue 50% FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 New TUI-Grey 194.230.250 Pax Days (m's) Av Daily Rate € Occupancy % Pax Days (m's) Av Daily Rate £ Occupancy % Pax Days(k's) Av Daily Rate € Occupancy % 115.115.115 TUI-Dark Blue TUI-Black 9.42.94 0.0.0 • ~30% capacity growth in 2017 for TUI Cruises and Marella Cruises at stable occupancy and increasing rates Primary colours Primary TUI-White • Hapag-Lloyd Cruises rate increases at constant occupancy 255.255.255 8 TUI GROUP | Capital Markets Day | 9 May 2018 CRUISE MARKET DYNAMICS FRITZ JOUSSEN 9 TUI GROUP | Capital Markets Day | 9 May 2018 TUI-Red 239.0.0 Functional • Always use TUITypeLight TUI participates in the highly attractive, ring-fenced European cruise market New TUI-Green • Font size14pt 170.215.0 • Line spacing 6 pt • titles in TUI-Dark GLOBAL OCEAN CRUISE PASSENGERS BY ORIGIN1 EUROPE AS RING-FENCED MARKET TUI-Yellow Blue 255.225.0 Conventions • Bullet points & standard text in • #2 global market after North America TUI-Dark Blue North America Europe #1 #2 • Highly attractive growth prospects ~12m passengers ~7m passengers • Germany is the largest European market, Asia followed by UK #3 • Trips are the experience versus other ~3m passengers markets where the cruise ship is the New TUI-Blue Market (PAX) 2.0m 1.9m New TUI-Grey 25% Achromatic 112.203.244 experience 220.220.220 TUI Cruises / Marella 0.5m 0.3m • Hence, certain cruise ship specifications Market-share 25% 15% New TUI-Blue 50% Other Australia required to meet customer demand for New TUI-Grey 194.230.250 115.115.115 #4 distinctive „European style“ cruising ~1m passengers TUI-Dark Blue ~3m passengers TUI-Black Global cruise market 9.42.94 0.0.0 Primary colours Primary ~26 million passengers TUI-White 255.255.255 1 Sources: CLIA, Statistics & markets Europe 2016, CLIA Asia Cruise Trends 2016, Cruise Market Watch 10 TUI GROUP | Capital Markets Day | 9 May 2018 TUI-Red 239.0.0 Functional • Always use TUITypeLight Global cruise market demand remains strong with 6% CAGR projected growth New TUI-Green • Font size14pt until 2023 (+11m PAX)… 170.215.0 • Line spacing 6 pt • titles in TUI-Dark TUI-Yellow 255.225.0 Blue EUROPEAN MARKETS GROWING FAST BUT STILL UNDERPENETRATED MARKET DYNAMICS Conventions • Bullet points & standard text in 1 TUI-Dark Blue Penetration Rate 2016 & 2023 ca.