Acquisition of Hapag-Lloyd Cruises by TUI Cruises 7 February 2020 Delivering on our strategy – growing our integrated business model on both sides MARKETS & Maintain and where possible Markets & Airlines Holiday Experiences 1 extend leading positions AIRLINES in core markets • 21m customers • 4114 Hotels Asset-right expansion, 5 HOLIDAY • Leading market shares • 18 Cruise ships driving returns, benefitting 1 2 20-40% EXPERIENCES from vertical integration • ROIC >1/3 higher than peers6 • Ave. spend per customer 2 €800 p.a. • 70%3 of profit pool Building scale 3 GDN-OTA in new markets to 3 enlarge TUI’s ecosystem • ~30% of profit pool • Investments and cash returns Building scale in the DESTINATION “things to do” market 4 EXPERIENCES and attracting customers to STRONG CUSTOMER BASE DIFFERENTIATED CONTENT enlarge TUI’s ecosystem 1 Company estimates – market defined as traditional sun and beach tour operator market | 2 Based on FY19 Group Revenue divided by 21m Markets & Airlines customers | 3 Excluding impact of 737 MAX | 4 Includes Group hotels and 3rd party concept hotels as at end of FY19 | 5 As at Feb 2020 | 6 H&R FY18 and FY19 ROIC of 14% pre IFRS 16 basis versus Melia FY18 ROIC. Cruise Segment: FY18 and FY19 ROIC pre IFRS 16 basis of 23% versus average of Royal Caribbean Cruises and Carnival Cruises FY18 ROIC. 2 TUI GROUP | Acquisition of Hapag-Lloyd Cruises by TUI Cruises | 7 February 2020 Acquisition of Hapag-Lloyd Cruises by TUI Cruises for €1.2bn – executing our Holiday Experiences strategy: transaction facilitates asset-right growth Acquisition for €1.2bn (50/50 JV) (Including €63m earn-out) • €1.2bn EV = attractive valuation - Hapag-Lloyd Cruises restructured 2 Luxury 3 Expedition 7 Ships - Retaining 50% profit pool • Largely debt financed transaction Europa Bremen Mein Schiff Herz Mein Schiff 4 Europa 2 Hanseatic nature Mein Schiff 1 Mein Schiff 5 • Closing anticipated for summer 2020 Hanseatic inspiration Mein Schiff 2 Mein Schiff 6 Mein Schiff 3 3 TUI GROUP | Acquisition of Hapag-Lloyd Cruises by TUI Cruises | 7 February 2020 Compelling transaction delivers strategic and financial benefits to TUI Group STRATEGIC BENEFITS FINANCIAL BENEFITS TUI Cruises growth gap addressed Value of Hapag-Lloyd Cruises crystallised Hapag-Lloyd Cruises growth - asset right - Backed by synergies - Internationalisation - Retaining 50% of profit pool - Anticipated fleet growth + Leveraging TUI Cruises financial strength Benefit from strategic JV partnership - Debt capacity (well within covenants) - Keep control of brand, product, - Cash generation marketing and sales - RCL shipbuilding know-how and global footprint - No reduction of dividends to TUI Keep powder dry for digital expansion Strengthen TUI balance sheet 4 TUI GROUP | Acquisition of Hapag-Lloyd Cruises by TUI Cruises | 7 February 2020 Impact on TUI Group financials and use of proceeds VALUATION AND NET PROCEEDS (€m) PRO FORMA IMPACT ON FY19 FINANCIALS (€m) Attractive valuation Proceeds support planned growth & digital transformation and strengthen TUI balance sheet 1.200 Rebuild of EBIT through synergies in the near future Deleverage 700 Gross leverage decreases by 0.1x – 0.2x Pro forma1 net cash FY19: ~€80m Enterprise Value Net Proceeds incl. (vs net debt FY19A of ~€910m) Earn-out of €63m 1 Unaudited pro-forma figures, rounded 5 TUI GROUP | Acquisition of Hapag-Lloyd Cruises by TUI Cruises | 7 February 2020 Q&A APPENDIX Hapag-Lloyd Cruises - Summary Key figures FY19 KEY KPIs 641 Turnover (€m) 305 579 594 615 536 Underlying EBITA (€m) 43 332 348 355 349 352 78.9 EBITDA FY19 / FY20e (€m) 62 / 90 76.2 76.8 76.7 78.3 Passengers (k) 25 Fleet Size2 5 FY15 FY16 FY17 FY18 FY19 Total Berths3 1,318 Pax Days (k's) Av Daily Rate € Occupancy % HAPAG-LLOYD CRUISES FLEET Europa Europa 2 Bremen Hanseatic Hanseatic Hanseatic nature inspiration spirit 4081 5161 164 230 230 230 BERTHS BERTHS BERTHS BERTHS BERTHS BERTHS Wholly owned Wholly owned Wholly owned Wholly owned Wholly owned Wholly owned OPERATING MODEL OPERATING MODEL OPERATING MODEL OPERATING MODEL OPERATING MODEL OPERATING MODEL 1999 2013 1990 New build New build New build CONSTRUCTION CONSTRUCTION CONSTRUCTION May 2019 October 2019 2021 CONSTRUCTION CONSTRUCTION CONSTRUCTION April 2021 EXIT Fleet and pipeline as at December 2019 | 1 Additional sofa-bed in most of the suites (usable for persons up to the age of 6, 10, 12 or 15 years) | 2 Fleet count as at December 2019 | 3 Static count as at 30 September 2019 8 TUI GROUP | Acquisition of Hapag-Lloyd Cruises by TUI Cruises | 7 February 2020 ANALYST AND INVESTOR ENQUIRIES Mathias Kiep, Group Director Investor Relations and Corporate Finance Tel: +44 (0)1293 645 925 Contact +49 (0)511 566 1425 Nicola Gehrt, Director, Head of Group Investor Relations Tel: +49 (0)511 566 1435 Contacts for Analysts and Investors in UK, Ireland and Americas Hazel Chung, Senior Investor Relations Manager Tel: +44 (0)1293 645 823 Corvin Martens, Senior Investor Relations Manager Tel: +49 (0)170 566 2321 Contacts for Analysts and Investors in Continental Europe, Middle East and Asia Ina Klose, Senior Investor Relations Manager Tel: +49 (0)511 566 1318 Jessica Blinne, Junior Investor Relations Manager Tel: +49 (0)511 566 1442.