TUI Group Investor Presentation August / September / October 2018 TUI-Red 239.0.0 Functional • Always use What is TUI Group? TUITypeLight New TUI-Green • Font size14pt Hotel & Resorts, Cruises and Destination Experiences holiday experiences “product” 170.215.0 • Line spacing 6 pt provider with own distribution and fulfilment • titles in TUI-Dark TUI-Yellow Blue 255.225.0 Conventions • Bullet points & standard text in KEY HIGHLIGHTS HOLIDAY EXPERIENCES TUI-Dark Blue €357m Leading leisure hotel and club brands around EBITA the world; investments, operations, ownership 20m customers €256m €18.5bn revenues EBITA Leading German & UK cruise brands New TUI-Blue New TUI-Grey 25% Achromatic 112.203.244 220.220.220 €35m (1) Tours, activities and service provider in New TUI-Blue 50% €1.1bn EBITA EBITA destination New TUI-Grey 194.230.250 115.115.115 TUI-Dark Blue % 23.6% ROIC SALES & MARKETING TUI-Black 9.42.94 0.0.0 Primary colours Primary 10% earnings growth €527m Market leaders in packaged distribution, fulfilment, TUI-White % EBITA 255.255.255 strong market and customer knowledge (1) Underlying; Note: According to company guidance earnings growth is at constant currency 2 TUI GROUP | Investor Presentation | October 2018 TUI-Red 239.0.0 Functional • Always use TUITypeLight Our business model: Product-focused holiday provider with 59% Holiday Experience New TUI-Green • Font size14pt earnings 170.215.0 • Line spacing 6 pt • titles in TUI-Dark TUI-Yellow Blue SALES & MARKETING– 41% EBITA HOLIDAY EXPERIENCES – 59% EBITA INTEGRATION BENEFITS / 255.225.0 Digitalisation, diversification Growth, diversification STRATEGY Conventions • Bullet points & standard text in Northern, Central, Western 20m customers Portfolio approach TUI-Dark Blue 1 Own customer end-to-end ~150 TUI Yielding our risk capacity: 20m Aircraft, 3791 2 Owned / managed / JV customers to optimise own 3rd party flying Integrated ROIC FY17: 13% Hotels 3rd party distribution distribution hotels/ cruises demand Unique TUI holiday experiences Own, 3rd party 3 162 committed & and fulfillment differentiating TUI New TUI-Blue Owned / JV Ships New TUI-Grey 25% Achromatic 112.203.244 non-committed Integrated ROIC FY17: 20% 3rd party from competition 220.220.220 distribution distribution 4 Double diversification across New TUI-Blue 50% Customer, Markets and Holiday Experiences New TUI-Grey 194.230.250 knowledge, 115 115.115.115 service & Owned / JV Destinations Integrated 3rd party fulfilment ROIC FY17: 24% TUI-Dark Blue distribution distribution TUI-Black 9.42.94 ROIC FY17: 85%3 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 Q3 FY18 2 As at end of July 2018 3 This number relates to Sales & Marketing/ all other 3 TUI GROUP | Investor Presentation | October 2018 TUI-Red 239.0.0 Functional • Always use What does it mean? Integrated model brings strong strategic benefits in the wider market TUITypeLight New TUI-Green • Font size14pt context 170.215.0 • Line spacing 6 pt • titles in TUI-Dark INTEGRATION BENEFITS / TUI STRATEGY WIDER MARKET CONTEXT TUI-Yellow Blue 255.225.0 Conventions • Bullet points & 1 standard text in Own customer end-to-end Enables us to personalise our customers’ holiday TUI-Dark Blue experiences, basis for targeted marketing 2 Yielding our own risk capacity: 20m customers to Reduces reliance on third party distribution and allows optimise own hotels / cruises demand yielding of our products New TUI-Blue New TUI-Grey 25% Achromatic 112.203.244 3 Unique TUI holiday experiences and fulfilment D ifferentiates us from the OTAs, other pure-play 220.220.220 differentiating TUI from competition distributors and the airlines, drives customer New TUI-Blue 50% New TUI-Grey 194.230.250 satisfaction and retention 115.115.115 TUI-Dark Blue 4 Double diversification across Sales & Marketing and Diversified across source markets and destinations - TUI-Black 9.42.94 Holiday Experiences helps to mitigate the impact of cyclicality in individual 0.0.0 Primary colours Primary markets and geopolitical shocks TUI-White 255.255.255 4 TUI GROUP | Investor Presentation | October 2018 TUI-Red 239.0.0 Functional • Always use TUITypeLight TUI has moved on and developed into an integrated provider of holiday experiences New TUI-Green • Font size14pt 170.215.0 • Line spacing 6 pt • titles in TUI-Dark TUI-Yellow Blue OTAs 255.225.0 “Depth of offering“ Conventions • Bullet points & standard text in • Agent model, trading margin “Best and unique product, TUI-Dark Blue individualized offering“ • No/ limited risk capacity • Dynamic packaging • Increasingly dynamic packaging • Own hotels, flights and cruises: Tour operators ̶ Yielding of risk capacities “Packaged holidays“ ̶ Own distribution & fulfillment • Packaging of hotel & flight, fulfillment ̶ Double diversification New TUI-Grey 25% New TUI-Blue Airlines • Trading margin leveraged by Achromatic 112.203.244 220.220.220 “Ancillary packages“ ̶ Flight risk capacity New TUI-Blue 50% • Airline as core business ̶ Hotel commitments1 New TUI-Grey 194.230.250 • Packages as add-on and to de-risk flight capacity 115.115.115 TUI-Dark Blue • Trading margin on hotels TUI-Black 9.42.94 • Increasingly direct hotel sourcing 0.0.0 Primary colours Primary Potential new entrants TUI-White 255.255.255 • Global tech companies 5 TUI GROUP | Investor Presentation | October 2018 TUI-Red 239.0.0 Functional • Always use TUITypeLight What do we offer to our investors – 3 reasons to be invested / to invest New TUI-Green • Font size14pt 170.215.0 • Line spacing 6 pt • titles in TUI-Dark TUI-Yellow Blue • Global leading tourism group 255.225.0 • Holiday product provider with own distribution Conventions • Bullet points & STRONG • Own customer end to end: Sales & Marketing, Hotels, Cruises, Destination Experiences standard text in • Individualization and targeted marketing TUI-Dark Blue STRATEGIC POSITION • Yielding of own products • Risk mitigation by double diversification • Global leisure travel market growing above GDP • Strong track record driven by merger synergies: STRONG • Underlying EBITA CAGR of 12%1 since merger New TUI-Blue New TUI-Grey 25% EARNINGS • Underlying EPS CAGR of 21% since merger driven by lower interest and tax rate Achromatic 112.203.244 220.220.220 GROWTH • Future growth supported by digitalisation benefits and by reinvesting disposal proceeds At least +10% • EBITA growth target extended until 2020 New TUI-Blue 50% New TUI-Grey 194.230.250 115.115.115 • 23.6% group ROIC FY17, significantly above cost of capital TUI-Dark Blue • Strong operating cash conversion, enabling to fund TUI-Black STRONG CASH • investments 9.42.94 GENERATION 0.0.0 Primary colours Primary • high cash returns to shareholders in form of dividends TUI-White • balance sheet stability 255.255.255 1 Underlying EBITA CAGR of 12% since merger / average CAGR of 13% since merger at constant currency 6 TUI GROUP | Investor Presentation | October 2018 GROWTH & DIGITALISATION INITIATIVES 7 TUI GROUP | Investor Presentation | October 2018 TUI-Red 239.0.0 Functional • Always use TUITypeLight Upside potential: Three waves driving earnings, two yet to materialize: Future earnings New TUI-Green • Font size14pt growth driven by growth investments and digitalisation benefits 170.215.0 • Line spacing 6 pt TUI-Yellow • titles in TUI-Dark STRONG GROWTH TRACK RECORD: FUTURE GROWTH: Blue FUTURE GROWTH 255.225.0 MERGER SYNERGIES DIGITALISATION, INVESTMENTS Conventions • Bullet points & standard text in TUI-Dark Blue +10% • Target extended to 2020: at least 10% underlying EBITA 3rd wave: CAGR Digitalisation • Mix of earnings 1 +12% benefits growth changes 2nd wave: • Growth from Transformation Earnings growth New TUI-Blue 1st wave: 1 investments New TUI-Grey 25% Achromatic 112.203.244 from investments 220.220.220 Synergies • Market demand & New TUI-Blue 50% digitalisation benefits New TUI-Grey 194.230.250 115.115.115 • Less seasonal earnings Earnings growth from 2 TUI-Dark Blue digitalisation benefits TUI-Black 9.42.94 0.0.0 Primary colours Primary TUI-White 255.255.255 FY14 FY15 FY16 FY17 FY18e FY19e FY20e 1 Underlying EBITA CAGR of 12% since merger / average CAGR of 13% since merger at constant currency; Note: According to company guidance earnings growth is at constant currency 8 TUI GROUP | Investor Presentation | October 2018 TUI-Red 239.0.0 Functional • Always use 1 TUITypeLight TUI’s re-investment programme FY16-FY19 – doubling EBITA under way New TUI-Green • Font size14pt 170.215.0 • Line spacing 6 pt • titles in TUI-Dark TUI-Yellow Blue GROWTH INVESTMENTS FY16 to FY18 9M GROWTH INVESTMENTS FY18 & FY19 REINVESTMENTS 255.225.0 Conventions • Bullet points & • Reinvestment of disposal standard text in 230 TUI-Dark Blue ~€0.4bn proceeds by FY19 • Own content growth 475 Basis for end-to-end ~€0.4bn • 40 profitability 200 • Investments on track 55 • More than doubling 4 280 returns New TUI-Blue 175 545 • Capital discipline continues New TUI-Grey 25% ~€1.2bn Achromatic 112.203.244 20 220.220.220 200 after FY19 125 • ROIC as KPI New TUI-Blue 50% 454 110 New TUI-Grey 194.230.250 55 • Normalised capex levels 115.115.115 • Investments if attractive Disposal Marella 42 hotels Expedition Marella Transat PDPs UK Rem. pre- Rem. equity SGE 3 ~15 hotels PDPs UK Destination TUI-Dark Blue proceeds1 Discovery 2 since ships HL Explorer 1 (EV) Pensions funding contribution until 2019 Pensions Management TUI-Black 9.42.94 Merger prepayment 2 2016 Expedition 2018 0.0.0 2 ships HL Primary colours Primary 5 6 6 6 6