% 23.6% ROIC SALES & MARKETING % 527m 10% earnings growth - PowerPoint PPT Presentation

TUI Group Investor Presentation August / September / October 2018

What is TUI Group? • Hotel & Resorts, Cruises and Destination Experiences holiday experiences “product” • provider with own distribution and fulfilment • • • KEY HIGHLIGHTS HOLIDAY EXPERIENCES € 357m Leading leisure hotel and club brands around EBITA the world; investments, operations, ownership 20m customers € 256m Leading German & UK cruise brands € 18.5bn revenues EBITA € 35m Tours, activities and service provider in € 1.1bn EBITA (1) EBITA destination % 23.6% ROIC SALES & MARKETING % € 527m 10% earnings growth Market leaders in packaged distribution, fulfilment, EBITA strong market and customer knowledge (1) Underlying; Note: According to company guidance earnings growth is at constant currency 2 2 TUI GROUP | Investor Presentation | October 2018

Our business model: Product-focused holiday provider with 59% Holiday Experience • earnings • • • HOLIDAY EXPERIENCES – 59% EBITA SALES & MARKETING – 41% EBITA INTEGRATION BENEFITS / Growth, diversification Digitalisation, diversification STRATEGY • Northern, Central, Western 20m customers Portfolio approach Own customer end-to-end 1 ~150 TUI Yielding our risk capacity: 20m 2 379 1 Aircraft, Owned / managed / JV customers to optimise own Hotels 3rd party flying 3rd party Integrated ROIC FY17: 13% hotels/ cruises demand distribution distribution Unique TUI holiday experiences 3 Own, 3rd party 16 2 and fulfillment differentiating TUI committed & Owned / JV Ships from competition non-committed Integrated ROIC FY17: 20% 3rd party distribution distribution Double diversification across 4 Customer, Markets and Holiday Experiences knowledge, 115 Owned / JV service & Destinations Integrated 3rd party ROIC FY17: 24% fulfilment distribution distribution ROIC FY17: 85% 3 GROUP PLATFORMS 1 This number includes group hotels and 3 rd 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 3 TUI GROUP | Investor Presentation | October 2018

What does it mean? Integrated model brings strong strategic benefits in the wider market • context • • INTEGRATION BENEFITS / TUI STRATEGY WIDER MARKET CONTEXT • • 1 Enables us to personalise our customers’ holiday Own customer end-to-end 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 Unique TUI holiday experiences and fulfilment Differentiates us from the OTAs, other pure-play 3 differentiating TUI from competition distributors and the airlines, drives customer satisfaction and retention Double diversification across Sales & Marketing and Diversified across source markets and destinations - 4 Holiday Experiences helps to mitigate the impact of cyclicality in individual markets and geopolitical shocks 4 4 TUI GROUP | Investor Presentation | October 2018

̶ ̶ ̶ ̶ ̶ TUI has moved on and developed into an integrated provider of holiday experiences • • • • OTAs “Depth of offering“ • “Best and unique product, • Agent model, trading margin individualized offering“ • No/ limited risk capacity • Dynamic packaging • Increasingly dynamic packaging • Own hotels, flights and cruises: Yielding of risk capacities Tour operators Own distribution & fulfillment “Packaged holidays“ • Packaging of hotel & flight, fulfillment Double diversification Airlines • Trading margin leveraged by Flight risk capacity “Ancillary packages“ • Airline as core business Hotel commitments 1 • Packages as add-on and to de-risk flight capacity • Trading margin on hotels • Increasingly direct hotel sourcing Potential new entrants • Global tech companies  5 5 TUI GROUP | Investor Presentation | October 2018

What do we offer to our investors – 3 reasons to be invested / to invest • • • • • Global leading tourism group • Holiday product provider with own distribution • STRONG • Own customer end to end: Sales & Marketing, Hotels, Cruises, Destination Experiences STRATEGIC • Individualization and targeted marketing 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 EARNINGS • Underlying EPS CAGR of 21% since merger driven by lower interest and tax rate GROWTH • Future growth supported by digitalisation benefits and by reinvesting disposal proceeds At least +10% • EBITA growth target extended until 2020 • 23.6% group ROIC FY17, significantly above cost of capital • Strong operating cash conversion, enabling to fund STRONG CASH • investments GENERATION • high cash returns to shareholders in form of dividends • balance sheet stability 1 Underlying EBITA CAGR of 12% since merger / average CAGR of 13% since merger at constant currency 6 6 TUI GROUP | Investor Presentation | October 2018

GROWTH & DIGITALISATION INITIATIVES 7 TUI GROUP | Investor Presentation | October 2018

Upside potential: Three waves driving earnings, two yet to materialize: Future earnings • growth driven by growth investments and digitalisation benefits • • • STRONG GROWTH TRACK RECORD: STRONG GROWTH TRACK RECORD: FUTURE GROWTH: FUTURE GROWTH MERGER SYNERGIES MERGER SYNERGIES DIGITALISATION, INVESTMENTS • • Target extended to 2020: at +10% least 10% underlying EBITA 3 rd wave: CAGR Digitalisation • Mix of earnings +12% 1 benefits growth changes 2 nd wave: • Growth from Transformation Earnings growth 1 1 st wave: investments from investments Synergies • Market demand & digitalisation benefits • Less seasonal earnings Earnings growth from 2 digitalisation benefits 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 8 TUI GROUP | Investor Presentation | October 2018

1 TUI’s re-investment programme FY16-FY19 – doubling EBITA under way • • • • GROWTH INVESTMENTS FY16 to FY18 9M GROWTH INVESTMENTS FY18 & FY19 REINVESTMENTS • • Reinvestment of disposal 230 proceeds by FY19 ~ € 0.4bn  • Own content growth 475 • Basis for end-to-end ~ € 0.4bn profitability 40   200 • Investments on track  55 • More than doubling  280 4 returns  • Capital discipline continues 545 175 ~ € 1.2bn 20  after FY19 200 • ROIC as KPI 125 4 110 45 • Normalised capex levels 55 • Investments if attractive 3 Disposal Marella 42 hotels Expedition Marella Transat PDPs UK Rem. pre- Rem. equity SGE ~15 hotels PDPs UK Destination proceeds 1 Discovery 2 since ships HL Explorer 1 (EV) Pensions funding contribution until 2019 Pensions Management Merger prepayment 2 2016 Expedition 2018 2 ships HL - € 106m 5 + € 261m € 25m € 70m 6 € 25m € 30m € 11m € 30m € 25m € 20m 6 6 6 € 10-25m 7 6 6 6 Targeted EBITA 6 Deconsolidated EBITA 1 Including working capital/cash effect; 2 Equity-contribution, delivery in Spring & Autumn 2019; 3 Assumes SkySea Golden Era (SGE) purchase as cash transaction; 4 € 10m quarterly adjustment until 2019 - pro rata approach; 5 Number includes € 93m EBITA of HBG & Travelopia as well as EAT of MS1 within TUI Cruises of € 12.5m due transferring the ship to UK market; 6 Based on targeted EBITA run-rate 7 Profitability growth expected in line with 3 year ramp-up phase of synergies; expected to complete in H2 FY18 9 9 TUI GROUP | Investor Presentation | October 2018

1 Hotels & Resorts investments: 42 new hotels since merger, low capital intensity • • DE-RISKED GROWTH PORTFOLIO DIVERSIFICATION • • • Pre-dominantly low capital • intensity Berlin • Ownership in 365 days Croatia Bulgaria destinations/ where scarcity of Dublin Greece assets New York Portugal Italy Ibiza Turkey Cyprus Dom Rep • De-risking through JV off- Mexico Tunisia Egypt balance financings Jamaica • 15% ROIC hurdle Aruba St. Lucia Maldives Thailand Sri Lanka Zanzibar Mauritius Management, Franchise Ownership, Lease > 65% OF INVESTMENTS WITH 42 NEW HOTELS OPENED SINCE ROIC 42 HOTELS FY18: >15% CAPITAL DISCIPLINE LOW CAPITAL INTENSITY 1 MERGER (TARGET) 1 Low capital intensity is defined as Management, Franchise and 50% of owned hotels due to joint venture structures 10 TUI GROUP | Investor Presentation | October 2018 10