thomas cook prezentation

7/27/2019 Thomas Cook Prezentation

1/69

March 13, 2013

Transforming Thomas Cook


2/69

Disclaimer and cautionary statement

This presentation is for information purposes only and doesnot constitute an invitation or inducement to underwrite,subscribe for or otherwise acquire or dispose of (or engage

in any other investment activity in relation to) any ThomasCook Group plc (ThomasCook) shares or other securities.

No part of this document, nor the fact of its distribution,should form the basis of, or be relied on in connection with,any contract or commitment or investment decisionwhatsoever.

This presentation contains certain forward-lookingstatements. These include statements which are notstatements of historical fact and may include, among things,statements relating to Thomas Cooks strategies, plans,objectives, initiatives and targets, its businesses, outlook,

potential future growth, operations, financial condition,

results of operations and growth prospects, liquidity, capitalresources and capital expenditures, expected industry trendsand development of markets, anticipated cost savings,anticipated uses of cash and the expected outcome ofcontingencies, as well as the intention, beliefs or current

expectations of Thomas Cook and/or it s directors concerningthe foregoing. The words believe, expect, anticipate,intends, estimate, forecast, project, will, may,should and similar expressions identify forward-lookingstatements.

Forward-looking statements involve risks and uncertainties,because they relate to events and depend on circumstancesthat will occur in the future. They are also based upon

assumptions which are subject to significant uncertaintiesand contingencies that are difficult or impossible to predict

and are beyond Thomas Cooks control. As such, theseassumptions may prove to be inaccurate and Thomas Cookmay not achieve or accomplish its expectations, beliefs ortargets. There are a number of factors that could cause actualresults or developments to differ materially from thoseexpressed or implied by any forward-looking statements

contained in this presentation, including, but not limited to,the impact of competitive pricing, global economicconditions, trends in the tourism industry and political andother conditions in destination markets. Further, thispresentation does not constitute a commitment by ThomasCook to proceed with a certain transaction or businesspractice in the future. The information contained in this

presentation is provided as at the date of this presentationand is subject to change without notice. Except as requiredby law or regulation, Thomas Cook undertakes no obligationto update or revise publicly any forward-looking statementor correct any inaccuracies which may become apparent,whether as a result of new information, future events or

otherwise, except to the extent it would be required to do sounder applicable law or regulation, and any opinionsexpressed herein are subject to change without notice.

Past performance is no persons needing advicefinancial adviser. No relia

for any purposes whatsoethis presentation or o

information. Neither Thombehalf makes any represthe accuracy or completenthis presentation. Neitheacting on its behalf shalloss, howsoever arising, d

information contained wicertain industry and markhas been obtained by ThoThis presentation has bThomas Cook has noinformation and none of behalf or any other perso

accuracy, fairness or comopinions contained in thpersons takes any respons


3/69

We are ahead of where we said we would be

We have stabilised the business and are delivering change fast

We aim to deliver profitable growth

We have clear targets

1

2

3

4

Key messages and agenda for today


4/69

We have stabilised the business and are delivering change fast2

We aim to deliver profitable growth3

We have clear targets4

We are ahead of where we said we wouHarriet Green | Group CEO

1



5/69

Revenues of 9.5 billion

23 million customers last year

Loved and trusted brand

Number 1 or 2 in our core markets

Industry-leading concepts to whichour customers are loyal

History of innovation

Thomas Cook is a fundamentally

sound business

Thomas Cook has a solid foundation

with a strong customer base

Robust gross margin in our core business

Not generating enough cash

Significant losses after

exceptionals

No growth in revenues

but we need to simplify

and drive strong executionto deliver profitable growth

Not delivering positive EBITmargin

WE ARE AHEAD1 2 3 4


6/69

We are already delivering better performance

WE ARE AHEAD1 2 3 4

Key highlights of recent trading

Winter trading

robust, following

positive trends outlinedin Q1

Summer trading

progressing well

with improved margins

Full year outencouragi

underpinned b

delivery of otransformation


7/69

Driven by a strong team focused on results

Eliminating silos and spreading bestpractices across the Group

Driving transformation together withalmost 300 people across the business

Continuing tostrengthen our man-agement teamthrough promotionsand new hires

WE ARE AHEAD1 2 3 4

Moving business forward throughnew approach with relentless focuson performance

WE ARE AHEAD1 2 3 4


8/69

We have stabilised the business through our focus on cos

0

50

Total

350

60

290

Announcedtoday

AnnouncedFebruary

60

AnnouncedNovember

100140

60

80

EBIT improvement target

m FY15 run rate

2011 UKTurnaround

WE ARE AHEAD1 2 3 4

Group wide cost out andprofit improvement programme

Alreadyidentifiedfor FY13-FY15

Deliveredin FY12

WE ARE AHEAD1 2 3 4


9/69

We have rapidly simplified and restructured our businessto drive performance

Streamlined and radically restructured UK organissavings and better decision-making

Executing on a new Group-wide airline segment timproved customer experience and savings

Introduced full omni-channel accountability in therestructuring our web business into an E-commercExcellence and setting up a Digital Advisory Board

Transformed our hotel purchasing approach by pcross-Group purchasing model that maximises benscale while offering real benefits to our hotel partn

WE ARE AHEAD1 2 3 4

Actions in

first 6 months

of turnaround:

WE ARE AHEAD1 2 3 4


10/69

1

An industry innovative approach to hotel sourcing

WE ARE AHEAD1 2 3 4

Working across segments and functionalteams to identify profitability improvementsand how to better use our cash in eachmajor gateway

Group-wide

Ensuring all major decisdriven enabled by a comcube containing all hotethe Group

Data-driven

Collaborating ever closer with ourcore hotel partners to optimise theirand our operations

True collaborations

Taking full advantage ofnegotiating and ensurinhave optimal contracts

Scale

We have had successful discussions tochange the way we work with the first 6of our top 50 hotel partners

We are renegotiating 2destination spend


11/69

Trusted

Personal

High TechHigh Touch

Our strategy to drive profitable growth

1

Expand successful, exclusive, internaconcepts

Build a new portfolio of flexible, trusand services

Create a single customer gateway toproduct and service recommendatio

Support execution with our trusted consistent IT platform

Trusted

Personal

High TechHigh Touch


12/69

1

We are ahead of where we said we would be1



We have stabilised the business and aredelivering change fast

2

UK Transformation

Reduced costs, increased cash

Consolidated airlines

Michael Healy | Group CFO


STABILISEDBUSINESS1 2 3 4


13/69

22%22%

24%24%23%24%

111009082007 2012 1

3.

10

4.1%

09

4.5%

08

4.5%

2007

4.8%

We have historically not turned robust gross margins intooperating profit

1

Gross margin EBIT margin

STABILISED BUSINESS1 2 3 4



14/69

Our profit improvement programmes are delivering

Taking out costs across the whole Group

Original UK Turnaround is on track to deliver targeted

benefits of 140m Additional Group-wide initiatives targeting

210m on top of this with more expected

Unlocking savings through Group-wide approach

Addressing all cost levers including labour andthird party spend

Comprehensive review of business structures,infrastructure, and technology

Capturing efficiency improvements and reducingduplication

Substantial, well-resourced, Group-wide profitimprovement programmes in execution, buildingon and extending success of UK Turnaround

1

FY12

- Organisational structure

-Group-wide cost out

Integrated air travel strategy -

UK Turnaround 60

Product, infrastructure,technology, and other

-

Expected costs to achieve

Total targeted benefits 60

Cash flow 30

Income statement 36



15/69

Reduced duplication and efficiency improvements across

Reducing from 4 to 1 organisations

Consolidating to one IT system

One maintenance system per aircraft type Aligning all supplier contracts

Maintenance

Align and increase productivity in crew across airlines Optimise crew costs through new agreements Centralisation of overhead functions

Overheadand crew

Codeshare between Condor and UK Increased ancillary revenues

Increasedrevenues

Savings from aircraft costs, fuel, ground handlingOther

1

Targeted benefm

16

14

23

12



16/69

Improving organisational structure and footprint

Optimisation principles Examples of our initiatives

Streamlining our back office functions inWest through integration within Central

Moving the Group offices to lower costpremises

Reducing number of UK back office

locations from 18 Consulting on further reducing our UK

store network by 195 stores to 874 stores

Delivering omni-channel customerexperience

Reducing layers of manage-ment between CEO andcustomer and increasingspans of control

1

Optimising organisation

around our business needs,not past acquisitions

2

Adjust our distributionto align with where ourcustomers want to meet us

3

1



17/69

11

17

18

44

Streamlining our product, infrastructure, and technology

Targeted benefitsm

Travel, offices and other overheadsOverheadcosts

Consolidating application landscape across UK and CE Rationalising our websites across the Group

Combining IT teams across 3 regions and 3 independentbrands into one global IT organisation

IT

Consolidated media buys for UK, now initiating CE

Joint print tender to reduce brochure costs

Improved brochure distributionMarketing

Leveraging group scale to renegotiate hotel contracts

Renegotiating agent contracts to improve terms on qualityand reliability of services while improving value for moneyProduct

1



18/69

Historical Group net working capital (billions)

We have a positive and predictable working capital cycle

1

The Group working capital position provides a cash benefitthroughout the year, subject to peaks and troughs

A 850m adverse swing between July - December is counter-

balanced between January-July

0.0

-0.5

-1.0

-1.5

-2.0

-1.36

921121110 3 6 754 8 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4

2009 2010 2011 20129

OurWC cycle is

seasonal

-1.10

-2.00

-1.20

-2.24



19/69

Defined clear improvement targets and specific action measures

Measures focused mostly on payment terms, overdue cash andstock of spare parts and fuel

Systems and processes to pursue and track progress

Continuous improvement culture for WC

Implemented tools to assess how to improve cash allocation

Started negotiations with our top hoteliers

Agreed Group-wide policies and governance to manage our cash

1

We are minimising net debt by embedding best practice imanagement throughout the Group

Management of working capital cycle

Working capital governance

Improving how we invest in our hotels

Total effe

ca. 15target

improvemaverage w

capit



20/69

Our active portfolio management approach to divestment

Portfolio ofThomas Cooksbusinesses underreview

2

Divestto improve

balance sheet

Fix Firstto eliminate losses

Divest/Integrateto eliminate manage-

ment distractions

Improved capital allocation across the business

Action

Goodbut non-strategic

Under-performing

Smallernon-strategic


21/69

2





2

UK Transformation


Consolidated airlines

Peter Fankhauser | CEO UK and CE




22/69

-15

-10

-5

0

5

10

15

20

UK market structure and iconic brand a strong base for thUK turnaround

2

Brandstrength and affection from UK public

Strong UK marketfundamentals

UK tour operator marketis large and consolidated

86.3% of passengers viacontrolled distribution

Strong position with 6.6mpassengers per year

YouGov Brand Perception Indicator

Thomas Cook

Competitor

Negative PR onfinancial health

Bounceback

10/2011



23/69

Clear aspirationWe will stay focused on cost and margin

Simplify to enable radical cost reduction: Reset and right-size organisation

Single structures in fewer locations

Reduce IT complexity and cost

Manage marketing in one place

Continual improvement in yield management

Drive omni-channel approach

Targeted UK EBIT margin

0%

UK transformation aims to return business to sustainable,profitable growth

2

2011/12 20

Already delivered 60m of EBIT improvementsin the original UK turnaround giving greatmomentum for this latest phase

The new UK transformation builds on lessonslearned in our previous turnaround efforts and we are aiming for more



24/69

Change starting from the to

3 boards to 1

22 directors to 10

Costs cut by 55%

Leadership

Payroll

Stores

Before Target state

These are not just ideas change is already underway in t

2

Significant consultation und

Removing layers between

Organising around custom

acquisitions

Actively managing our storface of channel shift

Closing 195 stores (subjec

Moving to clusters for leamodel

~15,500

1,069

~13,000

874

FTE FTE

Stores Stores



25/69

2

We are in the middle of reviewing and simplifying ourbrands, proposition and product

Building on our supesimplifying our brandfocusing on a strong understand brand hie

Adding flexibility to to allow customers to

the fun holiday experthrough any channel

Increasing our focus customers truly valuethe exclusive product

5 omni-channel B2C brands

3 online-only B2C brands

1 B2B brand

Brands before Brands target state Objectives

http://www.google.co.uk/imgres?imgurl=http://www.tottenhamhotspur.com/uploads/assets/637x335/2010-11/all_other_news/tc_sport637.jpg&imgrefurl=http://www.tottenhamhotspur.com/news/articles/ask-the-gaffer-with-thomas-cook-sport-041110.html&usg=__tLs0ODf97iJ1_YTZMYcdGeyb0pU=&h=335&w=637&sz=25&hl=en&start=6&sig2=Cu8EM46kOpm0pGTUFTSISA&zoom=1&tbnid=DKpE-EBMmKyRsM:&tbnh=72&tbnw=137&ei=yujKTqusLYev8AOI5dRi&prev=/images?q=thomas+cook+sport&hl=en&gbv=2&tbm=isch&itbs=1http://www.gcodes.co.uk/images/directholidays.jpg


26/69

2

We will serve our customers when and where they wantUK customers demand omni-channel and we aspire to meet theirneeds and become the omni-channel leader

We are reducingupgrading our r

We are developfunctionality to the ultimate conchannel environ

We have strong leverage and clewill deliver by emsegments

We are shifting f

facing websites core sites


27/69

2





2

UK Transformation


Consolidated airlines Christoph Debus | Global Head of Air Travel




28/69

2

We have a competitive airline

22%

In-house

23%

TC spend on air capacityTotal 3.1bn

86aircraft

6,500 employee

2.8bnrevenue(incl. seat only, 3rd part

Scheduled

Charter

55%



29/69

We are executing on a new Group-wide airline segmentto access significant scale advantages

2

Group Airlinessegment

Group Airline segment

Commercial

Finance, HR, IT & Fleet

Operations

Maintenance

Limitedfunctionalcoordinationacross airlines

Old organisation New organisation

Germany, Belgium and UK will fGroup Airline segment in next b



30/69

The creation of an airline segment is expected to deliver m

Networkand fleet

Joint fleet planning

Joint longhaul network planning

Best practice sharing on shorthaul network planning

One web platform, consolidating our seat-only sales

Continuous improvement of revenue management

Strengthening of inflight and commercial activities

One Group-wide procurement team for groundhandling, airport relations, fuel purchasing, and3rd party air capacity

Reduced IT

complexity

Harmonising and aligning the IT landscape

Sharing applications and back office functions

Strengthened

Sales andProduct

ConsolidatedProcurement

and many more examples like Maintenance etc. 3



31/69

3

We are evaluating where to source our air capacity

In-house External

What is our goal?

Offer best value-for-money flight product

Reduce overall risk for Thomas Cook Group

Ensure access to capacity

Drive high marginsthrough effective capacitymanagement

What are we doing?

Reviewing the balance betweon a route-by-route basis

Discussing ventures, deals anaround the asset lightmodesymbiotic strategies with oth


32/69

Coffee break


33/69

3



We aim to deliver profitable growthHarriet Green | Group CEO

3


New portfolio of flexible, trusted products

Successful, exclusive, international hotel concepts

Introduction and market context

Execution supported by brand and technology

Single customer gateway to personalised product and service recommendations


d


34/69

Trusted

Personal

High TechHigh Touch

Reminder: our new strategy

3

Expand successful, exclusive, internaconcepts

Build a new portfolio of flexible, trusand services

Create a single customer gateway to

product and service recommendatio

Support execution with our trusted consistent IT platform

O h h h b bj i d f

PROFITABLE GROWTH1 2 3 4


35/69

We launched one of the

most robust and in-depthever research surveyscovering ~18,000 travellers

Our approach to the strategy has been objective and fact-

We investigated whichbusiness models drivevalue in the industry

We looked at operformance athe industry an

and we drewwe have built iserving millionyear

3

Strategy

Th l b l t l k t i tt ti



36/69

The global travel market is attractive

The global number of trips grew annually since 20004%

1Global travel reached billion travellers in 2

Travel spending has increased annually since 20007%

3Source: United Nations World Tourism Organisation

O k t i till i



37/69

-15

-10

-5

0

5

10

15

543210

City Break

Cruise

Touring holiday

Sun and B

898887

3

Our core market is still growingSize

Market growth(volume)2005-11 CAGR;Percent

Note: includes traditional and dynamic packages across all holiday types

1 Includes summer and winter sunSource: IPK

Th t ld th t t t li ti hi h t h



38/69

The survey told us that trust, personalisation, high tech anhigh touch are the success factors in travel

Trust Trust, consistency and a strong brand are the most

drivers of customer choice

High Touch 70% of travellers want a relationship with their holithat goes beyond just booking and paying for a tri

93% of travellers either search for content online o

preference for booking online if possibleHigh Tech

Personal 50% of travellers feel overwhelmed by the amount

and choice when booking 66% of travellers want help in choosing the right pr

3

And e ha e e ploded some m ths in the ind str



39/69

And we have exploded some myths in the industry

Attitudes Attitudeto travel is moreimportant for explaining

preferences than national origin

We will develop prodon customer needs

Country differences The sameattitudes are presentin each country but the mix ofattitudes is sometimes different

We will offer internatcustomers in our corecontinuing to market

Mixing The majority of customers do nothave a strong preference regardingthe nationality of other guests

We will increase asseby thoughtfully mixinof different nationalit

Finding Implication

3




40/69


4




3








Our concept hotels have been truly successful



41/69

Performance relative to other prWhat is a concept hotel?

A concept hotel is a controlledand consistent experience basedon a defined list of features thatmeets clear customer needs timeafter time

Concept hotels to be sold

exclusively through Thomas Cook A portfolio of operating models to

reduce risk, mostly franchised

Higher gross margins through vo2x

Higher loyalty through consisten2x

Higher rate ofearly bookings2x

Our concept hotels have been truly successful

4

We have industry-leading concepts, refined over decades and we have a driving concept expansion that draw

1 Average for the existing concept portfolio

We will roll out our powerful concept architecture across



42/69

We will roll out our powerful concept architecture across markets

4

Family Adult

Premium

Budget

D

to

ch

We have concrete plans to grow the number of passenger



43/69

We have concrete plans to grow the number of passengerconcept hotels ~4x in five years

4

We ties ted

Our progund

Our booare m2012

Indicative concept hotel expansion planmillions of passengers

Smartline (adult)

Sunprime/Sentido

12/1311/12

0.5

0.2

0.2

1.5

0.5

0.5

0.3

13/14

0.6

0.6

0.4

15/1614/15

Family concept(tbd)

Smartline (family)

Sunwing

16/17

2.0

220 25066

# of hotels

in operation

~60%of customers

in concept hotelsexpected to be

families in2016/17

We aim to expand concept hotels cash neutrally over five



44/69

We aim to expand concept hotels cash neutrally over five

4

2013 - 2017

Net cash development

We will maintain a slate of next properties to develop so that we concept rollout if hotel savings o

Required investments for concept expans

Savings from improved 3rd party hotel counderperforming hotels will help fund in

Savings in our current market budgets wilensure focus on our own concept hotels

The expansion of successful products is aicumulatively cash flow neutralafter five y

ILLUSTRATIVE



45/69

4




3


New portfolio of flexible, trusted productsSuccessful, exclusive, international hotel concepts





Our research helped define 4 areas of product innovation



46/69

Our research helped define 4 areas of product innovation

4

Holiday types77% of our Sun & Beach customers who tookcity breaks last year booked with another provider

SeasonalityDespite our strength in Sun & Beach, we areunder-represented in Winter Sun in the UK

Trusted Range

The second most important driver of purchase

in city breaks is range and choice

Flexibility 73% of travellers book flexibly and, of those,49% are overwhelmed by choice

Decisionmaking 43% of travellers with families select

destinations that their children will enjoy

Source: GPL customer survey; Meredith Corporation Women & Travel survey, 2005

Women make more travel bookings than men

Innovpacka

Trust

New packa

High

We have developed a full innovation funnel



47/69

We have developed a full innovation funnel

4

Ideas ready fo

We have a cleprocess and, fdesignated leadeveloping th

Thomas Cookies

Travel entertainment

Make your Own holiday

Top 10 lists

SuperFAQ

Open community

Payment schemes:

Aquamaniaride the slide

Trade your holidayPacking list

Relive the moment

Season champion Beach essentials

The 48 hour weekend

ConciergeHoliday+

High quality all inclusive basics

Other hotels

Pre-travel games

Well meet again

Annual vacation bundle

Work filter retreats

Flexible payment

Grand tour

Nature breaks

Safety and reassurance

Hot deal holidays

Loyalty programme

Cruise

Multi-centre

What you need to know

Expert customer support

Travel entertainment

Winter Su

Trusted fu

Communi

City labels

Smartline

Ideas Ideas under development

Examples of product and service innovation we can share



48/69

Examples of product and service innovation we can share

Leverage our exclusiveconcept hotels andassets year round

Winter Sun

Broad range of qualityassured holidayelements (e.g., rooms)to meet customer needs

Trustedfundamentals

Play at scale in thesecond largest holidaytype

City labels

City Budget City Eat

City CultureCity Romance

Smartline

Budget, quality hotelswith great design forthe smart traveller

We have done thisbefore in NorthernEurope; it now hasour lowest level ofholiday seasonality

Smartline has testedwell in Germany andis on track for 70,000guests in Year 1

Our new approachto hotel procurementwill give us a low-costbase to deliver ournew city themes

Pool of 85,000properties (throughHotels4U) that canbe quality assuredat low cost

4



49/69

4




3


New portfolio of flexible, trusted productsSuccessful, exclusive, international hotel concepts



Single customer gateway to personalised product and service recom


We are not starting from scratch



50/69

e a e ot sta t g o sc atc

5

First major high street travel agencyonline booking

Last year, we had over 310m visits t

ThomasCook.com was labelled #5 tin 2012 eDigital Research Best Site

We have strong digital crede

We aspire to have the highest share of bookings online



51/69

5

p g gfor a major tour operator

2014/15 targets by segment

2014/15

50%

2011/12

34%

UK Continental Euro

Northern Europe Airlines

>55% >12%

>75% >75%

(>30% in 16/17)

Germany, Austria,Switzerland

Target share of passengersbooking online

We have a strong team focused on delivering rapid results



52/69

g g p

Extension of our product offering in e-packaging in Germany

FocusFar fewer key brands and websites and 1 in Germany

Conversion

Important functionality enhancemenconversion in the UK

New trafficIncreasing our investment in offline aand SEO in line with peers

Investing in customer engagement ttechniques to ensure safe passage acSafe passage

We have already turbocharged our to deliver cutting edge digital innova

Leadership

5


We will create a single, consistent omni-channel gateway


53/69

5

Mobile

Phone

Destination Rep

Store

PC

Omni-channel

Concepts

Trusted fundamentals

Ne

Hig

Smart filter Recommendations fro

personalised recommendations drawn from our full rangeproducts and services

We are already moving on this and expect to see more in

http://tripadvisorwatch.files.wordpress.com/2012/01/hotel.jpg


54/69

y g pand months to come

5

Optimised mobile

web

Prototype tablet

application

Gamified on So

Thomas Cook UK



55/69

5




3







We will simplify and make best use of our brand portfolio



56/69

5

Trust in TC brand 9% higher than market average

87% of our customers say If something goes wrong with myholiday Thomas Cook will sort it out

High Trust

Thomas Cook is the travel and tour operator Superbrand Neckermann, Spies, Ving, and Thomas Cook are iconic brands in

Central and Northern Europe

Strong brand

60% of all travellers rate Thomas Cook as Brand I grew up with

Long history of innovation e.g., winter-sun, first major on-line traveloperator

Thomas Cook has been a trusted brand since 1841

Long and proud history

5

o

Example: Successful brand optimisation pilot in Northern



57/69

NE is driving a unified customerexperience

Pilot has been very successfulvery competitive and high ma

Early bookings increased by for Summer 13 is up 4.3% vs

Customers trust the Ving branew logo, associating it with

Website in Sweden awardedsite in industry competition

Total numbers of web-sessiocompared with last year

Substantial increase in activiton Twitter and Facebookaround launch

5

Eliminated old differentiated logos

Created clear link between travel operator, airline,and concept hotels

Unified online platforms under Heart logo isHigh Tech High Touch


Our plan continues to build on previous years technology


58/69

Dynamic packaging

Component-based pricing

Industry-standard yield management

ThomasCook.com web platform

~20k hotels that we can package dynamically

Globally scalable architecture

We are building on systems including Currently supported countrie

GermanyCzech

Republi

Austria

SwitzerlandFrance

Belgium

Netherlands

UKIreland

5


Our technology roadmap supports the delivery of our bus


59/69

The for t(at cyearhighGrou55m

This the scost

Successful, exclusive,inter-national hotel

concepts

Unifying the inventory of concept hotels to supportglobal access across markets

Single customer gatewayto personalised productand service recommen-dations

Supplying single-entry, multi-channel interactionwith customers

Micro-segmentation and recommendation enginesto offer personalised offers

New portfolio of flexible,trusted products

Extending access to new suppliers to extend ourtrusted fundamentals offer beyond 70-100k hotels

Rolling out dynamic packaging across all markets

Building a pricing engine capability based on yieldand personalised customer spend profiles

Business strategy Strategic IT programmes

5

A differentiated strategy with a simpler and more compellf



60/69

Differentiated from our traditional competitors Unleashing the power of the simplified Thomas Cook

brand portfolio

Proven, exclusive, international concept hotels drivehigher trust, loyalty and margin premiums

Leverage of cutting-edge technology to enable per-sonalised product and service recommendations

Seamless omni-channel integration ensuressafe passage and strong conversion

Year-round, individual customer relationships

Differentiated from OT

Quality assured inventory tra

ATOL protection gives custowe will help if something go

Personalised recommendatiocustomer understanding andformation flow based on theand behaviour

More comprehensive range products and services

customer focus

6

What will be different and why we will succeed



61/69

What we will not do

Singlegateway

Newportfolio

Brand andtechnology

6

Concepthotels

What we will do

Operate non-performing hotels

and destinations

Re-direct hotel investment onto

proven concepts that earnpremium returns

Offer an inconsistent experienceacross channels

Target the highest share of onlinebookings for a tour operator

Reinvent our IT investmentsfrom scratch

Consolidate our brand portfolio

Become a full service OTA

Add complexity unless it meetslocal customer needs

Quality assure every part of everyproduct we offer

Manage a structured innovationprocess

Three horizons of impact



62/69

Horizon 33-5+ years

Leading touon-line pene

Further prodto capture famarket secto

Horizon 21-3 years

Continue concept hotelsexpansion (incl. Sunwing)

Expansion of trusted

fundamentals Full roll out of single point of

entry and high tech services

0-2 yearsHorizon 1

Expand concept hotels

Launch first wave of new

products, e.g., scale-up ofdynamic packaging

Higher online penetration

First wave of high techservices innovation

6



63/69

6

We have clear targetsMichael Healy | Group CFO

4




Targets and KPIs

CLEAR TARGETS1 2 3 4


64/69

6

Targets New Product Revenue -

FY12

Cost out / Profit Improvement 60m

1 CAGR from FY13 to FY15 including New Product Revenue2 Underlying gross margins, adjusted for disposals and shop closures3 Free cash flow post exceptionals and before capital expenditure / EBITDA

Underlying Gross Margin Improvement2 -

UK EBIT Margin Nil

KPIs Sales CAGR1 -

Web Penetration 34%

Cash Conversion3 11%

Closing thoughts


65/69

These on

improve

give us rea

We are demonstrating we can drive new revenues

We are taking out cost and we expect more to come

We are improving working capital management

We have assets we are able to sell

6

We have stable and more visible free cash flow


66/69

6

Biographies


67/69

Dr. Peter Fankhauser

joined the Group in May2001 and became CEOUK & Continental Europe on1 November 2012. Prior tothis he was CEO ContinentalEurope, a role he took up in

June 2007. Peter has overtwenty years of experience inthe travel market and, before

joining Thomas Cook, wasresponsible for managingand growing the Europeandivision and overseasbusinesses of Kuoni.

Christoph Debus

joined the Group in September2012 as Global Head of Air Travel.Christoph worked with the Grouppreviously as MD and CFO forCondor, before he joined AirBerlin as COO in 2009. At Air

Berlin, he was responsible forOperations, IT, Procurement, HRand IT/Processes. Prior to joiningCondor in 2005, he was a partnerwith Roland Berger StrategyConsultants in Munich, where hespecialised in Aviation/ Tourism,Automotive and Restructuring/Corporate Strategy.

Michael Healy

joined the Group on 14 May2012 and became Group CFOon 1 July 2012. Prior to this, hewas Group Finance Director ofKwik-Fit Group. Michael hasconsiderable international

experience across a broadrange of industries and waspreviously Chief OperatingOfficer and Finance Director ofthe Hong Kong listed FirstPacific Company Limited andsubsequently Chief FinancialOfficer of ebookers plc.

Harriet Green

joined the Group as Group CEOon 30 July 2012. Prior to this,she was CEO of leading highservice technology distributorPremier Farnell plc. Harriet is aglobal executive with extensive,

multi-channel businessleadership experience of theworldwide technology andindustrial markets. She hasdriven innovation and strategictransformation throughprofitable global growthstrategies and delivered industryleading results.

J

ieiOsd

o

tT

edt

6

Glossary (1/2)


68/69

Thomas Cook & corporate

CEContinental Europe

Core marketsUK, Continental Europe, Northern Europe

HeadroomLiquidity buffer after anticipated operationsand investments

IMSInterim Management Statement

SegmentsInternal Thomas Cook businesses: UK,

France, Continental Europe, NorthernEurope, North America, Airlines Germany

Thomas Cook IndiaIndian arm divested in May 2012

Unified gateway approachAbility to access all Thomas Cook contentregardless of what channel the customertakes, and focusing our online content inmuch fewer places

Industry & market

Ancillary servicesNon-core travel services such as travel

insurance, care hire insurance, airportparking, airport lounges, and airporthotels

CodeshareAviation business agreement wherea flight sold by one airline can beoperated by another airline

Component bookingThe ability to put together a holidayfrom one or more stand-alone (andindividually priced) beds, seats or otherunits of inventory

ConceptAn exclusive, customer-facingproposition made up a defined setof features that creates loyalty viaconsistent delivery of a holidayexperience

Differentiated productTUI term for a hotel that can only be

found from TUI either because it is a TUIconcept, or because TUI has exclusiveaccess or because it has unique features

DIY travellersDo It Yourself travellers more likely toopt for component travel instead ofpackage holidays

Dynamic packageA holiday comprising more than oneseat or bed that is bundled in the

moment by the customer usually fromdynamically sourced inventory andoffered for a single combined price bythe operator

Exclusive distributionThomas Cook channels are the onlyplace where customers can access agiven product

ExcluThom

bed na Gro

GrouServicwhile parke

HolidThe trdescrlocati

city)LabeA cusfor a set ofexpecFamil

6

Glossary (2/2)


69/69

Web & IT

Amplification rateA measure of how postings on social

media websites are shared e.g. numberof likes, retweets and +1s

Content managementEnables business to manage, trackand source hi-quality, channel-specificcontent (e.g., faster-loading picturesfor mobiles, richer pictures/videos fortablets)

GameificationThe application of typical elementsof game playing (e.g. point scoring,competition with others, rules of play)to other areas of activity, typically toencourage engagement with a productor service

Omni-channelSeamless end consumer experienceacross multiple retail channelse.g. single pricing on-and off-line

TailoringThe actions we take to select the

channel, information and product acustomer sees so that it meets theirneeds

Third-party productAny property or package where ThomasCook is not exclusive and has not takenrisk through pre-commitments

TOTour operator

Tour OperatorCompany combining travel, accommo-dation and/or entertainment to create aholiday

Industry & market (continued)

Limited rangeThe number of non-exclusive, non-risk

hotels that meet our quality control standardthat we will contract

Load factorMeasure of airline utilisation: number ofpassenger-kilometres travelled as a percen-tage of the total seat-kilometres available

OTAOnline Travel Agency

Quality controlThe checks that we do at point of contract-

ing a hotel and ongoing to ensure a hotelcan consistently deliver a desired customerexperience

Static packagingA pre-defined bundle of seat and bed that isfixed based on largely committed inventoryand which can be offered at a given price toa broad range of customers well in advanceof the season

PPCPay p

ProdEnabltraditalong

SEOSearc

SociaThe plikedconte

6

thomas cook prezentation

Documents