Thomas Cook Prezentation

Transforming Thomas Cook
March 13, 2013
Thomas Cook Group plc
Disclaimer and cautionary statement

This presentation is for information purposes only and does not 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 Thomas Cook Group plc (Thomas Cook) 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 decision whatsoever. This presentation contains certain forward-looking statements. These include statements which are not statements 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, capital resources and capital expenditures, expected industry trends and development of markets, anticipated cost savings, anticipated uses of cash and the expected outcome of contingencies, as well as the intention, beliefs or current expectations of Thomas Cook and/or its directors concerning the foregoing. The words believe, expect, anticipate, intends, estimate, forecast, project, will, may, should and similar expressions identify forward-looking statements. Forward-looking statements involve risks and uncertainties, because they relate to events and depend on circumstances that will occur in the future. They are also based upon assumptions which are subject to significant uncertainties and contingencies that are difficult or impossible to predict and are beyond Thomas Cooks control. As such, these assumptions may prove to be inaccurate and Thomas Cook may not achieve or accomplish its expectations, beliefs or targets. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by any forward-looking statements contained in this presentation, including, but not limited to, the impact of competitive pricing, global economic conditions, trends in the tourism industry and political and other conditions in destination markets. Further, this presentation does not constitute a commitment by Thomas Cook to proceed with a certain transaction or business practice in the future. The information contained in this presentation is provided as at the date of this presentation and is subject to change without notice. Except as required by law or regulation, Thomas Cook undertakes no obligation to update or revise publicly any forward-looking statement or 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 so under applicable law or regulation, and any opinions expressed herein are subject to change without notice. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. No reliance may be placed by any person for any purposes whatsoever on the information contained in this presentation or on the completeness of such information. Neither Thomas Cook nor anyone acting on its behalf makes any representation, express or implied, as to the accuracy or completeness of the information contained in this presentation. Neither Thomas Cook nor any person acting on its behalf shall have any liability whatsoever for loss, howsoever arising, directly or indirectly, from use of the information contained within this presentation. In particular, certain industry and market information in this presentation has been obtained by Thomas Cook from third party sources. This presentation has been prepared by Thomas Cook. Thomas Cook has not independently verified such information and none of Thomas Cook, anyone acting on its behalf or any other person provides any assurance as to the accuracy, fairness or completeness of such information or opinions contained in this presentation and none of such persons takes any responsibility for such information.
Key messages and agenda for today
1 2 3 4
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

3
1 We are ahead of where we said we would be

Harriet Green | Group CEO
2 3
We have stabilised the business and are delivering change fast We aim to deliver profitable growth

4
WE ARE AHEAD
Thomas Cook has a solid foundation

Thomas Cook is a fundamentally sound business
Revenues of 9.5 billion
Number 1 or 2 in our core markets Robust gross margin in our core business History of innovation
but we need to simplify and drive strong execution to deliver profitable growth
Not delivering positive EBIT margin Significant losses after exceptionals No growth in revenues Not generating enough cash
with a strong customer base

23 million customers last year Loved and trusted brand
Turnaround and sustainable transformation required
Industry-leading concepts to which our customers are loyal

5 Thomas Cook Group plc
WE ARE AHEAD
We are already delivering better performance

Key highlights of recent trading
Winter trading
robust, following positive trends outlined in Q1
Summer trading
progressing well with improved margins
Full year outlook encouraging

underpinned by the delivery of our transformation plans
WE ARE AHEAD
Driven by a strong team focused on results

Continuing to strengthen our management team through promotions and new hires
Driving transformation together with almost 300 people across the business Eliminating silos and spreading best practices across the Group Moving business forward through new approach with relentless focus on performance
WE ARE AHEAD
We have stabilised the business through our focus on costs and cash
EBIT improvement target
m FY15 run rate
350
50
More expected to come
60 100 Group wide cost out and profit improvement programme Announced November Announced February Announced today 290
140 80 60 2011 UK Turnaround
Already identified for FY13-FY15
60 Total
Delivered in FY12 0
WE ARE AHEAD
We have rapidly simplified and restructured our business to drive performance

Streamlined and radically restructured UK organisation to deliver savings and better decision-making
Actions in first 6 months of turnaround:
Introduced full omni-channel accountability in the segments by restructuring our web business into an E-commerce Centre of Excellence and setting up a Digital Advisory Board to drive innovation
Executing on a new Group-wide airline segment to deliver an improved customer experience and savings Transformed our hotel purchasing approach by piloting a new, cross-Group purchasing model that maximises benefits from our scale while offering real benefits to our hotel partners
WE ARE AHEAD
An industry innovative approach to hotel sourcing

Group-wide
Working across segments and functional teams to identify profitability improvements and how to better use our cash in each major gateway
Data-driven
Ensuring all major decisions are datadriven enabled by a comprehensive data cube containing all hotel contracts across the Group
True collaborations
Collaborating ever closer with our core hotel partners to optimise their and our operations We have had successful discussions to change the way we work with the first 6 of our top 50 hotel partners
Scale
Taking full advantage of our scale when negotiating and ensuring all segments have optimal contracts We are renegotiating 24% of our agent destination spend
Our strategy to drive profitable growth
Trusted Personal High Tech
Trusted Build a new portfolio of flexible, trusted products and services Personal Create a single customer gateway to personalised product and service recommendations High Tech
Expand successful, exclusive, international hotel concepts
High Touch
High Touch
Support execution with our trusted brand and a consistent IT platform
11

2 We have stabilised the business and are delivering change fast

Reduced costs, increased cash
UK Transformation Consolidated airlines 3 4 We aim to deliver profitable growth We have clear targets
12
Michael Healy | Group CFO
STABILISED BUSINESS
REDUCED COSTS, INCREASED CASH
We have historically not turned robust gross margins into operating profit
Gross margin
24% 23% 24% 24% 22% 22%
EBIT margin
We need to take out costs

4.8% 4.5% 4.5% 4.1%
3.1%
1.6% 2012
2007
08
09
10
11
2012
2007
08
09
10
11
13
3 4
STABILISED BUSINESS
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 Addressing all cost levers including labour and third party spend Comprehensive review of business structures, infrastructure, and technology Capturing efficiency improvements and reducing duplication UK Turnaround Group-wide cost out
FY12 FY13 FY14 FY15

60 60 120 25 6 7 12 145 140 155 55 45 55 295 140 210 65 55 90 350
Unlocking savings through Group-wide approach Integrated air travel strategy

Organisational structure Product, infrastructure, technology, and other Total targeted benefits Expected costs to achieve
Income statement Substantial, well-resourced, Group-wide profit improvement programmes in execution, building Cash flow on and extending success of UK Turnaround
36
30
14
76
61
12
62
2
10
3 4
STABILISED BUSINESS
Reduced duplication and efficiency improvements across airlines

Targeted benefits, FY15
Reducing from 4 to 1 organisations Consolidating to one IT system One maintenance system per aircraft type Aligning all supplier contracts
m
Maintenance
16
Overhead and crew Increased revenues
Align and increase productivity in crew across airlines Optimise crew costs through new agreements Centralisation of overhead functions Codeshare between Condor and UK Increased ancillary revenues
14
FY15 benefit target

Expected cost to achieve
65m
7m
23
Other
Savings from aircraft costs, fuel, ground handling
12
3 4
STABILISED BUSINESS
Improving organisational structure and footprint

Optimisation principles Examples of our initiatives
Streamlining our back office functions in West through integration within Central Moving the Group offices to lower cost premises 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 customer experience
1
2 3
Reducing layers of management between CEO and customer and increasing spans of control Optimising organisation around our business needs, not past acquisitions Adjust our distribution to align with where our customers want to meet us
FY15 benefit target

55m
41m
3 4
STABILISED BUSINESS
Streamlining our product, infrastructure, and technology

Targeted benefits, FY15
Leveraging group scale to renegotiate hotel contracts Renegotiating agent contracts to improve terms on quality and reliability of services while improving value for money Consolidated media buys for UK, now initiating CE Joint print tender to reduce brochure costs Improved brochure distribution
m
Product
44
Marketing
18
FY15 benefit target

90m
IT Overhead costs
Consolidating application landscape across UK and CE Rationalising our websites across the Group Combining IT teams across 3 regions and 3 independent brands into one global IT organisation
Travel, offices and other overheads
27m
17
11
STABILISED BUSINESS
We have a positive and predictable working capital cycle

Historical Group net working capital (billions)
2009 0.0 -0.5 -1.0 -1.5 -2.0 -1.10 -1.20 -1.36 -1.43
9 10 11 12
2010
1 2 3 4 5 6 7 8 9 10 11 12
2011
1 2 3 4 5 6 7 8 9 10 11 12
2012
1 2 3 4 5 6 7 8 9 10 11 12
-2.00
Our WC cycle is seasonal
-2.24
-2.30
The Group working capital position provides a cash benefit throughout the year, subject to peaks and troughs A 850m adverse swing between July - December is counterbalanced between January-July
18
STABILISED BUSINESS
We are minimising net debt by embedding best practice in management throughout the Group
Management of working capital cycle
Defined clear improvement targets and specific action measures Measures focused mostly on payment terms, overdue cash and stock of spare parts and fuel
Total effect of
Working capital governance

Systems and processes to pursue and track progress Continuous improvement culture for WC
ca. 150m
targeted improvement in average working capital
Improving how we invest in our hotels

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
19
STABILISED BUSINESS
Our active portfolio management approach to divestments
Portfolio of Thomas Cooks businesses under review
Good but nonstrategic
Underperforming
Smaller non-strategic
Core and strategic
Action
Divest to improve balance sheet
Fix First Divest/Integrate to eliminate losses to eliminate management distractions Improved capital allocation across the business
20
Invest and grow


UK Transformation
Consolidated airlines 3 4 We aim to deliver profitable growth We have clear targets
Peter Fankhauser | CEO UK and CE
21
STABILISED BUSINESS
UK TRANSFORMATION
UK market structure and iconic brand a strong base for the UK turnaround
Brand strength and affection from UK public persists
YouGov Brand Perception Indicator
Strong UK market fundamentals

UK tour operator market 86.3% of passengers via
controlled distribution passengers per year is large and consolidated
20 15
Competitor
Jan1 - Feb28 2013
10 5 0 -5 -10 -15
Thomas Cook
Bounceback
Strong position with 6.6m
Negative PR on financial health 10/2011 22 03/2013 Thomas Cook Group plc
STABILISED BUSINESS
UK TRANSFORMATION
UK transformation aims to return business to sustainable, profitable growth

We 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
Clear aspiration
Targeted UK EBIT margin
Aiming for more
5%
Drive omni-channel approach
Already delivered 60m of EBIT improvements in the original UK turnaround giving great momentum for this latest phase The new UK transformation builds on lessons learned in our previous turnaround efforts and we are aiming for more
0%
2011/12
2014/15 run rate

STABILISED BUSINESS
UK TRANSFORMATION
These are not just ideas change is already underway in the UK

Before Target state
Leadership
Change starting from the top 3 boards to 1 22 directors to 10 Costs cut by 55%
Payroll
~15,500 ~13,000
FTE FTE
Significant consultation underway in UK Removing layers between CEO and customers Organising around customer, not past acquisitions
Actively managing our store cost base in the face of channel shift Closing 195 stores (subject to consultation) Moving to clusters for leaner operating model
Stores
1,069
Stores
874
Stores
STABILISED BUSINESS
UK TRANSFORMATION
We are in the middle of reviewing and simplifying our brands, proposition and product
Brands before Brands target state Objectives
Building on our superbrand by simplifying our brand portfolio and focusing on a strong and easy-tounderstand brand hierarchy Adding flexibility to our proposition to allow customers to book exactly the fun holiday experience they prefer through any channel they choose Increasing our focus on the hotels our customers truly value and expanding the exclusive product offerings
5 omni-channel B2C brands
3 online-only B2C brands
1 B2B brand
STABILISED BUSINESS
UK TRANSFORMATION
We will serve our customers when and where they want

UK customers demand omni-channel and we aspire to meet their needs and become the omni-channel leader
We are shifting from 44 consumerfacing websites to focus on only 3 core sites We have strong web capabilities to leverage and clear targets which we will deliver by empowering our segments We are developing full CRM functionality to give our customers the ultimate connected omnichannel environment We are reducing our stores and upgrading our retail footprint


UK Transformation
Consolidated airlines
3 4 We aim to deliver profitable growth We have clear targets
Christoph Debus | Global Head of Air Travel
27
STABILISED BUSINESS
CONSOLIDATED AIRLINES
We have a competitive airline

TC spend on air capacity
Total 3.1bn
86 aircraft
22%
Scheduled
55%
In-house
23%
Charter
6,500 employees
2.8bn revenue
(incl. seat only, 3rd party)
28
STABILISED BUSINESS
We are executing on a new Group-wide airline segment to access significant scale advantages
Old organisation New organisation
Group Airlines Group Airline segment segment Commercial Limited functional coordination across airlines Finance, HR, IT & Fleet Operations Maintenance Germany, Belgium and UK will form one Group Airline segment in next business year
Strong functional coordination across airlines
STABILISED BUSINESS
The creation of an airline segment is expected to deliver many benefits

Reduced IT complexity Network and fleet
Harmonising and aligning the IT landscape Sharing applications and back office functions Savings Joint fleet planning Joint longhaul network planning Best practice sharing on shorthaul network planning
Strengthened One web platform, consolidating our seat-only sales Continuous improvement of revenue management Sales and Strengthening of inflight and commercial activities Product Consolidated One Group-wide procurement team for ground handling, airport relations, fuel purchasing, and Procurement 3rd party air capacity
and many more examples like Maintenance etc.
30
Better quality
Higher reliability
STABILISED BUSINESS
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
What are we doing?

Reviewing the balance between make and buy on a route-by-route basis Discussing ventures, deals and programmes around the asset light model to drive mutually symbiotic strategies with other major carriers
Ensure access to capacity

Drive high margins through effective capacity management
Coffee break

1 2 We are ahead of where we said we would be We have stabilised the business and are delivering change fast
3 We aim to deliver profitable growth

Introduction and market context

Successful, exclusive, international hotel concepts
New portfolio of flexible, trusted products
Single customer gateway to personalised product and service recommendations

Execution supported by brand and technology
33
Reminder: our new strategy
Trusted Personal High Tech
Expand successful, exclusive, international hotel concepts Build a new portfolio of flexible, trusted products and services Create a single customer gateway to personalised product and service recommendations Support execution with our trusted brand and a consistent IT platform
High Touch
34
PROFITABLE GROWTH
INTRODUCTION
Our approach to the strategy has been objective and fact-based
We launched one of the most robust and in-depth ever research surveys covering ~18,000 travellers
We looked at our own performance and that of the industry and market
We investigated which business models drive value in the industry
Strategy
and we drew on the skills we have built in the Group from serving millions of customers a year
PROFITABLE GROWTH
MARKET CONTEXT
The global travel market is attractive
Global travel reached
1
4% 7%
billion travellers in 2012
The global number of trips grew
annually since 2000
Travel spending has increased
annually since 2000
Source: United Nations World Tourism Organisation
36
PROFITABLE GROWTH
MARKET CONTEXT
Our core market is still growing

Size of bubble =2011 market size
Market growth 15 (volume)

2005-11 CAGR; Percent
10 5 0 -5 -10 -15
Cruise City Break Touring holiday
Sun and Beach1
87
88
89
37
90 Percent
Share of TC revenue
Note: includes traditional and dynamic packages across all holiday types 1 Includes summer and winter sun Source: IPK
PROFITABLE GROWTH
MARKET CONTEXT
The survey told us that trust, personalisation, high tech and high touch are the success factors in travel
Trust Personal High Tech High Touch
Trust, consistency and a strong brand are the most important drivers of customer choice
50% of travellers feel overwhelmed by the amount of information and choice when booking 66% of travellers want help in choosing the right product for them
93% of travellers either search for content online or express a preference for booking online if possible 70% of travellers want a relationship with their holiday provider that goes beyond just booking and paying for a trip
38
PROFITABLE GROWTH
MARKET CONTEXT
And we have exploded some myths in the industry

Finding Implication We will develop products focused on customer needs
Attitudes
Attitude to travel is more important for explaining preferences than national origin
Country differences
The same attitudes are present in each country but the mix of attitudes is sometimes different
We will offer international products to customers in our core markets while continuing to market locally
Mixing
The majority of customers do not have a strong preference regarding the nationality of other guests
We will increase asset utilisation by thoughtfully mixing customers of different nationalities
39
Key messages messages and and agenda agenda for for today today Key

Introduction and market context
Successful, exclusive, international hotel concepts

New portfolio of flexible, trusted products Single customer gateway to personalised product and service recommendations Execution supported by brand and technology
40
PROFITABLE GROWTH
HOTEL CONCEPTS
Our concept hotels have been truly successful

What is a concept hotel?
A concept hotel is a controlled and consistent experience based on a defined list of features that meets clear customer needs time after time Concept hotels to be sold exclusively through Thomas Cook A portfolio of operating models to reduce risk, mostly franchised
Performance relative to other products1
2x 2x 2x
Higher gross margins through volume commitments
Higher loyalty through consistent experiences Higher rate of early bookings
We have industry-leading concepts, developed and refined over decades and we have a central team driving concept expansion that draws on this expertise
1 Average for the existing concept portfolio
41
PROFITABLE GROWTH
HOTEL CONCEPTS
We will roll out our powerful concept architecture across our markets
Family
Adult
Premium
Developed
together with chosen hotel partners
Budget
42
PROFITABLE GROWTH
HOTEL CONCEPTS
We have concrete plans to grow the number of passengers in our concept hotels ~4x in five years
Indicative concept hotel expansion plan
millions of passengers 2.0
~60% of customers in concept hotels expected to be families in 2016/17

0.5 0.2 0.2 11/12 # of hotels in operation 12/13 13/14
0.4
1.5 0.3 0.6 0.5 0.5 0.6
Sunwing
Smartline (family) Family concept (tbd) Sunprime/ Sentido Smartline (adult)
We have current properties that can be converted into concept hotels Our hotel expansion programme is already underway Our concept hotel bookings for Summer 13 are more than 25% up vs. 2012
14/15
15/16
16/17
66
220
250
43
PROFITABLE GROWTH
HOTEL CONCEPTS
We aim to expand concept hotels cash neutrally over five years

2013 - 2017 Net cash development
ILLUSTRATIVE
Required investments for concept expansion will start in 2013 Savings from improved 3rd party hotel contracts and exiting underperforming hotels will help fund initial expansion Savings in our current market budgets will be reallocated to ensure focus on our own concept hotels The expansion of successful products is aimed to be cumulatively cash flow neutral after five years
We will maintain a slate of next in line properties to develop so that we can accelerate concept rollout if hotel savings over-deliver


Introduction and market context Successful, exclusive, international hotel concepts

Single customer gateway to personalised product and service recommendations Execution supported by brand and technology
45
PROFITABLE GROWTH
NEW PRODUCTS AND SERVICES
Our research helped define 4 areas of product innovation

Flexibility Seasonality Holiday types Trusted Range Decision making
73% of travellers book flexibly and, of those, 49% are overwhelmed by choice
Despite our strength in Sun & Beach, we are under-represented in Winter Sun in the UK
77% of our Sun & Beach customers who took city breaks last year booked with another provider The second most important driver of purchase in city breaks is range and choice Women make more travel bookings than men 43% of travellers with families select destinations that their children will enjoy
Innovation in dynamic packaged Sun & Beach New dynamic packaged holiday types Trusted fundamentals High Tech Services
Source: GPL customer survey; Meredith Corporation Women & Travel survey, 2005
46
PROFITABLE GROWTH
We have developed a full innovation funnel

Ideas Ideas under development
The 48 hour weekend Travel entertainment Aquamania High quality all inclusive basics ride the slide Flexible payment Concierge Holiday+ Cruise Thomas Cookies SuperFAQ Other hotels Beach essentials Season champion Well meet again Grand tour Annual vacation bundle Pre-travel games Packing list Trade your holiday Top 10 lists Multi-centre Payment schemes: Travel entertainment Work filter retreats Expert customer support Open community Safety and reassurance What you need to know Hot deal holidays Relive the moment Loyalty programme Make your Own holiday Nature breaks
Ideas ready for concept testing
Winter Sun Smartline City labels Trusted fundamentals Community engagement

We have a clearly defined innovation process and, for each idea, we have a designated leader responsible for developing the business case
PROFITABLE GROWTH
Examples of product and service innovation we can share today

Winter Sun Smartline City labels
City Romance City Culture
Trusted fundamentals
Community Engagement
City Budget
City Eat
Leverage our exclusive Budget, quality hotels Play at scale in the Broad range of quality concept hotels and with great design for second largest holiday assured holiday assets year round the smart traveller type elements (e.g., rooms) to meet customer needs We have done this before in Northern Europe; it now has our lowest level of holiday seasonality Smartline has tested well in Germany and is on track for 70,000 guests in Year 1 Our new approach to hotel procurement will give us a low-cost base to deliver our new city themes Pool of 85,000 properties (through Hotels4U) that can be quality assured at low cost
Deeper engagement with customers to drive conversion, wallet share and loyalty Large reservoir of digital talent in our e-commerce centre of excellence to drive our service innovation


Introduction and market context Successful, exclusive, international hotel concepts New portfolio of flexible, trusted products

49
PROFITABLE GROWTH
SINGLE CUSTOMER GATEWAY
We are not starting from scratch
We have strong digital credentials

First major high street travel agency in UK to offer online booking Last year, we had over 310m visits to our websites ThomasCook.com was labelled #5 travel/e-travel site in 2012 eDigital Research Best Site benchmark
50
PROFITABLE GROWTH
We aspire to have the highest share of bookings online for a major tour operator
Target share of passengers booking online
2014/15 targets by segment

UK Continental Europe Germany, Austria, Switzerland West/East Europe
>55%
50% 34% Northern Europe
(>30% in 16/17)
Airlines
>12%
>40%
>75%
2011/12 2014/15
>75%
PROFITABLE GROWTH
We have a strong team focused on delivering rapid results

Focus
Far fewer key brands and websites just 3 in the UK and 1 in Germany Important functionality enhancements to double conversion in the UK Extension of our product offering in hotels-only and e-packaging in Germany Increasing our investment in offline advertising, PPC and SEO in line with peers
Conversion
New traffic Safe passage
Investing in customer engagement tools and techniques to ensure safe passage across channels We have already turbocharged our centre of excellence to deliver cutting edge digital innovations to the markets
Leadership
PROFITABLE GROWTH
We will create a single, consistent omni-channel gateway to personalised recommendations drawn from our full range of products and services
Omni-channel
PC Mobile Store Phone Destination Rep
Smart filter
Recommendations from full range

Concepts New Products
Trusted fundamentals High-tech services
PROFITABLE GROWTH
We are already moving on this and expect to see more in the weeks and months to come
Optimised mobile web Prototype tablet application Gamified on Social media
Thomas Cook UK
See what John Smith packed for his holiday! Pack your suitcase now!
54


Introduction and market context Successful, exclusive, international hotel concepts


4 We have clear targets
55
PROFITABLE GROWTH
EXECUTION
We will simplify and make best use of our brand portfolio

Strong brand
Thomas Cook is the travel and tour operator Superbrand Neckermann, Spies, Ving, and Thomas Cook are iconic brands in Central and Northern Europe
High Trust
Trust in TC brand 9% higher than market average 87% of our customers say If something goes wrong with my holiday Thomas Cook will sort it out
We will optimise our brand portfolio around our core business
Long and proud history

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 travel operator Thomas Cook has been a trusted brand since 1841
56
PROFITABLE GROWTH
EXECUTION
Example: Successful brand optimisation pilot in Northern Europe

NE is driving a unified customer experience
Pilot has been very successful, even in very competitive and high margin market Early bookings increased by 17% and load factor for Summer 13 is up 4.3% vs. last year Customers trust the Ving brand and embrace the new logo, associating it with sun and warmth Website in Sweden awarded Best online travel site in industry competition
Eliminated old differentiated logos Created clear link between travel operator, airline, and concept hotels Unified online platforms under Heart logo is High Tech High Touch
Total numbers of web-sessions increased by 20% compared with last year Substantial increase in activity on Twitter and Facebook around launch
PROFITABLE GROWTH
EXECUTION
Our plan continues to build on previous years technology investments

We are building on systems including
Dynamic packaging Component-based pricing
Ireland
Currently supported countries
Industry-standard yield management ThomasCook.com web platform ~20k hotels that we can package dynamically
UK Netherlands Belgium Germany Czech Republic Austria France Switzerland
Poland
Globally scalable architecture

58
Currently being rolled out to the UK and Ireland

PROFITABLE GROWTH
EXECUTION
Our technology roadmap supports the delivery of our business strategy

Business strategy Strategic IT programmes Unifying the inventory of concept hotels to support global access across markets Extending access to new suppliers to extend our trusted fundamentals offer beyond 70-100k hotels Rolling out dynamic packaging across all markets Building a pricing engine capability based on yield and personalised customer spend profiles The investment required for these IT programmes (at ca. 60m p.a. over 3 years) is only modestly higher than historic Group IT capex of ca. 55m p.a. from 2010-12 This capex will support the strategy and the cost out opex savings
Successful, exclusive, inter-national hotel concepts New portfolio of flexible, trusted products
Single customer gateway Supplying single-entry, multi-channel interaction with customers to personalised product Micro-segmentation and recommendation engines and service recommento offer personalised offers dations
59
PROFITABLE GROWTH
EXECUTION
A differentiated strategy with a simpler and more compelling customer focus

Differentiated from our traditional competitors
Unleashing the power of the simplified Thomas Cook brand portfolio Proven, exclusive, international concept hotels drive higher trust, loyalty and margin premiums Leverage of cutting-edge technology to enable personalised product and service recommendations Seamless omni-channel integration ensures safe passage and strong conversion Year-round, individual customer relationships
Differentiated from OTAs

Quality assured inventory travellers can trust ATOL protection gives customers the confidence we will help if something goes wrong
Personalised recommendations based on deeper customer understanding and simplification of information flow based on their history, preferences and behaviour
More comprehensive range of supplementary products and services
PROFITABLE GROWTH
EXECUTION
What will be different and why we will succeed

What we will not do What we will do
Re-direct hotel investment onto proven concepts that earn premium returns Manage a structured innovation process Quality assure every part of every product we offer Target the highest share of online bookings for a tour operator Consolidate our brand portfolio
Concept hotels New portfolio Single gateway Brand and technology
Operate non-performing hotels and destinations Add complexity unless it meets local customer needs Become a full service OTA Offer an inconsistent experience across channels Reinvent our IT investments from scratch
Simplification Execution
61
PROFITABLE GROWTH
EXECUTION
Three horizons of impact

Horizon 3 Horizon 2
1-3 years 3-5+ years
Horizon 1
0-2 years Expand concept hotels Launch first wave of new products, e.g., scale-up of dynamic packaging Higher online penetration First wave of high tech services innovation Continue concept hotels expansion (incl. Sunwing) Expansion of trusted fundamentals Full roll out of single point of entry and high tech services
Leading tour operator on-line penetration Further product expansion to capture fast growing market sectors
62

We aim to deliver profitable growth
4 We have clear targets

Michael Healy | Group CFO
63
CLEAR TARGETS
Targets and KPIs

FY12
Targets
New Product Revenue Web Penetration Cost out / Profit Improvement 34% 60m Nil 11%
64
FY15
> 500m >50% > 350m >3.5% > 1.5% > 5% > 60%
KPIs
Sales CAGR1 Underlying Gross Margin Improvement2 UK EBIT Margin Cash Conversion3
1 CAGR from FY13 to FY15 including New Product Revenue 2 Underlying gross margins, adjusted for disposals and shop closures 3 Free cash flow post exceptionals and before capital expenditure / EBITDA
Closing thoughts
We are demonstrating we can drive new revenues We are taking out cost and we expect more to come
These ongoing
We are improving working capital management
We have assets we are able to sell We have stable and more visible free cash flow
65
improvements give us real options
66
Biographies
Harriet Green
joined the Group as Group CEO on 30 July 2012. Prior to this, she was CEO of leading high service technology distributor Premier Farnell plc. Harriet is a global executive with extensive, multi-channel business leadership experience of the worldwide technology and industrial markets. She has driven innovation and strategic transformation through profitable global growth strategies and delivered industry leading results.
Michael Healy
joined the Group on 14 May 2012 and became Group CFO on 1 July 2012. Prior to this, he was Group Finance Director of Kwik-Fit Group. Michael has considerable international experience across a broad range of industries and was previously Chief Operating Officer and Finance Director of the Hong Kong listed First Pacific Company Limited and subsequently Chief Financial Officer of ebookers plc.
Dr. Peter Fankhauser

joined the Group in May 2001 and became CEO UK & Continental Europe on 1 November 2012. Prior to this he was CEO Continental Europe, a role he took up in June 2007. Peter has over twenty years of experience in the travel market and, before joining Thomas Cook, was responsible for managing and growing the European division and overseas businesses of Kuoni.
Christoph Debus
joined the Group in September 2012 as Global Head of Air Travel. Christoph worked with the Group previously as MD and CFO for Condor, before he joined Air Berlin as COO in 2009. At Air Berlin, he was responsible for Operations, IT, Procurement, HR and IT/Processes. Prior to joining Condor in 2005, he was a partner with Roland Berger Strategy Consultants in Munich, where he specialised in Aviation/ Tourism, Automotive and Restructuring/ Corporate Strategy.
John Straw
is an award winning digital entrepreneur who specialises in digital marketing and search. Over the last 16 years he has started a number of significant digital marketing companies, one of which he sold to Microsoft and one ultimately to Google. John will also chair Thomas Cooks exciting new Digital Advisory Board, which brings together internal and external experts with specific digital knowledge and expertise to guide our journey in this area.
67
Glossary (1/2)
Thomas Cook & corporate
CE
Continental Europe
Industry & market

Ancillary services
Non-core travel services such as travel insurance, care hire insurance, airport parking, airport lounges, and airport hotels
Differentiated product
Core markets Headroom IMS
UK, Continental Europe, Northern Europe Liquidity buffer after anticipated operations and investments Interim Management Statement
TUI term for a hotel that can only be found from TUI either because it is a TUI concept, or because TUI has exclusive access or because it has unique features
Exclusive property
Thomas Cook has access to all the bed nights in the property (either at a Group or country level)
Codeshare
Aviation business agreement where a flight sold by one airline can be operated by another airline
DIY travellers
Ground handling
Do It Yourself travellers more likely to opt for component travel instead of package holidays
Servicing of an aircraft (e.g. refueling) while it is on the ground (usually parked at a terminal gate)
Component booking
Segments
Internal Thomas Cook businesses: UK, France, Continental Europe, Northern Europe, North America, Airlines Germany
The ability to put together a holiday from one or more stand-alone (and individually priced) beds, seats or other units of inventory
Dynamic package
Holiday type
Thomas Cook India
Concept
Indian arm divested in May 2012
Unified gateway approach
Ability to access all Thomas Cook content regardless of what channel the customer takes, and focusing our online content in much fewer places
An exclusive, customer-facing proposition made up a defined set of features that creates loyalty via consistent delivery of a holiday experience
A holiday comprising more than one seat or bed that is bundled in the moment by the customer usually from dynamically sourced inventory and offered for a single combined price by the operator
The traditional industry way of describing a holiday based on its location or activity (e.g., Sun&Beach, city)
Label
Exclusive distribution
Thomas Cook channels are the only place where customers can access a given product
A customer searchable description for a holiday that carries a consistent set of features that match customer expectations (e.g., City Romance, Family Comfort)
68
Glossary (2/2)
Industry & market (continued)
Limited range
The number of non-exclusive, non-risk hotels that meet our quality control standard that we will contract
Web & IT
Tailoring Amplification rate
The actions we take to select the channel, information and product a customer sees so that it meets their needs
A measure of how postings on social media websites are shared e.g. number of likes, retweets and +1s
PPC
Pay per click
Product extension
Load factor
Measure of airline utilisation: number of passenger-kilometres travelled as a percentage of the total seat-kilometres available
Third-party product
Content management
OTA
Any property or package where Thomas Cook is not exclusive and has not taken risk through pre-commitments
Online Travel Agency
TO
Enables business to manage, track and source hi-quality, channel-specific content (e.g., faster-loading pictures for mobiles, richer pictures/videos for tablets)
Enables the business to sell nontraditional products (e.g., cruises) alongside hotels and flights
SEO
Search engine optimisation
Quality control
Tour operator
Gameification
Social engagement
The checks that we do at point of contracting a hotel and ongoing to ensure a hotel can consistently deliver a desired customer experience
Tour Operator
Company combining travel, accommodation and/or entertainment to create a holiday
Static packaging
The application of typical elements of game playing (e.g. point scoring, competition with others, rules of play) to other areas of activity, typically to encourage engagement with a product or service
The proportion of users who have liked, commented, or shared our content in just the past 7 days
A pre-defined bundle of seat and bed that is fixed based on largely committed inventory and which can be offered at a given price to a broad range of customers well in advance of the season
Omni-channel
Seamless end consumer experience across multiple retail channels e.g. single pricing on-and off-line
69

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Transforming Thomas Cook

March 13, 2013

Thomas Cook Group plc

Disclaimer and cautionary statement

Thomas Cook Group plc

Key messages and agenda for today

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

Thomas Cook Group plc

Key messages and agenda for today

1 We are ahead of where we said we would be

We have clear targets

Thomas Cook Group plc

Thomas Cook has a solid foundation

with a strong customer base

Turnaround and sustainable transformation required

Industry-leading concepts to which our customers are loyal

We are already delivering better performance

Full year outlook encouraging

Thomas Cook Group plc

Driven by a strong team focused on results

More expected to come

140 80 60 2011 UK Turnaround

Already identified for FY13-FY15

Thomas Cook Group plc

We have rapidly simplified and restructured our business to drive performance

Actions in first 6 months of turnaround:

An industry innovative approach to hotel sourcing

Our strategy to drive profitable growth

Trusted Personal High Tech

Expand successful, exclusive, international hotel concepts

Support execution with our trusted brand and a consistent IT platform

Thomas Cook Group plc

Key messages and agenda for today

2 We have stabilised the business and are delivering change fast

Michael Healy | Group CFO

Thomas Cook Group plc

REDUCED COSTS, INCREASED CASH

We need to take out costs

Thomas Cook Group plc

REDUCED COSTS, INCREASED CASH

Our profit improvement programmes are delivering

FY12 FY13 FY14 FY15

Unlocking savings through Group-wide approach Integrated air travel strategy

Thomas Cook Group plc

REDUCED COSTS, INCREASED CASH

Reduced duplication and efficiency improvements across airlines

Overhead and crew Increased revenues

FY15 benefit target

Savings from aircraft costs, fuel, ground handling

REDUCED COSTS, INCREASED CASH

Improving organisational structure and footprint

FY15 benefit target

REDUCED COSTS, INCREASED CASH

Streamlining our product, infrastructure, and technology

FY15 benefit target

REDUCED COSTS, INCREASED CASH

We have a positive and predictable working capital cycle

Our WC cycle is seasonal

Thomas Cook Group plc

REDUCED COSTS, INCREASED CASH

Working capital governance