Market Update

USA Capital and Operational Review

27 May 2019

DISCLAIMER

This presentation contains forward-looking statements and projections. These reflect thl's current expectations, based on what it thinks are reasonable assumptions. The statements are based on information available to thl at the date of this presentation and are not guarantees or predictions of future performance. For any number of reasons, the future could be different and the assumptions on which the forward-looking statements and projections are based could be wrong. thl gives no warranty or representation as to its future financial performance or any future matter. Except as required by law or NZX listing rules, thl is not obliged to update this presentation after its release, even if things change materially. Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as an indication of future performance.

This presentation has been prepared for publication in New Zealand and may not be released or distributed in the United States.

This presentation is for information purposes only and does not constitute financial advice. It is not an offer of securities, or a proposal or invitation to make any such offer, in the United States or any other jurisdiction, and may not be relied upon in connection with any purchase of thl securities. thl securities have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States, except in transactions exempt from, or not subject to, the registration of the US Securities Act and applicable US State securities laws.

This presentation may contain a number of non-GAAP financial measures. Because they are not defined by NZ GAAP or IFRS, thl's calculation of these measures may differ from similarly titled measures presented by other companies and they should not be considered in isolation from, or construed as an alternative to, other financial measures determined in accordance with NZ GAAP.

This presentation does not take into account any specific investors objectives and does not constitute financial or investment advice. Investors are encouraged to make an independent assessment of thl. The information contained in this presentation should be read in conjunction with thl's latest financial statements, which are available at: www.thlonline.com

USA CAPITAL AND OPERATIONAL REVIEW

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KEY ACTIONS FROM OUR REVIEW

  • We expect our USA business to generate positive operating cash flow in FY2020 of approximately US$35M.
  • FY2020 capital expenditure in the USA business has been lowered by approximately US$40M from our previous plan.
  • FY2020 fleet size for both Road Bear and El Monte RV will be lower than in FY2019 and FY2018.
  • Targeting a reduction in funds employed in the USA business of approximately US$20M by the end of FY2020.
  • Decisive changes have been made to the organisational structure of the USA business.
  • We expect to emerge from the current market conditions in a stronger position within North America.

USA CAPITAL AND OPERATIONAL REVIEW

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Our strategy and direction are right.

We need to keep acting, reflecting, changing and upping the ante on delivery.

CEO COMMENTARY

Despite the current market conditions, our USA performance for FY2019 to date is unacceptable. At thl, we are of the view that we should be able to deliver regardless of what the broader market conditions are doing, given our relatively small size compared to the total size of the market.

We've had a detailed review and have a clear plan, which has commenced at pace.

Given today's market conditions, we expect that our USA FY2020 result will also be impacted. However, there is nothing which indicates our fundamental Build/Buy, Rent and Sell model is broken or that we have a poor business.

We do not see the current performance being a long-term issue.

We have reviewed our company strategy and remain confident in our direction despite these immediate USA issues.

We are extremely focused on getting the USA business back in shape.

USA CAPITAL AND OPERATIONAL REVIEW

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THE FOUR PILLARS OF OUR REVIEW

PEOPLE

REVENUE

Continued strong focus on growing the international rental market and adapting our approach to the domestic market.

USA CAPITAL AND OPERATIONAL REVIEW

Ensuring we have the right people and

capability in the USA.

THE FOUR

PILLARS

CAPITAL

Reducing capital to reflect softer market

conditions. FY2020 purchase decisions are the

point of impact.

OPERATIONS

Ensuring we are even tougher about reducing costs and extracting synergies between Road Bear and El Monte RV.

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THL - Tourism Holding Limited published this content on 27 May 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 27 May 2019 02:58:04 UTC