TUI AG (TUI)
TUI AG: TUI GROUP HALF-YEAR FINANCIAL REPORT 1 OCTOBER 2020 - 31 MARCH 2021
12-May-2021 / 08:00 CET/CEST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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TUI GROUP
Half-Year Financial Report
1 October 2020 - 31 March 2021
Contents
Interim Management Report
H1 2021 Summary
Report on changes in expected development
Structure and strategy of TUI Group
Consolidated earnings
Segmental performance
Financial position and net assets
Comments on the consolidated income statement
Alternative performance measures
Other segment indicators
Corporate Governance
Risk and Opportunity Report
Unaudited condensed Consolidated Interim Financial Statements
Notes
General
Accounting principles
Group of consolidated companies
Acquisitions - Divestments
Notes to the unaudited condensed consolidated income statement of TUI Group
Notes to the unaudited condensed consolidated statement of financial position of TUI Group
Responsibility statement
Review Report
Cautionary statement regarding forward-looking statements
Financial calendar
Contacts
Interim Management Report
TUI Group - financial highlights
EUR million H1 2021 H1 2020 adjusted Var. % Var. % at constant currency
Revenue 716.3 6,638.7 - 89.2 - 89.0
Underlying EBIT1
Hotels & Resorts - 198.3 56.1 n. a. n. a.
Cruises - 153.3 26.9 n. a. n. a.
TUI Musement - 62.0 - 28.9 - 114.5 - 117.6
Holiday Experiences - 413.6 54.2 n. a. n. a.
Northern Region - 418.3 - 415.2 - 0.7 - 2.4
Central Region - 272.0 - 179.5 - 51.5 - 51.5
Western Region - 159.8 - 189.6 + 15.7 + 16.6
Markets & Airlines - 850.1 - 784.3 - 8.4 - 9.1
All other segments - 45.1 - 64.6 + 30.2 + 29.9
Underlying EBIT - 1,308.8 -794.8 - 64.7 - 66.5
EBIT1 - 1,298.5 -746.0 - 74.1
Underlying EBITDA - 856.1 -266.0 - 221.9
EBITDA2 - 831.5 - 196.9 - 322.4
Group loss - 1,498.1 - 815.0 - 83.8
Earnings per share EUR - 1.83 - 1.46 - 25.3
Net capex and investment - 108.4 287.2 n. a.
Equity ratio (31 March)3 % 1.3 15.6 - 14.3
Net financial position (31 March) - 6,813.1 - 4,902.5 - 39.0
Employees (31 March) 36,029 53,525 - 32.7
Differences may occur due to rounding.
This Quarterly Statement of the TUI Group was prepared for the
reporting period H1 FY2021 from 1 October 2020 to 31 March
2021.
1 We define the EBIT in underlying EBIT as earnings before
interest, income taxes and result of the measurement of the Group's
interest hedges. For further details please see page 14.
2 EBITDA is defined as earnings before interest, income taxes,
goodwill impairment and amortisation and write-downs of other
intangible assets, depreciation and write-downs of property, plant
and equipment, investments and current assets.
3 Equity divided by balance sheet total in %, variance is given
in percentage points.
H1 2021 Summary ? Group revenue of EUR716m, down 89% as a result
of extended travel restrictions imposed across our key European
markets for the majority of the first half. ? Within Hotels
& Resorts, 122 hotels were open at end of the quarter
reflecting both the usual winter seasonality
and limited operations from travel restrictions. ? TUI Cruises
and Hapag-Lloyd Cruises operated five ships during the first half,
offering itineraries to the Baltic
and North Sea, and Greek Islands in the first quarter and to the
Canary Islands in the second. ? Markets & Airlines, took away
684k customers on holiday during the period, demonstrating the
continued desire to
travel when restrictions allow. ? Group underlying EBIT loss of
EUR1,309m reflecting our continued cost discipline, contribution
from operational
opportunities, helping to reduce average monthly underlying EBIT
loss to EUR218m per month. ? During the second quarter, we
concluded all elements of our third support package of EUR1.8bn,
including >EUR500m fully
subscribed rights issue. ? Additionally, we successfully placed
EUR400m convertible bonds post balance sheet date. ? Our available
liquidity1 as at 7 May 2021 amounts to EUR1.7bn. ? Global
Realignment Programme on track to achieve our cost savings target
of EUR400m p.a by FY2023. Reflecting our
accelerated plans to transform into a more agile and leaner
business, we expect to deliver 50% of our targeted
savings by end of FY2021. ? Pipeline of 2.6m customers booked
for Summer 2021 season. Planned capacity of 75% (of Summer 2019)
for our upcoming
peak Summer months (Q4), with our re-opening portfolio focused
on destinations such as Greece, Balearics and
Canaries with anticipated good vaccinations rates and low
infection rates. ? The continued vaccination progress across our
key customer markets and destinations, combined with more
testing,
and comprehensive hygiene measures throughout our eco-system,
should enable the safe return to holidays this
Summer. ? Insight survey2 results tell us our customers value a
strong brand, flexibility, comprehensive health and safety
protocols with a good customer experience during these
unprecedented times. TUI, with its integrated model, strong
brand, and in-destination service and online 24/7 support, is
the model of choice for many holiday makers.
1 Available liquidity defined as unrestricted cash plus
committed lines including third support package (contains KFW
credit facility provided by KfW of EUR200m as of end of May) and
convertible bonds
2 TUI Consumer Travel Behaviour Survey, August 2020
Completion of Third Support Package
Our third support package as announced on 2 December 2020
amounting to EUR1.8bn, agreed with our shareholders, a syndicate of
underwriting banks, KfW and the German government (WSF) was
successfully concluded in the period, comprising the following
components: ? a capital increase with subscription rights of
>EUR500m ? a silent participation, convertible into shares by
the WSF of EUR420m (IFRS equity accounted) ? a non-convertible
silent participation by the WSF of EUR671m (IFRS equity accounted)
? an additional credit facility provided by KfW of EUR200m
EUR400m placement of convertible bonds
Post balance sheet date on 16 April 2021, we successfully
completed the placement of senior unsecured convertible bonds for
EUR400m. These bonds have been offered at a coupon rate of 5% and
were 2 times oversubscribed. They utilise 68% of authorised capital
resolved at our recent AGM, representing around 75m underlying
shares.
Unless previously converted, redeemed or repurchased and
cancelled, the convertible bonds will be redeemed at their
principal amount on 16 April 2028. Investors also have the
possibility to convert the bonds into new and/or existing no-par
value ordinary registered shares of TUI. The initial conversion
price was set at 5.3631 EUR, representing a conversion premium of
25% above the reference share price of 4.2905 EUR.
With the successful offering, we plan to start the refinancing
of loans from the COVID-19 support packages, in addition to
strengthening our liquidity in the short-term.
Liquidity Position/Cash Outflow
Available liquidity1 as at 7 May 2021 amounts to EUR1.7bn.
Bearing in mind the typical seasonal swings, and combined with
clear signs of pent-up demand as evidenced by the immediate spike
in bookings when a destination is re-opened, we are fully confident
that the typical seasonal inflow usually seen in Q2, will
materialise as we head towards the peak Summer season.
Our assumption for Q3 FY2021, is for departure volumes being
muted in the light of travel restrictions. We however anticipate
significant working capital inflow once reopening of markets are
confirmed and destinations are announced, in line with our planned
capacity for Q4.
Our assumption for Q4 FY2021, is for significant positive
contributions from strong volumes and normalised level of
operations.
1 Available liquidity defined as unrestricted cash plus
committed lines including third support package (contains KFW
credit facility provided by KfW of EUR200m as of end of May) and
convertible bonds
Net debt
Net financial position improved to EUR6,813m versus our net debt
position of EUR7,177 as at 31 December 2020 (Q1). The EUR364m
decrease in net debt in the second quarter predominantly reflects
net cash proceeds from our capital raise and the silent
participations of the WSF.
The WSF measures comprise a silent participation convertible
into shares in TUI of EUR420m (Silent Participation I) and a second
silent participation of EUR671m. At 31 March 2021, Silent
Participation I was fully paid in and Silent Participation II in
the amount of EUR500m. In the IFRS consolidated financial
statements, the silent participations are shown as equity due to
their nature and are therefore not included in the Group's net
debt.
With the successful placement of EUR400m convertible bonds post
balance sheet date, we have taken the first step towards
refinancing our government facilities. As international leisure
travel resumes and global markets begin to recover, it is our
priority to rebuild a robust financial profile and return to a
gross leverage ratio target of less than 3x. The Group continues to
explore measures to accelerate de-leveraging and ensure the
appropriate capitalisation to support growth over the longer
term.
Trading Update ? Summer 2021 bookings1 including amendments and
voucher re-bookings, down 69% versus Summer 2019 (undistorted
by
COVID-19). ? 2.6m customers booked for our Summer 2021
programme, which is a small reduction since our Q1 update,
reflecting
customers choosing to defer their booking to future seasons due
to the lack of clarity provided by governments on
lifting of travel restrictions. ? Our capacity plans of 75% (for
Q4 peak summer, compared to 2019 programmes) remains in line with
our AGM update on
25 March 2021. We will be focussed on a reopening portfolio of
destinations with expected well vaccination and low
incidence rates. Destinations will include the Greek islands,
the Balearics, the Canaries and Portugal. More than
60% of our planned capacity for Summer 2021 are to destinations
with anticipated low incidence rates. ? Summer 2021 ASP1 is up 22%,
and continues to be driven by both pricing and mix, with higher
level of packaged
holidays booked versus prior year. ? We anticipate TUI Cruises
to operate a phased restart with summer itineraries from May, with
its full Mein Schiff
fleet of seven ships to be in operation by Q4. Hapag-Lloyd
Cruises is currently sailing with Europa 2, with Europa
to resume in Q4. Expedition Class Hanseatic nature and Hanseatic
inspiration to resume end of May with short
cruises, with their newest ship Hanseatic spirit scheduled to
join from August. ? Marella is offering UK cruise itineraries with
Explorer and Explorer 2 from end of June. From August, Discovery
and
Discovery 2 are scheduled to operate cruises to the
Mediterranean. ? Continued customer appetite and intention to
travel for future seasons: ? Winter 2021/22 - UK bookings1 up 17%,
? Summer 2022 bookings - UK bookings1 up 293%
1 Bookings up to 2 May 2021 compared to respective bookings for
2019 programmes (undistorted by COVID-19) and relate to all
customers whether risk or non-risk
Global Realignment Programme
As one of our self-help measures, we announced our Global
Realignment Programme to deliver targeted savings across the group
of EUR400m per annum by FY2023. Projects are well underway across
core functions, Markets & Airlines and TUI Musement (formerly
Destination Experiences) and we are on track to achieve almost 50%
of our targeted savings by end of the current financial year. Of
the 8k roles potentially impacted as part of the programme, we have
to date a reduction of 6k FTEs already agreed.
Report on changes in expected development
It remains difficult to forecast the further course of the
pandemic and its impact on customer behavior. In view of these
considerable uncertainties, the Management Board continues to
believe that it is not in a position to issue a specific forecast
for the financial year2021.
The expectations for the financial year 2021made in the Annual
Report 2020 have been adjusted in the following points.
Due to the travel restrictions in the first half of the year and
the current expectations for the summer season 2021, we now expect
TUI Group revenue (IFRS 16) in financial year 2021 to be down
year-on-year at constant currency rates.
Based on expected gross capital expenditure, divestments and
recoveries from advance payments made for aircraft orders, we
expect cash inflow from net investments in property, plant and
equipment and financial investments to be at least at the
prior-year level in financial year 2021. ? See also TUI Group
Annual Report 2020 page 50
Structure and strategy of TUI Group
Reporting structure
The present Half-Year Financial Report 2021 is based on TUI
Group's reporting structure set out in the Annual Report 2020. ?
See TUI Group Annual Report 2020 from page 26
Group strategy
TUI Group's strategy set out in the Annual Report 2020 should be
continued after the effects of COVID-19 have subsided. ? See TUI
Group Annual Report 2020 from page 23
Consolidated earnings
Revenue
EUR million H1 2021 H1 2020 Var. %
Hotels & Resorts 83.9 300.2 - 72.0
Cruises 1.5 481.6 - 99.7
TUI Musement 18.6 300.4 - 93.8
Holiday Experiences 104.0 1,082.2 - 90.4
Northern Region 159.1 2,187.0 - 92.7
Central Region 337.4 2,209.9 - 84.7
Western Region 102.1 1,075.1 - 90.5
Markets & Airlines 598.6 5,471.9 - 89.1
All other segments 13.6 84.5 - 83.9
TUI Group 716.3 6,638.7 - 89.2
TUI Group (at constant currency) 732.4 6,638.7 - 89.0
Underlying EBIT
EUR million H1 2021 H1 2020 Var. %
adjusted
Hotels & Resorts - 198.3 56.1 n. a.
Cruises - 153.3 26.9 n. a.
TUI Musement - 62.0 - 28.9 - 114.5
Holiday Experiences - 413.6 54.2 n. a.
Northern Region - 418.3 - 415.2 - 0.7
Central Region - 272.0 - 179.5 - 51.5
Western Region - 159.8 - 189.6 + 15.7
Markets & Airlines - 850.1 - 784.3 - 8.4
All other segments - 45.1 - 64.6 + 30.2
TUI Group - 1,308.8 - 794.8 - 64.7
EBIT
EUR million H1 2021 H1 2020 Var. %
adjusted
Hotels & Resorts - 198.4 56.0 n. a.
Cruises - 153.4 26.9 n. a.
TUI Musement - 67.1 - 39.1 - 71.6
Holiday Experiences - 418.9 43.9 n. a.
Northern Region - 441.0 - 423.4 - 4.2
Central Region - 224.1 - 100.5 - 123.0
Western Region - 166.5 - 199.0 + 16.3
Markets & Airlines - 831.7 - 722.8 - 15.1
All other segments - 48.0 - 67.0 + 28.4
TUI Group - 1,298.5 - 746.0 - 74.1
Segmental performance
Holiday Experiences
EUR million H1 2021 H1 2020 Var. %
adjusted
Revenue 104.0 1,082.2 - 90.4
Underlying EBIT - 413.6 54.2 n. a.
Underlying EBIT at constant currency - 422.7 54.2 n. a.
Hotels & Resorts
EUR million H1 2021 H1 2020 Var. %
adjusted
Total revenue 146.8 582.4 - 74.8
Revenue 83.9 300.2 - 72.1
Underlying EBIT - 198.3 56.1 n. a.
Underlying EBIT at constant currency - 204.6 56.1 n. a.
Capacity hotels total1 ('000) 9,418 16,634 - 43.4
Riu 4,782 8,199 - 41.7
Robinson 601 1,337 - 55.1
Blue Diamond 2,032 2,298 - 11.6
Occupancy rate hotels total2 40 75 - 35
(in %, variance in % points)
Riu 41 82 - 41
Robinson 48 67 - 19
Blue Diamond 39 75 - 36
Average revenue per bed hotels total3 64 73 - 13.3
(in EUR)
Riu 55 70 - 20.5
Robinson 92 97 - 5.5
Blue Diamond 93 123 - 24.2
Revenue includes fully consolidated companies, all other KPIs incl. companies measured at equity.
1 Group owned or leased hotel beds multiplied by opening days per quarter
2 Occupied beds divided by capacity
3 Arrangement revenue divided by occupied beds
122 hotels were open as at the end of the period (34% of Group
hotel portfolio), reflecting both the winter seasonality and travel
restrictions currently in place.
Overall H1 occupancy rate declined 35%pts to 40% across our
operating portfolio, reflecting the impact of travel restrictions
across our key European markets throughout most of H1. Average
daily rate declined by 13% to EUR63.5.
Underlying EBIT loss of EUR198m, down EUR254m versus prior year
reflects the factors as outlined above.
Cruises
EUR million H1 2021 H1 2020 Var. %
adjusted
Revenue1 1.5 481.6 - 99.7
Underlying EBIT - 153.3 26.9 n. a.
Underlying EBIT at constant currency - 155.2 26.9 n. a.
Occupancy (in %, variance in % points)
TUI Cruises 35 97 - 62
Marella Cruises - 96 n. a.
Hapag-Lloyd Cruises2 33 77 - 44
Passenger days ('000)
TUI Cruises 354 2,854 - 87.6
Marella Cruises - 1,366 n. a.
Hapag-Lloyd Cruises 21 191 - 88.8
Average daily rates3 (in EUR)
TUI Cruises 104 141 - 26.4
Marella Cruises4 (in GBP) - 146 n. a.
Hapag-Lloyd Cruises2 411 611 - 32.7
1 No revenue is carried for TUI Cruises and Hapag-Lloyd Cruises as the joint venture is consolidated at equity
2 Hapag-Lloyd Cruises prior year KPIs restated to align to TUI Cruises methodology
3 Per day and passenger
4 Inclusive of transfers, flights and hotels due to the integrated nature of Marella Cruises, in GBP
In the first quarter, TUI Cruises operated three ships (Mein
Schiff 1, 2 and 6), offering short "Blue Cruises" around the Baltic
Sea, Greek and Canary Islands. In the second quarter, Mein Schiff 1
and 2 operated with itineraries to the Canaries. H1 average daily
rate of the operated fleet was EUR104, down 26% versus prior year
(H1 FY2020: EUR141) reflecting the shorter average duration and
more local routes of "Blue Cruises". H1 occupancy of the operated
fleet was 35%, reflecting the overall more subdued environment for
departures as a result of travel restrictions as well as adherence
to COVID-19 government safety advice capping the numbers of
passengers on board.
Hapag-Lloyd Cruises operated two ships during the first quarter,
the Europa 2 and Hanseatic inspiration, which offered sailings to
the Baltic Sea and the Canaries. The Europa 2 continued to sail in
the second quarter, offering itineraries to the Canary Islands. H1
average daily rate for the operated fleet was EUR411, down 33%
versus prior year (H1 FY2020: EUR611), reflecting the pricing of
shorter and more local itineraries. H1 occupancy of the operated
fleet was 33% (H1 FY2020: 77%).
Marella Cruises (our UK cruise brand) remained suspended
throughout the period, in line with UK government travel advice,
with our teams in preparation mode for restart towards the end of
Q3.
Underlying EBIT loss of EUR153m, down EUR180m versus prior year,
reflects the limited capacity operated over the period as a result
of travel restrictions. Prior year includes 100% result of
Hapag-Lloyd Cruises (H1 FY2020: Underlying EBIT of EUR22m) which is
now consolidated at equity within the TUI Cruises Joint
Venture.
TUI Musement (formerly Destination Experiences)
EUR million H1 2021 H1 2020 Var. %
adjusted
Total revenue 25.4 423.7 - 94.0
Revenue 18.6 300.4 - 93.8
Underlying EBIT - 62.0 - 28.9 - 114.5
Underlying EBIT at constant currency - 62.9 - 28.9 - 117.6
141K excursions and activities sold, down 90% versus prior year,
reflecting the limited operations throughout the period, resulting
in an underlying EBIT loss of EUR62m, a decline of EUR33m on prior
year.
Online distribution was 50% increasing from 21% in H1 2020,
driven by the successful integration of Musement inventory across
our TUI source markets App.
Markets & Airlines
EUR million H1 2021 H1 2020 Var. %
adjusted
Revenue 598.6 5,471.9 - 89.1
Underlying EBIT - 850.1 - 784.3 - 8.4
Underlying EBIT at constant currency - 855.5 - 784.3 - 9.1
Direct distribution mix1,3 76 73 + 3
(in %, variance in % points)
Online mix2,3 56 49 + 7
(in %, variance in % points)
Customers ('000)3 684 6,265 - 89.1
1 Share of sales via own channels (retail and online)
2 Share of online sales
3 Like-for-like basis excluding disposed entities Berge & Meer and Boomerang
As covered above, due to the extended lockdown measures across
many of our key source markets, operations have been highly limited
for the majority of the first half. A total of 684k customers
departed in the first half, down 89% versus prior year, with around
half departing in the month of October, prior to more recent
restrictions.
Underlying loss of EUR850m reflects the limited capacity
operated over the period.
Northern Region
EUR million H1 2021 H1 2020 Var. %
adjusted
Revenue 159.1 2,187.0 - 92.7
Underlying EBIT - 418.3 - 415.2 - 0.7
Underlying EBIT at constant currency - 425.3 - 415.2 - 2.4
Direct distribution mix1 93 91 + 2
(in %, variance in % points)
Online mix2 76 65 + 11
(in %, variance in % points)
Customers ('000) 119 2,239 - 94.7
1 Share of sales via own channels (retail and online)
2 Share of online sales
Underlying loss of EUR418m, down EUR3m versus prior year. 119K
customers departed in the first six months, down 95% versus prior
year.
Direct distribution increased by 2%pts to 93% (H1 FY2020: 91%)
with online distribution increasing by 11%pts to 76% (H1 FY2020:
65%).
Central Region
EUR million H1 2021 H1 2020 Var. %
adjusted
Revenue 337.4 2,209.9 - 84.7
Underlying EBIT - 272.0 - 179.5 - 51.5
Underlying EBIT at constant currency - 272.0 - 179.5 - 51.5
Direct distribution mix1,3 63 51 + 12
(in %, variance in % points)
Online mix2,3 37 22 + 15
(in %, variance in % points)
Customers3 ('000) 333 2,196 - 84.9
1 Share of sales via own channels (retail and online)
2 Share of online sales
3 Like-for-like basis excluding disposed entities Berge & Meer and Boomerang
Underlying loss of EUR272m, down EUR93m versus prior year. 333K
customers departed in the first six months, down 85% versus prior
year.
Direct distribution increased by 12%pts to 63% (H1 FY2020: 51%)
with online distribution increasing by 15%pts to 37% (H1 FY2020:
22%).
Western Region
EUR million H1 2021 H1 2020 Var. %
adjusted
Revenue 102.1 1,075.1 - 90.5
Underlying EBIT - 159.8 - 189.6 + 15.7
Underlying EBIT at constant currency - 158.2 - 189.6 + 16.6
Direct distribution mix1 86 78 + 8
(in %, variance in % points)
Online mix2 72 61 + 11
(in %, variance in % points)
Customers ('000) 232 1,830 - 87.3
1 Share of sales via own channels (retail and online)
2 Share of online sales
Underlying loss of EUR160m, up EUR30m versus prior year. 232K
customers departed in the first six months, down 87% versus prior
year.
Direct distribution increased by 8%pts to 86% (H1 FY2020: 78%)
with online distribution increasing by 11%pts to 72% (H1 FY2020:
61%).
All other segments
EUR million H1 2021 H1 2020 Var. %
adjusted
Revenue 13.6 84.5 - 83.9
Underlying EBIT - 45.1 - 64.6 + 30.2
Underlying EBIT at constant currency) - 45.3 - 64.6 + 29.9
Underlying EBIT loss was EUR45m, up EUR20m versus prior
year.
Financial position and net assets
Cash Flow / Net capex and investments / Net debt
In the period under review the TUI Group's operating cash flow
continued to be impacted by the travel restrictions imposed by
COVID-19 in March 2020.
At EUR1,476.0m, the cash outflow from operating activities
increased by EUR747.6m year-on-year.
The net debt as of 31 March 2021 increased by EUR1,910.6m to
EUR6,813.1m.
Net debt
31 Mar 2021 31 Mar 2020 Var. %
Financial debt 4,847.9 2,014.4 + 140.7
Lease liabilities 3,377.8 3,922.8 - 13.9
Cash and cash equivalents 1,399.7 1,022.7 + 36.9
Short-term interest-bearing investments 12.9 12.0 + 7.5
Net debt 6,813.1 4,902.5 + 39.0
Net capex and investments
EUR million H1 2021 H1 2020 Var. %
Cash gross capex
Hotels & Resorts 69.9 170.7 - 59.1
Cruises 15.1 43.5 - 65.3
TUI Musement 5.8 7.2 - 19.4
Holiday Experiences 90.8 221.4 - 59.0
Northern Region 5.4 30.9 - 82.5
Central Region 2.5 9.0 - 72.2
Western Region 1.7 11.9 - 85.7
Markets & Airlines* 15.0 60.7 - 75.3
All other segments 32.9 39.4 - 16.5
TUI Group 138.7 321.5 - 56.9
Net pre delivery payments on aircraft - 31.6 - 42.4 + 25.5
Financial investments 21.7 56.9 - 61.9
Divestments - 237.2 - 48.8 - 386.1
Net capex and investments - 108.4 287.2 n. a.
* Including EUR5.4m for H1 2021 (previous year EUR8.9m) cash
gross capex of the aircraft leasing companies, which are allocated
to Markets & Airlines as a whole, but not to the individual
segments Northern Region, Central Region and Western Region.
Cash gross capex in H1 FY 2021 was 56.9 % lower year-on-year,
reflecting our disciplined capex management. Net capex and
investments declined by EUR395.6m.
The divestments related mainly to the sale of Hapag-Lloyd
Kreuzfahrten to our joint venture TUI Cruises and the sale and
lease back of spares and aircraft. Previous year's divestments
included the sale of two German specialist tour operators.
Assets and liabilities
Assets and liabilities
31 Mar 2021 30 Sep 2020 Var. %
Non-current assets 12,205.0 12,647.8 - 3.5
Current assets 2,621.4 2,693.4 - 2.7
Assets 14,826.4 15,341.1 - 3.4
Equity 192.7 218.1 - 11.6
Provisions 2,221.1 2,317.3 - 4.2
Financial liabilities 4,847.9 4,269.0 + 13.6
Other liabilities 7,564.7 8,536.7 - 11.4
Liabilities 14,826.4 15,341.1 - 3.4
Comments on the consolidated income statement
Unaudited condensed consolidated income statement of TUI Group for the period from
1 Oct 2020 to 31 Mar 2021
EUR million H1 2021 H1 2020 Var. %
adjusted
Revenue 716.3 6,638.7 - 89.2
Cost of sales 1,518.2 6,959.7 - 78.2
Gross loss - 801.9 - 321.0 - 149.8
Administrative expenses 387.7 528.4 - 26.6
Other income 10.8 93.1 - 88.4
Other expenses 8.2 3.7 +121.6
Impairment (+) / Reversals of impairment (-) of financial assets - 29.1 23.5 n. a.
Financial income 26.9 22.4 +20.1
Financial expenses 256.0 129.7 +97.4
Share of result of joint ventures and associates - 157.2 41.9 n. a.
Impairment (+) / Reversals of impairment (-) of net investments in joint ventures and
associates
Earnings before income taxes - - 849.0 - 81.8
1,543.7
Income taxes (expense (+), income (-)) - 45.6 - 34.0 - 34.1
Group loss - - 815.0 - 83.8
1,498.1
Group loss attributable to shareholders of TUI AG - - 861.4 - 71.2
1,474.8
Group loss / profit attributable to non-controlling interest - 23.3 46.4 n. a.
The development of TUI Group's revenue and earnings in H1 FY
2021 was still materially impacted by the suspension of the vast
majority of our tour operation, aviation, hotel and cruise
operations as a result of the global travel restrictions in order
to contain the spread of COVID-19. TUI Group's results generally
also reflect the significant seasonal swing in tourism between the
winter and summer travel months, however this period the impact is
less evident due to the COVID-19 pandemic.
Consolidated turnover in H1 FY 2021 declined by 89.2 %
year-on-year to EUR0.7bn. On a constant currency basis, turnover
fell by 89.0 % year-on-year. This decline reflects the worldwide
travel restrictions imposed to stem the spread of COVID-19.
Alternative performance measures
We use underlying EBIT for our management system. We define the
EBIT in underlying EBIT as earnings before interest, taxes and
result of the measurement of the Group's interest hedges.
One-off items carried here include adjustments for income and
expense items that reflect amounts and frequencies of occurrence
rendering an evaluation of the operating profitability of the
segments and the Group more difficult or causing distortions. These
items include gains on disposal of financial investments,
significant gains and losses from the sale of assets as well as
significant restructuring and integration expenses. Any effects
from purchase price allocations, ancillary acquisition costs and
conditional purchase price payments are adjusted. Also, any
goodwill impairments would be adjusted in the reconciliation to
underlying EBIT.
Reconciliation to underlying EBIT
EUR million H1 2021 H1 2020 Var. %
adjusted
Earnings before income taxes - 1,543.7 - 849.0 - 81.8
plus: Net interest expense (excluding expense / income from measurement of interest 239.6 104.7 +128.8
hedges)
plus / less: Expense (income) from measurement of interest hedges 5.6 - 1.7 n. a.
EBIT - 1,298.5 - 746.0 - 74.1
Adjustments:
less: Separately disclosed items - 26.4 - 71.1
plus: Expense from purchase price allocation 16.2 22.3
Underlying EBIT - 1,308.8 - 794.8 - 64.7
The TUI Group's operating loss adjusted for special items
increased by EUR514.0m to EUR1,308.8m in H1 FY 2021. ? For further
details on the separately disclosed items see page 4USD in the
Notes of this Report.
Key figures of income statement
H1 2021 H1 2020 Var. %
adjusted
EBITDAR - 824.0 - 161.9 - 409.0
Operating rental expenses - 7.5 - 35.0 + 78.6
EBITDA - 831.5 - 196.9 - 322.3
Depreciation/amortisation less reversals of depreciation* - 467.0 - 549.1 + 15.0
EBIT - 1,298.5 - 746.0 - 74.1
Income/Expense from the meaurement of interest hedges 5.6 - 1.7 n. a.
Net interest expense 239.6 104.7 + 128.8
EBT - 1,543.7 - 849.0 - 81.8
* on property, plant and equipment, intangible assets, financial and other assets
Other segment indicators
Underlying EBITDA
EUR million H1 2021 H1 2020 Var. %
adjusted
Hotels & Resorts - 87.1 156.4 n. a.
Cruises - 122.3 101.0 n. a.
TUI Musement - 49.5 - 15.3 - 223.5
Holiday Experiences - 258.9 242.1 n. a.
Northern Region - 255.5 - 247.8 - 3.1
Central Region - 209.9 - 103.5 - 102.8
Western Region - 90.7 - 99.5 + 8.8
Markets & Airlines - 556.1 - 450.7 - 23.4
All other segments - 41.1 - 57.4 + 28.4
TUI Group - 856.1 - 266.0 - 221.8
EBITDA
EUR million H1 2021 H1 2020 Var. %
adjusted
Hotels & Resorts - 87.2 156.3 n. a.
Cruises - 122.3 101.0 n. a.
TUI Musement - 50.9 - 19.8 - 157.1
Holiday Experiences - 260.4 237.5 n. a.
Northern Region - 272.1 - 249.5 - 9.1
Central Region - 161.3 - 21.4 - 653.7
Western Region - 93.8 - 103.8 + 9.6
Markets & Airlines - 527.2 - 374.6 - 40.7
All other segments - 44.0 - 59.8 + 26.4
TUI Group - 831.5 - 196.9 - 322.3
Employees
31 March 2021 31 March 2020 Var. %
Hotels & Resorts 9,068 16,655 - 45.6
Cruises* 59 347 - 83.0
TUI Musement 3,856 6,983 - 44.8
Holiday Experiences 12,983 23,985 - 45.9
Northern Region 8,710 11,458 - 24.0
Central Region 7,860 9,701 - 19.0
Western Region 4,163 5,954 - 30.1
Markets & Airlines 20,733 27,113 - 23.5
All other segments 2,313 2,427 - 4.7
Total 36,029 53,525 - 32.7
* Excludes TUI Cruises (JV) employees. Cruises employees are primarily hired by external crew management agencies.
Corporate Governance
Composition of the Boards
In H1 2021 the composition of Boards of TUI AG changed as
follows:
The terms of office of all ten employee representatives on the
Supervisory Board and four of the ten Supervisory Board members to
be elected by the Annual General Meeting ended at the close of the
Annual General Meeting on 25 March 2021.
The following members were elected or re-elected to the
Supervisory Board by this year's the ordinary General Meeting:
Dr. Jutta Dönges, Managing Director of Finanzagentur GmbH; Prof.
Dr. Edgar Ernst, President of the German Financial Reporting
Enforcement Panel (FREP); Janina Kugel, Supervisory Board member
& Senior Advisor and Alexey Mordashov, Chairman of the Board of
Directors of PAO Severstal. Peter Long and Angelika Gifford
resigned from the Supervisory Board at the end of their regular
term of office.
The ten Supervisory Board members representing the employees
were already elected on 8 October 2020. Mark Muratovic and Tanja
Viehl were elected to the Supervisory Board as new employee
representatives. Dr Dierk Hirschel and Michael Pönipp stepped down
at the end of their regular term of office.
The composition of TUI AG's Executive Board changed as follows
in H1 2021:
Birgit Conix, who had been responsible for Finance on TUI AG's
Executive Board since July 2018, left in December 2020. She was
succeeded by Executive Board member Sebastian Ebel.
In January 2021, Peter Krueger took over a newly tailored
Executive Board department as Chief Strategy Officer, combining the
TUI Airlines, hotel and cruise shareholdings as well as his
previous areas of responsibility TUI Strategy and M&A.
The current, complete composition of the Executive Board and
Supervisory Board is published on our website, where it is
permanently accessible to the public.
? www.tuigroup.com/en-en/investors/corporate-governance
Risk and Opportunity Report
Successful management of existing and emerging risks is critical
to the long-term success of our business and to the achievement of
our strategic objectives. Full details of our risk governance
framework and principal risks can be found in the Annual Report
2020.
? Details see Risk Report in our Annual Report 2020, from page
33
Actively Managed: IT Development & Strategy, Integration
& Restructuring, Corporate & Social Responsibility,
Information Security, Brexit
Monitored: Destination Disruption, Customer Demand, Input Cost
Volatility, Cash flow, Legal & Regulatory Compliance, Health
& Safety, Supplier Reliance, Talent & Leadership
Development, Joint Venture Partnerships
Several principal risks materialised simultaneously as a result
of the COVID-19 pandemic, which has led to travel restrictions
across the world, both within the Markets as well as in destination
countries.
There is material uncertainty as to when the TUI Group's travel
activities can be fully resumed. Taking into account the financing
lines still available and the low operating cash inflows in the
last six months due to the pandemic, there is a risk that, in the
absence of an increase in new travel bookings in the coming months
and related customer prepayments from summer 2021 onwards, the TUI
Group will no longer have sufficient financial resources to
continue its business operations without further support measures
or the short-term sale of non-current assets. Overall, there is a
risk that the TUI Group will not be able to continue its business
operations without further external support measures and realise
its assets and service its liabilities in the normal course of
business.
TUI's solvency could also be jeopardized if a further suspension
of covenant compliance is not achieved for the test period ending
on 30 September 2021 and beyond. Furthermore, the loans from KfW
(both tranches) and the initial revolving credit facility totaling
EUR4.6bn will have to be refinanced in FY 2022. Due to the
uncertainty regarding future business development, there is a risk
that refinancing on the banking and capital markets will not be
successful and that an extension of the existing financing or
further government support measures will therefore be
necessary.
During this period of travel suspension, the Executive Board
continues to monitor the key risks, particularly heightened risks
such as customer demand and those that impact the financial profile
(i.e. cost volatility and cashflow) of the Group.
Additionally, TUI Group is preparing to restart operations to
align to the requirements to be introduced by source markets and
destinations once restrictions begin to lift. This is to ensure
resumption of activities at the earliest and in the safest
manner.
Unaudited condensed Consolidated Interim Financial
Statements
Unaudited condensed consolidated income statement of TUI Group for the period from
1 Oct 2020 to 31 Mar 2021
EUR million Notes H1 2021 H1 2020
adjusted*
Revenue (1) 716.3 6,638.7
Cost of sales (2) 1,518.2 6,959.7
Gross loss - 801.9 - 321.0
Administrative expenses (2) 387.7 528.4
Other income (3) 10.8 93.1
Other expenses (4) 8.2 3.7
Impairment (+) / Reversals of impairment (-) of financial assets (20) - 29.1 23.5
Financial income (5) 26.9 22.4
Financial expenses (5) 256.0 129.7
Share of result of joint ventures and associates (6) - 157.2 41.9
Impairment (+) / Reversals of impairment (-) of net investments in joint ventures and (6) - 0.5 -
associates
Earnings before income taxes - - 849.0
1,543.7
Income taxes (expense (+), income (-)) (7) - 45.6 - 34.0
Group loss - - 815.0
1,498.1
Group loss attributable to shareholders of TUI AG - - 861.4
1,474.8
Group loss / profit attributable to non-controlling interest (8) - 23.3 46.4
* For further information, please refer to the section 'Correction of comparative periods'
Earnings per share
EUR H1 2021 H1 2020
adjusted*
Basic and diluted loss / earnings per share - 1.83 - 1.46
* For further information, please refer to the section 'Correction of comparative periods'
Unaudited condensed consolidated statement of comprehensive income of TUI Group for the period from
1 Oct 2020 to 31 Mar 2021
EUR million H1 2021 H1 2020
adjusted*
Group loss - 1,498.1 - 815.0
Remeasurements of defined benefit obligations and related fund assets - 144.3 458.1
Other comprehensive income of companies measured at equity that will not be reclassified 29.9 - 44.8
Fair value gain/loss on investments in equity instruments designated as at FVTOCI - 0.5 - 8.3
Income tax related to items that will not be reclassified (expense (-), income (+)) 32.9 - 103.1
Items that will not be reclassified to profit or loss - 82.0 301.9
Foreign exchange differences 63.1 - 121.4
Cash flow hedges 53.9 - 444.4
Other comprehensive income of companies measured at equity that may be reclassified - 23.3 - 5.0
Income tax related to items that may be reclassified (expense (-), income (+)) - 22.1 106.6
Items that may be reclassified to profit or loss 71.6 - 464.2
Other comprehensive income - 10.4 - 162.3
Total comprehensive income - 1,508.5 - 977.3
attributable to shareholders of TUI AG - 1,498.1 - 984.0
attributable to non-controlling interest - 10.4 6.7
* For further information, please refer to the section 'Correction of comparative periods'
Unaudited condensed consolidated statement of financial position of TUI Group as at 31 Mar 2021
EUR million Notes 31 Mar 2021 30 Sep 2020
Assets
Goodwill (9) 3,007.9 2,914.5
Other intangible assets 552.1 553.5
Property, plant and equipment (10) 3,396.3 3,462.5
Right-of-use assets (11) 3,183.3 3,227.9
Investments in joint ventures and associates 1,092.8 1,186.7
Trade and other receivables (12) (20) 199.9 402.4
Derivative financial instruments (20) 4.5 7.4
Other financial assets (20) 10.1 10.6
Touristic payments on account 128.0 149.9
Other non-financial assets 381.8 423.2
Income tax assets 9.6 9.6
Deferred tax assets 238.7 299.6
Non-current assets 12,205.0 12,647.8
Inventories 71.5 73.2
Trade and other receivables (12) (20) 386.9 486.3
Derivative financial instruments (20) 29.4 88.9
Other financial assets (20) 12.9 14.9
Touristic payments on account 512.1 555.5
Other non-financial assets 132.5 113.4
Income tax assets 71.8 70.9
Cash and cash equivalents (20) 1,399.7 1,233.1
Assets held for sale (13) 4.7 57.2
Current assets 2,621.4 2,693.4
Total assets 14,826.4 15,341.1
Unaudited condensed consolidated statement of financial position of TUI Group as at 31 Mar 2021
EUR million Notes 31 Mar 2021 30 Sep 2020
Equity and liabilities
Subscribed capital 1,099.4 1,509.4
Capital reserves 5,190.4 4,211.0
Revenue reserves - 7,673.2 - 6,168.8
Silent participation 920.0 -
Equity before non-controlling interest - 463.4 - 448.4
Non-controlling interest 656.0 666.5
Equity (19) 192.7 218.1
Pension provisions and similar obligations (14) 1,027.5 983.6
Other provisions 696.4 912.1
Non-current provisions 1,724.0 1,895.7
Financial liabilities (15), (20) 4,578.9 3,691.7
Lease liabilities (16) 2,663.8 2,712.6
Derivative financial instruments (20) 19.0 44.0
Other financial liabilities (17), (20) 5.7 7.2
Other non-financial liabilities 200.3 198.4
Income tax liabilities 80.5 61.3
Deferred tax liabilities 67.2 192.7
Non-current liabilities 7,615.6 6,908.1
Non-current provisions and liabilities 9,339.6 8,803.7
Pension provisions and similar obligations (14) 30.4 31.4
Other provisions 466.8 390.3
Current provisions 497.1 421.6
Financial liabilities (15), (20) 268.9 577.3
Lease liabilities (16) 714.1 687.3
Trade payables (20) 1,190.4 1,611.5
Derivative financial instruments (20) 72.9 274.8
Other financial liabilities (17), (20) 396.0 422.0
Touristic advance payments received (18) 1,664.4 1,770.1
Other non-financial liabilities 430.0 447.8
Income tax liabilities 60.3 82.4
Current liabilities 4,797.0 5,873.2
Liabilities related to assets held for sale - 24.5
Current provisions and liabilities 5,294.1 6,319.3
Total equity, liabilities and provisions 14,826.4 15,341.1
Unaudited condensed consolidated statement of changes in Group equity of TUI Group for the period from
1 Oct 2020 to 31 Mar 2021
Subscribed Capital Revenue Silent Equity before Non-controlling
EUR million capital reserves reserves participation non-controlling interest Total
interest
Balance as at 30 Sep 1,509.4 4,211.0 - - - 448.4 666.5 218.1
2020 6,168.8
Dividends - - - - - - 0.1 - 0.1
Share-based payment - - 0.5 - 0.5 - 0.5
schemes
Conversion of - 34.5 - - 34.5 - 34.5
convertible bonds
Capital increase 509.0 25.9 - 920.0 1,454.9 - 1,454.9
Capital reduction - 919.0 919.0 - - - - -
Other - - - 6.9 - - 6.9 - - 6.9
Group loss - - - - - 1,474.8 - 23.3 -
1,474.8 1,498.1
Foreign exchange - - 50.2 - 50.2 12.9 63.1
differences
Financial assets at - - - 0.5 - - 0.5 - - 0.5
FVTOCI
Cash Flow Hedges - - 53.9 - 53.9 - 53.9
Remeasurements of
defined benefit - - - 144.3 - - 144.3 - - 144.3
obligations and
related fund assets
Other comprehensive
income of joint - - 6.7 - 6.7 - 6.7
ventures and
associates
Taxes attributable to
other comprehensive - - 10.8 - 10.8 - 10.8
income
Other comprehensive - - - 23.2 - - 23.2 12.9 - 10.3
income
Total comprehensive - - - - - 1,498.0 - 10.4 -
income 1,498.0 1,508.4
Balance as at 31 Mar 1,099.4 5,190.4 - 920.0 - 463.4 656.0 192.7
2021 7,673.2
Unaudited condensed consolidated statement of changes in Group equity of TUI Group for the period from
1 Oct 2019 to 31 Mar 2020
Subscribed Capital Revenue Silent Equity before Non-controlling
EUR million capital reserves reserves participation non-controlling interest Total
interest
Balance as at 30 Sep 1,505.8 4,207.5 - - 3,454.2 711.4 4,165.6
2019 (adjusted) 2,259.2
Adoption of IFRS 16 - - - 8.0 - - 8.0 - - 8.0
Balance as at 1 Oct 1,505.8 4,207.5 - - 3,446.2 711.4 4,157.6
2019 2,267.2
Dividends - - - 318.1 - - 318.1 - 0.2 - 318.3
Share-based payment - - 1.6 - 1.6 - 1.6
schemes
Effects on the
acquisition of - - - 0.3 - - 0.3 - 1.3 - 1.6
non-controlling
interest
Group loss (adjusted*) - - - 861.4 - - 861.4 46.4 - 815.0
Foreign exchange
differences - - - 81.7 - - 81.7 - 39.7 - 121.4
(adjusted*)
Financial assets at - - - 8.3 - - 8.3 - - 8.3
FVTOCI
Cash Flow Hedges - - - 444.4 - - 444.4 - - 444.4
Remeasurements of
defined benefit - - 458.1 - 458.1 - 458.1
obligations and
related fund assets
Other comprehensive
income of joint - - - 49.8 - - 49.8 - - 49.8
ventures and
associates
Taxes attributable to
other comprehensive - - 3.5 - 3.5 - 3.5
income
Other comprehensive - - - 122.6 - - 122.6 - 39.7 - 162.3
income (adjusted*)
Total comprehensive - - - 984.0 - - 984.0 6.7 - 977.3
income (adjusted*)
Balance as at 31 Mar 1,505.8 4,207.5 - - 2,145.3 716.6 2,861.9
2020 3,568.0
* For further information, please refer to the section 'Correction of comparative periods'
Unaudited condensed consolidated cash flow statement of TUI Group for the period from
1 Oct 2020 to 31 Mar 2021*
EUR million Notes H1 2021 H1 2020*
Group loss - 1,498.1 - 815.0
Depreciation, amortisation and impairment (+) / write-backs (-) 467.3 549.7
Other non-cash expenses (+) / income (-) 127.8 - 52.3
Interest expenses 251.4 121.3
Dividends from joint ventures and associates 10.0 6.5
Profit (-) / loss (+) from disposals of non-current assets - 3.1 - 88.7
Increase (-) / decrease (+) in inventories 4.4 - 2.4
Increase (-) / decrease (+) in receivables and other assets 540.2 409.0
Increase (+) / decrease (-) in provisions - 235.7 - 132.7
Increase (+) / decrease (-) in liabilities (excl. financial liabilities) - 1,140.1 - 723.8
Cash outflow from operating activities (23) - 1,476.0 - 728.4
Payments received from disposals of property, plant and equipment and intangible assets 228.1 101.0
Payments received from disposals of consolidated companies 31.3 41.4
(less disposals of cash and cash equivalents due to divestments)
Payments received from the disposals of other non-current assets 23.5 20.8
Payments made for investments in property, plant and equipment and intangible assets - 150.0 - 372.7
Payments made for investments in consolidated companies - 0.7 - 41.2
(less cash and cash equivalents received due to acquisitions)
Payments made for investments in other non-current assets - 22.2 - 13.0
Cash inflow / cash outflow from investing activities (23) 110.0 - 263.7
Payments received from capital increases 1,488.9 - 1.0
Payments made for interest increase in consolidated companies - - 1.6
Dividend payments
TUI AG - - 318.1
subsidiaries to non-controlling interest - - 0.6
Payments received from the raising of financial liabilities 844.2 1,085.1
Payments made for redemption of loans and financial liabilities - 314.1 - 70.4
Payments made for principal of lease liabilities - 290.6 - 330.4
Interest paid - 217.2 - 104.4
Cash inflow from financing activities (23) 1,511.2 258.6
Net change in cash and cash equivalents 145.3 - 733.6
Development of cash and cash equivalents (23)
Cash and cash equivalents at beginning of period 1,233.1 1,747.6
Change in cash and cash equivalents due to exchange rate fluctuations 21.4 29.8
Net change in cash and cash equivalents 145.3 - 733.6
Cash and cash equivalents at end of period 1,399.7 1,043.9
of which included in the balance sheet as assets held for sale - 21.1
* The presentation was changed to present more detailed information on cashflows in line with the presentation in the
annual report.
Notes
General
The TUI Group and its major subsidiaries and shareholdings
operate in tourism. TUI AG, based in Hanover and Berlin, Germany,
is TUI Group's parent company and a listed corporation under German
law. The shares in TUI AG are traded on the London Stock Exchange
and the Hanover and Frankfurt Stock Exchanges. In this document,
the term "TUI Group" represents the consolidated group of TUI AG
and its direct and indirect investments. Additionally, the
unaudited condensed consolidated interim financial statements of
TUI Group are referred to as "Interim Financial Statements", the
unaudited condensed consolidated income statement of TUI Group is
referred to as "income statement", the unaudited condensed
consolidated statement of financial position of TUI Group is
referred to as "statement of financial position", the unaudited
condensed consolidated statement of comprehensive income of TUI
Group is referred to as "statement of comprehensive income" and the
unaudited condensed consolidated statement of changes in TUI Group
equity is referred to as "statement of changes in equity".
The Interim Financial Statements cover the period from 1 October
2020 to 31 March 2021. The Interim Financial Statements are
prepared in euros. Unless stated otherwise, all amounts are stated
in million euros (EURm).
The Interim Financial Statements were released for publication
by the Executive Board of TUI AG on 10 May 2021.
Accounting principles
Declaration of compliance
The consolidated half-year financial report for the period ended
31 March 2021 comprise the Interim Financial Statements and the
Interim Management Report in accordance with section 115 of the
German Securities Trading Act (WpHG).
The Interim Financial Statements were prepared in conformity
with the International Financial Reporting Standards (IFRS) of the
International Accounting Standards Board (IASB) and the relevant
Interpretations of the IFRS Interpretation Committee (IFRS IC) for
interim financial reporting applicable in the European Union.
In accordance with IAS 34, the Interim Financial Statements are
published in a condensed form compared with the consolidated annual
financial statements and should therefore be read in combination
with TUI Group's consolidated financial statements for financial
year 2020. The Interim Financial Statements were reviewed by the
Group's auditors.
Going concern reporting in accordance with the UK Corporate
Governance Code The TUI Group covers its day-to-day working capital
requirements through cash on hand, balances and borrowings from
banks. The TUI Group's net debt (financial debt plus lease
liabilities less cash and cash equivalents and less short-term
interest-bearing cash investments) as of March 31, 2021 was
EUR6.8bn.
Net debt
EUR million 31 Mar 2021 30 Sep 2020 Var. %
Financial debt 4.847,9 4.269,0 + 13,6
Lease liabilities 3.377,8 3.399,9 - 0,7
Cash and cash equivalents 1.399,7 1.233,1 + 13,5
Short-term interest-bearing investments 12,9 14,9 - 13,4
Net debt 6.813,1 6.420,9 + 6,1
The global travel restrictions to contain COVID-19 had a strong
negative impact on the Group's earnings and liquidity development
from the end of March 2020. To cover the resulting liquidity
requirements, the Group also received financing measures from the
Federal Republic of Germany in fiscal 2020, in particular in the
form of a credit line from KfW totalling EUR2.85bn and an option
bond from the Economic Stabilization Fund (WSF) in the amount of
EUR150m with option rights to around 58.7m shares. The option bond
was issued to the Economic Stabilization Fund on 1st October 2020.
In the second quarter of fiscal 2021, TUI secured further funds
from a further financing package of EUR1.8bn agreed with Unifirm
Ltd, a banking consortium and KfW as well as the Economic
Stabilization Fund (WSF).
The preconditions for all components of the third financing
package were created at the Extraordinary General Meeting of TUI AG
on January 5, 2021. This included in particular the resolution to
reduce the capital stock from EUR2.56 per share to EUR1.00 per
share and the subsequent capital increase of around EUR509m.
The WSF and TUI AG subsequently signed the agreement on two
silent participations totalling EUR1.091bn. The WSF measures
comprise a silent participation convertible into shares in TUI of
EUR420m (Silent Participation I) and a second silent participation
of EUR671m. At March 31, 2021, silent Participation I was fully
paid in and silent participation II in the amount of EUR500m. In
the IFRS consolidated financial statements, the silent
participations are shown as equity due to their nature and are
therefore not included in the Group's net debt. As part of the
third financing package, KfW also participated in an additional
loan facility together with private banks in the amount of
EUR200m.
TUI AG successfully completed its capital increase on January
28, 2021. The gross issue proceeds amounted to around EUR568m. The
Group's share capital increased nominally by just under EUR509m to
around EUR1.099bn.
TUI used the funds from the capital increase to repay the
outstanding senior bond (October 2016 - October 2021) of EUR300m
ahead of schedule on February 23, 2021, in accordance with the
terms and conditions of the bond. In accordance with the agreement
on the loans granted by KfW under the three financing packages, the
early redemption of the senior bond extended their maturities.
KfW's loans under the stabilization packages totalling EUR3.05bn
will therefore now mature in July 2022.
The revolving credit facility (RCF) and the KfW credit line of
TUI AG are subject to compliance with certain financial targets
(covenants) for debt coverage and interest coverage. The review of
these covenants is currently suspended and will resume in September
2021. Testing will be based on the four most recent reported
quarters prior to September 2021. In light of the ongoing pressures
from the COVID 19 pandemic, we are seeking a covenant suspension
(referred to as a covenant holiday) for the testing period ending
September 30, 2021 and beyond under the RCF.
On April 16, 2021, TUI AG successfully completed the issuance of
a convertible bond. The unsubordinated and unsecured convertible
bond matures in 2028 and has a total nominal amount of EUR400m.
Unless the convertible bonds are converted, redeemed or repurchased
and retired prior to maturity, they will be redeemed at their
nominal value on April 16, 2028. Investors have the option to
convert the convertible bonds into registered shares of TUI.
The successfully placed convertible bond is intended in
particular to initiate the refinancing of loans from the Corona
stabilization packages and also to strengthen the liquidity
available in the short term. Additional funds were generated in H1
2021 from the sale and leaseback of aircraft and spare parts. We
also expect cash inflows from hotel projects in the second half of
the year.
Currently, the TUI Group continues to be affected by the
negative financial impact of the COVID 19 pandemic. At the time of
preparing this report (May 10, 2021), it is not foreseeable when
the international travel restrictions will be lifted again and when
we will be able to fully resume our travel program. In particular,
it is not possible at this time to reliably predict how quickly
vaccination against the COVID-19 virus can be completed in each
country, whether new variants of the virus will emerge, and when
medications will be available to treat COVID-19 disease. Also, a
change in booking behavior cannot be ruled out at this time.
Taking into account the financing lines still available and the
low operating cash inflows in the last six months due to the
pandemic, there is a risk that, in the absence of an increase in
new travel bookings in the coming months and related customer
prepayments from summer 2021, the TUI Group will no longer have
sufficient financial resources to continue its business operations
without further support measures or the short-term sale of
non-current assets. Overall, there is a risk that the TUI Group
will not be able to continue its business operations without
further external support measures and to realize its assets and
service its liabilities in the normal course of business.
TUI's solvency could also be jeopardized if a further suspension
of covenant compliance is not achieved for the test period ending
on September 30, 2021 and beyond. Furthermore, the loans from KfW
(both tranches) and the initial revolving credit facility totalling
EUR4.6bn will have to be refinanced in fiscal 2022. Due to the
uncertainty surrounding future business development, there is a
risk that refinancing on the banking and capital markets may not be
successful and an extension of the existing financing or further
government support measures will be necessary.
The Executive Board assumes that the successful implementation
of the measures described is possible. Due to the dependence of the
TUI Group's solvency on the further development of travel bookings,
risks with regard to the refinancing of the external loans and the
necessary further suspension of compliance with the covenants as
well as the uncertainty with regard to the future development due
to the COVID 19 pandemic, there are significant doubts about the
TUI Group's ability to continue its business operations. In this
respect, there is a material uncertainty with regard to the Group's
ability to continue as a going concern.
Based on the assumptions described above, we expect that,
despite the existing risks, the TUI Group currently has and will
continue to have sufficient funds, both from borrowings and from
operating cash flows, to meet its payment obligations for the
foreseeable future and to continue as a going concern.
In accordance with Regulation 30 of the UK Corporate Governance
Code, the Board of Directors confirms that, in its opinion, it is
appropriate to prepare the Interim Financial Statements on a going
concern basis.
Accounting and measurement methods
The preparation of the Interim Financial Statements requires
management to make estimates and judgements that affect the
reported values of assets, liabilities and contingent liabilities
as at the balance sheet date and the reported values of revenues
and expenses during the reporting period.
At the end of the financial year 2020 TUI assumed that the
travel activities could be resumed in the first half of the
financial year 2021. Due to the later resumption of the travel
business in comparison to the assumptions made at the financial
year end 2020, there are indications that certain assets of TUI
Group companies may be impaired. Accordingly, the assets of TUI
Group, in particular the business entities carrying goodwill, as
well as property, plant and equipment and shareholdings were tested
for impairment as at 31 March 2021.
The impairment test required estimates and judgement regarding
the underlying assumptions, in particular the weighted average cost
of capital (WACC) used as a discounting basis, the growth rate in
perpetuity and the forecasts for future cash flows including the
underlying budget assumptions based on corporate planning. Changes
in these assumptions may have a substantial impact on the
recoverable amount and the level of a potential impairment.
The basic assumption of our medium-term corporate planning is
still that the travel activity can be resumed in the summer of the
financial year 2021. After a further recovery in financial year
2022 it is our unchanged expectation, that the Group's business
will reach at the latest in the financial year 2023 the level of
the years before the outbreak of the COVID-19-pandemic. In
comparison to the assumptions at financial year end 2020 it is now
expected that the resumption of the business will happen later in
the financial year 2021 and the level of travel activity will be
lower especially as there was nearly no business from 1 October
2020 to 31 March 2021.
For information on the calculation of the cost of capital and
growth rate, please refer to the section "Goodwill".
The accounting and measurement methods adopted in the
preparation of the Interim Financial Statements as at 31 March 2021
are materially consistent with those followed in preparing the
annual consolidated financial statements for the financial year
ended 30 September 2020, with the exception of the initial
application of new or amended standards, as outlined below.
The income taxes were recorded based on the best estimate of the
weighted average tax rate that is expected for the whole financial
year.
Newly applied standards
Since the beginning of financial year 2021, TUI Group has
initially applied the following standards and interpretations,
amended or newly issued by the IASB and endorsed by the EU, on a
mandatory basis:
New applied standards in financial year 2021
Standard Applicable Amendments Impact on financial statements
from
Materiality is a key concept in preparing
financial statements according to IFRS. The
Amendments to IAS 1 amendments refine the definition of
& IAS 8 1 Jan 2020 'material' and clarify how to apply No impact.
Definition of materiality. The amendments also align the
Material definition of 'material' and ensure
consistency in the application of that
concept across all IFRS Standards.
The revised Conceptual Framework includes
Framework revised definitions of an asset and a
Amendments to liability, and new guidance on measurement
References to the 1 Jan 2020 and derecognition, presentation and No impact.
Conceptual disclosure. References to the Conceptual
Framework in IFRS Framework in existing Standards are updated.
Standards The revised Conceptual Framework is not
subject to the Endorsement Process.
The assessment process used to
Amendments to The amendments to IFRS 3 clarify the determine whether an acquisition of
definition of a business and make it easier a subsidiary falls into the scope of
IFRS 3 1 Jan 2020 for entities to determine whether an IFRS 3 was revised in the period
Definition of a acquisition transaction results in under review. As a result,
business recognition of a group of assets or a accounting for acquisitions of hotel
business. companies, in particular, will now
be assessed on this revised basis.
The amendments relate to the provision of
relief from potential consequences arising
Amendments to IFRS from the reform of interbank offered rates
9, IAS 39 and IFRS (IBORs) such as LIBOR on companies' financial
7 reporting. They are intended to secure the
Interest Rate 1 Jan 2020 continuation of hedging relationships despite Not material.
Benchmark Reform the replacement of current interest rates
(Phase 1) with alternative rates. Entities also have to
disclose the extent to which their hedges are
affected by the interest rate benchmark
reform.
The amendments published by the IASB on 28
May 2020 provide lessees with an exemption
Amendments to from assessing whether a COVID-19-related
IFRS 16 rent concession is a lease modification. No impact. TUI does not apply the
COVID-19-Related 1 Jun 2020 Lessees applying the exemption have to new practical expedient.
Rent Concessions account for the rent concessions as if they
were not lease modifications. The amendments
are available for rent concessions reducing
lease payments due on or before 30 June 2021.
Correction of comparative periods
In the financial year 2020 the functional currency of companies
in Turkey changed. Beginning with 1 October 2019 the Euro was
determined as functional currency as opposed to the Turkish Lira
before.
In the consolidated financial statements for the financial year
ending 30 September 2020 the financial figures of the affected
companies were reported for the first time based on Euro. In the
Interim Financial Statements per 31 March 2020 they reported
erroneously based on the functional currency Turkish Lira. As the
exchange rate of the Turkish Lira in comparison to the Euro changed
considerably during the financial year 2020 the comparatives to the
income statement, to the earnings per share, to the statement of
comprehensive income and to the statement of changes in equity for
the period from 1 October 2019 to 31 March 2020 have been corrected
accordingly. The restated amounts are presented below.
Restated items of the unaudited condensed consolidated income statement of TUI Group for the period from 1 Oct 2019 to
31 Mar 2020
EUR million before Change in functional adjusted
adjustment currency
Cost of sales 6,970.9 - 11.2 6,959.7
Gross loss - 332.2 11.2 - 321.0
Financial expenses 150.6 - 20.9 129.7
Earnings before income taxes - 881.0 32.1 - 849.0
Income taxes - 35.3 1.3 - 34.0
Group loss - 845.7 30.8 - 815.0
Group loss for the year attributable to shareholders of TUI - 892.2 30.8 - 861.4
AG
Reconciliation to the adjusted earnings per share of the TUI Group for the period from
1 Oct 2019 to 31 Mar 2020
EUR before adjustment change in functional currency adjusted
Basic and diluted earnings per share - 1.51 0.05 - 1.46
Restated items of the unaudited condensed consolidated statement of comprehensive income of TUI Group for the period
from 1 Oct 2019 to 31 Mar 2020
EUR million before adjustment Change in functional currency adjusted
Group loss - 845.8 30.8 - 815.0
Foreign exchange differences - 160.2 38.8 - 121.4
Items that may be reclassified to profit or loss - 503.0 38.8 - 464.2
Other comprehensive income - 201.1 38.8 - 162.3
Total comprehensive income - 1,046.9 69.6 - 977.3
attributable to shareholders of TUI AG - 1,053.6 69.6 - 984.0
Corresponding to the corrections of amounts in the statement of
comprehensive income in the statement of changes equity the revenue
reserves increased by EUR69.6m from EUR-3,637.6m to EUR-3,568.0m,
the equity before non-controlling interest increased from
EUR2,075.7m to EUR2,145.3m and the total equity increased from
EUR2,792.3m to EUR2,861.9m.
Group of consolidated companies
The Interim Financial Statements include all material
subsidiaries over which TUI AG has control. Control requires TUI AG
to have decision-making power over the relevant activities, be
exposed to variable returns and have entitlements regarding the
returns, or have the ability to affect the level of those variable
returns through its decision-making power.
The Interim Financial Statements as at 31 March 2021 comprised a
total of 277 subsidiaries of TUI AG.
Development of the group of consolidated companies*
and the Group companies measured at equity
Consolidated Associates Joint
subsidiaries ventures
Balance at 30 Sep 2020 277 19 30
Additions 7 - -
Incorporation 1 - -
Acquisition - - -
Expansion of business operations 1 - -
Added to group of consolidated companies due to further 5 - -
acquisition of shares
Disposals 7 2 1
Liquidation 2 - -
Sale - 2 1
Merger 5 - -
Change in ownership stake -** 1 - 1
Balance at 31 Mar 2021 277 18 28
* excl. TUI AG
** Addition 1 / disposal -1
Acquisitions - Divestments
Acquisitions in the period under review
In H1 FY21, companies were acquired for a total consideration of
EUR10.0m, comprised of deferred purchase price payments worth
EUR3.4m, settled purchase price payments worth EUR4.9m and cash
consideration worth EUR1.7m.
Summary presentation of acquisitions
Name and headquarters of the acquired Business Date of Acquired Consideration
company activity Acquirer acquisition share transferred in EUR
% million
Karisma Hotels Adriatic d.o.o.za Accommodation TUI Travel
trgovinu i usluge, Zagreb, Croatia Service Overseas Holding 23.2.2021 67% 10.0
(subgroup) Limited
Total 10.0
The acquisition of the interests in Karisma Hotels Adriatic
d.o.o.za trgovinu i usluge, Zagreb, Croatia, resulted in an
increase of the 33% stake previously held by TUI Group to 100%.
Following application of the fair value concentration test, this
acquisition is not recognised in accordance with IFRS 3.
Accordingly, the purchase price is allocated to the individual
acquired assets and liabilities, based on their fair value at the
acquisition date.
Condensed statement of financial position as at the date of acquisition
EUR million Karisma Hotels Adriatic d.o.o.za trgovinu i usluge (subgroup)
Assets
Non-current assets 44.0
Current assets 5.1
Equity and liabilities
Provisions 0.9
Liabilities 38.2
No acquisitions were made after the reporting date.
Acquisitions of the prior financial year
The purchase price allocation for the companies acquired in FY20
had already been finalised in the prior year.
Divestments
In March 2019, TUI Group sold its stake in the Corsair S.A.
airline to Diamondale Ltd. and acquired a 27% stake in Diamondale
Ltd. for EUR1. Since then, the investment has been carried as a TUI
Group associate with a carrying amount of EUR1. On 30 December
2020, TUI Group sold the investment in Corsair S.A. As part of that
transaction, on 29 December 2020, a 75% stake in the aircraft asset
company MSN 1359 GmbH was sold to Corsair S.A. for EUR1. Following
the divestment of the stake in MSN 1359 GmbH, previously recognised
as a fully consolidated subsidiary, TUI Aviation GmbH has retained
a 25% stake, recognised as an associate measured at equity. The
divestment of the stake generated a loss of EUR3.3m, carried in
Other expenses.
Condensed balance sheet of 'MSN 1359 GmbH' as at 29 Dec 2020
EUR million 29 Dec 2020
Assets
Property, plant and equipment and intangible assets 24.5
Trade receivables 1.7
Cash and cash equivalents 2.0
28.2
EUR million 29 Dec 2020
Provisions and liabilities
Non-current liabilities 19.3
Other current liabilities 5.6
24.9
Notes to the unaudited condensed consolidated income statement
of TUI Group
The development of TUI Group's revenue and earnings in H1 of the
financial year 2021 was still materially impacted by the suspension
of the vast majority of our tour operation, aviation, hotel and
cruise operations as a result of the global travel restrictions in
order to contain the spread of COVID-19. TUI Group's results
generally also reflect the significant seasonal swing in tourism
between the winter and summer travel months, however this period
the impact is less evident due to the COVID-19 pandemic. 1.
Revenue
In H1of the financial year 2021, consolidated revenue decreased
by 89.2 % year-on-year to EUR0.7bn. The decline was driven by the
travel restrictions due to COVID-19.
External revenue allocated by destinations for the period from 1 Oct 2020 to 31 Mar 2021
Rest of H1 2021
Spain Other Caribbean, North Africa, Revenues
EUR million (incl. European Mexico, Africa Ind. Other from Other H1 2021
Canary destinations USA & & Ocean, countries contracts Total
Islands) Canada Turkey Asia with
customers
Hotels & 32.8 8.7 29.4 2.3 10.5 0.3 84.0 - 83.9
Resorts
Cruises 0.2 1.2 0.1 - - - 1.5 - 1.5
TUI Musement 2.6 8.8 3.1 0.2 3.9 - 18.6 - 18.6
Holiday 35.6 18.7 32.6 2.5 14.4 0.3 104.1 - 104.0
experiences
Northern 14.4 84.7 43.4 3.0 12.1 0.5 158.1 1.0 159.1
Region
Central 74.7 135.7 19.2 27.4 73.8 6.3 337.1 0.3 337.4
Region
Western 24.3 39.4 27.4 9.2 1.2 0.1 101.6 0.5 102.1
Region
Markets & 113.4 259.8 90.0 39.6 87.1 6.9 596.8 1.8 598.6
Airlines
All other 0.2 3.6 0.3 - 8.8 0.7 13.6 - 13.6
segments
Total 149.2 282.1 122.9 42.1 110.3 7.9 714.5 1.8 716.3
External revenue allocated by destinations for the period from 1 Oct 2019 to 31 Mar 2020
Rest of H1 2020
Spain Other Caribbean, North Africa, Revenues
EUR million (incl. European Mexico, Africa Ind. Other from Other H1 2020
Canary destinations USA & & Ocean, countries contracts Total
Islands) Canada Turkey Asia with
customers
Hotels & 128.2 19.4 56.6 18.9 76.8 0.3 300.2 - 300.2
Resorts
Cruises 80.8 54.7 167.1 0.2 90.5 88.3 481.6 - 481.6
TUI Musement 56.7 88.3 47.4 7.0 71.7 29.3 300.4 - 300.4
Holiday 265.7 162.4 271.1 26.1 239.0 117.9 1,082.2 - 1,082.2
experiences
Northern 844.4 370.5 453.3 119.9 353.6 37.6 2,179.3 7.7 2,187.0
Region
Central 666.8 469.3 179.3 390.9 484.5 8.8 2,199.6 10.3 2,209.9
Region
Western 126.9 159.7 229.8 137.1 381.6 23.9 1,059.0 16.1 1,075.1
Region
Markets & 1,638.1 999.5 862.4 647.9 1,219.7 70.3 5,437.9 34.1 5,471.9
Airlines
All other 2.7 34.9 4.7 2.2 28.6 11.4 84.5 - 84.5
segments
Total 1,906.5 1,196.8 1,138.2 676.2 1,487.3 199.6 6,604.6 34.1 6,638.7 2. Cost of sales and administrative expenses
Cost of sales relates to the expenses incurred in the provision
of tourism services. In addition to the expenses for staff costs,
depreciation, amortisation, rental and leasing, it includes all
costs incurred by TUI Group in connection with the procurement and
delivery of airline services, hotel accommodation and cruises and
distribution costs.
Due to the suspension of business operations as a result of
COVID-19, the cost of sales declined by 78.2 % to EUR1.5bn in H1
2021.
Government Grants
EUR million H1 2021 H1 2020
Cost of Sales 84.6 6.2
Administrative expenses 46.1 4.3
Total 130.7 10.5
The government grants reported under cost of sales and
administrative expenses include in particular grants for wages and
salaries as well as social security contributions directly
reimbursed to the relevant company.
Administrative expenses comprise all expenses incurred in
connection with the performance of administrative functions and
break down as follows:
Administrative expenses
EUR million H1 2021 H1 2020
Staff cost 275.0 345.7
Rental and leasing expenses 7.2 12.3
Depreciation, amortisation and impairment 44.8 46.3
Others 60.8 124.1
Total 387.7 528.4
The cost of sales and administrative expenses include the
following expenses for staff and depreciation/ amortisation:
Staff cost
EUR million H1 2021 H1 2020
Wages and salaries 579.9 970.9
Social security contributions, pension costs and benefits 161.3 217.0
Total 741.2 1,187.9
Depreciation/amortisation/impairment
EUR million H1 H1
2021 2020
Depreciation and amortisation of other intangible assets, property, plant and equipment and 444.5 528.4
right-of-use assets
Impairment of other intangible assets, property, plant and equipment and right-of-use assets 32.9 20.7
Total 477.4 549.1
The decrease in depreciation and amortisation is attributable to
revaluations and modifications of right of use assets and
impairments in the prior year. In addition changes in the exchange
rates caused a decline in the depreciations and amortizations. Of
the impairments losses EUR14.0m (H1 2020 EUR0.0m) correspond to
right-of-use assets, EUR18.6m (H1 2020 EUR18.9m) relate to
property, plant and equipment, and EUR0.3m (H1 2020 EUR1.8m) to
other intangible assets. EUR29.3m (H1 2020 EUR20.3m) of the
impairments were presented within cost of sales. In addition
reversals of impairment losses of EUR10.3m were recognized in cost
of sales. 3. Other income
In H1 2021 Other income mainly results from the sale of aircraft
assets and the disposal of a joint venture. In the prior year, this
item had primarily included income from the sale of subsidiaries.
4. Other expenses
In the current financial year, Other expenses comprise losses
from the sale of TUI Group companies. In the prior year, this item
had included losses from the sale of aircraft assets and expenses
for the disposal of TUI Group companies. 5. Financial income and
financial expenses
The net financial result declined from EUR-107.3m in H1 2020 to
EUR-229.1m in the first half of the current financial year. This
was largely driven by an increase in interest expenses resulting
from the utilisation of credit facilities to cover payment
obligations and by expenses incurred in connection with the early
redemption of TUI's Senior Notes bond on 23 February 2021 as well
as lower income from bank balances. Financial income primarily
resulted from foreign exchange gains on lease liabilities in
accordance with IFRS 16. 6. Share of result of joint ventures and
associates
Share of result of joint ventures and associates
EUR million H1 2021 H1 2020
Hotels & Resorts - 47.1 4.1
Cruises - 94.2 42.1
TUI Musement - 2.2 3.6
Holiday Experiences - 143.5 49.8
Northern Region - 12.5 - 7.1
Central Region - 1.2 - 0.9
Western Region - -
Markets & Airlines - 13.7 - 8.0
All other segments - 0.1
Total - 157.2 41.9
The year-on-year decline is attributable to holiday
cancellations, customer repatriation costs and hotel closures
resulting from the COVID-19 pandemic. 7. Income taxes
The tax income generated in the first half year 2021 was mainly
attributable to additional benefits arising from tax losses which
should be used after the end of the COVID-19 pandemic. 8. Group
loss / profit attributable to non-controlling interest
TUI Group's result attributable to non-controlling interests is
substantially a loss, primarily relating to RIUSA II Group at an
amount of EUR21.4m (H1 2020 EUR46.5m profit).
Notes to the unaudited condensed consolidated statement of
financial position of TUI Group 9. Goodwill
Goodwill increased by EUR93.4m due the foreign exchange
translation. The breakdown of goodwill by main individual cash
generating unit (CGU) at carrying amounts is as follows:
Goodwill per cash generating unit
31 Mar 2021 30 Sep 2020
Northern Region 1,236.1 1,162.2
Central Region 501.6 501.7
Western Region 412.2 412.3
RIU 343.1 343.1
Marella Cruises 299.1 279.3
TUI Musement 170.1 170.1
Other 45.7 45.8
Total 3,007.9 2,914.5
The ongoing travel restrictions and the associated effect of the
COVID-19 pandemic on the recovery of the tourism business in the
financial year ending 2021 constitute a triggering event for
impairment testing as at 31 March 2021. Goodwill was therefore
tested for impairment at the level of cash generating units
(CGUs).
The discount rates are calculated as the weighted average cost
of capital, taking account of country-specific risks of the CGU and
based on external capital market information. The comparatively
high weighted average cost of capital reflects the current market
situation and the increased amount of debt capital due to the
COVID-19 pandemic.
The table below provides an overview of the parameters adjusted
versus the end of the previous financial year, underlying the
determination of the fair values per CGU. Given the impact of the
COVID-19 pandemic and the expected regeneration in the upcoming
planning periods the growth rate for revenues and the EBIT margin
are not comparative in a meaningful way. The table lists the CGUs
to which goodwill has been allocated.
Assumptions for calculation of the recoverable amount at 31 March 2021
Planning Growth rate EBIT-Margin Sustainable Carrying Recoverable
period in revenues in % in % Growth WACC Level amount in EUR amount in EUR
years p.a.*** p.a.*** rate** in % million million
in %
Northern 2.50 8.5 2.7 0.5 11.75 3 2,090.0 2,545.9
Region
Central 2.50 12.4 3.1 0.5 11.75 3 566.2 1,151.9
Region
Western 2.50 3.3 4.2 0.5 11.75 3 544.9 1,156.6
Region
RIU* 2.50 7.7 32.2 1.0 8.24 3 2,130.3 2,774.1
Marella 2.50 21.0 12.1 1.0 9.83 3 871.7 931.5
Cruises*
TUI Musement 2.50 20.3 4.7 1.0 8.73 3 381.5 474.4
15.1 to 8.24 557.9 to
Other 2.50 1.7 to 5.2 15.8 1.0 to 3 636.6 641.3 to 707.8
8.94
* Those are groups of CGUs
** Growth rate of expected net cash inflows
*** Plant growth rate in revenues in % and EBIT-Margin after regeneration of the upcoming business
Assumptions for calculation of the recoverable amount at 30 September 2020
Planning Growth rate Sustainable Carrying Recoverable
period in revenues in % EBIT-Margin Growth WACC Level amount in EUR amount in EUR
years p.a. in % p.a. rate** in % million million
in %
Northern 3.00 44.1 1.0 0.5 11.75 3 1,973.2 2,516.8
Region
Central 3.00 28.3 - 0.5 11.75 3 167.7 808.7
Region
Western 3.00 34.8 2.1 0.5 11.75 3 321.5 872.6
Region
RIU* 3.00 27.9 26.9 1.0 7.74 3 2,010.3 2,778.4
Marella 3.00 32.5 1.0 1.0 9.74 3 573.6 696.4
Cruises*
TUI Musement 3.00 40.3 - 1.8 1.0 8.39 3 352.5 453.9
11,3 to 7,74 568.9 to
Other 3.00 40,3 to 42,3 12,4 1.0 to 3 666.5 662.8 to 778.1
8,80
* Those are groups of CGUs
** Growth rate of expected net cash inflows
The goodwill impairment test conducted based on cash generating
units as at 31 March 2021 did not result in the recognition of
impairment losses on capitalised goodwill. An increase in WACC by
100 basis points would have resulted in an impairment requirement
on capitalised goodwill of EUR35.5m for Marella Cruises and of
EUR17.9m for Robinson, which are reported under Other. Capitalised
goodwill would have to be impaired by an amount of EUR10.9m for
Marella Cruises in the event of a 10% decrease in the discounted
cash flow. The reduction of the growth rate by 50 basis points
would not have led to any goodwill impairment. 10. Property, plant
and equipment
Compared to 30 September 2020 property, plant and equipment
declined by EUR66.2m to EUR3,396.3m. A decline of EUR158.6m was
caused by the disposal of property, plant and equipment which is
mainly attributable to aircraft (EUR96.1m) and advance payments for
future delivery of aircraft (EUR42.9m) and were partly due to sale
and leaseback transactions. As a result of the lease transactions
the new aircrafts are reported as additions on right-of-use assets
(for details please refer to the section 'Leases'). Further,
depreciation and amortisation of EUR120.8m led to a decrease in
property, plant and equipment.
The decline was partly offset by additions of EUR147.8m, mainly
attributable to additions in the segment Hotels & Resorts. The
construction of two new hotels and the refurbishment of hotels in
Spain and Jamaica resulted in additions totalling EUR59.8m in the
RIU Group. Furthermore additions of property, plant and equipment
of EUR44.0m were caused by the acquisition of Karisma (for details
please refer to section 'Acquisitions in the financial year').
The review of the carrying amounts of property, plant and
equipment performed due to the ongoing travel restrictions resulted
in total impairment charges of EUR18.6m, of which EUR17.3m were
attributable to property, plant and equipment in the segment Hotels
& Resorts and related to various individual items. The
impairment charges of EUR18.9m incurred in the first half of the
previous year were mainly attributable to the segment Cruises
(EUR18.5m). 11. Leases
Right-of-use assets declined by EUR44.6m to EUR3,183.3m compared
to the end of financial year. While cumulative
depreciation/amortisation amounted to EUR256.5m, additions included
in particular an amount of EUR209.2m for six new aircraft as well
as EUR20.8m for hotels. Right-of-use assets increased by EUR26.8m
due to foreign exchange translation.
Furthermore, disposals of EUR39.7m led to a decrease in
right-of-use assets. Disposals of EUR36.5m are mainly attributable
to contract adjustments of aircraft.
The review of carrying amounts carried out in connection with
the pandemic led to a total impairment of EUR14.0m. The impairment
losses include an amount of EUR8.1m on travel shops in the Northern
Region. On the other hand, the review of the carrying amounts led
to reversal of impairment losses amounting to EUR10.4m, which were
mainly attributable to the segment Hotels & Resorts. In the
first half of the previous year, there were no impairment gains or
losses on right of use assets.
The corresponding liabilities are explained in the section
'Lease Liabilities'. 12. Trade and other receivables
TUI Group and Boeing have agreed on a comprehensive package of
measures to offset the consequences of the grounding of the 737
MAX. It provides compensation which covers a significant portion of
the financial impact, as well as credits for future aircraft
orders. The cash payments will be realised over the next two years,
while the income is already partly realized within Cost of Sales in
the previous reporting period and will be partly spread over the
useful life of those 737 MAX delivered in the future. The
respective compensation receivable was included in other
receivables. During the first half of the financial year 2021 TUI
sold the compensation receivable against Boeing to a third party
and thus derecognized it as all criteria for derecognition were
met. The sale resulted in a loss, which is presented as a financial
expense in the income statement. 13. Assets held for sale
Due to the expected sale a hotel including land was reclassified
to assets held for sale in the segment Western Region as at 31
March 2021.
All non-current assets and disposal groups and related
liabilities classified as held for sale at 30 September 2020 have
been sold in the first half of the financial year 2021. Please
refer to the section 'Divestments'.
Assets held for sale
EUR million 31 Mar 2021 30 Sep 2020
Hotels including land 3.8 -
Other assets 0.9 1.7
Aircraft - 42.4
Investments in joint ventures and associates - 13.1
Total 4.7 57.2 14. Pension provisions and similar obligations
In the United Kingdom and Germany, there was an increase in the
long-term interest rate level as at 31 March 2021 compared to 30
September 2020. The resulting remeasurement effects led to a
decrease in both the obligation from pension commitments and the
assets of funded pension plans. The decline in assets was greater
than the decline in obligations.
Accordingly, the pension provisions for unfunded plans and plans
with underfunding increased by EUR42.9m to EUR1,057.9m compared to
the end of the financial year.
The overfunding of funded pension plans reported in other
non-financial assets decreased by EUR32.3m to EUR331.0m compared to
30 September 2020. 15. Financial liabilities
Non-current financial liabilities rose by EUR887.2m to
EUR4,578.9m as against 30 September 2020. This increase was
primarily attributable to an increase in liabilities to banks of
EUR1,068.7m, partially offset by a decline in liabilities from
bonds of EUR181.5m. This reflects the fact that TUI AG issued a
warrant bond totalling EUR150.0m on 1 October 2020 in the framework
of the financing package from the German government, exclusively
subscribed to by the Economic Stabilisation Fund (ESF). While the
bond component of the warrant bond is shown under financial
liabilities, the warrants are recognised in equity. Meanwhile,
TUI's Senior Notes bond issued on 26 October 2016 with a nominal
amount of EUR300.0m was redeemed early on 23 February 2021.
The main financing instrument is a syndicated revolving credit
facility (RCF) totalling EUR4.6bn between TUI AG and the existing
banking syndicate or KfW, respectively, which has joined the
banking syndicate.
In addition, there is a separate syndicated revolving credit
facility of EUR200.0m.
As at 31 March 2021, the amounts drawn under the revolving
credit facilities totalled EUR3,830.0m.
As at 31 March 2021, current financial liabilities declined by
EUR308.3m to EUR268.9m from EUR577.3m as at 30 September 2020. The
decrease results from a reduction in current liabilities to
banks.
For more details on the terms and conditions of the credit lines
provided by KfW, please refer to the section "Going Concern
Reporting under the UK Corporate Governance Code". 16. Lease
liabilities
Compared to 30 September 2020 the lease liabilities decreased by
EUR22.0m to EUR3,377.9m. This decrease was due to repayments of
EUR361.5m. Offsetting effects were caused by the addition of new
lease contracts totalling to EUR265.3m of such mainly relating to
new aircrafts and to interest charges of EUR76.4m. 17. Other
financial liabilities
The other financial liabilities include touristic advance
payments received for tours canceled because of COVID-19
restrictions of EUR284.9m (as at 30 September 2020 EUR351.0m), for
which immediate cash refund options exist and which have to be
repaid shortly if the customer opts for payment. Please see the
following section for more details. 18. Touristic advance payments
received
Apart from the immediate cash refund option in certain
jurisdictions, TUI Group offers its customers voucher/refund
credits for trips canceled because of the COVID-19 crisis. If these
voucher/refund credits are not used for future bookings within a
specified period, the customer is entitled to a refund of the
voucher value. The entitlement to a refund of the voucher value
represents a financial liability. Due to the high level of
uncertainty regarding the further development of the COVID-19
crisis and customer behavior, it is not possible for TUI Group to
reliably estimate the extent of utilization of the voucher/refund
credits for future bookings and these amounts are shown within
Touristic advance payments received on the statement of financial
position.
As at 31 March, also included in touristic advance payments
received is EUR79.3m of issued vouchers relating to tours cancelled
because of COVID-19 restrictions (as at 30 September 2020
EUR184.8m), which is not due for an immediate refund. 19. Changes
in equity
Overall, equity decreased by EUR25.4m to EUR192.7m when compared
to 30 September 2020.
In connection with a recapitalisation, TUI Group's subscribed
capital was reduced first. On a constant number of EUR590.4m shares
the nominal value per share of 2.56 EUR was reduced to 1.00 EUR. In
effect the subscribed capital was reduced by EUR919.0m.
Subsequently a capital increase by cash contributions was performed
which led to an increase in subscribed capital in the amount of the
nominal value of 1.00EUR per share, i.e. an increase of the
subscribed capital of EUR509.0m.
The above-named reduction of subscribed capital increased the
capital reserve by EUR919.0m. Furthermore the capital reserve was
increased by the share premium of the capital increase of EUR58.8m.
The expenses of capital procurement incurred for the capital
increase and the silent participation were offset against capital
reserves in the amount of EUR32.9m. Furthermore in the first half
of the financial year a corporate bond with option rights was
issued to WSF. The value of option rights increased the capital
reserve by EUR34.5m.
In the first half of the financial year 2021, two silent
participations were issued to the WSF. In accordance with IAS 32
both silent participations are disclosed in equity.
The first silent participation in the amount of EUR420.0m was
fully paid. It is convertible at any time, in whole or in part,
into shares in TUI AG at a conversion price of EUR1.00, provided
that the participation of the WSF resulting from the conversion
does not exceed 25% plus 1 share in TUI's share capital. The second
silent participation is non-convertible. The maximum amount of the
second silent participation amounts to EUR671.0m. As at 31 March
2021 EUR500.0m were paid.
In the first half of the financial year 2021, TUI AG paid no
dividend (previous year EUR318.1m).
TUI Group's loss in the first half of the financial year is
primarily attributable to the present COVID-19 crisis in the
current year.
The proportion of gains and losses from cash flow hedges for
future cash flows includes an amount of EUR53.9m (pre- tax) carried
under other comprehensive income in equity outside profit and loss
(previous year EUR-444.4m).
The revaluation of pension obligations is also carried under
other comprehensive income in equity outside profit and loss. 20.
Financial instruments
Carrying amounts and fair values according to classes and measurement categories according to IFRS 9 as at 31 Mar 2021
Category according to IFRS 9
At Fair value with no Fair value with no Fair value Fair value
EUR million Carrying amortised effect on profit and effect on profit and through of financial
amount cost loss without recycling loss with recycling profit and instruments
loss
Assets
Trade receivables
and other - - - - - -
receivables
thereof
instruments 576.0 576.0 - - - 575.5
within the scope
of IFRS 9
thereof
instruments 10.8 - - - - 11.2
within the scope
of IFRS 16
Derivative
financial
instruments
Hedging 2.7 - - 2.7 - 2.7
transactions
Other derivative
financial 31.2 - - - 31.2 31.2
instruments
Other financial 23.0 12.9 8.0 - 2.1 23.0
assets
Cash and cash 1,399.7 1,399.7 - - - 1,399.7
equivalents
Liabilities
Financial 4,847.8 4,847.8 - - - 4,762.5
liabilities
Trade payables 1,190.4 1,190.4 - - - 1,190.4
Derivative
financial
instruments
Hedging 20.0 - - 20.0 - 20.0
transactions
Other derivative
financial 71.9 - - - 71.9 71.9
instruments
Other financial 401.7 401.7 - - - 401.7
liabilities
Carrying amounts and fair values according to classes and measurement categories according to IFRS 9 as at 30 Sep 2020
Category according to IFRS 9
At Fair value with no Fair value with no Fair value Fair value
EUR million Carrying amortised effect on profit and effect on profit and through of financial
amount cost loss without recycling loss with recycling profit and instruments
loss
Assets
Trade receivables
and other - - - - - -
receivables
thereof
instruments 875.2 875.2 - - - 847.1
within the scope
of IFRS 9
thereof
instruments 13.5 - - - - 39.2
within the scope
of IFRS 16
Derivative
financial
instruments
Hedging 22.3 - - 22.3 - 22.3
transactions
Other derivative
financial 74.0 - - - 74.0 74.0
instruments
Other financial 25.5 14.9 8.5 - 2.1 22.5
assets
Cash and cash 1,233.1 1,233.1 - - - 1,233.1
equivalents
Liabilities
Financial 4,269.0 4,291.4 - - - 4,022.8
liabilities
Trade payables 1,611.5 1,611.5 - - - 1,611.5
Derivative
financial
instruments
Hedging 61.3 - - 61.3 - 61.3
transactions
Other derivative
financial 257.5 - - - 257.5 257.5
instruments
Other financial 429.2 431.3 - - - 430.8
liabilities
The amounts shown in the previous table as at 30 September 2020
in the column "Carrying amount" (as shown in the balance sheet) may
differ from those in the other columns of a given row, as these
columns include all financial instruments. This means that these
columns include financial instruments that are part of the disposal
groups in accordance with IFRS 5. Further details on this can be
found in the 2020 Annual Report.
The fair values of other current receivables, financial
liabilities and other financial liabilities were determined, taking
into account yield curves and the respective credit risk premium
(credit spread).
The fair values of non-current trade receivables and other
receivables correspond to the present values of the cash flows
associated with the assets, taking account of current interest
parameters which reflect market and counter party-related changes
in terms and expectations. In the case of cash and cash
equivalents, current trade receivables, other financial assets and
current trade payables, the carrying amount approximates the fair
value due to the short remaining term.
The current market conditions arising from the COVID-19 pandemic
have been taken into account for all financial instruments for
which fair values have been calculated by adjusting the underlying
parameters.
The COVID-19 pandemic significantly impacted business operations
and the existing hedging strategy for currency risks and fuel price
risks. It led to a temporary suspension of all travel operations
and flight bans. As a result, the occurrence of numerous hedged
underlying transactions can no longer be assessed as highly likely,
causing a rapid decline in fuel price and foreign currency hedge
requirements and therefore requiring the prospective termination of
these hedges.
For the hedges affected, occurrence of the underlying
transactions can no longer be expected for a future point in time,
either, so that all accrued amounts from the change in the value of
the hedging instruments were reclassified from cash flow hedge
reserve (OCI) to the cost of sales in the income statement.
Accordingly, reclassifications of EUR-27.5m from fuel price hedges
and EUR-9.6m from foreign currency hedges were effected as at 31
March 2021.
All future changes in the value of these de-designated hedges
are taken to the cost of sales in the income statement through
profit and loss and recognised as other derivative financial
instruments from the date of the termination of the cash flow hedge
accounting. As at 31 March 2021, the fair value of these
reclassified fuel price hedges totalled EUR-3.5m at a nominal
volume of EUR96.1m, while the fair value of the reclassified
foreign currency hedges totalled EUR-9.6m at a nominal volume of
EUR398.5m.
Furthermore, the strong increase in TUI's credit risk had a
direct impact on the retrospective hedge effectiveness testing. As
a result, additional fuel price, interest rate and foreign currency
hedges had to be terminated as they no longer met the effectiveness
requirements of IAS 39 and were outside the admissible 80-125%
effectiveness bandwidth.
All future changes in the value of these de-designated hedges
are also taken to the cost of sales respectively in the financial
result in the case of interest rate hedges in the income statement
through profit and loss and recognised as other derivative
financial instruments from the date of the termination of the cash
flow hedge accounting. As at 31 March 2021, the fair value of these
reclassified fuel price hedges totalled EUR-21.6m at a nominal
value of EUR346.9m, while the fair value of the interest rate
hedges amounted to EUR-13.3m at a nominal volume of EUR445.9m and
the fair value of foreign currency hedges totalled EUR-3.1m at a
nominal volume of EUR203.9m.
Aggregation according to measurement categories under IFRS 9 as at 31 Mar 2021
EUR million Carrying amount of financial instruments Fair Value
Total
Financial assets
at amortised cost 1,988.6 1,988.1
at fair value - recognised directly in equity without recycling 8.0 8.0
at fair value - through profit and loss 33.3 33.3
Financial liabilities
at amortised cost 6,440.1 6,344.3
at fair value - through profit and loss 71.9 71.9
Aggregation according to measurement categories under IFRS 9 as at 30 Sep 2020
EUR million Carrying amount of financial instruments Fair Value
Total
Financial assets
at amortised cost 2,123.2 2,095.0
at fair value - recognised directly in equity without recycling 8.5 8.5
at fair value - through profit and loss 76.1 76.1
Financial liabilities
at amortised cost 6,334.1 6,065.0
at fair value - through profit and loss 257.5 257.5
Fair value measurement
The following table presents the fair values of the recurring,
non-recurring and other financial instruments recognised at fair
value in accordance with the underlying measurement levels. The
individual levels have been defined as follows in line with the
input factors: ? Level 1: quoted (unadjusted) prices in active
markets for identical assets or liabilities. ? Level 2: input
factors for the measurement are quoted market price other than
those mentioned in Level 1, directly
(as market price quotation) or indirectly (derivable from market
price quotation) observable in the market for the
asset or liability. ? Level 3: input factors for the measurement
of the asset or liability are based on non-observable market
data.
Hierarchy of financial instruments measured at fair value as at 31 Mar 2021
Fair value hierarchy
EUR million Total Level 1 Level 2 Level 3
Assets
Other financial assets 10.1 - - 10.1
Derivative financial instruments
Hedging transactions 2.7 - 2.7 -
Other derivative financial instruments 31.2 - 31.2 -
Liabilities
Derivative financial instruments
Hedging transactions 20.0 - 20.0 -
Other derivative financial instruments 71.9 - 71.9 -
Hierarchy of financial instruments measured at fair value as of 30 Sep 2020
Fair value hierarchy
EUR million Total Level 1 Level 2 Level 3
Assets
Other financial assets 10.6 - - 10.6
Derivative financial instruments
Hedging transactions 22.3 - 22.3 -
Other derivative financial instruments 74.0 - 74.0 -
Liabilities
Derivative financial instruments
Hedging transactions 61.3 - 61.3 -
Other derivative financial instruments 257.5 - 257.5 -
At the end of every reporting period, TUI Group checks whether
there are any reasons for reclassification to or from one of the
measurement levels. Financial assets and financial liabilities are
generally transferred out of Level 1 into Level 2 if the liquidity
and trading activity no longer indicate an active market. The
opposite situation applies to potential transfers out of Level 2
into Level 1. In the reporting period, there were no transfers
between Level 1 and Level 2.
Reclassifications from Level 3 to Level 2 or Level 1 are made if
observable market price quotations become available for the asset
or liability concerned. TUI Group records transfers from or to
Level 3 at the date of the obligating event or occasion triggering
the transfer. In the period under review, there were no transfers
into or out of Level 3.
Level 1 financial instruments
The fair value of financial instruments for which an active
market is available is based on the market price quotation at the
balance sheet date. An active market exists if price quotations are
easily and regularly available from a stock exchange, traders,
brokers, price service providers or regulatory authorities, and if
these prices represent actual and regular market transactions
between independent business partners. These financial instruments
are categorised within Level 1. The fair values correspond to the
nominal values multiplied by the price quotations at the balance
sheet date. Level 1 financial instruments primarily comprise shares
in listed companies classified as at fair value through OCI and
bonds issued classified as financial liabilities at amortised
cost.
Level 2 financial instruments
The fair values of financial instruments not traded in an active
market, e.g. over the counter derivatives (OTC), are determined by
means of valuation techniques. These valuation techniques maximise
the use of observable market data and minimise the use of
Group-specific assumptions. If all essential input factors for the
determination of the fair value of an instrument are observable,
the instrument is categorised within Level 2.
If one or several of the essential input factors are not based
on observable market data, the instrument is categorised within
Level 3.
The specific valuation techniques used for the measurement of
financial instruments are: ? For over the counter bonds,
liabilities to banks, promissory notes and other non-current
financial liabilities, the
fair value is determined as the present value of future cash
flows, taking account of observable yield curves and
the respective credit spread, which depends on the credit
rating. ? For over the counter derivatives, the fair value is
determined by means of appropriate calculation methods, e.g. by
discounting the expected future cash flows. The forward prices
of forward transactions are based on the spot or
cash prices, taking account of forward premiums and discounts.
The fair value calculations of optional hedging
instruments are determined using standard market valuation
methods. The fair values determined on the basis of TUI
Group's own systems are regularly compared with fair value
confirmations of the external counterparties. ? Other valuation
techniques, e.g. discounting future cash flows, are used for the
measurement of the fair values of
other financial instruments.
Level 3 financial instruments
The following table shows the development of the values of the
financial instruments measured at fair value on a recurring basis
categorised within Level 3 of the measurement hierarchy.
Financial assets measured at fair value in Level 3
EUR million Other financial assets IFRS 9
Balance as at 1 Oct 2019 42.9
Disposals - 3.5
consolidation - 3.5
Total gains or losses for the period - 28.8
recognised through profit and loss - 1.1
recognised in other comprehensive income - 27.7
Balance as at 30 Sep 2020 10.6
Balance as at 1 Oct 2020 10.6
Disposals -
consolidation -
Total gains or losses for the period - 0.5
recognised through profit and loss -
recognised in other comprehensive income - 0.5
Balance as at 31 Mar 2021 10.1
Evaluation process
The fair value of financial instruments in level 3 has been
determined by TUI Group's finance department using the discounted
cash flow method. This involves the market data and parameters
required for measurement being compiled or validated.
Non-observable input parameters are reviewed on the basis of
internally available information and updated if necessary.
In principle, the unobservable input parameters relate to the
following parameters; the (estimated) EBITDA margin is in a range
between -13% and 22%. The constant growth rate is 1%. The weighted
average cost of capital (WACC) is in a range between 9.2% - 10.2%.
With the exception of the WACC, there is a positive correlation
between the input factors and the fair value.
Effects on results
The effects of remeasuring of financial assets carried at fair
value through OCI as well as the effective portions of changes in
fair values of derivatives designated as cash flow hedges are
listed in the statement of changes in equity. 21. Contingent
liabilities
As at 31 March 2021, contingent liabilities amounted to
EUR162.0m (previous year EUR165.6m). They are mainly attributable
to the granting of guarantees for the benefit of hotel and cruises
activities and are reported at an amount representing the best
estimate of the expenditure required to meet the potential
obligation at the balance sheet date. 22. Other financial
commitments
Nominal values of other financial commitments
EUR million 31 Mar 2021 30 Sep 2020
Order commitments in respect of capital expenditure 2,548.7 2,549.0
Other financial commitments 117.2 212.7
Total 2,665.9 2,761.7
As at 31 March 2021 order commitment in respect of capital
expenditure declined by EUR0.3m as against 30 September 2020. New
obligations for a cruise ship was more than off-set by delivery of
aircraft and reduction in hotel commitments. 23. Note to the
unaudited condensed consolidated cash flow statement of TUI
Group
The unaudited condensed consolidated cash flow statement shows
TUI Group including the disposal group 'Hapag-Lloyd Cruises' which
was sold last year. In transitioning to IFRS 16, basically all
leases are carried as right-of-use assets and lease liabilities in
the statement of financial position. From the last financial year,
the vast majority of payments for leases are therefore no longer
shown in the cash outflow from operating activities, but as
interest payments and repayments of lease liabilities in the cash
outflow from financial activities.
For the six months period ended 31 March 2021, cash and cash
equivalents rose by EUR166.7m to EUR1,399.7m.
For the six months period ended 31 March 2021, the cash outflow
from operating activities totalled EUR1,476.0m (H1 2020 cash
outflow of EUR-728.4m). The cash outflow from operating activities
included interest of EUR3.6m (H1 2020 EUR14.2m) and dividends of
EUR10.0m (H1 2020 EUR7.3m). Income tax payments resulted in a cash
outflow of EUR5.3m (H1 2020 cash outflow of EUR44.7m).
The cash inflow from investing activities totals EUR110.0m (H1
2020 EUR-263.7m). It comprises payments for investments in
property, plant and equipment and intangible assets of EUR150.0m.
TUI Group recorded a cash inflow of EUR228.1m from the sale of
property, plant and equipment and intangible assets. It also
includes a cash inflow of EUR32.9m from the sale of Hapag-Lloyd
Cruises which was completed in the previous year and EUR19.6m from
the repayment of loans in connection with the sale of the shares in
Togebi Holdings Limited (TUI Russia). An outflow of EUR21.0m was
made for a capital increase for TUI Cruises GmbH.
The cash inflow from financing activities totalled EUR1,511.2m
(H1 2020 cash inflow of EUR258.6m). TUI AG received EUR1,489.4m
from various equity measures after deducting capital procurement
costs. EUR0.5m was used to purchase shares transferred to TUI Group
employees in the framework of the oneShare employee share plan. TUI
AG received EUR619.5 million from taking out loans and bonds after
deducting capital procurement costs. Other TUI Group companies took
out loans worth EUR224.7m. The repayment of financial liabilities
resulted in a cash outflow of EUR604.7m, including an amount of
EUR300.0m for early repayment of TUI AG senior bonds and an amount
of EUR290.6m for lease liabilities. A cash outflow of EUR217.2m
related to interest payments.
Cash and cash equivalents also increased by EUR21.4m (H1 2020
EUR29.8m) due to changes in exchange rates.
As at 31 March 2021, cash and cash equivalents worth EUR497.5m
were subject to restrictions (as at 30 September 2020
EUR324.0m).
On 30 September 2016, TUI AG concluded an agreement on the
long-term settlement of the difference between the liabilities and
the fund assets of defined-benefit pension plans in the UK. An
amount of EUR55.8m was deposited in a bank account as a security as
at the balance sheet date. TUI Group can only use these funds if
alternative collateral is provided.
Further, an amount of EUR116.5m (as at 30 September EUR116.5m)
was deposited with a Belgian subsidiary without acknowledgement of
debt by the Belgian tax authorities in financial year 2013 in
respect of long-standing litigation over VAT refunds for the years
2001 to 2011.
The remaining EUR325.5m (as at 30 September EUR155.4m) subject
to restrictions relate to cash and cash equivalents to be deposited
due to statutory or regulatory requirements mainly in order to
secure customer deposits and credit card payables. 24. Reporting
segments
Revenue by segment for the period from 1 Oct 2020 to 31 Mar 2021
EUR million External Group H1 2021 Total
Hotels & Resorts 83.9 62.9 146.8
Cruises 1.5 - 1.5
TUI Musement 18.6 6.8 25.4
Consolidation - - 0.5 - 0.5
Holiday Experiences 104.0 69.2 173.2
Northern Region 159.1 135.1 294.2
Central Region 337.4 41.0 378.4
Western Region 102.1 64.7 166.8
Consolidation - - 239.7 - 239.7
Markets & Airlines 598.6 1.1 599.7
All other segments 13.6 1.3 14.9
Consolidation - - 71.5 - 71.5
Total 716.3 - 716.3
Revenue by segment for the period from 1 Oct 2019 to 31 Mar 2020
EUR million External Group H1 2020 Total
Hotels & Resorts 300.2 282.2 582.4
Cruises 481.6 - 481.6
TUI Musement 300.4 123.3 423.7
Consolidation - - 3.2 - 3.2
Holiday Experiences 1,082.2 402.3 1,484.5
Northern Region 2,187.0 139.6 2,326.6
Central Region 2,209.9 66.2 2,276.1
Western Region 1,075.1 78.9 1,154.0
Consolidation - - 276.6 - 276.6
Markets & Airlines 5,471.9 8.2 5,480.1
All other segments 84.5 3.9 88.4
Consolidation - - 414.3 - 414.3
Total 6,638.7 - 6,638.7
The segment data shown are based on regular internal reporting
to the Executive Board. From the 2020 fiscal year, the
internationally more commonly used earnings measure "underlying
EBIT" is used for value-based management. In the 2020 fiscal year,
underlying EBIT was adjusted for the earnings effect of IFRS16
("adjusted EBIT [IAS17]") as part of internal reporting to
facilitate comparability with the prior year. From the 2021
financial year, underlying EBIT (IFRS 16) is the segment
performance indicator as defined by IFRS 8, the prior-year figures
have been restated accordingly.
We define the EBIT in underlying EBIT as earnings before
interest, income taxes and expenses from the measurement of the
Group's interest rate hedging instruments. Impairment losses on
goodwill are by definition included in EBIT, but are adjusted in
the calculation of underlying EBIT.
For the segment performance measure, all Intra-Group leases are
accounted for operating rental and leasing contracts in accordance
with IAS 17.
Separately disclosed items include adjustments for income and
expense items that reflect amounts and frequencies of occurrence
rendering an evaluation of the operating profitability of the
segments and TUI Group more difficult or causing distortions. These
items include gains and losses on disposal of financial
investments, significant gains and losses from the sale of assets
as well as significant restructuring and integration expenses. Any
effects from purchase price allocations, ancillary acquisition
costs and conditional purchase price payments are adjusted. Also,
any good-will impairments would be adjusted in the reconciliation
to underlying EBIT.
In H1 2021, underlying EBIT includes result and impairment of
joint ventures and associates of EUR-157.2m (H1 2020 EUR41.9m),
primarily generated within the sector Holiday Experiences.
Underlying EBIT by segment
H1 2021 H1 2020 adjusted
EUR million
Hotels & Resorts - 198.3 56.1
Cruises - 153.3 26.9
TUI Musement - 62.0 - 28.9
Holiday Experiences - 413.6 54.2
Northern Region - 418.3 - 415.2
Central Region - 272.0 - 179.5
Western Region - 159.8 - 189.6
Markets & Airlines - 850.1 - 784.3
All other segments - 45.1 - 64.6
Total - 1,308.8 - 794.8
Reconciliation to underlying EBIT of TUI Group
EUR million H1 2021 H1 2020 adjusted
Earnings before income taxes - 1,543.7 - 849.0
plus: Net interest expense (excluding expense / income from measurement of interest 239.6 104.7
hedges)
plus / less: Expense (income) from measurement of interest hedges 5.6 - 1.7
EBIT - 1,298.5 - 746.0
Adjustments:
less: Separately disclosed items - 26.4 - 71.1
plus: Expense from purchase price allocation 16.2 22.3
Underlying EBIT - 1,308.8 - 794.8
The net income for separately disclosed items of EUR26.4m in the
first half of the financial year 2021 includes income of EUR53m
from the reversal of restructuring provisions no longer required in
the Central Region due to the lower than expected reduction in
fleet size at TUIfly. In addition, restructuring expenses of EUR21m
were incurred in TUI Musement (EUR1m), Northern Region (EUR13m,
thereof United Kingdom EUR6m and Nordic countries EUR7m), Central
Region (EUR3m), Western Region (EUR3m) and All other segments
(EUR1m). Furthermore, the loss from the sale of a stake in an
aircraft asset company was adjusted in Northern Region (EUR2m) and
Central Region (EUR1m) and an expense of EUR2m from a subsequent
purchase price adjustment was adjusted in the All other segments
area.
The net income for separately disclosed items of EUR71.1m in the
first half of the previous year includes disposal gains of EUR90m
from the sale of the German specialist tour operators.
Restructuring expenses were adjusted in TUI Musement (EUR4m),
Central Region (EUR8m for the planned capacity reduction at TUIfly
Germany, an expansion of the existing restructuring program at TUI
Germany and the restructuring of the Group's own stationary
distribution), Western Region (EUR5m for restructuring in France
and further projects in Belgium and the Netherlands) and All Other
Segments (EUR2m).
Expenses for purchase price allocations of EUR16.2m (prior year
EUR22.3m) relate in particular to the scheduled amortization of
intangible assets from acquisitions made in previous years. 25.
Related parties
Apart from the subsidiaries included in the Interim Financial
Statements, TUI AG, in carrying out its ordinary business
activities, maintains direct and indirect relationships with
related parties. All transactions with related parties were
executed on an arm's length basis.
As at 31 March 2021, Unifirm Limited, Cyprus, held 30.1% of the
shares in TUI AG (as at 30 September 2020 24.9%). Unifirm Limited
is controlled by the family of Russian entrepreneur Alexei
Mordashov, a member of TUI's Supervisory Board. DH Deutsche
Holdings Limited, a company registered in Cyprus under the control
of the joint venture partner Hamed El Chiaty, decreased its equity
stake to below 3.0%. More detailed information on related parties
is provided under section 24 in the Notes to the consolidated
financial statements for 2020. 26. Significant transactions after
the balance sheet date
On 16 April 2021, TUI AG issued a convertible bond of EUR400m.
The senior unsecured convertible bonds are due on 16 April 2028 and
have a coupon of 5.00% p.a., payable semi-annually. The
denomination of the bond was EUR100,000. The initial conversion
price was set at an amount of EUR5.3631 per share.
Responsibility statement
To the best of our knowledge, and in accordance with the
applicable reporting principles for half-year financial reporting
and in the accordance with (German) principles of proper
accounting, the interim consolidated financial statements give a
true and fair view of the assets, liabilities, financial position
and profit or loss of the Group, and the interim Group management
report includes a fair review of the development and performance of
the business and the position of the Group, together with a
description of the principal opportunities and risks associated
with the expected development of the Group for the remaining months
of the financial year.
The Executive Board
Hanover, 10 May 2021
Friedrich Joussen
David Burling
Sebastian Ebel
Dr. Elke Eller
Peter Krueger
Frank Rosenberger
Review Report
To TUI AG, Berlin/Germany and Hanover/Germany
We have reviewed the condensed interim consolidated financial
statements - comprising the statement of financial position, the
income statement, the statement of comprehensive income, the
condensed statement of cash flows, the condensed statement of
changes in equity as well as selected explanatory notes to the
financial statements - and the interim group management report for
the period from 1 October 2020 until 31 March 2021 of TUI AG,
Berlin and Hanover, which are components of the half-year financial
report pursuant to § 115 WpHG (Wertpapierhandelsgesetz: German
Securities Trading Act).The preparation of the condensed interim
consolidated financial statements in accordance with the
International Financial Reporting Standards (IFRS) applicable to
interim financial reporting as adopted by the EU, and of the
interim group management report which has been prepared in
accordance with the requirements of the WpHG applicable to interim
group management reports is the responsibility of the entity's
executive board. Our responsibility is to express a conclusion on
the condensed interim consolidated financial statements and on the
interim group management report based on our review.
We conducted our review of the condensed interim consolidated
financial statements and the interim group management report in
accordance with the German generally accepted standards for the
review of financial statements promulgated by the Institut der
Wirtschaftsprüfer (IDW) as well as in supplementary compliance with
the International Standard on Review Engagements "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" (ISRE 2410). Those standards require that we plan and
perform the review in compliance with professional standards such
that we can preclude through critical evaluation, with limited
assurance, that the condensed interim consolidated financial
statements have not been prepared, in all material respects, in
accordance with the IFRS applicable to interim financial reporting
as adopted by the EU or that the interim group management report
has not been prepared, in all material respects, in accordance with
the requirements of the WpHG applicable to interim group management
reports. A review is limited primarily to inquiries of personnel of
the entity and analytical procedures and therefore does not provide
the assurance attainable in a financial statement audit. Since, in
accordance with our engagement, we have not performed a financial
statement audit, we cannot issue an auditor's report.
Based on our review, no matters have come to our attention that
cause us to presume that the condensed interim consolidated
financial statements of TUI AG, Berlin and Hanover, have not been
prepared, in material respects, in accordance with the IFRS
applicable to interim financial reporting as adopted by the EU, or
that the interim group management report has not been prepared, in
material respects, in accordance with the requirements of the WpHG
applicable to interim group management reports.
Without modifying our opinion, we draw attention to the section
"Going concern reporting under the UK Corporate Governance Code" of
the selected explanatory notes in the condensed interim
consolidated financial statements and the risk reporting in the
interim group management report in the chapter "Risk and
opportunities report". There, the executive board identifies a
going concern risk that, in the absence of an increase in new
travel bookings in the coming months and associated customer
advance payments from summer 2021 onwards, TUI Group will no longer
have sufficient financial resources to continue its business
operations without further support measures or the short-term sale
of non-current assets. In addition, in the opinion of the executive
board, the further suspension of compliance with covenants as well
as the extension of the financing in the financial year 2022 or
further government support measures are necessary for the
continuation of the entity's business activities. As stated in the
interim group management report and in the selected explanatory
notes, the events and circumstances surrounding the COVID-19
pandemic indicate a material uncertainty that may cast significant
doubt about the entity's ability to continue as a going concern,
and that represents a going concern risk within the meaning of
Section 322 (2) sentence 3 of the German Commercial Code (HGB).
Hanover/Germany, 10 May 2021
Deloitte GmbH
Wirtschaftsprüfungsgesellschaft
Christoph B. Schenk Dr. Hendrik Nardmann
German Public Auditor German Public Auditor
Cautionary statement regarding forward-looking statements
The present Half-Year Financial Report contains various
statements relating to TUI Group's and TUI AG's future development.
These statements are based on assumptions and estimates. Although
we are convinced that these forward-looking statements are
realistic, they are not guarantees of future performance since our
assumptions involve risks and uncertainties that could cause actual
results to differ materially from those anticipated. Such factors
include market fluctuations, the development of world market prices
for commodities and exchange rates or fundamental changes in the
economic environment. TUI does not intend to and does not undertake
any obligation to update any forward-looking statements in order to
reflect events or developments after the date of this Report.
Financial calendar
Date
Half-Year Financial Report 2021 12 May 2021
Quarterly Statement Q3 2021 August 2021
Annual Report 2021 December 2021
Contacts
Mathias Kiep
Group Director Controlling, Corporate Finance & Investor
Relations
Tel.: + 44 1293 645 925 /
+ 49 511 566-1425
Nicola Gehrt
Director, Head of Group Investor Relations
Tel.: + 49 511 566-1435
Contacts for analysts and investor in UK, Ireland and
Americas
Hazel Chung
Senior Investor Relations Manager
Tel.: +44 (0)1293 645 823
Contacts for analysts and investor in Continental Europa, Middle
East and Asia
Ina Klose
Senior Investor Relations Manager
Tel.: +49 (0)511 566 1318
Vera Weißwange
Junior Investor Relations Manager
Tel.: +49 (0)511 566 1425
TUI AG
Karl-Wiechert-Allee 4
30625 Hanover, Germany
Tel.: + 49 511 566-00
www.tuigroup.com
This Half-Year Financial Report, the presentation slides and the
video webcast for H1 FY 2021 (published on 12 May 2021) are
available at the following link:
www.tuigroup.com/en-en/investors
-----------------------------------------------------------------------------------------------------------------------
ISIN: DE000TUAG000
Category Code: IR
TIDM: TUI
LEI Code: 529900SL2WSPV293B552
OAM Categories: 1.2. Half yearly financial reports and audit reports/limited reviews
Sequence No.: 104447
EQS News ID: 1195387
End of Announcement EQS News Service
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