TUI AG (TUI)
TUI GROUP INTERIM REPORT 9M FY2021 1 OCTOBER 2020 - 30 JUNE 2021
12-Aug-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
Interim report 9M FY2021
1 October 2020 - 30 June 2021
Interim Management Report
-- Restart of operations - 1.5m summer bookings added since H1 2021 update1
-- 876k customers departed in Q3 2021, vs. 159k in Q2
-- Rebound of customer deposits - positive cash flow from operating and investing activities in Q3
-- Improved liquidity position - current headroom as of 9 August 2021 increased to ?3.1bn2
-- Successful refinancing - Upsizing of April convertible bond through ?190m tap issue
-- Further progress with asset-right strategy - Disposal of RIU Hotels S.A. (real estate portfolio) to Riu family;
disposal proceeds of ?541m received end of July 2021. Management of 100 Riu hotels unchanged in our subsidiary
RIUSA II S.A.
-- Extension of maturity profile - RCF extension by 24 months to July 2024 and covenant waiver agreed for September
2021 and March 2022.
-- Global Realignment Programme - reaffirmed to deliver half of ?400m savings by end of current financial year
-- Acceleration of digital strategy - package holiday customer app usage up by 21% pts to 68% in Q3
1 Since last updated bookings position 2 May 2021
2 Available liquidity defined as unrestricted cash plus committed lines including financing packages, convertible bonds
and proceeds from RIU Hotels S.A disposal
TUI Group - financial highlights
? million Q3 Q3 2020 Var. % 9M 2021 9M 2020 Var. % Var. % at constant
2021 currency
Revenue 649.7 71.8 + 1,365.9 6,710.4 - 79.6 - 79.4
805.4
Underlying EBIT1
Hotels & Resorts - 70.3 - 364.1 + 80.7 - 268.6 - 308.0 + 12.8 + 9.8
Cruises - 81.3 - 224.3 + 63.8 - 234.6 - 197.3 - 18.9 - 19.4
TUI Musement - 34.7 - 37.6 + 7.7 - 96.7 - 66.5 - 45.3 - 47.2
Holiday Experiences - - 626.1 + 70.2 - 599.9 - 571.9 - 4.9 - 6.9
186.3
Northern Region - - 177.2 - 63.6 - 708.1 - 592.4 - 19.5 - 18.8
289.8
Central Region - - 219.2 + 51.9 - 377.4 - 398.7 + 5.4 + 5.4
105.4
Western Region - 87.6 - 96.3 + 9.1 - 247.3 - 285.9 + 13.5 + 14.3
Markets & Airlines - - 492.7 + 2.0 - - - 4.4 - 3.8
482.7 1,332.8 1,277.0
All other segments - 0.8 - 53.4 + 98.6 - 45.9 - 118.0 + 61.1 + 61.0
TUI Group - - + 42.9 - - - 0.6 - 0.8
669.8 1,172.2 1,978.6 1,966.9
EBIT1 - - + 48.6 - - + 7.1
748.0 1,456.1 2,046.6 2,202.0
Underlying EBITDA - - 622.4 + 27.9 - -888.4 - 46.9
448.7 1,304.8
EBITDA2 - - 794.2 + 38.1 - - 991.1 - 33.5
491.4 1,322.9
Group loss - - + 37.7 - - - 4.9
939.8 1,509.6 2,438.0 2,324.7
Earnings per share ? - 0.85 - 2.51 + 66.1 - 2.66 - 3.98 + 33.2
Net capex and investment - 14.4 - 222.8 + 93.5 - 122.8 64.4 n. a.
Equity ratio (30 June)3 % - 3.6 6.4 - 10.0
Net financial position (30 - - - 8.2
June) 6,348.7 5,866.2
Employees (30 June) 46,518 42,093 + 10.5
Differences may occur due to rounding.
This Quarterly Report of the TUI Group was prepared for the
reporting period 9M FY2021 from 1 October 2020 to 30 June 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 pages 16 and
48.
2 EBITDA is defined as earnings before interest, income taxes,
goodwill impairment and amortisation and write-ups of other
intangible assets, depreciation and write-ups of property, plant
and equipment, investments and current assets.
3 Equity divided by balance sheet total in %, variance is given
in percentage points.
Q3 2021 Summary
Trading position -- Strong pipeline of 4.2m customers booked for
Summer 2021 season - a increase of 1.5m bookings since H1
update,
driven by good momentum from our continental European markets.
-- Adjusting for the latest changes in travel restrictions imposed
across our markets, we have flexed our capacity
plan assumption for our peak summer season (July to October) to
60% (of Summer 2019 volume).
Operational and financial update -- Q3 Group revenue of ?650m
reflecting the restart of travel across our markets and reopening
of destinations ahead
of the key Summer period. -- Within Hotels & Resorts, 283
hotels (79% of Group portfolio) were open at end of the third
quarter, across
destinations such as Balearics, Canaries, North Africa, Greek
Islands, Mexico, Turkey and Cuba, delivering average
occupancy rate of 48% and average revenue per bed of ?70. -- In
Cruises, TUI Cruises and Hapag-Lloyd Cruises stepped up operations
in the quarter, with seven out of eleven
ships offering itineraries across Europe during the third
quarter. TUI Cruises has sailed continuously since July
2020. Our UK cruise brand, Marella Cruises resumed operations on
the 25 June 2021, with Explorer being the first
ship to recommence sailings since March 2020. -- Markets &
Airlines took away 876k customers during the third quarter, mostly
from our Central and Western region
markets, who were able to travel to destinations such as Greece,
the Balearics and Canaries. -- Q3 Group underlying EBIT loss of
?670m, reflecting partial operations, offset by ramp-up costs
across our business
ahead of our peak summer period. -- Net debt improved to ?6,349m
versus our net financial position of ?6,813m as of 31 March 2021
(Q2). The ?464m
improvement in net debt in the third quarter reflects
particularly cash generation from customer bookings. -- Rebound of
customer deposits - Q3 2021 is the first quarter to deliver
positive cash flow from operating and
investing activities since the start of the pandemic, reflecting
the strong pent-up demand, with government
regulation a clear limiting factor to our operations. -- We
successfully placed convertible bonds with a total nominal amount
of ?400m in April 2021 and a further tap issue
for nominal amount of ?190m post balance sheet date in early
July, issued on the same terms. -- Further delivery of our
asset-right strategy, decoupling of hotel growth and real estate
investments, we agreed the
sale of our 49% minority stake in RIU Hotels S.A real-estate
joint venture for an enterprise value of ?1.5bn to
Saranja S.L, an entity of the Riu-Group. The transaction will
generate net cash consideration including earn-out of
up to ?670m. The transaction closed post balance sheet date on
31 July 2021 with initial cash proceeds received of
?541m (excluding earn out) and is expected to create a
significant book gain of ?200m in Q4 FY 2021. -- Including both the
new convertible bond and tap issue, and proceeds from the sale of
RIU Hotels S.A. joint venture,
our pro-forma cash and available facilities as of 9 August 2021
improved to ?3.1bn1. -- RCF maturity date extension agreed from
July 2022 to July 2024, with covenant waivers agreed for September
2021 and
March 2022. -- Reaffirm Global Realignment Programme is on track
to achieve our cost savings target of ?400m p.a by FY 2023.
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 the current financial year.
1 Available liquidity defined as unrestricted cash plus
committed lines including financing packages, convertible bonds and
proceeds from RIU Hotels S.A disposal
?400m placement of convertible bonds plus tap issue of ?190m
In April 2021, we successfully completed the placement of a
senior unsecured convertible bonds for ?400m and post balance sheet
date, a further tap issue for ?190m, both of which were
oversubscribed. The new tap issue bonds for ?190m are convertible
into new and/or existing no-par value ordinary registered shares of
TUI and are fully fungible with the ?400m convertible bonds issued
on 16 April 2021.
The new bonds are issued on the same terms (save for the issue
price) as the existing bonds issued in April and will form a single
series (Gesamtemission) with the existing bonds.
The bonds have been offered at a coupon rate of 5% and utilises
10% of conditional capital authorised at our recent AGM,
representing 110m 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.
We intend to use the convertible bond proceeds for refinancing,
in particular to reduce drawings under the KfW facilities and
towards a subsequent repayment of such facilities.
Sale of RIU Hotels S.A. real-estate portfolio
Further to our asset-right strategy, decoupling hotel growth and
real estate investment, we agreed the sale of our 49% minority
stake in RIU Hotels S.A. real estate joint venture to Saranja S.L,
an entity of Riu Group, owned by Carmen and Luis Riu. The
transaction for an enterprise value of ?1.5bn, implies an EV/EBITDA
multiple of 11.9x (Riu FY 2019) and equates to a sale price of
?670m including earn-out. The earn-out element is payable upon RIU
Hotels S.A. delivering its FY 2022 and FY 2023 operating
budget.
The sale was completed on 31 July 2021 and resulted in a net
cash inflow of ?541m, which will be used to reduce the Group's
debt. Further purchase price payments will be made in FY 2023 and
FY 2024 upon achievement of agreed earnings targets by RIU Hotels
S.A. The transaction is expected to generate a significant book
gain of ?200m in Q4 FY 2021.
Our subsidiary RIUSA II S.A. is not impacted by the transaction
and will continue to manage and distribute all Riu hotels and
resorts worldwide - including the 21 properties transferred to the
Riu-Group in the course of the transaction. The number of beds
under our Group portfolio of hotels therefore remains unchanged,
with only the ownership structure of 21 Riu properties changing
from owned structure under RIU Hotels S.A. to managed structure
under RIUSA II S.A.
Revolving Credit Facility maturity extension to July 2024 and
covenant waiver for September 2021 and March 2022 agreed
Post balance sheet date on 27 July 2021, we agreed with 19
international banks and KfW to extend the maturity of our Revolving
Credit Facility (RCF) totalling ?4.7bn by two years to July 2024.
Based on our current rating, the margin after extension for the RCF
tranches will be 4.5% per annum.
Our RCF currently stands at ?4.8bn. For regulatory reasons due
to Brexit, the credit line of a British bank (consisting of ?80m
euros cash and ?25m euros guarantee line) could not be extended
beyond summer 2022, thereafter our facility will amount to ?4.7bn
until 2024.
Our current credit facilities comprise the following -- ?1.75bn
credit line from 20 private banks (incl. ?215m guarantee line) --
?1.8bn KfW from the first stabilisation package -- ?1.05bn KfW from
second stabilisation package -- ?0.2bn KfW and private banks from
last stabilisation package
As part of our state support package agreed with the German
government, covenant waivers were granted for September 2020 and
March 2021. Given the continued disruption and limitation on our
operations as a result of travel restrictions imposed, on 9 June
2021 and again on agreement of the maturity extension, our creditor
banks agreed to a further covenant testing waiver for September
2021 and March 2022. Covenant testing will resume in September
2022, with higher ratio limits set for testing in September 2022
and March 2023. Normalised limits have been agreed to resume from
September 2023.
Liquidity position
Available liquidity as of 9 August 2021 improved to ?3.1bn1.
With many of our key continental European markets re-opening for
travel, and confirmation of quarantine exemption and lesser
restrictions for those fully vaccinated, we have seen an increase
in customer confidence and subsequently new bookings momentum from
Central and Western region markets. Q3 as a result saw our first
cash break-even quarter since the start of the pandemic, delivering
positive cash flow from operating and investing activities.
1 Available liquidity defined as unrestricted cash plus
committed lines including financing packages, convertible bonds and
proceeds from
RIU Hotels S.A. disposal.
Net debt
Net financial position improved to ?6,349m versus our net
financial position of ?6,813m as of 31 March 2021 (Q2). The ?464m
improvement in net debt in the third quarter reflects particularly
cash generation from customer bookings.
The WSF support measures comprise a silent participation
convertible into shares in TUI of ?420m and a second silent
participation of ?671m. As of 30 June 2021, both silent
participations were fully paid in. 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 ?400m convertible bonds, ?190m
tap issue and RIU Hotels S.A real estate disposal post balance
sheet date, we have taken first steps towards refinancing our
government facilities. As international leisure travel resumes and
global markets begin to recover, it is our priority to rebuild a
solid and healthy balance sheet 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.
Current trading -- Peak summer period July to October bookings2,
including amendments and voucher re-bookings, down 56% versus July
to
October 2019 (undistorted by COVID-19). ASP is up 6%, driven
both by product and market mix. -- Total Summer 2021 bookings2
including amendments and voucher re-bookings, down 68% versus
Summer 2019 (undistorted
by COVID-19). ASP2 is up 9% driven both by product and market
mix. -- 4.2m customers booked for our Summer 2021 programme, a net
increase of 1.5m bookings since H1 update, reflecting
the pent-up demand when restrictions are eased, driven
particularly by good momentum in Germany, Belgium, the
Netherlands, and Poland. -- Adjusting for the latest changes in
travel restrictions imposed across our markets, we have flexed our
capacity
plan assumption for the peak summer season (July to Oct) to 60%
(of Summer 2019 volume). -- Destinations which are well progressed
with their vaccination programme and are reporting low incidence
or
hospitalisation rates will support our reopening portfolio.
Destinations such as the Balearics, Canaries and Greek
islands, currently form the bulk of our planned capacity for
rest of the Summer 2021 peak season period. Our
multi-destination presence, alongside long-term hotelier
partnerships in place, means we are well placed to flex
our flight routings and remix hotel capacity to other
alternative destinations to enable holidays to continue if
required. -- We are offering exclusive testing packages to help
facilitate travel for our customers. In the UK, we have offered
subsidised, market-leading testing packages starting from as
little as £20 per passenger for a green destination,
in partnership with government approved testing provider
Chronomics, available exclusively to TUI customers.
2 Bookings up to 8 August 2021 compared to respective bookings
for 2019 programme (undistorted by COVID-19) and relate to all
customers whether risk or non-risk -- TUI Cruises has been
operating six of its seven Mein Schiff-fleet since end of July,
with itineraries across Baltic
and North Sea, Spanish coast, and Mediterranean. Hapag-Lloyd
Cruises has been operating its four-ship fleet since
July also, with new delivery Hanseatic spirit expected to join
the fleet from late August. Bookings for 2022/2023
are currently in line with historical ranges (normalised
pre-COVID-19), at slightly higher rates. Marella has
successfully launched their return, with Explorer operating a
domestic programme from Southampton since the end of
June. Explorer 2 commenced sailing from Newcastle in July and
Discovery is planned to operate out of Corfu towards
end of Q4, with Discovery 2 currently scheduled to return to
service in Spring 2022. -- We see good demand for our winter
long-haul programme and early sales for Summer 2022 are ahead of
pre-COVID-19
levels, supported by re-bookings and strong booking retention.
-- We see continued customer appetite and intention to travel for
future seasons within Markets & Airlines:
Summer Programme 2022 bookings - bookings2 up 120%.
2 Bookings up to 8 August 2021 compared to respective bookings
for 2019 programme (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 ?400m per annum by FY 2023. Projects are well underway across
core functions, Markets & Airlines and TUI Musement (formerly
Destination Experiences) and we are on track to achieve 50% of our
targeted savings by end of the current financial year. Of the 8,000
roles potentially impacted as part of the programme, we have to
date a reduction of 7,000 FTEs already completed or agreed.
Sustainability Agenda 2050
TUI is committed to making tourism more sustainable - reducing
the environmental impacts of holidays, creating positive change for
people and communities and pioneering sustainable tourism.
As a leading tourism group, we want to continue to use our
significant influence, collaboratively with our partners, to
initiate and drive sustainable change, across the whole leisure
travel sector.
We have ranked industry-best in the 2020 S&P Dow Jones
Sustainability Index Climate Strategy criteria. We have one of the
most carbon efficient airlines in Europe, with a proven track
record in aircraft performance and climate efficiency. Our cruise
fleet is one of the most modern cruise fleets on the seas and
furthering our credentials, our upcoming deliveries for our Mein
Schiff fleet in 2024 and 2026 will be equipped with Liquified
Natural Gas (LNG) engines.
To drive positive impact in our destinations, we launched the
TUI Care Foundation which has been responsible for creating various
local and international programmes, working in collaboration with
our destination partners as well as local and internationals NGOs
since 2016. Today, the foundation is running 25 projects in 20
countries. Our many programmes include more recently, the launch of
a Corona relief programme to help overcome the effect of the
COVID-19 pandemic in holiday destinations by setting up an
extensive relief initiative to support more than 200 local
organisation around the world. In addition, the Economic
Development Programme supports innovative and socially minded
tourism entrepreneurs in travel destinations. The programme drives
social innovation, creates local employment opportunities and
contributes to local added value in holiday destinations, using
tourism as a motor for positive change.
Our goal is to play a pioneering role in sustainability. We want
to use tourism's creative power to maximise the benefits of
tourism. And at the same time, we will innovate to minimise the
ecological footprint of travel as well as encourage our customers
to choose more sustainable travel options, and to take action to
reduce their negative impacts and maximise their positive impacts
in destinations. Together, with all our external and internal
stakeholders and partners, we will drive a more sustainable future
for the tourism industry.
To this end, with the UN Sustainable Development Goals at its
core, we look forward to launching the TUI Group Sustainability
Agenda 2050 this coming Autumn and sharing our sustainability
strategic initiatives and expected key milestones.
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 Executive Board continues to
believe that it is not in a position to issue a specific forecast
for the financial year 2021.
As part of our reporting on H1 2021 the expectations for the
financial year 2021 made 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.
In addition, we are adjusting our statement made in the Annual
Report 2020 for the adjustments expected in the financial year 2021
as follows: -- As a result of the sale of the 49% stake in RIU
Hotels S.A. agreed in Q3 2021 and the expected positive
disposal
result, we have also amended our estimate of the adjustments and
now expect net benefits to be adjusted for the
financial year 2021. -- See also TUI Group Annual Report 2020
page 50
Structure and strategy of TUI Group
Reporting structure
The present Interim Report 9M FY2021 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
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
Hotels & Resorts 74.0 4.5 n. a. 157.9 304.7 - 48.2
Cruises 1.1 2.0 - 45.0 2.7 483.6 - 99.4
TUI Musement 19.0 - 6.2 n. a. 37.5 294.2 - 87.2
Holiday Experiences 94.1 0.2 n. a. 198.2 1,082.5 - 81.7
Northern Region 56.0 15.3 + 266.0 215.1 2,202.2 - 90.2
Central Region 370.3 34.1 + 985.9 707.7 2,244.0 - 68.5
Western Region 120.5 20.4 + 490.7 222.6 1,095.5 - 79.7
Markets & Airlines 546.8 69.8 + 683.4 1,145.5 5,541.7 - 79.3
All other segments 8.7 1.7 + 411.8 22.3 86.2 - 74.1
TUI Group 649.7 71.8 + 804.9 1,365.9 6,710.4 - 79.6
TUI Group (at constant currency) 650.0 71.8 + 805.3 1,382.4 6,710.4 - 79.4
Underlying EBIT
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
Hotels & Resorts - 70.3 - 364.1 + 80.7 - 268.6 - 308.0 + 12.8
Cruises - 81.3 - 224.3 + 63.8 - 234.6 - 197.3 - 18.9
TUI Musement - 34.7 - 37.6 + 7.7 - 96.7 - 66.5 - 45.4
Holiday Experiences - 186.3 - 626.1 + 70.2 - 599.9 - 571.9 - 4.9
Northern Region - 289.8 - 177.2 - 63.5 - 708.1 - 592.4 - 19.5
Central Region - 105.4 - 219.2 + 51.9 - 377.4 - 398.7 + 5.3
Western Region - 87.6 - 96.3 + 9.0 - 247.3 - 285.9 + 13.5
Markets & Airlines - 482.7 - 492.7 + 2.0 - 1,332.8 - 1,277.0 - 4.4
All other segments - 0.8 - 53.4 + 98.5 - 45.9 - 118.0 + 61.1
TUI Group - 669.8 - 1,172.2 + 42.9 - 1,978.6 - 1,966.9 - 0.6
EBIT
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
Hotels & Resorts - 74.8 - 432.1 + 82.7 - 273.1 - 376.0 + 27.4
Cruises - 81.3 - 224.3 + 63.8 - 234.6 - 197.3 - 18.9
TUI Musement - 46.1 - 46.2 + 0.2 - 113.2 - 85.3 - 32.7
Holiday Experiences - 202.1 - 702.6 + 71.2 - 621.0 - 658.7 + 5.7
Northern Region - 293.1 - 195.3 - 50.1 - 734.1 - 618.7 - 18.7
Central Region - 110.6 - 347.9 + 68.2 - 334.7 - 448.3 + 25.3
Western Region - 102.0 - 152.5 + 33.1 - 268.5 - 351.5 + 23.6
Markets & Airlines - 505.6 - 695.6 + 27.3 - 1,337.3 - 1,418.4 + 5.7
All other segments - 40.3 - 57.9 + 30.4 - 88.3 - 124.9 + 29.3
TUI Group - 748.0 - 1,456.1 + 48.6 - 2,046.6 - 2,202.0 + 7.1
Segmental performance
Holiday Experiences
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
Revenue 94.1 0.2 n. a. 198.2 1,082.5 - 81.7
Underlying EBIT - 186.3 - 626.1 + 70.2 - 599.9 - 571.9 - 4.9
Underlying EBIT at constant currency - 188.7 - 626.1 + 69.9 - 611.4 - 571.9 - 6.9
Hotels & Resorts
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
Total revenue 135.4 8.8 n. a. 282.2 591.2 - 52.3
Revenue 74.0 4.5 n. a. 157.9 304.7 - 48.2
Underlying EBIT - 70.3 - 364.1 + 80.7 - 268.6 - 308.0 + 12.8
Underlying EBIT at constant currency - 73.3 - 364.1 + 79.9 - 277.9 - 308.0 + 9.8
Capacity hotels total1 ('000) 6,640 373 n. a. 16,058 17,006 - 5.6
Riu 2,750 211 n. a. 7,532 8,410 - 10.4
Robinson 594 27 n. a. 1,194 1,364 - 12.4
Blue Diamond 1,289 - n. a. 3,321 2,298 + 44.5
Occupancy rate hotels total2 48 23 + 25 44 74 - 30
(in %, variance in % points)
Riu 59 24 + 35 48 81 - 33
Robinson 48 34 + 14 48 67 - 19
Blue Diamond 57 - n. a. 46 75 - 29
Average revenue per bed hotels total3 70 49 + 44.4 67 73 - 8.8
(in ?)
Riu 56 41 + 38.4 56 69 - 19.7
Robinson 98 107 - 8.6 95 97 - 2.5
Blue Diamond 104 - n. a. 99 123 - 20.2
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
283 hotels were open as at the end of the period (79% of Group
hotel portfolio), increasing from 122 at end of H1 2021, reflecting
hotels which were able to reopen across destinations such as the
Balearics, Canaries, North Africa, Greek Islands, Mexico, Turkey
and Cuba.
Demonstrating the benefit of our diversified markets and
destinations, our hotels have hosted customers from the local
markets like Mexico as well as from the US in addition to our core
European source market customers.
In Q3 2021 we delivered an occupancy rate of 48% and average
revenue per bed of ?70.
Riu operated 85 hotels (out of 101 hotels) as at the end of
quarter. Overall occupancy of 59% and average revenue per bed of
?56 reflects the continued demand for our Riu brand.
Robinson operated 19 hotels (out of 26 hotels) as at end of the
quarter. Overall Q3 occupancy was 48%. The average revenue per bed
of ?98 was driven by product mix.
Blue Diamond operated all but one of its 34 hotels as at end of
the quarter. Overall occupancy was 57% and average revenue per bed
was ?104.
Underlying EBIT loss improved to ?70m versus prior quarter (Q2
2021 loss: ?103m) as a result.
Cruises
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
Revenue1 1.1 2.0 - 45.0 2.7 483.6 - 99.4
Underlying EBIT - 81.3 - 224.3 + 63.8 - 234.6 - 197.3 - 18.9
Underlying EBIT at constant currency - 80.4 - 224.3 + 64.2 - 235.6 - 197.3 - 19.4
Occupancy (in %, variance in % points)
TUI Cruises 41 - n. a. 37 97 - 60
Marella Cruises 48 - n. a. 48 96 - 48
Hapag-Lloyd Cruises2 42 - n. a. 33 77 - 44
Passenger days ('000)
TUI Cruises 256 - n. a. 610 2,854 - 78.6
Marella Cruises 6 - n. a. 6 1,366 - 99.6
Hapag-Lloyd Cruises 23 - n. a. 43 383 - 88.8
Average daily rates3 (in ?)
TUI Cruises 125 - n. a. 113 141 - 20.2
Marella Cruises (in £) 127 - n. a. 127 146 - 13.0
Hapag-Lloyd Cruises2 443 - n. a. 407 612 - 33.4
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
During Q3 2021, TUI Cruises increased its operations from May,
from three ships to four, offering itineraries to the Canaries,
Spanish coast, Greek Islands and Baltic Sea. Average daily rate of
the operated fleet was ?125 reflecting shorter average duration of
itineraries offered. Occupancy of the operated fleet was 41%.
Our UK cruise brand Marella, resumed sailing with Explorer at
the end of June, with a domestic programme from Southampton, its
first since the government-imposed suspension of cruise operations
in March 2020. Average daily rate and occupancy of the operated
fleet was £127 and 48% respectively, with occupancy capped at 50%
as required by UK government restrictions.
For Hapag-Lloyd Cruises, in addition to Europa 2 which was
already in operation, Expedition Class Hanseatic nature and
inspiration resumed sailings with short cruises from Hamburg and to
the Baltic Sea. Average daily rate of the operated fleet was ?443
reflecting the pricing of shorter and more local itineraries.
Occupancy of the operated fleet was 42%.
Underlying EBIT loss declined to ?81m versus prior quarter (Q2
2021 loss: ?55m) reflecting the ramp up of operations in preparing
our fleet and returning our crew onboard ahead of our peak summer
period. Prior year includes 100% result of Hapag-Lloyd Cruises (Q3
2020 loss: ?17.8m) which is now consolidated at equity within the
TUI Cruises Joint Venture.
TUI Musement (formerly Destination Experiences)
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
Total revenue 25.7 -5.4 n. a. 51.2 418.3 - 87.8
Revenue 19.0 - 6.2 n. a. 37.5 294.2 - 87.3
Underlying EBIT - 34.7 - 37.6 + 7.7 - 96.7 - 66.5 - 45.4
Underlying EBIT at constant currency - 35.0 - 37.6 + 6.9 - 97.9 - 66.5 - 47.2
212k excursions and activities sold in the quarter, reflecting
the increased departures and reopening of destinations. Online
sales participation was 39%.
Underlying EBIT loss of ?35m included ramp up costs as we
prepared staff to return to destinations ahead of peak summer
period.
Markets & Airlines
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
Revenue 546.8 69.8 + 683.4 1,145.5 5,541.7 - 79.3
Underlying EBIT - 482.7 - 492.7 + 2.0 - 1,332.8 - 1,277.0 - 4.4
Underlying EBIT at constant currency - 470.5 - 492.7 + 4.5 - 1,326.0 - 1,277.0 - 3.8
Direct distribution mix1,3 73 n. a. n. a. 74 n. a. n. a.
(in %, variance in % points)
Online mix2,3 52 n. a. n. a. 54 n. a. n. a.
(in %, variance in % points)
Customers ('000)3 876 60 n. a. 1,560 6,325 - 75.3
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
We restarted operations in April firstly from our German source
market. In Q3 we took 876k customers on their summer holidays,
mostly from our central and western markets. Greece, the Balearics
and the Canaries were the most popular destinations during the
quarter. Travel regulations remains a key limitation on our
operations, with customer demand highly correlated to newsflow and
positive travel policy advice.
Supported by the acceleration of our digital strategy, online
distribution has increased 4% pts to 52% (vs Q3 2019: 48%) overall
across our markets.
Underlying loss increased to ?483m versus prior quarter (Q2 2021
loss: ?404m) reflecting the ramp up costs of operations as we
prepared our aircraft fleet, retrained crew, and increased the
number of retail staff in stores ahead of peak summer period. The
quarterly result also includes ?33m benefit from hedging
ineffectiveness on both FX and fuel contracts.
Northern Region
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
Revenue 56.0 15.3 + 266.0 215.1 2,202.2 - 90.2
Underlying EBIT - 289.8 - 177.2 - 63.5 - 708.1 - 592.4 - 19.5
Underlying EBIT at constant currency - 278.7 - 177.2 - 57.3 - 704.0 - 592.4 - 18.8
Direct distribution mix1 95 n. a. n. a. 93 n. a. n. a.
(in %, variance in % points)
Online mix2 77 n. a. n. a. 76 n. a. n. a.
(in %, variance in % points)
Customers ('000) 50 - n. a. 169 2,238 - 92.4
1 Share of sales via own channels (retail and online)
2 Share of online sales
50k customers departed in the third quarter, reflecting the
limited green list destinations made available by the UK
government. Direct distribution remained high at 95% with online
distribution increasing by 11% pts to 77% (vs. Q3 2019: 66%).
Underlying loss increased to ?290m versus prior quarter (Q2 2021
loss: ?194m) as a result of ramp up costs in preparation for peak
Q4 and related costs from stop/start nature of permitted
destinations under UK travel restrictions.
Central Region
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
Revenue 370.3 34.1 + 985.9 707.7 2,244.0 - 68.5
Underlying EBIT - 105.4 - 219.2 + 51.9 - 377.4 - 398.7 + 5.3
Underlying EBIT at constant currency - 105.1 - 219.2 + 52.1 - 377.1 - 398.7 + 5.4
Direct distribution mix1,3 63 n. a. n. a. 63 n. a. n. a.
(in %, variance in % points)
Online mix2,3 39 n. a. n. a. 38 n. a. n. a.
(in %, variance in % points)
Customers3 ('000) 510 57 + 794.7 842 2,253 - 62.6
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
510k customers departed in the third quarter, reflecting the
more consistent travel advice given by our Central region
governments, enabling customers to depart with more certainty to
destinations such as Majorca, Canaries and Turkey.
Online distribution for the region has increased by 17% pts to
39% (vs. Q3 2019: 22%) with direct distribution increasing 13% pts
to 63% (vs. Q3 2019: 50%).
Underlying loss improved to ?105m versus prior quarter (Q2 2021
loss: 126m) reflecting the contribution from more substantial
departures and operations.
Western Region
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
Revenue 120.5 20.4 + 490.7 222.6 1,095.5 - 79.7
Underlying EBIT - 87.6 - 96.3 + 9.0 - 247.3 - 285.9 + 13.5
Underlying EBIT at constant currency - 86.7 - 96.3 + 10.0 - 245.0 - 285.9 + 14.3
Direct distribution mix1 85 n. a. n. a. 86 n. a. n. a.
(in %, variance in % points)
Online mix2 69 n. a. n. a. 70 n. a. n. a.
(in %, variance in % points)
Customers ('000) 317 3 n. a. 549 1,833 - 70.0
1 Share of sales via own channels (retail and online)
2 Share of online sales
317k customers departed in the period reflecting the reopening
of destinations part way through the quarter for the region. Again,
supported by our digital acceleration, online distribution improved
by 13% pts to 69% (vs. Q3 2019: 56%) with direct distribution
increasing 10% pts to 85% (vs. Q3 2019: 75%).
Underlying loss increased to ?88m versus prior quarter (Q2 2021
loss: ?84m) reflecting ramp up costs of operations ahead of peak
summer period.
All other segments
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
Revenue 8.7 1.7 + 411.8 22.3 86.2 - 74.1
Underlying EBIT - 0.8 - 53.4 + 98.5 - 45.9 - 118.0 + 61.1
Underlying EBIT at constant currency) - 0.7 - 53.4 + 98.7 - 46.0 - 118.0 + 61.0
Underlying EBIT loss improved to ?1m versus prior quarter (Q3
2021 loss: ?19m) reflecting our ongoing cost-savings measures
across head-office and other entities, as part of our global
realignment programme.
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 ?1,089.4m, the cash outflow from operating activities
decreased by ?869.6m compared to previous year.
The net debt as of 30 June 2021 increased by ?482.5m to
?6,348.7m year-on-year.
Net debt
30 June 2021 30 June 2020 Var. %
Financial debt 4,578.9 4,218.6 + 8.5
Lease liabilities 3,307.8 3,645.2 - 9.3
Cash and cash equivalents 1,524.4 1,988.0 - 23.3
Short-term interest-bearing investments 13.6 9.5 + 43.2
Net debt 6,348.7 5,866.2 + 8.2
Net capex and investments
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
Cash gross capex
Hotels & Resorts 22.1 44.6 - 50.4 92.0 215.2 - 57.2
Cruises 1.2 - 0.8 n. a. 16.3 42.7 - 61.8
TUI Musement 3.9 3.1 + 25.8 9.7 10.4 - 6.7
Holiday Experiences 27.1 46.9 - 42.2 118.0 268.3 - 56.0
Northern Region 2.2 - 1.0 n. a. 7.6 29.9 - 74.6
Central Region 1.2 2.8 - 57.1 3.7 11.7 - 68.4
Western Region 1.9 3.0 - 36.7 3.5 14.8 - 76.4
Markets & Airlines* 20.3 8.2 + 147.6 35.3 68.9 - 48.8
All other segments 21.2 14.2 + 49.3 54.1 53.6 + 0.9
TUI Group 68.7 69.3 - 0.9 207.4 390.9 - 46.9
Net pre delivery payments on aircraft - 54.5 0.6 n. a. - 86.1 - 41.8 - 106.0
Financial investments 1.2 75.7 - 98.4 22.9 132.6 - 82.7
Divestments - 29.8 - 368.4 + 91.9 - 266.9 - 417.2 + 36.0
Net capex and investments - 14.4 - 222.8 + 93.5 - 122.8 64.4 n. a.
* Including ?15.0m for Q3 2021 (previous year: ?3.4m) and ?20.5m
for 9M 2021 (previous year ?12.5m) 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 9M 2021 was 46.9% lower year-on-year,
reflecting our continuously disciplined capex management. Net capex
and investments of ?-122.8m declined by ?187.2m year-on-year.
The divestments related mainly to the sale and lease back of
spare engines and aircraft. Previous year's divestments included
the sale of Hapag-Lloyd Kreuzfahrten to our joint venture TUI
Cruises and the sale of two German specialist tour operators.
Assets and liabilities
Assets and liabilities
30 June 2021 30 Sep 2020 Var. %
Non-current assets 11,314.2 12,647.8 - 10.5
Current assets 3,321.7 2,693.4 + 23.3
Assets 14,635.9 15,341.1 - 4.6
Equity - 524.7 218.1 n. a.
Provisions 2,197.4 2,317.3 - 5.2
Financial liabilities 4,578.9 4,269.0 + 7.3
Other liabilities 8,384.3 8,536.7 - 1.8
Liabilities 14,635.9 15,341.1 - 4.6
Comments on the consolidated income statement
Unaudited condensed consolidated income statement of TUI Group for the period from
1 Oct 2020 to 30 Jun 2021
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var.
%
Revenue 649.7 71.8 +804.9 1,365.9 6,710.4 -
79.6
Cost of sales 1,124.2 1,009.0 +11.4 2,642.4 7,968.7 -
66.8
Gross loss - 474.5 - 937.3 +49.4 - - - 1.4
1,276.4 1,258.3
Administrative expenses 216.5 202.7 +6.8 604.2 731.1 -
17.4
Other income 10.1 4.5 +124.4 20.9 97.6 -
78.6
Other expenses 1.0 14.9 - 93.3 9.2 18.6 -
50.5
Impairment of goodwill - 67.7 n. a. - 67.7 n. a.
Impairment (+) / Reversal of impairment (-) of financial - 6.8 72.1 n. a. - 35.9 95.6 n. a.
assets
Financial income - 1.9 4.8 n. a. 25.0 27.2 - 8.1
Financial expense 100.5 74.9 +34.2 356.5 204.6 +74.2
Share of result of investments accounted for using the equity - 69.4 - 107.4 +35.4 - 226.5 - 63.7 -
method 255.6
Impairment (+) / Reversal of impairment (-) of net investments - 51.2 n. a. - 0.5 53.0 n. a.
in joint ventures and associates
Earnings before income taxes - 846.9 - +44.2 - - - 1.0
1,518.8 2,390.7 2,367.7
Income taxes (expense (+), income (-)) 92.9 - 9.1 n. a. 47.3 - 43.1 n. a.
Group loss - 939.8 - +37.7 - - - 4.9
1,509.6 2,438.0 2,324.7
Group loss attributable to shareholders of TUI AG - 934.8 - +36.9 - - - 2.9
1,481.4 2,409.6 2,342.8
Group loss / profit attributable to non-controlling interest - 5.0 - 28.2 +82.3 - 28.4 18.1 n. a.
The development of TUI Group's revenue and earnings in the first
nine months 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 9M 2021 declined by 79.6% year-on-year
to ?1.4bn. 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 are adjusted in the reconciliation to
underlying EBIT.
Reconciliation to underlying EBIT
? million Q3 Q3 2020 Var. 9M 2021 9M 2020 Var.
2021 % %
Earnings before income taxes - - +44.2 - - - 1.0
846.9 1,518.8 2,390.7 2,367.7
plus: Net interest expenses (excluding expense / income from 97.2 69.0 +40.9 336.7 173.6 +94.0
measurement of interest hedges)
plus / less: (Expenses) income from measurement of interest hedges 1.8 - 6.3 n. a. 7.4 - 7.9 n. a.
EBIT - - +48.6 - - 7.1
748.0 1,456.1 2,046.6 2,202.0
Adjustments:
plus: Separately disclosed items 70.0 266.0 43.5 194.9
plus: Expense from purchase price allocation 8.2 17.9 24.4 40.2
Underlying EBIT - - +42.9 - - - 0.6
669.8 1,172.2 1,978.6 1,966.9
The TUI Group's operating loss adjusted for special items
increased by ?11.7m to ?1,978.6m in 9M 2021. -- For further details
on the separately disclosed items see page 47 in the Notes of this
report.
Key figures of income statement
Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
EBITDAR - 489.5 - 790.5 + 38.1 - 1,313.5 - 952.4 - 37.9
Operating rental expenses - 1.9 - 3.7 + 48.6 - 9.4 - 38.7 + 75.7
EBITDA - 491.4 - 794.2 + 38.1 - 1,322.9 - 991.1 - 33.5
Depreciation/amortisation less reversals of - 256.6 - 661.9 + 61.2 - 723.7 - 1,210.9 + 40.2
depreciation*
EBIT - 748.0 - 1,456.1 + 48.6 - 2,046.6 - 2,202.0 + 7.1
Income/Expense from the meaurement of interest hedges 1.8 - 6.3 n. a. 7.4 - 7.9 n. a.
Net interest expense 97.2 69.0 + 40.9 336.7 173.6 + 94.0
EBT - 846.9 - 1,518.8 + 44.2 - 2,390.7 - 2,367.7 - 1.0
* on property, plant and equipment, intangible assets, right of use assets and other assets
Other segment indicators
Underlying EBITDA
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
Hotels & Resorts - 18.8 - 162.5 + 88.4 - 105.9 - 6.1 n. a.
Cruises - 65.2 - 94.9 + 31.3 - 187.4 6.1 n. a.
TUI Musement - 28.7 - 31.2 + 8.0 - 78.3 - 46.5 - 68.4
Holiday Experiences - 112.7 - 288.6 + 60.9 - 371.6 - 46.5 - 699.1
Northern Region - 204.7 - 73.5 - 178.5 - 460.2 - 321.3 - 43.2
Central Region - 77.4 - 168.6 + 54.1 - 287.3 - 272.1 - 5.6
Western Region - 53.6 - 39.3 - 36.4 - 144.2 - 138.7 - 4.0
Markets & Airlines - 335.7 - 281.3 - 19.3 - 891.8 - 732.0 - 21.8
All other segments - 0.4 - 52.5 + 99.2 - 41.5 - 109.9 + 62.2
TUI Group - 448.7 - 622.4 + 27.9 - 1,304.8 - 888.4 - 46.9
EBITDA
? million Q3 2021 Q3 2020 Var. % 9M 2021 9M 2020 Var. %
Hotels & Resorts - 21.2 - 162.8 + 87.0 - 108.4 - 6.4 n. a.
Cruises - 65.2 - 94.9 + 31.3 - 187.4 6.1 n. a.
TUI Musement - 38.2 - 34.8 - 9.8 - 89.1 - 54.6 - 63.2
Holiday Experiences - 124.5 - 292.4 + 57.4 - 384.9 - 54.9 - 601.1
Northern Region - 205.6 - 74.4 - 176.3 - 477.7 - 323.9 - 47.5
Central Region - 79.0 - 296.8 + 73.4 - 240.3 - 318.2 + 24.5
Western Region - 66.2 - 73.6 + 10.1 - 159.9 - 177.4 + 9.9
Markets & Airlines - 350.8 - 444.8 + 21.1 - 878.0 - 819.4 - 7.2
All other segments - 16.1 - 57.0 + 71.8 - 60.0 - 116.8 + 48.6
TUI Group - 491.4 - 794.2 + 38.1 - 1,322.9 - 991.1 - 33.5
Employees
30 June 2021 30 June 2020 Var. %
Hotels & Resorts 18,312 9,754 + 87.7
Cruises* 58 340 - 82.9
TUI Musement 4,510 3,807 + 18.5
Holiday Experiences 22,880 13,901 + 64.6
Northern Region 9,210 11,149 - 17.4
Central Region 7,636 9,090 - 16.0
Western Region 4,495 5,666 - 20.7
Markets & Airlines 21,341 25,905 - 17.6
All other segments 2,297 2,287 + 0.4
Total 46,518 42,093 + 10.5
* Excludes TUI Cruises (JV) employees. Cruises employees are primarily hired by external crew management agencies.
Corporate Governance
Composition of the Boards
The composition of TUI AG's Boards changed as follows in the
first nine months in FY 2021:
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
re-signed 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 Hir-schel and Michael Pönipp stepped down
at the end of their regular term of office.
There were the following changes in TUI AG's Executive
Board:
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 Strate-gy and M&A.
On 11 May 2021, the Supervisory Board of TUI AG decided to
appoint Sybille Reiß as Member of the Executive Board responsible
for Human Resources and as Labor Director with effect from 1 July
2021. She took over the position from Dr Elke Eller, who did not
renew her contract, which was scheduled to expire.
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.
With the customer deposits received and expected for the peak
season in the summer (July to October 2021), additional funds from
the convertible bond placed in Q3 2021, the cash inflow from the
sale of RIU Hotels S.A. and the extension of the revolving credit
facilities including the further suspension of the review of
financial covenants, the Executive Board believes that, despite the
existing risks, the TUI Group currently has sufficient funds, and
will continue to have sufficient funds in the future, resulting
both from borrowing and from operating cash flows, to meet its
payment obligations and to continue as a going concern. The
Executive Board anticipates that as at 30 June 2021, a material
uncertainty that may cast significant doubt about the Group's
ability to continue as a going concern no longer exists. Therefore,
as at 30 June 2021, the Executive Board no longer identifies any
material uncertainty that may cast significant doubt on the Group's
ability to continue as a going concern. The Executive Board no
longer considers the remaining risk with regard to a further
pandemic-related change in booking behaviour as a threat to the
company as a going concern. In its assessment, the Executive Board
assumes that the booking figures will
gradually recover in the financial year 2022 and that the
booking behaviour in the financial year 2023 will largely
correspond to the pre-pandemic level. The Executive Board assumes
that there will be no further long-term closures and lockdowns that
could affect travel behaviour. Nevertheless, customer bookings may
deteriorate due to new travel restrictions, insufficient
vaccination coverage against the COVID-19 virus in individual
countries, and virus variants for which there is insufficient
vaccination protection, thereby affecting the Company's
performance.
During this period of reduced travel compared to pre-pandemic
levels, 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.
Unaudited condensed Consolidated Interim Financial
Statements
Unaudited condensed consolidated income statement of TUI Group for the period from
1 Oct 2020 to 30 Jun 2021
? million Notes Q3 2021 Q3 2020 9M 2021 9M 2020
Revenue (1) 649.7 71.8 1,365.9 6,710.4
Cost of sales (2) 1,124.2 1,009.0 2,642.4 7,968.7
Gross loss - 474.5 - 937.3 - -
1,276.4 1,258.3
Administrative expenses (2) 216.5 202.7 604.2 731.1
Other income (3) 10.1 4.5 20.9 97.6
Other expenses (4) 1.0 14.9 9.2 18.6
Impairment of goodwill (9) - 67.7 - 67.7
Impairment (+) / Reversal of impairment (-) of financial assets (20) - 6.8 72.1 - 35.9 95.6
Financial income (5) - 1.9 4.8 25.0 27.2
Financial expense (5) 100.5 74.9 356.5 204.6
Share of result of investments accounted for using the equity method (6) - 69.4 - 107.4 - 226.5 - 63.7
Impairment (+) / Reversal of impairment (-) of net investments in joint (6) - 51.2 - 0.5 53.0
ventures and associates
Earnings before income taxes - 846.9 - - -
1,518.8 2,390.7 2,367.7
Income taxes (expense (+), income (-)) (7) 92.9 - 9.1 47.3 - 43.1
Group loss - 939.8 - - -
1,509.6 2,438.0 2,324.7
Group loss attributable to shareholders of TUI AG - 934.8 - - -
1,481.4 2,409.6 2,342.8
Group loss / profit attributable to non-controlling interest (8) - 5.0 - 28.2 - 28.4 18.1
Earnings per share
? Q3 2021 Q3 2020 9M 2021 9M 2020
Basic and diluted loss / earnings per share - 0.85 - 2.51 - 2.66 - 3.98
Unaudited condensed consolidated statement of comprehensive income of TUI Group for the period from
1 Oct 2020 to 30 Jun 2021
? million Q3 Q3 2020 9M 2021 9M 2020
2021
Group loss - - - -
939.8 1,509.6 2,438.0 2,324.7
Remeasurement of defined benefit obligations and related fund assets - - 389.8 - 268.8 68.3
124.5
Other comprehensive income of investments accounted for using the equity method 9.4 0.7 39.3 - 44.1
that will not be reclassified
Fair value gain/loss on investments in equity instruments designated as at FVTOCI 0.2 - 17.3 - 0.3 - 25.6
Income tax related to items that will not be reclassified 85.1 104.3 118.0 1.2
(expense (-), income (+))
Items that will not be reclassified to profit or loss - - 302.1 - 111.8 - 0.2
29.8
Foreign exchange differences - - 18.9 48.0 - 140.3
15.1
Cash flow hedges 39.0 166.8 92.9 - 277.6
Other comprehensive income of investments accounted for using the equity method 1.2 10.7 - 22.1 5.7
that may be reclassified
Income tax related to items that may be reclassified (expense (-), income (+)) - 6.7 - 28.5 - 28.8 78.1
Items that may be reclassified to profit or loss 18.4 130.1 90.0 - 334.1
Other comprehensive income - - 172.0 - 21.8 - 334.3
11.4
Total comprehensive income - - - -
951.2 1,681.6 2,459.8 2,659.0
attributable to shareholders of TUI AG - - - -
945.4 1,650.5 2,443.6 2,634.6
attributable to non-controlling interest - 5.8 - 31.1 - 16.2 - 24.4
Unaudited condensed consolidated statement of financial position of TUI Group as at 30 Jun 2021
? million Notes 30 Jun 2021 30 Sep 2020
Assets
Goodwill (9) 2,999.0 2,914.5
Other intangible assets 542.7 553.5
Property, plant and equipment (10) 3,278.9 3,462.5
Right-of-use assets (11) 3,094.3 3,227.9
Investments in joint ventures and associates 646.2 1,186.7
Trade and other receivables (12) (20) 206.3 402.4
Derivative financial instruments (20) 7.7 7.4
Other financial assets (20) 8.2 10.6
Touristic payments on account 112.4 149.9
Other non-financial assets 230.5 423.2
Income tax assets 9.6 9.6
Deferred tax assets 178.3 299.6
Non-current assets 11,314.2 12,647.8
Inventories 54.2 73.2
Trade and other receivables (12) (20) 476.6 486.3
Derivative financial instruments (20) 44.6 88.9
Other financial assets (20) 13.6 14.9
Touristic payments on account 635.4 555.5
Other non-financial assets 135.2 113.4
Income tax assets 45.9 70.9
Cash and cash equivalents (20) 1,524.4 1,233.1
Assets held for sale (13) 391.7 57.2
Current assets 3,321.7 2,693.4
Total assets 14,635.9 15,341.1
Unaudited condensed consolidated statement of financial position of TUI Group as at 30 Jun 2021
? million Notes 30 Jun 2021 30 Sep 2020
Equity and liabilities
Subscribed capital 1,099.4 1,509.4
Capital reserves 5,253.5 4,211.0
Revenue reserves - 8,618.8 - 6,168.8
Silent participation 1,091.0 -
Equity before non-controlling interest - 1,174.9 - 448.4
Non-controlling interest 650.2 666.5
Equity (19) - 524.7 218.1
Pension provisions and similar obligations (14) 988.2 983.6
Other provisions 701.9 912.1
Non-current provisions 1,690.1 1,895.7
Financial liabilities (15), (20) 4,304.0 3,691.7
Lease liabilities (16) 2,644.6 2,712.6
Derivative financial instruments (20) 15.0 44.0
Other financial liabilities (17), (20) 5.6 7.2
Other non-financial liabilities 197.7 198.4
Income tax liabilities 56.7 61.3
Deferred tax liabilities 63.4 192.7
Non-current liabilities 7,287.1 6,908.1
Non-current provisions and liabilities 8,977.2 8,803.7
Pension provisions and similar obligations (14) 29.1 31.4
Other provisions 478.1 390.3
Current provisions 507.3 421.6
Financial liabilities (15), (20) 274.9 577.3
Lease liabilities (16) 663.2 687.3
Trade payables (20) 1,316.3 1,611.5
Derivative financial instruments (20) 26.8 274.8
Other financial liabilities (17), (20) 325.9 422.0
Touristic advance payments received (18) 2,587.4 1,770.1
Other non-financial liabilities 466.0 447.8
Income tax liabilities 15.7 82.4
Current liabilities 5,676.2 5,873.2
Liabilities related to assets held for sale - 24.5
Current provisions and liabilities 6,183.5 6,319.3
Total equity, liabilities and provisions 14,635.9 15,341.1
Unaudited condensed consolidated statement of changes in Group equity of TUI Group for the period from
1 Oct 2020 to 30 Jun 2021
Subscribed Capital Revenue Silent Equity before Non-controlling
? 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 - - 0.7 - 0.7 - 0.7
schemes
Issuance of - 95.7 - - 95.7 - 95.7
convertible bonds
Capital increase 509.0 27.7 - 1,091.0 1,627.7 - 1,627.7
Capital reduction - 919.0 919.0 - - - - -
Other - - - 6.9 - - 6.9 - - 6.9
Group loss - - - - - 2,409.6 - 28.4 -
2,409.6 2,438.0
Foreign exchange - - 35.7 - 35.7 12.2 47.9
differences
Financial assets at - - - 0.3 - - 0.3 - - 0.3
FVTOCI
Cash Flow Hedges - - 92.9 - 92.9 - 92.9
Remeasurements of
defined benefit - - - 268.8 - - 268.8 - - 268.8
obligations and
related fund assets
Other comprehensive
income of investments - - 17.2 - 17.2 - 17.2
accounted for using
the equity method
Taxes attributable to
other comprehensive - - 89.2 - 89.2 - 89.2
income
Other comprehensive - - - 34.1 - - 34.1 12.2 - 21.9
income
Total comprehensive - - - - - 2,443.7 - 16.2 -
income 2,443.7 2,459.9
Balance as at 30 Jun 1,099.4 5,253.5 - 1,091.0 - 1,174.9 650.2 - 524.7
2021 8,618.8
Unaudited condensed consolidated statement of changes in Group equity of TUI Group for the period from
1 Oct 2019 to 30 Jun 2020
Subscribed Capital Revenue Silent Equity before Non-controlling
? 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 - - - 13.7 - - 13.7 - - 13.7
Balance as at 1 Oct 1,505.8 4,207.5 - - 3,440.5 711.4 4,151.9
2019 2,272.9
Dividends - - - 318.1 - - 318.1 - 0.2 - 318.3
Share-based payment - - 3.4 - 3.4 - 3.4
schemes
Effects on the
acquisition of - - - 0.3 - - 0.3 - 1.3 - 1.6
non-controlling
interest
Group loss - - - - - 2,342.8 18.1 -
2,342.8 2,324.7
Foreign exchange - - - 97.7 - - 97.7 - 42.5 - 140.2
differences
Financial assets at - - - 25.6 - - 25.6 - - 25.6
FVTOCI
Cash Flow Hedges - - - 277.6 - - 277.6 - - 277.6
Remeasurements of
defined benefit - - 68.3 - 68.3 - 68.3
obligations and
related fund assets
Other comprehensive
income of investments - - - 38.4 - - 38.4 - - 38.4
accounted for using
the equity method
Taxes attributable to
other comprehensive - - 79.3 - 79.3 - 79.3
income
Other comprehensive - - - 291.7 - - 291.7 - 42.5 - 334.2
income
Total comprehensive - - - - - 2,634.5 - 24.4 -
income 2,634.5 2,658.9
Balance as at 30 Jun 1,505.8 4,207.5 - - 490.9 685.5 1,176.5
2020 5,222.4
Unaudited condensed consolidated cash flow statement of TUI Group for the period from
1 Oct 2020 to 30 Jun 2021
? million Notes 9M 2021 9M 2020
Group loss - 2,438.0 - 2,324.7
Depreciation, amortisation and impairment (+) / write-backs (-) 723.7 1,212.1
Other non-cash expenses (+) / income (-) 190.0 161.1
Interest expenses 352.3 188.7
Dividends from joint ventures and associates 13.4 7.0
Profit (-) / loss (+) from disposals of non-current assets - 5.9 - 82.6
Increase (-) / decrease (+) in inventories 6.0 19.7
Increase (-) / decrease (+) in receivables and other assets 224.9 504.1
Increase (+) / decrease (-) in provisions - 230.2 - 9.2
Increase (+) / decrease (-) in liabilities (excl. financial liabilities) 74.4 - 1,635.2
Cash outflow from operating activities (23) - 1,089.4 - 1,959.0
Payments received from disposals of property, plant and equipment and intangible assets 294.6 106.3
Payments received from disposals of consolidated companies 51.3 342.1
(less disposals of cash and cash equivalents due to divestments)
Payments received from the disposals of other non-current assets 23.5 84.3
Payments made for investments in property, plant and equipment and intangible assets - 220.6 - 442.6
Payments made for investments in consolidated companies - 1.9 - 41.3
(less cash and cash equivalents received due to acquisitions)
Payments made for investments in other non-current assets - 21.5 - 88.6
Cash inflow / cash outflow from investing activities (23) 125.4 - 39.9
Payments received from capital increases* 1,722.9 -
Payments made for acquisition of own shares - - 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 711.7 3,335.0
Payments made for redemption of loans and financial liabilities - 452.7 - 77.5
Payments made for principal of lease liabilities - 454.0 - 476.9
Interest paid - 299.6 - 155.4
Cash inflow from financing activities (23) 1,228.3 2,303.9
Net change in cash and cash equivalents 264.3 305.0
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 27.0 - 9.1
Net change in cash and cash equivalents 264.3 305.0
Cash and cash equivalents at end of period 1,524.4 2,043.6
of which included in the balance sheet as assets held for sale - 55.6
* This line comprises the payments received from the capital increase, the silent participations and the convertible
bond.
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 30 June 2021. The Interim Financial Statements are prepared
in euros. Unless stated otherwise, all amounts are stated in
million euros (?m).
The Interim Financial Statements were approved for publication
by the Executive Board of TUI AG on 11 August 2021.
Accounting principles
Declaration of compliance
The consolidated interim financial report for the period ended
30 June 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 auditor. 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 30 June 2021 was ?6.3bn.
Net debt
30 June 2021 30 Sep 2020 Var. %
Financial debt 4,578.9 4,269.0 + 7.3
Lease liabilities 3,307.8 3,399.9 - 2.7
Cash and cash equivalents 1,524.4 1,233.1 + 23.6
Short-term interest-bearing investments 13.6 14.9 - 8.7
Net debt 6,348.7 6,420.9 - 1.1
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 in two
steps from the Federal Republic of Germany in FY 2020, in
particular in the form of a credit line from KfW totalling ?2.85bn
and an option bond from the Economic Stabilization Fund (WSF) in
the amount of ?150m with initial option rights to around 58.7m
shares. The option bond was issued to the Economic Stabilization
Fund on 1 October 2020. In the second quarter of FY 2021, TUI
secured further funds from a further financing package of ?1.8bn
agreed with Unifirm Ltd, a banking consortium and KfW as well as
the WSF.
The preconditions for all components of the third financing
package were created at the Extraordinary General Meeting of TUI AG
on 5 January 2021. This included in particular the resolution to
reduce the capital stock from ?2.56 per share to ?1.00 per share
and the subsequent capital increase of around ?509m.
The WSF and TUI AG subsequently signed the agreement on two
silent participations totalling ?1.091bn. The WSF measures comprise
a silent participation convertible into shares in TUI of ?420m
(Silent Participation I) and a second silent participation (Silent
Participation II) of ?671m. As of 30 June 2021, silent
participation I and II were fully paid in. 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 ?200m.
TUI AG successfully completed its capital increase on 28 January
2021. The gross issue proceeds amounted to around ?568m. The
Group's share capital increased nominally by just under ?509m to
around ?1.099bn.
TUI used the funds from the capital increase to repay the
outstanding senior bond (October 2016 - October 2021) of ?300m
ahead of schedule on 23 February 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 until July
2022.
On 16 April 2021, TUI AG issued a convertible bond with a total
nominal amount of ?400m, which was increased by a total nominal
amount of almost ?190m in July 2021. TUI received a total of more
than ?600m from the overall issue of the convertible bond. Provided
the convertible bond has not been converted, redeemed or
repurchased and retired ahead of schedule, it will be redeemed at
its nominal amount on 16 April 2028. Investors have the option to
convert the convertible bond into registered shares of TUI. TUI
intends to use the proceeds from the overall issuance of the
convertible bonds to refinance and to reduce drawings on the KfW
facilities and to repay these facilities later.
On 27 May 2021, TUI AG agreed to sell its 49% stake in RIU
Hotels S.A. to a company of the Riu Group owned by Carmen and Luis
Riu. The transaction was completed on 31 July 2021 and resulted in
a net cash inflow of ?541,4m, which will be used to reduce the
Group's debt. Further purchase price payments will be made in FY
2023 and 2024 if RIU Hotels S.A. achieves agreed earnings
targets.
Already in H1 2021, cash inflows were also generated from the
sale and leaseback of aircraft and spare parts.
On 27 July 2021, TUI agreed with the bank consortium and KfW on
an extension of TUI AG's revolving credit facility ("RCF") and KfW
credit line (both tranches) totalling ?4.7bn to summer 2024. TUI
Group's revolving credit facilities currently amount to ?4.8bn. For
regulatory reasons due to Brexit, the credit line of a British bank
(around ?80m cash and ?25m guarantee line) cannot be extended
beyond summer 2022, so that thereafter the credit lines will total
?4.7bn until 2024.
The TUI Group's current credit facilities comprise the following
-- ?1.75bn credit line from 20 private banks (incl. ?215m guarantee
line) -- ?1.8bn KfW from 1st financing package -- ?1.05bn KfW from
2nd financing package -- ?0.2bn KfW and private banks from 3rd
financing package.
TUI AG's RCF and KfW credit line are subject to compliance with
certain financial target values (covenants) for debt coverage and
interest coverage, the review of which is carried out based on the
last four reported quarters at the end of the financial year or the
half-year of a financial year. Against the backdrop of the ongoing
pressures from the COVID-19 pandemic, the review is currently
suspended. On 9 June 2021 and again when the credit lines were
extended, TUI AG's creditor banks agreed to a further suspension of
the review of these covenants until the end of March 2022, so that
the review will now only be resumed in September 2022. In addition,
higher limits will be applied at the first two cut-off dates before
normalised limits have to be complied with from September 2023.
Currently, the TUI Group continues to be affected by the
negative financial impact of the COVID 19 pandemic. In Q3 2021, the
lifting of travel restrictions led to an increase in bookings for
the current summer season, in particular in Germany, Belgium, the
Netherlands and Poland, while the English market showed a weaker
development due to the later lifting of travel restrictions. At the
time of preparing this report (11 August 2021), around 4.2m
customers had booked travel from our 2021 summer programme, an
increase of 1.5m bookings since our H1 2021 update. Adjusting for
the latest changes in travel restrictions imposed across our
markets, we have flexed our capacity plan assumption for our peak
summer season (July to October 2021) to around 60% of Summer 2019
volume.
Due to ongoing changes in travel restrictions, it remains
impossible to predict when we will be able to fully resume our
travel programme. 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. However, it is now foreseeable that sufficient
vaccines will be available in our key source markets and
destinations to ensure a further recovery in travel in the FY
2022.
With the customer deposits received and expected for the peak
season in the summer (July to October 2021), additional funds from
the convertible bond placed in Q3 2021, the cash inflow from the
sale of RIU Hotels S.A. and the extension of the revolving credit
facilities including the further suspension of the review of
financial covenants, the Executive Board believes that, despite the
existing risks, the TUI Group currently has sufficient funds, and
will continue to have sufficient funds in the future, resulting
both from borrowing and from operating cash flows, to meet its
payment obligations and to continue as a going concern. The
Executive Board anticipates that as at 30 June 2021, a material
uncertainty that may cast significant doubt about the Group's
ability to continue as a going concern no longer exists. Therefore,
as at 30 June 2021, the Executive Board no longer identifies any
material uncertainty that may cast significant doubt on the Group's
ability to continue as a going concern. The Executive Board no
longer considers the remaining risk with regard to a further
pandemic-related change in booking behaviour as a threat to the
company as a going concern. In its assessment, the Executive Board
assumes that the booking figures will gradually recover in the
financial year 2022 and that the booking behaviour in the financial
year 2023 will largely correspond to the pre-pandemic level. The
Executive Board assumes that there will be no further long-term
closures and lockdowns that could affect travel behaviour.
Nevertheless, customer bookings may deteriorate due to new travel
restrictions, insufficient vaccination coverage against the
COVID-19 virus in individual countries, and virus variants for
which there is insufficient vaccination protection, thereby
affecting the Company's performance.
In accordance with Regulation 30 of the UK Corporate Governance
Code, the Executive Board 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
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 of 30 June 2021.
The impairment test required estimates and judgement regarding
the underlying assumptions, in particular the weighted average cost
of capital after income tax (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 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 recover at
the latest in the financial year 2023 to 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
level of travel activity in the summer will be lower especially as
there was nearly no business from 1 October 2020 to spring
2021.
For information on the calculation of the weighted average 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 30 June 2021
are materially consistent with those followed in preparing the
annual consolidated financial statements for the financial year
ended 30 September 2020, except for 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
Materiality 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 reporting
Definition of a acquisition transaction results in period. As a result, accounting for
business recognition of a group of assets or a acquisitions of hotel companies, in
business. 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 must
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 must account new practical expedient.
Rent Concessions 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.
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 or have entitlements regarding the
returns, and can affect the level of those variable returns through
its decision-making power.
The Interim Financial Statements as of 30 June 2021 comprised a
total of 275 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 8 - -
Incorporation 2 - -
Expansion of business operations 1 - -
Added to group of consolidated companies due to further 5 - -
acquisition of shares
Disposals 10 2 1
Liquidation 2 - -
Sale 3 2 1
Merger 5 - -
Change in ownership stake -** 1 - 1
Balance at 30 Jun 2021 275 18 28
* excl. TUI AG
** Addition 1 / disposal -1
Acquisitions - Divestments
Acquisitions in the period under review
In 9M 2021, companies were acquired for a total consideration of
?10.0m, comprised of deferred purchase price payments worth ?3.4m,
settled purchase price payments worth ?4.9m and cash consideration
worth ?1.7m.
Summary presentation of acquisitions
Name and headquarters of the acquired Business Date of Acquired Consideration
company activity Acquirer acquisition share transferred in ?
% 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 the 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
? 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
financial year 2020 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 ?1. Since then, the investment has been carried as a TUI
Group associate with a carrying amount of ?1. 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 ?1. 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 accounted for using the
equity method. The divestment of the stake generated a loss of
?3.3m, carried in Other expenses.
On 10 May 2021, the stake in the fully consolidated hotel
company Enterprises Hotelières et Touristiques Paladien Lena Mary
S.A. in the Western Region segment was sold for a purchase price of
?6.1m. The divestment generated a gain of ?2.3m, carried in Other
income.
In May 2021, the disposal group Tenuta di Castelfalfi S.p.A. in
the Hotels & Resorts segment was reclassified to assets held
for sale due to the Group's intention to sell the entity. On
occasion of the reclassification, the disposal group was written
down by ?4.0m to its selling price less costs to sell. The
impairment is shown in the cost of sales. On 30 June 2021, the
transaction was completed at a preliminary purchase price less
costs to sell of ?18.3m, generating a preliminary loss on disposal
of ?0.4m, carried in Other expenses.
Condensed balance sheet of divestments
? million MSN 1359 GmbH Tenuta di Castelfalfi S.p.A. (Subgroup)
29 Dec 2020 30 Jun 2021
Assets
Property, plant and equipment and intangible assets 24.5 13.3
Other non-current assets - 0.1
Trade receivables 1.7 0.9
Other current assets - 16.7
Cash and cash equivalents 2.0 0.7
28.2 31.7
Provisions and liabilities
Non-current liabilities 19.3 0.3
Current provisions - 1.0
Trade payables - 3.6
Other current liabilities 5.6 8.1
24.9 13.0
Notes to the unaudited condensed consolidated income statement
of TUI Group
The development of TUI Group's revenue and earnings in the first
nine months of the financial year 2021 was still materially
impacted by the suspension of most 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 the first nine months of the financial year 2021,
consolidated revenue decreased by 79.6% year-on-year to ?1.4bn. 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 30 Jun 2021
Rest of 9M 2021
Spain Other Caribbean, North Africa, Revenues
? million (incl. European Mexico, Africa Ind. Other from Other 9M 2021
Canary destinations USA & & Ocean, countries contracts Total
Islands) Canada Turkey Asia with
customers
Hotels & 61.0 20.2 55.1 6.1 15.0 0.5 157.9 - 157.9
Resorts
Cruises 0.3 2.4 - - - - 2.7 - 2.7
TUI Musement 5.8 14.2 7.5 4.1 5.4 0.5 37.5 - 37.5
Holiday 67.1 36.8 62.6 10.2 20.4 1.0 198.1 - 198.2
experiences
Northern 17.9 124.7 55.8 2.8 12.4 0.5 214.1 1.0 215.1
Region
Central 210.8 288.0 40.9 73.6 87.8 6.3 707.4 0.3 707.7
Region
Western 73.3 96.8 38.6 11.5 1.8 0.1 222.1 0.5 222.6
Region
Markets & 302.0 509.5 135.3 87.9 102.0 6.9 1,143.6 1.8 1,145.5
Airlines
All other 0.6 5.3 0.7 0.1 13.9 1.9 22.5 - 22.3
segments
Total 369.7 551.6 198.6 98.2 136.3 9.8 1,364.2 1.8 1,365.9
External revenue allocated by destinations for the period from 1 Oct 2019 to 30 Jun 2020
Rest of 9M 2020
Spain Other Caribbean, North Africa, Revenues
? million (incl. European Mexico, Africa Ind. Other from Other 9M 2020
Canary destinations USA & & Ocean, countries contracts Total
Islands) Canada Turkey Asia with
customers
Hotels & 117.2 24.3 64.3 17.9 68.3 12.7 304.7 - 304.7
Resorts
Cruises 101.1 129.0 96.6 0.2 60.7 96.0 483.6 - 483.6
TUI Musement 55.9 78.0 47.3 9.7 71.5 31.7 294.1 - 294.2
Holiday 274.2 231.3 208.2 27.8 200.5 140.4 1,082.4 - 1,082.5
experiences
Northern 851.6 278.0 519.9 118.1 381.8 43.4 2,192.8 9.4 2,202.2
Region
Central 697.7 470.9 179.2 392.3 485.5 7.2 2,232.8 11.2 2,244.0
Region
Western 274.5 112.4 282.2 175.8 210.0 24.0 1,078.9 16.7 1,095.5
Region
Markets & 1,823.8 861.3 981.3 686.2 1,077.3 74.6 5,504.5 37.3 5,541.7
Airlines
All other 2.6 23.0 4.9 2.2 40.6 12.9 86.2 - 86.2
segments
Total 2,100.6 1,115.6 1,194.4 716.2 1,318.4 227.9 6,673.1 37.3 6,710.4 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 66.8% to ?2.6bn in 9M
2021.
Government Grants
? million 9M 2021 9M 2020
Cost of Sales 125.2 57.9
Administrative expenses 53.5 28.9
Total 178.7 86.8
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
? million 9M 2021 9M 2020
Staff costs 398.6 500.2
Rental and leasing expenses 11.8 18.2
Depreciation, amortisation and impairment 88.8 75.1
Others 105.1 137.6
Total 604.2 731.1
The cost of sales and administrative expenses include the
following expenses for staff and depreciation/ amortisation:
Staff costs
? million 9M 2021 9M 2020
Wages and salaries 952.9 1,425.2
Social security contributions, pension costs and benefits 222.7 294.3
Total 1,175.6 1,719.5
Depreciation/amortisation/impairment
? million 9M 9M 2020
2021
Depreciation and amortisation of other intangible assets, property, plant and equipment and 659.0 803.6
right-of-use assets
Impairment of other intangible assets, property, plant and equipment and right-of-use assets 77.4 339.8
Total 736.4 1,143.4
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 depreciations and amortisations. ?45.9m
of the impairments losses (9M 2020 ?75.0m) correspond to
right-of-use assets, ?31.3m (9M 2020 ?255.5m) relate to property,
plant and equipment, and ?0.3m (9M 2020 ?9.3m) to other intangible
assets. ?50.0m (9M 2020 ?336.3m) of the impairments charges were
presented within cost of sales. In addition reversals of impairment
losses of ?12.6m were recognized in cost of sales in 9M 2021. 3.
Other income
In 9M 2021 Other income mainly results from the sale of aircraft
assets and the disposal of TUI Group companies. In the prior year,
this item had primarily included income from the sale of TUI Group
companies. 4. Other expenses
In both the current and prior financial years, Other expenses
comprise losses from the sale of TUI Group companies and the
disposal of aircraft assets. 5. Financial income and financial
expenses
The net financial result declined from ?-177.4m in 9M 2020 to
?-331.6m in the 9M 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
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 investments accounted for using the equity
method
Share of result of investments accounted for using the equity method
? million 9M 2021 9M 2020
Hotels & Resorts - 60.5 - 34.8
Cruises - 141.5 - 7.8
TUI Musement - 2.8 2.6
Holiday Experiences - 204.8 - 40.0
Northern Region - 22.5 - 25.7
Central Region 0.8 2.0
Western Region - -
Markets & Airlines - 21.7 - 23.7
All other segments - -
Total - 226.5 - 63.7
The result is determined by holiday cancellations, customer
repatriation costs and hotel closures due to the COVID-19 pandemic.
The previous year's result for cruises included a contribution to
earnings from the 2019/20 winter season. 7. Income taxes
The tax expense generated in the first nine months of the
financial year 2021 is mainly attributable to a future tax rate
increase, from 19% to 25%, in the United Kingdom which affects the
valuation of deferred tax balances, however has no effect on cash
taxes. 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 ?25.4m (9M 2020 ?19.9m profit).
Notes to the unaudited condensed consolidated statement of
financial position of TUI Group 9. Goodwill
Goodwill increased by ?84.5m due to 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
? million 30 Jun 2021 30 Sep 2020
Northern Region 1,230.4 1,162.2
Central Region 501.6 501.7
Western Region 412.2 412.3
Riu 343.1 343.1
Marella Cruises 296.6 279.3
TUI Musement 169.8 170.1
Other 45.3 45.8
Total 2,999.0 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 30 June 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 and based on
external capital market information and considering the
characteristics of the CGUs. 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 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.
Parameters for calculation of the recoverable amount at 30 June 2021
Planning Growth rate EBIT-Margin Sustainable Carrying Recoverable
period in revenues in % in % Growth WACC Level amount in ? amount in ?
years p.a.*** p.a.*** rate** in % million million
in %
Northern 2.25 8.5 2.7 0.5 11.75 3 1,720.2 2,106.7
Region
Central 2.25 12.5 3.0 0.5 11.75 3 218.0 986.1
Region
Western 2.25 3.3 4.2 0.5 11.75 3 311.5 932.7
Region
RIU* 2.25 7.7 32.2 1.0 8.20 3 2,114.9 2,852.7
Marella 2.25 21.0 12.1 1.0 8.96 3 847.5 1,062.2
Cruises*
TUI Musement 2.25 20.3 4.7 1.0 8.62 3 367.6 525.9
15.1 to 8.20 540.6 to
Other 2.25 1.7 to 5.2 15.8 1.0 to 3 633.3 657.6 to 746.1
8.94
* Those are groups of CGUs
** Growth rate of expected net cash inflows
*** Planned growth rate in revenues in % and EBIT-Margin after regeneration of the upcoming business
Parameters 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 ? amount in ?
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 as at 30 June 2021 based
on cash generating units did not result in the recognition of
impairment losses on capitalised goodwill. Neither an increase in
WACC by 100 basis points nor a reduction by 50 basis points in the
growth rate after the detailed planning period would have resulted
in an impairment on capitalised goodwill. The same applies to a
reduction of the disounted free cash flow of 10%. 10. Property,
plant and equipment
Compared to 30 September 2020 property, plant and equipment
declined by ?183.6m to ?3,278.9m. A decline of ?221.8m was caused
by the disposal of property, plant and equipment which is mainly
attributable to aircraft (?99.1m) and advance payments for future
delivery of aircraft (?99.5m) and were partly due to sale and
leaseback transactions. As a result of the lease transactions the
new aircraft are reported as additions to right-of-use assets (for
details please refer to the section 'Right-of-use-assets').
Depreciation and amortisation of ?172.1m led to a further decrease
in property, plant and equipment.
The decline was partly offset by additions of ?191.1m, mainly
attributable to additions in the segment Hotels & Resorts. The
construction of two new hotels and the refurbishment of hotels in
Spain, Jamaica and Zanzibar resulted in additions totalling ?75.8m
in the Riu Group. Furthermore, additions of property, plant and
equipment of ?44.0m were generated by the acquisition of Karisma
(for details please refer to section 'Acquisitions in the period
under review'). Other additions of ?16.1m related to assets under
construction and payments on account in the Cruises segment as well
as additions of ? 12.1m from advance payments for future delivery
of aircraft.
The review of the carrying amounts of property, plant and
equipment performed due to the ongoing travel restrictions resulted
in total impairment charges of ?31.3m, of which ?28.1m were
attributable to property, plant and equipment in the segment Hotels
& Resorts and related to various individual items. The
impairment charges of ?255.5m (of which ?236.6m related to third
quarter) incurred in the first nine months of the previous year
were attributable to ships of Marella Cruises within the segment
Cruises (?119.7m, of which ?101.2m incurred in the third quarter).
In addition, hotel assets totalling ?96.5m in the
Hotels&Resorts segment as well as an aircraft totalling ?24.5m
were impaired. Further impairment losses to various property, plant
and equipment in the prior-year period resulted from restructuring
measures. 11. Right-of-use assets
Right-of-use assets declined by ?133.6m to ?3,094.3m compared to
the end of financial year. Cumulative depreciation/ amortisation
amounted to ?386.4m, while additions totalled ?385.0m, of which
?336.2m were attributable to the delivery of aircraft and aircraft
spare parts. Beside the six aircraft delivered in the first half of
the financial year, a further five aircraft and one engine were
taken into service in the third quarter. Other additions of ?20.7m
relate to Right-of-use assets for hotels.
Furthermore, there were disposals of ?39.8m, of which ?36.5m is
mainly attributable to expiring contracts for aircraft leases.
Modifications and reassessment of existing lease contracts reduced
the Right-of-use assets by ?31.3m. The decline is mainly due to
amendments in the area of hotel capacity contracts.
The review of carrying amounts led to a total impairment of
?45.9m. In the third quarter, a leased office building in All other
segments was impaired by ?22.4m. Further impairment losses mainly
include an amount of ?9.9m (of which ?1.8m relate to the third
quarter) for travel shops in the Northern Region. In addition,
several Right-of-use assets were impaired due to various individual
items. In the first nine months of the previous year, the review of
the carrying amounts led to an impairments of Right-of-use assets
totalling ?75,0m, of which all incurred in the third quarter. This
mainly related to leased hotels in the segment Hotels&Resorts
(?45.7m), to leased travel shops in the Northern and Western region
(?17.5m) and to ship leases in the Cruises segment (?7.9m).
On the other hand, the review of the carrying amounts led to
reversal of impairment losses amounting to ?12.6m, which were
mainly attributable to the segment Hotels & Resorts. In the
first nine months of the previous year, there were no impairment
reversals on right of use assets.
The corresponding liabilities are explained in the section
'Lease Liabilities'. 12. Trade and other receivables
During the first quarter of financial year 2021 TUI sold other
receivables 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
An agreement on the sale of the joint venture RIU Hotels S.A.
was concluded on 27 May 2021. The transaction was completed at 31
July 2021. Accordingly, the carrying amount of the shareholding of
?379.3m, recognised in Hotels & Resorts, was classified as held
for sale. The purchase price initially amounts to ?541.4m. Due to
an earn-out clause, it may increase by an additional ?127.4m,
payable upon RIU Hotels S.A. delivering its operating budgets for
financial years 2022 and 2023. The goal of the transaction is to
decouple growth in hotels from real estate investments in the
context of delivering the asset-right strategy. The transaction is
expected to generate a positive result. The proceeds will be used
to reduce TUI Group's debt.
In addition, an aircraft engine was reclassified to assets held
for sale within the Markets & Airlines segment.
In the course of the current financial year, further assets were
reclassified to assets held for sale and disposal groups as well as
the related liabilities, which resulted in disposals through
divestments made in the first nine months of the current financial
year. All assets and disposal groups classified as held for sale as
at 30 September 2020 and the related liabilities were sold in the
first nine months of financial year 2021. Please refer in
particular to the section 'Divestments'.
Assets held for sale
? million 30 Jun 2021 30 Sep 2020
Aircraft - 42.4
Investments accounted for using the equity method 379.3 13.1
Other assets 12.4 1.7
Total 391.7 57.2 14. Pension provisions and similar obligations
The pension provisions for unfunded plans and plans with
underfunding increased by ?2.3m to ?1,017.3m compared to the end of
the financial year.
The overfunding of funded pension plans reported in other
non-financial assets decreased by ?184.8m to ?178.5m compared to 30
September 2020.
In the third quarter, the Trustees of the UK pension plans
acquired insurance policies providing a reimbursement by insurers
of the payments to be made for parts of the existing obligations.
The insurer did not assume the obligation to fulfill the pension
commitment in this transaction. Accordingly, the insured parts of
the pension plan continue to be recognised in the balance
sheet.
In order to settle the insurance premium, existing assets of the
plan were sold. The difference in the valuation of an insurance
policy compared to the assets sold resulted in a decrease in plan
assets of ?174.2m, which was recognised directly in equity as a
remeasurement effect. 15. Financial liabilities
Non-current financial liabilities rose by ?612.2m to ?4,304.0m
as against 30 September 2020. This increase was primarily
attributable to an increase in liabilities to banks of ?412.1m and
from the placement of a convertible bond in April 2021 with a
carrying amount of ?334,8m for the debt component. These increases
are partially offset by other declines in liabilities from bonds of
?180.5m. This reflects the fact that TUI AG issued a warrant bond
totalling ?150.0m on 1 October 2020 in the framework of the
financing package from the German government, exclusively
subscribed to by the WSF. While the bond component of the warrant
bond is shown under financial liabilities, the warrants are
recognised in equity. Meanwhile, TUI Senior Notes bond issued on 26
October 2016 with a nominal amount of ?300.0m was redeemed early on
23 February 2021.
The main financing instrument is a syndicated revolving credit
facility (RCF) totalling ?4.6bn 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 ?200.0m.
As at 30 June 2021, the amounts drawn under the revolving credit
facilities totalled ?3,188.1m.
As at 30 June 2021, current financial liabilities declined by
?302.4m to ?274.9m from ?577.3m 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 and the placement of the convertible bond in April
2021, please refer to the section "Going Concern Reporting in
accordance with the UK Corporate Governance Code". 16. Lease
liabilities
Compared to 30 September 2020 the lease liabilities decreased by
?92.1m to ?3,307.8m. This decrease was due to repayments of
?554.8m. Furthermore, modifications and reassessments of existing
lease contracts reduced the lease liabilities by ?52.8m. This
decline is mainly due to contract amendments in the area of hotel
and hotel capacity contracts. Offsetting effects were caused by the
addition of new lease contracts of ?409.9m mainly relating to new
aircraft, and to interest charges of ?112.7m. 17. Other financial
liabilities
The other financial liabilities include touristic advance
payments received for tours canceled because of COVID-19
restrictions of ?222.2m (as at 30 September 2020 ?351.0m), 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. As at 30 June 2021 the touristic
advance payments received include ?70.7m (as at 30 September 2020
?184.8m) of advance payments for cancelled trips for which
customers have received voucher/refund credits which may have to be
refunded after a certain period of time. 19. Changes in equity
Overall, equity decreased by ?742.8m to ?-524.7m when compared
to 30 September 2020.
In January 2021 TUI AG carried out a recapitalisation.
In connection with this recapitalisation, TUI Group's subscribed
capital was reduced first. On a constant number of ?590.4m shares
the nominal value per share of 2.56 ? was reduced to 1.00 ?. In
effect the subscribed capital was reduced by ?919.0m. Subsequently
a capital increase by cash contributions was carried out which led
to an increase in subscribed capital in the amount of the nominal
value of 1.00 ? per share, i.e. an increase of the subscribed
capital of ?509.0m.
The above-named reduction of subscribed capital increased the
capital reserve by ?919.0m. Furthermore the capital reserve was
increased by the share premium of the capital increase of ?58.8m.
The expenses of capital procurement incurred for the capital
increase and the silent participation were offset against capital
reserves in the amount of ?31.0m. Furthermore in October 2020 a
corporate bond with option rights was issued to WSF. The value of
option rights increased the capital reserve by ?34.5m.
In addition, an unsecured, unsubordinated convertible bond in
the amount of ?400,0m was issued in the third quarter of the
financial year 2021. The value of the conversion rights from this
bond increased the capital reserve by ?62.5m. Ancillary costs of
issuing the convertible bond in the amount of ?1.3m were offset
against the capital reserve.
In the first nine months 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 ?420.0m was fully paid. It is
convertible at any time, in whole or in part, into shares in TUI AG
at a conversion price of ?1.00, 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. It amounts to ?671.0m and was fully paid in.
In the first nine months of the financial year 2021, TUI AG paid
no dividend (previous year ?318.1m).
TUI Group's loss in the first nine months of the financial year
2021 is attributable to the COVID-19 crisis.
The proportion of gains and losses from hedging instruments for
effective hedging of future cash flows includes an amount of ?92.9m
(pre-tax) carried under other comprehensive income in equity
outside profit and loss (previous year ?-277.6m).
The revaluation of pension obligations is also recognised in
under other comprehensive income directly in equity without effect
on profit and loss. 20. Financial instruments
Carrying amounts and fair values according to classes and measurement categories according to IFRS 9 as at 30 Jun 2021
Category according to IFRS 9
At Fair value with no Fair value with no Fair value Fair value
? 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 672.2 672.2 - - - 671.6
within the scope
of IFRS 9
thereof
instruments 10.7 - - - - 10.8
within the scope
of IFRS 16
Derivative
financial
instruments
Hedging 1.0 - - 1.0 - 1.0
transactions
Other derivative
financial 51.3 - - - 51.3 51.3
instruments
Other financial 21.8 13.6 6.1 - 2.1 21.8
assets
Cash and cash 1,524.4 1,524.4 - - - 1,524.4
equivalents
Liabilities
Financial 4,578.9 4,578.9 - - - 4,581.7
liabilities
Trade payables 1,316.3 1,316.3 - - - 1,316.3
Derivative
financial
instruments
Hedging 6.7 - - 6.7 - 6.7
transactions
Other derivative
financial 35.1 - - - 35.1 35.1
instruments
Other financial 331.5 331.5 - - - 331.5
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
? 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 25.5
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 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 current receivables,
other financial assets, current trade payables and other financial
liabilities, 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 ?-28.3m from fuel price hedges
and ?-9.1m from foreign currency hedges were made as at 30 June
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 30 June 2021, the fair value of these
reclassified fuel price hedges totalled ?5.6m at a nominal volume
of ?35.0m, while the fair value of the reclassified foreign
currency hedges totalled ?-1.7m at a nominal volume of ?343.5m.
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 fuel and
foreign currency hedges are taken to the cost of sales, whilst
interest rate hedges are recognised in the financial result, 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 30 June 2021, the fair
value of these reclassified fuel price hedges totalled ?29.2m at a
nominal value of ?277.5m, while the fair value of the interest rate
hedges amounted to ?-12.0m at a nominal volume of ?443.0m and the
fair value of foreign currency hedges totalled ?-5.4m at a nominal
volume of ?196.3m.
Aggregation according to measurement categories under IFRS 9 as at 30 Jun 2021
? million Carrying amount of financial instruments Fair Value
Total
Financial assets
at amortised cost 2,210.2 2,209.6
at fair value - recognised directly in equity without recycling 6.1 6.1
at fair value - through profit and loss 53.4 53.4
Financial liabilities
at amortised cost 6,226.7 6,229.5
at fair value - through profit and loss 35.1 35.1
Aggregation according to measurement categories under IFRS 9 as at 30 Sep 2020
? 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 30 Jun 2021
Fair value hierarchy
? million Total Level 1 Level 2 Level 3
Assets
Other financial assets 8.2 - - 8.2
Derivative financial instruments
Hedging transactions 1.0 - 1.0 -
Other derivative financial instruments 51.3 - 51.3 -
Liabilities
Derivative financial instruments
Hedging transactions 6.7 - 6.7 -
Other derivative financial instruments 35.1 - 35.1 -
Hierarchy of financial instruments measured at fair value as of 30 Sep 2020
Fair value hierarchy
? 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, debt
components of warrant and convertible bonds, liabilities to banks,
promissory
notes and other non-current financial liabilities as well as for
current other receivables, current financial
liabilities and non-current trade and other receivables, 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
? 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 - 2.4
recognised through profit and loss - 2.1
recognised in other comprehensive income - 0.3
Balance as at 30 Jun 2021 8.2
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 30 June 2021, contingent liabilities amounted to ?142.5m
(previous year ?165.6m). 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
? million 30 Jun 2021 30 Sep 2020
Order commitments in respect of capital expenditure 2,370.3 2,549.0
Other financial commitments 110.3 212.7
Total 2,480.6 2,761.7
As at 30 June 2021 order commitment in respect of capital
expenditure declined by ?178.7m 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.
For the nine months period ended 30 June 2021, cash and cash
equivalents rose by ?291.3m to ?1,524.4m.
For the 9 months period ended 30 June 2021, the cash outflow
from operating activities totalled ?1,089.4m (9M 2020 cash outflow
of ?1,959.0m). The cash outflow from operating activities included
interest inflow of ?3.8m (9M 2020 ?23.0m) and dividends of ?13.4m
(9M 2020 ?7.6m). Income tax payments resulted in a cash outflow of
?4.3m (9M 2020 cash inflow of ?59.0m).
The cash inflow from investing activities totals ?125.4m (9M
2020 ?-39.9m). It comprises payments for investments in property,
plant and equipment and intangible assets of ?220.8m. TUI Group
recorded a cash inflow of ?294.6m from the sale of property, plant
and equipment and intangible assets. It also includes a cash inflow
of ?32.9m from the sale of Hapag-Lloyd Cruises which was completed
in the previous year and ?19.6m from the repayment of loans in
connection with the sale of the shares in Togebi Holdings Limited
(TUI Russia). In the third quarter, the group received further
?22.0m from the sale of consolidated companies and joint ventures.
An outflow of ?21.0m was made for a capital increase for TUI
Cruises GmbH.
The cash inflow from financing activities totalled ?1,228.3m (9M
2020 cash inflow of ?2,303.9m). TUI AG received ?1,723.5m from
various equity measures after deducting capital procurement costs,
thereof ?234.0m in the third quarter. ?0.5m was used to purchase
shares transferred to TUI Group employees in the framework of the
oneShare employee share plan. TUI AG received ?446.1m from taking
out loans and bonds after deducting capital procurement costs.
Other TUI Group companies took out loans worth ?265.6m. The
repayment of financial liabilities resulted in a cash outflow of
?906.7m, including an amount of ?300.0m for early repayment of TUI
AG senior bonds and an amount of ?454.0m for lease liabilities. A
cash outflow of ?299.6m related to interest payments.
Cash and cash equivalents also increased by ?27.0m (9M 2020
?-9.1m) due to changes in exchange rates.
As at 30 June 2021, cash and cash equivalents worth ?539.9m were
subject to restrictions (as at 30 September 2020 ?324.0m).
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 ?55.3m 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 ?116.5m (as at 30 September ?116.5m) 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 ?368.1m (as at 30 September ?155.4m) 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 30 Jun 2021
? million External Group 9M 2021 Total
Hotels & Resorts 157.9 124.3 282.2
Cruises 2.7 - 2.7
TUI Musement 37.5 13.7 51.2
Consolidation - - 1.4 - 1.4
Holiday Experiences 198.2 136.5 334.7
Northern Region 215.1 202.7 417.8
Central Region 707.7 62.2 769.9
Western Region 222.6 97.1 319.7
Consolidation - - 359.5 - 359.5
Markets & Airlines 1,145.5 2.4 1,147.9
All other segments 22.3 3.6 25.9
Consolidation - - 142.6 - 142.6
Total 1,365.9 - 1,365.9
Revenue by segment for the period from 1 Oct 2019 to 30 Jun 2020
? million External Group 9M 2020 Total
Hotels & Resorts 304.7 286.5 591.2
Cruises 483.6 - 483.6
TUI Musement 294.2 124.1 418.3
Consolidation - - 3.4 - 3.4
Holiday Experiences 1,082.5 407.2 1,489.7
Northern Region 2,202.2 207.2 2,409.4
Central Region 2,244.0 97.0 2,341.0
Western Region 1,095.5 118.4 1,213.9
Consolidation - - 412.3 - 412.3
Markets & Airlines 5,541.7 10.3 5,552.0
All other segments 86.2 4.7 90.9
Consolidation - - 422.2 - 422.2
Total 6,710.4 - 6,710.4
The segment data shown are based on regular internal reporting
to the Executive Board. From FY 2020, the internationally more
commonly used earnings measure "underlying EBIT" is used for
value-based management. In FY 2020, 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 goodwill impairments would be adjusted in the reconciliation to
underlying EBIT.
In 9M 2021, underlying EBIT includes results of investments
accounted for using the equity method of ?-226.5m (9M 2020
?-63.7m), primarily generated within the sector Holiday
Experiences.
Underlying EBIT by segment
9M 2021 9M 2020
? million
Hotels & Resorts - 268.6 - 308.0
Cruises - 234.6 - 197.3
TUI Musement - 96.7 - 66.5
Holiday Experiences - 599.9 - 571.9
Northern Region - 708.1 - 592.4
Central Region - 377.4 - 398.7
Western Region - 247.3 - 285.9
Markets & Airlines - 1,332.8 - 1,277.0
All other segments - 45.9 - 118.0
Total - 1,978.6 - 1,966.9
Impairment on other intangible assets, property, plant and equipment and right of use assets
? million 9M 2021 9M 2020
Hotels & Resorts 29.7 149.2
Cruises - 127.6
TUI Musement - 2.6
Holiday Experiences 29.7 279.4
Northern Region 20.3 26.8
Central Region 3.3 7.0
Western Region - 26.6
Markets & Airlines 23.6 60.4
All other segments 24.1 -
Total 77.4 339.8
For further details regarding the impairments effected in 9M
2021, please refer to the section 'Property, plant and equipment'
and 'Right of use assets'.
Reconciliation to underlying EBIT of TUI Group
? million 9M 2021 9M 2020
Earnings before income taxes - 2,390.7 - 2,367.7
plus: Net interest expense (excluding expense / income from measurement of interest hedges) 336.7 173.6
plus / less: Expense (income) from measurement of interest hedges 7.4 - 7.9
EBIT - 2,046.6 - 2,202.0
Adjustments:
plus: Separately disclosed items 43.5 194.9
plus: Expense from purchase price allocation 24.4 40.2
Underlying EBIT - 1,978.6 - 1,966.9
Net expenses for the separately disclosed items of ?43.5m in the
first nine months of financial year 2021 include income of ?53m
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 ?89m
were incurred in TUI Musement (?11m), Northern Region (?12m),
Central Region (?8m), Western Region (?18m) and All other segments
(?40m). Furthermore, disposal results from the sale of an
investment in an aircraft asset company in Northern Region (-?2m)
and Central Region (-?1m), the sale of two hotel companies in
Hotels & Resorts (-?5m) and in Western Region (?2m) as well as
an expense from a subsequent purchase price adjustment of ?2m in
All other segments were adjusted.
Net expenses for the separately disclosed items of ?195m in the
first nine months of the previous year included a disposal gain of
?90m from the sale of the German specialist tour operators, offset
by restructuring expenses of ?209m, related in particular to the
planned capacity reduction at TUI fly Deutschland, a restructuring
of TUI France, an expansion of the existing restructuring programme
at TUI Deutschland, the planned closure of 166 travel agencies in
the UK, restructuring of the TUI Musement segment and the closure
of TUI Italy as well as other one-off items of ?8m. Furthermore,
?68m impairments of goodwill related to the Northern Hotels and TUI
Blue hotel companies was adjusted for.
Expenses for purchase price allocations of ?24.4m (previous year
?40.2m) 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 30 June 2021, Unifirm Limited, Cyprus, held 32.0% 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% in H1 2021. 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 6 July 2021, TUI AG increased its convertible bond of ?400m,
which was issued in April 2021, by ?189.6m. The new bonds form a
single series with the existing bonds. The terms remain unchanged.
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 ?100,000. The initial conversion price
was set at an amount of ?5.3631 per share.
On 27 July 2021 TUI AG agreed with the private banks and KfW to
extend the maturity of ?4.7bn of the revolving credit facilities
until July 2024. For further details please refer to the going
concern reporting.
On 31 July 2021 the disposal of the joint venture RIU Hotels
S.A. was completed. For further details please refer to the section
'Assets held for sale'.
Responsibility statement
To the best of our knowledge, and in accordance with the
applicable reporting principles for interim 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, 11 August 2021
Friedrich Joussen
David Burling
Sebastian Ebel
Peter Krueger
Sybille Reiß
Frank Rosenberger
Review Report
To TUI AG, Berlin/Germany and Hanover/Germany
We have reviewed the condensed interim consolidated financial
statements - comprising the income statement, the statement of
comprehensive income, the statement of financial position, the
statement of changes in equity, the statement of cash flows as well
as selected explanatory notes to the consolidated financial
statements - and the interim Group management report for the period
from 1 October 2020 until 30 June 2021 of TUI AG, Berlin and
Hanover, which are components of the financial report pursuant to §
115 sec. 7 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.
Hanover/Germany, 11 August 2021
Deloitte GmbH
Wirtschaftsprüfungsgesellschaft
Christoph B. Schenk Dr. Hendrik Nardmann
German Public Auditor German Public Auditor
Cautionary statement regarding forward-looking statements
The present Interim 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.
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 Interim Report, the presentation slides and the video
webcast for 9M FY 2021 (published on 12 August 2021) are available
at the following link:
www.tuigroup.com/en-en/investors
-----------------------------------------------------------------------------------------------------------------------
ISIN: DE000TUAG000
Category Code: QRT
TIDM: TUI
LEI Code: 529900SL2WSPV293B552
OAM Categories: 3.1. Additional regulated information required to be disclosed under the laws of a Member State
3.1. Additional regulated information required to be disclosed under the laws of a Member State
Sequence No.: 119775
EQS News ID: 1225835
End of Announcement EQS News Service
-------------------------------------------------------------------------------------
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