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MarketScreener Homepage  >  Equities  >  Xetra  >  TUI    TUI1   DE000TUAG000

TUI

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TUI AG: Half Year Results 2019

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05/15/2019 | 02:05am EDT

TUI AG (TUI)
TUI AG: Half Year Results 2019

15-May-2019 / 08:00 CET/CEST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.


H1 2019

TUI Group - financial highlights

 

EUR million

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. % 

Var. % 
at constant 
currency

Turnover

3,101.4

3,145.2

- 1.4

6,676.4

6,565.9

+ 1.7

+ 1.7

Underlying EBITA1

 

 

 

 

 

 

 

Hotels & Resorts

66.7

80.4

- 17.0

135.4

172.3

- 21.4

- 28.0

Cruises

59.4

56.0

+ 6.1

106.4

93.7

+ 13.6

+ 13.4

Destination Experiences

- 5.6

- 9.9

+ 43.4

- 10.4

- 13.3

+ 21.8

+ 22.6

Holiday Experiences

120.5

126.5

- 4.7

231.4

252.7

- 8.4

- 12.9

Northern Region

- 130.8

- 88.3

- 48.1

- 205.1

- 125.7

- 63.2

- 62.5

Central Region

- 90.7

- 89.9

- 0.9

- 127.8

- 144.7

+ 11.7

+ 11.7

Western Region

- 97.3

- 56.5

- 72.2

- 163.9

- 105.1

- 55.9

- 55.9

Markets & Airlines

- 318.8

- 234.7

- 35.8

- 496.8

- 375.5

- 32.3

- 32.1

All other segments

- 18.7

- 24.8

+ 24.6

- 35.2

- 46.9

+ 24.9

+ 20.0

TUI Group

- 217.0

- 133.0

- 63.2

- 300.6

- 169.7

- 77.1

- 84.7


EBITA2

- 240.1

- 146.5

- 63.9

- 345.9

- 203.4

- 70.1

 


Underlying EBITDA3

- 104.3

- 32.1

- 224.9

- 77.5

25.4

n. a.

 


EBITDA3

- 118.7

- 39.5

- 200.5

- 106.7

4.1

n. a.

 


EBITDAR4

48.1

120.5

- 60.1

237.7

334.9

- 29.0

 


Net loss for the period

- 175.1

- 142.3

- 23.0

- 287.2

- 210.6

- 36.4

 

Earnings per shareEUR

- 0.34

- 0.29

- 17.2

- 0.58

- 0.48

- 20.8

 

Net capex and investments

356.7

66.5

+ 436.4

651.5

207.3

+ 214.3

 

Equity ratio5 (31 March) %

 

 

 

21.2

20.1

+ 1.1

 

Net debt position (31 March)

 

 

 

- 1,964.1

- 576.0

- 241.0

 

Employees (31 March)

 

 

 

60,135

55,773

+ 7.8

 

Differences may occur due to rounding.

This Half Year Financial Report of the TUI Group was prepared for the reporting period H1 2019 from 1 October 2018 to 31 March 2019.

The TUI Group applied IFRS 15 and IFRS 9 retrospectively from 1 October 2018. In contrast to IFRS 15, IFRS 9 was introduced without restating the previous year's figures.

In Q1 2019, the Italian tour operators were transferred from All other segments to the Central Region. In addition, the Crystal Ski companies, which provide services in the destinations, were reclassified from Northern Region to Destination Experiences. Prior-year figures were adjusted accordingly.

1 In order to explain and evaluate the operating performance by the segments, EBITA adjusted for one-off effects (underlying EBITA) is presented. Underlying EBITA has been adjusted for gains / losses on disposal of investments, restructuring costs according to IAS 37, ancillary acquisition costs and conditional purchase price payments under purchase price allocations and other expenses for and income from one-off items. Please also refer to page 15 for further details.

2 EBITA comprises earnings before interest, income taxes and goodwill impairment. EBITA includes amortisation of other intangible assets. EBITA does not include ­measurement effects from interest hedges.

3 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. The amounts of amortisation and depreciation represent the net balance including write-backs. ­Underlying EBITDA has been adjusted for gains / losses on disposal of investments, restructuring costs according to IAS 37, ancillary acquisition costs and conditional purchase price payments under purchase price allocations and other expenses for and income from one-off items.

4 For the reconciliation from EBITDA to the indicator EBITDAR, long-term leasing and rental expenses are eliminated.

5 Equity divided by balance sheet total in %, variance is given in percentage points.

Interim Management Report

H1 Summary

The increase in the H1 seasonal underlying EBITA loss to EUR 301 m (H1 2018: EUR 170 m loss) reflects the ongoing weak demand environment in Markets & Airlines. Holiday Experiences continues 
to perform well (reflecting the non-repeat of prior year disposal gains in Riu), benefitting from the integrated model and our investments in differentiated content.

H1 results at a glance

EUR million

H1

Underlying EBITA H1 FY18 (originally reported)

- 159

IFRS 15 impact

- 11

Underlying EBITA H1 FY18 (adjusted)

- 170

Holiday Experiences

+ 5

Markets & Airlines

- 142

All other segments

+ 10

Special items

 

Prior year: Riu gains on disposal (Hotels & Resorts)

- 38

Prior year: Niki bankruptcy impact (Central Region)

+ 20

Q1 FY19: Northern Region hedging gain

+ 29

Q2 FY19: 737 MAX grounding

- 5

Q2 FY19: Easter timing

- 22

Underlying EBITA H1 FY19 at constant currency

- 313

Foreign exchange translation

+ 12

Underlying EBITA H1 FY19

- 301

For further detailed commentary, please see Segmental Performance (pages 7 to 11).

As expected, the decline in Markets & Airlines' H1 result reflects the knock-on impact of the summer 2018 heatwave, overcapacities in Spain arising from the shift in demand to Eastern Mediterranean, continued Brexit uncertainty, as well as particularly strong comparatives for Nordics in H1 last year. In addition, the result includes the initial impact from the 737 MAX grounding, which commenced in mid-March, and the later timing of Easter this year.

Our strong market positions in Markets & Airlines are an important factor in the success of our integrated model, with a strong customer base and leading market shares. This is what helps to drive the high return on our investments in Holiday Experiences. We remain focussed on delivering the benefits of efficiency and digitalisation across the Group.

In Holiday Experiences, our Hotels & Resorts (reflecting the non-repeat of prior year disposal gains in Riu), Cruises and Destination Experiences segments continue to perform well. This is due to the investment we have made in recent years to expand our differentiated content, and thanks to our integrated model, which drives occupancies, rate and yields in our hotels and cruise ships.

Hotels & Resorts delivered a resilient performance in H1. The result reflects the non-repeat of prior year disposal gains, as well as the continued shift of demand from Spain to Turkey. As Turkey is primarily a Summer destination, and given that we have additional lease commitments in H1 2019 in order to secure additional capacity in that destination, the benefit to the Turkish hotels' result will be H2 weighted. Cruises continues to deliver a strong performance, taking into account additional dry dock and launch costs in H1.

Net debt as at 31 March 2019 was EUR 1,964 m (H1 2018: EUR 576 m). As expected, net debt is returning to the normal seasonal pattern, as we complete reinvestment of disposal proceeds received in recent years. It also reflects the planned ongoing financing of our aircraft order book, with more aircraft being brought into ownership and under finance leases.

Based on our building blocks for H2 growth, we therefore reiterate our updated FY19 underlying EBITA guidance as per our ad hoc announcement of 29 March 2019 of approximately - 17 % (assuming 737 MAX flight resumption mid-July) up to approximately - 26 % (assuming measures taken in relation to the grounding are extended to end of Summer 2019), compared with underlying EBITA rebased in FY18 of EUR 1,177 m1. Please refer to page 5 for further detail on the 737 MAX grounding. We believe that TUI's unique integrated model delivers high returns, and our strategic initiatives provide strong strategic positioning for future growth.

1 Based on constant currency: FY19 comparative rebased in December 2018 to EUR 1,187 m to take into account EUR 40 m impact for revaluation of Euro loan balance within Turkish Lira entities in FY18, and adjusted further to EUR 1,177 m for retrospective application of IFRS 15

Outlook and expected development

Holiday Experiences

Despite the pressures faced by Markets & Airlines, Holiday Experiences continues to perform well taking into account the Riu gains on disposals in Hotels & Resorts in the previous year. This is due to the investment we have made in recent years to expand our differentiated content and our integrated model (in order to drive occupancies, rates and yields in our hotels and cruise ships).

We have opened 58 own hotels since the merger, with a pipeline of further openings to come. In terms of destinations, we have seen demand continue to shift from Western Mediterranean back to the Eastern Mediterranean and North Africa. In addition, demand for Mexico from US customers has softened, as a result of border tensions and safety concerns. Our portfolio of destinations, unique brands and strong distribution capability leave us well positioned to continue to deliver sector-­leading returns in Hotels & Resorts.

In Cruises, we have launched three ships this year (new Mein Schiff 2, Marella Explorer 2, and in May Hanseatic nature) and continue to see good demand for these and the rest of our fleet. Load factor and yield performance remain in line with our expectations. In Destination Experiences, we are on track to deliver the integration of our prior year acquisitions, with continued growth in sales of excursions and activities.

Markets & Airlines

In Markets & Airlines, the weak demand environment persists as outlined in our Quarterly Statement Q1 2019, resulting in significant yield and margin pressure. This is driven by a number of factors - reduced demand due to last year's extraordinary hot summer, slowdown of consumer confidence, Brexit uncertainty, shift in demand to the Eastern Mediterranean coupled with overcapacity of flights to Spain, as well as the 737 MAX grounding.

For Summer 2019, 59 % of the total programme has been sold compared with 62 % at this time last year. Bookings are down 3 %, with average selling price up 1 % against strong comparatives1. The competitive pricing environment means that this average selling price increase is not at a sufficient level to cover cost inflation. All markets are trading on lower margins then prior year, given the weaker demand environment and oversupply to some destinations such as Spain. We have taken a disciplined approach to capacity, which is flat compared with prior year, at the same time enabling us to protect our strong market leading positions.

1 These statistics are up to 5 May 2019, shown on a constant currency basis, and relate to all customers whether risk or non-risk

Four strategic initiatives

We believe that TUI's unique integrated model delivers superior returns, and our strategic initiatives provide strong strategic positioning for future growth.

  • Grow Hotel & Cruise business with vertical integration to drive premium returns;
  • Protect and where possible extend strong positions in Markets & Airlines through revenue and cost base initiatives. These are focussed on digitalisation, mass-individualisation and upselling; airline efficiency; procurement; increased mobile distribution; and efficiency and standardisation of processes.
  • Add scale for own holiday experiences and expand into new markets, with our new GDN-OTA (Global Distribution Network-­Online Travel Agent) platform; and
  • Add scale in destination experience markets with our new tours and activities platform.

Expected Development

We have clear building blocks to deliver growth in H2. In Holiday Experiences we will deliver growth from our investments in hotels, cruises and destination experiences, with the annualisation of investment benefits from last year, plus new hotel openings and ship launches this year. In addition, we expect further recovery in demand for Turkey and North Africa, and the timing benefit of the later Easter. As previously flagged, these benefits will be offset by the one-off costs relating to the 737 MAX grounding, of around EUR 200 m (assuming grounding until mid-July) up to around EUR 300 m (assuming grounding until end of Summer). Please refer to page 5 for further detail on the 737 MAX grounding.

TUI has strong strategic positioning for future growth, underpinned by our unique integrated model and strategic initiatives. The lifting of the 737 MAX grounding and a cyclical recovery in Markets & Airlines, would support growth beyond FY19, which will be further enhanced by revenue opportunities and cost base improvements. Additional growth will be delivered by growth investments in hotels and cruise ships, based on normalised run-rate net capex and investments (estimated to be around 3.5 % of turnover) and ring-fenced investments by joint ventures, as well as our scalable GDN-OTA and destination experiences platforms.

Report on changes in expected development

On 29 March 2019, we informed the markets via an ad hoc announcement that, following the grounding of the 737 MAX aircraft, TUI has made arrangements in order to guarantee customers' holidays. The Group is utilising spare aircraft of its fleet, extending expiring leases for aircraft that were supposed to be replaced by 737 MAX aircraft, as well as leasing in additional aircraft. TUI's fleet, which comprises around 150 aircraft, currently includes 15 grounded 737 MAX for the UK, Belgium, the Netherlands and Sweden. A further eight 737 MAX are scheduled for delivery after the lifting of the grounding.

Assuming 737 MAX flight resumption latest by mid-July, the Group currently expects to see a one-off impact on underlying EBITA of approximately EUR 200 m in connection with the 737 MAX grounding. This impact is especially attributable to costs related to the replacement of aircraft, higher fuel costs, other disruption costs, and the anticipated impact on trading. As a result of this one-off impact, the Executive Board of TUI AG has updated the guidance and now expects an underlying EBITA for FY19 of approximately minus 17 % compared with FY18 of EUR 1,177 m rebased1.

As stated in the ad hoc announcement of 29 March 2019, the Executive Board of TUI AG expects a further negative one-off effect if it does not become sufficiently certain in the course of May that flying the 737 MAX will resume by mid-July. TUI will then need to fully extend the measures until the end of the summer season. TUI confirms the expectation disclosed in the ad hoc notification of 29 March 2019 for this additional one-of impact until 30 September 2019 of up to EUR 100 m. For this scenario, the Executive Board of TUI AG had also updated the guidance on underlying EBITAfor FY19 to up to minus 26 % compared with FY18 of EUR 1,177 m rebased1.

Due to the application of IFRS 15, turnover for FY18 has been adjusted to EUR 18.5 bn. Our guidance of around 3 % turnover growth in FY19 2 remains unchanged.

1 Based on constant currency: FY19 comparative rebased in December 2018 to EUR 1,187 m to take into account EUR 40 m impact for revaluation of Euro loan balance within Turkish Lira entities in FY18, and adjusted further to EUR 1,177 m for retrospective application of IFRS 15

2 Based on constant currency: Based on constant currency; prior year comparatives presented in accordance with IFRS 15

Structure and strategy of TUI Group

Reporting structure

The present Half Year Financial Report 2019 is essentially based on TUI Group's reporting structure set out in the Annual Report for 2018.

See Annual Report 2018 from page 32

In Q1 2019, the Italian tour operators were transferred from All other segments to the Central Region. In addition, the Crystal Ski companies, which provide services in the destinations, were reclassified from Northern Region to Destination Experiences. Prior-year figures were adjusted accordingly.

Group targets and strategy

TUI Group's strategy set out in the Annual Report 2018 remains unchanged.

Details see Annual Report 2018 from page 28

Consolidated earnings

Turnover

EUR million

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Hotels & Resorts

131.7

143.1

- 8.0

271.0

287.9

- 5.9

Cruises

234.1

205.6

+ 13.9

424.6

396.9

+ 7.0

Destination Experiences

144.5

26.3

+ 449.4

302.8

65.6

+ 361.6

Holiday Experiences

510.3

375.0

+ 36.1

998.4

750.4

+ 33.0

Northern Region

1,023.0

1,098.0

- 6.8

2,123.3

2,226.6

- 4.6

Central Region

934.4

1,002.0

- 6.7

2,224.7

2,235.6

- 0.5

Western Region

513.9

518.9

- 1.0

1,057.1

1,064.6

- 0.7

Markets & Airlines

2,471.3

2,618.9

- 5.6

5,405.1

5,526.8

- 2.2

All other segments

119.8

151.3

- 20.8

272.9

288.7

- 5.5

TUI Group

3,101.4

3,145.2

- 1.4

6,676.4

6,565.9

+ 1.7

TUI Group at constant currency

3,092.1

3,145.2

- 1.7

6,677.9

6,565.9

+ 1.7

 

Underlying EBITA


EUR million

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Hotels & Resorts

66.7

80.4

- 17.0

135.4

172.3

- 21.4

Cruises

59.4

56.0

+ 6.1

106.4

93.7

+ 13.6

Destination Experiences

- 5.6

- 9.9

+ 43.4

- 10.4

- 13.3

+ 21.8

Holiday Experiences

120.5

126.5

- 4.7

231.4

252.7

- 8.4

Northern Region

- 130.8

- 88.3

- 48.1

- 205.1

- 125.7

- 63.2

Central Region

- 90.7

- 89.9

- 0.9

- 127.8

- 144.7

+ 11.7

Western Region

- 97.3

- 56.5

- 72.2

- 163.9

- 105.1

- 55.9

Markets & Airlines

- 318.8

- 234.7

- 35.8

- 496.8

- 375.5

- 32.3

All other segments

- 18.7

- 24.8

+ 24.6

- 35.2

- 46.9

+ 24.9

TUI Group

- 217.0

- 133.0

- 63.2

- 300.6

- 169.7

- 77.1

TUI Group at constant currency

- 229.4

- 133.0

- 72.5

- 313.4

- 169.7

- 84.7

 

EBITA


EUR million

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Hotels & Resorts

66.7

80.3

- 16.9

135.4

172.2

- 21.4

Cruises

59.4

56.0

+ 6.1

106.4

93.7

+ 13.6

Destination Experiences

- 9.6

- 10.1

+ 5.0

- 18.5

- 13.9

- 33.1

Holiday Experiences

116.5

126.2

- 7.7

223.3

252.0

- 11.4

Northern Region

- 136.7

- 92.7

- 47.5

- 227.7

- 134.4

- 69.4

Central Region

- 92.3

- 92.5

+ 0.2

- 131.3

- 151.0

+ 13.0

Western Region

- 101.6

- 59.7

- 70.2

- 170.0

- 118.2

- 43.8

Markets & Airlines

- 330.6

- 244.9

- 35.0

- 529.0

- 403.6

- 31.1

All other segments

- 26.0

- 27.8

+ 6.5

- 40.2

- 51.8

+ 22.4

TUI Group

- 240.1

- 146.5

- 63.9

- 345.9

- 203.4

- 70.1

Segmental performance

Holiday Experiences

Holiday Experiences

EUR million

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Turnover

510.3

375.0

+ 36.1

998.4

750.4

+ 33.0

Underlying EBITA

120.5

126.5

- 4.7

231.4

252.7

- 8.4

Underlying EBITA at constant currency

109.1

126.5

- 13.8

220.0

252.7

- 12.9

 

Hotels & Resorts

 

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Total turnoverin EUR million

277.8

267.9

+ 3.7

591.3

563.3

+ 5.0

Turnoverin EUR million

131.7

143.1

- 8.0

271.0

287.9

- 5.9

Underlying EBITAin EUR million

66.7

80.4

- 17.0

135.4

172.3

- 21.4

Underlying EBITA at constant 
currency ratesin EUR million

55.8

80.4

- 30.6

124.0

172.3

- 28.0

Capacity hotels total1in '000

7,632

7,322

+ 4.2

16,767

16,192

+ 3.5

Riu

4,187

4,038

+ 3.7

8,601

8,433

+ 2.0

Robinson

607

556

+ 9.2

1,284

1,247

+ 3.0

Blue Diamond

1,072

958

+ 11.9

2,020

1,767

+ 14.3

Occupancy rate hotels total2in %
variance in % points

79

80

- 1

77

77

-

Riu

86

88

- 2

84

87

- 3

Robinson

64

62

+ 2

68

63

+ 5

Blue Diamond

83

80

+ 3

78

79

- 1

Average revenue per bed 
hotels total3, 4in EUR

80

76

+ 4.5

72

69

+ 3.5

Riu

72

72

-

69

68

+ 0.6

Robinson

105

105

-

96

97

- 1.4

Blue Diamond

139

131

+ 6.5

127

120

+ 6.6

Turnover measures include fully consolidated companies, all other KPIs incl. companies measured at equity. In total turnover no turnover is carried for Blue Diamond as the joint venture is consolidated 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


4 Previous year revenue per bed restated to reflect revised PY rate at Blue Diamond

  • Hotels & Resorts underlying EBITA for H1 decreased by EUR 37 m, reflecting the non-repeat of prior year disposal gains in Riu totalling EUR 38 m. Occupancy remained high, at 77 %. Average revenue per bed increased by 4 %, reflecting foreign exchange translation (mainly due to strengthening of the US dollar).
  • In Riu, underlying EBITA decreased compared with prior year, due to the non-repeat of disposal gains and driven by the continued shift of demand from Western to Eastern Mediterranean. In addition, demand from US customers for Mexico was softer, as a result of border tensions and safety concerns. Although lower than prior year, occupancy remains strong at 84 %. Average rate increased by 1 %, reflecting foreign exchange translation.
  • The result for Robinson was slightly below prior year as the result of a club closure for renovation during Q1, and seasonal losses of newly opened clubs. H1 occupancy grew by 5 % points to 68 %, driven by increased demand for clubs in Turkey and North Africa, as well as the build-up of demand for new clubs which opened last year.
  • Blue Diamond delivered an increase in underlying EBITA as a result of new hotel openings. The increase in average rate is due to foreign exchange translation.
  • Although demand for our Turkish hotels continues to improve, this is not so apparent from the H1 (especially Q2) result due to the Summer weighted seasonality of these resorts, and due to the additional lease commitments taken in order to secure additional capacity. We therefore expect earnings improvement for Turkey to be more H2 weighted.
  • Since merger, 58 hotels have been opened, 69 % of which are in lower capital intensity models (managed or owned via joint venture).

Cruises

 

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Turnover1in EUR million

234.1

205.6

+ 13.9

424.6

396.9

+ 7.0

Underlying EBITAin EUR million

59.4

56.0

+ 6.1

106.4

93.7

+ 13.6

Underlying EBITA at 
constant currencyin EUR million

59.1

56.0

+ 5.5

106.3

93.7

+ 13.4

Occupancyin %
variance in % points

 

 

 

 

 

 

TUI Cruises

98

100

- 2

99

99

-

Marella Cruises2

99

98

+ 1

100

100

-

Hapag-Lloyd Cruises

79

77

+ 2

77

76

+ 1

Passenger days in '000

 

 

 

 

 

 

TUI Cruises

1,445

1,248

+ 15.9

2,817

2,514

+ 12.1

Marella Cruises2

738

559

+ 32.1

1,442

1,251

+ 15.3

Hapag-Lloyd Cruises

79

93

- 14.5

150

168

- 10.3

Average daily rates3 in EUR

 

 

 

 

 

 

TUI Cruises

146

147

- 0.8

148

148

- 0.3

Marella Cruises2, 4in £

154

143

+ 7.2

145

136

+ 6.5

Hapag-Lloyd Cruises

683

653

+ 4.5

639

600

+ 6.6

1 No turnover is carried for TUI Cruises as the joint venture is consolidated at equity

2 Rebranded from Thomson Cruises in October 2017

3 Per day and passenger

4 Inclusive of transfers, flights and hotels due to the integrated nature of Marella Cruises, in GBP

  • Cruises underlying EBITA increased by EUR 13 m in H1. Growth was driven by Marella and Hapag-Lloyd Cruises.
  • The TUI Cruises result was ahead of prior year. As expected, the increase in capacity was offset by the earlier than originally planned launch of new Mein Schiff 2 in the low yield Q2 season, a planned dry dock for Mein Schiff Herz, and the exit of Mein Schiff 1 from the fleet in H2 FY18.
  • TUI Cruises occupancy and average daily rate for H1 were in line with prior year, a good performance given the significant increase in German cruise capacity this year. The lower occupancy and slightly lower average daily rate in Q2 reflect the earlier launch of new Mein Schiff 2, meaning that sales started relatively close to launch.
  • Marella Cruises underlying EBITA increased due to the launch of Marella Explorer in H2 FY18 (formerly Mein Schiff 1) and good performance across the fleet, offset partly by dry dock days for the Marella Discovery and exit of the Spirit at the start of FY19.
  • Hapag-Lloyd Cruises underlying EBITA increased on prior year, driven by the non-repeat of prior year dry dock and improved occupancy and rates across the fleet, partially offset by the exit of Hanseatic at the start of FY19.

Destination Experiences

EUR million

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Total turnover

191.5

61.1

+ 213.4

417.8

144.4

+ 189.3

Turnover

144.5

26.3

+ 449.4

302.8

65.6

+ 361.6

Underlying EBITA

- 5.6

- 9.9

+ 43.4

- 10.4

- 13.3

+ 21.8

Underlying EBITA at constant currency

- 5.8

- 9.9

+ 41.4

- 10.3

- 13.3

+ 22.6

  • H1 earnings growth was driven by the integration of last year's acquisition of Destination Management, offset partly by start-up losses in Musement. As a result of these acquisitions, Destination Experiences sold 2.4 million excursions and activities in H1, almost double the number of last year.
  • Our growth expectations for Destination Experiences are intact, driven by integration of acquisitions and launch of Musement as a fully digitalised, open platform for sales of excursions & activities.

Markets & Airlines

Markets & Airlines

 

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Turnoverin EUR million

2,471.3

2,618.9

- 5.6

5,405.1

5,526.8

- 2.2

Underlying EBITAin EUR million

- 318.8

- 234.7

- 35.8

- 496.8

- 375.5

- 32.3

Underlying EBITA at 
constant currencyin EUR million

- 318.2

- 234.7

- 35.6

- 495.9

- 375.5

- 32.1

Direct distribution mix1in %
variance in % points

74

75

- 1

74

74

-

Online mix2 in %
variance in % points

51

50

+ 1

50

49

+ 1

Customers in '000

2,879

3,086

- 6.7

6,546

6,709

- 2.4

1 Share of sales via own channels (retail and online)

2 Share of online sales

  • As expected, the Markets & Airlines H1 result reflects the reduced demand due to the summer 2018 heatwave, overcapacities in Spain arising from the shift in demand to Eastern Mediterranean, continued Brexit uncertainty, as well as particularly strong comparatives for Nordics in H1 last year. In addition, the result includes the initial EUR 5 m impact from the 737 MAX grounding, which commenced in mid-March, and the EUR 22 m due to the later timing of Easter this year.
  • The current year result for Northern Region includes EUR 29 m gain which was crystallised on a hedge which is no longer required.

Northern Region

 

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Turnoverin EUR million

1,023.0

1,098.0

- 6.8

2,123.3

2,226.6

- 4.6

Underlying EBITAin EUR million

- 130.8

- 88.3

- 48.1

- 205.1

- 125.7

- 63.2

Underlying EBITA at 
constant currencyin EUR million

- 130.3

- 88.3

- 47.6

- 204.2

- 125.7

- 62.5

Direct distribution mix1in %
variance in % points

92

91

+ 1

92

92

-

Online mix2 in %
variance in % points

67

66

+ 1

67

65

+ 2

Customers in '000

1,009

1,114

- 9.4

2,246

2,363

- 4.9

1 Share of sales via own channels (retail and online)

2 Share of online sales

  • In UK and Nordics, H1 demand was impacted by the factors outlined above. Customer volumes declined 5 % on prior year and margins were significantly lower. Nordics was particularly badly affected by the reduced demand due to last Summer's heatwave, with an 8 % drop in customer volumes and load factor reduction.
  • In addition, the later timing of Easter negatively impacted underlying EBITA by EUR 14 m, and the grounding of the 737 MAX increased costs by EUR 1 m.
  • Share of earnings for Canada also decreased in the quarter, primarily as a result of the year on year impact of fuel and currency rates.
  • These factors were partly offset by a EUR 29 m gain which crystallised during Q1 on a hedge which is no longer required.

Central Region

 

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Turnoverin EUR million

934.4

1,002.0

- 6.7

2,224.7

2,235.6

- 0.5

Underlying EBITAin EUR million

- 90.7

- 89.9

- 0.9

- 127.8

- 144.7

+ 11.7

Underlying EBITA at 
constant currencyin EUR million

- 90.6

- 89.9

- 0.8

- 127.8

- 144.7

+ 11.7

Direct distribution mix1 in %
variance in % points

49

49

-

49

49

-

Online mix2 in %
variance in % points

21

21

-

21

20

+ 1

Customers in '000

976

1,062

- 8.1

2,380

2,435

- 2.3

1 Share of sales via own channels (retail and online)

2 Share of online sales

  • The improvement in Central Region underlying earnings was driven primarily by Germany, as a result of the non-repeat of the impact of the bankruptcy of Niki (EUR 20 m receivable write-off in prior year) as well as reduced overheads.
  • This was partly offset by weaker trading (for the reasons outlined above), the later timing of Easter (EUR 7 m) and higher airline cost base due to the loss of the Air Berlin / Niki contract.
  • Customer volumes for Central Region decreased by 2 % in H1, reflecting a reduction in airline capacity in Germany, offset partly by a significant volume increase in Poland as we continue to drive growth in that market.
  • Increasing the level of direct distribution continues to be a key focus especially for our German business. Direct distribution for Central Region in H1 was 49 % in H1, with online distribution at 21 %.

Western Region

 

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Turnoverin EUR million

513.9

518.9

- 1.0

1,057.1

1,064.6

- 0.7

Underlying EBITAin EUR million

- 97.3

- 56.5

- 72.2

- 163.9

- 105.1

- 55.9

Underlying EBITA at 
constant currency in EUR million

- 97.3

- 56.5

- 72.2

- 163.9

- 105.1

- 55.9

Direct distribution mix1 in %
variance in % points

76

75

+ 1

76

75

+ 1

Online mix2 in %
variance in % points

60

58

+ 2

60

58

+ 2

Customers in '000

894

910

- 1.7

1,920

1,911

+ 0.5

1 Share of sales via own channels (retail and online)

2 Share of online sales

  • In Western Region, margins across all three markets (Belgium, Netherlands, France) were impacted by weak trading and the factors outlined above. In addition, especially in France, the 'Gilets Jaunes' protests drove negative consumer sentiment.
  • Customer volumes for the region were broadly flat year on year, with growth in Benelux offset by capacity reductions in France.
  • In addition, the result reflects a higher level of airline disruption and staffing costs, as well as 737 MAX grounding costs of (EUR 4 m) and the timing of Easter (EUR 1 m).

All other segments

EUR million

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Turnover

119.8

151.3

- 20.8

272.9

288.7

- 5.5

Underlying EBITA

- 18.7

- 24.8

+ 24.8

- 35.2

- 46.9

+ 24.9

Underlying EBITA at constant currency

- 20.3

- 24.8

+ 18.1

- 37.5

- 46.9

+ 20.0

  • The result for All other segments improved due to the reduction in head office costs and benefits from aircraft financing.
  • Corsair's revenues and earnings deteriorated on prior year due to increased delay, fuel and maintenance costs and the impact of the 'Gilet Jaunes' protests in France. On 18 March TUI ­announced the disposal of a majority stake in Corsair.

Financial position and net assets

Cash Flow / Net capex and investments / Net debt

The cash outflow from operating activities increased by EUR 274.0 m to EUR 717.5 m. As well as the lower earnings in H1 2019, this was driven by a higher working capital outflow for the payment of hotel creditors than prior year, mainly as a result of increased capacity in Summer 2018 in Central Region.

Net debt is defined as financial debt less cash and cash equivalents and future short-term interest-bearing investments. As expected, net debt level is returning to the normal seasonal pattern, as we complete reinvestment of disposal proceeds received in recent years. It also reflects the planned ongoing financing of our aircraft order book, with more aircraft being brought into ownership and under finance leases.

Net debt

EUR million

31 Mar 2019

31 Mar 2018

Var. %

Financial debt

- 3,101.4

- 1,977.8

- 56.8

Cash and cash equivalents

1,091.6

1,338.1

- 18.4

Short-term interest-bearing investments

45.7

63.7

- 28.3

Net debt

- 1,964.1

- 576.0

- 241.0

 

Net capex and investments

EUR million

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Cash gross capex

 

 

 

 

 

 

Hotels & Resorts

107.5

53.0

+ 102.8

186.6

115.1

+ 62.1

Cruises

53.8

2.7

n. a.

200.0

38.1

+ 424.9

Destination Experiences

7.6

1.3

+ 484.6

9.6

2.9

+ 231.0

Holiday Experiences

169.0

57.0

+ 196.5

396.3

156.1

+ 153.9

Northern Region

19.8

15.9

+ 24.5

30.5

23.4

+ 30.3

Central Region

8.7

3.3

+ 163.6

14.6

10.2

+ 43.1

Western Region

9.7

6.9

+ 40.6

21.0

13.0

+ 61.5

Markets & Airlines

38.1

26.1

+ 46.0

66.2

46.6

+ 42.1

All other segments

59.5

37.6

+ 58.2

81.2

92.8

- 12.5

TUI Group

266.6

120.7

+ 120.9

543.6

295.6

+ 83.9

Net pre delivery payments on aircraft

- 22.4

- 60.7

+ 63.1

- 54.4

- 20.2

- 169.3

Financial investments

85.2

13.6

+ 526.5

146.7

24.2

+ 506.2

Divestments

27.2

- 7.1

n. a.

15.6

- 92.3

n. a.

Net capex and investments

356.7

66.5

+ 436.4

651.5

207.3

+ 214.3

The increase in net capex and investments in H1 2019 was mainly driven by the acquisition of Marella Explorer 2, acquisitions in Hotels & Resorts related to our core hotel brands Riu, Robinson and TUI Blue as well as the acquisitions of the online platform Musement and further companies from Hotelbeds. The development of divestments was related to the sale of the majority stake in Corsair, while the prior-year figure included the sale of three Riu hotels.

Assets and liabilities

Assets and liabilities

EUR million

31 Mar 2019

30 Sep 2018
adjusted

Var. %

Non-current assets

11,519.8

10,663.2

+ 8.0

Current assets

4,023.7

4,939.4

- 18.5

Assets

15,543.5

15,602.6

- 0.4

Equity

3,290.4

4,280.0

- 23.1

Provisions

2,077.7

2,111.2

- 1.6

Financial liabilities

3,101.4

2,442.9

+ 27.0

Other liabilities

7,074.0

6,768.5

+ 4.5

Liabilities

15,543.5

15,602.6

- 0.4

Prior-year figures adjusted due to retrospective application of IFRS 15 and PPA adjustments for Destination Management

As at 31 March 2019, TUI Group's balance sheet total amounted to EUR 15.5 bn, nearly at the level of financial year end 30 September 2018. The equity ratio stood at 21.2 %, falling below its level of 27.4 % as at 30 September 2018.

Details see Notes from page 24

Foreign Exchange / Fuel

Our strategy of hedging the majority of our jet fuel and currency requirements for future seasons, as detailed below, remains unchanged. This gives us certainty of costs when planning capacity and pricing. The following table shows the percentage of our forecast requirement that is currently hedged for Euros, US Dollars and jet fuel for our Markets & Airlines, which account for over 90 % of our Group currency and fuel exposure.

Foreign Exchange / Fuel

%

Summer 2019

Winter 2019 / 20

Euro

92

70

US Dollars

89

74

Jet Fuel

92

81

As at 9 May 2019

Comments on the consolidated income statement

TUI Group's results reflect the significant seasonal swing in tourism between the winter and summer travel months. The Group seeks to counteract the seasonal swing through a broad range of holiday offerings in the summer and winter season and its presence in different travel markets worldwide with varying annual cycles.

The consolidated income statement reflects the seasonality of the tourism business, with negative results generated in the period from October to March.

Income statement of the TUI Group for the period 
from 1 Oct 2018 to 31 Mar 2019

EUR million

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Turnover

3,101.6

3,145.3

- 1.4

6,676.4

6,565.9

+ 1.7

Cost of sales

3,088.5

3,052.1

+ 1.2

6,519.1

6,288.6

+ 3.7

Gross profit

13.1

93.2

- 85.9

157.3

277.3

- 43.3

Administrative expenses

317.4

313.9

+ 1.1

638.2

620.7

+ 2.8

Other income

7.4

2.9

+ 155.2

12.9

48.6

- 73.5

Other expenses

12.6

-

n. a.

13.9

0.3

n. a.

Impairment of financial assets

1.6

2.1

- 23.8

- 2.8

27.0

n. a.

Financial income

21.9

3.5

+ 525.7

69.9

17.7

+ 294.9

Financial expenses

29.5

31.0

- 4.8

79.1

68.1

+ 16.2

Share of result of joint ventures and associates

72.9

73.4

- 0.7

107.3

114.2

- 6.0

Earnings before income taxes from continuing operations

- 245.8

- 174.0

- 41.3

- 381.0

- 258.3

- 47.5

Income taxes

- 70.7

- 31.7

- 123.0

- 93.8

- 47.7

- 96.6

Result from continuing operations

- 175.1

- 142.3

- 23.0

- 287.2

- 210.6

- 36.4

Group loss

- 175.1

- 142.3

- 23.0

- 287.2

- 210.6

- 36.4

Group loss attributable to shareholders of TUI AG

- 202.0

- 171.7

- 17.6

- 341.3

- 280.9

- 21.5

Group loss attributable to non-controlling interest

26.9

29.4

- 8.5

54.1

70.3

- 23.0

Prior-year figures adjusted due to retrospective application of IFRS 15 and previous year's structure adjusted due to the first-time application of IFRS 9

In the first half of 2019, turnover totalled EUR 6.7 bn, up 1.7 % year-on-year. This increase reflects the expanded business volume resulting from the acquisition of the Destination Management division of Hotelbeds Group and the Italian Technology Start-up Musement, offset by decreased turnover in Markets & Airlines.

The year-on-year decline in the result from continuing operations was attributable to a weaker operating performance in Markets & Airlines, profits from the sale of two hotel companies, a hotel and one aircraft included in previous year's numbers, partly offset by higher financial income.

Alternative performance measures

Key indicators used to manage the TUI Group are underlying EBITA and EBITA.

EBITA comprises earnings before interest, taxes and goodwill impairments. EBITA includes amortisation of other intangible assets. It does not include the result from the measurement of interest hedges.

Underlying EBITA has been adjusted for gains on disposal of financial investments, restructuring expenses according to IAS 37, all effects from purchase price allocations, ancillary acquisition costs and conditional purchase price payments and other expenses for and income from one-off items.

The table below shows a reconciliation of earnings before taxes from continuing operations to underlying earnings.

Reconciliation to underlying earnings

EUR million

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Reconciliation to underlying earnings:

 

 

 

 

 

 

Earnings before income taxes*

- 245.8

- 174.0

- 41.3

- 381.0

- 258.3

- 47.5

plus: Net interest expense

5.2

26.2

- 80.2

32.7

51.8

- 36.9

plus: Expense from the 
measurement of interest hedges

0.5

1.3

- 61.5

2.4

3.1

- 22.6

EBITA*

- 240.1

- 146.5

- 63.9

- 345.9

- 203.4

- 70.1

Adjustments:

 

 

 

 

 

 

less: Losses on disposals

11.1

-

 

11.1

-

 

plus: Restructuring expense

0.1

4.3

 

1.6

13.4

 

plus: Expense from purchase
price allocation

9.5

7.4

 

18.0

15.0

 

plus: Expense from other 
one-off items

2.4

1.8

 

14.6

5.3

 

Underlying EBITA*

- 217.0

- 133.0

- 63.2

- 300.6

- 169.7

- 77.1

* Prior-year figures adjusted due to restrospective application of IFRS 15

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 in particular major restructuring and integration expenses not meeting the criteria of IAS 37, material expenses for litigation, gains and losses from the sale of aircraft and other material business transactions with a one-off character.

In H1 2019, adjustments (including individual items and purchase price allocations) totaling EUR 45.3 m (previous year: EUR 33.7 m) were made. The individual items adjusted in the quarter under review mainly relate to one-off payments in connection with the conversion of the pension plan in the United Kingdom to a defined contribution plan and the loss on the Corsair disposal. In the prior-­year period, in addition to expenses from purchase price allocations, restructuring costs for the integration of Transat in France and the restructuring of our German airline in particular had to be adjusted.

The TUI Group's operating loss adjusted for one-off effects increased by EUR 130.9 m to EUR 300.6 m in H1 2019.

Key figures of income statement

EUR million

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Earnings before interest, income taxes, depreciation, impairment and rent (EBITDAR)

48.1

120.5

- 60.1

237.7

334.9

- 29.0

Operating rental expenses

166.8

160.0

+ 4.3

344.4

330.8

+ 4.1

Earnings before interest, income taxes, depreciation and impairment (EBITDA)

- 118.7

- 39.5

- 200.5

- 106.7

4.1

n. a.

Depreciation / amortisation less ­reversals of depreciation*

- 121.4

- 107.0

- 13.4

- 239.2

- 207.5

- 15.3

Earnings before interest, income taxes and impairment of goodwill (EBITA)

- 240.1

- 146.5

- 63.9

- 345.9

- 203.4

- 70.1

Earnings before interest and income taxes (EBIT)

- 240.1

- 146.5

- 63.9

- 345.9

- 203.4

- 70.1

Expense from the measurement of interest hedges

- 0.5

- 1.3

+ 61.5

- 2.4

- 3.1

+ 22.6

Net interest expense

- 5.2

- 26.2

+ 80.2

- 32.7

- 51.8

+ 36.9

Earnings before income taxes (EBT)

- 245.8

- 174.0

- 41.3

- 381.0

- 258.3

- 47.5

* On property, plant and equipment, intangible assets, financial and other assets

Other segment indicators

Underlying EBITDA

EUR million

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Hotels & Resorts

91.8

107.1

- 14.3

186.1

221.6

- 16.0

Cruises

79.9

69.6

+ 14.8

146.5

127.0

+ 15.4

Destination Experiences

- 1.7

- 7.7

+ 77.9

- 2.6

- 9.1

+ 71.4

Holiday Experiences

170.0

169.0

+ 0.6

330.0

339.5

- 2.8

Northern Region

- 117.6

- 73.6

- 59.8

- 179.2

- 102.7

- 74.5

Central Region

- 84.6

- 84.7

+ 0.1

- 116.5

- 134.7

+ 13.5

Western Region

- 92.3

- 52.5

- 75.8

- 154.0

- 97.0

- 58.8

Markets & Airlines

- 294.5

- 210.8

- 39.7

- 449.7

- 334.4

- 34.5

All other segments

20.2

9.7

+ 108.2

42.2

20.3

+ 107.9

TUI Group

- 104.3

- 32.1

- 224.9

- 77.5

25.4

n. a.

 

EBITDA

EUR million

Q2 2019

Q2 2018 
adjusted

Var. %

H1 2019

H1 2018 
adjusted

Var. %

Hotels & Resorts

91.8

107.1

- 14.3

186.0

221.5

- 16.0

Cruises

79.9

69.6

+ 14.8

146.5

127.0

+ 15.4

Destination Experiences

- 3.5

- 7.9

+ 55.7

- 6.5

- 9.7

+ 33.0

Holiday Experiences

168.2

168.8

- 0.4

326.0

338.8

- 3.8

Northern Region

- 120.4

- 75.0

- 60.5

- 195.8

- 105.5

- 85.6

Central Region

- 85.6

- 87.3

+ 1.9

- 118.6

- 139.3

+ 14.9

Western Region

- 95.5

- 54.6

- 74.9

- 157.8

- 107.8

- 46.4

Markets & Airlines

- 301.5

- 216.9

- 39.0

- 472.2

- 352.6

- 33.9

All other segments

14.6

8.6

+ 69.8

39.5

17.9

+ 120.7

TUI Group

- 118.7

- 39.5

- 200.5

- 106.7

4.1

n. a.

 

Employees

 

31 March 2019

31 March 2018 adjusted

Var. %

Hotels & Resorts

20,217

19,068

+ 6.0

Cruises*

348

313

+ 11.2

Destination Experiences

6,527

3,333

+ 95.8

Holiday Experiences

27,092

22,714

+ 19.3

Northern Region

12,636

13,268

- 4.8

Central Region

10,751

10,491

+ 2.5

Western Region

6,129

6,058

+ 1.2

Markets & Airlines

29,516

29,817

- 1.0

All other segments

3,527

3,242

+ 8.8

TUI Group

60,135

55,773

+ 7.8

* Excludes TUI Cruises (JV) employees. Cruises employees are primarily hired by external crew management agencies.

Corporate Governance

Composition of the Boards

In H1 2019 the composition of the Supervisory Board of TUI AG changed as follows:

Ms Carmen Riu Güell had declared her resignation from office with effect as of the close of the Annual General Meeting on 12 February 2019. As her successor Joan Trian Riu was elected to the Supervisory Board for a full term of approximately five years.

There were no changes in the composition of TUI AG's Executive Board in H1 2019.

The current, complete composition of the Executive Board and Supervisory Board is listed on our website, where it has been made permanently available 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 2018.

Details see Risk Report in our Annual Report 2018, from page 40

Active principal risks

IT development & strategy; growth strategy; integration & restructuring opportunities; corporate & social responsibilities; information security; impact of Brexit

Monitored principal risks

Destination disruption; customer demand*; input cost volatility; seasonal cashflow profile; legal & regulatory compliance; health & safety; supplier reliance; joint venture partnerships

* The principal risks Macroeconomic and Competition & Customer Preferences, ­included in the 2018 Annual Report are both related to trading and therefore have been consolidated and renamed to Customer Demand

With regard to the UK's exit from the EU in 2019, the main concern remains whether our airlines will continue to have access to EU airspace. We are continuing to address the importance of there being a special agreement for aviation between the EU and the UK post Brexit to protect consumer choice with the relevant UK and EU ministers and officials, and are in regular exchange with relevant regulatory authorities. While the date for the UK's exit from the EU has recently been delayed until latest 31st October 2019, we continue to develop scenarios and mitigating strategies for various outcomes, including a "hard Brexit", depending on the political negotiations, with a focus to alleviate potential impacts from Brexit for the Group.

The risks flagged in the Report on changes in expected development related to 737 MAX grounding fall within the supplier reliance and destination disruption principal risk categories. As per our Ad-hoc Risk Reporting guidelines included in the Annual Report 2018, the grounding was reported directly to the Executive Board outside of the quarterly process.

Report on changes in expected development see page 5

Interim Financial Statements

Income statement of the TUI Group for the 
period from 1 Oct 2018 to 31 Mar 2019

EUR million

Notes

H1 2019

H1 2018 
adjusted

Turnover

(1)

6,676.4

6,565.9

Cost of sales

(2)

6,519.1

6,288.6

Gross profit

 

157.3

277.3

Administrative expenses

(2)

638.2

620.7

Other income

(3)

12.9

48.6

Other expenses

(4)

13.9

0.3

Impairment of financial assets

 

- 2.8

27.0

Financial income

(5)

69.9

17.7

Financial expenses

(5)

79.1

68.1

Share of result of joint ventures and associates

(6)

107.3

114.2

Earnings before income taxes from continuing operations

 

- 381.0

- 258.3

Income taxes

(7)

- 93.8

- 47.7

Result from continuing operations

 

- 287.2

- 210.6

Group loss

 

- 287.2

- 210.6

Group loss attributable to shareholders of TUI AG

 

- 341.3

- 280.9

Group loss attributable to non-controlling interest

(8)

54.1

70.3

 

Earnings per share

EUR

H1 2019

H1 2018 
adjusted

Basic and diluted earnings per share

- 0.58

- 0.48

from continuing operations

- 0.58

- 0.48

 

Condensed statement of comprehensive income of the TUI Group 
for the period from 1 Oct 2018 to 31 Mar 2019

EUR million

H1 2019

H1 2018
adjusted

Group loss

- 287.2

- 210.6

Remeasurements of defined benefit obligations and related fund assets

- 53.1

79.1

Other comprehensive income of companies measured at equity that will not be reclassified

- 51.9

-

Fair value gain / loss on investments in equity instruments designated as at FVTOCI

- 0.7

-

Income tax related to items that will not be reclassified

19.4

- 13.4

Items that will not be reclassified to profit or loss

- 86.3

65.7

Foreign exchange differences

67.4

- 66.6

Cash flow hedges

- 342.8

21.3

Other comprehensive income of companies measured at equity that may be reclassified

2.6

25.7

Income tax related to items that may be reclassified

67.7

- 4.5

Items that may be reclassified to profit or loss

- 205.1

- 24.1

Other comprehensive income

- 291.4

41.6

Total comprehensive income

- 578.6

- 169.0

attributable to shareholders of TUI AG

- 644.7

- 234.6

attributable to non-controlling interest

66.1

65.6

 

Financial position of the TUI Group as at 31 Mar 2019

EUR million

Notes

31 Mar 2019

30 Sep 2018 
adjusted

1 Oct 2017 
adjusted

Assets

 

 

 

 

Goodwill

(9)

3,027.5

2,914.5

2,889.5

Other intangible assets

 

664.5

627.1

548.1

Property, plant and equipment

(10)

5,475.1

4,899.2

4,253.7

Investments in joint ventures and associates

 

1,439.8

1,402.3

1,284.1

Trade and other receivables

(14)

81.1

103.3

138.7

Derivative financial instruments

(14)

51.2

83.2

79.9

Other financial assets

(14)

43.4

54.3

69.5

Touristic payments on account

 

205.5

157.3

185.2

Other non-financial assets

 

232.6

184.4

73.1

Income tax assets

 

9.6

9.6

-

Deferred tax assets

 

289.5

228.0

326.0

Non-current assets

 

11,519.8

10,663.2

9,847.8

 

 

 

 

 

Inventories

 

115.4

118.5

110.2

Trade and other receivables

(14)

785.9

821.9

700.9

Derivative financial instruments

(14)

318.8

441.8

215.4

Other financial assets

(14)

45.7

18.7

11.9

Touristic payments on account

 

1,350.4

731.3

583.9

Other non-financial assets

 

166.9

139.9

81.7

Income tax assets

 

149.0

113.8

98.7

Cash and cash equivalents

(14), (17)

1,091.6

2,548.0

2,516.1

Assets held for sale

 

-

5.5

9.6

Current assets

 

4,023.7

4,939.4

4,328.4

Total assets

 

15,543.5

15,602.6

14,176.2

 

Financial position of the TUI Group as at 31 Mar 2019

EUR million

Notes

31 Mar 2019

30 Sep 2018 
adjusted

1 Oct 2017 
adjusted

Equity and liabilities

 

 

 

 

Subscribed capital

 

1,502.9

1,502.9

1,501.6

Capital reserves

 

4,200.5

4,200.5

4,195.0

Revenue reserves

 

- 3,117.4

- 2,058.2

- 2,798.3

Equity before non-controlling interest

 

2,586.0

3,645.2

2,898.3

Non-controlling interest

 

704.4

634.8

594.0

Equity

(13)

3,290.4

4,280.0

3,492.3

 

 

 

 

 

Pension provisions and similar obligations

(11)

1,008.5

962.2

1,094.7

Other provisions

 

661.0

768.1

801.4

Non-current provisions

 

1,669.5

1,730.3

1,896.1

Financial liabilities

(12), (14)

2,511.3

2,250.7

1,761.2

Derivative financial instruments

(14)

42.3

12.8

50.4

Other financial liabilities

(14)

19.1

14.4

43.9

Other non-financial liabilities

 

97.1

89.0

106.3

Income tax liabilities

 

71.4

108.8

150.2

Deferred tax liabilities

 

90.4

195.3

106.4

Non-current liabilities

 

2,831.6

2,671.0

2,218.4

Non-current provisions and liabilities

 

4,501.1

4,401.3

4,114.5

 

 

 

 

 

Pension provisions and similar obligations

(11)

30.0

32.6

32.7

Other provisions

 

378.2

348.3

349.9

Current provisions

 

408.2

380.9

382.6

Financial liabilities

(12), (14)

590.1

192.2

171.9

Trade payables

(14)

1,899.6

2,692.5

2,433.1

Derivative financial instruments

(14)

179.9

65.7

217.2

Other financial liabilities

(14)

92.1

93.3

103.8

Touristic advance payments received

 

4,043.6

2,824.8

2,700.4

Other non-financial liabilities

 

461.0

585.7

495.1

Income tax liabilities

 

77.5

86.2

65.3

Current liabilities

 

7,343.8

6,540.4

6,186.8

Current provisions and liabilities

 

7,752.0

6,921.3

6,569.4

Total provisions and liabilities

 

15,543.5

15,602.6

14,176.2

 

Condensed statement of changes in Group equity 
for the period from 1 Oct 2018 to 31 Mar 2019



EUR million

Subscribed 
capital

Capital 
reserves

Revenue 
reserves

Equity before non-controlling interest

Non-­controlling 
interest

Total

Balance as at 30 Sep 2018 (reported)

1,502.9

4,200.5

- 2,005.3

3,698.1

635.5

4,333.6

Adoption of IFRS 15

-

-

- 51.9

- 51.9

-

- 51.9

Adjustment PPA Destination Management

-

-

- 1.0

- 1.0

- 0.7

- 1.7

Balance as at 30 Sep 2018 (adjusted)

1,502.9

4,200.5

- 2,058.2

3,645.2

634.8

4,280.0

Adoption of IFRS 9

-

-

5.8

5.8

-

5.8

Balance as at 1 Oct 2018

1,502.9

4,200.5

- 2,052.4

3,651.0

634.8

4,285.8

Dividends

-

-

- 423.3

- 423.3

-

- 423.3

Share-based payment schemes

-

-

3.0

3.0

-

3.0

Effects on the acquisition of 
non-controlling interest

-

-

-

-

3.5

3.5

Group loss

-

-

- 341.3

- 341.3

54.1

- 287.2

Foreign exchange differences

-

-

55.6

55.6

11.8

67.4

Financial assets at FVOCI

-

-

- 0.7

- 0.7

-

- 0.7

Cash Flow Hedges

-

-

- 343.0

- 343.0

0.2

- 342.8

Remeasurements of defined benefit ­obligations and related fund assets

-

-

- 53.1

- 53.1

-

- 53.1

Other comprehensive income of companies measured at equity

-

-

- 49.3

- 49.3

-

- 49.3

Taxes attributable to other 
comprehensive income

-

-

87.1

87.1

-

87.1

Other comprehensive income

-

-

- 303.4

- 303.4

12.0

- 291.4

Total comprehensive income

-

-

- 644.7

- 644.7

66.1

- 578.6

Balance as at 31 Mar 2019

1,502.9

4,200.5

- 3,117.4

2,586.0

704.4

3,290.4

 

Condensed statement of changes in Group equity 
for the period from 1 Oct 2017 to 31 Mar 2018



EUR million

Subscribed 
capital

Capital 
reserves

Revenue 
reserves

Equity before non-controlling interest

Non-­controlling 
interest

Total

Balance as at 30 Sep 2017 (reported)

1,501.6

4,195.0

- 2,756.9

2,939.7

594.0

3,533.7

Adoption of IFRS 15

-

-

- 41.4

- 41.4

-

- 41.4

Balance as at 1 Oct 2017 (adjusted)

1,501.6

4,195.0

- 2,798.3

2,898.3

594.0

3,492.3

Dividends

-

-

- 381.8

- 381.8

-

- 381.8

Share-based payment schemes

-

-

1.0

1.0

-

1.0

Group loss

-

-

- 280.9

- 280.9

70.3

- 210.6

Foreign exchange differences

-

-

- 61.9

- 61.9

- 4.7

- 66.6

Cash Flow Hedges

-

-

21.3

21.3

-

21.3

Remeasurements of defined benefit ­obligations and related fund assets

-

-

79.1

79.1

-

79.1

Other comprehensive income of companies measured at equity

-

-

25.7

25.7

-

25.7

Taxes attributable to other comprehensive ­income

-

-

- 17.9

- 17.9

-

- 17.9

Other comprehensive income

-

-

46.3

46.3

- 4.7

41.6

Total comprehensive income

-

-

- 234.6

- 234.6

65.6

- 169.0

Balance as at 31 Mar 2018

1,501.6

4,195.0

- 3,413.7

2,282.9

659.6

2,942.5

 

Condensed cash flow statement of the TUI Group

EUR million

Notes

H1 2019

H1 2018

Cash outflow from operating activities

(17)

- 717.5

- 443.5

Cash outflow from investing activities

(17)

- 679.1

- 261.2

Cash outflow from financing activities

(17)

- 72.5

- 470.6

Net change in cash and cash equivalents

 

- 1,469.1

- 1,175.3

Change in cash and cash equivalents due to exchange rate fluctuation

 

12.7

- 2.4

Cash and cash equivalents at beginning of period

 

2,548.0

2,516.1

Cash and cash equivalents at end of period

 

1,091.6

1,338.4

of which included in the balance sheet as assets held for sale

 

-

0.3

Notes

General

The TUI Group, with its major subsidiaries and other shareholdings, operates in the tourism business. TUI AG based in Hanover and Berlin, Germany, is TUI Group's parent company and a listed corporation under German law. The shares in the Company are traded on the London Stock Exchange and the Hanover and Frankfurt Stock Exchanges.

The condensed interim consolidated financial statements of TUI AG and its subsidiaries cover the period from 1 October 2018 to 31 March 2019. The interim consolidated financial statements are prepared in euros. Unless stated otherwise, all amounts are stated in million euros (EURm).

The interim consolidated financial statements were released for publication by the Executive Board of TUI AG on 13 May 2019.

Accounting principles

Declaration of compliance

The interim consolidated financial statements for the period ended 31 March 2019 comprise condensed interim consolidated financial statements and an interim Group management report in accordance with § 115 of the German Securities Trading Act (WpHG).

The interim consolidated financial statements were prepared in conformity with the International Financial Reporting Standards (IFRS) of the International Acounting 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 Group's 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 AG's consolidated financial statements for financial year 2018. The interim financial statements were reviewed by the Group's auditors.

Going concern report according to the UK Corporate Governance Code

TUI Group meets its day-to-day working capital requirements through cash in hand, bank balances and loans from financial institutions. As at 31 March 2019, TUI Group's net debt position (financial liabilities less short-term interest-bearing bank balances) totals EUR 1,964.1 m (as at 30 September 2018 net financial assets of EUR 123.6 m). The increase in net debt versus year-end is driven by normal seasonal cash outflows, mainly within the tour operator.

The Group's main financial liabilities and credit lines as at 31 March 2019 are:

  • a bond 2016 / 21 with a nominal value of EUR 300.0 m, issued by TUI AG, maturing in October 2021,
  • EUR 150.0 m drawn from an external revolving credit facility worth EUR 1,535.0 m maturing in July 2022, used to manage the seasonality of the Group's cash flows and liquidity,
  • Schuldschein with a maximum maturity until July 2028 with a nominal value of EUR 425.0 m, issued by TUI AG,
  • short-term euro commercial papers worth EUR 220.5 m,
  • further liabilities to banks worth EUR 460.4 m, and
  • finance lease obligations worth EUR 1,526.9 m.

The revolving credit facility agreement contains certain financial covenants, which were fully complied with at the reporting date.

The expectations and forecasts have shown that TUI Group will continue to have sufficient funds available from borrowings and operating cash flows in order to meet its payment obligations for the foreseeable future and guarantee its ability to continue as a going concern.

In conformity with Rule C1.3 of the UK Corporate Governance Code, the Executive Board confirms that it considers it appropriate to adopt the going concern basis of accounting in preparing the consolidated financial statements.

Accounting and measurement methods

The preparation of the interim financial statements requires management to make estimates and judgements that affect the reported values of assets, liabilities and contingent liabilities as at the balance sheet date and the reported values of revenues and expenses during the reporting period. Actual results may deviate from the estimates.

The accounting and measurement methods adopted in the preparation of the interim financial statements as at 31 March 2019 are materially consistent with those followed in preparing the previous consolidated financial statements for the financial year ended 30 September 2018. Exceptions to this are the standards and interpretations applied for the first time in financial year 2019, in particular the standards on Revenue Recognition (IFRS 15) and recognition of Financial Instruments (IFRS 9), applied as at 1 October 2018.

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 the financial year 2019 the following standards and interpretations amended or newly issued by the IASB have been applied by TUI for the first time either mandatorily or voluntarily:

New applied standards in financial year 2019

Standard

Applicable from

Amendments

Impact on financial statements

Amendments to IFRS 2 
Classification and ­Measurement of ­Share-based Payment transactions

1.1.2018


 

The amendments clarify the accounting for certain share based payment ­transactions.

 

Not material.


 

IFRS 9
Financial Instruments

1.1.2018
 

The new standard replaces the current guidance in IAS 39 on classification and measurement of financial assets and introduces new rules for hedge accounting. The existing impairment rules are being superseded by a new model based on ­expected credit losses.

The effects are 
explained below.

Amendments to 
IFRS 9 
Prepayment Features with Negative 
Compensation

1.1.2019
(early adoption)

 

The amendments serve to enable entities applying IFRS 9 that hold debt ­instruments with a prepayment feature under which a party receives or pays a reasonable compensation in the event of early termination of the contract to measure these instruments at amortised cost or at fair value through other ­comprehensive income. Until the effective date of the amendments, such ­instruments have to be measured at fair value through profit or loss.

Not material.


 

IFRS 15 
Revenue from 
Contracts with 
Customers

1.1.2018


 

IFRS 15 combines and supersedes the guidance on revenue recognition comprised in various standards and interpretations so far. It establishes a single, comprehensive framework for revenue recognition, to be applied across industries and for all categories of revenue transactions, specifying which amount of revenue and at which point in time or over which time period revenue is to be recognised. IFRS 15 replaces, amongst others, IAS 18 and IAS 11.

The effects of IFRS 15 and the clarifications to IFRS 15 are explained below.




 

Clarifications to 
IFRS 15
Revenue from 
Contracts with 
Customers

1.1.2018

 

The amendments comprise clarifications of the guidance on identifying ­performance obligations, the principal versus agent assessment as well as 
the accounting for revenue from licences at a 'point in time' or 'over time'.
In addition, it introduces pract to simplify first-time adoption.

Amendments to 
IAS 40 
Transfer of 
Investment Property

1.1.2018
 

The amendments set out the conditions, according to which property under 
construction or development, which was previously classified as inventory, 
could be transferred to investment property in case of an evident change in 
use (and reversal).

Not material.
 

IFRIC 22 
Foreign Currency 
Transactions and 
Advance Consideration

1.1.2018

 

The interpretation clarifies the exchange rate to be used when an entity has 
received or paid advance consideration in a foreign currency. The date of 
transaction for the purpose of determining the exchange rate to use on initial 
recognition of the related asset, expense or income is the date on which the 
entity initally recognises the advance consideration.

No impact.

 

The amendments to IFRS 4 "Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts", published on 12 September 2016 and effective for the first time in the financial year under review, are not relevant for TUI Group.

IFRS 9

The first-time application of IFRS 9 primarily has the following effects on TUI:

  • Financial assets were reclassified based on the relevant business models for managing the financial assets and the cash flows characteristics associated with the financial assets. With the exception of the equity and debt instruments previously classified as "financial assets available for sale" under IAS 39 (see next item), this reclassification did not result in any material changes in measurement categories. Based on our assessment, all financial assets previously measured at amortised cost also meet the conditions for classification as "measured at amortised cost" under IFRS 9.
  • All equity instruments held were irrevocably allocated to the new measurement category "financial assets at fair value recognised in OCI". Debt instruments previously classified in the measurement category "financial assets available for sale" are designated as measured at fair value through profit or loss under IFRS 9. The determination of the fair values of the investments measured at cost under IAS 39 resulted in an overall increase in the carrying amount of EUR 22.9 m due to the transition to IFRS 9, recognised in other comprehensive income in line with the transition requirements.
  • The classification of financial liabilities did not give rise to any changes in measurement categories. TUI does not apply the so-called fair value option. The transition from IAS 39 to IFRS 9 therefore had no effect.
  • An impairment loss is recognised for financial assets measured at amortised cost. The simplified approach is applied to trade receivables and all expected losses over the term of the contract are recognised upon initial recognition. In this context, TUI uses historical loss rates adjusted for credit default swaps (CDS) rates. For all other financial assets within the scope of IFRS 9, such as touristic loans, impairments are determined using the general approach. TUI calculates the expected credit losses on the basis of default probabilities determined on the basis of an internal rating model. The CDS rates are also used as forward-looking element in the general approach of the impairment model. If the default risk of the financial asset has not deteriorated significantly since initial recognition, 12-month credit losses are calculated. In the event of a significant deterioration in the default risk, value adjustments are recognised in the amount of the expected credit losses over the term. It is reviewed quarterly whether the credit risk has increased significantly. The transition from the incurred loss model to the new expected credit loss model resulted in an overall increase in loan loss provisions of EUR 21.8 million upon transition to IFRS 9, which was recognised directly in equity. As a result, the impairment loss changed from EUR 96.6 million to EUR 118.4 million.
  • TUI Group exercises the option to continue to apply the hedge accounting requirements of IAS 39 under IFRS 9.

In the retrospective first-time application of IFRS 9, TUI Group exercises the option not to restate comparative periods but to continue presenting them in line with previous IAS 39 rules. The cumulative first-time application effect from the transition to IFRS 9 is recognised in equity as at 1 October 2018.

The table below shows the reconciliation of the categories and carrying amounts of the financial assets and the effects of the transition to IFRS 9 on the Group's equity.

Reconciliation of the carrying amounts of financial assets from 
IAS 39 to IFRS 9 as at 1 Oct 2018





EUR million

Measurement 
according to 
IAS 39

Carrying amount 
according to IAS 39 as at 30 Sep 2018

Valuation 
approach 
according to IFRS 9

Reclassifi­cations
 

Remeasurements
 

Carrying amount ­according to IFRS 9 as at 
1 Oct 2018

Changes in revenue ­reserves as at 1 Oct 2018

Financial assets at amortised cost

LaR

3,473.2

AC

-

- 21.8

3,451.4

- 21.8

Financial assets at fair value recognised through profit or loss

FAHfT

40.3

FVPL

-

-

40.3

-

Financial assets at amortised cost

AfS

18.7

AV

-

-

18.7

-

Financial assets at fair value recognised in other comprehensive income

AfS

26.7

 

- 26.7

-

-

-

Financial assets at fair value recognised in other comprehensive income

 

-

FVOCI

26.7

-

26.7

-

Financial assets at cost

AfS

27.6

 

- 27.6

-

-

-

Financial assets at fair value recognised in other comprehensive income

 

-

FVOCI

12.6

15.0

27.6

15.0

Financial assets at fair value recognised through profit or loss

 

-

FVPL

15.0

7.9

22.9

7.9

Total

 

3,586.5

 

-

1.1

3,587.6

1.1

The value adjustment effect of EUR 21.8 million on financial assets at amortised cost results exclusively from the application of the impairment model in accordance with IFRS 9.

The table below shows the effect of the transition to IFRS 9 on the carrying amounts and fair values of financial assets and liabilities as at 1 October 2018 by measurement category.

Reconciliation of financial assets and liabilities according to class 
and measurement categories as at 1 Oct 2018





EUR million

Measurement categories 
according to IAS 39

Measurement categories 
according to IFRS 9

Carrying amount as at 30 Sep 2018 

Carrying amount 
according to IAS 39 as at 30 Sep 2018

Fair value 
according to IAS 39 as at 30 Sep 2018 

Carrying amount 
according to IFRS 9 as at 
1 Oct 2018

Fair value 
according to IFRS 9 as at 
1 Oct 2018 

Assets

 

 

 

 

 

 

 

Other financial assets

AfS

FVOCI

39.3

39.3

39.3

54.3

54.3

Other financial assets

AfS

FVPL

15.0

15.0

15.0

22.9

22.9

Other financial assets

AfS

AC

18.7

18.7

18.7

18.7

18.7

Trade and other receivables

LaR / n. a.

AC

925.2

925.2

925.2

903.4

903.4

Derivative financial instruments

 

 

 

 

 

 

 

Hedging

n. a.

n. a.

484.7

484.7

484.7

484.7

484.7

Other derivative financial ­instruments

FAHfT

FVPL

40.3

40.3

40.3

40.3

40.3

Cash and cash equivalents

LaR

AC

2,548.0

2,548.0

2,548.0

2,548.0

2,548.0

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Financial liabilities

FLaC / n. a.

AC

2,442.9

1,100.3

1,163.6

1,100.3

1,163.6

Trade payables

FLaC

AC

2,692.5

2,692.5

2,692.5

2,692.5

2,692.5

Derivative financial instruments

 

 

 

 

 

 

 

Hedging

n. a.

n. a.

56.0

56.0

56.0

56.0

56.0

Other derivative financial ­instruments

FLHfT

FVPL

22.5

22.5

22.5

22.5

22.5

Other financial liabilities

FLaC

AC

107.7

107.7

107.7

107.7

107.7

IFRS 15

In May 2014, IASB issued IFRS 15 (Revenues from Contracts with Customers). TUI Group applied IFRS 15 for the first time as at 1 October 2018, using the retrospective method under which the comparative period is presented in line with IFRS 15. As at 1 October 2017, the transition date, the first-time application of IFRS 15 resulted in a decrease in equity of EUR 41.4 m (after tax). The application of IFRS 15 lead in particular to the following results:

  • The flights, hotel nights and other services included in a package holiday are transformed into one product for customers within the meaning of IFRS 15, TUI as a tour operator, provides a significant service of integrating these services into a bundle, so that a package holiday constitute a single performance obligation for TUI.
  • Tour operator revenue recognition: Depending on the specific terms and conditions of the relevant contract, most tour operator revenue transactions were recognised on departure, i. e. at a point in time, under IAS 18. According to IFRS 15, revenue is now recognised when TUI performs the service for the customer, i. e. over the duration of the holiday, as customers consume their holidays over time. Compared with the rules of IAS 18, this usually leads to a change of timing for recognition of revenues and costs to a later date.
  • Change of presentation in the income statement: Due to the transition to IFRS 15, TUI has presented some revenue from tour operation under certain business models, previously shown on a gross basis under turnover and cost of sales, on a net basis since this financial year. This primarily affects passenger-related taxes and charges as well as denied boarding compensation, shown on a net basis under revenues under IFRS 15.
  • The application of IFRS 15 for joint ventures and associates measured at equity also created effects impacting underlying EBITA through the result from joint ventures and associates.

TUI applies the practical expedient offered under IFRS 15.63, dispensing with accounting for existing financing components in contracts with a term of one year or less. Advance payments received from customers constitute contract liaibilities within the meaning of IFRS 15. The effects of the first-time application of IFRS 15 on TUI Group's consolidated financial statements are summarised in the section on "Restatement of comparative periods".

The effects of the recognition of additional revenues and tourist expenses at the beginning of a financial year and lower revenues and tourism expenses at the end of a financial year driven by the new, later revenue recognition under IFRS 15 compared with revenue recognition on departure, i. e. at a point in time, under IAS 18 will almost completely offset one another on constant business volumes.

Restatement of comparative periods

TUI Group has retrospectively applied IFRS 15 and IFRS 9 as at 1 October 2018 as described in the section "Newly applied standards". Unlike IFRS 15, IFRS 9 was introduced without a restatement of prior year comparatives. In order to improve the presentation and the comparability of the financial statements, the comparative figures for impairments on financial assets have been reclassified to the new line introduced by IFRS 9 accordingly.

Additionally, Purchase Price Allocation restatements for the business Destination Management resulted in a restatement of prior-year comparatives in the statement of financial position (for further details, see comments in the section on "Acquisitions").

Restatement of income statement

Restated items of the income statement of the TUI Group 
for the period from 1 Oct 2017 to 31 Mar 2018



EUR million

before 
adjustment

Adoption of 
IFRS 15

Amendment 
income statement structure

adjusted

Turnover

6,813.5

- 247.6

-

6,565.9

Cost of sales

6,558.7

- 244.2

- 25.9

6,288.6

Gross profit

254.8

- 3.4

25.9

277.3

Administrative expenses

621.4

0.4

- 1.1

620.7

Impairment of financial assets

-

-

27.0

27.0

Share of result of joint ventures and associates

121.5

- 7.3

-

114.2

Earnings before income taxes

- 247.2

- 11.1

-

- 258.3

Income taxes

- 47.0

- 0.7

-

- 47.7

Result from continuing operations

- 200.2

- 10.4

-

- 210.6

Group loss

- 200.2

- 10.4

-

- 210.6

Group loss for the year attributable to shareholders of TUI AG

- 270.5

- 10.4

-

- 280.9

Restatement of earnings per share

Reconciliation to the adjusted earnings per share of the TUI Group for the period
from 1 Oct 2017 to 31 Mar 2018

EUR

before 
adjustment

Adoption of 
IFRS 15

adjusted

Basic and diluted earnings per share

- 0.46

- 0.02

- 0.48

from continuing operations

- 0.46

- 0.02

- 0.48

Restatement of condensed statement of comprehensive income