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TUI AG: INTERIM REPORT Q1 2022 1 OCTOBER 2021 - 31 DECEMBER 2021

02/08/2022 | 01:04am EDT

TUI AG (TUI)
TUI AG: INTERIM REPORT Q1 2022 1 OCTOBER 2021 - 31 DECEMBER 2021

08-Feb-2022 / 07:00 CET/CEST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.


 

 

TUI GROUP

Interim report Q1 2022

1 October 2021 - 31 DECEMBER 2021

 

 

 

Content

Interim Management Report

Q1 2022 Summary

Report on changes in expected development

Structure and strategy of TUI Group

Consolidated earnings

Segmental performance

Financial position and net assets

Comments on the consolidated income statement

Alternative performance measures

Other segment indicators

Corporate Governance

Risk and Opportunity Report

Unaudited condensed Consolidated Interim Financial Statements

Notes

General

Accounting principles

Group of consolidated companies

Acquisitions - Divestments

Notes to the unaudited condensed consolidated Income Statement

Notes to the unaudited condensed consolidated Statement of Financial Position

Responsibility statement

Review Report

Cautionary statement regarding forward-looking statements

Financial calendar

Contacts

 

 

 

 

Interim Management Report

 

Q1 2022 Summary

  • Group revenue of ?2.4bn, up ?1.9bn on the prior year (Q1 2021: ?0.5bn), reflecting the more open travel environment enabled by the successful roll-out of vaccinations during calendar year 2021. Around 40% of this increase in revenue was driven by Markets & Airlines Central Region, with our Continental European markets benefitting from the earlier easing of travel restrictions by the EU, resulting in a higher level of confidence in short-term departures.
  • 67% of Q1 2019 capacity were operated in Q1 2022, in line with expectations.
  • 2.3m customers departed in the quarter, an increase of 1.7m customers versus the prior year, resulting in an average load factor for the quarter of 79% (Q1 2021: Load factor 70%).
  • Q1 Group underlying EBITDA almost break-even at ?65.4m loss, improving ?392.2m versus prior year (Q1 2021: ?457.6m loss).
  • Q1 Group underlying EBIT loss of ?273.6m, an improvement of ?402.2m versus prior year (Q1 2021: ?675.8m loss), with Hotels & Resorts delivering a second sequential positive quarter since the start of the pandemic.
  • Global Realignment Programme on track, with ~25% of ~?400m p.a. target cost savings to be delivered in financial year 2022 (~?240m already delivered in financial year 2021, with remainder to be delivered by financial year 2023).
  • Credit rating upgrades from Moody's to B3 and S&P to B- in October 2021.
  • Strong liquidity position of ?3.3bn1 as of 3 February 2022, reflecting our strict cost discipline, lower working capital swing as anticipated (compared to Q1 2019 normalised quarter, unaffected by COVID-19), and ?1.1bn proceeds from recent capital increase.
  • First step in handing back government funding - ~?0.7bn planned on 1 April 2022

 

1 Available liquidity defined as unrestricted cash plus committed lines including financing packages

 

TUI Group - financial highlights

 

 

 

 

 

 

 

 

 

 

? million

 

 

Q1 2022

 

Q1 2021

 

Var. %

 

Var. % at constant currency

Revenue

 

 

2,369.2

 

468.1

 

+ 406.1

 

+ 398.0

Underlying EBIT1

 

 

 

 

 

 

 

 

 

Hotels & Resorts

 

 

61.1

 

- 95.6

 

n. a.

 

n. a.

Cruises

 

 

- 31.7

 

- 98.4

 

+ 67.7

 

+ 69.5

TUI Musement

 

 

- 12.7

 

- 32.6

 

+ 61.0

 

+ 61.0

Holiday Experiences

 

 

16.7

 

- 226.6

 

n. a.

 

n. a.

Northern Region

 

 

- 171.7

 

- 197.3

 

+ 13.0

 

+ 17.8

Central Region

 

 

- 55.0

 

- 149.4

 

+ 63.2

 

+ 63.0

Western Region

 

 

- 32.4

 

- 76.5

 

+ 57.7

 

+ 57.1

Markets & Airlines

 

 

- 259.0

 

- 423.1

 

+ 38.8

 

+ 40.9

All other segments

 

 

- 31.3

 

- 26.0

 

- 20.2

 

- 17.7

TUI Group

 

 

- 273.6

 

- 675.8

 

+ 59.5

 

+ 61.0

EBIT1

 

 

- 271.4

 

- 698.1

 

+ 61.1

 

 

Underlying EBITDA

 

 

- 65.4

 

- 457.6

 

+ 85.7

 

 

EBITDA2

 

 

- 55.5

 

- 474.8

 

+ 88.3

 

 

Group loss

 

 

- 386.5

 

- 790.3

 

+ 51.1

 

 

Earnings per share

?

 

- 0.27

 

- 1.32

 

+ 79.5

 

 

Net capex and investment

 

 

53.4

 

- 47.1

 

n. a.

 

 

Equity ratio (31 Dec)3

%

 

2.5

 

-5

 

+ 7.5

 

 

Net financial position (31 Dec)

 

 

- 5,069.6

 

- 7,177.0

 

+ 29.4

 

 

Employees (31 Dec)

 

 

43,162

 

37,081

 

+ 16.4

 

 

 

Differences may occur due to rounding.

This Quarterly Report of the TUI Group was prepared for the reporting period Q1 2022 from 1 October 2021 to 31 December 2021.

1 We define the EBIT in underlying EBIT as earnings before interest, income taxes and result of the measurement of the Group's interest hedges. For further details please see page 15.

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.

All change figures refer to the same period of the previous year, unless otherwise stated.

 

Trading update

  • 6.0m bookings1 across Winter 2021/22 and Summer 2022, with an acceleration in bookings since the start of the new year, as confidence in international travel improves.
  • Winter 2021/22 bookings1 have slowed to 58% of Winter 2018/19 levels mainly due to Omicron-related amendments in late November and December 2021, with Q2 departures currently more subdued. We expect short-term bookings to continue and at present, we expect winter capacity to be between low and mid-range of assumed range of 60% to 80% (of Winter 2018/19 levels).
  • Summer 2022 bookings1 are 72% of Summer 2019 levels. Booking patterns overall have been relatively stable despite Omicron, with recent bookings trending in the same pattern as January 2019, albeit at reduced volume levels at this point.
  • Following the removal of testing requirements in the UK, we have seen a step-up in booking activity, with UK Summer 2022 bookings currently up 19% on Summer 2019.
  • Combined with the improving confidence in departure, lifting of restrictions and later booking profile, our Summer 2022 capacity assumption is for close to 2019 summer levels.
  • ASPs1 for both seasons holding up strongly compared to 2018/19 programmes, driven by a higher mix of packages and reflective of the robust appetite for leisure travel (Winter 2021/22: +15%, Summer 2022: +22%).
  • Hotels & Resorts - As evident in Q4 as well as the quarter under review where we have returned to positive underlying EBITs, we have seen a clear demand for our hotels with improving occupancies across our diversified portfolio. We expect this positive trend to continue developing into the Summer 2022, with the short-term booking profile likely to continue also.
  • Cruises - Coming into the new calendar year, we have seen itinerary amendments across our three brands, due to various port closures and increasing incidence rates affecting our planned itineraries in the Middle East and in the Caribbean. For all three cruises brands, we will likely see a challenging first half as a result with the short-term booking profile expected to continue into the Summer. However H2 2022 and 2023 bookings are all currently at higher rates compared to booking positions as of Q1 2019.
  • TUI Musement - The number the Excursions, Activities and Tours (EATs) sold in the first quarter are already ahead of both Q1 2021 and (pre-COVID-19) Q1 2019, reflecting firstly the more open travel environment and secondly the successful integration of Musement. The integration of Musement has increased both product inventory and the number of destinations offered on our digital platform, and with the wider reopening of travel, we have begun resuming our growth plans for this segment which remains highly fragmented and largely offline. We expect EATs to develop beyond the capacity assumptions of our Markets & Airlines Winter 2021/22 and Summer 2022, as third-party sales return, in line with a wider reopening across our global destinations.

 

1 Bookings up to 30 January 2022 compared to 2019 programmes (undistorted by COVID-19) and relate to all customers whether risk or non-risk

 

Global Realignment Programme - Targeted savings ~?400m p.a. by financial year 2023

In May 2020, we announced our Global Realignment Programme to address group-wide costs, with a target of permanently saving more than ?400m per annum by financial year 2023.

 

In the financial year ending September 2021, ~60% (?240m) of our announced targeted savings were delivered. Savings have been most significantly delivered across the Markets & Airlines division (~85% of savings to date).

 

The programme is on track to deliver a further 25% of our targeted savings in financial year 2022 and remains on track to deliver the full programme benefits by end of financial year 2023.

 

Net debt

Q1 2022 net debt position of ?5.1bn is in line with 2021 year-end position. The Q1 position includes proceeds from our capital increase of ?1.1bn and reflects our improved operating result combined with the expected lower seasonal Q1 working capital outflow of ?937m, demonstrating our continuous focus on cost and cash discipline.

 

Completion of capital increase of ?1.1bn

We successfully completed a second capital increase in November 2021. The gross issue proceeds totalled around ?1.1bn. The Group's share capital increased nominally by ?523.5m to ?1.623bn.

 

Strategic priorities

Ongoing priorities - we will continue with our disciplined cash management, drive operating effectiveness, whilst maximising opportunities to de-lever and continue our debt reduction in order to return to a solid and healthy balance sheet.

 

Our growth opportunities will be driven by the expansion of our tours & activities segment, accelerated digitalisation, our increased offer of dynamic packaging, growth through asset-right financing structures and execution of our Global Realignment Programme. The combination of these drivers should enable us to emerge stronger, leaner, more digitalised and more agile, and ready to exploit market recovery and growth opportunities.

 

TUI is strategically well positioned and will benefit from the strong rebound in the leisure industry.

 

Mid-term ambitions - we expect underlying EBIT to significantly build on financial year 2019, driven by both top-line growth and benefits from our Global Realignment Programme, with a target to return to gross leverage ratio of less than 3.0x.

 

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, quantified forecast for the financial year 2022.

 

We continue to consider the asumptions for the financial year 2022 made in the Annual Report 2021 to be valid.

 

  • See also TUI Group Annual Report 2021 page 50 et seqq.

 

Structure and strategy of TUI Group

Reporting structure

The present Interim Report for Q1 2022 is based on TUI Group's reporting structure set out in the Consolidated Financial Statements of TUI AG as at 30 September 2021.

 

  • See TUI Group Annual Report 2021 from page 28

 

Group strategy

The TUI Group's strategy outlined in the Annual Report 2021 will be continued in the current financial year.

 

  • See TUI Group Annual Report 2021 from page 25

 

 

Consolidated earnings

Revenue

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

Hotels & Resorts

 

198.3

 

56.5

 

+ 251.0

Cruises

 

34.2

 

0.6

 

n. a.

TUI Musement

 

66.3

 

10.5

 

+ 531.4

Holiday Experiences

 

298.8

 

67.5

 

+ 342.7

Northern Region

 

652.2

 

107.0

 

+ 509.5

Central Region

 

985.1

 

213.2

 

+ 362.1

Western Region

 

416.1

 

74.1

 

+ 461.5

Markets & Airlines

 

2,053.4

 

394.3

 

+ 420.8

All other segments

 

17.0

 

6.3

 

+ 169.8

TUI Group

 

2,369.2

 

468.1

 

+ 406.1

TUI Group (at constant currency)

 

2,331.0

 

468.1

 

+ 398.0

 

 

Underlying EBIT

 

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

 

Hotels & Resorts

 

61.1

 

- 95.6

 

n. a.

 

Cruises

 

- 31.7

 

- 98.4

 

+ 67.8

 

TUI Musement

 

- 12.7

 

- 32.6

 

+ 61.0

 

Holiday Experiences

 

16.7

 

- 226.6

 

n. a.

 

Northern Region

 

- 171.7

 

- 197.3

 

+ 13.0

 

Central Region

 

- 55.0

 

- 149.4

 

+ 63.2

 

Western Region

 

- 32.4

 

- 76.5

 

+ 57.6

 

Markets & Airlines

 

- 259.0

 

- 423.1

 

+ 38.8

 

All other segments

 

- 31.3

 

- 26.0

 

- 20.4

 

TUI Group

 

- 273.6

 

- 675.8

 

+ 59.5

 

 

 

EBIT

 

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

 

Hotels & Resorts

 

82.4

 

- 95.7

 

n. a.

 

Cruises

 

- 31.7

 

- 98.4

 

+ 67.8

 

TUI Musement

 

- 14.6

 

- 34.3

 

+ 57.4

 

Holiday Experiences

 

36.1

 

- 228.4

 

n. a.

 

Northern Region

 

- 175.6

 

- 201.2

 

+ 12.7

 

Central Region

 

- 64.0

 

- 159.8

 

+ 59.9

 

Western Region

 

- 33.2

 

- 79.5

 

+ 58.2

 

Markets & Airlines

 

- 272.8

 

- 440.6

 

+ 38.1

 

All other segments

 

- 34.7

 

- 29.1

 

- 19.2

 

TUI Group

 

- 271.4

 

- 698.1

 

+ 61.1

 

 

 

 

Segmental performance

Holiday Experiences

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

Revenue

 

298.8

 

67.5

 

+ 342.7

Underlying EBIT

 

16.7

 

- 226.6

 

n. a.

Underlying EBIT at constant currency

 

17.4

 

- 226.6

 

n. a.

 

 

Hotels & Resorts

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

Total revenue1

 

282.8

 

93.6

 

+ 202.1

Revenue

 

198.3

 

56.5

 

+ 251.0

Underlying EBIT

 

61.1

 

- 95.6

 

n. a.

Underlying EBIT at constant currency

 

60.0

 

- 95.6

 

n. a.

Capacity hotels total2 ('000)

 

8,595

 

5,176

 

+ 66.0

Riu

 

3,431

 

2,496

 

+ 37.4

Robinson

 

729

 

364

 

+ 100.4

Blue Diamond

 

1,323

 

873

 

+ 51.6

Occupancy rate hotels total3
(in %, variance in % points)

 

64

 

43

 

+ 21

Riu

 

69

 

46

 

+ 23

Robinson

 

63

 

48

 

+ 15

Blue Diamond

 

74

 

42

 

+ 32

Average revenue per bed hotels total4
(in ?)

 

72

 

60

 

+ 19.9

Riu

 

66

 

53

 

+ 24.2

Robinson

 

101

 

89

 

+ 13.0

Blue Diamond

 

119

 

91

 

+ 30.8

Revenue includes fully consolidated companies, all other KPIs incl. companies measured at equity.

1 Total revenue includes intra-Group revenue.

 

 

 

 

 

 

2 Group owned or leased hotel beds multiplied by opening days per quarter

3 Occupied beds divided by capacity

 

 

 

 

 

 

4 Arrangement revenue divided by occupied beds

 

We operated 8.6m available bednights (capacity2) in the quarter, an increase of 3.4m available bednights versus the prior year (Q1 2021: 5.2m), and back to almost normalised levels (Q1 2019: 9.1m). The 8.6m available bednights reflect the improved travel environment versus the prior year, as well as the usual winter seasonality. Good operational performances were delivered across our diversified destinations, returning the segment to a second quarterly positive underlying EBIT since the start of the pandemic.

 

In an environment of changing travel restrictions across many different destinations, our diversified portfolio enabled us to optimise demand from non-source market countries. Customers from the US for example were able to travel more openly to the Caribbean and in destinations such as Mexico, we were able to benefit from domestic customers vacationing. This in combination with our ability to direct our Market & Airlines customers to our own capacity first, demonstrates more than ever the advantage of our integrated and diversified business model.

 

Our hotels across the Caribbean were able to deliver average occupancy rates of 76% as a result, with Mexico in particular achieving 85% average occupancy in the first quarter. Our hotels in the Canaries remained the most popular destination for our European customers during this winter period, achieving average occupancy of 79%. Other popular destinations in the quarter were Turkey, Egypt and Cape Verde.

 

Overall occupancy rate increased 21%pts to 64% for the segment, reflecting the reasons above, driven in particular by the Caribbean and Spanish destinations. Average daily rate increased by 20% to ?72.

 

Underlying EBIT profit of ?61.1m is up ?156.7m versus prior year, reflecting the more open travel environment across our multiple destinations with Riu delivering strong performances in their core Caribbean and Spanish markets.

Cruises

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

Revenue1

 

34.2

 

0.6

 

n. a.

Underlying EBIT

 

- 31.7

 

- 98.4

 

+ 67.8

Underlying EBIT at constant currency

 

- 30.0

 

- 98.4

 

+ 69.5

Occupancy (in %, variance in % points)

 

 

 

 

 

 

TUI Cruises

 

53

 

35

 

+ 18

Hapag-Lloyd Cruises

 

50

 

37

 

+ 13

Marella Cruises

 

48

 

-

 

n. a.

Passenger days ('000)

 

 

 

 

 

 

TUI Cruises

 

695

 

177

 

+ 291.7

Hapag-Lloyd Cruises

 

74

 

13

 

+ 464.9

Marella Cruises

 

182

 

-

 

n. a.

Average daily rates3 (in ?)

 

 

 

 

 

 

TUI Cruises

 

155

 

118

 

+ 31.6

Hapag-Lloyd Cruises

 

624

 

434

 

+ 43.9

Marella Cruises (in £)

 

142

 

-

 

n. a.

1 No revenue is carried for TUI Cruises and Hapag-Lloyd Cruises as the joint venture is consolidated at equity

2 Per day and passenger

 

 

 

 

 

 

 

Our Cruises segment consisting of TUI Cruises, Hapag-Lloyd Cruises and Marella Cruises operated 14 ships out of 16 ships in the first quarter, in line with their winter plans (Q1 2021: five ships operated).

 

TUI Cruises operated six ships out of its seven-ship fleet in Q1 2022. Average daily rate of ?155, up 32% versus prior year (Q1 2021: ?118 and three ships operated), reflecting the resumption of cruises in the Canaries, the Caribbean and United Arab Emirates versus the shorter average duration "Blue Cruises" operated in the prior year. Occupancy of the operated fleet was 53%, increasing 18%pts on the prior year (Q1 2021: 35%) with the latter end of the quarter impacted by both short-term Omicron-related amendments and the early curtailment of Mein Schiff 6 due to rising incidence rates.

 

Hapag-Lloyd Cruises average daily rate across its full fleet of five ships was ?624, up 44% versus prior year (Q1 2021: ?434 and two ships operated) reflecting the resumption of Around The World itineraries as well as trips to Antarctica and the United Arab Emirates. Occupancy of the full fleet was 50% increasing 13%pts on prior year (Q1 2021: 37%), with the latter end of the quarter impacted by both short-term Omicron-related amendments and the early curtailment of two ships due to rising incidence rates.

 

Marella Cruises operated three ships out of its four-ship fleet in Q1, delivering average daily rate of £142 and occupancy of 48% versus a previous Q1 which saw operations suspended in line with UK government travel advice. Similar to TUI Cruises and Hapag-Lloyd Cruises, Marella also saw short-term amendments for November and December 2021 departures.

 

TUI Cruises and Hapag-Lloyd Cruises delivered a ?66.7m improvement in underlying EBIT versus the prior year. The improvement reflects the wider resumption of operations compared to limited 'Blue Cruises' itineraries in Q1 2021, as well as a government grant of ?20m recognised in Q1 2022, with the prior year including a ?20m impairment charge. Marella delivered an underlying EBIT in line with Q1 2021, due to a more subdued environment in UK, which was further limited by disruption costs arising from a Spanish labour strike, delaying the return of Explorer from dry dock in December 2021.

 

TUI Musement

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

Total revenue1

 

100.2

 

15.6

 

+ 542.3

Revenue

 

66.3

 

10.5

 

+ 531.4

Underlying EBIT

 

- 12.7

 

- 32.6

 

+ 61.0

Underlying EBIT at constant currency

 

- 12.7

 

- 32.6

 

+ 61.0

1 Total revenue includes intra-Group revenue.

 

 

 

 

 

 

 

1.1m excursions, activities and tours sold in the quarter, an increase of 1m from 109k in Q1 2021 reflecting the more open travel environment across our destinations versus the prior year, with sales delivered through our Markets & Airlines division and direct through our Musement platform.

 

This resumption in activities reflects the first steps in resuming our growth plans for the segment, which remains highly fragmented and largely offline. Underpinning our growth plans, we will continue to accelerate and enhance our digital transformation, combining self-service digital capabilities with physical presence in core markets to ensure we remain guest centric throughout all channels.

 

Underlying EBIT improved by ?19.9m year-on-year as a result, up from the ?32.6m underlying loss in the prior year.

 

Online distribution was 34% (Q1 2021: 40%) reflecting the return of destination staff in resort versus the prior year, in line with our hybrid in-person and online self-service model. 

 

 

Markets & Airlines

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

Revenue

 

2,053.4

 

394.3

 

+ 420.8

Underlying EBIT

 

- 259.0

 

- 423.1

 

+ 38.8

Underlying EBIT at constant currency

 

- 250.1

 

- 423.1

 

+ 40.9

Direct distribution mix1
(in %, variance in % points)

 

75

 

77

 

- 2

Online mix2
(in %, variance in % points)

 

52

 

56

 

- 4

Customers ('000)

 

2,255

 

525

 

+ 329.3

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

2 Share of online sales

 

 

As already covered, Q1 2022 saw a more open travel environment versus the prior year, with October 2021 in particular benefiting from the Summer momentum. The latter end of the quarter however saw a level of Omicron-related amendments. A total of 2.3m customers departed in the quarter, an increase of 1.7m customers versus Q1 2021, which has been enabled by the successful roll-out of vaccinations across both our markets and destinations. Average load factor of 79% was achieved for the quarter (Q1 2021: 70%).

 

Underlying EBIT loss for the segment improved by ?164.1m to ?259.0m loss (Q1 2021: ?423.1m loss) reflecting the 67% capacity (compared to Q1 2019) operated over the period, a vast improvement on the previous year which saw our operations largely suspended due to travel restrictions. The result includes ?34m net cost impact from hedging ineffectiveness, as well as savings delivered by our Global Realignment Programme across all markets.

 

 

Northern Region

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

Revenue

 

652.2

 

107.0

 

+ 509.5

Underlying EBIT

 

- 171.7

 

- 197.3

 

+ 13.0

Underlying EBIT at constant currency

 

- 162.1

 

- 197.3

 

+ 17.8

Direct distribution mix1
(in %, variance in % points)

 

94

 

93

 

+ 1

Online mix2
(in %, variance in % points)

 

73

 

76

 

- 3

Customers ('000)

 

665

 

114

 

+ 485.0

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

2 Share of online sales

 

Northern Region saw a steady increase in customer volumes particularly in October and December with 665k guests departing overall in the quarter, versus 114k customers in Q1 2021.

 

Underlying EBIT improved by ?25.6m to ?171.7m loss as a result of the operational development, including savings delivered through our Global Realignment Programme. Comparatively to our other regions, the overall loss of ?172m reflects the higher operational leverage for the UK, with departure volumes, although improving, still limited and overall sentiment around testing requirements and changing restrictions holding back a wider recovery.

 

 

Central Region

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

Revenue

 

985.1

 

213.2

 

+ 362.1

Underlying EBIT

 

- 55.0

 

- 149.4

 

+ 63.2

Underlying EBIT at constant currency

 

- 55.3

 

- 149.4

 

+ 63.0

Direct distribution mix1
(in %, variance in % points)

 

56

 

64

 

- 8

Online mix2
(in %, variance in % points)

 

30

 

37

 

- 7

Customers ('000)

 

917

 

246

 

+ 273.7

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

2 Share of online sales

 

 

Central Region saw 917k customers depart, an improvement of 671k customer versus prior year (Q1 2021: 246k), the strongest increase across our markets. The region continued in a similar theme to Summer 2021 (Q4 2021) with our Continental European markets benefitting from the earlier easing of travel restrictions by the EU, resulting in a higher level of confidence in short-term departures.

 

Underlying EBIT improved by ?94.4m to a ?55.0m loss as a result of the positive operational development, including savings delivered through our Global Realignment Programme.

 

 

Western Region

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

Revenue

 

416.1

 

74.1

 

+ 461.5

Underlying EBIT

 

- 32.4

 

- 76.5

 

+ 57.6

Underlying EBIT at constant currency

 

- 32.8

 

- 76.5

 

+ 57.1

Direct distribution mix1
(in %, variance in % points)

 

82

 

85

 

- 3

Online mix2
(in %, variance in % points)

 

63

 

69

 

- 6

Customers ('000)

 

673

 

166

 

+ 305.0

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

2 Share of online sales

 

Western Region saw 673k customers depart, an improvement of half a million customers versus the prior year (Q1 2021: 166k), benefitting from the same factors as the Central Region.

 

Underlying EBIT improved by ?44.1m to ?32.4m loss, nearing break-even as a result of the positive operational development. The result includes savings delivered through our Global Realignment Programme.

 

 

All other segments

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

Revenue

 

17.0

 

6.3

 

+ 169.8

Underlying EBIT

 

- 31.3

 

- 26.0

 

- 20.4

Underlying EBIT at constant currency)

 

- 30.6

 

- 26.0

 

- 17.7

 

Underlying EBIT loss of ?31.3m, broadly in line with prior year.

 

Financial position and net assets

Cash Flow / Net capex and investments / Net debt

As a result of the partial easing of global travel restrictions, TUI Group was able to increase its business volume year-on-year. Nevertheless, TUI Group's operating cash flow continued to be impacted by the COVID-19 pandemic in the period under review.

 

In October 2021, TUI AG carried out a capital increase. This resulted in an inflow of ?1,106.5m after deduction of borrowing costs.

 

At ?964.6m, the cash outflow from operating activities increased by ?228.1m compared to previous year.

 

The net debt as of 31 December 2021 decreased by ?2,107.4m to ?5,069.6m year-on-year and is in line with 2021 year-end position.

 

Net debt

 

 

 

 

 

 

 

 

 

 

 

 

 

? million

 

31 Dec 2021

 

31 Dec 2020

 

Var. %

Financial debt

 

- 3,576.6

 

- 5,167.3

 

+ 30.8

Lease liabilities

 

- 3,260.2

 

- 3,275.1

 

+ 0.5

Cash and cash equivalents

 

1,649.3

 

1,250.5

 

+ 31.9

Short-term interest-bearing investments

 

117.8

 

14.8

 

+ 695.9

Net debt

 

-5,069.6

 

-7,177.0

 

+ 29.4

 

 

Net capex and investments

 

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

 

Cash gross capex

 

 

 

 

 

 

 

Hotels & Resorts

 

22.0

 

33.7

 

- 34.7

 

Cruises

 

21.5

 

7.9

 

+ 172.2

 

TUI Musement

 

3.5

 

2.8

 

+ 25.0

 

Holiday Experiences

 

47.0

 

44.4

 

+ 5.9

 

Northern Region

 

4.9

 

5.9

 

- 16.9

 

Central Region

 

0.5

 

0.9

 

- 44.4

 

Western Region

 

1.2

 

2.0

 

- 40.0

 

Markets & Airlines*

 

10.3

 

12.0

 

- 14.2

 

All other segments

 

25.6

 

12.9

 

+ 98.4

 

TUI Group

 

82.9

 

69.3

 

+ 19.6

 

Net pre delivery payments on aircraft

 

- 46.4

 

0.3

 

n. a.

 

Financial investments

 

-

 

0.5

 

n. a.

 

Divestments

 

16.9

 

- 117.2

 

n. a.

 

Net capex and investments

 

53.4

 

- 47.1

 

n. a.

 

 

* Including ?3.7m for Q1 2022 (previous year: ?3.2m) 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 Q1 2022 was 19.6% higher year-on-year. This increase was mainly due to dock periods at Marella Cruises and Group IT investments. Net capex and investments of ?53.4m increased by ?100.5m year-on-year. The divestments related mainly to the sale and lease back of aircraft. In addition, a subsequent reconciliation of the disposal of RIU Hotels S.A. was included, in total resulting in positive divestments. Previous year's divestments included sale and lease back of spares and aircraft as well as a part of the sales proceeds of Hapag-Lloyd Kreuzfahrten to our joint venture TUI Cruises.

 

Assets and liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

? million

 

31 Dez 2021

 

30 Sep 2021

 

Var. %

Non-current assets

 

11,261.1

 

11,222.3

 

+ 0.3

Current assets

 

3,161.8

 

2,933.3

 

+ 7.8

Total assets

 

14,422.9

 

14,155.7

 

+ 1.9

Equity

 

359.1

 

- 418.4

 

n. a.

Provisions

 

2,174.4

 

2,238.2

 

- 2.9

Financial liabilities

 

3,576.6

 

3,320.8

 

+ 7.7

Other liabilities

 

8,312.8

 

9,015.2

 

- 7.8

Total equity, liabilities and provisions

 

14,422.9

 

14,155.7

 

+ 1.9

 

 

Comments on the consolidated income statement

As a result of the partial easing of global travel restrictions, TUI Group was able to increase its business volume compared with the prior-year quarter. Nevertheless, the development of revenue and earnings in Q1 2022 continued to be significantly impacted by the measures 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.

 

In Q1 2022, consolidated revenue increased by ?1.9bn year-on-year to ?2.4bn.

 

Unaudited condensed consolidated Income Statement of TUI AG for the period from
1 Oct 2021 to 31 Dec 2021

 

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

 

Revenue

 

2,369.2

 

468.1

 

+406.1

 

Cost of sales

 

2,472.4

 

880.1

 

+180.9

 

Gross loss

 

- 103.2

 

- 412.0

 

+75.0

 

Administrative expenses

 

201.7

 

193.1

 

+4.5

 

Other income

 

26.2

 

5.8

 

+351.7

 

Other expenses

 

0.9

 

6.0

 

- 85.0

 

Impairment (+) / Reversal of impairment (-) of financial assets

 

- 4.3

 

- 9.6

 

+55.2

 

Financial income

 

20.8

 

36.1

 

- 42.4

 

Financial expense

 

147.8

 

143.5

 

+3.0

 

Share of result of investments accounted for using the equity method

 

- 2.3

 

- 103.9

 

+97.8

 

Earnings before income taxes

 

- 404.5

 

- 806.9

 

+49.9

 

Income taxes (expense (+), income (-))

 

- 17.9

 

- 16.6

 

- 7.8

 

Group loss

 

- 386.5

 

- 790.3

 

+51.1

 

Group loss attributable to shareholders of TUI AG

 

- 384.3

 

- 780.1

 

+50.7

 

Group loss attributable to non-controlling interest

 

- 2.3

 

- 10.1

 

+77.2

 

 

 

 

 

 

 

 

 

 

 

Alternative performance measures

The Group's main financial KPI is underlying EBIT. We define the EBIT in underlying EBIT as earnings before interest, income taxes and expenses for the measurement of the Group's interest hedges. EBIT by definition includes goodwill impairments.

 

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

 

Q1 2022

 

Q1 2021

 

Var. %

 

Earnings before income taxes

 

- 404.5

 

- 806.9

 

+49.9

 

plus: Net interest expenses (excluding expense / income from measurement of interest hedges)

 

131.6

 

102.2

 

+28.8

 

plus / less: (Expenses) income from measurement of interest hedges

 

1.5

 

6.6

 

- 77.3

 

EBIT

 

- 271.4

 

- 698.1

 

+61.1

 

Adjustments:

 

 

 

 

 

 

 

plus: Separately disclosed items

 

- 9.3

 

14.2

 

 

 

plus: Expense from purchase price allocation

 

7.1

 

8.1

 

 

 

Underlying EBIT

 

- 273.6

 

- 675.8

 

+59.5

 

 

The TUI Group's operating loss adjusted for special items increased by ?402.2m to ?273.6m in Q1 2022.

 

  • For further details on the separately disclosed items see page 42 in the Notes of this Interim Report.

 

 

Key figures of income statement

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

EBITDAR

 

- 51.5

 

- 472.4

 

+ 89.1

Operating rental expenses

 

- 4.0

 

- 2.4

 

- 66.7

EBITDA

 

- 55.5

 

- 474.8

 

+ 88.3

Depreciation/amortisation less reversals of depreciation*

 

- 215.9

 

- 223.3

 

+ 3.3

EBIT

 

- 271.4

 

- 698.1

 

+ 61.1

Income/Expense from the measurement of interest hedges

 

1.5

 

6.6

 

- 77.3

Net interest expense (excluding expense/income from measurement of interest hedges)

 

131.6

 

102.2

 

+ 28.8

EBT

 

- 404.5

 

- 806.9

 

+ 49.9

* on property, plant and equipment, intangible assets, right of use assets and other assets

 

 

 

Other segment indicators

 

Underlying EBITDA

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

Hotels & Resorts

 

107.0

 

- 41.5

 

n. a.

Cruises

 

- 15.0

 

- 83.6

 

+ 82.1

TUI Musement

 

- 6.8

 

- 26.8

 

+ 74.6

Holiday Experiences

 

85.1

 

- 152.0

 

n. a.

Northern Region

 

- 96.5

 

- 120.8

 

+ 20.1

Central Region

 

- 27.1

 

- 119.7

 

+ 77.4

Western Region

 

3.0

 

- 40.4

 

n. a.

Markets & Airlines

 

- 120.6

 

- 281.0

 

+ 57.1

All other segments

 

- 30.0

 

- 24.7

 

- 21.5

TUI Group

 

- 65.4

 

- 457.6

 

+ 85.7

 

 

EBITDA

 

 

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

 

Var. %

Hotels & Resorts

 

128.3

 

- 41.6

 

n. a.

Cruises

 

- 15.0

 

- 83.7

 

+ 82.1

TUI Musement

 

- 7.0

 

- 26.5

 

+ 73.6

Holiday Experiences

 

106.3

 

- 151.8

 

n. a.

Northern Region

 

- 97.1

 

- 123.8

 

+ 21.6

Central Region

 

- 34.6

 

- 129.8

 

+ 73.3

Western Region

 

3.0

 

- 41.7

 

n. a.

Markets & Airlines

 

- 128.6

 

- 295.3

 

+ 56.5

All other segments

 

- 33.2

 

- 27.8

 

- 19.4

TUI Group

 

- 55.5

 

- 474.8

 

+ 88.3

 

 

Employees

 

 

 

 

 

 

 

 

 

31 Dec 2021

 

31 Dec 2020

 

Var. %

Hotels & Resorts

 

15,456

 

9,297

 

+ 66.2

Cruises*

 

56

 

57

 

- 1.8

TUI Musement

 

4,687

 

3,362

 

+ 39.4

Holiday Experiences

 

20,199

 

12,716

 

+ 58.8

Northern Region

 

8,668

 

8,877

 

- 2.4

Central Region

 

7,344

 

8,336

 

- 11.9

Western Region

 

4,609

 

4,795

 

- 3.9

Markets & Airlines

 

20,621

 

22,008

 

- 6.3

All other segments

 

2,342

 

2,357

 

- 0.6

Total

 

43,162

 

37,081

 

+ 16.4

* 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 has not changed in Q1 2022:

 

The current, complete composition of the Executive Board and Supervisory Board is published on our website, where it is permanently accessible to the public.

 

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 2021.

 

?  Details see Risk Report in our Annual Report 2021, from page 35

 

Principal risks above risk appetite: Lack of integration & flexibility within operations and IT systems; Reduction in customer demand; Inability to attract & retain talent; Insufficient cash flow; Volatility of input costs; Impact of Brexit; Disruption to IT Systems (Cyber attack); Lack of sustainability improvements;

 

Principal risks within appetite: Disruption within our destinations; Security Health & Safety breach; Reliance on key suppliers; Breach of regulatory requirements; Management of 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.

 

Currently, TUI Group continues to be affected by the negative financial impact of the COVID 19 pandemic.

 

After a significant decline in the number of COVID-19 cases in summer 2021, many countries again recorded a significant increase in infections since Q1 2022, in particular due to the rapid spread of the Omicron variant. As a result, contact restriction measures have been tightened again in the affected countries. Due to the associated ongoing changes in travel restrictions, it is still not foreseeable when the TUI Group's travel programme can be fully resumed. In particular, it is not possible at this stage (7 February 2022) to reliably predict how vaccination rates against the COVID-19 virus will develop in the individual countries, whether new variants of the virus will emerge and when medication for treating COVID-19 disease will be available. However, it is now foreseeable that sufficient vaccines will be available in our key source markets and destinations to ensure a continued recovery in travel in the financial year 2022.

 

With the customer deposits received for the coming seasons, the funds from the financing measures taken in the financial year 2021 (capital increase in January 2021 and the convertible bond placed in April), the cash inflow from the sale of RIU Hotels S.A., the extension of the revolving credit facilities including the further suspension of the review of the financial covenants and the further capital increase in October 2021, the Executive Board believes that, despite the existing risks, TUI Group currently has sufficient funds, and will continue to have sufficient funds in the future, resulting both from the borrowing and from expected operating cash flows, to meet its payment obligations and to continue as a going concern in the foreseeable future. In this context, the Executive Board assumes that the credit lines expiring in summer 2024 will be refinanced. Therefore, as at 31 December 2021, the Executive Board has not identified any material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern. The Executive Board does not consider the remaining risk with regard to a further pandemic-related change in booking behaviour to be a threat to the Group's continued existence. In its assessment, the Executive Board assumes that the booking figures will gradually recover in the financial year 2022 and that the volumes in the summer of 2022 will settle at approximately the level of the summer of 2019. For the financial year 2023, it is expected that booking behaviour in the financial 2023 year 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 the individual countries and virus variants for which there is insufficient vaccination protection, thus affecting TUI Group'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 AG for the period from
1 Oct 2021 to 31 Dec 2021

 

 

 

 

 

 

 

? million

 

Notes

 

Q1 2022

 

Q1 2021

Revenue

 

(1)

 

2,369.2

 

468.1

Cost of sales

 

(2)

 

2,472.4

 

880.1

Gross loss

 

 

 

- 103.2

 

- 412.0

Administrative expenses

 

(2)

 

201.7

 

193.1

Other income

 

(3)

 

26.2

 

5.8

Other expenses

 

(4)

 

0.9

 

6.0

Impairment (+) / Reversal of impairment (-) of financial assets

 

(21)

 

- 4.3

 

- 9.6

Financial income

 

(5)

 

20.8

 

36.1

Financial expense

 

(5)

 

147.8

 

143.5

Share of result of investments accounted for using the equity method

 

(6)

 

- 2.3

 

- 103.9

Earnings before income taxes

 

 

 

- 404.5

 

- 806.9

Income taxes (expense (+), income (-))

 

(7)

 

- 17.9

 

- 16.6

Group loss

 

 

 

- 386.5

 

- 790.3

Group loss attributable to shareholders of TUI AG

 

 

 

- 384.3

 

- 780.1

Group loss attributable to non-controlling interest

 

(8)

 

- 2.3

 

- 10.1

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

?

 

Q1 2022

 

Q1 2021

 

Basic and diluted loss / earnings per share

 

- 0.27

 

- 1.32

 

 

 

 

 

 

 

 

 

Unaudited condensed consolidated Statement of Comprehensive Income of TUI AG for the period from
1 Oct 2021 to 31 Dec 2021

 

 

 

 

 

? million

 

Q1 2022

 

Q1 2021

Group loss

 

- 386.5

 

- 790.3

Remeasurements of defined benefit obligations and related fund assets

 

72.6

 

- 205.2

Other comprehensive income of investments accounted for using the equity method that will not be reclassified

 

-

 

14.4

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

 

- 0.3

 

-

Income tax related to items that will not be reclassified (expense (-), income (+))

 

- 18.1

 

45.3

Items that will not be reclassified to profit or loss

 

54.2

 

- 145.5

Foreign exchange differences

 

3.7

 

2.3

Foreign exchange differences outside profit or loss

 

3.7

 

2.3

Cash flow hedges

 

- 3.9

 

- 12.1

Changes in the fair value

 

- 2.5

 

- 50.7

Reclassification

 

- 1.4

 

38.6

Other comprehensive income of investments accounted for using the equity method that may be reclassified

 

2.8

 

- 27.7

Changes in the measurement outside profit or loss

 

2.8

 

- 27.7

Income tax related to items that may be reclassified (expense (-), income (+))

 

0.6

 

- 8.5

Items that may be reclassified to profit or loss

 

3.2

 

- 46.0

Other comprehensive income

 

57.4

 

- 191.5

Total comprehensive income

 

- 329.1

 

- 981.8

attributable to shareholders of TUI AG

 

- 331.9

 

- 978.1

attributable to non-controlling interest

 

2.8

 

- 3.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited condensed consolidated Statement of Financial Position of TUI AG as at 31 Dec 2021

 

 

 

 

 

 

 

? million

 

Notes

 

31 Dec 2021

 

30 Sep 2021

Assets

 

 

 

 

 

 

Goodwill

 

(9)

 

3,032.5

 

2,993.1

Other intangible assets

 

 

 

503.4

 

498.6

Property, plant and equipment

 

(10)

 

3,141.9

 

3,159.3

Right-of-use assets

 

(11)

 

3,041.8

 

3,009.2

Investments in joint ventures and associates

 

 

 

646.2

 

640.5

Trade and other receivables

 

(12), (21)

 

239.9

 

308.7

Derivative financial instruments

 

(21)

 

8.9

 

8.9

Other financial assets

 

(13), (21)

 

11.2

 

12.3

Touristic payments on account

 

 

 

105.2

 

107.6

Other non-financial assets

 

 

 

240.0

 

183.4

Income tax assets

 

 

 

9.6

 

9.6

Deferred tax assets

 

 

 

280.4

 

291.1

Non-current assets

 

 

 

11,261.1

 

11,222.3

 

 

 

 

 

 

 

Inventories

 

 

 

42.6

 

42.8

Trade and other receivables

 

(12), (21)

 

642.3

 

471.6

Derivative financial instruments

 

(21)

 

38.2

 

53.4

Other financial assets

 

(13), (21)

 

117.8

 

12.1

Touristic payments on account

 

 

 

539.0

 

508.6

Other non-financial assets

 

 

 

96.9

 

106.7

Income tax assets

 

 

 

35.8

 

57.7

Cash and cash equivalents

 

(20)

 

1,649.3

 

1,583.9

Assets held for sale

 

(14)

 

-

 

96.5

Current assets

 

 

 

3,161.8

 

2,933.3

Total assets

 

 

 

14,422.9

 

14,155.7

 

Unaudited condensed consolidated Statement of Financial Position of TUI AG as at 31 Dec 2021

 

 

 

 

 

 

 

? million

 

Notes

 

31 Dec 2021

 

30 Sep 2021

Equity and liabilities

 

 

 

 

 

 

Subscribed capital

 

 

 

1,622.9

 

1,099.4

Capital reserves

 

 

 

5,832.5

 

5,249.6

Revenue reserves

 

 

 

- 8,857.3

 

- 8,525.7

Silent participation

 

 

 

1,091.0

 

1,091.0

Equity before non-controlling interest

 

 

 

- 310.8

 

- 1,085.8

Non-controlling interest

 

 

 

669.9

 

667.3

Equity

 

(20)

 

359.1

 

- 418.4

 

 

 

 

 

 

 

Pension provisions and similar obligations

 

(15)

 

845.6

 

901.9

Other provisions

 

 

 

775.4

 

763.6

Non-current provisions

 

 

 

1,621.0

 

1,665.5

Financial liabilities

 

(16), (21)

 

3,337.0

 

3,036.1

Lease liabilities

 

(17)

 

2,608.7

 

2,606.1

Derivative financial instruments

 

(21)

 

7.6

 

10.9

Other financial liabilities

 

(18), (21)

 

22.6

 

5.9

Other non-financial liabilities

 

 

 

193.0

 

206.3

Income tax liabilities

 

 

 

93.7

 

56.4

Deferred tax liabilities

 

 

 

60.3

 

123.3

Non-current liabilities

 

 

 

6,323.0

 

6,045.1

Non-current provisions and liabilities

 

 

 

7,944.0

 

7,710.5

 

 

 

 

 

 

 

Pension provisions and similar obligations

 

(15)

 

33.6

 

33.2

Other provisions

 

 

 

519.8

 

539.5

Current provisions

 

 

 

553.4

 

572.7

Financial liabilities

 

(16), (21)

 

239.6

 

284.6

Lease liabilities

 

(17)

 

651.4

 

623.3

Trade payables

 

(21)

 

1,638.9

 

2,052.4

Derivative financial instruments

 

(21)

 

40.8

 

12.9

Other financial liabilities

 

(18), (20)

 

189.0

 

313.0

Touristic advance payments received

 

(19)

 

2,294.7

 

2,379.4

Other non-financial liabilities

 

 

 

458.2

 

518.0

Income tax liabilities

 

 

 

53.7

 

56.7

Current liabilities

 

 

 

5,566.4

 

6,240.3

Liabilities related to assets held for sale

 

 

 

-

 

50.6

Current provisions and liabilities

 

 

 

6,119.8

 

6,863.6

Total equity, liabilities and provisions

 

 

 

14,422.9

 

14,155.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited condensed consolidated Statement of Changes in Equity of TUI AG for the period from
1 Oct 2021 to 31 Dec 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

? million

 

Subscribed capital

 

Capital reserves

 

Revenue reserves

 

Silent participation

 

Equity before non-controlling interest

 

Non-controlling interest

 

Total

Balance as at 30 Sep 2021

 

1,099.4

 

5,249.6

 

- 8,525.7

 

1,091.0

 

- 1,085.8

 

667.3

 

- 418.4

Share-based payment schemes

 

-

 

-

 

0.2

 

-

 

0.2

 

-

 

0.2

Capital increase

 

523.5

 

583.0

 

-

 

-

 

1,106.5

 

-

 

1,106.5

Group loss

 

-

 

-

 

- 384.3

 

-

 

- 384.3

 

- 2.3

 

- 386.6

Foreign exchange differences

 

-

 

-

 

- 1.2

 

-

 

- 1.2

 

5.0

 

3.8

Financial assets at FVTOCI

 

-

 

-

 

- 0.3

 

-

 

- 0.3

 

-

 

- 0.3

Cash Flow Hedges

 

-

 

-

 

- 3.9

 

-

 

- 3.9

 

-

 

- 3.9

Remeasurements of defined benefit obligations and related fund assets

 

-

 

-

 

72.6

 

-

 

72.6

 

-

 

72.6

Other comprehensive income of investments accounted for using the equity method

 

-

 

-

 

2.8

 

-

 

2.8

 

-

 

2.8

Taxes attributable to other comprehensive income

 

-

 

-

 

- 17.5

 

-

 

- 17.5

 

-

 

- 17.5

Other comprehensive income

 

-

 

-

 

52.5

 

-

 

52.5

 

5.0

 

57.5

Total comprehensive income

 

-

 

-

 

- 331.8

 

-

 

- 331.8

 

2.7

 

- 329.1

Balance as at 31 Dec 2021

 

1,622.9

 

5,832.5

 

- 8,857.3

 

1,091.0

 

- 310.8

 

669.9

 

359.1

 

Unaudited condensed consolidated Statement of Changes in Equity of TUI AG for the period from
1 Oct 2020 to 31 Dec 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

? million

 

Subscribed capital

 

Capital reserves

 

Revenue reserves

 

Silent participation

 

Equity before non-controlling interest

 

Non-controlling interest

 

Total

Balance as at 30 Sep 2020

 

1,509.4

 

4,211.0

 

- 6,168.8

 

-

 

- 448.4

 

666.5

 

218.1

Dividends

 

-

 

-

 

-

 

-

 

-

 

- 0.1

 

- 0.1

Share-based payment schemes

 

-

 

-

 

0.1

 

-

 

0.1

 

-

 

0.1

Issue of bonds with warrant

 

-

 

34.5

 

-

 

-

 

34.5

 

-

 

34.5

Group loss

 

-

 

-

 

- 780.2

 

-

 

- 780.2

 

- 10.1

 

- 790.3

Foreign exchange differences

 

-

 

-

 

- 4.1

 

-

 

- 4.1

 

6.5

 

2.4

Cash Flow Hedges

 

-

 

-

 

- 12.1

 

-

 

- 12.1

 

-

 

- 12.1

Remeasurements of defined benefit obligations and related fund assets

 

-

 

-

 

- 205.2

 

-

 

- 205.2

 

-

 

- 205.2

Other comprehensive income of investments accounted for using the equity method

 

-

 

-

 

- 13.3

 

-

 

- 13.3

 

-

 

- 13.3

Taxes attributable to other comprehensive income

 

-

 

-

 

36.8

 

-

 

36.8

 

-

 

36.8

Other comprehensive income

 

-

 

-

 

- 197.9

 

-

 

- 197.9

 

6.5

 

- 191.4

Total comprehensive income

 

-

 

-

 

- 978.1

 

-

 

- 978.1

 

- 3.6

 

- 981.7

Balance as at 31 Dec 2020

 

1,509.4

 

4,245.5

 

- 7,146.8

 

-

 

- 1,391.9

 

662.8

 

- 729.1

 

 

 

 

 

 

 

Unaudited condensed consolidated Cash Flow Statement of TUI AG for the period from
1 Oct 2021 to 31 Dec 2021

 

 

 

 

 

 

 

? million

 

Notes

 

Q1 2022

 

Q1 2021

Group loss

 

 

 

- 386.5

 

- 790.3

Depreciation, amortisation and impairment (+) / write-backs (-)

 

 

 

216.0

 

223.4

Other non-cash expenses (+) / income (-)

 

 

 

9.8

 

115.1

Interest expenses

 

 

 

138.8

 

140.1

Dividends from joint ventures and associates

 

 

 

0.1

 

5.2

Profit (-) / loss (+) from disposals of non-current assets

 

 

 

- 24.5

 

0.2

Increase (-) / decrease (+) in inventories

 

 

 

0.2

 

4.9

Increase (-) / decrease (+) in receivables and other assets

 

 

 

- 87.7

 

471.9

Increase (+) / decrease (-) in provisions

 

 

 

- 53.2

 

- 128.7

Increase (+) / decrease (-) in liabilities (excl. financial liabilities)

 

 

 

- 777.3

 

- 778.3

Cash inflow / cash outflow from operating activities

 

(24)

 

- 964.6

 

- 736.5

Payments received from disposals of property, plant and equipment and intangible assets

 

 

 

58.5

 

86.3

Payments received/made from disposals of consolidated companies
(less disposals of cash and cash equivalents due to divestments)

 

 

 

- 2.2

 

30.9

Payments received/made from disposals of other non-current assets

 

 

 

- 23.6

 

0.4

Payments made for investments in property, plant and equipment and intangible assets

 

 

 

- 85.8

 

- 69.6

Cash inflow / cash outflow from investing activities

 

(24)

 

- 53.2

 

48.0

Payments received from capital increase by issuing new shares

 

 

 

1,106.5

 

-

Payments received from capital increase through equity component of the bond with warrants issued

 

 

 

-

 

34.5

Payments made for acquisition of own shares

 

 

 

-

 

- 0.5

Payments received from the raising of financial liabilities

 

 

 

284.8

 

924.9

Payments made for redemption of loans and financial liabilities

 

 

 

- 77.9

 

- 3.9

Payments made for principal of lease liabilities

 

 

 

- 141.8

 

- 130.9

Interest paid

 

 

 

- 94.4

 

- 108.5

Cash inflow / cash outflow from financing activities

 

(24)

 

1,077.2

 

715.5

Net change in cash and cash equivalents

 

 

 

59.4

 

27.1

 

 

 

 

 

 

 

Development of cash and cash equivalents

 

(24)

 

 

 

 

Cash and cash equivalents at beginning of period

 

 

 

1,586.1

 

1,233.1

Change in cash and cash equivalents due to exchange rate fluctuations

 

 

 

3.8

 

- 9.6

Net change in cash and cash equivalents

 

 

 

59.4

 

27.1

Cash and cash equivalents at end of period

 

 

 

1,649.3

 

1,250.5

 

 

Notes

 

 

 

General

The TUI Group and its major subsidiaries and shareholdings operate in tourism. TUI AG, based in Karl-Wiechert-Allee 4, 30625 Hanover, Germany, is the TUI Group's parent company and a listed corporation under German law. The Company is registered in the commercial registers of the district courts of Berlin-Charlottenburg (HRB 321) and Hanover (HRB 6580), Germany. 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 AG are referred to as "Interim Financial Statements", the unaudited condensed consolidated income statement of TUI AG is referred to as "income statement", the unaudited condensed consolidated statement of financial position of TUI AG is referred to as "statement of financial position", the unaudited condensed consolidated statement of comprehensive income of TUI AG is referred to as "statement of comprehensive income" and the unaudited condensed consolidated statement of changes in equity of TUI AG is referred to as "statement of changes in equity".

 

The Interim Financial Statements cover the period from 1 October 2021 to 31 December 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 7 February 2022.

 

Accounting principles

Declaration of compliance

The consolidated interim financial report for the period ended 31 December 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 2021. 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. 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 31 December 2021 was ?5.1bn (as at 30 September 2021 ?5.0bn).

Net debt            
             
? million   31 Dec 2021   30 Sep 2021   Var. %
Financial debt   - 3,576.6   - 3,320.8   - 7.7
Lease liabilities   - 3,260.2   - 3,229.4   - 1.0
Cash and cash equivalents   1,649.3   1,583.9   + 4.1
Short-term interest-bearing investments   117.8   12.1   + 873.6
Net debt   -5,069.6   -4,954.2   - 2.3

 

The global travel restrictions to contain COVID-19 have had a continuous negative impact on the Group's earnings and liquidity development since the end of March 2020. To cover the resulting liquidity needs, the Group has carried out various financing measures in the financial years 2020 and 2021, which, in addition to a capital increase, the use of the banking and capital markets and cash inflows from the sale of assets, also include financing measures from the Federal Republic of Germany in the form of a KfW credit line totalling ?2.85bn, an option bond from the Economic Stabilisation Fund (WSF) totalling ?150m and two silent participations from the WSF totalling ?1.091bn. In the IFRS consolidated financial statements, the silent participations are - with exception of ?11m accumulated interest - reported as equity due to their nature and are therefore not included in the Group's net debt. The financing measures are described in detail in the annual reports for the past two financial years.

 

TUI Group's current credit facilities comprise the following

 

  • ?1.75bn credit line from 20 private banks (incl. ?215m guarantee line)
  • ?1.8bn KfW credit line from the first financing package
  • ?1.05bn KfW credit line from the second financing package
  • ?0.17bn KfW credit line and private banks (currently not all requirements for using the facility have been met yet as described below)

 

On 27 July 2021, TUI agreed with the bank consortium and KfW to extend TUI AG's revolving credit facility (RCF) and KfW credit line (both tranches) to summer 2024. TUI Group's revolving credit facilities currently total ?4.8bn. For regulatory reasons due to Brexit, the credit line of a British bank (around ?80m liquid funds and ?25m guarantee line) cannot be extended beyond summer 2022 so that thereafter the credit lines total ?4.7bn. At the same time, the term of the loan facility of ?170m was also agreed to the summer of 2024.

 

With the extension of the KfW credit lines, it was also agreed that TUI AG would use 50% of individual cash inflows exceeding ?50m by 20 July 2022, but not exceeding ?700m, e.g. from capital measures or disposals of assets or companies, to first reduce the volume of the ?170m loan facility and subsequently the KfW credit lines and repay them if utilised. The reduction is to be made for the first time on 1 April 2022. The cash inflows from the sale of Riu Hotels S.A. in financial year 2021 are excluded from this provision. After 20 July 2022, 50% of individual cash inflows in excess of ?50m must be used; there is no maximum limit.

 

The credit facility of ?170m has not been used at any time. Therefore, not all requirements for using the facility have been met yet, but this would be possible in the short term.

 

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 on the basis of 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. Already on 9 June 2021 and again upon extension of the credit lines, 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 on the first two cut-off dates before normalised limits have to be complied with from September 2023.

 

With the entry of the new shares in the commercial register on 28 October 2021 and final settlement with the participating banks on 2 November 2021, TUI AG successfully completed another capital increase. The gross issue proceeds totalled around ?1.1bn. The Group's share capital increased nominally by ?523.5m to ?1.623bn. As of April 1, 2022 the KfW facility of ?1.05bn will be reduced by around ?505m and the previously unused credit facility of ?0.17bn will be handed back, in particular due to the net proceeds from the capital increase.

 

Currently, TUI Group continues to be affected by the negative financial impact of the COVID-19 pandemic.

 

After a significant decline in the number of COVID-19 cases in summer 2021, many countries again recorded a significant increase in infections since Q1 2022, in particular due to the rapid spread of the Omicron variant. As a result, contact restriction measures have been tightened again in the affected countries. Due to the associated ongoing changes in travel restrictions, it is still not foreseeable when TUI Group's travel programme can be fully resumed. In particular, it is not possible at this stage (7 February 2022) to reliably predict how vaccination rates against the COVID-19 virus will develop in the individual countries, whether new variants of the virus will emerge and when medication for treating COVID-19 disease will be available. However, it is now foreseeable that sufficient vaccines will be available in our key source markets and destinations to ensure a continued recovery in travel in the 2022 financial year.

 

With the customer deposits received for the coming seasons, the funds from the financing measures taken in the financial year 2021 (capital increase in January 2021 and the convertible bond placed in April), the cash inflow from the sale of Riu Hotels S.A., the extension of the revolving credit facilities including the further suspension of the review of the financial covenants and the further capital increase in October 2021, the Executive Board believes that, despite the existing risks, TUI Group currently has sufficient funds, and will continue to have sufficient funds in the future, resulting both from the borrowing and from expected operating cash flows, to meet its payment obligations and to continue as a going concern in the foreseeable future. In this context, the Executive Board assumes that the credit lines expiring in summer 2024 will be refinanced. Therefore, as at 31 December 2021, the Executive Board has not identified any material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern. The Executive Board does not consider the remaining risk with regard to a further pandemic-related change in booking behaviour to be a threat to the Group's continued existence. In its assessment, the Executive Board assumes that the booking figures will gradually recover in the current 2022 financial year and that the volumes in the summer of 2022 will settle at approximately the level of the summer of 2019. For the 2023 financial year, it is expected that booking behaviour in the 2023 financial year 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 the individual countries and virus variants for which there is insufficient vaccination protection, thus affecting TUI Group'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 consolidated 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.

 

Both the recent development of the pandemic and current trading for the Summer programme have confirmed the business performance guidance provided by TUI at the end of financial year 2021. TUI therefore does not see any indication that the Group's assets may generally be impaired.

 

The accounting and measurement methods adopted in the preparation of the Interim Financial Statements as at 31 December 2021 are materially consistent with those followed in preparing the annual consolidated financial statements for the financial year ended 30 September 2021, 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 2022, TUI Group has initially applied the following standards, amended by the IASB and endorsed by the EU, on a mandatory basis:

 

Newly applied standards in financial year 2022

 

 

 

 

 

 

 

Standard

 

Applicable from

 

Amendments

 

Impact on financial statements

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
Interest Rate Benchmark Reform (Phase 2)

 

1 Jan 2021

 

The amendments relate to the provision of relief from potential consequences arising from the reform of interbank offered rates (IBORs) such as LIBOR on companies' financial reporting. They address issues that affect financial reporting when an existing interest rate benchmark is actually replaced by an alternative interest rate benchmark as a result of the interest rate benchmark reform.

 

Not material.

 

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 31 December 2021 comprised a total of 270 subsidiaries of TUI AG.

 

Development of the group of consolidated companies*
and the Group companies measured at equity

 

 

 

 

 

 

 

 

 

 

Consolidated              subsidiaries

 

Associates

 

Joint ventures

Number at 30 Sep 2021

 

272

 

18

 

27

Additions

 

-

 

-

 

-

Disposals

 

2

 

-

 

-

Sale

 

1

 

-

 

-

Merger

 

1

 

-

 

-

Change in ownership stake

 

-

 

-

 

-

Number at 31 Dec 2021

 

270

 

18

 

27

* excl. TUI AG
 

 

Acquisitions - Divestments

Acquisitions in the period under review

In Q1 2022, no companies were acquired.

 

No acquisitions were made after the reporting date.

 

Acquisitions of the prior financial year

In the prior year, no companies were acquired under IFRS 3.

 

Divestments

On 16 July 2021, a contract was signed with Grupotel S.A., a joint venture of TUI Group, to sell Nordotel S.A., fully consolidated within the Hotels & Resorts segment. Accordingly, the assets and liabilities of the disposal group were classified as 'held for sale' in August 2021. The disposal transaction was completed on 5 October 2021. The first purchase price payment of ?50.0m was made on 21 September 2021. Additional deferred purchase price payments of ?10.0m and ?20.0m are due one year or two years, respectively, after the closing of the transaction, taking account of final purchase price adjustments. The divestment of the stakes taking currency effects into account generated a preliminary profit of ?21.4m, carried in Other income.

 

Condensed balance sheet of 'Nordotel S.A.' divestment as at 5 Oct 2021

 

 

 

? million

 

 

Assets

 

 

Property, plant and equipment and intangible assets

 

65.7

Other non-current assets

 

26.8

Trade receivables

 

21.2

Other current assets

 

0.7

Cash and cash equivalents

 

2.2

 

 

116.6

 

 

 

? million

 

 

Provisions and liabilities

 

 

Trade payables

 

21.2

Touristic advance payments received

 

4.9

Other current liabilities

 

31.4

 

 

57.5

 

 

 

 

Notes to the unaudited condensed consolidated Income Statement

As a result of the partial easing of global travel restrictions, TUI Group was able to increase its business volume compared with the prior-year quarter. Nevertheless, the development of revenue and earnings in the first three months of the financial year 2022 continued to be significantly impacted by the measures 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 three months of the financial year 2022, consolidated revenue increased by ?1.9bn year-on-year to ?2.4bn.

 

External revenue allocated by destinations for the period from 1 Oct 2021 to 31 Dec 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

? million

 

Spain (incl. Canary Islands)

 

Other European destinations

 

Caribbean, Mexico, USA & Canada

 

North Africa & Turkey

 

Rest of Africa, Ind. Ocean, Asia

 

Other countries

 

Q1 2022
Revenues from contracts with customers

 

Other

 

Q1 2022 Total

Hotels & Resorts

 

91.7

 

11.7

 

50.5

 

10.9

 

33.5

 

-

 

198.3

 

-

 

198.3

Cruises

 

18.6

 

3.1

 

12.3

 

-

 

-

 

0.2

 

34.2

 

-

 

34.2

TUI Musement

 

16.4

 

22.4

 

16.9

 

3.3

 

5.4

 

1.9

 

66.3

 

-

 

66.3

Holiday experiences

 

126.7

 

37.2

 

79.7

 

14.2

 

38.9

 

2.1

 

298.8

 

-

 

298.8

Northern Region

 

245.3

 

148.6

 

143.6

 

47.3

 

63.9

 

2.7

 

651.4

 

0.8

 

652.2

Central Region

 

325.6

 

335.4

 

51.0

 

192.9

 

79.7

 

0.3

 

984.9

 

0.2

 

985.1