TUI AG The remaining ?368.1m (as at 30 September ?155.4m) subject to restrictions relate to cash and cash equivalents to be deposited due to statutory or regulatory requirements mainly in order to secure customer deposits and credit card payables. 24. Reporting segments
Revenue by segment for the period from 1 Oct 2020 to 30 Jun 2021 ? million External Group 9M 2021 Total Hotels & Resorts 157.9 124.3 282.2 Cruises 2.7 - 2.7 TUI Musement 37.5 13.7 51.2 Consolidation - - 1.4 - 1.4 Holiday Experiences 198.2 136.5 334.7 Northern Region 215.1 202.7 417.8 Central Region 707.7 62.2 769.9 Western Region 222.6 97.1 319.7 Consolidation - - 359.5 - 359.5 Markets & Airlines 1,145.5 2.4 1,147.9 All other segments 22.3 3.6 25.9 Consolidation - - 142.6 - 142.6 Total 1,365.9 - 1,365.9 Revenue by segment for the period from 1 Oct 2019 to 30 Jun 2020 ? million External Group 9M 2020 Total Hotels & Resorts 304.7 286.5 591.2 Cruises 483.6 - 483.6 TUI Musement 294.2 124.1 418.3 Consolidation - - 3.4 - 3.4 Holiday Experiences 1,082.5 407.2 1,489.7 Northern Region 2,202.2 207.2 2,409.4 Central Region 2,244.0 97.0 2,341.0 Western Region 1,095.5 118.4 1,213.9 Consolidation - - 412.3 - 412.3 Markets & Airlines 5,541.7 10.3 5,552.0 All other segments 86.2 4.7 90.9 Consolidation - - 422.2 - 422.2 Total 6,710.4 - 6,710.4
The segment data shown are based on regular internal reporting to the Executive Board. From FY 2020, the internationally more commonly used earnings measure "underlying EBIT" is used for value-based management. In FY 2020, underlying EBIT was adjusted for the earnings effect of IFRS16 ("adjusted EBIT [IAS17]") as part of internal reporting to facilitate comparability with the prior year. From the 2021 financial year, underlying EBIT (IFRS 16) is the segment performance indicator as defined by IFRS 8, the prior-year figures have been restated accordingly.
We define the EBIT in underlying EBIT as earnings before interest, income taxes and expenses from the measurement of the Group's interest rate hedging instruments. Impairment losses on goodwill are by definition included in EBIT, but are adjusted in the calculation of underlying EBIT.
For the segment performance measure, all Intra-Group leases are accounted for operating rental and leasing contracts in accordance with IAS 17.
Separately disclosed items include adjustments for income and expense items that reflect amounts and frequencies of occurrence rendering an evaluation of the operating profitability of the segments and TUI Group more difficult or causing distortions. These items include gains and losses on disposal of financial investments, significant gains and losses from the sale of assets as well as significant restructuring and integration expenses. Any effects from purchase price allocations, ancillary acquisition costs and conditional purchase price payments are adjusted. Also, any goodwill impairments would be adjusted in the reconciliation to underlying EBIT.
In 9M 2021, underlying EBIT includes results of investments accounted for using the equity method of ?-226.5m (9M 2020 ?-63.7m), primarily generated within the sector Holiday Experiences.
Underlying EBIT by segment
9M 2021 9M 2020
? million
Hotels & Resorts - 268.6 - 308.0
Cruises - 234.6 - 197.3
TUI Musement - 96.7 - 66.5
Holiday Experiences - 599.9 - 571.9
Northern Region - 708.1 - 592.4
Central Region - 377.4 - 398.7
Western Region - 247.3 - 285.9
Markets & Airlines - 1,332.8 - 1,277.0
All other segments - 45.9 - 118.0
Total - 1,978.6 - 1,966.9
Impairment on other intangible assets, property, plant and equipment and right of use assets
? million 9M 2021 9M 2020
Hotels & Resorts 29.7 149.2
Cruises - 127.6
TUI Musement - 2.6
Holiday Experiences 29.7 279.4
Northern Region 20.3 26.8
Central Region 3.3 7.0
Western Region - 26.6
Markets & Airlines 23.6 60.4
All other segments 24.1 -
Total 77.4 339.8 For further details regarding the impairments effected in 9M 2021, please refer to the section 'Property, plant and equipment' and 'Right of use assets'.
Reconciliation to underlying EBIT of TUI Group ? million 9M 2021 9M 2020 Earnings before income taxes - 2,390.7 - 2,367.7 plus: Net interest expense (excluding expense / income from measurement of interest hedges) 336.7 173.6 plus / less: Expense (income) from measurement of interest hedges 7.4 - 7.9 EBIT - 2,046.6 - 2,202.0 Adjustments: plus: Separately disclosed items 43.5 194.9 plus: Expense from purchase price allocation 24.4 40.2 Underlying EBIT - 1,978.6 - 1,966.9
Net expenses for the separately disclosed items of ?43.5m in the first nine months of financial year 2021 include income of ?53m from the reversal of restructuring provisions no longer required in the Central Region due to the lower than expected reduction in fleet size at TUIfly. In addition, restructuring expenses of ?89m were incurred in TUI Musement (?11m), Northern Region (?12m), Central Region (?8m), Western Region (?18m) and All other segments (?40m). Furthermore, disposal results from the sale of an investment in an aircraft asset company in Northern Region (-?2m) and Central Region (-?1m), the sale of two hotel companies in Hotels & Resorts (-?5m) and in Western Region (?2m) as well as an expense from a subsequent purchase price adjustment of ?2m in All other segments were adjusted.
Net expenses for the separately disclosed items of ?195m in the first nine months of the previous year included a disposal gain of ?90m from the sale of the German specialist tour operators, offset by restructuring expenses of ?209m, related in particular to the planned capacity reduction at TUI fly Deutschland, a restructuring of TUI France, an expansion of the existing restructuring programme at TUI Deutschland, the planned closure of 166 travel agencies in the UK, restructuring of the TUI Musement segment and the closure of TUI Italy as well as other one-off items of ?8m. Furthermore, ?68m impairments of goodwill related to the Northern Hotels and TUI Blue hotel companies was adjusted for.
Expenses for purchase price allocations of ?24.4m (previous year ?40.2m) relate in particular to the scheduled amortization of intangible assets from acquisitions made in previous years. 25. Related parties
Apart from the subsidiaries included in the Interim Financial Statements, TUI AG, in carrying out its ordinary business activities, maintains direct and indirect relationships with related parties. All transactions with related parties were executed on an arm's length basis.
As at 30 June 2021, Unifirm Limited, Cyprus, held 32.0% of the shares in TUI AG (as at 30 September 2020 24.9%). Unifirm Limited is controlled by the family of Russian entrepreneur Alexei Mordashov, a member of TUI's Supervisory Board. DH Deutsche Holdings Limited, a company registered in Cyprus under the control of the joint venture partner Hamed El Chiaty, decreased its equity stake to below 3.0% in H1 2021. More detailed information on related parties is provided under section 24 in the Notes to the consolidated financial statements for 2020. 26. Significant transactions after the balance sheet date
On 6 July 2021, TUI AG increased its convertible bond of ?400m, which was issued in April 2021, by ?189.6m. The new bonds form a single series with the existing bonds. The terms remain unchanged. The senior unsecured convertible bonds are due on 16 April 2028 and have a coupon of 5.00% p.a., payable semi-annually. The denomination of the bond was ?100,000. The initial conversion price was set at an amount of ?5.3631 per share.
On 27 July 2021 TUI AG agreed with the private banks and KfW to extend the maturity of ?4.7bn of the revolving credit facilities until July 2024. For further details please refer to the going concern reporting.
On 31 July 2021 the disposal of the joint venture RIU Hotels S.A. was completed. For further details please refer to the section 'Assets held for sale'.
Responsibility statement
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