DJ TUI AG: 1st Quarter Results
TUI AG (TUI)
TUI AG: 1st Quarter Results
11-Feb-2020 / 07:00 CET/CEST
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QUARTERLY STATEMENT Q1 2020
TUI Group - financial highlights
EUR million Q1 2020 Q1 2019 Var. % Var. %
adjusted constant
currency
Turnover 3,850.8 3,574.8 + 7.7 + 6.8
Underlying EBIT1
Hotels & Resorts 35.1 69.2 - 49.3 - 41.3
Cruises 48.8 47.0 + 3.8 + 3.6
Destination Experiences - 8.9 - 4.8 - 85.4 - 93.8
Holiday Experiences 75.0 111.4 - 32.7 - 28.2
Northern Region - 105.8 - 62.8 - 68.5 - 72.6
Central Region - 28.9 - 32.7 + 11.6 + 3.7
Western Region - 63.2 - 60.5 - 4.5 - 5.5
Markets & Airlines - 197.9 - 156.0 - 26.9 - 30.6
All other segments - 24.0 - 38.6 + 37.8 + 35.8
TUI Group - 146.9 - 83.1 - 76.8 - 78.8
EBIT1 - 78.0 - 106.0 + 26.4
Underlying EBITDA2 111.5 27.2 +
309.9
EBITDA2 189.8 12.3 n. a.
Net loss for the period - 105.5 - 112.1 + 5.9
Earnings per shareEUR - 0.22 - 0.24 + 8.3
Equity ratio3 (31 Dec)% 21.7 26.9 - 5.1
Net capex and investments 60.7 294.8 - 79.4
Net financial position (31 - 5,072.2 - 1,832.0 -
Dec) 176.9
Employees (31 Dec) 56,448 57,877 - 2.5
Differences may occur due to rounding.
This Quarterly Statement of the TUI Group was prepared for the reporting
period Q1 FY20 from 1 October 2019 to 31 December 2019. The TUI Group
applied IFRS 16 from 1 October 2019. Prior year figures were not adjusted.
Since the beginning of this financial year, the items of the profit and loss
statement of the aircraft leasing companies holding the
TUI Group's aircraft and subletting them within the Group have been fully
allocated to the airlines using the respective aircraft
(Northern Region, Central Region and Western Region). In the first quarter
of the previous year, the aircraft leasing companies were
fully included in All other segments, while in the 2019 Annual Report, the
result from intra-Group subleasing was already allocated to
the respective airlines (Northern Region, Central Region and Western
Region). The prior-year figures have been adjusted accordingly.
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 12.
2 EBITDA is defined as earnings before interest, income taxes, goodwill
impairment and amortisation and write-downs of other intangible assets,
depreciation and write-downs of property, plant and equipment, investments
and current assets.
3 Equity divided by balance sheet total in %, variance is given in
percentage points.
Q1 2020 Summary
· Our first quarter of the new financial year saw improved booking trends
for our Winter programme, driving a good underlying result in our Markets
& Airlines business. Excluding the effects of the continued Boeing 737 Max
grounding and the non-repeat of a hedging gain from prior year, underlying
EBIT for Markets & Airlines improved by 14 % versus prior year.
· Holiday Experiences saw a weaker result for this first quarter, with
improved occupancy and average revenues at Hotels & Resorts offset by
higher cost base and FX losses from the devaluation of Turkish Lira.
Additionally there were higher IMO2020 fuel costs for our Cruise business
and accelerated investments in our new digital platform in Destination
Experiences as anticipated, eroding contribution in the quarter.
· The grounding of the Boeing 737 Max aircraft incurred replacement costs
of EUR 45 m across Markets & Airlines. The segment also saw a headwind
of EUR 29 m from the non-repeat of a hedging gain reported in Q1 of the
prior year.
· Provided the current strong trading trends for our Markets & Airlines
business continue, we are now expecting a high single digit percentage
turnover growth (previously: mid to high single digit percentage growth).
On the basis of our guidance range as set out in December 2019, assuming a
return service of the Boeing 737 Max by end of April 2020, this would have
corresponded to the upper end of an underlying EBIT range of approx. EUR
950 m - EUR 1,050 m, already including an approx. EUR 130 m cost
impact for the 737 Max grounding. In light of the recent official release
from Boeing, we instead now have secured replacement capacity for the
entire FY20 in accordance with the second scenario as presented in our
December guidance. However, we have been able to narrow the range of the
additional cost for a full FY20 grounding of the 737 Max from approx.
EUR 220 m - EUR 270 m to approx. EUR 220 m - EUR 245 m. Moreover,
these additional Boeing costs did not have to be fully reflected in our
updated guidance range as we now expect to partly offset this impact based
on the current strong trading trends for our Markets & Airlines (as set
forth above), by mitigating factors such as cost measures and because we
have now included a certain level of compensation from Boeing. As before,
the guidance range also includes a mid to high double-digit millions
investment in digital platform growth. Based on this, we update our
guidance range and now expect an underlying EBIT range of approx. EUR
850 m to EUR 1,050 m.1
· Against a changing market environment, we will continue to focus and
deliver on our four strategic initiatives as detailed at our FY19
full-year results.
· Our ongoing transformation strategy towards becoming a more digital
tourism platform business remains our priority.
1 Based on constant currency, pro-forma IAS 17 basis and pre TUI Cruises
acquisition of Hapag-Lloyd Cruises
Q1 results at a glance
EUR million Q1 FY20
Underlying EBIT Q1 FY19 - 83
Holiday Experiences - 32
Markets & Airlines + 26
All other segments + 14
Special items
Markets & Airlines Prior year: Hedging gain - 29
(Northern Region)
Underlying EBIT Q1 FY20 at constant currency (IAS - 104
17),
excluding Boeing 737 Max grounding
Markets & Airlines Current year: Boeing 737 Max - 45
grounding
Underlying EBIT Q1 FY20 at constant currency (IAS - 149
17)
Foreign exchange translation + 1
Underlying EBIT Q1 FY20 at actual rates (IAS 17) - 148
IFRS 16 impact + 1
Underlying EBIT Q1 FY20 at actual rates (IFRS 16) - 147
Outlook and Expected Development
FY20 in terms of booking trends has started exceptionally well, with the UK
delivering its best bookings volume month in the company's history. We are
pleased with customer booking development to date for both programmes
however the Boeing 737 Max grounding continues to weigh on our operational
performance, with an extended grounding now expected for the rest of the
financial year. We will continue to focus and deliver on our four strategic
initiatives as outlined in our FY19 full-year results update; progress of
our initiatives and our Markets and Domains Transformation Programme are on
track.
For our Hotels & Resorts business, as indicated at our FY19 full-year
results, we plan to grow this segment through both asset-right and
asset-light approaches. We currently have 17 hotel openings planned for the
year, with a number in our key brands Riu and Robinson through an
asset-right approach. For our flagship leisure brand TUI Blue, we plan
expand to almost 100 hotels through asset-light re-positioning of our
existing hotel portfolio. During Q1, one new TUI Blue hotel was opened and
nine re-positioned.
On 7 February 2020, we announced the acquisition of Hapag-Lloyd Cruises by
TUI Cruises, our cruise joint venture partnership with Royal Caribbean. The
transaction will create a solid financial base with which to facilitate and
accelerate the international growth of Hapag-Lloyd Cruises, delivering
increased profitability and synergies in the mid-term. We expect the
transaction to generate net cash consideration of approximately EUR 700 m
(including an earn-out element of EUR 63 m, payable upon Hapag-Lloyd
Cruises delivering its FY20 budget EBIT). The transaction is expected to
generate a considerable book gain and is still subject to the customary
closing conditions and certain regulatory approvals and is expected to
complete in Summer 2020.
As previously indicated in December, TUI Cruises is likely to see limited
yield growth for FY20 as a result of the strong increase in cruise capacity
in the prior year. For Marella, cost inflation remains above pricing growth
achieved to date and we continue to expect full-year cost base increases
from IMO2020 fuel regulations and adverse FX effects to fully offset the
annualisation benefit of Marella Explorer 2. Hapag-Lloyd will benefit from
the annualisation of Hanseatic nature and launch of Hanseatic inspiration.
In Destination Experiences, in line with our strategic initiatives to build
and grow TUI's ecosystem, we will flexibly accelerate our opex investment in
our digital platform Musement. We expect to increase the number of tours and
activities offered and to expand our 3rd party distribution. Alongside, we
will also flexibly invest in the growth of our GDN-OTA platform (within All
other segments), in line with our strategic initiatives.
Markets & Airlines bookings for Winter 2019 / 20 are up 3 %2 on prior year
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DJ TUI AG: 1st Quarter Results -2-
against a flat capacity year on year, with average selling price up 6 % and
83 %2 of the programme sold to date, in line with prior year. For Summer
2020, 36 %2 of the programme has been booked to date, 2 % ahead of prior
year. Bookings are up 14 %2, slightly ahead of our capacity increase, with
average selling price up 3 %2, which is broadly in line with expected cost
inflation for Summer 2020.
2 These statistics are up to 2 February 2020, shown on a constant currency
basis and relate to all customers whether risk or non-risk
We are pleased with the current development of our Markets & Airlines
business, with exceptional booking trends following the insolvency of a key
competitor, building on our market share growth as envisaged.
With regard to the UK's exit from the EU as of 31 January 2020, a main
concern remains whether our airlines will continue to have full access to EU
airspace after the transition period. We are continuing to address the
importance of there being a special and comprehensive agreement for aviation
between the EU and the UK post Brexit to protect consumer choice with the
relevant UK and EU decision makers. We follow the political negotiations
closely and continue to develop scenarios and mitigation strategies for
various outcomes, including the potential exit of the UK from the EU on 31
December 2020 without a comprehensive free trade agreement, with a focus to
alleviating potential impacts from Brexit for the Group.
Consolidated earnings
Turnover
EUR million Q1 2020 Q1 2019 Var. %
adjusted
Hotels & Resorts 166.2 139.3 + 19.3
Cruises 238.4 190.5 + 25.2
Destination Experiences 216.7 158.3 + 36.9
Holiday Experiences 621.4 488.1 + 27.3
Northern Region 1,220.3 1,100.4 + 10.9
Central Region 1,354.6 1,290.3 + 5.0
Western Region 594.8 543.1 + 9.5
Markets & Airlines 3,169.8 2,933.8 + 8.0
All other segments 59.6 153.0 - 61.0
TUI Group 3,850.8 3,574.8 + 7.7
TUI Group (IAS 17, at constant 3,818.7 3,574.8 + 6.8
currency)
Underlying EBIT
EUR million Q1 2020 Q1 2019 Var. %
adjusted
Hotels & Resorts 35.1 69.2 - 49.3
Cruises 48.8 47.0 + 3.8
Destination Experiences - 8.9 - 4.8 - 85.4
Holiday Experiences 75.0 111.4 - 32.7
Northern Region - 105.8 - 62.8 - 68.5
Central Region - 28.9 - 32.7 + 11.6
Western Region - 63.2 - 60.5 - 4.5
Markets & Airlines - 197.9 - 156.0 - 26.9
All other segments - 24.0 - 38.6 + 37.8
TUI Group - 146.9 - 83.1 - 76.8
TUI Group (IAS 17, at constant - 148.6 - 83.1 - 78.8
currency)
EBIT
EUR million Q1 2020 Q1 2019 Var. %
adjusted
Hotels & Resorts 35.1 69.1 - 49.2
Cruises 48.8 47.0 + 3.8
Destination Experiences - 13.6 - 9.6 - 41.7
Holiday Experiences 70.3 106.6 - 34.1
Northern Region - 109.9 - 77.7 - 41.4
Central Region 54.4 - 33.8 n. a.
Western Region - 66.4 - 61.2 - 8.5
Markets & Airlines - 121.8 - 172.7 + 29.5
All other segments - 26.5 - 39.9 + 33.6
TUI Group - 78.0 - 106.0 + 26.4
Segmental performance
Holiday Experiences
EUR million Q1 2020 Q1 2019 Var. %
adjusted
Turnover 621.4 488.1 + 27.3
Underlying EBIT 75.0 111.4 - 32.7
Underlying EBIT (IAS 17, at constant 80.0 111.4 - 28.2
currency)
Hotels & Resorts
Q1 2020 Q1 2019 Var. %
adjusted
Total turnover in EUR million 328.6 313.5 + 4.8
Turnover in EUR million 166.2 139.3 + 19.3
Underlying EBIT in EUR million 35.1 69.2 - 49.3
Underlying EBIT (IAS 17, at constant 40.6 69.2 - 41.3
currency) in EUR million
Capacity hotels total1 in '000 9,526 9,135 + 4.3
Riu 4,390 4,415 - 0.6
Robinson 741 677 + 9.4
Blue Diamond 1,150 949 + 21.2
Occupancy rate hotels total2 in %, 77 76 + 1
variance in % points
Riu 83 82 + 1
Robinson 72 71 + 1
Blue Diamond 76 74 + 2
Average revenue per bed hotels total3 68 65 + 3.8
in EUR
Riu 66 65 + 2.2
Robinson 93 88 + 5.6
Blue Diamond 112 113 - 0.7
Turnover measures include fully consolidated companies, all other KPIs incl.
companies measured at equity
1 Group owned or leased hotel beds multiplied by opening days per quarter
2 Occupied beds divided by capacity
3 Arrangement revenue divided by occupied beds
· Hotels & Resorts delivered both occupancies and rate up on prior year.
Against strong comparables, earnings in this low volume quarter were
however firstly offset by a EUR 6 m adverse impact from the revaluation
of Euro loan balances in our Turkish hotel entities. This, combined with
reduced winter capacity at Riu, higher winter costs from an expanded
portfolio in Other hotels, and a EUR 4 m charge from IFRS 9 financial
instruments revaluation, led to underlying EBIT (IAS 17, at constant
currency rates) decreasing by EUR 29 m as a result.
· Occupancy for the segment remained high at 77 %, up 1 % ppt versus prior
year reflecting the continued demand for our brands and benefit of our
integrated business model. Average revenue per bed increased by 4 % to
EUR 68.
· 12 new hotels were opened in the quarter in both year-round city and sun
and beach destinations.
· Riu saw occupancy increasing 1 %ppt to 83 %, and average revenue per bed
increasing by 2 % to EUR 66 versus prior year. Overall contribution for
the quarter was however lower, reflecting the reduced winter capacity. Riu
opened two new hotels in the quarter in Morocco and San Francisco.
· Robinson earnings grew versus prior year, benefitting from last year's
re-opening of a flagship club in Fuerteventura post major renovation and
inclusion of the full EBIT contribution of a Turkish club which was
formerly consolidated at equity. Average revenue per bed increased 6 % to
EUR 93 with the return of demand for Turkish clubs helping to deliver
higher pricing. A new Robinson Club was opened in Cape Verde in the
quarter.
· Blue Diamond earnings decreased in the quarter partially as a result of
higher depreciation. The portfolio benefited from winter demand for the
Caribbean however, with occupancy growing 3 %ppts to 76 % with average
rate broadly in line with prior year.
Cruises
Q1 2020 Q1 2019 Var. %
adjusted
Turnover1 in EUR million 238.4 190.5 + 25.1
Underlying EBIT in EUR million 48.8 47.0 + 3.8
Underlying EBIT (IAS 17, at constant 48.7 47.0 + 3.6
currency) in EUR million
Occupancy in %, variance in % points
TUI Cruises 98 100 - 2
Marella Cruises 98 102 - 4
Hapag-Lloyd Cruises 74 75 - 1
Passenger days in '000
TUI Cruises 1,598 1,372 + 16.5
Marella Cruises 781 704 + 10.9
Hapag-Lloyd Cruises 88 71 + 23.3
Average daily rates2 in EUR
TUI Cruises 144 149 - 3.3
Marella Cruises3 143 137 + 4.2
Hapag-Lloyd Cruises 560 591 - 5.2
1 No turnover is carried for TUI Cruises as the joint venture is
consolidated at equity
2 Per day and passenger
3 Inclusive of transfers, flights and hotels due to the integrated nature of
Marella Cruises, in GBP
· The Cruises underlying EBIT result increased by EUR 2 m in the
quarter, with annualisation benefits from three new ships launched during
the course of FY19, mostly offset by higher cost base principally from the
impact of IMO2020 fuel regulations and adverse FX effects, which could not
be fully recovered through pricing.
· TUI Cruises' earnings increased due to the annualisation benefit of the
new Mein Schiff 2 launched in February 2019, although average daily rates
decreased in the quarter as a result of route mix.
· Marella Cruises' overall earnings, as expected, decreased due to a
higher cost base not fully recovered, combined with lower occupancies from
slower winter rates of sale and itinerary disruption. The average daily
rate increased due to higher pricing of our newer fleet in the quarter.
Itinerary disruption in the Middle East and operational disruption in Asia
cost EUR 2 m in the quarter.
· Hapag-Lloyd Cruises' earnings were muted due to strong comparables in
the prior year, dry dock costs for Europa and launch costs for Hanseatic
inspiration in the quarter, partially offset by good trading of new
expedition ships.
Destination Experiences
EUR million Q1 2020 Q1 2019 Var. %
adjusted
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Total turnover 305.5 226.3 + 35.0
Turnover 216.7 158.3 + 36.9
Underlying EBIT - 8.9 - 4.8 - 85.4
Underlying EBIT (IAS 17, at constant - 9.3 - 4.8 - 93.8
currency)
· The Destination Experiences underlying EBIT decreased by EUR 4 m in
the quarter, driven by the accelerated investment in our new digital
platform Musement, in line with our guidance given at FY19 full-year
results, and increased cost in our destinations to support the strong
customer growth.
· The number of excursions, activities and tickets grew by 17 % versus
prior year, reflecting the benefit of our integrated model and the
continued growth of our acquisitions.
Markets & Airlines
Q1 2020 Q1 2019 Var. %
adjusted
Turnover in EUR million 3,169.8 2,933.8 + 8.0
Underlying EBIT in EUR million - 197.9 - 156.0 - 26.9
Underlying EBIT (IAS 17, at constant - 203.8 - 156.0 - 30.6
currency) in EUR million
Direct distribution mix1, 3 in %, 72 73 - 1
variance in % points
Online mix2, 3 in %, variance in % 48 48 -
points
Customers3 in '000 3,776 3,602 + 4.8
1 Share of sales via own channels (retail and online)
2 Share of online sales
3 Like-for-like basis excluding disposed entities Berge & Meer and Boomerang
· The grounding of the Boeing 737 Max aircraft led to a cost of EUR 45 m
across our Markets & Airlines business in the quarter, against a prior
year which was clear of any Boeing 737 Max grounding costs.
· Excluding the one-off effects of the Boeing 737 Max grounding and prior
year hedging gain of EUR 29 m, underlying EBIT (IAS 17, at constant
currency) for Markets & Airlines increased by 14 % versus prior year.
· Post the insolvency of a key competitor, we have seen a clear uplift in
bookings in the first quarter as many customers turned to TUI to rebook
their holidays, particularly in the UK. We have subsequently added new
capacity to both our Winter 2019 / 20 and Summer 2020 programme to
accommodate the increased volume.
Northern Region
Q1 2020 Q1 2019 Var. %
adjusted
Turnover in EUR million 1,220.3 1,100.4 + 10.9
Underlying EBIT in EUR million - 105.8 - 62.8 - 68.5
Underlying EBIT (IAS 17, at constant - 108.4 - 62.8 - 72.6
currency) in EUR million
Direct distribution mix1 in %, 91 93 - 2
variance in % points
Online mix2 in %, variance in % 65 67 - 2
points
Customers in '000 1,269 1,237 + 2.6
1 Share of sales via own channels (retail and online)
2 Share of online sales
· Northern Region customer numbers increased by 3 % compared with prior
year, with underlying EBIT (IAS 17, at constant currency rates) declining
by EUR 46 m versus prior year, predominantly as a result of the Boeing
737 Max grounding which incurred a total cost of EUR 24 m for the
region. The prior year's figure included a EUR 29 m hedge gain.
Excluding these one-off items, underlying EBIT (IAS 17, at constant
currency) for the region improved by 12 % versus prior year.
· In the UK, customer numbers grew 3 %, well ahead of winter capacity
increases, helped by the insolvency of one of our key competitors. The
grounding of the Boeing 737 Max aircraft incurred costs of EUR 16 m for
the UK.
· In the Nordics, volumes were up 2 % versus prior year, helped by weaker
comparables in the prior year, delivering increased earnings on an
including Boeing 737 Max costs basis. The grounding of the Boeing 737 Max
aircraft incurred costs of EUR 4 m for the Nordics.
· The share of earnings for Canada increased in the quarter on an
including Boeing 737 Max costs basis. The grounding of the Boeing 737 Max
aircraft incurred costs of EUR 4 m in the period.
Central Region
Q1 2020 Q1 2019 Var. %
adjusted
Turnover in EUR million 1,354.6 1,290.3 + 5.0
Underlying EBIT in EUR million - 28.9 - 32.7 + 11.6
Underlying EBIT (IAS 17, at constant - 31.5 - 32.7 + 3.7
currency) in EUR million
Direct distribution mix1, 3 in %, 51 52 - 1
variance in % points
Online mix2, 3 in %, variance in % 21 22 - 1
points
Customers3 in '000 1,423 1,339 + 6.3
1 Share of sales via own channels (retail and online)
2 Share of online sales
3 Like-for-like basis excluding disposed entities Berge & Meer and Boomerang
· Central region delivered improved underlying EBIT result on an including
Boeing 737 Max basis, highlighting the good operational performance in the
quarter. The grounding of the Boeing 737 Max aircraft incurred costs of
EUR 6 m for the Central region.
· Central Region customer volumes increased by 6 %. Whilst Germany was
broadly in line with prior year, growth was driven by Poland which
continues to see market share gains.
Western Region
Q1 2020 Q1 2019 Var. %
adjusted
Turnover in EUR million 594.8 543.1 + 9.5
Underlying EBIT in EUR million - 63.2 - 60.5 - 4.5
Underlying EBIT (IAS 17, at constant - 63.8 - 60.5 - 5.5
currency) in EUR million
Direct distribution mix1 in %, 76 76 -
variance in % points
Online mix2 in %, variance in % 61 59 + 2
points
Customers in '000 1,084 1,026 + 5.7
1 Share of sales via own channels (retail and online)
2 Share of online sales
· The grounding of the Boeing 737 Max aircraft incurred costs of EUR 15
m for the Western region. Excluding this effect, underlying EBIT improved,
reflecting the good customer volume growth across Benelux.
· Overall Western region customer volumes increased by 6 %, with strong
increases in both Netherlands and Belgium, partially offset by volume
declines in France.
All other segments
EUR million Q1 2020 Q1 2019 Var. %
adjusted
Turnover 59.6 153.0 - 61.0
Underlying EBIT - 24.0 - 38.6 + 37.8
Underlying EBIT (IAS 17, at constant - 24.8 - 38.6 + 35.8
currency)
· The result for All other segments improved primarily due to
non-inclusion of Corsair winter losses.
Cash flow / Net capex and investments / Net debt
The cash outflow from operating activities decreased by EUR 199.1 m to
EUR 1,381.1 m. EUR 172.1 m of this is due to the fact that, as of this
financial year, lease payments which were previously included in the
operating cash flow are now included in the cash flow from financing
activities as interest and repayments of liabilities in accordance with IFRS
16.
Net financial position
EUR million 31 Dec 2019 31 Dec 2018 Var. %
Financial debt 2,035.7 2,761.5 - 26.3
thereof Finance leases (IAS 17) - 1,365.5 n. a.
Finance lease liabilities (IFRS 3,917.5 - n. a.
16)
Cash and cash equivalents 866.1 919.7 - 5.8
Short-term interest-bearing 14.9 9.8 + 52.0
investments
Net debt - 5,072.2 - 1,832.0 - 176.9
In the wake of the first-time application of IFRS 16, the definition of the
TUI Group's net financial position for FY20 was adjusted. The liabilities
from finance leases pursuant to IAS 17 previously included in financial
liabilities will be carried as lease liabilities in accordance with IFRS 16
together with the obligations from leases classified as operating leases
under IAS 17 as of FY20. The previous year was not adjusted. Taking this
change of presentation into account, the net debt of continuing operations
as of 31 December 2019 increased by EUR 3,240.2 m to EUR 5,072.2 m.
Net capex and investments
EUR million Q1 2020 Q1 2019 Var. %
adjusted
Cash gross capex
Hotels & Resorts 72.7 79.1 - 8.2
Cruises 39.3 146.2 - 73.1
Destination Experiences 3.5 2.0 + 73.3
Holiday Experiences 115.4 227.3 - 49.2
Northern Region 15.7 10.7 + 45.7
Central Region 6.4 6.0 + 6.6
Western Region 8.0 11.3 - 28.7
Markets & Airlines* 31.5 33.7 - 6.7
All other segments 17.7 16.1 + 10.0
TUI Group 164.6 277.1 - 40.6
Net pre delivery payments on aircraft - 60.0 - 32.0 - 87.5
Financial investments 10.0 61.4 - 83.7
Divestments - 53.8 - 11.7 - 359.8
Net capex and investments 60.7 294.8 - 79.4
* Including EUR 1.4 m (previous year: EUR 5.7 m) cash gross capex of the
aircraft leasing companies, which - in contrast to the items of the income
statement - are allocated to Markets & Airlines as a whole, but not to the
individual segments Northern Region, Central Region and Western Region.
The year-on-year decline in net capex and investments in Q1 FY20 was mainly
driven by the acquisition of the Marella Explorer 2 and the online platform
Musement, which was included in the previous year's figure. The increase in
divestments compared to last year was due to the sale of two German
specialist tour operators in Q1 FY20.
Foreign exchange / Fuel
Our strategy of hedging the majority of our jet fuel and currency
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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
% Winter 2019 / 20 Summer 2020
Euro 97 88
US Dollars 97 89
Jet Fuel 98 92
As at 6 February 2020
Income statement
Income statement of the TUI Group for the period from 1 Oct
2019 to 31 Dec 2019
EUR million Q1 2020 Q1 2019 Var. %
adjusted
Turnover 3,850.8 3,574.8 + 7.7
Cost of sales 3,771.2 3,484.1 + 8.2
Gross profit 79.6 90.7 - 12.2
Administrative expenses 282.5 267.4 + 5.6
Other income 93.5 5.5 n. a.
Other expenses 5.3 1.3 + 307.7
Impairment of financial assets 4.4 - 4.0 n. a.
Financial income 19.9 47.9 - 58.5
Financial expenses 69.8 49.6 + 40.7
Share of result of joint ventures 38.7 34.8 + 11.2
and associates
Earnings before income taxes - 130.3 - 135.4 + 3.8
Income taxes - 24.8 - 23.3 - 6.4
Result from continuing operations - 105.5 - 112.1 + 5.9
Group loss for the year - 105.5 - 112.1 + 5.9
Group loss for the quarter - 128.7 - 139.3 + 7.6
attributable to shareholders of
TUI AG
Group profit for the quarter 23.2 27.2 - 14.7
attributable to non-controlling
interest
Cash flow statement
Condensed cash flow statement of the TUI Group
EUR million Q1 2020 Q1 2019
Cash outflow from operating activities - 1,381.1 - 1,580.2
Cash outflow from investing activities - 41.9 - 284.7
Cash inflow from financing activities 492.4 232.2
Net change in cash and cash equivalents - 930.7 - 1,632.7
Change in cash and cash equivalents due to 51.7 4.4
exchange rate fluctuation
Cash and cash equivalents at beginning of 1,747.6 2,548.0
period
Cash and cash equivalents at end of period 868.7 919.7
of which included in the balance sheet as 2.6 -
assets held for sale
Financial position
Financial position of the TUI Group as at 31 Dec 2019
EUR million 31 Dec 2019 30 Sep
2019
Assets
Goodwill 3,012.8 2,985.8
Other intangible assets 706.8 710.6
Property, plant and equipment 4,490.5 5,840.4
Right-of-Use assets 3,910.8 -
Investments in joint ventures and 1,539.9 1,507.6
associates
Trade and other receivables 93.3 60.9
Derivative financial instruments 24.5 43.9
Other financial assets 43.8 43.0
Touristic prepayments 148.0 183.7
Other non-financial assets 398.4 369.9
Income tax assets 9.1 9.6
Deferred tax assets 166.2 202.0
Non-current assets 14,544.0 11,957.4
Inventories 124.5 114.7
Trade and other receivables 834.5 876.5
Derivative financial instruments 174.9 303.8
Other financial assets 14.9 31.1
Touristic prepayments 1,026.2 908.7
Other non-financial assets 156.5 131.5
Income tax assets 170.2 155.7
Cash and cash equivalents 866.1 1,741.5
Assets held for sale 19.2 50.0
Current assets 3,387.0 4,313.5
17,931.0 16,270.9
Financial position of the TUI Group as at 31 Dec 2019
EUR million 31 Dec 2019 30 Sep 2019
Equity and liabilities
Subscribed capital 1,505.8 1,505.8
Capital reserves 4,207.5 4,207.5
Revenue reserves - 2,548.5 - 2,259.4
Equity before 3,164.9 3,453.9
non-controlling interest
Non-controlling interest 733.5 711.4
Equity 3,898.4 4,165.3
Pension provisions and 1,052.0 1,035.6
similar obligations
Other provisions 772.9 775.0
Non-current provisions 1,824.9 1,810.6
Financial liabilities 1,734.9 2,457.6
Lease liabilities 3,117.9 -
Derivative financial 50.4 59.1
instruments
Other financial 18.1 18.8
liabilities
Other non-financial 96.4 100.1
liabilities
Income tax liabilities 75.0 70.9
Deferred tax liabilities 123.0 233.5
Non-current liabilities 5,215.6 2,940.0
Non-current provisions and 7,040.6 4,750.6
liabilities
Pension provisions and 32.0 32.4
similar obligations
Other provisions 325.9 361.9
Current provisions 357.9 394.3
Financial liabilities 300.9 224.6
Lease liabilities 799.6 -
Trade payables 1,692.5 2,873.9
Derivative financial 217.0 157.1
instruments
Other financial 201.4 89.6
liabilities
Touristic advance payments 2,864.8 2,911.2
received
Other non-financial 470.9 519.3
liabilities
Income tax liabilities 65.0 81.9
Current liabilities 6,612.0 6,857.6
Liabilities related to 22.1 103.1
assets held for sale
Current provisions and 6,992.0 7,355.0
liabilities
17,931.0 16,270.9
Alternative performance measures
From FY20, we will be using the indicator 'Underlying EBIT', which is more
common in the international sphere, for our management system. Underlying
EBITA will therefore no longer be used as a KPI. We define the EBIT in
underlying EBIT as earnings before interest, taxes and result of the
measurement of the Group's interest hedges. Unlike the previous KPI EBITA,
EBIT by definition includes impairments of goodwill.
One-off items carried here include adjustments for income and expense items
that reflect amounts and frequencies of occurrence rendering an evaluation
of the operating profitability of the segments and the Group more difficult
or causing distortions. These items include gains on disposal of financial
investments, significant gains and losses from the sale of assets as well as
significant restructuring and integration expenses. Any effects from
purchase price allocations, ancillary acquisition costs and conditional
purchase price payments are adjusted. Also, any goodwill impairments would
be adjusted in the reconciliation to underlying EBIT.
The table below shows the reconciliation of earnings before tax from
continuing operations to underlying earnings.
Reconciliation to underlying EBIT
EUR million Q1 2020 Q1 2019 Var. %
adjusted
Earnings before income taxes - 130.3 - 135.4 + 3.8
plus: Net interest expense 52.0 27.5 + 89.1
plus: Expense from the measurement 0.2 1.9 - 89.5
of interest hedges
EBIT - 78.0 - 106.0 + 26.4
plus: Separately disclosed items - 79.4 13.7
plus: Expense from purchase price 10.5 9.2
allocation
Underlying EBIT - 146.9 - 83.1 - 76.8
In Q1 FY20, separately disclosed items included a gain of disposal of EUR
91.4 m of the German specialist tour operators partly offset by
restructuring costs in Destination Experiences, Central Region and Western
Region. In the prior year quarter in addition to purchase price allocations,
one-off payments in connection with the conversion of the pension plan in
the UK to a defined contribution plan were adjusted for.
The TUI Group's operating loss adjusted for special items increased by EUR
63.8 m to EUR 146.9 m in Q1 FY20.
Key figures of income statement
EUR million Q1 2020 Q1 2019 Var. %
adjusted
EBITDAR 210.6 188.9 + 11.5
Operating rental expenses 20.8 176.6 - 88.2
EBITDA 189.8 12.3 n. a.
Depreciation / amortisation less 267.8 118.3 + 126.4
reversals of depreciation*
EBIT - 78.0 - 106.0 + 26.4
Expense from the measurement of 0.2 1.9 - 89.5
interest hedges
Net interest expense 52.0 27.5 + 89.1
EBT - 130.3 - 135.4 + 3.8
* On property, plant and equipment, intangible asssets, financial and other
assets
Other segment indicators
Underlying EBITDA
EUR million Q1 2020 Q1 2019 Var. %
adjusted
Hotels & Resorts 83.8 94.7 - 11.5
Cruises 79.0 66.7 + 18.4
Destination Experiences - 2.7 - 0.9 - 200.0
Holiday Experiences 160.1 160.4 - 0.2
Northern Region - 25.6 - 38.8 + 34.0
Central Region 6.7 - 21.8 n. a.
Western Region - 17.5 - 49.5 + 64.6
Markets & Airlines - 36.4 - 110.1 + 66.9
All other segments - 12.2 - 23.2 + 47.4
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