TUI AG (TUI)
TUI AG: Annual Financial Report - Part 2
06-Dec-2023 / 08:00 CET/CEST
The issuer is solely responsible for the content of this announcement.
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Financial Highlights
TUI Group - financial highlights
2022 Var. %
EUR million 2023 adjusted Var. % at constant
currency
Revenue 20,665.9 16,544.9 + 24.9 + 25.8
Underlying EBIT 1
Hotels & Resorts 549.5 480.3 + 14.4 + 15.9
Cruises 236.0 0.8 n. a. n. a.
TUI Musement 36.0 23.7 + 51.7 + 86.9
Holiday Experiences 821.5 504.7 + 62.8 + 65.8
Northern Region 71.5 - 101.6 n. a. n. a.
Central Region 88.1 74.6 + 18.1 + 13.9
Western Region 81.1 - 31.5 n. a. n. a.
Markets & Airlines 240.6 - 58.6 n. a. n. a.
All other segments - 84.8 - 37.4 - 126.6 - 127.0
TUI Group 977.2 408.7 + 139.1 + 136.8
EBIT 1 999.3 320.0 + 212.3
Underlying EBITDA 1,775.3 1,224.6 + 45.0
EBITDA 2 1,858.5 1,203.3 + 54.4
Group profit / loss 455.7 - 212.6 n. a.
Basic earnings per share3EUR 0.80 - 1.02 n. a.
Net capex and investment 493.7 315.9 + 56.3
Equity ratio (30 Sept)4% 12.1 4.2 + 7.9
Net debt (30 Sept) 2,106.2 3,436.2 - 38.7
Employees (30 Sept) 65,413 61,091 + 7.1
Due to the re-segmentation of Future Markets from All other
segments to Hotels & Resorts, TUI Musement and Central Region
in financial year 2023, previous year's figures have been
adjusted.
Due to rounding, some of the figures may not add up precisely to
the stated totals, and percentages may not precisely reflect the
absolute figures. All change figures refer to the previous year,
unless otherwise stated.
This Annual Report 2023 of the TUI Group was prepared for the
reporting period from 1 October 2022 to 30 September 2023.
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
65.
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 Earnings per share for all periods presented were adjusted for
the impact of the 10-for-1 reverse stock split in February 2023 as
well as the impact of the subscription rights issued in the capital
increase in March 2023.
4 Equity divided by balance sheet total in %, variance is given
in percentage points.
Profitable and sustainable growth: That's what it's all
about.
Interview WITH Sebastian Ebel
TUI's growth is profitable and sustainable. Sebastian Ebel,
TUI's CEO, talks about new trends in travel, growth potential,
political hurdles but also notable experiences with partners and
colleagues - from Cape Verde to Hanover.
Behind you lies your first financial year as CEO. Is TUI back on
course?
Definitely, yes. 19 million customers travelled with TUI in
financial year 2023. That is 13 per cent more than last year. We
had a strong Summer and bookings have held up their healthy
momentum into the early weeks of Winter 2023/24. We are working at
a profit again; we have paid back the state loans. This has enabled
us to invest in our own growth once more. And I am looking towards
the new financial year with confidence. The economy may be under a
few clouds, but people attach high priority to their holidays. We
have a clear growth strategy. We are improving our market position
in our traditional markets. We also want to offer new products to
our regulars while winning over new customers in general.
What opportunities do you see for TUI's classical operations in
Markets & Airlines?
Our tour operators are growing profitably. In Germany we have
acquired market share and in countries like France and the
Netherlands we are on a robust track as well. In markets where the
competition is tougher, like UK & I, we are walking taller all
the time. We hope to score some points there and offer our
customers a pleasant surprise. Some markets are causing us
particular pleasure. One is Poland, where we notched up a million
customers last year for the first time. Our Polish colleagues have
now launched operations in the Czech Republic too.
How is TUI responding to new customer expectations?
There can only be one objective for us, which is to surpass our
customers' hopes. That is what we always set out to do and we are
succeeding more and more, not least thanks to some new business
models. First Choice, our second brand in the UK, targets young
people in particular. We are restructuring First Choice as a web-
and app-based platform where our customers can piece together their
own holidays. Or take our spectrum of tours in Belgium. With TUI
Tours customers can select a flexible route and then adapt it at
the click of a mouse or combine it with flights, hotels and
experiences. A third example are the accommodation-only bookings.
After a successful launch of that concept in Sweden, we have
extended it to other markets. These examples illustrate our
innovative spirit. We dare to try out new ideas. That is an
incredible advantage and it says a lot about how we learn from each
other and spur each other on.
How do you rate the prospects, especially in the hotels
business, for the Holiday Experiences that now constitute your
second-biggest field of operations?
Our hotels and resorts have turned in excellent results now for
six quarters in succession. We still expect strong growth potential
there. What is important is to secure long-term growth with a light
approach to capex investment. We are aided by new funding models
like the Hotel Fund which we have created along with partners. This
year the Fund completed its first transactions. TUI BLUE is also
heading for growth with five new hotels in Africa and Asia this
summer, and seven more on the cards for 2024. Taken as a whole, our
strong portfolio with altogether 12 hotel brands - for the
price-conscious customer right through to the luxury holiday-maker
- is generating growth via management and franchise contracts.
Cruises were expected to recover rather more slowly after the
pandemic .
. but then returned to normal very quickly. The segment had
another strong year for the first time since the outbreak of the
pandemic. The Mein Schiff fleet operated by TUI Cruises began 2023
by breaking its bookings record. Some voyages were booked up within
days. Further growth is already certain, with three vessels joining
TUI Cruises straight out of the shipyard in the next three years.
They will set new standards in terms of comfort and environmental
protection. This underscores our ambition to run one of the most
cutting-edge, climate-friendly cruise fleets in the world.
And how is Musement getting along?
Our profitable growth continues with experiences and activities.
Last year we reached out to a million new customers and arranged
more than seven million experiences, from hiking trips and sporting
activities to theme park visits. We are focusing increasingly on
exclusive content of our own, boosting sales through partnerships.
TUI Musement is designed to be a personal guide and concierge for
our customers all year round, not only during their summer
holiday.
That means you want to offer additional services to TUI's
customers?
Correct. The core of that is the Central Customer Ecosystem,
which enables us to make new, more personalised suggestions. The
idea is to sell new products to existing customers but also to gain
new customers. I don't think there is any other company in the
world that has anything like as many different customer contacts in
the travel market as we do - not just online, but face-to-face in
the retail shops, in our hotels, on our aircraft and liners, and
during experiences. We will be tapping even more deeply into that
potential and building on our sustainability.
You mentioned sustainability. How is TUI shaping the future in
that respect?
For a start, any travel company that ignores climate change and
does not adopt a sustainable view is undermining its own business
model and placing a heavy burden on future generations. We take a
different approach. In January 2023 we published our new
Sustainability Agenda - it's ambitious. By 2030 we will reduce CO2e
emissions per air passenger by nearly a quarter. In the Cruises
segment we will cut absolute emissions by almost 28 per cent, in
our hotels by at least 46 per cent. The emission reduction targets
set out in our Agenda were evaluated and verified independently by
the Science Based Targets initiative. Our cruise companies are the
first in the world to adopt a reduction target that has been
scientifically validated, just like TUI Airlines among leisure
flight operators. By 2050 at the latest TUI will be a net zero
emissions company. We bear this target in mind every single day and
every day we change a little more to draw us closer to that goal.
Our internal targets are, of course, even more ambitious. I have to
say, nevertheless, that politicians cannot keep piling new strains
on us.
What do you mean exactly?
Travel has been brandmarked by some politicians. Flying is
demonised, cruising too. Holiday-makers are bombarded with
excessive rules and prohibitions. The package holiday - which is
without a doubt the safest way to travel - is deliberately priced
up by statutory obligations, while non-European groups are largely
free to sell their unregulated products, which are not very
consumer-friendly. Besides, the government doesn't do its homework:
rail does not provide a punctual feeder service - we have to pay
compensation for the delays. And the same can often be said of
flights, as air traffic control in Europe has still not been
standardised, which would consistently permit routes and procedures
to be as climate-friendly as possible. Carbon emissions in European
air space would, at a guess, be five to ten per cent lower if that
could be achieved. There is simply not enough being done! At the
same time, the fact that we have been investing massively for a
long time in technologies to protect the environment is often
ignored.
What specific environment measures are underway?
Over time the airlines will be using substantially larger
quantities of sustainable aviation fuel, or SAF. In fact, we intend
to exceed the statutory blending requirements, even if these
biofuel blends currently cost three to five times as much. Apart
from that, we are optimising flight routes and renewing our
fleet.
A lot is happening with our cruise liners too. In May Mein
Schiff 4 drew on green shore power for the first time at the port
in Hamburg. Two months later the vessel set off for the Nordics
with its first sustainable biofuel. The principal basis for that is
left-over cooking oil, which cuts carbon emissions by 90 per cent.
Mein Schiff 7, which will put to sea next summer, will eventually
run on green methanol, making her almost carbon-neutral. And we
will operate the other two newbuilds on low-emission liquid gas.
Our hotels are also playing a pioneering role. Robinson Club in
Italy, for example, boasts one of the biggest hotel photovoltaic
systems in Europe. And since November 2023 TUI BLUE Montafon has
been our first hotel to cut its carbon emissions to zero.
So we are slashing emissions hugely with our holidays. We also
encourage travel formats that entail lower emissions and we are
considerably expanding our rail services, like the TUI Ski Express
that we launched last winter to take Dutch and German customers to
Austria.
Apart from the environmental aspects, to what extent can tourism
drive economic and social development in destination countries?
The travel sector provides education and career prospects for
people in the destinations and it enhances environmental and social
standards. We want to step up these positive impacts. In early June
we signed a major Memorandum of Understanding with the government
of Cabo Verde. The core idea: further development of the huge
tourist potential in the Cape Verde islands with a deliberate focus
on strengthening local value chains, promoting environmental
protection and driving partnerships for innovation. The independent
TUI Care Foundation set up by our company is very active on this
front. For one thing, it works to ensure that young people in the
destinations, in particular, can benefit from better prospects for
the future. We want to enable them to participate even more in
successful tourism. Our industry is opening up entirely new
opportunities, especially in emerging economies and developing
countries. But we should not underestimate the need in our European
source markets either. Young people are our future. We must
accompany and support them.
You need to demonstrate opportunities to your own employees as
well. How is that going?
TUI's success stands and falls with our people. Their expertise
and commitment is of superlative importance. That applies every day
and for that I extend the warmest thanks to all our employees all
over the world. But their professionalism is all the more striking
in difficult situations. I am thinking in particular of those weeks
in July, when more than 300 service staff put in such a magnificent
effort during local forest fires on Rhodes and in round-the-clock
crisis teams. In the conversations I held with people in the field,
I experienced a huge sense of responsibility, and it moved me.
Another genuine highlight is the new TUI Campus in Hanover. It has
become a place for exchange and dialogue, not only between our
employees but also with customers from all over the world. It is a
similar story in our other offices, whether Rijswijk in the
Netherlands, Luton or Stockholm, all places where we are fostering
a new Way of Working.
But I think the most motivating thing of all is that we help
people to enjoy the most wonderful moments of their year. We
contribute to people experiencing the world and getting to know
other cultures. That often gives them a more differentiated picture
of distant lands and cultures. I firmly believe that no other
sector can do this as well as tourism - and given the situation in
the world today, that is more important than ever.
Last of all a look ahead. What do you see?
Tourism and TUI have huge potential. We have triggered plenty of
initiatives over the last twelve months. Now we are seeing the
commercial payback, the profitable growth. Of course there will be
geopolitical conflict and crisis in future too. We have to live
with such things. We will work hard at our success without getting
too big for our boots, and we will always keep our eyes on our
objective: to offer our customers unique holidays and experiences.
That is what TUI is all about - today and tomorrow!
"We are working at a profit again; we have paid back the state
loans. This has enabled us to invest in our own growth once
more."
"Tourism and TUI have huge potential."
"We have triggered plenty of initiatives over the last twelve
months. Now we are seeing the commercial payback, the profitable
growth."
Report of the Supervisory Board
Dear Ladies and Gentlemen,
dear Shareholders,
The financial year 2023 was characterised by a further recovery
in business operations and the Group achieved a result that was
significantly higher than in the previous year. At the same time,
TUI realised further important measures that enabled the company's
financial stability to be restored. Following the challenges posed
by the pandemic, the time has now come to refocus on the
implementation of strategic measures and profitable growth.
Even at the beginning of the financial year, we benefited from
good incoming bookings, with average prices at times exceeding
pre-pandemic levels. In a macroeconomically challenging
environment, this demonstrated the great importance of travelling
for people and the pent-up demand created by the years of the
coronavirus pandemic. Although customers continued to book at
shorter notice, the strong demand for TUI products also
demonstrated the attractiveness of the Group's product portfolio.
As the financial year progressed, incoming bookings developed in
line with expectations and we recorded a strong summer season.
However, the financial year 2023 was not without its operational
challenges. Flight operations had normalised compared to the
previous year and the tourism industry was able to recruit staff
comparatively better and faster. However, periods of heat and
forest fires in southern Europe kept us and our customers busy in
summer 2023, which also had a short-term impact on the development
of bookings. For TUI, the safety of our guests and employees was
always our top priority.
In addition to operational development, strengthening TUI's
financial stability remained a key task in the past financial year.
In December 2022, a repayment agreement was negotiated with the
Economic Stabilisation Fund (WSF) regarding the stabilisation
measures granted during the coronavirus pandemic. The Executive
Board informed us as the Supervisory Board in detail about the
developments in the talks and negotiations. The measures to
implement this agreement were then also the subject of our Annual
General Meeting in February 2023, which was held virtually for the
first time on the basis of the new legal regulations. This enabled
us to engage in direct dialogue with our shareholders again, but
unfortunately it was not free of technical disruptions. However, we
gained important insights from the completely new format and will
work on facilitating a disruption-free dialogue in future. Due to
the pleasingly positive response to the recapitalisation measures,
a reverse stock split at a ratio of 10:1 was completed following
the Annual General Meeting, creating the conditions for the
successful placement of a further capital increase in March / April
2023. As a result, TUI was able to fully repay the stabilisation
measures of the WSF, achieved a further reduction in interest costs
and debt and thus also a significant improvement in its credit
ratios. A further important step was then taken in May 2023 with
the extension of our revolving credit facility until summer 2026.
The support from the banks was once again a vote of confidence in
our business model and the Group's future strategy.
Combined with strict liquidity and investment management, this
led to a significant improvement in the company's financial
situation, which the rating agencies also honoured with an
upgrade.
With the repayment of the WSF stabilisation measures, the
conditions and requirements to be fulfilled by TUI AG in accordance
with Framework Agreement II ended and thus also the remuneration
restrictions for the members of the Executive Board. Accordingly,
the Supervisory Board dealt with the re-implementation of the
current Executive Board remuneration system and defined target
values for the long-term variable remuneration. Together with the
Executive Board, we were able to update the Declaration of
Conformity with the German Corporate Governance Code in August 2023
and declare that the recommendations of the German Corporate
Governance Code as amended are now fully complied with again. We
also addressed the remuneration system as a whole, as the past few
years since the Boeing grounding have shown the limits of the
existing system. We have therefore initiated a revision. The
feedback from investors and proxy advisors on the existing system
and our experience since its introduction have been incorporated
into our deliberations on adjustments. We now intend to submit a
balanced proposal for a revised Executive Board remuneration system
to the upcoming Annual General Meeting in February 2024.
The strategic direction and further development of the Group was
also always the subject of our meetings. The Executive Board
informed us in detail about the growth initiatives in the two
divisions Holiday Experiences and Markets & Airlines, which are
embedded in a central customer ecosystem and supported by the
sustainability agenda and employees. As part of the Supervisory
Board's discussions, the Group's sustainability agenda "People,
Planet, Progress" was given high priority. For example, we were
informed about the emission reductions of our airlines, cruise
ships and hotels by 2030, which have been tested and validated by
the Science Based Targets initiative (SBTi) on the basis of the
latest climate science findings.
Before I turn to the report of the Supervisory Board, I would
like to express my sincere thanks to the shareholders of TUI AG. As
in the years of the coronavirus pandemic, you showed your
comprehensive support in the past financial year and paved the way
for further capital measures with a large majority at the Annual
General Meeting 2023. You have thus once again demonstrated your
confidence in the TUI Group and helped the company regain its
financial stability. You have ensured that the management can once
again focus on the strategic development of the company and on
profitable growth.
Cooperation between the Supervisory Board and the Executive
Board
The Executive Board and the Supervisory Board are closely guided
by the principles of responsible and good corporate governance and
work together in a spirit of trust in accordance with the
principles set out in the Corporate Governance Report (page 119).
In doing so, the Supervisory Board has primarily monitored the
legality, propriety, expediency and efficiency of the work of the
management and the Executive Board, with a significant focus on the
refinancing of the Group. Further details can be found in the
report below.
The Executive Board kept us regularly, promptly and
comprehensively informed by means of written and oral reports at
and outside meetings. The reports included all relevant information
on the development and implementation of strategic targets,
liquidity development, planning, business development during the
year and the situation of the Group, and risk management and the
internal control system, compliance, but also reports from the
capital markets (e.g. from analysts) and the press. In the
financial year 2023, the focus was on the refinancing strategy for
the Group, in particular the capital split and implementation of a
capital increase with subscription rights and the extension of the
revolving credit line. Other topics of discussion were the
personnel and Group strategy as well as the booking behaviour of
customers in the current macroeconomic environment. The Supervisory
Board was involved in all decisions of fundamental importance to
the company in a timely manner. We passed the resolutions required
by law, the Articles of Association or the Rules of Procedure after
thorough consultation. For this purpose, we regularly prepared
ourselves on the basis of documents that the Executive Board made
available to the Supervisory Board and the committees in advance.
The Executive Board also informed the Supervisory Board immediately
about urgent issues in writing and at extraordinary meetings
convened at short notice. As Chairman of the Supervisory Board, I
was also regularly informed by the Executive Board about the
current business situation and important business transactions in
the company outside of the Supervisory Board meetings.
Deliberations in the Supervisory Board and its Committees
Prior to the Supervisory Board meetings, the shareholder and
employee representatives met in separate preparatory meetings.
Members of the Executive Board also regularly participated in these
meetings. Discussions of Executive Board and Supervisory Board
matters take place without the members of the Executive Board,
unless otherwise requested by the members of the Supervisory Board.
All members of the Supervisory Board may also submit to the
Chairman of the Supervisory Board the need to discuss an item on
the agenda without the presence of the Executive Board. In
addition, the agenda of each meeting of the Supervisory Board
provides for a separate agenda item, irrespective of the topic, for
which the members of the Executive Board are not present. Members
of the Supervisory Board may raise all topics to be discussed
without the Executive Board within the scope of this agenda
item.
In addition to the plenum, a total of three committees were
established in the past financial year: the Presiding Committee,
the Audit Committee and the Nomination Committee. The Mediation
Committee to be formed in accordance with section 27, paragraph 3
of the German Co-determination Act did not have to meet. The
chairpersons of the committees reported regularly and in detail on
their work at the ordinary meetings of the Supervisory Board. In
connection with the implementation of a capital increase in spring
2023, a transaction committee set up by the Supervisory Board and
consisting of Dr Zetsche, Mr Jakobi, Prof. Dr Ernst and Mr
Flintermann met. This made it possible to pass resolutions at very
short notice within the framework granted by the Supervisory Board,
insofar as this was necessary. All documents and the minutes of the
transaction committee meetings were always accessible to all
members of the Supervisory Board. In addition, the meetings were
reported on at the respective subsequent Supervisory Board
meetings. No additional remuneration or attendance fees were paid
for the meetings of the Transaction Committees.
Despite the numerous meetings, we were able to record a
consistently high attendance rate at our deliberations in the 2023
financial year, as in previous years. Attendance at the plenary
meetings averaged 96.0 % (previous year 96.3 %) and at the
committees 97.2 % (previous year 98.7 %). The vast majority of the
members of the Supervisory Board participated in all meetings of
the Supervisory Board in the financial year 2023 and in its
committees in accordance with their respective membership. Members
who were unable to attend the meetings generally participated in
the resolutions by sending voting messages. The timely distribution
of documents by the Executive Board in advance of the meetings and
the almost universal avoidance of table papers made the preparation
of the meetings much easier for the members of the Supervisory
Board. For organisational reasons, some Supervisory Board and
committee meetings were also held as video conferences to ensure
the availability of Supervisory Board members for meetings
scheduled at short notice. The exact breakdown of presence and
video conference meetings can be seen in the table below.
Until the stabilisation measures were redeemed on 27 April 2023,
the Economic Stabilisation Fund (WSF), in addition to the members
of the Supervisory Board, exercised its right to be a guest at the
meetings of the Supervisory Board and its committees, as agreed in
the second framework agreement of January 2021, insofar as there
was a relevant interest in accordance with the framework agreement.
After the election of Dr Dönges as a member of the Supervisory
Board, this guest right was exercised by individual representatives
of the Finance Agency of the Federal Republic of Germany.
Attendance at meetings of Supervisory Board in financial year 2023
Supervisory Board Transaction Presiding Audit Nomination
meetings committees committee committee committee
Meetings total 10 1 6 8 1
thereof virtual 4 1 1 2 0
Name
Dr Dieter Zetsche (Chairman) 10 (10) 1 (1) 6 (6)* 7 (8) 1 (1)*
Frank Jakobi (Deputy Chairman) 10 (10) 1 (1) 6 (6) 8 (8)
Ingrid-Helen Arnold 9 (10)
Sonja Austermühle 9 (10)
Christian Baier 7 (10) 8 (8)
Andreas Barczewski 10 (10)
Peter Bremme 10 (10) 6 (6)
Dr Jutta Dönges 8 (10) 5 (6) 7 (8) 1 (1)
Prof. Dr Edgar Ernst 10 (10) 1 (1) 6 (6) 8 (8)* 1 (1)
Wolfgang Flintermann 10 (10) 1 (1)
Maria Garaña Corces 9 (10)
Stefan Heinemann 10 (10) 8 (8)
Janina Kugel 10 (10)
Coline Lucille McConville 10 (10)
Helena Murano 10 (10)
Mark Muratovic 10 (10) 8 (8)
Anette Strempel 10 (10) 6 (6)
Joan Trían Riu 10 (10)
Tanja Viehl 10 (10)
Stefan Weinhofer 10 (10) 8 (8)
Attendance at meetings in % 96.0 100.0 97.2 96.9 100.0
Attendance at Committee 97.2
meetings in %
(In brackets: number of meetings held)
* Chairperson of Committee
Main topics of the Supervisory Board's work
There were ten meetings of the Supervisory Board. Of these, six
were held as presence meetings, while four were held as video
conferences. Furthermore, the established transaction committee of
the Supervisory Board met one time, and four additional resolutions
were passed by circular resolution. The following main points were
the subject of the individual meetings:
1. In its meeting on 5 October 2022, the Supervisory Board first
dealt with the preliminary report on the past financial year. In
addition, the Supervisory Board was informed about the current
booking situation, the liquidity situation and the refinancing
options of the Group. The agenda also included an update on the
sanctioning of a major shareholder and the revised competence
profile of the Supervisory Board, including a qualification matrix.
The Supervisory Board also informed itself about the law on the
introduction of virtual general meetings and decided to hold the
next ordinary general meeting in virtual format. Furthermore, the
members of the Supervisory Board received an update on the
definition of the performance criteria for the individual
performance of the Executive Board members, the performance of the
Executive Board as a whole and the achievement of stakeholder
targets. Finally, the Board dealt with general succession planning
and discussed possible changes to the Executive Board.
2. In a circular resolution on 18 October 2022, the Supervisory
Board approved, in implementation of the changes discussed at the
meeting on 5 October, the termination by mutual consent of the
appointment of Mr Frank Rosenberger as a member of the Executive
Board of TUI AG and the amendment of the business allocation
plan.
3. The extraordinary meeting on 23 November 2022 dealt with an
update on the Group's refinancing strategy. The prerequisites for
the refinancing options and, among other things, their implications
for the company's rating were examined. In addition, the members of
the Supervisory Board also had the potential consequences and
effects of the possible refinancing for the company and the
shareholders and their legal assessment explained to them.
4. The meeting on 13 December 2022 initially included a
discussion of the draft repayment agreement with the WSF and the
associated key conditions, requirements and implications. The
agenda also included the financial statements of the Group and TUI
AG, each of which had been issued with an unqualified audit
certificate by the auditors, and the combined management report for
the Group. The Executive Board and the auditors were also present.
The Audit Committee had already dealt extensively with these
reports the previous day and also had the opportunity to discuss
them with the auditors without the Executive Board. The members of
the Supervisory Board approved the financial statements prepared by
the Executive Board and the combined management report for TUI AG
and the Group. The annual financial statements for 2022 were thus
adopted. The Supervisory Board also approved the Report of the
Supervisory Board, the Corporate Governance Report and the
Remuneration Report. In addition, the declarations of compliance
with the German and UK Corporate Governance Code and the proposal
to the Annual General Meeting to commission Deloitte GmbH
Wirtschaftsprüfungsgesellschaft for the 2023 half-year and annual
financial statements were adopted. Furthermore, the Supervisory
Board adopted the agenda for the Annual General Meeting on 14
February 2023 and approved the revised competence profile and the
qualification matrix. Other topics discussed at the Supervisory
Board meeting included the personnel and social report, an update
on the IT organisation and remuneration topics for the Executive
Board.
5. The meeting on 13 February 2023 included explanations on the
quarterly report and quarterly financial report as well as the
current booking situation. In addition, the current developments
regarding the refinancing project were discussed at the meeting.
The Supervisory Board was also informed about the current status of
the preparations for the Annual General Meeting and received an
update on the implementation of the strategic initiatives and on
customer satisfaction. The agenda also included the extension of Mr
Peter Krueger's appointment for another three years, the related
remuneration adjustment in the second cycle and remuneration topics
for the Executive Board.
6. At the extraordinary constituent meeting on 14 February 2023
after the Annual General Meeting, the members of the Supervisory
Board re-elected Dr Dieter Zetsche as Chairman of the Supervisory
Board and thus also as a member and Chairman of the Presiding
Committee and the Nomination Committee. In addition, Dr Dieter
Zetsche and Mr Christian Baier were elected members of the Audit
Committee.
7. In a so-called learning session on 23 February 2023, the
Supervisory Board was informed in detail about the requirements of
the UK stock exchange supervisory authority as well as the rights
and obligations of the directors in connection with a possible
capital increase, in particular with regard to the prospectus
required for BaFin and FCA. This was a requirement of the UK
Listing Rules. This was attended by both our external legal
advisors and representatives of the sponsoring bank.
8. In an extraordinary meeting on 10 March 2023, the Executive
Board reported to the Supervisory Board on the process, timetable
and potential volume of a capital increase. The Supervisory Board
approved the capital increase in principle and set up a Transaction
Committee for further implementation.
9. At its meeting on 24 March 2023, the Transaction Committee
approved the measures required for the placement of the capital
increase and its implementation within the scope of its authority
as assigned by the Supervisory Board.
10. In a circular resolution on 4 April 2023, the Supervisory
Board approved the sale of the stake in peakwork AG.
11. At the meeting on 9 May 2023, the Executive Board explained
the report on the current financial year, the quarterly financial
statements and the first half of 2023, which the Audit Committee
had already discussed on the previous day. In addition, the
Executive Board gave an update on the successfully completed
capital increase and the refinancing strategy. Other key topics of
the meeting were updates on the People and Group strategy. The
Supervisory Board also dealt with changes in the composition of the
Group Executive Committee and discussed succession planning in
general. In addition, the Supervisory Board decided on the exercise
of LTIP adjustment mechanisms in the context of Executive Board
matters, received an update on the remuneration restrictions for
the Executive Board and on the termination of the WSF's guest
rights as a result of the redemption of the stabilisation
measures.
12. At its meeting on 4 July 2023, the Supervisory Board first
received an update on the current business development and IT
security. Furthermore, the Board dealt with the establishment of
two joint venture companies. In the context of Executive Board
matters, the Supervisory Board approved the appointment extension
of Ms Sybille Reiss for another three years as well as the related
remuneration adjustment and discussed the remuneration structure of
the Executive Board members. The agenda also included an update on
corporate governance at TUI AG and a report on a revised internal
guideline on the control of related party transactions.
13. In a circular resolution on 16 August 2023, the Supervisory
Board approved the exercise of LTIP adjustment mechanisms and the
update of the corporate governance declaration in the course of the
year in accordance with section 161 of the German Stock Corporation
Act.
14. In a circular resolution on 28 August 2023, the Supervisory
Board approved the sale of the stake in Raiffeisen-Tours RT-Reisen
GmbH and the purchase of a share in TRAVELStar GmbH.
15. At its strategy meeting on 6 September 2023, the Supervisory
Board received an update on the strategic orientation and
developments in the individual company segments. It also discussed
the People strategy, IT and sustainability as well as the impact of
artificial intelligence on the tourism industry and TUI's business
model.
On the second day of the meeting, the Supervisory Board received
a report on the current financial year at its ordinary meeting on 7
September 2023. In addition, the Board adopted the budget for the
coming financial year and the three-year plan and took note of the
report on security, health and safety. In addition, the Supervisory
Board set the target values for the annual performance-related
remuneration of the Executive Board for the following financial
year and discussed in principle the options for revising the
Executive Board remuneration system. Other topics included an
update on the revision of the qualification matrix and the
assessment of the independence of shareholder representatives in
accordance with the German Corporate Governance Code and the UK
Code.
Presiding Committee
The Presiding Committee is responsible for Executive Board
matters (including succession planning, appointments, terms of
employment contracts, remuneration, proposals on the remuneration
system), which in this function corresponds to a remuneration
committee in accordance of UK principles. In addition, the
Presiding Committee prepares the meetings of the Supervisory Board.
In the reporting period, six meetings were held. Of these, five
were held as presence meetings, while one were held as video
conferences.
The Presiding Committee, which is made up of equal numbers of
members, consists of:
-- Dr Dieter Zetsche (Chairman)
-- Peter Bremme
-- Dr Jutta Dönges
-- Prof. Dr Edgar Ernst
-- Frank Jakobi
-- Anette Strempel
1. At its meeting on 4 October 2022, the Presiding Committee
dealt with possible changes to the composition of the Executive
Board and the definition of performance criteria for the individual
performance of Executive Board members, the performance of the
Executive Board as a whole and the achievement of stakeholder goals
and their relative weighting for the following financial year. The
Executive Committee also dealt with the revised competency profile
for the Board and the qualification matrix as well as with the
drafts of the Report of the Supervisory Board and the Corporate
Governance statements for the annual report 2022.
2. On 12 December 2022, the target achievement for the variable
remuneration components of the Executive Board in the 2022
financial year was the subject of discussion, subject to the
validity of the remuneration restrictions. In addition, the
exercise of LTIP adjustment mechanisms was discussed. In the
context of Supervisory Board matters, the annual planning of the
Supervisory Board and its committees for the 2023 and 2024
financial years as well as the competence profile and the
qualification matrix were among the items on the agenda.
3. At its meeting on 13 February 2023, the Presiding Committee
received an update on the remuneration restrictions for the
Executive Board in the course of the utilisation of stabilisation
measures of the WSF. In addition, the Committee discussed the
extension of the appointment and service agreement of Mr Peter
Krueger for a further three years.
4. On 8 May 2023, the Presiding Committee received an update on
the composition of the GEC and discussed the general succession
planning, including the quota for women. Furthermore, the members
of the Committee again dealt with the remuneration restrictions for
the Executive Board, the exercise of LTIP adjustment mechanisms and
the termination of the WSF's guest rights after the redemption of
the stabilisation measures at the end of April 2023.
5. At the meeting on 4 July 2023, the Presiding Committee dealt
with the extension of Ms Sybille Reiss's service agreement by a
further three years and discussed the level of remuneration of the
members of TUI AG's Executive Board. Apart from other remuneration
topics, the agenda included an update on corporate governance at
TUI AG.
6. On 5 September 2023, the Presiding Committee discussed the
determination of the target values for annual performance-related
remuneration for the following financial year. Furthermore, the
general further development of the remuneration system was
discussed. In addition, the update on the revision of the
qualification matrix and the assessment of the independence of the
shareholder representatives on the board according to the German
Corporate Governance Code and the UK Code were discussed.
Audit Committee
The Audit Committee met for eight ordinary meetings in the 2023
financial year. Of these, six were held as Presence meetings, while
two were held as video conferences. Please refer to the detailed
report of the Audit Committee on page 19 for information on the
composition, tasks, deliberations and resolutions of the Audit
Committee.
Nomination Committee
The nomination committee, composed exclusively of shareholder
representatives, nominates suitable shareholder candidates to the
Supervisory Board for its election proposals to the general meeting
or for appointment by the district court.
The members of the Nomination Committee, which met one time in
an attendance meeting, were:
-- Dr Dieter Zetsche (Chairman)
-- Dr Jutta Dönges
-- Prof. Dr Edgar Ernst
In its meeting on 13 December 2022, the Nomination Committee
dealt with the resolution recommendation for the nomination of Mr
Baier, Ms Murano and Dr Zetsche (shareholder representatives) for
election at the following Annual General Meeting.
Corporate Governance
The TUI AG share has its initial listing on the London Stock
Exchange in the United Kingdom. In this context, TUI AG's
constitution as a stock corporation under German law naturally
requires the Supervisory Board to deal regularly and in great
detail with the recommendations of both German and British
corporate governance. Apart from mandatory compliance with the
provisions of the German Stock Corporation Act (AktG), the
Co-Determination Act (MitbestG), the Listing Rules and the
Disclosure and Transparency Rules, TUI AG had declared in the
framework of the merger that it would comply with both the German
Corporate Governance Code (GCGC) and - to a practicable extent -
the UK Corporate Governance Code (UK CGC).
For the GCGC, which is based on the German Stock Corporation Act
(AktG) in its basic conception, we were able to submit the
Declaration of Conformity 2023 with the Executive Board in
accordance with section 161 AktG. The GCGC will be fully complied
with again from August 2023. For further details, please refer to
the Corporate Governance Report. The deviations from the UK CGC are
largely due to the conceptual difference between the monistic
management system of a public listed company in the UK (so-called
one-tier board) and the dualistic management system consisting of
Executive Board and Supervisory Board in a public limited company
(so-called two-tier board) under German law.
In conducting the audit of the financial statements, the auditor
did not identify any facts that would indicate that the declaration
on the GCGC issued by the Executive Board and the Supervisory Board
was incorrect.
Further information on corporate governance, the Declaration of
Conformity 2023 pursuant to section 161 of the German Stock
Corporation Act (AktG) and the declaration on the UK CGC can be
found in the Corporate Governance Report jointly prepared by the
Executive Board and the Supervisory Board in this Annual Report
(page 11) and on TUI AG's website.
Conflicts of interest that have arisen
The Supervisory Board has continuously monitored the existence
of conflicts of interest in the current financial year and
determined that no conflict of interest arose in the 2023 financial
year.
Audit of the annual financial statements and consolidated
financial statements of TUI AG and the TUI Group
The Supervisory Board examined whether the annual financial
statements and the consolidated financial statements as well as the
other financial reporting complied with the applicable
requirements. The annual financial statements of TUI AG prepared by
the Executive Board in accordance with the rules of the German
Commercial Code (HGB), the combined management report of TUI AG and
the TUI Group and the consolidated financial statements for the
financial year 2023 prepared on the basis of the International
Financial Reporting Standards (IFRS) were audited by Deloitte GmbH
Wirtschaftsprüfungsgesellschaft, Hanover, and issued with an
unqualified audit opinion in each case. The aforementioned
documents, the Executive Board's proposal for the appropriation of
the balance sheet profit and the auditor's reports were submitted
to all members of the Supervisory Board in good time. We discussed
them in detail at the Audit Committee meeting on 4 December 2023
and at our balance sheet meeting on 5 December 2023, at which the
Executive Board explained the financial statements in detail. At
these meetings, the Chairman of the Audit Committee and the auditor
reported on the results of their audits, the focus of which had
previously been determined with the Audit Committee for the
reporting year. Neither the auditor nor the Audit Committee
identified any weaknesses in the early risk detection and internal
control system. Following our own review of the annual financial
statements, the consolidated financial statements and the combined
management report, we had no cause for objections and therefore
concurred with the Executive Board's assessment of the situation of
TUI AG and the TUI Group.
On the recommendation of the Audit Committee, we approve the
financial statements for financial year 2023; the annual financial
statements of TUI AG are thus adopted.
Composition of the Executive Board and Supervisory Board
The composition of the Executive Board and the Supervisory Board
as at 30 September 2023 is shown in the overviews on pages 115 for
the Supervisory Board and on page 117 for the Executive Board.
Supervisory Board
In the following, I will give you an overview of the personnel
changes on the Supervisory Board.
At the proposal of the Supervisory Board, Dr Zetsche was
re-elected by the AGM 2023. In addition, the AGM 2023 confirmed Ms
Murano and Mr Baier as members of TUI AG's Supervisory Board. Both
members had initially been appointed by court order on 31 May
2022.
Presiding Committee
In financial year 2023, there were no changes in the composition
of the Presiding Committee of TUI AG.
Audit Committee
In financial year 2023, there were no changes in the composition
of the Audit Committee of TUI AG. Dr Zetsche and Mr Baier were also
re-elected to the Audit Committee following their election by the
Annual General Meeting.
Nomination Committee
In financial year 2023, there were no changes in the composition
of the Nomination Committee of TUI AG.
Executive Board
Frank Rosenberger, Chief IT Officer and Future Markets, has
decided to leave the Group with effect as of the expiry of 31
October 2022. Mr Rosenberger had been with TUI since 2015 and had
been responsible for Future Markets and the Group's digitalisation
on the company's Executive Board since 2017. Under his
responsibility, a global system for TUI tour operators was launched
and the digitalisation of the company was significantly
advanced.
The reduction in the number of Executive Board members also
required a reorganisation of responsibilities in the management
body. The CIO with his central IT functions of the TUI Group is
located in the direct area of responsibility of CEO Sebastian Ebel.
The other IT units are interlinked with the operational areas to
enable a fast and efficient implementation of the digitalisation
strategy. Peter Krueger is fully responsible for the Holiday
Experiences area at Executive Board level.
Thanks to
The Supervisory Board would like to thank the employees of the
TUI Group for their great commitment in the past financial year.
Thanks to your commitment, TUI has managed to regain its strength
after the pandemic - in your respective areas of responsibility,
you have all contributed to enabling TUI customers to enjoy the
best time of the year.
Hanover, 5 December 2023
For the Supervisory Board
Dr Dieter Zetsche
Chairman of the Supervisory Board
Report of the Audit Committee
Dear Shareholders,
As the Audit Committee, we have the task of supporting the
Supervisory Board in the performance of its supervisory function.
In doing so, we deal with the audit of the accounting, the
monitoring of the accounting process, the effectiveness of the
internal control system, the risk management system and the
internal audit system as well as the audit of the financial
statements and compliance. The accounting process includes, in
particular, the consolidated financial statements and the group
management report including CSR reporting, financial information
during the year and the individual financial statements according
to the German Commercial Code (HGB). In the completed financial
year, we dealt in particular with issues relating to TUI Group's
accounting and financial reporting, as required by law, the German
Corporate Governance Code (GCGC) and the UK Corporate Governance
Code (UK CGC) and the rules of procedure of the Supervisory Board.
In addition, the Board Office also dealt for the Audit Committee
with the implementation of the Financial Reporting Council's (FRC)
'Audit Committees and the External Audit Minimum Standard' and
determined that the requirements are already being met.
Furthermore, the Audit Committee is responsible for the
selection of the external auditor, whereby it also reviews the
qualification as well as the independence of the auditor. The
selected auditor is then proposed by the supervisory board to the
general meeting for appointment. After the appointment by the
general meeting, the Supervisory Board formally commissions the
external auditor to audit the annual financial statements and the
consolidated financial statements. The auditor is also commissioned
to review the half-yearly financial report as well as any
additional interim financial information that meets the
requirements for the half-yearly financial report. The Audit
Committee has agreed with the auditor that the auditor shall inform
the committee without delay of all findings and events of
significance for the committee's tasks that come to the auditor's
attention during the performance of the audit. Furthermore, the
Audit Committee has agreed with the auditor that the auditor will
inform the committee and make a note in the audit report if, during
the performance of the audit, the auditor discovers facts that show
a misstatement in the declaration on the GCGC issued by the
Executive Board and the Supervisory Board. In addition, the Audit
Committee regularly assesses the quality of the audit.
The Audit Committee, which has equal representation, currently
consists of the following eight members of the Supervisory
Board:
-- Prof. Dr Edgar Ernst (Chairman) -- Frank Jakobi
-- Christian Baier -- Mark Muratovic
-- Dr Jutta Dönges -- Stefan Weinhofer
-- Stefan Heinemann -- Dr Dieter Zetsche
Through the appointment of financial experts, the Audit
Committee has expertise in the areas of accounting and auditing.
The expertise in the field of accounting consists of special
knowledge and experience in the application of accounting
principles and internal control and risk management systems. The
expertise in the field of auditing consists of special knowledge
and experience in the auditing of financial statements. Accounting
and auditing also include sustainability reporting and its audit.
The Chairman of the Audit Committee, Prof. Dr Edgar Ernst, is an
expert in both areas. In addition, Mr Christian Baier and Dr Jutta
Dönges fulfil the requirements of a financial expert within the
meaning of the GCGC. The relevant members of the Audit Committee
are also named in the Corporate Governance Report starting on page
119, where more detailed information on their expertise in the
aforementioned areas is also provided. In summary, it should be
noted here that the members of the Audit Committee all have
competences relevant to the sector in which the company
operates.
With regard to the Chairman of the Audit Committee, Prof. Dr
Edgar Ernst, the Supervisory Board is of the opinion that he is
independent of the Company and the Executive Board (for the
independence of the other members of the Audit Committee, see page
121).
The Audit Committee regularly meets six times a year. The
meeting dates and agendas are based in particular on the reporting
cycle of the Group and the agendas of the Supervisory Board. In
addition, there may be other topic-related meetings. These
topic-related meetings generally also include a meeting in which
the Executive Board explains to the Audit Committee the main
contents of the Pre-Close Trading Update, which is usually
published shortly before the annual closing date.
In addition to the members of the Audit Committee, the meetings
were also attended by the Chairman of the Executive Board and the
Chief Financial Officer, as well as the heads of Group Financial
Accounting & Reporting, Group Audit, Group Legal, Compliance
& Board Office, Group Treasury, Group Controlling, Group
Corporate Finance & Group Investor Relations.
The auditors were invited to attend the meetings to discuss
relevant issues. Other members of TUI Group's senior management as
well as TUI Group executives with operational responsibility or
external consultants were invited as required.
In addition to the meetings of the Audit Committee, the Chairman
of the Audit Committee also held individual discussions with the
Executive Board, division heads or the responsible partners of the
auditor if this appeared necessary to go into more detail on
individual topics and issues. The Chairman of the Audit Committee
reported on the main results of these discussions at the following
meeting of the Audit Committee.
The Chairman of the Audit Committee reports on the work and
proposals of the Audit Committee as well as on the content of
individual discussions in the respective subsequent Supervisory
Board meeting.
The members attended the meetings of the Audit Committee as
shown in the table on page 14. The format of the respective meeting
is also shown there, as these meetings are held both in person and
as a video conference.
Informative value of financial reporting and monitoring of the
accounting process
The preparation of the annual financial statements and annual
report of a German public limited company is the sole
responsibility of the Executive Board. According to § 243 (2) HGB,
the annual financial statements must be clear and concise and
provide a realistic overview of the company's economic situation.
This is in line with the requirements of the UK CGC, according to
which the annual financial statements and annual report must be
accurate, balanced and understandable. Against this background, the
Executive Board is convinced - although the assessment was not
delegated to the Audit Committee - that the submitted annual report
meets the requirements of both legal systems.
In order to also satisfy ourselves of the informative value of
the annual financial statements and the interim reporting, we were
informed in detail by the Executive Board about the business
development and the financial situation of the Group in the four
Audit Committee meetings, which took place immediately before the
publication of the respective financial statements. The
corresponding reports were discussed. If the auditor had conducted
an audit or review, the auditors reported on the results of the
audit at these meetings in detail on important aspects of the
financial statements and on the results of the audit or the
auditor's review. According to the DCGK discussions should take
place in the absence of the Executive Board on a regular basis. In
the past financial year, the Audit Committee was also regularly
given this opportunity. This applies in particular to the audit of
the financial statements. In the past financial year, the Audit
Committee also discussed with the auditor the assessment of the
audit risk, the audit strategy and audit planning as well as the
audit results. In addition, the Chairman of the Audit Committee
regularly discussed the progress of the audit with the auditor and
reported to the Audit Committee on each occasion.
In order to monitor accounting, we dealt intensively with
individual aspects. As in previous years, TUI's economic
development was a central topic in our meetings. In particular, we
received detailed reports from TUI AG's Executive Board on the
measures taken to refinance the company.
In addition, we considered the accounting treatment of
significant balance sheet items, in particular goodwill, specific
provisions as well as the development of TUI AG's equity. In
consultation with the auditor, we assured ourselves that the
assumptions and estimates underlying the accounting were
appropriate. Furthermore, material aspects arising from the
operational business were acknowledged by the Audit Committee.
In the reporting period, we dealt in particular with the
following individual aspects:
Even before the outbreak of the COVID-19 pandemic, TUI AG's
Executive Board initiated optimisation processes with regard to the
structure of working capital and the associated cash flows. These
measures also included the further development of a central finance
area. Structured working capital management was also extended to
the subsidiaries. We were regularly informed about these projects
in our meetings. Also after the outbreak of the COVID-19 pandemic,
these processes were accompanied by strict cost control. As in
previous years, we received detailed reports on the corresponding
measures.
In addition, the consistency of the reconciliation to the key
figure 'underlying EBIT' and the significant items (adjustments)
eliminated here were discussed for each quarterly report and for
the annual financial statements. In this context, the going concern
report prepared by the company was also discussed to verify the
relevant going concern statements in the half-year report and the
annual financial statements. The viability statement to be issued
in the annual financial statements under the regulations of the UK
CGC was also the subject of discussion.
The report of the Chairman of the Audit Committee on the
monitoring of transactions with related parties within the business
year was also discussed. Since none of the transactions - neither
on an individual nor on a cumulative basis - exceeded the defined
threshold value in the reporting year, a control of the monitored
individual matters was carried out.
Since the introduction of mandatory reporting on corporate
social responsibility (CSR) in the management report, the
Supervisory Board has been responsible for reviewing the content of
these disclosures. The Supervisory Board decided to seek support of
the auditor, Deloitte, in reviewing the disclosures. Accordingly,
we have been informed of the results of the auditor's review and
are of the opinion that the information published in the CSR Report
is appropriate and adequate.
Our assessment of all aspects of accounting and financial
reporting discussed is consistent with the assessment of the
Executive Board and the auditor.
On 21 November 2022, TUI received a letter from the UK regulator
(FRC) with respect to the inclusion of TUI in the selection for
their thematic review on earnings per share (IAS 33). The letter
raised no questions requiring a response or further correspondence
with the FRC. The schedule to the letter set out a number of
observations on the reporting for earnings per share in TUI's
Annual Report for the year ended 30 September 2021. The
observations and the recommendations made in the FRC's publication
on their thematic review of earnings per share (IAS 33) have been
taken into account in the preparation of the 2023 Annual
Report.
The FRC's review is based on the published Annual Report and
Accounts and does not benefit from detailed knowledge of the
business or an understanding of the underlying transactions. lt
provides no assurance that the Annual Report and Accounts is
correct in all material respects. The FRC's role is not to verify
the information provided, but to consider compliance with reporting
requirements. The FRC accepts no liability for reliance on the
FRC's review by the Company or any third party, including but not
limited to investors and shareholders.
On 22 August 2023, TUI received a letter from the German
regulator (BaFin) ordering a random audit of the annual report as
of 30 September 2022. The scope of the audit comprises the
reporting on the macroeconomic environment, the consideration of
climate-related risks, the maintenance provisions in connection
with aircraft lease agreements and specific notes to the financial
statements. BaFin's catalogues of questions received on 30 August
and 30 October 2023 were answered by TUI in due time
respectively.
Effectiveness of the control and risk management system
The Audit Committee is guided in its legal obligation to deal
with the effectiveness of the internal control and risk management
system by the conviction that a stable and effective internal
control system is indispensable to ensure economic success in the
long term. To fulfil its monitoring task, the Audit Committee is
regularly informed about the maturity of the implemented controls
and also about the further development of the internal control
system.
The Group has continuously developed its internal control system
based on the COSO concept. The routine review of key financial
controls is carried out by local management and monitored by the
Executive Board. In the largest source markets, the UK and Germany,
other internal controls are also reviewed.
The compliance function in the Group is further divided into the
areas of finance, legal and IT. This division plays an essential
role in the identification of further control needs and the
permanent improvement of existing controls. In addition, the
auditor also reports on any weaknesses in the Group's
accounting-related control system that it identifies, and
management follows up on their timely elimination.
The Audit Committee receives regular reports on the
effectiveness of the risk management system, as shown in the risk
report starting on page 35. The Risk Oversight Committee that has
been set up is of crucial importance within the group. We are
convinced that an adequate risk management system is in place.
The internal audit department ensures the independent monitoring
of the implemented processes and systems as well as the significant
projects and reports directly to the Audit Committee at each
regular meeting. During the reporting period, the Audit Committee
was not informed of any audit findings that indicated material
weaknesses in the internal control system or the risk management
system. In addition, regular discussions take place between the
Chairman of the Audit Committee and the Director of Internal Audit
for closer coordination. The annual audit planning is carried out
in an agile manner. The Audit Committee has received detailed
reports on the methodology and has taken note of and approved it,
together with the audits for the coming financial year that have
already been determined in this context. The Audit Committee
believes that the regular coordination ensures the effectiveness of
the internal audit.
In the course of our meetings, we were again informed in this
business year about the implementation and guarantee of the
regulations of the European Data Protection Regulation (EU GDPR) in
the individual business areas. Based on this report, we are
convinced that the projects continuously initiated and measures
taken throughout the Group for this purpose are designed to fulfil
the requirements of the EU GDPR.
Whistleblowing systems for employees in the event of compliance
violations
A standardised whistleblowing system has been set up in TUI
Group through which employees can draw attention to possible
breaches of compliance guidelines.
As part of the reporting on the legal compliance system, we were
presented with the key findings from the whistleblower system in
the past financial year.
Review of the independence and objectivity of the auditor
For financial year 2023, the Audit Committee recommended to the
Supervisory Board that Deloitte GmbH
Wirtschaftsprüfungsgesellschaft (Deloitte) be proposed to the
Annual General Meeting as auditors. Following the appointment of
Deloitte as auditors by the Annual General Meeting in February
2023, the Supervisory Board commissioned Deloitte to audit the 2023
financial statements.
The Audit Committee had Deloitte explain to it in advance the
audit plan for the annual financial statements as at 30 September
2023. This plan includes the main focal points of the audit and the
group of companies to be audited from the Group's perspective. The
Audit Committee is convinced that this plan ensures that the audit
adequately takes into account the identifiable risks. It also
considers the independence and objectivity of the auditor to be
given and has also established with the quality of the audit within
the framework of a structured survey.
Based on regular reporting by the auditor, we have satisfied
ourselves of the effectiveness of the external audit and have
decided to recommend to the Supervisory Board that Deloitte be
proposed to the Annual General Meeting as auditor again for
financial year 2024. Deloitte was selected by us as auditor in a
public tender process in financial year 2016 and has been appointed
as auditor without interruption since the first election by the
Annual General Meeting in 2017.
In order to ensure the independence of the auditor, all
engagements for the provision of non-audit services by the auditor
must be submitted to the Audit Committee for approval before the
engagement is awarded. The Audit Committee makes use of the
possibility to delegate the approval to the company depending on
the size of the order. The chairperson of the Audit Committee is
only involved in the decision if a fixed cost limit is exceeded. If
the auditor provided services to the group outside of the audit,
the nature and amount of these services were explained to the Audit
Committee. This procedure is in line with the company's existing
policy on the approval of non-audit services, which takes into
account the requirements of the regulations of the Audit Reform Act
(AReG) on prohibited non-audit services and on limitations on the
amount of non-audit services. Worldwide, the non-audit services
amounted to EUR 2.1 m. The audit fee received by the auditor,
excluding voluntary audits, amounted to EUR 8.6 m. The
corresponding non-audit services accounted for approximately 24 %
of Deloitte's audit fees.
I would like to thank the members of the Audit Committee, the
auditors, the Executive Board and all employees involved for their
trusting and committed cooperation in the past financial year.
Hanover, 4 December 2023
Prof. Dr Edgar Ernst Chairman of the Audit Committee
TUI Group Strategy
Tourism is a growth sector driven by strong fundamentals
The travel and tourism market is a significant contributor to
the global economy1, growing above global GDP levels pre-pandemic2.
Demand for tourism is driven by strong fundamental trends - people
living longer, healthier lives; the growth of middle classes across
the globe, which increases disposable income; and the desire for
experiences, of which travel plays a significant part. This demand
has proved highly resilient - after the disruption of COVID-19 and
resulting travel restrictions, international arrivals are expected
to return almost to pre-pandemic levels in 20233. At TUI, we
experienced a strong uplift in bookings for our destinations on the
easing of government travel restrictions during the pandemic, and
in Summer 2023, Markets & Airlines customer numbers rebounded
almost completely to Summer 2019 levels, coupled with a strong 8 %
increase in average selling price versus prior season, and 26 %
increase versus Summer 2019. Therefore, we expect leisure tourism
to continue to be an attractive growth market over the
long-term.
The industry still faces some key challenges. Cost inflation
(driven by higher energy costs and labour supply shortages), higher
interest rates and foreign exchange fluctuations all impact
supplier cost bases, as well as putting a squeeze on household
income and hence consumer sentiment. In turn, this reinforces
customer needs for brands which they can depend on, and which
deliver choice and flexibility in configuring the right product for
them. TUI's focus on delivering quality to our customers while
increasing choice and flexibility, both in terms of our product
offer, and by increasing the flexibility of flight and hotel
sourcing, mean that we can deliver growth by offering value and
choice, without additional risk capacity.
Climate change is a pressing global challenge. There is an
urgency to act and for everyone to play a role in the transition to
a low carbon economy. TUI has committed to Science Based Targets,
in order to significantly reduce carbon emissions in our airline,
hotels and cruise business by 2030, with a further commitment to
reach net-zero by 2050 at the latest. In addition, our
Sustainability Agenda sets out our wider commitments to
sustainability, in terms of People, Planet and Progress.
Also see page 26 - 27 and the Non-financial Group Declaration
from page 81 onwards.
1 Based on WTTC Economic Impact Research 2023 - Travel &
Tourism sector contributed 10.3 % to global GDP in 2019; this
decreased to 5.3 % in 2020, 6.1 % in 2021 and 7.6 % in 2022, due to
government restrictions on mobility. However, Travel & Tourism
GDP is expected to reach 95 % of 2019 levels in 2023.
2 Based on UNWTO international travel arrivals CAGR versus
global GDP CAGR for 2015 to 2019
3 UNWTO World Tourism Barometer September 2023
TUI's business model - foundation for success
TUI is a leisure experiences group covering the entire holiday
journey, serving millions of customers, operating 126 aircraft, 424
hotels (including our concept hotels) and 16 cruise ships4, as well
as a sizeable experiences, transfers and tours business. The group
is structured into two divisions - Holiday Experiences and Markets
& Airlines.
Holiday Experiences delivers differentiated content in hotels,
cruises, experiences, transfers and tours:
-- Our hotel portfolio consists of own and differentiated
leisure brands such as Robinson, TUI Magic Life, TUI Blue and TUI
Suneo, complemented by JV hotel brands such as Riu, Atlantica, Blue
Diamond and Grupotel. Theportfolio is well-diversified in terms of
product offer, destination mix and ownership models, and benefits
frommulti-channel and multi-source market distribution via Markets
& Airlines, direct to customer, and via thirdparties such as
Online Travel Agents (OTAs) and tour operators mainly outside our
own source markets.
-- Our three cruise brands (Mein Schiff, Hapag-Lloyd Cruises,
Marella) cover the cruises sector from premiumall-inclusive to
luxury to expeditions, with leading positions in the
German-speaking and UK markets5, benefittingfrom multi-channel
distribution via Markets & Airlines, direct to customer and via
third parties.
-- TUI Musement is one of the largest6 digital providers in the
online intermediary market for tours and activities, including
experiences (excursions, activities and tickets) and tous
(multi-day tours), connecting ourown and third party product
portfolio in destinations with Markets & Airlines customers,
direct to customer and viathird parties; as well as providing
transfers and customer support in the destination.
4 As at 30 September 2023, including concept hotels in third
party properties
5 As measured by capacities
6 As measured by market share
Markets & Airlines distributes and fulfills holidays to a
large customer base in more than a dozen source markets. TUI is
(according to consumer surveys for unaided brand awareness and
consideration) a leading tourism brand7. We differentiate ourselves
from the competition (such as tour operators, OTAs, hotels and
airlines) based on our products and services. By covering the whole
customer journey, TUI holds multiple digital and physical
touchpoints with its customers, and therefore delivers a strong
blend of digital and human interaction. This enables TUI to follow
a customer centric approach, aiming to create long-term
relationships with its customers.
As a vertically integrated group, it is also important to
leverage cross-sell and upsell potential across all divisions, and
the power of our brand in order to reduce cost of sales. Our
Central Customer Ecosystem creates the basis of this, covering all
aspects of marketing, sales and service.
TUI's strategy for profitable growth
As demand recovers post-pandemic TUI is committed to delivering
profitable growth. We have already laid the foundations for this,
and delivery is underway.
Our strategy is defined across both of our business divisions,
embedded onto one central customer ecosystem, underpinned by our
Sustainability Agenda and by our people. The framework for
implementation can be visualized with our "strategy diamond", based
on five key elements - Holiday Experiences, Markets & Airlines,
Central Customer Ecosystem, Sustainability and People.
7 As measured by brand consideration in TUI brand performance
tracking, completed by Metrixlab
HOLIDAY EXPERIENCES
Our Holiday Experiences strategy focusses on asset-right,
profitable growth in differentiated content and expanding the
customer base with multi-channel distribution, in particular
outside Markets & Airlines.
In Hotels & Resorts, product growth is delivered by
expanding our portfolio in new and existing destinations. In
financial year 2023 we added 41 new hotels to our pipeline. Growth
in hotels is based on an asset-right and scaleable approach -
through our joint ventures, the TUI Global Hotel Fund, launched by
TUI and partners, and management and franchise contracts. We have
continued to develop and enhance our own global distribution
platform, with a focus on global distribution alongside our
existing source markets; and we are also expanding our appeal
across customer segments, with launch of new brands.
Product growth in Cruises is driven by investment into new-build
ships by our TUI Cruises JV, with three new ships being delivered
over the next three years. In addition, we are continuing Marella's
fleet upgrade, by replacing older ships with newer, larger ones,
including the launch of Voyager in June 2023 (previously Mein
Schiff Herz). Customer growth will be driven by a broader marketing
positioning for both TUI Cruises and Marella.
In TUI Musement, we have realigned our strategy to digitalise
all three business sectors - experiences (excursions, activities
and tickets), transfers and tours (multi-day tours), with a strong
focus on delivering profitable growth from the marketing of our own
products across all channels, and investing in particular in more
of our own products. In this way, we simultaneously differentiate
and position ourselves in the attractive producer margin area. The
digitization of the Experiences segment has already been completed
(with the acquisition in 2018 and subsequent integration of the
Musement platform), and we are now focusing on the Tours and
Transfers segments. This will help us generate further customer
growth.
MARKETS & AIRLINES
Our Markets & Airlines strategy focusses on strengthening
and leveraging our capabilities (including brand and distribution,
differentiated and exclusive product, quality and service) and
market positions, with growth delivered from new products and new
customers, based on scaleable common platforms. Product growth is
based on an expanded offer of accommodation only, flight only, car
rentals, ancillaries and tours, as well as increasing the volume
and proportion of dynamic packaging and supply, to deliver choice,
flexibility and hence growth, without increasing risk capacity.
Customer growth is driven by this increase in choice and
flexibility, as we enlarge our appeal across more customer
segments, supported by our brand and marketing strategy, and
initiatives such as the relaunch of First Choice in the UK which
targets new, especially younger, customers.
To increase efficiency and scaleability, we grow based on common
platforms and central production. This year, we rolled-out our
group-wide platforms for accommodation only, flight only and
dynamic packaging to more markets, as well as continuing to develop
and enhance the capabilities of these platforms. In TUI Airline, we
operate a strong leisure network, with a high degree of integration
with our Markets, on a modern and fuel efficient fleet. We leverage
these strengths and continue to deliver transformation through
increased flexibility and cost efficiency.
CENTRAL CUSTOMER ECOSYSTEM
As well as growing customer volumes, our marketing and
distribution strategy focuses on maximizing customer value,
leveraging the synergies between both of our business divisions,
and lowering our cost of distribution. As the basis for this, we
will continue to strengthen and leverage the TUI brand in existing
and untapped customer segments and broaden our brand image for our
growth products (such as cities, tours, accommodation only and
experiences). We continue to enhance our app with a focus on native
bookflows, targeting futher growth in the proportion of digital
sales made in-app. Our customer relation management strategy is
focused on growing the marketing base through improved permission
capture, extension of automated marketing to all products and
channels, and growing revenue by improved cross-channel marketing.
We also continue to streamline the digital customer experience via
the operation of a single customer account and implementing a
common payment process. All of this facilitates a full product
suite offering and cross-selling, and increases the number of
holiday and experience touchpoints we have with the customer,
whilst at the same time reducing our cost of sales.
Sustainability agenda 'People, Planet, Progress'
As an industry leading Group, we want to set the standard for
sustainability in the market. We believe that sustainable
transformation should not be viewed solely as a cost factor, but
that sustainability pays off - for society, for the environment,
and for economic development. Our strategy is therefore underpinned
by clear science-based goals and targets on sustainability. TUI's
Sustainability Agenda consists of three building blocks - People,
Planet and Progress.
For details please refer to page 82.
PEOPLE
-- We will ensure that local people and communities benefit from
tourism and the local supply chain.
-- We will empower a generation of sustainability changemakers.
TUI Care Foundation will drive positivesocial and environmental
impacts in tourism communities around the world.
PLANET
-- In 2023, our emission reduction targets were recognised by
the Science Based Targets initiative (SBTi). TUI commits to
implementing these targets in line with the latest climate science
findings.
-- We will achieve net-zero emissions across our operations and
supply chain by 2050 at the latest. We willchange the way we use
natural resources and become a circular business.
PROGRESS
-- Together with our partners, we will co-create the
next-generation sustainable business model for thetourism industry
through our Destination Co-Lab Rhodes.
-- We will enable our customers to make sustainable holiday
choices in every stage of the customer journey.
We already operate one of Europe's most carbon-efficient
airlines and we aim to continuously improve our environmental
performance. We will build on the progress we have already made and
reduce emissions further through our commitment to science-based
targets and our emission reduction roadmap.
In 2023, relative carbon emissions of our airlines decreased by
3.9 %. This improvement was primarily driven by higher load factors
versus 2022, as well as our re-fleeting programme, with older
aircraft being replaced by new, more carbon-efficient aircraft. In
2023, we still operated 19 Boeing 787 aircraft. In the period under
review, our Boeing 737 Max fleet grew from 35 to 37 aircraft.
Further information is provided on pages 85 to 90
People strategy - digital, engaging, inclusive
Our employees make a key contribution to TUI Group's success.
Our goal is to secure that success in the long term. In the period
under review, we focussed on the continuation of our strategic
initiatives defined in the framework of our People Strategy.
The vision of our People Strategy is to be digital, engaging and
inclusive.
In order to implement our strategy, six relevant areas of action
have been defined:
1. Simplification, harmonisation and focus
2. Digital transformation
3. Supporting growth
4. Positive employee experience
5. Diversity, equity and inclusion
6. Facilitating top performance
We are thus seeking to create a framework that empowers our
employees to deliver the best performance and succeed as a
team.
Further information is provided on pages 91 to 98.
TUI is set for profitable growth
Having driven the recovery post-pandemic, delivered our Global
Realignment Programme and defined our strategy, TUI is well
positioned and committed to capturing market growth. The execution
of our strategy is well underway. As a result, TUI will continue to
grow its differentiated Holiday Experience and Markets &
Airlines product offerings, grow the volume and value of its
customer ecosystem, increase flexibility for our customers and
operations, and maximise efficiencies and synergies within the
business.
Corporate Profile
Group Structure
TUI AG parent company
TUI AG is TUI Group's parent company headquartered in Hanover.
It holds direct or, via its affiliates, indirect interests in the
principal Group companies conducting the Group's operating business
in individual countries. Overall, TUI AG's group of consolidated
companies comprised 266 direct and indirect subsidiaries at the
balance sheet date. A further 20 affiliated companies and 27 joint
ventures were included in TUI AG's consolidated financial
statements on the basis of at equity measurement.
For details on principles and methods underlying the
consolidated financial statements and TUI Group shareholders, see
page 190 and 281.
Organisation and management
TUI AG is a stock corporation under German law, whose basic
principle is two-tiered management by two boards, the Executive
Board and the Supervisory Board. The Executive and Supervisory
Boards cooperate closely in governing and monitoring the Company.
The Executive Board is responsible for the overall management of
the Company.
The appointment and removal of Board members are based on
Sections 84 et seq. of the German Stock Corporation Act in
combination with Section 31 of the German Co-Determination Act.
Amendments to the Articles of Association are effected on the basis
of the provisions of Sections 179 et seq. of the German Stock
Corporation Act in combination with Section 24 of TUI AG's Articles
of Association if applicable.
Executive Board and Group Executive Committee
As at the balance sheet date, the Executive Board of TUI AG
consisted of the CEO and four other Board members.
For details on Executive Board members, see page 117.
The Executive Board is the Company's central decision-making
body. In addition, there is the Group Executive Committee (GEC),
which as of 30 September 2023 consisted of twelve members,
including the Executive Board members, and is chaired by the
Chairman of the Executive Board. As a rule, the Group Executive
Committee participates in all Board meetings, with the exception of
items dealing with personnel matters relating to the composition of
the Senior Leadership Team. The GEC was set up to enhance informed,
effective decision-making and to create a flat hierarchy and strong
execution environment. It reflects a culture of openness and
information sharing.
For further details, also see:
www.tuigroup.com/en-en/investors/corporate-governance
TUI Group reporting structure
TUI Group is a global integrated tourism group. Its core
businesses, Holiday Experiences and Markets & Airlines, are
clustered into the segments Hotels & Resorts, Cruises and TUI
Musement as well as three regions: Northern, Central and Western
Region. TUI Group also comprises All other segments. The Group's
reporting structure thus remained unchanged year-on-year in the
reporting period.
Holiday Experiences
Holiday Experiences comprises our hotel, cruise and destination
activities.
Hotels & Resorts
The Hotels & Resorts segment comprises TUI Group's
diversified portfolio of Group hotel brands and hotel companies.
The segment includes hotels majority-owned by TUI, joint ventures
with local partners, stakes in companies giving TUI significant
influence, and hotels operated under management contracts.
In financial year 2023, Hotels & Resorts comprised a total
of 360 hotels with 285,127 beds. 330 hotels, i. e. the majority,
are in the four- or five-star categories. 53 % were operated under
management contracts, 38 % were owned by one of the hotel
companies, 8 % were leased and 1 % of the hotels were managed under
franchise agreements.
Hotels & Resorts portfolio
Hotel brand 3 stars 4 stars 5 stars Total Beds Main sites
hotels
Riu 2 45 50 97 105,712 Spain, Mexico, Caribbean, Cape Verde, Portugal, Morocco
Robinson 1 17 8 26 16,016 Spain, Greece, Turkey, Austria, Maledives
Blue Diamond 2 14 21 37 35,329 Cuba, Dom. Rep., Jamaica, Mexico, Saint Lucia
Others 25 122 53 200 128,070 Spain, Greece, Turkey, Egypt
Total 30 198 132 360 285,127
As at 30 September 2023
Riu is the largest hotel group in the portfolio of Hotels &
Resorts in terms of the number of hotels. The Mallorca-based
enterprise primarily operates four- and five-star hotels in Spain,
Mexico and the Caribbean. Its three product lines Riu Classic
Hotels, Riu Plaza Hotels (city hotels) and Riu Palace Hotels
(premium segment) target different customer groups.
Robinson operates mainly four- and five-star club hotels and is
a leading German provider of club holidays in terms of the number
of resorts. Most of its clubs are located in Spain, Greece, Turkey,
the Maldives and Austria.
Blue Diamond is a hotel chain in the Caribbean. The Hotels &
Resorts segment comprises 37 resorts in the Caribbean and
Mexico.
Other hotel brands include the TUI signature hotels TUI Blue,
TUI Magic Life and TUI Suneo.
TUI Blue, present in about 20 countries, is TUI Group's global
hotel brand and targeting an international audience. After five
hotel openings in summer 2023, TUI Blue continues its growth path,
primarily in new holiday destinations in Asia and Africa.
TUI Magic Life is an all-inclusive brand, targeting an
international audience seeking club holidays with different
profiles in beachfront locations.
TUI Suneo offers value for money hotels.
Our hotels operated by third-party hoteliers include a total of
64 hotels belonging to our international concept brands. This
brings the total number of TUI Group portfolio hotels to 424.
Cruises
The Cruises segment comprises the joint venture TUI Cruises,
which operates cruise ships under the brands Mein Schiff and
Hapag-Lloyd Cruises, and Marella Cruises. With their combined fleet
of 16 vessels as at the reporting date, the three cruise lines
offer different service concepts to serve different target
groups.
Cruise fleet by ownership structure
Owned Leases Total
TUI Cruises (Joint Venture) 11 0 11
Mein Schiff 6 0 6
Hapag-Lloyd Cruises 5 0 5
Marella Cruises 3 2 5
Total 14 2 16
As at 30 September 2023
TUI Cruises is a joint venture in which TUI AG and the US
shipping company Royal Caribbean Cruises Ltd. each hold a 50 %
stake. With its six 'Mein Schiff' vessels, TUI Cruises is
top-ranked in the German-speaking market for cruises. The Insight
Guides (formerly Berlitz Cruise Guide), an international reference
for cruise ship ratings, ranked all six ships operated by TUI
Cruises into high positions in the four-stars category. The Mein
Schiff Herz was transferred to the Marella Cruises fleet in Q3
2023. The commissioning of three newly built ships is planned for
the coming years, which will bring the fleet to a total of nine
ships. After the pandemic years, TUI Cruises is thus continuing its
growth as planned.
The traditional Hapag-Lloyd Cruises brand, which is also part of
TUI Cruises, is a leading provider of luxury and expedition cruises
in German-speaking markets. At the reporting date, the fleet
comprised two luxury liners and three expedition cruise ships. They
are the only ships worldwide to have each been awarded a five-star
rating by Insight Guides. This makes Hapag-Lloyd Cruises the winner
of the title of best fleet worldwide.
With a fleet of five ships, Marella Cruises offers voyages in
different segments, including family and city cruises, in the
British market. The former Mein Schiff Herz joined the fleet as
Marella Voyager in June 2023.
TUI Musement
The TUI Musement segment delivers local services at our holiday
destinations around the world. To do this TUI is present in
numerous holiday destinations with its own staff. TUI Musement's
business model for the distribution of experiences (excursions,
activities), tickets and tours (multi-day tours) is based on an
online platform open to customers and suppliers. In addition,
transfers are provided in the destinations.
TUI Musement serves three customer groups:
-- TUI customers: Providing services to our guests in the
destination via service and operation teams andtour guides as well
as via the TUI Digital Assistant App and the TUI Experience
Center.
-- Strategic B2B customers: Digital and on-site services for
partners from various sectors of the travel industry, such as
airlines, cruise lines, ground transport, OTAs and tour
operators.
-- B2C Open Market clients: Global distribution of tours,
activities and experiences for travellers.
Markets & Airlines
With our three regions - Northern, Central and Western - we have
well-positioned sales and marketing structures offering our
customers attractive holiday experiences. Our sales activities are
based on online and offline channels. The travel agencies include
Group-owned agencies as well as joint ventures and agencies
operated by third parties. In order to offer our customers a wide
choice of hotels, our source market organisations have access to a
large portfolio of TUI hotels. They also have access to third-party
hotel bed capacity, some of which has been contractually
committed.
Our own flying capacity continues to play a key role in our
business model. Thanks to a combination of Group-owned and
third-party capacity, we offer tailored travel programmes for each
individual source market region and can respond flexibly to changes
in customer preferences. Balanced management of flight and hotel
capacity enables us to develop destinations and optimise the
margins of both service providers.
Northern Region
The Northern Region segment comprises tour operator activities
and airlines in the UK, Ireland and the Nordics. Our strategic
venture Sunwing Travel Inc., Canada, sold its tour operation
business, which was previously included in this segment, in May
2023.
Central Region
The Central Region segment comprises the tour operators and
airlines in Germany and the tour operator activities in Austria,
Poland, and Switzerland.
Western Region
The Western Region segment comprises the tour operators and
airlines in Belgium and the Netherlands and the tour operator
activities in France.
All other segments
'All other segments' includes amongst others the corporate
centre functions of TUI AG and the interim holdings, the Group's
real estate companies and the Group's key tourism functions. The
future markets business, which has also been shown in All other
segment so far, was resegmented to Hotels & Resorts, TUI
Musement and Central Region in financial year 2023.
Research and development
As a tourism service provider, the TUI Group does not engage in
research and development activities comparable with manufacturing
companies. This sub-report is therefore omitted.
Value-oriented Group Management
Management system and key performance indicators
A standardised management system has been created to implement
value-driven management across the Group as a whole and in its
individual business segments. The value-oriented management system
is an integral part of consistent Group-wide controlling and
planning processes.
Our key financial performance indicators for tracking our
earnings position are revenue and underlying EBIT. Accordingly,
underlying EBIT represents the segment indicator as defined by IFRS
8.
We define the EBIT in underlying EBIT as earnings before
interest, taxes and expenses for the measurement of the Group's
interest hedges. EBIT by definition includes impairment of
goodwill.
Underlying EBIT has been adjusted for income and expense items
which, due to their level and frequency, impact or distort the
assessment of operating profitability in the segments and the
Group. These one-off items include gains on disposal of
investments, major gains and losses from the disposal of assets,
and major restructuring and integration expenses. The indicator is
additionally adjusted for all effects from purchase price
allocations, ancillary acquisition costs and conditional purchase
price payments. The reconciliation to underlying EBIT also adjusts
for goodwill impairments.
To track the Group's financial position in financial year 2023,
we identified net capital expenditure and financial investments as
well as TUI Group's net financial position as key performance
indicators. In addition, we monitor the Group's leverage ratio as a
further indicator of financial stability.
Key management variables used for regular value analysis are
Return On Invested Capital (ROIC) and Economic Value Added. ROIC is
compared with the weighted average cost of capital before tax
(WACC).
We regard specific carbon emissions (in g CO2 / pkm) from our
aircraft fleet as a key non-financial performance indicator.
To track business performance in our segments in the course of
the year, we also monitor other non-financial performance
indicators, such as the customer numbers in tour operation,
capacity or passenger days, occupancy and average prices in Hotels
& Resorts and Cruises.
Information on operating performance indicators is provided in
the sections on Segmental performance (page 67), the Non-financial
Group declaration (page 81) and in the Report on Expected
Developments (page 55).
Cost of capital
The cost of capital is calculated as the weighted average cost
of equity and debt (WACC). While the cost of equity reflects the
return expected by investors from TUI shares, the cost of debt is
based on the average borrowing costs for TUI Group. The cost of
capital always shows pre-tax costs, i. e. costs before corporate
and investor taxes. The expected return determined in this way
corresponds to the same tax level as the underlying EBIT included
in ROIC. For financial year 2023, we apply a cost of capital of TUI
Group of 11.76 % (previous year: 12.63 %).
ROIC and Economic Value Added
ROIC is calculated as the ratio of underlying earnings before
interest and taxes (underlying EBIT) to average invested
interest-bearing capital (invested capital).
Given its definition, this performance indicator is not
influenced by any tax or financial factors and has been adjusted
for one-off effects. From a Group perspective, invested capital is
derived from liabilities, comprising equity (including
non-controlling interests) and the balance of interest-bearing
liabilities and interest-bearing assets with an adjustment for the
seasonality of the Group's net financial position. The cumulative
amortisations of purchase price allocations are then added to the
invested capital.
Apart from ROIC as a relative performance indicator, Economic
Value Added is used as an absolute value-oriented performance
indicator. Economic Value Added is calculated as the product of
ROIC less associated pre-tax capital costs (WACC) multiplied by
interest-bearing invested capital.
In the year under review, TUI Group's ROIC amounted to 19.10 %
(previous year: 7.49 %). Taking into account the Group's weighted
average cost of capital of 11.76 %, this resulted in an Economic
Value Addded of EUR 375.6 m (previous year: negative Economic Value
Addded of - EUR 280.7 m).
Invested Capital
EUR million Notes 2023 2022
Equity 1,947.2 645.7
Subscribed capital (24) 507.4 1,785.2
Capital reserves (25) 9,090.1 6,085.9
Revenue reserves (26) - 8,474.6 - 8,432.7
Non-controlling interest (29) 824.3 787.3
Silent Participations (27) 0.0 420.0
plus interest bearing financial liability items 4,922.5 5,921.0
Pension provisions and similar obligations (30) 670.4 601.4
Non-current financial liabilities (32) 1,198.5 1,731.4
Current financial liabilities (32) 98.5 319.9
Derivative financial instruments (41) 37.0 60.7
Lease liabilities (IFRS 16) (32) 2,918.1 3,207.5
less financial assets 1,926.4 1,669.6
Derivative financial instruments (41) 268.4 259.1
Cash and cash equivalents (22) 2,060.3 1,736.9
Other financial assets 97.7 173.5
Seasonal adjustment1 - 500.0 - 500.0
less overfunded pension plans 98.5 163.4
Invested Capital before addition of effects from purchase price allocation 4,844.7 4,733.7
Invested Capital excluding purchase price allocation prior year 4,733.7 5,569.7
Ø Invested capital before addition of effects from purchase price allocation2 4,789.2 5,151.7
Invested Capital before addition of effects from purchase price allocation 4,844.7 4,733.7
plus effects from purchase price allocation 336.4 315.4
Invested Capital 5,181.1 5,049.1
Invested Capital prior year 5,049.1 5,866.6
Ø Invested Capital2 5,115.1 5,457.8
1 Adjustment to net debt to reflect a seasonal average cash
balance
2 Average value based at beginning and year-end
ROIC
EUR million 2023 2022
Underlying EBIT 977.2 408.7
Ø Invested Capital* 5,115.1 5,457.8
ROIC% 19.10 7.49
Weighted average cost of capital (WACC)% 11.76 12.63
Value added 375.6 - 280.7
* Average value based on balance at beginning and year-end
Group performance indicators used in the Executive Board
remuneration system
JEV-relevant EBT at constant currency
Group earnings before interest and taxes (EBIT) on a constant
currency basis, weighted at 75 %, are used to determine annual
variable remuneration (JEV) for the Executive Board. EBIT is
quantified on a constant currency basis in order to avoid any
distortion caused by currency-driven translation effects when
measuring actual management performance.
Group earnings before interest (including the result of the
measurement of the Group's interest hedges) and taxes on a constant
currency basis developed as follows in the financial year under
review:
Reconciliation EBIT
EUR million 2023
EBIT 999.3
FX effects from translation to budget rates - 8.3
EBIT at budget rates 991.1
JEV-relevant cash flow before dividend
The second Group key figure taken into account in the JEV in
accordance with the remuneration system is the cash flow figure
'cash flow before dividends', which is included in the calculation
with a weighting of 25 %. For these purposes, cash flow before
dividends is generally calculated using a simplified approach based
on the management cash flow statement. The TUI Group's EBIT is also
generally adjusted for currency effects for this purpose. This
basic rule was deviated from for the 2023 financial year. The
deviations are explained below:
When adopting the resolution on the target setting for the JEV
in September 2022, the Supervisory Board of TUI AG took into
account the particular effects on the originally planned cash flow
component resulting from the changes in accounting regulations that
have occurred since the remuneration system was established. In
September 2022, the Supervisory Board decided to use total cash
flow as the second Group key performance indicator for determining
the target achievement of the JEV.
The total cash flow corresponds to the cash flow after dividends
(EUR 571.0 m) plus the cash inflow from capital increases through
the issue of new shares (EUR 1,760.9 m) less payments for financing
/ leasing (EUR 2,021.4 m). For the 2023 financial year, it amounts
to EUR 310.5 m. The cash flow after dividends in turn results from
the cash flow before dividends (EUR 708.1 m) less a coupon on a
silent partnership (EUR 16.8 m) and dividends from subsidiaries to
non-controlling interests (EUR 120.3 m).
When adopting the resolution on target achievement, the
Supervisory Board also exercised its right to adjust the conditions
of the JEV at its reasonable discretion in the event of
extraordinary events or developments in order to take account of
rare special situations that were not adequately covered by the
defined targets. The cash inflow from capital increases through the
issue of new shares (EUR 1,760.9 m) was therefore deducted from the
above-mentioned total cash flow (EUR 310.5 m) and the following
items were increased: Payments for the revolving credit line (EUR
561.2 m), payments for the repayment of hybrid capital (EUR 682.4
m) and payments for the repayment of promissory note and WSF loans
(EUR 241.7 m). Taking into account payments for other items, the
total cash flow excluding one-off financing effects totalled EUR
33.5 m. The following items were added back in order to reconcile
to the cash flow relevant to JEV: Dividend from Riu II to Riu for
the establishment of a new subsidiary (EUR 75.0 m), payments for
the investment in a new subsidiary (EUR 73.5 m), payments already
received in the previous year from the Riu earn-out (EUR 17.1 m)
and other payments (EUR 7.4 m). This results in a JEV-relevant cash
flow of EUR 206.5 m.
As a result of the adjustments to take account of the special
situations, the cash flow relevant to JEV fell by around EUR 100 m
to EUR 206.5 m, which also led to a lower target achievement for
JEV.
Pro-forma underlying earnings per share
The measurement of the long-term incentive plan (LTIP) for the
Executive Board is exclusively based on the average development of
pro forma underlying earnings per share from continuing operations
(LTIP-relevant EPS).
The table below shows TUI Group's pro forma underlying earnings
per share. The normalised Group tax rate for the year under review
is 18 %, the prior year rate was reduced to 0 % against the
background of the considerable decline in earnings caused by
COVID-19.
Pro forma underlying earnings per share from continuing
operations (LTIP-relevant EPS) developed as follows in the
financial year under review:
Pro forma underlying earnings per shares TUI Group
EUR million 2023 2022
adjusted
Underlying EBIT 977.2 408.7
less: Net interest expense - 448.2 - 465.9
Underlying profit before tax 529.1 - 57.1
Income taxes (18 % assumed tax rate, prior year 0 %) 95.2 0.0
Underlying Group profit 433.8 - 57.1
Minority interest 149.9 64.6
Underlying Group profit attributable to TUI shareholders of TUI AG 283.9 - 121.7
Numbers of shares at FY end (in million) 384.3 273.1
Underlying earnings per share (EUR) 0.74 - 0.45
Earnings per share for all periods presented were adjusted for
the effect of the capital reduction carried out in February 2023 at
a ratio of 10:1 and the effect of the bonus component of
subscription rights issued as part of the capital increase in March
2023.
Risk 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. In order to seize market opportunities
and leverage the potential for success, risk must be accepted to a
reasonable degree. Risk management is therefore an integral
component of the Group's Corporate Governance.
At TUI, managing risk has always been a vital part of how we
conduct our business. At TUI we incorporate all elements of a fully
developed risk management system. It is not limited to identifying
only those developments that could jeopardise the companies
continued existence, it also includes the active management of all
other material risks. Risk management is limited to risks only,
short-term chances or opportunities are managed in the controlling
process, whereas Group Strategy continuously identifies and
monitors long-term chances. Legal risks are reported in a separate
legal risk report.
In financial year 2023, the Group has conducted a Climate
Scenario Analysis following the recommendations of the Task Force
for Climate Related Financial Disclosures (TCFD) initiative.
Certain risks and opportunities resulting from projected climatical
changes have been identified and assessed. Given the importance of
climate change, TUI is using its established Risk Management
Process to facilitate the management of these risks. Given the
variety of potential impacts on our business and to report on these
elements centrally, we have decided to set up a new principal risk
"Climate change impacting our business model" (see principal risk
10 on page 48) These topics have been discussed intensively in two
of our Group Risk Oversight Committee meetings and results have
been presented to both, the Group Executive Committee and the Audit
Committee.
Risk Governance
Audit Committee - Oversee & Review
The Audit Committee, as a subcommittee of the Supervisory Board,
is overseeing the appopriateness and effectiveness of the risk
management system. The Head of the Group Risk team reports minimum
once a year on the system itself, on topics which have been
discussed in the Group Risk Oversight Committee, the principal
risks and their changes. The Committee considers the adequacy and
the effectiveness of the risk management system and reviews and
acknowledges the risk appetite on a principal risk level as
formulated by the Executive Board.
Executive Board - Direct & Assure
With oversight by the Supervisory Board, the Executive Board
determines the strategic direction of the Group and agrees the
nature and extent of the risks it is willing to take to achieve its
strategic objectives.
Ultimate accountability for the Group's risk management rests
with the Executive Board and therefore it has established and
maintains a risk management system to identify, assess, manage and
monitor risks which could threaten the existence of the company or
have a significant impact on the achievement of its strategic
objectives: these are referred to as the principal risks of the
Group. This risk management system includes an internally-published
risk management policy which helps to reinforce the tone set from
the top on risk, by instilling an appropriate risk culture in the
organisation whereby employees are expected to be risk aware,
control minded and to 'do the right thing'. The policy provides a
formal structure for risk management to embed it in the fabric of
the business. Each principal risk has assigned to it a member of
the Executive Board as overall risk sponsor to ensure that there is
clarity of responsibility and to ensure that each of the principal
risks are understood fully and managed effectively.
The Executive Board reports to the Audit Committee of the
Supervisory Board on the adherence to both the German legal and the
UK listing requirements, the overall risk position of the Group, on
the individual principal risks and their management, and on the
performance and effectiveness of the risk management system as a
whole.
Group Risk Oversight Committee - Review & Communicate
On behalf of the Executive Board, the Group Risk Oversight
Committee (the GROC), ensures that business risks are identified,
assessed, managed and monitored across the businesses and functions
of the Group. As a rule meeting on a quarterly basis, the GROC's
responsibilities include considering the principal risks to the
Group's strategy and the risk appetite for each of those risks,
assessing the operational effectiveness of the mitigation in place
to manage those risks and any action plans to further mitigate
them, as well as reviewing the bottom-up risk reporting from the
businesses themselves to assess whether there are any heightened
areas of concern.
Chaired by the Chief Financial Officer, senior operational and
finance management as well as those Central Functions which are
fulfilling the role as a second line are represented on the
committee.
Leaders of Central Functions as well as senior executives from
the Group's major businesses are invited on a rotational basis to
present on their risk and control framework. This allows members of
the GROC to ask questions on the processes in place, the risks
present in each business or function, as well as any new or
evolving risks which may be on their horizon. It also provides
opportunity to seek confirmation that an appropriate risk culture
continues to be in place in each of the major businesses and that
there are no gaps between risk management at business level and at
function level.
The GROC reports biannually to the Executive Board to ensure
that it is kept abreast of changes in the risk landscape and
developments in the management of principal risks, and to
facilitate regular quality discussions on risk management at the
Executive Board meetings.
Group Risk team - support & report
The Executive Board has also established a Group Risk team to
ensure that an adequate risk management system is set up and
functions effectively and that the risk management policy is
implemented appropriately across the Group. The team facilitates
the risk management process by providing guidance, support and
challenge to management whilst acting as the central point for
coordinating, monitoring and reporting on risk across the Group. It
also supports the GROC in fulfilling its duties and the reporting
to both the Executive and Supervisory Boards. Additionally, Group
Risk is responsible for the operation of the risk and control
software that underpins the Group's risk reporting and risk
management process.
Sector Risk & Control - COORDINATE, support & report in
Sector
Sector risk and control teams work as the connecting element
between businesses and the Group. They facilitate the risk
management process in their respective areas by providing guidance
support and reporting. They challenge management in identifying and
assessing risks, hence ensuring proper sector governance.
Businesses & functions - Identify, assess & manage
Every business and function in the Group is required to adopt
the Group Risk Management policy. In order to do this, each either
has their own risk committee or includes risk as a regular agenda
item at their Board meetings to ensure that it receives the
appropriate senior management attention within their business. In
addition, the businesses each appoint a Risk Champion, who promotes
the implementation of the risk management policy within their
business and ensures its effective application. The Risk Champions
are in close contact with the Group Risk team and are critical both
in ensuring that the risk management system functions effectively,
and in implementing a culture of continuous awareness and
improvement in risk management and reporting.
Risk Reporting
The Group Risk team applies a consistent risk reporting
methodology across the Group. This is underpinned by risk and
control software which reinforces clarity of language, visibility
of risks, mitigation and actions and accountability of ownership.
Although the process of risk identification, assessment and
response is continuous and embedded within the day-to-day
operations of the businesses and functions, it is consolidated,
reported and reviewed at varying levels throughout the Group on at
least a quarterly basis.
Risk Identification: Management closest to the risks identify
those that are relevant to the pursuit of the strategy within their
business area.
A risk owner is assigned to each risk, who has the
accountability and authority for ensuring that the risk is
appropriately managed.
Risk Assessment: The methodology used is to initially assess the
gross (or inherent) risk. This is essentially the downside, being
the product of the impact together with the likelihood of the risk
materialising if there is no mitigation in place to manage or
monitor the risk. In line with the Group budgeting horizon, risk
assessment is made for a timeframe of one year with longer horizons
where necessary, e. g. in case of longer term projects. The key
benefit of assessing the gross risk is that it highlights the
potential risk exposure if mitigation were to fail completely or
not be in place at all. Both impact and likelihood are scored using
the criteria shown below.
Impact Assessment
minor moderate SIGNIFICANT major SERIOUS
Impact on Impact on Impact on Impact on Impact on
Financials (Sales Financials (Sales Financials (Sales and Financials (Sales Financials (Sales
and / or Costs) and / or Costs) / or Costs) and / or Costs) and / or Costs)
Reputation Reputation Reputation Reputation Reputation
Technology Technology Technology Technology Technology
reliability reliability reliability reliability reliability
Compliance Compliance Compliance Compliance Compliance
Health & Safety Health & Safety Health & Safety Health & Safety Health & Safety
standards standards standards standards standards
Programme Delivery Programme Delivery Programme Delivery Programme Delivery Programme Delivery
Likelihood Assessment
rare unlikely possible likely almost
certain
< 10 % 10 - < 30 - < 60 - < 80 %
30 % 60 % ? 80 %
The next step in the risk reporting process is to assess and
document the mitigation currently in place to reduce the likelihood
of the risk materialising and / or its impact if it does.
Consideration of these then enables the current (or residual) risk
score to be assessed, which is essentially the reasonably
foreseeable scenario. This measures the impact and likelihood of
the risk with the mitigation in place and effective. The key
benefit of assessing the current risk score is that it provides an
understanding of the current level of risk faced today and the
reliance on the mitigation in place.
Risk Response: If management is comfortable that the current
risk position is within the Group's appetite, the risk is accepted
and no further action is required to further reduce it. The
mitigation continues to be operated and management monitors the
risk, the mitigation and the risk landscape to ensure that it
remains at an acceptable level. If management assesses that the
current risk score is too high, an action plan will be drawn up
with the objective of introducing new or stronger mitigation that
will further reduce the impact and / or likelihood of the risk to
an acceptable level. This is known as the target risk score and is
the parameter by which management can ensure the risk is being
managed in line with their overall risk appetite. The risk owner
will normally be the individual tasked with ensuring that this
action plan is implemented within an agreed timetable. Each
business and function will continue to review their risk register
on an ongoing basis through the mechanism appropriate for their
business e. g. local Risk Committee.
This bottom-up risk reporting is considered by the GROC
alongside the Group's principal risks. New risks are added to the
Group's risk register if deemed to be of a significant nature so
that the ongoing status and the progression of key action plans can
be managed in line with the Group's targets and expectations.
Ad hoc risk reporting
Whilst there is a formal process in place for reporting on risks
on a quarterly basis, the process of risk identification,
assessment and response is continuous and therefore if required,
risks can be reported to the Executive Board outside of the
quarterly process, should events dictate that this is necessary and
appropriate. Ideally such ad hoc reporting is performed by the
business or function which is closest to the risk, but it can be
performed by the Group Risk team if necessary.
Principal Risks
To keep a manageable overview of the risks reported in the
process, and to understand the changes in our risk landscape, we
map individual risk into a cluster of similar risks, which we
report as principal risks. Principal risks are subject to the risk
appetite assessment and are reported separately in this risk
report.
Oversight over of the Risk Management System
Based on the work of the GROC and the Group Risk team, the
Executive Board regularly reports to the Audit Committee of the
Supervisory Board on the performance of the risk management system.
Additionally, the Audit Committee receives assurance from Group
Audit over a selection of principal risks, processes and business
transformation initiatives most critical to the Group's continued
success.
In accordance with Section 317 (4) HGB (German Commercial Code),
the external auditor of TUI AG has audited the early detection
system for risks, being a part of the Risk Management System. The
early detection system is required by Section 91 (2) AktG (German
Stock Corporation Act) and the auditor has to conclude, if the
system can fulfill its duties.
Risk appetite
The Executive Board and Audit Committee, in conjunction with the
Group Risk Oversight Committee has reviewed the Group's risk
appetite. The results of the review indicate the board's risk
appetite across three risk types:
Operational risks - In the second summer season after pandemic
restrictions, significant efforts have and are still undertaken
internally and externally to stabilize the tourism value chain
significantly at all levels and our offers have been close to
normalised levels. We have therefore lowered our risk appetite from
a medium-high level in the financial year 2022 to a medium-low
level with regards to all operational risks. However, tourism
business has always been vulnerable to unforeseen external events
and our business is prepared to manage such adverse events and our
risk appetite is adapted to this: Since we cannot foresee the type
or location of external events and their magnitude of impact to our
business, we can - in case events occur - offer a variety of
alternative products for rebooking. Further, we manage the
situation on the ground for our colleagues and our customers
already en route using our highly professional crisis management.
In the financial year 2023, wildfires on Southern Europe and an
extensive heatwave in the Mediterranean has caused crisis
management procedures.
Compliance risks - a continued low risk tolerance with regard to
compliance-related risks, including compliance with regulatory
requirements, the security of information in any form and the
prevention of harm to customers, employees and all other
stakeholders.
Financial risks - a continued "elevated-low" risk tolerance with
regard to financial risks due to volatile prices of important
tourism expenses. With a fundamentally unchanged hedging policy,
the hedging ratios for all input costs in foreign currency and fuel
risks continue to be below the target values. We assume that the
hedging ratios will approach the historical ratios again in the
medium term.
Our principal risks are aligned to these risk types.
Adapting the risk appetite to the principal risks
The principal risks to the Group are either considered to be
'Above' or 'Within' risk appetite.
Risks above the appetite are those that either require further
mitigation in order to reduce them to an acceptable position or are
heightened by external events beyond our control. We have action
plans in place to increase or strengthen mitigation around each of
these risks and reduce the current risk score to the target level
indicated in the heat map diagram.
Risks within the appetite are those that considered to be at an
acceptable level. For these, we have controls, processes and
procedures in place as a matter of course that serve to mitigate
each risk to either minimize the likelihood of the event occurring
and / or minimise the impact if it does occur. These risks remain
on our risk radar where we regularly monitor the risk, the
mitigation and the risk landscape to ensure that the risk score
stays stable and within our risk appetite in each case.
In the heat map diagram, the assessment criteria used are shown
on page 38.
If the risk details in the subsequent tables do not suggest
otherwise, the risks shown below relate to all segments of the
Group. The risks listed are the principal risks to which we are
exposed but are not exhaustive and will evolve over time due to the
dynamic nature of our business.
Principal risks above risk appetite
Nature of Risk
1. Lack of integration and flexibility within operations and IT
systems
The Group's strategy is focused on driving profitable topline
growth, based on growth in market share, customer growth, product
growth, sustainability and winning team.
A clearly defined and comprehensive set of strategic initiatives
are in place to deliver this, covering five areas: Markets &
Airlines, Holiday Experiences, Central Customer Ecosystem, People
and Sustainability.
The Group's strategy ensures that we are more vertically
integrated, which reduces the impact of disruption by pure digital
players. The overall strategy is to drive profitable topline growth
whilst reducing our cost base. This involves the integration of our
businesses and the development of core platform capabilities and
technical infrastructure providing flexibility of IT services.
Our focus is on enhancing our operations and customer experience
by providing engaging, intuitive and seamless customer service
through the delivery of these projects.
The Group believes that this strategy positions well TUI for
growth, and will further strengthen TUI versus the competition.
However, the Group recognizes that there is a risk of ineffective
strategic execution, arising from various factors including:
-- Failure to notice and respond to structural shifts in market
trends
-- Failure to prioritise strategic initiatives with the greatest
impact for TUI
-- Lack of resource to deliver strategic initiatives
-- Inadequate execution of strategic initiatives The lack of
integration and flexibility within our systems and operations,
particularly in the Markets & Airline businesses can impact our
competitiveness and our ability to provide a superior customer
experience as well as to deliver on quality and operational
efficiency.
Mitigating Factors
-- Evaluation of the current and future leisure experiences
market landscape, based on analysis of consumerneeds, development
of supply, emerging trends, innovation, considerations of
sustainability and resourceavailability
-- Regular updates on and discussion of strategic topics and
initiatives at the GEC, Executive Board andSupervisory Board
-- Allocation of resource to strategic initiatives, including
product owners, project teams and budget
-- Approval of business cases relating to strategic initiatives
by the appropriate body (in accordance withthe Group's Investment
Approvals Policy)
-- Strategic initiatives and KPIs incorporated into Budget and
3YP process
-- Strong project management structures exist for all of the
major restructuring, acquisition and disposalprograms, which are
underway to ensure that they are managed effectively.
-- Project reporting tool and reporting of strategic KPIs in
monthly Operating and Financial review ensuresenhanced visibility
of the progress of major projects as a matter of routine.
-- Centralised management structures to oversee the Markets
& Airline businesses.
Nature of Risk
2. Reduction in customer demand
Spending on travel and tourism is discretionary and price
sensitive as well as competitive. The economic outlook remains
uncertain. Furthermore, in recent years there has been an emergence
of successful substitute business models such as web-based travel
and hotel portals which allow end users to combine the individual
elements of a holiday trip on their own and book them
separately.
There is the risk that these external factors within our
industry will impact on the spending power as well as the desire to
travel of our customers. This could impact our short-term growth
rates and lead to margin erosion.
The price increases observed in the year under review had no
relevant impact on customer demand.
Adverse climate conditions (heat-waves, droughts, heavy rain)
bear the risk that customer demand for popular holiday
destinations, where TUI is active, decline. This could impact our
mid-term growth and the valuation of our hotel assets in these
countries.
Mitigating Factors
-- Our market position as a globally operating tourism group,
our brand and our integrated business modelenables us to respond
robustly to competitive threats.
-- The Group is characterised by the continuous development of
new holiday experiences, developing newconcepts and services which
match the needs and preferences of our customers. Our strong and
lasting relationshipswith our key hotel partners further reinforces
our ability to develop new concepts exclusive to the Group.
-- The traditional package tour is becoming more diverse by
combining low-cost flights with currentlyavailable hotels, even at
short notice. This also creates new offers, such as city breaks. In
the industry we callthis process dynamic packaging. In addition, we
also offer individual travel products separately, i.
e.accommodation, flights, rental cars, insurance and TUI Musement
products which are services ranging from excursionsat the holiday
destination to visits to museums in the city.
-- Experience shows that many consumers give high priority to
their travel spending.
-- Leveraging our scale to keep costs down and prices
competitive.
-- The multitude of source markets, which react to external
shocks to varying degrees, can lead to abalancing effect.
-- Promoting the benefits of travelling with a globally
operating tour operator to increase customerconfidence and peace of
mind.
-- With our asset right strategy in our hotels business, we aim
a mix of owned, leased or other partnershiparrangements to manage
the investment into the holiday destinations. This secures capacity
and thus limiting thefinancial investment.
Nature of Risk
3. Insufficient cash flow
Tourism is an inherently seasonal business with the majority of
profits earned in the European summer months. Cash flows are
similarly seasonal with the cash high occurring in the summer as
advance payments and final balances are received from customers,
with the cash low occurring in the winter as liabilities have to be
settled with many suppliers after the end of the summer season.
There is the risk that if we do not adequately manage cash
balances through the winter low period this could impact on the
Group's liquidity and ability to settle liabilities as they fall
due whilst ensuring that financial covenants are maintained.
Mitigating Factors
-- The Executive Board has continued to place significant focus
on the review of the Group's cash flowposition during and after the
COVID-19 crisis period.
-- The strong demand for holidays has brought operations back to
pre-pandemic levels in FY23 and thuscontributed towards improving
the cash position.
-- With the positive cash flow in 2023 and, the financing
measures implemented in the year under review(capital increase in
April 2023 and RCF prolongation in May 2023 net of government
handbacks), the Executive Boardbelieves that, despite the existing
risks, the TUI Group currently has and will continue to have
sufficient fundsresulting both from the borrowing and from
operating cash flows to meet its payment obligations and to
continue asa going concern.
-- Our focus on holiday experiences is helping to reduce the
seasonality risk, as hotels, cruises anddestination experiences
have a more evenly distributed profit and cash profile across the
year.
-- As our business is spread across a number of markets, there
are some counter-cyclical features e. g.winter is a more important
season for the Nordic and Canadian markets. Some brands, such as
the UK ski brandCrystal Ski, have a different seasonality profile
which helps to counter-balance the overall profile.
-- The business regularly produces both short term and long term
cash forecasts during the year - on a dailybasis when needed -,
which the Treasury department use to manage cash resources
effectively. We continue tomaintain high-quality relationships with
the Group's key financiers. TUI AG's RCF and KfW credit line are
subjectto compliance with certain financial target values
(covenants) for debt coverage and interest coverage, the reviewof
which is carried out based on the last four reported quarters at
the end of the financial year or the half-yearof a financial year.
As of 30 September 2023, TUI successfully complied with the
financial covenants.
Please refer to the Viability Statement on page 52 for further
details on the measures taken this year.
Nature of Risk
4. Volatility of input costs
A significant proportion of operating expenses are in non-local
currency and / or relate to aircraft and cruise fuel which
therefore exposes the business to fluctuations in both exchange
rates and fuel prices.
There is the risk that if we do not manage the volatility of
exchange rates, fuel prices and other input costs adequately, then
this could result in increased costs and lead to margin erosion,
impacting on our ability to achieve profit targets. Although we are
still not back to prepandemic levels of hedging lines, we have
significantly improved our positions against future volatilities
for the upcoming winter and summer seasons.
Furthermore, changes in macroeconomic conditions, such as those
that were experienced as a result of the pandemic and other
geopolitical events, like the war on Ukraine, can have an impact on
fuel rates and exchange rates which, particularly for the GBP / EUR
rate has a direct impact on the translation of non-euro market
results into euros, the reporting currency of our Group. The
increase in inflationary pressures has led to central banks
increasing interest rates. Initially, the aggressive raising of US
interest rates by the US Federal Reserve vs. a slower pace of
monetary tightening by other central banks, most notably the ECB,
increased interest rate differentials and caused the US dollar to
strengthen against other currencies such as the Euro and British
Pound. Central banks are now expected to be nearing the peak of
their interest rate hiking cycle, as inflation has generally been
falling, but at a slower pace than many had anticipated. Whilst the
US Federal Reserve was (and still is) expected to be amongst the
first to cut rates, the resilience of the US economy means that US
rates are expected to remain higher for longer. It is also the case
that interest rates are likely to stay higher for longer in the
Euro Zone and the UK, but after a period of US dollar weakening
against both Euro and the British Pound, the resilience of the US
economy has not yet seen the pivot to a weaker US dollar to the
extent that many market commentators have been predicting. Where
the Group has
unhedged exposures, any strengthening of the US dollar will have
an adverse impact on input costs denominated in US dollars.
Conversely any weakening of the US dollar will have a beneficial
impact on input costs denominated in US dollars.
Mitigating Factors
-- An established Hedging Committee that monitors the Group's
hedging position.
-- Ensuring that the appropriate derivative financial
instruments are used to provide hedging cover for theunderlying
transactions involving fuel and foreign currency.
-- Maintaining an appropriate hedging policy to ensure that
hedging cover is taken out ahead of the markets'customer booking
profiles. This provides a degree of certainty over input costs when
planning pricing and capacity,whilst also allowing some flexibility
in prices so as to be able to respond to competitive pressures if
necessary.
-- Tracking the foreign exchange and fuel markets to ensure the
most up-to-date market intelligence and theongoing appropriateness
of our hedging policies.
-- Expressing our key profit growth target in constant currency
terms so that short term performance can beassessed without the
distortion caused by exchange rate fluctuations.
Further information on currency and fuel hedges can be found in
the Notes to the consolidated financial statements in the Financial
instruments section.
Nature of Risk
5. Access to EU airspace
Our main concern is whether or not all of our airlines will
continue to have access to EU airspace as now. If we were unable to
continue to fly intra-EU routes, such as from Germany to Spain,
this would have a significant operational and financial impact on
the Group.
Other areas impacted by Brexit include the status of our UK
employees working in the EU and vice versa and potential customer
visa requirements for holidays from the UK to the EU.
Mitigating Factors
-- Dedicated workstreams to coordinate suitable mitigation
strategies where the UK exit from the EuropeanUnion has impacted on
our operations, particularly the airlines.
-- Regular engagement and lobbying towards relevant UK and EU
decision makers to stress the continuedimportance of a liberalised
and less regulated aviation market across Europe to allow access to
investment capitaland to protect consumer choice in both
regions.
Nature of Risk
6. Disruption to IT systems (Cyber Attacks)
Our responsibility is to protect the confidentiality, integrity
and availability of the data we process for our customers,
employees, and businesses.
This is an evolving risk due to increasing digitalisation, our
supply chain, emerging technologies such as generative AI, growing
global cyber-crime activity, Russia-Ukraine conflict and more
regulation (e. g. EU GDPR). Our consolidation under the TUI brand
and increasing dependence on digital sales and customer care
increases our exposure and the potential worst-case impact of a
successful cyber-attack.
If we do not ensure we have the appropriate level of security
controls in place across the Group, this could have a significant
negative impact on our key stakeholders, associated reputational
damage and potential for financial implications.
Mitigating Factors
-- Continued commitment from the Executive Board in support of
key initiatives to ensure existing and futureIT systems are secure
by design, protected against denial of service attacks that could
impact systemavailability, exposure to vulnerability is managed and
user access is monitored. We consider security first ineverything
we do.
-- TUI's Information Security Management System ensures a
coordinated, standards based, proactive approachto the
identification and management of information security risk across
the Group.
-- We keep people safe in the digital world. Our colleagues are
made aware of information security risksthrough appropriate
training and awareness campaigns. TUI are investing in modern
authentication and protecting thedigital identities of our
customers and colleagues.
-- Security is integrated into our software development and
release processes.
-- Our security risk assessment methodology, controls, policy,
and guidelines have been updated to includeprovisions for the
assessment and secure use of Generative AI.
-- We continue to increase the maturity and coverage of our
Security Operations Centre and platform toanticipate, detect and
respond to cyber-attacks and information security incidents.
-- Continuous improvement through lessons learned from real or
simulated cyber incidents.
Nature of Risk
7. Lack of sustainability improvements
For the Group, economic, environmental and social sustainability
is a fundamental management principle and a cornerstone of our
strategy for continually enhancing the value of our Company. This
is the way we create the conditions for long-term economic success
and assume responsibility for sustainable transformation in the
tourism sector.
Our focus is to reduce the environmental impact of our
operations and promote responsible social policies and outcomes
both directly through our own business and indirectly via our
influence over our supply chain partners, thereby driving the
sustainable transformation of the tourism industry.
There is a risk that we are not successful in driving social and
environmental improvements across our operations, that our
suppliers do not uphold our corporate and social responsibility
standards and we fail to influence destinations to manage tourism
more sustainably.
If we do not maximise our positive impact on destinations and
minimise the negative impact to the extent that our stakeholders
expect, this could result in a decline in stakeholder confidence,
reputational damage and reduction in demand for our products and
services.
Mitigating Factors
-- The TUI Sustainability Agenda purpose is to set and drive
industry standards, ambitious goals and developtransformation
roadmaps for all parts of the business.
-- This means to actively engage colleagues, partners and
customers, bringing sustainability to life in a tangible and
emotional way.
-- The Group Sustainability department sets clear goals,
priorities, and the framework to deliver the Sustainability
Agenda.
-- Operating one of the most carbon efficient airlines in Europe
with continued investment in new, moreefficient aircraft and cruise
ships.
-- Our ambition is to achieve net-zero emissions across our
operations and supply chain by 2050 at thelatest.
-- Science-based targets have been set for our airline, hotel
and cruise operations by 2030, validated bythe Science Based
Targets initiative (SBTi).
-- Development and implementation of emission reduction roadmaps
for airlines, cruises and hotels to significantly reduce
emissions.
-- Adhering to increasingly supply chain focused regulations (e.
g. German Supply Chain Act, EU Supply chaindue diligence regulation
2025) rolling out new processes and structure with a strong focus
on procurement.
-- Implemented an environmental management system with all TUI
airlines having achieved ISO 14001 certification.
-- Driving up social and environmental standards through
accommodation suppliers achieving certifications recognised by the
Global Sustainable Tourism Council (GSTC) and applying the GSTC
Criteria to TUI experiences.
-- Enabling customers to make more sustainable holiday choices
by launching our Green & Fair label.
Nature of Risk
8. Reliance on key suppliers
Providers of holiday and travel services are exposed to the
inherent risk of failure in their key suppliers, particularly for
hotels, aircraft and cruise ships. This is heightened by the
industry convention of paying hoteliers in advance ('prepayments')
to secure a level of room allocation for the season as well as in
areas where a single supplier is used to provide a product or
service.
There is the risk that we are unable to continue with our core
operations in the event of a major service failure from our key
suppliers.
Mitigating Factors
-- Using reputable and financially stable suppliers,
particularly in areas where a single supplier is usedto provide a
service.
-- Regular monitoring of supplier performance against agreed
terms and conditions
-- Strong working relationships with all key suppliers
-- Owned and joint venture partner hotels form a substantial
part of our program which reduces our inherentrisk in this
area.
-- A robust prepayment authorisation process is established and
embedded to both limit the level ofprepayments made and ensure that
they are only paid to trusted, credit-worthy counterparties.
-- Prepayments are monitored on a timely and sufficiently
granular basis to manage our financial exposure tojustifiable
levels.
-- Developing adequate controls around key suppliers operative
ability. In service meetings, for example, wediscuss current
challenges with suppliers even more closely, so that we are also in
a position to react operationally ourselves.
Nature of Risk
9. Disruption within our destinations
Providers of package holiday and leisure experiences are exposed
to the inherent risk of external events in operational areas. This
can include natural disasters such as wild fires in Greece or
hurricanes in the Caribbean, outbreaks of disease, such as the
COVID-19 pandemic, political instability or wars close to our
destinations, such as in the Middle East, with an impact on our
destinations in Egypt or Turkey, as well as terrorist events such
as the tragic incident in Tunisia in 2015.
There is the risk that if such an event occurs, impacting one or
more of our destinations that we could potentially suffer
operational disruption and increased costs. We may be required to
repatriate our customers and / or need to provide additional
support and / or the event could lead to a significant decline in
demand to the affected destinations over an extended period.
Mitigating Factors
-- Within our Group Security, Health and Safety (SHS) centre of
excellence we have a centralised CrisisManagement Planning and
Coordination function, providing centralised frameworks, personnel
reporting structures,incident management systems and crisis
communications plans for use in the local delivery of any
response.
-- Our well-established crisis management procedures and
emergency response and business continuity plansare activated when
an event of this nature occurs and focus on the welfare of our
customers.
-- Due to our presence in key holiday destinations, in the event
of a local event occurring, we can offeralternative options to our
customers and remix our destination portfolio away from the
affected area in futureseasons if necessary.
Nature of Risk
10. Climate change impacting our business model
Climate change is a complex issue and there is significant
uncertainty surrounding the climate system, as well as how the
world will respond to mitigate the effects of climate change.
However, physicals effects are already being felt today and are
predicted to worsen, and we're seeing increasing climate
action.
Increased costs due to the introduction of new, or extension of
existing, carbon pricing mechanisms (including pass-through of
higher costs by suppliers), and new energy and emissions
regulations
Increasing regulations and restrictions targeting the airline
and cruise industry, leading to reduced revenue and / or stranded
assets
Costly or unavailable future fuels and technologies resulting in
higher costs, or preventing further decarbonisation and compliance
with regulations
-- TUI is committed to decarbonising its business, and has set
ambitious near-term science-based emissionsreduction targets with
the SBTi.
-- To achieve these, TUI airlines procures state-of-the-art
aircraft, implements operational efficiencies (including route
optimisation), and will increase the use of SAF. TUI already has
cooperation agreements in place topromote the production and supply
of SAF.
-- TUI Cruises invests in energy efficiency at ship operations,
fuel-saving route optimisation, shore powerin ports and alternative
fuels, such as sustainable biofuels, bio-LNG and green methanol.
The three newbuilds coming into the fleet by 2026 will not use
heavy fuel oil. Mein Schiff 7 will enter service in 2024 and will
run onlower-emission marine diesel and be equipped with catalytic
converters and a shore power connection. In addition,the ship will
also be able to run on green methanol in the future. In 2024 and
2026, two ships will follow, whichwill be operated with LNG. LNG
serves as a bridge technology until bio-LNG is available, which
will be producedeither from biogenic sources or synthetically from
renewable energy.
-- TUI Hotels & Resorts is focused on renewable energy and
resource-saving operational practices to reducehotel emissions as
far as possible.
Decline of travellers due to shifts in consumer preferences and
behaviour, and increasing negative public sentiment towards travel,
resulting in loss of revenue
Decline of overall customer demand as the price for our products
will increase to reflect higher capital expenditures and
operational expenses to offer carbon low products
Difficulties in obtaining access to financing and increasing
cost of capital due to the inability to reduce emissions in line
with market expectations
-- Managing both market and reputational risks depends on the
successful implementation of our emissionsreduction initiatives.
Accordingly, we have roadmaps in place to deliver on our
science-based targets.
-- Whilst the cost for flights is very likely to increase, all
markets participants have to roll-over this"green inflation". With
our state-of-the-art efficienct fleet, it is likely that our cost
increase is competitive. Further, the share of extra cost from
low-carbon flying is lower in a package and hence we believe that
we caneffectively transfer cost additions.
-- TUI has set science-based emissions reduction targets for
2030 and a net zero target for 2050. TUI continues to notice a wide
range of financiers due to TUI Group's financial performance and is
continuing todevelop relationships with new sources of finance and
monitor development of the market. TUI is in a continuingeducation
process with lessors and the financial community to maintain
confidence in the strategy.
Physical damage to assets and business disruption due to extreme
weather-related events
-- This risk is managed at the asset-level.
-- We manage the overarching risk through insurance and a large
and regional spread hotels & resortsportfolio, providing
diversifiying the risk of asset impairment.
-- We hold relatively short-duration lease contracts, enabling
flexibility in case of changes ininsurability.
Extreme weather events disrupting transport hubs, resulting in
delays and cancellations, and increased costs
-- The risk of airport disruption was found to be low in the
physical risk analysis. Nonetheless, TUI worksclosely with airports
in case of disruption and will continue to evaluate the risk
profile of its materialairports.
-- Whilst docking is already considered a resilient activity,
the risk is further mitigated by theflexibility to adjust cruise
itineraries.
Physical damage to assets and business disruption due to
longer-term shifts in climate patterns
-- Whilst the scenario analysis indicate higher probability of
extreme wheather events, non of the locationswhere our hotels &
resorts are located is vulnerable to a rising sea level during the
time frame of our climatescenario analysis.
-- This risk is managed with insurance and TUI Hotels &
Resorts' renewable energy strategy.
Changing weather patterns decreasing suitability for tourism and
/ or making source markets more attractive, impacting tourism
demand
-- Climate-related factors are considered in the expansion of
TUI's Hotels & Resorts business segment.
Principal Risks within appetite
Nature of Risk
A. Security Health & Safety failure
The safety and security of customers and colleagues is of
paramount importance to any holiday and travel service
provider.
There is the risk of accidents, incidents or events occurring
causing illness, injury or death to customers or colleagues whilst
on a TUI holiday or whilst using a TUI operated / provided activity
or service.
In addition to the harm caused the affected individual(s), this
could result in disruption to operational activities, reputational
damage to the business and / or financial liabilities through loss
of earnings, lack of demand and / or legal claims being brought by
the affected parties.
Mitigating Factors
-- The established Group Security, Health & Safety (Group
SHS) centre of excellence oversees safety andsecurity risk
management activities, delivering alignment and consistency across
the TUI Group.
-- Group SHS operational responsibilities include TUI Tour
Operations, TUI Hotels & Resorts and TUI Musement(including
Intercruises). Operational safety and security risk management
activities for Airline and Cruiseoperations are managed from within
the respective business units.
-- Data-led, risk-based Safety and Security Risk Management
systems are in place and are subject tocontinuous review /
improvement.
-- Safety and Security Risk Management clauses are included in
supplier contracts.
-- Appropriate insurance policies are in place to mitigate any
financial losses.
Nature of Risk
B. Breach of regulatory requirements
Most providers of holiday and travel services operate across a
number of economies and jurisdictions, which therefore exposes them
to a range of regulatory laws which must be complied with.
As we are operating from multiple source markets and providing
holidays in more than many destinations, we are exposed to a range
of laws and regulations with which we must comply or else risk
incurring fines or other sanctions from regulatory bodies.
Mitigating Factors
-- Communication and strong tone from the top concerning
compliance with laws and regulations.
-- Risk based compliance management systems managing the most
relevant legal areas for the Group.
-- Regular reporting of Integrity and Compliance Director in
different bodies (Group Executive Committee,Audit Committee, Group
Works Council) in order to guarantee appropriate monitoring,
supervision and implementationof action plans and to strengthen the
Integrity & Compliance culture across the Group.
-- Embedded legal expertise in all major businesses responsible
for maintaining high quality relationshipswith the relevant
regulators and authorities.
-- Ongoing implementation and review of Compliance Management
System conducted by the Group Integrity &Compliance department
to monitor compliance with regulations and provide expert advice to
local teams on specificcompliance areas.
Nature of Risk
C. Management of joint venture partnerships
It is common for tourism groups to use partnerships in some of
their operations in order to reduce the risk of new ventures, to
gain access to their expertise of the local market and, in case of
consolidation at equity, to strengthen the balance sheet position
in line with our less capital intensive 'asset-right' strategy (e.
g. the transaction completed with Riu). There are threee
significant partnerships within the Group: Pep Toni Hotels S. A.,
TUI Cruises GmbH and Midnight International Holdings Limited.
For details on our strategy refer to page 24.
There is the risk that if we do not maintain good relations with
our key partners that the ventures' objectives may not remain
consistent with that of the Group which could lead to operational
difficulties and jeopardize the achievement of financial
targets.
Mitigating Factors
-- Good working relationships exist with all of our main
partners and they are fully aligned with andcommitted to the growth
strategy of the Group.
Nature of Risk
D. Inability to attract and retain talent
Our success depends on the ability to attract, retain, and
develop our talent to ensure that we equip our employees to deliver
our strategy as well as to also become our future leaders.
There is a risk that we are unable to attract and retain key
talent, build future leadership capability and maintain the
commitment and trust of our employees.
Challenges in managing and maintaining our talent pipeline in
order to deliver against our strategy, drive competitiveness and
maximize on our operating performance, may impact on our ability to
future proof the Group and the associated potential for negative
impact on shareholder confidence.
The risk has stabilised and reduced to prepandemic levels but we
continue to monitor closely to ensure that we retain our key talent
through development initiatives, whilst launching a new tool to
measure our Employee Experience and supports all of the activities
around our new Employee Value Proposition.
Mitigating Factors
-- Support retention by refreshing our Performance Management
processes, aligning our development opportunities to the business
needs and communicating all internal vacancies to our
employees.
-- Promoting a working from anywhere culture, allows us to
attract and retain a wider pool of talent thatdoes not require to
be located close to our base offices.
-- Build and develop internal talent pools of our high potential
employees ensuring that they are diverseand inclusive.
-- A strategically aligned leadership programme for high
performing management at all levels and thecreation of strong
management development programme for all people managers
Viability Statement
In accordance with Rule 31 of the UK Corporate Governance Code,
the Executive Board assesses the Company's future prospects for a
period exceeding the twelve months required by the going concern
premise. The Executive Board reviews the business development
annually and on a rolling basis based on a three-year strategic
plan. The current three-year plan was adopted in October 2023 and
covers the period until 30 September 2026. A three-year horizon is
considered appropriate for a fast moving competitive environment
such as tourism.
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. Following the successive
lifting of the measures to restrict contact and travel in most
countries, business has been mainly resumed in all segments in the
course of the first half year of the 2022 calendar year.
To cover the resulting liquidity needs, the Group has carried
out various financing measures in the financial years 2020 to 2022,
which, in addition to three capital increases, 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 initially totalling EUR
2.85 bn, an option bond from the German Economic Stabilisation Fund
(WSF) totalling EUR 150 m and two silent participations from the
WSF initially totalling EUR 1.091 bn.
In financial year 2022, TUI reduced KfW's credit line to EUR 2.1
bn in various steps. In addition, 913 of the 1,500 bonds with
warrants issued to WSF were redeemed and the Silent Participation
II of the WSF of EUR 671.0 m was repaid in full ahead of
schedule.
The financing measures are described in detail in the annual
reports for the past three financial years.
On 13 December 2022, TUI has concluded a new agreement with the
WSF on the repayment of stabilization measures ("Repayment
Agreement"). This agreement regulates the intended complete
termination of the stabilization measures granted by the WSF by
means of a right of the Company (i) to repayment of the
contribution made by the WSF as a silent partner in January 2021 in
the nominal amount of then EUR 420 m ("Silent Participation I") and
(ii) to repurchase the warrant-linked bond 2020 / 2026 ("Warrant
Bond") issued by the Company to WSF in the remaining amount of EUR
58.7 m as well as the 58,674,899 option rights ("Warrants")
originally attached to the warrant bond. In addition, the Repayment
Agreement regulates the implementation of capital measures for the
purpose of refinancing the aforementioned measures.
In February 2023, TUI AG implemented the ten-for-one reverse
stock split previously resolved by the 2023 AGM in accordance with
the provisions of the Economic Stabilisation Acceleration Act. As a
result, the Company's share capital declined from EUR 1.785 bn to
around EUR 179 m. The corresponding reduction amount of around EUR
1.606 bn was transferred to the company's capital reserves.
In accordance with the repayment agreement with the WSF, the
Executive Board of TUI AG resolved a capital increase with
subscription rights of EUR 1.8 bn with the approval of the
Supervisory Board on 24 March 2023. For the fully subscribed
capital increase, 328,910,448 new shares were offered at a
subscription ratio of 8:3 and a subscription price of EUR 5.55. The
subscription period for the new shares ended on 17 April 2023.
Following receipt of the proceeds from the capital increase on
24 April 2023, Silent Participation I and the around 56.8 m
warrants held by the WSF as well as the outstanding 587 of the 2020
/ 2026 bonds with warrants were fully redeemed on 27 April 2023.
For Silent Participation I and the 2023 coupon payable on it, a
redemption price of EUR 651.6 m was paid. EUR 30.8 m were used for
the repurchase of the warrants and further EUR 61.9 m for the early
redemption of the 587 bonds with a nominal value of EUR 58.7 m,
including accrued interest of EUR 3.2 m.
At the same time, the early repayment penalty for Silent
Participation II of EUR 5.7 m, agreed with the WSF in April 2022,
became due. TUI has thus terminated and repaid all stabilisation
measures of the WSF.
Moreover, TUI AG reduced the volume of the KfW credit facility
from EUR 2.1 bn to EUR 1.05 bn following completion of the capital
increase.
The capital increase completed in April 2023 and the subsequent
substantial reduction in government financing will enable a
significant improvement in the TUI Group's credit ratios and reduce
current interest costs, allowing TUI to focus on growth and further
market recovery.
In May 2023, TUI extended the maturity of the existing credit
lines of EUR 2.7 bn by a further two years. The syndicated credit
line with the 19 banks (EUR 1.64 bn), including the credit line
with KfW (EUR 1.05 bn), together referred to as the "RCF", will now
mature in July 2026. The RCF of TUI AG is subject to compliance
with certain financial targets (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.
As at 30 September 2023, TUI Group's revolving credit facilities
totalled EUR 2.7 bn, they comprised the following
-- EUR 1.64 bn credit line from 19 private banks (incl. EUR 190
m guarantee line)
-- EUR 1.05 bn KfW credit line.
The KfW credit line, which was reduced to EUR 1.05 billion after
the successful capital increase, is not expected to be drawn on and
serves only as a buffer. The aim is to return this credit line
quickly.
The support and stabilisation package as well as the further
financing measures are described in detail in the chapter 'Going
concern reporting according to the UK Corporate Governance Code' in
the notes.
See chapter Going Concern Reporting in accordance with the UK
Corporate Governance Code, page 188.
In the view of the Executive Board, the TUI Group currently has
and will continue to have sufficient funds, resulting both from
borrowings and from operating cash flows, to meet its payment
obligations and to continue as a going concern in the foreseeable
future. Therefore, as at 30 September 2023, the Board does not
identify any material uncertainty that may cast significant doubt
on the Group's ability to continue as a going concern.
The Board does not foresee risks that may jeopardise the Group's
ability to continue as a going concern and does not believe that
compliance with the financial covenants is at risk as at 31 March
2024 and 30 September 2024.
Taking into account the current situation of the Group and the
main risks, the Executive Board has a reasonable expectation that
the Group will be able to continue operations and meet the
obligations arising within the three-year period under review.
Key features of the internal control and risk management system
in relation to the (Group) accounting process (sections 289 (4) and
315 (4) of the German Commercial Code)
1. Conceptual framework and governance
The internationally recognised framework created by COSO
(Committee of Sponsoring Organizations of the Treadway Commission)
forms the conceptual basis for TUI Group's accounting-related
internal control system.
On the basis of section 107 (3) of the German Stock Corporation
Act, the Audit Committee of the Supervisory Board of TUI AG reviews
the auditing of the annual financial statements, monitoring the
accounting process and the effectiveness of the internal control
and risk management systems. The reliability of financial reporting
and the monitoring of the financial accounting process as well as
the effectiveness of the internal control and risk management
systems are described in the Audit Committee Report. This also
takes account of the effectiveness of the accounting-related
internal control and risk management system.
Audit Committee Report, see page 19.
The Group's auditors gain insight into TUI Group's established
control environment and control measures. The accounting-related
audits by the auditor are complemented by an assessment of selected
controls. The audit of the consolidated financial statements by the
Group auditor and the audit of the individual financial statements
of Group companies included in the consolidated financial
statements, in particular, constitute a key non-process-related
monitoring measure in relation to Group accounting.
In Group accounting, the risk management system, implemented as
a component of the internal control system in the form of an
Enterprise Risk Management (ERM) System, also addresses the risk of
misstatements in Group bookkeeping and external reporting. A more
detailed explanation of the risk management system is provided in
the section on Risk Governance in the Risk Report.
2. Use of IT systems
Bookkeeping transactions are captured in the individual
financial statements of TUI AG and of the subsidiaries of TUI AG
through local accounting systems, above all supplied by SAP. When
preparing TUI AG's consolidated financial statements, the
subsidiaries complement their individual financial statements by
setting up standardised reporting packages in the Oracle Hyperion
Financial Management (HFM) reporting system. HFM is used as the
uniform reporting and consolidation system throughout the Group and
hence no additional interfaces are involved in preparing the
consolidated financial statements.
All consolidation processes used to prepare the consolidated
financial statements of TUI AG, e. g. capital consolidation, the
consolidation of assets and liabilities and the elimination of
expenses and income and at equity measurement, are generated and
fully documented in HFM. Virtually all elements of TUI AG's
consolidated financial statements, including the disclosures in the
Notes, are developed from and validated by the HFM consolidation
system. HFM also provides various modules for evaluation purposes
in order to present complementary information to explain TUI AG's
consolidated financial statements.
The HFM reporting and consolidation system has an in-built
workflow process whereby, when the reporting companies capture
their data packages within the system, they are then locked out
from making any further changes to that data. This ensures data
integrity within the system. This workflow process has been checked
and validated by the TUI AG Group Audit department on several
occasions since the system was introduced.
At their own discretion, TUI AG's Group auditors select certain
individual financial statements from the financial statements
entered in the HFM reporting and consolidation system by the Group
companies, which are then reviewed for the purposes of auditing the
consolidated financial statements.
3. Specific risks related to (Group) Accounting
Specific risks related to (Group) accounting may arise, for
example, from unusual or complex business transactions, in
particular at critical times towards the end of the financial year.
Business transactions not routinely processed also entail special
risks. The discretion necessarily granted to employees for the
recognition and measurement of assets and liabilities may result in
further (Group) accounting-related risks. The outsourcing and
transfer of accounting-specific tasks to service companies may also
give rise to specific risks.
4. Key regulation and control activities to ensure proper and
reliable (Group) Accounting
The internal control measures aimed at securing proper and
reliable (Group) accounting ensure that business transactions are
fully recorded in a timely manner in accordance with legal
requirements and the Articles of Association. This also ensures
that assets and liabilities are properly recognised, measured and
presented in the financial statements and the consolidated
financial statements. The control operations also ensure that
bookkeeping records provide reliable and comprehensive
information.
Controls implemented to secure proper and reliable accounting
include, for instance, analysis of facts and developments on the
basis of specific indicators. Separation of administrative,
execution, settlement and authorisation functions and the
implementation of these functions by different persons reduces the
potential for fraudulent operations. Organisational measures also
aim to capture any corporate or Groupwide restructuring or changes
in sector business operations rapidly and appropriately in (Group)
accounting. They also ensure, for instance, that bookkeeping
transactions are correctly recognised in the period in which they
occur in the event of changes in the IT systems used by the
accounting departments of Group companies. The internal control
system likewise ensures that changes in the TUI Group's economic or
legal environment are mapped and that new or amended accounting
standards are correctly applied.
To safeguard financial processes, there is a Group-wide
framework under which all major companies included in the
consolidated financial statements as fully consolidated companies
are required to report the nature of their controls and their
implementation for financial reporting, fraud prevention and
detection and effectiveness of working capital management in
relation to defined risks from financial processes to the Group
Risk & Controls function with system support and to assess
their effectiveness on a quarterly basis. The Group Risk &
Controls function reviews these reports on a sample basis and
provides advice on how to improve efficiency and effectiveness.
Where financial processes are carried out in the Group's own Shared
Service Center, this function provides support for the further
development of the process and control framework. Based on the
feedback received, Internal Audit selects companies for an in-depth
review of the control measures in accordance with its own risk
assessment.
The TUI Group's accounting policies together with the
International Financial Reporting Standards (IFRS) in compliance
with EU legislation, govern the uniform accounting and measurement
principles for the German and foreign companies included in TUI's
consolidated financial statements. They include general accounting
principles and methods, policies concerning the statement of
financial position, income statement, notes, management report and
cash flow statement.
The TUI Group's accounting policies also govern specific formal
requirements for the consolidated financial statements. Besides
defining the group of consolidated companies, they include detailed
guidance on the reporting of financial information by those
companies via the group reporting system HFM on a monthly,
quarterly and year end basis. TUI's accounting policies also
include, for instance, specific instructions on the initiating,
reconciling, accounting for and settlement of transactions between
group companies or determination of the fair value of certain
assets, especially goodwill. At Group level, specific controls to
ensure proper and reliable (Group) accounting include the analysis
and, where necessary, correction of the individual financial
statements submitted by the Group companies, taking account of the
reports prepared by the auditors and meetings to discuss the
financial statements which involve both the auditors and local
management. Any further content that requires adjusting can be
isolated and processed downstream. The control mechanisms already
established in the HFM consolidation system minimise the risk of
processing erroneous financial statements. Certain parameters are
determined at Group level and have to be applied by Group
companies. This includes parameters applicable to the measurement
of pension provisions or other provisions and the interest rates to
be applied when cash flow models are used to calculate the fair
value of certain assets. The central implementation of impairment
tests for goodwill recognised in the financial statements secures
the application of uniform and standardized evaluation
criteria.
5. Disclaimer
With the organisational, control and monitoring structures
established by the TUI Group, the internal control and risk
management system enables company-specific facts to be captured,
processed and recognised in full and properly presented in the
Group's accounts.
However, it lies in the very nature of the matter that
discretionary decision-making, faulty checks, criminal acts and
other circumstances, in particular, cannot be ruled out and will
restrict the efficiency and reliability of the internal control and
risk management systems, so that even Group-wide application of the
systems cannot guarantee with absolute certainty the accurate,
complete and timely recording of facts in the Group's accounts.
Any statements made relate exclusively to TUI AG and to
subsidiaries according to IFRS 10 included in TUI AG's consolidated
financial statements.Overall Assessment by the Executive Board and
Report on expected Developments
Actual business performance 2023 compared with our guidance
Overall, the operating and financial indicators showed a
positive year-on-year development, as expected in our guidance.
In the period under review, revenue by TUI Group rose from EUR
16.5 bn to EUR 20.7 bn. The year-on-year growth of 25.8 % at
constant currency thus matched the strong increase assumed in our
guidance.
Likewise, TUI Group's underlying EBIT rose by EUR 568.5 m to an
operating profit of EUR 977.2 m in financial year 2023. This means
that we achieved the expected considerable improvement in
underlying EBIT.
The net income of EUR 22.1 m adjusted in the income statement in
the period under review were outside the corridor we had expected,
which included net costs of EUR 60 m to EUR 80 m. This is due in
particular to the unplanned gain on disposal of EUR 91 m from the
sale of the tour operator business by the equity method accounted
company Sunwing Travel Group Inc., Ontario in the Northern Region
segment.
Due to the significant recovery in underlying EBIT, ROIC and EVA
also improved considerably in financial year 2023, as expected. In
the period under review, TUI Group's ROIC stood at 19.10 %
(previous year 7.49 %). Taking account of the Group's weighted cost
of capital of 11.76 % (previous year 12.63 %), this resulted in
positive Economic Value Added of EUR 375.6 m (previous year
negative Economic Value Added of EUR 280.7 m).
In the period under review, the cash outflows from net capital
expenditure on property, plant and equipment and financial
investments of EUR 493.7 m (previous year net outflow of EUR 315.9
m) were withinh the expected range of EUR 450 m to EUR 500 m.
Our forecast had expected an almost stable development of the
Group's net debt, excluding the capital increase carried out in
financial year 2023. Against the backdrop of the net cash inflows
from the capital increase implemented in April 2023 and the
redemption payments made to the Economic Stabilisation Fund, we had
adjusted our guidance for the Group's net debt to around EUR 2.4 bn
as at the end of financial year 2023 in our Half-Year Financial
Report. At EUR 2.1 bn, the Group's net debt reported as at the end
of financial year 2023 was significantly below the net debt of EUR
3.4 bn carried at the previous year's reporting date and slightly
below our updated guidance. The considerable decline reflected in
particular the cash inflow from operating activities of EUR 1,637.3
m and the cash inflow from the capital increase effected in the
period under review of EUR 1,760.9 m, less the payment of EUR 682.4
m made to redeem Silent Participation II to the Economic
Stabilisation Fund. The improvement compared to the adjusted
forecast was due in particular to higher cash and cash equivalents
and positive effects from the translation of liabilities
denominated in foreign currencies as at the balance sheet date.
For financial year 2023, we had expected a slight reduction in
specific CO2 emissions as against financial year 2022. In the
period under review, relative CO2 emissions of our airlines
declined by 3.9 % from 6.36 to 6.11 kg / 100 pkm. The improvement
was primarily driven by higher load factors as against 2022 and our
fleet renewal programme, under which older aircraft are replaced
with new, more carbon-efficient aircraft.
Projected development of global situation
Projected development of World Output
Var. % 2024 2023
World + 2.9 + 3.0
Euro zone + 1.2 + 0.7
Germany + 0.9 - 0.5
France + 1.3 + 1.0
UK + 0.6 + 0.5
US + 1.5 + 2.1
Russia + 1.1 + 2.2
Japan + 1.0 + 2.0
China + 4.2 + 5.0
India + 6.3 + 6.3
Source: Projections of International Monetary Fund (IMF), World
Economic Outlook, October 2023 Macroeconomic situation and market
development in tourism
Despite signs of economic resilience in calendar year 2023 and
progress in reducing headline inflation, economic activities are
still generally falling short of pre-pandemic projections,
especially in emerging market and developing economies, amid
widening growth divergences across regions. Several forces are
holding back the recovery. Some reflect the long-term consequences
of the pandemic, Russia's war in Ukraine, and cyclical factors
including the effects of monetary policy tightening necessary to
reduce inflation. A central driver of the recent fall in headline
inflation is declining international commodity prices (IMF, World
Economic Outlook, October 2023).
Following a strong rebound in calendar year 2022, international
tourism could climb close to pre-pandemic levels in 2023, driven by
strong pent-up demand and the lifting of travel restrictions.
Experts expect international arrivals in Europe to come close to
their pre-pandemic levels after reaching 80 % in the previous year.
Complete recovery of tourism remains subject to certain risks
affecting global travel flows, like a potential economic slowdown
in some regions, the loss of purchasing power amid high inflation
and rapid interest hikes (UNWTO, World Tourism Barometer, September
2023).
Effects on TUI Group
As a global tourism provider, TUI Group depends on the political
and legal framework and on consumer demand in the major source
markets in which we operate with our hotel, cruise and tour
operator brands. Our budget is based on IMF's assumptions about the
future development of the global economy and takes its guidance
from UNWTO's long-term forecast.
Expected development of Group earnings
TUI Group
The translation of the income statements of foreign subsidiaries
in our consolidated financial statements is based on average
monthly exchange rates. TUI Group generates a considerable
proportion of consolidated revenue and substantial earnings and
cash flow contributions in non-euro currencies, in particular the
pound sterling, the US dollar and the Swedish krona. Taking account
of the seasonality in tourism, the value of these currencies
against the euro in the course of the year therefore exerts a major
impact on the financial indicators displayed in TUI AG's
consolidated financial statements.
Our key financial performance indicators for our earnings
position in financial year 2024 are revenue and underlying
EBIT.
Definition of underlying EBIT in Value-oriented Group management
on page 31.
Key performance indicators used for regular value analysis are
Return On Invested Capital (ROIC) and Economic Value Added. ROIC
for a given segment is compared with the segment-specific cost of
capital.
For the financial year 2024 it is expected that customer volumes
will reach 2019 levels. In the course of the financial year 2023
TUI improved its financial position due to the recovery of its
business, the capital increase and the prolongation of the credit
facilities. Accordingly TUI has now far more options to hedge
against changes in fuel prices or exchange rates. The further
digitalisation of our business and the expansion of existing and
new business areas are expected to take effect. Below we describe
the key assumptions underlying the medium-term business planning in
the segments.
In its business plan, Hotels & Resorts expects to deliver
further earnings growth due to capacity expansion, demand growth
and increases in average selling prices.
For the Cruises segment further recovery of results in the
financial year 2024 is expected as the winter season of the
financial year 2023 was still affected by the comparative late
recovery of demand in 2022. Furthermore, results will increase in
financial year 2024 due to the expansion of the fleets of Marella
and TUI Cruises. In Summer 2023 Marella took over one cruise ship
from TUI Cruises. This ship will be operated all-season beginning
with the financial year 2024. TUI Cruises will launch a new ship in
Summer 2024. However, the results will be negatively impacted by
new imposed regulatory measures with the aim to reduce
climate-damaging emissions. For example the EU emission trading
system will be introduced stepwise in the cruise sector beginning
with 2024.
The future development of TUI Musement depends in part on the
development of customer numbers in Markets & Airlines. TUI
Musement will also generate growth through the sale of tours,
activities and tickets due to the expansion of its own / direct
distribution via the internet and the app.
In Markets & Airlines, beginning with the financial year
2024 it is expected that customer numbers will reach 2019 levels.
Wider use of online distribution, the provision of dynamic
production capacities for flights and accommodation and the
investments in digitalisation are expected to further improve the
results. In addition, TUI has now by far more options to hedge
against changes in fuel prices and in exchange rates in comparison
to financial year 2023. Otherwise will the emission trading system
of the EU and Great Britain lead to higher expenses.
Below, we present TUI Group's expected development in financial
year 2024 based on the constant currency rates for financial year
2023.
Expected development of Group turnover and underlying EBIT
EUR million 2023 2024*
Revenue 20,666 At least 10 % growth
Underlying EBIT 977 At least 25 % growth
Adjustments - 22 approx. EUR 25 - 35 m costs
* Variance year-on-year assuming constant foreign exchange rates
are applied to the result in the current and prior period and
within the framework of the macroeconomic and geopolitical
uncertainties currently known, especially around the Middle
East.
Revenue
TUI Group revenue totalled EUR 20.7 bn in the year under review.
For financial year 2024, we expect TUI Group's revenue to increase
by at least 10 % year-on-year.
Underlying EBIT
TUI Group's underlying EBIT in financial year 2023 amounted to
EUR 977.2 m. For financial year 2024, we expect TUI Group's
underlying EBIT to improve by at least 25 % year-on-year.
Adjustments
For financial year 2024, we expect a net negative effect from
adjustments in a range of EUR 25 m to EUR 35 m.
For details on objectives and strategies, see page 24 onwards;
for details on risks, see Risk Report from page 35 onwards.
ROIC and Economic Value Added
Due to the expected improvement in our operating result, ROIC
and Economic Value Added are also expected to improve strongly
year-on-year, depending on how capital costs for TUI Group
develop.
Expected development of financial position
To forecast the Group's financial position in financial year
2024, we have defined the Group's net capital expenditure and
investments and its net financial position as key performance
indicators.
Expected development of Group financial position
EUR million 2023 2024
Net capex and investments 493.7 around EUR 475 - 525 m*
Net debt 2,106.2 slight decrease
* Excluding capital increase Peptoni S. A.
Net capex and investments
For financial year 2024, we expect net capex and investments in
a range of EUR 475 m to EUR 525 m.
Net financial position
For financial year 2024, we expect the Group's net debt to
decrease slightly.
Sustainable development
Climate protection and emissions
We have identified specific carbon emissions (in g CO2 / pkm)
from our aircraft fleet as the key non-financial performance
indicator. For financial year 2024, we expect specific CO2
emissions to slightly fall in comparison with financial year
2023.
Overall Executive Board assessment of TUI Group's current
situation and expected development
At the date of preparation of the Management Report (4 December
2023), the Executive Board assumes that costumer volumes in 2024
will reach 2019 levels. Furthermore, in the course of the financial
year 2023 TUI improved its financial position due to the recovery
of its business, the capital increase and the prolongation of the
RCF. Accordingly TUI has now far more options to hedge against
changes in fuel prices or exchange rates. The further
digitalisation of our business and the expansion of existing and
new business areas are expected to take effect.
For financial year 2024, we therefore expect TUI Group's
underlying EBIT to improve by at least 25 % year-on-year on a
constant currency basis.
Outlook for TUI AG
The future business performance of TUI AG is essentially subject
to the same factors as those impacting TUI Group. Due to the
business ties between TUI AG and its Group companies, the outlook,
opportunities and risks presented for TUI Group are largely
mirrored by expectations for TUI AG. The comments made for TUI
Group therefore also apply to TUI AG.
Opportunity Report
TUI Group's opportunity management follows the Group strategy.
Responsibility for systematically identifying and taking up
opportunities rests with the operational management of the Hotels
& Resorts, Cruises and TUI Musement segments as well as our
source markets. Market scenarios and critical success factors for
the individual sectors are analysed and assessed in the framework
of the Group-wide planning and control process. The core task of
the Group's Executive Board is to secure profitable growth for TUI
Group again by optimising the shareholding portfolio and developing
the Group structure over the long term.
Opportunities and risks arising from macro trends
In particular, a decline in fuel costs as well as a lower
general price increase would have a positive impact on the TUI
Group and its segments in financial year 2024.
Corporate strategy opportunities
Opportunities arise from accelerating the Group's transformation
into a digital platform business. We will expand hotel-only and
flight-only products and broaden our dynamic packaging
opportunities. We will prioritise the planned transformation of our
digital platform in the TUI Musement segment.
Operational opportunities
We intend to operate as an asset-light organisation and see
opportunities in the implementation of our asset-right strategy in
our Hotels & Resorts and Cruises businesses. We are reviewing
unprofitable activities and will divest them as appropriate.
climate-related opportunities
As short to medium term opportunities, we identified more
efficient aircraft and cruise ships as well as a shift to renewable
energy sources at hotels & resorts as a way to reduce operating
costs in connection with CO2 emissions. We further see an
opportunity to offer lower-emission air travel, cruise travel and
hotel stays as a way to improve our competitive position. Providing
alternative modes of transport including a move to high-speed rail
is also seen as an opportunity for our business. We are examining
how we can utilise these opportunities.
The summer season 2023 in Turkey and Greece for selected
destinations has been expanded which has been well received by our
customers. In the long term, we expect to see this more frequently
and in more destinations following a shift in consumer preferences
from peak seasons where heat waves may be imminent to shoulder
seasons where the wheather is still very favourable for travel. In
addition, our business model is flexible to offer new destinations
based on changing weather conditions, e. g. more travel to
destinations around the Baltic Sea. We continue to monitor these
trends and embed them into our strategic and operational
planning.
Business Review
Macroeconomic, Industry and Market Framework
Macroeconomic development
Development of World Output
Var. % 2023* 2022
World + 3.0 + 3.5
Eurozone + 0.7 + 3.3
Germany - 0.5 + 1.8
France + 1.0 + 2.5
UK + 0.5 + 4.1
US + 2.1 + 2.1
Russia + 2.2 - 2.1
Japan + 2.0 + 1.0
China + 5.0 + 3.0
India + 6.3 + 7.2
* Projection
Source: International Monetary Fund (IMF), World Economic
Outlook, October 2023
Overall, the world economy has grown moderately so far in
calendar year 2023. Widespread fears of recession among the world's
leading economies in the wake of monetary policy tightening largely
look to be fading. Overall, the global recovery from the COVID-19
pandemic has remained slow and uneven, with major regional
divergences, due to Russia's invasion of Ukraine and the associated
distortions in the energy and food markets. Economic activity in
emerging markets and developing economies, in particular, has
fallen substantially short of its pre-pandemic path (IMF, World
Economic Outlook, October 2023).
Key exchange rates and commodity prices
TUI Group companies operate on a worldwide scale. This presents
financial risks for TUI Group arising from changes in exchange
rates and commodity prices. The essential financial transaction
risks from operations concern euros and US dollars. They mainly
result from foreign exchange items in the individual Group
companies, for instance jet fuel and bunker oil or ship handling,
or from sourcing transactions by hotels. The parity of sterling
against the euro affects the translation of results generated in
the UK market in TUI's consolidated financial statements. Changes
in commodity prices above all affect TUI Group when procuring fuels
such as aircraft fuel and bunker oil. In Tourism, risks relating to
changes in exchange rates and price risks from fuel sourcing are
partly hedged by derivatives.
Information on hedging strategies and risk management as well as
financial transactions and the scope of such transactions at the
balance sheet date is provided in the sections Financial position
and Risk report in the Management Report and the section Financial
instruments in the Notes to the consolidated financial
statements.
Financial position from page 74, Risk report from page 35, and
Financial instruments in the Notes from page 249.
The exchange rate charts are presented on the basis of the
indirect quotation format customary in the foreign exchange market.
If the exchange rate falls, the foreign currency is appreciating
against the euro. By contrast, if the exchange rate rises, the
foreign currency is depreciating against the euro. Industry
overview
As a global leisure experiences provider, the development of the
international tourism market has an impact on all business areas of
the Group.
The key indicators used to measure the size of the tourism
sector include the number of international tourist arrivals.
According to the United Nations World Tourism Organization (UNWTO),
the number of international tourist arrivals grew by an average of
5 % year-on-year from 2009 to 2019 (UNWTO, World Tourism Barometer,
January 2020). This growth was driven by a number of factors: the
relatively stable global economy, a growing middle class in the
emerging economies, technological progress, and an easing of visa
requirements.
With the outbreak and the global spread of the COVID-19 pandemic
in the first quarter of calendar year 2020, almost all activities
in the sector came to a standstill, and as a result, international
tourist arrivals declined significantly. However, as travel
restrictions eased and mobility was restored, tourism demand has
rebounded. From January to July 2023, international tourist
arrivals reached 84 % of 2019 levels globally, and 91 % in Europe,
with the expectation that volumes will return closer to
pre-pandemic levels by the end of the year (UNWTO, World Tourism
Barometer, September 2023). In Summer 2023, TUI Group has seen
volumes in its Markets & Airlines business return almost fully
back to 2019 levels.
Change of international tourist arrivals versus 2019 in %
Var. % 2023* 2022
versus 2019 versus 2019
World - 16 - 34
Europe - 9 - 20
Asia and the Pacific - 39 - 72
Americas - 13 - 29
Africa - 8 - 33
Middle East + 20 - 5
Source: UNWTO Tourism Dashboard and World Tourism Barometer,
September 2023
* Period January till July
Travel intermediary market
A travel intermediary operates between a provider of tourism
services, such as an airline or a hotel, and final customers,
typically delivering distribution, packaging and / or related
services. Their advantage compared with direct suppliers is
generally related to their distribution and (in the case of tour
operators) fulfilment and service capabilities. Travel
intermediaries include tour operators, travel agents, and online
travel agencies (OTAs). These business models vary substantially.
All may offer their customers a component product (e. g. flight,
accommodation) or a package product (comprising e. g. flight, hotel
and transfers), usually through a combination of offline (i. e.
travel agencies) and online channels (i.e. web and app). Booking
preference has shifted to online over time, a trend which was
further accelerated during the pandemic.
In order to secure flight and hotel capacity in advance, a tour
operator may enter into a wholesale contract with the supplier,
often involving some form of commitment to a certain amount of
capacity at a specified price. Where the tour operator commits to
capacity, they take on the risk of filling it; in return, they can
expect the supplier to offer them a favourable rate and the
opportunity to secure accommodation on an exclusive basis, as well
as the ability to yield the capacity. Alternatively, tour operators
can dynamically access flight and hotel supply, either direct with
the supplier, or via a bedbank, or via a global distribution
system. This does not involve taking risk, and provides additional
choice and flexibility for the customer (for example, relating to
choice of departure airport, time of flights and duration of
holiday). OTAs, by contrast, typically do not commit to taking
capacity, nor are they as deeply involved in the fulfilment and
service of the holiday. Their offering to suppliers is a digital
distribution platform with broad customer reach, generally without
any exclusivity of offer.
Airline market
The airline industry was hit particularly hard by the COVID-19
crisis, as airlines around the world had to ground their aircraft
and cancel flights due to global travel bans. In addition the
European industry faced significant disruption in 2022, in
particular due to shortage of staff in critical areas of operations
(e. g. ground handling and airports), driven by delayed ramping up
of staff after COVID 19 ramping down and due to shortages in the
labour market. Despite this, air passenger traffic rebounded
significantly in 2022, and has continued its recovery in 2023, with
global revenue expected to reach 90 % of 2019 (IATA, Global Outlook
for Air Transport, June 2023).
The airline industry, like many others, has been impacted by
higher inflation, in particular in relation to jet fuel prices,
driven up by energy shortages and the war in Ukraine, as well as
rising interest rates and labour shortages. As a result of this,
plus demand returning back to 2019 levels, average airfares have
increased (IATA, Global Outlook for Air Transport, June 2023).
Climate change is a further challenge facing the industry. The
industry is committed to achieve net zero emissions by 2050,
meaning the current reliance on carbon offsetting will need to end.
It is expected that Sustainable Aviation Fuel (SAF) will become the
most important means for the industry to achieve its reduction
targets, however, predicted demand is far in excess of current
production (Skift State of Travel 2023, July 2023).
Hotel market
The COVID-19 pandemic had significant impacts on the hotel
sector as travel and hotel restrictions imposed by governments in
many countries resulted in the temporary closing of hotels and a
significant decline in the number of bed nights. The recovery of
the hotel market was initiated with the resumption of domestic
travel. Following the lifting of governmental restrictions,
international travel contributed to an increase in bed nights.
The hotel market comprises business and leisure hotels. Leisure
hotels feature a number of characteristics distinguishing them from
business hotels, including longer average lengths of stay and
differences in location, room features and service offerings. From
a demand perspective, the leisure hotel market in Europe comprises
several smaller sub-markets catering to customers' individual needs
and preferences. The sub-markets comprise premium, comfort and
budget hotels as well as family / apartment hotels and club or
resort hotels. Hotel companies may offer a variety of hotels for
different market segments, often defined by price segment, star
rating, exclusivity or available facilities.
In Europe, in particular, there are many small, often family-run
hotels, which are less upscale and have fewer financial resources.
Most family-owned hotels are not branded.
Given the large number of ownership and operating models for
leisure hotels and the fragmented competitive landscape which, at
least in Europe, is not dominated by large hotel chains, the
competitive environment differs greatly between locations. Despite
this strong fragmentation, a structural change can be observed in
the European hotel industry, as in nearly all regions in the world.
The share held by hotel chains is increasing, as well as the focus
on direct distribution and customer loyalty.
Sustainability and emissions reduction is strongly in focus for
the hotels sector, with many major brands committing to emissions
reduction targets and other goals including to energy efficiency,
water conservation and waste reduction. Inflation is another key
issue for the industry, driven by rising energy costs, higher
interest rates, and labour shortages. Although hotel revenue (based
on the major global brands) has been increasing, driven by the
post-pandemic recovery and strong pricing, hotels may need to
increase their efficiency in order to remain competitive (Skift
State of Travel 2023, July 2023).
Cruise market
From the end of July 2022, nearly the entire global ocean-going
cruise fleet was back in operation after the pandemic-induced
suspension of operation. Sector forecasts regarding the pandemic
impact and recovery project passenger volume to exceed the levels
recorded in baseline year 2019 by the end of 2023 and recover in
excess of 27 % above 2019 levels by the end of 2026 (CLIA, State of
the Cruise Industry 2023).
In calendar year 2022, the largest source markets were North
America, Western Europe, Asia and Australia / New Zealand /
Pacific. Based on passenger volume, the most popular destinations
within that period were the Caribbean, Central and Western
Mediterranean, Northern Europe, North America and Eastern
Mediterranean (CLIA, State of the Cruise Industry 2023).
Similar to the airline and hotel sectors, emissions reduction
and the path to net zero is strongly in focus for the cruise
industry. In addition, new regulations are being introduced, with
additional International Maritime Organisation (IMO) rules on
carbon intensity and rating system having entered into force at the
start of 2023, and the EU Emissions Trading Scheme (ETS) being
phased in from 2024.
Experiences and attractions market
The market for experiences and attractions is a sizeable and
rapidly growing tourism segment (based on TUI estimates). The
market is diverse, complex and highly fragmented on the supplier
side, and is predominantly operated offline. Intermediation and
in-destination presence therefore play a key role. However, due to
growing consolidation and digitalisation, the market is undergoing
change. Online bookings have increased, and many operators took the
chance during the pandemic to invest in websites, digital marketing
and software. In addition, the growth of OTAs impacts how customers
find and book experiences, and has prompted operators to improve
their technology and digital marketing (Phocuswire news, October
2022).
Our brand
Our brand is symbolised by our smiling red logo and stands for
our aim to create the moments that make customers lives richer. Our
new vision 'Excellence in Leisure Experiences' is about making our
ambition clear to the marketplace. We strive to do this at every
point in the customer journey both in the physical and digital
worlds. Our new brand world crystalises this with a clear brand
purpose, identity and promise.
Pre-pandemic, we successfully migrated our local brands to a
single global TUI brand. This established TUI as one of the
best-known travel and leisure brands in our core markets in Europe
(as measured by brand awareness and consideration in TUI brand
performance tracking, conducted by Metrixlab). As we exited the
pandemic, we sought to build on this success and support our growth
ambitions, by broadening the TUI brand appeal into new customer
segments and products.
Our Live Happy campaign, which launched at the end of 2021, has
performed well across all markets and segments (based on
quantitative testing comparing our campaign to external
benchmarks). Having built emotional resonance with the brand
through initial campaigns, we have deployed further advertising to
drive reappraisal and sales for our new and exclusive products e.
g. Cities and TUI Blue Hotels. Our modular approach to advertising
flexes by channel and segment, across markets and products, through
the whole marketing funnel. To attract future segments, we
increasingly look to diversify our media channel mix to reflect
media viewing trends (such as video on demand and social media).
Despite tough competition, we remain in the top spot for brand
awareness and consideration, and continue to build and increase
resonance based on brand identification and Net Promoter Score (TUI
Brand Pulse Tracking, July 2023).
We have also extended our brand beyond advertising - to all of
the touchpoints we have with our customers, as well as to our
people, directing them towards the same overarching goal of
creating a sustainable and consistent customer journey. To do so,
we use our customer centricity programme "Makers of Happy", our
values "Trusted", "Unique" and "Inspiring" and our new employer
brand "Let's TUI It!". All of this is intended to put TUI in a
strong position.
Group Earnings
Comments on the consolidated income statement
In the financial year 2023 TUI left behind the impacts of the
COVID-19 pandemic. In the Holiday Experience division the complete
product portfolio could be offered. TUI Group's business volume was
significantly higher than in financial year 2022, which was still
impacted by travel restrictions to contain COVID-19, in particular
in the first half. In aviation business disruptions did not occur
unlike in the financial year 2022. The number of guests reached
near pre crisis levels, revenues exceeded pre crisis levels. In
contrast the financial year 2023 was still affected by the general
increase in prices, especially for fuel, and by changes in exchange
rates. TUI was insufficiently hedged against these changes due to
limited access to relevant hedging instruments. However, overall
all the segments increased their results in comparison to the
financial year 2022.
Moreover, TUI Group's performance is subject to seasonality due
to the tourism business being characterised by the winter and
summer travel months. TUI Group's underlying EBIT improved
significantly by EUR 568.5 m to EUR 977.2 m year-on-year, an
improvement of EUR EUR 559.3 m on a constant currency basis.
Consolidated Income Statement of TUI AG for the period from 1 Oct 2022 to 30 Sep 2023
EUR million 2023 2022 Var. %
Revenue 20,665.9 16,544.9 + 24.9
Cost of sales 19,052.9 15,613.3 + 22.0
Gross profit 1,613.0 931.7 + 73.1
Administrative expenses 1,015.6 746.3 + 36.1
Other income 37.6 52.2 - 28.1
Other expenses 32.0 1.7 n. a.
Impairment of financial assets 18.4 7.3 + 152.1
Financial income 87.6 35.9 + 144.4
Financial expenses 533.6 509.5 + 4.7
Share of result of investments accounted for using the equity method 407.2 100.7 + 304.2
Impairment (+) / Reversals of impairment (-) of net investments in joint ventures and - 5.4 1.6 n. a.
associates
Earnings before income taxes 551.2 - 145.9 n. a.
Income taxes (expense [+], income [-]) 95.5 66.7 + 43.1
Group profit / loss 455.7 - 212.6 n. a.
Group profit / loss attributable to shareholders of TUI AG 305.8 - 277.3 n. a.
Group profit attributable to non-controlling interest 149.9 64.6 + 132.0
Revenue and cost of sales
Revenue
EUR million 2023 2022 Var. %
adjusted
Hotels & Resorts 1,032.5 806.2 + 28.1
Cruises 656.0 331.5 + 97.9
TUI Musement 770.0 578.4 + 33.1
Holiday Experiences 2,458.5 1,716.0 + 43.3
Northern Region 7,722.9 6,320.2 + 22.2
Central Region 7,329.7 5,787.3 + 26.7
Western Region 3,142.8 2,712.6 + 15.9
Markets & Airlines 18,195.4 14,820.1 + 22.8
All other segments 11.9 8.8 + 35.3
TUI Group 20,665.9 16,544.9 + 24.9
TUI Group (at constant currency) 20,821.5 16,544.9 + 25.8
In financial year 2023, TUI Group's revenue increased by 24.9 %
to EUR 20.7 bn. On a constant currency basis, revenue increased by
25.8 %. Revenue is presented alongside the cost of sales in the
income statement, which increased by 22.0 % in the period under
review.
Gross profit
The difference between revenue and the cost of sales increased
as a result of the normalisation of the business by EUR 681.3 m
year-on-year to a gross profit of EUR 1,613.0 m.
Administrative expenses
Administrative expenses increased by EUR 269.3 m year-on-year to
EUR 1,015.6 m (previous year EUR 746.3 m). Administrative expenses
increased due to the termination of state aid programmes as well as
increased exchange rates.
Other income and other expenses
In financial year 2023 other income mainly reflects gains from
the disposal of aircraft assets and income from emission
certificates. In the previous year, other income included the gain
on disposal of Nordhotel S. A. in October 2022 and also subsequent
income relating to the disposal of Riu Hotels S. A. in financial
year 2021.
In financial year 2023, other expenses result from portion of
the goodwill allocated to the segment Northern Region was disposed
with the transfer of the operational business of Sunwing. This
portion was determined as the relative value of the operations of
Sunwing disposed of in relation to the retained segment Northern
Region. In the previous year, other expenses included in particular
losses from the disposal of aircraft assets.
Financial result
The financial result in the 2023 financial year amounted to EUR
- 445.9 m after EUR - 473.7 m in the previous year. The increase in
financial income mainly resulted from higher interest income of EUR
76.9 m, up 192.4 % (previous year EUR 26.3 m). The increase in
financial expenses was mainly due to 6.7 % higher interest expenses
of EUR 525.1 m (previous year EUR 492.1 m), in particular driven by
liabilities to banks and lease liabilities, the unwinding of
discount on provisions and the measurement of hedges. On the other
hand, lower expenses were incurred for other interest and similar
expenses, largely due to lower interest expenses.
Share of result of joint ventures and associates
The share of result from joint ventures and associates of EUR
407.2 m (previous year EUR 100.7 m) comprises the proportionate net
profit for the year of these companies. The increase by EUR 306.4 m
was in particular driven by the normalisation of the business. In
addition, Sunwing realised a gain of EUR 110.3 m from the sale of
its operating activities, which increased the share of result of
joint ventures and associates.
Earnings before income taxes
In the period under review, earnings before income taxes
totalled EUR 551.2 m, an improvement of EUR 697.1 m year-on-year.
In the previous year, a loss of EUR - 145.9 m was recorded.
Group profit / loss
The Group profit for financial year 2023 totalled EUR 455.7 m,
an increase of EUR 668.3 m year-on-year (previous year loss of EUR
- 212.6 m).
Share in Group loss attributable to TUI AG shareholders
The share in Group loss attributable to TUI AG shareholders
amounted to EUR 305.8 m in financial year 2023 (previous year EUR -
277.3 m).
Non-controlling interests
In the completed financial year, non-controlling interests in
the Group result totalled EUR 149.9 m (previous year EUR 64.6 m.
They mainly related to RIUSA II Group.
Earnings per share
The interest in the Group result attributable to TUI AG
shareholders resulted in basic earnings per share of EUR 0.80
(previous year EUR - 1.02) in financial year 2023. Earnings per
share for all periods presented were adjusted for the effect of the
capital reduction carried out in February 2023 at a ratio of 10:1
and the effect of the bonus component of subscription rights issued
as part of the capital increase in March 2023.
Alternative Performance indicators
The Group's main financial KPI is underlying EBIT. We define the
EBIT in underlying EBIT as earnings before interest, income taxes
and income and expenses for the measurement of the Group's interest
hedges. EBIT by definition includes goodwill impairments.
Underlying EBIT is adjusted by income and expense items
impacting or distorting the assessment of the operating
profitability of the segments and the Group due to their level and
frequency. These items include gains on disposal from investments,
major gains and losses from the sale of assets and major
restructuring and integration expenses. In addition, adjustments
are carried for all effects from purchase price allocations,
ancillary acquisition costs and conditional purchase price
payments. Adjustments made in the reconciliation to underlying EBIT
include goodwill impairments.
Reconciliation to underlying EBIT of TUI Group
EUR million 2023 2022 Var. %
Earnings before income taxes 551.2 - 145.9 n. a.
plus: Net interest expense (excluding expense / income from measurement of interest hedges) 432.6 478.9 - 9.7
plus: Expense / less income from measurement of interest hedges 15.6 - 13.0 n. a.
EBIT 999.3 320.0 + 212.3
Adjustments:
less / plus: Separately disclosed items - 45.8 58.7 n. a.
plus: Expense from purchase price allocation 23.7 30.1 - 21.3
Underlying EBIT 977.2 408.7 + 139.1
TUI Group's EBIT increased by EUR 679.4 m to EUR 999.3 m in
financial year 2023.
EBIT
EUR million 2023 2022 Var. %
adjusted
Hotels & Resorts 555.5 476.6 + 16.6
Cruises 236.0 0.8 n. a.
TUI Musement 23.9 6.4 + 274.9
Holiday Experiences 815.5 483.7 + 68.6
Northern Region 151.8 - 137.6 n. a.
Central Region 83.6 47.0 + 77.7
Western Region 79.2 - 29.3 n. a.
Markets & Airlines 314.5 - 119.9 n. a.
All other segments - 130.6 - 43.9 - 197.7
TUI Group 999.3 320.0 + 212.3
TUI Group's operating EBIT adjusted for one-off effects
(underlying EBIT) improved by EUR 568.5 m to EUR 977.2 m in
financial year 2023.
Underlying EBIT
EUR million 2023 2022 Var. %
adjusted
Hotels & Resorts 549.5 480.3 + 14.4
Cruises 236.0 0.8 n. a.
TUI Musement 36.0 23.7 + 51.7
Holiday Experiences 821.5 504.7 + 62.8
Northern Region 71.5 - 101.6 n. a.
Central Region 88.1 74.6 + 18.1
Western Region 81.1 - 31.5 n. a.
Markets & Airlines 240.6 - 58.6 n. a.
All other segments - 84.8 - 37.4 - 126.6
TUI Group 977.2 408.7 + 139.1
TUI Group (at constant currency) 968.0 408.7 + 136.8
In financial year 2023, net income were adjusted by EUR 45.8 m
for one-off effects. For details, please refer to the Notes to the
segment data.
For one-off effects, please see page 206.
Other segment indicators
Reconciliation to underlying EBITDA
EUR million 2023 2022 Var. %
EBIT 999.3 320.0 + 212.3
Amortisation and impairment (+) / reversals (-) of other intangible assets and depreciation and 859.1 883.4 - 2.7
impairment (+) / reversals (-) of property, plants and equipment and right of use assets
EBITDA 1,858.5 1,203.3 + 54.4
Adjustments - 83.2 21.3 n. a.
EBITDA (underlying) 1,775.3 1,224.6 + 45.0
EBITDA
EUR million 2023 2022 Var. %
adjusted
Hotels & Resorts 740.4 685.3 + 8.0
Cruises 301.5 55.4 + 444.2
TUI Musement 59.2 39.4 + 50.3
Holiday Experiences 1,101.1 780.0 + 41.2
Northern Region 447.8 190.5 + 135.1
Central Region 180.8 158.2 + 14.3
Western Region 221.4 115.3 + 92.0
Markets & Airlines 850.0 464.0 + 83.2
All other segments - 92.7 - 40.7 - 127.8
TUI Group 1,858.5 1,203.3 + 54.5
Underlying EBITDA
EUR million 2023 2022 Var. %
adjusted
Hotels & Resorts 734.4 651.1 + 12.8
Cruises 301.5 55.4 + 444.2
TUI Musement 62.9 49.2 + 27.8
Holiday Experiences 1,098.7 755.6 + 45.4
Northern Region 356.0 213.2 + 67.0
Central Region 184.2 180.5 + 2.0
Western Region 220.4 109.7 + 100.9
Markets & Airlines 760.8 503.5 + 51.1
All other segments - 84.3 - 34.5 - 144.3
TUI Group 1,775.3 1,224.6 + 45.0
Segmental Performance
Holiday Experiences
Holiday Experiences
EUR million 2023 2022 Var. %
adjusted
Revenue 2,458.5 1,716.0 + 43.3
Underlying EBIT 821.5 504.7 + 62.8
Underlying EBIT (at constant currency) 836.7 504.7 + 65.8
Hotels & Resorts
EUR million 2023 2022 Var. %
adjusted
Total revenue1 1,855.3 1,499.6 + 23.7
Revenue 1,032.5 806.2 + 28.1
Underlying EBIT 549.5 480.3 + 14.4
Underlying EBIT (at constant currency) 556.8 480.3 + 15.9
Available bed nights2 (in '000) 38,521 37,761 + 2.0
Riu 13,751 13,490 + 1.9
Robinson 3,749 3,582 + 4.7
Blue Diamond 6,036 5,432 + 11.1
Occupancy3 (in %, variance in % points) 82 76 + 6
Riu 90 82 + 8
Robinson 71 66 + 5
Blue Diamond 83 79 + 5
Average daily rate4 (in EUR) 87 77 + 12.6
Riu 78 69 + 13.5
Robinson 106 103 + 2.1
Blue Diamond 152 137 + 10.9
Revenue includes fully consolidated companies, all other KPIs
incl. companies measured at equity.
1 Total revenue includes intra-Group revenue.
2 Number of hotel days open multiplied by beds available (Group
owned and leased hotels)
3 Occupied beds divided by available beds (Group owned and
leased hotels)
4 Board and lodging revenue divided by occupied bed nights
(Group owned and leased hotels)
Our Hotels & Resorts segment with its diversified hotel
portfolio of well recognized brands, surpassed the already strong
operational performance in the previous year delivering an
underlying EBIT of EUR 549.5 m, up EUR 69.2 m year-on-year
(previous year: EUR 480.3 m) and above pre-pandemic levels of FY
2019. Results were driven by an improved operational performance
supported in particular by higher occupancies and improved rates.
Popular destinations proved to be Turkey, the Balearics and Greece
as well as our year-round destinations in the Caribbean, the
Canaries and Cape Verde.
The number of available bed nights on offer rose by 2.0 %
year-on-year as we continued to expand our capacity in this
segment. The average occupancy rate increased across all our brands
by a total of 6 %pts to 82 % (previous year: 76 %). Average daily
rate per bed increased by 12.6 % to EUR 87 (previous year: EUR 77)
and were well ahead of the pre-pandemic levels, with Riu continuing
to drive the strong performance.
On a brand by brand basis, Riu occupancy increased by 8 % pts to
90 % versus previous year (previous year: 82 %) and average daily
rate improved 13.5 % to EUR 78 (previous year: EUR 69), with the
Group once again delivering an improved operational performance in
particular in the Caribbean market.
Robinson achieved an improved result across its portfolio of
mainly four- and five star club hotels, supported by higher
occupancy up 5 % pts to 71 % versus previous year (previous year:
66 %) and average daily rate up 2.1 % to EUR 106 (previous year:
EUR 103).
Blue Diamond occupancy increased by 5 % pts to 83 % versus
previous year (previous year: 79 %) and average daily rates were
10.9 % higher at EUR 152 (previous year: EUR 137), benefitting from
higher demand to our Caribbean and Mexican properties.
Our other hotels which include popular brands such as TUI Blue,
TUI Magic Life and TUI Suneo, profited from higher rates and
occupancies.
In Hotels & Resorts, product growth is being delivered by
expanding our portfolio in new and existing destinations. In FY23
we added 41 new hotels to our pipeline. This growth is being
achieved in accordance with our asset-right and scalable approach
through our joint ventures. During the year we announced plans to
further expand the TUI Blue portfolio, our brand focused on
experience orientated lifestyle travellers. The expansion is driven
by international partnerships in which TUI Blue hotels are operated
either under management contracts or by franchises. In addition, we
also announced the creation of a new off-balance sheet joint
venture with Riu. This targets realising unique opportunities to
invest into growth, whilst limiting the financial impact on TUI's
leverage and net investments. The global Hansainvest hotel fund,
initiated by TUI, is successfully executing its first two hotel
investments on Zanzibar and on Cape Verde. Here, TUI is providing
hotel management and investment advisory services to support our
asset-light growth development.
Cruises
EUR million 2023 2022 Var. %
Revenue1 656.0 331.5 + 97.9
Underlying EBIT 236.0 0.8 n. a.
Underlying EBIT (at constant currency) 235.7 0.8 n. a.
Available passenger cruise days2 (in '000)
Mein Schiff 6,121 5,637 + 8.6
Hapag-Lloyd Cruises 589 531 + 11.0
Marella Cruises 2,789 2,073 + 34.5
Occupancy3 (in %, variance in % points)
Mein Schiff 95 69 + 26
Hapag-Lloyd Cruises 72 58 + 14
Marella Cruises 96 70 + 26
Average daily rate (in EUR)
Mein Schiff4 171 178 - 4.0
Hapag-Lloyd Cruises4 735 653 + 12.6
Marella Cruises5 (in GBP) 181 164 + 10.6
1 No revenue is carried for Mein Schiff and Hapag-Lloyd Cruises
as the joint venture TUI Cruises is consolidated at equity.
2 Number of operating days multiplied per berths available on
the operated ships. This key figure has changed compared to
previous periods.
3 Achieved passenger cruise days divided by available passenger
cruise days
4 Ticket revenue divided by achieved passenger cruise days
5 Revenue (stay on ship inclusive of transfers, flights and
hotels due to the integrated nature of Marella Cruises) divided by
achieved passenger cruise days
The Cruises segment comprises the joint venture TUI Cruises in
Germany, which operates cruise ships under the brands Mein Schiff
and Hapag-Lloyd Cruises, and Marella Cruises in UK. The segment
operated a full fleet of 16 ships for the vast majority of the
financial year against a more limited programme in the previous
financial year, when full operations were only resumed in April
2022 following the COVID-19 restrictions during the winter months.
In Spring 2023 Mein Schiff Herz transferred from TUI Cruises to
Marella and after a period of refurbishment, the newly named
Marella Voyager returned to service at the beginning of June for
the summer season.
The segment continued its recovery throughout the year. As a
result, underlying EBIT of EUR 236.0 m was up EUR 235.3 m (previous
year: EUR 0.8 m). All of our three Cruise brands contributed to the
positive EBIT development boosted by increased volumes as well as
higher occupancies. Occupancy rates continued to rise throughout
the year ranging between 72 % and 96 % across our Cruises brands
(previous year: between 58 % and 70 %), with rates for many
itineraries achieving the peaks last seen in 2019.
Mein Schiff operated their full fleet of six ships during the
summer season against seven ships during the winter season,
following the transfer of Mein Schiff Herz to Marella Cruises in
spring 2023. In the prior year the brand had only been able to
operate its full fleet of seven ships from April 2022 following the
lifting of the COVID-19 restrictions. The brand offered itineraries
to the Canaries, the Caribbean, Central America, Asia and the
Orient during the winter with an offering to the Mediterranean,
Northern Europe and the Baltic Sea during the summer. With the
return to normal operations, available passenger cruise days of
6,121 k were up 8.6 % (previous year: 5,637 k). Occupancy of 95 %,
was 26 %pts higher versus previous year (previous year: 69 %)
underlining the higher demand for our German language premium
all-inclusive product. Mein Schiff average daily rate of 171EUR was
- 4.0 % versus previous year (previous year: EUR 178) but was
virtually in line with pre-pandemic levels (FY 2019: EUR 174).
Despite higher rates during the summer year-on-year, the overall
lower rates against previous year were driven by the sale of a
higher mix of premium cabins in the prior winter half-year when
occupancies and capacity were significantly lower due to a more
restricted programme.
Hapag-Lloyd Cruises, our luxury and expeditions brand, provided
itineraries to Europe, Asia, the Americas and around the world with
a full fleet of five ships able to operate again within a
restriction-free environment. As a result, average passenger cruise
days rose 11.0 % to 589 k (previous year: 531 k). Average daily
rate of EUR 735 increased by 12.6 % versus previous year (previous
year: EUR 653) and was well above pre-pandemic levels of EUR 641.
Occupancy of 72 % rose by 14 %-pts versus previous year (previous
year: 58 %) underlining the higher demand for these cruises.
Marella Cruises, our UK cruise brand, offered itineraries to the
Mediterranean, the Canaries, Caribbean and North America during the
year. The business was able to operate a full fleet with Marella
Voyager complimenting the fleet of now five vessels during the
summer season. Available passenger cruise days increased by 34.5 %
to 2,789 k (previous year: 2,073 k) as a consequence and were also
supported by a return to a full winter offering after the COVID-19
restrictions in the previous year. The average daily rate was GBP
181, up 10.6 % year-on-year (previous year: GBP 164) driven by
itineraries to the Mediterranean and the expansion of the fleet.
Occupancy also improved significantly to 96 %, up 26 % pts versus
previous year (previous year: 70 %).
TUI Musement
EUR million 2023 2022 Var. %
adjusted
Total revenue* 1,160.9 866.7 + 34.0
Revenue 770.0 578.4 + 33.1
Underlying EBIT 36.0 23.7 + 51.7
Underlying EBIT (at constant currency) 44.3 23.7 + 86.8
* Total revenue includes intragroup revenue.
TUI Musement, our tours and activities business, offers a wide
range of experiences (excursions, activities and tickets),
transfers and tours (multi-day tours) to both popular city and sun
& beach destinations. The digitalisation initiatives and the
development of own differentiated products is well on track and
continues to drive growth.
The business achieved an underlying EBIT of EUR 36.0 m, a
notable increase of EUR 12.3 m compared to the previous year
(previous year: EUR 23.7 m). This improvement was driven by the
growth of the B2C experiences offering, increased B2B partnerships
and higher transfer volumes from our Markets & Airlines
business.
As a result, TUI Musement reported 28.2 m tour operator guest
transfers, a 17 % year-on-year increase (previous year: 24.0 m).
Additionally, the business sold 9.4 m experiences across its global
destinations, marking a 34 % growth from the previous year
(previous year: 7.0 m).
Markets & Airlines
Markets & Airlines
EUR million 2023 2022 Var. %
adjusted
Revenue 18,195.4 14,820.1 + 22.8
Underlying EBIT 240.6 - 58.6 n. a.
Underlying EBIT (at constant currency) 216.2 - 58.6 n. a.
Direct distribution mix1 (in %, variance in % points) 76 78 - 2
Online mix2 (in %, variance in % points) 51 54 - 3
Customers (in '000) 19,010 16,780 + 13.3
1 Share of sales via own channels (retail and online)
2 Share of online sales
Our Markets & Airlines business has continued its post
COVID-19 recovery across the regions during the year within the
framework of an improved booking environment. The winter half-year
results in particular were impacted by inflationary pressures
especially on energy, exchange rate volatility and the negative
impact of valuation effects from ineffective hedge positions. The
summer half-year benefitted from the non-repeat of the significant
operational flight disruption costs experienced especially in UK in
the previous year, following the unparalleled industry ramp-up
after the COVID-19 pandemic. Results were impacted by EUR 25 m
during the peak summer season due to the wildfires on Rhodes.
Against this background, underlying EBIT for the segment of EUR
240.6 m, was up EUR 299.1 m on previous year (previous year: EUR -
58.6 m loss), supported by higher demand for our product offering
at significantly higher prices.
A total of 19,010 k customers departed for their holidays during
the financial year, up 13.3 % year-on-year (previous year: 16,780
k) with demand higher across all our source markets. Bookings taken
for both the summer season and especially the winter season were
well ahead of previous year.
Traditional short- and medium-haul destinations such as the
Canaries and Egypt were again popular amongst customers during the
winter season, whilst mainland Spain, Greece, Turkey, the Balearics
and the Canaries were well sought after in the summer season. Also,
destinations such as Mexico and the Dominican Republic proved to be
in good demand throughout the financial year.
A key focus in the transformation of the segment is the
strengthening and leveraging of our capabilities and market
positions with growth delivered from new products and new
customers, based on scalable common platforms. During the year we
rolled-out our group-wide platforms for accommodation-only,
flight-only and dynamic packaging to more markets and we are
continuing to develop and enhance the capabilities of these
platforms.
Northern Region
EUR million 2023 2022 Var. %
Revenue 7,722.9 6,320.2 + 22.2
Underlying EBIT 71.5 - 101.6 n. a.
Underlying EBIT (at constant currency) 52.1 - 101.6 n. a.
Direct distribution mix1 (in %, variance in % points) 94 94 -
Online mix2 (in %, variance in % points) 69 71 - 2
Customers (in '000) 7,360 6,475 + 13.7
1 Share of sales via own channels (retail and online)
2 Share of online sales
Northern Region comprises the source markets UK and Nordics with
our strategic tour operator venture in Canada being sold in April
2023.
Northern Region achieved a significantly improved underlying
EBIT of EUR 71.5 m (previous year: EUR - 101.6 m loss) supported by
higher margins as well as the absence of the level of flight
disruptions witnessed in the previous year.
Customer volume increased significantly by 13.7 % to 7,360 k
versus previous year (previous year: 6,475 k) with volumes
recovering in particular in the UK to above pre-pandemic levels.
Online distribution for the Region continued to be high at 69 %,
down 2 %pts against previous year of 71 %, but up 2 %pts versus
pre-pandemic levels (FY 2019: 67 %), The comparison against last
year is limited due to lower volumes and longer retail shop
closures resulting from the COVID-19 restrictions during the winter
last year. Direct distribution at 94 % maintaining the high rate of
both the previous year and pre-pandemic.
During the year we announced the expansion of our UK capacities
for the financial year 2024 as part of our customer growth plans.
These will provide customers with more flexibility and choice and
also enhance our dynamic product offering. In September we also
announced the re-launch of our First Choice brand in UK, which
targets new and especially younger customers, to enlarge our appeal
across more customer segments.
Central Region
EUR million 2023 2022 Var. %
adjusted
Revenue 7,329.7 5,787.3 + 26.7
Underlying EBIT 88.1 74.6 + 18.1
Underlying EBIT (at constant currency) 85.0 74.6 + 14.0
Direct distribution mix1 (in %, variance in % points) 56 58 - 2
Online mix2 (in %, variance in % points) 29 30 - 1
Customers (in '000) 7,036 5,922 + 18.8
1 Share of sales via own channels (retail and online)
2 Share of online sales
Central Region comprises Germany, Austria, Switzerland and
Poland.
The segment reported underlying EBIT profit of EUR 88.1 m, an
increase of EUR 13.5 m against the previous year's EUR 74.6 m
profit which included the benefit of a EUR 50 m state compensation
for the impact on business of the pandemic. The increase was driven
in particular by an improved operational performance in the key
Germany source market, supported by higher volumes and prices.
Customer numbers increased by 18.8 % to 7,036 k versus previous
year (previous year: 5,922 k) in-line with the positive development
of the Region post pandemic. All source markets contributed to this
improvement, with Poland achieving more than one million guests for
the first time. Online distribution for Central Region of 29 %
maintained virtually the level of the previous year of 30 % whereby
the comparison is limited due to lower volumes and longer retail
shop closures due to the COVID-19 restrictions during the winter
last year. Against pre-pandemic levels, online distribution
continued to be significantly up by + 6 %pts. emphasising the
development of our online offering in this region in line with
consumer demand. Similarly, direct distribution of 56 % was also
close to prior year (previous year: 58 %) and up 7 %pts against
pre-pandemic levels of 50 %.
Western Region
EUR million 2023 2022 Var. %
Revenue 3,142.8 2,712.6 + 15.9
Underlying EBIT 81.1 - 31.5 n. a.
Underlying EBIT (at constant currency) 79.1 - 31.5 n. a.
Direct distribution mix1 (in %, variance in % points) 76 80 - 4
Online mix2 (in %, variance in % points) 57 60 - 3
Customers (in '000) 4,614 4,383 + 5.3
1 Share of sales via own channels (retail and online)
2 Share of online sales
Western Region comprises Belgium, Netherlands and France.
Western Region reported an underlying EBIT of EUR 81.1 m, up EUR
112.6 m versus previous year (previous year: EUR - 31.5 m loss).
Results were driven by higher demand at improved prices as well as
an improved airline operational performance with the non-repeat of
the flight delay and cancellation costs due to operational
disruptions in particular at Schiphol Airport, which affected the
business in the previous year.
Customer volume rose by 5.3 % to 4,614 k year-on-year (previous
year: 4,383 k) reflecting the improved booking environment. Online
distribution for the region stood at 57 %, down 3 %pts (previous
year: 60 %), but maintaining the pre-pandemic levels (FY 2019: 57
%). Again, the comparison to prior year is limited due to COVID-19
restrictions. Direct distribution of 76 % was 4 %pts down on
previous year but maintained pre-pandemic levels.
All other segments
EUR million 2023 2022 Var. %
adjusted
Revenue 11.9 8.8 + 35.3
Underlying EBIT - 84.8 - 37.4 - 126.6
Underlying EBIT (at constant currency) - 84.9 - 37.4 - 126.7
All other segments' includes the corporate centre functions of
TUI AG and the interim holdings, the Group's real estate companies
and the Group's key tourism functions. The previous period numbers
have been adjusted following the re-segmentation of Future Markets
to other segments within the Group.
The underlying EBIT loss for All other segments increased by EUR
47.4 m versus previous year, (previous year: EUR - 37.4 m loss).
The devaluation of loans in particular contributed to the increase
in the loss. The previous year's result was also positively
influenced by valuation effects, particularly from the reversal of
provisions.
Net Assets
Development of the Group's asset structure
EUR million 30 Sep 2023 30 Sep 2022 Var. %
Fixed assets 10,929.1 10,636.0 + 2.8
Non-current receivables 676.8 715.7 - 5.4
Non-current assets 11,605.9 11,351.7 + 2.2
Inventories 62.1 56.1 + 10.8
Current receivables 2,355.4 2,108.1 + 11.7
Cash and cash equivalents 2,060.3 1,736.9 + 18.6
Assets held for sale 68.6 2.7 n. a.
Current assets 4,546.5 3,903.8 + 16.5
Assets 16,152.4 15,255.5 + 5.9
Equity 1,947.2 645.7 + 201.5
Liabilities 14,205.2 14,609.7 - 2.8
Equity and liabilities 16,152.4 15,255.5 + 5.9
The Group's balance sheet total increased by 5.9 % year-on-year
to EUR 16.2 bn.
Vertical structural indicators
Non-current financial assets accounted for 71.9 % of total
assets, compared with 74.4 % in the previous year. The
capitalisation ratio (ratio of fixed assets to total assets)
decreased from 69.7 % to 67.7 %.
Current assets accounted for 28.1 % of total assets, compared
with 25.6 % in the previous year. The Group's cash and cash
equivalents increased by EUR 323.4 m to EUR 2,060.3 m. They thus
accounted for 12.8 % of total assets, as against 11.4 % in the
previous year.
Horizontal structural indicators
At the balance sheet date, the ratio of equity to non-current
assets has been 16.8 %. At previous year's balance sheet date this
figure was 5.7 %. The ratio of equity plus non-current financial
liabilities to fixed assets was 28.8 %, compared with 22.3 % in the
previous year.
Development of the Group's non-current assets
Structure of the Group's non-current assets
EUR million 30 Sep 2023 30 Sep 2022 Var. %
Goodwill 2,949.2 2,970.6 - 0.7
Other intangible assets 538.0 507.6 + 6.0
Property, plant and equipment 3,480.3 3,400.9 + 2.3
Right-of-use assets 2,763.4 2,971.5 - 7.0
Investments in joint ventures and associates 1,198.2 785.4 + 52.6
Fixed assets 10,929.1 10,636.0 + 2.8
Receivables and assets 366.2 493.7 - 25.8
Deferred tax claims 310.6 222.0 + 39.9
Non-current receivables 676.8 715.7 - 5.4
Non-current assets 11,605.9 11,351.7 + 2.2
Goodwill
Goodwill remained at previous year's level of EUR 2,949.2 m.
For details, please refer to the section Goodwill in the Notes
from page 217.
Property, plant and equipment
Property, plant and equipment totalled EUR 3,480.3 m at the
balance sheet date, up by EUR 79.4 m year-on-year. Major additions
to property, plant and equipment related to construction,
acquisitions and renovations in the Hotels & Resorts segment,
refurbishment and maintenance work on cruise ships and investment
in aircraft. The majority of the disposals related to the disposal
of advance payments for the delivery of aircraft. In addition,
tests of the carrying amounts led to impairments primarily on
hotels including land.
Development of property, plant and equipment
EUR million 30 Sep 2023 30 Sep 2022 Var. %
Real estate with hotels 1,936.3 1,800.9 + 7.5
Other land 37.3 186.1 - 80.0
Aircraft 341.5 342.3 - 0.2
Ships 469.6 428.4 + 9.6
Machinery and fixtures 384.8 360.8 + 6.7
Assets under construction 151.9 170.7 - 11.0
Payments on accounts 158.9 111.7 + 42.3
Total 3,480.3 3,400.9 + 2.3
Right-of-use assets
As a lessee, TUI recognises right-of-use assets and lease
liabilities in the statement of financial position in accord-ance
with IFRS 16. The right-of-use assets relate to moveable assets
such as aircraft, vehicles and cruise ships, as well as property
such as hotel buildings and land, office buildings and travel
agencies.
Companies measured at equity
Twenty associated companies and 27 joint ventures were measured
at equity. At EUR 1,198.2 m, their value decreased by 52.6 %
year-on-year as at the balance sheet date.
Development of the Group's current assets
Structure of the Group's current assets
EUR million 30 Sep 2023 30 Sep 2022 Var. %
Inventories 62.1 56.1 + 10.8
Trade accounts receivable and other financial assets1 1,397.1 1,330.1 + 5.0
Other non-financial assets2 917.3 755.0 + 21.5
Current tax assets 41.0 23.1 + 77.9
Cash and cash equivalents 2,060.3 1,736.9 + 18.6
Assets held for sale 68.6 2.7 n. a.
Current assets 4,546.5 3,903.8 + 16.5
1 Incl. receivables from derivative financial instruments
2 Incl. touristic prepayments
Financial Position of the Group
Principles and goals of financial management
Principles
TUI Group's financial management is centrally operated by TUI
AG, which acts as the Group's internal bank. Financial management
covers all Group companies in which TUI AG directly or indirectly
holds an interest of more than 50 %. It is based on policies
covering all cash flow-oriented aspects of the Group's business
activities. In implementing a cross-border organisation approach,
TUI AG has outsourced some of its treasury activities to First
Choice Holidays Finance Ltd, a British Group company. However, the
treasury activities are carried out on a coordinated and
centralised basis.
Goals
TUI's financial management goals include ensuring sufficient
liquidity for TUI AG and its subsidiaries and limiting financial
risks from fluctuations in foreign exchange rates, commodity prices
and interest rates as well as default risks associated with
treasury activities.
Liquidity safeguards
The Group's liquidity safeguards consist of two components:
-- In the course of the annual Group planning process, TUI Group
draws up a multi-annual financial budget,from which long-term
financing and refinancing requirements are derived. This
information and financial marketobservation to identify refinancing
opportunities create a basis for decision-making for concluding
appropriatefinancing instruments for long-term corporate funding at
an early stage.
-- TUI uses syndicated credit facilities and bilateral bank
lines as well as its liquid funds to securesufficient short-term
cash reserves. Through intra-Group cash pooling, excess cash of
individual Group companies isused to finance the cash requirements
of other Group companies. A weekly rolling liquidity planning
system is thebasis for arrangements with banks.
Limiting financial risks
The Group companies operate on a worldwide scale. TUI Group is
therefore exposed to financial risks from changes in exchange
rates, commodity prices and interest rates.
The key operating financial transaction risks relate to the
euro, US dollar, pound sterling and Swedish krona and to changing
fuel prices. They mainly result from cost items in foreign
currencies held by individual Group companies, e. g. hotel
procurement, aircraft fuel and bunker oil invoices or ship handling
costs.
The Group has entered into derivative hedges in various foreign
currencies in order to limit its exposure to risks from changes in
exchange rates. Changes in commodity prices affect TUI Group, in
particular, in procuring fuels such as aircraft fuel and bunker
oil. Some of these price risks related to fuel procurement are
hedged by derivative instruments. Where price increases can be
passed on to customers due to contractual agreements, this is also
reflected in our hedging behaviour.
Hedging cover is taken out ahead of the markets' customer
booking profiles. This provides a degree of certainty over input
costs when planning pricing and capacity.
In order to control risks related to changes in interest rates
arising on funding in international money and capital markets and
investments of liquid funds, derivative interest hedges are used on
a case-by-case basis as part of the Group's interest management
system.
In order to limit default risks from settlement payments for
derivatives as well as money market investments with banks, TUI AG
and First Choice Holidays Finance Ltd have defined credit rating
criteria for the selection of their counterparties. Trading and
transaction limits are allocated to these counterparties on the
basis of the credit ratings issued by the major rating agencies.
The credit ratings and the corresponding limits are regularly
reviewed. In the event of changes in the fair value of derivatives
or rating changes, new business with these counterparties may
temporarily be suspended until the limits can be applied
appropriately again.
The use of derivative hedges is based on underlying
transactions; the derivatives are not used for speculation
purposes.
More detailed information on hedging strategies and risk
management as well as financial transactions and the scope of such
transactions at the balance sheet date is provided in the Risk
Report and the section Financial instruments in the Notes to the
consolidated financial statements.
See from page 35 ff. or 249 ff.
Capital structure
Capital structure of the Group
EUR million 30 Sep 2023 30 Sep 2022 Var. %
Non-current assets 11,605.9 11,351.7 + 2.2
Current assets 4,546.5 3,903.8 + 16.5
Assets 16,152.4 15,255.5 + 5.9
Subscribed capital 507.4 1,785.2 - 71.6
Capital reserves 9,090.1 6,085.9 + 49.4
Revenue reserves - 8,474.6 - 8,432.7 - 0.5
Silent participation - 420.0 n. a.
Non-controlling interest 824.3 787.3 + 4.7
Equity 1,947.2 645.7 + 201.5
Non-current provisions 1,485.7 1,323.2 + 12.3
Current provisions 366.7 574.2 - 36.1
Provisions 1,852.4 1,897.4 - 2.4
Non-current financial liabilities 1,198.5 1,731.4 - 30.8
Current financial liabilities 98.5 319.9 - 69.2
Financial liabilities (IFRS 16) 1,297.0 2,051.3 - 36.8
Non-current lease liabilities 2,216.9 2,508.7 - 11.6
Current lease liabilities 701.2 698.8 + 0.3
Lease liabilities 2,918.1 3,207.5 - 9.0
Other non-current liabilities 427.1 303.6 + 40.7
Other current liabilities 7,708.9 7,149.8 + 7.8
Other liabilities 8,136.0 7,453.4 + 9.2
Debt related to assets held for sale 1.6 - n. a.
Liabilities 16,152.4 15,255.5 + 5.9
Capital ratios
EUR million 30 Sep 2023 30 Sep 2022 Var. %
Non-current capital 7,275.5 6,512.8 + 11.7
Non-current capital in relation to balance sheet total% 45.0 42.7 + 2.4 *
Equity ratio% 12.1 4.2 + 7.8 *
Equity and non-current financial liabilities 3,145.7 2,377.2 + 32.3
Equity and non-current financial liabilities in relation to 19.5 15.6 + 3.9 *
balance sheet total%
* Percentage points
Overall, non-current capital increased by 11.7 % to EUR 7,275.5
m. It accounted for 45.0 % (previous year 42.7 %) of the balance
sheet total.
The equity ratio was 12.1 % (previous year 4.2 %). Equity and
non-current financial liabilities accounted for 19.5 % (previous
year 15.6 %) of the balance sheet total.
Equity
In the completed financial year, after three shares had been
redeemed in order to achieve a rounded figure for the capital
stock, the existing capital stock of the Company amounting to EUR
1,785,205,850.00, divided into 1,785,205,850 registered no-par
value shares, each representing a pro rata amount of the capital
stock of EUR 1.00, was reduced by EUR 1,606,685,265.00 to EUR
178,520,585.00 in accordance with the provisions on capital
reduction pursuant to sections 222 et seq of the German Stock
Corporation Act (AktG) in conjunction with section 7 (6) of the
German Securities Trading Act (WStBG) for the purpose of
transferring part of the capital stock to the Company's capital
reserve.
The reduction was effected by a ten-for-one reverse stock split,
so that ten no-par value registered shares were consolidated into
one no-par value registered share.
The capital reduction was related to a recapitalisation of the
Company in line with section 22 WStBG. The reduction amount of EUR
1,606,685,265.00 was transferred to the Company's non-distributable
capital reserve in accordance with section 7 (6) sentence 5
WStBG.
Following the capital reduction, the Company's capital stock of
EUR 178,520,585.00, divided into 178,520,585 no-par value
registered shares, was increased to EUR 507,431,033.00 by issuing
328,910,448 new no-par value registered shares with a pro rata
amount of capital stock of EUR 1.00 per no-par value share, divided
into 507,431,033 no-par value registered shares. This increase in
capital stock of EUR 328.9 m was carried out entirely from
authorised capital using the authorisations granted by the Annual
General Meeting on 8 February 2022 to issue new registered shares
against cash contributions worth a maximum of EUR 162.3 million
(Authorised Capital 2022 / I) and to issue new shares against cash
or non-cash contributions in the amount of EUR 626.9 m (Authorised
Capital 2022 / II).
Silent ESF participations
The remaining Silent Participation I of EUR 420.0 m taken out by
the ESFin financial year 2021, convertible into TUI AG shares at a
conversion price of EUR 1.00 per share, was repaid in full in April
2023 following a capital increase without the ESF having exercised
its conversion option.
Provisions
Provisions mainly comprise provisions for pension obligations,
tax provisions and provisions for typical operating risks
classified as current or non-current, depending on expected
occurrence. At the balance sheet date, they accounted for a total
of EUR 1,852.4 m, down by EUR 45.0 m year-on-year.
Financial and lease liabilities
Composition of financial liabilities and lease liabilities
EUR million 30 Sep 2023 30 Sep 2022 Var. %
Bonds 542.7 580.5 - 6.5
Liabilites to banks 718.8 1,382.6 - 48.0
Other financial liabilities 35.5 88.2 - 59.8
Financial liabilities 1,297.0 2,051.3 - 36.8
Lease liabilities 2,918.1 3,207.5 - 9.0
Our non-current financial liabilities declined by EUR 532.9 m to
EUR 1,198.5 m year-on-year. The decline was primarily attributable
to a reduction in liabilities to banks.
For more detailed information, please refer to the Notes to the
consolidated financial statements.
See chapter Financial and lease liabilities, page 244.
Overview of TUI's listed bond
The table below lists the maturities, nominal volumes and annual
interest coupon of the listed convertible bond issued in 2021 with
a nominal value of EUR 589.6 m and a seven-year term.
Listed bond
Amount Amount Interest rate
Capital measures Issuance Maturity initial outstanding % p. a.
EUR million EUR million
Convertible Bond 2021 April / July 2021 April 2028 590 590 5.000
2021 bonds
In March 2023, the conversion price of the convertible bonds
issued in 2021 of EUR 589.6 m was adjusted to EUR 26.6707 per share
due to the capital reduction and subsequent rights issue.
See Other notes from page 275.
ESF warrant bond
In April 2023, the remaining EUR 58.7 m of the warrant bond
issued to the Economic Stabilisation Fund (ESF) in October 2020 was
repurchased together with the outstanding 58.7 m warrants following
a capital increase without the ESF having exercised its warrant
rights.
Syndicated credit facilities of TUI AG
On the basis of a contractual agreement and due to proceeds from
a capital increase, TUI AG's syndicated credit facilities
originally totalling around EUR 3.7 bn were reduced to around EUR
2.7 bn by cancelling an amount of EUR 1.05 bn of the undrawn KfW
tranche previously amounting to EUR 2.1 bn.
In May 2023, ahead of the maturity date, an agreement was
concluded with the lenders under TUI AG's syndicated credit
facilities totalling around EUR 2.7 bn, including a cash tranche by
KfW of EUR 1.05 bn and a bank guarantee tranche of EUR 190.0 m, to
extend the maturity of these facilities to July 2026.
The interest rate for cash drawdowns is variable and depends on
the short-term interest rate level (EURIBOR or SONIA) and TUI's
credit rating plus a margin.
At the balance sheet date, no cash drawdowns had been made on
the syndicated credit facilities.
2018 Schuldschein
In July 2023, the Schuldschein of EUR 425 m issued in 2018 was
reduced to EUR 242 m by redeeming two tranches worth EUR 183 m.
Bank credits and lease liabilities
Liabilities to banks mainly relate to the Schuldschein worth of
EUR 242 m of TUI AG and liabilities from the financing of aircraft
and hotel facilities.
Lease liabilities essentially relate to aircraft funding and
hotel leases. For more detailed information, in particular on the
remaining terms, please refer to the section Financial and lease
liabilities in the Notes to the consolidated financial
statements.
See section Financial and lease liabilities, page 244.
Other liabilities
The combined figure for other liabilities mainly includes trade
payables and customer deposits. At EUR 8,136.0 m, it was EUR 682.6
m up year-on-year.
Key credit facilities
Syndicated credit facilities of TUI AG
TUI AG's syndicated credit facility of around EUR 2.7 bn
included a tranche of EUR 190 m for bank guarantees. At the balance
sheet date, no cash drawdowns had been made from this credit
facility. An amount of EUR 109.2 m was drawn under this credit
facility by utilising bank guarantees.
Bilateral guarantee facilities of TUI AG with banks
In October 2022, TUI AG concluded a guarantee facility of EUR
345.6 m with a bank in order to meet a regulatory obligation. At
the balance sheet date, this guarantee facility was fully utilsed.
In October 2023, this guarantee facility was replaced by a new
guarantee facility and utilsed in exchange for a new guarantee
worth EUR 386.0 m.
In addition, TUI AG concluded further bilateral guarantee
facilities with banks with a total amount of EUR 19.8 m for the
provision of bank guarantees in the framework of ordinary business
activities. Some of the guarantees have a term of several years.
The guarantees granted give rise to a commission in the form of a
fixed percentage of the maximum guaranteed amount. At the balance
sheet date, an amount of EUR 4.9 m of these facilities had been
utilised.
Obligations from financing agreements
TUI AG's Schuldschein worth nominal EUR 242 m, the convertible
bond worth nominal EUR 589.6 m and the credit and guarantee
facilities for TUI AG contain a number of obligations.
Under its syndicated credit facility worth EUR 2.7 bn, TUI AG
has a duty to comply with certain financial covenants (as defined
in the contract). These require (a) compliance with an
EBITDAR-to-net interest expense ratio measuring TUI Group's
relative charge from the interest result and its lease and rental
expenses; and (b) compliance with a net debt-to-EBITDA ratio,
calculating TUI Group's relative charge from financial liabilities.
The EBITDAR-to-net interest expense ratio must have a coverage
multiple of at least 2.5; net debt must not exceed 3.0 times
EBITDA. The financial covenants are determined every six months,
but the banks initially agreed to apply less tight financial
covenants up until and including 31 March 2023. In addition, TUI's
scope for pledging or selling assets, acquiring other companies or
shareholdings, or effecting mergers has been restricted.
TUI AG's Schuldschein worth nominal EUR 242 m, the convertible
bond worth nominal EUR 589.6 m and the credit and guarantee
facilities for TUI AG also contain additional clauses typical of
financing instruments of this type. Non-compliance with these
obligations provide the lenders the right to terminate the
facilities and terminate the financing arrangements for immediate
repayment.
Ratings by Standard & Poor's and Moody's
TUI AG ratings
2019 2020 2021 2022 2023 Outlook
Standard & Poor's BB CCC+ CCC+ B- B positive
Moody's Ba2 Caa1 Caa1 B3 B2 positive
In the wake of the COVID-19 pandemic, both Standard & Poor's
and Moody's successively lowered TUI's rating to CCC+ and Caa1,
respectively, in 2020.
Following upgrades of their ratings to B- (Standard &
Poor's) and B3 (Moody's) in financial year 2022, the two rating
agencies upgraded their ratings to "B (positive outlook)" (Standard
& Poor's) and "B2 (positive outlook)" (Moody's) in April and
May 2023 due to a significant improvement in the business
environment, the stronger balance sheet structure and the improved
liquidity situation.
Financial stability targets
TUI is aiming for an improved credit rating to finance the
further development of the company. With the temporary grounding of
the Boeing 737 MAX aircraft type and subsequently due to the
effects of the COVID-19 pandemic, the rating was downgraded from BB
and Ba territory to CCC+ and Caa1 in 2020. In the 2022 financial
year, TUI was upgraded to B territory again by both rating
agencies. The improvements in key operating figures associated with
the easing of the COVID-19 pandemic, the structural improvement in
key debt figures, in particular as a result of the capital increase
in April 2023, and the early extension of the syndicated credit
facilities led to an improvement in the rating to B (Standard &
Poor's) and B2 (Moody's) in the 2023 financial year, each with a
positive outlook. We are aiming to further improve our ratings in
order to minimise our borrowing costs and stabilise our access to
the debt capital markets. We achieved our financial stability
target of a gross leverage ratio of below 3.0x in the 2023
financial year with a ratio of 2.6x.
From financial year 2024 onwards, we define the net-leverage
ratio along the following basic lines:
Net Leverage Ratio
EUR million 2023 2022
Financial liabilities 1,297.0 2,051.3
plus Lease liabilities 2,918.1 3,207.5
less Cash and cash equivalents 2,060.3 1,736.9
less Other current financial assets 48.6 85.8
Net Debt 2,106.2 3,436.1
EBITDA (underlying) 1,775.3 1,224.6
Net Leverage Ratio 1.2 2.8
Due to lower net debt and the improvement in our EBITDA
(underlying) , our net-leverage ratio improved to 1.2x in the
financial year 2023 (previous year: 2.8x). We are aiming for a
net-leverage ratio of strongly less than 1.0x in the medium
term.
See section Capital management, page 272.
Interest and financing environment
In financial year 2023, short-term interest rates for the key
currencies have steadily risen, from low single digit percentage
rates at the start of the period rising to medium single digit
percentage rates towards the end of the period, as central banks
raised rates to tackle rising inflation. Inflation has now started
to ease in the key currency areas. Interest rates are expected to
be at, or close to, their peak, and no further significant interest
rate increases by central banks are expected in the upcoming
months. With the increase in short-term interest rates, both the
income from money market investments and the reference interest
rates for floating-rate debt have risen accordingly.
In the financial year under review, quoted credit margins (based
on CDS levels) for corporates on sub-investment grades fell again,
but remain at a level above the long-term average. Credit margins
for TUI AG declined again in the course of the financial year under
review but are still elevated. Due to the persistently difficult
market environment in 2023, refinancing was not possible at
acceptable terms and conditions.
Liquidity analysis
At the balance sheet date, TUI AG, the parent company of TUI
Group, held cash and cash equivalents worth EUR 0.3 m.
Restrictions on the transfer of liquid funds
At the balance sheet date, there were restrictions worth around
EUR 0.8 bn (previous year EUR 0.5 bn) on the transfer of liquid
funds within the Group that might significantly impact the Group's
liquidity, such as restrictions on capital movements and
restrictions due to credit agreements concluded.
Change of control
Significant agreements taking effect in the event of a change of
control due to a takeover bid are outlined in the chapter on
Information required under takeover law.
See chapter Information required under takeover law, page
107.
Cash flow statement
Summary cash flow statement
EUR million 2023 2022
Net cash inflow from operating activities + 1,637.3 + 2,077.8
Net cash outflow from investing activities - 492.2 - 308.2
Net cash outflow from financing activities - 834.6 - 1,630.9
Change in cash and cash equivalents with cash effects + 310.5 + 138.6
The cash flow statement shows the flow of cash and cash
equivalents on the basis of a separate presentation of cash inflows
and outflows from operating, investing and financing activities.
The effects of changes in the group of consolidated companies and
of foreign currency translation are eliminated.
In the period under review, cash and cash equivalents increased
by EUR 323.6 m to EUR 2,060.5 m.
Cash inflow from operating activities
In financial year 2023, the cash inflow from operating
activities totalled EUR 1,637.3 m (previous year cash inflow of EUR
2,077.8 m). This amount includes interest payments received of EUR
54.9 m (previous year EUR 12.4 m) and dividends of EUR 24.1 m
(previous year EUR 0.2 m). Income tax payments resulted in a cash
outflow of EUR 106.9 m (previous year EUR 131.4 m).
Cash outflow from investing activities
In financial year 2023, the cash outflow from investing
activities totalled EUR 492.2 m (previous year cash outflow of EUR
308.2 m). This amount includes a cash outflow for capital
expenditure related to property, plant and equipment and intangible
assets of EUR 666.2 m (previous year 515.7 m). The Group recorded a
cash inflow of EUR 142.9 m from the sale of property, plant and
equipment and intangible assets (previous year EUR 180.7 m). TUI
recorded a cash inflow of EUR 70.7 m from the earn-out payment in
connection with sale of the stakes in RIU Hotels S. A. and EUR 3.0
m from the sale of Karisma Hotels Caribbean S.A., effected in
financial year 2021. The TUI Group contributed EUR 73.5 m to the
capital increase of Pep Toni Hotels and EUR 9.9 m to the capital
increase of the TUI Global Hospitality Fund. A cash inflow of EUR
2.1 m resulted from the sale of money market funds, EUR 0.7 m was
spent on the purchase.
Cash outflow from financing activities
The cash outflow from financing activities totalled EUR 834.6 m
(previous year outflow of EUR 1,630.9 m).
Change in cash and cash equivalents
EUR million 2023 2022
Cash and cash equivalents at the beginning of period + 1,736.9 + 1,586.1
Changes due to changes in exchange rates + 13.1 + 12.2
Cash changes + 310.5 + 138.6
Cash and cash equivalents at the end of period + 2,060.5 + 1,736.9
Cash and cash equivalents comprise all liquid assets, i.e. cash
in hand, bank balances and cheques.
The detailed cash flow statement and additional explanations are
provided in the consolidated financial statements and in the
section Notes to the cash flow statement.
See page 186 and 274.
Analysis of investments
The development of fixed assets, including property, plant and
equipment, intangible assets, shareholdings and other financial
investments, is presented in the section on Net assets in the
Management Report. Additional explanatory information is provided
in the Notes to the consolidated financial statements.
Net capex and investments
EUR million 2023 2022 Var. %
adjusted
Cash gross capex
Hotels & Resorts 220.5 197.2 + 11.8
Cruises 82.9 45.5 + 82.2
TUI Musement 26.4 25.5 + 3.5
Holiday Experiences 329.9 268.2 + 23.0
Northern Region 30.2 26.2 + 15.3
Central Region 15.1 13.5 + 11.9
Western Region 24.1 7.5 + 221.3
Markets & Airlines* 100.6 115.5 - 12.9
All other segments 147.5 102.3 + 44.2
TUI Group 577.9 486.0 + 18.9
Net pre delivery payments on aircraft 51.8 - 126.5 n. a.
Financial investments 83.2 0.9 n. a.
Divestments - 219.2 - 44.4 - 393.4
Net capex and investments 493.7 315.9 + 56.3
* Including gross capex of EUR 31.2 m for financial year 2023
(previous year EUR 68.3 m) for the aircraft leasing companies which
- unlike income statement items - are allocated to Markets &
Airlines as a whole, but not to the individual segments Northern
Region, Central Region and Western Region.
In the financial year under review, TUI Group's gross capital
expenditure on property, plant and equipment amounted to EUR 577.9
m, up 18.9 % year-on-year. This year-on-year increase was driven by
the normalisation and expansion of our business activities after
the pandemic subsided, which led to higher capital expenditure, in
particular in Hotels & Resorts and IT. The significant increase
in capex in the Cruises segment was attributable to the
refurbishment of the Mein Schiff Herz before the vessel was
commissioned for the UK market by Marella Cruises. Net property,
plant and equipment and investments amounted to EUR 493.7 m in the
period under review, an increase of 56.3 % year-on-year.
Investments include a contribution to the share capital of Pep Toni
S. A., founded with the Riu family at the end of the financial year
under review as a company that will own and operate hotels.
Divestments include an inflow of around EUR 71 m from the sale of
the shares in RIU Hotels S. A. in financial year 2021 and an inflow
from the sale of the stake in the non-consolidated investment
Peakwork AG, divested in Q3 2023. In the prior year, divestments
related in particular to the sale of the stake in Nordotel S. A.,
fully consolidated in the Hotels & Resorts segment, to Grupotel
S. A., a joint venture of TUI Group. They also comprised a
subsequent reduction in the selling price for the divestment of RIU
Hotels S. A.
The table below shows a reconciliation of capital expenditure to
additions to TUI Group's other intangible assets and property,
plant and equipment.
Reconciliation of capital expenditure
EUR million 2023 2022
Cash gross capex 577.9 486.0
Additions right-of-use assets 7.7 12.3
Advance payments 88.4 29.7
Other non-cash changes - 9.7 66.9
Additions to other intangible assets and property, plant and equipment 664.2 594.9
Investment obligations
Order commitments
Due to agreements concluded in financial year 2023 or in prior
years, order commitments for investments totalled EUR 2,172.5 m as
at the balance sheet date. This total included an amount of EUR
1,070.9 m for scheduled investments in financial year 2024.
More detailed information is provided in the section Other
financial commitments in the Notes to the consolidated financial
statements.
Net debt
The net debt as of 30 September 2023 declined by EUR 1,330.0 m
year-on-year to EUR 2,106.2 m.
Net debt
EUR million 30 Sep 2023 30 Sep 2022 Var. %
Financial debt 1,297.0 2,051.3 - 36.8
Lease liabilities 2,918.1 3,207.5 - 9.0
Cash and cash equivalents 2,060.3 1,736.9 + 18.6
Short-term interest-bearing investments 48.6 85.8 - 43.3
Net debt 2,106.2 3,436.2 - 38.7
Non-financial Group Declaration of TUI Group*
Page 81 About this Non-Financial Group Declaration
Page 81 Governance and sustainability management
Page 81 TUI Sustainability Agenda
Page 81 People - Empowering to drive development
Page 81 Planet - Reduce our footprint
Page 81 Progress - Accelerate the transformation
Page 81 Our people
Page 81 Customer experience, security & safety and crisis
management
Page 81 Anti-corruption and anti-bribery
Page 81 Disclosures under the EU Taxonomy Regulation (EU) 2020 /
852 * Unaudited About this Non-Financial Group Declaration
For TUI Group, sustainability covering all three areas of
economic, environmental and social sustainability is a fundamental
management principle. We firmly believe that sustainable
development is critical to long-term economic success.
In the sections below, TUI AG presents a Non-Financial Group
Declaration for TUI Group that combines aspects and reporting on
the following key issues: environmental matters, employee matters,
social matters, respecting human rights, and information on
integrity and compliance. Pursuant to section 315b para. 1 sentence
3 of the German Commercial Code (HGB), we also refer, in a number
of respects, to non-financial disclosures found in other parts of
the Group Management Report. In addition to the Group's fully
consolidated subsidiaries, this non-financial statement also
includes companies recognised at equity, in particular in the TUI
Hotels & Resorts sector and TUI Cruises.
A materiality assessment performed in the financial year under
review generated insights into the risks and opportunities relating
to sustainability. The ESG-related positions and views derived from
a survey among internal experts were consolidated into a list of
key topics. The findings did not give rise to any substantial
changes in our reporting approach for the Non-Financial Group
Declaration.
We identified the following aspects scoring highest in the
Environment, Social and Governance categories:
-- Environment: emissions, creation of sustainable holiday
products, energy sources and efficiency,sustainable procurement,
destination development, waste and circularity
-- Social: human rights, diversity, equality and inclusion,
talent acquisition, fair pay, occupationalhealth and safety,
positive employee experience
-- Governance: supply chain management, fair business
relationships and integrity, corporate citizenship,crisis
management, business continuity
Nevertheless, in developing our TUI Sustainability Agenda, we
also include topics with lower materiality scores, so as, for
instance, to reflect the future relevance of specific topics such
as biodiversity management.
We describe our risk management system and the principal risks
associated with our business activities, our business relationships
and services as well as the principal sustainability risks in our
Risk Report from page 35. Following a climate risk analysis carried
out across the Group, our risk reporting was expanded to include
more detailed information on the impact of climate change on
TUI.
Applied standards and sustainability indices
Our reporting reflects the principles of the UN Global Compact,
which TUI signed up to in 2014. Our sustainability activities are
also aligned with the UN Sustainable Development Goals (SDGs).
In 2023, TUI participated in the CDP Climate Change Programme
and in the S&P Dow Jones Sustainability Index Assessment and
engaged in dialogue with other ESG researchers. For the first time,
TUI AG's rating was upgraded to 'Prime Investment' by ISS ESG.
Specific CO2 emissions of our airlines as a key non-financial
performance indicator
We regard specific CO2 emissions (in g CO2 / rpk) of our
aircraft fleet as a key non-financial performance indicator.
See page 86.
Disclosures pursuant to EU Taxonomy Regulation (2020 / 852)
This Group Declaration includes disclosures on whether and to
what extent TUI Group's operations include economic activities to
be classified as Taxonomy-eligible or Taxonomie-aligned under the
EU Taxonomy Regulation (2020 / 852).
Limited Assurance Engagement Attestation
The present Non-Financial Group Declaration was not included in
the audit of the annual financial statements. It was subject to a
limited assurance engagement in accordance with ISAE 3000
(revised).
See page 295.
Task Force on Climate-related Financial Disclosures (TCFD)
As a company listed in the Premium Segment of the Main Market of
the London Stock Exchange, we are required pursuant to Listing Rule
LR 9.8.6 to make disclosures in relation to the recommendations of
the Financial Stability Board's Task Force on Climate-related
Financial Disclosures (TCFD).
The section from page 134 summarises the extent to which TUI
Group complies with the TCFD's recommendations. These disclosures
are not part of this Non-Financial Group Declaration.
Governance and sustainability management
For TUI Group, sustainability is a fundamental management
principle and a cornerstone of our strategy for continually
enhancing the value of our Company. Global responsibility for
economic, environmental and social sustainability is at the core of
our corporate culture.
Disclosures on the business model
TUI Group is an integrated tourism group operating globally. TUI
Group's business model is outlined in detail from pages 24 and 28
onwards in this Annual Report in accordance with section 315c para.
1 in conjunction with section 289c para. 1 HGB.
TUI Group has a governance structure in place that ensures that
sustainability issues, along with climate-related risks and
opportunities, are assessed and actioned at all levels. The Group
Executive Committee (GEC) manages TUI's business strategically, it
sets the Group's strategic direction and long-term objectives for
sustainable development and signed off the Group's Sustainability
Agenda, published in February 2023. It defines the global framework
for TUI's sustainability activities.
A team of experienced sustainability professionals are working
in close collaboration with management to ensure that TUI's
business and sustainability activities areas are closely aligned.
The Group Sustainability Director heads up the Group Sustainability
team, and reports to the Chief Sustainability Officer (CSO) who
sits on the GEC.
The role of our sustainability team is to drive implementation
of the Sustainability Agenda across TUI Group and along its supply
chain. The GEC is regularly updated on our performance in
delivering the Sustainability Agenda and tackling other key
sustainability issues. Regular meetings are also held with the Risk
Oversight Committee (ROC) to review sustainability risks. TUI
Sustainability Agenda
TUI Group's Sustainability Agenda, developed in the past few
reporting periods by TUI's international sustainability team, was
published in February 2023. New priorities and strategic directions
for TUI's global sustainability activities were drawn up in
consultation with internal and external stakeholders, taking
account of current challenges, global scenarios and mechanisms such
as the EU Green Deal.
We engaged in direct dialogue with our stakeholders and
participated in industry initiatives to discuss expectations as
well as existing and future challenges in relation to
sustainability issues, and these have been incorporated into our
sustainability activities. The Supervisory Board, Executive Board,
Group Executive Board and employee representatives were regularly
involved in the development of the Agenda by means of individual
and group presentations. We also discussed specific topics with
associations and interested stakeholders. We have continued to
foster this dialogue since publishing our Agenda in order to ensure
that we focus on the most important issues and adopt relevant
future topics at an early stage.
Our Sustainability Agenda builds on tourism as a force for good.
Together with our partners we continue to promote the positive
effects of tourism on local communities, reduce our ecological
footprint and create more sustainable holiday products for our
guests.
Our mission
"We are mindful of the importance of travel and tourism for many
countries in the world and for the people living there. We partner
with these countries and other stakeholders to actively shape a
more sustainable future for tourism."
TUI's ambition is to actively shape a more sustainable future
for tourism in all three dimensions of sustainability - social,
environmental and economic. We use our scale and influence for the
sustainable transformation of the tourism industry. We understand
sustainable transformation as an opportunity.
Our Agenda is founded on three priorities: We aim to empower
people in the destinations and TUI employees to drive the
sustainable transformation actively (People). We aim to reduce
TUI's ecological footprint (Planet). We aim to partner with others
to launch initiatives for the sustainable transformation of our
sector (Progress). Our three P's - People, Planet and Progress -
are supported by 15 focus areas with key goals, objectives and
initiatives. Our Sustainability Agenda seeks to address the major
challenges we will face in the coming decades, in particular
climate change. For more details on the three P's, please refer to
the table below.
Our targets include achieving net-zero emissions across our own
operations and in the supply chain by 2050 at the latest, setting
near-term science-based targets for emission reduction, becoming a
circular business and enabling around 20 million customers a year
to make sustainable holiday choices (from 2030).
Our Sustainability Agenda supports the United Nations'
Sustainable Development Goals (SDGs) 17 global goals to fight
inequality, end poverty and protect our planet by 2030 - and
defines appropriate measures to contribute to their achievement.
The tourism value chain is closely linked with many different
sectors. This enables us to influence progress on many SDGs, with a
particular focus on 13 of these goals.
People - Empowering to drive development
In many parts of the world, tourism is one of the key driving
forces for development and prosperity. It creates employment,
provides education and drives social and environmental standards.
We aim to ensure that local people and communities benefit from
tourism and local supply chains. Our employees are empowered to
play a crucial role in this because we offer the skills and
knowledge they need for a sustainable transformation of the tourism
industry.
Contribution to the SDGs
TUI Sustainability Academy and training programmes
We seek to provide our colleagues with the knowledge and skills
required to become sustainability changemakers. One of our tools is
the digital TUI Sustainability Academy learning platform. It offers
insights into a wide range of sustainability topics, from energy
and fuels to social impacts and the circular economy. The launch of
TUI's Sustainability Agenda includes training sessions designed to
familiarise our employees with the core content of the strategy so
that they can apply it more easily to their respective areas of
work. Some elements of the training courses are adapted to a
specific business area and market, enhancing the relevance and
integration. By 2025 we hope to deliver our employees 25,000 hours
of training a year on sustainability issues. We intend to start our
reporting in FY24.
German Supply Chain Due Diligence Act
Protecting human rights and environmental standards across
supply chains is the focus of the new German Supply Chain Due
Diligence Act (GSCA), which entered into force on 1 January 2023.
For TUI, it applies to our own business, TUI suppliers and the
wider supply chain, both in Germany and worldwide. An internal GSCA
Steering Group has been established to manage the introduction and
integration of the Act within the Company. In the financial year
under review, the focus was on the development and implementation
of risk analyses, training programmes, preventative and corrective
measures and the adjustment and updating of policies and reporting
processes. These activities build on the work already delivered by
TUI to protect human rights and the environment and support
preparations for the EU Due Diligence Directive.
More detailed information on TUI's Human Rights Policy Statement
at https://www.tuigroup.com/damfiles/default/
tuigroup-15/en/sustainability/msa/msa-download-statements/
TUI-Human-Rights-Policy-Statement-and-Framework_final.pdf-8d907708399b58b9232f73cf5224d1e0.pdf
or https://
www.tuigroup.com/damfiles/default/tuigroup-15/en/sustainability/msa/msa-download-statements/
Policy-Statement_Human-Rights-Framework_TUI-Deutschland-GmbH_EN_signed.pdf-a123f16e1f2b3eedd31ded408f4d0d45.pdf
Respecting human rights
In accordance with applicable laws, conventions and regulations,
TUI Group commits to respecting all internationally proclaimed
human rights as specified in the International Bill of Human Rights
and expects its suppliers and business partners to do so, too. We
have a number of policies and initiatives in place to monitor,
identify, mitigate and prevent human rights impacts in line with
the UN Guiding Principles on Business and Human Rights, and will
take remedial action where necessary.
-- TUI signed up to the UN Global Compact in 2014. TUI Group has
thus committed to aligning its activities to principles in the
fields of human rights, labour standards, environmental protection
and anti-corruption.
-- TUI signed the UN World Tourism Organisation (UNWTO)'s Global
Code of Ethics in 2012.
-- Our Global Employment Statement focusses on fair and
respectful dealings with employees at all levels andcompliance with
applicable law and industry standards.
-- Our Employee Code of Conduct, the Integrity Passport, commits
us to respect and observe human rights.Colleagues are encouraged to
report any wrongdoing via the Speak Up Line.
-- Our Supplier Code of Conduct sets out the minimum standards
we expect from our suppliers, covering humanrights and labour laws,
anti-bribery and anti-corruption, environmental impacts and support
for local communities.
-- We expect our hotel partners to implement sustainability
certifications recognised by the GlobalSustainable Tourism Council
(GSTC)* comprising standards for human rights, child protection and
social welfare. Wealso apply the GSTC Criteria to our experiences
programme. In FY22 we started certifications of the TUI
Collectionportfolio and extended this process in FY23 to further
excursion programmes we offer.
-- Our in-house child protection policies include information
for our colleagues on 'voluntourism'.
-- Our Human Rights Policy Statement, published on TUI's
website, sets out our activities and measuresimplemented in our
business operations and our supply chain to prevent human rights
violations.
-- We continue to provide e-learning modules on human rights and
child protection, which we regularly updateto reflect changes in
framework parameters. Airline crews in the UK, Nordics and Germany
receive Vulnerable Children and Human Trafficking training
programmes as part of their induction so that they can spot
humantrafficking and take action. All staff working for TUI
Musement have to complete the Human Rights and ChildProtection
modules every two years. A global training programme for TUI
employees was being rolled out in theperiod under review.
* TUI requirement for hotel partners with more than 80 rooms and
TUI occupancy rate > 10 %.
Supporting the TUI Care Foundation
One of our initiatives aimed at making a difference in the
destinations is the foundation set up by our Group, which draws on
tourism as a force for good to improve the lives of young people,
preserve the natural environment and support local communities in
their development.
With over 40 projects in 25 countries, the TUI Care Foundation
focuses on the special needs of individual destinations, supported
by TUI's customers. The foundation carries out projects in the
fields of education, community empowerment, natural landscapes and
marine conservation. Examples include projects for marine
conservation in Bali, vocational training at the TUI Academy for
disadvantaged young people in Cape Verde, campaigning against
plastic waste in Cyprus and Zanzibar, and support for local
communities in transitioning to sustainable, regenerative
agriculture.
In June 2023, the government of Cape Verde, TUI Group and the
TUI Care Foundation signed a Memorandum of Understanding entitled
'Tourism for Development' as a basis for cooperation between the
parties in promoting the sustainable development of tourism in the
Cape Verde islands. The focus is on strengthening local supply
chains, expanding educational programmes about the environment and
sustainable tourism, and promoting renewable energies.
For more information on the TUI Care Foundation, please refer to
www.tuicarefoundation.com
Planet - Reduce our footprint
Contribution to the SDGs
We are working to reduce the ecological footprint of travel and
increase environmental performance in our industry. We aim to
achieve net-zero emissions in our operations and along our supply
chain by 2050 and considerably reduce our environmental impact in
the fields of water, energy and waste. We are also reporting the
first strategic and operational steps taken in this context. In
order to protect our planet, we are planning to change how we use
natural resources and to become a circular business.
Voluntary climate commitments
Climate change is a pressing global challenge. For 30 years, we
have been committed to reducing our environmental impacts. We are
linking these activities closely to science-based findings.
We have therefore joined the Science Based Targets initiative
(SBTi), committing to implement emission reductions on the basis of
the latest findings in climate science. The SBTi is a global
initiative enabling businesses to set ambitious emission reduction
targets in line with the Paris Agreement goals to fight the effects
of global climate change. The SBTi is a joint initiative of the
Carbon Disclosure Project (CDP), the United Nations' Global
Compact, the World Resources Institute (WRI) and the World Wide
Fund for Nature (WWF).
In accordance with the SBTi methods, emissions from TUI Group's
airline, cruises and hotels account for 99 % of our emissions.
Roadmaps for a significant reduction in emissions have been drawn
up for each of our three business areas.
The emission reduction targets for our own aircraft, cruise
ships and hotels to be achieved by 2030 were submitted to the SBTi
for final review and were officially recognised and validated by
the SBTi. Intensity and absolute targets have been submitted:
-- Reduction of CO2e-Emissions per Revenue Passenger Kilometer
from TUI Airline - 24 % by 20301
-- Reduction of absolute CO2e-Emissions from TUI's cruise
business - 27.5 % by 20301
-- Reduction of absolute CO2e-Emissions from TUI
Hotels&Resorts (owned) - 46.2 % by 20302
1 Base year 2019. Target level: well below 2°C. CO2e = CO2
equivalents. In addition to carbon dioxide (CO2), these take into
account the other five climate-impacting greenhouse gases according
to the Kyoto Protocol: Methane (CH4), nitrous oxide (N2O),
hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur
hexafluoride (SF6). TUI Group's commitments to achieve
science-based targets also include well-to-wake emissions for our
aviation and cruise activities (emissions from aviation and marine
fuels, Scope 1 and Scope 3, Category 3).
2 Base year 2019. target level: 1.5°C. For our hotels, the SBTi
commitment includes emissions from all energy sources plus gases
from refrigerants (Scope 1 and 2). Airline, cruise and hotel GHG
emissions figures published in the FY23 Non-Financial Group
Declaration do not match the scope, boundaries or reporting
methodology of our science-based targets. Therefore inferences of
progress towards achieving SBTs based on figures in this or
previous Non-Financial Group Declarations should not be made.
Activities at our business locations
We are committed to reducing the environmental impact of our
administrative buildings. The TUI Campus in Hanover will be
supplied with electricity generated by a photovoltaic system. The
array und construction in FY23, which will occupy 7,350 m2 and have
a maximum output of 1.6 megawatts , is a significant step towards
reducing emissions on site. In addition, 40 e-charging stations
were under construction in the financial year under review in order
to promote sustainable mobility.
Our current footprint
In financial year 2023, TUI Group's total absolute emissions
were largely stable year-on-year at an increase of 1 %. In
aviation, emission reductions were due to the sale of the stake in
Sunwing in March 2023. We did not adjust the FY22 data. In Cruises,
the increase was driven by the continued recovery of business after
the COVID-19 pandemic and the inclusion of our river cruises
segment in reporting. Scope 3 emissions reflect the expansion of
the reporting framework, in particular due to the inclusion of WTT
(well-to-tank) emissions from marine cruise fuel and jet fuel.
Carbon dioxide emissions (CO2)
tons 2023 2022 Var. %
Airlines 4,218,553 4,331,628 - 2.6
Cruises 899,790 762,942 + 17.9
Hotels 805,541 767,049 1 + 5.0
Major premises / shops 14,890 14,251 + 4.5
Ground transport 14,413 13,144 + 9.7
Scope 3 (indirect emissions from TUI's value chain)3 1,239,493 1,232,804 2 + 0.5
Total 7,192,680 7,121,818 + 1.0
1 Previous year adjusted due to inclusion of refrigerant
gases
2 Previous year adjusted due to extended reporting scope
3 With reference to the Greenhouse Gas Protocol, TUI Group
currently includes Scope 3 emissions from the production of office
paper and printed brochures, well-to-tank emissions from fuel
consumption of aircraft, ships, hotels and ground transport, the
distribution of electricity (hotels), waste and water treatment
(hotels), employee business travel with third-party airlines and
rail, and employee commuting. The current scope of the reported
Scope 3 emissions therefore does not yet fulfil all the
requirements of the Corporate Value Chain (Scope 3) Accounting and
Reporting Standard.
Energy usage by business area
MWh 2023 2022 Var. %
Airlines 17,202,638 17,655,179 - 2.6
Cruises 3,507,396 2,962,423 + 18.4
Hotels 1,762,992 1,599,057 + 10.3
Major premises / shops 59,651 60,036 - 0.6
Ground transport 61,087 55,311 + 10.4
Total 22,593,764 22,332,006 + 1.2
More efficient flying
We already operate one of Europe's most carbon-efficient
airlines and aim to continually enhance our environmental
performance. Our airline emissions reduction targets by 2030 have
been validated by the SBTi. Our emission reduction roadmap for our
aircraft fleet comprises the following measures: additional capex
on modern carbon-efficient aircraft, efficiency enhancement through
operational measures and investments in sustainable aircraft fuels
(SAF).
In order to reduce emissions, TUI Group has invested in
state-of-the-art aircraft such as Boeing 787s and Boeing 737 Max
aircraft. On average, these planes are 20 % (787) and 16 % (737
MAX) more fuel-efficient than the aircraft they replace in TUI's
fleet.
Moreover, TUI fly Belgium added Embraer E195-E2 aircraft, highly
efficient planes in the category of up to 150 seats, to its fleet.
The aircraft will operate on short- and medium-haul routes and
reduce the carbon footprint by up to one third.
Environmental management systems and operational measures play a
key role in implementing sustainability and further enhancing TUI's
climate efficiency. In financial year 2023, all TUI airlines were
certified under the internationally recognised ISO 14001:2015
standard. All ISO 14001 management systems used by individual TUI
airlines were transferred to one single management system in the
period under review. The following examples illustrate the
operational measures implemented to enhance efficiency:
-- Flight operations, for instance single engine taxiing in and
out, wind uplinks and optimised climb speedsand profiles
-- Weight reduction, for instance carbon brakes and fly away kit
(spare parts and tools)
-- Fight planning optimisation, for instance alternate distance
and minimum fuel programme
-- Fuel management system to improve fuel analysis,
identification of further savings potential and trackingof
savings
Sustainable aviation fuels (SAF) play a crucial role in reducing
aviation emissions and are hence a key part of our emission
reduction roadmap to further improve airline carbon efficiency by
2030. TUI cooperates with a number of partners to secure supplies
of SAF. Examples include the signing of a Memorandum of
Understanding with the Spanish energy company CEPSA. The
partnership with CEPSA will focus on SAF fuels generated from raw
materials such as used cooking oils, non-food animal waste and
biodegradable waste from various industries. This will make it
possible to reduce aircraft emissions by up to 80 % compared to
conventional jet fuel. An additional Memorandum of Understanding
was signed with Shell.
In 2023, relative carbon emissions across our airlines decreased
by 3.9 %. This improvement was largely due to higher load factors
versus 2022 and our ongoing re-fleeting programme to replace older
aircraft by new, more carbon-efficient aircraft.
Specific emissions are additionally shown in the form of CO2
equivalents (CO2e). Apart from carbon dioxide (CO2), these include
the other five greenhouse gases impacting the climate as listed in
the Kyoto Protocol: methane (CH4), nitrous oxide (N2O),
hydro-fluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur
hexafluoride (SF6).
TUI Airlines - Fuel consumption and CO2 emissions
2023 2022 Var. %
Specific fuel consumption l / 100 rpk* 2.43 2.52 - 3.9
Carbon dioxide (CO2) - total t 4,218,553 4,053,745 + 4.1
Carbon dioxide (CO2) - specific kg / 100 rpk* 6.11 6.36 - 3.9
* rpk=revenue passenger kilometer
TUI Airlines - Carbon intensity
g CO2 / rpk* 2023 2022 Var. % g CO2e / rpk*
TUI Airline fleet 61.1 63.6 - 3.9 61.7
TUI Airways 60.7 62.2 - 2.5 61.3
TUI fly Belgium 66.3 70.7 - 6.3 66.9
TUI fly Germany 60 64.4 - 6.8 60.5
TUI fly Netherlands 59.6 59.8 - 0.2 60.2
TUI fly Nordic 59.8 66.4 - 9.9 60.4
* rpk=Revenue Passenger Kilometre
We commissioned Verifavia to provide assurance on the carbon
intensity metrics for financial year 2023 as shown in the above
table 'TUI Airlines - CO2 intensity'. The airline carbon data
methodology document and the full assurance report are available at
www.tuigroup.com/en-en/responsibility/sustainability/reporting-downloads
More sustainable cruising
We continue to focus on reducing the emissions of our cruise
ships, delivering progress by investing in state-of-the-art
technology to reduce air emissions and in operational efficiency.
Emission reduction roadmaps were drawn up for TUI Cruises,
Hapag-Lloyd Cruises and Marella Cruises as part of our submission
of 2030 targets for validation by the SBTi. Key levers include
investments in fleet modernisation and efficiency enhancement with
a focus on shore power, route optimisation, energy efficiency
enhancement and switching to alternative fuels.
TUI Cruises with its Mein Schiff and Hapag-Lloyd Cruises brands
continues to operate a modern and technologically advanced fleet.
The newbuilds in the fleet are equipped with state-of-the-art
technologies to minimise fuel consumption. A smart energy
management system, efficient air conditioning, innovative lighting
controls and the use of exhaust heat from the engines contribute to
a significant reduction in the carbon footprint compared with
vessels not equipped with those technologies.
In the period under review, essential steps were taken to reduce
emissions generated by the Mein Schiff and Hapag-Lloyd Cruises
fleet. The Company will successively install the equipment required
for shore power connection on all ships of the Mein Schiff fleet.
In the period under review, Mein Schiff 1 was retrofitted during
her scheduled dock period. Mein Schiff 2 and Mein Schiff 5 will
follow in November 2023 and in January 2024.
In summer 2023, both fleets successfully used shore power, e. g.
in Kiel and Hamburg. During their scheduled dock periods, both
ships, Mein Schiff 1 (in FY 2023) and Mein Schiff 6 (in FY 2022),
obtained a new silicone coating to reduce resistance in the water
so as to save fuel during the voyage.
In the period under review, the Company also successfully
completed the first tests on the use of sustainable biofuels, with
both Hanseatic Inspiration and Mein Schiff 4 successfully operating
on biofuel blends on some voyages. The second-generation biofuel,
which was bunkered for the first time, is purely plant-based and
mainly consists of cooking oil residues. This fuel is virtually
free from sulphur oxides and in its pure form offers a CO2
reduction of up to 90 % compared to fossil fuels.
Thanks to new exhaust gas treatment systems operated on all new
vessels, the newbuilds in the Mein Schiff fleet also significantly
reduce their sulphur and nitrogen emissions. Use of these advanced
emission purification systems goes beyond regulatory requirements.
They are, for instance, not only used in the designated emission
control areas in the North and Baltic Seas, the English Channel and
North America, but also in other regions sailed by Mein Schiff such
as the Mediterranean, the Orient, the Caribbean and Central
America.
The Mein Schiff fleet is also setting another milestone for
sustainable growth. Mein Schiff 7 is currently under construction
in the Meyer Turku shipyard in Finland. The focus is on compliance
with high maritime environmental standards by optimising the design
in terms of energy efficiency and the use of modern technologies to
improve sustainability. The ship will feature equipment enabling
her to run on green methanol in future. She is scheduled for
commissioning in 2024.
The expedition ships in the Hapag-Lloyd Cruises fleet
exclusively use low-sulphur marine gas oil with a sulphur content
of 0.1 %. This reduces sulphur emissions from these vessels by up
to 80 % and particulate and soot emissions by up to 30 % versus the
use of heavy fuel oil. All Hapag-Lloyd Cruises ships have
tributyltin-free underwater coatings, on-board seawater
desalination systems to make drinking water and biological sewage
treatment systems for wastewater. Waste is separated on board prior
to disposal on land by specialised companies in accordance with
international regulations (MARPOL).
In financial year 2023, relative CO2 emissions in the Cruises
segment declined by around 24 %. This was due to a significant
increase in load factors, as the previous year's figures were more
strongly impacted by the effects of the pandemic. The amount of
waste per cruise passenger night decreased by around 23 % to 8
litres, with freshwater consumption up by around 24 % to 46 litres.
Our reporting covers all ships operating under the Mein Schiff,
Hapag-Lloyd Cruises. Marella and TUI River Cruises brands.
Cruises - Carbon intensity, fresh water and waste
2023 2022 Var. %
Carbon dioxide (CO2) - relative, kg / Cruise passenger night 101 132 - 23.7
Fresh water - relative, litre / Cruise passenger night 46 37 + 24.2
Total water - litre / Cruise passenger night 301 321 - 6.1
Waste - relative, litre / Cruise passenger night 8.2 10.6 - 22.9
Environmental protection in our hotels
Our hotels and hotel partners continue to focus on promoting the
sustainability transformation across their operations. Each hotel
plays an important role in managing the impacts on the local
community, the economy and the environment. Emission reductions
remain our key priority, and we have prepared comprehensive
roadmaps and defined targets for 2030 for our Hotels & Resorts
segment. These targets have been validated by the SBTi.
Our hotel portfolio is still growing and many of our hotels use
green technology in order to improve their sustainability
performance. The generation of renewable energies from solar and
wind power is a key element of the emission reduction roadmaps for
our hotels, alongside efficiency measures delivered through hotel
refurbishment and standard-setting for new buildings.
Sustainable construction is an important tool for saving energy
and cutting carbon emissions from hotels. In the financial year
under review, the Hotels & Resorts segment published Green
Building Guidelines for the first time. They provide specific
recommendations to our own hotels and to our hotel partners for
their construction and refurbishment projects. The Guidelines cover
the key factors for reducing the ecological footprint of
construction and refurbishment projects and paring back water and
energy consumption. They also cover aspects such as monitoring
systems, sustainability certifications and stakeholder
communication. The Guidelines were reviewed by external experts
from the Fraunhofer IAO Institute.
For more information on the topic, please refer to: TUI Green
Building Guidelines (online version): https://
mediacenter.tui-info.com/onlinekataloge/index.php?catalog=tui_greenbuildingguideline_gj2023_f#page_1
Our TUI Global Hotel Awards 2023 placed a particular emphasis on
sustainability. The award included categories reflecting TUI's
Sustainability Agenda. The winners in these categories are selected
by an external committee based on pre-defined criteria. In 2023,
TUI also granted an award for sustainability innovation. Atlantica
Hotels & Resorts was recognised for introducing new,
sustainable technologies. Examples of this commitment can be found
on the Greek island of Rhodes, where the hotel company has invested
in the latest solar panel technology, e-mobility for electric cars
and a water desalination plant.
We continued to drive forward the use of photovoltaic systems in
our hotels to promote sustainable power generation. In cooperation
with our joint venture partners RIU, Grupotel and Atlantica, 19 PV
systems with an output of almost 3,500 kWp were installed in
Greece, Spain and the Cape Verde Islands in financial year
2023.
Our hotels made further inroads towards a better ecological
footprint in terms of emissions, water consumption and waste
production. This is the result of continual measures to improve our
environmental performance alongside higher customer numbers and
occupancy levels as the pandemic subsided.
Hotels - Carbon intensity, fresh water and waste
2023 2022 Var. %
Carbon dioxide (CO2) - relative kg / guest night 12.4 13.8 1 - 9.8
Fresh water - litre / guest night 478 494 - 3.4
Water2 - relative litre / guest night 617 652 - 5.3
Waste - relative kg / guest night 1.7 1.9 - 7.5
1 Previous year adjusted due to inclusion of refrigerant
gases
2 Includes water for domestic, pool and irrigation purposes
Circular economy: Reduce, reuse, recycle
One of our core Planet targets is to work towards a circular
business model. The concept of a circular economy is about how we
generate, use and recycle products and services. The goal is to
keep resources and materials in the loop for as long as possible
and prevent waste from arising in the first place.
TUI has entered into Circular Economy Commitments focused on
changing the way we operate and use resources. These commitments
involve all areas of our business model. TUI cooperates with
suppliers in order to capture relevant information about their
sustainability performance so as to track and measure progress. As
part of our efforts to become a circular business, we joined the
Sustainable Transformation Group on Circular Economy, coordinated
by the Antwerp Management School and part of the Ellen MacArthur
Foundation community.
In the reporting period, for example, TUI's cruise companies
supported the circular economy and the careful and sustainable use
of resources. Examples include the refurbishment of the bar on
board Mein Schiff 6, where the focus was on sustainable design. The
tables are made of 100 % recycled plastic or of the natural
material cork, and the carpeting is certified according to the
Cradle-to-Cradle standard. Furniture no longer used is donated to
local aid organisations.
Circular processes were also taken into account for the TUI
Campus project, the redesigned corporate headquarters in Hanover:
sustainable carpet tiles will reduce future material consumption,
and much of the furniture has been kept to avoid purchasing new
items. Energy efficiency was an important factor in purchasing new
electrical equipment.
At TUI, we have worked hard for many years to reduce plastic
items in our business operations and identify alternatives. TUI
Group is part of the Global Tourism Plastic Initiative and has
signed up to the relevant commitments. The implementation of the
initiative is headed by the UN World Tourism Organisation (UNWTO)
and the United Nations' Environmental Programme (UNEP) in
cooperation with the Ellen MacArthur Foundation and is supported by
an advisory council of which TUI Group is a member. As part of
these efforts, we are committed to replacing all problematic and
unnecessary plastic packaging by 2025 wherever possible.
Protecting biodiversity
We support the Nature Positive Vision for Travel and Tourism
approach adopted by the World Travel & Tourism Council (WTTC),
promoting nature conservation in order to halt and reverse
biodiversity loss by 2030. We invest in the protection and
restoration of nature in the destinations. Apart from our existing
focus on animal welfare in our supply chain, we intend to place
further emphasis on biodiversity. To that end, we prepared a first
action plan in the period under review.
TUI audits its suppliers in accordance with animal welfare
guidelines. We continue to carry out our checks, which comply with
the latest version of the ABTA (Global Animal Welfare Guidance for
Animals in Tourism) guidelines. Wherever possible, we work with
suppliers to implement improvements. A number of tenders have,
however, been removed from our programme as they did not meet the
required standards.
Progress - Accelerate the transformation
Contribution to the SDGs
By leveraging our scale, we aim to increase the positive social
and environmental impact of the holiday experiences we offer. We
strive to be sustainability leaders in everything we do. Together
with our partners we will help shape the next-generation
sustainable business model for the tourism industry. In this way,
we can enable our customers to make sustainable holiday choices at
every stage of the customer journey. Our goal for 2030 is to have
20 million customers per year choosing a Green & Fair hotel or
excursion that meets the strict criteria of the Global Sustainable
Tourism Council.
Destination Co-Lab
TUI Group, the TUI Care Foundation and the government of the
Southern Aegean region have launched a project called Destination
Co-Lab Rhodes. Together with our partners are building the
next-generation sustainable business model for the tourism industry
in Rhodes.
The project has three strategic pillars: 'Regenerate the natural
environment', 'Strengthen social development and cultural heritage'
and 'Foster inclusive economic development in the tourism business
model'. The goal of the Co-Lab is to collaborate with the local
tourism industry and international partners in developing specific
solutions and implementing them in Rhodes. Examples include the
provision of 30 e-bikes and 20 cargo bikes for short journeys by
staff while looking after our customers. This cut the number of
cars used from over 100 to 60.
Sustainable rail travel
Following the positive experience gained in the Netherlands, TUI
increasingly offers rail travel to provide sustainable overnight
trips to the holiday destinations. As a first step, the TUI City
Express was launched for city connections to Prague in July 2023,
while the TUI Ski Express will connect the Netherlands and Germany
with the skiing regions in Austria from December 2023.
Promoting certification
TUI promotes social and environmental standards through
certification. We expect our hotels and hotel partners to obtain
sustainability certification from independent organisations.1 This
process involved a third-party assessment to certify that the hotel
complies with the criteria of the Global Sustainable Tourism
Council (GSTC) and hence engages in good social and environmental
practice. The GSTC criteria are the established global standard for
sustainable tourism and cover four main aspects: effective
sustainability planning, maximising social and economic benefits
for local communities, valuing cultural heritage, and reducing
negative impacts on the environment.
In financial year 2023, 10.5 m customers stayed in a contracted
hotel2 certified to a GSTC-recognised standard, compared with 7.9 m
in 2022. The number of certified contracted hotels3 rose by ca. 32
% year-on-year to 1,481. This increase was attributable to the fact
that many of our key hotel partners have obtained sustainability
certificates to honour their long-standing commitment.
Sustainability also plays a key role in our holiday experiences.
To assess sustainability, we were one of the first tourism
companies to start applying the GSTC criteria to individual tours
and activities within the TUI Collection experiences in financial
year 2022. In financial year 2022, 180 TUI Collection experiences
were certified according to these criteria. In financial year 2023,
the process was extended to other excursion categories such as
National Geographic or Shorex. By the end of the financial year, a
total of 1420 experiences had been certified in accordance with the
GSTC criteria. We offer these tours under the "Green & Fair"
label.
1 TUI requirement for hotel partners with hotels offering more
than 80 rooms and a TUI occupancy rate above 10 %.
2 Number of hotels includes TUI Hotels & Resorts and hotels
TUI Group has a contract with and that are certified to a Global
Sustainable Tourism Council (GSTC) recognised standard. Methodology
changes apply in FY 23 to align with TUI's FY.
3 Number includes hotels TUI Group has a contract with, that are
certified to a according to a GSTC-recognised standard and had a
minimum of 100 TUI guests in FY 2023. TUI Hotels & Resorts that
do not have a contract with TUI Group are excluded from this
figure.
Progress performance
2023 2022 Var. %
Number of customers (millions) staying at hotels with certifications1 10.5 7.9 + 33.0
Number of hotels with certifications2 1,481 1,126 + 31.5
% of TUI Hotels & Resorts with certifications (variance in % points) 75 61 + 14
Number of certified TUI Collection excursions3 1,420 180 + 688.9
1 Number of hotels includes TUI Hotels & Resorts and hotels
TUI Group has a contract with and that are certified to a Global
Sustainable Tourism Council (GSTC) recognised standard. Methodology
changes apply in FY 23 to align with TUI's FY.
2 Number includes hotels TUI Group has a contract with, that are
certified to a according to a GSTC-recognised standard and had a
minimum of 100 TUI guests in FY 2023. TUI Hotels & Resorts that
do not have a contract with TUI Group are excluded from this
figure.
3 Certification in accordance with GSTC, process of certifying
several excursion categories (e.g. TUI Collection, National
Geographic) was commenced in FY 2023.
Involving partners
We created TUIPartners.com to support our many partners (hotels;
tour, activity and transport providers) in their transformation
towards more sustainable tourism. It offers them information and
guidance on current issues such as sustainability, health and
workplace safety. The sustainability section of the platform serves
in particular to share knowledge, experience and information on
various matters, including successful sustainability
certification.
Green IT Award
In 2023, TUI launched new awards to recognise the sustainability
commitment of its more than 2,000 IT partners and suppliers. Three
award winners convinced the jury with innovative approaches to
carbon and energy savings and the promotion of global
sustainability goals through technological solutions. Technology is
an integral part of TUI's Sustainability Agenda.
More sustainable customer decisions
Our goal is to enable customers to make more sustainable holiday
choices. In addition to anchoring sustainability in our brand
essence and providing a marketing toolkit on sustainability for our
companies, we have created a label to identify more sustainable
products. The Green & Fair label provides guidance on the
booking website to make it easier for our customers to select and
book holidays certified to GSTC criteria.
Our people
Contribution to the SDGs
Our employees make a key contribution to TUI's success. We aim
to secure this success in the long run. In the financial year under
review, we focused on continuing our strategic initiatives as
defined in our People Strategy.
People Strategy
The world of work is continuing to undergo structural change. We
offer hybrid working models in order to give our employees and
future talents greater flexibility about where and when they work.
One example of our flexible, hybrid working models is the TUI
Campus, which opened in the financial year. Around 2,800 employees
from eight TUI companies have been working under one roof at the
Hanover site since the Campus was inaugurated. The offices have
been redesigned and co-working spaces have been created.
Moreover, employees increasingly attach importance to diversity,
a sense of belonging and greater wellbeing. TUI responds to these
expectations in order to acquire and retain talent in a highly
competitive labour market and provide a positive employee
experience.
Against this backdrop, we have developed our People Strategy.
Our vision is to be Digital, Engaging and Inclusive.
Digital: We use digital tools to ease the workload for our
employees, promote innovation and enhance efficiency.
Engaging: We invest in the development of employees and empower
our executives.
Inclusive: We acknowledge difference and bring global and local
teams together.
In order to implement our strategy, we have adopted a mission
defining our relevant areas of action. Our goal is to create a
framework that empowers our employees to deliver their best
performance and succeed as one team.
Simplification, harmonisation, focus
Our HR activities must be aligned to the principles of
simplification, harmonisation and focus. Processes are being
harmonised, standardised and transparently communicated across the
globe so as to create synergies and avoid duplication.
We have also realigned our internal HR structure to match that
principle. In addition to the existing HR Business Partner and HR
Services structures, local teams were pooled in four global Centres
of Expertise (CoEs) in the reporting period, established for the
fields of Reward, HR Systems & People Analytics, Talent
Acquisition and Talent Management & People Development. The
goal of combining expertise in the cross-national CoEs is to define
and implement global processes and establish a uniform and
standardised IT landscape.
Digital transformation
Our People Strategy centres on the harmonisation and
digitalisation of our HR systems. We are continually expanding our
digital HR solutions to facilitate data-based decision-making.
In the period under review, the implementation of our single HR
IT platform TUI People progressed further. This far, the platform
has been used to operate Recruiting, Learning, Talent Management,
Reward and master data administration. In the second quarter of the
reporting period, the HR core system was rolled out to the TUI
Musement segment. For Germany, the launch is scheduled for the
beginning of the new financial year.
We also continued to introduce new functions in TUI People and
to expand our desktop assistant, which offers our employees
real-time step-by-step instructions for handling system
functions.
Moreover, we rolled out the TUI eSafe to several companies in
Germany during financial year 2023. This is an electronic safe for
employees to which we send documents such as payroll slips, wage
tax statements, etc. in digital form. The current utilisation rate
of the TUI eSafe is around 91 %. Its successive global roll-out is
scheduled for the next few financial years.
So that we can measure our performance, we present relevant HR
metrics in dashboards and make them available to the operational
units. Areas monitored by us include the global use of TUI
WORKWIDE.
Enable growth
In order to retain our employees and recruit new people in a
challenging labour market, we have initiated a range of measures to
secure internal and external talent succession.
Our strategic focus includes succession planning and targeted
career development. To ensure TUI's ability to act at any time and
secure the availability of human resources for business-relevant
functions and key positions, succession planning and potential
analysis are carried out on a regular basis. They extend to all
members of TUI's Executive Board, all top management functions,
executives and business-critical roles. Succession planning takes
account of short-, medium- and long-term changes and plays an
essential role in the success of the Company. In addition,
succession planning reports are submitted to the Executive Board at
regular intervals.
In the completed financial year, we successfully introduced the
first Group-wide Employer Value Proposition (EVP). The EVP
describes TUI's identity as an employer and sums up its key
strengths and USPs. It offers us a research-based framework to
retain and win our current employees and future talents and has a
positive impact on perceptions of TUI in the labour market. This is
achieved via the employer branding measures based on our EVP, which
puts people first. Our EVP "Let's TUI it" was initially introduced
in-house to inform our employees about the relevance of the topic,
promote employee retention and encourage people to recommend TUI as
an employer. Subsequently, a number of initiatives were launched
drawing on photographs and video clips taken by employees to
provide authentic insights into working at TUI. We initiated an
Employer Brand Ambassador programme, which forms the framework for
all measures with which employees support TUI's employer branding.
More than 200 employees have volunteered to take part.
The campaign has created a high level of awareness in online
channels. In the first few weeks after the launch, we reached out
to an estimated 2.39 m people on LinkedIn. Our Employer Branding
campaign has been nominated for various international awards and
has already received a number of prizes in various countries.
As in the prior year, our career sites recorded nearly 1.5 m
visits in the period under review. The number of job applications
declined slightly from 295,000 to around 293,000.
Positive employee experience
We want to create an environment where people like to work. With
the launch of the TUI Way of Working, we created the key conditions
to achieve that goal. The TUI Way of Working is our joint vision
for the future of work at TUI and how to organise it globally and
adjust it to local needs. We are seeking to create a culture of
trust, offering flexibility for our employees. The core statement
of that vision is: work is what we live and do, not where we
go.
TUI WORKWIDE is an innovative programme enabling people to work
from abroad for up to 30 days per year. In the financial year under
review, around 1,260 employees participated in TUI WORKWIDE with an
average stay of 8 days.
We continued updating the new Employee Listening strategy. Our
goal is to listen to our employees regularly, measuring their
commitment and growing it in a sustained manner. The new TUIgether+
survey methods will facilitate a holistic approach to measuring and
enhancing the employee experience. We focus on three different
survey types, each tailored to the specific needs of different
groups of participants. Apart from global surveys relating to
engagement and other strategic topics, we also measure key moments
in each employee's life cycle and use business insight surveys to
obtain their feedback on certain topics such as transformation.
Based on the survey results, executives receive feedback on a
regular basis to help them plan measures at all levels.
At the end of August 2023, we rolled out our new TUIgether+
survey, again giving our employees the opportunity to provide
feedback to their employer. The goal of the employee survey is to
capture the sentiment within TUI Group and transform the survey
results into measures. The survey was open until the end of the
period under review. It will be evaluated from the beginning of the
new financial year.
Diversity, equity & inclusion
Our goal is to support and promote the wellbeing of our
employees. We want them to feel accepted and appreciated. This
includes welcoming and leveraging diversity.
In the period under review, we developed our vision "Come as you
are!", defined the focus areas "People & Culture", "Leadership"
and "Community" and agreed on specific measures to take.
People & Culture: Our goal is to recruit and promote the
best talents worldwide in order to have a diverse workforce.
Leadership: We create a work environment with trustworthy
executives, where our employees are appreciated and empowered to
deliver their top performance.
Community: We enter into global and external partnerships
enabling us to be perceived as a diverse and inclusive brand,
promoting diversity and inclusion beyond TUI.
We have forged additional external partnerships, like the one
with Code Girls First. This collaboration aims to enhance the
appeal of data science for female and diverse professionals. We
also promote the diversity of internal networks with different
interests, such as LGBTQI+ and Religion, within the framework of
Diversity, Equity & Inclusion.
Diversity-related content has been shared on TUI's Intranet, in
the TUI Learning Lounge and in our leadership programmes.
Throughout the year, we also took part in various key events and
special dates such as International Women's Day and Pride
Month.
In aviation our vision "Come as you are!" was the springboard
for a new Uniform Policy, allowing our employees more flexibility
in their choice of look and clothing.
With TUI's Global Employment Statement and as a signatory to the
UN Global Compact, we have made clear commitments: We do not accept
any discrimination based on nationality or ethnicity, sex, gender
identity, sexual orientation, marital status, religion, world view,
disability, age or social origin. Decisions about hiring, salary,
benefits, training opportunities, work assignments, advancement,
discipline and termination must be based solely on objective
grounds.
In financial year 2023 we monitored a number of
diversity-related indicators. The proportion of women in the
overall headcount matched the prior year's level at around 56 %.
The proportion of women in managerial functions increased
year-on-year by four percentage points. The proportion of women on
the Senior Leadership Team remained constant.
Proportion of women in managerial positions
in % 30 Sep 2023 30 Sep 2022 Target 2023
TUI AG
Supervisory Board 45 45 30
Executive Board 1 woman 1 woman at least
1 woman
First management level below Executive Board 14 21 25
Second management level below Executive Board 30 24 30
TUI Deutschland
Supervisory Board 42 33 30
Executive Board 33 33 25
First management level below Executive Board 39 35 30
Second management level below Executive Board 41 43 40
TUI fly
Supervisory Board 42 25 30
Executive Board 0 0 20
First management level below Executive Board 0 0 30
Second management level below Executive Board 38 41 40
For Germany (TUI AG, TUI Deutschland, TUI fly), targets covering
the period to 2023 had been fixed in financial year 2020 under a
voluntary commitment adopted in accordance with the statutory
provisions of the German Stock Corporation Act (AktG) and the
German Limited Liability Companies Act (GmbHG). TUI Deutschland
GmbH achieved all its targets for 2023. TUI AG met three of the
four targets it had set itself and managed to increase the
proportion of women in the second tier of management by six
percentage points. TUI fly did not achieve all of the targets
set.
The new targets 2026 will be set by the relevant committees in
autumn 2023.
See declaration in the Corporate Governance Report on page
130.
Enable best performance
In order to be successful together at TUI, we are seeking to
empower our employees to deliver their top performance. We are
supporting our executives and promoting dialogue between managers
and employees.
In the financial year under review, we revised our feedback and
target agreement process Great Place to Grow, placing the focus on
continuous development targets and extended feedback. Four target
categories were defined: Transformation; Growth, Profitability
& Cash Generation; Employee & Customer Engagement; ESG /
Sustainability. Great Place to Grow ensures regular dialogue
between executives and employees to discuss development targets and
performance.
Depending on their development targets, our employees can choose
from a broad range of development and learning formats. Overall,
the active users of our learning platform TUI People completed,
similar to prior year, an average of more than two hours of
training per month in financial year 2023. We also offered a range
of programmes in the TUI Learning Lounge, such as the
Sustainability Academy.
Our program for:ward focuses on further training in the IT
sector and was continued in financial year 2023 with a third
cohort. A total of 23 employees participated in this cohort.
Our executives have access to various development programmes.
How2 is our global four-month programme conveying key leadership
fundamentals to new executives starting their leadership role. In
financial year 2023, 373 employees from across TUI Group completed
the programme. The number of participants last year was 194. We
also resumed our leadership programmes Horizons and Perspectives
after they had been suspended due to the pandemic. A total of 46
executives were selected to take part - 20 participants for the
Horizons programme and 26 for Perspectives. The focus was on
leadership skills for global teams as well as strategy
communication and implementation.
Our International Graduate Programme was reactivated after the
end of the pandemic in financial year 2023. The two-year programme
familiarises participants with commercial and head office functions
within TUI.
Outlook
Our People Strategy is our targeted, strategic approach to
promoting strong leadership and supporting the development of our
employees. We consistently pursue the strategy of a Group-wide core
HR system. To facilitate data-based decision-making, we are
continually expanding and harmonising our digital systems. A key
focus is on Diversity, Equity & Inclusion (DEI) and the launch
and implementation of a global DEI strategy, covering many
different aspects of diversity.
Employee representatives
TUI Group historically features a strong co-determination
landscape. It embraces the Supervisory Board at corporate level,
the Group Works Council at Group level and many local works
councils at company level.
In the period under review, many topics were jointly updated,
continued or initiated in constructive talks. The focus was on the
revision of the feedback and target agreement process Great Place
to Grow, the introduction of TUIgether+ and our digitalisation
projects, including the implementation of our single core HR system
in TUI People.
At the European level, the TUI Europe Forum as an information
and consultation body represents the interests of employees working
in companies outside Germany and thus plays an important role as a
facilitator and integrator in the European framework. With the
joint revision of the basic agreement about the composition, tasks
and rights of the TUI Europe Forum, TUI's Executive Board has
endorsed the effective involvement of European employees to ensure
that harmonisation and transformation programmes within the Group
are effected on the basis of socially acceptable solutions.
Employee health
TUI promotes the physical and mental health of all employees.
The Group-wide body of health officers regularly deals with best
practices, ongoing projects and the plans presented to it for
health-promoting activities. Against the backdrop of global
challenges, especially in relation to mental health, an even
stronger focus will be placed in future on aligning activities to
common targets and establishing stringent processes.
In the course of the year, health-promoting activities and
presentations were offered across the Group. While some of the
offerings, such as the company sports programmes in Germany, were
resumed post-COVID-19, digital alternatives continue to complement
the range of activities on offer.
Employee indicators
As at 30 September 2023, staff numbers had increased by 7.1 % to
65,413. The expansion of business operations following the COVID-19
pandemic resulted in a significant increase in overall staff
numbers. Due to the re-segmentation of Future Markets from All
other segments to the segments Central Region and TUI Musement in
financial year 2023, previous year's figures have been
adjusted.
Personnel by segment
30 Sep 2023 30 Sep 2022 Var. %
adjusted
Hotels & Resorts 28,621 27,234 + 5.1
Cruises* 73 72 + 1.4
TUI Musement 10,484 9,061 + 15.7
Holiday Experiences 39,178 36,367 + 7.7
Northern Region 11,031 10,423 + 5.8
Central Region 7,266 7,120 + 2.1
Western Region 5,519 5,141 + 7.4
Markets & Airlines 23,816 22,684 + 5.0
All other segments 2,419 2,040 + 18.6
TUI Group 65,413 61,091 + 7.1
* Excludes TUI Cruises (JV) employees. Cruises employees are
primarily hired by external crew management agencies.
Hotels & Resorts
Due to an increase in business operations at Hotels &
Resorts, the headcount grew by a total of 5.1 % from 27,234 to
28,621. Robinson recorded a 2.7 % increase in staff numbers from
5,141 to 5,278. The headcount numbers reported by TUI Blue remained
basically flat year-on-year. Riu recorded a growth in staff numbers
by 11.9 % from 12,691 to 14,195, driven by an increase in
occupancy. Northern Hotels reported a slight decrease in the
headcount.
Cruises
The headcount in the Cruises segment increased slightly
year-on-year by 1.4 % to 73.
TUI Musement
In financial year 2023, the headcount in TUI Musement rose by
15.7 % from 9,061 to 10,484. The increase was driven by the growing
business in destinations such as Spain, Greece, and North and South
America.
Northern Region
Northern Region recorded a year-on-year headcount increase of
5.8 % from 10,423 to 11,031. In the UK, staff numbers in the
Retail, Tour Operator and Airline sectors rose by 5.6 %
year-on-year from 9,666 to 10,207. In the Nordics, staff numbers in
Tour Operator and Airline grew by a total of 8.9 % from 757 to
824.
Central Region
In Central Region, the headcount grew by 2.1 % year-on-year from
7,120 to 7,266. In Germany, staff numbers were more or less flat
year-on-year at 5,521. In Austria, staff numbers rose slightly by
7.3 % from 464 to 498. In Switzerland, the headcount increased
slightly by 1.9 % from 366 to 373. In Poland, the headcount grew by
13.2 % from 720 to 815. Future Markets recorded a decline in its
headcount.
Western Region
The headcount in Western Region increase by 7.4 % year-on-year
from 5,141 to 5,519. This was driven by higher staff numbers in the
Retail and Tour Operator sectors in Belgium and the Netherlands.
The number of employees in the Airline sector in the Netherlands
rose by 10.9 % from 750 to 832. In France, staff numbers grew by
17.6 % from 636 to 748.
All other segments
Overall staff numbers rose by 18.6 % year-on-year from 2,040 to
2,419. The number of employees working for Head Office functions
increased by 18.7 % from 1,079 to 1,281, including 262 employees
working for TUI AG. The headcount in IT rose by 18.4 % year-on-year
from 961 to 1,138.
Personnel costs
EUR million 2023 2022 Var. %
Wages and salaries 1,954.6 1,732.3 + 12.8
Social security contributions 294.9 300.4 - 1.8
Pension costs 108.8 109.2 - 0.4
Total 2,358.3 2,141.9 + 10.1
In the period under review, TUI Group's personnel costs
increased from EUR 2.1 bn to EUR 2.4 bn year-on-year. The
year-on-year increase in wages and salaries and social security
contributions in financial year 2023 mainly results from the 11.4 %
growth in average staff numbers.
For further details, please refer to page 212.
The pay package offered by TUI Group consists of various
components, reflecting the framework conditions in different
countries and companies and the appropriateness of compensation and
customary market rates. Depending on the function concerned, a
fixed salary may go hand in hand with variable components,
honouring individual performance and promoting the sustainable
participation of employees in the Company's long-term targets. In
addition, the Senior Leadership Team can participate in a long-term
share-based compensation programme based on the allocation of
virtual shares.
Many TUI Group companies offer their employees pension schemes
in the form of direct benefits or through an occupational
providence fund, or else by paying in additional employer
contributions to pension insurance, in some cases beyond the
statutory minimum required. In Germany, collective contracts have
been concluded with an insurance undertaking in order to meet the
legal entitlement to deferred compensation.
Customer experience, security & safety and crisis
management*
We place our guests and their individual wishes and needs at the
center of our organisation in order to offer them differentiated
and consistent experiences. In this way, we aim to increase
customer loyalty and tap into new customer segments, as satisfied
guests are a decisive factor for the TUI Group's long-term growth.
Our goal is to continuously adapt the customer experience to
individual needs and to further personalise it. The more flexible
and personalised design of our products and services is supported
by the expansion of our product portfolio and our digital
platform.
* As part of social matters
Our integrated business model allows us to accompany our guests
through the entire travel experience from booking, arrival, hotel
stay and cruise to local activities and excursions - digitally and
personally. The digital travel experience is complemented by the
personal support of our employees, which our guests experience in
our travel agencies, aircraft and hotels, on our ships and in the
destination.
The travel experience is about relaxing and winding down, or
discovering and exploring something new. However, the travel
experience can also entail a wide range of risks. As far as
possible, our activities aim to minimise these risks for customers
and employees. The business takes a risk based approach to prevent
intentional risks to the well-being of our customers, such as crime
or terror (Security) and offer all customers a travel experience
within the most security and safety, even in relation to
unintentional risks (Health & Safety), for all services booked
in the framework of their trips (e. g. flight, transfer to the
hotel, hotel stay and excursions). TUI continually monitors and
analyses safety-critical developments in destinations and discusses
response measures with the markets and other involved business
areas.
Safety
Throughout this financial year, Group Safety & Risk have
continued to oversee and deliver our safety management programme,
supporting the Group's businesses with a resumption to normal
operations after the COVID 19-pandemic and the delivery of
strategic growth plans.
The Safety & Risk team's focus is on the principal safety
risks associated with accommodation, transfers, excursions,
activities and tours supporting our tour operators in the source
markets, TUI Musement and TUI Hotels & Resorts.
In addition to the continuous monitoring approach of key risk
areas taken in TUI Hotels & Resorts, TUI have conducted
multiple safety assessments across our third-party providers using
a multi-layered assessment approach.
The continued development of our data-led, risk-based approach
to Safety Risk Management with third party hoteliers is increasing
our operational efficiency and enabling an improved approach to
safety risk management. This approach includes the use of data
sharing portals, in partnership with several technical safety
specialist providers conducting safety monitoring / management
programs with hoteliers globally.
Group Safety & Risk continues to support the strategic
direction of the business and ensuring that TUI remains a brand
that can be trusted.
Security
Following the review of security activities in 2022, recruitment
of a new Head of Global Security lead and Intelligence lead was
completed in February 2023. Since March 2023 the function has
worked to complete a discovery phase, reviewing the whole security
operation. This culminated with the creation of a new six pillar
strategy that not only is completely in accord with TUI Safety, but
also reflects TUI today and its risk based approach to SHS services
and engagement.
This new strategy will be delivered in two stages over three
years, the first 18 months will be the creation of, or amendment to
manuals, policies and guidelines related to our security
specialisms. All infrastructure will be made available to all via
TUI partners and we will seek ISO9001 accreditation to officially
cement our expertise. Strategic delivery is via a cyclical security
system and this approach has been presented to various elements of
the business during operational activities and presentations.
Crisis management and business continuity
TUI operates Group wide crisis and business continuity protocols
and governance modules. Regular update calls between Group function
and business areas take place on a weekly or monthly basis,
depending on the area, and are established to share strategic and
operational topics including best practice. Data is aggregated and
analysed, the frame works ascertain when guests and / or employees
are affected and what support or actions at what moment is
need.
Experienced crisis managers work within a team to cover areas
such as customer, commercial, communications and insurance
management. These experts across the Group facilitate a fast,
flexible response to levels of crisis. Appropriate reporting and
coordination within TUI ensures that management is updated on all
key incidents and developments and can immediately take decisions
if necessary.
The Group wide crisis management system software for monitoring,
escalation and managing of day-to-day incidents gives the ability
to work individually within our businesses or together as a group
when needed.
Anti-corruption and anti-bribery
Details of TUI Group's anti-corruption and anti-bribery measures
are presented in the Corporate Governance section on Integrity
& Compliance from page 154 in this Report.
Disclosures under the EU Taxonomy Regulation (EU) 2020 / 852
Pursuant to Article 8 of the Regulation (EU) 2020 / 852 of 18
June 2020 on the Establishment of a Framework to Facilitate
Sustainable Investment, TUI AG is publishing its report in
accordance with the Taxonomy Regulation. Compared with 2022, an
extended reporting obligation applies for financial year 2023.
Undertakings have to disclose information on the proportion of
turnover, capital expenditure and operating expenditure as defined
in the EU Regulation that is associated with economic activities
described in EU Regulations and Delegated Acts and hence
taxonomy-eligible. In addition, undertakings have to disclose
information on the degree to which these KPIs qualify as
environmentally sustainable or taxonomy-aligned under Articles 3
and 9 of the Taxonomy Regulation.
Environmental sustainability is analysed on the basis of
technical screening criteria for the following six environmental
objectives:
-- Climate change mitigation,
-- Climate change adaptation,
-- The sustainable use and protection of water and marine
resources,
-- The transition to a circular economy,
-- Pollution prevention and control,
-- The protection and restoration of biodiversity and
ecosystems.
An economic activity qualifies as environmentally sustainable or
taxonomy-aligned if it demonstrably makes a substantial
contribution to one of the six environmental objectives while doing
no significant harm to any of the remaining environmental
objectives. The economic activity also has to meet minimum
standards on human rights as well as social and labour standards,
anti-corruption, fair competition and taxation.
The regulations on the EU Taxonomy are still under development.
TUI has a financial year which ends at 30 September. Accordingly,
for financial year 2023, economic activities defined by regulations
only related to the environmental objectives of climate change
mitigation and climate change adaptation. As of 1 January 2024,
additional economic activities will also be defined for other
environmental objectives. Furthermore, technical screening criteria
for economic activities already defined will be adjusted. These
regulations did not apply in financial year 2023. Due to the larger
number of defined economic activities, generally taxonomy-eligible
revenue, capital expenditure and operating expenditure are expected
to increase from financial year 2024. Moreover, some of the terms
and definitions used in the EU Taxonomy regulations are still
unclear in terms of their meaning and interpretation. To clarify
these terms, the EU regularly publishes statements (FAQs). Due to
this unclarity and the changes in regulations, TUI faces the risk
of facing a different future interpretation of these indicators and
having to change its reporting accordingly. In its reporting as at
30 September 2023, TUI reflects the status of the FAQs as at 20
October 2023.
Determination of generally taxonomy-eligible economic
activities
As a first step, TUI analysed its economic activities, taking
into account both activities generating external turnover and
activities serving the Company's own needs. TUI's main activities,
flight operation and the delivery of accommodation services in
hotels, are not currently listed in the EU Taxonomy. Therefore,
only a small portion of the indicators mentioned above related to
taxonomy-eligible activities in the period under review. TUI does
not report any economic activities serving the environmental
objective of climate change adaptation.
The second step was to determine indicators relating to these
economic activities. Where an indicator relates to several
activities at once, it was broken down based on appropriated
indicator, usually based on the direct costs incurred for the
activity in question. The reported numbers only include the
turnover, capital expenditure and operating expenditure of
companies fully included in the consolidated financial
statements.
Checking technical screening criteria
Compliance with the relevant technical screening criteria is
determined on the basis of queries to the respective Group
companies or by means of a screening based on higher-level
processes and within the framework of national or EU regulations.
Where it was not possible to check compliance with technical
screening criteria for lack of data or evidence and the economic
activity concerned is not material for TUI, no screening was
carried out and the economic activity was classified as
non-compliant with the taxonomy according to the Comission Notice C
/ 2023 / 305 dated 20 October 2023 No. 13. The results are
described in the following sections on revenue, capital expenditure
and operating expenditure.
Checking minimum protection criteria
TUI ensures compliance with the minimum protection criteria
through Group-wide policies, training programmes, codes of conduct
and risk management systems, which also cover our suppliers and the
impact of the services we provide. With regard to compliance with
human rights, we refer to the Non-Financial Group Declaration.
Regarding anti-corruption and fair competition, we refer to the
Corporate Governance Report. TUI has also implemented a tax
strategy aiming to ensure taxation in line with our business,
preventing aggressive or artificial tax planning, ensuring
cooperation with local tax authorities and centrally managing and
reviewing tax risks. In this context, please refer to the
publication of our tax strategy at Our Tax Strategy and Governance
(tuigroup.com). At the reporting date, no relevant litigation was
pending in this context.
Revenue
Total revenue is the revenue determined in accordance with
international accounting standards and carried as revenue in the
Notes. In the TUI Musement segment, customer transport in the
destination, e. g. in the framework of excursions or transfers from
the airport to the hotel, was allocated to economic activity 6.3
"Urban and suburban transport, road passenger transport". The
revenue numbers were taken from our internal reporting system.
Where this revenue also related to other economic activities, e. g.
in the case of excursions involving not only transport but also
guided tours, it was allocated on the basis of direct costs of the
respective economic activity. Revenue from coach transport services
provided by third parties is only recognised if this revenue meets
the definitions of international accounting standards and if TUI
controls the underlying processes. The revenue generated in the
Cruises segment is allocated to economic activity 6.11 "Sea and
coastal passenger water transport". Revenue in the Northern Region
segment includes revenue from economic activity 6.7 "Inland
passenger water transport". The revenue is regularly generated from
sales of package tours consisting, for example, of a flight,
transport to the destination and overnight accommodation on a ship.
For the purposes of the EU Taxonomy, these revenues are broken down
in line with the direct costs of the respective economic activity
so as to determine the revenue attributable to passenger transport
by ship. As TUI's key economic activities currently do not fall
under the EU Taxonomy, taxonomy-eligible revenue only accounts
for
3.0 % (previous year 2.0 %) of total revenue. In addition,
technical screening criteria relate partially to regulations
exclusively applicable in the EU or to ship newbuilds so that
taxonomy-aligned revenues could not be identified.
Capital expenditure
Capital expenditure summarises the additions to the relevant
assets mentioned in the Notes in the sections "Goodwill", "Other
intangible assets", "Property, plant and equipment" and "Rights of
use". In financial year 2023, there were no additions from
mergers.
Total capital expenditure of EUR 974.8 m is broken down as
follows for financial year 2023:
Other intangible assets EUR 180.9 m
Property, plant and equipment EUR 483.3 m
Right of use assets EUR 310.6 m
As a rule, capital expenditure is allocated to individual
economic activities on the basis of our internal project
controlling. Alongside the economic activities already mentioned in
the Revenue section, capital expenditure are particularly
attributable to economic activities in connection with the
construction and renovation of buildings in the Hotels &
Resorts segment, as well as the installation of renewable energy
technologies. Overall, taxonomy-eligible capital expenditure
accounts for 44.7 % (previous year 31.0 %) of total capital
expenditure. The increase year on year is mainly related to the
addition of one cruise ship. Due to the lack of well-founded
threshold values for hotels and administrative buildings and
unclear transferability of technical screening criteria based on EU
regulations to non-EU countries, taxonomy-aligned capital
expenditure accounts for a very low proportion at under 1 %.
Operating expenditure
TUI's operating expenditure includes building renovation
measures, short-term lease, maintenance and repair, and any other
direct expenditures relating to the day-to-day servicing of assets
of property, plant and equipment, other intangible assets and right
of use assets. Where necessary, operating expenditure is allocated
to an economic activity on a cost basis. The review of the taxonomy
eligibility and alignment of operating expenditure follows the
review of the respective property, plant and equipment, other
intangible assets or right-of-use assets to which they can be
allocated. Taxonomy-eligible operating expenditure thus accounts
for 25.1 % (previous year 25.0 %) of total operating
expenditure.
Revenue 2023
Substantial conribution criteria DNSH ('Does not significant harm') Portion of
taxonomy-aligned Category Category
Revenue Proportion of Climate Climate Climate Climate Water and Circular Biodiversity Minimum or taxonomy- (enabling (transitional
Economic activities (3) revenue 2023 change change change change marine economy Pollution and safeguards eligible activity) activity)
(1) Code (2) in EUR (4) mitigation adaption mitigation adaption resources (10) (11) ecosystems (13) turnover, 2022 (15) (16)
million in % (5) (6) (7) (8) (9) Yes / No Yes / No (12) Yes / No (14) Yes / No Yes / No
in % in % Yes / No Yes / No Yes / No Yes / No in %
A. Taxonomy-eligible
activities
A.1. Environmentally
sustainable
activities
(taxonomy-aligned)
Revenues
environmentally
sustainable 0.0 0.0 0.0 0.0 N / A N / A N / A N / A N / A N / A N / A N / A
activities
(taxonomy-aligned)
(A.1)
Thereof enabling 0.0 0.0 0.0 0.0 N / A N / A N / A N / A N / A N / A N / A N / A N / A
activities
Thereof transitional 0.0 0.0 0.0 N / A N / A N / A N / A N / A N / A N / A N / A N / A
activities
A.2.
Taxonomy-eligible but
not environmentally
sustainable
activities (not
taxonomy-aligned)
Urban and suburban
transport, road CCM 6.3 123.8 0.6
passenger transport
Inland passenger CCM 6.7 26.2 0.1
water transport
Sea and coastal
passenger water CCM 6.11 477.8 2.3
transport
Revenues
taxonomy-eligible but
not environmentally
sustainable 627.8 3.0 3.0 0.0 2.0
activities
(non-taxonomy-aligned
activities) (A.2)
A. Revenues of
taxonomy-eligible 627.8 3.0 3.0 0.0 2.0
activities (A.1+A.2)
B.
Taxonomy-non-eligible
activities
Revenue from
taxonomy-non-eligible 20,038.1 97.0
activities
Total 20,665.9 100.0
Capital Expenditure (CapEx) 2023
Substantial conribution criteria DNSH ('Does not significantly harm') Portion of
taxonomy-aligned Category Category
CapEx Proportion Climate Climate Climate Climate Water and Circular Biodiversity Minimum or taxonomy- (enabling (transitional
Economic activities (3) of CapEx change change change change marine economy Pollution and safeguards eligible CapEx, activity) activity)
(1) Code (2) in EUR (4) mitigation adaption mitigation adaption resources (10) (11) ecosystems (13) 2022 (14) (15) (16)
million in % (5) (6) (7) (8) (9) Yes / No Yes / No (12) Yes / No in % Yes / No Yes / No
in % in % Yes / No Yes / No Yes / No Yes / No
A. Taxonomy-eligible
activities
A.1. Environmentally
sustainable
activities
(taxonomy-aligned)
Installation,
maintenance and CCM 7.6 2.2 0.2 100 Yes Yes N / A N / A N / A N / A Yes N / A E
repair of renewable -
energy technologies
CapEx environmentally
sustainable
activities ( 2.2 0.2 0.0 0.0 N / A N / A N / A N / A N / A N / A N / A N / A
taxonomy-aligned)
(A.1)
Thereof enabling 2.2 0.2 0.0 0.0 N / A N / A N / A N / A N / A N / A N / A N / A E
activities
Thereof transitional 0.0 0.0 0.0 N / A N / A N / A N / A N / A N / A N / A N / A
activities
A.2.
Taxonomy-eligible but
not environmentally
sustainable
activities (not
taxonomy-aligned)
Urban and suburban
transport, road CCM 6.3 7.1
passenger transport 0.7
Sea and coastal
passenger water CCM 6.11 226.5 23.2
transport
Construction of new CCM 7.1 62.3 6.4
buildings
Renovation of CCM 7.2 136.4 14.0
existing buildings
Installation,
maintenance and CCM 7.6 1.3 0.1
repair of renewable
energy technologies
CapEx
taxonomy-eligible but
not environmentally
sustainable 433.6 44.5 100 - 31.0
activities
(non-taxonomy-aligned
activities) (A.2)
A. CapEx
taxonomy-eligible 435.8 44.7 100 - 31.0
activities (A.1+A.2)
B.
Taxonomy-non-eligible
activities
Capital expenditures
on 539.1 55.3
taxonomy-non-eligible
activities
Total 974.9 100.0
Operating expenditures (OpEx) 2023
Substantial conribution criteria DNSH ('Does not significantly harm') Portion of
taxonomy-aligned Category Category
OpEx Proportion Climate Climate Climate Climate Water and Circular Biodiversity Minimum or taxonomy- (enabling (transitional
Economic activities (3) of OpEx change change change change marine economy Pollution and safeguards eligible OpEx, activity) activity)
(1) Code (2) in EUR (4) mitigation adaption mitigation adaption resources (10) (11) ecosystems (13) 2022 (14) (15) (16)
million in % (5) (6) (7) (8) (9) Yes / No Yes / No (12) Yes / No in % Yes / No Yes / No
in % in % Yes / No Yes / No Yes / No Yes / No
A. Taxonomy-eligible
activities
A.1. Environmentally
sustainable
activities
(taxonomy-aligned)
OpEx environmentally
sustainable
activities 0.0 0.0 0.0 0.0 N / A N / A N / A N / A N / A N / A N / A N / A
(taxonomy-aligned)
(A.1)
Thereof enabling 0.0 0.0 0.0 0.0 N / A N / A N / A N / A N / A N / A N / A N / A
activities
Thereof transitional 0.0 0.0 0.0 N / A N / A N / A N / A N / A N / A N / A N / A
activities
A.2.
Taxonomy-eligible but
not environmentally
sustainable
activities (not
taxonomy-aligned)
Urban and suburban
transport, road CCM 6.3 11.2
passenger transport 1.6
Sea and coastal
passenger water CCM 6.11 48.1 6.9
transport
Renovation of CCM 7.2 110.7 16.0
existing buildings
Data processing,
hosting and related CCM 8.1 4.0 0.6
activities
OpEx
taxonomy-eligible but
not environmentally
sustainable 174.0 25.1 25.0
activities
(non-taxonomy-aligned
activities) (A.2)
A. OpEx
taxonomy-eligible 174.0 25.1 25.0
activities (A.1+A.2)
B.
Taxonomy-non-eligible
activities
Operating
expenditures for 518.1 74.9
taxonomy-non-eligible
activities
Total 692.1 100.0
Annual financial Statements of TUI AG
The annual financial statements of TUI AG were prepared in
accordance with the provisions of the German Commercial Code (HGB),
taking account of the complementary provisions of the German Stock
Corporation Act (AktG), and audited by Deloitte GmbH
Wirtschaftsprüfungsgesellschaft, Hanover. They are published in the
German Unternehmensregister (www.unternehmensregister.de). The
annual financial statements have been made permanently available on
the Internet at www.tuigroup.com.
In the present Annual Report, the Management Report of TUI AG
has been combined with the Management Report of TUI Group.
Earnings position of TUI AG
Income statement of TUI AG
EUR million 2023 2022 Var. %
Revenue 158.4 89.8 + 76.4
Other operating income 411.9 491.7 - 16.2
Cost of materials 14.5 16.4 - 11.6
Personnel costs 53.4 57.5 - 7.1
Depreciation 1.4 1.6 - 12.5
Other operating expenses 228.7 332.6 - 31.2
Net income from investments - 13.5 - 205.2 + 93.4
Write-downs of investments 444.5 380.0 + 17.0
Net interest - 327.3 - 121.1 - 170.3
Income taxes (expense (+), income (-)) 2.7 - 3.8 n. a.
Loss after taxes - 515.7 - 529.1 + 2.5
Other taxes 1.9 1.8 + 5.6
Net result for the year - 517.6 - 530.9 + 2.5
The earnings position of TUI AG, the Group's parent company, is
primarily determined by the appropriation of profits from its Group
companies, either directly associated with TUI AG via profit and
loss transfer agreements or distributing their profits to TUI AG
based on relevant resolutions, and by the measurement of financial
investments and the funding of TUI Group.
Revenue and other operating income
The increase in revenue in financial year 2023 resulted mainly
from a higher income from licence fees with subsidiaries. Other
operating income in the period under review was characterised in
particular by the reversal of impairments on receivables and income
from intra-Group cost transfers. This income was offset by expenses
for intercompany charging of service costs to TUI AG, carried in
Other operating expenses. The year-on-year decline in Other
operating expenses was partly driven by lower income from the
reversal of provisions and significantly lower income from
write-ups on investments and lower income from exchange gains. On
the other hand, expenses were incurred for exchange losses, carried
in Other operating expenses.
Expenses
The year-on-year decrease in personnel costs resulted
essentially from lower pension expenses due to lower transfers to
pension provisions. An opposite effect was driven by lower expenses
for the formation of personnel provisions for Executive Board
members.
Other operating expenses comprised in particular expenses for
exchange losses, the cost of financial and monetary transactions,
fees, charges, capital procurements costs, services, transfers to
impairments, other administrative costs as well as expenses for
intra-Group cost transfers. While there was a decline in expenses
for exchange losses and a considerable fall in impairments on
receivables, expenses for intra-Group cost transfers rose. Overall,
this resulted in a substantial decline in Other operating
expenses.
Net income from investments
The year-on-year increase in net income from investments was
driven by a decline in expenses for loss transfers and a
significant increase in income from profit transfers. The positive
development was also attributable to an increase in dividend income
from investments. The loss transfers were mainly related to
Leibniz-Service GmbH. The income from profit transfers generated in
financial year 2023 resulted primarily from companies allocated to
Central Operations.
Write-downs of investments
In the period under review, write-downs of investments were
mainly related to Tour Operator subsidiaries. In particular due to
the inclusion of climate-related costs in the valuation,
write-downs were significantly higher than in 2022.
Interest result
In financial year 2023, the movement in the interest result
mainly reflected expenses incurred in connection with the
redemption of Silent Participation I and the repayment of the
remaining warrant bond issued to the Economic Stabilisation Fund
(ESF).
Taxes
Income taxes and expenses for other taxes mainly resulted from
the regular reassessment of tax provisions. Expenses for income
taxes also rose due to expenses for withholding taxes on dividend
payments from subsidiaries. Income taxes did not include any
deferred taxes.
Net result for the year
For financial year 2023, TUI AG posted a net result of EUR -
517.6 m.
Net assets and financial position of TUI AG
TUI AG's net assets and financial position as well as its
balance sheet structure reflect its function as TUI Group's parent
company. In financial year 2023, the balance sheet total increased
slightly year-on-year to EUR 10,144.4 m.
Abbreviated balance sheet of TUI AG (financial statement according to German Commercial Code)
EUR million 30 Sep 2023 30 Sep 2022 Var. %
Intangible assets / property, plant and equipment 17.6 4.6 + 282.6
Investments 7,824.3 7,753.6 + 0.9
Fixed assets 7,841.9 7,758.2 + 1.1
Receivables 1,981.8 1,781.1 + 11.3
Marketable Securities 0.3 - n. a.
Cash and cash equivalents 319.4 473.0 - 32.5
Current assets 2,301.5 2,254.1 + 2.1
Prepaid expenses 1.0 9.8 - 89.8
Total Assets 10,144.4 10,022.1 + 1.2
Equity 5,298.6 4,044.3 + 31.0
Special non-taxed items - - -
Provisions 307.9 323.3 - 4.8
Bonds 589.6 648.3 - 9.1
Other liabilities 3,948.3 5,006.2 - 21.1
Liabilities 4,537.9 5,654.5 - 19.7
Total Liabilities 10,144.4 10,022.1 + 1.2
Fixed assets
At the balance sheet date, fixed assets almost exclusively
consisted of investments. The movement in financial assets was
affected by the capital increases carried out in subsidiaries and,
in particular, by unscheduled write-downs, which more than offset
the capital increases effected in the period under review. The
write-downs mainly related to shares in Group companies in tour
operation. Due to the issuance of new non-current loans and
write-ups of shares in Group companies and participations, in
particular in Hotels & Resorts, fixed assets rose slightly
overall year-on-year in the completed financial year.
Current assets
The moderate rise in current assets of 2.1 % to EUR 2,301.5 m
was driven by an increase in receivables, which more than offset
the decrease in cash and cash equivalents. The increase in
receivables was primarily attributable to the development of claims
and obligations from profit and loss transfer agreements as well as
the short- and medium-term financing of Group companies. The rise
in receivables and corresponding fall in cash and cash equivalents
was also driven by a further cash deposit for the regulatory
hedging of customer deposits for package tours.
TUI AG's capital structure
Equity
TUI AG's equity increase by 31.0 % to EUR 5,298.6 m. This was
primarily driven by the capital increase carried out in April of
the financial year under review.
The loss for the year totalled EUR - 517.6 m. Including a loss
carried forward of EUR - 831.5 m, net loss totalled EUR - 1,349.1
m. The equity ratio rose to 52.2 % in the financial year under
review (previous year 40.4 %).
Provisions
Provisions decreased by EUR 15.4 m to EUR 307.9 m. They
consisted of pension provisions worth EUR 160.8 m (previous year
EUR 164.0 m), tax provisions worth EUR 25.1 m (previous year EUR
30.1 m), and other provisions worth EUR 122.0 m (previous year EUR
129.2 m).
In financial year 2023, the decline in pension provisions was
primarily attributable to a change in parameters. Other provisions
declined, in particular due to the reversal of provisions for
investment hedges. Moreover, use was made of the provision formed
in connection with the early redemption of Silent Participation II.
An opposite effect was driven by the slight increase in personnel
provision.
Liabilities
As at 30 September 2023, TUI AG's liabilities totalled EUR
4,537.9 m, a decline of EUR 1,116.6 m or 19.7 %.
In order to strengthen its balance sheet ratios and fund the
state aid granted, TUI AG carried out a capital increase of around
EUR 1.8 bn in April 2023. As a result, TUI AG was able to refinance
the repayment of a Silent Participation obtained from the ESF with
a nominal amount of EUR 420.0 m and implement the early repayment
of a warrant bond with a nominal amount of EUR 58.7 m plus the
warrants worth 58.7 m for the purchase of shares in TUI AG that
were acquired and subsequently cancelled.
Furthermore, bank liabilities under the syndicated credit
facility were significantly reduced. In addition, an amount of EUR
1,050.0 m of the undrawn KfW tranche of EUR 2.1 bn granted by the
German government was cancelled, reducing the tranche to EUR
1,050.0 m. The credit line of the syndicated credit facility from
the two tranches available for cash drawdowns thus amounted to EUR
2,504.4 m. As before, the amount of the tranche available for the
use of bank guarantees totalled EUR 190.0 m in the period under
review.
In May 2023, an agreement was reached with the banks to extend
the term of the syndicated credit facility from July 2024 to July
2026.
As at 30 September 2023, there had been no cash drawdown under
the syndicated credit facility (previous year: EUR 562.0 m).
Drawdowns from this credit facility by means of bank guarantees
amounted to EUR 109.2 m as at 30 September 2023.
The considerable decrease in liabilities to banks and other
liabilities was partly offset by the increase in liabilities to
Group companies. Due to the increase in operating activities, Tour
Operator companies, in particular, transferred monies to TUI
AG.
The net financial position (cash and cash equivalents minus
liabilities to banks, bonds and Schuldschein) totalled EUR - 517.3
m in the completed financial year (previous year: EUR - 1,170.9
m).
Capital authorisation resolutions
Information on new and existing capital authorisation
resolutions, adopted by the Annual General Meetings, is provided in
the next chapter on Information required under takeover law.
Information required under Takeover Law
Pursuant to sections 289a and 315a of the German Commercial Code
(HGB) and explanatory report
Subscribed capital
The subscribed capital of TUI AG consists of no-par value
shares, each representing an equal share of the capital stock. As a
proportion of the capital stock, the value of each share is around
EUR 1.00.
The subscribed capital of TUI AG, registered in the commercial
registers of the district courts of Berlin- Charlottenburg and
Hanover, consisted of 507,431,033 shares at the end of financial
year 2023 (previous year 1,785,205,853 shares) and correspondingly
totalled EUR 507,431,033.00. Each share confers one vote at the
Annual General Meeting.
Restrictions on voting rights or share transfers
The Executive Board assumes that it is currently impossible to
transfer the shares it considers attributable to Alexey Mordashov
or to exercise the voting rights from these shares.
Equity interests exceeding 10% of the voting shares
The Executive Board of TUI AG has been notified of the following
direct or indirect equity interests amounting to 10 % or more of
the voting rights:
* As a result of the capital increase in spring 2023, in which
Alexey A. Mordashov (Moscow, Russian Federation) has not been
allowed to participate due to his sanction since 28 February 2022,
his shareholding has decreased significantly. According to the
voting rights notifications of the German Federal Financial
Supervisory Authority (BaFin) dated 16 May 2023, 10.87 % shares in
TUI AG have been indirectly attributable to Alexey A. Mordashov
since 19 April 2023.
At the end of financial year 2023, around 89 % of TUI shares
were in free float. Around 33 % of all TUI shares were held by
private shareholders, around 55 % by institutional investors and
financial institutes, and around 12 % by strategic investors.
The current shareholder structure and voting rights
notifications according to section 33 of the Securities Trading Act
(WpHG) are available online at:
www.tuigroup.com/en-en/investors/share/shareholder-structure and
www.tuigroup.com/en-en/investors/news
Shares with special rights conferring powers of control
No shares with special rights conferring powers of control have
been issued.
System of voting right control of any employee share scheme
where control rights are not exercised directly by the
employees
Where TUI AG grants shares to employees under its employee share
programme, the shares are directly transferred to the employees
(sometimes with a lock-up period). Beneficiaries are free to
exercise the control rights to which employee shares entitle them
directly, in just the same way as other shareholders, in line with
statutory requirements and the Articles of Association.
Appointment and removal of Executive Board members and
amendments to the Articles of Association
The appointment and removal of Executive Board members is based
on Sections 84 et seq. of the German Stock Corporation Act in
combination with Section 31 of the German Co-Determination Act.
Amendments to the Articles of Association are based on the
provisions of Sections 179 et seq. of the German Stock Corporation
Act in combination with Section 24 of the Articles of Association
of TUI AG.
Powers of the Executive Board to issue shares
The Annual General Meeting on 9 February 2016 adopted a
resolution to create conditional capital of EUR 150.0 m for the
issue of bonds. The authorisation to issue bonds with conversion
options or warrants as well as profit-sharing rights and income
bonds (with or without fixed terms) of up to a nominal amount of
EUR 2.0 bn expired on 8 February 2021. With the issuance of a bond
with warrants worth EUR 150 m to the German Economic Stabilisation
Fund (ESF) in October 2020, this authorisation was fully used. The
bonds and warrants outstanding were repaid in full on 27 April 2023
without the ESF having exercised its option rights.
The Annual General Meeting on 13 February 2018 adopted a
resolution to create authorised capital for the issue of employee
shares worth EUR 30.0 m. The Executive Board of TUI AG was
empowered to use this authorised capital by 12 February 2023 in one
or several transactions by issuing employee shares against cash
contributions. In the completed financial year, no new employee
shares were issued.
The Extraordinary General Meeting on 5 January 2021 resolved to
create conditional capital of EUR 420.0 m in order to grant the ESF
the right to convert ESF's asset contribution in the form of a
silent participation of EUR 420.0 m ('Silent Participation I') at
any time (in a single or several transactions) in full or in part
into up to 420 m new registered no-par value shares, each
representing a proportionate share in the capital stock of EUR 1.00
per no-par value share. The new shares will be issued at the
minimum issue price of EUR 1.00. Silent Participation I was repaid
in full on 27 April 2023 without the ESF having exercised its
conversion right.
The Annual General Meeting on 25 March 2021 resolved to create
conditional capital for the issuance of bonds totalling EUR 109.9
m. The authorisation to issue bonds with conversion options or
warrants as well as profit-sharing rights and income bonds (with or
without fixed terms) is limited to a nominal amount of EUR 2.0 bn
and expires on 24 March 2026. This authorisation was nearly fully
used with the issuance of a convertible bond worth EUR 589.6 m in
April and July 2021. As at the balance sheet date, no shares had
yet been issued to service the convertible bond.
The Annual General Meeting on 8 February 2022 resolved to create
an authorisation to use new registered shares against cash
contribution for up to a maximum of EUR 162.3 m (Authorised Capital
2022 / I). This authorisation will expire on 7 February 2027.
The Annual General Meeting on 8 February 2022 also resolved to
create authorised capital for the issuance of new shares against
cash or non-cash contribution of EUR 626.9 m (Authorised Capital
2022 / II). The issuance of new shares against non-cash
contribution is limited to EUR 162.3 m. This authorisation will
expire on 7 February 2027.
In the completed financial year, the capital stock was increased
by EUR 328.9 m, utilising a part of the two last-mentioned
authorisations. Authorised Capital 2022 / I worth Proceeds of EUR
140.4 m were used from Authorised Capital 2022 / I, primarily to
repay in full the state aid provided by the German government for
stabilisation measures, while Authorised Capital 2022 / II worth
proceeds of EUR 188.5 m were used from Authorised Capital 2022 / I
to reduce the credit lines under the KfW facility. The further use
of the not yet used authorized capital is subject to the binding
declaration of commitment of the Executive Board from February
2023.
The Annual General Meeting on 8 February 2022 resolved to create
two additional amounts of capital for the issue of bonds worth EUR
162.3 m and EUR 81.1 m. The authorisations to issue bonds with
conversion options or war-rants as well as profit-sharing rights
and income bonds (with or without fixed terms) are limited to a
nominal amount of EUR 2.0 bn and will expire on 7 February
2027.
See the section on Subscribed capital in the Notes to the
consolidated financial statements on page 235 and the section on
Subscribed capital in the annual financial statements of TUI AG
(disclosure pursuant to Section 160 (1) no. 2 of the German Stock
Corporation Act).
Significant agreements taking effect in the event of a change of
control of the Company following a takeover bid, and the resulting
effects
Some of TUI AG's outstanding financing instruments contain
change of control clauses. A change of control occurs in particular
if a third partly directly or indirectly acquires control over at
least 50 % or the majority of the voting shares in TUI AG.
In the event of a change of control, the holders of the
Schuldschein worth EUR 242.0 m, and the convertible bond worth EUR
589.6 m must be offered a buyback. For the syndicated credit
facilities worth EUR 2.7 bn (including bank guarantees), of which
0.0 m (via cash) and EUR 109.2 m (via bank guarantees) had been
used as at the balance sheet date, a right of termination by the
lenders has been agreed in the event of a change of control.
Beyond this, there are no agreements in guarantee, leasing,
option or other financing contracts that might cause material early
redemption obligations that would be of significant relevance for
the Group's liquidity.
Apart from the above-mentioned financing instruments, a
framework agreement between the Riu family and TUI AG includes a
change of control clause effective in the event of a change of
control. Accordingly, a change of control occurs if a shareholder
group represents a predefined majority of AGM attendees or if one
third of the shareholder representatives on the Supervisory Board
are attributable to a group of shareholders. In the event of a
change of control, the Riu family is entitled to acquire at least
20 % and at most all shares held by TUI in RIUSA II S. A. at the
share value determined by an internationally recognised auditing
company. Since TUI AG's Annual General Meeting of 25 March 2021,
the conditions had been met for Unifirm to represent a majority of
AGM attendees, so that the entitlement arose for the Riu family to
acquire shares within certain time windows in 2021, 2022 and 2023.
The Riu family dispensed with exercising its acquisition right
within all the time windows mentioned above.
A similar agreement concerning a change of control at TUI AG has
been concluded with El Chiaty Group. Here, too, a change of control
occurs if a shareholder group represents a predefined majority of
AGM attendees or if one third of the shareholder representatives on
the Supervisory Board are attributable to a shareholder group. In
that case, El Chiaty Group is entitled to acquire at least 15 % and
at most all shares held by TUI in each of the joint hotel companies
in Egypt and the United Arab Emirates during three periods
following the change of control at a share value determined by an
internationally recognised auditing company. As the stake in TUI AG
held by Unifirm increased following the capital increase of 2
November 2021, here, too, a change of control was triggered due to
a majority of AGM attendees. The final period for El Chiaty Group
to exercise its acquisition right is from 16 November to 16
December 2023.
A change of control agreement has likewise been concluded for
the joint venture TUI Cruises between Royal Caribbean Cruises Ltd.
and TUI AG in the event of a change of control in TUI AG whereby
more than 50 % of voting rights are acquired by an individual or
group. The agreement in this case gives the partner the right to
demand termination of the joint venture and to purchase the stake
held by TUI AG at a price which is lower than the selling price of
their own stake under certain circumstances.
Compensation agreements effective in the event of a takeover bid
have not been concluded between the Company and its Executive Board
members or employees.
TUI Share1
TUI share price significantly impacted by economic uncertainty,
persistent energy crisis and inflation, and interest rate
increases
In financial year 2023, the TUI share showed at times
significant share price volatility, primarily driven by uncertainty
about the course of inflation, above all energy prices, and
continued monetary tightening by the central banks. Global growth
concerns also remained at the forefront. The International Monetary
Fund revised its growth forecasts for gross domestic product
downward for 2023 and 2024. Overall, the value of the TUI share,
with an entry price adjusted for share consolidation and the
capital increase with subscription rights of EUR 7.172,3 declined
by around 27 %, closing at EUR 5.222,3 on 30 September.
At the beginning of the financial year, sentiment in the capital
markets benefited from the persistent post-COVID recovery in
demand, despite economic uncertainties. In addition, in
mid-December 2022, TUI concluded an agreement with the Economic
Stabilisation Fund ('WSF') on the repayment of corona state aids
received during the pandemic, hence reducing debt and interest
costs. In subsequent weeks, TUI's share price rose significantly to
its annual high of EUR 12.57 2, 3 on 18 January 2023. In February,
TUI carried out a capital decrease by means of a ten-for-one
reverse stock split, previously approved by the Annual General
Meeting and subsequently implemented in accordance with the
repayment agreement as the final condition for the capital increase
scheduled for March. On 18 April 2023, TUI completed the rights
issue of approximately EUR 1.8 bn, and issued around 329 million
new shares. The proceeds were used to repay TUI's remaining WSF
state aid including interest and for another major reduction to its
KfW credit line. TUI thus strengthened its balance sheet, is
benefiting from lower interest payments and has gained greater
financial and entrepreneurial flexibility for the implementation of
its strategy.
Furthermore, TUI successfully extended the existing syndicated
credit lines totalling EUR 2.7 bn in May. The syndicated credit
facility from 20 banks (EUR 1.65 bn) and the credit line from KfW
(EUR 1.05 bn) will now mature in July 2026. In future, the interest
terms and conditions under that revolving credit facility will also
be linked to achieving the Group's emissions reduction targets
confirmed by the Science Based Targets initiative. The capital
increase and the extension of the credit facilities were key
measures to improve TUI's credit metrics, also reflected in
improved credit ratings from S&P (B3 to B2) and Moody's (B- to
B). This progress, and the gratifying development of bookings in
the summer months, supported by higher prices, facilitated the
recovery of the TUI share up until mid-July.
Despite the positive booking momentum, which continued into
Winter 2023 / 24, the tense macro-economic environment led to
uncertainty in the stock markets in the final months of the
financial year. With several members of OPEC+ (Organization of
Petroleum Exporting Countries) continuing to cut back production,
oil prices rose substantially, in particular towards the end of the
financial year under review which put additional pressure on the
TUI share price.
Driven by these economic uncertainties, higher interest rates,
persistent inflation and its potential impact on booking behaviour
in tourism, the TUI share recorded its financial year low of EUR
5.01 2, 3 on 26 September and closed at EUR 5.22 2, 3 on 30
September.
1 The contents presented in this chapter are unaudited and
voluntary.
2 Source: Reuters, Xetra closing prices
3 Historical prices adjusted for the effect of the capital
reduction through share consolidation and capital increase with
subscription rights
TUI share data
30 September 2023
WKN TUAG50
ISIN DE000TUAG505
Stock exchange centres London, Xetra, Hanover
Reuters / Bloomberg TU1n.DE/TU1.GR (Xetra); TUIT.L/TUI:LN (London)
Stock category Registered ordinary shares
Capital stockEUR 507,431,033.00
Number of shares 507,431,033
Market capitalisationbn EUR 2.6
Market capitalisationbn GBP 2.3
Long-term development of the TUI share (Xetra)1, 2
EUR 2019 2020 2021 2022 2023
High 51.23 39.19 25.86 20.37 12.57
Low 24.35 8.94 9.29 7.17 5.01
Year-end share price 32.99 10.02 18.52 7.17 5.22
1 Source: Reuters, Xetra closing prices
2 Historical prices adjusted for the effect of the capital
reduction through share consolidation and capital increase with
subscription rights
Quotations, indices, and trading
The TUI share has its primary listing in the Premium segment of
the Main Market of the London Stock Exchange and is included in
FTSE's UK Index Series. It also has a secondary listing at the
Frankfurt Stock Exchange and the Hanover Stock Exchange and is
admitted to the electronic trading system Xetra.
As TUI shares are also admitted to trading in a regulated market
in Germany apart from their listing at the London Stock Exchange,
TUI falls within the scope of the German Securities Acquisition and
Takeover Act and is monitored by the Federal Financial Supervisory
Authority and the Financial Conduct Authority in this respect.
In financial year 2023, the average daily trading volume at the
London Stock Exchange was around 839 thousand shares, while about
2.5 million shares were traded on Xetra per day. Across all trading
platforms, the daily trading volume in the UK amounted to around
1.8 million shares, with around 6.2 million shares traded in the
euro line. Both the sterling and the euro lines thus delivered
strong liquidity for trading by institutional and retail
investors.
Analyst recommendations
Analyses and recommendations by financial analysts serve as a
decision-making basis for institutional and private investors. In
the financial year under review, around 20 analysts regularly
published studies on TUI Group. In September 2023, 32 % of analysts
recommended to 'buy' the TUI share, with 58 % recommending 'hold'
and 10 % of analysts recommending 'sell'.
Shareholder structure
* As a result of the capital increase in spring 2023, in which
Alexey A. Mordashov (Moscow, Russian Federation) has not been
allowed to participate due to his sanction since 28 February 2022,
his shareholding has decreased significantly. According to the
voting rights notifications of the German Federal Financial
Supervisory Authority (BaFin) dated 16 May 2023, 10.87 % shares in
TUI AG have been indirectly attributable to Alexey A. Mordashov
since 19 April 2023.
At the end of financial year 2023, around 89 % of TUI shares
were in free float. Around 33 % of all TUI shares were held by
private shareholders, around 55 % by institutional investors and
financial institutes, and around 12 % by strategic investors.
The current shareholder structure and the voting right
notifications pursuant to Section 33 of the German Securities
Trading Act are available online at:
https://www.tuigroup.com/en-en/investors/share/shareholder-structure
and www.tuigroup.com/en-en/investors/news
Dividend policy
Development of dividends and earnings of the TUI share
EUR 2019 2020 2021 2022 2023
Earnings per share + 0.71 - 5.34 - 2.58 - 1.02 1 0.80
Dividend 0.54 - - - -
1 Earnings per share adjusted for the capital reduction through
share consolidation
In connection with the COVID-19 crisis, TUI agreed on three
stabilisation packages with the federal German government.
Conditions attached to the support include a de facto dividend
holiday, which will remain in force over the term of the loans and
the duration of the investment made by the Economic Stabilisation
Fund. TUI used the proceeds from the rights issue in financial year
2023 to repay the remaining financial aid from the Economic
Stabilisation Fund including interest and to reduce the (undrawn)
credit line from KfW to EUR 1.05 bn, extending it to July 2026.
Investor Relations
Open and continuous dialogue and transparent communication with
our private shareholders, institutional investors, equity and
credit analysts and lenders form the basis for our Investor
Relations engagement. Many discussions were held, centring on the
Group strategy, business performance in the individual segments,
the strong operative Summer business post-COVID-19, the financing
measures and the impact of inflation as well as the energy crisis.
The goal of this dialogue is to ensure transparent communication so
as to enable stakeholders to make a realistic assessment of the
future performance of the TUI share.
In financial year 2023, dialogue with investors primarily
focused on the following topics:
-- Demand for travel, capacity development and booking numbers
for the Summer and Winter seasons
-- Operational and financial implications of heat waves and
wildfires in Europe and the impact of theseevents on customers'
booking behaviour
-- Impacts of cost inflation on prices and margins and on
customers' booking behaviour
-- Repayment of the remaining WSF state aid: reduction in the
KfW credit line as well as extension of thecredit facilities
-- Strategic priorities: expansion of our TUI Musement segment
for tours and activities, our dynamicpackaging as well as
hotel-only and flight-only offering, and further growth of our
hotel portfolio and ship fleetthrough asset-right financing
structures such as joint ventures
-- Meeting expectations for financial year 2023 and future
growth
-- New TUI Sustainability Agenda 'People, Planet, Progress' and
the Group's emissions reduction targetsconfirmed by the Science
Based Targets initiative (SBTi)
TUI's management team sought dialogue with investors at physical
and virtual roadshows and conferences in New York, London,
Frankfurt, Düsseldorf, Munich, Warsaw, Zurich and Paris. The
management also met investors from other financial hubs in Europe,
North America, Asia, South Africa and Australia.
TUI's Investor Relations team also makes every effort to engage
in direct contact with private investors, with IR staff presenting
TUI Group at events held by shareholder associations and answering
questions asked by that target group. TUI also offers a broad range
of information for analysts, investors and private shareholders on
its website. All conference calls dealing with financial results
were transmitted live.
Supervisory Board and Executive Board
TUI AG Supervisory Board
Name Function / Occupation Location Initial Appointed Other Board Memberships2 Number of
Appointments until AGM TUI AG shares
Dr Dieter Chairman of the Supervisory b) Veta Health
Zetsche Board of TUI AG Stuttgart 13.2.2018 2027 LLC 37,460
Wallbox N. V.
Deputy Chairman of the
Frank Jakobi1 Supervisory Board of TUI AG Hamburg 15.8.2007 2026 1,068
Chairman of Group Works
Council of TUI AG
Ingrid-Helen Member of the Executive Dreieich 11.2.2020 2024 0
Arnold Board, Südzucker AG
Trade union secretary of
Sonja ver.di -
Austermühle 1 Vereinte Berlin 1.4.2022 2026 0
Dienstleistungsgewerkschaft
and Lawyer
Member of the Management
Christian Board (CFO) Dusseldorf 31.5.2022 2027 0
Baier Covestro AG (since October
2023)
Andreas Aircraft Captain, TUIfly Grethem a) TUIfly GmbH 4
Barczewski 1 GmbH (OT Buechten) 10.5.2006 2026 20.09.2023; Court appointment 14,450
as of 19.10.2023)
Regional Head of the
Peter Bremme Special Service Division Hamburg 2.7.2014 2026 a) TÜV Nord AG 0
1 of ver.di - Vereinte
Dienstleistungsgewerkschaft
Dr Jutta A. Member of the Executive Frankfurt am
Dönges Board (CFO), Main 25.3.2021 2025 a) Commerzbank AG 0
Uniper SE
Prof Dr Edgar Member of supervisory
Ernst bodies in different Bonn 9.2.2011 2025 a) Metro AG 0
companies
Group Director Financial b) RIUSA II S.
Wolfgang Accounting & Reporting, TUI Großburgwedel 13.6.2016 2026 a) Deutscher Reisepreis- A. 3,201
Flintermann 1 AG Sicherungsverein VVaG TUI Netherland
N. V.
Member of the Management
María Garaña Board Madrid 11.2.2020 2024 b) Alantra 0
Corces Forterro UK Ltd. (since Partners S. A.
October 2023)
Technology Team Lead
Stefan Airline Platform Services, Nordstemmen 21.7.2020 2026 3,906
Heinemann 1 Airline IT, TUI InfoTec
GmbH
b) Kyndryl
Supervisory Board Member & Inc.
Janina Kugel Senior Advisor Munich 25.3.2021 2025 thinkproject 0
Deutschland
GmbH
TUI AG Supervisory Board
Name Function / Occupation Location Initial Appointed Other Board Memberships2 Number of
Appointments until AGM TUI AG shares
b) 3i Group
Member of supervisory PLC
Coline bodies in different London 11.12.2014 2024 Fevertree 0
McConville companies Drinks PLC
Travis
Perkins PLC
Helena Murano Senior Advisor to Arcano Palma de 31.5.2022 2027 0
Partners Mallorca
a) TUI
Mark Chairman of Works Council Deutschland GmbH
Muratovic 1 Tour Operator, Langenhagen 25.3.2021 2026 MER - 1,252
TUI Deutschland GmbH Pensionskasse V.
V. a. G.
Chairman of Works
Anette Council, Hemmingen 2.1.2009 2026 3,357
Strempel 1 TUI Customer Operations
GmbH
b) Ahungalla
Resorts Ltd.
Hotel San
Joan Trían Executive Board Member of Palma de Francisco S.
Riu Riu Hotels & Resorts Mallorca 12.2.2019 2024 A. 0
Pep Toni
Hotels S. A.
RIUSA II S.
A.
Riu Hotels
S. A.
Tanja Viehl 1 Lawyer (in-house lawyer), Woelfersheim 25.3.2021 2026 0
Vereinigung Cockpit e.V.
Stefan International Employee b) TUI
Weinhofer 1 Relations Coordinator at Vienna 9.2.2016 2026 Austria 0
TUI AG Holding GmbH
1 Representative of the employees
2 Information refers to 30 September 2023 or date of resignation
from the Supervisory Board of TUI AG in financial year 2023.
3 Chairman
4 Deputy Chairman
a) Membership in supervisory boards within the meaning of
section 125 of the German Stock Corporation Act (AktG). b)
Membership in comparable German and non-German bodies of companies
within the meaning of section 125 of the German Stock Corporation
Act (AktG).
TUI AG Executive Board
Number of TUI AG
Name Department Other Board Memberships shares
(direct and
indirect)1
Sebastian Ebel
(Age: 60) a) BRW Beteiligungs AG
Member of the Executive Board Chairman Eves Information b) Midnight Canada Inc. 33,258
since Technology AG2 RIUSA II S. A.2
December 2014 Compass Group
CEO since October 2022 Deutschland GmbH
Current appointment until
September 2025
b) First Choice Holidays Ltd.
David Burling First Choice Holidays &
(Age: 55) CEO Markets & a) TUI Deutschland Flights Ltd. 16,426
Member of the Executive Board Airlines GmbH First Choice Olympic Ltd.
since June 2015 Midnight Canada Inc.
Current appointment until May Sunwing Vacations Inc.
2026 TUI Northern Europe Ltd.
TUI Nordic Holdings Sweden AB
TUI Travel Group Management
Services Ltd.
TUI Travel Holdings Ltd.
TUI Travel Ltd.
TUI Travel Overseas Holdings
Ltd.
Vacation Express USA Corp
Mathias Kiep
(Age: 48) a) TUI Deutschland
Member of the Executive Board CFO GmbH2 b) TUI Canada Holdings Inc. 3,990
since
October 2022
Current appointment until
September 2025
Peter Krueger b) Midnight Canada Inc.
(Age: 47) CSO & CEO HEX Midnight International 44,059
Member of the Executive Board Holdings Ltd
since Old Court Management Limited
January 2021 Pep Toni Hotels S. A.
Current appointment until RIUSA II S. A.
December 2026 TUI Canada Holdings Inc.
1000476378 Ontario Inc.
Sybille Reiss
(Age: 47) CPO/Labour a) TUI Deutschland
Member of the Executive Board Director GmbH 3,315
since July 2021
Current appointment until June
2027
Frank Rosenberger
(Age: 55) CIO a) Peakwork AG3 1,374
Member of the Executive Board
since
January 2017
Appointment until October 2022
1 Information refers to 30 September 2023 or date of resignation
from the Excecutive Board in financial year 2023.
2 Chairman
3 As of 31 October 2022 a) Membership in Supervisory Boards
required by law within the meaning of section 125 of the German
Stock Corporation Act (AktG)
b) Membership in comparable Boards of domestic and foreign
companies within the meaning of section 125 of the German Stock
Corporation Act (AktG)
Corporate Governance Report*
* As part of the combined Management Report
The actions of TUI AG´s management and oversight bodies are
determined by the principles of good and responsible corporate
governance.
The Executive Board and the Supervisory Board discussed
Corporate Governance issues in financial year 2023. In this
chapter, the Executive Board provides - also for the Supervisory
Board - the report on Corporate Governance in the Company pursuant
to Principle 23 of the German Corporate Governance Code in the
version dated 28 April 2022 (GCGC) and section 289a of the German
Commercial Code (HGB) as well as Disclosure and Transparency Rule
(DTR) 7.2 and Listing Rule (LR) 9.8.7R.
Declaration of Compliance pursuant to section 161 of the German
Stock Corporation Act (AktG)
As a stock corporation company under German law, TUI AG's
Executive Board and Supervisory Board are obliged to submit a
declaration of compliance with the GCGC pursuant to section 161 of
the German Stock Corporation Act.
https://www.dcgk.de/en/code//foreword.html
Wording of the Declaration of Compliance for 2023
'In accordance with section 161 of the German Stock Corporation
Act, the Executive Board and Supervisory Board hereby declare:
Since the last declaration of compliance was submitted in August
2023, the recommendations of the German Corporate Governance Code
in its applicable version have been and will be fully
observed.'
Place of publication:
www.tuigroup.com/en-en/investors/corporate-governance
Declaration of Compliance pursuant to DTR 7.2 and LR 9.8.7R
As an overseas company with a premium listing on the London
Stock Exchange, TUI AG's Executive Board and Supervisory Board are
obliged pursuant to No. 7.2 DTR and LR 9.8.7R to make a statement
on the application of the UK Corporate Governance Code (UK CGC).
Since the German Corporate Governance Code also applies to TUI AG
as a stock corporation under German law, TUI AG had announced at
the time of its merger with TUI Travel PLC that it would also
comply with the UK CGC to the extent practicable.
https://media.frc.org.uk/documents/UK_Corporate_Governance_Code_2018.pdf
In many respects, the requirements of the GCGC and the UK CGC
are similar and have continued to converge in recent years.
However, there are certain aspects that are not compatible, which
are explained below. Therefore, some deviations from Code
requirements and best practice in the UK have been necessary.
Under the German Stock Corporation Act, the legislation
applicable to TUI AG, a two-tier board system is mandatory,
according to which the Executive Board of the company manages the
business under its own responsibility and the Supervisory Board, as
independent body, supervises the management of the company (see
below section 'Functioning of the Executive and Supervisory Board'
on page 124). The two-tier board structure is different to the UK
unitary board structure on which the UK CGC is based. Some of the
principles of composition and operation of the boards of a German
stock corporation also differ from those of a UK company (for
example, the function of a Company Secretary does not exist in the
GCGC). For this reason, the Executive Board and the Supervisory
Board have set out below in which areas the UK CGC is not complied
with and explained the reasons for the deviations. In addition, the
Executive Board and the Supervisory Board have also explained those
instances where they consider TUI AG not to be compliant with the
UK CGC in the literal sense but where it lives up to the spirit and
meaning of the respective regulation.
Sub-headings refer to sections of the UK CGC for ease of
reference for investors.
Wording of the UK Corporate Governance Statement 2023
'Executive Board and Supervisory Board declare pursuant to DTR
7.2 and LR 9.8.7R:
Throughout the reporting period, TUI AG has complied with the
provisions of the UK Corporate Governance Code in the version of
July 2018, including its main principles, except as set out and
explained below. Further information on compliance with the UK
Corporate Governance Code can be found in various parts of the
Annual Report.'
Place of publication:
www.tuigroup.com/en-en/investors/corporate-governance
Dialogue with shareholders (Provision 3)
It is still not widespread practice in German companies for
Supervisory Board committee chairs to make themselves available for
meetings with shareholders. The German Corporate Governance Code
stipulates in the Suggestion A.3 that the Chairman of the
Supervisory Board should be available - within reasonable limits -
to discuss Supervisory Board-related issues with investors.
The table below provides an overview of all appointments of the
Executive Board with shareholders, in some of which also employees
of Investor Relations participated.
Dialogue with shareholders
Date Meeting Participants
FY22 Results Presentation, London SE, MK
December 2022
Roadshow UK, virtual SE, MK
Commerzbank & ODDO BHF German Investment Seminar, New York City MK
January 2023
UniCredit / Kepler Cheuvreux 22nd German Corporate Conference, Frankfurt MK
FY23 Q1 Results Presentation, virtual SE, MK
February 2023
Annual General Meeting, virtual SE, MK
March 2023 Capital Raise Roadshow, virtual SE, MK
FY23 Q2 / H1 Results Presentation, London SE, MK
May 2023 Roadshow UK, London SE, MK
Roadshow Frankfurt, virtual SE, MK
Roadshow Zurich, virtual MK
dbAccess German Corporate Conference, Frankfurt MK
June 2023
Roadshow Paris, virtual MK
FY23 Q3 / 9M Results Presentation, virtual SE, MK
August 2023
Stifel 7th Transportation, Business Services & Leisure Conference, virtual MK
Morgan Stanley CFO Fireside Chat, virtual MK
September 2023 Berenberg & Goldman Sachs Twelfth German Corporate Conference, Munich MK
Bernstein's 20th Pan European Annual Strategic Decisions Conference, London SE
Key: Sebastian Ebel (SE), Mathias Kiep (MK)
The Supervisory Board receives feedback from the Chairman and
Executive Board members following meetings with major shareholders
or investors. Additionally, a monthly Investor Relations Report and
event-driven assessments of brokers are forwarded to the Executive
Board and the Supervisory Board. They contain updates on the share
price development, analyses of the shareholder structure as well as
purchases and sales of shares and feedback and assessments from
investors. The Executive Board and the Supervisory Board consider
that TUI AG lives up to the spirit and meaning of the UK CGC.
Independence of Supervisory Board members (Provision 10)
Under the UK CGC, the Board must identify in the annual report
each non-executive director it considers to be 'independent' for
the purposes of the UK CGC. Based on the responsibilities assigned
to the Supervisory Board by the German Stock Corporation Act, the
members of the Supervisory Board are considered to be non-executive
directors for the purposes of the UK CGC. Under the UK CGC, persons
are 'independent' if they are independent in character and
judgement and if there are no relationships or circumstances which
are likely to affect, or could appear to affect, their judgement.
TUI AG does not, however, extend its independence disclosures to
its 10 employee representatives on the Supervisory Board. Due to
the number of employees, the Supervisory Board of TUI AG is subject
to the German Co-Determination Act. Accordingly, the Supervisory
Board of TUI AG consists of ten members who are elected by
shareholders at the Annual General Meeting (the 'Shareholder
Representatives') and ten members who represent the employees of
TUI AG (the 'Employee Representatives'). This differs from UK
practice where only those board members representing major
shareholders are typically referred to as 'Shareholder
Representatives' and are not considered as independent under the UK
CGC because of their link to a significant shareholder.
Assessment of the independence of the shareholder
representatives
The Supervisory Board has determined that seven of its nine
shareholder representatives (the Chairman is not taken into account
according to the UK CGC) are independent for the purposes of the UK
CGC. The shareholder representatives considered to be independent
are: Ms Ingrid-Helen Arnold, Mr Christian Baier, Prof. Dr Edgar
Ernst, Ms María Garaña Corces, Ms Janina Kugel, Ms Coline
McConville and Ms Helena Murano. Additionally, the Chairman, Dr
Dieter Zetsche, was independent on his re-election in 2019 and is
still considered independent (Dr Dieter Zetsche also was
independent when he was elected to the Supervisory Board in
February 2018).
In its assessment, the Supervisory Board considered in
particular the aspects set out below:
Prof. Dr Ernst has been a member of the Supervisory Board of TUI
AG since 9 February 2011. According to the UK CGC, it is an
indication of a lack of independence if a member has been on the
Supervisory Board for more than nine years. According to the GCGC,
it is an indication of a lack of independence from the Executive
Board and the Company if a member has been on the Supervisory Board
for more than twelve years. In view of this, the shareholder
representatives on the Supervisory Board have taken a close look at
how they assess Prof. Dr Ernst's independence. In particular in
view of Prof. Dr Ernst's professional career, the shareholder
representatives have come to the conclusion that Prof. Dr Ernst -
also taking into account his membership on the Supervisory Board of
TUI AG of over twelve years - provides as before the necessary
critical distance from the Executive Board and the Company and
therefore consider him to be independent. In addition, due to the
personnel changes on TUI AG's Executive Board, particularly on the
position of the CFO, in recent years, Prof. Dr Ernst's independence
from the Executive Board is strengthened. Prof. Dr Ernst also
ensures continuity in the proper performance of the tasks of the
Audit Committee, which has also seen personnel changes in recent
years. Prof. Dr Ernst has continually exhibited his critical
distance from the Executive Board and the Company in the past,
especially in his position as Chairman of the Audit Committee.
Against this background, the Annual General Meeting 2021 has
re-elected Prof. Dr Ernst with a large majority.
As of the balance sheet date, according to the UK CGC (and also
the GCGC), Dr Jutta Dönges is qualified as non-independent.
However, Dr Dönges will be assessed as independent by the
Supervisory Board from 1 November 2023.
On 31 October 2022, Dr Jutta Dönges ceased her position as
Managing Director of the Finance Agency of the Federal Republic of
Germany (Finanzagentur GmbH der Bundesrepublik Deutschland). On 4
January 2021, TUI AG entered into a Framework Agreement with the
Economic Stabilisation Fund (WSF) represented by Finance Agency
GmbH regarding a silent participation of the WSF and further
measures under the stabilisation package. Dr Dönges was nominated
by the WSF for membership of the Supervisory Board of TUI AG and
elected to the Supervisory Board by the shareholders with effect
from the Annual General Meeting (AGM) 2021. On 27 April 2023, TUI
AG repaid the WSF financial aid in full. In view of the above
information, the Supervisory Board has come to the conclusion that
the factors previously indicating the dependence of Dr Dönges no
longer apply. However, as the Supervisory Board has decided to
apply a one-year cooling-off period according to recommendation C.7
(paragraph 2, indent 2) of the GCGC in this case, Dr Dönges will
only be assessed as independent from the Company and its Executive
Board from 1 November 2023, i. e.
after one year from the termination of her position as Managing
Director of the Finance Agency of the Federal Republic of Germany.
The Supervisory Board considers the shorter cooling-off period
compared to the UK CGC (1 year according to the GCGC, 3 years
according to the UK CGC to be appropriate.
At TUI AG, Mr Joan Trían Riu (Riu Hotels S. A., approx. 1.1 % of
the voting rights as of 30 September 2023) is linked to a major
shareholder. In this context, he is considered a non-independent
under the UK CGC.
Assessment of the independence of employee representatives
Seven of the ten employee representatives of the Supervisory
Board are elected by the employees of TUI Group entitled to vote.
Three employee representatives are nominated by a German trade
union.
Under the UK CGC, directors who are or have been employees of
the Group in the last five years or who participate in the Group's
pension arrangements would generally not be considered independent.
In the UK, directors with an employment relationship are normally
current or former executives. By contrast, under German law,
employee representatives of the Supervisory Board must be employees
of the Group, and must be elected by the employees without any
involvement of the Executive or Supervisory Boards. Furthermore,
the employment contract of employee representatives may only be
terminated in exceptional cases.
The employee representatives may also participate in Group
pension schemes as is normal for employees and in their capacity as
employees.
Trade union representatives are nominated and employed by the
trade union but are still classified as employee representatives.
They can only be removed from the Supervisory Board by their
respective union and neither the Executive nor the Supervisory
Board has any role in their appointment or removal.
Half the Board should be independent Non-executive Directors
(Provision 11)
As mentioned above, TUI AG's Supervisory Board consists of ten
employee and ten shareholder representatives. As the employee
representatives are not considered independent under the UK CGC,
TUI AG's Supervisory Board comprises seven (excluding the Chairman
of the Supervisory Board) independent shareholder
representatives.
Identification of Senior Independent Director (Provision 12)
Under German law and the GCGC, there is no concept of a 'Senior
Independent Director'. Instead, shareholders may raise any issues
at the AGM. In this forum, the Executive Board and the Chairman of
the Supervisory Board are available to address any issues and are
legally obliged to provide adequate responses.
Outside the AGM, shareholders may approach the Executive Board,
in particular the CEO or the CFO, or, for topics relating to
Supervisory Board matters, the Chairman of the Supervisory Board or
his Deputy. Mr Frank Jakobi, as employee representative, is Deputy
Chairman of the Supervisory Board in accordance with the German
Co-Determination Act.
Division of responsibilities - Chairman & Chief Executive
(Provision 14)
The separation of the roles of the Chairman of the Supervisory
Board (Dr Dieter Zetsche) and the CEO (Mr Sebastian Ebel) is
clearly defined under German law as part of the two-tier board
structure. Therefore, no further division of their responsibilities
as well as responsibilities of the Executive Board and the
Supervisory Board is required or even possible. In addition, the
division of responsibilities within the Executive Board and the
Supervisory Board as well as its committees also results directly
from legislation and the respective terms of reference. Therefore,
the Executive Board and the Supervisory Board consider that TUI AG
lives up to the spirit and meaning of the UK CGC.
Advice and service of the Company Secretary (Provision 16)
There is no specific role of Company Secretary in German
companies. However, Executive and Supervisory Board members have
access to the Board Office of TUI AG if they need any advice on all
governance matters or other services. The Board Office acts as an
interface in corporate matters for the Executive and Supervisory
Board members and is responsible for ensuring that the requisite
processes and procedures are in place governing all Executive and
Supervisory Board meetings (i. e. preparation of agendas, minuting
of meetings and ensuring compliance with German and UK law, as
appropriate, and with recommendations for corporate governance).
The Board Office also supports the Chairman of the Supervisory
Board, the CEO, the CFO and the Chairmen of the Audit and the
Strategy Committees. Executive and Supervisory Board members also
have access to legal advice via the Group Director Legal,
Compliance & Board Office and via the Board Office. The
Supervisory Board can also approach the Executive Board directly
for specific advice on any matters. Accordingly, the Executive
Board and the Supervisory Board consider that TUI AG lives up to
the spirit and meaning of the UK CGC.
Nomination Committee - Composition and responsibilities
(Provision 17)
The role of the Nomination Committee in a typical UK company is
fulfilled in TUI AG by two Committees of the Supervisory Board:
Under the Terms of Reference for the Supervisory Board and its
Committees (which are equivalent to the Terms of Reference of a
British corporation) the Nomination Committee considers and
proposes suitable candidates as shareholder representatives to the
Supervisory Board for its election proposals to the AGM. The
Presiding Committee determines the requirements and remuneration
for any new appointments to the Executive Board and recommends
suitable candidates to the Supervisory Board. On that basis, the
Supervisory Board appoints Executive Board members. This approach
is different from the UK where all director appointments are
approved by shareholders at the AGM. Succession planning for
management levels below Executive Board is carried out by the
Executive Board.
However, as is common practice in Germany, at each AGM
shareholders are asked to decide whether they approve the actions
of the Executive Board and Supervisory Board members during the
past financial year. Since the AGM 2015, in the light of UK
practice, TUI AG has changed its procedure to allow a separate vote
on each individual Executive Board and Supervisory Board member, as
it is customary in the UK.
TUI AG intends to continue this practice. Accordingly, the
Supervisory Board considers that TUI AG lives up to the spirit and
meaning of the UK CGC to the extent practicable.
In addition to Prof. Dr Ernst, the Nomination Committee also
consists of Dr Zetsche as Committee Chairman and Dr Dönges, who is
considered non-independent until 30 October 2023. In this context,
the majority of the members of the Nomination Committee are
assessed by the Supervisory Board to be independent.
Annual re-election by shareholders at the AGM (Provision 18)
None of the Executive or Supervisory Board members is re-elected
annually. However, as noted above, in light of the UK CGC and UK
best practice, TUI AG voluntarily puts individual resolutions
approving the actions of each Executive and Supervisory Board
member to the AGM resolving on the annual financial statements for
the previous year. TUI AG intends to continue this practice.
The end of appointment periods for Supervisory Board members are
disclosed in the table from page 115.
Current curricula vitae of all Executive and Supervisory Board
members are published at www.tuigroup.com/en-en/
investors/corporate-governance.
Board performance evaluation (Principle L and Provision 21)
The performance of each individual Executive Board member is
evaluated annually by the Supervisory Board for the annual
performance-based remuneration. In this context, the Supervisory
Board also reviews the individual member's overall performance as
part of the Executive Board. However, no external performance
evaluation is done for the Executive Board.
The efficiency of the Supervisory Board is reviewed regularly,
but not annually. Each Supervisory Board member can give feedback
to the Chairman, the Deputy Chairman or the Supervisory Board as a
whole as and when appropriate or required.
The last self-assessment was conducted internally at the end of
September 2020. For this purpose, a questionnaire was distributed
to all members, in which they could give their assessment of the
effectiveness of the working methods of the Supervisory Board and
its committees. The Presiding Committee and the Supervisory Board
have subsequently dealt with the results and derived measures from
them. These primarily concerned the work of the Supervisory Board,
the organisation of the meetings and the main topics that the
Supervisory Board dealt with in more detail. The next
self-assessment is planned for the beginning of 2024 and is
accompanied externally by the consulting company ECBE (European
Center for Board Effectiveness GmbH) since September 2023. The
Company is not aware of any other relationships between ECBE and
the Company or its directors.
Nomination Committee - Section in the Annual Report (Provision
23)
For the activities of the Nomination Committee, see page 16
which is part of the Supervisory Board Chairman's letter to
shareholders. The succession planning approach is outlined on page
131. The policy on diversity and inclusion can be found on page
132. For evaluation of the performance of the Board, see above.
Composition of the Audit Committee (Provision 24)
Neither German law nor the German Corporate Governance Code
stipulates that the Chairman of the Supervisory Board should not be
a member of the Audit Committee and that the Audit Committee may
only consist of independent members. The Audit Committee consists
of Dr Zetsche as Chairman of the Supervisory Board and Dr Dönges,
who is not considered to be independent until 30 October 2023. TUI
AG therefore does not fully meet the requirements of the UK CGC,
but is of the opinion that the current composition of the Audit
Committee ensures reliable work based on experience.
Fair, balanced and understandable Annual Report & Accounts
(Provision 27)
In a German stock corporation the Executive Board is responsible
for drafting the Annual Report & Accounts (ARA). According to
section 243 (2) of the German Commercial Act (HGB) the ARA must be
clearly arranged and should present a realistic picture of the
Company's economic situation. This is equivalent to the UK Code
requirement for the ARA to be fair, balanced and understandable.
Although this assessment has not been delegated to the Audit
Committee, the Executive Board is convinced that this ARA satisfies
both requirements.
Established and operation of Remuneration Committee (Provision
32, 34 and 41)
In the German governance structure there is no separate
Remuneration Committee. The remuneration of the Executive Board is
under involvement of the employee representatives monitored and
agreed by the Supervisory Board based on recommendations from the
Presiding Committee, which is governed by the Supervisory Board
Terms of Reference.
The remuneration of the members of the Supervisory Board and the
members of the Supervisory Board Committees is governed by the
Articles of Association as resolved on by the shareholders at the
AGM.
See the Directors' Remuneration Report from page 157 for full
details on Executive and Supervisory Board member´s
remuneration.
Policy for post-employment shareholding requirements (Provision
36)
Neither German law nor the German Corporate Governance Code
requires the company to implement a policy for post-employment
shareholding requirements. According to the remuneration system
approved by the Annual General Meeting in 2021, no policy is
provided for post-employment shareholding requirements.
Notice periods for Executive Directors (Provision 39)
In accordance with the customary practice in Germany members of
the Executive Board are generally appointed for a term of three to
five years. This is not yet fully in line with the UK CGC
recommendation that notice periods or contract terms should be set
at one year or less. However, the contracts include maximum limits
on the amounts payable on termination.
See Remuneration Report from page 157.
Further information on Corporate Governance
Functioning of the Executive and Supervisory Boards
TUI AG is a company under German law. One of the fundamental
principles of German stock corporation law is the dual management
system involving two bodies, the Executive Board in charge of
managing the company and the Supervisory Board in charge of
monitoring the management of the company. TUI AG's Executive Board
and Supervisory Board cooperate closely and in a spirit of trust,
with strict separation between the two bodies in terms of their
membership and competences. Both bodies are obliged to ensure the
continued existence of the Company and sustainable creation of
added value in harmony with the principles of the social market
economy.
TUI AG's Executive Board comprised five members as at the
closing date 30 September 2023. The Executive Board is responsible
for managing the Company's business operations in the interests of
the Company. The Executive Board works on the basis of terms of
reference issued by the Supervisory Board. The allocation of
functions and responsibilities to individual Board members is
presented in a separate section.
For functions, see tables 'Supervisory Board and Executive
Board' on page 115 et seq.
In accordance with the law and the Articles of Association, the
Supervisory Board had 20 members at the balance sheet date, i. e.
30 September 2023. As the oversight body, the Supervisory Board
provided on-going advice and supervision for the Executive Board in
managing the Company in financial year 2023, as required by the
law, the Articles of Association and its own Terms of Reference.
The Supervisory Board is involved in strategic and planning
decisions and all decisions of fundamental importance to the
Company. When the Executive Board takes decisions on major
transactions, such as the annual budget, major acquisitions or
divestments, it is required by its terms of reference to seek the
approval of the Supervisory Board. The Chairman of the Supervisory
Board coordinates the work in the Supervisory Board, chairs its
meetings and represents the concerns of the body externally. The
Supervisory Board and the Audit Committee have adopted terms of
reference for their own work. The Terms of Reference of the
Supervisory Board are available on the company's website.
For further details, please refer to the Report of the
Supervisory Board on page 11.
TUI AG has taken out a D&O insurance policy for all members
of the Executive Board and Supervisory Board, providing for a
deductible for Executive Board members in accordance with the
statutory requirements of the German Stock Corporation Act. The
deductible amounts to 10 % of the loss up to the amount of one and
a half times the fixed annual compensation.
Competence Profile and the Qualification Matrix of the
Supervisory Board
TUI AG falls within the scope of the German Industrial
Co-Determination Act (MitbestG). The Supervisory Board is therefore
composed of an equal number of shareholder representatives and
employee representatives. Employee representatives within the
meaning of the Act include a senior manager (section 5 (3) of the
German Works Constitution Act) and three trade union
representatives. In financial year 2022, the Supervisory Board
updated its competence profile for the composition of the entire
body.
The competence profile of the Supervisory Board is published at
https://www.tuigroup.com/damfiles/default/
tuigroup-15/de/ueber-uns/management/Kompetenzprofil/
Kompetenzprofil_V03-13-12-2022_EN-FINAL.pdf-473db0556f8dff912a59b1b37696a1df.pdf.
Qualification Matrix of the Supervisory Board
The following individualized qualification matrix is based on
the targets for the composition of the Supervisory Board. The
competences shown are based on a self-assessment by the Supervisory
Board members. Competence is deemed to exist if at least basic
knowledge is available and thus the ability to understand the
relevant facts well and to make informed decisions on the basis of
existing qualifications, the knowledge and experience acquired in
the context of the activity as a supervisory board member, or the
further training measures regularly attended by all Supervisory
Board members.
Individualised qualification matrix of the Supervisory Board of TUI AG (as of 30 September 2023)
Dr Dieter Frank Ingrid-Helen Sonja Christian Andreas Peter Dr Jutta Prof. Dr Wolfgang
Zetsche Jakobi Arnold Austermühle Baier Barczewski Bremme Dönges Edgar Flintermann
Ernst
Membership
First 2018 2007 2020 2022 2022 2006 2014 2021 2011 2016
appointment
Current
appointment 2027 2026 2024 2026 2027 2026 2026 2025 2025 2026
until
Duration of
membership (in 5 16 3 1 1 17 9 2 12 7
years, as of
30.9.2023)
Position Chairman Deputy SHR ER SHR ER ER SHR SHR ER
Chairman
Committee
membership:
Presiding yes yes yes yes yes
Committee
Audit yes yes yes yes yes
Committee
Nomination yes yes yes
Committee
Diversity
Gender m m f f m m m f m m
Birth year 5.5.1953 18.2.1962 5.10.1968 27.2.1978 6.11.1976 15.8.1967 15.3.1960 9.5.1973 10.1.1952 4.12.1969
Age (on 70 61 54 45 46 56 63 50 71 53
30.9.2023)
Nationality German German German German German German German German German German
International yes no yes no yes yes yes yes yes yes
experience
Personal
qualification
Independence 1 yes / yes N / A yes / yes N / A yes / yes N / A N / A no / no3 yes / yes N / A
No yes yes yes yes yes yes yes yes yes yes
overboarding 2
Integrity,
commitment, yes yes yes yes yes yes yes yes yes yes
engagement
Professional
qualification
1. Tourism
2. Strategy,
innovation
3. IT,
digitalisation
4. Accounting,
auditing,
sustainability
reporting
5. Auditing
6.
Sustainability
7. Capital
market
8. Risk
management
9. Internal
control system
10. Compliance
11. Human
resources
12. Table
Sustainability continues
on next
page
1 In accordance with the GCGC and the UK Code, based on the
assessment of the shareholder representatives on TUI AG's
Supervisory Board
2 Within the meaning of Recommendation C.4 and C.5 of the
GCGC
3 Will be assessed as independent as from 1 November 2023
Individualised qualification matrix of the Supervisory Board of TUI AG (as of 30 September 2023)
Continued
from
María Stefan Janina Coline Helena Mark Anette previous Tanja Stefan
Garaña Heinemann Kugel McConville Murano Muratovic Strempel page Viehl Weinhofer
Corces
Joan
Trían Riu
Membership
First appointment 2020 2020 2021 2014 2022 2021 2009 2019 2021 2016
Current 2024 2026 2025 2024 2027 2026 2026 2024 2026 2026
appointment until
Duration of
membership (in 3 3 2 8 1 2 14 4 2 7
years, as of
30.9.2023)
Position SHR ER SHR SHR SHR ER ER SHR ER ER
Committee
membership:
Presiding yes
Committee
Audit Committee yes yes yes
Nomination
Committee
Diversity
Gender f m f f f m f m f m
Birth year 4.3.1970 14.4.1979 12.1.1970 21.7.1964 12.7.1966 29.6.1973 28.11.1966 10.7.1983 24.3.1986 31.8.1974
Age (on 30.9.2023) 53 44 53 59 57 50 56 40 37 49
Nationality Spanish German German Australian Spanish German German Spanish German Austrian
International yes yes yes yes yes yes no yes yes yes
experience
Personal
qualification
Independence1 yes / N / A yes / yes yes / yes yes / yes N / A N / A no / no N / A N / A
yes
No overboarding2 yes yes yes yes yes yes yes yes yes yes
Integrity,
commitment, yes yes yes yes yes yes yes yes yes yes
engagement
Professional
qualification
1. Tourism
2. Strategy,
innovation
3. IT,
digitalisation
4. Accounting,
auditing,
sustainability
reporting
5. Auditing
6. Sustainability
7. Capital market
8. Risk management
9. Internal
control system
10. Compliance
11. Human
resources
12. Sustainability
1 In accordance with the GCGC and the UK Code, based on the
assessment of the shareholder representatives on TUI AG's
Supervisory Board
2 Within the meaning of Recommendation C.4 and C.5 of the
GCGC
3 Will be assessed as independent as from 1 November 2023
Independence of the Supervisory Board members
As of the balance sheet date, the Supervisory Board on the
shareholder side has eight independent members according to their
assessment. The names of these members are listed in the
qualification matrix. Further information on the aspects taken into
account in the assessment of independence can be found on page
121.
The company has no controlling shareholder.
Members of TUI AG's Audit Committee with expertise in accounting
and auditing (Recommendation D.3 of the GCGC)
Prof. Dr Edgar Ernst has, among other things, expertise in the
field of accounting and in the field of auditing due to his
activities as Chief Financial Officer of Deutsche Post AG, as
President of the German Financial Reporting Enforcement Panel and
due to his memberships in domestic supervisory boards. Further
information, in particular on his activities in these areas, can be
found in his curriculum vitae on the Company's website
(https://www.tuigroup.com/
damfiles/default/tuigroup-15/de/ueber-uns/management/lebenslaeufe-de0/
lebenslaufe-de-neu/aufsichtsrat-de-neu/Ernst_Edgar-Lebenslauf-de_en/Ernst_SB_Curriculum-Vitae_
04.10.2023.pdf-af2cdbb09cda997cc2549359db92a68f.pdf).
His expertise in the field of accounting also includes, in
particular, knowledge and experience in the application of
accounting principles and internal control and risk management
systems. His expertise in the field of auditing also includes, in
particular, knowledge and experience in auditing of financial
statements. Accounting and auditing also include sustainability
reporting and its auditing.
With regard to the Chairman of the Audit Committee, Prof. Dr
Edgar Ernst, the Supervisory Board is of the opinion that he is
independent from the Company and the Executive Board (for the
independence of the other members of the Audit Committee, see page
121).
Mr Christian Baier has expertise in the field of accounting and
in the field of auditing due to his professional career and in
particular due to his function as Chief Financial Officer of Metro
AG (until July 2023). Further information, in particular on his
activities in these areas, can be found in his curriculum vitae on
the Company's website
(https://www.tuigroup.com/damfiles/default/tuigroup-15/en/about-us/management/lebenslauefe-
en/aufsichtsrat-en/Baier_SB_Curriculum-Vitae_31.05.2022.pdf-e56d4eedf2399c6c8f58ca8cb0854609.pdf).
His expertise in the field of accounting also includes, in
particular, knowledge and experience in the application of
accounting principles and internal control and risk management
systems. His expertise in the field of auditing also includes, in
particular, knowledge and experience in the auditing of financial
statements.
Since Metro AG has also been publishing a non-financial
statement for several years, which is prepared taking into account
the Global Reporting Initiative (GRI) standards on sustainability
reporting and the UN Global Compact, his expertise in the field of
auditing also includes sustainability reporting and its audit.
Dr Jutta Dönges has expertise in the field of accounting and in
the field of auditing due to her professional career and in
particular because of her function as CFO at Uniper SE as well as
managing director of the Federal Republic of Germany - Finance
Agency GmbH (until 31 October 2022) as well as due to her several
years of membership in domestic supervisory boards. Further
information, in particular on her activities in these areas, can be
found in her curriculum vitae on the Company's website
(https://www.tuigroup.com/damfiles/default/tuigroup-15/en/about-us/management/
lebenslaufe-en-neu/aufsichtsrat-en-neu/
Do-nges_SB_Curriculum-Vitae_05.12.2022.pdf-70e9299c9ba0a333f8c6452cb23ad30d.pdf).
Her expertise in the field of accounting also includes, in
particular, knowledge and experience in the application of
accounting principles and internal control and risk management
systems. Her expertise in the field of auditing includes, in
particular, knowledge and experience in the auditing of financial
statements. This includes sustainability reporting and its audit,
whereby this is oriented, among other things, to the standards of
the Global Reporting Initiative (GRI).
Training and professional development measures
The members of the Supervisory Board take responsibility for
undertaking any training or professional development measures
necessary to fulfil their duties, for example on issues of
corporate governance or changes in the legal framework and they
receive support in this respect from the company. The company
regularly informs its members about current changes in the
legislation as well as about relevant topics relating to the
company. New members of the Supervisory Board are given the
opportunity to be introduced in detail to key issues of the
Supervisory Board as part of the onboarding programme. In addition,
they have meetings with members of the Executive Board in order to
receive further information on their respective areas of
responsibility.
Conflicts of interest
Executive and Supervisory Board members are bound to observe the
TUI AG's best interests. In addition, Executive Board members are
subject to comprehensive non-compete clauses throughout the
duration of their appointment. In the completed financial year
2023, there were no conflicts of interest requiring disclosure to
the Chairman of the Supervisory Board or the Executive Board. None
of the Executive Board or Supervisory Board members have a board
role or a consultancy contract with one of TUI's competitors.
As a precautionary measure, Mr Joan Trían Riu abstained from the
vote of the Supervisory Board in its meeting of 4 July 2023 on the
resolution to establish a joint venture with the Riu Family.
Moreover, no current member of the Executive Board has been
appointed and no member of the Supervisory Board has been elected
pursuant to any arrangement or understanding with major
shareholders, customers, suppliers or others. There are no family
relationships between any current members of the Executive Board or
Supervisory Board.
Specifications pursuant to sections 76 (3a) and (4), 96 (2), 111
(5) of the German Stock Corporation Act
45 % of the Supervisory Board members were women and 55 % were
men at the balance sheet date. The Supervisory Board was therefore
compliant with section 96 (2) sentence 1 of the German Stock
Corporation Act. Neither the shareholder nor the employee
representatives of the Supervisory Board have objected with regard
to overall compliance in accordance with section 96 (2) sentence 2
of the German Stock Corporation Act.
In August 2021, the Second Management Positions Act - FüPoG II -
came into force. According to this law, at least one woman and at
least one man must be a member of the Executive Board of a listed
company with equal co-determination and with more than three
members on the Executive Board. The company has already complied
with this requirement in the reporting period with the membership
of Ms Sybille Reiss.
The Executive Board resolved, in line with section 76 (4) of the
German Stock Corporation Act, that women should account for 25 % of
executives at the level immediately below the Executive Board and
30 % at the second level below the Executive Board. The cut-off
date for both was 30 September 2023. For this reason, TUI AG has
implemented various measures aimed at increasing the proportion of
women on a long-term and sustainable basis over the past years.
This includes, among other things, the promotion of women in talent
programmes and specifically addressing them in the recruitment
process. In addition, at least one female should be on the
shortlist in the recruitment process for positions in the Senior
Leadership Team. Despite all the measures taken, the suitability
and qualification of candidates for filling vacant positions are
still of primary importance. With a 30 % proportion of women in the
second management level, these measures are already having an
effect and have led to the target for FY23 being met. The target of
25 % in the first management level below the Executive Board was
not achieved at 14 %. As a new target for the period up to 30
September 2026, the Executive Board has decided that the proportion
of women in the first management level below the Executive Board
should now be 30 % instead of the previous 25 % and that the
proportion of women in the second management level below the
Executive Board should remain at 30 %.
Shareholders and Annual General Meeting
TUI AG shareholders exercise their co-determination and
monitoring rights at the AGM, which takes place at least once a
year. The AGM takes decisions on all statutory matters, and these
are binding on all shareholders and the Company. For voting on
resolutions, each share confers one vote.
All shareholders registering in due time are entitled to
participate in the AGM. Shareholders who are not able to attend the
AGM in person are entitled to have their voting rights exercised by
a shareholder association, one of the representatives provided by
TUI AG and acting on the shareholders' behalf in accordance with
their instructions, or some other proxy of their own choosing.
Shareholders also have the opportunity of authorising the
representative provided by TUI AG via the web or by postal vote in
the run-up to the AGM. Shareholders can, moreover, register for
electronic dispatch of the AGM documents.
The invitation to the AGM and the reports and information
required for voting are published in accordance with the provisions
of the German Stock Corporation Act and provided in German and
English on TUI AG's website. During the AGM, the presentations by
the Chairman of the Supervisory Board and the Executive Board
members can be followed live over the Internet.
Statement pursuant to Provision 4 UK CGC
At the AGM of TUI AG on 14 February 2023, no resolution received
20 % or more against votes.
Risk management
Good corporate governance entails the responsible handling of
commercial risks. The Executive Board of TUI AG and the management
of the TUI Group have comprehensive general and company-specific
reporting and monitoring systems available to identify, assess and
manage these risks. These systems are continually developed,
adjusted to match changes in overall conditions and reviewed by the
auditors. The Executive Board regularly informs the Supervisory
Board about existing risks and changes to these risks. The Audit
Committee deals in particular with monitoring the accounting
process, including reporting, the effectiveness of the internal
control and risk management systems and the internal auditing
system, compliance and audit of the annual financial statements.
The chairman of the Audit Committee reports to the Supervisory
Board on the work of the committee at the next Supervisory Board
meeting at the latest.
More detailed information about risk management in the TUI Group
is presented in the Risk Report. It also contains the report on the
accounting-related internal control and risk management system
required in accordance with the German Commercial Code (sections
289 (5), 315 (2) no. 5 HGB).
Risk Report see page 35.
Transparency
TUI provides immediate, regular and up-to-date information about
the Group's economic situation and new developments to capital
market participants and the interested public. The Annual Report
and the Interim Reports are published within the applicable
timeframes. The Company publishes press releases and ad hoc
announcements, if required, on topical events and any new
developments. Moreover, the company website at www.tuigroup.com
provides comprehensive information on TUI Group and the TUI
share.
The scheduled dates for the principal regular events and
publications - such as the AGM, Annual Report and Interim Reports -
are set out in a financial calendar. The calendar is published well
in advance and made permanently accessible to the public on TUI
AG's website.
Directors' dealings
The Company was informed by Mr Andreas Barczewski, Mr David
Burling, Mr Sebastian Ebel, Mr Wolfgang Flintermann, Mr Stefan
Heinemann, Mr Frank Jakobi, Mr Mathias Kiep, Mr Peter Krueger, Ms
Sybille Reiss, Ms Anette Strempel und Dr Dieter Zetsche of
notifiable purchase and sale transactions of TUI AG shares or
related financial instruments by directors (directors' dealings or
managers' transactions) concerning financial year 2023. Details are
provided on the Company's website. It should be noted that there
are different thresholds for reporting requirements in Germany and
the UK of 20,000 EUR (Germany) and 5,000 EUR (UK).
Purchase and sales transactions by members of the boards are
governed by the Group Manual Share Dealings by Restricted Persons,
approved by the Executive Board and the Supervisory Board,
alongside corresponding statutory provisions. The Group Manual
Share Dealings by Restricted Persons stipulates above all an
obligation to receive a clearance to deal for transactions with TUI
AG's financial instruments.
Accounting and auditing
TUI AG prepares its consolidated financial statements and
consolidated interim financial statements in accordance with the
provisions of the International Financial Reporting Standards
(IFRS) as applicable in the European Union. The statutory annual
financial statements of TUI AG, which form the basis for the
dividend payment, are prepared in accordance with the German
Commercial Code (HGB). The consolidated financial statements are
prepared by the Executive Board, audited by the auditors and
approved by the Supervisory Board. The interim report is discussed
between the Audit Committee and the Executive Board prior to
publication. The consolidated financial statements and the
financial statements of TUI AG were audited by Deloitte GmbH
Wirtschaftsprüfungsgesellschaft, Hanover, the auditors elected by
the 2023 Annual General Meeting. The audit was based on German
auditing rules, taking account of the generally accepted auditing
standards issued by the German Auditors' Institute as well as the
International Standards on Auditing. It also covered the risk
detection system. A review pursuant to Listing Rule 9.8.10 R (1)
and (2) was carried out.
See audit opinion by the auditors on page 288.
The condensed consolidated interim financial statement and
management report as of 31 March 2023 was reviewed by the auditors.
In addition, a contractual agreement was concluded with the
auditors to the effect that the auditors will immediately inform
the Supervisory Board or the Audit Committee about all findings and
issues of importance for its tasks which come to the knowledge of
the auditors during the performance of the audit. Furthermore, it
was agreed with the auditors that they inform the Supervisory Board
or the Audit Committee and note in the audit report if during the
performance of the audit, any facts were identified that indicate
an inaccuracy in the Declaration of Compliance regarding the
recommendations of the GCGC issued by the Executive Board and
Supervisory Board. There were no grounds to provide such
information in the framework of the audit of financial year
2023.
Engagement with our stakeholders
Under the UK CGC, TUI AG is required to provide information on
how it complies with the requirements of section 172 of the
Companies Act 2006, including how it takes into account the
interests of key stakeholders in discussions and decisions.
The Company considers key stakeholders to be customers,
employees, shareholders and other financial stakeholders, suppliers
and Non-governmental organisations.
Further details on how the company engages with particular
stakeholders can be found on the following pages of this Annual
Report:
-- Customers - see page 98
-- Employees - see page 91
-- Shareholders and other financial stakeholders - see pages 113
and 188
-- Suppliers - see page 84
-- Non-governmental organisations - see page 90
Diversity concepts for the composition of the Executive Board
and Supervisory Boards
Diversity concept for the composition of the Executive Board
The diversity concept for the composition of the Executive Board
takes into account the following diversity aspects:
(a) Age:
As a rule, the employment contracts of members of the Executive
Board end once the standard retirement age for statutory retirement
insurance has been reached (currently 67).
(b) Gender:
The Executive Board should include one woman.
(c) Educational / professional background:
The necessity for a variety of educational and professional
backgrounds already arises from the obligation to manage the
company in accordance with the law, the company's articles of
association and its terms of reference. In addition, the Executive
Board as a whole, through its individual members, should possess
the following essential background qualities:
-- management experience, some of which ideally has been
acquired abroad, and intercultural competence forsuccessful
management and motivation of global teams;
-- in-depth practical experience in stakeholder dialogue (i. e.
with managers and employees, including theirrepresentative bodies,
with shareholders and the public);
-- experience in IT management and an understanding of
digitalisation of vertically integrated value chains;
-- profound experience in value-driven, KPI-based strategy
development and implementation and corporategovernance;
-- profound knowledge of the intricacies and requirements of the
capital market (shareholder management);
-- knowledge of accounting and financial management
(controlling, financing);
-- in-depth understanding of and experience with change
management.
Goals of the diversity concept for the composition of the
Executive Board
The standard retirement age on the one hand enables incumbent
members of the Executive Board to contribute their professional and
life experience for the good of the company for as long a time as
possible. On the other hand, adherence to the standard retirement
age is intended to promote regular rejuvenation of the board.
Inclusion of both genders in Executive Board work is on the one
hand an expression of the conviction of the Supervisory Board that
mixed-gender teams lead to the same or better outcomes as teams
with representation from only one gender. But it is also the
logical continuation of the gender diversity measures implemented
by the Executive Board within the wider company, which aim to
increase the proportion of women in leadership roles. These
measures are only to be applied and implemented in a credible
manner if the Executive Board does not consist solely of male
members ('proof of concept').
A variety of professional and educational backgrounds is
necessary on the one hand to properly address the tasks and
obligations of the law, the company's articles of association and
its terms of reference. In addition, it is the view of the
Supervisory Board that they are a guarantee of ensuring diverse
perspectives on the challenges and associated approaches to
overcoming them that are faced in the day-to-day work of the
company. International management experience is of particular
importance. Without such skill and experience with integrating,
leading and motivating global teams, it is impossible to take into
consideration the different cultural backgrounds of managerial
staff and the workforce as a whole.
Long-term succession planning for the Executive Board
A key aspect of applying the diversity concept to the
composition of the Executive Board is inclusion of the Supervisory
Board within the corporate organisation, as is prescribed by law,
the company's articles of association and its terms of reference.
This ensures the Supervisory Board is familiar with the strategic,
economic and actual situation of the company.
In its role as supervisor of the management of the Executive
Board, the Supervisory Board of TUI AG makes decisions on the
allocation of business responsibilities within the Executive Board,
appointments to the Executive Board and thus also workforce and
succession planning within the Executive Board in line with
recommendation B.2 of the GCGC. As part of that workforce and
succession planning, the Presiding Committee or the Supervisory
Board itself regularly meets with the Executive Board or its
members to discuss suitable internal succession candidates for
Executive Board positions (short-term, medium-term and long-term
scenarios). The contract terms and renewal options for current
Executive Board members are discussed, as well as possible
successors. As part of these Supervisory Board and Committee
meetings, or in preparation for them, members of the Supervisory
Board have the opportunity to meet up with so-called high
potentials within the Group in a professional and personal setting.
The Presiding Committee and Supervisory Board make their own
deliberations about these matters and also discuss them in the
absence of the Executive Board. This includes evaluation and
possible inclusion of external candidates for Executive Board
positions in the selection process. In all of these deliberations,
the above-mentioned diversity aspects of Executive Board
appointments play a part in the decision-making of the Supervisory
Board. Long-term succession planning is primarily oriented towards
the corporate strategy and takes into account the diversity concept
defined by the Supervisory Board. The Supervisory Board also asks
the Executive Board to report on current progress and
implementation of family-friendly concepts and concrete measures
for promotion of women (e. g. at least one woman on the final
shortlist for any new or replacement appointments to roles within
the senior leadership team).
Results achieved in financial year 2023
With effect from 1 October 2022, Mr Sebastian Ebel was appointed
to succeed Mr Friedrich Joussen as Chairman of the Executive Board
of TUI AG. In this connection, Mr Mathias Kiep was appointed as a
member of the Executive Board as successor to Mr Ebel with effect
from 1 October 2022. Mr Kiep took over the Finance Ressort. In the
opinion of the Supervisory Board, Mr Ebel and Mr Kiep contribute to
the diversity of the Executive Board through their professional
careers, their wide-ranging international experience and respective
professional backgrounds.
Mr Frank Rosenberger, Executive Board Member for IT and Future
Markets, has decided to leave the Group on 31 October 2022. Mr
Rosenberger had been with TUI since 2015 and had been responsible
for Future Markets and the Group's digitalisation on the company's
Executive Board since 2017. Under his responsibility, a global
system for TUI Tour operators was launched and the digitalisation
of the company was significantly advanced.
The reduction in the number of Executive Board members also
required a reorganisation of responsibilities in the management
team. The CIO with his central IT functions of the TUI Group has
been located in the direct area of responsibility of CEO Sebastian
Ebel. The other IT units are interlinked with the operational areas
to enable fast and efficient implementation of the digitalisation
strategy. Peter Krueger is fully responsible for the Holiday
Experiences segment at Executive Board level.
The current composition of the Executive Board meets all the
requirements of the diversity concept. The Executive Board members
cover a comprehensive range of knowledge and experience as well as
educational and professional backgrounds and have international
experience. In addition, with Ms Sybille Reiss as a member of the
Executive Board, the legal requirement that at least one woman
should be a member of the Executive Board was met in the reporting
period. Different age groups are represented on the Executive
Board. More information on all members of the Executive Board can
be found in the CVs on the Company's website and in the
communication on the occasion of the appointment decisions of the
Supervisory Board.
Diversity concept for the composition of the Supervisory
Board
The Supervisory Board revised and updated objectives for its
composition in addition to the competence profile in the 2023
financial year. In accordance with the applicable legal
requirements, the Supervisory Board of TUI AG shall be composed in
such a way that its members as a whole have the knowledge and
professional experience required to properly perform their duties.
In this context, sufficient diversity shall be ensured. This
includes in particular cultural and ethnic origin, gender,
nationality and professional and life experience as well as age. A
gender quota of 30 % is to be guaranteed. The standard age limit
for election to the Supervisory Board is 68 years.
Goals of the diversity concept for the composition of the
Supervisory Board
The goals set with regard to the composition of the Supervisory
Board reflect the demands placed on the advisory and supervisory
body to perform its task in a globally operating company with a
challenging competitive environment. For example, multicultural and
international experience is just as important as knowledge of the
value and success drivers of the sector. In all of this, the impact
and cultural features of the so-called stakeholder approach of a
social market economy must be taken into account, which is ensured
by the codetermination of employee representatives on the
Supervisory Board as well. For the shareholder side on the
Supervisory Board, the Nomination Committee also ensures that
mandatory and voluntary targets are met with regard to the
composition of the Supervisory Board. As part of the regularly
conducted efficiency reviews, the Supervisory Board also undergoes
a self-assessment, which includes aspects of its composition.
Results achieved in financial year 2023
The Supervisory Board is of the opinion that it meets the
composition targets and fills out the competence profile and the
diversity concept. The status of implementation of the competence
profile and composition targets has been published in the form of a
qualification matrix. The competence profile of TUI AG's
Supervisory Board is published at
www.tuigroup.com/en-en/investors/corporate-governance/management.
The qualification matrix can be found at page 126.
The diversity of professional and educational backgrounds of the
individual members of the board is also evident from the CVs of
Supervisory Board members published on the corporate website.
Diversity in the Executive Board and Supervisory Board as well
as in the Executive Management of TUI AG
Pursuant to LR 9.8.6 R (9) of the FCA Listing Rules, the
Executive Board and the Supervisory Board confirm that, as at 30
September 2023, the Company has partially met the targets set out
in this provision by at least 40 % of the members of the Executive
Board and the Supervisory Board were women and at least one member
of the Executive Board or the Supervisory Board was from an ethnic
minority. The Company did not meet the target in relation to the
requirement that at least one of the named executive positions (the
Chairman of the Supervisory Board, the Chief Executive Officer, the
Senior Independent Director or the Chief Financial Officer) should
be held by a woman. The Company recognises the importance of
diversity and its long-term goal is to further improve diversity on
its boards. This is taken into account primarily in the context of
succession planning for the boards.
Since 30 September 2023, there have been no changes in the
Executive Board as well as the Supervisory Board that would affect
the company's ability to achieve the two objectives mentioned
above.
Data on gender and ethnicity was collected directly from board
members. Members were asked to indicate their ethnicity using the
categories in the table below.
In accordance with LR 9.8.6 R (10) of the FCA Listing Rules, the
following table contains data on the ethnic origin and gender of
the members of the Executive Board and the Supervisory Board as
well as the Executive Management of the Company as of 30 September
2023.
Gender and ethnic background of board members
Number of Percentage Number of senior positions on the Number in Percentage of
board of the board board (CEO, CFO, SID and Chair) executive executive
members management management
Gender
Men 15 60 % 3 7 100 %
Women 10 40 % 0 0 0 %
Not specified / prefer - - - - -
not to say
Ethnic Background
White British or other
White 24 96 % 3 7 100 %
(including
minority-white groups)
Mixed / Multiple - - - - -
Ethnic Groups
Asian / Asian British - - - - -
Black / African /
Caribbean / Black 1 4 % - - -
British
Other ethnic group, - - - - -
including Arab
Not specified / prefer - - - - -
not to say
Description of the main features of the internal control and
risk management system
TUI Group's internal control system comprises all systematically
designed rules within the Group that serve to methodically manage
operational, financial and compliance-related risks. These rules
may result from published statements or take the form of policies,
work instructions, process descriptions or risk control matrices. A
Group-wide framework is in place for the creation, approval,
revision and communication of these rules. With its Integrity
Passport, TUI Group commits to implementing its Group-wide Code of
Conduct that sets minimum standards and provides guidance on how to
deal with ethical and legal challenges in day-to-day work, and
provides orientation for conflict situations.
On that basis, the business units define an appropriate
framework of processes and rules where necessary for the
criticality of the process in question. These rules may vary from
business unit to business unit as the process of processing the
transactions involves different systems, workflows or volumes. For
certain risks, addressed through a uniform Group framework, TUI has
established central functions, operating as a 'second line' for
their area, in order to create appropriate Group-wide standards and
support or monitor implementation of these standards.
A Group function has also been established for the area of
sustainability. For years, TUI Group has collected certain
sustainability-related indicators for management and reporting
purposes in the framework of separate sustainability reports or the
non-financial statement. The methodologies used to gather this data
have been published. These ensure uniform understanding and
collection throughout the Group. In the period under review, a
reporting software specifically designed for non-financial data
points was implemented, further enhancing the maturity of the
internal control system in this field.
To ensure that our businesses are scalable, almost all business
processes are supported by IT solutions. Where possible and
appropriate, we use the controls integrated in these applications
or services. This offers greater security and efficiency in
implementation compared with manual controls. The IT solutions
themselves are protected by a Group-wide framework of general IT
controls. The internal control system is completed by a set of
manual process controls to prevent or detect errors.
We have a clear approach for identifying and mitigating
information security risks. TUI undergoes external auditing, has an
IT security risk insurance policy in place and provides a training
and compliance programme. Additionally, the Audit Committee is
updated on TUI's risk position on a regular basis.
In the case of business processes, the respective process owners
are responsible for the effectiveness of the controls put in place;
in the case of Group-wide control frameworks, the respective second
line is responsible. Depending on the risk assessment, they use a
different degree of monitoring intensity.
As an independent third line, Internal Audit reviews business
processes, including IT solutions, according to its own risk
assessment and provides recommendations to enhance the
effectiveness and efficiency of processes and controls.
The Supervisory Board of TUI AG, in particular the Audit
Committee, is involved in TUI Group's internal monitoring system
with process-independent auditing activities.
Our Risk Report presents the key elements of our risk management
system.
Details in our Risk Report, page 35.
The internal control system and the risk management system are
dynamic systems that are continuously adapted in response to
changes in the business model, the nature and scope of business
transactions or responsibilities. As a result, there is potential
for improvement in terms of both the appropriateness (lack of
suitable controls) and the effectiveness (inadequate execution) of
controls, both from the reviews carried out by the second line,
from internal audit engagements, and from the audit activities of
the external auditor. In addition, potential for improvement may
also arise from compliance incidents. In our overall assessment of
these management systems, we find that none of the potential
improvements identified in the period under review speak against
the appropriateness and effectiveness of the two management
systems.
However, there can be no absolute certainty, despite the
internal control and risk management systems in place, that the
controls will detect every single process weakness or, in
particular, that newly emerging material risks will always be
immediately identified and effectively addressed.
Disclosure pursuant to UK Listing Rule LR 9.8.6 Task Force on
Climate-related Financial Disclosures (TCFD)
Climate change is one of the greatest challenges of our time.
TUI recognises the risk posed to its business by climate change
from both physical changes in the climate and the transition to a
low-carbon economy. TUI is committed to contributing to the
transition and mitigating climate-related risks for its business.
As a company listed in the Premium Segment of the Main Market of
the London Stock Exchange, TUI is required pursuant to Listing Rule
LR 9.8.6 to make disclosures in relation to the Recommendations of
the Financial Stability Board's Task Force on Climate-related
Financial Disclosures (TCFD). The TCFD provides a framework to
improve the disclosure of consistent, comparable, reliable and
clear climate-related financial information so that investors can
make better capital allocation decisions in support of the
transition to a low-carbon economy.
In financial year 2022, TUI aligned its climate-related
disclosures with the TCFD Recommendations for the first time to
communicate the potential effects of climate change on its
business. The disclosure for financial year 2023 builds on our
prior year disclosure and has been enhanced to better align with
the TCFD Recommendations. We are committed to complying with the
recommendations and recommended disclosures of the TCFD, taking
into account the TCFD All Sector Guidance, and we consider the
disclosures set out on the following pages to be consistent with
these guidelines.
-- In financial year 2023, TUI conducted a climate scenario
analysis to identify and analyse the potentialimpact of
climate-related risks and opportunities on its business model, and
assess the resilience of its strategy(TCFD Recommendations:
Strategy a., b. and c.).
-- In financial year 2023, TUI embedded the identification,
assessment and management of material individualclimate-related
risks into existing risk management processes (TCFD
Recommendations: Risk Management a., b. andc.).
-- In 2023, TUI's near-term science-based emissions reduction
targets were published following thesuccessful external validation
by the Science Based Targets Initiative (SBTi). These targets are
included in TUI's 2023 TCFD report (TCFD Recommendations: Metrics
and Targets c.) and TUI continues to disclose on its
keyclimate-related metrics (TCFD Recommendations: Metrics and
Targets b. and c.).
The following statement follows the structure of the TCFD
Recommendations, covering Governance, Strategy, Risk Management,
and Metrics and Targets. Our disclosures on these four thematic
areas will continue to evolve and mature over time alongside our
strategy and the evolution of the risks and opportunities
themselves.
governance
TUI has a governance structure in place that ensures that
sustainability issues, along with climate-related risks and
opportunities, are assessed and actioned at all levels.
See page 82 for the governance structure in the Non-financial
declaration.
TCFD Recommendation TUI Approach
The Group Executive Committee (GEC) has ultimate oversight of climate-related issues and is
responsible for reviewing climate-related risks and opportunities, strategy, measures, and
target-setting. At the GEC level, the Group Chief Sustainability Officer (CSO) as a member of
the GEC is responsible for reporting on sustainability and climate-related issues for TUI.
The CSO informs the GEC on sustainability issues on a monthly basis. The Group Sustainability
a) Describe the Director regularly reports into the CSO, which is the most appropriate and direct line of
Board's oversight reporting to raise climate-related issues to the highest level within the business. Moreover,
of climate-related the Executive Board (all being members of the GEC) also has the final oversight of the
risks and non-financial declaration that includes the climate / environmental strategy, organisation,
opportunities. management, measures and targets. By taking into the provided risk information, the Executive
Board considers climate-related issues when reviewing and guiding strategy, major plans of
action, risk management policies, annual budgets, and business plans as well as setting the
organization's performance objectives, monitoring implementation and performance, and
overseeing major capital expenditures, acquisitions, and divestitures. The highest monitoring
body in sustainable management is the Supervisory Board which oversees the work done by the
Executive Board.
b) Describe The GEC manages TUI's business strategically, sets the Group's strategic direction and
management's role in long-term objectives for sustainable development, and signs off the Group's Sustainability
assessing and managing Agenda. A team of experienced sustainability professionals are working in close collaboration
climate-related risks with senior management to ensure that TUI's business and sustainability focus areas are
and opportunities. aligned. The Group Sustainability Director heads up the Group Sustainability team.
governance
TCFD TUI Approach
Recommendation
Our group sustainability team, led by the Group Sustainability Director, is responsible for the
implementation of the Sustainability Agenda across TUI and along its supply chain. The GEC is
regularly updated on our performance in delivering the Sustainability Agenda and tackling other key
sustainability issues. Regular meetings are also held with the Group Risk Oversight Committee (ROC)
to review climate-related and sustainability risks and discuss any changes, either internal or to
the external environment, which affect the business exposure.
To incentivise management to achieve climate-related targets, KPIs are linked to monetary rewards.
TUI operates a discretionary bonus scheme for senior and middle management. It is designed to reward
employees in line with both financial performance and personal contribution to delivering
successfully against our strategy.
STRATEGY
Climate change is an urgent global challenge that requires a strategic response. The tourism industry in which TUI
operates faces significant impacts from climate change. As temperatures rise, the attractiveness of certain
destinations will decline, and the biodiversity loss will make certain destinations less attractive. The sector also
faces impacts of a more general nature: more cancellations from extreme weather-related events, increased risk of
stranded assets, as well as changes in policy and customer preferences. Climate change also presents an opportunity
for TUI - besides extending touristic seasons in summer destinations also to innovate in new types of tourism, to
diversify to new regions, and to engage customers and other stakeholders along the business transformation process.
As part of our strategic and financial planning process, we have analysed various industry and macro trends to model
the expected development of TUI and the tourism industry as a whole. We clearly see sustainability as a major trend,
largely driven by climate-related market and policy risks (e. g., changing customer behavior, emissions-based taxes
and fees, and increasing regulations for aircraft and cruise ships). In financial year 2023, TUI 's 2030 emission
reduction targets have been approved by the SBTi. Priorities and strategic directions from TUI's Sustainability
Agenda 'People, Planet, Progress' take into account current challenges, global scenarios, and regulatory developments
such as the EU Green Deal. These priorities were built into our midterm strategic and financial plan. To better
identify and assess the impact of climate change on our financial performance and business model, we have conducted a
qualitative and quantitative climate risk assessment for the first time in financial year 2023.
Two scenarios were considered in the climate risk assessment:
-- A high emissions scenario to assess the impact of significant changes in the physical climate, which is
based on the Intergovernmental Panel on Climate Change (IPCC) Representative Concentration Pathway 8.5 (IPCC
RCP8.5) and the International Energy Agency (IEA) Stated Policies Scenario. This is aligned with global warming
of approximately 4.3°C by the year 2100.
-- A low emissions scenario to assess the impact of significant socioeconomic changes to achieve a
low-carbon economy, which is based on IPCC RCP2.6 and the IEA Net Zero Scenario. This is aligned with global
warming of approximately 1.5°C by the year 2100.
A number of assumptions underpin these scenarios regarding changes to the frequency and intensity of weather-related
events, economic growth, technology development, and the development of energy and carbon prices.
The identified risks and opportunities across the different combinations of scenarios and time horizons were first
assessed qualitatively to identify the most relevant climate-related risks and opportunities for TUI. Based on the
results of this qualitative analysis, a number of risks and opportunities were then subject to more detailed analysis
to better understand the potential financial impacts.
STRATEGY
TCFD Recommendation TUI Approach
The following climate-related risks and opportunities have been identified by TUI
over the short, medium and long term, where short term is defined as the period
up to 2030 (aligned with TUI's science-based targets), medium term as the period
up to 2040, and long term as the period up to 2050 (when TUI aims to achieve
net-zero emissions across our operations and supply chain). Climate-related
impacts are divided into two categories:
-- Transition: Socioeconomic changes related to the transition to a
low-carbon economy including policy, legal, technology and market changes.
-- Physical: Physical changes in the climate including event-driven
a) Describe the climate-related (acute) changes such as storms, fires and floods, and long term (chronic)
risks and opportunities the changes such as increased temperature.
organisation has identified over
the short, medium, and long term. Given the nature of TUI's business model, most of the below listed risks and
opportunities apply to TUIs business segments and geographies. Modest variations
in their significance for each segment are described below.
TUI has undertaken a qualitative assessment of all below summarized climated
related risks and opportunities. In additon, TUI has performed a high-level
quantitative assessment for eight risks and opportunities. This assessment has
shown the risks to be immaterial for financial planning, which was confirmed by a
sensitivity analysis. Further information on the effect of climate-related risks
on the useful lives and the measurement of assets can be found in the Notes,
chapter 'Key judgements, assumptions and estimates', page 200 of this Annual
Report.
Strategy
TCFD TUI Approach
Recommendation
TCFD Risk Description Impact Management
Type
Transition
As an energy-intensive
company, regulatory
Increased costs due changes, such as to carbon -- TUI is committed to
to the introduction pricing through emissions decarbonising its business, and
of new, or trading systems, has set ambitious near-term
extension of emissions-based taxes and science-based emissions reduction
existing, carbon fees, and energy and targets validated by the SBTi.
pricing mechanisms emissions regulation, pose
(including a significant cost risk in -- To achieve these, TUI
pass-through of the short to medium term airlines procures
higher costs by for TUI. state-of-the-art aircraft,
Policy & suppliers), and new implements operational
Legal energy and There is a risk for TUI's efficiencies (including route
emissions airline and cruise optimisation), and will increase
regulations. operations of stricter the use of SAF. TUI already has
regulations and cooperation agreements in place
Increasing restrictions related to to promote the production and
regulations and energy and emissions in supply of SAF.
b) Describe the restrictions the short to medium term. -- TUI Cruises invests in
impact of targeting the Already today, there are energy efficiency at ship
climate-related airline and cruise operating restrictions at operations, fuel-saving route
risks and industry, leading certain airports based on optimisation, shore power in
opportunites on to reduced revenue sustainability criteria. ports and alternative fuels, such
our business, and / or stranded and the ban of non- as sustainable biofuels, bio-LNG
strategy, and assets. sustainable fuel types and green methanol. The three
financial while sailing in certain newbuilds coming into the fleet
planning. maritime areas. by 2026 will not use heavy fuel
oil. Mein Schiff 7 will enter
Although it is expected service in 2024 and will run on
that future fuels will lower-emission marine diesel and
continue to gain momentum be equipped with catalytic
and that production converters and a shore power
capacity will dramatically connection. In addition, the ship
increase in the short to will also be able to run on green
Costly or medium term, there is a methanol in the future. In 2024
unavailable future risk that demand will and 2026, two ships will follow,
fuels and outpace supply resulting which will be operated with LNG.
technologies in low availability and LNG serves as a bridge technology
resulting in higher inflated prices. until bio-LNG is available, which
Technology costs, or will be produced either from
preventing further In the medium term, there biogenic sources or synthetically
decarbonisation and is a risk that low carbon from renewable energy.
compliance with technologies are not -- TUI Hotels & Resorts is
regulations. available to support TUI's focused on renewable energy and
path to net zero. Whilst resource-saving operational
there are trials e. g., in practices to reduce hotel
battery or fuel cell emissions as far as possible.
aircraft and ships, such
technology might not be
developed to a market
stage.
Strategy
TCFD TUI Approach
Recommendation
TCFD
Risk Description Impact Management
Type
-- Managing both market
and reputational risks depends
Market trends show tourism growth on the successful
outstripping global GDP growth as implementation of our emissions
Decline of it has for the last two decades, reduction initiatives.
travellers due to and customers prioritising spend Accordingly, we have roadmaps
shifts in consumer on leisure tourism over other in place to deliver on our
preferences and large purchases such as cars and science-based targets.
behaviour, and houses. Nevertheless, there is a -- Whilst the cost for
Market increasing negative risk in the medium to long term flights is very likely to
public sentiment that customers decide to travel increase, all markets
towards travel, less (or differently, for example participants have to roll-over
resulting in loss moving away from air travel) for this 'green inflation'. With
of revenue. environmental reasons. our state-of the art efficienct
fleet, it is likely that our
Decline of overall TUI as a market leader in Europe cost increase is competitive.
customer demand as has significantly contributed to Further, the share of extra
the price for make leisure travel an affordable cost from low-carbon flying is
our products will product for people with lower lower in a package and hence we
increase to reflect disposable income, e. g. believe that we can effectively
higher capital families, retired persons, etc. transfer cost additions.
expenditures and Significant price increases for
operational leisure product poses the risk -- TUI has set
expenses to offer that in the medium to long term science-based emissions
carbon low such consumer group will not be reduction targets for 2030 and
products. able to afford our leisure travel a net zero target for 2050. TUI
products any more. continues to notice a wide
Difficulties in range of financiers due to TUI
obtaining access to Increasingly policies and laws Group's financial performance
financing and are being introduced that combat and is continuing to develop
increasing cost of climate change, and institutional relationships with new sources
capital due to the investors increasingly consider of finance and monitor
inability to reduce ESG to be part of their fiduciary development of the market. TUI
emissions in line duties. These investors might be is in a continuing education
with market more inclined to divest from TUI process with lessors and the
expectations. if the company does not take financial community to maintain
sufficient action on ESG issues confidence in the strategy.
in the medium and long term.
Strategy
TCFD TUI Approach
Recommendation
TCFD Risk Description Impact Management
Type
There may be a reputational risk due
to increased negative public sentiment
Reputation Failure to meet on climate change if TUI is unable to
decarbonisation meet its decarbonisation targets. This
targets, impact applies across all time
negatively horizons.
affecting TUI's
reputation with This risk may also have an impact on
stakeholders. our ability to attract and retain
talent.
Physical
-- This risk is
managed at the
Unstable and more extreme weather asset-level.
conditions in certain regions might -- We manage the
have a physical impact on our assets overarching risk through
Physical damage resulting in higher costs from insurance and a large and
to assets and property damage and business regional spread hotels &
business interruption, predominantly in our resorts portfolio,
Acute disruption due hotels & resorts segment. Higher providing diversifiying
to extreme insurance premiums for property damage the risk of asset
weather-related and / or business interruption will be impairment.
events. the consequence. This risk is mostly -- We hold
likely to be realised in the long-term relatively short-duration
as the effects of physical climate lease contracts, enabling
change become more profound. flexibility in case of
changes in insurability.
-- The risk of
airport disruption was
Extreme weather events may disrupt the found to be low in the
airport and port operations which TUI physical risk analysis.
Extreme weather relies on, resulting in delays or Nonetheless, TUI works
events cancellations. closely with airports in
disrupting case of disruption and
transport hubs, Delays or cancellations are expected will continue to evaluate
resulting in to result in additional costs the risk profile of its
delays and including refunds, repatriation material airports.
cancellations, flights and hotel accommodation costs.
and increased -- Whilst docking
costs. This risk is mostly likely to be is already considered a
realised in the medium and long term resilient activity, the
as the effects of physical climate risk is further mitigated
change become more profound. by the flexibility to
adjust cruise
itineraries.
Strategy
TCFD TUI Approach
Recommendation
TCFD
Risk Description Impact Management
Type
-- Whilst the
scenario analysis indicate
higher probability of
Chronic Chronic physical changes in the extreme wheather events,
climate can result in asset damage non of the locations where
Physical damage to and business interruption, as well as our hotels & resorts are
assets and business higher operating costs for example located is vulnerable to a
disruption due to from increased cooling load rising sea level during
longer-term shifts requirements to offset higher the time frame of our
in climate sustained temperatures. This risk is climate scenario analysis.
patterns. mostly likely to be realised in the
long-term as the effects of physical -- This risk is
climate change become more profound. managed with insurance and
TUI Hotels & Resorts'
renewable energy strategy.
Changing weather Tourism demand in the medium and long
patterns decreasing term is expected to be affected by
suitability for climate change as weather is a key -- Climate-related
tourism and / or determinant in destination choice. In factors are considered in
making source Europe, it's expected that southern the expansion of TUI's
markets more regions will face reductions in Hotels & Resorts business
attractive, demand as weather becomes less segment.
impacting tourism suitable for tourism, particularly in
demand. higher warming scenarios. On the
other hand, northern European regions
are expected to benefit from changing
weather patterns.
Strategy
TCFD Recommendation TUI Approach
Opportunities
As short to medium term opportunities, we identified more efficient aircraft
and cruise ships as well as a shift to renewable energy sources at hotels &
resorts as a way to reduce operating costs. We further see an opportunity to
offer lower-emission air travel, cruise travel and hotel stays as a way to
improve our competitive position. Providing alternative modes of transport
including a move to high-speed rail is also seen as an opportunity for our
business. We are investigating and promoting the management of all of these
opportunities.
The summer season 2023 in Turkey and Greece for selected destinations has been
expanded which has been well received by our customers.
In the long term, we expect to see this more frequently and in more
destinations following a shift in consumer preferences from peak seasons where
heat waves may be imminent to shoulder seasons where the wheather is still
very favoiurable for travel. In addition, our business model is flexible to
offer new destinations based on changing weather conditions, e. g. more travel
to destinations around the Baltic Sea. We continue to monitor these trends and
embed them into our strategic and operational planning.
In financial year 2023, TUI conducted a qualitative and quantitative scenario
analysis in order to understand the potential effects of climate change on its
business and to test its strategy and financial planning to increase
resilience. A number of assumptions underpin this assessment regarding changes
to the intensity and frequency of weather related events, technology
development, development of energy and carbon prices and the development of
knowledge on global warming.
Two scenarios were considered in the 2023 climate risk assessment:
-- A high emissions scenario to assess the impact of significant
changes in the physical climate, which is based on the Intergovernmental
c) Describe the resilience of the Panel on Climate Change (IPCC) Representative Concentration Pathway 8.5
organisation's strategy, taking into (IPCC RCP8.5) and the International Energy Agency (IEA) Stated Policies
consideration different Scenario. This is aligned with global warming of approximately 4.3°C by
climate-related scenarios, including the year 2100.
a 2°C or lower scenario. -- A low emissions scenario to assess the impact of significant
socioeconomic changes to achieve a low-carbon economy, which is based on
IPCC RCP2.6 and the IEA Net Zero Scenario. This is aligned with global
warming of approximately 1.5°C by the year 2100.
-- Both emissions scenarios could have different consequences for
the TUI Group. In a low emissions scenario, stricter emissions and fuel
efficiency targets could increase operating costs, while assets based on
unsustainable practices could lose value. On the other hand, TUI could
benefit from a positive image, as environmentally conscious travellers
prefer companies that are committed to sustainability. In a high emissions
scenario, physical risks from extreme weather events and natural disasters
could impact TUI's tourism destinations. Rising operating costs due to
stricter environmental regulations could impact profitability.
Strategy
TCFD TUI Approach
Recommendation
Measures to strengthen and more closely align risk management and strategic planning were identified
and discussed. TUI has committed to the Science Based Targets initiative (SBTi) to reduce emissions
by 2030. Our targets are:
-- Reduction of airline CO2e per revenue passenger kilometer by 24 % by 2030.
-- Reduction of absolute CO2e from our cruise operations by 27.5 % by 2030.
-- Reduction of absolute CO2e from TUI Hotels & Resorts by 46.2 % by 2030.
Furthermore it is the commitment of TUI to achieve net-zero emissions by 2050. The reduction of
emissions will be accomplished with investments in new technologies and the use of fuel with less
CO2 emissions.
The results of the scenario analysis confirm that the Group's above described strategic initiatives
and reduction pathway are suitable for minimising the respective risks and creating opportunities.
We acknowledge that a number of assumptions descibed above had to be taken into account to derive
the scenario analysis and the uncertainty of the impact and likelihood of certain effects increases
mid- to long term. TUI has undertaken a qualitative assessment of all below summarized climated
related risks and opportunities. In additon, TUI has performed a high-level quantitative assessment
for eight risks and opportunities. This assessment has shown the risks to be immaterial for
financial planning, which was confirmed by a sensitivity analysis. One key assumption concerns the
extent to which costs for low-emission fuels and emission certificates can be passed on to
customers. Further information on the effect of climate-related risks on the useful lives and the
measurement of assets can be found in the Notes, chapter 'Key judgements, assumptions and
estimates', page 200 of this Annual Report.
RISK MANAGEMENT
TUI has a systematic and Group-wide approach in place to identify, assess and manage risks across the business. This
is managed through the processes and structures described in more detail in the Risk Report on page 35.
TCFD Recommendation TUI Approach
TUI constantly considers existing and emerging regulatory requirements in the
risk management process. The processes and structures to identify, assess and
manage climate-related risks across the business are described in the Risk
Report. They apply to all types of risks assessed throughout the whole company,
including climate-related risks. Decisions are made to mitigate, transfer,
a) Describe the organisation's accept or control risks based on a likelihood and impact scoring against an
processes for identifying and established risk appetite. By including the specialist teams, TUI prioritizes
assessing climate-related risks. risks based on their assessed magnitude and significance. In financial year
2023, TUI has defined a new principal risk 'Climate change impacting our
business model'.
For more information on the relative magnitude and significance compared to
other risks, see overview on page 39 in the Risk Report.
Within the framework of TUI's integrated approach, the key business segments
and climate risk owners work together in the management of climate-related
risks and opportunities.
b) Describe the organisation's
processes for managing In addition, specialists in the Group Sustainability team coordinate
climate-related risks. climate-relevant activities and support and facilitate the management of
climate risks and opportunities within the Group.
When necessary, the GEC deals with climate-related issues at board level.
Our systematic risk management process has identified sustainability risks
including climate-related risks. The existing risk categories and definitions
of our risk management framework have been used to assess and integrate the
climate risks into our ERM. For further details on the risk management process
please refer to page 35 in the Risk Report.
c) Describe how processes for
identifying, assessing, and Whilst the impact of some risks is medium to long term, the Group Risk
managing climate-related risks are Management time horizon is short to medium, covering the economic lifetime of
integrated into the organisation's an investment at a maximum. The climate change risk assessment has also
overall risk management. highlighted risks and opportunities where the impact falls beyond the risk
management time horizon. Nevertheless, all major climate-related risks and
opportunities from this assessment will be covered by the Group's Risk
Management process and will be managed. Where the impact of risks or chances
detected in the assessment is in far future, they will be continuously
monitored. Moreover, we see additional value in early identification to ensure
risks are managed effectively and opportunities are capitalised on.
METRICS AND TARGETS
TCFD Recommendation TUI Approach
Climate change is a pressing global challenge. There is an urgency to act and for
everyone to play a role in the transition to a low carbon economy. As a global tourism
group, our business model inherently leads to a significant emission of greenhouse
gases. In alignment with our reduction strategy, low emissions are the cornerstone for
our pathway. This is reflected in our currently used metrics to assess climate related
risks and opportunities. TUI is continuously working on improving its metrics and
targets to ensuring an effective steering of the most material climate related risks
and opportunities. Following the larger scale use of SAF, we will further develop our
a) Metrics used by TUI to metrics to reflect the impact on CO2 emissions. Emissions from TUI's airline, cruises
assess climate related and hotel segments represent 99 % of the Group's emissions. Within our asset portfolio
risks and opportunities in our airline emissions represent roughly 75 % of the Group's total carbon dioxide (CO2)
line with its strategy and emissions. We are working to reduce the environmental footprint of holidays and
risk management process drive-up environmental standards in our industry. In order to measure and manage
climate-related risks and in line with our strategic target to achieve net-zero
emissions across our operations and supply chain by 2050 at the latest, we monitor our
absolute CO2 emissions, (specific) fuel consumption and specific carbon emissions. TUI
has considered the cross-sector risks Following the larger scale use of SAF, we will
further develop our metrics to reflect the impact on CO2 emissions. TUI currently does
not have an internal carbon pricing mechanism.
For the reasons outlined above, CO2 emissions form our key metric to assess climate
related risks and opportunities.
In financial year 2023, TUI Group's total absolute emissions were largely stable
year-on-year at an increase of 1 %. In aviation, emission reductions were partly due
to the sale of the stake in Sunwing. In Cruises, the increase was driven by the
continued recovery of business after the COVID-19 pandemic and the inclusion of our
river cruises segment in reporting. Scope 3 emissions reflect the expansion of the
reporting framework, in particular due to the inclusion of WTT (well-to-tank)
emissions from marine cruise fuel and jet fuel.
Carbon dioxide emissions (CO2)
tons 2023 2022 Var. %
Airlines 4,218,553 4,331,628 - 2.6
Cruises 899,790 762,942 + 17.9
Hotels 805,541 767,049 1 + 5.0
b) Scope 1, Scope 2, and,
Scope 3 greenhouse gas Major premises / shops 14,890 14,251 + 4.5
emissions and the related
risks Ground transport 14,413 13,144 + 9.7
Scope 3 (indirect emissions from TUI's value chain)3 1,239,493 1,232,804 2 + 0.5
Total 7,192,680 7,121,818 + 1.0
1 Previous year adjusted due to inclusion of refrigerant
gases
2 Previous year adjusted due to extended reporting scope
3 With reference to the Greenhouse Gas Protocol, TUI Group
currently includes Scope
3 emissions from the production of office paper and printed
brochures, well-to-tank
emissions from fuel consumption of aircraft, ships, hotels and
ground transport, the
distribution of electricity (hotels), waste and water treatment
(hotels), employee
business travel with third-party airlines and rail, and employee
commuting. The
current scope of the reported Scope 3 emissions therefore does
not yet fulfil all the
requirements of the Corporate Value Chain (Scope 3) Accounting
and Reporting Standard.
METRICS AND TARGETS
TCFD TUI Approach
Recommendation
Carbon dioxide emissions (CO2), Scope 1 - 3
tons 2023 2022 Var. %
Scope 1 5,416,692 5,395,049 + 0.4
Scope 2 536,495 493,965 + 8.6
Scope 3 1,239,493 1,232,804 + 0.5
With reference to the Greenhouse Gas Protocol, TUI Group
currently includes Scope 3 emissions
from the production of office paper and printed brochures,
well-to-tank emissions from fuel
consumption of aircraft, ships, hotels and ground transport, the
distribution of electricity
(hotels), waste and water treatment (hotels), employee business
travel with third-party airlines
and rail, and employee commuting. The current scope of the
reported Scope 3 emissions therefore
does not yet fulfil all the requirements of the Corporate Value
Chain (Scope 3) Accounting and
Reporting Standard. For the validation of it's SBTi targets TUI
assessed it's total GHG inventory.
Scope 3 emissions currently constitute less than 40 % of the
total GHG inventory. Because of this,
TUI is not obliged to set a standalone scope 3 target. Yet due
to their significance for the
respective segments, TUI included category 3.3. fuel and energy
related activities in their
targets for the segments Cruises and Airlines. The corresponding
emissions are currently reported.
The current extent of the scope 3 reporting is explained
above.
METRICS AND TARGETS
TCFD TUI Approach
Recommendation
Energy usage by business area
MWh 2023 2022 Var. %
Airlines 17,202,638 17,655,179 - 2.6
Cruises 3,507,396 2,962,423 + 18.4
Hotels 1,762,992 1,599,057 + 10.3
Major premises / shops 59,651 60,036 - 0.6
Ground transport 61,087 55,311 + 10.4
Total 22,593,764 22,332,006 + 1.2
More efficient flying
We already operate one of Europe's most carbon-efficient
airlines and aim to continually
enhance our environmental performance. Our airline emissions
reduction targets by 2030 have been
validated by the SBTi. Our emission reduction roadmap for our
aircraft fleet comprises the
following measures: additional capex on modern carbon-efficient
aircraft, efficiency enhancement
through operational measures and investments in sustainable
aircraft fuels (SAF).
In order to reduce emissions, TUI Group has invested in
state-of-the-art aircraft such as
Boeing 787s and Boeing 737 Max aircraft. On average, these
planes are 20 % (787) and 16 % (737
Max) more fuel-efficient than the aircraft they replace in TUI's
fleet.
Moreover, TUI fly Belgium added Embraer E195-E2 aircraft, highly
efficient planes in the
category of up to 150 seats, to its fleet. The aircraft will
operate on short- and medium-haul
routes and reduce the carbon footprint by up to one third.
Environmental management systems and operational measures play a
key role in implementing
sustainability and further enhancing TUI's climate efficiency.
In financial year 2023, all TUI
airlines were certified under the internationally recognised ISO
14001:2015 standard. All ISO
14001 management systems used by individual TUI airlines were
transferred to one single management
system in the period under review. The following examples
illustrate the operational measures
implemented to enhance efficiency:
-- Flight operations, for instance single engine taxiing in and
out, wind uplinks andoptimised climb speeds and profiles
-- Weight reduction, for instance carbon brakes and fly away kit
(spare parts andtools)
-- Fight planning optimisation, for instance alternate distance
and minimum fuelprogramme
-- Fuel management system to improve fuel analysis,
identification of further savingspotential and tracking of
savings
METRICS AND TARGETS
TCFD TUI Approach
Recommendation
Sustainable aviation fuels (SAF) play a crucial role in reducing aviation emissions and are hence
a key part of our emission reduction roadmap to further improve airline carbon efficiency by 2030.
TUI cooperates with a number of partners to secure supplies of SAF. Examples include the signing
of a Memorandum of Understanding with the Spanish energy company CEPSA. The partnership with CEPSA
will focus on SAF fuels generated from raw materials such as used cooking oils, non-food animal
waste and biodegradable waste from various industries. This will make it possible to reduce
aircraft emissions by up to 80 % compared to conventional jet fuel. An additional Memorandum of
Understanding was signed with Shell.
In 2023, relative carbon emissions across our airlines decreased by 3.9 %. This improvement was
largely due to higher load factors versus 2022 and our ongoing re-fleeting programme to replace
older aircraft by new, more carbon-efficient aircraft.
Specific emissions are additionally shown in the form of CO2 equivalents (CO2e). Apart from carbon
dioxide (CO2 ), these include the other
five greenhouse gases impacting the climate as listed in the Kyoto Protocol: methane (CH4 ),
nitrous oxide (N2O), hydro-fluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride
(SF6 ).
TUI Airlines - Fuel consumption and CO2 emissions
2023 2022 Var. %
Specific fuel consumption l / 100 rpk* 2.43 2.52 - 3.9
Carbon dioxide (CO2) - total t 4,218,553 4,053,745 + 4.1
Carbon dioxide (CO2) - specific kg / 100 rpk* 6.11 6.36 - 3.9
* rpk=revenue passenger kilometer
TUI Airlines - Carbon intensity
g CO2 / rpk* 2023 2022 Var. % g CO2e / rpk*
TUI Airline fleet 61.1 63.6 - 3.9 61.7
TUI Airways 60.7 62.2 - 2.5 61.3
TUI fly Belgium 66.3 70.7 - 6.3 66.9
TUI fly Germany 60 64.4 - 6.8 60.5
TUI fly Netherlands 59.6 59.8 - 0.2 60.2
TUI fly Nordic 59.8 66.4 - 9.9 60.4
* rpk=Revenue Passenger Kilometre
We commissioned Verifavia to provide assurance on the carbon
intensity metrics for financial
year 2023 as shown in the above
table 'TUI Airlines - CO2 intensity'. The airline carbon data
methodology document and the full
assurance report are available at
www.tuigroup.com/en-en/responsibility/sustainability/reporting-downloads
METRICS AND TARGETS
TCFD TUI Approach
Recommendation
More sustainable cruising
We continue to focus on reducing the emissions of our cruise ships, delivering progress by investing
in state-of-the-art technology to reduce
air emissions and in operational efficiency. Emission reduction roadmaps were drawn up for TUI
Cruises, Hapag-Lloyd Cruises and Marella Cruises as part of our submission of 2030 targets for
validation by the SBTi. Key levers include investments in fleet modernisation and efficiency
enhancement with a focus on shore power, route optimisation, energy efficiency enhancement and
switching to alternative fuels.
TUI Cruises with its Mein Schiff and Hapag-Lloyd Cruises brands continues to operate a modern and
technologically advanced fleet. The newbuilds in the fleet are equipped with state-of-the-art
technologies to minimise fuel consumption. A smart energy management system, efficient air
conditioning, innovative lighting controls and the use of exhaust heat from the engines contribute
to a significant reduction in the carbon footprint compared with vessels not equipped with those
technologies.
In the period under review, essential steps were taken to reduce emissions generated by the Mein
Schiff and Hapag-Lloyd Cruises fleet. The Company will successively install the equipment required
for shore power connection on all ships of the Mein Schiff fleet. In the period under review, Mein
Schiff 1 was retrofitted during her scheduled dock period. Mein Schiff 2 and Mein Schiff 5 will
follow in November 2023 and in January 2024.
In summer 2023, both fleets successfully used shore power, e. g. in Kiel and Hamburg. During their
scheduled dock periods, both ships, Mein Schiff 1 and Mein Schiff 6, also obtained a new silicone
coating to reduce resistance in the water so as to save fuel during the voyage.
In the period under review, the Company also successfully completed the first tests on the use of
sustainable biofuels, with both Hanseatic Inspiration and Mein Schiff 4 successfully operating on
biofuel blends on some voyages. The second-generation biofuel, which was bunkered for the first
time, is purely plant-based and mainly consists of cooking oil residues. This fuel is virtually free
from sulphur oxides and in its pure form offers a CO2 reduction of up to 90 % compared to fossil
fuels.
Thanks to new exhaust gas treatment systems operated on all new vessels, the newbuilds in the Mein
Schiff fleet also significantly reduce their sulphur and nitrogen emissions. Use of these advanced
emission purification systems goes beyond regulatory requirements. They are, for instance, not only
used in the designated emission control areas in the North and Baltic Seas, the English Channel and
North America, but also in other regions sailed by Mein Schiff such as the Mediterranean, the
Orient, the Caribbean and Central America.
The Mein Schiff fleet is also setting another milestone for sustainable growth. Mein Schiff 7 is
currently under construction in the Meyer Turku shipyard in Finland. The focus is on compliance with
high maritime environmental standards by optimising the design in terms of energy efficiency and the
use of modern technologies to improve sustainability. The ship will feature equipment enabling her
to run on green methanol in future. She is scheduled for commissioning in 2024.
METRICS AND TARGETS
TCFD TUI Approach
Recommendation
The expedition ships in the Hapag-Lloyd Cruises fleet exclusively use low-sulphur marine gas oil
with a sulphur content of 0.1 %. This reduces sulphur emissions from these vessels by up to 80 %
and particulate and soot emissions by up to 30 % versus the use of heavy fuel oil. All Hapag-Lloyd
Cruises ships have tributyltin-free underwater coatings, on-board seawater desalination systems to
make drinking water and biological sewage treatment systems for wastewater. Waste is separated on
board prior to disposal on land by specialised companies in accordance with international
regulations (MARPOL).
In financial year 2023, relative CO2 emissions in the Cruises segment declined by 23.7 %. This was
due to a significant increase in load factors, as the previous year's figures were more strongly
impacted by the effects of the pandemic. The amount of waste per cruise passenger night decreased
by 23 % to 8 litres, with freshwater consumption up by 24.2 % to 46 litres. Our reporting covers
all ships operating under the Mein Schiff, Hapag-Lloyd Cruises. Marella and TUI River Cruises
brands.
Cruises - carbon intensity
2023 2022 Var. %
Carbon dioxide (CO2) - relative kg / Cruise passenger night 101 132 - 23.7
Environmental protection in our hotels
Our hotels and hotel partners continue to focus on promoting the
sustainability transformation
across their operations. Each hotel plays an important role in
managing the impacts on the local
community, the economy and the environment. Emission reductions
remain our key priority, and we
have prepared comprehensive roadmaps and defined targets for
2030 for our Hotels & Resorts
segment. These targets have been validated by the SBTi.
Our hotel portfolio is still growing and many of our hotels use
green technology in order to
improve their sustainability performance. The generation of
renewable energies from solar and wind
power is a key element of the emission reduction roadmaps for
our hotels, alongside efficiency
measures delivered through hotel refurbishment and
standard-setting for new buildings.
Sustainable construction is an important tool for saving energy
and cutting carbon emissions
from hotels. In the financial year under review, the Hotels
& Resorts segment published Green
Building Guidelines for the first time. They provide specific
recommendations to our own hotels
and to our hotel partners for their construction and
refurbishment projects. The Guidelines cover
the key factors for reducing the ecological footprint of
construction and refurbishment projects
and paring back water and energy consumption. They also cover
aspects such as monitoring systems,
sustainability certifications and stakeholder communication. The
Guidelines were reviewed by
external experts from the Fraunhofer IAO Institute.
For more information on the topic, please refer to: TUI Green
Building Guidelines (online
version):
https://mediacenter.tui-info.com/onlinekataloge/index.php?catalog=
tui_greenbuildingguideline_gj2023_f#page_1
METRICS AND TARGETS
TCFD TUI Approach
Recommendation
Our TUI Global Hotel Awards 2023 placed a particular emphasis on sustainability. The award
included categories reflecting TUI's Sustainability Agenda. The winners in these categories are
selected by an external committee based on pre-defined criteria. In 2023, TUI also granted an
award for sustainability innovation. Atlantica Hotels & Resorts was recognised for introducing
new, sustainable technologies. Examples of this commitment can be found on the Greek island of
Rhodes, where the hotel company has invested in the latest solar panel technology, e-mobility for
electric cars and a water desalination plant.
We continued to drive forward the use of photovoltaic systems in our hotels to promote sustainable
power generation. In cooperation with our joint venture partners Riu, Grupotel and Atlantica, 19
PV systems with an output of almost 3,500 kWp were installed in Greece, Spain and the Cape Verde
Islands in financial year 2023.
Our hotels made further inroads towards a better ecological footprint in terms of emissions, water
consumption and waste production. This
is the result of continual measures to improve our environmental performance alongside higher
customer numbers and occupancy levels as
the pandemic subsided. The scope of the hotel KPI-reporting is made up of TUI's Hotels & Resorts
portfolio. This includes owned, managed, leased and franchised properties.
Hotels - Carbon intensity
2023 2022 Var. %
Carbon dioxide (CO2) - relative kg / guest night 12.4 13.8 * - 9.8
* Previous year adjusted due to inclusion of refrigerant
gases
METRICS AND TARGETS
TCFD Recommendation TUI Approach
For TUI Group, sustainability covering all three areas of economic, environmental
and social sustainability is a fundamental management principle and a cornerstone
of our strategy for continually enhancing the value of our company. We firmly
believe that sustainable development is critical to long-term economic success.
Together with our many partners around the world, we are actively committed to
shaping a more sustainable future for tourism.
We already operate some of the most efficient aircraft and cruise ships. Our
commitment is to be industry-leading in achieving net-zero emissions and we aim to
achieve this target across our operations and supply chain by 2050 at the latest.
TUI has committed to the Science Based Targets initiative (SBTi) to reduce
emissions in line with the latest climate science by 2030 for airlines, cruises
and hotels. The independent organisation has now checked and validated our
reduction targets. It confirmed that they are in line with the latest climate
science. Our intensity and absolute targets are:
-- Reduction of airline gCO2e per revenue passenger kilometer by 24 %
c) Targets used by TUI to manage by 2030 1, 3
climate-related risks and -- Reduction of absolute tCO2e from our own cruise operations by 27.5 %
opportunities and its by 2030 1, 3
performance against targets -- Reduction of absolute tCO2e from TUI Hotels & Resorts own operations
by 46.2 % by 2030 2, 3
1 Baseline 2019. Level of ambition well below 2 °C. CO2e = CO2 equivalents. Apart
from carbon dioxide (CO2 ), emissions include the other five greenhouse gases
impacting the climate as listed in the Kyoto Protocol: methane (CH4), nitrous
oxide (N2O), hydro-fluorocarbons (HFCs), perfluorocarbons (PFCs)
and Sulphur hexafluoride (SF6). TUI Group's science-based targets commitments
include well-to-wake emissions for our airline and cruise operations (emissions
from aviation and marine fuel, scope 1 and scope 3, category 3).
2 Baseline 2019. Level of ambition 1.5 °C. For our hotels, the commitment includes
emissions from all energy sources plus refrigerant gases (scope 1 and 2).
3 Airline, cruise and hotel GHG emissions figures published in the FY23
Non-Financial Declaration do not match the scope, boundaries or reporting
methodology of our science-based targets. Therefore inferences of progress towards
achieving SBTs based on figures in this or previous Non-Financial Declarations
should not be made.
Integrity & Compliance
Anti-corruption and bribery
In implementing our business activities, and along our supply
chain, compliance with many national and international laws and
rules as well as internal policies is essential. However, our
understanding of Compliance goes beyond respecting laws and
regulations, as we shift our Company's culture away from a purely
rule-based approach towards a living culture of integrity.
Behaviour violating integrity principles may not only have legal
consequences, but can also result in lasting damage to TUI's
reputation. TUI's Compliance Management System aims to promote
integrity and prevent potential misconduct, to make liability risks
manageable for TUI and its employees and in this way to protect the
Company's reputation. It is a fundamental component in our
commitment to corporate, environmental and social
responsibility.
In the completed financial year, Integrity & Compliance
focused on the core areas of, implementation of the new legal
requirements set out in the German Act on Corporate Due Diligence
Obligations in Supply Chains and the German Whistleblower
Protection Act, training and risk analysis.
In the financial year under review, mandatory online training
courses were provided on the Integrity Passport (for all employees)
and Fair Competition (for all employees in Finance, Legal,
Purchasing, Procurement, Corporate & External Affairs and
Aviation). For selected groups of employees, in-person training
sessions with an anti-trust law expert were carried out to
facilitate more in-depth discussions of specific legal questions
with employees. As sanctions have remained an important topic, an
online training session on sanctions was rolled out by the end of
the financial year.
In order to comply with the obligations arising from the German
Supply Chain Due Diligence Act and Whistleblower Protection Act,
the whistleblowing system was opened up to third parties to provide
an additional channel for raising concerns confidentially and
anonymously. The rules of procedure are available on TUI Group's
website. In addition, the Integrity & Compliance team, in
collaboration with other relevant stakeholders, has drafted
contractual clauses to reflect the obligations set out in the
Supply Chain Due Diligence Act with regard to human rights and
environmental matters, and, where appropriate, to pass on these
obligations to business partners and suppliers.
Furthermore, a pilot risk analysis was implemented for selected
TUI Group companies in the completed financial year. The risk
assessment was carried out by means of a revised survey and a newly
developed weighted assessment matrix which automatically calculates
the risk score for each region / segment.
Compliance Management System
TUI Group's Compliance Management System is based on a risk
management approach. It is built around three pillars: prevent,
detect and react, which, in turn, comprise a variety of measures
and processes.
The Integrity & Compliance team is in charge of the core
areas anti-corruption, fair competition and trade sanctions. Our
Compliance Management System defines pilot and standard operation
and the documentation of roles, responsibilities and processes in
these areas.
The Compliance Management System applies to TUI AG and all
companies majority-owned, directly or indirectly, by TUI AG,
whether domestic or foreign, and to any other shareholdings where
management control directly or indirectly lies with TUI AG
('Managed Group Companies'). Implementation of the Compliance
Management System is recommended for companies where management
control does not lie with TUI AG ('Non-Managed Group
Companies').
Integrity & Compliance structure
The Chief Compliance Officer is responsible for drawing up,
maintaining and developing our Compliance Management System. He is
supported by the Group Director Integrity & Compliance and the
centralised Integrity & Compliance team, forming part of Legal.
All Compliance Officers are in close contact with local management,
who remain generally responsible for observing all the Compliance
rules, and together they are responsible for implementing our
Compliance requirements and Integrity values, above all:
-- Raising awareness of Integrity & Compliance and the
associated core issues through communicationcampaigns
-- Performing risk analyses relating to the core Compliance
issues and self-assessments or Pulse Checks
-- Implementing measures to ensure that we comply with our
commitment to integrity in line with theIntegrity Passport
-- Providing training on the Integrity Passport and Fair
Competition
-- Advising employees, primarily with regard to trade sanctions,
anti-corruption & anti-bribery and faircompetition
-- Securing the necessary exchange of information between local
management and the Integrity & Complianceteam
-- Monitoring new national and international legislation
-- Providing regular reports to the Group Executive Committee
and to the Audit Committee of the SupervisoryBoard
Integrity & Compliance culture
The Integrity & Compliance culture influences people's
behaviour and their views about complying with the applicable
rules. It therefore forms the basis for an effective Compliance
Management System. Our culture reflects our corporate values and
the fundamental attitude and conduct of management all the way up
to the Executive Board and Supervisory Board of TUI AG, thus the
'tone from the top'. It is expressed, in particular, in our
corporate value 'Trusted', appealing to our employees' personal
responsibility and their honesty and sincerity in handling guests,
fellow employees and other stakeholders.
Integrity Passport - TUI's Code of Conduct
Our Integrity Passport is binding for all employees, from
Executive Board members to trainees, and for all managed Group
companies. The Integrity Passport serves as the guiding principle
for our Executive Board, managements, executives and employees
alike. It provides orientation in key areas of people's day-to-day
work and in conflict situations: fair competition, anti-bribery and
anti-corruption, appropriate gifts and hospitality, protection of
our business secrets, data privacy, handling conflicts of interest,
prevention of insider trading, maintaining proper accounts and
financial records, anti-money laundering, trade restrictions,
respectful dealings with each other, sustainability, and public
communications about TUI and how to raise a concern.
Suppliers' Code of Conduct
The Integrity Passport is complemented by the Suppliers' Code of
Conduct, which details TUI's ethical, social and legal expectations
of its business partners. Moreover, all business partners are
required by contract to observe all national and international
anti-corruption laws applicable to the supplier relationship. The
Suppliers' Code of Conduct has been revised to reflect the Supply
Chain Due Diligence Act which has entered into force. Legal
obligations resulting from the Act that must be observed in our own
business operations and in the supply chain have been incorporated
or set out in more detail. This places our business relationships
with our business partners on a solid basis.
Management of Integrity & Compliance policies
The principles anchored in the Integrity Passport are
communicated to and implemented in TUI Group through our policies,
statements and manuals. Our Group-wide policy management develops
the standards for Group-wide policies and coordinates the
involvement of relevant internal stakeholder groups, e. g. other
departments and the works council. This approach is designed to
provide employees with a set of policies which are as
comprehensible as possible. TUI Group's Compliance policies offer
guidance on a range of issues, including how to react to gifts and
hospitality and fair competition. In the financial year under
review, the Group Policy on Trade Sanctions was updated and
adjusted to existing processes within TUI Group.
Integrity & Compliance - Risk Analysis
Integrity & Compliance performed a pilot risk analysis for
eight TUI Group companies across all regions and segments. The
responsible Compliance Officers selected the companies on a risk
based approach. The criteria applied included the revenues,
business activities, headcount, business location and headquarters
of the companies. The risk assessment was performed by means of a
revised survey and a newly developed weighted assessment matrix
which automatically calculates the risk score for each region /
segment. The survey comprises general and specific questions, e. g.
on use of the SpeakUp Line and the Gifts & Hospitality
Register, the business environment and incident management. The
individual companies cooperated closely with local management in
answering the questions and assessing the risks. Additional
objective criteria included the corruption perception index, number
of training programmes and number of reported and confirmed
incidents. On that basis, risk scores were calculated for each
individual company. The risks determined in this way proved
moderate. Where necessary, risk mitigation measures were adopted.
TUI Group is planning to roll out this risk analysis across the
Group in order to further enhance the determination of risks and
the identification of mitigation measures for TUI Group.
Integrity & Compliance training
Training is a key element of TUI's Compliance Management System,
with its focus on preventing misconduct, and a crucial component of
TUI Group's Integrity & Compliance culture. It is carried out
according to a graded concept: managers and staff at TUI have all
benefited from face-to-face teaching and online programmes. The
online training programme on the Integrity Passport, which explains
integrity and the underlying corporate values, is mandatory for all
employees and executives. The online training on 'Fair Competition'
was rolled out for risk groups within TUI. To enable Legal and
Procurement to deal with the topic in depth and engage in dialogue
on specific legal questions, training programmes were offered and
implemented by a lawyer specialising in competition law and
compliance. Other training schemes with their own specific focus
addressed anti-corruption and the appropriate handling of gifts and
hospitality to raise awareness of the risk-related challenges
employees might face. As sanctions remain an important topic, an
online training programme was rolled out by the end of the
financial year.
Whistleblower system: SpeakUp Line
TUI offers its employees a Group-wide whistleblower system to
enable indications of infringements of laws or the policies
anchored in TUI's Integrity Passport to be reported anonymously and
without reprisals. This whistleblowing system is currently
available to staff in 53 countries. In accordance with the
requirements of the Supply Chain Due Diligence Act and the EU
Whistleblowing Directive, it has been opened up for third parties
outside TUI Group. All reports are consistently followed up in the
interests of all stakeholders and the Company. Our top priority is
to ensure confidentiality and handle information discreetly. Any
incident resulting from the use of the whistleblower system is
reviewed and followed up by the Integrity & Compliance team,
and is investigated and handled in conjunction with different
departments, depending on the issue at stake.
The opening of the whistleblowers system to third parties, has
significantly increased the number of reports received. In the
financial year under review, a total of 117 reports on compliance
issues (in 2022 43 reports) were received through the SpeakUp Line.
Apart from the SpeakUp Line, employees also used the opportunity to
report infringements through other channels e. g. directly to their
line managers, the local Compliance contact or the Compliance
Mailbox, which is also available externally. A further 29 reports
(in 2022 26 reports) were received through these channels. They
were followed up whenever there were any indications suggesting
potential infringements of internal policies or the law. Out of the
146 reports (in 2022 69 reports) submitted in total, 78 cases (in
2022 30 cases) initially presented prima facie indications of a
Compliance infringement, leading to further investigations, which
in ten cases (in 2022 eight cases) resulted in further
measures.
Regarding infringements of human rights or environmental
requirements under the Supply Chain Due Diligence Act, 31 reports
have been received through the SpeakUp Line since 1 January 2023.
In 18 cases, employees used the opportunity to report infringements
directly to their line managers, the local Compliance contact or
the Compliance Mailbox. Out of the 49 reports submitted in total,
49 cases initially presented prima facie indications of an
infringement, leading to further investigations, which in four
cases resulted in further measures.
Business partner screening (due diligence processes)
There is a risk of active and passive corruption because we
operate in countries with a high corruption index. Moreover, the
risk of TUI business partners being subject to trade sanctions or
similar listings cannot be ruled out.
Business partners were checked against international sanctions,
terrorist and wanted persons lists via the Internet data base
provider. In the event of a red flag, further measures were
launched, in the severest cases terminating the business
relationship.
Data protection
Data protection remains important for the TUI Group. We evaluate
the compliance with data protection law permanently and report
indicators to the Group Executive Committee. In addition, in
financial year 2023 we have reported 15 data breaches in accordance
with Art. 33 GDPR. However, no fines are imposed so far.
Remuneration Report
The Remuneration Report mainly explains the remuneration of the
members of TUI AG's Executive Board and the remuneration of the
members of the Supervisory Board in accordance with the Articles of
Association. The underlying remuneration systems are based in
particular on the recommendations of the German Corporate
Governance Code (GCGC), the requirements of the German Stock
Corporation Act (Aktiengesetz - AktG) and, where possible, the
recommendations of the UK Corporate Governance Code (UK CGC). In
addition, the Remuneration Report includes the disclosures required
by Section 162 of the German Stock Corporation Act (AktG) as
amended by the Act implementing the Second Shareholders' Rights
Directive (SRD II).
As a German stock corporation, TUI AG is also listed on the
London Stock Exchange (LSE). Where mandatory rules on the
governance structure and legal requirements of a German stock
corporation are affected, these are presented accordingly in this
report and, where appropriate, placed in the context of the UK
CGC.
Executive Board and Executive Board Remuneration
CONFIRMATION OF THE REMUNERATION SYSTEM BY THE SHAREHOLDERS
Following preparatory work in financial year 2019, the
Supervisory Board of TUI AG adopted a revised remuneration system
for the members of the Executive Board in December 2019 with
retroactive effect from the beginning of financial year 2020, i. e.
1 October 2019. The revision of the remuneration system included
different performance targets for the short-term variable
remuneration (STI). Furthermore, the Total Shareholder Return (TSR)
performance target was removed from the calculation of the
long-term variable remuneration (LTIP). In addition, the
currentremuneration system now includes compliance malus and
clawback rules, thus taking into account the requirements of
UK-based stakeholders and the recommendations of the GCGC in
particular. The remuneration system in its current form was
approved by TUI AG shareholders at the Annual General Meeting on 11
February 2020, also with retrospective effect from the beginning of
financial year 2020. In addition to the statutory requirements, the
revision of the remuneration system took into account the
recommendations of the GCGC as amended on 7 February 2017 and the
draft of the new version of the GCGC as of 16 December 2019. In
addition, the recommendations of the UK CGC and a different market
practice in the United Kingdom were also taken into account in the
revision. Against the background of changes in market practice and
further developments in the structure of Executive Board
remuneration since the last fundamental revision of the
remuneration system, the remuneration system for TUI AG's Executive
Board was revised to include and take account of the aforementioned
perspectives and approved by TUI AG's shareholders: The defined
performance indicators are designed to take account of the
interests of all stakeholders and create value for our equity and
debt providers. In designing the Executive Board remuneration
system, the Supervisory Board was supported by renowned,
independent external remuneration consultants
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft
(PwC).
According to the German Stock Corporation Act in the version of
SRD II, the Supervisory Board must in future submit the
remuneration system for approval whenever there is a significant
change, but at least every four years. The Supervisory Board had to
make such a submission for the first time at the first ordinary
Annual General Meeting following 31 December 2020. TUI AG's
previous voluntary procedure in line with the UK CGC already
largely complied with these new requirements. In the context of the
resolution adopted on 25 March 2021, the Annual General Meeting
approved and thus adopted the remuneration system for the members
of the Executive Board by 95.8 %. Pursuant to the German Stock
Corporation Act in the version of SRD II, the Executive Board and
Supervisory Board must also prepare an annual Remuneration Report,
which must comply with certain requirements (Section 162 AktG). The
auditor has to check whether the Remuneration Report pursuant to
Section 162 AktG contains all legally required information and, in
addition, to issue an audit opinion. Pursuant to Section 120a (4)
AktG, the audited Remuneration Report must be submitted to the
Annual General Meeting for a decision on its approval. Under the
applicable transitional law, the new provisions of the AktG on the
Remuneration Report had to be applied for the first time for the
first financial year beginning after 31 December 2020. Accordingly,
the Remuneration Report for financial year 2022 would in principle
have had to be submitted to the Annual General Meeting of TUI AG
for approval for the first time in 2023. However, the Executive
Board and Supervisory Board of TUI AG have made use of the option
to voluntarily apply the new provisions of the German Stock
Corporation Act on the Remuneration Report earlier. This was also
done to fulfil a contractual obligation TUI AG has assumed
vis-à-vis the Economic Stabilisation Fund in September 2020 in the
framework of the granting of stabilisation measures in accordance
with the Economic Stabilisation Fund Act. The Remuneration Report
prepared and audited within the meaning of Section 162 AktG for
financial year ended 30 September 2022 was approved by the
shareholders of TUI AG on 14 February 2023 with 97.62 %. The
decision of the Annual General Meeting on the approval of the
Remuneration Report is of recommendatory nature.
COMPOSITION OF THE EXECUTIVE BOARD
In the financial year 2023, the Executive Board consisted of the
following members.
-- Sebastian Ebel: CEO
-- David Burling: CEO Markets & Airlines
-- Mathias Kiep: CFO
-- Peter Krueger: CSO & CEO HEX
-- Sybille Reiss: CPO / Labour Director
-- Frank Rosenberger: CIO (until the end of 31 October 2022)
GENERAL PRINCIPLES
Upon recommendation of the Presiding Committee, the Supervisory
Board determines the remuneration of the individual members of the
Executive Board in accordance with Section 87 (1) sentence 1 AktG.
In addition, the Supervisory Board regularly reviews the
remuneration system for the Executive Board.
In particular, the following principles are taken into
account:
-- Comprehensibility and transparency
-- Economic situation, success and sustainable development of
the Company
-- Linking the shareholder interest in value enhancement and
profit distribution with correspondingperformance incentives for
the members of the Executive Board
-- Competitiveness in the market for highly qualified
managers
-- Appropriateness and orientation towards tasks, responsibility
and success of each individual member ofthe Executive Board, also
in a relevant environment of comparable international companies,
taking into account thetypical practice in other large German
companies
-- Linking a significant part of the total remuneration to the
achievement of demanding long-termperformance targets
-- Appropriate relationship between the amount of the fixed
remuneration and the performance-relatedremuneration
-- Adequacy in horizontal and vertical comparison
The remuneration system and the service agreements of the
members of the Executive Board stipulate in particular,
-- how the target total remuneration is determined for the
individual members of the Executive Board andwhat amount the total
remuneration may not exceed (maximum remuneration),
-- the relative share of fixed remuneration on the one hand and
short-term variable and long-term variableremuneration components
on the other hand in the target total remuneration,
-- which financial and non-financial performance criteria are
decisive for the granting of variableremuneration components,
-- what the relationship is between the achievement of the
previously agreed performance criteria and thevariable
remuneration,
-- in which form and when the member of the Executive Board can
dispose of the variable remunerationamounts.
The remuneration system adopted by the Supervisory Board at the
end of 2019 and approved by the 2020 and 2021 Annual General
Meetings also contains a compliance malus and clawback provision.
Accordingly, in the event of a serious breach by the beneficiary of
the principles contained in the Company's Code of Conduct or of due
diligence in the management of the Company during the assessment
period of the corresponding variable remuneration components, the
Company may reduce or cancel the payment amounts in full or demand
their return in full or in part after payment. The Supervisory
Board shall decide on this in each individual case at its due
discretion and shall take into account in its decision in
particular the severity of the violation as well as the amount of
the financial or reputational damage caused thereby.
In the financial year 2023, the Supervisory Board did not make
use of the option to withhold or reclaim variable remuneration
components.
I. REMUNERATION OF THE EXECUTIVE BOARD IN FINANCIAL YEAR
2023
In financial year 2023, the remuneration of the Executive Board
members consisted of: (1) a fixed remuneration, (2) a
performance-related annual bonus as short-term incentive (STI), (3)
virtual shares in TUI AG under the long-term incentive plan (LTIP),
(4) fringe benefits and (5) pension benefits. The following table
provides an overview of the individual components of the
remuneration system for Executive Board members in effect and
approved by the Annual General Meeting as well as the structure of
the individual remuneration components.
The target total remuneration of the members of the Executive Board was determined
as follows.
Target
Target total Composition of the
remuneration target total
remuneration of all
members of the
Executive Board
1 Fixed amount, no cap applied.
2 Appointment until the end of 31 October 2022.
Fixed remuneration paid in twelve equal monthly instalments in
arrears at the
Target end of a month, taking into account the applicable tax
and social security
regulations.
Together with the other remuneration components, the fixed
remuneration forms the
(1) Fixed basis for attracting and retaining the highly
qualified members required for the remuneration development and
implementation of the corporate strategy for the Executive
Board.
Intra-Group mandates No separate remuneration / offset against
fixed remuneration
Extra-Group mandates No offsetting against fixed remuneration,
subject to approval by the Supervisory
Board
STI is designed to motivate members of the Executive Board to
achieve demanding
and challenging financial, operational and strategic goals
during a financial year.
(2) STI Target The targets reflect the corporate strategy and
are aimed at increasing the value of
the Company. In particular, through the link to EBIT
(reported),
the one-year variable remuneration is linked to the achievement
of a key Group
performance indicator in the respective financial year.
DESCRIPTION STI
Contractually agreed, individual target amount
Target amount
-- Total target achievement of the financial ratios
Overall target -- Interpolation: 0 % to 180 % achievement --
Individual performance factor: 0.8 to 1.2
-- Adjustment element pursuant to section G.11 DCGK
-- Compliance malus and claw-back
Group key figure
Target achievement
Target achievement
corridor
Performance Corridor EBIT (reported)
ebit
in % Actual vs. target value at constant currency
Group key figure 1 75 % to 115 %
75 %
Weighting
Group key figure
target achievement
target achievement
corridor
Performance Corridor
Cash Flow Cash flow before dividends
in %
Group key Target value against + / - 15 % of EBIT to budget
rates figure 2
85 % to 115 %
25 %
Weighting
Target For each financial year, the Supervisory Board sets
performance criteria for the
individual performance of the beneficiary, the performance of
the entire Executive
Individual Board and the achievement of stakeholder targets, as
well as their weighting in performance relation to each other. ESG
targets are always taken into account here.
Target achievement
corridor 0.8 to 1.2
The Company's value and the value for the shareholders
(shareholder value) are
to be increased in the long term by setting ambitious targets
that are closely
linked to the Company's earnings, the share price development
and the dividend. By
(3) LTIP Target linking earnings per share and share price
performance, congruence is established
between the interests and expectations of shareholders and the
remuneration of the
Executive Board. The performance period of four years helps to
ensure that the
actions of the Executive Board in the current financial year are
also aligned with
the long-term development of the Company.
Description ltip
Target amount Contractually agreed, individual target amount
Overall target -- Interpolation: 0 % to 175 % achievement --
Adjustment: EPS < 0.50 EUR
-- Compliance Malus and Clawback
Group key figure
Target achievement
Allocation of virtual
shares
Group key EPS figure
EPS p. a. based on four weighted annual amounts
Target achievement
corridor
Ø 50 % Start EPS to Ø 10 % p. a.
Target achievement
corridor eps
in %
-- Allocation of a provisional number of virtual shares
calculated fromthe quotient of the agreed individual target amount
and the average Xetra shareprice of TUI AG for the twenty trading
days prior to the first day of financial Shares year.
-- The final number of virtual shares is calculated from the
product ofthe preliminary number of virtual shares and the degree
of target achievementof the key figures.
Multiplication of the final number of virtual shares by the
average Xetra share
Payment price of TUI AG of the last twenty trading days in the
respective performance
period.
The fringe benefits should be competitive in the market for
highly qualified
members of the Executive Board in order to attract and retain
suitable candidates
for the Company in the long term. Furthermore, an attractive
working environment
shall be created for the members of the Executive Board.
-- For business trips, reimbursement of travel expenses
-- Twice per financial year reimbursement of costs of a trip
orindividual travel components from programmes of tour operators in
which TUI holds a majority stake (incl. discount for family
members); only applies to the (4) Fringe Target service agreements
of Mr Ebel, Mr Burling, and Mr Rosenberger; does not applybenefits
to the service agreements of Mr Kiep, Mr Krueger and Ms Reiss
-- Discount of 75 % on flights with a TUI airline. Applies only
to theservice agreements of Mr Ebel,Mr Burling and Mr Rosenberger;
does not apply to the service agreements of MrKiep, Mr Kruegerand
Ms Reiss
-- Accident insurance
-- Subsidy for health and long-term care insurance
-- Criminal law protection and D&O insurance
-- Company car / car allowance
-- CEO: EUR 7,500 k
-- Other Executive Board: EUR 3,500 k
-- Contractually defined upper limit for total remuneration
(incl. fixed Target remuneration, STI, LTIP, Company pension scheme
(bAV) and fringe benefits). Ifthe contractually defined upper limit
of the total remuneration is exceeded,the LTIP is reduced
proportionately in the inflow. The contractually defined (5) upper
limit of the total remuneration corresponds to the respective
maximumMaximum total remuneration for the members of the Executive
Board determined by theremuneration Supervisory Board.
Maximum Remuneration
1 Fixed amount, no cap applied.
2 Appointment until the end of 31 October 2022.
(6) Severance -- CEO: Severance payment limited to the value of
two years'payment cap remuneration in the event Target -- Other
Executive Board members: Severance payment limited to the valueof
early of one year's remuneration termination -- No change of
control clauses agreed of contract
The aim is to attract and retain the highly qualified members of
the Executive
(7) Board necessary for the development and implementation of
the corporate strategy. Pension Target The pension benefits or the
pension subsidy should be competitive in the market for benefits
highly qualified members of the Executive Board and offer them
an appropriate level of benefits in retirement. Contributions --
Mr Ebel: EUR 454.5 k per year. In the case of Mr Ebel, the
resultingto the pension can be paid out when he reaches the age of
62. company -- Mr Rosenberger: EUR 230.0 k per year. In the case of
Mr Rosenberger,pension the resulting pension can be paid out when
he reaches the age of 63. scheme
Fixed annual payout -- Mr Burling: EUR 225.0 k per year amounts
for -- Mr Kiep: EUR 230.0 k per year the purpose -- Mr Krueger: EUR
230.0 k per year of retirement -- Ms Reiss: EUR 230.0 k per year
benefits
I.1 PENSION PROVISIONS FOR THE APPOINTED MEMBERS OF THE
EXECUTIVE BOARD AND FOR FORMER MEMBERS OF THE EXECUTIVE BOARD WITH
CURRENT SERVICE CONTRACTS UNDER TUI AG'S PENSION SCHEME
Pension obligations for appointed members of the Executive Board
or former members of the Executive Board with current service
contracts in accordance with IAS 19 totalled EUR 11,805.2 k as at
30 September 2023 (previous year EUR 13,235.3 k). Of this amount,
EUR 3,796.0 k (previous year EUR 4,210.9 k) related to entitlements
earned by Mr Ebel in the framework of his work for TUI Group until
31 August 2006. The remaining entitlements were distributed as
follows:
Pensions and the amounts spent or accrued for this purpose by the appointed members
of the Executive Board or former members of the Executive Board with current service
contracts under TUI AG's pension plan
Addition to / reversal Net present value
from pension provisions
EUR '000 2023 2022 30 Sep 2023 30 Sep 2022
Friedrich Joussen 251.2 - 694.7 5,002.3 4,751.1
Sebastian Ebel 727.9 - 140.2 3,006.9 2,279.0
Total 979.1 - 834.9 8,009.2 7,030.1
For the pension obligations of Mr Ebel and Mr Rosenberger,
corresponding assets were transferred in each case to a trustee on
a fiduciary basis in line with the contractual agreement in order
to finance the pension rights and to secure them in case of a
security event.
Due to the appointment of Mr Ebel as Chairman of the Executive
Board from 1 October 2022, his commitment was amended in financial
year 2023. According to addendum no. 7 paragraph 3.e. dated 29 July
2022 to the service agreement between TUI AG and Mr Ebel, the
pension contribution will increase from EUR 207,000 to EUR
454,500.
I.2 BENEFITS IN THE EVENT OF PREMATURE TERMINATION OF BOARD
MEMBERSHIP
The payments to be made to a member of the Executive Board in
the event of premature termination of his employment contract
without good cause are limited in principle in Mr Ebel's service
agreement to the value of two years' remuneration (severance
payment cap).
In the service agreements of Mr Burling, Mr Kiep, Mr Krueger, Ms
Reiss and Mr Rosenberger, it is agreed that payments in the event
of premature termination of their Executive Board activities
without good cause may not exceed the value of one year's
remuneration (severance payment cap).
For all members of the Executive Board, no more than the
remaining term of the service agreement is compensated. For the
calculation of the severance payment cap, the target direct
remuneration (fixed remuneration, target amount of the STI and
target amount of the LTIP) of the past financial year and, if
applicable, also the expected target direct remuneration for the
current financial year are taken into account. If the service
agreement is terminated for cause, the members of the Executive
Board do not receive any benefits.
If the appointment of a member of the Executive Board is
revoked, the respective service agreement shall also end. If the
revocation is not based on a reason which at the same time
constitutes an important reason for termination of the service
agreement without notice, the service agreement shall end upon
expiry of a period of expiry. This expiry period is generally
twelve months.
In the event of premature termination of the service contract,
the STI and the payments from the LTIP are regulated as
follows:
-- STI:? If the service agreement is terminated by the Company
before the end of the one-year performanceperiod for good cause for
which the member of the Executive Board is responsible, or if the
member of theExecutive Board resigns without good cause, the
entitlement to an annual bonus for the performance period
inquestion shall lapse without replacement or compensation. ? In
all other cases of early termination of the service agreement
before the end of the one-yearperformance period, the STI shall be
paid pro rata temporis.
-- LTIP:? Claims under the LTIP shall lapse without replacement
or compensation for all tranches not yetdisbursed if the service
agreement is terminated by TUI AG before the end of the performance
period for causefor which the Executive Board member is responsible
or by the Executive Board member without cause. ? If the service
agreement ends before the end of the performance period for other
reasons, theentitlements under the LTIP for tranches not yet paid
out are retained. The tranche for the current financialyear is
reduced pro rata temporis. The amount to be paid out is determined
in the same way as in the case of acontinuation of the service
agreement.
In connection with the stabilisation measures and associated
remuneration restrictions, it was agreed with Mr Joussen and Mr
Burling that they could unilaterally resign from their positions as
members of the Executive Board from 1 June 2022 with a notice
period of three months to 30 September 2022, whereby JEV and LTIP
would be paid out in accordance with the contract and would not
lapse. On 24 June 2022, Mr Joussen exercised his right of
resignation from his office as member of the Executive Board of TUI
AG ahead of schedule as per 30 September 2022. During the agreed
expiry period of 24 months, TUI AG has agreed to process the
service agreement in accordance with the service agreement until
the termination date. Mr Burling did not exercise his right of
resignation.
TUI AG shall be entitled to release the members of the Executive
Board in connection with a termination of the service agreement, in
particular following a termination of this service agreement,
irrespective of the party declaring which such termination, or
following the conclusion of a termination agreement, in whole or in
part from the obligation to perform work with continued payment of
remuneration. The release shall initially be irrevocable for the
duration of any outstanding holiday entitlements, which are thereby
settled. Subsequently, the release shall be maintained until the
termination of the service agreement. It is revocable if there are
questions in connection with the settlement of the employment
relationship or if a temporary activity becomes necessary for
operational reasons.
The rest of the service agreement is not affected by this. The
service agreements of the members of the Executive Board do not
contain any change of control clauses.
I.3 BENEFITS AND BENEFIT COMMITMENTS TO MEMBERS OF THE EXECUTIVE
BOARD WHO HAVE LEFT THE EXECUTIVE BOARD IN FINANCIAL YEAR 2023
In financial year 2023, Mr Frank Rosenberger resigned from TUI
AG's Executive Board. Mr Rosenberger was originally appointed as a
member of TUI AG's Executive Board until the end of 31 December
2023. TUI AG and Mr Rosenberger terminated the Executive Board
mandate prematurely by mutual agreement as per the end of 31
October 2022. On the occasion of the termination, TUI AG concluded
a termination agreement with Mr Rosenberger. The subject matter of
the termination agreement included the continuation of the service
agreement until the end of the regular termination date, i. e.
until 31 December 2023. TUI AG promised Mr Rosenberger that his
remuneration would be settled in accordance with the contract until
the termination date of the service agreement. The fringe benefits
and the company car were only granted until the termination of the
Executive Board mandate.
II. REMUNERATION RESTRICTIONS BASED ON THE FRAMEWORK AGREEMENT
WITH THE ECONOMIC STABILISATION FUND
Principle
On 4 January 2021, TUI AG had concluded a framework agreement
with the Economic Stabilisation Fund
(Wirtschaftsstabilisierungsfonds - WSF) on the granting of
stabilisation measures, which sets out various requirements for the
remuneration of Executive Board members during the utilisation of
stabilisation measures (Framework Agreement II). According to this
agreement, any member of the Executive Board already appointed on
31 December 2019 was not allowed to receive any remuneration in
excess of the basic remuneration of this member of the Executive
Board as at 31 December 2019 (including any Group remuneration in
the event of dual employment at another Group Company), as long as
at least 75 % of the stabilisation measure had not been repaid. The
framework agreement also stipulated that, as long as TUI AG makes
use of the stabilisation measure, it would not grant and thus not
constitute any bonuses, other variable or comparable remuneration
components or special payments in the form of share packages,
bonuses or other separate remuneration in addition to the fixed
salary, other remuneration components and benefits at the
discretion of the Company or severance payments not required by law
to members of the Executive Board 'including any Group
remuneration'.
For members of the Executive Board who were appointed as members
of the Executive Board at the time the stabilisation measure was
granted or thereafter, the upper limit was the basic remuneration
of members of the Executive Board with the same level of
responsibility as at 31 December 2019.
The WSF stabilisation measures were repaid with effect from 27
April 2023. The conditions and covenants to be fulfilled by TUI
under Framework Agreement II generally ended on the stabilisation
termination date.
Procedure
TUI AG had agreed corresponding amendments to the service
agreements with all Executive Board members, adjusting the benefits
generally promised under the remuneration system to the
remuneration restrictions agreed with the Economic Stabilisation
Fund.
Due to the corresponding amendment of the service agreements and
the waivers of the Executive Board members, TUI AG deviated until
termination of the WSF stabilization measures from the remuneration
system in place in financial year 2023 with regard to the Short
Term Incentive (STI) and the Long Term Incentive Plan (LTIP). The
deviation was in the interest of TUI AG and was a prerequisite for
TUI AG to be able to took advantage of stabilisation measures in
accordance with the Economic Stabilisation Fund Act, if required.
Apart from that, there were no deviations from the current
remuneration system in financial year 2023.
III. OVERVIEW: INDIVIDUAL REMUNERATION OF THE MEMBERS OF THE
EXECUTIVE BOARD
III.1 ACHIEVEMENT OF TARGETS
The following describes how the performance criteria were
applied and the targets for the variable remuneration components
were achieved in financial year 2023.
III.1.1 STI
The multiplication of the target amounts with the weighted
target achievement levels for EBIT and cash flow and the individual
performance factor results in the amount taken into account for the
payment of the STI per member of the Executive Board.
With regard to STI's individual performance factor for the
financial year 2023, the Supervisory Board decided to define
individual targets, success criteria for the performance of the
entire Executive Board and success criteria for the stakeholder
targets. The company-wide transformation process and the
prioritisation and implementation of the IT roadmap were key
objectives here. Furthermore, the focus was on customer and
employee satisfaction.
In addition, the members of the Executive Board have been given
ESG targets. These include the implementation of emission reduction
plans in the cruise segment, the definition and agreement of
industry-leading standards for new construction and renovation in
the hotel sector, and targets related to Sustainable Fuel (SAF)
procurement.
Following the termination of the remuneration restrictions, the
Supervisory Board has also re-established target achievement for
EBIT (reported) and cash flow. The 2023 summer programme showed a
strong performance, exceeding the previous year and almost matching
the pre-pandemic level. Challenging factors, especially at the
beginning of the financial year 2023, were the fuel and exchange
rate developments. In addition, events beyond TUI's control, such
as the forest fires in Rhodes, were recorded. Despite these
factors, reported earnings rose significantly year-on-year and EBIT
(reported) showed a degree of target achievement of 119 %. The cash
flow1 showed a degree of target achievement of 67 %. Taking into
account the weighting of the key figures, this leads to an overall
target achievement of around 106 % for STI 2023. Thus, in the 2023
financial year, there is remuneration granted and owed within the
meaning of § 162 para. 1 sentence 1, sentence 2 no. 1 of the German
Stock Corporation Act (AktG) from the STI for the financial year
2023.2
1 For a detailed definition of cash flow, please refer to the
section 'Value-oriented Group management' in the summarised
management report.
2 The definition of the remuneration granted and owed within the
meaning of Section 162 para. 1 sentence 1, sentence 2 no. 1 AktG
can be found in Section III. 3.1.
Following the end of the remuneration restrictions, the
Supervisory Board again set an individual performance factor for
each member of the Executive Board based on the targets set for the
financial year 2023 as a precautionary measure despite the
remuneration restrictions in place at the time. Overall,
multiplying the target amounts by the weighted target achievement
levels for EBIT and cash flow as well as the individual performance
factor results in an STI for the members of the Executive Board
that is commensurate with the results of the financial year. After
evaluation, the Supervisory Board came to the following conclusions
regarding the individual performance factor: Sebastian Ebel: 1.2;
David Burling: 1.2; Mathias Kiep: 1.2; Peter Krueger: 1.2 and
Sybille Reiss: 1.2. The factor 1.0 was defined for the former
Executive Board members Friedrich Joussen and Frank Rosenberger,
who still have service agreements that are due to expire.
III.1.2 LTIP
The payment of the LTIP tranche 2020 - 2023 is governed by the
provisions of the remuneration system, which came into effect
retroactively as of 1 October 2019.
The LTIP tranche was based on an average TUI AG share price of
EUR 9.87 at the time of allocation. At the end of the performance
period, TUI AG's average stock price was EUR 5.44. Due to the
development of the EPS during the years of the COVID-19 pandemic,
no target achievement level could be reached. The EPS were below
the EUR 0.50 mark for financial years 2020, 2021 and 2022, at which
point the Supervisory Board is to set new absolute target values
for the EPS as well as minimum and maximum values for determining
the percentage target achievement in accordance with the relevant
remuneration system. After the termination of the remuneration
restrictions, the Supervisory Board defined corresponding absolute
values. For the past financial years with negative EPS, a target
achievement of 0 was defined. For the respective remaining terms,
the absolute EPS target values were determined on the basis of the
original approved planning at the beginning of the respective
performance period. For the LTIP tranche 2020 - 2023, there is no
remuneration granted and owed in December 2023 within the meaning
of Section 162 para. 1 sentence 1, sentence 2 no. 1 AktG.2
III.2 LOANS OR ADVANCES
No loans or advances were granted to the members of the
Executive Board in financial year 2023, as in the previous year and
the previous years.
III.3 APPLICATIONS
III.3.1 'REMUNERATION GRANTED AND OWED' WITHIN THE MEANING OF
SECTION 162 (1) SENTENCE 1 AKTG IN FINANCIAL YEAR 2023
Pursuant to Section 162 para. 1 sentence 1, sentence 2 no. 1
AktG, all fixed and variable remuneration components 'granted and
owed' to the individual members of the Executive Board in financial
year 2023 must be disclosed. The values stated for both the STI and
the LTIP for financial year 2023 refer to the remuneration
components 'granted and owed' in the respective financial year
pursuant to Section 162 (1) sentence 1 AktG. They thus include all
benefits earned in the respective financial year. The value of the
STI therefore corresponds to the amount for the STI for financial
year 2023, which would not be paid out until financial year 2024 in
accordance with the service agreement. The value of the LTIP
tranche 2020 - 2023 therefore corresponds in value to the amount
for the LTIP whose four-year term ended on 30 September 2023, but
which would not be paid out until the 2024 financial year in
accordance with the service agreement.
In the financial year 2023, the members of the Executive Board
neither received nor were promised benefits from third parties with
regard to their activities on the Executive Board.
Remuneration 'granted and owed remuneration' pursuant to section 162 (1) sentence 1 AktG
Mathias Kiep
Sebastian Ebel David Burling Member of the Executive
CEO, Member of the Executive Board,
since 1 October 2022 Board, since 1 October 2022
since 1 June 2015
Table continues on next page
EUR '000 in %2 EUR '000 in %2 EUR '000 in %2 EUR '000 in %2 EUR '000 in %2 EUR '000 in %2
2022 2023 2022 2023 2022 2023
Fixed remuneration 680.0 70.7 1,100.0 36.5 680.0 73.6 680.0 43.3 0.0 0.0 600.0 41.7
Fringe benefits3 18.0 1.9 18.0 0.6 19.2 2.1 30.3 1.9 0.0 0.0 18.0 1.3
Total 698.0 72.6 1,118.0 37.1 699.2 75.7 710.3 45.2 0.0 0.0 618.0 42.9
STI 0.0 0.0 1,615.5 53.6 0.0 0.0 636.0 40.5 0.0 0.0 591.5 41.1
LTIP
LTIP Tranche (2019 - 2022) 0.0 0.0 0.0 0.0
LTIP Tranche (2020 - 2023) 0.0 0.0 0.0 0.0
Others 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Claw back according to § 162 para.
1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
sen. 2 no. 4 AktG4
Total 698.0 72.6 2,733.5 90.6 699.2 75.7 1,346.3 85.7 0.0 0.0 1,209.5 84.0
Pension / service costs5 263.5 27.4 282.8 9.4 225.0 24.3 225.0 14.3 0.0 0.0 230.0 16.0
Total remuneration 961.5 100.0 3,016.3 100.0 924.2 100.0 1,571.3 100.0 0.0 0.0 1,439.5 100.0
1 Member of the Executive Board since 15 October 2012 until 30
September 2022; Co-Chairman of the Executive Board from 9 December
2014 to 9 February 2016.
2 The relative shares stated here refer to the remuneration
components 'granted and owed' in the respective financial year in
accordance with section 162 (1) sentence 1 AktG. They thus include
all benefits actually granted in the respective financial year,
irrespective of the financial year for which they were paid to the
Executive Board members. The relative shares are therefore not
comparable with the relative shares in the description of the
remuneration system pursuant to section 87a (1) no. 3 AktG, which
will be submitted to the Annual General Meeting together with this
Remuneration Report. The shares stated in the remuneration system
refer to the respective target values.
3 Without insurance from group contracts.
4 The service agreements of the members of the Executive Board
include - in accordance with the remuneration system adopted by the
Supervisory Board in December 2019 - a compliance malus and
clawback provision. In financial year 2023 TUI AG did not use this
provision.
5 For Mr Ebel, Mr Joussen and Mr Rosenberger service costs
according to IAS 19, therefore not constituting 'awarded and owed'
remuneration' within the meaning of section 162 (1) sentence 1
AktG. For Mr Burling, Mr Kiep, Mr Krueger and Mrs Reiss payments
for pension contribution and therefor part of 'awarded and owed'
remuneration within the meaning of Section 162 (1) sentence 1
AktG.
6 Member of the Executive Board until 31 October 2022.
Remuneration 'granted and owed remuneration' pursuant to section 162 (1) sentence 1 AktG
Continued from previous page
Peter Krueger Sybille Reiss
Member of the Executive Board, Member of the Executive Board,
since 1 January 2021 since 1 July 2021
EUR '000 in %2 EUR '000 in %2 EUR '000 in %2 EUR '000 in %2
2022 2023 2022 2023
Fixed remuneration 600.0 70.8 600.0 41.7 600.0 70.8 600.0 41.7
Fringe benefits3 18.0 2.1 18.0 1.3 18.0 2.1 18.0 1.3
Total 618.0 72.9 618.0 42.9 618.0 72.9 618.0 42.9
STI 0.0 0.0 591.5 41.1 0.0 0.0 591.5 41.1
LTIP
LTIP Tranche (2019 - 2022)
LTIP Tranche (2020 - 2023)
Others 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Claw back according to § 162 para. 1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
sen. 2 no. 4 AktG4
Total 618.0 72.9 1,209.5 84.0 618.0 72.9 1,209.5 84.0
Pension / service costs5 230.0 27.1 230.0 16.0 230.0 27.1 230.0 16.0
Table continues on next page
Total remuneration 848.0 100.0 1,439.5 100.0 848.0 100.0 1,439.5
100.0
1 Member of the Executive Board since 15 October 2012 until 30
September 2022; Co-Chairman of the Executive Board from 9 December
2014 to 9 February 2016.
2 The relative shares stated here refer to the remuneration
components 'granted and owed' in the respective financial year in
accordance with section 162 (1) sentence 1 AktG. They thus include
all benefits actually granted in the respective financial year,
irrespective of the financial year for which they were paid to the
Executive Board members. The relative shares are therefore not
comparable with the relative shares in the description of the
remuneration system pursuant to section 87a (1) no. 3 AktG, which
will be submitted to the Annual General Meeting together with this
Remuneration Report. The shares stated in the remuneration system
refer to the respective target values.
3 Without insurance from group contracts.
4 The service agreements of the members of the Executive Board
include - in accordance with the remuneration system adopted by the
Supervisory Board in December 2019 - a compliance malus and
clawback provision. In financial year 2023 TUI AG did not use this
provision.
5 For Mr Ebel, Mr Joussen and Mr Rosenberger service costs
according to IAS 19, therefore not constituting 'awarded and owed'
remuneration' within the meaning of section 162 (1) sentence 1
AktG. For Mr Burling, Mr Kiep, Mr Krueger and Mrs Reiss payments
for pension contribution and therefor part of 'awarded and owed'
remuneration within the meaning of Section 162 (1) sentence 1
AktG.
6 Member of the Executive Board until 31 October 2022.
Remuneration 'granted and owed remuneration' pursuant to section 162 (1) sentence 1 AktG
Continued from previous page
Friedrich Joussen Frank Rosenberger
CEO, Member of the Executive Board,
since 14 February 20131 since 1 January 20176
EUR '000 in %2 EUR '000 in %2 EUR '000 in %2 EUR '000 in %2
2022 2023 2022 2023
Fixed remuneration 1,100.0 63.6 1,100.0 37.9 600.0 60.8 600.0 54.2
Fringe benefits3 57.6 3.3 0.0 0.0 25.2 2.6 13.3 1.2
Total 1,157.6 66.9 1,100.0 37.9 625.2 63.3 613.3 55.4
STI 0.0 0.0 1,346.2 46.4 0.0 0.0 492.9 44.6
LTIP
LTIP Tranche (2019 - 2022) 0.0 0.0 0.0 0.0
LTIP Tranche (2020 - 2023) 0.0 0.0 0.0 0.0
Others 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Claw back according to § 162 para. 1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
sen. 2 no. 4 AktG4
Total 1,157.6 66.9 2,446.2 84.4 625.2 63.3 1,106.2 100.0
Pension / service costs5 571.6 33.1 452.9 15.6 362.3 36.7 0.0 0.0
Total remuneration 1,729.2 100.0 2,899.1 100.0 987.5 100.0 1,106.2 100.0
1 Member of the Executive Board since 15 October 2012 until 30
September 2022; Co-Chairman of the Executive Board from 9 December
2014 to 9 February 2016.
2 The relative shares stated here refer to the remuneration
components 'granted and owed' in the respective financial year in
accordance with section 162 (1) sentence 1 AktG. They thus include
all benefits actually granted in the respective financial year,
irrespective of the financial year for which they were paid to the
Executive Board members. The relative shares are therefore not
comparable with the relative shares in the description of the
remuneration system pursuant to section 87a (1) no. 3 AktG, which
will be submitted to the Annual General Meeting together with this
Remuneration Report. The shares stated in the remuneration system
refer to the respective target values.
3 Without insurance from group contracts.
4 The service agreements of the members of the Executive Board
include - in accordance with the remuneration system adopted by the
Supervisory Board in December 2019 - a compliance malus and
clawback provision. In financial year 2023 TUI AG did not use this
provision.
5 For Mr Ebel, Mr Joussen and Mr Rosenberger service costs
according to IAS 19, therefore not constituting 'awarded and owed'
remuneration' within the meaning of section 162 (1) sentence 1
AktG. For Mr Burling, Mr Kiep, Mr Krueger and Mrs Reiss payments
for pension contribution and therefor part of 'awarded and owed'
remuneration within the meaning of Section 162 (1) sentence 1
AktG.
6 Member of the Executive Board until 31 October 2022.
III.3.2 COMPLIANCE WITH THE MAXIMUM REMUNERATION AS REMUNERATION
CAPS
For financial year 2023, in addition to the maximum amounts for
the one-year and multi-year variable remuneration, a maximum amount
for the remuneration for financial year as a whole (including
fringe benefits and pension commitment) is provided for in
accordance with Section 87a para. 1 sentence 2 no. 1 AktG. This
maximum remuneration is EUR 7.5 m for the Chairman of the Executive
Board and EUR 3.5 m for an ordinary member of the Executive Board
and relates to the remuneration granted for a financial year. If
the remuneration for financial year 2023 exceeds the aforementioned
maximum limit, the LTIP will be reduced accordingly. As the
multi-year variable remuneration component is not available until
the third year after the end of the reporting year due to the
four-year performance period, compliance with the maximum
remuneration for financial year 2023 can only be reported
conclusively as part of the Remuneration Report for financial year
2026.
III.3.3 COMPARISON OF THE ANNUAL CHANGE IN THE REMUNERATION OF
THE MEMBERS OF THE EXECUTIVE BOARD WITH THE DEVELOPMENT OF EARNINGS
AND THE AVERAGE REMUNERATION OF EMPLOYEES OF TUI AG
The following table shows a comparison of the percentage change
in the remuneration of the Executive Board members with the
development of TUI AG's earnings and with the average remuneration
of employees on a full-time equivalent basis as against the
previous financial year.* The remuneration of the Executive Board
members included in the table reflects the benefits earned in the
respective financial year. For active members of the Executive
Board, these values for financial year 2023 correspond to the
values stated in the table 'Remuneration granted and owed within
the meaning of Section 162 (1) sentence 1 AktG'.
As a matter of principle, the development of earnings is
presented on the basis of the development of TUI AG's net profit
for the year in accordance with Section 275 (2) no 17 of the German
Commercial Code (HGB). Since the remuneration of the Executive
Board members also depends to a significant extent on the
development of Group key figures, TUI Group's earnings trend also
includes the development of TUI Group's underlying EBIT shown in
the consolidated financial statements for financial years 2020,
2021, 2022 and 2023 and TUI Group's underlying EBITA shown in the
consolidated financial statements for financial years 2018 and
2019.
The comparison with the development of average employee
remuneration is based on the average remuneration of TUI AG's
workforce. Since the employee and remuneration structures in the
subsidiaries are diverse, in particular in the case of employees
abroad, it is appropriate to base the comparison of the development
of average remuneration only on TUI AG's workforce. This
comparative group was also used to review the appropriateness of
the remuneration of the Executive Board members. The remuneration
of all employees, including executive employees within the meaning
of Section 5 (3) German Works Council Constitution Act
(Betriebsverfassungsgesetz - BetrVG), was taken into account. Where
employees also received remuneration as members of TUI AG's
Supervisory Board, this remuneration was not taken into account. In
order to ensure comparability, the remuneration of part-time
employees was extrapolated to full-time equivalents.
* Pursuant to Section 26j, paragraph 2, sentence 2 of the
Introductory Act to the Stock Corporation Act (EGAktG), a
comparison of the average remuneration of employees on a full-time
equivalent basis over the last five financial years pursuant to
Section 162, paragraph 1, sentence 2, no. 2 of the Stock
Corporation Act (AktG) is not yet to be included in the
Remuneration Report.
Comparison of annual change to Executive Board remuneration according to
section 162 (para 1) no. 2 AktG
Annual change (in %) 2023 vs. 2022 2022 vs. 20216 2021 vs. 2020 2020 vs. 2019 2019 vs. 2018
Executive Board remuneration1
Sebastian Ebel 252 0 4 - 2 - 58
(CEO since 1 October 2022)
David Burling 70 0 7 - 8 - 55
Mathias Kiep
Peter Krueger7 70 33
Sybille Reiss7 70 300
Friedrich Joussen 80 0 5 - 1 - 74
(CEO until 30 September 2022)
Frank Rosenberger 56 - 1 5 - 1 - 45
(CIO until 31 October 2022)
Horst Baier 7 0 5 10 - 73
(CFO until 30 September 2018)2
Birgit Conix - 100 - 32 - 4 144
(CFO until 31 December 2020)
Dr Elke Eller - 97 - 1 0 - 48
(CHRO until 30 June 2021)
Earnings performance
TUI AG3 3 - 177 30 - 1,994 - 88
TUI Group4 139 120 69 - 435 - 22
Average employee remuneration
on FTE basis
Company employees5 30 10 6 - 2
1 Remuneration granted and owed within the meaning of section
162 (1) sentence 1 AktG (fixed remuneration, STI, LTIP, fringe
benefits and fixed annual pension payment for Mr Burling, Mr Kiep,
Mr Krueger and Ms Reiss). In addition to the active members of the
Executive Board, those former Executive Board members were taken
into account who still received remuneration from their active
activities within the comparison period.
2 Mr Baier received a payout from his pension plan in financial
years 2019 to 2023. In financial year 2021, he received a final
payout from the remuneration paid and owed from the 2017 / 2020
LTIP tranche.
3 Annual result within the meaning of section 275 para 2 no. 17
HGB.
4 Adjusted EBIT of TUI Group for financial years 2023, 2022,
2021 and 2020. For financial years 2018 and 2019, adjusted EBITA of
TUI Group.
5 Due to the improved company result, higher variable
remuneration was paid out this year than in the previous year.
Tariff increases and related increases for non-tariff employees are
also relevant in this context.
6 The comparison for financial years 2021 and 2022 was based on
the amended definition of remuneration granted and owed pursuant to
section 162 (1) no. 2 AktG.
7 Pro rata remuneration in financial year 2021.
REVIEW OF THE APPROPRIATENESS OF EXECUTIVE BOARD REMUNERATION
AND PENSIONS
The Supervisory Board conducted the annual review of the
Executive Board remuneration and pensions for financial year 2023.
It came to the conclusion that the amount of the Executive Board
remuneration and the pensions are appropriate from a legal point of
view pursuant to Section 87 (1) of the German Stock Corporation Act
(AktG).
For the assessment of the appropriateness of the Executive Board
remuneration and pensions, the Supervisory Board also regularly
calls on external advice. This involves assessing the relationship
between the amount and structure of Executive Board remuneration
and the remuneration of senior management and the workforce as a
whole from an external perspective (vertical comparison). In
addition to a status quo analysis, the vertical comparison also
takes into account the development of remuneration ratios over
time. Secondly, the remuneration level and structure are assessed
on the basis of TUI AG's positioning in a comparative market
(horizontal comparison). The entirety of the companies listed in
the DAX and MDAX was used as a comparison group. In addition to the
fixed remuneration, the horizontal comparison also includes the
short- and long-term remuneration components as well as the amount
of the Company pension plan.
After the termination of the remuneration restrictions, the
Supervisory Board did againa corresponding expert opinion on the
appropriateness of the remuneration level for members of the
Executive Board for financial year 2023. For financial year 2023,
the consulting firm hkp group was commissioned to prepare an expert
opinion on the appropriateness of the level of remuneration for
Executive Board members. The partner of hkp group commissioned to
carry out the survey does not have any dependent relationship with
TUI AG's Executive Board or the Company. The findings of the
external consultant confirm the Supervisory Board's assessment that
the level of Executive Board remuneration is in line with the
requirements of section 87 (1) of the German Stock Corporation Act
(AktG) and the recommendations of the GCGC.
III.3.4 BENEFITS TO FORMER MEMBERS OF THE EXECUTIVE BOARD
For former members of the Executive Board and their surviving
dependents, total pension payments in financial year 2023 amounted
to EUR 6,361.9 k (previous year EUR 6,248.9 k). Of this amount, EUR
968.9 k was attributable to Michael Frenzel, who left the Executive
Board on 31 March 2014, and EUR 1,069.0 k to Horst Baier, who left
the Executive Board on 30 September 2018, in financial year 2023.
The remaining payments related to former members of the Executive
Board who left TUI AG's Executive Board more than ten years
ago.
At the balance sheet date, pension provisions for former members
of the Executive Board and their surviving dependants totalled EUR
59,098.9 k (previous year EUR 62,985.5 k) measured in accordance
with IAS 19 - excluding Mr Ebel's entitlements of EUR 3,796.0 k
(previous year EUR 4,210.9 k) earned in the framework of his
service for TUI Group before 31 August 2006.
TUI AG and Dr Eller agreed on the premature termination of the
Executive Board mandate and the Labour Director mandate as per 30
June 2021. On the occasion of the termination, TUI AG concluded a
termination agreement with Dr Eller. The subject matter of the
termination agreement included the continuation of the employment
contract until the end of the regular termination date, i. e. until
14 October 2021. TUI AG has agreed to Dr Eller that it would
continue to pay her remuneration in accordance with the service
agreement until the termination date of the service agreement. TUI
AG also continued to make contributions to the Company pension
scheme until that date. No entitlement arose from the LTIP 2020 -
2023 in the financial year 2023.
On 24 June 2022, Mr Friedrich Joussen exercised his right to
resign from his office as member of the Executive Board prematurely
as of 30 September 2022. In the event of the right to resign being
exercised, an expiry period of 24 months had been agreed. During
this expiry period, TUI AG undertook to perform the service
agreement in accordance with the contract until the termination
date. TUI AG will continue to pay contributions to the company
pension scheme until that date. In financial year 2023, Mr Joussen
was thus entitled to a fixed remuneration of EUR 1,100.0 k and a
variable remuneration of EUR 1,346.2 k.
TUI AG and Mr Frank Rosenberger agreed on the premature
termination of his Executive Board mandate with effect from the end
of 31 October 2022. On the occasion of the termination, TUI AG
concluded a termination agreement with Mr Rosenberger. The subject
matter of the termination agreement included the continuation of
the service agreement until the end of the regular termination
date, i. e. until the end of 31 December 2023. TUI AG agreed to pay
Mr Rosenberger his remuneration in accordance with the contract
until the termination date of the service agreement. TUI AG will
also continue to make contributions to the company pension scheme
until that date. Following the premature termination of his
Executive Board mandate with effect from 31 October 2022, Mr
Rosenberger was thus entitled to a pro rata fixed remuneration of
EUR 550.0 k and variable remuneration of EUR 492.9 k in financial
year 2023.
Supervisory Board and Supervisory Board Remuneration
CONFIRMATION OF THE REMUNERATION SYSTEM BY THE SHAREHOLDERS
According to the German Stock Corporation Act (AktG) in the
version of the SRD II, the Annual General Meeting of a listed
Company must resolve on the remuneration of the members of the
Supervisory Board at least every four years. A resolution
confirming the existing remuneration is also permissible. The
resolution must comply with new formal requirements. Such a
resolution was passed by the Annual General Meeting on 25 March
2021. The remuneration system for the members of the Supervisory
Board was approved by 99.7 % and thus adopted. In addition, the
Remuneration Report prepared and audited in accordance with Section
162 of the German Stock Corporation Act (AktG) for financial year
ended 30 September 2021 was approved by the shareholders of TUI AG
on 08 February 2022 with 98.72 %. Furthermore, the remuneration
report prepared and audited within the meaning of section 162 of
the German Stock Corporation Act (AktG) for the financial year
ended 30 September 2022 was approved by the shareholders of TUI AG
on 14 February 2023 by 97.62 %.
COMPOSITION OF THE SUPERVISORY BOARD
In accordance with the Articles of Association, the Supervisory
Board of TUI AG comprises a total of 20 members. At the Annual
General Meeting on 14 February 2023, there were three new or
renewed mandates to be filled by shareholder representatives.
Composition of the Supervisory Board
Dr Dieter Zetsche Member since 13 February 2018,
Chairman
Frank Jakobi* Member since 15 August 2007,
Vice-Chairman
Ingrid-Helen Arnold Member since 11 February 2020
Sonja Austermühle* Member since 1 April 2022
Christian Baier Member since 31 May 2022
Andreas Barczweski* Member since 10 May 2006
Peter Bremme* Member since 2 July 2014
Dr Jutta Dönges Member since 25 March 2021
Prof. Dr Edgar Ernst Member since 9 February 2011
Wolfgang Flintermann* Member since 13 June 2016
María Garaña Corces Member since 11 February 2020
Stefan Heinemann* Member since 21 July 2020
Janina Kugel Member since 25 March 2021
Helena Murano Member since 31 May 2022
Mark Muratovic* Member since 25 March 2021
Coline McConville Member since 11 December 2014
Anette Strempel* Member since 2 January 2009
Joan Trían Riu Member since 12 February 2019
Tanja Viehl* Member since 25 March 2021
Stefan Weinhofer* Member since 9 February 2016
* Employee representatives
I. REMUNERATION OF THE SUPERVISORY BOARD IN FINANCIAL YEAR
2023
The rules and remuneration of the members of the Supervisory
Board are set out in Section 18 of TUI AG's Articles of
Association, permanently accessible to the public on the internet.
Supervisory Board remuneration is reviewed at appropriate
intervals. It takes account of the expected time commitment for the
mandate and the practice in companies of a comparable size,
industry and complexity.
The aim is to attract and retain highly qualified members of the Supervisory Board. This will
promote the efficiency of the Supervisory Board's work and the long-term development of TUI
AG.
-- Chairman: EUR 270.0 k
(1) Fixed -- Vice-Chairman: EUR 180.0 k
remuneration -- Member: EUR 90.0 k
Supervisory Target -- In each case plus the value-added tax on the remuneration
Board
In accordance with the provisions of TUI AG's Articles of Association, retired members of the
Supervisory Board shall receive (pro rata temporis) fixed remuneration from TUI AG for the
last time immediately after the end of financial year in which they resigned for the duration
of their membership of TUI AG's Supervisory Board. After the final payment of the (pro rata
temporis) fixed remuneration, retired members of the Supervisory Board shall no longer
receive any remuneration from TUI AG for their former Supervisory Board activities.
Presiding
Committee
-- Chairman: EUR 42.0 k
Audit -- Member: EUR 42.0 k
(2) Fixed Committee
remuneration -- Chairman: EUR 126.0 k
Committees -- Member: EUR 42.0 k
Nominating -- None
Committee -- None
Transaction
committees
-- Supervisory Board: EUR 1.0 k per meeting
(3) -- Presiding Committee: EUR 1.0 k per meeting
Attendance -- Audit Committee: EUR 1.0 k per meeting
fees -- Nomination Committee: EUR 1.0 k per meeting
-- Transaction Committees: none
Since the remuneration of the members of the Supervisory Board does not consist of variable
but exclusively of fixed components, there is no need to determine a maximum total
(4) Maximum remuneration for the members of the Supervisory Board. The provisions of the German Stock
remuneration Corporation Act (AktG) in the version of the SRD II expressly provide for the determination
of a maximum remuneration only for the members of the Executive Board, but not for the
members of the Supervisory Board.
In addition, the members of the Supervisory Board are included in a pecuniary damage
(5) D&O TARGET liability insurance policy (so-called D&O insurance) taken out by the Company in the interest
of the Company at an appropriate amount. The premiums for this are paid by the Company. There
is no deductible.
I.1 TOTAL REMUNERATION OF THE SUPERVISORY BOARD
I.1.1 REMUNERATION 'GRANTED AND OWED' WITHIN THE MEANING OF
SECTION 162 PARA. 1 SENTENCE 1 OF THE GERMAN STOCK CORPORATION ACT
(AKTG) IN FINANCIAL YEAR 2023
Pursuant to Section 162 (1) sentence 1, sentence 2 no. 1 AktG,
all fixed and variable remuneration components 'granted and owed'
to the individual members of the Supervisory Board in financial
year 2023 must be disclosed. The values stated refer to the
remuneration components 'granted and owed' in the respective
financial year pursuant to Section 162 (1) sentence 1 AktG. They
thus include all benefits earned in the respective financial year,
regardless of whether they were received by the members of the
Supervisory Board in the respective financial year. In terms of
value, the amounts for financial year 2023 are therefore also taken
into account, which, according to the Articles of Association, will
only be paid out in financial year 2024. The remuneration granted
and owed to the Supervisory Board includes the fixed remuneration
earned for financial year 2023, but which, according to the
Articles of Association, will only be paid in financial year 2024.
The attendance fees, on the other hand, are usually paid
immediately after the respective meetings, so that the attendance
fees for the Supervisory Board meetings in 2023 were also paid in
the financial year 2023.
Total remuneration granted and owed to the Supervisory Board
EUR '000 2023 2022
Fixed remuneration 2,070.0 1,980.9
Remuneration for committee memberships 672.0 906.3
Attendance fees 292.0 245.0
Total remuneration for TUI AG Supervisory Board mandate 3,034.0 3,132.2
Remuneration for Supervisory Board mandates in the Group 47.7 50.7
Total 3,081.7 3,182.9
In addition, travel costs and expenses amounting to EUR 41.9 k
(previous year EUR 72.5 k) were reimbursed. The remuneration of the
Supervisory Board in financial year 2023, together with the
reimbursement of travel costs and expenses, amounted to EUR 3,123.6
k (previous year EUR 3,255.4 k).
I.2. REMUNERATION 'GRANTED AND OWED' WITHIN THE MEANING OF
SECTION 162 PARA. 1 SENTENCE 1 OF THE GERMAN STOCK CORPORATION ACT
(AKTG) IN FINANCIAL YEAR 2023
Pursuant to Section 162 (1) sentence 1, sentence 2 no. 1 of the
German Stock Corporation Act (AktG), all fixed and variable
remuneration components 'granted and owed' to the individual
members of the Supervisory Board in financial year 2023 must be
disclosed. The values stated refer to the remuneration components
'granted and owed' in the respective financial year pursuant to
Section 162 (1) sentence 1 AktG. They thus include all benefits
earned in the respective financial year, regardless of whether they
were received by the members of the Supervisory Board in the
respective financial year. In terms of value, the amounts for
financial year 2023 are therefore also taken into account, which,
according to the Articles of Association, will only be paid out in
financial year 2024.
Granted and owed remuneration of the Supervisory Board (individual) in FY 2023
Fixed Remuneration for Attendance Remuneration for Supervisory
remuneration committee fees Board
mandates in the Group
EUR '000 in % EUR '000 in % EUR '000 in % EUR '000 in % Total
Dr Dieter Zetsche 270.0 71.4 84.0 22.2 24.0 6.3 378.0
(Chairman)
Frank Jakobi 180.0 62.5 84.0 29.2 24.0 8.3 288.0
(Vice Chairman)
Ingrid-Helen Arnold 90.0 90.9 0.0 9.0 9.1 99.0
Sonja Austermühle 90.0 80.5 0.0 9.0 8.1 12.8 11.4 111.8
Christian Baier 90.0 61.2 42.0 28.6 15.0 10.2 147.0
Andreas Barczewski 90.0 75.0 0.0 10.0 8.3 20.0 16.7 120.0
Peter Bremme 90.0 60.8 42.0 28.4 16.0 10.8 148.0
Dr Jutta Dönges 90.0 46.2 84.0 43.1 21.0 10.8 195.0
Prof. Dr Edgar 90.0 31.8 168.0 59.4 25.0 8.8 283.0
Ernst
Wolfgang 90.0 90.0 0.0 10.0 10.0 100.0
Flintermann
María Garaña Corces 90.0 90.9 0.0 9.0 9.1 99.0
Stefan Heinemann 90.0 60.0 42.0 28.0 18.0 12.0 150.0
Janina Kugel 90.0 90.0 0.0 10.0 10.0 100.0
Coline McConville 90.0 90.0 0.0 10.0 10.0 100.0
Helena Murano 90.0 90.0 0.0 10.0 10.0 100.0
Mark Muratovic 90.0 54.6 42.0 25.5 18.0 10.9 14.9 9.0 164.9
Anette Strempel 90.0 60.8 42.0 28.4 16.0 10.8 148.0
Joan Trían Riu 90.0 90.0 0.0 10.0 10.0 100.0
Tanja Viehl 90.0 90.0 0.0 10.0 10.0 100.0
Stefan Weinhofer 90.0 60.0 42.0 28.0 18.0 12.0 150.0
Total 2,070.0 67.2 672.0 21.8 292.0 9.5 47.7 1.5 3,081.7
I.3 COMPARISON OF THE ANNUAL CHANGE IN THE REMUNERATION OF THE
MEMBERS OF THE SUPERVISORY BOARD WITH THE DEVELOPMENT OF EARNINGS
AND THE AVERAGE REMUNERATION OF TUI AG EMPLOYEES
The following table shows a comparison of the percentage change
in the remuneration of the members of the Supervisory Board with
the development of TUI AG's earnings and with the average
remuneration of employees on a full-time equivalent basis as
against the previous financial year*. The remuneration of the
members of the Supervisory Board included in the table reflects the
amounts earned in the respective financial year. For financial year
2023, these values correspond to the values stated in the table
'Remuneration granted and owed within the meaning of Section 162
(1) sentence 1 AktG'. Where members of the Supervisory Board had
previously been members of TUI AG's Executive Board and had
received remuneration for this, this would not be included in the
comparative presentation. However, this does not apply to any
member of the Supervisory Board.
The development of earnings is generally presented on the basis
of the development of TUI AG's profit for the year in accordance
with Section 275 (2) no 17 of the German Commercial Code (HGB).
The comparison with the development of average employee
remuneration is based on the average remuneration of TUI AG's
workforce. Since the employee and remuneration structures in the
subsidiaries are diverse, in particular in the case of employees
abroad, it is appropriate to base the comparison of the development
of average remuneration only on the workforce of TUI AG. The
remuneration of all employees, including executive staff as defined
in Section 5 (3) of the German Works Constitution Act (BetrVG), was
taken into account. Employee remuneration did not include
remuneration received by employees as members of TUI AG's
Supervisory Board. In order to ensure comparability, the
remuneration of part-time employees was extrapolated to full-time
equivalents.
* Pursuant to Section 26j, paragraph 2, sentence 2 of the
Introductory Act to the Stock Corporation Act (EGAktG), a
comparison of the average remuneration of employees on a full-time
equivalent basis over the last five financial years pursuant to
Section 162, paragraph 1, sentence 2, no. 2 of the Stock
Corporation Act (AktG) is not yet to be included in the
Remuneration Report.
Comparison of annual change to Supervisory Board remuneration according to
section 162 para 1 no. 2 AktG
Annual change (in %) 2023 vs. 2022 2022 vs. 20216 2021 vs. 2020 2020 vs. 2019 2019 vs. 2018
Supervisory Board remuneration1
Dr Dieter Zetsche - 18 2 17 71 268
Frank Jakobi - 13 - 3 18 0 - 6
Ingrid-Helen Arnold 2 - 5 91
Sonja Austermühle 84
Christian Baier 198
Andreas Barczewski 1 - 22 - 6 - 13 5
Peter Bremme 2 - 5 9 - 14 1
Dr Jutta Dönges - 7 111
Prof. Dr Edgar Ernst - 13 4 15 - 6 17
Wolfgang Flintermann 3 - 8 16 - 10 1
María Garaña Corces 2 - 6 96
Angelika Gifford - 47 12 14
Stefan Heinemann 3 12 914
Dr Dierk Hirschel - 46 - 15 3
Janina Kugel 3 81
Peter Long - 46 - 8 21
Vladimir Lukin - 54 47 279
Coline McConville - 29 - 8 10 - 16 3
Alexey Mordashov2 - 96 8 - 8 5
Helena Murano 210
Mark Muratovic 2 92
Michael Pönipp - 34 - 8 2
Carola Schwirn - 62 16 - 21 3
Anette Strempel 2 - 5 8 - 14 0
Joan Trían Riu 3 - 8 16 41
Tanja Viehl 3 78
Stefan Weinhofer 3 12 44 - 10 1
Earnings performance
TUI AG3 3 - 177 30 - 1,994 - 88
TUI Group4 139 120 69 - 435 - 22
Average employee remuneration
on FTE basis
Company employees5 30 10 6 - 2
1 Changes result in particular from the date of entry into the
Supervisory Board, committee membership and the respective date of
resignation.
2 No pay-outs from 28 February 2022 onwards, as Mr Mordashov has
been subject to EU sanctions since that date. Actual pay-outs in
conjunction with the meeting of the Presiding Committee (4 February
2022) and the Supervisory Board (7 February 2022) have been made
prior to listing on sanctions list on 16 February 2022. A pay-out
in conjunction with the meeting of the Strategy Committee (21
February 2022) has not been paid out because of EU sanctions.
3 Annual result within the meaning of section 275 (2) no. 17
HGB.
4 Adjusted EBIT of the TUI Group for financial years 2023, 2022,
2021 and 2020. For financial years 2018 to 2019, adjusted EBITA of
the TUI Group.
5 Due to the improved company result, higher variable
remuneration was paid out this year than in the previous year.
Tariff increases and related increases for non-tariff employees are
also relevant in this context.
6 The comparison for 2021 and 2022 was based on the amended
definition of remuneration granted and owed pursuant to Section 162
(1) no. 2 AktG.
Apart from the work performed by the employee representatives in
the framework of their employment contracts, the members of the
Supervisory Board did not provide any personal services, such as
consultancy or agency services, for TUI AG or its subsidiaries in
financial year 2023 and therefore did not receive any additional
remuneration based on such services.
Consolidated Financial Statements
Consolidated Income Statement of TUI AG
for the period from 1 Oct 2022 to 30 Sep 2023
EUR million Notes 2023 2022
Revenue (1) 20,665.9 16,544.9
Cost of sales (2) 19,052.9 15,613.3
Gross profit 1,613.0 931.7
Administrative expenses (2) 1,015.6 746.3
Other income (3) 37.6 52.2
Other expenses (3) 32.0 1.7
Impairment of financial assets (41) 18.4 7.3
Financial income (4) 87.6 35.9
Financial expenses (5) 533.6 509.5
Share of result of investments accounted for using the equity method (6) 407.2 100.7
Impairment (+) / Reversals of impairment (-) of net investments in joint ventures and (6) - 5.4 1.6
associates
Earnings before income taxes 551.2 - 145.9
Income taxes (expense [+], income [-]) (7) 95.5 66.7
Group profit / loss 455.7 - 212.6
Group profit / loss attributable to shareholders of TUI AG (8) 305.8 - 277.3
Group profit attributable to non-controlling interest (9) 149.9 64.6
Earnings per share*
EUR Notes 2023 2022
Basic earnings / loss per share (10) 0.80 - 1.02
Diluted earnings / loss per share (10) 0.75 - 1.02
* Earnings per share for all periods presented were adjusted for
the impact of the 10-for-1 reverse stock split in February 2023 as
well as the impact of the subscription rights issued in the capital
increase on 24 April 2023.
Consolidated Statement of Comprehensive Income of TUI AG
for the period from 1 Oct 2022 to 30 Sep 2023
EUR million Notes 2023 2022
Group profit / loss 455.7 - 212.6
Remeasurements of defined benefit obligations and related fund assets - 241.4 245.5
Other comprehensive income of investments accounted 1.3 -
for using the equity method that will not be reclassified
Fair value profit / loss on investments in equity instruments 23.7 - 1.2
designated as at FVTOCI
Income tax related to items that will not be reclassified (11) 47.6 - 71.8
(expense [-], income [+])
Items that will not be reclassified to profit or loss - 168.7 172.5
Foreign exchange differences - 65.6 206.1
Foreign exchange differences outside profit or loss - 75.9 206.2
Reclassification 10.3 - 0.1
Cash flow hedges 169.3 110.7
Changes in the fair value 106.9 130.2
Reclassification 62.4 - 19.5
Other comprehensive income of investments accounted for 1.4 17.0
using the equity method that may be reclassified
Changes in the measurement outside profit or loss 1.4 17.0
Income tax related to items that may be reclassified (11) - 37.1 - 28.5
(expense [-], income [+])
Items that may be reclassified to profit or loss 68.1 305.3
Other comprehensive loss / income - 100.7 477.8
Total comprehensive income 355.1 265.1
attributable to shareholders of TUI AG 197.7 144.1
attributable to non-controlling interest 157.3 121.1
Consolidated Statement of Financial Position of TUI AG as at 30 Sep 2023
EUR million Notes 30 Sep 2023 30 Sep 2022
Assets
Goodwill (12) 2,949.2 2,970.6
Other intangible assets (13) 538.0 507.6
Property, plant and equipment (14) 3,480.3 3,400.9
Right-of-use assets (15) 2,763.4 2,971.5
Investments in joint ventures and associates (16) 1,198.2 785.4
Trade and other receivables (17), (41) 74.7 131.6
Derivative financial instruments (41) 10.3 26.6
Other financial assets (41) 10.8 10.6
Touristic payments on account (18) 152.5 138.0
Other non-financial assets (19) 100.7 169.7
Income tax assets 17.2 17.2
Deferred tax assets (20) 310.6 222.0
Non-current assets 11,605.9 11,351.7
Inventories (21) 62.1 56.1
Trade and other receivables (17), (41) 1,090.4 1,011.8
Derivative financial instruments (41) 258.2 232.5
Other financial assets (41) 48.6 85.8
Touristic payments on account (18) 787.4 619.6
Other non-financial assets (19) 129.9 135.4
Income tax assets 41.0 23.1
Cash and cash equivalents (22), (41) 2,060.3 1,736.9
Assets held for sale (23) 68.6 2.7
Current assets 4,546.5 3,903.8
Total assets 16,152.4 15,255.5
Consolidated Statement of Financial Position of TUI AG as at 30 Sep 2023
EUR million Notes 30 Sep 2023 30 Sep 2022
Equity and liabilities
Subscribed capital (24) 507.4 1,785.2
Capital reserves (25) 9,090.1 6,085.9
Revenue reserves (26) - 8,474.6 - 8,432.7
Silent participation (27) - 420.0
Equity before non-controlling interest 1,122.9 - 141.6
Non-controlling interest (29) 824.3 787.3
Equity 1,947.2 645.7
637.1
Pension provisions and similar obligations (30) 568.2
Other provisions (31) 848.5 755.0
Non-current provisions 1,485.7 1,323.2
Financial liabilities (32), (41) 1,198.5 1,731.4
Lease liabilities (32), (41) 2,216.9 2,508.7
Derivative financial instruments (41) 1.7 3.2
Other financial liabilities (33), (41) 2.6 2.8
Other non-financial liabilities (35) 252.9 165.2
Income tax liabilities 11.0 11.1
Deferred tax liabilities (20) 159.0 121.2
Non-current liabilities 3,842.6 4,543.8
Non-current provisions and liabilities 5,328.3 5,867.0
Pension provisions and similar obligations (30) 33.3 33.1
Other provisions (31) 333.4 541.0
Current provisions 366.7 574.2
Financial liabilities (32), (41) 98.5 319.9
Lease liabilities (32), (41) 701.2 698.8
Trade payables (41) 3,373.7 3,316.5
Derivative financial instruments (41) 35.3 57.5
Other financial liabilities (33), (41) 121.8 174.6
Touristic advance payments received (34) 3,530.2 2,998.9
Other non-financial liabilities (35) 534.1 519.9
Income tax liabilities 113.8 82.3
Current liabilities 8,508.6 8,168.6
Liabilities related to assets held for sale (36) 1.6 -
Current provisions and liabilities 8,876.9 8,742.7
Total equity, liabilities and provisions 16,152.4 15,255.5
Consolidated Statement of Changes in Equity of TUI AG for the period from 1 Oct 2022 to 30 Sep 2023
Subscribed Capital Other Foreign Financial Cash Revaluation Revenue Silent Equity before Non-controlling
EUR million capital reserves revenue exchange assets at flow reserve reserves participation non-controlling interest Total
reserves differences FVTOCI hedges interest
Notes (24) (25) (26) (27) (29)
Balance as at 1,099.4 5,249.6 - 7,301.9 - 1,172.2 - 24.0 - 40.4 12.8 - 8,525.7 1,091.0 - 1,085.8 667.3 - 418.4
1 Oct 2021
Dividends - - - - - - - - - - - 0.9 - 0.9
Coupon on
silent - - - 51.0 - - - - - 51.0 - - 51.0 - - 51.0
participation
Share-based
payment - - - 0.2 - - - - - 0.2 - - 0.2 - - 0.2
schemes
Acquisition of - - 0.6 - - - - - - - - 0.6 - - 0.6
own shares
Capital 685.8 836.9 - - - - - - - 1,522.7 - 1,522.7
increase
Repayment of
silent - - - - - - - - - 671.0 - 671.0 - - 671.0
participation
Group loss for - - - 277.3 - - - - - 277.3 - - 277.3 64.6 - 212.6
the year
Foreign
exchange - - 28.7 121.6 0.1 - 1.5 - 148.9 - 148.9 57.3 206.2
differences
Financial
assets at - - - - - 1.2 - - - 1.2 - - 1.2 - - 1.2
FVTOCI
Cash flow - - - - - 110.7 - 110.7 - 110.7 - 110.7
hedges
Remeasurements
of defined
benefit - - 245.5 - - - - 245.5 - 245.5 - 245.5
obligations
and related
fund assets
Other
comprehensive
income of
investments - - 17.8 - - - - 17.8 - 17.8 - 0.8 17.0
accounted for
using the
equity method
Taxes
attributable
to other - - - 71.8 - - - 28.5 - - 100.3 - - 100.3 - - 100.3
comprehensive
income
Other
comprehensive - - 220.1 121.6 - 1.1 80.7 - 421.3 - 421.3 56.5 477.8
income
Total
comprehensive - - - 57.2 121.6 - 1.1 80.7 - 144.1 - 144.1 121.1 265.1
income
Balance as at 1,785.2 6,085.9 - 7,410.3 - 1,050.4 - 25.2 40.4 12.8 - 8,432.8 420.0 - 141.7 787.3 645.7
30 Sep 2022
Dividends - - - - - - - - - - - 120.4 - 120.4
Coupon on
silent - - - 16.8 - - - - - 16.8 - - 16.8 - - 16.8
participation
Capital 328.9 1,432.0 - - - - - - - 1,760.9 - 1,760.9
increase
Capital - 1,606.7 1,606.7 - - - - - - - - - -
reduction
WSF repurchase - - 34.5 - 222.8 - - - - - 222.8 - 420.0 - 677.4 - - 677.4
agreement
Group profit - - 305.8 - - - - 305.8 - 305.8 149.9 455.7
for the year
Foreign
exchange - - - 6.8 - 60.1 - 0.1 - 6.3 - - 73.3 - - 73.3 7.7 - 65.6
differences
Financial
assets at - - - - 23.7 - - 23.7 - 23.7 - 23.7
FVTOCI
Cash flow - - - - - 169.3 - 169.3 - 169.3 - 169.3
hedges
Remeasurements
of defined
benefit - - - 241.0 - - - - - 241.0 - - 241.0 - 0.3 - 241.4
obligations
and related
fund assets
Other
comprehensive
income of
investments - - 2.7 - - - - 2.7 - 2.7 - 2.7
accounted for
using the
equity method
Taxes
attributable
to other - - 47.6 - - - 37.1 - 10.5 - 10.5 - 10.5
comprehensive
income
Other
comprehensive - - - 197.5 - 60.1 23.7 125.9 - - 108.1 - - 108.1 7.4 - 100.7
income
Total
comprehensive - - 108.3 - 60.1 23.7 125.9 - 197.7 - 197.7 157.3 355.1
income
Balance as at 507.4 9,090.1 - 7,541.6 - 1,110.6 - 1.5 166.3 12.8 - 8,474.6 - 1,122.9 824.3 1,947.2
30 Sep 2023
Consolidated Cash Flow Statement of TUI AG for the period from 1 Oct 2022 to 30 Sep 2023
EUR million Notes 2023 2022
Group profit / loss 455.7 - 212.6
Depreciation, amortisation and impairment (+) / write-backs (-) 859.1 883.5
Other non-cash expenses (+) / income (-) - 404.4 - 110.9
Interest expenses 525.1 492.1
Dividends from joint ventures and associates 24.1 0.2
Profit (-) / loss (+) from disposals of non-current assets 3.0 - 37.2
Increase (-) / decrease (+) in inventories - 6.2 - 16.4
Increase (-) / decrease (+) in receivables and other assets - 266.5 - 692.1
Increase (+) / decrease (-) in provisions - 278.5 - 117.8
Increase (+) / decrease (-) in liabilities (excl. financial liabilities) 726.0 1,889.0
Cash inflow from operating activities (43) 1,637.3 2,077.8
Payments received from disposals of property, plant and equipment and intangible assets 142.9 180.7
Payments received / made from disposals of consolidated companies (less disposals of cash and - 0.7 25.2
cash equivalents due to divestments)
Payments received from disposals of other non-current assets 115.7 4.3
Payments made for investments in property, plant and equipment and intangible assets - 666.2 - 515.7
Payments made for investments in consolidated companies (less cash and cash equivalents 0.4 -
received due to acquisitions)
Payments made for investments in other non-current assets - 84.3 - 2.7
Cash outflow from investing activities (44) - 492.2 - 308.2
Payments received from capital increase by issuing new shares 1,760.9 1,522.7
Payments made for repayment of the silent participation - - 671.0
Payments made for the repurchase of equity instruments - 682.4 -
Payments made for acquisition of own shares - - 0.6
Dividends
Coupon on silent participation - 16.8 - 51.0
Subsidiaries to non-controlling interest - 120.3 -
Payments received from the raising of financial liabilities 217.8 109.7
Transaction costs related to loans and borrowings - 15.5 - 0.4
Payments made for redemption of loans and financial liabilities - 947.7 - 1,571.3
Payments made for principal of lease liabilities - 595.1 - 583.6
Interest paid - 435.6 - 385.6
Cash outflow from financing activities (45) - 834.6 - 1,630.9
Net change in cash and cash equivalents 310.5 138.6
Development of cash and cash equivalents (46)
Cash and cash equivalents at beginning of period 1,736.9 1,586.1
Change in cash and cash equivalents due to exchange rate fluctuations 13.1 12.2
Net change in cash and cash equivalents 310.5 138.6
Cash and cash equivalents at end of period 2,060.5 1,736.9
of which included in the balance sheet as assets held for sale 0.2 -
Notes
Principles and Methods underlying the Consolidated Financial
Statements
General
TUI Group and its major subsidiaries and shareholdings operate
in tourism.
TUI AG, based in Karl-Wiechert-Allee 23, 30625 Hanover, Germany,
is 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). The shares in the company are traded on the London Stock
Exchange and the Hanover and Frankfurt Stock Exchanges.
These consolidated financial statements of TUI AG were prepared
for financial year 2023 comprising the period from 1 October 2022
to 30 September 2023. Where any of TUI's subsidiaries have
different financial years, financial statements were prepared as at
30 September in order to include these subsidiaries in TUI AG's
consolidated financial statements.
The Executive Board and the Supervisory Board have submitted a
Declaration of Compliance with the German Corporate Governance Code
required pursuant to section 161 of the German Stock Corporation
Act (AktG) and made it permanently available to the general public
on the Company's website (www.tuigroup.com).
The consolidated financial statements are prepared in euros.
Unless stated otherwise, all amounts are indicated in million euros
(EURm). Due to the utilisation of rounded amounts there may be
minor rounding differences in total and percentages.
The consolidated financial statements were approved for
publication by TUI AG's Executive Board on 4 December 2023.
Accounting principles
Declaration of compliance
Pursuant to Regulation EEC No. 1606 / 2002 of the European
Parliament and Council, TUI AG's consolidated financial statements
as at 30 September 2023 were prepared in accordance with the
International Financial Reporting Standards (IFRS) as applicable in
the European Union. Moreover, the commercial-law provisions listed
in section 315e (1) of the German Commercial Code (HGB) were also
observed in preparing the consolidated financial statements.
The accounting and measurement methods and the explanatory
information and Notes to these annual financial statements for
financial year 2023 are generally consistent with those followed in
preparing the previous consolidated financial statements for
financial year 2022, with the exception of the initial application
of new or amended standards, as outlined below.
Newly applied standards
Since the beginning of financial year 2023, TUI Group has
initially applied the following standards and interpretations,
amended or newly issued by the IASB and endorsed by the EU, on a
mandatory or voluntary basis:
Newly applied standards in financial year 2023
Applicable Impact on
Standard from Amendments financial
statements
Amendments to The amendments specify which costs to include in assessing whether a contract is
IAS 37 onerous. The amendments clarify that the cost of fulfilling a contract consists No
Onerous 1 Jan 2022 of the direct cost of the contract representing either the incremental costs of material
Contracts fulfilling the contract or an allocation of other costs that relate directly to impacts.
fulfilling the contract.
Amendments to The amendments prohibit deducting from the cost of an item of property, plant
IAS 16 and equipment any proceeds from selling items produced while bringing that asset
Proceeds 1 Jan 2022 to the location and condition necessary for it to be capable of operating in the No
before manner intended by management. Instead, an entity has to recognise the proceeds impacts.
Intended Use from selling such items, and the cost of producing those items, in profit or
loss.
Amendments to
IFRS 3
Reference to 1 Jan 2022 The amendments update a reference to the Conceptual Framework in IFRS 3 without No
the changing the accounting requirements for business combinations. impacts.
Conceptual
Framework
Various The amendments resulting from the Annual Improvements 2018 - 2020 Cycle include No
amendments to 1 Jan 2022 small amendments to IFRS 1, IFRS 9, IAS 41, and the material
IFRS (2018 - Illustrative Examples accompanying IFRS 16. impacts.
2020)
Amendments to The amendments to IAS 12 (endorsement during the preparation period) introduce a
IAS 12 Immediately temporary recognition exception for the accounting of deferred taxes as part of No
International or, the implementation of the global minimum taxation (so-called 'Pillar Two' material
Tax Reform - respectively, regulations of the OECD). This is intended to help ensure the consistency of the impacts.
Pillar Two 1 Jan 2023 financial statements and facilitate the implementation of the regulations. This
Model Rules recognition exception is applicable with immediate effect according to the IASB
requirements.
For more information on the impact of the reform of global
interest rate benchmarks, please refer to the section 'Interest
rate risk' in Note 41.
For more information about the introduction of a global minimum
taxation at TUI, we refer to the chapter 'Deferred taxes and income
taxes' within the section accounting and measurement methods.
Going concern reporting according to the UK Corporate Governance
Code
TUI Group covers its daily working capital requirements through
cash in hand, balances with and borrowings from banks. As at 30
September 2023, TUI Group's net debt (financial debt plus lease
liabilities less cash and cash equivalents and less short-term
interest-bearing investments) totalled EUR 2,106.2 m (as at 30
September 2022 EUR 3,436.2 m).
Net debt
EUR million 30 Sep 2023 30 Sep 2022 Var. %
Financial debt 1,297.0 2,051.3 - 36.8
Lease liabilities 2,918.1 3,207.5 - 9.0
Cash and cash equivalents 2,060.3 1,736.9 + 18.6
Short-term interest-bearing investments 48.6 85.8 - 43.3
Net debt 2,106.2 3,436.2 - 38.7
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. Following the successive
lifting of the measures to restrict contact and travel in most
countries, business has been mainly resumed in all segments in the
course of the first half year of the 2022 calendar year.
To cover the resulting liquidity needs, the Group has carried
out various financing measures in the financial years 2020 to 2022,
which, in addition to three capital increases, 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 initially totalling EUR
2.85 bn, an option bond from the German Economic Stabilisation Fund
(WSF) totalling EUR 150 m and two silent participations from the
WSF initially totalling EUR 1.091 bn.
In financial year 2022, TUI reduced KfW's credit line to EUR 2.1
bn in various steps. In addition, 913 of the 1,500 partial bonds
with warrants issued to WSF were redeemed and the Silent
Participation II of the WSF of EUR 671.0 m was repaid in full ahead
of schedule.
The financing measures are described in detail in the annual
reports for the past three financial years.
On 13 December 2022, TUI has concluded a new agreement with the
WSF on the repayment of stabilization measures ('Repayment
Agreement'). This agreement regulates the intended complete
termination of the stabilization measures granted by the WSF by
means of a right of the Company (i) to repayment of the
contribution made by the WSF as a silent partner in January 2021 in
the nominal amount of then EUR 420 m ('Silent Participation I') and
(ii) to repurchase the warrant-linked bond 2020 / 2026 ('Warrant
Bond') issued by the Company to WSF in the remaining amount of EUR
58.7 m as well as the 58,674,899 option rights ('Warrants')
originally attached to the warrant bond. In addition, the Repayment
Agreement regulates the implementation of capital measures for the
purpose of refinancing the aforementioned measures.
In February 2023, TUI AG implemented the ten-for-one reverse
stock split previously resolved by the 2023 AGM in accordance with
the provisions of the Economic Stabilisation Acceleration Act. As a
result, the Company's share capital declined from EUR 1.785 bn to
around EUR 179 m. The corresponding reduction amount of around EUR
1.606 bn was transferred to the company's capital reserves.
In accordance with the repayment agreement with the WSF, the
Executive Board of TUI AG resolved a capital increase with
subscription rights of EUR 1.8 bn with the approval of the
Supervisory Board on 24 March 2023. For the fully subscribed
capital increase, 328,910,448 new shares were offered at a
subscription ratio of 8:3 and a subscription price of EUR 5.55. The
subscription period for the new shares ended on 17 April 2023.
Following receipt of the proceeds from the capital increase on
24 April 2023, Silent Participation I and the around 58.7 m
warrants held by the WSF as well as the outstanding 587 of the 2020
/ 2026 bonds with warrants were fully redeemed. For Silent
Participation I and the 2023 coupon payable on it, a redemption
price of EUR 651.6 m was paid. EUR 30.8 m were used for the
repurchase of the warrants and further EUR 61.9 m for the early
redemption of the 587 bonds with a nominal value of EUR 58.7 m,
including accrued interest of EUR 3.2 m.
At the same time, the early repayment penalty for Silent
Participation II of EUR 5.7 m, agreed with the WSF in April 2022,
became due. TUI has thus terminated and repaid all stabilisation
measures of the WSF.
Moreover, TUI AG reduced the volume of the KfW credit facility
from EUR 2.1 bn to EUR 1.05 bn following completion of the capital
increase.
The capital increase completed in April 2023 and the subsequent
substantial reduction in government financing will enable a
significant improvement in the TUI Group's credit ratios and reduce
current interest costs, allowing TUI to focus on growth and further
market recovery.
In May 2023, TUI extended the maturity of the existing credit
lines of EUR 2.7 bn by a further two years. The syndicated credit
line with the 19 banks (EUR 1.64 bn), including the credit line
with KfW (EUR 1.05 bn), together referred to as the 'RCF', will now
mature in July 2026. The RCF of TUI AG is subject to compliance
with certain financial targets (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.
As at 30 September 2023, TUI Group's revolving credit facilities
totalled EUR 2.7 bn, they comprised the following
-- EUR 1.64 bn credit line from 19 private banks (incl. EUR 190
m guarantee line)
-- EUR 1.05 bn KfW credit line
The KfW credit line, which was reduced to EUR 1.05 bn after the
successful capital increase, is not expected to be drawn on and
serves only as a buffer. The aim is to return this credit line
quickly.
In the view of the Executive Board, the TUI Group currently has
and will continue to have sufficient funds, resulting both from
borrowings and from operating cash flows, to meet its payment
obligations and to continue as a going concern in the foreseeable
future. Therefore, as at 30 September 2023, the Board does not
identify any material uncertainty that may cast significant doubt
on the Group's ability to continue as a going concern.
The Board does not foresee risks that may jeopardise the Group's
ability to continue as a going concern and does not believe that
compliance with the financial covenants is at risk as at 31 March
2024 and 30 September 2024.
In accordance with Regulation 30 of the UK Corporate Governance
Code, the Board confirms that, in its opinion, it is appropriate to
prepare the consolidated financial statements on a going concern
basis.
Principles and methods of consolidation
Principles
The consolidated financial statements include all significant
subsidiaries directly or indirectly controlled by TUI AG. Control
exists where TUI AG has power over the relevant activities, is
exposed to variable returns or has rights to the returns, and has
the ability to affect those variable returns through its power over
the investee.
Generally, the control is exercised by means of a direct or
indirect majority of voting rights. If TUI Group holds less than
the majority of voting rights in a shareholding, it may exercise
control due to contractual or similar agreements, as in the case of
the participation in the RIUSA II Group. Due to the contractual
agreements between the shareholders and the framework agreements
with TUI Group as well as the considerable importance of tour
operation for the economic success of RIUSA II Group, TUI Group is
able to exercise a controlling influence on decisions about the
most relevant activities and consequently the amount of returns.
TUI Group is subject to variable returns from RIUSA II Group, in
particular due to dividend payments and fluctuations in the fair
value of the stake itself. RIUSA II Group is therefore consolidated
although TUI Group only holds a 50 % equity stake.
In assessing control, the existence and effect of potential
voting rights are taken into account that are currently exercisable
when decisions about the direction of relevant activities are made.
Consolidation of subsidiaries starts from the date TUI gains
control. When TUI ceases to control the corresponding companies,
they are removed from the group of consolidated companies.
The consolidated financial statements are prepared from the
separate or single-entity financial statements of TUI AG and its
subsidiaries, drawn up on the basis of uniform accounting,
measurement and consolidation methods and usually audited or
reviewed by auditors.
Associates for which TUI Group is able to exert significant
influence over the financial and operating policy decisions within
these companies are accounted for using the equity method.
Generally, significant influence is assumed if TUI AG directly or
indirectly holds voting rights of between 20 to 50 %.
Stakes in joint ventures are also measured using the equity
method. A joint venture is a company managed jointly by TUI Group
with one or several partners based on a contractual agreement, in
which the parties that jointly exercise control have rights to the
company's net assets. Joint ventures also include companies in
which TUI Group holds a majority or minority of voting rights but
in which decisions about the relevant activities may only be taken
on an unanimous basis due to contractual agreements.
The dates on which associates and joint ventures are included in
or removed from the group of companies measured at equity are
determined in a manner consistent with that applied to
subsidiaries. At equity measurement in each case is based on the
last annual financial statements available or the interim financial
statements as at 30 September if the balance sheet dates differ
from TUI AG's balance sheet date. This affects 34 companies with a
financial year from 1 January to 31 December, three companies with
a financial year from 1 November to 31 October and two companies
with a financial year from 1 April to 31 March.
Group of consolidated companies
In financial year 2023, the consolidated financial statements
included a total of 266 subsidiaries. The table below presents
changes in the number of companies since 1 October 2022.
Development of the group of consolidated companies*
and the Group companies measured at equity
Consolidated Associates Joint ventures
subsidiaries
Number at 30 Sep 2022 268 17 27
Additions 4 4 -
Incorporation 1 2 -
Demerger 1 - -
Acquisition 2 1 -
Start / expansion of business operations - 1 -
Disposals 6 1 -
Liquidation 2 - -
Merger 4 1 -
Change in ownership stake - - -
Number at 30 Sep 2023 266 20 27
* excl. TUI AG
TUI AG's direct and indirect subsidiaries, associates and joint
ventures are listed under Other Notes - TUI Group
Shareholdings.
30 subsidiaries were not included in the consolidated financial
statements. Even when taken together, these companies are of minor
significance to the presentation of a true and fair view of the
financial position and performance of the Group.
Acquisitions - Divestments
Acquisitions of the current financial year
A total of three companies were acquired. One of the
acquisitions did not comprise any business operations. Another
acquisition is immaterial and not explained in greater detail
here.
On 26 September 2023, an agreement was signed to acquire 49 % of
the shares in Pep Toni Hotels S. A., Palma de Mallorca. The purpose
of the company is to invest in and develop leisure hotels and
hotels in (tourist) cities worldwide. The purchase price of EUR
29,400 corresponds to the nominal value of the shares. The
investment is carried as a TUI Group associate. Subsequently, the
shareholders contributed equity in line with their stakes in the
company. This equity was transferred to the company's capital
reserves. In this context, we refer to the section 'Companies
measured at equity'.
An insignificant company acquisition took place after the
balance sheet date that requires no further explanation.
Acquisitions of the prior financial year
In financial year 2022, no companies were acquired under IFRS
3.
Divestments
The non-consolidated shares in Peakwork AG were sold in
financial year 2023. The divestment of the shares and the payment
of the purchase price of EUR 24.0 m took place in April 2023.
After the balance sheet date the following divestments took
place:
The shares in the joint venture WOT Hotels Adriatic Asset
Company d. o. o., a company accounted for using the equity method,
were sold by way of an agreement dated 30 August 2023 and effective
as of 20 October 2023. The purchase price amounts to EUR 12.0 m and
was paid on 10 November 2023. The preliminary gain on disposal from
this transaction is zero. In this context, we refer to the section
'Assets held for sale'.
The shares in the joint venture Raiffeisen-Tour RT-Reisen GmbH,
a company accounted for using the equity method, were sold by way
of a purchase agreement dated 29 August 2023 and effective as of 19
October 2023. The consideration calculated as part of a purchase
price distribution amounts to EUR 3.1 m. The payment was made on 30
October 2023. The preliminary gain on disposal from this
transaction is zero. In this context, we refer to the section
'Assets held for sale'.
On 31 March 2023, an agreement was signed with TUI Global
Hospitality Fund S. C. S. to sell Club Hotel CV, S. A. (Robinson
Club Cabo Verde), consolidated in the Hotels & Resorts segment.
The divestment was completed on 31 October 2023. The purchase price
was EUR 3.4 m. The purchase price was paid on 31 October 2023. A
preliminary gain on disposal of EUR 4.6 m was generated from the
transaction, reported under Other income. The divestment of the
company resulted in the disposal of goodwill totalling EUR 2.3 m by
the 'Robinson' cash-generating unit. In this context, we refer to
the section 'Assets held for sale'.
Foreign exchange translation
Transactions in foreign currencies are translated into the
functional currency at the foreign exchange rates at the date of
the transaction. Any gains and losses resulting from the execution
of such transactions and the translation of monetary assets and
liabilities denominated in foreign currencies at the foreign
exchange rate at the date of the transaction are shown in the
income statement, with the exception of gains and losses to be
recognised in equity as qualifying cash flow hedges.
The annual financial statements of companies are prepared in the
respective functional currency. The functional currency of a
company is the currency of the primary economic environment in
which the company operates.
Where subsidiaries prepare their financial statements in
functional currencies other than the Euro, being the Group's
reporting currency, the assets and liabilities are translated at
the rate of exchange applicable at the balance sheet date (closing
rate). Goodwill allocated to these companies and adjustments of the
fair value arising on the acquisition of a foreign company are
treated as assets and liabilities of the foreign company and also
translated at the rate of exchange applicable at the balance sheet
date. The items of the income statement and hence the result for
the year shown in the income statement are translated at the
average rate of the month in which the respective transaction takes
place.
Differences arising on the translation of the annual financial
statements of foreign subsidiaries are reported outside profit and
loss and separately shown as foreign exchange differences in the
consolidated statement of changes in equity. When a foreign company
or operation is sold, any foreign exchange differences previously
included in equity outside profit and loss are recognised as a gain
or loss from disposal in the income statement through profit and
loss.
Translation differences relating to non-monetary items with
changes in their fair values eliminated through profit and loss (e.
g. equity instruments measured at their fair value through profit
and loss) are included in the income statement. In contrast,
translation differences for non-monetary items with changes in
their fair values taken to equity are included in revenue
reserves.
Some TUI Group subsidiaries operate their business in a
hyperinflation country (previous year: equally Group companies in
hyperinflationary economies). As the Euro is the functional
currency for these companies, accounting in accordance with IAS 29,
Financial Reporting in Hyperinflationary Economies, is not
required.
The translation of the financial statements of foreign companies
measured at equity follows the same principles for adjusting
carrying amounts and translating goodwill as those used for
consolidated subsidiaries.
Net investment in a foreign operation
Monetary items receivable from or payable to a foreign
operation, the settlement of which is neither planned nor likely in
the foreseeable future, essentially constitute part of a net
investment in this foreign operation. Foreign exchange differences
from the translation of these monetary items are recognised in
other comprehensive income. As at 30 September 2023, TUI Group had
granted loans of this type in particular to hotel companies in
North Africa.
Exchange rates of currencies of relevance to TUI Group
Closing rate Annual average rate
1 EUR equivalent 30 Sep 2023 30 Sep 2022 2023 2022
Sterling 0.87 0.88 0.87 0.85
US dollar 1.06 0.98 1.07 1.09
Swiss franc 0.97 0.96 0.98 1.02
Swedish krona 11.55 10.95 11.34 10.43
Consolidation methods
The recognition of the assets and liabilities of acquired
businesses is based on the acquisition method. Accordingly all
identifiable assets, all liabilities and certain contingent
liabilities assumed are measured at fair value as of the
acquisition date. Subsequently, the consideration for the stake is
measured at fair value and eliminated against the acquiree's
revalued equity attributable to the acquired share. The option to
measure the non-controlling interests at their fair value (full
goodwill method) was not used.
Any excess of acquisition costs over net assets acquired is
capitalised as goodwill and recognised as an asset in accordance
with the provisions of IFRS 3. Any negative goodwill is recognised
immediately in profit and loss and presented as other income.
When additional shares are purchased after obtaining control,
the difference between the purchase price and the carrying amount
of the stakes acquired is recognised directly in equity. The
effects from sales of stakes not entailing a loss of control are
also recognised directly in equity. By contrast, when control is
obtained or lost, gains or losses are recognised in profit and
loss. In the case of business combinations achieved in stages
(where the acquirer held an equity interest before he obtained
control), the equity stake previously held in the acquired company
is revalued at the fair value applicable at the acquisition date
and the resulting gain or loss is recognised in profit or loss. For
transactions involving a loss of control, the profit or loss does
not only comprise the difference between the carrying amounts of
the disposed stakes and the consideration received but also the
result from the revaluation of the remaining shares.
On loss of control of a subsidiary, the gain or loss on
derecognition will be calculated as the total of the fair value of
the consideration plus the fair value of any investment retained in
the former subsidiary less the share of the book value of the net
assets of the subsidiary. Any gains or losses previously recognised
in other comprehensive income from currency translations or the
valuation of financial assets and liabilities will be reclassified
to the income statement. When a subsidiary is sold, any goodwill
allocated to the respective subsidiary is taken into account in the
calculation of the profit or loss of disposal.
The Group's associates and joint ventures are measured at equity
and included at the cost to purchase as at the acquisition date.
The Group's stake in associates and joint ventures includes the
goodwill arising from the respective acquisition.
The Group's share in profits and losses of associates and joint
ventures is carried in the income statement from the date of
acquisition (Share of result from joint ventures and associates),
while the Group's share in the total other comprehensive income is
shown in its revenue reserves. The accumulated changes arising
after the acquisition are shown in the carrying amount of the
shareholding. When the share in the loss of an associated company
or joint venture equals or exceeds the Group's original stake in
this company, including other unsecured receivables, no further
losses are recognised. Any losses exceeding that stake are only
recognised to the extent that obligations have been assumed or
payments have been made for the associated company or joint
venture.
Where the accounting and measurement methods applied by
associates and joint ventures differ from the uniform accounting
rules applied in the Group, the differences are adjusted.
Intercompany receivables and payables or provisions are
eliminated, as are intercompany revenue, other income and the
corresponding expenses. Intercompany results from intercompany
deliveries and services are reversed through profit and loss,
taking account of deferred taxes. However, intercompany losses are
an indicator that an asset may be impaired. Intercompany profits
from transactions with companies measured at equity are eliminated
in relation to the Group's stake in the companies. Intercompany
transactions are entered into on an arm's length basis.
Accounting and measurement methods
The consolidated financial statements are prepared according to
the historical cost principle, with the exception of certain
financial instruments such as financial assets and derivatives as
well as plan assets from externally funded pensions benefit
obligations held at fair value at the balance sheet date.
The financial statements of the consolidated subsidiaries are
prepared in accordance with uniform accounting and measurement
principles. The amounts recognised in the consolidated financial
statements are not determined by tax regulations but solely by the
commercial presentation of the financial position and performance
as set out in the rules of the IASB.
Revenue recognition
TUI recognises revenue upon transfer of control over distinct
goods or services to the customer. In Markets and Airlines, TUI
predominantly generates revenue from the sale of package holidays.
The flights, hotel accommodation and other services included in a
package holiday are transformed into one product for the customer
through a significant integration service provided by TUI as tour
operator within the meaning of IFRS 15, so that the package holiday
constitutes one performance obligation for TUI. This revenue is
recognised when TUI delivers the service for its customer, i. e. on
a linear basis over the duration of the holiday tour, as customers
consume their holiday on a pro rata basis. TUI generates further
revenue from the sale of other tourist services, e. g. seat-only,
accommodation-only, cruises, etc. Revenue is recognised when or as
TUI has satisfied its performance obligation, either over time in
relation to the duration of the journey if the services relate to a
period of time, e. g. in the case of multi-day hotel stays, or at a
point in time on the day of the performance of the performance
obligation, e. g. for flight services on the day of the flight.
Revenue from long-term contracts is recognised over the duration of
the individual contract in accordance with IFRS 15.
Amendment fees do not constitute an independent performance
obligation. Revenue is therefore recognised along with the delivery
of the main performance obligation.
If TUI has control over the asset before it is delivered to the
customer, TUI acts as the principal in relation to that service.
Otherwise, TUI acts as an agent. As a principal, TUI carries the
recognised revenue and costs in the income statement on a gross
basis, e. g. for revenue from its own tour operator activities, for
hotel revenue in own hotels, and for aviation revenue. When acting
as an agent, TUI carries the relevant revenue on a net basis at the
amount of the commission received, e. g. for car rental and hotel
revenue for third-party hotels in which TUI does not have control
over the hotel rooms. Passenger-related aviation taxes and fees
charged by TUI on behalf of third parties and passed on to these
third parties are carried in the income statement on a net
basis.
TUI uses the practical expedient offered under IFRS 15.121(a).
For open performance obligations as at the balance sheet date, TUI
discloses all performance obligations for contracts with an
original term of more than twelve months, i. e. at least twelve
months lie between the start of the contract (in principle the
booking date) and the end of the contract (in principle the end of
the service).
TUI has to pay compensation to customers for flight delays or
cancellations (so-called denied boarding compensation). These
payments are directly related to the obligation of the flight
service. Therefore these payments represent variable
considerations. Hence, denied boarding compensations are shown net
in revenue.
Goodwill and other intangible assets
Acquired intangible assets are carried at cost. Internally
generated intangible assets are capitalised at cost where an inflow
of future economic benefits for the Group is probable and can be
reliably measured. The cost to produce comprises direct costs and
directly allocable overheads. Intangible assets with a finite
service life are amortised over the expected useful life.
Intangible assets acquired as a result of business combinations
are included at their fair value as at the date of acquisition and
are amortised on a straight-line basis.
Useful lives of intangible assets
Useful lives
Brands, licences and other rights 5 to 20 years
Transport and leasing contracts 12 to 20 years
Computer software 3 to 13 years
Customer base as at acquisition date 7 to 15 years
Due to changes in our strategy and delays in the digital
transformation, the useful lives of certain software solutions were
extended by up to three years. As a result of the adjustment of
individual useful lives for computer software, the economic useful
life in individual cases has been extended from the previous ten
years to a total of 13 years. For further information, please refer
to the section 'Other intangible assets'.
If there are any events or indications suggesting potential
impairment, the amortised carrying amount of the intangible asset
is compared with the recoverable amount. Any losses in value going
beyond wear-and-tear depreciation are taken into account through
the recognition of impairment charges.
Depending on the functional area of the intangible asset,
amortisation and impairment charges are included under cost of
sales or administrative expenses.
Intangible assets with indefinite useful lives are not amortised
but are tested for impairment at least annually. In addition,
impairment tests are conducted if there are any events or
indications suggesting potential impairment. TUI Group's intangible
assets with an indefinite useful life consist exclusively of
goodwill.
Impairment tests for goodwill are conducted on the basis of
cash-generating units (CGU) or groups of cash-generating units.
Impairment charges are recognised where the carrying amount of
the tested units, including the allocated goodwill, exceeds the
recoverable amount. The recoverable amount is the higher of fair
value less costs of disposal and the present value of future cash
flows based on continued use (value in use). The fair value less
costs of disposal corresponds to the amount that could be generated
between knowledgeable, willing, independent business partners after
deduction of the costs of disposal.
Impairment of goodwill is shown separately in the consolidated
income statement.
Property, plant and equipment
Property, plant and equipment are measured at amortised cost.
The costs to purchase include costs to bring the asset to a working
condition. The costs to produce are determined on the basis of
direct costs and directly attributable indirect costs and
depreciation.
Borrowing costs directly associated with the acquisition,
construction or production of qualifying assets are included in the
costs to acquire or produce these assets until the assets are ready
for their intended use.
To the extent that funds are borrowed specifically for the
purpose of obtaining a qualifying asset, the underlying
capitalisation rate is determined on the basis of the specific
borrowing cost; in all other cases the weighted average of the
borrowing costs applicable to the borrowings outstanding is
applied.
Depreciation of property, plant and equipment is based on the
straight-line method over the useful economic life. The useful
economic lives are as follows:
Useful lives of property, plant and equipment
Useful lives
Hotel buildings 30 to 50 years
Other buildings 25 to 50 years
Cruise ships 30 to 38 years
Aircraft
Fuselages and engines 22 to 25 years
Engine overhaul depending on intervals, up to 12 years
Major overhaul depending on intervals, up to 12 years
Spare parts up to 10 years
Operating and business equipment 3 to 10 years
Moreover, the level of depreciation is determined by the
residual values at the end of the useful life of an asset. The
residual value assumed at first-time recognition for cruise ships
is between 4 % and 30 % of the acquisition costs. The determination
of the depreciation of aircraft fuselages and aircraft engines in
first-time recognition is based on a residual value of a maximum of
5 % of the cost of acquisition. In addition, a residual value of 20
% is used to determine the scheduled depreciation of spare parts.
The payments made under a power by the hour arrangement relating to
maintenance overhauls are capitalised as PPE under construction up
to a maintenance event at which point the cost is transferred to
the appropriate PPE category.
Both the useful lives and residual values are reviewed on an
annual basis when preparing the Group financial statements. The
review of the residual values is based on comparable assets at the
end of their useful lives as at the current point in time. Any
adjustments required are recognised as a correction of depreciation
over the remaining useful life of the asset. The adjustment of
depreciation is recognised retrospectively for the entire financial
year in which the review has taken place. Where the review results
in an increase in the residual value so that it exceeds the
remaining net carrying amount of the asset, depreciation is
suspended. In this case, the amounts are not written back.
Any losses in value going beyond wear-and-tear depreciation are
taken into account through the recognition of impairment losses. If
there are any events or indications suggesting impairment, the
required impairment test is performed to compare the carrying
amount of an asset with the recoverable amount.
Leases
Leases are agreements transferring the right to use an
identified asset for a given period of time in return for a
payment. As a lessee, TUI leases moveable assets such as aircraft,
vehicles and cruise ships, as well as, in particular, immoveable
property such as hotel buildings and land, office buildings and
travel agencies. As a lessor, TUI subleases some aircraft, travel
agency and office space as well as a hotel.
TUI AS LESSEE
TUI recognises right-of-use assets and corresponding lease
liabilities for the lease arrangements, in which it is the lessee,
in the statement of financial position. As an exception, TUI
applies the recognition and measurement exemptions for all
short-term leases and low-value asset leases. A short-term lease is
a lease that has a lease term of twelve months or less and does not
contain a purchase option. The lease payments for those leases are
recognised as an expense in the cost of sales or in administrative
expenses on a straight-line basis over the lease term or on another
systematic basis.
At the inception of an agreement, TUI evaluates whether it
contains a lease. Apart from traditional lease, tenancy or leasing
contracts, service or capacity agreements may also fall within the
scope of IFRS 16. In connection with the purchase of mixed tourism
services, the rental or purchase of the largest portion of a
hotel's room capacity is identified as a lease component if TUI
commits to its contract partner to purchase a fixed allotment of
more than 90 % of the hotel's capacity for a period of more than
twelve months, provided the agreement does not include an exemption
to return committed capacity for self-marketing by the hotelier,
and if therefore an irrevocable payment obligation exists. For
agreements that contain one or several lease components alongside
non-lease components, TUI uses the option not to separate these
non-lease components, in particular for vehicle or IT leases and
for hotel capacity contracts.
At the commencement date, i. e. the date from which the lessee
is entitled to exercise the right to use the underlying asset, a
lease liability amounting to the present value of the lease
payments not yet made as at that date is recognised. The lease
payments include all fixed and in substance-fixed payments less any
future lease incentives to be provided by the lessor. The lease
payments also include variable payments linked to an index or an
interest rate as well as expected payments from residual value
guarantees. Lease payments for the exercise of extension, purchase
and termination options are included if the exercise of these
options is assessed as reasonably certain. As a rule, the lease
payments are discounted at the lessor's interest rate implicit in
the lease. If that rate is not known to TUI, the present value is
determined using the incremental borrowing rate. After initial
measurement, the carrying amount is increased to reflect interest
on the lease liability and reduced to reflect the lease payments
made. In addition, the carrying amount of lease liabilities is
remeasured if there is a modification, a change in the lease term,
a change in the lease payments (e. g., changes to future payments
resulting from a change in an index or rate used to determine such
lease payments) or a change in the assessment of an option to
purchase the underlying asset. The interest expense from the
subsequent measurement of the lease liability is presented in the
interest result. Variable lease payments not linked to an index nor
to an interest rate are recognised through profit or loss in the
period in which the event or condition that triggers the payment
occurs.
In addition, a right-of-use asset is recognised at the
commencement date. Right-of-use assets for the leased items are
measured at amortised cost less cumulative depreciation /
amortisation and cumulative impairment and adjusted for
revaluations of the lease liability. The costs of a right-of-use
asset comprise the present value of the future lease payments plus
initial direct costs and the lease payments made prior to
commencement less any lease incentives received and the estimated
costs to be incurred to restore the leased asset to the condition
required by the terms and conditions of the lease. Capitalised
right-of-use assets are depreciated on a straight-line basis over
the shorter of the lease term and the expected useful life of the
right-of-use asset. If the lease transfers ownership of the leased
asset to TUI by the end of the lease term, or if the lease payments
reflect the future exercise of a purchase option, the right-of-use
asset is depreciated over the useful life of the leased asset.
Depreciation of capitalised right-of-use assets is carried in the
cost of sales or in administrative expenses.
SALE AND LEASEBACK
For sale and leaseback transactions, TUI initially determines in
accordance with IFRS 15 whether the transfer of the asset has to be
accounted for as a sale. If the transfer is accounted for as a
sale, TUI recognises the right-of-use asset associated with the
sale and leaseback transaction, as seller and as lessee, at the
proportion of the previous carrying amount that relates to the
right-of-use asset retained. The gain or loss from the sale
transaction is carried in profit or loss on a pro rata basis at the
amount of the rights transferred to the buyer and lessor. If the
transfer is not accounted for as a sale, TUI continues to recognise
the legally transferred asset as before and carries a financial
liability for the proceeds received.
TUI AS LESSOR
As a lessor, TUI classifies each lease as an operating lease or
a finance lease. If TUI as a lessor has substantially all the risks
and rewards incidental to ownership of the underlying asset, the
lease is classified as an operating lease. If the lease transfers
substantially all the risks and rewards incidental to ownership of
the underlying asset to the lessee, the lease is classified as a
finance lease.
For subleases, the lease classification has been made by
reference to the right-of-use asset arising from the head lease in
accordance with IFRS 16 and not by reference to the underlying
lease asset.
The lease payments from operating leases are recognised in
revenue on a straight-line basis over the lease term. Any initial
direct costs incurred in obtaining the lease are added to the
carrying amount of the underlying leased item and depreciated over
the lease term on a straight-line basis.
For finance leases, TUI recognises a lease receivable at an
amount equal to the net investment in the lease and derecognises
the underlying leased asset or the right-of-use asset from the head
lease. The lease payments made by the lessees are broken down into
an interest portion and a redemption portion using the effective
interest rate method so as to produce a constant periodic rate of
interest on the balance of the net investment. The redemption
portions received are deducted from the lease receivable. The
interest portion of the payments received is carried in the
interest result.
Financial instruments
Financial instruments are contractual rights or obligations that
will lead to an inflow or outflow of financial assets or the issue
of own equity instruments for one of the two contracting parties
and correspondingly to an inflow or outflow of financial assets for
the other contracting party. They also comprise (derivative) rights
or obligations derived in particular, from non-derivative financial
assets.
NON-DERIVATIVE FINANCIAL ASSETS AND FINANCIAL LIABILITIES
The classification and measurement of financial assets are
determined on the basis of the business model assigned to manage
financial assets and the related contractual cash flows. At initial
recognition of financial assets, the classification comprises the
categories 'Financial assets at amortised cost (AC)", 'Financial
assets at fair value through other comprehensive income (FVTOCI)"
and 'Financial assets at fair value through profit and loss
(FVPL)".
With the exception of trade receivables, non-derivative
financial financial assets are recognised at fair value. Trade
receivables are recognised with their values at the trading date on
which TUI Group under-takes to buy the assets. When recognised for
the first time, they are either classified at amortised costs or at
fair value, depending on their objective. Non-derivative financial
assets are classified as financial assets at amortised cost when
the objective of the entity's business model is to hold the
financial assets to collect contractually agreed cash flows, and
when the cash flows exclusively constitute interest and principal
payments on the nominal amount outstanding.
For financial assets held at amortised cost, a loss allowance
for expected credit losses is recognised in accordance with IFRS 9.
Loss allowances for financial assets are based on either full
lifetime expected credit losses or 12-month expected credit losses.
A loss allowance for lifetime expected credit losses is required
for a financial instrument if the credit risk of that financial
asset has increased significantly since initial recognition or if
the financial instruments are trade receivables, lease liabilities
or contract assets. For all other financial instruments, expected
credit losses are measured at an amount equal to the 12-month
expected credit losses.
IFRS 9 allows entities to apply a simplified approach inter alia
for trade receivables. Lifetime expected credit losses on all these
assets can be recognised at initial recognition. TUI applies the
simplified approach for all trade receivables.
Impairments and reversals of impairments are recognised under
'Impairment / reversals of impairment of financial assets' in the
income statement.
The equity instruments held in the balance sheet item 'Other
financial assets' were irrevocably designated as 'Financial assets
at fair value through OCI' as they are held for medium- to
long-term strategic objectives. These instruments are stakes in
associated non-consolidated subsidiaries, equity investments and
other investments. Recognising all fluctuations in the fair value
in the income statement would not be in line with the Group's
strategy. They are allocated to assets unless the entity intends to
sell them within twelve months after the balance sheet date.
Dividends from these equity instruments are recognised in the
income statement unless the dividends are clearly a partial
repayment of the cost to purchase the equity instrument.
The cumulative gain or loss from the subsequent measurement of
the equity instruments recognised in other comprehensive income
will continue to be recognised in equity even after the equity
instrument has been derecognised and reclassified to revenue
reserves.
All other financial assets not recognised at amortised cost or
at fair value through OCI must be measured at fair value through
profit and loss.
Financial assets are derecognised at the date on which the
rights for payments from the assets expire or are transferred and
therefore at the date on which essentially all risks and rewards of
ownership are transferred. The rights to an asset expire when the
rights to receive the cash flows from the asset have expired. For
transfers of financial assets, it is assessed whether they have to
be derecognised in accordance with the derecognition requirements
of IFRS 9.
Non-derivative financial liabilities are recognised in the
consolidated statement of financial position if an obligation
exists to transfer cash and cash equivalents or other financial
assets to another party. A non-derivative financial liability is
initially recognised at its fair value. For loans taken out, the
nominal amount is reduced by discounts retained and transaction
costs paid and discounted over the expected remaining term of the
liability. The subsequent measurement of non-derivative financial
liabilities is effected at amortised cost using the effective
interest method. TUI does not use the fair value option.
Financial liabilities are derecognised when the obligations
specified in the contract are discharged, cancelled or expire.
All foreign exchange differences resulting from the translation
of trade accounts payable are recognised in the income statement
within cost of sales. Foreign exchange differences from the
translation of liabilities not resulting from normal operating
processes are reported under Other income / expenses, Financial
expenses / income or Administrative expenses, depending on the
nature of the underlying receivables or payables.
The bond with warrants and the convertible bond on shares in TUI
AG have to be accounted for as compound financial instruments.
Compound financial instruments are divided into an equity and a
debt component in accordance with IAS 32. The debt component shown
under financial liabilities is valued, less the pro rata
transaction costs and added to the repayment amount using the
effective interest method. The equity component is valued at the
residual value that results after deducting the amount determined
for the debt component from the fair value of the entire
instrument. The pro rata transaction costs of the equity component
are deducted from this component. No gain or loss will result from
the exercise or expiry of the relevant conversion option.
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTING
At initial measurement, derivative financial instruments are
measured at the fair value attributable to them on the date the
contract is entered into and recognised in the balance sheet.
Subsequent remeasurement is also recognised at the fair value
calculated at the respective balance sheet date. Where derivative
financial instruments are not part of a designated hedging
relationship in connection with hedge accounting, they are
classified as 'at fair value through profit and loss'. The method
used to recognise gains and losses depends on whether the
derivative financial instrument has been fully or possibly only
partly designated as a hedging instrument, and on the nature of the
hedged item. Changes in the fair value of a derivative financial
instrument not designated as a hedging instrument or the component
of a derivative financial instrument not designated as a hedging
instrument are immediately recognised through profit and loss. If,
by contrast, an effective hedging relationship exists, the
transaction is recognised as a hedge. The unrealised gains and
losses from the fair value valuation of derivative financial
instruments that are designated as hedging instruments within hedge
accounting are initially recognised in equity without affecting
profit or loss. In the case of derivative financial instruments
that are not part of a hedging relationship, the effect on profit
or loss is immediate, i. e. the changes from the fair valuation are
recognised through profit and loss.
TUI Group uses the accounting policy choice provided by IFRS 9,
enabling entities to continue applying the hedge accounting
requirements of IAS 39. Hedge accounting is exclusively used to
hedge the exposure due to foreign currency and fuel price
fluctuations in cash flows from highly probable forecast
transactions (cash flow hedges). Hedges of balance sheet items
(fair value hedges), i. e. hedges of the fair value of an asset or
a liability, which would be accounted for at amortised cost, are
currently not designated.
Upon entering into a transaction, TUI documents the hedge
relationship between the hedge and the underlying transaction, the
risk management goal and the underlying strategy. In addition, a
record is kept of the assessment, both at the beginning of the
hedge relationship by using the Critical Terms Match method and on
a continual qualitative basis, as to whether the derivatives used
for the hedge are highly effective in compensating for the changes
in the fair values or cash flows of the underlying
transactions.
The effective portion of changes in the fair value of
derivatives forming cash flow hedges is recognised in equity
without affecting profit and loss. Any ineffective portion of such
changes in the fair value, by contrast, is recognised immediately
in the income statement through profit and loss. Amounts taken to
equity are reclassified to the income statement and carried as
income or expenses in the period in which the hedged item or the
hedge has an effect on results or it is no longer highly expected
that the hedged item or a corresponding part thereof will
occur.
If a hedge expires, is sold or no longer meets the criteria of
IAS 39 for hedge accounting, the cumulative gain or loss remains in
equity and is only recognised in the income statement through
profit and loss when the originally hedged future forecasted
transaction occurs. If the future transaction is no longer expected
to take place, the cumulative gains or losses recognised directly
in equity are immediately recognised through profit and loss.
More detailed information on the Group's risk management
activities is provided in Note 41 and as well as in the 'Risk
report' section of the Management Report.
Contractual assets and trade receivables
If TUI has fulfilled their contractual obligations, contractual
assets or trade receivables are carried. Trade receivables are
carried if the claim for the acquisition of the consideration is no
longer subject to a condition. As a rule, this is the case when the
Group is contractually entitled to issue an invoice to the customer
that has not yet been paid in advance through a customer deposit.
Due to the tourism business model under which customers pay for
their travel services in advance, TUI generally does not have any
contractual assets.
Contractual costs
The direct costs immediately resulting from obtaining a
contract, e. g. sales commissions to travel agencies for sales of
travel services, are capitalised as contractual costs in the
statement of financial position upon payment of the commission. As
a rule, the resulting expenses are recognised over the duration of
the travel service in line with the associated revenue.
Inventories
The measurement method applied to similar inventory items is the
weighted average cost formula.
Cash and cash equivalents
Cash and cash equivalents comprise cash, call deposits, current
account balances and other highly liquid current financial assets
with an original term of a maximum of three months, such as shares
in money market funds. Investments in money market funds are made
in shares with a stable net asset value or LVNAV (low volatility
net asset value). The investment criteria of the individual money
market funds, their credit ratings, historical performance and
stress tests meet the criteria for cash and cash equivalents. As
the contractual cash flows of the money market funds do not
exclusively comprise interest and principal payments, they are
measured at fair value through profit or loss.
Bank overdrafts are shown as liabilities to banks under current
financial liabilities.
Equity
Ordinary shares are classified as equity. Costs directly
attributable to the issue of new shares or conversion options are
taken to equity on a net after-tax basis as a deduction from the
issuance proceeds.
Own shares
The group's holdings in its own equity instruments are shown as
deductions from shareholders' equity at cost, including directly
attributable transaction costs. No gain or loss is recognised in
the income statement on the purchase or sale of shares. Any
difference between the proceeds from sale and the original cost are
taken to reserves.
Pension provisions
The pension provision recognised for defined benefit plans
corresponds to the net present value of the defined benefit
obligations (DBOs) as at the balance sheet date less the fair value
of the plan assets. If the value of the plan assets exceeds the
value of the DBO, the excess amount is shown within other
non-financial assets as far as the capitalisation is not limited
under the asset ceiling defined in IAS 19. The DBOs are calculated
annually by independent actuaries using the projected unit credit
method.
For defined contribution plans, the Group pays contributions to
public or private pension insurance plans on the basis of a
statutory or contractual obligation or on a voluntary basis. The
Group does not have any further payment obligations on top of the
payment of the contributions. The contributions are recognised
under staff costs when they fall due.
Other provisions
Other provisions are formed when the Group has a current legal
or constructive obligation as a result of a past event, where in
addition it is probable that assets will be impacted by the
settlement of the obligation and the level of the provision can be
reliably determined.
Where a large number of similar obligations exist, the
probability of a charge over assets is determined on the basis of
this group of obligations. A provision is also recognised if the
probability of a charge over assets is low in relation to an
individual obligation contained in this group.
Provisions are measured at the present value of the expected
expenses, taking account of a pre-tax interest rate, reflecting
current market assessments of the time value of money and the risks
specific to the liability. Risks already taken into account in
estimating future cash flows do not affect the discount rate.
Increases in provisions due to accretion of interest are recognised
as interest expenses through profit or loss.
Government grants
Government grants are recognised if there is reasonable
assurance that TUI will comply with all attached conditions for
receiving the grant and the grant will be awarded. Investment
grants received are deducted from the carrying amounts of assets in
property, plant or equipment where these grants are directly
allocable to individual assets. If a direct allocation of grants to
individual items of property, plant or equipment is not possible,
or if the grants are from other government programmes, the grants
and subsidies received are recognised as deferred income and shown
within Other liabilities. Grants related to income are deducted
from related expenses in the period in which the corresponding
expenses are incurred. Government grants include, for example,
income subsidies or social security contributions for short-time
allowances. If short-time allowance is a personal benefit for the
employee, the respective payments are not recognised as income in
the statement of profit or loss.
Touristic advance payments received (contract liabilities)
A contract liability is an obligation of the Group to deliver
goods or services for a customer for which the customer has already
delivered a performance, e. g. in the form of payment of a deposit.
In the tourism business model, customers pay deposits on most
travel services prior to departure. The deposits received therefore
constitute contract liabilities within the meaning of IFRS 15.
Deferred taxes and income taxes
Expected tax savings from the use of tax losses carried forward
assessed as recoverable in the future are recognised as deferred
tax assets. Regardless of the unlimited ability to carry German tax
losses forward which continues to exist, the annual utilisation is
limited by the minimum taxation. Foreign tax losses carried forward
frequently have to be used within a given country-specific time
limit and are subject to restrictions concerning the use of these
losses carried forward for profits on ordinary activities, which
are taken into account accordingly in the measurement.
Income taxes are charged or credited directly to equity or other
comprehensive income if the tax relates to items that are charged
or credited to equity or recognised in other comprehensive income
without affecting Group profit or loss.
Deferred tax assets are recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary difference or an unused tax loss can be
utilised.
Deferred taxes are measured at the tax rates and tax provisions
applicable at the balance sheet date or adopted by law and expected
to be applicable at the date of recognition of the deferred tax
asset or the payment of the deferred tax liability.
Deferred and current income tax liabilities are offset against
the corresponding tax assets if they exist in the same fiscal
territory and have the same nature and maturity.
Based on the OECD initiative, numerous jurisdictions are in the
process of the introduction of a global minimum tax. The aim of
this minimum taxation is to ensure that multinational groups with a
turnover of over EUR 750 m are subject to a minimum taxation of 15
%. As a potentially affected company, TUI is closely following the
worldwide development towards the introduction of global minimum
taxation and is analysing the potential impact on TUI. As the
transposition into local law has not yet been finalised and the
draft regulations published to date are highly complex, TUI has not
yet been able to make a reliable estimate of the future impact. TUI
has applied the temporary exception issued by the IASB in May 2023
from the accounting requirements for deferred taxes in IAS 12.
Accordingly, TUI neither recognises nor discloses information about
deferred tax assets and liabilities related to Pillar Two income
taxes.
Share-based payments
Share-based payment schemes in the Group comprise both
cash-settled and equity-settled schemes.
For cash-settled transactions, the resulting liability for the
Group is charged to expenses at its fair value as at the date of
the performance of the service by the beneficiary. Until settlement
of the liability, the fair value of the liability is re-measured at
every closing date and all changes in the fair value are recognised
through profit and loss.
For equity-settled transactions the fair value of the awards
granted is recognised under staff costs with a corresponding direct
increase in equity. The fair value is determined at the point when
the awards are granted and spread over the vesting period during
which the employees become entitled to the awards. The method for
the calculation of the granted awards is described in note 40
'Share-based payments in accordance with IFRS 2'.
Summary of selected accounting and measurement methods
The table below lists the key accounting and measurement methods
used by TUI Group.
Summary of selected measurement bases
Item in the statement of Measurement base
financial position
Assets
Goodwill At cost (subsequent measurement: impairment test)
Other intangible assets with At amortised cost
definite useful lives
Property, plant & equipment At amortised cost
Right-of-use assets At amortised cost
Investments in joint ventures At the Group's share of the net assets of the joint ventures
and associates and associates
Financial assets
Equity instruments At fair value through other comprehensive income
(without subsequent reclassification to profit or loss)
Trade and other receivables At amortised cost or at fair value through profit or loss (depending on the underlying
business model and the contractual cash flows)
Derivative financial instruments At fair value through profit or loss
Cash and cash equivalents At amortised cost or at fair value through profit or loss
Inventories Lower of cost and net realisable value
Touristic prepayments At cost (or lower recoverable amount)
Assets held for sale Lower of cost and fair value less costs of disposal
Liabilities and Provisions
Financial liabilities At amortised cost
Provision for pensions Projected unit credit method
Other provisions Present value of the settlement amount
Lease liabilities At amortised cost
Touristic advance payments At amortised cost
received
Other financial liabilities
Non-derivative financial At amortised cost
liabilities
Derivative financial liabilities At fair value through profit or loss
Payables, trade and other At amortised cost
liabilities
Key judgements, assumptions and estimates
The presentation of the assets, liabilities and provisions as
well as contingent assets and liabilities shown in the consolidated
financial statements is based on judgements, assumptions and
estimates. Any uncertainties are appropriately taken into account
in determining the values.
All estimates and assumptions are based on the conditions and
assessments as at the balance sheet date. In evaluating the future
development of business, reasonable assumptions are made regarding
the expected future economic environment in the business areas and
regions in which the Group operates.
Despite careful preparation of the estimates, actual results may
differ from the estimate. In such cases, the assumptions and the
carrying amounts of the assets and liabilities concerned, if
necessary, are adjusted accordingly. As a matter of principle,
changes in estimates are taken into account in the financial year
in which the changes have occurred and in future periods.
Judgements
The judgements made by management in applying accounting
policies that may have a significant impact on TUI Group's assets
and liabilities mainly relate to the following topics:
-- Assessment of when the Group has control over an investee and
therefore consolidates this investment
-- Definition of whether a Group company acts as an agent or as
a principal in a transaction
-- Determination of whether an agreement is to be classified as
a lease or contains a lease
-- Determination of the term of the lease as a lessee in the
event of agreements with extension ortermination options
Determination of the term of the lease as a lessee
TUI determines the term of the lease based on the
non-cancellable period for which the lessee has the right to use
the asset, together with any periods covered by extension options,
if exercise of that option by TUI is reasonably certain, as well as
periods covered by termination options if TUI is reasonably certain
that it will not exercise that option. Many of TUI's individually
negotiated aircraft and real estate leases contain extension or
termination options.
TUI applies judgement in evaluating whether it is reasonably
certain that an option to renew will be exercised or that an option
to terminate the lease will not be exercised. In this context, TUI
considers all relevant facts and circumstances that create an
economic incentive for TUI to exercise, or not to exercise, the
extension or termination option, respectively. From the
commencement date, TUI remeasures the lease term if there is either
a significant event or a significant change in the circumstances
within our control that alters any of our assessments about what is
reasonably certain. The lease term, for instance, is adjusted if an
extension option is exercised or if a termination option is not
exercised and if this had been considered differently in the
original assessment.
For aircraft leases, we determine the end of the lease term on
the basis of the contractually agreed return date. For medium- to
long-term property agreements, e. g. office buildings, hotels or
travel agency leases, options to renew the lease are included in
the lease term to the extent to which TUI presumes that the future
exercise of the option is reasonably certain in the individual
case.
For information on potential future lease payments relating to
periods after the exercise date for extension or termination
options, please refer to Note 15.
Assumptions and estimates
Assumptions and estimates that may have a material impact on the
amounts reported as assets and liabilities in TUI Group are mainly
related to the following balance sheet-related facts and
circumstances:
-- Assumptions for use in impairment tests, in particular for
goodwill and property, plant and equipment
-- Effect of climate-related risks on the useful lives and the
measurement of assets
-- Determination of the fair values for acquisitions of
companies and determination of the useful lives ofacquired
intangible assets
-- Determination of useful lives and residual carrying amounts
of property, plant and equipment
-- Determination of actuarial assumptions to measure pension
obligations
-- Recognition and measurement of other provisions
-- Determination of the incremental borrowing rate used to
measure lease liabilities
-- Recoverability of future tax savings from tax losses carried
forward and tax-deductible temporarydifferences
-- Measurement of tax risks
-- Recoverable amounts of touristic prepayments
-- Determination that the package holiday represents a
performance obligation due to the significantintegration
service
-- Determination of period-related revenue recognition on a
straight-line basis over the duration of thetrip
-- Determination of the expected credit losses (ECL) of
financial instruments
Assumptions for use in impairment tests, in particular for
goodwill and property, plant and equipment
The impairment tests are performed on the basis of future
discounted cash inflows derived from the medium-term corporate
planning. Both the derivation of future cash inflows and the
determination of the interest rate are heavily influenced by
assumptions and estimates and are associated with uncertainties, in
particular due to the strong general increase in prices and
interest rates, which could lead to a decline in demand for tourism
products and increased expenses for input factors. In addition
assumptions and estimates regarding the financial impact of
climate-related risks were made, which are described further
below.
In the financial year 2023 TUI left behind the impacts of the
COVID-19 pandemic. In the holiday experience division the complete
product portfolio could be offered. In aviation business
disruptions did not occur unlike in the financial year 2022. The
number of guests reached near pre crisis levels, revenues exceeded
pre crisis levels. In contrast the financial year 2023 was still
affected by the general increase in prices, especially for fuel,
and by changes in exchange rates. TUI was insufficiently hedged
against these changes due to limited access to relevant hedging
instruments. However, overall all the segments increased their
results in comparison to the financial year 2022.
For the financial year 2024 it is expected that customer volumes
will reach 2019 levels. In the course of the financial year 2023
TUI improved its financial position due to the recovery of its
business, the capital increase and the prolongation of the RCF.
Accordingly TUI has now far more options to hedge against changes
in fuel prices or exchange rates. The further digitalisation of our
business and the expansion of existing and new business areas are
expected to take effect. Below we describe the key assumptions
underlying the medium-term business planning in the segments.
In its business plan, Hotels & Resorts expects to deliver
further earnings growth due to capacity expansion, demand growth
and increases in average selling prices.
In the Cruises segment, results are expected to recover further
in the financial year 2024 as the winter season of the financial
year 2023 was still affected by the comparative late recovery of
demand in 2022. Furthermore, results will increase until 2026 due
to the expansion of the fleets of Marella and TUI Cruises. In
Summer 2023 Marella took over one cruise ship from TUI Cruises,
which will deliver a full year's trading result in 2024. TUI
Cruises will launch a new ship in Summer 2024 and expand its fleet
to nine ships (excluding the Hapag Lloyd Kreuzfahrten brand) in the
following years to 2027. However, the results will be negatively
impacted by the cost of meeting the emission reducing regulatory
measures, notably the introduction of the EU emission trading
system from 2024.
The future development of TUI Musement depends in part on the
development of customer numbers in Markets & Airlines. TUI
Musement will also generate growth through the sale of tours,
activities and tickets due to the expansion of its own / direct
distribution via the internet and the app.
In Markets & Airlines, beginning with the financial year
2024 it is expected that customer numbers will reach 2019 levels.
Wider use of online distribution and distribution by the app, the
provision of dynamic production capacities for flights and
accommodation and the investments in digitalisation are expected to
further improve the results. In addition, TUI has now by far more
options to hedge against changes in fuel prices and in exchange
rates in comparison to financial year 2023. Conversely the emission
trading system of the EU and Great Britain will lead to higher
expenses. In addition, the usage of alternative fuels with lower
climate-damaging emissions will increase in order to reach emission
reduction targets for 2030 and beyond. These fuels are more
expensive than conventional kerosine. For further information on
assumptions and estimates in relation to climate related risks we
refer to the section below.
Other key factors are the weighted average cost of capital after
income taxes (WACC), on which discounting is based, the sustainable
growth rate and the growth in perpetuity. Changes in these
assumptions may have a significant impact on the recoverable amount
and the amount of any impairment loss.
The weighted average cost of capital after income taxes (WACC),
on which discounting is based, was derived from external capital
market information about comparable companies. The cost of capital
to Markets & Airlines was increased by an additional risk
premium of 2.1 % (previous year: 1.9 %). This additional risk
premium was based on an analysis of internal and external market
expectations and reflects the elevated uncertainty with regard to
medium- and long-term market developments. Additional
country-specific risk premiums are included, in particular, in the
measurement of individual hotels. For further details on the
determination of WACC refer to the section 'Goodwill'.
Finally we have implemented sensitivity analyses to estimate the
uncertainty associated with the assumptions on which the impairment
tests are based. The sensitivities and their impact on the fair
value result exclusively from the adjustment of individual
parameters. Possible compensatory measures were not taken into
account. Sensitivities have been calculated for changes of the WACC
and sustainable growth in perpetuity. In addition, sensitivity
analyses have been carried out for a general increase or decrease
of future cash flows and for material climate related risks. For
further details refer to the section 'Goodwill'.
Effect of climate-related risks on the useful lives and the
measurement of assets
Overview of climate related risks
The tourism industry faces significant impacts from climate
change. As temperature rises the attractiveness of certain
destinations might decline. Extreme weather events due to climate
change might damage our assets and might lead to increased
cancellations of holidays. Political and legal developments might
increase the expenses for emission certificates and customer
preferences might change. Climate change might also present
opportunities for TUI to extending the touristic season in summer
destinations or to diversify to new regions. All these changes
impact to some extend already and will have a more significant
impact on long term financial performance.
As a result of climate-related risks TUI has committed to the
Science Based Targets initiative (SBTi) to reduce emissions by 2030
in comparison to a baseline 2019. Our targets are:
-- Reduction of airline CO2e per revenue passenger kilometer by
24 % by 2030
-- Reduction of absolute CO2e from our cruise operations by 27.5
% by 2030
-- Reduction of absolute CO2e from TUI Hotels & Resorts by
46.2 % by 2030
Furthermore it is the commitment of TUI to achieve net-zero
emissions by 2050. The reduction of emissions will be accomplished
with investments in new technologies and the use of fuel with less
CO2 emissions.
To assess the impact of climate-related risks on our financial
performance and business model TUI has conducted a qualitative and
quantitative climate risk assessment in the financial year 2023. A
number of assumptions underpin this assessment regarding changes to
the intensity and frequency of weather related events, technology
development, development of energy and carbon prices and the
development of knowledge on global warming. The impact of
climate-related risks was assessed for two scenarios, one scenario
which implies a global warming of approximately 4.3°C and a
scenario which implies a global warming of approximately 1.5°C,
both by 2100. The analysis was carried out for the periods until
2030, 2040 and until 2050. The level of uncertainty of the results
of the analysis increases over time.
Given the uncertainty TUI has applied critical estimation and
judgment in the evaluation of the impact of climate-related risks
regarding the recognition and measurement within its financial
statements which are described below.
Effect of climate-related risks on the useful lives of
assets
The useful lives of assets can be affected by climate-related
risks in different ways:
-- Physical changes in the climate like an increased frequency
and intensity of acute events (storms, fireand floodings) as well
as long term trends like increased temperature might impact our
assets
-- Transitional changes related to the transition to a
low-carbon economy including policy, legal,technology and market
changes might affect the use of our assets
In the assessment of the impact of the climate change on the
useful lives of our assets TUI applied the following assumptions
and estimates:
The impact of physical risks on our aircrafts and our cruise
ships is assumed to be low. Both assets could be flexibly used and
itineraries or flight routes could be adjusted. The main risk
relates to the commitment of TUI to decarbonize its business.
However, all aircrafts of the current aircraft fleet have the
capability to utilise sustainable aviation fuel (SAF). In addition
the useful lives of our aircrafts, which are mainly leased and
recognised as right of use assets, end before 2050 so that TUI
could replace the aircraft with new technologies such as hydrogen
powered aircraft if these prove viable. Likewise our cruise ships
can either already utilise sustainable marine fuel (SMF) or can be
converted to do so. Accordingly TUI concluded that climate-related
risks do not affect the useful life of aircrafts or cruise
ships.
TUI assessed as well the useful lives of our Hotels in light of
climate related risks. Based on the aforementioned analysis TUI
concludes that the risk from acute weather events like storms, fire
and floodings will increase only to a level which is still
manageable through insurance and the large and regional spread of
our hotels & resorts portfolio. Furthermore the increase of
these risks will most likely occur in the long term so that our
leased hotels with a relatively short useful life are less
affected. Based on this analysis TUI concludes that none of our
hotels will have a reduced useful life due to sea level rise. The
risk for our hotels relating to the decarbonization of our business
is assumed to be low as there exists already technology to produce
carbon neutral energy for example from renewable sources such as
solar panels or wind turbines. The useful lives of our hotels could
also be affected by consumer behaviour reacting to increased
temperatures. Certain destinations might see a reduced number of
tourists in the long term, especially in the peak season e. g. in
summer in the Mediteranean. However, it is assumed that the
shoulder seasons in spring and autumn will become broader which
will mitigate this effect. In addition TUI has the ability to steer
our customers to our owned Hotels and to manage reduced numbers of
guests through reduction in use of 3rd party capacity. Overall, TUI
does not see any impact of climate-related risks on the useful life
of hotels.
Overall, useful lives and residual values have not been amended
in the prior and current financial year as a result of climate
related risks.
Impact of climate-related risks on the measurement of deferred
tax assets in relation to losses carried forward
TUI applies a five-year planning horizon derived from its
medium-term corporate planning when determining the usability of
tax losses carried forward and deductible temporary differences.
Medium-term climate-related risks are factored into the measurement
of deferred tax assets in relation to losses carried forward.
Accordingly, the considerably higher charges that will occur in the
long term do not impact the measurement of deferred tax assets in
relation to losses carried forward.
Impact of climate-related risks on impairment tests, in
particular for goodwill and property, plant and equipment
When performing impairment tests, the discounted future
financial charges determined on the basis of the above-mentioned
climate-related risk analysis were deducted from the discounted
future cash flow surpluses calculated based on our medium-term
planning. Due to the long-term nature of these future charges and
uncertain technological and regulatory developments, the charges
determined in this manner are subject to a high level of
uncertainty.
The underlying assumption is that until 2030 TUI will reduce its
climate-damaging emissions in accordance with the SBTi and will
subsequently follow a linear path to achieving net-zero emissions
by 2050. It is likewise assumed that the emissions of our suppliers
are reduced for the period until 2050. These will be achieved in
particular by gradually replacing aircraft fuel and bunker oil with
fuels that do not cause climate-damaging emissions. The expectation
here is that these fuels will be available in sufficient
quantities. This assumption depends on the development of
technologies and production capacities and is therefore subject to
elevated uncertainty. A key estimate concerns price movements for
fuels without greenhouse gas emissions. Currently the prices for
these fuels are by far higher as conventional fuels. It is assumed
that the prices will level off by 2050.
Technological innovation, such as in the form of
hydrogen-powered aircraft, is not taken into account. Greater fuel
efficiency was only considered insofar as it relates to the planned
fleet renewal in aviation or else can be achieved by means of known
technologies such as underwater coatings on cruise ships. Fleet
expansion in the Cruises segment has also been factored in. In the
segment Hotels & Resorts, it is assumed that emission
reductions will be achieved by means of existing and continued
investments in renewable energies, such as solar panels.
This reduction in greenhouse gas emissions will be underpinned
by a public regulatory framework encompassing everyone, including
TUI's suppliers, leading in particular to a reduction in free
emission allowances or an increase in the price of emission
certificates. While harmful gas emissions will be reduced in the
manner described above, rising prices for emission certificates
will generate substantial financial charges before the expenses for
emission certificates drop to zero in 2050. The calculation of
these financial charges reflects TUI's own costs and the costs of
emission certificates passed on by suppliers.
In addition, physical risks from climate-related one-off events
such as storms or floods or long-term developments such as rising
temperatures, affecting the Hotels & Resorts segment, were
taken into account. Average annual charges were determined based on
external studies. It is expected that the financial impact of these
climate-related risks are relatively low.
Overall, the use of low-emission fuels and rising prices for
emission certificates will lead to significant financial charges,
particularly for energy-intensive aviation operations in the
Northern Region, Western Region, and Central Region segments. The
Cruises segment will also be impacted. In Hotels & Resorts
segment, the burden will be relatively low; in fact, the autonomous
generation of energy, such as by means of solar power, may even
generate cost savings.
One key assumption, then, concerns the extent to which costs for
low-emission fuels and emission certificates can be passed on to
customers. TUI assumes that the reduction in greenhouse gas
emissions will generate general price increases (green inflation).
TUI additionally benefits from opportunities to pass on costs
across the entire value chain. Overall, TUI therefore assumes that
it will be able to pass on 90 % of the costs in aviation, a sector
that is particularly affected, and 95 % in other sectors.
In the light of the uncertainties regarding the long-term
financial burden from climate-related risks, TUI has calculated
sensitivities for the particularly affected Markets & Airlines
and Cruises. These are presented in the section on 'Goodwill'. The
sensitivities relate to assumptions on the development of climate
related risks in general, the development of prices for alternative
fuels and emission certifivates and the potential for passing on
climate change-related costs to our customers. Overall, TUI does
not regard climate-related risks as a triggering event for carrying
out impairment tests.
Business acquisitions and intangible assets
In accounting for business combinations, the identifiable
assets, liabilities and contingent liabilities acquired have to be
measured at their fair values. In this context, cash flow-based
methods are regularly used, which may lead to different results
depending on the underlying assumptions. In particular, some
judgement is required in estimating the economic useful lives of
intangible assets and determining the fair values of contingent
liabilities.
Detailed information on business acquisitions and useful lives
of intangible assets is provided in the section 'Acquisitions -
divestments' in the section on 'Principles and methods of
consolidation' and in the section on 'Goodwill and other intangible
assets' of the section 'Accounting and measurement methods'.
Property, plant and equipment
The measurement of wear-and-tear to property, plant and
equipment items entails estimates. The carrying amount of property,
plant and equipment as at 30 September 2023 totals EUR 3,480.3 m
(previous year EUR 3,400.9 m). Material assumptions and estimates
are the determination of useful lives and residual carrying amounts
of property, plant and equipment. The effects of climate-related
risks are also taken into account here. From the analysis to review
the amounts carried, an evaluation is carried out on a regular
basis to assess whether there are any indications of a potential
impairment. These indications relate to a number of areas and
factors, e. g. the market-related or technical environment but also
physical condition. If any such indication exists, management must
estimate the recoverable amount on the basis of expected cash flows
and appropriate interest rates.
More detailed information on the useful lives and residual
values of property, plant and equipment items is provided in the
section 'Property, plant and equipment' in the section 'Accounting
and measurement methods'.
Pension provisions
As at 30 September 2023, the carrying amount of provisions for
pensions and similar obligations totals EUR 670.4 m (previous year
EUR 601.3 m). For those pension plans where the plan assets exceed
the obligation, other non-financial assets amounting to EUR 98.5 m
are shown as at 30 September 2023 (previous year EUR 163.4 m).
In order to determine the obligations under defined benefit
pension schemes, actuarial calculations are used which rely on
underlying assumptions concerning life expectancy and the discount
rate.
At the balance sheet date, the fair value of the plan assets
totals EUR 1,905.8 m (previous year EUR 2,076.4 m). As assets
classified as plan assets are never available for short-term sale,
the fair values of these plan assets may change significantly up to
the realisation date.
Detailed information on actuarial assumptions is provided in
Note 30.
Other provisions
As at 30 September 2023, other provisions amount to EUR 1,181.9
m (previous year EUR 1,296.0 m). When recognising and measuring
provisions, assumptions to a considerable content regarding the
probability of occurrence, maturity and level of risk are
required.
Determining whether a current obligation exists is usually based
on review by internal or external experts. The amount of provisions
is based on expected expenses, and is either calculated by
assessing the specific case in the light of empirical values,
outcomes from comparable circumstances or ranges of possible
claims, or else estimated by experts. Due to the uncertainties
associated with assessment, actual expenses may deviate from
estimates so that unexpected charges may result.
More detailed information on Other provisions is provided in the
Notes to the statement of financial position in Note 31.
Lease liabilities
As at 30 September 2023, lease liabilities worth EUR 2,918.1 m
(previous year EUR 3,207.5 m) were carried, reflecting the present
value of the future lease payments as at that date. The interest
rate implicit in the lease can only be easily determined in
exceptional cases. In all other cases TUI therefore uses its own
incremental borrowing rate to measure the lease liability. The
incremental borrowing rate is the interest rate TUI would have to
pay to borrow over a similar term, and with a similar security, the
funds necessary to obtain an asset of a similar value to the
right-of-use asset in a similar economic environment. Determining
the incremental borrowing rate therefore regularly involves
estimates regarding the interest rate the Group would have to pay.
In this context, estimates are required, for instance, to determine
the interest the Group companies would have to pay if no observable
interest rates are available, or if adjustments are required
regarding the specific agreed terms and conditions such as the
transaction currency or contract term. TUI determines the
incremental borrowing rate using observable inputs (bond yields and
CDS quotations) and makes specific adjustments for individual
companies (e. g. country risk premiums).
Deferred tax assets
As at 30 September 2023, deferred tax assets totalling EUR 310.6
m (previous year EUR 222.0 m) were recognised. Prior to offsetting
against deferred tax liabilities, deferred tax assets total EUR
675.7 m, including an amount of EUR 269.4 m (previous year EUR
194.4 m) for recognised losses carried forward. The assessment of
the recoverability of deferred tax assets is based on the ability
of the respective Group company to generate sufficient taxable
income. TUI therefore assesses at every balance sheet date whether
the recoverability of expected future tax savings is sufficiently
probable in order to recognise deferred tax assets. The assessment
is based on various factors including internal forecasts regarding
the future earnings situation of the Group company. TUI uses a
five-year planning horizon to derive the recoverability of tax loss
carryforwards and deductible differences. If the assessment of the
recoverability of deferred tax assets changes, the carrying amount
of deferred tax assets will be reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to
allow the benefit of part or all of that deferred tax asset to be
utilised. Any such reduction is subsequently reversed to the extent
that it becomes probable that sufficient taxable profit will be
available.
More detailed information on deferred tax assets is available in
the Notes to the statement of financial position in Note 20.
Income taxes
The Group is liable to pay income taxes in various countries.
Key estimates are required when determining income tax liabilities,
including the probability, the timing and the size of any amounts
that may become payable. For certain transactions and calculations
the final tax charge cannot be determined during the ordinary
course of business. After taking appropriate external advice, the
Group makes provisions or discloses contingencies for uncertain tax
positions based on the probable or possible level of additional
taxes that might be incurred. The level of obligations for expected
tax audits is based on an estimation of whether and to what extent
additional income taxes will be due. Judgements are corrected, if
necessary, in the period in which the final tax charge is
determined.
Recoverable amounts of touristic prepayments
As at 30 September 2023, the carrying amount of touristic
prepayments totals EUR 939.9 m (previous year EUR 757.6 m). The
assessment of the recoverable amounts of touristic prepayments made
to hoteliers requires judgement about the volume of future trading
with hoteliers and the credit worthiness of those hoteliers. To
assess the recoverability of touristic prepayments, TUI considers
the financial strength of those hoteliers, the quality of the
hotels as well as the demand for each hotel and the relevant
destination during the past and in forthcoming seasons.
Financial instruments
When measuring ECL of financial instruments under IFRS 9 TUI
uses, besides historical information, reasonable and supportable
forward-looking information, which is based on assumptions for the
future movement of different economic drivers. The uncertainty
remains that this future ECL will not be in line with actual
default rates due to market development.
Segment Reporting
Notes to the segments
The identification of operating segments is based on the
internal organisational and reporting structure primarily built
around the different products and services as well as a
geographical structure within TUI Group. Allocation of individual
organisational entities to operating segments is exclusively based
on economic criteria, irrespective of the participation structure
under company law. The segments are independently managed by those
in charge, who regularly receive separate financial information for
each segment. They regularly report to the Group Executive
Committee, which consists of six Executive Board members and five
other executives. The legally binding decision regarding the use of
resources is taken by the Executive Board. TUI Group's Executive
Board has therefore been identified as the Chief Operating Decision
Maker (CODM) in accordance with IFRS 8.
The Hotels & Resorts segment comprises all Group-owned
hotels and hotel shareholdings of TUI Group.
The Cruises segment consists of the joint venture TUI Cruises,
its subsidiary Hapag-Lloyd Cruises as well as the British cruise
business Marella Cruises.
The TUI Musement segment comprises the companies providing
services in the destinations.
The income statement items of the aircraft leasing companies
holding 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
segments).
The Northern Region segment comprises the tour operators and
airlines in the UK, Ireland and the Nordic countries and the stake
in the tour operation business of the Canadian company Sunwing. Our
strategic investment in Sunwing Travel Inc., Canada, sold its tour
operator business, which was previously included in this segment,
in May 2023. This segment also includes the tour operator TUI Lakes
& Mountains, which plays a major role in securing the load
factor for our UK aircraft fleet in winter.
The Central Region segment comprises the tour operators and
airlines in Germany and tour operators in Austria, Poland and
Switzerland.
The Western Region segment comprises the tour operators and
airlines in Belgium and the Netherlands and tour operators in
France.
Apart from the above segments, the recognised items also include
All other segments. This comprises in particular the central
corporate functions and interim holdings of TUI Group and the
Group's real estate companies, as well as central tourism functions
such as information technology. The Future Markets Division was
dissolved in the year under review and the activities managed here
were reclassified from All other segments to the Hotels &
Resorts, TUI Musement and Central Region segments. The prior
periods were adjusted.
Notes to the segment data
The selection of segment data presented is based on the regular
internal reporting to the Executive Board. From the 2020 financial
year onwards, adjusted EBIT is the segment performance indicator
within the meaning of IFRS 8.
We define the EBIT in underlying EBIT as earnings before
interest, income taxes and result of the measurement of the Group's
interest hedges. EBIT by definition includes goodwill
impairments.
Underlying EBIT is adjusted for by income and expense items
impacting or distorting the assessment of the operating
profitability of the segments and the Group due to their level and
frequency. These separately disclosed items include gains on
disposal from investments, major gains and losses from the sale of
assets and major restructuring and integration expenses. In
addition, adjustments are carried for all effects from purchase
price allocations, ancillary acquisition costs and conditional
purchase price payments. Adjustments made in the reconciliation to
underlying EBIT also include goodwill impairments.
In financial year 2023, net income totalling EUR 45.8 m was
adjusted as separately disclosed items.
The adjusted separately disclosed items for the financial year
2023 include a positive gain on disposal of EUR 91 m from the sale
of the tour operator business by the equity method accounted
company Sunwing Travel Group Inc., Ontario in the Northern Region
segment and a profit share from the disposal of our 49 % stake in
the joint venture Riu Hotels S. A. to a company of the Riu Group in
the financial year 2021 (EUR 3 m). In addition, expenses in
connection with the sale of an investment in All other segments
(EUR 1 m) and in the Hotels & Resorts segment (EUR 1 m) were
adjusted. The adjusted restructuring expenses related to the
Central Region (EUR 4 m), All other segments (EUR 45 m, in
particular from the impairment of software) and TUI Musement (EUR 5
m, mainly from the revaluation of the risk following the
termination of the Tantur / TUI Russia business in the previous
financial year). This was contrasted by income from the reversal of
restructuring provisions no longer required in the Northern Region
(EUR 3 m) and Western Region (EUR 1 m) as well as in Hotels &
Resorts (EUR 4 m).
In financial year 2022, net expenses totalling EUR 58.7 m were
adjusted as separately disclosed items.
The adjusted separately disclosed items for financial year 2022
include restructuring expenses of EUR 94 m in the Hotels &
Resorts (EUR 37 m), Central Region (EUR 21 m), Northern Region (EUR
19 m), TUI Musement (EUR 9 m), All Other Segments (EUR 14 m) and
Western Region (EUR 3 m) segments. Restructuring expenses also
include income of EUR 9 m from the reversal of restructuring
provisions no longer required in Western Region. In addition,
income of EUR 19 m from the sale of the shares in Nordotel S.A,
fully consolidated in the Hotels & Resorts segment, to Grupotel
dos S. A., a joint venture of the TUI Group, income of EUR 16 m
from the subsequent purchase price adjustment of the disposal of
our 49 % stake in the Riu Hotels S. A. joint venture to a company
of the Riu Group in the previous year was adjusted.
The adjusted expenses of EUR 23.7 m (previous year EUR 30.1 m)
from purchase price allocations mainly include scheduled
amortization of intangible assets from acquisitions made in
previous years.
In accordance with IFRS 8 TUI presents intercompany leases - in
line with the internal steering logic - as if they were IAS 17
Operating leases in segment reporting.
Apart from this indicator, internal and external revenue,
depreciation and amortisation, impairments of other intangible
assets (excluding goodwill), property, plant and equipment,
right-of-use assets and investments as well as the share of result
of joint ventures and associates are likewise shown for each
segment, as these amounts are included when determining underlying
EBIT. As a rule, intersegment business transactions are based on
the arm's length principle, as applied in transactions with third
parties. No single external customer accounts for 10 % or more of
revenue.
Assets and liabilities by segment are not included in the
reporting to the Executive Board and are therefore not shown in
segment reporting.
Depreciation and write-backs relate to non-current assets by
region.
Non-current assets by region contain other intangible assets,
property, plant and equipment, right-of-use assets and specific
other non-current assets that do not meet the definition of
financial instruments.
Segment indicators
Revenue by segment*
2023 2022
EUR million External Group Total External Group Total
Hotels & Resorts 1,032.5 822.8 1,855.3 806.2 693.4 1,499.6
Cruises 656.0 - 656.0 331.5 - 331.5
TUI Musement 770.0 390.9 1,160.9 578.4 288.3 866.7
Consolidation - - 1.0 - 1.0 - - 3.6 - 3.6
Holiday Experiences 2,458.5 1,212.7 3,671.2 1,716.0 978.2 2,694.2
Northern Region 7,722.9 328.5 8,051.4 6,320.2 327.8 6,648.0
Central Region 7,329.7 88.2 7,417.9 5,787.3 83.7 5,871.0
Western Region 3,142.8 144.1 3,286.9 2,712.6 146.2 2,858.8
Consolidation - - 528.8 - 528.8 - - 538.1 - 538.1
Markets & Airlines 18,195.4 32.0 18,227.4 14,820.1 19.6 14,839.7
All other segments 11.9 7.8 19.7 8.8 6.2 15.0
Consolidation - - 1,252.4 - 1,252.4 - - 1,004.0 - 1,004.0
Total 20,665.9 - 20,665.9 16,544.9 - 16,544.9
* Due to the resegmentation of Future Markets from All other
segments to Hotels & Resorts, TUI Musement and Central Region
in the current financial year, previous periods have been
adjusted.
Underlying EBIT by segment *
EUR million 2023 2022
Hotels & Resorts 549.5 480.3
Cruises 236.0 0.8
TUI Musement 36.0 23.7
Holiday Experiences 821.5 504.7
Northern Region 71.5 - 101.6
Central Region 88.1 74.6
Western Region 81.1 - 31.5
Markets & Airlines 240.6 - 58.6
All other segments - 84.8 - 37.4
Total 977.2 408.7
* Due to the resegmentation of Future Markets from All other
segments to Hotels & Resorts, TUI Musement and Central Region
in the current financial year, previous periods have been
adjusted.
Reconciliation to underlying EBIT of TUI Group
EUR million 2023 2022
Earnings before income taxes 551.2 - 145.9
plus: Net interest expense (excluding expense / income from measurement 432.6 478.9
of interest hedges)
plus: Expense / less income from measurement of interest hedges 15.6 - 13.0
EBIT 999.3 320.0
Adjustments:
less / plus: Separately disclosed items - 45.8 58.7
plus: Expense from purchase price allocation 23.7 30.1
Underlying EBIT 977.2 408.7
Other segmental information *
Thereof
amortisation /
Amortisation (+), depreciation Thereof impairment Thereof reversal of depreciation of Share of
(+), impairment (+) and of intangible impairment losses on intangible result of
write-backs (-) of other assets and intangible assets and assets and joint
intangible assets, property, property, plant, property, plant, property, ventures and
plant and equipment, right-of-use equipment and equipment and plant, associates
assets and investments right-of-use assets right-of-use assets equipment and
right-of-use
assets
EUR million 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
Hotels & 184.9 208.7 25.0 62.6 21.7 30.6 181.5 176.7 105.3 94.0
Resorts
Cruises 65.4 54.6 - - 11.6 15.2 77.0 69.8 174.2 41.4
TUI Musement 35.3 33.0 1.7 1.2 - - 33.6 31.7 13.2 7.5
Holiday 285.6 296.3 26.7 63.8 33.3 45.8 292.2 278.3 292.7 142.9
Experiences
Northern 296.0 328.1 2.2 4.1 1.3 3.6 295.1 327.6 112.8 - 46.2
Region
Central 97.2 111.2 0.7 5.7 0.1 0.8 96.5 106.2 1.1 3.8
Region
Western 142.2 144.6 0.6 - - - 141.6 144.6 0.3 -
Region
Markets & 535.5 583.9 3.6 9.8 1.3 4.5 533.3 578.5 114.3 - 42.3
Airlines
All other 38.0 3.1 37.4 0.2 - 0.1 0.6 3.1 0.2 0.2
segments
Total 859.1 883.4 67.7 73.9 34.6 50.4 826.1 859.8 407.2 100.7
* Due to the resegmentation of Future Markets from All other
segments to Hotels & Resorts, TUI Musement and Central Region
in the current financial year, previous periods have been
adjusted.
Key figures by region
External revenue by Non-current
customer location assets
EUR million 2023 2022 2023 2022
Germany 5,699.1 4,555.2 276.3 257.8
United Kingdom 7,475.8 6,103.1 3,756.0 3,829.3
Spain 175.6 145.5 564.3 551.4
Other Europe 6,653.7 5,357.9 482.6 483.7
North and South America 494.8 293.7 733.8 728.4
Rest of the world 166.9 89.6 1,141.4 1,196.1
Total 20,665.9 16,545.0 6,954.4 7,046.7
Notes to the Consolidated Income Statement
In the completed financial year, the TUI Group's business volume
was significantly higher than in financial year 2022, which was
still impacted by travel restrictions to contain COVID-19, in
particular in the first half. Moreover, the TUI Group's performance
is subject to significant seasonality due to the tourism business
being characterised by the winter and summer travel months.
(1) Revenue
Group revenue is mainly generated from tourism services. The
other revenues present income from sub-lease. In financial year
2023, consolidated revenue increased by 24.9 % year-on-year from
EUR 16.5 bn to EUR 20.7 bn.
External revenue allocated by destinations for the period from 1 Oct 2022 to 30 Sep 2023*
Spain Other Caribbean, North Rest of Africa, 2023
EUR million (incl. European Mexico, Africa & Ind. Ocean, Other Revenues from Other 2023
Canary destinations USA & Turkey Asia countries contracts with Total
Islands) Canada customers
Hotels & 358.9 89.0 314.9 91.2 178.6 - 1,032.5 - 1,032.5
Resorts
Cruises 232.0 179.5 244.6 - - - 656.1 - 656.0
TUI Musement 111.0 251.1 187.5 39.1 128.0 53.3 770.0 - 770.0
Holiday 701.9 519.6 747.0 130.3 306.6 53.3 2,458.6 - 2,458.5
experiences
Northern 2,246.3 2,384.9 1,292.7 1,175.2 604.9 13.3 7,717.3 5.5 7,722.9
Region
Central 2,037.2 2,254.1 341.5 1,803.7 886.1 5.3 7,327.8 1.9 7,329.7
Region
Western 819.7 902.5 540.9 568.5 290.5 16.6 3,138.7 4.1 3,142.8
Region
Markets & 5,103.2 5,541.5 2,175.1 3,547.4 1,781.5 35.2 18,183.9 11.5 18,195.4
Airlines
All other 0.3 11.1 0.5 - - - 11.9 - 11.9
segments
Total 5,805.4 6,072.2 2,922.6 3,677.7 2,088.1 88.5 20,654.4 11.5 20,665.9
* Due to the re-segmentation of Future Markets from All other
segments to Hotels & Resorts, TUI Musement and Central Region
in the current financial year, previous periods have been
adjusted.
External revenue allocated by destinations for the period from 1 Oct 2021 to 30 Sep 2022*
Spain Other Caribbean, North Rest of Africa, 2022
EUR million (incl. European Mexico, Africa & Ind. Ocean, Other Revenues from Other 2022
Canary destinations USA & Turkey Asia countries contracts with Total
Islands) Canada customers
Hotels & 292.0 85.8 216.1 74.7 137.6 - 806.2 - 806.2
Resorts
Cruises 158.2 124.8 48.3 - - 0.1 331.4 - 331.5
TUI Musement 99.9 203.2 129.1 37.0 63.3 45.9 578.4 - 578.4
Holiday 550.1 413.8 393.5 111.7 200.9 46.0 1,716.0 - 1,716.0
experiences
Northern 1,955.3 1,986.4 1,202.6 816.7 333.1 20.8 6,314.9 5.3 6,320.2
Region
Central 1,646.2 1,987.9 305.3 1,271.3 570.8 5.3 5,786.8 0.5 5,787.3
Region
Western 868.7 832.5 474.6 390.8 138.8 6.0 2,711.4 1.3 2,712.6
Region
Markets & 4,470.2 4,806.8 1,982.5 2,478.8 1,042.7 32.1 14,813.1 7.1 14,820.1
Airlines
All other 0.1 8.3 0.3 - - - 8.7 - 8.8
segments
Total 5,020.4 5,228.9 2,376.3 2,590.5 1,243.6 78.1 16,537.8 7.1 16,544.9
* Due to the re-segmentation of Future Markets from All other
segments to Hotels & Resorts, TUI Musement and Central Region
in the current financial year, previous periods have been
adjusted.
Future revenue from performance obligations not yet delivered as
at 30 September 2023, of which at least twelve months are between
the contract start and the contract end date, totals EUR 799.6 m
(previous year EUR 1,502.1 m), including an amount of EUR 758.3 m
(previous year EUR 1,340.6 m) to be recognised within the next
twelve months. The remaining revenue will be recognised in the
following twelve months.
The touristic advance payments received (contract liabilities)
are presented in Note 34.
(2) Cost of sales and administrative expenses
Cost of sales relates to the expenses incurred in the provision
of tourism services. In addition to the expenses for personnel,
depreciation, amortisation, rental and leasing, it includes all
costs incurred by the Group in connection with the procurement and
delivery of airline services, hotel accommodation, cruises and
distribution costs.
Due to the increased business volume, the cost of sales
increased by 22.0 % from EUR 15.6 bn to EUR 19.1 bn in financial
year 2023.
The cost of sales in financial year 2023 and in the prior year
include effects from the termination of hedging relationships that
were previously designated in hedge accounting relationships. For
more details, please refer to Note 41 'Financial instruments'.
Government grants
EUR million 2023 2022
Cost of Sales 1.6 58.0
Administrative expenses - 0.5 35.5
Total 1.1 93.5
Government grants were awarded due to the measures in place to
contain the COVID-19 pandemic. When these measures ended in
financial year 2022, the various aid programs were also terminated.
The government grants reported under cost of sales and
administrative expenses include in particular grants for wages and
salaries as well as social security contributions directly
reimbursed to the relevant company. In addition, a number of Group
companies have received government grants, e. g. in the form of
grants for fixed costs. In the current financial year receivables
from government grants of EUR 2.9 m were written off. The related
expenses are presented within administrative expenses.
In addition TUI AG received government assistance in the form of
financing measures to cover the liquidity requirements due to the
COVID-19 pandemic from the KfW and the ESF. The financial aid
received from the ESF was fully redeemed in the current financial
year. The volume of the KfW credit facility was reduced from EUR
2.1 bn to EUR 1.05 bn. For further details we refer to the section
'Going concern reporting according to the UK Corporate Governance
Code'.
Administrative expenses comprise all expenses incurred in
connection with activities by the administrative functions and
break down as follows:
Administrative expenses
EUR million 2023 2022
Staff cost 619.2 544.7
Rental and leasing expenses 9.5 11.0
Depreciation, amortisation and impairment 87.0 73.6
Others 299.9 116.9
Total 1,015.6 746.3
Other administrative expenses mainly increased due to the
termination of state aid programmes as well as increased exchange
rates.
The cost of sales and administrative expenses include the
following expenses for personnel and depreciation / amortisation /
impairment:
Staff costs
EUR million 2023 2022
Wages and salaries 1,954.6 1,732.3
Social security contributions 294.9 300.4
Pension costs 108.8 109.2
Total 2,358.3 2,141.9
Pension costs include service cost for defined benefit
obligations and contributions to defined contribution pension
schemes.
In the period under review, TUI Group's personnel expenses rose
from EUR 2.1 bn in the prior year to EUR 2.4 bn. The year-on-year
increase in wages and salaries and social security contributions in
financial year 2023 resulted in particular from a 11.4 % increase
in the average number of employees across the Group.
The average annual headcount (excluding trainees) evolved as
follows:
Average annual headcount in the financial year (excl. trainees)*
2023 2022
Hotels & Resorts 24,442 21,766
Cruises 75 63
TUI Musement 8,965 6,983
Holiday Experiences 33,482 28,812
Northern Region 10,401 9,722
Central Region 6,935 7,001
Western Region 5,310 4,867
Markets & Airlines 22,646 21,590
All other segments 2,214 1,962
Total 58,342 52,364
* Due to the re-segmentation of Future Markets from All other
segments to Hotels & Resorts, TUI Musement and Central Region
in the current financial year, previous periods have been
adjusted.
Depreciation / amortisation / impairment
EUR million 2023 2022
Depreciation and amortisation of other intangible assets, property, plant and 826.1 859.8
equipment and right-of-use assets
Impairment of other intangible assets, property, plant and equipment and 67.7 73.9
right-of-use assets
Total 893.8 933.7
Impairment losses of EUR 45.8 m (previous year EUR 73.6 m) are
presented within cost of sales and EUR 21.9 m (previous year EUR
0.3 m) in administrative expenses.
Impairments losses of EUR 14.0 m (previous year EUR 57.2 m)
relate to property, plant and equipment. Additionally EUR 14.0 m
(previous year EUR 8.8 m) correspond to right-of-use assets and EUR
39.7 m (previous year EUR 7.9 m) to other intangible assets.
In financial year 2023, reversals of impairment losses of EUR
34.6 m (previous year EUR 50.4 m) were recognised which are all
presented in cost of sales. In the previous year EUR 49.6 m were
recorded in cost of sales and EUR 0.8 m in administrative
expenses.
For details of the impairment losses and reversals of impairment
losses effected in financial year 2023, please refer to the
respective sections in the Notes to the consolidated statement of
financial position. A breakdown of impairments and reversals of
impairments is presented in Segment Reporting.
(3) Other income and other expenses
In financial year 2023 other income mainly shows the gain in the
amount of EUR 14.5 m from the disposal of aircraft assets and EUR
10.6 m income from the sale of emission certificates (ETS).
In the previous year, this item had primarily included the gain
on disposal of Nordhotel S.A. in October 2022 and the subsequent
income of EUR 13.4 m relating to the disposal of Riu Hotels S.A. in
financial year 2021.
In financial year 2023, other expenses result in particular from
portion of the goodwill allocated to the segment Northern Region
was disposed with the transfer of the operational business of
Sunwing (EUR 19.5 m). This portion was determined as the relative
value of the operations of Sunwing disposed of in relation to the
retained segment Northern Region. In this context, please refer to
the section "Investments in joint ventures and associates -
Significant associates". Furthermore, the losses from the disposal
of aircraft assets in the amount of EUR 6.3 m are recognised in
other expenses.
In the previous year, other expenses included in particular the
losses from the disposal of aircraft assets.
(4) Financial income
Financial income
EUR million 2023 2022
Bank interest income 39.1 4.7
Other interest and similar income 37.3 20.2
Income from the measurement of hedges 0.5 1.4
Interest income 76.9 26.3
Income from investments 0.1 0.3
Income from the measurement of other financial instruments 0.7 -
Foreign exchange gains 9.9 9.3
Total 87.6 35.9
The increase in financial income by EUR 51.7 m in the financial
year 2023 is primarily due to a EUR 50.6 m increase in interest
income.
(5) Financial expenses
Financial expenses
EUR million 2023 2022
Bank interest payable on loans and overdrafts 29.7 15.2
Interest expenses on lease liabilities 175.6 159.3
Net interest expenses from defined benefit pension plans 10.5 6.6
Unwinding of discount on provisions 25.4 10.1
Other interest and similar expenses 267.8 293.1
Expenses relating to the measurement of hedges 16.1 7.8
Interest expenses 525.1 492.1
Expenses relating to the measurement of other financial instruments 0.8 0.1
Foreign exchange losses 7.7 17.3
Total 533.6 509.5
In the period under review, financial expenses increased by EUR
24.1 m. This increase mainly results from higher interest expenses,
driven in particular by liabilities to banks and lease liabilities,
higher expenses from compounding on provisions and increased
expenses from the measurement of hedges. On the other hand, lower
expenses were incurred for other interest and similar expenses,
largely due to lower interest expenses in connection with the early
redemption of the warrant bond and Silent Participation II of the
ESF and lower expenses for exchange rate changes in lease
liabilities in accordance with IFRS 16.
(6) Share of result of joint ventures and associates
The share of result of joint ventures and associates of EUR
407.2 m (previous year EUR 100.7 m) comprises the net result for
the year attributable to the associated companies and joint
ventures.
Joint ventures and associates were tested for impairment as at
30 September 2023. This resulted in no impairments (previous year
EUR 4.8 m) and reversals of EUR 7.6 m (previous year EUR 3.4 m) in
the Hotels & Resorts segment and EUR 2.5 m impairments
(previous year EUR 0.4 m) and EUR 0.3 m reversals (previous year
EUR 0.2 m) in the Central Region segment.
For the breakdown of the results of the material joint ventures
and associates, please refer to Note 16 'Investments in joint
ventures and associates'.
(7) Income taxes
As in the previous year, TUI Group's German companies have to
pay trade tax of 15.7 % and corporation tax of 15.0 % plus a 5.5 %
solidarity surcharge on corporation tax.
Foreign income taxes are calculated on the basis of the laws and
provisions applicable in the individual countries. The income tax
rates applied to foreign companies vary from 0 % to 35.0 %.
Breakdown of income taxes
EUR million 2023 2022
Current tax (expense [+] / income [-])
in Germany 3.0 - 15.7
abroad 118.8 127.5
Deferred tax (expense [+] / income [-]) - 26.3 - 45.1
Total 95.5 66.7
In financial year 2023, the actual tax income in Germany
included income attributable to prior periods. Due to the required
reassessment of tax risks, income tax liabilities of EUR 3.5 m
(previous year EUR 4.8 m) were reversed. In financial year 2023,
the tax income from actual taxes attributable to prior periods
totalled EUR 4.9 m (previous year tax expense of EUR 42.4 m).
In the financial year deferred tax expenses include deferred tax
income from the reassessment of tax loss carryforwards in Germany
of EUR 46.8 m (previous year tax income EUR 61.4 m).
In financial year 2023, tax expense totalled EUR 95.5 m
(previous year EUR 66.7 m) and are derived as follows from an
'expected' income tax expense that would have arisen if the
statutory income tax rate of parent company TUI AG (aggregate
income tax rate) had been applied to earnings before taxes.
Reconciliation of expected to actual income taxes
EUR million 2023 2022
Earnings before income taxes 551.2 - 145.9
Expected income tax (current year 31.5 %, previous year 31.5 %) 173.6 - 46.0
Effect from the difference of the actual tax rates to the expected tax rates - 14.9 35.4
Changes in tax rates and tax law 27.3 23.0
Income not taxable - 236.4 - 61.8
Expenses not deductible 92.4 30.5
Effects from loss carryforwards 59.3 89.5
Temporary differences for which no deferred taxes were recognised 1.2 - 15.0
Deferred and current income tax relating to other periods (net) - 18.8 31.8
Other differences (expense [+] / income [-]) 11.8 - 20.7
Income taxes 95.5 66.7
(8) Group result attributable to shareholders of TUI AG
In financial year 2023, the share in the Group result
attributable to TUI AG shareholders increased from EUR - 277.3 m in
the prior year (share in group loss) to EUR 305.8 m (share in group
profit).
(9) Group profit attributable to non-controlling interest
In the Hotels & Resorts segment, the Group profit
attributable to non-controlling interest primarily relates to the
RIUSA II Group with EUR 147.1 m (previous year Group profit EUR
64.2 m).
(10) Earnings per share
In accordance with IAS 33, basic earnings per share were
calculated by dividing the Group result for the year attributable
to TUI AG shareholders by the weighted average number of registered
shares outstanding during the financial year. The average number of
shares was calculated on the basis of the shares outstanding at the
beginning of the financial year, taking account of the capital
reduction and the pro rata temporis consideration of the issue of
subscription rights in the financial year under review and the
capital increase in April of this year.
Earnings per share
2023 2022
Group profit / loss for the year attributable to shareholders of TUI AGEUR million 305.8 - 277.3
Weighted average number of shares 384,257,173 273,082,806*
Basic earnings per shareEUR 0.80 - 1.02
* Previous year adjusted
Diluted Earnings per share
2023 2022
Group profit / loss for the year attributable to shareholders of TUI AGEUR million 305.8 - 277.3
Weighted average number of shares 384,257,173 273,082,806*
Weighted average number of shares (diluted) 406,363,829 273,082,806*
Diluted earnings per shareEUR 0.75 - 1.02
* Previous year adjusted
Earnings per share for all periods presented were adjusted
retrospectively for the effect of the capital reduction carried out
in February 2023 at a ratio of 10:1 from 1,785,205,850 shares to
178,520,585 shares. In addition, TUI completed a capital increase
on April 24, 2023 in which subscription rights were issued to the
existing shareholders. As the subscription price of the new shares
was below the market price of the existing shares, the capital
increase included a bonus component. To take into account that the
number of shares outstanding had increased without a corresponding
change in resources, the weighted average number of shares was
adjusted according to IAS 33 for all periods presented. The
weighted average number of shares was therefore increased
retrospectively for the time-weighted effect of the issue of
subscription rights by 61,556,666 shares (prior year: 109,600,893
shares).
Dilution of earnings per share generally occurs when the average
number of shares is increased by the addition of the issue of
potential shares. This is not the case in the event of a loss. The
situation described below therefore had no dilutive effect as at
the previous year's reporting date.
In April and July 2021, a convertible bond was issued for a
total of EUR 589.6 m. At a current conversion price of EUR 26.67
per share, the number of potential shares amounts to 22.1 m.
(11) Taxes attributable to other comprehensive income
Tax effects relating to other comprehensive income
2023 2022
EUR million Gross Tax Net Gross Tax Net
effect effect
Foreign exchange differences - 65.6 - - 65.6 206.1 - 206.1
Cash flow hedges 169.3 - 37.1 132.2 110.7 - 28.5 82.2
Remeasurements of benefit
obligations and related fund - 241.3 47.6 - 193.7 245.5 - 71.8 173.7
assets
Changes in the measurement
of companies measured at 2.7 - 2.7 17.0 - 17.0
equity outside profit or loss
Fair value gain / loss on investments in equity instruments 23.7 - 23.7 - 1.2 - - 1.2
designated as at FVTOCI
Other comprehensive income - 111.2 10.5 - 100.7 578.1 - 100.3 477.8
In the period under review corporate income taxes in the amount
of EUR 0.0 m were recognised directly in equity (previous year EUR
- 1.0 m). Deferred income taxes recognised directly in equity were
not generated, as in the prior year.
Notes to the consolidated statement of financial position
(12) Goodwill
Goodwill
EUR million 2023 2022
Historical cost
Balance as at 1 Oct 3,444.9 3,469.5
Exchange differences 2.2 - 24.6
Disposals - 19.5 -
Reclassification as assets held for sale - 2.3 -
Balance as at 30 Sep 3,425.3 3,444.9
Impairment
Balance as at 1 Oct - 474.3 - 476.4
Exchange differences - 1.8 2.1
Balance as at 30 Sep - 476.1 - 474.3
Carrying amounts as at 30 Sep 2,949.2 2,970.6
The goodwill disposals relate to the sale of the operating
business in Canada by the company Sunwing Travel Group Inc.,
Ontario, which is accounted for using the equity-method. The
disposal is attributable to the Northern Region. In this context,
we refer to section 'Significant associates'. The reclassification
of assets held for sale led to a reduction of goodwill of EUR 2.3 m
and relate to the planned disposal of the Robinson Club Cabo Verde.
Detailed information on acquisitions and divestments are presented
under Acquisitions - Divestments.
In accordance with the provisions of IAS 21, goodwill allocated
to the individual segments and sectors was recognised in the
functional currency of the subsidiaries and subsequently translated
when preparing the consolidated financial statements. Similar to
the treatment of other differences from the translation of annual
financial statements of foreign subsidiaries, differences due to
exchange rate fluctuations between the exchange rate at the date of
acquisition of the subsidiary and the exchange rate at the balance
sheet date are taken directly to equity outside profit and loss and
disclosed as a separate item. In financial year 2023, an increase
in the carrying amount of goodwill of EUR 0.4 m (previous year
reduction of EUR 22.5 m) resulted from foreign exchange
differences.
The following table presents a breakdown of goodwill by
cash-generating unit (CGU) at carrying amounts. 'Other' consists of
the two independent cash-generating units, Robinson, and Midnight
International (formerly Blue Diamond), which belong to the Hotels
& Resorts segment.
Goodwill per cash-generating unit
EUR million 30 Sep 2023 30 Sep 2022
Northern Region 1,185.1 1,204.7
Central Region 502.4 502.5
Western Region 412.3 412.3
Riu 343.1 343.1
Marella Cruises 294.3 288.8
TUI Musement 167.3 171.4
Other 44.7 47.8
Total 2,949.2 2,970.6
As at 30 September 2023, an impairment test of capitalised
goodwill was performed at the level of cash-generating units. No
impairments of capitalised goodwill were identified.
For all CGUs, the recoverable amount was determined on the basis
of fair value less costs of disposal, being the higher value
compared to the value in use. The fair value was calculated by
discounting the expected cashflows. This was based on the
medium-term plan for the respective entity as at 30 September 2023.
Budgeted revenues and EBIT margins are based on expectations with
regard to the future business performance. We refer to the section
'Key judgements, assumptions and estimates'.
The discount rates are calculated as the weighted average cost
of capital, taking account of country-specific risks of the CGU and
based on external capital market information. The unchanged high
weighted average cost of capital reflects the current market
situation.
The table below provides an overview of the parameters versus
the previous financial year, underlying the determination of the
fair values per CGU. As in the previous year, the EBIT margin has
been adjusted for deductions of centrally incurred costs. The table
lists the CGUs to which goodwill has been allocated:
Parameters for calculation of the recoverable amount as at 30 Sep 2023
Planning Growth rate EBIT margin3 Sustainable WACC Level Carrying Recoverable
period in revenues2 in in % p. a. growth rate4 in % amount in EUR amount in EUR
years % p. a. in % million million
Northern 3.00 13.2 1.9 0.5 11.60 3 641.7 2,221.4
Region
Central 3.00 8.6 1.9 0.5 11.60 3 212.0 1,327.5
Region
Western 3.00 6.2 2.3 0.5 11.60 3 180.5 673.6
Region
Riu1 3.00 4.8 29.5 1.0 9.05 3 2,391.3 3,238.3
Marella 3.00 4.6 12.1 1.0 10.70 3 828.0 956.1
Cruises1
TUI Musement 3.00 12.3 4.6 1.0 9.52 3 477.3 722.9
Other 3.00 1.4 to 15.3 to 20.0 1.0 9.05 to 10.33 3 563.9 to 746.0 618.0 to 810.2
3.0
1 Those are groups of CGUs
2 Planned growth rate in revenues in % in relation financial
year 2025 to financial year 2026
3 EBIT-Margin for financial year 2026
4 Growth rate of expected net cash inflows
Parameters for calculation of the recoverable amount as at 30 Sep 2022
Planning Growth rate EBIT margin3 Sustainable WACC Level Carrying Recoverable
period in revenues2 in in % p. a. growth rate4 in in % amount in EUR amount in EUR
years % p. a. % million million
Northern 3.00 8.7 2.8 0.5 11.75 3 1,099.5 2,787.8
Region
Central 3.00 4.1 2.5 0.5 11.75 3 - 134.2 1,133.5
Region
Western 3.00 4.1 2.1 0.5 11.75 3 471.1 786.2
Region
Riu1 3.00 8.8 30.5 1.0 8.55 3 2,279.8 3,107.2
Marella 3.00 0.7 11.0 1.0 10.57 3 722.6 1,081.5
Cruises1
TUI Musement 5.00 25.0 2.9 1.0 9.84 3 453.0 805.3
Other 3.00 2.3 to 4.3 15.5 to 21.3 1.0 8.55 to 9.21 3 669.4 to 812.3 711.8 to 956.0
1 Those are groups of CGUs
2 Planned growth rate in revenues in % in relation financial
year 2024 to financial year 2025
3 EBIT margin for financial year 2025
4 Growth rate of expected net cash inflows
In view of the existing uncertainties regarding future business
development, an analysis of sensitivities for the main planning
parameters was carried out. In the sector Markets & Airlines a
risk premium of 2.1 % (previous year 1.9 %) was added to the cost
of capital. For further information we refer to 'Key judgements,
assumptions and estimates'. The following table shows the effects
of potential deviations in fair value in financial year 2023:
Sensitivities presenting potential changes of the recoverable amount
WACC WACC Sustainable Sustainable Cash inflow Cash inflow
Sensitivity analysis Markets & + 150 BPS - 150 BPS growth rate2 growth rate2 + 15 % - 15 %
Airlines EUR million EUR million + 50 BPS - 50 BPS EUR million EUR million
EUR million EUR million
Northern Region - 142.7 178.9 35.9 - 32.8 333.2 - 333.2
Central Region - 119.9 154.1 34.7 - 31.7 203.1 - 203.1
Western Region - 50.1 63.3 13.2 - 11.9 101.0 - 101.0
WACC WACC Sustainable Sustainable Cash inflow Cash inflow
Sensitivity analysis Cruises + 100 BPS - 100 BPS growth rate2 growth rate2 + 10 % - 10 %
EUR million EUR million + 50 BPS - 50 BPS EUR million EUR million
EUR million EUR million
Marella Cruises 1 - 86.6 106.3 41.5 - 37.5 95.6 - 95.6
WACC WACC Sustainable Sustainable Cash inflow Cash inflow
Sensitivity analysis Hotels & + 100 BPS - 100 BPS growth rate2 growth rate2 + 10 % - 10 %
Resorts and TUI Musement EUR million EUR million + 50 BPS - 50 BPS EUR million EUR million
EUR million EUR million
Riu 1 - 388.8 500.6 202.9 - 179.1 323.8 - 323.8
TUI Musement - 79.2 100.3 40.1 - 35.6 79.5 - 79.5
Other - 67.2 to - 86.2 to 93.8 34.4 to 36.8 - 30.3 to - 33.0 61.8 to 81.0 - 61.8 to -
75.7 81.0
1 Those are groups of CGUs
2 Sustainable growth rate of expected net cash inflows
The fair values determined in the sensitivity analysis would
have led to an impairment requirement of EUR 13.0 m in the CGU
Robinson and of EUR 11.6 m in the CGU Midnight International in the
Hotels & Resorts segment if the WACC had increased by 100 basis
points. A reduction in the Cash inflow by 10 % would result in an
impairment requirement of EUR 16.9 m in the CGU Midnight
International and of EUR 7.7 m in the CGU Robinson. With the
exception of the impairments presented in the Hotels & Resorts
segment, the sensitivity analysis did not reveal any further
indications of an additional need for impairment losses.
In the financial year 2023 a study was carried out on the
financial impact of climate related risks on the business model of
TUI. The use of low-emission fuels and rising prices for emission
certificates will lead to significant financial charges,
particularly for energy-intensive aviation operations in the
Northern Region, Western Region, and Central Region segments. The
Cruises segment will also be impacted. In Hotels & Resorts, the
burden will be relatively low; in fact, the autonomous generation
of energy, such as by means of solar power, may even generate cost
savings. In addition, physical risks from climate-related one-off
events such as storms or floods or long-term developments such as
rising temperatures, mainly affecting Hotels & Resorts, were
taken into account. It is expected that the financial impact of
these climate-related risks are relatively low. The financial
impact overall is especially dependent in as far these costs can be
passed on to customers. For further information on the impact of
climate related risks on impairment test refer to the section 'Key
judgements, assumptions and estimates'. The estimation of the
financial impact are particular uncertain with regard to the
development of climate related risks, the price development for
alternative fuel and emission certificates and the willingness of
customers, to bear these costs, amongst others. Therefore,
sensitivities of climate related risks and chances were calculated
for especially impacted energy intensive Markets & Airlines and
Cruises segments. The sensitivity for climate related risks refers
to an increase of climate related costs by 50 %. The climate
related chances relate to a decrease by 50 %.
The sensitivity on climate related risk would not have led to an
impairment. The following table provides the effects of the
sensitivities on the fair value as of 30 September 2023.
Sensitivities presenting potential changes of the recoverable amount
Sensitivity analysis Markets & Airlines Climate-related Climate-related
risks chances
Northern Region - 160.0 160.0
Central Region - 59.0 59.0
Western Region - 90.0 90.0
Sensitivitätsanalyse Kreuzfahrten Climate-related Climate-related
risks chances
Marella Cruises* - 11.5 11.5
* Those are groups of CGUs
(13) Other intangible assets
The development of the line items of Other intangible assets in
financial year 2023 is shown in the following table.
Other intangible assets
Brands, Computer software Intangible assets in
licenses the
and Transport Customer course of Total
other Internally contracts base construction and
EUR million rights generated Acquired Payments on account
Historical cost
Balance as at 1 Oct 2021 329.7 508.8 249.3 62.4 79.6 118.5 1,348.3
Exchange differences 4.7 - 11.1 2.6 - 1.4 0.7 - 3.6 - 8.1
Additions 0.1 10.0 12.5 - - 112.6 135.2
Disposals - 0.2 - 74.2 - 17.5 - - 0.3 - 0.7 - 92.9
Transfer - 0.3 26.6 12.7 - - - 40.4 - 1.4
Balance as at 30 Sep 2022 334.0 460.1 259.6 61.0 80.0 186.4 1,381.1
Exchange differences - 4.9 5.0 0.7 1.2 - 0.2 2.6 4.4
Additions 16.9 15.7 11.1 - - 137.2 180.9
Disposals - 2.0 - 37.8 - 34.5 - - - 7.4 - 81.7
Transfer - 106.5 13.7 - - - 121.8 - 1.6
Balance as at 30 Sep 2023
343.0 549.5 250.5 62.2 79.8 197.0 1,482.0
Table continues on next
page
Amortisation and Continued from
impairment previous page
Balance as at 1 Oct 2021 - 203.0 - 342.7 - 182.7 - 49.7 - 54.3 - 17.3 - 849.7
Exchange differences 1.9 9.3 - 2.6 1.2 0.1 0.1 10.0
Amortisation for the - 15.9 - 64.5 - 30.3 - 2.5 - 5.4 - - 118.6
current year
Impairment for the current - - - 7.3 - - - 0.6 - 7.9
year
Reversal of impairments - - - - - 0.1 0.1
Disposals 0.2 74.1 17.4 - 0.3 0.6 92.6
Transfer 0.2 - 1.8 - 1.1 - - 2.7 -
Balance as at 30 Sep 2022 - 216.6 - 325.6 - 206.6 - 51.0 - 59.3 - 14.4 - 873.5
Exchange differences - 0.7 - 3.3 - 0.7 - 1.0 - 0.2 0.2 - 5.7
Amortisation for the - 14.4 - 58.6 - 29.0 - 2.4 - 3.5 - - 107.9
current year
Impairment for the current - - 37.1 - 1.6 - - - 1.0 - 39.7
year
Disposals 2.0 37.8 34.5 - - 7.4 81.7
Transfer - - 0.2 - - - 0.2 -
Balance as at 30 Sep 2023 - 228.7 - 386.8 - 203.1 - 54.4 - 63.0 - 8.0 - 944.0
Carrying amounts as at 30 117.4 134.5 53.0 10.0 20.7 172.0 507.6
Sep 2022
Carrying amounts as at 30 114.3 162.7 47.4 7.8 16.8 189.0 538.0
Sep 2023
Internally generated computer software consists of computer
programs for tourism applications exclusively used internally by
the Group.
Transport contracts relate to landing rights at airports in the
UK purchased and measured during the acquisition of First Choice
Holidays Plc in 2007.
The intangible assets in the course of construction amounted to
EUR 189.0 m as at 30 September 2023 (previous year EUR 172.0
m).
The impairments recognised for the financial year under review
totalled EUR 39.7 m (previous year EUR 7.9 m). Impairments of EUR
37.1 m are mainly attributable to an adjusted strategy in the
digital transformation in the Markets & Airline business, which
resulted in impairment charges on internally generated computer
software in 'All other segments'. In the previous year, Impairment
charges of EUR 6.7 m related primarily to purchased computer
software and were due to restructuring.
Due to changes in our strategy and delays in the digital
transformation, the useful lives of a number of software solutions
were reviewed, with the result to extend the useful lives of the
affected software systems, which reduced the amortization by EUR
3.8 m in the financial year under review. We expect a decrease of
amortization of EUR 2.6 m for the financial year 2024 and of EUR
0.6 m for the financial year 2025 compared with the amount that
would have been charged before the change in useful life. The
extension of the useful life beyond the previous end of useful life
will lead to an increase in amortisation of EUR 5.4 m for financial
year 2026 and of EUR 2.2 m for financial year 2027.
In the previous year, due to a change in strategy with a focus
on key strategic elements and delays in the digital transformation,
the useful lives of various software solutions in the Markets &
Airline segment had been revised. Due to the revision the useful
life of the affected software systems were extended which reduced
the amortisation by EUR 8.6 m in the previous year.
(14) Property, plant and equipment
The table below presents the development of the individual items
of property, plant and equipment in financial year 2023.
Property, plant and equipment
Hotels Other Cruise Other plant, operating Assets under Payments
EUR million incl. buildings Aircraft ships and office equipment construction on Total
land and land account
Balance as at 1 2,350.4 183.5 285.3 692.1 1,172.5 134.6 259.2 5,077.6
Oct 2021
Exchange 118.5 26.2 39.3 - 15.9 37.9 25.2 20.8 252.0
differences
Additions 34.7 0.2 150.7 - 32.9 184.2 57.1 459.8
Disposals - 8.0 - 4.5 - 51.9 - 16.5 - 23.4 - 0.3 - 157.9 - 262.5
Transfer to assets - - 4.9 - - - 0.6 - - - 5.5
held for sale
Transfer 98.9 - 98.7 35.2 46.6 - 173.0 - 66.5 39.9
Balance as at 30 2,594.5 200.5 522.1 694.9 1,265.9 170.7 112.7 5,561.3
Sep 2022
Exchange - 9.1 1.8 - 22.2 12.8 - 8.3 - 4.7 - 7.6 - 37.3
differences
Acquisitions - - - - 0.2 - - 0.2
Additions 68.3 0.2 52.9 - 66.1 189.6 106.2 483.3
Disposals - 57.8 - 0.1 - 68.3 - 1.0 - 101.8 - 0.3 - 36.6 - 265.9
Transfer to assets - 76.0 0.3 - 31.8 - 0.2 - 12.8 - 10.6 - - 131.1
held for sale
Transfer 206.8 - 151.9 162.2 86.2 63.3 - 192.8 - 14.8 159.0
Balance as at 30
Sep 2023
2,726.7 50.8 614.9 792.7 1,272.6 151.9 159.9 5,769.5
Table continues on
next page
Depreciation and Continued from
impairment previous page
Balance as at 1 - 674.6 - 18.0 - 158.2 - 245.8 - 820.8 - - 0.9 - 1,918.3
Oct 2021
Exchange - 34.1 0.9 - 8.9 7.3 - 22.2 - - 0.1 - 57.1
differences
Depreciation for - 59.1 - 1.4 - 27.9 - 59.7 - 82.5 - - - 230.6
the current year
Impairment for the - 53.0 - - - - 4.2 - - - 57.2
current year
Reversal of 19.4 - - 15.2 - - - 34.6
impairment losses
Disposals 7.7 1.9 38.0 16.5 23.1 - - 87.2
Transfer to assets - 2.2 - - 0.5 - - 2.7
held for sale
Transfer 0.1 - - 22.8 - 1.0 - - - 21.7
Balance as at 30 - 793.6 - 14.4 - 179.8 - 266.5 - 905.1 - - 1.0 - 2,160.4
Sep 2022
Exchange 6.0 - 4.4 - 5.2 4.5 - - 9.7
differences
Depreciation for - 67.7 - 1.2 - 40.8 - 63.5 - 86.9 - - - 260.1
the current year
Impairment for the - 13.3 - - 0.6 - - 0.1 - - - 14.0
current year
Reversals of 16.4 - - 11.6 - - - 28.0
impairment losses
Disposals 57.6 - 34.7 0.4 101.1 - - 193.8
Transfer to assets 4.0 - 0.8 - 5.6 - - 10.4
held for sale
Transfer 0.2 2.1 - 92.1 0.1 - 6.9 - - - 96.6
Balance as at 30 - 790.4 - 13.5 - 273.4 - 323.1 - 887.8 - - 1.0 - 2,289.2
Sep 2023
Carrying amounts 1,800.9 186.1 342.3 428.4 360.8 170.7 111.7 3,400.9
as at 30 Sep 2022
Carrying amounts 1,936.3 37.3 341.5 469.6 384.8 151.9 158.9 3,480.3
as at 30 Sep 2023
In the financial year under review, the construction of a new
hotel in Mauritius, the acquisition of land in Jamaica and the
renovation of hotels in Mexico, Spain and Cape Verde led to
additions to the Riu Group totalling EUR 164.0 m. These investments
include an amount of EUR 70.1 m for assets under construction, EUR
54.9 m for hotels including land and EUR 17.8 m for payments in
advance.
Additions to assets under construction include EUR 81.3 m in
reconstruction measures for a cruise ship, that was commissioned in
April 2023 and the carrying out of maintenance work on cruise
ships. Further additions to assets under construction relate with
EUR 17.5 m to investments in aircraft.
In the financial year under review, advance payments of EUR 88.4
m (previous year EUR 29.7 m) were made for the future delivery of
aircraft. In the previous year, further payments in advance of EUR
10.1 m related to cruise ships.
Further additions to aircraft assets include EUR 32.3 m for
spare parts and EUR 17.0 m for engines.
The renovation of an administrative building in Hanover led to
further investments of EUR 18.0 m in the financial year under
review.
The main disposals in the financial year under review include
EUR 36.6 m (previous year EUR 157.9 m) for the disposal of advance
payments for the delivery of aircraft. Due to sale and leaseback
transactions, the disposal of these pre-delivery payments led to
additions of right-of-use assets. In this context, please refer to
the section 'Right-of-use assets and leases'. Further disposals
relate with EUR 17.7 m to the sale of spare parts and with EUR 15.9
m to the sale of aircraft.
The review of the carrying amounts of property, plant and
equipment resulted in impairment losses of EUR 14.0 m in the
financial year under review (previous year EUR 57.2 m). The
impairments mainly comprised EUR 13.3 m (previous year EUR 53.0 m)
to hotels including land and were attributable to hotels of Magic
Life, TUI Blue and Robinson in the Hotels & Resorts segment.
The impairment loss of the previous year, notably included EUR 36.2
m relating to the demolition of a hotel in Mauritius.
The review of the carrying amounts also led to the reversal of
impairment losses of EUR 28.0 m (previous year EUR 34.6 m).
Reversal of impairments of EUR 16.4 m were attributable to hotels
of Robinson and TUI Blue in the Hotels & Resorts segment. In
addition, reversal of impairments of EUR 11.6 m were made for one
Marella cruise ship in the Cruises segment.
The reclassification of property, plant and equipment to the
balance sheet item 'Assets held for sale' relates to EUR 41.0 m for
the planned disposal of the Robinson Club Cabo Verde and to planned
sales of land in Mexico (EUR 39.9 m) and Jamaica (EUR 8.6 m) and
are attributable to the Riu group in the Hotels & Resorts
segment. In this context, we refer to the section 'Assets held for
sale'. Further reclassifications of EUR 31.0 m related to the
disposal of aircraft engines in the Markets & Airline
segment.
The transfer to property, plant and equipment among others
relate to the carrying amounts of previously leased assets carried
as right-of-use assets for which purchase options were
exercised.
As in the previous year, no borrowing cost were capitalised as
part of the acquisition cost.
The carrying amount of property, plant and equipment subject to
ownership restrictions or pledged as security totals EUR 616.7 m as
at the balance sheet date (previous year EUR 611.3 m).
(15) Right-of-use assets and leases
As a lessee, TUI recognises right-of-use assets and lease
liabilities according to IFRS 16. For more detailed information on
the use of practical expedients, please refer to the accounting and
measurement methods in the section 'Leases'.
TUI as a lessee
As a lessee, TUI leases moveable assets such as aircraft,
vehicles and cruise ships, as well as property such as hotel
buildings, land, office buildings and travel agencies. The terms
and conditions of the lease agreements are individually negotiated.
Some of TUI's aircraft leases comprise purchase or extension
options. Many of TUI's property leases, in particular for travel
agencies and office buildings, contain extension options and price
adjustment clauses. No residual value guarantees were provided for
the leased items.
The development of the right-of-use assets in financial year
2023 is presented in the table below:
Right-of-use assets
EUR million Aircraft and Hotels Travel agencies Buildings Cruise ships Other Total
engines
Historical cost
Balance as at 1 Oct 2021 3,323.4 497.5 233.1 184.3 232.9 84.6 4,555.8
Exchanges differences 454.2 - 2.4 - 0.3 3.0 - 5.0 - 0.1 449.4
Additions 142.0 - 6.3 4.8 0.5 2.6 156.2
Revaluations and modifications 57.1 - 12.9 15.2 - 5.7 - 1.5 - 0.8 51.4
Disposals - 63.2 - 15.0 - 10.5 - 4.2 - 0.5 - 4.0 - 97.4
Transfer - 33.4 - 0.3 0.9 - 0.3 - 0.1 - 32.6
Balance as at 30 Sep 2022 3,880.1 467.2 244.1 183.1 226.1 82.2 5,082.8
Exchanges differences - 214.5 - 10.1 2.0 - 2.4 6.6 - 0.2 - 218.6
Additions 112.1 10.5 14.8 6.0 144.1 23.1 310.6
Revaluations and modifications 84.8 13.5 20.8 7.2 - 1.0 0.6 125.9
Disposals - 115.1 - 45.4 - 18.0 - 2.7 - - 5.0 - 186.2
Transfer - 143.4 - - 0.2 - 0.2 - - 7.5 - 151.3
Balance as at 30 Sep 2023 3,604.0 435.7 263.5 191.0 375.8 93.2 4,963.2
Depreciation and impairment
Balance as at 1 Oct 2021 - 1,055.5 - 181.2 - 116.3 - 70.5 - 87.4 - 35.7 - 1,546.6
Exchange differences - 184.2 1.6 0.9 - 0.1 2.6 - - 179.2
Depreciation for the current year - 365.0 - 59.8 - 37.7 - 21.4 - 16.0 - 10.7 - 510.6
Impairment for the current year - - 4.4 - 3.4 - - 1.0 - - 8.8
Reversals of impairments loses 0.6 13.2 2.0 - - - 15.8
Disposals 63.2 15.1 10.5 3.5 0.5 4.0 96.8
Transfer 22.4 - - 0.1 - - 1.2 21.3
Balance as at 30 Sep 2022 - 1,518.5 - 215.5 - 144.0 - 88.4 - 101.3 - 43.6 - 2,111.3
Exchange differences 94.5 5.7 - 1.3 1.0 - 1.9 0.2 98.2
Depreciation for the current year - 325.7 - 45.2 - 37.2 - 21.5 - 18.8 - 9.6 - 458.0
Impairment for the current year - - 11.8 - 2.2 - - - - 14.0
Reversals of impairments losses - 5.3 1.3 - - - 6.6
Disposals 115.1 38.8 18.2 2.6 - 5.1 179.8
Transfer 93.6 - 0.3 0.4 - 4.6 98.9
Balance as at 30 Sep 2023 - 1,541.0 - 222.7 - 164.9 - 105.9 - 122.0 - 43.3 - 2,199.8
Carrying amounts as at 30 Sep 2022 2,361.6 251.7 100.1 94.7 124.8 38.6 2,971.5
Carrying amounts as at 30 Sep 2023 2,063.0 213.0 98.6 85.1 253.8 49.9 2,763.4
Additions of EUR 144.1 m were attributable in particular to the
rental of a cruise ship, that was put into service in April 2023.
Furthermore, additions of EUR 112.1 m were due to the delivery of
eight aircraft and four aircraft engines (previous year EUR 142.0 m
for the delivery of six aircraft), some of which were acquired
through sale and leaseback transactions.
Changes and remeasurements of existing leases increased the
right-of-use assets by EUR 125.9 m. The increase is primarily
driven by a large number of lease extensions for leased aircraft
(EUR 84.8 m), leased travel agencies (EUR 20.8 m) and hotel
contracts (EUR 13.5 m).
The transfer to property, plant and equipment led to a reduction
in right-of-use assets of EUR 52.4 m and mainly result from
reclassifications of aircraft and aircraft engines into property,
plant and equipment. In this context, we refer to the section
'Property, plant and equipment'.
Information on the associated lease liabilities is provided in
Note 32 'Financial liabilities and lease liabilities'. Details
regarding the maturities of the lease payments not yet made at the
balance sheet date are shown in the section 'Liquidity risk' in
Note 41 'Financial instruments'.
The table below presents the expenses and income carried in the
consolidated income statement in financial year 2023 in connection
with leases in which TUI is the lessee:
Expenses and income from leases with TUI as the lessee
EUR million 2023 2022
Expenses from short-term leases - 124.0 - 131.1
Expenses from low-value leases - 8.2 - 3.0
Variable lease income and expenses - 8.0 0.5
Depreciation of right-of-use assets - 458.0 - 510.6
Impairment of right-of-use assets - 14.0 - 8.8
Reversal of impairments 6.6 15.8
Interest expenses from lease liabilities - 175.6 - 159.3
Gains or losses arising from sale and leaseback transactions 8.9 2.4
As in the previous year, the expenses from short-term leases
relate mainly to the temporary rental of aircraft. Impairment
losses of EUR 11.8 m were attributable to leased hotels.
Gains from sale and leaseback transactions of EUR 8.9 m are
attributable to aircraft financing. In the financial year under
review, two newly delivered Boeing B737 Max aircraft, one
previously owned Boeing B737-800 aircraft and four acquired engines
were refinanced by means of sale and leaseback contracts. As at 30
September 2023, lease liabilities resulting from these transactions
totalled EUR 75.7 m. Gains obtained in the previous year of EUR 2.4
m related to sale and leaseback transactions for six newly
delivered Boeing B737 Max aircraft. As at 30 September 2022, lease
liabilities resulting from that transaction totalled EUR 165.6
m.
The cash outflows for leases totalled EUR 901.2 m (previous year
EUR 867.4 m) in financial year 2023.
At the balance sheet date, unrecognised financial commitments
for short-term leases amounted to EUR 3.3 m (previous year EUR 4.3
m). In addition, potential future lease payments from extension and
termination options of EUR 220.3 m (previous year EUR 270.3 m) were
not included in the measurement of the right-of-use assets and
lease liabilities as it was not reasonably certain that the lease
contracts were going to be extended or to be terminated.
TUI as lessor
As a lessor, TUI leases or subleases aircraft and, less
significantly, space in office buildings and travel agencies and a
hotel. In financial year 2023, proceeds from operating leases worth
EUR 12.0 m (previous year EUR 7.8 m) were carried in revenue. In
addition, income from finance leases of EUR 0.5 m (previous year
EUR 0.7 m) was carried in the interest result.
The following table shows the reconciliation from the
undiscounted lease payments to the net investment for the two
subleases classified as finance leases:
Net investments - finance leases
EUR million 30 Sep 2023 30 Sep 2022
Undiscounted lease payments (lease components) 4.3 10.5
Unguaranteed residual values - -
Gross investment 4.3 10.5
Unearned finance income 0.2 0.7
Impairment - 0.2
Net investment 4.1 9.6
The table below comprises a maturity analysis of the
undiscounted annual payments from leases in which TUI is the
lessor:
Expected minimum lease payments
30 Sep 2023
Remaining term
EUR million up to 1 year 1- 2 years 2- 3 years 3- 4 years 4- 5 years more than 5 years Total
Operating lease contracts 6.1 0.1 - - - - 6.2
Finance lease contracts 3.4 0.9 - - - - 4.3
30 Sep 2022
Remaining term
EUR million up to 1 year 1- 2 years 2- 3 years 3- 4 years 4- 5 years more than 5 years Total
Operating lease contracts 15.6 0.6 - - - - 16.2
Finance lease contracts 4.6 3.9 2.0 - - - 10.5
(16) Investments in joint ventures and associates
The table below presents all joint arrangements and associates
of relevance to TUI Group. All joint arrangements and associates
are listed as TUI Group shareholdings in Note 53. All joint
arrangements are joint ventures. There are no joint operations
within the meaning of IFRS 11.
Significant associate and joint ventures
Capital share in % Voting rights share in
%
Name and headquarter of company Nature of business 30 Sep 2023 30 Sep 2022 30 Sep 2023 30 Sep 2022
Associate
Midnight Canada Inc., Tour operator & 49.0 49.0 49.0 25.0
Toronto, Canada Hotel operator
Midnight International Holdings Limited, Toronto, Hotel operator 49.0 - 49.0 -
Canada
Pep Toni Hotels S. A., Palma, Spain Hotel operator 49.0 - 49.0 -
Joint venture
Grupotel dos S. A., Hotel operator 50.0 50.0 50.0 50.0
Can Picafort, Spain
TUI Cruises GmbH, Cruise ship 50.0 50.0 50.0 50.0
Hamburg, Germany operator
All companies presented above are measured at equity.
The financial year of the Canadian associated companies
corresponds to TUI Group's financial year. The financial years of
Pep Toni Hotels S. A. and of the joint ventures deviate from TUI
Group's financial year, ending on 31 December. In order to update
the at equity measurement as at TUI Group's balance sheet date,
interim financial statements for the period ending 30 September are
prepared for these companies.
Significant associates
In 2009, TUI Group entered into a partnership with Sunwing.
Sunwing was a vertically integrated travel company comprising tour
operation, an airline and retail shops. After the transfer of the
hotel operation and development company Blue Diamond Hotels &
Resorts Inc., St Michael / Barbados, to Sunwing in September 2016,
Sunwing also included the hotel operation business with a chain of
luxury beach resorts and hotels in the Caribbean and Mexico.
Sunwing's hotel operation business is carried in the Hotels &
Resorts segment, while the tour operation business is carried in
the Northern Region segment.
Sunwing transferred its tour operation, airline and retail shops
to the Canadian airline WestJet Airlines Ltd. in the current
financial year. Sunwing received essentially shares of the
newformed business as consideration and in addition contingent
considerations. Within the framework of the transaction the hotel
operations business was transferred to the newly formed Midnight
International Holdings Limited, in which TUI Group directly holds
49 % of its shares. Sunwing itself has no longer any operative
business after the transaction and was renamed in Midnight Canada
Inc. TUI group continues to hold 49 % of the shares of Midnight
Canada Inc.
Sunwing realised a gain from the transfer of its activities in
return for the shares in the newformed business. Accordingly, this
gain increased pro rata the share of result of investments
accounted for using the equity method by EUR 110.3 m. A portion of
the goodwill allocated to the segment Northern Region was disposed
with the transfer of the operational business of Sunwing. This
portion was determined as the relative value of the operations of
Sunwing disposed of in relation to the retained segment Northern
Region. The expense of EUR 19.5 m from the disposal of the goodwill
is recognised in other expenses.
Pep Toni Hotels S. A. is a company founded at the end of the
reporting year, which will own and operate hotels.
Significant joint ventures
Grupotel dos S. A., founded in 1998, owns and operates hotels in
the Balearic and the Canary Islands.
TUI Cruises GmbH is a joint venture with the US shipping line
Royal Caribbean Cruises Ltd established in 2008. The Hamburg-based
company offers German-speaking cruises for the premium market. TUI
Cruises GmbH currently operates eleven cruise ships.
Financial information on associates and joint ventures
The tables below present summarised financial information for
the significant associates and joint ventures of TUI Group. The
amounts shown reflect the full amounts presented in the
consolidated financial statements of the relevant associates and
joint ventures (100 %); they do not represent TUI Group's share of
those amounts.
Summarised financial information of material associates
Midnight International Holdings Pep Toni Hotels S. A., Midnight Canada Inc.,
Limited, Palma, Spain Toronto, Canada
Toronto, Canada
EUR million 30 Sep 2023 / 30 Sep 2022 / 30 Sep 2023 / 30 Sep 2022 / 30 Sep 2023 / 30 Sep 2022 /
2023 2022 2023 2022 2023 2022
Non-current assets 1,606.6 1,697.0 - - 93.9 489.2
Current assets 316.2 324.6 150.8 - 6.3 538.2
Non-current provisions and 1,123.7 961.1 - - - 609.5
liabilities
Current provisions and 329.7 618.1 - - 4.2 660.3
liabilities
Revenue 820.5 643.6 - - 1,722.7 1,263.7
Profit / loss 62.9 101.3 0.8 - 345.0 - 94.2
Other comprehensive - 30.6 61.0 - - 21.9 - 16.0
income / loss
Total comprehensive income / 32.3 162.3 0.8 - 366.9 - 110.2
loss
Summarised financial information of material joint ventures
Grupotel dos S. A., TUI Cruises GmbH,
Can Picafort, Spain Hamburg, Germany
EUR million 30 Sep 2023 / 30 Sep 2022 / 30 Sep 2023 / 30 Sep 2022 /
2023 2022 2023 2022
Non-current assets 270.6 260.6 4,449.0 4,153.0
Current assets 25.4 37.8 432.3 591.4
thereof cash and cash equivalents 4.6 16.9 97.5 255.9
Non-current provisions and liabilities 132.8 146.3 2,655.8 3,195.7
thereof financial liabilities 120.7 134.1 2,628.1 3,165.3
Current provisions and liabilities 32.6 36.9 1,189.5 863.5
thereof financial liabilities 14.9 14.7 501.0 282.9
Revenue 159.9 131.0 1,823.7 1,238.2
Depreciation / amortisation of intangible assets and 13.1 12.0 131.4 129.9
property, plant and equipment
Interest income 0.2 0.2 13.7 17.2
Interest expenses 4.1 2.4 121.2 135.8
Income taxes 6.4 5.1 3.6 - 8.6
Profit / loss 27.4 18.8 348.4 82.8
Other comprehensive income / loss - 0.2 2.4 37.3
Total comprehensive income / loss 27.4 19.0 350.8 120.1
In financial year 2023, TUI Group received dividends of EUR 22.6
m (previous year EUR 0.9 m) from its joint ventures and dividends
of EUR 3.9 m (previous year EUR 0.2 m) from its associates.
In addition to TUI Group's significant associates and joint
ventures, TUI AG has interests in other associates and joint
ventures accounted for under the equity-method, which individually
are not considered to be of material significance. The tables below
provide information on TUI Group's share of the earnings figures
shown for the major associates and joint ventures as well as the
aggregated amount of the share of profit / loss, other
comprehensive income and total comprehensive income for the
immaterial associates and joint ventures.
Share of financial information of material and other associates
Pep Toni
Midnight International Holdings Hotels S. Midnight Canada Other immaterial Associates
Limited, Toronto, Canada A., Inc., associates total
Palma, Toronto, Canada
Spain
EUR million 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
TUI's share of
Profit / loss 30.8 49.6 0.4 - 112.8* - 46.2 2.2 4.2 146.2 7.6
Other comprehensive - 15.0 29.9 - - 7.4 - 3.2 - 1.1 - 2.2 - 8.7 24.5
income / loss
Total comprehensive
income / 15.8 79.5 0.4 - 120.2 - 49.4 1.1 2.0 137.5 32.1
loss
* The share of result includes TUI's share of the result of
Midnight Canada Inc. and the expenses for the realisation of
foreign exchange differences and for the derecognition of goodwill
due to the sale of Sunwing's operating business, included in the
result of investments in joint ventures and associates.
Share of financial information of material and other joint ventures
Grupotel dos S. A., TUI Cruises Other immaterial joint Joint ventures
Can Picafort, Spain GmbH, ventures total
Hamburg, Germany
EUR million 2023 2022 2023 2022 2023 2022 2023 2022
TUI's share of
Profit / loss 13.7 9.4 174.2 41.4 73.1 42.3 261.0 93.1
Other comprehensive income / - 0.1 1.2 18.6 - 27.5 - 2.0 - 26.3 16.7
loss
Total comprehensive income / 13.7 9.5 175.4 60.0 45.6 40.3 234.7 109.8
loss
Net assets of the material associates
EUR million Midnight International Holdings Limited, Midnight Canada Inc., Pep Toni Hotels S. A.,
Toronto, Canada Toronto, Canada Palma, Spain
Net assets as at 1 280.0 - 132.0 -
Oct 2021
Foreign exchange 61.0 - 16.0 -
effects
Profit / loss 101.3 - 94.2 -
Net assets as at 30 442.3 - 242.2 -
Sep 2022
Other comprehensive - 2.6 -
income
Foreign exchange - 30.6 19.3 -
effects
Capital increase / - 33.9 - 150.1
decrease
Profit / loss 62.9 345.0 0.8
Consolidation effects 28.7 - 28.7 -
Net assets as at 30 469.4 96.0 150.9
Sep 2023
Reconciliation to the carrying amount of the associates in the Group balance sheet
Pep Toni Hotels Other Associates
EUR million Midnight International Holdings Midnight Canada Inc., S. A., Palma, immaterial total
Limited, Toronto, Canada Toronto, Canada Spain associates
Share of TUI in % as 49.0 49.0 - n. a. n. a.
at 30 Sep 2022
TUI's share of the
net assets 216.8 - 118.5 - 28.2 126.5
as at 30 Sep 2022
Goodwill as at 30 7.6 49.3 - 5.0 61.9
Sep 2022
Unrecognised share - - - 1.1 1.1
of losses
Impairment of - - - - -
carrying amounts
Carrying amount as 224.4 - 69.2 - 34.3 189.5
at 30 Sep 2022
Share of TUI in % as 49.0 49.0 49.0 n. a. n. a.
at 30 Sep 2023
TUI's share of the
net assets 230.0 46.9 73.9 33.0 383.8
as at 30 Sep 2023
Goodwill as at 30 7.1 - - 1.4 8.5
Sep 2023
Unrecognised share - - - 2.7 2.7
of losses
Impairment of - - - - -
carrying amounts
Carrying amount as 237.1 46.9 73.9 37.1 395.0
at 30 Sep 2023
Net assets of the material joint ventures
EUR million Grupotel dos S. A., TUI Cruises GmbH, Hamburg, Germany
Can Picafort, Spain
Net assets as at 1 Oct 2021 96.2 565.1
Profit / loss 18.8 82.8
Other comprehensive income 0.2 37.3
Net assets as at 30 Sep 2022 115.2 685.2
Profit / loss 27.4 348.4
Other comprehensive income - 2.4
Dividends payable - 12.0 -
Net assets as at 30 Sep 2023 130.6 1,036.0
Reconciliation to the carrying amount of the joint ventures in the consolidated balance sheet
Grupotel Other
EUR million dos S. A., TUI Cruises GmbH, Hamburg, immaterial joint Joint ventures
Can Picafort, Germany ventures total
Spain
Share of TUI in % as at 30 Sep 2022 50.0 50.0 n. a. n. a.
TUI's share of the net assets as at 57.6 342.6 208.4 608.6
30 Sep 2022
Goodwill as at 30 Sep 2022 - - 15.5 15.5
Unrecognised share of losses - - 7.3 7.3
Impairment of carrying amounts - - - 35.5 - 35.5
Carrying amount as at 30 Sep 2022 57.6 342.6 195.7 595.9
Share of TUI in % as at 30 Sep 2023 50.0 50.0 n. a. n. a.
TUI's share of the net assets as at 65.3 518.0 224.2 807.5
30 Sep 2023
Goodwill as at 30 Sep 2023 - - 11.7 11.7
Unrecognised share of losses - - 12.3 12.3
Impairment of carrying amounts - - - 28.3 - 28.3
Carrying amount as at 30 Sep 2023 65.3 518.0 219.9 803.2
Impairment of the carrying amounts of associates and joint
ventures
Due to the increase in the interest rates, the effects of
Russia's war of aggression against Ukraine and general price
inflation a risk assessment was performed if indicators for
impairments exist. If this was the case the carrying amounts of the
respective associates and joint ventures concerned were
subsequently tested for impairment. In addition all carrying
amounts of associates and joint ventures which have been impaired
in before were tested for reversals of impairment. All impairment
tests used the business plan of the respective joint venture or
associate. Based on these business plans, the recoverable amount
was calculated by discounting future net cash flows. In all cases
the fair value less cost to sell was higher than the value in use.
Level 3 inputs of fair value hierarchy were used in the
calculations.
The shares in the joint venture WOT Hotels Adriatic Asset
Company d. o. o. are held for sale. An impairment loss of EUR 7.6 m
recognised in 2020 was reversed. A further reversal of an
impairment loss of EUR 0.3 m and the recognition of an impairment
loss of EUR 0.7 m related to joint ventures in Central Region. The
shares in the associated company Raiffeisen-Tours RT-Reisen GmbH
intended for sale were written down by EUR 1.8 m. In all other
respects, the parameters used were identical with those used for
the goodwill impairment test in Hotels & Resorts (Note 12).
Unrecognised losses by associates and joint ventures
As at the end of the financial year under review, accumulated
unrecognised losses of joint ventures amounted to EUR 12.3 m
(previous year EUR 7.3 m). In the period under review, unrecognised
losses relating to WOT Hotels Vietnam rose by EUR 4.2 m to EUR 11.1
m, while unrecognised losses relating to Abou Soma for Hotels S. A.
E. grew by EUR 0.8 m to EUR 1.1 m. Accumulated unrecognised losses
by associates of EUR 2.7 m (previous year EUR 1.1 m) related to
Ahungalla Resorts Limited. Recognition of additional losses would
have resulted in the carrying amounts falling to below nil.
Risks associated with the stakes in associates and joint
ventures
Contingent liabilities of EUR 0.7 m (previous year EUR 6.5 m)
existed in respect of associates as at 30 September 2023.
Contingent liabilities in respect of joint ventures totalled EUR
1.7 m (previous year EUR 3.1 m).
(17) Trade and other receivables
Trade and other receivables
30 Sep 2023 30 Sep 2022
Remaining Remaining
EUR million term more Total term more Total
than 1 year than 1 year
Trade receivables - 411.6 - 399.2
Security deposits - 372.3 - 312.5
Advances and loans 15.9 33.9 43.4 66.7
Lease receivables 0.8 4.1 5.2 9.6
Other receivables and assets 58.0 343.2 83.0 355.4
Total 74.7 1,165.1 131.6 1,143.4
As at 30 September 2023, TUI has recognised deferred sales
commissions to travel agencies and other distribution channels
worth EUR 82.5 m (previous year EUR 63.3 m) in respect of costs of
obtaining a contract until the associated revenue was earned. In
the financial year under review, sales commissions worth EUR 798.9
m (previous year EUR 622.5 m) were recognised in profit and
loss.
Security deposits include securities for credit card acquirers
as well as securities for received touristic advance payments.
(18) Touristic payments on account
Touristic payments on account mainly relate to customary advance
payments in respect of future tourism services, in particular
advance payments made by tour operators for future hotel and flight
services.
In the financial year under review the additions to impairments
recognised through profit or loss for advance payments made by tour
operators for future hotel services totalled EUR 3.4 m (previous
year: reversals of impairments EUR 33.6 m).
(19) Other non-financial assets
The other non-financial assets of EUR 230.6 m (previous year EUR
305.1 m) resulted mainly from the overfunded pension plans worth
EUR 98.5 m (previous year EUR 163.4 m) and assets from other taxes
worth EUR 77.5 m (previous year EUR 70.3 m).
(20) Deferred tax assets
Individual items of deferred tax assets and liabilities recognised in the statement of financial position
30 Sep 2023 30 Sep 2022
EUR million Asset Liability Asset Liability
Lease transactions 13.6 96.8 14.1 71.3
Recognition and measurement differences for property, plant and equipment and 184.4 225.3 153.4 230.4
other non-current assets
Recognition differences for receivables and other assets 16.4 38.5 21.9 55.5
Measurement of financial instruments 4.5 72.9 0.2 61.4
Measurement of pension provisions 79.7 21.2 78.6 43.3
Recognition and measurement differences for other provisions 62.1 3.0 50.4 5.3
Other transactions 45.6 66.4 95.5 40.5
Capitalised tax savings from recoverable losses carried forward 269.4 - 194.4 -
Netting of deferred tax assets and liabilities - 365.1 - 365.1 - 386.5 - 386.5
Balance sheet amount 310.6 159.0 222.0 121.2
Deferred tax assets include an amount of EUR 290.2 m (previous
year EUR 138.0 m) expected to be realised after more than twelve
months. Deferred tax liabilities include an amount of EUR 102.0 m
(previous year EUR 119.5 m) expected to be realised after more than
twelve months.
No deferred tax assets are recognised for deductible temporary
differences of EUR 29.4 m (previous year EUR 22.7 m).
No deferred tax liabilities are carried for temporary
differences of EUR 91.3 m (previous year EUR 87.2 m) between the
net assets of subsidiaries and the respective taxable carrying
amounts of subsidiaries since these temporary differences are not
expected to be reversed in the near future.
The net asset surplus of deferred tax assets and liabilities
increased by EUR 50.8 m compared to the previous year. Of this, EUR
26.3 m was recognised as deferred tax income in the income
statement and EUR 24.9 m as an increase in other comprehensive
income. The change in other comprehensive income mainly relates to
actuarial gains and losses in pension assets and the measurement of
cash flow hedges. The remaining amount of EUR - 0.4 m results from
currency effects.
Recognised losses carried forward and time limits for non-recognised losses carried forward
EUR million 30 Sep 2023 30 Sep 2022
Recognised losses carried forward 1,415.1 1,091.0
Non-recognised losses carried forward 12,246.4 11,880.6
of which losses carried forward forfeitable within one year 5.7 -
of which losses carried forward forfeitable within two to five years 2.7 8.7
of which losses carried forward forfeitable within more than five years - 6.2
(excluding non-forfeitable loss carryforwards)
of which non-forfeitable losses carried forward 12,238.0 11,865.7
Total unused losses carried forward 13,661.5 12,971.6
Losses carried forward for German companies comprise the
cumulative amount of trade tax and corporation tax as well as
interest carried forward in relation to the German interest barrier
rule. Potential tax savings totalling EUR 2,562.1 m (previous year
EUR 2,444.6 m) were not recognised as the underlying losses carried
forward were not expected to be utilised in the planning
horizon.
In financial year 2023, tax savings of EUR 9.3 m (previous year
EUR 0.0 m) resulted from the use of tax losses carried forward
previously not assessed as recoverable for which, therefore, no
deferred tax assets had been carried as at 30 September 2022 for
the potential tax savings resulting from these assets. Tax
reductions from loss carry-backs (previous year EUR 0.0 m) were not
realised.
Development of deferred tax assets from losses carried forward
EUR million 2023 2022
Capitalised tax savings at the beginning of the year 194.4 147.3
Use of losses carried forward - 12.3 - 23.7
Capitalisation of tax savings from tax losses carried forward 97.1 84.7
Impairment of capitalised tax savings from tax losses carried forward - 8.6 - 14.2
Exchange adjustments and other items - 1.2 0.3
Capitalised tax savings at financial year-end 269.4 194.4
Capitalised deferred tax assets from temporary differences and
losses carried forward that are assessed as recoverable of EUR
207.0 m (previous year EUR 321.3 m) are covered by expected future
taxable income even for companies that generated losses in the
reporting period or the prior year. This is based on the future
business development planned by TUI's management. The key points of
this planning are presented in the section 'Key judgements,
assumptions and estimates'. TUI uses a five-year planning horizon
to derive the recoverability of tax loss carryforwards and
deductible differences.
(21) Inventories
Inventories
EUR million 30 Sep 2023 30 Sep 2022
Airline spares and operating equipment 22.9 13.3
Real estate for sale 0.2 0.2
Consumables used in hotels 21.4 20.9
Other inventories 17.6 21.7
Total 62.1 56.1
In financial year 2023, inventories of EUR 638.6 m (previous
year EUR 584.2 m) were recognised as expense.
(22) Cash and cash equivalents
Cash and cash equivalents
EUR million 30 Sep 2023 30 Sep 2022
Bank deposits 1,566.2 1,718.6
Money market funds 472.2 -
Cash in hand and cheques 21.9 18.3
Total 2,060.3 1,736.9
At 30 September 2023, cash and cash equivalents of EUR 772.2 m
(previous year EUR 526.1 m) were subject to the restrictions listed
below:
On 30 September 2016, TUI AG entered into a long-term agreement
to close the gap between the obligations and the fund assets of
defined benefit pension plans in the UK. At the balance sheet date
an amount of EUR 66.9 m is deposited as security within a bank
account. TUI Group can only use that cash and cash equivalents if
it provides alternative collateral.
Furthermore, an amount of EUR 116,3 m (previous year EUR 116.1
m) was deposited with a Belgian subsidiary without acknowledgement
of debt by the Belgian tax authorities in financial year 2013 in
respect of long-standing litigation over VAT refunds for the years
2001 to 2011. The purpose was to suspend the accrual of interest
for both parties. In order to collateralise a potential repayment,
the Belgian government was granted a bank guarantee. Due to the
bank guarantee, TUI's ability to dispose of the cash and cash
equivalents is restricted. The remaining EUR 589,0 m (previous year
EUR 343.9 m) subject to restrictions relate to cash and cash
equivalents to be deposited due to statutory or regulatory
requirements mainly in order to secure potential liability to
travel regulators and payment service providers. Investments in
money market funds meet the requirements of IAS7 for accounting as
cash equivalents.
(23) Assets held for sale
Assets held for sale
EUR million 30 Sep 2023 30 Sep 2022
Disposal group Robinson Club Cabo Verde 44.4 -
Investments accounted for using the equity method 15.1 -
Other assets 9.1 2.7
Total 68.6 2.7
As at 30 September 2023, the shares in WOT Hotels Adriatic Asset
Company d. o. o. with a carrying amount of EUR 12.0 m were
classified as held for sale. Prior to the reclassification to
assets held for sale, the shares in WOT Adriatic were measured at
fair value. This measurement resulted in a reversal of an
impairment loss of EUR 4.5 m recognised in the past. The income is
recognised under the result from companies accounted for using the
equity method. The shares were sold on 20 October 2023. For further
details, please refer to the section 'Acquisitions -
divestments'.
As at 30 September 2023, the shares in Raiffeisen-Tour RT-Reisen
GmbH totalling EUR 3.1 m were classified as held for sale. The
purchase agreement was signed on 29 August 2023. Prior to the
reclassification to assets held for sale, the shares in RT Reisen
were measured at fair value. The resulting impairment loss of EUR
1.8 m is carried under the result from companies accounted for
using the equity method. The sale was completed on 19 October 2023.
For further details, please refer to the section 'Acquisitions -
divestments'.
The Riu Mangoos property in Jamaica was sold with effect from 2
October 2023. The purchase price totals USD 9.6 m. As at 30
September 2023, the property was classified as held for sale with a
carrying amount of EUR 8.9 m.
On 31 March 2023, an agreement was signed with TUI Global
Hospitality Fund S. C. S. for the divestment of Club Hotel CV, S.
A. (Robinson Club Cabo Verde), fully consolidated in the Hotels
& Resorts segment. Accordingly, the assets and liabilities of
the disposal group were classified as held for sale. In addition,
part of the goodwill of the 'Robinson' cash-generating unit
amounting to EUR 2.3 m was classified as held for sale. The sale
was completed on 31 October 2023. In this context, we refer to the
sections 'Liabilities related to assets held for sale' and
'Acquisitions - divestments'.
Disposal group 'Robinson Club Cabo Verde'
EUR million 30 Sep 2023
Goodwill 2.3
Other intangible assets and property, plant and equipment 41.0
Inventories 0.3
Trade and other receivables 0.5
Other non-financial assets 0.1
Cash and cash equivalents 0.2
Total 44.4
During the period under review, the following reclassifications
were made to assets held for sale:
As of December 31, 2022, two aircraft engines with a total value
of EUR 31.0 m were classified as held for sale. The sale of the
aircraft engines took place in February 2023.
As of March 31, 2023, the shares in the non-consolidated
investment Peakwork AG with a value of EUR 24.0 m were classified
as held for sale. The shares were sold in April 2023. The purchase
price payment of EUR 24.0 m was made in April 2023.
As of June 30, 2023, the Riu Punta Nizuc plot in Mexico with a
total value of EUR 39.7 m was classified as held for sale. The plot
was sold on September 6, 2023. The purchase price amounted to MXN
817.0 m.
As at the end of the prior financial year, the building at Jet
Set House (Crawley) of TUI Airways Limited was classified as held
for sale (EUR 2.7 m). The disposal transaction was completed on 3
October 2022. The purchase price payment of GBP 6.5 m was made on 3
October 2022.
(24) Subscribed capital
The fully paid subscribed capital of TUI AG consists of no-par
value shares, each representing an identical share in the capital
stock. The proportionate share in the capital stock per no-par
value share is EUR 1.00. As the capital stock consists of
registered shares, the owners are listed by name in the share
register. The subscribed capital of TUI AG is registered in the
commercial registers of the district courts of
Berlin-Charlottenburg and Hanover.
In the past financial year, after prior smoothing of the share
capital through the retirement of three shares, the existing share
capital of TUI AG in the amount of EUR 1,785,205,850.00, divided
into 1,785,205,850 no-par value registered shares with a
proportionate amount of the share capital of EUR 1.00 per no-par
value share, was reduced in accordance with the provisions on
capital reduction pursuant to sections 222 et seq. AktG in
conjunction with Section 7 (6) WStBG for the purpose of
transferring a part of the capital stock to the company's capital
reserve by EUR 1,606,685,265.00 to EUR 178,520,585.00.
The reduction was effected by consolidation of shares. The
capital reduction was carried out at a ratio of ten to one, so that
ten no-par value registered shares were merged to form one no-par
value registered share.
The capital reduction was related to a recapitalisation of the
Company within the meaning of Sec. 22 StFG. The reduction amount of
EUR 1,606,685,265.00 was allocated to the Company's
non-distributable capital reserve in accordance with Sec. 7 (6)
Sentence 5 WStBG.
Following the capital reduction, the Company's capital stock in
the amount of EUR 178,520,585.00, divided into 178,520,585 no-par
value registered shares was increased by issuing 328,910,448 new
no-par value registered shares with a proportionate amount of the
share capital of EUR 1.00 per no-par value share to EUR
507,431,033.00, divided into 507,431,033 no-par value registered
shares. This increase in capital stock totalling EUR 328.9 m was
carried out using the authorisations granted by the Annual
Stockholders' Meeting on 8 February 2022 to issue new registered
shares against cash contributions for a maximum total of EUR 162.3
m (Authorised Capital 2022 / I) and to issue new shares against
cash or non-cash contributions in the amount of EUR 626.9 m
(Authorised Capital 2022 / II ) entirely from authorised
capital.
Conditional capital
The Annual General Meeting on 9 February 2016 had created
conditional capital of EUR 150.0 m for the issuance of bonds. The
authorisation to acquire bonds with conversion or option rights or
obligations or profit participation rights (with or without a fixed
term) was limited to a nominal amount of EUR 2.0 bn and expired on
8 February 2021. This authorisation was fully utilised with the
issuance of a bond with warrants totalling EUR 150.0 m to the
Economic Stabilisation Fund (ESF) in October 2020. The outstanding
bonds and warrants were repurchased in full on 27 April 2023
without the ESF having previously exercised its option right.
The Extraordinary General Meeting on 5 January 2021 resolved to
create conditional capital of EUR 420.0 m in order to grant the ESF
the right to convert ESF's asset contribution in the form of a
silent participation of EUR 420.0 m ('Silent Participation I') at
any time (in a single or several transactions) in full or in part
into up to 420 m new no-par value registered shares with a
proportionate share in the capital stock of EUR 1.0 per no-par
value share. The new shares will be issued at the minimum issuance
amount of EUR 1.0. The silent participation I was repaid in full on
27 April 2023 without ESF having previously exercised its
conversion right.
The Annual General Meeting on 25 March 2021 resolved to create
conditional capital for the issuance of bonds totalling EUR 109.9
m. The authorisation to acquire bonds with conversion or option
rights or obligations or profit participation rights (with or
without a fixed term) was limited to a nominal amount of EUR 2.0 bn
and expires on 24 March 2026. This authorisation was fully utilised
with the issuance of a convertible bond totalling EUR 589.6 m in
April and July 2021. As at the reporting date, no shares had been
issued to serve the convertible bond.
The Annual General Meeting on 8 February 2022 resolved to create
two further amounts of conditional capital for the issuance of
bonds worth EUR 162.3 m and EUR 81.1 m. The authorisation to
acquire bonds with conversion or option rights or obligations or
profit participation rights (with or without a fixed term) was
limited to a nominal amount of EUR 2.0 bn and expires on 7 February
2027.
As of 30 September 2023, unused conversion rights of issued
convertible bonds result in conditional capital of EUR 109.9 m. In
addition, TUI AG has unused conditional capital in the amount of
EUR 243.4 m as of the balance sheet date, resulting in total unused
conditional capital in the amount of EUR 353.3 m.
Authorised capital
The Annual General Meeting on 13 February 2018 resolved to
create authorised capital of EUR 30.0 m for the issuance of
employee shares. The Executive Board of TUI AG was authorised to
use this capital in one or several transactions to issue employee
shares against cash contribution by 12 February 2023. No new
employee shares were issued in the completed financial year.
The Annual General Meeting on 8 February 2022 resolved to
authorise the Executive Board to issue new registered shares
against cash contributions for up to a maximum of EUR 162.3 m
(Authorised Capital 2022 / I). This authorisation will expire on 7
February 2027.
The Annual General Meeting on 8 February 2022 also resolved to
create authorised capital for the issuance of new shares against
cash and non-cash contribution of EUR 626.9 m (Authorised Capital
2022 / II). The issuance of new shares against non-cash
contributions is limited to EUR 162.3 m. The authorisation for this
capital will expire on 7 February 2027.
In the past fiscal year, the capital stock was increased by EUR
328.9 m by making partial use of the latter two authorisations for
authorised capital. Authorised Capital 2022 / I was mainly used in
the amount of EUR 140.4 m to fully repay the federal stabilisation
measures and Authorised Capital 2022 / II was used in the amount of
EUR 188.5 m to reduce KfW credit lines.
By resolution of the Annual General Meeting on 14 February 2023,
the authorised capital of originally EUR 671.0 m (Authorised
Capital 2022 / III) was deleted from the Articles of association
without replacement, as the intended purpose of this authorisation
was achieved in June 2022 with the repayment of the Silent
participation II granted by the ESF.
At the balance sheet date, total authorisations for unused
authorised capital amounted to around EUR 460.3 m (prior year
around EUR 1,320.2 m, of which EUR 508.7 m could no longer be
used). The further use of unused authorised capital is subject to
the Executive Board's binding declaration of commitment from
February 2023, which was announced at the Annual General Meeting,
that it will be used primarily for the completion of the
stabilisation measures respectively primarily for the reduction of
KfW credit lines.
(25) Capital reserves
The capital reserves comprise transfers of premiums. They also
comprise amounts entitling the holders to acquire shares in TUI AG
in the framework of bonds issued for conversion options and
warrants.
In the completed financial year, capital reserves rose by EUR
3,004.2 m from EUR 6,085.9 m to EUR 9,090.1 m. EUR 1,606.7 m were
transferred from subscribed capital to capital reserves in the
context of the consolidation of shares in the ratio of ten to one.
In addition the premium of the capital increase which was carried
out in April 2023 increased the capital reserves by EUR 1,498.0 m
whereas the costs of the capital increase of EUR 66.0 m reduced the
capital reserve. With the resolution on 24th March 2023 to carry
out a rights issue, the warrants presented within capital reserves
at their book value of EUR 34.5 m were to be recognised as a
financial liability at the present value of the repurchase amount.
Accordingly the warrants were revalued, reclassified to current
liabilities and repurchased in April 2023. The difference between
the book value and the present value reduced the retained earnings,
the reclassification to liabilities therefore reduced the capital
reserves by only the book value of EUR 34.5 m.
(26) Revenue reserves
In the completed financial year, TUI AG did not pay a dividend
to its shareholders (previous year no dividend).
The ongoing recording of existing equity-settled stock option
plans resulted in a decrease in equity of EUR 0.0 m (previous year
increase EUR 0.2 m) in the reporting period. Disclosures on these
long-term incentive programmes are outlined in the section on
Share-based payments in accordance with IFRS 2.
Foreign exchange differences comprise differences from the
translation of the financial statements of foreign subsidiaries as
well as differences from the translation of goodwill denominated in
foreign currencies.
The net gain from investments in equity instruments in the
amount of EUR 23.7 m designated at fair value through other
comprehensive income includes EUR 23.2 m of the upward revaluation
recognised directly in equity of the non-consolidated investment
Peakwork AG, which was sold during the financial year. For detailed
explanations we refer to section 'Assets held for sale'.
The proportion of gains and losses from hedges used as effective
hedges of future cash flows is carried directly in equity under
other comprehensive income at EUR + 169.3 m (previous year EUR +
110.7 m). The increase in financial year 2023 is mainly
attributable to changes in exchange rates and fuel prices.
The revaluation of pension obligations (in particular actuarial
gains or losses) is also carried directly in Other income in
equity.
The valuation of the warrants and the silent participation I at
the present value of their respective repurchase amount lowered the
retained earnings by EUR 222.8 m in total in March 2023.
The revaluation reserve formed in accordance with IAS 27 (old
version) in the framework of step acquisitions of companies is
retained until the date of deconsolidation of the company
concerned.
(27) Silent participations
In financial year 2021, two silent participations were issued to
the ESF. They were both carried in equity in accordance with IAS
32.
The silent participation II in the amount of EUR 671.0 m was
fully repaid in May 2022. With the resolution on 24th March 2023 to
carry out a rights issue, the silent participation I was revalued
at the present value of the repurchase amount, reclassified to
current liabilities and repurchased in April 2023. The difference
of the book value of EUR 420.0 m and the present value reduced the
retained earnings. The silent participations are reduced by EUR
420.0 m.
(28) Use of Group profit available for distribution
In accordance with the German Stock Corporation Act, the Annual
General Meeting resolves the use of the profit available for
distribution carried in TUI AG's commercial-law annual financial
statements. TUI AG's loss for the year amounts to EUR 517.6 m
(previous year loss of EUR 530.9 m). Taking account of loss carried
forward of EUR 831.5 m (previous year profit carried forward EUR
300.6 m) TUI AG's balance sheet loss totals EUR 1,349.1 m.
(29) Non-controlling interest
Non-controlling interests mainly relate to RIUSA II S. A. based
in Palma de Mallorca, Spain. TUI's capital share in this hotel
operator stands at 50.0 %, as in the prior year.
The financial year of RIUSA II S. A. ends on 31 December and
thus deviates from TUI Group's financial year. This reporting date
was fixed when the company was founded. In order to include the
RIUSA II Group in TUI Group's consolidated financial statements as
at 30 September, the RIUSA II Group prepares sub-group financial
statements as at 30 September, the balance sheet date.
RIUSA II Group, allocated to Hotels & Resorts, operates
owned and leased hotels and hotels operated under management
contracts in tourism destinations of TUI Group.
The table below provides summarised financial information on
RIUSA II S. A., Palma de Mallorca, Spain - the subsidiary for which
material non-controlling interests exist. It presents the
consolidated financial statements of the sub-group.
Summarised financial information on RIUSA II S. A., Palma de Mallorca, Spain*
EUR million 30 Sep 2023 / 30 Sep 2022 /
2023 2022
Current assets 201.0 206.0
Non-current assets 2,077.4 2,016.0
Current liabilities 185.5 199.3
Non-current liabilities 109.3 108.6
Revenues 1,182.9 916.2
Profit / loss 294.2 128.4
Other comprehensive income 16.5 112.9
Cash inflow / outflow from operating activities 375.8 275.4
Cash inflow / outflow from investing activities - 163.6 - 169.6
Cash inflow / outflow from financing activities - 276.0 - 31.9
Accumulated non-controlling interest 820.3 785.5
Profit / loss attributable to non-controlling interest 147.1 64.2
* Consolidated subgroup
(30) Pension provisions and similar obligations
A number of defined contribution and defined benefit pension
plans are operated for Group employees. Pension obligations vary,
reflecting the different legal, fiscal and economic conditions in
each country of operation, and usually depend on employees' length
of service and pay levels.
All defined contribution plans are funded by the payment of
contributions to external insurance companies or funds. German
employees enjoy benefits from a statutory defined contribution plan
paying pensions as a function of employees' income and the
contributions paid in. Several additional industry pension
organisations exist for TUI Group companies. Once the contributions
to the state-run pension plans and private pension insurance
organisations have been paid, the Company has no further payment
obligations. Apart from Germany, major defined contribution plans
are also operated the Netherlands and in the UK. Contributions paid
are expensed for the respective period. In the reporting period,
the expenses for all defined contribution plans totalled EUR 84.8 m
(previous year EUR 80.5 m).
Apart from these defined contribution pension plans, TUI Group
operates defined benefit plans, which usually entail the formation
of provisions within the Company or investments in funds outside
the Company.
Within this group, MER-Pensionskasse VVaG, a private pension
fund in which German companies of the tourism industry are
organised, represents a multi-employer plan classified as a defined
benefit plan. In accordance with the statues of the plan, the plan
participants and the employers pay salary-based contributions into
the plan. There are no further obligations pursuant to the statutes
of the plan; an additional funding obligation of the participating
companies is explicitly excluded. The paid-in contributions are
invested in accordance with the policies of the pension plan unless
they are used in the short term for benefit payments. As the
investments are pooled and are not kept separately for each
participating employer, an allocation of plan assets to individual
participating employers is not possible. The investment risk and
the mortality risk are jointly shared by all plan participants.
Moreover, the pension fund does not provide any information to
participating companies that would allow the allocation of any
over- or underfunding or TUI's participation in the plan. For this
reason, accounting for the plan as defined benefit plan is not
possible, and the plan is therefore in accordance with the
requirements of IAS 19 shown like a defined contribution plan. In
the reporting period, contributions to MER-Pensionskasse VVaG
totalled EUR 5.6 m (previous year EUR 5.6 m). For the next
financial year, contributions are expected to remain at that
level.
TUI Group's major pension plans recognised as defined benefit
plans exist in Germany and the UK. By far the largest pension plans
are operated by the Group's tour operators in the UK. They
accounted for 68.6 % (previous year 68.2 %) of TUI Group's total
obligations at the balance sheet date. German plans account for a
further 25.0 % (previous year 25.6 %).
Material defined benefit plans in the United Kingdom
Scheme name Status
BAL Scheme closed
TUI UK Scheme closed
TAPS Scheme closed
Almost all defined benefit plans in the UK are funded
externally. Under UK law, the employer is obliged to ensure
sufficient funding so that plan assets cover the pension payments
to be made and the administrative costs of the funds. The pension
funds are managed by independent trustees. The trustees comprise
independent members, beneficiaries of the plan and employer
representatives. The trustees are responsible for the investment of
fund assets, taking account of the interests of plan members, but
they also negotiate the level of the contributions to the fund to
be paid by the employers, which constitute minimum contributions to
the funds. To that end, actuarial valuations are made every three
years by actuaries commissioned by the trustees. The annual
contributions to be paid to the funds in order to cover any
shortfalls were last defined on the basis of the measurement as at
30 September 2019.
Since 31 October 2018, the main sections of TUI Group's UK
Pension Trust have been closed to future accrual of benefits. As a
result, current service cost no longer arises for services
delivered by the employees. Since 1 November 2018, increases in
accrued pension benefits from the plan have been therefore
calculated in line with the rules for deferred members. With the
closure of the Pension Trust for future accrual, all existing staff
in the defined benefit scheme were offered the opportunity to join
the existing defined contribution plan to accrue pension from 1
November 2018 onwards.
By contrast, defined benefit plans in Germany are mainly
unfunded and the obligations from these plans are recognised as
provisions. The company assumes the obligation for payments of
company pensions when the beneficiaries reach the legal retirement
age. The amount of the pension paid usually depends either on the
remuneration received by the employee at the retirement date or the
amount of the average remuneration over the employee's service
period. Pension obligations usually include surviving dependants'
benefits and invalidity benefits. Pension payments are partly
limited by third party compensations, e. g. from insurances and
MER-Pensionskasse.
Material defined benefit plans in Germany
Scheme name Status
Versorgungsordnung TUI AG open
Versorgungsordnung TUIfly GmbH open
Versorgungsordnung TUI Deutschland GmbH closed
Versorgungsordnung TUI Beteiligungs GmbH closed
Versorgungsordnungen TUI Immobilien Services GmbH closed
In the period under review, defined benefit pension obligations
created total expenses of EUR 29.0 m for TUI Group, principally
comprising current service cost. In the previous year, the
restructuring of the activities of the Group's German airline
additionally resulted in a past service cost and a curtailment
expense. The administrative expenses shown relate to professional
advisor costs for the pension plans settled from the plan
assets.
Pension costs for defined benefit obligations
EUR million 2023 2022
Current service cost for employee service in the period 18.4 23.1
Curtailment losses / (gains) - 0.1 13.6
Net interest on the net defined benefit liability 10.5 6.6
Past service cost - 0.4 19.8
Administration cost 0.6 2.2
Total 29.0 65.3
Provisions for pension obligations are established for benefits
payable in the form of retirement, invalidity and surviving
dependants' benefits. Provisions are exclusively formed for defined
benefit schemes under which the Company guarantees employees a
specific pension level, including arrangements for early retirement
and temporary assistance benefits.
Defined benefit obligation recognised on the balance sheet
EUR million 30 Sep 2023 30 Sep 2022
Total Total
Present value of funded obligations 1,904.8 1,918.0
Fair value of external plan assets 1,905.8 2,076.4
Surplus (-) / Deficit (+) of funded plans - 1.0 - 158.4
Present value of unfunded pension obligations 572.8 596.3
Defined benefit obligation recognised on the balance sheet 571.8 437.9
of which
Overfunded plans in other non-financial assets 98.5 163.4
Provisions for pensions and similar obligations 670.3 601.3
of which current 33.3 33.1
of which non-current 637.1 568.2
For funded pension plans, the provision carried only covers the
shortfall in coverage between plan assets and the present value of
benefit obligations.
Where plan assets exceed funded pension obligations, taking
account of a difference due to past service cost, and where at the
same time there is an entitlement to reimbursement or reduction of
future contributions to the fund, the excess is recognised in
conformity with the asset ceiling defined by IAS 19. As at 30
September 2023, other non-financial assets include excesses of EUR
98.5 m (previous year EUR 163.4 m).
Development of defined benefit obligations
EUR million Present value of Fair value of plan Total
obligation assets
Balance as at 1 Oct 2022 2,514.3 - 2,076.4 437.9
Current service cost 18.4 - 18.4
Past service cost - 0.4 - - 0.4
Curtailments and settlements - 0.1 - - 0.1
Interest expense (+) / interest income (-) 114.1 - 103.6 10.5
Administration cost - 0.6 0.6
Pensions paid - 135.3 100.0 - 35.3
Contributions paid by employer - - 98.4 - 98.4
Contributions paid by employees 1.5 - 1.5 -
Remeasurements - 68.4 309.8 241.4
due to changes in financial assumptions - 84.5 - - 84.5
due to changes in demographic assumptions - 77.6 - - 77.6
due to experience adjustments 93.7 - 93.7
due to return on plan assets not included in Group profit /
loss - 304.5 304.5
for the year
due to assets that have not been capitalised due to the asset - 5.3 5.3
ceiling under IAS 19
Exchange differences 33.5 - 36.3 - 2.8
Other changes - - -
Balance as at 30 Sep 2023 2,477.6 - 1,905.8 571.8
Development of defined benefit obligations
EUR million Present value of Fair value of plan Total
obligation assets
Balance as at 1 Oct 2021 3,970.1 - 3,172.1 798.0
Current service cost 23.1 - 23.1
Past service cost 19.8 - 19.8
Curtailments and settlements 13.6 - 13.6
Interest expense (+) / interest income (-) 68.4 - 61.8 6.6
Administration cost - 2.2 2.2
Pensions paid - 163.8 123.8 - 40.0
Contributions paid by employer - - 141.1 - 141.1
Contributions paid by employees 1.4 - 1.4 -
Remeasurements - 1,413.2 1,167.7 - 245.5
due to changes in financial assumptions - 1,433.7 - - 1,433.7
due to changes in demographic assumptions 10.1 - 10.1
due to experience adjustments 10.4 - 10.4
due to return on plan assets not included in Group profit /
loss - 1,167.7 1,167.7
for the year
Exchange differences - 4.5 6.3 1.8
Other changes - 0.6 - - 0.6
Balance as at 30 Sep 2022 2,514.3 - 2,076.4 437.9
The net defined benefit obligation increased by EUR 133.9 m to
EUR 571.8 m in the financial year under review. The present value
of the obligation decreased slightly by a total of EUR 36.7 m
compared to the previous year, mainly due to an increase in
discount rates in the euro area and the United Kingdom. The fair
value of the plan assets decreased as well by EUR 170.6 m.
In order to limit the risk arising from the obligation, the
trustees of the UK pension plans acquired insurance policies in the
fiscal year 2021 securitising full reimbursement by insurers of the
payments to be made for parts of the existing obligations. The
obligation to fulfill the pension commitment has not been assumed
by the insurer in this transaction. Accordingly, the insured
portions of the pension plan continue to be recognised in the
financial statements.
At the balance sheet date, TUI Group's fund assets break down as
shown in the table below.
Composition of fund assets at the balance sheet date
30 Sep 2023 30 Sep 2022
Quoted market price Quoted market price
in an active market in an active market
EUR million yes no yes no
Fair value of fund assets at end of period 973.9 937.2 1,127.5 948.9
of which liability driven investments 484.7 - 528.2 -
of which corporate bonds 185.0 118.8 229.0 116.2
of which property 195.2 - 260.8 -
of which government bonds 43.1 - 41.7 -
of which securitised debt 42.2 - 39.1 -
of which equity instruments 13.7 - 22.1 -
of which insurance policies - 619.9 - 642.3
of which loans - 125.1 - 155.0
of which insurance linked securities - 3.1 - 10.4
of which cash - 70.3 - 25.0
of which other 10.0 - 6.6 -
Total fund assets before recognition of asset ceiling 1,911.1 2,076.4
under IAS 19
Assets not recognised due to the asset ceiling under IAS 19 - 5.3 -
Total fund assets after recognition of the asset ceiling under IAS 19 1,905.8 2,076.4
At the balance sheet date, as in the prior year, fund assets did
not comprise any direct investments in financial instruments issued
by TUI AG or its consolidated subsidiaries or any property owned by
the Group. For funded plans, investments in passive index tracker
funds may entail a proportionate investment in Group-owned
financial instruments.
Pension obligations are measured on the basis of actuarial
calculations based on country-specific parameters and assumptions.
The obligations under defined benefit plans are calculated on the
basis of the internationally accepted projected unit credit method,
taking account of expected future increases in salaries and
pensions. For the pension plans in the UK, expected increases in
salaries are not taken into account as they are no longer relevant
for the measurement due to the plan amendment outlined above. In
order to take account of the currently high inflation,
significantly higher pension trends have been applied for the next
scheduled pension adjustment for the German pension plans in
deviation from the projected future pension increases indicated
below for Germany.
Actuarial assumptions
30 Sep 2023
Percentage p. a. Germany United Kingdom Other countries
Discount rate 4.1 5.5 3.4
Projected future salary increases 2.0 - 1.5
Projected future pension increases 2.5 3.3 1.0
30 Sep 2022
Percentage p. a. Germany United Other countries
Kingdom
Discount rate 3.7 5.1 3.1
Projected future salary increases 2.0 - 1.5
Projected future pension increases 2.5 3.6 0.9
The interest rate applicable in discounting the provision for
pensions is based on an index for corporate bonds adjusted for
securities already downgraded and under observation by rating
agencies as well as subordinate bonds in order to meet the
criterion for high quality bonds (rated AA or higher) required
under IAS 19. The resulting yield structure is extrapolated on the
basis of the yield curves for almost risk-free bonds, taking
account of an appropriate risk mark-up reflecting the term of the
obligation. In order to cover a correspondingly broad market, an
index partly based on shorter-term bonds is used (for instance for
Eurozone bonds from the iBoxx EUR Corporates AA 10+ and iBoxx EUR
Corporates AA 7 - 10).
Apart from the parameters described above, a further key
assumption relates to life expectancy. In Germany, the Heubeck
reference tables 2018 G are used to determine life expectancy. In
the UK, the S3NxA base tables are used, adjusted to future expected
increases on the basis of the Continuous Mortality Investigation
(CMI) 2022. The pension in payment escalation formulae depend
primarily on the pension plan concerned. Apart from fixed rates of
increase, there are also a number of inflation-linked pension
adjustment mechanisms in different countries.
Changes in the key actuarial assumptions mentioned above would
lead to the changes in defined benefit obligations presented below.
The methodology used to determine sensitivity corresponds to the
method used to calculate the defined benefit obligation. The
assumptions were amended in isolation each time; actual
interdependencies between the assumptions were not taken into
account. The effect of the increase in life expectancy by one year
is calculated by means of a reduction in mortality due to the use
of the Heubeck tables 2018 G for pension plans in Germany. In the
UK, an extra year is added to the life expectancy determined on the
basis of the mortality tables.
Sensitivity of the defined benefit obligation due to changed actuarial assumptions
30 Sep 2023 30 Sep 2022
EUR million + 50 Basis points - 50 Basis points + 50 Basis points - 50 Basis points
Discount rate - 145.4 + 160.7 - 171.0 + 193.4
Salary increase + 7.2 - 6.8 + 12.2 - 11.1
Pension increase + 43.3 - 51.8 + 54.4 - 45.7
+ 1 year + 1 year
Life expectancy + 79.7 - + 79.1 -
The weighted average duration of the defined benefit obligations
totalled 13.5 years (previous year 15.8 years) for the overall
Group. In the UK, the weighted duration was 13.4 years (previous
year 16.2 years), while it stood at 14.1 years (previous year 15.4
years) in Germany.
Fund assets are determined on the basis of the fair values of
the funds invested as at 30 September 2023. The interest rate used
to determine the interest income from the assets of external funds
is identical with the discount rate used for the defined benefit
obligation.
For the forthcoming financial year, the companies of TUI Group
are expected to contribute around EUR 106.2 m (previous year EUR
104.4 m) to pension funds and pay pensions worth EUR 33.3 m
(previous year EUR 33.1 m) for unfunded plans. The expected
employer contribution to the pension funds mainly includes the
annual payment agreed with the trustees in the UK to reduce the
existing coverage shortfall. For funded plans, the payments to the
recipients are fully made from fund assets and therefore do not
result in a cash outflow for TUI Group.
TUI Group's defined benefit plans entail various risks; some of
which may have a substantial effect on the Company. The purchase of
insurance policies within the UK schemes serves to eliminate these
risks in respect of the liabilities due to pension scheme members
covered by this insurance, and hence reduce the overall level of
risk in respect of all the categories detailed below.
Investment risk
The investment risk plays a major role, in particular for the
large funded plans in the UK. Although shares usually outperform
bonds in terms of producing higher returns, they also entail
stronger volatility of balance sheet items and the risk of
short-term shortfalls in coverage. In order to limit this risk, the
trustees have built a balanced investment portfolio to limit the
concentration of risks.
Interest rate risk
The interest rate influences in particular unfunded schemes in
Germany as a decline in interest rates leads to an increase in the
defined benefit obligations. Accordingly, an increase in the
interest rate leads to a reduction in the defined benefit
obligations. Funded plans are less strongly affected by this
development as the performance of the interest-bearing assets
included in plan assets regularly dampens the effects. For the
funded plans in the UK, the trustees have invested a part of the
plan assets in liability-driven investment portfolios, holding
credit and hedging instruments in order to largely offset the
impact of changes in interest rates.
Inflation risk
An increase in the inflation rate normally increases the
obligation in pension schemes linked to the final salary of
beneficiaries as inflation causes an increase in the projected
salary increases. At the same time, inflation-based pension
increases included in the plan also rise. The inflation risk is
reduced through the use of caps and collars. Moreover, the large
pension funds in the UK hold inflation-linked assets, which also
partly reduce the risk from a significant rise in inflation. By
investing, in particular, plan assets in liability-driven
investment portfolios, which hold credit and hedging instruments,
they aim to largely offset the impact of the inflation rate.
Longevity risk
An increasing life expectancy increases the expected benefit
duration of the pension obligation. This risk is countered by using
regularly updated mortality data in calculating the present values
of the obligation.
Currency risk
For TUI Group, the pension schemes entail a currency risk as
most pension schemes are operated in the UK and therefore
denominated in sterling. The risk is limited as the currency
effects on the obligation and the assets partly offset each other.
The currency risk only relates to any excess of pension obligations
over plan assets or vice versa.
(31) Other provisions
Development of provisions in the financial year 2023
Balance as at 30 Changes with no effect on profit Usage Reversal Additions Balance
EUR million Sep 2022 and loss * as at
30 Sep 2023
Maintenance provisions 827.7 22.9 208.0 6.6 142.6 778.6
Provisions for litigation 71.3 1.1 4.8 2.4 3.2 68.4
Restructuring provisions 88.3 0.1 27.6 9.1 6.4 58.1
Provisions for other 42.5 - 2.3 3.4 1.2 7.1 42.7
personnel costs
Provisions for other taxes 41.9 - 0.4 7.8 2.7 4.0 35.0
Provisions for environmental 34.9 - 0.4 0.7 1.1 34.9
protection
Risks from onerous contracts 28.1 - 4.9 0.7 7.4 11.7 26.8
Miscellaneous provisions 161.3 - 5.2 52.6 46.9 80.8 137.4
Other provisions 1,296.0 11.3 305.3 77.0 256.9 1,181.9
* Reclassifications, transfers, exchange differences and changes
in the group of consolidated companies
Provisions for maintenance primarily relate to contractual
maintenance, overhaul and repair requirements for aircraft, engines
and other specific components arising from aircraft lease
contracts. Measurement of these provisions is based on the expected
cost of the next maintenance event, estimated on the basis of
current prices, expected price increases and manufacturers' data
sheets. In line with the terms of the individual contracts and the
aircraft model concerned, additions are recognised on a prorated
basis in relation to flight hours, the number of flights or the
length of the complete maintenance cycle. Lower maintenance
expenses than expected led also to a reversal of EUR 6.6 m.
Provisions for litigation relate to existing lawsuits. For
further details on lawsuits, please refer to Note 38.
Restructuring provisions comprise payments for personnel
measures as well as payments for the early termination of leases.
They primarily relate to restructuring projects as part of our
Global Realignment Programme for which detailed, formal
restructuring plans were drawn up and communicated to the parties
concerned. The reversal of the provision in the amount of EUR 9.1 m
is mainly due to the lower than expected reduction in the fleet
size of the Group's German airline. At the balance sheet date,
restructuring provisions totalled EUR 58.1 m (previous year EUR
88.3 m), for a large part relating to benefits for planned
personnel measures.
Provisions for personnel costs comprise provisions for jubilee
benefits and provisions for cash-settled share-based payment
schemes in accordance with IFRS 2. For information on these
long-term incentive programmes, please refer to Note 40
'Share-based payments in accordance with IFRS 2'.
Provisions for environmental protection primarily relate to
statutory obligations to remediate sites contaminated with legacy
waste from former mining and metallurgical activities.
Provisions for onerous contracts include EUR 16.7 m for the
early exit from a leased administrative building as the largest
single item.
Miscellaneous provisions include various provisions that, taken
individually, do not have a significant influence on TUI Group's
economic position. This item includes provisions for dismantling
obligations and compensation claims from customers.
Changes in other provisions outside profit and loss primarily
relate to changes in the group of consolidated companies, foreign
exchange differences and reclassifications within other
provisions.
Where the difference between the present value and the
settlement value of a provision is material for the measurement of
a non-current provision as at the balance sheet date, the provision
is recognised at its present value in accordance with IAS 37. The
discount rate to be applied should take account of the specific
risks of the liability and of future price increases. This
criterion applies to some items contained in TUI Group's other
provisions. Additions to other provisions comprise an interest
portion of EUR 25.4 m (previous year EUR 10.1 m), recognised as an
interest expense. An interest portion of EUR 23.6 million (previous
year EUR 10.1 million) is attributable to provisions for
maintenance.
Terms to maturity of other provisions
30 Sep 2023 30 Sep 2022
EUR million Remaining term more than 1 year Total Remaining term more than 1 year Total
Maintenance provisions 657.8 778.6 561.1 827.7
Provisions for litigation 37.4 68.4 38.6 71.3
Restructuring provisions 25.3 58.1 28.6 88.3
Provisions for other personnel costs 34.1 42.7 34.9 42.5
Provisions for other taxes 26.1 35.0 21.9 41.9
Provisions for environmental protection 32.8 34.9 32.9 34.9
Risks from onerous contracts 14.9 26.8 15.1 28.1
Miscellaneous provisions 20.2 137.4 21.9 161.3
Other provisions 848.6 1,181.9 755.0 1,296.0
(32) Financial and lease liabilities
Financial and lease liabilities
30 Sep 2023 30 Sep 2022
Remaining term Remaining term
EUR million up to 1 1- 5 years more than 5 Total up to 1 1- 5 years more than 5 Total
year years year years
Convertible bonds 13.5 529.2 - 542.7 13.5 - 518.6 532.1
Bonds - - - - - 48.4 - 48.4
Liabilities to banks 69.9 438.9 210.0 718.8 280.0 913.8 188.8 1,382.6
Other financial 15.1 20.4 - 35.5 26.4 61.8 - 88.2
liabilities
Financial liabilities 98.5 988.5 210.0 1,297.0 319.9 1,024.0 707.4 2,051.3
Lease liabilities 701.2 1,553.6 663.3 2,918.1 698.8 1,668.0 840.7 3,207.5
Non-current financial liabilities decreased by EUR 532.9 m
versus 30 September 2022 to EUR 1,198.5 m. The decrease is mainly
due to the reduction in liabilities to banks.
In April 2023, a capital increase with rights issue was
successfully completed. Parts of the proceeds were used to redeem,
or repurchase, in full the outstanding warrant bond including
warrants at the nominal amount of EUR 58.7 m plus accrued interest
at fair value. The bond component of this warrant bond was
recognised in financial liabilities, while the separately tradable
warrants were recognised in equity.
The early termination rights by TUI as well as the conversion
right and the put option held by the holders of the convertible
bond represent embedded derivatives which were not separated in
accordance with IFRS 9 as they are classified as closely related to
the host contract.
The largest financing instrument is a revolving credit facility
(RCF) between TUI AG and an existing banking syndicate, which has
included KfW since 2020. Following the capital increase effected in
April 2023, the KfW line within the syndicated revolving credit
facility was reduced from EUR 2.1 bn to EUR 1.05 bn so that the
credit facility decreased from EUR 3.74 bn to EUR 2.7 bn. In May
2023, the revolving credit facility from the banking syndicate was
extended to July 2026.
As at 30 September 2023, there were no drawdowns on the
revolving credit facilities (30 September 2022 EUR 562.0 m).
Current financial liabilities decreased by EUR 221.4 m to EUR
98.5 m as at 30 September 2023 as against EUR 319.9 m as at 30
September 2022.
For more details on the terms and conditions of the credit lines
provided by KfW, please refer to the section 'Going concern
reporting according to the UK Corporate Governance Code'.
Movements financial and lease liabilities
Convertible Short-term liabilities Long-term Other Total Lease
EUR million bonds Bonds to banks liabilities to financial financial liabilities
banks liabilities liabilities
Balance as at 1 Oct 532.1 48.4 280.0 1,102.6 88.2 2,051.3 3,207.5
2022
Raisings /
redemptions of the - - 58.7 - 243.5 - 433.8 - 9.4 - 745.4 - 595.0
period
Foreign exchange - - - 0.9 - 7.5 - - 8.4 - 146.2
movements
Other non-cash 10.6 10.3 34.3 - 12.4 - 43.3 - 0.5 451.8
movement
Balance as at 30 Sep 542.7 - 69.9 648.9 35.5 1,297.0 2,918.1
2023
Movements financial and lease liabilities
Convertible Short-term liabilities Long-term Other Total Lease
EUR million bonds Bonds to banks liabilities to financial financial liabilities
banks liabilities liabilities
Balance as at 1 Oct 2021 522.2 119.3 247.5 2,365.1 66.6 3,320.7 3,229.4
Raisings /
redemptions of the - - 91.3 - 95.0 - 1,270.6 - 16.0 - 1,472.9 - 572.6
period
Changes in scope of - - - - - - -
consolidation
Foreign exchange - - 5.0 24.8 0.1 29.9 328.8
movements
Other non-cash movement 9.9 20.4 122.5 - 16.7 37.5 173.6 221.9
Balance as at 30 Sep 532.1 48.4 280.0 1,102.6 88.2 2,051.3 3,207.5
2022
The payments made in the period include beside the raisings of
financial debt, in particular the repayment of bonds and financial
debt as well as the repayment of lease liabilities.
Fair values and carrying amounts of the bonds at 30 Sep 2023
30 Sep 2023 30 Sep 2022
Nominal value Nominal value Interest Stock market Carrying Stock market Carrying
EUR million Issuer initial outstanding rate value amount value amount
% p. a.
2021 / 2028
convertible TUI AG 589.6 589.6 5.000 541.0 542.7 423.0 532.1
bond
Total 541.0 542.7 423.0 532.1
(33) Other financial liabilities
Other financial liabilities include touristic advance payments
received for tours cancelled because of COVID-19 restrictions of
EUR 3.7 m (previous year EUR 16.7 m), for which immediate cash
refund options exist and which have to be repaid immediately if the
customer chooses to receive a refund.
(34) Touristic advance payments received
Touristic advance payments received
EUR million
Touristic advance payments received as at 1 Oct 2021 2,379.4
Revenue recognised that was included in the balance at the beginning of the period - 2,253.1
Increases due to cash received, excluding amounts recognised as revenue during the period 3,237.7
Reclassification to other financial liabilities - 12.0
Customer refund repayments - 325.0
Other - 28.1
Touristic advance payments received as at 30 Sep 2022 2,998.9
Revenue recognised that was included in the balance at the beginning of the period - 2,696.4
Increases due to cash received, excluding amounts recognised as revenue during the period 3,256.1
Reclassification to other financial liabilities - 0.1
Customer refund repayments - 56.2
Other 27.9
Touristic advance payments received as at 30 Sep 2023 3,530.2
(35) Other non-financial liabilities
Other non-financial liabilities
30 Sep 2023 30 Sep 2022
Remaining term Remaining term
EUR million up to 1 year 1- 5 years Total up to 1 year 1- 5 years Total
Other liabilities relating to employees 237.5 28.3 265.8 224.8 27.4 252.2
Other liabilities relating to social security 38.2 - 38.2 39.7 - 39.7
Other liabilities relating to other taxes 63.5 - 63.5 50.6 - 50.6
Other miscellaneous liabilities 137.0 1.6 138.6 144.2 0.9 145.1
Deferred income 57.9 222.9 280.8 60.6 136.9 197.5
Other non-financial liabilities 534.1 252.8 786.9 519.9 165.2 685.1
(36) Liabilities related to assets held for sale
As at 30 September 2023, the following liabilities were related
to assets held for sale:
Disposal Robinson Club Cabo Verde
EUR million 30 Sep 2023
Trade payables 1.1
Touristic advance payments received 0.1
Other non-financial liabilities 0.4
Total 1.6
In this context, we refer to the note 'Assets held for
sale'.
In the previous year, there were no liabilities in relation to
assets held for sale.
(37) Contingent liabilities
As at 30 September 2023, contingent liabilities amounted to EUR
73.7 m (previous year EUR 93.5 m). They are mainly attributable to
the granting of guarantees for the benefit of hotel activities and
the granting of guarantees for contingent liabilities from aircraft
leasing agreements. The contingent liabilities are reported at an
amount representing the best estimate of the expenditure required
to meet the potential obligation at the balance sheet date.
(38) Litigation
TUI AG and its subsidiaries are involved in several pending or
foreseeable court or arbitration proceedings, which do not have a
significant impact on their economic position as at 30 September
2023 or future periods. This also applies to actions claiming
warranty, repayment or any other compensation in connection with
the divestment of subsidiaries and business units over the past few
years. As in previous years, the Group recognised adequate
provisions, partly covered by expected claims for insurance
benefits, to cover all probable financial charges from court or
arbitration proceedings.
(39) Other financial commitments
Other financial commitments
30 Sep 2023 30 Sep 2022
Remaining term Remaining term
EUR million up to 1- 5 more than 5 years Total up to 1 - 5 more than 5 years Total
1 year years 1 year years
Order commitments in respect 1,070.9 1,101.6 - 2,172.5 400.7 1,730.6 160.1 2,291.4
of capital expenditure
Other financial commitments 107.8 84.4 - 192.2 71.9 28.5 28.8 129.2
Total 1,178.7 1,186.0 - 2,364.7 472.6 1,759.1 188.9 2,420.6
As at 30 September 2023 order commitments in respect of capital
expenditure decreased by EUR 118.9 m as against 30 September 2022.
The reduction in order commitments can be explained by aircraft
orders fulfilled in the year, delivery of Marella Voyager and due
to the effects of foreign exchange for order commitments
denominated in non-functional currencies. The reduction is to a
greater extent partially offset by new aircraft orders undertaken
during the year. The commitment for IT obligations reported within
other financial commitments increased due to the extension of
existing contracts.
(40) Share-based payments in accordance with IFRS 2
As at 30 September 2023, all existing awards are recognised as
cash-settled share-based payment schemes.
The following share-based payment schemes are in effect within
TUI Group as at 30 September 2023.
1. PHANTOM SHARES UNDER THE LONG-TERM INCENTIVE PLAN (LTIP) FOR
THE EXECUTIVE BOARD OF TUI AG
1.1 LTIP with share allocation from financial year 2020 (LTIP
EPS20 - 23)
Since the 2020 financial year, the Long Term Incentive Plan
(LTIP) consists of a programme based on phantom shares and is
measured over a period of four years (performance reference
period). The phantom shares are allocated in annual tranches.
All Executive Board members have their individual target amounts
defined in their service contracts. At the beginning of each
financial year, this target amount is translated into a preliminary
number of phantom shares based on the target amount. It constitutes
the basis for the determination of the performance-related pay
after the end of the performance reference period. In order to
determine that number, the target amount is divided by the average
Xetra share price of TUI AG shares during the 20 trading days prior
to the beginning of the performance reference period (1 October of
any one year). The entitlement under the long-term incentive
programme arises upon completion of the four-year performance
reference period and is subject to attainment of the relevant
target.
The performance target for determining the amount of the final
payout after the end of the performance reference period is the
average development over four years of the earning per share based
on a pro-forma adjusted EPS from continuing operations (Earnings
per Share - EPS) as reported in the annual report of the company.
The average development of EPS per annum (in percent) is derived
from the four equally weighted yearly EPS development values (in
%). Each yearly EPS development value is calculated as the quotient
of the EPS of the current financial year and the EPS of the
previous financial year. The initial EPS value used to determine
the target achievement is calculated at the beginning of the
performance period from the first EPS in the performance period and
the last EPS before the performance period.
Target achievement for the average development of EPS per annum
based on the annual amounts is determined as follows:
-- An average absolute EPS of less than 50 % of the absolute EPS
value determined at the beginning of theperformance period
corresponds to target achievement of 0 %.
-- An average absolute EPS of 50 % of the absolute EPS value
determined at the beginning of the performance period corresponds
to target achievement of 25 %.
-- An average absolute EPS of 50 % or more of the absolute EPS
value determined at the beginning of theperformance period up to an
average increase of 5 % corresponds to target achievement of 25 %
to 100 %.
-- An average increase of 5 % p. a. corresponds to target
achievement of 100 %.
-- An average increase of 5 % to 10 % p. a. corresponds to
target achievement of 100 % to 175 %.
-- An average increase of 10 % or more p. a. corresponds to
target achievement of 175 %.
For an average absolute EPS of 50 % or more of the absolute EPS
value determined at the beginning of the performance period up to
an average increase of 5 %, corresponding to a target achievement
of 25 % to 100 %, and an average increase of 5 % to 10 % p. a.,
corresponding to a target achievement of 100 % to 175 %, linear
interpolation is used to determine the degree of target
achievement. The degree of target achievement is rounded to two
decimal places.
If the prior-year EPS amounts to less than EUR 0.50, the
Supervisory Board defines new absolute targets for EPS as well as
minimum and maximum amounts for determining the percentage target
achievement for each subsequent financial year in the performance
reference period. Due to the development of EPS as a result of the
COVID-19 pandemic, the Supervisory Board has made use of this
clause and has accordingly defined absolute target values for the
current tranches, LTIP tranche 2020 - 2023, LTIP tranche 2021 -
2024, LTIP tranche 2022 - 2025 and LTIP tranche 2023 - 2026.
In order to determine the final number of phantom shares, the
degree of target achievement is multiplied by the preliminary
number of phantom shares on the final day of the performance
reference period. The payout amount is determined by multiplying
the final number of phantom shares by the average Xetra share price
of TUI AG shares over the 20 trading days prior to the end of the
performance reference period (30 September of any one year). The
payout amount determined in this way is paid out in the month of
the approval and audit of TUI Group's annual financial statements
for the relevant financial year. If the service contract begins or
ends in the course of the financial year relevant for the
allocation of the LTIP, the entitlement to payment of the LTIP is
determined on a pro rata basis.
In the case of a capital increase from company funds, the number
of preliminary phantom shares would increase in the same ratio as
the nominal value of the share capital. In the case of a capital
decrease without return of capital, the number of preliminary
phantom shares would decrease in the same ratio as the nominal
value of the share capital. In the case of a capital increase
against contributions, a capital decrease with return of capital or
any other capital or structural measures that have an effect on the
share capital and cause a material change in the value of the TUI
AG share, the number of preliminary phantom shares would also be
adjusted. The Supervisory Board is entitled, at reasonable
discretion, to make adjustments to neutralize any negative or
positive effects from such capital or structural measures. The same
rule applies in the case of a change in share price due to the
payment of an unusually high superdividend. The Supervisory Board
has made use of this authorisation for the capital increases
carried out in January and
October 2021, March 2023 and the share consolidation at a ratio
of 10:1 in February 2023.
The maximum LTIP payout is capped at 240 % of the individual
target amount for each performance reference period. This means
that there is an annual LTIP cap which is determined individually
for each Executive Board member. The Supervisory Board is
furthermore, according to section 87 para. 1 cl. 3 German stock
corporation law, authorized to cap the LTIP payout in case of
extraordinary circumstances (e. g. company mergers, segment
disposals, recognition of hidden reserves or external
influences).
Performance Share Plan (PSP) for eligible Group executives
The PSP governs the phantom share-based remuneration for
eligible executives who are not members of the Executive Board. The
PSP is in principle harmonized with the LTIP EPS 20 - 23 of the
Board members. The performance period of the PSP is three years.
The current PSP has been in effect in its current form since 2019.
For the tranches granted since 2020 the vesting of the phantom
shares is dependent on the achievement of absolute EPS values
instead of relative EPS growth.
Since LTIP EPS20 - 23 and PSP follow common scheme principles,
the following development of allocated phantom shares under the
programs are shown on an aggregated basis.
Development of phantom shares allocated (LTIP EPS20 - 23, PSP)
LTIP EPS20- 23 & PSP
Number Present value
of shares EUR million
Balance as at 30 Sep 2021 6,375,600 23.1
Phantom shares allocated 2,986,295 10.8
New virtual shares allocated from subscription rights 2,349,794 -
Phantom shares forfeited - 1,358,549 - 3.1
Measurement results - - 15.2
Balance as at 30 Sep 2022 10,353,140 15.6
Phantom shares allocated 9,256,236 14.0
Balance after phantom shares allocated 19,609,376 29.6
Shares forfeited through 10:1 share consolidation - 17,648,438 - 26.6
Balance after 10:1 share consolidation 1,960,938 3.0
New virtual shares allocated from subscription rights 683,871 -
Phantom shares forfeited - 257,204 - 0.4
Measurement results - 10.4
Balance as at 30 Sep 2023 2,387,605 13.0
Accounting for share-based payment schemes
As at 30 September 2023, all existing awards are recognised as
cash-settled share-based payment schemes and are allocated with an
exercise price of EUR 0.00 (previous year EUR 0.00). The personnel
expense is recognised upon actual delivery of service according to
IFRS 2 and is, therefore, spread over a period of time. According
to IFRS 2, all contractually granted entitlements have to be
accounted for, irrespective of whether and when they are actually
allocated. Accordingly, phantom shares allocated in the past are
charged on a pro rata basis upon actual delivery of service.
Overall, expenses from the addition of provisions for
cash-settled share-based payments of EUR 3.8 m was recognised
through profit or loss in financial year 2023 (previous year income
EUR 4.5 m).
As at 30 September 2023, provisions relating to entitlements
under these long-term incentive programmes totalled EUR 10.9 m
(previous year EUR 7.6 m).
(41) Financial instruments
Risks and risk management
Risk management principles
Due to the nature of its business operations, TUI Group is
exposed to various financial risks, including market risks
(consisting of currency risks, interest rate risks and market price
risks), credit risks and liquidity risks.
In accordance with TUI Group's financial goals, financial risks
have to be mitigated. In order to achieve this, policies and
procedures have been developed to manage risk associated with
financial transactions undertaken.
The rules, responsibilities and processes as well as limits for
transactions and risk positions have been defined in policies. The
trading, processing and control have been segregated in functional
and organisational terms. Compliance with the policies and limits
is continually monitored. All hedges by TUI Group are consistently
based on recognised or forecasted underlying transactions. Standard
software is used for assessing, monitoring, reporting, documenting
and reviewing the effectiveness of the hedging relationships for
the hedges entered into. In this context, the fair values of all
derivative financial instruments determined on the basis of the
Group's own systems are regularly compared with the fair value
confirmations from the external counterparties. The processes, the
methods applied and the organisation of risk management are
reviewed for compliance with the relevant regulations on at least
an annual basis by the internal audit department and external
auditors.
Within TUI Group, financial risks primarily arise from cash
flows in foreign currencies, fuel requirements (jet fuel and bunker
oil) and financing via the money and capital markets. In order to
limit the risks from changes in exchange rates, market prices and
interest rates for underlying transactions, TUI Group uses
over-the-counter derivative financial instruments. These are
primarily fixed-price transactions. In addition, TUI can also use
options and structured products. Use of derivative financial
instruments is confined to internally fixed limits and other
policies. The transactions are concluded on an arm's length basis
with counterparties operating in the financial sector, whose
counterparty risk is regularly monitored. Foreign exchange
translation risks from the consolidation of group companies not
preparing their accounts in euros are not hedged.
Market risk
Market risks result in fluctuations in earnings, equity and cash
flows. Risks arising from input cost volatility are more fully
detailed in the risk report section of the management report. In
order to limit or eliminate these risks, TUI Group has developed
various hedging strategies, including the use of derivative
financial instruments.
IFRS 7 requires the presentation of a sensitivity analysis
showing the effects of hypothetical changes in relevant market risk
variables on profit or loss and equity. The effects for the period
are determined by relating the hypothetical changes in risk
variables to the portfolio of primary and derivative financial
instruments as at the balance sheet date. It is assured that the
portfolio of financial instruments as at the balance sheet date is
representative for the entire financial year.
The analyses of TUI Group's risk reduction activities outlined
below and the amounts determined using sensitivity analyses
represent hypothetical and thus uncertain risks. Due to
unforeseeable developments in the global financial markets, actual
results may deviate substantially from the disclosures provided.
The risk analysis methods used must not be considered a projection
of future events or losses, since TUI is also exposed to risks of a
non-financial or non-quantifiable nature. These risks primarily
include sovereign, business and legal risks not covered by the
following presentation of risks.
Currency risk
The business operations of TUI's group companies generate
payments or receipts denominated in foreign currencies, which are
not always matched by payments or receipts with equivalent terms in
the same currency. Using potential netting effects (netting of
payments made and received in the same currency with identical or
similar terms), TUI Group enters into appropriate hedges with
external counterparties in order to protect its profit margin from
exchange rate-related fluctuations.
Within TUI Group, risks from exchange rate fluctuations are
hedged, with the largest hedging volumes relating to US dollars,
euros and pound sterling. The Eurozone limits the currency risk
from transactions in the key tourist destinations to group
companies whose functional currency is not the euro. The tourism
business operations are mainly affected by changes in the value of
the US dollar and the euro, the latter predominantly affecting the
TUI tour operators in the UK and the Nordic countries. In tourism
operations, payments in US dollars primarily relate to the
procurement of services in non-European destinations, purchases of
jet and ship fuel and aircraft and cruise ship purchases or
charter.
The tourism companies use financial derivatives to hedge their
planned foreign exchange requirements. They aim to take out cover
ahead of the markets' customer booking profiles in the planned
currency requirements in the run-up to the tourism season. In this
regard, account is taken of the different risk profiles of TUI's
group companies. The hedged currency volumes are adjusted in line
with changes in planned requirements based on reporting by business
units. Target hedge ratios are regularly reviewed with the aim of
matching hedge ratios with the respective target hedging ratios for
future seasons.
Currency risks as defined by IFRS 7 arise from primary and
derivative monetary financial instruments issued in a currency
other than the functional currency of a company. Exchange
rate-related differences from the translation of financial
statements into the Group's presentation currency are not taken
into account. Taking account of the different functional currencies
within the TUI Group, the sensitivity analyses of the currencies
identified as relevant risk variables are presented below. A 10 %
strengthening or weakening of the respective functional currencies,
primarily euro and pound sterling, against the other currencies
would cause the following effects on the revaluation reserve and
earnings after income tax:
Sensitivity analysis - currency risk
EUR million 30 Sep 2023 30 Sep 2022
Variable: Foreign exchange rate + 10 % - 10 % + 10 % - 10 %
Exchange rates of key currencies
EUR / US dollar
Revaluation reserve + 3.2 - 6.7 + 1.4 - 1.5
Earnings after income taxes - 2.3 + 6.5 - 53.7 + 66.0
Pound sterling / EUR
Revaluation reserve + 159.5 - 161.1 + 67.5 - 66.3
Earnings after income taxes + 65.4 - 62.1 + 49.8 - 47.1
Pound sterling / US dollar
Revaluation reserve + 115.9 - 125.5 + 58.9 - 58.3
Earnings after income taxes + 57.9 - 43.3 + 406.7 - 481.4
EUR / Swedish krona
Revaluation reserve - 0.1 + 0.1 + 0.1 - 0.1
Earnings after income taxes + 0.1 - 0.1 + 0.1 - 0.1
Interest rate risk
TUI Group is exposed to interest rate risks from floating-rate
primary and derivative financial instruments. Where interest-driven
cash flows of floating-rate primary financial instruments are
converted into fixed cash flows using derivative hedges and the
critical terms of the hedging transaction are the same as those of
the hedged items they are not exposed to an interest rate risk. No
interest rate risk exists for fixed-interest financial instruments
carried at amortised cost.
Changes in market interest rates mainly impact floating-rate
non-derivative financial instruments and derivative financial
instruments entered into in order to reduce interest-induced cash
flow fluctuations.
The table below presents the equity and earnings after income
taxes effects of an assumed increase or decrease in the market
interest rate of 100 basis points (previous year + / - 100 basis
points) as at the balance sheet date. Maintaining the sensitivity
of market prices at 100 basis points is based on the assumption
that an elevated level of volatility in interest rates is likely to
continue as some central banks are expected to continue with their
rate hike cycle whilst others are likely to pause, or even start to
cut rates, in the coming months.
Sensitivity analysis - interest rate risk
EUR million 30 Sep 2023 30 Sep 2022
Variable: Interest rate level for + 100 basis points - 100 basis points + 100 basis points - 100 basis points
floating interest-bearing debt
Earnings after income taxes + 1.7 - 1.3 - 0.3 + 0.4
Impact of the reform of global benchmark interest rates
The global reform of benchmark interest rates (IBORs) creates
uncertainties for TUI in that variable benchmark interest rates
available today, on which individual transactions concluded in
foreign currencies are based, will no longer be available in the
future or will be determined differently. At TUI, these
uncertainties only affect non-derivative risk positions. As in the
previous year, there are no derivative risk positions.
With regard to EURIBOR, there is no impact from the change to
the accounting for non-derivative assets and liabilities. In 2019,
the European Money Market Institute adapted EURIBOR's method of
determination to ensure EURIBOR's compliance with the EU Benchmark
Regulation.
Quotes for USD-LIBOR were last published on 30 June 2023. Until
September 30, 2024, a so-called synthetic LIBOR will be provided
for one-month, three-month and six-month maturity rates. According
to the UK's Financial Conduct Authority (FCA), these synthetic
rates may be used to settle certain legacy contracts.
As of September 30, 2023, there are non-derivative liabilities
with total carrying amounts of EUR 310.0 m (previous year: EUR
492.7 m) relating to the leasing and financing of aircraft. Of this
amount, EUR 205.6 m is attributable to USD-LIBOR financings, for
which a conversion to the alternative reference interest rate USD
SOFR has been negotiated but not yet contracted.
Overall, no material impact is expected from the conversion of
financing from USD-LIBOR to alternative benchmark interest
rates.
Fuel price risk
Due to the nature of its business operations, TUI Group is
exposed to market price risks from the purchase of fuel for the
aircraft fleet and the cruise ships.
The tourism companies use financial derivatives to hedge their
exposure to market price risks for the planned consumption of fuel.
They aim to take out cover ahead of the markets' customer booking
profiles in the planned commodity requirements in the run-up to the
tourism season. The different risk profiles of the group companies
operating in different source markets are taken into account,
including the possibility of levying fuel surcharges. The hedging
volumes are adjusted for changes in planned consumption as
identified by the group companies. Target hedge ratios are
regularly reviewed with the aim of matching hedge ratios with the
respective target hedging ratios for future seasons.
If the commodity prices, which underlie the fuel price hedges,
increase or decrease by 15 % (previous year + 15 % / - 15 %), on
the balance sheet date, the impact on equity and on earnings after
income taxes would be as shown in the table below. The sensitivity
of market prices of + / - 15 % is based on the assumption that an
above-average price volatility in fuel prices could be expected to
continue over the coming months in the context of the current
geo-political environment.
Sensitivity analysis - fuel price risk
EUR million 30 Sep 2023 30 Sep 2022
Variable: Fuel prices for aircraft and ships + 15 % - 15 % + 15 % - 15 %
Revaluation reserve + 92.2 - 94.9 + 13.5 - 26.0
Earnings after income taxes + 0.3 + 2.0 + 15.0 - 3.0
Other price risks
Apart from the financial risks that may result from changes in
exchange rates, commodity prices and interest rates, TUI Group is
not exposed to significant price risks at the balance sheet
date.
Credit risk
The credit risk in non-derivative financial instruments results
from the risk of counterparties defaulting on their contractual
payment obligations.
Maximum credit risk exposure corresponds in particular to the
total of the recognised carrying amounts of the financial assets
(including derivative financial instruments with positive market
values). Furthermore, there are no material financial guarantees
for the discharge of liabilities. Where legally enforceable,
financial assets and liabilities are netted. Credit risks are
reviewed closely on conclusion of the contract and continually
monitored thereafter in order to swiftly respond to potential
impairment in a counterparty's solvency. Responsibility for
handling the credit risk is generally held by the Group company
holding the receivable.
Since TUI Group operates in many different business areas and
regions, significant credit risk concentrations of receivables from
and loans to specific debtors or groups of debtors are not to be
expected. A significant concentration of credit risks related to
specific countries is not to be expected either. As in the previous
year, at the balance sheet date, there is no material collateral
held, or other credit enhancements that reduce the maximum credit
risk. Collateral held relates exclusively to financial assets of
the category trade receivables and other receivables. The
collateral mainly comprises collateral for financial receivables
granted and maturing in more than one year and / or with a volume
of more than EUR 1.0 m. Real property rights, directly enforceable
guarantees, bank guarantees and comfort letters are used as
collateral.
Credit management also covers TUI Group's derivative financial
instruments. The maximum credit risk for derivative financial
instruments entered into is limited to the total of all positive
market values of these instruments since in the event of
counterparty default asset losses would only be incurred up to that
amount. Since derivative financial instruments are concluded with
different debtors, credit risk exposure is reduced. The specific
credit risks of individual counterparties are taken into account in
determining the fair values of derivative financial instruments. In
addition, the counterparty risk is continually monitored and
controlled using internal bank limits.
IFRS 9 requires entities to recognise expected losses for all
financial assets held at amortised cost and for financial assets
constituting debt instruments and measured at FVTOCI (Fair Value
Through Other Comprehensive Income). In TUI Group, the items
affected are financial instruments recognised at amortised cost in
the following categories: trade receivables and other receivables
with the sub-classes trade receivables, advances and loans, other
receivables and assets as well as lease receivables. Additional
classes are other financial assets and cash and cash equivalents.
In determining expected losses, IFRS 9 distinguishes between the
general and the simplified approach to impairment.
Under the general approach to impairment, financial assets are
classified into three stages. Stage 1 is where financial assets are
recognised for the first time or where credit risk has not
increased significantly since initial recognition. At this stage,
the expected bad debt losses that may arise from possible default
events within the next 12 months after the respective balance sheet
date are reported. For financial assets in stage 1, entities are
required to recognise 12-month Expected Credit Losses (ECL). Stage
2 is where credit risk has increased significantly since initial
recognition. Stage 3 includes financial assets that additionally
have objective evidence of impairment alongside the criteria of
stage 2. Stages 2 and 3 show lifetime ECL.
Under the simplified approach to impairment, a loss allowance is
carried at an amount equal to life-time ECL at initial recognition
for trade receivables and lease receivables, regardless of the
credit quality of the accounts receivable and the lease
receivables. TUI uses a provision matrix to determine the expected
loss for trade receivables and lease receivables. Average
historical default rates are determined for the following maturity
bands. Not overdue, less than 30 days past due, 30 - 90 days, 91 -
180 days and more than 180 days past due. To determine the
historical default rate, the weighted average of the last three
years is calculated for the receivables in default in the
respective year in relation to the receivables portfolio at the end
of the respective financial year. This is multiplied by the
probability that a receivable will age into the final maturity
band. The loss rates determined are adjusted by credit default swap
(CDS) rates in order to take account of forward-looking
information. The adjusted loss rates are based on average rates for
the past few years. The economic environment of the relevant
geographical regions is taken into account through a weighting of
CDS rates. All model parameters mentioned above are regularly
reviewed and updated.
Under the simplified approach to impairment, trade receivable
and lease receivables are transferred to Stage 3 when there is any
objective evidence of impairment. In principle TUI Group classifies
whether a trade receivable is to be transferred to Stage 3 on an
individual basis, depending on the region, after 180 days at the
earliest. In the event of insolvencies or other objective
indications of impairment before this date, a transfer to stage 3
is made earlier. If a receivable is more than 180 days overdue, it
is assumed to be impaired and, in the event of uncollectibility,
generally written down in full. Objective evidence of impairment of
lease receivables includes, for example, significant financial
difficulties on the part of the debtor, breach of contract (default
or delay in interest and repayment) or concessions made for
economic or contractual reasons in connection with the debtor's
financial difficulties.
For all other financial assets carried at amortised cost
impairments are determined in accordance with the general
approach.
For cash and cash equivalents, the low credit risk exemption of
IFRS 9 is applied, according to which financial instruments with a
low default risk at the time of acquisition can be classified in
stage 1 of the impairment model. Cash and cash equivalents include,
for instance, cash in hand or bank balances that are exclusively
due to counterparties with a high credit rating. In accordance with
stage 1 of the impairment hierarchy, a risk provision corresponding
to the 12-month credit loss is recorded in cash and cash
equivalents upon initial recognition. At each balance sheet date, a
verification is made as to whether the counterparties continue to
have a rating of investment grade quality. As the corresponding
financial assets have a maximum term of 3 months, the impairment
requirement is very low. A transfer from Stage 1 to Stage 2 or 3
has no practical relevance, as the business relationship would be
terminated immediately in the case of a corresponding event.
For material advances and loans and other receivables and
assets, the expected credit losses are determined by multiplying
the probability of default with the loss given default and the
exposure of default. TUI Group determines the probabilities of
default on the basis of an internal rating model. As part of TUI
Group's business model, the ratings of debtors for material
receivables are evaluated on the basis of this internal rating.
Category 1 of the rating model contains the debtors with the
highest credit rating, whereas the debtors with the lowest credit
rating are classified in the category 7. If the credit risk has not
significantly deteriorated since initial recognition, 12-month
credit losses are determined (stage 1). In the event of a
significant increase in the credit risk, the lifetime-expected
credit loss is determined (stage 2). A significant increase in the
default risk is assumed on the basis of the internal rating and
other relevant information such as changes in the economic,
regulatory or technological environment.
If there is any objective evidence of impairment, a transfer is
made to Stage 3.
The gross carrying amount of a financial asset of all classes of
financial instruments recognised at amortised cost is written off
when there is no longer the expectation of full or partial recovery
a financial asset following an appropriate assessment. For
individual customers the gross carrying amount is usually written
off by the Group companies based on past experience of recoveries
of such assets in the country specific business environment if the
financial asset is no longer expected to be collected due to days
overdue. For corporate customers, TUI Group's businesses conduct an
individual assessment about the timing and the amount of write off
based on whether there is a reasonable expectation of recovery. TUI
Group does not expect significant recovery of amounts written off.
However, written-off financial assets may still be subject to
enforcement actions to collect overdue receivables.
For advances and loans, other receivables and assets as well as
other financial assets, the expected credit losses are determined
on a portfolio basis. In significant individual cases, this
portfolio approach is deviated from, as the relevant information
for determining the expected loss is available at the stage of the
individual instrument. TUI Group ensures that solely financial
assets with similar credit risk characteristics are combined, e. g.
type of product and geographical region. TUI Group initially
carries the credit loss based on a loss rate expected for the next
twelve months. This loss rate is adjusted at regular intervals
depending on the macroeconomic market environment. If the credit
risk increases significantly, the lifetime expected credit loss is
determined (Stage 2). The assessment of a significant increase in
the credit risk, because of the past due status of the instruments,
is determined in TUI Group on an individual basis by region, change
in default risk-related market data or change in contractual
conditions, among other factors. Depending on the portfolio, a
reclassification to stage 2 is regularly made if the overdue amount
is more than 30 days past due. If there is objective evidence of
impairment, the instrument is transferred to Stage 3.
In principle, the general approach assumes that the default risk
of financial assets has increased significantly since initial
recognition if contractual payments are more than 30 days overdue.
However, this can be refuted by TUI Group's available appropriate
and comprehensible information. The assessment of the objective
evidence of impairment for all instruments falling within the scope
of the ECL model is based on the following indicators: e. g. severe
financial difficulties of the debtor, breach of contract (default
or delinquency in interest or principal payment) or concessions
made for economic or contractual reasons in connection with
financial difficulties of the debtor. As a result, such instruments
are usually written off in full.
CDS rates are used as forward-looking information in the general
impairment model, too.
The impairment ratio for financial assets in the general
approach that are not included in the 'default risk' table below is
based on observable past default rates, but is set at a minimum of
1 %. The 1 % results from this year's calculation of the simplified
approach. The decline is due in particular to the greatly reduced
impact of the coronavirus pandemic.
TUI Group recognises an impairment gain or loss on all financial
assets with a corresponding adjustment of the carrying amount
through a provision for impairment.
In order to improve the presentation, from the 2023 financial
year onwards only the expected credit losses will be shown in the
'Ageing structure' tables in the 'impairment for expected credit
losses' column and only the change in the impairment for expected
credit losses will be shown in the 'changes in risk provisions'
tables. The information relating to the previous year remains
unchanged.
In the 'Ageing structure' tables the specific bad debt allowance
determined at subsidiary level is shown separately in the 'specific
bad debt allowance' column. The previous year's 'impairment' column
includes both the impairment for expected credit losses and the
specific bad debt allowance determined at subsidiary level.
In the tables on 'changes in risk provisioning' the specific bad
debt allowance determined at subsidiary level which is included in
the risk provisioning as at 1 October 2022 is removed in line
'Removing specific bad debt allowance from presentation'.
The impairment ratios stated from the current year onwards
relate exclusively to expected credit losses and no longer include
the specific bad debt allowances determined at subsidiary
level.
As at 30 September 2023, trade receivables were impaired in the
amount of EUR 49.7 m (previous year EUR 59.5 m). The following
overview shows a maturity analysis of the impairments:
Ageing structure of impairment of financial instruments classified as trade receivables
30 Sep 2023
Gross Specific Impairment for expected credit Net Impairment
EUR million value bad debt losses value ratio
allowance
Trade receivables
Not overdue 294.4 - - 294.4 -
Overdue less than 30 95.5 26.2 1.0 68.3 1 %
days
Overdue 30 - 90 days 31.1 4.4 0.3 26.4 1 %
Overdue 91 - 180 days 10.2 3.5 0.2 6.5 2 %
Overdue more than 180 30.1 13.5 0.6 16.0 2 %
days
Total 461.3 47.6 2.1 411.6
Ageing structure of impairment of financial instruments classified as trade receivables
30 Sep 2022
EUR million Gross value Impairment Net value Impairment
ratio
Trade receivables
Not overdue 271.9 6.8 265.1 5 - 25 %
Overdue less than 30 days 95.9 11.6 84.3 10 - 30 %
Overdue 30 - 90 days 35.4 12.3 23.1 15 - 35 %
Overdue 91 - 180 days 17.5 8.5 9.0 20 - 45 %
Overdue more than 180 days 38.0 20.3 17.7 50 - 75 %
Total 458.7 59.5 399.2
Impairments of lease receivables have developed as follows:
Ageing structure of impairment of financial instruments classified as lease receivables
30 Sep 2023
Gross value (after specific Specific bad debt Impairment for expected Net Impairment
EUR million bad debt allowance) allowance credit losses value ratio
Lease receivables
Not overdue 4.1 - - 4.1 -
Overdue less than 30 - - - - 1 %
days
Overdue 30 - 90 days - - - - 1 %
Overdue 91 - 180 days - - - - 2 %
Overdue more than 180 - - - - 2 %
days
Total 4.1 - - 4.1
Ageing structure of impairment of financial instruments classified as lease receivables
30 Sep 2022
EUR million Gross value Impairment Net value Impairment
ratio
Lease receivables
Not overdue 9.8 0.2 9.6 5 - 25 %
Overdue less than 30 days - - - 10 - 30 %
Overdue 30 - 90 days - - - 15 - 35 %
Overdue 91 - 180 days - - - 20 - 45 %
Overdue more than 180 days - - - 50 - 75 %
Total 9.8 0.2 9.6
The following tables show the development of impairment losses
on financial instruments in the category Other receivables and
assets and in the category advances and loans, in each case less
the amounts shown for the corresponding category in the table of
the default risk below.
Ageing structure of impairment of financial instruments classified as other receivables and assets
30 Sep 2023
EUR million Gross Specific bad debt Impairment for expected credit Net Impairment
value allowance losses value ratio
Other receivables and
assets
Not overdue 211.3 21.0 2.1 188.2 1 %
Overdue less than 30 0.7 - - 0.7 1 %
days
Overdue 30 - 90 days - - - - 1 %
Overdue 91 - 180 days 0.1 - - 0.1 1 %
Overdue more than 180 13.3 5.2 0.1 8.0 1 %
days
Total 225.4 26.2 2.2 197.0
Ageing structure of impairment of financial instruments classified as other receivables and assets
30 Sep 2022 adjusted
EUR million Gross value Impairment Net value Impairment
ratio
Other receivables and assets
Not overdue 142.7* 0.1* 142.6* 5 - 25 %
Overdue less than 30 days - - - 10 - 30 %
Overdue 30 - 90 days 3.4 3.4 - 15 - 35 %
Overdue 91 - 180 days 0.2 - 0.2 20 - 45 %
Overdue more than 180 days 1.1 0.3 0.8 50 - 75 %
Total 147.4* 3.8* 143.6*
* The previous year was adjusted because some of the financial
instruments are now shown in the table 'Default risk on financial
instruments classified as advances and loans, as other receivables
or as other financial assets'.
Impairments of advances and loans developed as follows:
Ageing structure of impairment of financial instruments classified as advances and loans
30 Sep 2023
EUR million Gross value Specific bad debt allowance Impairment for expected credit Net value
losses
Advances and loans
Not overdue 7.1 0.1 0.1 6.9
Overdue less than 30 days - - - -
Overdue 30 - 90 days - - - -
Overdue 91 - 180 days - - - -
Overdue more than 180 days 1.2 1.2 - -
Total 8.3 1.3 0.1 6.9
Ageing structure of impairment of financial instruments classified as advances and loans
30 Sep 2022 adjusted
EUR million Gross value Impairment Net value
Advances and loans
Not overdue 8.5* 0.7* 7.8*
Overdue less than 30 days - - -
Overdue 30 - 90 days 0.1 0.1 -
Overdue 91 - 180 days - - -
Overdue more than 180 days 0.2* 0.2* -
Total 8.8* 1.0* 7.8*
* The previous year was adjusted because some of the financial
instruments are now shown in the table 'Default risk on financial
instruments classified as advances and loans, as other receivables
or as other financial assets'.
The material single items in the following table, 'Default risk
on financial instruments classified as advances and loans, as other
receivables or as other financial assets' are disclosed based on an
internal rating. In the past financial year, there was one stage
transfer in the individual items listed there from stage 2 to stage
3 in the amount of EUR 12.9 m (previous year: one transfers from
stage 2 to stage 3 in the amount of EUR 6.2 m).
Default risk on financial instruments classified as advances and loans, as other receivables or as other financial
assets
30 Sep 2023 30 Sep 2022 adjusted
Impairment Gross Specific bad Impairment for Net Gross Net
EUR million stage Rating value debt expected credit value value Impairment value
allowance losses
Financial
instruments with
related parties
Advances and loans 1 internal: - - - - 21.9 - 0.6 21.3
grade 2
Advances and loans 3 internal: 9.5 - 6.4 - 0.3 2.8 20.8* - 18.6* 2.2*
grade 5
Advances and loans 3 internal: 4.5 - 4.5 - - - - -
grade 6
Advances and loans 3 internal: 11.4 - 11.4 - - - - -
grade 7
Other receivables 3 internal: 0.9 - 0.9 - - - - -
grade 7
Financial
instruments with
hotels
Advances and loans 1 internal: 9.6 9.6 - 1.3 8.3 10.4 - 1.8 8.6
grade 5
Advances and loans 2 internal: 17.0 17.0 - 1.1 15.9 30.0 - 3.3 26.7
grade 5
Advances and loans 3 internal: 12.9 - 12.9 - - - - -
grade 5
Other receivables 1 internal: - - - - 3.0* - 3.0*
grade 2
Other receivables 3 internal: - - - - 41.0 - 13.8 27.2
grade 3
Financial
instruments with
other companies
Advances and loans 3 internal: 5.0 - 5.0 - - 5.4* - 5.4* -
grade 5
Other financial 1 internal: - - - - 34.6 - 0.2 34.4
assets grade 1
Other financial 1 external 45.1 - - 0.1 45.0 45.1 - 0.1 45.0
assets
Other receivables 1 internal: 66.1 - - 0.1 66.0 106.6* - 0.2* 106.4*
grade 1
Other receivables 1 internal: 44.1 - - 0.1 44.0 30.2* - 0.1* 30.1*
grade 2
Other receivables 1 internal: 7.4 - - 0.2 7.2 6.3* - 0.3* 6.0*
grade 4
Other receivables 1 internal: 24.2 - - 1.5 22.7 - - -
grade 5
Other receivables 1 external 378.2 - - 0.5 377.7 350.5* - 0.6* 349.9*
Other receivables 3 internal: 1.8 - 0.9 - 0.9 2.9* - 1.0* 1.9*
grade 4
* The table takes into account all default risk rating grades
used as at 30 September 2023. The previous year's figures have been
adjusted accordingly.
Insofar as the default risk can only be determined on the basis
of past due information, the information is contained in the tables
'ageing structure of impairment of financial instruments classified
as other receivables and assets' and 'ageing structure of
impairment of financial instruments classified as advances and
loans'.
Other financial assets carried at amortised cost at an amount of
EUR 48.6 m (previous year EUR 85.8 m) relate to short-term deposits
with banks. The full amount of these investments with a gross
amount of EUR 48.7 m (previous year EUR 86.2 m) is not overdue.
Impairments of EUR 0.1 m (previous year EUR 0.5 m) were carried in
the framework of risk provisioning.
In the financial year 2023, there were no significant cash
inflows from impaired interest-bearing trade receivables and other
receivables (previous year of EUR 4.8 m cash inflows).
The tables below show a reconciliation of the loan loss
provisions for financial assets, measured at amortised cost, for
which loan loss provisions are determined using the general
approach or the simplified approach.
Change in risk provisions for financial assets measured at amortised cost in the classes advances
and loans, other receivables and assets and other financial assets
Stage 2 Stage 3
EUR million Stage 1 lifetime-ECL lifetime-ECL Total
12-month-ECL (not (impaired)
impaired)
Risk provisioning as at 1 Oct 2021 27.6 14.3 - 41.9
Addition of impairment on newly issued / acquired financial assets 2.3 1.8 20.8 24.9
Transfer to stage 3 lifetime ECL (impaired) - 7.4 - 12.8 20.2 -
Unrequired impairments on financial assets derecognised during the - 15.9 - - - 15.9
period and use of impairments
Risk provisioning as at 30 Sep 2022 6.6 3.3 41.0 50.9
Risk provisioning as at 1 Oct 2022 6.6 3.3 41.0 50.9
Addition of impairment on newly issued / acquired financial assets 2.3 - - 2.3
Transfer to stage 3 lifetime ECL (impaired) - - 1.5 1.5 -
Unrequired impairments on financial assets derecognised during the - 1.4 - 0.8 - 3.1 - 5.3
period and use of impairments
Removing specific bad debt allowance from presentation - - - 39.0 - 39.0
Change of models, risk parameters - 1.4 - - - 1.4
Risk provisioning as at 30 Sep 2023 6.1 1.0 0.4 7.5
As at 30 September 2023, risk provisioning totals EUR 4.6 m
(previous year EUR 19.8 m) for the other receivables and assets
class and EUR 0.1 m (previous year EUR 0.5 m) for the other
financial assets class as well as EUR 2.8 m (previous year EUR 30.6
m) for the advances and loans class.
As at 30 September, 2023, one instrument in class other
receivables and assets and ten instruments in class advances and
loans were reported in stage 3 (previous year: three and eight
instruments respectively in stage 3). There were no currency
differences (previous year: no currency differences).
The changes in the scope of consolidation had no material impact
on risk provisioning (previous year: no changes). A transfer was
made in the advances and loans class in the amount of EUR 1.5 m
from stage 2 to stage 3 (previous year transfer from stage 1 to
stage 3: EUR 6.6 m and transfer from stage 2 to stage 3: EUR 12.8
m). No transfer was made in the other receivables and assets class
(previous year transfer from stage 1 to stage 3: EUR 0.8 m).
In the current financial year in class advances and loans no
material impairments have been used (previous year EUR 9.5 m). The
models were adjusted with regard to the risk parameters used in
terms of the loss rate in line with the macroeconomic market
environment. This resulted in a lower risk provision of EUR 1.9 m
(previous year: EUR 6.2 m).
Change in risk provisions for financial assets measured at amortised cost classified
as trade receivables
EUR million Lifetime ECL
simplified approach
Risk provisioning as at 1 Oct 2021 71.6
Exchange differences 0.7
Addition of impairment on newly issued / acquired financial assets 23.6
Other changes 1.3
Unrequired impairments on financial assets derecognised during the period and use of impairments - 37.7
Risk provisioning as at 30 Sep 2022 59.5
Risk provisioning as at 1 Oct 2022 59.5
Exchange differences - 0.3
Unrequired impairments on financial assets derecognised during the period - 9.4
Use of impairments - 4.8
Removing specific bad debt allowance from presentation - 41.9
Change of models, risk parameters - 1.0
Risk provisioning as at 30 Sep 2023 2.1
Change in risk provisions for financial assets measured at amortised cost classified
as lease receivables
EUR million Lifetime ECL
simplified approach
Risk provisioning as at 1 Oct 2021 0.3
Exchange differences - 0.3
Unrequired impairments on financial assets derecognised during the period and use of impairments 0.2
Risk provisioning as at 30 Sep 2022 0.2
Risk provisioning as at 1 Oct 2022 0.2
Unrequired impairments on financial assets derecognised during the period and use of impairments - 0.2
Risk provisioning as at 30 Sep 2023 -
The tables below show a reconciliation of gross carrying amounts
for financial assets measured at amortised cost:
Change in gross carrying amounts classified as advances and loans
EUR million Stage 1 Stage 2 lifetime-ECL Stage 3 lifetime-ECL Total
12-month-ECL (not impaired) (impaired)
Gross carrying amounts as at 1 Oct 2021 188.9 45.0 - 233.9
Addition of assets 13.2 1.0 2.3 16.5
Reduction of assets - 153.1 - - - 153.1
Transfer to impaired financial assets (Stage 3) - 9.1 - 16.0 25.1 -
Gross carrying amounts as at 30 Sep 2022 39.9 30.0 27.4 97.3
Gross carrying amounts as at 1 Oct 2022 39.9 30.0 27.4 97.3
Addition of assets 1.5 17.7 5.7 24.9
Reduction of assets - 25.5 - 17.2 - 1.4 - 44.1
Transfer to impaired financial assets (Stage 3) - - 12.9 12.9 -
Gross carrying amounts as at 30 Sep 2023 15.9 17.6 44.6 78.1
As of 30 September 2023, instruments of the class advances and
loans amounting to EUR 44.6 m are reported in stage 3.
There were no significant changes or modifications. There was a
transfer of EUR 12.9 m from stage 2 to stage 3 (previous year:
transfers between stage 1 and 3: EUR 9.1 m and transfers between
stage 2 and 3: EUR 16.0 m).
Change in gross carrying amounts classified as other receivables and assets and other financial assets
EUR million Stage 1 Stage 2 lifetime ECL (not Stage 3 lifetime-ECL Total
12-month ECL impaired) (impaired)
Gross carrying amounts as at 1 Oct 2021 329.6 - - 329.6
Addition of assets 685.4 - 44.4 729.8
Reduction of assets - 285.3 - - - 285.3
Transfer to impaired financial assets - 7.7 - 7.7 -
(Stage 3)
Gross carrying amounts as at 30 Sep 2022 722.0 - 52.1 774.1
Gross carrying amounts as at 1 Oct 2022 722.0 - 52.1 774.1
Addition of assets 679.8 0.5 57.5 737.8
Reduction of assets - 673.7 - - 41.4 - 715.1
Gross carrying amounts as at 30 Sep 2023 728.1 0.5 68.2 796.8
As at 30 September 2023, instruments in the classes of other
receivables and assets and other financial assets amounting to EUR
68.2 m were reported in stage 3.
There were no significant changes or modifications. There were
no transfers between the stages 1 to 3 (previous year transfers
from stage 1 to stage 3: EUR 7.7 m). No newly issued or acquired
instruments were impaired at the date of addition.
Change in gross carrying amounts of assets classified as trade receivables
EUR million Lifetime ECL simplified
approach
Gross carrying amounts as at 1 Oct 2021 331.4
Addition of assets 458.7
Reduction of assets - 331.4
Gross carrying amounts as at 30 Sep 2022 458.7
Gross carrying amounts as at 1 Oct 2022 458.7
Addition of assets 461.3
Reduction of assets - 458.7
Gross carrying amounts as at 30 Sep 2023 461.3
Change in gross carrying amounts of assets classified as lease receivables
EUR million Lifetime ECL
simplified approach
Gross carrying amounts as at 1 Oct 2021 11.4
Addition of assets 9.8
Reduction of assets - 11.4
Gross carrying amounts as at 30 Sep 2022 9.8
Gross carrying amounts as at 1 Oct 2022 9.8
Addition of assets 4.1
Reduction of assets - 9.8
Gross carrying amounts as at 30 Sep 2023 4.1
Liquidity risk
Liquidity risks arise from TUI Group being unable to meet its
short-term financial obligations and the resulting increases in
funding costs. TUI Group has established an internal liquidity
management system to secure TUI Group's liquidity at all times and
consistently comply with contractual payment obligations. To that
end, TUI Group's liquidity management system uses the opportunities
of physical and virtual cash pooling for more efficient liquidity
pooling. It also uses credit lines to compensate for the seasonal
fluctuations in liquidity resulting from the tourism business. The
core credit facility is a syndicated revolving credit facility
agreed with the previous syndicate banks and KfW Bank, which has
been included due to the COVID-19 pandemic. The total amount of the
revolving credit facility has now been reduced to a total of EUR
2.5 bn.
Details of the financing transactions are presented in the
section 'Going-concern reporting in accordance with the UK
Corporate Governance Code'.
As in the previous year, no material assets were deposited as
collateral for liabilities. Moreover, the Group companies
participating in the automated cash pool are jointly and severally
liable for financial liabilities from cash pooling agreements.
At the balance sheet date, 19 TUI Group companies are jointly
and severally liable for TUI AG's financial debts from the
revolving credit facility and the promissory note loan.
The tables provided below list the contractually agreed
(undiscounted) cash flows of all primary financial liabilities as
at the balance sheet date. Planned payments for future new
liabilities were not taken into account. Where financial
liabilities have a floating interest rate, the forward interest
rates fixed at the balance sheet date were used to determine future
interest payments. Financial liabilities cancellable at any time
are allocated to the earliest maturity band.
The analysis of cash flows from derivative financial instruments
shows the contractually agreed (undiscounted) cash flows by
maturity of foreign exchange hedges and hedges of other price risks
of all liabilities that existed at the balance sheet date.
Cash flow of financial instruments - financial and lease liabilities (30 Sep 2023)
Cash outflow until 30 Sep
up to 1 year 1 - 2 years 2 - 5 years more than 5 years
EUR million repayment interest repayment interest repayment interest repayment interest
Financial liabilities
Convertible bonds - - 29.5 - - 29.5 - 589.6 - 88.4 - -
Bonds - - - - - - - -
Liabilities to banks - 69.9 - 31.9 - 275.8 - 29.0 - 163.1 - 38.4 - 210.0 - 34.9
Other financial debt - 15.0 - 1.8 - 3.8 - 2.1 - 16.7 - 0.1 - -
Trade payables - 3,373.7 - - - - - - -
Other financial liabilities - 121.9 - 1.6 - 2.6 - - - - -
Lease liabilities - 701.2 - 128.6 - 521.5 - 104.5 - 1,032.1 - 184.2 - 663.3 - 264.3
Cash flow of financial instruments - financial and lease liabilities (30 Sep 2022)
Cash outflow until 30 Sep
up to 1 year 1 - 2 years 2 - 5 years more than 5 years
EUR million repayment interest repayment interest repayment interest repayment interest
Financial liabilities
Convertible bonds - - 29.5 - - 29.5 - - 88.4 - 589.6 - 29.5
Bonds - - 5.6 - - 5.6 - 58.7 - 11.2 - -
Liabilities to banks - 280.0 - 65.3 - 600.9 - 44.0 - 312.8 - 36.5 - 188.9 - 16.7
Other financial debt - 26.4 - 1.6 - 44.9 - 2.0 - 16.9 - 0.5 - -
Trade payables - 3,316.5 - - - - - - -
Other financial liabilities - 174.7 - 0.3 - 0.3 - - 2.5 - - -
Lease liabilities - 698.8 - 60.8 - 655.7 - 69.8 - 1,012.4 - 182.5 - 840.7 - 393.4
Cash flow of derivative financial instruments (30 Sep 2023)
Cash in- / outflow until 30 Sep
EUR million up to 1 year 1 - 2 years 2 - 5 years more than
5 years
Derivative financial instruments
Hedging transactions - inflows + 1,604.5 + 133.5 - -
Hedging transactions - outflows - 1,638.4 - 136.2 - -
Other derivative financial instruments - inflows + 1,294.1 - - -
Other derivative financial instruments - outflows - 1,308.7 - - -
Cash flow of derivative financial instruments (30 Sep 2022)
Cash in- / outflow until 30 Sep
EUR million up to 1 year 1 - 2 years 2 - 5 years more than
5 years
Derivative financial instruments
Hedging transactions - inflows + 156.2 - - -
Hedging transactions - outflows - 185.1 - - -
Other derivative financial instruments - inflows + 630.3 - - -
Other derivative financial instruments - outflows - 665.7 - - -
The derivative financial instruments carried as Other derivative
financial instruments are derivatives not designated as hedging
instruments according to IAS 39.
For further information for hedging strategies and risk
management see also the remarks in the Risk Report section of the
Management Report.
Derivative financial instruments and hedges
Strategy and goals
In accordance with TUI Group's policy, derivatives are allowed
to be used if they are based on underlying recognised assets or
liabilities, firm commitments or forecast transactions. Hedge
accounting based on the rules of IAS 39 is applied to forecasted
transactions. In the completed financial year, hedges consisted of
cash flow hedges.
Derivative financial instruments in the form of fixed-price
transactions and options as well as structured products can be used
to limit currency, interest rate and fuel risks.
The COVID-19 pandemic significantly impacted TUI's business
operations, causing a strong increase in TUI's credit risk
premiums. The significant increase in TUI's credit risk had a
direct impact on the effectiveness of hedging relationships
according to IAS 39 and explicitly on the retrospective hedge
effectiveness test, because when calculating retrospective
effectiveness, the credit risk is included in the derivative
instrument entered into with the counterparty, but not in the
hypothetical derivative. As a result, fuel price, interest rate and
currency hedges had to be de-designated as they no longer met the
effectiveness requirements of IAS 39. For the de-designated hedging
instruments cash flow hedge accounting is terminated and the hedges
are recognised as other derivative financial instruments. Based on
these de-designations any further changes in the fair value of
these instruments will be recognised in profit or loss in the
income statement in the cost of sales or, in the case of interest
rate hedges, in the financial result.
For all fuel price hedges contracted from 1 January 2023, the
retrospective effectiveness will be determined, based on regression
analysis. For fuel price hedges contracted before 31 December 2022,
the dollar offset method will continue to be applied. This change
in method allows hedge relationships to be presented more
appropriately, so that as at 30 September 2023, no newly contracted
fuel price hedges after the 1 January 2023 have to be
de-designated. Furthermore, from 31 March 2023, the designation of
the hedged item for foreign currency hedges is evaluated on a
seasonal basis. The designation on a seasonal basis reflects the
operational tourism business model with a summer and winter season
within a financial year and corresponds to the hedging approach of
TUI's risk management strategy. Due to the COVID-19 pandemic and
its impact on the business operations of TUI, the seasonal
consideration of the hedge ratio of foreign currency hedges was
temporarily suspended and a designation on a monthly basis has been
established. This approach for designation of hedges no longer
corresponds to the risk management strategy as the tourism
operating business has returned to pre-crisis levels.
As at 30 September 2023, the fair value of these reclassified
fuel price hedges totalled EUR 3.5 m at a nominal volume of EUR
10.3 m, while the fair value of the interest rate hedges amounted
to EUR 2.5 m at a nominal volume of EUR 46.0 m and the fair value
of foreign currency hedges totalled EUR 0.3 m at a nominal volume
of EUR 2.4 m.
Cash flow hedges
At 30 September 2023, hedges in hedging relationships in
accordance with IAS 39 existed to manage cash flows in foreign
currencies with maturities of up to two years (previous year up to
two years). The fuel price hedges in hedging relationships in
accordance with IAS 39 had terms of up to two years (previous year
up to one year). Hedges in hedging relationships in accordance with
IAS 39 to protect variable interest payment obligations are
currently not in the portfolio (previous year none). The impact on
profit or loss for is recognised at the time the expected cash
inflow / outflow occurs.
Nominal amounts of derivative financial instruments used
30 Sep 2023
Remaining term
EUR million up to more than Total Average hedged rate / price
1 year 1 year
Currency hedges
Forwards 5,798.5 554.1 6,352.6
Forwards EUR / GBP 2,267.6 173.6 2,441.2 1.1380
Forwards EUR / USD 1,086.1 114.3 1,200.4 0.9081
Forwards GBP / USD 1,646.5 182.2 1,828.7 0.7982
Forwards EUR / SEK 235.3 50.3 285.6 0.0859
Other currencies 563.0 33.7 596.7
Commodity hedges
Swaps 779.5 25.7 805.2
Jet fuel 732.7 20.7 753.4 737.29
Marine fuel 46.8 5.0 51.8 530.08
Other fuels - - - -
Other derivative financial instruments 3,356.6 46.0 3,402.6
Nominal amounts of derivative financial instruments used
30 Sep 2022
Remaining term
EUR million up to more than Total Average hedged rate / price
1 year 1 year
Currency hedges
Forwards 2,535.6 2.4 2,538.0
Forwards EUR / GBP 1,013.5 - 1,013.5 1.1582
Forwards EUR / USD 464.7 2.4 467.1 0.9627
Forwards GBP / USD 878.6 - 878.6 0.8368
Forwards EUR / SEK 63.5 - 63.5 0.0942
Other currencies 115.3 - 115.3
Commodity hedges
Swaps 165.2 - 165.2
Jet fuel 154.8 - 154.8 1,088.90
Marine fuel 10.4 - 10.4 674.27
Other fuels - - - -
Other derivative financial instruments 3,743.2 53.6 3,796.8
Other derivative hedging instruments comprise the nominal value
of hedges not designated for hedge accounting. TUI Group
exclusively enters into derivative financial instruments for
hedging purposes. Depending on the type of the hedged underlying
transaction, TUI exercises the option to apply hedge accounting
according to IAS 39. Due to the COVID-19 pandemic, a large number
of hedges according to IAS 39 had to be terminated. Accordingly,
the derivative financial instruments underlying these hedges are
shown under Other derivative financial instruments.
The nominal values correspond to the total of all purchase and
sale amounts underlying the transactions or the respective contract
values of the transactions.
In order to hedge the risks of fluctuations in future cash flows
from currency, interest rate and fuel price risks, TUI regularly
enters into hedges. The planned underlying transactions are used to
determine the ineffective portions of hedges designated as cash
flow hedges. In designating cash flow hedges, only the spot rate
component is included in hedge accounting as a hedge for some
forward exchange transactions, while the interest component of
these financial instruments is shown separately in all relevant
tables under Other derivative financial instruments, in line with
derivatives not designated as hedging instruments according to IAS
39.
Disclosures on underlying transactions of cash flow hedges
30 Sep 2023
Fair Value changes to Balance of hedging Hedging
EUR million determine reserve of reserve
inefficient active cash flow hedges completed (ended) cash flow hedges
portions
Interest rate risk hedges - - - 13.2
Currency risk hedges - 78.3 78.7 -
Fuel price risk hedges - 152.6 132.0 18.1
Hedging - 230.9 210.7 4.9
Total - 230.9 210.7 4.9
Disclosures on underlying transactions of cash flow hedges
30 Sep 2022
Fair Value Balance of Hedging
changes to hedging reserve
EUR million determine reserve of completed
inefficient active cash (ended) cash
portions flow hedges flow hedges
Interest rate risk hedges - - - 30.6
Currency risk hedges - 121.7 121.6 1.4
Fuel price risk hedges 23.8 - 22.9 - 19.3
Hedging - 97.9 98.7 - 48.5
Total - 97.9 98.7 - 48.5
In accounting for cash flow hedges, the effective portions of
the hedging relationships have to be recognised in OCI outside
profit and loss. Any additional changes in the fair value of the
designated components are recognised as ineffective portions in
cost of sales. The table below presents the development of OCI in
financial year 2023.
Development of OCI
30 Sep 2023
EUR million Interest Currency risk Fuel price Total
rate risk risk
Gain or loss from fair value changes of hedges within hedge - 13.2 78.7 150.1 215.6
accounting
recognised in equity - 13.2 78.7 150.1 215.6
Reclassification from cash flow hedge 17.4 5.9 39.1 62.4
reserve to income statement
due to early termination of the hedge - 0.9 - 0.9
due to recognition of the 17.4 5.0 39.1 61.5
underlying transaction
Development of OCI
30 Sep 2022
EUR million Interest Currency risk Fuel price risk Total
rate risk
Gain or loss from fair value changes of hedges within hedge accounting - 30.6 123.0 - 42.2 50.2
recognised in equity - 30.6 123.0 - 42.2 50.2
Reclassification from cash flow hedge - 1.4 4.1 - 22.0 - 19.3
reserve to income statement
due to early termination of the hedge - 0.5 - 0.5
due to recognition of the - 1.4 3.6 - 22.0 - 19.8
underlying transaction
The table Development of OCI presents the changes including
foreign currency effects and can therefore not be directly
reconciled with the statement of comprehensive income.
In the reporting period, expenses of EUR 44.1 m (previous year:
expenses of EUR 18.4 m) from currency hedges and derivative
financial instruments used to hedge the impact of exposure to fuel
price risks was recognised in cost of sales. Interest rate hedges
result in expenses of EUR 17.4 m (previous year: expenses of EUR
1.4 m), carried in net interest income. Income of EUR 1.0 m
(previous year: expenses of EUR 1.3 m) was recognised for the
ineffective portion of cash flow hedges.
Fair values of derivative financial instruments
The fair values of derivative financial instruments generally
correspond to the market value. The market price determined for all
derivative financial instruments is the price that would be
received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement
date. A description of the determination of the fair values of
derivative financial instruments is provided with the
classification of financial instruments measured at fair value.
Positive and negative fair values of derivative financial instruments shown as receivables or liabilities
30 Sep 2023
EUR million Receivables Liabilities FV changes to determine Nominal
ineffective portions volume
Cash flow hedges for
currency risks 102.9 24.4 78.5 6,352.5
fuel price risks 133.5 1.5 132.0 805.1
interest rate risks - - - -
Hedging 236.4 25.9 210.5 7,157.6
Other derivative financial instruments 32.1 11.1 - 3,402.5
Total 268.5 37.0 210.5 10,560.1
Positive and negative fair values of derivative financial instruments shown as receivables or liabilities
30 Sep 2022
EUR million Receivables Liabilities FV changes to determine Nominal
ineffective portions volume
Cash flow hedges for
currency risks 124.4 2.8 121.6 2,537.9
fuel price risks - 24.2 - 24.2 165.2
interest rate risks - - - -
Hedging 124.4 27.0 97.4 2,703.1
Other derivative financial instruments 134.7 33.7 - 3,796.7
Total 259.1 60.7 97.4 6,499.8
Financial instruments which are entered into in order to hedge a
risk position according to operational criteria but do not meet the
criteria of IAS 39 to qualify for hedge accounting are shown as
other derivative financial instruments. They include foreign
currency transactions entered into in order to hedge against
foreign exchange-exposure to changes in the value of balance sheet
items and foreign exchange fluctuations from future expenses in
tourism.
Financial instruments - Additional disclosures
Carrying amounts and fair values
Where financial instruments are listed in an active market, e.
g. shares held and bonds issued, the fair value or market value is
the respective quotation in this market at the balance sheet date.
For over-the-counter bonds, debt components of bonds with warrants
and convertible bonds, liabilities to banks, promissory notes and
other non-current financial liabilities, the fair value is
determined as the present value of future cash flows, taking
account of yield curves and the respective credit spread, which
depends on the credit rating.
In financial year 2023, the fair values of other current
receivables and current liabilities to banks were determined in
line with the past financial year, taking into account yield curves
and the respective credit risk premium (credit spread) based on
credit rating. As a result, the assumption that the carrying amount
approximately corresponds to the fair value due to the short
remaining term has been adjusted to the current market
conditions.
The fair values of non-current trade receivables and for parts
of current other receivables and current other financial assets as
well as cash and cash equivalents, current other financial
liabilities and trade payables correspond to the present values of
the cash flows associated with the assets, taking account of
current interest parameters which reflect market and
counterparty-related changes in terms and expectations. In the case
of cash and cash equivalents, current trade receivables, other
financial assets, current trade payables and other financial
liabilities the carrying amount approximates the fair value due to
the short remaining term.
The table below shows the reconciliation of the balance sheet
items to the financial instrument categories by carrying amount and
fair value of the financial instruments.
Carrying amounts and fair values according to classes and measurement categories according to IFRS 9 as at 30 Sep 2023
Category according to IFRS 9
Fair value Fair
At Fair value with no with no value Fair value
EUR million Carrying amortised effect on profit and loss effect on through of
amount cost without recycling profit and profit financial
loss with and loss instruments
recycling
Assets
Trade receivables and other
receivables
thereof instruments within the 1,161.0 1,122.6 - - 38.9 1,153.0
scope of IFRS 9
thereof instruments within the 4.1 - - - - 4.4
scope of IFRS 16
Derivative financial
instruments
Hedging transactions 236.4 - - 236.4 - 236.4
Other derivative financial 32.1 - - - 32.1 32.1
instruments
Other financial assets 59.4 48.6 9.9 - 0.9 57.3
Cash and cash equivalents 2,060.3 1,588.3 - - 472.2 2,060.5
Liabilities
Financial liabilities 1,297.0 1,297.0 - - - 1,120.1
Trade payables 3,373.7 3,374.7 - - - 3,374.7
Derivative financial
instruments
Hedging transactions 25.9 - - 25.9 - 25.9
Other derivative financial 11.1 - - - 11.1 11.1
instruments
Other financial liabilities 124.4 124.4 - - - 124.4
Carrying amounts and fair values according to classes and measurement categories according to IFRS 9 as at 30 Sep 2022
Category according to IFRS 9
Fair value Fair
At Fair value with no with no value Fair value
EUR million Carrying amortised effect on profit and loss effect on through of
amount cost without recycling profit and profit financial
loss with and loss instruments
recycling
Assets
Trade receivables and other
receivables
thereof instruments within the 1,133.8 1,027.3 - - 106.5 1,124.5
scope of IFRS 9
thereof instruments within the 9.6 - - - - 9.9
scope of IFRS 16
Derivative financial
instruments
Hedging transactions 124.4 - - 124.4 - 124.4
Other derivative financial 134.7 - - - 134.7 134.7
instruments
Other financial assets 96.4 85.9 9.6 - 0.9 90.5
Cash and cash equivalents 1,736.9 1,736.9 - - - 1,736.9
Liabilities
Financial liabilities 2,051.3 2,051.3 - - - 1,656.7
Trade payables 3,316.5 3,316.5 - - - 3,316.5
Derivative financial
instruments
Hedging transactions 27.0 - - 27.0 - 27.0
Other derivative financial 33.7 - - - 33.7 33.7
instruments
Other financial liabilities 177.4 177.4 - - - 177.4
The amounts shown in the column 'carrying amount' (as shown in
the balance sheet) in the tables above can differ from those in the
other columns of a particular row since the latter include all
financial instruments. That is the latter columns include financial
instruments which are part of disposal groups according to IFRS 5.
In the balance sheet, financial instruments, which are part of a
disposal group, are shown as separate items. If such financial
instruments are included, further details on these financial
instruments are explained in the sections 'Assets held for sale'
and 'Liabilities related to assets held.
The instruments measured at fair value through other
comprehensive income within the other financial assets class are
investments in companies based on medium to long-term strategic
objectives. Recording all short-term fluctuations in the fair value
in the income statement would not be in line with TUI Group's
strategy; these equity instruments were therefore designated as
fair value through OCI.
Aggregation according to measurement categories under IFRS 9 as at 30 Sep 2023
Carrying amount of Fair Value
EUR million financial
instruments Total
Financial assets
at amortised cost 2,759.5 3,221.1
at fair value - recognised directly in equity without recycling 9.9 9.9
at fair value - through profit and loss 544.1 544.1
Financial liabilities
at amortised cost 4,796.1 4,619.2
at fair value - through profit and loss 11.1 11.1
Aggregation according to measurement categories under IFRS 9 as at 30 Sep 2022
Carrying amount of Fair Value
EUR million financial
instruments
Total
Financial assets
at amortised cost 2,850.1 2,834.9
at fair value - recognised directly in equity without recycling 9.6 9.6
at fair value - through profit and loss 242.1 242.1
Financial liabilities
at amortised cost 5,545.2 5,150.6
at fair value - through profit and loss 33.7 33.7
Fair value measurement
The table below presents the fair values of recurring,
non-recurring and other financial instruments measured at fair
value in line with the underlying measurement level. The individual
measurement levels have been defined as follows in line with the
inputs:
-- Level 1: (unadjusted) quoted prices in active markets for
identical assets or liabilities.
-- Level 2: inputs for the measurement other than quoted market
prices included within Level 1 that areobservable in the market for
the asset or liability, either directly (as quoted prices) or
indirectly (derivablefrom quoted prices).
-- Level 3: inputs for the measurement of the asset or liability
not based on observable market data.
Hierarchy of financial instruments measured at fair value as at 30 Sep
2023
Fair value hierarchy
EUR million Total Level 1 Level 2 Level 3
Assets
Other receivables 38.9 - - 38.9
Other financial assets 10.8 - - 10.8
Derivative financial instruments
Hedging transactions 236.4 - 236.4 -
Other derivative financial instruments 32.1 - 32.1 -
Cash and cash equivalents 472.2 472.2 - -
Liabilities
Derivative financial instruments
Hedging transactions 25.9 - 25.9 -
Other derivative financial instruments 11.1 - 11.1 -
Hierarchy of financial instruments measured at fair value as at 30 Sep
2022
Fair value hierarchy
EUR million Total Level 1 Level 2 Level 3
Assets
Other receivables 106.5 - - 106.5
Other financial assets 10.5 - - 10.5
Derivative financial instruments
Hedging transactions 124.4 - 124.4 -
Other derivative financial instruments 134.7 - 134.7 -
Liabilities
Derivative financial instruments
Hedging transactions 27.0 - 27.0 -
Other derivative financial instruments 33.7 - 33.7 -
At the end of every reporting period, TUI Group checks whether
there are any reasons for reclassification to or from one of the
measurement levels. Financial assets and financial liabilities are
generally transferred out of Level 1 into Level 2 if the liquidity
and trading activity no longer indicate an active market. The
opposite situation applies to potential transfers out of Level 2
into Level 1. In the reporting period, there were no transfers
between Level 1 and Level 2.
Reclassifications from Level 3 to Level 2 or Level 1 are made if
observable market price quotations become available for the asset
or liability concerned. In the reporting period there were no other
transfers from or to Level 3. TUI Group records transfers from or
to Level 3 at the date of the obligating event or occasion
triggering the transfer.
Level 1 Financial instruments
The fair value of financial instruments for which an active
market exists is based on quoted prices at the reporting date. An
active market exists if quoted prices are readily and regularly
available from an exchange, dealer, broker, pricing service or
regulatory agency and these prices represent actual and regularly
occurring market transactions on an arm's length basis. These
financial instruments are classified as Level 1. The fair values
correspond to the nominal amounts multiplied by the quoted prices
at the reporting date. At 30 September 2023 Level 1 financial
instruments only include shares in money market funds measured at
fair value.
Level 2 Financial instruments
The fair values of financial instruments not traded in an active
market, e. g., over-the-counter (OTC) derivatives, are determined
by means of valuation techniques. These valuation techniques make
maximum use of observable market data and minimise the use of
group-specific assumptions. If all essential inputs for the
determination of the fair value of an instrument are observable,
the instrument is classified as Level 2.
If one or several key inputs are not based on observable market
data, the instrument is classified as Level 3.
The following specific valuation techniques are used to measure
financial instruments:
-- For over-the-counter bonds, debt components of warrant and
convertible bonds, liabilities to banks, promissory notes and other
non-current financial liabilities as well as for current other
receivables, currentfinancial liabilities and non-current trade and
other receivables, the fair value is determined as the presentvalue
of future cash flows, taking account of observable yield curves and
the respective credit spread, whichdepends on the credit
rating.
-- The fair value of over-the-counter derivatives is determined
by means of appropriate calculation methods,e. g., by discounting
the expected future cash flows. The forward prices of forward
transactions are based on thespot or cash prices, taking account of
forward premiums and discounts. The fair values of optional hedges
arecalculated on the basis of option pricing models. The fair
values determined on the basis of the group's ownsystems are
periodically compared with fair value confirmations of the external
counterparties.
-- Other valuation techniques, e. g., discounting future cash
flows, are used to determine the fair valuesof other financial
instruments.
Level 3 Financial instruments
The table below presents the fair values of the financial
instruments measured at fair value on a recurring basis, classified
as Level 3.
Financial assets measured at fair value in Level 3
EUR million Other receivables Other financial
IFRS 9 assets IFRS 9
Balance as at 1 Oct 2021 108.1 12.3
Disposals - 15.0 -
Total gains or losses for the period 13.4 - 1.4
recognised through profit and loss 13.4 - 0.1
recognised in other comprehensive income - - 1.3
Foreign currency effects - - 0.4
Balance as at 30 Sep 2022 106.5 10.5
Balance as at 1 Oct 2022 106.5 10.5
Additions - 0.1
acquisition - 0.1
Disposals - 70.6 - 24.0
sale - - 24.0
payment - 70.6 -
Total gains or losses for the period 3.0 23.8
recognised through profit and loss 3.0 -
recognised in other comprehensive income - 23.8
Foreign currency effects - 0.4
Balance as at 30 Sep 2023 38.9 10.8
Evaluation process
The fair value of financial instruments in Level 3 has been
determined by TUI Group's financial department using the discounted
cash flow method. This involves the market data and parameters
required for measurement being compiled or validated.
Non-observable input parameters are reviewed on the basis of
internally available information and updated if necessary.
In principle, the unobservable input parameters relate to the
following parameters; the (estimated) EBITDA margin is in a range
between - 5.9 % and 34.2 % (previous year 8.3 % and 24.0 %). The
constant growth rate is 1 % (previous year 1 %). The weighted
average cost of capital (WACC) is in a range between 11.0 %
(previous year 9.5 % - 11.3 %). Due to materiality, no detailed
figures have been provided. With the exception of the WACC, there
is a positive correlation between the input factors and the fair
value.
The increase in the fair values of the financial instruments in
Level 3 resulted mainly from revaluation effects of EUR 23.8 m and
the sale of the shares in Peakwork AG of EUR 24.0 m.
Financial instruments classified as Other financial assets
include shares in corporations. The total fair value of these
financial investments at 30 September 2023 is EUR 9.9 m (previous
year EUR 9.6 m). In the year under review, there were no disposals
(previous year EUR 0.0 m) of shares in corporations as part of the
initial consolidation which were measured at fair value, as part of
their first consolidation. None of these strategic financial
investments were sold in the completed financial year. Dividend
payments of EUR 0.1 m (previous year EUR 0.3 m) resulted from these
financial investments.
At 30 September 2023, other receivables in accordance with IFRS
9 in Level 3 include a carrying amount of EUR 38.9 m (previous year
EUR 106.5 m) for a variable purchase price receivable from the sale
of Riu Hotels S. A. in the prior year, measured as a financial
instrument in the category FVTPL. The fair value is determined
using a probability calculation for the future gross operating
profit, taking account of contractual entitlements to an additional
purchase price demand and an appropriate risk-adjusted discount
rate (4.25 % previous year 1.99 % until 2.87 %). Gross operating
profit is defined as total revenue minus operating expenses. The
range of potential purchase price payments varies due to different
expectations of target achievement between EUR 0 and EUR 39.7 m
(corresponding to a target achievement of < 90 % to max. 105 %).
The hotels concerned to deliver already reached around of 105.5 %
in August 2023. Therefore, the variable purchase price receivable
is set at the maximum level of EUR 39.7 m.
A sensitivity analysis shows that an increase in the hotels'
gross operating profit of 10 % (regarding calendar year 2023) would
not result in a change in the present value of the additional
purchase price receivable (previous year EUR 2.0 m), while a
reduction in gross operating profit of 10 % would result in a
change in the present value of around EUR - 22.0 m (previous year
EUR - 24.7 m). An interest rate shift of + / - 100 basis points
would alter the present value of the purchase price receivable by
around EUR 0.2 m (previous year EUR 0.5 m).
Effects on results
The effects of remeasuring the financial assets carried at fair
value through OCI as well as the effective portions of changes in
fair values of derivatives designated as cash flow hedges are
listed in the statement of changes in equity.
The net results of the financial instruments by measurement
category according to IFRS 9 are as follows:
Net results of financial instruments
2023
EUR million from interest other net result
net results
Financial assets 39.6 - 49.2 - 9.6
at amortised cost 35.4 - 48.7 - 13.3
at fair value through profit or loss 4.2 - 0.5 3.7
Financial liabilities - 275.3 - 158.9 - 434.2
at amortised cost - 229.3 - 119.7 - 349.0
at fair value through profit or loss - 46.0 - 39.2 - 85.2
Total - 235.7 - 208.1 - 443.8
Net results of financial instruments
2022
EUR million from interest other net result
net results
Financial assets 1.4 202.9 204.3
at amortised cost 1.4 40.1 41.5
at fair value through profit or loss - 162.8 162.8
Financial liabilities - 256.7 - 1.7 - 258.4
at amortised cost - 256.7 - 1.6 - 258.3
at fair value through profit or loss - - 0.1 - 0.1
Total - 255.3 201.2 - 54.1
Financial assets at amortised cost include expenses of EUR 58.5
m (previous year EUR 45.4 m), arising from credit card costs
incurred when settling receivables. In addition, the financial
assets at amortised cost include expenses from bank fees amounting
to EUR 5.3 m (previous year EUR 5.2 m). For financial liabilities
at amortised cost, expenses from bank fees amounted to EUR 4.1 m
(previous year EUR 4.5 m).
Netting
Offsetting of financial assets
Financial assets and
liabilities not set off in
the balance sheet
Gross amounts of Gross amounts of Net amounts of Financial Collateral Net
EUR million financial financial financial assets set off, liabilities received amount
assets liabilities set presented in the
off balance sheet
Financial assets
as at 30 Sep 2023
Derivative 268.5 - 268.5 37.0 - 231.5
financial assets
Cash and cash 2,075.4 15.1 2,060.3 - - 2,060.3
equivalents
Financial assets
as at 30 Sep 2022
Derivative 259.1 - 259.1 32.9 - 226.2
financial assets
Cash and cash 1,859.7 122.8 1,736.9 - - 1,736.9
equivalents
Offsetting of financial liabilities
Financial assets and
liabilities not set off
in the balance sheet
Gross amounts Gross amounts Net amounts of Financial Collateral Net
EUR million of financial of financial financial liabilities set off, assets granted amount
liabilities assets set presented in the balance sheet
off
Financial liabilities
as at 30 Sep 2023
Derivative financial 37.0 - 37.0 37.0 - -
liabilities
Financial liabilities 1,312.1 15.1 1,297.0 - - 1,297.0
Financial liabilities
as at 30 Sep 2022
Derivative financial 60.7 - 60.7 32.9 - 27.8
liabilities
Financial liabilities 2,174.1 122.8 2,051.3 - - 2,051.3
Financial assets and financial liabilities are only netted in
the balance sheet if a legally enforceable right to netting exists
and the Company concerned intends to settle on a net basis.
The contracts for financial instruments are based on
standardised master agreements for financial derivatives (including
ISDA Master Agreement, German master agreement for financial
derivatives), creating a conditional right to netting contingent on
defined future events. Under the contractual agreements all
derivatives contracted with the corresponding counterparty with
positive or negative fair values are netted in that case, resulting
in a net receivable or payable in the amount of the balance. As
this conditional right to netting is not enforceable in the course
of ordinary business transactions and thus the criteria for netting
are not met, the derivative financial assets and liabilities are
carried at their gross amounts in the balance sheet at the
reporting date.
Financial assets and liabilities in the framework of the cash
pooling scheme are shown on a net basis if there is a right to
netting in ordinary business transactions and TUI intends to settle
on a net basis. These financial instruments are included in the
balance sheet items in the tables shown above. The gross amount of
these netted cash and cash equivalents is EUR 181.9 m as at 30
September 2023 (previous year EUR 391.1 m), while the gross amount
of the netted financial liabilities is EUR 15.1 m as at 30
September 2023 (previous year EUR 122.8 m).
(42) Capital management
TUI Group's capital management ensures that our goals and
strategies can be achieved in the interest of our share- / bond-
and credit-holders as well as other stakeholders. The primary
objectives of the Group are as follows:
-- Ensuring sufficient liquidity for the Group
-- Profitable growth and a sustainable increase in TUI Group's
value
-- Strengthening our cash generation allowing to invest, pay
dividends and strengthen the balance sheet
-- Maintaining sufficient debt capacity and an at least
unchanged credit rating
The financing measures carried out in the year under review are
described in detail in the section on Going concern reporting in
accordance with the UK Corporate Governance Code, additional
information can be found on page 188 and in the section on
Financial instruments, page 249 in the Notes.
Management variables used in capital management to measure and
control the above objectives are Return On Invested Capital (ROIC)
and the gross leverage ratio, presented in the table below.
From a Group perspective, invested capital is derived from
liabilities, comprising equity (including non-controlling
interests) and the balance of interest-bearing liabilities and
interest-bearing assets with an adjustment for the seasonality of
the Group's net financial position. The cumulative amortisations of
purchase price allocations are then added to the invested
capital.
TUI Group calculates the gross leverage ratio as the ratio of
gross financial debt + lease liabilities + recognised obligations
from defined benefit pension plans to EBITDA. Due to the lower
gross financial debt and the improved EBITDA, the gross leverage
ratio improved in the 2023 financial year to a value of 2.6x
(previous year 4.7x). In the past financial year, we achieved our
previous financial stability target of a gross leverage ratio with
a coverage ratio below 3.0x at 2.6x.
Key figures of capital risk management
EUR million 2023 2022
Ø Invested Capital 5,115.1 5,457.8
Underlying EBIT 977.2 408.7
ROIC 19.1 % 7.5 %
Financial liabilities 1,297.0 2,051.3
Lease liabilities 2,918.1 3,207.5
Defined benefit obligation recognised on the balance sheet 571.9 438.0
EBITDA 1,858.5 1,203.3
Gross Leverage Ratio 2.6 4.7
From financial year 2024 onwards, we define the net-leverage
ratio along the following basic lines:
Net Leverage Ratio
EUR million 2023 2022
Financial liabilities 1,297.0 2,051.3
plus Lease liabilities 2,918.1 3,207.5
less Cash and cash equivalents 2,060.3 1,736.9
less Other current financial assets 48.6 85.8
Net Debt 2,106.2 3,436.1
EBITDA (underlying) 1,775.3 1,224.6
Net Leverage Ratio 1.2 2.8
Due to lower net debt and the improvement in our EBITDA
(underlying), our net-leverage ratio improved to 1.2x in the
financial year 2023 (previous year 2.8x). We are aiming for a
net-leverage ratio of strongly less than 1.0x in the medium
term.
Reconciliation to underlying EBITDA
EUR million 2023 2022 Var. %
EBIT 999.3 320.0 + 212.3
Amortisation and impairment (+) / reversals (-) of other intangible assets and depreciation and 859.1 883.4 - 2.7
impairment (+) / reversals (-) of property, plants and equipment and right of use assets
EBITDA 1,858.5 1,203.3 + 54.4
Adjustments - 83.2 21.3 n. a.
EBITDA (underlying) 1,775.3 1,224.6 + 45.0
The items recognised in the reconciliation of EBITDA to adjusted
EBITDA correspond to the items adjusted in EBIT without taking into
account the impairments, depreciation / amortization and reversals
of EUR 61.1 m (previous year EUR 67.5 m) included therein.
TUI Group's financial and liquidity management for all Group
subsidiaries is centrally operated by TUI AG, which acts as the
Group's internal bank. Financing and refinancing requirements,
derived from the multi-year finance budget, are satisfied by the
timely conclusion of appropriate financing instruments. The
short-term liquidity reserve is safeguarded by syndicated credit
facilities, bilateral bank loans and liquid funds. Moreover,
through intra-Group cash pooling the cash surpluses of individual
Group companies are used to finance the cash requirements of other
Group companies.
Notes to the Cash Flow Statement
The cash flow statement shows the flow of cash and cash
equivalents on the basis of a separate presentation of cash inflows
and outflows from operating, investing and financing activities.
The effects of changes in the group of consolidated companies and
of foreign currency translation are eliminated.
In the period under review, cash and cash equivalents increased
by EUR 323.6 m to EUR 2,060.5 m.
(43) Cash inflow / cash outflow from operating activities
Based on the Group result after tax, the cash flow from
operating activities is derived using the indirect method. In the
completed financial year, the cash inflow from operating activities
totalled EUR 1,637.3 m (previous year EUR 2,077.8 m). This amount
includes interest payments received of EUR 54.9 m (previous year
EUR 12.4 m) and dividends of EUR 24.1 m from companies measured at
equity (previous year EUR 0.2 m). Income tax payments resulted in a
cash outflow of EUR 106.9 m (previous year EUR 131.4 m).
(44) Cash inflow / cash outflow from investing activities
In financial year 2023, the cash outflow from investing
activities totalled EUR 492.2 m (previous year EUR 308.2 m). This
amount includes a cash outflow for capital expenditure related to
property, plant and equipment and intangible assets of EUR 666.2 m.
The Group recorded a cash inflow of EUR 142.9 m from the sale of
property, plant and equipment and intangible assets. TUI received
EUR 70.7 m from the earn-out payment in connection with sale of the
stakes in Riu Hotels S. A. and EUR 3.0 m from the sale of Karisma
Hotels Caribbean S. A., effected in financial year 2021. EUR 24.0 m
was received from the sale of the shares in Peakwork AG and EUR
16.6 m from a capital reduction in Midnight International Holdings.
The TUI Group contributed EUR 73.5 m to the capital increase of Pep
Toni Hotels and EUR 9.9 m to the capital increase of the TUI Global
Hospitality Fund. The sale of money market funds generated EUR 2.1
m, EUR 0.7 m was spent on the purchase.
(45) Cash inflow / cash outflow from financing activities
The cash outflow from financing activities totalled EUR 834.6 m
(previous year EUR 1,630.9 m).
TUI AG received EUR 1,760.9 m from the equity increase carried
out in April 2023. An amount of EUR 682.4 m was used to repurchase
own equity instruments from the Economic Stabilisation Fund. In the
completed financial year, TUI AG reduced its syndicated credit
facility by EUR 561.2 m. EUR 13.5 m was spent to extend the
syndicated credit facility. The promissory note placed in 2018 was
reduced by EUR 183.0 m as planned. The remaining portion of the
bond with warrants issued to the Economic Stabilisation Fund in
2020 in the amount of EUR 58.7 m was repaid. An amount of EUR 739.9
m went towards repaying financial liabilities, including EUR 595.1
m for lease liabilities. TUI Group companies raised EUR 217.8 m
from taking out loans. EUR 435.6 m was used to pay interest and EUR
120.3 m to pay for dividends to minority shareholders. TUI AG paid
EUR 16.8 m for the coupon for Silent Participation I of the
Economic Stabilisation Fund, shown as a dividend.
(46) Development of cash and cash equivalents
Cash and cash equivalents comprise all liquid funds, i. e. cash
in hand, bank balances and cheques.
Cash and cash equivalents increased by EUR 13.1 m (previous year
EUR 12.2 m) due to foreign exchange effects.
Other Notes
(47) Significant events after balance sheet date
In October 2023 TUI sold its shares in WOT Hotels Adriatic Asset
Company d. o. o., in Raiffeisen-Tour RT-Reisen GmbH and in Club
Hotel CV, S. A. For further details, please refer to the section
,Assets held for sale'.
In October 2023 TUI signed sale and lease back agreements for
six new Boeing 737 MAX-8 for the aggregate sum of around EUR 278 m.
The aircrafts will be delivered in the course of the financial year
2024. The lifetime lease obligations amount to around EUR 210 m.
The impact on right of use assets and lease liabilities will depend
on the interest rates on the measurement dates.
(48) Services of the auditors of the consolidated financial
statements
TUI AG's consolidated financial statements have been audited by
Deloitte GmbH Wirtschaftsprüfungsgesellschaft. Since financial year
2022, Annika Deutsch has been the auditor in charge. Total expenses
for the services provided by the auditors of the consolidated
financial statements in financial year 2023 break down as
follows:
Services of the auditors of the consolidated financial statements
EUR million 2023 2022
Audit fees for TUI AG and subsidiaries in Germany 3.7 3.4
Audit fees 3.7 3.4
Review of interim financial statements 0.3 0.4
Other certification services (mainly in connection with comfort letters) 0.8 0.6
Other certification services 1.1 1.0
Total 4.8 4.4
(49) Remuneration of Executive and Supervisory Board members
according to § 314 HGB
In the completed financial year, the remuneration granted to
active Executive Board members totalled EUR 10.1 m (previous year
EUR 6.4 m), and that of the Supervisory Board members totalled EUR
3.1 m (previous year EUR 3.2 m). The remuneration granted to the
former members of the Executive Board members in the financial year
totalled EUR 3.0 m (previous year EUR 0.0 m). The aforementioned
remuneration of the Executive Board members includes a tranche of
the long term incentive plan of EUR 1.8 m (previous year EUR 2.0
m), which represents the fair value at the time of granting in
relation to a number of 679,328 phantom shares granted in the 2023
financial year (previous year 252,094, adjusted for the capital
reduction and capital increase carried out in the financial year).
This includes EUR - 0.6 m in the financial year in connection with
the departure of Friedrich Joussen in the previous year, whose
service agreement runs until the end of the 2024 financial
year.
Pension payments for former Executive Board members or their
surviving dependants totalled EUR 6.4 m (previous year EUR 6.2) in
the completed financial year. Pension obligations according to IAS
19 for former Executive Board members and their surviving
dependants amounted to EUR 59.1 m (previous year EUR 63.0 m) at the
balance sheet date.
(50) Use of exemption provision
The following German subsidiaries fully included in
consolidation made use of the exemption provision in accordance
with section 264 (3) of the German Commercial Code (HGB) in
financial year 2023:
Use of exemption provisions
DEFAG Beteiligungsverwaltungs GmbH I, Hanover TUI Beteiligungs GmbH, Hanover
DEFAG Beteiligungsverwaltungs GmbH III, Hanover TUI BLUE DE GmbH, Hanover
FIRST Travel GmbH, Hanover TUI Business Services GmbH, Hanover
Leibniz-Service GmbH, Hanover TUI Customer Operations GmbH, Hanover
l'tur GmbH, Rastatt TUI Deutschland GmbH, Hanover
Preussag Beteiligungsverwaltungs GmbH IX, Hanover TUI Group Services GmbH, Hanover
Robinson Club GmbH, Hanover TUI Hotel Betriebsgesellschaft mbH, Hanover
TICS GmbH Touristische Internet und Call Center Services, Rastatt TUI Immobilien Services GmbH, Hanover
TLT Urlaubsreisen GmbH, Hanover TUI InfoTec GmbH, Hanover
TUI 4 U GmbH, Bremen TUI Insurance & Financial GmbH, Hanover
TUI Airline Service GmbH, Hanover TUI Leisure Travel Service GmbH, Neuss
TUI Asset Management and Advisory GmbH, Hanover TUIfly GmbH, Langenhagen
TUI Aviation GmbH, Hanover TUIfly Vermarktungs GmbH, Hanover
TUI Aviation Holding GmbH, Hanover
(51) Related parties
Apart from the subsidiaries included in the consolidated
financial statements, TUI AG, in carrying out its ordinary business
activities, maintains indirect or direct relationships with related
parties. Related parties controlled by TUI Group or over which TUI
Group is able to exercise a significant influence are shown in the
list of shareholdings (Note 53) published in the
Unternehmensregister (www.unternehmensregister.de). Apart from pure
equity investments, related parties also include companies that
supply goods or provide services for TUI Group companies.
Through the Economic Stabilisation Fund (ESF), the federal
German government indirectly acquired two silent participations and
a warrant bond, which combined form the stabilisation package for
TUI AG. With the payments of EUR 420 m made in connection with the
first silent participation on 25 January 2021, a number of terms
and conditions relating to the package entered into force, which
TUI AG had to comply with. Due to the scope of those terms and
conditions, ESF was able to exercise material control over TUI AG
and hence was a related party. On 27th April 2023 TUI AG bought the
warrant bond and terminated the remaining silent participation.
Thereupon the terms and conditions expired, disregarding some
information requirements. Accordingly, the ESF is no longer a
related party of TUI AG since this date. The return of the
stabilisation measures is a significant business transaction with
the ESF. Please refer to Note 27 'Silent participations' and Note
10 'Earnings per share' for details regarding the warrant bond.
Financial obligations from order commitments vis-à-vis related
parties primarily relate to the purchasing of hotel services.
Transactions with related parties
EUR million 2023 2022
Services provided by the Group
Management and consultancy services 8.1 3.9
Sales of tourism services 66.4 49.2
Other services 0.5 0.8
Total 75.0 53.9
Services received by the Group
Rental and leasing agreements 12.5 18.3
Purchase of hotel services 377.9 309.3
Distribution services 8.7 6.5
Other services 13.8 14.7
Total 412.9 348.8
Transactions with related parties
EUR million 2023 2022
Services provided by the Group to
non-consolidated Group companies 0.4 0.4
joint ventures 46.3 38.1
associates 28.3 15.4
Total 75.0 53.9
Services received by the Group from
non-consolidated Group companies 1.6 1.0
joint ventures 296.0 226.4
associates 115.3 121.4
Total 412.9 348.8
Transactions with joint ventures and associates are primarily
effected in the tourism business. They relate in particular to the
tourism services of the hotel companies used by the Group's tour
operators.
In accordance with IAS 24, all transactions with related parties
were executed on an arm's length basis as would be customary with
third parties outside the Group.
Receivables from related parties
EUR million 30 Sep 2023 30 Sep 2022
Trade receivables from
non-consolidated Group companies - 0.1
joint ventures 13.6 9.6
associates 0.6 0.5
Total 14.2 10.2
Advances and loans to
joint ventures 3.1 3.3
associates 4.6 26.9
Total 7.7 30.2
Payments on account to
joint ventures 7.4 15.1
Total 7.4 15.1
Other receivables from
non-consolidated Group companies 1.1 1.3
joint ventures 3.9 2.4
associates 0.3 1.6
Total 5.3 5.3
Payables due to related parties
EUR million 30 Sep 2023 30 Sep 2022
Trade payables due to
non-consolidated Group companies 0.1 0.1
joint ventures 45.3 40.5
associates 12.5 19.7
Total 57.9 60.3
Financial liabilities due to
non-consolidated Group companies 0.4 0.4
joint ventures 217.4 91.6
Total 217.8 92.0
Other liabilities due to
non-consolidated Group companies 4.8 4.5
joint ventures 15.6 15.8
associates 6.0 7.2
key management personnel 6.8 3.0
Total 33.2 30.5
Financial liabilities to joint ventures included liabilities
from leases of EUR 217.0 m (previous year EUR 91.2 m).
The share of result of associates and joint ventures is shown
separately in segment reporting.
Following the capital increase carried out in the financial year
under review, Mr Alexey Mordashov holds 10.87 % of the shares in
TUI AG. On 28 February 2022, he had been added to the list of
natural and legal persons affected by the EU sanctions. As a result
of these sanctions, he does not have access to the shares in TUI AG
controlled by him or to the voting rights and economic benefits
associated with them. Mr Mordashov resigned from TUI AG's
Supervisory Board on 2 March 2022 and is therefore no longer a
related party of TUI AG.
The Executive Board and the Supervisory Board are key management
personnel. They are therefore related parties in the meaning of IAS
24 whose compensation must be disclosed separately.
Remuneration of Executive and Supervisory Board
EUR million 2023 2022
Short-term benefits 10.9 7.6
Post-employment benefits 1.2 1.9 *
Share-based payment 2.3 1.1
Termination benefits - Share-based payment 0.1 1.4
Termination benefits - Other 1.4 3.0
Total 15.9 15.0
* Previous year adjusted
Post-employment benefits are transfers to or reversals of
pension provisions for Executive Board members active in the
reporting period. The expenses mentioned do not meet the definition
of remuneration for Executive and Supervisory Board members under
German accounting rules. The share-based payments are an offset
amount of expenses due to the addition to the provision and income
resulted from the reversal of the provision due to the valuation.
Termination benefits last year relate to provisions in connection
with the resignation of Frank Rosenberger, whose service agreement
will continue until 31 December 2023. The benefits in the previous
year relate to Friedrich Joussen, whose service agreement including
all related compensation components will continue until the end of
the 2024 financial year.
Pension provisions for active Executive Board members total EUR
11.8 m (previous year EUR 13.2 m) as at the balance sheet date. In
addition, provisions for active Executive Board members of EUR 4.8
m (previous year EUR 5.1 m) are recognised relating to the
long-term incentive programme.
(52) International Financial Reporting Standards (IFRS) not yet
applied
New standards endorsed by the EU, but applicable after 30 Sep 2023
Applicable Expected impact on
Standard from Amendments financial position
and performance
IFRS 17 establishes the principles for the accounting for insurance
IFRS 17 contracts and replaces IFRS 4. On 25 June 2020, the IASB published
Insurance 1 Jan 2023 Amendments to IFRS 17 and deferred the effective date of the Standard to 1 No material
Contracts January 2023. Amendments were also issued to address impacts.
challenges arising from the implementation of IFRS 17 that were identified
after it was published.
Amendments to The amendments to IAS 1 and IFRS Practice Statement 2 are to help
IAS 1 preparers in deciding which accounting and measurement methods to No material
Disclosure of 1 Jan 2023 disclose in their financial statements. The amendments require entities to impacts.
Accounting disclose their material accounting and measurement policy information
Policies instead of their significant accounting and measurement policies.
Amendments to The amendments to IAS 8 are to help entities to distinguish between
IAS 8 accounting policies and accounting estimates. The definition of a change
Definition of 1 Jan 2023 in accounting estimates is replaced with a new definition of accounting No material
Accounting estimates. It is clarified that a change in an accounting estimate that impacts.
Estimates results from new information or new developments is not the correction of
an error.
Amendments to
IFRS 17
Initial The amendment addresses implementation challenges in the presentation of
Application 1 Jan 2023 comparative information that were identified after IFRS 17 was No impact.
of IFRS 17 published.
and IFRS 9 -
Comparative
Information
Amendments to
IAS 12
Deferred tax The amendments clarify that deferred tax assets and liabilities have to be
related to formed when a transaction gives rise to equal amounts of deductible
Assets 1 Jan 2023 and taxable temporary differences at the same time. The initial No material
and recognition exemption, according to which deferred tax assets or impacts.
Liabilities liabilities are not recognised on initial recognition of an asset or a
arising from liability, does not apply to transactions of this type.
a
Single
Transaction
The following amendments and new standards have not yet been
endorsed by the European Union.
New standards and interpretations not yet endorsed by the EU and applicable after 30 Sep 2023
Applicable Expected impact on
Standard from Amendments financial position and
performance
The amendments to IAS 1 are intended to clarify the criteria
used to classify a liability as current or non-current. In
future, the classification
of liabilities as current or non-current will exclusively be
Amendments to IAS 1 based on 'rights' that are in existence at the end of the TUI will review the
Classification of 1 Jan 2024 reporting period. The amendments additionally include guidance impacts of this
Liabilities on the interpretation of the criterion 'right to defer amendment in due course.
as Current or settlement by at least twelve months' and clarify what We currently do not
Non-Current 'settlement' refers to. On 15 July 2020, the IASB had issued an expect to see any
amendment resulting in the deferral of the effective date to 1 material impacts.
January 2023. By the amendments to IAS 1 (Non-current
Liabilities with Covenants) issued on 31 October 2022, the
effective date of these amendments is deferred again to 1
January 2024.
Amendments to IFRS
16 The amendments clarify how a seller-lessee subsequently
Lease Liability in 1 Jan 2024 measures sale and leaseback transactions that satisfy the No material impacts.
a Sale and requirements in IFRS 15 to be accounted for as a sale.
Leaseback
The amendments to IAS 1 clarify that only covenants an entity
must comply with on or before the reporting period should TUI will review the
Amendments to IAS 1 affect the classification of the corresponding liability as impacts of this
Non-Current 1 Jan 2024 current or non-current. However, an entity is required to amendment in due course.
Liabilities disclose information in the notes We currently do not
with Covenants that enables users of financial statements to understand the expect to see any
risk that non-current liabilities with covenants could become material impacts.
repayable
within twelve months.
The amendments intend to increase the transparency of supplier TUI will review the
Amendments to IAS 7 finance arrangements and their effect on an entities impacts of this
and IFRS 7 1 Jan 2024 liabilities, cash flows amendment in due course.
Supplier Finance and exposure to liquidity risk. The amendments complement We currently do not
Arrangements existing disclosure requirements insofar that an entity shall expect to see any
provide additional qualitative and quantitative information impacts.
about finance arrangements with suppliers.
Amendments to IAS The amendments require an entity to apply a consistent approach
21 in assessing whether a currency is exchangeable into another
Lack of 1 Jan 2025 currency No material impacts.
Exchangeability and, if not, in determining the exchange rate to be used and
the required disclosures in the notes.
Consolidated Statement of Changes in Equity
Table continues on next page
Continued from previous page
(52) TUI Group Shareholdings
Company Country Capital share in
%
Consolidated companies
Tourism
Absolut Holding Limited, Qormi Malta 99.9
Advent Insurance PCC Limited (Absolut Cell), Qormi Malta 100
Africa Focus Tours Namibia (Proprietary) Limited, Windhoek Namibia 100
Antwun S.A., Clémency Luxembourg 100
ATC African Travel Concept Proprietary Limited, Cape Town South Africa 50.1
ATC-Meetings and Conferences Proprietary Limited, Cape Town South Africa 100
B.D.S Destination Services Tours, Cairo Egypt 100
B2B d.o.o., Dubrovnik Croatia 100
BU RIUSA II EOOD, Sofia Bulgaria 100
Cabotel-Hoteleria e Turismo Lda., Santiago Cape Verde 100
Cel Obert SL, Sant Joan de Caselles Andorra 100
Chaves Hotel & Investimentos S.A., Sal-Rei, Boa Vista Island Cape Verde 100
Citirama Ltd., Quatre Bornes Mauritius 100
Club Hotel CV SA, Santa Maria Cape Verde 100
Club Hôtel Management Tunisia SARL, Djerba Tunisia 100
Clubhotel Cala Serena S.A., Madrid Spain 100
Clubhotel IP S.A., Athens Greece 100
Clubhotel JD, S.A., Las Palmas Spain 100
Cruisetour AG, Zurich Switzerland 100
Daidalos Hotel- und Touristikunternehmen A.E., Athens Greece 89.8
Darecko S.A., Luxembourg Luxembourg 100
Destination Services Singapore Pte Limited, Singapore Singapore 100
Egyptian Germany Co. for Hotels Limited, Cairo Egypt 66.6
Elena SL, Palma de Mallorca Spain 100
ETA Turizm Yatirim ve Isletmeleri A.S., Ankara Turkiye 100
Evre Grup Turizm Yatirim A.S., Ankara Turkiye 100
Explorers Travel Club Limited, Luton United Kingdom 100
Faberest S.r.l., Verona Italy 100
First Choice (Turkey) Limited, Luton United Kingdom 100
First Choice Holiday Hypermarkets Limited, Luton United Kingdom 100
First Choice Holidays & Flights Limited, Luton United Kingdom 100
First Choice Land (Ireland) Limited, Dublin Ireland 100
First Choice Travel Shops Limited, Luton United Kingdom 100
FIRST Reisebüro Güttler GmbH & Co. KG, Dormagen Germany 75.1
FIRST Travel GmbH, Hanover Germany 100
Follow Coordinate Hotels Portugal Unipessoal Lda, Albufeira Portugal 100
Fritidsresor Tours & Travels India Pvt Ltd., Bardez, Goa India 100
GBH Turizm Sanayi Isletmecilik ve Ticaret A.S., Istanbul Turkiye 100
GEAFOND Número dos Fuerteventura S.A., Las Palmas, Spain 100
Gran Canaria
GEAFOND Número uno Lanzarote S.A., Las Palmas, Gran Canaria Spain 100
Gemma Limited, Unguja Tanzania 100
German Tur Turizm Ticaret A.S., Izmir Turkiye 100
Groupement Touristique International SAS, Lille France 100
Gulliver Travel d.o.o., Dubrovnik Croatia 100
Hannibal Tourisme et Culture SA, Tunis Tunisia 100
Hapag-Lloyd Reisebüro Hagen GmbH & Co. KG, Hanover Germany 100
Hellenic EFS Hotel Management E.P.E., Athens Greece 100
Holiday Center S.A., Cala Serena/Cala d'Or Spain 100
Holidays Services S.A., Agadir Morocco 100
Hoteli Kolocep d.d., Kolocep Croatia 100
Hoteli Zivogosce d.d., Zivogosce Croatia 100
Iberotel International A.S., Antalya Turkiye 100
Iberotel Otelcilik A.S., Istanbul Turkiye 100
Imperial Cruising Company SARL, Heliopolis-Cairo Egypt 90
Inter Hotel SARL, Tunis Tunisia 100
Intercruises Port Operations Spain SLU, Barcelona Spain 100
Intercruises Port Operations USA Inc., Wilmington DE United States 100
Intercruises Shoreside & Port Services Canada, Inc., Quebec Canada 100
Intercruises Shoreside & Port Services Pty Limited, Sydney Australia 100
Intercruises Shoreside & Port Services Sam, Monaco Monaco 100
Intercruises Shoreside & Port Services SARL, Paris France 100
Intercruises Shoreside & Port Services UK Limited, Luton United Kingdom 100
Intercruises Shoreside & Port Services, Inc., State of Delaware United States 100
Itaria Limited, Nicosia Cyprus 100
Jandia Playa S.A., Morro Jable/Fuerteventura Spain 100
Kurt Safari Proprietary Limited, White River - Mpumalanga South Africa 51
Kybele Turizm Yatirim San. Ve Tic. A.S., Istanbul Turkiye 100
Label Tour EURL, Levallois-Perret France 100
Le Passage to India Tours and Travels Pvt Ltd., New Delhi India 100
Lima Tours S.A.C., Lima Peru 100
Lodges & Mountain Hotels SARL, Courchevel France 100
l'tur GmbH, Rastatt Germany 100
L'TUR Suisse AG, Basel Switzerland 99.5
Lunn Poly Limited, Luton United Kingdom 100
Magic Hotels SA, Tunis Tunisia 100
MAGIC LIFE Assets GmbH, Vienna Austria 100
Magic Life Egypt for Hotels LLC, Sharm el Sheikh Egypt 100
Magic Tourism International S.A., Tunis Tunisia 100
Mai Khao Golden Land Company Limited, Phuket Thailand 100
Manahe Ltd., Quatre Bornes Mauritius 51
Marella Cruises Limited, Luton United Kingdom 100
Meetings & Events Spain S.L.U., Palma de Mallorca Spain 100
Musement S.p.A., Milan Italy 100
MX RIUSA II S.A. de C.V., Cabo San Lucas Mexico 100
Nazar Nordic AB, Malmo Sweden 100
Nouvelles Frontières Senegal S.R.L., Dakar Senegal 100
Nungwi Limited, Zanzibar Tanzania 100
Ocean College LLC, Sharm el Sheikh Egypt 100
Ocean Ventures for Hotels and Tourism Services SAE, Egypt 98
Sharm el Sheikh
Pacific World (Beijing) Travel Agency Co., Ltd., Beijing China 100
Pacific World (Shanghai) Travel Agency Co. Limited, Shanghai China 100
Pacific World Destination East Sdn. Bhd., Penang Malaysia 65
Pacific World Meetings & Events Hong Kong, Limited, Hongkong Hong Kong SAR 100
Pacific World Meetings & Events SAM, Monaco Monaco 100
Pacific World Meetings & Events Singapore Pte. Ltd., Singapore Singapore 100
Pacific World Meetings and Events France SARL, Nice France 100
Pacific World Travel Services Company Limited, Ho Chi Minh City Vietnam 90
Papirüs Otelcilik Yatirim Turizm Seyahat Insaat Ticaret A.S., Antalya Turkiye 100
Paradise Hotel Management Company LLC, Cairo Egypt 100
PATS N.V., Oostende Belgium 100
Promociones y Edificaciones Chiclana S.A., Palma de Mallorca Spain 100
PT Pacific World Nusantara, Bali Indonesia 100
RC Clubhotel Cyprus Limited, Limassol Cyprus 100
RCHM S.A.S., Agadir Morocco 100
Rideway Investments Limited, London United Kingdom 100
Riu Jamaicotel Ltd., Negril Jamaica 100
Riumauricio Ltd., Port Louis Mauritius 100
RIUSA II S.A., Palma de Mallorca* Spain 50
Riusa Lanka (PVT) Ltd., Ahungalla Sri Lanka 100
RIUSA NED B.V., Amsterdam Netherlands 100
Robinson Austria Clubhotel GmbH, Villach-Landskron Austria 100
Robinson Club GmbH, Hanover Germany 100
Robinson Club Italia S.p.A., Marina di Ugento Italy 100
Robinson Club Maldives Private Limited, Malé Maldives 100
Robinson Clubhotel Turizm Ltd. Sti., Istanbul Turkiye 100
Robinson Hoteles España S.A., Cala d'Or Spain 100
Robinson Hotels Portugal S.A., Vila Nova de Cacela Portugal 67
Robinson Otelcilik A.S., Istanbul Turkiye 100
Santa Maria Hotels SA, Santa Maria Cape Verde 100
SERAC Travel GmbH, Zermatt Switzerland 100
Skymead Leasing Limited, Luton United Kingdom 100
Société d'Exploitation du Paladien Marrakech SA, Marrakesh Morocco 100
Société d'Investissement Aérien S.A., Casablanca Morocco 100
Société d'investissement hotelier Almoravides S.A., Marrakesh Morocco 100
Société Marocaine pour le Developpement des Transports Touristiques S.A., Morocco 100
Agadir
Sons of South Sinai for Tourism Services and Supplies SAE, Sharm el Sheikh Egypt 84.1
Stella Polaris Creta A.E., Heraklion Greece 100
STIVA RII Ltd., Dublin Ireland 100
Summer Times Ltd., Quatre Bornes Mauritius 100
Summertime International Ltd., Quatre Bornes Mauritius 100
Sunshine Cruises Limited, Luton United Kingdom 100
Tantur Turizm Seyahat A.S., Istanbul Turkiye 100
Tec4Jets NV, Zaventem Belgium 100
Thomson Reisen GmbH, St. Johann Austria 100
Thomson Travel Group (Holdings) Limited, Luton United Kingdom 100
TICS GmbH Touristische Internet und Call Center Services, Rastatt Germany 100
TLT Reisebüro GmbH, Hanover Germany 100
TLT Urlaubsreisen GmbH, Hanover Germany 100
Travel Choice Limited, Luton United Kingdom 100
Travel Guide With Offline Maps B.V., Amsterdam Netherlands 100
TT Hotels Croatia d.o.o., Zagreb Croatia 100
TT Hotels Italia S.R.L., Rome Italy 100
TT Hotels Turkey Otel Hizmetleri Turizm ve ticaret A.S., Antalya Turkiye 100
TUI (Suisse) AG, Zurich Switzerland 100
TUI 4 U GmbH, Bremen Germany 100
TUI Airlines Belgium N.V., Oostende Belgium 100
TUI Airlines Nederland B.V., Rijswijk Netherlands 100
TUI Airways Limited, Luton United Kingdom 100
TUI Ambassador Tours Unipessoal Lda, Lisbon Portugal 100
TUI Asset Management and Advisory GmbH, Hanover Germany 100
TUI Austria Holding GmbH, Vienna Austria 100
TUI Belgium NV, Oostende Belgium 100
TUI Belgium Real Estate N.V., Brussels Belgium 100
TUI Belgium Retail N.V., Zaventem Belgium 100
TUI BLUE AT GmbH, Schladming Austria 100
TUI BLUE DE GmbH, Hanover Germany 100
TUI Blue Hotels L.L.C., Dubai United Arab Emirates 100
TUI Brasil Operadora e Agência de Viagens LTDA., Curitiba Brazil 100
TUI Bulgaria EOOD, Varna Bulgaria 100
TUI Chile Operador y Agencia de Viajes SpA, Santiago Chile 100
TUI China Travel CO. Ltd., Beijing China 75
TUI Curaçao N.V., Curaçao Country of Curaçao 100
TUI Customer Operations GmbH, Hanover Germany 100
TUI Cyprus Limited, Nicosia Cyprus 100
TUI Danmark A/S, Copenhagen Denmark 100
TUI Destination Experiences (Thailand) Limited, Bangkok* Thailand 49
TUI Destination Experiences Costa Rica SA, San José Costa Rica 100
TUI Destination Services Cyprus, Nicosia Cyprus 100
TUI Deutschland GmbH, Hanover Germany 100
TUI Dominicana SAS, Higuey Dominican Republic 100
TUI España Turismo SL, Palma de Mallorca Spain 100
TUI Finland OY AB, Helsinki Finland 100
TUI France SA, Levallois-Perret France 100
TUI Hellas Travel Tourism and Airlines A.E., Athens Greece 100
TUI Holding Spain S.L., Palma de Mallorca Spain 100
TUI Holidays Ireland Limited, Dublin Ireland 100
TUI Hotel Betriebsgesellschaft mbH, Hanover Germany 100
TUI India Private Limited, New Delhi India 100
TUI International Holiday (Malaysia) Sdn. Bhd., Kuala Lumpur Malaysia 100
TUI Ireland Limited, Luton United Kingdom 100
TUI Italia S.r.l., Sorrent Italy 100
TUI Italia S.r.l. "in liquidazione", Fidenza Italy 100
TUI Jamaica Limited, Montego Bay Jamaica 100
TUI LTE Viajes S.A de C.V, Mexico City Mexico 100
TUI Malta Limited, Pieta Malta 100
TUI Mexicana SA de CV, Mexico City Mexico 100
TUI Musement UK Holding Limited, Luton United Kingdom 100
TUI Nederland Holding N.V., Rijswijk Netherlands 100
TUI Nederland N.V., Rijswijk Netherlands 100
TUI Nordic Holding AB, Stockholm Sweden 100
TUI Norge AS, Stabekk Norway 100
TUI Northern Europe Limited, Luton United Kingdom 100
TUI Österreich GmbH, Vienna Austria 100
TUI Pension Scheme (UK) Limited, Luton United Kingdom 100
TUI Poland Dystrybucja Sp. z o.o., Warsaw Poland 100
TUI Poland Sp. z o.o., Warsaw Poland 100
TUI PORTUGAL - Agencia de Viagens e Turismo S.A., Faro Portugal 100
TUI Reisecenter Austria Business Travel GmbH, Vienna Austria 74.9
TUI Service AG, Altendorf Switzerland 100
TUI Spain, SLU, Madrid Spain 100
TUI Suisse Retail AG, Zurich Switzerland 100
TUI Sverige AB, Stockholm Sweden 100
TUI Technology NV, Zaventem Belgium 100
TUI Travel Distribution N.V., Oostende Belgium 100
TUI UK Italia Srl, Turin Italy 100
TUI UK Limited, Luton United Kingdom 100
TUI UK Retail Limited, Luton United Kingdom 100
TUI UK Transport Limited, Luton United Kingdom 100
TUIfly GmbH, Langenhagen Germany 100
TUIfly Nordic AB, Stockholm Sweden 100
TUIfly Vermarktungs GmbH, Hanover Germany 100
Tunisie Investment Services Holding S.A., Tunis Tunisia 100
Tunisie Voyages S.A., Tunis Tunisia 100
Tunisotel S.A.R.L., Tunis Tunisia 100
Turcotel Turizm A.S., Istanbul Turkiye 100
Turkuaz Insaat Turizm A.S., Ankara Turkiye 100
Ultramar Express Transport S.A., Palma de Mallorca Spain 100
Umbhaba Eco Lodge Proprietary Limited, Cape Town South Africa 85
WOT Hotels Adriatic Management d.o.o., Zagreb Croatia 51
Zanzibar Beach Village Limited, Zanzibar Tanzania 100
All other segments
Absolut Insurance Limited, St. Peter Port Guernsey 100
Canadian Pacific (UK) Limited, Luton United Kingdom 100
Cast Agencies Europe Limited, Luton United Kingdom 100
CP Ships (Bermuda) Ltd., Hamilton Bermuda 100
CP Ships (UK) Limited, Luton United Kingdom 100
DEFAG Beteiligungsverwaltungs GmbH I, Hanover Germany 100
DEFAG Beteiligungsverwaltungs GmbH III, Hanover Germany 100
First Choice Holidays Finance Limited, Luton United Kingdom 100
First Choice Holidays Limited, Luton United Kingdom 100
First Choice Olympic Limited, Luton United Kingdom 100
Jetset Group Holding (Brazil) Limited, Luton United Kingdom 100
Jetset Group Holding Limited, Luton United Kingdom 100
Leibniz-Service GmbH, Hanover Germany 100
Mala Pronta Viagens e Turismo Ltda., Curitiba Brazil 100
Manufacturer's Serial Number 852 Limited, Dublin Ireland 100
PM Peiner Maschinen GmbH, Hanover Germany 100
Preussag Beteiligungsverwaltungs GmbH IX, Hanover Germany 100
Sovereign Tour Operations Limited, Luton United Kingdom 100
Thomson Airways Trustee Limited, Luton United Kingdom 100
travel-Ba.Sys GmbH & Co KG, Mülheim an der Ruhr Germany 83.5
TUI Airline Service GmbH, Hanover Germany 100
TUI Aviation Asset Company Limited, Luton United Kingdom 100
TUI Aviation GmbH, Hanover Germany 100
TUI Aviation Holding GmbH, Hanover Germany 100
TUI Aviation Services Limited, Luton United Kingdom 100
TUI Beteiligungs GmbH, Hanover Germany 100
TUI Business Services GmbH, Hanover Germany 100
TUI Canada Holdings, Inc., Toronto Canada 100
TUI Global Business Services Tunisia S.A.R.L, Tunis Tunisia 100
TUI Group Fleet Finance Limited, Luton United Kingdom 100
TUI Group Services GmbH, Hanover Germany 100
TUI Group UK Healthcare Limited, Luton United Kingdom 100
TUI Group UK Trustee Limited, Luton United Kingdom 100
TUI Immobilien Services GmbH, Hanover Germany 100
TUI InfoTec GmbH, Hanover Germany 100
TUI Insurance & Financial GmbH, Hanover Germany 100
TUI Leisure Travel Service GmbH, Neuss Germany 100
TUI Technology Portugal Unipessoal, Lda., Matosinhos Portugal 100
TUI Travel Amber E&W LLP, Luton United Kingdom 100
TUI Travel Aviation Finance Limited, Luton United Kingdom 100
TUI Travel Common Investment Fund Trustee Limited, Luton United Kingdom 100
TUI Travel Group Management Services Limited, Luton United Kingdom 100
TUI Travel Group Solutions Limited, Luton United Kingdom 100
TUI Travel Holdings Limited, Luton United Kingdom 100
TUI Travel Limited, Luton United Kingdom 100
TUI Travel Overseas Holdings Limited, Luton United Kingdom 100
Non-consolidated Group companies
Tourism
"Schwerin Plus" Touristik-Service GmbH, Schwerin Germany 80
Airline Consultancy Services S.A.R.L., Casablanca Morocco 100
Ambassador Tours S.A., Barcelona Spain 100
Centro de Servicios Destination Management SA de CV, Cancun Mexico 100
FIRST Reisebüro Güttler Verwaltungs GmbH, Hanover Germany 75
Hapag-Lloyd Reisebüro Hagen Verwaltungs GmbH, Hanover Germany 100
Ikaros Travel A.E.(i.L.), Heraklion Greece 100
L'TUR SARL, Schiltigheim France 100
Lunn Poly (Jersey) Limited, St. Helier Jersey 100
N.S.E. Travel and Tourism A.E. (i.L.), Athens Greece 100
NEA Synora Hotels Limited (Hinitsa Beach), Porto Heli Argolide Greece 100
New Eden S.A., Marrakesh Morocco 100
Nouvelles Frontières Burkina Faso EURL, Ouagadougou Burkina Faso 100
Nouvelles Frontières Tereso EURL, Grand Bassam Ivory Coast 100
Nouvelles Frontières Togo S.R.L.(i.L), Lome Togo 99
Riusa Hotel Management FZC, Dubai United Arab Emirates 100
Société de Gestion du resort Al Baraka, Marrakesh Morocco 100
Trendturc Turizm Otelcilik ve Ticaret A.S., Istanbul Turkiye 100
TUI 4 U Poland sp.zo.o., Warsaw Poland 100
TUI d.o.o., Maribor Slovenia 100
TUI Magyarország Utazasi Iroda Kft., Budapest Hungary 100
TUI Reisecenter GmbH, Salzburg Austria 100
TUI ReiseCenter Slovensko s.r.o., Bratislava Slovakia (Slovak 100
Republic)
TUI Travel Cyprus Limited, Nicosia Cyprus 100
TUI Travel Tech Vietnam Limited, Ho Chi Minh City Vietnam 100
TUIFly Academy Brussels, Zaventem Belgium 100
VPM Antilles S.R.L., Levallois-Perret France 100
VPM SA, Levallois-Perret France 100
All other segments
Bergbau Goslar GmbH, Goslar Germany 100
travel-Ba.Sys Beteiligungs GmbH, Mülheim an der Ruhr Germany 83.5
Joint ventures and associates
Tourism
Abou Soma for Hotels S.A.E., Giza Egypt 16.7
Ahungalla Resorts Limited, Colombo Sri Lanka 40
Aitken Spence Travels (Private) Limited, Colombo Sri Lanka 50
ARP Africa Travel Limited, Harrow United Kingdom 25
Atlantica Hellas A.E., Rhodes Greece 50
Atlantica Hotels and Resorts Limited, Lemesos Cyprus 49.9
Bartu Turizm Yatirimlari Anonim Sirketi, Istanbul Turkiye 50
Clubhotel Kleinarl GmbH & Co KG, Flachau Austria 24
Daktari Travel & Tours Ltd., Limassol Cyprus 33.3
DER Reisecenter TUI GmbH, Dresden Germany 50
Diamondale Limited, Dublin Ireland 27
ENC for touristic Projects Company S.A.E., Sharm el Sheikh Egypt 50
Etapex, S.A., Agadir Morocco 35
Fanara Residence for Hotels S.A.E., Sharm el Sheikh Egypt 50
Gebeco Gesellschaft für internationale Begegnung und Cooperation mbH & Co. Germany 50
KG, Kiel
Grupotel dos S.A., Can Picafort Spain 50
Ha Minh Ngan Company Limited, Hanoi Vietnam 50
Holiday Travel (Israel) Limited, Airport City Israel 50
Hydrant Refuelling System NV, Brussels Belgium 25
InteRes Gesellschaft für Informationstechnologie mbH, Darmstadt Germany 25.2
Interyachting Limited, Limassol Cyprus 45
Jaz Hospitality Services DMCC, Dubai United Arab Emirates 50
Jaz Hotel Group S.A.E., Cairo Egypt 51
Kamarayat Nabq Company for Hotels S.A.E., Sharm el Sheikh Egypt 50
Midnight Canada Inc., Toronto Canada 49
Midnight International Holdings Limited, Toronto Canada 49
Pep Toni Hotels S.A., Palma Spain 49
Pollman's Tours and Safaris Limited, Mombasa Kenya 25
Raiffeisen-Tours RT-Reisen GmbH, Burghausen Germany 25.1
Ranger Safaris Ltd., Arusha Tanzania 25
Sharm El Maya Touristic Hotels Co. S.A.E., Cairo Egypt 50
Südwest Presse + Hapag-Lloyd Reisebüro GmbH & Co.KG, Ulm Germany 50
Sun Oasis for Hotels Company S.A.E., Hurghada Egypt 50
Teckcenter Reisebüro GmbH, Kirchheim unter Teck Germany 50
Tikida Bay S.A., Agadir Morocco 34
TIKIDA DUNES S.A., Agadir Morocco 30
Tikida Palmeraie S.A., Marrakesh Morocco 33.3
Travco Group Holding S.A.E., Cairo Egypt 50
TRAVELStar GmbH, Hanover Germany 50
TRAVELStar Touristik GmbH & Co. OHG, Vienna Austria 50
TUI Cruises GmbH, Hamburg Germany 50
TUI Global Hospitality Fund SCS, SICAF-RAIF, Grevenmacher Luxembourg 10
UK Hotel Holdings FZC L.L.C., Fujairah United Arab Emirates 50
Vitya Holding Co. Ltd., Takua, Phang Nga Province Thailand 47.5
WOT Hotels Adriatic Asset Company d.o.o., Tucepi Croatia 50
All other segments
.BOSYS SOFTWARE GMBH, Hamburg Germany 25.2
MSN 1359 GmbH, Hanover Germany 25
* Entrepreneurial management
* Entrepreneurial management
Responsibility Statement by Management
To the best of our knowledge, and in accordance with the
applicable reporting principles, the consolidated financial
statements give a true and fair view of the net assets, financial
position and results of operations of the Group, and the group
management report includes a fair review of the development and
performance of the business and the position of the Group, together
with a description of the principal opportunities and risks
associated with the expected development of the Group.
Hanover, 4 December 2023
The Executive Board
Sebastian Ebel David Burling Mathias Kiep
Peter Krueger Sybille Reiss
Independent Auditor's Report
To TUI AG, Berlin and Hanover / Germany
Report on the audit of the consolidated financial statements and
of the combined management report
Audit Opinions
We have audited the consolidated financial statements of TUI AG,
Berlin and Hanover / Germany, and its subsidiaries (the Group)
which comprise the consolidated statement of financial position as
at 30 September 2023, the consolidated statement of profit and loss
and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for
the financial year from 1 October 2022 to 30 September 2023, and
the notes to the consolidated financial statements, including a
summary of significant accounting policies. In addition, we have
audited the combined management report for the parent and the group
of TUI AG, Berlin and Hanover / Germany, for the financial year
from 1 October 2022 to 30 September 2023. In accordance with the
German legal requirements, we have not audited those parts of the
combined management report set out in the appendix to the auditor's
report.
In our opinion, on the basis of the knowledge obtained in the
audit,
-- the accompanying consolidated financial statements comply, in
all material respects, with the IFRS as adopted by the EU and the
additional requirements of German commercial law pursuant to
Section 315e (1) GermanCommercial Code (HGB) and, in compliance
with these requirements, give a true and fair view of the
assets,liabilities and financial position of the Group as at 30
September 2023 and of its financial performance for thefinancial
year from 1 October 2022 to 30 September 2023, and
-- the accompanying combined management report as a whole
provides an appropriate view of the Group'sposition. In all
material respects, this combined management report is consistent
with the consolidated financialstatements, complies with German
legal requirements and appropriately presents the opportunities and
risks offuture development. Our audit opinion on the combined
management report does not cover the content of those partsof the
combined management report set out in the appendix to the auditor's
report.
Pursuant to Section 322 (3) sentence 1 HGB, we declare that our
audit has not led to any reservations relating to the legal
compliance of the consolidated financial statements and of the
combined management report.
Basis for the Audit Opinions
We conducted our audit of the consolidated financial statements
and of the combined management report in accordance with Section
317 HGB and the EU Audit Regulation (No. 537 / 2014; referred to
subsequently as "EU Audit Regulation") and in compliance with
German Generally Accepted Standards for Financial Statement Audits
promulgated by the Institut der Wirtschaftsprüfer (IDW). We
performed the audit of the consolidated financial statements in
supplementary compliance with the International Standards on
Auditing (ISA). Our responsibilities under those requirements,
principles and standards are further described in the "Auditor's
Responsibilities for the Audit of the Consolidated Financial
Statements and of the Combined Management Report" section of our
auditor's report. We are independent of the group entities in
accordance with the requirements of European law and German
commercial and professional law, and we have fulfilled our other
German professional responsibilities in accordance with these
requirements. In addition, in accordance with Article 10 (2) point
(f) of the EU Audit Regulation, we declare that we have not
provided non-audit services prohibited under Article 5 (1) of the
EU Audit Regulation. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
audit opinions on the consolidated financial statements and on the
combined management report.
Key Audit Matters in the Audit of the Consolidated Financial
Statements
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
consolidated financial statements for the financial year from 1
October 2022 to 30 September 2023. These matters were addressed in
the context of our audit of the consolidated financial statements
as a whole and in forming our audit opinion thereon; we do not
provide a separate audit opinion on these matters.
In the following we present the key audit matters we have
determined in the course of our audit:
1. Recoverability of goodwill
2. Specific provisions
Our presentation of these key audit matters has been structured
as follows:
A. description (including reference to corresponding information
in the consolidated financial statements)
B. auditor's response
1. Recoverability of goodwill
A. In TUI AG's consolidated financial statements as at 30
September 2023, goodwill totalling mEUR 2,949.2 is reported under
the item "goodwill" in the statement of financial position.
Goodwill is subject to an impairment test at least once a year.
Valuation is made by means of a valuation model based on the
discounted cash flow method. Since the outcome of this valuation
strongly depends on the estimate of future cash inflows by the
executive board and on the discount rate used, in the light of the
uncertainty of further impacts of the further geopolitical
development and of the general price development there is an
increased degree of forecasting uncertainty. Thus, the valuation is
subject to significant uncertainty. Against this background, we
believe that this is a key audit matter.
The Company's disclosures on goodwill are provided in Note (12)
of the notes to the consolidated financial statements.
B. We evaluated the process for performing the impairment test
on goodwill, and carried out an assessment of the
accounting-relevant controls contained therein. Specifically, we
satisfied ourselves of the appropriateness of the future cash
inflows used in the calculation. For this purpose, among other
things, we compared these figures with the current budgets
contained in the three-year plan adopted by the executive board and
approved by the supervisory board, and reconciled it with general
and industry-specific market expectations. Since even relatively
small changes in the discount rate can have a material effect on
the amount of the business value determined in this way, we also
focused on examining the parameters used to determine the discount
rate used, including the weighted average cost of capital, and
analysed the calculation algorithm. Owing to the material
significance of goodwill and the fact that the valuation also
depends on macroeconomic conditions which are beyond the control of
the Company, we also assessed the sensitivity analyses prepared by
the Company for the cash-generating units with low excess cover
(carrying amount compared to the realisable amount).
2. Specific provisions
A. TUI AG's consolidated financial statements as at 30 September
2023 report provisions for maintenances of mEUR 778.6 under the
statement of financial position item "other provisions".
Furthermore, provisions for pensions and similar obligations of
mEUR 670.4 were recognised as at 30 September 2023. In our view,
these facts are key audit matters, as the recognition and
measurement of these significant items are based to a large extent
on estimates and assumptions made by the executive board.
The Company's disclosures on provisions are provided under the
Notes (30) and (31) as well as under the disclosures on recognition
and measurement methods set out in the notes to the consolidated
financial statements.
B. We evaluated the process of recognition and measurement
applicable to specific provisions, and carried out an assessment of
the accounting-relevant controls contained therein. In the
knowledge that there is an increased risk of misstatements in
financial reporting with estimated values, and that the valuation
decisions of the executive board have a direct and significant
effect on the consolidated profit, we assessed the appropriateness
of the values recognised by comparing them against historical
values and by means of the contractual bases presented to us.
Among other things, we
-- assessed the computation of the expected maintenance costs
for aircraft. This was done on the basis ofgroup-wide maintenance
contracts, price increases expected on the basis of external market
forecasts and thediscount rates applied, supported by our own
analyses;
-- assessed the appropriateness of the valuation parameters used
to calculate the pension provisions. Amongother things, we did so
by comparing them against market data and taking into account the
expertise of our internalpension valuation experts.
Other Information
The executive board and / or the supervisory board are
responsible for the other information. The other information
comprises
-- the report of the supervisory board,
-- the report of the audit committee,
-- the remuneration report pursuant to Section 162 German Stock
Corporation Act (AktG),
-- the unaudited content of the combined management report
specified in the appendix to the auditor'sreport,
-- the executive directors' confirmation regarding the
consolidated financial statements and the combinedmanagement report
pursuant to Section 297 (2) sentence 4 and Section 315 (1) sentence
5 HGB, and
-- all other parts of the annual report,
-- but not the consolidated financial statements, not the
audited content of the combined management reportand not our
auditor's report thereon.
The supervisory board is responsible for the report of the
supervisory board and for the report of the audit committee. The
executive board and the supervisory board are responsible for the
statement pursuant to Section 161 AktG on the German Corporate
Governance Code, which forms part of the corporate governance
statement included in the section "Corporate Governance Report" set
out in the combined management report, and for the remuneration
report. Otherwise the executive board is responsible for the other
information.
Our audit opinions on the consolidated financial statements and
on the combined management report do not cover the other
information, and consequently we do not express an audit opinion or
any other form of assurance conclusion thereon.
In connection with our audit, our responsibility is to read the
other information identified above and, in doing so, to consider
whether the other information
-- is materially inconsistent with the consolidated financial
statements, with the audited content of thecombined management
report or our knowledge obtained in the audit, or
-- otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this
regard.
Responsibilities of the Executive Board and the Supervisory
Board for the Consolidated Financial Statements and the Combined
Management Report
The executive board is responsible for the preparation of the
consolidated financial statements that comply, in all material
respects, with IFRS as adopted by the EU and the additional
requirements of German commercial law pursuant to Section 315e (1)
HGB, and that the consolidated financial statements, in compliance
with these requirements, give a true and fair view of the assets,
liabilities, financial position and financial performance of the
Group. In addition, the executive board is responsible for such
internal control as it has determined necessary to enable the
preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud (i.e. fraudulent
financial reporting and misappropriation of assets) or error.
In preparing the consolidated financial statements, the
executive board is responsible for assessing the Group's ability to
continue as a going concern. It also has the responsibility for
disclosing, as applicable, matters related to going concern. In
addition, it is responsible for financial reporting based on the
going concern basis of accounting unless there is an intention to
liquidate the Group or to cease operations, or there is no
realistic alternative but to do so.
Furthermore, the executive board is responsible for the
preparation of the combined management report that as a whole
provides an appropriate view of the Group's position and is, in all
material respects, consistent with the consolidated financial
statements, complies with German legal requirements, and
appropriately presents the opportunities and risks of future
development. In addition, the executive board is responsible for
such arrangements and measures (systems) as it has considered
necessary to enable the preparation of a combined management report
that is in accordance with the applicable German legal
requirements, and to be able to provide sufficient appropriate
evidence for the assertions in the combined management report.
The supervisory board is responsible for overseeing the Group's
financial reporting process for the preparation of the consolidated
financial statements and of the combined management report.
Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements and of the Group Management Report
Our objectives are to obtain reasonable assurance about whether
the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and whether
the combined management report as a whole provides an appropriate
view of the Group's position and, in all material respects, is
consistent with the consolidated financial statements and the
knowledge obtained in the audit, complies with the German legal
requirements and appropriately presents the opportunities and risks
of future development, as well as to issue an auditor's report that
includes our audit opinions on the consolidated financial
statements and on the combined management report.
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with Section 317
HGB and the EU Audit Regulation and in compliance with German
Generally Accepted Standards for Financial Statement Audits
promulgated by the Institut der Wirtschaftsprüfer (IDW) and in
supplementary compliance with the ISA will always detect a material
misstatement. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of
users taken on the basis of these consolidated financial statements
and this combined management report.
We exercise professional judgement and maintain professional
scepticism throughout the audit. We also
-- identify and assess the risks of material misstatement of the
consolidated financial statements and ofthe combined management
report, whether due to fraud or error, design and perform audit
procedures responsive tothose risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our
auditopinions. The risk of not detecting a material misstatement
resulting from fraud is higher than the risk of notdetecting a
material misstatement resulting from error, as fraud may involve
collusion, forgery, intentionalomissions, misrepresentations, or
the override of internal controls.
-- obtain an understanding of internal control relevant to the
audit of the consolidated financialstatements and of arrangements
and measures relevant to the audit of the combined management
report in order todesign audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an
auditopinion on the effectiveness of these systems.
-- evaluate the appropriateness of accounting policies used by
the executive board and the reasonableness ofestimates made by the
executive board and related disclosures.
-- conclude on the appropriateness of the executive board's use
of the going concern basis of accountingand, based on the audit
evidence obtained, whether a material uncertainty exists related to
events or conditionsthat may cast significant doubt on the Group's
ability to continue as a going concern. If we conclude that
amaterial uncertainty exists, we are required to draw attention in
the auditor's report to the related disclosuresin the consolidated
financial statements and in the combined management report or, if
such disclosures areinadequate, to modify our respective audit
opinions. Our conclusions are based on the audit evidence obtained
up tothe date of our auditor's report. However, future events or
conditions may cause the Group to cease to be able tocontinue as a
going concern.
-- evaluate the overall presentation, structure and content of
the consolidated financial statements,including the disclosures,
and whether the consolidated financial statements present the
underlying transactionsand events in a manner that the consolidated
financial statements give a true and fair view of the
assets,liabilities, financial position and financial performance of
the Group in compliance with IFRS as adopted by the EUand with the
additional requirements of German commercial law pursuant to
Section 315e (1) HGB.
-- obtain sufficient appropriate audit evidence regarding the
financial information of the entities orbusiness activities within
the Group to express audit opinions on the consolidated financial
statements and on thecombined management report. We are responsible
for the direction, supervision and performance of the group
audit.We remain solely responsible for our audit opinions.
-- evaluate the consistency of the combined management report
with the consolidated financial statements,its conformity with
German law, and the view of the Group's position it provides.
-- perform audit procedures on the prospective information
presented by the executive board in the combinedmanagement report.
On the basis of sufficient appropriate audit evidence we evaluate,
in particular, thesignificant assumptions used by the executive
board as a basis for the prospective information, and evaluate
theproper derivation of the prospective information from these
assumptions. We do not express a separate audit opinionon the
prospective information and on the assumptions used as a basis.
There is a substantial unavoidable risk thatfuture events will
differ materially from the prospective information.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We provide those charged with governance with a statement that
we have complied with the relevant independence requirements, and
communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where
applicable, the actions taken or safeguards applied to eliminate
independence threats.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements
for the current period and are therefore the key audit matters. We
describe these matters in the auditor's report unless law or
regulation precludes public disclosure about the matter.
Other legal and regulatory requirements
Report on the Audit of the Electronic Reproductions of the
Consolidated Financial Statements and of the Combined Management
report Prepared for Publication Pursuant to Section 317 (3a)
HGB
Audit Opinion
We have performed an audit in accordance with Section 317 (3a)
HGB to obtain reasonable assurance whether the electronic
reproductions of the consolidated financial statements and of the
combined management report (hereinafter referred to as "ESEF
documents") prepared for publication, contained in the file, which
has the SHA256:
070728ffe6af22f07d341897cb93b387edcdb8f50464acd728cb6370a599f788,
meet, in all material respects, the requirements for the electronic
reporting format pursuant to Section 328 (1) HGB ("ESEF format").
In accordance with the German legal requirements, this audit only
covers the conversion of the information contained in the
consolidated financial statements and the combined management
report into the ESEF format, and therefore covers neither the
information contained in these electronic reproductions nor any
other information contained in the file identified above.
In our opinion, the electronic reproductions of the consolidated
financial statements and of the combined management report prepared
for publication contained in the file identified above meet, in all
material respects, the requirements for the electronic reporting
format pursuant to Section 328 (1) HGB. Beyond this audit opinion
and our audit opinions on the accompanying consolidated financial
statements and on the accompanying combined management report for
the financial year from 1 October 2022 to 30 September 2023
contained in the "Report on the Audit of the Consolidated Financial
Statements and of the Combined Management Report" above, we do not
express any assurance opinion on the information contained within
these electronic reproductions or on any other information
contained in the file identified above.
Basis for the Audit Opinion
We conducted our audit of the electronic reproductions of the
consolidated financial statements and of the combined management
report contained in the file identified above in accordance with
Section 317 (3a) HGB and on the basis of the IDW Auditing Standard:
Audit of the Electronic Reproductions of Financial Statements and
Management Reports Prepared for Publication Purposes Pursuant to
Section 317 (3a) HGB (IDW AuS 410 (06.2022)). Our responsibilities
in this context are further described in the "Group Auditor's
Responsibilities for the Audit of the ESEF Documents" section. Our
audit firm has applied the IDW Standard on Quality Management:
Requirements for Quality Management in the Audit Firm (IDW QS
1).
Responsibilities of the Executive Board and the Supervisory
Board for the ESEF Documents
The executive board of the parent is responsible for the
preparation of the ESEF documents based on the electronic files of
the consolidated financial statements and of the group management
report according to Section 328 (1) sentence 4 no. 1 HGB and for
the tagging of the consolidated financial statements according to
Section 328 (1) sentence 4 no. 2 HGB.
In addition, the executive board of the parent is responsible
for such internal controls that it has considered necessary to
enable the preparation of ESEF documents that are free from
material intentional or unintentional non-compliance with the
requirements for the electronic reporting format pursuant to
Section 328 (1) HGB.
The supervisory board is responsible for overseeing the process
for preparing the ESEF documents as part of the financial reporting
process.
Group Auditor's Responsibilities for the Audit of the ESEF
Documents
Our objective is to obtain reasonable assurance about whether
the ESEF documents are free from material intentional or
unintentional non-compliance with the requirements of Section 328
(1) HGB. We exercise professional judgement and maintain
professional scepticism throughout the audit. We also
-- identify and assess the risks of material intentional or
unintentional non-compliance with therequirements of Section 328
(1) HGB, design and perform audit procedures responsive to those
risks, and obtainaudit evidence that is sufficient and appropriate
to provide a basis for our audit opinion.
-- obtain an understanding of internal control relevant to the
audit on the ESEF documents in order todesign audit procedures that
are appropriate in the circumstances, but not for the purpose of
expressing anassurance opinion on the effectiveness of these
controls.
-- evaluate the technical validity of the ESEF documents, i.e.
whether the file containing the ESEF documents meets the
requirements of the Delegated Regulation (EU) 2019 / 815, in the
version in force at thebalance sheet date, on the technical
specification for this electronic file.
-- evaluate whether the ESEF documents enable a XHTML
reproduction with content equivalent to the auditedconsolidated
financial statements and to the audited combined management
report.
-- evaluate whether the tagging of the ESEF documents with
Inline XBRL technology (iXBRL) in accordance withthe requirements
of Articles 4 and 6 of the Delegated Regulation (EU) 2019 / 815, in
the version in force at thebalance sheet date, enables an
appropriate and complete machine-readable XBRL copy of the XHTML
reproduction.
Further information pursuant to Article 10 of the EU Audit
Regulation
We were elected as group auditor by the general meeting on 14
February 2023. We were engaged by the supervisory board on 19 April
2023. We have been the group auditor of TUI AG, Berlin and Hanover
/ Germany, without interruption since the financial year 2016 /
2017.
We declare that the audit opinions expressed in this auditor's
report are consistent with the additional report to the audit
committee pursuant to Article 11 of the EU Audit Regulation
(long-form audit report).
Review of the Executive Board's Declaration of Compliance with
the UK Corporate Governance Code
Pursuant to item 9.8.10 R (1 and 2) of the Listing Rules in the
UK, we were engaged to review the executive board's statement
pursuant to item 9.8.6 R (6) of the Listing Rules in the UK
relating to compliance with provisions 6 and 24 to 29 of the UK
Corporate Governance Code included in the report on the UK
Corporate Governance Code, and the executive board's statement
pursuant to item 9.8.6 R (3) of the Listing Rules in the UK
included in the "Viability statement" section of the combined
management report and in chapter "Going concern reporting according
to the UK Corporate Governance Code" of the notes to the
consolidated financial statements in the financial year 2022 /
2023. We have nothing to report in this regard.
OTHER MATTER - USE OF THE AUDITOR'S REPORT
Our auditor's report must always be read together with the
audited consolidated financial statements and the audited combined
management report as well as with the audited ESEF documents. The
consolidated financial statements and the combined management
report converted into the ESEF format - including the versions to
be submitted for inclusion in the Company Register - are merely
electronic reproductions of the audited consolidated financial
statements and the audited combined management report and do not
take their place. In particular, the ESEF report and our audit
opinion contained therein are to be used solely together with the
audited ESEF documents made available in electronic form.
GERMAN PUBLIC AUDITOR RESPONSIBLE FOR THE ENGAGEMENT
The German Public Auditor responsible for the engagement is
Annika Deutsch.
Hanover / Germany, 4 December 2023
Deloitte GmbH
Wirtschaftsprüfungsgesellschaft
Signed: Signed:
Annika Deutsch Elmar Meier
Wirtschaftsprüferin Wirtschaftsprüfer
(German Public Auditor) (German Public Auditor)
Appendix to the Independent Auditor's Report: Parts of the
Combined Management Report Whose Contents are Unaudited
We have not audited the content of the following parts of the
combined management report:
-- the non-financial statement pursuant to Sections 315b and
315c HGB included in section "Combinednon-financial declaration of
TUI Group" of the group management report,
-- the statement on corporate governance with the statement on
corporate governance pursuant to Sec. 289f and Sec. 315d HGB,
and
-- the other parts of the combined management report marked as
unaudited.
Report of the Independent Practitioner Regarding the
consolidated non-financial statement
Limited assurance report of the independent practitioner
regarding the consolidated non-financial statement for the
financial year from 1 October 2022 to 30 September 2023
To TUI AG, Hanover
Our Engagement
We have performed a limited assurance engagement on the
consolidated non-financial statement, which is included in the
combined management report for the parent and the group, of TUI AG,
Hanover / Germany, (hereafter referred to as "the Company") for the
financial year from 1 October 2022 to 30 September 2023 (hereafter
referred to as "non-financial statement"). The TCFD compliance
statement as well as further websites referred to in the
consolidated non-financial statement, were not subject to our
audit.
Responsibilities of the Executive Directors
The executive directors of the Company are responsible for the
preparation of the non-financial statement in accordance with
Section 315c in conjunction with Sections 289c to 289e HGB and
Article 8 of Regulation (EU) 2020 / 852 of the European Parliament
and the Council of 18 June 2020 on the establishment of a framework
to facilitate sustainable investment, and amending Regulation (EU)
2019 / 2088 (hereafter referred to as "EU Taxonomy Regulation") and
the delegated acts adopted thereon, as well as with their own
interpretation of the wording and terminology contained in the EU
Taxonomy Regulation and the delegated acts adopted thereon, as is
presented in section "Disclosures according to the EU Taxonomy
Regulation (2020 / 852)" of the non-financial statement.
These responsibilities of the executive directors of the Company
include the selection and application of appropriate methods
regarding the combined non-financial statement and the use of
assumptions and estimates for individual non-financial disclosures
of the Group which are reasonable under the given circumstances. In
addition, the executive directors are responsible for such internal
control as they have deemed necessary to enable the preparation of
a non-financial statement that is free from material misstatement
due to fraud (i. e., fraudulent non-financial statement) or
error.
Some of the wording and terminology contained in the EU Taxonomy
Regulation and the delegated acts adopted thereon are still subject
to considerable interpretation uncertainty and have not yet been
officially clarified. Therefore, the executive directors have laid
down their own interpretation of the EU Taxonomy Regulation and of
the delegated acts adopted thereon in section "Disclosures
according to the EU Taxonomy Regulation (2020 / 852)" of the
non-financial statement. They are responsible for the
reasonableness of this interpretation. As there is the inherent
risk that indefinite legal concepts may allow for various
interpretations, the legal conformity of the interpretation is
prone to uncertainty.
The preciseness and completeness of the environmental data in
the non-financial statement is subject to inherent restrictions
resulting from the manner in which the data was collected and
calculated as well as from assumptions made.
Independence and Quality Assurance of the Audit Firm
We have complied with the German professional requirements on
independence and other professional rules of conduct.
Our firm applies the national statutory rules and professional
announcements - particularly of the "Professional Charter for
German Public Auditors and German Sworn Auditors" (BS WP / vBP) and
of the IDW Quality Assurance Standard: Requirements for Quality
Management in Audit Practices (IDW QS 1) promulgated by the
Institut der Wirtschaftsprüfer (IDW) and does therefore maintain a
comprehensive quality assurance system comprising documented
regulations and measures in respect of compliance with professional
rules of conduct, professional standards, as well as relevant
statutory and other legal requirements.
Responsibilities of the Independent Practitioner
Our responsibility is to express a conclusion on the
non-financial statement based on our work performed within our
limited assurance engagement.
We conducted our work in accordance with the International
Standard on Assurance Engagements (ISAE) 3000 (Revised) "Assurance
Engagements Other than Audits or Reviews of Historical Financial
Information", adopted by the IAASB. This Standard requires that we
plan and perform the assurance engagement so that we can conclude
with limited assurance whether matters have come to our attention
to cause us to believe that the non-financial statement of the
Company, with the exception of the external sources of
documentation (references to the TCFD compliance statement as well
as to websites) referenced therein, has not been prepared, in all
material respects, in accordance with Section 315c in conjunction
with Sections 289c to 289e HGB and the EU Taxonomy Regulation and
the delegated acts adopted thereon, as well as with the
interpretation by the executive directors presented in section
"Disclosures according to the EU Taxonomy Regulation (2020 / 852)"
of the non-financial statement.
The procedures performed in a limited assurance engagement have
a lesser extent than for a reasonable assurance engagement;
consequently, the level of assurance obtained in a limited
assurance engagement is substantially lower than the assurance that
would have been obtained had a reasonable assurance engagement been
performed. The choice of assurance work is subject to the
practitioner's professional judgement.
Within the scope of our limited assurance engagement, which we
performed between August and December 2023, we notably performed
the following work and other activities:
-- Obtaining an understanding of the structure of the Group's
sustainability organisation and of thestakeholder engagement,
-- Inquiries of the executive directors and relevant employees
involved about the process of preparation,about the system of
internal control relating to this process, as well as about the
disclosures contained in thenon-financial statement,
-- Identification of probable risks of material misstatements in
the non-financial statement,
-- Analytical evaluation of selected disclosures contained in
the non-financial statement,
-- Cross validation of selected disclosures and the
corresponding data in the consolidated and annualfinancial
statements as well as in the combined management report,
-- Evaluation of the presentation of the non-financial
statement,
-- Evaluation of the process to identify taxonomy-eligible and
taxonomy-aligned economic activities and thecorresponding
disclosures in the non-financial statement.
The determination of the disclosures pursuant to Article 8 of
the EU Taxonomy Regulation requires the executive directors to make
interpretations of indefinite legal concepts. As there is the
inherent risk that indefinite legal concepts may allow for various
interpretations, the legal conformity of the interpretation, and
hence our related examination, is prone to uncertainty.
Practitioner's Conclusion
Based on the work performed and the evidence obtained, nothing
has come to our attention that causes us to believe that the
consolidated non-financial statement of the Company for the
financial year from 1 October 2022 to 30 September 2023 does not
comply, in all material respects, with Section 315c in conjunction
with Sections 289c to 289e HGB and the EU Taxonomy Regulation and
the delegated acts adopted thereon, as well as with the executive
directors' interpretation presented in section "Disclosures
according to the EU Taxonomy Regulation (2020 / 852)" of the
non-financial statement. Our practitioner's conclusion does neither
include the TCFD compliance statement nor further websites referred
to in the consolidated non-financial statement.
Restriction of Use
We issue this report as stipulated in the engagement letter
agreed with the Company (including the "General Engagement Terms
for Wirtschaftsprüfer and Wirtschaftsprüfungsgesellschaften (German
Public Auditors and Public Audit Firms)" as of 1 January 2017
promulgated by the Institut der Wirtschaftsprüfer (IDW)). We draw
attention to the fact that the assurance engagement was performed
for the purposes of the Company and the report is solely designed
for informing the Company about the findings of the assurance
engagement. Therefore, it may not be suitable for another than the
aforementioned purpose. Hence, this report should not be used by
third parties as a basis for any (asset) decision.
We are solely liable to the Company. However, we do not accept
or assume liability to third parties. Our conclusion was not
modified in this respect.
Hanover / Germany, 4 December 2023
Deloitte GmbH
Wirtschaftsprüfungsgesellschaft
Signed: Signed:
Daniel Oehlmann Eike Bernhard Hellmann
Wirtschaftsprüfer
(German Public Auditor)
Forward-Looking Statements
The annual report, in particular the report on expected
developments included in the management report, includes various
forecasts and expectations as well as statements relating to the
future development of the TUI Group and TUI AG. These statements
are based on assumptions and estimates and may entail known and
unknown risks and uncertainties. Actual development and results as
well as the financial and asset situation may therefore differ
substantially from the expectations and assumptions made. This may
be due to market fluctuations, the development of world market
prices for commodities, of financial markets and exchange rates,
amendments to national and international legislation and provision
or fundamental changes in the economic and political environment.
TUI does not intend to and does not undertake an obligation to
update or revise any forward-looking statements to adapt them to
events or developments after the publication of this annual
report.
Financial calendar
13 February 2024
Annual General Meeting 2024
13 February 2024
Quarterly Statement Q1 2024
15 May 2024
Half-Year Financial Report H1 2024
14 August 2024
Quarterly Statement Q3 2024
11 December 2024
Annual Report 2024
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Dissemination of a Regulatory Announcement, transmitted by EQS
Group. The issuer is solely responsible for the content of this
announcement.
-----------------------------------------------------------------------------------------------------------------------
ISIN: DE000TUAG505
Category Code: ACS
TIDM: TUI
LEI Code: 529900SL2WSPV293B552
OAM Categories: 1.1. Annual financial and audit reports
Sequence No.: 289897
EQS News ID: 1790029
End of Announcement EQS News Service
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December 06, 2023 02:02 ET (07:02 GMT)
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