Consolidated profit and loss statement
| € million | Q3 2008 | Q3 20072)3) restated | Var. % | 9M 2008 | 9M 20072)3) restated | Var. % | |
|---|---|---|---|---|---|---|---|
| Turnover | 6,870.9 | 5,835.1 | + 17.8 | 15,247.6 | 12,229.8 | + 24.7 | |
| Cost of sales | 5,836.2 | 4,864.7 | + 20.0 | 13,856.0 | 11,129.5 | + 24.5 | |
| Gross profit/loss | 1,034.7 | 970.4 | + 6.6 | 1,391.6 | 1,100.3 | + 26.5 | |
| Administrative expenses | 460.5 | 345.6 | + 33.2 | 1,160.3 | 743.6 | + 56.0 | |
| Other income/other expenses | 0.6 | 22.5 | - 97.3 | - 81.5 | 42.4 | n/a | |
| Impairment of goodwill | – | 33.6 | n/a | 76.1 | 33.6 | + 126.5 | |
| Financial result | - 54.1 | - 70.4 | + 23.2 | - 247.7 | - 175.9 | - 40.8 | |
| - Financial income | 54.1 | 60.1 | - 10.0 | 126.5 | 140.1 | - 9.7 | |
| - Financial expenses | 108.2 | 130.5 | - 17.1 | 374.2 | 316.0 | + 18.4 | |
| Share of results of joint ventures and associates | + 27.6 | + 27.1 | + 1.8 | + 40.5 | + 42.5 | - 4.7 | |
| Earnings before taxes on income | 548.3 | 570.4 | - 3.9 | - 133.5 | 232.1 | n/a | |
| Reconciliation to underlying earnings: | |||||||
| Earnings before taxes on income | 548.3 | 570.4 | - 3.9 | - 133.5 | 232.1 | n/a | |
| Interest result and earnings from the valuation of interest hedges | 45.6 | 68.2 | - 33.1 | 222.2 | 174.7 | + 27.2 | |
| Impairment of goodwill | – | + 33.6 | n/a | + 76.1 | + 33.6 | + 126.5 | |
| EBITA from continuing operations1) | 593.9 | 672.2 | - 11.6 | 164.8 | 440.4 | - 62.6 | |
| Adjustments | |||||||
| Gains on disposal | – | – | – | – | |||
| Restructuring | 93.5 | 5.9 | 311.2 | 16.2 | |||
| Purchase price allocation | - 6.8 | 15.3 | 46.4 | 15.3 | |||
| Other one-off items | 91.9 | 30.3 | 137.5 | 69.6 | |||
| Underlying EBITA from continuing operations | 772.5 | 723.7 | + 6.7 | 659.9 | 541.5 | + 21.9 | |
| Earnings before taxes on income | 548.3 | 570.4 | - 3.9 | - 133.5 | 232.1 | n/a | |
| Taxes on income | 210.8 | 205.2 | + 2.7 | 72.6 | - 0.7 | n/a | |
| Result from continuing operations | 337.5 | 365.2 | - 7.6 | - 206.1 | 232.8 | n/a | |
| Result from discontinued operation | 110.8 | 96.7 | + 14.6 | 251.0 | 194.6 | + 29.0 | |
| Group profit/loss for the year | 448.3 | 461.9 | - 2.9 | 44.9 | 427.4 | - 89.5 | |
| - attributable to shareholders of TUI AG of Group profit | 256.1 | 440.9 | - 41.9 | 33.7 | 383.3 | - 91.2 | |
| - attributable to minority interest of Group profit | 192.2 | 21.0 | + 815.3 | 11.2 | 44.1 | - 74.6 | |
| Group profit/loss | 448.3 | 461.9 | - 2.9 | 44.9 | 427.4 | - 89.5 | |
| Basic earnings per share4) | in € | + 1.00 | + 1.73 | - 42.2 | + 0.07 | + 1.46 | - 95.2 |
| Diluted earnings per share4) | in € | + 0.88 | + 1.50 | - 41.3 | + 0.07 | + 1.37 | - 94.9 |
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1) EBITA is equivalent to earnings before interest, taxes on income and impairment of goodwill.
2) Since the alternative treatment allowed under IAS 23 to capitalise borrowing costs was exercised in the 2007 financial year, interest expenses declined by € 4.3 million in the previous year‘s reference period. At the same time, the cost of sales as well as tax expenses rose by € 0.2 million and by € 0.1 million respectively, while other income decreased by € 4.0 million. Earnings by discontinued operation rose overall by € 3.5 million.
3) Originally published previous year's figures were adjusted for purchase price allocations (especially for the First Choice Holidays Group) which in accordance with IFRS 3 have been made within twelve months after the acquisition date of a subsidiary.
4) In calculating earnings per share in accordance with the rules of IAS 33.12, the after-tax amount of the dividend on the hybrid capital was deducted from Group profit attributable to shareholders of TUI AG since the hybrid capital represents equity but does not represent equity attributable to shareholders of TUI AG.
As container shipping has been classified a discontinued operation according to IFRS 5 since March 2008, earnings by this sector are now shown under the item ‘Result from discontinued operation’. They are no longer carried under continuing operations. The previous year’s figures were restated accordingly in accordance with IFRS 5.
The year-on-year development of the consolidated profit and loss statement for the continuing operations was mainly driven by the inclusion of First Choice acquired in September 2007, in consolidation.
Overall, current earnings by continuing operations reflect the seasonality of the tourism business, with positive earnings primarily generated in the third quarter of any one year.
Turnover and cost of sales
Turnover comprised the turnover of the continuing operations, i.e. tourism and central operations. Turnover grew by 17.8% year-on-year to € 6.9 billion in the third quarter of 2008 and by 24.7% to € 15.2 billion in the first nine months. This increase was mainly caused by the first-time consolidation of First Choice. Turnover was shown on a cost of sales basis, which also rose due to the changes in consolidation. A detailed breakdown of turnover and the development of turnover is presented in the section ‘Consolidated turnover and earnings’.
Gross profit
Gross profit as the balance of turnover and cost of sales rose year-on-year to € 1.0 billion (previous year: € 970 million). In the first nine months, gross profit totalled € 1.4 billion, a year-on-year increase of 26.5%. This growth mainly reflected the inclusion of First Choice in the group of consolidated companies.
Administrative expenses
Administrative expenses comprised expenses not directly allocable to the turnover transactions, such as expenses for general management functions. At € 461 million, they were up 33.2% year-on-year. In the first nine months, they rose by 56.0%. The considerable year-on-year increase in administrative costs resulted from the consolidation of First Choice and the restructuring and integration costs included in the quarter under review.
Other income/Other expenses
Other income and other expenses primarily comprised profits and losses from the sale of fixed asset items. They amounted to € 1 million in the third quarter, a decline of 97.3%. The year-on-year increase in netted expenses of € 124 million in the first nine months resulted from expenses related to the strategic realignment of TUI Travel’s flight operations in the second quarter 2008.
Impairment of goodwill
In the third quarter of 2008 no impairments of goodwill were effected. For the first nine months, goodwill impairments rose to € 76 million, an increase of 126.5% primarily caused by ‘TUIfly’ and ‘Tarajal Properties, S.L.’ in the second quarter of 2008.
Financial result
The financial result comprised the interest result and the net result from marketable securities. At € - 54 million, the financial result grew by 23.2% year-on-year in the third quarter of 2008 and comprised financial income of € 54 million (previous year: € 60 million), which was down by 10.0% year-on-year, and financial expenses of € 108 million (previous year: € 131 million), which were down by 17.1%. The accumulated financial result for the first nine months of 2008 also declined year-on-year to € - 248 million (previous year: € - 176 million).
Share of results of joint ventures and associates
The share of results of joint ventures and associates comprised the share in net profit for the year of the associated companies and joint ventures as well as impairments of the goodwill of these companies. At € 28 million, it grew by 1.8% in the third quarter. On an accumulated basis, a decline of 4.7% to € 41 million was recorded. The year-on-year decrease in the first nine months resulted from a year-on-year decline in profit contributions by the joint ventures and associates in TUI Travel und TUI Hotels & Resorts.
Underlying EBITA of continuing operations
In the third quarter of 2008, underlying earnings of the continuing operations totalled € 773 million and thus increased by 6.7 % versus previous year’s level. EBITA was adjusted for gains on disposals, restructuring expenses, purchase price allocations and one-off items. The adjustments are outlined in detail in the sections on ‘Consolidated turnover and earnings’ and ‘Development of the divisions’.
Taxes on income
Taxes on income comprised taxes on profits from the business activities of the continuing operations. In the third quarter they amounted to € 211 million, following € 205 million in 2007. Accumulated taxes on income for the first nine months accounted for € 73 million (previous year: tax income of € 1 million).
Result from discontinued operation
The result from the discontinued operation comprised the reclassified container shipping operations. It totalled € 111 million in the third quarter of 2008 and € 251 million for the first nine months. In the 2007 reference periods, the corresponding figures were € 97 million and € 195 million, respectively. In accordance with IFRS 5, scheduled depreciation of fixed assets has had to be suspended since 31 March 2008. As a result, earnings for the current quarter rose by € 133 million. Likewise, at equity measurement of the container shipping participations has had to be discontinued and thus limiting a year-on-year comparison. If equity valuation of the subsidiaries had continued to be used for the period after April 2008, results would have been € 19 million higher. A detailed breakdown is provided in the notes in the section ‘Result from discontinued operation’.
Group profit
In the third quarter, Group profit totalled € 448 million (previous year: € 462 million), a decrease of € 14 million. For the first nine months of the year, Group profit accounted for € 45 million, down by € 383 million year-on-year.
Minority interests
Minority interests in Group profit totalled € 192 million for the third quarter of 2008 and € 11 million for the first nine months of 2008. They related to the outside shareholders of TUI Travel PLC and companies in the TUI Hotels & Resorts sector.
Earnings per share
After deduction of minority interests, TUI AG shareholders accounted for € 256 million (previous year: € 441 million) of Group profit in the third quarter of 2008. As a result, basic earnings per share amounted to € 1.00 in the third quarter (previous year: € 1.73). In the first nine months, TUI AG shareholders accounted for € 34 million after deduction of minority interests. Basic earnings per share thus totalled € + 0.07 (previous year: € + 1.46) in the first three quarters of the year.
Performance indicators
Key figures of the profit and loss statement of the continuing operations
| € million | Q3 2008 | Q3 2007 | Var. % | 9M 2008 | 9M 2007 | Var. % |
|---|---|---|---|---|---|---|
| Earnings before interest, taxes on income,depreciation, impairment and rent (EBITDAR) | 899.9 | 954.2 | - 5.7 | 1,097.9 | 1,209.6 | - 9.2 |
| Operating rental expenses | 197.2 | 172.0 | + 14.7 | 562.8 | 474.0 | + 18.7 |
| Earnings before interest, taxes on income,depreciation and impairment (EBITDA) | 702.7 | 782.2 | - 10.2 | 535.1 | 735.6 | - 27.3 |
| Depreciation/amortisation less reversals of depreciation1) | 108.8 | 110.0 | - 1.1 | 370.3 | 295.2 | + 25.4 |
| Earnings before interest, taxes on income and impairment of goodwill (EBITA) | 593.9 | 672.2 | - 11.6 | 164.8 | 440.4 | - 62.6 |
| Impairment of goodwill | – | 33.6 | n/a | 76.1 | 33.6 | + 126.5 |
| Earnings before interest and taxes on income (EBIT) | 593.9 | 638.6 | - 7.0 | 88.7 | 406.8 | - 78.2 |
| Interest result | - 45.6 | - 68.2 | + 33.1 | - 222.2 | - 174.7 | - 27.2 |
| Earnings before taxes on income (EBT) | 548.3 | 570.4 | - 3.9 | - 133.5 | 232.1 | n/a |
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1) on property, plant and equipment, intangible assets, financial and other assets
Operating rental expenses
Operating rental expenses of the continuing operations amounted to € 197 million (previous year: € 172 million) in the third quarter and € 563 million (previous year: € 474 million) in the first nine months. The increase in rental and leasing expenses was attributable to the consolidation of First Choice.
Interest result
The interest result of the continuing operations totalled € - 46 million (previous year: € - 68 million) in the third quarter. The accumulated interest result for the first nine months stood at € - 222 million (previous year: € - 175 million).