Consolidated Earnings
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Profit and loss statement
| € million | Q1 2008 | Q1 2007 | Var. % | |
|---|---|---|---|---|
| Turnover | 3,636.5 | 2,670.4 | + 36.2 | |
| Cost of sales | 3,572.3 | 2,747.5 | + 30.0 | |
| Gross profit/loss | 64.2 | - 77.1 | n/a | |
| Administrative expenses | 377.2 | 161.1 | + 134.1 | |
| Other income/other expenses | 17.6 | 11.5 | + 53.0 | |
| Impairment of goodwill | – | – | – | |
| Financial result | - 93.1 | - 51.9 | - 79.4 | |
| Financial income | 8.5 | 16.0 | - 46.9 | |
| Financial expenses | 101.6 | 67.9 | + 49.6 | |
| Share of results of joint ventures and associates | 7.6 | 5.2 | + 46.2 | |
| Earnings before taxes on income | - 380.9 | - 273.4 | - 39.3 | |
| Reconciliation to underlying earnings: | ||||
| Earnings before taxes on income | 380.9 | - 273.4 | - 39.3 | |
| Interest result and earnings from the valuation of interest hedges | 82.9 | 51.7 | + 60.3 | |
| Impairment of goodwill | – | – | ||
| EBITA from continuing operations*) | - 298.0 | - 221.7 | - 34.4 | |
| Adjustments | ||||
| Gains on disposals | – | – | ||
| Restructuring | 27.1 | 1.6 | ||
| Purchase price allocation | 41.5 | 0.0 | ||
| Other one-off items | 15.7 | 8.3 | ||
| Underlying EBITA from continuing operations | - 213.7 | - 211.8 | - 0.9 | |
| Earnings before taxes on income | - 380.9 | - 273.4 | - 39.3 | |
| Taxes on income | - 114.3 | - 66.0 | - 73.2 | |
| Result from continuing operations | - 266.6 | - 207.4 | - 28.5 | |
| Result from discontinued operation | - 11.5 | 102.4 | n/a | |
| Group profit/loss for the year | - 278.1 | - 105.0 | - 164.9 | |
| - attributable to shareholders of TUI AG of Group profit | - 166.8 | - 116.5 | - 43.2 | |
| - attributable to minority interests of Group profit | - 111.3 | 11.5 | n/a | |
| Group profit/loss | - 278.1 | - 105.0 | - 164.9 | |
| Basic earnings per share | in € | - 0.69 | - 0.47 | - 46.8 |
| Diluted earnings per share | in € | - 0.69 | - 0.47 | - 46.8 |
* EBITA is equivalent to earnings before interest, taxes on income and impairment of goodwill.
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 continued 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 primarily characterised by the inclusion of the First Choice Holidays Group, acquired in September 2007.
Overall, current earnings by continuing operations reflect the seasonality of the tourism business, with positive earnings primarily generated in the second and third quarters of any one year.
Turnover and cost of sales
Turnover comprised the turnover of the continuing operations, i.e. tourism and central operations. In the first quarter of 2008, turnover grew by 36.2% to € 3.6 billion year-on-year. Besides the increase caused by the inclusion of the First Choice Holidays Group in consolidation, this growth was mainly attributable to an increase in customer volumes and better prices in the Mainstream sector of TUI Travel. Turnover was shown on a cost of sales basis, which also rose due to changes in consolidation. A detailed breakdown of turnover and the turnover development is presented in the section ’Consolidated turnover and earnings’.
Gross profit
Gross profit as the balance from turnover and cost of sales totalled € 64 million (previous year: € - 77 million) in the first quarter. This growth reflected the overall positive development of the Group’s tourism business and is also attributable to the inclusion of the First Choice Holidays Group 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. In the first quarter, they totalled € 377 million, up 134.1% year-on-year. The considerable year-on-year increase in administrative costs resulted from the consolidation of the First Choice Holidays Group and the restructuring and integration costs included in the quarter under review.
Other income/Other expenses
Other income and other expenses primarily comprised profits or losses from the sale of fixed asset items. At € 18 million, other income was 53.0% up year-on-year in the first quarter of 2008, primarily due to the inclusion of income from sale-and-lease-back transactions.
Impairment of goodwill
As in the 2007 reference quarter, there was no impairment of goodwill in the first quarter of 2008.
Financial result
The financial result comprised the net interest result and the net result from marketable securities. At € - 93 million, the financial result declined year-on-year in the first quarter of 2008 and comprised financial income of € 9 million (previous year: € 16 million) and financial expenses of € 102 million (previous year: € 68 million), which rose year-on-year due to the inclusion of the financial liabilities of the First Choice Holidays Group in consolidation.
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 necessary impairments of the goodwill of these companies. At € 8 million, it grew by 46.2% in the first quarter of 2008. It mainly arose from the year-on-year rise in earnings by the joint ventures and associates in the TUI Hotels & Resorts sector.
Underlying earnings (EBITA)
Underlying earnings of the continuing operations totalled € - 214 million in the first quarter of 2008, a slight decrease year-on-year. 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 business activities of the continuing operations. Based on the seasonal loss of € 381 million an arithmetic tax income was calculated which is primarily to be carried by the tourism entities. The tax income totalled € 114 million in the first quarter (previous year: € 66 million). The increase in tax income resulted from the corporate restructuring of the German companies transferred to TUI Travel and the inclusion of the tax income of the First Choice Holidays Group.
Result from discontinued operation
In the first quarter of 2008, earnings by the discontinued operation primarily comprised the reclassified container shipping operations and totalled € - 12 million. The item was restated accordingly for the 2007 reference period and totalled € 102 million due to the inclusion of gains on disposals. A detailed breakdown of the development of these earnings is provided in the section ‘Result from discontinued operation’ in the notes.
Group profit
In the first quarter, Group profit totalled € - 278 million (previous year: € - 105 million), down 164.9%.
Minority interests
Minority interests in Group profit totalled € - 111 million for the first quarter of 2008. They almost exclusively related to shareholders of TUI Travel and companies in the sector TUI Hotels & Resorts.
Earnings per share
After deduction of minority interests, TUI AG shareholders accounted for € - 167 million of Group profit in the first quarter of 2008, down 43.2% year-on-year. As a result, basic earnings per share amounted to € - 0.69 (previous year: € - 0.47) in the first quarter.
Performance indicators
Key figures of the profit and loss statement of the continuing operations
| € million | Q1 2008 | Q1 2007 | Var. % |
|---|---|---|---|
| Earnings before interest, taxes on income, depreciation, impairment and rent (EBITDAR) | 15.2 | 16.9 | - 10.1 |
| Operating rental expenses | 174.9 | 149.2 | + 17.2 |
| Earnings before interest, taxes on income, depreciation and impairment (EBITDA) | - 159.7 | - 132.3 | - 20.7 |
| Depreciation/amortisation less reversals of depreciation1) | 138.3 | 89.4 | + 54.7 |
| Earnings before interest, taxes on income and impairment of goodwill (EBITA) | - 298.0 | - 221.7 | - 34.4 |
| Impairment of goodwill | 0.0 | 0.0 | n/a |
| Earnings before interest and taxes on income (EBIT) | - 298.0 | - 221.7 | - 34.4 |
| Interest result | - 82.9 | - 51.7 | - 60.3 |
| Earnings before taxes on income (EBT) | - 380.9 | - 273.4 | - 39.3 |
1) on property, plant and equipment, intangible assets, financial and other assets
Operating rental expenses
In the first quarter, operating rental expenses of the continuing operations amounted to € 175 million (previous year: € 149 million). The increase in rental expenses was attributable to the inclusion of the First Choice Holidays Group.
Interest result
In the first quarter of 2008, the interest result of the continuing operations totalled € - 83 million (previous year: € - 52 million).