2020 ANNUAL REPORT OF THE TUI GROUP »The holiday sector remains on its long-term growth pathway. People want to travel – COVID-19 won’t change that. Nobody caters for the entire travel chain the way TUI does. No other company ofers comparable safety and quality standards. This will be more important than ever when the crisis is over.« Friedrich Joussen, CEO of TUI AG CONTENTS CONTENTS FINANCIAL YEAR 2020 COMBINED MANAGEMENT REPORT REPORT NAVIGATION FINANCIAL YEAR 2020 CORPORATE GOVERNANCE To help you navigate through this report, we have created this PDF with links through- CO R P O R AT E out. The contents bar in the left margin allows you to see where you are in the report GOVERNANCE (highlighted with blue text) and allows you to move to another area. 5 Financial Highlights 102 Supervisory Board and Executive Board CO N S O L I DAT E D 6 Interview with Friedrich Joussen 106 Corporate Governance Report The following symbols work in a similar way to a website: FINANCIAL STATEMENTS 10 Group Executive Committee AND NOTES 11 Report of the Supervisory Board SEARCH 19 Audit Committee Report CONSOLIDATED TABLE OF CONTENTS FINANCIAL STATEMENTS BACK COMBINED AND NOTES MANAGEMENT 143 Income Statement 143 Earnings per Share REPORT THE FOLLOWING SYMBOLS ARE USED FOR CROSS-REFERENCES: 143 Statement of Comprehensive Income 144 Statement of fnancial Position This is a cross-reference provided by law and / or audited by the auditor as part 23 TUI Group Strategy 145 Statement of Changes in Group Equity of the audit of the financial statements. 26 Corporate Profle 147 Cash Flow Statement Here you will find a page reference to further information within the annual 33 Risk Report 148 Notes report. This reference, as a cross-reference not provided for by law or by the German 50 Overall Assessment by the Executive Board and Accounting Standards (DRS) No. 20, is not subject of an auditor’s review. Report on expected Developments 250 Responsibility Statement by Management Here is a reference to websites or separate corporate publications. This reference, 53 Business Review as a cross-reference not provided for by law or by the German Accounting Standards 251 Independent Auditor’s Report 75 Combined non-fnancial Declaration (DRS) No. 20, is not subject of an auditor’s review. 258 Forward-looking Statements 91 Annual fnancial Statements of TUI AG 94 Information required under Takeover Law Unless stated otherwise, all change fgures refer to the corresponding period from the previous year. 97 TUI Shares (not part of the Management Report) 3 CONTENTS FINANCIAL YEAR 2020 COMBINED MANAGEMENT REPORT CO R P O R AT E GOVERNANCE CO N S O L I DAT E D FINANCIAL STATEMENTS AND NOTES 1 FINANCIAL YEAR 2020 5 Financial Highlights 6 Interview with Friedrich Joussen 10 Group Executive Committee 11 Report of the Supervisory Board 19 Audit Committee Report 4 CONTENTS FINANCIAL YEAR 2020 FINANCIAL HIGHLIGHTS 5 Financial Highlights 6 Interview with Friedrich Joussen Due to rounding, some of the fgures may not add up precisely to the stated totals, and percentages may not precisely refect 10 Group Executive TUI Group – fnancial highlights the absolute fgures. Committee 2020 2019 Var. in % This Annual Report 2020 of the TUI Group was prepared for the reporting period from 1 October 2019 to 30 September 2020. 11 R eport of the € million adjusted Supervisory Board TUI Group applied IFRS 16 from 1 October 2019. Prior year fgures were not adjusted. 19 Audit Committee Report Revenue 7,943.7 18,928.1 – 58.0 Please refer to page 154 for the Restatement of comparative periods. Underlying EBIT (IAS 17) 1 In FY 2020, underlying EBIT is also adjusted for the earnings efect of IFRS 16 (’underlying EBIT (IAS 17)’) as part of internal reporting COMBINED in order to facili-tate year-on-year comparability. Accordingly, adjusted EBIT (IAS 17) represents the segment performance measure Hotels & Resorts –399.6 451.8 n. a. M A N AG E M E N T within the meaning of IFRS 8. Cruises –322.8 366.0 n. a. REPORT 1 TUI Musement – 114.6 55.7 n. a. We defne 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 29 CO R P O R AT E Holiday Experiences – 837.0 873.5 n. a. 2 EBITDA is defned as earnings before interest, income taxes, goodwill impairment and amortisation and write-downs of other GOVERNANCE Northern Region –975.1 58.5 n. a. intangible assets, depreciation and write-downs of property, plant and equipment, investments and current assets. 3 Equity divided by balance sheet total in %, variance is given in percentage points. CO N S O L I DAT E D Central Region –619.8 101.9 n. a. FINANCIAL STATEMENTS Western Region – 440.8 – 28.6 n. a. AND NOTES Markets & Airlines –2,035.7 131.8 n. a. All other segments – 160.2 – 111.8 – 43.3 TUI Group – 3,032.8 893.5 n. a. Underlying EBITDA (IAS 17) 2 – 2,242.6 1,359.5 n. a. Underlying EBIT (IFRS 16) – 2,997.0 893.5 n. a. EBIT (IFRS 16) 1 – 2,927.4 768.7 n. a. Underlying EBITDA (IFRS 16) – 1,615.0 1,359.5 n. a. EBITDA (IFRS 16) 2 – 1,355.0 1,277.5 n. a. Group loss –3,139.1 532.1 n. a. Earnings per share € – 5.34 0.71 n. a. Net capex and investment – 149.3 1,118.4 n. a. Equity ratio (30 Sept) 3 % 1.4 25.7 – 24.3 Net fnancial position (30 Sept) –6,420.9 – 909.7 – 605.8 Employees (30 Sept) 48,330 71,473 – 32.4 5 CONTENTS FINANCIAL YEAR 2020 INTERVIEW WITH FRIEDRICH JOUSSEN 5 Financial Highlights 6 Interview with Friedrich Joussen »TUI WAS IN ROBUST HEALTH 10 Group Executive Committee 11 R eport of the BEFORE THE CRISIS, AND Supervisory Board 19 Audit Committee Report AFTER THE CRISIS WE WILL BE COMBINED M A N AG E M E N T IN ROBUST HEALTH AGAIN.« REPORT CO R P O R AT E GOVERNANCE CO N S O L I DAT E D It was going to be a record year. But then COVID-19 FINANCIAL STATEMENTS AND NOTES rocked the world as we know it – and brought tourism to a standstill. In this interview, CEO Fritz Joussen doesn’t just describe what the crisis has meant for TUI. He also reveals how the Group is preparing for a diferent world after the pandemic and reaping the benefts of decisions taken long before the crisis. FRIEDRICH JOUSSEN 6 Chief Executive Ofcer CONTENTS FINANCIAL YEAR 2020 5 Financial Highlights 6 Interview with Friedrich Joussen 10 Group Executive Committee Mr Joussen, 2020 has tested TUI in ways nobody The media and the public were asking whether TUI When will you restore last year’s levels? »We showed that holidays 11 Report of the could have imagined. And it all began so well … is relevant to the system. Is it? People want to travel. COVID-19 hasn’t changed that. Supervisory Board Yes, we really were on course for a record year. We We are a global market leader with German roots. 2021 will be a transition year, but the summer bookings in 2020 can be safe and yet 19 Audit Committee Report went into fnancial year 2020 stronger than ever before. Looking around Europe, we can say that TUI plays a so far have been very encouraging. We are still taking TUI had never taken so many bookings in January in the stabilising role in Southern Europe, and in Northern things as they come, but as it stands now – and de- relaxing.« company’s entire history, 14 per cent more than the Africa too, with investment, infrastructure and jobs. pending on how the travel restrictions pan out – I am COMBINED previous year. And in February the trend was unbroken. In some countries tourism contributes over 20 per cent assuming our business will return to normal in 2022. M A N AG E M E N T to the gross domestic product. Where there is tourism, Besides, package holidays are very popular compared REPORT Then came the shutdown on 16 March … everything fares better, from education to health care. with individual travel. They ofer maximum safety and CO R P O R AT E … like slamming on the brake in the middle of a motor- We need to preserve that stability and TUI is making a reliability, and all from a one-stop shop. GOVERNANCE way. TUI’s sales hit zero virtually overnight. Suddenly we substantial contribution towards that. CO N S O L I DAT E D had to tackle three crises at once. First, we had about TUI will be paying back loans for a long time … FINANCIAL STATEMENTS 200,000 holiday-makers and 2,000 employees out in the Are holidays too risky in a pandemic? We are getting ready for that. TUI will be leaner, faster AND NOTES destinations who had to be brought back when the No, people can travel safely even in a pandemic! The and more efcient. In the long run that makes us more shutdown caught them by surprise. From every corner overwhelming majority of travellers returning with a proftable. But we are also getting ready for a diferent of the globe, sometimes under difcult conditions. COVID-19 infection weren’t ordinary tourists, but peop- world after the pandemic: COVID-19 has sped up so Parallel to that we had to suspend operations and cut le who had been visiting friends and family abroad.