Notes to the Consolidated Income Statement

In the completed financial year, the TUI Group's business volume was slightly higher than in financial year 2024 due to higher average prices, mainly in Markets + Airline. 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-leases. In financial year 2025, consolidated revenue increased by 4.4% year-on-year from €23.2bn to €24.2bn.

Future revenue from performance obligations not yet delivered as at 30 September 2025, of which at least 12 months are between the contract start (booking date) and the contract end date (travel end date), totals €1,097.3m (previous year €980.6m). Of this amount, revenues of €852.2m (previous year €932.5m) will be realised in the next 12 months, €81.1m in 1–5 years and the remaining revenues afterwards.

The touristic advance payments received (contract liabilities) are presented in Note 32.

(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 4.4% from €21.2bn to €22.2bn in financial year 2025.

Other administrative expenses mainly increased due to a rise in wages and salaries.

The cost of sales and administrative expenses include the following expenses for personnel and depreciation/amortisation/impairment:

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 €2.6bn in the previous year to €2.8bn. The increase is mainly attributable to higher wages and salaries as well as increased social security contributions, which are primarily due to the higher wage and salary levels in the financial year 2025. Additionally, in the financial year 2025 personnel expenses comprise the voluntary redundancy program to reduce workforce in the Markets + Airline division and all other segments.

The average annual headcount (excluding trainees) evolved as follows:

In financial year 2025, impairment losses of €32,9m (previous year €33.7m) are presented within cost of sales. In the prior financial year, €2.2m was presented in administrative expenses.

Impairment losses of €28.0m (previous year €22.9m) relate to property, plant and equipment. Additionally €1.4m (previous year €11.9m) relate to right-of-use assets and €3.5m (previous year €1.1m) to other intangible assets.

In financial year 2025, reversals of impairment losses of €32.5m (previous year €44.1m) were recognized which are all presented in cost of sales.

For details of the impairment losses and reversals of impairment losses effected in financial year 2025, please refer to the respective sections in the Notes to the consolidated statement of financial position. A breakdown of impairments and reversals of impairments by segments is presented in Segment Reporting.

Emission Trading Schemes

During the financial year an expense of €101.3m (previous year €75.8m) was recognised for the obligation incurred to surrender emission allowances, mainly under the EU Emission Trading Scheme (EU ETS). This expense was presented in cost of sales.

(3) Other income and other expenses

Other income in financial year 2025 mainly consists of €11.7m from the sale of the ARP Group, €4.4m from the sale of aircraft assets, €4.3m from reclassification of exchange differences.

In the previous year, this item had primarily included a gain of €5.1m from the disposal of aircraft assets, €3.0m income the remeasurements of leasing contracts and €1.6m from the sale of companies.

Other expenses in financial year 2025 mainly consist of €10.2m from the sale of aircraft assets and €3.8m from foreign currency effects.

In the previous year, other expenses included in particular the expenses from the disposal of aircraft assets of €13.1m.

(4) Financial income

The decline in financial income by €8.7m in the financial year 2025 mainly results from lower interest income from foreign currency translation of financial instruments. Furthermore, the interest income from bank deposits and liquid assets in money market funds decreased mainly due to lower interest rates. The valuation of termination rights of the sustainability-linked bond issued in 2024 results in an interest income of €2.1m in the current financial year (previous year: €3.9m).

(5) Financial expenses

In the period under review, financial expenses decreased by €89.3m. The decline is primarily attributable to lower interest expenses on bonds. The partly repurchase of the convertible bond issued in financial year 2021 led to additional interest expenses in the previous year. The decrease is partly offset by higher interest expenses for the new convertible bond and the sustainability-linked bond both issued in the same year. Furthermore, the reduction in other interest and similar expenses is mainly due to a lower utilisation of the revolving credit facility.

(6) Share of result of joint ventures and associates

The share of result of joint ventures and associates of €463.9m (previous year €371.7m) 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 2025, which resulted in no impairments (previous year €0.2m) and in reversals of impairment losses of €0.7m in the Central Region segment (previous year €0.0m).

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

TUI Group’s German companies have to pay corporation tax of 15.0% and trade tax of 16.2% (previous year 15.7%). The increase is due to higher municipal assessment rates. In addition a solidarity surcharge of 5.5% is levied on the corporate income tax. Furthermore, when measuring deferred taxes, it was also taken into account that, pursuant to the “Act on an Immediate Tax Investment Program to Strengthen Germany as a Business Location” (Federal Law Gazette I 2025 No. 161 of July 18, 2025), adopted in July 2025, the corporate income tax rate will be reduced by one percentage point annually from 2028 through 2032.

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%.

In financial year 2025, the tax expense from actual taxes attributable to prior periods totalled €2.8m (previous year tax expense of €9.0m).

In the financial year deferred tax expenses include income from the reassessment of tax loss carryforwards in Germany of €39.7m (previous year tax income €26.6m).

In financial year 2025, tax expense totalled €192.4m (previous year €154.0m) 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.

The effect from the change in tax rate and tax law in financial year 2025, amounting to €24.0 million, is primarily due to the future gradual reduction of the corporate income tax rate in Germany.

(8) Group profit attributable to shareholders of TUI AG

In financial year 2025, the share in the Group profit attributable to TUI AG shareholders increased from €507.1m in the prior year to €635.9m.

(9) Group profit attributable to non-controlling interest

The Group profit attributable to non-controlling interest primarily relates to the RIUSA II Group with €202.3m (previous year €197.5m) in the Hotels & Resorts segment.

(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 diluted earnings per share are calculated under the assumption that all potentially dilutive convertible bonds are converted into shares. The average number of shares issued is therefore increased by the potential shares that could arise from the convertible bond issued in July 2024 with a nominal value of €487m. At a current conversion price of €9.60, the maximum number of potential shares from the execution of the conversion rights is 50,729,166 shares (previous year: time-weighted from issuance 9,286,487 shares). The earnings attributable to TUI shareholders are increased by the difference between the interest charges and the tax income from the convertible bond amounting to €17.8m (previous year € 2.8m).

Contrary to this, the convertible bond issued in April and July 2021 was not considered in determining the diluted earnings per share as of 30 September, 2025, as the instrument would have been anti-dilutive, as in the previous year. The convertible bond could have potentially diluted earnings per share in the future, had it not been repaid after the balance sheet date. Exercising the conversion rights could have increased the number of shares by 4,409,333 shares (previous year: 4,409,333 shares) based on the current conversion price of €26.67 (previous year €26.67). For further information, please refer to Note 50 ‘Subsequent events after the balance sheet date’.

(11) Taxes attributable to other comprehensive income

In the period under review, corporate income taxes in the amount of €0.0m were recognized directly in equity (previous year €0.0m).