Notes to the Consolidated Statement of Financial Position

(12) Goodwill

Disposals of goodwill are attributable to the divestment of several companies. In Central Region, goodwill declined by €0.2m following the sale of the shares in InteRes Gesellschaft für Informationstechnologie mbH. The sale of Ranger Safaris ltd., ARP Africa Travel Ltd. and Pollman’s tours and Safaris Ltd. (ARP group) resulted in the disposal of a part of the goodwill of the ‘Musement’ cash-generating unit (€5.8m). Goodwill disposal in the previous year related to the divestment of the Raiffeisen-Tours RT-Reisen GmbH (Central Region) and of Club Hotel CV SA (Robinson). Detailed information on acquisitions and divestments is provided in the section ‘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 2025, an decrease in the carrying amount of goodwill of €59.2m (previous year increase of €50.9m) resulted from foreign exchange differences.

The following table presents a breakdown of goodwill by the significant 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.

As at 30 September 2025, 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 2025. Different from the prior year, the impairment test for Marella Cruises at 30 September 2025 has been prepared under the assumption that future discounted cash flows are derived from the remaining useful life of the existing fleet. Budgeted revenues and EBIT margins are based on expectations of the future business performance. 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. In the sector Markets + Airline a risk premium of 2.4% (previous year 2.4%) was added to the cost of capital. For further information refer to ‘Key judgements, assumptions and estimates’. 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:

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 + Airline a risk premium of 2.4% (previous year 2.4%) was added to the cost of capital. For further information refer to ‘Key judgements, assumptions and estimates’. The following table shows the effects of potential deviations in fair value in financial year 2025:

The fair values determined in the sensitivity analysis would have led to an impairment requirement of €24.8m in the CGU Robinson if the WACC had increased by 100 basis points. 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.

As in the previous year, the financial impact of climate related risks on the business model of TUI was included in the impairment test of capitalised goodwill. 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 is relatively low. The financial impact overall is dependent on the degree to which 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 is particulary 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 opportunities were calculated for especially impacted energy intensive Markets + Airline. In September 2025, Marella Cruises withdraw from its shipbuilding capacities. The impairment test for Marella Cruises has therefore been prepared under the assumption that future discounted cash flows are derived from the remaining useful life of the existing fleet. Given this limited timeframe, climate-related risks are not expected to have a material impact; therefore, no sensitivity analysis has been performed.The sensitivity for climate related risks refers to an increase of climate related costs by 50%. The climate related opportunities 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 2025.

(13) Other intangible assets

The development of the line items of Other intangible assets in financial year 2025 is shown in the following table.

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 €111.6m as at 30 September 2025 (previous year €163.8m).

The impairments recognised for the financial year under review totalled €3.5m (previous year €1.1m). These are mainly attributable to internally generated and acquired computer software in TUI Musement (€2.6m) and software in the course of construction in ‘All other segments’ (€0.8m).

(14) Property, plant and equipment

The table below presents the development of the individual items of property, plant and equipment in financial year 2025.

In the financial year under review, the renovation of a hotel in Jamaica and the construction of a new hotel in Zanzibar, the construction of a new hotel and extension of an existing hotel in Mexico and the construction of a new hotel in Thailand led to additions to the Riu Group totalling €300.9m. These investments include an amount of €222.7m for assets under construction, €42.0m for payments in advance, €22.6m for other plant, operating and office equipment and €13.6m for hotels including land.

Additions to assets under construction include €68.8m in the refurbishment of cruise ships. Further additions to assets under construction relate with €17.9m to investments in aircraft.

In the financial year under review, advance payments of €200.6m (previous year €102.0m) were made for the future delivery of aircraft.

Further additions to aircraft assets include €63.7m for engines and spare parts.

The main disposals in the financial year under review include €40.7m (previous year €52.2m) 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 worth €13.5m relate to the sale of spare parts.

The review of the carrying amounts of property, plant and equipment resulted in impairment losses of €28.0m in the financial year under review (previous year €22.9m). The impairments notably included €24.7m relating to hotels including land and were attributable to hotels of Riu, TUI Blue and Magic Life in the Hotels & Resorts segment. The impairment loss of the previous year, mainly comprised €20.4m to hotels including land and were attributable to hotels of TUI Blue and Magic Life in the Hotels & Resorts segment.

The review of the carrying amounts also led to the reversal of impairment losses of €29.1m (previous year €35.6m). Essentially, the reversal of impairments of €10.9m were attributable to hotels of TUI Blue, Robinson and Magic Life in the Hotels & Resorts segment. In the previous year, reversal of impairments of €29.3m were attributable to hotels of TUI Blue, Robinson and Magic Life in the Hotels & Resorts segment. In addition, reversal of impairments of €18.2m (previous year €5.8m) were made for one Marella cruise ship in the Cruises segment.

In the financial year 2025, the assumptions regarding the expected residual values of Marella Cruise Ltd’s cruise ships were revised. Unlike the previous year, it is now assumed that, upon expiry of their economic useful life, the vessels can be disposed of at values exceeding scrap value. As a result, the estimated residual values of the cruise ships were increased by €56.9 million in total. This adjustment led to a decrease in depreciation expense of €3.5m for the current financial year. For the financial year 2026, depreciation expense is expected to decline by €7.0m due to this change.

The reclassification of property, plant and equipment to the balance sheet item ‘Assets held for sale’ related to €15.5m for the planned disposal of the Disposal Group TUI Blue Kalamota Island in the Hotels & Resorts segment. In this context, we refer to the section ‘Assets held for sale’.

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.

In the financial year under review, borrowing cost of €5.2m were capitalised as part of the acquisition cost (previous year none). These related to assets under construction in the Hotels & Resorts segment. The calculated average borrowing cost rate was 4.8%.

The carrying amount of property, plant and equipment subject to ownership restrictions or pledged as security totals €737.5m as at the balance sheet date (previous year €782.4m).

(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 assets.

The development of the right-of-use assets in financial year 2025 is presented in the table below:

Additions of €150.0m were attributable in particular to the rental of three aircraft and two aircraft engines (previous year €113.1m for the rental of six aircraft and one engine), some of which were acquired through sale and leaseback transactions.

Changes and remeasurements of existing leases increased the right-of-use assets by €322.3m. The increase is primarily driven by a large number of lease extensions for leased aircraft (€234.3m), hotel lease contracts (€39.2m) and leased travel agencies (€27.2m).

The transfer to property, plant and equipment led to a reduction in right-of-use assets of €115.7m and mainly result from reclassifications of a cruise ship (€66.2m) and of aircraft and aircraft engines (€48.3m) 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 31 ‘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 39 ‘Financial instruments’.

The table below presents the expenses and income carried in the consolidated income statement in financial year 2025 in connection with leases in which TUI is the lessee:

As in the previous year, the expenses from short-term leases relate mainly to the temporary rental of aircraft. Impairment losses of €1.3m were primarily attributable to leased travel agencies.

Gains from sale and leaseback transactions of €3.2m are attributable to aircraft financing. In the financial year under review, three newly delivered Boeing B737 MAX aircraft were refinanced by means of sale and leaseback contracts. As at 30 September 2025, lease liabilities resulting from these transactions totalled €66.2m. Gains obtained in the previous year of €4.9m related to sale and leaseback transactions for four newly delivered Boeing B737 MAX aircraft and one acquired engine. As at 30 September 2024, lease liabilities resulting from that transaction totalled €100.0m.

The cash outflows for leases totalled €913.0m (previous year €985.3m) in financial year 2025.

At the balance sheet date, unrecognised financial commitments for short-term leases amounted to €4.0m (previous year €4.1m). In addition, potential future lease payments from extension and termination options of €181.7m (previous year €205.2m, adjusted) 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. In financial year 2025, proceeds from operating leases worth €6.2m (previous year €7.2m) were carried in revenue. In addition, no income from finance leases (previous year €0.2m) was carried in the interest result.

The following table shows the reconciliation from the undiscounted lease payments to the net investment for the subleases classified as finance leases:

The table below comprises a maturity analysis of the undiscounted annual payments from leases in which TUI is the lessor:

(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 51. All joint arrangements are joint ventures. There are no joint operations within the meaning of IFRS 11.

All companies presented above are measured at equity.

The financial year of the American 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, Sunwing entered into a partnership with the TUI Group. Following this, Sunwing became a vertically integrated travel company comprising tour operator activities, an airline, and retail shops. Since the contribution of the hotel operations and development company Blue Diamond Hotels & Resorts Inc., St. Michael, Barbados, in September 2016, Sunwing has also legally included hotel operations with a chain of luxury beach resorts and hotels in the Caribbean and Mexico. At the end of 2024, the distribution of the hotels was taken over by a newly established corporate group in which TUI also holds an equity interest in the parent company. The hotel operations of Royalton Hotels International Limited, as well as the distribution activities of Midnight Holdings Limited, are presented in the Hotels & Resorts segment.

In 2023, Sunwing contributed its tour operator business, airline, and retail shops to the Canadian airline WestJet Airlines Ltd. The consideration primarily consisted of shares in the combined business as well as contingent consideration. As part of the transaction, the hotel operations were transferred to the newly established Midnight International Holdings Limited, in which the TUI Group holds a 49% interest. After completion of the transaction, Sunwing no longer has any operating business and was subsequently renamed Midnight Canada Inc. The TUI Group continues to hold a 49% interest in Midnight Canada Inc., which is allocated to the Northern Region segment.

Pep Toni Hotels S.A. is a company founded in 2023, that 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 cruises for the premium German-speaking market. TUI Cruises GmbH currently operates thirteen cruise ships (previous year twelve).

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.

In financial year 2025, TUI Group received dividends of €244.9m (previous year €54.9m) from its joint ventures and dividends of €13.2m (previous year €18.9m) 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.

Impairment of the carrying amounts of associates and joint ventures

The carrying amounts of associates and joint ventures were tested for impairment if there was an indicator of impairment. In addition all carrying amounts of associates and joint ventures which have been previously impaired 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 almost 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.

A reversal of impairment of €0.7m relates to a company in the Central Region.

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 €22.5m (previous year €16.1m). In the period under review, unrecognised losses relating to WOT Hotels Vietnam increased by €3.4m to €17.8m, while unrecognised losses relating to Abou Soma for Hotels S. A. E. decreased by €0.7m to €0.9m. In addition, for the first time in financial year 2025, proportionate losses of Fly4 Airlines Green Limited amounting to €3.8m were not recognized. Accumulated unrecognised losses by associates of €2.7m (previous year €3.2m) 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

There were no contingent liabilities (previous year €0.0m) in respect of associates as at 30 September 2025. Contingent liabilities in respect of joint ventures totalled €3.1m (previous year €3.4m).

(17) Trade and other receivables

As at 30 September 2025, TUI has recognised deferred sales commissions to travel agencies and other distribution channels of €121.0m (previous year €111.7m) in respect of costs of obtaining a contract until the associated revenue was earned. In the financial year under review, sales commissions of €1,006.6m (previous year €939.6m) were recognised in profit and loss.

Security deposits include securities for payment service provider 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.

(19) Other non-financial assets

The other non-financial assets of €328.7m (previous year €269.8m) mainly result from purchased emission rights of €141.0m (previous year €108.0m), the overfunded pension plans of €95.0m (previous year €75.4m) and assets from other taxes of €60.0m (previous year €68.3m).

(20) Deferred tax assets and liabilities

Deferred tax assets include an amount of €301.4m (previous year €299.3m) expected to be realised after more than twelve months. Deferred tax liabilities include an amount of €87.5m (previous year €95.9m) expected to be realised after more than twelve months.

No deferred tax assets are recognised for deductible temporary differences of €62.0m (previous year €190.2m).

No deferred tax liabilities are carried for temporary differences of €117.1m (previous year €99.2m) between the net assets of subsidiaries and the respective taxable carrying amount 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 decreased by €72.1m compared to the previous year. Of this, €12.7m was recognised as deferred tax expenses in the income statement and €81.6m as an decrease 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 €-3.2m results from currency effects.

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 €2,719.1m (previous year €2,677.7m) were not recognised as the underlying losses carried forward were not expected to be utilised in the planning horizon.

In financial year 2025, tax savings of €9.3m (previous year €5.5m) 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 2024 for the potential tax savings resulting from these assets. Tax reductions from loss carry-backs (previous year €0.0m) were not realised.

Capitalised deferred tax assets from temporary differences and losses carried forward that are assessed as recoverable of €234.8m (previous year €287.1m) 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

In financial year 2025, inventories of €632.5m (previous year €632.4m) were recognised as an expense.

(22) Cash and cash equivalents

At 30 September 2025, cash and cash equivalents of €722.4m (previous year €690.5m) were subject to the restrictions listed below:

In September 2024, TUI AG and TUI UK Limited agreed updates to the long-term agreement with the pension trustee 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 €74.5m is deposited as security within bank accounts. TUI Group can only use that cash and cash equivalents if it provides alternative collateral.

Furthermore, an amount of €116.3m (previous year €117.0m) 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 €531.6m (previous year €495.4m) subject to restrictions relate to cash and cash equivalents to be deposited due to statutory or regulatory requirements, mainly in order to secure the potential liability to travel regulators and payment service providers. Money market funds meet the requirements of IAS7 for accounting as cash equivalents.

(23) Assets held for sale

As at 30 September 2025, assets of €16.3m of Hoteli Koločep d.d. (TUI Blue Kalamota Island), fully consolidated in Hotel & Resorts, were classified as held for sale. Immediately before the shares were classified, a prior impairment loss worth €8.0m was reversed. The income was recognized in the cost of sales. The disposal of the shareholding is expected by March 31, 2026.

In the period under review, additional assets were reclassified to assets held for sale. As at 31 March 2025, assets worth €4.8m were classified as held for sale. The classification covers the shares in the following three companies of ARP Group: Ranger Safaris Ltd., Arusha, ARP Africa Travel Ltd., Harrow, and Pollman’s Tours and Safaris Ltd, Mombasa. The divestment was completed as at 30 May 2025. For further information, please refer to the section on Acquisition – Divestments.

In the prior financial year no assets were classified as held for sale.

(24) Subscribed capital

TUI AG’s subscribed capital 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 €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 financial year the Company’s share capital amounted to €507,431,033.00 as before, divided into 507,431,033 no-par value registered shares, each accounting for €1.00 of the share capital.

Conditional capital

The Annual General Meeting on 25 March 2021 resolved to create conditional capital of €109.9m for the issuance of bonds. The authorisation to issue bonds with conversion or option rights as well as profit-sharing rights and income bonds (with or without fixed terms) is limited to a nominal amount of €2.0bn and will expire on 24 March 2026. This authorisation was almost fully utilised with the issuance of convertible bonds totalling €589.6m in April and July 2021. As at the reporting date, no shares had yet been issued to service the convertible bonds. In July 2024, a part of the outstanding principal amount of the convertible bonds was repurchased. As a result, the volume of the outstanding convertible bonds fell to €117.6m.

The Annual General Meeting on 13 February 2024 resolved to create further conditional capital for the issuance of bonds worth €50.7m. The authorisation to issue bonds with conversion or option rights as well as profit-sharing rights and income bonds (with or without fixed terms) is limited to a nominal amount of €1.5bn and will expire on 12 February 2029. This authorisation was nearly fully utilised with the issuance of convertible bonds totalling €487.0m in July 2024. As at the reporting date, no shares had yet been issued to service the convertible bonds.

The Annual General Meeting on 11 February 2025 resolved to create further conditional capital for the issuance of bonds worth €50.7m (2025 Conditional Capital). The authorisation to issue bonds with conversion or option rights as well as profit-sharing rights and income bonds (with or without fixed terms) is limited to a nominal amount of €1.5bn and will expire on 10 February 2030.

As at 30 September 2025, unused conversion rights from the convertible bonds issued in 2021 result in conditional capital worth €109.9m. Given a bond volume of €117.6m and a current conversion price of around €26.67 as at the balance sheet date, full conversion would result in utilisation of conditional capital of around €4.4m. Moreover, as at 30 September 2025, conditional capital totalling €50.7m results from unused conversion rights from the convertible bonds issued in 2024. TUI AG additionally has an unused conditional capital of €50.7m created by the Annual General Meeting on 11 February 2025, resulting in a total unused conditional capital of €211.3m as of the balance sheet date.

Authorised capital

The Annual General Meeting on 13 February 2024 resolved to create authorised capital amounting to €203.0m for the issuance of new shares against cash or non-cash contribution (2024/II Authorised Capital). The issuance of new shares against non-cash contribution excluding shareholders‘ subscription rights is limited to €50.7m. The authorisation for this Authorised Capital will expire on 12 February 2029.

The Annual General Meeting on 11 February 2025 resolved to create authorised capital of €50.7m for the issuance of new shares against cash or non-cash contribution (2025 Authorised Capital). The authorisation will expire on 10 February 2030.

At the balance sheet date, authorisations for unused authorised capital amounts to around €253.7m (previous year €253.7m).

(25) Capital reserves

The capital reserves comprise transfers from 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. As before, total capital reserves amount to €7,980.4m.

(26) Revenue reserves

In the completed financial year, TUI AG did not pay a dividend to its shareholders (previous year no dividend).

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 measured at fair value through other comprehensive income totals €2.2m (previous year €0.9m).

The proportion of gains and losses from cash flow hedges includes an amount of €217.5m (previous year €-591.2m), carried directly in equity in other comprehensive income (OCI I). The increase in financial year 2025 is mainly attributable to changes in exchange rates and fuel prices. The transaction costs incurred to hedge future cash flows of €-8.0m (previous year €5.7m) are also recognised directly in other comprehensive income (OCI II), outside profit or loss.

The remeasurement of pension obligations and assets (in particular actuarial gains or losses) is also carried directly in equity in other comprehensive income.

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) Use of Group profit available for distribution

In accordance with the German Stock Corporation Act, the Annual General Meeting adopts a resolution on the appropriation of distributable profit carried in TUI AG’s statutory financial statements. TUI AG’s profit for the year amounts to €431.2m (previous year profit for the year of €170.6m). After setting off the profit for the year against the profit/loss carried forward of €0.0m, profit available for distribution totals €431.2m as at 30 September 2025. A proposal by the Executive board will be submitted to the Annual General Meeting to use the profit available for distribution for the financial year under review of €50.7m to pay a dividend of €0.10 per dividend-bearing share and carry forward the amount of €380.5m remaining after deduction of the dividend to new account. The final dividend amount will depend on the number of dividend-bearing shares at the time the Annual General Meeting passes a resolution on the appropriation of distributable profit.

(28) 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.

(29) 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 in 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 €95.9m (previous year €95.7m).

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 rules of the plan, the plan participants and the employers pay salary-based contributions into the plan. There are no further obligations pursuant to the rules 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 €6.0m (previous year €5.8m). For the next financial year, contributions of €6.0m are expected.

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 67.2% (previous year 68.4%) of TUI Group’s total obligations at the balance sheet date. German plans account for a further 27.2% (previous year 25.2%).

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 2022. In the course of this valuation completed in the period under review, an agreement was reached with the trustees, which enables a very efficient management of cash flows to balance the existing shortfall while avoiding any overfunding in other plans. Due to this option, all funded schemes of our UK tour operators were fully funded from 30 June 2025. Accordingly, no further payments to the funds are currently required.

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.

In June 2023, the UK High Court (Virgin Media Limited v NTL Pension Trustees II Limited) ruled that certain historical amendments for contracted-out defined benefit schemes were invalid if they were not accompanied by the correct actuarial confirmation notice. The case was subsequently reviewed by the Court of Appeal in July 2024 which upheld the High Court’s decision. At this stage we concluded that one pension scheme is affected. A legislative initiative by the UK government is now intended to allow retrospective confirmation of historical amendments, provided the conditions for actuarial certification were met at the time. It is expected that this approach will lead to retrospective validation of the relevant amendments and that no adjustment to the balance sheet obligations will be required. We will continue to keep this matter under review.

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.

In the period under review, defined benefit pension obligations created total expenses of €38.6m for TUI Group, principally comprising current service cost and net interest. The administrative expenses shown relate to professional advisor costs for the pension plans settled from the plan assets.

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.

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 2025, other non-financial assets include excesses of €95.0m (previous year €75.4m).

The net defined benefit obligation decreased by €65.4m to €523.6m in the financial year under review. The present value of the obligation decreased by a total of €327.5m 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 less by only €262.1m.

In order to limit the risk arising from the obligation, the trustees of the UK pension schemes acquired a further insurance policy in December 2024 that securitises full reimbursement of the payments to be made for further parts of the existing obligations by insurers. This resulted in an actuarial loss of €13.2 million in the financial year. Similar insurance policies, which also securitise full reimbursement of the payments to be made for the insured obligations by insurers, had already been acquired in financial year 2021 for parts of the UK pension schemes, as well as in financial year 2024 for a smaller pension scheme of a holding company in the United Kingdom. In none of these transactions has the obligation to fulfil the pension commitments been assumed by the respective insurer. Accordingly, the insured parts of the pension plans continue to be recognised in the financial statements.

For some pension schemes in Switzerland, parts of the obligation and the corresponding assets were finally transferred to a pension fund, Profond Vorsorgeeinrichtung. This resulted in a settlement gain amounting to €1.2 million.

At the balance sheet date, TUI Group’s fund assets break down as shown in the table below.

The disclosed assets not recognised due to the asset ceiling under IAS 19 decreased from €3.0m to €2.5m in the period under review.

At the balance sheet date, as in the previous 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-issued 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.

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 € Corporates AA 10+ and iBoxx € 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 developments on the basis of the Continuous Mortality Investigation (CMI) 2023. 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.

The weighted average duration of the defined benefit obligations totalled 13.4 years (previous year 13.6 years) for the overall Group. In the UK, the weighted duration was 13.5 years (previous year 13.5 years), while it stood at 13.6 years (previous year 14.3 years) in Germany.

Fund assets are determined on the basis of the fair values of the funds invested as at 30 September 2025. 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 €6.3m (previous year €104.5m) to pension funds and pay pensions worth €35.6m (previous year €33.7m) for unfunded plans. The expected contribution to the pension funds is significantly reduced, as an agreement was reached with the trustees, based on the asset position of the UK pension schemes, that no further payments are currently required into the pension plans. 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 reduces 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. Conversely, 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.

(30) Other provisions

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.

Provisions for litigation relate to existing lawsuits. For further details on lawsuits, please refer to Note 36.

Provisions for emission trading obligations to return emissions certificates cover the obligations to submit certificates under the emissions trading schemes applicable to the TUI Group. The obligation for the current year relates to the EU-ETS schemes for Aviation and Shipping. The obligations are covered by already purchased certificates, which are presented under current other non-financial assets, please refer to Note 19.

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 38 ‘Share-based payments in accordance with IFRS 2’.

Restructuring provisions comprise payments for personnel measures as well as payments for the early termination of leases. They primarily relate to restructuring projects for which detailed, formal restructuring plans were drawn up and communicated to the parties concerned.

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 €12.5m 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 €25.9m (previous year €25.7m), recognised as an interest expense. An interest portion of €24.2 million (previous year €23.8million) is attributable to provisions for maintenance.

(31) Financial and lease liabilities

Non-current financial liabilities increased by €18.6m versus 30 September 2024 to €1,562.2m.

In January 2025, TUI AG fully terminated the remaining undrawn portion of €214m of the KfW portion of the Revolving Credit facility (RCF), so that the restrictions, for example, regarding a dividend payment by TUI AG, no longer apply.

In March 2025, TUI also fully terminated the syndicated credit facility with private banks and entered into a new revolving credit facility with a syndicate of banks. The new RCF has a volume of €1.89 billion, including a guarantee credit line of €190m. The RCF has a term of five years, maturing in March 2030. The interest terms and conditions under that revolving credit facility are linked to achieving the Group’s emission reduction targets confirmed by the Science Based Targets initiative. The RCF is subject to compliance with certain financial covenants, which are reviewed based on the last four reported quarters at the end of the financial year and at the end of the half year of a financial year. In July 2025, TUI included an additional underwriting bank in the existing credit facility under the same terms and conditions, in line with the contractual agreements concluded in March 2025, and upsized the credit facility by €76m.

Excluding the guarantee line, the total volume of the RCF at the end of the financial year under review amounts to €1.78bn. The revolving credit facility was not drawn as of 30 September 2025 (previous year €0.0m).

On 24 July 2025, TUI AG issued €250m of promissory notes (Schuldschein). The Schuldschein includes both fixed and floating rate tranches, with tenors of around 3 and 5 years. On 21 August 2025, the promissory notes were increased by a further €45.5m. The total value of promissory notes issued in 2025 is €295.5m. At an average tenor of 3.5 years, the coupon amounts to around 4 % p.a. based on current interest rates. Interest rate hedges with matching maturities were concluded in connection with the placement of the Schuldschein.

€209.5m of the Schuldschein issued in 2018, was repaid as scheduled in July 2025. As at 30 September 2025, €32.5m of the Schuldschein issued in 2018 remains outstanding and will mature in 2028.

The sustainability-linked senior notes issued in the previous year with a principal amount of €500m had a tenure of five years. The senior notes have an annual coupon of 5.875% and are linked to the achievement of a specific sustainability target by the end of the financial year ending on 30 September 2026. Failure to achieve the sustainability target will increase the annual coupon of the notes by 25 basis points for the remaining term. Individual termination rights of TUI AG contained in the sustainability-linked senior notes represent an embedded derivative and are subsequently accounted at fair value.

In July 2024, convertible bonds with a principal amount of €487m and a maturity date until July 2031 were also issued. The 2031 convertible bonds have a denomination of €100,000 per convertible bond with a fixed interest rate of 1.95% p.a., payable semi-annually in arrears. Investors have the option of converting the convertible bonds into ordinary shares. The initial conversion price was set at €9.60.

Of the convertible bonds issued in 2021 with a term until 2028, bonds with a total nominal value of €117.6m remained outstanding as of September 30, 2025. Due to the embedded redemption option for bond investors to demand early repayment of the bond in spring 2026, the bond was reclassified from non-current to current financial liabilities in the financial year under review. As a result of the repurchase of over 80% of the originally issued bonds carried out in financial year 2024, TUI had the right to redeem the remaining convertible bonds with a nominal value of €117.6m and repay them ahead of schedule. TUI exercised this right immediately after the balance sheet date. The adjustment of the carrying amount to the expected future cash flows resulted in a carrying amount recovery of €6.9m in the financial year under review.

The early termination rights of 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.

In November 2024, TUI entered an agreement with The Boeing Company and BOC Aviation (Cayman) Ltd. to finance pre-delivery payments for the supply of 14 aircraft. The term depends on the Boing aircraft delivery schedule and repayment is due 60 days prior to the delivery of each aircraft. The financing is subject to variable interest rates at market conditions. As of 30 September 2025, a carrying amount of €167.0m is reported. Based on the delivery dates expected as of the balance sheet date, the amounts are reported under current financial liabilities.

Current financial liabilities increased by €61.8m to €420.6m as at 30 September 2025.

The payments made in the period include the raisings of financial debt, as well as the repayment of financial debt and lease liabilities.

(32) Touristic advance payments received

(33) Other non-financial liabilities

(34) Liabilities related to assets held for sale

As at 30 September 2025, there are liabilities related to assets held for sale:

In the previous year there were no liabilities in relation to assets held for sale.

(35) Contingent liabilities

As at 30 September 2025, contingent liabilities amounted to €30.6m (previous year €61.4m), which, in our assessment, do not meet the criteria for recognition in the balance sheet under IAS 37. These primarily comprise obligations in connection with the issuance of bank guarantees, as well as assumed sureties and other guarantees.

(36) Litigation

TUI AG and its subsidiaries are involved or have been involved in several court or arbitration proceedings, which do not have a significant impact on their economic position as at 30 September 2025 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 existing and impending court or arbitration proceedings.

(37) Other financial commitments

As at 30 September 2025 order commitments in respect of capital expenditure decreased by €482.7m compared to 30 September 2024.

The decrease in order commitments is primarily attributable to a reduction in aircraft-related obligations. The decline is mainly driven by pre-delivery payments, the delivery of aircraft, and the impact of foreign exchange fluctuations on commitments denominated in non-functional currencies. While the overall reduction in aircraft-related commitments was partially offset by new aircraft orders, the total decrease in order commitments also reflects lower construction commitments within the Hotels and Resorts segment.

(38) Share-based payments in accordance with IFRS 2

All awards existing as of 30 September 2025 from share-based remuneration programs are recognized as cash-settled remuneration.

The following share-based payment schemes are in effect within TUI AG as at 30 September 2025.

Phantom shares under the long-term incentive plan (LTI) for the executive board of TUI AG

LTI with share allocation from financial year 2024 for the active members of the Executive Board of TUI AG

The LTI is a several-year variable remuneration based on phantom shares with a four-year performance reference period.

An individual target amount is agreed in the service agreement for each member of the Executive Board. For each financial year, a provisional number of phantom shares in TUI AG is granted to the members of the Executive Board at the start of the financial year, meaning 1 October of each year (“financial year of grant”). The period for measuring the performance targets ends on 30 September of the third financial year following the financial year of grant (“performance reference period”). This preliminary number of phantom shares will constitute the basis for the determination of the final performance-based payment for the tranche in question at the end of the respective performance reference period. The number of phantom shares provisionally granted is calculated based on the quotient of the target amount individually agreed in the service agreement and the average Xetra price of TUI AG shares (WKN: TUAG50) over the 20 trading days prior to the first day of the financial year of the grant. The claim to a payment only arises upon expiry of the four-year performance reference period and depends on whether or not the respective performance target is achieved.

The relevant performance target is the average annual reported Earnings per share (“reported EPS”) of TUI AG over the performance reference period. The performance target reported EPS is defined as the reported earnings per share from continuing operations shown in the approved and audited consolidated accounts of the TUI Group.

The target achievement for the reported EPS of TUI AG over the performance reference period is calculated as the arithmetic mean of the annual reported EPS target achievements during the performance reference period.

The annual target achievement for the reported EPS is calculated based on the reported EPS for the financial year in relation to the target value of the reported EPS for the same financial year. To this end, the Supervisory Board determines a minimum reported EPS value corresponding to a target achievement of 25%, a target reported EPS value corresponding to a target achievement of 100% and a maximum reported EPS value corresponding to a target achievement of 175% for the reported EPS for each financial year during the performance reference period. The Supervisory Board may set different target reported EPS values for the respective financial years of the four-year performance reference period.

If the minimum reported EPS value is not achieved in a financial year, the target achievement for that financial year is 0%. If the minimum reported EPS value is achieved exactly in a financial year, the target achievement for that financial year is 25%. If the target reported EPS value is achieved exactly in a financial year, the target achievement for that financial year is 100%. If the maximum reported EPS value is achieved or exceeded in a financial year, the maximum target achievement for that financial year is 175%. The annual target achievement is determined through linear interpolation between the minimum reported EPS value and the target reported EPS value and between the target reported EPS value and the maximum reported EPS value.

To determine the final number of phantom shares, the degree of target achievement of the average annual reported EPS of TUI AG over the performance reference period is multiplied by the provisional number of phantom shares. The payout is obtained by multiplying the final number of phantom shares by the average Xetra price of TUI AG shares over the last 20 trading days of in the respective performance reference period. The Supervisory Board reviews whether the amount payable should be reduced based on malus rules. The amount established in this way will be paid out in the month of the approval and audit of the consolidated accounts of the TUI Group for the last financial year of the performance reference period. The maximum LTI payout is capped at 240% of the target amount.

In accordance with section 87 (1) sentence 3 clause 2 AktG, the Supervisory Board is further entitled to limit the amount of the LTI to allow for extraordinary circumstances. In the event of capital or structural measures, corresponding adjustments in the number of phantom shares granted are to apply. In the event of delisting, the LTI will terminate as of the effective date of the delisting. In case of extraordinary events or developments, the Supervisory Board shall have the right to adjust the terms of the LTI at its due discretion. This allows for special situations that were not sufficiently factored into the targets previously set to be taken into account. In these cases, the Supervisory Board is also entitled to increase or reduce the amount payable to which a member of the Executive Board would be entitled when an extraordinary event or development is taken into account to the amount to which that member would be entitled if the extraordinary event or development were not taken into account.

If a member’s employment starts or ends during a year in progress, the target amount and thus the number of phantom shares granted must be reduced pro rata, where applicable retroactively. In the event of premature termination of the service agreement, the LTI is continued in principle according to the agreed targets and terms. If, however, the service agreement ends prior to the expiry of the performance period by extraordinary termination by TUI AG for a good cause attributable to the Executive Board member or by termination by the Executive Board member without good cause, all claims from LTI tranches not yet paid out shall lapse without replacement or remuneration.

LTI with share allocation for the financial years 2022 to 2023

The Long Term Incentive Plan (LTI) 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 agreements. 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 to payment 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 relevant for the LTI under the remuneration system is the average development of earnings per share (EPS). The average calculation over the four-year performance period is based on a pro forma adjusted earnings per share from continuing operations as reported in the annual report. The average EPS development per year (in %) is calculated from four equally weighted annual figures (in %). Each annual figure is calculated from the quotient of the current EPS and the EPS of the previous year. The first annual figure (“Start EPS”) is determined from the first EPS in the performance period and the last EPS before the start of 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 the performance 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 the performance 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 perfor-mance period up to an average annual 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 €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, LTI tranche 2022–2025 and LTI tranche 2023–2026.

In order to determine the final number of phantom shares, the degree of target achievement on the final day of the performance reference period is multiplied by the preliminary number of phantom shares. 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 LTI, the entitlement to payment of the LTI 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 LTI payout is capped at 240% of the individual target amount for each performance reference period. This means that there is an annual LTI cap which is determined individually for each Executive Board member. The Supervisory Board is furthermore, according to section 87 (1) sentence 3, second clause German stock corporation law, authorized to cap the LTI payout in case of extraordinary circumstances (e.g. company mergers, segment disposals, recognition of hidden reserves or external influences).

Performance Share Plan (PSP)

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 multi-year variable remuneration of the Board members until 2023. The performance period of the PSP is three years. The current PSP has been in effect in its current form since 2019.

Since LTI EPS22-23 and the current PSP follow common scheme principles, the following development of allocated phantom shares under the programs are shown on an aggregated basis.

Accounting for share-based payment schemes

As at 30 September 2025, all existing awards are recognised as cash-settled share-based payment schemes and are allocated with an exercise price of €0.00 (previous year €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 are allocated in the year in which the performance underlying the respective tranche actually takes place.

Overall, expenses from the addition of provisions for cash-settled share-based payments of €10.0m was recognised through profit or loss in financial year 2025 (previous year expenses €8.2m).

As at 30 September 2025, provisions and liabilities relating to entitlements under these long-term incentive programmes totalled €27.2m (previous year €18.9m).

(39) 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 by 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, the Nordic countries and Poland. 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 hedge 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 equity and earnings after income tax.

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, on embedded derivatives in bonds 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 reduction cycle.

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 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 hedge 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 and due to demand uncertainties in some of the world's major economies.

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). Where legally enforceable, financial assets and liabilities are netted. Credit risks are reviewed closely at 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 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 €1.0m. 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.

For the sustainability-related bond issued in financial year 2025, TUI has the right to terminate the bond early at certain repurchase prices in accordance with the bond terms and conditions. These termination rights represent embedded derivatives and are accounted for separately from the bond as derivative financial assets. As part of the bond, they are not subject to an own default risk.

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 classes: 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 divided into three stages. Stage 1 includes financial assets that are recognised for the first time or that show no significant increase in credit risk since initial recognition. In this stage, the expected credit losses that may arise from possible default events within the next 12 months after the respective balance sheet date are reported (12-month Expected Credit Losses (ECL)). Stage 2 includes financial assets for which there has been a significant increase in the probability of default since initial recognition. Stage 3 includes financial assets that in addition to the criteria of Stage 2, show objective evidence of impairment. In Stages 2 and 3, expected credit losses are considered for the entire term (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 trade 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 each respective year in relation to the receivables portfolio at the end of each financial year. This is multiplied by the probability that a receivable will age into the last maturity band. The loss rates determined are adjusted by credit default swap (CDS) rates to incorporate forward-looking information. The adjusted loss rates are based on average values from recent 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 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 initial recognition can be assigned to 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 three 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 carrying amount of the asset at default (exposure at default). TUI Group determines the probability 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 assigned to 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 assessed 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 of 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 1.1% (previous year 1.0%). The 1.1% results from a three-year average of the default rates determined individually for advances and loans, other receivables and assets as well as other financial assets.

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.

As at 30 September 2025, trade receivables were impaired in the amount of €23.7m (previous year €41.0m). The following overview shows the ageing structure of impairments of financial instruments classified as trade receivables.

The following tables show the analysis of the ageing structure 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.

The following overview shows the ageing structure of impairments of financial instruments classified as advances and loans.

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 were three stage transfers in the individual items listed there from Stage 2 to Stage 3 in the total amount of €26.3m (previous year: one transfers from Stage 3 to Stage 2 in the amount of €12.9m).

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 €12.0m (previous year €53.4m) relate to short-term deposits with banks. The full amount of these investments with a gross amount of €12.1m (previous year €53.6m) is not overdue. Impairments of €0.1m (previous year €0.2m) were carried in the framework of risk provisioning.

In the financial year 2025, there were cash inflows from impaired trade receivables and other receivables in the amount of €0.7m (previous year of €2.5m 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.

As at 30 September 2025, risk provisioning totals €2.7m (previous year €5.1m) for the other receivables and assets class and €0.1m (previous year €0.2m) for the other financial assets class as well as €0.7m (previous year €2.2m) for the advances and loans class.

As at 30 September, 2025, one instrument in class other receivables and assets and fourteen instruments in class advances and loans were reported in Stage 3 (previous year: two and ten 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). In the advances and loans class three transfers were made in the total amount of €1.9m (previous year: no transfer). No transfer was made in the other receivables and assets class (previous year: no transfer).

In the current financial year in class advances and loans no material impairments have been used (previous year: no material usage of impairments).

The tables below show a reconciliation of gross carrying amounts for financial assets measured at amortised cost:

There were no significant changes or modifications. There were three transfers of €28.2m in total from Stage 2 to Stage 3 (previous year: one transfer from Stage 3 to Stage 2: €12.9m).

There were no significant changes or modifications. There was one transfer from Stage 1 to Stage 3 (previous year no transfers). No newly issued or acquired instruments were impaired at the date of addition.

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 in the amount of €1.8 bn, supplemented by a sub-facility for the issuance of bank guarantees.

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, the sustainability-linked bond as well as the promissory note loans.

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.

The derivative financial instruments carried as Other derivative financial instruments are derivatives not designated as hedging instruments according to IFRS 9.

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 IFRS 9 is applied to forecast transactions. The rules of IAS 39 have been applied until 31 March 2024. 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-price risks.

At 30 September 2025, there are no longer any hedging relationships in place that had to be de-designated from hedge accounting in connection with the COVID-19 pandemic. As of 30 September 2024, only interest rate hedges were affected by these de-designations. The fair value of the reclassified interest rate hedges amounted to €0.8 million as of 30 September 2024, with a nominal volume of €46.0 million.

Cash flow hedges

At 30 September 2025, hedges in hedging relationships in accordance with IFRS 9 existed to manage cash flows in foreign currencies with maturities of up to three years (previous year up to three years). The fuel price hedges in hedging relationships in accordance with IFRS 9 had terms of up to three years (previous year up to two years). Hedging instruments used to protect variable interest payment obligations, which are designated as hedge accounting relationship under IFRS 9, are again in place in the year under review (none in the prior year). The maturities of the interest rate hedges extend up to five years. The impact on profit or loss of derivatives that have been designated as hedging relationships occurs at the time the underlying transaction occurs.

Other derivative financial instruments comprise the nominal value of derivative financial instruments 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 IFRS 9.

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 cumulative changes in fair value of the highly probable forecasted underlying transactions are used to determine the ineffective portions of hedges designated as cash flow hedges. In designating cash flow hedges, the forward element is partly not designated in hedge accounting as a hedge for some foreign exchange forward transactions. For foreign exchange forward transactions that are entered from 1 April 2024 and accounted for as cash flow hedges, the forward element is listed in the cost of hedging reserve and shown accordingly in the relevant tables. At the end of the calendar year 2025, the TUI Group will no longer have any foreign exchange forward contracts designated as cash flow hedges outstanding, for which the forward element is not recognized in the cost-of-hedging reserve. Derivatives without a hedging relationship in accordance with IFRS 9 are listed separately under other derivative financial instruments in all relevant tables.

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 during the financial year.

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 €279.1m (previous year: income of €35.8m) 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 €5.3m (previous year: expenses of €6.9m), carried in net interest income. The expenses or income from the hedging transactions are recorded in profit or loss when the corresponding underlying transactions occur by reclassifying the amounts recorded in equity without affecting profit or loss to the profit and loss statement.

Expenses of €4.9m (previous year: expenses of €22.3m) were 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.

Financial instruments which are entered into in order to hedge a risk position according to operational criteria but do not meet the criteria of IFRS 9 to qualify for hedge accounting are analogous to hedging instruments that are voluntarily not designated in hedge accounting are shown as other derivative financial instruments. They include foreign currency transactions entered 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

The fair values of non-current financial instruments measured at amortized cost correspond to the present values of the cash flows associated with the assets or liabilities, taking into account the current interest rate parameters that reflect market- and counterparty-related changes in terms and expectations. For current financial instruments measured at amortized cost, the carrying amount approximates the fair value due to the short remaining maturity.

The following table shows the reconciliation of balance sheet items to the classes of financial instruments, broken down by the book values and fair values of the financial instruments.

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 for sale’.

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.

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 are observable in the market for the asset or liability, either directly (as quoted prices) or indirectly (derivable from 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 2025
		Fair value hierarchy
€ million	Total	Level 1	Level 2	Level 3
Assets
Other receivables	21.2	-	-	21.2
Other financial assets	12.4	-	-	12.4
Derivative financial instruments
Hedging transactions	74.1	-	74.1	-
Other derivative financial instruments¹	42.8	-	42.8	-
Cash and cash equivalents	1,155.8	1,155.8	-	-
Liabilities
Derivative financial instruments
Hedging transactions	227.3	-	227.3	-
Other derivative financial instruments	13.1	-	13.1	-
¹ Including embedded derivatives
Hierarchy of financial instruments measured at fair value as at 30 Sep 2024
		Fair value hierarchy
€ million	Total	Level 1	Level 2	Level 3
Assets
Other receivables	-	-	-	-
Other financial assets	11.2	-	-	11.2
Derivative financial instruments
Hedging transactions	9.7	-	9.7	-
Other derivative financial instruments¹	21.1	-	21.1	-
Cash and cash equivalents	953.5	953.5	-	-
Liabilities
Derivative financial instruments
Hedging transactions	383.4	-	383.4	-
Other derivative financial instruments	76.0	-	76.0	-
¹ Including embedded derivatives

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 2025 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 non-current trade receivables and non-current other receivables, the fair value is determined as the present value of future cash flows, taking account of observable yield curves and the respective credit spread, which depends on the credit rating.
• The fair value of over-the-counter derivatives (including embedded 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 the spot or cash prices, taking account of forward premiums and discounts. The fair values of optional financial instruments are calculated on the basis of option pricing models. The fair values determined on the basis of the group’s own systems are periodically compared with fair value confirmations of the external counterparties.

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.

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 based on internally available information and updated if necessary.

A loan to the Atlantica Group, reported under other receivables, is included in the Level 3 valuation for the first time as of 30 September 2025. The fair value is based on significant unobservable inputs, particularly a WACC of 8.11%, an average EBITDA margin of 54.5%, and a long-term growth rate of 1%. A hypothetical adjustment of the WACC by +/-100 basis points and of the expected cash flows by +/-10% would have resulted in profit-or-loss-affecting changes in the fair value of -€1.8mn / €2.4m for the WACC and €1.6m / -€1.6m for the expected cash flows.

In principle, the unobservable input parameters relate to the following parameters: the (estimated) EBITDA margin is in a range between 24.1% and 34.8% (previous year -5.9% and 34.8%). The constant growth rate is 1% (previous year 1%). The weighted average cost of capital (WACC) is 9.32% (previous year 10.08%). 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.

Financial instruments classified as Other financial assets include shares in corporations. The total fair value of these financial investments is €11.5m (previous year €10.3m). None of these strategic financial investments were sold in the completed financial year. These financial investments resulted in dividend payments totalling €2.8m in the reporting period (previous year €0.1m).

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:

The presentation of the table has been adjusted compared to the previous year. The column “Fee income and expenses” has been added. The net result of “financial instruments at fair value through profit or loss” is reported without separating assets and liabilities.

The adjustment of the gross amount presented and published in the previous year, amounting to a total of -€58.7m, results from a correction in the determination of the expenses and income to be included.

Netting

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 €105.8 m as at 30 September 2025 (previous year €139.4 m), while the gross amount of the netted financial liabilities is €0.0 m as at 30 September 2025 (previous year €0.0 m).

(40) 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 to enable investments, dividend payments, and to 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 Note 31 ‘Financial and lease liabilities’. Additional information can be found in Note 39 ‘Financial instruments’.

Management variables used in capital management to measure and control the above objectives are Return On Invested Capital (ROIC) and the net 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 net leverage ratio as the ratio of gross financial debt plus lease liabilities minus cash and cash equivalents and other current financial assets to EBITDA. Due to lower net debt and the improvement in our EBITDA (underlying), our net-leverage ratio improved to 0.6x in the financial year 2025 (previous year: 0.8x). We are aiming for a net-leverage ratio of less than 0.5x in the mid-term.

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 €21.3m (previous year: €23.1m) 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.