General Accounting Principles of the Combined Financial Statements
In January 2018, REWE-Beteiligungs-Holding International GmbH, Cologne, acquired a further 11.23 per cent interest in the associate UAB Palink, Vilnius, Lithuania (hereinafter "UAB Palink"), followed by another 13.27 per cent in July 2018. On acquiring the two tranches, REWE-Beteiligungs-Holding International GmbH held a 68.85 per cent interest and thus control over UAB Palink. An additional 24.90 per cent interest was acquired in September 2018. The initial consolidation date is 1 August 2018.
|in million €||UAB Palink|
|Property, plant and equipment||94.0|
|Cash and cash equivalents||37.9|
|Deferred tax assets||5.5|
|Deferred tax liabilities||3.5|
|Fair value of net assets||86.2|
|Fair value of previously held shares||135.4|
The goodwill primarily reflects location advantages and synergies. It is not tax deductible. The remeasurement of the existing shares (55.58 per cent) resulted in a gain of 11.1 million euros, which is recognised under other operating income. The existing shares were measured using a DCF method.
The receivables amount to 3.5 million euros gross, of which 1.0 million euros is expected to be uncollectable. Between 1 August 2018 and 31 December 2018, UAB Palink contributed 274.2 million euros to revenue and 9.1 million euros to earnings in the Combined Financial Statements. Had the company been consolidated as at 1 January 2018, it would have contributed an additional 378.4 million euros to revenue and an additional 7.3 million euros to earnings in the Combined Financial Statements. Negligible acquisition-related costs were incurred in connection with the acquisition of UAB Palink, which are recognised under other operating expenses. The acquisition resulted in a cash inflow of 16.2 million euros as at the initial date of consolidation.
In accordance with the purchase agreement dated 5 March 2018, DER Touristik Group GmbH, Cologne, acquired all shares in Travel LAB SAS, Bloom Investissements SAS and Key 2014 SAS, each with registered office in Saint-Ouen, France (hereinafter "Travel Lab"). Travel Lab is a tour operator which mainly offers guided tours, beach holidays at locations in the Indian Ocean and exclusive cruises. The acquisition served to tap a new source market in the area of tourism. The initial consolidation date is 1 March 2018.
|in million €||Travel Lab|
|Property, plant and equipment||1.2|
|Other financial assets||0.3|
|Cash and cash equivalents||15.0|
|Current income tax receivables||0.5|
|Other financial liabilities||0.2|
|Fair value of net assets||13.8|
The goodwill is attributable to the incoming employees and future synergies. It is not tax deductible. The trade receivables amount to 18.9 million euros gross, of which 0.3 million euros is expected to be uncollectable. A contingent payment was agreed with the previous owner in connection with the acquisition; this payment is not part of the purchase price but rather a separate transaction. The payment must be made if certain earnings targets are exceeded. The earnings targets were not reached on the reporting date, meaning that a liability did not have to be recognised.
Between 1 March and 31 December 2018, Travel Lab contributed 113.0 million euros to revenue and 0.9 million euros to earnings in the Combined Financial Statements. Negligible acquisition-related costs were incurred in connection with the first-time inclusion of Travel Lab and are recognised under other operating expenses. The acquisition resulted in a cash outflow of 15.5 million euros.
In accordance with the agreement dated 31 October 2018, DER Touristik UK Limited, Dorking, United Kingdom, acquired all shares in Journey Latin America Limited, London, United Kingdom. Journey Latin America Limited is a special organiser of travel to Central and South America. The initial consolidation date is 31 October 2018.
|in million €||Journey|
|Other financial assets||0.4|
|Cash and cash equivalents||7.9|
|Fair value of net assets||2.7|
The goodwill primarily reflects the synergies and expertise of the specialist organiser. Between 31 October 2018 and 31 December 2018, Journey Latin America Limited contributed 4.1 million euros to revenue and 0.3 million euros to earnings in the Combined Financial Statements. Only immaterial acquisition-related costs were incurred as part of the acquisition; they are recognised under other operating expenses. The acquisition resulted in a cash outflow of 0.3 million euros.
In September 2017, DER Touristik Nordic AB, Stockholm, Sweden, acquired Xtravel AB, Stockholm, Sweden. The company was classified as immaterial upon acquisition and was fully consolidated for the first time on 1 January 2018 due to an increase in business volume. In exercising the option under IFRS 1.18 in conjunction with IFRS 1.C1, no retrospective purchase price allocation in accordance with IFRS 3 was performed. The cost was 1.7 million euros. This resulted primarily in additions to trade receivables (0.4 million euros), cash (0.6 million euros) and other liabilities (1.2 million euros). The first-time inclusion resulted in 1.8 million euros in goodwill.
Under the agreement dated 14 December 2017, DERPART Reisevertrieb GmbH, Frankfurt, acquired all shares in Reisebüro Rade GmbH, Offenburg. The company operates travel agencies in five locations in the Offenburg metropolitan area. The initial consolidation date was 1 January 2018. The costs to acquire the shares amounted to 2.6 million euros. This resulted primarily in additions to cash and cash equivalents (1.7 million euros) and other liabilities (1.7 million euros). The acquisition resulted in 1.2 million euros in goodwill. The company contributed 3.0 million euros to revenue and 0.4 million euros to earnings in the Combined Financial Statements.
In November 2018, PENNY MARKET S.R.L., Milan, Italy, acquired two stores in Italy. The acquisition took the form of an asset deal. The cost was 1.8 million euros. This resulted in immaterial additions to property, plant and equipment and other liabilities. The acquisition resulted in 1.6 million euros in goodwill, which primarily reflected the value of advantageous locations.
OOO BILLA, Moscow, Russia, acquired a total of 12 stores in Russia during the financial year. The acquisitions took the form of asset deals which did not meet the requirements of IFRS 3. Of the 23.9 million euros in costs, 7.2 million euros was paid during the financial year. The acquisition primarily resulted in additions to immaterial assets. Due to a deterioration in the revenue forecasts for the acquired stores, impairment losses of 6.8 million euros on the acquired immaterial assets were recognised in 2018.