Quarterly Report • Oct 30, 2013
Quarterly Report
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Semi Semi-annual financial report Q2 2013
| 1 January to 30 June | ||||
|---|---|---|---|---|
| 2013 EUR thousand |
2012 EUR thousand |
% | ||
| Revenue | 15,459 | 14,040 | + 10% | |
| EBIT | 163 | 2,991 | - 95% | |
| Net result for the period | -410 | 2,055 | - 120% | |
| Earnings per share in EUR | ||||
| basic | -0.20 | 1.01 | - 120% | |
| diluted | -0.20 | 1.01 | - 120% |
The Travel24 Group was created with the acquisition of numerous entities in the third quarter of 2012. Accordingly, the figures for 2012 are of limited value for comparison purposes!
| MESSAGE TO THE SHAREHOLDERS 5 | |
|---|---|
| GROUP MANAGEMENT REPORT 6 | |
| CORPORATE STRUCTURE 6 | |
| BUSINESS CONDITIONS 6 | |
| BUSINESS STRATEGY 6 | |
| TRAVEL AGENCY 7 | |
| MARKETING & KEY PERFORMANCE INDICATORS 7 | |
| RESULTS OF OPERATIONS, FINANCIAL POSITION AND NET ASSETS 7 | |
| REVENUES AND RESULTS 7 | |
| NOTES TO THE BALANCE SHEET 8 | |
| EMPLOYEES 8 | |
| OPPORTUNITIES AND RISKS REPORT 8 | |
| OUTLOOK 9 | |
| CONSOLIDATED BALANCE SHEET 10 | |
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 12 | |
| CONSOLIDATED CASH FLOW STATEMENT 13 | |
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 14 | |
| NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 15 | |
| I. GENERAL INFORMATION 15 |
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| II. ACCOUNTING AND MEASUREMENT PRINCIPLES 15 |
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| II.1 ACCOUNTING BASIS 15 |
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| II.2 INITIAL APPLICATION OF NEW OR AMENDED STANDARDS IN FINANCIAL YEAR 2013 15 |
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| II.3 SCOPE OF CONSOLIDATION 16 |
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| III. SIGNIFICANT MATTERS FOR THE ASSET, FINANCIAL AND INCOME POSITION IN THE FIRST HALF-YEAR 2013 16 |
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| IV. NOTES TO THE CONSOLIDATED BALANCE SHEET 16 |
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| V. NOTES TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNT 17 |
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| VI. SEGMENT REPORTING 17 |
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| VII. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES 18 |
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| VIII. EVENTS SUBSEQUENT TO THE REPORTING DATE 18 |
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| INVESTOR RELATIONS 18 | |
| SHAREHOLDINGS OF MEMBERS OF THE MANAGEMENT BOARD AND MEMBERS OF | |
|---|---|
| THE SUPERVISORY BOARD 18 | |
| RESPONSIBILITY STATEMENT OF THE LEGAL REPRESENTATIVES 19 | |
| REPORTING CALENDAR 20 | |
| LEGAL NOTICE 21 |
Dear Shareholders, Customers and Business Friends,
Ladies and Gentlemen,
In the first-half year of 2013 Travel24.com AG continued to be successful in the online travel market. Overall, there was a slight growth in revenues, however results were significantly lower than in the first half of the previous year. This is, as far as the operating results are concerned, primarily a result of the proportionate increase in the level of investments made in France and Great Britain as part of the strategy to drive the business into international markets. In addition, increased competitive pressures in the package tour sector in the domestic market resulted in a slight reduction in the number of online bookings generated despite the marketing budget being held at approximately the same level.
In addition, operating results (EBIT) were affected by the expense recorded for property taxes incurred on the property acquired in the third quarter of 2012.
One milestone achieved this half-year was the successful launch of the hotel booking portal in Germany and in Great Britain in Q2/2013.
Leipzig, in October 2013
Your
Armin Schauer
Managing Board of Travel24.com AG
The illustration below shows the structure of the Group at 30 June:
The online travel market overall experienced a low level of growth in the first quarter of 2013. Market conditions for business growth in the domestic German market were generally positive, however the number of providers and new substitute products in the package tour sector is a potential source of shifts in demand. Within the European market we see good prospects for further growth in the online travel market despite the continuing mood of economic crisis.
We continue to view the prospects positively for our new segment "Hotel Business".
Based on the know-how gained over many years, Travel24.com AG continues to drive the expansion of the business into international markets (Switzerland, the Netherlands, Great Britain and France). The market presence in the different countries will be identical where possible. The websites in the different markets will be adjusted as necessary. To some extent, for example in fulfilment, agreements will be entered into with external providers to ensure the relevant market know-how is available. The launch of an additional travel portal is planned for France in the third quarter. The expansion into foreign markets will continue to be driven forward using a minimal cost approach. The next stage of the internationalisation will be the roll-out of various hotel booking portals within 2013.
The number of tourist bookings increased significantly compared to the same period in 2012. This is primarily a result of the ramp-up of the strong flight business in France in Q2/2013. The number of bookings in the package tour segment fell due to the weak early booking season and to the increased level of competition in the domestic German market.
The tourist portals continues to offer a portfolio which includes over 70 relevant German, Austrian and Swiss tour operators, all major cruise line operators and over 200,000 hotels and holiday homes. The airline portfolio includes more than 750 scheduled, charter and budget providers.
In Germany, our core market, we use primarily TV advertising and the increased efficiency of online processes to increase brand awareness and to keep the level of bookings up to a constant high level. The growth strategy in the international environment will be driven primarily by online marketing. Online marketing continues to include all standard practices such as search engine marketing, newsletter advertising, and the targeted use of online and classic banner ads as well as affiliate marketing. All marketing tools were continuously optimized and adjusted to the corresponding markets.
The Group was formed in the third quarter of 2012 following the acquisition of the assets of Travel 24 Hotel AG. There is no impairment in the comparability of the income statement as the Hotel Business segment which is currently being established does not yet generate revenues or – with the exception of property taxes – no significant expenses. The comparative figures already include the assets of Travel 24 Hotel AG.
The internet business segment generated revenue growth in the first six months (from EUR 14.0 million to EUR 15.5 million; +10 %). Increased marketing expenses in particular as well as legal, audit and consultancy costs resulted in a significantly (87 %) lower operating result in the first half-year (down from EUR 3.0 million to EUR 0.4 million).
The significant increase in interest expenses (+ EUR 0.7 million) is due to interest incurred on the corporate bond issued in the third quarter of 2012, resulting in a loss for the period overall of EUR 0.4 million after generating a profit in the first half-year of the comparative period of EUR 2.1 million.
The balance sheet total fell slightly compared to 31 December 2012, from EUR 28.6 million to EUR 28.2 million, although there has been a shift in the maturity structure of the balance sheet.
The carrying value of non-current assets increased by EUR 2.0 million (10 %); this is almost exclusively a result of the continued construction work for the renovation of the hotel buildings in Cologne and Leipzig. In the contrary direction current assets fell by EUR 2.4 million as a result of the reduction in receivables due from affiliated companies. Non-current assets as a percentage of the total increased accordingly from 69 % to 77 %.
The negative retained earnings increased slightly as a result of the net loss for the current half-year period, the Group's equity totals EUR 4.1 million at the reporting date. As a result the equity ratio has decreased slightly (14 %).
On the equity and liabilities side of the balance sheet the maturity structure of the balance sheet is largely unchanged. Non-current liabilities comprise 62 % (31 December 2012: 61 %) of total capital.
Travel24.com AG employed seven employees (excluding management board members) at the balance sheet date 30 June 2013.
With the increasing popularity of the internet as a booking medium, the online sale of holiday travel continues to enjoy above average growth rates. The pressure on the sales prices has increased with new competitors entering the market.
To some extent, the entry into new European markets has market-specific risks. These include faulty or insufficient technical and thus product side market penetration, necessary adjustment in the marketing mix, delays to market entry resulting from acquiring licenses from state authorities, under performance of partners in product and fulfilment as well as specific economic factors which can affect the business. Global risks such as terror attacks or major environmental disasters and political changes which impact the general travel urge remain imminent.
However, the macroeconomic and industry-specific market environment is still sufficiently favourable for a positive development: the internet business across Europe as a whole has continued to grow slightly despite the continuing current economic and financial crisis, and we expect this trend to continue in the forthcoming years. Against this backdrop, and based on assumptions made for the Group's core business for technology, products, sales, marketing and fulfilment, the company expects continued growth of sales volume in the future from the internet travel sales business segment in existing markets, and a successful start and/or expansion of the business in new markets.
Following the comparatively strong revenues achieved in the first half-year 2013 a slight revenue increase is expected for the financial year as a whole. However, weaker net results in comparison with 2012 can be expected as a result of the high level of initial marketing investment undertaken in international markets.
Travel24.com AG plans to continue the expansion of the business throughout the remainder of 2013. The focus will be on growth in France and Great Britain. In addition it is planned to launch international websites focussed on the growing hotel booking business during the course of the year. European countries are in particular focus.
The new Hotel Industry business segment will continue to be characterized by the ongoing construction phase in coming quarters. The first revenues can be expected from 2015.
Current planning indicates that revenue improvements can be expected for the financial year 2013 as a whole. This revenue growth should primarily be generated by expanding the presence in European markets. This requires continued relatively high initial investments in marketing as the level of brand awareness of the Travel24 brands in those markets is still relatively weak. For this reason operating results significantly lower than the 2012 level, at break-even level, can be expected for the financial year as a whole.
As of 30 June 2013
| 30 June | 31 December | |
|---|---|---|
| 2013 | 2012 | |
| ASSETS | EUR | EUR |
| NON-CURRENT ASSETS | ||
| Intangible Assets | ||
| Intangible assets purchased | 4,225,634.60 | 4,225,634.60 |
| 4,225,634.60 | 4,225,634.60 | |
| Property, plant and equipment | ||
| Land | 4,906,948.99 | 4,843,948.99 |
| Construction in process | 8,531,488.10 | 6,674,104.45 |
| 13,438,437.09 | 11,518,053.44 | |
| Financial Assets | ||
| Other loans | 3,573,263.91 | 3,510,763.89 |
| 3,573,263.91 | 3,510,763.89 | |
| Deferred tax assets | 585,415.80 | 585,415.80 |
| TOTAL NON-CURRENT ASSETS | 21,822,751.40 | 19,839,867.73 |
| CURRENT ASSETS | ||
| Receivables and other assets | ||
| Trade receivables | 113,933.18 | 8,906.91 |
| Receivables due from affiliated companies | 2,111,862.60 | 5,487,491.12 |
| Other financial assets | 267,000.00 | 277,000.00 |
| Other non-financial assets | 2,258,229.45 | 1,936,754.40 |
| 4,751,025.23 | 7,710,152.43 | |
| Cash | 1,646,120.20 | 1,056,154.46 |
| TOTAL CURRENT ASSETS | 6,397,145.43 | 8,766,306.89 |
| BALANCE SHEET TOTAL | 28,219,896.83 | 28,606,174.62 |
| 30 June | 31 December | |
|---|---|---|
| 2013 | 2012 | |
| EQUITY AND LIABILITIES | EUR | EUR |
| EQUITY | ||
| Subscribed capital | 2,033,585.00 | 2,033,585.00 |
| Capital reserve | 2,913,974.00 | 2,913,974.00 |
| Retained Earnings | -878,747.17 | -468,514.80 |
| Equity of the owners of the parent company | 4,068,811.83 | 4,479,044.20 |
| TOTAL EQUITY | 4,068,811.83 | 4,479,044.20 |
| LIABILITIES | ||
| NON-CURRENT LIABILITIES | ||
| Financial liabilities | 17,279,731.11 | 17,229,831.11 |
| Deferred tax liabilities | 140,857.34 | 156,825.34 |
| TOTAL NON-CURRENT LIABILITIES | 17,420,588.45 | 17,386,656.45 |
| CURRENT LIABILITIES | ||
| Tax liabilities | 2,267,079.36 | 2,586,406.97 |
| Provisions | 2,323,149.50 | 2,440,478.35 |
| Financial liabilities | 1,047,250.00 | 383,500.00 |
| Trade payables | 668,486.16 | 662,837.59 |
| Other liabilities | 424,531.53 | 667,251.06 |
| TOTAL CURRENT LIABILITIES | 6,730,496.55 | 6,740,473.97 |
| TOTAL LIABILITIES | 24,151,085.00 | 24,127,130.42 |
| BALANCE SHEET TOTAL | 28,219,896.83 | 28,606,174.62 |
From 1 January to 30 June 2013
| Q2 figures | 1st half-year | |||
|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | |
| EUR | EUR | EUR | EUR | |
| 1. Revenue | 7,524,348.74 | 6,634,593.68 | 15,458,887.56 | 14,039,574.99 |
| 2. Other operating income | 288.31 | 58.76 | 144,905.21 | 4,066.20 |
| 3. Cost of materials | -7,233,091.85 | -5,561,865.30 | -14,691,517.06 | -10,688,820.19 |
| 4. Personnel expenses | -56,928.11 | -154,767.93 | -109,479.27 | -256,408.80 |
| 5. Other operating expenses | -542,775.14 | 338,031.53 | -639,934.21 | -107,654.64 |
| 6. Operational result | -308,158.05 | 1,256,050.74 | 162,862.23 | 2,990,757.56 |
| 7. Interest income | 48,783.34 | 34,645.98 | 135,257.32 | 73,976.34 |
| 8. Interest expenses | -356,835.55 | -16,321.77 | -724,318.24 | -22,149.54 |
| 9. Financial result | -308,052.21 | 18,324.21 | -589,060.92 | 51,826.80 |
| 10. Result before taxes | -616,210.26 | 1,274,374.95 | -426,198.69 | 3,042,584.36 |
| 11. Tax income (2012: tax expenses) | 100,232.37 | -420,637.08 | 15,966.32 | -987,356.40 |
| 12. Net loss for the period (2012: net income) | -515,977.89 | 853,737.87 | -410,232.37 | 2,055,227.96 |
| 13. Other comprehensive income | 0 | 0 | 0 | 0 |
| 14. Comprehensive income | -515,977.89 | 853,737.87 | -410,232.37 | 2,055,227.96 |
| From net result for the period/comprehensive income | ||||
| für nicht beherrschende Anteilseigner is attributable: to owners of the parent company |
-515,977.89 | 853,737.87 | -410,232.37 | 2,055,227.96 |
| Earnings per share in EUR (basic and diluted) | -0.25 | 0.42 | -0.20 | 1.01 |
From 1 January to 30 June 2013
| 1 January - 30 June | |||
|---|---|---|---|
| 2013 | 2012 | ||
| EUR | EUR | ||
| Cash flow from operating activities | |||
| Net loss for the period (2012: net income for the period) | -410,232.37 | 2,055,227.96 | |
| + Income taxes |
-15,966.32 | 987,356.40 | |
| + / - Financial result | 589,060.92 | -51,826.80 | |
| + / - Increase/decrease in provisions | -127,977.63 | 123,527.28 | |
| - / + Increase/decrease in trade receivables and other assets which are not attributable to investing or financing activities |
1,150,698.65 | -2,153,051.57 | |
| + / - Increase/decrease in trade payables and other liabilities which are not attributable to investing or financing activities |
-442,164.36 | 30,348.04 | |
| - Interest paid |
-19.46 | -22,149.54 | |
| + Interest received |
257.30 | 73,976.34 | |
| - Income tax paid |
-380,343.18 | -100,867.20 | |
| = Cash flow from operating activities |
363,313.55 | 942,540.91 | |
| - Payments for investments in property, plant and equipment |
-1,283,347.81 | 0.00 | |
| = Cash flow from investing activities |
-1,283,347.81 | 0.00 | |
| + Inflow from the issue of a bond |
1,510,000.00 | 0.00 | |
| = Cash flow from financing activities |
1,510,000.00 | 0.00 | |
| Net changes in cash | 589,965.74 | 942,540.91 | |
| Cash at the beginning of the period | 1,056,154.46 | 35,254.31 | |
| Cash at the end of the period | 1,646,120.20 | 977,795.22 | |
As of 30 June 2013
| Outstanding shares |
Subscribed capital |
Capital reserve | Retained Earnings |
Total Equity | |
|---|---|---|---|---|---|
| number | EUR | EUR | EUR | EUR | |
| As of 31 December 2011 | 2,033,585 | 2,033,585.00 | 2,913,974.00 | -2,156,928.83 | 2,790,630.17 |
| Comprehensive income HY1 2012 | 0.00 | 0.00 | 2,055,227.96 | 2,055,227.96 | |
| As of 30 June 2012 | 2,033,585 | 2,033,585.00 | 2,913,974.00 | -101,700.87 | 4,845,858.13 |
| As of 31 December 2012 | 2,033,585 | 2,033,585.00 | 2,913,974.00 | -468,514.80 | 4,479,044.20 |
| Comprehensive income HY1 2013 | 0.00 | 0.00 | -410,232.37 | -410,232.37 | |
| As of 30 June 2013 | 2,033,585 | 2,033,585.00 | 2,913,974.00 | -878,747.17 | 4,068,811.83 |
These condensed interim consolidated financial statements of Travel24.com AG were prepared in accordance with the International Financial Reporting Standards (IFRS) and the interpretations of the IFRS Interpretations Committee (IFRIC/SIC), as applicable and binding in the European Union. In particular they comply with requirements applicable to interim reporting in accordance with IAS 34.
The consolidated financial statements as at 30 June 2013 have not been subject to review by an auditor and have not been audited in accordance with Section 317 of the German Commercial Code.
The consolidated financial statements are prepared in euro (EUR) as the majority of the group transactions are realised in that currency. All amounts are stated in thousand euro (EUR thousand) unless otherwise stated.
Amounts are rounded up/down to the nearest even number. As a result, rounding differences may occur.
These condensed interim consolidated financial statements of Travel24.com AG were, with the exception of the initial application of new or amended standards or interpretations, prepared under the same accounting and measurement principles that were applied in the preparation of the IFRS consolidated financial statements of Travel24.com AG as of 31 December 2012.
For the purposes of presenting the condensed interim consolidated statement of comprehensive income, a total figure is shown for the total of cost of materials, personnel expenses and tax expense. These condensed consolidated financial statements properly do not include all of the disclosures that would be required in a set of annual consolidated financial statements prepared at year end and should therefore be read together with the consolidated financial statements for the year ended 31 December 2012. This particularly applies to the section entitled "Use of estimates".
In preparing interim financial statements, the Management Board must necessarily make the best possible estimates and assumptions, based on current information, which have an effect on the assets and liabilities presented and on disclosures of contingent assets and liabilities, as well as on income and expenses reported in the period. The actual result of later events, when they subsequently occur, may differ from those estimates.
We refer to the disclosures made in the consolidated financial statements as of 31 December 2012.
All subsidiaries are included in these interim consolidated financial statements. There are no joint-ventures or associated companies.
With the exception of the formation of a French subsidiary there have been no changes in the scope of the consolidation since 31 December 2012.
As the Group was first created in the third quarter of 2012 the comparative figures for the second quarter of 2012 and for the first-half year as a whole (i.e. of the parent Company only) are of limited use for comparison purposes.
In comparison with the second half-year 2012 there were no significant transactions to report in the reporting period.
The balance sheet total is largely unchanged. The carrying value of construction in progress included in non-current assets increased by EUR 1,857 thousand as a result of the continued investment in real estate properties already owned by the Group, of which only EUR 1,283 thousand resulted in cash flows in the period.
The total reduction of current assets amounting to EUR 2,369 thousand is primarily a result of lower receivables due from affiliated companies which fell by EUR 3,376 thousand due, amongst other reasons, to the successive planned repayments made to repay a receivable against Unister Holding GmbH in connection with the issue of the bond in 2012. The planned repayments made amounted to EUR 1,500 thousand and are shown in the cash flow statement as cash inflow from the issue of a bond.
The component elements of other non-financial assets are largely the same as at the comparative balance sheet date; more than 50 % of the carrying value represents value added tax receivables due from the tax office.
Provisions included in current liabilities fell by EUR 117 thousand. This is primarily a result of the release to income of provisions totalling EUR 144 thousand for cancellation risks following changes in contractual arrangements with Unister GmbH. The provision for contingent losses first recorded at 31 December 2012 remains unchanged at EUR 1,600 thousand. The provision for legal costs of approximately EUR 421 thousand is largely unchanged.
As in prior periods current financial liabilities include exclusively the successively increasing interest payment obligations from the bond, which are payable in September 2013. The reduction of other liabilities is primarily a result of lower value added tax liabilities.
Revenues are exclusively revenues from commissions, of which EUR 6,943 thousand (HY1 2012: EUR 7,906 thousand) are in respect of retail travel commissions, EUR 6,366 thousand (HY1 2012: EUR 3,774 thousand) relate to flight retail commissions and EUR 2,150 thousand (HY1 2012: EUR 2,360 thousand) relate to commissions for additional travel services.
The increase in other operating income is due to the release of provisions for cancellation costs described above.
Other operating expenses have increased more than fivefold. The change results primarily from charges for property taxes of EUR 196 thousand, for which there is no corresponding expense in the previous year. In addition increases of legal, audit and professional consulting fees from EUR 61 thousand to EUR 274 thousand were recorded.
The significant increase in interest expenses (increase of EUR 702 thousand) results from interest expenses accounted for under the effective interest method arising on the bond issued in September 2012.
The following segment information shows information pertaining to the Group's two segments, the segment Internet (the parent Company's only segment) and the segment Hotel Business (which is in the process of being established). There have been no significant changes in the assets or liabilities reported by either segment compared to the position at 31 December 2012. In the Hotel Business segment, however, more investments were made in the building of hotels. The resulting cash flows in the first half-year 2013 can be seen in the cash flow from investments section of the consolidated statement of cash flows.
The revenues totalling EUR 15,459 thousand are wholly attributable to the segment Internet. No inter-segment revenues between the two segments arose in the period.
In the comparative period there was only one segment, the segment Internet.
Of the Group's total operating result (result before interest and income taxes) of EUR +163 thousand for the first half-year 2013 a total of EUR +394 thousand is attributable to the segment Internet and EUR -231 thousand is attributable to the segment Hotel Business. In the comparative period there was only one segment, the segment Internet. The significant loss reported by the Hotel Business segment is almost exclusively a result of charges for property taxes.
The reconciliation of the sum of the segment results for the period (EUR +163 thousand) to the consolidated result before taxes can be directly obtained from the consolidated statement of comprehensive income.
We refer to the presentation in the 2012 annual report for a description of the nature of the respective transactions. Almost all revenues and material expenses represent transactions with Unister GmbH. There were no transactions with LOET Trading AG in the period.
There were no significant reportable events subsequent to the balance sheet date.
Share capital of Travel24.com AG
The total number of the voting rights of Travel24.com AG remained unchanged at 30 June 2013 and totalled 2,033,585.
As at the balance sheet date of 30 June 2013, the shares held by members of the management board and supervisory boards were as follows:
| Shares | Options | |
|---|---|---|
| Management Board | ||
| Armin Schauer | 0 | 0 |
| Supervisory Board | ||
| Daniel Kirchhof | 150 | 0 |
| Oliver Schilling | 24,556 | 0 |
| Detlef Kurt Schubert | 0 | 0 |
I confirm that to the best of my knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, financial position and income position of the Group. Also, I confirm that the interim Group management report includes a fair review of business developments including the results of the business and the position of the Group. The principal opportunities and risks associated with the expected development of the Group for the remaining period of the financial year have been described.
Leipzig, in October 2013
The Travel24.com AG Management Board
Armin Schauer
Publication of quarterly report Q3 2013
Travel24.com AG Barfußgässchen 11 04109 Leipzig
Security identification numbers of the shares
WKN: A0L 1NQ ISIN: DE000A0L 1NQ8
Security identification numbers of the bonds
WKN: A1PGRG DE 000 A1PGRG2)
Telephone: +49 - (0) 341 - 65050 - 23200 Fax +49 - (0) 341 - 65050 - 23299
www.travel24.com
Travel24.com AG Investor Relations
Armin Schauer Barfußgässchen 11 04109 Leipzig Telephone: +49 - (0) 341 - 65050 - 23200 E-Mail: [email protected] Internet www.travel24.com
Registration court: Leipzig HRB 25538
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