eDreams ODIGEO S.A.

Good afternoon, everyone, and thank you all for joining us today for our Q1 fiscal year 2021 resource presentation for the three months ending 30th of June 2020. I'm David de la Roth, and I'm the Director of Investor Relations at the Dream Sotillo. As always, you can find the resource materials, including the presentation and our resource report, on the Investor Relations section of our website. I will now pass you over to Dana Dunn, our CEO, who will take you through the first part of the presentation. Thank you.

Thank you, David. Good afternoon, everyone, and thank you for joining us. Today, I'll give you an overview of our Q1 FY21 results and current trading to date. Following this, David Alitaga, our CFO, will take you through the performance of our consolidated financial statements in more detail. I will then do our closing remarks. please turn to slide four in which i give a summary of our performance to date during the first quarter we have seen a continued progress in particular june showing a 20 percentage point improvement in bookings growth versus april which is the bottom of the trough i'm also pleased to confirm that july and august also showed further improvements March to June 2020 was extraordinary for the industry and us. Revenue margin was down 880% year-on-year, 125 million less versus Q1 last financial year, amounting to only 17 million euros in Q1 FY21. All countries were affected. This was driven overall by a decrease in bookings of 88% as a result of COVID-19. Marginal profit, which is revenue margin minus variable costs, stood at 1.1 million positive, which shows our capacity to make profitable bookings even in this unprecedented negative conditions. And adjusted EBITDA resulted in a loss of 15 million euros, 43 million euros less versus the first quarter of last year. But we at EDM's Adigio have managed our liquidity and remain strong throughout this period. Cash development were not much different from the first quarter of FY20. Our liquidity position at the end of July stood at 167 million euros, which is higher than in June, which was at 132 million euros. The main reason for this development is high variability, good fixed cost management, and the improvement in bookings, which creates working capital inflow. and in addition we have no cash risk going forward our only covenant has been waived for the whole of fy21 as we've highlighted in our july results presentation we are using the crisis time to improve our strategic positioning which is visible through our main kpis for example prime the number of prime subscribers continues to increase and in the first quarter of fy21 we reached 564,000 Prime subscribers. That's 289,000 more subscribers than the first quarter of FY20. In other words, up 105% versus only one year ago. And we're on track to reach 2 million subscribers by 2023. Mobile bookings increased to 49% of total flight bookings versus 40 percent in q1 of fy20 diversification revenue has proven to be more resilient than our classic cuff to revenues such as revenue diversification ratio up to 54 percent from 46 percent a year ago and product diversification ratio up to 86 percent from 76 percent a year ago Short-term outlook, largely driven by travel restrictions, July and August is already at around minus 60%. Bookings growth year and year. But after is still uncertain and difficult to predict. Therefore, no guidance. Overall, we've proven we have a solid and robust business model, and we are setting ourselves up to win in the post-COVID-19 world. by seizing the right market segments and improving our product and customer experience please turn now to slide five in which i will update you on current trading current trading is showing gradually improved performance It shows overall month-on-month improved performance every month since April, in which April was the bottom of the trough. Note that European top six markets are recovering faster than rest of world. Specifically, we've seen our trading improving month-on-month since April, from the trough in April at minus 96% year-on-year growth in bookings to now minus 57% which is until the 23rd of August. Furthermore, we have seen this improvement across all our main markets. Also, our top six European markets are the ones that have seen a faster recovery since June versus rest of the world. We're very conscious that COVID-19 has caused an unparalleled level of flight cancellations. Behind each flight cancellation is a customer with unrealized travel plans and in need of a refund in most circumstances. Over the past years, we've prided ourselves as having the number one ranking in customer satisfaction. However, now we are very concerned how slow the airlines have reacted in refunding customers to date, with some customers waiting five months for a refund. We continue to champion our customers towards the airlines and the industry. In addition, for our part, at the beginning of the COVID-19 outbreak, we were inundated with a request from customers for refunds. And given the slowness at which the airlines continue to refund, we are still receiving unprecedented levels of customer queries. As a result, we continue to invest in customer services in the short term and for the longer term, have an ongoing effort to create a unique, omnichannel customer experience. Our goal is to make our customer journey frictionless and pain free. Please turn to slide six. We are pleased to continue to report a strong liquidity which is the consequence of our strong business model and active management of the situation we achieved this through one high variability of the majority of our costs variable costs which were 84 percent of our total costs in first quarter decreased by 84 percent two fixed costs were reduced by 10 percent even after a negative impact of 1.9 million euros in FX in the quarter. Without this negative impact from the FX, we would have seen, in fact, a decrease in our fixed costs of around minus 20%. Three, the gradual recovery of bookings since the trough of April resulted in inflow in working capital. And four, additional financial resources of 15 million euros from a government-sponsored loan due 2020-23. the overall result was an increase from 144 million euros of liquidity in march to 167 million euros in july 2020. please turn to slide seven overall diversification revenue is proven to be more resilient than classic customer revenue And our product diversification ratio and revenue diversification ratios have both improved. The product diversification ratio increased from 76% to 86%, which is a 10 percentage point improvement in one single year. Similarly, the revenue diversification ratio increased from 46% to 54%. Again, an 8 percentage point improvement in one single year. Moving to slide eight, which demonstrates the progress made against our other three KPIs. On an annualized basis, and to be expected, our customer repeat booking rate decreased due to the spread of COVID-19, in which hardly anyone traveled. This is reflected in the stringent way in which we calculate this ratio. However, if we exclude this impact, starting since the last week of February, and we follow the trend from that point until the end of the quarter, Q1 FY21 results in a 51% customer repeat booking rate. That's a one percentage point improvement versus the same time last year. Also, we continue to have further success increasing the number of customers booking through our mobile channel. In the last five years, mobile bookings has risen exponentially from 18% of total bookings to now 49%. We have always prioritized mobile and have had the industry's top ranking for Europe. Now in a post COVID-19 world, we see mobile bookings becoming even more important. And this is reflected in that almost 50% of our bookings are actually made on a mobile device. Lastly, on KPIs, let's look at the changes to the acquisition cost per booking index. This improved by 33 percentage points year on year. And this is due to the adaptability of our business and the fact that over 80% of our costs are variable. However, I do need to emphasize that this very low level is not sustainable. As travel restrictions ease, we expect to spend more in online marketing, and this ratio will trend back to more normalized levels. I will now hand you over to David Elitaga, who will take you through our consolidated results.

Thank you, Dana, and good afternoon, everyone. If you could all please turn to slide 10 of the presentation. I will take you through the financial results in more detail. Clearly, the pandemic had a significant impact in the fourth quarter of last year, and this has continued into the first three months of our current fiscal year. Let's outline how the first quarter of fiscal 21 has been. Looking at the income statement for the first quarter of fiscal 21 on slide 10, revenue margin decreased by 18%. of COVID-19. On the cost side, variable costs decreased by 84%, which is the result of the adaptability of our business model and following the decrease in bookings. Within the variable costs, different cost items have behaved differently. Acquisition costs and merchant costs have decreased on a per booking basis, while call center costs have increased on a per booking basis. which was needed to manage the unprecedented levels of incoming requests driven by the high level of cancellations due to COVID-19. Going forward, we believe it is important that we continue to invest in customer service capacity, as there is still a large amount of refunds pending from the airlines to our customers, and we need to help them in this process. Fixed costs decreased by 10%, even after a negative impact of 1.9 million euros in foreign exchange in the quarter. Without it, we would have seen a decrease in fixed costs of around 20% year on year. As a result, the first quarter adjusted EBITDA amounted to a loss of 14.7 billion euros, which is in line with the expectations that we had for these level of bookings. If we continue down the income statement, you will note that EBITDA amounted to a loss of 15.6 million. This was primarily due to a decrease by 7.8 million in the adjusted items, from 8.7 million to 0.9, mainly due to the absence of the expense in fiscal 20 related to the closing of Milan and Berlin call centers for a total amount of $7. from the fourth quarter of fiscal 2020. Full details of adjusted items can be found in our condensed consolidated interim financial statements and in the Excel file. The DNA and impairment increased by 14% relating to the increase of the capitalized software finalized in March 2020. Our overall financial loss decreased mainly due to the variation of the income from foreign exchange differences by 1.8 billion euros, offset by the increased interest expenses from the use of the super senior revolving credit facility. The income tax line presents an income of 6 million in the first quarter of fiscal 21, which compares with an expense of 2.7 million in the first quarter of fiscal 20, mainly due to the group recognizing a loss in this first quarter, which resulted in the recognition of deferred tax assets amounting to 6 million euros, as the group believes that the first quarter tax losses will be recovered in the same or subsequent years. Finally, adjusted net income stood at a loss of 23.6 million euros. We believe that adjusted net income better reflects the real dated insurance financial statements and notes turning now to slide 11 i will take you through the cash flow statement in the first quarter of fiscal 21 despite a significant reduction in bookings the group continued to have a strong balance sheet this continues to be the case in july and in august our liquidity position at the end of july is 167 million euros including 115 million euros undrawn from a super senior revolving credit facility, placing us in a position of strength despite the subdued level of activity in the market. Cash position stood at 71.2 million at the close of the first quarter of fiscal year. The cash performance during the first quarter was driven by, first, net cash from operating activities decreased 5.7 million lower than the same quarter of last year, mainly reflecting a working capital inflow of 21.6 million euros, which was due to the volume improvement experienced in June with the easing of travel restrictions. In the first fiscal quarter, we usually would have an outflow of working capital due to normal seasonality in our business. However, given we reached the trap of activity in April, and since then we have seen increases in bookings, even if the level of bookings year on year is negative, this results in working capital inflows. Income tax swung by €4.8 million from a payment of €4.7 million to a net collection of 0.1. Decrease in adjusted EBITDA by 42.9 million, following the decrease in bookings. And we experienced an outflow in non-cash items of 13.9 million when last year we had an inflow of 7.7. The driver of this quarter is that costs linked to COVID-19 flight cancellations were provisioned in fiscal 20 year end. But the outflow has happened during the last quarter. We have decreased cash used for investments by 2.8 million from 7.2 million to 4.4 due to the implementation of cost-saving measures to minimize the temporary impact of COVID-19. Cash used in financing amounted to 1.7 million in line with the same period of last year. I will now turn the presentation back to Dana to do the closing remarks.

Thank you, David. Please turn to slide 13, where I conclude by giving you a quick recap of our overall view. We believe we are positioning ourselves for real success in the post-COVID-19 world. The strength of our finances, the adaptability of our business model, the vast majority of costs being variable and the mitigating actions we have taken during the pandemic allow us to emerge strongly and well positioned from the crisis we have a liquidity position of 167 million euros at the end of july which could be used if needed in periods of slowing demand gross leverage ratios being waived for fiscal year 2021 gives us further financial flexibility we have no short-term financial debt payments and our senior notes and bank facilities are not due until 2023 we have kept our teams intact and motivated to go after our competitors and serve our customers we are leader in mobile product quality and revenue diversification and we're a true innovator in terms of subscription and customer proposition experience. And we focus exclusively on the leisure consumer in markets that have shown a good ability to respond quickly when travel restrictions start to ease. Thus, we believe our future is bright we will emerge a winner through these unique times and we use this time to ensure that we do win in the new world with that i would like to now turn it over to your questions we will answer the questions sent to us in writing in the webcast we will take questions on a first come first serve basis but we'll also try to group questions of similar nature Should we not have time to respond to all the questions from the webcast, the investor relations team will make sure those are answered afterwards.

Okay, we can start with the questions from the webcast. The first two questions come from Monia Chawi from RLAM Institutional Fixed Income. First question is, details on the pattern of bookings when localized increases of COVID cases hit some European countries, such as France and Spain, and some countries imposed quarantine rules as a consequence, for instance, the UK?

So for this one, I think what we've seen is that it was quite uniform across Europe, meaning including France and Spain, in Q1, where most of European countries went through, again, largely similar lockdown procedures. There were obviously country by country, let's say, nuances in how the governments approached it, but on the aggregate, it had roughly the same effect. and so um you know on businesses on travelers on consumers and so we did see that roughly similar patterns of travel or i should really say lack of travel in those markets, including Spain and France. Now, as basically most of the European countries started to ease lockdown restrictions, which was anywhere from the end of May to the end of June, depending upon the country, we found, therefore, similar types of reactions of travel. And so it did pick up, and you see that on our slides here. You see also we have the top six European markets, which would be the largest ones, which would include Spain and France. And it was very similar types of booking patterns in terms of picking up for that. I think there was a second part to a question about seasonal booking patterns for the rest of this financial year.

In a scenario of continued gradual decrease in COVID cases, and softening of traveling restrictions? Well, the two, let me take that one. The two drivers that I mentioned by the investor go in opposite directions. So it really depends on the relative strength of each one of those two drivers. From a few seasonality pattern, the months of September, October, November, December are on a declining rate, presuming that we were in a non-COVID situation. However, if there is a continued gradual decrease in COVID cases and a softening of travel restrictions, that will go in the opposite direction. what would be the net result of those two forces of opposite direction is difficult to say at this point. Now, let me go to the next questions that comes from Carlos Treviño of Santander. The first question is, could you comment on Booking's evolutions in August? Have you seen a continued and homogeneous improvement through the month? And is it running bookings better now than at the beginning of August, or it has been stable through the month? Could you elaborate in the reasons for the year-on-year drop in revenue for booking, both in your top six countries and specifically in the rest of the world, where the drop is significantly higher? which is the easier one to respond. The answer to that is that the revenue margin per booking has dropped a little bit because our bookings have come down by 87, our revenue margin has come down by 88%. Given the low level of bookings that we have had in this first quarter, I would not read too much into it. Let me remind you of a couple of things of how our platform works. The pricing of our bookings is dynamic and automatic, decided by the platform depending on the consumer's reaction at every point in time. At the same time, our cost of acquisition of the traffic is also dynamic according to the market conditions of the time that the platform envisages. And in any case, we always operate on a basis of optimizing revenue less those acquisition costs. So the machine keeps doing automatic decisions all of the time. For a relatively I would say, low level of variation on a period of low number of bookings and also a period in which customers' behavior is, I would say, changing a lot versus the usual. People book with a lot less days from booking to departure. the breakdown between domestic short haul and long haul has dramatically changed because the long haul has virtually disappeared from the market. I think it is very difficult to actually draw specific conclusions from this. So I would very much say point you in the direction of our platform operates. to make profitable bookings, and you have seen that the variability of the costs have demonstrated that it goes in the right direction, and that we operate at what we call a marginal profit, i.e., revenue margin less variable costs, which is positive, and we will continue to operate in that direction. Then about the first part of your question, which is about the more precise profile of how the bookings have evolved during the month of August. Let me pass that one to Dana.

And let me just say kind of to summarize what David was saying for Carlos and for others. Really, we started, you know, in April at minus 96 percent. And April, May and even to a certain extent, June were lockdown months. So whatever volume was out there would be, you know, not a normal market type of volume out there or a normal type of consumer. And so I really wouldn't read anything. Even if we were, let's say, two or five percentage points ahead or behind, the market was so low and you'd have to say a different market that I really wouldn't read anything into it. Now, in terms of where we are today, in terms of August, kind of the beginning versus more the end of August, We have seen continued improvements during the month of August. On that, you know, days do fluctuate up and down, but I'm trying to draw the bigger picture of how we start, let's say, on a rolling seven-day average at the beginning of August versus more towards the end of August. We are definitely improving on it. But again, I have to say, I mean, this is unknown, you know, so, you know, I can't say where we'll be at the end of September, end of October, because still the biggest driver is the easing of lockdown restrictions. um by countries and the grappling and the markets grappling with the covid 19 disease and that's the that's far bigger driver than anything else so what we do is we really are focused on really making sure that we continue to build great products great service for our customers longer term. And that is our true focus. It's much less about, you know, do we kind of, let's say, you know, win and, you know, and get this extra percentage point now or not now. And it's much more about building really long-term sustainable, great products, great services, building around prime, also servicing our customers and doing it really well, both right now, but then also building in some real competitive advantage about the way in which We're going to service our customers over the long term through our new omnichannel platform. And a number of other things I touched on in our July presentation as well. That truly is where the focus is much more.

Yeah. Let me move now to a set of questions. There are actually five questions from Nisla Nasir from Deutsche Bank. I'm going to take them one by one because otherwise it would be too long and difficult to follow. The first one is how do you think the step up in self quarantine requirements if one travels to tourism hotspots such as Spain impacts bookings in the coming months? I would say that the I would say that we haven't seen a major effect of the latest self-quarantine requirements. Those ones, for instance, from the UK have existed now for more than two weeks. And we have not seen a material difference in the booking trends in the UK versus in countries that are also main markets for us, like Spain or Italy or Germany. The second question would be, how much should we assume CapEx would be in the upcoming financial year? And I would say here that I would still refer to the guidance that we gave back in the month of April, in which we expect to reduce the capex by around 27% on a yearly basis. The third question is, can you tell us more about the booking behavior of your Prime subscribers? Are they responsible for a lot of the bookings you did see in the first quarter of fiscal 21? And how have trend rates been like for prime subscribers? And here, let me venture an answer and then Dana can compliment me. We have seen an increase in the percentage of the bookings that we get from the Prime subscribers. So Prime is proving to be a very useful mechanism for both our Prime subscribers, in which they get excellent conditions, and for ourselves because we get a lot more frequent travelers that choose us on an ongoing basis. In a context as well in which the number of overall bookings from the market is decreasing, the percentage of those bookings that come from prime subscribers is continuing to increase. And we have not seen any change in the level of churn from prime subscribers that became subscribers some time ago, which I think is in itself significant. quite a remarkable event because it means that our prime customers really see the value in the subscription with us. I don't know, Dan, if you want to say anything else or I should just move on.

No, I think that's good.

Okay. The next question is, again, from Isla. Could you remind us again what is eDream's exposure to the requests from customers for refunds? is the more revenue at risk and and here what i would say is when there is a booking on a period of about 1 to 15 days depending if it is a low cost or regular airline we pass that money over to the airline from that point in time the responsibility To refund the customer is a responsibility of the airline. However, that refund, the vast majority of the times, goes through us in order to get back to the airline. When we get a refund request from a customer, we pass on that refund request to the airline, and we wait for the airline to send us the cash over. Our exposure in terms of revenue comes from situations in which a customer may lose patience and may do a chargeback on the credit card in which they were charged, in which case that money comes out of our pocket. As of the end of March 2020, our fiscal year end, you will remember that we did a number of provisions for cancellations that could cause a cost for us. And it's related exactly with this mechanism. So far, those cancellations have proven to be a very good anticipation of the cost for us. So we have not updated the figure in any way because we're getting exactly what we expected to get at this point in time. The fifth one is, do you still believe business if the travel market remains depressed till February next year? IATA now expects air traffic to be down over 60% in 2020. Would that be a case assumption we could also assume for your bookings? Okay, let me talk about this too. And I want to refer to a statement that I already made back in the month of July, and I want to reaffirm that statement. At the moment, we said that with the liquidity we have on hand and a month has passed and the situation has not changed, actually has been, I would say, better than it has been because our liquidity has increased. We have money to sustain our activity for more than a year, even if there was an absence of bookings, a total absence of bookings. So we feel very comfortable with our financial situation in that respect. And then to the second part of your questions of whether the forecast of IATA of 60% decrease for the aggregate of calendar 2020 is a good case. There are two fundamental differences between what IATA forecasts and what structurally our business is. IATA forecasts the regular airlines market, which is a very meaningful proportion of the market, but it's not all of the market. There are a number of other carriers that don't belong to IATA, which are the low-cost carriers. that in situations such as the ones that we're living, actually are using more of their capacity in the air than the regular airlines are. And it's a pretty easy to understand rule because they have a cost to operate a plane which is lower than in the regular airlines and therefore can afford to have more planes, more seats in the air than the regular airlines do. The second difference is that for these regular airlines, a significant part of the revenues is the corporate travel. We do not operate into the corporate travel market. Our customers are leisure business. On that forecast of IETA that you are mentioning of 60% for the aggregate of calendar 2020, 6% down year on year, is composed of a number of months. For the month of July, which is the last one that has closed, in that forecast IATA said, we're going to do an 80% decrease in volume year on year. You have heard from us that our actual performance in July has been around the 60% down year on year. So there's a 20 point difference between our performance and the performance that IATA says exists for the regular airlines. And I've given you two main reasons of why that is. And that is going to continue to be the case. Now, if you even look at longer periods, right, I should say that in any projection, you're more likely to get it right for the first few months and get it wrong for the long term. Now, if you're getting it so wrong for the short term, vis-a-vis what we see in our trading, Let's not make any comments about how precise the long-term projection of IAT can be. And that is all of the questions that we have from Nisla. Our next set of questions come from Bruce Ivory from Cheney Capital. The first one is, could you provide the key terms of the 15 million government guaranteed loan, security, maturity, and interest rate, please? Maturity is 2023. Security, there is a lien on the eGreens brand up to a limit of 15 million euros. And the interest rate is cheaper than our rewarding credit facility, even though they have additional guarantee. And it is at your arrival plus 275 basis points. The second question is, could you give an indication of run rate EBITDA at booking levels of minus 60% on the prior year, which is broadly where the market is currently operating? It is... a little bit difficult to give a precise number because i would give him precise uh guidance and there are many moving pieces here for instance you know in one of the previous questions you know about the level of cancellations that there will be in the market and therefore what the what the movement of refunds would be but broadly speaking you have seen that at the level of bookings of 87 down year on year in the first quarter we have had a negative EBITDA of 14.7. At the level of minus 60%, our EBITDA is positive, but I'd rather not make a precise projection because I think it would be a bit too broad if I had to give you a range. The next question comes from Guillermo Santallo of CaixaBank. The first question is, Despite the progressive improvement activity throughout August, have you seen any regional impact of the rise in COVID-19 cases in specific countries?

The rise of cases in specific, I mean, well, yes, I think all of us have seen that, you know, clearly when people don't venture out of the house, and they're locked in there by government regulation, obviously over time then cases get to the lowest point. And once we start having contact, cases do start going up. And so I think from the low point of COVID cases, which would have been kind of in June, you know, as soon as people started venturing out, cases have been coming back. What we've seen is similarly is what we've seen. Sorry. Different is, is that the death rate so far, while it's gone up, haven't been at the same level versus, you know, the early part of the COVID-19 lockdown. And so, again, it will depend upon the extent to which government regulation really does impact travel restrictions on it. That will really drive the short term part of this and let's say consumer travel. What is absolutely 100 percent clear to me is is two things. One is that consumers absolutely want to travel. So within a matter of months, I mean. One month, 20% came back to the market. Two months, 40% came back to the market, right, in an incredibly short period of time. And you can't replace consumer travel. Professional, yes, but consumers, us as individuals, we want to have a holiday. We want to travel. You can't replace walking on a sandy beach. You can't replace going in the mountains, et cetera. And so that will absolutely return. It will return, you know, depending upon the virus and governmental restrictions. But absolutely longer term, I do firmly believe that the prognosis is very good.

The second question from is, have you seen any improvement in long haul bookings during July and August? And here we say that, you know, it's been in line with the general improvement. But having said that, they continue to represent a much smaller part of the overall set of bookings than they were a year ago because the number of restrictions to travel for intercontinental flights is much higher than it is for within Europe or within the region of Latin America, for instance.

Mm-hmm.

The next question comes from Louis Duarcoux from the Carlyle Group. It says, what does the 1.9 million foreign exchange impact in the quarter of fixed costs represent? The Euro versus GDP mismatch. The foreign exchange variations that affect us on the fixed costs have to do with the variation of foreign exchange rates for the bookings that we sell between the moment of the booking and the moment in which the cash comes into our accounts. And on the other hand, the variation between that same moment of the booking and the moment in which we pay the supplier when there is a mismatch in currencies. And the main currencies that affect us are GBP, US dollar, and Swedish krona. Those are the three more important ones. And after that you have Mexican peso and a long list of those. So it has to do with volatility of foreign exchange of periods for the sell side of two, three days, and for the buy side of about 10 to 15 days. The next question comes from from San Real. Can you please break out bookings trend into tourism versus professional travel? Well, as I said before, we don't do corporate travel. So you can assume that all of our bookings are for leisure. And the second, can you speak some more to the change in liquidity since June, please? Did you pay down the RCF with cash? Did the additional 15 million come in as a line or as a loan? Highest working capital now evolving with further rising bookings. Well, I think we've given the change from June to July. The 15 million loan from the government came in cash. It's not a line. In terms of the revolving credit facility, yes, we paid down 55 million because we were having an excess of cash in our accounts and we were unduly paying interest rates, so we've reduced the amount. But for the liquidity number, given that it includes both and availability under the reformer, it doesn't affect the overall number. It doesn't matter how much we have in our bank accounts versus availability under the RCF. And working capital during August, given that it has shown some improvement vis-a-vis July, is also showing an inflow of working capital in that respect. Federico C, which is the next investor, on which date is the revolving facilities financial covenant due to be tested again following the waiver? That would be on June of 2021. And it would only be tested if we have drawn at that moment in time more than 30%. of the 175 million. So this covenant is what is called a springing covenant. So there are possibilities that if we have at quarter end less than 52 million drawn on the revolver, then we actually do not even test the covenant either. The next question comes from Tom Gibney of BNP. To what extent were you required to book negative revenue margin in respect of cancellations? We don't book negative revenue margin in respect of cancellations. What we book is a cost of the potential chargeback that we could receive from a customer. And those for all of the cancellations that we were expecting for the summer, we booked already in our March financial statements, like I said before. The second question is, how has the share of OTAs in flight bookings and your share of OTA bookings developed in recent months?

Dana? Look, there's no easy metric to try to just go out to a trusted source and easily compare market shares. Having said that, we do have our own proprietary ones that we've created. It seems to indicate that we are gaining market share in the market. But let me put some also caveats on that, which is. Our focus is, as I've been saying repeatedly, we have a really strong balance sheet, a really strong business. We are using this time to really build excellent products and services, excellent propositions for our customers over the long term as really the main part of the market truly returns. for it so that we win in that, one. Two is we also are really prioritizing also servicing well our customers, right, because, you know, most bookings were canceled involuntarily by airlines, and we want to make certain that we service our customers and service them well. And so we've been investing very significantly in that as well. Now, even though I say our indicator looks like we're taking market share from others, we see competitors taking, let's say, one of three approaches in the marketplace. Some competitors that we used to see in the marketplace pre-COVID-19, we don't see being very active in there. And I can't tell you why, but we simply see some being less active in there. We see on the other side, some competitors being very active in there and really trying to be very aggressive in there. And we see those type of players also not really having a strong customer proposition, a strong customer focus at all. And they will pass and just push and or abdicate their responsibility towards the customer and just let the customer kind of figure their way out with the airline in this really tough time for it and that is not our approach at all we absolutely we first have a legal obligation and we do not avoid that legal obligation whatsoever and we want to be there for our customers so that not only are we there now but over the long term they will come back and back and back to us and we see some of our competitors not caring not concerned about that um at all and take different approaches and different approaches to trading now you may also say that some of those need to raise funding read to raise finances um and are trying to maybe just bring in some quick cash uh and or quick bookings um to to do that on the back of it But you see a mixture of competitors out there taking different approaches in the marketplace today.

The next question, also from Tom Gibney, is how much did customer service costs increase in this quarter? Should we expect a similar year-on-year increase in the second quarter? Let me take that one. I think there's a little bit of a misunderstanding here. What we said in our prepared remarks is that the customer service cost per booking is increasing, but that is because we have basically kept the amount of customer service agents that we have from our outsourcers. That is what drives the cost, right? But of course, that number, when you divide it over a smaller number of bookings on a per booking basis, is higher. And that is what explains that our variable costs have come down by 84%, even though our revenue has come down by 88%. And has it been exactly in the same? Because there is some friction, let's say, at the level of the customer service. As we have said, it is an absolute key priority for us to attend our customers and give them proper service in a moment where every one of them is going through a difficult situation because they have canceled bookings, they want to get refunds from the airlines and so on and so forth. We have kept the base that we have of external customer service agents. And on top of that, we have trained a number of our employees that were not customer service agents so that they do customer service work on top of our normal customer service agents. So we're doing every effort that we can. Going forward, we expect that customer service investment, let's say, to continue to exist for a number of months until the full dynamic of cancellations and refunds unwinds and we go back to a more normal situation. So I don't expect that cost to increase, but it's also not going to move with the bookings because it has to do with the level of service that we need to provide to our customers. Putting it into context, within the variable costs, the bigger cost by far is acquisition cost or marketing cost. It's the same thing. And also merchant cost is higher usually than the customer service. So those two The next question is, how much payables relate to cash related to refunds received from airlines but not yet passed through back to the customer? Which is actually very similar to the question that I have following that one from Alexander Ketzler of Barclays. That number is an ever-moving number. I don't have a precise number to give you right now. The way the process works is that we request refunds from the airlines through a variety of mechanisms or two or three different mechanisms depending on the airline. The airline examines that request and they refund to us big batches of bookings. We then need to do a process of reconciling which bookings we have actually been refunded so that we can then go and refund the specific customers that have been refunded. And that is a process that takes about 10 to 15 days for us to complete. So there is a continuously moving number in that respect. There is a queue. Now, on the rhythm at which this happens, we see a very different behavior on refunding depending on the airline. There are some airlines that are now refunding us bookings that actually should have flown in the months of March and April. There are others which would mean a four-month delay by now. There are others which are faster and are refunding us bookings that should have flown in the months of June and July, which would be a one to two months delay. And there are some airlines that are not refunding at all. So we see very bright behavior depending on the airlines. The next question comes from Timo Bishop from Robles Capital. It says, payables seem to be very high in relation to revenue and in relation to cross bookings. Please explain how much of payables are not booking related. Okay. In normal conditions, i.e. pre-COVID, you have two big families, let's say, of payables. Ones are payables related to the airfares. or cost of the room of the hotel that we need to pass on to our providers. Those don't flow. They're not related to an income statement line. They're related to the gross bookings, right? And in normal conditions, that can be 70, 80% plus of the total amount of payables. There is a second block of payables that has to do with the operating expenses of the company. So they are related to a cost line in a P&L. What happens is that when the level of bookings decreases, you see a very parallel decrease in the payables related to airfares and cost of the hotel rooms, cars, et cetera. But there is not a parallel reduction for bookings related to operating expenses. So naturally, you're going to see a distortion during this COVID period of the relationship between the amount of the payables and the amount of the revenue line or the amount of the cost line. But it follows this logic that I was just explaining. Now on the revenue margin, the second question from that same investor is revenue margin for booking rest of the world decreased a lot more compared to top six countries. Please explain. And here I would refer to the explanations that we gave previously to one of the analysts covering the stock. And on top of that, I would say that the dynamic by which the long-haul flights have decreased over time a lot more than the domestic and the short-haul happens increasingly so for our rest of the world countries. our typical European customer will book domestic flights, intra-European flights to a large extent, right? And those have decreased less than the long haul. Customers from our, let's say, more international denominations vis-a-vis us tend to book with us a lot more intercontinental flights and long haul flights. And therefore, for those, it is natural that the revenue margin per booking drops more than for the top six countries for us. And that was the last of the questions that we see coming in from the webcast. So with that, I'm going to thank everybody for joining the webcast today. Before we conclude the call, I would like to inform you that on Thursday, the 19th of November, we will be hosting our conference call. And in the meantime, we will be happy to receive your questions via our investor relations team or the investor email address, which is investors at edu20go.com. I wish you all a very nice afternoon and a very healthy situation for you and your families.

Thank you as well.