eDreams ODIGEO S.A.

Good morning, everyone, and thank you all for joining us today for our fiscal year 2022 results presentation for the 12 months ending 31st of March, 2022. I am David Larros, the Director of Investor Relations at the DIMS Odillo. As always, you can find the results materials including the presentation and our results report on the Investor Relations section of our website. I will now pass you over to Ben Arant, our CEO, who will take you through the first part of the presentation.

Thank you, David. And good morning, everyone, and thank you for joining us today. What a difference a year makes. Back in May of 2021, a year ago, the market was at minus 75%. Back then, there was hope that vaccines would truly work, and still a small percentage of the total population had actually received two shots. And there were still huge amounts of travel restrictions. Europeans could not travel to the U.S. Within Europe, restrictions were quite severe to travel. And there were questions as to the extent to which individuals would even want to travel. Many of these fundamental questions have been answered. Throughout our past fiscal year, FY22, we have seen the travel market improve and recover significantly. We've seen travel restrictions eased to almost eliminated in most of our main countries, and we have seen a vindication of science and vaccines. Within this, we have seen Edo outperform the market and its competitors by a significant margin. And we positioned ourselves for the future success with our innovative approach, including Prime, the first and leading subscription program in travel, which now has over 2.9 million members. And that's triple just of what we had a year ago. This is tangible proof of the success of our subscription program as we continue to convert a meaningful portion of just our 17 million customers that traveled us during COVID. the last financial year, as well as attracting new customers. Today I'll take you through the key points of our strong set of results, which will include a discussion about the leisure travel recovery, the strength of our industry, our outperformance versus the market, and our platform for success and why there are barriers to entry. I'll then hand over to David Elizaga, our CFO, who will take you through our performance in detail, as outlined in our financial statements. And then I'll come back to conclude today's presentation with some closing remarks. With that, I ask you to turn to slide four, which is a summary of our performance of our fiscal year 2022. FY 2022 was a record year in bookings. We continue to gain market share, and we are on our way to exceed our FY 2025 expectations. Some of the key highlights for today's presentation are, first, our strong bookings growth. In FY2022, bookings were up 286%, which is 10% above pre-COVID-19 levels. Remember, this is in the context of this past financial year being materially affected by by both the Delta variant and then the Omicron variant. And the travel market has yet to fully recover. Despite the conflict in Ukraine and rising inflation, we still have seen a real resurgence in travel, with our bookings in March 34% above our 2019 pre-COVID levels. April was 52% above, and in May, that's from the 1st to 17th of May, 58% above our 2019 pre-COVID levels. There is no doubt that consumers want to travel. Second, I'll cover in more detail in the presentation that both our Prime and EDU continue to outperform. EDU Booking's performance is materially better than the market. around 60% points versus airlines, both regular and low cost. In FY22, we have more than tripled the prime membership with an additional 1.8 million new members on top of the same period of last year. And that means we reached 2.7 million members in FY2022. In May, we have 2.9 million members. Third, in FY2022, we achieved an excellent set of results, Despite COVID-19 impact, FY2022 showed good signs of yield recovery and resulted in strong results. Revenue margin in FY22 increased 244%, mostly driven by the success of ancillary revenues, which has resulted in fiscal year 2022 diversification revenues finishing above pre-COVID-19 levels. Cash revenue margin, however, due to COVID restrictions, remained 26 below pre-COVID-19 levels. This included the full contribution from Prime and FY22, where the average basket size was constrained by travel restrictions. Cash marginal profits stood at €107 million for FY22, and this is three times the amount in 21, and cash EBITDA was €44 million positive in FY22. That's an improvement of 71.6 million euros in a single year. Fourth, we begin the new financial year exceptionally well-positioned, well-financed, and on our way to our self-imposed FY25 targets. Why do I say this? Because we have a three-year guidance, which six months on, we absolutely stand behind. If greater means greater than 7.25 million prime members, by the end of FY25, an R2 of approximately 80 euros, and cash EBITDA in excess of 180 million euros. Also because travel is recovering and normalizing, and we have an enormous growth opportunity in front of us, underpinned by a solid and scalable platform and a strong balance sheet with refinance debt. And lastly, we really believe we have the right model, the right people, and the right structure to see and deliver on the opportunities ahead of us. Now I'll move on to covering an update about industry and travel. So please turn to slide six, where we outline that people want to travel more than ever. After the emergence of COVID-19 in early 2020, there was a substantial reduction in travel across the globe. Vaccination programs began in early 2021, and the boost of vaccination rolled out in the second half of the year. With the increased protection and significantly less danger to populations, travel began to recover in FY22. Today in our core markets in Europe, on average, 80% of the population over 18 years old is vaccinated, and total immunization estimated about 70%. Survey after survey showed throughout the pandemic that the demand for travel was undimmed and that there was a pent-up demand to travel again. The only question is when. EDU is a leisure-focused business and fully recognizes that a leisure traveler simply can't replace their leisure experience through technology. Walking along a sandy beach can't be replaced by Zooms. Standing atop a mountain with a breathtaking view can't be replaced by teams. Visiting historical sites or new cities can't be replaced by hangouts. And breakthroughs in science have progressed. Leisure travelers have been returning. The prognosis for leveraged travel is encouraging. Surveys of the European Tourism Commission, which monitored European sentiment for travel during the pandemic, concluded the outbreak of the Omicron variant had a limited effect on travel sentiment, with 77% of Europeans planning to travel by September 2022. This is based on the surveys 6,000 Europeans conducted in March 2022. Leisure travel plays a special role in people's lives. in their lifetime memories, in their well-being, and people are saying they want to continue to travel. Please turn to slide seven. During the pandemic, the European consumers have saved almost 1 trillion euros more than they ordinarily would save. This is based on a recent survey, I'm sorry, a recent study by Eurostat and the IMF. The study also showed that households and nations in the Eurozone saved nearly 50% more as a result of the pandemic. This increased savings allows individuals to weather other external shocks better than in the past, while trying to return to more normalcy after two years of COVID. If you can turn to slide eight, I will conclude this section on the travel market recovery by showing you how consumer behavior has and is continuing to change as restrictions are eased. Consumers are prioritizing travel over other types of discretionary expense, with other types of products and experiences reduced, such as concerts, clothing, dining at restaurants, et cetera, in order to save money or travel. Thousands of respondents said, in a Taluna survey commissioned by Travel Court from seven countries said they would even be willing to give up some of their favorite things for six months or longer in order to travel. This reinforces the point before in which travel plays a very fundamental behavior unlike many other expenditure categories. Please turn to slide nine. Let me take you through the strength of our industry and how events similar to today have impacted travel in previous cycles. Travel patterns were not specifically affected during more recent conflicts and wars in Western Europe. Historical examples of geopolitical conflict, including the wars in former Yugoslavia, show that Western Europeans continued to travel but adapt their destination to Europe. safer locations. As you can see on the chart, with the exception of adjacent countries of Croatia and Slovenia, the impact was minor with surrounding markets growing during that period. The recent Ukraine conflict has created some uncertainty. However, if we look at EDU performance, Western Europeans booked more versus pre-COVID-19 levels in April than in March, plus 66% versus plus 53%. and more in March than in February, plus 53% plus 40% respectively, which also demonstrates clearly the same point. Please turn to slide 10. Demand recovery still remains the largest catalyst for increases in airfares as opposed to inflation. First, it is proven that when oil prices increase, not all prices passed on to passengers through increases in airfares. Since January, airfares are up 22%, while oil prices have increased by 41%. But airfares are still on average 14% below April 2019 levels, while oil prices is 58% above. And in addition, capacity expansion increased by major European airlines for 2022 is expected, but is set to be below 2019 levels. IATA Europe forecast for 2022 is expected to be 14% below pre-COVID. So predictions are that airfare increases are more likely not to compensate in full for the increase in fuel prices. Please turn to slide 11. And last but not least, over the past 40 years, and even during recessions, energy crisis, high inflationary environments, et cetera, passenger traffic has mostly grown. While there always is some uncertainty in a future situation with a unique set of factors, based on prior market performance, there were in fact only three years during the period of 1980 to 2019, in which passenger numbers declined, and the largest decline was, in fact, 2.6% in 1991. Please turn to slide 14, where I will take you through EDU performance. As you can see, the recovery is well underway. In fact, we are significantly above pre-COVID-19 levels in bookings. While there were a couple of months in which Omicron affected our bookings, our bookings during Omicron never got that much below versus pre-COVID-19 levels. On a full financial year basis, EVU total bookings have been above pre-COVID-19 levels in eight out of the 12 months during FY22. We achieved this with record bookings in one day, record bookings for one month. record bookings for one quarter, and record bookings for one year. Our bookings in March were 34% above pre-COVID-19 levels. For April, bookings were 52% above pre-COVID-19 levels. And in May, they've been 58% above. And remember, during this time period, there has been Omicron, Ukraine war, and a travel market that has yet to fully recover to pre-COVID-19 levels. Please turn to slide 15. As evidenced by IATA public data and recent results from low-cost carriers, eDreams Adigio has consistently outperformed against the peer industry, highlighting the strength and adaptability of our business model, as well as our superior proposition to customers. The company outperformed versus regular airlines, by 62 percentage points, and versus LCCs by 57 percentage points in FY22. This is despite a market that is yet to return to pre-COVID-19 levels. Please turn to slide 16, in which we discuss prime results. Prime continues to grow very quickly, adding 1.8 million members during FY22, which was a weak travel market year. That is three times more than in the same period the previous year for us. In the middle of May, we reached 2.9 million members, which is a remarkable achievement since both Delta and Omicron variants disrupted the travel market for large parts of FY22. Please turn to slide 17, in which we will talk about our diversification KPI. Overall, diversification revenue continues to grow, is already above pre-COVID-19 levels and the largest contributor to revenues. Revenue diversification ratio has continued to improve. The revenue diversification ratio increased from 53% in FY20 to 73% in FY22. That's a 20 percentage point improvement over a two-year timeframe. Please turn to slide 18. We continue to lead the travel industry in mobile innovation and have extended our market leadership further. In the last two fiscal years, bookings through mobile, which is a top priority for us in a major focus, has risen substantially from 33% of our total flight bookings to 53%. The shift to online, and specifically mobile, has been accelerated by the pandemic and leaves us in an optimal position to take advantage of future demand. As people return to the office, it is expected that the growth in mobile will lessen. If you could please turn now to slide 19, our outperformance can also be seen through market share gains. We used to look in the past at market share within the OTA segment, but we have switched to total air travel market for two reasons. First, because it is more reliable data, this includes off-flights, operating within every country. And second, because it's more relevant as it looks at the whole market and therefore captures as well share gains versus offline travel agents and airlines. Since FY20, EDO has almost doubled its European air travel market share, reaching 5.4% of the overall European air market in FY22 versus 3% As mentioned before, I think this is due to our superior customer proposition, superior strategy and business model, and underlying execution. If you could please turn now to slide 20, I would like to emphasize that we believe, regardless of economic uncertainties, our business model and track record position us to perform better than the industry. Let me share with you some of the reasons why we think we are better positioned. One, thanks to Prime, we offer the best prices and customer experience. Two, because we meet customer needs even more than competitors, from depth of choice to speed of overall experience, after-sales service, et cetera. Three, because customers will focus on price even more in the context of discretion and income shrinking, and we offer best prices. Four, in addition to all of that, we have resilience via Prime with almost 3 million bus customers who give us a much higher share of wallet of the travel they continue to consume. Please turn to slide 22, where I'll take you through why we have a platform for success. The subscription model is well proven and has been around for decades across many industries, but not in travel, where we are the pioneers and the global leader. We are emulating other companies like Spotify, Amazon, and a number of other subscription-based companies that have highly penetrated large portions of the population. And, in fact, they've achieved up to 50% market penetration. Five years ago, we began pioneering a subscription program for travelers. While subscription programs were taking off in other domains, such as movies, music, et cetera, edu was unique in applying the model to travel. Five years on, we have launched thousands of product features and functionality tests and changes, tens of thousands of one-to-one interviews with existing potential customers, and reworked every process and system in edu in order to offer customers a truly great subscription experience. Also, we have created a unique and scalable proprietary platform for future growth, which makes it very difficult to replicate. And we will continue to add this. Over the past five years, we have invested much time and resources in developing our unique subscription offering into the successful product it is today. During the pandemic, we continued to invest and develop Prime and have seen remarkable achievements as a result. Customer take-up is very strong and it has enormous future potential. We are transitioning our business from a transaction-based business to a much higher quality and more appealing relationship subscription-based business with strong growth prospects. Please turn to slide 23. Making the change from transaction to subscription-centric business requires a holistic company transformation process. and is difficult to achieve. While others may, can offer a subscription, it is not simply sufficient to offer something. To do well, it requires a fundamental company-wide transformation, as well as clear insights, years of learnings in product development, and superior execution. The move from transaction-based business to subscription requires to change every single system, process, and procedure within the company. And every area in the company needs to be adapted, including revenue management, payments, finance, customer service, marketing, et cetera, et cetera, et cetera. This makes it difficult to replicate for success as opposed to simply replicating for having a consumer offer. Please turn to slide 24. While other industry subscription programs may have been around much longer than Prime has been in travel, we still are in the early days. The success of the subscription market in other industries is demonstrated by high penetration and their strong top-line growth during long periods of time. In fact, over 50% penetration is seen in video-on-demand companies, with compound annual sales growth rates of 37% increases over a 10-year period. And they are still forecast to continue to grow at a category of 16% over the next three years. For us, the subscription market has a very large dressable market, and we have used very realistic assumptions. EDU at the end of FY22 has only 1% penetration and 2.7 million subscribers. To put this in context, we are targeting to achieve only 4% penetration by FY25, which implies a calendar of 25% in cash revenues over the next three years. We believe this is a very realistic assumption because in the market in which we have been operating the longest, we are already at 3% penetration. And this market, we are still today achieving all-time growth rates. So we are, in fact, accelerating versus the early years as opposed to plateauing. With over 225 million households alone in Europe, we have enormous growth potential. and we have barely scratched the surface. Now, I'll pass you to David, who will discuss in more detail our financial results.

Thank you, Dana. If you could all please turn to slide 26 of the presentation, I will take you through the financial results in more detail. Despite COVID-19 and significant disruption from both the Delta and Omicron variants, which affected good portions of fiscal 22, Fundamentals show signs of an easy recovery during the fiscal year. Revenue margin in fiscal 2022 increased 244% versus the same period of last year. This was due to bookings being up 286%, and the reduction in revenue margin for booking of 11%. This reduction per booking terms is driven by some of our revenue sources, which actually derive from the prior period as per accounting rules, And when bookings almost tripled, that viewer amount is divided by a much larger booking figure and results in a reduction for booking. The impact of COVID-19 restrictions resulted in cash revenue margin being 26% below pre-COVID-19 levels, including the full fiscal 2022 contribution from private. This was because the average basket size was constrained as a disproportionate number of consumers are booking short haul, due to the continuing uncertainty and restrictions with less passengers to booking and thus lower booking value. Variable costs increased by 268% due to the increase in bookings, offset by a decrease of variable cost of booking of 5%, mainly driven by cost of the cost reaping the rewards of the information we implemented during the pandemic. fiscal 22 has seen consistently improving trends and a return to profitability. Cash margin of profit stood at 107.4 million. That's three times the amount we achieved in fiscal 21. And cash EBITDA was an encouraging 44.2 million euros, an improvement of 71.6 million in just one year, as we had a loss of 27 in the previous period. And a quarter of the way, towards our target of 190 million euros. Adjusted EBITDA was slightly positive at 3 million, despite the delta and omicron variants disrupting the travel market during a great portion of fiscal 22. Adjusted net income was a 52.3 million euro loss in fiscal 22. If you could all please turn to slide 27 of the presentation. The KPIs here show the strong growth in prime cash revenue margin and marginal profit in the last 12 months due to strong growth in prime numbers and average revenue per year. Our ARPU grew by 55% versus fiscal 21 and stood at 88 euros per month, already above our 2025 target. However, we do not expect these levels to be sustainable, and we maintain our long-term guidance of 80 euros per year. Current levels are very influenced by the large interest in prime numbers during last year and the corresponding large gap between prime numbers at the end of the period, which are the ones driving the subscription fee portion of the , and average prime numbers used for the denominator in the calculation. Strong growth in cash revenue margin and cash margin of profit has led to 40 percent and 50 percent over the last 12 months, cash equity margin and cash margin of profit respectively, now coming from prime members, versus 33 percent and 57 percent respectively, just one euro. I would like to point out why prime share has reduced at the margin of profit level. It is because the increase in first-year members has been very large during the fiscal year, and profitability of prime members increases substantially from the second year onwards. as the acquisition cost reduces very significantly. Once we start to have a larger proportion of our prime members being in the second and subsequent years of membership, the profitability of the prime side of the business will improve. Please turn to slide 28 of the presentation. During the pandemic, we have continued to invest and innovate on our subscription offering and have seen remarkable results. Over the past year, our subscribers grew by 203% to 2.7 million at the end of the fourth quarter. In addition, 40% and 50% of our cash revenue margin and cash margin of profit, respectively, are not from prime numbers. The success of prime is clear in our total books. In the fiscal year already, 10 percentage points greater than pre-COVID. Cash revenue margin is still down 26%. as travel options for customers have been constrained due to travel restrictions in place due to Delta and Omicron variants. Cash marginal profit and cash ending that have more room to recover due to the large increase of prime members in the year and profitability of the prime members, I remind again, jumps from the second year onwards. In fiscal 22, the growth in the interest in deferred revenue driven by time has accelerated, driven by strong growth In prime members, we have added 1.8 million more new members than in the same period of last year. And it has amounted, that deferred revenue, to 41.2 million, and that is up all 284% year-on-year. In fiscal 21, the increase in deferred revenue amounted to 10.7 million euros. As guided in the results presentation of the last quarter, with the Omicron effect lasting until the end of January, The increase in deferred revenue in the fourth quarter was lower than in the quarter of December due to the one-month lag in recognition of the subscription fee. The fourth quarter included two full months of Omicron effect, while the quarter of December only had a month of Omicron effect. In the quarter of March, the increase as expected was lower, amounting to $7.9 million, versus $13.5 million in the second quarter and $14.7 million in the third quarter respective. As a result of the positive contribution from Prime, we are very pleased to say that cash EVVA with the full-prime contribution was $44.2 million in fiscal 2022. That's an improvement of $71.6 million in just one year. Turning now to slide 29, I will take you through the cash estate. In fiscal 2022, despite the significant disruption, net cash from operating activities entered the year with an inflow of $118.7 million, following a working capital inflow of $115 million. The improvement versus the same period of last fiscal year was driven by increasing demand for leisure travel, as well as our very significant market share gains from March 22 compared to March 21. Better EVDA and non-cash items, which are items accrued and not yet paid, and an increase in prime deferred rates. We have managed our liquidity position well, a consequence of our strong business model and active management and EDU bookings performance. We have used 27 million of cash in fiscal 22 for investments, but it's 5 million higher than fiscal 21 due to the increase in our development capacity and, therefore, higher capitalization of software developers. Cash used in financing amounted to 51 million euros, compared to $69.5 million from financing activities in the same period of the previous year. The variation by $18.6 million in financing activities mainly relates to the capital increase of $75 million and the lower reimbursement of the revolver by $29.5, partly offset by the reduction of $15 million in the senior notes, the payment of the cost associated with these transactions for $19.5, and the drawdown in full of the $15 million government-sponsored loan in fiscal 21 and the repayment of $3.8 million in fiscal 22. I will now turn the presentation back to Dana to do the closing remarks.

Thank you, David. If you could all please turn to slide 31. Let me conclude by giving you some final remarks. We strongly believe that we are positioned for future success with our innovative approach. The reasons for this are, one, we are in pole position in an attractive market. EDU market is sizable, growing and attractive, and EDU is positioned in the right segments, online and leisure. Excuse me. Please turn to slide 32 of the presentation. The second reason is within travel. EDU is the global flight leader, excluding China. and over three times the size of the second player in Europe. Please turn to slide 33 of the presentation. The third reason, EDU has demonstrated the ability to capture new customers through the Prime program while converting existing customers. Prime is the number one travel subscription program in the world, and over 60% of our Prime customers are new customers and have not used an eDreams individual product during the last three years. This endorses that the Prime proposition is attractive not only for existing customers, such as our 24 million-plus customer base, which booked with us over the past several years, but also for new members, too, all of which helps explain why we are capturing and building market share. However you look at it, Prime is successful, delights customers, grows our market share, and is mutually beneficial for our consumers. the company, and shareholders. Please turn to slide 34 of the presentation. In summary, we are well-positioned, well-financed, and on our way to meeting self-imposed FY25 targets, which are prime numbers over 7.25 million, prime ARPU of around 80 euros, and cash due within excess of 180 million euros. We believe EDU has huge potential, which will drive superior returns for shareholders, excellent service for customers, while at the same time transforming and really revolutionizing the industry. With that, we would now like to take your questions. We will answer the questions sent to us in writing in the webcast. We will take questions on a first-come, first-served basis, but we will also try to group questions of similar nature. She will now have time to respond to the questions from the webcast. The investor relationship team will make sure those are answered afterwards.

Okay, thank you, Zaina. I have already here a very interesting set of questions, so let's get to them without further delay. The first set of questions, comes from Jeff Cartier from Schwartz Investments. I'm going to read them one by one because I think if I read them all together people will not remember. So let's start with the first one. Do you have any investment expenses running through your income statement? If so, can you quantify them? So the most important investment that we do in our business, actually, the investment in acquiring the new prime members, like we have gone over in the investor day extensively, the margin of a prime member in the first year is very low when compared to the second and third year, and actually, let's say, dilutes the overall margin of the company. We talked to the investor today of a sensitivity applied to fiscal 2025 in which we said that if during fiscal 2025 we had a stable number of prime members during the year instead of continuing to grow during the year in prime members, that the cash even margin would increase by 8% which talks about the level of investment that there is in the P&L in terms of future growth. We can do a relatively similar exercise for fiscal 22. In fiscal 22, we have grown from 800,000 members to 2.7 million members. If we had grown to just double, going from 800,000 members to 1.6 million members, our margins would have also increased by eight points. We had a cash EBITDA margin of 10.4% when you divide the 44 million euros of cash EBITDA by the 424 million of cash revenue margin. That 10% would have been 18% if we had only, or quote, doubled the number of prime members to 1.6 million instead of reaching 2.7. So I think that answers the question. The second question is booking. discuss this week offering flights in 40 countries and selling dynamic packages. Have you tested your app versus your app? Do you have any concerns?

Let me put this in two parts here. The first one is around Booking's app and just Booking's flight offering. Booking has actually been in the flight market and the DP market as well. DP's generic packages for at least four years, maybe coming up to five years, but it's that type of time frame. So they've been there for a long period of time, and you see that flowing, you know, in a sense through our results as well. Of course we've tested the app. I mean, we test the app not just this last week or the last month or et cetera, et cetera, but we constantly test not just them but all of our main competitors. And let me actually just stress, some of the best and most innovative stuff from an e-commerce online experience is not necessarily done in the travel industry. So we do and our teams are actively always looking out at the best outside of travel as well, and those can be across the globe, and there's a lot of really great innovation that happens on it on that platform. The next one, if I just move on, I think Chad had another question about the push into e-commerce. And why don't I take that one as well? We answered this at the Capital Markets Day in November, which we said over the next couple of years, we are absolutely going to be improving our hotel offering and experience in that, and that we're actively improving on that from that point of view. I think there's another question by Chad about headcounts as well. What is the progress on increasing your headcount? We're actually on track. And again, to provide context for everybody on the call, We said that we would over the next two years grow by 50% our headcount because we had a very large amount of organic growth opportunities, and we detailed out where those organic growth opportunities were. And so that would be, therefore, the headcount increase was very important for it. So coming back to Chad's question about being on track, absolutely. We've broken it down month-by-month targets in terms of the amount of increases that we want to get to in terms of not just quantity but quality of people is exceptionally important, Chris, and we're absolutely on track for that one.

I think I'm going to take the next one. The next one says, given the strong performance, is it fair to say that your financial targets are now conservative? So this reminds us of what the financial targets are, which are targets for fiscal 2025 and The most important number in there, given that we surely are a subscription company, is the target of 7.25 million members. And since we issued the guidance, which was six months ago, at our investor day, we have grown at approximately 400,000 prime members per quarter. So it's a good, strong performance in making progress towards 7.25. The 180 million euros of cash available after that year are strongly linked to that number of prime members and they are, as we've already said, going to stay relatively constant. I think there's a lot of uncertainty ahead. We don't know exactly what the market is going to do, both from health conditions and from macroeconomic conditions. I would say that since we issued the guidance, two important things that happened, which is one, the Omicron wave, and the other one is the war in Ukraine. And we probably said today that we stand behind our guidance, and I think that that's already a very strong statement. There'll be time enough to see if we increase the guidance, but at the moment we stand by that number. And then the last question from the same investor is, what is the timing of increasing your presence outside of Europe, and what are your thoughts on the competitiveness of your offerings outside of Europe?

Absolutely. So we are in 44 countries right now, and so we're very competitive, and you see that in our growth rates as well. If I move this then to Prime specifically, Prime is in a couple of non-European countries, and it's been doing very well. And matter of fact, in the capital market, say, back in November, we actually shared with you the results of one of those markets, which would be the U.S., the largest travel market in the world. And so I'd refer you to that. There's a slide on the performance, but it is very, very meaningful and very good, and it provides a lot of growth opportunities for us. At the capital market, say, we said we would actually move and invest in improving our proposition materially in the U.S. because it was a minimum viable product, and so we would step it up and move it to a much more robust, much more European-like offering for it because that gives us great growth opportunities in the number one travel market there. And we also said that over the next couple of years, we would go to, let's say, a handful of additional new markets as well for us, new in the sense that we're already in that market in a transaction-based approach, and we would start offering our prime product. And that is still the plan to do that over the next couple of years.

The next set of questions come from Nislam Asir from Deutsche Bank. The first one says, there's a view that customers are traveling for summer, but with inflation likely to persist, the fear is that beyond summer 2022, the urge to travel will be constrained as people save up. What is your view on this? How has travel performed in the past during a recessionary environment? Can eDreams still take market share and grow bookings? So what I would say is the following, and I think this message was in two or three places in our presentation, so let me just review that. We don't know exactly what's going to happen in the fall and in the winter. That depends on a lot of things. What we do know is that our performance has been ahead of the industry for very strong reasons that are actually sustained. Our product continues to be better than the product of many others. Fine is a very attractive propositions to consumers. And in a context in which inflation is high and discretionary income shrinks, it becomes even more important to offer good prices to consumers. And we have seen that in the worst of the pandemic, the attractiveness of Prime was not diminishing, and the rates at which we were adding Prime members were also very strong. So we have a lot of confidence that we're going to continue to perform strongly vis-à-vis the market. With inflation increasing, we also show data. We've looked at the data of the last 50 years in terms of number of passengers, and there's only been three occasions in which the number of passengers decreased. And the year that it decreased the most, it was 2.6%. I think if you compare that to the situation that we have lived with COVID, it looks like, you know, health and the ability to travel imposed by government has a lot more impact on the amount of people traveling than any macroeconomic swing that you could see. And I would also remind you of the fact that Europeans in general are sitting on 1 trillion euros of savings and that there is evidence coming from surveys saying that people is willing to forego other consumer discretionary expenses before they forego travel. And we've seen some, for instance, of the results of the retail operators, which are already softening. And as you can see in our results and also the results of many of our competitors, the results of travel of creditors are not so funny yet. So inflation is already hitting other sectors. It is not hitting travel. The second question from is how should we think of bookings growth, revenue, and adjusted EBITDA in the next financial year? That's pretty much like giving guidance for the next financial year, which we are not doing. So I cannot talk about absolute numbers. I can talk about, let's say, direction of performance of each one of those three lines amongst themselves. So bookings row, we don't know what it's going to be. It's going to depend on all of the things that I said before. Cash revenue margin. should grow more than bookings as long as the patterns of travel continue to return to the patterns of travel that existed pre-COVID. And the growth of the cash available, certainly towards the end of the year, we would expect it to be higher than the growth in the cash revenue margin because the weight of the first year prime numbers over the total amount of prime numbers is going to diminish versus what we had in the last four months, in which that proportion has been very, very skewed with 1.9 billion vendors coming in the last year versus a total of 2.7. When that proportion starts to be less biased towards first-year prime vendors, then the margins will perform in an accelerated fashion. Next question is, how many bookings does a prime member make on average, and do you see all the cohorts booking more on average? What I can say about that is that what happens with prime members, and we've gone over this in the past as well, as opposed to what happens with the non-prime members, is that They basically give us their share of quality. They give us all of the bookings, and on average, we make the data public at the investor day. They tend to do 2.7 more bookings with us than the non-profit. And that's the ratio that one should focus on. As to the older cohorts versus the new cohorts, that's not data that we've made public until now, and we're not going to make it public. but they're not material differences. The next question says, how are prime churn rate movings and which markets are you seeing the most traction in? In terms of the churn, the prime churn is stable. We haven't seen any material difference versus what we've discussed to the market so far. In terms of the performance by market, the performance by market is stable. quite uniform and the actual number of prime members that we have per market or would you say the penetration that we have on a given market depends pretty much on how long have we been operating in that market. If we've been around for longer, there's a bigger penetration. If we've been around for less, then there is a smaller penetration. The next question is why is Long-haul travel taking longer to recover. Have airlines returned to full capacity in terms of their own offering to consumers? Well, long-haul travel is taking longer to come back just because there continues to be restrictions and uncertainty. If you are European and want to go to the U.S., and we know this very well because we'll be in the U.S. in the next week and we're there three months ago, you still need to do a PCR test 24 hours in advance. Asia is pretty much closed, all of it. Latin America is nowhere close to the levels of, let's say, acceptance of tourists and the stabilization of the disease that we see in Europe. So until the conditions, let's say, normalize and people have more certainty, the airlines are not going to put more capacity in those long haul routes, and the consumers are also not going to book. Well, one thing follows the other. And capacity, they have not returned, which was the second part of your question. Have they returned to full capacity in terms of their own offering to consumers? Not yet. We actually have shown data. In the presentation, you will see that in there, the capacity return has been much more swift in the case of the low-cost carriers, and some of them actually have bigger capacities than they had before pre-COVID. The regular carriers are still behind, and they haven't moved. all of the capacity back, although they have announced that they're going to continue to make progress in terms of additional capacity. And last question that we have from the strong bookings growth you're seeing at the moment, how much of that is driven by time at the bookings? The growth has been very consistent across both prime members and non-prime members. And again, you see the percentage of writing that we have for prime numbers is around 40%, which is not usually similar to the one that we had before. With that, we move to the next participant in the call, which is Francisco Rizmartin from XAMPP. The first question says, do you think prime membership will accelerate in the coming quarters, or on the contrary, you're enjoying a novelty effect that will ease in the coming quarters?

I think there's two parts to this. One part is, you know, the product standing still part, right? Meaning if there's no change in the product, then it's driven very much in terms of the travel market. So, for example, when we saw Omicron hit, and therefore the travel market kind of, you know, people coming in to travel lessened, right, in, let's say, end of November, December, early January versus October, then simply there's less people out there looking and there's less, let's say, in a sense, new prime members that we get from that. Obviously, when it opens up more and people feel more comfortable, then there's more people out there traveling. and we get more prime numbers. And you've kind of seen that in our growth rates in terms of prime on a quarter-by-quarter basis, but particularly on a month-by-month basis as well. So when you look at kind of, let's say, our Q4 versus if you do the delta of what we told you in the end of February we had, and we're telling you now at the end of May we have, we're back up at about 500,000, right? Whereas in Q4 we had less than 500,000. That was highly affected by Omicron. In that and so that's how you should be thinking about going forward on a steady-state basis, but we don't stay still Right, we will continue to improve our product and continue to improve the geographic expansion of it Etc. And so we do expect that we will we will continue to grow the product the second question

from this investor is can you help us to reconcile the 88 actual figure with the revenue margin and prime numbers? Yes, that's a very easy calculation. If you go to the slide in which we show the breakdown of the revenue margin, of the cash revenue margin of 424, 40% of that corresponds to prime numbers, so 171 million. You take the 171 million and you divide it the average number of prime members during the year, which was 1.9 million, and you get to the 88%. The next set of questions come from Carlos Treviño from Santander. The first one is, could you elaborate on the reasons behind the 5.3% year-on-year growth in the variable cost per booking? The most important driver of that, I've touched on it in the presentation a couple of times, is the further investment in the prime acquisition. When you have 1.9 million members being of last year, those ones require more investment in marketing, and that will erode when they become second-year members, third-year members, et cetera, et cetera. The second one from the same participant is how has the average basket value evolved recently? Have you seen any improvement? The average basket value increases as a factor of two different things. One thing is the airfares for, let's say, equivalent type of travel. So how much does the domestic airfare on average cost? How much does the continental versus intercontinental airfare? The other factor to increase the average basket sizes is the actual type of travel that people move in. How many passengers in a reservation? Are they traveling long haul or short haul? How many days are they staying in destination? So on and so forth. So the average basket value is increasing lately. but it is increasing mostly because the airfares are increasing. The airfares are still about 14% below where they were pre-COVID, but if you look at the evolution of the last three, four months, they've been increasing on a sustained basis. So our trust value is increasing. That helps for the cash picture, right, because we manage more cash. It does not help yet for the profitability for bookings. in the sense that each individual booking on average is getting a little bit more complex but not as much as it would if the interest in the basket size was coming solely from the booking space. And the last question from this participant is how did you see your revenue for booking evolving this fiscal year? Well, we expect I think I responded partially to this in the question from Deutsche Bank. To the extent that the booking patterns recover, we would expect that the revenue of the booking increases. And at the same time, we do expect to increase, as usual, the amount of additional products and services that we offer to our customers. The next set of questions come from from . The first one is quite a question. You spent 354 million in variable costs or 565 million in revenue margin . In fiscal year 22, you spent 316 million for a revenue margin of 383, which is a drive in operating leverage. Why? Well, it's the mix of two things. One, I just touched upon, why is there a higher variable cost of booking? And the other one I think we've touched upon as well, there's also a lower cash revenue margin for booking versus pre-pandemic. for the reasons of booking patterns being, let's say, simpler on average bookings than they were before the pandemic. The second question from this investor is, seems like marketing cost per booking rose about 12% quarter on quarter. It is hard to compare as average booking value also increased around 8%, which implies you're bidding for more lucrative products. However, as private grows, when can we see the marketing cost per booking number decreasing as you attract customers from cheap channels or attract repeat customers? So this is exactly the point that I was just touching upon. The first year of a prime customer, we've actually spent the marketing cost to acquire that customer. And at the same time, we have provided to that customer very important discounts on the booking. The second year, they tend to come direct to us, and therefore, the marketing cost per customer decreases substantially, and therefore, our margin, which we are referring to the operating leverage, increases a lot. So the biggest driver for that is how many prime members of the first year do we have as a proportion of the total prime members. That is where you should look at to understand that evolution. The next question comes from . Can you please share why Moody's withdrew its rating? Well, it's relatively simple. We increased our number of rating agencies covering us before the refinancing. We went from two agencies to three agencies and . We're not willing to really pay to three of them, and we thought that the one agency that was having the least understanding of the evolution of the travel market and our position within that was Murizo. We discontinued paying them, and they discontinued the rating. That's easy enough. The next set of questions come from Beren Jordanov of Cairn Capital. Revenue margin and revenue margin per booking are still quite a bit lower than pre-COVID levels. Is that due to lower prices, transaction values, or price competition in the sector? It's mostly due to back-to-value, and based on what I've been saying during today, I think it's more precise to talk about lower complexity of the average booking. Is there price competition in the sector? Yes. the travel market improves. There are also more players which are, say, re-doubling their competitive efforts. But it is much more important the mix of the bookings than the competition. And the second question is, is that likely to recover or stay at this level due to prime discounts? We do expect an improvement in the revenue for bookings. in the next few quarters coming from the improvement in the booking mix and the type of bookings that people make. At the same time, like I said in a previous question, we are going to continue to offer additional products and services to our customers, and we will as well continue to offer very interesting discounts to our partners. over really the longer term, the one metric that you need to look at is the ARPU of the time numbers. And we've said that the APA are going to trend down to the 80 because we expect to give substantially more discounts to customers, and we're going to basically reinvest the new bookings that we get, additional products and services, into more discounts to our customers. The next question comes from Luigi from . What percentage of your prime numbers will be in the second or third year in fiscal 23? Well, that's like asking me how many new prime numbers are going to add in fiscal 23. Well, you know how many we start, right? You know that we start with 2.7, so those 2.7 will be the old customers next year. And since we don't disclose either the term or the addition of the new prime members per year, I'm afraid that I cannot give you that visibility today. The second part of the question from some investors, do you see marketing costs in the first half of 2023 in line with the pre-COVID level? they're going to be reasonably in line with the pre-COVID level. Yes, I would say that that would be a relatively fair statement to make. If you review our guidance, you will see that the marketing costs and proportion of the revenue or the variable cost in general, by the time we get to fiscal 25, it's going to be lower because of the effect of the prime membership and many of those customers being second, third, fourth year. Fiscal 23 is, you know, in a trajectory between where we are today and where we'll be next. Next question is from Mateo Santero of Spread Research. Have you seen any change on the booking mix? Maybe an improvement on the long haul bookings that restrictions are eased or have to remain longer unchanged. I think I've answered this one already, so I'm going to repeat myself. The next question is Bruce Ivory from Cheney Capital. Could you please comment on your bookings post to the summer season and into winter fall 2022? I think there's a little bit of a confusion in the background of this question. Different to how the hoteliers or the airlines themselves report volumes. They refer volumes flown in the case of airlines and actual stays in the case of customers. So they're able to tell you, you know, we have this many bookings that have not yet flown or that have not yet stayed. But in our case, we provide our services at the time of booking, right? We intermediate at the time of booking. So I know how many of my bookings that I've already reported that are already in my financial statements are going to flow later or are going to, sorry, to fly later or are going to stay later. But I do not know how many bookings am I going to get in the winter or the fall. The next set of questions come from Guillerme Mateo from CaixaBank. First question is, even if less relevant, Could you disclose your market share in the OTAC black sector for comparability purposes, which prior references or at least some color on market share evolution? Well, we're really discontinuing that, as we said during the presentation. The market share has increased very substantially versus the number that we reported in the past. It's hard to believe those numbers. But as we also said, one of the reasons that – one of the two reasons that we are discontinuing that market share that we think it is a lot less precise is less reliable because the way they allocate the source that we use, the way they allocate the flights to each individual country depends on the nationality of the earth as opposed to all of the flights being purchased by customers of a certain geography. And therefore we think that it is getting more and more, you know, less reliable. But there is a meaningful improvement. Why do you think that your share of mobile bookings has declined despite the improvements seen at an industry level? Well, I think you're looking at two very different mechanics, no? We have consistently had a very significant gap in terms of mobile bookings versus industry. Nobody in terms of mobile penetration versus industry, and we continue to have it. We are, let's say, at the forefront of that evolution. So for us, the evolution, let's say, from the recent past is an evolution that is marked by the fact that people have returned to the offices and they're doing now less bookings on their mobile devices than they were doing at the moment when they were not in the office and they were just staying at home. So for that, they have declined three points, but we continue to have a very large gap versus the other ones. The rest of the industry is just trying to catch up, frankly. So for them, the effect of more people going to the office, they don't notice it because they're at a much more immature level of penetration of the mobile devices for them. The third question says, several players in the travel sector expect to reach, until the summer, peak pre-COVID revenues in the leisure sector. When do you expect average basket value of bookings returning to pre-COVID levels? So about the other players in the travel sector, particularly if you look certainly at the players that, again, report on a flow basis or that report on a state basis, I'm going to rephrase a little bit because what is really relevant for us from an economic point of view is the complexity of those bookings being the same as it was in pre-COVID levels. We already said at the event today that the assumption that we are taking is a conservative assumption. that it will still take two full years, so until the end of our fiscal year 24, for those travel patterns to fully return. And the fourth and last question from this investor is could you provide the share of prime contribution for the cash EDTA? It's the same as it is for the marginal profit because of the possibility to distribute the The next question comes from . All other things being equal, what would increase in cash in fiscal 23 reflecting increased profitability of prime members in year two? Well, I think this is actually very, very similar to the to the response that I gave to the very first investor, which is one to say, look, if we had a more reasonable proportion of our customers being first-year subscribers as opposed to second, third, fourth-year subscribers, what would our margins be? And we said, look, we have just doubled. the number of front members from 0.8 to 1.6, our cash-in-the-margin would have increased by 8 points from 10% to 18%. The next question is from Anton Zereshin from King Street. On the topic of prime investment, I thought you had mentioned previously that you have not been marketing prime. Has this changed? Was that the average cap? It is true. We are not doing TV or big offline campaigns on Prime. We're not telling people, hey, we have a subscription program. We tell people to come with us, and then when they land in our website or open our application, they see the relative attractiveness of being a subscriber versus not being a subscriber. We don't advertise. When we say that we invest in increasing our number of Prime members is because we make an investment in marketing for the customers to do that first visit to us and a very large proportion of those become Prime members and in that first year to those Prime members we've given a very large amount of discounts that we have not given to the non-prime. The distribution of people knowing that we are a subscription company is pure word of mouth.

Yeah, exactly. So a lot of people come to us through word of mouth. And then of the ones we don't market, prime. We don't mention prime. You won't see it out there. There's not, let's say, Google Ads out there, et cetera, et cetera. It really is, and we don't put our prices out there. It really is the customer experience. just comes to us, and then through coming to either our site because someone has told them about Prime, and so they're already looking for a subscription, or they're coming just looking for, let's say, a flight, and then we walk them through a process in which either they're exposed to both a transaction and equally a subscription, and then the customer makes that choice.

So with that, those are all the questions that we have in the webcast. I want to thank everybody for joining us in the webcast. And before we conclude the call, I'd like to inform you that on Wednesday, the 31st of August, we hope that you will have been to the beach, take a vacation, and you fly extensively. And of course, you become members if we are not already. We will be hosting our conference call for the first quarter of fiscal 23. And in the meantime, we'll be happy to receive your questions via our investor relations team or in the investor email address, which is investors.