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.