eDreams ODIGEO S.A.

Good morning, everyone, and thank you all for joining us today for our first quarter fiscal year 2023 resource presentations for the three months ending 30th of June 2022. I'm David Larrot, the Director of Investor Relations at the Dream Solillo. As always, you can find the resource materials, including the presentation and our resource report on the investor relations sections 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.

And good morning, everyone. And thank you for joining us today. Throughout the first quarter of this new fiscal year, FY23 for us, we have seen that the travel market continues to improve and recover significantly. Even with the Ukraine war, high inflationary pressures, flight disruptions, COVID, et cetera, People have shown that they want to travel and they're willing to spend money on travel. Within this context, our strong trading has demonstrated best in class performance, substantially outperforming the market and its competitors. In fact, we have set all time records in terms of bookings and revenues. And we have had the largest quarterly increase in subscribers ever, over 560,000 in just three months. Now we have 3.5 million subscribers in August and growing. And this translates into a far higher quality business than what we used to have and that what others have. In today's presentation, I will take you through the key points of our outstanding set of results, which will include key highlights of why Evo continues to perform strongly and gain market share, more details on our outperformance versus the market, and then I'll hand you over to David Elizaga, our CFO, who will take you through our strong first quarter FY23 performance in detail, as outlined in our financial statements, And then I will conclude today's presentation with some closing remarks. Please turn to slide four, which is a summary of our performance of the first quarter of our fiscal year 2023 results. In the first quarter of FY23, we achieved a new record in bookings, the highest in the company's history. We continued to gain market share, and we were on track to exceed our FY23, sorry, our FY25 guidance. Some of the key highlights for today's presentation are, first, we have again achieved strong bookings growth. In the first quarter of FY23, bookings were up 98% year on year and 50% above pre-COVID-19 levels. This is with the Ukraine war, high inflationary pressures, recent air industry disruptions, and a travel market that is yet to fully recover to pre-COVID levels. Despite these macro issues, we still have seen a real resurgence in travel, with our bookings in July up 38 percent versus 2019 pre-COVID levels, and in August, from the 1st to the 28th of August were up 55% versus 2019 levels. There's no doubt consumers want to travel. There is a reason why travel is the largest single category online. Travel provides a unique experience that people cherish, want, and are willing to spend on this. Second, both Prime and EDU continue to outperform. EDU's bookings performance is outstanding and materially better than the market. While the market is still below pre-COVID levels, we continue to be significantly above pre-COVID levels, now having achieved our fourth quarter in a row being above pre-COVID levels in bookings. Above all, our business has increased its quality with the pivot to subscription, has higher repeat rates, and becomes more profitable year by year as customers renew. In the first quarter, FY23, we reached 3.2 million prime subscribers. This is an additional 2 million new subscribers versus the same period last year. And in the first quarter, FY23, alone we added 560,000 new subscribers. This, too, is a record number of new subscribers added in a single quarter. Total prime subscribers at August now total 3.5 million, well on our way towards a 7.25 million target set for 2025. Third, in the first quarter of FY23, Revenue margin as well as cash revenue margin moved above pre-COVID levels for the first time since April 2020. First quarter FY23, revenue margin and cash revenue margin exceeded pre-COVID-19 levels by 3% and 11% respectively. Cash revenue margin in the first quarter FY23 increased 117% versus the same period last year with bookings up 98 percent and the increase in revenue margin for booking of 8 percent was driven by the increased quality of our business following the pivot to subscription and strong growth and diversification revenues. Overall, the first quarter of FY23 has seen the improving trends we saw in FY22. and a return to profitability. Past marginal profit stood at 33.5 million euros. That's two times the amount we achieved in FY22. And a strong cash EBITDA growth, up 349 percent versus the same period last year. As guided previously, the strong growth in first-year prime members puts a drag on the growth in profitability. This jumps in the second year. as prime matures we expect improvements in profitability as proportion of prime members beyond their second year increases fourth the company is on track to meet or exceed its self-imposed fy25 target and is well financed and has solid cash flows why because our free cash flow in the first quarter f by 23 amounted to 29.4 million euros and cash and cash equivalents at the end of the period, net of facilities and overdrafts, were $30.8 million. And that's including the reimbursement of the remaining $30 million of the super senior revolving credit facility. The result of this is that at the end of June, the group only had $17 million drawn under the super senior revolving credit facility. We have a very strong balance sheet, as we do not have any short-term needs to refinance any of our debt. The earliest maturity is September 2027, and we are on track to meet our self-imposed three-year guidance, which is, first, prime members greater than 7.25 million, second, our proof approximately 80 euros, and third, cash EBITDA in excess of 180 million euros. In all, We believe we've got the right model, right people, right structure to seize and deliver on exciting opportunities ahead of us. Now I'll take you through more details. Please turn to slide six, where I'll take you through EDUS outperformance. As you can see on our booking data, EDU achieved record booking growth in the first quarter of FY23, reaching 4.4 million bookings in the quarter, 50% greater than pre-COVID. And if we look at July and August, we have continued to experience strong growth, with July and August bookings growing 38% and 55% above pre-COVID-19, respectively. All of this has been realized under the Ukraine war, COVID, high inflationary pressure, flight disruptions, et cetera. Also, I would like to add one additional comment about the excellent performance in August. The August year-on-year has higher growth than July this year. August is seasonally a less busy month than July, and therefore in absolute bookings, will likely be lower. As we move away from COVID, we do expect to return to a more normal autumn and winter seasonality pattern, which did not occur during COVID. This means we will likely have a lower number of absolute bookings in the months leading up to Christmas.

Please turn to slide seven, eDreams or Digio.

has consistently outperformed against peers as evidenced by IANA public data and recent results from low-cost carriers. And this translates into market share gains and highlights our superior proposition to customers as well as the strength and adaptability of our business model. The company has again outperformed versus regular airlines by 71 percentage points and versus the LCCs by 49 percentage points. in the first quarter of FY23. This is despite a market that is yet to return to pre-COVID-19 levels. Put another way, while the market continues to recover and is yet to achieve pre-COVID levels, EDU has been above pre-COVID levels now for four consecutive quarters. Please turn to slide eight, in which we will discuss the continued strong growth in Prime members. Prime continues to grow very quickly. It's up 164% versus the same period last year in members, and adding 2 million members in the 12 months to June 2022. In August, we reached 3.5 million members, a remarkable achievement since COVID variants disrupted the travel market for large parts of FY22 and in FY23. Overall, EDUA has become a much higher quality business with a pivot to our subscription model, which delivers loyal and repeating customers, resulting in a more profitable business after the first year. And it moves us from a transactional business to one of long-term, more predictable and sustainable relationships with customers and the associated financial benefits as well. Please turn to slide nine, in which we will talk about our diversification KPI. Overall, diversification revenue continues to grow. It is already above pre-COVID-19 levels and the largest contributor to revenues. Revenue diversification ratio has continued to improve It increased from 54 percent in FY21 to 74 percent in FY23, a 20 percentage point improvement over two years. If you could please now turn to slide 10, I'd like to reemphasize that we believe, regardless of the current macroeconomic uncertainties, our business model and track record positioned us to outperform the industry. we have demonstrated that we are the place in which customers prefer to book their travels. This is driven by, one, thanks to Prime, we offer the best prices, best value, and customer experience. Two, because we meet the customer needs even more than competitors from depth of choice, speed of overall experience, after sales service, and so many other things that we have taken years for us to relentlessly focus on and perfect. In total, we have higher customer satisfaction scores than our competitors. Three, also our customers will focus on price even more in the context of discretionary income coming under pressure, which again plays to our strengths. Four, in addition to all that, we have resilience via Prime with 3.5 million plus subscribers. who give us a much higher share of wallet of their travel that they continue to consume. Now I'll pass it to David, who will discuss in more detail our financial results.

Thank you, Daniel. If you could all please turn to slide 12 of the presentation, I will take you through the financial results in more detail. In the first quarter of fiscal 23, Revenue margin and cash revenue margin reached levels already above pre-COVID-19 levels by 3% and 11% respectively, despite the macroeconomic headwinds and recent industry disruptions. Revenue margin in the first quarter of fiscal 23 increased 113% versus the same period last year due to higher bookings of 98%, and the increase in revenue margin for booking of 8% which was driven by the increased quality of our business with the pivot to subscription and the strong growth in our revenue diversification. Variable costs increased by 128%. The increase was caused by the rise in bookings and an increase in variable cost per booking of 16% from 24.7 in the first quarter of fiscal 22 to 28.5 in the first quarter of fiscal 23. The cost of booking increased because of higher acquisition costs to acquire prime members and a rise in merchant costs associated to higher gross sales. These increases were partially offset by lower call center costs, the reward for the automation we implemented during the pandemic. Overall, in the first quarter of fiscal 23, we have seen the steadily improving trends we saw in fiscal 22 and the return to profitability. Cash marginal profit stood at 33.5 million. That's twice the amount we achieved in fiscal 22. And cash EBITDA grew 349% versus the same period last year. As guided previously, the strong growth in prime members in their initial year delays growth in profitability, with that profitability rising in the second year. Over the next few quarters, we expect improvements in profitability as the proportion of prime members in their second year and beyond increases. Fixed costs increased by 4.2 million euros, mainly driven by higher personal costs and externalities, both related to the recruitment of new employees, as well as some negative impact of effects. I would like to remind you that we do not expect an increase in fixed costs from 63.3 million in fiscal 22 to the 100 million that we've guided in the fiscal 25 target to be linear because recruitments to deliver on our business plan are front-end loaded. If you look at the Note 8.2 of our financial statements, we have increased the workforce by 147 employees year-on-year, with 107 of those employees being since March to June of 22, which is 20% of our target headcount in less than 10% of the time. As a reminder, in total we plan to add 500 new employees by March 25, with much of this front-loaded. As a result, adjusted EBITDA was slightly positive at 0.6 million. and that is 14 million euros, including the full contribution of prime from a profit of 3.1 in the first quarter of 22, also including prime contribution. Adjusted net income was at 11.5 million lost in the first quarter of 23. If you go to this, turn to slide 13 of the presentation. New KPIs show the strong growth in prime cash revenue margin and marginal profit in the last 12 months due to the exponential growth in prime members and corresponding ARPU. Our average revenue per user ARPU grew by 24% versus fiscal 22 and stood at 86 euros per member, which is above our 25 target of 80 euros. However, we do not expect this current level to be sustainable, and we maintain our long-term guidance of 80 euros per user. Current level is influenced by the significant increase in prime members during the last year and the gap between prime members at the end of period driving the subscription fee portion of ARPU and average prime members used for the denominator in the calculation. The strong growth in cash revenue margin and cash margin for profit has led to 41% and 53% over the last 12 months, cash revenue margin and cash margin for profit respectively now coming from prime members versus 34 and 45 respectively just one year ago. I would like to remind you that profitability of prime members increases substantially from the second year on as acquisition costs reduce very significantly. Once we have a larger proportion of our prime members in the second year corporate and subsequent years of membership, the profitability of the prime side of the business will improve. Please turn to slide 14 of the presentation. During the pandemic, we have continued to invest and innovate in our subscription offering and have seen remarkable results. Cash revenue margin is already above pre-COVID-19 levels by 11%, and cash marginal profit and cash EBITDA will improve due to the large increase of Prime members in the year, which I've highlighted before. Profitability of Prime member jumps in the second year. In the first quarter of 23, deferred revenue growth associated with Prime has accelerated following the subscription of 2 million more new members over the course of the year. This amounts to 13.4 million euros. That is up 166% year-on-year. Cash EBITDA with a full prime contribution was 14 million in the first quarter of 23, an improvement of 349% in just one year. Turning now to slide 25, I will take you through the cash flow statement. Sorry, that's slide 15. First quarter of 23, despite the macroeconomic uncertainty and recent air industry disruptions, which affected good portions of the quarter, we reported very stable net cash from operating activities. We have ended the quarter with a positive cash flow from operations of 36.2 million, mainly due to a working capital inflow of 28.9. The inflow during the first quarter of 23 is smaller than the first quarter of 22. Since then, we had a more rapid return of volume than anticipated, as many of the travel restrictions were eased between March 21 and June 21. Whereas during the first quarter of 23, our last quarter, the increase in volumes between March and June 22 was smaller, though still strong. This is partly offset by a higher increase in prime deferred revenue than in the first quarter of 22. We have managed our liquidity position well, a consequence of our strong business model and active management, and the strong bookings performance of the company. Liquidity at the end of June stood at 199 million euros. And I'm pleased to say that at the end of June 22, we only have 17 million euros left in our super senior revolving credit facility as pro. We have used 6.9 million euros of cash in the first quarter of 23 for investment. That's 1.2 million higher than the previous year as we're increasing our development capacity and therefore higher capitalization of software development. Cash used in financing amounted to 34.8 million euros compared to an inflow of 17.4 from financing activities the previous year. The variation by 52.2 predominantly relates to the repayment of 30 million that we've done under the revolver and some outstanding payments associated with the refinancing we did in January. Our free cash flow in the first quarter of 23 amounted to 29.4 million euros, and cash and cash equivalents at the end of period net of facilities and overdrafts was 30 million, which included, again, the remaining reimbursement of the revolver. Excluding this, our cash position would have been in excess of 60, which compares with 45 in the same period last year, and underlying a strong cash generation performance. I will now turn the presentation back to Dana to do the closing remarks.

Thank you, David.

Let me ask everyone to turn to slide 17. I'm going to conclude by giving you some final remarks. We strongly believe that we are positioned for future success due to our innovative approach in travel that has been proven in other industries. The reasons for this are, one, we're in the pole position in an attractive market. The EDU market is sizable, growing, and attractive, and EDU is positioned in the right segments. online, and leisure. EduMarket is one of the largest in the world. It's growing as attractive. It is still in the recovery phase, coming from an all-time low, and is growing now. Moreover, time and time again, leisure consumers have proven that they want to travel. and will prioritize travel versus other things. And leisure travel is not substitutable. In our year-end results, we shared data from surveys showing consumers would give up other discretionary spending versus travel. The results we have seen published in the last few weeks by some retail companies in comparison with our results and those of other travel companies already show this in the actual data. EDU is positioned at the heart of this, online and leisure. You have seen our bookings over the past year have been above pre-COVID levels for four quarters. And ever since the start of the Ukraine war, high inflation and flight disruptions, we continue to be significantly above pre-COVID levels.

Please turn to slide 18 of the presentation. The second reason.

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 19 of the presentation, which covers the third reason. EDU has demonstrated the ability to capture new customers through the Prime program while converting existing customers. Prime's 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 additional 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 last several years. But it's also attractive for new members too, all of which helps explain why we are capturing and building market share. Again, I have to stress, even with the Ukraine war, high inflation, flight disruptions, et cetera, Prime attracts lots of new members In fact, over one million just in the last six months. Whatever way you look at it, Prime is successful, delights customers, grows our market share, and it is mutually beneficial for our customers, the company, and our shareholders.

Please turn to slide 20 of the presentation.

In summary, we're well-positioned, well-financed, and on our way to meeting our self-imposed FY25 targets, which are Prime members over 7.25 million, an ARPU of around 80 euros, and cash EBITDA in 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 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 your questions on a first-come, first-served basis, but we will also try to group questions of similar nature. Should we not have time to respond to questions from the webcast, the investor relations team will make sure those are answered afterwards. Operator, if you could please open the conference for questions.

So I'm going to start reading the questions that we have in the, in the webcast. Um, the first group of questions comes from, uh, the analyst of central debt. The first one says, could you give us an indication on how do you expect your EBITDA to evolve once renewals of prime subscribers could weigh more on the mix? So thank you. Thank you for your question, Carlos. As you say, that is the biggest driver that there is for the increase in the profitability. And I think that we've repeated that several times across our speech today and we will not get tired of repeating it. To put everyone into perspective, we have just published a quarter with an increased level of profitability reaching 9% cash EBITDA margin. And that compares to 21% for the same quarter pre-COVID. At the same time, we have given a specific guidance that we have reiterated yet again today, that in fiscal 25, we will reach a cash EBITDA margin of 22% for the aggregate business And that is broken down between 29% for the subscription part and 10% for the transactional side part. And there are three drivers for the increase in profitability. But the most important one, and this is by far in proportion, is, as we have been saying, the increased proportion of prime members in their second and subsequent years of membership. That's the biggest driver. by far, and that's going to happen gradually. A lot less important is the improvement in the travel patterns with more passengers per booking, more long haul flights, more nights in destination. This in our plans is something that will happen very gradually until the end of fiscal 24, beginning of fiscal 25. but it is a lot less important than the maturity of the Prime members. The third one is the improvement that we keep doing to our products and services. But we intend to give back the vast majority of additional revenue and profit back to Prime members in the form of additional discounts. And that is why we expect, we've also said today, the ARPU, which is now at 86, to trend down to 80, because we're going to give back this in the form of discounts to prime members. We want our prime members to have a wonderful value proposition and to repeat and repeat with us. So the more important lever being the first one, we expect that already in the next few quarters, there will be meaningful improvements in the profit margins. The second question is, have you seen any change in your churn rate due to a worsened macroeconomic environment? And the response is no. The same way that we haven't seen deceleration in our volumes, or we have not seen deceleration in the increase in the net ads, we have also not seen an increase in the churn rate. our offer continues to be very competitive to our customers the second block of questions comes from uh francisco the analyst of exxon the first one says you have commented that margin should improve throughout the year thanks to lower acquisition cost from prime subscribers could you give us an idea of your marginal profit for fiscal 23 and We're not disclosing specific guidance for fiscal 23, but I refer to what I just said on the question side by the analysts that we do expect interesting improvements in profitability throughout the remaining three quarters of fiscal 23. The second question is, could you give us an idea of return levels in prime? Nice try, but we have disclosed this metric and we are not changing that. And the third question says, any light on the prime subscriber by geography? And we also don't disclose that information specifically, but like we have said in previous instances, we do not see a material difference among countries. in terms of the speed of take-up of prime. So there are two main factors that determine the amount of subscribers that we have across different geographies. The first one is how big the country is and naturally in bigger countries you're going to get bigger amount of subscribers and the second one is for how long has our prime offer been around in the country? And we tend to have a lot more subscribers in those countries where we've been offering prime for a bigger number of years. The third set of questions comes from Otto Siever from Barclays. I'm actually going to read them together because they are quite similar. The first one says, why did the diversification revenue take rate decline from 7.6 in the fourth quarter of 22 to 6.4 in the first quarter of 23? And the second one is, why did the classic supplier revenue take rate decline from 1.4 to 1.1 in the first quarter of 23? For those of you who are not familiar with that type of terminology in the travel industry, take rate refers to the revenue divided by the total basket size of the booking. We don't really use it as an internal metric that we really track because it doesn't determine the amount of revenue that we do on our booking. The amount of revenue that we do on our booking depends on the actual amount of products and services that the customer purchases, which is a function of the complexity of that booking. So the more passengers for booking that there is, the more further away that they fly, the larger amount of nights in destination that they take, all of those are factors of complexity and they allow us to provide more products and services. What we have been seeing in the industry in the last few months has been an increase in airfares. Even though they're still for Western Europe slightly below where they were pre-pandemic, they have been increasing in a meaningful way for the last, let's say, six months. So with the airfares increasing, naturally the basket size increases. And just mathematically, the take rate defined by this investor decreases. But it says really nothing about our business. The more important thing is how complex are the bookings that the customers take.

The next

Set of questions come from Chad Garcia, Schwartz Investment Council. It's a long list, so let me take them one by one. The first one says, are you seeing any changes in the percent of repeat crime bookings coming through cheap channels? And the answer to that is no, they have remained stable. The second question says, it looks like prime cash revenue margin from new Prime subscriptions exceeds that of Prime subs that had anniversaries in the quarter. Is this true? And if so, it bodes well for your earnings throughout the rest of the year. So it is true, and it's easy to understand. When we have a new subscriber, you have a subscription fee, and by definition, you always have a first booking. with with that subscription fee when you have a renewal during the quarter some of those renewals will be with customers that also in that quarter that make a booking and some of those renewals will not have a booking in the first quarter just because it's not the time of the year in which the customer makes a booking and therefore the revenue margin for those Renewing prime subs is lower because you don't have the revenue stated with with the bookie. So yes, it is true now as to how does it vote for the earnings I go back to the explanation that I've given already a few times which is The more than the prime member base matures the higher our margins are going to be done The third question says are you seeing any changes in in your prime subscription retention levels? And the answer is no. They continue to remain roughly the same. So this is the flip side of the short question, and so the answer is the same one. The fourth question says, what are your plans to retire your government debts? The government-sponsored debts, we have repaid half of that. So it was originally a 15 million loan of which as of today, none of the close of June, but as of today, we have given back half of it. So there's seven and a half remaining. The next seven and a half will be repaid in less than 12 months. So it's reasonably short time until that debt is repaid. The fifth one I think this one's for you, Dane. It says, any updates on hotels and U.S. expansion? Certainly.

So let me put in context again for people that are newer to us. We talked about a number of very attractive growth opportunities that we have in front of us. And I would refer you to probably our November 2021 presentation to investors, the investor deck. And we said that there is a number of ones, two of which Chad has mentioned. One was around hotels, the second was around the US. We continue to progress very well. In that, we said that there were multi-year type of initiatives for it in which we wanted to improve what we call a minimum viable product to a much, much better level because the results already were showing to be extremely positive in that. And so we continue to make progress on them. We also talked about our headcount increase, and part of those people would be allocated to those opportunities we've mentioned just recently. that we've hired 130 new people, and the bulk of them have actually gone on to these two opportunities. And so we continue to. As part of our results that you see actually for this quarter alone, we start to see some effects from the things that we have been doing. The U.S. improvements continue to be little by little incremental types of improvements that we continue to roll out. If I can say every month to every year, every month to every quarter. There are some more fundamental structural ones, and those won't come Really into the next financial year related to the US and then for the hotel similarly we continue to improve me on that And the more fundamental ones. I think we said we're really much more one to two years From now in terms of impact, but overall very good progressing Okay

The next question from this investor says, what should cash EBITDA margins look like a year from now? And said another way, how are customer acquisition costs impacting cash EBITDA margins? I think I've replied to this one already, and yes, the investor points very well that the biggest driver on the margins will be the reduction in the customer acquisition cost, and that reduction comes from prime members getting to the second, third year in which there isn't an acquisition cost for those. And the last question from this investor says, if you return to normalized seasonality, it should be less of an issue now, given the increasing percentage of revenues coming from prime subscription. Correct? Yes, that is absolutely correct. The subscription revenue increases as a percentage of the total. the swings in the amount of bookings on a quarterly basis coming from seasonality affect less the overall description of, let's say, the overall evolution of the business. That's why we always say that the subscription business model is one that has more predictability than the pure transactional business. The next Set of questions comes from the analyst at CaixaBank. The first one says, can you comment on the current average basket size gap versus 2019? Sure. The basket size in 2019 was around 450 years. that basket size decreased during the pandemic to a level of around 300 euros. The last quarter that we have published, the average basket size was 400 euros. As you can see, there has been, as I was saying before, quite a steep increase of the 300 of which we were. And although the majority of that has been driven by increases in airfares and not increases in the complexity of the bookings, um so there's still another 50 euros to go to get to the 450 that we used to have uh pre-pandemic which is also in line with the comment that that we that i said which is that the average pure effort prices are still a bit below 2019 and then the rest of the road to get to the 450 should come from the increased complexity of the buildings The second question says, aside from the bookings data disclosed, is there any additional color that you could provide regarding the most recent demand trends or expectations towards year end? Maybe you want to respond to that?

Yeah, so I think there's two points. Let me take first kind of recent ones and then looking forward. In terms of recent ones, I think our results speak for themselves. You can see that, you know, 50% in August, you know, almost 40% in July, et cetera, you know, are very good ones. So there's clearly that we have really been taking very material market share from others. And even with the impact of COVID, even with the Ukraine war, high inflationary things, You know, flight disruptions, we've all seen that. It's been reported so much. We continue to see, you know, and achieve really good levels of bookings, very materially above pre-COVID levels. And we're taking significant market shares. We've said during the course of today that the market has not yet returned to pre-COVID levels. for it. Going forward, I would expect, as David has highlighted also, that You know, we're moving now into a more, let's call it post-COVID phase, where within COVID, there really wasn't seasonality. What drove actually, in a sense, booking patterns was waves of COVID, so to speak. And now we're coming out of that. So I do expect that we will start to get to a much more normal, typical, type of seasonality that we used to see pre-COVID levels. And so what that means is that, you know, there's a typical autumn slash fall period, you know, where people don't travel as much. So let's say September, October, November, and then Christmas, people travel, you know, a fair amount, and then we'll do many more bookings. And then, you know, continue on in that type of pattern, January and February being stronger again. But I would think that we really will return to a much more seasonal driven type of one than what we've seen over the past couple of years. David, do you want to take the next question three?

Yes. It says, can you offer more details on your expectations regarding variable costs evolution over the next quarters? And I think this is the, let's say, the main driver of the evolution of the margins. And I basically just going to refer back to what I said before. I think I responded to this one. And then the fourth one, how has the crime trend been evolving? This has also been answered. It is quite stable. The next set of questions come from from . The first one says, can you comment on Q1 growth in bookings in Northern Europe? So the growth in bookings in Northern Europe year-on-year has been 130%, so it's slightly higher than the average for the whole company, which was 100%. So Northern Europe, from that point of view, is performing a bit better. probably it has to do with the relative ability to travel of Northern Europeans versus last year. And I wouldn't read excessively into that because the bigger determinants of the growth for specific countries versus others is how it compares in terms of the release of the COVID restrictions one year versus the other. In the second, can you comment on Q1 marginal profit in Southern Europe either on an absolute level or year-on-year? On marginal profit, I would say that that is a mix of many things, and looking at it at a regional level has several components. So how relatively complex are the bookings in one region versus another if a driver? Another driver would be how is the seniority of the prime members? in the different countries. If you have a bigger seniority of members in a certain country, so to put the obvious example, France is a country where we have the oldest offer of Prime, because it's been around for five years now, and it's also a very large country with 60 million people. We have quite a large base of prime members there, and of course the proportion of members there which are in their second, third, fourth year is higher than in other relative countries, and therefore the profitability of those is higher as well. So those are drivers of relative profitability of one country versus another. The third question says, should we start expecting some cyclicality in prime member growth as the world normalizes. Absolutely we should see some, because as Dana said during our speech, we do expect there is going to be a return in seasonality. to normal seasonality patterns which would go to the autumn and the winter having naturally less amount of bookings. When you have less amount of bookings you also have less amount of traffic in your website, less number of people that is looking to make a travel booking and therefore there will also be a lower base of for us to convert those visits into new prime subscribers. So yes, you should see some cyclicality on a quarterly basis on the number of ads to the prime program. And the fourth one from this investor says, any comments on prime churn numbers now that cohorts are coming off their first year? I think we've responded to this several times already. We haven't seen any change in the churn patterns. The next set of questions comes from Mumia Chawi from Institutional Investor Fixed Income. The first one says, why are reported revenues up less than bookings versus the same period in 2019? The cash revenue margin booking is lower than it was in 2019 by a conjunction of factors, one of them being the Prime membership, which increases the overall profitability, but we're also giving a very good amount of discounts to those customers. Another thing is that the relative complexity of the bookings, we've gone over this for quite a few times already, is lower today than it was pre-pandemic. And that gives us less opportunities to sell additional products and services to our customers. And those two would be the more important drivers. The second question says, can you please disclose the customer acquisition costs for the first quarter of 23? And I'm sorry, but it's not a number that we disclosed. We disclosed the variable costs in the aggregate. The third one says, can you please clarify total liquidity available as of the end of June 22? The total liquidity is 199 million, and that is composed of two things one is the remaining availability unused availability for cash under the rcf and that is around 150 million giving you around sorry yes about 150 million and the rest is is cash in the in the balance sheet and that that's basically what composes the 199. the four says RCF is fully undrawn, but only 150 million available according to the financial statements. Available cash is at 30 million. So total liquidity is about 180 million then. Okay, so this goes on the same. I think that the place where this investor is getting confused is that we are using, of the revolver as of today, 17 million, okay? But that you shouldn't double count with the 150 available. So it's 150 available plus all of the cash on the balance sheet, not the cash excluding the bank facilities and overdrafts, which is the 17 that I was talking about. Five, can you provide us with some guidance on expected bookings for the rest of the year? We're not in a position to give a specific number of bookings. We have, however, said already today that we do expect normal seasonality patterns to come. And therefore, for the second and third quarter, we would expect lower number of bookings because it already has September inside. November and December, you see that July and August have been very, very positive. But we're giving you the take the year on year. But the base of a normal systemality is a base of lower bookings. So to give you an idea, the 38%, the plus 30% of July that we've published versus the plus 55% that we've published for August up until the 28th. is going to give you approximately a very similar number of absolute number of bookings and that's because august seasonally is lower than july is that will happen with october november december and then we would expect that starting in january there is a meaningful pickup again in the number of bookings because that's the highest booking season of the year for us the last question from these investors what do you expect will be the impact on free cash flow generation as net working capital balance is now large? Well, that's very related to the comment that I made on your previous question. There are, other than EBITDA performance, of course, which we expect to improve over the year, the main contributor in terms of which has variability is the working capital. And the working capital has two components. One component comes from the amount of bookings and basket size. So it is the variations in the payables to the travel providers. And then we would expect to reduce in the Q2 and Q3 and to increase again in the Q4. And the other one is the increase in deferred revenue from prime members, which we expect to continue to perform well over the next three quarters.

The next question comes from from Cairn Capital.

What percentage of your Prime members are currently first year versus second year, third year, and over three years? I'm afraid that we don't disclose. That would be like disclosing churn, or very close to disclosing churn, and it's not KPI that we're willing to disclose. The next question comes from . Does the Prime subscribers number reflect paying customers, or does it include customers on their 30-day free trials? It only includes paying customers. So the customers that are in those first 30 days and haven't paid yet are not included in the number of 3.2 million as of the end of June and 3.5 as of today. And what has the conversion from free trial to paying customers been? That we don't disclose either. The next question comes from Olivier Monroy from BNP Paribas, asset management. Over what timeframe do you expect cash and EBITDA to converge towards each other?

On average,

given that uh there are portions of subscription fee which are recognized after the membership expires for the portions which are unutilized we do expect to keep a gap between cash and ebitda for as long as we keep growing the prime members and we expect to keep growing the prime members on a continuous basis however we expect that that will decrease because we think that once it's either no uncertainty in the market and people have more opportunities to travel, that the percentage of that prime fee that is recognized at the end of 12 months will be lower and lower and lower. Okay? So that phenomenon should decrease progressively. The next set of questions come from Julia Hay, Napier Park. The first one says, after Booking.com bought eTravelEye, we saw very aggressive advertisement from Booking.com focusing on their ability to cover both hotel and air tickets one-stop shop. Have you seen price pressure from intensified competition? David, do you want to take that?

Sure. Simple answer is no. To be clear, Booking.com has been offering flights for the past four or five years. No, we don't see price pressure.

And the second question, which is very related, is have you seen Booking.com taking air travel market share recently?

Look, as I've said before, we've been competing with them for many years now. You know, you've seen our market share, our market share gains, and our most recent results, right?

And that speaks for itself.

The next question is from Thomas French of HNA Global Investment Management, GMBH. It says, does it make a difference to your profitability if the basket size increases due to inflation and ticket prices, or due to increased complexity of the trip? Absolutely it does, yes. When the basket size increases solely because of inflation in airfares, we do not have an impact on our revenues. We have an advantage in the working capital, which is benefited by this, but we don't have a benefit in our revenues. Whereas if the basket size increases due to the complexity of the trip, then we do have an opportunity to provide more services to the customers, and that's when we get an additional revenue. So yes, absolutely. The next question comes from Frederick Sundberg of Tresidor. How many prime customers do you currently have on trial? We do not disclose that. That has been asked before. And this is the last question. And I don't see any more coming through. And I think we've had an hour already of call with lots of questions. Thank you very much. There's been quite a lot of people connecting. And with that, I am going to conclude the call. And I would like to inform you that on Wednesday the 16th of November is the next time that we will be hosting our conference call. That will be for the first half presentation of the fiscal 23. 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 edreamsregion.com. Thank you very much. It was a pleasure. Thank you.