eDreams ODIGEO S.A.

Good morning, everyone, and thank you all for joining us today. I'm David Larros, the Director of Investor Relations at the Dreams of the Year. As always, you can find the results materials, including the presentations and our results report, on the investor relations sections of our website. I would like to inform you that today's presentation will be longer than usual. It will be broken down out in two parts. Part one will focus on our results for the first half of the current financial year, and part two will focus on our performance since our capital market day one year ago. and update on our progress towards our three-year guidance. I will now pass you over to Dana Dunn, our CEO, who will take you through the first part of the presentation. Thank you, Debbie.

Good morning, everyone, and thank you for joining us today. Throughout the first half of this financial year, FY23, we've seen the travel market continue to improve and recover significantly. Even with the conflict in Ukraine, even with high inflationary pressures, even with flight disruptions and outbreaks of COVID, people have clearly demonstrated that they want to travel and are willing to spend their money on it. We've been saying this for over a year now, based upon survey data from consumers. and actual data based upon what consumers have done over the past 50 years when there have been significant macroeconomic shocks. I know that this goes counter to a number of high-paid industry experts and their reports, and their assertions have been wrong to date. Within this market context, we've demonstrated superior performance within our industry. In fact, we are now at five quarters in a row above pre-COVID levels in bookings, and no other global travel business has achieved this. And we have a unique model that's more driven by a stream of recurring revenues from other subscription businesses versus any other travel company. Please turn to slide six. which is a summary of our performance of the first half of our fiscal year 2023 results. In the first half of FY23, we again achieved strong bookings, reaching $8.6 million. We continued to gain market share and consequently remain well on track to exceed our FY25 guidance. Some of the key highlights for today's presentation are, first, We have again achieved strong bookings growth. In FY23, bookings were up 50% year-on-year and 48% above pre-COVID-19 levels. This is despite all of the disruptions in the travel market from COVID, Ukraine war, flight disruption, inflation. And we know that the travel market has yet to fully recover to pre-COVID levels. Despite these macroeconomics, headwinds. Even our most recent booking numbers still show strong growth, with our bookings in October up 45% versus 2019 pre-COVID numbers. And in November from the 1st to 8th, also up 45% again versus 2019 numbers. There's no doubt consumers want to travel, and they want to travel with us. There's a reason why travel is the largest single category online. Travel provides the unique experience that people cherish, a desire, and a will to spend on it. The second highlight we'll hear from today, both Prime and our market-leading, Prime, meaning our market-leading subscription products, and edu continue to outperform. Edu bookings continue to outperform and are materially better than the markets. While the market remains below pre-COVID levels, we continue to trade significantly above pre-COVID levels, now having achieved our fifth consecutive quarter above pre-COVID levels. Above all, our business has increased its quality with the PIS 2 subscription. It has higher repeat rates and becomes more profitable year by year as prime customers renew. In Q2 FY23, we reached 3.6 million subscribers to a run rate of 479,000 per quarter during the first half of FY23. This is an increase of 8% versus FY22 quarterly revenues and 47% versus FY21 quarterly revenues. Over a year ago, we started a super high growth in adding new prime members. One year on now, the net new ads are now stabilizing with the effective churn from all the new members added over a year ago. The third highlight today is that in the first half of FY23, revenue margin and cash revenue margin moved above pre-COVID levels for the second consecutive quarter since April 2020. The first half of FY23 revenue margin for cash revenue margin exceeded pre-COVID-19 levels by 3% and 12% respectively. Cash revenue margin in the first half of FY23 increased 69% versus the same period last year, with bookings up 50% and the increase in revenue margin per booking of 15% driven by the increased quality of our business following the pivot to subscriptions. Overall, the first half of FY23 has seen the continuation of the improving trends we saw in FY23 and a return to profitability. Cash marginal profit stood at 74.4 million euros. That's an increase of 51% versus the amount in FY22. And as expected, strong cash EBITDA in the second quarter of FY23, which resulted in 34.5 million euros in the first half of FY23. This is up 78% versus the same period last year. As guided in the first quarter, the strong growth in prime numbers in their initial year delayed growth in profitability, since profitability of prime number grows in the second year. In addition, it is important to note that if instead of reaching 3.6 million members in the end of Q2 FY23, if we have just reached 3.5 million members, that means just 110,000 less net assets, This would have resulted in EDU achieving an 18% cash EBITDA margin instead of the 13% you see reported. That means cash EBITDA margin would have been 5 points higher. We had just added 110,000 less net subscribers. Fourth highlight. When we're on from setting out our self-imposed targets for FY25, we are well on track to meeting them. Prime members. Despite a host of negative macroeconomic factors that have occurred after we set our target of 7.25 million members by the end of FY25, we are on track to meet or exceed that target. Our net ads run rate is ahead of expectations, and our trend rates are slightly improving, and we are confident we will meet or exceed the target. Our group. Our group is converging with our guidance of 80% per user, and we are confident we will meet the guidance. Cash EBITDA. Our Q2 FY23 results demonstrate that as the percent of year 2 plus prime members increases, that our margins increase. Our most recent results clearly demonstrate we are well on track to meet our target of over 180 million euros of cash EBITDA in FY25. In sum, we really believe we've got the right model, right people, right structure, to see them deliver the exciting opportunities ahead of us. Now I'll take you through more detail. Please turn to slide 8, where I'll go through EDA's outperforming. As I referred to earlier, EDA achieved strong bookings growth in the first half of FY23. reaching 8.6 million bookings in the semester. This is 48% greater than the pre-COVID levels. And if we look at the most recent figures of October and November, we have continued to experience strong growth of 45% above pre-COVID-19 levels in October and the first eight days of November. All of this has been achieved under the Ukraine war COVID high inflationary pressure, slight disruptions, etc. Also, I would like to add that despite the excellent performance in October and November, as we move away from COVID comparisons, we do expect to return to a more normal autumn and winter trading pattern. This means we will likely start to see a return to more normal seasonality. And this, in turn, would mean that we will likely have a lower number of absolute bookings in the months leading up to Christmas, and, therefore, also a higher absolute booking in January and February, of course. Please turn to slide 9. E-Dreams for Digital has consistently outperformed against peers, as evidenced by IACA public data and recent results from low-cost carriers. This results in market share gains and highlights our superior proposition to customers, as well as the strength and adaptability of our business model. However, I would also like to highlight that as corporate travel returns, this gap probably will close too. We do outperform versus regular airlines, IATA, by 64 percentage points, and versus low-cost by 20 percentage points in the second quarter of this financial year. Please now turn to slide 10. As we already highlighted in our FY22 results presentation, over the past 40 years, even during recessions, energy crises, high inflationary environments, et cetera, passenger traffic has mostly grown. While there always is 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 2.6%, which occurred in 1991. Please turn to slide 11. Even with inflation, either benefits from highly variable cost structure, resulting in you being less impacted as most of the variable costs are linked to volume level. 85% of our costs in the second quarter of FY23 over the last 12 months are variable. And this is on a business that is profitable and growing. With that, let me now pass it over to Debbie, who will take you through in more detail our financial results.

Thank you, Dana. If you would all please turn to slide 13 of the presentation, I will take you through the financial results in more detail. Our 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 numbers. Our average revenue per user, or ARPU, as we have already highlighted, is converging with a guidance of 80 euros per user. However, as previously outlined, we did not expect the previous levels to be sustainable, and we maintained our long-term guidance of 80 euros per user. As expected, the evolution in this quarter was driven by the phasing out of the second quarter of fiscal year 22 in the last 12 months calculation. That was a quarter in which we had a material increase in revenues, and there was a sudden increase in travelers due to the rollout of vaccination. The strong growth in cash revenue margin and cash margin of profit has led to 42% and 54% of our last 12 months cash revenue margin and cash margin of profit respectively, now being delivered for prime members versus 38% and 50% respectively just one year ago. I would like to remind you that profitability of prime members increases substantially from the second year as customer acquisition costs reduce very significantly. Once we have a larger proportion of our prime members in the second year cohort and subsequent years of membership, profitability of Prime will continue to improve. This turns out to be like 14% of the presentation. During the pandemic, we continued to invest and innovate in our subscription offering and subsequently have seen remarkable results. Cash-over-the-margin is already above pre-COVID-19 levels by 12% and cash margin of profit and cash EBITDA will improve due to the large increase of prime members in the year as profitability of prime members jumps from the second year onwards. In the first half of fiscal 23, deferred revenue growth associated with prime has obviously accelerated, following the subscription of 1.9 million more new members over the course of the year. This amounts to 27.5 million euros, and that is up 48% year-on-year. Cash EBITDA with a full-prime contribution was 34.5 million in the first half of the fiscal year, and that's an improvement of 78% in just one year. As expected, strong cash EBITDA in the second quarter of the fiscal year was alone 20.5 million euros, and that is a 42% increase versus just the quarter prior, the first quarter of the fiscal year. Please turn now to slide 15 of the presentation. In the first half of fiscal 23, revenue margin and cash revenue margin continued with levels above pre-COVID-19 levels by 3% and 12%, respectively, despite the microeconomic end wins and the industry disruptions. Revenue margin in the first half of 23 increased 72% versus the same period last year due to high bookings of 50% and the increase in revenue margin for booking of 15% subscription and the strong growth in our revenue diversification. Viable costs increased by 76%. The increase was caused by the rise in bookings and an increase in viable cost of booking of 18%, from 24 million in the first half of last fiscal year to 28.2 million in the first half of fiscal 23. The cost of booking increased because of higher acquisition costs to acquired prime members, and a rise in merchant costs, which are associated to higher basket values. Overall, in the first half of 23, we have seen the improving trends we guided you in the fiscal 22 on the first quarter of fiscal 23 results presentation. Cash marginal profit increased to 74.4 million euros. That's up 51%, the amount we achieved in the previous year. And cash dividend grew 78% versus the same period of last year. As guided previously, the strong growth in prime members in their initial year delays growth in profitability, with profitability rising in the second year. Over the next few quarters, we expect improvements in profitability as the proportion of prime members in the second year and beyond increases. Fixed costs increase by €10 million, mainly driven by higher personal costs and external fees, both related to the recruitment of new employees as well as some negative impact of foreign exchange. I would like to remind you that we do not expect the increase in fixed costs from the 63 million in fiscal 22, the last one, to 100 million in fiscal 25 target to be linear because the recruitment is front-end loaded in order to deliver on our business plan. We will show you more detailed figures on the same thing later on in the presentation. If you look at Note 9.2, of our financial statements, we have increased the workforce by 201 employees year-on-year, with 170 being incorporated between March to September, only six months. That is 34% of our target headcount in less than 15% 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 7 million euros, That's 34.5 million, including the full contribution of prime from a profit of 19.4 in the first half of fiscal 22, also including the prime contribution. Adjusted net income was 19 million euros lost in the first half of fiscal 23. Turning now to slide 16, I will take you through the cashless statement. In the first half of fiscal 23, despite the Ukraine war, year industry disruptions, which had good portions of the first quarter and macro headwinds, we ended the semester with a positive cash flow from operations of 33 million euros, mainly due to a working capital inflow of 19.5. The inflow in the first half of 23 is smaller than it was in the first half of fiscal 22 due to the higher recovery volumes that we had in the second quarter of fiscal 22. So that is July, August, September. of 2021. And if you remember, that happened right after the massive vaccination and release of a good portion of the travel restrictions, while in these last six months, the volumes have been more in line with the normal seasonality, not that big of a jump. We have managed our liquidity position well, a consequence of our strong business model and active management. We have achieved this despite travel restrictions, which reduce the levels of trade. Liquidity has remained more than sufficient and stable throughout the pandemic. In fiscal 23, end of September, the liquidity position was strong at 167 million euros after repaying 3.8 million euros of the government-sponsored loan and another 3.4 million of costs associated with refinancing. We have used 16.2 million of cash in the first half of 2023 for investments. That's 4.5 million more than last fiscal year. as we are increasing our development capacity and therefore higher capitalization of software developers. Cash used in financing amounted to 50 million euros compared to 14.9 from financing activities the previous year. The variation by 35.5 million euros in financing activities mainly relates to the reimbursement of the Super Senior Revolver credit facility by 30 million and the government-sponsored ROM by 3.8 million. This variation is offset with an increase of bank overdrafts by 28.5 million euros. That's including the line bank overdrafts usage in the cash flow statement. I will now turn the presentation back to Dana to do the first part of our strategy performance in Prime one year after the capital market day, which will cover the strategy overview and two of our self-imposed fiscal 2021 targets, that is Prime members and the IFO.