eDreams ODIGEO S.A.

Good morning, everyone, and thank you all for joining us today for our Q3 fiscal year 2023 results presentation for the nine months ending 31st of December 2022. I'm David Larros, the Director of Investor Relations at eDreams Odigio. 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 Dana Dunn, our CEO, who will take you through the first part of the presentation. Thank you very much. Thank you, David.

Good morning, everyone, and thank you for joining us today. Over the past nine months, we've seen the resilience of the travel market. In spite of the Ukraine war and macroeconomic issues such as high inflation, travelers have been returning to the market and prioritize travel over many other discretionary expenditures. While the market still is not fully recovered to its pre-COVID levels, It certainly bodes well for its future. Within this context, EDO has continued to develop and trade well, improving the quality of our business following the pivot to the subscription model. We have seen our margins improve as we said they would, and we have demonstrated superior performance within our industry. In fact, we are proud to report that we have now delivered six quarters in a row above pre-COVID levels in bookings, a feat which no other global travel business has achieved. That, in our view, is no coincidence, since we believe we have a unique business model, which is very hard for others to replicate. It delivers an increasing stream of recurring revenue from our subscription business and has consistently delivered outperformance versus any other travel company. Please turn to slide five. which is a summary of our performance of our Q3 fiscal year 2023 results. Some of the highlights for today's presentation are, first, Prime is delivering significant uplifts in profit margins as the Prime membership program matures. As guided, the maturity of Prime members is the most important driver for profitability. This has resulted in strong improvements in profitability as we have more and more prime members renewing their memberships. Consequently, in the third quarter FY23, cash marginal profit and cash EBITDA margin improved significantly. Cash marginal profit was at 115.5 million euros. This increased 44% year on year, And in the third quarter of FY23, cash marginal profit margin increased to 29% from 21% in the first quarter of FY23. That's an eight percentage point improvement. Cash EBITDA also showed substantial improvements. It was 57.4 million euros in the nine months of FY23. That's up 72% versus the same period last year. Also in just the third quarter of FY23, cash EBITDA was 23 million euros. It's clear and proven now that as the maturity of prime members increases, margins improves. Cash EBITDA margin in the third quarter of FY23 stood at 16% versus 8.8% in the first quarter of FY23. Excluding a one-off FX positive impact on cash EBITDA margin, The margins stood at 14.6%, which is still well above Q1 and Q2 FY23 levels. To reiterate what happens, strong growth in prime members in year one delayed profitability, which significantly improves from year two onwards. The second highlight, prime model is successful and proven. E2 bookings continue to outperform and are materially better than peers in the market. The market remains below pre-COVID levels. However, we continue to trade significantly above our pre-COVID levels, now having achieved our sixth consecutive quarter of above pre-COVID levels. A business with a pivot to subscription has higher repeat rates and increasing profitability year by year as prime customers renew. In short, our business has become a much better, more predictable, and much higher quality business. Also, Prime membership grew 81% year-on-year to 3.9 million subscribers. This is even as the industry moved to more normalized seasonality booking patterns, with the October to December period being the seasonally low point of the year. In the nine months of FY23, we added an average of 427,000 net ads of prime members per quarter. One year after the start of our superior high growth in prime net ads, gross ads have been partially offset by normal churn from a higher prime number base. Lower net ads in the third quarter of FY23 were seasonally influenced, being at the lowest aggregate demand quarter of the year. At the start of the new calendar year, we are now in a strong booking period with a current run rate of 410,000 net ads based on the first six weeks of the quarter, which is already 27% more net ads than the third quarter of FY23. Third highlight, we are well on track to meet our self-imposed FY25 targets. In sum, we believe we have the right model, right people, and the right structure to seize and deliver on our exciting opportunities ahead of us. Now I'll take you through more detail about our prime performance and why Prime Auto is a proven success. Please turn to slide seven. As I referred to earlier, in the third quarter of FY23, cash marginal profit margin continued to improve as mature increased. As guided, the maturity of prime members is the most important driver for profitability. This has resulted in strong improvements in profitability as we have more and more prime members renewing their memberships. In the third quarter of FY23, cash margin on profit margin increased to 29 percent from 21 percent in the first quarter of FY23, an eight percentage point improvement. Let's turn to slide eight. Cash EBITDA also improved substantially through increased margin as maturity of prime members increases. As guided in the first quarter, Strong growth in year one prime members delays profitability, which improves from year two. As maturity of prime members increases, margins improve. In the third quarter of FY23, cash EBITDA margins stood at 16% versus 8.8% in the first quarter of FY23. This is an improvement of seven percentage points, six percentage points excluding the one-off FX positive impact. Excluding the one-off FX positive impact, cash EBITDA margin would have stood at 14.6%, still well above the first quarter and second quarter FY23 margins. Please turn to slide nine. Due to prime, Edo Bookings' performance continues to be materially better than industry peers. It is important to highlight the industry is moving to more normalized seasonality patterns in terms of travelers booking their holidays. There is a seasonality decrease in the third quarter, meaning the October to December period. October to December is the market's weakest quarter in terms of volume. EDU's superior value proposition to Prime has resulted in EDU consistently outperforming industry peers. Throughout the pandemic, EDU has outperformed against the airline industry, which highlights the strength and adaptability of our business model, with a business that has increased its quality with the pivot to subscription. The company now continues to achieve strong growth in market share versus supplier direct bookings due to its better content quality, more comprehensive offer, flexibility, and focus on leisure travel. Based on the latest figures available, corresponding to the nine months of FY23, the company's outperformance versus supplier direct was plus 63, and versus low-cost carriers was 42 percentage points above. GAAP is expected to close as corporate travel returns, which is a segment of the market in which we do not participate. And if we look most recently at January and February, we have continued to experience strong growth of 31 percent above pre-COVID-19 levels in January and the first 15 days of February. Please turn to slide 10 of the presentation. Prime member growth remains stable despite COVID waves, geopolitical and macro context, and normalization of seasonality patterns. In the third quarter, FY23, we reached 3.9 million members, an 81% increase versus the same period last year. This is despite industry moving to more normalized seasonality patterns in terms of travelers booking their holidays. Prime members, as of the 15th of February, 2023, reach 4.2 million subscribers, which maintains a good momentum. Please turn to slide 11 of the presentation. And as net ads of Prime members are influenced by seasonality, they will increase in higher volume seasonality periods, such as the fourth quarter of FY23. The lower net ads of Prime members in the third quarter of FY23 we're in seasonality as less people are looking to book travel at this time of year. Q4 is a high seasonality, and the current run rate of the net ads during the first six weeks order is already 27% higher than in the third quarter of FY23. Now let me pass it over to David, who will take you through our financial results.

Thank you, Dana. If you could 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 and significant margin uplift as maturity of prime members increases. Our average revenue per user, or ARPU, as guided, is trending towards the mid-70 euros level and then will converge with our fiscal 25 guidance of 80 euros per user. In the third quarter of fiscal 23, prime ARPU stood at 76.8 euros per user as expected. The evolution in this quarter was driven by the phasing out of the second quarter fiscal 22 in the last 12 month calculation. This quarter had a material increase in revenues as there was a sudden increase in travelers due to the rollout of the vaccine. As the prime member base grows, there is a mathematical effect of decrease in the ARPU as average and end of period member figures become closer to each other. We will continue to see this effect during all of fiscal 24. And then ARPU will converge back to the target of 80 euros in fiscal 25. A strong growth in cash revenue margin and cash marginal profit has led to 44% and 56% in our last 12 months, fiscal 23, cap revenue margin and cash margin of profit, respectively, now being delivered from prime members, versus 40% and 53%, respectively, a year ago. I would like to remind you that profitability of prime members increases substantially from the second year onwards, as customer acquisition costs reduce very significantly. As we have a larger proportion of our prime members in the second-year cohort and subsequent years of membership, the profitability of prime will continue to improve. Please turn to slide 14 of the presentation. During the pandemic, we continued to invest and innovate in our subscription offering and subsequently have seen remarkable results. Cash revenue margin is already above pre-COVID-19 levels by 10%. And cash marginal profit and cash EVBA will improve due to the large increase of Prime members in the year, as profitability of Prime members jumps from the second year onwards. Consequently, in the nine months of fiscal 23, deferred revenue growth associated with Prime has accelerated following the subscription of 1.8 million new members over the course of this year. This amounts to 40.2 million euros that is up 21% year on year. Cash EBITDA with a full prime contribution was $57.4 million in the nine months of fiscal 23, an impressive improvement of 72% over last year. As expected, strong cash EBITDA in the third quarter was alone $23 million, a 12% increase versus the second quarter of fiscal 23 and a 64% increase versus the first quarter of 23 which amounted to 20 and 14 million respectively, as a strong growth in prime numbers in the first year, the lowest growth in profitability as this one jumps from the second year onwards. In the third quarter of fiscal 23, we saw a substantial improvement in margins as the maturity of prime numbers increases. Cost margin of profit margins increased to 29% for the third quarter from 21% in the first. That is an 8 percentage points improvement. Cash EBITDA margins in the third quarter also achieved very substantial improvements with the cash EBITDA margin standing at 16 percent versus 8.8 percent in the first quarter of 23. Excluding a one-off positive impact of 2.1 million, cash EBITDA margin stood at 14.6 percent. It's still well above the first quarter and the second quarter of fiscal 23. Please turn to slide 15 of the presentation. In the nine months, fiscal 2023 revenue margin and cash revenue margin continued above pre-COVID-19 levels by 2% and 10%, respectively, despite the macroeconomic headwinds and the industry disruptions. Revenue margin in the nine months increased 59% versus the same period last year due to higher bookings up 35%, and the increase in revenue margin per booking of 18%. which was driven by the increased quality of a business with a figurative subscription and with strong growth in diversification and classic customer learning. Variable costs increased by 59%, caused by the rise in the volume of bookings and an increase in variable cost per booking of 17%. Variable cost per booking increased from 24.3 euros to 28.5 because of higher acquisition cost to acquire prime members and a rise in merchant costs. and merchant costs are themselves associated to high growth sales and the international expansion. Overall, the third quarter of fiscal 23 has seen the improving trends we saw in the second quarter and significant improvements in profitability as we have more prime members renewing their memberships. Cash-long-year profit is screwed at 115.5 million euros. That is an increase of 44% of the amount in fiscal 22. Cash with VA also shows substantial improvements which resulted in 57.4 million in the nine months, that's up 72% versus the same period last year. Fixed costs increased by 11.2 million, mainly driven by higher personal costs and external fees, both related to the recruitment of new employees, and is offset by 1.6 million euros of positive impact of effects for the nine-month period. I would like to remind you that we do not expect the interest in fixed costs from 63.3 million in fiscal 22 to 100 million in fiscal 25 to be linear because recruitment is front-end loaded in order to deliver on our business plan. As a reminder, in total we plan to add 500 employees by March 25 with 50% of those having already been added in the past 12 months. As a result, Adjusted EBITDA was 17.2 million from nil in the nine months of fiscal 22. Then adjusted net income was 25.8 million euro loss in the nine months of fiscal 23. Turning now to slide 16, I will take you through the cash flow statements. In the nine months of fiscal 23, despite headwinds and normalization in the market, we ended the quarter with a positive cash flow from operations of 31.9 million. sorry, 31.9 million, mainly due to a working capital inflow of 11.6. The inflow in the nine months of 23 is smaller than the inflow in the nine months of 22 due to the higher increase of volumes that we saw between March 21 and December 21, which was the period right after release of the travel restrictions. The volumes between March 22 and December 22 have been of a more stable nature. We have managed our liquidity position well, a consequence of our strong business model and active management. Liquidity has remained more than sufficient and stable throughout all of the pandemic. At the end of December 22, the liquidity position was 157 million euros. We have used 27 million of cash in the nine months of 23 for investment, 9 million higher than fiscal 22 as we are increasing our development capacity and therefore higher capitalization of software developed. Cash used in financing amounted to $33.1 million compared to $16 million from financing activities in the previous year. The variation by $17 million in financing activities relates to reimbursement of the revolver crane facility by $11 million and the government-sponsored loan by $3.8 million. The variation is offset with an increase of bank overdrafts by $22.7 million in the nine months of fiscal 23 including the line bank overdrafts usage in the cash return. I will now turn the presentation back to Dana to do some closing remarks.