Amadeus It Group Sa Ord

Welcome to the Amadeus First Quarter 2024 presentation webcast. Throughout the call, all participants will be in a listen-only mode, and afterwards there will be a question and answer session. You can ask questions via the phone lines by dialing star 1 on your telephone keypad at any moment during the presentation. I'm pleased to hand you over to Luis Maruto, President and CEO of Amadeus. Please go ahead, sir.

Good afternoon. Welcome to our first quarter results presentation and thank you for joining us today. Joined by Till, I will review our most important developments this quarter and Till will elaborate on the key financial details. As you know, Till will be departing Amadeus to pursue a new career opportunity. We wish him well and we are grateful for his contribution to Amadeus since his arrival in September 2020. The process to hire Amadeus' next CFO has been launched by our board of directors and is underway. Until further notice, I will be acting as CFO. Till will also continue to support us for some time. We will update you on this matter further down the line. We are looking forward to our investor day on June 18 in London. During the day, my leadership team and I will provide you with a strategic update across our businesses. We will also be providing you with our views on our financial evolution for the mid-term. The plan we will present to you has been built by the Amadeus Senior Leadership Team together, and we are all committed to delivering on it. We look forward to seeing you at our investor day, or alternatively, we welcome you to connect to the webcast. Let's turn to slide four, and let me start with an overview of our results. In the first quarter, our steady financial evolution continued. Amadeus Group revenue increased by 14%, EBITDA growth grew 14%, EBIT grew faster by 19%, and adjusted profit expanded by 19%. This positive development was supported by the double-digit growth evolutions at each of our reported segments, air distribution, air IT solutions, and hospitality and other solutions. Our financial performance in the quarter dropped solid pre-cash flow generation of $336 million. In late February 24, we announced the completion of our latest set-by-back program launched in November 23. And in March, we announced our acquisition of Voxel Media, a leading provider of electronic invoicing and a B2B electronic payment specialist. As a result, our leverage at March 31 was 1.1 times last 12-month EBITDA, a net financial debt amounting to $2.46 billion. To complete our developments on demand in front, we were pleased that having obtained all the regulatory approvals in early April, we closed our Q1 announced acquisition of VisionBox, a leading provider of biometric solutions for airports, airlines, and border control customers. This year has kicked off well and in line with the expectation we serve with you for 2024 early in the year, and we confirm our outlook for 2024. Additionally, this quarter, we have made some important business announcements. Amadeus will be deploying its NDC technology for Expedia Group. This represents a significant endorsement for our NDC industry-wide rollout and reflects Amadeus' commitment to the industry's evolution towards modern retailing. Also, we were very pleased to announce that British Airways has chosen Amadeus as technology partner for Amadeus Niveo. Amadeus Nibio is a new portfolio of modular solutions built on open and AI technology. The agreement is a milestone in the airline's path to modern retailing and the use of dynamic offers and orders, and it puts British Airways at the forefront of the retailing transformation. Finally, I would also like to highlight that in payment, Amadeus Jolion subsidiary Outpace has been granted the e-money license it applied for in 22. Our base intends to offer prepaid virtual card issuing with this B2B wallet solution which travel agencies use to pay travel providers. Let's now review the key developments at each of our reported segments. Please turn to slide five, starting with air distribution. In the first quarter, we continue to strengthen our content offering and sign 16 new contracts for renewals of distribution agreements with airlines. We are also advancing on NDC. This quarter, China Eastern Airlines became the first airline in mainland China to sign with Amadeus for international NDC distribution. The U.S. travel platform will also be distributing the full range of tire works NDC first. At March 31st, we had over 50 NDC-related distribution agreements signed with airlines, which we are in the process of implementing. We aim to make MDC possible for the travel industry at scale through the GDS. Carriers adopting MDC require the global reach. We enable to distribute their content both under the traditional EDFAC and under the MDC standard. The Amadeus Travel Platform extends the airline selling reach, the geographical and customer set reach, and is the primary distributor for the higher yield volumes. For the travel sellers, Amadeus offers a fully orchestrated multi-source content provision. We aggregate content from both NDC and EDIPAC technologies in a single interface, promoting simplification, transparency, comparability, and serviceability of the content, independent of the NDC version for the technology use. Our technology is end-to-end, including strong for servicing capabilities. We build deep integrations into the TravelSellers ecosystem, including end-to-end, mid-back-office integration, automated payment reconciliation automation, and omnichallenge As the NDC content made available through our platform increases, we will be capturing more and more NDC bookings. Our goal is to become the undisputed NDC aggregator for airlines and travel agencies. In this regard, we are making progress with travel agency and in the large online OTA space as well. In the travel agency side, as I was saying, Amadeus will be deploying NDC technology for one of the largest OTAs in the world, Expedia Group. Within the large OTA space in the U.S., Expedia joins the list of our NDC agreements with Pricelines and Perth Portal and other travel agencies worldwide, such as Apple Laser Group, Travix, and Espegard. With regards to our volume evolution, in quarter one, our bookings grew 3%, and our air distribution revenue grew by 13%. Our fastest growing region was Asia Pac, and our largest regions remain Western Europe and North America. As we should expect, we see a normalization of our booking growth into 24 compared to the 23 evolution, which benefited from a stronger recovery effect. IATA projects 10% global air traffic growth for 24 on the back of 38% in 23. We have two specific effects on our booking this quarter. As we anticipated, our booking performance was negatively impacted by the timing of Easter and Ramadan, which in 24 took place mostly in the first quarter, whereas last year it happened in the second quarter. Also, as we saw in quarter four, our bookings in quarter one of this year were impacted by the evolution of our local bookings in Noram. And in Noram, we are seeing local bookings with channel through direct connects between one very large OTA and a few of the larger carriers. If we exclude the holiday timing differences and the local booking effect in Noram, I mentioned we estimate our booking role in the first quarter was at around 8%. As we described last quarter, direct connects between big airlines and large online travel agencies in large domestic consolidated markets are a possibility. They are costly to build and to maintain. Therefore, to be economically viable, they require large volumes. Those, they typically affect local bookings where we generate low fees. The impact on our early distribution revenue growth from these direct connects in Noram in quarter one was marginal. We stand to slide six now for a review of our IT solutions. Our key announcements this quarter in Noram IT, as I was saying before, is British Airways contracting to become an EVO customer. Fineral Saldia also signed for Amadeus Nibio, and we aim to continue to expand this list. With Amadeus Nibio, we are leading the way for the retailing transformation of the airline industry. It is a traveler-centric retailing platform offering next-generation retailing capabilities to the airlines, including but beyond offers and orders, but by a fully flexible, future-proof cloud-native solution in the latest advances in AI. As we have discussed in the past, this is an industry evolution that will require years of focus and dedication, but we are well positioned to drive this transformation and to support the industry's transition. Additionally, in the quarter, several airline customers signed for additional Altea components, such as Taron and Rwanda Air. In Airport IT, we continue to expand our customer base the scope of solutions we provide to existing customers, as with several signatures in the Americas, such as with Los Angeles International Airport.

and disruption at the airport.