Amadeus It Group Sa Ord

Good morning, ladies and gentlemen, and welcome to the Amadeus H1 2024 Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press the star zero for the operator. I would now like to turn the conference over to Luis Maroto, President and CEO. Please go ahead.

Good afternoon and welcome to our 24 first half results presentation. Thank you for joining us today. I'm joined by our business heads, Desius Palmorbida and Paco Perello-Fao. I will start today's presentation with a general overview of our most important developments. Desius and Paco will cover the business reviews for our segments. I will end by reviewing the key financial aspects. Our CFO executive search process is progressing well. We'll provide you with a more detailed update as soon as possible. Before we get started, I would like to thank you for your participation at our recent Investor Day in London. Over the years, we have debated Amadeus many times. Yet again, we had a highly productive and in-depth discussion on our business and growth opportunities. We look forward to delivering on our commitments in the years to come. We stand to slide forward for an overview of our results. 2014 caught strongly for Amadeus, and this evolution has continued into the second quarter, where we continue to see double-digit growth rates, as well as EBITDA and EBIT margin expansion. In the first half of the year, Amadeus grew revenue increase by 13%, EBITDA grew 15%, EBIT grew by 19%, and adjusted profit expanded by 22%. Financial performance over the first half supported robust free cash flow generation of $530 million, resulting in net financial debt of $2.6 billion at June 13, 2024, representing one 15 times last 12-month VDA. This strong evolution in the first half of the year is in line with our expectations, and we confirm our outlook for 2024. Our results have been supported by positive development at air distribution, RIT solutions, and hospitality and other solutions, which we will review shortly. We continue to advance well on our strategies across Amadeus as we build for the future. At RNIT, we are leading the way for the airline retailing transformation with our next-generation RNIT product suite, Nevio. Amadeus Nevio is a traveler-centric retailing platform offering next-generation retailing capabilities to the airlines, including offers and orders backed by fully flexible, future-proof cloud-native solutions and the latest advances in AI. It's 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 transitions. We have three contracted customers to date, Finnair, Saudia, and British Airways, and we expect to continue to expand this list. On the back of British Airways' Nebio announcements last quarter, we were pleased to announce this quarter that British Airways will, in addition, implement Amadeus Network Revenue Management. The airline retailing transformation will further drive NDC penetration. We believe we have the most advanced NDC technology in the industry and that we will play a key role in scaling NDC adoption. We are advancing to make NDC possible at scale through the GDS. We have 60 NDC airline agreements signed. We represent half of the bookable inventory in our system and 27 implemented to date. As NDC content made available through our platform increases, We believe we will be capturing more and more NDC bookings in the future. Our goal is to become the undisputed NDC aggregator for airlines and travel agencies. In hospitality, we were very pleased to announce that ACOR, our leading hospitality group, will implement Amadeus Market's leading cloud-based central reservation system for its extensive portfolio of properties globally. Desius Zampacco will now run us through the key developments at each of our reported segments.

Hello, everyone. This is Desius. We now turn to slide five. Happy to be speaking to you again. And we start with the air distribution commercial highlights. During the first half of 24, we signed 32 contracts, both new contracts and renewal agreements. further strengthening our content offering to travel sellers. As Louise was saying, we're advancing well on our NDC strategy. We see the adoption of NDC in our distribution business gain traction gradually, and by doing so, we believe that Amadeus will continue to strengthen its position as the leading enabler of indirect airline distribution. Canadian WestJet has been the latest airline to sign an NDC agreement with Amadeus, and also in the second quarter, We had Tunisia Air, Iva Air, and Wellings NDC content that have been made available on the Amadeus travel platform. On the travel agency side, the eTravel Eye Group, a leading global technology provider for flights, they are powering Booking.com and have brands such as MyTrip, GoToGate, and Flight Network. They have chosen Amadeus as its primary NDC content provider. In addition, a selection of eTravelize group content, including its virtual interline content through its subsidiary TripStack, will be made available on Amadeo's travel platform. Moving to the corporate side, we have now Amadeo's NDC offering will now be available to concourse travel online booking tool. And finally, we continue to increase the number of corporations signing with Citrix Solutions. International Hotel Group Hotels and Resorts will be a customer of Citric Travel, and we have also signed an expansion of our partnership with FCM Travel, adding Citric Easy to its portfolio of solutions. Now, moving to the volume evolution. In the first half of 24, Amadeus bookings grew by 2.9% versus the first half of 2023, supporting the revenue growth of 10.7%. In 2024, as expected, we have seen a normalization in our booking growth evolution compared to the evolution in 2023, which benefited from air traffic recovery. In North America, our bookings continue to be impacted by volumes channeled through direct connections between one very large online travel agency and a few large carriers in North America, impacting our local bookings in the region, although having a marginal revenue growth impact as it relates to low-fee local bookings. Our bookings were also impacted by the bankruptcy in the second quarter of a large European tour operator, FTI Group. So excluding the FTI Group tour operator bankruptcy, the holiday effects, and the no-run local booking effect, we estimate our booking growth in the second quarter at 7.4%, and 7.8% in the first half versus prior year. Over the six-month period, Western Europe and North America were our largest regions, and Asia Pacific was our best-performing region, expanding 25.1%. For our expected Q3 and Q4 volume evolution, we saw some comparison versus 2023, we expect the volume growth in Q3 2024 to be softer than Q2 2024. The volume growth in Q4 2024 will be stronger than in Q2 2024. So the reason for that is that in Q3 last year, we have had a very strong recovery in August. And then in Q4, we had a concentration of effects that one will lap, which is the NORAM local booking effect, and a one-off effect, which was the crisis in the Middle East where we had a spike in cancellations. With that, let's move to slide six for airline IT solutions. I'll start again with the commercial highlights, which is during the second quarter, several of our customers have decided to expand their airline IT solutions relationship with us. We're very pleased to announce that British Airways, a recent Navio customer, signed for Armadillo's network revenue management module. In a joint solution center, our teams will collaboratively evolve network revenue management features and co-design new revenue management capabilities to optimize commercial decision-making. We had several other upsells in airline IT with customers such as Tai Airways, Jeju Air, Air Austro, Air Cairo, and EVA Air acquiring and expanding modules with us. Regarding airport IT, during the second quarter, we continued to expand our customer base, and we had several upsells from our airport IT offering. We signed with Malaysia Airports to deliver our airport passenger processing solutions to six airports in Malaysia, and we had other signatures in the quarter, including Brisbane Airport, Avinor, which operates Norway's 44 state-owned airports, Menzies Aviation, Sunpeat Clearwater International Airport, and Pittsburgh International Airport. So now we move to passenger boarded volumes. So in the consolidated first half of 2024, Amadeus passengers boarded increased by 14% relative to the first half of 2023. driven by an organic PV growth of 12% on the back of global air traffic growth in the period. Added to, I'm sorry, I lost my thought over here, driven by the organic growth of 12% on the back of global air traffic growth in the period. Organic growth was complemented by a net positive effect resulting from customer implementations. primarily Etihad Airways, ITA Airways, Hawaiian Airways, Bamboo Airways, and Elysian Air, all of them implemented in 2023, and Vietnam Airlines in the second quarter of 2024. In the second quarter of 2024, passengers boarded expanded by 12%, driven by an organic growth of 10%, and the net positive non-organic effects from customer implementations. Amadeus PB organic growth softened in the second quarter, relative to the first quarter, as air traffic growth advances through the recovery curve and trends towards normalization. And with that, I now pass to Paco for the hospitality segment dates.