Amadeus It Group Sa Ord

Good morning, ladies and gentlemen, and welcome to the Amadeus Q3 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 star zero for the operator. I would now like to turn the conference over to Luis Moroto, President and CEO. Please go ahead.

Good afternoon and welcome to our 24 nine-month results presentation. Thank you very much for joining us today. I'm joined by our business heads, Desius Valmorbida and Paco Perelozawa. I will start today's presentation with a general overview of our results and the most important recent developments at Amadeus. Desius and Paco will then cover our segment, Business Reviews, and I will end the presentation by reviewing the key aspects of our financial performance. Before we get started, I wanted to update you on our CFO executive search process. This process is well underway and receiving all the attention and resources it merits. At Amadeus, we are fully committed to attracting the best talent. However, we have nothing more concrete to share with you at this point. We turn to slide four. In the first nine months, Of the year, Amadeus continued delivering a double-digit growth evolution with enhanced profitability, delivering EBITDA and EBIT margin expansions. Group revenue increased by 13%. EBITDA grew 13%. Operating income increased by 17%. And adjusted profit grew by 17%. Our free cash flow generation in the nine months period came close to $1 billion, and leverage at the end of the period stood near one times in the debt to the last 12 months EBITDA. Given our solid financial performance of the first nine months of the year and our continued confidence into the fourth quarter, we confirm our 24 outlook. As we'll discuss shortly, we have had double-digit growth evolutions across our segments. air distribution, RIT solutions, and hospitality and other solutions. I'm particularly pleased to highlight that in air distribution, revenue has increased by 10% year-to-date over prior year, supported by steady booking growth and unitary booking revenue expansion. Amadeo's bookings in the third quarter grew by 4.4%, accelerating over the second quarter, driven by stronger demand and our growth in NDC bookings. We aim to become the undisputed aggregator in NDC bookings for airlines and travel agencies. We are progressing well on our NDC strategy. Airlines are signing NDC agreements with Amadeus at a good pace, demonstrating airlines want to distribute their NDC content through and to be present in the Amadeus travel platform. As Amadeus expands its NDC content offering, we'll be capturing more and more NDC bookings in the future. We are working to make NDC possible at scale through our GDS. I believe we have the most advanced and comprehensive NDC technology in the industry, and we will play a key role in scaling NDC adoption. MADU is also leading the airline industry's retailing transformation. We are pleased to officially introduce Naviter Stratos to the airline market. Naviter Stratos is our new generation retailing portfolio for low-cost and hybrid carriers. It delivers dynamic end-to-end traveler-centric retailing capabilities, as well as cost efficiencies and enables flexible and seamless partner integrations. We are investing into becoming the IT provider of reference to the hospitality industry. Implementations of Marriott and Accor to join ISG on our hospitality platform are advancing well. We are creating a global community of world leading hotels on a mission to transform relationships with guests. Finally, we continue to see a wealth of opportunities to create value for our customers. Amadeus is focused on the future and committed to innovation. Through the period, we have continued to invest decisively in our technology and across our strategic initiatives, leveraging our cloud-native architecture, AI, data-centricity, openness, and self-service capabilities. Our ability to invest while maintaining our strong financial structure is a competitive advantage that allows us to lead in our markets and to anticipate and serve customer needs effectively. Desius Zampacco will now run us through the key developments at each of our reported segments.

Thanks, Luis. Hello, everyone. This is Desius. We're now on slide five, where we start with air distribution. So as Luis was saying, we continue to advance on our NDC strategy. Delta, Virgin, Australia, and Indigo have recently signed NDC distribution agreements with Amadeus. to have their content present on the Amadeus travel platform. We are particularly pleased to announce the NDC agreement to distribute Indigo's NDC content, as we're going to have their content available to travel sellers in India, as well as around the world. This represents a very important milestone for Amadeus, as it reflects our potential growth opportunity to distribute low-cost carrier through our GDS. We believe that low-cost carrier market adoption of the NDC standard will support LCC distribution through the Amadeus travel platform. Additionally, India is a very large, high-growth, strategic market for Amadeus and Indigo, a fast-growing, innovative, low-cost carrier that happens to be the leading Indian airline. We currently have over 60 NDC agreements signed with airlines, of which 29 have been implemented in our travel platform. Also, the vast majority of our travel agency bays now has access to and can service NDC content through the Amadeus travel platform. So we expect to see overall adoption of NDC in our GDS channel to gain traction gradually. The average weight of NDC bookings over the total bookings of these 29 airlines producing NDC bookings on the Amadeus Travel Platform is in the teens. We have examples of specific large airline customers who, leveraging the synergies between our Altea NDC and our Amadeus Travel Platform, are achieving much higher NDC penetration rates. We are talking about close to half of their bookings being processed through NDC connections on our travel platform. Now, in regards to our volume evolution, in the third quarter, our bookings grew at an accelerated, sorry, our bookings growth accelerated over our growth in the second quarter to 4.4%, supported by a stronger booking demand and continued high NDC booking growth. At September year-to-date, Amadeus bookings grew by 3.4%, 4% over prior year, and air distribution revenue increased by 10%. Amadeus NORAM bookings continue to be impacted by direct connections between one very large OTA and a few large carriers in NORAM, impacting our NORAM local bookings. That has had marginal impact on revenue growth as it affects low fee volumes. But excluding the workday effects, the NORAM local bookings impact, Amadeus bookings grew 7.9% in Q3, and 7.8% at September year-to-date versus prior year. APAC was our fastest-growing region, while Western Europe and NORAM are our largest regions. For Q4 2024, we expect volume evolution to be stronger in Q3, as in Q4 last year, we had the breakout of the crisis in the Middle East with cancellations and spiking, And we had the NORAM local booking effect starting, which now will start to lap as of Q4. So let's turn to slide six for a review of airline IT solutions. Again, as Luis mentioned, we are pleased to introduce Navitair Stratos to the airline market. Previously referred to as VNEX, Navitair Stratos is our next generation retailing portfolio for the low-cost and hybrid carrier market, offering dynamic, end-to-end, traveler-centric retailing capabilities, enabling flexible and seamless partner integrations under offer and order standards. Regarding our airline IT business developments, over the third quarter, we upsold airline IT solutions to customers such as Qatar Airways, Eurowings, Philippine Airlines, and Royal Air Maroc. In airport IT, we have new signatures and implementations with several airports, including group ADP. In relation to our passengers' boarded volumes, in the third quarter of 2024, Amadeus passengers' boarder grew 8.8% over prior year, resulting in a September year-to-date PP evolution of 12%. This evolution was driven by organic PP growth and positive non-organic effects from the implementation of Etihad Airways, IT Air Airways, Hawaiian Airlines, Bamboo Airlines, and Allegiant Air in 2023, and Vietnam Airlines in Q2 2024. APEC was our fastest growing region, while APEC and Western Europe remain our largest regions. And with that, I now pass on to Paco.