Amadeus It Group Sa Ord

Hello everyone, we're delighted to be here. Thank you for coming. Welcome to our 2025 results presentation. Our CEO, Luis Maroto, and our CFO, Carol Borch, are going to be presenting on our performance, our key developments, our outlook. And we will follow this with a Q&A session. We have invited Dacios Valmorbida, President of Travel Unit, and Rico Sandberger, Senior VP in Technology and Engineering, to join us for the Q&A session. For those of you joining online, please make use of the Q&A functionality on the platform to submit your questions. And finally, today we're going to be making forward-looking statements that may differ materially from actual results, so we ask that you please review the legal disclaimer that we have inserted in our presentation. The presentation has been uploaded to our corporate website. On this note, I'd like to ask Mr. Luis Maroto to please join us.

So, good afternoon. Thank you very much for joining us in person and here at the London Stock Exchange and for those of you online. A pleasure to see your interest in Amadeus and for us to present the progress we are making on our strategy, our solid 25 results and our mid-term outlook. I would like to start with a few key takeaways. For quarter, we revenue expanded 10%, adjusted EBIT 15% at constant currency, This result was largely due to acceleration in both our RIT and hospitality and other solution segments. Full year 25, group revenue on adjusted debit grew 9% and 10%, respectively, at constant currency. Our free cash flow generation in 25 amounted to $1.3 billion. 7% above 24, excluding positive non-recurring impacts. And we completed the 1.3 billion share by bar program in quarter 4-25. So despite that challenging and evolving macro and geopolitical environment, we ended 25 strongly with revenue growth and profitability accelerating and successfully delivered on our 25 outlook. In terms of commercial activities, we continue to see a strong momentum in the fourth quarter. I will go into details a little later, but we are proud that Lufthansa Group plans to adopt Amadeus Nevio. Two airlines and Volotea have selected Naviter Stratos. We deliver strong volume growth supported by market share gains and new customer implementations across our businesses. Progress continued in our industry transforming hotel IT ACRS implementations and we signed a strategic agreement with Direct Travel, one of the top 10 travel management companies globally. And finally, we continue to see good growth in our professional services, airport IT, and payment businesses. We continue to invest with conviction for the long-term future. We deployed over $1.4 billion in R&D investment across our businesses and technology in 2025 and expect to continue this level of investment to underpin long-term growth. As a leader in the travel and technology space, our objective is to be the orchestrator in an AI-enabled travel ecosystem, connecting suppliers, sellers and AI assistants to trusted, dynamic travel data at scale in a neutral, secure and responsible way. Our decades of expertise in travel technology, deep integration within the travel ecosystem and unique competitive advantages give us a continued right to win. As AI assistance may gain space within the primary interface in travel, we believe Amadeus will capture value as the essential infrastructure powering them, expanding our role and gaining further relevance. We remain committed to deliver against our strategy, continuing to build on our proven track record. We have confidence in our solid growth prospects for the coming years and today we are also announcing our mid-term outlook. We are focused on driving value creation for our customers, employees, and shareholders, delivering strong operating and financial performance into the mid-term. We are targeting high single-digit group revenue growth, low double-digit adjusted diluted EPS growth, and high single-digit free cash flow generation growth. Now let's turn to our Quarter 4 highlights demonstrating how this fits into our overall strategic position. Amadeus is leading the airline industry's retailing transformation with Nevio, our AI native next-generation airline IT platform. As I mentioned earlier, we are pleased to announce that nine airlines within the Lufthansa Group plan to adopt Amadeus Nevio. With this, British Airways, Air France KLM and Lufthansa Group are all engaging with Nevio to advance modern retailing. We have reached a tipping point. Today, 25% of Altea PVs are engaged in a Nevio program. And looking forward, we continue to see a strong engagement across all regions and expect momentum to build beyond Europe. Our Navio implementations continue to progress, and I am pleased to say that Finnair, an early Navio customer, following its implementation of Amadeus' product catalogue and dynamic pricing, reported new benefits, including increased ancillary revenues and optimized ticket pricing. Additionally to airlines and Volotea, in Europe have selected Naviter Stratos, our next generation retailing portfolio for low-cost and hybrid airlines. Naviter Stratos is aligned with IATA offer and order standards and is being developed on an AI-powered, flexible and cloud-native technology stack. In the airport space, Melbourne Airport will become the first airport to deploy new Amadeus Indus backdrop solutions. This incorporates the latest advances in self-service, making it easier to load bags and maneuver large items, thus reducing manual intervention and improving the passenger experience. In hospitality and other solutions, revenue growth continued to accelerate, as we anticipated, through the fourth quarter, largely due to customer implementations and continued commercial momentum. The Amadeus Hospitality Platform offers the most comprehensive AI-powered portfolio of core capabilities to the hotel industry and is the most broadly connected ecosystem of partners. We are creating a global community platform of world-leading hotels on a mission to transform relationships with guests. We are advancing with Marriott International, Accor and Ascot Limited to join Amadeus Hospitality Platform. We are pleased to say that the first Marriott international properties are now live on ACRS, with the implementation plan going as expected and a meaningful number of Marriott properties scheduled to migrate gradually throughout 26. Also leveraging our e-money license, we have renewed and expanded our partnership with MasterCard, allowing Amadeus to operate as a full-scheme member with self-issuing capabilities. As for the Amadeus Travel Platform, which enables travel providers to retail through third parties worldwide, we continue to see steady volume growth and strong revenue per booking growth through the platform in Q4. We enrich our low-cost carrier content with the addition of West China and with the expansion of Transavia content, the low-cost airline of the Air France KLM Group. At the end, Amadeus had over 75 signed NDC airline distribution agreements. We also signed a strategic multi-year agreement with Direct Travel, one of the top 10 travel management companies globally, under which Amadeus will provide direct travel with seamless access to the most comprehensive air hotel and ground transportation content through the Amadeus Travel Platform. I would also like to point out that we have deployed advanced airline profile on Amadeus Travel Platform iSMART machine learning power solution to manage search traffic at scale. This solution significantly reduces unproductive traffic and makes airlines and travel agents see a significantly lower look-to-book ratio in their systems, as well as reduce infrastructure strain. Air France KLM has reported major gains by implementing our solution, as well as Lastminute.com, who now has a significantly improved pull-to-book ratio and optimized search performance. And finally, regarding our technological capabilities, including AI, we have completed our cloud migration and continue to advance our partnerships with Google and Microsoft. Partnering with leading companies to transport travel, leveraging AI, gives us confidence that the biggest and most advanced technology companies have chosen Amadeus as one of their strategic partners for travel. We all know there is a lot of sentiment in the market around AI. Agentic AI promises to transform travel in very positive ways, bringing increased personalization to travelers as well as productivity and efficiency gains across the value chain. Amadeus is uniquely placed to deliver agentic AI functionality into products and solutions, supporting our customers on their own journey and to be the orchestrator in an AI-enabled travel ecosystem. I will elaborate more on this later. With this, I will now pass on to Carol to review our financial performance.

Thank you, Luis. Let me just drop this a bit. I'm a bit shorter than Luis. We all good? Okay, great. Great to see so many of you in the room today. So thank you, and I'm delighted to communicate that we've delivered a strong Q4 to achieve a solid financial performance in 2025. We delivered high single-digit revenue growth and double-digit adjusted EBIT growth at constant currency, coupled with good free cash flow generation, achieving our 2025 guidance across all metrics. We display our performance of revenue and adjusted EBIT versus previous year, also at constant currency, to facilitate your understanding of Amadeus' underlying financial performance. More details on our foreign currency exposure and on our constant currency calculations as well as the complete information on our IFRS figures and their evolution are available in the appendix of this presentation and also in the Amadeus 2025 Management Review. So in 2025, we successfully delivered our 2025 constant currency outlook, reporting strong growth across our key financial metrics. Revenue of $6,517 million, 9% growth at constant currency, 6% reported growth. Adjusted EBIT of $1,894 million, a 10% growth at constant currency, or 9% reported growth. Profit of 1,336 million, 7% growth. Adjusted diluted EPS, growth of 9% at constant currency. Free cash flow of 1,302 million, which is 7% growth, excluding non-recurring flows in 2024. R&D investment of 1,434 million, representing 22% of revenue. pre-tax operating cash flow conversion of 94%, leverage at 0.9 times net debt to the last 12 months EBITDA at the end of the year, and our $2 billion that was returned to shareholders in the year through both dividends and share repurchase programs. So in 2025, our group revenue grew by 8.5% at constant currency. Group revenue growth resulted from high single-digit revenue expansion across each of our segments, supported by volume expansion and customer implementations across our segments. Air IT solutions revenue grew by 8.7%, the hospitality and other solutions segment revenue delivered 9.6% growth, and air distribution revenue expanded by 8%. Group revenue accelerated to 10% in Q4 at constant currency, supported by double digit revenue growth in both air IT solutions and hospitality and other solutions, and high single digit revenue growth in air distribution. At constant currency, our adjusted EBIT grew 10.2%, resulting from the 8.5% revenue evolution discussed on the previous slide. and also was contributed by cost of revenue growth of 3.2%, fundamentally driven by an increase in transactions, such as in air distribution and hotel distribution bookings, and in payments due to the B2B wallet expansion. Reported fixed cost growth of 6.5% mostly resulted from an increase in resources, particularly in our R&D activity, coupled with a higher unitary cost, Higher cloud costs due to a combination of our own volume growth and also to our progressive migration of the solutions to the public cloud. And finally, to the vision box consolidation impact in Q1. Ordinary DNA expense increased by 4.4% as a result of higher amortization of internally developed software, partly offset by lower depreciation expense at our data center, given the migration of our systems to the public cloud. At constant currency, adjusted EBIT margin was 28.8%, a 0.5 percentage point expansion versus the previous year. and adjusted EBIT growth accelerated in Q4 to 15.4% at constant currency, supported by faster group revenue growth and softer fixed cost evolution. So now let's review the performance of our operating segments, starting with our Air IT Solutions business. Air IT Solutions revenue increased strongly in the year by 8.7% at constant currency. Full-year revenue growth was driven by Amadeus PBs increasing by 3.8% and a 4.7% higher revenue per PB, which fundamentally resulted from positive pricing dynamics, including upselling to our new Nevio customers, as well as from strong performance of our airline professional services and our airport IT businesses. Amadeus's PB growth in the year was driven by global air traffic evolution and the PB contribution from Vietnam Airlines, which migrated to Altea in April 2024. Revenue growth expanded by 10.9% in Q4 at constant currency. This revenue growth is due to stronger PB volumes due to improved global air traffic evolution and an expansion of revenue per PB of 6.6%, an acceleration relative to Q3 mainly due to improving price effects and stronger performance of airline professional services. In Q4, our leadership in air IT solutions continued. In addition to the Lufthansa Group planning to adopt Amadeus Nevio, as well as Volotea and TUI Airlines selecting Navitar Stratos, as Luis just mentioned, we continue to grow our customer base with Pan American World Airways choosing our technology as the backbone for its core passenger and operational capabilities. We also broadened the scope of solutions adopted by our customers, such as Thai Airways that selected our AI-powered air dynamic pricing amongst other solutions, and Juju Air that selected Navitair Edge shopping service, an innovative solution designed to give airlines greater control over look-to-book ratios and improve response times. In airport IT, several airports at Indonesia and the Philippines will adopt our AI-enabled biometric technologies. And airports across Australia and Japan will adopt our self-service bag drop solutions. Air IT solutions contribution increased by 8.4% at constant currency, resulting from the revenue evolution that I've just described, offset by cost growth of 9.4%, which was fundamentally driven by an increased R&D investment, variable cost growth driven by the airport IT's business expansion and the consolidation of VisionBox. Contribution margin was 70.7%, 0.2 percentage points below the previous year due to the vision box consolidation impact, excluding which margin would have expanded year on year. Hospitality and other solutions revenue grew by 9.6% at constant currency in 2025. Revenue growth was driven across both hospitality and payments due to customer implementations and increased transaction volumes. Within hospitality, the main revenue contributors were Amadeus Central Reservation System, sales and event management, hotel distribution and business intelligence. In payments, both our merchant services and our payout services reported strong growth. Hospitality and other solutions revenue growth in Q4 improved to 13.9% at constant currency, driven by stronger performances of both hospitality and payments supported by new customer implementations and higher transactions. In Q4, our growing relevance in hospitality continued to expand across our extensive portfolio, the most comprehensive in the industry. Amongst others, with... Sorry, beg your pardon, I missed something. We signed new customer agreements spanning across multiple verticals, including, amongst others, with Radisson Hotel Group and travel seller Alib Trip in hotel distribution and Mass Nutton Resort in hotel IT. In payments, travel sellers such as Fairportal selected our Outpace B2B wallet. We also partnered with UnionPay to enable the acceptance of its cards and expanded our agreement with MasterCard to become a full MasterCard scheme member with self-issuing capabilities. Hospitality and other solutions contribution was 13.8% above the previous year as a result of the revenue growth I've just previously described offset by cost growth of 7.4%, which resulted from higher variable costs driven by the volume expansion in both hospitality and payments and increased R&D investment. Contribution margin was 35.8%, 1.3 percentage points above the previous year. Air distribution revenue increased by 8% in 2025 at constant currency, driven by 2.8% increased booking volumes and a revenue per booking growth of 5%, primarily resulting from positive pricing effects. Amadeus' booking growth in the year was supported by continued commercial gains across the regions. Air distribution revenue in Q4 softened slightly relative to Q3, largely due to booking evolution, which was negatively impacted by an increase in flight cancellations in the US. Beyond introducing advanced airline profile, addressing one of the biggest hurdles in NDC adoption by enabling search traffic management at scale and enriching our low-cost carrier content offering, we secured new travel seller customer wins, including Laiancha Travel Network in the Americas and Direct Travel, one of the top 10 TMCs globally. We also successfully delivered professional services to BCD, one of the world's leading corporate travel management companies. Air Distribution's contribution grew by 13.3% at constant currency as a result of the revenue growth I've just described, offset by a 3.2% cost increase, which mainly resulted from the bookings evolution. The contribution margin of the segment expanded by 2.3 percentage points to 49.6%. So now let's move on to review our R&D investment and capital expenditure. We continue to prioritise investment in R&D to deliver our organic growth, maintaining our leadership position. As Louise mentioned previously, we are proud of the commitment that we've made to make remaining relevant for our customers, ensuring that emerging technologies such as AI continue to be embedded across our entire portfolio. In 2025, R&D investment amounted to $1.4 billion, growing by 7.6% versus the previous year. Half of that investment was dedicated to the expansion of our portfolio and the evolution of our solutions and AI capabilities, including Amadeus Nevio, Navates Stratos for airlines, our hospitality platform, NDC Technology for airlines, travel sellers and corporations, and solutions for airports and payment services. A quarter to a third was dedicated to our customer implementations across the business such as Marriott International and Accor for ACRS, new Nevio customers and airline portfolio upselling and customers implementing NDC technology as well as efforts related to bespoke professional services provided to our customers. and the remainder was dedicated to our migration to the cloud and our partnerships with Microsoft and Google, as well as the development of our internal technology systems. In the year, our capital expenditure increased by 5.6%, mainly driven by our continued investment in software development to maintain our leadership position. Capital expenditure represented 12.5% of revenue, consistent with the previous year. In 2025, we generated $1,302 million of free cash flow. Free cash flow was slightly below previous year by 2.4% due to non-recurring tax-related inflows in 2024. Excluding these non-recurring effects, free cash flow in 2025 was 6.9% higher than the previous year. as a result of our EBITDA expansion, a higher change in working capital inflow and a reduction in interest payments, partially offset by an increase in our capital expenditure deployed to strengthen our value proposition as well as higher taxes paid. We had a pre-tax operating free cash flow conversion of 94% in the year. Net debt amounted to $2,141 million at the end of December 2025, $30 million higher than at the same time last year, largely due to the acquisition of Treasury shares under the share repurchase programs, as well as the dividend payment, which was partially offset by our free cash flow generation and the conversion of bonds into shares. And finally, our leverage is at 0.9 times net debt to EBITDA as at the end of December. So now on to our short-term organic outlook, our expectations for 2026. IATA forecasts global air traffic growth of between 4% and 5% in 2026. Based on this assumption, we expect our group revenue to grow at constant currency, at high single digit, supported by strong evolutions across all of our segments. We expect a stable adjusted EBIT margin performance in 2026 at constant currency impacted by our cloud migration ramp up during 2025, one of our key strategic investments over the past few years. Excluding this effect, adjusted EBIT margin in 2026 would expand. Please note that this timing effect impacts 2026 only and therefore we expect adjusted EBIT margin expansion in the mid-term. More on that from Louise later. With respects to free cash flow, we expect to generate between $1.35 and $1.45 billion in 2026 with capital expenditure as a percentage of revenue in the range between 10% and 12% of group revenue. Again, please note that we expect to see some short-term seasonality with negative free cash flow growth in Q1 due to the timing of payments. Finally, our shareholder remuneration expectation. Ultimately, we seek to create sustainable value for our shareholders. Over the last 12 months, we grew earnings per share by 8.6% at constant currency. In addition, we returned $2 billion of capital to shareholders through the ordinary dividend and the share repurchase program. The size of the buyback and the dividend both reflected our strong free cash flow generation, confidence that we have in our future, and a desire to offset the dilution from the very important capital increase we made in 2020. As I've previously mentioned, we aim to create value through strong and sustainable earnings growth, compounding that growth through disciplined allocation of our capital on both inorganic opportunities and increased shareholder returns. Our confidence in continuing to create sustainable value for our shareholders going forward remains strong, as evidenced by the fact for the first time we have included an EPS growth target in the near and medium-term outlook. We have a track record in delivering growth through evolution in technology, and we have the critical assets to lead in energetic AI and power the future of travel tech with AI-enabled innovation. We will continue to generate cash and expand margins, all whilst maintaining a strong balance sheet to provide us with the optionality and flexibility to continue to deliver for our customers, employees and ultimately for our shareholders. Today, we are committing to low double digit adjusted diluted EPS growth for 2026. Given our confidence in the future, coupled with our strong 2025 performance, in 2026 we will distribute to our shareholders a dividend at the top end of our dividend policy range, which will amount to almost $700 million, and we will launch a new additional share repurchase program of $500 million to be executed within six months. Additional specification on the expected dynamics by segment at constant currency is as follows. So air IT solutions, we expect to see high single-digit revenue growth supported by PB growing in line with global air traffic growth, coupled with a positive revenue per PB growth, enhanced by continued upselling, new Nevio revenues, as well as higher airline professional services and airport IT revenues. In terms of contribution, we expect the margin to be dilutive versus previous year, driven by high growth in our airline professional services and airport IT mix. Hospitality and other solutions. We are expecting double digit revenue growth in 2026, accelerating from 2025. This volume growth will be supported by volume expansion and new customer acquisitions across our hospitality and payments portfolios. We expect contribution margin in this segment to continue expanding as we continue to gain operating leverage. And finally, air distribution. We expect our bookings to continue to grow steadily, potentially faster than last year, supported by customer success and market share gains. We continue to expect an expanding unitary revenue per booking evolution, although it's likely to be a little slower than last year due to the expected timing of commercial negotiations. In terms of contribution margin in this segment, we expect stable margins in 2026. So I'll now hand back to Louise, who will close with our AI positioning, mid-term outlook and final remarks.