Amadeus publishes 2012 first quarter results
Amadeus IT Holding has announced year-on-year financial and operating results for the first quarter of 2012. Adjusted profit increased 22.1% to €167.9 million. Revenue grew 8.5% to €764.1 million.
Madrid, Spain, May 9, 2012 - Amadeus IT Holding, S.A. (Amadeus: “AMS.MC”), parent company of the Amadeus Group, a leading transaction processor and provider of advanced technology solutions for the global travel and tourism industry, has announced year-on-year financial and operating results for the first quarter of 2012 (three months ended March 31, 2012).
Adjusted profit for the quarter increased 22.1% to reach €167.9 million. This was backed by growth in revenue of 8.5% to €764.1 million and a 5.4% rise in EBITDA to €307.2 million.
The Distribution and IT Solutions businesses both played equally important roles in the growth of the company during the quarter by delivering improved performances. Revenue in the Distribution business increased by 8.0%, rising to €597.6 million. Total bookings, including both air travel agency and non air bookings, increased by 6.1%, up from 124.7 million to 132.3 million. Amadeus also expanded its global market share of travel agency air bookings by 0.9 of a percentage point, maintaining its leadership position with 38.2%. Whilst in the IT Solutions business revenue increased by 10.4%, rising to €166.6 million, and the Passengers Boarded (PB) figure was lifted by 23.3%, rising from 94.0 million PB to 115.9 million PB. Currently we calculate over 750 million PB for 2014, based on existing contracts.
Luis Maroto, President & CEO of Amadeus, commented:
“Following on from our strong outcome in 2012, the results from the first quarter of this year continue to be very encouraging. Year-on-year we have grown revenues by 8.5% and adjusted profit by 22.1% to €167.9 million in the quarter. We have also further reduced our consolidated net debt by €91.7 million to reach 1.65x last twelve month’s EBITDA.
“Once again this pleasing performance was underpinned by growth across both our businesses. Distribution’s revenue increased 8.0%, backed by 0.9 p.p. expansion of global market share; whilst IT Solutions’ revenue increased 10.4%, driven by successful migrations to our platform and the strong performance of our different solutions.
“Such consistent growth in revenues as well as new clients is a direct result of our long-term commitment to developing innovative customer-focused solutions and consolidating our global presence. This strategy was again proven successful by two milestone contracts recently signed, the Altéa contract with Southwest Airlines and the Expedia contract for content and technology in North America. Although both deals were announced during the second quarter, they deserve special mention for their great significance in such a key market – and their long-term potential fills us with great enthusiasm.
“Despite the uncertain economic environment, we look forward to the remainder of the year with confidence.”
Business Highlights Q1, 2012
Airline Distribution continued its growth by signing content agreements with four new airlines, including with the Russian carrier Transaero. These agreements guaranteed access to a comprehensive range of fares, schedules and availability for Amadeus travel agents.
Maintaining our position as a leader in the growth area of ancillary services, in January the flagship carrier Finnair implemented the Amadeus Ancillary Services solution and now travel agencies can process preferred seats in Finland, Scandinavia and Benelux, as well as excess baggage in Finland. Finnair uses the Electronic Miscellaneous Document (EMD) as the fulfilment solution to sell excess baggage and seats in Finland. EMD enhances ticket services and enables airlines to distribute a wide range of products that help customise their journeys. Amadeus Ancillary Services is an end-to-end solution which enables airlines to sell additional services in full compliance with industry standards, using both travel agencies and either the airline’s own call centre or website. At the close of the quarter, a total of 43 airlines had contracts for the solution, 18 of which had opted to implement the service into the Amadeus GDS; of those 18 airlines, 6 were already selling ancillary services using Amadeus technology.
In order to drive our response to growing prospects for travel market intelligence, in February Amadeus acquired the Frankfurt-based company airconomy ,a small international strategy consultancy supplying precise and comprehensive data on passenger demand. airconomy will be run as a separate business incubator to develop ideas for new market intelligence products, with Amadeus commercialising the new products and handling on-going product management. This move follows Amadeus partnering in 2010 with airconomy to launch Total Demand, a business intelligence tool providing the most precise demand data from any pair of cities in the world, including pairs dominated by low-cost carriers and direct network airline sales.
Bookings from low-cost carriers remained a steady source of significant growth. Total travel agency bookings from low-cost carrier flights via the Amadeus system increased year-on-year by 18% in the first quarter of 2012.
Although announced within the second quarter, it is worth highlighting the significant agreement to supply content and technology in the North American market to Expedia, Inc., the largest travel enterprise in the world in terms of air volumes. This provides Expedia with Amadeus’ fare search technologies for air travel amongst other products, as well as access to global travel supplier content through the Amadeus system. Since 2005, when its initial long-term global agreement with Expedia was established, Amadeus has been providing services to Expedia in over 15 countries.
Elsewhere in the North American market two significant agreements were reached. Firstly, a five-year agreement to provide content distribution services and IT solutions worldwide with UNIGLOBE Travel, which is headquartered in Vancouver, Canada and is the world’s largest single-brand travel franchise. The agreement covered 12 countries, including important markets such as the United Kingdom, Netherlands, Germany, Italy, India, and South Africa; it also
extended UNIGLOBE TMC’s access to the Amadeus inventory and aims to incentivise the growth of bookings within the UNIGLOBE network both organically and internationally. Secondly TS24, an American-based premier provider of corporate travel management services, selected Amadeus One to further evolve its client-centric approach and align its commitment to the highest level of service and innovative technology. Amadeus One is the next-generation desktop solution designed specifically to help U.S. corporate travel management companies.
Further significant agreements and achievements took place within the Asia-Pacific region, which continues to be an important growth area for Amadeus. In Japan Amadeus partnered with Hertz to power the Expedia online car booking engine, a new online car booking engine designed for Expedia Japan which features promotional rates only available in the Japanese market as well as key local language functions. A long-term strategic and technology partnership was agreed with Travel Expert Business Services (TEBS), one of the fastest growing corporate travel agencies in Hong Kong. This will completely revolutionise its IT solutions to bring streamlined operations, expanded servicing channels and promising business opportunities for the agency and its affiliated companies. In Australia, the Lido Group, a leading independent accommodation and travel aggregator, signed an agreement that will see Lido’s Australian Accommodation Data Exchange (AADX) integrated into Amadeus Selling Platform, using the Smart Tab technology of Amadeus. Lastly, Amadeus Travel Office Manager (ATOM) solution, developed specifically to meet the unique requirements of Asia Pacific’s travel agencies, celebrated contracting its 250th customer within just 250 working days of its launch.
Steady expansion continued as three further carriers contracted to the full Amadeus Altéa Suite, which is the fully integrated customer management solution for airlines and includes Altéa Inventory, Altéa Reservation and Altéa Departure Control System (DCS). Included within these was Czech Airlines, which is the flagship airline carrier of the Czech Republic and provides connections to 104 destinations in 44 countries.
As of March 31, 2012 a total of 118 airlines had contracted for both Altéa Reservation and Altéa Inventory, of which 107 had implemented both solutions. The number of contracted airlines increases to 120 with the inclusion of Southwest Airlines and Garuda Indonesia, which were signed and announced in April. Southwest Airlines, the largest U.S. carrier in terms of domestic passengers boarded and consistently ranked number one in customer service by the Department of Transportation (US), entered into a contract for Amadeus’ Altéa reservations solution that will support the carrier’s international service. In turn, Garuda Indonesia, the national airline of Indonesia, announced that it will transform its passenger service processes with the introduction of the full Amadeus Altéa Suite to manage its domestic and international reservations, inventory and departure control processes. Based upon these signed Altéa contracts, Amadeus estimates that by 2014 the number of Passengers Boarded (PB) will be more than 750 million, which would represent an increase of almost 70% vs. the 439 million PB processed on the Altéa platform during 2012 – or a compounded annual growth rate (CAGR) of around 20%.
Further contracts were also signed for the Stand Alone IT Solutions portfolio. These contracts included the UK airline bmi and Iberia Express all signing up for Amadeus Ticket Changer (ATC), which simplifies the ticket re-issuing process by combining the state-of-the-art Amadeus Fares and Pricing engine with a powerful, multi-channel ticketing functionality. Qatar Airways also contracted for the Amadeus Affinity Shopper solution, which enables airlines to improve their share of the leisure travel market by increasing look-to-book ratios, boosting customer retention, and improving the online customer shopping experience.
During the quarter Amadeus created the world’s first interline Electronic Miscellaneous Document (EMD) link. This move enabled launch partner airlines Finnair and Star Alliance member Egypt Air to grow revenue by facilitating the interline sale of ancillary services. Interline EMD processing between Finnair and Egypt Air means their customers can now buy ancillary services across interline flights. Already 56 airlines have contracted Amadeus’ EMD Server to enable the provision of EMDs in order to facilitate the sale of ancillary services. Almost 20% of air bookings made through the Amadeus system are the result of interline partnerships, representing a huge opportunity for airlines to increase the sale of ancillary services via partner carriers.
Within the growth area of Airport IT, Amadeus now has agreements with 12 ground handlers for the deployment of the Amadeus Altéa Departure Control System for Ground Handlers. Most recently Groupe Europe Handling (Europe Handling and Sky Handling Partner) signed up and will use Amadeus Altéa DCS to cover Dublin, Shannon, London City, Paris Orly and Charles De Gaulle airports - together representing more than 10 million passengers for about 80 handled airlines. Altéa DCS for ground handlers allows all of the handler’s airline customers to benefit from the leading-edge technological capabilities of Altéa DCS’s Customer Management and Altéa DCS’s Flight Management services, regardless of whether or not the airline uses the Amadeus Altéa Suite.
Hotel IT continued its success with Accor, one of the world’s leading hotel operators and market leader in Europe, extending its ten-year collaboration with Amadeus. The new agreement will achieve a higher adoption rate of Amadeus Revenue Management, allowing Accor to make more informed decisions, optimise room capacity and drive revenue growth. Amadeus Revenue Management is a state-of-the-art, web-based solution that makes intelligent rate and inventory recommendations to maximise revenue contribution and increase profitability, using advanced forecasting models combined with detailed historical and future booking data.