Amadeus IT Holding, S.A., the parent company of Amadeus IT Group, S.A., a leading transaction processor and provider of advanced technology solutions for the global travel and tourism industry, today announced business results for the twelve months ending 31 December 2009.
Amadeus’ financial performance for 2009 remained strong. The company generated revenues of €2,461 million (2008: €2,505 million), EBITDA of €894 million (2008: €874 million) and pre-tax operating cash flow of €779 million (2008: €697 million). 93% of 2009 revenues are characterised as recurring, as these revenues were generated under long-term contracts with our clients and long-lasting relationships. Our EBITDA margin increased year-on-year to 36.3% (2008: 34.9%) as the company benefited from scale efficiencies resulting from its sustained investments in technology and systems. Following difficult trading conditions in the first and second quarters of 2009, revenues and EBITDA showed significant growth in subsequent quarters as air travel volumes recovered. Revenues and EBITDA grew, on a year-on-year basis, by 0.7% and 10.8%, respectively, in Q3 2009 and by 3.6% and 14.3%, respectively, in Q4 2009.
Performance in the first two months of 2010 has been strong, with sales growth rate further accelerating to double digit levels, reflecting strong results in both our Distribution and IT Solutions businesses and the continued recovery of air traffic and booking volumes. EBITDA growth was stronger than revenue growth, mainly due to the operating leverage of our business and to the increased weight of our IT Solutions business which benefits from high contribution margins. Travel agencies air bookings for our Distribution business increased by almost 9% year-on-year (when adjusted for working days difference) and Passengers Boarded (PBs) volumes for our IT Solutions business increased by approximately 42% year-on-year, driven primarily by the impact of migrations to our Altéa platform achieved in the last twelve months.
The company’s strong cash flow generation enabled us to continue to invest €257 million in R&D in 2009 (2008: €236 million) while reducing net debt to €3,288 million as of December 31, 2009 (as of December 31, 2008: €3,714 million) lowering the company’s net debt to EBITDA ratio3 to 3.6 as of December 31, 2009 (as of December 31, 2008: 4.2x.) The company has a history of continuous innovation and profitable growth driven by over €1 billion spent on R&D on both the travel Distribution and IT Solutions business areas since 2005.
Amadeus IT Holding, S.A. also announces today its intention to seek a listing on the Spanish Stock Exchanges during the first half of 2010, depending on market conditions. The listing is likely to comprise a primary offering of shares by Amadeus IT Holding, S.A. of approximately €910 million, which will be applied to reducing indebtedness, and a secondary offering by current shareholders amounting to a minimum number of shares that, together with the shares offered in the primary offering, represent at least 25% of the share capital of the company.
Amadeus has undergone a significant transformation since its subsidiary Amadeus IT Group S.A. was taken private in 2005. Amadeus’ traditional travel distribution platform now connects over 103,000 travel agency points of sale, over 720 airlines (of which over 460 are bookable), more than 85,000 hotels and many other travel providers. Since 2004, Amadeus has secured its #1 position in travel distribution and has been able to deliver strong organic growth in Western Europe and Central, Eastern and Southern Europe, as well as in faster growing emerging regions such as the Middle East and Africa, the Asia Pacific region and South and Central America. Amadeus estimates that it currently has a 37% global market share and the leading position in each of the regions in which it operates except North America, and customer retention rates of over 95% among travel agency and airline customers.
Amadeus’ innovative IT Solutions business, which was a relatively small contributor to group revenues at the time of the Amadeus IT Group, S.A. LBO in 2005, today offers travel providers (principally airlines) an extensive portfolio of technology solutions which automate mission-critical business processes, such as reservations, inventory management and departure control. Revenues from this business area have grown strongly at a CAGR of 9.6% since 2007 and amounted to €548 million in 2009 (2008: €500 million). In 2008, Amadeus was the market leader with 28% market share in terms of revenue in the Passenger Services Systems (PSS) segment which is characterised by long-term contractual relationships of between 10-15 years and stable pricing regimes.
The backbone of the global operations for Amadeus’ Distribution and IT Solutions business areas is centred around its advanced data processing facility in Erding, near Munich (Germany). In 2009, the Erding complex processed over 677 million key billed transactions and handled, on average, more than 9,000 user data queries per second, with an average system response time of less than 0.3 seconds and an average system uptime exceeding 99.99%.
David Jones, President and Chief Executive Officer, commented:
“Since 2005, we have invested more than €1bn in R&D to provide our clients with industry-leading distribution and technology solutions that help them sell, reduce costs and meet their business challenges. This investment has allowed us to take the leading position in our key markets and drive Amadeus’ resilient and consistent financial performance, demonstrated by our strong results in 2009, particularly in the latter half of the year as conditions in our markets stabilised.
Today, our Distribution business is benefiting from the unique network effects that our #1 global position provides. In the last years our IT Solutions business has grown rapidly providing reservation, inventory, departure control or e-commerce functionalities for over 160 airlines.
In 2009, our global data centre in Germany processed 413 million travel agency bookings and 238 million Passengers Boarded through our Altéa systems. Both elements of our business have good exposure to Europe and regions where travel volumes are expected to show higher future growth: Central and South America, Asia-Pacific and Middle East & Africa.
During this period, the company has invested and created value for both our customers and shareholders. Successful investments and organic growth are at the heart of Amadeus’ performance, providing strong cash flow generation that has also been applied to deleveraging the business in recent years resulting in net debt amounting to just 3.6 times EBITDA. The proceeds of any future IPO will enhance our ability to invest in the business and drive competitive advantage.
Amadeus is a diverse, robust and resilient travel transaction processing and IT business, and is the clear global leader in our marketplace. We have maintained profit growth in 2009 despite the most economically challenging conditions in recent memory, and are well positioned for future growth.”