Release Date: May 09, 2023
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Group revenue increased by 43% year-over-year, indicating strong financial performance.
- EBITDA grew by 72%, showcasing significant operational efficiency.
- Adjusted profit expanded by 188%, reflecting robust profitability.
- Free cash flow amounted to EUR 273 million, supporting a net financial debt of EUR 2 billion.
- Strong performance in Air Distribution with 20 new contracts or renewals signed in the first quarter.
Negative Points
- Booking growth rates are expected to slow down in the coming quarters due to the recovery experienced by the travel industry.
- Cost of revenue grew by 59.7% in the quarter, driven by volume expansion and other factors.
- P&L fixed costs increased by 14% compared to the same quarter last year, impacting overall expenses.
- Revenue per PB in Air IT Solutions decreased by 12.5%, driven by a proportion of Air IT revenues not linked to PBs.
- Corporate travel recovery is still behind leisure travel, impacting overall booking volumes.
Q & A Highlights
Q: How has your booking flow changed in North America after American Airlines moved content from EDIFACT? What are you hearing from North American agents in terms of demand?
A: American Airlines has its own strategy, and we support them with both NDC and EDIFACT bookings. We aim to keep our platform attractive for airlines and travel agencies. The impact varies as different airlines have different approaches to NDC.
Q: Are there opportunities to add new airlines to the Altéa platform, especially with mergers like Iberia and Air Europa?
A: Yes, there are always opportunities. We continue to bring airlines to our platform and upsell additional functionalities. Mergers and acquisitions often present opportunities to add new airlines to Altéa.
Q: Where is your TMC booking flow relative to 2019 levels, especially given the slow recovery of corporate travel?
A: Corporate travel is recovering but still behind leisure travel. However, within the GDS, TMC bookings have reached the same mix as in 2019, indicating strong demand in corporate bookings.
Q: Can you comment on market share shifts in distribution and the importance of NDC in these conversations?
A: We are pleased with our performance and market share trends. NDC is becoming increasingly important in discussions with travel agencies and airlines. We expect NDC volumes to grow significantly in the coming years.
Q: How have bookings in Western Europe recovered relative to capacity, and what is the outlook for further recovery?
A: The main effect has been the faster growth of low-cost carriers compared to full-service carriers. The improvement in bookings continues, and we see a positive trend in April and May. The outlook remains positive, but we need to monitor economic conditions and capacity.
Q: Can you disaggregate the components contributing to the 15% growth in revenue per booking in GDS? Is this level of growth sustainable?
A: The growth was driven by price increases, a positive impact from foreign exchange rates, and a favorable booking and customer mix. While revenue per booking growth should remain positive, we expect it to moderate as we move through the year.
Q: What are your expectations for GDS bookings recovery to 2019 levels? Is 2024 still plausible, or is it now 2025 or beyond?
A: We are not providing specific guidance for future years, but we expect a further recovery this year. The pace of recovery will depend on various factors, including business travel and economic conditions.
Q: How is the transition to Microsoft progressing, and is there competitive pressure to accelerate the timeline?
A: The transition to Microsoft is progressing according to plan. We are not accelerating the timeline and are pleased with the current progress. The project is complex and will be completed as planned.
Q: How confident are you in meeting your 2023 guidance given the slower-than-expected volume recovery?
A: We remain confident in achieving our 2023 guidance based on strong year-to-date performance. However, we are cautious about potential economic and capacity-related uncertainties.
Q: Can you comment on the competitive environment for Altéa NDC and the efforts you are undertaking?
A: We are investing in NDC and other technologies to stay competitive. Our goal is to have advanced solutions that meet customer needs. We are signing new customers and continuously improving our offerings.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
