Rise in travel volumes underpins Amadeus’ continued recovery

Full year highlights (twelve months ended December 31, 2021)

• In Air Distribution, our travel agency air bookings grew 91.9% compared to 2020 (albeit decreased 64.4% versus 2019).
• In Air IT Solutions, our passengers boarded (PB) showed an improvement of 22.9% from 2020 levels (and contracted 57.4% compared to 2019).
• Revenue grew 22.8% compared to 2020, to €2,670.0 million (versus 2019, revenue decreased by 52.1%).
• EBITDA¹ amounted to €627.6 million, a 175.5% improvement versus 2020 (albeit still representing a 71.9% drop compared to 2019).
• We reduced our adjusted annual loss² to €44.7 million, from a -€302.4 million in 2020 (a 103.5% decline versus our 2019 Adjusted profit).
• Free Cash Flow³ amounted to €99.2 million, or €234.0 million excluding implementation costs paid.
• Net financial debt⁴ amounted to €3,048.7 million as of December 31, 2021.

Luis Maroto,President & CEO of Amadeus, commented:

"Throughout 2021, and despite different waves of the COVID-19 pandemic impacting travel, we saw continued recovery in volume performance, with encouraging positive trends in both air bookings and passengers boarded, across many regions.

“Last year, we remained focused on strengthening our business and continued investing for the future. On the commercial front, we made important progress and signed landmark agreements which reinforce our competitive position.

“Looking at the year ahead, we remain cautiously optimistic about the recovery in travel. The continued trust from existing and new customers in our products and solutions gives us confidence for the future”.

^{[1] 2021 and 2020 figures adjusted to exclude costs, amounting to €28.6 million (€19.8 million post tax) in 2021, and €169.1 million (€120.9 million post tax) in 2020, related to the implementation of the cost saving program announced in 2020.}

^{[2] Excluding after-tax impact of the following items: (i) accounting effects derived from PPA exercises and impairment losses, (ii) non-operating exchange gains (losses), (iii) costs related to the implementation of the cost saving program and (iv) other non-operating, non-recurring effects.}

^{[3] Defined as EBITDA, minus capex, plus changes in our operating working capital, minus taxes paid, minus interests and financial fees paid.}

^{[4] Based on our credit facility agreements’ definition.}

Business evolution in the year

Air Distribution

Air Distribution revenue grew 66.1% compared to 2020, although it still decreased by 63.9% in comparison to 2019, driven by the reduction in air booking volumes. Despite the negative effect from a higher weight of local bookings, our air distribution revenue per booking increased in the year, relative to 2019, as several revenue lines (such as those from IT solutions provided to travel sellers and corporations) showed a softer contraction than travel agency air bookings.

In the fourth quarter of 2021, Amadeus travel agency air bookings declined by 49.2% compared to the same period in 2019. This represents an improvement over the 58.5% air booking reduction we reported in the third quarter of 2021. During the fourth quarter, air bookings showed steady month-on-month improvements until December, when the rise of COVID-19 cases globally linked to the Omicron variant led to a deterioration in bookings evolution. This proved to be a temporary set-back in our recovery path as in January 2022 we started to see once again an improvement in volume performance.

For the full year, Amadeus’ travel agency air bookings decreased by 64.4% compared to 2019. The best performing region in the year was North America, which now is 44.3% below 2019 levels (in the fourth quarter, bookings in this region were only 19.9% below 2019 levels). It was encouraging to see that Asia-Pacific, the worst performing region in booking volumes since the start of the pandemic, delivered in the fourth quarter its most notable quarterly performance progress to date (with a decrease of 75.1% versus 2019, a 9.6 p.p. improvement from the third quarter).

Amadeus TA air bookings

During 2021, we signed 77 new contracts or renewals of distribution agreements, which will broaden the scope of the content available in the Amadeus Travel Platform, particularly in relation to NDC (New Distribution Capability). In December, as part of a broader distribution and IT deal, we renewed and expanded our partnership with Avianca to include NDC-enabled content in addition to Avianca’s existing content for Amadeus travel sellers. In September, Etihad Airways agreed to make its full range of NDC offers available to Amadeus travel sellers. In October, we announced an NDC agreement with Cathay Pacific starting in the first quarter of 2022 in several markets. Also, United Airlines renewed its distribution agreement with Amadeus, which now includes new NDC-enabled content. Qantas’ NDC offers are also available through the Amadeus Travel Platform for testing with pilot agents.

In January 2022, we signed a new distribution agreement with Emirates. Thanks to this expanded partnership, Emirates’ NDC-enabled content will be integrated into the Amadeus Travel Platform. Also, all of Emirates’ non-NDC content became available without a surcharge for all Amadeus-connected travel sellers as of February 2022.

As of today, we have more than 20 airlines signed for the distribution of NDC content.

We also made important progress in our geographic diversification, with deals that will allow us to extend our footprint in Asia Pacific. We renewed a multi-year technology deal with China’s Tongcheng Travel, one of the major OTAs in China. Amadeus will power Tongcheng Travel’s international expansion outside China through this technology agreement. In February, we announced that ezTravel, Taiwan’s largest online travel agency (OTA), will implement Amadeus Travel API. Lastly, in April, we announced that China’s Trip.com Group in Shanghai, parent company of leading online travel brands Trip.com, Ctrip, Skyscanner and Qunar, will adopt our Amadeus Custom Search solution as part of its boutique shopping engine to deliver the best customer experience.

Air IT Solutions

In 2021, Air IT Solutions revenue grew 8.5% from 2020, albeit still a decrease of 41.2% versus 2019, impacted by the reduction in volumes. As happened with our distribution revenue per booking, during 2021 our revenue per passenger boarded was higher than in 2019, supported by the evolution of several revenue lines not linked to PBs (fundamentally, services and Airport IT), which contracted less than PB volumes.

Airline IT

Amadeus’ full year 2021 passengers boarded increased 22.9% from 2020 (compared to 2019, they decreased by 57.4%). Our best performing region in the year was North America, which was only 20.1% below 2019 in PB volume. In the fourth quarter several regions reported large improvements in performance from the previous quarter, such as Western Europe, Asia-Pacific and Middle East and Africa.

Passengers boarded

At the close of December, 210 customers had contracted one of either of the Amadeus Passenger Service Systems (Altéa or New Skies) and 200 customers had implemented one of them.

Among them was Etihad Airways, which in September signed a landmark multi-year agreement to embark on a major digital transformation. As part of the deal, Etihad Airways will implement the full Amadeus Altéa PSS suite, in addition to web booking, revenue management capabilities and merchandizing, data management and passenger servicing solutions, as well as the Amadeus Digital Experience suite. Etihad has also contracted Amadeus Altéa NDC.

In December, Hawaiian Airlines, already an existing user of Amadeus Altéa Departure Control-Flight Management, selected Amadeus as its next-generation technology partner. Implementation of the Amadeus Altéa PSS suite will begin in the first quarter of 2022, with targeted completion in 2023. The airline will also implement Traveler ID for Safe Travel and will connect to the Amadeus Payments Platform. Also, in December, Avianca renewed and expanded its PSS agreement. Avianca deployed Amadeus Passenger Recovery to further optimize and automate disruption management, making the process faster and more efficient.

In September, Uzbekistan Airways contracted for the full Suite of Altéa PSS and some additional solutions. In November, Ultra Air, a new Colombian ultra-low-cost carrier, contracted New Skies for its reservation and retailing platforms, along with its integrated day-of-departure, Digital Experience Suite, NDC Gateway, Ancillary Revenue Optimization, revenue accounting and loyalty solutions.

Our upselling efforts continued during 2021. Saudia contracted for Passenger Recovery, while Air Algerie signed up for several solutions from our Airline IT portfolio including Traveler-DNA (formerly Customer Experience Management), Amadeus Anytime Merchandizing, the new Amadeus Mobile Application Premium, and Amadeus Instant Search. The airline also contracted Amadeus Altéa NDC to distribute its NDC content.

Lufthansa Group airlines including Austrian Airlines, Brussels Airlines, Lufthansa and SWISS contracted Amadeus’ Digital Experience Suite (DES). LOT Polish Airlines and Amadeus signed a multi-year deal that will see the airline maximize the benefits of the Amadeus Airline Platform and add a range of new IT solutions on top of its existing PSS. The renewal agreement covers a wide range of state-of-the-art solutions related to passenger services, airline operations, revenue management, merchandizing, passenger disruption management, and digital experience. On the digital front, Amadeus will power the airline’s website.

Vistara, the Indian carrier carrying more than 7 million passengers in 2019, contracted Amadeus Network Revenue Management. This solution will allow the carrier to grow revenues by adopting the latest technologies in Origin & Destination Revenue Management, as Vistara expands its domestic and international network.

Our Safe Travel program is growing at a rapid pace. At the end of the year, we had 18 airlines live in production with Traveler ID for Safe Travel, and a busy customer pipeline. A total of 7.1 million passengers have been verified, saving travelers and airlines thousands of hours in queues while at the airport. Air Europa has recently implemented the latest version of the solution, which allows three types of documents to be processed (vaccination certificate; PCR or antigen test; and the Passenger Locator Form).

Airport IT

Our Airport IT business maintained its positive commercial momentum last year, particularly around touchless technology, which is helping our airport customers adapt to the new social distancing rules. In April, we introduced Japan’s first end-to-end biometric boarding process thanks to our partnership with Narita Airport and NEC. Heathrow Airport (United Kingdom) contracted 215 self-service check-in kiosks from ICM Airport Technics, an Amadeus Company. The new generation of kiosks will provide a consistent self-service experience from check-in to bag drop, and the ability to integrate biometric verification ensures operational benefits for airports as well as the ease of use of passengers.

In March, Finavia, which runs 11 airports in Finland, chose Amadeus Flow. Cologne-Bonn Airport selected our cloud based Common Use Platform (ACUS) which was successfully cut-over ahead of time mid-December 2021. Sofia Airport (Bulgaria), Prague Airport (Czech Republic), and Pulkovo Saint Petersburg Airport (Russia) contracted Altéa Departure Control for Ground Handlers during last year.

We signed a deal with Sylt airlines club to provide ACUS at the Sylt Island’s airport in Germany. This is the first club contract signed, meaning the contract is signed with the operating airlines in the airport instead of with the airport, allowing for more servicing flexibility. The initial airlines using ACUS will be Lufthansa, Swiss International Air Lines and Eurowings.

We continued to expand our customer footprint in the United States. Missoula Montana Airport contracted ACUS, while Louis Armstrong Airport (New Orleans), Sacramento International Airport (California), Kansas City International Airport and Houston Airport Systems will implement Amadeus’ biometric technology. Also, in the U.S., Syracuse Hancock International Airport (New York) contracted for ACUS. Pittsburg International Airport (Pennsylvania) signed for the deployment of FIDS. Memphis International Airport (Tennessee) signed for Airport Operational Data Base, Resource Management System and PropWorks.

Hospitality & Other Solutions

In the fourth quarter of 2021, revenue in this segment (comprising Hospitality and Payments) contracted by 25.0% compared to the same period of 2019, an improvement from the -30.2% revenue performance delivered in the third quarter of 2021. For the full year period, revenue decreased by 1.9% compared to 2020 and by 33.2% versus 2019. Within the Hospitality & Other Solutions segment, Hospitality, which generates the majority of the revenues, continued to outperform Payments as it is supported by a greater weight of non-transactional revenues.

Hospitality

We continued to expand our portfolio of customers for our Hospitality solutions. In November, we announced an agreement with Marriott International to deploy the Amadeus Central Reservations System (ACRS) to modernize Marriott’s reservation infrastructure in the coming years.  Marriott also contracted Demand360 during the year.

In March, we announced that THE Park Hotels, a pioneer in the concept of luxury boutique hotels in India, and a user of Amadeus’ Guest Management Solutions, contracted Amadeus’ iHotelier Central Reservations System.

Lore Group, with properties across Europe and the United States, signed for Amadeus Digital Media, while luxury chain Sun Siyam contracted our Guest Management Solutions. Also, Swire Properties Hotel Management, based in Hong Kong; Siyam World, an all-inclusive resort in Maldives; and Millennium New York, all signed for Digital Media in 2021.

Langham Hospitality Group, a global hotel company with more than 30 properties located in major cities over four continents, contracted Amadeus Sales and Event Management and Amadeus Service Optimization. Hoteis Real Portugal, with 13 properties located in Porto, Lisbon and the Algarve, contracted for Amadeus Sales and Event Management.

Wyndham Hotels & Resorts contracted Amadeus Demand360 to gain a broader view of market performance across its organization, which includes 22 brands across nearly 9,000 hotels in 95 countries. In addition, HEI Hotels, which owns and manages over 80 full service, upper-upscale and luxury hotels and resorts throughout the United States, signed for Demand360.

We also expanded our hotel distribution content with several new distribution agreements. In August, we announced that Shanghai-based CTrip Corporate Travel of the Trip.com Group renewed a multi-year strategic partnership with Amadeus to gain access to extensive hospitality content. Also, and in addition to the NDC access mentioned above, we expanded our partnerships with VECI, IAG7 Viajes and Munckhof travel agencies, to include Amadeus Value Hotels, for extended hotel content and Amadeus B2B Wallet for faster, automated reconciliation and payment processing. In addition, the integration of iHotelier Channel Management in VECI will allow hotels to increase their visibility with VECI agents and therefore drive demand and bookings..

Payments

In March, we expanded our global collaboration with Mastercard for five years. Through this relationship, Amadeus will support innovative payment offerings across the travel industry through its B2B Wallet using Mastercard Wholesale Program. In August, Philippine Airlines became the first carrier to deploy multi-currency pricing through Amadeus’ innovative FX Box platform.

Corporate update: changes in the Board of Directors

Amadeus appointed William Connelly as Chairman of the Board in June 2021. Mr. Connelly, who has been on Amadeus’ Board since the summer of 2019 and has served as Vice Chairman of the Board since 2020, replaced José Antonio Tazón, who retired after having served on Amadeus’ Board of Directors since December 2008 and previously as Amadeus’ President and CEO for 18 years. Additionally, two new independent Directors, Jana Eggers and Amanda Mesler, joined the Board, in replacement of José Antonio Tazón and Pierre-Henri Gourgeon (other external) whose term of office expired also in June 2021. In July 2021, Mr. Nicholas Huss resigned as an Amadeus Director following his appointment as CEO of Hotelbeds.

In December, the Board of Directors appointed Jacinto Esclapés Díaz as new Secretary of the Board of Directors, effective January 1, 2022. He replaces Tomás López Fernebrand, who left the company at the end of 2021. Ana Gómez Ruiz will replace Mr. Esclapés as Vice-Secretary of the Board of Directors.

Liquidity enhancement and plans to strengthen Amadeus for the future

We remain focused on protecting our business and preparing it for the future. As of December 31, 2021, liquidity⁵ available to Amadeus amounted to circa €2.8 billion, supported by cash⁵ (€1,127.5 million), short term investments⁵ (€678.8 million) and an undrawn revolving credit facility (€1,000 million).

Regarding our cost optimization efforts, in 2021 we achieved a total fixed cost reduction of €128.4 million versus 2020, or of €634.5 million compared to 2019 (including both P&L fixed costs and capital expenditure and excluding cost saving program implementation costs and bad debt).

Investment in R&D⁶ is critical to our future competitiveness and has always been a priority for us. We have traditionally dedicated an important proportion of our annual revenue to R&D investment and, although COVID-19 has meant we have had to further prioritize our most strategic and important projects and postpone more long-term initiatives, we have maintained a strong commitment to R&D. In 2021, we still invested €765.3 million in R&D.

[5] Liquidity available is defined as (i) cash and cash equivalents, net of overdraft bank accounts, (ii) short term investments considered cash equivalent assets under our credit facility agreements´ definition, net of associated unrealized hedging results, and (iii) undrawn revolving credit facilities at the Company’s disposal.

[6]R&D investment is reported net of Research Tax Credit (RTC).

Summary of operating and financial information

[1] 2021 and 2020 figures adjusted to exclude costs, amounting to €28.6 million (€19.8 million post tax) in 2021, and €169.1 million (€120.9 million post tax) in 2020, related to the implementation of the cost saving program announced in 2020.

[2] Excluding after-tax impact of the following items: (i) accounting effects derived from PPA exercises and impairment losses, (ii) non-operating exchange gains (losses) and (iii) other non-operating, non-recurring effects.

[3] EPS corresponding to the Adjusted profit attributable to the parent company.

[4] Defined as EBITDA, minus capex, plus changes in our operating working capital, minus taxes paid, minus interests and financial fees paid.

[5] Based on our credit facility agreements’ definition.