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Amadeus Reports Strong First Quarter Growth

May 14, 2010 By: George Dooley

Amadeus has reported its year-on-year financial results for its first quarter ending March 31, including an increase in adjusted net income of 58.1 percent to reach $163.5 million. This is backed by a growth in revenues of 13.4 percent to $895  million and an improvement in adjusted EBITDA by 26.1 percent to $473.7 million. This continues Amadeus’ trend for steady growth, following an increase in adjusted EBITDA every year between 2004 and 2009. EBITDA represents earnings before interest, taxes, depreciation and amortization.

Year-on-year the adjusted EBITDA margin grew from 35.7 percent to 39.7 percent and the adjusted EPS increased by 58.2 percent to $.60 per share. Net financial debt was down by $203/7 million on March 31. This steady growth is underpinned by double digit increases in both the Distribution and IT solutions businesses, Amadeus reports.

Revenues within the Distribution area increased by 12.4 percent while the volume of air travel agency (TA) bookings increased by 9.6 percent in the first quarter of 2010. Amadeus said this was primarily driven by the performance of emerging markets (Middle East and Africa and Asia-Pacific).

Amadeus said it maintained its global leadership position in market share of close to 37 percent of air travel agency bookings. The IT Solutions business grew its revenues by 17.9 percent during the period, continuing its track record of solid growth as contracted migrations took place.

“We are encouraged by the recent industry-wide increase in global air traffic and travel bookings, and this is a strong indicator of our growth potential as the global travel industry continues to recover,” David Jones, president and CEO of Amadeus, said.

In the first quarter of 2010, Amadeus continued its drive to sign long-term full content agreements with key airline customers, including Air France-KLM (four years), Westjet (three years), Iberia (five years), and Austrian Airlines (five years). These contracts join a growing number of recently signed long-term content agreements which balance airlines’ need for efficient distribution with secure access to relevant travel content for travel agencies.

Amadeus signed similar agreements in 2009 with, among others, British Airways (three years), Lufthansa and Swiss (five years), SAS Group five5 years) and Virgin Atlantic (three years). All these long-term full content agreements also apply to ancillary services. More than 80 percent of all airline bookings made by Amadeus travel agencies worldwide are made on airlines with full content agreements.

As ancillary services become an ever more significant part of travel, Amadeus is working hard to ensure that the benefits of an unbundled approach can be enjoyed by all in the industry, the company said. Amadeus’ multi-channel strategy for ancillary services is focused on creating sustainable profitability for airlines while managing complexity and cost for all parties involved in the travel supply chain.

The company is working on a number of initiatives in this area which will be rolled out throughout the year. Amadeus is also participating in a joint industry initiative led by travel management companies, online agencies, and global distribution systems to support the implementation of recently developed, industry-wide technology standards which enable shopping, booking, payment, and reporting of ancillary services.

In January, Amadeus launched Amadeus Master Pricer Agent Fare Families for online travel agencies and for travel agencies with an online presence. As part of the company’s Master Pricer portfolio, Amadeus was first to launch a merchandising solution that enables travel agents’ customers to more easily compare airlines’ fares and their associated conditions online.



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