Amadeus IT Group S.A maintained its positive financial evolution in the first nine months of the year, supported by the solid operating performances of its Distribution and IT Solutions businesses, the consolidation of TravelClick (since October 4, 2018) and positive foreign exchange effects.
These factors helped to achieve double-digit growth both in revenue and EBITDA, and an adjusted profit[4] of €992.5 million, which represents an increase of 11.9%1 compared to the same period of 2018.
Luis Maroto, President & CEO of Amadeus, commented:
“Amadeus maintained its growth trend in the first nine months of the year, achieving double-digit expansion in revenue, EBITDA and adjusted profit. This positive financial performance was driven by the healthy evolution of our diversification strategy, particularly Hospitality, as well as the resilience of our core segments.
“In Distribution, our booking volumes outperformed the industry, driven by market share gains in all regions except Asia-Pacific. In IT Solutions, we continued supporting our customers with new partnerships and solutions, such as our new agreement with Visa to secure payments for the travel industry and our passenger disruption solutions which were contracted by several airlines during the quarter ”.
[1] Adjusted to exclude TravelClick’s acquisition related costs (amounting to €7.3 million before taxes) and PPA effects (which reduce revenue and EBITDA by €7.8 million and €5.5 million, respectively. Adjusted profit is not impacted by PPA effects).
[1] 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-recurring items.
Business highlights for the first nine months of the year
Distribution
Revenue in this segment rose 5.1% to €2,394.8 million. An increase of 0.9% in bookings, along with an expansive average revenue per booking driven by a positive mix and the double-digit expansion delivered by our Payments distribution business, drove revenue growth, which was also supported by a positive foreign exchange effect.
The travel agency air booking industry declined by 0.8% (excluding India, it remained flat). North America and Central, Eastern and Southern Europe were the fastest growing regions. In turn, Western Europe, Asia-Pacific and Middle East and Africa showed a contraction, impacted by several effects, including macroeconomic developments and geopolitical events. Latin America reported limited growth in the period.
Amadeus’ bookings once more showed resilience and continued to grow despite this challenging environment. Our travel agency air bookings increased by 0.5%, supported by continued market share expansion across all regions, except for Asia-Pacific (excluding India, Amadeus’ bookings grew by 3.2% and global competitive position[5] expanded by 1.3 p.p.).
Amadeus TA air bookings (figures in millions)
| Jan-Sep 2019 | % of total | Jan-Sep 2018 | % of total | % change | |
| Western Europe | 149.9 | 33.5% | 147.6 | 33.2% | 1.5% |
| North America | 92.5 | 20.7% | 83.0 | 18.6% | 11.5% |
| Asia Pacific | 79.6 | 17.8% | 93.9 | 21.1% | (15.3%) |
| Middle East & Africa | 53.4 | 11.9% | 54.8 | 12.3% | (2.6%) |
| Central, Eastern & Southern Europe | 40.3 | 9.0% | 36.8 | 8.3% | 9.4% |
| Latin America | 31.4 | 7.0% | 28.7 | 6.5% | 9.2% |
| Total TA air bookings | 447.0 | 100.0% | 444.8 | 100.0% | 0.5% |
[1] Competitive position: our travel agency air bookings in relation to the travel agency air booking industry, defined as the total volume of travel agency air bookings processed by the three major global reservation systems (Amadeus, Sabre and Travelport). It excludes air bookings made directly through airlines’ direct distribution channels (airline offices and websites), single country operators (primarily in China, Japan, Russia and Turkey), other content aggregators and direct connect applications between airline systems, travel agencies, corporations and meta-bookers, which together combined represent an important part of the industry.
During the third quarter, Amadeus signed seven new contracts or renewals of content agreements with airlines, including the low-cost carrier Thai Lion Air, reaching a total of 19 for the first nine months of the year. Subscribers to Amadeus’ inventory can access more than 110 low cost and hybrid carriers’ content worldwide.
During the third quarter, we expanded and strengthened partnerships with key customers. In August, Southwest announced a distribution agreement as a result of which travel managers and travel management companies will be able to book, change, and modify reservations through the Amadeus Travel Platform. This agreement further builds on our relationship with the carrier following its migration to Altéa in 2017.
Amadeus reached a distribution agreement with TAP Air Portugal that includes distribution through a Private Channel. The agreement also sees TAP Air Portugal joining the Amadeus NDC[X][6] program with a view to making the airline’s future NDC sourced content available through the Amadeus Travel Platform. As the industry evolves, to address different players’ needs, Amadeus is helping airlines to sell the way they want, and travel sellers to access content in the way they need to.
In October, we announced a strengthened partnership with Japan Airlines, which includes an extended distribution and IT agreement. Japan Airlines will benefit from enhanced technology as Amadeus becomes the carrier’s recommended distribution partner in the Japanese market. The airline’s content, including the full range of international, as well as preferred and negotiated fares, will now be available for travel sellers to shop, book and service through the Amadeus Travel Platform.
We also made important progress in our NDC [X] program. In August, we deepened our partnership with United Airlines by developing, testing and bringing to market new content offerings, such as United Airlines’ new Corporate Bundles and Dynamic Bundled Fares. That month, we announced that American Express Global Business Travel and American Airlines, both partners of our NDC [X] program, had processed live bookings using American’s NDC-enabled content through the new Amadeus Travel API.
In October, we announced that Amadeus Selling Platform Connect now allows travel sellers to shop, order, pay and service airline travel offers via an NDC connectivity. Travel sellers can now view and compare all available airline flights and related services for any given trip on one single screen, whether they are sourced from EDIFACT, NDC or other APIs.
[1] This program aims to bring together all the NDC efforts across Amadeus – as an IT provider and as a distributor – under one roof, and is a continuation of Amadeus’ previous work towards the digitalization of the travel industry. NDC[X] is part of the evolution of Amadeus’ travel platform which brings together all relevant content – including air, hotel and other travel content – from any source (EDIFACT, NDC, proprietary APIs and other aggregated content) to be distributed via any user interface or device.
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