• Revenue Growth: Increased by 13% in the first nine months of 2024.
• EBITDA Growth: Grew by 13% with a margin expansion of 0.3 percentage points to 13.3%.
• Operating Income: Increased by 17%.
• Adjusted Profit: Grew by 17.4%.
• Free Cash Flow: Nearly EUR 1 billion generated in the first nine months.
• Leverage: Stood at 1.09 times net debt to last 12 months EBITDA.
• Air Distribution Revenue: Increased by 10% year-to-date.
• Bookings Growth: 4.4% in Q3, 3.4% year-to-date.
• Air IT Solutions Revenue: Grew by 16.2%.
• Passengers Boarded Growth: 8.8% in Q3, 12% year-to-date.
• Hospitality Solutions Revenue: Grew by 13% in the first nine months.
• CapEx: Increased by 14.4%, representing 11.4% of revenue.
• R&D Investment: Grew by 18% over prior year.

• Warning! GuruFocus has detected 3 Warning Sign with AMADF.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Amadeus IT Group SA (AMADF) reported a 13% increase in group revenue for the first nine months of 2024, with EBITDA and operating income both growing by 13% and 17%, respectively.
• The company achieved nearly EUR 1 billion in free cash flow generation, maintaining a leverage ratio of approximately 1 times net debt to last 12 months EBITDA.
• Amadeus IT Group SA (AMADF) saw double-digit growth across all segments, including Air Distribution, Air IT Solutions, and Hospitality & Other Solutions.
• The company is progressing well with its NDC strategy, signing agreements with major airlines like Delta, Virgin Australia, and Indigo, and aims to become a leading aggregator in NDC bookings.
• Amadeus IT Group SA (AMADF) continues to invest in technology and innovation, leveraging cloud-native architecture, AI, and data-centric capabilities to maintain a competitive advantage.

Negative Points

• The CFO executive search process is ongoing, with no concrete updates provided during the earnings call.
• The Hospitality segment's growth was slightly softer than expected due to delays in the payments business, impacting the overall revenue growth in this segment.
• Amadeus IT Group SA (AMADF) faced challenges in the North American market, with local bookings impacted by reconnections between a large OTA and several carriers.
• The company experienced delays in onboarding new customers for its payments business, particularly in the Asia Pacific region, affecting expected growth rates.
• Amadeus IT Group SA (AMADF) anticipates a moderation in revenue per booking growth into the fourth quarter, influenced by booking mix and pricing effects.

Q & A Highlights

Q: Could you confirm if the softer guidance in the Hospitality business is due to payments, and what is happening in payments? A: Yes, the delay is primarily in payments. We expected higher growth rates but faced delays in onboarding customers, particularly in Asia Pacific. However, we remain optimistic about midterm growth as these customers are signed and will contribute once implemented. (Luis Maroto Camino, CEO; Decius Valmorbida, President - Travel Unit)

Q: Can you elaborate on the strategy with Navitaire Stratus and how it differs from Nevio? A: Navitaire Stratus is designed for low-cost carriers, offering dynamic retailing capabilities. It embraces offer and order standards, facilitating integration with network carriers. This is a technology refresh to leverage cloud and new tech possibilities, distinct from Nevio, which targets network carriers. (Decius Valmorbida, President - Travel Unit)

Q: What are the expectations for cost growth in Q4, and how will revenue per booking evolve? A: We expect cost growth to be lower than in 2023, excluding acquisition costs. Revenue per booking growth will moderate in Q4 due to a less favorable booking mix, but positive impacts from negotiations and inflation are included. (Luis Maroto Camino, CEO)

Q: How is the India market share evolving, and what are the unit economics for low-cost carriers? A: We are optimistic about India, having expanded Air India content and signed with IndiGo. The market is large and growing, and while low-cost carriers may have lower unit economics, the overall growth is positive. (Decius Valmorbida, President - Travel Unit)

Q: Can you provide an update on the M&A pipeline and potential for a buyback? A: We continue to look for M&A opportunities and have a leverage target of 1 to 1.5 times. If no M&A opportunities arise, we will consider further shareholder remuneration. (Luis Maroto Camino, CEO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.