eDreams ODIGEO: First Quarter Financial Results

BARCELONA, Aug. 29, 2019 /PRNewswire/ --  eDreams ODIGEO (www.edreamsodigeo.com), Europe's largest online travel company and one of the largest European e-commerce businesses, today reported its results for the first quarter of the fiscal year 2020, ended 30th June 2019.

1Q RESULTS HIGHLIGHTS

• Solid performance in line with guidance. Revenue Margin increased by 5%, to €141.5 million, due to an increase in Revenue Margin per booking of 7%. Adjusted EBITDA amounted to €28.1 million, up 8% year-on-year.
• Revenue diversification initiatives delivering results:
• Diversification revenues, up 25% year-on-year, continue with strong growth and 57% larger than our Classic Customer Revenue.
• Revenue diversification ratio up to 46% (from 38%)
• Product diversification ratio up to 76% (from 60%)
• Mobile bookings up to 40% of total flight bookings versus 36% in the first quarter of fiscal year 2019
• Industry-leading subscription programme Prime proves very successful as subscribers continue to increase and reached 325,000 across four of the Group's largest markets.
• The one-off provision related to the new operational optimisation plan in Berlin and Milan offices drives bottom-line performance. Excluding this non-recurring effect, Adjusted Net Income grew strongly by +58%, to €9 million.
• Solid cash position as net cash at the end of the period amounted to €137.1 million, up 10% versus €124.9 million last year.
• On track to meet full-year guidance targets: Bookings and Revenue Margin expected  to grow between 4% and 7%, and Adjusted EBITDA to achieve €130-134 million at the end of the fiscal year.

Dana Dunne, CEO of eDreams ODIGEO said:

"We have delivered a solid set of 1Q results in line with our guidance.  Also, our revenue diversification is paying off well, growing at 25% and is now 57% larger than our Classic Customer Revenue. In addition, our industry-leading subscription programme is proving very successful."

Business Overview

Reflecting the completion of the shift in the revenue model, with some markets still within the first 12 months of the shift, and our focus on high-quality sustainable business, bookings were down 1%, while Revenue Margin increased by 5%, outperforming our first-quarter revenue guidance of low single-digit revenue growth, as we achieved higher revenues on fewer bookings for a total amount of €141.5 million. Adjusted EBITDA was up 8% to €28.1 million in the first quarter of the fiscal year 2020, in line with guidance.

Our revenue diversification initiatives are delivering results. Diversification revenues continue to grow, up 25% year-on-year, and are now 57% larger than classic customer revenue. As an intended consequence of our revenue model shift, Product Diversification Ratio and Revenue Diversification Ratio have increased to 76% and 46% in the first quarter, up from 60% and 38% in the first quarter last year, rising a remarkable 16 and 8 per cent in just one year.

Overall, we are delighted by the progress made in revenue and product diversification which are continuing to grow rapidly. We are particularly pleased with dynamic packages and ancillaries as revenues increased over 30% year-on-year in both categories.

Our industry-leading subscription programme called Prime continues to be successful. The number of subscribers has increased to 325,000 and the programme currently operates in four of our largest markets. Additionally, mobile bookings continue to grow and account for 40% of our total flight bookings in the first quarter of the fiscal year 2020, rising 4 percentage points from the first quarter last year.

The one-off provision related to the new operational optimisation plan in Berlin and Milan offices drives bottom-line performance. This plan will allow the business to further strengthen its technological capabilities in order to offer industry-leading customer experience through enhanced products and services while ensuring that the company is appropriately structured and better positioned to continue innovating and providing customers with a seamless travel experience. Excluding this non-recurring effect, Adjusted Net Income grew strongly by +58%, to €9 million. The Company believes that Adjusted Net Income better reflects the real ongoing operational performance of the business.

Cash position (net of overdrafts) stood at €137.2 million, up 10% versus €124.9 million in the first quarter of the fiscal year 2019. The solid cash performance was driven by; net cash from operating activities, which improved by €35.1 million, mainly reflecting lower outflow in working capital, a reduction on income tax paid, increase in adjusted EBITDA and higher non-cash items; cash for investments of €7.2 million, broadly in line with the same period last year; and cash used in financing, which amounted to €1.7 million, also broadly in line with the same period last year.

As a result, Net leverage ratio was reduced from 2.7x in June 2018 to 2.5x in 2019. In the first quarter of the fiscal year 2020, Gross Leverage ratio remained relatively flat at 3.7x in June 2019 vs 3.8x in 2018, which gives us ample headroom vs our covenant ratio.

Summary Income Statement

(In € million)	1Q FY20	Var 1Q FY20 vs 1Q FY19	1Q FY19
Revenue margin	141.5	5%	134.6
Adjusted EBITDA	28.1	8%	26.1
Non-recurring items	(8.7)	n.a	(0.4)
EBITDA	19.4	(24%)	25.7
EBIT	11.6	(41%)	19.7
Net income	1.6	(70%)	5.3
Adjusted net income	9.0	58%	5.7

Business review by geography

The top 6 markets (France, Spain, Italy, Germany, the United Kingdom and the Nordics) reached €108.3 million in revenue margin in the first quarter, up +0.3% compared to the previous year and reflecting +2% CAGR^[1]. This performance was in line with our guidance and was driven by the investments made in the shift of the revenue model during the fiscal year 2019 and the fact that some markets are still within the first 12 months of the shift.

Revenue diversification drives growth in the rest of markets (referred to as "Rest of the World markets" or "RoW"), where revenue margin grew strongly by +25% to €33.2 million in the first quarter, representing +24% CAGR.  

^[1] CAGR presented based on 1Q FY15-1Q FY20

Outlook

We expect the fiscal year 2020 (April 2019 to March 2020) to be a much better year than 2019, but it will still not reflect all our underlying potential as we have major markets with less than 12 months with the new revenue model. From the second quarter onwards, we expect growth in Bookings, Revenue Margin and Adjusted EBITDA, in line with our full-year guidance. There will be quarterly variations, due to the timing of changes we made in the last fiscal year.

As a result, we expect annual targets for the fiscal year 2020 to be:

• Bookings to increase from 4% to 7% vs fiscal year 2019
• Revenue margin to increase from 4% to 7% vs fiscal year 2019
• Adjusted EBITDA in the range of €130 to €134 million 

About eDreams ODIGEO

eDreams ODIGEO is one of the world's largest online travel companies and one of the largest European e-commerce businesses. Under its leading online travel agency brands – eDreams, GO Voyages, Opodo, Travellink, and the metasearch engine Liligo – it offers the best deals in regular flights from 660 airlines, hotels, cruises, car rental, dynamic packages, holiday packages and travel insurance to make travel easier, more accessible, and better value for the 18 million customers it serves across 46 markets. eDreams ODIGEO is listed on the Spanish Stock Market.

 

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