“Into 2023, as volumes recover, our financial performance is expected to advance further.”
If there was any doubt about the state of travel and tourism recovery on a global scale, Amadeus’ latest earnings report should ease those concerns. While the company is still striving to meet pre-pandemic levels of business and revenue, it has managed to achieve robust numbers and an upwards trajectory.
In a recent press release, Amadeus announced that it had succeeded to hit target leverage levels last year, thereby returning to annual profit and resuming dividend for shareholders.
For context, Amadeus employs 16,000 professionals and builds technology solutions that are integrated with airlines and airports, hotels and railways, search engines, travel agencies, and tour operations all over the world.
Luis Maroto, President & CEO of Amadeus, commented, “2022 was a strong year for Amadeus. Global air traffic continued to recover, and we had important customer wins and market share gains during the year. Looking ahead, we are optimistic about the future of the travel industry and the opportunity for Amadeus. Into 2023, as volumes recover, our financial performance is expected to advance further”.
Echoing Luis’ comments, global air traffic continued to recover last year when set against the benchmark of pre-pandemic 2019. This air traffic evolution, coupled with solid commercial activity, contributed to stronger revenue, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), and adjusted profit compared to 2021.
Breaking down the numbers
So, how much did Amadeus make last year?
According to the report, the tech company’s annual revenue reached €4,485.9 million, which represents an improvement of 68.0% from 2021, but remains 19.5% below the 2019 figure.
EBITDA amounted to €1,640.3 million, which is 161.4% above 2021 levels and 26.5% below 2019.
Adjusted profit was €742.2 million, 41.2% below 2019 levels.
In terms of targets, Amadeus’ Free Cash Flow generation enabled them to continue deleveraging. As of December 31, 2022, their leverage stood at 1.4 times last-twelve-month EBITDA, which is within the target leverage range of 1.0x-1.5x.
As for shareholder remuneration, Amadeus expects to resume dividends this year at an estimated €0.74 per share, representing 50% of the reported profit, amounting to €333.4 million.
How business evolved over the year
Competing against 2019 standards is a high bar, but Amadeus fared well with the benchmark.
In Air Distribution, in the fourth quarter of 2022, Amadeus’ bookings were 28.3% less than in the fourth quarter of 2019. For the whole year, Amadeus’ bookings were 31.7% below 2019. However, it was up a whopping 92.0% compared to 2021.
The company’s best performing region in 2022 was North America, which actually grew 2.9% compared to pre-pandemic levels in 2019, and it is now their largest region by bookings. North America also represents 30.8% of Amadeus’ total bookings.
In the year, revenue in this segment was 27.0% below 2019, due to lower booking volumes. Despite the negative effect from a higher weight of local bookings compared to 2019, in 2022 the revenue per booking increased, supported by various positive pricing effects and a positive foreign exchange impact.
In Air IT Solutions, in the fourth quarter Amadeus passengers boarded (PB) were 15.6% lower than in the same period of 2019. For the whole of 2022, PB was 22.8% below 2019. Once again, their best performing region for the year was North America, which reported 11.1% PB volume growth compared to 2019. Revenue per PB grew in 2022 by 11.4% versus 2019, mainly due to revenue lines not linked to the PB evolution reporting healthier growth rates than airline passengers boarded, and positive pricing partially offset by mix impacts.
It’s interesting to note that the revenue per PB was also impacted by positive foreign exchange effects, relative to 2019. For the whole of 2022, Air IT Solutions revenue was €1,565.4 million, still 14.0% below 2019 revenue.
Finally, in the fourth quarter, Hospitality & Other Solutions revenue was 3.6% higher than in the same period of 2019. For all of 2022, revenue in the Hospitality & Other Solutions decreased by 4.2% compared to 2019, undoubtedly impacted by the effects of the COVID-19 pandemic. Within Hospitality, Amadeus registered quarter-on-quarter performance improvements compared to 2019 across all revenue lines. And as with the other segments, Hospitality & Other Solutions revenue was impacted by positive foreign exchange effects in 2022, compared to 2019.
Here’s a quick breakdown:
- Hospitality IT delivered an enhanced performance from 2021 (compared to 2019), supported by new customer implementations and strengthening transaction growth rates.
- Media and Distribution revenues grew notably quarter-on-quarter in 2022, driven by media and booking volumes performance advances, and were above 2019 revenues in the second half of 2022.
- Business Intelligence revenue performance (versus 2019) also improved, compared to the previous year, backed by customer implementations.
Highlights of the year
- Air Distribution bookings were 396.3 million, 92.0% over the bookings of 2021 or 68.3% of 2019 bookings.
- Air Distribution revenue was €2,147.8 million, an improvement of 102.3% versus 2021 revenue, or 73.0% of 2019 revenue.
- Air IT Solutions passengers boarded amounted to 1,539.5 million, 81.4% versus 2021, or 77.2% of 2019.
- Air IT Solutions revenue was €1,565.4 million, an increase of 46.4% from 2021, representing 86.0% of 2019 revenue.
- Hospitality & Other Solutions revenue was €772.7 million, an expansion of 43.5% versus 2021, or 95.8% of 2019 revenue.
- Group Revenue was €4,485.9 million, a 68.0% increase compared to the previous year, representing 80.5% of 2019 revenue.
- EBITDA amounted to €1,640.3 million, an improvement of 161.4% from 2021, or 73.5% of 2019 levels.
- Adjusted profit amounted to €742.2 million, versus a loss of €44.7 million in 2021, or 58.8% of 2019 levels.
- Free Cash Flow amounted to €805.0 million, an increase of 724% from 2021, or €834.1 million excluding implementation costs paid.
- Net financial debt was €2,284.5 million as of December 31, 2022 (1.4 times last-twelve-month EBITDA).
