Amadeus has started 2018 well, with its distribution and airline IT units dominating the filings while its new businesses continue to find their feet, financially and operationally.

For the first three months of 2018, the Madrid-listed tech giant reported revenues up by 3.1% to €1.2 billion compared with the same period in 2017, resulting in an EBITDA hike of 7.4% to €539.0 million.

Forex was a “negative headwind” during the quarter, and some accounting changes have also skewed the growth percentages.

Distribution

Revenues from this unit in the quarter were up 2.1% to just shy of €800 million, with Amadeus saying that the growth would have been “mid- to-high single digits” without the forex impact.

The number of travel agency air booking in the quarter was up by 3.7% to 160 million. By region, it saw a drop in bookings in western Europe to 56.3 million from 60.3 million last time. Western Europe now accounts for 35.2% of the total, down from 40.2%.

The biggest increase for agency air bookings was in Asia Pacific, up 18.3% to 33.1 million, representing 20.7% of the total.

During the three months it signed nine new or renewal deals with airlines, and noted that, at the end of March, 148 airlines had signed up for Amadeus Airline Ancillary Services (120 of which are live) and 72 have signed for  Amadeus Fare Families (57 live).

Elsewhere, “non-air” agency bookings in the quarter were as good as flat, up by only 0.7% to 17.1 million.

IT Solutions

Revenue from its airline IT business line – the Altea and New Skies PSS systems – was up to €434.5 million, a 5.1% increase (which would have been a low double-digit percentage without the forex impact)

Passengers boarded increased 22.7% to 416.9 million during the quarter, with Amadeus again noting the change in the regional balance away from western Europe. Asia Pacific saw passenger volumes leap by 23.9% to 144.4 million. This means that APAC is now Amadeus’ biggest region for airline IT, accounting for 34.6% of the total compared with western Europe’s share at the end of the quarter of 29.8%.

At the end of the March it had contracts with 204 customers for Altéa or New Skies, of which 195 are live.

The Management Review of the quarter references a collaboration with Lufthansa on a new biometric boarding solution using facial recognition in the US. The plan is to expand this beyond Los Angeles International Airport, where the initiative was trailled, to other US gateways.

New businesses

This section of the filings offers some topline operational insights into Amadeus’ hospitality IT, airport IT and payments business, with no standalone financials immediately obvious.

For hospitality, InterContinental Hotels Group continues to migrate its properties onto Amadeus’ “Guest Reservation System”. Amadeus says that “over 1,000 hotels {have] now migrated to the platform [with] full deployment expected by late 2018 to early 2019”.

Airport IT now has 280 customers while it continue to work with Finnair as the pilot customer for its Agent Pay product.

Research and development (R&D)

The detailed Management Review has a section devoted to Amadeus’ key ongoing R&D projects, noting that in the three months to end-March Amadeus spent 15.7% of group revenue on R&D.

It highlighted the “industrialization of NDC” in the context of finding a way to aggregate NDC content with other sources; ongoing personalization and merchandising products for airlines; and devoting resources to enhance distribution capabilities for hospitality and rail.

Links

Click here to access the “Reports and Presentations” page on Amadeus investor relations site from where the various assets – including the press release, presentation and  Management Review – can be downloaded.