EDreams ODIGEO S A : shows strong cash performance, ready to maximise opportunity on pent-up demand when restrictions lifted

Barcelona, 25^th February 2021 - 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 nine months ended 31 December 2020.

CURRENT TRADING

Short term trading impacted by travel restrictions but eDreams ODIGEO continues to outperform the wider market. After the strong and rapid turnaround experienced during the summer period, the rapid rollout of vaccines leading to lifting of restrictions is likely to result in a sharp rebound again to satisfy pent-up demand.

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Q3 RESULTS HIGHLIGHTS

• Revenue Margin (decrease of 77% vs. the third quarter of fiscal year 2020) in line with the second quarter and driven by COVID-19 impact
• Adjusted EBITDA amounted to (€10.4) million (€29.6m in third quarter FY20).
• Adjusted Net Income stood at (€23.1) million (€11.3 million in the third quarter fiscal year 2020).
• Marginal Profit (Revenue Margin minus Variable Cost) was €6 million positive for the third quarter of fiscal year 2021 despite us investing in higher short term call centre costs to help our customers. In 3Q FY21 was €1.3 million in excess of 2Q FY21.

• Maintained strong liquidity position despite short-term trading impact:
  • Strong Cash performance, net increase in cash of €11.5 million in the third quarter of fiscal year 2021.
  • Solid Liquidity position of €125 million in December and €122 million at the end of January, has remained stable since September 2020 despite short-term softening of trading.
    • Main reasons: High variability and good cost management, working capital inflows due to higher volumes and gross sales, better collection from suppliers, refunds collected and Prime deferred revenue increase and lower income tax paid.
    • Reduction of average monthly cash burn (excl. WC and tax but adding the increase in Prime Deferred Revenue) from €13 million to €7 million.
    • Net cash from operating activities improved by €31.4 million and we ended the quarter in Cash Flow before Financing positive of €13 million for the first time since the fourth quarter in fiscal year 2019.

• Improved strategic position and KPIs evolution:
  • Prime membership grew by 55% year on year to 758k subscribers and is on track to exceed 2 million subscribers by 2023.
  • Prime Deferred Revenue reached €20 million, an increase of 126% vs 3Q FY20 (Prime subscription fees not yet recognized into Revenue till Booking or the renewal date takes place).

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• Bookings at -65% in December compared to -79% for the wider travel industry.
• Diversification Revenue of 55%, up +4pp year on year showing the strength of our business strategy.
• Product Diversification Ratio up to 89%, up +7pp year on year.
• Mobile bookings up to 58% of total flight bookings, from 44% in the same period last year.

Dana Dunne, Chief Executive Officer, commented:

'I am proud to say that the work we have done has meant that the business is financially secure, strong and ready to satisfy the pent-up demand that awaits when restrictions are lifted.

We believe we have positioned ourselves for real success in the Post COVID-19 world. eDreams ODIGEO is agile and nimble, which has allowed us to adapt as quickly as necessary. Our business continues to lead through product development and innovation, such as Prime, our pioneering travel subscription program. The strength of our finances, the adaptability of our business model and the mitigating actions taken during the pandemic have put us ahead of the market and will enable us to emerge strongly and well positioned from the crisis.

Consumers are ready and waiting to travel again. Leisure travel is the exclusive focus of our business, and we are especially well poised to seize the rebound and better serve our customers.'

Business Overview

During the third quarter we have seen strong liquidity and improved strategic positioning despite a softening in short term trading driven by increasing COVID-19 cases with further higher travel restrictions imposed by some governments. Revenue Margin in the third quarter of fiscal year 2021 was down 77% year-on-year (-80% in the nine months of fiscal year 2021 vs the nine months of fiscal year 2020), due to Bookings being down 65% (-72% in the nine months of fiscal year 2021) and reduction in Revenue Margin/Booking driven by lower average basket value of Bookings due to COVID-19, which results in lower classic and diversification revenue from customers and lower revenue from providers.

Our focus has been on what we can control, which is to continually build and further enhance a high quality and adaptable business model. This is demonstrated by our Marginal Profit in the third quarter (Revenue Margin minus Variable Cost), being €6 million positive for the third quarter of fiscal year 2021 despite us investing around €1.3 million in our call centre to help our customers over and above that already expensed in the second quarter of fiscal year 2021. Adjusted EBITDA was a loss of €10.4 million.

Our revenue diversification initiatives continue to develop. Product Diversification Ratio and Revenue Diversification Ratio continue to grow and have increased to 89% and 55% in the third quarter, up from 82% and 51% in the third quarter last year, rising 7 and 4 percentage points in just one year.

Prime is performing strongly in a weak market. Prime subscription rates and share of total Bookings continue to grow. The number of subscribers have increased to 758,000 members, 268,000 more than in the third quarter of fiscal year 2020, Prime share reached 37%. We now operate Prime in flights and hotels in five of our largest markets Spain, Italy, Germany, France and the UK. Additionally, mobile bookings continue to grow and accounted for 58% of our total flight bookings in the third quarter of fiscal year 2021, rising 13 percentage points from the third quarter last year.

Adjusted Net Income was a loss of €23.1 million in the third quarter of fiscal year 2021 (a loss of €65.9 million in the first nine months of fiscal year 2021), we believe that Adjusted Net Income better reflects the real ongoing operational performance of the business.

In the third quarter of fiscal year 2021, despite increasing travel restrictions, net cash from operating activities improved by €31.4 million and we end the quarter in Cash Flow before Financing positive of €13 million, for the first time since the fourth quarter of fiscal year 2019, mainly due to a working capital inflow of €29.9 million in the third quarter of fiscal year 2021 due to high variability and good cost management, working capital inflows due to due to higher volumes and gross sales, better collection from suppliers, refunds collected and Prime deferred revenue increase, and we also benefited from lower income tax paid. The Group continues to have a strong balance sheet, maintaining in the third quarter a solid liquidity position of €125 million at the end of December, €109 million undrawn from our Super Senior Revolving Credit Facility ('SSRCF') and €15 million new Government sponsored loan, placing us in a position of strength when normal trading conditions return.

Unsurprisingly, leverage ratios have been impacted. On the 21st of April we announced that successful discussions with our lenders resulted in the single covenant of our SSRCF Gross Leverage Ratio being waived for fiscal year 2021, achieving further financial flexibility to the group.

Furthermore, in July we have reduced the use of our SSRCF by €54.5 million, proving once again the strength of our financial position.

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Business review by geography

We operate five leading brands eDreams, GO Voyages, Opodo, Travellink, and the metasearch engine Liligo. We have a strong presence in 45 markets, covering 80% of the total travel market through 251 websites and apps in 20 languages and 36 different currencies on one central platform.

The top 6 markets (France, Spain, Italy, Germany, United Kingdom and the Nordics) recorded €21.7 million in revenue margin in the third quarter of fiscal year 2021. Revenue diversification by geography remains stable.

In summary

Our business is strong, and we are positioned to come out a winner from the crisis.

We have a strong liquidity position of €122 million at the end of January, including no short-term financial debt payments and our Senior Notes, new Government Sponsored loan, and bank facilities due in 2023.

Prime subscription program is growing well. Even in challenging market conditions we have added 94k new subscribers just in the third quarter and 37% of our Bookings are now through Prime.

Our business remains financially strong. We remained marginal profit positive and we have kept our teams intact and motivated, so we can take maximum advantage when restrictions are lifted and continue to build for the future.

eDreams ODIGEO is agile and nimble, which allows us to adapt quickly as necessary. We continue to lead through product development and innovation, such as Prime, mobile, customer management and are leading the transformation of the leisure travel industry.

We continue to build and offer innovative solutions, take care of our customers, and are better positioned and ready to seize market growth as travel restrictions are lifted.

-ENDS-

About eDreams ODIGEO

eDreams ODIGEO is one of the world's largest online travel companies and one of the largest e-commerce businesses in Europe. Under its four leading online travel agency brands - eDreams, GO Voyages, Opodo, Travellink, and the metasearch engine Liligo - it serves more than 17 million customers per year across 45 markets. Listed on the Spanish Stock Market, eDreams ODIGEO works with 667 airlines and has partnerships with 130. The brand offers the best deals in regular flights, low-cost airlines, hotels, cruises, car rental, dynamic packages, holiday packages and travel insurance to make travel easier, more accessible, and better value for consumers across the globe.