Amadeus - Overview - Investor relations at Amadeus

Amadeus - OverviewAmadeus IT Group is a leading transaction processor for the global travel and tourism industry, providing advanced technology solutions toour travel provider and travel agency customers worldwide. Amadeus acts as an international network providing comprehensive real-timesearch, pricing, booking, ticketing and other processing solutions to travel providers and travel agencies through our Distribution businessarea, and we offer other travel providers (today, principally airlines) an extensive portfolio of technology solutions which automate certainmission-critical business processes, such as reservations, inventory management and departure control, through our IT Solutions businessarea.Customer groups include providers of travel services and products such as airlines (network, domestic, low-cost and charter carriers), hotels(independent properties and chains), tour operators (mainstream, specialist and vertically integrated players), insurance companies, road andsea transport companies (car rental companies, railway companies, ferry lines, cruise lines), travel sellers and brokers (offline and onlinetravel agencies) and travel buyers (corporations and travellers).Amadeus operates under a transaction-based business model that offers IT solutions to virtually all players in the travel industry. TheAmadeus system processed 948 million key billed travel transactions 1 in 2011, an 11.5% increase over 2010. Amadeus has central sites inMadrid (corporate headquarters), Nice (product development) and Erding (operations – data processing centre) and regional offices in Miami,Buenos Aires, Bangkok and Dubai. At market level, Amadeus maintains customer operations through 73 local Amadeus CommercialOrganisations (ACOs) covering 195 countries. The Amadeus group employs over 10,000 people worldwide, with 123 nationalitiesrepresented at the central offices. Amadeus is traded on the Spanish Stock Exchanges as of 29 April 2010 [AMS].Overview of the company's business and activitiesOperating since 1992, Amadeus commenced as a global distribution system with the mission to connect providers' content with travelagencies and consumers in real time. These distribution activities resulted in the provision of an advanced IT network as well as systems andsolutions ensuring round-the-clock reliable and efficient transactions for the global travel industry in a stable and rigorous environment.Progressively and in line with industry evolution, Amadeus diversified its operations by focusing on information technologies (IT) to deliverservices spanning beyond sales and reservation functionalities, centred on streamlining the operational and distribution requirements of itsdiverse customer base. The transition from distribution system to technology provider was reflected by the change in its corporate name in2006, when the company name was changed to Amadeus IT Group. Today, Amadeus's technology offering is present and active in everystep of the travel process.JourneyTrip Planning &PricingBooking &TicketingChangeTicketingCheck-in &boardingOn the movePost-tripAmadeus has turned innovation into its growth driver, placing itself at the forefront of technology development for the travel sector. Since2004, the company has invested over Euro 2 billion in R&D. Amadeus's technology has increasingly embraced open systems which provideclients with greater flexibility and features, as well as competitive, functional and operational benefits. Today, 85% of its software portfolio isopen system based.Its business is structured around two key related areas - Distribution and IT Solutions, which generate significant synergies.Travel providersTravelagenciesTravelbuyersAirlinesHotelsRailway operatorsDISTRIBUTION BUSINESSProvision of indirectdistribution servicesCommon /overlappingplatforms &applicationsCommon datacentreOnline andoffline travelagenciesConsumers/GeneralpublicCar rentalTour operatorsCruise and ferriesIT SOLUTIONSincluding direct distributiontechnologyCommoncustomersCommonsales &marketinginfrastructureCorporatetraveldepartmentsInsurance companiesDistributionAmadeus is the largest GDS provider serving the worldwide travel and tourism industry, with an estimated marketshare of nearly 38% in 2011 2 . Amadeus holds #1 position in travel distribution in Western Europe and Central,Eastern and Southern Europe, as well as in faster growing emerging regions such as the Middle East and Africaand the Asia Pacific region. This solid position permits Amadeus to offer extensive distribution reach for global andlocal travel content. The Amadeus system is used by travel agencies worldwide - both offline and online and byairline sales offices, who use Amadeus as their internal sales and reservations system. Today, Amadeus givesaccess to bookable content from more than 420 airlines (including over 70 Low Cost Carriers), 30 car rentalcompanies (representing over 35,000 car rental locations), 22 cruise lines, an accumulated inventories of over250,000 hotels, 206 tour operators, 102 rail operators and 23 travel insurance companies with a wide range of localaffiliates.The distribution business also encompasses a broad range of related services and IT solutions for both providersand travel agencies. This includes, for example, new functionalities in its distribution platform for airlines whichpermits to maximize their income and sell ancillary services, as well as to facilitate the booking of other content suchas hotels, car rental, rail or cruises; specific reservation solutions for flights, hotels, car rental and cruises;TA Book i ngs600( mi ll i ons)500 428 43146444241340066 67596161300200 362 364 352 382 40210002007 2008 2009 2010 2011Air Non-airGlobal M arket Share37% 38%40%29%30%26%20%10%0%2000 2004 2010 20111 Key Billed travel transactions include air & non-air travel agency bookings, passengers boarded (PBs) & e-commerce passenger name records PNRs2Based on air travel agency bookings processed by the international GDS providers according to our own estimates based on publicly available information

Amadeus - Overviewmanagement solutions for corporate travel policies and fare search engines for both traditional and online travel agencies.IT SolutionsThe principal service of this business area is Amadeus Altéa Customer Management System (CMS), a new-generation customermanagement suite which addresses airlines' mission-critical operating functions: sales and reservations, inventory management anddeparture control. Altéa CMS is complemented by Altéa e-commerce.Amadeus Full Altéa Suite(PSS)InventoryAirline operations atairport(Departurecontrol)e-commerceReservationAirline ITOther airline ITGlobal ServicesRevenue integrity,e-ticket serverAirline Contracts 144Altéa Reservation only (System User)Altéa Reservation & InventoryOther IT solutionsHotel ITRail ITAirport ITNon-air22122100Altéa Departure ControlAirlines implement Altéa’s systemsone after the other.Unlike the carriers’ legacy IT systems, which use differenttechnologies, the Altéa platform is based on a common technicalinfrastructure and software, making it an industry first. With Altéa,airlines outsource their operations onto a community platform whichdelivers superior operational efficiency and allows them to shareinformation with both airline alliance and code-share partners.Our Altéa suite presently consists of four main modules:(i)(ii)Altéa Reservation, that enables our airline customers tomanage all their bookings, fare prices and ticketing through asingle interface and is compatible with distribution via directand indirect channels, both online and offline,Altéa Inventory that permits airline to create and manageschedules, seat capacity and associated fares on a flight-byflightbasis,(iii) Altéa Departure Control covers many aspects of flightdeparture, including check-in, issuance of boarding passes,gate control and other functions related to passenger flightboarding, and(iv) Altéa e-commerce, a suite of solutions that seeks to improvethe profitability and efficiency of the airline e-commerce salesand support process.Altéa represents an enormous business potential for Amadeus, which serves the airlines present andfuture needs in the current industry environment: cost reduction, including technology-related spend;improved customer-passenger service; and revenue optimisation. The Amadeus Altéa programmeultimately ensures the delivery of much more sophisticated IT services than airlines could have affordedby themselves and at a lower and variable cost. In-house maintenance and development of IT systemsfor these functions is becoming an increasingly heavy burden, even for large carriers.In 2011, the number of passengers boarded by airlines using Amadeus Altéa was 439 million.Altogether the over 120 airlines contracted for Amadeus Altéa Reservations & Inventory will representmore than 750 million PB annually by 2014 3 . Based on Amadeus’ estimates, these contracted clientsrepresented circa 30% of traffic in 2010 4 .Passenger B oarded ( PB s)Amadeus is furthering and extending its IT solutions business with the ongoing development of similar systems for rail companies, hotelchains – with the launch in 2010 of the Amadeus Hotel Platform – airport operators and ground handling companies.4003002001000124193(millions)2383724392007 2008 2009 2010 2011Financial highlightsManagement team3,0002,000R evenue(EUR millions)2,578 2,505 2,461 2,594 2,70712001000800600EB ITD A(EUR millions)868 874 8949761039• Luis MarotoPresident & CEO• Hervé CouturierExecutive Vice President, Development• Eberhard Haag,Executive Vice President, Global Operations1,00002007 2008 2009 2010 2011Shareholding structureAs of 20 November 201240020002007 2008 2009 2010 2011• Tomás López FernebrandSenior Vice President, General Counsel & Corporate Secretary• Sabine Hansen PeckSenior Vice President, Human Resources, Communication &Branding• Ana de ProChief Financial Officer• Julia SattelSenior Vice President, Airline IT• Holger TaubmannSenior Vice President, Distribution• Francisco Pérez-LozaoSenior Vice President, New Businesses32014 estimated annual PB calculated by applying the IATA’s regional air traffic growth projections to the latest available annual PB figures4Calculation based on total air traffic (source IATA) excluding Chinese carriers and charter airlines