Amadeus IT Holding, S.A. and Subsidiaries - Investor relations at ...

AMADEUS IT HOLDING, S.A. AND SUBSIDIARIES
DIRECTORS’ REPORT FOR THE YEAR ENDED DECEMBER 31, 2011
Middle East and Africa. We are therefore attractively positioned to benefit from the higher
than average growth in such regions.
Competition in our Distribution business is strong, and some actions from our competitors
could have an impact on our market share or cost base. In 2012, we aim to reinforce our
leading position worldwide. We will be consistent in executing our strategy, continue to focus
on regionalisation and develop a wide array of distribution and technology solutions to help
our customers adapt to the fast changing travel industry. During 2012 we will also continue to
focus on the successful renegotiation of certain of our content agreements, in particular with
some US majors.
Our IT Solutions business will continue to grow in 2012. We will focus on delivering
successful migrations, with at least 5 airlines scheduled to migrate to our Altéa Reservations
and Inventory Systems, and more than 10 airlines scheduled to migrate to Departure Control
Systems (DCS). We also aim to convert client prospects into new Altéa contracts to support
revenue visibility, and to continue to work on the expansion in our product portfolio, in order
to increase our future revenue potential. We will also invest in our products to continue to
support our clients’ business with leading-edge technology.
Obtaining high levels of profitability is a key target for the company. As such, we will continue
to apply the necessary actions to maintain a high level of operating efficiency. We will also
actively promote cross-selling between our business lines and up-selling of our existing
products, to ultimately maximise customer profitability.
Client satisfaction is a priority for Amadeus, and in 2012 we will continue to reinforce our
client centric approach, with the aim to ensure high levels of client satisfaction across our
businesses.
It is our objective to preserve our strong cash flow generation and sound financial position.
We aim to continue deleveraging our balance sheet, with a stated target of 1.0x - 1.5x net
debt / EBITDA ratio as of December 2012.
Finally, we will use part of our cash flow generation to remunerate our shareholders: a
dividend pay-out of 35% of the 2011 Net profit for the period (adjusted for extraordinary IPO
expenses) will be paid in 2012.
7.2 Research and Development Activities
The research and development policy (R&D) for the Group is a relevant tool to obtain
competitive advantage, to increase efficiency and to improve the Amadeus System
functionality as well as to reduce the maintenance and operating costs.
The constant process of modernization that the Group performs to its systems requires that
the R&D center located in Nice continuously develops products using the latest state-of-theart
technology available.
During the year ended December 31, 2011, Amadeus has expensed €172,1 million for R&D
activities and capitalized €195.1 million (after deducting incentives from research activities),
while during the previous year 2010, the amounts were €253.4 million and €169.6 million,
respectively.
Amadeus keeps on investing to improve administrative products targeting multinational
Travel Agencies. These products have as their main objective the automation of the
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