BARCELONA, Spain, Feb. 23, 2023 /PRNewswire/ — eDreams ODIGEO (‘eDO’), Europe’s largest online travel company, the largest globally in terms of flights outside of China and one of the largest European e-commerce businesses today reports its results for the third quarter period ended 31st December 2022.
eDO continues to perform strongly and outperform the industry and its peers. Prime, eDO’s subscription programme, has continued to grow, reaching over 4.2 million members in February 2023[1]. Additionally, as the membership of Prime matures the profitability of eDO increases driven by its loyal customer base and a recurring revenue stream from renewing members which delivers predictable and sustainable customer relationships.
eDO remains focused on the fastest-growing segment of the travel industry – leisure travel – which has seen rapid recovery since the pandemic, characterised by the consumers’ innate desire to travel. The Company is increasingly confident that its self-set targets for the fiscal year 2025 will be met – these include reaching over 7.25 million subscribers, an ARPU of approximately €80 and Cash EBITDA in excess of €180 million.
– Strong performance with significant improvements in profitability
- The business delivered a strong improvement in profitability, mainly due to the increasing number of Prime members renewing their memberships. As guided, the maturity of Prime members is the most important driver for profitability.
- Cash Marginal Profit Margin(*) increased by 8pp to 29% in the third quarter of the fiscal year 2023, from 21% in the first quarter.
- Cash EBITDA Margin(*) also achieved very substantial improvements in the third quarter of the fiscal year 2023, reaching 16.0% compared to 8.8% in the first quarter. Excluding a one-off foreign exchange positive impact, Cash EBITDA Margin stood at 14.6%, still well above the first and the second quarter. As guided in the first quarter, strong growth in year-1 Prime members delayed profitability as it improves from year 2 onwards.
- Revenue Margin increased by 59%, to €419.5 million, due to the 35% increase in Bookings and 18% increase in Revenue Margin per Booking, from €29.5 per Booking in the first nine months of the fiscal year 2022 to €34.7 per Booking in the same period of the fiscal year 2023, mainly driven by an increase in diversification and classic customer revenues. Cash Revenue Margin increased 55% compared to the same period last year. Revenue Margin and Cash Revenue Margin exceeded pre-COVID-19 levels by 2% and 10%, respectively.
- eDO Bookings performance continues to be materially better than the market. In the first nine months of the fiscal year, the Company reached 12.1 million Bookings, representing 35% above the fiscal year 2022 and 45% above pre-COVID-19 levels. The strong performance in Bookings was achieved despite the industry moving to more normalised seasonality patterns, the conflict in Ukraine, the global increase in inflation, and recent industry disruptions.
- In the first nine months of the fiscal year 2023, the Company outperformed the regular airlines by 63 percentage points and Low-Cost carriers by 42 percentage points.
- As guided, the Company is progressing with the strategic expansion of its global workforce, which will grow by 50% by 2025 to further support its long-term growth as a subscription business. The higher personnel costs associated with this recruitment drive, coupled with higher variable costs associated with the notable increase in trading and higher acquisition costs due to the investment to acquire new Prime members, drove the bottom-line result.
– Prime continues to prove highly successful: subscribers grow by 81%
- eDreams ODIGEO is becoming a higher quality business with the pivot to subscription. In the third quarter of the fiscal year 2023, the Company reached 3.9 million subscribers. This represents an 81% increase vs the same period last year, despite the industry moving to more normalised seasonality patterns in terms of travellers booking their holidays, and the period October-December being the seasonal lowest.
- Year-to-date, Prime has delivered 427,000 average Net Adds[2] per quarter, which continues to be well above the 364,000 run rate average needed to hit the Company’s self-set target of reaching 7.25 million members by 2025.
- Lower net adds in the third quarter of the fiscal year 2023 are influenced by seasonality, as fewer people are looking to book travel at this time of the year. The fourth quarter is high seasonality and the current run-rate of the first 6 weeks of the quarter has delivered 27% more net adds than in the third quarter.
Dana Dunne, CEO of eDreams ODIGEO commented: “With every quarter that passes it becomes even clearer that our business model is uniquely positioned for long-term success. We have continued to deliver solid growth, making eDO a significantly stronger business even in the context of the external headwinds that our industry has had to weather – from a pandemic to a conflict in Europe or macroeconomic concerns.
Key to our unrivalled competitive advantage is Prime, which continues to disrupt the global travel market and has now reached another historic milestone by exceeding the 4 million-member mark. We have achieved consistent fast subscriber growth with net membership additions running significantly ahead of our required rate to meet our self-set target of 7.5 million by FY2025.”
Financially, we are just beginning to reap the benefits of our rapid growth. Our profitability has increased markedly and will continue to do so as the Prime membership matures with more renewals and lower acquisition costs, ultimately making eDO a much higher-quality business. Our bookings remain strong and continue above pre-pandemic levels, all in a market that is progressively returning to its normal seasonality patterns.
eDO operates in a vast market and in the largest e-commerce vertical, strategically positioned in the leisure segment, and with significant potential and attractive growth prospects that will drive superior returns for our shareholders.”
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[1] As of February 15th 2023.
[2] Net adds: Gross adds – Churn.
SOURCE eDreams ODIGEO
