BARCELONA, Spain, April 21,
2020 /PRNewswire/ -- eDreams ODIGEO ('eDreams' or
'the Group'), one of the world's largest online travel companies
and one of the largest e-commerce businesses in Europe today provides an update on its strong
financial and liquidity position and its actions taken in response
to COVID-19 virus. The spread of COVID-19 is having a tragic
human cost and a very significant impact across the global travel
industry. However, prudent management actions since the beginning
of the crisis have secured the Group's position to ensure a rapid
return to full operational effectiveness once normal activity
resumes.
Prior to the crisis, eDreams had been performing well and
growing strongly utilising its leading position in flights and
sustainable scale advantages in an attractive marketplace. Due
to the strong business model, bookings in December 2019 were up 11% year-on-year and
continued to grow significantly in January and early February
before the crisis took hold, which is expected to result in a
highly respectable 3% decline in bookings for FY20, despite a
reduction in bookings of around 70% in the last month of
FY20. The business is proven to be resilient with 80% of costs
variable together with a well-diversified product portfolio, scale
and geography.
Since 20th January, the public announcement of the COVID-19
outbreak in China, significant
steps have been taken:
- To conserve cash and emerge from the crisis in a very strong
position, the cost base has been reduced and operations reorganised
whilst the COVID-19 situation continues to enable the Company to
protect all employee's jobs.
-
- eDreams has already executed savings of 23% vs the Fixed Cost
executed in 3Q FY20 mainly due to reductions in personnel costs,
gross IT, external fees and travel expenses. This percentage
increases to 25% once eDreams factor in the impact of the capex
savings. Already implemented measures are expected to
decrease its annualised cash needs by c.€28m vs 3Q FY20
levels.
- eDreams has taken advantage of Government support (ERTE),
for which they are grateful, with staff payroll costs
temporarily reduced by 20% for most non-customer facing
staff.
- All capex, opex and external costs have been reviewed and
negotiations have successfully been held with suppliers.
- Management has always adopted a prudent approach to its cost
base and capital expenditure and, with the benefit of its cash
generative model has maintained a strong financial position.
-
- Stress tests have been carried out assuming significant
reduction in bookings from now until last week of February 2021 (i.e. no recovery) and there are no
debt repayments due until 2023. Interestingly, eDreams
is seeing significant evidence of loyalty to its brands
and therefore the scenario planning may well be proven in
the future to be too prudent.
- Despite the reduction in bookings of around 70% in March 2020, the group continues to have a strong
balance sheet, with current liquidity position of c.€140m at the
end of March, placing us in a position of strength as soon as
normal activity resumes.
- Moreover, today eDreams announces that successful
discussions with the lenders have resulted in its Super Senior
Revolving Credit Facility ("SSRCF") only covenant of Gross Leverage
Ratio being waived for Fiscal Year 2021, achieving further
financial flexibility for the Group. Interest on the SSRCF and the
2023 Senior Notes will continue to be paid as usual.
Management remains focused on continuing to take the right
actions to maintain its cash and liquidity position, retaining its
team members throughout and ensuring the business is primed to
welcome customers back once it is safe for restrictions to be
lifted. The Group has extremely strong products, services and
customer relationships that will allow it to grow significantly
when the activity returns.
Dana Dunne, CEO eDreams ODIGEO
said:
"This is a challenging moment for all countries, industries
and above all us as individuals. eDreams ODIGEO is a very strong
company both financially and culturally and the waiver of covenant
by the SSRCF lenders demonstrates that. We have continually managed
the business prudently, which has put us in the position to see
through these challenging times. We believe that through these
situations there are opportunities and the company has been
focusing on being in an even stronger position once the market
returns."
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
18 million customers per year across 46 markets. Listed on the
Spanish Stock Market, eDreams ODIGEO works with over 665 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.
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SOURCE eDreams ODIGEO
