Strong liquidity position of c.€140m at FY20 close and SSRCF covenant waiver to give competitive advantage when restrictions lifted

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 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 our 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. Our business is proven to be resilient with 80% of costs variable together with a well-diversified product portfolio, scale and geography.

Since the 20 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. 
  
  1. We have 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 we factor in the impact of the capex savings. Already implemented measures are expected to decrease our annualised cash needs by c.€28m vs 3Q FY20 levels.
  2. We have taken advantage of Government support (ERTE), for which we are grateful, with staff payroll costs temporarily reduced by 20% for most non-customer facing staff. 
  3. 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, we are seeing significant evidence of loyalty to our brands and therefore our scenario planning may well be proven in the future to be too prudent.
  
  1. 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. 
  2. Moreover, today we announce that successful discussions with our lenders have resulted in our 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.