eDreams ODIGEO S.A. (EDR) Earnings Call Transcript & Summary

Good morning, everyone, and thank you all for joining us today for our second quarter fiscal year 2022 results presentation for the 6 months ending 30 September 2021. I am David Elizaga, CFO at eDreams ODIGEO. As always, you can find the results materials, including the presentation and our results report, on the Investor Relations section of our website. I would like to inform you that later today, we host our Investor Day, which starts right after this call via webcast. So if you're interested in joining, please send an e-mail to [email protected], and we will send you the relevant link. Because we will be spending the whole afternoon doing a deep dive on our strategy and Prime, this presentation is focused solely on the results of the past quarter and first half of the financial year, and we kindly ask that in the Q&A session of this call, you only raise questions on the financial results. For all other strategic questions, please raise them in the afternoon session of the Investor Day or if you're not joining the afternoon session, then please contact us afterwards. I will now pass you over to Dana Dunne, our CEO, who will take you through the first part of the presentation.

Thank you, David, and good morning, everyone. And thank you for joining us today. I'm pleased to share with you today once again our excellent results and our strong prospects for the future. The continued trading outperformance over the last quarters is the result of the hard work on building strong, unique business. We believe that we are reinventing travel and are at the forefront of the innovation that is enhancing and changing the way travel is consumed through a really attractive customer proposition. I'll now take you through the key points of our most recent results, and then I will hand back to David Elizaga, our CFO, who will take you through in detail our performance, as outlined in our financial statements. I will then conclude today's presentation with some closing remarks. Please turn to Slide 4, which is a summary of our performance to date for this financial year. Overall, we have achieved very strong bookings growth, which are well ahead of pre-COVID-19 levels since June, and Prime added another 0.5 million members in 3 months. During this period, we became EBITDA positive again, both including and excluding Prime fees. Some of the key highlights for today's presentation are: one, our strong bookings growth, which is well ahead of pre-COVID levels. In the second quarter of this fiscal year, bookings were 22% above pre-COVID-19 levels. Bookings in the first half of this financial year is only 1% below pre-COVID-19. June bookings surpassed the pre-COVID-19 levels, and since then, trading has continued to improve with year-on-year growth rates for bookings versus pre-COVID-19 levels accelerating. September was plus 33% versus 2019. October, plus 42%. And November, as of the 10th, plus 53%, again, versus 2019. Two, rapid recovery. Despite the COVID-19 impact, the second quarter of FY '22 has shown encouraging signs of a market recovery, particularly in leisure travel, where eDreams ODIGEO has a leading market position. Revenue margin in 2Q FY '22 increased 190% versus the same period last year, following bookings increased 222%. The effect of COVID-19-induced restrictions resulted in cash revenue margin still being 18% below pre-COVID-19 levels, including the full contribution from Prime in the second quarter of FY '22. Cash marginal profit stood at EUR 30.7 million positive in Q2 of this financial year, and EUR 49.2 million for the entire first half of the year. Cash EBITDA was EUR 16.2 million positive in the second quarter FY '22. This is 5.3x the amount in Q1 of FY '22. It was EUR 3.1 million in the first quarter FY '22, totaling EUR 19.4 million in the first half FY '22. And our strong liquidity position, it increased to EUR 144 million at the end of September. Three, Prime is reinventing travel and delivers superior returns while transforming the industry because we are the leader and inventor of the first and highly successful subscription-based model in travel. We grew Prime members by 159% to 1.7 million subscribers in the 12 months through to September 2021, and almost 2 million members as of mid-November achieved much earlier than the accelerated target of summer 2022. This means that we added almost 1 million members in the last 6 months in a COVID-affected market. Prime is more loyal and derisked consumer base and more predictable and sustainable business model. Four, we strongly believe we are a clear winner in post-COVID world because Prime delivers a unique relationship based rather than transactional-based model with customers. We have a unique and unrivaled scale advantage and now #1 in the world in retailing flights, if we exclude China. Our market share in Europe grew by 6 percentage points to 37% last year, extending our leadership. We have an ever increasingly balanced business with diversification revenue of 67%, up 11 percentage points year-on-year. And bookings for mobile devices in excess of 55% remains market leading, while the average of the industry is around 37%. Before I go through a more detailed points I've just mentioned, I would like to inform you that in today's CMD presentations, we plan to disclose FY 2025 targets and a new set of reporting KPIs around Prime to make it easier for our progress to be measured. Returning to our presentation. If you can please turn to Slide 5, in which I will update you on our current trading. Our current trading demonstrates the rapid recovery from COVID-19 with best-in-class performance, driven by the consumers' desire to travel and our Prime program. In fact, since June, our bookings have grown above pre-COVID-19 levels every month for the past 6 months, despite operating in a market which has not fully recovered. As we have repeatedly said, consumers want to travel. The rebound from the pandemic has only reconfirmed this. As and when restrictions are lifted, uncertainty eased, consumers return with confidence, and we are there for them with a superior proposition, superior strategy and superior business model. This is reflected in our numbers. The company's booking levels over the past quarter have shown continuous improvement. Bookings in April were minus 51% compared to the same period of 2019. May showed strong improvement with bookings reaching minus 22%. In June, bookings improved further to surpass pre-COVID-19 levels with positive single-digit average growth rate of 2%. Since July, trading continues to improve, and year-on-year growth rates for bookings versus pre-COVID-19 levels have been accelerating. September was at 33% above 2019. October, 42% above and November, till the 10th of November was plus 53% versus 2019. Please turn to Slide 6. As evidenced by IATA public data, you can see that we continue to outperform the market. Our trading suggested an outperformance against the airline industry, both regular and low-cost carriers and growth of market share versus supplier direct. This is due to better quality, more comprehensive content and flexibility and a focus on leisure travel. This slide shows eDO's overall performance versus IATA in Europe, where on average during fiscal year 2021, eDO has been 13 percentage points ahead of supplier direct in Europe. The most recent IATA numbers from the first quarter and second quarter of FY '22 suggests our performance has extended further to 52 and 74 percentage points, respectively. While there may be some seasonality and some timing differences between booking date and departure date, the message is clear that we continue to outperform. Please turn to Slide 7. In this slide, I'm pleased to share with you the very positive results we have achieved in our subscription program Prime. If you remember, in late May, I shared with you an important milestone. eDO had surpassed the 1 million member mark. In the 6 months since then, eDO has almost surpassed the 2 million member mark. Our original target to achieve 2 million members was in 2023. We revised this target and set by the end of summer 2022. And now yet again, we have overachieved our targets. This growth in members means that we are adding over 0.5 million members every 3 months, and in a market that has not fully recovered. As you know, eDreams ODIGEO is the leader and inventor of the first subscription-based model in travel. Over the past year -- sorry, over the past 4.5 years, we have invested a lot of time and resources in testing and developing our unique subscription offering into the successful product that it is today. During the pandemic, while others were cutting back, we have continued to invest and develop Prime and have seen remarkable results. The customer take-up is very strong, and it has enormous future potential. And we transition our business from a riskier transaction-based business to a much more appealing relationship, subscription-based business that has strong growth prospects. In the past 12 months, our membership grew by 159% to 1.7 million members at the end of the second quarter of FY '22. 39% of our flight bookings derived from Prime members, indicating the benefit that members accrue from the program, and we are almost at our 2 million subscriber target well ahead of schedule. As I said, our future is bright, and we have a very strong proposition for customers. We will be doing a deep dive on Prime today at our Capital Markets Day. So feel free to join us for that. Please turn to Slide 8, in which we cover our diversification KPIs. Overall diversification revenue continues to improve and is the largest contributor to our revenues. Product diversification ratio and revenue diversification ratio have continued to improve. The product diversification ratio increased from 80% in the second quarter FY '20 to 89% in the second quarter FY '22, a 9 percentage point improvement in 2 years. Similarly, the revenue diversification ratio increased from 48% to 67%, a 19 percentage point improvement again in the same 2-year period. We continue to believe that Prime is a key consumer offering in which we continue to evolve to a full service, one-stop shop to the consumer. And this allows us to be confident of further share of wallet growth in the future. Please turn to Slide 11, which demonstrates the progress made against our 2 other KPIs. We continue to lead the travel industry and mobile innovation and have again stood out extending our market leadership further. In the last 2 years, bookings through mobile, a top priority for us and a major focus, have risen exponentially from 41% of our total flight bookings to now 55%. The shift to online and specifically mobile accelerated by the pandemic leaves us in an optimal position to take advantage of future demand. Let's now look at the changes to the acquisition cost per booking index, which reduced by 16 percentage points year-on-year, driven by the adaptability and flexibility of our business. As guided, the very low level we had in the past 12 months was not sustainable for the long term. As travel restrictions ease and consumer demand increases, we expected to spend more on online marketing, and therefore, this ratio will trend back to more normalized levels. However, if we do compare the second quarter of FY '22 with the second quarter FY '20, we still show an improvement of 7 percentage points. Now I'll pass you to David, who will discuss in more detail our financial results.

Thank you, Dana. If you could all please turn to Slide 11 of the presentation, I will take you through the financial results in more detail. Despite the COVID-19 impact, the second quarter of fiscal '22 has again shown encouraging signs of a rapid recovery. Revenue margin in the second quarter increased 190% versus the same period of last year due to bookings being up 222%, and a reduction in revenue margin per booking of 10% versus fiscal '21, mainly due to a change in bookings mix with more weight of low-cost carriers. I remind you that COVID-19-induced restrictions still resulted in the average basket value to remain 36% below 2019 levels, around EUR 300. As a disproportionate number of consumers due to continued uncertainty, our booking short-haul or with less passengers per booking or at the date closer to departure or for shorter trips in number of days and destinations. All those are variables that influence on the lower average basket value. This resulted in revenue margin being 41% below pre-COVID-19 levels in the second quarter that we just published. We expect that when travel patterns return to normal, this will impact positively in revenue margin per booking and anticipate an increase from current level. In fiscal '21 and '22, our focus has been on what we can control, which is improving our business and building on our strengths, including Prime. This is demonstrated by our cash marginal profit, that is the cash revenue margin minus variable cost, being EUR 30.7 million positive for the second quarter and EUR 49.2 million for the first half of the year. Adjusted EBITDA in the quarter was also EUR 2.7 million positive, the first time since March '20 and cash EBITDA, which is the EBITDA with the full Prime contribution, was EUR 16.3 million positive in the second quarter. That is more than 5x the amount in the first quarter, which was EUR 3.1 million, totaling EUR 19.4 million in the first half of our fiscal year. Adjusted net income was at EUR 12.2 million loss in the quarter. Please turn to Slide 12 of the presentation. With Prime subscription growing so strongly, it is important and timely to focus on a broader disclosure of the accounting impact caused by it. In fiscal '21, the increase in deferred revenue, driven by Prime for the whole year, amounted to EUR 10.7 million, and that was a 91% increase year-on-year. In this second quarter of fiscal '22, this growth has accelerated, driven by strong growth in Prime members. We have 781,000 new members more than in the same period of last year, and that amounts to EUR 18.6 million in a single quarter versus EUR 10.7 million in the whole year in the previous fiscal year. This amount is expected to continue to increase as Prime members continue to rise. This results in an amount of cash revenue margin and cash EBITDA not recorded in our P&L. Thus, we believe it is important to focus on an ongoing basis, on our cash revenue margin and cash EBITDA with a full Prime contribution to reflect the full impact on the year of value created in the form of Prime fees collected, but not yet accrued from customers during the year. As a result of the positive contribution from Prime, we're very pleased to say that cash EBITDA with the full Prime contribution was EUR 16.3 million positive in the second quarter of fiscal '22. Turning now to Slide 13. I will take you through the cash flow statement. In the second quarter of fiscal '22, despite continued travel restrictions, net cash from operating activities improved by EUR 41 million versus the same quarter of last year. And we ended the quarter with positive cash flow from operations of EUR 27 million, following a working capital inflow of EUR 26.4 million. The improvement versus the same quarter of last fiscal year was driven by better EBITDA performance and better volumes as well as by the increase in the Prime deferred income. The group continues to have a strong balance sheet, maintaining a robust liquidity position of EUR 144 million at the end of September, including EUR 36 million of cash as well as EUR 108 million undrawn from our super senior revolving credit facility. This places us in a position of strength for the low seasonality period until December. In addition, I will add that on the 29th of October, the group reimbursed EUR 10 million of the revolving credit facility. We have used EUR 6 million of cash in the second quarter for investments. That's an increase of EUR 1.6 million on fiscal '21. As last year, we implemented cost-saving measures to minimize the temporary impact of COVID-19, and in fiscal '22, we had an increase in capitalized software. Cash used in financing amounted to EUR 32.4 million compared to EUR 53 million from financing activities in the same period of last year. The variation by EUR 20 million in financing activities mainly relates to the repayment of EUR 55 million of the super senior revolving credit facilities, partly offset by the drawdown in full of the EUR 15 million government-sponsored loan in the previous year and the repayment of EUR 19 million in the revolver in the second quarter of this year. I will now turn the presentation back to Dana to do the closing remarks.

Thank you, David. Turning to Slide 15. Let me conclude by giving you some closing remarks. Overall, I'm pleased to say that we continue to outperform the market, gaining market share. In the past 6 months, we have been continually above pre-COVID-19 levels with the more recent months at plus 30% to 50%. Our customer proposition is unique and very compelling for consumers. In Prime, we continue to add more customers, having added over 1 million customers in the past 6 months and are today almost at 2 million subscribers. Economically, for eDreams ODIGEO, Prime changes the relationship we have with customers from transactional to repeat customers, which lowers the cost of the ongoing customer reacquisition, i.e., marketing costs and allowing further investment in flight and non-flight products to delight and secure more customers. In practice, this means we are becoming a subscription business. Already today, we have almost 40% of our bookings coming from Prime subscribers, and this will continue to grow. With the return of leisure travel, the opportunity is very large for us. With a proven proposition, proven economic model and a large total addressable market, this provides a large opportunity like other subscription-based businesses. In today's Capital Market Day, we will discuss in more detail this as well as our FY '25 targets and new reporting KPIs. Again, if interested, please contact our IR team. David?

With that, we will now take your questions. As I said at the outset, we would like to focus questions on first half results and keep the strategic questions for the investor strategy presentation that follows immediately this one. We will start with questions from the audience at our offices, and if there is additional time, we will answer the questions sent to us in writing in the webcast. From the webcast, we will take questions on first come first serve basis, but we would also try to group questions of similar nature. Should we not have time to respond to questions from the webcast, the Investor Relations team will make sure those are answered afterwards. Now operator, if you could please open the conference for questions. We already have quite a number of hands in the audience.

I just have 2 questions from my end. Firstly, when you look at the Q2 growth versus 2019, clearly, it was very robust. But how much of that do you think was incremental because of catch-up demand where people who didn't travel for 2 years were suddenly taking to the skies? So what would the normalized growth rate be? If you have some assumption there, that would be great. Secondly, on the strong growth for Prime, was there anything incremental you did in terms of marketing to attract new customers over the last 3 months? Or was this still very organic? Some color there would be great.

So maybe I'll take both of them, but jump in on the first one. Absolutely, David. So [ Nizla ], good questions. Let me take the first one about how much of this is kind of, let's say, an uptick -- artificial uptick, so to speak. Look, it's difficult to say, just quite frankly. What I would say is, the market though. So that's the data I can go back to. The market is at anywhere between minus 30% and minus 50%. And we are at, let's say, plus 30% to plus 50%. So a huge, huge delta between the two for that. I think it would be fair to say that we are in a transition period going from, let's say, a truly COVID environment to a non-COVID environment or a post-COVID environment, and we're somewhere in between that. Also, we are a leisure travel company. We focus only on leisure customers. And I think what it has been proven, and you see -- we see it in at least our data, is that consumers want to travel, right? And that the pandemic hasn't changed anything fundamental in that, meaning we think about it from a business point of view, it has changed it fundamentally, right? We feel much more comfortable from using technology, right? Using, let's say, Zoom, Google Meet, et cetera, et cetera, to travel. So that travel is partially replaced by technology, but all the surveys that we see, consumers still want to travel. There's no impact upon that. So I think the market, it will be fair to assume, will come back, right? It's not just that it's, let's say, a short-term blip, but it will come back to 100%, right? But it's going to be in a transitory stage from it. And we are outperforming the market, and we will continue to outperform the market, right? Now a question about our subscriber growth. So you're right. I mean it is a very big number. It's a very good number and particularly, in a transitory kind of COVID to post-COVID market, where the market, the number of consumers just out there willing to and wanting to fly is not as much as, let's say, pre-COVID times or post-COVID times to be able to get these numbers is quite good. And we're not doing anything different than what we've been doing over the past months and years, which is -- again, just to remind the larger part of the group, we do not do any what would be called normal or traditional marketing whatsoever for Prime or for anything within our company. So we do not do any television. We do not do any print. We do not do any radio. We do not do any of, let's say, the more new world type of stuff that still is traditional, right? Like a YouTube video, for example. We don't do any of that type of advertising. We wouldn't do display ads. So we do nothing for Prime. The way in which customers discover Prime is truly through word of mouth. And then when they come on our website, right, when they come on our website, they will see an opportunity to either proceed forward in a transaction, right? Like any other travel company or to take a subscription, right? But we give them purely the choice. And so we don't use any other types of marketing to really attract customers. We do know it's an opportunity, right? Absolutely. But we've been very much focused on this and really building a great product and a great service and great experience. We will start to experiment likely over the course of, let's say, the next 12 months on using some of the more modern type of advertising like, let's say, YouTube type of ones. But it's not something that is in any of our numbers right now that you see.

Yes. I would like to complement a little bit the first part of the question about how much is pent-up demand and the predictability of the volumes now and going forward. And it's actually very difficult to tell. I mean we're in a little bit of uncharted territory. On the one hand, you have possible variations of restrictions or additional restrictions that you have in some places, right? And that we just need to follow the news, the same way that our customers follow the news. On the other hand, the former seasonality patterns are changing, right? Because also the time from booking to departure of the flight is also shifting. It's shrinking. And 3 months ago, when we were publishing the August results, and there we had data until the 20th of August approximately. We said, look, we don't know if that level of volume is sustainable or not. And we see people doing bookings in August that in the previous year, they would have done in the months of June and July, and there's a bit of, let's say, further point of view, there was a bit of pent up demand, at least in the short term, right? And then we were surprised with September which was even better, and we've never had in October that have more bookings in absolute number than September ever, right? October was a seasonally lower month than September, but we don't know if that is going to stay or not stay, right? And we don't know right now, the customers are still not booking as of today. The majority of them, they're not booking for Christmas. They're booking for the weekends of the next 3, 4 weeks. That's what they're doing mostly. So it's really very difficult to predict. Is plus 50% sustainable. We don't know, right? And we don't want to build expectations that it is. What we do know is that we outperform the market and that the basis on which we are outperforming the market is very solid, which is the strength of our product and our services. Now if the market is going to go a little bit up or a little bit down on what's going to be exactly the performance over the next few weeks and months, it's really very difficult to predict. What I do know is that we're going to continue to outperform the market.

And that leisure travel is going to get back to, let's say, normalized levels, whether it be this month, next month or 12 months, we can't tell you, but it's clear that it is.

There were other questions in the room.

Just one, if I might. The other one was just answered. On the reduction of the revenue margin per booking, this has accelerated versus the first quarter. You mentioned that it was due to a higher weight of low-cost carriers. I'm just wondering, what's the pattern of the bookings that you're seeing for the coming quarters in terms of the mix? And to what extent is the higher penetration of Prime influencing this mix since it's easier. I assume that your value proposition is better for a type of bookings that typically you would do through eDreams.

You -- without you knowing it, you're anticipating material that we're going to cover in the next session in the Investor Day. So I'm really happy that you asked those questions, but I think we should answer it in the next session.

Three questions from my side, if I may. The first one is a follow-up on marketing expenses. Well, Dana has been commenting that you have not been doing any specific on Prime. However, in the presentation, you are highlighting that higher marketing expenses were impacting your variable cost. So I would like if you could elaborate a bit on this. Where is this marketing increasing there? My second question will be on [indiscernible] that your book is coming from Prime remained stable versus the previous quarter at 39%. When at the end, you have a very strong growth in new Prime subscribers. So this means that also your transactional business is growing more or less in booking at least at the same level that where Prime bookings. So I would like you could elaborate on a bit on the drivers behind that. And finally, it's clear that you are gaining market share. I would like to ask you, where is coming -- these market share gains is coming from? Data distribution is coming from other OTAs? If you could provide any reference. And specifically, looking at the strong performance that you have been reporting over the last quarters, if you have seen any change in the competitive environment? If you have to achieve even in some geographies or whatever, that your competitors are taking actions really to balance a bit in the market share that you are gaining?

Thank you. Which ones do you want to take?

Do you want to do marketing expense one?

Yes. Sure. I'll start with that one. So the -- as you know, the market -- the way that we spend on marketing is entirely dynamic, right? The algorithms look at the patterns of demand, anticipate the amount of bookings and revenues that we're going to get from certain types of searches. And depending on that, they buy more or less clicks. Naturally, what happens with that is, when the algorithms detect that there are more searches and they detect that they're going to be able to, say, convert those searches into more bookings, they're going to spend more. And that's why when in the downturn, there is lower searches, lower bookings. Our marketing spend goes down automatically. There's not a human that makes decisions about that, and naturally, the same thing happens on the return. So it follows very naturally, but let's say, the type of expenditures that we do. In nature, they're the same. It's not like there's a marketing campaign now that there wasn't before. It's all driven by the algorithms. On the share of Prime booking?

Yes, let me -- feel free.

When there is more demand, remember, we don't do any specific marketing campaigns for Prime. We don't go out there and say, you should subscribe to Prime, right? What we do is, we find people who is making searches for travel, right? And we get them to our website. And once they reach our website, they decide if they want to be a transactional customer and just making booking and they're happy with that or if they find the subscription proposal appealing and they decide to subscribe. So I find there is kind of like underlying logic in your question that says, oh, they should all opt for Prime. No, they continue to opt for both things, and therefore, let's say, the speed at which you can increase the percentage of bookings is gradual. It's not immediate. We will speak about -- more about this in the Investor Day.

Yes. If I can elaborate on that one also, Carlos. We have a lot of developments that we've put in place, meaning improvements in our product, our offering to customers that are universal, if I can say, meaning they're not just Prime. Yes, we've improved on Prime tremendously, but there are some things that cover both Prime and non-Prime members tremendously. Just one simple example would be, as many of you know, we've connected another major GDS player, right, during the pandemic, okay? Now that is universal. That covers across all of our base, and the way in which we've done it and optimize it has actually allowed us to have better bookability, better availability and better prices and certain progress. and that's universal across the business, and that's just one simple example. But there's many examples kind of we could go through. And so that allows the transaction part of the business, if I can call it, to continue to improve as well. And so some of these improvements, therefore, have done very well in it. Let me go on to your third one, which I think you were saying is that you're gaining market share. And if I understood correctly, it's kind of from who is that market share kind of coming from? We see it pretty much across the board. So let me just go through some data. I think you've seen the IATA numbers, and so it comes from that. In the Investor Day presentation, we will share with you also some low-cost numbers as well. So you'll see it coming from that. So I would say, let's call it airline direct. So we do see it from that. And then from the OTA world, I think we've shared with you before kind of the 37%, used to be 32%. So we gained 5 percentage points of that, and we continue to see that. We also have -- that's external public data. Internally, we have lots of data as well that we kind of try to clue together or look at indicators. There would be indications of market share, so to speak, and those support what I'm saying as well in terms of from the OTA world. And then there's lastly is the offline world. And we don't track the offline world so much because, quite frankly, it's really not a credible competitor for us. The product is old and antiquated, just quite frankly, and not very competitive on it. And so what we do is, we look at more in aggregate, and we see aggregate level that, that world just goes to -- continues to shed market share to the overall OTA market. And since we're one of the largest in the world, we benefit from that share as well. And you'll see in the Capital Markets Day, we again share some data on that. I think you were talking about your fourth question in terms of our competitors responding differently in certain types of markets. This is difficult to say because if I go to pre-COVID times as well, there was, let's say, a continuous variability at a micro level. At a macro level, the market is competitive and always has been. And maybe there was just that year or the dark year of COVID, the real most stringent, was less competitive but 2021 has absolutely been competitive again. And typically, what we found pre-COVID, And probably today is that you find competitors come in and out of the market in terms of their intensity. And so you may find, let's say, 1 month or 2 months or 3 months, a certain competitor may really do a push or it may be, let's say, for only 2 weeks, right? And so it's difficult to see patterns in a short timeframe, and you have to look at them over, let's say, like a year to 1.5 years. And if I look at, let's say, over the past year, we don't really see anything that materially different than what we were seeing pre-COVID, quite frankly. In this, and we see competition absolutely out there, but we, at the end of the day, take market share, right? And you see that through our numbers.

Just 2 quick questions. You refer quite a lot of time to 2019 pre-COVID-19 booking level. Yet when we look at revenue margins or adjusted EBITDA, it is substantially below. So is this just a matter of mix? Or is it the development of Prime that is impacting the profitability? And the second question, please, is when we look at the table on Page 11 regarding the revenue margin and EBITDA. Basically, you've gained quarter -- year-on-year on the second quarter, about EUR 65 million of revenue margin for just EUR 5 million of incremental EBITDA. Is it the kind of transformation rate? And can you elaborate a bit why this transformation rate seems so low given that you have a normally a high variable cost base?

So there are 2 main things that are affecting that comparison that you're saying. The very first one is that because of it and I've gone through it, and I'm going to repeat it at [indiscernible]. I know for at least another year until people fully, let's say, absorb it. You need to look at the cash magnitudes. You need to look at the cash EBITDA, and you need to look at the cash revenue and you need to look at the cash margin or profit. Because if you do a comparison of just EBITDA against -- adjusted EBITDA against adjusted EBITDA or revenue margin against revenue margin, and you're missing the contribution for Prime, which is just a parking lot. The cash is in. We've done what we needed to do in order to earn that revenue, and it's just recognized over time. So it's not an apples-to-apples comparison, if you don't look at the cash magnitude. That's the very first one. And yes, Prime affects our business. It affects us in a very good way, and we'll go at great lengths on the Investor Day about it. But when you look at a specific quarter, you really need to look at the cash magnitude. That's the first one. The second one is one that we've covered quite a few times. And it's also important to keep in mind, and I'll say even more about that as well in the afternoon, which is that because the basket size is lower, right? The basket size, the average size of the booking in euros that we did pre pandemic was EUR 450. The one that we do now, it's around EUR 300. That is determined by where people is allowed to travel. If the type of travel that you do now looks more if I caricature it, right, as a going for a weekend from Paris to Berlin as opposed to that couple taking as well a trip during the year with the 2 kids to Orlando for a week instead of a weekend, right? You gravitate most towards the first and you don't have enough of the second, then your basket size reducers. When that basket size reduces, that is a proxy for many things that are happening in the background. You have less passengers per trip. You have less days in destination. You normally book much closer to departure. The amount of products and services that those consumers use of us is lower, right? They have less help, whereas we will provide to them more help in many more ways, and that increases the revenue per booking. So the revenue per booking, it's not going to get back to the full -- and again, you should look at the cash revenue margin per booking, not the fee revenue per booking. It's not going to get back to its full pre-pandemic level until the restrictions are overall lifted, and they can return to purchase the same basket of products that more or less they purchased before.

David, I am conscious of time.

Yes. I think I'm going to have to bring this to a close because we have 10 minutes left until we start the Investor Day and for the technicalities, communications, the setup of the whole thing, we need to have a little bit of time doing it and we want to start the Investor Day on time. So I'm very sorry, but we're going to have to close this session here. I hope that you keep your questions. Some of them I'm sure we're going to be able to fill them during the Investor Day or in the breaks or in the lunch or elsewhere. For people in the webcast, please send your questions over to our Investor Relations team, like I was saying. If you want to join the webcast and you don't have an invitation, please send an e-mail to [email protected], and we will send you the relevant link. And before we conclude the call, towards the end of February, we will be hosting the conference call for the third quarter results, which, as normal, with the Q1. It will only be a financial review. In the meantime, we'll be happy to receive your questions via the Investor Relations team or the investor e-mail address, which is [email protected]. Thank you very much for joining, and we're very much looking forward to speak again in a few minutes.