lastminute.com N.V. (LMN) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the lastminute.com Full Year 2024 Financial Results and 2025 Outlook Conference Call and Live Webcast. I am Myra, the chorus call operator. [Operator Instructions] and the conference is being recorded. [Operator Instructions]. At this time, it's my pleasure to hand over to Julia Weinhart. Please go ahead.

Thank you very much, Myra. Welcome, everyone, to lastminute.com Investor and Media Conference Call. I'm Julia Weinhart, Head of Investor Relations of Lastminute, and I will be hosting today's call. Today, I have with me, with our CEO, Alessandro Petazzi, and our CFO, Diego Fiorentini. As you can see in the agenda, our CFO, Diego will provide you with a quick overview of the company's full year '24 financial results. Then our CEO, Alessandro will walk you through our strategic directions for 2025. Lastly he will provide an update on the 2025 financial outlook. The presentation will be followed by a Q&A session. Today, we are taking live questions or webcast questions. Please note that the live questions during the call can only be asked by dialing in via the phone numbers you had on your invitations or you can find it on today's press release.

This is the operator, how may i assist you?

Can you hear us Myra?

Yes. I can hear you. We can hear you. You were live.

And sorry for the interruption. The chorus call operator will share instructions again following the presentation. Today, [indiscernible] I will hand over to Alessandro for a brief [ welcome ] and opening remarks.

Thank you, Julia. Good morning, everyone. Thank you for joining us today. It has been almost 3 months since I took on the role of CEO of lastminute and i decided to be here today. Obviously, today, we're releasing our 2024 annual report, but you've already seen the numbers. So particularly excited about the opportunity to be talking about our growth trajectory and strategic direction for 2025. A lot of you connected asked us in the past to have a bit more clarity, not just numbers that we expected, but also on the industrial trend, and in the strategic choices that we're making that underpins those numbers. So we'll be talking about that 2025 is the year in which we return to top line growth, as well as bottom line growth and we'll tell you a bit more about how we plan to do it. Before we do that, I'll leave the floor to Diego, who will be recap a bit about the key highlights of our 2024 performance. Thank you.

Thank you, Alessandro, and good morning, everybody. Let's start with a quick overview of the key 2024 financial figures, which are in line with the [indiscernible] figures advertised as you will now have last investor call in February, and [ confirm ] improving in the second half of the year. While overall customer value declined by 14%, our core product dynamic holiday packages saw an 11% increase compared to 2023. Revenue decline 2% year-on-year but demonstrated quarter-on-quarter improvement in the second half of the year. Gross profit maintained fairly low, rising 4% year-on-year while DP gross profit, delivering a strong 32% increase, 7 percentage points higher than revenue growth. Adjusted EBITDA grew 4% [indiscernible] in the second half and confirming our guidance for single-digit growth in 2024. Last but not least, the [ net result ] more than doubled compared to 2023 due to lower non-recuring items in the year. We go now to Slide 6, I'm pleased to say that for the second time in company history's a dividend of EUR 0.41 per share, will be proposed to the general meeting on the 25th of June. This represent a 30% dividend payout in line with the group dividend policy approved last year. This performance reflects the more confidence in lastminute's financial performance and its commitment to provide shareholders with consistent returns while maintaining flexibility for future growth opportunities. Moving to Slide 7. This is an overview of our new segment reporting structure, which will be officially take effect in fiscal year 2025. The revised approach offers a more detailed view of our financials. Shifting from the additional B2B, B2C segmentation to [indiscernible] focusing on packages, client and hotels. To ensure transparency [indiscernible] with the competitor base, we have included this new structure [indiscernible] of the annual report as a reference for future financial reporting, with that, I hand over to Alessandro.

Thank you, Diego. So let me tell you a bit more about the strategic generation. I think we're now in a position to do so. Before giving you more details about our choices, let me set a bit of the [ context ]. So I think this is very important basically start from -- the markets in which we operate and our assets. These are the two important components and obviously also shape our strategic direction? So in terms of the context of travel, I mean, -- let's remember that we are in a market that is growing, in a market that is proved to be resilient. I mean it's a fact that the percentage of disposable income that people are willing to allocate to travel is not shaking, despite an economic pressure and inflationary pressure on other expenditures. And I would say this is even more true for younger generation. So it's very clear that the younger people, the more the percentage of their disposable income, they're willing to dedicate to travel. But obviously, the economic pressure that I was mentioning, especially on the middle class in Western countries, it implies that there is even a bigger push to the concept of value and convenience. So value for money remains very important. People want to travel, they want to travel alone, they want to travel even more if they are younger, but obviously, they want to mature, they get a good return on the money they're spending on such travels. And in this context, obviously, packaged holidays have made, I would say, a return on the market that in the past few years, precisely because of that -- because the more you start to bundle components in one package, the easier the possibility to have a good value for money, because at the end, the [ component ] price of the overall package can be inferior to the price of the sum of the single components, if you were to buy a single components separately. All of that, also, this is not a new thing, but hopefully, all that is -- also entails a regulatory complexity because, especially in Europe, because of how package travel is at. So this is a bit of a context in terms of the travel market. At the same time, there's been a lot of talk in our industry now. I've been in travel for over 10 years now. And there has been a lot of talk recently about the emergence of Gen AI and so-called Agentic AI and how that is changing the way that people think about travel and the way people do their trip planning, okay? So for sure, we have these forces. The other forces shaping the way people do trip planning and inspiration are social media with the emergence of TikTok as the main social media in which people get inspiration, especially younger generation for the place they want to go to are following influencers even more than brands. What I think is very interesting, however, is that there's been a lot of talk of what if Agentic AI in the future replaces online travel agents. What if tomorrow we will all have our own ChatGPT or DeepSeek or Grok or whatever, let's say, generalist A in gen AI who you want to think about it, that will know our taste and we'll be able to suggest the perfect trip for us. Now what I think is interesting here is that at the end of the day, all of this in parts of what is called the upper funnel in the industry, again, the inspiration and planning phase, but none of these players is actually into fulfillment. You always need a fulfillment partner to actually make the trip happen. And this is even more true if the trip is not about, I would say, relatively simple component, which has a single-flight or a single hotel booking, which you could potentially get from many different sources. But if we're talking about something a bit more complex like a package, then the more you have a unique product, the more defensible your position. And that's why, at the end of the day, again, to the concept of bundling, whilst all of these companies will be good in doing to end how people think about what their best trip would be but they will never venture into the idea of having separate supply agreements with various providers to have the impact rates that are needed to then create a package. So the more you have a unique product, more you have a package, the more all of these players actually become profit source in the same way that today, people are searching for this kind of stuff on Google. Maybe they will continue to search on Google while with the Gemini AI engine of Google or maybe they would move somewhere else, but it will always need to have a reliable fulfillment partner. For the practical reasons that I mentioned, but also for -- again, for the regulatory complexity that I also mentioned. If you get to buy a package, there must be someone who is responsible for whatever happens during the holidays. So in that context, I think our key assets are the fact on one hand, we really have a long-standing expertise in bundling in building these packages in a dynamic way. We have a technology that allows us to bundle even more things than just the flights and hotels, and i will tell you a bit more about it a minute. We have a strong brand portfolio. I mean, obviously, we are the lastminute.com Group, but we also have other brands, which we do not often talk about and maybe it's worth spending some words on that element. And again, the regulatory and legal, I would say the complexity that we've had to manage in the past, to be present, to be to have licenses to have financial guarantees in a lot of European -- basically all the European markets, is something that costs us time and money and now creates a competitive advantage because we can leverage that. And we can -- this remains a moat in a way in the future, but also as something that we can leverage today to further grow our B2C presence in Europe. So thanks to these assets, we can move in a strategic direction that allow us to have a distinctive position in the market. And if we move to the next slide on Page 10, you see a snapshot of what the key saying that we are doing, I would say, this year also in the midterm are. So the first 2 elements are starting with strengthening market presence, are things that we're doing even without changing the product that we are selling, right? Because I'll give you a bit more details about that, but [indiscernible] were growing more with our B2C proposition in the European markets. In Asia, we already have a license and the possibility to operate. We're going to be very focused on our brands. Again, I'll talk to you about that. And these are two things that we are already doing and things that do not imply an evolution in the way we manage our products. Then there are 2 more things, which actually means that we are evolving our product, that end package evolution, I'll tell you more about the idea of having by the size of our traditional flight plus hotel product also more of a holiday product in which, we start owning more and more the customer experience and provide more curated experience to the customer. And last but not least, the idea that historically, lastminute has mostly been focused on selling flights, hotels, packages and that was it. Whereas clearly, now we have all the information to make sure that we can provide relevant information and also cross-selling opportunity, more products that are relevant for your holidays between the moment in which you book and the moment in which you actually go on our holiday or on your [ city ] break. And then also after you come back home from the holiday, there are more things that we can suggest you. And all of that is in the loop because obviously, as our product evolves, as our technology evolves, then that further reinforces the strengthening of the market presence in all the markets in which we are. And with that, let me give you some more details for each of these 4 core pillars. So on the first one, on Page 11, strengthening market presence. Basically, the core markets that you know for this company are the ones in red, so-called Tier 1 markets. And then you see in light pink what we call Tier 2 markets. These are markets in Europe in which we already have customers mostly via our white label partnerships. So we have already presence there. We have the regulatory setup and we have real customers. But historically, we have never invested in pushing our B2C proposition. This is something that we have started doing at the beginning of the year. So when we say that agreement approach is because we already know what the potential is in each market. We already have an indication of where the biggest potential are, where the biggest return on investment are. And based on that, we're also prioritizing our B2C market spend. B2C marketing spend, which clearly is very much linked with the brand portfolio strategy on Page 12 from various points of view, I would say. So on one hand, you see that, again, these are the main brands in the group, lastminute.com, they are active on the German market, volagratis, which means flight for free in Italian, so clearly focused on Italian-speaking market. Rumbo for Spanish-speaking markets and bravofly, which is a bit of a more generic brand. I mean it's pretty clear that 3 of these brands are more focused on flight products and 2 are more focused on packages. Historically, we've been trying to sell a bit of everything on all brands. And of course, I mean, we wouldn't, I would say, turn away a customer that really wants to buy flights on lastminute.com coming directly to the website. But in terms of priorities, it's pretty clear now that we have to be very focused on saying, well, actually, each brand is the home of something specific. So lastminute.com, for example, is the home of the last minute holiday deals very consistently with its iconic brand. On the German market also selling packages for slightly more affluent type of customer segments and the other brands more focused on flights. Now the one thing that we do not see here, but we're working on is also to give a bit more of a tiny feeling to all of the brands, [indiscernible] also the one that we internally call the Blue brands as their color suggest to make sure that people start realizing that they're actually part of the lastminute.com Group, something that right now is not so evident in order to basically increase the cross-selling opportunities among the various brands. And back to the previous slide talking about Tier 2 markets, obviously, we have an indication of what brands can be prioritized and what product categories can be prioritized in each of these markets. So the approach is a really focused one rather than trying to do everything to everyone all at once, we know exactly what is the right product for the right customer audience in what market, and we're focusing our marketing investments on that. At page 13, a bit more about the evolution of our product, which again is not about a substitution. We're still going to have our flight and hotel offering as the core of our dynamic packaging proposition. But let's be honest, customers do not really care if a package is dynamically created or not. If we have a prepurchase agreement with an airline or with a hotel chain or if everything is done on the flight, thanks to our API connectivity with our supply, right? I mean this is how we cook things in our kitchen. But at the end of the day, customers really care about having a holiday that makes sense for them at the right price at the right moment, right? So I think it's interesting that compared to other players in the space, our tech stack already allows the possibility to include more components into a package. So again, not just the flight and hotels, but potentially the transfer, potentially the city bus, potentially experiences, stuff like that, which obviously can be sold in funnel or also post transaction after the customers have bought the main component of the package. Historically, I would say we've been really focusing on selling all of this in a very rational way, so to ask people to really choose their flight, their hotel. And this is going to remain for a certain type of customer and a certain type of holiday. But we think there is a value in also owning more of the customer experience to give customers a greater peace of mind to basically say, look, this is the last minute holiday for you. Maybe in this specific holiday, you just want to have a weekend the sun in March, and you are waiting for someone who is a trusted expert in the sector to suggest to something that actually responds to your needs. In a way, it's an evolution of the traditional tour operator model, right, if you want, which will sit alongside our traditional flight plus hotel offering. And again, remember, I was talking about the importance of value for money at the beginning when we were setting the context and the scene for all of this. And obviously, again, thanks to the agreements for [ OPAC ] rates for all the suppliers of transfers of city buses of other stuff, the more components you bundle in one package, the greater the potential value advantage for the customer rather than buying the component separately. So there are 2 elements here. One is we're going to own more of the customer experience. We're going to have more components into the package. And also, we're going to take greater editorial responsibility in suggesting a curated list of things which makes sense for that customer. And it also goes down to small things like, for example, selecting only certain hotels with good reviews, which, by the way, not only help us sell more packages, but also help us reduce [indiscernible] customer support because we've seen a correlation between the hotel reviews and the like propensity of customers to call or to complain about something. So there's a lot of little things going here for the evolution of this. Last but not least, on Page 14, when we talk about being a travel companion, basically, we're talking about the fact that we aim to be relevant for travelers, as I said, not just in the moment in which they search and book for holiday, but also until the moment when they depart and also until the moment they are destination with services, with products. And then again, when they are back from their holiday, we obviously can also reengage them and suggest some things for their next holiday. And this is clearly easier to do and more relevant, I would say, for a customer, the more components you have in the package. Obviously, for a flight-only product, not so much. But the moment you're actually selling a longer holiday, this makes even more sense. So I would say, if we move to then Page 15 this was a bit of a detail about the things that we are focusing on this year. And if I can recap them at Page 16, key messages are, yes, 2024 H1 was not great. There was a rebound in H2, and we delivered profit. We think that because of the context of the travel sector, of the online sector with the emergence of AI, we're uniquely positioned to have a defensible position and to be resuming also top line growth in the course of this year already. And there are 4 strategic pillars that underpin the performance we expect to have strengthening the presence in what we call Tier 2 European markets and obviously also in our core markets, let's don't forget about them. Having a very thoughtful approach to our brand portfolio with a bit of a revamp of what we're doing there. An evolution of our dynamic packaging product to also cater to different audiences and for the same audience but a different type of holiday and to be a travel companion, so not just relevant until the moment in which you purchase, but also from that moment onwards. Again, the concept of owning more and more the traveler experience with the evolution of dynamic packaging obviously at the core of our product. And I know that you like to understand how we frame our strategy. But at the end of the day, if we move to Page 17, this must be then reflected in our financial and industrial performance, right? So it's all nice, but the key thing is that this delivers growth, this delivers profitability. So the guidance that we have for this year for fiscal 2025 is that we are expecting low double-digit growth in both revenues and adjusted EBITDA. So again, last year, overall revenues declined compared to 2023. This year, we expect revenue to grow low double-digit percentage, and we also expect adjusted EBITDA to grow. To be very clear, the fact that we're talking about low double-digit growth for both components doesn't mean that they're going to be growing exactly by the same percentage. The expectation that we have is that the adjusted EBITDA will grow a bit more proportionally than the revenue to reflect the fact that obviously, we have operational leverage. And this is not just an expectation, right? But this is also, again, I would say, underpinned and confirmed what we've been seeing in the first 2 months of the year. So in terms of current trading update, we've seen definitely revenue growth coming in the first couple of months, driven mainly by dynamic packages, but also with a positive trend in our flight-only product. So I would say so far, the indication we have are very consistent with the guidance that we've been talking about for fiscal 2025. And with that being said, I leave the floor again to Julia to tell you about the financial [indiscernible] for the rest of the year.

Thank you, Alessandro. So here, just a brief recap of our financial disclosure date for the first Q, our Annual General Meeting. the publication on the 7th of August for our H1 and then on 6th of November, the publication of the Q3. With that, we will start now the questions. We will begin today with the live questions followed by those submitted via the webcast. Please note that similar questions we will be grouping together so your questions might be slightly rephrased. I will now pass the word to Myra to start the live questions.

[Operator Instructions] The first question comes from Jean-Marc Mueller from JMS Invest.

It's basically just one which I would like to elaborate on a little bit and Diego [indiscernible] the question, but maybe you can help me here a little more. I mean you mentioned that there is operational gearing, and you said low double digit on the top line, obviously means then a little more growth on EBITDA and adjusted EBITDA. But can you help me a little bit? I mean, roughly 60% of your costs are variable, but the rest are basically fixed cost. So the leverage in that sense should be fairly high. Furthermore, from what I understand is your highest margin product is growing the fastest, which is Dynamic Packaging, which should lead to actually even more operational gearing. So am I totally wrong thinking that if sales grow, I don't know, 11%, 12%, which would be low double digit on EBITDA level, we should more see like growth in, I don't know, in the low 20s to maybe low 30s.

This is Alessandro replying to that. So whether -- while I will not comment specifically on the number that you mentioned at the end of your question, I think conceptually, you are right with one point of attention, however. As I mentioned, we are starting this year to invest for the very first time in a number of markets in which -- and we follow what is in our core markets, we have a history of marketing campaign dating back sometimes over 15 years. So obviously, the optimization level that we could reach through our marketing campaigns in those markets is nothing comparable to the performance that we expect in the new markets. So basically, from a return on investment point of view with the new markets we expect it to be much lower. And so especially the marketing cost to be proportionally high, something we are aware. It's something that we are very willing to accept again, always healthy. So we're not losing money there, just to be clear, but we have accepted a lower return to start having significant volumes and to position ourselves for a better sustainable growth also in 2026 and 2027. So that's the main reason why the recent average, but maybe not the huge leverage that you might be expecting if we were in a steady-state situation.

Understood. Understood. And given that you signed the Ryanair contract in the second half of '24, and it really, I think, only came into force in Q4. Is it fair to assume that Q1, I mean especially the first half of the year, we should see a very positive base effect? So the growth rate, the low double-digit growth for the year-end sales I mean we should see much higher numbers in the first half and probably also in Q3 than actually in Q4?

I mean conceptually, I think you are right. We will obviously see how the numbers -- the year develops. Our objective mostly is to grow as much as possible, but yes conceptually you are correct, that especially on the flight-only product, there was this element in Q1 last year.

[Operator Instructions] I have no more questions from the phone at the moment.

Yes, we can then move to the written questions that we have from the webcast. Julia, do you want to read some of them?

So the first question we have received, why did you reduce the dividend?

Thank you, Julia, and thank you for the question. So I can clarify this point. The policy that we introduced last year called for a 30%, 35% payout of the previous year and net result. As an exceptional payment last year, it was decided to pay 100% of 2022 net results. That's why if you look only at the cash component, it might look like that we are decreasing the dividend. However, we are now paying what is expected to be by the policy.

And if I can maybe also further elaborate this from a more industrial point of view, I would say, again, last year was the [ extra ] though. It was an extraordinary dividend this year. So, if you want, the extraordinary movement was last year, not this year. This year, we're combining the fact of having a financial discipline, which I think is very healthy for a company like us without forgetting that we are a growth company, right? But we're resuming top line growth, and we have investment opportunities on which we think we're going to have better than market returns in the new markets in which we're talking about. So that all implies that yes, we want to keep consistency. We want to keep that financial discipline. We also want to make sure that we can invest in the new growth opportunities that we're seeing.

Thank you, Alessandro. The next question we have received today. We announced new reporting format will be the one going forward. So now the B2B, B2C splits anymore. In the new reporting format, flights and hotels seem to be again more in the focus. Why this changed to highlight against flight segment versus B2B and B2C?

Yes. Thank you for the question. I confirm that this going forward will be our new segment reporting which we have already introduced with the 2024 annual report, so you can find the comparative figures. And the idea behind this changes to allow the reporting to the internal structure as the company is organized to holiday packages flight and hotels, but it also makes sense to use this reporting. And these are base for reporting to the financial [indiscernible].

And again, if I can add one further element on top of what Diego was saying, yes, we organized that way, in the end managing flights and managing a package is more different, if you want, than just managing the distribution channel. It's a different product. But on top of that, we mentioned brands, right? And we mentioned the fact that progressively, we are aligning the product categories that we're selling to the brands. So lastminute.com and weg.de, mostly for the package product and the other brands mostly for the flight product. So I can foresee an evolution in which we will be talking more and more about the brands and brand and categories and product will be very much aligned. Obviously, B2B/B2C is a different way. So we think that this really is reflective of how we manage things today and also of how we will manage things in the foreseeable future with this evolution.

Thank you, Alessandro. Now moving to the next question. Adjusted EBITDA figures should be close to the reported figures.

Yes, correct. Going forward, we expect the 2 metrics to be very similar. The biggest difference remains the remeasurement of the stock incentive plans that are linked to the share price. Apart from that, we don't expect a lot of differences between the 2 metrics.

Thank you, Diego. The next question we have received, could you be a bit more precise on revenue guidance? Low double digit, is it 11% or rather 15% to 20%?

Well, I would say that when I say low double digit, I really mean low double digit. But I think we already commented on this and on the difference between the revenues and EBITDA percentage in the first question that we...

Thank you, Alessandro. The next question now, could you give us more insight into the decision of Mr. Concone not to remain in the Board? And why in the first place, did he leave the CEO position?

Yes. I mean, look, Luca and I have a wonderful relationship. I think this was really important for the company in a very delicate moment of its life. It was really important to rethink a lot of elements of governance, the elements of enterprise risk management that were introduced during Luca's tenure are really important and are here to stay with us. And clearly, there was a moment in which Luca, I mean, doesn't come from the travel sector. So when that phase was over, I think we were all in alignment on the fact that it made more sense to have someone who has that type of sector expertise. So I hate to blow my own traffic on this one, clearly, but that's the logic behind. Now in terms of him remaining on board, I think it was really important for me to bring new to the company to have his support and his advisory in a transition phase. That was really good, and we already started informally in the last month of last year after my appointment was announced. And clearly, obviously, that expanded further from January 1 when I start working officially in my CEO capacity. And that the Board, the new Board will be in place after the AGM. So basically, after the end of June. At that point, it will be a transition/handover period of over 6 months, which we think is more than enough to make sure that there is that level of continuity and that level of healthy handover.

Thank you, Alessandro. Now moving to the next question. Can you explain the SAR canceled to Mr. Concone in 2025 -- 2024.

Basically, I mean, the so-called SAR plan, so it's a stock appreciation rights. Basically, it's an incentive plan that is reserved for managers and executives and it's linked to the share price of the company. Assuming that such managers and directors are the one contributing to the company performance from an industrial point of view and then I would say, indirectly to the share price performance. So already, Luca has renounced a significant portion of this plan when he left the CEO position because obviously, that was less compatible with the new role on the Board and with the independence requirement for a nonexecutive director. And upon leaving the Board completely, it just makes sense that Luca renounces all such elements. That's the thing, that's the logic.

Thank you, Alessandro. Moving to the next question. What can you get lower growth trajectory?

Let me see if I understand correctly the question. So basically, how can you grow more? I think that's what people can say. Well, I think that -- look, I think that we already mentioned the 4 main areas in which we are focusing the company. Clearly, there's a lot of other stuff that is going on under the hood as in all companies, I think. I don't know how relevant this is to get into that level of detail for a call like this one that would require probably a little bit more technical understanding of how certain things are managed. For example, we are changing certain things in watch and how we are managing our performance marketing campaign with the introduction of micro signals. We're continuously testing to optimize our B2C properties. We have just very recently rolled out a new platform, not a [indiscernible] an evolution of the platform to manage the dynamic banking product. So there's a lot of stuff that we're doing there. And I would say that the key thing will be after these first few months of investments in these new markets to also understand exactly what the returns are on each of this. And maybe there will be the opportunity to, let's say, push a bit more in terms of our investments if the results are as good as we hope at the end of the day. So I think those are the main things. I don't see that there's going to be something that is completely different from what you're doing. It's about making sure that we really execute on the things that we're focusing on. Focus, execution. These are the main things being relevant where we are. We don't want to -- we just don't want to participate where we are, right? We want to win. We want to make sure that we have that shot.

Thank you, Alessandro. The next question we have received today, what are the new markets and focus for 2025 and 2026?

Yes. I mean I think you could see that on the slide that I showed. I can also elaborate a bit that right now, the very first signals are that the Nordics are probably the most interesting among those countries. Benelux also interesting. But again, it's very early days. So we'll see how that evolves in the course of the year.

The next question we have received, is there going to be an Investor Day planned for this year, given that last year's event has been canceled?

Well, look, I think we need to understand what the underlying reason for this question or potentially for an Investor Day is. I think the market and guys, you're all connected, you are the market. So correct me live also if I'm wrong, but my perception is that you want to be close to the company strategy, you want to understand what's going on. You want transparency, you want consistency. You want to know what we plan to do, and you want to make sure that what we do and what we deliver is consistent with the plans we have. So of course, we will be talking to you. We will be on the road. We will be attending conferences. I have one already scheduled in May. We will be out there spreading the gospel if you want. We're trying to do it in the most efficient way. Is the most efficient way, one, to organize a separate day just for us? I don't know. Maybe it's more to be there wherever investors and analysts already are ready to listen to what we have to say. But yes, we will be transparent. We will be sharing our strategy. We will also be providing a midterm guidance before the end of the year. So all the curiosities you have on lastminute.com will be answered in the best possible form.

Thank you, Alessandro. Now moving to the next question we have received today. Can lastminute's dynamic packages be easily replicated by competitors? Do you believe you have a competitive advantage?

Well, I mean, of course, conceptually, you could say, well, everything can be done in technology. But I would say that is always in the details. We were among the very first ones seeing this evolution in travel trends and investing in this very fast-growing segment of the industry. The consequence of having been among the first is that, again, a lot of the people who now talk about dynamic packaging are basically talking about flights and hotels. And I was mentioning at the beginning, we already have the possibility to include more components into a travel package. Unfortunately, this, let's say, theoretical possibility that we have because of our technology is something that we haven't leveraged yet. So I mean, I said unfortunately, but maybe we could say luckily because that obviously opens up an opportunity to start doing that. And I think that is something that is a bit less easy to replicate. I mean even big travel brands, we've been talking a lot with the very large global OTAs. And again, they will see the details. A lot of them do not have a package builder. A lot of them do not have a consistent definition of trip across their properties. A lot of them do not have the type of reconciliation among the values room rates and room that you get from the bed banks APIs. I mean there's a lot of complexity under the hood that we had to suffer the pain of managing that through the years. And so I think we do have a time advantage there. Then, of course, conceptually, technology is technology, but we do think that the relationship we have with the suppliers and the ability we have to bundle things and realize what is relevant for customers, plus the regulatory complexity of being present in so many markets do provide a competitive and strategic moat.

Thank you, Alessandro. On to the next question we have received is for you, Alessandro. Now that you have been with the company for a while, what has surprised you the most, both positively and negatively? What do you think is the #1 priority that needs to be addressed differently?

Interesting question. So let me start with the last one. What do you think is the #1 priority that needs to be addressed differently. Because again, I think that the strategic trajectory was already the right one to invest in dynamic packaging was already the right one. I would say maybe 2 things on which I might have a slightly different approach -- yes, slightly different approach, more nuanced approach, which is one is execution. I mean it's all nice to have strategy and idea, a certain vision. But as a friend of mine used to say vision without execution is just an hallucination. So we really need to make sure that we deliver month after month. And we need to make sure that the company knows that we focus on the things that move the needle. So it's nice to do hundreds of things at once but we really need to focus on the things that move the needle. And I think, for example, internally -- so maybe the one thing that was a bit surprising and maybe also a positive way was the amount of complexity that the company has. But I mean, I would say that I've come to the conclusion also talking a lot with the C-team, with the leadership team of the company is that there is good complexity and bad complexity. Good complexity is the complexity when we have to deal with a lot of complexity coming from our suppliers to be able to then propose a simple solution for the holidays of our customers. That's a complexity that adds value because that's where we take the burden and the pain of simplifying something that is intrinsically difficult and complex. That's good complexity. We want to leverage that. That's a strategic advantage, that ability. The bad complexity is when you try to do internally, things which are not which is not your core and that maybe there are companies outside that make that their core. So there are a number of tools, which I think we can be more efficient in having this kind of buy versus make approach on a lot of the things we do internally to increase automation to make sure that we leverage things which already exist in the market by people who may be focus just specifically on that element which are not part of our core business. So probably these are the things on which we are changing approach a bit. But on the positive side, I would say a company with a lot of competent and a lot of really passionate people, let's be honest, this company went through some difficult moments. So you could find team which was potentially disengaged, very cynical about the company, but that's not the case. I mean, of course, there will be people who will be happier or less happy, but the level of engagement is really good. The level of competence is really good and people really believe they can make a difference and that we can make a difference in the market.

Thank you, Alessandro. The next question received today, have you considered implementing a Prime subscription program similar to the one offered by some competitors?

I mean this is something that has been thoroughly analyzed before my days and the decision has been not to pursue that, and this is definitely not a focus. at the moment. When we say we want to be the travel companion, we mean that we want to provide something that is really relevant for the customer in that moment. I would argue that in something that is infrequent as travel, there's only a relatively small portion of travelers which really get a real advantage, a real benefit for them from a subscription. Most of the benefit probably goes for the company if the people are not really aware of what they're doing. But yes, I think that our focus is more to be relevant in all the steps of the journey.

Thank you, Alessandro. The next question, why is the dividend proposed as the group equity is very low? Approximately 11% of the balance sheet total.

Yes. Thank you, Julia. The size of the balance sheet is inflated by the gross travel value, which means that we are collecting 100% of the value of the packages and keeping for us only our margin and then paying out the rest of the value to the hotels and airlines mainly. For this reason, comparing the size of the equity to the total size of the balance sheet in our industry is not that relevant. On the other hand, the equity is with the new dividend policy is increasing because the dividend payout is only 30%, which means that 70% of the previous year net profit is kept as equity in the group.

Thank you, Diego. The next question, how can you explain the positive trend in flights? Should we expect stability in bookings for 2025?

Yes. I mean we -- again, it's part of the thing that we do under the hood. Sorry to repeat that, but that's exactly what the company is made of. And I would say that in flights, so sometimes it's not necessarily a big strategic shift, but more things that are changing. For example, in flights, we've been changing certain elements in our pricing algorithm and in our pricing approach. We are making sure that we basically focus on profitable routes on various channels, also on the Meta channel, so Skyscanner and Kaya to be precise, which last year was not profitable at all. For sure, there was also the element of Ryanair last year, but I would say it's a more holistic approach. And then the fact of having Ryanair product obviously helps having a better conversion overall. If you have better conversion, you send a data signal back to the various marketing channels that is more positive, and that also gives you a better, let's say, quality score, and that also has positive effect. So it's a virtuous circle that we kick started. So yes, so we're thinking that the trend will continue in 2025, meaning that we expect flight volumes in 2025 to be higher overall than in 2024.

Thank you, Alessandro. Another question we have received today. What are your marketing efforts regarding social media?

Yes. I mean, as I was mentioning, for sure, there's been a transition or there is a continued transition so that a lot of people are getting inspiration and travel advice from influencer, and this is something that I think we should be part of. In terms of social media, clearly, there are 2 different elements. One is the organic element in which what you -- what is the kind of thing that you do on your own channels. And then there is the paid media, right, what ads you have on the various platforms. So I would say, from an organic point of view, the main thing that we changed also with some new additions to the marketing team in the course of the past couple of years is the fact of always being -- trying to be part of the online conversation, right, be relevant not just to try to have our own brand narrative, but actually insert that brand narrative into what is happening in the online, if you want, the social media gist of the moment, right? So if there's a certain trend, if there are certain things that are happening that everyone is talking about, if there's a certain topic that is a trending topic on X, we try to be part of that conversation and have our brand as relevant in those moments. The other element is that historically, we have allocated a very tiny portion of our performance marketing budget to social media to more upper funnel and so-called consideration phase of the funnel. This year, we're increasing that. So the branding, I would say, what we consider as branding investments. You might have seen that for example, some sponsorship deals have terminated with 2024, and we are reallocating the money that was allocated to sponsorships to more investments in also paid media on social media. So yes, I think we are, I would say, definitely better shape than we were just a couple of years ago. And I think that the fact that we reinforced that type of effort and presence on social media was also demonstrated by the fact that we recently won a Travolution award for the best social media strategy. So that was something that obviously, we're really happy internally and especially the team who is in charge of that.

Thank you, Alessandro. The next question received today, what are the reasons why people book on lastminute.com versus Booking or Expedia or other OTAs?

Well, first of all, if you allow me a bit of a joke, if they book a package on Booking.com, we would still be happy because it's still us. So I would remind everyone that the package tab in the Booking.com properties is powered by lastminute.com, which, by the way, again, we've been repeating it a few times. So again, I don't want to grow our own [indiscernible] too much. But clearly, it's a testament to how good the product and the technology is. Otherwise, a player like Booking.com would partner with someone else pretty clearly. Now in terms of Expedia or other OTAs, obviously, it's about finding the right product at the right price, right? That's as easy as that. So I would say that in the Flight Plus hotels categories, it's mostly about, again, the brand perception, if you like or not like the brand, if you find something that is right for you at the right moment, if the value is right, -- the more -- sorry to insist, but we're really convinced about that. But the more you create a package in which it becomes not just, again, a Ryanair flight or a British Airways flight plus a Hilton hotel, which you can find everywhere clearly, but it becomes a lastminute package with a bunch of components, which we are uniquely positioned to bundle, the more then the brand becomes a differentiating factor and the product becomes a differentiating factor and then price is less of an issue. We definitely see that price elasticity, for example, of customers, we've done a long test about that also recently. It is very high on the flight-only product, very high on the hotel-only product, not so high on the package product and less so if there are more components in it. So again, it's also a way to move away from price-based competition to non-price-based competition on promotion.

Thank you, Alessandro. The next question we have received this morning, what is your AI strategy?

Well, I think that AI is something very pervasive here, not just in the travel industry, but in all industries. And so let me try and, I would say, differentiate what we mean by AI, right? It's one of those catch-up terms that can mean a lot of different things. So to me, there are at least 3 buckets in which AI is important for us. One is AI as a way to improve the customer experience, and we can talk about that in a second. Two is AI as a tool to improve internal efficiency. That's the second element. And three is AI as a possible partner for traffic generation. So outside of our properties outside of the reality of lastminute.com. So if we talk about these buckets one by one, I would say the first one, we already have a machine team internally that is really focused. We have a big data team internally, a lot of data scientists and one team specifically that is focused on the machine learning algorithms that we use across the board for our pricing strategy, for our marketing campaigns optimization. So there's a lot of that in these elements. And then clearly, increasingly also in how we define the rankings of the products that we sell. And obviously, these rankings are dynamic based on who the customer really is. And they become more sophisticated by the day. We start with something really easy like suggesting a different ranking based on the country of the customer. And then you get to something that is much more sophisticated, which basically means suggesting the ranking, not just where they're coming from, from the marketing campaign, but also in terms of the behavior they show on the property, the way they search for products and so on and so forth. So there's a lot of that already going on. And frankly, it's not new. It's something that has been going on for a while. We're also testing internally something with Gen AI to potentially change the way people search. I mean historically, travel companies have been for many years, the fact of searching destination, dates. We're also testing stuff with a more natural language approach. But again, is it -- we need to be very pragmatic about this, right? Because one thing is what technology allows us to do. One thing is what makes sense for the customer. So we're testing. We need to make sure that if we suggest something, it's something that actually helps customers, makes their life easier, allows them to convert and also book a holiday quicker rather than something that is conceptually fancy and that we can talk about in the investors call, but then people don't really use and really make a difference. So that's one element. The second element is AI as an efficiency tool as a support to our team. And we're working on that, especially in this case, I would say -- so the first element is mostly stuff that we do internally. The second, obviously, with the underpinning support of the some -- when there's a lot of internal data science, sometimes we also rely on external LLM models depending, for example, for the natural language search, it really depends on the specific situation. When we're talking about AI for internal efficiency, I would say we rely more on working with external partners. So for example, we're doing that in our software development department to have AI tools, which support developers to write part in the code not directly, but with a Gen AI tool. There are many. I don't want to advertise anyone specifically, but we're working with a few of them in parallel. And another element obviously is customer support. So again, we're working there with external partners to make sure that the work of our agents is simplified for the task that is more trivial and then they can really focus on adding value with a more personal touch. The third element is the one that I was mentioning at the very beginning in terms of AI potentially being a traffic generator for companies like us. us becoming the fulfillment partner and then being the ones who take care of the upper funnel in the same way that people currently search on Google. And we are in talks with all the big players here too, but it's very, very early days. So even OpenAI says that it is the test they did with operator in the U.S. you might have seen they did something with Priceline in the U.S. with Agentic AI. It's very, very early days. It was just that they want to demonstrate the conceptual possibilities there. But we're in touch as one of the leading European OTAs, of course, when these things will arrive to Europe, we'll be among the first to be involved in the experimentations.

Thank you, Alessandro. How should we think about the GTV sales and take rate in 2025? How do you expect your take rate to evolve in 2025?

Yes. We do expect the take rate to continue increasing in 2025, and that's the main reason why we are expecting a double-digit revenue growth, which is higher than the growth in take rate, which will be single digit in 2025.

Thank you, Diego. The next question we have received this morning, how many hotels are bookable at the moment via lastminute.com with how many lastminute has direct contracts?

Yes. Currently, we are connected to approximately 2.1 million properties via a number of so-called bed beds, BED, not BAD as it's important to make this distinction. Of this, we have approximately 30,000 hotels, which are directly contracted by us. And this is one of the competitive advantages. I mean this is one of the many elements of the recipe, right, when I talk about stuff that happens under the hood. This is not something that we necessarily disclose very often, but the fact of having the 30,000 direct deals, mostly in Europe, but also around the world and in which we have very good rates, especially for promotions. It's something that really helps us have good margins and also suggest prices that are good value for money for the customers. I see now, by the way, that we probably still another 7 or 8 questions, and we are out of time. But for us, I think we can stay a bit longer. I'm happy to see there's so much interest. So we can stay a bit longer if it's not a problem for. So whoever can stay connected, we currently see another 7, 8 questions.

Perfect. Thank you, Alessandro. So I will be moving forward to the next question. Why the increased focus on Tier 2 markets with B2C rather than white label partners? Do you want to become independent from your partners?

Yes. I mean, look, obviously, we love our B2B partners, and we are working to extend -- I mean, we're working on 2 directions with, say, B2B2C partnerships to be precise because at the end of the day, we're not selling something directly to a company. We are selling something to a traveler via the intermediation of another brand, right? So the B2B2C partnerships, we love them, and we are working to expand their numbers and also, I would say, increase the share of wallet, if we want to call it this way, of our own products within the existing partnerships. So we're doing that. At the same time, of course, you have more control about your B2C properties. So I think that from a strategic point of view, I mean, we have assets. We have really good brands. We have brands that are relevant in a lot of markets. We have a brand like lastminute.com that is iconic and has potential even in pockets in which there was never investment. We really want to make sure that we build to increase that strategic value. And then obviously, the more we improve our product, the more relevant we also become for B2B2C partnerships. But yes, that's the reason why we are now spending to increase our B2C. It's not one or the other. It's a very different thing, right? I mean for B2C, obviously, you have to have marketing investments. For B2B2C partnerships, basically, it's the product we already have, the technology we already have, and it's an effort of the sales team to go and contact more partners. So it's not one against the other.

Thank you, Alessandro. Moving on to the next question. Which countries do you see the most asked by travelers so far for 2025?

I mean, of course, it depends on the season, right? So -- and our customer base, remember that our customer base is mostly -- I mean, it's entirely European and also the destinations we offer tend to be mostly European with some exceptions. I would say, spring and fall, basically, it's about city breaks, okay, especially in art cities, in cities that are known for their architecture and urban life. In summer, obviously, the demand shifts much more towards sunny beach destinations with Southern Europe remaining the top choice for our customers, specifically, we see Spain, Italy and Greece as the top destinations. And we are also growing in Turkey and Croatia, considering that these are destinations, which obviously provide also very good value for money. In winter, it's a bit different. Clearly, winter, as you know, is the weakest moment from a seasonal point of view for us in terms of winter in terms of booking time because a lot of people book in winter for summer holidays, but in terms of actually traveling in winter. When that happens, then the priority is more like exotic beach destination. And I would say that Dubai and Abu Dhabi and the Maldives are the top destination in this moment. So of course, also our, let's say, the way we invest our marketing money varies through the seasons to reflect these type of trends.

Thank you, Alessandro. The next question we have received, as shareholders, we have lost 35% over the past year and 40% over 5 years. Results matter, but dilutive and how the company presents itself to the market. Have you considered any actions to deliver more value to the shareholders?

Yes. I mean, obviously, this is something we think about a lot, right? I mean, on one hand, you could say, well, it's the market that makes the share price. It's clearly, we do not have a direct influence. We have an indirect influence in terms of how we perform and the story we have. I think that we -- if I think about the various pillars on which you can deliver value to all stakeholders, by the way, which is my mandate, but to shareholders as well, are the usual ones to have a very clear strategy and a competitive positioning that is strong and defensible to deliver that you don't have just a pie in the sky type of strategy, but it's a strategy that delivers quarter after quarter, and this is going to be definitely a focus of this year. Plus we also started to give back money to our shareholders in the form of dividends and in the form of the share buyback. So as someone recently told me, it's like you have your cake and you also eat it, right? So that's the thing. Then clearly, there are multiple factors. There is a perception that we can influence, but not completely shape. Again, we will be doing our best. I think that I hope this call is also already a step in the right direction to give you more insights about what we want to do and how and why we want to do certain things, which may be something that was a bit missing, at least in the perception of some of you based on the conversation I had. Then clearly, there are factors that are not under our control. If I can complete on a joke, I recently -- I mean, you can find on 6 website -- 6 website that recently, I acquired approximately personally 66,000 shares in the company. I will not comment on whether there will be more of that because, of course, I cannot do it. But yes, that was, I would say, a step that I made a few weeks ago. And whoever among you is convinced that the share price is too low. We, as investors, you have a wonderful way to make it grow, which is to buy more shares.

Thank you, Alessandro. Moving now towards the next question, which measures have you set to further increase customer satisfaction?

Yes. I mean this is definitely something that we -- I would say that we care about, especially if you think about it, in the moment in which you perceive the customer as someone who will make a transaction with you and then disappear, then you don't care so much about what happens after the reservation, the booking moment, right? If you're selling a holiday, it's completely different. So the DNA of this company, let's not forget that up until 2019, the majority of the sales were coming from flights and the majority of flights was -- they were coming from the meta channel. So very price-sensitive customer, not at all loyal to the brand. So obviously, if that's where your revenues come from, you have certain priorities. In the moment in which the majority of your customers actually come to your main brand, lastminute.com and buy a holiday, it's a completely different thing. So same company, but 6 years down the line, very different picture and therefore, different strategic priorities. So I think there are 2 elements. I don't think that customer satisfaction is a problem of the customer support team, so to say. It's a company-wide thing. And I think that when customers are not -- first of all, we've been increasing our Trustpilot ratings consistently over the past few quarters. So I think that things are already going in the right direction. That's the first thing to remember. Second element is that we need to improve our product and by improving our product, we mean, again, what we're saying, when I talk about owning the customer experience, I also mean something like, for example, owning the terms and conditions. I mean we get -- imagine 2.1 million hotels, 11 different bed banks connection, 30,000 directly contracted hotels. We get a lot of terms and conditions. A lot of autonomous might have a different view on rates of cancellation, you can cancel the moment it's not refundable, refundable in the first 24 hours, refundable -- there's a lot of differences there, which obviously creates complexity and potentially confusion on the side of the customer. We can definitely simplify that. That's the type of good complexity that I mean. We take that burden and we give as we own progressively more of the customer experience, much more simple, easy to understand terms and conditions to our customer. That's something we can do. We'll not sell hotels with bad ratings. This is something we can do. There's a lot of stuff we can do in the product to improve that. And then obviously, as I was saying, the implementation of AI tools, which we're going to have in the second half of the year in the customer support team clearly will relief the team from the more trivial activities so that they can really focus on providing that value to our customers. So on one hand, we need to reduce the customer propensity to contact us because we give them a better product, transparent, clear, a good value of money. And on the other hand, we have to give the right tool to our agent to better manage. Plus we have to also improve the way that we allow self-service for, for example, changing certain things or getting a refund. So again, there's a lot of nitty-gritty details on the things that we are already doing precisely in that direction. It's a strategic priority.

Thank you, Alessandro. Now moving to the next question regarding working capital. How do you forecast working capital? Is it going to evolve in the coming years? Is it going to follow a typical historical pattern of getting more negative as the company grows or shifting business model to more travel packaging is going to give this a chance.

Yes. As you correctly pointed out, we operate in a negative working capital environment where we get paid by our customers before we pay our suppliers. As the company is returning to growth, this effect will have a positive effect on the operating cash flow and the subsequent cash generation. The positive effect is partially mitigated by the increased adoption of our deferred payment solutions that allows the client to book and pay later before the [indiscernible].

Thank you, Diego. The next question we have received this morning, is it possible that lastminute.com becomes the most trusted DP travel company? If yes, in which time frame?

Well, I mean, of course, that's our goal, right? So everything that we're doing goes in this direction. In terms of what time frame, I mean, obviously, it also depends on how you measure that. If you measure it in terms of reviews on various websites, if you measure it in terms of NPS that we internally measure, if you measure it in terms of growth of revenues, I mean, there are various dimensions that you can use. I would say that I tend to see things in a 2 to 3 years horizon. On one sense, we need to be quick. But on the other hand, we need to also be aware of the fact that technology investments sometimes need a bit of time to pay off. So I would say 2025 to me is a step in the right direction. And we're saying this now that is the end of March. And the main thing is that we are able to say that a year from now after the end of the year, confirming all the targets we had and continue on that journey. So yes.

Thank you, Alessandro. Moving to the next question. How strong was the growth rate of DP in Europe for 2024? What figures do you have or are expected for 2025?

I mean we've taken a look at various reports, right? I mean there's focus right, something something on this, there's gift. It's difficult to find precise numbers. I mean if someone finds them, we're more than welcome to share them with us. So it's difficult to find a reliable source, which gives a market acceptance number. In general, what we're seeing from a more qualitative point of view is that the segment of Dynamic Packages is the fastest-growing segment in the travel market right now. And so that's the one thing which we can definitely say. So Dynamic Packaging had a double-digit growth in 2024, and we can anticipate this trajectory to accelerate further. That's what we can say.

Thank you, Alessandro. What percentage of lastminute.com's travels are booked via the mobile?

Yes. This is a number that we -- you can understand probably that you are getting closer and closer to information that is of strategic relevance and we wouldn't like our competitors to find out. So we will not be disclosing a precise number of this one. What we can say, however, is that right now, the majority of travel searches happens on mobile. And again, a pattern that we've seen across the industry is that the conversion rate on mobile tends to be lower than the conversion rate on desktop. But I don't think that necessarily this is, in my view, a bit of a simplistic way to look at it because the reality is that so-called customer online journeys tend to be more and more fragmented. So there's never -- very rarely a situation in which someone lands on a mobile site or an app or a desktop site and immediately buy something. The typical journey is that you -- maybe you search for something, you land on a mobile site, you take a look, you think about it a couple of days, then maybe you remember the brand, you come back again on the mobile and then maybe you download the app or you don't and then you come back on the desktop and maybe you finalize the conversion on the desktop. And then if you look at the numbers, it looks like desktop has a higher conversion rate, but then let's never forget about the journey as -- with its complexity. So yes, if I look at the session numbers, which are the ones that are not disputable, mobile is the majority. But then from a conversion point of view, it's a really complex journey.

Thank you, Alessandro. Now we will moving towards the last question we have received in the webcast today. Well, regarding your seasons you commented on before wintertime plans to offer special DP for business journeys?

Not on our B2C properties. This is something that we are -- I mean, let's put it this way. Our B2C brands are not compatible with business travelers. I mean, of course, there might be someone who comes on last minute to come and buys a business travel occasionally, but this is not the core, right? When I talk about focus, when I talk about prioritizing things, we need to prioritize holiday makers. That's holiday travelers, sorry. That's the thing. However, you could argue that if someone wants to have a business trip from Paris to London, maybe a dynamic package is the best solution in terms of efficiency, cost efficiency also from a company point of view. And so we are exploring some opportunities in the B2B2C space, partnering with companies that offer such products to corporates and seeing whether the supply that we have might also be relevant for their audience. So the combo would be our products, our hotel inventory, for example, and their audience of business travelers. We will not address directly business travelers.

Thank you, Alessandro. As this was the last question for today, we thank everyone for joining today's lastminute.com call. If you have any further questions or require any additional information, please do not hesitate to reach out to the Investor Relations team. Thank you again for your time.