Amadeus IT Group, S.A.

Luis Maroto – President and Chief Executive Officer Ana de Pro – Chief Financial Officer

Stacy Pollard – JP Morgan Adam Wood – Morgan Stanley John King – Bank of America/Merrill Lynch Suhasini Varanasi – Goldman Sachs Michael Briest – UBS Neil Steer – Redburn Alex Tout – Deutsche Bank Alexandre Faure – Exane BNP Paribas

Good afternoon ladies and gentlemen, and welcome to our 2016 full year results presentation and thank you for joining us today. As always, Ana is with me and she will go through the financial part of the presentation.

So let me start with the most important developments, on page four. As you can see, we continue to progress strongly in the fourth quarter, delivering solid set of results for 2016.

Revenue and EBITDA grew 14.3% and 16% respectively driving adjusted profit and EPS growth above 21%. In 2016, we generated free cash flow of €811 million, representing 23.1% growth over last year.

And in the context of our strong capital structure which ended the year with leverage of 1.14 times EBITDA. Our financial results were achieved on the back of solid performances by both Distribution and our IT Solutions businesses.

They were also supported by the contribution of our 2015 Navitaire acquisitions. In Distribution during 2016, we continued improving our competitive position in the market which expanded by 0.8 percentage points to 43.2%.

This positive evolution reported 5.9% of volume increase for Amadeus and Distribution revenue increase of 6.8%. In IT Solutions, we had about 31.7% of revenue increase in 2016 resulting from underlying double-digit growth and the consolidation of Navitaire from late January and the full year impact of our 2015 acquisitions.

I’ll shortly elaborate on our most recent business developments, but before I do this, I would like to emphasize as I generally do, that we have been and remained highly focused on our technology which we believe is key to our success. In 2016, R&D represented 15.8% of our revenues and it was dedicated to supporting long-term growth through customer implementations, product evolution, portfolio expansion, investment in new businesses and our continued shift to open systems and cloud-based architecture, as well as system performance optimization.

Please now turn to page five, in Distribution we continue to renew and sign content agreements with eight carriers in the fourth quarter and 46 in total over 2016, securing and expanding content for our subscribers. We’re pleased to announce that we have expanded the scope of our partnership with Fareportal as we support them in their expansion across Europe, Asia-Pac and Latin America.

Fareportal is one of the largest and most innovative online travel agencies in the world with whom we have been working together to deliver industry leading merchandising search and shopping capabilities. Working towards higher level of personalization and developing merchandising solution is key for our airline customers.

Our aim is to support our customers in realizing their full revenue potential. And at year end, 66% of air bookings processed through us would carry an attached ancillary service and 120 airlines had contracted Amadeus Airline Ancillary Services for the indirect channel.

Our Fare Families Solution had 52 contracted customers and over 40 have integrated Amadeus merchandising solutions. In IT, we also had a number of successful business developments.

Kuwait Airways Kuwait Airways contracted a complete suite of Altéa solutions, including revenue management, e-Commerce, loyalty, inventory reservation, departure control, payments, as well as mobile and travel intelligence solution. Ukraine International Airlines, implemented Altéa reservation and inventory.

Ryanair renewed its Passenger Service Systems agreement with Navitaire until 2025, representing 25 years of collaboration between Ryanair and Navitaire. We are also pleased to announce that Boliviana has contracted Amadeus for Altéa PSS including reservation, inventory and DCS.

It is expected to be implemented in the second half of 2017. We continue to invest in the areas of personalization, merchandising, revenue optimization and disruption.

Our key 2016 airline deals in these areas are progressing very well with Avianca launching Amadeus Anytime Merchandising and Amadeus Customer Experience Management. Singapore Airlines working towards the implementation of revenue management and Swiss launching Amadeus Passenger Recovery.

Finally in our new business areas, we continue to make good progress. With respect to hospitality, where as you know we are working with IHG in the development of our new generation Guest Reservation System for the hospitality industry, we are advancing very well.

We are also progressing in the development of our next generation Property Management System, both the GRS and PMS modules which will also work as standalone solutions, will be fully integrated in the same platform. Page six, we have more details of Distribution business performance.

As I described at the start, in 2016, our competitive position in the market improved by 0.8 percentage point relative to last year, further increasing our relevance to airlines and other travel providers. In travel agency booking industry grew by 3.1% in the year with a notable acceleration in the last quarter, the fourth quarter growing 5.6%.

The acceleration happened in most regions except for Middle East and Africa. Mainly the acceleration was supported by continued strong underlying growth in Asia-Pac, improving performance in specific class markets such as Brazil, Argentina or Russia and relatively lower base of comparison at the end of 2015, was impacted by terrorist attacks.

In the full year, the industry performed positively throughout all regions. As you know, Asia-Pac experienced a strong growth throughout the year driven by growth in several countries South Korea, Hong Kong, India and the Philippines.

Despite improvement in the second half of the year, Central Eastern and Southern Europe was the weakest region dragged by unfavorable macroeconomic conditions. The other regions Western Europe, Middle East and Africa and the Americas posted overall moderate industry growth in the period.

Our booking growth in the fourth quarter also accelerated. Our performance was particularly strong in Western Europe, Latin and Asia-Pac supported by the industry acceleration I just mentioned and an improvement in our market set in these regions.

In the year as you can see our bookings grew 5.9%, Asia-Pac was our best performing region where we benefitted from a strong industry growth and the enhancement of our competitive position. Volumes in North America, Middle East and Africa grew as well very solidly.

Bookings in Western Europe and Latin, supported by a strong fourth quarter, closed the year with healthy growth rates. Finally, bookings in Central Eastern and Southern Europe were impacted by the industry weakness during the year.

In IT Solutions, we continue to see robust growth, Total Passengers Boarded increased by 85% during 2016 driven by their first time inclusion of Navitaire’s Passengers Boarded. Excluding Navitaire, Altéa PBs grew 12.2%, positively impacted by a 4.4% organic growth and the migrations we have undertaken in 2015, namely Nippon Airways and Thomas Cook and in 2016, China Airlines and Swiss and Brussels Airlines from the Lufthansa Group.

Navitaire New Skies passengers boarded performed well both in the year and in the quarter growing double-digit organically and also benefitting from implementations such as Viva Group. The acquisition of Navitaire and our latest migrations have contributed to the international expansion of our business.

Notably the weight of Asia-Pac and North America have increased and will continue to grow in 2017 with planned migrations of Japan Airlines, Malaysian Airlines on Southwest, the domestic passenger business. As we have mentioned before, we also continued with our upselling efforts, an important element of our Airline IT strategy where we continue to see a lot of interest and activity.

In particular, in the fourth quarter, we have new contracted customers for this year’s CM and FM driven in accounting, loyalty and cloud availability solutions. In Airport IT in the fourth quarter, we successfully implemented our Amadeus Airport Sequence Manager and ACDM Portal solutions to Copenhagen airports.

We count today with over 240 customers and our Airport IT Solutions are used in more than 350 airports. Hospitality IT is growing steadily and we now service close to 25,000 company venues.

In payments, our customer base continues to grow and now we have close to 750 customers with contracted service from our new portfolio and volume of payments on success processed by us in 2016 deliver a strong double-digit growth rate. With this, I will turn to Ana to cover the financial performance.

Thank you, Luis. Hello everyone.

We are now on page number nine. As Luis has just described, we have continued delivering in the fourth quarter of 2016, supported by the positive performance of both Distribution and IT Solutions segment as well as the contribution from Navitaire.

In 2016, group revenue was €44.47 million, 14.3% higher than in 2015. This increase was supported by 6.8% revenue increase in Distribution and a 31.7% increase in IT Solutions.

Luis touched on the industry growth, the market share gains and the volume evolution. Regarding pricing in Distribution, we had experienced average pricing expansion resulting from customer renegotiation, booking mix meaning both higher weight of global bookings and a declining weight of rail bookings we have at lower fee and additionally, revenue growth was also supported by a non-booking increase despite the negative effect from a number of factors including the cancellation provision.

The underlying non-booking revenue growth was driven by search solutions provided to metasearch engines and enhanced functionalities provided to travel Agencies, travel management companies, and corporations. Data and advertising solutions as well as our B2B wallet as part of our payment portfolio also contributed to this growth.

In IT Solutions, we continued to experiment a significant expansion in 2016, driven by underlying double-digit growth, plus the positive contributions for our acquisitions. We saw higher volumes supported by a 12.2% Altéa volume increase as Luis has mentioned and average pricing growth reflecting our successful upselling activity of Departure Control Systems, e-commerce and standalone solutions.

We saw a strong Navitaire evolution driven by double-digit volume growth and we continue to see double-digit growth from our new businesses, in particular, in Airport IT, in passenger processing area, from our Payments Merchant Hub through which we help travel merchants get paid and in our Sales and Catering businesses part of our hospitality portfolio for solutions. Looking now into contribution by segment on page 10, I would highlight the following.

As you can see, we have experienced contribution growth in absolute terms both in Distribution growing 3.9% and in IT Solutions, which is remarkable 36.8% increase. In Distribution, we have experienced margin dilution, partially due to non-recurring linked to certain personnel related payments, local tax provisions and bad debt provisions amongst others.

Excluding these non-recurring effects, the segment margin dilution due to a higher unitary Distribution costs as a consequence of competitive pressure and country mix was broadly in line with margin dilution expected and reported in the past years. Regarding IT Solutions, a notable margin expansion was a result of our successful upselling strategy in Airline IT as we have mentioned before and margin expansion in our new businesses.

Finally, net indirect costs were highly impacted by the consolidation of Navitaire’s central costs such as those related to hosting Accenture’s data centers. Excluding Navitaire, total indirect costs increased at mid-single digit rate.

For some additional color on fixed cost, personnel and other OpEx together increased 15.7% in this year, of course highly impacted by the consolidation of Navitaire on our 2015 acquisitions as well as by non-recurring effects that I have just mentioned. Excluding these non-recurring effects and the impact from acquisitions, fixed operating expenses grew mid-single digit, mostly driven by a 4% increase in our workforce.

As you know, a large part of this is R&D as we continue to invest significantly on our programs. We had this year a lower capitalization ratio, a significant part of our fixed costs related to the in-house development are linked to activities which are subject to capitalization which means a lower P&L expense and higher CapEx in the period.

Although, it’s neutral in terms of cash flow. The intensity of ongoing projects may vary during the year and over the years, determining a higher or lower level of CapEx and operating expenses in any given quarter of the year.

In addition, the natural evolution of projects may also imply changes in the level of capitalization and therefore in the spend recognition. Finally, in the year, we also benefitted from a positive ForEx impact on cost due to the appreciation of the euro versus several currencies such as for instance, British Pound, the South African rand or the Indian rupee.

On page 11, we can see our EBITDA amounted to €1.7 billion in 2016, representing a 16% increase over last year. This growth resulted from the positive underlying performance of Distribution and IT Solutions as we have seen, as well as from the contribution of Navitaire and the rest of acquisitions.

Our EBITDA margin was 38% of revenues representing an expansion of 60 basis points versus previous year. Please note that foreign exchange effects have no impact on revenue growth and as I was saying before, it had a positive impact on our cost evolution.

Nevertheless, excluding foreign exchange impact and excluding Navitaire we experienced high-single digit EBITDA growth and broadly stable margin in 2016. Below the EBITDA line, D&A increased 18.3% in the year, mostly driven by the higher amortization of intangible assets as more capital expenses in our balance sheet start to be amortized when we coming into exploitation as well as by the consolidation of Navitaire.

We have also reported some impairment losses included the write-off the Newmarket international brand. We follow a very strict approach to impairment analysis, we carry them out item by item on an individual project basis as opposed to as part of the business as a whole.

Usually our impairments related problems that have become obsolete due to the industry changes or a specific customer development which will not deliver the expected economic benefits. Our net financial expense grew by €20.7 million largely explained by lower exchange gains in 2016 versus the previous year.

Interest expense declined by 8.2% in the year as a consequence of further reduction in the average cost of debt. Income tax rate was 28.2% and we benefited from a lower income tax rate compared to the previous year driven by a reduction in corporate tax rates in Spain, a deferred tax liability adjustment to reflect government changes to the corporate tax in France from 2020 onwards, as well as tax deductions related to recurring and non-recurring events.

So the combination of the growth in EBITDA plus the growth in ordinary D&A and a growth in financial expenses excluding foreign exchanges gains plus a lower tax rate resulted in a 21.2% growth in adjusted profit in 2016. Adjusted EPS for the year was €2.08, 21.3% higher than in 2015.

As a reminder, adjusted profit is calculated after eliminating the non-recurring items, the PPA amortization and the non-operating foreign exchange impacts which are accounted for under the net financial expense section. Turning to page 12, as you know, an important part of our calls are related to R&D.

In 2016, total R&D amounted to €706 million, an increase of 10.2% versus 2015, representing 15.8% of revenues. This is centered in three main categories; customer implementation which accounts for approximately 20% to 30% of total investments, product portfolio expansion including the non-Air IT diversification which is more or less 50% and internal technological projects which amount to 20%-25%.

CapEx is very linked to our R&D investment. Typically, 70% of our CapEx is capitalized R&D.

As you know, R&D is capitalized when there is a significant visibility as to future revenue generation. Other than capitalized R&D, 15% to 20% of our CapEx generally relates to tangible assets, mainly in relation to our data center in Erding and finally, we also invest in contractual relationships on payment to travel agencies in the form of signing bonuses that are also capitalized under certain circumstances.

In 2016, our CapEx increased by 8.2% and represented 13.3% of revenue. Our CapEx increase was a result of our 10.4% increase in intangible CapEx from higher software capitalizations due to the growth in R&D, higher signing bonuses and an increase in licenses -.

CapEx in property, plant and equipment remain broadly stable. Of course, in 2016, R&D investment was highly impacted by the consolidation of Navitaire.

On page 13, we can see we have generated €811 million of free cash flow in 2016. This figure is 23.1% higher than in 2015 and the increase is primarily explained by a higher contribution from operations with a 16% growth in EBITDA as well as lower working capital requirements partially offset by the higher CapEx, taxes and interest paid.

With this, we have now finished our presentation of our 2016 results, and I will hand over back to Luis so he may run you through our outlook for 2017.

Okay. So let’s talk about 2017, moving to next slide.

So, this is a year that where we will have the customer implementations. As you know, we will have Southwest and it will be our biggest customer and also our first large U.S.

Airline IT customer who will complete implementation of Amadeus, our Altéa DSS in the second quarter 2017. We also have as well IHG, the launch partner for our platform for the hospitality industry, our CRS that we will initiate the policy implementation in the fourth quarter.

This important milestone - in 2017, despite an uncertain microenvironment marked by geopolitical events which could impact our expectations, we expect to continue seeing substantial traffic growth rates. These together with our technological offering, our track record should help us continue delivering growth in both of our businesses, Distribution and IT Solutions.

We’ll get into more details shortly but as a result of the above, we expect group revenue to span at a mid-to-high single digit growth rate. We should also see a broadly stable EBITDA margin.

We expect to sustain our CapEx investment in the range of 12% to 15% of revenue. CapEx will continue to be focused on new customer implementations such as the one I mentioned before, expanding our offering to airlines including investments in shopping merchandising, revenue optimization and disruption management solution and to our new businesses.

System security and stability will also remain at a priority for Amadeus and investments in this area will be maintained. We expect our cash generation to range between €850 million and €900 million in 2016.

Finally, our proposed pay-out target ratio of 50% over 2016 profit implies a growth dividend of €0.94 gross. Interim - gross €0.40 was paid out in February 2017 and the complementary gross €0.54 is subject to approval by our general assembly in June 2017.

We move to the last slide, we see IATA’s latest projection, point to a 5.1% traffic increase in 2017. The growth in passengers should help us maintain our volume growth both in Distribution and Airline IT.

Please take into account, as you know, our global footprint is different from IATA’s. Ours is more -- has more weight over Europe and not exposed to China.

In Distribution, we expect disintermediation levels to remain more or less stable depending on the evolution of corporate travel. We also expect to continue enhancing our competitive position globally.

As a result, our volumes should grow steadily. We expect revenue in this segment to grow up mid-single digit rate based on broadly stable average pricing assumptions.

We also expect to see certain margin evolution driven by continuing competitive pressure. In IT Solutions, we expect revenue to grow at low double-digit rate.

In volumes to expand held by organic passenger growth and the addition of airlines through our PSS platform which together with the impact from the 2016 migration will add 100 million PBs. This year we need to take into account that at some point Air Berlin should be leaving Altéa although there is no certainly yet around timing possibly in the second half.

Also, the immigration date is still uncertain although it seems likely that it should not happen in 2017. In turn, we expect a lower average pricing as a result of the higher weight of low cost and hybrid carriers on our customer base.

Our successful upselling activities will – to mitigate partially this effect. Finally, our new business’s contribution to revenue should continue increasing.

The operating leverage of the Airline IT business along with the expansion in the new business, average margin should drive the overall segment contribution margin slightly up. With this, we have covered the presentation and are ready to answer your questions.

Hi, thank you very much. Two questions if I may.

IHG implementation to begin in Q4 that seems a little behind schedule. Can you give us maybe an estimate of the size of the deal or at least what metrics you would use to measure and take transaction revenues for example, is it something like per room, per night, per month, per hotel something like that.

And then do you have a pipeline for other large hotels interested in your hotel reservation platform and kind of the same question for the PMS, do you have a launch partner there? And my second question, can you talk us through how to think about the contribution margins in IT Solutions going forward and the various component mix shifts so there is the core, and then Navitaire and then the NBU, so for example the NBU margins improving, but maybe it’s still a lower percentage or that -- it’s growing faster at a lower average, that kind of -- what are the different components and mix shifts going on there?

Okay, thank you, Stacy. Let me take the last question first about the contribution margins of the IT Solutions part.

As you know, there are many things impacting that figure in terms of percentage over the revenues. So you have Airline IT, where you have let’s say three drivers; you have the current Altéa performance where of course migrations have an impact and depending on which kind of carrier - we have the implementation of Southwest which will represent in terms of unitary pricing versus PB decline because that’s a hybrid as you already know.

Then you have a up-sell and cross-sell which usually impacts positively the unitary pricing and not all of the solutions have the same contribution margin. So depending on which area you’re growing more whether it’s PSS or some of the other solutions etcetera, you may have up and down.

You also have other activity which is services that also show a different contribution margin in terms of percentage and also a different pattern of growth, not being easy to predict because it’s more bumpy, up and down depending on the quarters. Then you have Navitaire, which has a higher growth because the low cost carrier segment in organic terms is growing higher but usually have lower margin compared to what you can expect in Altéa on the IT part related to airline.

And then of course you have all the other different component coming from hospitality, coming from payments, coming from airport where you have exactly the same thing which is, not all of them - have the same level of profitability. So depending on the mix and when you have higher growth in one or the other that may impact your margins, and of course, when you start putting numeral impact is, that you have a low margin because you are having the whole platform with a fully loaded on cost side with launch customer and it is when you kick in more customers that you start seeing operating leverage.

And that’s why in terms of margin, we give you outlook on how we believe is going to evolve throughout the year, because they have different capitalization ratios, different margins individually, different growth rates and we understand it’s quite difficult for you to be able to predict that and that’s precisely why we give you a guidance on this area what the margins on 2017 may look like. On the IHG metrics, you’re right, it’s reservations room per night and no, we are not late on our deployment.

We are well on plan. Remember that this migration is going to be global, so we will start in 2017 but we have to progress with all of the properties and therefore it may go up to 2018 once we finalize the 100% of the competition.

So the revenue recognition will be gradually as more and more properties are implemented throughout the years. And Louis…

Pipeline, yeah, I mean the first objective in our conduct business has been to finish the - and our offer to the market both on the CRS and PMS once we acquired Itesso the company dealing with that, that we’re still I mean the case of CRS of course is been developed with support of IHG and the first objective was really try to deliver and have it ready for first for our customers and then for the overall market. However, of course, in parallel we have been -- we have had conversations with other players in the industry.

As you know, many of these people are customers of us more for houses and offering and of course the fact that now we bring two additional solutions of functionalities and an opportunity for us to work with them. So the objective of course was to deliver on the PMS front to increase the quality of the product and then sell it.

And so, more than that I cannot share with you, as in the case of Altéa because of course conversations are ongoing. Hopefully, we will start seeing traction in this business as implement IHG and in the case of PMS as we continuously improve the quality of our offer.

So I’m optimistic about that but I cannot share conversations that could be in line with potential customers for the future.

Okay. Thank you.

Hi, Luis. Hi, Ana.

Thanks for taking the question and congratulations on another good quarter there. Two if I could please, just first of all on the Southwest, did I hear correctly that that comes in the second quarter and that will basically be all the PBs cutting over?

And then secondly, could I ask, just coming back to that disintermediation point, could you help us understand may be from the travel agent’s perspective, what their view is when airlines come and try to build direct connections with them does that mean they’re open to you or not? And then maybe in terms of the bookings that are on the GDS, is there any help you could give us in terms of the mix of home and away bookings and complex versus simple bookings on your platform and taking the view that the home bookings may be more likely to move to a direct channel but the rest is likely to stand the GDS channel?

Thank you.

Okay, let me take the first two, you want to cover the last one, Ana. I mean Southwest yes, that’s correct.

It will be the second quarter and yeah it should be fully implemented, our this year’s solution for them. As you know, inventory and reservation has been already done, so that’s right.

In the case of disintermediation, I mean we have seen quite stable disintermediation and you can see from the figures compared to the previous years, so there is no an acceleration I mean of course this depends a lot on the movement of corporate and mix up countries and re-runs, so there’s never an aggregate number but we don’t see ourselves on significant change compared to the past and we talked about Direct Connect, this is pretty small. And I mean travel agencies might try that but we have what we said that Direct Connect would be a good solution in some specific markets on specific relationship of our life travel agencies but we don’t see that at all as an industry solution.

And this is far from new as you know because we have seen that in the U.S. for many, many years, Europe so that’s far from new.

I’ve always expressed my view that I don’t think this is the solution, but it could be one specific customer or one specific part of the business could be doing that via Direct Connect, but at the end, as you know Direct Connect is one to one solution between travel agencies and airlines and at the end, you need to have an overall aggregation of all these content, that needs to happen to really have a seamless and optimal way of traveling managing the content. So, the current situation is not at the volumes that are heavily increasing but of course, there could be situations where these may happen, but we don’t see it really that the travel agents are keen of working on that connect engine long-term.

And in terms of what we call local and global bookings is more or less 50-50. The trend has been growing more away, so that’s a general trend.

And then depending on when you grow in some specific markets, we talk very large like India or Brazil or domestic where the away of domestic is higher than the away part, you may have variations per year. But the underlying trend is that our away tends to grow more than the home.

And now between complex and simple, I guess that you mean bookings that include more than just the mere booking functionalities or bookings that we are selling with additional technologies on top of it, I would say that’s the vast majority of what we do today. So we are increasing our selling of merchandising, ancillaries, and I think that Luis has mentioned during his presentation that the growth in these sales have been quite large and that option by the travel agency channel is also accelerating.

So the growth of sales in the indirect channel in these kind of services has been quite strong during 2016 and we expect that these will continue in 2017.

50-50 for the platform, your platform or for the markets, sorry just to clarify?

Our platform.

Perfect. Thank you very much.

Yes just another comment, I mean it truly depends a lot on the individual markets but as you know, the biggest part of disintermediation was coming from the home market. In the past, it’s normal that the trend is always to have more away bookings as years combined.

Of course if you have an increasing market sale in a market that is more domestic displaced internally, I mean for one specific year, but overall the trend is that disintermediation happens much more in the domestic than in the home market.

Great. Thank you very much.

Good afternoon. Thanks for taking the questions.

I had three if that’s alright. So the first one was actually a follow up on Adam’s question really, so wanted perhaps Luis, to get your view on the full content agreement across the industry more generally.

Do you think it’s possible we see more carriers over time engage with the GDS but still look for some kind of a more flexible agreement in our traditional full content because contract that you’ve traditionally signed or do you think that concept remains as it always was? The second question was around Altéa, obviously you’ve got a very good pipeline of deployments in Altéa this year.

I guess if we look at in 2018, at least it’s possible that those new deployments slow down, you’ve won so many of the large airlines there’s probably less really big ones to win. So if that does happen, should we anticipate the CapEx should also come down significantly as they essentially -- and are beginning to slow down or are they are going to be other things that you think will probably keep the CapEx in a steady kind of range that we see at the moment?

And then the third question was on the margins in the GDS, obviously we saw may be there was some one-off factors but we did see a deterioration in the margin in the second half. I know that you pointed out that you’ve seen some competitive pressures broadly similar to before, but I guess I think I’m right in saying that your U.S.

growth is slower in the second half which traditionally has been margin dilutive. So if you like, is it fair to say, that those competitive pressure is a little bit stronger today than they have been?

Thanks.

Okay. Let me talk about the first one.

What we will see in the future, in my view, and what we’re already seeing, we have very different airlines around the world, different mix of airlines, some of them are much more domestic, some of them are more global and international. We also see different merchandising strategies, different ways to address merchandising to their customers, different strategies from the direct channel.

So we will need to see that the deals that we have as a GDS, on the distribution front will vary depending on the objectives of the airline and of course, we will support the different strategies, commercial strategies I will say that the airline has in mind. It is also true as we move more to merchandising in the future to dynamic pricing, the airlines will try alternatives and we’ll see different models and therefore our full content, the way it is defined of course need to evolve and we haven’t done that in many years.

So I cannot give you an absolute answer, I think the industry is evolving. We are supporting the airlines in their objectives, in the way they really want to address their different customers and flexible in the way we deal with contracts and with the agreements that we have with them.

There will be some airlines to which a strategy will be different and today, with some airlines, as you know, we have the long-term and full content agreements and everything is included in that airlines, have been trying in different geographies to really have content for the base fare and then merchandising capabilities with alternatives. So this is happening – I mean the industry is evolving according to the needs and to the evolution that the technology is allowing them to really enter into other space.

That’s why I mean we are investing heavily on our merchandising capability with airlines as part of our technology solutions to them both for the direct channel and the indirect channel, sophistication in the way the airline fix their pricing, move the ancillaries in place, their families and the whole relationship between the different players in the industry is evolving as we speak. It’s impossible to say that with this airline we’ll have this kind of agreement and we told that airline something different.

I think there will be a mix of agreements, a mix of conditions where we will try to support the provider with different channels and the GDS as we have always said is a very efficient way to really distribute through the indirect channel, but of course, as you know, support the sales in the direct channel.

In terms of your other two questions, the CapEx slowdown, I think that we have provided an outlook that is to remain between 12% and 15% and it’s true that if you see the evolution of our CapEx in the last years, we have some years ago 50% of our CapEx related to customer implementations and only 20% for example, was to incremental portfolio and now we have the opposite. So we have 50% which is coming from investment on new solutions whether they are for the airline, on the distribution or on the IT Solutions side or whether they are for other providers and the implementations has been decreasing precisely because we are leaving behind us large programs which will be the trend in the future.

Hopefully, that will also revert once we start implementing large hotel into venue platforms and more airports etcetera, etcetera. But no, the absolute investment will remain in that range and we told you during our Capital Markets Day that yes, there will be a slight decline but not that we are not going to invest because we have many things going on and we continue to focus on the technology as a key driver to our success, and therefore we will have CapEx as we have always had.

And in terms of the margins on the GDS, yes, we don’t adjust. As you know, we provide you the numbers with everything included as we want you to understand what is the underlying evolution, we do tell you that every now and then, we have things that happen in a given quarter that may impact in a given year that may impact.

So in these cases, it’s basically local taxes and of course, we work in different - in almost every country around the world and sometimes we have taxes issues with local tax authorities, but we accrue because what do we do is be very conservative. So we accrue for all of these things and it happens with - related to both, airlines or travel agencies that may have difficulties.

And in this case also, the performance of our year was very good and that has implied a higher accrued for the bearable part of the remuneration of Amadeus employees because we had a very good year. So that’s the three things that usually are not recurring and therefore has been impacted our margins in the distribution and that’s why we have this - but we don’t adjust for it because it’s part of our business and therefore we consider that is part of the real business and that’s basically it.

But we don’t see, if you exclude these things, farther deterioration compared to what we have and yes, it’s true that we have pressure from our competitors which has been seen their market share under pressure and therefore there’s been higher cost of the bookings we acquire and this is something that has been happening over the last years and I think that we have been acknowledging that. You also have the mix, depending on which region you roll faster or lower that can impact the cost of the variable remuneration to travel agencies and also, you know that we have distribution fees which also depending on where you’re growing may differ in the unitary incentive that we are paying.

And the same thing happens by customer segments, so it’s not the same but you have with large travel agencies or what you have with a smaller travel agencies, online, offline, etcetera, etcetera. So the mix also impacts the cost of our bearable remuneration to travel channels.

That’s very helpful. Thank you.

Hi. Thank you for taking the questions, a few if I may.

Just to follow up on the previous question on Distribution contribution margin, I understand that you’ve said that excluding the impact of the non-recurring items the contribution margin decline was in line with previous years. Just wanted to understand what this decline meant?

If you predict the last five year’s average decline in contribution margin, it’s around 80 basis points, is that what we’re supposed to expect for 2017? Second question is on just the housekeeping, on tax rate, 28% is what you did in 2016, is that what we should expect in 2017 as well?

And the last one is IHG content agreement renewal, can you comment on whether it’s coming up for renewal sometime in the next two months or later this year? Thank you.

Okay, let me try to drive you through it. What I was referring to the distribution margin decline is that we usually have a trend of declining the margins on yearly basis around 0.5 percentage point during the year, we’ve had years where it was a little bit more, we’ve had years where it was a little bit less, and that’s the normal trend and that’s what we are also guiding you in the outlook of 2017 where we are saying that, we will have a slight expansion from IT Solutions and a slight decline on distribution.

So, up to you to figure what that exactly percentage-wise will be.

Okay.

On the tax rate, yes, 28% is 2016 and more or less the same for 2017. I think that we have also said that the renewal of IHG would be during 2017 and what we don’t give is the specific month because we always have conversations with our customers and therefore, we’ll tell you once it’s agreed on due course.

Thank you.

Thank you. Good afternoon.

There were some leadership changes at the end of last year with Holger leaving and Laurens taking over. Can you sense there’s been changes in your go-to market, do you still sell separately the Distribution and IT Solutions portfolio or is that now combined?

And then secondly, in terms of the balance sheet clearly de-levering quite quickly there, given your cash flow guidance for this year you’re likely to be somewhere beneath the one-time leverage by the end of the year. Is there a pipeline of M&A that you expect to execute this year which will sort of preclude any buyback or special dividends or when would you expect to sort of look at the balance sheet perhaps at the AGM which you’ve been - to announce buyback dividend special at that point?

Thanks.

Okay, so let’s start with the first one. No, there are no changes in our go-to market strategy.

It’s not that we go with a joint effort to airlines, I mean we always have people dealing with airlines, we have an organization we have our account management the relationship with airlines, yes in some cases everything is related to airline is discussed including only products that we have on our IT, our Distribution our whatever, we have in front of airlines because of course we have an overall relationship with them. In some cases, it’s completely independent, in some cases we have a contract and then we talk about individual products or what we always had these people facing the airlines and there is nothing relating to change in our strategy or our change in the way we deal with airlines.

Of course what we try to provide an overall service as much as we can, and the strategy has been consistent throughout many years. And yes of course when there is a change in someone in the team, this person brings fresh and new ideas to the way to address the market.

But overall, we expect to really continue having a good relationship with both our travel agencies and our airlines overall and continue delivering what they expect. The second one is about delivering…

Yeah, I think that we have clearly said many times, our main focus is growth and continue to diversify and continue to expand whether it’s into the businesses, different verticals, additional solutions. So our preferred use of capital is to support this growth whether it’s organically or via M&A.

I think that in the recent years, we have been quite active in M&A doing lot of deals such as Navitaire or Newmarket, this year we have also tried to acquire the remaining part of i:FAO etcetera, etcetera, so we are quite attentive to the opportunities that may appear in the market and of course, if possible, we will go for that because that’s our main target. But in absence of M&A, you are right, we will probably be - the leverage in because we generate the cash flow and as we maintain our capital structure ratio, we will have to do shareholder remuneration some time.

Okay. Thanks.

Hi. Thanks very much.

Just got two quick questions. You referred I think Ana in response to previous question the contribution margin obviously, steadily declines by I calculated sort of 60-70 basis points a year.

The question is how much further into the future can the model persists where you continue to gain market share, the contribution margin falls and you sustain - profitability in GDS. Do you have a view as to whether this is a three to five year strategic plan or whether this can continue indefinitely?

It depends on where the growth comes from. As you know, we try to keep the like-for-like profitability of the different business, the different solutions, the different activities as much as we can.

And therefore, declines in margins that come from having more cost for the same kind of revenues are not good and we try to avoid that as much as we can. The other kind of dilution in margin not always comes from competitive pressure, it also comes from different mix, different types of growth, different solutions having different profitability as I was trying to explain to Stacy on the IT Solutions that also happens on the Distribution part where the non-booking revenue not always has the same margins as the booking revenue, etcetera, etcetera.

And therefore, what we try to grow in absolute terms and accelerate this growth and we try to maintain the profitability at each of the different market, customer segment, type of products, etcetera. And then you have a mix and sometimes competitive pressure, so I think moral can run for a long while doing this and in fact, what we’re seeing is an acceleration in growth which we believe comes to prove that doing more seems for our customers both the travel providers and the travel agencies has proven to be a good business where we continue to grow despite the fact that I think that everybody believes that the distribution business was kind of already quite mature.

Okay. And just I think you mentioned in the management report, the low cost carriers, I think the volume grade there was 15%-16%.

What proportion of your bookings are now with low cost carriers?

With us 90 low cost carriers content available in the platform and yes, you’re right this consistently has been growing double-digit. It started from a low base in numbers of bookings and is still – they are not 10% of our total bookings but is growing quite steadily year-on-year.

Is it close to 10%, is it sort of - meaningful?

You know that if I would have wanted to give you the number, I would have put the number upfront.

Okay. And then just final one if I could, on the obviously there was - I appreciate that it’s influenced by mix and so forth, but the average reservation fee up again this year.

Is it fair to assume that all of the leverage on the - any increases in price on the reservation fee are always on the away side or does sometimes that happen on the home - the local fees as well?

You have a little bit of everything. You have upside of solutions but you brought on top of them – booking functionality which is improving the average booking fee.

You have although notice here the ForEx impact if you’re looking in long-term trend and then you have especially the mix which is what is basically driving and – 2016 the renewal of some customers that have favored the booking fee average. But when we renew contracts with the airline, the booking fees varies depending on the combination of all these factors.

So there is no specific trend on one or the other.

Okay. Thanks very much.

Hi guys. Thanks for taking the question.

So just going back to the distribution contribution margin, could you just be very clear and say whether you expect the decline in margins would be less than it was this year in 2017? And in terms of the way you’re seeing the margin pressure, is that coming mainly on the OTA channel or mainly on the traditional TA - travel agent and TMC side from competition, more traditional competition with Sabre and Travelport.

And if it is the OTA side of things, does the margin pressure kind of level off at a certain point where you basically say to them, okay, if you think you can get, -- if you think you can do better by moving to Direct Connect, please go and try them, I’m sure you wouldn’t be quite as brazen as that. But is there sort of a natural limit to how low the margins can do on the OTH channel that you might reach in the near to medium term?

And then just finally on the Hotel IT side, you mentioned, you’re developing a PMS as well as a CRS. How much dependency do you think that major CRS sales with the large chains would have on completion of the PMS development as well and offering an integrated solution there?

Okay, let me try to see if I clarify the Distribution contribution margin for once. Yes, we had things that are normally non-recurring during 2016 that has impacted negatively on margins.

So despite the fact that our guidance is slightly dilutive, that means that we do expect less deterioration of the margin in 2017 compared to what we have seen in 2016, but in line with the trend that we have seen other years. So that hopefully clarifies that.

Now, where the pressure comes from? I have tried to explain previously that our margins deteriorate I’ve tried to explain previously that our margins deteriorate by several factors and when I meet pressure, it’s usually our competitive which offer incentive effectively the same way we do to the travel agencies.

Of course, they do it in all the markets, in all the channels, in all customer segments because that’s the way we grow to our business. And of course we intend to grow as much as we can in all of the customer segments because they all have their business morals and they all offer a good distribution channel and on top of that, I think that we have also tried to explain that usually is the traveler who chooses what kind of channels they are going to be using in order to do their reservation and therefore, we tend to be present in all of the different segment and in all the markets.

So, no. Now, if you are saying, are you in negative ground within a specific customer segment or in any specific market and therefore you still have this?

The answer is no. I think that we have also explained many times that when we see contracts that are really not worth it, we have let go some travel agency every now and then, and in general terms, of course, we have positive relationships in terms of financing with all of the customers that we have on the business.

Okay, for the CRS and PMS, I mean in the past years, CRS and PMS were two different solutions and very often - where you’ve seen different providers or in some cases in house solutions and for another – for the PMS could be a fair party. So that was not linked.

We believe there is a big advantage of having a consistent view between the CRS and PMS, we’re also coming with an offer which is not so much property related because it’s not installed in the hotel, but it’s, as you know, a cloud solution and therefore there are big advantages of having a consistent deal between the CRS and the PMS. However, we may also have different needs and different strategies of the hoteliers and therefore they may choose the CRS or the PMS and we will commercialize both on a standalone basis.

But to have both together will bring, in our view, big advantage to the hoteliers. So in the past, as I said, it was not the case but in the future, more and more in my view as soon as we have our solution that is good.

This will be a big advantage to the different hotel chains.

Hi, good afternoon. Thanks for squeezing me in.

Just wanted to touch on your free cash flow, it was very strong this year, quite lot ahead of guidance when you’ve been tracking ahead of guidance for whole year. Is there anything, any sort of one-off or maybe any prepayment related to big migration that explain why this was strong compared to what you had in mind at the start of the year?

And in that context, how should we understand your 2017 guidance? Thank you very much.

No, the answer is that we have been outperforming in everything. So when you look at the outlook we gave for the beginning of the year 2016, we have done better in revenues, we have done better in margins, we have done better in EBITDA.

We have remained more or less in the line of the CapEx that we gave to you and as a consequence of course, our free cash flow has accelerated. So I think that way we outperformed probably market expectations and even our own internal expectations and that’s also related to what I was saying before of personnel pay-offs which is not usually recurring.

So we’ve had a very good year and that have translated into last line which is the cash flow.

Alright. Thanks, Ana.

Yes, thank you very much for attending this call and we will talk again with results of the first quarter. So thanks again and have a nice weekend.

Bye.