Bloomberg News

Amadeus CFO Studies Ways to Boost Stock Including Buyback

October 10, 2011

(Closes share price in third paragraph.)

Oct. 10 (Bloomberg) -- Amadeus IT Holding SA, the world’s biggest processor of travel transactions, may consider buying back stock or paying more dividends as its profit increases, Chief Financial Officer Ana de Pro said.

Amadeus is studying how to boost remuneration to shareholders, de Pro, 43, said in an interview. The Madrid-based company also plans to list American depositary receipts in the short term, she said. The shares rose as much as 3.1 percent.

The stock began trading last year after Amadeus shareholders raised more than 1.4 billion euros ($1.9 billion) in an initial public offering. The average stock-price estimate of 23 analysts is 16.62 euros, according to Bloomberg data, while the shares have dropped 20 percent this year to 12.505 euros. The initial stock price was 11 euros.

“There’s room to improve shareholder remuneration, without a doubt,” de Pro said, speaking at the company’s headquarters. “Share buybacks make sense when the stock price is below the value of the company.”

The travel services company’s adjusted earnings per share will probably rise 8 percent this year, according to the average of 12 analysts’ estimates gathered by Bloomberg in the past 28 days.

Shares Gain

Amadeus rose 4.4 percent at the 5:30 p.m. close in Madrid, compared with a 1.1 percent gain for the benchmark Ibex-35 index. Amadeus’s 750 million euros of bonds due 2016 are trading at a spread of 299 basis points above the benchmark mid-swaps rate, according to Bloomberg data. The notes were first sold July 4 at a spread of 215 basis points.

The company said in February that sales at its distribution business, which provides a processing platform for travel products and services, will increase 4 percent to 6 percent from 1.99 billion euros last year. Its information-technology division’s sales will expand 5 percent to 8 percent from 601.4 million euros, Amadeus forecast at the time.

Amadeus maintains those goals, though it isn’t immune to the global economic slowdown, de Pro said. Distribution revenue rose 8.5 percent last year and IT sales gained 18 percent.

“We don’t live outside the rest of the world,” de Pro said. “The world has suffered and we have suffered as well.”

Growth ‘Guaranteed’

Amadeus, the largest global distribution system for the travel industry, said it has a 37 percent market share. The company’s main competitors are Sabre Holdings Corp. and Travelport LLC.

Earnings growth is “guaranteed” as more airlines sign up for its computer services, de Pro said.

Amadeus has a policy of paying 30 percent to 40 percent of net income as dividends. The board hasn’t yet made a decision on this year’s ratio after paying out 35 percent last year, de Pro said.

Air France, Deutsche Lufthansa AG, SAS Group and Iberia Lineas Aereas de Espana SA founded the company in 1987. The shares began trading in 1999 and private-equity companies Cinven Ltd. and BC Partners Ltd. bought Amadeus in 2005.

Lock-Up Expires

A so-called lock-up period that restricted Cinven and BC Partners from selling their remaining 3.4 percent stakes in the company expired Oct. 8. Cinven and BC Partners sold a 9.2 percent stake in Amadeus in July at 13.90 euros a share.

Amadeus provides information services for airlines, car rentals, cruise lines and hotels. The computer-service unit has about 140 airlines as customers, including British Airways and Qantas Airways Ltd.

Amadeus agreed to a 2.7 billion-euro credit line, refinancing its debt in May. It included a 1.2 billion euro bridge loan, of which 750 million were already paid off with a bond sale completed in July, according to the company’s regulatory filings.

Amadeus may refinance the remaining 450 million euros in bond markets this year if markets stabilize, de Pro said.

“The bridge loan has a maturity in two years so we have plenty of time,” to refinance, de Pro said. Amadeus may issue 450 million euros to 500 million euros of bonds, she said.

Amadeus’s debt is rated BBB-, Standard & Poor’s lowest investment grade.

“Amadeus inevitably will improve its investment grade level because we generate a lot of cash,” de Pro said. “We will be de-leveraging,” even as Amadeus invests in its business and possibly boosts shareholder remuneration, she added.

--Editors: Thomas Mulier, Tom Lavell

To contact the reporters on this story: Manuel Baigorri in Madrid at; Esteban Duarte in Madrid at

To contact the editors responsible for this story: Angela Cullen at; Paul Armstrong at

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