In 2012 Amadeus successfully delivered against its targets, achieving profitable growth in both its business units. At group revenue level, growth stood at 7.5%, supported by growth in both its business lines. In turn, EBITDA increased by 6.6%, leading to an 18.0% growth in adjusted profit for the year, assisted by lower interest expense.
Indeed, 2012 was a strong year for Amadeus, despite a difficult global macroeconomic backdrop and weak levels of business and consumer confidence. Once again Amadeus benefitted from its successful business model, which provides strong resilience and economies of scale. In addition, our continued investment in R&D and differentiated value proposition allowed us to deliver market share gains, adding new clients to our platform, both in Distribution and IT Solutions.
In our Distribution business, in 2012 we achieved 5.8% revenue growth, despite limited industry growth, which was negatively affected by a weak macro environment, particularly in the second half of the year. Growth was supported both by our market share gains (0.9 p.p.) and average pricing, as well as the positive impact from the translation of USD flows into Euro. We successfully extended all distribution contracts with airlines due for renewal, notably Qantas, Delta and Air France KLM, and continued to expand the content available to our travel agency subscribers, with the addition of 8 new low cost carriers to the platform. We also signed some important travel agency contracts, including Expedia, the largest online travel agency in North America.
Strong results were also achieved in the IT Solutions business, with a 13.0% revenue increase driven by a remarkable increase of 28.4% in processed PB. Also, we continued to expand our Altéa portfolio with the launch of our new module, Revenue Accounting. At the same time, 10 new Altéa contracts were signed and the pipeline was further reinforced.
Innovation is at the core of our strategy, and as such investment in R&D was further increased by 20.2% in 2012, reaching 14.2% of our revenue. Client implementations, product evolution, portfolio expansion and investment in new opportunities which may expand our total addressable market represent the majority of our investment.
As of December 31, 2012 our consolidated net financial debt was €1,495.2 million (based on covenants’ definition in our senior credit agreement), representing 1.34x net debt / LTM EBITDA. This is a significant decrease of €356.7 million vs. net debt of €1,851.8 million as of December 31, 2011, or 1.75x net debt / LTM EBITDA. Our financial structure was further strengthened with the signature of a new loan with the European Investment Bank and a new Revolving credit facility.
In October 2012, having reached the top end of the stated capital structure target (1.0x - 1.5x net debt / EBITDA), the Board of Directors revised the dividend policy, increasing the pay-out ratio to between 40%-50% from the previous 30%-40% of the consolidated profit (excluding extraordinary items).
On June 30, 2011 the Group completed the sale of Opodo Ltd and its subsidiaries. In 2011, Opodo was presented as a discontinued operation in our Group income statement. As a result of this sale the Group booked a gain of €270.9 million. This gain, together with the extraordinary costs related to the sale, are presented within “Profit from discontinued operations”.
On April 29, 2010 Amadeus began trading on the Spanish Stock Exchanges. The Company incurred extraordinary costs in relation to the offering that impacted the figures for 2010, 2011 and 2012.
For the purposes of comparability with previous periods, the figures for 2010, 2011 and 2012 shown in this report have been adjusted to exclude such costs.
On May 6, 2011 Amadeus announced that it had agreed to dissolve a contract under which United Airlines previously planned to migrate onto the Amadeus Altéa Suite in 2013. United Airlines agreed to make a one-time payment of $75.0 million to Amadeus for the cancellation of the IT services agreement. The payment was made effective in Q2 2011 and recognised (in Euros, in an amount of €51.7 million) under the “Revenue” caption on the consolidated statement of comprehensive income of our financial statements.
For purposes of comparability with previous periods, this revenue, as well as certain costs of migration that were incurred in relation to this contract, have been reclassified from revenue and other operating expenses, respectively, to the Other income / (expense) caption in our Group income statement shown in this report.