HBX GROUP INTERNATIONAL PLC (HBX) Q3 2026 Earnings Call Transcript

Hello, everyone, and welcome to HBX Group Trading Statement, third quarter, full year 2026. Please note that this call is being recorded. After the speaker's prepared remarks, there will be a question and answer session. If you would like to ask a question during that time, please press star followed by one on your telephone keypad. Thank you. I'd now like to hand the call over to Isabel Green, Director of IR. Please go ahead.

Thank you Ellie and good morning everyone and thank you for joining us today for our Q3 trading update call. With me on the call today are Nicola Seuss, our Chief Executive Officer and Brendan Brennan, our Chief Financial Officer. We'll begin with a short overview of the quarter and our outlook for the remainder of the year before opening the line for your questions. If you're joining on the webcast you can submit questions through the Q&A box but if you're on the conference call. As Elie said earlier, you can register a question at any time on your keypad. Before we begin, please note today's call, we will be making forward-looking statements which are subject to the usual risks and uncertainties as actual outcomes may differ. With that, I'll hand over to Nicholas.

Thank you, Isabel. Good morning, everyone. Maybe I'd like to start before moving into Q3 with a few words about our leadership transition announcement that we've done this morning personally it has been both a pleasure and a privilege to lead the group for almost five and a half years and i am planning my retirement absolutely comfortable in the knowledge that i will be leaving the business in a good place and in good hands and i have full confidence in brandon the smt and our teams to keep delivering on our strategy and to accelerate the next phase of the company as our cfo brandon has played a central role in shaping and executing our strategy as a public company and as you every one of you know he has the deepest understanding of our business turning now to q3 over the last year we have talked a lot about becoming a more agile more customer focused and more accountable organization The operating model changes that we introduced last October were, if you remember, designed to unblock execution across the organization, bringing decision-making closer to customers, increasing accountability, and improving speed of response. From my perspective, Q3 shows those changes are working. what was particularly encouraging in the third quarter was the speed at which hbx group responded to changing market conditions shorter looking windows and of course a volatile operating environment due to the continued disruptions in parts of the legalism we performed strongly despite changing external environment by remaining agile by supporting our partners but also by adapting quickly to the shift in demand patterns as a result we generated 12 percent ttv growth and a revenue of 177 million euros of course the conflict in the middle east had a clear impact during the quarter we saw lower travel activity within the regions and disruption across long haul corridors particularly between in Asia, Pacific and Europe. However, the global leisure travel demand was resilient and we saw booking trends improving as the quarter progressed. I think probably the most important message today is what our performance this quarter demonstrated about our business. We took fast action to redirect commercial focus and resources toward areas where demand was stronger through targeted pricing, focused sell execution, and close partner engagement. We supported volume, we captured opportunities, and this is exactly the type of active commercial management we set out to create. A year ago, if you remember, we had less ability to influence the outcome. Today, we are actively managing the performance. This is what I meant when I say we're a better business. On the sourcing side, we increased the use of third-party supply and this is helping us to broaden inventory coverage, unlock additional growth opportunities, respond faster to changing demand patterns. We've made good progress on global chains, our top partners, but also select our new way to address the longer tail of hotels and partners. On the distribution side now, we continue to accelerate growth with leading global and regional distributors, increased share of wallets, and we also secure long-term commercial relationships. Alongside this, we have continued to execute against our strategic priorities across the accommodation growth, the ecosystem expansion, developing a new and expanding partnership, the acquisition of Regify, and of course, the continued deployment of AI-powered capabilities across the organization. To conclude, Q3 demonstrated the benefits of the changes we have made. In a quarter marked by market disruption, by volatility, the agility of our operating model enabled us to respond quickly. Leisure demand remained resilient, booking trends improved through the period, and our actions helped drive growth. Our turnaround since last year gives me confidence in our future success and our ability to thrive as AI reshapes the industry. I'll now hand over to you, Brendan, to discuss the co-op in more detail.

Thank you, Nicola, and good morning, everyone. As Nicola said, our Q3 performance was strong despite the difficult external environment. Group TTV increased 12% constant currency to 2.4 billion euros in the quarter, while revenue was 177 million, down 3% of constant currency. Growth was supported by targeted commercial actions, increased exposure to faster-growing supply and distribution channels, and stronger contribution from shorter lead-time bookings, third-party supply, and OTA demand. Year-to-date, TTV is up 15%, and revenue is broadly flat. The Middle East disruption was clearly the most significant headwind in the quarter, represented an estimated negative 4 percentage points headwind to group TTV growth. Excluding this impact, of course, TTV growth would have been approximately 16%, and revenue growth approximately plus 1% at constant currency. this is actually slightly better than the assumptions we outlined in h1 and reinforces our view that business performed well during the quarter from a regional perspective performance was strong in europe and the americas and how i describe it in in mea pack which is middle east and the apac was relatively resilient europe remained supported by inter-regional and domestic leisure demand with southern europe continuing to perform well the americas delivered strong growth reflecting the word cup of course related travel in particularly the us and canada as well as continued strength across regional distribution channels mia pack remained affected of course by the middle east conflict but aged pacific trends improved as flight capacity recovered and long-haul demand into europe began to also in cover recover i should say turning now to the dynamic between ttv and revenue we've been talking for some time about the trade-offs associated with pursuing some of the fastest growth and growing opportunities in the market as the business has evolved we have deliberately prioritized growth market share and partner relevance in areas where we see attractive long-term opportunities and where scale matters as h1 we broke down the key drivers of the change in more detail on the slides that we distributed to you guys. Those drivers remain unchanged today. Business mix, targeted commercial actions, together with certain non-trading revenue effects. We took some tough medicine to strengthen the long-term position of the business that involved decisions supporting growth opportunities and positioning the platform where we see the greatest potential over time. What is encouraging is that we are starting to see the results of our actions with the take rate evolution stabilizing. Q3 take rate was down 1.1 percentage points year on year compared to the decline of 1.7 percentage points in Q2. That is broadly the progression we expected to see and reinforces our view that the actions we have taken together with underlying mix effects are evolving as we anticipated. Now turning to some of the strategic execution during the quarter. Commercial progress continued across accommodation, ecosystem expansion and AI. In accommodation, we strengthened key partnerships, including the expansion of our relationship with lastminute.com and the strategic agreement with Sabre we announced yesterday. In ecosystem expansion, we enhanced collaboration with the Emerging Travel Group, announced new airline and OTA partnerships, and completed the acquisition of Bridgify, which adds AI-native technology capability and expands our experiences offering. On AI, we remain focused on practical use cases that improve productivity, commercial execution, and scalability. We are already deploying AI-powered capabilities across a number of workflows and continue to see opportunities to improve automation and efficiency across the business. Let's talk a little bit about guidance for the remainder of the year. As we move to the second half of the year, a greater proportion of FI26 is now delivered and or on the books. Q3 performance was slightly ahead of expectations, helped by a rapid response to changing market conditions. We are confident in the full year outlook and have narrowed our TTV guidance to reflect that confidence to the range of 13 to 15 percent and our revenue now in a range of minus two to flat, with an estimated 10 wind, of course, of around three percentage points coming as a result of the Middle East crisis. We continue to see resilient leisure demand, gradual recovery in previously disrupted travel corridors and the positive impact of commercial actions across the business. At the same time, we remain mindful that booking windows are short and the geopolitical backdrop remains volatile. Adjusted EBITDA guidance remains unchanged at minus five to minus two percent. And we continue to expect operating free cash flow conversion of 90 to 100 percent. Looking beyond 2026, our medium term ambition remains unchanged and we expect to make progress towards it in 2027. As we do so, there will be a number of moving parts, including the full year consolidation of recent acquisitions, the continued normalization of the cost base, including variable pay, of course. And our focus remains on executing well, actively managing the business and delivering against the guidance we have set out. Finally, our capital allocation framework reflects our strong financial position. We continue to invest in strategic priorities, including products, technology and selective M&A opportunities. that strengthen the platform and the ecosystem while maintaining balance sheet flexibility. During the quarter, we paid our 18 million initial interim dividend and executed a further 20 million of our 100 million share by RAC program, totaling 38 million paid out in the quarter. Year to date, we have returned approximately 50 million euros. Thank you. Operator, we'll now hand the floor over to questions.

Thank you. We are now opening the floor for question and answer session. If you'd like to ask a question, please press star followed by one on your telephone keypad. That's star followed by one on your telephone keypad. Your first question comes from the line of Leo Carrington of Citi. Your line is now open.

Good morning. Thank you for taking my question. um before i ask it nicola thank you and congratulations on your retirement over i've enjoyed working with you in terms of the question look i'd be very interested in understanding more about this summer's mix changes in particular to what extent is the shift towards online travel agents and third party supply because the available travelers to you have moved towards these channels or is it because the lower levels of long-haul travel mean that you've expanded into mixed types that you might have deemed less attractive in 2024 or

outside the scope of your strategy in 2024 the reason for the question is I'm trying to understand what might happen to mix in FY27 assuming finally we do get a resolution of the Middle East conflict thank you hey probably it's for you brendan thank you very much for for your comments do you want to go into the mix yeah sure thanks uh nicola um i think it's it's it is a good question we have seen as you said quite rightly strong demand in the ota and and third party elements of our business uh during the quarter it has been uh we've seen strength there and we referenced this in the first half of the year we had seen strength in that first half we continue to see it in the summer period, certainly into our Q3 period. And our expectation is that it will actually remain in the fourth quarter. I mean, as we think about a lot of the things we talked about in the back end of last year, particularly, and as we came into more importantly, as we came into 2026, I think we were very open and straightforward about the fact that we needed to change the mix of our business to better reflect the dynamic marketplace in which we found ourselves, a marketplace that was more concerned about geopolitical uncertainty, that was making shorter lead time decisions. And certainly we've seen that play out during the course of the year. In fact, if anything, we could say that, you know, the agility and the ability to move faster has actually protected our business during the course of the year. That's very much how I feel about our performance in Q3. I think if we weren't a more agile business with a different mix as we see it on the books at the moment from where we have been historically, we would not be as resilient in the marketplace and be able to do the guidance that we're seeing at the moment. So I do think it was a deliberate piece on our behalf. It certainly has played into OTA and third parties. I don't see that moving hugely in terms of proportionality of the book of business. It is increased. and we talked about third parties well we don't talk specifically about the proportionality of OTAs we have seen increase in that broadly and the third parties piece we spoke about being around circa 15 percent last year we did say that we expected that to be 15 to 20 percent and we'll certainly exit the year with closer to 20 percent in that book of business but again reflective of that short lead time curve that we're seeing in the marketplace and reflective of it I think to your point maybe just the final point on this on this question i do think you know as there you know as uncertainty and geopolitical uncertainty uh decreases and people's visibility improves that gives opportunity absolutely that gives opportunity to uh the longer lead time uh business which has been historically our strongest part of our organization um so yes i think there is you know uh certainly i hope uh that we would see that and a larger proportion of that as we go forward and we know we can execute very well in that space but the big positive for me is that we also now know that we can execute very very well in the shortly time space as well and that where that really reflects the changes that we made this year and uh and again i think positive changes in a dynamic marketplace thank you that's that's helpful your next question comes from the line of Gilgerme Sampaio of CaixaBank BPI.

Your line is now open.

Hello, good morning. Thank you for taking my questions and thank you, Nicholas, for this time. The question is on your guidance. So your guidance implies a 9 to 15 percent constant currency TTT growth in Q4 versus an 11 percent exit rate in Q3. And your comments assume some progression throughout the quarter, so I assume that the exit rate of the quarter is above these 11 percent. On the other hand, there's an improvement in terms of comparable base in Q4 versus Q3 last year. So last year's grown about five percent in Q3 and two percent in Q4, so that's a three percentage point improvement. So my question is, within this guidance range, what you're considering in the low end and in the high end, and what could lead to the acceleration, assuming that we don't have a reversion in the current diplomatic efforts around the Middle East conflict? And the second question is regarding your view or initial view regarding the 2027 fiscal year. So is there any factor that could prevent you from achieving your midterm guidance already in 2027? Especially considering that, again, the comparables of fiscal years in 2026 are easier than in a normal year.

Thank you. yeah i'll take i'll take a crack at those ones and thank you for the questions um you're quite right uh the there has been significant improvement year over year in terms of our ttv outlook particularly uh in q3 q4 versus the same period last year so very very significant improvement and we're very happy with that in terms of our progress and some of the points i made on the last uh the last question which is you know that good ability to flex in the marketplace and to be relevant in the marketplace and to take share indeed in the marketplace. So we're very happy with that. Yeah, I think the range is there. I mean, at this point of the year, to your point, we do have, you know, a good amount of visibility on our trading at this point. And usually I would steer people towards the midpoint of ranges if they wanted greater certainty around, you know, where to put their numbers. And I certainly would say that was the case in this particular instance in relation to q4 also as i said we've been very happy with the progress we've seen particularly in ttv we know that the the other dynamic has been it's it's a slightly different mix so that has had um a little bit of impact on our revenue uh progression as we've seen that over the course of the year certainly uh but again i think one of the points i made on my opening comments is that we continue to see better connectivity uh quarter over quarter between revenue growth and ttv growth and that continues as we go into quarter four so i am happy with the progress we're seeing and as i said if you wanted specific guidance on on ttv i would steer you to the midpoint uh of of the ranges but yes very happy with the europea year improvement and a real i think um strong endorsement of our our strategy as we come into 2026. in 2027 fiscal outlook comparing to 26 i suppose yes you're you're right it is a little early for us to be too detailed in our commentary around 2027 obviously we're taking our time at the moment where we're uh anybody who is in the group here could tell you we are knee deep in in budget processes and uh i am working uh well with the senior management team to give us a better visibility to that albeit with shorter lead times obviously that that also reduces our visibility at this point uh you know as we think about our mid-term guidance and how that relates specifically it's 2027. As I said in my opening comments, we certainly see us getting 2027 being a good year of getting towards those midterm guidance outlooks. I think we'll need to keep an eye to the evolution of our business. I think we still anticipate strong TTV growth. I think we still are seeing good recovery in our revenue. And we expect that trend, that connectivity between ttv growth and revenue growth uh particularly on take rate to continue as we go into 2027 um and i think the other piece to maybe note at this point is that we have um to do some rebuilding of uh bonus elements and other pieces like that which obviously important and we want to pay out in full to our to our staff they uh they have been working hard this year and we want to see that uh that they're rewarded for their work as we go into 2027 as well so we'll do some rebuilding of our call space a little bit during 2027 but I'm also I should counter that by saying I'm also excited by the opportunity that we're seeing from technology from the really good progress and that we've seen on AI in internally in our organization and we believe that we really are a strong organization from an AI development perspective and that that will help us broadly as we go into 27 both on in terms of new commercial opportunities but also making us a more efficient business as we go forward. So high-level comments at this point. Good traction, I would say, obviously, as we come out at the end of the year, certainly from a TTV growth perspective, better connectivity to revenue, some rebuilding of cost space to be done, but also good opportunity from continued efficiency.

Thank you.

Your next question comes from the line of Michael brief of UBS. Your line is now open.

Good morning, and my best wishes for the future to you as well, Nicholas. Just in terms of the take rate trend, I think in the first half, you affect pricing and non-trading factors. I know it's only a quarter on, but can you elaborate on that? And maybe as we look at 2027, should those non-trading factors come down to sort of zero basis points, if you like. And then just the last question sort of alluded to the fact you've got a three-point sort of benefit for next year's growth rate relative to 2026. It just feels as though there's still quite a lot of evolution in the business in terms of getting things right, not just responding to the market. Your competitor yesterday's sort of guiding for the mid-teens revenue growth in the sort of six-month period. Just wondering where you feel you are on that sort of reorganization, restructuring of your relationships with hotels and distribution partners and, you know, how much of 2027 will still have some drag effect from that, I guess. Thank you.

Sure. I'll give it a crack again. And Nicola, you certainly comment if you would like to. I think on the takeaway trend that we've seen, we are pleased with the efforts we've seen uh and the progress we're making so as i mentioned a substantial um decrease in the in the absolute level of take rate uh decline if you like between q2 and q3 uh so again it it mirrors uh well the trend that we were talking about and you'll recall in the second half i mentioned the fact that we do expect to see that gap closing i also made specific reference to the fact that actually in sub-segments of our business so if we look at certain portfolios of work we've seen much better connectivity between ttv and revenue um and what our job to do was really to make sure that we were seeing that across our entire portfolio and i think that that progress has has continued as we've come into q3 and as we look out uh to q4 um uh you asked the question around it's it's not just mix it's not just you know lead time there was an element of non-trading items uh we certainly have seen that probably decrease uh as we come into this quarter and that would be my expectation for fourth quarter as well. As I reflect upon that, and we think about that next year, does that go to zero? It probably doesn't go to zero, although I think the meaningful impacts will probably decrease over time as opposed to increase. So I do believe that we should, as I said, see better connectivity between revenue growth and TTV growth. And certainly that's the direction of travel that we're seeing at the moment. But there will always be some timing differences between ttv and revenue recognition so that's that's just part of the accounting in this particular sector so um we'll we'll keep you informed uh of that but trending to zero is probably optimistic but i do think overall uh in terms of mix of business and maybe normalizing some of the the mix shift as we go from this year into next year will have a beneficial impact upon the overall take rate perspective. I think your second question was around the kind of some of the reorganization of the organization we have done in terms of commercial and distribution relationships and I would say that I think we have been super pleased and I'm sure Nicola will comment on this as well but I've been super pleased with the progress we've seen on the distribution business. I mean we called out today yet another number of relationships and expansion of relationships, be that Sabre, Last Minute, and indeed the emerging relationship as well on the M&E side of the business, which continue to show the really strong progress we're making on making sure that we're a really commercially active organization in the distribution part of our industry and continuing to be significantly relevant. I'm also really, really encouraged by total level of ttv growth in terms of our just proportional market share there and making sure that we remain a very big and relevant player in this space a place we expect to very much have a place on as we move forward uh over the next number of years so that's super important to me and i think the guys have made great progress this year i'm very very happy with that i think on on the sourcing side i would say that we we want to see that continue to develop i do think we've got a long-term relationship and a long-term experience with lots of great sourcing partners both on our hotel and our M&E side of the organization I think we do we certainly can continue to optimize that as we continue forward and I'd like to see us be you know I'd probably you know I'd like to see us be more innovative if I can put it that way in terms of how we work with those partners and the offers and opportunities that we give them in the marketplace so I think that's still an evolving part of our business uh but we you know it's very much in line with the strategy and nicola has spoken to in the past and contains a continuation of that as we go into 2017 brendan maybe just you you've covered it very well not to be too long on the same topic i think on what's very interesting also is that when we look at the acquisition which is you know the pipeline for the coming years it usually takes up to two or three years before we would

had a full ramp up the acquisition numbers aren't very strong in distribution and sourcing so it gives us good confidence for for the future okay thank you your next question comes from the line of luca nodsak of berenberg your line is now open hi all uh thank you for taking my questions so just uh three from me if i can um so just the first one on the leadership transition uh you've spoken previously about Nicola's role in setting HBX's strategic vision. So I was wondering with his departure, what should we expect on the strategy side? Is there scope for material changes in direction or do you feel comfortable with where you are? Then second, I want to ask on the full year guidance. So quite a nice upgrade to TTV and revenue, but that revenue upgrade doesn't flow through to EBITDA. So I was wondering what has changed in the cost base to absorb it. and then just lastly on leverage and capital returns so on the current trajectory it looks like you've finished this year at the bottom end of your one to two times range so i was wondering if you're comfortable operating there or would you look to return back towards the midpoint and just kind of like tied to that is i was thinking if there is capacity could you announce a special dividend in the full year results or is that a decision that would have to wait for the new ceo in february thank you yeah i'll i'll kick off on uh on those on those pieces and again nicola please do feel free to join in um on the leadership transition and the strategy changes

i mean the way i look at this is i'm obviously and have been working with nicola very closely for the last year and the strategy that we have as an organization that was developed in that period of time I fully endorse and I think it is a you know a very strong strategy that has delivered well for us during the course of this year if anything I think speaking even to the last point that we've made around you know some of the continuing evolution we'd like to see in our sourcing business around just being more flexible and adaptable for our for our sourcing side relationships but also to Nicholas point making sure that we continue to acquire and expand that is is a continuing evolution of the same strategy so I don't see it as as radically different I think we took that that that step change if you like coming into this year and I think it's working well so it will be a continuation of that strategy as we go forward and certainly in my tenure that's expected exactly where I expected to go with the organization I think just maybe to add to that you know scale and relevance in this marketplace is super important and I think we've seen real progress in that regard during the course of this year particularly happy with the TTV growth in that in that respect and as this market you know is a very dynamic marketplace you have to be flexible and you have to be ready for change and I think we've proven that as part of our strategy this year as well I don't know Nicola if you want to comment specifically on that before I move to the other questions no no specific comment on my side Brandon thank you um thanks thank a lot uh the TTV revenue and EBITDA uh it's a pretty simple answer to that question we are happy with the progress we've seen on TTV and revenue uh but as is our custom and as we did last year as well we are always more disciplined about our EBITDA and so uh while we were guided at the h1 results broader um revenue ranges you'll recall we had quite a tight ebitda range and i suppose my comments at that point in time were if we see the bottom end of that range we will take cost actions to to ensure that we deliver on ebitda we take that commitment to the market extremely seriously extremely seriously um and uh we we did that and we reflected upon that last year with the changes we made to to deliver upon our ebitda range as given to the market and we did we delivered in our original range and uh we obviously wanted to be serious about the range we gave to you guys and so it was it was more of a uh just a a factor of that uh of that element that we were already being uh quite tight and quite controlled with our evita range in the uh in the q2 numbers when we when we re-guided so that was really the factor at play there the final point you asked about leverage and and capital deployment and certainly the return to kind of being in that i think we were at about 1.7 times at the end of page one we're still circa in that ballpark of about 1.7 times debt to eve at the end of the the third quarter um which we're happy with i think we can operate quite well in that space and you know as you guys know uh cyclically we will see you know better um cash flows in the second half of the year um and we still expect to be in a good position from a cash conversion perspective as i mentioned uh for the full year uh in the guidance at 90 to 100 percent and i'll be honest you know and the team will work hard to try to make sure that's closer to 100 percent rather than 90. um so we're yeah we're still i mean i think we we operate very happily in that you know even in that one and a half to two range even though we've said one to two is our kind of official range if you like so uh it's not a not an uncomfortable range for us we do we manage very well there indeed and it gives us optionality as i think about the the future on the deployment and capital deployment we've obviously done a lot this year you know i talked about the fact that we've we've already distributed 50 million euros during the course of this year and that really only kicked off from from mid-february so that's the combination of the the the new dividend that we only put in place this year for the first time and of course then the buyback program which as you roll call is 100 million. For now, we're quite comfortable with that in terms of dividend policy and cash repatriation to shareholders. I do think we also need to be, and we shouldn't forget, consistently we said that our first use of cash will be about developing the organization. I think we've done a lot to show, you know, during the course of this year that we are back on track from a growth perspective. And I think there's opportunity further from an M&A perspective, You know, certainly with some of the smart tokens we've done, like Bridgeify, like Civic Fund, these are organizations that are AI native organizations that really help us move the dial in terms of technology. And it really allows us to, as I said, from an almost, you know, R&D perspective to kind of leapfrog and take bigger steps because we're bringing that AI native organizations into our own organization and really using them to leverage the business. So I see that as a very important part of our capital growth story and our business growth story as we go forward. So I think that will, I think it's important to mention that that's still our primary use. But of course, we'll remain focused on continuing with the good shareholder return that I think you've seen from a cash deployment perspective this year.

Your next question comes from the line of Mark Hyatt of Morgan Stanley. Your line is now open.

Hi, Brendan. Hi, Nicola. Congrats on the quarter and all the best on your retirement, Nicola. I've got a couple of questions, please. Firstly, you revised the assumed Middle East impact for the full year. It's obviously reassuring to hear that some of the corridors have had a better than expected recovery. But I think it's fair to say the situation in the region remains quite dynamic. So could you give us some insights into how trends have held up through July? Have you seen any signs of travel hesitancy coming back? and also obviously with the wildfires that we're seeing in southern europe do you expect this to have a material impact on europe in the fourth quarter um and then secondly you know america's was the clear standout for the quarter um i know you called out the world cup and in the release as a driver um but in the first half growth was also supported by despegar so could you give us a bit more color in terms of what drove that strength in the region thanks hey brendan i'll start if you want me to because you've been doing of course most of the heavy lifting today so i think middle east what we see um i was sharing that with the board yesterday what we see

is a gradual recovery but not a full speed i mean for all of the reasons that you guys know better um if i look for instance at um the the second half of the year we're recovering step by step but uh we're still uh something like 30 percent down versus last year so it's better but not yet there and and you know that for us it's a region with uh that has a specific impact in terms of SPAs and things like that so that's uh that's something which we we keep monitoring and and and we absolutely want to do whatever we can to bring it back at least to the level of last year the q4 uh fire impact in the mediterranean i mean first of all i think it's terrible we we all see that we all follow that and as a mediterranean guy myself i think i'm really incredibly impacted by what's happening now when it comes to tourism what we have observed in the past is that the ability for the travelers to re-adapt is something very important. We saw, for instance, in Europe that the lower cost countries recently have worked well, you know, Morocco, Egypt, etc. So there are always options there. And then what we saw interestingly is the, it's probably because of the certainly because of the the economic impact we saw that uh the two operators were were doing good uh on the past weeks you know it certainly has to do with the price certainty when you buy a package you know and when it comes to america's you you've said it america's is uh has been flying if i can use the expression on q3 it's market driven but it's also action driven on our side now and we've discussed that if you remember already in h1 so we are confident that

we'll keep driving good results in americans your next question comes from the line of victor cheng of bank of america your line is now open hi morning thanks for taking my questions and nikolai uh all the best uh in in the future um first maybe two questions if i look at the ttv in region and revenue by region is it correct to think that you know some regions where we see a bigger gap that you're leveraging a bit more tps or whether you're seeing a bit more competition that and then you talk about uh you know capital allocation is there opportunity for you to potentially do more mna to acquire some of the smaller players and you know specific regions to help expand inventory. And second question is, can you maybe elaborate a bit more on the Sabre partnership? Is it correct to say that your content or inventory was already available on Sabre Mosaic previously? And if so, how is this partnership going to change how Sabre uses end users to channel more bookings to HPX? Conscious of the fact that Sabre processes a lot of corporate bookings as well, Is the tick rate different for these type of bookings? Thank you.

Sure, I'll start off on those, Victor, in terms of TTV and revenue by region. Yeah, I mean, as I said, you know, in my previous comments, we're very happy with the progress we're seeing on TTV. And as you can see in the numbers, obviously, America's being the standout element of that, with europe being very solid and and trailing then miopac as you would expect uh with the um with the overall uh perspective uh you know yes i mean we also see kind of a mix uh impacts in terms of that coming through into uh revenue uh i think it is fair to say that the america is very very strong um but you know a lot of that business is domestic and as we spoke about it's been a strong domestic market it always has been a strong domestic market um but that's very much so the case this year and some of our shift in mix has been more domestic as we talked about you know and being able to access that more domestic market i think is reflective of that uh shift in mix as well so um that's certainly been been been some of the case uh this year um so i mean it you know in terms of the the the the take rate or the mix of take rates or the the revenue growth comparatively i hope that gives you a little bit of color uh there um and of course you've got you know it's always it's a little difficult you know quarter over quarter to give those estimations and we know we've had a lot of mixed change year over year so that number is not as comparable as it was in the past perhaps uh but we do feel that we have a you know importantly a good progression in terms of our mix of business being able to have better connectivity between revenue and TTV growth which is something I will continue to hammer home albeit the mix of business is going to be different in terms of domestic third party OTA and other elements as we go forward which is okay because it makes us more flexible more resilient as an organization I think your second question was around regional M&A from that perspective and you know actually is there opportunity there to to continue to develop as an organization i would say very much so it reflects on the on the on the conversation that we had a couple of questions ago where i was thinking and talking about the fact that we want to continue to be active in mna um i think this is a marketplace that will continue to consolidate over over the next number of years um i think you are seeing it is a you know it's a competitive marketplace uh as well and i'll be very clear that we see ourselves as one of the big players in this space and that we are here for the long term and want to continue to grow both through organic and mna-led growth so yes i do feel that with our strong cash conversion and our ability to generate cash that that gives us the ability to take opportunity in the marketplace so i would be you know very focused on that myself and the management team around using that both from a technology differentiation perspective as i mentioned earlier but also around making sure that we have the right footprint in all of the regions that we operate in and I'll ask I don't know Nicola if you want to yeah yeah very happy to

so that you can grease listen we just announced the Sabre agreement I think as you know you've seen that I mean it's about us plugging our accommodation inventory directly into the saber marketplace and and it's very interesting because i think saber has if i remember something like 250 000 agencies etc so it's just it's just massive no what it means for saber is that they have the lodging contents i mean which is good for them they have they simplify how their agencies access launching content, you know, and hopefully we're providing together a better agent experience. And on our side, it's very important because it helps us, you know, on the retail agency expansion. I mentioned earlier on that the position was on the good side. The difficulty in retail is that if you don't go through networks, of course, it takes more time to go agency by agency. so it's very important because it does accelerate and leverage it does uh help to increase the distribution efficiency brandon was saying that we're incredibly happy with the work david and the team have done on distribution uh and it in this specific saber case it helps you know narrowing the number of systems that the agencies need to access inventory so it's of course it improves adoption and and we're certain from the test that it will improve also conversion and and then finally goes exactly into what we have told you for a few months now we want to make ourselves indispensable with the big players we want to be part of their of their life for quite some time so we want our relationship to be more than a commercial agreement and is it i think you historically you have been a bit more on the leisure side uh is it safe to say that this is one of the first steps maybe to into exploring a bit on corporate hotel bookings sorry so the last sentence apologies exploring a little bit more on

uh on on kind of corporate type of hotel bookings okay do you want to go for this one corporate uh uh brandon corporate yeah yeah it's interesting yeah no thank you nicola yeah no i think it is an interesting element uh we as you guys know historically have not really touched the corporate space and this is an interesting avenue of opportunity for us so um you know you asked the question earlier on i think it was part of your initial question whether the uh where the margin profile in corporate is um is lesser and i think there are some elements And certain elements of with the corporate, you know, book of business, there is more sharing, you know, of some of the upside, be it, you know, on kind of, you know, VAT and other pieces, you know, back with the big corporate you're working with. However, it is a less competitive space in the marketplace. And obviously, we've seen a lot of competition in the leisure space over the last number of years. So I do think this is something that we're super interested in. I think this saver relationship is something that can start us helping with it. We don't have that first in mind. This is more about distribution expansion, so I should be clear on that. But I would think it's fair to say that this is an interesting space and an area where we'd like to continue to develop as an organization. And we see it as kind of almost like a greenfield territory for us to be able to expand our offering as time goes by. Very clear.

Thank you.

Your next question comes from the line of Bonas Puttrue of BNC-30bus.

Your line is now open. good morning thank you for taking my question i've got a couple as well um first of all i mean you highlighted um new distribution partners and also extension of existing partnerships uh i was just wondering if you've used your balance sheet um to win these relationships i think was the case um in h1 um so i was wondering if this is something that you know has continued into h2 as well secondly on mobility and experience i mean can you um give us your your sense of you know how the competition landscape um has been evolving lately uh here whether it has come back growth

um in the third quarter from a revenue perspective and if that was not the case um when can we expect this to happen thank you very much sure i'll uh i'll start maybe um uh on the on the new partnerships yeah we've been very pleased with the the evolution of our business from a new partnership perspective we've talked in the past about the fact that we have uh sometimes used our balance sheet to to have with the development or the kind of initial onboarding costs if you like of some of those significant relationships um you know we i would say that's more occasional uh you You know, while we haven't ruled it out in terms of how we would develop these relationships forward, and we want to use our working capital and our good working capital cycle to support the distribution element of our business as well as the sourcing element of our business, we haven't used it extensively in the last quarter, in this particular quarter. That's not to say that there isn't something that, you know, David and the team are planning that they're going to, you know, do something in the next quarter or in the next couple of quarters. so we do see it as an avenue of opportunity albeit wasn't wasn't heavily impacting uh this quarter in terms of new relationships so we see you know let's be honest we see every element of commercial development that we can do is being beneficial but in the first instance we see ourselves as a very strong standalone distribution channel for people uh with great source uh and great product to be able to distribute so you know we see ourselves as a very very strong offering and a very scaled offering to that point as well. And we want to continue to see these good expansions of these types of relationships as we go forward. And again, if necessary, we can help that with balance sheet, which was one of the real strengths of the organization. On the M&E experience side, we have seen, the way I would describe it is, yes, it's been an active marketplace, obviously. There's a change, there's a slight shift in terms of some of the bigger players, obviously. looking to continue to expand their kind of, you know, ecosystem of different services that they offer. We are, we, as we've talked about in the past, we've been, you know, that part of our business has been one where we think needs a bit more work. I think in the most recent number of weeks and a couple of quarters, indeed, I'm happier with the traction that we're seeing in that business so it is moving in the right direction uh have we gotten back to absolute revenue growth uh there yet uh the quick answer is no there's still work to be done and we still need to continue to improve but the progress we are making is substantial and i think we are actually moving in the right direction there so um it is incumbent upon us and actually some of the technologies that we're bringing in bridgeify for example will help substantially in our in our ability to scale that business uh really britify will be act as a you know an ai enabled way to develop yet you know faster sourcing opportunities to be you know brought into that organization uh and that is something that we're very excited about from the breadth of the experiences that we can generate and put into our platform and then obviously uh put into the distribution engine so we are excited about the future of that business as i said it's it's it's taken a bit more work recently we have We've seen good progress, but more work to do, I would say.

Okay, thank you. And that means that in FY2027, it is fair to assume that these businesses actually return to positive growth.

I mean, that's certainly our hope and expectation.

Okay, thank you so much.

Your next question comes from the line of Carlos J. Trevino of Suntender. Your line is now open.

Good morning. Thanks for taking my questions. and Nicolas, all the best for the future. Two questions from my side. I'm looking at your updated guidance. In TTV, you have increased the guidance by 1% of these points, and you have maintained the high end of the ranks. In revenues, you have increased the midpoint by 0.5%, and you have slightly reduced the high end by 1% of these points. So at the end, you are assuming a slightly lower day rate in the new guidance. My question is if this is mainly given by business mix or by commercial actions that you are taking. And my second question will be on the conflict in the Middle East. My question will be if travel patterns has now normalized the conflict. Obviously, in the last weeks, we have seen that the conflict has got a bit worse. I assume this has an impact locally. But, for example, could we say that travel between Europe and Asia has now normalized by the conflict, or still we are not at this point? Thank you.

Maybe I can start with the second one, Brandon, if it's fine with you, and then we'll get into the mix. I don't think that we can say that travel has normalized in Asia. You're right that when we look at outbound, etc., European outbound is good, but it's different. We see that long-hauls are probably suffering more than regional trips and domestic trips. That's still the case. And in Asia, Asia per se, I think is probably under more pressure because they still have a lot of constrained capacities, you know, from seats perspective, plus some elements of specific elements of travel. So we see more regional travel in Asia rather than long haul travel as Asia inbound, you know, not as a destination, but as inbound. So we still have some impacts altogether from directly from the Middle East or also from the consequences of the Middle East somehow. When it comes to mixed brand, I think probably the answer is the summer is always a moment where we have more volatility, if you remember, on the tech rates because of the structure of the tech rates, and it's probably still the case. and we also need to go into segments where that comes with probably lower tech rates like domestic, short, lead time, et cetera, no, Brendan?

Yeah, I think that's fair, Nicola. I think it is definitely probably more of a reflection, Carlos, on the mix of business that we're seeing and the strength in the mix of business that we're seeing rather than your, I think your point was, is it more buzz with you know proactive commercial actions be those pricing actions or other or is it more mix of business and i would say to nicholas point it's probably much more mix of business as you as you made the point yourself it's one percent in in uh in ttp half a percent in in revenue so it's it's a you know and i i think they're probably both rounded numbers so it's probably even closer uh than that in in real terms so it's it's a very slight change i would say um uh in terms of our

take rate outlook versus where we were in h2 so that's maybe the first point to note and i would say yes it's more mix driven than commercial action driven thank you that's very helpful your next question comes from the line of nicholas david of auto bhf your line is now open yes good morning thank you for taking my question i have two actually uh the first one is uh regarding the free cash flow or the partial cash flow guidance even that you are expecting a higher growth in ttv shouldn't this have a positive impact on your operating cash flow given the negative working cap or are you seeing uh given that you're not upgrading the cash flow guidance are you seeing some negative dynamics in the dso dpo uh elements uh that was my first question and And the second question is for Nicolas, what's the best for your retirement? But before that, can you help us understand why you decided to leave now? And also, do you plan to remain a shareholder of the company?

I'll take the easy one first, Nicolas. I'll obviously let you deal with the second one.

It's not too complicated, but very happy to answer afterwards.

Yeah, go, Brandon. um uh free cash flow honestly we you know i think your your point is is correct uh nicola in that we do see good progress on our revenue growth here uh which is good it's in line very much with as i said to carlos in the last point it's not a huge change from where we were but it is a positive change and we see that coming through i do think you know we had that range of 90 to 100 as i as i probably mentioned in one of the previous questions i'd really rather see it closer to the 100% which is kind of our guidance that we started out the year with and we do think and still are ambitious about the ability to achieve that goal as we look at the fourth quarter so I suppose in a way even though my previous comments is I would usually steer people to the midpoint I'm giving you a specific you know different point on this one which I would hope that we can get more towards the top end of that range in which case to your point Nicolai you'll see the benefits coming through uh in in that in that cash perspective so i don't feel that we have had a significant impact from a dpo dso uh perspective at this point maybe just the last comment on this particular point so i'm happy we're happy the progress and i'm hopeful that we'll have a good good year here in terms of cash conversion as we have done in the past um last point just on this is that you know as we think about this you know it's a real strength in our business you know this ability to really turn a bit down to cash flow at 100 percent it doesn't happen in many organizations around the world and we are very thankful of it i think it is something that we will use more commercially as we go forward i made reference that earlier on about how our working capital and our good balance sheet gives us additional room from a working capital management perspective to be able to to draw in new sourcing relationships to draw in new distribution relationships and so we'll think about that more dynamically maybe as we think about 2027 But for now, I'm happy, very happy with the progress we're seeing on the on the cash conversion.

Thank you.

Listen, the answer to why now, I think it's the sequence of logical events. The first one, I'm not getting any younger. The second one, you know, I took the responsibility of Hotel Vets in the midst of COVID because I told you that several times I fell in love with the company. but my intention back then was not to to keep on managing companies so i always had in mind that i would be very happy to drive the company through a cycle but my perspective and that's the number three is that as a ceo and again you've heard me saying that many times we need to drive the company from a mid to long term perspective that's very important sometimes slightly more complicated when you're in the middle of the events as we have right now etc but that's that's a key focus and that's the the discussion that i had with the with the board so a lot of very logical factor a logical decision and as i have said i'm convinced absolutely convinced not only as a leader but also as a shareholder i'll answer that in a minute that we have a great strategy and a fantastic management and to drive this company forward. As a shareholder, I will, of course, remain a shareholder. I've told you many times, I think that there is more value to be extracted from HBX in the future. Probably I will have to do some arbitrage, you know, when it comes to the end of an executive life, then probably the flow of cash is more limited and and you need to look at it differently. But I have no intention to sell all of my shares. I will definitely keep some of them and have a great, close look at it.

Thank you very much.

Thank you. We don't have any pending questions. I'd now like to hand the call back to Brendan for closing remarks.

Thank you, everyone, for joining us today. We appreciate your questions, as always. We were very happy with the progress of the business in Q3 and a final word of thanks both to Nicola on a personal level for his inspiration and guidance over the last number of years and also to our broader workforce all three and a half thousand people in the HPX group thank you for your continued commitment to the organization thanks and that's all for today guys thank you for attending today's call you may now disconnect goodbye