eDreams - flight

All,

Please find our updated analysis of eDreams here.

As indicated yesterday, we have today sold our position in the equity, but are holding on to the bonds. At E3.60 per share, we feel the market has gotten ahead of itself and have sold our shares here tactically with a view to re-entering again at a lower point between now and Easter.

The numbers presented today were disappointing. Bookings are lower, sales were lower although with a better margin, so that EBITDA was on par. But due to the lower sales level, the company has not experienced the anticipated WC inflow yet and with Lock-down2 ongoing, Q3 (Dec.) will likely be worse.

As previously noted, Q4 (March) is the time when eDreams receive most customer advances and therefore a large inflow of cash. But despite the news on vaccines entering final testing phases, it's unlikely those will be ready in time for a normally distributed season next year, nor will the availability of vaccines instantly translate into mass tourism.

We remain constructive on eDreams and may decide to adjust our now undersized position in the bonds at an opportune moment.


Wolfgang
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E: wfelix@sarria.co.uk
T: +44 203 744 7003

www.sarria.co.uk

Wolfgang FelixE-DREAMS