trivago N.V. (NASDAQ:TRVG) Q4 2018 Earnings Conference Call Transcript

Feb 06, 2019 • 08:00 am ET

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trivago N.V. (NASDAQ:TRVG) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for stranding by and welcome to the trivago Q4 Earnings Call 2018. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. (Operator Instructions) I must advice you that this conference is being recorded today, Wednesday 6th of February 2019. And now, I would now like to hand the conference over to your first speaker today, Mr. Elie Matta, Head of Investor Relations. Thank you. Please go ahead, sir.

Executive
Elie Matta

Thank you. Good afternoon, everybody. Welcome to trivago NV's financial results conference call for the fourth quarter ended December 31, 2018. I'm pleased to be joined on the call today by Rolf Schromgens, trivago's CEO and Managing Director; and Axel Hefer, our CFO and Managing Director. The following discussion including responses to your questions reflects management's views as of today, February 6, 2019 only. We do not undertake any obligation to update or revise this information.

As always, some of the statements made on today's call are forward-looking, typically preceded by words such as we expect, we believe, we anticipate or similar statements. Please refer to today's press release and the Company filings with the SEC for information about factors which could cause our actual results to differ materially from these forward-looking statements.

You will find reconciliations of Non-GAAP measures to the most compatible GAAP measures discussed today in our earnings release, which is posted on the Company's IR website at ir.trivago.com. I encourage you to periodically visit our Investor Relations site for important content, including today's earnings release. Finally, unless otherwise stated, all comparisons on this call will be against our results for the comparable period of 2017. With that, let me turn the call over to Rolf.

Executive
Rolf Schromgens

Thanks, Elie. Welcome everybody. Many thanks for joining our fourth quarter and full year earnings call 2018. 2018 was quite an intense year for us as a Company and as a team. We had to deal with a situation in which our core advertisers had very significantly adapted their profitability targets and as a consequence, we had to cope with a drop in commercialization of our results which directly affected the efficiency of our marketing. After accepting negative EBITDA for the first half of the year, that summed up to nearly EUR40 million, we had to conclude that this is no longer maintainable to keep our growth trajectory on the back of accumulating losses.

We were very confident that trivago can be run with healthy margins and at the same time, we were seeing that it was important for the organization to get a proof of that. We thought that this proof was essential for the team to keep on focusing on the business and delivering the best possible experience to our users. Actually, we needed a step change and during Q2, we decided for a consistent adaption of targets across all channels, including brand as well as the performance marketing.

As a consequence, this affected obviously our