The biggest employer in Sophia has sent a profit warning yesterday. From September 11th to 30th, reservations have decreased by 27.5%. The growth objectives of the company are revised downwards.
Amadeus, the electronic reservation system for travel professionals, has recorded a fall by 27.5% of orders from September 11th to 30th compared to the same period last year. Of course, this fall is much more relevant in the United-States (– 45.3% as against –15.4% for the rest of the world). For the whole third quarter 2001, the “September” effect is noticeable: a decrease by 3.6% compared to 2000, for all the kinds of reservations, over an amount of 90 million reservations, including non-air trips, while the quarter was rising by 4% before September 11th.
Even if the first October figures seem better (compared the same period 2000, it is only decreasing by 17.5%), no previsions can be made. So, directors have decided to go on ahead. Yesterday, they have made a “profit warning”, which announced that the company would not be able to achieve the growth objectives in 2001, and among others an increase of the Ebitda (profits before interests, taxes and depreciation) from 19% to 24%.
Of course, the financial situation of Amadeus is far from being catastrophic. The turnover is increasing over the first nine months of the year (+ 17% to 1.37 billion euros) and the famous Ebitda is still positive even for the third quarter (between 85 and 90 million euros, as we take the doubtful debt of 11 million euros into account). Moreover, Amadeus is less present on the American market than its competitors Galileo and Sabre. But, as there is no prevision, the group has announced that there were measures to reduce costs, while the security has decreased by 6.63% to 4.93 euros at the Paris stock exchange (a 40% loss since the attacks).
This crisis situation directly hits Sophia Antipolis, since Amadeus is biggest client and the most dynamic employer in the research park. With around 1.400 employees, with between 500 and 600 engineers and developers coming from regional software companies, the marketing and Research & Development pole of the GDS (Global Distribution Service) founded by Air France, Ibéria and Lufthansa is the biggest company in the research park. Until now, it was the main company in the site as far as employment is concerned. So, Sophia can worry about changes occurred in the airline and travel industry.
All the more as Amadeus, even before September 11th, had reduced recruitments. Today, engineers and developers from software companies are on the front line. This situation will weaken many service and computer engineering companies in the research park and is likely to have troublesome consequences on high tech employment in the French Riviera.