AMS · Amadeus IT Group SA

Will it survive?

• Can it pay its interest? 16.2×
  Comfortable
  Operating income €1.6B ÷ interest expense €101M
  What this means

  Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.

• How heavy is the debt, net of cash? —
  Debt under-captured — leverage unknown, not low
  What this means

  This company pays far more interest than its tagged debt implies (the rest sits under segment dimensions the data source strips), so its net cash or net debt cannot be read honestly: the gap is unknown, not zero, and 'net cash' here would be exactly the fiction the figure is meant to prevent. Judge it on the record and owner earnings instead.

• How long is cash tied up? —
  Not enough data
  What this means

  The filing data didn't include the inputs for this check.

Is it a good business?

• Return on invested capital —
  Debt under-captured
  Industry peers: median 17%
  What this means

  This company's interest bill implies far more debt than its filings tag at the consolidated level (the rest sits under segment dimensions the data source strips), so invested capital, and the return on it, cannot be read honestly. Judge this one on Owner Earnings and the record instead.

• Owner-earnings margin 31%
  High through the cycle
  6-yr median margin, range -0%–34%; latest €2.1B = operating cash €2.1B − maintenance capex €73M
  Industry peers: median 25%
  What this means

  What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 34% of revenue this year, a 31% median across 6 years.

• Are earnings backed by cash? 1.71×
  Cash-backed
  Cash from ops €2.1B ÷ net income €1.3B
  What this means

  How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

• Where do the earnings go? 26%
  Reinvests most of it
  Dividends + buybacks €542M ÷ Owner Earnings €2.1B
  What this means

  Of €2.1B Owner Earnings, €542M (26%) went back to shareholders, €542M dividends, €0 buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.

• Investing or harvesting? 0.10×
  Harvesting
  Capex €73M ÷ depreciation €700M
  What this means

  Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 1 of 4 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

• Adequate size —
  Revenue ≥ $2B (a dollar floor) · €6.1B
  What this means

  Big enough to weather a storm. Graham's floor is a dollar figure — about $2B of revenue as a conservative modern stand-in. This company reports in its home currency and we carry no exchange rate, so we show the figure and leave the size bar for you to apply rather than convert it with a number we don't have.

• Strong liquidity Miss
  Current ratio ≥ 2× · 0.85×
  What this means

  Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.

• Conservative debt —
  Debt ≤ working capital · —
  What this means

  The filings tag only a fraction of the debt this company's interest bill implies (much of it sits under segment dimensions the data source strips), so this test can't be run honestly.

• Earnings stability Miss
  A profit every year (6-yr record) · 2 loss years
  What this means

  Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.

• Dividend record Miss
  Uninterrupted dividends · 4 of 7 yrs
  What this means

  An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.

• Earnings growth Pass
  Earnings +33% over the record · +779%
  What this means

  At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.

• Moderate price —
  P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
  What this means

  Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are €2.32/share (latest year €2.87), the averaged base the calculator's gate runs on, and book value is €11.60/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2019–2024

Whether the record’s returns held, and what the capital reinvested earned.

• Profitable years 4 of 6
  What this means

  Lost money in 2 year(s), look at what happened there before trusting the average.

• Operating margin −4% → 25% (3-yr avg ends)
  What this means

  Through the cycle the operating margin widened — about −4% early to 25% lately, median 21% — pricing power intact or improving.

• Owner earnings growth +18%/yr
  What this means

  Owner earnings grew about 18% a year over the record.

• Worst year 2020 · −35.5% op. margin
  What this means

  Operations went underwater in 2020, understand why before trusting the good years.

• Share count +0.2%/yr
  What this means

  Roughly flat share count, little dilution, little buyback.

• Dividend record rising
  What this means

  Paid and raised the dividend across the record, the continuity Graham prized.