Trainline Plc · LSE:TRN
Trainline — H1 FY2024 Earnings Presentation
42 slides from Trainline's earnings presentation, Nov 2, 2023
Slide 1: Half year results for the six months ended 31 August 2023
Half year results For the six months ended 31 August 2023 2nd November 2023
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) has been prepared by Trainline plc (the “Company” and, together with its subsidiaries, the “Group”). For the purposes of this notice, “Presentation” means this document, its contents or any part of it, any oral presentation, any question or answer se
Slide 3: Agenda
1. Introduction Jody Ford, CEO 2. Financial performance Pete Wood, CFO Agenda 3. Progress against strategic priorities Jody Ford, CEO 4. Q&A
Slide 4: Strong progress in H1 FY2024
Strong progress in H1 FY2024 Strong performance: net ticket sales up 23% and revenue up 19% Higher profit and cash generation: adj. EBITDA up 26% and operating FCF up 166% Digitising commute in UK: share of commuter market segment now 22% Strong growth in liberalised European markets: Spain & Italy
Slide 5: Our purpose and vision
Our purpose Our vision Empowering greener Building the world’s travel choices number 1 rail platform
Slide 6: Empowering greener travel choices in H1
Empowering greener travel choices in H1 Clear environmental benefits in Launched ‘Your Sustainability choosing rail travel New ‘I Came By Train’ campaign Story’ CO2 emissions per passenger, per km1 7x 3x Air Car Train 1 Emissions per passenger/KM as per https://www.gov.uk/government/publications/gre
Slide 7: Long term structural tailwinds for growth
Long term structural tailwinds for growth c€60bn UK and European rail Migration to online and digital Growing supply fragmentation market ticketing …And underpinned by a level playing field for rail retailing 6
Slide 8: Agenda
1. Introduction Jody Ford, CEO 2. Financial performance Pete Wood, CFO Agenda 3. Progress against strategic priorities Jody Ford, CEO 4. Q&A
Slide 9: UK Consumer growth led by commute and short distance travel
UK Consumer growth led by commute and short distance travel UK Consumer Net ticket sales (£m) • Strong growth in H1 despite impact of rail strikes: +19% YoY − Increasing ticket sales for commute and short distance travel, while long distance travel sales remain strong − Further industry passenger re
Slide 10: International Consumer growth led by our aggregated markets
International Consumer growth led by our aggregated markets Int e rna t io na l Consumer Net ticket sales (£m) • Strongest performance in aggregated markets – Spain and Italy +50% +24% YoY • France brand spend paused ahead of further liberalisation • Web sales growth slowed during H1 558 • Strong Ap
Slide 11: Trainline Solutions continues to recover
Trainline Solutions continues to recover Tra inline So lut io ns Net ticket sales (£m) • Provides B2B retailing capabilities & encompasses Platform One +38% YoY • Strong performance from IT Carrier Solutions • Business travel in UK continuing to recover from lower base 378 274 H1 FY2023 H1 FY2024 10
Slide 12: Strong growth in sales and revenue
Strong growth in sales and revenue Net ticket sales (£m) Revenue (£m) Gross profit (£m) +19% YoY +23% 197 +17% YoY YoY 2,649 151 165 378 65 129 2,159 60 274 558 53 49 452 30 24 20 16 1,712 1,433 102 88 71 63 H1 FY2023 H1 FY2024 H1 FY2023 H1 FY2024 H1 FY2023 H1 FY2024 11
Slide 13: Volume growth and operating leverage increasing adjusted EBITDA
Volume growth and operating leverage increasing adjusted EBITDA Marketing costs (£m) Other admin costs (£m) Adjusted EBITDA (£m) +11% +26% YoY YoY 57 57 51 45 +15% YoY 26 23 37 20 17 33 23 22 38 40 31 34 11 14 (10) (9) H1 FY20231 H1 FY2024 H1 FY20231 H1 FY2024 H1 FY2023 H1 FY2024 1 Prior year compar
Slide 14: Strong cash flow generation and leverage reduction
Strong cash flow generation and leverage reduction New capital allocation Strong cash generation Leverage ratio reducing framework Operating free cashflow (£m) Net debt / LTM adj. EBITDA • Invest in growth strategy to drive 77 organic growth, focusing on attractive 2.3 and sustainable returns 42 • M
Slide 15: Tightened FY2024 Group guidance range
Tightened FY2024 Group guidance range Net ticket sales Adj. EBITDA as % Revenue growth: growth: of net ticket sales: in the range of in the range of in the range of 15% to 20% 17% to 22% 2.15% to 2.25% 14
Slide 16: Agenda
1. Introduction Jody Ford, CEO 2. Financial performance Pete Wood, CFO Agenda 3. Progress against strategic priorities Jody Ford, CEO 4. Q&A 15
Slide 17: UK Consumer
UK Consumer 16
Slide 18: Strategic priorities for growth – UK Consumer
Strategic priorities for growth – UK Consumer Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Unlocking value for Marketing campaigns Growing transaction customers; digitising focused on value, commute frequency and monetisation commuter experience
Slide 19: Unlocking value and removing friction for customers
Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Unlocking value and removing friction for customers UK Consumer Weekly price calendar Strike safe Displaying to customers the days that are Informing customers whether the journey they are cheapest to
Slide 20: Priming our Mobile App to serve the commuter
Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Priming our Mobile App to serve the commuter UK Consumer • Developed full suite of ticket types for commuters • Digital seasons enabled for c1/3 seasons market: − c20% share of season ticket sales wher
Slide 21: 'Great journeys start with Trainline' brand campaign
Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions ‘Great journeys start with Trainline’ brand campaign UK UK Consumer Consumer 20
Slide 22: Encouraging Mobile App adoption to deepen our customer relationships
Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Encouraging Mobile App adoption to deepen our customer relationships UK Consumer Mobile app customers transact App as % of overall transactions more frequently than Web 89% 87% 1.5X 74% H1 FY2020 H1 FY
Slide 23: Enhancing monetisation
Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Enhancing monetisation UK Consumer New ancillary products Flexcover New ad placements In partnership with 22
Slide 24: International Consumer
wx oa International Consumer
Slide 25: Prioritising markets where we have strongest customer proposition
Prioritising markets where we have strongest customer proposition Int e rna t io na l Consumer Strongest customer proposition Future opportunity (c60% net ticket sales)1 (c40% net ticket sales)1 More mature liberalised Foreign travel Less mature liberalised domestic markets domestic markets Spain Gl
Slide 26: France opening to new entrants
France opening to new entrants Int e rna t io na l Consumer • 2023: − Renfe launched new cross border routes • 2024: − Three carriers to compete between Paris-Lyon • 2025: − Two carrier brands to compete between London-Paris − Le Train launching high speed services in Western France 25
Slide 27: Our approach predicated on maturity of market liberalisation
Our approach predicated on maturity of market liberalisation Int e rna t io na l Consumer Phase 1 Phase 2 Phase 3 Provide a great UX; all key Make aggregation the key Deepening customer journeys and prices differentiator relationships 26
Slide 28: Strategic priorities for growth – International Consumer
Strategic priorities for growth – International Consumer Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Great UX, differentiating Focusing on markets where Deepening customer through aggregation we have right to win today relationships 27
Slide 29: Adding all new carrier routes as they come live
Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Adding all new carrier routes as they come live Int e rna t io na l Consumer Renfe cross border in France Cercanias (regional) trains in Spain 28
Slide 30: Driving deeper localisation of our Mobile App
Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Driving deeper localisation of our Mobile App Int e rna t io na l Consumer Iryo exchange Satispay Allowing customers to swap their train ticket Providing customers with popular new payment options 29
Slide 31: Aggregation: reaching 11% share on top two high-speed routes in Spain
Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Aggregation: reaching 11% share on top two high-speed routes in Spain Int e rna t io na l Consumer No. of months since Passenger growth (YoY New Entrant percentage market share of high speed routes1 Tr
Slide 32: Spain and Italy: brand awareness almost doubled in 12-18 months
Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Spain and Italy: brand awareness almost doubled in 12-18 months Int e rna t io na l Consumer Growing prompted brand awareness 34% Italian brand campaign launch: spring 22 19% Spanish brand campaign lau
Slide 33: Foreign travel: leveraging PR campaigns and unique occasions
Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Foreign travel: leveraging PR campaigns and unique occasions Int e rna t io na l Consumer 32
Slide 34: Responding to greater competition in Web sales
Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Responding to greater competition in Web sales Int e rna t io na l Consumer • Underlying demand normalising while keyword auctions have become more competitive • Inclusion of trains within Google trave
Slide 35: Italy: encouraging app adoption to deepen customer relationship
Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Italy: encouraging app adoption to deepen customer relationship UKeConsumer Int rna t io na l Consumer Mobile app customers transact App as % of overall transactions more frequently than Web >3X 71% 60
Slide 36: Increasing regional travel and enhancing monetisation
Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Increasing regional travel and enhancing monetisation Int e rna t io na l Consumer Continued growth in regional travel in Italy Introducing hotels Regional tickets sold +5x +42% H1 FY2020 H1 FY2023 H1
Slide 37: Strategic priorities for growth – Trainline Solutions
Strategic priorities for growth – Trainline Solutions Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Leveraging platform strength to support travel partners 36
Slide 38: Enhancing online retail offering for our carrier partners
Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Enhancing online retail offering for our carrier partners Train load information on Greater Anglia Italo loyalty scheme features Extended contracts with five of our white label carriers in H11 1. Signe
Slide 39: Harnessing Machine Learning and Generative AI within Platform One
Enhance customer Increase customer Grow Trainline Build demand experience lifetime value Solutions Harnessing Machine Learning and Generative AI within Platform One Set up AI Labs team to leverage Using advanced ML to deliver data-driven features Generative AI opportunity SplitSave: mass market spli
Slide 40: Key takeaways
Key takeaways • Strong growth in H1, driving up profitability and cash flow generation • Tightened Group guidance range for remainder of year • Digitising ticketing experience in UK, particularly commuters with segment share now 22% • Aggregation driving growth in Europe, including 11% share on top
Slide 41: Q&A
Q&A
Slide 42: Thank you
Thank you Y trainline