Travel Leisure Co. · NYSE:TNL
Travel Leisure — Investor Presentation (February 2024)
40 slides from Travel Leisure's investor presentation, February 2024
Slide 1: Investor Presentation February 2024
+ INVESTOR COVER PRESENTATION February 2024 W O R L D M A R K A S S O C I AT E M OA B
Slide 2: Presentation of Financial Information and Forward-Looking Statements
Presentation of Financial Information Forward-Looking Statements Financial information discussed in this presentation includes non-GAAP measures such as This presentation includes “forward-looking statements” as that term is defined by the Adjusted EBITDA, Adjusted EBITDA margin, Adjusted diluted EP
Slide 3: We Put the World on Vacation
WE PUT THE WORLD O N VA C AT I O N Our mission 3
Slide 4: Resilient Business. Strong FCF and Capital Returns.
The Travel + Leisure Co. Story Resilient Business. Strong FCF and Capital Returns. Proven Resilient Favorable Timeshare Reality Expanding Strong Margins Robust Capital Business Model Market Dynamics vs. Perception Platform and FCF Returns 4
Slide 5: Proven Resilient Business Model
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS W O R L D M A R K PA R K C I T Y Proven Resilient Business Model 5
Slide 6: Leading Membership & Leisure Travel Company
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS Leading Membership & Leisure Travel Company At a Glance Revenue mix (2) Key Financials 2023 Net Revenue $3.8B
Slide 7: 4Q and FY 2023 Results
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS 4Q and FY 2023 Results TH R E E M O NTH S E N D E D 1 2/3 1/2 0 2 3 Net Revenue Gross VOI Sales(1) Adj. EBITDA
Slide 8: Resilient Business with Strong Adjusted EBITDA Margins
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS Resilient Business with Strong Adjusted EBITDA Margins Vacation Ownership Segment Adjusted EBITDA Margin (1) V
Slide 9: Strong Credit Quality
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS Strong Credit Quality Average FICO Score on New Originations Average Interest Rate FICO 800 18.0% 17.0% 735 73
Slide 10: Predictable and/or Recurring Revenue
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS Predictable and/or Recurring Revenue ($ in millions) $3,750 Subscription Revenue Travel and Membership subscri
Slide 11: Embedded Revenue Potential of Existing Owner Base
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS Embedded Revenue Potential of Existing Owner Base Ten year cumulative revenue potential, not discounted $4.5B
Slide 12: Favorable Market Dynamics
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS M A R G A R I TAV I L L E VAC AT I O N C LU B B Y W Y N D H A M R I O M A R Favorable Market Dynamics 12
Slide 13: Strong Value Proposition
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS Strong Value Proposition Favorable Attractive Scale/Product Inflation secular trends product form Flexibility
Slide 14: Favorable Secular Trends, Flexibility, Attractive Product Form
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS Favorable secular trends Scale/Product Flexibility Secular growth in leisure travel • 2 20+ resorts in the U.S
Slide 15: 95% of U.S. Population Live within 300 Miles of Our Resorts
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS +95% of U.S. Population Live within 300 Miles of one of our Resorts 245+ Resorts Globally 220+ Resorts in Nort
Slide 16: Timeshare Reality vs. Perception
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS C LU B W Y N D H A M B A L I H A I V I L L A S Timeshare Reality vs. Perception 16
Slide 17: Industry Transformation
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS Industry Transformation H I STO R I CA L T O D AY Fragmented, regional developers Branded hospitality develope
Slide 18: Owners Love Their Timeshare
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS OW N E R S LOV E THEIR TIMESHARE Owners(1) 800K+ Owners with No Loans Outstanding(1) ~80% Annual Retention of
Slide 19: Younger Generations Are Buying
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS YO U N G E R G E N E R AT I O N S ARE BUYING Gen-X(1) 26% of new owner sales Millennial and Gen-Z (1) 38% of n
Slide 20: Capital Efficient
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS C A P I TA L EFFICIENT Just-in-time inventory Owners fund FF&E reserves Inventory recycling — Certified exit p
Slide 21: Expanding Platform
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS T H E S E B E L DA R L I N G H A R B O U R T H E P I N N AC L E Expanding Platform 21
Slide 22: Growing Vacation Ownership Through Brand Expansion
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS Growing Vacation Ownership Through Brand Expansion • S ports Illustrated Resorts and Accor Vacation Club(1) jo
Slide 23: Aligning with World-Class Leisure Brands: Accor Vacation Club
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS Aligning with world-class leisure brands Accor Vacation Club for $48 million (1) • L everages the Travel + Lei
Slide 24: First Partnership with Sports Illustrated Resorts
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS First Partnership with Sports Illustrated Resorts • N etwork of sports-themed resort and lifestyle resorts in
Slide 25: Strong Margins and FCF
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS W O R L D M A R K S A N TA F E Strong Margins and FCF 25
Slide 26: High Adjusted EBITDA Margins and Strong FCF
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS High Adjusted EBITDA Margins and Strong FCF High Adjusted Strong and Consistent Track Record Minimal EBITDA Ma
Slide 27: Adjusted EBITDA to Adjusted Free Cash Flow Conversion %
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS Adjusted EBITDA to Adjusted Free Cash Flow Conversion % 2023 Actuals 100% (25%) 3% 42%(2) (16%) (6%) (14%) Adj
Slide 28: Robust Capital Returns
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS W O R L D M A R K Z I H U ATA N E J O Robust Capital Returns 28
Slide 29: Cumulative Capital Returned to Shareholders Since Spin
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS Cumulative Capital Returned to Shareholders Since Spin $2,500 Repurchases Diluted Weighted Average Shares Outs
Slide 30: Annual Dividend Growth
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS Annual Dividend Growth +17%(1) $2.00 (2) $2.00 $1.80 $1.80 $1.60 $1.60 $1.50 $1.25 $1.00 $0.50 $0.00 2019 2020
Slide 31: Corporate Debt Maturities
P R OV E N FAV O R A B L E TIMESHARE STRONG ROBUST RESILIENT MARKET REALITY VS. E X PA N D I N G MARGINS C A P I TA L BUSINESS MODEL DY N A M I C S PERCEPTION P L AT F O R M AND FCF RETURNS Corporate Debt Maturities(1) As of December 31, 2023 ($ in millions) Term Loan B $598 75% of (3) Secured Notes
Slide 32: Travel + Leisure Co.
TRAVEL+ LEISURE TNL NYSE N FORTUNE BEST COMPANIES TOR i] TO WORK FOR PLACES ) USNEWS { | ieee | 1
Slide 33: Appendix
APPENDIX TRAVEL+ LEISURE 33
Slide 34: Appendix: Non-GAAP Reconciliation
A P P E N D I X : N O N - G A A P R E C O N C I L I AT I O N TNL Consolidated Reconciliation of Net Income to Adjusted EBITDA ($ in millions) 2019 2018 (1) 2018 + 2019 Net income attributable to T+L shareholders $ 507 $ 672 $ 1,179 Loss from ops of disc bus, net of income taxes - 50 50 Gain on dispo
Slide 35: Appendix: Non-GAAP Reconciliation
A P P E N D I X : N O N - G A A P R E C O N C I L I AT I O N Reconciliation of Net Cash Provided by Operating Activities from Continuing Operations to Adjusted Free Cash Flow ($ in millions) 2019 2018 2018 + 2019 Net cash provided by operating activities from continuing operations $ 453 $ 292 $ 745
Slide 36: Appendix: Non-GAAP Reconciliation
A P P E N D I X : N O N - G A A P R E C O N C I L I AT I O N Non-GAAP Measure: Reconciliation of Net VOI Sales to Gross VOI Sales ($ in millions) The Company believes gross VOI sales provide an enhanced understanding of the performance of its vacation ownership business because it directly measures
Slide 37: Appendix: Non-GAAP Reconciliation
A P P E N D I X : N O N - G A A P R E C O N C I L I AT I O N Non-GAAP Measure: Reconciliation of Net Income to Adjusted Net Income to Adjusted EBITDA ($ in millions except per share data) Reconciliation of Net income Three Months Ended Twelve Months Ended to Adjusted EBITDA December 31, December 31,
Slide 38: Appendix: Non-GAAP Reconciliation
A P P E N D I X : N O N - G A A P R E C O N C I L I AT I O N Non-GAAP Measure: Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow ($ in millions) Twelve Months Ended December 31, 2023 Net cash provided by operating activities $ 350 Property and equipment additions
Slide 39: Appendix: Non-GAAP Reconciliation
A P P E N D I X : N O N - G A A P R E C O N C I L I AT I O N Vacation Ownership Net Income to Adj. EBITDA Reconciliation ($ in millions) 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Vacation Ownership net income $ 429 $ 373 $ 309 $ (69) $ 404 $ 340 $ 174 $ 316
Slide 40: Definitions
DEFINITIONS Adjusted Diluted Earnings per Share: A non-GAAP measure, defined by the Company as Adjusted net income divided Adjusted Net Income: A non-GAAP measure, defined by the Company as net income from continuing operations by the diluted weighted average number of common shares. Adjusted Dilute
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