Flight Centre Travel Group Limited · ASX:FLT
Flight Centre Travel — FY2016 Earnings Presentation
110 slides from Flight Centre Travel's earnings presentation, Aug 25, 2016
Slide 1: 2016 Full Year Results Presentation
2016 FULL YEAR RESULTS PRESENTATION 25 AUGUST 2016
Slide 2: Overview
OVERVIEW • Introduction – by Haydn Long • Financial Highlights & Global Review – by Adam Campbell • Strategic Update – by Melanie Waters-Ryan • Market Conditions & Outlook – by Graham Turner • Questions • Supplementary Details
Slide 3: Introduction: FY16 Investing for Growth
INTRODUCTION: FY16 INVESTING FOR GROWTH Strong TTV growth – 5 regions generated more than $1AUb in TTV during FY16 & FLT poised to become a $20b-a-year sales company during FY17 (20 years after 1st topping $1b) PBT (underlying) exceeded $350m for 3rd consecutive year & in line with revised guidance
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 5: Financial Highlights: Record Sales
FINANCIAL HIGHLIGHTS: RECORD SALES Records in all •Topped previous Regions •TTV has exceeded PCP record by $1.7b in low 20 times in 21 years yield environment •New milestones in all since listing •9.7% growth on FY15 10 regions •Has more than tripled •Highlights FLT’s since FY04 geographic diversity
Slide 6: Financial Highlights: Diversity
FINANCIAL HIGHLIGHTS: DIVERSITY TTV By Region Australia Americas Europe & South Africa NZ, Asia, India & UAE On average, FLT sold more than $50m worth of travel globally every day during FY16 (See Appendix 1 for additional TTV milestones)
Slide 7: Financial Highlights: Solid Profit
FINANCIAL HIGHLIGHTS: SOLID PROFIT 3rd strongest result but down on PCP Adjustments to underlying PBT: $17.3m in gains relating to NZ head office sale ($6.3m) & ACCC refund NPAT down 3.8% $352.4m ($11m) (underlying) & underlying PBT, 4.7% (statutory) down 3.8% $AU24.7m in non-cash impairment (USA le
Slide 8: Financial Highlights: Margin
FINANCIAL HIGHLIGHTS: MARGIN Revenue up 11.2% & increasing at a faster rate than TTV – leading to increased income margin (13.8%) Lower net margin of 1.8% – costs & investment in network enhancements affecting profit growth
Slide 9: Lower Net Margin: Contributing Factors
LOWER NET MARGIN: CONTRIBUTING FACTORS COSTS NETWORK LOW AIRFARE PRICES UNDERPERFORMANCE ENHANCEMENTS IN SOME BUSINESSES •Growth in normal •Multi-million dollar •Reasonable dollar- •Reduced profits in operating expenses investment in based super over- Induasia ($9.2m – wages, sales & systems & new r
Slide 10: Cost Drivers: Rent, Wages & Marketing
COST DRIVERS: RENT, WAGES & MARKETING Rent Wages Sales & Marketing • Growth driven by • 4% people • 1.2% of TTV, network growth leading to solid expansion • Pay rises for sales enquiry • Renewals staff in UK & NZ generation typically following change • Investment in increasing in line in Australia P
Slide 11: Cost Drivers: Network Enhancements
COST DRIVERS: NETWORK ENHANCEMENTS Omni channel New people-related Aunt Betty launched New products – Key To Employer of Choice Brands & Diversity Network Upgrades enhancements across initiatives 7 acquisitions The World, IAPs P2P Index Greater workplace Increased ad spend to Brands exported – Next
Slide 12: Cost Drivers: Network Enhancements
COST DRIVERS: NETWORK ENHANCEMENTS Increased Depreciation & Amortisation Expense • Up $12m on PCP • Reflects higher than normal cap-ex • Growth driven by spend on new shop design & roll-out, IT upgrades • EBITDA broadly in line with FY15 • Cap-ex likely to be in order of $100m during FY17
Slide 13: Cost Drivers: Network Enhancements
COST DRIVERS: NETWORK ENHANCEMENTS Significant investment in strategic acquisitions & start-ups • Circa $7m in EBIT losses from start-ups & small, loss-making acquisitions • Losses partially offset by StudentUniverse profits • Long-term growth drivers but adverse impact on short-term profits • Highe
Slide 14: Financial Highlights: Cash Position
FINANCIAL HIGHLIGHTS: CASH POSITION Strong Healthy Minimal positive cash debt cash reserves position At Dec 31, FLT had the 5th strongest net debt position on the ASX 100
Slide 15: Financial Highlights: Cash
FINANCIAL HIGHLIGHTS: CASH $1.52b global cash & investment portfolio Includes $506.7m in company cash FLT took on $52m in short-term debt during $76.8m in debt FY16 & reinvested the Strong cash borrowings at a superior position & profit interest rate $429.9m positive cash leading to solid position a
Slide 16: Financial Highlights: Growth
FINANCIAL HIGHLIGHTS: GROWTH New brands & Numbers decreased 3.2% increase new during 2H as some in sales teams geographies dual teams were merged into single teams (particularly US 7 acquisitions 2.5% increase in wholesale) to sales staff globally complement NETWORK organic growth GROWTH Outlined in
Slide 17: FY16 Results Summary
FY16 RESULTS SUMMARY $’ million JUNE 2016 JUNE 2015 % TTV $19.3b $17.6b 9.7% Revenue $2.7b $2.4b 11.2% Income margin 13.8% 13.6% 20bps Net margin (underlying) 1.83% 2.07% (24bps) Underlying Profit Before Tax $352.4m $366.3m (3.8%) Non-recurring items ($7.4m) - - Statutory Profit Before Tax $345.0m $
Slide 18: Global Review
GLOBAL REVIEW
Slide 19: Global Review: Trading Highlights
GLOBAL REVIEW: TRADING HIGHLIGHTS Sales Leisure v Corporate • Record TTV in all 10 • Corporate businesses countries/regions in AUD generated 33% of FY16 TTV • Growth largely organic – • Consolidating FLT’s position as relatively small contribution one of world’s largest from acquired businesses corp
Slide 20: FY16: Australia Segment
FY16: AUSTRALIA SEGMENT 5% TTV Recovery in 2% EBIT increase leisure gross growth during margins period of SOLID Above growth STABLE PROFIT (commissions) significant SALES in outbound MARGINS following GROWTH investment & in travel (4.5%) decline during low yield per ABS) PCP environment
Slide 21: FY16: Australia Segment – TTV Percentage Growth
FY16: AUSTRALIA SEGMENT – TTV 18 16 Percentage Growth YOY 14 12 10 8 6 4 2 0 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Outbound Travel Growth % FLT TTV Growth % Australian TTV growth continues to outpace outbound travel growth (Source: ABS)
Slide 22: FY16: Australia Segment
FY16: AUSTRALIA SEGMENT Cheap airfares slowing TTV growth and leading to lower than anticipated super over- FLT’s average rides international yields down 4% during 2H Also stimulating demand in subdued consumer confidence environment
Slide 23: FY16: Australia Segment
FY16: AUSTRALIA SEGMENT Leisure • TTV per shop in line with FY15 – strong growth in hyperstore & expo sales • Solid growth in some key sectors – coach, cruise, adventure, FX • Evolving along P2P Index – developing high & low touch offerings • LCC sales increasing off small base – NXGen strategy • fl
Slide 24: Corporate Value Propositions
CORPORATE VALUE PROPOSITIONS Technology People Reporting Brand diversity FLT’s – specialised offers across Corporate Innovation multiple sectors Strengths
Slide 25: FY16: Europe Segment
FY16: EUROPE SEGMENT KEY FINANCIAL ACHIEVEMENTS • TTV topped GB1b Netherlands • $AU47.2m EBIT contribution – 2nd best ever UK Ireland • Strong corporate travel results • BREXIT uncertainty & investments slowing profit growth FC Europe
Slide 26: FY16: Europe Segment
FY16: EUROPE SEGMENT Enhanced Geographic & Brand Diversity • Secured a corporate travel footprint in Continental Europe – FCM Netherlands – & platform for SME expansion • Opened 1st leisure business outside the UK - Dublin hyperstore (August 16) • Expansion into Wales - FCBT to open in Cardiff in Oc
Slide 27: FY16: USA Segment
FY16: USA SEGMENT Student KEY FINANCIAL ACHIEVEMENTS Universe • Record TTV – topped $AU3b for 1st time FCUSA Mexico • FLT’s 2nd largest region by sales • $AU21.2m EBIT contribution – down slightly on record FY15 result USA SEGMENT • Strong performance from StudentUniverse & SME corporate business
Slide 28: FY16: USA Segment
FY16: USA SEGMENT Corporate • Continued strong growth from SME corporate business • Organic expansion into new cities – Raleigh, Minneapolis & Orange County • FCM Mexico has given FLT a presence in a new & strategically important market Leisure & Wholesale • Disappointing bottom-line results • Inves
Slide 29: FY16: Rest of World Segment
FY16: REST OF WORLD SEGMENT NZ South Africa Canada Record TTV & return to profit Record profit & TTV Record profit & TTV after losses during FY15 Strong corporate & leisure results Strong corporate performance & Essentials (IAPs) launched & – leading to increased market- reduced leisure losses (loss
Slide 30: FY16: R.O.W Segment – Induasia
FY16: R.O.W SEGMENT – INDUASIA KEY FINANCIAL ACHIEVEMENTS UAE Singapore & • Record TTV in all regions Malaysia • Leading to $988m combined TTV • EBIT growth in UAE • Reduced earnings in India, India Greater China Greater China INDUASIA • Losses in Singapore but return to profitability expected in FY
Slide 31: FY16: R.O.W Segment – Induasia
FY16: R.O.W SEGMENT – INDUASIA UAE Greater China India Singapore Modest TTV growth in low yield Record TTV but disappointing Record TTV, EBIT growth Record TTV but lower EBIT environment earnings Expansion in Chandigarh, Continued corporate profits Corporate Traveller launched Expansion into Malaysi
Slide 32: FY16: Other Businesses
FY16: OTHER BUSINESSES Good profit contribution Solid growth across core Positive EBIT contribution Continued growth in 1st full year business units from joint venture DMC Asia range launched & Working with internal (FLT) Now operating in 11 Record EBIT & TTV performing strongly & external students
Slide 33: FY16: Results by Country
FY16: RESULTS BY COUNTRY CANADA EUROPE INDIA GREATER CHINA TTV: $1.2b, up 3% in TTV: $2.2b, up 14% in TTV: $419m, up 9% in TTV: $271m, up 17% in AUD (up 2% in lc) AUD (up 6% in lc) AUD (up 2% in lc) AUD (up 7% in lc) EBIT: $0.7m EBIT: $47.2m EBIT: $0.2m EBIT: $0.0m BUSINESSES: 234 BUSINESSES: 299 BU
Slide 34: Strategic Update
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Slide 35: FLT at its IPO
FLT AT ITS IPO 4 leisure brands FLIGHT 95% of sales CENTRE 1 corporate in Australia LIMITED brand & NZ 1995 About 1000 employees in 5 countries
Slide 36: FLT Today
FLT TODAY Some 40 Travel retailing, corporate, in- brands destination travel experience, non-travel, youth/student Generating FLIGHT One third of FY16 sales about 50% of CENTRE 6 dedicated Now one of the world’s generated in the corporate largest corporate travel TTV outside TRAVEL brands Americas &
Slide 37: Corporate Brands / Leisure / Wholesale
CORPORATE LEISURE / BRANDS WHOLESALE
Slide 38: Slide 38
Slide 39: Flight Centre Travel Group … Who Are We?
FLIGHT CENTRE TRAVEL GROUP … WHO ARE WE? IRREVERENCE We don’t believe in conventional wisdom. We take our business seriously but not ourselves. EGALITARIANISM No status or privilege, self important people don’t fit in here. OWNERSHIP We take full responsibility and treat the business as our own.
Slide 40: Strategic Evolution
STRATEGIC EVOLUTION Specialised brands Brand & Sales & Product Unique marketing products machine Physical Digital (shop) Travel Strategic Info – Agent to Journeys profiles, Retailer Experts not patterns & agents predictions People Sales Blended Shops as Business retail access spaces
Slide 41: Janus… Longer Term Growth Drivers
LONGER TERM GROWTH DRIVERS JANUS… The Roman god of beginnings, gates, transitions, time, doorways, passages and endings
Slide 42: FLT … The Ring of Janus
Leisure Travel Retailing In Incubation Destination Acceleration Travel FLT … Investment Experiences THE RING OF The next 20 years Other JANUS Corporate Businesses Travel Student/ Youth Travel
Slide 43: Leisure Travel Retailing
Janus One LEISURE TRAVEL RETAILING
Slide 44: Our Journey from Travel Agent To
OUR JOURNEY FROM TRAVEL AGENT TO
Slide 45: Travel Retailing … The P2P Index
TRAVEL RETAILING … The P2P index CORE LEISURE VOLUME 85-90% of Australian TTV OTA CONTACT FLAGSHIP COMMUNITY HOME EVENTS CENTRES STORES BASED • High volume, low • 24/7 telephone • Hyperstores • Shopping centres • Associates • Travel Expos, touch, low margin sales & assist • Megastores • CBD and stri
Slide 46: Shop Journey: Then and...
SHOP JOURNEY: THEN AND... WG TO OPEN UP THE WORLD FOR THOSE WHO WANT TO SEE
Slide 47: ... Flight Centre Now
... FLIGHT CENTRE NOW TO OPEN UP THE WORLD FOR THOSE WHO WANTTO SEE
Slide 48: ... Flight Centre Now
... FLIGHT CENTRE NOW TO OPEN UP THE WORLD FOR THOSE WHO WANT TO SEE
Slide 49: • Airfare-led • New Route
• Airfare-led package brand with ability to Launched in make August 16 personalised and on track recommendations to deliver $3m in TTV • New Route in month 1 Perfect planning tool introduced
Slide 50: Aunt Betty – Plan Your Trip
Fa Aentery | Pen & Boot, = crn plar_auntbetty.comau Sl Apes [Lj Segge:tet Ste: Fight Deck €3 woresrecomauice G ec Mt RE Fett ~ hay fo Aunt Beta Pian your trip Plan your trip Plan & Book your perfect trip to Europe! Easily plan your trip based on your travel preferences, budget and personal style. Sa
Slide 51: In-Destination Travel Experiences
Janus Two IN-DESTINATION TRAVEL EXPERIENCES
Slide 52: Travel Experience Network
TRAVEL EXPERIENCE NETWORK Vision: Distributing and Delivering Amazing In-Destination Travel Experiences
Slide 53: Travel Experience Network
Distribution Wholesale/ Inbound/ GSA/ Voucher Procurement Hotels FIT/GIT/ Corp/ Leisure/ Corp 2. TRAVEL Groups etc Distributing & Delivering EXPERIENCE Amazing In-Destination Travel NETWORK Experiences Tours Ops Shared Mature/ Services Youth/Small Tax/Legal/ Group/ Asset/FX/ Adventure Finance DMC FI
Slide 54: Corporate Travel
Janus Three CORPORATE TRAVEL
Slide 55: Truly Global: The Big 5
TRULY GLOBAL: The Big 5 FLT CWT By sales, FLT now ranks among the world’s top 5 corporate travel managers BCD AMEX HRG
Slide 56: FLT's Corporate Brands
FLT’S CORPORATE BRANDS ✓ TMC ✓ SME ✓ Entertainment / Sport ✓ MICE ✓ Education ✓ Consulting ? Low Cost Corporate Now turning over more than $6b per year
Slide 57: Our Difference
OURDIFFERENCE = BOOKING& REPORTING —EXPERTINSIGHTS — OFFERS. Add up your savings with our travel calculator
Slide 58: FCM ION
FCM ION: AboutFCM ~ Solutions » Services y | NewsHub Australia | 1300557 854 fa] Contact Us v Technology that will streamline your travel all over the world Read more > About FCM Technology in Making a difference to your business travel 1% Client case studies - proven success Your business travel pa
Slide 59: The Making of The Dressmaker
THE MAKING OF THE DRESSMAKER screen TRAVEL SERVICES ——
Slide 60: Campus Travel
Campus Travel
Slide 61: cievents Services
te, Australia 36129923 89@0) J cieventzcom inspire. Our Services Event Event Incentives, Digital & Design Latest Event Twitter Management Production Reward & Management Our al, gI cnt Recognition me News
Slide 62: 4th Dimension Business Travel Consulting
ALTHDIMENSIC BUSINE RAVEL CONSULTING
Slide 63: Student/Youth Travel
Janus Four STUDENT/YOUTH TRAVEL
Slide 64: Highly Coveted Youth Travelers
Highly Coveted Youth Travelers Multiple long-haul trips Educational, leisure & altruistic per year travel purposes 18 – 30 years-old Long-term customer base Explore new destinations High yield Global explorers Flexible dates $200b-a-year industry Future business travelers
Slide 65: The Youth Sector
THE YOUTH SECTOR 48% of Aussie Highly outbound fragmented travellers are aged market under-40 On and offline A multi billion $ offerings: sector StudentUniverse & Student Flights The opportunity
Slide 66: Other Businesses
Janus Five OTHER BUSINESSES
Slide 67: Other Businesses
OTHER BUSINESSES ADJACENT TO TRAVEL BUSINESS MODEL
Slide 68: Slide 68
Slide 69: Pedal Group
4 PEDAL G RoUR Our purpose... ge Enriching mind, pea earth and soul with the freedom of riding. ADVANCE TRADERS*
Slide 70: Incubation/Acceleration/Investment
Janus Six INCUBATION/ ACCELERATION/ INVESTMENT
Slide 71: Incubation/Acceleration/Investment
INCUBATION/ACCELERATION/ INVESTMENT Objective: To establish the world’s leading travel accelerator, incorporating areas of our DNA and contributing to our future story Long-term plan for incubation Mentoring & hubs in key developing start-ups to accelerate global locations growth & revenue Investing
Slide 72: Achieving the Objective?
Achieving the Objective? • Why would we do this? • What does it look like? • How are we going to make this work? Flight Centre Travel Group – Business
Slide 73: FLT … Our Strategic Anchors
FLT … Our strategic anchors 1. Make it easy to buy from us and thus lead to sticky and deep customer relationships 2. Famous distinctive brands with expertise 3. Scalable growth
Slide 74: Digital Strategy
DIGITAL STRATEGY We have a clear global digital commerce strategy. Improving usability and bookability. Investing in scalability. Blending offline and online. Unique access to agents. 74
Slide 75: Book With Me: Coming Soon
BOOK WITH ME: COMING SOON A blended travel initiative • Allows customers to seamlessly transact with their consultant when & how they want Personalised URLs • Customer can use the consultant’s personal Flight Centre URL to book online, while maintaining the personalised management of their travel ar
Slide 76: M1 Reta User Transfe ustomes [EZ] Sx0 Pecewords - & @ Orwetovay tobdays Av:
3) il M1 Reta User Transfe ustomes [EZ] Sx0 Pecewords - & @ Orwetovay tobdays Av: GP Flight Centre - Gatews Fight mmerary conve 4 FLIGHT CENTRE @ 133 133 Ny Watt Horne Geta Quote Fights Holidays Hote Rad Tours Crumes Cartire Extras Destinations Deak Contact Experts Q, 6s J Allitie.drop of heaven on
Slide 77: Market Conditions & Outlook
MARKET CONDITIONS & OUTLOOK
Slide 78: FY17: Guidance
FY17: GUIDANCE • Impossible to provide meaningful FY17 profit guidance after 8 weeks’ trade & in volatile conditions • Q4 conditions continued into July but some recovery in August • Will continue to monitor market conditions & performance during Q1 • Expect to provide more detailed FY17 guidance at
Slide 79: FY17: Growth Drivers - Productivity
FY17: GROWTH DRIVERS - PRODUCTIVITY Grow Stop doing blended unnecessary & online things sales Increase enquiry IT & System & improve change conversion Right Drive P2P product & margin
Slide 80: FY17: Other Growth Drivers
FY17: OTHER GROWTH DRIVERS Network Accelerated TTV expansion & growth •Dedicated online On track to top enhancement brands growing strongly $20b this year • Transactional Online Stronger returns websites being rolled sales on recent out globally growth investments • Driving the blended Asia model re
Slide 81: TTV Growth: On Track to Top $20b
TTV GROWTH: ON TRACK TO TOP $20b FY97: $FY04: $FY08: FY17: $1b+ $5b+ $10b+ $20b+ If TTV exceeds $20b this year, sales will have increased more than 16-fold in 20 years
Slide 82: FY17: Online Expansion
FY17: ONLINE EXPANSION By the end of FY17, 12 months ago, FLT FLT will have a generated almost all of its significant online online leisure TTV by selling presence in Australia, FY17: scheduled carriers’ fares on Should the Americas, Europe, flightcentre.com.au FY16: generate South Africa, New Major
Slide 83: StudentUniverse: Growing Strongly
STUDENTUNIVERSE: GROWING STRONGLY Strong profit and TTV contribution since acquisition International expansion opportunities – China, Canada, UK Synergies – dNA area created, access to FLT student fares
Slide 84: FY17: Growth Drivers – Expansion
FY17: GROWTH DRIVERS – EXPANSION Targeting 6-8% sales staff growth globally Organic growth, complemented by strategic acquisitions (vertical & horizontal opportunities) Will have more than 20,000 people & more than 3000 sales teams Entering new geographies (organic expansion & acquisitions)
Slide 85: FY17: FLT's Growth Recipe
FY17: FLT’S GROWTH RECIPE Variations in Variable FCB in Australia has a how brands organic growth grow on P2P strong shop presence & rates Index Rates differ from brand to has been growing at edges brand & from country to of P2P Index country Exporting proven Growing network of brands Brands that ar
Slide 86: FY17: Europe & The Americas
FY17: EUROPE & THE AMERICAS Europe • Some ongoing uncertainty in UK following BREXIT vote • Some recovery expected during FY17 as leisure & corporate travellers adapt • Experienced management team in place, brand & geographic diversity Americas • Benefits flowing from combined Americas leadership st
Slide 87: FY17: Australia
FY17: AUSTRALIA Leisure & New revenue corporate streams growth opportunities Outbound travel increasing, but at a slower rate than normal New credit card laws will adversely affect FLT but Competitive Market aviation the company believes new sector growth initiatives will generally offset any loss o
Slide 88: FY17: Australia – New Revenue Streams
FY17: AUSTRALIA – NEW REVENUE STREAMS New offerings – New brands – interest-free Aunt Betty holidays, Student Flights’ lay-buys New products – Increased LCC & IAPs, Key To The ancillary product World, Jetbidders New sales Revenue Streams
Slide 89: FY17: New Products – Key to the World
FY17: NEW PRODUCTS – KEY TO THE WORLD More than 50,000 in circulation in 1st nine weeks
Slide 90: FY17: New Products – Key to the World
FY17: NEW PRODUCTS – KEY TO THE WORLD Unique Offering •World 1st digital travel wallet – lock in the exchange rate for up to 10 currencies •Created by Travel Money Oz, MasterCard & Cover-More Roll-out Underway • Launched mid-July 2016 & available through the FLT brands and via www.keytotheworld.com.
Slide 91: Jetbidders: Any Flight. Anywhere.
C&A https://wwwjetbidders.com ~~ A Any flight. Anywhere.
Slide 92: FY17: Growth Opportunities – LCCs
FY17: GROWTH OPPORTUNITIES – LCCs • LCCs had 16.4% In-store and international market-share online growth in Australia during CY15 FLT’s LCC sales Better online increasing connectivity strongly (off small base) & range • Market-share (to date) peaked at 18.7% during CY10 Commercial NXGen New customer
Slide 93: Market Conditions: Positive Trends
MARKET CONDITIONS: POSITIVE TRENDS Healthy competition: 53 international passenger airlines servicing Australia during CY15 Stability: Only one change (Etihad replacing Thai) to Australia’s top-10 airlines between CY10 & CY15 (see Supplementary Details ) International capacity increasing: Solid grow
Slide 94: Market Conditions: Lower Seat Utilisation
MARKET CONDITIONS: LOWER SEAT UTILISATION 85% 80% 75% 70% 65% 60% January February March April May Seat Utilisation CY16 Seat Utilisation CY15 Airlines are adding international capacity during CY16 but seat utilisation is falling, leading to ...
Slide 95: Market Conditions: Golden Era of Travel
MARKET CONDITIONS: GOLDEN ERA OF TRAVEL Opportunities for Strong capacity travellers to cash-in growth on cheap deals Cheap airfares Opportunities for FLT Lower to work with carriers to seat promote special offers utilisation & help fill planes
Slide 96: Market Conditions: Falling Fares
MARKET CONDITIONS: FALLING FARES $1,500 $1,000 $500 $0 Auckland Singapore Bangkok Bali Fiji Phuket Hawaii London LA New York Advertised fare 17/8/15 Advertised fare 17/8/16 Based on cheapest advertised return fares Headline fares to the 10 top destinations were almost 15% cheaper than last year. fro
Slide 97: Falling Fares: The Turner Index
FALLING FARES: THE TURNER INDEX $140,000 $131,000 $120,000 $100,000 Actual fare to London $80,000 $76,000 Adjusted fare (inflation) $60,000 Adjusted fare (based on today's $40,000 average wage) $20,000 $1,170 $1,170 $0 1947 2016
Slide 98: An Amazing Industry!
AN AMAZING INDUSTRY! Best ever breadth and depth of travel to buy! More affordable than ever!
Slide 99: Dividends & Capital Management
DIVIDENDS & CAPITAL MANAGEMENT FY16 DIVIDENDS CAPITAL MANAGEMENT • Plan to retain sufficient cash to fund growth initiatives, capitalise on opportunities & buffer FLT from future economic downturns 60c per 92c per 152c per • Board committed to returning any surplus cash in future to share share shar
Slide 100: Questions?
QUESTIONS?
Slide 101: Supplementary Details
SUPPLEMENTARY DETAILS
Slide 102: 5-Year Growth Trajectory
5-YEAR GROWTH TRAJECTORY JUNE 2016 JUNE 2015 JUNE 2014 JUNE 2013 JUNE 2012 TTV $19,305m $17,598m $16,049m $14,259m $13,238m Income margin 13.8% 13.6% 14.0% 13.9% 13.8% EBITDA $413.9m $417.0m $378.4m $395.2m $330.7m PBT $345.0m $366.3m $323.8m $349.2m $290.4m NPAT $244.6m $256.6m $206.9m $246.1m $200
Slide 103: FY16 TTV Milestones
FY16 TTV MILESTONES Australia: Topped $10b for On average, FLT 1st time sold more than USA: Topped $AU3b for 1st • FLT exceeded $AU1b in TTV $50m worth of time in 5 of 10 regions travel globally South Africa: Topped R5b every day during for 1st time • Combined TTV in Asia, FY16 New Zealand: Topped I
Slide 104: FY16: Strategic Acquisitions & Rationale
FY16: STRATEGIC ACQUISITIONS & RATIONALE StudentUniverse BYOjet • Leading online platform • Ultra low cost airfare with proprietary specialist technology • Cheaper alternative to • Ability to sell restricted many of the larger OTAs student/youth fares online • Rolled out in UK in August • Strong gro
Slide 105: FY16: Strategic Acquisitions & Rationale
FY16: STRATEGIC ACQUISITIONS & RATIONALE FCM FCM Malaysia Netherlands Bolstering the global FCM network & cievents’ offering by acquiring businesses in key locations Maya Events FCM Mexico (HK) Broader Corporate Footprint
Slide 106: FY16: Strategic Acquisitions - Avmin
FY16: STRATEGIC ACQUISITIONS - AVMIN • Charter & logistics specialist - profitable in 1st year Mining & • High profile client list – blue chip companies, VIPs, construction Sports teams celebrities & sports teams • Long-term Remote Airport Management contract with Santos VIP & Celebrity Special even
Slide 107: FY16: Operating Cash Flow
FY16: OPERATING CASH FLOW • $356.6m operating cash inflow over full year, in line with FY15 • Major swings in operating cash flow typically brought about by timing of airline payment cycle (BSP) • FLT’s cash builds during peak 2H booking periods for payment to suppliers after peak travel seasons dur
Slide 108: Australia's Top-10 Carriers
AUSTRALIA’S TOP-10 CARRIERS 2015 Calendar Year 2010 Calendar Year 1. Qantas 1. Qantas 2. Emirates 2. Singapore Airlines 3. Jetstar Other airlines 3. Air New Zealand Other airlines 4. Singapore Airlines had 27.2% 4. Emirates had 26.1% 5. Virgin combined 5. Jetstar combined market-share market-share 6
Slide 109: International Capacity Growth
INTERNATIONAL CAPACITY GROWTH 12.00% 10.00% After modest growth during 8.00% CY15, international 6.00% capacity is up 4.00% strongly in 2.00% Australia during CY16 (Source: BITRE) 0.00% Jan-16 Feb-16 Mar-16 Apr-16 May-16 Capacity Growth CY15 AVG Growth Rate
Slide 110: Disclaimer
Disclaimer Disclaimer and important notice for presentation This presentation has been prepared by Flight Centre Travel Group Limited ABN 25 003 377 188 (FCTG). This presentation contains general background information about FCTG and its subsidiaries and their activities current as at 25 August 2016
Flight Centre Travel Group — FY2016 Earnings Presentation on 6ix