Expedia Group, Inc. · NASDAQ:EXPE
Expedia — Investor Day (March 2016)
36 slides from Expedia's investor day presentation, Mar 16, 2016
Slide 1: Investor presentation
Investor presentation March 16, 2016
Slide 2: Safe harbor
Safe harbor Forward-looking statements. This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance. These forward-looking statements are based on management’s expectatio
Slide 3: Expedia, Inc. at a glance
Expedia, Inc. at a glance Largest travel company $6.6B revenue growing $60B 450M+ monthly site visits2 gross bookings1 >2X faster vs. industry 75+ countries served 1.5M+ lodging options for 18K+ employees globally travelers Notes: Expedia, Inc. results shown for 2015. 1Gross bookings is an operating
Slide 4: Key investment highlights
Key investment highlights 1 Huge addressable market 2 Operating the world’s largest, diversified travel platform 3 Harnessing significant scale and technological advantages 4 Leading brands with proprietary channels 5 Strong financial performance on solid trajectory 6 Track record of successful M&A
Slide 5: Huge opportunity in $1.4T global market
Huge opportunity in $1.4T global market Global leader with significant headroom for further growth United Asia Latin States EMEA Pacific America and Canada Online travel segment 19% 5% 4% 5% 45% of total 56% 47% 35% 25% travel market 2016 total travel market 11% 2% 1% 1% Total travel market ~$1.4T $
Slide 6: World's largest, diversified travel platform
World’s largest, diversified travel platform High volume & The Expedia, Inc. global travel platform Broad and diversified diversity of DEMAND SUPPLY Monthly visits1 Hotels 450M+ in 269K+ 75+ countries Vacation rentals Active corporate travelers Unmatched Scale and relevance Unrivaled 1.2M+ 1M+ bread
Slide 7: Scale advantages in demand generation
Scale advantages in demand generation Optimization Efficiency frontier 𝐌𝐌𝐌𝐌𝐌𝐌𝐌𝐌𝐌𝐌𝐌𝐌𝐌𝐌𝐌𝐌 𝐆𝐆𝐆𝐆𝒕𝒕 𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝐒𝒕𝒕 Subject to ≤ Target Efficiency𝑡𝑡 𝐆𝐆𝐆𝐆𝒕𝒕 Projected gross profit 𝑁𝑁 𝐆𝐆𝐆𝐆 𝐆𝐆𝐆𝐆𝒕𝒕 = � clicks𝑖𝑖𝑖𝑖 × 𝐂𝐂𝐂𝐂𝐂𝐂 𝒊𝒊𝒊𝒊 × ( ) 𝑖𝑖=1 TXN…
Slide 8: Scale advantages in innovation
Scale advantages in innovation Brand Expedia test volume ~5K of best and brightest 1,375 product & technology minds in travel1 1,300 1/3 of ideas make sites better 27.5x test velocity + - 775 1/3 do nothing 1/3 make it worse = 450 100 Multi-variant tests reaching statistical 50 significance faster t
Slide 9: Building scale advantage across spectrum of travel products
Building scale advantage across spectrum of travel products Market 2015 Expedia Product Indexed unit volume on replatforming4 opportunity growth3 platform 180 Air $600B +35% 170 160 Hotel $400B +36% 150 140 Car $40B +37% 130 120 Activities1 $80B +43% 110 100 Cruise $20B +5% 90 Year 1 Year 2 Coming i
Slide 10: Unique acquisition integration approach
Unique acquisition integration approach Travelocity case study Before After Declining revenues Double-digit revenue growth Single-digit adjusted EBITDA margins OTA-leading adjusted EBITDA margins Standalone end-to-end OTA functions Leveraging Expedia global platforms Large employee base Small employ
Slide 11: Scale advantages in supply
Scale advantages in supply More selection equals Industry leading Accelerating pace of supply greater conversion lodging portfolio acquisition1 Illustrative New hotel properties added 1,508K 73K 855K Conversion 29K 1,000K 23K 1,690K 15K 16K 0% 20% 40% 60% 80% 100% Vacation 2011 2012 2013 2014 2015 P
Slide 12: Scaling partner-facing innovation
Scaling partner-facing innovation Real-time Feedback EPC Conversations Accelerator Helps hoteliers improve the Encourages direct on-platform Allows hoteliers the flexibility to stay experience of Expedia dialogue between hoteliers and bid towards a better sort rank travelers booked guests when more
Slide 13: Unmatched portfolio of leading travel brands with global reach
Unmatched portfolio of leading travel brands with global reach Core OTA Only global full-service A leading hotel specialist A leader in global corporate Global vacation rental A leading hotel metasearch Online Travel Agency, globally, in 65+ countries travel, in 65 countries marketplace, in 8 countr
Slide 14: Large, diversified traffic channels across geographies
Large, diversified traffic channels across geographies Vast majority of Expedia’s bookings generated through direct & branded channels Indirect, 95M+ 50M+ 120M+ performance- unique monthly unique monthly monthly visits2 Direct, based visitors2 visitors2 branded 2015 Gross Illustrative bookings by ch
Slide 15: Air shoppers drive growth opportunities across product categories
Air shoppers drive growth opportunities across product categories Air attach revenue2 CAGR: 29% 55M monthly air shoppers1 8.6B annual air searches1 2012 2013 2014 2015 Notes: 1Monthly air shoppers and annual air searches shown for 2015. 2Air attach revenue shown for Brand Expedia, excluding AirAsia
Slide 16: Expedia loyalty programs drive repeat & create competitive differentiation
Expedia loyalty programs drive repeat & create competitive differentiation • 20M members • Available in 65+ countries • 12M+ members • Available in 29 countries • ~6M members • Nearly 1 in 5 members redeem Orbucks within 1 week of earning Notes: All metrics provided are as of 12/31/15. 16
Slide 17: Investments in mobile drive growth & engagement
Investments in mobile drive growth & engagement App users repeat 130M+ >2x cumulative app downloads1 more frequently than average user2 Over Cross-device 40% of traffic shopping 55% of travelers use arrives via mobile3 2 or more devices4 Notes: 1Cumulative app downloads as of 12/31/15 for all Expedi
Slide 18: Egencia is 5th largest corporate travel company in the world
Egencia is 5th largest corporate travel company in the world Consistently taking share; growing faster than competitors Gross bookings and revenue Transaction growth2 $M 14% Gross bookings 1 Revenue 5,427 5,149 4,533 2% 3,585 -1% 2,614 1 • 13M car, hotel and air reservations 291 365 400 400 179 • 1M
Slide 19: HomeAway is a world leader in vacation rentals
HomeAway is a world leader in vacation rentals $100B market opportunity1 Leading portfolio Driving volume Alternative accommodation listings (thousands)2 Estimated annual vacation rental gross bookings ($B)3 2,000 14-16 1,239 7-9 6-9 740 392 Sources: 1$100B market opportunity per Piper Jaffray (Marc
Slide 20: HomeAway transition progressing
HomeAway transition progressing Adjusted EBITDA target of $350M by 2018 Undermonetized Adjusted EBITDA Opportunity unlocked by Take rate1 $M introduction of: ~15% 350 Traveler fee CAGR:41% Launched February 2016, 10-13% ahead of schedule CAGR:14% Increased focus on product & technology 119 125 Trans
Slide 21: trivago: brand led innovative hotel search leader
trivago: brand led innovative hotel search leader Proprietary innovative 100% focused on the best approach to TV advertising lodging search experience 1M+ hotels Prices compared across 250+ booking sites and 100+ hotel chains Presence in 55+ countries Notes: Stats as of 12/31/15. 21
Slide 22: trivago growing revenue strongly and investing in global expansion
trivago growing revenue strongly and investing in global expansion Significant revenue growth driven by investment in sales & marketing Yearly revenue and EBITDA global1 High-margin core markets2 funding global €M growth 494 14% Revenue 2013 48% 2015 EBITDA 52% 86% 311 186 Core Rest of world 99 Grow
Slide 23: Expedia, Inc. target P&L
Expedia, Inc. target P&L 2016 2018+ 2013 – 20151 (vs. 2013-2015 baseline) (vs. 2013-2015 baseline) 2018+ target P&L key Revenue 18.0%-21.0% Faster Healthy growth considerations (Y/Y growth) Cost of revenue Healthy top-line growth 18.5%-21.0% Lower Lower driven by solid unit (% of revenue) growth wit
Slide 24: Expedia, Inc. new Seattle headquarters: Building for the future
Expedia, Inc. new Seattle headquarters: Building for the future • 40 acres on Seattle waterfront • Initial build out of ~1.2M sq. ft. of office space Key facts • Seeking permits for future expansion capacity of additional ~730K sq. ft. • Construction planned to begin in late 2016 Amazon • Brings all
Slide 25: Consistent financial execution
Consistent financial execution Room nights Gross bookings M $B CAGR: 25% 203 CAGR: 22% 60 48 150 38 120 33 103 2012 2013 2014 2015 2012 2013 2014 2015 Revenue1 Adjusted EBITDA1 $B $M CAGR: 19% CAGR: 13% 6.6 5.6 1,165 1,051 4.6 891 3.9 804 2012 2013 2014 2015 2012 2013 2014 2015 Notes: All figures sh
Slide 26: Solid track record of capital allocation
Solid track record of capital allocation 2011 2012 2013 2014 2015 2016 2017 2018 $M 5,321 594 663 Share repurchases 515 537 397 Dividends 283 209 217 77 130 76 85 108 M&A enterprise value1 45 2011 2012 2013 2014 2015 Total free cash flow generated: $4B2 2011 2011 – 2013 2014 – 2015 2016 – 2018 expec
Slide 27: Key investment highlights
Key investment highlights 1 Huge addressable market 2 Operating the world’s largest, diversified travel platform 3 Harnessing significant scale and technological advantages 4 Leading brands with proprietary channels 5 Strong financial performance on solid trajectory 6 Track record of successful M&A
Slide 28: GExpedia [FQ rotciscom Bromeaway trivago’ > EGENCIA
GExpedia [FQ rotciscom Bromeaway trivago’ > EGENCIA epecigariiate = ORBITZ +P sravelocity hetwire wot@. fEvenereD BUxciiions CarRentalson GG ocat expert SFulsoliveencors VRBO’ Seheaptiickets' Abritel’ lastminute.com.au sta YZ OwnersDirect Homelidays & BedandBreakfastcom —_VacationRentals.com Topru r
Slide 29: Appendix
Appendix
Slide 30: Non-GAAP definitions
Non-GAAP definitions Expedia, Inc. (excluding eLong). Expedia sold its ownership interest in eLong, Inc. on May 22, 2015. In order to allow comparison with prior periods for the ongoing Expedia businesses, Expedia, Inc. (excluding eLong) gross bookings, revenue, Adjusted EBITDA, operating income (lo
Slide 31: Non-GAAP / GAAP reconciliation: Revenue
Non-GAAP / GAAP reconciliation: Revenue $ Millions 2012 2013 2014 2015 Core OTA revenue $3,621 $4,069 $4,905 $5,877 trivago revenue - 216 414 548 Egencia revenue 291 365 400 400 HomeAway revenue - - - 20 Intercompany eliminations - (43) (133) (215) Revenue excluding eLong $3,912 $4,607 $5,585 $6,631
Slide 32: Non-GAAP / GAAP reconciliation: Adjusted EBITDA
Non-GAAP / GAAP reconciliation: Adjusted EBITDA $ Millions 2012 2013 2014 2015 Core OTA adjusted EBITDA $1,068 $1,172 $1,387 $1,600 trivago adjusted EBITDA - 18 4 3 Egencia adjusted EBITDA 54 60 61 68 HomeAway adjusted EBITDA - - - 4 Unallocated overhead costs (318) (359) (401) (510) Adjusted EBITDA
Slide 33: Non-GAAP / GAAP reconciliation: trivago revenue & adjusted EBITDA
Non-GAAP / GAAP reconciliation: trivago revenue & adjusted EBITDA Millions 2014 2015 trivago revenue in euros €311 €494 Exchange rate 1.33 1.11 trivago revenue in USD $414 $548 Millions 2014 2015 trivago adjusted EBITDA in euros €4 €3 Exchange rate 1.33 1.11 trivago adjusted EBITDA in USD $4 $3 Note
Slide 34: Non-GAAP / GAAP reconciliation: Free cash flow
Non-GAAP / GAAP reconciliation: Free cash flow $ Millions 2011 2012 2013 2014 2015 TOTAL Cash provided by operations $826 $1,237 $763 $1,367 $1,368 $5,561 Capital expenditures (208) (236) (309) (328) (787) (1,868) Free cash flow $618 $1,001 $455 $1,039 $581 $3,694 Notes: Numbers may not sum due to r
Slide 35: Non-GAAP / GAAP reconciliation: Direct selling & marketing expense
Non-GAAP / GAAP reconciliation: Direct selling & marketing expense $ Millions 2015 Direct selling & marketing expense $2,676 Indirect selling & marketing expense 606 Total adjusted selling & marketing expense $3,282 Stock-based compensation 33 Depreciation 12 eLong 54 Selling & marketing expense att
Slide 36: Non-GAAP / GAAP reconciliation: Adjusted technology & content expense
Non-GAAP / GAAP reconciliation: Adjusted technology & content expense $ Millions 2015 Total adjusted technology & content expense $528 Stock-based compensation 27 Depreciation 265 eLong 10 Technology & content expense attributable to Expedia, Inc. $830 Notes: Numbers may not sum due to rounding. 36