Helloworld Travel Ltd · ASX:HLO
Helloworld Travel — H1 2019 Earnings Presentation
33 slides from Helloworld Travel's earnings presentation, February 2019
Slide 1: 2019 Half Year Investor Presentation
2019 Half Year Investor Presentation Andrew Burnes CEO Michael Burnett CFO
Slide 2: Disclaimer
Disclaimer The information contained in these materials or discussed at the presentation is not intended to be an offer for subscription, invitation or recommendation with respect to shares or securities in any jurisdiction. No representation or warranty, express or implied, is made as to the fairne
Slide 3: Agenda
1. Overview 2. Financial Performance Agenda 3. Strategy & Outlook 4. Appendix Helloworld Travel Limited • 1H19 Investor Presentation 3
Slide 4: Overview
OVERVIEW Helloworld Travel Limited • 1H19 Investor Presentation 4
Slide 5: 1H19 Key Metrics
1H19 Key Metrics • TTV and revenue up 6.1% and 7.7% respectively TTV Dividend driven primarily by Australian Retail, +6.1% $3,153m +14.3% 8.0 cents underpinned by our business expansion. • Focus on driving profitable TTV. Earnings per Revenue • EBITDA up 5.6% with contributions across all +2.8% Shar
Slide 6: 1H19 Operational Highlights
1H19 Operational Highlights • Over $50m in new accounts won by HLO Corporate businesses in the period. • QBT appointed sole provider of travel management services for the SA Government. • Acquisition of Show Group business complementing existing corporate operations. • Inspire Travel Management cont
Slide 7: 1H19 Operational Highlights
1H19 Operational Highlights • Improving Helloworld Travel brand recognition in Australia, with prompted brand awareness up to 71% (from 60%) and unprompted at 30% (from 22%). Also growing brand awareness in New Zealand with prompted awareness up to 67% (from 52%) and unprompted awareness consistent
Slide 8: Financial Performance
FINANCIAL PERFORMANCE Helloworld Travel Limited • 1H19 Investor Presentation 8
Slide 9: 1H19 Half Year Results
1H19 Half Year Results • Strong TTV performance from retail networks in Australia and New Zealand. 1H19 1H18 Change • Concentration on profitable TTV across all $m $m % divisions. Total Transaction Value (TTV) 3,152.9 2,971.0 6.1% Revenue 182.2 169.1 7.7% • Reported revenue benefiting from prior yea
Slide 10: Group Revenue and EBITDA
Group Revenue and EBITDA Group Revenue - 1H18 to 1H19 Group EBITDA - 1H18 to 1H19 185 -1.2 42 0.4 42.0 182.2 -0.1 180 14.2 41 1.8 Millions ($'m) Millions ($'m) 175 40 170 0.1 0.1 169.1 39.8 165 39 1H18 Revenue Underlying Business Disposed 1H19 Revenue 1H18 EBITDA Underlying Business Disposed Underly
Slide 11: Group Revenue and EBITDA – by segment
Group Revenue and EBITDA – by segment Group Revenue - 1H18 to 1H19 Group EBITDA - 1H18-0.4 to 1H19 185 -0.4 43 -0.7 -1.1 -0.5 182.2 180 42 42.0 14.9 2.0 Millions ($'m) Millions ($'m) 175 41 170 40 0.7 39.8 169.1 165 39 1H18 Revenue Australia New Zealand Rest of World 1H19 Revenue 1H18 EBITDA Austral
Slide 12: Air Ticketing – Domestic transactions and price trends
Air Ticketing – Domestic transactions and price trends Cumulative YoY growth 1st Half FY19 - AU & NZ Cumulative YoY growth FY18 - AU & NZ 10.0% 5.0% 6.1% 4.0% 3.0% 2.4% 5.0% 2.0% 3.6% 1.7% 1.0% 0.0% 0.0% Transactions Average Price Transactions Average Price Current half year Prior Year • Continued s
Slide 13: Air Ticketing – International transactions and price trends
Air Ticketing – International transactions and price trends Cumulative YoY growth 1st Half FY19 - AU & NZ Cumulative YoY growth FY18 - AU & NZ 5.0% 40.0% 3.0% 30.0% 20.0% 7.8% 0.0% 0.9% 10.0% 0.0% -10.0% -6.4% -20.0% -5.0% -30.0% Transactions Average Price Transactions Average Price Current half yea
Slide 14: Australia Overview
Australia Overview 1H19 1H18 Change • TTV growth from retail, wholesale and corporate divisions. $m $m % • Revenue increase driven by business acquisitions in Total Transaction Value (TTV) 2,724.8 2,525.2 7.9% the prior period and improved contracting Revenue 144.9 130.0 11.4% outcomes. Gross margin
Slide 15: Australia Revenue and EBITDA
Australia Revenue and EBITDA Australia Revenue - 1H18 to 1H19 Australia EBITDA - 1H18 to 1H19 145 144.9 39 0.0 14.2 -2.2 Millions ($'m) Millions ($'m) 1.8 - 135 37 1.2 -0.5 36.5 1.2 130.0 35.7 125 35 1H18 Revenue Underlying Disposed Business 1H19 Revenue 1H18 EBITDA Underlying Business Disposed Cost
Slide 16: New Zealand Overview
New Zealand Overview 1H19 1H18 Change $m $m % • TTV impacted by concentration on profitable TTV. Total Transaction Value (TTV) 385.1 395.4 (2.6%) • Revenue decrease reflects sold company Revenue 28.9 29.6 (2.3%) owned stores, excluding this, retail growth was Gross margin % 7.5% 7.5% 0.0% offset by
Slide 17: New Zealand Revenue and EBITDA
New Zealand Revenue and EBITDA New Zealand Revenue - 1H18 to 1H19 New Zealand EBITDA - 1H18 to 1H19 30 6 5.8 0.1 29.6 2.0 -0.8 -0.6 Millions ($'m) Millions ($'m) 29 4 0.1 -0.1 28.9 3.8 28 2 1H18 Revenue Underlying revenue Disposed company 1H19 Revenue 1H18 EBITDA Underlying Disposed Underlying cost
Slide 18: Rest of World (ROW) Overview
Rest of World (ROW) Overview 1H19 1H18 Change $m $m % • Lower TTV from Insider Journeys and Total Transaction Value (TTV) 43.0 50.4 (14.6%) wholesale USA. • Revenue decrease partially offset by revenue Revenue 8.5 9.6 (11.8%) margin improvement. Gross margin % 19.7% 19.0% 0.7% • Operating expenses l
Slide 19: EBITDA to NPAT
EBITDA to NPAT 1H19 1H18 Change $m $m % • Increased amortisation related to business acquisitions. EBITDA 42.0 39.8 5.6% Depreciation & amortisation (9.5) (8.9) (6.6%) • Interest expense reflects additional debt from funding of business acquisitions. Finance costs (1.0) (0.6) (56.3%) • Effective tax
Slide 20: Liquidity and funding
Liquidity and funding • Total cash decrease since 30 June, Dec-18 Jun-18 Dec-17 reflects seasonality of client cash held Liquidity $m $m $m and timing of the business cycle, Company cash 21.0 42.0 37.6 partially offset by cash generated from operating profits. Client cash 109.1 161.5 122.4 Total cas
Slide 21: Cash conversion
Cash conversion 1H19 1H18 Change Working capital movement due to: $m $m $m • Adoption of IATA regulations for airline EBITDA 42.0 39.8 2.2 ticket payments and timing of weekly Non cash and working capital movement (31.6) (9.0) (22.6) payments around period cut offs. Finance costs paid (0.9) (0.7) (0
Slide 22: Strategy & Outlook
STRATEGY & OUTLOOK Helloworld Travel Limited • 1H19 Investor Presentation 22
Slide 23: Strategy and Initiatives
Strategy and Initiatives PRODUCT & BRAND AWARENESS PROCESS TECHNOLOGY & REVENUE & CUSTOMER EFFICIENCIES INNOVATION MAXIMISATION ACQUISITION ResWorld Increasing network uptake of Training and development Integration of Air Tickets Retail White label websites & apps preferred product Footprint consoli
Slide 24: Growth in member networks and numbers
Growth in member networks and numbers 2,233 at 31 DECEMBER 2018 | 2,223 at 30 JUNE 2018 • Building a diverse network of high calibre and high performing leisure and corporate members. • Providing members with improved product offerings and creating store efficiencies through enhanced technology. • I
Slide 25: Conclusion – Outlook
Conclusion – Outlook • Business continues to deliver growth in macro indices. • Ongoing investment in technology, platforms and brands with continued focus on growing our business and efficiency gains. • FY19 EBITDA guidance reaffirmed, expected to be in the range of $76.0 million to $80.0 million.
Slide 26: Appendix
APPENDIX Helloworld Travel Limited • 1H19 Investor Presentation 26
Slide 27: Company background information
Company background information A$6.10 A$759.5 M Share Price at 124.5 M A$130.1M Cash Market Cap at 31 Dec 2018 Shares Issued A$63.4M Debt 31 Dec 2018 Board & Management Team Non-Executive Director and Chairman - Garry Hounsell Mr Hounsell was appointed to the Board as Chairman on 4 October 2016. In
Slide 28: Our Business
OUR BUSINESS • Retail networks & ticketing • Wholesale • Inbound • Corporate 28 28
Slide 29: Revenue recognition summary
Revenue recognition summary Helloworld Travel Limited • 1H19 Investor Presentation 29
Slide 30: Revenue reconciliation
Revenue reconciliation Under AASB15, wholesale businesses have moved from ticketed to departed revenue recognition. Below tables provide a reconciliation of the movement between the FY18 reported to the restated revenue and EBITDA. REVENUE ($m's) 1H18 2H18 FY18 FY18 Revenue Reported 164.9 162.0 326.
Slide 31: Yearly trend analysis
Yearly trend analysis The table below provides relevant Group performance information for key financial measures over the last five financial years: 2014 2015 2016 2017 2018 (1) $m's $m's $m's $m's $m's Revenue 291.7 279.2 300.5 326.8 326.0 EBITDA (excluding impairment FY15/FY14) 40.6 24.1 25.3 55.2
Slide 32: Thank You
THANK YOU Helloworld Travel Limited • 1H19 Investor Presentation 32
Slide 33: Investor Contact
INVESTOR CONTACT: Michael Burnett Chief Financial Officer michael.burnett@helloworld.com.au MEDIA CONTACT: Trudi Sheppard Director of Communications trudi.sheppard@helloworld.com.au 03 9867 9600 Helloworld Travel Limited • 1H19 Investor Presentation 33