Flight Centre Travel Group Limited · ASX:FLT
Flight Centre Travel — H1 FY2022 Earnings Presentation
56 slides from Flight Centre Travel's earnings presentation, Feb 24, 2022
Slide 1: FLT: FY22 First Half Result Presentation
FLT: FY22 First Half Result Presentation February 24, 2022 1 FY22 H1 – FCTG Presentation
Slide 2: Agenda: Today's presentation
Agenda: Today’s presentation Graham “Skroo” Turner Adam Campbell Chris Galanty Melanie Waters-Ryan Global MD & CEO Global CFO CEO - Corporate CEO – Leisure & Supply Trading Update & Outlook FY22 1H Results Strategic Update Strategic Update (Section 1) (Section 2) (Section 3) (Section 4) 2 FY22 H1 –
Slide 3: Trading Update & Outlook
Trading Update & Outlook Skroo Turner CEO 3 FY22 H1 – FCTG Presentation
Slide 4: FLT: 40 years of evolution
FLT: 40 years of evolution The Changing Face of the Flight Centre Travel Group 1982 1992 2002 2012 2017 2022 1st Leisure shop Leisure shop Leisure & corporate Leisure & corporate Leisure & corporate Leisure & corporate opens – Sydney network spanning businesses in businesses in businesses in busines
Slide 5: FLT: 40 years of evolution - Key building blocks
FLT: 40 years of evolution Key building blocks Replicable & successful global business model 01 Has helped deliver 24 years of year-on-year TTV growth during FY1Hs in 26 years since listing in 1995 02 Egalitarian culture of incentivisation & ownership of both business & business results by our leade
Slide 6: Positioned for post-pandemic recovery as the world reopens
FY22 Trading Update & Outlook: Positioned for post-pandemic recovery as the world reopens Strong Global Presence Leaner & More Efficient Not reliant on any one country or business sector as 01 04 Structurally lower cost base with better systems & world reopens. Large corporate presence in Northern t
Slide 7: Trading conditions improving globally
FY22 Trading Update & Outlook: Trading conditions improving globally Omicron cases “As the worst effects of the COVID-19 pandemic decreasing ebb, most indicators point to travel coming back—with a vengeance—as people look to reconnect, explore new destinations, or revisit Travel restrictions reliabl
Slide 8: Trading conditions improving as Omicron concerns abate
FY22 Trading Update & Outlook: Trading conditions improving as Omicron concerns abate in key markets Hospitalisations now decreasing in key US, UK, Cases falling significantly in South Africa after Canada & Australia markets initial spike in November-December Sample Pop up Box Simply dummy text of t
Slide 9: Trading conditions improving as restrictions are relaxed or removed
FY22 Trading Update & Outlook: Trading conditions improving materially as restrictions are relaxed or removed - ABC News - CNBC - 9 News - NZ Herald Sample Pop up Box Simply dummy text of the printing and typesetting industry. - USA Today Lorem Ipsum has been the industry's 9 FY22 H1 – FCTG Presenta
Slide 10: Fewer restrictions but some ongoing complexity
FY22 Trading Update & Outlook: Fewer restrictions but some ongoing complexity – underlining value of expert travel advisors & playing to FLT’s strengths Between November 1 & January 31, FLT’s Climate of Change internal Marco Polo COVID information team Significant updates now coming daily – 43 updat
Slide 11: Demand quickly rebounding globally after omicron impact
FY22 Trading Update & Outlook: Trading conditions improving – demand quickly rebounding globally after omicron impact in January February: Tangible Signs of Recovery • Momentum taking off globally – typically from late Corporate: • Strong growth across all regions globally January after circa 2-mont
Slide 12: February recovery global snapshot
FY22 Trading Update & Outlook: Trading conditions improving – February recovery global snapshot Americas EMEA ANZ Asia • Circa 55% increase in • Circa 90% uplift in corporate • NZ leisure TTV projected to • Heavy restrictions in place in corporate TTV MTD across TTV across the region MTD – double in
Slide 13: Profit expectations & market guidance
FY22 Trading Update & Outlook Profit expectations & market guidance Momentum Picking Up • Positive pre-omicron trends now being seen again globally after December-January downturn • Continued growth trajectory in key EMEA & Americas markets, which together delivered 50% of 1H TTV after more than tri
Slide 14: 1H Results
FY22 1H Results Adam Campbell CFO 14 FY22 H1 – FCTG Presentation
Slide 15: 1H: Operational highlights
FY22 1H: Operational highlights Continued recovery in an improved trading climate • Strong sales growth delivered during 1H despite Q1 delta & Q2 omicron waves & ongoing travel restrictions in key markets (particularly ANZ) • Improved operational performance, masked by $65m reduction in retained gov
Slide 16: 1H: Sales
FY22 1H: Sales $3.3b in TTV • 113% TTV growth on PCP GROSS TTV $M 2,500 • Solid sales uplift immediately after August- Other Leisure Corporate Group September delta waves – $859m COVID-period 2,000 record TTV (gross) in November 1,500 • Corporate business generated about 60% of Group 1H TTV & was at
Slide 17: 1H: Market share
FY22 1H: Market share Source: Selected industry data for all intermediaries in those markets Note i : Excludes refunds and cancellations with exception of US. Achieving strategic objectives Note ii: Includes retail and online leisure sales Growing to Win in Corporate Sector Positive Signs Emerging i
Slide 18: 1H: Operational overview – P&L
FY22 1H: Operational overview – P&L $270m underlying 1H loss (PCP: Underlying $242.9m loss) 1H FY21 • $184m underlying EBITDA loss (PCP: $156m) $m 1H FY22 Mvmt (Restated) Group TTV 3,263 1,533 1,730 • Sales revenue growth comfortably exceeded cost growth, but year-on-year operational improvement mas
Slide 19: 1H: Segment Results - Business Segments
FY22 1H: Segment Results Business Segments $m LEISURE CORPORATE OTHER FY22 1H Analysis HY22 HY21 HY22 HY21 HY22 HY21 • $2b+ in corporate TTV – almost 150% growth on PCP TTV 950 501 2,040 823 273 209 • Fed by client wins & high retention rates Revenue 112 54 192 89 11 16 • Almost $1b in 1H leisure TT
Slide 20: 1H: Segment Results - Geographical Segments
FY22 1H: Segment Results Geographical Segments $m ANZ AMERICAS EMEA ASIA OTHER HY22 HY21 HY22 HY21 HY22 HY21 HY22 HY21 HY22 HY21 TTV 1,166 749 956 307 719 222 404 239 18 16 Revenue 99 65 106 50 86 32 11 7 13 6 Underlying EBITDA (127) (57) (23) (44) (3) (27) (10) (8) (21) (19) Revenue Margin 8.50% 8.
Slide 21: 1H: Continued cost discipline
FY22 1H: Continued cost discipline Underlying cost base tracking at circa 40% of pre-COVID level 1H FY22 One 1H FY21 1H FY20 % of 1H Analysis 1H FY22 off & 1H FY22 Adj FY20 $m Expenses underlying Expense Underlying Expenses1 Mvmt % Underlying Expenses Underlying • Structurally & permanently lower co
Slide 22: Increasing number of businesses profitable or approaching breakeven
FY22: Operational overview – P&L Increasing number of businesses profitable or approaching breakeven South Africa, France, UAE & EMEA region overall, as well as Corporate Traveller in the US, Liberty & Ignite – encouraging sign from Liberty given 1H is traditionally a seasonally softer (loss-making
Slide 23: 1H: Balance sheet
FY22 1H: Balance sheet Balance Sheet $m Dec-21 Jun-21 Mvmt FY22 1H Analysis Cash & cash equivalents 1,211 1,291 (80) Financial assets 188 65 123 • $1.5b cash & investments (current & non-current) at Trade & other receivables 364 279 85 December 31 2021 ($133m restricted). Contract assets 65 50 15 Ot
Slide 24: 1H: Monthly cash outflows
FY22 1H: Monthly cash outflows FY22 1H Analysis • Cash outflows decreasing as expected, compared to prior periods • $20m outflow recorded in November (COVID- period record) with EMEA & the Americas at or near cash flow positive. • Outflow increased to $39m in December – impacted by omicron & seasona
Slide 25: 1H: Strong liquidity position
FY22 1H: Strong liquidity position Liquidity position a) Working capital assets (excl. cash and investments) As at 31 December 2021 $m As at 31 December 2021 $m Cash and investments 1,466 Retail and corporate debtors 364 Trade and other receivables 29 Working capital assets (excl. cash and investmen
Slide 26: 1H: Pedal Group
FY22 1H: Pedal Group Delivering further growth • Joint venture – FLT has 46.5% shareholding • 3 key business units: • 99 Bikes (retail network) • Advance Traders (wholesaler); & • Pedal Property (15 Shops & Head Office ownership) • Record sales of $200m+ & 1H PBT of $32m • 6 new stores in Australia
Slide 27: 1H: Corporate Social Responsibility
FY22 1H: Corporate Social Responsibility • Signatory to the United Nations Global Compact, which supports the UN’s sustainability development goals • FC Foundation (established 2008) relaunched in Australia during 1H – five $30,000 "Giving Grants" delivered • Global sustainability officer appointed
Slide 28: Strategic Update
FY22 Strategic Update Chris Galanty Corporate CEO 28 FY22 H1 – FCTG Presentation
Slide 29: Corporate travel outlook next 18 months
Corporate travel outlook next 18 months Evolution of customer needs Return to travel – Changing customer Competitive businesses at 60-75% of needs landscape pre-COVID in FY23 § Pent up demand for face-to-face § Less leakage – safety and § Large corporations have less choice meetings compliance drive
Slide 30: Customer Funded Model - Where we play
Where we play – A two-sided model Customer Value Proposition Supplier Value Proposition Flight Centre DNA | Service & Savings Growth, Market Share | Yield Enterprise Volume Top Flagship > $100M spend § GMN Specialists Customer Funded Model § Flexibility Supplier Funded Model § Agility § Alternative
Slide 31: Strategy on a Page
Strategy on a Page Winning Brands Two globally differentiated winning brands Corporate Traveller is the TMC that’s fanatical about SMEs and delivers FCM is The Alternative TMC for Multi-National Corporates. Care Uplifted through the power of our people and technology The flexibility of its offering
Slide 32: Grow to Win timeline
Grow to Win timeline FY2020 FY2021 FY2022 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Grow to New global Re-size platform launch FCTG Corporate win structure business Rebrand FCM platform Duty of care and Japan strategy China Melon launch Brand consolidation Corporate Traveller Approval Rebrand Hotel aggregation Invest
Slide 33: Projections: FCM customer mix & market recovery
Projections Waterfall with business and new wins EVOLUTION OF FCM CUSTOMER MIX & MARKET RECOVERY 120% SIGNED NOT YET AT 70% MARKET TRADING RECOVERY 100% NEW TRADING 16% CUSTOMERS PRE-COVID 80% CUSTOMERS % pre-covid TTV 23% 60% 100% Market recovery 40% 26% 61% DEC20 13% 20% 7% 74% DEC21 30% 93% 0% DE
Slide 34: Next 18 months - Future deliverables
Next 18 months Future deliverables Accelerate customer growth § Continue delivery of core strategy § Technology rollout 01 § Invest in innovation & meeting new customer needs Leverage new market dynamics § Own & control content capabilities 02 § New airline & hotel retailing opportunities Accelerate
Slide 35: Strategic Update - Leisure
FY22 Strategic Update Melanie Waters-Ryan Leisure CEO 35 FY22 H1 – FCTG Presentation
Slide 36: Leisure: Outlook next 18 months
Leisure: Outlook next 18 months. Changing customer Competitive Pent-up travel demand needs landscape § Enquiry & then bookings surge § Ongoing hibernation of some following border opening § Customers looking for expert support competitors announcements & less DIY, given increased complexity especial
Slide 37: Leisure: Well placed to capitalise
Leisure: Well placed to capitalise Successfully executing key strategies ahead of what could be an unprecedented rebound Strong & highly accessible Operating with a stronger Maintaining cost discipline – shop network retained stable of omni-channel 1 2 3 structurally & permanently during the pandemi
Slide 38: Leisure: Diversity
Leisure: Diversity Catering to broad customer mix Mass Market Premium Independent Emerging & Complementary The most distinctive The go-to multi-channel premium/ luxury boutique The leading network and Complementary yet independent mass travel retailer with travel brand in market with product proposi
Slide 39: Leisure: Core business platforms
Leisure: Core business platforms Brands & Customer Flight Centre is the go to multi channel retailer with irresistible Travel Associates and our premium travel advisers famous Two key brands and Customer Experience Targets deals and savvy personal service accessible to our travellers for providing 7
Slide 40: Leisure: Global transformation update
Leisure: Global transformation update Trading conditions improving materially as restrictions are relaxed or removed Successfully transitioning from a bricks & mortar to an omni-channel retail strategy with online, call centre & B2B capturing an increasing share of Flight Centre core leisure Gross T
Slide 41: Leisure: Flight Centre update – FC 4.0
Leisure: Flight Centre update – FC 4.0 A modernised brand & operating model positioned to win in a COVID recovery Brand – a 40-year-old Irresistible Deals Savvy Experts Omni channel brand in 2022. Flight Centre in its 40th birthday Flight Centre has made the Our experienced experts can help From mul
Slide 42: Leisure: B2B expansion
Leisure: B2B expansion Successfully growing an independent and affiliated network of agents and agencies (the largest in Australia, New Zealand and South Africa) offering the widest and best range of travel and technology products, delivering solid capabilities and financial returns to members in al
Slide 43: Leisure: B2B Staircase to Growth
Leisure: B2B Staircase to Growth Strong progress during the pandemic in building a category leading Independent Proposition Brand 01 Brand launch and market positioning Sales Marketing material, BDM expansion and acquisition pipelines 02 Data 03 People & Culture Key customer insights, Operational da
Slide 44: Leisure: Progress update – Premium
Leisure: Progress update – Premium Travel Associates and our premium travel advisers are famous for providing 7 Star service and unique products for frequent, discerning and luxury travellers. Largest network of Unique product for frequent Winning boutique model premium and luxury travel Brand & mar
Slide 45: Progress update: Complementary brands
Progress update: Complementary brands Complementary yet independent travel brands accelerating to be the category leaders Student Universe Ignite / My Brands • Deepen global footprint across growing • Profitable YTD to Nov 21, strong early international student markets through momentum in 2H22 scala
Slide 46: Strategic Update - Supply
FY22 Strategic Update - Supply Melanie Waters-Ryan CEO 46 FY22 H1 – FCTG Presentation
Slide 47: Supply: Maintaining close relationships
Supply: Maintaining close relationships Working to offset impact of proposed commission changes in Australia Leisure Revenue Margin (AUS) Offsetting commission History of offsetting Strong & mutually Margin maintenance reductions from some impacts of commission beneficial relationships strategies ca
Slide 48: TP Connects Investment: Proactively Tackling Disruption
TP Connects Investment: Proactively Tackling Disruption Adapting to Changing Air Distribution Models Airline Solutions Agency Solutions § Traditional air distribution model has been disrupted with growth § Development of middleware (API) § Aggregates content from GDSs, in direct buyer-seller connect
Slide 49: In-destination businesses
In-destination businesses Destination Management Companies (DMC) Hotels Touring Businesses Discova DMC operating across 14 Now operating a suite of five brands Back-Roads & Top Deck re- countries in Asia & the Americas – Cross, Cross Vibe, Away, Lumen & emerging after hibernation Cross Collection As
Slide 50: END OF PRESENTATION: Questions?
END OF PRESENTATION: Questions? 50 FY22 H1 – FCTG Presentation
Slide 51: Appendices
Appendices 51 FY22 H1 – FCTG Presentation
Slide 52: Appendix 1: Global TTV recovery – December
Appendix 1: Global TTV recovery – December 31 Gross TTV for December at 35% of pre-COVID global sales – Corporate 58% & Leisure 22% Canada Corporate 46% Europe Leisure 18% Corporate 69% UK Corporate 58% United States Leisure 19% Corporate 44% Leisure 42% China UAE Corporate 45% Corporate 54% Mexico
Slide 53: Appendix 2: 1H Profit & Loss
Appendix 2: 1H Profit & Loss $m 1H FY22 1H FY21 (Restated) Mvmt Group TTV 3,263 1,533 1,730 Operating revenue 316 159 157 Total revenue 316 159 157 Other income 33 218 (185) Share of JV/Associates 9 9 - Employee benefits (385) (459) 74 Amortisation and depreciation (63) (77) 14 Sales and marketing (
Slide 54: Appendix 3: 1H Cash flow statement
Appendix 3: 1H Cash flow statement $m 1H FY22 1H FY21 (Restated) Mvmt Operating activities Operating activities before interest and tax (249) (669) 420 Net interest and tax paid 24 7 17 Cash inflow from operating activities (225) (662) 437 Investing activities Acquisitions 1 - 1 Proceeds from sale o
Slide 55: Appendix 4: Five-year result summary
Appendix 4: Five-year result summary 1H FY21 $m 1H FY22 1H FY20 1H FY19 1H FY18 (restated) TTV $3,263m $1,533m $12,399m $11,155m $10,154m Revenue margin 9.7% 10.4% 12.5% 13.0% 13.4% PBT ($276)m ($313)m $38.8m $127.4m $139.4m PBT (Underlying) ($270)m ($243)m $102.7m $140.4m $139.4m NPAT ($194)m ($231
Slide 56: Appendix 5: Presentation glossary
Appendix 5: Presentation glossary ANZ = Australia & New Zealand LDV = Laurier Du Vallon (leisure brand) AM = account managers LCC = low-cost carrier AUD = Australian dollars M&A = mergers & acquisitions BAU = business as usual MTD = month-to-date BDM = business development managers NDC = new distrib
Flight Centre Travel Group — H1 FY2022 Earnings Presentation on 6ix