Helloworld Travel Ltd · ASX:HLO
Helloworld Travel — H1 2020 Earnings Presentation
34 slides from Helloworld Travel's earnings presentation, February 2020
Slide 1: 2020 Half Year Investor Presentation
2020 Half Year Investor Presentation Andrew Burnes CEO David Hall 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
AGENDA 1. OVERVIEW 2. FINANCIAL PERFORMANCE 1H20 3. STRATEGY & OUTLOOK 4. APPENDIX 33
Slide 4: Overview
OVERVIEW 44
Slide 5: Our Business
OUR BUSINESS • Retail and corporate agency networks • Corporate travel management • Travel wholesaling • Inbound tour operating • Online B2C • Air Ticket consolidation • Tour operating • Freight services Helloworld Travel Limited - Investor Presentation · 1H20 55
Slide 6: Organic growth in TTV, complimented by strategic acquisitions
Organic growth in TTV, complimented by strategic acquisitions CAGR of +8% since FY15 +12% +9% +21% +3% +2% (3)% Notes: • LTM Dec-19 refers to the most recent 12 month period ended 31 December 2019 • Percentage movements in the above chart refer to growth versus the prior comparative period Helloworl
Slide 7: 1H20 Key Metrics
• Record TTV and strong revenue growth 1H20 Key Metrics from continued business expansion, both from acquisition and organic. TTV NPAT • Underlying EBITDA and NPAT growth from: $3,560m $22.7m + 12.9% + 4.1% o retail network expansion on both sides of the Tasman; o continued investment in wholesale R
Slide 8: Unrivalled portfolio of leading travel agency networks
Unrivalled portfolio of leading travel agency networks 2,496 at 31 DECEMBER 2019 | 2,447 at 30 JUNE 2019 • Growing our network of high calibre leisure and corporate agency members across our six Australian and four New Zealand networks supported by strong commercial partner offerings, professional n
Slide 9: Helloworld Travel Limited - Investor Presentation · 1H20
Helloworld Travel Limited - Investor Presentation · 1H20 99
Slide 10: Business Highlights
Business Highlights CORPORATE BUSINESS GROWTH • Acquisition of the TravelEdge Group, expanding existing corporate operations. • Successful integration of prior year acquisitions Show Group and Williment Travel. • QBT appointed travel provider for News Corporation. • On track to achieve trans-Tasman
Slide 11: Business Highlights
Business Highlights 2019-20 TRAVEL INDUSTRY AWARD WINNERS Our businesses continue to be recognised for their achievements, winning seven major travel industry awards, in addition to the many awards received by our network members in Australia and New Zealand. Australia Magellan Travel – Best non-bra
Slide 12: Business Expansion
Business Expansion HLO has made a number of strategic business acquisitions to complement the Group’s existing operations and expand future product offerings to our agency, corporate and wholesale customers. On 1 October 2019, HLO completed the acquisition of TravelEdge – one of Australia’s largest
Slide 13: Financial Performance 1H20
FINANCIAL PERFORMANCE 1H20 1313
Slide 14: 1H20 Results
1H20 Results • Strong TTV and revenue growth 1H20 1H19 Change underpinned by retail network $m $m % expansion, new corporate clients and acquisitions. Total Transaction Value (TTV) 3,559.9 3,152.9 12.9% • Margin down 0.2 ppt caused by Revenue 200.0 182.2 9.8% stronger growth in lower margin retail G
Slide 15: Group Revenue and Underlying EBITDA
Group Revenue and Underlying EBITDA Group Revenue - 1H19 to 1H20 Group Underlying EBITDA - 1H19 to 1H20 210 55 200 50 1.8 -1.6 200.0 Millions ($'m) Millions ($'m) 11.8 48.0 190 45 6.0 6.0 180 40 41.8 182.2 170 35 1H19 Revenue Revenue movement Business acquisitions 1H20 Revenue 1H19 Revenue Business
Slide 16: Group Revenue and Underlying EBITDA – by segment
Group Revenue and Underlying EBITDA – by segment Group Revenue - 1H19 to 1H20 Group Underlying EBITDA - 1H19 to 1H20 210 50 0.0 4.0 -3.2 48 200 0.8 48.0 200.0 Millions ($'m) Millions ($'m) 46 17.0 5.4 190 44 180 182.2 42 41.8 170 40 1H19 Revenue Australia New Zealand Rest of World 1H20 Revenue 1H19
Slide 17: Australia Overview
Australia Overview • TTV growth from the Australian retail 1H20 1H19 Change network, from Flight Systems and from our corporate TMC division. $m $m % • Australian wholesale businesses grew Total Transaction Value (TTV) 3,020.1 2,724.8 10.8% TTV by 2% led by positive results from Revenue 162.5 145.4
Slide 18: Australia Revenue and Underlying EBITDA
Australia Revenue and Underlying EBITDA Australia Revenue - 1H19 to 1H20 Australia Underlying EBITDA - 1H19 to 1H20 170 45 0.5 160 162.5 1.0 42.3 40 13.2 Millions ($'m) Millions ($'m) 3.9 - 150 3.9 36.9 145.4 35 140 130 30 1H19 Revenue Revenue movement Business 1H20 Revenue 1H19 Underlying Revenue B
Slide 19: A diverse range of businesses and activities
A diverse range of businesses and activities SHOW FREIGHT TOURIST TRANSPORT FIJI across the retail, wholesale, transport and corporate sectors. FRONTLINERS CONFERENCE 2019 MAGELLAN CONFERENCE 2019 Helloworld Travel Limited - Investor Presentation · 1H20 1919
Slide 20: Show Group delivered the logistics for an amazing event
Show Group delivered the logistics for an amazing event with five weeks to design and deliver the result. Over $10m was raised towards bushfire relief. All service fees were waived by Show Group. Helloworld Travel Limited - Investor Presentation · 1H20 2020
Slide 21: 2,496 network members across Australia and New Zealand
2,496 network members across Australia and New Zealand offering amazing service as the trusted advisers to leisure and corporate clients. A world of wonder awaits! Helloworld Travel Limited - Investor Presentation · 1H20 2121
Slide 22: New Zealand Overview
New Zealand Overview • The New Zealand business increased TTV 1H20 1H19 Change by 33.1%, driven by an expanded retail $m $m % network in the second half of FY19. Total Transaction Value (TTV) 512.8 385.1 33.1% • Revenue growth (relative to growth in TTV) and gross margin impacted by Revenue 32.3 28.
Slide 23: New Zealand Revenue and Underlying EBITDA
New Zealand Revenue and Underlying EBITDA NZ Revenue - 1H19 to 1H20 NZ Underlying EBITDA - 1H19 to 1H20 33 10 32 32.3 8 0.5 -2.4 1.3 31 2.7 6 Millions ($'m) Millions ($'m) 30 6.0 2.7 5.2 29 4 28 28.3 2 27 26 0 1H19 Revenue Revenue movement Business 1H20 Revenue 1H19 Underlying Revenue Business Under
Slide 24: Rest of World (ROW) Overview
Rest of World (ROW) Overview 1H20 1H19 Change • Lower TTV and revenue reflects the $m $m % sale of the Insider Journeys business Total Transaction Value (TTV) 27.0 43.0 (37.2%) in June 2019 and a decline in wholesale USA trading. Revenue 5.2 8.5 (38.3%) • The decline in TTV and revenue fully Gross m
Slide 25: Underlying EBITDA to NPAT
Underlying EBITDA to NPAT • Increased depreciation and amortisation 1H20 1H19 Change due to: $m $m % ➢ the impact of commercial agreements Underlying EBITDA 48.0 41.8 14.8% and intangible assets acquired in the Business acquisition related expenses second half of the prior year; (1.2) - - (note 1) ➢
Slide 26: Capital spend and D&A
Capital spend and D&A • Increased investment in Depreciation and Amortisation technology including Capital Expenditure (excl right of use assets) ResWorld, Air Tickets Technology assets Technology assets booking system, QBT customer portal upgrade Commercial agreements Brand names & trademarks and o
Slide 27: Liquidity and funding
Liquidity and funding Liquidity Dec-19 Jun-19 Dec-18 • Total cash decrease since 30 $m $m $m June reflects seasonality of Total cash 142.0 204.8 130.1 restricted IATA cash held and Drawn debt (91.0) (57.0) (52.0) the timing of the business cycle. Net cash 51.0 147.8 78.1 The current half year is con
Slide 28: Cash conversion
1H20 $m 1H19 $m Change $m Cash conversion Underlying EBITDA 48.0 41.8 6.2 Growth in underlying free cash flow Net cash used in operating activities (45.4) (50.0) 4.6 Cash relating to the TravelEdge acquisition (4.0) 0.0 (4.0) driven by higher underlying EBITDA. Movement in restricted cash 69.8 65.3
Slide 29: Strategy and Outlook
STRATEGY AND OUTLOOK 2929
Slide 30: Conclusion – Outlook
Conclusion – Outlook • In the second half of FY20, Helloworld Travel expects our retail leisure, wholesale leisure and corporate businesses will be impacted by COVID-19, with minimal growth, if any, compared to 2H19. Based on current trends and as a result of the bushfire crisis over summer and COVI
Slide 31: Appendix
APPENDIX 3131
Slide 32: Company background information
Company background information A$4.93 A$614.9 M Share Price at 124.7M A$142.0 M Cash Market Cap at 31 December 2019 Shares Issued A$91.0 M Debt 31 December 2019 Board and Management Team Non-Executive Director and Chairman - Garry Hounsell Mr Hounsell was appointed to the Board as Chairman on 4 Octo
Slide 33: Thank You
THANK YOU 3333
Slide 34: Investor Contact
INVESTOR CONTACT: David Hall Chief Financial Officer david.hall@helloworld.com.au MEDIA CONTACT: Kirsty Johansen Director of Communications kirsty.johansen@helloworld.com.au 03 9867 9600 34 34