Flight Centre Travel Group Limited · ASX:FLT
Flight Centre Travel — Macquarie Australia Conference 2016
29 slides from Flight Centre Travel's conference presentation, May 6, 2016
Slide 1: Macquarie Australia Conference
MACQUARIE AUSTRALIA For personal use only CONFERENCE May 6, 2016 Presentation by Adam Campbell, CFO
Slide 2: FLT: An Overview
For personal use only FLT: AN OVERVIEW Now employs almost 20,000 people in 14 countries Established in About 40 Australia in specialist early 1980s brands Our growth story
Slide 3: FLT: Keys to Success
For personal use only FLT: KEYS TO SUCCESS Circa 16% Durability: CAGR in PBT Long record of & TTV over achieving consistent growth Adaptability: Financial strength: 20 years Ability to adapt to Strong balance since listing changing market sheet with circa conditions & trends $400m in free cash Diver
Slide 4: Geographic Diversity
For personal use only GEOGRAPHIC DIVERSITY 47% of 1H TTV was generated outside of Australia Australia EMEA Americas Asia NZ
Slide 5: Brand Diversity
For personal use only BRAND DIVERSITY FY15 Turnover - Australia Other brands Flight Centre 51% Brand 49% Flight Centre Brand now generates about half of Australian turnover, compared to: • 64% in FY10; and • 69% in FY05
Slide 6: Diversity: Specialist Brands
For personal use only DIVERSITY: SPECIALIST BRANDS Age of Outbound Travellers FLT uses specialist leisure Under-19 brands to target the key age groups & 20-29 demographics. For 30-39 example, Student Flights provides specialist 40-49 services, products & 50-59 advice to the large 60-69 student/backp
Slide 7: Long-Term Growth Plan: Key Paths
For personal use only LONG-TERM GROWTH PLAN: 6 KEY PATHS Travel Bikes retailing Education Health Non-travel Travel Top Deck experiences Financial Back-Roads planning FLT Buffalo Tours Travel incubation Corporate travel 6 dedicated corporate brands StudentUniverse, Youth & generated 35% of student To
Slide 8: FLT Today: Strategic Journeys
For personal use only FLT TODAY: STRATEGIC JOURNEYS Product Journey Digital Journey Physical Journey People Journey Sales Journey Business Journey
Slide 9: Person Person Retailing
For personal use only PERSON 2 PERSON RETAILING In all countries, FLT generates most of its leisure sales via its shops – obvious growth opportunities exist in channels that sit on the fringes of the “P2P Index” Low touch/ Higher touch low cost offerings models
Slide 10: Person Person Index
For personal use only PERSON 2 PERSON INDEX CORE LEISURE VOLUME Online Travel Call Multi-Team Home Community Events Agents Centre Stores Based • High volume, low • 24/7 telephone • Hyperstores • Shopping centres • Travel Associates • Travel Expos, touch, low margin sales and assist in Australia Disc
Slide 11: FY16: Investing for Growth
For personal use only FY16: INVESTING FOR GROWTH In a challenging trading climate that has impacted short- term results, FLT has maintained its commitment to investing in its longer term growth strategies Softer than normal trading climate Increased spend on future growth drivers
Slide 12: FY16: Strategic Investments
For personal use only FY16: STRATEGIC INVESTMENTS Strategic acquisitions completed Enquiry generation Brand expansion (PACE area) Building for the Circa $110m future investment in cap- Developing unique FLT Systems & network ex during FY16, products upgrades leading to $9m increase in D&A New 'peopl
Slide 13: Strategic Investments: Acquisitions
For personal use only STRATEGIC INVESTMENTS: ACQUISITIONS Developing a broader geographic footprint & cementing FLT’s position as one of world’s largest corporate travel managers FCM Mexico Further corporate FCM Malaysia acquisitions likely to complement FLT’s organic growth in FCM Holland the secto
Slide 14: Strategic Investments: Acquisitions
For personal use only STRATEGIC INVESTMENTS: ACQUISITIONS Developing a stronger online presence in Australia & overseas through acquisitions & by enhancing existing sites StudentUniverse.com • Industry-leading online booking platform for SU & BYO are students growing strongly • Global expansion oppo
Slide 15: Strategic Investments: Brands
For personal use only STRATEGIC INVESTMENTS: BRANDS New brands developed • Aunt Betty – “virtual travel agent” – set for launch early in FY17 Existing brands exported • Travel Money, Campus Travel, Stage & Screen, cievents, FCBT • Ireland leisure travel business set for FY17 launch
Slide 16: Coming Soon: Aunt Betty
For personal use only COMING SOON: AUNT BETTY
Slide 17: Strategic Investments: Network
For personal use only STRATEGIC INVESTMENTS: NETWORK Shop • Microsoft Dynamics launched upgrades • Better capabilities • CRM tool to be deployed • Increased LCC fares & • In-store initiatives underway • Next generation design content online roll-out • “Book With Me” • Cost effective growth – larger
Slide 18: Book With Me: Personalised URLs
For personal use only BOOK WITH ME: PERSONALISED URLs Consultants’ personalised URLs can be sent to friends, family & customers – online bookings with a person-to-person touch
Slide 19: Strategic Investments: People
For personal use only STRATEGIC INVESTMENTS: PEOPLE New wage Workplace structures flexibility initiatives introduced to be launched
Slide 20: Strategic Investments: Products
For personal use only STRATEGIC INVESTMENTS: PRODUCTS Investing in unique products a key element in FLT’s “Product Journey” Recent additions include Journeys, Escapes, International Airfare Packages (IAPs) Travel Money set to launch Key To The World digital travel wallet Offering a broader range of
Slide 21: Unique Products: IAPs
For personal use only UNIQUE PRODUCTS: IAPs
Slide 22: Low Cost Carriers
For personal use only LOW COST CARRIERS Proactively working with NXGen area created in LCCs for Australia mutual benefit Sales growing Contracts now rapidly across in place with multiple several key channels players Broader fare & ancillary product range now available online
Slide 23: Strategic Investments: Enquiry
For personal use only STRATEGIC INVESTMENTS: ENQUIRY Additional Increased expertise in sales & Solid Shops as customer PACE areas marketing billboards enquiry globally spend
Slide 24: FY16 Guidance: A Quick Recap
For personal use only FY16 GUIDANCE: A QUICK RECAP Targeting 4-8% growth in underlying PBT (excluding ACCC refund, possible impairment) Targeted growth range not a formality given investments made to drive longer term returns & uncertain trading conditions heading into key May-June booking periods
Slide 25: FY16: The Story So Far
For personal use only FY16: THE STORY SO FAR Challenges Opportunities Low yields affectin g TTV growth All countries/reg profitable YTD ap ions art from Long-term Inves Singapore slowing profit grotments wth, as flagged at 1H All countries/reg tracking towards ions record TTV (in LC) at en May-June
Slide 26: Trading Conditions: Australia
For personal use only TRADING CONDITIONS: AUSTRALIA Soft consumer environment – flat corporate market (growth coming through market- share) & cautious leisure customers Election & budget uncertainty may affect demand during Q4 Virgin & Qantas responding to uncertainty by cutting domestic capacity Ou
Slide 27: Airfare Price Wars: London Calling
For personal use only AIRFARE PRICE WARS: LONDON CALLING $1675 “Headline” return fares to London (May 2006) from Sydney are the cheapest in recent memory and are currently: $1473 • 36% cheaper than 10 years ago • 27% cheaper than 3 years ago (May 2015) Similar to the price of a $1079 return fare to
Slide 28: Airfare Price Wars: NYC for Sub $1000
For personal use only AIRFARE PRICE WARS: NYC FOR SUB $1000 This week’s “headline” return fare from Sydney to New York was 32% cheaper than 10 years ago
Slide 29: Questions
For personal use only QUESTIONS
Flight Centre Travel Group — Macquarie Australia Conference 2016 on 6ix