On The Beach Group Plc · LSE:OTB
On The Beach — FY2015 Earnings Presentation
20 slides from On The Beach's earnings presentation, Dec 9, 2015
Slide 1: FY15 Preliminary Results Presentation
FY15 Preliminary Results Presentation 9th December 2015
Slide 2: Agenda
Agenda Simon Cooper FY15 Highlights CEO Wendy Parry Financial Performance FY15 CFO Simon Cooper Evolution of Key Drivers CEO Summary and Outlook Q and A 2
Slide 3: FY15 Highlights
FY15 Highlights OTB is disrupting the retail of beach holidays through innovative technology and customer value proposition Overall short haul beach market continues to grow and online penetration is increasing Structural Market Growth & Market 14% YOY increase in daily unique visitors to site t
Slide 4: Business Model
Business Model ADDRESSABLE MARKET +14% STRUCTURAL MARKET Short haul beach OTB share of GROWTH & MARKET Online Unique visitors holidays dynamically market traffic SHARE GROWTH penetration packaged +4% +20% +16% OPTIMISE CUSTOMER £ Revenue per Conversion Revenue per PROPOSITION & booking unique visito
Slide 5: Disruptive retailer of beach package holidays
Disruptive retailer of beach package holidays On the Beach has the product advantages of a tour operator with the model advantages of an OTA OTB HIGH £MPB Basket Value /Margin Opportunity LOW £163 TOUR OPERATORS GENERALISED OTAS PRODUCT ADVANTAGES PRODUCT DISADVANTAGES £MPB 5 x higher than OTA £MPB
Slide 6: Profit & Loss Account – UK Segment
Profit & Loss Account – UK Segment FY15 EBITDA growth of 45% YOY P&L UK Segment YTD growth year on year: Year ending 30 Sep (£m) FY12A FY13A FY14A FY15A TTV +27% TTV 230.1 280.8 358.3 453.6 Revenue +37% - growth % 22.0% 27.6% 26.6% EBITDA +45% Revenue 30.9 37.5 45.6 62.5 Efficient increase
Slide 7: Profit and Loss Account - International
Profit and Loss Account - International Investment in Sweden to build scale and brand P&L International Segment Success in international markets will be Year ending 30 Sep (£m) FY12A FY13A FY14A FY15A profitable performance within 2-3 years of launch at scale TTV 0.9 0.1 1.6 5.6 Revenue 0.1 - 0.1
Slide 8: Profit and Loss Account - Group
Profit and Loss Account - Group Underlying profit before tax +46.5% increase YOY P&L Total Shareholder loan interest and amortisation Year ending 30 Sep (£m) FY12A FY13A FY14A FY15A of acquisition intangibles below underlying Profit after tax EBITDA UK segment 9.7 12.0 13.8 20.0 EBITDA Internation
Slide 9: Balance Sheet
Balance Sheet Balance Sheet All customer monies are paid into the trust FY12A FY13A FY14A FY15A account which is effectively a debtor to the Tangible Assets 0.3 0.6 0.7 0.5 business Intangible Assets - IT development 1.4 1.5 2.0 2.6 Intangible Assets - Acquired Intangibles - - 48.3 44.1 Deferred
Slide 10: Cash Flow
Cash Flow Cash conversion is strong at 99% and cash is reinvested in areas that drive growth Cash Flow On The Beach has strong cash conversion and supplier FY12A FY13A FY14A FY15A payments are working capital neutral apart from the Opening Cash Balance Total 11.0 27.1 33.3 31.0 low deposit scheme
Slide 11: Key Drivers of Growth
Key Drivers of Growth
Slide 12: Market Growth & Market Share Growth
Market Growth & Market Share Growth Our addressable market is growing and OTB continues to grow share of market Overall short haul beach holiday volumes are growing Short haul beach online versus offline (UK) 16000 Short haul beach offline Online penetration continues to increase +7% 14000 Short
Slide 13: Competitive Landscape
Competitive Landscape On the Beach sells high margin tour operator style product with a lightweight OTA style fixed cost base On the Beach is well placed to continue to take share of market UK Short Haul Beach Online - Estimated Share from: Smaller OTAs who lack scale, strength of brand and tech
Slide 14: Optimise Customer Proposition
Optimise Customer Proposition Our ambition is to drive a fully personalised cross-device experience for all users on all devices Revenue per Revenue per £ Revenue per Unique Visitor FY12 – FY15 Conversion booking unique visitor 1.20 1.00 0.80 Direct contracting Projects which optimise the customer
Slide 15: Leverage £ Revenue
Leverage £ Revenue We are well positioned to scale our supply function to achieve significant incremental net margin contribution The infrastructure is in place to allow us to scale our supply function Direct contracting - share of hotel sales Q1 14 to date with minimal incremental overhead 60.0%
Slide 16: Drive Efficient Share Growth
Drive Efficient Share Growth Superior customer proposition delivers increased margins and fuels market share growth For the past 3 years the business has invested c.50% of revenue in Growing share cost effectively marketing to drive share growth in a growing market Marketing 46.0% 49.9% 50.7% 48.6
Slide 17: Strengthen Brand
Strengthen Brand Developing an integrated and personalised customer engagement programme drives retention of almost 35% Improvements in repeat bookings are driven by Branded / free share of traffic FY12 – FY15 (m) Strengthening of brand presence across multiple touch points 40.5% 41.9% 50.6% 54.
Slide 18: Drive Operational Leverage
Drive Operational Leverage On the Beach sells high margin tour operator style product with a lightweight OTA style fixed cost base £ Fixed / Variable Cost Per Booking OTB fixed and variable cost per booking is well below tour operator 250 7X 8X competitors OTB OTB Tour operators fixed and variab
Slide 19: Expand Internationally
Expand Internationally Similar trends in Europe to the core UK market represent an attractive expansion opportunity for OTB Online penetration in Europe is low but growing at a faster rate 2014 Western European package holiday market (€bn) than the UK1 €bn TTV Online Penetration Rate 90% 20.00 16.
Slide 20: Summary & Outlook
Summary & Outlook We have enjoyed a strong start to the new FY and performance is in line with the Board’s expectations Structural Market In our core UK market, we continue to grow our share of a growing market with increasing Growth & Market efficiency Share Growth Optimise Customer We have mai