Flight Centre Travel Group Limited · ASX:FLT
Flight Centre Travel — H1 FY2014 Earnings Presentation
34 slides from Flight Centre Travel's earnings presentation, Feb 26, 2014
Slide 1: FY14 Half Year Result Presentation
For personal use only FY14 Half Year Result Presentation February 26, 2014 1
Slide 2: Presentation outline
Presentation outline For personal use only • Introduction d Haydn d Long ((investor relations) l ) • Result overview Andrew Flannery (CFO) • Strategic priorities Melanie Waters Waters‐Ryan Ryan (COO) • Outlook Graham Turner (CEO) • Questions • Appendices 2
Slide 3: Introduction
Introduction For personal use only • Good start – PBT tracking slightly above targeted full year range after 1H • Record results achieved and enhanced shareholder returns delivered • Established businesses performing wellwell, along with new businesses and brands • Ongoing investment in sales networ
Slide 4: Result overview: 1H highlights
Result overview: 1H highlights g g For personal use only Highlights TTV $7 5b $7.5b 13 5% 13.5% Revenue $1.1b 15.1% PBT ((actual)) $155.0m $ 19.7% PBT (underlying) $146.3m 13.0% NPAT (actual) $110.8m 20.7% NPAT (underlying) $104.7m 14.1% Key Drivers • Expansion: 8.2% shop growth during past year – 1
Slide 5: Result overview: 1H 2014 summary
Result overview: 1H 2014 summaryy For personal use only RESULTS IN BRIEF DECEMBER 2013 DECEMBER 2012 Variance % TTV $7.5b $6.6b 13.5% Revenue $1,054m $915m 15.1% Income margin 14.1% 13.9% 20bps Net margin (underlying) 2.0% 2.0% ‐ Profit Before Tax (actual) $155.0m $129.5m 19.7% Abnormal items* $8.7m
Slide 6: Result overview: The Aussie dollar
Result overview: The Aussie dollar For personal use only • Weaker W k AUD hash nott adversely d l affected ff t d Australian A t li outbound tb d travel t l or FLT’s FLT’ Australian business, which generated record 1H results • ABS data shows Australian outbound travel growth actually accelerated du
Slide 7: Result overview: Cash & dividends
Result overview: Cash & dividends For personal use only • $1b global l b l cash h andd investment i t t portfolio tf li att Dec D 31,31 2013 – 1H record d • Includes $401.9m in general funds (company cash), up from $319.5m at Dec 31, 2012 • Modest debt maintained ($44.6m) – $357.3m positive net debt
Slide 8: Result overview: Geographic snapshot
Result overview: Geographic g p snapshot p For personal use only SINGAPORE GREATER CHINA TTV: $49m, up 33% in TTV: $92m, up 26% in CANADA AUD (up 20% in lc) AUD (up ( 11% in lc)) EBIT: $1.0m TTV: $506m, up 15% EBIT: $0.9m UNITED KINGDOM BUSINESSES: 16 in AUD (up 7% in lc) BUSINESSES: 29 EBIT: ($0.8m
Slide 9: Result overview: Australia
Result overview: Australia For personal use only • Record eco d 1H results esu s Australia Turnover by Division • Flagship Flight Centre brand growing 2009 20% 4% and p performingg strongly gy 15% 61% • Niche leisure and corporate brands also performing well – now generating about 50% of Australia’s
Slide 10: Result overview: UK
Result overview: UK For personal use only • Strong EBIT growth – up 33% in AUD (up 19% in GBP) • EBIT has increased from $6.9m in Dec 09 to $16.3m in Dec 13 – 24% CAGR • Ongoing network expansion – 250th shop opened early in 2H • N hyperstores New h t in i Victoria Vi t i (1H) and d Bristol B i t l
Slide 11: Result overview: USA
Result overview: USA For personal use only • Losses during seasonally slower trading period – early 2H results also impacted by severe weather • Modest sales growth in leisure and wholesale – bottom‐line growth needed • Corporate growth trajectory continuing – generated 47% of 1H turnover • Miami an
Slide 12: Result overview: Rest of the world
Result overview: Rest of the world For personal use only SOUTH AFRICA • Good year‐on‐year growth in profit and sales • Transactional Flight Centre website launched NEW ZEALAND • EBIT up more than 80% in AUD – best 1H result since Dec 07 • Flight Centre brand performing strongly CANADA • Overall O ll
Slide 13: Strategic priorities: FLT's transition
Strategic g p priorities: FLT’s transition For personal use only FLT is transitioning from a travel agent to a world class retailer of travel products to leisure and corporate customers Being a world class retailer means we are the brand/business people identify with and go to It is very different t
Slide 14: Killer theme: Travel agent to retailer
Killer theme: Travel agent g to retailer For personal use only • FLT’s killer theme is aligned to company’s longer term strategic “foci” and built around seven mini‐themes: 1. Brand d and d specialisation l – brands b d with h clear l CVPs that h mean something and are relevant to customers 2. Uniqu
Slide 15: Unique product: Red Label Fares
Unique q product: p Red Label Fares For personal use only 15
Slide 16: Unique product: Red Label holidays
Unique q p product: Red Label holidays y For personal use only 16
Slide 17: Unique product: Pack & Relax holidays
Unique q product: p Pack & Relax holidays y For personal use only 17
Slide 18: Unique product: Watertight deals
Unique q product: p Watertight g deals For personal use only 18
Slide 19: Unique product: Other exclusives
Unique q product: p Other exclusives For personal use only 19
Slide 20: Mobile consultants: Queen St hyperstore
Mobile consultants: Queen St hyperstore yp For personal use only 20
Slide 21: Digital features: Queen St hyperstore
Digital g features: Queen St hyperstore yp For personal use only 21
Slide 22: Outlook: 2013/14 guidance
Outlook: 2013/14 / guidance g For personal use only • Promising 1H results l but b too early l to amend d full f ll year targets • Continuing to target underlying PBT between $370m and $385m • Targeted range represents 8 8‐12% 12% growth on record 2012/13 PBT • Guidance assumes stable trading condit
Slide 23: Outlook: Growth plans
Outlook: Growth plans p For personal use only • Aiming for f 8‐10% networkk growth h globally l b ll during d 2013/14 / • Expansion opportunities for all businesses • Growth will primarily be organic • Complemented by Escape Travel franchise growth – model reintroduced in Australia during 1H – and p
Slide 24: Outlook: Acquisitions possible
Outlook: Acquisitions q possible p For personal use only • Seeking “capital light” vertical i integration i opportunities, ii following FLT’s success with Back‐Roads Touring (UK) and other acquisitions • Destination management companies – businesses that support FLT customers “at destination” • Hote
Slide 25: Recent developments: Corporate growth
Recent developments: p Corporate p growth g For personal use only • Corporate travell brands b accounted for f one third of 1H TTV globally • Does not include small corporate p accounts that transact via FLT’s leisure brands – Flight Centre Business Travel is growing rapidly • Continued investment i
Slide 26: Recent developments: FCm expansion
Recent developments: p FCm expansion p For personal use only 26
Slide 27: Recent developments: A growth cycle
Recent developments: p A growth g cycle y For personal use only • Pedal Group cycle JV performing well – 1H sales up 21% to $23.5m, EBIT more than doubled to $1.5m $1 5m • Bicycle Centre licensing structure working well for wholesaler Advance Traders • New 99 Bikes retail shops p in 25m PEDAL GROUP
Slide 28: Recent developments: 2015 RWC
Recent developments: p 2015 RWC For personal use only • Flight Centre named an official travel agent to the 2015 Rugby World Cup • Escape Travel and Travel Associates appointed sub‐ agents • Packages on sale from Januaryy 2014 • Allocation includes final, semi finals and quarter‐ finals, plus all Au
Slide 29: End of presentation: Questions?
For personal use only End of presentation: Questions? 29
Slide 30: Appendix 1: Five-year growth trajectory
Appendix pp 1: Five‐year y growth g trajectory j y For personal use only DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER 2013 2012 2011 2010 2009 TTV $7,480m $6,593m $6,181m $5,668m $5,056m Income margin 14.1% 13.9% 13.9% 14.0% 14.3% EBITDA $179.3m $148.9m $137.5m $121.3 m $100.5m PBT $ $155.0m $ $129.
Slide 31: Appendix 2: Shareholder returns
Appendix pp 2: Shareholder returns For personal use only 120c 60c EPS DPS 100c 110c 50c 55c 92c 46c 80c 40c 82c 41c 71c 36c 60 60c 30 30c 26c 51c 40c 20c 20c 10c 0c 0c Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 $60 Share Price $50 • Record EPS of $1.10, up 20% $40 $30 • Re
Slide 32: Appendix 3: AUD down but outbound up
Appendix pp 3: AUD down but outbound up p For personal use only AUD/USD vs Outbound Departure Growth 9% 1.10 Short‐term resident departures (growth on prior year) xxxxxx AUD/USD Source: Australian Bureau of Statistics 8% 1.05 7% 6% 1.00 5% 0.95 4% 3% 0.90 2% 0.85 1% 0% 0.80 32
Slide 33: Appendix 4: Blended milestones – online
Appendix pp 4: Blended milestones – online For personal use only KEY STATUS ELEMENTS MILESTONES PHASE 1 Pre and post booking processes blended Customers able to enquire, pay and view itineraries online More products and services available online – Flight PHASE 2 Centre sites transactional
Slide 34: Appendix 5: Flight numbers taking off
Appendix pp 5: Flight g numbers takingg off For personal use only • Flight numbers into and 180,000 International scheduled flights to/from Australia out of Australia have 160,000 Source: Bureau of Transport and Regional Economics i increasedd circa i 80% 140,000 during the past decade 120,000 • A k
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