Edreams Odigeo · BME:EDR
Edreams Odigeo — Q1 FY2024 Earnings Presentation
34 slides from Edreams Odigeo's earnings presentation, Aug 31, 2023
Slide 1: Results Presentation 1Q FY24
Results Presentation 1Q FY24 31st August 2023 1
Slide 2: Disclaimer
Disclaimer This presentation is to be read as an introduction to the unaudited condensed consolidated interim financial statements of the Group and contains key information presented in a concise manner on the Group and its financial condition. The information contained in this presentation is extra
Slide 3: Results Highlights
1. Results Highlights 2. Prime model proven to be a success – Excellent 1Q FY24 results 3. Further improvements on disclosure to better understand the subscription model 4. eDO investment highlights 5. Appendix 3
Slide 4: Prime model continues to deliver uplifts in profit margins; Cash EBITDA more than doubled
The strength of our Prime model continues to deliver significant uplifts in 1. profit margins. Cash EBITDA(1) more than doubled in just 1 year In 1Q FY24 the strength of the Prime model continues to drive significant improvements in profitability • Cash EBITDA (1) stood at €29.4 million, more than d
Slide 5: Prime model proven to be a success: Excellent 1Q FY24 results
Prime model proven to be a success: 2. Excellent 1Q FY24 results 3. Further improvements on disclosure to better understand the subscription model 4. eDO investment highlights 5. Appendix 5
Slide 6: Subscription models have proven to be hugely successful in different industries
2. Subscription models have proven to be hugely successful in different industries over the years. eDO is no longer a transaction company like the other travel companies Companies like Costco or Netflix continue showing growth after We are no longer a transaction company like the other travel more t
Slide 7: Prime members on track with guidance to reach 7.25 million by FY25
Prime members(*): on track with our guidance to reach 7.25 million by FY25. 2. Despite industry moving to more normalised seasonality patterns eDO ahead of implied run rate needed to achieve target. Prime net adds(**) are influenced by seasonality intra-year Implied Prime Member(*) quarterly run rat
Slide 8: Increasing maturity of Prime members results in margin uplifts; on track for FY25 target
2. Increasing maturity of Prime members(*) results in margin uplifts, which puts as well on track to reach our target of over €180 million Cash EBITDA(*) in FY25 Prime delivers significant uplifts in profit margins as the Prime member(*) base matures CASH MARGINAL PROFIT MARGIN (*) CONTINUED TO CASH
Slide 9: Strong growth in Cash Revenue Margin and Marginal Profit uplift
Strong growth in Cash Revenue Margin(*) and significant Marginal Profit (*) 2. uplift as maturity of Prime Members (*) increases Cash Revenue Margin (*) (LTM) Cash Marginal Profit (*) (LTM) (€M) (€M) +23% +50% 629 183 313 108 509 50% 210 122 65 59% 41% 299 315 53% 75 58 1Q FY23 1Q FY24 1Q FY23 1Q FY
Slide 10: Strong growth in Cash EBITDA and substantial improvement in margins
Strong growth in Cash EBITDA(*) and substantial improvement in margins as 2. the maturity of Prime members(*) increases P&L with increase in Prime Deferred Revenue Highlights 1Q FY24 VAR. 1. Cash Revenue Margin (*) is 5% above 1Q FY23. Cash Marginal Profit (*) 1Q FY24 1Q and Cash EBITDA (*) grew 55%
Slide 11: Income Statement
2. Income Statement Highlights 1Q FY24 VAR. 1Q FY24 1Q 1. Revenue Margin (*) excluding adjusted revenue items (**) increased by 8% (IN EURO MILLION) FY24 VS FY23 FY23 to €157.5 million, mostly driven by an increase in Prime Revenue Margin (up REVENUE MARGIN (*) 65%), following the successful expansi
Slide 12: Cash Flow Statement
2. Cash Flow Statement 1Q 1Q (IN EURO MILLION) FY24 FY23 Highlights 1Q FY24 20.0 0.6 1. Net cash from operating activities decreased by €17.9 million, mainly ADJUSTED EBITDA (*) reflecting: ADJUSTED ITEMS (*) 5.0 (2.4) • Working capital outflow of €9.3 million compared to an inflow of NON CASH ITEMS
Slide 13: Further improvements on disclosure to better understand the subscription model
Further improvements on disclosure to better 3. understand the subscription model 4. eDO investment highlights 5. Appendix 13
Slide 14: Shift from transactional to subscription leads to change in reporting breakdown
3. Shift in the Group’s results from transactional to subscription lead for the group to change the reporting breakdown Evolution from Transaction to Subscription Business (Prime Share of Revenue Margin and Marginal Profit) Revenue Margin(*) Marginal Profit(*) 4% 2% 45% 41% 1Q FY20 1Q FY24 1Q FY20 1
Slide 15: Shift to subscription-oriented strategy leads to change in segment reporting
3. Shift in the Group's focus towards a subscription-oriented strategy lead for the group to change the segment reporting Revenue Margin(*) as a % of total (Before and after the change) NEW • Due to the shift in the Group's focus towards a subscription- oriented strategy, the Group considers Prime/N
Slide 16: Change in segment reporting makes new revenue breakdown more appropriate
3. Change in the segment reporting makes a new revenue breakdown based on revenue recognition more appropriate Revenue Margin(*) as a % of total (Before and after the change) NEW 4% 4% • Following the Group's change in its operating segments, management considered that the previous Revenue disaggreg
Slide 17: Change in estimate regarding recognition of subscription fees
3. Change in estimate regarding the recognition of subscription fees aligns with evolution of the Prime product and relevance of service for subscribers Material increase in Adjusted EBITDA(*), even using former revenue recognition method for Prime subscription fees (€M) • We did a change in the acc
Slide 18: Cash Revenue Margin growth driven by expansion of Prime Member base
Cash Revenue Margin(*) growth driven by the successful expansion of the 3. Prime Member (*) Base and offset by decrease of Non-Prime (*), positively impacted last year by a catch-up of Omicron Bookings Cash Revenue Margin(*) by segment Cash Revenue Margin (*) by timing of recognition (€M) (€M) +5% 1
Slide 19: Cash Marginal Profit continues to show rapid growth
Cash Marginal Profit (*) continues to show rapid growth with significant 3. improvements in profitability Cash Marginal Profit (*) Cash Marginal Profit Margin (*) (€M) +10pp +55% 31% 52 21% 34 35% 65% 34 27% 25% 18 52% 17% 18 16 1Q FY23 1Q FY24 1Q FY23 1Q FY24 Non-Prime Prime Non Prime Prime Prime w
Slide 20: eDO investment highlights
4. eDO investment highlights 5. Appendix 20
Slide 21: eDO is the subscription company in travel through technology and AI
4. eDO is the subscription company in travel through technology and AI GAGR FY18-FY23: eDO has the fastest paid members growth among subscription companies across all industries GAGR FY18-FY23: 220% 7.25M 4.3M 2.7M 0.6M 0.9M 0.2M Members (Millions) FY19 FY20 FY21 FY22 FY23 FY25E Source: Company Data
Slide 22: eDO captures new customers through the Prime programme
eDO captures new customers through the Prime programme 4. Ukraine War + Delta Omicron High Inflation Share of new Prime 4.7 customers within Members(*) 4.3 Prime Members(*) in million 3.9 3.6 67% 3.2 2.7 2.2 1.7 1.2 0.9 0.7 0.8 0.5 0.6 0.6 0.4 0.3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q F
Slide 23: Within travel, eDO is the Global Flight Leader, Ex China
4. Within travel, eDO is the Global Flight Leader, Ex China #2 PLAYER IN FLIGHTS GLOBALLY GLOBAL FLIGHT REVENUE CY 2022 (€M) 1,139 #1 482 #2 345 #3 Source: Company data, Cash Revenue Margin (*) for eDO. Financial Releases published by Trip.com and Expedia. (*) Definitions of Non-GAAP measures on pag
Slide 24: In pole position in an attractive market
4. In pole position in an attractive market SIZEABLE MARKET AND ONE OF THE ATTRACTIVE GROWTH PROSPECTS EDO IS POSITIONED IN THE RIGHT LARGEST E-COMMERCE VERTICAL AFTER THE PANDEMIC SEGMENTS (ONLINE AND LEISURE) European Travel Market Size European Leisure Travel Market Online (€Bn) penetration (% ov
Slide 25: eDO is unique in terms of profitability and growth
4. eDO is unique in terms of profitability and growth Revenues CAGR 2022-25E EBITDA (*) CAGR 2022-25E eDO 28% 58% Global OTAs (1) 21% 37% Global B2C Subscription (2) 11% 27% (*) Definitions of Non-GAAP measures on page 32-34 (1) Companies included: Booking Holding, Trip.com, Despegar, Expedia, lastm
Slide 26: A recognised leader in AI in Europe
4. eDreams ODIGEO, a recognised leader in AI in Europe: Always being a step ahead We have a proven track record of being a leader in AI in travel since 2014… 2014 2015 2016 2017 2019 2020-22 2023 Establishing one of Adopting an AI first Adopting AI driven At-scale deployment Early adopter of a Deplo
Slide 27: Well positioned, well financed, on track to meet FY25 targets
4. Well positioned, well financed, on track to meet self-set FY25 targets Prime Members (*) >7.25M eDO “ eDO large potential: superior returns for shareholders and customers while transforming and revolutionising the FY25 ” industry TARGETS Cash EBITDA (*) >€180M (*) See definition and reconciliatio
Slide 28: Strong fundamental growth potential from FY25 onwards
4. eDO has from FY25 onwards strong fundamental growth potential Increase household penetration on Increase household penetration on those countries in which we are present those countries in which we are present Three dimensions Three dimensions where we can where we can capitalise on: capitalise o
Slide 29: Appendix
5. Appendix 1. Results highlights 2. Prime model proven to be a success – Excellent 1Q FY24 results 3. Further improvements on disclosure to better understand the subscription model 4. eDO investment highlights 5. Appendix 29
Slide 30: Prime Revenue Margin increases in absolute numbers and as share of total
5. Prime Revenue Margin increases both in absolute numbers and as a share of the total Revenue Margin PRIME Revenue Margin (*) (excl. Adjusted Revenue Items) (**) 65% (In euros million) 1Q FY24 Var. FY24 vs FY23 1Q FY23 85.9 Prime 85.9 65% 52.1 52.1 Non Prime 71.6 (23)% 93.6 Total 157.5 8% 145.7 1Q
Slide 31: Gradual revenue increases as a result of subscription programme success
5. Gradual revenue increases as a result of the success of the subscription programme Gradual Revenue Margin (*) (excl. Adjusted Revenue Items) (**) 54% (In euros million) 1Q FY24 Var. FY24 vs FY23 1Q FY23 Gradual 72.8 72.8 54% 47.2 Transaction date 78.3 (15)% 92.4 47.2 Other 6.4 6% 6.1 Total 157.5
Slide 32: Glossary of Definitions
Glossary of Definitions Non-reconcilable to GAAP measures 1. Gross Bookings refers to the total amount paid by customers for travel products and services booked through or with the Group (including the part that is passed on to, or transacted by, the travel supplier), including taxes, service fees a
Slide 33: Glossary of Definitions
Glossary of Definitions 12. Cash Revenue Margin means "Revenue Margin" plus the variation of the Prime deferred revenue corresponding to the Prime fees that have been collected and that are pending to be accrued. The Prime fees pending to be accrued are non-refundable and will be booked as revenue b
Slide 34: Glossary of Definitions
Glossary of Definitions 24. Prime ARPU means the Cash Revenue Margin generated from Prime users on a last twelve months basis. It is calculated considering all the Cash Revenue Margin elements linked to the bookings done by Prime members (such as, but not limited to, the Prime fees collected, GDS in