Edreams Odigeo · BME:EDR
Edreams Odigeo — Non-Deal Roadshow (May 2017)
74 slides from Edreams Odigeo's roadshow presentation, May 16, 2017
Slide 1: Investors Presentation
Investors Presentation May 2017
Slide 2: Agenda
Agenda We provide true value to customers & suppliers The value we bring to customers The value we bring to suppliers Our market is attractive and we are well positioned versus competitors We are uniquely able to deliver We are building a successful business for long-term sustainable growth Q&A
Slide 3: eDreams ODIGEO appeals to over 17 million customers of all demographics and needs
eDreams ODIGEO appeals to over 17 million customers of all demographics and needs … large range of group sizes Our … travelling to all sorts of destinations customers … with a variety of purposes are diverse … and differing price sensitivities 3 out of 4 of our The majority does not customers travel
Slide 4: Customers book with us because we provide strong value and choice
Customers book with us because we provide strong value and choice, in the most convenient way We make it <100 seconds for users to book a direct flight easiest to book We give They can 8 vs 3 customers the customize every >1,000 direct flight best choice element of their new product features options
Slide 5: Customers can save on each booking by using eDreams ODIGEO
Save Customers can save on each booking by using eDreams ODIGEO money 10 major pan-European Average final price saving per booking, carriers and LCCs eDreams v airline % AOV 45% > 5,000 43% 41% common routes on 37% 36% 36% 36% or same date, same payment 26% €134 20% average saving including all fees
Slide 6: Broad inventory selection means that eDreams can be cheapest
Broad inventory selection means that eDreams can be cheapest: Save one example money Price of return flight, 1 pax, EUR 20-40% cheaper 161 149 142 Example trip: 123 120 Barcelona > 99 Brussels (return) 18th-21st November Airline A Airline B Airline C Airline D Airline E 6 SOURCE: Airline websites, a
Slide 7: For each route, we offer many more direct flight options per day
For each route, we offer many more direct flight options per day Best choice Average number flights per day per route1 Airline 14.3 10.4 9.7 7.6 7.1 7.0 6.5 8 direct flight 5.5 5.0 4.7 4.9 vs options per day 4.3 with airline 3.6 3 (on average) 2.3 1.6 1.5 Airline A Airline B Airline C Airline D Airl
Slide 8: For the same route, eDreams offers twice as many flight options
For the same route as before, eDreams offers twice as many flight Best options than the next nearest airline choice 9 06:00 08:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00 Example direct one-way trip: 3 Barcelona > Brussels 18th November 8
Slide 9: Customers can book their trip much more quickly by using eDreams
Customers can book their trip much more quickly by Convenience using eDreams Time to complete booking, minutes Direct Multi-leg Flight and hotel 13mins 9m 30s 4mins 5mins 3m 20s 2m 30s 1m 30s Airline Meta Meta Meta Additional 20-25s can be saved if card payment details are stored SOURCE: eDreams, me
Slide 10: You can book a return trip on eDreams 4x faster
You can book a return trip on eDreams 4x faster Convenience (vs meta and airlines) Risk of return leg being repriced or Metasearch and airlines made unavailable in the time taken to book first leg 2:00 PM 100% 2:00 PM 100% 2:00 PM 100% 2:00 PM 100% 2:00 PM 100% 2:00 PM 100% 2:00 PM 100% 2:00 PM 100%
Slide 11: Each step of a customer's journey allows them to customize their trip
Each step of a customer’s journey allows them to customize their Customization trip to suit their exact needs Inspire and Compare Order and Search Pre-travel Travel Post-travel plan and select confirm Personalized engagement Tailorable suite of products and Services to manage trip preferences method
Slide 12: Seamless booking experience with a greater range of products and services
The result that our customers see is a seamless booking experience with a greater range of products and services Inspire Compare Order and Search Pre-travel Travel Post-travel and plan and select confirm Free cancellation Location heatmaps Baggage information Destination guides Scan card >1,000 Holi
Slide 13: We have market-leading customer service
We have market-leading customer service Best service Award-winning 24/7 round the clock customer service customer service Customer service recognized 1 2 as better than competition 3 Trustpilot score ranking 4 5 6 Ebookers 7 Lastminute 8 AirFrance 9 Airline 1 06:00 - 20:001 easyJet 10 Expedia 11 Air
Slide 14: Agenda
Agenda We provide true value to customers & suppliers The value we bring to customers The value we bring to suppliers Our market is attractive and we are well positioned versus competitors We are uniquely able to deliver We are building a successful business for long-term sustainable growth Q&A
Slide 15: Demand from an OTA allows airlines to improve their yield management
The demand an OTA brings to an airline allows them to improve Airlines their yield management Airline Each incremental 1% of demand is worth an extra Airline has to sell more seats at cheaper prices with lower demand 0.8% revenue Extra demand allows an airline to close cheaper fare seat categories e
Slide 16: OTAs present a 50% cheaper means of indirect customer acquisition
OTAs present a 50% cheaper means of indirect customer Airlines acquisition for airlines Estimated acquisition cost per booking (indirect traffic), EUR External acquisition (via OTA)1 Internal acquisition2 Additional investment also required for technology and infrastructure to support these transact
Slide 17: We are helping airlines grow and are an important strategic partner
We are helping airlines grow and are an important strategic Airlines partner to them Airlines are benefiting from our growth 95% of our partner contracts have performance components Odigeo has been always a very Our strong global partnership with Our dedication to you important partner, our relation
Slide 18: Agenda
Agenda We provide true value to customers & suppliers Our market is attractive and we are well positioned versus competitors Market overview and our position within it Our relationship with metasearch players Scale advantage We are uniquely able to deliver We are building a successful business
Slide 19: Large and growing OTA market is poised for further expansion
Large and growing OTA market is poised for further expansion Market Travel is the biggest eCommerce …and OTAs are the fastest growing segment within segment… the European market Total European online travel market, EUR bn 156 Software 107 67 +12% 3x & Software apps 42 OTAs & apps Online travel Direc
Slide 20: The European market's high online travel growth makes it attractive for OTAs
The European market’s high online travel growth makes it Market particularly attractive for OTAs Improved macro environment creates an …as well as greater continuous shift from attractive environment for OTAs… offline to online travel Passenger traffic growth vs GDP growth Online travel penetration
Slide 21: Flight market dynamics in Europe make it especially suited to OTAs
Flight market dynamics in Europe make it especially suited to OTAs Market US Europe 120 Number of airlines1 60 Supply 75% Market share of top 4 airlines2 29% Airline brand recognition High Low Domestic 23% 20% Proportion of domestic vs. International Customer habits International travel1 77% 80% Fra
Slide 22: OTAs are the only players that serve all customers' needs
Full offer Partial offer No comparability OTAs are the only players that serve all customers’ needs Market Compare and Order and Inspire and plan Search Pre-travel Travel Post-travel select confirm At-scale OTA Challenger OTA Meta Airline 22
Slide 23: Agenda
Agenda We provide true value to customers & suppliers Our market is attractive and we are well positioned versus competitors Market overview and our position within it Our relationship with metasearch players Scale advantage We are uniquely able to deliver We are building a successful business
Slide 24: Metasearch engines depend on OTAs for content and income
Metasearch engines depend on OTAs for content and income… Metasearch Share of traffic directed to OTAs (France) Percent 90 80 Meta 2 Meta 3 70 60 50 Meta 1 40 Adjusted EBITDA margin, Percent Traffic demonstrates meta dependence on OTAs to provide customers content Partnerships with OTAs are more
Slide 25: Moving beyond their current model would require significant investment
… and moving beyond their current model would require Metasearch significant investment Retail distribution Post- Inventory booking Sourcing ownership Displaying con- customer Marketing Pricing support tent and offer Barriers to entry Relation- Technology and Technology Customer care ships and algor
Slide 26: The customer experience through a metasearch site is much less convenient
The customer experience through a metasearch site is also much Metasearch less convenient Metas lack the customer data to fully understand how to The customer booking experience is slower communicate with them and has fewer service options Metas’ lack of customer data means “the sector is Flights ca
Slide 27: Even Google has found it hard to build a model as a flight meta
Even Google has found it hard to build a model as a flight meta Metasearch Launch of Google Flights Sep 2011 Oct 2014 Mar 2015 “Google Flight Search, loved Our traffic from Google “While no longer in beta, by some and ignored by Flights is limited today Google Flights still isn’t others, hasn’t turn
Slide 28: Agenda
Agenda We provide true value to customers & suppliers Our market is attractive and we are well positioned versus competitors Market overview and our position within it Our relationship with metasearch players Scale advantage We are uniquely able to deliver We are building a successful business
Slide 29: The benefits of scale drive long-term, sustainable competitive advantage
The benefits of scale drive long-term, sustainable Scale competitive advantage advantage 1 Scale leadership 5 2 More customers More bookings and higher margins 4 3 Better products, More investments in customer experience technology, product and brand and marketing 29
Slide 30: Our scale enables us to continue growing market share
Scale Our scale enables us to continue growing market share advantage Scale OTA players are gaining market share, % Local OTA Global OTA 34 29 28 66 71 72 2014 2016 2018 Source: Phocuswright European Travel Overview Twelfth Edition 30
Slide 31: We have a significant scale advantage over our competitors
Scale We have a significant scale advantage over our competitors advantage European flight revenue Long-tail of other OTAs (not-exhaustive) Latest FY (€m) 367 <150 128 62 Source: OAG Analyser, based on number of seats for 2015; Industry Research 31
Slide 32: Leading player in the online leisure flight sector and category leader in Europe
Leading player in the online leisure flight sector and a category Scale leader in Europe advantage # Position in the market European OTA flight market share 2 2 2 27% 2 1 # 1 eDreams ODIGEO: 1 2 the leading flights retailer in Europe 1 1 1 SOURCE: Internal analysis, Amadeus bookings data, PhocusWrig
Slide 33: Our technology has significant scale and allows us to offer customers the best experience
Our technology has significant scale and allows us to offer Scale customers the best experience advantage 750 million monthly searches 120,000 peak searches per second 80 million supplier searches per day > 450 airlines 7 billion pricing calculations per hour 33
Slide 34: Scale gives us a competitive advantage throughout our development process
The value of this scale is that it gives us a competitive advantage Scale throughout our development process advantage Our large development scale Large allows us to produce a huge development range of new ideas for scale products and features Quickest delivery Best We are continuously testing ideat
Slide 35: Our in-house development scale allows us to develop many more ideas
Our in-house development scale allows us to develop many more Scale ideas than our competitors advantage Relative size of in-house development capability Number of developers ~ 50 Airline OTA (IT dept) OTA A Airline 1 ~ 40 ~ 60 (IT dept) OTA B Airline 2 ~ 80 ~ 30 OTA C ~ 40 Airline 3 ~ 140 400 (IT d
Slide 36: Ability to release multiple new products a week allows continuous testing
This ability to release multiple new products a week allows us to Scale continuously test our features with large numbers of customers advantage We rapidly test and trial product features in our UX Lab on a Kano surveys across geographies weekly basis UX Lab Qualitative survey Business case construc
Slide 37: We are best placed to serve the mobile travel customer
This scale means we are best placed to serve the mobile travel Scale customer advantage IT Mobile developer capability comparison, European OTAs FTE Dedicated mobile 400+ ~70 ~60 ~50 ~40 ~30 ~20 ~20 ~40 OTA A OTA B OTA C OTA D OTA E OTA F OTA G 37
Slide 38: Customers are responding to our investment in technology and mobile
Customer are responding to our investment in technology and Scale specifically mobile advantage Customers recognize our superior mobile offering … … and we are positioned to grow our lead Average global app ratings, current version Share of mobile flight bookings, Q3 2017 30% OTA 1 21% OTA 2 OTA 3 O
Slide 39: Our scale of inventory combined with technology delivers more to customer
Our scale of inventory – combined with technology – delivers more Scale to customer advantage London to Hong Kong example Delivering to customers ▪ Broader content ▪ Superior prices ▪ Customer service Direct flight Connected flight Customer Berlin London Frankfurt Hong Kong Paris Mumbai Geneva Barce
Slide 40: Agenda
Agenda We provide true value to customers & suppliers Our market is attractive and we are well positioned versus competitors We are uniquely able to deliver We are building a successful business for long-term sustainable growth Q&A
Slide 41: Performance driven by a successful transformation journey
OUR VISION Our performance over the past two years has been driven by a successful transformation journey focusing on the customer and developing scale Dana Dunne Appointed CEO Phase III (FY18-20) Leverage market leadership Phase 2 (FY16-17) with sustainable revenue Accelerate transformation model t
Slide 42: Our transformation put the foundations in place to deliver a strong customer experience
OUR VISION Our transformation put the foundations in place to deliver a strong customer experience, at scale From To • Highly dependent on Google • Large reduction in Google reliance Marketing • Insufficient focus on world-class efficiency • Dramatic improvement in non-paid search performance, platf
Slide 43: This has translated into good growth in topline and EBITDA
OUR VISION This has translated into good growth in topline and EBITDA Revenue margin and EBITDA growth (% YoY) 17% rise in bookings since December 2014 (LTM DEC 6% Revenue 5% 2016 vs LTM DEC 2014) margin 2% 19% reduction in variable 18% cost per booking from 6% December 2014 to December EBITDA 2016
Slide 44: The market is evolving as customer needs change
OUR VISION The market is evolving as customer needs change 36% see transparency as a key decision factor Clear and transparent pricing 53% abandon booking upon seeing final price Rest of market Access to a wide range 65% want to buy on a single online platform of products and services with ease 2.4x
Slide 45: We are one of the first to change in response to these needs
OUR VISION We are one of the first to change in response to these needs Our response Evolving our pricing Clear and and the communication transparent pricing of that pricing Rest of market Access to a wide range Offering an exciting of products and services range of innovative products and services
Slide 46: A number of specific releases and new product ventures
OUR VISION This will include a number of specific releases and new product ventures We believe we can sell a We are also branching out …and will continue to number of traditional flight- into more innovative flight- build our business related ancillaries at fair related features beyond flights price
Slide 47: We expect a short-term softening of topline performance
OUR VISION We expect a short-term softening of topline performance Now Future Traffic Conversion Repeat rate Attach rate Marketing spend per booking Decrease in traffic Increase in conversion Uplift in repeat rate as Increase in attach rate Reduction in marketing as some customers are as increasingl
Slide 48: This shift sets us up for continued market leadership and a higher quality business
OUR VISION We believe this shift sets us up for continued market leadership, and a much higher quality business Strategic shift Resulting competitive advantage More robust, higher-quality Less dependent on one product, with good growth and diversified revenue opportunity both across products and tap
Slide 49: Our financial strategy is in line with these choices
OUR VISION Our financial strategy is in line with these choices We will control the transformation pace to continue Long-term target of EUR 125-140m to grow absolute EBITDA EBITDA by 2020 We expect a period of softer top-line performance More robust revenue profile to reflect longer-term investm
Slide 50: Results monitored in a series of performance indicators
PERFORMANCE INDICATORS The results of this strategy are being monitored in a series of performance indicators Revenue diversification ratio Revenue diversification ratio; Percent 29% 25% Q3 ’16 Q3 ’17 50
Slide 51: Growing share of revenues from our diversification strategy
PERFORMANCE INDICATORS Growing share of revenues coming from our diversification strategy Revenue diversification ratio Revenue split; Percent Diversification revenues Classic Supplier revenues Classic customer revenues Advertising & Meta 7% 14% 29% 50% 51
Slide 52: Increasing ability to add value to a booking through higher attachments
PERFORMANCE INDICATORS Increasing ability to add value to a customers booking through higher attachments Product diversification ratio; Percent 44% Product diversification ratio 37% Q3 ’16 Q3 ’17 52
Slide 53: Decreasing acquisition cost versus index of Q4 FY15
PERFORMANCE INDICATORS Decreasing acquisition cost v. index of Q4 FY 15 before start of transformation Acquisition cost per booking Index 100 83 77 Acquisition cost per booking index Q4 ’15 Q3 ’16 Q3 ’17 Baseline 53
Slide 54: Stable repeat rates with positive YoY
PERFORMANCE INDICATORS Stable repeat rates with positive YoY Customer repeat booking rate; Percent, annualised view 39% 40% Repeat booking Q3 Q3 ’16 ’17 54
Slide 55: Strong growth in Mobile Bookings
PERFORMANCE INDICATORS Strong growth in Mobile Bookings Share of flight Mobile bookings; as a percentage of flight bookings Flight Mobile bookings As a % of flight bookings EU industry average 40% 35% 30% 30% 24% Gap vs Industry 25% +9pp Average 18% +7pp 20% 15% 10% +5pp 10% 21% 17% 5% 10% 13% 0% FY
Slide 56: Performance indicators summary
PERFORMANCE INDICATORS Revenue diversification ratio Product diversification ratio Acquisition cost per booking index Repeat booking Share of mobile bookings 56
Slide 57: All of these factors combined set us up for long-term success
OUR VISION All of these factors combined set us up for long-term success Lower-cost customer Low, transparent prices acquisition and access Great range and choice, Strategic Provision of a wide range Customers tailored to individual of non-flight products partners preferences A seamless experience b
Slide 58: Agenda
Agenda We provide true value to customers & suppliers Our market is attractive and we are well positioned versus competitors We are uniquely able to deliver We are building a successful business for long-term sustainable growth Q&A
Slide 59: In summary
In summary… Customer value Growing market Industry structure Scale Market leadership Investment Results 59
Slide 60: 9 Months Results Highlights
9 Months Results Highlights • Financial Analysis • Outlook FY 2016-17 60
Slide 61: Results Highlights
FY 2017 9M Results Presentation RESULTS HIGHLIGHTS Solid results with growth in bookings, revenue margin & adjusted EBITDA Strategic Initiatives paying off $ Strategic Initiatives have boosted our performance and they have also set us the path for longer term growth Continue to make investments on t
Slide 62: Solid Results
FY 2017 9M Results Presentation SOLID RESULTS Bookings Revenue Margin Adjusted EBITDA In thousands In € million In € million +9% +5% +18% 75.9 8,504 333.9 349.7 7,818 64.1 9M 9M 9M 9M 9M 9M DEC FY16 DEC FY17 DEC FY16 DEC FY17 DEC FY16 DEC FY17 | Source: Consolidated financial statements, audited 62
Slide 63: Strategy delivering good growth in Adjusted EBITDA
FY 2017 9M Results Presentation STRATEGY DELIVERING GOOD GROWTH IN ADJUSTED EBITDA Adjusted EBITDA evolution YoY variation 25% Change in +18% 9M 20% Management +12% +9% 15% 10% +6% 5% Bookings 0% -5% -10% % Growth normalised for no bonus +5% -15% payment FY 2015. 100% accrual Revenue Margin -20% in
Slide 64: Flight and Non-Flight Bookings
FY 2017 9M Results Presentation FLIGHT AND NON-FLIGHT BOOKINGS Solid Growth rates in Flight Business and Non flight Improving Flight - Bookings Flight In ‘000 +9% 7,124 7,762 ▪ Progress in strategic initiatives have boosted our performance and they have also set us the path for +9% longer term growt
Slide 65: Flight and Non-Flight Revenue Margin
FY 2017 9M Results Presentation FLIGHT AND NON-FLIGHT REVENUE MARGIN Revenue diversification strategy driving growth in non-flight products Flight – Revenue Margin Flight In € million 266.1 274.3 +3% ▪ Revenue margin performance driven by: – Bookings, already explained in previous slide. +3% – A red
Slide 66: Core and Expansion Bookings
FY 2017 9M Results Presentation CORE AND EXPANSION BOOKINGS Solid performance in our Core markets and Expansion Markets Core- Bookings Core In ‘000 4,389 +11% 3,954 ▪ Strategic initiatives on track and delivering results, bookings performance driven by: +13% – Our diversification strategy 1,206 1,36
Slide 67: Core and Expansion Revenue Margin
FY 2017 9M Results Presentation CORE AND EXPANSION REVENUE MARGIN Positive growth in all our Core markets Core – Revenue Margin Core In € million +8% ▪ Solid performance in the Core markets revenue margin 182.2 196.7 in the first nine months of of FY 2017, growth driven by: +10% – Bookings, already
Slide 68: Financial Analysis
Financial Analysis • 9 Months Results Highlights • Outlook FY 2016-17 68
Slide 69: Income Statement
FY 2017 9M Results Presentation INCOME STATEMENT 3M Dec 3M Dec 9M Dec 9M Dec Key highlights Var. Var. FY16 FY17 FY16 FY17 (In € million) Over the third quarter, main YoY evolutions reflect: Revenue margin 103.1 108.7 5% 333.9 349.7 5% ▪ Revenue margin increase by 5% Variable costs (65.4) (64.9) (1)%
Slide 70: Cash Flow Statement
FY 2017 9M Results Presentation CASH FLOW STATEMENT 3M Dec 3M Dec 9M Dec 9M Dec Key highlights (In € million) FY16 FY17 FY16 FY17 Over the third quarter, main YoY evolutions reflect: 19.7 21.7 64.1 75.9 ▪ Cash flow from operations increased by €29.6 million: Adjusted EBITDA Non recurring items (1.6)
Slide 71: Successful Debt Refinancing
FY 2017 9M Results Presentation SUCCESFUL DEBT REFINANCING Gross Leverage Ratio Refinancing highlights (Total Gross Financial Debt1 / LTM Adjusted EBITDA) ▪ Gross Leverage ratio down from 5.0x in December 2015 to 4.0x in December 2016. – Net leverage ratio down from 4.3x in December 2015 to 3.3x in
Slide 72: Outlook FY 2016-17
Outlook FY 2016-17 • 9 Months Results Highlights • Financial Analysis 72
Slide 73: Raising Outlook 2016-17
FY 2017 9M Results Presentation RAISING OUTLOOK 2016-17 Revised Targets for 2016-17 Outlook statement ▪ Our focus for the remainder of the year is to Initial Revised continue investing to reinforce our long term sustainability and in the best interest of the Guidance Guidance customer (June 2016) (F
Slide 74: eDreams ODIGEO
eDreams ODIGEO