Edreams Odigeo · BME:EDR
Edreams Odigeo — 1H FY24 Earnings Presentation
47 slides from Edreams Odigeo's earnings presentation, Nov 15, 2023
Slide 1: Results Presentation 1H FY24
Results Presentation 1H FY24 15th November 2023
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: Agenda
1. Results Highlights 2. Prime model proven to be a success – Excellent 1H FY24 results 3. Strategic performance update: Two years post CMD 4. Closing Remarks 5. Appendix a) eDO investment highlights b) Breakdown by source and disaggregated Revenue Margin 3
Slide 4: Profit margins and profits up significantly due to Prime
Profit margins and profits up significantly due to Prime 1. In 1H FY24 the strength of the prime model drive significant profit improvements • Cash EBITDA (1) up 84% to €63.5 million compared to €34.5 million reported in 1H FY23. Cash EBITDA Margin(1) had 9pp improvement since 1Q FY23. This was driv
Slide 5: Prime model proven to be a success: Excellent 1H FY24 results
Prime model proven to be a success: 2. Excellent 1H FY24 results 3. Strategic performance update: Two years post CMD 4. Closing remarks 5. Appendix a) eDO investment highlights b) Breakdown by source and disaggregated Revenue Margin 5
Slide 6: eDO well ahead of implied run rate to reach 7.25 million target
2. eDO continues to be well ahead of the implied run rate to reach 7.25 million self-imposed target by FY25 Run rate needed for next 6 quarters, less than the one achieved in the past 4 quarters. Prime (*) net adds (**) are influenced by seasonality intra-year Quarterly Net Adds (**) Run Rate Run ra
Slide 7: Profit margins up significantly due to Prime
2. Profit margins up significantly due to Prime Prime delivers significant uplifts in profit margins as the Prime member (*) base matures CASH MARGINAL PROFIT MARGIN (*) CONTINUED TO IMPROVE CASH EBITDA MARGIN (*) MORE THAN DOUBLED SINCE AS MATURITY OF PRIME MEMBERS (*) INCREASES 1Q FY23 Prime Cash
Slide 8: Prime represents more than 50% of Cash Revenue Margin
2. Prime represents more of the overall business: more than 50% of the Cash Revenue Margin (*) and almost 2/3 of the Cash Marginal Profit (*) Cash Revenue Margin (*) (LTM) Cash Marginal Profit (*) (LTM) (€M) (€M) +19% +50% 659 199 128 356 553 234 133 54% 64% 42% 72 54% 319 303 71 60 2Q FY23 2Q FY24
Slide 9: 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 1H FY24 VAR. VAR. 1.Cash Revenue Margin (*) is 12% above 1H FY23. Cash Marginal Profit (*) 2Q FY24 2Q 1H FY24 1H and Cash E
Slide 10: Income Statement
2. Income Statement Highlights 1H FY24 VAR. VAR. 1. Revenue Margin (*) excluding adjusted revenue items (**) increased by 13% to 2Q FY24 2Q 1H FY24 1H €327.0 million, mostly driven by an increase in Prime Revenue Margin (up (IN EURO MILLION) FY24 VS FY23 FY23 FY24 VS FY23 FY23 67%), following the su
Slide 11: Cash Flow Statement
2. Cash Flow Statement Highlights 1H FY24 2Q 2Q 1H 1H 1. Net cash from operating activities increased by €40.5 million, mainly (IN EURO MILLION) FY24 FY23 FY24 FY23 reflecting: • Working capital inflow of €31.7 million compared to an inflow of €19.5 ADJUSTED EBITDA (*) 16.1 6.4 36.1 7.0 million in 1
Slide 12: Strategic performance update: two years post CMD
3. Strategic performance update: two years post CMD 4. Closing remarks 5. Appendix a) eDO investment highlights b) Breakdown by source and disaggregated Revenue Margin 12
Slide 13: A. Prime Members
3. Strategic performance update: two years post CMD A. Prime Members B. ARPU C. Cash EBITDA D. Long term fundamentals 13
Slide 14: A. Prime Members
A. Prime Members On track with our guidance to reach 7.25 million members by FY25 14
Slide 15: Confident we will achieve the 7.25M subscribers in FY25
A. Prime members (*): Confident we will achieve the 7.25M subscribers in FY25 as we have a large addressable market and very realistic assumptions OUR FIRST MARKET STILL ACCELERATING IN GROWTH VERY LARGE MARKET (TAM) Penetration of French • +72% of Prime (*) members are new households customers (**)
Slide 16: eDO has demonstrated the ability to capture new customers
Prime members (*): eDO has demonstrated the ability to capture new customers A. through the Prime program, despite COVID waves and recent geopolitical and macroeconomic context… Prime is the #1 travel subscription programme in the world Ukraine War + Delta Omicron High Inflation 5.1 Share of new Pri
Slide 17: B. ARPU
eDreams ODIGEO eDreams ODIGEO ARPU
Slide 18: Prime ARPU on track to meet FY25 Guidance
B. ARPU: Prime ARPU (*) on track to meet FY25 Guidance As expected, Prime ARPU (*) is converging with our guidance of €80 per user PRIME ARPU EVOLUTION (€) 80.4 76.8 78.8 75.1 75.5 2Q FY23 LTM 3Q FY23 LTM 4Q FY23 LTM 1Q FY24 LTM 2Q FY24 LTM Source: Company data. (*) Definitions of Non-GAAP measures
Slide 19: C. On track to reach €180 million Cash EBITDA by FY25
C. On track to reach €180 million Cash EBITDA by FY25 Profit margins and (Free) Cash Flow increase as Prime member base matures progressively 19
Slide 20: On track to reach €180 million Cash EBITDA by FY25
C. On track to reach €180 million Cash EBITDA (*) by FY25 as greater share of Year 2+ members translates to margin expansion over time Cash Marginal Profit (*) margin for Prime: how it increases as % of total Prime Year 2+ members increases 2Q FY23 LTM 2Q FY24 LTM Cash Marginal Yr 1 19% Yr 1 16% Pro
Slide 21: Free Cash Flow ex Non-Prime Working Capital doubled in past 6 months
As Cash EBITDA (*) continues to grow, our (Free) Cash Flow ex Non-Prime C. Working Capital (*) doubled in the past 6 months and will outperform Cash EBITDA growth again in the next 18 months Increase in margins due to a higher share of Year 2+ members will lead to a significant growth in Cash EBITDA
Slide 22: D. Long Term Fundamentals
D. Long Term Fundamentals Prime is highly value creating for eDO and its shareholders 22
Slide 23: Subscription models have proven successful in different industries
D. 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 24: Prime is a superior value proposition for customers
D. Prime is a superior value proposition for customers NET PROMOTER SCORE INDEXED USING AS A BASE SEPTEMBER 2021 (Capital Markets Day (CMD) DATA POINT) AND COMPARING IT WITH SEPTEMBER 2023 147 Nº 1 Customer Level 118 Satisfaction 100 100 CMD TODAY CMD TODAY 2Q FY22 2Q FY24 2Q FY22 2Q FY24 Prime new
Slide 25: eDO ahead in customer satisfaction
D. eDO ahead in customer satisfaction 1 4.1 2 4.0 Opodo & eDO vs. highest rated peer (October 2023) 3 4.0 4 2.6 5 2.2 6 2.2 4.1 4.0 4.0 7 1.9 2.6 1.9 8 1.7 9 1.6 Opodo eDreams Go voyages Top 1 OTA Top 1 Airline 10 1.4 11 1.4 Opodo & eDO vs. average peers (October 2023) 12 1.4 13 1.4 14 1.3 15 1.3 4.
Slide 26: Employee Engagement, 90% of eDOers recommend the company
D. Employee Engagement, 90% of eDOers recommend the company as a great place to work Spain’s best 1,524 eDOers company to work for 9 out of 10 2022 and 2023 eDOers recommend the 59 nationalities company as a eDO operates in a great place to working system aimed at work driving flexibility and employ
Slide 27: Prime provides a win-win proposition for customers and eDO
D. Prime provides a win-win proposition for customers and eDO Prime members visit us more often and have higher repeat bookings than Non-Prime customers PRIME vs. NON-PRIME INDEX x3.4 Repeat Bookings x2.7 (in 12 months) 1H FY24 Repeat bookings (in 12 months) 1H FY22 27 Source: Company data.
Slide 28: Prime achieved a significant value creation for eDO
D. Prime achieved a significant value creation for eDO Success of our Prime subscription model is demonstrated both by our high growth in the number of members and the value it creates, and a business with higher Lifetime Value (LTV) and lower Cost of Acquisition (CAC) over the long run PRIME LTV TO
Slide 29: The new eDO is a more stable and predictable business
D. The new eDO is a more stable and predictable business The share of Prime over total Cash EBITDA (*) increases every year and it is expected to represent more than 80% of total Cash EBITDA (*) in FY25 % Prime Cash EBITDA/ Total Cash EBITDA 84% 75% 70% 7% Pre COVID-19 FY23 1H FY24 LTM FY25E Source:
Slide 30: Closing Remarks
4. Closing Remarks 5. Appendix a) eDO investment highlights b) Breakdown by source and disaggregated Revenue Margin 30
Slide 31: Significant progress achieved since our Capital Markets Day
Significant progress achieved since our Capital Markets Day (57% of the time D. 4. since announcement), we are well on plan or slightly better to meet or exceed all our targets 57% of time 1 month 24 months 42 months Time CMD Sep. 23 Mar. 25 42 months 61% of target Prime Members (*) 1.7M 5.1M 7.25M
Slide 32: Appendix
5. Appendix 1. Results highlights 2. Prime model proven to be a success – Excellent 1H FY24 results 3. Strategic performance update: Two years post CMD 4. Closing Remarks 5. Appendix a) eDO investment highlights b) Breakdown by source and disaggregated Revenue Margin 32
Slide 33: Appendix: eDO investment highlights
a. Appendix: eDO investment highlights 5. Appendix a) eDO investment highlights b) Breakdown by source and disaggregated Revenue Margin 33
Slide 34: eDO is the subscription company in travel through technology and AI
a. eDO is the subscription company in travel through technology and AI GAGR FY18-FY23: eDO has one of 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: Compa
Slide 35: eDO captures new customers through the Prime programme
eDO captures new customers through the Prime programme a. Ukraine War + Delta Omicron High Inflation 5.1 Share of new Prime 4.7 customers (**) within Members(*) 4.3 Prime Members (*) in million 3.9 3.6 72% 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
Slide 36: Within travel, eDO is the Global Flight Leader, Ex China
a. 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 37: In pole position in an attractive market
a. 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 VERTICALS AFTER THE PANDEMIC SEGMENTS (ONLINE AND LEISURE) European Travel Market Size European Leisure Travel Market Online (€Bn) penetration (% o
Slide 38: eDO is unique in terms of profitability and growth
a. eDO is unique in terms of profitability and growth Revenues CAGR 2022-25E EBITDA (*) CAGR 2022-25E eDO 28% 58% Global OTAs (1) 27% 46% Global B2C Subscription (2) 11% 31% (*) Definitions of Non-GAAP measures on page 45-47. (1) Companies included: Booking Holding, Trip.com, Despegar, Expedia, last
Slide 39: A recognised leader in AI in Europe
a. 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 40: Well positioned, well financed, on track to meet FY25 targets
a. 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 reconciliati
Slide 41: Strong fundamental growth potential from FY25 onwards
a. 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 42: Appendix: Breakdown by source and disaggregated Revenue Margin
Appendix: Breakdown by source and b. disaggregated Revenue Margin 5. Appendix a) eDO investment highlights b) Breakdown by source and disaggregated Revenue Margin 42
Slide 43: Prime Revenue Margin increases in absolute numbers and as share
b. Prime Revenue Margin increases both in absolute numbers and as a share of the total Revenue Margin PRIME Revenue Margin (*) (excl. Adjusted Revenue Items) (**) 67% (In euros million) 1H FY24 Var. FY24 vs FY23 1H FY23 181.5 Prime 181.5 67% 108.7 108.7 Non-Prime 145.6 (19)% 180.3 Total 327.0 13% 28
Slide 44: Gradual revenue increases as a result of subscription success
b. Gradual revenue increases as a result of the success of the subscription programme Gradual 54% Revenue Margin (*) (excl. Adjusted Revenue Items) (**) 157.8 (In euros million) 1H FY24 Var. FY24 vs FY23 1H FY23 Gradual 157.8 54% 102.5 102.5 Transaction date 156.7 (10)% 174.0 Other 12.5 1% 12.5 Tota
Slide 45: 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 46: 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 47: 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