Edreams Odigeo · BME:EDR
Edreams Odigeo — FY2019 Earnings Presentation
38 slides from Edreams Odigeo's earnings presentation, Jun 25, 2019
Slide 1: FY 2019 Results presentation
FY 2019 Results presentation ey eh AANA LETT CS PINE "Revolutionize-the online travel booking sector moving = =—— 5 : from transaction-to- subscription model through our unique subscription program Prime, which offers the ability to engage with the customer throughout the full travel journey” > 25%
Slide 2: Disclaimer
Disclaimer ▶ This presentation is to be read as an introduction to the audited consolidated 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 presentations is extracted from the aud
Slide 3: Overview
Overview • Overview • Industry Outlook • Strategy Update • Results FY19 • Outlook • Appendix
Slide 4: Over the past year we have achieved a lot
OVERVIEW Over the past year we have achieved a lot Solid results, strong 4Q as guided Achieved our guidance to the market Bookings 11.2 million in FY19, Revenue Margin up 5% to €533.0 million, Adjusted EBITDA €119.6 million, growth of 37% in 4Q FY19, Cash Position €148.8 million, above top end of €1
Slide 5: eDO Achievements over Past 4 Years
OVERVIEW eDO Achievements over Past 4 Years Have set ourselves up for strong future growth Business Model Customer/Product Operational Financial Debt From transactional No.1 customer Complete transformation Adjusted EBITDA growth 37% reduction in relationship to long- satisfaction of compa
Slide 6: Industry Outlook
Industry Outlook • Overview • Industry Outlook • Strategy Update • Results FY19 • Outlook • Appendix
Slide 7: Travel is a highly attractive market in Europe & Globally
Travel is a highly attractive market in Europe & Globally Large and growing $1.4T Global Travel Market Source: Statista, Phocushwright, European Online Travel Overview 2018 & Phocal Point 7
Slide 8: Intermediaries dominate travel shopping
Intermediaries dominate travel shopping 80% of EU travelers shop for travel online (*) Type of online websites/apps typically used when comparing and choosing leisure travel products (**) OTA General Search Travel Review Websites Metasearch Travel Provider 0% 10% 20% 30% 40% 50% 60% (*) Question Whi
Slide 9: Strategy Update
Strategy Update • Overview • Industry Outlook • Strategy Update • Results FY19 • Outlook • Appendix
Slide 10: Our top strategic priorities in FY20 and onwards
OUR VISION Our top strategic priorities in FY20 and onwards Moving from transaction to subscription model and engaging with the customer throughout the full travel journey 1 2 3 4 INNOVATIVE TRAVEL UNIQUE END TO END JOURNEY LEADING MOBILE & AI DIVERSIFY & GROW SUBSCRIPTION MODEL MANAGEMENT 10
Slide 11: Successfully developed and tested subscription offering
INNOVATIVE TRAVEL SUBSCRIPTION MODEL Successfully developed and tested subscription offering 1 We have invested the past couple of years not just changing our price display but in fact testing and delivering a subscription based offering 11
Slide 12: Benefits of subscription
INNOVATIVE TRAVEL SUBSCRIPTION MODEL 21 Our innovative travel subscription model Unique across the industry Customer Company • Fly for the lowest prices • More stable revenue stream Benefits of subscription • Preferential customer • Priority customer service (24/7) relationship, access, involvement
Slide 13: Our subscription offering has had very favourable results
INNOVATIVE TRAVEL SUBSCRIPTION MODEL Our subscription offering has had very 21 favourable results Case Study: Italy 25% 2% 63% +25% +50% Share of Voluntary Renewal Net Promoter Share of App bookings churn rate Rate (*) Score (NPS) bookings (**) Prime in Italy Only 2% of 63% of NPS of Prime
Slide 14: Our subscription offering has lots of room for growth
INNOVATIVE TRAVEL SUBSCRIPTION MODEL 21 Our subscription offering has lots of room for growth Product · Continue to test and refine core proposition · Expand to other products and services Geography Continue to test and rollout product across geographies Customer segment Starting to test and develop
Slide 15: Enhancing relationship with customers throughout the full travel journey
UNIQUE END TO END JOURNEY MANAGEMENT 2 Enhancing relationship with customers throughout the full travel journey Our goal is to remove pain points and change the focus of the dialog away from the price 15
Slide 16: By building travel relationships with customers
UNIQUE END TO END JOURNEY MANAGEMENT 2 By building travel relationships with customers We can better engage with customers pre and post booking We take care of all the customer Increase and optimize touchpoints Reduce customer time searching stress points Notifications Going beyond flight Customers
Slide 17: eDO best positioned to fuel the mobile growth opportunity
LEADING MOBILE & ARTIFICIAL INTELLIGENCE eDO best positioned to fuel the mobile growth 3 2 opportunity Size of the mobile market expected to … and mobile bookings well ahead of continue growing at double digit rates industry average and expanding for the next 4 years Total European Mobile travel mar
Slide 18: Leveraging AI to drive superior customer experience
LEADING MOBILE & ARTIFICIAL INTELLIGENCE 3 2 Leveraging AI to drive superior customer experience: Example of personalized search results on mobile Deep learning models powering our sort order & driving personalization of search results page Increased convenience for customers to find their perfect t
Slide 19: A lot of untapped revenue diversification potential
DIVERSIFY & GROW 4 A lot of untapped revenue diversification potential Global Flight ancillaries market … strategic priorities to accelerate our growth and capitalize on market opportunity $93Bn Market Size Drive more Gross sales in 2018 Traffic & Bookings Improve the eDO around 2% market share Cust
Slide 20: We have successfully diversified our revenues in a very short period of time
DIVERSIFY & GROW We have successfully diversified our revenues in 4 a very short period of time FY 2015 FY 2019 CAGR Additional products sold per 100 flight 25 72 +30% bookings (*) Revenue margin €118Mn €237Mn +19% Share of company revenue from revenue diversification 27% 44% 5pp (*) Product Diversi
Slide 21: Results FY19
Results FY19 • Overview • Industry Outlook • Strategy Update • Results FY19 • Outlook • Appendix
Slide 22: Overview
RESULTS FY19 - OVERVIEW Overview Solid results, strong Q4 as guided Financials Booking performance in line with updated guidance Revenue up 5% to €533.0 million in FY19, outperforming initial revenue guidance of €509 million Adjusted EBITDA growth of 1% to €119.6 million in FY19, outperforming
Slide 23: Revenue diversification on track and the largest contributor to Revenues
RESULTS FY19 - KPIS Revenue diversification on track and the largest contributor to Revenues Revenue diversification ratio Revenue evolution (**) +17pp 44% FY19 35% FY18 27% 5% 5% 15% 14% 35% FY15 FY18 FY19 44% Product diversification ratio +47pp 37% 72% 45% 56% 25% Diversification Classic Supplier
Slide 24: Continued strategic progress as evidenced by our KPIs
RESULTS FY19 - KPIS Continued strategic progress as evidenced by our KPIs Mobile bookings as share of flight bookings Acquisition cost per booking index +21pp 39% 34% 100 -19 percentage points 18% 80 81 FY15 FY18 FY19 Customer repeat booking rate (Annualised)** +4p 59% 51% 55% FY15 FY18 FY19 FY15 FY
Slide 25: Income Statement Highlights FY19
RESULTS FY19 – P&L Income Statement Highlights FY19 ▪ Revenue Margin increased by 5%, principally due to an 4Q FY19 4Q FY18 Var. FY19 FY18 Var. increase in Revenue Margin per booking of 10%. (In € million) 151.4 140.2 8% 533.0 508.6 5% ▪ Variable costs grew 8%, as a result of higher acquisition Reve
Slide 26: Cash Flow Statement Highlights FY19
RESULTS FY19 – CASH FLOW Cash Flow Statement Highlights FY19 4Q FY19 4Q FY18 FY19 FY18 ▪ Net cash from operating activities decreased by €32.7 (In € million) million, mainly reflecting: Adjusted EBITDA (*) 40.4 29.6 119.6 118.3 – In 4Q, the better inflow in working capital is due to Non recurring it
Slide 27: Debt
RESULTS FY9 - DEBT Debt Gross Leverage Ratio (*) (Total Gross Financial Debt / LTM Adjusted EBITDA ) ▪ Successful refinancing in September led to a reduction of our debt coupon by 300 basis points, a €12.7 million saving in annual 7 interest, and a significant improvement in future Free Cash Flow 6
Slide 28: Outlook
Outlook • Overview • Industry Outlook • Strategy Update • Results FY19 • Outlook • Appendix
Slide 29: eDO to revolutionize the Online Travel Booking sector
IN SUMMARY eDO to revolutionize the Online Travel Booking sector Moving from transaction to subscription model and engaging with the customer throughout the full travel journey FROM TO OUR GOAL Subscription model - Engaging with Leverage our leading market position Flight centric the customer throug
Slide 30: Full year Outlook FY 2020
OUTLOOK Full year Outlook Outlook FY 2020 Outlook Statement Bookings We expect FY20 to be a much better year than FY19, but it will still 4% to 7% vs FY19 not reflect all our underlying potential as we have major markets with less than 12 months with the new revenue model. Revenue Margin In 1Q, refl
Slide 31: Why eDreams ODIGEO?
Why 2 eDreams ODIGEO? 2 1 1 2 1 1 1 Winner in Europe 30% European OTA 30% Significant revenue diversification flight market share World leading capabilities SOURCE: Internal analysis; Amadeus bookings data; Phocuswright European Travel Overview 2018
Slide 32: Appendix
Appendix • Overview • Industry Outlook • Strategy Update • Results FY19 • Outlook • Appendix
Slide 33: Revenue diversification drives growth in the Rest of the World markets
RESULTS FY9 – BY GEOGRAPHIE Revenue diversification drives growth in the Rest of the World markets, 21% CAGR over the past 4 years 33 (*) Definitions of Non-GAAP measures on page 37-39
Slide 34: Diversification Revenue is already 20% larger than our Classic Customer Revenue
RESULTS FY9 – BY PRODUCT Diversification Revenue is already 20% larger than our Classic Customer Revenue 34 (*) Definitions of Non-GAAP measures on page 37-39
Slide 35: eDreams ODIGEO
eDreams ODIGEO
Slide 36: Glossary of Definitions
Glossary of Definitions Non-reconcilable to GAAP measures ▶ Acquisition Cost per Booking Index refers to the most relevant marketing expenses incurred to acquire new customers (encompassing Paid search, Metasearch and Affiliates), divided by the total number of Bookings. For any given period, the ra
Slide 37: Glossary of Definitions
Glossary of Definitions Other Defined Terms ▶ Advertising and Metasearch Revenue represents revenue from other ancillary sources, such as advertising on our websites and revenue from our metasearch activities. Our management believes that the presentation of the Advertising and Metasearch Revenue me
Slide 38: Glossary of Definitions
Glossary of Definitions Other defined terms ▶ Product Diversification Ratio (%) is a ratio expressed on a percentage basis and calculated by dividing the number of flight ancillary products and non-flight products linked to a Booking (such as insurance, additional check-in luggage, reserved seats, c