Helloworld Travel Ltd · ASX:HLO
Helloworld Travel — H1 2018 Earnings Presentation
30 slides from Helloworld Travel's earnings presentation, February 2018
Slide 1: 1H18 Investor Presentation
CEO Andrew Burnes 1H18 CFO Michael Burnett
Slide 2: Disclaimer
Page 2 Disclaimer The information contained in these materials or discussed at the presentation is not intended to be an offer for subscription, invitation or recommendation with respect to shares or securities in any jurisdiction. No representation or warranty, express or implied, is made as to the
Slide 3: Agenda
Page 3 Agenda Overview Financial Performance Business Focus Appendix and Priorities 1H18 Investor Presentation | Helloworld Travel Limited
Slide 4: Overview
Page 4 Overview 1H18 Investor Presentation | Helloworld Travel Limited 4
Slide 5: 1H18 Results Overview
Page 5 1H18 Results Overview • TTV growth continues. Growth in ticketing volumes, partially offset by continued lower airfare prices. • Revenue decrease reflects impact of disposed operations and restructure of Insider Journeys TTV business. Excluding this impact, revenue decrease 2.7% on $2,967.9m
Slide 6: Financial Performance
Page 6 Financial Performance 1H18 Investor Presentation | Helloworld Travel Limited 6
Slide 7: 1H18 Half Year Results
Page 7 1H18 Half Year Results • TTV growth of 2.7% underpinned by strong volume growth, partially offset by lower ticket prices. 1H18 1H17 Change • Revenue reduced by 3.7% with lower gross $m $m % margin at 5.6% mainly due to impact of Total Transaction Value (TTV) 2,967.9 2,890.1 2.7% disposed oper
Slide 8: Group EBITDA – by nature
Page 8 Group EBITDA – by nature 40 Group EBITDA - 1H17 to 1H18 35.5 6.3 0.8 -0.7 30.1 Millions ($'m) 30 1.8 -1.6 3.5 -3.4 -1.3 20 1H17 EBITDA Change in Disposed Insider Journeys Disposed Insider Journeys Underlying cost Fanchise loyalty Equity accounted 1H18 EBITDA business/product operations refocu
Slide 9: Group EBITDA – by segment
Page 9 Group EBITDA – by segment Group EBITDA - 1H17 to 1H18 • Australia segment - TTV growth in competitive 40 environment. Cost reduction initiatives delivering strong profit growth. Segment continues to focus 0.7 35.5 4.9 on improving technology and automating -0.2 processes. Millions ($'m) 30.1
Slide 10: Australia Overview
Page 10 Australia Overview • TTV growth with ticketing volume up 9% from prior year, partially offset by a continued decline in international airfare prices. Strong growth from key cruise and corporate sectors. 1H18 1H17 Change • Revenue decrease reflecting business unit mix $m $m % change, full six
Slide 11: Australia EBITDA 1H18
Page 11 Australia EBITDA 1H18 Australia EBITDA - 1H17 to 1H18 40 0.8 34.0 4.6 -0.7 Millions ($'m) 30 29.1 0.3 2.6 -2.7 20 1H17 EBITDA Change in Disposed operations Disposed operations Underlying cost Fanchise loyalty Equity accounted 1H18 EBITDA business/product mix revenue movement cost movement mo
Slide 12: Australia Business Review
Page 12 Australia Business Review Retail franchise operations • Member numbers steady at 1,718 from 1,715 at 30 June 2017. • Rebranding to Helloworld Travel positive momentum continues with increasing brand awareness. • Strong and dedicated agent network with increasing customer satisfaction levels.
Slide 13: New Zealand Overview
Page 13 New Zealand Overview • TTV growth driven by increased sales from 1H18 1H17 Change larger retail member network, partially offset $m $m % by lower TTV from corporate business (APX) following prior year lost corporate accounts Total Transaction Value (TTV) 417.0 383.7 8.7% and key new account
Slide 14: New Zealand EBITDA 1H18
Page 14 New Zealand EBITDA 1H18 3 New Zealand EBITDA - 1H17 to 1H18 1.6 1.0 1.4 Millions ($'m) 1 0.9 -1.4 -0.7 -1 1H17 EBITDA Change in Disposed operations Disposed operations cost Underlying cost movement 1H18 EBITDA business/product mix revenue movement movement • Underlying revenue has decreased
Slide 15: New Zealand Business Review
Page 15 New Zealand Business Review Retail franchise operations • Retail members grew to 347 members from 300 at 30 June 2017. • Rebranded independent agent group, My Travel Group has grown by 33% since June 2017. • Winner of the 2017 TAANZ NTIA awards for - Best Brand Retail Multi location and Best
Slide 16: Rest of World (ROW) Overview
Page 16 Rest of World (ROW) Overview • TTV decrease of 12.7% reflecting refocus and 1H18 1H17 Change restructure of Insider Journeys brand, refocus on $m $m % profitable distribution channels and aggressive Total Transaction Value (TTV) 50.4 57.7 (12.7%) competitor pricing. Revenue 9.7 11.5 (15.3%)
Slide 17: Rest of World (ROW) EBITDA 1H18
Page 17 Rest of World (ROW) EBITDA 1H18 Rest of World EBITDA - 1H17 to 1H18 2 Millions ($'m) 0.1 0.1 0.1 0 0.5 -0.6 -2 1H17 EBITDA Insider Journeys Wholesale USA Inbound and transport 1H18 EBITDA business (TTF) - Fiji • Insider Journey’s business improvement from a shift back to its traditional whol
Slide 18: Rest of World (ROW) Review
Page 18 Rest of World (ROW) Review Insider Journeys • Challenges of aggressive pricing and heavy discounting by competitors in key markets. • Refocus of revenue distribution channel (more traditional wholesale) • Restructure and right size cost base. • Simplify and streamline procedures, including s
Slide 19: EBITDA to NPAT reconciliation
Page 19 EBITDA to NPAT reconciliation • Depreciation and amortisation expense 1H18 1H17 successfully lowered from prior year following focused capital investment on technology $m $m enhancements and the implementation of strong management controls and discipline. EBITDA 35.5 30.1 Depreciation/ amort
Slide 20: Liquidity and funding
Page 20 Liquidity and funding Dec-17 Jun-17 Dec-16 • Strong balance sheet, with general cash of $37.6m $m $m $m and external drawn debt of $20.5m. Company cash 37.6 34.7 34.0 • Total cash decrease since 30 June, reflects Client cash 122.4 163.4 132.5 seasonality of client cash held, partially offset
Slide 21: Cash conversion
Page 21 Cash conversion 1H18 1H17 Change • Free cash flow generated of $16.3m, $3.1m $m $m $m increase compared with prior year. The free cash flow supports the increase in the interim EBITDA 35.5 30.1 5.4 dividend and future business investment Non cash and working capital opportunities. (4.7) (6.1
Slide 22: Business Focus and Priorities
Page 22 Business Focus and Priorities 1H18 Investor Presentation | Helloworld Travel Limited
Slide 23: Growth in member networks and numbers
Page 23 Growth in member networks and numbers • Total members have grown to 2,065, an increase of 50 from the 2,015 members at 30 June 17. • The Australian network has growing brand recognition and a diversified value proposition. • The New Zealand network has grown by 16% to 347 members, providing
Slide 24: Continued Business Focus
Page 24 Continued Business Focus Business Agent Cost Brand Technology Improvement Focus Control Awareness • Structure and • Supporting • Improved • ResWorld • Brand evolution remuneration margins remuneration • helloworld.com. • Key model • Property • Consolidating au sponsorships advantages • Techn
Slide 25: Our travel portfolio
Page 25 Our travel portfolio 1H18 Investor Presentation | Helloworld Travel Limited
Slide 26: Conclusion
Page 26 Conclusion • We have delivered a strong performance for the half year, with growth in TTV, EBITDA and net profit after tax. In addition, EBITDA margin continues to grow across the business. • Growing revenue and improving revenue margins remain a key focus as the business faces continued pre
Slide 27: Appendix
Page 27 Appendix 1H18 Investor Presentation | Helloworld Travel Limited
Slide 28: TTV review – net vs gross position
Page 28 TTV review – net vs gross position Australia New Zealand ROW Consolidated $m 1H18 1H17 1H18 1H17 1H18 1H17 1H18 1H17 TTV - Net position 2,351.1 2,288.1 340.7 316.0 50.4 57.7 2,742.2 2,661.9 Recognition of retail sales through wholesale 126.9 138.3 76.3 67.7 203.2 206.0 Recognition of gross t
Slide 29: Thank-you
Page 29 Thank-you 1H18 Investor Presentation | Helloworld Travel Limited
Slide 30: helloworldlimited.com.au
helloworldlimited.com.au INVESTOR CONTACT: Michael Burnett Chief Financial Officer Helloworld Travel Limited michael.burnett@helloworld.com.au 03 9867 9600 MEDIA CONTACT: Trudi Sheppard Director of Communications Helloworld Travel Limited trudi.sheppard@helloworld.com.au 03 9867 9600 30