Flight Centre Travel Group Limited · ASX:FLT
Flight Centre Travel — H1 FY2022 Earnings Presentation
57 slides from Flight Centre Travel's earnings presentation, Feb 24, 2022
Slide 1: Statement to ASX: Replacement Presentation
STATEMENT TO AUSTRALIAN SECURITIES EXCHANGE – 24 February 2022 For personal use only Replacement Presentation FLIGHT CENTRE TRAVEL GROUP LIMITED (Company) Attached is a replacement first half results presentation. Please note that the table on slide 47 has been amended. No other amendments have been
Slide 2: FLT: FY22 First Half Result Presentation
For personal use only FLT: FY22 First Half Result Presentation February 24, 2022 1 FY22 H1 – FCTG Presentation
Slide 3: Agenda: Today's presentation
Agenda: Today’s presentation For personal use only Graham “Skroo” Turner Adam Campbell Chris Galanty Melanie Waters-Ryan Global MD & CEO Global CFO CEO - Corporate CEO – Leisure & Supply Trading Update & Outlook FY22 1H Results Strategic Update Strategic Update (Section 1) (Section 2) (Section 3) (S
Slide 4: Trading Update & Outlook
For personal use only Trading Update & Outlook Skroo Turner CEO 3 FY22 H1 – FCTG Presentation
Slide 5: FLT: years of evolution
FLT: 40 years of evolution The Changing Face of the Flight Centre Travel Group For personal use only 1982 1992 2002 2012 2017 2022 1st Leisure shop Leisure shop Leisure & corporate Leisure & corporate Leisure & corporate Leisure & corporate opens – Sydney network spanning businesses in businesses in
Slide 6: Key building blocks
FLT: 40 years of evolution Key building blocks For personal use only Replicable & successful global business model 01 Has helped deliver 24 years of year-on-year TTV growth during FY1Hs in 26 years since listing in 1995 02 Egalitarian culture of incentivisation & ownership of both business & busines
Slide 7: Positioned for post-pandemic recovery as the world reopens
FY22 Trading Update & Outlook: Positioned for post-pandemic recovery as the world reopens For personal use only Strong Global Presence Leaner & More Efficient Not reliant on any one country or business sector as 01 04 Structurally lower cost base with better systems & world reopens. Large corporate
Slide 8: Trading conditions improving globally
FY22 Trading Update & Outlook: Trading conditions improving globally For personal use only Omicron cases “As the worst effects of the COVID-19 pandemic decreasing ebb, most indicators point to travel coming back—with a vengeance—as people look to reconnect, explore new destinations, or revisit Trave
Slide 9: Trading conditions improving as Omicron concerns abate
FY22 Trading Update & Outlook: Trading conditions improving as Omicron concerns abate in key markets For personal use only Hospitalisations now decreasing in key US, UK, Cases falling significantly in South Africa after Canada & Australia markets initial spike in November-December Sample Pop up Box
Slide 10: Trading conditions improving as restrictions are relaxed or removed
FY22 Trading Update & Outlook: Trading conditions improving materially as restrictions are relaxed or removed For personal use only - ABC News - CNBC - 9 News - NZ Herald Sample Pop up Box Simply dummy text of the printing and typesetting industry. - USA Today Lorem Ipsum has been the industry's 9 F
Slide 11: Fewer restrictions but some ongoing complexity
FY22 Trading Update & Outlook: Fewer restrictions but some ongoing complexity – underlining value of expert travel advisors & playing to FLT’s strengths For personal use only Between November 1 & January 31, FLT’s Climate of Change internal Marco Polo COVID information team Significant updates now c
Slide 12: Demand quickly rebounding globally after omicron impact
FY22 Trading Update & Outlook: Trading conditions improving – demand quickly rebounding globally after omicron impact in January For personal use only February: Tangible Signs of Recovery Corporate: • Momentum taking off globally – typically from late • Strong growth across all regions globally Janu
Slide 13: February recovery global snapshot
FY22 Trading Update & Outlook: Trading conditions improving – February recovery global snapshot For personal use only Americas EMEA ANZ Asia •Circa 55% increase in •Circa 90% uplift in corporate •NZ leisure TTV projected to •Heavy restrictions in place in corporate TTV MTD across TTV across the regi
Slide 14: Profit expectations & market guidance
FY22 Trading Update & Outlook Profit expectations & market guidance For personal use only Momentum Picking Up • Positive pre-omicron trends now being seen again globally after December-January downturn • Continued growth trajectory in key EMEA & Americas markets, which together delivered 50% of 1H T
Slide 15: FY22 1H Results
For personal use only FY22 1H Results Adam Campbell CFO 14 FY22 H1 – FCTG Presentation
Slide 16: 1H: Operational highlights
FY22 1H: Operational highlights Continued recovery in an improved trading climate For personal use only • Strong sales growth delivered during 1H despite Q1 delta & Q2 omicron waves & ongoing travel restrictions in key markets (particularly ANZ) • Improved operational performance, masked by $65m red
Slide 17: 1H: Sales
FY22 1H: Sales $3.3b in TTV For personal use only • 113% TTV growth on PCP GROSS TTV $M 2,500 • Solid sales uplift immediately after August- Other Leisure Corporate Group September delta waves – $859m COVID-period 2,000 record TTV (gross) in November 1,500 • Corporate business generated about 60% of
Slide 18: 1H: Market share
FY22 1H: Market share Source: Selected industry data for all intermediaries in those markets Note i : Excludes refunds and cancellations with exception of US. Achieving strategic objectives Note ii: Includes retail and online leisure sales For personal use only Growing to Win in Corporate Sector Pos
Slide 19: 1H: Operational overview – P&L
FY22 1H: Operational overview – P&L $270m underlying 1H loss (PCP: Underlying $242.9m loss) For personal use only 1H FY21 • $184m underlying EBITDA loss (PCP: $156m) $m 1H FY22 Mvmt (Restated) Group TTV 3,263 1,533 1,730 • Sales revenue growth comfortably exceeded cost growth, but year-on-year opera
Slide 20: 1H: Segment Results – Business Segments
FY22 1H: Segment Results Business Segments For personal use only $m LEISURE CORPORATE OTHER FY22 1H Analysis HY22 HY21 HY22 HY21 HY22 HY21 • $2b+ in corporate TTV – almost 150% growth on PCP TTV 950 501 2,040 823 273 209 • Fed by client wins & high retention rates Revenue 112 54 192 89 11 16 • Almos
Slide 21: 1H: Segment Results – Geographical Segments
FY22 1H: Segment Results Geographical Segments For personal use only $m ANZ AMERICAS EMEA ASIA OTHER HY22 HY21 HY22 HY21 HY22 HY21 HY22 HY21 HY22 HY21 TTV 1,166 749 956 307 719 222 404 239 18 16 Revenue 99 65 106 50 86 32 11 7 13 6 Underlying EBITDA (127) (57) (23) (44) (3) (27) (10) (8) (21) (19) R
Slide 22: 1H: Continued cost discipline
FY22 1H: Continued cost discipline Underlying cost base tracking at circa 40% of pre-COVID level For personal use only 1H FY22 One 1H FY21 1H FY20 % of 1H Analysis 1H FY22 off & 1H FY22 Adj FY20 $m Expenses underlying Expense Underlying Expenses1 Mvmt % Underlying Expenses Underlying • Structurally
Slide 23: Increasing number of businesses profitable or approaching breakeven
FY22: Operational overview – P&L Increasing number of businesses profitable or approaching breakeven For personal use only South Africa, France, UAE & EMEA region overall, as well as Corporate Traveller in the US, Liberty & Ignite – encouraging sign from Liberty given 1H is traditionally a seasonall
Slide 24: 1H: Balance sheet
FY22 1H: Balance sheet Balance Sheet $m Dec-21 Jun-21 Mvmt FY22 1H Analysis For personal use only Cash & cash equivalents 1,211 1,291 (80) Financial assets 188 65 123 • $1.5b cash & investments (current & non-current) at Trade & other receivables 364 279 85 December 31 2021 ($133m restricted). Contr
Slide 25: 1H: Monthly cash outflows
FY22 1H: Monthly cash outflows For personal use only FY22 1H Analysis • Cash outflows decreasing as expected, compared to prior periods • $20m outflow recorded in November (COVID- period record) with EMEA & the Americas at or near cash flow positive. • Outflow increased to $39m in December – impacte
Slide 26: 1H: Strong liquidity position
FY22 1H: Strong liquidity position Liquidity position a) Working capital assets (excl. cash and investments) For personal use only As at 31 December 2021 $m As at 31 December 2021 $m Cash and investments 1,466 Retail and corporate debtors 364 Trade and other receivables 29 Working capital assets (ex
Slide 27: 1H: Pedal Group
FY22 1H: Pedal Group Delivering further growth For personal use only • Joint venture – FLT has 46.5% shareholding • 3 key business units: • 99 Bikes (retail network) • Advance Traders (wholesaler); & • Pedal Property (15 Shops & Head Office ownership) • Record sales of $200m+ & 1H PBT of $32m • 6 ne
Slide 28: 1H: Corporate Social Responsibility
FY22 1H: Corporate Social Responsibility For personal use only • Signatory to the United Nations Global Compact, which supports the UN’s sustainability development goals • FC Foundation (established 2008) relaunched in Australia during 1H – five $30,000 "Giving Grants" delivered • Global sustainabil
Slide 29: FY22 Strategic Update – Corporate
For personal use only FY22 Strategic Update Chris Galanty Corporate CEO 28 FY22 H1 – FCTG Presentation
Slide 30: Corporate travel outlook next months
Corporate travel outlook next 18 months Evolution of customer needs For personal use only Return to travel – Changing customer Competitive businesses at 60-75% of needs landscape pre-COVID in FY23 ▪ Pent up demand for face-to-face ▪ Less leakage – safety and ▪ Large corporations have less choice mee
Slide 31: Where we play – A two-sided model
Where we play – A two-sided model For personal use only Customer Value Proposition Supplier Value Proposition Flight Centre DNA | Service & Savings Growth, Market Share | Yield Enterprise Volume Top Flagship > $100M spend ▪ GMN Specialists Customer Funded Model ▪ Flexibility Supplier Funded Model ▪
Slide 32: Strategy on a Page
Strategy on a Page Winning Brands For personal use only Two globally differentiated winning brands Corporate Traveller is the TMC that’s fanatical about SMEs and delivers FCM is The Alternative TMC for Multi-National Corporates. Care Uplifted through the power of our people and technology The flexib
Slide 33: Grow to Win timeline
Grow to Win timeline FY2020 FY2021 FY2022 For personal use only Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Grow to New global Re-size platform launch FCTG Corporate structure win business FCM platform Japan strategy Rebrand China Melon launch Duty of care and Brand consolidation Corporate Traveller Approval Rebrand Ho
Slide 34: Evolution of FCM customer mix & market recovery
Projections Waterfall with business and new wins For personal use only EVOLUTION OF FCM CUSTOMER MIX & MARKET RECOVERY 120% AT 70% SIGNED NOT YET MARKET TRADING RECOVERY 100% NEW TRADING 16% CUSTOMERS PRE-COVID 80% CUSTOMERS % pre-covid TTV 23% 60% 100% Market recovery 40% 26% 61% DEC20 13% 20% 74%
Slide 35: Next months: Future deliverables
Next 18 months Future deliverables For personal use only Accelerate customer growth ▪ Continue delivery of core strategy ▪ Technology rollout 01 ▪ Invest in innovation & meeting new customer needs Leverage new market dynamics ▪ Own & control content capabilities 02 ▪ New airline & hotel retailing op
Slide 36: FY22 Strategic Update – Leisure
For personal use only FY22 Strategic Update Melanie Waters-Ryan Leisure CEO 35 FY22 H1 – FCTG Presentation
Slide 37: Leisure: Outlook next months
Leisure: Outlook next 18 months. For personal use only Changing customer Competitive Pent-up travel demand needs landscape ▪ Enquiry & then bookings surge ▪ Ongoing hibernation of some following border opening ▪ Customers looking for expert support competitors announcements & less DIY, given increas
Slide 38: Leisure: Well placed to capitalise
Leisure: Well placed to capitalise Successfully executing key strategies ahead of what could be an unprecedented rebound For personal use only Strong & highly accessible Operating with a stronger Maintaining cost discipline – shop network retained stable of omni-channel 1 2 3 structurally & permanen
Slide 39: Leisure: Diversity
Leisure: Diversity Catering to broad customer mix Mass Market Premium Independent Emerging & Complementary For personal use only The most distinctive Complementary yet The go-to multi-channel premium/ luxury boutique The leading network and independent travel brands mass travel retailer with travel
Slide 40: Leisure: Core business platforms
Leisure: Core business platforms Brands & Customer For personal use only Flight Centre is the go to multi channel retailer with irresistible Travel Associates and our premium travel advisers famous Two key brands and Customer Experience Targets deals and savvy personal service accessible to our trav
Slide 41: Leisure: Global transformation update
Leisure: Global transformation update Trading conditions improving materially as restrictions are relaxed or removed For personal use only Successfully transitioning from a bricks & mortar to an omni-channel retail strategy with online, call centre & B2B capturing an increasing share of Flight Centr
Slide 42: Leisure: Flight Centre update – FC 4.0
Leisure: Flight Centre update – FC 4.0 A modernised brand & operating model positioned to win in a COVID recovery For personal use only Brand – a 40-year-old Irresistible Deals Savvy Experts Omni channel brand in 2022. Flight Centre in its 40th birthday Flight Centre has made the Our experienced exp
Slide 43: Leisure: B2B expansion
Leisure: B2B expansion Successfully growing an independent and affiliated network of agents and agencies (the largest in Australia, New For personal use only Zealand and South Africa) offering the widest and best range of travel and technology products, delivering solid capabilities and financial re
Slide 44: Leisure: B2B Staircase to Growth
Leisure: B2B Staircase to Growth Strong progress during the pandemic in building a category leading Independent Proposition For personal use only Brand 01 Brand launch and market positioning Sales Marketing material, BDM expansion and acquisition pipelines 02 Data 03 People & Culture Key customer in
Slide 45: Leisure: Progress update – Premium
Leisure: Progress update – Premium Travel Associates and our premium travel advisers are famous for providing 7 Star For personal use only service and unique products for frequent, discerning and luxury travellers. Largest network of Unique product for Winning boutique model premium and luxury trave
Slide 46: Progress update: Complementary brands
Progress update: Complementary brands Complementary yet independent travel brands accelerating to be the category leaders For personal use only Student Universe Ignite / My Brands • Deepen global footprint across growing • Profitable YTD to Nov 21, strong early international student markets through
Slide 47: FY22 Strategic Update - Supply
For personal use only FY22 Strategic Update - Supply Melanie Waters-Ryan CEO 46 FY22 H1 – FCTG Presentation
Slide 48: Supply: Maintaining close relationships
Supply: Maintaining close relationships Working to offset impact of proposed commission changes in Australia Leisure Revenue Margin (AUS) For personal use only Offsetting commission History of offsetting Strong & mutually Margin maintenance reductions from some impacts of commission beneficial relat
Slide 49: TP Connects Investment: Proactively Tackling Disruption
TP Connects Investment: For personal use only Proactively Tackling Disruption Adapting to Changing Air Distribution Models Airline Solutions Agency Solutions ▪ Traditional air distribution model has been disrupted with growth ▪ Development of middleware (API) ▪ Aggregates content from GDSs, in direc
Slide 50: In-destination businesses
In-destination businesses For personal use only Destination Management Companies (DMC) Hotels Touring Businesses Discova DMC operating across 14 Now operating a suite of five brands Back-Roads & Top Deck re- countries in Asia & the Americas – Cross, Cross Vibe, Away, Lumen & emerging after hibernati
Slide 51: End of Presentation: Questions?
For personal use only END OF PRESENTATION: Questions? 50 FY22 H1 – FCTG Presentation
Slide 52: Appendices
For personal use only Appendices 51 FY22 H1 – FCTG Presentation
Slide 53: Appendix 1: Global TTV recovery – December
Appendix 1: Global TTV recovery – December 31 Gross TTV for December at 35% of pre-COVID global sales – Corporate 58% & Leisure 22% Canada For personal use only Corporate 46% Europe Leisure 18% Corporate 69% UK Corporate 58% United States Leisure 19% Corporate 44% Leisure 42% China UAE Corporate 45%
Slide 54: Appendix 2: 1H Profit & Loss
Appendix 2: 1H Profit & Loss $m 1H FY22 1H FY21 (Restated) Mvmt Group TTV 3,263 1,533 1,730 For personal use only Operating revenue 316 159 157 Total revenue 316 159 157 Other income 33 218 (185) Share of JV/Associates 9 9 - Employee benefits (385) (459) 74 Amortisation and depreciation (63) (77) 14
Slide 55: Appendix 3: 1H Cash flow statement
Appendix 3: 1H Cash flow statement $m 1H FY22 1H FY21 (Restated) Mvmt For personal use only Operating activities Operating activities before interest and tax (249) (669) 420 Net interest and tax paid 24 7 17 Cash inflow from operating activities (225) (662) 437 Investing activities Acquisitions 1 -
Slide 56: Appendix 4: Five-year result summary
Appendix 4: Five-year result summary 1H FY21 $m 1H FY22 1H FY20 1H FY19 1H FY18 For personal use only (restated) TTV $3,263m $1,533m $12,399m $11,155m $10,154m Revenue margin 9.7% 10.4% 12.5% 13.0% 13.4% PBT ($276)m ($313)m $38.8m $127.4m $139.4m PBT (Underlying) ($270)m ($243)m $102.7m $140.4m $1
Slide 57: Appendix 5: Presentation glossary
Appendix 5: Presentation glossary ANZ = Australia & New Zealand LDV = Laurier Du Vallon (leisure brand) For personal use only AM = account managers LCC = low-cost carrier AUD = Australian dollars M&A = mergers & acquisitions BAU = business as usual MTD = month-to-date BDM = business development mana
Flight Centre Travel Group — H1 FY2022 Earnings Presentation on 6ix