Flight Centre Travel Group Limited · ASX:FLT

Flight Centre Travel — Flight Centre — H1 FY2013 Earnings Presentation

36 slides from Flight Centre Travel's earnings presentation, Feb 26, 2013

1. Slide 1: 2013 Half Year Results Teleconference

   For personal use only Flight Centre Limited 2013 Half Year Results Teleconference 26 February, 2013 1

2. Slide 2: Presentation outline

   Presentation outline For personal use only  Introduction Haydn Long  Highlights Andrew Flannery  Segmented results Graham Turner  Strategic priorities Melanie Waters-Ryan  Outlook Graham Turner 2

3. Slide 3: Introduction

   Introduction For personal use only  Solid start – new global sales and profit records established  Global growth – continued business expansion  Financial strength – debt lowered and cash grew during first half  Shareholder returns – record 1H EPS (91.7c), dividend and share price growth  Key s

4. Slide 4: Highlights

   Highlights For personal use only  TTV and gross profit both up 7% to $6.6b and $915.4m  $129.5m profit before tax, up 8%  $91.8m net profit after tax, up 13%  Income margin steady at 13.9%, net margin up slightly to 2%  Fully franked 46c per share interim dividend declared – up 12% 4

5. Slide 5: Highlights

   Highlights For personal use only  $828.5m global cash and investment portfolio at December 31, includes $319.5m in general funds  Debt of $46.6m after $USD60m loan repaid – $273m positive net debt position  Operating cash outflow higher than 1H12 but in line with expectations – seasonal 1H outflo

6. Slide 6: Highlights

   Highlights For personal use only  Poised to open 2500th shop and business  Corporate and leisure sales increased – highlights FLT’s diversity  Record first half EBIT in Australia, UK, Singapore and Greater China  flightcentre.com.au TTV up 23% and on track to deliver $5m EBIT in FY13  Share pri

7. Slide 7: Performance summary

   Performance summary For personal use only RESULTS IN BRIEF DECEMBER 2012 DECEMBER 2011 Variance % $’ million TTV $6,593m $6,181m 6.7% Gross Profit $915.4m $857.5m 6.8% Income margin 13.9% 13.9% - Net margin 2.0% 1.9% 1.0% EBITDA $148.9m $137.5m 8.3% EBIT $124.8m $112.7m 10.8% Profit Before Tax $129.

8. Slide 8: Performance summary

   Performance summary For personal use only DECEMBER DECEMBER DECEMBER DECEMBER DECEMBER 2012 2011 2010 2009 2008 TTV $6,593m $6,181m $5,668m $5,056m $5,788m Income margin 13.9% 13.9% 14.0% 14.3% 13.3% EBITDA $148.9m $137.5m $121.3 m $100.5m $53.2m PBT $129.5m $119.7m $101.1m $73.6m $34.2m NPAT $91.8m

9. Slide 9: Segment results – Australia

   Segment results – Australia For personal use only  TTV up 9% in “flat”market  Growth rate exceeds network growth rate  Corporate brands turned over more than $1b for 1st time in a first half  Solid EBIT growth achieved  Cheap fares stimulating leisure demand (FLT research shows average internat

10. Slide 10: Segment results – UK

    Segment results – UK For personal use only  Main profit driver outside Australia and third largest sales generator (behind Australia and USA)  TTV flat with lower corporate sales during 1H offsetting leisure sales growth  Strong EBIT result (up 17% to $12.3m) in challenging economy and despite im

11. Slide 11: Segment results – USA

    Segment results – USA For personal use only  1H TTV in line with PCP  Losses higher than last year because of timing issue  Tracking close to PCP after seven months  Results affected by Hurricane Sandy – temporary shop closures, sluggish demand in hardest hit areas in aftermath  New York City T

12. Slide 12: Segment results – rest of world

    Segment results – rest of world For personal use only  EBIT more than doubled in NZ – driven largely by corporate growth  Singapore EBIT doubled – small leisure business now profitable  Strong EBIT growth in Greater China  South Africa, Dubai and Canada profitable but down on PCP  Strong corpor

13. Slide 13: Segment results – by country

    Segment results – by country For personal use only SINGAPORE TTV: $37m, up 35% in CANADA AUD (up 34% in lc) EBIT: $0.7m GREATER CHINA TTV: $441m, up 15% UNITED KINGDOM BUSINESSES: 11 TTV: $73m, up 31% in in AUD (up 15% in lc) EBIT: $0.1m TTV: $558m, down 1% AUD (up 31% in lc) BUSINESSES: 227 in AUD

14. Slide 14: Strategic priorities

    Strategic priorities For personal use only 1. Retail efficiency 2. The “Area” 3. Corporate travel growth 4. Unique product 5. Enquiry management 6. The customer 7. Emerging businesses 14

15. Slide 15: Strategy 1: Retail efficiency

    Strategy 1: Retail efficiency For personal use only Aim To improve retail efficiency and shop operations (Travel Shopping of the Future Program) and ensure we identify and take away “pain points” for our customers and our consultants Major initiatives  Travel Shopping of the Future  Blended Travel

16. Slide 16: Travel shopping of the future

    Travel shopping of the future For personal use only  Aligned with creation of blended travel model and at the heart of FLT’s retail transformation efforts  Seamlessly melding the physical and digital worlds to make FLT’s next generation shops an exciting, inspiring and engaging in-store experience

17. Slide 17: Blended travel

    Blended travel For personal use only  Model recognises that customers have power to transact and interact when and how they want  Developed and refined after studying and meeting overseas retailers that had successfully blended on and offline offerings  FLT’s blended offering will allow customers

18. Slide 18: Blended travel

    Blended travel For personal use only KEY STATUS ELEMENTS MILESTONES  Pre and post booking processes blended PHASE 1   Customers able to enquire, pay and view itineraries online PHASE 2  More products and services available online   Published international fares, global hotels  Online access t

19. Slide 19: Consultant select - the human touch

    Consultant select - the human touch For personal use only 19

20. Slide 20: Strategy 2: The "Area"

    Strategy 2: The “Area” For personal use only Aim Focus on the area, a grouping of 12-20 shops and businesses, as the key operational unit – thinking small to grow big Major initiatives  New brand-based leadership structure in place – allows area leaders to focus on one brand  Area Leader Recipe fo

21. Slide 21: Strategy 3: Corporate travel growth

    Strategy 3: Corporate travel growth For personal use only Aim To accelerate corporate travel growth Major initiatives  Team and BDM growth, expansion of FCm global network (80 countries)  Enhanced customer offerings  Corporate TTV has doubled over the past three years  Business travel brands (FC

22. Slide 22: Strategy 4: Unique product

    Strategy 4: Unique product For personal use only Aim Enhance supply chain relationships for mutual benefit and unique product creation Major initiatives  Manufactured multi-stop flights – round-the-world, Double Dip  Student Flights’ Black Market fares gaining strong support and growing sales for

23. Slide 23: Strategy 5: Enquiry management

    Strategy 5: Enquiry management For personal use only Aim Better manage and convert the record levels of enquiry FLT continues to generate Major initiatives  Faster response times to email enquiry  Enquiry routed to specific consultants with expert knowledge – London trial for Perfect Match  Domes

24. Slide 24: Strategy 6: The customer

    Strategy 6: The customer For personal use only Aim Enhance FLT’s customer-centric focus to ensure the company’s businesses are the preferred choices in their sectors Major initiatives  Global Sales Academy exported from FLT’s UK business and now in place in Australia, RSA and the USA  Call recordi

25. Slide 25: Strategy 7: Emerging businesses

    Strategy 7: Emerging businesses For personal use only Aim Ensure FLT’s emerging businesses have the focus and resources to better create replicable, successful business models Major initiatives  Brand-based leadership structure now in place and starting to pay dividends  Turnover up 70% since Dec

26. Slide 26: Growth trajectory – niche brands

    Growth trajectory – niche brands For personal use only Turnover (AUD) - Australian Niche Brands  Australia’s niche leisure 350 m CAGR brands are growing strongly 300 m 19%  Combined turnover has increased 70% since the 250 m half year ended December 09 200 m  Cruiseabout’s turnover has more than

27. Slide 27: Technology and digital enhancements

    Technology and digital enhancements For personal use only  Universal Desktop: In place in Australia, UK, NZ and RSA. Single search air database on the way in Australia  Flight Express: Consultant desktop in place in USA  FCm Mobile: Integrated mobile phone solution to be launched for corporate cu

28. Slide 28: Ready for take-off – mobile sites

    Ready for take-off – mobile sites For personal use only 28

29. Slide 29: 2012/13 guidance

    2012/13 guidance For personal use only  Tracking at the top end of guidance range at the end of 1H (PBT up 8%)  Likely to be 10% up on PCP by end of February  Maintaining 10% PBT growth will become more challenging  FLT now tracking against largest profit months of 2011/12  Will continue to tar

30. Slide 30: Outlook: Australia

    Outlook: Australia For personal use only  Solid start to 2012/13  Corporate sales growing, leisure customers taking advantage of cheap fares  Continued growth in Flight Centre brand – 20 new sales teams by June 30  New “specialist” teams – first and business class travel, round-the-world flights

31. Slide 31: Airfare prices in freefall

    Airfare prices in freefall For personal use only Hong Kong ROUTE DEC DEC SAVING Singapore Down 23% 2007 2012 (%) Down 51% Sydney- Down Auckland $359 $330 8% Los Angeles Down Down 25% Sydney-Bali $999 $642 36% Sydney- Down $955 $664 Bangkok 30% Down Sydney-Fiji $565 $550 3% Fiji Sydney- Hong Kong $10

32. Slide 32: Outlook: UK

    Outlook: UK For personal use only  Blueprint in place to drive growth to 2017 and beyond  Key strategies focus on sales network growth, product expansion, productivity and leadership development  Currently, building operational and technological platforms required to fast-track growth through to

33. Slide 33: Outlook: USA

    Outlook: USA For personal use only  Results expected to follow a similar pattern to last year  2H profits targeted to exceed 1H losses, leading to $10m-$15m full year EBIT  Some ongoing economic uncertainty, ahead of business’s key profit period  Fast-tracking plans for Boston hyperstore (new bu

34. Slide 34: USA corporate footprint

    USA corporate footprint For personal use only Seattle Portland Minneapolis Chicago Detroit Boston Pittsburgh Providence Cleveland New York San Francisco Denver St Louis Ramsey Washington DC Philadelphia Charlotte Los Angeles San Diego Phoenix Dallas Atlanta Houston Orlando Miami • Location of Existi

35. Slide 35: Capital management

    Capital management For personal use only  FLT will consider retiring some of its remaining debt during 2H (announced previously) to lower overall interest expense  Opportunity to remove about $30million in overdrafts and loans (related to the Asia and Middle East corporate businesses)  Will consi

36. Slide 36: End of presentation

    End of presentation For personal use only  Questions? 36

Flight Centre — H1 FY2013 Earnings Presentation on 6ix