Yatra Online Limited · NSE:YATRA
Yatra Online — SPAC Merger (October 2016)
51 slides from Yatra Online's SPAC merger presentation, Oct 14, 2016
Slide 1: October 2016 Investor Presentation
PAGE 0 October 2016 Investor Presentation
Slide 2: Disclaimer and Forward-Looking Statements
PAGE 1 Neither Terrapin 3 Acquisition Corporation (“Terrapin”) nor Yatra Online, Inc. (“Yatra”) nor any of their respective affiliat es make any representation or warranty as to the accuracy or completeness of the information contained in this presentation. This presentation has been prepared to ass
Slide 3: Risk Factors, Industry Data and Additional Information
PAGE 2 Terrapin and Yatra caution that the foregoing list of factors is not exclusive. Additional information concerning these and o the r risk factors is contained in Terrapin’s and Yatra’s most recent filings with the SEC. All subsequent written and oral forward looking statements concerning Terra
Slide 4: Yatra, India's second largest OTA, is well positioned to benefit from macro trends
PAGE 3 Yatra, India’s second largest online travel agent (“OTA”) 2 , is well - positioned to benefit from strong macroeconomic trends Yatra had approximately 4.4 million cumulative customers as of June 30, 2016 and Gross Bookings of $897 million in fiscal yea r 2016 3 Yatra’s multi - channel platf
Slide 5: Yatra is a leader in the fast-growing Indian travel market
PAGE 4 1. Cumulative as of June 30, 2016; does not include data for B2B2C businesses 2. Refer to Appendix for definitions and reconciliations of non - IFRS measures; assumes 66.33 INR per USD 3. Data for flagship brand Yatra.com only and excludes data from B2E and B2B2C businesses 4. Source: The Eco
Slide 6: Yatra key metrics and growth
PAGE 5 1. Management estimates based on publicly available company filings 2. Refer to Appendix for definitions and reconciliations of non - IFRS measures 3. Assumes 66.33 INR per USD 4. FY2014 Revenue Less Service Cost amounts have been derived from unaudited financials of various subsidiaries prep
Slide 7: Industry Overview
Industry Overview
Slide 8: Young population and travel expenditure growth
PAGE 7 The economy is driven by a young population where the median age is 27 1 Travel expenditures forecast to grow significantly faster than the economy 1. Source: UN State of the World’s Population (2014) 2. Source: World Bank 3. Source: Phocuswright 4. Source: Phocuswright, World Bank -6% -4% -2
Slide 9: Socio-economic trends drive Indian travel growth
PAGE 8 160 267 547 2011E 2015-16E 2025-26E 1. Source: Indian government census, 2011; tiers based on Indian Government House Rent Allowance (HRA) categories 2. Source: Economic Times India has hundreds of large cities and rising per - capita disposable income which are boosting demand for travel Gro
Slide 10: Growth in Tier 2 and Tier 3 cities and airports
PAGE 9 5% 13% 16% 10% 15% 24% 7% 10% 20% 2013-14 2014-15 2015-16 Major Metro Airports Secondary Airports Smaller Regional Airports Demographics, government policy, and an improved investment environment are driving growth, especially in Tier 2 and Tier 3 cities 1 1. Tiers based on Indian Government
Slide 11: Indian air travel industry growing steadily
PAGE 10 8.7 9.7 10.8 12.0 13.5 15.2 17.1 3.7 4.3 4.9 5.6 6.4 7.3 8.4 2014 2015 2016E 2017E 2018E 2019E 2020E Total air travel Online leisure and unmanaged business air travel Indian air travel gross bookings 2 (USD billion, % penetration) 57.8 60.1 67.4 81.1 45.6 56.1 12.3 13.2 16.9 18.4 10.8 11.5 7
Slide 12: Indian online hotel and air gross bookings expected to grow
PAGE 11 Offline 59% Online 41% Offline 65% Online 35% Source: Phocuswright; online refers to online leisure / unmanaged business travel; assumes 67 INR per USD for all periods Indian online hotel and air gross bookings expected to grow nearly 2x to $11 billion by 2020E 18% Online CAGR 16% Online CAG
Slide 13: Technology adoption surging from a low base
PAGE 12 17% 39% 41% 45% 58% 72% India Japan Brazil Russia China US 721 462 287 139 115 103 China India US Brazil Japan Russia Smartphone penetration rate 3 Internet users 1 (million) Technology adoption surging from a low base Web penetration: US: 89% China: 52% India: 37% Smartphone ownership 2 (mi
Slide 14: Low online penetration of hotel bookings provides room for growth
PAGE 13 Low penetration rate for online bookings of hotels provides significant room for growth (Online percentage of gross bookings, 2015) 5 Lodging market expands with online sales growing 2x faster than offline sales 17% 49% 44% Hotel Rail Domestic air Indian lodging market continues to grow (201
Slide 15: Consumer spending: India is where China was
PAGE 14 Consumer spending: India is where China was Chinese online travel agents have benefited from economic development China 1 India 1 China 2015 GDP per capita (USD) 2004 $1,498 2014 $1,487 $7,920 2 Organized retail penetration 1999 ~10% 2014 9 - 10% 20% 3 Online shoppers 2006 43m 2014 38m 413m
Slide 16: Online travel a leading value creator for public investors
PAGE 15 Online travel has been a leading value creator for public investors as e - commerce grows We believe India’s online travel market is poised for continued growth and value creation, following the well - established path seen in the US and China 1. Combined market capitalization of Expedia, Pr
Slide 17: Yatra Business Overview
Yatra Business Overview
Slide 18: Yatra is well positioned to capitalize on industry growth
PAGE 17 Yatra is well positioned to capitalize on industry growth Growth in Tier 2 and Tier 3 cities Largest Indian hotel inventory among OTAs 1 further supported by strategic alliance with Reliance Jio Favorable market dynamics in air travel for OTAs Leveraging strength of the air business to drive
Slide 19: Yatra's ecosystem links all channels and products
PAGE 18 Complete offerings Air 9 Domestic carriers 275+ International carriers Hotels & Lodging 61,000+ Indian properties plus growing homestays Holiday packages Rail, bus, activities, others Multi - channel customer access Direct - to - consumer “B2C” 153m visits 1 in FY 2016; 4.4m customers 2 Corp
Slide 20: Maximize reach through a common delivery platform across channels
PAGE 19 Maximize reach by supporting a common delivery platform across channels Build on most trusted brand in OTA market 1 to further strengthen loyalty 153 million visits 2 in FY 2016 and more than 4.4 million cumulative customers 3 Increase mobile growth and reduce cost of customer acquisit
Slide 21: Yatra's air bookings growing faster than the Indian air industry
PAGE 20 3,412 4,207 5,526 FY 14 FY 15 FY 16 Air passenger count (‘000, gross basis) Air industry in India poised for rapid growth in Tier 2 and Tier 3 cities based on demographics and the Indian government’s initiative to add airports Partnership with Reliance Jio and Yatra’s large B2B2C distrib
Slide 22: Airline capacity expected to grow significantly
PAGE 21 116 117 19 118 40 422 90 144 9 42 538 207 163 127 11 6 4 3 Current fleet On Order Total 1. Source: Phocuswright 2. Source: Company reports and press articles 3. Source: Wall Street Journal Airline capacity expected to grow significantly Reported to be in talks with Boeing, Airbus, and others
Slide 23: Hotels and Packages business continues to grow
PAGE 22 Yatra’s Hotels and Packages business continues to grow 761 944 1,139 FY 14 FY 15 FY 16 78 100 130 FY 14 FY 15 FY 16 Standalone hotel room nights 3 (‘000, gross basis) Largest hotel network in India with more than 61,000 hotels , giving customers the most extensive choice Focus on high -
Slide 24: Differentiated strategy in hotels
PAGE 23 Yatra has a differentiated strategy in hotels Yatra has India’s largest hotel inventory, especially in the key “ budget”category in Tier 2 and Tier 3 cities 1. Management estimates, as of March 2016 2. In 2016, lodging outlets in India are expected to reach 84,197 according to Euromonitor In
Slide 25: Online hotel bookings still nascent
PAGE 24 Year Hotel market Gross Bookings (USD million) 2 Online % hotel market 2 OTA % online 2 OTA revenue pool 3 (USD million) 2016 $7,241 20% 75% $193 2017 $7,991 23% 77% $250 … 2020 $10,941 27% 78% $420 Online hotel bookings is still nascent We believe the online hotel industry in India does not
Slide 26: Foundation built on customers' trust and loyalty
PAGE 25 Ranking of most trusted internet companies in India 1 1 Flipkart General merchandise 2 Quikr Classified ads 3 Olx Classified ads 4 Snapdeal General merchandise 5 Amazon Books/merchandise 6 Travel 7 Jabong Clothing 8 Myntra Clothing 9 Paytm General merchandise 10 BookMyShow Entertainment 11 C
Slide 27: Yatra's improving customer metrics
PAGE 26 Total customers transacting (‘000) 2 ( FY14 - 16, growth in %) Transactions per customer 2 ( FY14 - 16, growth in %) 398 283 534 342 682 417 Number of new customers Number of repeat customers 1.51 2.79 1.57 2.84 1.73 3.37 Number of transactions by new customers Number of transactions by repe
Slide 28: Differentiating through product innovation
PAGE 27 Yatra Mini app Differentiating through product innovation Comprehensive offering, one app for all travel needs Complete corporate travel solution, including approvals and policy compliance Lightweight multi - lingual app available in 9 languages To be pre - installed on Jio devices Y
Slide 29: Customers embracing mobile ecosystem
PAGE 28 Yatra’s mobile bookings now greater share of traffic 2 (% of bookings) 0% 20% 40% 60% 80% 100% Jan 14 Jul 14 Jan 15 Jul 15 Jan 16 Mobile Desktop Customers embracing mobile ecosystem Yatra’s mobile bookings increasing steadily in air and hotel 2 (% of bookings on mobile) Yatra’s investment in
Slide 30: Reliance Jio alliance: a catalyst for growth
PAGE 29 Source: Yatra company data, management estimates, Reliance Industries company reports. Reliance Jio alliance: a catalyst for growth Reliance Industries is launching one of India’s largest 4G networks under the “Jio” brand — Jio is seeking 100 million new customers and expects to serve 18,0
Slide 31: Yatra's mission and strategic priorities
PAGE 30 Yatra’s mission: “Create happy travelers” Yatra’s strategic priorities Focus on profitable growth and long - term sustainability Focus on air business to drive new customer acquisitions and further profitability Focus on cross - selling of hotels and packages to the customer base Continue to
Slide 32: Management team
PAGE 31 Name and title Background Years in travel industry Dhruv Shringi Co - Founder and CEO Experience: Ebookers.com, Ford Motors, Arthur Anderson Education: MBA - INSEAD, Chartered Accountant 13 Manish Amin Co - Founder and CIO Experience: Ebookers.com Education : Btech National and Busin
Slide 33: Yatra Financial Overview
Yatra Financial Overview
Slide 34: Yatra's fiscal year 2016 highlights
PAGE 33 28% Growth in transactions 3.2x Growth in mobile app traffic 31% Growth in gross air passenger count 26% Growth in transacting customers 1 3.0x Growth in mobile app air bookings 31% Growth in holiday packages passengers travelled 23% Growth in Gross Bookings 2.8x Growth in mobile app hotel b
Slide 35: Growth has been consistent and is expected to accelerate
PAGE 34 Revenue Less Service Cost 1 grew by 22% in FY16 with Adjusted EBITDA 1 losses of only INR 952 million ($14 million) 2 Net Revenue Margin 1 has been stable at 7.1% in FY15 and 7.0% in FY16 Growth rates expected to increase due to: — Improved economic trends and air connectivity – partic
Slide 36: Operating leverage expected to lead to margin improvement
PAGE 35 Operating leverage is expected to lead to significant margin improvement Scale anticipated to lead to profitability 1. Refer to Appendix for definitions and reconciliations of non - IFRS measures 2. Excludes share based payment expense 3. These estimates are based on management assumptions a
Slide 37: Steady margins as Yatra scales up
PAGE 36 Air Ticketing Net Revenue Margin 1 5.4% 5.8% 5.8% FY14 FY15 FY16 Hotels and Packages Net Revenue Margin 1 10.9% 11.6% 10.6% FY14 FY15 FY16 Steady margins as Yatra scales up + 6.6% 7.1% 7.0% FY14 FY15 FY16 Multichannel strategy, along with growth in supply expected to provide stability of A
Slide 38: Yatra expects to achieve its goals without needing further capital
PAGE 37 Yatra expects to achieve its goals without needing further capital Strategic investment priorities Brand Marketing Further strengthen brand marketing, especially in Tier 2 and Tier 3 cities to increase direct traffic Increase mobile app downloads Enhance B2E sales and distribution capa
Slide 39: Transaction Overview
Transaction Overview
Slide 40: Sources and uses
PAGE 39 Sources Terrapin 3 cash in trust $99.4 Macquarie forward purchase 20.0 Stock consideration 3 208.7 Total sources $328.1 Uses Cash to existing owners $15.5 Repayment of debt and other payouts 5 11.9 Cash to balance sheet 82.0 Fees and expenses 10.0 Stock consideration 3 208.7 Total uses $328.
Slide 41: Comparable company analysis
PAGE 40 Comparison ($m) Market Minority Net cash / EV / Revenue (3/31) Revenue growth (3/31) Price Shares cap Cash Debt interest EV market cap 2016 2017E 2018E 2019E 2017E 2018E 2019E Yatra transaction with TRTL $10.00 36 355 97 3 – 261 27% 4.1x 3.2x 2.2x 1.7x 31% 44% 32% MakeMyTrip $21.90 42 922 19
Slide 42: Combining with Terrapin at an attractive valuation
PAGE 41 1. Yatra revenue denotes Revenue Less Service Cost (Refer to Appendix for definitions and reconciliations of non - IFRS measures) and assumes 67 INR per USD; These estimates are based on management assumptions and projections and are not predictions or guarantees of actual performance; actua
Slide 43: Indicative Yatra trading price per share analysis
PAGE 42 Note: Online travel agency (OTA) comparable companies include Ctrip, Expedia, MakeMyTrip, Priceline, Qunar, TripAdvisor, and Web jet Note: Yatra stock price analysis includes effect of 35,275,000 warrants to purchase one half share at a strike price of $5.75 ($ 11.50 on a full share equivale
Slide 44: EV / revenue multiple vs. revenue CAGR
PAGE 43 EV / revenue multiple vs. revenue CAGR Yatra: Higher growth at a lower multiple Note: Yatra revenue denotes Revenue Less Service Cost (Refer to Appendix for definitions and reconciliations of non - IFRS measure s); assumes EV of $261m and 67 INR per USD. These estimates are based on manageme
Slide 45: Few US-listed opportunities to invest in India's growth
PAGE 44 Only 12 US - listed Indian firms versus more than 200 China - based firms Source: Bloomberg as of 10/07/2016 Company Industry Market capitalization (USD million) HDFC Banking $61,074 Infosys IT Services/ business consulting $35,832 Tata Motors Automotive manufacturing $27,150 Wipro IT Servic
Slide 46: Transaction highlights
PAGE 45 1. Refer to Appendix for definitions and reconciliations of non - IFRS measures; assumes 67 INR per USD. These estimates are based on management assumptions and projections and are not predictions or guarantees of actual performance; actual results and performance may materially differ from
Slide 47: Anticipated transaction timeline
PAGE 46 Date Event September 29, 2016 Filed preliminary proxy materials with the SEC November 2016 Print and mail final proxy materials to shareholders December 2016 Hold shareholder vote and close transaction Anticipated transaction timeline
Slide 48: Appendix
Appendix
Slide 49: Non-IFRS measures definitions
PAGE 48 The historical financial information regarding Yatra included in this investor presentation reflects Yatra’s fiscal year end of March 31, and has been derived from audited financial statements of Yatra and its subsidiaries that were prepared in accordance with International Financial Repo rt
Slide 50: Reconciliation of Revenue Less Service Cost and Net Revenue Margin
PAGE 49 Reconciliation of Revenue Less Service Cost and Net Revenue Margin Reconciliation of non - IFRS measures For years ended (Historical) For years ended (Projected) INR million 31 March 2014 31 March 2015 31 March 2016 31 March 2017 31 March 2018 31 March 2019 Gross Bookings 40,836 48,272 59,49
Slide 51: Reconciliation of Adjusted EBITDA (Loss)
PAGE 50 Reconciliation of non - IFRS measures, cont’d For years ended (Historical) INR million 31 March 2015 31 March 2016 Results from operations as per IFRS (985) (1,205) Add: Depreciation and amortization 209 234 EBITDA (777) (971) Add: Share based payment expense 32 19 Adjusted EBITDA (Loss) (74