Helloworld Travel Ltd · ASX:HLO
Helloworld Travel — FY2017 Earnings Presentation
34 slides from Helloworld Travel's earnings presentation, August 2017
Slide 1: FY17 Investors Presentation
CEO Andrew Burnes FY17 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
Slide 4: Overview
FY17 Investors Presentation | Helloworld Travel Limited TRAVEL LIMITED
Slide 5: FY17 Results Overview
Page 5 FY17 Results Overview TTV 3.1% on • $5.9 billion TTV achieved in challenging market $5,872.3m FY16 environment. • Strong revenue growth led by TTV growth and Revenue 8.6% on margin improvement. $326.4m FY16 • Significant business profitability improvement in both EBITDA and NPAT: EBITDA 118%
Slide 6: Financial Performance
Page 6 Financial Performance
Slide 7: FY17 Full Year Results
Page 7 FY17 Full Year Results FY17 FY16 Change • Ticketing volumes increased by 19%, however TTV $m $m % impacted by lower airfare prices. Total Transaction Value (TTV) 5,872.3 5,694.3 3.1% • Revenue improvement from inclusion of AOT business for full year and better supplier and Revenue 326.4 300.5
Slide 8: Group EBITDA – by nature
Page 8 Group EBITDA – by nature 60 Group EBITDA - FY16 to FY17 0.8 0.9 55.2 4.6 9.3 -0.7 50 3.8 40.3 40 13.0 -1.8 Millions ($'m) 30 25.3 20 10 0 FY16 EBITDA AOT business One off AOT One off GST FY16 Pro-forma Underlying Online EBITDA Air Franchise MTA profit FY17 EBITDA (July 15 - Jan merger costs i
Slide 9: Group EBITDA – by segment
Page 9 Group EBITDA – by segment Group EBITDA - FY16 to FY17 60 55.2 4.3 1.3 • Australia segment - excellent business 50 24.3 performance representing growth from the full year inclusion of AOT businesses, revenue 40 margin improvements and delivery of merger Millions ($'m) synergies and cost reduct
Slide 10: Significant one-off items
Page 10 Significant one-off items FY17 FY16 $m $m Significant items in FY17 Redundancy costs 0.9 1.8 • Redundancy costs of $0.9m from the continued restructure of the business cost base. Business transformation costs 0.6 2.9 • Business transformation costs of $0.6m mainly Franchise loyalty shares 0.
Slide 11: Australia Overview
Page 11 Australia Overview Strong growth in TTV and revenue Increased ticketing volumes offset by lower FY17 FY16 Change airfare prices. Strong contribution from full year of AOT $m $m % businesses. Total Transaction Value (TTV) 4,908.8 4,747.8 3.4% helloworld.com.au transition from unprofitab
Slide 12: Australia EBITDA FY17
Page 12 Australia EBITDA FY17 60 Australia EBITDA - FY16 to FY17 0.8 0.9 50.3 50 4.6 5.2 -0.7 3.8 39.5 40 11.5 -1.8 Millions ($'m) 30 26.0 20 10 0 FY16 EBITDA AOT business One off AOT One off GST FY16 Pro-forma Underlying Online EBITDA Airline Franchise MTA profit FY17 EBITDA (July 15 - Jan merger c
Slide 13: Australia Business Review
Page 13 Australia Business Review Retail franchise operations • Brand Evolution Changed company name to Helloworld Travel to reflect our place in the industry and brand name recognition. Successfully launched Helloworld Travel - The Travel Professionals tagline for our branded networks, launched
Slide 14: Australia Business Review
Page 14 Australia Business Review Wholesale/Inbound operations • Improved product and destinations offerings. • Acquisition of cruise businesses. • Enhanced ReadyRooms portal providing a more comprehensive range and easier booking process. • Business synergies being realised. • 2017 National Travel
Slide 15: New Zealand Overview
Page 15 New Zealand Overview FY17 FY16 Change $m $m % • TTV, revenue and margin growth driven by strong sales performance from the Go Total Transaction Value (TTV) 849.0 820.8 3.4% Holidays wholesale brand, and increased sales from larger retail member network. Revenue 60.5 52.6 15.0% Gross margin %
Slide 16: New Zealand EBITDA FY17
Page 16 New Zealand EBITDA FY17 New Zealand EBITDA - FY16 to FY17 10 5.6 8 6.2 6 -1.9 Millions ($'m) 4 2.5 0.6 1.9 2 0 FY16 EBITDA AOT business (July 15 - Jan FY16 Pro-forma EBITDA Revenue growth Net cost increase FY17 EBITDA 16) • Revenue improvement of $5.6m driven by strong TTV and margin growth
Slide 17: New Zealand Business Review
Page 17 New Zealand Business Review Retail franchise operations • Retail members growth (300 members, increase of 57 members) World Travellers group joined adding material TTV volumes across air, land and third party suppliers. Independent agent group rebranded to My Travel Group and has grown b
Slide 18: Rest of World (ROW) Overview
Page 18 Rest of World (ROW) Overview FY17 FY16 Change $m $m % • TTV and revenue impacted by lower trading from the Insider Journeys brand as refocus on Total Transaction Value (TTV) 114.5 125.7 (8.9%) distribution channel and margin, in addition to adverse foreign exchange movements. Revenue 22.3 23
Slide 19: Rest of World (ROW) Overview
Page 19 Rest of World (ROW) Overview 5 Rest of World EBITDA - FY16 to FY17 3 Millions ($'m) 1 -1 0.3 0.1 0.3 0.5 -1.4 -3 -2.6 -5 FY16 EBITDA Insider Journeys Wholesale USA Transport Tourism Fiji Inbound - ROW FY17 EBITDA (TTF) • Insider Journey’s business improvement from a shift back to its traditi
Slide 20: Rest of World (ROW) Review
Page 20 Rest of World (ROW) Review Insider Journeys • Refocus of revenue distribution channel and margin. • Continues to face challenges of aggressive pricing and heavy discounting by competitors in key markets. • Cost base reduction and right-size. • Alignment of business systems with other Hellowo
Slide 21: EBITDA to NPAT reconciliation
Page 21 EBITDA to NPAT reconciliation • Depreciation/amortisation increase led by full FY17 FY16 year inclusion of AOT businesses and accelerated depreciation of assets no longer required. $m $m • Actual FY17 capital expenditure decreased from EBITDA 55.2 25.3 prior year, reflecting improved capital
Slide 22: Liquidity and funding
Page 22 Liquidity and funding • Strong cash position with reduced external debt. We FY17 FY16 FY15 are well positioned to invest in future growth $m $m $m opportunities. Company cash 34.7 26.2 27.4 • In October 2016, successful new share issue of 7.0m shares at $4.25 per share. Funds were used to: C
Slide 23: Cash conversion
Page 23 Cash conversion FY17 FY16 $m $m Change • Strong underlying free cash flow generated of $31.8m, a significant improvement of $41.6m EBITDA 55.2 25.3 29.9 compared with prior year. Non cash and working capital movement (6.4) (15.6) 9.2 • Decline in non cash and working capital reflects improve
Slide 24: Analysis of synergies and cost reductions
Page 24 Analysis of synergies and cost reductions Synergy and Cost Savings Helloworld Travel has over-delivered on the implementation of our identified synergies and 3.6 Identified Commercial/Retail agreements 3.4 cost reduction program. Actioned 1.1 Property costs 2.1 Helloworld Travel has actioned
Slide 25: Business Focus and Priorities
Page 25 Business Focus and Priorities
Slide 26: Our travel portfolio
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Slide 27: Growth in member networks and numbers
Page 27 Growth in member networks and numbers • Total members have grown to 2,015, an increase of 349 from the 1,666 members at 30 June 16. • Australian network continues to expand as brand recognition grows and through the strategic acquisition of MTA. • NZ business has grown to 300 providing a str
Slide 28: The Digital Revolution – Clicks & Mortar strategy
Page 28 The Digital Revolution – Clicks & Mortar strategy We are transforming from a legacy bricks and mortar retail travel agency distribution business to an integrated retail leisure and corporate travel distribution business offering full in-person and online booking functionalities to our custom
Slide 29: Complimentary Digital Tools
Page 29 Complimentary Digital Tools ResWorld helloworld.com.au Microsites & Apps
Slide 30: Continued Business Focus
Page 30 Continued Business Focus Business Agent Cost Brand Technology Integration Focus Control Awareness • Structure and • Improving • New • ResWorld • Brand evolution remuneration margins remuneration • helloworld.com. • Key model • Property • Consolidating au sponsorships advantages • Technology
Slide 31: Conclusion
Page 31 Conclusion • A strong business turnaround since the merger with AOT in February 2016, as evidenced by FY17 performance showing: strong growth in revenue, EBITDA and net profit after tax; and strong growth in key revenue and EBITDA margins across all segments. • Cost base has been right s
Slide 32: Appendix
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Slide 33: Restatement of TTV under revised methodology
Page 33 Restatement of TTV under revised methodology Australia New Zealand ROW Consolidated $m FY17 FY16 FY17 FY16 FY17 FY16 FY17 FY16 TTV - previous methodology 4,383.5 4,256.5 695.9 705.8 114.5 125.7 5,193.9 5,088.0 Correction to prior year self plate - - - (27.2) - - - (27.2) Recognition of retai
Slide 34: Thank-you
Thank-you helloworld TRAVEL LIMITED |