Flight Centre Travel Group Limited · ASX:FLT
Flight Centre Travel — FY2024 Earnings Presentation
55 slides from Flight Centre Travel's earnings presentation, Aug 28, 2024
Slide 1: FY24 Full Year Result Presentation
FLT: FY24 Full Year Result Presentation August 28, 2024 1 | FLT
Slide 2: Speakers & Presentation Sections
SPEAKERS & PRESENTATION SECTIONS Adam Campbell Global CFO & Chris Galanty James Kavanagh Graham “Skroo” Turner Greg Parker CEO – Global Business CEO – Corporate CEO – Leisure Global MD & CEO CEO – Supply Services Results & Highlights Corporate Overview Leisure Overview Outlook (Section 1) (Section 2
Slide 3: Results & Highlights
SECTION 1 RESULTS & HIGHLIGHTS 3 | FLT
Slide 4: Strong financial performance
FY24 HIGHLIG HT S Strong financial performance ✓ Record TTV of $23.74b - circa $1.8b YOY increase $’m ✓ 131% underlying PBT increase to $320m, statutory PBT up 212% to $219.7m (PBT Sales FY24 FY23 adjustments included in Appendix 2 & as outlined previously, apart from additional TTV 23,744 21,939 $1
Slide 5: Ongoing sales growth with higher productivity
FY24 HIGHLIG HT S Ongoing sales growth with higher productivity New TTV milestone established – underlining strong productivity growth • FY24 result of $23.74b, slightly above FY19 • Achieved with 63% of FY19 full-time employee (FTE) workforce, plus expanding independent agent & agency network • 8%
Slide 6: Revenue margin recovery
FY24 HIGHLIG HT S Revenue margin recovery 100 BPS YOY IM PROVEMENT TO 11 .4% Supplier Margin Stability • Generally maintaining or improving Total Available Margin (TAM) in all product categories • Return of traditional "back-end" margin structures in Air – solid YOY growth in guaranteed over-rides &
Slide 7: Maintaining cost discipline
FY24 HIGHLIG HT S Maintaining cost discipline 9.6% UNDERLYING COST MARGIN UNDER-PERFORMING BUSINESSES CLOSED/RESTRUCTURED Costs Rebased • Permanent, structural change made during pandemic – operating expenses GoGo remain 15% below pre-COVID levels • US wholesale business closed (announced at half ye
Slide 8: "We are a 2% profit margin business"
FY24 HIGHLIG HT S "We are a 2% profit margin business" BUILDING BLOCKS BUSINESS MIX A A QUESTION STRONG MOMENTUM IN PLACE NEAR-TERM HEADWIND OF TIMING • Revenue margin recovering • Positive margin exit rate from • Rapid growth in lower profit • Confident in delivering 2% margin FY24: margin business
Slide 9: Strong divisional results
FY24 Strong divisional results CORPORATE SEGMENT LEISURE SEGMENT • 44% underlying PBT increase to $211m, record Corporate Traveller profit • Underlying PBT more than doubled to $188m • 10% TTV growth to record $12.1b (51% of group TTV in FY24 v 38% in FY19) • 10% TTV growth to $11b (46% of group TTV
Slide 10: FLT's "Other" segment
F Y 2 4 OV E RV I E W Pillars - Underlying PBT FLT's "Other" segment FY24 FY23 restated* Other Pillar (78.7) (99.8) Operating businesses – reduced FY24 losses Operating Businesses (18.9) (26.1) • Former Travel Services division profitable – Discova Asia, Hotels & touring businesses – along with Avmi
Slide 11: Almost $450m in capital management initiatives undertaken
FY24 Almost $450m in capital management initiatives undertaken IN LINE WITH POLICY ANNOUNCED AT START OF FY24 & UNDERPINNED BY STRONG CASH GENERATION Circa $385m investment • $252m of bank debt (SFA) repaid during FY24 (able to be redrawn) in debt & convertible • Additional $49m in overdraft facilit
Slide 12: Balance Sheet
FY24 $'m 30-Jun-24 30-Jun-23 Mvmt Balance Sheet Cash & cash equivalents 1,138 1,328 (190) Financial assets 10 20 (10) Trade & other receivables 885 835 50 Contract assets 301 318 (17) Other current assets 149 129 20 ANALYSIS Current assets 2,483 2,630 (147) • Balance sheet further strengthened durin
Slide 13: Profit & Loss
FY23 FY24 $'m FY24 restated* Mvmt Mvmt % Profit & Loss Group TTV Operating revenue 23,744 2,711 21,939 2,281 1,805 430 19% 8% Total revenue 2,711 2,281 430 19% ANALYSIS Other income 100 43 57 133% • $1.8b TTV increase YoY – solid growth achieved, but adversely impacted by Share of JV/Associates (2)
Slide 14: Cash Flow
FY24 $’m FY24 FY23 Mvmt Cash Flow Operating activities Operating activities before interest and tax 470 172 298 Net interest and tax paid (49) (16) (33) Cash inflow from operating activities 421 156 265 ANALYSIS Investing activities • Record operating cash inflow of $421m – driven predominantly Acqu
Slide 15: Corporate Overview & Update
SECTION 2 OVERVIEW & UPDATE C O R P O R AT E 15 | FLT
Slide 16: Global Winning Brands | Market Segments
WHERE WE PLAY C O R P O R AT E Global Winning Brands | Market Segments CUSTOMER VALUE PROPOSITION SUPPLIER VALUE PROPOSITION Why are we different? Why are we different? • Exclusive programs/content ENTERPRISE • Combination of local vs. $100M+ spend • The only global alternative to traditional TMCs g
Slide 17: Corporate FY24 Scorecard
C O R P O R AT E FY24 Scorecard TRANSACTION REVENUE UNDERLYING CUSTOMER NEW BUSINESS VOLUME MARGIN PBT MARGIN RETENTION WON +11% +30bps +40bps 98% ~$2B Estimated annual spend across FCM (contracted) & Corporate Traveller (non-contract) from July 1-June 30 C O R PO R A T E C O R PO R A T E C O R PO R
Slide 18: A materially larger business than pre-pandemic
C O R P O R AT E A materially larger business than pre-pandemic Outpacing sector recovery ✓ Record TTV achieved in sector that has recovered to circa 80% of pre-COVID transaction volumes (Source: MIDT) ✓ FY24 TTV more than $1b higher than previous record & circa 135% of FY19 result Growing to win –
Slide 19: Achieving scale benefits, with further productivity uplift to come
C O R P O R AT E Achieving scale benefits, with further productivity uplift to come Productive Operations Starting to achieve scale benefits 1 D IG IT ISATI ON & STANDARD I SATI ON ✓ 11% transaction volume growth & record TTV achieved with reduced workforce (circa 95% of FY23 FTE, based OF OPERATI O
Slide 20: Mass adoption of Melon & FCM Platform
HOW WE WIN C O R P O R AT E Mass adoption of Melon & FCM Platform Combining a tailored, proprietary digital experience with best-in-class personal service & content access Melon is a one-stop shop for our customers to search, book and Our vision is to be the “Alternative”, the most flexible business
Slide 21: AI powering productive operations
C O R P O R AT E AI powering productive operations ONGOING FOCUS ON IMPROVING PRODUCTIVITY & THE CUSTOMER EXPERIENCE Continued development of capabilities & product suite with several new initiatives underway including: • Revolutionizing Customer Service with AI: Our new AI feature intelligently cat
Slide 22: Strategy on a page
C O R P O R AT E Strategy on a page GLOBAL WINNING BRANDS Two globally differentiated winning brands focused on Corporate Traveller is the TMC that’s fanatical about SMEs and delivers FCM is The Alternative TMC for Multi-National Corporates. SME and GMN Care Uplifted through the power of our people
Slide 23: Key Drivers
C O R P O R AT E Key Drivers C ONTINU ED O RGANIC SALES GR EATER E FFIC I ENC Y/ GROWTH SC ALE B ENEFI TS • High customer retention rates • Continuing to reduce costs per transaction - staff numbers now being reduced as operational efficiency improved & • Investment in leading Sales & Marketing Mach
Slide 24: Leisure Overview & Update
SECTION 3 OVERVIEW & UPDATE L EI SU RE 24 | FLT
Slide 25: Trusted Portfolio of Travel Brands
LEISURE Trusted Portfolio of Travel Brands FOUR LE ISURE CATEGORIES, OPERATING WITH A LEANER COST BASE & SCALABLE OFFERINGS Mass Market Luxury Specialist Independents Global omni-channel travel retailer The leading network of Specialist brands: Fast growing community famous for flights + holidays, l
Slide 26: Positioned to Grow following strongest profit in a decade
LEISURE Positioned to Grow following strongest profit in a decade DI VERSE PORTFOLI O O F B RANDS M ORE E FFI CI ENT Positioned in markets with room to grow Transformed business with materially lower cost base (fewer shops, Core markets: AU, NZ, RSA | Challenger: US, UK, CA, SG people & systems) tha
Slide 27: Ongoing Business Model Shift
LEISURE Ongoing Business Model Shift Employee Model Online Model Independent Model • Generate the largest share of TTV and continue • Travel products sold through FLT brands • Lower cost (payroll and property costs) vs to be a growth model. including FC.com, BYOJet, Aunt Betty and employee-based mod
Slide 28: Leisure FY24 Scorecard
LEISURE FY24 Scorecard UNDERLYING NET PROMOTER REPEAT TTV REVENUE MARGIN PBT MARGIN SCORE CUSTOMERS +10.2% +110bps +80bps 48-91 53-67% L E IS URE L E IS URE L E IS URE L E IS URE L E IS URE Compared to FY23. Compared to FY23 Compared to FY23 Lowest to highest brand Lowest to highest brand FY24 H2 ma
Slide 29: Longer Term Objectives
LEISURE Longer Term Objectives Global leisure is laser focused on five ”Big Moves” 1 DI FFER ENTIATE FL IG HT C ENTRE Omni Travel Retailer of choice, famous for flights + holidays, backed by expertise 2 LU XU RY TRAVEL Grow collection of brands through organic growth, M&A, partnerships & events 3 I
Slide 30: Key Drivers
LEISURE Key Drivers SC ALE PORTFO LIO OF WINNI NG DI FFER ENTIATE D M ODE LS PRODU CT RANGE S • Physical expansion (network, consultants, specialist teams) • Ancillary travel & service products (captain pack, seats, bags) • Expansion of Independent agents & agencies • Manufactured products & holiday
Slide 31: Enhanced Digital Capability
LEISURE Key Digital Advancements Enhanced Digital Capability Building our brands together on a shared ecosystem of tech-powered products. Key investment in digital capability, and mobility to capture a greater share of wallet, drive customer personalization and support sales growth. Leveraging machi
Slide 32: FCB app taking off: Evolving digital experience
LEISURE FCB app taking off: Evolving digital experience LE IS U R E P ME D • Fastest Growing Channel – more than 53,000 downloads each month • 13% bookings growth/ 5bps conversion increase YOY • Investments enhancing speed & user experience • Search the travel catalogue of Flight Centre Travel Group
Slide 33: Trialing Machine Learning / Artificial Intelligence
LEISURE Trialing Machine Learning / Artificial Intelligence 0 00 0 Propensity AI Models & Generative AI Grow Tour Demand Forecasting Search Optimisation Travel Ideation • Using Machine Learning models to analyse Inclusions: • Trialing GenAI to generate personalized trip • Leveraging AI models to pre
Slide 34: More Components = Greater Value
LEISURE More components = Greater Value 34 | FLT
Slide 35: Captain's Pack | Planting for the planet
LEISURE Captain's Pack | Planting for the planet EXCLUSIVE to Flight Centre 65% attachment globally (instore) Provides customers with Peace of Mind + Savings Flight Centre's first global sustainability initiative supporting local communities, local economies and the planet. Over 1.5m trees purchased
Slide 36: 36 | FLT
om New York £329 Dubai £1995 Boosted Cashback Retailers | siew ai» . > = Los ANGELES Always here for you. For peace of mind, ask us about travel insurance. os . ~ BANGKOK SINGAPORE, BRISBANE 10% Cashback 8% Cashback Ends: 31 Jul 2024 Ends: 31 Jul 2024 RE OUP”
Slide 37: Luxury Growth | Travel Associates driving fame in AU/NZ
LEISURE Luxury Growth | Travel Associates driving fame in AU/NZ • Brand Fame Drivers - New experiential activations in partnership with Top Tier Consumer Media and luxury tastemakers with high value audiences • Signature Itinerary Collection – luxury itineraries to one-of-a-kind destinations driving
Slide 38: 38 | FLT
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Slide 39: Outlook
FLIGHT CENTRE TRAVEL GROUP™
Slide 40: FY25: Balancing short and long-term priorities
OUT LOOK FY25: Balancing short and long-term priorities TARGETING A S US TAINAB LE 2% M ARGIN • Profitable growth the priority in post-COVID era, after 5-year period of solid but "profitless" TTV expansion pre-pandemic • Focus on achieving 2% margin target within the "stretch" timeframe (FY25) but n
Slide 41: FY25: Market conditions
OUT LOOK FY25: Market conditions Cost of living (col) pressures have curbed discretionary spending in some sectors but travel has generally out-performed • YOY growth continues – now back to a normal run-rate • A highly resilient sector historically - almost 6% CAGR in Australian short-term resident
Slide 42: Airfare affordability improving as fares normalise
OUT LOOK Airfare affordability* improving as fares normalise THE "TURNER INDEX" 50 years 20 years 10 years August 1947 5 years ago ago ago ago 2024 Sydney-London ~$1170 ~$800-$1000 $1299 $1359 $1039 $1509 headline fare** Average weekly wage $14-$16 $129 $953 $1454 $1634 $1925 (Australia)*** Relative
Slide 43: Well placed to capitalise on opportunities
OUT LOOK Well placed to capitalise on opportunities Long track record of growth • Diversified business with strong customer value propositions across brand portfolio – driving ongoing TTV growth • 37 years of record TTV in 42-year history (includes 4 covid-related misses from FY20-FY23) Leisure & co
Slide 44: Longer Term Priorities
OUT LOOK Longer Term Priorities Ongoing focus on delivering sustainable, long-term value. 1 TH E RI GH T PE OPLE O N THE BUS Positive, productive, motivated & incentivised/rewarded people workforce & culture with business P&L accountability & ownership 2 PRODU CT A great range of quality, curated &
Slide 45: Thank You
THANK YOU QUESTIONS 45 | FLT FLT’s board of directors has authorized this announcement
Slide 46: Five-year result summary
APPENDI X 1 Five-year result summary $'m FY24 FY23 FY22 FY21 FY20 TTV 23,744 21,939 10,340 3,945 15,303 Revenue margin 11.4% 10.4% 9.7% 10.0% 12.4% EBITDA 423 266 (200) (432) (594) EBITDA (underlying) 478 302 (183) (338) (407) PBT 220 70 (378) (602) (849) PBT (underlying) 320 139 (361) (507) (509) N
Slide 47: Bridge between statutory & underlying PBT
APPENDI X 2 Bridge between statutory & underlying PBT $'000 FY24 FY23 Restated* ADJUSTMENTS MADE TO UNDERLYING PBT INCLUDE: Net Profit Before Tax 219,708 70,459 • Buy-back & remeasurement of CBs – no further buy-backs during H2 but further activity likely in future SU impairment (non-cash), other re
Slide 48: Airfares finally starting to fall
APPENDI X 3 Airfares finally starting to fall 13% decrease in average international economy airfares sold in Australia during the FY24 2H (compared to PCP) 48 | FLT
Slide 49: Geographic & business segment results
APPENDI X 4 Geographic & business segment results LEISURE CORPORATE OTHER $m FY24 FY23 FY24 FY23 FY24 FY23 restated1 TTV 11,031 10,006 12,105 11,006 608 927 Revenue 1,352 1,121 1,112 978 247 182 Underlying PBT 188 92 211 146 (79) (100) Underlying EBITDA 281 172 249 190 (52) (60) Margins Revenue marg
Slide 50: A growth sector
APPENDI X 5 A growth sector Strong & consistent increases in Australian outbound departures & in air travel globally Source: Australian Bureau of Statistics © International Air Transport Association, 2019. IATA Economics' Chart of the Week, December 1, 2022. All Rights Reserved. Available on IATA Ec
Slide 51: Most corporate customers plan to increase or maintain business travel
APPENDI X 6 Most of our corporate customers plan to either increase or maintain their business travel activity in the next 12 months. 40% 35% 30% 25% 20% 15% 10% 5% 0% More than 20% 1-20% more About the same 1-20% less More than 20% less Don’t Know Overall 10% 30% 35% 8% 2% 14% CT 11% 35% 39% 8% 1%
Slide 52: Travel Intentions
TRAVEL INTENTIONS “Cool words to go here.” THE NEXT 12 MONTHS ― Wayne W. Dyer • 82% of travellers intend to take more than 1 domestic trip in the next 12 months (+7pts growth since Nov '23) • 89% intend to take an international trip in the next 12 months (+3pts since Nov '23) • 85% intend to spend t
Slide 53: Leisure & corporate TTV by geographical segment
APPENDI X 8 Leisure & corporate TTV by geographical segment 53 | FLT
Slide 54: Ongoing investment in sustainability
APPENDI X 9 Ongoing investment in sustainability Sustainability report produced & released late in year 2023. Work underway on FY24 edition. 54 | FLT
Slide 55: Glossary
APPENDI X 9 Glossary MoM Month-on-month ABS Australian Bureau of Statistics 1H First half NDC New Distribution Capability ABV Average booking value 1Q First quarter NPAT Net profit after tax AI Artificial intelligence EMEA Europe, Middle East & Africa PBT Profit before tax Avg Average FCB Flight Cen
Flight Centre Travel Group — FY2024 Earnings Presentation on 6ix