Edreams Odigeo · BME:EDR
Edreams Odigeo — BBVA Leverage Finance Day 2019
44 slides from Edreams Odigeo's conference presentation, Oct 8, 2019
Slide 1: Investor Presentation October 2019
INVESTOR PRESENTATION October 2019 “Revolutionize the online travel booking sector moving from transaction to subscription model through our unique subscription program Prime, which offers the ability to engage with the customer throughout the full travel journey” eDreams ODIGEO
Slide 2: Disclaimer
Disclaimer ▶ This presentation is to be read as an introduction to the audited consolidated financial statements of the Group and contains key information presented in a concise manner on the Group and its financial condition. The information contained in this presentations is extracted from the aud
Slide 3: Why eDreams ODIGEO
Why eDreams ODIGEO • Why eDreams ODIGEO • Strategy Update • Results FY19 • Results 1Q FY20 • Appendix
Slide 4: Travel is a highly attractive market in Europe & Globally
WHY EDREAMS ODIGEO – ATTRACTIVE MARKET Travel is a highly attractive market in Europe & Globally Large and growing $1.4T Global Travel Market Source: Statista, Phocushwright, European Online Travel Overview 2018 & Phocal Point 4
Slide 5: We are a leading player in Europe, unrivalled scale
WHY EDREAMS ODIGEO – WINNER IN EUROPE We are a leading player in Europe, unrivalled scale with Scale 2.2x more European flight revenue than the #2 player advantage European flight revenue Estimated, latest FY (€m) Long-tail of other OTAs (not-exhaustive) 421 1 2.2x c. 190 c. 150(a) c. 100 (a) Includ
Slide 6: eDreams ODIGEO is the leader in the European online leisure travel market
WHY EDREAMS ODIGEO – WINNER IN EUROPE eDreams ODIGEO is the leader in the European Scale advantage online leisure travel market # Market position Expansion Core European OTA flight market share 1 2 30% # 2 1 eDreams ODIGEO: the leading flights 1 2 retailer in Europe 2017 1 1 1 SOURCE: Internal analy
Slide 7: Customers book with us because we provide strong value and choice
WHY EDREAMS ODIGEO – WE PROVIDE STRONG VALUE AND CHOICE Customers book with us because we provide strong value and choice, in the most convenient way We make it <100 seconds for users to book a direct flight easiest to book 8 vs 3 We give They can >6,000 customers the customize every product feature
Slide 8: eDO Achievements over Past 4 Years
WHY EDREAMS ODIGEO – SIGNIFICANT ACHIEVEMENTS eDO Achievements over Past 4 Years Have set ourselves up for strong future growth Business Model Customer/Product Operational Financial Debt From transactional No.1 customer Complete transformation Adjusted EBITDA growth 37% reduction in relati
Slide 9: We have successfully deleveraged our business
WHY EDREAMS ODIGEO – SIGNIFICANT DELEVERAGE We have successfully deleveraged our business FY 2015 FY 2019 Change Gross Leverage Ratio 5.0x 3.7x -26% Net Leverage Ratio 3.7x 2.3x -38% Interest Expense (Pro-Forma) €38.5Mn €24.1Mn (*) -37% (*) March 2019 Pro-Forma interest expense post refinancing: 2H
Slide 10: Our top strategic priorities in FY20 and onwards
WHY EDREAMS ODIGEO – OUR VISION Our top strategic priorities in FY20 and onwards Moving from transaction to subscription model and engaging with the customer throughout the full travel journey 1 2 3 4 INNOVATIVE TRAVEL UNIQUE END TO END JOURNEY LEADING MOBILE & AI DIVERSIFY & GROW SUBSCRIPTION MODEL
Slide 11: eDO to revolutionize the Online Travel Booking sector
IN SUMMARY eDO to revolutionize the Online Travel Booking sector Moving from transaction to subscription model and engaging with the customer throughout the full travel journey FROM TO OUR GOAL Subscription model - Engaging with Leverage our leading market position Flight centric the customer throug
Slide 12: FY 2020 Outlook
OUTLOOK FY 2020 Outlook Outlook FY 2020 “Outlook Unchanged” Bookings We expect FY20 to be a much better year than FY19, but it will still not reflect all our underlying potential as we have major markets UP 4% to 7% vs FY19 with less than 12 months with the new revenue model. In 1Q, reflecting the s
Slide 13: Why eDreams ODIGEO?
Why 2 eDreams ODIGEO? 2 1 1 2 1 1 1 Winner in Europe 30% European OTA 30% Significant revenue diversification flight market share World leading capabilities SOURCE: Internal analysis; Amadeus bookings data; Phocuswright European Travel Overview 2018
Slide 14: Strategy Update
Strategy Update • Why eDreams ODIGEO • Strategy Update • Results FY19 • Results 1Q FY20 • Appendix
Slide 15: Our top strategic priorities in FY20 and onwards
OUR VISION Our top strategic priorities in FY20 and onwards Moving from transaction to subscription model and engaging with the customer throughout the full travel journey 1 2 3 4 INNOVATIVE TRAVEL UNIQUE END TO END JOURNEY LEADING MOBILE & AI DIVERSIFY & GROW SUBSCRIPTION MODEL MANAGEMENT 15
Slide 16: Successfully developed and tested subscription offering
INNOVATIVE TRAVEL SUBSCRIPTION MODEL Successfully developed and tested subscription offering 1 We have invested the past couple of years not just changing our price display but in fact testing and delivering a subscription based offering 16
Slide 17: Benefits of subscription
INNOVATIVE TRAVEL SUBSCRIPTION MODEL 21 Our innovative travel subscription model Unique across the industry Customer Company • Fly for the lowest prices • More stable revenue stream Benefits of subscription • Preferential customer • Priority customer service (24/7) relationship, access, involvement
Slide 18: Our subscription offering has had very favourable results
INNOVATIVE TRAVEL SUBSCRIPTION MODEL Our subscription offering has had very 21 favourable results Case Study: Italy 25% 2% 63% +25% +50% Share of Voluntary Renewal Net Promoter Share of App bookings churn rate Rate (*) Score (NPS) bookings (**) Prime in Italy Only 2% of 63% of NPS of Prime
Slide 19: Our subscription offering has lots of room for growth
INNOVATIVE TRAVEL SUBSCRIPTION MODEL 21 Our subscription offering has lots of room for growth Product · Continue to test and refine core proposition · Expand to other products and services Geography Continue to test and rollout product across geographies Customer segment Starting to test and develop
Slide 20: Enhancing relationship with customers throughout the full travel journey
UNIQUE END TO END JOURNEY MANEGEMENT 2 Enhancing relationship with customers throughout the full travel journey Our goal is to remove pain points and change the focus of the dialog away from the price 20
Slide 21: By building travel relationships with customers
UNIQUE END TO END JOURNEY MANAGMENT 2 By building travel relationships with customers We can better engage with customers pre and post booking We take care of all the customer Increase and optimize touchpoints Reduce customer time searching stress points Notifications Going beyond flight Customers h
Slide 22: eDO best positioned to fuel the mobile growth opportunity
LEADING MOBILE & ARTIFICIAL INTELLIGENCE eDO best positioned to fuel the mobile growth 3 2 opportunity Size of the mobile market expected to … and mobile bookings well ahead of continue growing at double digit rates industry average and expanding for the next 4 years Total European Mobile travel mar
Slide 23: Leveraging AI to drive superior customer experience
LEADING MOBILE & ARTIFICIAL INTELLIGENCE 3 2 Leveraging AI to drive superior customer experience: Example of personalized search results on mobile Deep learning models powering our sort order & driving personalization of search results page Increased convenience for customers to find their perfect t
Slide 24: A lot of untapped revenue diversification potential
DIVERSIFY & GROW 4 A lot of untapped revenue diversification potential Global Flight ancillaries market … strategic priorities to accelerate our growth and capitalize on market opportunity $93Bn Market Size Drive more Gross sales in 2018 Traffic & Bookings Improve the eDO around 2% market share Cust
Slide 25: We have successfully diversified our revenues in a very short period of time
DIVERSIFY & GROW We have successfully diversified our revenues in 4 a very short period of time FY 2015 FY 2019 CAGR Additional products sold per 100 flight 25 72 +30% bookings (*) Revenue margin €118Mn €237Mn +19% Share of company revenue from revenue diversification 27% 44% 5pp (*) Product Diversi
Slide 26: Results FY19
Results FY19 • Why eDreams ODIGEO • Strategy Update • Results FY19 • Results 1Q FY20 • Appendix
Slide 27: Overview
RESULTS FY19 - OVERVIEW Overview Solid results, strong Q4 as guided Financials Booking performance in line with updated guidance Revenue up 5% to €533.0 million in FY19, outperforming initial revenue guidance of €509 million Adjusted EBITDA growth of 1% to €119.6 million in FY19, outperforming
Slide 28: Revenue diversification on track and the largest contributor to Revenues
RESULTS FY19 - KPIS Revenue diversification on track and the largest contributor to Revenues Revenue diversification ratio Revenue evolution +17pp 44% FY19 35% FY18 27% 5% 5% 15% 14% 35% FY15 FY18 FY19 44% Product diversification ratio +47pp 37% 72% 45% 56% 25% Diversification Classic Supplier Class
Slide 29: Continued strategic progress as evidenced by our KPIs
RESULTS FY19 - KPIS Continued strategic progress as evidenced by our KPIs Mobile bookings as share of flight bookings Acquisition cost per booking index +21pp 39% 34% 100 -19 percentage points 18% 80 81 FY15 FY18 FY19 Customer repeat booking rate (Annualised)** +4p 59% 51% 55% FY15 FY18 FY19 FY15 FY
Slide 30: Income Statement Highlights FY19
RESULTS FY19 – P&L Income Statement Highlights FY19 ▪ Revenue Margin increased by 5%, principally due to an 4Q FY19 4Q FY18 Var. FY19 FY18 Var. increase in Revenue Margin per booking of 10%. (In € million) 151.4 140.2 8% 533.0 508.6 5% ▪ Variable costs grew 8%, as a result of higher acquisition Reve
Slide 31: Cash Flow Statement Highlights FY19
RESULTS FY19 – CASH FLOW Cash Flow Statement Highlights FY19 4Q FY19 4Q FY18 FY19 FY18 ▪ Net cash from operating activities decreased by €32.7 (In € million) million, mainly reflecting: Adjusted EBITDA 40.4 29.6 119.6 118.3 – In 4Q, the better inflow in working capital is due to Non recurring items
Slide 32: Debt
RESULTS FY9 - DEBT Debt Gross Leverage Ratio (*) (Total Gross Financial Debt / LTM Adjusted EBITDA ) ▪ Successful refinancing in September led to a reduction of our debt coupon by 300 basis points, a €12.7 million saving in annual 7 interest, and a significant improvement in future Free Cash Flow 6
Slide 33: Results 1Q FY20
Results 1Q FY20 • Why eDreams ODIGEO • Strategy Update • Results FY19 • Results 1Q FY20 • Appendix
Slide 34: Overview
RESULTS 1Q FY20 - OVERVIEW Overview Solid results, 1Q as guided Performance in line with guidance o Bookings 2.9 million in Q1 FY20, (-1% year-on-year), in line with strategic revenue model shift and guidance o Revenue up 5% to €141.5 million in 1Q FY20 o Adjusted EBITDA growth of 8% to €28.1 millio
Slide 35: Revenue diversification on track and the largest contributor to Revenues
RESULTS 1Q FY20 - KPIS Revenue diversification on track and the largest contributor to Revenues Revenue diversification ratio (**) +8pp Revenue evolution (**) 46% 38% 1Q FY19 1Q FY20 31% 5% 5% 15% 14% 38% 1Q FY18 1Q FY19 1Q FY20 46% Product diversification ratio +16pp 35% 76% 42% 60% 47% Diversifica
Slide 36: Continued strategic progress as evidenced by our KPIs
RESULTS 1Q FY20 - KPIS Continued strategic progress as evidenced by our KPIs Mobile bookings as share of flight bookings (**) +4pp Acquisition cost per booking index 36% 40% 32% 100 -19 percentage points 82 81 1Q FY18 1Q FY19 1Q FY20 Customer repeat booking rate (Annualised)(***) +3pp 48% 47% 50% 1Q
Slide 37: Income Statement Highlights 1Q FY20
RESULTS 1Q FY20 – P&L Income Statement Highlights 1Q FY20 ▪ Revenue Margin increased by 5%, principally due to an increase in 1Q FY20 1Q FY19 Var. Revenue Margin per booking of 7%. (In € million) ▪ Variable costs grew 4%, as a result of higher merchant costs due Revenue margin 141.5 134.6 5% to stro
Slide 38: Cash Flow Statement Highlights 1Q FY20
RESULTS 1Q FY20 – CASH FLOW Cash Flow Statement Highlights 1Q FY20 1Q FY20 1Q FY19 ▪ Net cash from operating activities increased by €35.1 million, (In € million) mainly reflecting: Adjusted EBITDA (*) 28.1 26.1 – In 1Q, the lower outflow in working capital is due to higher Non recurring items (8.7)
Slide 39: Debt
RESULTS 1Q FY20 – DEBT Debt Gross Leverage Ratio (*) (Total Gross Financial Debt / LTM Adjusted EBITDA ) ▪ Benefits from the refinancing coming through. Financial loss 7 decreased by 31% compared to the same period last year, a 6 reduction of €3.3 million in financial expenses, as a result of our x
Slide 40: Appendix
Appendix • Overview • Industry Outlook • Strategy Update • Results FY19 • Outlook • Appendix
Slide 41: Revenue diversification drives growth in the Rest of the World markets
RESULTS FY9 – BY GEOGRAPHIE Revenue diversification drives growth in the Rest of the World markets, 21% CAGR over the past 4 years 41 (*) Definitions of Non-GAAP measures on page 37-39
Slide 42: Diversification Revenue is already 20% larger than our Classic Customer Revenue
RESULTS FY9 – BY PRODUCT Diversification Revenue is already 20% larger than our Classic Customer Revenue 42 (*) Definitions of Non-GAAP measures on page 37-39
Slide 43: What will drive Q4 growth rates?
What will drive Q4 growth rates? Volume affected by transition to new price display in majority of our business Bookings (% Year on Year growth) DRIVERS +6% -4 to o Since FY18 the proportion of our +1% +1% -6% +1% -5% -5% -11% business migrated to the new price 1Q '18 2Q '18 3Q '18 4Q '18 1Q '19 2Q
Slide 44: eDreams ODIGEO
eDreams ODIGEO