Hostelworld Group Plc · LSE:HSW
Hostelworld — H1 2023 Earnings Presentation
27 slides from Hostelworld's earnings presentation, Aug 10, 2023
Slide 1: 2023 Interim Results
2023 Interim Results 10 August 2023 th
Slide 2: Disclaimers
Disclaimers NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO ANY JURISDICTION IN WHICH SUCH DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. This presentation has been prepared by Hostelworld Group plc (the “Company") for informational and background purposes only. The foll
Slide 3: Highlights
Highlights
Slide 4: H1'23 – Financial Summary
H1’23 – Financial Summary €340M €45.8M 3.4M Net GMV1 Net Revenue2 Net Bookings +57% vs H1’22 +64% vs H1’22 +64% vs H1’22 €15.15 12.3M 51% Net ABV3 Net Bednights Marketing as % of -4% vs H1’22 +53% vs H1’22 Revenue H1’22: 60% €5.1M €10.7M €16.2M EBITDA Cash Net Debt4 H1’22: -€5.2M Dec ‘22: €19.0M Dec
Slide 5: Key Highlights
Key Highlights Strong financial delivery in H1’23: ● Record first half net GMV1 and generated revenue2 ● Robust bookings growth across all regions…. Central America, South Asia and Southern European countries ahead of pre Covid levels ● Improved marketing efficiency powered by social strategy ● Incr
Slide 6: H1'23 Results
H1’23 Results
Slide 7: Largest H1 on record
Largest H1 on record Net GMV1 Generated Revenue2 Net Bookings3 €m €m m 4 400 60 350 +57% 50 +57% +64% 3 300 40 250 200 30 2 340 51.5 3.4 150 20 216 32.8 1 2.1 100 10 50 0 0 0 H1’22 H1’23 H1’22 H1’23 H1’22 H1’23 1. Net GMV is GMV (Gross transaction value of bookings on our platform) less cancellation
Slide 8: Strong growth across all regions
Strong growth across all regions Generated Revenue1 and Net bookings by region YoY USA & Canada Western Europe Eastern Europe North Asia 9% 11% 38% 26% 60% 43% 1659%1009% Generated Net Generated Net Generated Net Generated Net Revenue Bookings Revenue Bookings Revenue Bookings Revenue Bookings Globa
Slide 9: Net margin growth driven by volume and marketing efficiency
Net margin growth driven by volume and marketing efficiency €m Strong net margin1 growth driven by: 2.8 - 1.0 20.0 - 0.8 • Net booking volume +64% vs. H1’22 (+1.3m) 9.6 • Marketing2 efficiency driven by ‘Social’ 15.0 strategy (51% H1’23, 60% H1’22) Partially offset by: • ABV -4% vs. H1’22 (-€0.67),
Slide 10: Increasing operating leverage through opex discipline
Increasing operating leverage through opex discipline €m 45% 36% H1’23 operating costs1, 8% lower than H1’19, 28% Opex as % of 13.9 Net Revenue continued cost rationalisation programme 14.0 12.6 12.8 • Reduced technology & product costs, benefit of 12.0 cloud hosted platform and modernised tech stac
Slide 11: Resulting in strong H1'23 EBITDA performance
… resulting in strong H1’23 EBITDA performance €m 8.0 Reiterating full year guidance 2.8 6.0 • Strong performance across all regions, particularly in key European, -0.8 -0.2 Asian and Oceania markets 4.0 8.6 • App-centric social strategy driving 5.1 marketing efficiency 2.0 • €10.3m growth in EBITDA
Slide 12: Strong cash generation enabling balance sheet deleverage
… strong cash generation enabling balance sheet deleverage €m 30.0 8.4 Debt refinance completed in H1-23, on very favourable terms • Replaced legacy €30m debt at 9% over 20.0 19.0 EURIBOR with new €17.5m facility at an initial rate of 3.75% over EURIBOR (May’23) 17.4 10.7 • Net Debt to adj. EBITDA i
Slide 13: ESG is at the core of our culture and our category
ESG is at the core of our culture and our category Environmental Social Governance ● ‘Sustainability Stories’ ● Launch of external mentoring ● Climate neutral company: strict showcasing community & programme with IMI management of scope 1, 2 & 3 environmental initiatives carbon emissions ● Further e
Slide 14: Strategy Update
Strategy Update
Slide 15: Category & Social strategy driving strong growth
Category & Social strategy driving strong growth (excludes impact of delisting hostels in Russia and Belarus in March 2022) Total bednights, H1’22 vs H1’23 millions +53% YoY ~ +34% YoY ● Strong growth across all regions, driven in part by resumption of ~ +14% YoY1 cross border travel post Omicron 12
Slide 16: Our Mission
Our Mission Help travellers find people to hang out with
Slide 17: Our pioneering social network is the cornerstone of our strategy
Our pioneering social network is the cornerstone of our strategy Revenue Growth ● New customer growth Unique customer need led growth strategy ● Strong retention rates Margin Growth X EBITDA/FCF ● Reduces CAC App centric Increased ● Lower marketing cost as a % EBITDA growth delivery model of net rev
Slide 18: Strategy continues to attract and retain high value customers
Strategy continues to attract and retain high value customers Social Members make 2.3x the … and are 3.1x more likely to make their …and account for over 50% of our bookings over the first 91 days bookings via the App … total bookings compared to non members … 60% 2.3x 3.7 3.1x 53% 50% 52% 54% 54% 5
Slide 19: Driving strong growth in recurring revenue YoY
Driving strong growth in recurring revenue YoY H1 Net Generated Revenue, millions, segmented by customer by year of acquisition €60 New customer revenue Return customer revenue €50 2023 2022 €40 2021 2020 2019 €30 2018 2017 2016 €20 2015 2014 2013 €10 pre-2013 €0 2013 2014 2015 2016 2017 2018 2019 2
Slide 20: Richer profiles, richer messaging features, greater engagement
Richer profiles, richer messaging features, greater engagement Monthly message sent volume (indexed to January 2023) 3.0 2.5 2.6x 2.4x 2.0 1.9x 1.5 1.4x 1.3x 1.0 1.1x 1.0x 0.5 0.0 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 2023 INTERIMS AUG 2023 | 20
Slide 21: LinkUps provide even more opportunities to find people to hang out with
LinkUps provide even more opportunities for our customers to find people to hang out with Percentage of Social members who can join at least 1 LinkUp in trip 60% 54% 50% 40% 30% 20% 10% 7% 2% 2% 2% 3% 4% 0% Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 2023 INTERIMS AUG 2023 | 21
Slide 22: Near Term Guidance
Near Term Guidance H1 2023 FY 2023 Results Guidance Net Bookings 3.4m Net GMV €340m ~ 30% vs FY 2022 Net Revenue €45.8m Marketing % of Revenue 51% 50% - 55% Adj. EBITDA €5.1m €16.5M-€17.0M 2023 INTERIMS AUG 2023 | 22
Slide 23: Well positioned, well financed and on track for FY 2023
Well positioned, well financed and on track for FY 2023 Well positioned… ● ‘Social’ strategy is uniquely positioned to win in this category vs. other OTAs ● HW growth driven by category, resumption of cross border travel post Omicron & share gains Well financed… ● Debt refinancing completed with mat
Slide 24: Appendices
Appendices
Slide 25: Balance Sheet
Balance Sheet H1’23 H1’22 €’m €’m Intangible assets 69.5 76.4 Property, plant and equipment 1.0 1.0 Deferred tax assets 8.9 8.8 Investment in associate 1.1 1.2 ● Intangible assets primarily relates to Hostelworld brandname and IP. Cash and cash equivalents 0.8 0.8 Decrease YoY relates to amoritisati
Slide 26: Income Statement
Income Statement H1’23 H1’22 €’m €’m Revenue 45.8 28.0 Net revenue increased to €45.8m (H1’22: €28.0m) Administrative expenses (41.7) (34.8) Depreciation and amortization expenses (5.8) (5.7) 3.4m net bookings (H1’22: 2.1m) with strong demand in Europe and strong recovery in Oceania and Asia; Centra
Slide 27: Cash Flow Statement
Cash Flow Statement H1’23 H1’22 €’m €’m Adjusted EBITDA1 5.1 (5.2) Working capital movement 7.8 7.0 Improved adjusted free cash conversion - increased operating leverage Capitalisation and acquisition of intangible assets (1.4) (2.3) Adjusted EBITDA €5.1m, improvement year-over-year driven by recove