Edreams Odigeo · BME:EDR
Edreams Odigeo — FY2018 Earnings Presentation
52 slides from Edreams Odigeo's earnings presentation, Jun 27, 2018
Slide 1: Full Year Results
Full Year Results Fiscal Year 2018 FY Results, ending March 31st 2018 June 27th 2018
Slide 2: Disclaimer
FY 2018 Results Presentation 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 presentati
Slide 3: Full Year Results Highlights
Full Year Results Highlights • Full Year Results Highlights • Financial Analysis • Strategy Update (Part 1) • KPIs • Strategy Update & Outlook (Part 2) • Appendix
Slide 4: Results Highlights
FY 2018 Results Presentation HIGHLIGHTS RESULTS HIGHLIGHTS Increased guidance achieved for FY18: Bookings, Revenue Margin and Adjusted EBITDA 14 Consecutive quarters meeting or exceeding guidance Change in revenue model and diversification on track Positive results visible on KPIs Strong cash flow a
Slide 5: Solid results, above initial and raised guidance
FY 2018 Results Presentation HIGHLIGHTS SOLID RESULTS, results above initial and raised guidance Bookings +3% Revenue Margin Adjusted EBITDA In thousands In € million In € million +1% +5% +10% +9% 11.653 11.740 +5% 508,6 +12% 118,3 463,3 486,6 107,3 10.675 95,8 FY 2016 FY 2017 FY 2018 FY 2016 FY 201
Slide 6: Strategy delivering good growth in Adjusted EBITDA
FY 2018 Results Presentation HIGHLIGHTS STRATEGY DELIVERING GOOD GROWTH IN ADJUSTED EBITDA Adjusted EBITDA evolution YoY variation +12% 15% Change in Management +12% 10% CAGR 15-18 10% +6% 5% 0% +7% Bookings -5% -10% -15% % Growth normalised for no bonus payment FY 2015. 100% accrual in FY 2016 +5%
Slide 7: Financial Analysis
Financial Analysis • Full Year Results Highlights • Financial Analysis • Strategy Update (Part 1) • KPIs • Strategy Update & Outlook (Part 2) • Appendix 7
Slide 8: Income Statement
FY 2018 Results Presentation FINANCIAL ANALYSIS INCOME STATEMENT Key highlights FY 2018 Var. Var. FY 2018 FY 2017 FY 2016 (In € million) 18 vs 17 17 vs 16 ▪ Revenue margin up 5% ▪ Variable Costs grew 4%, driven by increase in bookings and Revenue margin 508.6 5% 486.6 5% 463.3 combined with the vari
Slide 9: Cash Flow Statement
FY 2018 Results Presentation FINANCIAL ANALYSIS CASH FLOW STATEMENT Key highlights FY 2018 FY 2018 FY 2017 FY 2016 In FY 2018, main YoY evolutions reflect: (In € million) ▪ Cash flow from operations decreased by €25.9 million: Adjusted EBITDA 118.3 107.3 95.8 – The inflow of €7.6 million in the curr
Slide 10: Debt
FY 2018 Results Presentation FINANCIAL ANALYSIS Debt ▪ Gross Leverage ratio was down to 3.6 in March 2018 vs 4.0 Gross Leverage Ratio (*) in March 2017, which gives us ample headroom vs our (Total Gross Financial Debt / LTM Adjusted EBITDA ) covenant ratio. 7 6 x LTM Adj. EBITDA ▪ Due to higher adju
Slide 11: Strategy Update (Part 1)
Strategy Update (Part 1) • Full Year Results Highlights • Financial Analysis • Strategy Update (Part 1) • KPIs • Strategy Update & Outlook (Part 2) • Appendix 11
Slide 12: Our market continues to be a good market from a macro perspective
FY 2018 Results Presentation STRATEGY UPDATE – INDUSTRY REMAINS ATTRACTIVE Our market continues to be a good market from a macro Macro perspective Perspective Improved macro environment creates an …as well as greater continuous shift from attractive environment for OTAs… offline to online travel Pas
Slide 13: We are a leading player in Europe, unrivalled scale advantage
FY 2018 Results Presentation STRATEGY UPDATE - WHO WE ARE AND WHAT WE HAVE ACHIEVED Scale We are a leading player in Europe, unrivalled scale advantage European flight revenue Estimated, latest FY (€m) Long-tail of other OTAs (not-exhaustive) 339 c. 190 c. 1501 c. 100 1 Including acquisition of eTra
Slide 14: eDreams ODIGEO is the leader in the European online leisure travel market
FY 2018 Results Presentation STRATEGY UPDATE - WHO WE ARE AND WHAT WE HAVE ACHIEVED eDreams ODIGEO is the leader in the European online leisure travel Scale market advantage # Market position Expansion Core European OTA flight market share 1 2 30% # 2 1 eDreams ODIGEO: the leading flights 1 2 retail
Slide 15: Scale means we are best placed to serve the mobile travel customer
FY 2018 Results Presentation STRATEGY UPDATE - WHO WE ARE AND WHAT WE HAVE ACHIEVED This scale means we are best placed to serve the mobile travel Scale customer advantage IT Mobile developer capability comparison, European OTAs FTE Dedicated mobile 400+ ~70 ~60 ~50 ~40 ~30 ~20 ~20 ~40 OTA A OTA B O
Slide 16: Scale balanced by agility to execute on ideas rapidly
FY 2018 Results Presentation STRATEGY UPDATE - WHO WE ARE AND WHAT WE HAVE ACHIEVED Our scale is balanced by a high level of agility to execute on ideas Scale rapidly and cost efficient advantage 1,100 15 A/B 50 6,177 minutes tests agile teams Features Users participating in Best case delivery +330%
Slide 17: Our technology has significant scale
FY 2018 Results Presentation STRATEGY UPDATE - WHO WE ARE AND WHAT WE HAVE ACHIEVED Overall our technology has significant scale and allows us to offer Scale customers the best experience advantage 1 billion monthly searches 120,000 peak searches per second 80 million supplier searches per day > 530
Slide 18: We have market-leading customer service
FY 2018 Results Presentation STRATEGY UPDATE - WHO WE ARE AND WHAT WE HAVE ACHIEVED We have market-leading customer service Best service Award-winning customer service 24/7 round the clock Customer service customer service 1 recognized as better 2 3 than competition 4 Trustpilot score ranking 5 6 Eb
Slide 19: Mobile is gaining share and we are better positioned than anybody else
FY 2018 Results Presentation STRATEGY UPDATE - MOBILE Mobile is gaining share progressively in the market and we are better positioned than anybody else in that market Mobile bookings continue to grow Mobile First approach with the leading mobile app Mobile bookings for flights iOS App Review with R
Slide 20: KPIs
KPIs • Full Year Results Highlights • Financial Analysis • Strategy Update (Part 1) • KPIs • Strategy Update & Outlook (Part 2) • Appendix 20
Slide 21: Successfully executing on our strategy, progress on our 5 KPIs
FY 2018 Results Presentation KPIS We are successfully executing on our strategy, as evidenced by progress on our 5 KPIs Revenue diversification ratio Product diversification ratio Customer repeat booking rate; Annualised view 35% 56% 59% 30% 45% 56% 27% 39% 50% Q4 '16 Q4 '17 Q4 '18 Q4 '16 Q4 '17 Q4
Slide 22: Strategy Update and Outlook (Part 2)
Strategy Update and Outlook (Part 2) • Full Year Results Highlights • Financial Analysis • Strategy Update (Part 1) • KPIs • Strategy Update & Outlook (Part 2) • Appendix 22
Slide 23: Why we see value in the change in the revenue model and diversification
STRATEGY UPDATE Why we see value in the change in the revenue model and diversification? Because we are responding to evolving customer needs and preferences 36% see transparency as a key decision factor Clear and 1 transparent pricing 53% abandon booking upon seeing final price Rest of market 2 Acc
Slide 24: Step 1 of the transformation: change in the way we price
FY 2018 Results Presentation STRATEGY UPDATE – CHANGE IN REVENUE MODEL Step 1 of the transformation, the shift in the revenue via change in the way we price? How this impacts P&L initially and overtime? What it 1 Change in pricing model Step 1 - Search Step 2 – Purchase means? First Price Final Pric
Slide 25: Countries in 1 of 3 phases in the revenue model change
FY 2018 Results Presentation STRATEGY UPDATE – CHANGE IN REVENUE MODEL Our results are a mixture of our countries/markets, each of which are in 1 of 3 phases in our change of the revenue model. What it means for countries to be in Phase 0, 1 or 2 of the shift in the revenue model Effects Phase 0 Pha
Slide 26: Results are a blend of phase 0, 1, and 2
STRATEGY UPDATE – CHANGE IN REVENUE MODEL Our results are a blend of phase 0, 1, and 2 with Phase 2 showing very good results FY 2018 Year on Year Change Bookings Revenue Margin Marginal Profit (*) Mobile Bookings (**) 48% 50% 31% 33% 21% 16% 15% 13% 5% -11% -16% -20% P0 P1 P2 Group results +1% +5%
Slide 27: Price transparency improved customer experience and satisfaction
STRATEGY UPDATE – CHANGE IN REVENUE MODEL Changes in Price Display towards more price transparency improved customer experience leading to higher customer satisfaction When moved towards more transparent Pricing Display… … contacts per bookings related to …detractors complained less about …consequen
Slide 28: FY2019 investment in acceleration of the shift in revenue model
STRATEGY UPDATE – OUTLOOK FY 2019 In FY 2019 we plan to invest in the acceleration of the shift in the revenue model Evolution of Q1 FY17 Bookings breakdown (*) % over total Acceleration of the shift 5% in the revenue model (**) 11% 16% 62% 36% 31% On average pushed into 84% 47% P1+P2 in FY19 53% 17
Slide 29: Outlook: we expect flat EBITDA
STRATEGY UPDATE – OUTLOOK FY 2019 As a result of the acceleration in the shift in the revenue model, we expect flat EBITDA % Push to P1+P2 Revenue Margin Bookings Adjusted EBITDA % Change (Bookings) FY 2017 16% +9 % +5 % +12 % FY 2018 31% +1 % +5 % +10 % Bookings Revenue Margin Adjusted EBITDA OUTLO
Slide 30: Revenue diversification: why we see value
STRATEGY UPDATE – REVENUE DIVERSIFICATION Step 2 of the transformation, revenue diversification and why we see value on doing it? Rest of market 2 Access to a wide range 65% want to buy on a single online platform of products and services with ease 2.4x increased spend at ‘one-stop shop’ SOURCE: Fut
Slide 31: Ambitious plan to expand through additional revenue sources
FY 2018 Results Presentation STRATEGY UPDATE – REVENUE DIVERSIFICATION We have an ambitious plan to expand the business through additional revenue sources eDreams is well placed to achieve our ambition eDreams is the European leader in flights, generating significant flight traffic and booking volum
Slide 32: Capture growth in fast growing markets
STRATEGY UPDATE – REVENUE DIVERSIFICATION REVENUE DIVERSIFICATION – Capture growth on some fast growing markets Flight ancillaries market We focus on growing Dynamic Packages as well as some key Flight ancillary products 80b€ Dynamic packages Gross sales in 2017 +22% Versus 2016 Bags ancillaries SOU
Slide 33: Dynamic packages: Case study
STRATEGY UPDATE – REVENUE DIVERSIFICATION Dynamic packages: Case study Dynamic Packages: Evolution to date and our competitive advantage Initiatives in place to achieve growth What we have achieved to date Access ▪ DP available in the app ▪ DP grew 10x faster than flight ▪ Important increase in tele
Slide 34: Flight Ancillaries: Bags case study
STRATEGY UPDATE – REVENUE DIVERSIFICATION Flight Ancillaries: Bags case study Bags: Evolution to date and our competitive advantage What we have achieved to date ▪ Now have added +70% more bags development capacity since September ▪ With our new resources, we tripled the number of A/B tests in the s
Slide 35: Flight Ancillaries: Seats case study
STRATEGY UPDATE – REVENUE DIVERSIFICATION Flight Ancillaries: Seats case study Seats: Evolution to date and our competitive advantage What we have achieved to date ▪ Over 80% Growth in attachment rate in H2 ▪ Created a full team of developers dedicated to seats ▪ Over 50 usability A/B tests launched
Slide 36: Cars case study
STRATEGY UPDATE – REVENUE DIVERSIFICATION Cars case study Cars: Evolution to date and our competitive advantage Initiatives in place to achieve growth in plan What we have achieved to Access date ▪ Testing in-flight funnel ▪ Delivering double-digit ▪ Landing page focus to increase growth 3 years in
Slide 37: Positive revenue diversification reflected on KPIs and growth rates
STRATEGY UPDATE – REVENUE DIVERSIFICATION In summary, positive revenue diversification reflected on KPIs and revenue growth rates on both ancillaries products and dynamic packages Results are visible on our KIPs and results over the past 3 years …with future growth coming from Flight Ancillaries and
Slide 38: In summary
FY 2018 Results Presentation In summary… World-class product Customer value Growing market Industry structure and technology Mobile leader Scale Market leadership Investment Results 38
Slide 39: eDreams ODIGEO
eDreams ODIGEO eDreams ODIGEO
Slide 40: Appendix
Appendix • Full Year Results Highlights • Financial Analysis • Strategy Update (Part 1) • KPIs • Strategy Update & Outlook (Part 2) • Appendix 40
Slide 41: Flight and non-flight bookings
FY 2018 Results Presentation APPENDIX FLIGHT AND NON-FLIGHT BOOKINGS Revenue diversification drives growth in Flight Business Flight Flight - Bookings +3% In ‘000 ▪ As guided to the market, 12M result was driven by: – Accelerated investment in the evolution in the change of our revenue model, and 10
Slide 42: Flight and non-flight revenue margin
FY 2018 Results Presentation APPENDIX FLIGHT AND NON-FLIGHT REVENUE MARGIN Revenue diversification drives growth in Flight and Non-Flight Business Flight – Revenue Margin Flight In € million ▪ In 12M FY 2018, revenue margin performance driven by: 405,5 – Bookings, already explained in previous slide
Slide 43: Core and expansion bookings
FY 2018 Results Presentation APPENDIX CORE AND EXPANSION BOOKINGS Revenue diversification drives growth in the Expansion Markets Core- Bookings Core In ‘000 ▪ In 12M FY 2018, strategic initiatives on track and delivering the desired result, as guided to the market at our full year and 9M results pre
Slide 44: Core and expansion revenue margin
FY 2018 Results Presentation APPENDIX CORE AND EXPANSION REVENUE MARGIN Positive growth in our Core and Expansion markets Core – Revenue Margin Core In € million ▪ In 12M FY 2018, revenue margin performance driven by: 255,1 270,1 263,2 – Bookings, already explained in previous slide. – Improvements
Slide 45: Q4 FY 2018 - Flight and non-flight
FY 2018 Results Presentation APPENDIX Flight Q4 FY 2018 - FLIGHT AND NON-FLIGHT Non-Flight Strategic initiatives on track and delivering results Bookings Flight In ‘000 ▪ Progress in strategic initiatives has boosted our performance and 3.069 positioned us well for longer term growth 2.938 ▪ Revenue
Slide 46: Q4 FY 2018 - Core and expansion
FY 2018 Results Presentation APPENDIX Core Q4 FY 2018 – CORE AND EXPANSION Expansion Solid Performance in Core and Expansion Markets Bookings Core In ‘000 ▪ Strategic initiatives on track and delivering results, bookings performance 1.579 1.599 1.748 driven by: 1.570 – Our diversification strategy –
Slide 47: Quarterly income & cash flow statement
FY 2018 Results Presentation APPENDIX QUARTERLY INCOME & CASH FLOW STATEMENT Income Statement Cash Flow Statement 3M Mar 3M Mar 3M Mar 3M Mar FY17 FY18 Var. (In € million) FY17 FY18 (In € million) Adjusted EBITDA 31.5 29.6 Revenue margin 136.9 140.2 2% Non recurring items (2.4) (3.0) Variable costs
Slide 48: Product diversification - new formula
FY 2018 Results Presentation APPENDIX Product diversification – New Formula - Increasing ability to add value to customers, booking with more attachments NEW Product diversification ratio Product Diversification Ratio (PDR) NEW - Bookings with a Ground Transportation + 55% 56% NEW - Bookings with a
Slide 49: New Product Diversification Ratio (back up)
FY 2018 Results Presentation APPENDIX New Product Diversification Ratio (back up) Differences only visible in FY18 when new products were launched, in FY18 the delta between old and new formula is only 1 percentage point or less 55% 56% 51% 52% 49% 47% 48% 44% 44% 44% 45% 45% 46% 43% 42% 42% 39% 39%
Slide 50: Glossary of Definitions
FY 2018 Results Presentation Glossary of Definitions Non-reconcilable to GAAP measures "Acquisition Cost per Booking Index" refers to the most relevant marketing expenses incurred to acquire new customers (encompassing Paid search, Metasearch and Affiliates), divided by the total number of Booking
Slide 51: Glossary of Definitions
FY 2018 Results Presentation Glossary of Definitions Other Defined Terms “Bookings” refers to the number of transactions under the agency model and the principal model as well as transactions made under white label arrangements. One Booking can encompass one or more products and one or more passen
Slide 52: Glossary of Definitions
FY 2018 Results Presentation Glossary of Definitions Other defined terms Classic Customer Revenue represents customer revenue other than Diversification Revenues earned through flight service fees, cancellation and modification fees, tax refunds and mobile application revenue. Our management belie