Helloworld Travel Ltd · ASX:HLO
Helloworld Travel — Helloworld — H1 2017 Earnings Presentation
29 slides from Helloworld Travel's earnings presentation, February 2017
Slide 1: Helloworld Limited
Halloworld Limited CEO Andrew Burnes CFO Michael Burnett
Slide 2: Disclaimer
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 fairne
Slide 3: Agenda
Agenda 1. Overview 2. Financial Performance 3. Business Focus and Priorities 4. Appendix 1H17 Investor Presentation • PAGE 3 Helloworld Limited
Slide 4: 1H17 Key Highlights
1H17 Key Highlights Reported Pro-forma including • Significant turnaround compared with prior half year AOT in pcp EBITDA $22.0m above prior comparative half year on reported basis and $10.2m above prior comparative half year 5% on on pro-forma basis. TTV 2% on 1H16 Net profit after tax increase
Slide 5: Financial Performance
Financial Performance 1H17 Investor Presentation • PAGE 5 Helloworld Limited
Slide 6: Group Half Year Result
Group Half Year Result 1H16 • $2.7 billion TTV despite challenging market conditions. 1H17 1H16 Change Pro- Change • TTV impacted by lower airfare prices and relaunch of Forma Helloworld.com.au $m $m % $m % Total Transaction Value (TTV) 2,661.9 2,606.0 2.1% 2,810.2 (5.3%) • Air Ticketing volumes inc
Slide 7: Significant one-off items
Significant one-off items 1H17 1H16 $m $m Prior comparative half year includes significant items AOT merger costs - 2.1 for: • AOT acquisition costs from merger incurred by Redundancy costs 0.2 0.8 Helloworld. Business transformation - 0.4 • Business transformation cost mainly reflecting NZ store re
Slide 8: Group EBITDA – 1H17
Group EBITDA – 1H17 1H17 Investor Presentation • PAGE 8 Helloworld Limited
Slide 9: Retail Franchise Operations
Retail Franchise Operations • TTV and revenue decline caused by 1H17 1H16 Change Lower domestic (-4%) and international (-12%) $m $m % airfares, however overall transaction volumes increased by 19% and gross revenue margin Total Transaction Value (TTV) 2,019.3 2,123.1 (4.9%) maintained. Relaunch
Slide 10: Retail Franchise Operations - EBITDA 1H17
Retail Franchise Operations - EBITDA 1H17 1H17 Investor Presentation • PAGE 10 Helloworld Limited
Slide 11: Growth in member networks and numbers
Growth in member networks and numbers BRANDED INDEPENDENT AUSTRALIA & NEW ZEALAND AUSTRALIA & NEW ZEALAND BRANDED MODEL CORPORATE MODEL ASSOCIATE MODEL INDEPENDENT MODEL TRAVEL BROKERS MODEL TOTAL DEC 16: 329 DEC 16: 73 DEC 16: 317 DEC 16: 891 DEC 16: 439 DEC 16: 2,049 JUN 16: 334 JUN 16: 73 JUN 16:
Slide 12: Wholesale/Inbound
Wholesale/Inbound 1H16 1H17 1H16 Change Pro- Change Forma • Significant contribution from AOT business $m $m % $m % • Revenue growth driven by focus on margin expansion with strong performance in international Total Transaction Value (TTV) 504.0 314.8 60.1% 519.0 (2.9%) and cruise divisions. Revenue
Slide 13: Wholesale/Inbound - EBITDA 1H17
Wholesale/Inbound - EBITDA 1H17 1H17 Investor Presentation • PAGE 13 Helloworld Limited
Slide 14: Travel Management
Travel Management 1H17 1H16 Change $m $m % • TTV and revenue growth being driven by new business from the Northern Territory government Total Transaction Value (TTV) 392.9 369.9 6.2% and PricewaterhouseCoopers Revenue 25.9 23.4 10.7% • Growth in margin due to renegotiation of existing commercial arr
Slide 15: Travel Management - EBITDA 1H17
Travel Management - EBITDA 1H17 1H17 Investor Presentation • PAGE 15 Helloworld Limited
Slide 16: Shared Services Costs
Shared Services Costs 1H16 1H17 1H16 Change Pro- Change Forma • Significant progress on integration benefits with $m $m % $m % AOT being reflected in results. Revenue 1.7 1.6 6.2% 1.6 6.2% • Net costs have increased due to the inclusion of AOT. Operating expenses (17.4) (15.1) (15.2%) (20.9) 16.7% •
Slide 17: Shared Services – Net Costs 1H17
Shared Services – Net Costs 1H17 1H17 Investor Presentation • PAGE 17 Helloworld Limited
Slide 18: EBITDA to NPAT reconciliation
EBITDA to NPAT reconciliation 1H16 Pro- 1H17 1H16 Forma • Depreciation/amortisation increase from $m $m $m completed projects (Resworld/Helloworld EBITDA 30.1 8.1 19.9 online) now delivering revenue. Depreciation/amortisation (10.0) (7.6) (9.0) • Actual capital expenditure for half year at Finance c
Slide 19: Liquidity and Funding
Liquidity and Funding Dec 16 Jun 16 Dec 15 • $17m of debt repaid during the period. $m $m $m • Successful new share issue of 7.0m shares at Company cash 34.0 26.2 20.7 $4.25 per share. Client cash 132.5 176.4 119.4 • Total cash decrease reflects seasonality of client cash, partially offset by cash g
Slide 20: Cash Conversion
Cash Conversion 1H17 1H16 Change $m $m $m EBITDA 30.1 8.1 22.0 • Strong underlying free cash flow generated of $13.2m, being an improvement of $23.8m Non cash and working capital movement (6.1) (6.8) 0.7 compared with prior comparative half year. Interest paid (1.2) (1.0) (0.2) • Decline in non cash
Slide 21: Analysis of Synergies & Cost Reduction
Analysis of Synergies & Cost Reduction Synergy and Cost Savings Actioned $14.1m of the $17.1m cost reduction program, with the remaining Commercial/Retail agreements 3.6 Identified $3.0m to be actioned by 30 June 2017 3.3 Actioned 1.1 Property costs Since 30 June 2016, our key actions include : 2.1
Slide 22: Business Focus and Priorities
Business Focus and Priorities 1H17 Investor Presentation • PAGE 22 Helloworld Limited
Slide 23: Our strong and expanding portfolio
Our strong and expanding portfolio Inbound Retail Travel Travel Management Wholesale AOT Hotels 1H17 Investor Presentation • PAGE 23 Helloworld Limited
Slide 24: New technologies – Clicks and Mortar strategy
New technologies – Clicks and Mortar strategy 1 2 3 Helloworld.com.au ResWorld Agent Micro Sites • Site relaunch August • Launched • Fully branded agency 2016 September 2016 portals • Consolidating agent • In-house consultant • Enhancing the partnerships portal customer experiences • Driving consult
Slide 25: Continued Business Focus
Continued Business Focus 1 2 3 4 5 6 Business Agent Technology Cost Control & Brand Organic Integration Focus Efficiencies Awareness Growth • Improving • Demonstrating • ResWorld • Structure and • NZ member • Asia margins value remuneration growth • helloworld.com.au • Inbound proposition • Consolid
Slide 26: Conclusion
Conclusion • A very solid performance in the first half of the year with significant EBITDA growth compared to prior comparative half year, on a reported and pro-forma basis. This is primarily being driven by improved revenue margins and implementation of merger synergies and other cost savings. • M
Slide 27: Appendix
Appendix 1H17 Investor Presentation • PAGE 27 Helloworld Limited
Slide 28: Restatement of TTV under revised methodology
Restatement of TTV under revised methodology Retail Franchise Wholesale / Travel Eliminations Consolidated Operations Inbound Management 1H17 1H16 1H17 1H16 1H17 1H16 1H17 1H16 1H17 1H16 $m TTV - previous methodology 1,633.4 1,751.5 495.3 309.6 370.7 369.9 - - 2,499.4 2,431.0 Recognition of retail s
Slide 29: Thank you
Thank you Helloworld Limited