Slide 1: FY18 Results Presentation
THE UK’S LEADING ONLINE RETAILER OF BEACH HOLIDAYS FY18 RESULTS PRESENTATION November 2018
Slide 2: Agenda and Cautionary Statement
AGENDA FY18 Market Dynamics CAUTIONARY STATEMENT FY18 Financial Performance Paul Meehan - CFO This presentation may contain certain forward-looking statements with respect to the financial condition, results, operations and businesses of the Company. Forward looking statements are sometimes, but not
Slide 3: Paul Meehan, Chief Financial Officer
Paul Meehan Chief Financial Officer FY18 Market Dynamics FY18 Financial Performance
Slide 4: FY18 Market Dynamics
FY18 Market Dynamics The collapse of Monarch in early FY18 was followed by a heatwave in H218 Monarch failed on the 02/10/17 YOY booking growth and booked flight pricing for Winter 17/18 departures 60% As presented at the H1 update, the lack of seats in the market for 50% winter departures led t
Slide 5: Profit and Loss Account – UK Segment
Profit and Loss Account – UK Segment FY18 UK EBITDA growth of 14% 2018 2017 Change UK growth year on year £m £m % Revenue 89.3 81.9 9% Revenue +9% (H1 +18%, H2 +1%) Online Marketing costs (33.2) (33.5) Revenue after marketing +16% Off-line Marketing costs (4.1) (3.5) Total Marketing (37.3) (37.0
Slide 6: Profit and Loss Account – International
Profit and Loss Account – International FY18 Revenue (6%) YOY 2018 2017 Change Exceptional summer weather in H2 in Scandinavia £m £m % constrained holiday demand Revenue 1.6 1.7 (6%) Online Marketing costs (2.5) (2.9) Widespread discounting of distressed product by Off-line Marketing costs (0.5)
Slide 7: Profit and Loss Account – Classic Collection
Profit and Loss Account – Classic Collection EBITDA contribution post acquisition of £1.1m 2018 OTB acquired Classic Collection Holidays on 15 August £m 2018 for a net consideration of £20.0m Revenue 13.2 Gross Profit 1.7 As it is a principal rather than an agent, Classic reports on Gross Profit
Slide 8: Profit and Loss Account – Group
Profit and Loss Account – Group Adjusted profit before tax +18% YOY 2018 2017 Change Adjusted profit before tax increased by 18% to £33.6m £m £m % UK EBITDA exc Share Based Payments 37.9 33.2 14% Adjusted profit after tax increased by 21% to £27.7m International EBITDA (2.2) (2.0) Amortisation
Slide 9: Balance sheet
Balance sheet All customer monies are paid into a trust account which is effectively a debtor to the business Seasonal cash flow requirements are covered by a revolving credit facility which is drawn down as required. This is not utilised at year end The FY17 £7m provision for Monarch has been
Slide 10: Cash Flow
Cash Flow Continued Strong Cash Conversion 2018 2017 Change Operating cash flow of £28.9m, 79% (FY17 - £24.6m, 79%) £m £m % Adjusted for: EBITDA 36.8 31.2 18% Capitalised development spend (3.8) (2.7) 39% £1.1m Capex relating to the new office Movement in working capital (1.9) (3.3) Capital ex
Slide 11: Segmental P&L
Segmental P&L FY18 FY17 Change Core B2B* Int'l Group Core Int'l Group Core Int'l Group £m £m £m £m £m £m £m % % % Revenue 89.3 13.2 1.6 104.1 81.9 1.7 83.6 9% (6%) 25% Gross Profit before marketing 89.3 1.7 1.6 92.6 81.9 1.7 83.6 9% (6%) 11% Gross Profit after marketing 52.0 1.6 (1.4) 52.2 44.9 (1.6
Slide 12: UK KPIs: FY13 to FY18
UK KPIs: FY13 to FY18 Traffic Growth ('000 Daily Unique Visitors) Revenue per Daily Unique Visitor (£) £1.40 80,000 70,000 £1.20 60,000 50,000 £1.00 40,000 30,000 £0.80 FY13 FY14 FY15 FY16 FY17 FY18 FY13 FY14 FY15 FY16 FY17 FY18 Revenue (£m) Revenue after Marketing Spend (£m) £100 £60 £50 £80 £40 £6
Slide 13: Simon Cooper, Chief Executive Officer
Simon Cooper Chief Executive Officer Evolution of Key Drivers
Slide 14: Huge opportunities exist to build significant share of core and adjacent markets
Huge opportunities exist to build _ significant share of our core and Poa OFFLINE adjacent markets aS “ = Q & ONLINE ra o / & Drive TRAFFIC / through branded & 7 fe) direct channels Personalise offering to drive CONVERSION INNOVATE THROUGH LONG HAUL INVESTMENT IN TALENT INTERNATIONAL & TECHNOLOGY ST
Slide 15: Our core: Innovate through investment in talent & technology
Our core: Innovate through investment in talent & technology Relocating our headquarters should allow us to double the pace of innovation across the next 3 years Technology platform Retention – Implemented reward schemes to incentivise our teams for the long term Recruitment – November move to a
Slide 16: Our core: Drive traffic through branded and direct channels
Our core: Drive traffic through branded and direct channels We continue to invest in proprietary tools to allow us to grow traffic share efficiently Multi-channel strategy supported by attributed in house Econometric Modelling bid modelling allows efficient share growth Efficiencies in online sp
Slide 17: Our core: Personalise offering to drive conversion
Our core: Personalise offering to drive conversion Our ambition is to drive a fully personalised cross-device experience for all users Data science Revenue per Revenue per Conversion booking unique visitor Continued innovation supports improving RPUV ‒ Smartphone traffic now 65% of total traffic ‒
Slide 18: Our core: Drive revenue through direct & differentiated supply
Our core: Drive revenue through direct & differentiated supply Driving an increasing % of exclusivity continues to present a huge margin / volume opportunity Investment made to scale our supply function Direct contracting - share of monthly arrivals ‒ Scale and disintermediation drives margin grow
Slide 19: Our core: Inspire customers who are destination agnostic
Our core: Inspire customers who are destination agnostic Our technology now allows holidaymakers to search all destinations simultaneously Deals functionality Package Travel Directive came into effect on the 1/7/18 ‒ Rebuilt deals engine powers new destination agnostic search functionality ‒ Custo
Slide 20: Expansion opportunities
Expansion opportunities Huge opportunities exist to build share of adjacent market International Offline ‒ 3 Scandinavian markets live with .dk launched in FY18 ‒ More than 5 million holidaymakers book short haul beach ‒ Strong H1 performance in Sweden packages each year through offline channels
Slide 21: Appendix
Appendix
Slide 22: OTB History
OTB History 2017 2015 Acquired and Ebeach.se replatformed launched sunshine.co.uk IPO Ebeach.no launched 2013-14 2016 Investment into Launched drive to offline advertising contract exclusive Passenger and direct contracting product numbers 1600000 Online share of 21% 2009-11 2013 short haul beach Te
Slide 23: Business Model
Business Model ADDRESSABLE MARKET Short haul beach STRUCTURAL MARKET GROWTH Online OTB share of & MARKET SHARE GROWTH holidays dynamically X penetration X market traffic = Unique visitors packaged X PERSONALISE CUSTOMER Revenue per Revenue per PROPOSITION & Conversion booking X Conversion = Unique v
Slide 24: Disruptive retailer of beach package holidays
Disruptive retailer of beach package holidays On the Beach has the product advantages of a tour operator with the model advantages of an OTA Tour Operator OTA HIGH Cost Base LOW HIGH Risk LOW HIGH Margin LOW Product NARROW BROAD Range Specialist Generalist 24
Slide 25: OTB Cash Flow - Seasonality
OTB Cash Flow - Seasonality OTB Peak booking trading period between January and June and travelled June and August Booked by month Booked by month FY18 FY17 OTB Revenue recognised on a booked basis 16% 14% Calendar Q4 is quiet 12% 10% 8% Traffic volumes increase following Christmas 6% as custo
Slide 26: Cash Flow: Cash Profile
Cash Flow: Cash Profile Facility used to fund low deposits during peak trading periods between January and June Bank balance profile FY18 Annual cash cycle sees 50.0 investment into working capital 40.0 as bookings are achieved in Jan - 30.0 June, with cash unwinding from 20.0 the trust as custome