Helloworld Travel Ltd · ASX:HLO
Helloworld Travel — FY2018 Earnings Presentation
35 slides from Helloworld Travel's earnings presentation, Aug 21, 2018
Slide 1: FY18 Investor Presentation
CEO Andrew Burnes FY18 CFO Michael Burnett
Slide 2: Disclaimer
Page 2 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
Slide 3: Agenda
Page 3 Agenda Overview Financial Performance Business Focus Appendix and Priorities FY18 Investor Presentation | Helloworld Travel Limited
Slide 4: Overview
Page 4 Overview 4 FY18 Investor Presentation | Helloworld Travel Limited
Slide 5: FY18 Results Overview
Page 5 FY18 Results Overview • $6.1 billion TTV achieved led by strong air sales volume growth and business TTV acquisitions undertaken in the second half of FY18. 3.5% on $6,077.0m FY17 • Reported revenue was in line with FY17 with the impact of disposed operations and restructure of Insider Journe
Slide 6: Financial Performance
Page 6 Financial Performance FY18 Investor Presentation | Helloworld Travel Limited
Slide 7: FY18 Full Year Results
Page 7 FY18 Full Year Results • TTV growth of 3.5% underpinned by strong transaction volume growth and business acquisitions, partially offset by lower average airfares. FY18 FY17 Change • Revenue was in line with the prior year with the $m $m % benefits of business acquisitions in second half of To
Slide 8: Key financials – half yearly trend
Page 8 Key financials – half yearly trend 1H16 2H16 1H17 2H17 1H18 2H18 • Key TTV, EBITDA and EBITDA $m $m $m $m $m $m margin metrics improving each Total Transaction Value (TTV) 2,792.3 2,902.0 2,890.1 2,982.2 2,967.9 3,109.1 half year compared with Revenue 139.0 161.5 171.4 155.4 165.1 161.8 corre
Slide 9: Group Revenue and EBITDA
Page 9 Group Revenue and EBITDA • Underlying revenue increase represents Group Revenue - FY17 to FY18 improved contracting outcomes offset by 340 margin changes from lower airfares, 6.5 business unit mix change and product mix 330 326.8 1.6 326.9 change. -2.2 -5.8 • Underlying costs decrease reflect
Slide 10: Group EBITDA – by segment
Page 10 Group EBITDA – by segment Group EBITDA - FY17 to FY18 • Australia segment – TTV and revenue growth through 70 business acquisitions and improved contracting outcomes. Cost reduction initiatives delivering strong 1.7 65.2 profit growth. Segment continues to drive improvements 0.6 in technolog
Slide 11: Australia Overview
Page 11 Australia Overview • TTV growth from Retail, Wholesale, Inbound and Corporate divisions. Air Tickets transaction volumes FY18 FY17 Change increased by 10%. $m $m % • Revenue increase included the business acquisitions in Total Transaction Value (TTV) 5,078.5 4,908.8 3.5% the second half of F
Slide 12: Australia Revenue and EBITDA
Page 12 Australia Revenue and EBITDA 260 Australia Revenue - FY17 to FY18 250.8 • Focus on profitable revenue streams and 4.7 6.5 250 244.0 right sizing the operational cost base with -4.4 the better use of technology has resulted 240 in process efficiencies. Underlying Millions ($'m) 230 revenue in
Slide 13: Australia Air Ticketing - transaction and price trends
Page 13 Australia Air Ticketing - transaction and price trends Cumulative YoY growth variance – Cumulative YoY growth variance – Domestic Fares AU International Fares AU 5.0% 60.0% 4.0% 40.0% 3.4% 3.0% 20.0% 7.4% 2.0% 0.0% 1.1% -6.6% 1.0% -20.0% 0.0% -40.0% Transactions Average Price Transactions Av
Slide 14: Australia Business Review
Page 14 Australia Business Review Retail Distribution operations • Member numbers growth Increase to 1,854 members from 1,715 members at 30 June 2017 led by member growth across the network and the addition of the Magellan Travel Group. • Acquisitions Acquired the Magellan Travel Group in March
Slide 15: Australia Business Review
Page 15 Australia Business Review Wholesale/Inbound operations • Enhanced ReadyRooms Launched in June 2018, the upgraded portal includes a new look and enhanced functionality. • Acquisition of Asia Escape Holidays The acquisition complements Helloworld Travel’s existing wholesale businesses and
Slide 16: New Zealand Overview
Page 16 • TTV growth driven by significant increase in Air Tickets New Zealand Overview division transaction volumes from a larger retail member network, partially offset by lower TTV from corporate business (APX) and lower domestic and international FY18 FY17 Change airfares impacting gross margin.
Slide 17: New Zealand Revenue and EBITDA
Page 17 New Zealand Revenue and EBITDA New Zealand Revenue - FY17 to FY18 65 • Underlying revenue decrease 60.5 represents business unit and product 60 57.1 mix change. In addition, the full year -2.0 impact of lost key clients in the APX Millions ($'m) 55 -1.4 corporate business was partially offse
Slide 18: New Zealand Air Ticketing - transaction and price trends
Page 18 New Zealand Air Ticketing - transaction and price trends Cumulative YoY growth variance – Cumulative YoY growth variance – Domestic Fares NZ International Fares NZ 8.0% 25.0% 6.0% 20.0% 4.9% 15.0% 4.0% 10.2% 10.0% 2.0% 5.0% 0.0% -1.4% 0.0% -2.0% -5.0% -2.1% -4.0% -10.0% Transactions Average
Slide 19: New Zealand Business Review
Page 19 New Zealand Business Review Retail Distribution operations • Retail member growth to 369 members from 300 at 30 June 2017 led by expansion of Helloworld Travel branded stores and increase in the non-branded My Travel Group network. • Disposed of company owned stores, as at 30 June 2018, only
Slide 20: Rest of World (ROW) Overview
Page 20 Rest of World (ROW) Overview FY18 FY17 Change • TTV and revenue reduction in line with expectations $m $m % from the refocus and restructure of Insider Journeys business and weather conditions adversely Total Transaction Value (TTV) 96.8 114.5 (15.5%) impacting the Fiji businesses. Revenue 1
Slide 21: Rest of World (ROW) Revenue and EBITDA
Page 21 Rest of World (ROW) Revenue and EBITDA Rest of World Revenue - FY17 to FY18 24 • Underlying revenue decrease 22.3 represents change in business mix to lower margin air sales in the USA 22 business and revenue decrease in -1.1 Millions ($'m) the Fiji businesses due to cyclone 20 19.0 activity
Slide 22: Rest of World (ROW) Business Review
Page 22 Rest of World (ROW) Business Review Insider Journeys • Australian outbound markets to key Asia destinations such as Vietnam has softened, coupled with aggressive pricing and heavy discounting by competitors has impacted TTV and revenue. • Refocus of revenue distribution channel (traditional
Slide 23: EBITDA to NPAT reconciliation
Page 23 EBITDA to NPAT reconciliation • Depreciation and amortisation expense successfully FY18 FY17 lowered from the prior year reflecting refocused capital $m $m investment in technology enhancements and numerous assets being fully depreciated or amortised in prior years. EBITDA 65.2 55.2 Deprecia
Slide 24: Liquidity and funding
Page 24 Liquidity and funding FY18 FY17 FY16 Liquidity • Strong balance sheet, with general cash of $42.0m and $m $m $m external drawn debt of $42.1m. In FY18, general cash has Company cash 42.0 34.7 26.2 increased due to the strong business performance, Client cash 161.5 163.4 176.4 generating addi
Slide 25: Cash conversion
Page 25 Cash conversion • Operating cash flow generated of $41.3m, an increase of FY18 FY17 Change $12.3m compared with the prior year. $m $m $m • Working capital decline in current year mainly reflects EBITDA 65.2 55.2 10.0 timing change in airline payments with IATA in Air Tickets consolidation bu
Slide 26: Business Focus and Priorities
Page 26 Business Focus and Priorities FY18 Investor Presentation | Helloworld Travel Limited
Slide 27: Growth in member networks and numbers
Page 27 Growth in member networks and numbers TOTAL = JUN18: 2,223 JUN17: 2,015 Helloworld Travel’s retail network has grown to 2,223 members across Australia and New Zealand, an increase of 208 since 30 June 2017, led by the: • expansion of the My Travel Group network through continued improvement
Slide 28: Continued Business Focus
Page 28 Continued Business Focus Business Agent Cost Brand Technology Control Improvement Focus Awareness • Simple and • ResWorld • Structure and • Brand evolution • Supporting transparent remuneration margins • helloworld. • Key remuneration com.au • Property sponsorships • Expanding model products
Slide 29: Our Travel Portfolio
Page 29 Our Travel Portfolio FY18 Investor Presentation | Helloworld Travel Limited
Slide 30: Conclusion
Page 30 Conclusion • A strong business performance for FY18 was delivered with growth in TTV, EBITDA and net profit after tax, leading to increased dividends to our shareholders. • All segments recorded EBITDA improvements compared with the prior year. In addition, EBITDA margin continues to grow dr
Slide 31: Appendix
Page 31 Appendix FY18 Investor Presentation | Helloworld Travel Limited
Slide 32: Yearly trend analysis
Page 32 Yearly trend analysis The table below provides relevant Group performance information for key financial measures over the last five financial years: 2018 2017 2016 2015 2014 $m's $m's $m's $m's $m's Revenue 326.9 326.8 300.5 279.2 291.7 EBITDA (excluding impairment FY15/FY14) 65.2 55.2 25.3
Slide 33: Company background information
Page 33 Company background information A$4.80 A$597.6 M Share Price at 30 124.5 M A$42.0 M Cash Market Cap at 30 June 2018 Shares Outstanding A$42.1 M Debt June 2018 Board & Management Team Non-Executive Director and Chairman - Garry Hounsell Mr Hounsell was appointed to the Board as Chairman on 4 O
Slide 34: Thank-you
Page 34 Thank-you FY18 Investor Presentation | Helloworld Travel Limited
Slide 35: Investor Contact
INVESTOR CONTACT: Michael Burnett - Chief Financial Officer michael.burnett@helloworld.com.au MEDIA CONTACT: Trudi Sheppard - Director of Communications trudi.sheppard@helloworld.com.au 03 9867 9600