Slide 1: Small Caps Roadshow Presentation
FLIGHT CENTRE LATE Small Caps Roadshow Presentation Paul Scurrah, executive general manager - strategy September 16, 2004
Slide 2: Australia's leading travel retailer and one of the largest businesses of its kind
Australia’s leading travel retailer and one of the largest businesses of its kind in the world 1100+ retail shops and corporate travel offices - employing more than 6900 people in eight countries Track record of continual record profits Total Transaction Value (TTV) increased 29% to $5.9 billion Ada
Slide 3: Key Financial Results
Key Financial Results $m Growth % TTV $5.9b 29% Operating Revenue $799m 28% Operating Profit (Before Tax & $131.4m 21% Amort of Goodwill) Operating Profit (before tax) $121.3m 19% NPAT $81.9m 17% EBITDA $157m 24% Basic EPS 87.4c per share 14% Dividend (full year) 61c per share 40% Growth calculation
Slide 4: Shops by country
Increase 2004 2003 Australia 646 575 71 12% New Zealand 140 128 12 9% South Africa 88 80 8 10% FC UK 82 74 8 11% Britannic 42 42 0 0% USA 17 15 2 13% Canada 115 100 is 15% Other 9 5 4 80% Total
Slide 5: Growth strategy — new shops and cost efficient upstaffing
Growth strategy — new shops and cost efficient upstaffing Acquisitions Multi-channel distribution and technology strategy Land strategy Preferred supplier/airline strategy
Slide 6: Shop Growth Expectations
Shop Growth Expectations Increase Australia 740 646 94 15% New Zealand 163 140 23 16% South Africa 97 88 9 10% FC UK 99 82 17 21% Britannic 45 42 3 7% USA 23 17 6 35% Canada 132 115 17 15% Other 12 9 3 33% Total 1,311 1,139 172 15% rd Looking Statements financial performance of Flight Centre Limited
Slide 7: Acquisitions
Acquisitions e« Strategic acquisitions to supplement generic growth « Most likely to be corporate travel businesses — expansion of FCm Travel Solutions e Actively seeking opportunities in the USA e Looking for quality businesses that will enhance overall operations
Slide 8: Multi-Channel Distribution and Technology
Multi-Channel Distribution and Technology « Development of “clicks and mortar” network - an additional $10 million investment in technology in 2004/05 « Evolution from traditional retail business into sophisticated multi-channel global distribution network e Focus on world’s best practice in retail,
Slide 9: Multi-Channel Distribution and Technology: travelthere.com
Multi-Channel Distribution and Technology travelthere.com e Acquisition will fast track FCL’s development in “web” sales in Australia « Popular stand alone internet travel business with integrated product offering ° Online booking system to be used on other FCL sites in Aust, NZ and South Africa -si
Slide 10: Multi-Channel Distribution and Technology
Multi-Channel Distribution and Technology ° Traffic is biggest challenge e Flight Centre already holds dominant position online with poor “transactional” ability e Created a consolidated “ecom” business both globally and in each market to leverage spending across all brands
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Slide 14: Multi-Channel Distribution and Technology: technology focus
Multi-Channel Distribution and Technology FCL’s technology focus (me-to-me) To enhance productivity by reducing ... e the number of supplier systems consultants need to know « the amount of training required e the amount of human error by automating airfare validation
Slide 15: Multi-Channel Distribution and Technology: technology focus (cont)
Multi-Channel Distribution and Technology FCL’s technology focus (cont) To increase ... e the amount of “selling” time for consultants ° land sales by simplifying the selling process e preferred supplier sales - “channeling” « productivity by having part of a booking transacted on the web and finali
Slide 16: Land Strategy
Land Strategy « Increased focus on higher margin land-based business e Additional training and incentives for consultants « Increased marketing of FCL to customers as full service travel provider « Focus on upselling opportunities in stores « Using technology to enhance the selling process
Slide 17: Preferred Supplier/Airline Strategy
Preferred Supplier/Airline Strategy « Professional approach — shift from contracting to supplier relationship management « Creation of value proposition for suppliers « Introduction of competitive tendering « Smaller stable of preferred suppliers e Active channeling e Greatest potential gains in com
Slide 18: Airline Relationships
Airline Relationships Domestic Mutually beneficial deals with Qantas and Virgin Blue for 2004/05 Longer-term relationship with Virgin Blue 2005/06 Qantas deal to be negotiated in future, but don't expect material changes to current remuneration levels Recent announcements signal a move from front-en
Slide 19: Airline Relationships
Airline Relationships International (ex Aust) « Healthy commission deals and overall remuneration packages in place with many airlines « Most fares currently soid on “nett” basis « Qantas commission changes (front end) to apply from January 1, 2005 — Flight Centre confident of negotiating reasonable
Slide 20: Airline Relationships
Airline Relationships Ss International Experience « Travel agents continue to play valuable role in distribution chain « Struggling airlines returning to commission models after trialling zero commission e New airlines discovering the value of travel agents (Virgin Blue, Westjet) e Commission is saf
Slide 21: Questions?
Questions? ee
Slide 22: Full Year Results past Years
Full Year Results past 12 Years % Growth Shops % Growth Profit (BT) $,000 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 36% 39% 39% 28% 27% 22% 22% 31% 25% 20% 26% 29% 29% 28% 135 165 199 250 306 364 440 553 671 832 1,019 1,139 13% 22% 21% 26% 22% 19% 21% 26% 21% 24% 22% 12% 21%