Hostelworld Group Plc · LSE:HSW
Hostelworld — H1 2024 Earnings Presentation
33 slides from Hostelworld's earnings presentation, Aug 8, 2024
Slide 1: 2024 Interim Results
2024 Interim Results August 8th 2024 OUR MISSION Help travellers find people to hang out with Get the App
Slide 2: Disclaimers
Disclaimers NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO ANY JURISDICTION IN WHICH SUCH DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. This presentation has been prepared by Hostelworld Group plc (the “Company") for informational and background purposes only. The foll
Slide 3: Highlights
Highlights
Slide 4: H1'24 – Financial Summary
H1’24 – Financial Summary 3.7M 5.7M 12.8M Net Bookings Pax Net Bednights +9% vs H1’23 +6% vs H1’23 +4% vs H1’23 €13.60 €46.4M 45% Net ABV1 Net Revenue2 Marketing as % of -10% vs H1’23 +1% vs H1’23 Revenue3 H1’23: 51% €9.6M €5.0M €2.6M EBITDA Cash Net Debt4 H1’23 : €5.1M Dec ‘23: €7.5M Dec ‘23: €12.3
Slide 5: Key Highlights
Key Highlights Strong financial delivery continues into H1’24: ● Continuing growth in net bookings, a record half-year for Asia and Central America ● Social Strategy continuing to deliver, with direct marketing as a % of revenue at the low end of guidance range ● Continuing to maintain cost discipli
Slide 6: H1'24 Results
H1’24 Results
Slide 7: Strong demand from European and UK customers
Strong demand from European and UK customers Net bookings by customer nationality YoY UK USA & Canada (19% of net bookings) (21% of net bookings) +16% Europe (42% of net bookings) +2% Asia (5% of net bookings) Global YoY Growth Rate +13% LatAm +15% (6% of net bookings) Australia N. Zealand (7% of ne
Slide 8: Strong preference for lower cost destinations
Strong preference for lower cost destinations Net bookings by destination region YoY USA & Canada Western Europe Eastern Europe North Asia €46.40* €40.13* €26.50* €27.94* 4% of net bookings 31% of net bookings 7% of net bookings 2% of net bookings -3% -4% -6% +27% Global Central America YoY Growth R
Slide 9: Overall revenue growth tracking lower cost destination mix YoY
Overall revenue growth tracking lower cost destination mix YoY Generated Revenue1 by destination region YoY USA & Canada Western Europe Eastern Europe North Asia €46.40* €40.13* €26.50* €27.94* -8% -10% -12% +22% Global Central America YoY Growth Rate €17.76* South Asia MEA €10.91* €16.62* Australia
Slide 10: Net margin growth driven by volume and marketing efficiency
Net margin growth driven by volume and marketing efficiency €m 25.0 1.8 -3.0 Strong net margin1 growth driven by: 3.1 • Net booking volume +9% vs. H1’23 (+0.3m) 20.0 2.4 • Marketing2 efficiency driven by ‘Social’ 15.0 strategy (45% H1’24, 51% H1’23) • Other includes benefit of lower deferred 10.0 22
Slide 11: Increasing operating leverage through opex discipline
Increasing operating leverage through opex discipline €m 45% Opex as % of Net Revenue3 14.0 28% 27% Platform efficiencies reducing operating costs1 12.8 12.6 12.5 • Wages & Salaries reduced 4%, with wage 12.0 inflation managed through use of lower cost temporary contractors 10.0 • Reduced technology
Slide 12: Strong H1'24 EBITDA performance and margin growth
Strong H1’24 EBITDA performance and margin growth €m Reiterating full year guidance 14.0 • 9% volume growth, strong growth across all low-cost destinations 0.3 12.0 1.8 -3.0 • Paid marketing efficiencies, supported by social, driving a 6% reduction in marketing 10.0 spend 3.1 8.0 • Positive deferred
Slide 13: Cash generation enabled debt repayment ahead of schedule
Cash generation enabled debt repayment ahead of schedule €m Debt paid in full, strong cash conversion 18.0 • Cash conversion of 103%, adjusted free cashflow 16.0 of €9.9m on EBITDA of €9.6m (H1’23: 183%) 14.0 • €12.2m of cash utilised in financing activities 12.0 9.8 -10.3 • Repaid remaining €2.0m o
Slide 14: Capital allocation priorities focussed on maximising shareholder returns
Capital allocation priorities focussed on maximising shareholder returns Principle objective is to deliver growth that FY 2024 priorities: drives long-term sustainable value creation Repayment of AIB debt facility Complete ● Asset light business model generating substantial cash flow Repayment of wa
Slide 15: ESG is at the core of our culture and our category
ESG is at the core of our culture and our category 2024 INTERIMS AUG 2024 | 15
Slide 16: Strategy Update
Strategy Update
Slide 17: Continued investments in our Social platform
Continued investments in our Social platform 2024 INTERIMS AUG 2024 | 17
Slide 18: Customers are using our platform to find people to hang out with
Customers are using our platform to find people to hang out with 2024 INTERIMS AUG 2024 | 18
Slide 19: Social members also become powerful brand advocates
Social members also become powerful brand advocates 2024 INTERIMS AUG 2024 | 19
Slide 20: Social platform continues to accelerate
Social platform continues to accelerate Percentage of Social Members who Active chat users Messages sent on Social Network can see LinkUps in trip 84% 74% 73% 56% at least 3 at least 1 4% 2% H1'22 H2'22 H1'23 H2'23 H1'24 H1'22 H2'22 H1'23 H2'23 H1'24 H1'23 H2'23 H1'24 2024 INTERIMS AUG 2024 | 20
Slide 21: Strategy continues to attract and retain high value customers
Strategy continues to attract and retain high value customersattract and retain high value customers Social Members now accounting for With new Social members making 2.3x … and are 3.1x more likely to make 80% of all bookings on our platform the bookings compared to non members these bookings on our
Slide 22: Driving strong growth in App bookings, & reduced marketing expenses
Driving strong growth in App bookings, & reduced marketing expenses YoY growth rate in net bookings by platform Marketing as % of net revenue +20% YoY 60% 57% 51% 48% 45% +2% YoY H1'22 H2'22 H1'23 H2'23 H1'24 H1'22 H2'22 H1'23 H2'23 H1'24 Web Bookings App Bookings 2024 INTERIMS AUG 2024 | 22
Slide 23: Strong growth in recurring revenue, impacted by lower ABV's YoY
Strong growth in recurring revenue, impacted by lower ABV’s YoY Stronger customer retention rates/higher booking frequencies YoY, offset by lower cost destination mix €60 H1 generated revenue1 (€’M), segmented by year of customer acquisition New customer revenue €50 Return customer revenue 2024 €40
Slide 24: Near term guidance
Near term guidance FY 2023 FY 2024 Results Trends Net Bookings 6.5m High single digit growth Net GMV €619m Revenue growth lower than booking growth Net Revenue €93.3m Marketing % of Revenue 50% <50% In line with market Adj. EBITDA €18.4m consensus1 1. Company compiled market consensus FY 2024 adjust
Slide 25: Continuing to execute our strategy
Continuing to execute our strategy ● Continue to invest in our uniquely differentiated Social platform ● Strengthens our growing competitive “moat”, and drives continued share gains ● Continue to optimise marketing mix, platform conversion and develop low cost acquisition channels ● Increases market
Slide 26: Thank you!
Helping travellers find people to hang out with Thank you! Get the App
Slide 27: Appendices
Appendices
Slide 28: Balance Sheet
Balance Sheet H1’24 FY’23 €’m €’m Intangible assets 64.3 66.5 Property, plant and equipment 0.7 0.8 Deferred tax assets 14.5 15.5 Investment in associate 1.2 1.1 ● Intangible assets €64.3m (FY’23: €66.5m) Cash - 0.8 Total non-current assets 80.7 84.7 ● Relates to goodwill, Hostelworld brandname, IP
Slide 29: Income Statement
Income Statement H1’24 H1’23 €’m €’m Revenue 46.4 45.8 • Net revenue increased to €46.4m (H1’23: €45.8m) Administrative expenses1 (37.8) (41.8) • 3.7m net bookings (H1’23: 3.4m) driven by record performance in Asia Depreciation & amortisation expenses (4.7) (5.8) and Central America Share of results
Slide 30: Cash Flow Statement
Cash Flow Statement H1’24 H1’23 €’m €’m Adjusted EBITDA1 9.6 5.1 Working capital movement 3.0 7.9 Net interest and tax paid2 (0.2) (2.2) Cash from operating 12.4 10.8 Strong adjusted free cash conversion facilitating early repayment of Capitalisation & acquisition of intangible assets (2.4) (1.5) bo
Slide 31: Adj EBITDA to Adj Free Cash Flow
Adj EBITDA to Adj Free Cash Flow H1’24 H1’23 €’m €’m Adjusted EBITDA1 9.6 5.1 Working capital movement 3.0 7.8 Exceptional items3 0.2 0.8 • Adjusted Free Cash Flow excludes items not relating to day-to-day Net interest / income tax paid2 (0.2) (2.2) activities such as proceeds/repayments related to
Slide 32: Our pioneering social network is the cornerstone of our strategy
Our pioneering social network is the cornerstone of our strategy Customer invited Customer leaves Customer signs up to into City and Hostel City and Hostel Chat our Social Network Books on any platform Chat Groups Groups (web, iOS, or Android) 14 days before 3 days after check-in check-out OTA only
Slide 33: Delivering long term EBITDA and FCF growth
Delivering long term EBITDA and FCF growth Revenue Growth ● New customer growth Unique customer need led growth strategy ● Strong retention rates Margin Growth X EBITDA/FCF ● Reduces CAC App centric Increased ● Lower marketing cost as a % EBITDA growth delivery model of net revenue Increased Operati