Helloworld Travel Ltd · ASX:HLO
Helloworld Travel — Investor Presentation (July 2020)
43 slides from Helloworld Travel's investor presentation, Jul 16, 2020
Slide 1: ASX cover letter for investor presentation
16 July 2020 The Manager Markets Announcement Office ASX Limited Level 4, 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam, Please find attached the Helloworld Travel Limited “Operating Update and Equity Raising” Investor Presentation. Yours faithfully, David Hall Chief Financial Officer Helloworld T
Slide 2: Operating Update and Equity Raising
Operating Update and Equity Raising Andrew Burnes CEO David Hall CFO
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer Important information The following notice and disclaimer applies to this investor presentation (Presentation) and you are therefore advised to read this carefully before reading or making any other use of this Presentation or any information contained in this Present
Slide 4: Important Notice and Disclaimer
Important Notice and Disclaimer Not an offer (Cont’d) By accepting this Presentation you represent and warrant that you are entitled to receive such Presentation in accordance with the above restrictions and agree to be bound by the limitations contained herein. The distribution of this Presentation
Slide 5: Important Notice and Disclaimer
Important Notice and Disclaimer Forward Looking Statements The information in this Presentation is subject to change without notice and Helloworld is not obliged to update or correct it. This Presentation contains statements that constitute "forward- looking statements" . The forward-looking stateme
Slide 6: Important Notice and Disclaimer
Important Notice and Disclaimer Disclaimer (Cont’d) exclude and disclaim all liability (including, without limitation, for negligence) for any direct or indirect expenses, losses, damages or costs incurred as a result of participation in the Offer or the information in this Presentation being inac
Slide 7: Agenda
AGENDA 1. Operational Update and Outlook 2. Capital Structure and Liquidity 3. Details of the Offer Appendix A: Key Risks Appendix B: Foreign Selling Restrictions Appendix C: Underwriting Agreement Summary NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 66
Slide 8: Executive Summary
Executive Summary Ongoing impact of Pro-longed travel restrictions in place and expected to last through the remainder of 2020 and into 2021. COVID-19 Globally, governments and border controls have resulted in travel restrictions to inbound and outbound tourists entering countries. Current dom
Slide 9: Executive Summary
Executive Summary Balance sheet and Helloworld is undertaking a ~$50.0 million fully underwritten equity raising (Equity Raising or Offer) of new fully paid ordinary shares liquidity initiatives in the Company (New Shares). The Offer comprises a: – ~$27.1 million institutional placement (Placement
Slide 10: Track Record of Performance
Track Record of Performance Since the completion of the merger between Helloworld and AOT Travel Group in 2016, Helloworld has reported consecutive periods of EBITDA and EBITDA margin growth from FY2016 to FY2019. From FY2016 to FY2019, Helloworld has successfully completed and integrated severa
Slide 11: Section 1: Operational Update and Outlook
SECTION 1: Operational Update and Outlook NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 1010
Slide 12: COVID-19 Cost Mitigation
COVID- COVID-19 Cost Mitigation Helloworld has taken several critical steps with a view of cost mitigation to minimise ongoing cash burn: Operating costs Net cash operating costs progressively reduced to ~$2.0 million per month (net of JobKeeper in Australia and Wage Subsidy in New Zealand) from l
Slide 13: COVID-19 Cost Mitigation
COVID- COVID-19 Cost Mitigation Helloworld has taken several critical steps with a view of cost mitigation to minimise ongoing cash burn: Debtor and Creditor Control Suppliers, particularly airlines and cruise companies, introduced unilateral changes to their refund policies including some busines
Slide 14: Cost-out Initiatives
Cost- Cost-out Initiatives Helloworld has implemented material cost savings initiatives, which have reduced monthly costs from ~$22.9 million per month pre COVID-19 to ~$4.0 million per month currently (including the benefits of Job Keeper and the New Zealand wage subsidy). Helloworld continues
Slide 15: Outlook and Return to Travel
Outlook and Return to Travel Outlook for Domestic Travel Domestic flight frequencies have increased significantly since late June and expected to continue to increase throughout the remainder of the year (despite current restrictions on VIC travellers). Domestic carriers will continue to ramp up
Slide 16: Helloworld Post COVID-19
Helloworld Post COVID- COVID-19 Helloworld believes that it is well placed to capitalise on the disruption to the global travel industry by identifying, and having the financial flexibility, to continue to gain market share and drive sustainable cost efficiencies. As domestic and global travel r
Slide 17: Section 2: Capital Structure and Liquidity
SECTION 2: Capital Structure and Liquidity NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 1616
Slide 18: Updated Liquidity Position
Updated Liquidity Position Helloworld’s liquidity position will be enhanced following completion of the Equity Raising with sufficient liquidity to provide for operating and capital expenditure through to the end of 2022 assuming ongoing disruption to the international travel markets. Cash conti
Slide 19: Pro forma Balance Sheet
Pro forma Balance Sheet Impact of Equity 31 December 2019 A$’millions 31 December 2019 1 March 2020 dividend 2 Raising 3 Pro forma Assets Cash 142.0 (11.2) 48.5 179.3 Receivables and accrued revenue 176.1 - - 176.1 Other current assets 0.5 - - 0.5 Total Current Assets 318.6 (11.2) 48.5 355.9 Other n
Slide 20: Section 3: Details of the Offer
SECTION 3: Details of the Offer NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 1919
Slide 21: Details of the Offer
Details of the Offer Offer Structure ~$50.0 million fully underwritten Equity Raising comprising a: - ~$27.1 million institutional placement. - ~$22.9 million 1 for 9 accelerated pro rata non-renounceable entitlement offer, consisting of: - the Institutional Entitlement Offer expected to raise ~$1
Slide 22: Details of the Offer
Details of the Offer Entitlement Offer is open to certain eligible existing Helloworld shareholders on the register as at 7.00pm (Melbourne, Australia Record Date time) on the Record Date of Monday, 20 July 2020. Major Shareholder Entities associated with Andrew Burnes (CEO) and Cinzia Burnes (E
Slide 23: Offer Timetable
Offer Timetable Event Date Equity Raising announcement and Placement and Institutional Entitlement Offer opens Thursday, 16 July 2020 Placement and Institutional Entitlement Offer closes Thursday, 16 July 2020 Trading in Helloworld shares resumes on an ex-entitlement basis Friday, 17 July 2020 Recor
Slide 24: Appendix A: Key Risks
APPENDIX A: Key Risks NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 2323
Slide 25: Key Risks
Key Risks Introduction This section describes the key business risks of investing in Helloworld together with the risks relating to participation in the Offer which may affect the value of Helloworld shares and its ability to operate as a going concern. It does not describe all the risks of an inves
Slide 26: Key Risks
Key Risks 1.2 General economic conditions Helloworld’s operating and financial performance is influenced by a variety of general economic and business conditions in Australia and overseas. A prolonged deterioration in general economic conditions, including a decrease in consumer and business demand,
Slide 27: Key Risks
Key Risks 1.3 Supplier risk (Cont’d) To the extent suppliers, partners or counterparties (such as international airlines, whose operations have been completely or substantially suspended) are facing financial stress, they may seek to change the terms upon which they engage with, cease or significant
Slide 28: Key Risks
Key Risks 1.6 Cost reduction The cost reduction initiatives outlined in this Presentation have been based on cost-saving initiatives already undertaken by Helloworld, together with a number of assumptions made with respect to Helloworld’s ability to achieve these cost-saving targets, one-off-costs a
Slide 29: Key Risks
Key Risks 1.8 Human resources risk (Cont’d) Complexities in the application of award and minimum conditions payments (including wages and overtime) during COVID-19 disruption also raises risks for the Group as with a large number of employers in Australia and overseas. While the Group has processes
Slide 30: Key Risks
Key Risks 1.12 Business systems risk Helloworld relies on the performance, reliability and availability of its information technology, communication and other business systems. Any damage to, or failure of, Helloworld’s key systems may result in disruptions to Helloworld’s business (especially its o
Slide 31: Key Risks
Key Risks 1.15 Currency risk (Cont’d) Furthermore, due to the nature of Helloworld as an international tourism business, changes to foreign exchange rates impact upon the underlying demand for travel and tourism services. The movement of foreign exchange rates are beyond Helloworld’s control and cou
Slide 32: Key Risks
Key Risks 1.20 Change in consumer preferences Helloworld is exposed to changes within the specific travel markets in which Helloworld operates, whether as a result of changes in or to key markets, changes in product availability, as well as changes in consumer travel trends and sentiment towards tra
Slide 33: Key Risks
Key Risks 2. Offer and General Risks 2.1 Investment in equity capital and COVID-19 There are general risks associated with investments in equity capital. The trading price of Helloworld's ordinary shares on ASX may fluctuate with movements in equity capital markets in Australia and internationally.
Slide 34: Key Risks
Key Risks 2.1 Investment in equity capital and COVID-19 (Cont’d) It is also possible that new risks may emerge as a result of domestic or foreign markets experiencing extreme stress, or existing risks (including the impacts of COVID-19) may evolve in ways that are not currently foreseeable. The equi
Slide 35: Appendix B: Foreign Selling Restrictions
APPENDIX B: Foreign Selling Restrictions NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 3434
Slide 36: Foreign Selling Restrictions
Foreign Selling Restrictions This document does not constitute an offer of new ordinary shares (New Shares) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any count
Slide 37: Foreign Selling Restrictions
Foreign Selling Restrictions If you (or any person for whom you are acquiring the New Shares) are in Singapore, you represent and warrant that you (and any such person) (i) are an "institutional investor" or an "accredited investor" (as such terms are defined in the SFA, (ii) will acquire the New Sh
Slide 38: Appendix C: Underwriting Agreement Summary
APPENDIX C: Underwriting Agreement Summary NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 3737
Slide 39: Underwriting Agreement Summary
Underwriting Agreement Summary Ord Minnett Limited (Ord Minnett) is acting as sole lead manager and underwriter of the Placement and the Entitlement Offer. Helloworld has entered into an underwriting agreement with Ord Minnett (Agreement) pursuant to which Ord Minnett has agreed to fully underwrite
Slide 40: Underwriting Agreement Summary
Underwriting Agreement Summary (j) (ASIC action) ASIC: (i) applies for an order under Part 9.5 of the Corporations Act in relation to the Offer, the issue of New Shares or any document released to ASX in connection with the Offer or used, with Helloworld's approval, to market the Offer (Offer Docume
Slide 41: Underwriting Agreement Summary
Underwriting Agreement Summary (u) *(Information) the due diligence report prepared in connection with the Offer or the information provided by, or on behalf of, Helloworld to Ord Minnett in relation to the due diligence process undertaken for the Offer, the Offer Documents or the Offer, is false, m
Slide 42: Underwriting Agreement Summary
Underwriting Agreement Summary (gg) *(Disruption in financial markets) Any of the following occurs: (i) a general moratorium on commercial banking activities in Australia, New Zealand, the United States, Japan, Singapore, the United Kingdom, a member state of the European Union or Hong Kong is decla
Slide 43: Not for distribution or release in the United States
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 4242
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