Slide 1: Flight Centre Ltd 2005 Full Year Results
Flight Centre Ltd 2005 Full Year Results 18 August 2005
Slide 2: 2005 Full Year Results
2005 Full Year Resul FLIGHT CENTR fens 2005 2004 Variance TIV $6.9b $5.9b 17% Revenue $899 m $799 m 13% Net Profit (Before Tax) $107.0m $121.3m (12)% EBITDA $143.9 m $157.0 m (8)% EBIT $97.7m $117.8m (17)% NPAT $67.9m $81.9m (17)% Dividend Final 28c /share 40.5 /share** (31)% *The accounts are in th
Slide 3: Historical Performance
Historical Performa FLIGHT CENTRE 2005 2004 2003 2002 TTV (bil) 69 5.9 46 3.6 % increase on LY 17% 28% 28% 20% Income Margin 13.1% 13.5% 13.7% 13.2% PBT (mil) 107.0 121.3 102.3 90.5 NPAT(mil) 67.9 81.9 70.0 62.0 % increase on LY (17.1%) 17.0% 12.9% 44.7% EBITDA 143.9 157.0 126.9 112.2 Capex (mil) 50
Slide 4: Financial Overview
Financial Overviey FLIGHT CENTRE kobe Ee « TTV increased by 17% to $6.9b e PBT down 12% and in line with revised guidance e Income margin decrease 13.57 % to 13.07% » Lower growth (overrides down) = Pressure on Air margins « GDS Income decreased e Interest up $2.8mil, 12.5% ¢ Expense historical USA
Slide 5: Shop Numbers by Brand
Shop Numbers by FLIGHT CENTRE kobe Ee Opening Balance Flight Centre 871 Travel Associates 12 39 Escape Travel Student Flights Retail Sub-total FCm Travel Solutions Wholesale/complementary Intravel Total 1422 - Bf a479. Wholesale/complementary includes vertically integrated businesses complementary t
Slide 6: Shop Numbers by Country
Shop Numbers by FLIGHT CENTRE kobe Ee Australia NZ Canada US UK South Africa Hong Kong China Flight Centre 514 105 115 16 7 87 Travel Associates 14 Escape Travel 49 Student Flights 43 FCm Travel Solutions 81 22 6 2 53 5 4 4 Wholesale/complementary 132 45 33 9 33 24 3 Intravel 2 Total 835 172 154 27
Slide 7: Profit Improvement
Profit Improven kobe Ee NPBT is down 12% because of two main issues 1. Income margin problem ¢ Pursue growth targets to ensure overrides are achieved ¢ Support preferred airlines. Drop poor margin ones. e Grow land and preferred strategy where margins are generally good 2. Overhead cost creep proble
Slide 8: Operations
Operations FLIGHT CENTRE kobe Ee ¢ Growth not good enough — it’s impacted overrides * Launch of FCm globally now in 30 countries e¢ Web booking engine working effectively in — Aust, Canada, USA * Retail online — supports bricks & mortar model e Reward Pass launched in Australia e Full Throttle progr
Slide 9: Country Summary
kobe Ee Country Summary
Slide 10: kobe Ee
kobe Ee 2005 2006 TTV growth of 18.7% Double digit growth expected Shop openings 58 Shop openings above 2005 levels Launch of the booking engine Significant growth in retail online sales RewardPass launched Cost reduction focus & structural improvement ongoing Overhead costs & structure reduction
Slide 11: Australia
Australia — Ca kobe Ee 2005 2006 TTV growth 6.6% Around 10% TTV growth Shop openings 2 Up-staffing to continue FCm Travel Solutions roll out Focus on productivity improvements TMS & Ci Events strong performance Cost reduction focus
Slide 12: New Zealand
New Zealand a FLIGHT CENTRE kobe Ee 2005 2006 TTV growth 13.5% Strong double digit growth Impact of shop closures 19 Shop openings 13 Disappointing growth Retail on-line launched in August Override targets not achieved Ongoing modest Corporate growth
Slide 13: South Africa
South Africa ae oe, CENTRE kobe Ee 2005 2006 TTV growth 22.0% Similar growth Shop openings 9 Increased shop openings Low double digit PBT growth Web booking engine to be launched Corporate in profit Ongoing Corporate growth from a small ase.
Slide 14: United Kingdom
United Kingdc kobe Ee 2005 2006 TTV growth 14.3% Similar growth Shop openings 7 Increased shop openings Strong retail results Corporate Traveller now part of Britannic New airfares database launched
Slide 15: kobe Ee
kobe Ee 2005 2006 TTV growth 16% Similar growth Shop openings 1 Modest number of new shop openings Profit marginally below last year USA corporate acquisition still planned Greater integration with Canada
Slide 16: kobe Ee
kobe Ee 2005 2006 TTV growth 23.4% Similar growth planned Strong corporate profit growth Increased shop openings Shop openings 6 Continuation of corporate expansion Flat profit to LY, Q4 encouraging Ongoing revenue growth through retail online Web booking engine launched
Slide 17: Plans 2006
Plans 2006 FLIGHT CENTRE kobe Ee ¢ Growth — bricks & mortar helped by increased retail online ¢ Modest shop & staff growth, about 15 % e¢ Margin — air & land non-preferred or low margin operators dropped ¢ Productivity — ongoing improvements are expected ¢ Cost reductions — through better procuremen
Slide 18: Challenges 2006
Challenges 2(Q FLIGHT CENTRE kobe Ee ¢ Margin — retail & corporate under pressure due to air margin and corporate travel competitiveness e¢ General move of simple short haul air to Web * Recruitment of people within tight labour markets
Slide 19: Guidance
Guidance 200 kobe Ee ¢ TTV growth target 15% e Disappointed if profit growth does not follow TTV growth, however profit hard to predict at this stage * $10m uplift in pre-tax profit through IFRS e Acquisition — India & possibility of USA
Slide 20: End of presentation: Questions
End of prese Questions
Slide 21: Appendices
Appendices FLIGHT CENTRE kobe Ee TTV Cash and Investments Depreciation & Amortisation
Slide 22: TTV by country
FLIGHT CENTRE kobe Ee 12 mths to June # Expected Variance TTVO5 Variance TTV04 *Shops TTV 06 %o % 05 Australia 5,001 12% 4,449 17% 3,813 835 New Zealand 755 18% 639 14% 561 172 UK 1,045 15% 909 15% 792 164 RSA 456 25% 365 22% 299 116 USA 75 16% 65 16% 56 27 Canada 498 20% 415 24% 336 154 Other 39 25
Slide 23: Cash and Investments
Jun 05 Jun 04 % Var A$m A$Sm Company Cash 116.7 126.6 Client Cash 140.7 131.5 Investments 174.9 224.0 Total 432.3 482.1 Cash reductions this year due to special dividend, profit decrease, Britannic progress payment and growth in corporate sales/receivables
Slide 24: Depreciation & Amortisation
Depreciation & FLIGHT CENTRE kobe Ee Juno5 Jun 04 % Var ASm A$m Depreciation 32.8 25.9 27% Amortisation Goodwill 10.2 10.0 2% Investments 3.1 3.4 -9% 27% increase due to increase in capital expenditure relating to 50% in new shops and refurbishments and the balance in various front end and support b