Flight Centre Travel Group Limited · ASX:FLT
Flight Centre Travel — FY2020 Earnings Presentation
49 slides from Flight Centre Travel's earnings presentation, Aug 27, 2020
Slide 1: Full Year Results Presentation (FY20)
Full Year Results Presentation (FY20) August 27, 2020
Slide 2: Today's Presenters
Today’s Presenters Graham Turner Adam Campbell Chris Galanty Melanie Waters-Ryan ▪ Global MD/CEO ▪ CFO ▪ Corporate – CEO ▪ Leisure – CEO ▪ Introduction and Outlook ▪ Financial Results ▪ Corporate Update ▪ Leisure Update ▪ (Sections 1 and 5) ▪ (Section 2) ▪ (Section 3) ▪ (Section 4) 2
Slide 3: Introduction
Introduction Graham Turner
Slide 4: FY20 overview
FY20 overview ▪ Limited revenue generation opportunities since widespread travel restrictions were applied in March 2020 to slow COVID-19’s spread Most challenging year ▪ 99.4% decrease in Australian outbound travel during Q4 (short-term resident departures – see Appendix 1) in FLT’s history ▪ Losse
Slide 5: Experienced Management Team
Experienced Management Team Strong global leadership group with a long history in the business Graham “Skroo” Turner Melanie Waters-Ryan Chris Galanty Adam Campbell Global Managing Director Leisure Chief Executive Corporate Chief Chief Financial and CEO Officer Executive Officer Officer ● 39 years a
Slide 6: Financial Results
Financial Results Adam Campbell
Slide 7: FY20 financial results
FY20 financial results Losses incurred – as outlined ▪ $510m underlying loss before tax during FY20 (FY19: $343.1m PBT) in August 13 market ▪ $849m actual (statutory) FY20 result (FY19: $343.5m PBT) including circa $340m in one-offs (mainly non-cash) announcement – after solid ▪ $102.7m underlying 1
Slide 8: Impact Of COVID-19
Impact Of COVID-19 Eight Months to Feb 29 March 2020 FY20 Q4 Solid start to the year Governments act to slow virus’s spread Detailed response plan implemented ▪ Cash and liquidity runway extended - ▪ Full border closures implemented, along $900m raised via $700m capital raising + ▪ Circa $150m under
Slide 9: Short-term objectives achieved
Short-term objectives achieved Strategic Objective Short-Term Target July 2020 Outcome ▪ Longer liquidity runway – capital raising, ▪ $1.1b in liquidity (pre current bank Access to additional funds debt facilities and asset sales covenants) ▪ $53m net operating cash outflow achieved ▪ $65m net opera
Slide 10: Cash preservation actions
Cash preservation actions $1.9b in annualised savings delivered ▪ Temporary reductions to reflect low revenue trading climate ▪ Two thirds of global workforce stood down or positions made redundant ▪ Possibility of further workforce reductions if heavy travel restrictions are maintained and governme
Slide 11: Hibernation cost bases (July)
Hibernation cost bases (July) Now tracking at 31.5% of pre-COVID global cost base Canada 29% Europe 33% UK 28% United States 33% Asia 35% India 39% New Zealand 33% South Africa 34% Australia 29% Financial Results 11
Slide 12: Ongoing revenue generation
Ongoing revenue generation Sales increasing month-on-month since April ▪ Generally, recovering at a more rapid pace than leisure business ▪ More heavily weighted towards domestic/regional travel (circa 60% of TTV globally) ▪ Solid base of essential services customers among diverse global client base
Slide 13: Global Activity (July)
Global Activity (July) Now tracking at 7% of pre-COVID global sales Canada Corporate 9% Europe Leisure 3% Corporate 20% UK Corporate 9% United States Leisure 8% Corporate 9% China Leisure 16% Corporate 26% SE Asia Corporate 10% India Corporate 3% New Zealand South Africa Australia Corporate Corporat
Slide 14: Government support
Government support ▪ FLT welcomes the various policy packages that governments throughout the world are delivering to help businesses retain as many workers as possible and overcome the extraordinary trading conditions currently Continued engagement faced ▪ The company continues to engage proactivel
Slide 15: Lengthy liquidity runway (July)
Lengthy liquidity runway (July) Liquidity position a) Working capital assets (excl. cash and investments) As at 31 July 2020 $m As at 31 July 2020 $m Cash and investments 1,918 Receivables 308 Working capital assets (excl. cash and investments) 538 a Override debtors 86 Working capital liabilities (
Slide 16: Profit & loss
Profit & loss AUD $'m FY20 FY19 Mvmt % Key Points Group TTV 15,303 23,728 (35.4%) ▪ COVID-19 impacted from late February Operating revenue 1,898 3,055 (37.9%) ▪ Underlying PBT of $103m at 31 Total revenue 1,898 3,055 (37.9%) December and circa $150m at 29 February FV gain on change in control (3) 20
Slide 17: FY20 one-offs
FY20 one-offs Once-off Impact COVID-19: $103m Business impairment $140m ($46m incurred during 1H) Other impairment $18m $339m negative Loss on disposal – shop assets $29m impact (mainly non-cash) Supplier exposure $29m ($7m incurred during 1H) Upside investment share of losses $10m ($5m incurred dur
Slide 18: Balance sheet
Balance sheet AUD $'m As at June 20 As at June 19 Mvmt % Key Points Cash & cash equivalents 1,867 1,172 59% ▪ $1.9b cash on hand at 30 June, of Financial assets 8 115 (93%) Trade & other receivables 320 559 (45%) which $88m is restricted Contract assets Other current assets 97 146 356 105 (73%) 40%
Slide 19: Cash flow statement
Cash flow statement AUD $'m FY20 FY19 Mvmt % Key Points Operating activities ▪ Positive net operating cash flows, Operating activities before interest and tax 54 371 (85%) including government subsidies Net interest and tax paid (48) (92) (48%) received Cash inflow from operating activities 6 279 (9
Slide 20: Corporate
FLIGHT, CENTRE TRAVEL GROUP”
Slide 21: Segment Results: Corporate
Segment Results: Corporate Segment result AUD $'m FY20 FY19 Mvmt % TTV 6,911 8,970 (23%) External Revenue 727 938 (23%) PBT (12) 288 (104%) PBT (underlying) 74 268 (72%) Margins Revenue Margin 11% 10% 6 bps PBT Margin (0%) 3% (339 bps) Corporate 21
Slide 22: Pre-COVID: A $US1.5tn Global Corporate Travel Market
Pre-COVID: A $US1.5tn Global Corporate Travel Market Denotes FLT equity presence Source: GBTA & Rockport Analytics Corporate 22
Slide 23: Pre-COVID: FLT's Corporate Business
Pre-COVID: FLT’s Corporate Business ENTERPRISE Truly Global with strong key Top Flagship markets Pre-COVID > $100m spend High volume Result Snapshot Global with limited resources $AU287m profit FY19 GLOBAL Multi-country around travel program $AU9b TTV FY19 > $50m spend Medium volume $AU1.3b FCM cust
Slide 24: COVID-19: Immediate reactions
COVID-19: Immediate reactions Cost Control Glocal Structure Critical Activity ✔ Business critical activity and projects ✔ Disciplines of Finance, Marketing and identified and resourced appropriately Technology globalized to improve ✔ Cost reduction baseline established ✔ Customer implementation and
Slide 25: COVID-19 Response: Positioning for Recovery
COVID-19 Response: Positioning for Recovery INVESTMENT IN CUSTOMERS ✔ Continued customer wins and implementation ✔ Excellence in customer relationships ✔ State of the Market customer research ✔ Redefined supplier partners as customers INVESTMENT IN TECHNOLOGY ✔ Acquired full control of customer book
Slide 26: FCM customer activity
FCM customer activity WON FY21 YTD $390m CURRENTLY IMPLEMENTING $835m Strong pipeline from FY20 and good start to FY21 HOT PIPELINE* $750M RETENTION RATE 97% Notes: All amounts in AUD *Customers due to make decision within next 3 months Corporate 26
Slide 27: What makes FCM unique?
What makes FCM unique? CUSTOMER EXPERIENCE AND INNOVATION ✔ FCM recognises the customer need for flexibility and agile experience. ✔ In-house technology enables ownership of the user experience through a world class platform with flexibility to integrate with leading vendors. WE ARE GLOCAL ✔ FCM has
Slide 28: What makes Corporate Traveller unique?
What makes Corporate Traveller unique? CARE UPLIFTED Dedicated experts in omnichannel environment Service focussed DNA Customer base of 10,000 with av. 7 year tenure Unlike: Tech only and legacy SUPERIOR UX SME EXPERTS Consistent UI & advanced UX ISO-27001 and SOC-2 Personalised booking flow Speciali
Slide 29: Leisure
Leisure Melanie Waters-Ryan
Slide 30: Segment Results: Leisure
Segment Results: Leisure Segment result AUD $'m FY20 FY19 Mvmt % TTV 7,442 13,878 (46%) External Revenue 1,126 2,017 (44%) PBT (761) 99 (865%) PBT (underlying) (527) 129 (508%) Margins Revenue Margin 15% 15% 63 bps PBT Margin (10%) 1% (1,094 bps) Leisure 30
Slide 31: Pre COVID-19: Transformation
Pre COVID-19: Transformation GLOBAL LEISURE: 2-SPEED TRANSFORMATION FOCUS SPEED 1 SPEED 2 Spanning core leisure business & focussing on Speed 1 fast Pivots & new models in Leisure focused on operational effectiveness tracked in emerging & future trends where value in market is response to ▪ Operatio
Slide 32: COVID 19: Immediate reactions
COVID 19: Immediate reactions Cost Control Refunds Structuring & Communications ✔ Significant reduction in bricks & mortar ✔ Established global leisure leadership team ✔ To date, TTV of $600m+ refunded to our network (consultants and shops) leisure customers in Australia alone ✔ Mini Task Forces foc
Slide 33: Global leisure brands & models
Global leisure brands & models CANADA UK Models: B&M, SBT, Models: B&M, SBT, Touring, Online, B2B, Premium Online Brands: FCB, FCBT, Brands: FCB, FCBT, FCB.com, FC Associates, TopDeck, Backroads, Student LDV Universe SOUTH EAST ASIA Models: DMC, Hotel Management USA Brands: Discova, Cross INDIA Hote
Slide 34: Global Leisure tomorrow
Global Leisure tomorrow Flight Centre, the The leading The most distinctive go-to platform and premium/luxury multi-channel product proposition brand in market travel retailer with distributed across a with superior irresistible deals large network of service and for getaway business partners expert
Slide 35: Global Leisure tomorrow: Rejuvenate Flight Centre Brand
Global Leisure tomorrow Rejuvenate Flight Centre Brand Flight Centre in Australia, New Zealand and South Africa will be the most famous travel retail brand, with leading market share and the #1 customer choice for all travellers. Flight Centre in the Americas and UK will be famous as a brand servici
Slide 36: FCB digital commerce
FCB digital commerce ANZ South Africa Canada Continuous investments in Upgrading to proprietary Investments in app, flights, introduction of OBT. Well positioned in the packaging offers, talent and packages and new deals. market. tech to grow e-commerce business. FY20: $321M TTV Improved Supply Chai
Slide 37: E-Commerce portfolio
E-Commerce portfolio Opportunity to leverage highly successful operating models and technology. Jetmax StudentUniverse Low-cost OTA operating in 5 countries. World’s largest OTA for youth/students. Delivers a wide range of low-cost options Membership model with CUG rates and in an easy to use self s
Slide 38: Global Leisure Tomorrow: B2B Growth
Global Leisure Tomorrow B2B Growth FLT to become of the home of the Travel Entrepreneur through a leading commercial, product and technical offering 1 2 3 Attractive commercial Widest range of content Market leading technology offering to grow and retain supplied to member and platform enabling trav
Slide 39: Global Leisure Tomorrow: Premium/luxury
Global Leisure Tomorrow Premium/luxury A leading network of premium advisors famous for providing 7-star service and unique products for discerning & luxury travellers. 1 2 3 Largest network of Unique product and a Drive growth through premium advisors and move to a more luxury career path progressi
Slide 40: Global Leisure Tomorrow: The Travel Group
Global Leisure Tomorrow The Travel Group Global Procurement, DMC, Hotels and Touring providing industrialised product capability for FLT leisure and corporate businesses to service customers with content both B2C and B2B and an improved customer experience. External sales leveraging group investment
Slide 41: Investments in tomorrow
Investments in tomorrow Continuing to selectively invest to ensure global leisure is well positioned to capitalise from a return in demand ▪ Product design Helio ▪ Consultant platform ▪ Customer experience ▪ Packaging E-commerce ▪ Ancillaries Platform ▪ Membership B2B ▪ Agent portal Platform ▪ Integ
Slide 42: Outlook
FLIGHT,CENTRE TRAVEL GROUP”
Slide 43: Outlook
Outlook Tackling issues that are ▪ Phase 1 response completed within our control and ▪ Significant cost reductions banked achieving short-term ▪ Healthy liquidity runway in place objectives ▪ Revenue increasing month-on-month from April lows Government restrictions ▪ Travellers still generally unabl
Slide 44: Questions?
ELIGHT, CENTRE Questions?
Slide 45: Appendices
FLIGHT,CENTRE TRAVEL GROUP” Appendices
Slide 46: Appendix 1: Traffic Data
Appendix 1: Traffic Data Australian Short-term resident departures down 99.4% during Q4 Source: Australian Bureau of Statistics Appendices 46
Slide 47: Appendix 2: Results Summary
Appendix 2: Results Summary 5-YEAR SUMMARY FY20 FY19 FY18 FY17 FY16 TTV $15,303m $23,728m $21,818m $20,109m $19,305m Income margin 12.4% 12.9% 13.4% 13.8% 13.7% EBITDA $(588.6m) $427.3m $442.2m $402.1m $413.9m PBT $(849.3m) $343.5m $364.3m $325.4m $345.0m PBT (underlying) $(509.9m) $343.1m $384.7m $
Slide 48: Appendix 3: Segment Results
Appendix 3: Segment Results Business Segments AUD $'m LEISURE CORPORATE OTHER FY20 FY19 FY20 FY19 FY20 FY19 TTV 7,442 13,878 6,911 8,970 970 880 Revenue 1,126 2,017 727 938 46 100 PBT (761) 99 (12) 288 (76) (44) PBT (underlying) (527) 129 74 268 (57) (54) Margins Revenue Margin 15% 15% 11% 10% 5% 11
Slide 49: Appendix 4: Segment Results
Appendix 4: Segment Results Geographic Segments AUD $'m ANZ AMERICAS EMEA ASIA OTHER FY20 FY19 FY20 FY19 FY20 FY19 FY20 FY19 FY20 FY19 TTV 7,344 12,506 3,646 5,537 2,455 3,412 1,667 1,946 191 327 Revenue 871 1,568 446 650 332 441 67 99 182 298 PBT (424) 181 (97) 102 (66) 108 (17) 12 (246) (59) PBT (
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