Travel Leisure Co. · NYSE:TNL
Travel Leisure — Q3 2024 Earnings Presentation
36 slides from Travel Leisure's earnings presentation, November 2024
Slide 1: Investor Presentation November 2024
+ INVESTOR PRESENTATION November 2024 WO R L D M A R K B I G B E A R BIG BEAR LAKE , CA
Slide 2: Presentation of Financial Information; Forward-Looking Statements
Presentation of Financial Information Forward-Looking Statements Financial information discussed in this presentation includes non-GAAP measures This presentation includes “forward-looking statements” as that term is defined by such as Adjusted EBITDA, Adjusted EBITDA margin, Adjusted diluted EPS, A
Slide 3: Company Overview
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S W O R L D M A R K L E AV E N W O R T H L E AV E N W O R T H , WA Company Overview 3
Slide 4: Travel + Leisure Co.: The Leader in Vacation Ownership
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Travel + Leisure Co.: The Leader in Vacation Ownership LEA DI NG THE • Industry has consolidated around large, branded-name companies T R A NS
Slide 5: Travel + Leisure Co.: By the Numbers
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Travel + Leisure Co.: By the Numbers 270+ 4,000 820K Resorts Worldwide Affiliated RCI Resorts Timeshare Owners Q3‘24 Q3’24 Q3‘24 3.4M 19,000+ 3
Slide 6: Vacation Ownership and Travel and Membership Overview
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S VA C AT I O N O W N E R S H I P T R AV E L A N D M E M B E R S H I P + Overview + Overview • Sales of vacation ownership interests •E xchange s
Slide 7: Consolidation + Product Evolution Driving Industry Transformation
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Consolidation + Product Evolution Driving Industry Transformation TO DAY: S CA L ED & P O I SED HISTORICAL FO R AC CEL ER ATED G R OW TH Fragme
Slide 8: Favorable Trends in the Business
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Favorable Trends in the Business + Secular Growth + Strong Owner + Attractive + Generational In Travel Satisfaction Product Shift • Global leis
Slide 9: New Owner Sales Create Solid Foundation for Future Revenue Growth
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S New Owner Sales Create Solid Foundation for Future Revenue Growth STR ONG P IP EL I N E OF P OT ENT IAL M O R E TH A N 75% O F R EV EN U E S FU
Slide 10: Stable of Brands to Appeal to a Wide Range of Consumers
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Stable of Brands to Appeal to a Wide Range of Consumers Throughout the Stages of Their Lives PR OVEN BRANDS WITH EXPANDED B RAN DS IN BR ANDS G
Slide 11: Resilient Business with Strong Adjusted EBITDA Margins
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Resilient Business with Strong Adjusted EBITDA Margins Vacation Ownership Segment Adjusted EBITDA Margin (1) 30% 24% (2) 24% 25% 23% 23% 23% 22
Slide 12: Consumer Financing Drives Substantial Earnings Stream
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Consumer Financing Drives Substantial Earnings Stream Weighted Average Interest Rate FICO(1) 800 18.0% 17.0% 736 736 739 742 735 725 726 16.0%
Slide 13: Disciplined Approach to Underwriting Has Improved Loan Portfolio
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Disciplined Approach to Underwriting Has Improved Relative Position of Loan Portfolio 12/31/2008 YTD 12/31/2019 9/30/2024 Weighted Avg. FICO 68
Slide 14: Our Travel and Membership Business is Transforming
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Our Travel and Membership Business is Transforming T R AV E L EXC HA NGE T R AVEL CLU B S A N D ME MB E R S H IP • Pressure on volumes as indus
Slide 15: Capital Efficiency Underpins Strong Cash Generation
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Capital Efficiency Underpins Strong Cash Generation I M PROVE D CAPITAL E FFI C I E N CY S U B STANTIAL FR E E CAS H G E N E R ATI O N Inventor
Slide 16: Disciplined and Balanced Capital Allocation Framework
COCM O PA M PA NY NY QUARQT UEAR RLY TERELYS URLT E SSU LT S A D D I TAI D ODN IATLI OFNI N AAL NFCI N I AALN C I A L N O N -N GOAN A-P OV OEVREV RIV E IW EW AND AONUD TLOO UOTK LO O K I N F O RI N MF AT OR IOMNAT I O N R E C O N CGI L AIA ATPS IONS Disciplined and Balanced Capital Allocation Framew
Slide 17: Shareholder-Focused Capital Allocation
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Shareholder-Focused Capital Allocation D IVI D E N D G ROWS S U B STANTIAL I N LI N E WITH B U S I N E S S S HAR E R E PU RC HAS E S $351 CAPIT
Slide 18: Solid Balance Sheet with Manageable Debt Maturities
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Solid Balance Sheet with Manageable Debt Maturities C OR P O R AT E D E BT MAT UR IT IE S ( 3 ) STATS As of September 30, 2024 ($ in millions)
Slide 19: Quarterly Results and Outlook
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S W O R L D M A R K R A N C H O V I S TO S O O R O VA L L E Y, A Z Quarterly Results and Outlook 19
Slide 20: 3Q 2024 Results
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S 3Q 2024 Results T H R E E M O N T H S E N D E D 9 / 3 0/ 2 0 2 4 Net Revenue Gross VOI Sales(1) Adj. EBITDA(1) Adj. Diluted Earnings Per Share
Slide 21: Adjusted EBITDA — 3Q23 v. 3Q24
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Adjusted EBITDA — 3Q23 v. 3Q24 (1) 48 248 (5) 242 (26) 1 (24) 3Q23 Gross VOI Sales(2) Revenue-related Loan loss Net interest Other 3Q24 costs(3
Slide 22: Utilizing a Proven Capital Allocation Framework
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Utilizing a Proven Capital Allocation Framework STR ONG CA SH SHAR EHOLD E R S O L ID GENERATI ON R ET U R N S BA L A N CE S H E E T ADJ U STED
Slide 23: Expectations for 2024
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Expectations for 2024 PR OVIDING UP DAT IN G FOU RT H QUART ER 2024 TA R G E TS GU IDANCE (Prior Guidance) Q4‘ 24E 2024E $915M–$935M Adj. EBITD
Slide 24: Additional Financial Information
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S AC C O R VAC AT I O N C L U B S E B E L PA L M C OV E Q U E E N S L A N D, A U Additional Financial Information 24
Slide 25: Model Sensitivities
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Model Sensitivities Three major drivers to performance in the Vacation Ownership segment Volume Tour Loan Loss Per Guest Growth Provision (VPG)
Slide 26: Adjusted EBITDA to Adjusted Free Cash Flow Conversion %
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S Adjusted EBITDA to Adjusted Free Cash Flow Conversion % 2023 Actuals 100% (25%) 3% 42%(2) (16%) (6%) (14%) Adj. EBITDA(1) Cash Interest Cash Ta
Slide 27: Non-GAAP Reconciliations
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON- OV E R V I E W A N D O U T LO O K I N F O R M AT I O N GAAPS 27
Slide 28: Appendix: Non-GAAP Reconciliations
APPENDIX: NON-GAAP R E C O N C I L I AT I O N S 28
Slide 29: Appendix: Non-GAAP Reconciliation
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S A P P E N D I X : N O N - G A A P R E C O N C I L I AT I O N Travel + Leisure Co. Net Income to Adjusted EBITDA Reconciliation ($ in millions)
Slide 30: Appendix: Non-GAAP Reconciliation
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S A P P E N D I X : N O N - G A A P R E C O N C I L I AT I O N Net Cash Provided by Operating Activities from Continuing Operations to Adjusted F
Slide 31: Appendix: Non-GAAP Reconciliation
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S A P P E N D I X : N O N - G A A P R E C O N C I L I AT I O N Vacation Ownership Net Income to Adjusted EBITDA Reconciliation ($ in millions) YT
Slide 32: Appendix: Non-GAAP Reconciliation
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S A P P E N D I X : N O N - G A A P R E C O N C I L I AT I O N Travel and Membership Net Income to Adjusted EBITDA Reconciliation ($ in millions)
Slide 33: Appendix: Non-GAAP Reconciliation
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S A P P E N D I X : N O N - G A A P R E C O N C I L I AT I O N Reconciliation of Net VOI Sales to Gross VOI Sales ($ in millions) The Company bel
Slide 34: Appendix: Non-GAAP Reconciliation
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S A P P E N D I X : N O N - G A A P R E C O N C I L I AT I O N Reconciliation of Net Income to Adjusted Net Income to Adjusted EBITDA ($ in milli
Slide 35: Appendix: Non-GAAP Reconciliation
C O M PA N Y Q U A R T E R LY R E S U LT S ADDITIONAL FINANCIAL NON-GAAP OV E R V I E W A N D O U T LO O K I N F O R M AT I O N R E C O N C I L I AT I O N S A P P E N D I X : N O N - G A A P R E C O N C I L I AT I O N Net Cash Provided by Operating Activities from Continuing Operations to Adj. Free
Slide 36: Definitions
DEFINITIONS Adjusted Diluted Earnings per Share: A non-GAAP measure, defined by the Company as Adjusted net income divided Adjusted Net Income: A non-GAAP measure, defined by the Company as net income from continuing operations by the diluted weighted average number of common shares. Adjusted Dilute