Corporate Travel Management Limited · ASX:CTD
Corporate Travel Management — H1 2020 Earnings Presentation
32 slides from Corporate Travel Management's earnings presentation, Feb 19, 2020
Slide 1: 2020 Half Year Results Presentation
ASX Announcement 19 February 2020 2020 HALF YEAR RESULTS PRESENTATION Attached is a copy of Corporate Travel Management Limited’s 2020 Half Year Results Presentation. Anne Tucker Company Secretary Contact details Media enquiries: contact Tracy Lee, GRACosway: tlee@gracosway.com.au / +61 414 887 129
Slide 2: 2020 Half Year Results
Date: 19/02/2020 Presenter Name: Jamie Pherous, Managing Director Neale O’Connell, Global CFO 2020 Half Year Results
Slide 3: Disclaimer
Disclaimer The information is this presentation contains summary information about the current activities of Corporate Travel Management Limited ACN 131 207 611 (Company) and its subsidiaries. It should be read in conjunction with the Company’s other periodic and continuous disclosure announcements
Slide 4: Index
Index. Group financial highlights Page 4 Regional performance Page 6 Group financial summary Page 13 Technology competitive advantage Page 19 FY20 Guidance Page 23 Appendix Page 28 Page 3
Slide 5: Group Financial Highlights
Group Financial Highlights Page 4
Slide 6: Group financial highlights
Group financial highlights. • 1H20 Underlying EBITDA flat at $64.5m underscoring the Excluding the impact of AASB 16: strength and resilience of CTM’s business model in difficult Change on macro conditions (excludes impact of AASB 16 Leases) Reported ($AUDm) 1H20 P.C.P • Including AASB 16 Underlying
Slide 7: Regional Performance
Regional Performance Page 6
Slide 8: 1H20 Underlying EBITDA bridge summary
1H20 Underlying EBITDA bridge summary. AUD$m +$1.0 • Organic growth +$0.9m, being North America -$3.5m, other regions +$4.4m in aggregate +$0.9 • Organic growth achieved through market share gains negated by macro-economic client activity declines $64.6 $64.5 -$2.0 • As flagged, global overheads inc
Slide 9: 1H20 regional overview
1H20 regional overview. Australia & New CTM Consolidated Zealand North America Asia Europe Group Period ending Dec-19 Dec-18 Δ% Dec-19 Dec-18 Δ% Dec-19 Dec-18 Δ% Dec-19 Dec-18 Δ% Dec-19 Dec-18 Δ% Dec-19 Dec-18 Δ% REPORTED (AUD) $m $m $m $m $m $m $m $m $m $m $m $m TTV 3,310.2 2,951.5 12% 686.5 649.6
Slide 10: ANZ
ANZ. 1H20 1H19 Δ% Underlying EBITDA up 9% on the p.c.p.: • Region continues to outperform through superior client Reported (AUD) $m% $m% proposition TTV 686.5% 649.6% 6% • Improved margin a result of client migration to CTM technology suite Revenue 61.7% 58.3% 6% • Excellent growth given client acti
Slide 11: Asia
Asia. 1H20 1H19 Δ% Underlying EBITDA up 6% on the p.c.p.: • An exceptional result in difficult 1H20 conditions (HKG Reported (AUD) $m% $m% demonstrations, US/China trade war) TTV 1,299.8% 1,070.5% 21% • TTV and revenue growth include Lotus 1QFY19 contribution versus the p.c.p. Revenue 43.0% 38.3% 12
Slide 12: North America
North America. 1H20 1H19 Δ% Underlying EBITDA down 20% on the p.c.p.: • TTV growth of 10% a result of new business wins with technology Reported (AUD) $m% $m% offering now the key driver for clients choosing CTM, however onboarding of clients was slower than expected TTV 758.5% 689.9% 10% • Revenue
Slide 13: Europe
Europe. Underlying EBITDA up 15% on the p.c.p.: 1H20 1H19 Δ% • An exceptional result in difficult macro-economic Reported (AUD) $m% $m% conditions with significant political uncertainty surrounding Brexit TTV 565.4% 541.5% 4% 47.7% 43.3% 10% • Consistently gaining market share Revenue Underlying EBI
Slide 14: Group Financial Summary
Group Financial Summary Page 13
Slide 15: Comparative underlying profit and loss
Comparative underlying profit and loss. $AUD (m) 1H20 1H19 Δ% • Underlying EBITDA flat on the p.c.p. TTV 3,310.20 2,951.50 12% • Underlying NPAT decline of 8% primarily due to: Revenue 222.2 210.2 6% Underlying EBITDA# 64.5 64.6 0% • software amortisation up $1.7m on p.c.p. • 1H20 effective tax rate
Slide 16: Underlying EBITDA reconciliation
Underlying EBITDA reconciliation. $AUD(m) 1H20 Non-recurring items: EBITDA US Legal Settlement Provision – hourly paid employees 60.8 US legal settlement provision 3.1 • Under California law, employers must be able to prove employee meal and rest breaks were actually taken Acquisition and other cost
Slide 17: Comparative statutory balance sheet
Comparative statutory balance sheet. $AUD(m) DEC 19 JUN 19 • Lower current assets and liabilities to December due to timing and seasonal variation Cash 86.3 138.8 Receivables and other 278.5 339.3 • Total drawn debt reduced by $14.0m to $25.3m during 1H20 (2H19 $39.3m) Total current assets 364.8 478
Slide 18: Cash flow summary
Cash flow summary. $AUD (m) 1H20 1H19 • Operating cash conversion of 27% for 1H20, primarily EBITDA 64.9 63.2 due to the timing cycle of fixed supplier payments at 31 Non cash items 2.1 1.5 December 19 versus p.c.p. Change in working capital (46.9) (36.5) • Expect 2H20 reported operating cash flow t
Slide 19: Cash flow break down between P&L and balance sheet movements
Cash flow - break down between P&L and balance sheet movements. 1H18 2H18 FY18 1H19 2H19 FY19 1H20 This table demonstrates: $AUD (m) $’000 $’000 $’000 $’000 $’000 $’000 $’000 Cash flows from operating activities • Breakdown of receipts and payments into P&L and balance sheet movements Receipts from
Slide 20: Technology Competitive Advantage
Technology Competitive Advantage Page 19
Slide 21: Focus on value-add technology
Focus on value-add technology. Technology strategy enables productivity gains Technology Hubs Located in all Regions Increasing Revenue and EBITDA per FTE • Customers embracing (AUD$’000) On-line adoption (1H20) CTM technology $172 Opportunity exists in NA, Asia • Built in-markets, for- 80% 80% $157
Slide 22: Powerful CTM content factory
Powerful CTM content factory. 96% of Air Volume ➢ Content Factory is the core component of the CTM distribution GDS architecture NDC ➢ Managing preferencing, decision CONTENT FACTORY logic and connectivity API FUTURE ➢ Ensures our customer and suppliers have maximum relevant customised inventory and
Slide 23: Usable and useful technology
Usable and useful technology. CTM SMART Portal CTM Ride Share Lightning Hotel Features Welcome Peter. Traveller Tracker Lightning Online Booking Tool CTM Mobile ANZANZ version shown Page 22
Slide 24: FY20 Guidance
FY20 Guidance Page 23
Slide 25: FY20 Guidance update - coronavirus impact
FY20 Guidance update - coronavirus impact. Coronavirus (Covid-19) impact assumptions: The impact will be a function of duration and severity (reluctance/inability to travel) Duration: • CTM’s experience in previous pandemics* has been used to estimate the potential impact of Covid-19 to earnings: •
Slide 26: FY20 Guidance update continued
FY20 Guidance update continued. Impact of Covid-19 on 2H20 guidance: • Until the very recent Covid-19 virus travel restrictions, CTM tracking towards the lower end of underlying EBITDA guidance, consistent with our assumptions shared with the market at the beginning of the reporting period. • Experi
Slide 27: Beyond FY20
Beyond FY20. CTM is facing the most extraordinary combination of macro challenges in FY20 it has seen in any one financial year in its 25 year history CTM expects to cycle off very weak FY20 financial performance into better conditions into FY21. • The underlying business continues to perform well,
Slide 28: Summary- focus remains on long-term strategy and execution
Summary- focus remains on long-term strategy and execution. A track record of strong performance and execution • CTM has been successfully operating for 25 years • Since inception in 1994 CTM has delivered TTV, EBITDA and dividend growth in 24 of 25 years, in all economic conditions Huge untapped gr
Slide 29: Appendix
Appendix Page 28
Slide 30: Long-term average operating cash conversion near 100%
Long-term average operating cash conversion near 100%. Operating Cash Conversion % at half yearly reporting dates % 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 Cash Conversion % - Statutory EBITDA Cash Conversion % - Average • The operating cash
Slide 31: Profit and loss impact AASB16 - Leases
Profit and loss impact AASB16 - Leases. Pre AASB 16 Adoption of AASB 16 Dec 2019 Dec 2018 AUD$’000 AUD$’000 AUD$’000 AUD$’000 Total Revenue 222,174 222,174 210,193 Total revenue and other income 222,290 0 222,290 212,200 Interest income (205) 0 (205) (111) Employee benefits (119,179) 0 (119,179) (11
Slide 32: travelctm.com
ccm travelctm.com
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