Flight Centre Travel Group Limited · ASX:FLT
Flight Centre Travel — Merger or Acquisition (November 2007)
19 slides from Flight Centre Travel's merger presentation, Nov 12, 2007
Slide 1: Investor Briefing: Liberty Travel Acquisition
For personal use only Investor Briefing Liberty Travel Acquisition November 2007 0
Slide 2: Important Notice
Important Notice For personal use only This presentation has been prepared by Flight Centre Limited (FLT). The information in this presentation is not financial product advice. This presentation has been prepared without taking into account the investment objectives, financial situation or needs of
Slide 3: Executive Summary
Executive Summary For personal use only • Following from its recent upgraded profit guidance, Flight Centre announces the acquisition of Liberty Travel, a leading US retail and wholesale leisure travel business • Fast-tracks FLT’s global growth and represents a significant step in fulfilling the sta
Slide 4: Flight Centre's Growth
Flight Centre’s Growth For personal use only • Following a strong start to FY2008, FLT expects to report healthy underlying growth (pre-Liberty acquisition) • 40% growth in net profit before tax for the first half, in comparison to a relatively weak previous corresponding period • Minimum of 15% pre
Slide 5: Flight Centre's Growth (cont'd)
Flight Centre’s Growth (cont’d) For personal use only • Since the privatisation proposals earlier this year, FLT has continued to demonstrate improvement in its underlying business, due largely to the following drivers: • More consistent approach to service fees and mark ups in retail and corporate
Slide 6: Overview of Liberty Travel
Overview of Liberty Travel For personal use only Top Travel Agencies in U.S.(1) • Liberty Travel is a leading US retail Primary Business 2006 TTV and wholesale leisure travel 1 American Express Business Travel Corporate $24.2 bn 2 Carlson Wagonlit Travel Corporate $22.1 bn company 3 Expedia Inc Onli
Slide 7: Overview of Liberty Travel (cont'd)
Overview of Liberty Travel (cont’d) For personal use only • Liberty Travel and GOGO have a significant footprint in key US markets Liberty GOGO Flight Centre North America 6
Slide 8: Overview of Liberty Travel (cont'd)
Overview of Liberty Travel (cont’d) For personal use only • The Liberty Travel will provide significant scale to the existing Flight Centre North America business Comparative Metrics – FY2007 Flight Centre Liberty Travel GOGO North America TTV(1) A$1,244m A$1,031m A$822m No. Outlets 193 40 218(2) 1.
Slide 9: Strategic Rationale
Strategic Rationale For personal use only • Directly aligned with FLT’s strategic goals for growth • Significant step in long-term aim to have large scale operations in North America • Unique opportunity for FLT and a strategic asset; no similar assets from a brand, scale, or geographic perspective
Slide 10: Strategic Rationale (cont'd)
Strategic Rationale (cont’d) For personal use only • Opportunity to optimise the business • Strengthens relationships with key suppliers and increases contract negotiating power • Brings together market leading brands • Opportunity for revenue and cost synergies over time • Opportunities for combine
Slide 11: Strategic Rationale (cont'd)
Strategic Rationale (cont’d) For personal use only • Increased diversification of revenue base, with pro forma FY2007 TTV increase of 26% to $11.2bn • Pro forma North America TTV moving from 9% of total pre acquisition, to 28% post Pre Acquisition Post Acquisition Actual FY2007 TTV of $8.9bn(1) Pro
Slide 12: Transaction Overview
Transaction Overview For personal use only • Acquisition price of US$135m (with associated costs of c. US$5m) • 6.8x LTM EBITDA multiple • Unaudited pro forma LTM June 2007 EBITDA of US$19.9m(1), pre-synergies • No unusual conditions precedent, no expected issues • Conditional on no MAC, obtaining t
Slide 13: Pro Forma Financials
Pro Forma Financials For personal use only • The acquisition of Liberty Travel would increase FLT’s FY2007 revenue by 20% and EBITDA by 14% • Pro forma normalised basis, before benefits of optimisation • Acquisition is expected to be EPS accretive in FY2009 (before benefits of optimisation) Pro Form
Slide 14: Integration
Integration For personal use only • FLT will integrate a new leadership team within the existing Liberty management structure to: • Drive profit growth, and • Ensure seamless coordination with both existing North American operations and FLT head office • Post acquisition, Liberty to be jointly led b
Slide 15: Integration (cont'd)
Integration (cont’d) For personal use only • A comprehensive integration strategy has been developed – scope to grow TTV and profits, optimise the business and pursue organic growth opportunities • Some of the highlights of the approach to integration include: • Liberty's product will, over time, be
Slide 16: Capital Markets Activity
Capital Markets Activity For personal use only • In conjunction with the Liberty acquisition, FLT to conduct an institutional placement for $100m via a bookbuild • FLT founders to also sell-down up to 2.6m shares at the same time • Consistent with previous guidance on founders’ intentions and ensure
Slide 17: Recap
Recap For personal use only • Following a strong start to FY2008, FLT expects to report healthy underlying growth • 40% growth in net profit before tax for the first half • Excluding Liberty Travel, minimum of 15% pre tax profit growth (excluding the abnormal gain in FY2007) for the full year • FLT
Slide 18: Appendix – Comparable Transactions
Appendix – Comparable Transactions For personal use only • At 6.8x LTM EBITDA, the acquisition of Liberty Group has been priced at below the average multiple for other large-scale travel companies EV EV / LTM Announcement Date Acquirer Target US$m EBITDA x March 2007 TUI Travel First Choice Holidays
Slide 19: For personal use only
We go out of our way for you FLIGHT CENTRE Unboeatacle 18 FLIGHT CENTRE
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