Hostelworld Group Plc · LSE:HSW
Hostelworld — FY2022 Earnings Presentation
29 slides from Hostelworld's earnings presentation, Mar 22, 2023
Slide 1: 2022 Preliminary Results
2022 Preliminary Results 22 March 2023 nd
Slide 2: Disclaimers
Disclaimers NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO ANY JURISDICTION IN WHICH SUCH DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. This presentation has been prepared by Hostelworld Group plc (the “Company") for informational and background purposes only. The foll
Slide 3: Highlights
Highlights
Slide 4: Key Highlights
Key Highlights 2022 a year of significant recovery and strategic progress: ● EBITDA positive in line with market guidance ● Strong recovery in demand as Omicron impact receded ● Launched innovative and differentiated ‘Social’ strategy ● Continued cost discipline ● Continued progress in ESG agenda We
Slide 5: FY 2022 – Financial Summary
FY 2022 – Financial Summary €470M €69.7M 4.8M Net GMV1 Net Revenue2 Net Bookings +303% vs FY21 +312% vs FY21 +228% vs FY21 -4% vs FY19 -14% vs FY19 -30% vs FY19 €14.90 7.7M 17.4M Net ABV Total Travellers (PAX) Net Bednights +23% vs FY21 +220% vs FY21 +223% vs FY21 +24% vs FY19 -31% vs FY19 -26% vs F
Slide 6: FY'22 Results
FY’22 Results
Slide 7: Strong demand recovery in FY'22
Strong demand recovery in FY‘22 Net GMV1 Generated Revenue2 Net Bookings3 €m €m m 500 80 5 4x 70 3.3x 400 4x 4 60 50 300 3 40 200 2 30 20 100 1 10 0 0 0 FY’21 FY’22 FY’21 FY’22 FY’21 FY’22 1. Net GMV is GMV (Gross transaction value of bookings on our platform) less cancellations 2022 PRELIMS MAR 202
Slide 8: Net Revenue growth driven by higher booking volumes and ABVs
Net Revenue growth driven by higher booking volumes and ABVs €m 80.0 0.8 69.7 10.8 -0.8 Strong revenue growth driven by: 70.0 • Net booking volume +228% vs. FY’21 42.0 60.0 (+3.3m) 50.0 • ABV +23% vs. FY’21 (+€2.79) • Lower cancellation rate of 13% vs. 40.0 17% in FY’21 30.0 Partially offset by: 20.
Slide 9: Net margin growth driven by increased revenues and more efficient marketing spend
Net margin growth driven by increased revenues and more efficient marketing spend €m 30.0 2.8 26.3 Strong net margin1 growth driven by: 25.0 5.1 - 0.8 • Net booking volume +228% vs. FY’21 (+3.3m) 20.0 15.5 • ABV +23% vs. FY’21 (+€2.79) 15.0 • Marketing efficiency supported by conversion improvement
Slide 10: Maintaining strong cost discipline, FY'22 below pre-Covid levels
Maintaining strong cost discipline, FY‘22 below pre-Covid levels €m FY’22 costs remain lower than FY’19: 30.0 28.0 • Increase in W&S vs. FY’21, a combination of reduced wage subsidy supports and 24.9 25.0 modest headcount increase (FY’22 avg 239, FY’21 avg 226) 20.9 20.0 • Increase in temporary cont
Slide 11: Return to positive EBITDA for FY'22
… resulting in a return to positive EBITDA for FY‘22 €m 10.0 2.8 Full year EBITDA +€1.3m, compared to 5.0 20.6 -0.8 guidance of c. €1.0m 1.3 • Normal travel patterns resuming in 0.0 -4.0 primary markets, accelerating in H2’22 with the reopening of Asia and Oceania -5.0 • App-centric social strategy
Slide 12: Strong cash position as we return to profitable growth
… and a strong cash position as we return to profitable growth €m 100.0 70.0 Year end closing cash €19.0m, in line with 80.0 guidance: • H2’22 cash profile reflecting traditional seasonality1 60.0 • €1.3m cash interest paid on €30m 5- - 42.9 year term facility2 40.0 • Refinance process underway with
Slide 13: Expanding our hostel supply coverage
Expanding our hostel supply coverage Hostel bednights sold FY’22, Millions1 USA & Canada Western Europe Eastern Europe North Asia 3% 40% 10% 8% Market Market Market Market 92% 6M 78M 78% 20M 56% 16M 64% Global Central America 100% 5% MEA South Asia Australia Market 4% 15% N. Zealand Market 6% 10M 86
Slide 14: Continued progress of ESG agenda
Continued progress of ESG agenda Environmental Social Governance ● Making sustainability a ● Enhanced employee policies ● Inclusion of ‘Sustainability at competitive advantage1 promoting health and wellbeing Hostelworld’ in FY’22 Annual Report ● Hostels are the most sustainable ● Awarded Investors i
Slide 15: Strategy Update
Strategy Update
Slide 16: Our Mission
Our Mission Help travellers find people to hangout with
Slide 17: Our pioneering social network is the cornerstone of our strategy
Our pioneering social network is the cornerstone of our strategy Revenue Growth ● New customer growth Unique customer need led growth strategy ● Strong retention rates Margin Growth X EBITDA/FCF ● Reduces CAC App centric Increased ● Lower marketing cost as a % EBITDA growth delivery model of net rev
Slide 18: We connect travellers into highly relevant social networks
We connect travellers into highly relevant social networks Customer invited Customer leaves Customer signs up to into City and Hostel City and Hostel Chat our Social Network Books on any platform Chat Groups Groups (web, iOS, or Android) 14 days before 3 days after check-in check-out OTA only custom
Slide 19: The network continues to expand rapidly
The network continues to expand rapidly Percentage of total bookings made by Percentage of Members who use Social Network Members1 Social features2 60% 90% 88% 80% 86% 84% 50% 54% 55% 81% 52% 77% 50% 70% 48% 73% 46% 70% 40% 43% 60% 65% 40% 61% 37% 50% 30% 32% 47% 40% 42% 25% 20% 30% 33% 20% 10% 13%
Slide 20: Regional recovery improving as travel demand returns
Regional recovery improving as travel demand returns 220% 200% 180% 160% Monthly net bookings by destination 140% (as a % of 20191) 120% 100% 80% 60% 40% 20% 0% 2 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Bookings as a % of FY19 Africa A
Slide 21: Generated revenue outpacing 2019, at favourable marketing costs
Generated revenue outpacing 2019, at favourable marketing costs €m 2022 2023 10.0 100% 90% 8.0 80% 70% 6.0 60% 50% 4.0 40% 30% 2.0 20% 10% 0.0 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 1 2019 2022/23 Marketing as % of Gen Rev 2 2022 PRELIMS MAR 2023 | 21 1. March data based on M
Slide 22: Continuing to invest in our Social platform
Continuing to invest in our Social platform Extend network capabilities AI Personalisation engine ✓ Richer user profiles Connect like-minded travellers ✓ Broader messaging capabilities Suggest things travellers might want to do ✓ New ways to connect with other travellers Suggest places travellers mi
Slide 23: Expanding functionality to (further) deliver on our Mission
Expanding functionality to (further) deliver on our Mission ✓ Hostel Local Roamies Group Events Getaways Tours 2022 PRELIMS MAR 2023 | 23
Slide 24: Near Term Guidance
Near Term Guidance FY 2022 FY 2023 Results Trends Net Bookings 4.8m ~ 25% Net GMV €470m ~ 20% Net Revenue €70m ~ 20% Marketing % of Revenue 59% 50% - 55% Adj. EBITDA €1.3m Mid to high-teens margin % 2022 PRELIMS MAR 2023 | 24
Slide 25: Well positioned and on track for FY 2023
Well positioned and on track for FY 2023 Well positioned: ● Back to profitable growth in FY 2022 ● Highly differentiated growth strategy already working as anticipated ● Uniquely positioned to win in this category vs other OTAs ● Strong cost discipline drives operating leverage ● Making sustainabili
Slide 26: Appendices
Appendices
Slide 27: Income Statement
Income Statement FY’22 FY’21 €’m €’m Revenue 69.7 16.9 Administrative expenses1 (71.5) (37.1) Net revenue increased to €69.7m (FY’21: €16.9m) Depreciation and amortisation expenses (11.6) (12.4) 4.8m net bookings (FY’21: 1.5m) with strong demand in Europe and Share of results of associate (0.2) (0.2
Slide 28: Balance Sheet
Balance Sheet FY’22 FY’21 €’m €’m Intangible assets 73.4 79.4 Property, plant and equipment 0.7 0.3 Deferred tax assets 9.2 8.4 Investment in associate 1.0 1.2 Cash and cash equivalents1 0.8 0.8 Total non-current assets 85.0 90.0 ● Reduced carrying value of intangible assets from €79.4m to Trade and
Slide 29: Cash Flow Statement
Cash Flow Statement FY’22 FY’21 €’m €’m Adjusted EBITDA 1.3 (17.3) Working capital movement 0.2 4.8 Capitalisation and acquisition of intangible (4.6) (4.4) assets Exceptional costs (0.8) (0.6) €0.2m increase in working capital movement due to: Purchase of property, plant and equipment (0.2) (0.1) •