Slide 1: Results Presentation 1H FY 2023
RESULTS PRESENTATION 1H FY 2023 15th November 2022 1
Slide 2: Disclaimer
DISCLAIMER This presentation is to be read as an introduction to the unaudited condensed consolidated interim financial statements of the Group and contains key information presented in a concise manner on the Group and its financial condition. The information contained in this presentation is extra
Slide 3: Agenda
1. Results Highlights 1.1 Overview 1.2 Outperforming the Market 1.3 Strong 1H FY23 Results 2. Strategy Performance Update: One Year post CMD 3. Closing Remarks 4. Appendix 3
Slide 4: Results Highlights
1. Results Highlights 4
Slide 5: 1.1 Overview
1. Results Highlights 1.1. Overview 1.2 Outperforming the Market 1.3 Strong 1H FY23 Results 5
Slide 6: Strong performance, on track with guidance one year post Capital Markets Day
eDO STRONG PERFORMANCE. ON TRACK WITH OUR GUIDANCE ONE YEAR POST CAPITAL 1.1 MARKETS DAY. WE ARE WELL ON TRACK TO MEET FY25 TARGETS eDO CONTINUES TO DELIVER STRONG BOOKINGS GROWTH ▪ In 1H FY23 eDO achieved strong Bookings, reaching 8.6 million, 50% above FY22 and 48% above pre-COVID-191. ▪ In Octobe
Slide 7: 1.2 Outperforming the Market
1. Results Highlights 1.1. Overview 1.2 Outperforming the Market 1.3 Strong 1H FY23 Results 7
Slide 8: Strong bookings growth despite Omicron, Ukraine war and disruptions
eDO CONTINUES TO ACHIEVE STRONG BOOKINGS GROWTH DESPITE OMICRON, UKRAINE 1.2 WAR, AIR INDUSTRY DISRUPTIONS AND INFLATIONARY PRESSURES eDO BOOKINGS GROWTH VS 2019 Ukraine + High Inflation Omicron Invasion 52% 54% 54% 44% 45% 46% 45% 45% 38% 32% 33% 34% 31% 30% 6% 2% (2%) (11%) (26%) (51%) April '21 M
Slide 9: Superior value proposition outperforms industry peers
eDO SUPERIOR VALUE PROPOSITION OUTPERFORMS INDUSTRY PEERS, GAP EXPECTED TO 1.2 CLOSE AS CORPORATE TRAVEL RETURNS TRADING EVOLUTION VS PRE COVID-19, % eDO 2Q FY23 50% Omicron +64pp vs. IATA Europe +40pp vs. Low Cost 0% -50% -100% 1Q FY21 2Q FY21 3Q FY21 4Q FY21 1Q FY22 2Q FY22 3Q FY22 4Q FY22 1Q FY23
Slide 10: Passenger traffic has mostly grown over the years
OVER THE PAST 40 YEARS, EVEN DURING RECESSION, ENERGY CRISES, ETC 1.2 PASSENGER TRAFFIC HAS MOSTLY GROWN PASSENGER TRAFFIC GROWTH 2011 Economic Crisis 800 3.0x 2.8x 700 1990-1991 2000-2000s 2008 2016 Recession Energy Crisis Lehman Brothers Brexit 2.6x 600 2.4x 2001 2.2x 500 1987 September 11 attacks
Slide 11: Highly variable cost structure benefits eDO despite inflation
EVEN WITH INFLATION, eDO BENEFITS FROM HIGHLY VARIABLE COST STRUCTURE 1.2 eDO less impacted as most of the Variable costs linked directly to our volumes eDO COST STRUCTURE BREAKDOWN OF VARIABLE COSTS Acquisition Costs NOT affected by inflation, driven by: 15% Prime member growth targeted Competitive
Slide 12: 1.3 Strong 1H FY23 Results
1. Results Highlights 1.1. Overview 1.2 Outperforming the Market 1.3 Strong 1H FY23 Results 12
Slide 13: Strong growth in Prime cash revenue margin and marginal profit
STRONG GROWTH IN PRIME CASH REVENUE MARGIN AND MARGINAL PROFIT IN THE LAST 1.3 12 MONTHS DUE TO STRONG GROWTH IN PRIME MEMBERS Prime ARPU LTM (€) (*) Cash Revenue Margin LTM (€M) (*) Cash Marginal Profit LTM (€M) (*) 553 84.0 133 80.4 234 42% 72 +120% 54% +100% 66 252 319 96 33 60 38% 50% 156 33 2Q
Slide 14: Strong growth in Cash EBITDA, up 78% year-on-year
STRONG GROWTH IN CASH EBITDA, UP 78% YEAR-ON-YEAR, IN A MARKET STILL TO 1.3 RECOVER FULLY P&L with increase in Prime Deferred Revenue Highlights 1H FY23 1. Success of Prime clear on our total Bookings and market share gains. Cash VAR. VAR. Revenue Margin (*) is already above pre-COVID-19 levels by 1
Slide 15: Income Statement
INCOME STATEMENT 1.3 Highlights 1H FY23 VAR. VAR. 1. Revenue Margin increased by 72%, to €289.0 million, due to the 50% 2Q 2Q 1H 1H increase in Bookings and 15% increase in Revenue Margin per Booking (IN EUROS MILLION) FY23 FY23 FY23 FY22 FY23 FY22 VS FY22 VS FY22 2. Variable costs increased by 76%
Slide 16: Cash Flow Statement
CASH FLOW STATEMENT 1.3 Highlights 1H FY23 2Q 2Q 1H 1H 1.Net cash from operating activities decreased by €32.0 million, mainly (IN EUROS MILLION) reflecting: FY23 FY22 FY23 FY22 ADJUSTED EBITDA (*) 6.4 2.7 7.0 0.7 • Working capital inflow of €19.5 million compared to €61.8 million in 1H FY22. The in
Slide 17: Strategy Performance Update: One year post CMD
2. Strategy Performance Update: One year post CMD 17
Slide 18: A. Strategy Overview
2. Strategy Performance Update: One Year post CMD A. Strategy Overview B. Prime Members C. ARPU D. Cash EBITDA E. Long Term Fundamentals 18
Slide 19: In pole position in an attractive market
IN POLE POSITION IN AN ATTRACTIVE MARKET A Sizeable market and largest Attractive growth prospects eDO is positioned in the right e-commerce vertical after the pandemic segments (online and leisure) European Travel European Leisure Travel Market Market Size Online penetration €1.3Tn €Bn % over total
Slide 20: eDO is the global flight leader, ex China
WITHIN TRAVEL, EDO IS THE GLOBAL FLIGHT LEADER, EX CHINA A #2 PLAYER IN FLIGHTS GLOBALLY #1 PLAYER IN FLIGHTS EUROPE GLOBAL FLIGHT REVENUE EUROPEAN FLIGHT REVENUE Estimated, CY 2021 (€M) Estimated, CY 2021 (€M) 223 917 #1 3.2x 276 #2 70 51 39 215 #3 eDreams etraveli Expedia lastminute.com Source: Co
Slide 21: Capturing new customers through the Prime program
EDO HAS DEMONSTRATED THE ABILITY TO CAPTURE NEW CUSTOMERS THROUGH THE A PRIME PROGRAM, DESPITE COVID WAVES AND RECENT GEOPOLITICAL AND MACRO CONTEXT Prime is the #1 travel subscription programme in the world SHARE OF NEW CUSTOMERS* WITHIN PRIME MEMBERS Delta Omicron 3.8 3.6 3.2 2.7 TODAY 19% 60% 2.2
Slide 22: Business model and track record position us to outperform the industry
REGARDLESS OF ECONOMIC UNCERTAINTIES OUR BUSINESS MODEL AND TRACK RECORD A POSITIONS US TO PERFORM BETTER THAN THE INDUSTRY These are the reasons why we think we will outperform the market: THROUGH PRIME WE CUSTOMERS WILL WE MEET CUSTOMER OFFER BEST PRICES FOCUS ON PRICE EVEN NEEDS/PREFERENCES AND C
Slide 23: On track to meet self-imposed FY25 targets
WELL POSITIONED, WELL FINANCED, ON TRACK TO MEET SELF-IMPOSED FY25 TARGETS A PRIME MEMBERS >7.25M PRIME ARPU(*) eDO FY25 TARGETS ~€80 CASH EBITDA(*) >€180M eDO large potential: superior returns for shareholders and customers while transforming and revolutionising the industry. (*) Definitions of Non
Slide 24: B. Prime Members
2. Strategy Performance Update: One Year post CMD A. Strategy Overview B. Prime Members C. ARPU D. Cash EBITDA E. Long Term Fundamentals 24
Slide 25: B. Prime Members
B. Prime Members On track with our guidance to reach 7.25 million by FY25 25
Slide 26: Ahead of run rate needed to reach 7.25M subscribers by FY25
EVEN WITH THE NORMALISATON OF CHURN, BASED ON PREVIOUS YEAR´S HIGH GROWTH, B WE ARE AHEAD OF THE RUN RATE NEEDED TO ACHIEVE 7.25M SUBSCRIBERS BY FY25 Travel market is still not at Pre-COVID levels (*) One year after the start of super high growth in Prime Net Adds, Gross Adds are partially offset by
Slide 27: Confidence in achieving 7.25M subscribers by 2025
WHY ARE WE CONFIDENT WE WILL ACHIEVE THE 7.25M SUBSCRIBERS BY 2025 – LARGE B ADDRESSABLE MARKET AND VERY REALISTIC ASSUMPTIONS OUR FIRST MARKET STILL ACCELERATING IN GROWTH VERY LARGE MARKET (TAM) Penetration of French Penetration rest of 9 24 million non-Prime customer base who Households Prime Mar
Slide 28: Subscription companies show high growth and penetration
SUBSCRIPTION COMPANIES SHOW HIGH GROWTH AND PENETRATION OVER MANY YEARS B COSTCO PAID MEMBERS NETFLIX SUBSCRIBERS SPOTIFY PAID SUBSCRIBERS In million In million In million Penetration in USA Penetration in USA Penetration in USA 37% 58 62 65% 204 222 36% 180 54 155 52 49 48 167 45 42 124 39 139 35 3
Slide 29: Capturing new customers through Prime despite macro context
EDO HAS DEMONSTRATED THE ABILITY TO CAPTURE NEW CUSTOMERS THROUGH THE PRIME B PROGRAM, DESPITE COVID WAVES AND RECENT GEOPOLITICAL AND MACRO CONTEXT… Prime is the #1 travel subscription programme in the world Delta Omicron Ukraine War + High Inflation 3.6 3.2 2.7 2.2 Prime members 1.7 in million 1.2
Slide 30: Churn rates are improving slightly
… AND OUR CHURN RATES ARE IMPROVING SLIGHTLY B Churn reduction in the last 12 months (2Q FY22 vs 2Q FY23) PRIME MEMBERS YEAR 1 PRIME MEMBERS YEAR 2+ 2% 4% Churn reduction Churn reduction (in 12 months) (in 12 months) Note: Weighted average for the aggregate of voluntary and involuntary Churn in the
Slide 31: C. ARPU
2. Strategy Performance Update: One Year post CMD A. Strategy Overview B. Prime Members C. ARPU D. Cash EBITDA E. Long Term Fundamentals 31
Slide 32: C. ARPU
eDreams ODIGEO
Slide 33: Prime ARPU on track to meet FY25 guidance
PRIME ARPU ON TRACK TO MEET FY25 GUIDANCE C As expected, ARPU (*) is converging with our guidance of €80 per user PRIME ARPU EVOLUTION (€) Evolution in this quarter driven by the phasing out of 2Q FY22 in the LTM calculation. A quarter which had a material increase in revenues as sudden increase in
Slide 34: D. Cash EBITDA
2. Strategy Performance Update: One Year post CMD A. Strategy Overview B. Prime Members C. ARPU D. Cash EBITDA E. Long Term Fundamentals 34
Slide 35: D. Cash EBITDA
D. Cash EBITDA Margins increase as Prime member base matures progressively 35
Slide 36: Cash marginal profit margins on track to meet FY25 guidance
CASH MARGINAL PROFIT MARGINS ON TRACK TO MEET OUR FY25 D GUIDANCE “CMD illustrative example” reflected 1 customer joining on day 1 of the first year, while in the “Current” and “FY25 expected aggregate” we are using actual data with all customers with their actual dates of joining and churning EXAMP
Slide 37: Greater share of repeat Prime subscribers drives margin expansion
GREATER SHARE OF REPEAT PRIME SUBSCRIBERS (YEAR 2+ MEMBERS) D TRANSLATES TO MARGIN EXPANSION OVER TIME PRIME CASH MARGINAL PROFIT MARGIN: HOW IT INCREASES AS % o/TOTAL PRIME YEAR 2+ MEMBERS INCREASES 2Q FY23 LTM FY25 Yr 1 19% Yr 1 Cash MP (%) for 17% the year Yr 2+ 49% Yr 2+ 53% Share of Prime Yr 1
Slide 38: Slow margin increase driven by growth in Prime year 1 subscribers
SLOW INCREASE IN MARGINS WAS DRIVEN BY STRONG GROWTH IN PRIME D YEAR 1 SUBSCRIBERS IN PAST 12 MONTHS, OVER NEXT SEVERAL QUARTERS THIS WILL START TO REVERSE INDEX OF % OF PRIME MEMBERS YEAR 2+ Total Prime Members 2.6M 3.2M 3.6M Prime Cash Marginal Profit (%) 23% 27% 35% Increase in the weight of Year
Slide 39: Member growth impact on cash marginal profit margins
… AS A RESULT, DIFFERING GROWTH IN MEMBERS DIRECTLY IMPACT CASH D MARGINAL PROFIT MARGINS SENSITIVITIES CASH MARGINAL PROFIT (%) (PRIME+NON PRIME) Sensitivity analysis hypothesis include: • Stable Churn 45% • Variation of member growth reached 41% through variation in the investment in Cash Marginal
Slide 40: Fixed costs and capex on plan, front loaded
FIXED COSTS AND CAPEX ON PLAN, FRONT LOADED TO SEIZE FUTURE OPPORTUNITIES D FIXED COSTS (€) Investment in IT and product “eDOers”, which represent the largest component of fixed costs 78-83 87-92 100 58 78 Additional investment to expand Prime 2Q FY22 2Q FY23 FY23 FY24 FY25 platform into new geograp
Slide 41: Cash EBITDA margins vary with growth in Prime members
SIMILAR TO CASH MARGINAL PROFIT MARGIN, CASH EBITDA MARGINS D WOULD VARY DEPENDING ON LEVEL OF GROWTH IN PRIME MEMBERS SENSITIVITIES CASH EBITDA MARGIN (PRIME+NON PRIME) Sensitivity analysis hypothesis include: • Stable Churn 30% • Variation of member growth reached 27% through variation in the inve
Slide 42: Longer term once fixed costs stabilise
… LONGER TERM ONCE FIXED COSTS STABILISE AROUND 100 For illustrative D MILLION EUROS, CAC REDUCES AND PRIME YEAR 2+ WEIGHT CONTINUES GROWING… purposes only PRIME MEMBERS (M) (*) CASH MARGINAL PROFIT (*) CASH EBITDA (*) 364K Run-rate 34% 41% 35% 36% 22% 27% 25% 26% 10.2 415 ~21% CAGR ~30% CAGR 309 Ke
Slide 43: E. Long Term Fundamentals
2. Strategy Performance Update: One Year post CMD A. Strategy Overview B. Prime Members C. ARPU D. Cash EBITDA E. Long Term Fundamentals 43
Slide 44: E. Long Term Fundamentals
E. Long Term Fundamentals Prime is highly value creating for eDO and its shareholders 44
Slide 45: Prime is a superior value proposition for customers
PRIME IS A SUPERIOR VALUE PROPOSITION FOR CUSTOMERS – LEADING TO SUPERIOR E CUSTOMER ADVOCACY AND DECOMMODITIZING THE VALUE PROPOSITION NET PROMOTER SCORE INDEXED USING AS A BASE SEPTEMBER 2021 (CMD DATA POINT) AND COMPARING IT WITH SEPTEMBER 2022 150 133 112 100 100 100 CMD TODAY CMD TODAY CMD TODA
Slide 46: eDO ahead in customer satisfaction
E eDO AHEAD IN CUSTOMER SATISFACTION eDO vs. Highest Rated Peer eDO vs. Average Peers Trustpilot OCTOBER 2022 3.6 3.6 2.2 1.4 1.6 1.4 eDreams Top 1 OTA Top 1 Airline eDreams Avg. OTAs Avg. Airlines OCTOBER 2021 3.5 3.5 2.2 1.6 1.6 1.4 eDreams Top 1 OTA Top 1 Airline eDreams Avg. OTAs Avg. Airlines 4
Slide 47: Prime provides a win-win proposition for customers and eDO
PRIME PROVIDES A WIN-WIN PROPOSITION FOR CUSTOMERS AND eDO E Prime members visit us more often and have higher repeat bookings than Non-Prime customers PRIME VS. NON PRIME INDEX x3.2 x2.7 Repeat bookings (in 12 months) FY23 Repeat bookings (in 12 months) FY22 47
Slide 48: Significant value creation for eDO through Prime
E … AND ACHIEVED SIGNIFICANT VALUE CREATION FOR eDO THROUGH PRIME Success of our Prime subscription model is demonstrated both by our high growth in the number of members and the value it creates, and a business with higher LTV and lower CAC over the long run PRIME LTV TO CAC RANGE (*) 2x-3x (*) Ran
Slide 49: Closing Remarks
eDreams ODIGEO Closing Remarks
Slide 50: eDO is one of its kind in profitability and growth
eDO IS ONE OF ITS KIND IN TERMS OF PROFITABILITY AND GROWTH 3 30% Majority of companies have a Rule of 40 satisfied mature subscription model that is operating for more than 10 years 25% 20% EBITDA Margin 15% 10% 5% 0% 0% 5% 10% 15% 20% 25% 30% Revenue Growth Source: Bloomberg as of 8th of Nov-22 an
Slide 51: Appendix
4. Appendix 51
Slide 52: Diversification revenue continues to grow
DIVERSIFICATION REVENUE CONTINUES TO GROW, ALREADY ABOVE PRE-COVID-19, AND 4 THE LARGEST CONTRIBUTOR TO REVENUES Revenue margin Diversification (IN EUROS MILLION) 1H FY23 Var. FY23 vs FY22 1H FY22 70% DIVERSIFICATION 205.0 70% 120.3 CLASSIC CUSTOMER 40.5 116% 18.7 205.0 CLASSIC SUPPLIER 37.9 45% 26.
Slide 53: Revenue by geography remains stable
REVENUE BY GEOGRAPHY REMAINS STABLE 4 Revenue margin TOP 6 (IN EUROS MILLION) 1H FY23 Var. FY23 vs FY22 1H FY22 63% 209.1 TOP 6 209.1 63% 128.0 128.0 REST OF THE WORLD 79.9 98% 40.4 TOTAL 289.0 72% 168.4 1H FY22 1H FY23 11% Rest of the World 24% 28% 1H 1H 1H FY15 FY22 FY23 98% 79.9 76% 72% 89% 40.4
Slide 54: Glossary of Definitions
Glossary of Definitions Non-reconcilable to GAAP measures 1. Gross Bookings refers to the total amount paid by our customers for travel products and services booked through or with us (including the part that is passed on to, or transacted by, the travel supplier), including taxes, service fees and
Slide 55: Glossary of Definitions
Glossary of Definitions 12. Cash Revenue Margin means the IFRS revenue less cost of supplies, plus the variation of the Prime deferred revenue corresponding to the Prime fees that have been collected and that are pending to be accrued. The Prime fees pending to be accrued are non-refundable and will
Slide 56: Glossary of Definitions
Glossary of Definitions 23. Revenue Margin means the IFRS revenue less cost of supplies. The Group's management uses Revenue Margin to provide a measure of its revenue after reflecting the deduction of amounts payable to suppliers in connection with the revenue recognition criteria used for products