Corporate Travel Management Limited · ASX:CTD
Corporate Travel Management — FY2019 Earnings Presentation
37 slides from Corporate Travel Management's earnings presentation, Aug 21, 2019
Slide 1: 2019 Full Year Results
Date: 21/8/2019 Presenter Name: Jamie Pherous, Managing Director Neale O’Connell, Global CFO 2019 Full Year Results
Slide 2: Disclaimer
Disclaimer The information in this presentation does not constitute personal investment advice. The presentation is not intended to be comprehensive or provide all information required by investors to make an informed decision on any investment in Corporate Travel Management Limited ACN 131 207 611
Slide 3: Index
Index Group financial highlights Page 4 Growth profile & the strategic opportunity Page 6 Technology competitive advantage Page 10 Regional performance Page 14 Group financial summary Page 21 FY20 Guidance Page 29 Appendix Page 32 Page 3
Slide 4: Group Financial Highlights
Group Financial Highlights Page 4
Slide 5: Group financial highlights
Group financial highlights Change on • Underlying EBITDA up approximately 20% to $150.1m Reported ($AUDm) FY19 (includes favourable $4.8m FX to forecasted FX assumptions) P.C.P TTV (unaudited) 6,457.5 +30% • Reported Operating Cash Flow 113% (2H19 166%) due to timing of payment cycle to reporting pe
Slide 6: Growth Profile and the Strategic Opportunity
Growth Profile and the Strategic Opportunity Page 6
Slide 7: Growth momentum maintained through multi-phase strategy
Growth momentum maintained through multi-phase strategy 160 CTM has delivered every year since listing in 2010: 7,000 • year on year underlying EBITDA growth 140 • year on year TTV growth 6,457 6,000 • year on year dividend growth 120 Dividend 5,000 Underlying EBITDA AUD$m 45.0 4,958 40.0 100 Cents
Slide 8: Progress on our strategic objectives FY14-FY21
Progress on our strategic objectives FY14-FY21 Moving to our Phase 1 - FY14-FY17 Phase 2 - FY17-18 third phase Phase 3 - FY19-21 Established a global network Grow every region beyond Optimise global network and Our goals through acquisition TTV$1bn, with organic grow a sustainable, long growth the d
Slide 9: Underlying FY19 EBITDA growth summary (AUD$m)
Underlying FY19 EBITDA growth summary (AUD$m) • Organic growth again the catalyst for performance, representing approximately +16% on FY18 baseline Page 9 *M&A EBITDA values represent EBITDA at time of acquisition announcement (Lotus $4.0m, SCT $1.0m)
Slide 10: Technology Competitive Advantage
Technology Competitive Advantage Page 10
Slide 11: A unique approach - technology hubs located in all global regions
A unique approach - technology hubs located in all global regions ANZ Sydney, Australia EUROPE Hale, United Kingdom USA Los Angeles, USA ASIA Hong Kong Goal : Control our destiny, address specific customer needs in-region for high usability Page 11
Slide 12: Benefits of our technology strategy
Benefits of our technology strategy CTM Benefit • Commercial advantages from not paying 3rd party transactional costs across the entire booking ecosystem • Controlling our destiny. Develop and deploy quickly for customer demands • Feedback loops with customers give us insights for roadmap developmen
Slide 13: Financial outcomes of our technology strategy
Financial outcomes of our technology strategy Increasing Revenue per Increasing EBITDA per CTM has spent circa $47m on client facing capex since FY16 FTE (productivity) FTE and has attained a strong return on capital deployed so far. Outcomes of technology investment: +30% 172k 1. Strong market shar
Slide 14: Regional Performance
Regional Performance Page 14
Slide 15: FY19 regional overview
FY19 regional overview CTM Consolidated Australia & New Zealand North America Asia Europe Global o/head Jun-19 Jun-18 Jun-19 Jun-18 Jun-19 Jun-18 Jun-19 Jun-18 Jun-19 Jun-18 Jun-19 Jun-18 AUD $m $m $m $m $m $m $m $m $m $m $m $m TTV 6,457.5 4,958.3 30% 1,155.9 16% 1,459.1 1,306.1 12% 2,519.0 1,483.0
Slide 16: ANZ
ANZ % Underlying EBITDA up 17% to $51.5m on the p.c.p.: FY19 FY18 Change • Region continues to win market share and outperform market Reported (AUD) $m $m • Lower activity pre-election due to temporary uncertainty TTV 1,335.5 1,155.9 16% relating to expected change in government (since reversed) Rev
Slide 17: North America
North America Underlying EBITDA up 15% to $43.5m on the p.c.p.: % FY19 FY18 • As previously flagged, higher than normal cost base to support Change legacy software until the last of integration projects are complete Reported (AUD) $m $m • Sales pipeline very encouraging as a result of CTM Lightning
Slide 18: Europe
Europe % Underlying EBITDA up 20% to $40.9m on the p.c.p.: FY19 FY18 Change • Region continues to materially outperform market, despite a Reported (AUD) $m $m very challenging half as a result of no Brexit resolution and the resulting effect on investment uncertainty TTV 1,143.9 1,013.3 13% • Won Be
Slide 19: Asia
Asia % FY19 FY18 Underlying EBITDA 27% to $24.7m on the p.c.p.: Change • The underlying business is performing well: $m $m • CTM technology gaining momentum, resulting in client wins and Reported (AUD) improved sales pipelines. Key blue chip clients using Lightning OBT TTV 2,519.0 1,483.0 70% • Lotu
Slide 20: The growth opportunity - a huge and fragmented corporate segment
The growth opportunity - a huge and fragmented corporate segment 1. Growing global market estimated at USD1.5 trillion, growing at USD40bn p.a. 2. Highly fragmented industry – CTM TTV AUD6.5bn represents under <1% market share 3. Large barrier to entry to build a global network, build client facing
Slide 21: Group Financial Summary
Group Financial Summary Page 21
Slide 22: Key financial highlights
Key financial highlights Financial Results: • TTV up 30% to $6.46bn (FY18: $4.96bn) • Revenue and other income up 21% to $449.5m (FY18 $372.2m) • Underlying EBITDA up 20% to $150.1m (FY18 $125.4m) • Underlying NPAT up 13% to $96.9m (FY18 $86.0m) • 1H/2H comparatives demonstrate resilience in the bus
Slide 23: Key financial highlights continued
Key financial highlights continued Dividend: • Dividend up 11% to 40c/share, partially franked. Final dividend 22c/share, franked to 50% Debt Reduction: • Total debt reduced from $60.9m (1H19) by $21.6m to $39.3m, primarily relating to finalising earn-out commitments • Debt/EBITDA ratios remain low
Slide 24: Comparative statutory profit and loss
Comparative statutory profit and loss % • TTV includes $750m contribution from Lotus from $AUD(m) FY19 FY18 Change time of acquisition. Ex Lotus, TTV growth +15% for FY19, reflecting market share gains TTV 6,457.5 4,958.3 30% • Slight decline in EBITDA margin primarily due to Lotus contribution in A
Slide 25: Non-recurring costs reconciliation
Non-recurring costs reconciliation • As previously flagged, Hong Kong office restructure $AUD(m) FY19 costs include $2.7m in duplicate rent to merge Lotus and two CTM offices into one super-office, and $1.5m in redundancies identified post office consolidation EBITDA- reported 143.8 • This restructu
Slide 26: Comparative statutory balance sheet
Comparative statutory balance sheet $AUD(m) June 19 June 18 Cash 138.8 84.3 • Intangibles have increased primarily due to Lotus acquisition Receivables and other 339.4 256.4 Total current assets 478.2 340.7 • As previously flagged larger receivable and payables at 30 June 2019 due to combination: PP
Slide 27: Operating cash conversion - rolling average since IPO near 100%
Operating cash conversion - rolling average since IPO near 100% • Operating cash conversion FY19:113% (2H:166%) Operating Cash Conversion % at half yearly reporting dates* due to favourable 2H timing differences as previously flagged (FY18:95%) 180% 160% • Reporting date timing differences occur whe
Slide 28: Cash flow summary
Cash flow summary $AUD(m) FY19 FY18 EBITDA 143.8 124.6 • Strong cash flow from operations in FY19 of $133.5m (FY18 $94.4m) Non cash items 2.9 1.6 Change in working capital 15.6 (6.4) • The change in working capital relates predominantly to timing of supplier payments Income tax paid (26.5) (22.8) Ne
Slide 29: FY20 Guidance
FY20 Guidance Page 29
Slide 30: FY20 Guidance update
FY20 Guidance update FY20 underlying EBITDA guidance range $165.0m - $175.0m excluding the impact of AASB16 Including the impact of AASB16 leasing standard, underlying EBITDA guidance range $175.0m-$185.0m - AASB16 impact an additional circa +$10.0m to EBITDA but negligible impact to NPAT, assuming
Slide 31: Summary
Summary • CTM has been successfully operating for 25 years • Since listing in 2010, CTM has delivered TTV, EBITDA and dividend growth A track record of strong performance and execution in every year, in all economic conditions • EBITDA has grown 26 fold since listing • Corporate travel is a huge and
Slide 32: Appendix
eo Appendix | Page 32
Slide 33: AASB15 revenue from contracts with customers – impact
AASB15 revenue from contracts with customers – impact • CTM has adopted AASB15 from FY19. • There is no financial impact on revenue recognition policy for the Group profit and loss versus the p.c.p.. • Revenue previously disclosed has been disaggregated as follows; • Transactional revenues being rev
Slide 34: AASB16 leasing - impact
AASB16 leasing - impact • AASB16 requires leasing costs to be reclassified out of EBITDA to finance costs from FY20 • Impact circa $10m increase to FY20 EBITDA, but negligible impact to NPAT • Impact may change subject to office leasing and any M&A during the year • The impact will be identified sep
Slide 35: CTM proudly operating for years
CTM proudly operating for 25 years AWARD WINNING Value Proposition IN EVERY REGION • Highly personalised service 1994 • Compelling technology that adds value ANZ/EUR 2019 Client Survey • Return on investment methodology How likely are you to recommend 2 Staff BNE CTM’s technology to a colleague? No
Slide 36: 1H/2H comparatives highlighting macro impact on business
1H/2H comparatives highlighting macro impact on business CTM Consolidated Australia & New CTM Consolidated North America Asia Asia (Ex Lotus) Europe (Ex Lotus) Zealand Dec-19 Jun-19 Dec-19 Jun-19 Dec-19 Jun-19 Dec-19 Jun-19 Dec-19 Jun-19 Dec-19 Jun-19 Dec-19 Jun-19 AUD 1H 2H 1H 2H 1H 2H 1H 2H 1H 2H
Slide 37: travelctm.com
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Corporate Travel Management — FY2019 Earnings Presentation on 6ix