Flight Centre Travel Group Limited · ASX:FLT
Flight Centre Travel — Citigroup presentation (May 2013)
17 slides from Flight Centre Travel's conference presentation, May 27, 2013
Slide 1: The Australian dollar (AUD) & Flight Centre Limited (FLT)
For personal use only Citigroup Presentation The Australian dollar (AUD) & Fli ht C Flight Centre t LiLimited it d (FLT) Andrew Flannery (CFO) 28 May, 2013 1
Slide 2: Presentation outline
Presentation outline For personal use only Overview Slide 3 Dollar‐related misconceptions Slide 4 The Aussie love affair with international travel Slide 5 Dollar’s impact on FLT’s domestic v international sales mix Slide 6 USA tourism: Recovering, not setting records Slide 7 Price drivin
Slide 3: An overview
An overview For personal use only Strong AUD has enhanced Aussie spending power in some countries Generally positive for outbound travel and has helped FLT’s Australian business in recent years However ... FLT believes the AUD’s influence over domestic v international travel patterns is overes
Slide 4: Common misconceptions
Common misconceptions For personal use only The strong AUD has been the catalyst for growth in overseas (outbound) travel Because of the strong exchange rate, travel to the USA has reached an all‐time high When the dollar falls, Australians switch to domestic travel These factors will inevitably aff
Slide 5: Our enduring love affair with overseas travel
Our enduring love affair with overseas travel For personal use only Consistent growth in overseas travel over 20+ years suggests Aussie outbound is structurally driven driven, not FX driven 6.8% CAGR in Australian short‐term resident departures between FY94 and FY12 Short‐term resident departu
Slide 6: FLT sales mix unaffected by strong AUD
FLT sales mix unaffected by strong AUD For personal use only FLT Ticket Centre data also highlights lack of correlation between strong AUD and international v domestic sales mix AUD strengthened significantly against the USD and some other currencies between FY09 and FY12, but no impact on FLT’s
Slide 7: USA tourism: Recovering, not setting records
USA tourism: Recovering, not setting records For personal use only US represents about 10% of the Australian outbound market (Source: ABS) Market‐share similar to FY01 (10.4% in FY01 v 10.2% in FY12) and below late 90s Major FX shifts during this period have not materially altered US share – A
Slide 8: Price driving US demand
Price driving US demand For personal use only FLT FLT’ss US ticketing data suggests that pricing is a more important driver than FX Typically, USA represents 10‐15% of FLT’s Australian tickets each month Some spikes in demand – generally February and August each year Spikes are price‐driven
Slide 9: FY09: Cheap fares fuel recovery pre-parity
FY09: Cheap fares fuel recovery pre‐parity For personal use only FY09 example highlights role cheap fares play in stimulating demand AUD fell f ll from f $USD0.96 $USD0 96 to t $USD0.65 $USD0 65 between b t July J l 08 and d FFebruary b 09 b butt FLT’s FLT’ US ticket numbers increased more than
Slide 10: Outbound travel: Who's winning?
Outbound travel: Who’s winning? For personal use only Other countries are gaining market‐share more rapidly than the USA Fastest growing international markets for Aussie travellers between FY01 and FY12 included Indonesia ((Bali), ) Fiji, j Thailand and China ((Source: ABS)) USA actually lost
Slide 11: Growth in other outbound markets
Growth in other outbound markets For personal use only Gaining share … 12.0% 8.0% Indonesia Thailand 11.3% 7.0% 7.5% 10.0% 6.0% 8.0% 8.2% 5.0% Steady as she goes for the USA… 6.0% 4.0% 4.4% 11.0% 3.0% USA 4.0% 2.0% 10.0% 10.4% 10.2% 2.0% 1 0% 1.0% 9.0% 0.0% 0.0% FY01 FY12 FY01 FY12 8.0% Losing g
Slide 12: A key outbound driver: Plunging airfare prices
A key outbound driver: Plunging airfare prices For personal use only Hong o g Kong o g ROUTE DEC DEC SAVING Singapore Down 23% 2007 2012 (%) Down 51% Sydney- Down $359 $330 Los Angeles Auckland 8% Down Down 25% Sydney-Bali $999 $642 36% Sydney- Down $955 $664 Bangkok 30% Down Sydney-Fiji $565 $550 3
Slide 13: Importance of domestic tourism to FLT
Importance of domestic tourism to FLT For personal use only While FLT does not expect current FX fluctuations to lead to fundamental travel pattern shifts, FLT remains strongly committed to stimulating domestic tourism Australian business sends more travellers on holidays at home than it does to
Slide 14: A lower AUD: Some potential benefits
A lower AUD: Some potential benefits For personal use only Lower Australian interest rates can stimulate leisure travel demand FLT’s leisure results strengthened during 2H13 following prior interest rate reductions Strong AUD adversely affects FLT’s overseas profit translation Expected US an
Slide 15: End of presentation
End of presentation For personal use only Questions? 15
Slide 16: Appendix 1: FLT's profit and the AUD
Appendix 1: FLT’s profit and the AUD For personal use only 350m 1 20 1.20 PBT and the AUD/USD PBT AUD/USD (Average) 300m Strong profit growth 1.00 hi history i irrespective i off 250m AUD’s strength 0.80 200m 0.60 150m 0.40 100m 0.20 50m 0m 0.00 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Slide 17: Appendix 2: Parity and US travel patterns
Appendix 2: Parity and US travel patterns For personal use only Increased competition and September 11 capacity resulting attacks in cheaper fares 17
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