MADAMA HOSTEL , MILAN 2018 PRELIMINARY RESULTS APRIL 2019 PRESENTATION TJ KELLY, CFO GARY MORRISON, CEO
DISCLAIMER NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO ANY JURISDICTION IN WHICH SUCH DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL This presentation has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 following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated ( “relevant persons” ). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Information in the following presentation relating to the price at which relevant investments have been bought or sold in the past or the yield on such investments cannot be relied upon as a guide to the future performance of such investments. This presentation does not constitute or form part of any offer or invitation to purchase, sell or subscribe for, or any solicitation of any such offer to purchase, sell or subscribe for, any securities in the Company nor shall this presentation or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor. The distribution of this presentation or any information contained in it may be restricted by law in certain jurisdictions, and any person into whose possession any document containing this presentation or any part of it comes should inform themselves about, and observe, any such restrictions. The Company is under no obligation to update or keep current the information contained in this presentation or to correct any inaccuracies which may become apparent, and any opinions expressed in it are subject to change without notice. Neither the Company nor any of its respective directors, officers, partners, employees or advisers accept any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. The presentation may contain forward-looking statements. These statements relate to the future prospects, developments and business strategies of the Company. Forward-looking statements are identified by the use of such terms as "believe", "could", "envisage", "estimate", "potential", "intend", "may", "plan", "will" or variations or similar expressions, or the negative thereof. Any forward-looking statements contained in the presentation are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. If one or more of these risks or uncertainties materialise, or if underlying assumptions prove incorrect, the Company's actual results may vary materially from those expected, estimated or projected. Any forward-looking statements speak only as at the date of the presentation. Except as required by law, the Company undertakes no obligation to publicly release any update or revisions to any forward-looking statements contained in the presentation to reflect any change in events, conditions or circumstances on which any such statements are based after the time they are made. 2
HO HOSTEL STELWORLD ORLD AT A GLA T A GLANCE NCE The world’s leading hostel -focussed online booking platform Hostelworld in numbers 1 Properties in c.16,500 6,500 288 288 179 hostels employees 2 countries 152M 152M Over Over 2.5M 11.5M 5M visits to website social media reviews and apps in 2018 followers Available 40% 40% globally in 19 19 bookings from languages app ( 13 on app) Hostelworld properties in 179 countries 3 1 Hostelworld Group, 2018 2 Average FTE 2018
AGENDA FINANCIAL PERFORMANCE 2018 TJ Kelly – CFO OPERATIONAL PERFORMANCE 2018 Gary Morrison - CEO Q&A 4 VALENCIA LOUNGE HOSTEL , VALENCIA
PURI GARDEN HOTEL & HOSTEL , UBUD FI FINANCIAL ANCIAL PER PERFORMANCE FORMANCE
FINANC ANCIAL IAL OPERA RATION TIONAL KEY EY FI FINANCIAL NANCIAL HI HIGHLIGH GHLIGHTS TS Solid underlying performance 2017 2018 YoY % Gross Bookings: HW Brand 7.0m 7.3m 4% Gross Bookings: HW Group 7.5m 7.6m 0% Bookings Net Bookings: HW Brand 7.0m 7.0m (1%) • Strong growth in core Hostelworld Brand ( 4% Net Bookings: HW Group 7.5m 7.2m (4%) increase in gross bookings). • Net Revenue increased by 1% on a constant €11.6 €11.9 Average Booking Value (ABV) 3% currency basis excluding the deferred €86.7m €82.1m revenue impact. Net Revenue (5%) Revenue • Adjusted EBITDA decreased by 19% primarily €86.7m €85.0m Net Revenue (excluding deferred revenue impact) (2%) due to the effect of rolling out the free cancellation product. €2.9m Deferred Free Cancellation Revenue - - • Adjusted EBITDA decreased by 5% on a Adjusted EBITDA 1 €26.4m €21.4m (19%) constant currency basis excluding the deferred revenue impact. Adjusted Profit after tax 2 €21.7m €17.5m Profitability (19%) • Strong cash generation maintained. Adjusted EPS 22.73c 18.33c Adjusted Free Cash Flow 3 €21.5m €20.7m Cash Adjusted Free Cash Conversion 3 81% 97% Total Dividend Per Share 17.1c 13.8c Shareholder Returns €16.3m €13.2m Total Dividend Payout Source: Management information 6 1 Adjusted EBITDA excludes exceptional items and is net of €2.9m deferred revenue in relation to free cancellations, this reven ue will be recognised at the point at which the traveller no longer has the right to cancel 2 Adjusted PAT is defined as Reported Profit for the period excluding exceptional costs, amortisation of acquired domain and technology intangibles, impairment charges, net finance costs and deferred taxation 3 Adjusted free cash flow defined as free cash flow before financing activities adjusted for financial expenses, M&A costs and impairment costs; adjusted free cash conversion shown as a percentage of adjusted EBITDA
FINANC ANCIAL IAL OPERA RATION TIONAL 20 2018 18 BO BOOKIN OKINGS GS 4% Growth in Hostelworld Brand Gross bookings GROSS BOOKINGS Group Bookings 1 2018 2017 • 4% increase in Hostelworld Brand gross bookings; total Group bookings growth flat (at 7.5m 7.6m 7.6m bookings). 0.3m 4% 7% 0.5m • Net of cancellations Hostelworld Brand bookings fell 1% ; 4% decrease in total Group bookings growth (to 7.2m bookings). • Supporting Brands are in managed decline, contributing 4% of total bookings in 2018, down from 7% in 2017. 93% 96% • Bookings from app grew by 22% in 2018 from 33% of bookings in 2017 to 40% of bookings in 2018. 7.0m 7.3m Hostelworld Brand Supporting Brands 7 1 Supporting brands refers to Hostelbookers, Hostels.com, (hostel & affiliate) booking engines
FINANC ANCIAL IAL OPERATIONA RATIONAL 2018 20 18 AB ABV Modest increase year on year GROUP AVERAGE BOOKING VALUE (“ABV”) ( €) 1 14 ABV increased by 3% (2017: flat), 6% increase in constant currency 3% 11.9 0% 12 11.6 11.6 Tailwinds 10 • Increase in average commission rates to 15.4% (2017: 14.3%) . • New contracts implemented in February 2018, >90% properties and >59% of bookings now on a 15% base rate. 8 • Increase in underlying base price per bed. • Elevate penetration remained flat due to the increase in base commission. 6 Headwinds 4 • Bednights per booking have declined as a result of continued shift to App/Mobile. 2 • Negative impact of exchange rate movements. • Destination mix. 0 FY 2016 FY 2017 FY 2018 8 1 Note: ABV based on Group Gross revenues/gross bookings
FINANC ANCIAL IAL OPERATIONA RATIONAL 2018 20 18 DE DESTINATIO STINATION N MI MIX Underlying base bed price increase partially offset by destination mix 16 14.4 Africa, 1% 13.8 South America, 14 6%, UK, 14%, 11.9 11.6 12 10.9 10.8 Oceania, 9% 10 8.3 8.1 8 Asia, 8%, +5% +3% +3% (0)% 6 BOOKI OKING NGS S BY ABV DESTI TINATI NATION ON 4 NATION TIONAL ALIT ITY: Y: 2018 MIX X ( € ) 1 2 Rest of Europe, 36% 0 North Group EMEA ASPAC Americas America, 26% 2017 2018 Africa, 2% South America, 9% UK, 6% 11% 11% Oceania, 8% BOOKI OKING NGS S BY DESTI TINATI NATION ON MIX: X: 3% 3% DESTI TINATI NATION: ON: 2018 YOY GROWTH OWTH 1% Rest of Europe, Asia, 22% 42% (2%) EMEA ASPAC Americas 2017 2018 North America, 11% 9 1 Note: ABV based on Group Gross revenues/gross bookings
FINANC ANCIAL IAL OPERA RATION TIONAL 20 2018 18 NE NET T RE REVENUE VENUE Impacted by free cancellation product rollout €86.7m €85.0m €2.9m €82.1 m HW Group Net Revenue • €82.1m Net Revenue, 5% decrease from 2017, 3% decrease on constant currency basis. • Excluding the impact of €2.9m deferred revenue, 2% decrease and 1% increase in constant currency. 2017 2018 HOSTELWORLD GROUP NET REVENUE 10
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