CLINK 78 , LONDON 2019 2019 INTERIM RESULTS AUGUST 2019 PRESENTATION TJ KELLY, CFO GARY MORRISON, CEO 1
DISCLAIMER NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO ANY JURISDICTION IN WHICH SUCH DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL This presentation has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
HOSTEL HO STELWORLD ORLD AT A GLA T A GLANCE NCE The global hostel-focussed online booking platform Hostelworld in numbers 1 Properties in c.17,400 7,400 300 300 178 hostels employees 2 countries Over Over 2.6m 77m 77m 12m 12m social media visits to website and reviews followers apps in H1 2019 Available 43% 43% globally in 19 19 net bookings languages from app ( 13 on app) Hostelworld properties in 178 countries 1 Hostelworld Group, H1 2019 3 2 Average FTE, H1 2019
AGE GEND NDA A H1 H1 20 2019 19 FINANCIAL & OPERATIONAL PERFORMANCE TJ Kelly – CFO FIRST HALF REVIEW Gary Morrison - CEO Q&A SOUL KITCHEN , SAINT-PETERSBURG
ECOMAMA , AMSTERDAM FIN FINANCIAL ANCIAL PER PERFORMANCE FORMANCE
FINANC ANCIAL IAL OPERA RATION TIONAL KEY EY H1 H1 20 2019 19 FI FINANCIAL NANCIAL HI HIGHLIGH GHLIGHTS TS 2019 – investing to fund growth drivers H1 2018 H1 2018 Adjusted 1 Reported H1 2019 HYoHY % • Core Hostelworld Brand bookings declined Gross Bookings: HW Brand 3.8m 3.8m 3.7m (4%) by 4% . • ABV increased by 6% , 2% increase in Gross Bookings: HW Group 4.0m 4.0m 3.8m (5%) Bookings constant currency. by Brand Net Bookings: HW Brand 3.7m 3.7m 3.4m (8%) • Net Revenue decreased by 8% excluding the deferred revenue impact. Net Bookings: HW Group 3.9m 3.9m 3.5m (10%) • Adjusted EBITDA decreased by 15% . Average Booking Value (ABV) 5 €12.2 €12.2 €12.8 6% • Primarily due to the effect of rolling out the free cancellation product. €42.6m €42.6m €38.8m Net Revenue (9%) • The Group absorbed higher than Revenue €46.8m €46.8m €43.2m anticipated cost inflation in performance Net Revenue (excluding deferred revenue impact) (8%) marketing channels offset by a planned €4.2m €4.2m €4.4m Deferred Free Cancellation Revenue 5% reduction in category advertising. • Strong cash generation and conversion Adjusted EBITDA 1,2 €9.8m €10.4m €8.9m (15%) characteristics maintained. Adjusted Profit after tax 1,3 €7.6m €7.6m €6.2m Profitability (19%) Note Adjusted EPS 1 7.97c 7.93c 6.44c 1 The Group has adopted IFRS 16 Leases from 1 January 2019, as disclosed in note 2 to the condensed Adjusted Free Cash Flow 1,4 €13.1m €13.6m €9.6m consolidated financial statements. The Group has applied Cash the modified retrospective approach, and as a result it has Adjusted Free Cash Conversion 1,4 133% 131% 108% not restated prior periods on adoption in its financial statements. For comparative purposes H1 2018 has been Total Dividend Per Share 4.8c 4.8c 4.2c restated in this presentation to reflect the impact of Shareholder adopting IFRS 16, in order to give a true and fair Returns €4.6m €4.6m €4.0m Total Dividend Payout comparative of underlying performance. Source: Management information 6 2 Adjusted EBITDA excludes exceptional items and is net of deferred revenue in relation to free cancellation bookings, this revenue will be recognised at the point at which the traveller no longer has the right to cancel 3 Adjusted PAT is defined as Reported Profit for the period excluding exceptional costs, amortisation of acquired domain and technology intangibles, net finance costs, share based payment expenses and deferred taxation 4 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 5 ABV based on Group Gross revenues/gross bookings (ABV excludes Advertising Revenue, Groups Revenue and Rebates)
FINANC ANCIAL IAL OPERA RATION TIONAL H1 20 H1 2019 19 BO BOOKIN OKINGS GS 4% decline in Hostelworld Brand gross bookings GROSS BOOKINGS H1 2018 H1 2019 Group Bookings 1 4.0m • Hostelworld Brand gross bookings declined 4% ; total Group bookings fell 5% (to 3.8m 4% 0.2m 3.8m bookings). 0.1m 2% • Net of cancellations Hostelworld Brand bookings fell 8% ; 10% decrease in total Group bookings growth (to 3.5m bookings) as the free cancellation product was only fully rolled out in July 2018. 96% 98% • Supporting Brands are in managed decline, contributing 2% of total bookings in H1 2019, down from 4% in H1 2018. 3.8m 3.7m Supporting Growth H1 2019 vs. H1 2018 Hostelworld Total Brands Gross Bookings (4%) (44%) (5%) Net bookings (8%) (44%) (10%) Hostelworld Brand Supporting Brands 1 Supporting brands refers to Hostelbookers, Hostels.com, (hostel & affiliate) booking engines 7
FINANC ANCIAL IAL OPERATIONA RATIONAL H1 20 H1 2019 19 AB ABV Average commission rate increases drive ABV ABV increased by 6% (H1 2018: flat), 2% increase in constant currency GROUP AVERAGE BOOKING VALUE (“ABV”) ( €) 1 Tailwinds 14 • Increase in average commission rates to 16.0% (H1 2018: 15.3%) . 12.84 • New contracts implemented in February 2018 and January 2019, >96% properties 0% 12.20 12.15 and >89% of bookings now on a 15% base rate. ( Note : This base rate excludes 12 the effect of any volume incentive agreements). • Positive impact of exchange rate movements. 10 Headwinds 8 • Slight decline in underlying bed price, driven by destination mix. • Bednights per booking have declined (albeit at a slower rate than prior periods) in 6 line with expectations as a result of continued shift to App/Mobile. • Elevate penetration as expected declined due to increases in base commission. 4 2 Supporting Growth H1 2019 vs. H1 2018 Hostelworld Total Brands 0 ABV 6% 7% 6% H1 2017 H1 2018 H1 2019 1 Note: ABV based on Group Gross revenues/gross bookings (ABV excludes Advertising Revenue, Groups Revenue and Rebates) 8
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