22 AUGUST 2019
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FY19 RESULT OVERVIEW TTV PBT GLOBALISATION CORPORATE AUSTRALIAN LEISURE Another record year In line with amended Strong results in key Continued Disappointing overall guidance overseas markets – out-performance in results particularly Americas sector with strong growth potential 3
RECORD TTV $23.7b Exceeded record FY18 result by almost $2b & achieved 23rd year of TTV growth in 24 years since listing result Average of $65m in TTV per day globally Organic growth predominantly with small contribution from businesses that were acquired during FY19 8.8% year-on-year growth (up 6.4% in constant currency) with fewer sales staff – further productivity gains 4
ACHIEVING STRATEGIC OBJECTIVES: PRODUCTIVITY 19.9% $1,200,000 $1,150,000 productivity increase $1,100,000 since FY15 $1,050,000 $1,000,000 $950,000 $900,000 TTV/Person (AUD) $850,000 FY15 FY16 FY17 FY18 FY19 5
PBT $343.1m Within amended guidance range ($335m-$360m) but below initial target underlying PBT Actual PBT slightly higher at $343.5m (FY18: $364.3m) Underlying result adjusted to exclude impacts of non-recurring gains & losses $29.8m impairment loss (Olympus) offset by $30.1m in non-recurring gains ($6.7m land over-ride revenue pull forward, $3.1m IFRS15 adjustment, $19.6m & $0.7m fair value gains (3Mundi and ETSC) 6
GLOBALISATION International Profit & TTV weighted towards international businesses for the first time businesses driving growth Reflects strong growth overseas and soft Australian leisure results Record TTV in all countries and regions, apart from Nordics Record profit (AUD) in USA, Canada, UK, UAE, South Africa, Netherlands, NZ and China/Hong Kong Americas now a $100m-per-year profit engine 7
AMERICAS: NOW AN EARNINGS POWERHOUSE 120 Underlying earnings in the 100 Americas have 80 increased $ million AUD almost 5-fold 60 since FY16 40 20 PBT 0 FY16 FY17 FY18 FY19 8
CORPORATE Continued 15.2% TTV growth globally to record $8.9b out-performance Corporate brands generated 37.7% of group TTV Achieving scalable organic growth through Corporate Traveller (SME) & FCM (TMS) brands Investment in systems & products - Upside, Savi, Sam :] – to bolster world class offerings & create compelling customer offering Expansion in key global markets - Germany (start-up), France, Switzerland (3Mundi acquisition), USA West Coast (Casto) Significant presence across four key regions, delivering consistent growth & strong future prospects 9
CORPORATE: GROWING & GAINING SCALE GLOBALLY Corporate TTV ($AUb) Corporate TTV By Region ($AUb) 10 3.5 9 3 8 2.5 7 6 2 5 1.5 4 3 1 2 0.5 1 0 0 Australia/New Americas EMEA Asia Zealand Corporate TTV ($AUb) FY19 Corporate TTV ($AUb) 10
% of New FCM TTV Won by Region Americas EMEA Asia ANZ RECORD ACCOUNT WINS 8% 36% 23% $1.3b+ globally for FCM alone during FY19 & circa $2b across corporate division 33% 11
AUSTRALIAN LEISURE CHALLENGES Key business drivers: Flat leisure TTV in subdued trading climate TTV bolstered by solid growth in new & emerging models & brands (traditional leisure TTV down circa 2%) • TTV Growth Increased Flight Centre Brand same store sales but with smaller network following FY18 network consolidation Revenue Margin • Internal and external factors impacting both TTV and margin External: Continued macro uncertainty leading to soft market growth • Costs Internal: Recent changes & enhancements – brand consolidation, EBA, GDS Revenue margin decrease in flagship Flight Centre brand (circa 50bps) Decrease driven by product mix changes (lower attachment) Stabilisation late in year, but below previous levels Key contributor to reduced FCB profits Reasonable success in containing costs, despite additional $14m in EBA costs Modest overall growth – but exceeded revenue growth in challenging climate 12
INVESTMENT IN NEWER MODELS PAYING DIVIDENDS Online Independent Contractor Flash Sale / Ready-made Specialist Flight Centre Network Packages Brand businesses Flight Centre Business Travel, Circa $1.3b in TTV from online Businesses in Australia, NZ, Partnership with Ignite in Groups, RTW, First & Business leisure brands Canada, USA and South Africa Australia Class, Cruise flightcentre.com.au growing at Circa $380m in TTV TTV up 42% to $182m (FLT has About $430million in TTV 40%+ since booking fees were during FY19 49% interest) in Australia during FY19 removed and with minimal cannibalisation – market-share growth More than $2b in FY19 TTV 13
PROFIT & LOSS FY19 FY18 Mvmt % AUD $'m TTV & Revenue Costs Group TTV 23,728 21,818 8.8% Record TTV across all Underlying cost growth in geographic segments, constant currency held to Operating revenue 3,055 2,923 4.5% largely driven by corporate 3% (excluding touring cost Total revenue 3,055 2,923 4.5% brands of sales) with full-year trends consistent with H1 55bps revenue margin FV gain on change in control 20 - 100.0% and leading to a 32bps decline brought about Other income 35 30 14.8% reduction in cost margin largely by ongoing business Share of JV/Associates 1 2 (48.8%) mix changes, as well as EBA in Australia contributed impact of revenue margin $14m to employee benefits Employee benefits (1,592) (1,511) 5.4% decline in FCB Australia cost increase, along with the Marketing expense (194) (197) (1.3%) strong results in the Rent expense (166) (168) (1.4%) Americas Tour & hotel operations (157) (128) 23.0% D&A (82) (78) 5.9% Marketing and rent expense Finance costs (26) (26) 0.3% have been held flat Impairment (30) - 100.0% Increase in other expenses Other expenses (522) (485) 7.6% due to increased PBT 343 364 (5.7%) independent agent consulting fees as the Underlying PBT 343 385 (10.8%) independent agent network expands, ongoing tech EPS (cents) 261.6 261.1 0.2% investment and increased Sales teams 2,832 2,882 (1.7%) outsourcing costs Margins Difference between statutory PBT of $343.4m and underlying PBT of $343.1m due to (55 bps) Underlying Revenue Margin 12.84% 13.39% Olympus impairment ($29.8m); AASB15 transition adjustment ($3.1m); and revenue 32 bps Underlying Cost Margin -10.88% -11.19% alignment in global product businesses ($6.6m) as reported at the half-year, along (32 bps) with $20.3m fair value gain on change in control of 3Mundi and ETSC. Underlying PBT Margin 1.45% 1.76% (8 bps) Marketing % TTV 0.82% 0.90% 14
SUCCESSFULLY SLOWING COST GROWTH 14 12 10 8 6 4 2 0 FY14 FY15 FY16 FY17 FY18 FY19 Underlying Cost Growth (% in constant currency) 15
BALANCE SHEET AUD $'m As at June 19 As at June 18 Mvmt % Assets Liabilities Cash & cash equivalents 1,172 1,273 (8%) Financial assets 115 204 (43%) Reduction in cash balance Trade payables remain flat Trade & other receivables 559 525 7% Contract assets 356 323 10% represents timing of wage year-on-year due to the Other current assets 105 121 (13%) payments throughout the timing of supplier payments Current assets 2,308 2,446 (6%) year and the payment of Increase in Borrowings special dividend ($150m) PPE 240 248 (3%) relates to debt facilities Intangibles 769 586 31% Investments in short-term obtained to fund Other non-current assets 177 120 48% financial assets will acquisitions Non-current assets 1,186 953 24% increase and decrease Total assets 3,493 3,399 3% depending on working capital requirements Trade payables & other liabilities 1,547 1,541 0% Deferred revenue 69 75 (8%) Intangibles increase linked Borrowings 85 35 143% to acquisitions of 3Mundi, Provisions 55 49 13% Casto and Umapped, as well Current liabilities 1,755 1,699 3% as ongoing investment in IT Trade payables & other liabilities 79 88 (10%) projects Deferred revenue 48 56 (13%) Borrowings 100 1 15295% Movement in Other Non- Provisions 48 41 18% Current Assets represents Non-current liabilities 276 186 49% investment in Upside ($56m) Total liabilities 2,031 1,884 8% Net assets 1,462 1,515 -3% General cash 337 445 -24% General investments 16 108 (85%) Client cash 836 828 1% Client investments 100 96 4% Total cash & investments 1,288 1,477 -13% Positive net debt 167 517 -68% 16
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