Annual General Meeting Flight Centre Travel Group ASX: FLT | November 7, 2019
AGENDA Today’s Chairman’s Address – Gary Smith Schedule MD’s Address – Graham Turner Resolutions General Questions Polling Refreshments
Results & Highlights: New TTV Milestone Established Record Exceeded record FY19 result by 8.8% or almost $2billion TTV of $23.7b Growth achieved with fewer sales staff - further productivity gains Record TTV in all countries apart from Nordics 23 rd year of TTV growth in 24 years since listing
Results & Highlights: Profit $343.1m Within amended guidance range ($335m-$360m) but below initial target & record FY18 result underlying PBT Actual (statutory) PBT slightly higher than underlying PBT at $343.5m (FY18: $364.3m) Underlying results adjusted to exclude impacts of non- recurring losses & gains Adjustments outlined in annual report & in full year result announcement in August
Results & Highlights: Cost Growth Slowing 14 12 10 Underlying* Cost 8 Growth 6 (% in constant 4 currency) 2 0 FY14 FY15 FY16 FY17 FY18 FY19 *Excludes touring cost of sales
Results & Highlights: Globalisation Other FY19 TTV Contribution 1% Asia More than half of 8% FLT’s TTV was EMEA 14% generated overseas Australia & Americas NZ 24% 53%
Results & Highlights: Corporate Growth Corporate TTV By Region ($AUb) 3.5 Corporate TTV ($AUb) 3 10 2.5 8 2 6 1.5 4 1 0.5 2 0 0 Australia/New Americas EMEA Asia FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Zealand Corporate TTV ($AUb) FY19 Corporate TTV ($AUb)
Diversity a Strength: Globalisation International Profit & TTV weighted towards international businesses businesses for 1 st time driving Reflects strong growth overseas & soft Australian growth leisure results in challenging trading cycle Record TTV in all regions Record profit in USA, Canada, UK, Ireland, UAE, South Africa, Netherlands, NZ and China/Hong Kong Americas now a $100m-per-year profit engine
Diversity a Strength: Americas Now An Earnings Powerhouse Americas Profit Growth 120 Underlying 100 earnings in the 80 $ million AUD Americas topped $100m & have 60 increased almost 40 5-fold since FY16 20 0 FY16 FY17 FY18 FY19
Diversity a Strength: Corporate Continued 15.2% TTV growth globally to record $8.9b out- performance Corporate brands generated 37.7% of group TTV Scalable organic growth through Corporate Traveller (SME) & FCM (TMS) brands Investment in systems & products to bolster world class offerings & delivering new consumer-grade solutions to customers Expansion in key global markets – Germany (start-up), France, Switzerland (3Mundi acquisition), USA west coast (Casto) Significant presence across 4 key regions, delivering consistent growth & strong future prospects
Diversity a Strength: Strong pipeline of account wins $1.3b+ globally of new business % of New FCM TTV Won by Region (TTV) won by Americas EMEA Asia ANZ FCM alone during FY19 & 8% circa $2b across 36% 23% corporate division 33%
Leisure: 3 Pillars, 2 Paths MASS PREMIUM YOUTH UK ● Market leader and Specialist ● Specialist AU USA ● Growth in new models ● Unmanaged small business FCBT NZ CAN ● Vertical expansion ● Vertical specialist RSA ASIA ● Digitisation ● Digitisation
TTG: A Longer Term Growth Driver BRANDS PROFILE KEY FOCUS AREAS ● ● Small group touring Back-Roads Touring market is the 55+ Global ● ● Topdeck targets 18 – 30s Youth of tomorrow focussed Touring ● ● The brand behind our partner’s brands Global B2B experiences brand Global ● ● Transfers, in country experiences Target the B2B tour & FIT operators DMC ● ● On ground support Value extension via in-destination sales ● Cross – 5 Star luxury brand ● Cross: Luxury, experience seeker Global ● Lumen – 3.5 - 4 star brand ● Lumen: Reflag hotels Hotels ● Away – 3.5 – 4.4 star resort brand ● Away: Value sun seekers Global ● ● Global B2B boutique brand Curated / specialised geographic product Bedbanks / range ● Full range of product - hotels Travelbank ● Service / customer orientated focus
Global Technology Transformation Program Initiated Company-wide 5- PROGRAM OBJECTIVES phase IT review underway with US- 01 Total visibility into all current projects, spends & outcomes based travel tech 02 A rationalised roadmap in line with business priorities consultancy Hudson Crossing to deliver 03 Identification of further required investment to match future strategy meaningful change 04 Implement a new, revised IT organisation & processes & enhance IT & 05 digital platforms M&A strategy for technology & digital capability if required
Record Dividend Payments To Shareholders $ per share final dividend (declared August 2019) 0.98 $310.2m $3.07 in funds returned to shareholders per share in fully franked dividends returned to shareholders 1.49 0.60 $ per share interim dividend (declared Feb 2019) $ per share special dividend (declared Feb 2019)
FY20: Update Challenging conditions during 4 months to Oct 31 – YTD continuation of FY19 2H Trading Mainly impacting bottom-line results Not yet capitalising on strong Q1 TTV growth – above 7% target & at record levels across all 4 geographic segments 11.4% Q1 TTV growth achieved
FY20: Continued Out-Performance In Corporate 18% Q1 TTV • 27.6% TTV growth across the growth & Americas (29.5% growth in USA) now on • 36.2% EMEA growth – bolstered track to by 3Mundi acquisition become a • 11.6% growth in Asia $10b • Australia/NZ TTV up 1.7% in business mature market during FY20
FY20: Leisure Growth in Subdued Trading Climate 4.5% 5.7% growth in Australia, despite subdued trading conditions Q1 TTV Growth driven by new & emerging businesses growth globally Gaining scale & delivering meaningful TTV but not significant profit contributors yet Ready-made packages, home-based (independent contractor) & online Flight Centre brand TTV flat in Australia
FY20: Strong Online Leisure Growth In Australia Rapid growth on flightcentre.com.au Q1 TTV Growth since online booking fees were removed – predominantly new customers • Jetmax (BYOjet & Year-on-Year TTV Growth (%) Aunt Betty) up 140% 80% 60% to $135m 40% • flightcentre.com.au up 20% Year-on-Year 0% TTV Growth 65% to $120m (%)
FY20: 1H Challenges Not Yet Tracking against a much stronger trading cycle in Australia Capitalising On Strong Safety concerns in Dominican Republic affecting North American Top-line leisure business (circa $US5m full year hit expected) Growth UK business performing well – record profit in October 2019 – but being adversely affected by Brexit uncertainty Unrest in Hong Kong impacting Greater China business Underperformance in some areas (in-destination businesses)
FY20: 1H Challenges Timing Additional wage cost step-up in Australia during FY20 Q1 (EBA adopted at start of FY19 Q2 Factors Also Consultancy costs linked to projects initiated late in FY19 Impacting Results Upside development expenses (incurred from FY19 Q4) $11.5m adverse interest impact over full year – lower yields, lower cash balance (special dividend payment), higher repayments (debt facilities)
FY20: Guidance First Half Full Year • Underlying PBT will be below $140.4m • Year-on-year profit growth expected FY19 result, as announced previously during seasonally busier 2H • Reflects challenging 1 st 4 months • Targeting an underlying PBT between $310m & $350m • Stabilisation anticipated late in 2Q • Top of guidance = 2% growth on FY19 • Nov-Dec likely to provide a more • Upside costs (circa $10m) & meaningful insight into Australian results Bentours/Tempo collapse expenses • Underlying FY20 1H Result currently ($5.5m-$7m) to be excluded from expected to be between $90m and underlying results $110m • Further strong growth from Americas corporate business (now FLT’s largest) & in EMEA ($100m+ profit)
FY20: 2H Growth Drivers Contributions Like-for-like from acquired conditions 3Mundi & from late in LDV Q2 businesses Possible benefits from Traction from FY20 Profits Expected to Australian improvement stimulus strategies be Heavily 2H Weighted packages World events Costs starting being to normalise resolved
FY20: Corporate Strategies 1) Hyper investment in sales & marketing 2) Investment in technology 3) Our people 4) Cost reduction & efficiency gains 5) Market leading & unique products 6) Further geographic expansion
FY20: Slower growth in Australian outbound travel % Growth 8.00% 6.00% 4.00% Growth 2.00% 0.00% FY09-18 FY19 July & August (CAGR) (FY20)
FY20: Leisure Strategies 1) Customer systems & centricity 2) Digitisation (online/offline) 3) Product & pricing 4) Modern marketing 5) Network 6) Model shift
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