Annual General Meeting Flight Centre Travel Group ASX: FLT | October 22, 2018
AGENDA Today’s Chairman’s Address Schedule MD’s Address Resolutions General Questions Polling Refreshments
Results & Highlights: New Milestones Established Record TTV of Up 8.5% & $1.7b higher than previous record (FY17) $21.8b Represents almost $60m in TTV on average every day Record Profit Near top of upgraded guidance & $55m above FY17 result $384.7m (underlying) 16.8% year-on-year growth & 2% above previous record (FY14) Record $1.67 in fully franked dividends per share Shareholder Returns 14% EPS growth
FY18 Result Drivers: Margins 25bps decrease – decrease was expected & driven largely by ongoing Income business mix changes Margin Reflects rapid growth in lower revenue margin businesses – multi-national corporate (FCM), FX (Travel Money), leisure OTAs 50bps improvement to 11.2%* during FY18 – best result since FY07 Cost Margin More than offsetting the income margin decrease 12 bps improvement Net Margin Driven by turnaround in loss-making businesses, growth from businesses that were historically modestly profitable & lower cost growth *Excludes touring cost of sales
FY18: Building For The Future New in-store Rebrand & Grow FCM technology Hotel management systems (GDS) plan completed in suite consolidated business acquired Australia – 1200 now fully deployed & relaunched as (BHMA), Americas- after Australia & NZ sales people across FCM Connect based DMC New products – FY18 roll-out 250 shops (Olympus) Stronger IT Backbone Leisure Network Corporate Network New Business Verticals PCI, GDPR redeployed during Sam (AI app), Your FC Exclusives New finance 2H CT (SME portal), (voucher model) just platform being Stronger digital Lumo (predicts launched in Australia deployed – platforms, lead flight delays for Americas roll-out management customers) underway, Australia technology, new roll-out set to begin websites, mobile late in FY19 apps and services
FY18: Rebrand & Grow Strategy Brand mergers in Australia to create stronger networks targeting 3 key sectors Mass Market Premium Youth Focus on our No.1 travel brand – Flight Growing a network of premium agents Smaller but better network of Student & businesses (including franchises) Flights shops & b ringing Centre dominating the flight, holiday, under the Travel Associates brand & StudentUniverse to the Australian cruise + small business travel markets Travel Partners home-based & affiliates market to create an online-led youth across a range of models across the models travel brand P2P Index
FY18: Business Transformation Program Successfully Executing Key Strategies Loss-making businesses removed, downsized or pivoted Dealing with problem areas USA & Canada leisure profits for 1 st time since FY12 & FY11 respectively Profit growth driven by overseas businesses – particularly EMEA & Americas Globalisation Investigating further global synergies in air, land & IT areas Costs & Efficiency Slowing overall cost growth & lowering cost margins, improving productivity All BT costs recorded as business as usual
FY18: Solid Progress Towards Transformation Targets 7 2 100 Goal: Goal : Goal: 7% per annum TTV growth on average in Return to 2% full year net margin by FY22 < $100m in underlying* cost growth during constant currency through to FY22 (subject to mix) FY18 FY18 Outcome : FY18 Outcome : FY18 Outcome : Solid progress – 12bps improvement to 1.76% Target achieved – circa $90m growth Tracking above target - circa 8.5% growth achieved Medium-term transformation goals are subject to review as FLT fine tunes strategies & as business mix changes. FLT will continue to provide separate annual guidance. * Excludes touring costs, which were previously netted against revenue
FY18: New Revenue Streams Home-based businesses acquired in Australia & NZ Leisure US start-up,(Independent by Liberty Travel) proving popular Businesses acquired in Canada & NZ Corporate Investment in Germany start-up Global DMC network starting to take shape – Olympus (Americas) TEN acquired & ownership of Buffalo Tours (Asia) increased to 100% Emerging Asia-based hotel management business BHMA acquired
BHMA Thailand-based hotel management company FLT’s first acquisition in the hotel sector Small, but sensible strategic investment Portfolio centred on Thailand at acquisition, but now diversifying Expansion into Bali and Vietnam Targeting additional properties in destinations where FLT has strong market-share
FY18: Investing in Our People New Australian leisure wage model on the way – overwhelming support from staff Workplace Flexibility & Diversity Programs Paid Parental Leave in Australia Mentoring UK Apprenticeship Program FCM Leave, Student Flights Unlimited Leave
FY18: Developing our CSR Platform Making A Now a signatory to UN Global Compact Difference Work underway on inaugural Sustainability Report Brighter Futures Program initiated FC Foundation Four key areas: FCTG Worldwise FCTG People FCTG Environmental Sustainability
Our Structure: Now a Major Global Presence Leisure TEN AU/NZ Three Key Sectors in EMEA Five Key Geographies Asia/India Americas Global (TEN) Corporate
Our Structure: Changing Geographic Mix Half of our company’s sales are now being generated outside of Australia
Our Structure: Changing Geographic Mix $151m FY18 Profit Contribution EMEA & Americas 200 businesses now 150 capable of driving EMEA & Americas 100 overall profit growth Profit Contribution ($m) 50 0 FY14 FY15 FY16 FY17 FY18
FY19: Trading Update 1 st Quarter TTV tracking slightly above longer term target of 7% per year in constant currency Growth Increased PBT but modest growth on PCP Growth driven by overseas businesses as expected Further strong results in the Americas NZ, South Africa, UAE & Asia-India segment also performing well Positive start for EMEA businesses, although results impacted by investment in Germany start-up & UK credit-card regulation change (2HFY18)
FY19: Trading Update Australia Corporate business again performing well Client wins & up-trading driving growth Some ongoing disruption in leisure, as expected Leisure improvement expected during 2H EBA now accepted by staff (but yet to be ratified) Network planning & enhancements taking place
Right-Sizing the Australian Leisure Business TTV benefits expected Consultant later in year numbers now in line with Largest ever PCP recruitment drive completed during 350 fewer Q1FY19 consultants in place at June 30 than one year earlier
FY19: Market Guidance Targeting an underlying PBT between $140m First & 150m for 6 months to Dec 31, 2018 Half Represents 0-7% growth on PCP Targeting $390m-$420m underlying PBT Full Year Circa 1-9% growth on record FY18 result
FY19: Growth Drivers 3.6% compounding growth Reasonable trading conditions expected from 2017-2036 – Ongoing market growth globally in Australia means industry will double International airfare prices remain highly affordable but Further benefits expected from New BT focus & projects threat of increases – fuelled by Business Transformation underway with 3 key pillars oil Program
Business Transformation (BT) Program Launched April 2017 Years 2 & 3 Investment & The “Clean - up” Business stage – businesses Engineering across & brands our 3 divisions Year 1
Business Transformation: Updated Targets in Place Unchanged New Target Unchanged 7 10 2 TTV Growth Cost Margin Net Margin 7% per annum TTV growth on average in 10% cost margin (underlying*costs as a 2% full year net margin by FY22 constant currency through to FY22 (subject to mix) percentage of TTV) by FY22 *Excludes touring cost of sales
Key Globalisation – product procurement & Projects distribution BT: TEN & Product Yield & pricing Vertical integration, structuring & growth of in-destination businesses Content & connectivity – key partner in Sabre’s Beyond NDC & Amadeus’s NDCX programs
Key FCM Truly Global – leveraging global Projects capabilities to improve customer offerings & reduce costs BT: Corporate Lower cost offerings – self service models Continued investment in tech & product suite, which includes Sam :] (AI app) & Your CT (new SME portal) Savi – next generation solution being developed exclusively with Serko
Your CT: New Portal for SME customers PROFILE APPROVE & MANAGEMENT REQUEST TRAVEL TRAVEL POLICY ALERTS INVOICE BOOKING DATA TRAVELLER REPORTS TRACKING
Key FCB 2.0 – using robotics, AI & other initiatives to reduce customer pain points, bureaucracy & improve Projects performance BT: Leisure Premium focus – expanding our independent contractor, affiliate & franchise models Global view to youth sector – online-led model utilising Student Flights & StudentUniverse Digital transformation to grow online sales, deliver quality leads to our people, introduce new & enhanced native apps + new digital solutions (eg Umapped)
New Initiatives: FC Exclusives
Recommend
More recommend
