ATG Investor Presentation March 2019
“A leading travel & tourism company with balanced portfolio of trusted brands that consistently exceeds customers expectations .”
The Group at a Glance Investors Presentation March 2019 ea ed ed a eda ea ed in a e n e e n e ea ed ade ade e n e Well balanced hospitality Strong leadership position Largest Middle East portfolio travel company 58% share of KSA OTA 1 2 cities; 5 operating hotels SAR 9 b 1880 rooms 25% share of corp. & gov't gross booking value ea ed i an a e n e Largest distribution Profitable since IPO (2012) 2 Strong online presence & growth Network in KSA 90M online 400+ FY 2018 sessions (2018) Adjusted net profit 276 m points of sale 50% growth YoY 1. KSA flights market share among top competitors (Flying, Travel start) excluding LCC 2. Based on adjusted earnings normalizing for SAR 421 loss due to Thakher divestment
The journey so far Investors Well defined strategy Presentation March 2019 & business model Full launch of transformation 4 core business units ▪ Travel management ▪ Restructuring biz to focus Shift in strategy ▪ Consumer travel on core travel ▪ Hajj & Umrah ▪ Expanded products and ▪ Launching online travel ▪ Hospitality Old model services And, two non-core units ▪ Evaluating and ▪ Cost synergies ▪ Car rental assessing portfolio ▪ Offline only ▪ Building digital platform for ▪ Corporate Ventures ▪ Building a new strategy future – establishing scale ▪ Limited to transactional ticketing ▪ Hospitality projects Supported by strong central delivered ▪ Highly concentrated corporate functions customer base ▪ Launch Hajj & Umrah ▪ Unstructured acquisition of lands & international companies < 2015 2015 > 2016 2017 > 2018 2019
Transformation Strategy Update Investors STRATEGIC INITIATIVES 2017 ACHIEVEMENTS 2018 Presentation March 2019 ▪ Four up-and-running focus areas ▪ Reorganize main business units serving travel management, consumer ▪ Upgrade technological capabilities travel, H&U and hospitality General ▪ Implemented group-wide data lake , data processing systems and CRM system ▪ ▪ Improve alliances with vendors Signed deals - 21 airlines in KSA, 25 ▪ Grow number of corporate accounts in UAE; 18 corporate accounts ▪ ▪ Defend leadership with Government Integrated with 8 hotel chains and Travel accounts achieved 25% booking share from direct contracted hotels Management ▪ Remained #1 travel manager for key Government accounts ; Ministry of Health ▪ ▪ Grow OTA market share in core Grew OTA market share in KSA Consumer markets (58%) and UAE (20%) ▪ ▪ Offer unparalleled customer Over 1 million customers combined Travel experience across online and offline on Almosafer and Tajawal ▪ channels Enter Kuwait ▪ ▪ 7 new hotels under the Choice Leverage the Choice Hotel brands franchise with over 1,000 rooms to grow mid-market segment Hospitality under development ▪ ▪ Formalize Hajj & Umrah offering Established SBU , launched Q4 2018 ▪ Signed 3 agents and commitments Hajj & Umrah for 21,000 packages for 2019
Our current business structure Investors Presentation March 2019 Corporate Functions Strategic Business Units Strategic Business Units Units (Core) (Non-core) Travel Finance CoE Car Rental Management Consumer Corporate IT Data Travel Ventures HR Strategy Hajj & Umrah Marketing & Legal Hospitality Communication
Each core business unit has a strategic objective Investors Presentation March 2019 Travel Consumer Hajj & Hospitality Management Travel Umrah ▪ e “w le ale” ▪ Extracting value out of ▪ Grow and enhance ▪ Offering a seamless operator model; improving legacy real estate Corporate and omni-channel experience link between inventory and investments Government ▪ Leveraging the strong distributor ▪ Focus on cost brand ▪ Providing bundle solutions ▪ Accelerating penetration optimization and ▪ Developing innovative to agents in 9 key source into rising mid-market transparency travel packages and markets hotel segment ▪ Provide integrated travel advisory services ▪ First year objective is to ▪ Use Choice Hotels management solutions ▪ Creating a profitable and build relationship and strong master franchise ▪ Leverage solid reputation strong branch network distribution network ▪ Establish a network of 30 and past relationships ▪ Already recorded hotels with 6,000 rooms commitments of 21,000 in 5 years packages 2019 ▪ Support the Gov ambitions ▪ Leverage domestic and of growing this sector Hajj & Umrah tourism to ▪ 15m by 2020 boost revenue synergies ▪ 30m by 2030
Supportive tourism market in the Middle East and KSA Investors Presentation March 2019 8% Middle east leisure annually & moving to online while offline remains very important market growing ea ed ed a eda ea ed i an a e n e e n e Travel market in the Middle East online travel middle east expected to market estimated to reach reach SAR 160B SAR 400B+ By 2021 By 2021 Mobile expected to account for 35% of online travel sales by 2020
Supportive tourism market in the Middle East and KSA Investors Presentation March 2019 Significant growth opportunities in Consumers and Hajj & Umrah segments Corp. & Gov’t Consumers Hajj & Umrah Others SAR 8 B 6 SAR 70 B SAR 38 B 4 Inbound Hajj & 12 B SAR (mainly travel for Umrah medical care) Outbound ~3-4% SAR 7 B 7 SAR 12 B 5 ~3% (mainly travel for religious ~25% tourism) Domestic Total market ATG market share 1. Includes VFR market ~SAR 11-13 bn. 2. Includes all travel for business and professional reasons and education & training (MoHE driven market). 3. Includes travel for medical care, religious visits, sports, special occasions and miscellaneous reasons. 4. Includes VFR travel of ~SAR 8 bn 5. Includes VFR travel of SAR 3-4 bn. 6. Includes SAR4-5bn of travel for medical care. 7. Includes SAR 4-5bn of religious travel. Source: Tourism statistics (2015), SCTH, MAS KSA, Euromonitor International Passport – Travel in Saudi Arabia (August 2016), Al Tayyar Strategy Unit (2017)
Consumer Travel – capturing market share Investors Presentation March 2019 Fast establishment & growth of consumer Short-term strategy Establish strong branch network Fuel growth and create well- brands recognized brands Develop high-class product offering (travel packages) Optimize technologies & set-up cost-efficient and sustainable Provide high quality customer operations service Merge consumer brands to increase Central Consumer Business Long-term strategy Unit efficiencies "Bring together the best Share individual from both worlds" capabilities, increase through consumer efficiencies & prepare amalgamation to offer a potential phase-out of unique value proposition "weak brands"
Consumer Travel – the future is “ ni - annel” Investors Presentation March 2019 Branches Call Center Web Social Media Mobile -App WhatsApp Omni-Channel offers unique & seamless high-quality experience across all consumer channels
… 60% w i i a ed Hajj & Umrah: Estimated to grow to 205 BN 1 SAR 2030… hospitality in the value chain Investors Presentation March 2019 72.3 Value chain breakdown (2017) 41.5 72 2017 BN SAR total 18.6 consumer spend 1 5.7 3.0 3.5 8.3% Activities F&B Visa Air Hospitality Total Transport CAGR CAGR '17-'30 Value chain breakdown (2030) 204.8 consumer spend 1 205 116.7 2030 BN SAR total consumer spend 1 54.1 16.5 8.0 9.5 Activities F&B Visa Air Hospitality Total Transport 12 1. Based on base scenario of growth
Hospitality – sustainable, long-term cash flow Investors 5 Presentation 1880 March 2019 operating hotels rooms 5-Star 3 Haram – Adjacent to cities hotel in Makkah Revenue* SAR 65m 2018 2017 7 Target mid-market segment - new hotels under use Choice Hotels construction master franchise Riyadh and 1000+ Jeddah rooms Revenue* Complete SAR 86m H2 2021 Leverage Hajj & Umrah *Additional revenue – Muthmira and Mawasim • Revenue: SAR 41m 2017 • Revenue: SAR 69m 2018
Recommend
More recommend
