Bravofly Rumbo Group The future is ONE Zurich, 26 March 2015
At a glance Our strategy was to focus on growing volume and customer base rather than short-term profitability, • in a still complex and highly competitive scenario. Revenue growth driven by acquisitions and international expansion with a rebalanced mix between 2014 • service/agency fees and other sources of revenues. An integrated approach to offline and online brand marketing investments needed as a strategic • alternative to digital channels in order to reinforce long-term customer relations Innovation as a primary focus to simplify the life of travellers and build long term value • WHAT’S lastminute.com acquisition for bridging the gap to achieve our objectives • NOW Fast integration process, to create ONE company and ONE core brand • 2015: Transition year with focus on integration • WHAT’S 2016 - 2017: Unlocking potential and exploiting full synergies • BEYOND return profitability to 2013 level, overperforming against the average market growth while • integrating lastminute.com [€ 7 million negative EBITDA 2014] 2
Responsive strategy in a turmoil market Guidance GTV REV EBITDA Despite market €1,300-1,350 €142-147 €22-24 turmoil and a highly million million million dynamic environment, we executed our strategy of boosting volume and FY2014 Official growing our customer base rather than defending REV EBITDA GTV short-term profitability €147.0 €21.1 €1,311 million million million BELOW RANGE IN RANGE IN RANGE 3 * FY2014 Market consensus was Revenue € 142M, EBITDA € 23M
Long-term strategy focused on volume and customer base growth Strong volume and customer base growth in a Gross Travel Value* Number of Bookings continuously competitive environment In EUR M In ‘000 The Gross Travel Value / Number of Bookings ratio increased by 5.2% from EUR 356 to EUR 375 mainly driven by: - Increase in the average number of 1,311 3,499 passengers per booking - Different geographical mix: higher average 1,051 2,951 GTV outside core markets vs. core markets - v v Different product mix: higher weight of GDS vs low cost flights - Minor increases in underlying fares 2013 2014 2013 2014 OTA business only OTA business only *Gross Travel Value (“GTV”) is defined as the value of the travel products purchased by the Group’s clients using the 4 Group’s platforms, including agency fees, insurance, cruises and gross of any discounts and cancellations.
Increase in revenues driven by internal and external growth Revenues OTA BUSINESS (+8.8%) In EUR M Flight Business (+7.8%) Lower growth than volume growth driven by reduction in average service and agency fees, partially offset by other sources of income 147.0 +13.0 (commissions from airlines, GDS fees and ancillaries v revenues) +10.8 META 27.1 123.2 Non-flight Business (+13.3%) OTA Non Flight Accelerated growth in H2 driven by strong marketing 21.8 v +2.4 effort particularly in Spain across all categories Non Flight (Dynamic Packages, Hotel and Cruises) +2.9 Flight +10.6 Flight 120.0 +7.9 101.4 META-SEARCH BUSINESS Jetcost contributed with EUR 13.0 million of third party revenues (+10.5% vs. previous year) 2013 2014 More aggressive marketing & commercial strategy starting in Q4, in particular outside France Flight Non-flight 5
Revenues growing strongly outside core markets Revenues by geography Key dynamics Italy (5.6% decrease) and Spain (4.3% increase) Others Others Italy Still very competitive environment in both markets. 21.7% 28.1% 27.3% Italy Italy has seen a difficult second half impacted by a 34.6% combination of volumes and pricing pressure, also impacted by the absence of a TV campaign during 2014 2013 the summer (different to 2013) Revenues Revenues Spanish revenues in the second half have seen recovery driven in particular by non-flight products Spain and the positive effects of flight platform fine- 26.7% tuning after Rumbo integration. France Spain France 21.3% 23.4% 17.0% v France (49.0% increase) v The growth in France was mainly driven by the In EUR M Italy France Spain Others acquisition of Jetcost. The OTA business grew by 147.0 10.6% in the period, showing significant recovery in the last months of the year 123.2 41.2 26.7 Other (54.3% increase) 34.4 32.9 Continuous expansion outside core markets: 31.2 21.0 Growth driven by other European Countries 42.6 40.2 (Nordics) and APAC region. Expected increasing contribution of ancillaries revenues (new “full flex fare” option available since December) 2013 2014 6
Increasing marketing investments Operating costs* Marketing costs Marketing costs increased by 3.0% as percentage of revenues In EUR M driven by: Adjusted Costs as % of revenues v • Higher competitive pressure in core markets • Expanding business outside core markets 125.9 • Increasing weight of mobile channel • Further push of non-flights products particularly in Spain 100.4 Personnel costs 44.6% v 41.6% Personnel costs increased by EUR 1.9 million in the period, v decreasing by 1.5% its weight as percentage of revenues 15.6% Other operating costs 17.1% Other operating costs increased by EUR 9.3 million in the period, 25.4% 22.8% increasing by 2.6% its weight as percentage of revenues. v This increase substantially corresponds to the impact of higher credit card processing costs (+2.3% as percentage of revenues) 2013 2014 driven by the increase in Average Gross Travel Value and higher weight of business outside Euro area with structural higher other operating costs personnel costs marketing costs acquiring costs. 7 *Operating cost adjusted as per Adjusted EBITDA .
Adjusted EBITDA impacted by lower OTA profitability Adjusted EBITDA In EUR M 2013 2014 In EUR M Adjusted EBITDA 22.7 21.1 Non-cash impact of stock options (0.8) (0.4) 22.8 21.1 5.1 IPO related costs - (3.9) v Costs related to acquisitions and integration of 16.0 (0.3) (0.2) subsidiaries Litigation, restructuring and other costs/income (0.6) (0.8) 2013 2014 incidental to operating activities EBITDA 18.5% 14.4% Margin Total Adjustments (1.8) (5.1) OTA META 8
WHAT’S NOW
Our vision is driven by INNOVATION… Strategy Execution Target SIMPLIFY THE LIFE BRIDGE SUSTAINABLE OF TRAVELLERS THE GAP GROWTH STORY Organic Best User Experience Model Develop mobile-native platforms, new • Management Apps and reshape our user interfaces Brand Team Continuous investments in cutting-edge, • Research scalable and lean IT architecture Financial Further investment into scaling an iconic • Scale After Booking Position Success consumer brand From OTA to Holiday key factors Smart Travel Nurturing talents, unlocking their full • Provider potential Technology Market M&A On Pre-Trip Leadership Holiday Product Growing through selected acquisitions • Mix Journey driven by «Business Fit» and «Talent/Skills acquisitions» Cover the full range of Traveller needs Committed to shaping the future of Online Travel Business 10
…accelerated by lastminute.com strategic acquisition Vibrant, relevant consumer brand Experienced Management Team One global brand with high recognition • Seniority with diversity among over 90% of European consumers • Integration capability • Marketing competence Financially robust Economic No material impact on €90m scale benefits net cash position Doubling size and relevance Market Leadership Technology strength Reinforcing our position in Increased development major European Countries capacity and competence (e.g. mobile and India centre) Breadth of Product Mix 50/50 revenue split on flights/non flights, with differentiated offering 11
In a more complex market size becomes increasingly important A leading Smart Travel Provider in the online travel and leisure Industry, >35 ranked among the top five OTA worldwide according to GTV* Countries Start-up Build-up Grow-up Scale-up >2.000 People*** 2.5 Billion** estimated >100 1.3 Billion Websites managed 1 Billion 576M 286M >10M Travellers handled 2005 2004 2010 2011 2012 2013 2014 2015 * Source Euromonitor International and Company estimates, based on integration of lastminute.com business, consolidated by 1st of March 2015 12 ** Estimate based on 10 months lastminute.com consolidation (from 1° March 2015) *** Considering Internal employees and external contractors
Reinforcing European leadership with balanced product mix Core markets Consolidated markets New markets Flight Travel & Leisure Meta UK FR IT ES DE Other 26.6 67.8 58.2 43 40.3 22 v v v 131 114.1 12.8 Total Revenues € 257.9M 44% 5% 51% Preliminary 2014 pro-forma figures based on management accounts 13
Creating ONE company through fast integration INTEGRATION PRINCIPLES FOCUSED BRANDS NEW FUNCTIONALLY-LED FAST TECHNICAL ORGANIZATION INTEGRATION STRATEGY ONE ONE ONE HQ in Switzerland supported Technology Architecture Global Brand enabling scability by global competence centres supported by investment and expansion Exploiting full potential Quick Wins Transition Integration Optimisation Generation of synergy Today 14
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