MORGANS QUEENSLAND CONFERENCE Graham Turner, CEO October 9, 2019
COMPANY OVERVIEW 20,000 people worldwide Our Strong corporate culture built around 3 core values – egalitarianism, ownership & irreverence Business Operating in 3 key sectors – leisure, corporate & in-destination travel experiences (now known as The Travel Group or TTG) Leisure & corporate businesses in four major geographic regions – Australia/NZ, Americas, EMEA & Asia TTG a longer term driver of group results & includes: DMCs in Asia & Mexico (Discova), hotel management in Thailand, Vietnam and Bali (Cross Hotels & Resorts) and tour operators (Topdeck, Back-Roads) 2
FY19 RESULT RECAP RECORD TTV OF UNDERLYING GLOBALISATION CORPORATE $310.2m $23.7b PBT OF $343.1m SHAREHOLDER RETURN 23 rd year of growth in 24 years In line with amended guidance Continued out-performance & $3.07 per share in fully franked Strong results in key overseas since listing but below PCP after strong future growth potential in dividend payments, including markets – $100m+ profit fin the challenging 2H business travel sector $1.49 special dividend Americas 3
KEY FY19 THEMES: DIVERSITY & GLOBALISATION More than half of FLT’s TTV is now generated overseas A market leader in both leisure & corporate travel FY19 TTV Contribution FY19 TTV Contribution Leisure Corporate TTG TTV weighted Asia Other 1% towards leisure but 8% 1% EMEA mix likely to change 14% given stronger 38% growth trajectory & Australia & broader geographic Americas NZ 61% footprint in 24% 53% corporate 4
CORPORATE: GROWING & GAINING SCALE GLOBALLY Corporate TTV Contributions – Corporate TTV ($AUb) 10 FY19 9 8 7 Asia 6 12% Australia/ 5 New 4 Zealand EMEA 3 33% 22% 2 1 0 Americas 33% Corporate TTV ($AUb) 15.2% corporate TTV growth to $8.9b during FY19 & further growth during FY20 Q1 5
EUROPE: PLATFORM IN PLACE FOR RAPID GROWTH Significant continental Europe footprint – home to some of the Expanding world’s largest corporate travel markets Presence in Key Equity owned businesses in key countries – France, Germany, Corporate Switzerland, Netherlands, Sweden, Finland, Norway, Denmark Region Corporate focus – pure-play offerings in all countries Gaining scale & poised to become a key FY20 EMEA result driver Germany start-up winning business & targeting break-even during FY20 6
LEISURE: ONGOING EVOLUTION – 3 PILLARS, 2 PATHS MASS PREMIUM YOUTH UK ● Specialist ● Market leader and Specialist AU USA ● Unmanaged small business FCBT ● Growth in new models NZ CAN ● Vertical specialist ● Vertical expansion RSA ASIA ● Digitisation ● Digitisation 7
AUSTRALIA: LEISURE BRANDS & MODELS Brands & models covering 100% of the leisure travel market CONTACT CENTRE SPECLIALSIATION FLAGSHIP/HYPER ACCELERATED COMMUNITY OWNERSHIP FRANCHISE FCBT OTA IC BRAND FLIGHT CENTRE Y Y Y Y Y Y Y N Y UNIVERSAL TRAVELLER Y Y Y N N Y Y N Y TRAVEL ASSOCIATES N N N Y N Y Y Y Y 8
STRONG GROWTH IN NEW/EMERGING LEISURE MODELS Online – about $1.3b in online leisure TTV during FY19 Home-based/Independent contractor Specialist Flight Centre brand businesses Ready-made packages/flash sale 9
FURTHER ONLINE GROWTH: TTV DOUBLING IN AUSTRALIA Rapid growth on flightcentre.com.au Q1 Jetmax* up 140% to since online booking fees were removed TTV $135m Growth Year-on-Year TTV Growth (%) 80% 60% flightcentre.com.au up 40% 20% Year-on-Year TTV 65% to $120m 0% Growth (%) *Jetmax includes BYOjet & Aunt Betty 10
54% of online bookings are flightcentre.com.au made by under-45s Customer Domestic Weighted: Predominantly travellling within Percentage of Bookings By Age Group Australia – more than 80% of bookings (circa 60% of TTV) Profile 18-24 6% New Customers: Only 8% crossover with retail network – 65+ pointing to market-share growth 11% 55-64 25-34 Age & Gender: 54% under-45, 64% female 16% 28% Average Booking Size: $1823 international, $474 domestic 45-54 (average booking size is 2-2.5 times higher in-store) 35-44 19% 20% Short Window: 40% of domestic bookings for departure within 7 days 11
HOME-BASED/INDEPENDENT CONTRACTOR Developing Networks in place in Australia, NZ, Canada, USA & South Africa – delivered circa $380m in TTV during FY19 a Global Circa 10% TTV growth in early FY20 trading Footprint Small acquisition recently in Canada (Ixtapa Travel) – entry to a new province (Saskatchewan) Referral & host agency models Lower cost model offering greater flexibility for agents & convenience for customers 12
SPECIALIST FLIGHT CENTRE BRAND BUSINESSES Dedicated Flight Centre Business Travel (FCBT), Groups, Round-The-World, First & Business Class, Groups Offerings for Key About $430m in TTV in Australia during FY19 Sectors Additional $340m from FCBT in UK during FY19 13
IGNITE: READY-MADE PACKAGE SECTOR TAKING OFF Now 100% owned by FLT (previously 49%) Business Overview 3 key divisions – My holidays, Flight Centre Exclusives & Rewards Highly productive models – opportunity to export to other FLT geographies Making complex packages simple for customers & consultants My holidays (14 destination & cruise businesses) growing strongly Circa 55% TTV growth across the business YTD 14
Customer Journey Inspiration (Advertising) 1.Customer inspired by advertising Press Digital Database across a range of channels 2.Majority of enquiries submitted via form on website Enquiries 3. All bookings completed by ITG’s onsite call centre Phone (30%) Online (70%) Bookings 100% Ignite Call Centre 15
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Customer Journey (Inspiration)Advertising 1.Customer inspired by advertising Database Press Digital Store across a range of channels (limited) 2.Majority of enquiries in stores Enquiries 3.All bookings recorded within Store Phone Online centralised system Bookings Store Ignite Call Centre Online / Direct 17
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FY20: GUIDANCE TO BE PROVIDED AT AGM (Nov 7) Q1: Challenging Comparative Q2: Stabilisation 2H: Recovery • Ongoing TTV growth but underlying profit below • Expecting results to stabilise in near-term – like- • Opportunity to achieve stronger growth in prior year & initial expectations for the period for-like trading conditions from now on in Australia overseas earnings as conditions improve/concerns •Tracking against the PCP’s strongest trading • EBA costs also like-for-like from October 2019 abate • Like-for-like cost comparisons as year progresses: period ($4million headwind during Q1) • Continuation of subdued trading in Australia – • Gross margin recovery • Additional consultancy fees incurred early in FY20 most evident in leisure sector • November-December expected to provide a more (IT & other reviews) • Unrest/macro uncertainty in some key • Upside – corporate SME technology investment meaningful comparison of current year trading but geographies, including the UK (Brexit) underlying FY20 1H profit likely to be below • Interest expense (debt facilities taken on during • Downturn in travel to Dominican Republic (safety $140.4m FY19 !H result PCP to fund acquisitions) concerns) impacted US leisure business • Possible benefits from recent interest rates cuts & • Minimal impact from Thomas Cook collapse but tax refunds in Australia during peak booking circa $7m in costs likely to be incurred in re- periods for bigger ticket international holidays accommodating Bentours/Tempo customers • Leisure network enhancements – people & shop • Lower interest earnings during Q1, given interest networks rightsized rate cuts in Australia during past 12 months • Underperformance - soft Q1 operating results from touring & DMC businesses 19
QUESTIONS? 20
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