Date: 20/02/2019 Presenter Name: Jamie Pherous, Managing Director 2019 Half Year Results .
Disclaimer. The information in this presentation does not constitute personal investment advice. The presentation is not intended to be comprehensive or provide all information required by investors to make an informed decision on any investment in Corporate Travel Management Limited ACN 131 207 611 (Company). In preparing this presentation, the Company did not take into account the investment objectives, financial situation and particular needs of any particular investor. Further advice should be obtained from a professional investment adviser before taking any action on any information dealt with in the presentation. Those acting upon any information without advice do so entirely at their own risk. Whilst this presentation is based on information from sources which are considered reliable, no representation or warranty, express or implied, is made or given by or on behalf of the Company, any of its directors, or any other person about the accuracy, completeness or fairness of the information or opinions contained in this presentation. No responsibility or liability is accepted by any of them for that information or those opinions or for any errors, omissions, misstatements (negligent or otherwise) or for any communication written or otherwise, contained or referred to in this presentation. Accordingly, neither the Company nor any of its directors, officers, employees, advisers, associated persons or subsidiaries are liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying upon any statement in this presentation or any document supplied with this presentation, or by any future communications in connection with those documents and all of those losses and damages are expressly disclaimed. Any opinions expressed reflect the Company’s position at the date of this presentation and are subject to change. No assurance is given by the Company that any capital raising referred to in this presentation will proceed. The distribution of this presentation in jurisdictions outside Australia may be restricted by law and you should observe any such restrictions. This presentation may not be transmitted in the United States or distributed, directly or indirectly, in the United States or to any US persons, and does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States, and is not available to persons in the United States or to US persons. Page 2
Overview. CTM is an award-winning provider of innovative and cost effective travel management solutions to the corporate market. Its proven business strategy combines personalised service excellence with client facing technology solutions, to deliver a return on investment to clients. Headquartered in Australia, the company employs approximately 2,700 FTE staff and the CTM network provides localised service solutions to clients globally. CTM has been proudly operating for 25 years. Page 3
Group Financial Highlights.
Group results highlights. Change on Reported ($AUDm) 1HFY19 P.C.P • Underlying EBITDA up approximately 21% to $64.6m TTV (unaudited) 2,951.5 +31% (includes $1.3m FX upside to forecasted FX assumptions) Revenue and other income 212.2 +23% • Strong organic growth and specifically, record client wins underpins EBITDA performance # Underlying EBITDA 64.6 +21% • Excellent translation of revenue to EBITDA due to benefits of Statutory NPAT attributable to CTM's growing scale, technology and automation 38.9 +27% owners of CTD • Operating Cash Flow is expected to be circa 100% for FY19 *Underlying NPAT (excluding 42.6 +20% acquisition amortisation) • Half year fully franked dividend up 20% to 18c Statutory EPS, cents basic 36.0c +25% • Currently trading at the top end of FY19 underlying EBITDA guidance at $150m, or +20% on the p.c.p. (original guidance range $144m-$150m) *Underlying EPS, cents basic 39.4c +17% (excluding acquisition amortisation) Half Year Dividend, fully franked 18c +20% # Excluding pre-tax one-off acquisition and non recurring costs of $1.4m (1HFY18: $0.6m) * Net of non-cash amortisation relating to acquisition accounting $2.8m (1HFY18 $4.5m) and post-tax acquisition costs of $0.9m (1HFY18: $0.4m) Page 5
Growth Profile.
Statutory EPS growth - successful M&A with organic growth. ? Typical seasonal EBITDA split 71.4 1H 40% - 43% 2H 57% - 60% 52.5 42.8 42.8 30.6 27.9 25.1 18.8 17.4 14.9 36.0 28.6 11.6 21.9 8.2 17.7 10.5 7.2 6.7 2013 2014 2015 2016 2017 2018 2019 1H 2H Page 7
A quality business – out performing in every region. Page 8
Regional Performance.
Underlying 1HFY19 EBITDA Growth Summary (AUD$m). • Organic growth again the catalyst for performance , representing approx. +18% on 1HFY19 baseline • Previously flagged overheads would grow at a slower rate than revenue as CTM built out a global support structure *M&A EBITDA values represent EBITDA at time of acquisition announcement (Lotus $1.3m, SCT 0.4m) Page 10
1HFY19 Regional overview. Australia & New Europe CTM Consolidated Zealand North America Asia Group Dec-18 Dec-17 Dec-18 Dec-17 Dec-18 Dec-17 Dec-18 Dec-17 Dec-18 Dec-17 Dec-18 Dec-17 REPORTED (AUD) $m $m $m $m $m $m $m $m $m $m $m $m TTV 2,951.5 2,258.5 31% 649.6 541.2 20% 689.9 592.4 16% 1,070.5 667.9 60% 541.5 457.0 18% -- -- Revenue 210.2 171.9 22% 58.3 50.5 15% 70.2 59.4 18% 38.3 26.1 47% 43.3 35.9 21% 0.1 -- Adj. EBITDA 64.6 53.5 21% 22.3 18.9 18% 17.9 17.3 3% 12.5 9.3 34% 16.8 12.9 30% (4.9) (4.9) 0% EBITDA/revenue margin 30.7% 31.1% CONSTANT CURRENCY* TTV 2,798.6 2,258.5 24% 649.5 541.2 20% 641.8 592.4 8% 997.1 667.9 49% 510.2 457.0 12% -- -- Revenue 200.3 171.9 17% 58.3 50.5 15% 65.3 59.4 10% 35.7 26.1 37% 40.9 35.9 14% 0.1 -- Adj. EBITDA 61.8 53.5 16% 22.5 18.9 19% 16.7 17.3 (3%) 11.6 9.3 25% 15.9 12.9 23% (4.9) (4.9) 0% * Constant currency reflects December 2017 as previously reported. December 2018 represents local currency converted at average foreign currency rates for the half year ended 31 December 2017 Page 11
ANZ. % Underlying EBITDA up 18% on the p.c.p.: 1H19 1H18 Change • Region continues to outperform market Reported (AUD) $m • Winning market share through record new client wins and TTV 649.6 541.2 20% retention • Revenue 58.3 50.5 15% 1H result includes $0.4m EBITDA contribution from SCT acquisition Underlying EBITDA 22.3 18.9 18% • Approximately 80% of all client transactions are on-line EBITDA / Revenue Margin 38.3% 37.4% 2H19 Outlook: CONSTANT CURRENCY • TTV 649.5 541.2 20% Experiencing steady client activity • Revenue 58.3 50.5 15% Momentum from record client wins in 1HFY19 continuing • Underlying EBITDA 22.5 18.9 19% ANZ will again be a significant contributor to Group profit Page 12
Asia. % Underlying EBITDA 34% on the p.c.p.: 1H19 1H18 Change • Business performing well across all segments Reported (AUD) $m • CTM technology gaining good traction, resulting in client wins and TTV 1,070.5 667.9 60% improved sales pipelines Revenue 38.3 26.1 47% • Lotus Travel integration going well. Achieving early revenue and cost synergies in 2QFY19 of ownership that will play out in 2H19 Underlying EBITDA 12.5 9.3 34% • Decline in EBITDA and revenue margin a result of Lotus EBITDA/Revenue Margin 32.6% 35.6% contribution. As previously flagged, Lotus acquired at lower margins than CTM Asia business CONSTANT CURRENCY TTV 997.1 667.9 49% 2H19 Outlook: Revenue 35.7 26.1 37% • Experiencing small decline in ticket price and activity but not expected to have impact on 2H Underlying EBITDA 11.6 9.3 25% • One-off duplicated costs of $2.5m associated in moving 3 offices Organic Growth reconciliation (AUD): Underlying EBITDA 12.5m into 1 amalgamated office, enabling accelerated synergies in FY20 Lotus baseline EBITDA 1.3m (3 months) CTM Asia ex Lotus, 1HFY19 11.2m • Less :CTM Asia, 1HFY18 (9.3m) Expect Asia to have a strong 2H19 and be a key contributor to Organic EBITDA growth 1.9m +20% incremental profit growth in FY20 and beyond Page 13
North America. Underlying EBITDA up 3% on the p.c.p.: % 1H19 1H18 Change • As previously flagged, strong revenue growth off-set by additional $2.0m technology hub development costs expensed Reported (AUD) $m in 1H versus the p.c.p. This explains the lower EBITDA margin TTV 689.9 592.4 16% • On a ‘like for like’ basis, EBITDA would be up 15% Revenue 70.2 59.4 18% • Technology suite launched to market, with on-going client rollout and regular enhancements underway, continuing throughout Underlying EBITDA 17.9 17.3 3% CY19 EBITDA/Revenue Margin 25.5% 29.1% 2H19 Outlook: CONSTANT CURRENCY • Experiencing continuation of broad based client activity increase TTV 641.8 592.4 8% • Expecting double digit 2H profit growth as development costs Revenue 65.3 59.4 10% normalise compared to the p.c.p. Underlying EBITDA 16.7 17.3 (3%) • 2H seasonal skew • Expect technology to create new growth opportunities into FY20 in national and SME client segment Page 14
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