Half Year Results 2017 Corporate Travel Management 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 more than 2,000 FTE staff globally and services clients in 53 countries.
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: 02
Group Result Highlights HY2017 Change on P.C.P $AUD (m) • Underlying EBITDA up 45% to $40.4m , despite $2.0m negative FX impact to profit. (Statutory EBITDA $40.1m) TTV (unaudited) 1,870.2 9% • Strong organic growth underpins EBITDA Revenue and other income 150.5 26% performance. Underlying organic growth 29% for the period excluding M&A Underlying EBITDA 40.4 45% • CTM SMART technology and global network were key *Underlying NPAT (excluding contributing factors to organic growth/client wins 27.3 55% acquisition amortisation) • CTM model continues to provide earnings certainty *Underlying EPS, cents basic 27.3 51% Transactional volume growth, not ticket prices, is the driver of revenue and EBITDA growth Statutory NPAT attributable to 22.1 28% owners of CTD • Excellent translation of revenue to EBITDA due to Statutory EPS, cents basic 22.1 24% benefits of CTM's growing scale and integrated automation • Over 100% operating cash flow conversion Half Year Dividend, fully franked 12c 33% • Trading at the top end of FY17 underlying EBITDA • Net of non-cash amortisation relating to acquisition accounting $4.9m (1HFY16 $2.7m) guidance, or $97m and well positioned for growth into FY18 Page: 03
Growth Profile
Recap: How and why we grow - Innovation the Key OUTCOMES OUTCOMES High staff engagement • 1H17 – record value of new clients won at • • Agile decision making & empowerment record conversion rates. Continuing into 2H17. Continuous Revenue/FTE gains • CLIENTS PEOPLE Historical 97%+ Client retention and satisfaction • (productivity) AUTOMATION & TOOLS INTUITIVE PRODUCT TO BEST SERVICE DEVELOPMENT & ROI CLIENTS DELIVERY INNOVATION AND PROCESS INDUSTRY LEADING SEAMLESS GLOBAL GLOBAL OUTCOMES SOLUTION METRICS BUSINESS OUTCOMES Built global network - huge barrier of entry • SUSTAINABLE BUSINESS • Enormous market share opportunity - Market High growth model • GLOBAL MODEL estimated at US1.4trillion, largest player Long term sustainability and earnings certainty • NETWORK approximately 1% (CTM under 1%) • Disruptor, not a follower Allowing additional organic growth across new • Improved EBITDA margins • segments (Global corporate , B2B, B2C, Loyalty) • High compound EPS growth • Building and leveraging scale and buying power Page: 05
CTM Global Footprint and Performance Overview _____________________________________________________ EUROPE Market Size USD500b CTM Market Share <1% ASIA Revenue $16.8m (-8%) (*+16%) Market Size USD650b EBITDA $3.8m (+41%) (*+78%) CTM Market Share 1%+ USA Market Size USD350b Revenue $29.7m (-14%) (*-10%) EBITDA $9.3m (-14%) (*-11%) CTM Market Share <1% Revenue $60.4m (+128%) (*+140%) EBITDA $16.3m (+254%) (*+269%) ANZ Market Size AUD7.0b CTM Market Share 14% Revenue $41.7m (+12%) EBITDA $15.7m (+23%) CTM office Partner office Market size estimated at USD1.4 trillion, growing at USD40bn p.a. * Represents constant currency comparisons Operating out of 53 countries, employing over 2000 FTE
Underlying 1HFY17 EBITDA Growth Summary (AUD$m) California (6 months) Boston (6 months) EUR 1.1m USA 5.7m ANZ 2.8m ASIA -1.5m Organic growth the catalyst for H1 performance ($8.1m of $12.4m), representing +29% organic profit growth on 1H16 baseline in constant currency • • The performance achieved is despite FX having a negative $2.0m effect on EBITDA in 1H17 Proven M&A methodology translating into successful integration and contributions • • Global overhead increase a reflection of building a highly competent global team that is sized for future expansion Page: 07
Statutory EPS Growth Since IPO December 2010 FY17 PROFIT GROWTH BUILD (CTM HAS HISTORIC 2H PROFIT SKEW) 70.0 60.0 M&A $7m *$97.0m 42.8 50.0 cents per share CTM $40.4m $49.6m 40.0 27.9 25.1 30.0 1H 2H FY17 18.8 * Revised Forecast 16.3 *14.9 13.5 17.4 20.0 11.6 6.6 9.8 21.9 8.2 7.2 17.7 10.0 10.5 3.6 7.2 6.7 6.5 6.3 3.0 - 2010 2011 2012 2013 2014 2015 2016 2017 HY FY The above numbers reflect diluted EPS growth. *Restated downwards for voluntary change in accounting policy on recognition of pay direct commissions Page: 08
EBITDA Contribution by Region* * Before global overhead costs 1HFY17 $40.4 FY16 $69.0m 8% 8% FY15 $49.1m 21% 5% 28% 30% 35% 37% 47% 18% 36% 27% Asia NA ANZ EUR Asia NA ANZ Europe Asia NA ANZ Europe Building a diversified global business, with North America now our largest profit contributor • Europe expected to be significantly larger market share of the group in 2H17 and FY18 • Page: 09
Award Winning CTM ASIA CTM North America CTM Europe CTM North America Best Travel Agency – Hong Loyalty Travel Innovations Travel Agent Best Travel Management Allure Travel By CTM Kong’ 2016 (7 th win in 9 Organizations - Overall - Travel Agent Company (£50m to £200m North America’s Leading Travel Agency years) Innovation annual UK sales) 2017 Winner 2016 CTM Group ETM ANZ CTM ANZ CTM ANZ BRW Innovative ETM ANZ AFTA Best National Travel Andrew Jones Travel Companies List 2016 Best Mobile Attendee APP Best Business Events Management Company ‘Top Seller Tasmania’ Centium Client Innovation Awards Agency 10 Times Winner 2016 Winner 5 years Page: 10
P&L by Region
North America Underlying EBITDA up 254% on the p.c.p, organic EBITDA growth 54%. $AUD (m) North America • Excellent 1H given currency depreciation and US election effect on economic activity 1H2017 1H2016 % Change Building a highly competent management team that is executing on all fronts; • winning market share, productivity, scale, M&A execution, integration and TTV (unaudited) 619.1m 327.9m 89% Loyalty growth The Travizon (Boston) acquisition has been an important geography, for • Revenue 60.4m 26.4m 128% winning both East Coast US and Global business during the half 2HFY17 Outlook : Yield % of TTV 9.7% 8.0% Continued client wins expected to translate into a strong year • Expect seasonal profit skew to 2H • Underlying EBITDA 16.3m 4.6m 254% US corporate sentiment is strongly correlated to client activity • Organic Growth breakdown: % of Revenue 26.9% 17.4% 1H16 EBITDA 4.6m Add M&A (6 months - California and Boston) 6.0m 1H16 Revise Baseline 10.6m Organic growth 5.7m (+54%) 1H17 EBITDA 16.3m Page: 12
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