Novaturas Group Presentation addressing Q1 2019 financial results 30 April 2019
Novaturas Group Q1 2019 highlights 41,0 41,097 97 EUR 28.8 EUR 28.8m 15.7 15.7% share in Q1 2019 sales PAX sold in Q1 2019 Q1 2019 revenue (+9.2% y/y) (+11.5% y/y) from e-commerce EUR 0.1m EUR 0.1m EUR (0.1 EUR (0.1m) m) EUR 3.6m EUR 3.6m Q1 2019 EBITDA Q1 2019 net loss Q1 2019 gross profit (vs. EUR 1.3m in Q1 2018) (vs. EUR 0.9 net profit in Q1 2018) (-25.9% y/y) +2.6% +2.6% y/y growth (by PAX) in early bookings for 2019 summer season (as of 31 March 2019) 2
Today’s presenting team A udronė Keinytė Tom omas as Staškūnas CEO CFO ▪ With the Company for 13 years ▪ With the Company for 10 years (since 2006) (since 2009) ▪ CEO since January 2019, ▪ Has experience as CFO and earlier in charge of product CEO in companies specialized development and purchasing in consumer goods ▪ Has strong commercial background as well as deep knowledge of tourism products and the industry itself 3
Favourable macroeconomic conditions in the Baltics... ... GDP growth rate (%) Unemployment rate (%) 7% 12% 6% 10% 5% 8% 4% 3% 6% 2% 4% 1% 0% 2% Lithuania Latvia Estonia Lithuania Latvia Estonia Average monthly gross salary (EUR) Inflation (%) 1 500 5% 4% 1 300 3% 1 100 2% 900 1% 700 0% Lithuania Latvia Estonia Lithuania Latvia Estonia 4
… translate into growing demand for Novaturas products, but also attract competitors +9.2% +9.2% +11.5% +11.5% Sales by product category (% share in revenue) Q1’19 ( outer circle ) vs Q1’18 ( inner circle) y/y growth in PAX sold in Q1 2019 y/y growth in revenue in Q1 2019 13,5% Revenue (EURm) Number of PAX sold (ths) 1,3% 0,5% 41,1 15,0% 37,6 28,8 1,0% 25,8 0,8% 24,9 17,3 83,3% 84,7% Q1 2017 Q1 2018 Q1 2019 Q1 2017 Q1 2018 Q1 2019 Flight package tours Sightseeing tours by coach Due to increased competition, we expect lower growth rates or even flat Sightseeing tours by plane sales y/y in the entire year 2019. Other products 5
We grow in all our markets, but the growth is is decelerating In Q1 2019, the number of clients served by Novaturas We are #1 tour operator in the Baltics grew y/y in all our core markets: Lithuania (+1%), Latvia (+20%) and Estonia (+13%), as well as in Belarus (+26%). Number of PAX sold by country (ths) Headquartered in Lithu Lithuania nia 1.3m 17,5 17,3 2.0m 13,4 11,8 Lithuania, Lithu nia, 10,5 10,1 2.9m Latvia Latv ia 8,5 8,4 and nd Estonia tonia 9.5m are core markets 5,9 0,08 0,11 0,14 Be Belarus larus Capital cities is new, prospective Lithuania Latvia Estonia Other XX Country population (in million) market Q1 2017 Q1 2018 Q1 2019 6
Egypt remains the most popular destination in the winter season Flight package tours by destinations Novaturas tour destinations (% share in revenue) Leisure trips by plane Roundtrips by plane Roundtrips by bus 54,4% 48,3% 16,9% 15,7% 15,0% 12,9% 11,8% Our brands 10,8% 7,3% 6,9% Egypt Spain (incl. Skiiing Long haul Other Novaturas diversified product & destination portfolio allows Canary it to be well-positioned to withstand any changes in demand Islands) for various destinations and other consumer preferences. Q1 2018 Q1 2019 7
We reach wide customer base thanks to well-balanced distribution Novaturas uses various channels to sell its products on different Novaturas sales by distribution channels Q1 2019 (outer circle) vs. Q1 2018 (inner circle) markets, making its distribution more efficient while reaching wider customer base and using market opportunities, following 1,6% consumer preferences. 14,1% Travel agencies 1,6% 14,5% Own retail 12,8% 400+ 400+ 15.7% 5.7% 12,7% Web sales 71,2% GDS external travel agencies share in revenue in Q1 2019 71,5% from e-commerce E-commerce sales (EURm) 30,0 1.09 1.09 million million 26,7 25,0 20,0 21,1 unique visitors on Novaturas websites in Q1 2019 15,0 15,5 15,1 +8.7% y/y 10,0 10,9 5,0 5,9 4,5 0,0 Novaturas constantly develops its e-commerce channel and 2013 2014 2015 2016 2017 2018 Q1 2019 manages one of the biggest online shops in the Baltics * Revenues only including revenues from flight packages, roundtrips by plane and coach, sales of flight tickets and accommodation (without other products) 8
Novaturas Q1 2019 sales in line with charter flight business seasonality Novaturas operates in a sector which is subject to seasonality. It is characterized by higher demand for the Group’s products and services during the summer season, i.e. in the second and third quarters of the year, and lower demand in the remaining periods. Historically, the Group’s sales in Q1 corresponded to ca. 12%– 15% of the full-year revenue. Monthly revenue (EUR m) 25 20 15 9,8 9,7 9,3 10 5 0 Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec 2016 2017 2018 2019 9
Q1 2019 profitability affected by higher aviation costs In Q1 2019, the Group’s total operating expenses decreased by 0.9% y/y (while sales increased by 11.5%). Overheads without commissions (which depend on sales revenue) decreased by 9% y/y. Nevertheless, the Group’s profitability was still affected by higher costs related to the change of its main aviation partner (in Q4 2018, troubled carrier Small Planet Airlines was replaced by GetJet Airlines). Gross profit (EURm) EBITDA (EURm) Net profit (EURm) 5,0 1,2 1,5 4,8 1,0 4,0 1,3 0,9 0,8 1,0 3,6 3,0 0,6 2,9 0,4 2,0 0,5 0,2 1,0 0,1 0,0 0,3 0,1 -0,1 0,0 -0,2 0,0 Q1 2017 Q1 2018 Q1 2019 Q1 2017 Q1 2018 Q1 2019 Q1 2017 Q1 2018 Q1 2019 10 10
Efficiency and productivity ratios Higher aviation costs paid to GetJet Airlines for seats that were already sold before the change of the aviation partner decreased our sales profit by about EUR 4 EUR per PAX on average. Load factor Profit per PAX Average package tour price (%) (EUR) (EUR) 98,3 97,4 97,0 93 737 720 698 76 51 Q1 2017 Q1 2018 Q1 2019 Q1 2017 Q1 2018 Q1 2019 Q1 2017 Q1 2018 Q1 2019 11 11
Outlook for 2019 Novaturas early bookings for summer season +2.6% +2.6% (as of 31 March, by PAX, in ths) y/y growth in early bookings for 2019 summer season 106,8 104,1 71,8 Novaturas business is characterised by high share of early bookings in total programme, which makes future 45,1 revenues more predictable. As of 31 March 2019, the Group recorded a 2.6% increase (by PAX) in early bookings for the summer season compared to the same period of the previous year . 2016 2017 2018 2019 12 12
The Group’s strategy Retain leading position in the Baltics and benefit from Continue expansion of offering in order to retain the travel market growth existing clients and attract new ones, translating this into sales growth Deliver further geographic expansion – Belarus Maintain well-balanced distribution channels, with growing importance of e-commerce Secure further growth in operational scale combined Provide regular dividend payments with high profitability ratios and cash generation 13 13
Appendices
Novaturas shareholder structure Central European Tour Operator S.a.r.l. 1) 29,39% Ugnius Radvila 47,40% Rytis Šūmakaris Vidas Paliūnas 6,86% Others (free float) 6,86% 9,49% 1) Central European Tour Operator S.a.r.l. is an entity owned by Polish Enterprise Fund VI, managed by Enterprise Investors 15 15
Consolidated statements of comprehensive income EUR 000s Q1 2019 Q1 2018 y/y change 2018 Sales 182,032 28,806 25,845 11.5% Cost of sales (25,247) (21 044) 20.0% (155,753) Gross profit 3,559 4 801 -25.9% 26,279 Operating (expenses) (3,553) (3,584) -0.9% (18,648) Other operating income 14 1 Other operating (expenses) (2) (2) (2) 0.0% Profit from operations 7,643 5 1,215 -99.6% Finance income 820 110 244 -54.9% Finance (expenses) (277) (389) -28.8% (1,873) Profit before tax (162) 1 070 - 6,590 Income tax (expense) 14 (125) - (1,175) Net profit 5,415 (148) 945 - Other comprehensive income to be reclassified to profit or loss in subsequent periods Result of changes in cash flow hedge reserve (2,160) 1,126 126 793.7% Impact of income tax (169) (19) 789.5% 324 Total comprehensive income for the year 809 1 052 -23.1% 3,579 Earnings per share 1) (0.02) 0.12 0.69 1) The value of earnings per share (EPS) was re-calculated using the number of shares after the split conducted based on the general meeting resolution of 16 January 2018 16 16
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