The UKs leading online retailer of beach holidays H118 Results - PowerPoint PPT Presentation

The UKs leading online retailer of beach holidays H118 Results Presentation – May 2018

Agenda Paul Meehan  H118 Highlights and Market Dynamics CFO Paul Meehan  Financial Performance H118 CFO  Evolution of Key Drivers Simon Cooper  Summary and Outlook CEO  Q and A Cautionary statement This presentation may contain certain forward-looking statements with respect to the financial condition, results, operations and businesses of the Company. Forward looking statements are sometimes, but not always, identified by their use of a date in the future or such words as ‘anticipates’, ‘aims’, ‘due’, ‘will’, ‘could’, ‘may’, ‘should’, ‘expects’, ‘believes’, ‘intends’, ‘plans’, ‘targets’, ‘goal’ or ‘estimates’. These forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements, including factors outside the Company's control. The forward-looking statements reflect the knowledge and information available at the date of preparation of this presentation and will not be updated during the year. Nothing in this presentation should be construed as a profit forecast 2

H118 Highlights OTB continues to disrupt the retailing of beach holidays through innovative technology and value proposition  24% YOY increase in daily unique visitors to site with incremental investment to grow Sunshine share Structural Market  Flight supply constriction post Monarch collapse drove YOY increase in winter seat pricing Growth & Market Share Growth  Incremental capacity now available is alleviating seat constriction  Continued investment into IT function is increasing the pace of innovation Personalise Customer  16% increase YOY in logged in sessions to 5.8m sessions (H117: 5.0m) Proposition  61% of all visits to site on smartphone (H117: 53%)  19% increase in UK Revenue after marketing to £23.0m (H117: £19.4m) with increased offline spend Leverage £ Revenue YOY at end of period  Direct contracting averaged 68% of all hotel buying (H117: 66%) with 30% of hotels exclusive  Online marketing spend of 40.5% of revenue despite incremental investment in Sunshine.co.uk Drive Efficient Share  Offline investment supporting strengthening brand awareness Growth & Strengthen Brand  62% of traffic to site from brand and direct sources (H117: 57%)  15% growth in Adjusted Profit before tax to £14.0m (H117: £12.2m) Drive Operational  50% growth in H1 International Revenue with Denmark launching May 2018 Leverage & Expand Internationally  Board continuing to review options for value enhancing acquisition opportunities 3

H118 Market Dynamics The failure of Monarch airlines led to a supply / demand imbalance that has improved throughout H1 YOY booking growth and seat prices for Oct – March travel  Monarch failed on the 2/10/17 80.0%  As shown in the chart opposite, the lack of seats in the market for 70.0% winter departures led to a significant increase in the price for these 60.0% seats 50.0% ‒ Where incremental capacity was scheduled to replace the Monarch 40.0% collapse Monarch programme this was for departures post April 1 st 30.0% ‒ This effect was more profound where Monarch had a high 20.0% share of seats on a route 10.0% -  The impact of this in H1 18 is estimated as £1.1m Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar (10.0%) (20.0%)  Across the period that followed Monarch’s collapse incremental (30.0%) capacity was scheduled covering most of the seats that were lost Bookings YOY Seat price YOY % YOY seat prices for April – October travel  Seat price inflation for summer departures has been less noticeable 40.0% ‒ Seat prices for summer departures are approx. +10% YOY 30.0%  Hotel prices fairly flat YOY (modest inflationary increase) 20.0% 10.0% - (10.0%) (20.0%) Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 4

Profit and Loss Account – UK Segment H118 EBITDA growth +17% P&L UK Segment  UK growth year on year Six months ended 31 March (£m) H1 FY18 H1 FY17 Change %  Revenue +18% Revenue 44.4 37.5 18%  Revenue after marketing +19% Marketing costs excluding offline (18.0) (15.2)  EBITDA +17% Offline (3.4) (2.9)  Efficient increase in share of traffic with marketing Total Marketing (21.4) (18.1) - % of Revenue 48.2% 48.3% spend excluding off-line maintained at 40.5% - % of Revenue (excluding offline) 40.5% 40.5%  17.2% increase in Offline Marketing spend to further drive brand awareness. Incremental spend at end of Revenue after marketing costs 23.0 19.4 19% Variable costs (2.4) (2.0) H1 £0.5m expected to pay-back in H2 Overhead costs (3.6) (2.9)  Overhead % increase includes Sunshine EBITDA 17.0 14.5 17% - % of Revenue 38.3% 38.7%  EBITDA % revenue at 38.3% despite the acquisition of Sunshine.co.uk which was dilutive at 33% EBITDA % Daily unique visitors '000 34,100 27,500 24% pre-acquisition Variable cost % Revenue 5.3% 5.3% Overhead cost % Revenue 8.1% 7.7% Total costs % of Revenue 13.4% 13.0%

Profit and Loss Account – International H118 Revenue growth +50% - Investment continues in Sweden to build scale and brand  Revenue increased by 50% to £0.9m driven by P&L International Segment Six months ended 31 March (£m) H1 FY18 H1 FY17 Change % growth in both Sweden and Norway  OTB continues to invest both online and off-line to Revenue 0.9 0.6 50% grow market share Marketing costs excluding offline (1.5) (1.1)  Denmark launching May 2018 Offline (0.6) (0.4) Total Marketing (2.1) (1.5) Revenue after marketing costs (1.2) (0.9) Overhead costs (0.4) (0.1) EBITDA (1.6) (1.0)

Profit and Loss Account – Group Adjusted profit before tax +15% increase YOY P&L Total Six months ended 31 March (£m) H1 FY18 H1 FY17 Change %  Adjusted profit before tax increased by 15% to £14.0m EBITDA UK segment excluding share based payments 17.0 14.5 17%  Adjusted profit after tax increased by 15% to £11.1m EBITDA International segment (1.6) (1.0)  Adjusted EPS increased by 15% to 8.5p Group EBITDA excluding share based payments 15.4 13.5 14% Depreciation and amortisation (1.5) (1.2) EBIT excluding share based payments 13.9 12.3 13% Finance costs / Other Income 0.1 (0.1) Adjusted Profit Before Tax 14.0 12.2 15% Corporation Tax (2.8) (2.5) Adjusted Profit after Tax 11.2 9.7 15% Non-underlying costs (0.2) - Share Based payments (0.6) (0.2) Amortisation of acquired intangibles (2.2) (2.1) Deferred tax on amortisation of acquired intangibles 0.3 0.4 Retained Earnings 8.5 7.8 9% Earnings per Share Basic 6.5 6.0 8% Adjusted 8.6 7.5 15% Dividend per Share (pence) 1.1 0.9 22% Effective tax rate 20.0% 20.5%

Cash Flow Cash flow  Working capital movement relates to the seasonality H1 FY18 H1 FY17 of the business with c.50% of bookings travelling between June and August when Trust cash unwinds Opening Cash Balance Total 71.6 51.7 Opening Cash Balance Trust 38.5 25.6 Opening Cash Balance excluding Trust balance 33.0 26.1  YOY operating cash flow £(12.7)m due to an increase EBITDA excluding share based payments 15.4 13.5 in working capital requirements: Increase in working capital (28.7) (11.8)  Increase in bookings & low deposit funding Movement in Trust balance (19.9) (23.0) Purchase of plant and equipment (0.8) (0.4)  Trust timing differences due to Easter weekend Capitalised Development Expenditure (1.7) (1.3) Operating Cash Flow (35.7) (23.0) Operating cash/EBITDA (232%) (170%)  £3m deferred consideration re acquisition of Corporation tax (3.3) (2.5) Sunshine.co.uk paid in the period (£12m total) Non-underlying costs (0.3) - Acquisition of subsidiary (3.0) - Interest 0.1 - Dividends paid (2.5) (2.9) Net decrease in cash excluding trust account (44.7) (28.4) Closing Cash excluding Trust account (11.7) (2.3) Closing Trust account balance 58.4 48.6 Closing Cash balance Total 46.7 46.3

Balance sheet Balance Sheet  All customer monies are paid into a trust account H1 FY18 H1 FY17 which is effectively a debtor to the business  Seasonal cash flow requirements are covered by a Tangible Assets 2.0 0.9 Intangible Assets - IT development 4.4 3.6 revolving credit facility which is drawn down as Intangible Assets - Acquired Intangibles 34.8 37.7 required Intangible Assets - Goodwill 31.6 21.5  Net debt has increased from £2.3m to £11.7m Total Fixed Assets 72.8 63.7 Trade and other receivables 156.9 111.8 Trust Account 58.4 48.6 Cash - - Total Current Assets 215.3 160.4 Trade and other payables (164.4) (123.2) Corporation tax payable (1.7) (3.7) Derivative Financial Instruments (0.9) (1.0) Total current liabilities (167.0) (127.9) NET CURRENT ASSETS 48.3 32.5 Bank facility (11.7) (2.3) Deferred Taxation (6.1) (6.6) Net assets 103.3 87.3 Net Debt (11.7) (2.3) Net Trade Drs/Crs (7.5) (11.4)