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