69
22 AUGUST 2019
22 AUGUST 2019
2
3
Another record year
TTV
In line with amended guidance
PBT
Strong results in key overseas markets –
particularly Americas
GLOBALISATION
Continued out-performance in sector with strong growth potential
CORPORATE
Disappointing overall results
AUSTRALIAN LEISURE
FY19 RESULT OVERVIEW
4
RECORD TTV
Exceeded record FY18 result by almost $2b & achieved 23rd year of TTV growth in 24 years since listing
8.8% year-on-year growth (up 6.4% in constant currency) with fewer sales staff – further productivity gains
Organic growth predominantly with small contribution from businesses that were acquired during FY19
Average of $65m in TTV per day globally
$23.7bresult
5
ACHIEVING STRATEGIC OBJECTIVES: PRODUCTIVITY
$850,000
$900,000
$950,000
$1,000,000
$1,050,000
$1,100,000
$1,150,000
$1,200,000
FY15 FY16 FY17 FY18 FY19
19.9%productivity increase since FY15
TTV/Person (AUD)
6
PBT
Within amended guidance range ($335m-$360m) but below initial target
$29.8m impairment loss (Olympus) offset by $30.1m in non-recurring gains ($6.7m land over-ride revenue pull forward, $3.1m IFRS15 adjustment, $19.6m & $0.7m fair value gains (3Mundi and ETSC)
Underlying result adjusted to exclude impacts of non-recurring gains & losses
Actual PBT slightly higher at $343.5m (FY18: $364.3m)
$343.1munderlying PBT
7
GLOBALISATION
Profit & TTV weighted towards international businesses for the first time
Record TTV in all countries and regions, apart from Nordics
Reflects strong growth overseas and soft Australian leisure results
Record profit (AUD) in USA, Canada, UK, UAE, South Africa, Netherlands, NZ and China/Hong Kong
Americas now a $100m-per-year profit engine
International businesses driving growth
8
AMERICAS: NOW AN EARNINGS POWERHOUSE
0
20
40
60
80
100
120
FY16 FY17 FY18 FY19
$ m
illio
n A
UD
Underlying earnings in the Americas have increased almost 5-fold since FY16
PBT
9
CORPORATE
15.2% TTV growth globally to record $8.9b
Achieving scalable organic growth through Corporate Traveller (SME) & FCM (TMS) brands
Corporate brands generated 37.7% of group TTV
Investment in systems & products - Upside, Savi, Sam :] – to bolster world class offerings & create compelling customer offering
Expansion in key global markets - Germany (start-up), France, Switzerland (3Mundi acquisition), USA West Coast (Casto)
Significant presence across four key regions, delivering consistent growth & strong future prospects
Continuedout-performance
10
CORPORATE: GROWING & GAINING SCALE GLOBALLY
0
0.5
1
1.5
2
2.5
3
3.5
Australia/NewZealand
Americas EMEA Asia
Corporate TTV By Region ($AUb)
FY19 Corporate TTV ($AUb)
0123456789
10
Corporate TTV ($AUb)
Corporate TTV ($AUb)
11
RECORD ACCOUNT WINS
$1.3b+ globally for FCM alone during FY19 & circa $2b across corporate division
36%
33%
23%
8%
% of New FCM TTV Won by RegionAmericas EMEA Asia ANZ
12
AUSTRALIAN LEISURE CHALLENGES
Flat leisure TTV in subdued trading climate TTV bolstered by solid growth in new & emerging models & brands (traditional leisure TTV down circa 2%) Increased Flight Centre Brand same store sales but with smaller network following FY18 network consolidation Internal and external factors impacting both TTV and margin
External: Continued macro uncertainty leading to soft market growth Internal: Recent changes & enhancements – brand consolidation, EBA, GDS
Key business drivers:• TTV Growth• Revenue Margin• Costs
Revenue margin decrease in flagship Flight Centre brand (circa 50bps) Decrease driven by product mix changes (lower attachment) Stabilisation late in year, but below previous levels Key contributor to reduced FCB profits
Reasonable success in containing costs, despite additional $14m in EBA costs Modest overall growth – but exceeded revenue growth in challenging climate
13
INVESTMENT IN NEWER MODELS PAYING DIVIDENDS
Online Independent Contractor Network
Flash Sale / Ready-made Packages
Specialist Flight Centre Brand businesses
More than $2b in FY19 TTV
Circa $1.3b in TTV from online leisure brands
flightcentre.com.au growing at 40%+ since booking fees were removed and with minimal cannibalisation – market-share growth
Businesses in Australia, NZ, Canada, USA and South Africa
Circa $380m in TTV during FY19
Partnership with Ignite in Australia
TTV up 42% to $182m (FLT has 49% interest)
Flight Centre Business Travel, Groups, RTW, First & Business Class, Cruise
About $430million in TTV in Australia during FY19
14
PROFIT & LOSS TTV & Revenue
Record TTV across all geographic segments, largely driven by corporate brands
55bps revenue margin decline brought about largely by ongoing business mix changes, as well as impact of revenue margin decline in FCB Australia
Costs
Underlying cost growth in constant currency held to 3% (excluding touring cost of sales) with full-year trends consistent with H1 and leading to a 32bps reduction in cost margin
EBA in Australia contributed $14m to employee benefits cost increase, along with the strong results in the Americas
Marketing and rent expense have been held flat
Increase in other expenses due to increased independent agent consulting fees as the independent agent network expands, ongoing tech investment and increased outsourcing costs
Difference between statutory PBT of $343.4m and underlying PBT of $343.1m due to Olympus impairment ($29.8m); AASB15 transition adjustment ($3.1m); and revenue alignment in global product businesses ($6.6m) as reported at the half-year, along with $20.3m fair value gain on change in control of 3Mundi and ETSC.
AUD $'m FY19 FY18 Mvmt %Group TTV 23,728 21,818 8.8%
Operating revenue 3,055 2,923 4.5%Total revenue 3,055 2,923 4.5%
FV gain on change in control 20 - 100.0%Other income 35 30 14.8%Share of JV/Associates 1 2 (48.8%)
Employee benefits (1,592) (1,511) 5.4%Marketing expense (194) (197) (1.3%)Rent expense (166) (168) (1.4%)Tour & hotel operations (157) (128) 23.0%D&A (82) (78) 5.9%Finance costs (26) (26) 0.3%Impairment (30) - 100.0%Other expenses (522) (485) 7.6%PBT 343 364 (5.7%)
Underlying PBT 343 385 (10.8%)
EPS (cents) 261.6 261.1 0.2%Sales teams 2,832 2,882 (1.7%)
MarginsUnderlying Revenue Margin 12.84% 13.39% (55 bps)Underlying Cost Margin -10.88% -11.19% 32 bpsUnderlying PBT Margin 1.45% 1.76% (32 bps)Marketing % TTV 0.82% 0.90% (8 bps)
15
SUCCESSFULLY SLOWING COST GROWTH
0
2
4
6
8
10
12
14
FY14 FY15 FY16 FY17 FY18 FY19
Underlying Cost Growth(% in constant currency)
16
BALANCE SHEETAUD $'m As at June 19 As at June 18 Mvmt %Cash & cash equivalents 1,172 1,273 (8%)Financial assets 115 204 (43%)Trade & other receivables 559 525 7%Contract assets 356 323 10%Other current assets 105 121 (13%)Current assets 2,308 2,446 (6%)
PPE 240 248 (3%)Intangibles 769 586 31%Other non-current assets 177 120 48%Non-current assets 1,186 953 24%
Total assets 3,493 3,399 3%
Trade payables & other liabilities 1,547 1,541 0%Deferred revenue 69 75 (8%)Borrowings 85 35 143%Provisions 55 49 13%Current liabilities 1,755 1,699 3%
Trade payables & other liabilities 79 88 (10%)Deferred revenue 48 56 (13%)Borrowings 100 1 15295%Provisions 48 41 18%Non-current liabilities 276 186 49%
Total liabilities 2,031 1,884 8%
Net assets 1,462 1,515 -3%
General cash 337 445 -24%General investments 16 108 (85%)Client cash 836 828 1%Client investments 100 96 4%Total cash & investments 1,288 1,477 -13%
Positive net debt 167 517 -68%
Assets
Reduction in cash balance represents timing of wage payments throughout the year and the payment of special dividend ($150m)
Investments in short-term financial assets will increase and decrease depending on working capital requirements
Intangibles increase linked to acquisitions of 3Mundi, Casto and Umapped, as well as ongoing investment in IT projects
Movement in Other Non-Current Assets represents investment in Upside ($56m)
Liabilities
Trade payables remain flat year-on-year due to the timing of supplier payments
Increase in Borrowings relates to debt facilities obtained to fund acquisitions
17
CASH FLOW STATEMENTAUD $'m FY19 FY18 Mvmt %Operating activitiesOperating activities before interest and tax 371 404 (8%)Net interest and tax paid (92) (90) 3%Cash inflow from operating activities 279 314 (11%)
Investing activitiesAcquisitions (211) (61) 245%Purchases of PPE and intangibles (101) (87) 16%Net proceeds from sale of financial assets 93 (1) (8359%)Other investing cash flows 1 3 (72%)Cash flow from investing activities (218) (146) 49%
Financing activitiesFinancing activities before dividends 145 (31) (574%)Dividends paid (320) (156) 105%Cash flow from financing activities (175) (186) (6%)
Increase/(decrease) in cash held (114) (18) 525%
FX impact 14 10 42%
Cash and cash equivalents 1,172 1,273 (8%)
As at June 19
As at June 18
General cash (excl. Investments) 337 445 (24%)Client cash 836 828 1%Total cash 1,172 1,273 (8%)
Cash flow from operating activities down on prior year due to additional wage payments (EBA in Australia and move to weekly pays for Australian retail consultants), as well as timing of general supplier payments
$211m outflow for acquisitions includes 3Mundi, Umapped and Casto; along with payments for the remaining share of Buffalo, Backroads, Topdeck, Travel Tours, Executive Travel and the 25% investment in Upside
Financing activities represent the draw-down on debt facilities taken to fund acquisitions following FY19 balance sheet review & special dividend payment
18
RECORD DIVIDENDS
$3.07per share in fully
franked dividends returned to shareholders
0.98
0.601.49
$310.2millionin funds returned to shareholders
$ per share final dividend (declared today)
$ per share interim dividend (declared Feb 19)
$ per share special dividend (declared Feb 2019)
19
76%
24%
ANZ by Pillar - TTVLeisure & Online Corporate
AUD $'m FY19 FY18 Mvmt %TTV 12,506 12,319 2%
External Revenue 1,568 1,607 (2%)
Other Income 2 6 (57%)
Costs (1,390) (1,367) 2%
PBT 181 246 (27%)
PBT (underlying)1 179 254 (30%)
Sales staff 8,157 8,162 (0%)
Sales teams 1,682 1,694 (1%)
TTV / total staff ($'000) 1,258 1,244 1%
Margins
Revenue Margin 12.54% 13.05% (51 bps)
Cost Margin (11.12%) (11.09%) (2 bps)
PBT Margin 1.44% 2.00% (56 bps)
SEGMENT RESULTS: AUSTRALIA-NEW ZEALAND (ANZ)
89%
11%
ANZ by Nation - TTVAustralia New Zealand
20
TRADING OVERVIEW: ANZ
Small increase in TTV to record $12.5b but offset by decline in revenue margin
Signs of stabilisation in the Australian leisure revenue margin late in FY19, but in softening macro conditions which are slowing TTV growth
Cost control has been effective with cost margin flat with only small TTV growth and additional costs from EBA and ongoing technology spend
Corporate business in Australia performing well at top and bottom line despite collapse of major client ($2m impact during 1H)
Record profit contribution in New Zealand driven by strong leisure results
21
54%46%
Americas by Pillar - TTVCorporate Leisure & Online
AUD $'m FY19 FY18 Mvmt %TTV 5,537 4,755 16%
External Revenue 650 566 15%
Share of Associate (1) (2) (53%)
Costs (546) (493) 11%
PBT 102 71 44%
Sales staff 2,629 2,592 1%
Sales teams 461 461 -
TTV / total staff ($'000) 1,570 1,393 13%
Margins
Revenue Margin 11.74% 11.91% (17 bps)
Cost Margin (9.87%) (10.36%) 50 bps
PBT Margin 1.85% 1.50% 35 bps
64%
28%
7%1%
Americas by Nation - TTVUnited States Canada
Student Universe LATAM
SEGMENT RESULTS: AMERICAS
22
TRADING OVERVIEW: AMERICAS
Americas profit contribution in excess of $100m AUD for the first time
TTV up 16% to circa $5.5b (23% of group total)
Growth predominantly driven by corporate brands – $3b in corporate TTV
Americas corporate business now FLT’s largest –strong future growth potential given success & relatively small market-share
Strong West Coast corporate footprint –acquisition of Silicon Valley based Casto Travel
Economies of scale now being seen, as evidenced by improvement in both productivity (TTV/total staff) and cost margin
Highest profit contribution from Liberty since acquisition (2008)
Expansion in premium model in USA – 11 Travel Associates shops now trading (includes 3 rebranded Liberty shops)
IC model in place and referral model being trialled with positive results
Canada continuing to perform well, particularly corporate and Laurier du Vallon
23
0
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
700,000,000
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
STRONG & SUSTAINABLE TRAJECTORY IN US SME SECTOR
Corporate Traveller USA TTV ($US)
TTV ($US)
24
SEGMENT RESULTS: EMEA
67%
19%
10%4%
EMEA by Nation - TTVUnited Kingdom South Africa Europe UAE
57%
43%
EMEA by Pillar - TTVCorporate Leisure & Online
AUD $'m FY19 FY18 Mvmt %TTV 3,412 3,097 10%
External Revenue 441 420 5%
Other Income 20 100%
Share of Associate 2 1 100%
Costs (355) (342) 4%
PBT 108 80 34%
PBT (underlying)1 87 80 9%
Sales staff 2,233 2,393 (7%)
Sales teams 485 486 (0%)
TTV / total staff ($'000) 1,160 969 20%
Margins
Revenue Margin 12.91% 13.58% (67 bps)
Cost Margin (10.42%) (11.03%) 61 bps
PBT Margin 3.15% 2.59% 56 bps
25
TRADING OVERVIEW: EMEA
10% TTV growth to $3.4b – circa 14% of group TTV
UK business has responded well to Brexit with TTV increasing 4% and costs held flat, although uncertainty remains
Investment in Germany start-up and 30 June acquisition of remaining 75% share in 3Mundi (France & Switzerland) adding to the existing European footprint
Significant improvements in both productivity and cost margin
Strong TTV contribution from both corporate and leisure businesses in South Africa and overall costs held below inflation
UAE business continuing solid growth in the corporate market
Difference between statutory PBT and underlying PBT due to fair value gain on acquisition of remaining 75% of 3Mundi
26
SEGMENT RESULTS: ASIAAUD $'m FY19 FY18 Mvmt %TTV 1,946 1,386 40%
External Revenue 99 94 5%
Costs (87) (89) (2%)
PBT 12 5 124%
Sales staff 1,327 1,475 (10%)
Sales teams 194 194 -
TTV / total staff ($'000) 1,056 673 57%
Margins
Revenue Margin 5.08% 6.80% (173 bps)
Cost Margin (4.48%) (6.43%) 195 bps
PBT Margin 0.60% 0.37% 22 bps 68%
16%
16%
Asia by Nation - TTVIndia Greater China SE Asia
52%
5%
43%
Asia by Pillar - TTVCorporate Leisure & Online Other/Support & Wholesale
27
TRADING OVERVIEW: ASIA
Fundamentals remained strong in FY19, leading to profit growth for the second year (a record $12m PBT)
TTV growth of 40% being driven across all countries
TTV across the region poised to top $2b during FY20
Revenue margin decline due to leisure rationalisation in FY18 and growth of low-margin businesses – FCM and Indian FX
Reduction in revenue margin more than offset by reduced cost margin
Indian TTV topped $1b for the first time with FX, SME and packaged holidays all growing rapidly
28
SEGMENT RESULTS: OTHERAUD $'m FY19 FY18 Mvmt %TTV 327 261 25%
External Revenue 298 235 27%
Other Income 4 (1) (497%)
Share of JV 3 (96%)
Costs (360) (276) 31%
PBT (59) (39) 52%
PBT (underlying)1 (37) (26) 41%
Margins
Revenue Margin 91% 90% 116 bps
Cost Margin (110%) (106%) (457 bps)
PBT Margin (18%) (15%) (312 bps)
Segment result includes FLT’s Global areas, along with The Travel Group (TTG) businesses (formerly Travel Experience Network)
Difference between statutory PBT and underlying PBT represents Olympus impairment offset by product revenue recognition change and AASB15 transition change
Primary drivers of the underlying PBT movement include an increase in global technology and digital spend, investments in Upside development costs, increased M&A costs, reduced DMC profitability and an increase in net interest expense (special dividend paid & new debt facilities taken on)
29
30
OUR VISION
31
CORE VALUES
EGALITARIANISMIn our company, we believe that each
individual should have equal privileges and rights. In all our countries and all
our businesses there should be no ‘them and us’.
OWNERSHIPWe take full responsibility for our business and
treat it as our own. Our people have the opportunity to share in our company’s success through outcome-based incentives and profit
share.
IRREVERENCEWe take our business seriously but not ourselves. We respect
our customers, our partners and each other.
32
OUR 2025 VISION
In 2025 FCTG will be a thriving global travel company with a distinctive, entrepreneurial
culture, famous brands and winning models. We will amaze our customers across three core
segments – corporate, leisure and at destination.
33
The elements of our vision –shared across all divisions
ENTREPRENEURIAL CULTURE
Our distinctive culture of ownership, accountability
and egalitarianism define us and is our
biggest asset.
FAMOUS BRANDSWe obsess about having brands that reflect their DNA, are visually distinctive, well known, relevant, trusted and customer obsessed.
WINNING MODELS
Models that are: Growing, Productive, Material and
replicable.
34
COMPANY & TRANSFORMATION GOALS (FY22)
77% compounding annual
TTV growth
10An underlying* cost margin
of less than 10%
2Return to a 2%
net profit margin
* Excludes touring cost of sales
35
TRANSFORMATION PHASES
YEAR 1
YEAR 2-3
YEAR 4-5
FocusClean up our brands and
our businesses
InvestBusiness engineering across
our three core divisions
DominateMarket leading business
models and brands
36
LEISURE DIVISION – THREE PILLARS, TWO PATHSMASS PREMIUM
AUNZ
RSA
UKUSACANASIA
● Market leader and Specialist ● Growth in new models● Vertical expansion● Digitisation
● Specialist ● Unmanaged small business FCBT● Vertical specialist● Digitisation
YOUTH
37
LEISURE STRATEGIES
Customer systems & centricity01
Digitisation (online/offline)02
Product and pricing03
Famous brands & modern marketing04
Network05
Model shift06
38
Customer systems & centricity01
Digitisation (online/offline)02
• Reviews & NPS• Reward systems• Remuneration models• Lead management systems – RedConnect
• Websites & Native apps• Consultant & customer collaboration tools eg. Trips (Umapped acquisition)• Payments & easy to buy from
LEISURE STRATEGY
39
Product & Pricing03
Branding & Marketing04
• Product design – House of irresistible deals• FC Exclusives & Flash Sale• Full content – forefront of NDC• Service products – Price Drop Protection, Captain’s Packages• Channel pricing
• Membership & loyalty• Brand DNA workshops• Advertising uplift• Universal Traveller (was Student Flights)• StudentUniverse Australian launch
LEISURE STRATEGY
FCB Product Journey
3 Tiered Pricing and Product Approach
40
Network05
Model shift06
• Ongoing evolution of shop models → hyper/flagship/community/satellite• Relocations and optimal positioning• Staffing & mix of staffing• Legacy cost base reduction
• Accelerated growth of emerging, winning models• Independent agent/ home based• Host → referral model• Social entrepreneur• Global premium leisure networks• Online
LEISURE STRATEGY
Perth Hyperstore
Now Open for Business
41
FLIGHT CENTRE BRAND: CHANGING SALES MIX
0
10
20
30
40
50
60
70
Contact Centre &Online
Community Store Flagships &Hyperstores
SpecialistBusinesses
Community shops continue to generate the majority of FCB’s sales but TTV is migrating towards emerging/winning channels & models
% of FY17 TTV
Targeted % of FY20 TTV
42
Marketing
Data
Product
Engineering
GROWTH
Membership Product & Pricing
Self Service
Sales Tech
Modern Marketing
Our consultants, sites and apps
recognise our users. We deliver personal services. It allows us to offer closed user group rates.
We have RRP and a clear strategy pricing by channel, user, product, etc.
Pricing is centralised and
data-driven
We offer numerous post-booking self
service capabilities: Change, cancel,
interruption messages, etc.
Invest in improved tech and processes for sales operations, lead generation and lead management
Move to a healthier mix of advertising
and efforts targeted at our existing
customer base. Mine our customer
base with tech.
FC 2.0 PROGRAM – STRATEGIC ROAD MAP
43
CORPORATE STRATEGY – OUR BRANDSBRANDS PROFILE
• 7 equity countries (Australia, New Zealand, USA, Canada, UK, South Africa, India)
• 3 regions (APAC, EMEA, Americas)• 21 equity countries• 75+ partner countries
• 6 countries/regions for cievents(Australia, New Zealand, UK, USA, Canada, Asia)
• 3 countries for Stage and Screen (Australia, New Zealand, USA)
SME
TMS
NICHE
44
BUSINESS STRATEGY STATEMENTS
To grow our SME travel business … in markets where the FCTG culture will thrive. We will blend our simple personalised service with the design and control of our digital platform, to provide our people, customers and suppliers a unique experience and access to all content.
To grow FCM to be the number one global alternative to the mega TMCs by 2025… FCM offers globally consistent services focussing on mid to large market customers. We design and control the customer experience by blending our people and technology. We offer the widest choice of content and services. Our people are empowered to always find a way.
45
CORPORATE STRATEGIES
FOCUS AREAS
PRIMARY SECONDARY
Hyper investment in sales and marketing01
Investment in technology02
Our people03
A continued focus on cost reduction and efficiency gains04
The continued development of market leading and unique products
05
Further geographic expansion06
46
01 HYPER INVESTMENT IN SALES AND MARKETINGRecord year in new business wins with $2b plus in new customer wins across
our corporate travel brands/businesses
Increased investment in business development managers, with 500 plus BDMs world wide
Brand review underway for FCM Travel to better differentiate from the other TMCs and better represent its customer value proposition and DNA
Supported by strong client retention (98% MNC retention in FCM in FY19)
47
Record year of tech investment
Investment and/or acquisition in SAM :], Claire, and Upside
Corporate technology priorities
02 INVESTMENT IN TECHNOLOGY
• SME digital platform and on-line booking tool powered by Upside technology in Northern Hemisphere and Serko technology in ANZ
• Deployment of globally consistent automation and quality control suite of products
• Enhanced customer data and reporting solution
• Deployment of salesforce CRM platform to front line FCM travel consultants
• Development of new customer portal and digital platform for FCM Travel
• Accommodation platform
48
03 OUR PEOPLE
A core part of our offering and customer value proposition
Proactively blended with systems and technology
49
SECONDARY STRATEGIES
A continued focus on cost reduction and efficiency gains04
The continued development of market leading and unique products05
Further geographic expansion06
50
THE TRAVEL GROUP (TTG) STRUCTURE
51
TTG – OUR BRANDSBRANDS PROFILE KEY FOCUS AREAS
Global Bedbanks / Travelbank
● Small group touring● Youth of tomorrow focussed
● Back-Roads Touring market is the 55+ ● Topdeck targets 18 – 30s
Global Hotels
● Global B2B boutique brand ● Curated / specialised geographic product range
● Full range of product - hotels● Service / customer orientated focus
Global DMC
● Cross – 5 Star luxury brand● Lumen – 3.5 - 4 star brand ● Away – 3.5 – 4.4 star resort brand
● Cross: Luxury, experience seeker● Lumen: Reflag hotels● Away: Value sun seekers
Global Touring
● Global B2B experiences brand● Transfers, in country experiences● On ground support
● The brand behind our partner’s brands● Target the B2B tour & FIT operators● Value extension via in-destination sales
52
TTGSTRATEGIES
One business DMC strategy – brand, platform, standard operating procedures01
New branding for hotels02
Global platform for distribution businesses03
The Travel Junction – external sales via a Travel Bank04
Topdeck repositioning, product development & sales05
53
TTG STRATEGIESOne Global DMC01
Hotels02
• New Discova brand launched early in FY20• New platform implementation underway for enhanced distribution capability & efficiency • One business with one set of SOPs from 2 disparate businesses (Olympus & Buffalo)• Expansion – geographic & B2B sales model
• New brand architecture – Cross Hotels & Resorts• Ongoing prudent expansion within region• Model expansion
54
TTG STRATEGIESCopernicus and Helio03
The Travel Junction04
• New platform pilot in UK in Dec 2019 to commence global roll-out• Delivering next generation procurement & enhanced distribution capability• Aggregated and curated content for faster quoting and sales delivery for travel consultants• Enhanced product and packaging capability
• External sales to industry (B2B)• Differentiated model to existing bedbanks• Build model to then grow
55
Global Touring – Topdeck and Back-Roads Touring
TTG STRATEGIES05
• The world’s leading socially inclusive youth brand with social experiences for 18-30s• Small group touring expansion and growth• Global GSA sales strategy to develop new markets and grow channels• Back-Roads expansion to USA (Blue-Roads)
56
GLOBAL TECHNOLOGY TRANSFORMATION PROGRAM (IT & DIGITAL)
Total visibility into all current projects, spends & outcomes01A rationalised roadmap in line with business priorities02Identification of further required investment to match future strategy03Implement a new, revised IT organisation & processes04M&A strategy for technology & digital capability if required05
Working with US-based travel tech consultancy Hudson Crossing
Company-wide 5-phase IT review to deliver meaningful change
PROGRAM OBJECTIVES
57
GLOBAL COST AND EFFICIENCY PROGRAM
Outsourcing
• Process roles
• Ticketing
Head Office Real Estate Efficiency
• Optimising space utilisation
• Sub-leasing excess real estate
Support Costs
• Continuing focus on all support costs
• Head count freeze
Robotics & Automation
• Finance processes
• Some call centre functions
• Booking admin
• Ticketing
58
59
Detailed targets to be released at AGM (Nov)
Some ongoing uncertainty in key markets – Brexit in UK, soft market growth in Australia, Hong Kong unrest, US-China trade war
In line with normal practice & will allow FLT to monitor Q1 trading conditions & results
Longer term TTV growth target in place (7%+)
FY20 OUTLOOK
60
Corporate and international businesses
FY20 GROWTH DRIVERS:GLOBALISATION & DIVERSITY
Again likely to be key contributors to group results
Solid growth trajectory & relatively small share of large markets
Strong & consistent growth in Americas with significant future potential
Expanding EMEA footprint
Asia now contributing meaningfully to overall results
61
Expecting stabilisation
FY20 GROWTH DRIVERS:AUSTRALIA
Strategies in place to address issues that impacted FY19 performance
Ongoing focus on costs & sales discipline in FCB and Universal Traveller
Margins stabilising, but some ongoing macro uncertainty
Network planning
Targeting higher growth channels & businesses to drive TTV – online, specialist, FCBT, flagships & hyperstores
62
NETWORK JOURNEYOUR APPROACH
NETWORK PLAN
Relocation Opportunities
New Growth Opportunities (Right Brand, Right Location)
Model Pivots - (Satellite, Franchise Lite, Rebrand)
Closure
Market Review & Growth /
Performance Benchmarking
Consultant Performance
& Optimal Staffing Smarts
Customer Demographics & Buying Patterns (Specialisation)
63
Expected outcomes
FY20:NETWORK REVIEW ALMOST COMPLETE
Right shops in right locations with appropriate staffing levels
About 30 Flight Centre shops likely to close (8-step filter process in place)
About 30 FCB shops to be rebranded to Travel Associates or Universal TravellerAbout 200 new roles to be created to take sales force to optimum levels (circa 5200 people)30-40 leisure shops to be relocated to better sites (mainly FCB)Closures partially offset by 20 openings – specialist, Flight Centre Business Travel, flagships
64
FY20:RECENT DEVELOPMENTS
LEISURE
• More aggressive push into Aussie youth sector with StudentUniverse and Universal Traveller launched
• Satellite model now in place in Australia & NZ
• New hyperstores opened in WA and Victoria
CORPORATE
• Further global network development –ownership interest increased to 100% in both LDV (Canada)
• Upside technology integration underway
TEN / TTG
• New global brands created in DMC (Discova) and hotels sectors
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QUESTIONS?
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FIVE YEAR RESULT SUMMARYJune 2019
June2018
June2017
June2016
June2015
TTV $23,728m $21,818m $20,109m $19,305m $17,598mIncome margin 12.9% 13.4% 13.8% 13.7% 13.6%EBITDA $427.3m $442.2m $402.1m $413.9m $417.0mPBT $343.5m $364.3m $325.4m $345.0m $366.3mPBT (underlying) $343.1m $384.7m $329.5m $352.4m $366.3mNPAT $264.2m $264.8m $230.8m $244.6m $256.6m
EPS 261.6c 261.1c 228.5c 242.4c 254.7cDPS 158.0c 167.0c 139.0c 152.0c 152.0cROE 18.1% 17.0% 16.2% 18.2% 20.2%
Capex $101.0m $87.3m $104.1m $121.0m $82.9mSelling staff 14,346 14,622 15,118 14,760 14,433
General cash $336.5m $444.5m $425.9m $506.7m $564.7mClient cash $835.7m $828.5m $855.8m $809.3m $813.3mCash and cash equivalents $1,172.3m $1,273.0m $1,281.6m $1,316.0m $1,378.0mFinancial Asset Investments $115.4m $204.1m $200.0m $204.5m $75.7mCash and investments $1,287.7m $1,477.1m $1,481.6m $1,520.5m $1,453.7m
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OVERSEAS BUSINESSES DRIVING TTV GROWTH Americas
42%
Asia 29%
EMEA16%
ANZ9%
Other4%
91% of FLT’s FY19 TTV growth came from outside ANZ
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RESULTS BY COUNTRY / REGION
1 Results include joint ventures and associates. 2 Results include the Student Universe business.3 AUD EBIT is underlying statutory EBIT.
TTV: $67m, up 7% in AUD(up 3% in lc)AUD EBIT: $1.1m lossBUSINESSES: 4
LATIN AMERICA1
TTV: $1.6b, up 8% in AUD (up 4% in lc)AUD EBIT: $24.0mBUSINESSES: 195
CANADA
TTV: $3.9b, up 21% in AUD (up 11% in lc)AUD EBIT: $75.7mBUSINESSES: 233
USA2
TTV: $2.3b, up 8% in AUD (up 4% in lc)AUD EBIT: $56.7mBUSINESSES: 259
UK
TTV: $148m, up 23% in AUD (up 14% in lc)AUD EBIT: $6.1mBUSINESSES: 7
UAE
TTV: $659m, up 8% in AUD (up 10% in lc)AUD EBIT: $16.5mBUSINESSES: 190
SOUTH AFRICA
TTV: $340m, up 24% in AUD AUD EBIT: $2.1mBUSINESSES: 22
REST OF EUROPE1
TTV: $11.2b, up 1%AUD EBIT: $173.1mBUSINESSES: 1,443
AUSTRALIA1
TTV: $317m, up 4% in AUD AUD EBIT: $5.3mBUSINESSES: 39
GREATER CHINA
TTV: $1.3bm, up 64% in AUD (up 64% in lc)AUD EBIT: $4.3mBUSINESSES: 164
INDIA
TTV: $308m, up 14% in AUD AUD EBIT: $4.7mBUSINESSES: 21
SOUTH EAST ASIA
TTV: $1.4b, up 8% in AUD (up 6% in lc)AUD EBIT: $22.3mBUSINESSES: 188
NEW ZEALAND
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Seven strategic acquisitions completed to:
Strengthen FLT’s global corporate travel footprint and capabilities
Enhance the customer offering
Deliver new revenue streams
OTHER FY19 HIGHLIGHTS:M&A
LEISURE
Umapped
CORPORATE
Sam :] (ETSC)ClaireCastoUpside3Mundi
TEN / TTG
Camakila(hotel lease)
