MakeMyTrip Limited
(NASDAQ: MMYT) Investor Presentation February 2018
MakeMyTrip Limited (NASDAQ: MMYT) Investor Presentation February - - PowerPoint PPT Presentation
MakeMyTrip Limited (NASDAQ: MMYT) Investor Presentation February 2018 Safe Harbor Certain statements contained in this presentation are forward - looking statements within the meaning of the safe harbor provisions of t he U.S. Private
MakeMyTrip Limited
(NASDAQ: MMYT) Investor Presentation February 2018
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Safe Harbor
Certain statements contained in this presentation are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements reflect our current expectations or forecasts of future events and our future performance and do not relate directly to historical or current events or our historical or current performance and are subject to risks and uncertainties, some of which are outside of our control, that could cause actual outcomes and results to differ materially from historical results or current expectations. Most of these statements contain words that identify them as forward looking, such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, “seek”, “will”, “may”, “should”, “opportunity”, “target” or other words that relate to future events, as
slowdown of economic growth in India and the global economic downturn, general declines or disruptions in the travel industry, the inability to successfully integrate the businesses of MMYT and ibibo Group within the anticipated timeframe or at all, the risk that the acquisition will disrupt current plans and operations, increase in operating costs and potential difficulties in customer or supplier loss and employee retention as a result
revenue and cost synergy benefits within the anticipated timeframe or at all, volatility in the trading price of MMYT’s shares, MMYT’s reliance on its relationships with travel suppliers and strategic alliances, failure to further increase MMYT’s brand recognition to obtain new business partners and consumers, failure to compete against new and existing competitors, failure to successfully manage current growth and potential future growth, risks associated with any strategic investments or acquisitions, seasonality in the travel industry in India and overseas, failure to successfully develop MMYT’s corporate travel business, damage to or failure of MMYT’s infrastructure and technology, loss of services of MMYT’s key executives, and inflation in India and in other countries. In addition to the foregoing factors, a description of certain other risks and uncertainties which may cause actual results to differ materially can be found in the “Risk Factors” section of MMYT's 20-F dated July 18, 2017 and MMYT’s 6-K dated November 22, 2016, each filed with the U.S. Securities Exchange Commission (“SEC”), copies of which are available from the SEC, our website or our Investor Relations department. We cannot assure you that the assumptions made in preparing any of the forward-looking statements will prove accurate or that any projections will be realized. We expect that there will be differences between projected and actual results. These forward-looking statements speak only as of the date of this presentation, and we do not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements. All forward-looking statements attributable to us are expressly qualified in their entirety by the cautionary statements contained herein and in our future annual and quarterly reports as filed with the SEC.
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Non-IFRS Metrics & Note on Unaudited Financials
The following non-IFRS metrics will be used in this presentation:
Gross Bookings represents total amount paid by our customers for travel services and products booked through us, including
taxes, fees, and other charges, and are net of cancellation and refunds, but does not include other revenues that are generated from 3rd party advertisement on our website, commissions and fees earned from the sale of railway and bus operators and fees earned by facilitating travel insurance policies to customers.
Net Revenues represents Revenues less Service Costs (costs of procuring the relevant services for sale to customers, including
procurement costs paid to hotel and package suppliers for the acquisition of hotel rooms, sightseeing costs, local transport costs and on occasion the cost of air tickets when the company pre-purchases air ticket inventory in order to enjoy special negotiated rates and revenues)
Net Revenue Margins is defined as Net Revenues as a percentage of Gross Bookings, and represents commissions, fees,
incentive payments and other amounts earned in our business. We follow net revenue margin trends closely across our various lines of business to gain insight into the profitability of our various businesses.
Flight Segment is defined as a flight between two cities, whether or not such flight is part of a larger or longer itinerary. Room Nights, also referred to as a “hotel-room nights,” is the total number of hotel rooms occupied by a customer or group,
multiplied by the number of nights that such customer or group occupies those rooms.
Constant Currency refers to our financial results assuming constant foreign exchange rates for the current fiscal period based on
the reporting for the historical average rate used in the prior year’s comparable fiscal period.
Fiscal Year End – March 31st
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Key Investment Highlights Leading Online Travel Agency with Multiple Well Recognized Brands Hotels & Packages Business Contributing to Over Half of Net Revenues Strong & Experienced Management Team Driving High Growth in Underpenetrated Hotels Segment with Improving Spend Efficiency
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Leveraging a Fast Growing Smartphone Internet Ecosystem Large Total Market Share in Transportation Ticketing & Hotel Bookings
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224 663 416 650 US China India India
Fastest Growing Large Economy1
Source: 1IMF World Economic Outlook, Real GDP Growth 2CIA World Factbook 2017 estimates; *Internet Live Stats Dec 2017, IAMAI estimates for India Internet users in 2017, KPMG April 2017 analysis “Indian Languages Defining India’s Internet”
46% 32% 30% 49% 52% 59% 6% 16% 11% Age 0–24 Age 25–64 Age 65+
Largest Young Population (2017)2 2nd Largest Base of Active Smartphone Users
312 772 481 735 US China India India 96% 55% 36% 52% US China India India 2020E 2017 2020E 2017 2020E 2017
Growth Driven by Low Internet Penetration 2nd Largest Base
Attractive Macro Growth Drivers
2018 2019 7.4% 7.8% 6.6% 6.4% 2.7% 2.5%
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23.0 24.6 25.1 27.2 27.3 28.9 28.8 32.2 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0
JFM 2016 AMJ 2016 JAS 2016 OND 2016 JFM 2017 AMJ 2017 JAS 2017 OND 2017 Millions of Domestic Passengers Flown
Source: DGCA.nic.in
YoY Growth % 24% 21% 24% 23% 19% 18% 15% 18%
Large Domestic Travel Market with High Growth & Underpenetrated Segments
Robust domestic air passenger growth High growth driven by pent up demand & affordable airfares UDAN program to increase regional air connectivity via subsidies & fare caps Round 2 of route allocations completed
Online Flight Ticketing Online Hotel Booking
Low penetration of hotels booked online Currently 15% going to 30% by 2020 (BCG-Google) Currently offering 50,000 properties across India across 3 platforms Operating sub brands to address budget accommodation market needs Shifting booking behavior online by addressing customer concerns
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Source: Company data as disclosed on Q3 FY2018 Earnings Call & SEC Form 6K Filed on February 8 2018
Million Total Unique Visitors
Million Cumulative App Downloads
Million Monthly Shopper Visits
Million Transacted Customers
Million Monthly Active Mobile Users
Comprehensive Product Offerings | Expanded Customer Reach | Cross Selling Opportunities
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Superior Brand Awareness
51 13 11 6 3
25 50
46 14 8 11 10
25 50 MakeMyTrip Competitors Source: November 2017 Millard Brown Study commissioned by Company
Top of Mind Awareness Consideration Top Box Score
Goibibo
YT
CT Other
India Online Travel Industry Brand Recall
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Premium Hotels
(5 & 4 stars) Positioning MakeMyTrip as premium brand Leveraging new loyalty programs to drive retention Targeting high spending & repeat customers Delivering superior end-to-end user experience
Mid Tier Hotels
(3 & 2 stars) Expanding selection & choice Enhancing service guarantee to users Offering accredited hotels to deliver consistent stay experience Supporting customers post sales & on trip
Budget & Alternative Accommodations
Differentiated supply from 3rd party budget hotel brands goibibo value brand positioning GoContacts programs to enhance reach Focused on expanding Alternative Accommodations
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Proprietary Platform to Aggregate Content & Rooms from Independent Hotels
Common Hotel Supplier Extranet Platform
Single platform for multiple brand inventory & rates management Supplier driven discounting capabilities Competitive & demand signals to provide (hyper local market) intelligence Management of Goods & Services Tax compliance for hoteliers Hotelier & guest live chat Participation in Q&A: talk to guest before booking
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Innovations Enhances Experiences for Users & Suppliers
Greater Personalization AI Powered Customer Support In App Feedback with Suppliers WhatsApp Integration Enhanced Referral Program Unique Customer Refund Program
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Improved Loyalty Programs – Driving Customer Retention & Satisfaction
MMT Black Earn Wallet+ Cash by Spending Wide Range of Redemption Options +135K Enrollees MMT Double Black Annual Subscription Model Value for Frequent Travelers ~20K Enrollees
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Mobile Focused Approach Enabling Continued Reach & Growth
Mobile Air Ticketing 62% Mobile Bus Ticketing 60% Mobile Hotel Booking 76% *Q3 FY2018 mobile transactions as % of total
Google Play Apps
penetration
cumulative app downloads to date
average active mobiles users
Shopper Visits via Mobile App & Web
Amazon Pay enabled
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Experienced Founding & Management Team Driving Execution Deep Kalra
Co-Founder, Chairman and Group CEO
Bowing Inc. & ABN AMRO Bank
Entrepreneurs (TIE) New Delhi chapter
serves on Governing Council
Rajesh Magow
Co-Founder and CEO India
Limited & Voltas Limited
Chartered Accountants of India, Delhi
Mohit Kabra
Group Chief Financial Officer
Colgate & Seagrams
College
Chartered Accountants of India
Cost Accountants of India
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Results presented include the consolidation of ibibo group from February 1, 2017
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9 Months Year to Date Financial Summary (Fiscal Year 2018)
Source: Company data, SEC 6K Filed on February 8 2018. Gross Bookings include Bus Ticketing
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High Net Revenue Growth & Improving Marketing Spend Efficiencies
Source: Company data, SEC 6K Filed on February 8 2018 YoY % change on Constant Currency Basis, as reported Marketing & Sales Promotion includes adjustments for other promotions netted against revenue less service costs. Gross Bookings includes Bus Ticketing bookings
($ in millions) Q1 FY18 YoY Q2 FY18 YoY Q3 FY18 YoY
Total Revenue Less Service Costs (Net Revenue) $141.2 +135% $139.2 +157% $151.4 +94% Air Ticketing Net Revenue $45.6 +86% $47.1 +95% $50.9 +30% Hotels & Packages Net Revenue $81.3 +140% $79.2 +180% $83.9 +132% Other Net Revenue $14.3 +703% $12.9 +568% $16.6 +476% Marketing & Sales Promotion Spend $142.4 +165% $135.9 +176% $133.3 +194% Adjusted Operating (Losses) ($52.3) ($45.0) ($33.9) Adjusted Operating (Losses) as % of Gross Bookings (4.6%) (4.2%) (2.9%)
$2.6 million reduction in total Marketing & Sales Promotion spend in Q3FY18 vs Q2FY18 & $9.1 million reduction vs. Q1FY18 Adjusted Operating (Losses) as % of Gross Bookings improved to 2.9% as a result of improving Marketing efficiencies
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Improving Mix and Margins with Strategic Focus on Hotels and Packages
Air Ticketing Net Revenue Margin Hotels and Packages Net Revenue Margin
incentives from airlines
fees from customers
Effective Product Bundling & Scale
incentives from hoteliers Multiple sources
Total Net Revenue as % of Total Gross Bookings1
8.1% 8.1% 8.8% 11.3% 12.7%
0% 2% 4% 6% 8% 10% 12% 14% FY14 FY15 FY16 FY17 YTD FY18
6.6% 6.1% 6.0% 7.7% 7.3%
0% 2% 4% 6% 8% 10% FY14 FY15 FY16 FY17 YTD FY18
12.6% 13.2% 15.3% 18.8% 22.5%
0% 5% 10% 15% 20% 25%
FY14 FY15 FY16 FY17 YTD FY18 Note 1: YTDFY18 calculation includes Bus Ticketing bookings, prior periods only included air ticketing & hotels & packages gross bookings
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2.1% 1.9% 1.9% 2.0% 1.5% 1.4% 1.4% 1.4% 1.2% 1.1% 2.7% 2.2% 2.3% 2.1% 1.6% 2.2% 2.6% 5.9% 9.8% 12.1%
0.3% 0.4% 0.4% 0.5% 0.3%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% FY14 FY15 FY16 FY17 YTD FY18
Personnel Expenses Payment Gateway SGA Marketing Depreciation & Amortization
11.9% 15.6% 8.7% 16.5% 8.5%
Investing to Drive Higher Hotels & Packages Net Revenue Contribution
% of Gross Bookings
45% H&P Net Rev Mix 51% 51% 57% 38% Blended Net Rev Margin 8.1% 8.1% 8.8% 11.3% 12.7% Marketing as % of Net Rev 26.2% 30.6% 64.4% 82.0% 95.3%
Note: YTD FY18’s Gross Bookings calculation includes Bus Ticketing bookings Personnel Expenses excluded share based compensation charges and Severance cost related to a prior acquisition Depreciation and amortization excluded Acquisition related intangibles amortization SGA excluded Merger and acquisitions related expenses