Morgans Roundtable Presentation Graham Turner, April 10, 2019 1
A STRONG HISTORY OF GROWTH Global force in travel 25b 10,000 Top four global TMC Top leisure travel company 20b – market leader in Australia, 7,500 NZ & South Africa 15b Leisure / Corporate 5,000 businesses in 22 countries 10b Total Corporate presence in 90+ countries (including 2,500 partner network) 5b Productivity focus – TTV growth now consistently - - outpacing network growth TTV Businesses 2
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OVERVIEW: FLT CORPORATE Brand Model Key strategies Organic Growth - Super investment in Sales and Marketing TMC / One FCM - Standardising and Globalising Global Investing in Platforms Sales Excellence SME / Investment in Technology and digitisation – Upside deal announced in USA this week Local Product Development Niche brands and/or specialisations to provide additional customer benefits and retention Niche 5
A COMPELLING CORPORATE GROWTH STORY An organic growth Tailored for Global model customers success Investing in sales and marketing and Distinct brands with distinct offerings A proven model that has been delivering value to customers designed specifically for different deployed in 20+ countries throughout customer types the world Growing through winning and retaining customers – no large scale acquisitions SME – Corporate Traveller All countries profitable (excluding FCM Germany start-up) and with strong Some small acquisitions historically to TMS (National, Multi National, future growth prospects complement organic growth and gain a Academia) - FCM footprint in key markets – Nordics, Highly productive and highly scalable SSME – Flight Centre Business Travel Casto (included in leisure results) Company-owned corporate businesses generated 37% of group TTV during 1H (circa $4.2b) 6
LEADING CORPORATE TECHNOLOGY OFFERING Focus on Ongoing investment in key platforms to enhance the traveller experience, access data, deliver new mobile solutions and achieve Innovation better cost efficiencies Technology labs in place in Boston, Barcelona, Bangkok, Brisbane & Washington DC to develop new tools & products for customers Recent investments in mobile apps (Sam & Claire) to add full native booking capability to Sam :] “your pocket travel assistant” 25% interest acquired in The Upside Travel Company (USA) this week to fast-track growth in SME sector 7
UPSIDE Technology-driven SME specialist with potential to disrupt the large SME & unmanaged corporate sectors Investment reflects FLT’s strategy of creating a next generation SME platform that blends the company’s people expertise with best in class technology to drive an optimal traveller experience Blended SME model to be deployed initially in USA & earmarked for release in Canada & UK Upside will also continue to operate as a standalone corporate business 8
OVERVIEW: FLT LEISURE Mass Premium Youth Market leader Specialist player UK AU Growth in new models Unmanaged small business FCBT USA NZ Vertical expansion Vertical niche CANADA RSA ASIA Digitisation Digitisation 9
AUSTRALIA: SHORT-TERM IMPROVEMENT STRATEGIES ADDRESSING THE CHALLENGES Growth Costs Expansion in growth models and Ongoing focus on reducing head sectors office overheads Specialist businesses / online / Offshoring, outsourcing, robotics home-based / flash sale Productivity & Margins Network IQR – instant quality response to all Ongoing closure / relocation customer enquiries program for underperforming or poorly located shops Attachment, quotes on all products, packages Slowdown in recruitment after largest ever 1H to reflect current Sales of FLT family products market conditions Centralised pricing In-store staffing levels – right number of consultants per shop Proactive and targeted performance improvement plans in place to help consultants achieve targets 10
LEISURE TRANSFORMATION INITIATIVES Membership - Personalised offers, closed user group Sales Technologies - Lead generation, lead rates management (Red Connect)), CRM FCB 2.0 Products & Pricing - New use of data for pricing and Modern Marketing - Automation, data for packaging of offers segmentation, retargeting. Self Service - Mobile apps, new websites, eCommerce, modifying bookings Independent contractor and affiliate Youth and social Host to referral agent model StudentUniverse (online student brand) earmarked New models for Australia launch late in 2H Online Flash sale / voucher Seeking further productivity gains Cost out and efficiency New in-store sales system (GDS) now fully deployed Automation/digitisation to remove pain points Productivity & Specialisation People Flexibility and retention 11
OVERVIEW: TRAVEL EXPERIENCE NETWORK Touring Destination Management Hotels 12
BHMA: BEDDING DOWN HOTEL OPPORTUNITIES 10-year lease agreement in place for four-star Camakila Resort in Bali Management agreements in place in 22 other properties Short-term expansion focus on key locations in Australasia 13
Tracking towards bottom of targeted FY19 profit range FY19 (underlying PBT between $390m and $420m) at end of 1H Monitoring monthly trading results to ensure range remains appropriate Continued focus on Australian leisure business to improve margin, increase TTV & slow cost growth after challenging 1H Rapidly growing North America business continuing to perform but now tracking against a strong trading period during FY18 14
Questions? 15
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