MakeMyTrip Limited (NASDAQ: MMYT)
Investor Presentation March 2020
Safe Harbor Certain statements contained in this presentation are - - PowerPoint PPT Presentation
MakeMyTrip Limited (NASDAQ: MMYT) Investor Presentation March 2020 Safe Harbor Certain statements contained in this presentation are forward - looking statements within the meaning of the safe harbor provisi ons of the U.S. Private
MakeMyTrip Limited (NASDAQ: MMYT)
Investor Presentation March 2020
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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 23, 2019 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 cancellations, discounts 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 rail tickets and fees earned by facilitating travel insurance policies to customers.
Adjusted Revenue represents IFRS revenue after adding back promotion expenses in the nature of customer discounts, customer
inducement or acquisition costs and loyalty programs costs which are reported as a reduction of revenue, and deducting the cost of acquisition of services primarily relating to sales to customers where the company acts as the principal. We believe that Adjusted Revenue reflects the value addition of the travel services that we provides to our customers.
Adjusted Revenue Margins is defined as Adjusted Revenue as a percentage of Gross Bookings, and represents commissions,
fees, incentive payments and other amounts earned in our business. We follow adjusted net revenue margin trends closely across
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
Market Leader with Multiple Well Recognized Online Travel Brands Culture of Continuous Product Innovations Supported by Robust Tech Platforms to Drive Scalability
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Super App – One Stop for End to End Booking Travel Services Strong Partnership with Fragmented Accommodations Supply Ecosystem Demonstrated Operating Leverage with Scale in Multiple Travel Segments Experienced Management Team with Deep Knowledge of Local Travel Landscape
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High Growth & Share Gains in Underpenetrated Travel Segments
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Large Economy with Reaccelerating Growth Forcasted1
Source: 1IMF World Economic Outlook, Real GDP Growth 2CIA World Fact book 2020 estimates; China Internet Network Information Center (CNNIC), McKinsey Global Institute Digital India
44% 31% 29% 50% 52% 59% 6% 17% 12% Age 0–24 Age 25–64 Age 65+
Largest Young Population(2020)2
2023E 2018 224 817 478 700 US China India India
2nd Largest Base of Smartphone Users (in millions)
96% 60% 44% 60% US China India India 2023E 2018
Growth Driven by Low Internet Penetration
312 829 560 800 US China India India 2023E 2018
2nd Largest Base
Long Term Macro Growth Drivers Available
2019 2020 2021
4.8% 5.8% 6.5% 6.1% 6.0% 5.8% 2.3% 2.0% 1.7%
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Large Growth Opportunities Ahead
Air $17 Hotels $11 Outbound $6 Bus $8 Rail $7 India Travel Market FY2019 Air $30 Hotels $21 Outboun d $12 Bus $12 Rail $9 India Travel Market FY2025 FY2019: $49 Billion FY2025: $84 Billion
Air 10% Hotels 12% Outbound 11% Bus 8% Rail 4% Total 10%
FY19 – FY25 CAGR Source: Goldman Sachs Research Estimates (In $ billions of Bookings) (In $ billions of Bookings)
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Market Leader with Superior Domestic Brand Awareness
Source: January2020 KANTAR Brand Health Report commissioned by Company Redbus data from 14th Wave of the Brand Track for India conducted by Nepa
51 17 69 6 2 2 20 40 60 80 100 MakeMyTrip gobibo redBus Yatra Cleatrip Others
Top Of Mind Awareness
51 19 87 5 5 5 20 40 60 80 100 MakeMyTrip gobibo redBus Yatra Cleatrip Others
Consideration Top Box Score
Competitors
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Super App of Travel with Multiple Brands - Catering to All Travelers
+46 Million Transacted Customers
(Life to Date)
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Travel Market with Long Term Growth Potential in Underpenetrated Segments
Leading Domestic & International Online Market Share 3rd Largest Aviation Market by 2022 with Liberal Open Sky Policy Strong Pent Up Demand for Air Travel Domestic Fleet Size to Double to 1,200 planes in next 4 to 5 years UDAN Program to Drive Greater Domestic Connectivity 200 operational airports by 2024 (70 airports International ready) – Aviation Ministry Sept 2019
Online Flight Ticketing Online Hotel Booking
Highly Fragmented Supply Landscape Overall Market Size Widens with Alternative Accommodations Currently Offer 72K Domestic Properties (Including 19K Alternative Accommodations) Estimated Domestic Supply of 2 Million Rooms & Growing Increasing Supply in Budget Segment via Alternative Accommodations Tech Enabled Solutions for Partners to Create Value
32.2 33.8 34.7 34.3 36.2 35.5 35.2 35.2 38.3 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0
OND 2017 JFM 2018 AMJ 2018 JAS 2018 OND 2018 JFM 2019 AMJ 2019 JAS 2019 OND 2019 Millions of Domestic Passengers Flown
Source: DGCA.nic.in YoY Growth %
12% 18% 24% India China EU US
10% - 15% 25% - 30% 41% 46% Source: Morgan Stanley India Internet: Chart of the Week: Online penetration of
hotel bookings is low and has room to grow
20% 19% Source: Vision 2040 for the Civil Aviation Industry in India – KPMG Jan 2019 5% 2% 3% 6%
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Full Range of Accommodations Offered in Underpenetrated Market
Premium (5 & 4 stars)
Positioning MakeMyTrip as premium brand Leveraging loyalty programs to drive retention Targeting high spending & repeat customers Delivering superior end-to-end user experience
Mid Tier (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
Budget Certification Program Good Ratings & Standard Amenities Consistency across fragmented supply 10,000+ goStays available
Unit Economics Positive Across Entire Range of Accommodations Sold All Tiers Growing Positively in Room Nights Stayed
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experience
Service Pledge & Guarantee
Social Media Channels
boards to promote local & community based travel
+19,000 properties bookable in India
Focusing on Alternative Accommodations Growth
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redBus – Leading Intercity Bus Ticketing Brand
selection & choice of intercity bus operators (public & private)
brand with superior customer experience
transition online for inventory & distribution management
fragmentation & low
penetration offers growth
beyond India – operating in LATAM & Southeast Asia
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Activities & Experiences - Greater Brand Stickiness & Increased Platform Usage
Experiences Available (Domestic & International)
Usage Frequency
Archaeological Survey of India (ASI) – entry tickets to all monuments across India
to Overall Platform
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Mobile Centric Approach Driving High Direct & Repeat Traffic
Mobile Air Ticketing 63% Mobile Bus Ticketing 77% Mobile Hotel Booking 78%
*9 months FY2020 mobile transactions as % of total
Tapping into next 100 million new Internet users via Train
Mobile Train Ticketing 90%
New Digital Payments Platform to Drive Greater Adoption of e-Commerce
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Innovative & Effective Loyalty Programs Helping Drive Greater Customer Retention
MMTBLACK Earn Wallet+ Cash by Spending Wide Range of Redemption Options +1.1 Million Enrollees MMTDOUBLEBLACK Annual Subscription Model Value for Frequent Travelers +139 K Enrollees to date Redesigned goRewards UGC reviews & content Enhanced Platform Credibility & Utility +2.3 Mln High Tiered Users
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Gaining Greater Corporate Travel Wallet Share
Small & Medium Enterprise Self Service Solution (myBiz) Managed Corporate Travel Enterprise System (Quest2Travel)
Online & Automation Focused Solutions to Address Large Corporate Travel Market
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Robust & Innovative Technology Platform to Drive Super App Vision
Travel Super App Universal Search Faster Product Discovery Better User Engagement Big Data & AI Driven Cross Sell Experience Relevant Persuasions Personalized Recommendations Trip Ideas Destination Discovery & Inspiration Destination Planning Linked to Booking Enhanced Discoverability Contextualized Prompts Area Guides to Build Trust Granular Travel Themes
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Corporate Social Responsibility
Ecological Balance Invest resources and create awareness to support sustainable & responsible tourism in India
popular tourism spots – Zero Waste Destinations
to establish homestays & eco cafes to provide economic opportunities
stakeholders
climate change & global warming
Miyawaki Technique of Plantation with 1 million trees planted in Ladakh
Government to make island single use plastic free
Responsible Tourism Restoration & Development
across India
generate interest in local history and drive tourism
Natural Calamities
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Experienced Founding & Management Team Driving Execution
Deep Kalra
Founder & Group Executive Chairman
Bowing Inc. & ABN AMRO Bank
Entrepreneurs (TIE) New Delhi chapter
serves on the Board & Governing Council
Rajesh Magow
Co-Founder & Group CEO
Operating Officer
Limited & Voltas Limited
Chartered Accountants of India
Mohit Kabra
Group Chief Financial Officer
Colgate & Seagram
University
Chartered Accountants of India
Cost Accountants of India
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Results presented include the consolidation of ibibo group from February 1, 2017 onwards, unless otherwise noted
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Leading OTA in India with Considerable Business Scale (FY2019)
Source: Company data, Fiscal Year 2019 Note: yoy growth rates in constant currency where applicable
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9 Months YTD Fiscal Year 2020 Financial Summary
Source: Company data for the 9 months ended December 31, 2019 Note: yoy growth rates in constant currency where applicable
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Demonstrated Ability to Drive Operating Cost Efficiencies in Fiscal Year 2020
($ in millions) Q1 FY20 Q2 FY20 Q3 FY20
Total Gross Bookings* +24% +20% +19% Adjusted Revenue* +21% +13% +13% Air Ticketing +24% +17% +15% Hotels and Packages +12% +2% +10% Bus Ticketing +37% +38% +36%
(*Growth rates in constant currency year over year basis)
Total Adjusted Revenue as % of Total Gross Bookings 11.7% 12.1% 12.2 % Marketing & Sales Promotion Expenses As % of Total Gross Bookings 9.5% 9.0% 8.9% Adjusted Operating (Losses) ($29.2) ($19.3)1 ($11.0) As % of Total Gross Bookings (1.7%) (1.3%) (0.6%)
Source: Company data, SEC 6-K Filings Total Gross Bookings includes Bus Ticketing bookings, Marketing & Sales Promotion Expenses includes adjustments for promotions netted against adjusted revenue and loyalty program costs
1 Includes one-time accelerated personnel cost of $2.5 million
Focused on Growth, Share Gains & Improved Operating Efficiencies during Challenging Macro & Industry Operating Conditions
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12.6% 13.2% 15.3% 18.8% 22.6% 23.2% 22.5%
0% 5% 10% 15% 20% 25%
FY14 FY15 FY16 FY17 FY18 FY19 YTD FY20
6.6% 6.1% 6.0% 7.7% 7.5% 7.3% 7.0%
0% 2% 4% 6% 8% 10% FY14 FY15 FY16 FY17 FY18 FY19 YTD FY20
Improving Mix and Margins with Strategic Focus on Hotels and Packages
Air Ticketing Adjusted Revenue Margin Hotels and Packages Adjusted Revenue Margin
Diversified sources
incentives from airlines
fees from customers
Multiple Sources of Adjusted Revenue
incentives from hoteliers
Total Adjusted Revenue as % of Total Gross Bookings1
8.1% 8.1% 8.8% 11.3% 12.6% 12.4% 12.0%
0% 2% 4% 6% 8% 10% 12% 14% FY14 FY15 FY16 FY17 FY18 FY19 YTD FY20
Note 1: FY18 & onwards calculations includes Bus Ticketing bookings prior periods only included air ticketing & hotels & packages gross bookings
Targeting Improved Total Adjusted Revenue as % of Total Gross Bookings Driven by Higher Mix of H&P
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3.6% 3.1% 2.1% 1.9% 2.0% 2.0% 2.1% 1.9% 1.9% 2.1% 1.5% 1.4% 1.4% 1.4% 1.5% 1.3% 1.3% 1.3% 1.3% 1.4% 1.4% 1.4% 1.3% 1.1% 1.0% 1.0% 3.4% 2.9% 2.6% 2.5% 2.5% 2.7% 2.7% 2.2% 2.3% 2.1% 1.5% 1.4% 1.4% 5.4% 3.7% 2.1% 1.7% 1.7% 1.7% 2.2% 2.6% 5.9% 13.7% 11.5% 10.2% 9.1%
0.5% 0.5% 0.3% 0.3% 0.3% 0.3% 0.3% 0.4% 0.4% 0.4% 0.3% 0.2% 0.3%
0% 5% 10% 15% 20% 25%
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 (PF) FY18 FY19 YTD FY20
Personnel Expenses Payment Gateway SGA Marketing & Sales Promotion Depreciation & Amortization
11.9% 19.6% 8.7% 16.0% 8.5% 8.0% 7.8% 7.6% 8.5% 14.3% 11.8% 14.2% 13.2%
Playbook of Driving Scale & Efficiencies - Started with Air & Holidays, Now Focusing on Hotels
% of Gross Bookings
45%
H&P Adj. Rev Mix
51% 54% 54% 38% 31% 21% 78% 77% 75%
Air Adj. Rev Mix
Transitioning from Air to Hotels
Blended Adj. Rev Margin
8.5% 8.4% 7.9% 8.5% 7.2% 8.1% 8.1% 8.8% 12.2% 12.6%
Marketing & Sales Promo as % of
44.6% 24.0% 20.4% 19.3% 22.3% 26.2% 30.6% 64.4% 100.7% 91.8%
Note: Proforma FY17 basis Management estimates Personnel Expenses excluded share based compensation charges and severance cost related to a prior acquisition Depreciation and amortization excluded acquisition related intangibles amortization and impairment of intangible assets SGA excluded Merger and acquisitions related expenses Marketing & Sales Promotion Include adjustments for promotions netted against adjusted revenue and loyalty program costs
85% 7.3% 74.0% 52% 12.4% 82.1% 50% 12.0% 76.1%