MakeMyTrip Limited (NASDAQ: MMYT)
Investor Presentation September 2020
Safe Harbor Certain statements contained in this presentation are - - PowerPoint PPT Presentation
MakeMyTrip Limited (NASDAQ: MMYT) Investor Presentation September 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 September 2020
2
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 August 17, 2020 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.
3
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 Margin is our segment profitability measure and represents IFRS revenue after adding back customer inducement costs
in the nature of customer incentives, customer acquisition costs and loyalty program 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
information, see “About Key Performance Indicators and Non-IFRS Measures” elsewhere in our SEC Form 20F, filed on August 17, 2020.
Adjusted Margin % is defined as Adjusted Margin as a percentage of Gross Bookings, and represents commissions, fees,
incentive payments and other amounts earned in our business. We follow adjusted 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
4
Key Investment Highlights Strong Market Leadership with Multiple Well Recognized Online Travel Brands Well Positioned to Accelerate Share Gains
1 2 3 4 5
Super App – One Stop for End to End Booking Travel Services Investments in Superior User Experience to Drive Long Term Brand Value Strong Partnerships with Supply Ecosystem Critical in Collaborating to Drive Industry Recovery & Growth Demonstrated Operating Leverage with Scale in Multiple Travel Segments Cost Structure Optimization Accelerated During COVID19 Lockdown Large Long Term Growth Market Available Accelerated Momentum from Offline to Online Buying Behavior Post COVID19
5
Large Economy with Reaccelerating Growth Forcasted1
Source: 1IMF World Economic Outlook, Growth Projections 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 Population2 to Drive Digital Adoption
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
Compelling Long Term Macro Growth Drivers Intact
2019 2020 2021
4.2%
6.0% 6.1% 1.0% 8.2% 2.3%
4.5%
6
Large Growth Opportunities in Travel Ahead
Air $17 Hotels $11 Outbound $6 Bus $8 Rail $7
India Travel Market FY2019
Air $30 Hotels $21 Outbound $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)
7
Long Term Online Growth Potential
Leading Domestic & International Online Market Share Fast Growing Air Travel Market with Online Share Shift Opportunities Available Post COVID19 Lockdown Recovery Begins in FY2021 (CAPA Projections for FY21)
Establishment of Air Travel Bubbles to Aid in Recovery of International Flights 200 operational airports by 2024 (70 airports International ready)
– Aviation Ministry Sept 2019
Flight Ticketing Hotel Booking
High Fragmentation of Accommodations Supply – Largely Independent Properties Win-Win Distribution Relationships Available with Property Owners Enabling Technology to Digitize Property Distribution Management Low Online Booking Penetration: 10% to 15% online Estimated Domestic Supply of 2 Million Hotel Rooms 700k+ International Accommodations Available via Direct Contracting & Affiliates
Source: 2020 Company Estimates, 2025 forecast by Goldman Sachs
Inter-City Bus Ticketing
High Fragmentation of Bus Operators – Seeking Digitization & Online Distribution 25+ Road Transport Corporations within India – State Government Operators 2,500+ Active Bus Operators Signed on Platform with 1+ Million Seats Bookable Unique Bus Operator GDS Platform to Digitize Inventory & redBus App for Online Distribution International Growth Opportunities
Inter-City Bus Ticket Distribution
46% 54%
Online Offline
Source: Internal estimates based on revenue share of domestic private bus market
54% 46%
Domestic Air
Online Offline (including Supplier Direct) 30% 70%
Outbound Air
Source: DGCA July 2020, GDS & company estimates
15% 40% 0% 25% 50% 2020 2025
Domestic Online Booking Penetration
8
Market Leader with Superior Domestic Brand Awareness Well Placed to Accelerate Share Gains Exiting COVID19 Nationwide Lockdown
Source: March 2020 KANTAR Brand Health Report commissioned by Company Redbus data from 14th Wave of the Brand Track for India conducted by Nepa
47 14 69 7 2 3 20 40 60 80 100 MakeMyTrip gobibo redBus Yatra Cleatrip Others
Top Of Mind Awareness
47 18 87 5 7 5 20 40 60 80 100 MakeMyTrip gobibo redBus Yatra Cleatrip Others
Consideration Top Box Score
Competitors
9
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 Common Backend Platform to Drive Faster Innovations & Greater Efficiencies 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
10
Wide Range of Hotel Options
Premium (5 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 & 4 stars)
Expanding Selection & Choice Further Driving Online Bookings Enhanced Customer Experience (Pre Booking, Post Sales & On Trip) Offering Accredited Hotels to Deliver Consistent Stay Experience
Budget
Budget Certification Program Good Ratings & Standard Amenities Consistency Across Fragmented Supply goStays Certified Properties Available
Offering Curated International Hotels Catering to Indian Travelers’ Needs
11
Experience – Social Distancing Friendly
Service Pledge & Guarantee
Social Media Channels
Boards to Promote Local & Community Based Travel
+21,000 Properties in India
Alternative Accommodations – Long Term & Nascent Growth Opportunity
12
redBus – Leading Intercity Bus Ticketing Brand with Full Stack Technology Solutions Across Entire Value Chain & Deep Operational Expertise
Experience
(Public & Private)
Covering 80% of Buses in India
Online for Inventory & Distribution Management – Hosting 45%
(25K+ agents across India)
Operating in LATAM & Southeast Asia
13
Activities & Experiences - Greater Brand Stickiness & Solving for Connected Trips
Solving for ease of fulfilment with skip-the-queue QR code driven solutions, last minute availability & ensuring best pricing Portfolio of 33,000+ domestic and international products; focus on increasing local & domestic portfolio to cater to current demand Direct connectivity with global suppliers and channel managers Partnering with attractions & monuments to enable touchless entry solutions Mapping user journey to show relevant activities basis flight & hotels booked
14
method in India - help extend reach
cities and introducing them to online travel at an early stage of internet adoption
users - cross selling other travel products
retention
drive holidays & Staycations
machine learning algorithm
Outstation Cabs Airport Cabs
booking a flight
customers board cabs from partner kiosks
Metro Ticketing
Hyderabad Metro
Convenient
users of super app
transportation modes & accommodations
Train Ticketing
Ground Transportation – Cabs, Trains & Metro Ticketing Extending Customer Reach
15
Increasing Focus on Gaining Greater Corporate Travel Wallet Share
100% Online Enterprise Platform
Customers’ Needs
Booking Experience
and Features for Corporates
Management Solution
Supply Advantage
Accounts & 4,000+ SMEs Active
2 Product Approach India’s First Comprehensive Self Serve Solution
$24 Billion Addressable Market - Largely Unconsolidated and Offline Focus on SMEs & Mid-Sized Corporates Addresses Half of Total Market Opportunity
16
Brand Expansion into Gulf Coast Council (GCC) Region
(Dedicated UAE Sites, Supply, Traffic, Payments, Language)
International Platform with Localized Offerings
Hotels booking with all inventory available in India B2C Flights booking with all inventory available in India B2C Staycation deals for 7 cities and 120+ hotels Future Stays for 5 cities and 50+ hotels Activities booking with global inventory
17
Multiple Tech Enabled Distribution Channels to Aggregate Demand
B2C Mobile Apps & Mobile Websites Desktop Websites B2B2C myPartner – Offline & Local Travel Agents Booking Platform Franchise Network for Offline Sales Holiday Experts Assisted Holiday Package Sales
18
Industry Recovery Initiatives Post COVID19 Lockdown – Customer Safety Focused
Safety and Cleanliness Protocols to Ensure Safe Travel
Country
Protocol Implementations
Cleanliness Audit Program
19
Aarogya Setu App – Open Source COVID-19 Contact Tracing App
Improved administrative understanding
50M+
Downloads In Record Time
40M+
Self- assessment Taken
200K*
Positive Cases Identified
155M+
Downloads
500+
Emerging Hotspots Identified
5M+
Bluetooth Suspects Identified
Functions
Early and accurate identification
candidates Differential actions basis testing capabilities Timely testing based on interaction timestamps Efficient contact tracing
Achievements
* Based in testing results received so far
20
The MakeMyTrip Foundation - Corporate Social Responsibility
Ecological Balance
The MakeMyTrip Group takes millions of Indians to different places every year, we believe it’s our responsibility to promote a sustainable and responsible way of travel to Indians
popular tourism spots – Zero Waste Destinations in Sahastradhara & Dehradun
establish homestays & eco cafes to provide economic opportunities
stakeholders
change & global warming
Miyawaki Technique of Plantation with 1.2 million trees planted in Ladakh
Government to make island single use plastic free
Responsible Tourism COVID19 Response
& Contributions to Prime Minister’s Cares Fund
develop & scale COVID19 contact tracing app with 155+ million downloads
labors via 150k cooked meals, 300 dry ration kits & 6k masks
21
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
22
23
Source: Company data for the 12 months ending March 31, 2020 Note: yoy growth rates in constant currency where applicable
Air Ticketing
42.1 million Flight Segments +6.5% yoy 78.6 million Bus Tickets Sold +27.9% yoy
Hotels & Packages
29.6 million Room Nights Stayed +11.4% yoy
Leading Indian OTA with Unrivaled Business Scale & Strength (FY2020)
Bus Ticketing
$3.6 billion
Gross Bookings +13.0% yoy
$1.6 billion
Gross Bookings +8.8% yoy
$886 million
Gross Bookings +25.5% yoy
24
$17.0 $28.8 $37.9 $0 $20 $40 FY18 FY19 FY20
Others
$313.7 $351.6 $360.1 $250 $350 FY18 FY19 FY20
Hotels & Packages
$44.4 $58.8 $75.6 $30 $50 $70 FY18 FY19 FY20
Bus Ticketing
$202.1 $234.2 $249.7 $150 $250 FY18 FY19 FY20
Air Ticketing
38%
Adjusted Margin Growth & Improving Business Mix Since ibibo Group Merger
$ in Millions 7.5% 7.3% 7.0%
34.8% 34.5% 35.0%
22.6% 23.2% 22.1%
54.4% 52.2% 49.8%
8.9% 8.2% 8.5%
7.7% 8.7% 10.5% 2.9% 4.3% 5.2%
Adjusted Margin % Segment Mix % of Group Segment Mix % of Group Segment Mix % of Group
Segment Mix % of Group
Adjusted Margin % Adjusted Margin %
25
Ongoing Cost Structure Optimization Since Merger Focused on Marketing, Sales Promotion & Customer Inducement Spend Efficiencies
Operating Costs as % of Gross Bookings
38% 31%
Note: Customer Inducement Costs include adjustments for promotions netted against revenue 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 and provision for litigations ($154.8) ($98.8) ($69.9) ($200) ($150) ($100) ($50) $0 FY18 FY19 FY20
Adjusted Operating Losses
(in $ millions)
promotional activities
customer repeat rates
0.3% 0.2% 0.3% 1.5% 1.4% 1.4% 1.1% 1.0% 1.0% 1.5% 1.4% 1.5% 9.8% 3.6% 2.8% 1.7% 6.6% 5.9% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% FY18 FY19 FY20
Customer Inducement Costs Marketing & Sales Promotion & Certain Loyalty Program Costs SGA Payment Gateway Personnel Expenses Depreciation & Amortization
12.9% 14.2% 15.9%
26
Cost Structure Optimization Accelerated & Liquidity Improved Well Placed to Recover Better Financially from COVID19 Disruption
Note: 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 and provision for litigations Customer Inducement Costs include adjustments for promotions netted against adjusted revenue
Operating Cost Optimizations Implemented in Late March due to COVID19 Disruption
fixed costs
loyalty program & customer inducement costs during travel disruption
– benign competitive landscape
support automation
support expenses
product development & drive development efficiencies
Liquidity Profile Improved – Long Operating Runway
Cash & Term Deposits (as of 6/30/2020): $173.8 million Credit Facilities Available (as of 8/31/2020): ~$100.0 million
(in $ millions)
Q1 FY20 Q1 FY21 YoY Change
Gross Booking $1,693.6 $64.5
Adjusted Margin 198.5 6.7
Air Ticketing 65.0 4.1
Hotels & Packages 101.4 1.2
Bus Ticketing 21.4 0.3
Others 10.7 1.1
Operating Costs Customer Inducement Costs 105.3 0.7
Marketing & Sales Promotion & Loyalty Program Costs 55.5 1.0
Payment Gateway 17.1 0.4
Personnel (excluding SBC) 22.1 15.2
SGA 23.2 7.2
Depreciation & Amortization 4.4 5.0 12.8% Adjusted Operating Profit/(Loss) ($29.2) ($21.3) Adjusted Margin Variable & Semi Variable Costs Fixed & Semi Fixed Costs Q1 FY21 Adjusted Operating Losses Narrowed by $7.9 million year on year despite COVID19 business disruption