Transcript Webjet Investor Presentation

Investor Presentation
CONCORDE
The worldwide online travel market
is growing at 30% per annum.
The value of U.S. online travel will grow from
US$25 billion in 2001 to around US$65 billion
by 2005.
Source: PhoCusWright
Company Overview
• Webjet is a low cost marketer & manager of travel
& associated services via the internet
• Pure online travel company
• Delivers customer value through cost plus pricing
• Low cost distribution model
• Alliance with shareholder Galileo International Inc.,
one of the world’s largest travel distributors
Directors and Management
• Allan Nahum
–
• David Clarke
–
• Ben Lochtenberg –
Chairman, Current Partner
Meyrick Webster
MD, former CEO Jetset Travel
• John Lemish
–
• Steven Scheuer
–
Deputy Chairman former
Chairman, Orica Ltd
Operations Director, 20 yrs
travel industry experience
Non Exec Director
• Dean Maidment
–
Business Development Manager
Corporate Aims & Objectives
• Retain No 1 position as the only true online Internet
seller of travel
• Be recognized as providing the lowest cost travel
• Gain market share in Australia & overseas
• Maximise profitability through its low cost
distribution model
Key Strategies
• Offer a user-friendly website enabling customers
to efficiently find & book lowest cost travel
• Accelerate market penetration and new sales
opportunities by leveraging Galileo’s global
footprint
• Provide cost plus transparent pricing to customers
• Provide commercially scaleable services without a
proportionate increase in costs.
A Proven Business Model
• Scaleable model
• Online travel model is here to stay
• Technology offers high growth at low marginal cost
• Qantas & Virgin Blue are successfully selling online
• Commercial success of Travelocity & Trip.com
Webjet’s Scaleable Business Model
$m
p.a
20
18
16
14
12
10
8
6
4
2
Net Revenue
Total Expenses
Net Profit
2002
2003
2004
Financial
Year
2005
Financial Model
Gross Transaction Value
- Qtr to Qrt Growth
Income
Expenses (net of interest income)
Net Profit / (Loss)
Net Op. Cash Flow
$8.9M
$9.8M
$15M
$20M
$30M
$0.6M
$1.6M
($1.0M)
($0.4M)
0.7M
1.5M
(0.8M)
($0.9M)
$1.1M
$1.4M
($0.3M)
($0.4M*)
$1.4M
$1.5M
($0.1M)
($0.3M**)
$2.1M
$1.6M
$0.5M
$0.4M
The Australian Travel Market (current)
$12 Billion
50%
Airlines
50%Agents
$6 Billion
50%
Accommodation
Car Hire
Etc
50% Air Travel
$3.0 Billion
Settled Via
IATA
Webjet's Aim
10% - 15%
Market Trends
• The travel market is undergoing significant transition
• Rationalisation of sales channels
• Access to market depends on access to tickets
• Cross marketing opportunities
Move To Internet Distribution
• Airlines need to reduce distribution costs
• Administrative cost structures are now characterised
by a limited price elasticity environment
• The physical distribution industry faces a margin
squeeze.
Comparison of Sales Channels….
Customer
Agent
Shop front
Online
Expensive
Time consuming
Complex Bookings
Cheap
Quick
Simple bookings
Control of Booking
Driven by personnel cost
& investments in assetss
Local customer base
High marginal cost
Control of booking
Fixed cost base
National customer base
without borders
Geared for high growth
International industry comparisons
• Expedia, Travelocity (US) and Ebookers (EU)
provide successful and profitable online travel
• Strong growth in turbulent market despite massive
opposition from retail companies
• Well-known brand names
• Analysts reward strong market opportunity
About Galileo
• Galileo is a wholly owned subsidiary of Cendant
• One third of all automated travel reservations worldwide
are booked through Galileo's systems
• Galileo provides subscribers at over 45,000 locations the
ability to access & book reservations for 501 airlines, 31
car rental companies, 51,000 hotel properties, 400 plus
tour operators and all major cruise lines.
• Increased Webjet shareholding to up to 20%
Cendent Overview (US$14bn cap.)
Significance of the Deal to Webjet
• Accelerates Webjet’s online penetration leveraging off
Galileo’s global footprint.
• Offers travellers a superior booking interface, with increased
reservation capacity and multiple functionality.
• Access to Cendant Group companies such as Avis, Budget,
Best Western Hotels and RCI timeshare.
• Establish Webjet as launch partner in Australia for Galileo’s
global Trip.com business, offering cross referral of customers
and products.
Future Growth
• Increasing brand power with targeted marketing
• Capitalize on new booking engine
• Estimated gross booking revenue of AUD50m in FY
ending 2004
• Exploit industry rationalisation
• Growth from international reach
Appendix - Corporate Summary
Pre Funding
•
•
•
•
•
•
20 Day VWAP
Current share price:
Issued shares:
Market Cap $m:
Year rolling share price:
NTA / Share
6.1cents
7.0 cents
124m
$8.7m
4.7 – 20.5 cents
1.6 cents
Post Funding
7.0 cents
TBA
TBA
TBA
Appendix - Terms of the Capital Raising
• Raising a total of $3.6 million comprising:
• An investment of $1.8 million by Southern Cross Galileo,
comprising $1.0 million immediately and a further A$0.8
million in ordinary shares in three tranches subject to agreed
milestones as the IBE project completes.
• Webjet will raise an additional $1.8 million pursuant to an
institutional placement and a Shareholder Purchase Plan offer
to Webjet Shareholders, underwritten by Intersuisse
Corporate Pty Ltd.
Appendix - 20 Largest Shareholders Pre-Funding
Number of Ordinary
Shares Held
Name
24,399,143
Mr Steven Scheuer
7,610,000
Capstan Nominees Pty Ltd
5,088,350
Mr John Lemish
5,000,000
Southern Cross Distribution Systems Pty Ltd
4,185,481
Ms Angela Knell
3,984,444
Mr David Clarke
2,271,801
Denlie Pty Ltd
2,091,500
ANZ Nominees Limited
2,069,752
Mr Rhett Gary Harris
1,793,778
Wellington Custodians Pty Ltd
1,770,147
King-Eng Tan
1,664,171
Obelisk Nominees Limited
1,300,000
Kasko Pty Ltd
1,258,433
Brincliff Pty Ltd
1,177,796
Mrs Karina Harris
1,144,815
Turelin Nominees Pty Ltd
1,000,000
Mr David Bowen and Mrs Diane Bowen
983,064
Mr Robert Karl Stahl
930,000
Ms Suzanne Kay Arnall
925,000
Muzzledick DSL Pty Ltd
70,647,675
%
19.69
6.14
4.11
4.04
3.38
3.22
1.83
1.69
1.67
1.45
1.43
1.34
1.05
1.02
0.95
0.92
0.81
0.79
0.75
0.75
57.03
Appendix – US Online Growth Outlook
US$
Appendix – US Online Travel Players
Appendix – World Growth Outlook
US$
Appendix - Member Companies
Appendix - U.S. TRAVEL GROWTH