Transcript Webjet Investor Presentation

Investor Presentation
Information for Professional Investors
- please see Disclaimer
1
Presentation
• Online Travel – Internationally
• The Webjet Model
• Webjet Results and Forecasts
– Base Forecast
– Gulf Impact
– Margin Improvement
• Capital Raising
• Why Invest?
2
Online Travel is Growing at Four
Times Normal Travel
• 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$65 billion
by 2005.
Source: PhoCus Wright
3
US Online Travel to grow from 12%
to 26% by 2005
US$
4
International Comparisons
2002 v 2001 Results
• Expedia – US/EU
– Gross Sales 5.3B up 82%
– Net income 66M v 21M loss
– Hotels Sales up 156% and tour packages up
170%
• Ebookers – EU
– Gross Sales 273M up 52%
– Net loss 12M v 26M loss - halved
– Hotels Sales up 124% and tour packages up
163%
5
Overseas Travel Stocks – Expedia
(US) and ebookers (EU)
Sept 11
Gulf
6
Expedia Outperforms the Dow Jones
7
Webjet Model
• Pure online travel company
• Local version of high growth overseas players
• Low cost base allows revenue growth to flow
to bottom line
• Strategic Galileo alliance and shareholding
ensures access to air inventory
• Broadening base into high growth hotel and
tour package sales
8
Webjet – Broadening Distribution
• Hotels
– Launching ‘Bookabed’ website
– Worldres relationship
– Galileo/Cendant relationship
• Travel Industry
– White Label other Travel Brands
• Technology
– Dynamic Packaging
– Galileo/Microsoft relationship
9
Online Travel Stocks - Australia
Gulf
10
Gulf War Impact – Sales A$M
Defensive earnings base – 65% Webjet sales
are domestic travel
2.5
2003
2
2002
1.5
1
0.5
0
Jan
Feb
Mar
Apr
11
May
Jun
Financial Scenarios
•
•
•
•
•
•
Scaleable Model
Base Line
Gulf Impact
Margin Improvement
What If Graph
Impact New Land Arrangements
12
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
13
2005
Base Line - What If Scenario
Calendar Years
1H 02
2H 02
1H 03
2H 03
1H 04
Gross Transaction Value
(Qtr to Qtr Growth)
$8.9m
$9.8m
$15m
$20m
$30m
Income
$0.6m
$0.7m
$1.1m
$1.4m
$2.1m
Expenses (net of interest income)
$1.6m
$1.5m
$1.4m
$1.5m
$1.6m
Net Profit/ (Loss)
($1.0m) ($0.8m)
($0.3m)
($0.1m)
$0.5m
Net. Op. Cash Flow
($0.4m) ($0.9m)
($0.4m)
($0.3m)
$0.4m
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Gulf Impact - What If Scenario
Calendar Years
1H 02
2H 02
1H 03
2H 03
1H 04
Gross Transaction Value
(Qtr to Qtr Growth)
$8.9m
$9.8m
$11.4m
$20m
$30m
Income
$0.6m
$0.7m
$0.8m
$1.4m
$2.1m
Expenses (net of interest income)
$1.6m
$1.5m
$1.3m
$1.5m
$1.6m
Net Profit/ (Loss)
($1.0m) ($0.8m)
($0.5m)
($0.1m)
$0.5m
Net. Op. Cash Flow
($0.4m) ($0.9m)
($0.6m)
($0.3m)
$0.4m
• Assumes Gulf War Impact on Travel Limited to First Half 2003
15
Margin Improvement - What If
Scenario
Calendar Years
1H 02
2H 02
1H 03
2H 03
1H 04
Gross Transaction Value
(Qtr to Qtr Growth)
$8.9m
$9.8m
$15m
$20m
$30m
Income
$0.6m
$0.7m
$1,1m
$1.6m
$2.4m
Expenses (net of interest income)
$1.6m
$1.5m
$1.4m
$1.5m
$1.6m
Net Profit/ (Loss)
($1.0m) ($0.8m)
($0.3m)
$0.1m
$0.8m
Net. Op. Cash Flow
($0.4m) ($0.9m)
($0.4m)
($0.1m)
$0.7m
• Assumes that Margin Improvement first reflects in 2H 03
and is sustainable
•Expected higher margins from tour package and hotel sales in 1H 04
excluded, as is any development cost
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What If Scenarios
0.8
0.6
0.4
0.2
Base Line
Gulf Impact
Margin Improve
0
-0.2
-0.4
-0.6
1H 03
2H 03
1H 04
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Broader Land Distribution
- What If Scenario
Calendar Years
1H 03
2H 03
1H 04
2H 04
1H 05
Existing Business Mix
New Land Arrangements
$15m
$20m
$30m
$35m
$ 4m
$40m
$ 8m
Total Gross Turnover
$15m
$20m
$30m
$39m
$48m
Income
$1.1m
$1.4m
$2.1m
$2.8m
$3.5m
Expenses (net of interest income)
$1.4m
$1.5m
$1.6m
$1.9m
$1.9m
Net Profit/ (Loss)
($0.3m) ($0.1m)
$0.5m
$0.9m
$1.6m
Net. Op. Cash Flow
($0.4m) ($0.3m)
$0.4m
$0.8m
$1.4m
• Assumes Aggregate Impact of New Land Arrangements
•Bookabed, Galileo/Cendant,Dynamic Packaging
•Land Margins of 8%
•Tapering Off of Existing Business Growth Rates
•TSA Platform estimated cost of $2M amortised over 5 years
18
Broader Land Distribution
- Next 2 Years What If
60
2
Gross Sales
Axis
Net Profit
Axis
50
1.5
40
1
30
Gross Sales
Net Profit
0.5
20
0
10
Breakeven
0
-0.5
1H 03
2H 03
1H 04
2H 04
19
1H 05
Capital Raising
• Raising $3.6M
• Galileo contributing $1.8M to grow their shareholding
from 4% to 20%
• Webjet will raise $1.8M via Institutional placement
and Shareholder Purchase Plan (SPP - underwritten
by Intersuisse).
• Webjet has completed arrangements for $1.0M
• Price = 5 cents per share
• SPP closes 24 April 2003
20
Funds to be Used For
• Strengthen Balance Sheet
- $1.8M
• Microsoft (MS) Development
- $1.8M
• MS Dynamic Packaging Development
–
–
–
–
Overseas Growth Model
Higher Margins from Hotels and Tour Packaging
E.g margins of 8-10% v 7-8% on Air
To be completed at MS Development Center in
Sydney
– By early 2004
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Galileo
• Wholly owned subsidiary of Cendant Corp
(NYSE:CD). Market Cap 14 Billion.
• Has market share of one third of all automated travel
reservations worldwide. Competitors are
Sabre/Amadeus
• Galileo provides 45,000 travel agents access &
bookings for
–
–
–
–
501 airlines
31 car rental companies
51,000 hotel properties
400 plus tour operators and all major cruise lines.
22
Cendant Travel Services
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Significance of Galileo to Webjet
• Ability to leverage off Galileo’s global footprint.
• Offers a superior booking interface, with increased
reservation capacity and functionality.
• Access to Cendant Group companies such as Avis,
Budget, Best Western Hotels and RCI timeshare.
• Establishes Webjet as launch partner in Australia for
Galileo’s Trip.com business, offering cross referral of
customers and products.
24
Attractions of the Webjet Model
• Proven Sustainable Business Model
• Overseas Online Travel Parallels to follow
•
•
•
•
Online travel model is here to Stay
Webjet is the Australian Market Leader
Scaleable model - High Growth at low Marginal Cost
Improving Margins
• Distribution Base Improving – Industry Rationalising
• Move into Dynamic Packing with Microsoft/Galileo
Information for Professional Investors
25
- please see Disclaimer
Appendix - 20 Largest Shareholders Pre-Funding
Name
Number of Ordinary Shares Held
%
Mr Steven Scheuer
29,399,143
19.69
Capstan Nominees Pty Ltd
7,610,000
6.14
Mr John Lemish
5,088,350
4.11
Southern Cross Distribution Systems Pty Ltd
5,000,000
4.04
Ms Angela Knell
4,185,481
3.38
Mr David Clarke
3,984,444
3.22
Denlie Pty Ltd
2,271,801
1.83
ANZ Nominees Limited
2,091,500
1.69
Mr Rhett Gary Harris
2,069,752
1.67
Wellington Custodians Pty Ltd
1,793,778
1.45
King-Eng Tan
1,770,147
1.43
Obelisk Nominees Limited
1,664,171
1.34
Kasko Pty Ltd
1,300,000
1.05
Brincliff Pty Ltd
1,258,433
1.02
Mrs Karina Harris
1,177,796
0.95
Turelin Nominees Pty Ltd
1,144,815
0.92
Mr David and Mrs Diane Bowen
1,000,000
0.81
Mr Robert Karl Stahl
983,064,
0.79
Ms Suzanne Kay Arnall
930,000
0.75
Muzzledick DSL Pty Ltd
925,000
0.75
70,647,675
57.03
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Directors and Management
• Allan Nahum
–
Chairman, Current Partner
Meyrick Webster
–
MD, former CEO Jetset Travel
• David Clarke
• Ben Lochtenberg –
• John Lemish
–
• Steven Scheuer
–
Deputy Chairman former
Chairman, Orica Ltd
Operations Director, 20 yrs
travel industry experience
Non Exec Director
• Dean Maidment
–
Business Development Mgr
• Richard Noon
-
Corporate Affairs, 25 yrs travel
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