Investor Presentation Q3 2014

Transcription

1 Investor Presentation Q3 2014

2 Disclaimers Related to forward-looking statements This presentation may contain forward-looking statements that involve risks, uncertainties and other factors concerning, among other things, Orbitz Worldwide s (the Company s ) expected financial performance and strategic operational plans. The Company s actual results could differ materially from the results expressed or implied by such forward-looking statements, and reported results should not be considered as an indication of future performance. More information regarding these risks, uncertainties and factors is contained in the Risk Factors section of the Company s Form 10-K for the year ended December 31, 2013, as well as subsequent periodic reports filed with the Securities and Exchange Commission ( SEC ), available on the SEC s website at or the Company s Investor Relations website at You are cautioned not to unduly rely on these forward-looking statements, which speak only as of the date of this presentation, and the Company undertakes no obligation to update or revise any forward-looking statement, unless required by applicable law. This presentation should be read in conjunction with the consolidated financial statements in the Company s periodic filings with the SEC. This presentation contains non-gaap financial measures as defined by the SEC. These measures may be different from non-gaap financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP). Reconciliation between GAAP and non-gaap measures can be found in the Appendix We have filed a registration statement (including a prospectus and prospectus supplement) with the SEC for the offering to which this presentation relates. Before you invest, you should read the prospectus supplement, the accompanying prospectus and the other documents we have filed with the SEC for more complete information about us and this offering. 2

3 Leading global player in the online travel sector Business Overview Operates leading travel websites around the world Headquartered in Chicago ~1,400 employees worldwide Q TTM Key Statistics Net Revenue $909M Adj. EBITDA $154M Free Cash Flow $119M Hotel Room Night Growth 17% B2C Suppliers Hundreds of airlines Millions of consumers B2B Over 100K hotels 20 car rental firms Thousands of corporate travel clients and private label partners Millions of packages 3

4 Investment highlights Leading player in online travel with strong global brands Multiple avenues for growth Large underpenetrated global market with attractive long-term growth prospects Differentiated consumer value proposition centered on loyalty and mobile Global technology platform, advanced analytics capabilities Proven and experienced management team Strong financial profile with operating leverage and free cash flow generation 4

5 Well-recognized consumer-facing brands with global reach #2 OTA in the U.S. 98% aided brand awareness ~50% traffic is direct ~60% of transactions are repeat customers Value-oriented U.S. OTA brand Used to develop and test innovative features and strategies European online travel agency with points of sale in 12 countries in Europe Strategic focus on vacation packages, particularly important for European market Global hotel-only player with Asia Pacific focus Significant growth opportunity given highly extensible nature of hotel-only model Offerings today in 18 languages and 35 currencies 5

6 Leading solutions for corporate travel clients and private label partners Over 700 corporate travel clients Clients run the gamut from start ups to Fortune 100 companies High retention rate: ~95% High level of online adoption: ~90% Recent agreement with IBM to provide online booking technology in ~90 countries Wide range of industry-leading private label solutions for partners of all sizes Operates across U.S., Europe & Asia Pacific Recently signed an agreement with Bank of America that we expect will enable Orbitz Partner Network to power Bank of America s travel rewards program 6

7 Multiple avenues for growth Attractive Market Opportunity Strategic Focus On Hotel Loyalty Mobile International Expansion 7

8 Online travel is a large market with attractive long-term growth prospects Key Growth Drivers Online Travel Industry Size Globalization + Online Travel Bookings ($ in billions) $700 $ CAGR Demographics + Higher consumer discretionary spending + Emerging markets + Increasing online penetration of travel $600 $500 $400 $300 $200 $463 $143 $14 $153 $529 $174 $17 $167 $609 $216 $20 $185 $281 $24 $203 25% 20% 10% APAC LATAM Europe Attractive growth industry $100 $137 $151 $165 $ % U.S. Online Travel Industry Size Source: IDC New Media Market Model 8

9 Strategic focus on hotel driving mix shift and thus higher take-rate Revenue mix from hotel & vacation package grew from 42% in 2010 to 53% in Q on a TTM basis 100% % of Net Revenue by Product* Air 80% 36% 35% 34% 29% 28% 63% of Gross Bookings 60% Advertising, Car, Insurance & Other 22% 22% 21% 19% 19% Standalone Hotel & Vacation Package 40% 20% 42% 43% 46% 52% 53% 37% of Gross Bookings 0% Q3 '14 TTM *Totals may not sum to 100% due to rounding 9

10 Loyalty: Increase share of customers travel spend and drive incremental hotel room nights and margin How it works: Earn rewards on Air, Hotel and Vacation Packages Redeem rewards on Hotel Strategy: Drive incremental hotel transactions and thus hotel margin that more than offsets the loyalty investment Take advantage of strength in standalone air to drive hotel cross-sell Attract new customers Use program to modify customer behavior around mobile usage & direct site visitation 10

11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Mobile: Developing industry-leading mobile technologies Industry Leading Mobile Apps Great apps for making hotel choices on the run! Very easy to use! This app & Orbitz has continually given me the best rates on hotels along with the easy to use Orbucks, you can't find a better value. The app itself is intuitive, responsive, & laid out well. Fast, easy to use user interface and all the features you need to make bookings painless. User reviews of OWW apps from Apple App Store and Google Play 40% 35% 30% 25% 20% 15% 10% 5% 0% Strong Customer Engagement OWW % Hotel Bookings via Mobile 33% in Q

12 International Expansion: Deepen presence in rapidly growing international markets Opportunity Global Platform allows for cost effective international expansion Further expansion from B2C brands Orbitz for Business Orbitz Partner Network private label partnerships Focus Areas Asia Product & localization: currencies, languages and content Launch of HotelClub s Chinese brand HotelClub - 好 客 邦 (Hàokèbāng) Orbitz for Business Signed agreement with IBM to provide online booking technology in ~90 countries Orbitz Partner Network Expansion of international sales teams International bank loyalty opportunity 12

13 Efficient and scalable sharing of technology Mobile Marketing Technologies Global Platform enables: Sharing of technology, processes and best practices across businesses Site Optimization Revenue Management Common approach to advanced analytics across all brands Customer Service Technology Product Categories Faster test, learn & implement cycles Fundamental Components Global Supply Infrastructure 13

14 Advanced analytics capabilities facilitate effective marketing spend decisions Capabilities Tracking Attribution Predictive Analytics Technology Use Cases SEM Optimizing spend deep into the long tail Travel Research Predicting performance across millions of property / point of sale / date combinations CRM Providing relevant and targeted content to millions of customers 14

15 Financial Overview 15

16 Drivers of growth in free cash flow Revenue Growth Growth in online travel market Mix shift toward higher take-rate standalone hotel and vacation package Increase in share of customers travel spend from loyalty program Exposure to rapidly growing mobile channel International expansion from B2C brands and B2B businesses Cost Efficiencies Cost of sales efficiencies associated with Global Platform SG&A leverage as business grows Free Cash Flow Conversion Improvement Lower interest payments following recent refinancing CAPEX leverage as business grows Attractive working capital generation profile 16

17 Increased profitability and free cash flow generation Net Revenue ($ in millions) Adj. EBITDA ($ in millions) Free Cash Flow 1 ($ in millions) $767 $779 $ to +10% y/y $127 $128 $ to +10% y/y $114 $74 $ Guidance Guidance Free cash flow = operating cash flow CAPEX 2. Provided on November 6, 2014 Q3 earnings call 17

18 Investment highlights Leading player in online travel with strong global brands Multiple avenues for growth Large underpenetrated global market with attractive long-term growth prospects Differentiated consumer value proposition centered on loyalty and mobile Global technology platform, advanced analytics capabilities Proven and experienced management team Strong financial profile with operating leverage and free cash flow generation 18