trivago N.V. · NASDAQ:TRVG
trivago — Q1 2017 Earnings Presentation
34 slides from trivago's earnings presentation, May 15, 2017
Slide 1: Earnings Call Q1 2017
Earnings Call Q1 2017 15 May 2017
Slide 2: Disclaimer
Disclaimer The following applies to the information following this page, which is the information of trivago N.V. and its subsidiaries. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of these securities in an
Slide 3: Agenda
Agenda Company overview Special topic: Marketplace algorithm Financial performance Guidance 2017 Appendix: Financial statements 3
Slide 4: Agenda: Company overview
Agenda Company overview Special topic: Marketplace algorithm Financial performance Guidance 2017 Appendix: Financial statements 4
Slide 5: Q1 2017 – Strong financial performance
Q1 2017 – Strong financial performance Total Revenue (€mm) Adj. EBITDA1 (€mm) Referral Revenue by segment 267.6 13% 18% RoW +68% 19.3 37% +151% Americas 39% 159.4 7.7 50% Developed 43% Europe Q1'16 Q1'17 Q1'16 Q1'17 Q1'16 Q1'17 Source: Q1’16 & Q1’17 unaudited US GAAP financials 5 1. Adj. EBITDA is o
Slide 6: Milestones
trivago has developed rapidly whilst raising only €1.4mm prior to our IPO trivago Total Revenue (€mm) +53% 754.2 +59% 493.1 309.3 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Milestones Second First TV financing campaign Listed on NASDAQ Expedia acquires a 63% round DE and ES as TRVG stake
Slide 7: $415bn Large Market
The online hotel market is vast and growing quickly as consumers continue to transition online Market Potential 6% CAGR⁶ $415bn Large Market Global Hotel Bookings 1 $62bn Based on 15% global Take- rate5 of Hotel Industry Bookings 33% Low Online Penetration2 9% CAGR⁶ $21bn Take-rate on 10.8% High Onl
Slide 8: trivago value proposition
trivago value proposition Challenges addressed Choice Availability Price 2 Global OTAs OTA Regional OTAs 1.4mm1 .vn .de .co.za hotels Hotel Chains and independent hotels Find the ideal hotel Find online availability from over Book at the lowest rate for the trip 200 advertisers 1. Approximate figure
Slide 9: The trivago system
The trivago system 1 2 Marketing Hotel Search Advertiser Relations 3 >740mm SEM bids 160 Hotel Chains e.g. New York Search >500 new TV spots 120 OTAs tested CPC Marketplace OTA 1.4mm Hotels 40.5mm app 1 Global Product downloads to date 7,000 Individual Hotels Enablers Technology Talent Marketplace 1
Slide 10: We dominate the top of the funnel for the hotel vertical
We dominate the top of the funnel for the hotel vertical with our strong consumer brand Referral Revenue FY 2016 Aided brand awareness¹ by Traffic Type SEO2 DEA2 Branded SEM2 >75% 50 – 75% 25 – 50% Below 25% Present Not Present Search interest³ Source: TNS Omnibus, Research Now, Google Trends, Inter
Slide 11: We continuously increased the number of advertisers
We continuously increased the number of advertisers and are now also building business with individual hotels 2005 – 2009 2010 – 2013 2014 – Present 5 Global OTAs 4 Global OTAs 4 Global OTAs >115 Regional OTAs >15 Regional OTAs >35 Regional OTAs >160 Chains >10 Chains >30 Chains >7,000 Indies Select
Slide 12: Advertisers bid and pay for each click
Advertisers bid and pay for each click a user makes on an offer price Advertisers Room Price CPC Bid1 Global OTAs $163 OTA $1.20 Regional OTAs $163 $1.10 .vn .de .co.za $0.90 $174 Hotel Chains $0.90 $177 Vertical exposure Horizontal exposure Independent Hotels • Advertisers bid on our CPC-based1 bid
Slide 13: A global unified product
We address the critical user needs with a global unified product Mobile Desktop Transparent Pricing www.trivago.com Search details Best deal Price comparison Rich content Ratings and reviews 13
Slide 14: Agenda: Special topic: Marketplace algorithm
Agenda Company overview Special topic: Marketplace algorithm Financial performance Guidance 2017 Appendix: Financial statements 14
Slide 15: Development of trivago Marketplace
Development of trivago Marketplace Introduction of Marketplace Relevance Hotel Level Cost per Cost per Cost per Click Bidding Assessment acquisition Click per platform Assesses the quality of the user experience after a click-out 2005 2006 2008 2012 2014 2015 2016 Closed Market Pricing Model Marketp
Slide 16: End-to-end user value creation
We always focused on end-to-end user value creation ? The user journey does By providing more user … and focusing on a simple … we take responsibility not stop at trivago friendly landing pages … booking funnel… for the end-to-end user experience 16
Slide 17: Flexibility to create more end-to-end value
We give flexibility to create more end-to-end value Old Static New Dynamic Booking Funnel Landing Page Rule Relevance Assessment 1:1 0.65 0.87 • Clear specification what a • Relevance factor becomes a landing page should look like. variable in site optimization • Advertisers who did not fit • Advert
Slide 18: Long-term value through a learning system
Our goal is to create long-term value through a learning system …with the aim of higher returns Improve user experience… for advertisers Optimized user experience throughout the Easier initial access to the trivago platform with booking process and across advertisers own standard landing page
Slide 19: Agenda: Financial performance
Agenda Company overview Special topic: Marketplace algorithm Financial performance Guidance 2017 Appendix: Financial statements 19
Slide 20: Strong YoY growth in revenue continued in Q1 2017
Strong YoY growth in revenue continued in Q1 2017 Total Revenue (€mm) Adj. EBITDA1 (€mm) Net Income (€mm) 7.7 267.6 +68% 19.3 169.2 +70% 159.4 12.3 2 11.9 99.3 7.7 0.1 (0.1) (1.9) Q4’15 Q4’16 Q1’16 Q1’17 Q4’15 Q4’16 Q1’16 Q1’17 Q4’15 Q4’16 Q1’16 Q1’17 Source: unaudited US GAAP financials 20 1. Adj.
Slide 21: Profitability improvement in Q1 2017
Profitability improvement in Q1 2017 ROAS1 (% of Advertising Expense) Adjusted EBITDA2 (% of Total Revenue) 141% 134% 120% 121% Q4’15 Q4’16 Q1’16 Q1’17 Source: unaudited US GAAP financials 1. ROAS: Return on advertising spend 21 2. Adj. EBITDA is only adjusted for share-based compensation. A reconci
Slide 22: Q1 2017 KPI overview – Total
Q1 2017 KPI overview – Total 179 177 Highlights 110 123 122 110 Referrals Qualified • Strong growth in Qualified Referrals across (mm) YoY all regions led by Rest of World +60% Q1'16 Q2'16 Q3'16 Q4'16 Q1'16 Q1'17 1.49 1.43 1.44 1.43 RPQR (€) • Improved RPQR impacted by higher 1.36 1.36 commercializa
Slide 23: Q1 2017 KPI overview – Developed Europe
Q1 2017 KPI overview – Developed Europe 89 74 Highlights 61 54 51 54 Referrals Qualified • Solid QR growth YoY, reflecting increase in (mm) YoY advertising spend +35% Q1'16 Q2'16 Q3'16 Q4'16 Q1'16 Q1'17 1.45 1.42 1.45 1.54 1.37 1.28 RPQR (€) • Improved RPQR impacted by higher YoY commercialization +
Slide 24: Q1 2017 KPI overview – Americas
Q1 2017 KPI overview – Americas 56 46 Highlights 34 37 34 33 Referrals Qualified • Strong YoY growth driven by investments in (mm) YoY TV and SEM +65% Q1'16 Q2'16 Q3'16 Q4'16 Q1'16 Q1'17 RPQR (€) • Improved RPQR impacted by higher YoY commercialization +7% • ROAS slightly improved vs. Q1‘16 ROAS (%)
Slide 25: Q1 2017 KPI overview – Rest of World
Q1 2017 KPI overview – Rest of World 45 48 Highlights 34 29 Referrals Qualified 22 22 • Strong Qualified Referral growth of +118% (mm) YoY YoY, significantly driven by scaling Japan, +115% India and Russia Q1'16 Q2'16 Q3'16 Q4'16 Q1'16 Q1'17 0.95 0.95 1.01 0.84 0.90 RPQR (€) 0.76 • Improved RPQR imp
Slide 26: Agenda: Guidance 2017
Agenda Company overview Special topic: Marketplace algorithm Financial performance Guidance 2017 Appendix: Financial statements 26
Slide 27: Guidance for 2017
Guidance for 2017 Total Revenue expected to Adjusted EBITDA1 grow around 50% margin expected to slightly increase vs. 2016 1. Adjusted EBITDA is only adjusted for share-based compensation 27
Slide 28: Q&A
Q&A
Slide 29: Agenda: Appendix: Financial statements
Agenda Company overview Special topic: Marketplace algorithm Financial performance Guidance 2017 Appendix: Financial statements 29
Slide 30: Consolidated Financials Q1 2017, trivago N.V.
Consolidated Financials Q1 2017, trivago N.V. (in €k) Q1 2017 Q1 2016 Abs Δ vs. Q1'16 Δ vs. Q1'16 Referral revenue 264,292 157,986 106,306 67.3% Comments Other revenue 3,352 1,365 1,987 145.6% Total revenue 267,644 159,351 108,293 68.0% Cost of revenue (1,098) (715) (383) 53.6% • Overview of P&L und
Slide 31: Consolidated Financial Information Q1 2017, trivago N.V.
Consolidated Financial Information Q1 2017, trivago N.V. (in €k) Abs Δ vs. Q1'16 Δ vs. Q1'16 Q1 2017 Q1 2016 Comments Referral revenue 264,292 157,986 106,306 67.3% Other revenue 3,352 1,365 1,987 145.6% 1 Total revenue 267,644 159,351 108,293 68.0% 1) Reflects ongoing international roll-out of Hote
Slide 32: Consolidated Balance Sheet Q1 2017, trivago N.V.
Consolidated Balance Sheet Q1 2017, trivago N.V. (in €k) 31. Mar 2017 31. Dec 2016 Cash and cash equivalent 216,536 227,298 1 Comments Restricted cash 884 884 Accounts receivable 64,197 36,658 Accounts receivable, related party 50,821 16,505 2 1) Fluctuations in cash balance result from working capi
Slide 33: Consolidated Statement of Cash Flows Q1 2017, trivago N.V.
Consolidated Statement of Cash Flows Q1 2017, trivago N.V. (in €k) Q1 2017 Q1 2016 Net lncome (loss) 7,658 (108) Comments Adjustments to reconcile net income to net cash used: Depreciation 1,475 951 1) Decreasing effect on amortization from pushdown Amortization of intangible assets 1,998 6,276 1 ac
Slide 34: Reconciliation of non-GAAP Financial Measures Q1 2017
Reconciliation of non-GAAP Financial Measures Q1 2017, trivago N.V. (in €k) Q1 2017 Q1 2016 Abs Δ vs. Q1'16 Δ vs. Q1'16 Net income (loss) 7,658 (108) 7,766 n.m Income taxes 4,702 385 4,317 n.m. Income before income tax 12,360 277 12,083 n.m Add/(Deduct): Net interest and other expenses 149 (9) 158 n