Tourism Holdings Limited · NZX:THL
Tourism — Investor Day (February 2012)
63 slides from Tourism's investor day presentation, Feb 29, 2012
Slide 1: Investor Relations Day
tht INVESTOR RELATIONS DAY Auckland | Villa Maria Estate | 29/02/12 ‘creating unforgettable holidays’
Slide 2: Agenda
AGENDA 10am 12.00 12.30 12.45 — 3.30 4.00 5.00 6pm Introduction & Overview USA Rentals | Road Bear Manufacturing New Zealand & Australian Rentals Lunch Depart Villa Maria Site Visits Return Villa Maria Vehicle Sales Tourism Businesses Online | Customer Proposition Financials USA Growth Overview | Su
Slide 3: Housekeeping
• Fire Exits • Toilets • Questions will be taken at the end of each presentation. 3
Slide 4: Half year result overview
• Overall sales revenue was up 27% at $108m. Increase mainly due to the revenue from the acquisition of Road Bear USA acquired 31 st December 2010 and Rugby World Cup in New Zealand. • Trading revenue excluding fleet sales up 24% at $83m Rentals New Zealand up 34% at $25m (excl fleet sales) Rent
Slide 5: Operating cash flow
• Operating cash flow (OCF) at $7.1m was up 121% on the -$33.9m for pcp. • Excluding fleet sales and purchases which are now part of the operating cash flow then OCF was $22m vs $12m for pcp. 5
Slide 6: Introducing Daniel Schneider, CEO Road Bear USA
• Introducing Daniel Schneider – CEO Road Bear USA • Daniel was one of the two previous owners of the Road Bear business for close to 10 years. • Daniel has a background in automotive engineering and over 20 years experience in the RV industry. 6
Slide 7: Road Bear locations
• Road Bear currently has five locations focussed primarily on the West Coast. • Los Angeles, Las Vegas and San Francisco are the most popular locations. • Denver operates as a popular summer location and provides access to the Rocky Mountains. • New York operates under an Agency structure. 7
Slide 8: Road Bear fleet categories
• There are four key categories of fleet within Road Bear. • There are operational benefits from only four categories of fleet. 8
Slide 9: Vehicle branding
• The vehicles purchased retain the manufacturers branding to assist with re-sale. • Road Bear branding is carefully added to minimise costs balanced with appropriate brand recognition. 9
Slide 10: Fleet size over time
• Fleet was quickly reduced post the GFC in 2009. • 2011 fleet size reached a high point. • Fleet size changes throughout the year in line with seasonal requirements. 10
Slide 11: Fleet purchase lead times
• Fleet purchase to delivery time is much shorter than New Zealand and Australia. • Depending on the time of the year a 6 to 12 weeks lead time can be achieved. • Fleet size can be flexed more rapidly than New Zealand and Australia. 11
Slide 12: A Class 29-32'
ROAD BEAR Class A slide-out | 29 — 32’ tnt AClass - 29 — 32’ 12
Slide 13: 29-32' Interior
ROAD BEAR Class A slide-out | 29 — 32’ Interior shot of the Class A 29-32ft with midship TV/DVD Class A 29-32ft with motorised drop down bed (day) tnt 29 — 32 ‘ Interior 13
Slide 14: C Class 27-30'
ROAD BEAR Class C slide-out | 27 — 30’ tnt C Class 27-30’ 14
Slide 15: 27-30' Interior
ROAD BEAR Class C slide-out | 27 — 30’ Interior shot of the Class C 27-30ft with TV/DVD sofa & dinette in bed position Class C 27-30ft with opposing dinette & sofa, hardwood style floor With slide-out (add.15-25 sqft / 1.5-2.5 m? living space) Sen 27-30’ Interior 15
Slide 16: C Class 23-26'
ROAD BEAR Class C non slide-out | 23 — 26’ C Class 23-26’ 16
Slide 17: 23-26' Interior
ROAD BEAR Class C non slide-out | 23 — 26’ Interior shot of the Class C 23-26ft with double dinette Allowing 6 people to face forward while travelling Class C 23-26ft with 2" dinette also converting into a sofa (2 seat belts) or kitchen counter space / office desk tnt 23-26’ Interior 17
Slide 18: C Class 19-22'
ROAD BEAR Class C non slide-out | 19 — 22’ tnt C Class 19-22’ 18
Slide 19: 19-22' Interior
ROAD BEAR Class C non slide-out | 19 — 22’ Interior shot of the Class C 19-22ft with large Counter/dinette set up for 2 travellers Class C 19-22ft with dinette set up for 4 travellers/ jump seat tnt 19-22’ Interior 19
Slide 20: USA vehicle purchase advantages
• Vehicle purchase prices are significantly cheaper than New Zealand and Australia. • There are very different legal requirements. • Weight requirements are less onerous. • Chassis prices are significantly lower • Manufacturers have significantly higher volumes. • Build style and features are in gen
Slide 21: People as competitive advantage
• The quality of the people we employ is considered a competitive advantage. 21
Slide 22: Seasons and pricing
• Three key seasons exist. • Road Bear and Camping World operates “set pricing” • Cruise America, Apollo and El Monte operate “flex pricing”. 22
Slide 23: Seasonality of the business
• Very seasonal business with current locations. • There is minimal domestic or international demand for winter season (even on the West Coast). • The season and utilisation has been very consistent over the past four years. • Off season opportunities will be explored with thl customers. 23
Slide 24: Premium market positioning
• Road Bear operates a premium positioning within the market. • Several large German operators have this year positioned Road Bear with a “top quality” status for the USA. • Customer feedback is considered the most positive in the industry from most operators and is supported by online feedback. 24
Slide 25: Half year result reference
• Refer to the half year result release for more detail. 25
Slide 26: Manufacturing joint venture EBIT outlook
• JV EBIT growth expected compared to losses expected in FY12 and FY13 if thl had remained stand alone. 26
Slide 27: Action Motor Bodies and JV contracts
• Action Motor Bodies will continue to be a cornerstone business within the JV. • St John ambulance contract expected to transfer shortly. • District Health Board contracts expected to transfer. • St John design process worked well and has been well received. • Expansion opportunities are envisaged
Slide 28: New Zealand Rentals
NEW ZEALAND RENTALS SS | AUCKLAND Maui Motorhomes and Car Rentals Britz Cam s and Car Rentals Backpac Explore mper Campervans and Car Rentals ‘> WELLINGTON Maui Motorhomes and Car Rentals Britz Campervans and Car Rentals Backpacker Campervans and Car Rentals ‘_ CHRISTCHURCH Maui Motorhorr Britz Camp
Slide 29: New Zealand Rentals
NEW ZEALAND RENTALS * Rugby Word Cup * $4.5m EBIT * Strong French linkages * Improved internal processes * Fleet Operating Costs down 8% for the half * Repairs and Maintenance * Relocations * Reducing or leveraging the fixed overheads is the key focus for FY13 * Fleet reductions are in line with tot
Slide 30: New Zealand property and branches
• Auckland Property currently also houses Motek Vehicle Sales. • Renewal for Auckland property due this year. • Christchurch is in an area suggested for retail development. No formal notice has been provided by Christchurch International Airport Limited. • Queenstown branch due to open in the next w
Slide 31: Fleet operating costs New Zealand
• Fleet operating costs have been reducing over the past two years. • Further improvements are expected in FY12 and FY13. • Repairs and Maintenance and relocations have been the significant areas of savings. 31
Slide 32: New Zealand fleet size
• New Zealand fleet size is adjusting to the on-going declines in visitation. • Fleet reductions take some time. • Fleet sale pricing and margins need to be maintained. • New fleet builds need to be maintained to ensure the customer proposition is maintained. 32
Slide 33: Australian Rentals
AUSTRALIAN RENTALS @ DARWIN @ CAIRNS @ BROOME @ ALICE SPRINGS @ BRISBANE ‘@ BALLINA/BYRON BAY @ PERTH @ ADELAIDE = @ SYDNEY ‘@ MELBOURNE Maui Motorhomes and Car Rentals @ HOBART Britz Campervans, 4WD and Car Rentals* Backpacker Campervans and Car Rentals* Explore More Campervans and Car Rentals** *
Slide 34: Australian Rentals
AUSTRALIAN RENTALS * Revenue down $0.9m on pcp was disappointing * Exchange rate issues are on-going * Fleet operating costs down 16% on pcp (hire days down 4%) * Repairs and Maintenance reducing * Insurance related repairs reducing * Relocation costs reducing significently * Focus for FY13 * Ongoin
Slide 35: Australian site changes
• Melbourne opened in December and consolidated sites. • New Cairns site opened last month consolidating sites. • Hobart expanded. 35
Slide 36: Australian fleet operating costs
• Australian Fleet operating costs are coming down. • Further cost savings are still expected in FY13. 36
Slide 37: Australian fleet size
• Similar to New Zealand fleet is being reduced in line with visitation. • 2008, 2009 and early 2010 indications were that Australia was not affected by the GFC. • The market dipped in 2010-2011. • As with New Zealand fleet reductions need to be managed to meet customer needs and future fleet requir
Slide 38: Maui product range
• The Platinum series has delivered a higher quality product with a significant reduction in build cost. • The Spirit series will be fully rotated out of Maui this year. • Maui positioning allows for products with a toilet and shower only and is currently only built on Volkswagen or Mercedes chassis
Slide 39: Maui fleet rotation
• The Spirit series has been rotated out of Maui. • The Forest will likely combine in category with the River. 39
Slide 40: Britz product range
• Building new products into Britz has rejuvenated the brand in all channels. • The rotation of old products will see the range reduce. • The Renegade has been a successful new product reinforcing the brand positioning and has assisted in lifting yield for the brand. 40
Slide 41: Britz 4WD fleet
• Britz in Australia also includes the 4WD fleet in which we are the market leader. 41
Slide 42: Backpacker and Explore More
• The Backpacker product has been growing as the value segment has grown over the past three years. • The Backpacker and Explore More brand and product is currently being reviewed. • A small van product that meets the market needs is still considered a core requirement for the thl range. 42
Slide 43: Fleet range
FLEET RANGE * Fleet range is reducing as the old models are rotated out * Clear positioning exists for three brands (four is questionable) * Clear sub-segments for four categories of fleet — Large, medium, small, 4WD *TRENZ (May) and ATE (June) will be launch point for next approach ent 43
Slide 44: Britz Navigator cost reduction
• The cost of the vehicles we produce is a focal point for the company. • This product is an example of the focus on reducing cost whilst developing a differentiated brand strategy. • The Britz Navigator reduced costs to a build price not seen in the business since 2006. 44
Slide 45: Cost out design process
• In 2009 we commenced the cost out design process. • Quality has improved and the focus has remained on ensuring the important touch points for the customer are maintained. • Beyond the 2012 version 3 Platinum we expect further reductions in 2013 from manufacturing efficiencies generated by the JV.
Slide 46: Motek vehicle sales strategy
• The vehicle sales strategy behind Motek was revealed at the Annual Meeting last year. • The strategy remains in place post the Manufacturing Joint Venture. 46
Slide 47: Motek sales site concept
• This is a mock up of a potential sales site positioned under the Motek and dealer branding. • Dealer acceptance of the concept has been very strong in Australia. • We have an opportunity to operate under a franchisee methodology. • New Zealand retail approach needs further development. • New and n
Slide 48: Vehicle Sales: New Zealand market share
VEHICLE SALES New Zealand Market Share Used Motorhomes New Motorhomes (private use) Sales volume 10/11 Sales volume 10/11 ™Motek ™Apollo ™Kea United ™ Pacific Horizon ™Kea/Coach craft‘ ™ Trail Lite / Road Craft ™ UCC ®Talvor ®Sunliner Winnebago “oan Cent 48
Slide 49: Vehicle Sales: Australia market share
VEHICLE SALES Australia Market Share thi Motorhomes market share in Australia in $m of new and near new units Used Motorhomes New Motorhomes (private use) Sales volume 10/11 Sales volume 10/11 3% = Motek = Apollo mkea = Other mWinnebago mJayco om Talvor | «= Other == Motek “ese tnt 49
Slide 50: Tourism businesses
• Waitomo is underperforming at a visitation level. • Retail is broadly on track with goals, F&B is growing but still one year behind plan • The building at $13m would have been $6m to replace without the additional facilities (which are delivering additional EBIT). • The building enabled an extensi
Slide 51: Online capability
• We continue to focus on the development of our online capability and tactical capacity. • The growth in the online business has slowed as the market has matured. • Customers are researching on the internet extensively and then making a choice about how they will transact. • Over the past 12 months
Slide 52: Customer proposition
• We have continued to improve the customer proposition and deliver to the various market segments. • New add on product offers will be launched this year at TRENZ and ATE. • We recently received a significant letter of endorsement from a substantial wholesale customer celebrating our position in th
Slide 53: Debt levels
• We consider the debt levels to be acceptable given the mobile nature of the majority of the assets in the business. • Debt in this business can be well controlled when required. • Relationships with both our banking partners is strong. • The Hamilton building will be marketed for sale this calenda
Slide 54: EBITDA and depreciation
• EBITDA is strong in the business and in times of concern we can drive debt down quickly. • We have had significant growth in EBITDA in the last year. • We have work to do to get the Depreciation number down to see that work convert to stronger EBIT results. 54
Slide 55: NTA relative to share price
• NTA remains high relative to share price. • We have continued to make a margin on sale of vehicles . • Earnings momentum is the focus to bridge the gap. 55
Slide 56: Depreciation drivers
• Depreciation increases have been driven by a combination of three factors: 1. Build cost increases 2. Increase in the number of larger (more expensive) vehicles 3. Increase in the fleet size • New Zealand and Australia depreciation is where the gains are expected. • Fleet flexibility will be key t
Slide 57: Financials: Balance sheet summary
FINANCIALS Balance sheet summary Dec-11 Rentals NZ Rentals AU Rentals USA Total Rentals Motek Tourism Group Group Support Total Business Debt Net Assets Dec-11 Tangible Assets Fleet Assets Other Fixed Assets Working Capital Intangible Assets Total Net Assets Debt Net Assets 39 091 104 1.06 23 0.23 2
Slide 58: USA growth opportunities
• With market share of roughly 7-9% there is an opportunity for growth. • Key considerations in order to grow: • Fleet sales need to continue at current levels or higher • Overheads (especially property) need to managed carefully as they are currently very low cost • Rental pricing needs to remain r
Slide 59: USA tourism outlook
• USA tourism growth expected to continue (albeit slowly). • Barack Obama released a new tourism strategy this year. • Exchange rate benefit is expected to remain for some time. 59
Slide 60: thl today
• thl today is very different to the past. • We have remained sound during some very difficult trading conditions. • We have continued to improve our strategy and customer positioning. • We have changed the way we operate internally. • We are continuing to improve the fleet flexibility. 60
Slide 61: Overview | Summary
OVERVIEW | SUMMARY Creating momentum key focus USA working well and has growth opportunities Manufacturing Joint Venture (RVMG) will add value and flexibility NZ and AU rentals have a plan for profit growth Tourism businesses still delivering good ROI however new markets (Asia) must be secured ent 6
Slide 62: Overview | Summary (continued)
OVERVIEW | SUMMARY ccontinuen) * Debt position stable and acceptable ¢ thi profit growth expected but not predicated on European recovery in the short term * Product, customer delivery and operational performance is on track ent 62
Slide 63: Thank you for attending the day
Thank you for attending the day. 63