Tourism Holdings Limited · NZX:THL
Tourism — FY2017 Earnings Presentation
43 slides from Tourism's earnings presentation, Aug 22, 2017
Slide 1: Growing Globally FY-2017 Full Year Results Presentation
GROWING GLOBALLY FY–2017 FULL YEAR RESULTS PRESENTATION: 22 AUGUST 2017
Slide 2: Disclaimer
Disclaimer • The information in this presentation, dated 22 August 2017, may contain forward-looking statements and projections. These reflect thl’s current expectations, based on what it thinks are reasonable assumptions. However, for any number of reasons, the future could be different and the ass
Slide 3: Important Note: El Monte Acquisition
Important Note El Monte Acquisition • The purchase of the El Monte RV Rental and Sales business in the USA was effective from 1 January 2017 and settled on 6 January 2017. • Throughout this presentation we have shown the impact of the El Monte acquisition, where appropriate, to aid the understanding
Slide 4: Our business is connecting people to unforgettable experiences
OUR BUSINESS IS CONNECTING PEOPLE TO UNFORGETTABLE EXPERIENCES IN UNIQUE AND REMARKABLE PLACES AROUND THE WORLD. In FY17 we have progressed our strategy to become truly global and position ourselves as the largest RV rental operator in the world. We have balanced growth in our core business with new
Slide 5: Financial Highlights
Financial Highlights Revenue Earnings before to interest and tax Net profit after tax $341M $47.7M $30.2M Up by 22% Up by 23% Up by 24% Return on average Earnings per funds employed1 share Full year dividend 14.3% 25.6c 21cps (76% imputed)2 Last year 15.1% Up by 20% Up from 19cps (50% imputed) Note
Slide 6: Trends
Trends REVENUE EBIT EBIT MARGIN 33 1.4% 48 15.5% 279 308 341 32 39 13.7% 13.9% 14.1% 228 237 23 10.1% FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 Excl El Monte El Monte El Monte Impact Group (including El Monte FY17) EBITDA NPAT GROUP ROFE 5 1 (Average Funds) 2.4% 88 16.7% 74 83 30 1
Slide 7: Financial Highlights
Financial Highlights • Growth across all operating divisions in operating currency. NZD $M FY17 FY16 VAR • Strong growth in EBIT from Rentals Operating revenue 340.8 278.9 61.9 NZ. Reflects flex-fleet and market growth. Earnings before interest 47.7 38.7 9.0 and tax • Road Bear (USA) EBIT up 6% in U
Slide 8: Key Achievements FY17
Key Achievements FY17 Progress against our FY17 theme of ‘deliver’ Organic growth Inorganic growth Mighway Delivered Delivered Model Progressed • Summer flex fleet in NZ and AU • El Monte acquisition completed. • NZ business well established, with successful. • Roadtrippers investment and JV over 50
Slide 9: Return On Funds Employed
Return On Funds Employed • Continued growth in ROFE for all RETURN ON AVERAGE FUNDS FY17 FY16 VAR operating business units. EMPLOYED • El Monte reduces overall ROFE due to half year of off-season earnings. Rentals NZ 18.3% 13.0% +5.3% Rentals Australia 11.8% 11.6% +0.2% Rentals USA – Road Bear 28.0%
Slide 10: Dividend
Dividend • Current dividend is fully imputed, Final Dividend FY17 Full Year Dividend due to available imputation credits. Ongoing dividends will return to a lower imputation rate, due to mix of earnings. 11 cents 21 cents • This represents a payout ratio of per share 100% imputed per share 76% imput
Slide 11: Capital Expenditure
Capital Expenditure Gross Capex $M Fleet Sale Proceeds $M Net Capex $M 200 200 60 175 175 50 150 150 40 125 125 100 100 30 75 75 20 50 50 10 25 25 0 0 0 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 Core Flex 1 El Monte Core Flex El Monte Core Flex El Monte • Gross CAPEX of $171M ($17M
Slide 12: Balance Sheet
Balance Sheet Net Debt Debt : EBITDA1 • Net debt has increased, due to the El Monte acquisition. • At 30 June, Net Debt was lower, and $176M 1.9X Debt:EBITDA higher, than the forecast ($185M, 2.0x) at the time of the interim results. last year last year • We continue to remain comfortable with the d
Slide 13: Funding
Funding • New $243M1 multicurrency syndicated facility in place with existing bankers ANZ and Westpac - and HSBC joining syndicate in June 2017. • Maturity of debt facilities is: • August 2018 $50M • February 2019 $135M • February 2021 $58M • Interest rate hedging in place for FY18, with average not
Slide 14: Divisional Review
Divisional Review 14
Slide 15: Divisional EBIT
Divisional EBIT Full Year 6 Months to June 6 Months to December $M FY17 FY16 VAR VAR % FY17 FY16 VAR VAR % FY17 FY16 VAR VAR % thl Rentals New Zealand 24.2 15.4 8.8 57% 20.5 15.4 5.1 33% 3.7 0.0 3.7 n/a Australia 7.8 6.8 1.0 16% 2.2 2.1 0.1 6% 5.6 4.7 0.9 19% USA - Road Bear 12.2 12.4 (0.2) (2%) 2.6
Slide 16: Rentals NZ
Rentals NZ Growing positively in all aspects • Very strong result, driven by increased flex fleet, improved yield and improved vehicle sales contribution. Full Year • Underpinned by strong rental demand NZD $M FY17 FY16 VAR % and a positive vehicle sales market. Rental income 80.7 68.4 12.3 18% • Li
Slide 17: Rentals Australia
Rentals Australia Small steps forward • 22% growth in AUD EBIT. Full Year NZD $M FY17 FY16 VAR % • Further progress in growing ROFE, but Rental income 58.0 55.9 2.1 4% still a work in progress. Sale of goods 13.2 12.4 0.8 6% • Successful introduction of summer flex- Costs (63.4) (61.5) (1.9) (3%) fl
Slide 18: Rentals USA – Road Bear
Rentals USA – Road Bear Still delivering Full Year Investing in resource NZD $M FY17 FY16 VAR % Rental income 29.6 27.9 1.7 6% • ROFE remains very strong at 28%. Sale of goods 45.9 42.3 3.6 9% • EBIT growth of 6% in USD. A Costs (63.3) (57.8) (5.5) (10%) stronger NZD:USD exchange rate EBIT 12.2 12.4
Slide 19: Rentals USA – El Monte
Rentals USA – El Monte A Good Beginning Full Year1 • Overall ahead of original expectations, mainly due NZD $M FY17 to benefit of higher vehicle sales volume and Rental income 17.4 margin. Sale of goods 16.9 • Vendor (Schork family) management has ensured a Costs (34.3) smooth transition. thl GM – M
Slide 20: El Monte Scorecard Update
El Monte Scorecard Update An update on the longer term goals we set in December 2016 Utilisation Goal: Increase utilisation Utilisation for H2 FY17 improved on pcp, though behind long-term goals. ROFE Goal: Achieve 19% ROFE by FY20 EBIT ahead of forecast. Funds employed on forecast. Synergies Goal:
Slide 21: Tourism
Tourism Waitomo strong, Kiwi Experience weak Full Year NZD $M FY17 FY16 VAR % • Waitomo achieved strong growth, Revenue 39.9 36.3 3.6 10% with visitor growth above total inbound visitor growth to NZ. Costs (29.2) (26.3) (2.9) (11%) Modest yield growth. EBIT 10.7 10.0 0.7 7% • Waitomo visitors - stro
Slide 22: Equity Investments
Equity Investments NZD $M FY17 FY16 VAR % Action Manufacturing 3.1 1.7 1.4 82% Just Go 0.5 0.3 0.2 67% Roadtrippers (0.9) (0.9) Total 2.7 2.0 0.7 35% Equity Investment Reporting Just go (49%) • These part-owned businesses are not • Result impacted by weaker GBP after Brexit, controlled by thl and ar
Slide 23: Group Support Services & Other
Group Support Services & Other • This segment includes Group Support NZD $M FY17 FY16 VAR % Services and Mighway. • The Mighway pre-tax loss for the year Revenue 0.6 0.3 0.3 100% was $1.9M (FY16 $1.3M). Costs (7.8) (6.2) (1.6) (26%) • Good progress with Mighway NZ, EBIT (7.2) (5.9) (1.3) (22%) growi
Slide 24: FY18 Focus
FY18 Focus 24
Slide 25: Strategic Imperatives
Strategic Imperatives Continue to build the base business Leverage the RV eco-system Innovate with technology Do so sustainably FY17: Full Year Results Presentation 25
Slide 26: Key Focus for FY18
Key Focus for FY18 Core Business Leverage growth opportunities, continue flex fleet & operational focus. Progress the plan to integrate the business, renew the fleet and proposition and lift El Monte ROFE. Complete USA pilot and assess the next phase. Grow the NZ customer base. Mighway Grow the owne
Slide 27: Sustainability
Sustainability • At the heart of the business is a responsible tourism operator. • For FY17, we are releasing our first annual sustainability report under GRI standards, which we encourage you to read. • Our sustainability pillars are: Protect Respect Grow • And our focal points for sustainability a
Slide 28: Outlook
Outlook 28
Slide 29: Visitor Forecasts
Visitor Forecasts A positive demand environment is forecast. New Zealand 4.8% annual growth in international visitors 2017-2023 Ministry of Business, Innovation and Employment Australia 5.8% annual growth in international visitors 2017-2027 Tourism Research Australia USA 3.3% annual growth in intern
Slide 30: Capital Expenditure FY18
Capital Expenditure FY18 Gross CAPEX $M Fleet Sales Proceeds Net CAPEX $M $M 200 160 59 171 126 112 45 40 73 92 61 62 81 30 12 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 forecast forecast forecast • Gross CAPEX for FY18 forecast at approximately $200M. Most of growth
Slide 31: Outlook and Guidance
Outlook and Guidance Macro-Environment Profit Guidance • The macro-environment for tourism remains • Long-term target is $50M NPAT by FY20. positive, particularly in New Zealand. • FY18 forecast in the range of $36M-$39M. • We are monitoring geo-political risks, particularly around the USA. • An upd
Slide 32: Corporate Governance
Corporate Governance • Have adopted NZX Corporate Governance Code early. • Board gender diversity: four female, two male directors. • Focus on gender diversity in the wider business. • Increased sustainability focus. • Risk focus includes cyber-security, data privacy and health & safety. Annual Meet
Slide 33: Supporting Analysis
Supporting Analysis 33
Slide 34: Bridge to December Forecast
Bridge to December Forecast NPAT NZD$M FY17 FORECAST VAR • Strong trading result for Rentals NZ lifted ‘existing business’ contribution. Existing Business at Dec 20161 32.1 29.2 2.9 • El Monte achieved improved vehicle sales contribution. Mighway USA (0.3) (0.2) (0.1) Roadtrippers USA (0.7) (0.4) (0
Slide 35: Income Statement Summary
Income Statement Summary Full Year 6 Months to June 6 Months to December $M FY17 FY16 Var Var % FY17 FY16 Var Var % FY17 FY16 Var Var % Revenue from services 226.2 188.8 37.4 20% 129.4 100.0 29.5 29% 96.8 88.8 8.0 9% Revenue from sale of goods 114.6 90.2 24.4 27% 65.4 45.3 20.1 44% 49.2 44.9 4.3 10%
Slide 36: Revenue
Revenue Full Year 6 Months to June 6 Months to December $M FY17 FY16 VAR VAR % FY17 FY16 VAR VAR % FY17 FY16 VAR VAR % thl Rentals - Rental Revenue New Zealand 80.7 68.4 12.3 18% 49.9 41.9 8.0 19% 30.8 26.5 4.3 16% Australia 58.0 55.9 2.1 4% 27.7 25.6 2.1 8% 30.3 30.3 0.0 0% USA - Road Bear 29.6 27.
Slide 37: Divisional Review
Divisional Review Year Ended 30 June 2017 Year Ended 30 June 2016 DIVISIONAL AVE FUNDS OPERATING DIVISIONAL AVE FUNDS OPERATING 1 $M REVENUE EBIT EMPLOYED CASHFLOW REVENUE EBIT EMPLOYED CASHFLOW* Rentals New Zealand 120.4 24.2 131.7 13.7 103.8 15.4 118.7 5.8 Rentals Australia 71.2 7.8 66.2 (7.7) 68.
Slide 38: EBIT Margin
EBIT Margin Full Year 6 Months to June 6 Months to December FY17 FY16 VAR FY17 FY16 VAR FY17 FY16 VAR THL Rentals New Zealand 20.1% 14.8% 5.2% 28.8% 25.2% 3.6% 7.5% 0.0% 7.5% Australia 11.0% 9.9% 1.1% 6.4% 6.5% (0.1%) 15.5% 12.9% 2.5% USA - Road Bear 16.2% 17.7% (1.5%) 8.0% 8.5% (0.5%) 22.6% 24.8% (
Slide 39: EBITDA
EBITDA Full Year 6 Months to June 6 Months to December $M FY17 FY16 Var Var % FY17 FY16 Var Var % FY17 FY16 Var Var % EBIT 47.7 38.7 9.0 23% 29.0 23.7 5.3 22% 18.7 15.0 3.7 25% Add back non-cash items: Amortisation 1.5 1.6 (0.1) 0.7 0.8 (0.1) 0.8 0.8 0.0 Depreciation 38.3 33.3 5.0 22.0 17.2 4.8 16.3
Slide 40: Balance Sheet
Balance Sheet As at As at $M JUN 17 JUN 16 VAR DEC 16 DEC 15 Var Equity 193.9 172.1 21.8 174.7 169.6 5.1 Non current liabilities 202.5 97.3 105.2 127.9 109.0 18.9 Current liabilities 73.6 64.4 9.2 61.8 49.1 12.7 Total source of funds 470.0 333.8 136.2 364.4 327.7 36.7 Intangible assets and goodwill
Slide 41: Funds Employed
Funds Employed Average Funds Year end Funds $M FY17 FY16 VAR JUN 17 JUN 16 VAR Rentals New Zealand 131.7 118.7 11% 122.2 116.3 5% Australia 66.2 58.2 14% 68.5 53.6 28% USA - Road Bear 43.7 45.0 (3%) 48.2 48.1 0% USA - El Monte 51.0 89.6 Total Rentals 292.5 221.9 32% 328.4 218.0 51% Tourism Group 26.
Slide 42: Gain on Vehicle Sales and Gross Profit
Gain on Vehicle Sales and Gross Profit Full Year 6 Months to June 6 Months to December $M FY17 FY16 Var Var % FY17 FY16 Var Var % FY17 FY16 Var Var % Gain on sales of motorhome fleet before selling costs 20.3 13.5 6.8 51% 13.2 7.0 6.2 88% 7.2 6.5 0.7 10% 1 Vehicle sales costs (warranty only) 0.8 0.4
Slide 43: Thank you
Thank you 43