Travelport Worldwide — Investor Presentation (May 2017)
20 slides from Travelport Worldwide's investor presentation, May 23, 2017
Slide 1: CFO presentation, May 23, 2017
May 23, 2017 Bernard Bot Executive Vice President and Chief Financial Officer
Slide 2: Forward-Looking Statements and Non-GAAP Financial Information
Related to Forward - Looking Statements Certain items in this presentation and in today’s discussion, including, but not limited to, matters relating to revenue, net income (loss) and earnings, and assumptions or projections regarding future events or future results, and percentages or calculations
Slide 3: Focused product strategy, deliver leading technology, winning in sales
Focused product strategy Deliver leading technology Winning in sales
Slide 4: Compelling financial growth story
…and Free Cash Flow $m 89 - 7 - 53 156 192 175 2012 2013 2014 2015 2016 2017-G Compelling financial growth story Consistent revenue growth $m 2,002 2,076 2,148 2,221 2,351 2,450 2012 2013 2014 2015 2016 2017-G Increase in Adjusted EBITDA $m 494 517 540 535 574 590 2012 2013 2014 2015 2016 2017-G Tur
Slide 5: Strategy driving our financial aspirations
Strategy driving our financial aspirations 5 1 Compared to the year 2016 Focused product strategy Winning in sales Deliver leading technology Total growth: c. $600m revenue and c. $150m Adjusted EBITDA by 2020 1 Higher Free Cash Flow: 75% of incremental Adjusted EBITDA converted to FCF Increase in s
Slide 6: 2020 targets
2016 base 2017 2016 – 2020 CAGR 2,351 3 – 5% Around 6% 2,230 Mid - single digit Around 7% eNett 150 >20% >25% 574 2 – 4% Around 6% 154 7 – 13% Double digits 192 (14) – (3)% Double digits 2020 targets 6 $m; percentage growth 2016 – 2017; percentage CAGR 2016 - 2020 Adjusted EBITDA Adjusted Net Income
Slide 7: Target solid revenue and profit growth
Target solid revenue and profit growth 7 Market growth 1.5 – 2.0x GDP Market share gains Growth of Beyond Air to >$1bn eNett >25% CAGR Higher relative growth of OTAs and eNett New products and services offset incentive pressure Operating leverage Positive impact from technology and business transfor
Slide 8: Invest in innovative products and services
Invest in innovative products and services Debt holders c. $700m cumulative Decrease in capital intensity to c. 6% of revenue by 2020 Absolute level of investment expected to stabilize >50% of total development spend in innovation 1 1 Includes Capital expenditures on property and equipment and Repay
Slide 9: Increase Free Cash Flow
FY 2020 target Increase Free Cash Flow 9 $m FY 2016 FY 2017 outlook Adjusted EBITDA 574 585 - 595m Interest payments (136) Down Tax payments (21) Up Customer loyalty payments (85) Up Changes in working capital/ other and pensions (7) Neutral Corporate and restructuring costs (27) c. (45) – (50) Net
Slide 10: Financial policy
Financial policy 10 Objectives Financial strength Strategic and financial flexibility Cost of capital Predictability and reliability Debt portfolio Optimise for interest expense, level of risk and flexibility Capital structure Target ~ 3x net debt/Adjusted EBITDA by 2018 Manage within 2.5 – 3.0x ran
Slide 11: Target ~3x net leverage by 2018
Target ~ 3x net leverage by 2018 Solid position, but opportunity to further improve 3.6x net debt/Adjusted EBITDA at the end of Q1 2017 – target ~3x B+ S&P and B2 Moody’s ratings – target BB S&P rating Retain optionality supporting lower interest margin Opportunity for value - creating business inve
Slide 12: Significant opportunity for returns to shareholders
Significant opportunity for returns to shareholders 12 Debt holders 2017 2018 2019 2020 Debt holders Equity holders 165 – 185 c. 300 Free Cash Flow – $m
Slide 13: Clear investment case
Clear investment case 13 Transaction - driven core business with high proportion of resilient, recurring revenues • Structural travel market growth • Market share gains through innovation • Platform business with exposure to higher growth digital commerce and payments markets Attractive growth prosp
Slide 14: Appendices
Travelport > Redefining travel commerce Appendices May 23, 2017
Slide 15: Reconciliations for Non-GAAP Measures
2016 2015 2014 2013 2012 2016 2015 2014 2013 2012 (in $ millions) Reconciliations for Non - GAAP Measures (in $ millions) The following table provides a reconciliation of net income (loss) to Adjusted Net Income (loss), to Adjusted Operating Income and to Adjusted EBITDA: Net income (loss) 15 20 91
Slide 16: Reconciliations for Non-GAAP Measures (continued)
2016 2015 2014 2013 2012 2016 2015 2014 2013 2012 (in $ millions) Reconciliations for Non - GAAP Measures (continued) (in $ millions) The following table provides a reconciliation of Net Debt: Term loans 2,236 2,303 2,347 2,403 1,656 Secured notes - - - - 225 Unsecured notes and Payment - In - Kind
Slide 17: 2017 guidance reconciliation notes
With respect to our full year 2017 guidance: Adjusted EBITDA guidance consists of Adjusted Net Income guidance excluding expected depreciation and amortization of propert y a nd equipment and expected amortization of customer loyalty payments of $240 million to $250 million, expected interest expens
Slide 18: Definitions
Definitions 18 Adjusted EBITDA is defined as Adjusted Net Income (Loss) excluding depreciation and amortization of property and equipment, amortization of customer loyalty payments, interest expense, net (excluding unrealized gains (losses) on interest rate derivative instruments), and related incom
Slide 19: Use of non-GAAP financial measures
We utilize non - GAAP (or adjusted) financial measures, including Adjusted EBITDA, Adjusted Operating Income (Loss), Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Share – diluted, to provide useful supplemental information to assist investors in understanding and assessing our perfor
Slide 20: Capital Expenditures and Net Debt measures
We use Capital Expenditures to determine our total cash spent on acquisition of property and equipment and cash repayment of cap ital lease obligation and other indebtedness. We believe this measure provides management and investors an understanding of total capital invested in the dev elo pment of
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