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Edited Transcript of FLT.AX earnings conference call or presentation 26-Feb-20 11:00pm GMT

Half Year 2020 Flight Centre Travel Group Ltd Earnings Call

Brisbane, Queensland Mar 24, 2020 (Thomson StreetEvents) -- Edited Transcript of Flight Centre Travel Group Ltd earnings conference call or presentation Wednesday, February 26, 2020 at 11:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Adam Campbell

Flight Centre Travel Group Limited - CFO

* Chris Galanty

Flight Centre Travel Group Limited - CEO of Corporate Business

* Graham F. Turner

Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director

* Haydn Long

Flight Centre Travel Group Limited - Investor & Media Relations Officer

* Melanie C. Waters-Ryan

Flight Centre Travel Group Limited - CEO of Leisure Business

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Conference Call Participants

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* Aryan Norozi

UBS Investment Bank, Research Division - Associate Analyst

* Bryan Raymond

Citigroup Inc, Research Division - VP & Analyst

* Grant Saligari

Crédit Suisse AG, Research Division - Head of the Consumer Staples, Discretionary Retail & Agriculture and Director

* John O'Shea

Ord Minnett Limited, Research Division - Senior Research Analyst

* Mark Wade

CLSA Limited, Research Division - Research Analyst

* Michael Simotas

Jefferies LLC, Research Division - Equity Analyst

* Peter Drew;Carter Bar Securities;Analyst

* Wei-Weng Chen

JP Morgan Chase & Co, Research Division - Research Analyst

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Presentation

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Operator [1]

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Thank you for standing by, and welcome to the Flight Centre Travel Group Half Year Results Conference Call. (Operator Instructions)

I would now like to hand the conference over to Mr. Haydn Long, Global Media and Investor Relations Manager. Please go ahead.

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Haydn Long, Flight Centre Travel Group Limited - Investor & Media Relations Officer [2]

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Thanks, Ashley. Good morning, everyone. Thanks for joining us today for our half year results call. Shortly, you'll hear from Skroo, our CEO; Adam Campbell, our CFO; Chris Galanty, who's traveled all the away from London, our recently appointed CEO of Global Corporate Business; and Mel Waters-Ryan, who's traveled all the way from Brisbane and is the CEO of our Global Leisure Business.

Skroo will start and finish things off, and I'll hand over to him now for a short overview.

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Graham F. Turner, Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director [3]

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All right. Thanks, Haydn, and welcome, everyone, to our half year release. Some of the highlights of this last year, we've produced a record TTV of $12.4 billion in the first 6 months. That's up about 11%. The reason was really good growth in Asia, the America -- North America and Mexico and EMEA, and 6% growth in Australia and New Zealand.

The underlying profit before tax is about $102 million, and it's slightly above our midpoint guidance that we last gave. So EMEA had a record profit, up 17%, despite Brexit, which most of you probably have heard about. In the corporate area, we've continued to outperform there, gaining market share in most key regions. And there's a lot of growth potential. North America, for example, had about a 24% increase in TTV.

We're growing -- we're still growing leisure market share, mainly through our emerging and lower-cost online ready-made packages area as well as things like independent contractors. And we're still struggling with translating that growth into bottom line profit. But you'll see a bit later in, probably, Mel's presentation of some of the strategies we're using to counter that.

Some of you will know, we've a new global structure and leadership in place, in our global team, we call it task force team, which is my team. There's now 8 of us -- well, 7, really. Dean, as we announced, is retiring at the end of June. And Charlene Leiss is taking over from him. So that the 7 of us is myself; Mel Waters-Ryan, CEO of Leisure, who's been around a long, long 33 years, I think; Chris Galanty, CEO of Corporate, who's based in London, he's been around with us 23 years.

Adam has been -- only been around 14 years, but he's learning the tricks of the trade early. Steve Norris is the new MD of EMEA, he's been with us for 18 years. Charlene, as I said before, she came on board with one of our early North American acquisitions from Boston called Garber, and that's about -- it was about 15 years ago. And James Kavanagh, who's one of our Irish imports, he's been with us here for 15 years. He -- we met up with another Irishman, Alan Joyce, the other day, and they had a hide-off, and James believes he won by about an inch. But anyway, so that's the team. The 7th of it's Dean, who I didn't mention because he's -- we no longer think of him because he's leaving. But he's still in place in North America. Mel might mention something about that later on.

So some of the highlights, and this is in the last 6 months. In U.K., we had Brexit, which I think lasted for about 3 years, but it's sort of over. There's obviously the trade wars, which has had a significant impact in some parts of the world. The Hong Kong unrest didn't help us in that part of the world. And certainly, from the American -- North American leisure market, the Dominican Republic has had a significant impact and still is having a bit of an impact there. And our consumer sentiment and the trading cycle in some reasonably key markets like Australian leisure, in particular, has -- it's been the lowest, for example, in Australia since the GFC. I didn't mention the coronavirus because that really didn't have an impact in that for the 6 months.

So I'll hand over to Adam now who can give us a feel of the financial results.

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Adam Campbell, Flight Centre Travel Group Limited - CFO [4]

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Okay. Thank you, Skroo. Look, as mentioned previously, TTV for the half of $12.4 billion, it was a record overall for us as a company. It was predominantly driven by 17% growth in our corporate businesses. Chris will talk to a little bit later, but our pipeline of new TTV is also very strong in corporate and does include our first-ever $1 billion clients who will start to transition to us over the coming months.

As you can see from the slide deck, this growth in corporate continues a 10-year trend of strong TTV growth, predominantly from the large corporate markets of the U.S., U.K., Europe and Asia. TTV growth in our leisure brands has also been positive with the Australian leisure growth of just over 8%, in particular, being well above outbound travel growth statistics. This increase in TTV was driven by our emerging leisure brands, our online brands in leisure and Travel Money across both Australia and New Zealand. Mel will talk to the contributions from and importance of our leisure brands shortly.

Our underlying PBT of $102.7 million was slightly above the midpoint of first half guidance which, in turn, as expected, was down on last year's first half result. As indicated in our market update earlier this March, we've made a number of adjustments to underlying profit, the most significant of which was a noncash impairment charge to our touring business following ongoing underperformance.

We've announced an interim dividend of $0.40 per share, which at the lower end of our policy of 50% to 60% of underlying net profit after tax for the full year. Paying in at the lower end of that dividend range reflects the fact that it is an interim dividend. And the obvious uncertainty in relation to the impact that COVID-19 or coronavirus may might have on our second half results. And that uncertainty is also reflected in the wide range that we're providing for full year guidance and as Skroo will talk to shortly.

Moving back to current year results at a high level, our segments have performed in line with the expectations outlined at the AGM in October. And I'll talk to each segment individually shortly. Cost margin continues to reduce at a group level, but probably not reducing at a rate that I'd be looking for given the increased contributions from lower revenue margin businesses such as FCM, our online leisure brands and Travel Money. I'll talk specifically to costs shortly, but for now, we'll highlight that the growth in the lower-margin businesses has also been the main contributor to our revenue margin dropping from 13.1% to 12.5% over the last 12 months.

We've included a slide that breaks down the impact of FX, acquisitions and one-off items to give better clarity to overall movements in key cost lines. And you'll see that the underlying increase in these costs was around 4.5%. The increase in sales and marketing spend is due to increased advertising and marketing activity, primarily for our online brands in Australia as well as the new TV campaign that we undertook in Canada. Increased consulting payments to our growing independent agent network and ongoing consulting activity in relation to a number of IT, leisure and wholesale projects that Mel will talk to contributed to the increase in other expenses.

Other than movements arising from the adoption of the new leasing standard, which did have a little over $2 million impact to profit for the half that we've stripped out, other than the gross-up movements attached to that standard, our balance sheet and our cash flow statement are consistent with first half seasonality. And as an example of that seasonality, our total cash balance at 31 December of $835 million has increased to $1.2 billion by 31 January, in line with those normal trading patterns. And that equates to a positive net debt position of $113 million at the end of January compared to the very small net debt position we had at the half year.

To finish on the results section, I'll just talk briefly on each of our geographical segments. The ANZ segment has been -- has seen solid TTV growth of 6% for the half. And that's largely the result of growth in leisure in New Zealand, our emerging leisure brands in Australia and Travel Money across both countries. Our corporate brands in both Australia and New Zealand have had more modest TTV growth over the period in somewhat subdued trading conditions. Whilst the in-store gross margins for Flight Centre brand have now stabilized, as we indicated at the AGM, the impact of reduced TTV growth in our store network has impacted override revenue margins.

Cost growth for ANZ includes the $5 million impact from the EBA that we entered into back in October of last year, $7 million for the Bentours supplier collapse and $9 million of cost contributions from Ignite, which is basically their expenses for the period subsequent to us consolidating them into our results. So if you exclude those one-off items, cost grew by about 4%, including the additional marketing and advertising for our online businesses that I spoke to earlier.

As noted at the AGM, the Americas leisure business has been impacted by safety concerns in the Dominican Republic. But the corporate brands across both the U.S. and Canada have again performed strongly, with corporate top line growth in local currency in the U.S. of just under 20% and in Canada of 12%. Although PBT is down half-on-half, prior to the impact of coronavirus, we were still expecting full year profit growth for the Americas region.

Similarly throughout EMEA, organic corporate growth in the U.K., Europe, UAE and South Africa has again been strong and complemented by the contributions of FCM France and Switzerland, which contributed around AUD 200 million to TTV for the half. In the U.K., trading conditions were impacted by Brexit, but a strong focus on cost management meant that PBT was only slightly down on prior year. And South Africa continues to perform strongly both -- across both its leisure and its corporate brands.

Within Asia, the social unrest in Hong Kong has certainly had an impact on the business. But overall, for the half, we did see solid TTV growth and similar profitability to the prior corresponding period. That segment clearly will be impacted significantly throughout the second half.

Finally, our underlying profit in the other segment has been impacted, again, as we flagged at the AGM, by increase in net interest expense, underperformance in the touring business and also consulting costs predominantly associated with the global technology review and transformation project that Mel will talk to shortly.

That's probably enough looking backwards for the time being. I'll now hand over to Chris to discuss our corporate strategy.

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Chris Galanty, Flight Centre Travel Group Limited - CEO of Corporate Business [5]

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Okay. Thanks, Adam. Well, I'll take you through our corporate business now. First of all is the business overview, and I'll start with our unique approach to how we approach the markets like from The Travel Group. So we're the only large TMC who approach the market with 2 brands. And this is very different. Nobody else does it. And we do it because we think it's critical to win in the marketplace. And I'll come on to that as a separate slide shortly.

We're very much a people company, have been since we were founded, but we're also an innovator in technology now. And although there are some tech-only players who've entered the business travel market and of, course, we have the majority of the legacy TMCs, we view ourselves very differently. We very much believe the key to winning is both blending technology and people and having a very different product offering in the large market FCM space and the SME start-up to medium enterprise Corporate Traveler space. And I'll focus on that.

We also are and we're very proud to be one of the few global TMCs who genuinely have the capability to win and manage large enterprise global accounts. So although a lot of our competitors present themselves as global TMCs, we're one of the very, very few who actually can live up to that.

Content is critical for our customers. And with the increasing fragmentation of content across the world, both air and land, we put a lot of time and effort into and investment into making sure that our customers have the widest choice of appropriate air and land content. We negotiate that globally, and we make sure we distribute that both globally and locally for our customers online and offline.

And for various reasons I'll touch on, we really believe that, yes, we're very well placed to continue growing. We are growing very rapidly, but to continue growing in what is a large but very fragmented global marketplace.

So this is really just showing the addressable market. It's a very large market. So corporate travel is estimated around USD 1.5 trillion globally. And despite the fact that we're one of the largest, we think, fourth-largest TMC in the world, we have a less than 1% market share of this $1.5 trillion addressable market. So a very large market. We're one of the biggest players, but even we have less than 1%.

And this slide shows the geographic spread of the marketplace. And the great news for us is that we are present in equity in most of the largest travel -- business travel markets in the world. And the ones where we're not present in equity, we have very strong partners. And over the coming years, I suspect we will be increasing our equity presence to some more of those markets, but we're already in most of the biggest ones.

So our 2-brand approach, I do want to focus on this because I think it is what makes us different. And I think it's one of the key reasons we're not just winning today, but have been winning over the last decade. And that's that we, unlike everybody else, did not approach the market with one brand. And we did that for a very simple reason, that the $1.5 trillion market is made up of 2 very distinct customer types. There's large customers from enterprise, which are truly global, to even just large national customers who require a very different approach to SMEs, start-up to medium enterprise customers. And where everybody else approached them with one brand with one customer value proposition, often, believe or not, with one product offering, we very much did the opposite.

So we believe that if you're spending $50 million or $100 million a year in either one market or in -- quite often, in multiple markets, the type of products you need, the type of offering you need, the type of customer experience you need is very different, very different and often oppose the -- diametrically opposed to spending, say, $200,000 or $500,000 a year, typically in one market.

The level of sophistication, level of data, the level of customer insights, the level of procurement involvement, duty of care, availability in different marketplaces, distribution requirements are very different. And therefore, we tailor our marketing messages. We tailor our brand look and feel. We tailor the language we use. We tailor the sort of people we employ to work on the account, the level of sophistication required, particularly account management. We also tailor our product range. We make sure the product market fit is suited to each of those 2 customer points.

Corporate Traveler customers typically want faster implementation, often immediate. They want a much more simplified booking process and expense process. They don't require the same level of aggregation that FCM customers use. And we really reckon that what happens with most of our competitors is invariably, even though they do genuinely care about the SME segment, it's often the most profitable, they find it very, very difficult to focus on them because when a $100 million customer says, I need this and I need it tomorrow, all resources, quite understandably, get focused on that customer. And the customers who lose out are the SMEs, which with our structure, we have separate management teams, we have separate investment budgets who can simultaneously focus on the 2 customer types. Again, it sounds like a basic point, but we think it is -- well, we know it's unique and we think it's fundamental to why we are successful.

So the next slide shows how we segment the market, there's many different ways we do it, obviously, from a marketing perspective, industry types and various other categories. But here's a very basic way that we do it. We use that pyramid to divide up the marketplace based on size and, therefore, requirements of customers.

At the top are what we call enterprise customers, so these are the truly global corporations, often Fortune 100 companies who have a large global spend. We roughly categorize this as the USD 100 million spend, but in multiple strong key markets. So typically, they have a large presence in the U.S. That's almost universal, but they simultaneously may have a large offering in France, in India, in China, in the U.K. and Germany and Australia. So they have multiple centers of often decision-making, they have multiple centers of large spend and require a very strong product and management presence across the world. Very, very few TMCs can genuinely cater, can genuinely win, can genuinely retain these customers. And we're one of them, we're proud to say. Now FCM has definitely broken into this enterprise space.

We then have global customers, which are -- again, which typically save USD 50 million plus. And again, they have their global business with multiple operating countries. So again, they could be operating in many countries across the world, 30, 40 markets, but not with huge centers of spend as enterprise customers. They typically are larger in 1, maybe 2 countries across the world, but they are global.

We then have regional customers, and this is really where FCM originally grew up a decade ago -- a decade ago plus, with those large customers who are typically strong in one market. That market may be Australia, it may be U.S., may be U.K., and then have offshoots or other countries around the world where customers are traveling from, but typically, it all stands around one large market. It also could here, for example, be a government account, which is obviously located in one state or country.

And that's where FCM operates solely. We then have this purple layer, which is really where the majority of FCM customers are around the world and where a Corporate Traveler can operate as well. The upper end of Corporate Traveler is a small percentage of Corporate Traveler customers, but nevertheless, important to the brand itself. And this is really $2 million to $10 million spend, and we have many, many of these customers around the world. And what generally define these from the tier above is the local thinking. They're very much focused on local markets. So although they may have a small number of bookers, travelers, transactions happening in other markets, their thinking is very much around the market they operate in, be that China, France, U.S., Canada, Australia, it doesn't matter. They really care, and all their interest, all their attention is on the local markets. And we often have dedicated teams and people working with these non-global customers. And again, this is the upper end of Corporate Traveller and the majority of FCM customers.

We then have the bottom of the pyramid, which is the vast number of Corporate Traveller customers. This is the Corporate Traveller sweet spot, sub-USD 2 million spend, very much local market, very much simpler travel program requirements, lots of customers. This makes up the majority of that $1.5 trillion spend in these SMEs. The customers, many of them will not view themselves as SMEs. And SME means, to us, start-up to medium enterprise, but they have an SME travel requirement even if they view themselves as actually larger companies in what they do. And again, very high touch, highly personalized, but also very tech and traveler-led as well. So this is the majority of the CT business. So again, this approach is important because it means we can very much tailor what we offer as a flight and travel group to the customers depending on which brands they work with.

The next slide, our global footprint, and you can see here that we are a truly global business. We have equity across the world. And we have regional head offices in each region with very strong presence in all of the major corporate travel marketplaces. And the ones where we don't have equity, we have very, very strong partners who are deeply integrated in our business, so who can, therefore, ensure -- we can, therefore, ensure that we give a consistent customer experience across the world. And you will see that we are obviously adding countries in France and Switzerland with the latest full acquisition we made last year, which has really strengthened us in the European region and helped with our global customers. But again, this shows the spread of [exit]. We do have it. It's very important to how we deliver to our customers.

Focusing on FCM sales on the next slide. This is really important to us because we are not a roll-up TMC. We're not a TMC who's bought multiple independent companies across the world and sat our brand on them and pretended that we are a global company. We're very much an organically growing business. Yes, we have some original acquisitions, and we make a few strategic acquisitions every now and then. But fundamentally, we grow in FCM through retaining our customers, and they typically sign 3- to 5-year contracts. And we like to win them certainly for at least 2 cycles of that and winning new business. So new business is very important to us. And we believe we have the best sales machine and marketing machine in the industry in large markets.

And you can see this slide that every year, we increase the amount of signed business. Now typically, this business will not fully trade in the year 1 because it takes some time to implement, but it would obviously fully trade in year 2. And 2020 is again a record year for us. We're very excited about how the performance is going up until the end of January when we're almost at USD 1 billion of signed business, $940 million, which is significantly ahead of this time last year. And we are well on track to smash through our target of $1.2 billion, where -- we should comfortably beat that. And the good news is that not only we're winning larger customers, but the geographic spread of those wins is, again, truly global. And you can see those substates. We're not giving names, but you can see the geographic spread: the top 2, U.S.; we have Germany, France and 2 Asian businesses. So long gone are the days where most of the big wins just come out of Australia, U.S. and U.K. So very much a varied win across the board. And the good news is, we are winning more than ever.

So to touch on some brand priorities. I'll start with Corporate Traveller. Again, a consistent SME-only focus, we're retaining that. Hyper investment in sales and marketing, very important for us that we out -- we spend more than our competitors on sales and marketing to keep winning market share, and that's going very well. Really exciting for us, the launch of what we're calling DBX. It's a project name for digital booking experience. We're not going to rebuild the brands today, but it is a new mobile-first platform that we're launching in 3 markets initially, U.S., Canada and the U.K. And this is the biggest innovation in technology in the history of Corporate Traveller's brand.

So what we're doing is bringing to market completely new, cutting-edge, microservices-based technology that uses artificial intelligence to give very much a traveler-first approach, a mobile-first, traveler-first approach that gives access and aggregates a wide range of content in a very simple user experience, but also gives bookers and managers great insights and control of their travel policy. We believe it's the best technology that will be available in the marketplace. It's certainly the newest. And this is not a vaporware presentation. It's currently in beta testing with customers in the U.S. today. So we're very excited about that. I'll touch on that in a moment.

We're going to carry on investing in artificial intelligence and robotics. People will very much remain the heart of Corporate Traveller, but we also -- we often see them as superhumans, using technology behind the scenes, artificial intelligence, robotics to make our people even more productive and giving an even better customer experience. So that's a great way that we blend technology. Every single booking we make goes through an artificial intelligence layer, whether it's booked online or offline.

And again, widest choice of content, very much -- very important for CT customers that they know they're getting the best airfare, the most appropriate airfare, hotel transfer or any other type of land arrangements with their booking.

So just very quickly, the message within Corporate Traveller is care uplifted. Our people have always cared for our customers. Through the use of new technology, we're uplifting that care to make sure that we really blend cutting-edge technology with our people. And we think that is very much the winning formula in the marketplace. And again, launching DBX to make sure it's mobile first, simple platform, which has personalization and can aggregate content. That's being launched this year. And again, the iPhone there shows very much traveler-centric.

With FCM, key priorities, again, to continue -- or actually to increase investment in sales and account management teams. We are winning record amounts of business. As I said earlier, we need to make sure we are working very closely with those customers, particularly large global ones, to get them to resign for at least 2, hopefully 3, maybe even 4 cycles. And that's making sure that we really have strategic insights as well as great service in their travel program.

Global rebrand. We are re-branding FCM. I'm afraid I can't show you any of that today. It's being launched to media and customers and staff in April. But this is really going to reflect what the new FCM means. We are an enterprise TMC. We are very much a technology innovator. And we're going to be bringing to market a new brand, which reflects why we believe we are winning on the value propositions that we bring to our customers. We're very excited about that.

Again, increasing investments in this Corporate Traveler in market-leading technology products. This is -- one of the reasons we are winning is that our approach to technology is viewed very favorably with existing and new customers, making sure that we have great tech with a best-in-region booking capability, which is one of the reasons we're winning, but also consistent global data analytics. And I think that this is not something that's going to go away. This is a constant and continued investment to make sure our tech is one of the reasons we keep winning.

Again, a major investment that's been ongoing into this year is an upgrade to our data insights. We very much launched a new analytics platform. A lot of work is behind the scenes to make sure, as the industry is becoming more fragmented, that we can really give customers excellent timely data so they -- that we can analyze with them and they can analyze themselves their travel program. And again, using AI and robotics to make sure we're more productive across the business. And the widest choice of content applied in FCM as well. So not just NBC, which you probably heard a lot about with airlines, but also all the different ways customers can book land and transportation. It's very important we bring those online and offline to our customers.

And the next slide just sums it up really. We have our FCM Labs at the bottom of the slide, which is our innovation tech hubs. We have it in Barcelona, in Bangkok, in Boston, in Australia. Really -- some really fantastic new product management and engineering happening there that's bringing to life a lot of the innovation.

And you can see across this slide, it starts with the rebrand, but it's also about solution design for customers, automation, quality control and new travel world technology suite, which we're developing right now with customers, all backed up with intelligent data platform, so bringing all those analytics to life at FCM.

On the next slide, just briefly, just an example, it's actually a local example in Australia, Uber for Business. We are the launch customer bringing Uber for Business to our FCM and CT customers. And this simply means that they -- when they use Uber, which many of our customers do, they can go to Uber app and book. And unlike all of our competitors, that is fully integrated in -- with FCM or Corporate Traveler. So we have their profiles in Uber, which means that their duty of care is captured in the program, their expense management is captured in the program. So it's a completely seamless experience for them. And I use this example, this Australia one, but actually, this is something we're doing across the world with airlines, with transportation, with hotels to make sure we find innovative ways to get our content to our customers. So that's just a brief overview, really, of why we believe we are winning today and why we will keep on winning into the future.

So the summary thing, I think, to remember is our unique 2-brand approach. Very much belief in both brands, it's a combination of people and technology, that means we'll keep winning. And investment -- the market-leading investment in sales and marketing for both brands. And again, although we're the largest and one of the fastest-growing travel management companies in the world, we still have less than 1% market share, that $1.5 trillion U.S. market.

So that's it from corporate, and I think I'll hand over to Mel now for leisure.

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Melanie C. Waters-Ryan, Flight Centre Travel Group Limited - CEO of Leisure Business [6]

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Thanks, Chris. That was a good detailed overview of the corporate business, which I don't think we've had to that extent before. So hi, everyone. First of all, I thought I'd just go through a snapshot of what currently makes up our leisure business throughout the globe. And despite the current results, it's a large business with many assets. And I think it's also important to remember that the leisure travel industry is also a growth business globally, both on and offline. And I think that's important to note.

So just that snapshot. Leisure is, in fact, our largest business sector globally in TTV terms. At the half year, I think we'll hit around about $6.7 billion. It's also we have large-scale mass offerings in Australia, New Zealand and South Africa with leading market share with the Flight Centre brand and also a solid premium business under our Travel Associates brand. We have smaller offerings than in the rest of the world.

It's also important to note we now have omni or multichannel offerings with a diverse range of brands and models, including community stores, the traditional red shop on the corner that everyone knows it for, but just as importantly now through our flagship locations, online, contact centers, events, home-based and ready-made model. And we're growing share rapidly through some of these new and emerging models. As I mentioned previously, TTV is at a record level, but unfortunately, that growth is not translating to profit in the current trading cycle.

So in the context of our 7%-10%-2% goals, which we stated at a group level a few years ago, we are very much at center -- front and center of the leisure business as well. And as I mentioned, we are achieving top line growth. I think at the half, we're hitting about 6.5% aggregated growth globally in leisure. Obviously, corporate is a lot higher, but that's in line with expectations. And the growth is happening in most places, although it is challenged in some of our businesses. And I've got specifically some of where the growth is coming from there. I won't go through it in detail now. But interesting to note, and I'll call out the last line, which is our strongest growth is actually in the e-commerce segment, where we will hit a record $880 million in online leisure sales during the first half, and we hope to get well over $2 billion at the end of the year. And the following slide just shows where that leisure e-commerce business is coming from, in both stand-alone brands and with multichannel offerings in Flight Centre.

There is no doubt, however, there are current challenges in our leisure business, and that top line growth is not translating to bottom line profit growth; in fact, it's the reverse. And I think, just to point out some of the challenges that we're currently facing, number one is the lack of scale in our emerging businesses. They're meaningfully becoming quite a contributor to our top line, but they have not reached the scale yet to contribute to the bottom line as aggressively.

There's also been, over the last few years, which I know we've spoken to you about is lots of internal disruption: system changes, new wage models, brand rationalization, productivity programs, and we have not yet had the stable environment to deliver the planned outcomes from those initiatives in light of the suppressed demand and all of that upheaval. We're obviously also in a poor trading cycle with low consumer confidence in many markets. And then we have the Dominican Republic issues in America. And now, of course, we're being hit with the coronavirus. All of this has led to underperformance in our leisure businesses, but particularly in the Flight Centre brand in Australia and Canada and some other minor brands throughout the globe.

So we are, of course, proactively addressing these challenges. And just to touch on that, currently, we have 2 longer-term reviews underway, both here in Australia and in North America, where we are evaluating all current leisure businesses and recent moves to cement and refine choices as to our winning moves over the next 5 to 10 years. We're really looking at materiality of businesses, return on invested capital, net margin potential and growth capability to determine which of the choices we need to double-down on or make for the foreseeable future.

We have also a new and upgraded transformation office in place. As you know, we've had a transformation program going for a few years. But this much more heavily resourced transformation office is now because we're now focusing on large businesses like the Australian leisure business. And we've upped the ante on process, discipline, accountability and reporting with a real focus on cash value, either through revenue increase or cost benefit. Working with McKinsey here in Australia has been very beneficial to that process.

And we're building on the previous work that's already been done over the last few years. And we have done a significant amount in deploying and taking the initiatives to help shape our future strategic choices, things like our digital upgrades, Flight Centre brand 2.0 program and investing in new travel models.

Over the page is some of the key foci to date that we've had in the leisure. I won't go on to that, but I'm going to call out some of the initiatives that we've been working on that have delivered pleasing results that we can now materially build upon. Just to give you an idea of some of the things that we think will allow us to win in leisure in the future. I'll just go through these one at a time.

The first one is we have made a foray into stand-alone online brands. You would remember a couple of years ago, we did the Aunt Betty start-up. We've also bought BYOjet and StudentUniverse, I think, about 3 years ago now, 3 or 4 years ago. We did that because we wanted to move into the online channel and get much better digital capability. And BYO and Aunt Betty are now leveraged heavily in the metasearch world, which is one of the fastest growth segments in the industry.

So what has happened? Well, it delivered strong top and bottom line growth with those 2 businesses, circa 60% growth in the first half of this year and 90% profit growth. Again, as I said, they're still small and not delivering to scale, but we're certainly very pleased with those results. And StudentUniverse, which we also built, which is our global -- sorry, bought, which is our global online youth brand focused on student and youth flights. At the first half, I think it's up about 30% globally and now profitable in all markets that we operate in. And we only started it up in the Australian market, I think, July last year we launched. And we're expecting to do $60 million in TTV for this year, which was well above our initial expectations, and StudentUniverse is having a record year. So our stand-alone online brands, we are very pleased with moving into that.

We've also been very expansive with our multichannel offering in our Flight Centre brands, primarily in Australia, New Zealand, South Africa and Canada. Our objective here was to offer greater choice for our customers. And clearly, the Flight Centre brand is resonating with our customers in this channel. We are again experiencing rapid growth in the online channel, up about 54% at the half in Australia. And I think South Africa had similar growth, if not more. New Zealand stalled a little bit for now, but it's definitely growing. What's great between these online brands and the multichannel offering is that we can now leverage the different plays in e-commerce across the group. So for example, StudentUniverse and BYO doing very well with ancillary sales, and we can now move that capability across into the flightcenterbrand.com (sic) [flightcentre.com]

We've also had moved into other new models, which I know we've spoken to you about in the past, such as the home-based model. And we've both had organic start-ups in certain countries and M&A activity in countries like Australia with the purchase of Travel Partners and in New Zealand with Travel Managers. And again, we've experienced strong growth trends, again, off a small base. But we believe this segment will be a huge part of our future and, again, allows us to leverage a lot of our core capabilities into other B2B offerings. The most recent model was our 100% ownership of Ignite, which I think only happened in December. We've, of course, had an investment in that business over the last few years.

I've got over the page just some specifics on what we're calling the ready-made model. It's growing rapidly as a category overall, and we expect to get about $250 million full year TTV out of this highly productive model. What's great, just you may remember, we got rid of the brand called Cruiseabout about 18 months ago. Within 2 years, MyCruise, which is one division of this business, will deliver the same TTV at a much higher profit level than Cruiseabout ever did. So a much better model selling that cruise product. We're also now leveraging this product across our Flight Centre brand. And you're seeing a new range of MyHolidays products, including MyCruise, will be distributed through the vast network of Flight Centre stores and online.

The final area that we've done ahead of foray into recently was we'll call it the leisure B2B growth. So this is a little bit like the home-based where we are using our product and tech capability and allowing non-Flight Centre agents to use that, affiliate members, franchisees, et cetera, although our franchise is currently limited to our Travel Associates brand here. Again, this is to leverage things we already do and provide capability for non-Flight Centre Travel Group B2C brand. We also launched just recently a soft launch of a B2B bedbank called Travel Junction just at World Travel Market late last year. And again, strong growth, albeit a small basis. So these forays into new models have absolutely delivered on expectations, and we're now set to ramp those up and to move some of these models into our older and more traditional brands.

To help that transformation process, our transformation program has now formed 2 speeds. Speed 1 is very much focused on operational effectiveness. And as I mentioned previously, we've ramped up the transformation office and resourced it as we now focus our attention on the large, particularly Australian leisure business. And it is very much looking at network optimization, further work costs, marketing effectiveness, productivity. It's a very valid focus, as I said, on delivering cash value, all about making us better, faster and cheaper.

The Speed 2 transformation work is really where we're focused on the growth horizons of the future and where we can move our leisure business to where the value now is in the industry, and very much about fast-tracking the growth of those winning models and new opportunities and maybe others that we don't already have in our camp. What's been interesting in this review is most of the assets we have are there to take us into the future. This process on Speed 2 work is still very much underway, and I can't give you the complete picture of what we are finalizing with our winning choices for the next 5 to 10 years. It's underway both here in Australia and North America, and then we'll turn our attention to parts of the rest of the world, including our at destination businesses.

But our objective from this process is to end up with a rebalanced leisure portfolio and a return to our 2% net margin, which will take us in leisure a little bit longer at a total level than we initially had envisaged, but certainly, in the next few years would be an expectation. So that's in a nutshell, just at a high level, where we're at with leisure. When we see you next time, we'll give you a bit more detail on the outcomes of those strategic reviews.

And finally, I thought I'd just update our global technology transformation program, which is across leisure, corporate and the newly formed shared services or about-to-be-formed shared services division. We did speak about this in the last roadshow where we've engaged with Hudson Crossing, a technology travel specialist who we've worked with in the past. And that review is being finalized. The recommendations have been agreed and are now about to be implemented, and we have a massive change management program.

Along with the corporate and leisure and at destination or supply business line structures, Chris is obviously the CEO of our Corporate division, and I'm the CEO of our Leisure and Supply business, we're splitting our technology into those 3 lines of business with their own Chief Product Officers and Chief Technology Officers to recognize the important investment that you heard about from Chris that we're making in both corporate travel and with me in leisure travel to help us realize our growth ambitions and our winning aspirations for the future.

We're also implementing a discipline on product management, not project management but product management and agile development. And as I mentioned, we'll be implementing a globalized shared services model for core infrastructure networks, compliance, et cetera, that will service both the corporate and the leisure and also the supply business. So we're very pleased with the progress on that technology transformation, and the next 12 months will see us implement most of these recommendations.

So thank you very much for listening to a bit of an update on leisure. I'll be happy to take questions, and I'd like to say thank you. And I'll now hand over to Skroo. Thanks very much.

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Graham F. Turner, Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director [7]

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Thanks, Mel, and thanks, Chris. I'm just really exhausted now, but we're just going on with the outlook for this year. And obviously, as you heard before, we're tracking in line with our most recent guidance after December. And we believe when the trading cycle improves, we're in a good place to capitalize on things. And obviously, the corporate businesses have been delivering consistent, sustainable growth for some time now. And we expect that to continue, certainly, when things normalize. We certainly have an ongoing focus on improving leisure profits and with the good TTV growth we've got, making sure we can translate onto the bottom line, as you heard with Mel.

And obviously, the elephant in the room is the impact of the coronavirus. And we'll give you a few insights of where we think -- there's no doubt that the virus is affecting global travel patterns at the moment, particularly in the corporate sector, in various ways. I think you've already heard Flight Centre's Greater China and Singapore corporate businesses, which are about 2%, 2.5% of our group TTV and usually would deliver double-digit -- past double-digit, $12 million profit or so, and that's going to be significantly affected.

There's also reduced activity from global clients -- global corporate clients, and this relates to travel policies and companies using the opportunity to save money on travel and other expenses like that. Obviously, travel to China, most companies have stopped that as well, even though China looks like it might be getting under some level of control. In leisure, people -- some leisure customers are obviously reviewing or delaying or canceling their travel arrangements. We've seen some downturn in demand and some cancellations. It's still very early days on that, depending on the country that we're in.

The next slide will give you a bit of an impact -- a bit of an indication, I want to go through this, but Haydn has given us those 4 areas. China and Singapore businesses have been obviously significantly affected. The global corporate business, a fair bit of that has to do with the traveling -- company travel policies in terms of, particularly, the higher risk -- what they believe is the higher-risk destinations. The in-destination businesses, quite a few of these are based in Southeast Asia. So -- and they have a reasonable Chinese market there. And obviously, global leisure, generally, we've got pretty good alternatives here. And you'll see later on, there's some fantastic prices going on, particularly like out of Australia to -- and this is just in the last few days. So there's no doubt, that's going to stimulate a lot of travel, particularly to North America and probably Europe as well.

So our guidance has been amended to reflect the current uncertainty. At the moment, it was $310 million to $350 million underlying PBT, and that was predicated on conditions stabilizing, improving late in the first half and early in the second half.

Now it's impossible to really quantify this accurately or reliably because of the coronavirus impact, but there's no doubt it will lead to some subdued activity through, particularly the next couple of months, but probably through the end of this financial year.

So we've amended the guidance to an underlying PBT between $240 million to $300 million, and the bottom of the range is based on current conditions continuing through to year-end, top of the range based on some recovery. And what we saw with SARS was that the activity picks up as soon as the impact, the initial impact is over. So we really don't have a one right answer, but that's our best estimation at the time.

So we believe that we're well placed to weather the challenges posed by this coronavirus. We've got a healthy cash position. I think end of January, we had $1.2 billion in cash in the company and relatively low debt. So I think it's, for customers, their total peace of mind. We've got the scale and diversity through those -- the countries that we operate in, both in leisure and in corporate to be able to switch clients to areas that are not significantly impacted. And you will see our marketing ramp up over the next few months to promote these destinations, particularly in leisure.

And there's some experience -- there is some of our experience from the SARS in financial year 2003, which -- the coronavirus may have a similar pattern and it may not. But Haydn later on has got a really complicated slide that I'll show you, and anyone who can understand exactly what it is within a minute will get some sort of prize.

And what we found with SARS is that it contributed to 4- to 5-month slowdown in outbound travel. This is out of Australia. But it was exacerbated, of course, by the unrest in the Middle East when U.S. invaded Iraq in the March of that year. But it was followed by significant concerted rebound. So that's basically pent-up demand, and you'll see that in Haydn's slide, which is the next one with 3 lines. There's 2 red ones and 1 blue one.

Haydn is going to tell you what that actually means very quickly.

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Haydn Long, Flight Centre Travel Group Limited - Investor & Media Relations Officer [8]

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So basically, this tracks Australian outbound departures over the 2002 calendar year, 2003 calendar year and 2004 calendar year. If you look to the right of the screen, on the slide, you'll see the blue line is 2002, the orange is 2003 and the red is 2004. And that's the normal pattern you get because Australian outbound travel tends to always grow.

If you go back to the start of that line, though, you can see the same trend is at the start of the year. And then a couple of months in, the red sits below the blue. So that's where SARS started to impact, around February, March of 2003. And that was followed by the U.S. invasion of Iraq about a month later. Then if you follow that -- off that orange line along, you'll see it mix back up with the blue one around July, August. So 4 to 5 months later, as Skroo said. And then it kind of powered ahead from the last quarter. And then the following year, you have rapid growth throughout the year in 2004, which is that top line.

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Graham F. Turner, Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director [9]

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Yes. And those -- that orange line that looks like it's red, is actually orange.

So what are we doing about the coronavirus impact? Certainly, cost. It is an opportunity to really have a deep look at our costs, which we already were through part of the transformation process so that we can capitalize opportunities when the market recovers, which it inevitably will.

And as I said before, we'll have an aggressive promotion. You'll see this in our marketing, particularly in Australia, over the next few months in 2 areas that we feel will probably not be too badly affected by this. Although it's early days yet.

Certainly, flexible work arrangements. We are certainly -- we are operating them now in our Asian businesses. We will be spreading that to other businesses throughout the world. And possible expansion into other businesses in terms of those flexible arrangements if demand further softens.

One of the -- and if you go over to the next page, this is indicative of what's happened in the last few days. And I think there's a slide right at the end of the appendix, appendix 4, which will show you what has happened, Australia to U.S., just in the last 3 days. And we expect this will follow, and there'll be -- this certainly will stimulate demand.

So that's about it, end of the presentation. Haydn?

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Haydn Long, Flight Centre Travel Group Limited - Investor & Media Relations Officer [10]

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We'll get back to questions, when you guys are ready.

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Questions and Answers

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Operator [1]

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(Operator Instructions)

Your first question comes from Michael Simotas with Jefferies.

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Michael Simotas, Jefferies LLC, Research Division - Equity Analyst [2]

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Just the first question for me. When you look at the results across all of the regions, it's a trend we've seen for a while where PBT margins generally come down. TTV growth has been pretty robust. Revenue margins come under pressure, and cost margins a little bit mixed and some one-offs in there as well. What needs to happen to get to your 2% net margin target? Do you need to stem the revenue margin decline? Or is that just a natural mix shift that will continue to happen, and it's all about costs?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [3]

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I'll -- sorry, Michael, it's Adam here. I'll answer that first, and then Skroo might want to jump in as well. As you say, we're certainly seeing good TTV growth fairly consistently. The revenue margin is pretty much driven by the business mix. So when I look at the decline over the last couple of years, if we just park the Australian leisure margin impact for a minute, the rest of that revenue margin decline is pretty much in line with the mix that we've seen coming through in some of those low-revenue margin businesses.

What -- so on the face of it, my view would be that we need to focus more heavily on our cost base because as we're reducing those -- sorry, as we're increasing the proportion of lower revenue margin businesses, we should also be seeing a natural decline in cost. So whilst we're seeing -- I sort of indicated it when I was talking earlier, whilst we're seeing, even this year -- this half, a further decline in that cost margin, I don't think it's enough, and that's an area that we need to be continuing to focus on.

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Michael Simotas, Jefferies LLC, Research Division - Equity Analyst [4]

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You -- just related to that and following on, there is -- you did mention overrides in the Flight Centre core business in Australia. How much of an impact was that, Adam?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [5]

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So that's certainly flowing through. If you look at the Australian revenue margin that we've had growth in, particularly, in Travel Money, but also in the online businesses, both Jetmax and also you will have seen some good growth coming out of flightcentre.com.au. That's driven the majority of it, but the impact of the revenue margin was probably around about a 10 basis point decline.

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Michael Simotas, Jefferies LLC, Research Division - Equity Analyst [6]

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And that was overrides that was that issue?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [7]

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Yes, predominantly, predominantly. It's the flow-on effects from the TTV.

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Graham F. Turner, Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director [8]

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Yes. The other thing -- yes, obviously, I think you can see most of our corporate business' net margins aren't bad and generally quite good, particularly in EMEA and the Americas. In leisure, it is partly focusing on other models in -- like online, in the Flight Centre brand getting more online, with less cost growth and higher margins through doing more online. Also our premium business, which is -- yes, Mel talked a fair bit about. We still have a lot of work to do there, but it's -- we accept that.

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Michael Simotas, Jefferies LLC, Research Division - Equity Analyst [9]

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And the second question for me, can we just talk a little bit about the balance sheet? You're in a debt position for the first time in a long time. And I mean, we've spoken before about the old strategy of holding 3 months of cash OpEx on the balance sheet. Maybe that was too conservative, but we've got a pretty difficult, uncertain time ahead of us. It sort of looks okay at the moment, but is there anything that can happen that can cause a balance sheet problem? Or do you think it's conservative enough at the moment?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [10]

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Look, again, Michael, I'll answer, and certainly, I'm sure Skroo's got a view as well. Hopefully, they're not too dissimilar. But if you look at it, when we -- -- as you know, when we report our half year results, there is a huge seasonality mix that goes through -- that flows through to the balance sheet, in particular, with the cash balance. So our cash balance of a bit over $800 million at December had increased by about $350 million by the end of January alone, so sitting at about $1.2 billion with a net debt position at the end of January of over $100 million. So that's -- that just sort of highlights the seasonality of it. So I think if -- and as a comparison, we put the debt facility in place in January, February of last year. So like-for-like, we didn't have that facility sitting there. And that's being used to fund a couple of the acquisitions, and in particular, the 3Mundi businesses that now operates as FCM in France and Switzerland.

So no, I -- personally, I don't believe that -- I believe that we've got -- still got quite a conservative balance sheet. The extent of debt we have for a business our size is relatively low. The cash holdings that we have, I'm comfortable with, are sufficient. But you're right, we have a period of uncertainty that we're heading into over the next number of months. I'm actually more comfortable with the balance sheet that we've got than I'm sure a number of other companies would be at the moment. Skroo, do you agree to that?

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Graham F. Turner, Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director [11]

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Yes, I think our main aim to make sure we're going forward that we do have a positive net cash flow position over the next 5 months or -- in particular, and that certainly will be one of our major goals. Even though there might be -- there will be some significant impact from this coronavirus, for sure.

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Michael Simotas, Jefferies LLC, Research Division - Equity Analyst [12]

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Do you see times -- I think there was a year '09 where you actually ended up with negative operating cash flow in the second half as well. Is the mix just different now, so that won't happen again? Or does it just depend on how bad coronavirus gets?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [13]

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Well, the mix is certainly different. If you go back to '09, the vast majority of the growth in profit we were seeing would've been coming -- around that sort of time coming from our leisure business in Australia. If you look at the mix now, TTV for corporate's about 40% of our total, but the growth is really coming at that corporate space and non-Australia. So I think the diversification we've got certainly helps with that. Sorry, Haydn, did you want to...

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Haydn Long, Flight Centre Travel Group Limited - Investor & Media Relations Officer [14]

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Michael, I think, also back then, I think we -- that was just after the Liberty, GOGO acquisition. And I think -- I mean I might be wrong, but I had a feeling that they recognize revenue the opposite way to what they do now. So the seasonality was different back then, too. So that was actually the strong growth -- the weaker period than now, the stronger period.

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Operator [15]

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Next question comes from Grant Saligari with Crédit Suisse.

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Grant Saligari, Crédit Suisse AG, Research Division - Head of the Consumer Staples, Discretionary Retail & Agriculture and Director [16]

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Yes. It's almost bizarre that you can be distributing sort of a quarter of Australia's outbound travel and not making money out of it. The thing that surprised me that will -- in the ANZ accounts is your comments just earlier that the net revenue margin, that the override impact was actually relatively minor in the overall scheme of things. You had your strongest cost growth that I've seen in ANZ for several years. I mean, most retailers will be happy with 3% revenue growth. But your costs went up $50 million, and consultant productivity improved. Can you sort of elaborate on what's actually happening within that business to generate that outcome?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [17]

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Yes, maybe I'll -- Grant, I'll start by talking about cost. The cost increase, as you said, nearly $50 million, which is about 7%. That's got about $5 million included in it from the EBA that we entered into in October last year. So on a like-for-like basis, that's flowing through to the first 4 months of the half. That includes $7 million for the Ventours supplier collapse, which was a one-off, as we've outlined, that we make sure that our customers were either rebooked or refunded as a result of that collapse. It also includes just under $10 million, which is the cost incurred by Ignite in their normal business that we've now taken on post consolidation of that business in September.

So again, that's a year-on-year difference, but there's not an additional spend, if you like. It's just the consolidation of that business coming on board.

On top of that, the other major sort of spends that we've had that you'll see in there really are in relation to the investment in our sales and marketing activity. And again, that was largely in relation to both flightcentre.com.au. We don't have -- we've removed booking fees. We really put that branding and that messaging out into the market. And so we've seen an increase for the half year-on-year, certainly through those costs. So there were some -- there's a color hopefully around the cost base movement in that ANZ market.

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Grant Saligari, Crédit Suisse AG, Research Division - Head of the Consumer Staples, Discretionary Retail & Agriculture and Director [18]

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Yes. But the revenue from Ignite should have been consolidated as well. So it's just -- it's a bizarre outcome coming through that ANZ business in a time which revenue growth is very low, the cost growth is actually accelerating.

Are the -- actually, another specific question, are the actual new businesses that you're developing, sort of the home-based channel and as the online businesses grow, are they actually profitable? Like you say, they're not contributing to profit, but actually, are they loss-making?

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Melanie C. Waters-Ryan, Flight Centre Travel Group Limited - CEO of Leisure Business [19]

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Grant, they are profitable. I don't -- probably, circa, I think the online is doing about 1% net margin at the moment, and I believe we can get that to 2%. We have, as Adam indicated, removed booking fees to generate top line growth. But we've got some developments coming online soon that will allow us to sell, say, ancillaries and other products much more easily. So yes, they're profitable, but we're not really capitalizing on the scale. That was our intent, it was to get to the top line and then to start looking at how we would improve that net margin.

The same with the home-based. The home-based has also grown reasonably quickly, although it's still small. But again, we believe we can get that to about a 2% net margin fairly soon, and then grow exponentially from there. So yes, they're profitable, but not at the levels we would quite like at the moment.

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Grant Saligari, Crédit Suisse AG, Research Division - Head of the Consumer Staples, Discretionary Retail & Agriculture and Director [20]

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Do you need to shut more shops, like go to sort of back to basics? Because if your online is generating a 1% PBT margin, the group is only 0.75% for ANZ as a whole, corporate is presumably generating a reasonably solid margin given what you've been discussing. So I mean, it seems like shops are probably loss-making.

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Melanie C. Waters-Ryan, Flight Centre Travel Group Limited - CEO of Leisure Business [21]

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There are some. There's no doubt about that, and the network optimization is a key part of the strategic review. And yes, there will be network consolidation and changes over the next few years as the pattern of travel shopping changes. So -- and also as we move to more home-based agents, of course, you don't need a physical location to put them in. So yes, they are some of the key configurations. It creates lines between where the shop contributes and where it doesn't, and we're working through that as we move on and we (inaudible).

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Operator [22]

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Your next question comes from Bryan Raymond with Citi.

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Bryan Raymond, Citigroup Inc, Research Division - VP & Analyst [23]

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Just following on actually from the previous question on the fixed cost base in leisure. Could you give us an update of where the store network is at the moment? And how many stores you think you really need if online keeps growing at the pace it is? Clearly, there's some cannibalization occurring. So just want to understand where you're at? Where you think you could get to? And what sort of fixed cost you could remove on that -- what sort of fixed cost you could remove as you go down that path?

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Graham F. Turner, Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director [24]

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Yes. I mean, as Mel said, Bryan, we are looking at our network. We have been looking at that for some time. We have been consolidating over the last few years, more or less in the business as usual. But I think at the moment, we have about 900 locations in 3 different brands. And, yes, as leases come up, we'll be looking at the viability of each store, store-by-store, and inevitably, I think, over the next few years, we'll have fewer but larger, more viable locations.

So I can't give you the exact number at the moment, but I can assure you that we are looking at the viability and making sure we got the right number of locations in the right suburbs and the right demographic areas. So it is quite a complex area, but we have been looking at this in detail over the last 2.5 years, and yes, you will -- we will have said -- last year when we did the rebrand, we did consolidate quite a bit of that then, and this will continue.

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Bryan Raymond, Citigroup Inc, Research Division - VP & Analyst [25]

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And then just, I guess, the flow-on effect of that is on the staff levels. I'm just looking at your presentation, now you had over 8,300 sales staff in the ANZ. How many of those should we be putting in the leisure bucket as opposed to corporate and head office?

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Graham F. Turner, Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director [26]

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Look, I think in Australia, we have about 5,000 or so. And we -- even if we do rationalize our network to some extent, there probably won't be a dramatic change in those numbers. It will be making sure they're in the right -- we have the right staff in the right locations, Bryan. So that is the main thing. It's one of the -- it certainly is one of the strategies that we're looking at.

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Bryan Raymond, Citigroup Inc, Research Division - VP & Analyst [27]

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Okay. And then just on some of the TTV trends that you've seen over the past 4 weeks or so since coronavirus has picked up, and essentially just trying to work out what your guidance is implying for the second half? It feels like corporate has had a bit bigger impact on leisure as there'd be less switching destination. So just interested, is leisure seeing better TTV growth globally than corporate? And then also just maybe by region, if there's any regions more heavily affected than others in terms of TTV growth?

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Graham F. Turner, Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director [28]

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Yes, it is very early days. Yes, it's really -- the main impact seems to have been started to become obvious in February, and it seems -- and it's happening both in corporate and in leisure. And we -- it would appear -- and I say, this is early days. We've had our mid-month picture given to us, but it really -- and there's no debt that both -- and this is in all countries. Asia, obviously, has been significantly affected. And it would appear just in the last few days or a week that is spreading a bit to most of the other major centers where we have leisure and corporate.

But it's just a bit early to say how significant that will be. It will be significant for the next -- I believe, for the next few weeks, and certainly, March. Whether it goes beyond March and April, we just don't know yet, Bryan. So it's really a bit of a watch and see for us. But I would -- from what we see, ticket numbers and TTVs probably dropping off in the vicinity of around 10% or plus, just depending on where we are and what the destinations we're talking about.

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Bryan Raymond, Citigroup Inc, Research Division - VP & Analyst [29]

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Right. And do you think, though, that the travel agent channel generally would be benefiting in times like this, as uncertainty probably weighs more on the OTAs and people do want that ability to go back and change plans or get refunds or whatever else it might be? Do you think that the travel agents, including yourselves, would be relatively better off in this environment?

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Haydn Long, Flight Centre Travel Group Limited - Investor & Media Relations Officer [30]

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Yes. I think that's probably right, Bryan. But just the other thing to consider, too, is if this does slow outbound international travel, then a lot of that's done -- a lot of the domestic stuff's done online. So it might -- it probably levels out overall.

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Graham F. Turner, Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director [31]

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Yes, I think it will have people, particularly, those who are traveling, and particularly, if they've got a slightly more complex arrangement and -- certainly internationally, it will be -- and there will be opportunities for the off-line business. But from our point of view, too, I think it is a good opportunity to look at winning market share through marketing activity and other things like that. This is what we did quite successfully during the SARS and in 2001. So we're certainly looking at that right now to make sure that we're ready to take advantage of this as the impact of the virus in that slows, which -- it already is in China, but we don't know exactly the rest of the world yet.

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Bryan Raymond, Citigroup Inc, Research Division - VP & Analyst [32]

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Okay. And then just my final question is just on some of this price war that you're calling out in the air fare, at least to the West Coast of the U.S., if not further. How do you -- how should we be thinking about demand elasticity to that reduction in air fares? Last time, we saw TTV down materially a few years back. We saw very good volume growth that more than offset it, and you still had positive TTV growth. Do you think in the current environment, the land -- demand elasticity is being dented a bit by what's going on around the world in terms of the virus and other issues?

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Graham F. Turner, Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director [33]

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Yes, for sure, it is. But particularly destinations like yes, L.A., New York, or North America and London and Northern Europe, in particular. It's quite a big market. And when you get fares like that you saw on that appendix 4, it will stimulate demand quite significantly, particularly for the younger demographic, who are not too worried about something like the coronavirus. And so we expect there will be certainly stimulation. Obviously, these fares are very cheap, so the TTV impact mightn't be as great as it would normally be to sell these. But you'll see a lot more of these really quite amazing deals coming out over the next few weeks as airlines, they really do need to fill their seats.

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Haydn Long, Flight Centre Travel Group Limited - Investor & Media Relations Officer [34]

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Bryan, turning to those fares that Skroo was talking about, a lot of those were really short term. Basically 2- or 3-day sales, and they were made available at the start of the weekend. A lot of them expired yesterday. So I think it was -- the airlines were just testing the water a little bit perhaps.

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Operator [35]

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Your next question comes from Aryan Norozi with UBS Investment Bank.

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Aryan Norozi, UBS Investment Bank, Research Division - Associate Analyst [36]

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All right. First one for me. Can you please just talk through the PBT trends in Australia throughout the half and just your outlook moving forward?

Yes, I'm sorry. Australian leisure, I'm talking about.

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Graham F. Turner, Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director [37]

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So Mel, do you want to...

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Haydn Long, Flight Centre Travel Group Limited - Investor & Media Relations Officer [38]

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Leisure PBT trends in Australia.

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Graham F. Turner, Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director [39]

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Leisure PBT.

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Haydn Long, Flight Centre Travel Group Limited - Investor & Media Relations Officer [40]

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PBT or TTV, Aryan?

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Aryan Norozi, UBS Investment Bank, Research Division - Associate Analyst [41]

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PBT, profits.

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Melanie C. Waters-Ryan, Flight Centre Travel Group Limited - CEO of Leisure Business [42]

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So the PBT trends in Australian leisure in the first half. Okay, so it was disappointing in the legacy business, the Flight Centre absolutely, that's obvious. And reasonably okay in the small and emerging brands, particularly the Jetmax (inaudible) and Travel Money. And obviously, it's not -- we didn't really have that consolidated until the December month.

I think our premium brand was relatively flat. And our home-based again with a reasonable PBT growth, although it's still a bit low. So our major issue is certainly in the legacy Flight Centre brand in terms of the shops. And universal travel brand as well, which was certainly new, at the start of the [fiscal] year has been performing very strongly. But that's probably the PBT trends anyway, the first 6.

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Aryan Norozi, UBS Investment Bank, Research Division - Associate Analyst [43]

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Yes. And the Flight Centre brand in Australia, from TTV perspective, just in terms of your stores. I mean, how is that performing? And can you just give us a bit more color around what you're doing within the store to sort of improve performance there?

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Melanie C. Waters-Ryan, Flight Centre Travel Group Limited - CEO of Leisure Business [44]

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The TTV, I think, was slightly down in the stores but up in the online, which I think produced minor growth overall in Flight Centre. But obviously, the stores being still the lion's share of the channel is where the PBT impact was for.

So they've had -- and it's potentially a lot of the initiatives during that transformation speedline program about strong sales performance mechanisms going on at the moment. Certainly looking at cost reductions, where possible, there's quite a few initiatives in play at the moment, efficiency of marketing, those kind of things.

Ultimately, though, we do know we need to shift the model's profit margin and reduce that legacy cost base, which we referred to a little while ago. You will see stores being worked on over the next few years as leases come up, we certainly might be expanding the shop network, there will be some consolidation of the shop network. And also looking again at that ongoing productivity growth as well.

And again, a lot of the growth will come from this online. We've been really pleased with the growth online. That would certainly be aimed not at a profit contribution but certainly to get the growth going out of the first 6. Now the aim has shifted to get the profit margin up in the online space.

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Aryan Norozi, UBS Investment Bank, Research Division - Associate Analyst [45]

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Cool. And just final one for me, just more of a clarification. I think, Mel, you mentioned that you -- it will probably take a bit longer to get back to that 2% net PBT margin. Were you referring to Australian leisure only? Or was that on a group level?

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Melanie C. Waters-Ryan, Flight Centre Travel Group Limited - CEO of Leisure Business [46]

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No, that's -- well, that's the group leisure level, totally. I mean, we're also, remember, just as challenged in the North American business from a leisure perspective as well.

So we certainly are focused on getting back to that 2% net margin at the group level in leisure. And obviously, then that will impact the group level. That does differ in different markets. We're certainly achieving that in leisure in markets like Southern Africa, very solid business. And I think U.K. as well. But our main focus will be getting the leisure businesses to that level.

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Adam Campbell, Flight Centre Travel Group Limited - CFO [47]

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Yes. I think it's -- this is the biggest driver. If you look at the group level of getting to that 2% PBT margin, as Mel said. The biggest drag on that, that we can see at the moment is the Australian leisure and potentially North American leisure but predominantly Australia leisure impact. But if you look outside of that to our other geographies, and specifically in the corporate businesses, we're very much happy with the way that we're tracking towards their contract -- their required contributions to get that blended PBT margin of 2%.

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Aryan Norozi, UBS Investment Bank, Research Division - Associate Analyst [48]

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So overall, on a group level, leisure and corporate, are you still comfortable with getting 2% PBT margins within your targeted period?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [49]

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The 2% is targeted within -- we're actually exactly halfway through that program. It's 2.5 years from now that we've set that out for. At this point in time, we are comfortable with the progress being made by all regions and all businesses with the exception of the Australian leisure business. So that is the unknown at the moment as to whether or not in the next 2.5 years, we get that to the required PBT margin to make sure it's not dragging us under the target.

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Operator [50]

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Your next question comes from Mark Wade with CLSA.

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Mark Wade, CLSA Limited, Research Division - Research Analyst [51]

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Just looking at -- you've got -- McKinsey's come in to help you with the transformation there, Mel. And I guess, I'm just looking back 15 years ago when you had Bain helping you with full throttle and chain [plans] involvement. I mean, what -- I guess what -- the question is, what does McKinsey bring that you couldn't do yourself?

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Melanie C. Waters-Ryan, Flight Centre Travel Group Limited - CEO of Leisure Business [52]

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Good question, and I was there during the bad period, which wasn't necessarily one of the greatest moments in our history. I think -- and I've worked closely with them over the last few months, I think the level of rigor they bring in terms of the process that they apply to transformation is definitely an upgrade from where we were.

Don't get me wrong. You're right, we were already working on many of those things. But they also bring a lot of benchmarking and other industry insights, if you like, that you can apply in to the travel segment. So I've actually been quite pleased with the impact that had. But don't get me wrong, we're still at our initiative. We're driving it. This is more to help get to the greater level of, sort of, specifically, process to this program, which I think definitely happens.

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Mark Wade, CLSA Limited, Research Division - Research Analyst [53]

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Okay. Fair enough then. And just turning to the corporate business. I mean, Chris gave us a good overview there in that USD 1.5 trillion market. I'm just trying to understand how much of that is kind of currently outsourced to TMC or agents like yourself versus what -- how much of it would be done in-house, and where I'm getting to with that is, like, does it need a different approach to your plan to try and win share in those respective subsegments of that big market?

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Chris Galanty, Flight Centre Travel Group Limited - CEO of Corporate Business [54]

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No. We're pretty confident approaching it the way we are, with a large market and customers through the FCM brand and the SME through. Corporate travel is also in the leisure business for FCBT. The market is so big and so fragmented, we believe that those 2 approaches are enough. Sure, we can go into other niches, but we really don't feel we need to in any of the markets we operate in.

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Mark Wade, CLSA Limited, Research Division - Research Analyst [55]

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I guess, specifically, Chris, I mean, what is your plan, though, to try and increase that share above 1% other than having 2 brands and great technology and et cetera?

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Chris Galanty, Flight Centre Travel Group Limited - CEO of Corporate Business [56]

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Well, it's a mix of tactical M&A but largely winning new customers. I think that's -- you've got to bear in mind, the largest TMC in the world, the significantly largest, which is Amex GBT, still only has a very small single-digit share. So there is nobody out there playing a dominant role in the marketplace. It's so fragmented, which suits us quite well. It means we're very confident we can keep growing.

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Operator [57]

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Your next question comes from John O'Shea with Ord Minnett.

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John O'Shea, Ord Minnett Limited, Research Division - Senior Research Analyst [58]

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Thanks for the increased disclosure around corporate. Much appreciated. Perhaps my question may be relates to James and perhaps anyone else in the team. But just wanted to sort of -- if you could give a little bit more color around what you're actually seeing in corporate, particularly in recent -- the recent few weeks. How they're responding, what you expect to happen to unfold over the remainder of the year given their uncertainty surrounding it?

And secondly, how traditionally, have you seen the recovery when there is a resolution, let's assume there is a resolution at some point, how do you see the relative recovery rates of leisure versus corporate based on your history?

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Chris Galanty, Flight Centre Travel Group Limited - CEO of Corporate Business [59]

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So John, it's Chris here. I'll take the question around corporate trends. Really, the -- it's very early on outside of Asia. So we obviously have seen significant impact in Greater China and Southeast Asia business from January onwards. We're really, really seeing a dip in corporate travel in the last 3 weeks outside of Asia. So it's very early days. And...

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John O'Shea, Ord Minnett Limited, Research Division - Senior Research Analyst [60]

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Could you give us an idea of the magnitude now?

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Chris Galanty, Flight Centre Travel Group Limited - CEO of Corporate Business [61]

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It's really difficult to say at this stage. It's really difficult to say. So we're trying to pull that together now.

In terms of bouncing back, it's normally very quick. So typically, in previous outbreaks, we're looking at the SARS data because we believe it's the most comparable. The bounce back was pretty quick with corporate travel.

So I think that -- we don't -- we -- there's definitely been an impact. We're not sure how long it's going to last, and it's really following that. We're talking very closely with our customers, and quite rightly, they're following the news and following the updates as we are. But typically, it bounces back, but not until customers feel like it is safe and appropriate to travel.

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John O'Shea, Ord Minnett Limited, Research Division - Senior Research Analyst [62]

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Sure. And then on the leisure side, perhaps someone else from the business can give a comment on how that (inaudible) on how quickly that responds?

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Graham F. Turner, Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director [63]

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Melanie's probably in a better place to comment on it than I am. But with leisure, you've got the opportunity to switch people to destinations that are considered to be safe. You don't really have that opportunity with corporate because they're traveling because they need to go to a particular region. So we get domestic customers. Yes, with SARS, we did see a shift back to domestic at the time because obviously, there was pretty big outbreaks in America, and pretty big outbreaks in Asia at the time with SARS, and then you had the unrest in the Middle East. So people were a bit concerned about traveling anywhere overseas and then shifting back to domestic. So I was just saying to Adam before, when you look at that chart that I produced in my capacity as professor of data science. The impact on us probably wasn't as long as that downturn either because we were that -- departures and we would have started recognizing that TTV a little bit earlier than the departure was recognized. But it probably bounced back a bit quicker than corporate.

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Operator [64]

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Your next question is from Peter Drew with Carter Bar Securities.

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Peter Drew;Carter Bar Securities;Analyst, [65]

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Just first question, just on the Americas result. Can you just talk through the PBT performance of the corporate business versus PCP? And then in terms of the leisure and wholesale PBT performances, just trying to understand what -- how each of those moved versus PCP?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [66]

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Yes, Peter. It's Adam. Happy to do that. So effectively, across the Americas business, both the corporate business in the U.S. and the corporate business in Canada, both had improvements in EBIT. I'll talk at an EBIT level. And corporate for the U.S. grew circa 15% in terms of profit. Canada grew in corporate, a little bit higher than that, about 20% to 25% off a small base. So it was really the leisure and wholesale business in the U.S. as well as the Canadian leisure business that underperformed versus PCP.

And particularly in leisure, I think we were quite disappointed with -- sorry, here in Canada, we're quite disappointed with the leisure results there. There are lot of work being done there. There's been some impact on back-end in the Canadian market. But that's being driven again by some of the TTV impact we've seen over the last 12 months or so.

But both the U.S. -- and then if you look at U.S. leisure and U.S. wholesale, there's no doubt that they've both been impacted by the Dominican Republic safety concerns, and the estimate that we've got from the businesses is it's around about that USD 4 million to USD 5 million impact to leisure and wholesale.

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Peter Drew;Carter Bar Securities;Analyst, [67]

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Okay. And what about from a TTV perspective, how was -- how did U.S. leisure perform and Canada leisure?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [68]

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Yes, the Canada leisure was down about between 5% and 7%, that sort of range. U.S. leisure was up, but up slightly.

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Peter Drew;Carter Bar Securities;Analyst, [69]

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Right. Okay. And then just going back to the ANZ results. Can you just confirm what the corporate TTV margin -- sorry, the PBT margin is for the corporate business in ANZ?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [70]

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Revenue margin or PBT margin?

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Peter Drew;Carter Bar Securities;Analyst, [71]

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PBT to TTV net margin.

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Adam Campbell, Flight Centre Travel Group Limited - CFO [72]

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It will typically operate at just over 3% net margin.

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Peter Drew;Carter Bar Securities;Analyst, [73]

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Right. Okay. And so -- and has that been sort of relatively consistent year-on-year?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [74]

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It has fallen a little bit year-on-year because the -- we've seen TTV has only grown by a couple of percent in that corporate market in Australia with the increase in cost that we spoke about earlier, growing a little bit higher than that. And revenue margin just coming off a bit. The profit for corporate is down slightly year-on-year in the Australian market. So it has come up a little bit, but nothing major. It typically sits at around that level. We would be looking to see that net margin continue to increase, both in Australia and more broadly across our corporate businesses.

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Peter Drew;Carter Bar Securities;Analyst, [75]

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Yes. Okay. And then just last question. Just on the other expenses. Can you give us some sort of an idea of what your expectation is for that year? In the other segment?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [76]

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Yes, sorry. So we're -- just to make sure, we're talking about the right other. We're talking about the other segment?

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Peter Drew;Carter Bar Securities;Analyst, [77]

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Yes, correct.

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Adam Campbell, Flight Centre Travel Group Limited - CFO [78]

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Yes. So I'd expect the same sort of run rate through the second half. If you look at what's impacted on the first half movement in underlying PBT, interest has certainly had a significant impact. Our touring results, as we said, have really underperformed. So we're about $2.5 million down with those. We had some consulting costs going through some of the initiatives, which is a couple of million dollars there as well.

So my expectation is that we'll have a similar sort of run rate in the second half as what we had in the first half, which probably -- excluding any impact of coronavirus, probably means we end up at around that $45 million to $50 million loss in that segment compared to just under $40 million last year.

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Operator [79]

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(Operator Instructions) Your next question comes from Wei-Weng Chen with JPMorgan.

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Wei-Weng Chen, JP Morgan Chase & Co, Research Division - Research Analyst [80]

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Just a couple of questions from me. So just back onto cost. They increased $160 million, of which you said that $66 million was FX and acquisition. Given that you guys are expected to be net beneficiaries of the weak dollar and acquisitions and revenue only increased $85 million on the PCP. Does that mean you guys went backwards at the revenue line in constant currency pre-acquisition terms?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [81]

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So I'm trying to back all of that out to get down to it. So if you -- let me look at it, separate it out a little bit.

Acquisitions. First of all, it's probably the one to talk through. Acquisitions contributed that $360 million of TTV, about $5 million net of cost -- sorry, not cost, of PBT for the half. FX contributed about $2 million to the PBT in total.

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Wei-Weng Chen, JP Morgan Chase & Co, Research Division - Research Analyst [82]

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And what about the TTV though?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [83]

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The TTV, FX was $280 million.

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Wei-Weng Chen, JP Morgan Chase & Co, Research Division - Research Analyst [84]

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Okay. All right. Cool. And then just a question as well on your initiative for -- I realize it's just small at the moment in the leisure side, but growing a B2B business and look to launch a bedbank business, what's the thinking behind moving into this market? Are there synergies to the existing business? Or is it just a further diversification of our business mix.

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Melanie C. Waters-Ryan, Flight Centre Travel Group Limited - CEO of Leisure Business [85]

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Sorry, Wei, I didn't quite hear that, but the justification to do that if we're doing the majority of what we need to do anyway in terms of where we're kind of a B2B business to our own company, if you like. So the supply company, we have supplied their own leisure business and our corporate business.

So we've had small forays into this actually for quite a long time and we just tested that actually, the brands and the launch of the brands as well as travel markets, and the response has been quite enormous. When I say enormous, it's off a small base. So we think this an area we can absolutely pursue. And it's not necessarily just in that bedbank or we're actually calling it a travel bank.

We believe with some of our systems that we're about to implement that we can really improve the product capability of other agency businesses, so -- and particularly where it's not conflicting with some of our -- and we don't see any reason on why we shouldn't do that. So this is an area that we see great opportunities, it's a good net margin business that leverages the cost base in many instances that we already have.

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Wei-Weng Chen, JP Morgan Chase & Co, Research Division - Research Analyst [86]

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Yes. Okay. It's just interesting to note that -- between that and also the focus on growing your OTA business. I mean, to me, that sounds like Webjet, which according to media speculation, is up for sale, I guess, when I think about Webjet, specifically, any comments on whether you could or would take on a sizable acquisition or accelerate growth in these segments?

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Melanie C. Waters-Ryan, Flight Centre Travel Group Limited - CEO of Leisure Business [87]

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Well, I don't think at this stage, but we're in that price. But...

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Graham F. Turner, Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director [88]

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No.

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Melanie C. Waters-Ryan, Flight Centre Travel Group Limited - CEO of Leisure Business [89]

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No. I mean, we always look at acquisitions both as organic and whether one is better than the other. I mean, that's a very large scale business. And our own bedbank, internally at the moment, is probably not too much different in time.

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Adam Campbell, Flight Centre Travel Group Limited - CFO [90]

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I think there was about $1.5 billion. I think, Michael Simotas might get quite angry at our capital management if we used it all up on that sort of thing.

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Wei-Weng Chen, JP Morgan Chase & Co, Research Division - Research Analyst [91]

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Okay. Cool. And then just 2 very quick questions. Are you expecting 100% of EBITDA to be converted to cash over the full year?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [92]

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We typically fall just below that. So typically, we're generally in that 90% to 95% range. And at the margin, this -- the second half is somewhat uncertain. But right now, we would aim for the same sort of conversion rate as we traditionally had.

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Wei-Weng Chen, JP Morgan Chase & Co, Research Division - Research Analyst [93]

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Okay. Great. And then last one was just Flight. What's Flight Centre's exposure to cruise in leisure?

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Melanie C. Waters-Ryan, Flight Centre Travel Group Limited - CEO of Leisure Business [94]

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Sorry?

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Adam Campbell, Flight Centre Travel Group Limited - CFO [95]

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He's talking about Cruise in leisure.

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Melanie C. Waters-Ryan, Flight Centre Travel Group Limited - CEO of Leisure Business [96]

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Look, the cruise volume has certainly dropped off. I mean, we don't have specific cruise brands now in the bricks-and-mortar capacity and certainly, our MyCruise business is actually still growing exponentially. It's having an impact, so I think 30% down in about cruise volumes being reported, but it's not a major, major chunk of our turnover in leisure. So it will have a small impact.

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Operator [97]

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There are no further questions at this time. I'll now hand back to Mr. Long for closing remarks.

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Haydn Long, Flight Centre Travel Group Limited - Investor & Media Relations Officer [98]

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Well, thanks very much, everyone. I hope to see a lot of you later today. Probably some of you have to see us as well or maybe not.

So we'll catch up with you later. Thanks for your time. We are going to be in meetings back-to-back pretty much but shoot us an e-mail if anything's needed.

Thank you.

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Melanie C. Waters-Ryan, Flight Centre Travel Group Limited - CEO of Leisure Business [99]

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Thank you.

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Graham F. Turner, Flight Centre Travel Group Limited - Founder, Global MD, CEO & Executive Director [100]

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Thanks, everyone.