1 / 29

Investor Workshop

Investor Workshop. 17 September 2004. THE STRATEGIC CHALLENGE. Trading Environment changing rapidly Performance of Holidaybreak and business portfolio Outlook for 2005 Longer term prospects and strategy. HOLIDAY BREAK DEFINED. Travel sector. Balanced portfolio of specialist

taniel
Download Presentation

Investor Workshop

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Investor Workshop 17 September 2004

  2. THE STRATEGIC CHALLENGE • Trading Environment changing rapidly • Performance of Holidaybreak and business portfolio • Outlook for 2005 • Longer term prospects and strategy

  3. HOLIDAYBREAK DEFINED Travel sector Balanced portfolio of specialist holiday businesses Decentralised structure HOLIDAYBREAK Primarily UK market basedbut European aspirations

  4. TRADING ENVIRONMENT • Demographics • Socio-Economic trends • Travel Industry – structural upheaval • Travel Consumer trends

  5. DEMOGRAPHICS More Middle Aged and Older People Fewer YoungerFamilies Smaller FamilyUnits DEMOGRAPHICS More OneParent Households More Divorces/Children from Different Marriages

  6. KEY SOCIO-ECONOMIC TRENDS Increasing disposableincome/spend on leisure SOCIAL & ECONOMICCHANGES Increasing ‘grey’ consumer power Changing patterns of work - Work more intensive but more short span leisure opportunities - More women in employment Increase in pace/pressure of modern living

  7. EXPENDITURE ON TRAVEL Source: Mintel (2003)

  8. KEY SOCIO-ECONOMIC TRENDS Increasing disposableincome/spend on leisure SOCIAL & ECONOMICCHANGES Increasing ‘grey’ consumer power Changing patterns of work - Work more intensive but more short span leisure opportunities - More women in employment Increase in pace/pressure of modern living

  9. TIME PRESSURE Source: The Henley Centre: Planning for Consumer Change, 1991 - 2000

  10. TRAVEL INDUSTRY STRUCTURAL CHANGES High Street Travel Agents No Frills Airlines Above the line more fragmented and less cost effective More Channels Internet DistributionFragmenting PackagesUnbundling Sector lessProfitable TRAVEL INDUSTRYCHANGE Decline of GlobalVertically IntegratedOperators

  11. OPERATOR MARKET SHARE Source: CAA

  12. TRAVEL INDUSTRY CONSUMER CHANGE More Frequent,Shorter Holidays More Independent andTailor Made Travel Later Bookings/Shorter Lead Times TRAVEL CONSUMERTRENDS Competing for share of time as wellas share of wallet

  13. MULTIPLE HOLIDAY TAKING “ Holidaymakers are taking fewer two-week summer breaks than ever, according to one of the country’s largest travel agencies. “ The Co-operative Travel Trading Group has found that bookings for fortnight-long holidays are 10 per cent down this summer, with people taking week-long breaks so they can afford two or three weekend escapes at other times of the year.” TIMES : 20/8/04

  14. TRAVEL INDUSTRY CONSUMER CHANGE More Frequent,Shorter Holidays More Independent andTailor Made Travel Later Bookings/Shorter Lead Times TRAVEL CONSUMERTRENDS Competing for share of time as wellas share of wallet

  15. INCLUSIVE VS INDEPENDENT Source: Mintel (2003)

  16. TRAVEL SECTOR GROWTH MARKETS TRAVEL MARKET DOMESTIC HOLIDAYS - Up 21% (1991-2003) - 64% short breaks and share growing - 2002/3 strong years post FMD, 9/11, Iraq war etc OVERSEAS - Up 103% (1991-2003) - 15% short breaks and share growing - Still grew (at lower rates) in 2002/3 GROWTH AREAS - Grey market - Activity/special interest - Cruise- Overseas property ownership- VFR

  17. GROWTH IN OVERSEAS HOLIDAY TRIPS Source: Mintel (2003)

  18. GROWTH IN DOMESTIC HOLIDAY TRIPS Source: UKTS (2004)

  19. ACTIVITY HOLIDAYS ABROAD m Source: Mintel (2003)

  20. HOLIDAYBREAK PLCPERFORMANCE AND BUSINESS PORTFOLIO • Consistent earnings growth and cash generation • Rapid growth of Hotel Breaks means business portfolio more balanced • Three high quality businesses well placed to benefit from changing travel sector environment • Very different products and business models • Important common qualities and shared characteristics

  21. THREE BUSINESS TYPES HOTEL BREAKS Agents Customer Ancillaries SUPERBREAK- Efficient cost distribution at reasonable yields for suppliers - High service levels, convenience and value for customers and agents Accommodation VALUE ADDED DISTRIBUTION

  22. THREE BUSINESS MODELS ADVENTURE Accommodation Tour Content Transport Customers • EXPLORE • - Tour origination and operation • - High value added • Very difficult for DIY • customer to replicate CLASSIC TOUR OPERATING MODEL

  23. THREE BUSINESS TYPESCAMPING Transport Operators Camp-sites Customers Equipment Suppliers • EUROCAMP/KEYCAMP- On site service • Accommodation • Access to best sites • Strongly branded • Effective distribution HYBRID MODEL – PART TOUR OPERATOR, PART PRINCIPAL

  24. HOLIDAYBREAK BUSINESSESCOMMON QUALITIES & SHARED CHARACTERISTICS • Strong management teams – focus and commitment • Market leading brands • Service and product quality • Healthy margins • Cash generation • Resilience

  25. EPS* GROWTH Pence +4.5% +11.6% +12.0% +16.0% +9.3% * Before goodwill amortisation, impairment and exceptional operating costs

  26. OPERATING CASH GENERATION Operating cash generation after capex but before interest, dividends, tax and acquisitions

  27. OUTLOOK FOR 2005 • Macro-economy • Reversal of trend to UK holidays (weather!) • Hotel Breaks and Adventure have strong momentum and are well placed to benefit from travel sector trends • Camping has purpose, direction and leadership - sector developments give opportunities • Positive start to 2005 booking campaigns

  28. STRATEGIC DIRECTION • Holidaybreak = portfolio of specialist travel businesses not otherwise available to investors in quoted businesses • Maximising potential and value of existing businesses an imperative • Further acquisitions a possibility • Must continue to add value for customers, suppliers and shareholders • Targetting further growth andcontinued cash generation

More Related