Redefining Travel Commerce Bernstein Strategic Decisions Conference 2016
Redefining Travel CommerceBernstein Strategic Decisions Conference 2016
Related to Forward-Looking Statements
Certain items in this presentation and in today’s discussion, including matters relating to revenue, net income (loss), and percentages or
calculations using these measures, capital structure, future business opportunities, plans, prospects or growth rates and other financial
measurements and non-financial statements in future periods, constitute forward-looking statements. These forward-looking statements are
based on management’s current views with respect to future results and are subject to risks and uncertainties. These statements are not
guarantees of future performance. Actual results may differ materially from those contemplated by forward-looking statements. Travelport
Worldwide Limited (the ‘Company’ or ‘Travelport’) refers you to our periodic reports and filings with the Securities and Exchange
Commission (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on February 18,
2016 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed with the SEC on May 5, 2016, for additional
discussion of these risks and uncertainties, as well as a cautionary statement regarding forward-looking statements. Forward-looking
statements made during this presentation speak only as of today’s date. Travelport expressly disclaims any obligation to update or revise
any forward-looking statements, whether as a result of new information, future events or otherwise.
Related to Non-GAAP Financial Information
Travelport analyzes its performance using Adjusted EBITDA, Adjusted Net Income/(Loss), Adjusted Income/(Loss) per Share, Adjusted
Operating Income, Capital Expenditures, Net Debt, and Adjusted Free Cash Flow, which are non-GAAP financial measures. Such
measures may not be comparable to similarly named measures used by other companies. The Company believes these measures provide
management with a more complete understanding of underlying results, trends and the liquidity of the core operating business, along with
the Company’s ability to meet its current and future financing and investing needs. Adjusted EBITDA is the primary metric, used to evaluate
and understand our underlying operations and business trends, forecasting and determining future capital investment allocations. Adjusted
EBITDA, Adjusted Net Income/(Loss), Adjusted Income/(Loss) per Share and Adjusted Operating Income are also used by the Board of
Directors to determine incentive compensation for future periods. Capital Expenditures, which impact depreciation and amortization,
interest expense and income tax expense, are reviewed separately by management. These measures are disclosed so that investors have
the same tools as those available to management when evaluating the results of Travelport. These non-GAAP measures are defined in the
‘Definitions’ appendix of this presentation and discussed and reconciled to GAAP measures in our quarterly and annual filings with the SEC.
Disclaimers
2
Travelport has transformed though investments to lead the global travel distribution industry.
Our platform is differentiated in 5 key areas and is fully focused on value creation for our customers.
Global travel
distribution industry’s
clear leader in…
B2B Payments
5
Mobile Commerce
4
Hospitality and
Digital Media
3LCC Distribution
2
Airline
Merchandising
1
Industry leader with global, differentiated platform
3
Airline hosting is critical for back-end IT systems but does not
drive value creation at the front-end
4
Top 10 Global Airlines1 in 2015 (in millions)
Hosted by Sabre
Sonic
201179
140117 109 101 94 90 79 70
American Delta United Southwest ChinaSouthern
Ryanair ChinaEastern
Air China Lufthansa easyJet
Hosted by
Travelport,
development
by Delta
Not Hosted on
Amadeus Altea or
Sabre Sonic
Product
Not Hosted on
Amadeus Altea or
Sabre Sonic
Product
Not Hosted on
Amadeus Altea or
Sabre Sonic
Product
Hosted on
Navitaire, recently
purchased by
Amadeus
Not Hosted on
Amadeus Altea or
Sabre Sonic
Product
Not Hosted on
Amadeus Altea or
Sabre Sonic
Product
Hosted on
Amadeus Altea
Product
Not Hosted on
Amadeus Altea or
Sabre Sonic
Product
(2)
1. Top 10 global airlines measured by passengers boarded represent around a third of global passengers boarded; Source: CAPA
2. Southwest uses Amadeus Altea for international flights, being a small proportion of Southwest’s business
• Majority of world’s largest airlines do not use Amadeus or Sabre PSS
• But six of ten utilize IT solutions provided by Travelport
o Hosting decisions do not drive distribution decisions
• By definition travel intermediaries book all carriers regardless of host
Travelport is focused on differentiated value creation
at the front-end
Employees:
Hospitality
Hotels
Rental car and ground transport
B2B travel industry digital media
Mobile commerce
MTT
Locomote
Airline merchandising
Ancillaries and branded fares
Tailored offerings
Aggregated shopping
Payments
eNett
Airlinecontent
Network carriers
Low cost carriers
Hotels
~650,000 chain &
independent hotel
properties
Car rental
~36,000 car rental
locations
Otherdistribution
~60 cruise lines
13 major rail networks
Back-end:IT solutions
IT Solutions
Distribution
Co
nte
nt
Con
ten
t
Fro
nt-E
nd
GDSTravel
Commerce
Platform
5
Travelport remains essentially a transaction fee based business
Mobile commerceMobile commerce
• MTT continues to perform well adding global airlines and TMCs to its client roster, across multiple regions
65%
of Air segment revenue in FY 15 from ‘away’ bookings
(FY 11: 58%)
airlines1 live with merchandising,including fares families, branded
fares, ancillaries and tailored offers
160
The key proof points of our industry-leading platform
Airline distribution and merchandisingAirline distribution and merchandising
38
40
41
43
47
FY 11
FY 12
FY 13
FY 14
FY 15
Hospitality attachmentHospitality attachment
Hospitality segments per 100 airline tickets issued
$2m
$19m
$45m
$67m
$92m
FY 11
FY 12
FY 13
FY 14
FY 15
Payments
eNett revenueEtihad Airways mobile app launched in the App Store on April 11, 2016
Q1 2016 revenue up +76% YoY
61 As of May 23, 2016
Our model – selling the way the airlines want to sell
7
Before: Legacy Desktops After: Travelport Smartpoint
Changing the distribution paradigm with a supplier-centric focus on presenting product to the customer
• Travelport’s proprietary point-of-sale application for
travel agencies and management companies
• Integrates ‘Rich Content and Branding’ merchandising
capabilities
• Enables sale of ancillary services and promotion of
entire product value and brand propositions
• Traditional GDS screen used to present airline products
for well over 30 years
• Screens reduce airline’s product offerings to a line of
alphanumeric text
• Much less intuitive user interface for agents
1 Represents percentage of air segment volumes (for FY 2015) derived from airlines signed to Rich Content and Branding as of May 23, 20162 As measured by passengers boarded; top ten airlines represent around a third of global passengers boarded
Etihad.com – ‘Business Class with Etihad is not
business as usual’
Travelport – Airline merchandising today within our
award-winning Smartpoint point-of-sale
Airlines signed up to ‘Rich Content and Branding’ represent
~60% of our air segment volumes
8
• Our high value-adding merchandising solutions, including ‘Rich Content and Branding’,
continue their rapid momentum
• Now at a critical mass of participation; 160 airlines signed to date represent ~60%1 of our air
segment volumes (including eight out of the world’s 10 largest airlines2)
‘Tailored merchandising’ made real today within our
award-winning Smartpoint point-of-sale
• Travelport further expanded its product set in 2015 to include tailored offerings
• Tailored offerings include negotiated deals between corporates and airlines; available through
self-booking tools and to travel agencies
‘Tailored merchandising’ available through our
universal API (uAPI) technology
Travelport's tailored offerings – another unique differentiator
9
We offer leading airline technology to our partners
10
Data AnalyticsDelta Hosting Solutions Branded Fares
• Signed new long-term
agreement in 2014 to run
Delta host reservation and
key operating system (AIR4)
• Recently upgraded to zTPF
• Provide Rapid Reprice, EMD
and other technology
• Extending to other Delta
investment carriers (Virgin
Atlantic)
• Emirates ‘Inspire Me’ -
exclusive live-search
solution: proprietary
mapping and search
technology infuses real-time
availability and pricing into
the search process
• Emirates Fare Branding and
Upsell - choose the right
fare brand based on value,
not just the lowest price,
and easily upgrade to the
next branded fare
• MTT focuses on delivering
world-class mobile solutions
to leading airlines, hotels
and travel agencies
• Designs and runs mobile
apps for easyJet, BCD
Travel, LATAM, Etihad,
Saudia, Capita Travel and
Singapore Airlines
• Multi-award winning service
GDSDelta
Hosting
Mobile Commerce
• Cloud-based data and
analytics for route planning,
fares, revenue management
and sales effectiveness.
• Global scale and used by
multiple airlines
• Travelport provides a broad range of innovative technology solutions and services to our
customers to enhance their direct selling and customer experience capabilities
Case study: Value-add solutions for Emirates’ own website
11
International (excl. US) air market share is stable
12
• International regions (~70% of total GDS market) tend to yield higher RevPas and margins
than the US
• International GDS segments 3% CAGR between Q1 12 and Q1 16; faster than US segments
• Travelport air share gains in APAC, Latin America; stable in Europe
0%
10%
20%
30%
40%
50%
60%
Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16
Travelport Amadeus Sabre & Abacus
• ~36,000 car rental locations bookable
• ~60 cruise lines & tour operators and 13 major rail networks
• B2B payments by travel agencies to travel providers
(eNett)
• Mobile platform and apps for the travel industry (MTT)
• Corporate self-booking tools (Locomote and Hotelzon)
• Digital media B2B advertising (~3,500 advertisers)
BEYOND AIR2015 revenue: $492m (+16%)
23% of Travel Commerce
Platform Revenues
(21% in FY 2014)
Hotel Distribution
• ~650,000 hotel properties bookable
• Retail rates for independent hotels from leading
aggregators (Travelport Rooms and More)
• Corporate rates for independent hotels (Hotelzon)
Car, Tours and Other Distribution
Digital and Mobile Solutions
Payments
Differentiated focus on travel commerce Beyond Air
13
Travelport has significant advantages through the depth and breadth of hotel content all bookable in real-time
Travelport Hotelzon – enhancing content, efficiency and
choice in the corporate hotel booking market
Travelport Smartpoint includes significant further
enhancements to hotel booking
Latest version of Hotelzon OnlineTravelport Smartpoint version 7.0, launched March 2016
Powering hotel distribution to corporate and retail
14
Focus on mobile commerce provides differentiation and value
15
Travelport Mobile
Locomote Corporate Travel Platform
• Strengthens offering to both Corporates and TMCs,
combining mobile technology with leading travel content
• Corporate travel management apps, focused on providing
solutions for all corporate travel management needs,
incorporating artificial intelligence and actionable data
analytics
• Focused on delivering world-class mobile solutions to
leading airlines, hotels and travel agencies
• Airline customers use a variety of IT solutions providers
• ~200 employees specialized in mobile travel commerce
• 22 million downloads to date of apps developed by
Travelport for customers; top-rated travel app in 78
different countries
• Key adjacency that significantly enhances Travelport’s
Beyond Air value proposition, with mobile fast becoming
the key travel commerce channel
Key customers include:
Example Locomote apps:
Fast-growing eNett is redefining B2B payments…
Reconciliation
Risk Reward
• Rebates paid on
every transaction
• Reduced FX
exposure
• Fraud protection
• Protection against
airline insolvencies
100% data match between booking and payment - avoids time-consuming, manual
reconciliation processes
AGENCIES
TRAVEL PROVIDERS
Strong barriers to entry
• Pre-funded model developed in partnership with
Optal payment experts
• Unique banking relationships established
• Deep, strategic partnership with MasterCard
• Fully integrated into travel agency workflows and
GDS-agnostic
• First mover advantage and proven business
model
• Competitive advantage over commercial banks
and our traditional GDS competitors
• Deployed in >70 countries
Uniquely positioned for accelerating growth within the >$800bn addressable market
$92m reported revenue in FY 2015 for Travelport
Unique value propositionDriving security, efficiency and value for travel
agencies and travel providers
16
…with revenue rapidly accelerating
17
eNett reported revenue (in $ millions)
$2
$19
$45
$67
$92
$33
2011 2012 2013 2014 2015 Q1 2016
First mover advantage in a nascent
industry
More than 1/3
of FY 2015
revenue
Reliable solution with broad acceptance
Generating EBITDA, net income and free
cash flow since 2013
Investments in Beyond Air delivering strong, sustainable growth
• Beyond Air continues its strong growth (+16% in FY 2015; +23% in Q1 2016)
– eNett revenue up 36% with strong pipeline into 2016 (+76% in Q1 2016)
– Beyond Air revenue excluding eNett up 12% (+11% in Q1 2016)
• Hospitality attachment rate1 reaches 47% in 2015
• Mobile performing well with recent major business wins including Etihad Airways and Aeroméxico
+3%
FY 2015
+36%
FY 2015
+11%
FY 2015
+8%
FY 2015
Continued strong Beyond Air Revenue growth
CAGR 15%
326 371424
492
FY 2012 FY 2013 FY 2014 FY 2015
Hotel room nights sold Car rental days sold
Hospitality attachment 1 eNett Revenue
+14% +14% +16%
YoY
YoY YoY
YoY
$ millions; CAGR FY 2012 – FY 2015
181 Hospitality segments per 100 airline tickets issued
Full year 2015 summary
1 Adj. FCF – Adjusted Free Cash Flow
Net Revenue
$2,221m
Adj. EBITDA
$535m
Adj. Net Income
$122m
Adj. EPS (diluted)
$1.00
Adj. FCF1
$134m
3%YoY
(1)%YoY
$133mYoY
$1.12YoY
$173mYoY
Key Financials Travel Commerce Platform Revenue (YoY Growth)
RevPas progression and YoY Growth
$5.73 $6.00 $6.29 $6.63
Q1 2015 Q2 2015 Q3 2015 Q4 2015
FY 2015 +8%
Q1 2015 Q2 2015 Q3 2015 Q4 2015
FlatYoY
+1%YoY
+5% YoY
+7%YoY FY 2015 +3%
Air YoY (3)% (2)% 2% 3%
Beyond Air YoY 14% 12% 17% 21%
+2%YoY
+4%YoY
+11% YoY
+15%YoY
$5.73$6.00
$6.29
$6.63
19
Q1 2016 highlights
• Travel Commerce Platform revenue up 7%
– Solid revenue growth in Air driven by pricing, mix
and merchandising
– Beyond Air grew 23% with eNett revenue up 76%
– International revenue growth of 12%
• Adjusted EBITDA up 12% to $154m
• Good operational performance drives significantly
higher Adjusted Net Income and higher Adjusted
Free Cash Flow
Adj. EBITDA
$154m 12%
YoY
Net Revenue
$609m
Adj. Net Income
$51m
Adj. EPS (diluted)
$0.41
Adj. FCF1
$(5)m
6%YoY
$0.17YoY
$16mYoY
1 Adj. FCF – Adjusted Free Cash Flow
$21mYoY
20
Building a track record of balanced and disciplined capital allocation
Our capital structure & capital allocation strategy
21
Simplified and improved capital structure
Continued investment
Mergers and acquisitions
Returns to debt holders
Returns to equity holders
Continuing to build a track record of balanced and
disciplined approach to capital allocation
• Significant reduction in total debt, from $3.8bn in
2011 to $2.4bn today
• Current debt is single tranche, raised publicly in the
capital markets
• Covenant-light, fully pre-payable without any
penalties and no significant maturities until 2021
• Strong free cash flow conversion, even after debt
servicing
• Target to reduce net leverage to around 3.0x
Adjusted EBITDA by 2018
(in $ millions, except per share amounts)FY 2016
Guidance*Growth
Net revenue 2,350 – 2,400 6% – 8%
Adjusted EBITDA 565 – 580 6% – 8%
Adjusted Net Income 140 – 150 15% – 23%
Adjusted Income per Share – diluted** 1.12 – 1.20 12% – 20%
Adjusted Free Cash Flow 145 – 165 8% – 23%
Outlook – 2016 and beyond
* Guidance assumes foreign exchange rates as of April 28, 2016
** Based on expected FY fully diluted shares outstanding of 125m
Long Term Goals
By 2020, achieve:
• $3bn Travel Commerce
Platform revenue, with
>1/3 in Beyond Air
• > $250m Adj. Free Cash
Flow
22The information presented here represent forward-looking statements and reflect our expectations as of May 5, 2016. We assume no obligation to update these statements. Results
may be materially different and are affected by many factors detailed in this presentation and in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the
SEC on February 18, 2016 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed on May 5, 2016.
Creating long-term shareholder value
Strong core
Core business model is resilient,
recurring and transaction-based with
strong competitive advantages
Differentiated focus
Leading technology
Significantly upgraded
technology platform and
industry-leading product suite
Truly global
Broad international presence to
leverage international focus of our customers
Focused on the markets
that need us
Strong focus on corporate and service-
premium travel
Compelling financials
Entering clear growth phase with multiple,
compelling drivers
Disciplined capital
allocation
Capital-light model with
strong free cash flow generation
and clear and disciplined
approach to capital allocation
Differentiated “platform”
approach to address evolving travel commerce ecosystem – in
airline merchandising,
hospitality, mobile
commerce and payments
23
Q1 2016 Highlights
APAC
International revenue growth at double-digit level for third
successive quarter
• International revenue up 12% to $425m
– 73% of Travel Commerce Platform revenue
(Q1 2015: 70%)
• Higher-value business drives International
RevPas up 11% to $7.81
• International growth more than offset
anticipated revenue decline in the US
• Continued success in Europe, Latin America &
Canada and Asia Pacific
– Europe sees benefit of wins in H2 2015 driving
stronger growth in Q1
– Latin America & Canada delivers fourth
successive quarter of double-digit growth
– Asia Pacific builds on prior year momentum
with good Q1 performance
Broad geographic footprint driving growth
Q1 2016 Travel Commerce Platform revenue by region -YoY Growth (%)
+9%
+18%
International
+18%
Flat
+12%
MEA
Europe
LATAM & Canada
+7% All Regions
US (4)%
25
+3%
• Air revenue up 3%; Beyond Air revenue up 23%
• Technology Services stable YoY; new revenue generating projects replacing completed 2015
activities
• RevPas of $6.43 (+12%) delivered Travel Commerce Platform revenue growth of 7%
• Over half of RevPas growth driven by improving pricing, mix and merchandising in Air
110 135
432 444
30
30
Q1 2015 Q1 2016
Beyond Air Air Technology Services
Net revenue growth in Q1 Key growth drivers – Q1 2016
+23%
572 609+6%
flat
Solid growth in net revenue
Travel Commerce
Platform revenues
comprise Air and
Beyond Air
$ millions; Percentage growth
+12%+76%+5%
68%
RevPas
Away bookings1
Hospitality attachment 3 eNett Revenue
YoY YoYYoY
1. % of Air segment revenue from away bookings
2. Number of airlines live with Travelport’s merchandising solutions
3. Hospitality segments per 100 airline tickets issued
+12%
International Revenue
YoY
~160
Airline merchandising 2
Airlines
26
Adjusted EBITDA
• Adjusted EBITDA continues to benefit from higher margin away/International business and airline
merchandising solutions (including Rich Content and Branding)
• Commissions increase primarily due to geographical footprint and mix
• SG&A* increase primarily due to workforce expense related to acquisitions, partially offset by FX
benefit (net of hedging)
* SG&A – excluding non-core corporate costs (see appendices for further details)
** Commissions – excluding amortization of Customer Loyalty Payments (see appendices for further details)
Adjusted EBITDA – Q1 Bridge
$ millions
Q1 2015
Adjusted EBITDA
Commissions** TechCosts
SG&A Costs*
Q1 2016
AdjustedEBITDA
NetRevenue
(5)
137 154
(14) (1)
37
27
Strong Adjusted Net Income and improved Free Cash Flow
Adjusted Free Cash Flow – Q1 Bridge
• Adjusted EBITDA growth drives continued improvement in Adjusted Net Income and Free Cash Flow
• Adjusted Income per Share (diluted) of $0.41 (+$0.17 YoY)
(21)
Q1 2015Adjusted
Free Cash Flow
AdjustedEBITDA
CLP * & Capex **
WorkingCapital
& Other
Interest& Tax
Q1 2016Adjusted
Free Cash Flow
17
(3)(1)
3
Q1 2015Adjusted
Net Income
Q1 2016Adjusted
Net Income
Depr’n of PPE & Amortization
of CLPs
Interest Expense& Taxes
51
117
AdjustedEBITDA
3
Adjusted Net Income – Q1 Bridge
(5)
$ millions $ millions
30
28
AppendicesFinancial model
Capital light
Highly attractive financial model
• Transaction-based, volume driven model (not linked to price)
• High recurring revenue from air and beyond air providers
Transaction-Based,
Recurring, Highly
Visible Revenue
Diversified and
Resilient Model
• Legacy contracts addressed with 2015 being the transition year for their financial impact
• Global, geographically balance business with limited regional concentration
• Consistent performance, even in challenging macro environment
• No customer accounts for more than 10% of revenue
Strong Free Cash
Flow Generation
• Low capital intensity
• Low working capital needs
• Cash flow conversion1 of ~70%
• Expect enhanced long-term cash flow through deleveraging and growth
Strategic
Deployment of
Capital
• Leverage target of around 3x Adjusted EBITDA by 2018
• No current plan to change return of capital to shareholders
• Free cash flow used for regular dividend, deleveraging and tuck-in acquisitions
30 1 Cash flow conversion calculated as (Adjusted EBITDA – Capital Expenditures) / Adjusted EBITDA
Differentiated platform with compelling financial drivers
RevPasxSegmentvolume
Travel
Commerce
Platform
revenue
Technology
Services+ =
Air, hotel and other
travel agency segments
Airline distribution and merchandising
Hospitality (hotel, car and other) attachment
Payments
Mobile commerce
Strong focus
on higher value
away and
international
business
=
Beyond AirAir
31
Capital Expenditures ($ in millions)
Low Capital Intensity
Net Revenue ($ in millions)
$108$127
$144 $142
5.4% 6.1% 6.7% 6.4%
2012 2013 2014
$2,002$2,076
$2,148 $2,221
2012 2013 2014
2015
2015
Cash Flow Conversion (1)
Strong Cash Flow Conversion
Adjusted EBITDA ($ in millions)
78% 75% 73% 73%
2012 2013 2014
$494$517
$540 $535
2012 2013 2014
2015
2015
1. Cash flow conversion calculated as (Adjusted EBITDA – Capital Expenditures) / Adjusted EBITDA
Capital Expenditures as % of Net Revenue
Low capital intensity and strong cash flow
32