Make My Trip Investor Presentation 2011
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Transcript of Make My Trip Investor Presentation 2011
Investor Presentation
February 2012
Safe Harbor Statement
Certain statements contained in this presentation are “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements reflect our current expectations or forecasts of future events and our future performance and do not relate directly to historical or current events or our historical or current performance and are subject to risks and uncertainties, some of which are outside of our control, that could cause actual outcomes and results to differ materially from historical results or current expectations. Most of these statements contain words that identify them as forward looking, such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, “seek”, “will”, “may”, “opportunity”, “target” or other words that relate to future events, as opposed to past or current events. Among the factors that could cause actual results to differ materially are our ability to maintain and expand our supplier relationships; our reliance on technology, our ability to expand our business, implement our strategy and effectively manage our growth; political and economic stability in and around India; our ability to successfully implement our growth strategy; our ability to attract, train and retain executives and other qualified employees; increasing competition in the Indian travel industry and risks associated with online commerce security. In addition to the foregoing factors, a description of certain other risks and uncertainties which may cause actual results to differ materially can be found in the “Risk Factors” section of MMYT's 20-F dated September 2, 2011, filed with the U.S. Securities Exchange Commission (“SEC”). Copies of this material is available from the SEC, our website or our Investor Relations department. We cannot assure you that the assumptions made in preparing any of the forward-looking statements will prove accurate or that any projections will be realized. We expect that there will be differences between projected and actual results. These forward-looking statements speak only as of the date of this presentation, and we do not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements. All forward-looking statements attributable to us are expressly qualified in their entirety by the cautionary statements contained herein and in our future annual and quarterly reports as filed with the SEC.
2
Non-IFRS Metrics & Note on Unaudited Financials
3
The following non-IFRS metrics will be used in this presentation:
Gross Bookings – represents total amount paid by our customers for travel services and products booked through us,
including taxes, fees, and other charges, and are net of cancellation and refunds, but does not include other revenues that are generated from 3rd party advertisement on our website, commissions and fees earned from the sale of railway and bus operators and fees earned by facilitating travel insurance policies to customers.
Net Revenues – represents Revenues less Service Costs (costs of procuring the relevant services for sale to customers, including procurement costs paid to hotel and package suppliers for the acquisition of hotel rooms, sightseeing costs, local transport costs and on occasion the cost of air tickets when the company pre-purchases air ticket inventory in order to enjoy special negotiated rates and revenues)
Net Revenue Margins – is defined as Net Revenues as a percentage of Gross Bookings, and represents commissions, fees, incentive payments and other amounts earned in our business. We follow net revenue margin trends closely across our various lines of business to gain insight into the profitability of our various businesses.
Fiscal Year End – March 31st
Key Investment Highlights
Experienced Leadership Team Aligned With Shareholders
Highly Scalable Operating Leverage
India’s Leader in Online Travel & eCommerce
Strong Supplier Partnerships & Innovative Distribution Channels
Advanced & Secure Technology Platform
Multiple Strategies to Drive Earnings Growth
Business Overview
036
039
133
41
108
4
210
170
0
68
150
200
125
125
125
54
92
90
178
178
178
58
118
252
India: A Growth Story
6
4th Largest Economy Globally Rapidly Growing Middle Class
2011 GDP at Purchasing Power Parity All India Households by Income Brackets
Source: The CIA World Factbook (2011 estimates) Source: The Economic Times
US$ Trillions MM Households
31
54
114
0
50
100
150
2011 2016 2026
160 MM
people
267 MM
people
547 MM
people
2.3
4.4
2.4
4.4
15.415.0
11.3
0
4
8
12
16
European
Union
USA China India Japan Russia Brazil
100
121*
42
62
81
0
20
40
60
80
100
120
2007 2008 2009 2010 2011
Internet Population Growing Rapidly
7
Current 10% Net Penetration Provides Plenty of Headroom to Grow
Rapid Growth in Internet Users
2007-2010 Data Source: Internet World Stats *2011 Estimates: Indian Market Research Bureau (IMRB) & Internet & Mobile Association of India (IAMAI)
Million Users Total net users to reach 250 million by 2015 (IAMAI)
12 million broadband connections growing to over
160 million households by 2014 (TRAI Plan)
350 million 3G connections by 2015, up from
140 million in 2011 (Wireless Intelligence)
15.5 million smartphone shipments in CY2011, forecasted to grow to 77.5million by 2015 (CyberMedia Research & IDC)
Forecasted to Expand Further
Fast Adoption of Online Travel Bookings
8
India: Fastest Growing APAC's Online Travel Space in 2012
Source: PhoCusWright, 2010
US$ MM
Growing Travel Market Rising Penetration of Online Booking Total Travel Gross Bookings in India Total Online Gross Bookings in India
US$ MM
15,808
17,652
19,922
22,813
0
8,000
16,000
24,000
2009 2010 2011 2012
3,342
4,362
5,524
7,027
0
1,500
3,000
4,500
6,000
7,500
2009 2010 2011 2012
Travel Industry Capacity Coming Online
9
Indian Air Carrier Fleet Size & Orders Hotel Chains to Increase Available Rooms
Accor Hotels: 90 more hotels planned by 2015, 21 operational by 2013 Hilton: currently operates 5 hotels, plans to have 14 hotels in next 2 years Carlson Hotels: 100 total hotels planned by 2015 “Ambitious 2015” plan ITC : looking to double its room inventory to 16,000 plus rooms, or 40 properties IHCL: will add 27 properties or 3,700 rooms in 24 months
Capacity expected to grow more than double
Sources: Airbus.com, Boeing.com, individual airline websites, as of January 31, 2012
+100k rooms to be added by 2015
Airline In Service Orders & Options Air India 121 30
Jet Airways 100 39
KingFisher 64 69
GoAir 12 79 IndiGo 49 226
SpiceJet 39 54 Jet Lite 19 0
Total 404 497
6.2
11.5
18.1
0
5
10
15
20
2004 2009 2014
Market Expands Beyond Domestic Travel
10
Indian Outbound Travelers Forecasted to Reach 50+ million by 2020 – (UNWTO)
UAE (984)
Singapore (941)
Malaysia (916)
Egypt (773) Hong Kong
(297)
Thailand (572)
UK (801)
France (392)
Italy (403) China
(434)
USA (607)
MM People Country Name (‘000 Indian Departures)
Growing Outbound Departures by Indians Top Destinations for Indian Outbound Travelers, 2014
Source: Euromonitor, 2010
Market Leader in India’s OTA Industry
11
Source: PhoCusWright, Mar 2010
Most visited online travel website in India
Single largest seller of air tickets for
all Indian Full Service & Low Cost Carriers
Largest producer of online room bookings for many
hotel chains in India
Largest domestic e-commerce company
with over 4.0 million monthly unique visitors (December 2011 comScore)
48%
Yatra 24%
Cleartrip 18%
Others 10%
#1 in Gross Bookings #1 in Total Gross Bookings
Keys to Our Success
12
Strong Brand Recognition
“Best Online Travel Agency & Best Domestic Tour Operator” -Times of India 2011
High rates of repeat & direct site traffic
Most searched online travel brand with average of 8.5 million visits per month in Fiscal Q3
HSBC Partnership - Co-Branded VISA card
Superior User Experience
User-friendly interface (online & offline) - Hotels 3.0
Simple & fast responding booking engines
Innovative Customer Service Online Support
Customer Loyalty Program – MyTripRewards
Operational Excellence
Web analytics to manage site traffic & enhance conversion rates
Continuous monitoring of key metrics i.e. conversions, first call resolutions, customer satisfaction
Web infrastructure 24x7 alert systems
Open Work Culture to Drive Innovation & Growth
#3 in Great Places to Work (India 2011)
Offering Comprehensive Travel Services and Products
13
Large Target Market: Indian Middle Class, Non-Resident Indians, Domestic Small and Medium Enterprises
Air Ticketing Domestic Flights
(within India)
International Flights
(inbound & outbound to/from
India)
Emerging Segments Travel Insurance
Rail Ticketing
Bus Ticketing
Car Hire
Website Advertising
Hotels & Packages Holiday Packages in India
International Holiday Packages
Standalone Hotel Reservations
Flight Plus Hotel Deals
Air Ticketing
75%
Hotels & Packages
21%
Emerging Segments
4%
% of Net Revenue (LTM 12/31/2011)
Established Strong Airline Partnerships
14
All Major International Airlines (GDS)
All Domestic Low Cost Carriers (Direct Connects)
All Domestic Full Service Carriers (GDS)
Single Largest Air Ticketing Agent for All Domestic Full & Low Cost Carriers in India
Widest Availability of Domestic Hotels
15
Increasing Choice & Selection to Capture Growth Trend in Online Hotel Bookings
5%
8%
30%
18%
39%
7,500+ properties in India
Hotels 3.0 Enhance Shoppers’ Experience
16
Select & Purchase Hotels on a Map
Shortlisting & Saved Results Destination Inspiration
Improved User Interface
Hotel Booking Conversions Increased Since Launch
Innovative Holiday Packages & Bundled Products
17
More choices in holiday packages versus online competitors Greatest proportion of non air net revenue in the Indian OTA industry
Top OTA Seller of Hotel Rooms In India
18
Starwood Hotels India “Today MakeMyTrip is the single largest OTA provider for Starwood Hotels in India and we are committed to strengthening this partnership as we continue to grow” -Devdutta Banerjee, Regional Director of Revenue Management Sarovar Hotels “On a year round basis MakeMyTrip is now our single largest online producer exceeding Expedia in productivity...a challenge that they had willingly accepted” - Pradeep Kalra, SVP Sales & Marketing (Sarovar Hotels) Lemon Tree Hotels “Today MakeMyTrip is our largest OTA seller for Lemon Tree hotels and we are committed to strengthening this partnership going forward.” -Rahul Pandit, President & COO (Lemon Tree Hotels) LaLit Suri Hospitality Group “MakeMyTrip is our largest OTA seller for The Lalit Hotels in India. With new hotels being added to our portfolio, we are confident that our partnership will be fruitful and productive for both of us.” -Kamal Kishore Corporate Head - Revenue Management & Channel Distribution | The LaLiT Suri Hospitality Group Keys Hotels “MakeMyTrip is the largest OTA for Keys Hotels in India and we are consistently growing in our association as higher numbers are flowing in from MMYT and as we continue opening new hotels across India. Their productivity has been consistent and timely for us to be able to plan our yields better and at the same time MMYT has given us a brilliant platform to showcase our unique hotels portfolio.” Jai Motihar - Corporate Head-Revenue Management Fortune Hotels “We are committed to strengthening our partnership with MakeMyTrip as they are our largest OTA seller of hotel rooms for Fortune.” Geetika Bahri | Asst. Revenue Manager | Fortune Park Hotels Ltd.
Largest Online Producer of Room Bookings for
Most Hotel Chains in India
Acquisitions & Investments to Drive Non Air Growth
19
Luxury Tours & Travel (May 2011)
• Increase hotel selection in Southeast Asia • Enhance travel experience • Net revenue margin expansion
iXiGO.com (August 2011)
• Technology team acquisition • User Generated Content & Social Media
My Guest House (November 2011)
• Access to ultra budget accommodation inventory • Last room availability technology
Sales and Service Channels
20
19 MakeMyTrip Travel Stores
11,000+ Affiliate Travel Agents in 700+ cities; B2B and B2C Services
Mobile Website & Smartphone Apps
Call Center: 950+ Tele Agents;
Multiple Locations; Multilingual
Chennai
Ludhiana
Delhi / Gurgaon Jaipur
Kolkata
Guwahati
Nagpur Indore Vadodra
Ahmedabad Rajkot
Surat Nasik
Mumbai Pune
Goa
Bangalore
Hyderabad
Lucknow
Social Network Presence
Online
Flexible Payment Options and Customer Service Channels
21
All Major Payment Options Accepted *Credit Cards *Debit Cards *Net Banking *Cash on Delivery *Cash Card *Easy Pay
Online Customer Support Module Cancel, Modify, Track bookings; bypassing call center
Advanced, Secure and Scalable Technology Platform
22
Robust, Reliable and Fully Integrated Technology Platform
Simple booking process
Web-enabled centralized booking system
Scalable search and caching, Comprehensive results, Quick response time
Enhanced Security by Visa payment gateway for online transactions
Integrated B2B, B2C and Mobile platforms
Multiple Strategies Driving Growth
23
Focus on regional, niche holiday players
Optimizing travel supply procurement (Luxury Tours & Travel)
Acquire & invest in technologies to accelerate growth (ixigo.com, My Guest House)
Selective Acquisitions and JVs to Further Enhance Value
Expand footprint into regional geographies (Partnerships with Tourism Boards)
Target geographies with high non-resident Indian populations (UAE)
Broaden Geographical Reach
Continue enhancement of user experience (Hotel 3.0 website)
Leverage social networks to acquire new customers (Facebook, Twitter, YouTube)
Enhance Core Technology Advantage
Increase revenue share of Hotels and Package business
Cross sell higher-margin services and products
Continue to invest in new product categories to offer a 1-stop shopping solution
Expand Product Diversity
Financial Overview
036
039
133
41
108
4
210
170
0
68
150
200
125
125
125
54
92
90
178
178
178
58
118
252
Capitalizing on Growth Trends
25
Gross Bookings Net Revenue (1)
199 261
409
648 626
26
52
57
95 121
225
313
466
742 746
0
200
400
600
800
FY2008 FY2009 FY2010 FY2011 9 mo. YTDFY2012
(US$ MM) (US$ MM)
14 19
31
48 48
2
6
8
11
15
0.7
1.2
2.5
2.6
17
25
40
61
66
0
10
20
30
40
50
60
70
FY2008 FY2009 FY2010 FY2011 9 mo. YTDFY2012
Air Ticketing Hotels and Packages Emerging Segments
Note: 1. Net Revenues represent Revenues Less Service Cost
50.1% YoY
Seasonality in Our Hotels & Packages Business
26
Transactions
42.6
31.4
50.7 51.2
73.3 74.2
110.9
0
20
40
60
80
100
120
Q1 Q2 Q3 Q4 Q1 Q2 Q3
(‘000s)
FY2011 Note 1: Fiscal years refer to year ending March 31 (fiscal) Note 2: Hotels & Packages results include acquisition of Luxury Tours & Travel
FY2012
Gross Bookings
28.2
17.4
27.2
21.9
45.3
31.2
44.0
0
5
10
15
20
25
30
35
40
45
50
Q1 Q2 Q3 Q4 Q1 Q2 Q3
(in $ million)
FY2011 FY2012
Net Revenue
3.4
2.1
2.9
2.5
5.9
3.8
5.3
0
1
2
3
4
5
6
7
Q1 Q2 Q3 Q4 Q1 Q2 Q3
(in $ million)
FY2011 FY2012
118.7% YoY
61.7% YoY
81.1% YoY
Peak Travel Quarters: Fiscal Q1 (AMJ) & Q3 (OND)
Net Revenue Margins
27
7.3%
7.8%
8.4%
7.9%
8.5%
0%
2%
4%
6%
8%
10%
FY2008 FY2009 FY2010 FY2011 9 mo.YTD
FY2012
Air Travel
Hotels and Packages
7.1% 7.2%
7.6% 7.4%
7.7%
6%
7%
8%
FY2008 FY2009 FY2010 FY2011 9 mo.YTDFY12
Commissions and incentives from airlines
Service fees from customers
Fees from GDS partner
8.9%
10.6%
14.0%
11.5%
12.5%
6%
9%
12%
15%
FY2008 FY2009 FY2010 FY2011 9 mo.YTD
FY2012
Effective Product Bundling
Mark up on Net Rates
Multiple sources underline model’s resilience
Net Revenue as % of Gross Bookings
Scalable Business Model Driving Operating Leverage
28
Operating Costs (1)
19.7% 18.0% 15.3% 16.2%
49.3%37.1%
24.3% 22.7%
47.0%
44.6%
30.6% 30.0%
74.0%
34.9%
24.0% 20.4%
0%
50%
100%
150%
200%
FY2008 FY2009 FY2010 FY2011
Payment Gateway Costs Personnel Costs SG&A Marketing Costs
135%
94%
190%
89%
Note: 1. All figures as a % of Net Revenues; Costs exclude stock based compensation charges
Operating Profit (1)
(US$ MM)
-$16.0
-$10.2
$0.8
$4.6
$8.2
(20)
(15)
(10)
(5)
0
5
10
FY2009 FY2010 FY2008 FY2011
1.9% 7.5%
Operating Profit Margin
12.4%
9 mo. YTD FY2012
Outlook
29
FY2012 guidance: Revenue less service cost range of $86 - $88 MM
Continue to invest in technology to enhance user experience
Incremental CapEx of US$5 – US$6 MM during FY2012
Complete upgrade of website (Hotel 3.0)
New mid-office system for non air business
Long term net revenue margin and operating margin outlook intact
Air Net Revenue Margin: 6.0% - 6.5%
Hotels & Packaging Margin: 14.0% - 15.0%
Adjusted Operating Margin: 25% - 30%
Key Investment Highlights
Experienced Leadership Team Aligned With Shareholders
Highly Scalable Operating Leverage
India’s Leader in Online Travel & eCommerce
Strong Supplier Partnerships & Innovative Distribution Channels
Advanced & Secure Technology Platform
Multiple Strategies to Drive Earnings Growth