Business SummaryWebjet Limited (WEB) is an online travel agency operating in Australia andNew Zealand. WEBs business consists of a B2C division comprising theWebjet, Online Republic brands and WebBeds a B2B division comprising theLots of Hotels and Sunhotels brands and FIT Ruums.

Webjet Established in 1998. It is Australia and New Zealand's largest onlinetravel agency, leading the way in online travel, tools and technology. Itsenables customers to compare, combine and book the best domestic andinternational travel flight, deals, hotel accommodation, holiday package deals,travel insurance and car hire worldwide.

Online Republic Acquired in June 2016, Online Republic is a market leadingglobal e-commerce group based in New Zealand specialising in onlinebookings of rental cars, motorhomes, cruises and digital marketingconsultancy.

Lots of Hotels The B2B WebBeds business was launched in February 2013.Lots of Hotels sources content ranging from one to five star hotels andresorts which offering rooms at more than 250,000 hotels worldwide. Lots ofHotels currently operates in 45 markets.

Sunhotels Its Acquired in July 2014, Sunhotels is an established onlineaccommodation and ground services provider specialising in the provision ofa wide range of hotels, apartments, experiences and transfers worldwide.Key destinations are Europe, Middle East, North America, the Caribbean andThailand, with a strong position in Mediterranean beach destinations, sellinginto travel trade clients in the major markets of Nordic Countries, UK, Spain,Italy and Germany.

FIT Ruums Launched in November 2016, FIT Ruums focuses on B2B traveldistribution for worldwide hotel accommodation and transfers in Asia. FITRuums offices are now open in China, Hong Kong, India, Indonesia, Japan,Malaysia, Singapore, South Korea, Taiwan and Thailand.

Disposal : In December 2016, the Company sold the Zuji business to UrielAviation Holdings Limited

Acquisition: On 1 June 2016, acquired entities comprising the OnlineRepublic Limited- NZ Car Rental Republic Limited, MotorHome RepublicLimited, Car Rental Republic Limited, Search Republic Limited, CruiseRepublic Limited, Earlybird (Shenzhen) Limited, Online Republic DomainsLimited, Online Republic Travel Payments Pty Limited. On 2 August 2017Webjet announced the acquisition of JacTravel, a market leading EuropeanB2B travel business.

Latest ResearchSpinning a Web of growth

The WEB Interim Result (normalised NPAT up 99% to $21.3m vs BPestimate of $19.8m) highlighted the following key takeaways:

1) Upgrade to guidance despite negative impact of credit card surcharge –The key takeaway from the result was the fact that the Company upgradedFY17 EBITDA guidance from $57m to $61m even after absorbing theadverse $5m impact of the credit card surcharge costs (1H17 $2m, 2H17$3m). We note these expenses are expected to be ongoing with a one-offimpact on FY17 like to like growth rates in the Domestic Flights business.To this end we note that the Domestic Flights business continues to win

GICS - Retailing

Webjet Limited

ASX Code: WEB Price: $12.27 12 Mth Target Price: $13.57 Rating: Buy

Important Disclaimer - This may affect your legal rights: Because this document has been prepared without consideration of any specific client's financial situation, particular needs and investmentobjectives, a Bell Potter Securities Limited investment adviser (or the financial services licensee, or the proper authority of such licensee, who has provided you with this report by arrangement withBell Potter Securities Limited) should be consulted before any investment decision is made. While this document is based on the information from sources which are considered reliable, Bell PotterSecurities Limited, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate.Nor does Bell Potter Securities Limited accept any responsibility to inform you of any matter that subsequently comes to its notice, which may affect any of the information contained in this document.This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Bell Potter Securities Limited. This is generalinvestment advice only and does not constitute advice to any person.Disclosure of Interest: Bell Potter Securities Limited receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in thiscommission. Bell Potter Securities and its associates may hold shares in the companies recommended.

Snapshot

DateMarket Cap.Shares on issue12 Month High12 Month Low

27 August 2019$1,664m135.6m$17.73$10.18

RatingRating12 Mth Target Price

Capital GainGross Yield

Implied Total Return

Buy$13.576.8%4.1%10.9%

Investment FundamentalsFYE 30 Jun 2018A 2019F 2020F 2021F

Profit $m 48.9 60.5 73.9 80.8Profit (norm)* $m 48.9 60.5 73.9 80.8

EPS* ¢ 50.0 61.8 75.5 82.5EPS Growth % 7.7 23.6 22.2 9.3P/E* x 25.4 20.6 16.8 15.4P/E Relative % 0.0 0.0 0.0 0.0

DPS ¢ 23.6 29.5 36.4 39.9Yield % 1.9 2.3 2.9 3.1Franking % 100.0 100.0 100.0 100.0* Adjusted for goodwill and unusual itemsSource: Based on Bell Potter estimates

Share Price Chart

Total Return on $10,000 Investment

share with booking volumes for both Domestic and International well abovemarket and we expect this trend to continue; and

2) Online Republic and B2B drove the upgrade – The Online Republicacquisition appears well positioned to deliver FY17 EBITDA of at least$15m (1H17 $7.2m with 2H bias) which is well above the ~$11m indicatedat the time of acquisition. In addition, the B2B Division reported an 87%increase in 1H17 EBITDA to $6.2m driven by strong revenue growth, anincreasing proportion of directly contracted hotels (margin benefit) and theThomas Cook management fee impacting for the first time. 1H17 bookingvolumes were up 37% year on year which suggests the investment in thebusiness in FY16 is beginning to see benefits. We consider this Divisionwell positioned to deliver against full year guidance (EBITDA of $11m after$3m FIT Ruums start-up costs); and

3) Zuji an exceptional outcome– We view the $26.8m realised gain on theZuji sale as an excellent outcome given the lower than expected resultsdelivered post acquisition.

For more information see research 24 Feb 2017.

GICS - Retailing

Webjet Limited

ASX Code: WEB Price: $12.27 12 Mth Target Price: $13.57 Rating: Buy

Important Disclaimer - This may affect your legal rights: Because this document has been prepared without consideration of any specific client's financial situation, particular needs and investmentobjectives, a Bell Potter Securities Limited investment adviser (or the financial services licensee, or the proper authority of such licensee, who has provided you with this report by arrangement withBell Potter Securities Limited) should be consulted before any investment decision is made. While this document is based on the information from sources which are considered reliable, Bell PotterSecurities Limited, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate.Nor does Bell Potter Securities Limited accept any responsibility to inform you of any matter that subsequently comes to its notice, which may affect any of the information contained in this document.This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Bell Potter Securities Limited. This is generalinvestment advice only and does not constitute advice to any person.Disclosure of Interest: Bell Potter Securities Limited receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in thiscommission. Bell Potter Securities and its associates may hold shares in the companies recommended.

Snapshot

DateMarket Cap.Shares on issue12 Month High12 Month Low

27 August 2019$1,664m135.6m$17.73$10.18

RatingRating12 Mth Target Price

Capital GainGross Yield

Implied Total Return

Buy$13.576.8%4.1%10.9%

Investment FundamentalsFYE 30 Jun 2018A 2019F 2020F 2021F

Profit $m 48.9 60.5 73.9 80.8Profit (norm)* $m 48.9 60.5 73.9 80.8

EPS* ¢ 50.0 61.8 75.5 82.5EPS Growth % 7.7 23.6 22.2 9.3P/E* x 25.4 20.6 16.8 15.4P/E Relative % 0.0 0.0 0.0 0.0

DPS ¢ 23.6 29.5 36.4 39.9Yield % 1.9 2.3 2.9 3.1Franking % 100.0 100.0 100.0 100.0* Adjusted for goodwill and unusual itemsSource: Based on Bell Potter estimates

Share Price Chart

Total Return on $10,000 Investment

Profit & Loss ($M)2015A 2016A 2017A 2018A 2019A

Sales Revenue 117 152 199 752 366Total Revenue ex. Int. 119 155 235 762 367EBITDA 31 37 42 88 126Depreciation & Amort. -5 -6 -7 -22 -36Goodwill Amortisation -- -- -- -- --EBIT 27 31 35 66 90Net Interest 0 -0 -0 -6 -13Profit Before Tax 27 30 35 60 76Income Tax -6 -8 -9 -17 -14Outside Equity Int. -- -- -- -- --Profit after Tax 21 22 26 43 62Significant Items after Tax -4 -0 27 -2 -2Reported Profit after Tax 18 22 52 41 60Preferred Dividends -- -- -- -- --

Cash Flow ($M)2015A 2016A 2017A 2018A 2019A

Receipts from Customers 129 443 639 1,380 --Funds from Operations 38 52 47 132 --Net Operating Cashflow 35 47 35 121 46Capex -8 -9 -17 -28 -33Acquisitions & Investments -20 -59 -- -320 -210Sale of Invest. & Subsid. -- -- 55 -- --Net Investing Cashflow -28 -67 37 -348 -242Proceeds from Issues -- -- 32 170 160Dividends Paid -11 -11 -15 -21 -26Net Financing Cashflow 17 63 -11 236 225Net Increase Cash 24 42 61 9 28Cash at Beginning 52 76 116 178 191Exchange Rate Adjust. -0 -2 1 4 -8Cash at End 76 116 178 191 211

Ratios and Substantial Shareholders2015A 2016A 2017A 2018A 2019A

Profitability RatiosEBITDA Margin % 26.94 24.25 21.01 11.70 34.31EBIT Margin % 22.91 20.29 17.54 8.77 24.48Net Profit Margin % 18.06 14.78 12.90 5.74 16.89Return on Equity % 25.59 14.82 11.88 9.75 9.61Return on Assets % 10.76 6.18 5.70 4.42 4.68

Debt/Safety RatiosNet Debt/Equity % -61.55 -40.06 -59.47 -15.37 -0.85Interest Cover x -2,232 63.85 529.42 11.60 6.69

Top 5 Substantial ShareholdersCommonwealth Bank of Australia and its related bodies corporate 8.3%UBS Group AG and its related bodies corporate 7.9%Mitsubishi UFJ Financial Group, Inc 7.8%Carol Australia Holdings Pty Limited 7.6%John Guscic 5.2%

Balance Sheet ($M)2015A 2016A 2017A 2018A 2019A

Cash & Equivalent 76 116 178 191 211Receivables 35 80 131 266 362Inventories -- -- -- -- --Other Current Assets 7 10 21 13 6Current Assets 118 206 330 470 580Prop. Plant & Equipment 8 12 12 22 23Intangibles 72 153 139 583 907Other Non-Current Assets 7 10 28 13 6Non-Current Assets 85 171 163 614 942Total Assets 203 378 493 1,084 1,522Interest Bearing Debt 25 55 49 123 206Other Liabilities 95 171 227 518 672Total Liabilities 120 226 276 641 878Net Assets 82 152 216 443 644Share Capital 43 102 136 329 511Reserves 6 5 -2 12 -3Retained Earnings 34 45 81 102 136Outside Equity Int. -- -- -- -- --Total Shareholders Equity 82 152 216 443 644

Current Analyst Recommendations *

* Source: Morningstar. This chart shows the spread of recommendations from thosebroker analyst's in Australia with research coverage of this stock.

Principals & DirectorsPrincipals

Company Secretary Mr Tony RistevskiMr Zi Mtenje

Directors

Mr Roger Keith Sharp(Non-Executive Director,Non-ExecutiveChairman)Mr John Guscic(Managing Director)Mr Donald Ian Clarke(Non-Executive Director,Non-Executive DeputyChairman)Ms Antonia (Toni) Korsanos(Non-Executive Director)Mr Brad John Holman(Non-Executive Director)Ms Shelley Roberts(Non-Executive Director)

To access further Research or for information regarding our recommendations and ratings please seewww.bellpotter.com.au

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Webjet Limited

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