EXPERIENCE CO LIMITED — Interim / Quarterly Report 2020

Feb 19, 2020

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20 February 2020

EXPERIENCE CO LIMITED (ASX: EXP) 1H20 RESULTS

Experience Co Limited (ASX: EXP) today released its Appendix 4D and Financial Report for the half year ending 31 December 2019, delivering Underlying EBITDA of $9.1 million on revenue from continuing operations of $60.3 million.

Key Highlights

• Statutory net loss after tax of $7.1 million (1H19: $7.4 million profit) after non-cash impairment of $8.0 million

• Underlying EBITDA from continuing operations of $9.1 million (1H19: $15.0 million), reflects volume decreases across Skydiving and GBR Experiences

• Skydiving volume down 9.3% to 84,085 (1H19: 92,748) with weather conditions, and bushfires (smoke haze) impacting operations from Byron Bay to Great Ocean Road, and into Queenstown New Zealand

• GBR Experiences earnings in 1H20 impacted by cyclical downturn in Tropical North Queensland tourism market which saw Cairns airport arrivals down by 3.3% on prior period

• Balance sheet improvement, 31 December 2019 pro forma net debt of $7.3 million following the divestment of Great Barrier Reef Helicopters and non-core asset sales continuing

• Bushfires and COVID-19 (‘coronavirus’) expected to adversely impact 2H20, the Group continues to monitor ongoing developments, and be proactive in mitigating the impact on our key markets and operations

• Strategy remains to reset the business in FY20 with cost rationalisation and process improvement focus areas for 2H20

The Group’s Chairman, Bob East, said: “The strategic review initiatives have provided the Group with a stronger balance sheet and improved cost control focus. This could not be more timely, with Australian and New Zealand tourism markets experiencing unprecedented near term uncertainty on the back of the Australian bushfires and COVID-19”.

John O’Sullivan, CEO added, ”The first half performance was in line with expectations, despite unfavourable weather conditions continuing to impact our Skydiving operations into the second quarter.

The Australian bushfires and the COVID-19 are catastrophic events that have directly impacted so many people, and we at ExperienceCo extend well wishes to all those affected.

Our management team will continue to be proactive in mitigating the impact of these events. With a strong balance sheet we remain committed to executing the reset of the business heading into FY21”.

www.experienceco.com info@experienceco.com T: 1300 601 899

Experience Co Limited ABN 56 167 320 470 ASX:EXP PO Box 5361 Wollongong NSW 2500

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Outlook

The second half of FY20 will be a period of re-setting the business for improved performance in FY21 and beyond. Short term priorities remain unchanged and involve executing strategic review initiatives and improving return on invested capital by:

• Business simplification and simplifying the core portfolio

• Divestment of non-core assets

• Deploying sales proceeds to pay down debt

• Conserve capital by not declaring a dividend, and being disciplined in maintaining a strong balance sheet

• Exploring organic growth opportunities and maintaining an acquisition pipeline

The Group is expecting the Australian tourism market to experience headwinds in coming months following the catastrophic bushfire events recently experienced on the Australian eastern seaboard.

Of increasing significance is the impact of COVID-19 (‘coronavirus’) on our inbound markets, and in particular restrictions on China tourism in both Australia and New Zealand. The Group continues to monitor ongoing developments, and be proactive in mitigating the impact on its operations. Notwithstanding, the Group expects to experience an adverse impact as a result of these events into the second half, however the magnitude will be determined by the duration of COVID-19 and related travel restrictions.

This release is authorised by the Directors of EXP.

Investors

John O’Sullivan – Chief Executive Officer Owen Kemp – Chief Financial Officer p: 1300 663 634 e: investor@experienceco.com

About Experience Co Limited (ASX: EXP)

Experience Co Limited (EXP) is an adventure tourism and leisure company. Founded in 1999 in Wollongong, Australia the Group has grown to a diversified adventure tourism business with core activities that include skydiving in Australia and New Zealand and Great Barrier Reef tour and diving and snorkeling experiences. The Group’s operations are located primarily on Australia’s eastern seaboard from the Great Ocean Road in Victoria, to Tropical North Queensland’s Port Douglas, complimented by the skydiving operation in New Zealand located in the world-renowned Queenstown region.

www.experienceco.com info@experienceco.com T: 1300 601 899

Experience Co Limited ABN 56 167 320 470 ASX:EXP PO Box 5361 Wollongong NSW 2500