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Novaturas Investor Presentation 2021
2266_rns_2021-05-31_f349f31c-8add-4b31-a331-5d97735f0075.pdf
Investor Presentation
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NOVATURAS
PRESENTATION FOR INVESTORS
13 May 2021
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DISCLAIMER
This presentation has been prepared by the management of AB Novaturas, with its registered office at A. Mickevičiaus g. 27, LT-44245, Kaunas, Lithuania (the "Company" or "Novaturas").
This presentation does not constitute or form any part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Novaturas, nor shall it or any part thereof or the fact of its distribution form the basis of, or be relied on in connection with, any contract, therefore.
The information and opinions contained herein are provided as at the date of this presentation and are subject to change without notice. Neither the Company nor its affiliates or advisers, representatives are under an obligation to correct, update or keep current the information contained in this presentation or to publicly announce the result of any revision to the information and opinions made herein. Furthermore, neither the delivery of this presentation nor any further discussions of the Company and/or its group with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date.
Neither this presentation nor any copy of it not the information contained in it may be taken or transmitted into the United States, United Kingdom, Canada, Australia or Japan or distributed, directly or indirectly, in the United States, United Kingdom, Canada, Australia or Japan or to any resident thereof.
TODAY'S PRESENTING TEAM
Audroné Keinyté, CEO
With the Company for 15 years (since 2006)
CEO since January 2019, earlier in charge of product development and purchasing on the Group level
Has strong commercial background as well as deep knowledge of tourism products and the industry itself
Tomas Staškūnas, CFO
With the Company for 12 years (since 2009)
Has experience as CFO and CEO in companies specialized in services and consumer goods
BUSINESS ENVIRONMENT PRE / POST PANDEMIC TOURISM SECTOR
TOURISM IN PRE-PANDEMIC TIMES
1.5 billion
INTERNATIONAL TOURISTS
International tourist arrivals in 2019
(10th consecutive year of sustained growth)
MILLIONS OF JOBS
With a high share of women
(54% of the workforce) and youth
US$ 1.7 trillion
EXPORT REVENUES
- 3rd largest export category
- 50% of total exports for many small developing countries
GROWING FASTER THAN THE WORLD ECONOMY
Tourism is a key sector in many advanced and emerging economies
Information source: World Tourism organization presentation "COVID-19 and tourism"
THE IMPACT OF COVID-19 ON INTERNATIONAL TOURISM
2020
a timeline marked by closures
Information source: World Tourism organization presentation "COVID-19 and tourism"
CHANGE IN INTERNATIONAL TOURIST ARRIVAL NUMBERS
Information source: World Tourism organization presentation "COVID-19 and tourism"
UNPRECEDENTAL FALL OF INTERNATIONAL TOURISM
Information source: World Tourism organization presentation "COVID-19 and tourism"
LOOKING AHEAD
2021-2024 SCENARIOS
2½ TO 4 YEARS TO RECOVER 2019 LEVELS
INTERNATIONAL TOURIST ARRIVALS
- Actual data for 2020 is preliminary and based on estimates for countries which have not yet reported results.
UNWTO
SOURCE: WORLD TOURISM ORGANIZATION (UNWTO) JANUARY 2021
Information source: World Tourism organization presentation "COVID-19 and tourism"
MAIN FACTORS WEIGHING ON THE RECOVERY OF TOURISM
Travel restrictions, slow virus containment and the economic environment: main barriers to the recovery of international tourism
UNWTO
Information source: World Tourism organization presentation "COVID-19 and tourism"
NOVATURAS GROUP
MANAGEMENT STRUCTURE
MANAGEMENT BODIES OF THE COMPANY
General meeting of shareholders
The Board
CEO
Vidas Paliūnas
Member of the Board
Co-founder of Novaturas UAB in 1999.
Ugnius Radvila
Member of the Board
Co-founder of Novaturas UAB in 1999.
Janek Pohla
Member of the Board
Founder and board member of Tahe Outdoors. Member of the board of the Estonian Chamber of Commerce and Industry.
Andrius Jurkonis
Independent member of the Board
Certified financial analyst. and manager of investment fund Axia Capital Fund
Virginijus Lepeška
Chairman of the Board Independent member
Chairman of the Board and Consultant of the management consulting and training company OVC Consulting.
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NOVATURAS GROUP SHAREHOLDERS STRUCTURE
Shareholders holding over 5%
Rendez Vous
Moonrider OU
ME Investicija
Ugnius Radvila
Rytis Šumakaris
Vidas Paliūnas
Rondam AS
Other (free float)
From the start of 2021 1.3m shares were traded on the market which represents 17% turnover from total company shares
After IPO we had 268 shareholders
Up to now the number of shareholders increased to 3528:
1.8k from EE
1.2k from LT
366 from other countries
Shareholdings by countries: LT - 51%, EE - 42%, LV - 3%
Other countries remaining - 4%
20+ YEARS OF CONTINUED GROWTH
NOVATURAS GROUP STRUCTURE
- Novaturas Group is a holding structure.
- Lithuania, Latvia and Estonia are core markets.
- AB Novaturas is the parent company, which conducts operations directly and through subsidiaries in their respective markets – Lithuania, Latvia and Estonia.
- In each market Novaturas group operates through their local offices.
MACROECONOMIC CONDITIONS IN THE BALTICS
GDP growth rate (%)
Average monthly gross salary (EUR)
Unemployment rate (%)
Inflation (%)
The hike in the average gross salary in Lithuania, visible between Q4 2018 and Q1 2019, is the result of new tax regulations that took effect with the beginning of 2019 and introduced a new accounting method that mainly affected gross salaries, while having negligible effect on net salaries. Under the new system, the due social security contributions are counted as part of the gross salary, increasing it significantly.
SEASONALITY OF NOVATURAS BUSINESS WITH STRONG SHOULDER SEASON
Novaturas operates in a sector which is subject to seasonality. It is characterized by higher demand for the Group's products and services during the summer season, i.e. in the second and third quarters of the year, and lower demand in the remaining periods.
In case of Novaturas the high season is very long (May to October). We also have a strong shoulder season, therefore our monthly and quarterly revenues distribution is better balanced throughout the year.
Monthly revenue (EUR m)
DIVESRIFIED, WIDE-RANGE PRODUCTS PORTFOLIO
Flight package tours
- Main part of our offering, covering holiday trips to popular resorts in Europe, North Africa, Latin America and Asia.
- Clients receive a full range of services, including flights, transfer from/to airport/hotel, accommodation, representative assistance and optional tours during the stay.
Sightseeing tours by coach
- Sightseeing trips to European destinations (including Poland, France, Italy, Austria, Croatia and Greece), departing from Lithuania.
- We provide transport by coach, accommodations, sightseeing tours by coach and a full-time tour guide.
Sightseeing tours by plane
- Sightseeing trips by flight to Europe, North Africa, Latin America and Asia. Chartered and regular flights from Vilnius, Riga and Tallinn are used.
- We provide flights, accommodations, sightseeing tours by coach and a full-time tour guide.
Local tourism
- Accommodation service in all major resorts and cities in the Baltic States and sightseeing trips in Lithuania.
- We provide accommodations, sightseeing tours by coach and a full-time tour guide.
Other products
- Our other products include airline tickets and hotel bookings online.
- We sell these to retail clients as well as to other tour operators.
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NOVATURAS GROUP FLEXIBILITY SUPPLIERS WISE
TRANSPORTATION
Aviation:
- No long-term obligations, contracting on seasonal basis.
- Novaturas uses mainly the services of local based aviation carriers.
- For long haul destinations Novaturas buys block seats in regular flights operated by other airlines.
- Choice of flight destinations is flexible.
Buses:
- Company rents coaches on a seasonal basis.
ACCOMODATION
Hotels:
- Allotment basis – the Group has flexibility to adjust the number of rooms it actually uses.
- Prices are agreed and fixed before the season – there is no risk of prices increase during the season.
- Active daily yield for better prices and special offers during the season.
DMCs:
- DMCs are partners providing ordinary destination services.
- Novaturas does not have long-term contracts with DMCs, only annual or seasonal agreements, however most of the partners are long-lasting.
- Usually one DMC partner covers one destination.
WELL-BALANCED DISTRIBUTION
Majority of our products are sold through travel agencies, with whom we have long-term business relations, built on professionalism and mutual trust.
-400
External travel agencies
We are also investing in developing our e-commerce channel. Online sales go through our customized websites and via the international platform GDS (Global Distribution Systems). We manage one of the biggest online shops in the Baltics.
22% (Q1, 2021)
16.2% share in 2020 revenue from e-commerce
16.4% share in 2019 revenue from e-commerce
0.5m (Q1, 2021)
2.2 unique visitors on our websites during during 2020
3.8 m unique visitors on our websites during 2019
Novaturas sales by distribution channels
Q1 2021 (outer circle) vs Q1 2020 (middle circle)
vs. Q1 2019 (inner circle)
Travel agencies
Own retail
Web sales
GDS
ASSET-LIGHT BUSINESS MODEL
The Company's asset-light business model is characterized by strong cash generation and low capex needs. Novaturas does not intend to invest in any hotels, planes or buses, which allows it to pay out a large part of its profits to shareholders. Regular payment of dividends is one of the main components of the corporate strategy.
Operating cash flow vs. CAPEX (EUR m)
70% – 80%
expected dividend payout ratio once the Company overcomes the consequences of COVID-19
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OPERATING EXPENSES UNDER CONTROL
To manage pandemic inflicted situation, we took strict cost management actions and focused on operational efficiency. Compared to prie-pandemic years, in 2020 we have significantly reduced our operating expenses. It shows the flexibility of the Company to adapt to changing operational volumes and given circumstances of tourism sector.
| Operating expenses (EUR 000s) | 2016 | 2017 | 2018 | 2019 | 2020 | Q1 2021 |
|---|---|---|---|---|---|---|
| Sales and marketing (excl. commissions) | 3,320 | 3,654 | 4,140 | 3,960 | 2,320 | 373 |
| General and administrative (excl. one-offs) | 3,905 | 4,416 | 4,099 | 4,310 | 2,119 | 372 |
| Total operating expenses (excl. commissions and one-offs) | 7,225 | 8,070 | 8,239 | 8,270 | 4,439 | 745 |
| Commissions | 4,973 | 7,363 | 9,652 | 9,791 | 1,750 | 279 |
| One-off expenses | 9 | 862 | 757 | 191 | 568 | 21 |
| Total operating expenses | 12,207 | 16,295 | 18,648 | 18,252 | 6,757 | 1,045 |
NOVATURAS GROUP AT GLANCE
No. 1
in the Baltics since 2004
8.9ths (Q1, 2021)
- PAX sold in 2020 – 48.5ths
- PAX sold in 2019 – 293.5ths
EUR 615ths (Q1, 2021)
- 2020 EBITDA – (3.3)m
- 2019 EBITDA – 4.3 m
20+
years in business
EUR 5.6m (Q1, 2021)
- 2020 Revenue – 32.9m
- 2019 Revenue – 179.7m
EUR 0.2m (Q1, 2021)
- 2020 Net profit – (5.8)m
- 2019 Net profit – 4.2m
30+
destinations worldwide by plane
EUR 1.6m (Q1, 2021)
- 2020 Gross profit – 3.6m
- 2019 Gross profit – 21.8m
19.5m
Arranged additional loans and investment to secure Company's liquidity
FINANCIAL & PERFORMANCE INDICATORS
Due to the restrictions caused by the pandemic, in 2020 we have been forced to suspend our operations more than once and only in July we have partially renewed operations from all Baltic markets. The first quarter of 2021 was marked by positive profitability ratios. Increased EBITDA and net profit is the outcome of effective crises management, leadership in business decisions and strict expenses control.
Revenues (EUR m)
EBITDA (EUR m)
PAX (ths)
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THE GROUP'S STRATEGY
Retain leading position in the Baltics and benefit from the travel market growth
Maintain well-balanced distribution channels
Increase share of e-commerce
Continue expansion of offering in order to retain existing clients and attract new ones, translating this into sales growth
Secure further growth in operational scale combined with high profitability ratios and cash generation
Provide regular dividend payments
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2021 RESTART OF BUSINESS
RESTART OF OPERATIONS. Q1, 2021
Restart of operations Q1:
"Novaturas" Group resumes flights to Egypt:
on the 13th of February from Estonia
on the 20th of February from Lithuania
on the 27th of March from Latvia
"Novaturas" Group resumes flights to Tenerife:
on the 5th of February from Lithuania
on the 13th of February from Estonia
on the 5th of March from Latvia
- Novaturas group agreed on EUR 10 million investment with the State Investment Management Agency.
- EUR 10 million will reach "Novaturas" group using mixed financial instruments: convertible bonds worth EUR 5 million & ordinary bonds worth EUR 5 million.
- The financing is granted for 6 years period, after which the Company undertakes to redeem the bonds. The Company also has the possibility to redeem all or part of issued bonds before the term of the agreement.
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FORWARD LOOKING STATEMENT. Q2, 2021
Volume
Still difficult to plan more than 1 month ahead.
Targeting monthly volumes exceeding 10k pax for Q2
Profitability
Still difficult to plan Q2 sales profitability. Demand can be strongly affected by constantly changing restrictions applied to tourism sector
EBITDA
Targeting positive EBITDA for Q2
Restart of operations Q2:
April 2021 – “Novaturas” Group resumes flights to Turkey from all the Baltic states.
May 2021 – “Novaturas” Group resumes flights to Greece from all the Baltic states.
June 2021 – “Novaturas” Group plans to resume flights to Bulgaria and other destinations from all the Baltic states.
June 2021 – “Novaturas” Group plans to resume flights to long-haul destinations: Bali, Seychelles, Maldives.
COMPANY INFORMATION
Novaturas group PLC
Registered address:
Mickevičiaus str. 27, LT-44245 Kaunas, Lithuania
www.novaturasgroup.com
Registered under number 135567698 in Lithuania
Company established: 1999 12 16
Stock Listing:
Warsaw Stock Exchange
Nasdaq Vilnius Stock Exchange
Contact information:
Tomas Staškūnas
CFO
Mickevicius str. 27, LT-44245 Kaunas, Lithuania
tel. +370 37 321264, mob. +370 687 10426
fax. +370 37 321130
e-mail: [email protected]
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