MakeMyTrip Limited (NASDAQ: MMYT) Investor Presentation November 2017

Transcription

1 MakeMyTrip Limited (NASDAQ: MMYT) Investor Presentation November 2017

2 Safe Harbor 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 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, should, 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 include, but are not limited to, the slowdown of economic growth in India and the global economic downturn, general declines or disruptions in the travel industry, the inability to successfully integrate the businesses of MMYT and ibibo Group within the anticipated timeframe or at all, the risk that the acquisition will disrupt current plans and operations, increase in operating costs and potential difficulties in customer or supplier loss and employee retention as a result of the acquisition, the inability to recognize the anticipated benefits of the combination of MMYT and ibibo Group, including the realization of revenue and cost synergy benefits within the anticipated timeframe or at all, volatility in the trading price of MMYT s shares, MMYT s reliance on its relationships with travel suppliers and strategic alliances, failure to further increase MMYT s brand recognition to obtain new business partners and consumers, failure to compete against new and existing competitors, failure to successfully manage current growth and potential future growth, risks associated with any strategic investments or acquisitions, seasonality in the travel industry in India and overseas, failure to successfully develop MMYT s corporate travel business, damage to or failure of MMYT s infrastructure and technology, loss of services of MMYT s key executives, and inflation in India and in other countries. 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 July 18, 2017 and MMYT s 6-K dated November 22, 2016, each filed with the U.S. Securities Exchange Commission ( SEC ), copies of which are 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

3 Non-IFRS Metrics & Note on Unaudited Financials 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 3 rd 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. Flight Segment is defined as a flight between two cities, whether or not such flight is part of a larger or longer itinerary. Room Nights, also referred to as a hotel-room nights, is the total number of hotel rooms occupied by a customer or group, multiplied by the number of nights that such customer or group occupies those rooms. Constant Currency refers to our financial results assuming constant foreign exchange rates for the current fiscal period based on the reporting for the historical average rate used in the prior year s comparable fiscal period. Fiscal Year End March 31 st 3

4 Key Investment Highlights 1 Leading OTA with Multi-Brand Strategy & Comprehensive Customer Reach 2 Investing for Growth & Share Gains in Underpenetrated Travel Segments 3 Industry Leading Hotels Business with Unrivalled Supply Side Competitive Advantage 4 Rapid Innovations Focused on Customer & Supplier Experience Enhancements 5 Strong & Experienced Management Team 6 Growth with Increasingly Efficient Customer Acquisition Spends 4

5 GDP at Purchasing Power Parity (US$ Tn) Attractive Macro Growth Drivers Among Top 3 Global Economies with Robust Growth 1 Largest Young Population Globally (2015) China 7% CAGR US$ 37 Tn 47% 48% 6% China US$ 19 Tn US US$ 18 Tn India US$ 8 Tn US 4% CAGR US$ 28 Tn India 8% CAGR US$ 18 Tn 33% 32% 52% 59% 15% 10% Age 0 24 Age Age nd Highest Internet Users Room to Grow with Low Internet Penetration 89% 2 nd Largest Smartphone Users % 35% 52% US China India India US China India India US China India India E E E Source: 1 Euromonitor; 2 United Nations; *Internet Live Stats, The Future of Internet in India NASSCOM August

6 India s Large Opportunity with Multiple Underpenetrated Segments ($ in Billions) Addressable Total Travel Market Growth Online Travel Market Growth Segments e CAGR e CAGR Domestic Air $5.4 $ % $2.7 $6.0 14% International Air $3.0 $5.3 10% $1.5 $2.6 10% Domestic Hotels $10.0 $ % $1.4 $ % Outbound Travel $12.5 $ % $0.9 $3.3 25% Domestic Bus $3.1 $5.0 8% $0.5 $1.5 22% Total Booking $34.0 $ % $7.0 $ % Source: Morgan Stanley Research, e=morgan Stanley Research estimates. Large Addressable Market with $67 billion bookings opportunity by

7 Multiple Brands with Superior Online Scale & Reach Comprehensive Product Offerings Expanded Customer Reach Cross Selling Opportunities 154 Million Total Unique Visitors 87 Million Monthly Shopper Visits 101 Million Cumulative Mobile App Downloads 27 Million Transacted Customers 15 Million Monthly Active Mobile Users Source: Company data as disclosed on Q2 FY2018 Earnings Call & SEC Form 6K Filed on November

8 Investing For Long Term Growth in Key Segments Domestic Hotels Alternative Accommodations International Hotels International Outbound Flights Intercity Bus Ticketing Corporate & SME Travel 8

9 Hotel Business With Significant Scale & Actively Engaged Supplier Base Common Hotel Supplier Extranet Platform Single online (mobile) portal for multiple brand allocation & pricing management Supplier driven discounting capabilities Dynamic pricing via available competitive (hyper market) intelligence Management of Goods & Services Tax compliance for hoteliers 45,000 domestic hotel properties 13,500 alternative accommodations Real time customer feedback notifications to enable fast supplier actions to improve stay experience Asset light model enhances budget hotel stay experiences backed by leading brand guarantees Supplier retention of proprietary brand identity & equity Q2 FY2018 Average Value Per Room Night Improved by 8% year on year Driven by Improving Mix of 4 & 5 Star Hotel Bookings 9

10 Innovations Driving Enhanced Experiences for Users & Suppliers Artificial Intelligence Powered Customer Support Unique In App Feedback Interactions with Suppliers WhatsApp delivery & usage of etickets Machine Learning & Big Data to Drive Greater Personalization MMT Promise - Unique Customer Refund Program Enhanced Referral Program with Reward Tiers Based on Spend 10

11 Improved Loyalty Programs Driving Customer Retention & Satisfaction MMT Black Earn Wallet+ Cash by Spending Wide Range of Redemption Options MMT Double Black Annual Subscription Model Value for Frequent Travelers 11

12 Mobile Focused Approach Enabling Continued Reach & Growth Top Ranked ios & Google Play Apps Driving Tier II & III penetration 1 MB Lite App Available 101+ million cumulative app downloads to date 15+ million monthly average active mobiles users Mobile Air Ticketing 59% Mobile Hotel Booking 79% Mobile Bus Ticketing 74% 78% of Monthly Shopper Visits via Mobile App & Web UPI, Google Tez & Amazon Pay enabled *Q2 FY2018 mobile transactions as % of total 12

13 Experienced Founding & Management Team Driving Execution Deep Kalra Co-Founder, Chairman and Group CEO - Started MakeMyTrip in Chairman of the Board of Directors Years of Experience - Prior Experience: GE Capital India, AMF Bowing Inc. & ABN AMRO Bank - Board member & past President of The IndUS Entrepreneurs (TIE) New Delhi chapter - Founding member of Ashoka University & serves on Governing Council - Bachelor s degree in Economics St. Stephen s College - MBA IIM Ahmedabad, India Rajesh Magow Co-Founder and CEO India - Senior founding team member - Member of the Board of Directors - Previously CFO and Chief Operating Officer Years of Experience - Prior Experience: ebookers.com, Aptech Limited & Voltas Limited - Independent FlipKart.com Board Member - Chartered Accountant from Institute of Chartered Accountants of India, Delhi Mohit Kabra Group Chief Financial Officer Years of Experience - Prior Experience: Kohler India, PepsiCo, Colgate & Seagrams - Bachelor of Commerce - St. Joseph s Junior College - Chartered Accountant from Institute of Chartered Accountants of India - Cost Accountant from Institute of Cost Accountants of India 13

14 Financial Overview Results presented include the consolidation of ibibo group from February 1, 2017 onwards, unless otherwise noted 14

15 1H FY2018 Financial Summary Source: Company data, SEC 6K Filed on November Gross Bookings include Bus Ticketing business. YoY % growth on pro forma basis as disclosed 15

16 Accelerating Net Revenue Growth & Reducing Marketing Spend ($ in millions) Q2 FY18 YoY $ change Q1 FY18 YoY Total Revenue Less Service Costs (Net Revenue) $ % $ % Air Ticketing Net Revenue $ % $ % Hotels & Packages Net Revenue $ % $ % Other Net Revenue $ % $ % Marketing & Sales Promotion Spend $ % $ % Adjusted Operating (Losses) ($45.0) $6.5 reduction ($52.3) Adjusted Operating (Losses) as % of Gross Bookings (4.2%) (4.5%) Net Revenue growth acceleration driven by multi-brand strategy to address each unique customer segment $6.5 million reduction in total Marketing & Sales Promotion spend in Q2FY18 vs Q1FY18 Adjusted Operating (Losses) as % of Gross Bookings Improved to 4.2% as a result of lower marketing spend in Q2FY18 vs Q1FY18 Source: Company data, SEC 6K Filed on November YoY % change on Constant Currency Basis Marketing & Sales Promotion inlcudes adjustement for other promotions netted against revevenue less service costs 16

17 Strong Growth Driven by Hotels and Packages Gross Bookings (in $ million) Net Revenue (1) (in $ million) $2,500 $2,000 $1,842 $2, $2, $300 $250 $274 $ $1,500 $1,000 $500 $1, , ,276 1, ,272 $200 $150 $100 $50 $169 6 $ $0 FY15 FY16 FY17 1H FY18 INR/USD Air Ticketing Hotels and Packages Bus Ticketing $0 FY15 FY16 FY17 1H FY18 INR/USD Air Ticketing Hotels and Packages Other Note: Net revenues represent revenues minus service costs. CCG = Constant Currency Growth. 1HFY18 includes bus ticketing bookings, prior reported periods does not include such bookings data 17

18 Driving Rapid Volume Growth via Customer Acquisition Investments (in 000s) Air Ticketing Transactions (in 000s) Hotel & Packages Transactions 18,000 16,000 15, ,000 7,000 6, , ,000 12,000 10,000 8,000 6,000 5, , , ,000 5,000 4,000 3,000 3, ,000 2,000 1, ,000 1,000 0 FY 2015 FY 2016 FY H FY18 0 FY 2015 FY 2016 FY H FY18 (in 000s) 8,000 7,000 6,000 Standalone Hotel Transactions Booked Online 6, ,992.8 Air Ticketing: 2.8x increase 5,000 Hotels & Packages: 5.1x increase 4,000 3,000 2,000 2,443.6 Standalone Hotel Booking Online: 11.2x increase Note: Comparison of 1HFY18 to FY15 1, FY 2015 FY 2016 FY H FY18 18

19 Improving Mix and Margins with Strategic Focus on Hotels and Packages 14% 12% Total Net Revenue as % of Total Gross Bookings % 12.6% 10% 8% 6% 4% 2% Air Ticketing Net Revenue Margin 6.1% 6.0% 7.7% 7.3% Multiple sources of Net Revenue Commissions and volume incentives from airlines Convenience & Service fees from customers Fees from GDS partner 10% 8% 8.1% 9.2% 0% FY15 FY16 FY17 1H FY18 6% 4% 2% 0% FY15 FY16 FY17 1H FY18 25% 20% 15% Hotels and Packages Net Revenue Margin 13.2% 15.3% 18.8% 22.4% Effective Product Bundling & Scale Mark up on Net Rates Commissions & volume incentives from hoteliers 10% 5% 0% FY15 FY16 FY17 1H FY18 Note 1: 1H FY18 calculation includes Bus Ticketing bookings, prior periods only included air ticketing & hotels & packages gross bookings 19