Makemytrip : Announces Fiscal 2020 Second Quarter

MAKEMYTRIP LIMITED ANNOUNCES FISCAL 2020 SECOND QUARTER RESULTS

Financial Highlights for Fiscal 2020 Second Quarter

(Year over Year (YoY) growth % are based on constant currency (1); please see table below for YoY growth % on actual basis)

• Gross Bookings(5) increased 20.6% YoY in 2Q20 to $1.5 billion.
• Revenue for 2Q20 increased 14.2% YoY to $118.0 million and Adjusted Revenue(2) increased 13.6% YoY in 2Q20 to $181.1 million.
• Results from Operating Activities was a loss of $31.9 million in 2Q20 versus a loss of $39.8 million in 2Q19.
• Adjusted Operating Loss(3) was $19.3 million in 2Q20 versus Adjusted Operating Loss of $25.4 million in 2Q19, an improvement of $6.1 million YoY. Adjusted Operating Loss includes one-time accelerated personnel cost of $2.5 million in 2Q20.

Gurugram, India and New York, November 4, 2019 - MakeMyTrip Limited (NASDAQ: MMYT), India's leading online travel company, today announced its unaudited financial and operating results for its fiscal second quarter ended September 30, 2019.

"The MakeMyTrip Group continued to expand its bouquet of travel offerings during the seasonally weak fiscal second quarter." said Deep Kalra, Group Chairman and Group CEO. "We continued to deliver greater value for users and suppliers, sharply optimizing our marketing and sales promotion spend and gaining share, even as we operate under challenging growth conditions."

(in thousands except EPS)

Financial Summary as per IFRS

Revenue

Air Ticketing

Hotels and Packages

Bus Ticketing

Others

Results from Operating Activities Loss for the period

Diluted Loss per share

	3 months Ended		3 months Ended		YoY Change
	September 30,		September 30,	YoY	in constant
	2018		2019	Change	currency(1)
$	103,609	$	117,957	13.8 %	14.2 %
$	41,067	$	45,992	12.0 %	12.5 %
$	44,860	$	46,763	4.2 %	4.3 %
$	11,846	$	14,257	20.4 %	21.2 %
$	5,836	$	10,945	87.5 %	88.3 %
$	(39,837 )	$	(31,880 )
$	(46,965 )	$	(36,803 )
$	(0.45 )	$	(0.35 )

Financial Summary as per non-IFRS measures
Adjusted Revenue(2)	$	160,097		$	181,078		13.1	%	13.6	%
Air Ticketing	$	56,517		$	65,952		16.7	%	17.2	%
Hotels and Packages	$	85,470		$	87,070		1.9	%	2.4	%
Bus Ticketing	$	12,120		$	16,647		37.4	%	38.3	%
Others	$	5,990		$	11,409		90.5	%	91.2	%
Adjusted Operating Loss(3)	$	(25,374	)	$	(19,337	)
Adjusted Net Loss(4)	$	(32,390	)	$	(23,611	)
Adjusted Diluted Loss per share(4)	$	(0.31	)	$	(0.22	)
Operating Metrics
Gross Bookings(5)	$	1,243,442		$	1,492,918		20.1	%	20.6	%
Air Ticketing	$	749,092		$	916,947		22.4	%	23.0	%
Hotels and Packages	$	350,240		$	383,717		9.6	%	10.1	%
Bus Ticketing	$	144,110		$	192,254		33.4	%	34.2	%
Unit Metrics
Air Ticketing - Flight segments(8)		10,005			11,161		11.6	%
Hotels and Packages - Room nights(7)		6,706			7,510		12.0	%
Standalone Hotels - Online(6) - Room nights(7)		6,574			7,385		12.3	%
Bus Ticketing - Travelled tickets		13,240			17,682		33.5	%

Notes:

1. 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.
2. Represents IFRS revenue after adding back promotion expenses in the nature of customer discount, customer inducement/acquisition costs and loyalty program costs, which are reported as a reduction of revenue, and deducting the cost of acquisition of services primarily relating to sales to customers where the company acts as the principal. IFRS refers to International Financial Reporting Standards as issued by the International Accounting Standards Board.
3. Results from operating activities excluding employee share-based compensation costs, amortization of acquisition related intangibles and merger and acquisitions related expenses.
4. Profit (Loss) for the period excluding employee share-based compensation costs, amortization of acquisition related intangibles, share of loss (profit) of equity-accounted investees, merger and acquisitions related expenses, net change in value of financial liability in business combination and income tax expense (benefit).
5. Represents the total amount paid by our customers for the travel services and products booked through us, including taxes, fees and other charges, net of cancellations, discounts and refunds.
6. "Standalone Hotels - Online" refer to Standalone Hotels booked on desktops, laptops, mobiles and other online platforms.
7. "Room nights," also referred to as "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.
8. "Flight segments" means a flight between two cities, whether or not such flight is part of a larger or longer itinerary.

Please see "About Non-IFRS Financial Measures" included within this release to understand the importance of the measures set forth in notes (1) to (8) above. Reconciliations of IFRS financial measures to non-IFRS financial measures, and operating results are included at the end of this release.

Other information

Share Repurchase

On November 6, 2012, our Board of Directors authorized the Company to purchase outstanding ordinary shares, par value $0.0005 per share, of the Company. On January 22, 2016, our Board of Directors authorized the Company to increase the share repurchase plan to an amount aggregating up to $150 million at a price per ordinary share not exceeding $21.50 until November 30, 2021. There were no repurchases pursuant to the share repurchase plan during the fiscal 2020 second quarter. As of September 30, 2019, we had remaining authority to repurchase up to approximately $136.0 million of our outstanding ordinary shares.

Fiscal 2020 Second Quarter Financial Results

Revenue. We generated revenue of $118.0 million in the quarter ended September 30, 2019, an increase of 13.8% (14.2% in constant currency) over revenue of $103.6 million in the quarter ended September 30, 2018. Our Total Adjusted Revenue increased by 13.1% (13.6% in constant currency) to $181.1 million in the quarter ended September 30, 2019 from $160.1 million in the quarter ended September 30, 2018, primarily as a result of a 16.7% (17.2% in constant currency) increase in our Adjusted Revenue - air ticketing, a 1.9% (2.4% in constant currency) increase in our Adjusted Revenue - hotels and packages, a 37.4% (38.3% in constant currency) increase in our Adjusted Revenue - bus ticketing and a 90.5% (91.2% in constant currency) increase in our Adjusted Revenue - others, each as further described below. Adjusted Revenue also includes promotion expenses of $92.7 million in the quarter ended September 30, 2019 and $88.2 million in the quarter ended September 30, 2018, recorded as a reduction of revenue.

For further information on this non-IFRS financial measure, see"- About Non-IFRS Financial Measures" elsewhere in this release.

							For the three months ended September 30
			Air ticketing		Hotels and packages			Bus ticketing			Others				Total
		2018		2019		2018		2019		2018			2019			2018			2019			2018			2019
												(Amount in USD thousands)
Revenue as per IFRS			41,067			45,992			44,860			46,763			11,846				14,257			5,836				10,945				103,609				117,957
Add: Promotion expenses
recorded as a reduction of
revenue		15,450		20,087		70,101		68,241		2,522			3,795			154				529				88,227				92,652
			56,517			66,079			114,961			115,004			14,368				18,052			5,990				11,474				191,836				210,609
Less: Service cost as per IFRS			-		127		29,491		27,934		2,248			1,405			-		(1)		65		(1)		31,739		(1)		29,531		(1)
Adjusted Revenue			56,517			65,952			85,470			87,070			12,120				16,647			5,990				11,409				160,097				181,078

1. Loyalty program costs amounting to $1.2 million have been excluded from service cost (September 30, 2018: $0.7 million) relating to "Others", and have been included in marketing and sales promotion expenses.

Air Ticketing. Revenue from our air ticketing business increased by 12.0% (12.5% in constant currency) to $46.0 million in the quarter ended September 30, 2019 from $41.1 million in the quarter ended September 30, 2018. Adjusted Revenue from our air ticketing business increased by 16.7% (17.2% in constant currency) to $66.0 million in the quarter ended September 30, 2019, from $56.5 million in the quarter ended September 30, 2018. Adjusted Revenue - air ticketing includes promotion expenses of $20.1 million in the quarter ended September 30, 2019 and $15.5 million in the quarter ended September 30, 2018, recorded as a reduction of revenue. These promotion expenses added back to Adjusted Revenue, with the consequent increase in marketing and sales promotion expenses, is intended to reflect the way we view our ongoing business. Under IFRS, these promotion expenses are required to be recorded as a reduction of revenue. This increase in Adjusted Revenue - air ticketing was due to an increase in gross bookings of 22.4% (23.0% in constant currency) primarily driven by an 11.6% increase in the number of air ticketing flight segments year over year, mainly driven by growth in our outbound air ticketing business. Further, our Adjusted Revenue margin (defined as Adjusted Revenue as a percentage of gross bookings) was 7.2% in the quarter ended September 30, 2019 and 7.5% in the quarter ended September 30, 2018.

Hotels and Packages. Revenue from our hotels and packages business increased by 4.2% (4.3% in constant currency) to $46.8 million in the quarter ended September 30, 2019, from $44.9 million in the quarter ended September 30, 2018. Our Adjusted Revenue - hotels and packages increased by 1.9% (2.4% in constant currency) to $87.1 million in the quarter ended September 30, 2019 from $85.5 million in the quarter ended September 30, 2018. Adjusted Revenue - hotels and packages includes promotion expenses of $68.2 million in the quarter ended September 30, 2019 and $70.1 million in the quarter ended September 30, 2018, recorded as a reduction of revenue. These promotion expenses added back to Adjusted Revenue, with the consequent increase in marketing and sales promotion expenses, is intended to reflect the way we view our ongoing business. Under IFRS, these promotion expenses are required to be recorded as a reduction of revenue. Gross bookings increased by 9.6% (10.1% in constant currency) driven by 12.0% increase in the number of hotels room-nights year over year. Our Adjusted Revenue margin in the quarter ended September 30, 2019 was 22.7%, which was a marginal increase from Adjusted Revenue margin of 22.3% in the quarter ended June 30, 2019, but a decrease from 24.4% in the quarter ended September 30, 2018 mainly due to decrease in margins from our suppliers in line with shift in our pricing strategy in the hotels and packages business.

Bus Ticketing. Revenue from our bus ticketing business increased by 20.4% (21.2% in constant currency) to $14.3 million in the quarter ended September 30, 2019, from $11.8 million in the quarter ended September 30, 2018. Adjusted Revenue from our bus ticketing business increased by 37.4% (38.3% in constant currency) to $16.6 million in the quarter ended September 30, 2019 from $12.1 million in the quarter ended September 30, 2018. Adjusted Revenue - bus ticketing includes promotion expenses of $3.8 million in the quarter ended September 30, 2019 and $2.5 million in the quarter ended September 30, 2018, recorded as a reduction of revenue. These promotion expenses added back to Adjusted Revenue, with the consequent increase in marketing and sales promotion expenses, is intended to reflect the way we view our ongoing business. Under IFRS, these promotion expenses are required to be recorded as a reduction of revenue. Gross bookings increased by 33.4% (34.2 % in constant currency) driven by 33.5% increase in the number of bus tickets travelled year over year, mainly driven by the continued offline to online shift within this travel segment. Our Adjusted Revenue margin increased to 8.7% in the quarter ended September 30, 2019 compared with 8.4% in the quarter ended September 30, 2018.

Other Revenue. Our Other revenue increased by 87.5% (88.3% in constant currency) to $10.9 million in the quarter ended September 30, 2019, from $5.8 million in the quarter ended September 30, 2018. Our Adjusted Revenue - others increased to $11.4 million in the quarter ended September 30, 2019 from $6.0 million in the quarter ended September 30, 2018. This increase was primarily due to an increase in facilitation fees from travel insurance and increase in other ancillary revenue from alliances and affiliate partnerships. Adjusted Revenue - others includes promotion expenses of $0.5 million in the quarter ended September 30, 2019 and $0.2 million in the quarter ended September 30, 2018, recorded as a reduction of revenue. These promotion expenses added back to Adjusted Revenue, with the consequent increase in marketing and sales promotion expenses, is intended to reflect the way we view our ongoing business. Under IFRS, these promotion expenses are required to be recorded as a reduction of revenue.

Personnel Expenses. Personnel expenses increased by 13.3% to $32.6 million in the quarter ended September 30, 2019 from $28.7 million in the quarter ended September 30, 2018. This increase was mainly due to an annual increase in wages in fiscal year 2020 and was partially offset by the favorable impact of foreign currency translation due to the depreciation of the Indian Rupee against the U.S. dollar in the quarter ended September 30, 2019. Excluding employee share-based compensation costs for second quarter of both fiscal years 2020 and 2019, and one-time accelerated personnel cost of $2.5 million due to amendment in share purchase agreement related to a prior acquisition in the second quarter of fiscal year 2020, personnel expenses as a percentage of Adjusted Revenue increased by 0.6%.

Marketing and sales promotion expenses. Marketing and sales promotion expenses decreased by 10.5% to $40.1 million in the quarter ended September 30, 2019 from $44.8 million in the quarter ended September 30, 2018 along with favorable impact of foreign currency translation due to the depreciation of the Indian Rupee against the U.S. dollar in the quarter ended September 30, 2019. Including promotion expenses of $93.9 million in the quarter ended September 30, 2019 and $88.9 million in the quarter ended September 30, 2018 recorded as a reduction of revenue as explained above, marketing and sales promotion expenses increased by 0.2% year over year to $134.0 million. Marketing and sales promotion expenses after including promotion expenses explained above, primarily include significant customer inducement/acquisition costs, customer discount and loyalty program costs incurred to accelerate growth in our standalone hotel booking business, and brand advertisement expenses. These expenses, details of which are provided below, totaled $134.0 million (74.0% of Total Adjusted Revenue) in the quarter ended September 30, 2019 as compared to $133.7 million (83.5% of Total Adjusted Revenue) in the quarter ended September 30, 2018. The details of expenses in the nature of marketing and sales promotion is as follows:

			For the three months
			ended September 30
		2018		2019
			(Amounts in USD thousands)
Marketing and sales promotion expenses as per IFRS			44,755		40,054
Promotion expenses recorded as a reduction of revenue			88,227		92,652
Certain loyalty program costs related to Others revenue			714		1,221

Other Operating Expenses. Other operating expenses increased by 23.0% to $38.1 million in the quarter ended September 30, 2019 from $31.0 million in the quarter ended September 30, 2018, primarily due to an increase in payment gateway charges, website hosting charges and outsourcing fees in line with the growth in our business, partially offset by favorable impact of foreign currency translation due to the depreciation of the Indian Rupee against the U.S. dollar in the quarter ended September 30, 2019.

Depreciation and Amortization. Our depreciation and amortization expenses were $8.5 million in the quarter ended September 30, 2019 post adoption of IFRS 16 on April 1, 2019 wherein depreciation has been recorded on right-of-use assets and interest on lease liabilities instead of rent expense on leasehold properties in the quarter ended September 30, 2019. Depreciation and amortization expense in the quarter ended September 30, 2018 was $6.6 million.

Results from Operating Activities. As a result of the foregoing factors, our results from operating activities were a loss of $31.9 million in the quarter ended September 30, 2019 as compared to a loss of $39.8 million in the quarter ended September 30, 2018. Excluding the effects of our employee share-based compensation costs and amortization of acquisition related intangibles for the second quarter of both fiscal years 2020 and 2019, and merger and acquisitions related expenses in the second quarter of fiscal year 2020, we would have recorded an Adjusted Operating Loss of $19.3 million in the quarter ended September 30, 2019 which includes one-time accelerated personnel cost of $2.5 million described above, as compared with Adjusted Operating Loss of $25.4 million in the quarter ended September 30, 2018. For a description of the components and calculation of "Adjusted Operating Profit (Loss)" and a reconciliation of this non-IFRS measure to the most directly comparable IFRS measure "Results from operating activities", see "- Certain Non-IFRS Measures" elsewhere in this release.

Net Finance Cost. Our net finance cost was $4.7 million in the quarter ended September 30, 2019 as compared to a net finance cost of $7.0 million in the quarter ended September 30, 2018, primarily due to the lower net foreign exchange loss in quarter ended September 30, 2019, partially offset by interest on lease liabilities instead of rent expense on leasehold properties in the quarter ended September 30, 2019 post adoption of IFRS 16 on April 1, 2019.

Loss for the period. As a result of the foregoing factors, our loss for the quarter ended September 30, 2019 was $36.8 million as compared to a loss of $47.0 million in the quarter ended September 30, 2018. Excluding the effects of employee share- based compensation costs, amortization of acquisition related intangibles, share of loss (profit) of equity-accounted investees and income tax expense (benefit) for the second quarter of both fiscal years 2020 and 2019, and merger and acquisitions related expenses and net change in value of financial liability in business combination in the second quarter of fiscal year 2020, we would have recorded an Adjusted Net Loss of $23.6 million in the quarter ended September 30, 2019 which includes one-time accelerated personnel cost of $2.5 million described above, as compared to Adjusted Net Loss of $32.4 million in the quarter ended September 30, 2018. For a description of the components and calculation of "Adjusted Net Profit (Loss)" and a reconciliation of this non-IFRS measure to the most directly comparable IFRS measure "Loss for the period", see "- Certain Non-IFRS Measures" elsewhere in this release.

Diluted Loss per share. Diluted loss per share was $0.35 for the quarter ended September 30, 2019 as compared to diluted loss per share of $0.45 in the quarter ended September 30, 2018. After adjusting for employee share-based compensation costs, amortization of acquisition related intangibles, share of loss (profit) of equity accounted investees and income tax expense (benefit) for the second quarter of both fiscal years 2020 and 2019, and merger and acquisitions related expenses, and net change in value of financial liability in business combination in the second quarter of fiscal year 2020, Adjusted Diluted Loss per share would have been $0.22 in the quarter ended September 30, 2019 which includes one-time accelerated personnel cost of $2.5 million described above, as compared to compared to Adjusted Diluted Loss per share of $0.31 in the quarter ended September 30, 2018. For a description of the components and calculation of "Adjusted Diluted Earnings (Loss) per Share" and a reconciliation of this non-IFRS measure to the most directly comparable IFRS measure "diluted earnings (loss) per share", see "- Certain Non-IFRS Measures" elsewhere in this release.

Liquidity. As at September 30, 2019, the balance of cash and cash equivalents (net of bank overdraft) and term deposits on our balance sheet was $249.3 million.

Conference Call

MakeMyTrip will host a conference call to discuss the Company's results for the quarter ended September 30, 2019 beginning at 7:30 AM EST on November 4, 2019. To participate, please dial + 1-(844)-883-3862 from within the U.S. or +1- (574)-990-9829 from any other country. Thereafter, callers will be prompted to enter the participant passcode 8037617. A live webcast of the conference call will also be available through the "Investor Relations" section of the Company's website at http://investors.makemytrip.com.

A telephonic replay of the conference call will be available for one week by dialing [phone] and using passcode 8037617. A one month replay of the live webcast will also be available at "Investor Relations" section of the Company's website at http://investors.makemytrip.com, shortly following the conclusion of the call.