Webjet : 2022 AGM – Full Transcript

Webjet Limited 2022 Annual General Meeting Transcript

Wednesday, 31 August 2022, 9am AEST

Start of Transcript

Roger Sharp: Good morning ladies and gentlemen. It's now 9 o'clock Melbourne time, and I'd like to extend a warm welcome to you to the Webjet Annual General Meeting for 2022. My name is Roger Sharp, Chair of Webjet Limited and I will be chair of today's meeting.

I would like to start by acknowledging the Traditional Owners and Custodians of the land on which we meet today, the Peoples of the Kulin Nation. I also pay my respects to their Elders past and present.

Our Company Secretary Tony Ristevski confirms that a quorum is present and that no other items of business have been notified, therefore we will work to the agenda published with the Notice of Meeting.

I now formally declare the meeting open.

Today's meeting, as you can see, has been convened as a hybrid meeting and I thank you for taking the time to join us either via the Computershare platform, or indeed in-person here at Webjet, and I have to say, after some years, it's great to see our shareholders turning up. Thank you for being here.

For the members attending in person, can you please turn off your mobile phones, and turn off any photographic equipment and recording devices during the meeting.

I will say a few words shortly concerning how I propose to run the meeting and the procedure for voting and for questions but first, I would like to introduce my fellow directors who are present.

From my left, Deputy Chair, Don Clarke and Audit Committee Chair and Non-Executive Director Denise McComish. Of course, our Managing Director, John Guscic, Senior Independent Director, Brad Holman, and of course Shelley Roberts is joining us from the UK - I can't see if she's on screen anywhere, but I am assured that Shelley is with us.

I would also like to take this opportunity to introduce some of the members of our senior management team who are present today. There are too many to call out individually but I do wish to acknowledge our Chief Financial Officer, Tony Ristevski, who is also our Company Secretary, and our Global Chief Operating Officer, Shelley Beasley.

Finally, I'd like to acknowledge the presence of our audit partner from Deloitte, Stephen Roche, who has now led the audit of the Company's accounts for the fifth successive year, ending with the FY22 audit. We'd like to thank Stephen for his services over the past five years and of course welcome

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Chris Biermann, to his right, as our new audit partner for the FY23 audit. Thank you, Stephen, and welcome, Chris.

There are two major components to today's meeting - firstly, an update on the business and secondly, the formal business of the meeting.

I will start by making some introductory remarks about the business, about FY22 and subsequent events in my Chair address. Then I'll hand over to John, who will update you on your Company's performance and outlook.

We will then move to the formal business as set out in the Notice of Meeting. I will start by tabling the Company's 2022 financial year annual report and accounts for comments. Then we will put three resolutions to the meeting, the first of which is to adopt the remuneration report, second of which is to re-elect Shelley Roberts as a director, and the third is to adopt a new Constitution.

The minutes of the previous AGM of members held on 31 August 2021 were approved by the Board and signed in accordance with the provisions of section 251A of the Corporations Act. These minutes are tabled and there are copies available for inspection should any member wish to see them by contacting the Company Secretary.

The Notice of Meeting and Explanatory Statement were made available to shareholders on 29 July 2022 in compliance with the Company's constitution, and I propose to take them as read unless there are any objections.

Now a few words on formalities for questions and voting. For shareholders and proxyholders who are here in person today, you would have been issued a blue attendee card with voting details on the back. I will advise the procedure on how to ask questions and vote as we move through the business of the meeting.

Shareholders and proxyholders attending the meeting online can watch a live webcast and will have the opportunity to ask questions and vote on the items of business being put to today's meeting. For full details on how to log on to vote and ask questions online, refer to the user guide which can be accessed at Computershare dot com forward slash virtual meeting guide as advised in the Notice of Meeting. If you are having any issues, you can contact Computershare on 03 9415 4024. That's 03 9415 4024.

Resolutions 1 and 2 before you today are ordinary resolutions to be passed by simple majority. Resolution 3, which relates to the Constitution, is a special resolution which needs to be passed by at least 75% of the votes cast by shareholders entitled to vote on this resolution. The voting restrictions for all resolutions are included in the "Voting Restrictions" section of the Explanatory Notes in the Notice of Meeting.

Voting today will be held by way of a poll on all items of business. I appoint Nigel Bulling from our share registry, Computershare Investor Services as the Returning Officer.

To provide you with enough time to vote, I will shortly open the poll for voting for all resolutions. Voting will remain open until I declare the poll closed at the end of the meeting.

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In the event that technical difficulties arise during the course of the Meeting, I will have the discretion to determine whether and how the Meeting should proceed. If required to exercise this discretion, we'll have regard to the number of shareholders impacted and the extent to which participation in the business of the Meeting may be affected.

So a few words on questions for those attending in person. If you would like to ask a question, please raise your blue attendee card to ask a question when called upon to do so, and you may speak once you have been acknowledged by the Chair of the Meeting.

For those attending online, there are two methods to participate. One - to ask a question verbally, please follow the instructions below the broadcast window on the virtual meeting platform and the moderator will facilitate your participation in the meeting or two - to ask a question in writing, just press the 'Q&A' icon on your screen, type your question in the text box, then press submit. Written questions can be submitted online at any time during the meeting and will be addressed at the appropriate time.

I ask that you identify the capacity in which you are attending the meeting when asking a question, for example, as a shareholder or as a proxyholder.

Please note that while you can submit written questions online from now on, they will not be addressed until the relevant time in the meeting. Your questions may be moderated, or if we receive multiple questions on one topic, they may actually be aggregated. Due to time constraints we may run out of time. If this happens, we will attempt to answer your questions via email.

To assist us, could you please identify at the start of your question which resolution your question relates to.

For those attending the meeting online, please note that only shareholders and proxyholders will be able to lodge questions or comments via the online platform.

I encourage shareholders who are attending online to submit questions or requests to address the meeting as early as possible. That's a lot more complex than it used to be, isn't it folks?

Alright. How to vote - for shareholders and proxyholders who are attending in-person, you've been issued a blue attendee card with voting details on the back.

For shareholders and proxyholders who are attending online who are eligible to vote, the vote icon will appear on the Computershare meeting platform. Selecting the icon will bring up a list of the resolutions and present you with your voting options. To cast your vote simply select one of the options. There is no need to hit 'submit' or 'enter' as your vote is automatically recorded. You will receive a vote confirmation on your screen. You can however change your vote by making a different selection up until the time voting is declared closed.

Again, if you have any difficulty submitting your question or voting, please contact Computershare dot com dot au forward slash virtual meeting guide or call on 03 9415 4024.

I now declare voting open on all resolutions. I will give you a warning before closing voting at the end of the meeting.

Shareholders should note that your Board strongly recommends you vote FOR all resolutions.

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During the formal business of the meeting we will display the proxy votes received on the screen behind me before the poll is conducted.

I'll briefly now recap on the 2022 financial year and then will pass to John for a more detailed commentary on the year and the outlook for the business.

This time last year I reflected on the carnage wreaked on the travel industry by the pandemic. After two and half years of hard work it is really gratifying to see the recovery well underway.

It's good to be able to sit here facing you today with high levels of confidence and optimism, a sustainably lower cost to serve, market shares up sharply, with customers who want to travel - and by and large, with one notable exception, all borders open. Our view is that consumers' desire to travel will continue stronger than ever, notwithstanding the many economic obstacles the world faces at present.

When I addressed shareholders this time last year, we reported 9 month TTV of $453 million, Revenue of $38.5 million and an Underlying EBITDA loss of $56.3 million. It was, of course, a 9-month period. In the 12 months to 31 March 2022, Webjet's financial performance really started to turn around with TTV of $1.638 billion, Revenue of $138 million and an Underlying EBITDA loss of $15 million.

I said in the annual report that the full year result, a statutory loss of $85 million after tax, did not reflect the heavy lifting that our team has done in rebuilding Webjet as a more efficient, streamlined business. When John gives his Managing Director address shortly and updates you on the progress we have made in FY23, and our prognosis, if you like, for FY24, you will definitely see the fruit of our team's labours coming through quite clearly. Our two major businesses have now returned to profitability, Group bookings are almost completely back to pre-pandemic levels on a significantly lower cost base, and cash generation is growing sharply.

Notwithstanding this very positive momentum we also live by the maxim 'once bitten, twice shy'. We are watching the environment very closely. We continue to watch cash, cash flow and debtor risk very closely, and are obviously tuned in to the global forces threatening prosperity - war in the Ukraine, high inflation, energy and food prices skyrocketing, a still-broken supply chain and an on-again, off- again pandemic.

Of course, of particular concern for us has been the partly broken nature of many parts of the travel value chain. From airports to borders, from customer service to flight cancellations, it just is not yet quite back to normal. While the system is mending itself, we are very focused on doing what we can to restore our own customer service to the levels we have always aspired to. I like to think back to our founder David Clarke, whose ethos of convenience, choice and customer service still drive our thinking today.

Notwithstanding the challenges we face, at Webjet we are optimistic about our company and the unique place it holds in the travel sector.

I would like to commend our senior management team, the wider Webjet team and my fellow Board members for staying the course during an incredibly difficult two and a half years. It really has been and is a privilege to work with such a talented and committed group of people.

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Finally, of course, on behalf of the Board, I would like to acknowledge our shareholders and to thank you for your support. It has been a difficult couple of years - but we are firmly of the belief that from adversity comes opportunity, and that our best years lie ahead.

With that, I'll pass over to you, John.

John Guscic: Thank you, Roger. And you mentioned the complexity of running a meeting - I'm doing this for the 11th year and it'll be the first one that I'll need glasses, so you'll have to bear with me. My vanity is no longer a precursor to being able to deliver the presentation.

So, as Roger has touched on, I'm going to spend a little bit of time going through what happened in 2022. The numbers weren't great, and they're a reflection of where we were in the travel recovery cycle. And I'll spend a little bit more time on where we think we are today and what we think the opportunity that is ahead of us, which we're very excited about.

So we move to the next slide. Group profitability in the second half of 2022 - we saw a recovery in both WebBeds and the Webjet OTA. WebBeds was driven by an improvement in our underlying performance in North America and Europe. And as we spoke about our driver of the reestablishment of the core components of our business, we said we would do it at a lower cost base and we started to see that occur in the second half of 2022. And we'll talk a little bit about that and how that's tracking with regards to the current financial year of 2023.

The Webjet OTA business is profitable for the full year, notwithstanding the impact of Omicron which seems such a long time ago now, and we started to see a little bit of international bookings come back, having been predominantly a domestic booking marketplace in financial year 22. GoSee

• we said that we would rebrand to enable us to get greater efficiencies, improve the customer experience and improve the underlying performance.

So at a high level, cost efficiencies were coming through, the businesses were returning to scale, and most importantly, we generated cash last year of circa $50 million, which is a cash surplus of $4 million a month, which, as Roger made specific mention to - 'once bitten, twice shy' - we're going to make sure that cash is at the forefront of all of our decision making criteria going forward.

Next slide. Key metrics are there for you to look at. I am extremely confident that come August 31st, 2023, the numbers will be a material improvement on everything that you see there. We will touch on this in regards to current trading, but TTV is up substantially, revenue will be up substantially, expenses will not be up at the same level that revenue and TTV have been up, and we will be significantly profitable this year with a view to getting back to our pre-pandemic EBITDA levels in the following financial year of FY24, which we think is a major milestone that very few travel companies around the world have got the ability to confidently predict.

Next slide. WebBeds' profitability in the second half - you can see the recovery occur and you can see a little bit of the muted response as a consequence of Omicron through the December-January period of last year. And I'll just make the point yet again that on track we will be 20% more cost efficient. You'll see that come through in this year's numbers.

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