Investor Presentation. November 2008

Transcription

1 Investor Presentation November 2008

2 Forward-Looking Statements This presentation contains forward-looking statements that involve risks, uncertainties and other factors concerning, among other things, Orbitz Worldwide s (the Company s ) expected financial performance and its strategic operational plans. The Company s actual results could differ materially from the results expressed or implied by these forward-looking statements and reported results should not be considered as an indication of future performance. More information regarding these and other risks, uncertainties and factors is contained in the section entitled Risk Factors in the Company s filings with the Securities and Exchange Commission ( SEC ), which are available on the SEC s website at or the Company s Investor Relations website at You are cautioned not to unduly rely on these forward-looking statements, which speak only as of the date of this presentation. All information in this presentation is as of November 10, 2008, and the Company undertakes no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this presentation. 2 This presentation contains non-gaap financial measures as defined by the SEC. These measures may be different from non-gaap financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP). Reconciliation between GAAP and non-gaap measures can be found under the section entitled, "Other Financial Info" on the Company's Investor Relations website at

3 Company Overview

4 Orbitz Worldwide Leading Global Online Travel Company 4

5 Company Overview IPO July Gross bookings $10.8 billion (1) 2007 Adjusted net revenue $850 million (2) 2007 Adjusted EBITDA $146 million (3) % of 2007 Adjusted Net Revenue 80% 20% 43% 57% Domestic International Air Non-Air and Other 5 (1) Gross bookings exclude Travelbag, an offline U.K. travel business sold in July (2) Adjusted Net Revenue excludes Travelbag and adjusts for the impact of purchase accounting. (3) Adjusted EBITDA excludes Travelbag.

6 Large Market Opportunity 2008E U.S. Online Sales ($B) Online Travel* $108 Global travel market is estimated to be $994 billion in 2007 Apparel Computer hardware/software Home Products Consumer electronics Flowers / cards / gifts Music / video $27 $24 $24 $16 $13 $9 6 Estimates: Forrester Research and PhoCusWright * Online travel includes leisure / unmanaged sales only

7 Online Travel Industry Has Room to Grow Market Penetration Market Size ($B) (1) U.S. 65% 53% 44% 35% 47% 56% $74 25% $116 17% $158 Offline Online Europe & Asia E 91% 83% 71% 9% 17% 29% E E $40 41% 34% $141 $ E 7 Estimates: PhoCusWright (1) Market size is based on Gross bookings -- includes both leisure/unmanaged and managed bookings.

8 Significant International Growth Prospects U.S. International 2007 Gross Bookings Share of Top Four Rank 2007 Gross Bookings Share of Top Four Rank Orbitz (1) $9.4 B 28% #2 $1.4 B 11% #4 Expedia $13.9 B 41% #1 $6.0 B 47% #1 Travelocity (2) $8.2 B 24% #3 $2.7 B 21% #2 Priceline.com $2.2 B 7% #4 $2.6 B 20% #3 8 Source: Company Financials and estimates (1) Gross bookings exclude Travelbag (2) Estimates

9 Strategy for Revenue and Profit Growth Reaccelerate growth in the U.S. Continue to execute on our long-term strategies Increase penetration of fast-growing international markets Drive growth in higher-margin non-air categories, including advertising, hotels and dynamic vacation packages Expand Adjusted EBITDA margins 9

10 Reaccelerate Growth in the U.S.

11 Strategy to Reaccelerate Growth in the U.S. Deliver innovation that meets customers needs Orbitz Price Assurance SM MyIdealBeach Create advertising that is a call to action Improve monetization of site traffic Drive incremental traffic from partnerships 11

12 Orbitz Price Assurance SM Orbitz Price Assurance enables customers to book today with the confidence that if another customer subsequently books the same airline ticket for less on Orbitz.com, they will be reimbursed the difference. Customer receives a check for the difference automatically. Trends to date indicate we will be mailing out thousands of checks each month to our customers, consistent with our expectations. We believe Price Assurance creates a competitive advantage that will drive customers to search and book their travel on Orbitz.com. 12

13 How Orbitz Price Assurance SM Works 1 Mark books his ORD-SFO flight $500 Orbitz compares 2 Monitoring Mark s itinerary for transactions < $500 future transactions 3 Brenda subsequently books same itinerary as Mark for $400 $400 4 Mark is notified of pending $100 credit 5 New price trigger set Monitoring itinerary for transactions < $400 6 Mark & Brenda s flight departs 7 Orbitz transmits credit details to 3 rd party rebate provider 8 Rebate processor sends $100 check to Mark 13 Departure Date

14 MyIdealBeach.com Conforms the search process to the way consumers think about their vacations Makes it easy for consumers to search by what they want to do Changes emphasis to experience from traditional dateand-place searching 14

15 Advertising New marketing campaign addresses the issues most relevant to consumers price and ease of use Gives consumers very specific reasons to visit our site Builds on and promotes our innovation 15

16 Increase Penetration in Fastgrowing International Markets

17 OWW International Growth 35% $1,398 32% $1,385 $1,032 $1, Mos Mos International Gross Bookings ($MM) (1) 17 (1) Gross bookings exclude Travelbag.

18 ebookers Online full-service travel company 13 country-specific sites New global technology platform should increase gross bookings growth and improve profitability 18

19 New Global Technology Platform Provides single platform for all ebookers sites Launch of European sites expected to be complete by year end Triples number of hotels available to customers Driving large increases in hotel and package sales Eliminates redundant back-office functions and increases automation Improves customer service Facilitates expansion to new countries 19

20 International Hotels - HotelClub International hotel-only sites have been the fastestgrowing major segment of the online travel industry HotelClub offers hotels in ~120 countries around the world in 15 languages and 14 currencies 2 distinct business models and brands HotelClub merchant model site with membership component RatesToGo last-minute retail model site 20

21 21 International Coverage Over 120 Countries

22 Drive Growth in High-margin Non-Air Categories

23 Non-Air Opportunity Gross Bookings Mix 27% 73% 50% 50% Orbitz WW 9 Mos U.S. OTCs 2008E* Air Non-Air and Other (2) 23 * Source: PhocusWright Non-Air and Other includes Hotels, Dynamic Packaging and Other Orbitz WW gross bookings exclude Travelbag.

24 Growth of Non-Air and Other Non-Air and Other Adjusted Net Revenue ($MM) (1) 15% 14% $419 $483 $367 $ Mos Mos (1) Adjusted Net Revenue excludes Travelbag and adjusts for the impact of purchase accounting and Travelport Corporate Solutions.

25 Mix Shift Delivers Profitability Improvement Domestic Net Revenue / Transaction (As a Multiple of Air) 9X 3X 1X 1X Packages Merchant Hotel Car Air 25

26 Drive Non-air Growth Grow advertising revenues Build our hotel business Grow our hotel sourcing team Develop direct relationships with more hotels Enhance hotel extranet to attract additional hotels Drive dynamic packaging Improve attachment rate for attractions and services 26

27 Advertising Initiatives Building non-travel advertising Increasing partnerships with international, state and city tourism and convention boards Added sponsored link ad program on Orbitz and CheapTickets 27

28 Build Global Hotel Sourcing Team Increase hotels available for booking on sites Particularly in secondary and tertiary markets Hotels available across all sites globally Build direct relationships Enhanced, more flexible content Increased promotional opportunities Number of International Hotel Managers 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08* 28 *Planned staffing level

29 Progress in Increasing Non-Air Net Revenue % Net Revenue U.S. Domestic Air-only Leisure Travel (1) 3Q % 3Q % Non-air and Other Air 3Q % 22% 81% 3Q2007 All Other Net Revenue U.S. Domestic Air-only Leisure 42% 58% 78% 29 (1) Domestic flights only; excludes corporate, dynamic packages and attachments

30 Financial Review

31 Adjusted Net Revenue Growth (1) ) 15% 12% $659 $759 $ $MM 31 (1) Adjusted Net Revenue excludes Travelbag and adjusts for the impact of purchase accounting and Travelport Corporate Solutions.

32 Adjusted EBITDA Growth (1) ($MM) 26% 32% $88 $111 $ (1) Adjusted EBITDA excludes Travelbag.

33 Third Quarter 2008 Results Adjusted EBITDA $43M Gross bookings up 4% to $2.7B (1) International gross bookings up 16% (1) ebookers gross bookings up 26% (1) Net revenue $240M vs. $221M in Q International non-air and other net revenue up 20% driven by strength in hotel, car and dynamic packaging Net loss of $287M vs. $32M in Q3 2007; 2008 includes impairment charge of $297M 33 (1)Gross bookings exclude Travelbag.

34 Third Quarter Achievements Launched the new ad campaign for Orbitz Price Assurance SM in July Increased advertising revenue over 60% Migrated Netherlands and Austria to the new global platform in Q3, and then Germany, Switzerland and Spain in October 34

35 Strong Financial Condition $MM Cash and Cash Equivalents Debt Total Equity Net Debt/Adjusted EBITDA (1) Adjusted EBITDA/Interest Expense (1) As of 9/30/08 $ 103 $ 620 $ (1) Adjusted EBITDA excludes Travelbag.

36 36 Orbitz Worldwide Leading Global Online Travel Company