Flight Centre Travel Group EOFY FY23 Financial Results
Flight Centre Travel Group Records Strong Profit Turnaround During 2023 Fiscal Year
Flight Centre Travel Group (ASX:FLT) recorded a strong profit turnaround during FY23.
The diversified global travel company delivered AUD$301.6million in underlying EBITDA for the 12 months to June 30, 2023 – an almost AUD$485million turnaround from FY22’s AUD$183.1million underlying loss.
The result represented a 265% YOY improvement and was above the mid-point in FLT’S upgraded, targeted profit range FY23 (AUD$295million-AUD$305million).
On a profit before tax (PBT) basis, the company achieved an underlying AUD$106million profit (FY22: AUD$361million loss) and an AUD$70million statutory PBT (FY22: AUD $378million loss).
FLT's corporate travel business continued to out-perform, comfortably out-pacing broader industry recovery and delivering record TTV during FY23.
The AUD$11billion FY23 result represented 96 per cent YOY growth (FY22: AUD5.6billion) and an almost 25 per cent increase on the previous TTV record (FY19: AUD$8.9billion).
New TTV milestones were established in all geographic segments, with the Europe, Middle East, and Africa (EMEA) business topping its previous record by 59 per cent, Asia by 24 per cent, the Americas by 15.6 per cent, and Australia-New Zealand (ANZ) by 10.5 per cent.
The Americas business was FLT’s largest corporate operation, generating 31 per cent of group corporate TTV, just ahead of ANZ (30 per cent), EMEA (28 per cent), and Asia (11 per cent).
For the full statement to the ASX, CLICK HERE.
Comments by Chris Galanty, Global CEO, Flight Centre Corporate:
“Our global corporate travel business – with flagships FCM and Corporate Traveler – has continued to outperform, delivering record Total Transaction Value (TTV) in FY23 in a market that has generally seen an improvement, but has still yet to recover fully to pre-pandemic levels.
“We’ve invested significantly for the future by focussing on customer retention and securing large volumes of new clients, in both the large market and SME segments, while expanding our sales force worldwide and introducing new innovative platforms and products for our customers globally.
“We’ve also concentrated on our people, prioritising recruitment, training, and development ensuring we are fully equipped to help customers as dedicated travel consultants continue to be a critical facet for large businesses and SMEs when it comes to their travel management programs.
“Our grow-to-win strategy has continued momentum, our investment has seen us take huge strides forward, and we’re proud to have opened new headquarters in both New York and London this year.
“This growth focussed approach has given us a real competitive advantage and enabled our duo of category-leading brands to boost market share by retaining, winning, and implementing a larger volume of business.
“We continue to be industry leaders when it comes to technology with our innovative proprietary platform for Corporate Traveler, Melon, thriving in both the UK and USA, with AI also making a real difference for our FCM customers. We’re also still proudly the only travel management company globally to have our own aggregator to provide our clients with NDC content through TPConnects.
“As the global economy remains under pressure, the corporate travel outlook is positive, evidenced by our robust performance in FY23, and supported by the Global Business Travel Association’s recent 2023 Business Travel Index™ Outlook, noting that global business travel spend is expected to surpass its pre-pandemic spending level of $1.4 trillion (USD) in 2024.
“For economies to survive, recover, and thrive – big business and SMEs must continue to travel for meetings, events, and conferences to retain staff, recruit the best talent, and win new contracts – these are just some of the factors that have played a part in such a strong corporate bounceback.”
Comments by Ciarán Kelly, Managing Director Middle East & Africa, FCM Travel Solutions:
“Travel is back and back in a big way for our corporate customers across all of the MEA region, both departing and arriving. The region continues to thrive now that most travel obstacles are a thing of the past, the USA has dropped its vaccination entry requirements, and China has reopened to the world.
“Our global ‘Grow to Win’ strategy is full steam ahead across our 30 countries in MEA, from the UAE, Saudi to South Africa, Nigeria, and beyond and this has seen us continue to gain market share through high customer retention rates and a large volume of new account wins for both the SME sector and our large market pillars. The UAE in general has been strong for us throughout Covid as Dubai continued to be a hive of activity for conferences, events, and relocations for many clients. The Dubai to Riyadh route is now our top destination with all the giga projects happening in the Kingdom – flights are constantly full on this ‘commuter’ route.
“It has also been a record-breaking year for FCM regarding turnover, with a proud customer retention rate of 98 percent and winning major global clients such as Shell and recently several FMCG large corporates closer to home for the MEA region – with key decisions being made in the UAE and South Africa for regional contracts. We’ve already started off the new financial year with a cluster of new clients – a few deals worth $40m+ in the last two months in the MEA region. Companies are consolidating their travel suppliers.
“This is the trend we have continued to see since Covid – more than ever before. Corporates are now seeing the value of travel management consolidation, with more visibility of their spend, data consolidation, approval processes, supplier negotiation, duty of care, tech, and service consistency when working with one travel management company. We are advising and implementing customers consolidating for the first time across numerous countries, ranging from small projects involving 5 countries to larger scopes of work with 20+ markets in MEA and benefiting from our FCM Platform and our knowledge of the nuances in this part of the world.
“When you assess FY22 versus FY23, business travel has leapt by more than 172 percent and the confidence from corporates is clear, with advance booking days extending from 15 to 20.
"The top business travel industries this year are Mining/ Oil/Gas, NGO’s FMCG, Construction, Technology and Financial Services. As always, we thank each and every one of our valued customers – we collectively look forward to an exciting FY24.”
The full ASX announcement can be viewed, HERE.
