Corporate Traveller's parent company, Flight Centre Travel Group (ASX: FLT), today released audited 2022 fiscal year (FY22) accounts.
The company took positive early steps on the path to post-COVID recovery during FY22 by:
- Increasing market share in key countries and sectors
- Achieving its targeted leisure and corporate return to profitability timeframes; and
- Delivering better than expected full year earnings.
FLT also starts the new fiscal year with solid momentum after a strong finish to FY22, with TTV recovery accelerating during the fourth quarter (4Q) and the company recording a $35million (AUD) underlying profit* for the period.
The 4Q uplift led to a modest second half (2H) profit – a significant turn-around from both the $184million loss recorded during the 1H, while heavy restrictions remained in place globally, and the $182.2million loss recorded during FY21 2H.
The $183.1million full year loss was:
- A 46% improvement on the $337.8million FY21 result; and
- Well within FLT’s upgraded guidance range ($180million-$190million loss).
Corporate Segment Result & Strategic Update
Since the start of the pandemic, FLT’s corporate businesses have focused on Grow To Win, a global strategy based on enhancing capabilities across both the FCM and Corporate Traveller brands, retaining existing customers and winning large volumes of new accounts.
This strategy has started to deliver tangible benefits, as evidenced by the $2.5billion pipeline of FY22 account wins, global market-share growth, and the return to record monthly gross TTV levels in June 2022. The business is now set to gain scale benefits as transactions take off and as efficiencies deliver a lower cost per transaction, paving the way for profit growth.
During FY22, the corporate business delivered a $13.5million profit, which was underpinned by a $38.6million 4Q result.
TTV increased 158% to $5.6billion over the year, with $2.3billion generated during the 4Q – a TTV run-rate that would, if extrapolated over the year to June 30, 2023, exceed the record $8.9billion result achieved during FY19.
The ANZ, Americas and EMEA regions each generated circa 30% of FY22 corporate TTV, highlighting the business’s geographic diversity, with the balance coming from Asia, a region that now includes the start-up FCM Japan joint venture (launched in January).
In Australia, FLT maintains very high corporate market-share and continues to win unmanaged business and accounts from competitors. Wins are accelerating, as competitors struggle to meet clients’ needs in the current trading climate.
The Americas and EMEA businesses are, however, likely to overtake ANZ as the company’s largest corporate regions in the near-term given comparative market sizes, FLT’s small but growing market-share and the volume of new business being won within the two regions.
Overall, FLT’s corporate market-share in Australia, the US, the UK, Canada, New Zealand, and South Africa has increased from 6.3% during the FY19 2H to 7% during the FY22 2H (Source: GDS/MIDT data).
Comments from Tom Walley, Corporate Traveller Global Managing Director:
“As international travel roars back to pre-pandemic levels, it’s heartening to see SMEs spearheading the return of the business traveller. We close off the financial year in terrific shape, reinforcing Corporate Traveller’s recovery from the impacts of the pandemic and furthering our position as THE travel management company for SMEs.
“Our secret sauce? We put it down to the power of our people, bolstered by great tech. Our high-tech high-touch approach firmly places our customers’ needs front and centre. This is what defines us, and why we are leading the charge in the SME space and in the global markets where we operate.
“As business travel continues to ramp up at pace, new priorities for travellers are emerging. Having accelerated our investment in next generation technology during the pandemic, we’ve been able to swiftly provide an immediate solution in the shape of Melon, our new proprietary travel management platform.
“Through the actions we’ve taken – improved digital experience, reinvigorated products and services – we are helping customers maximize their productivity, make decisions around their travel programs while keeping their travellers informed and safe before and during trips as they propel their businesses forward in this changed world.
“With global corporate travel bookings now exceeding pre-pandemic levels, it is this powerful commitment in our business and customers that sets us apart from the competition and why we’ve gaining market-share globally though significant account retention and record account wins over the past year.
“Despite the challenges of the current economic environment, the outlook for Corporate Traveller and SME travel is positive, evidenced by robust performance to date. Alongside our clients and industry partners, we are running the business for the long term and are confident that we are well-positioned to continue driving value in the year ahead.”