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 focusing 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 focused 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 Tom Walley, Global Managing Director, Corporate Traveler:
“Flight Centre Travel Group has announced its EOFY results to the ASX and the overarching message is that travel is back globally, and in our world in particular, SME travel is soaring once again!
We’re very proud to say that all CT countries were profitable this financial year, with both the UK and Australia leading the charge, while North America also saw really strong profit growth in H2.
Despite the economic headwinds, business travelers are refusing to give up that particular facet of their budget, with a recent survey by Corporate Traveler in Australia revealing that 91 per cent of SMEs will continue their business travel, even if the country enters a recession.
Elsewhere, London remains the beating financial heart of Europe and we’ve seen SMEs in particular come roaring back to travel, with Corporate Traveler in the UK seeing a 22 per cent increase year-on-year in total win value – while average account size is also up 32 per cent.
In the US, it’s been a landmark year for Corporate Traveler’s innovative proprietary platform, Melon, with online adoption for customers doubling since the start of the year, online transaction volume quadrupling, and a 98 per cent customer satisfaction score received from our chat support.
Another proof point for corporate travel resilience comes from South Africa where, despite issues surrounding the Rand and electricity supply, both Corporate Traveler and FCM have thrived – with both businesses achieving record results.
Corporate Traveler in New Zealand has also enjoyed exceptionally high customer retention rates that have been bolstered by some significant new business wins.
Here’s to an incredibly exciting FY24."