HLO 2021 AGM CEO Address and Presentation

For personal use only

10 November 2021

The Manager

Markets Announcement Office

ASX Limited

Level 4, 20 Bridge Street

SYDNEY NSW 2000

Dear Sir/Madam,

Please find attached the CEO's address and AGM Presentation to be presented at Helloworld Travel Limited's 2021 Annual General Meeting, being held today at 10:00am AEDT.

Yours faithfully,

David Hall

Chief Financial Officer

Helloworld Travel Limited

Ph: [phone]

Authorised for release by Helloworld Travel Limited's Board of Directors.

Helloworld Travel Limited ABN 60 091 214 998 179 Normanby Road, South Melbourne, VIC, 3205 Telephone: [phone] Facsimile 03 9867 7244

For personal use only

CEO's Address

Melbourne, 10 November 2021

Welcome

Thank you for joining us this morning and for your continued support of Helloworld Travel Limited.

In particular, I welcome back our many long-term shareholders and of course welcome our new shareholders.

Financial Results

The financial outcomes from FY21 are clear from the numbers but I believe it's very important to highlight not just our financial performance but to also emphasise the extraordinary work of the very dedicated group of people both within the Helloworld businesses and in our travel agency and broker networks throughout both Australia and New Zealand.

It's been a period of exceptional challenge since March 2020, nearly two years ago and the incredible lengths that all of our personnel have gone to and the sacrifices they have made to keep the business going and to keep our costs under control has been testament to their commitment, dedication and professionalism. Similarly, the heroic efforts made by the owners and managers of the agencies that make up our retail agency and broker networks in Australia and New Zealand has been extraordinary.

Victory belongs to those who believe in it the most and believe in it the longest and within the Helloworld Branded, Associate, Magellan Travel, My Travel Group and MTA businesses in Australia and amongst the Branded, Associate, My Travel Group and Travel Broker networks in New Zealand the agents in our networks battened down the hatches and through sheer grit and determination have kept the lights on, ready for what is now finally emerging, namely the re-opening of Australia and New Zealand to the world.

From an airline perspective, Qantas has led the charge and already recommenced flights to Los Angeles and London and before the end of this month to Singapore. December will see the resumption of flights to Fiji, new schedules are already announced to commence operating in January to Johannesburg, Phuket and Bangkok and Qantas has announced new services directly to Delhi, putting Qantas direct services to India for the first time in over 20 years.

Much additional capacity is coming back across the Pacific, into Asia, Japan and to Europe and the UK and bookings are coming back very strongly.

Helloworld Travel Limited ABN 60 091 214 998 179 Normanby Road, South Melbourne, VIC, 3205 Telephone: [phone] Facsimile 03 9867 7244

For personal use only

The Australian people have heeded the call from State and Federal Governments that vaccination is the pathway out of this pandemic and vaccination rates are rapidly approaching 90% in Victoria and New South Wales while other States are a couple of months off getting there.

SA announced it was re-opening two days ago, Queensland is re-opening on 17th December, and we can only hope both WA and New Zealand get there as soon as possible.

The main point is that travel is back, pent up demand is huge and we are already seeing bookings for both domestic and international travel accelerating rapidly across Australia.

Over the last two years our focus has been to reduce costs in the business to ensure that with our known resources we could get through and out the other side of this pandemic. There is no escaping the fact that unfortunately this meant letting a lot of our people go. Helloworld incurred charges over $12 million in redundancies across the last 18 months. At the same time, many people at Helloworld and the broader travel industry sought opportunities outside of the industry and their skills and professionalism were welcomed across a range of different industries.

This added to the reduction in our employee numbers and costs but despite that and despite collecting significant assistance from governments in Australia and New Zealand to help with our personnel costs the company incurred an EBITDA loss in FY21 of some $24 million which included over $9 million of redundancy and restructuring charges.

At the same time, we saw our total transaction values drop to just over a billion dollars, roughly 80% down from FY19 levels and with international borders in Australia and New Zealand shut from the 20th March 2020, our international visitors to Australia, New Zealand and Fiji prevented from arriving, large parts of our business were effectively shut down.

Throughout a series of lock downs, including six in Melbourne totalling 267 days (38 weeks) our corporate division and particularly the teams handling our Federal, State and Territory Government business, were kept very active.

Acknowledgements

I want to thank those involved at Helloworld and our corporate businesses QBT, TravelEdge, Show Travel and APX in New Zealand in facilitating the travel for many vital parts of Government.

In addition, a number of our corporate partners for our QBT, TravelEdge and Show Travel businesses with APX and Atlas in New Zealand were also active in travelling domestically to keep their essential businesses running throughout the pandemic and we thank them for their support and continued business as well as all our corporate partners who had to stop travelling but are now coming back and making plans to see their key stakeholders both domestically and internationally.

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As I mentioned earlier, the retail travel agencies in both leisure and corporate travel on both sides of the Tasman have done an exceptional job in making the most of the very limited opportunities made available to them for interstate and intrastate travel. In New Zealand agents leveraged the opening of the Trans-Tasman bubble and the bubble with the Cook Islands and business to these two destinations boomed. There were brief windows towards the end of FY21 when virtually all the states and territory borders were open and people voted with their feet and headed off in droves until lockdowns in NSW and Victoria and the closing of State borders in July shut it all down again. The majority of our networks in Australia and New Zealand remain intact and while there have been a significant number of closures throughout the pandemic, all but a couple of these have been done with franchisees meeting their financial obligations to their customers and we are working with the administrators of two of the retail agencies to try and maximise the return to customers from those businesses.

The two divisions under enormous pressure during Covid were our Wholesale business and our Air Tickets business. Both operations were inundated with hundreds of thousands of cancellations and refunds, and this was exacerbated by having to cancel tens of thousands of new bookings that would come in as borders opened up and then closed again. The teams at both Viva Holidays, Go Holidays and Air Tickets did an extraordinary job working through the many challenges this presented, including a lot of additional work created by airlines switching off automatic refund processes and suppliers generally offering credits rather than refunds to customers.

Businesses in the travel, tourism, hospitality, and entertainment industries around this country have largely been operating on fumes for the last 20 months and while it's been difficult in the distribution and agency sector of the business our supplier partners have done it very hard. Particularly those in more remote destinations and in destinations where previously there was a high reliance on inbound tourism.

As we start to emerge from this, once in a generation crisis, we need to salute the many businesses, small, medium and large who have done it so tough over the last 20 months with openings, closings, density caps, no notice lock downs and other unique outcomes that saw our supplier partners in the airline industry, the cruise industry, the accommodation industry, the touring and transport industry, the hospitality industry and the entertainment and sport industries left reeling.

Despite that and with the help of State and Federal Governments they have kept going and their doors are now opening again as Australia and the rest of the world emerge from this unbelievable situation.

Australians and New Zealanders, who are amongst the greatest explorers and travellers on Earth, have responded throughout this pandemic in kind, supporting regional tourism destinations, supporting areas all over Australia and New Zealand when they have been able to do so and committing to holidaying right across our two great nations in droves across this coming Christmas, New Year and summer period delivering not only the cash boost that so many operators across the country need but most importantly delivering a morale boost right across Australia and New Zealand.

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To our shareholders I also want to thank you for your continued support of the business. Last year we raised $50 million and much of the support for that came from our existing shareholders including Fidelity, Cinzia Burnes and myself. Those who made the investment at that time have been rewarded with an uplift in our share price. As we head back to profitability in the second half of FY22 we hope that shareholders' persistence will be further rewarded as the company's value increases as borders around the world open up again and Australians and New Zealanders head back offshore in droves having booked those arrangements through our corporate, retail and wholesale businesses.

Technology Developments

Over the last 18 months while ensuring that we reduce the size of our business to a sustainable level, we did not take our eye off the ball with regard to the essential technology developments necessary to ensure that we can continue to offer our customers the best available technologies in market but at the same time can also ramp up more quickly and more efficiently as borders reopen and demand returns.

In particular our retail mid-office platform, ResWorld, has now been rolled out at over 120 agents in Australia and New Zealand. Most of the rollouts taking place during the pandemic as both Helloworld and our agents kept on eye on the future, and we have an aggressive pipeline of rollouts for 2022 and beyond which will see over 300 agents moving across to our mid-office solution by the end of next year. The system is being rolled out to our agents in New Zealand and the corporate version, which is in beta testing at present, will be rolled out to corporate agents in 2022. This is a very significant development and from mid-way through next year we will be exploring opportunities to offer this system in international markets as well as in Australia and New Zealand.

Very significantly in our wholesale business as well we have moved off the Calypso system and rolled out a new booking platform, Mango, in partnership with Tourplan. We have been working with Tourplan for over 25 years and developed some very sophisticated bespoke technologies both internally and in partnership with Tourplan and this is our most significant technology enhancement yet in this area. It is already delivering much greater efficiencies into the business and delivering significant cost savings while delivering a better outcome for our agents and our supplier partners.

And in our corporate division we have rolled out a number of technology enhancements including a new analytics program, significantly enhanced process automation and enhanced duty of care products to ensure our corporate travellers are fully conversant with the risks of any particular destination in which they are travelling to ensure we have the capabilities to look after them in the event of any issues whilst they are off-shore.

In an uncertain world, we firmly believe that both leisure and corporate travellers are best served by utilising the services of a travel agent or travel management company.

These investments in our technologies will deliver increased returns to shareholders in the period ahead as they will allow us to ramp up far more quickly than we would have been able to do pre pandemic but importantly will also allow us to be a lot more productive as a business with these enhanced technologies in place.