Transforming
business travel
Darrin Grafton, CEO
Important notice
This presentation is not an offer of securities. It is a summary and does not purport to be complete, accurate or independently verified. Any forward looking statements are subject to known and unknown risks, uncertainties and assumptions, so may not be correct. This presentation does not constitute financial, product, investment or other advice and does not take into account the particular needs of individuals. When making an investment decision you should consider your financial circumstances and seek independent financial and other professional advice. Do not rely on any information contained this presentation.
All information in this presentation is current at the date of this presentation, and all currency amounts are in NZ dollars, unless otherwise stated.
Agenda
1. Introducing Serko
2. Business performance review
3. Serko deep dive
– The market for travel & expense
– Product strategy
– Business model review
About Serko
• Australasian leader in Online Travel
and Expense Management for the business market
• Founded 2007, listed on NZX Main
Board in June 2014
• High growth, dynamic business
employing 132 staff in 4 countries
• Objective to transform business travel
FY15 financial performance review
• Income from online bookings,
customisation and per-‐active user month subscriptions for expense management
• First half Fy15 : Total revenue up 50%
and online transactions up 32% (compared to same period FY14)
• Continued strong growth through
second half of FY15
FY15 business performance review
• Serko Travel Agent reseller base fully engaged– 90%* of AU and NZ corporate travel spend now accessible through reseller base
– Existing reseller contracts extending to cover Asia India and now the USA
• Flight Center contract fully activated
• Serko Mobile launched
• Expedia content launched
• Team expanding in line with plan
– 132 staff across 4 countries
FY15 Industry recognition
• Tin 100 -‐ Top 10 companies to watch inNew Zealand
• Top 25 Most Influential Executive 2014 in
Global market for travel and expense
• USD $1 trillion global market for corporate travel• Australian corporate travel ~ USD$23bn
– ~USD$3bn transacting through Serko today
• Asia corporate travel spend growing at ~10%
– India and China world growth engines
• US market back in growth mode ~4%
• Online expense management recognised as critical
business process and growing quickly
– Concur valued by SAP at USD $8.3bn
The business of managing corporate Travel
• 8-‐15% of non salary Opex
typically gets spent on travel
• Travel is essential but is often
an inefficient business process
• Booking policies exist, but are
difficult to implement
• Duty of Care emerging as a
serious concern/issue
• Adopting an OBT saves ~20%
on travel & protects employers
The business of managing corporate Travel
• Travel Agency industry is
commoditising quickly
• Agencies continue to own
corporate relationships
• Manual booking is labour
intensive making scale hard
• Technology is the answer to
scale, but not a strength
• Reselling a strong OBT helps
Travel Agencies to scale
• Increases overall Travel
Agency Margin
Travel Agents
• 8-‐15% of non salary Opex
typically gets spent on travel
• Travel is an essential but
inefficient business process
• Booking policies exist, but are
difficult to implement
• Duty of Care emerging as a
serious concern/issue
• Adopting an OBT saves ~20%
on travel & protects employers
Serko’s role in the travel content ecosystem
GDS Hotel Aggregators
Hotels Airlines Car Hire Taxi
Corporate Clients
Travel Agents (TMC)
Transforming corporate travel
Transforming corporate travel
HIGH RES SCREEN GRAB
Serko Online
• Used by travel arrangers/travellers
• Book, cancel & change flights, hotel, car
• Access to ‘leisure’ providers
• Preferred supplier promo^on
• Powerful policy management engine
• Integrated approvals workflow
Transforming corporate travel
HIGH RES SCREEN GRAB
Serko Mobile
• Used by travellers
• View extended i^neraries
• Change flights & hotels
• Flight alerts & duty of care
• Travel Concierge
• Booking coming in 2015
“Powered by Serko”
• E&R companies using FIFO rosters book
a lot of flights for crews
• Most mining companies use a Resource
Planning tool such as INX Software
• Serko partnered with INX to deliver
integrated Mass Booking capability
• Significant efficiency gains for mining
companies generating $$ saving
• Patented technology with rapid adoption
Page 16 • Copyright © 2015 Serko • All rights reserved
The business of Expense Management
• Essential but inefficient business process– High cost to manage, high friction
• Clear, well understood set of business benefits
• Industry best practice mandates using a single system
for managing all types of expense
– Corporate card, Out of Pocket, Mileage, Allowances
– Tightly coupled with Serko Online for approvals
• Corporate card market growing strongly as
organisations understand the card value proposition
• Product / sales strategy tightly aligned with Cards.
Serko Mobile
• Used by everyone
• Capture receipts • Edit items • Approve travel • Approve claims • NFC Payment (Future)
Transforming corporate expenses
Serko Incharge
• Create, edit and submit expenses
• Cloud-‐based receipt transla^on (OCR)
• View corporate card transac^ons
• Cloud-‐based matching of receipts
• Grouping of expenses & review
• Extensive repor^ng
Future of Serko products
• New predictive booking functionality
– Leveraging proprietary ‘big data’
– Desktop and Mobile
• More travel providers
• Tighter coupling between travel & expense
• Deeper relationships with finance system
vendors & banking partners
• Duty of Care integration across product suite
Serko revenue model
Travel Agents pay per booking for Serko Online bookings
Organisa^ons pay per ac^ve user month for Serko Incharge
Travel Agents pay for sobware
Serko revenue model
Travel Agents pay per booking for Serko Online bookings
Organisa^ons pay per ac^ve user month for Serko Incharge
Travel Agents pay for sobware
customisa^on Travellers pay for
Premium Func^onality for Serko Mobile
Serko revenue model
Travel Agents pay per booking for Serko Online bookings
Organisa^ons pay per ac^ve user month for Serko Incharge
Travellers pay for Premium Func^onality
for Serko Mobile
Hotel providers pay per-‐room
night
commission Travel Agents pay for sobware
Serko revenue model
Travel Agents pay per booking for Serko Online bookings
Organisa^ons pay per ac^ve user month for Serko Incharge
Adver^sers pay for access to Serko Mobile
users Hotel providers
pay per-‐room night
commission Travel Agents pay for sobware
customisa^on Travellers pay for
Premium Func^onality for Serko Mobile
Serko revenue model
Travel Agents pay per booking for Serko Online bookings
Organisa^ons pay per ac^ve user month for Serko Incharge
Travel suppliers pay commission for
bookings Hotel providers
pay per-‐room night
commission Travel Agents pay for sobware
customisa^on
Adver^sers pay for access to Serko Mobile
users Travellers pay for
Premium Func^onality for Serko Mobile
Page 26 • Copyright © 2015 Serko • All rights reserved
Summary
• Strong market and good traction
• Sound business foundation with strong
leadership and investor base
• Engaged reseller base across Australasia
driving transaction volumes
• Geographic expansion into Asia under way
– Underpinned by existing relationships
• New revenue generating products and
opportunities ready for FY16
