Asmallworld AG (ASWN) Earnings Call Transcript & Summary

Good day, and welcome to the ASMALLWORLD Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Jan Luescher, CEO of ASMALLWORLD. Please go ahead, sir.

Thank you, Katie. I would like to welcome everyone to this earnings call for ASMALLWORLD's 2020 full year results. I thank you for your continued interest in ASMALLWORLD, especially during these challenging times we find ourselves in right now. My name is Jan Luescher. I am the Chief Executive Officer, and I will lead you through today's call. The presentation that I'm going to use for this call is available on our corporate website. In case you have not yet downloaded this presentation, you can find the link to it in this morning's press release or you can go straight to our corporate website. The URL is www.asmallworldag.com, asmallworldag.com. Once on the site, please select from the menu, Investors, and there Investor Documents, where you will find our most important downloads. And at the top of that list, you will find a document called 2020 Full Year Results Presentation, which is the document I will use for this call. So again, the document is called 2020 Full Year Results Presentation. As always, I will touch on the operational and financial highlights for the year and will provide more context and background for you to better understand our results. And in the end, we will also open up for a Q&A session. So let's start with Page #2 of the presentation, and I would like to briefly recap the ASMALLWORLD vision. ASMALLWORLD is the world's leading travel & lifestyle community as we focus on experiences, the modern definition of luxury. And centered around the ASMALLWORLD social network, we operate a digital travel and lifestyle ecosystem, which aims to inspire our member to travel better, experience more and to make new connections. Page 3 then shows an overview of all our businesses as of today. This mobile group consists of 7 businesses that make up what we call the ASMALLWORLD travel and lifestyle ecosystem. At the center is the ASMALLWORLD social network, which attracts an affluent customer segment with a high willingness to spend on travel and experiences. This audience then creates demand for other businesses, which range from events to the world's leading nightlife concierge with The World's Finest Clubs to bespoke travel arrangements and hotel bookings. In short, with the ASMALLWORLD social network, we attract our customers, and then we increase our share of wallet for -- with those customers with our additional businesses. What I want to point out here is also that during 2020, we have launched our latest business, the ASMALLWORLD Collection. And we have now reached our target setup of the ASMALLWORLD travel and lifestyle ecosystem for the time being. And this was really an important step for us as we can now move from building new businesses, which always requires a lot of attention and a lot of resources to improving the businesses that we have. And I will talk more about the ASMALLWORLD Collection in the services section. Now let's move on to Page #5, where I would like to address the topic that has dominated the headlines in 2020, which is COVID-19. The COVID-19 pandemic created a difficult market environment for pretty much all of our businesses. And I guess, we're not the only business; also for, I guess, every business in the travel and lifestyle space. Specifically, travel and social distancing restrictions impacted the demand we have seen for our services, which was felt the most in our Services business unit. And there specifically in reduced demand for travel services and for our events because we just couldn't do as many events in 2020 as we could do in 2019. Further, these restrictions also had a negative impact on the Subscriptions segment, where we saw a temporarily reduced attractiveness of the ASMALLWORLD and First Class & More memberships, which are, of course, heavily geared towards travel and events. And if those things don't take place or are not possible, then there's less of an incentive to actually buy these memberships. Further, ASMALLWORLD -- sorry, The World's Finest Clubs also saw a significant drop in demand as the global nightlife business or the global nightlife in general came to virtual standstill. Clubs are closed, so we're not -- we didn't see a big demand for the membership and our nightlife concierge. All in all, you get the idea that the market environment was hardly ideal for ASMALLWORLD in 2020. And therefore, also limited our opportunities to grow quite significantly. With this introduction on the general market context, now let's move on to the operational highlights for the year on Page #6. As mentioned, the most important highlight was the launch of the ASMALLWORLD Collection in July. This is a completely new business, and it will allow us to monetize our audience further by generating income from hotel bookings. The launch of the collection also completed our travel and lifestyle ecosystem and all businesses that we want to have are now in place and fully operational. In terms of sales, we had strong Prestige membership sales on the back of increased demand for business and first class travel during the pandemic. We also saw strong sales for -- our First Class & More Diamant Membership, sort of the German word for diamond, as this mainly caters to German-speaking audience. Also worth mentioning that in response to COVID-19, we have also implemented strict cost control measures. So we quite early on focused on costs because we had a feeling that this would last longer than we expected in the beginning. And this helps to offset the impact of a dip in demand and also the cost that we had to invest into getting ASMALLWORLD Collection up and running. And we have also completed a full restructuring of the ASMALLWORLD travel team setup. You may remember that we had acquired LuxuryBARED as a travel agency in February 2019, which was based in the U.K. And then last fall, we decided to close the U.K. entity and move the legal home of the travel business to Switzerland to save cost and to have a more streamlined setup. This effort was completed by the end of last year. And the new setup is now in place and will permanently lower the cost of a travel setup going forward. As for the financial results, now let's turn to Page #7. As mentioned, that the COVID-19 pandemic created difficult market environment for us and resulted in a sales decline of 7%. So we moved from CHF 12.9 million in 2019 to CHF 12.0 million in 2020. Despite the difficult market environment and the corresponding decline in sales, we still managed to increase our EBITDA by 3% from CHF 1.45 million to CHF 1.49 million. And the overall EBITDA margin also increased by 1.8 percentage points from 10.6% to 12.4 percentage points. These results in terms of revenue and EBITDA, which are our main 2 metrics, came in at the upper end of our latest guidance. In terms of income, we've achieved CHF 0.7 million, which corresponds with CHF 0.06 per share. I would like to mention also that the operating cash flow increased by 67% from CHF 0.4 million to CHF 0.6 million year-on-year, demonstrating the ability of the company to generate cash from the core business even during difficult times. And just for reference, our cash position was at CHF 2.9 million per the end of last year. So to summarize these results. COVID-19 severely impacted our business due to the resulting travel and social distancing restrictions, which have hurt demand quite significantly. In addition, we also had to carry the investment cost from the launch of the ASMALLWORLD Collection, which is a completely new business that we started last July. And despite these 2 quite significant points, one external and one internal, we still managed to increase our EBITDA year-on-year. Even if it's not much, just 3%, we manage to sort of not only stabilize it but also like slightly move it up. And I believe this is an achievement we can be very proud of. I also believe that this solid result demonstrates the resilience of the business and should give an indication of what will be possible once we will come out of this pandemic, hopefully, at a later stage this year. And on Page #5 (sic) [ Page #8 ], you will see our most important metrics over the years. To give you a bit more context. Clearly, on the left there, the dip in revenue is not what we had in mind at the beginning of the year. But for the reason that explained the resulting decrease in demand. I think it's temporary, and we will soon return to growth again. And we still managed to increase the member base by 7% year-on-year, which is great. And in terms of EBITDA, you can see after our investment years in 2017 and '18, where we had a negative EBITDA, we've now sort of basically been on par with last year, which I think is great in itself, like given that we couldn't increase our revenues. I think it's a great achievement. So as the operational and financial highlights for the entire business, we are now moving on to the reporting of our 2 business units, Subscriptions and Services. Maybe quickly for participants who have just joined the call right now. You can download the presentation for this call from our investor website. The URL is www.asmallworldag.com. That is the asmallworldag.com. And once you're on the site, select Investors from the menu, and Investor Documents from the submenu. And at the top of the list, you'll find the relevant document, which is called 2020 Full Year Results Presentation. So 2020 Full Year Results Presentation. Good. Now let's move to the highlights of the Subscription business on Page #10. In short, the business unit, which sells memberships on a recurring basis, actually grew, which is great. It grew by 10% during the year. This was primarily due to 2 factors: strong ASMALLWORLD Prestige membership sales, this was primarily the result of an increased demand for business and first class flights during the pandemic, and the miles that are included in the membership are basically an affordable way for customers to pay for upgrades or by business and first class flights outright at the lower price than the cash cost. And then we've also seen the amount membership of First Class & More with strong sales growth. This was primarily due to clever marketing and status level strategies. And for the regular ASMALLWORLD membership, we've experienced quite a significant dip in new sign-ups. This was primarily driven by a smaller events program. So less reason to sign up for events. Less travel activity, which also drives demand, and obviously, social distancing restrictions in general, which impacted events but also people mingling in general. And frankly, probably also people had other priorities during the pandemic. On the positive side for the regular ASMALLWORLD membership, we've seen the renewal rates for ASMALLWORLD steady on a year-to-year comparison, which indicates a certain loyalty from our members even during difficult times, which is great and very positive. Also, World's Finest Clubs had a challenging year. As I mentioned earlier, the global nightlife pretty much stopped to exist in 2020. And with that, there was also no need for nightlife concierge service. So we took the time here to work on the CRM tool for the business, which has now been improved. And we're also working on a new website for the service, which will most likely launch in Q2 of this year. So that we're ready when this business should be ramping up again with a better website, which should lead to higher sales again. As a result of the above factors, we saw a bit of a shift in our sales mix, which had an impact on our EBITDA, which is slightly lower this year for the segment. This was primarily driven by higher COGS for the ASMALLWORLD Prestige membership. And here specifically for the air miles, which we buy from our partners, Miles & More and Etihad. On Page 11, you'll find a deep dive of the ASMALLWORLD Prestige membership, which, as I mentioned, was one of the bright spots last year. The ASMALLWORLD Prestige membership is one of our two premium memberships, which are really a travel benefits package. The most important value element of the membership, which is sold for EUR 5,200, are the 250,000 Miles & More award miles or the 250,000 award miles from Etihad. So customers can choose which one they want. The Miles & More one is currently the more popular one. These award miles can then be used to purchase flight awards. So you can buy a business or first class flight or you can buy or upgrade an economy flight to business or first class, which was extremely popular during the pandemic as people were sort of looking for more space and distance from other travelers. As a result, we've sold a record number of Prestige memberships last year, about twice as many as we sold in 2019. And since this beginning business is becoming more and more important for us, we have also made sure that we can secure our most important partner for this membership and have extended the partnership with Miles & More this February for another year, which is great. We also believe that the sales of the Prestige membership will be strong again this year as sort of global travel resumes. On Page #12, you will see an overview of the 3 memberships from First Class & More. First Class & More was acquired by us in 2018. And offers its customers, what we call, smart luxury travel. So the slogan is luxury travel at insider prices. And the service is the largest portal for insider travel deals in the German-speaking world. We offer 3 membership levels there: Gold for EUR 59, Platin or Platinum for EUR 199 and Diamant or Diamond for EUR 999. And with clever marketing campaigns, the team managed to create strong demand for the Diamant Membership, which is the highest price one. This was primarily done through a pairing with insider strategies to achieve airline status levels, a gold level for the airlines at a very low cost. And getting one of these status levels is always very popular with customers. So they basically bought the membership to acquire the knowledge to get these status levels at a low price, which worked really well during the pandemic and helped us to drive the amount of sales during the year. So these were a few of the highlights for the Subscriptions segment. Now let's move on to Page #14 for the highlights for the Services segment. As mentioned, travel and social distancing restrictions caused a hopefully temporary dip in demand for the offering of this business unit. And in summary, we saw our sales decrease by 30% year-on-year. So you will see -- or you will do the math that like if we could have state level on -- in the Services segment, we would actually would have been growing year-on-year. So it was really the Services segment that decreased in sales and sort of resulted in an overall dip in sales for the company. On the positive side, we still managed to improve the profitability of this segment by 6 percentage points due to better cost management. So looking at some of the highlights here on the right of the page. We saw in-person events for the ASMALLWORLD social network decrease by 73%. This was, of course, due to the social distancing restrictions, which sort of made it impossible to host events. We took the decision in April last year to not do any in-person events and kept that in place, I think, for about 6 months when we slowly started opening up again in places where it's safe. But overall, we had -- just to put it in context, in 2019, more than 1,000 events. And in 2020, we were only able to host 300 in-person events. This, obviously, had a direct impact on our events revenue but it also indirectly impacted the demand for the ASMALLWORLD membership as there were a few reasons basically to sign up. However, to compensate for that, we've actually created online event for the first time in our history, and we hosted close to 400 online events during the course of 2020, which shows how quickly the team actually reacted to this new environment. And the new lens have proven actually quite popular. And I believe we will keep them in our offering even once we can resume with in-person events because they are just liked quite a bit by our members. And I believe they will have a place in our offering even when we start with in-person events again. On the travel side, we saw a significant decline in travel sales by smaller private or a high-class sort of traditional high-touch travel agency. We saw many cancellations of existing bookings due to restrictions and not many new bookings. It was really a dire year for everyone who is a travel agency. And also similarly, the newly launched ASMALLWORLD Collection, which is our online hotel booking platform, saw very, very slow sales start from July onwards because during the pandemic, there were just not many bookings made on a global basis. However, going forward, I believe that the collection will be able to play a more important role once travel activity rebounds. And I would like to talk about this new service in a bit more detail on Slide 15 and onwards. So Slide 15. The ASMALLWORLD Collection is our latest business, and it was launched in July. The basic technology for this online hotel booking engine came from the acquisition of LuxuryBARED early in 2019. For over a year, our tech team has improved the back end functionality of the LuxuryBARED system. And we have also scrapped the front end and built 3 completely new front ends: one for web, one for iOS and one for Android within the ASMALLWORLD environment and would be ASMALLWORLD look and feel. We believe that the result is a modern and very intuitive and highly visually appealing booking experience with a distinctive look and character. And I am very proud of this latest addition to our service lineup. The ASMALLWORLD Collection is open to members but also nonmembers, so nonmembers can also book with us. All they need to do is to create a free basic account, and you can access the service right now with the URL, asmallworldcollection.com, or it's also embedded in our regular membership pages under the collection. So what are the selling points of the ASMALLWORLD Collection? For that, let's turn to Page 16. The slogan for the ASMALLWORLD Collection is, Hotels we love with extraordinary benefits. So let's look at the first part of this, which is hotels we love. We only feature hotels that we believe have the highest standards to ensure a great customer experience. So our focus is not on being complete and having all hotels. For that, I think customers will turn to a Booking.com or an Expedia. So -- but all our hotels are handpicked. We only have hotels where we think they have a great customer experience. So customers can book with confidence that they will be staying at a great hotel no matter what hotel they choose. So we launched in July with 650 hotels. We've added more than 200 hotels since the launch. So we're currently at 850 hotels and we will expand the selection to probably a target size of 1,200 hotels, which we will hopefully get to by the end of this year. Now that's about hotels we love. Now let's turn to the second part of our slogan, which is extraordinary benefits, on Page 17. For that, we've introduced our own branded rate, which is the ASMALLWORLD Preferred Rate. So when you look at the screenshot here, which is a room from the Hyatt in Majorca, you will see that customers can always choose between two rates. On the left, you will find the lowest rate, which is the best price available, which caters to more price-sensitive customers. And on the right, you will find the real reason to actually book with us, which is the ASMALLWORLD Preferred Rate, which comes with many exclusive benefits that really make this great value for money. So here on this specific one, you see, you get $100 resort credit. You get complimentary Wi-Fi. You get daily breakfast for two. You get early check-in, late check-out, or you get a room upgrade. So if you add these all up, this is easily like compensates for the difference in price. But also this is generally the cancellable rate. So with free cancellation and the same price that you will find for this rate on other websites. So in essence, what you actually get here is the cancellable rate. And in addition, all these benefits that I just mentioned, which makes it real value for money and, I think, a very compelling reason to book with us. Then moving to Page #18. So since the launch in July, we've not only added more hotels, we've also been constantly improving the booking experience itself. And we have also secured some, I would say, heavyweight partners, which will help us to make this service even better. Here on the slide, you'll see that we -- the logos of Marriott and Shangri-La. So we have signed agreements with them to become preferred travel agency programs for Marriott STARS and Luminous, which gives us access to hotels like the St. Regis, Ritz-Carlton, Bulgari, the EDITION and so on. But also with the Shangri-La Luxury Circle, which gives us access to the Shangri-La properties. And it will allow us to expand our hotel offering quite a bit going forward. Like I said, today, we have 850 hotels and the goal is to have something like 1,200 hotels, to have a very complete set of hotels and partnerships, which is such great partners really helped us to achieve this goal. Moving to Page #19. We have also introduced other great reasons to book with us, also in conjunction with external partners. So when you book with third-party tools like Booking.com or Expedia, you usually do not get loyalty points with your favorite programs. So you usually only get loyalty points when you book with the hotel sites directly. So for Hyatt, you book on the Hyatt page. For Bonvoy, you book on the Marriott page. However, we have now introduced a partnership with 4 hotel chains, which is: Hyatt, so that's the World of Hyatt program; Marriott with Marriott Bonvoy; the Hilton Honors, which covers like the Waldorf Astoria and the Conrad hotel; and then also the Shangri-La Golden Circle. So when customers book the ASMALLWORLD Preferred Rate with us, they will not only get all the benefits that we just talked about, but like now also, they will get loyalty points, which is another really compelling reason to book with us. And so they don't only get the benefits we already have, but they also now get the loyalty points. And on the website or also in the app, you can easily recognize hotels that -- where you can earn loyalty points with the logo on the page. But here, you see an example of the Grand Hyatt in Shanghai, where you see on the bottom right, the logo of the World of Hyatt indicating that you will earn loyalty points when you book that hotel with us. And then you put in your loyalty number, which we also store for future booking, and you'll get your points directly into your account from the partner. So these are some of the highlights now from the Subscriptions and the Services segment. Now let's move to Page #21 for the consolidated financials. I will highlight a few important metrics and changes, which allow you to more easily understand your results -- our results, apologies. And a more comprehensive annual report is, of course, available for download on our Investor website. So let's start with the income statement on Page 21. So as I mentioned, sales from our core business decreased by 7% due to lower demand, especially for our Services business on the back of the pandemic. The personnel expenses also were reduced year-on-year quite significantly due to a smaller team setup, but also due to furlough support from the government to a certain extent. The operating expenses were reduced to a reduction in discretionary spend, which is also a result of the focus on costs that I mentioned in the beginning, but also fewer costs for consultant and external parties, which we had in 2019 due to the acquisition of LuxuryBARED. And then the results on an EBITDA level, which is our focus metric for profitability, was an improvement by 3% year-on-year. Going further down, all the way down to the net result. The financial income is something that is worth mentioning, where it was a lot higher last year to, I would say, a onetime effect. The main driver for this was that we have liabilities in euro. And in Swiss francs, the liabilities became less due to an appreciated Swiss franc. So this effect, which was a lot smaller in 2020, and that's why the financial income was a lot smaller than last year. And then also it's worth mentioning that the income taxes have seen quite a significant change. Last year, we had a one-off effect from an IP transfer in the First Class & More setup, which we transferred from the German entity to the Swiss entity because the international entity for First Class & More is now in Switzerland. That resulted in a onetime tax effect last year, which was quite significant, was CHF 400,000. Obviously, this year, this effect wasn't there that's why the net result looks a lot smaller. But it's basically not because it got worse year-on-year, but because we had two strong onetime effects last year. So in summary, that meant that the earnings per share moved from CHF 0.11 to CHF 0.06, which is probably a more realistic number compared to where the EBITDA is this year. Moving on to the balance sheet on Page 22. We saw a reduction here in our cash position in the first line. This was due to a payout to First Class & More in conjunction with the acquisition. You will see on the next few pages that this sort of -- this event had quite -- or is actually -- has implications on a lot of the financial statements. So I think I'll just address it here. We paid CHF 5.6 million out to the founder of First Class & More. This is sort of split into 2 payments. Basically, CHF 1.9 million was due to the purchase price, which we said we would pay out of the -- over the next 3 years. And so CHF 1.9 million was paid last year. We also had EUR 3.5 million, or CHF 3.7 million, still in the books at acquisition, which actually were still like owed to the owner of First Class & More, which we also paid out now and sort of -- that was a onetime effect. So but all in all, CHF 5.6 million were paid out, and you'll see that impact our financials quite a bit over the next few pages. So that was mainly on the cash position. Here on this page, you will also see that the payments and accrued income has dropped quite a bit to decrease. This is mostly due to lower prepayments from travel arrangements and so on. And then also worth mentioning that the financial assets decreased. And this is due to the depreciation of that deferred tax asset or that onetime tax effect that we had last year, the CHF 400,000, which I mentioned, which is basically written off to put CHF 80,000 year-on-year over the next 5 years. And on the intangible asset, there was also a slight decrease due to the amortization of our intellectual property, which we also amortized over 5 years' period. And Page 23 shows the second part of the balance sheet. Here, we also -- we see a significant reduction in liabilities, which is due to that payment that we solved to First Class & More. So to start with a few of the highlights. Payments from goods and services were reduced there to -- primarily due to settlement of outstanding invoices, which is primarily Miles & More, but also a few others. So we paid off a few open items, which reduced that line. Then short-term -- other short-term liabilities, you'll see that they were significantly reduced year-on-year due to this First Class & More payout. And the long-term financial liabilities slightly increased. We have received funding from Pellegrino Capital, our anchor investor. And we've also taken advantage of government loans from Switzerland and the U.K. to the percent of CHF 900,000, which helped us with the financing of our business last year. And then long-term provisions were also reduced due to the payout from the acquisition of First Class & More. So overall, you see that the liabilities that we had year-on-year reduced quite a bit from CHF 19.3 million to CHF 13.5 million. And then looking at the equity, we have negative equity, of course, as we always have, which is because we directly deduct any acquisitions from our equity. We don't hold any goodwill on our balance sheet. So -- but the negative equity was reduced by CHF 1.2 million. Just for comparison, if we would have been -- we would have activated our acquisitions in terms of goodwill, or said another fashion, our total equity would have stood at CHF 7.6 million for the year, just to give an indication for -- if we would have used different accounting principles. So then moving on to Page #24. You will find here the first part of our cash flow statement. Here also to start with the payables from goods and services. They've been reduced quite a bit to that settlement of outstanding invoices, primarily Miles & More, as I mentioned earlier. And then that got us to a point where the operating cash flow improved by 67% to about CHF 600,000, which is great, shows that we actually managed to extract quite a bit of money from the core business, even with paying back quite a significant amount of open invoices in the goods -- payables from goods and services. So that's great. Then looking at the cash flow from investing activities or actually, in our case, a cash strain, you see that the number there is quite significant. It's CHF 5.6 million under the acquisition of subsidiaries, and this is actually the, again, the payout to First Class & More from the acquisition that I mentioned earlier. On Page 25, you find the second part of our cash flow statement. So here, the long-term financial liabilities are again in here with CHF 1.5 million. That's, again, the financing we received from Pellegrino Capital and from the Swiss and the U.K. government that I'd mentioned earlier on the liability of the balance sheet. And then to bring it all together, sort of our net cash actually then decreased by CHF 4.0 million, or CHF 4 million, which was again primarily impacted by this big payout to First Class & More of CHF 5.6 million. Obviously, if this would not have happened, we would have been -- or cash -- net cash would have changed by -- [ to plus CHF 1.6 million ] year-on-year. Good. That concludes the part on the consolidated financials. And of course, as I said, you'll find more details and more commentary on the -- in the annual report, which is available for download from our corporate website. Now to conclude, I would like to give you an outlook for the current year, so 2021 on Page 27. The market environment, to address that, like first of all. It will remain difficult for most of the first half of the year. Obviously, now we're already into March, and we've seen that governments have been extremely slow with sort of vaccination effort, and it all takes a bit longer than what we would have liked to see and what we would have hoped for. Hence, we got to be honest and say that our market environment is only going to improve once travel and social distancing restrictions are relaxed, and we believe that is tied to the vaccination effort. So it pretty much goes hand-in-hand. However, we hope that we will see these restrictions lifted or relaxed in the second half of the year, which will also help us to return to growth and when global travel activity will rebound, and social distancing rules are relaxed. And operationally, we will continue to invest in improving our business. In the meantime, we will continue to upgrade the ASMALLWORLD Collection by expanding the hotel offering and the functionality, as I've mentioned earlier. So we want to be well positioned when travel resumes. We also want to grow the collection with an affiliate program. We're in touch with different partners who could drive traffic towards the collection. So this is an ongoing process. For ASMALLWORLD social network, we want to go back and improve the functionality on the technical side. And one big thing that we have on our agenda for -- early in Q2 is the introduction of the posting functionality. So in short, there will be the ability for members to upload photos in a similar fashion as they know it from Instagram and Facebook. We will hope that will lead to more engagement and sort of basically a more interesting environment for users. And with that higher engagement, high reason to like spend time on ASMALLWORLD and to invite friends. We also will improve the Newsfeed to make that more interesting in the -- when users open it up, they will give them more content and new content every single time so that we increase the likelihood that they open the app. So this is very much the focus for -- it's already in-flight and will probably go live in Q2 this year, increasing engagement. And then for World's Finest Clubs, we already have started the efforts to improve or basically redesign the website, which we'll also introduce in Q2 this year. So this is a -- these are a few of the immediate focus areas for our businesses now in the early part of 2021. Obviously, once we see an increase in activity again for travel or social distancing restrictions lifted, we will introduce events again. We will invest in marketing again to grow or -- the demand for our services. But we believe for the time being, this is just money not well spent, and we would rather focus on cost right now and save our ammunition for the later part of the year. And then for the final slide in terms of this presentation, we will turn to Page 28, which offers the guidance for 2021. We are, let's say, cautiously optimistic for this year. We anticipate moderate growth, but primarily driven by recovery in the second half of the year. So in terms of revenue, what that means, we believe that we will have a growth rate somewhere between 4% and 8% year-on-year, sort of moving from CHF 12 million to CHF 12.5 million to CHF 13 million. So roughly to get on par again with 2019. That's sort of our current expectation. In terms of members, we still believe that we can grow the member base by about 5% to 10% this year. So that would lead us to a member base of 66,000 to 68,000 members. And for the EBITDA, we actually want to drive this one more strongly despite sort of maybe a slow uptick in revenue. We want to really focus on the bottom line as well this year. And we believe we actually we can get to somewhere between CHF 1.7 million to CHF 2.2 million, which would be an increase of 15% to 45%. I do understand that this is quite a big range, but it sort of depends on quite a few factors that can impact that. And we didn't want to provide a range that is too narrow. But basically, we'll continue with a focus on cost and a focus on profitability for the short term until we can really drive growth again. So this is basically our best guidance as of today for this year. And this concludes basically my part of the presentation. And I'd be happy now to move to the Q&A session and address any questions you may have. So I hand it back over to you, Katy.

[Operator Instructions] Our first question will come from Marie Gruebner with H&A Investment Banking.

I have 3 follow-up question, if you don't mind. I was wondering, first of all, if you could give us the number of members who are now ASMALLWORLD Prestige holders and what price they're paying annually. And then what growth rate are we expecting for those packages in terms of members this year, 2021? Is that still something very attractive for the subscriber base? The second question is if you can update us on the outstanding, say, earnout for the First Class & More owners. So what is due in 2021 and [ which timing ]. And then last but not least, I was surprised not to hear word at least on the Middle East luxury hospitality opportunity. So maybe you can touch base on that and see -- tell us what -- where you stand on this one.

Marie-Therese, well, great to have you with us and thank you for the question. Yes, of course. So I'll address them in your order, if that's okay. So going to the Prestige membership. So I mean, as always, we do not disclose like the member numbers for all the businesses separately for a few different reasons. But I can tell you that we're talking about, let's say, a few hundred people that have the Prestige membership. So it was in the very low hundreds in 2019. And now sort of we moved to the higher hundreds, if you want to put it like that, in 2020. The list price is EUR 5,200. Having said that, we have had several sales efforts at a lower price, which have sort of resulted in an average price that is quite a bit lower than that, right, if you sort of look at that without sort of being too precise to put it like that. We also had a few special sales offers, which were in that [ list part that I mentioned away ]. But excuse me for being myself. I hope that's okay. And then for the earnout on the FCAM, First Class & More side, yes, I can give you the overview. So like I said, we paid CHF 5.6 million now, which was sort of split into CHF 3.7 million for the cash that actually we had in the books with the acquisition that were basically just sitting there with us. That's sort of the founder now had asked to be paid out. You could argue that kind of was never really our money or our cash. And then we also paid CHF 1.9 million as part of the purchase price. So then in sum, so this basically was the CHF 5.6 million payout that we have seen now in 2020. Looking forward, we have open payments of EUR 5.2 million -- sorry, that's euros. So you have to add sort of like something like 8% on top for that for Swiss francs. But it's been due in euros at the time of when we need to pay it. For 2020, which will then be paid out in 2021, so this year, we will have to pay EUR 1.8 million, so the same number as last year. That will then probably CHF 1.9 million. And then there is a final payment for the year 2021, which will be due in 2022, which is EUR 3.4 million, which then will be probably something like CHF 3.6 million. And then we've actually -- we've paid everything that we still owed for the acquisition of First Class & More at that point. So that's scheduled...

The EUR 1.8 million then -- sorry, EUR 1.8 million in 2021 and EUR 3.4 million in 2022?

That is correct, yes. Okay. And then for your last question about the Middle East opportunity. Yes, that's right, and I apologize that I didn't put it into this presentation. The -- I think the reason why I didn't put it in is because we are currently still not allowing to give away the specifics of the project as we're -- as some of our larger partners still haven't sort of finalized a few things around the communication that they want to go ahead with. But the project is pretty much still on track, I mean, as we -- as per our press release, which I think was in -- we put out in December last year. So it's -- we -- maybe to give you a bit more color around that part of the business. So this is part of the smaller hospitality, right, where we also have North Island [ hospitality ] -- where we manage the hotel. And we've been sort of a consultant to a few hospitality projects in the meantime. So it hasn't been a large part of our business so far but it's been -- it could be a larger part going forward. So specifically for this project. So if it's in the Middle East where a project is being developed, where most likely it will be built this year over the next 4 years, with sort of a market value of roughly USD 600 million. So this comprises 16 villas and about 250 units. It will also have a wellness resort and so on. And it will be branded apartments with a very sort of well-known international partner, which sort of gives some security that we will definitely have demand for the project. And the role of ASMALLWORLD in this project is that we are basically the sales coordinator for this project. So we play something of a coordinating role between sort of developer, the marketing agency and the real estate brokerage companies. And in that sense, our compensation there is tied to the sales of this project, which sort of could ultimately probably yield something like USD 10 million over the next, I would say, 4 years. In that sense, it could be quite relevant for us in terms of size. Having said that, it's heavily dependent on timing of the sales and when we will start sales effort and so on. As of now, it looks like we will start the sales effort sort of in the second half of this year. And then sort of, as I said, over the next sort of 3.5, 4 years, the units will be sold, and we would -- we should see an income from this project. However, as there are so many -- still a lot of uncertainties around the exact timing and when we go live, and as I said, our partners didn't fully want to announce their commitment to the project as of now, I have sort of not put too much emphasis on it for now. I will, obviously, make sure that we put out a press release for the project as soon as we have the go from our partners and inform everyone about the future development. But what might be relevant for you is that we have currently not factored in any sort of major sort of sales from this project for 2021 in that sense. So it's not likely for our forecast be banked on sort of a massive sort of revenue coming from this project. So we treat it a bit more as an upside at this point. This is how we look at it right now. That'd be important for you to know.

All right. That's one of my question, if it was in the guidance or not. But that's clear.

Yes. Okay. Does that cover the 3 questions that you had?

Yes.