Flight Centre Travel Group Limited (FLT) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to our 25th Annual General Meeting. My name is Gary Smith. And as Flight Centre Travel Group Limited Board Chairman, I will chair this meeting. As we have the necessary quorum, I declare the meeting open. Today's meeting is being held online via the Lumi platform. This allows shareholders, proxies and guests to attend the meeting virtually. All attendees can watch a live webcast of the meeting. In addition, shareholders and proxies have the ability to ask questions and submit votes. Questions can be submitted at any time. [Operator Instructions] Please note that while you can submit questions from now on, I will not address them until the relevant time in the meeting. Please also note that your questions may be moderated or if we receive multiple questions on one topic, amalgamated. Finally, due to time constraints, we may run out of time to answer all your questions. If this happens, we will answer them in due course via an e-mail or posting responses onto our website. Voting today will be conducted by way of a poll on all items of business. In order to provide you with enough time to vote, I'll shortly open voting for all resolutions. At that time, if you're eligible to vote at this meeting, a new polling icon will appear. Selecting this icon will bring up a list of resolutions and present you with voting options. [Operator Instructions] You do, however, have the ability to change your vote up until the time I declare voting closed. I now declare voting open on all items of business. The polling icon will soon appear. Please submit your votes at any time. I will give you a warning before I move to close the voting. [Voting]

I would now like to introduce our Chief Financial Officer, Adam Campbell, who is with me in Brisbane today. Directors Graham "Skroo" Turner and Robert Baker are with us in our Brisbane office today, and we have John Eales and Colette Garnsey, directors, in our Sydney office. With us in Brisbane, we have David Smith, our company Secretary. We're also joined today by various senior executives. They include Chris Galanty, CEO of our Global Corporate Travel Operations from the U.K.; Charlene Leiss, our President in the Americas from the U.S.A.; James Kavanagh, our Managing Director in Australia; Steve Norris, our Managing Director in EMEA, that's Europe, Middle East and Africa, also from the U.K.; and Haydn Long, Head of Investor Relations. We also have Mel Waters-Ryan, our CEO of Global Leisure, who's on Norfolk Island, having a well-deserved rest, and thanks for dialing in, Mel. Finally, our auditor, EY, is represented today by our audit partner, Ric Roach. Proxies have been received for this meeting. Proxy details will be advised before each resolution. The notice of meeting has been circulated to all shareholders registered as at 1 October 2020. I will take that notice of to mean as read. The minutes of the previous Annual General Meeting, which was held on November 7, 2019, were approved by the Board and signed by the Chair of that general meeting. Minutes are available for inspection at the company's registered address. We now move to the company's reports and accounts. The financial report, directors' report and the auditor's report have been forwarded to shareholders in the annual report and are tabled at this meeting. I'll now move to the Chairman's address. Unquestionably, the year to 30 June 2020 has been the most eventful and challenging trading period we have encountered, with COVID-19 having tragic and wide-ranging impacts on the travel, aviation and tourism sectors and, of course, on society as a whole. While we have understood and supported initiatives that have prioritized public health and safety, we've also been deeply affected by government policies globally that have been implemented to contain the virus' spread, and we publicly question the need for such heavy and prolonged lockdowns in some locations, particularly in Australia. After these restrictions were applied globally from March, we incurred significant losses through the end of financial year 2020, given that discretionary travel was effectively grounded. This followed a reasonable first 8 months of the year, which saw us deliver an underlying profit before tax in the order of $150 million for the period. Some incredibly tough decisions have been made over the past 8 months. The virus's wide-ranging impacts have been felt by all of our stakeholder groups, particularly our customers whose travel plans have been severely disrupted. Our people, about 2/3 of our global workforce, which was numbered at about 21,000 at the start of the pandemic, about 2/3 have lost their jobs either permanently or temporarily through no fault of their own, and as a result of actions taken by governments throughout the world to slow the virus's spread. Our suppliers who have been forced to hibernate or downsize their business to survive, unfortunately and inevitably, not all will trade through this pandemic. And finally, of course, you, our shareholders, who have seen lower returns by way of diminution in value of your investment in our company and the cessation of dividends on our full year 2020. I'd like to take this opportunity to thank all stakeholders for their patience and understanding during this extraordinary period. Today, I'd like to make special mention of our front-end salespeople who worked tirelessly under very trying conditions to help customers rearrange travel plans or recoup money that have been paid to suppliers throughout the world to facilitate well in excess of $1 billion in refunds. I'd also like to make special mention of our leaders and their teams globally who work together to help us overcome the immediate challenges we've faced and which help us chart a path for long-term recovery. Our salespeople have also been instrumental in repatriating thousands of travelers who have been stranded overseas, in some cases, for many months. As borders started to close, the great work of our people at the Sydney Airport Flight Centre shop, the international airport that is, they were helping, obviously, as travelers leave Australia and was actually covered in the trade publication KARRYON, as you can see in this slide, which shows customers queuing outside the shop, while our people found and secured last-minute flights home for them. As the crisis escalated, we took tough, decisive and proactive steps as part of the first phase of our response, which centered on firstly lowering monthly costs from the pre-COVID level of circa $230 million to a level that would deliver an operating cash outflow of $65 million per month; and secondly, to extend our liquidity runway. We also accessed various government support programs to secure additional funding and to preserve more jobs for the future, which is something I will elaborate on shortly. We achieved our short-term objectives by our targeted 31 July date and now have a solid financial platform to help us capitalize on the inevitable rebound once restrictions are lifted. There is limited visibility around the timeframes for recovery globally, and we will maintain our ongoing focus on costs, cash and, of course, revenue. While government-imposed travel restrictions have had a devastating impact on our sector, we would like to acknowledge some of the support programs that have been introduced by governments globally to help businesses overcome the extraordinary challenges they have encountered. Programs like JobKeeper in Australia and similar schemes in other countries have provided much needed financial support for people who have been stood down, in addition to helping companies preserve more roles. In the U.K. and France, we've also secured access to government-backed loans. In various countries, including Australia and Canada, support programs now extends through to the 2021 calendar year, and it is likely that further extensions will be required to support struggling travel, aviation and tourism sector businesses and, of course, to save jobs. I'd now like to talk to our financial results. Our headline financial year 2020 results have been summarized on this slide. Losses were significant and were incurred entirely during March to June period as we worked to lower costs to the targeted hibernation level in what rapidly became a very low-revenue environment. After being up 11.2% at the half year, total transaction value finished 35.5% lower than financial year '20 at $15.3 billion, with the heavy restrictions that were applied preventing new bookings from being made and leading to most forward bookings being canceled. Our trading patterns for the year are illustrated on this slide. While we had a healthy balance sheet pre-COVID, we moved quickly as the crisis escalated to solidify our liquidity position. In early April, we raised $900 million via a $700 million capital raising and a $200 million debt facility increase. I'd like to take this opportunity to again thank our retail and institutional shareholders for their strong support during the capital raising and also our lenders for their tangible show of support in providing additional debt facilities and covenant relief. At the same time, as we raised capital, we outlined comprehensive cost-reduction and cash preservation strategies geared towards removing $1.9 billion in annualized costs and achieving a $65 million net operating cash outflow by 31 July 2020. We achieved both of these targets with our July operating cash outflow being $43 million, significantly less than the $65 million we had allowed for. In July 2020, we also completed a $62 million sale of our Melbourne head office property and secured a GBP 65 million government-backed loan in the U.K. to further extend our cash and liquidity runway. This meant we had a $1.9 billion cash balance at 31 July 2020, including circa $1.1 billion in liquidity, pre-current bank covenants. Our cost-reduction and cash-preservation strategies have been outlined on this slide and have been covered in detail in our annual report and in our FY '20 full year results announcement. I'd like to move to 2020 operational highlights, and there were some. While 2020 will be remembered as an incredibly challenging year, it is important to note some group positive pre-pandemic achievements, including: solid first half sales growth with TTV up 11.2% globally during the period and continuing at record levels through to the end of February; corporate market share growth, first half corporate TTV increased 17% globally, taking the compound annual growth rate over the past decade to 16.1%. The North Americas business was again a star performer, recording 24% first half growth in TTV. Further progress in leisure e-commerce with FLT's online businesses generating almost $1.2 billion in TTV during financial year 2020 after a very strong start to the year. And several important acquisitions and investments, including Ignite, which is now 100% owned; and tech businesses, TPConnects and WhereTo. Our investment in TPConnects is part of our proactive response to the evolution of traditional airline distribution model and the emergence of new distribution capability or NDC. Through this investment, our relationship with the GDSs and our current direct involvement in various airlines NDC programs, we're well placed to access full content for our leisure and corporate customers in this evolving landscape and to deliver next-generation solutions. WhereTo will become a key part of our corporate product suite and will give us full control of our platform and our customers' booking experience. A number of our businesses performed very strongly throughout the year. For example, our joint venture bikes business, Pedal Group, almost quadrupled its profit in generating a $17.8 million profit before tax. In addition to the business expanding leisure and wholesale presence in Australia, it now operates in New Zealand and is on track for further profit growth this year. Our airline charter business, AVMIN, also performed strongly, recording 26% revenue growth during financial year '20. Growth was driven by sports charters, particularly in Australia; the mining sector; and increased VIP travel and movie production. As illustrated on this slide, we also implemented a new global leadership structure with Chris Galanty and Melanie Waters-Ryan, appointed Chief Executive Officers of our Global Corporate and Global Leisure businesses, respectively. As a result, we now take a more focused view of our businesses across both of these large and important travel segments. 3 new regional lending directors were also appointed. And all 3 are with us today on this meeting: James Kavanagh in Australia, Charlene Leiss in the Americas; and Steve Norris in Europe, the Middle East and Africa, or EMEA, and this has helped drive rapid change throughout the business as the crisis escalated. The global corporate business delivered a $74 million underlying profit before tax during financial year 2020 and secured a record pipeline of new accounts during financial year '20 and into financial year '21. This highlights the business' strength and resilience as well as a significant future growth potential in a global market that was estimated at USD 1.5 trillion per year pre COVID. The FCM business alone won new accounts with annual spend in the order of USD 1.3 billion during financial year 2020, including flagship, enterprise level and government accounts. This was another record and strengthens an already diverse global customer base, which is not reliant on any one business sector and includes a solid base of essential services clients that are generally exempt from restrictions and continue to trade albeit at reduced levels. With these wins, we have a very solid platform for further organic market share growth, which has underpinned the corporate business's global success to date. The global leisure business, which was in the early stages of a 3-year transformation program when the crisis unfolded, was severely impacted by the tighter restrictions that were placed on discretionary or nonessential travel and incurred significant losses during financial year 2020 after a profitable start to the year. Our leisure transformation programs have now been accelerated, as Mel and her team globally work to rejuvenate the Flight Centre brand and expand our presence in new and emerging channels and sectors. It is very early days in this transformation process, but we feel we're making solid progress in this very subdued trading climate. So in conclusion, while trading continues -- conditions remain uncertain, we are well equipped to meet the challenges we expect to face in the near term and to cross in the longer term once things return to some semblance of normality. We now have a significantly lower global cost base and an extended liquidity runway, which should allow us to overcome a deep and prolonged downturn. This strength will also allow us to capitalize on opportunities that will inevitably arise in the future. Importantly, we also have maintained a network of brands and models and businesses that can provide a strong platform for future growth. Thank you once again for your support as shareholders, and hopefully, we can see many of you in person again at next year's Annual General Meeting. I'd now like to invite Skroo to address the meeting.

Yes. Thank you, Gary. Very well said. Good morning, everyone, and today, I'm going to focus on financial year '21. what we're seeing so far, what we expect to see over the remaining of the year based on our expectation that travel restrictions will gradually ease as the global community learns to live with this virus. While it's no means guaranteed, the good news is that where domestic and international border restrictions have been eased or are being eased, we're generally seeing a significant uplift in demand fairly quickly, which is something you'll hear a bit more about shortly. Another positive note, you'll also hear about some of our businesses, Gary mentioned a few, but including China returning to modest profitability in October. Our COVID-19 response to date is focused on factors within our control, specifically preserving as much cash as we can, cutting costs dramatically, while we still continue to invest in critical functions and what we see as future growth drivers. We also find it's very important to maintain our nonfinancial assets and making sure we have liquidity to last for some years with significantly lower-than-normal revenue. We feel this longer-term approach to liquidity is prudent, given the ongoing uncertainty around travel restrictions and possible actions that governments may take in the future when subsequent outbreaks occur ahead of any effective vaccine as they inevitably will. As illustrated on this slide, we've had about $1 billion in liquidity at the end of the first quarter. This takes into account -- the actual cash balance was about $1.7 billion. There was $102 million in working capital adjustments and $560 million in client creditors. We're continuing to explore our options to extend and increase flexibility in regards to liquidity and in regular dialogue with our lenders who remain positive on our long-term, strategic positioning, and they continue to be very supportive. We're also working to reduce cash outflows and are having some early success on this. As you can see on the next slide, our outflow in September was down to $40 million from $43 million in July. And if you bear in mind, pre COVID, our monthly expenses were in the range of AUD 230 million a month. This is -- this outflow includes government subsidies that have been made available globally. Last month, we announced additional changes, which should lead to further improvement in our cash-out. These changes, which have included some additional shop closures, will deliver monthly savings of about $9 million and $4 million or $5 million a month will be reinvested in initiatives designed to enhance our position as the market returns. Between $1 million and $2 million a month will be used to offset property expenses that we will incur as rent-free periods actually expire. In addition to the $9 million monthly saving, we expect monthly CapEx to reduce from $4 million to $2 million as key projects are deployed during the coming months. Together, these cost-saving initiatives and reinvestment plans should therefore reduce our monthly cash burn by about $4 million, as you can see on the bottom of this slide. Above that, we have provided a breakdown of one-off COVID-related costs we've incurred to date. This is about $165 million in one-off costs related to the initial plan, which was unveiled in April and $60 million related to the recent changes. In our response, we worked to ensure that we have not jeopardized either our ability to recover or our ability to capitalize on the inevitable rebound in demand in both leisure and corporate travel in the future. We have continued to invest in key corporate and leisure systems and projects and have been careful to ensure that our people remain very accessible to their customers. So even after recent leisure network changes in Australia, 95% of our 1.4 million regular customers during the past 2 years will live within 5 kilometers of a shop that's currently open. In corporate travel, we've maintained a monthly cost base in the order of about $25 million, which has allowed us to continue to invest in the key growth drivers that I'll outline shortly. So in our annual results announcement a couple of months ago, we spoke of seeing green shoots in revenue in June-July after the almost complete shutdown of travel in April-May. This trend continued through the financial year '21 first quarter with sales generally increasing week-on-week as restrictions gradually eased, and demand for travel gradually started to recover. Revenue for September was $25 million, which is about 12% of the normal level or $38 million with government subsidies, including JobKeeper included. On this slide, you can see the recovery trajectory that our leisure and corporate businesses throughout the world achieved in September, compared to the prior period in financial year 2020. So recovery in some locations that would normally be material contributors to group earnings, especially Australia, the U.K. and U.S., have been hampered by the ongoing curbs on travel, of course. The corporate travel business overall is tracking at 18% of normal revenue for the month with the global leisure business being at 8%. Several businesses were tracking above the 20% in September, which meant that we're getting close to breakeven, giving our fixed cost base a decrease to about 30% of its prior year level. Preliminary figures in October are now available and indicate we are again profitable in both China and the UAE as well as Corporate Traveller in South Africa. South Africa is a pretty interesting study. After being in full lockdown for an extended period, the business overall is now close to breakeven just 11 weeks after domestic travel restrictions were lifted in mid-August. This highlights the positive impacts more openings can have and points to the possibility of fairly rapid material rebound in other restricted locations like Australia when governments accept we need to live with this virus and allow travelers to release their pent-up demand for holidays as well as business travel, of course. The recovery in China, which has been driven by domestic travel, is another very positive sign, given it was the first business to be impacted by this pandemic. Elsewhere in the world, our corporate business in France has, to date, been a strong performer, although maybe its short-term recovery will be impacted by the new restrictions that are currently being applied in parts of Europe and the U.K. However, we're seeing relaxations in some locations, including Australia with West Australia, Tasmania and Queensland all recently loosening restrictions. In addition, the New South Wales government in Australia announced plans to reopen the border with Victoria on November 23, which will be significant, given that Sydney-Melbourne is only one of the busiest flight paths in the world and a key corporate travel route. I think we -- normally, 15% of our business travel in Australia is normally on this route. So that will give us a significant shift in that as soon as that opens on the 23rd. Some heavily affected travel sectors are also starting to show modest signs of recovery. For example, the America's Center for Disease Control and Prevention, that's called the CDC, last week moved to relax no sail restrictions that have applied to cruise lines operating in the U.S. since March. This relaxation will in time, effectively allow cruise companies that meet these safety protocols to resume passenger services. A good example of this, of course, is the MSC Line in the Mediterranean. It's a 6,000-birth ship that's been now sailing successfully for the last 6 or 8 weeks without any major problems. So cruises should be back on the go as we speak. Prior to yesterday's election, broader customer sentiment and activity in the U.S. also seems to be improving with the TSA, which is the Transportation Security Administration, screening more than the 1 million passengers on October 19, the biggest single day since March, which is a positive sign. So going on to guidance and expectations. The lack of visibility around government strategies and time frames for restrictions to be lifted means we're not in a great position right now to provide financial year 2021 guidance at this stage. Given that heavier restrictions apply to international travel right now, short-term revenue generation will be weighted towards domestic as well as regional travel, which, of course, is a key driver for our corporate businesses globally. and for some parts of our leisure business like flightcentre.com.au. Prior to the pandemic, domestic and regional travel account for the majority of corporate travel -- TTV in Australia, United States, Canada, Asia, India, New Zealand, Europe, South Africa and the UAE, plus about 25% to 30% of TTV -- of leisure TTV globally. Given the global corporate business's heavy domestic weighting, low cost base, strong sales trajectory and account pipeline, we currently expect it to return to profit on a month-to-month basis before the leisure business and possibly late in financial year 2021, which is somewhere between April and June next year. The global leisure business, which has a higher cost base and a heavier international travel weighting, is expected to follow in financial year 2022, probably in the -- late in the first half, although recovery in both sectors, of course, will depend a lot on various government restrictions. While demand for international travel is unlikely to fully rebound for some years, we see opportunities this year during the recovery phase. So as domestic borders reopen in a more meaningful way in Australia and elsewhere, as bilateral agreements are established between countries, which will be the Trans-Tasman, obviously, parts of Asia, in particular, Japan, Taiwan, South Korea, Singapore, these kinds of agreements are also being proposed for key international routes like New York-London. New York-London-JFK to Heathrow is looking at starting again in late November at this stage, although that could change. As businesses and governments work together to develop reopening plans that address any ongoing health concerns, incorporate game-changing developments, and there are things like rapid antigen testing, which is being deployed in quite a few countries and on a lot of these cruise ships and airlines, and that does make this sort of travel very safe as well as obviously getting some sort of effective vaccine, which is probably a few months away at the moment. But generally, most people feel we will have a vaccine. The only thing that we don't know yet is how effective it's going to be. In Australia, we're generally pleased with recent developments, including, yesterday New South Wales-Victoria announcements and particularly the national Cabinet's commitment to reopen the borders with the possible exception of WA, hopefully, by the 1st of December but certainly by Christmas. We do, however, question the need to delay reopenings, given the very low level of community transmission within Australia and the devastating impacts closures are having on society, and this includes mental and physical health as well as the broader economy. There also appears to be a decision-making paralysis on the borders in Queensland, with state government only making decisions once a month or every 30 days. And I imagine a business or any other fields, including health, that you only make decisions on crucial and urgent issues like borders once a month. You will be fired within 5 minutes. I'm sitting next to our Chairman, so I'm thinking he'd agree. The Queensland government paralysis on making any sort of decision is doing untold damage in many aspects of Queensland economy. It's costing hundreds of thousands of jobs. Many of these will be permanent losses. They need to get their act together and update decisions at least weekly, but really it should be daily, I believe. However, despite Queensland and WA's recalcitrance, there is significant pent-up demand for travel globally. As you can see on this slide, recent surveys of our Australian leisure customers show that almost 60% are considering booking an international holiday in the 12 months after restrictions are lifted. Almost 80% are considering booking an interstate or interstate holiday -- intrastate holiday and almost 20% are considering booking a domestic or international cruise. And in fact, our -- MyHolidays, my cruising business is back pretty much to normal, particularly on the '22/'23 cruise season. By contrast, a very minor 3.5% say they will not be traveling. As you can see in this next slide, almost half of customers who plan to travel domestically favor Queensland holiday, which again highlights the widespread benefits, safe and sensible travel borders reopenings will deliver. And while Queensland needs to get rid of this decision paralysis that they have at the moment. While the recovery timeframes are clear, I'm optimistic that travel's medium-term outlook is bright, particularly when there's an effective vaccine, even if it's only a 50% to 70% effective, which will probably come later on this calendar year but probably early in 2021. On the corporate side, as you can see on this next slide, our focus is on growing to win, organically increasing our market share by retaining customers and winning new accounts within our 2 major global brands, FCM and Corporate Traveller. We are successfully doing this with FCM alone, securing new accounts with annualized pre-COVID travel spends of more than $500 million during the first 4 months of this financial year. To date, 75% of this new business has been won in the Americas, Europe and the U.K., where we see a huge future potential for our corporate business. This success in winning accounts globally across both key brands and throughout the economic cycle reflects our compelling customer offering, which is based on, firstly, our customer-centric DNA, which provides customers with the right level of flexibility and agility to support their businesses; our innovative and quite disruptive technology; our state of the art data and reporting, powering new COVID dashboards and safety products that are obviously becoming even more critical from a duty of care perspective, and our people and our small team-based service model. Other important factors include our financial stability at a time when some customers are concerned about their current travel manager's ability to survive and our Truly Global presence. This is built on company-owned businesses in 23 countries, plus a partner network in 70 to 80 other countries. As you can see here on this next slide, we have company-owned businesses in 10 of the world's top 16 business travel markets. And throughout this pandemic, we have continued to invest in critical activity, including product research and development, given that many of our customers have continued to travel, and many other companies have engaged with us to reassess their programs or options. We've also continued to invest in implementation at a time when some of our competitors have pulled back or gone into hibernation to save money. And also in account management to really understand how our customers' needs hierarchies have changed during this pandemic. Recently, we acquired the WhereTo platform to enhance our already strong tech suite by delivering game-changing technology, particularly for the SME-focused Corporate Traveller brand. We believe the SME platform we are launching, which combines our proprietary technology with WhereTo, will give our customers the industry's best digital platform experience, and we will experience it with our people offering, which is what customers love in this market segment. Our investments in corporate during this period are highlighted in the next slide. I think it's actually leisure. In leisure, we've retained a highly accessible network with capacity to grow as travel recovers with the right brands and models to gain market share even if it ends up being a smaller market initially. As you have heard and as illustrated in this next slide, we fast-tracked our leisure transformation efforts and moved from 3 -- Speed 1 to Speed 2. The overarching priorities are: one, rejuvenating and modernizing price Flight Centre brand and growing online sales in that brand in particular; further e-commerce growth through our Jetmax and StudentUniverse online brands; developing a leading and tailored offering for independent travel entrepreneurs. We already are experiencing strong inquiry from agents who are interested in becoming part of these independent networks, which Flight Centre Travel Group run. Also growth in the premium luxury sector through travel associates in Australia and Laurier Du Vallon or LDV in Canada. As you can see in this slide, Flight Centre brand is central to our plans, and we certainly will have a smaller, but much stronger and more productive shop footprint and overall offering that appeals to a younger audience as well as to our traditional older families and Baby Boomers. From a product perspective, we are actively promoting a suite of irresistible deals while continuing to offer value airfares, just as we've done for almost 40 years. Alongside our shops, we've started to scale up our call center model, using the successful template developed by the Ignite business or the MyHoliday business. We took 100% ownership of this during the last calendar year. And as I think I mentioned before, Ignite, or MyHolidays, is close to breakeven now after pivoting during a pandemic to focus on closer-to-home, domestic deals, combination deals and, as I mentioned before, the 2022 and 2023 cruise product, which has been remarkably successful. We also continue to invest in the online channel and are currently expanding our flightcentre.com offering beyond flights to packages, ancillaries and membership, as you can see on this slide. Before the borders were shut, flightcentre.com.au was growing strongly, TTV was increasing at greater than 40%. When borders momentarily reopened in Australia early '20 -- early this financial year, we saw immediate recovery in this brand, which is heavily weighted towards domestic airfares, and its sales should continue to grow as a percentage of our overall volume. Moving on to our next slide. Our other digital players, Jetmax, StudentUniverse were also doing well pre COVID and helped the company record the almost $1.2 billion in online leisure TTV during financial year 2020. Our U.S.-based StudentUniverse.com is recovering. And with STA, as you're probably aware, encountering financial difficulty, it is poised to become one of major, if not the major, global student travel brand. I mentioned earlier our B2B, or business-to-business, and premium leisure offerings, and we've included a couple of slides dedicated to them in this presentation. I won't talk to them in detail today, but we'll leave them on screen for the remainder of this address. In addition to our leisure brands, we also operate a small network of at-destination businesses as well as our global product business, which now services a growing network of external agencies as well as, obviously, servicing our internal distribution system. The pandemic has reduced our near-term aspirations to expand in touring at this stage in hotels, destination management, but these businesses' external sales which are growing all the time will certainly aid our recovery there. During hibernation, we've fast-tracked some of the key leisure technical and digital transformation projects. Just this week, we deployed our new Helio product platform in the U.K. and South Africa, and this is about 9 months ahead of schedule and ahead of full global rollout over the next few months, and this will be a game changer. Our consultants globally will use Helio to search, book, quote, deposit and pay for leisure products, including airfares, accommodation, car hire, tours and transfers, and it will also be used to sell our expertly produced irresistible deals online. And as I said, this will make a big difference to our leisure offering and productivity. The new platform will replace 6 legacy systems and will link to our Trips app and our finance systems, thereby enhancing consultant productivity and certainly lowering overall costs. Talking about supplier relations. Throughout this crisis, we have maintained strong supplier relationships globally and engaged regularly with our key partners to understand their needs and outline our recovery plans and strategies. Certainly, given the current uncertainty, our contracts are generally being extended or renewed with similar outcomes as previously. We have recently agreed new contracts with a significant number of airlines, and it includes Virgin Australia. We've extended with Qantas our previous contract, with a view of agreeing a longer-term deal in the next few weeks. During the recovery phase, we look forward to working closely with our partners, who value our diverse and widespread distribution network. And of course, this, of course, spans the globe in both the leisure and the corporate sectors, and the key segments within both of these sectors as well. Now more than ever, suppliers, we believe, will need volume, and we will have the capacity distribution marketing expert to deliver that volume. We've also engaged regularly with suppliers to enhance the refund process, given that our customers have, in some cases, been forced to wait more than 6 months for their funds to be returned to us from airlines, tour operators and other companies and suppliers. Just as an example, in Australia, we have now requested more than 100,000 customer refunds just from Qantas alone, which is our largest and most important airline partner globally. And while we're still encountering some delays, some ongoing delays in refunds, the situation is certainly improving. So in conclusion, pre COVID, we were one of the largest, most diverse travel companies in the world. We are determined to cement and enhance this position, and we believe we're well placed to do this over the next couple of years. Certainly, as travel comes back, which is already slowly starting to do, and mainly, as governments throughout the world ease the current restrictions that have been adding such a devastating impacts on businesses and on society in general. The key factor to this, as you have seen in certain countries, particularly in Asia, as the world learns to live with this virus, it's going to be around for a while even with an effective vaccine. While we have been impacted in the short term, we've maintained our strong foundations for the future, including our nonfinancial assets and, of course, our brand and geographic diversity. At the same time, we've substantially lowered costs to a sustainable level and fast tracked key projects and initiatives like the leisure transformation that I mentioned before in the current depressed trading environment. We also have a dynamic management team with vast experience against all -- and they've been there through all economic cycles, overseeing our strategic response. I think you saw the 7 people in my team, an average -- average age working for Flight Centre is something like 20 years. We see financial year 2021 as a year when recovery really starts in earnest, given our expectations that government restrictions generally are going to start coming off, as you can see in Australia over the next month or so. And as we learn to live with this virus with the probability of a vaccine coming through as well. I'll now hand over to Gary. Thank you, Gary.

Thanks, Skroo. That was quite a marathon. Well done. And look, I'd just like to say the Board, 100%, is united behind the question on borders opening. Personally, I think Gladys Berejiklian has been a rock star Premier. She's focused on keeping her people safe, of course, but she's also focused on opening the country and getting the economy moving. And that's what we need to see more of from other states. So to the formal business of the meeting The first item on the agenda is the reelection of John Eales as a director. If you have any questions on this item, please ask them now. In accordance with the company's constitution, directors may not hold office past the third Annual General Meeting following their appointment, excluding the Managing Director. At least one director retires each year and offers him or herself for reelection. Accordingly, John retired and offers himself for reelection today. The number of proxies received for this resolution to reelect John are now shown on the screen. We will now address questions that have been submitted in relation to this resolution. If you haven't done so already, please cast your vote on this resolution now. [Voting]

No questions, Gary, have come through on that one.

There are no questions on that resolution. I'll move on to the second resolution, which is the adoption of the remuneration report. The second item of business is that adoption of the directors' remuneration report as presented in the annual report. If you have any questions on this item, please ask them now. Just a reminder that the key management personnel listed in the annual report and their closely related parties are not permitted to vote on this resolution. The number of proxies received for the resolution to adopt the remuneration report are on the screen now. We will now address questions that have been submitted in relation to this resolution. If you haven't done so already, please cast your vote on this resolution now. [Voting]

No questions, Gary, on the remuneration report at this stage.

Thank you. The third item of business today is the approval to refresh placement capacity. If you have any questions on this item, please ask them now. Approval is sought for the issue of 23,911,438 fully paid ordinary shares pursuant to the institutional placement announced by the company to the Australian Stock Exchange on the 6th of April 2020 that they be approved for the purposes of ASX listing Rule 7.4 and for all other purposes. The number of proxies received for this resolution to refresh placement capacity are on the screen now. We will now address questions that have been submitted in relation to this resolution.

No questions, Gary, on this one at this stage either.

Thank you. If you haven't done so already, please cast your vote on this resolution. [Voting]

We will now move to address questions and comments submitted on the annual financial report, the directors' report, the auditor's report or the company's management. As mentioned earlier, Ric Roche from EY is available to answer questions about the audit's conduct, the audit report's preparation and content, the accounting policies adopted by the company in relation to the financial statement's preparation and the auditor's independence in relation to the audit's conduct. So I'll open up for questions.

We have had a few questions for this part of the AGM. One of the ones that's come through in advance relates to the corporate business and how it's managing to win such a large amount of accounts in this sort of trading climate.

I'd like to pass that to Chris Galanty. He's locked down in London. It's probably getting a bit late at night, so this will wake him up. And Chris, could you respond, please?

Yes. Sure, Gary. I am [ still awake ]. Yes, look, it's a great question. I think as Skroo touched on earlier that we have had a great strength in indiscernible] and importantly retaining customers in corporate. It has been the key to our successful growth in recent years, and it continues to be the key. And unlike some of our competitors, we grow by organic growth, not just by buying businesses and rolling them up together. And by organic growth, what we mean is that we win new customers one at a time. And we address the market with 2 brands, as been mentioned, FCM, a global large market brand, which wins enterprise and large global and regional customers around the world; and Corporate Traveller, which is very successful in start-up and medium enterprise space. And the reason we have these 2 brands is the reason we win. They're both very customer centric. We find, in a corporate market, the large customers and start-up to mid enterprise customers have very different needs, hierarchy of needs. And our 2 brands have dedicated management teams globally. They have dedicated sales and marketing resources. They have dedicated research and development. They have dedicated and market-leading products and technology solutions. And each brand has those solutions aimed at those customer types. And I think in FCM, we continue to be, I think, the fastest organic-growing large market TMC. And we're winning in all regions. We're winning in different sectors. And the feedback from customers who are implementing at the moment is they appreciate our flexibility. They like the fact that we give them a lot of choice in their solution, and yet we can provide a truly global, consistent experience. And that's the key message we keep hearing. Just to put some flavor it, we are currently, despite COVID, having the busiest implementation that we've ever had as a corporate business. So we're implementing more large market customers today than we've ever done before. And I think when we're talking about large market customers, these customers typically sign a 3- or 5-year contract, although they're not trading particularly high in 2020, when we're implementing it for 3 to 5 years. So that's great news. And also with SME, I think we're very excited launching technology across the globe in Corporate Traveller in 2021. And I think we're very confident that's actually going to increase our winning capability. So look, it really is about customer centricity and having the right technology and solutions for the marketplace.

Thank you, Chris. Next question.

The next couple of questions are from Kelly Buchanan from the Australian Shareholders' Association. The first one makes me smile a little bit. "What can the company do to encourage Australian state and federal authorities to find safe ways to facilitate more domestic and international travel?"

I think I might pass that one to Skroo to answer.

Yes. That's another great question. And obviously, we need the borders open first or there's general agreement from the health authorities on what is safe domestically. The international one is a little bit more complicated. I mentioned that cruise lines have been operating in the MSC, in particular, through the Mediterranean over the last couple of months successfully. That's a 6,000-berth ship that they're running there, and they've had no major COVID issues. And they do this by a protocol of testing -- rapid testing, rapid antigen testing. Every time they have a shore excursion, they get tested on the way back. If there's a positive antigen test, and there are sometimes, they then have a PCR test, which is considered more accurate. So that's sort of their problem, cruising is safe now if they stick to the protocols. And we're currently going to the Australian and New Zealand governments as well to extend -- to see if we can get the cruising bans lifted here, which I think it has been for the heritage cruising in New Zealand already. You will have also seen that plane travel seems to be exceptionally safe in terms of transmission, and you will have seen the IATA figures that said out of the travel over the last -- air travel over the last 8 months, you have about a 1 in 27 million chance of catching COVID on a plane because of the ventilation system mainly. Now that might be -- they might have missed some of those cases, so it might not be exact. That might only be 1 in 10 million chance. But to put it into perspective, in the States, your chances of getting struck by lightning in a 12-month period is 1 in 500,000. So it's much safer to be on a plane than to be in America just because of lightning. But not only that, we are working as a group here in Australia with, for example, Alan Joyce in Qantas, [ Jeff Colbert ] in representing the airports as well as the other airport leaders and the other travel companies to try to make sure that we can satisfy any of the government regulation through different protocols. And I don't think this is going to be an issue. I think we can have safe domestic travel. All the states have to do is make sure that they can test, trace and isolate efficiently, and we won't have any issues here at all. Obviously, that capability hasn't been very evident in North America yet, nor U.K. Europe. But it is one thing that we're not bad at in Australia, and there's no reason why domestic and Trans-Tasman and certain bilateral international travel shouldn't be happening.

Thanks, Skroo. The next question.

The second part of that question from the Shareholders' Association relates to Board competition -- composition, sorry noting that the company has a small Board of only 5 members composed of 80% males, what consideration has been given to enlarging the Board and creating a better agenda balance?

Thank you, Kelly, for your question. And we did meet with Kelly recently to discuss the year that we've had. Kelly, you may recall last year, at the Annual General Meeting, I commented that in 2020, we did intend to look at expanding the Board and increasing the number of females on the Board to achieve that 30% target that's been put out there. We had just commenced that process early in calendar year 2020 when COVID hit, and we decided that it had to take a back seat while we dealt with, as you can appreciate, more pressing matters. I would like to think that in 2021 calendar year that, that will be back on the agenda again for us to deal with. I would say what we are seeing within the company and certainly in senior management ranks is significant increases in gender diversity amongst our senior ranks. And I'd just like to highlight Charlene Leiss, I mentioned, is with us on the call today, she's President of the Americas. She was appointed into that role when Dean Smith retired earlier this year; Mel Waters-Ryan, of course, our CFO of Global Leisure; and Kelly Spencer, our Head of our Flight Centre brand in Australia who moved to take that roll on during the year. So there's lot happening, and I think Flight Centre has a great record with gender diversity. But as far as Board diversity, that question will be pushed back into 2021.

Next question from a shareholder. "Would the Board consider a combination live and digital AGM post COVID to allow those who are interstate to participate?"

Yes. That is a good question. And pre COVID, we were looking at doing that this year. Events overtook that. But clearly, next year, we now fully understand the technology. We're very good at that. So it would be my intention that, that's exactly what we would do.

Next question relates to our product basically, I'll paraphrase this one. Would we -- given what's happening in the market, would we look to offer more of the Airbnb stays, holiday and caravan parts style of offerings to capitalize on an opportunity in the short term?